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                               SECOND AMENDMENT TO
                           SECOND AMENDED AND RESTATED
                    WAREHOUSING CREDIT AND SECURITY AGREEMENT
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SECOND AMENDMENT TO SECOND AMENDED AND RESTATED WAREHOUSING CREDIT AND SECURITY
AGREEMENT (this "Amendment") dated as of March 30, 2004, among FIRST NLC
FINANCIAL SERVICES, LLC, a Florida limited liability company ("First NLC"), NLC,
INC., a Tennessee corporation ("NLC, Inc.") (First NLC and NLC, Inc. are
collectively referred to as "Borrower") and RESIDENTIAL FUNDING CORPORATION, a
Delaware corporation ("Lender").

A.   Borrower and Lender have entered into a revolving mortgage warehousing
     facility with a present Warehousing Commitment Amount of $135,000,000,
     temporarily increased to $160,000,000, which is evidenced by a Promissory
     Note dated November 1, 2003 (the "Note"), and by a Second Amended and
     Restated Warehousing Credit and Security Agreement dated as of November 1,
     2003 (as the same may have been and may be amended or supplemented, the
     "Agreement").

B.   Borrower has requested that Lender further increase the temporary increase
     of the Warehousing Commitment Amount, and Lender has agreed to such
     increase, subject to the terms and conditions of this Amendment.

NOW, THEREFORE, the parties to this Amendment agree as follows:

1.   Subject to Borrower's satisfaction of the conditions set forth in Section
     5, the effective date of this Amendment is March 23, 2004 ("Effective
     Date").

2.   Unless otherwise defined in this Amendment, all capitalized terms have the
     meanings given to those terms in the Agreement. Defined terms may be used
     in the singular or the plural, as the context requires. The words
     "include," "includes" and "including" are deemed to be followed by the
     phrase "without limitation." Unless the context in which it is used
     otherwise clearly requires, the word "or" has the inclusive meaning
     represented by the phrase "and/or." References to Sections and Exhibits are
     to Sections and Exhibits of this Amendment unless otherwise expressly
     provided.

3.   Article 12 of the Agreement is amended and restated in its entirety as set
     forth in Article 12 attached to this Amendment. All references in the
     Agreement and other Loan Documents to Article 12 (including each and every
     Section in Article 12) are deemed to refer to the new Article 12.

4.   Exhibit H to the Agreement is amended and restated in its entirety as set
     forth in Exhibit H to this Amendment. All references in the Agreement and
     the other Loan Documents to Exhibit H are deemed to refer to the new
     Exhibit H.

5.   Borrower must deliver to Lender (a) two executed copies of this Amendment
     and (b) a $350 document production fee.

6.   Borrower represents, warrants and agrees that (a) there exists no Default
     or Event of Default under the Loan Documents, (b) the Loan Documents
     continue to be the legal, valid and binding agreements and obligations of
     Borrower, enforceable in accordance with their terms, as modified by this
     Amendment, (c) Lender is not in default under any of the Loan Documents and
     Borrower has no offset or defense to its performance or obligations under
     any of the Loan Documents, (d) except for changes permitted by the

                                       -1-

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     terms of the Agreement, Borrower's representations and warranties contained
     in the Loan Documents are true, accurate and complete in all respects as of
     the Effective Date and (e) there has been no material adverse change in
     Borrower's financial condition from the date of the Agreement to the
     Effective Date.

7.   Except as expressly modified, the Agreement is unchanged and remains in
     full force and effect, and Borrower ratifies and reaffirms all of its
     obligations under the Agreement and the other Loan Documents.

8.   This Amendment may be executed in any number of counterparts, each of which
     will be deemed an original, but all of which shall together constitute but
     one and the same instrument.

IN WITNESS WHEREOF, Borrower and Lender have caused this Amendment to be duly
executed on their behalf by their duly authorized officers as of the day and
year above written.

                                         FIRST NLC FINANCIAL SERVICES, LLC,
                                         a Florida limited liability company

                                         By: /s/ Jeffrey M. Henschel
                                             -----------------------------------
                                         Its: President
                                              ----------------------------------

                                         NLC, INC.,
                                         a Tennessee corporation

                                         By: /s/ Jeffrey M. Henschel
                                             -----------------------------------
                                         Its: President
                                              ----------------------------------

                                         RESIDENTIAL FUNDING CORPORATION,
                                         a Delaware corporation

                                         By: /s/ Illegible
                                             -----------------------------------
                                         Its: Director
                                             -----------------------------------

                                       -2-

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12. DEFINITIONS

12.1. Defined Terms

Capitalized terms defined below or elsewhere in this Agreement have the
following meanings or, as applicable, the meanings given to those terms in
Exhibits to this Agreement:

"Accrual Basis" has the meaning set forth in Section 3.1(c).

"Advance Rate" means, with respect to any Eligible Loan, the Advance Rate set
forth in Exhibit H for that type of Eligible Loan.

"Affiliate" means, when used with reference to any Person, (a) each Person that,
directly or indirectly, controls, is controlled by or is under common control
with, the Person referred to, (b) each Person that beneficially owns or holds,
directly or indirectly, 5% or more of any class of voting Equity Interests of
the Person referred to, (c) each Person, 5% or more of the voting Equity
Interests of which is beneficially owned or held, directly or indirectly, by the
Person referred to, and (d) each of such Person's officers, directors, joint
venturers and partners. For these purposes, the term "control" (including the
terms "controlled by" and "under common control with") means the possession,
directly or indirectly, of the power to direct or cause the direction of the
management and policies of the Person in question.

"Aged Mortgage Loans" means Mortgage Loans against which a Warehousing Advance
has been outstanding for longer than the Standard Warehouse Period, provided
that Aged Mortgage Loans are permitted for such type of Mortgage Loan.

"Aged Warehouse Period" means the maximum number of days a Warehouse Advance
against Aged Mortgage Loans of a particular type may remain outstanding as set
forth in Exhibit H.

"Agency Security" means a Mortgage-backed Security issued or guaranteed by
Fannie Mae, Freddie Mac or Ginnie Mae.

"Agreement" means this Second Amended and Restated Warehousing Credit and
Security Agreement, either as originally executed or as it may be amended,
restated, renewed or replaced.

"Appraised Property Value" means with respect to an interest in real property,
the then current fair market value of the real property and any improvements on
it as of recent date determined in accordance with Title XI of FIRREA by a
qualified appraiser who is a member of the American Institute of Real Estate
Appraisers or other group of professional appraisers.

"Approved Custodian" means a pool custodian or other Person that Lender deems
acceptable, in its sole discretion, to hold Mortgage Loans for inclusion in a
Mortgage Pool or to hold Mortgage Loans as agent for an Investor that has issued
a Purchase Commitment for those Mortgage Loans.

"Audited Statement Date" means the date of Borrower's most recent audited
financial statements (and, if applicable, Borrower's Subsidiaries, on a
consolidated basis) delivered to Lender under the Existing Agreement or this
Agreement.

"Bank One" means Bank One, National Association, or any successor bank.

"Bank One Prime Rate" means, as of any date of determination, the highest prime
rate quoted by Bank One and most recently published by Bloomberg L.P. If the
prime rate for Bank One is not

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quoted or published for any period, then during that period the term "Bank One
Prime Rate" means the highest prime rate published in the most recent edition of
The Wall Street Journal in its regular column entitled "Money Rates."

"Borrower" has the meaning set forth in the first paragraph of this Agreement.

"BPO Value" means, with respect to the improved real property securing any
Mortgage Loan or any Repurchased Mortgage Loan, the lowest fair market value for
such real property or ownership interest and occupancy rights as set forth in an
opinion of a real estate broker acceptable to the Lender, in its sole
discretion, as to the value of such improved real property if sold within a
30-day marketing period. Each such broker price opinion shall be obtained from a
real estate broker with substantial experience in the purchase and sale of
similar properties in the geographic area in which the real property or
ownership interest and occupancy rights to be valued is located.

"Business Day" means any day other than Saturday, Sunday or any other day on
which national banking associations are closed for business.

"Buydown" has the meaning set forth in Section 3.4.

"Calendar Quarter" means the 3 month period beginning on each January 1, April
1, July 1 or October 1.

"Cash Collateral Account" means a demand deposit account maintained at the
Funding Bank in Lender's name and designated for receipt of the proceeds of the
sale or other disposition of Collateral.

"Check Disbursement Account" means a demand deposit account maintained at the
Funding Bank in Borrower's name and under the control of Lender for clearing
checks written by Borrower to fund Mortgage Loans funded by Warehousing
Advances.

"Closing Date" has the meaning set forth in the Recitals to this Agreement.

"Collateral" has the meaning set forth in Section 4.1.

"Collateral Documents" means, with respect to each Mortgage Loan, (a) the
Mortgage Note, the Mortgage and all other documents including, if applicable,
any Security Agreement, executed in connection with or relating to the Mortgage
Loan; (b) as applicable, the original lender's ALTA Policy of Title Insurance or
its equivalent, documents evidencing the FHA Commitment to Insure, the VA
Guaranty or private mortgage insurance, the appraisal, the Regulation Z
statement, the environmental assessment, the engineering report, certificates of
casualty or hazard insurance, credit information on the maker of the Mortgage
Note, the HUD-1 or corresponding purchase advice; (c) any other document listed
in Exhibit B; and (d) any other document that is customarily desired for
inspection or transfer incidental to the purchase of any Mortgage Note by an
Investor or that is customarily executed by the seller of a Mortgage Note to an
Investor.

"Committed Purchase Price" means for an Eligible Loan (a) the dollar price as
set forth in the Purchase Commitment or, if the price is not expressed in
dollars, the product of the Mortgage Note Amount multiplied by the price
(expressed as a percentage) as set forth in the Purchase Commitment for the
Eligible Loan, or (b) if the Eligible Loan is to be used to back an Agency
Security, an amount equal to the product of the Mortgage Note Amount multiplied
by the price (expressed as a percentage) as set forth in the Purchase Commitment
for the Agency Security.

"Compliance Certificate" means a certificate executed on behalf of Borrower by
its manager having principal financial accounting responsibilities,
substantially in the form of Exhibit E.

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"Credit Score" means a mortgagor's overall consumer credit rating, represented
by a single numeric credit score using the Fair, Isaac consumer credit scoring
system, provided by a credit repository acceptable to Lender and the Investor
that issued the Purchase Commitment covering the related Mortgage Loan (if a
Purchase Commitment is required by Exhibit H).

"Debt" means (a) all indebtedness or other obligations of a Person (and, if
applicable, that Person's Subsidiaries, on a consolidated basis) that, in
accordance with GAAP, would be included in determining total liabilities as
shown on the liabilities side of a balance sheet of that Person on the date of
determination, plus (b) all indebtedness or other obligations of that Person
(and, if applicable, that Person's Subsidiaries, on a consolidated basis) for
borrowed money or for the deferred purchase price of property or services. For
purposes of calculating a Person's Debt, Subordinated Debt due more than 6
months after the Warehousing Maturity Date may be excluded from that Person's
indebtedness.

"Default" means the occurrence of any event or existence of any condition that,
but for the giving of Notice or the lapse of time, would constitute an Event of
Default.

"Default Rate" means, for any Warehousing Advance, the Interest Rate applicable
to that Warehousing Advance plus 4% per annum. If no Interest Rate is applicable
to a Warehousing Advance, "Default Rate" means, for that Warehousing Advance,
the highest Interest Rate then applicable to any outstanding Warehousing Advance
plus 4% per annum.

"Depository Benefit" means the compensation received by Lender, directly or
indirectly, as a result of Borrower's maintenance of Eligible Balances with a
Designated Bank.

"Designated Bank" means any bank designated by Lender as a Designated Bank, but
only for as long as Lender has an agreement under which Lender receives
Depository Benefits from that bank.

"Designated Bank Charges" means any fees, interest or other charges that would
otherwise be payable to a Designated Bank in connection with Eligible Balances
maintained at the Designated Bank, including deposit insurance premiums, service
charges and any other charges that may be imposed by governmental authorities
from time to time.

"Discontinued Loan" has the meaning set forth in the GMAC-RFC Client Guide.

"Earnings Allowance" has the meaning set forth in Section 3.1(b).

"Earnings Credit" has the meaning set forth in Section 3.1(b).

"Electronic Advance Request" means an electronic transmission through RFConnects
Delivery containing the same information as Exhibit A to this Agreement.

"Electronic Tracking Agreement" means an Electronic Tracking Agreement, on the
form prescribed by Lender, among Borrower, Lender, MERS and MERSCORP, Inc.

"Eligible Balances" means all funds of or maintained by Borrower (and, if
applicable, Borrower's Subsidiaries) in demand deposit or time deposit accounts
at a Designated Bank, minus balances to support float, reserve requirements and
any other reductions that may be imposed by governmental authorities from time
to time.

"Eligible Loan" means a Single Family Mortgage Loan that satisfies the
conditions and requirements set forth in Exhibit H.

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"Eligible Mortgage Pool" means a Mortgage Pool for which (a) an Approved
Custodian has issued its initial certification, (b) there exists a Purchase
Commitment covering the Agency Security to be issued on the basis of that
certification and (c) the Agency Security will be delivered to Lender.

"Equity Interests" means all shares, interests, participations or other
equivalents, however, designated, of or in a Person (other than a natural
person), whether or not voting, including common stock, membership interests,
warrants, preferred stock, convertible debentures and all agreements,
instruments and documents convertible, in whole or in part, into any one or more
of the foregoing.

"ERISA" means the Employee Retirement Income Security Act of 1974 and all rules
and regulations promulgated under that statute, as amended, and any successor
statute, rules, and regulations.

"ERISA Affiliate" means any trade or business (whether or not incorporated) that
is a member of a group of which Borrower is a member and that is treated as a
single employer under Section 414 of the Internal Revenue Code.

"Event of Default" means any of the conditions or events set forth in Section
10.1.

"Excess Buydown" has the meaning set forth in Section 3.4.

"Exchange Act" means the Securities Exchange Act of 1934 and all rules and
regulations promulgated under that statute, as amended, and any successor
statute, rules, and regulations.

"Exhibit B" means Exhibit B, Exhibit B-REP, as applicable to the type of
Eligible Loan against which a Warehousing Advance is to be made.

"Existing Agreement" means the First Amended and Restated Warehousing Credit and
Security Agreement dated as of November 15, 2002, as amended, between Borrower
and Lender.

"Fair Market Value" means, at any time for an Eligible Loan or a related Agency
Security (if the Eligible Loan is to be used to back an Agency Security) as of
any date of determination, (a) the Committed Purchase Price if the Eligible Loan
is covered by a Purchase Commitment from Fannie Mae or Freddie Mac or the
Eligible Loan is to be exchanged for an Agency Security and that Agency Security
is covered by a Purchase Commitment from an Investor, or (b) otherwise, the
market price for such Eligible Loan or Agency Security, determined by Lender
based on market data for similar Mortgage Loans or Agency Securities and such
other criteria as Lender deems appropriate in its sole discretion.

"Fannie Mae" means Fannie Mae, a corporation created under the laws of the
United States, and any successor corporation or other entity.

"FHA" means the Federal Housing Administration and any successor agency or other
entity.

"FHA Mortgage Loan" means an FHA-insured Mortgage Loan included in the Pledged
Loans.

"FICA" means the Federal Insurance Contributions Act and all rules and
regulations promulgated under that statute, as amended, and any successor
statute, rules and regulations.

"FIRREA" means the Financial Institutions Reform, Recovery and Enforcement Act
of 1989 and all rules and regulations promulgated under that statute, as
amended, and any successor statute, rules, and regulations.

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"First Mortgage" means a Mortgage that constitutes a first Lien on the real
property and improvements described in or covered by that Mortgage.

"First Mortgage Loan" means a Mortgage Loan secured by a First Mortgage.

"FIRST NLC FINANCIAL SERVICES, LLC" has the meaning set forth in the first
paragraph of this Agreement.

"Forward Commitment" means the forward commitment of First NLC to sell Mortgage
Loans to Lender, obligating First NLC to deliver $230,000,000 of Mortgage Loans
to Lender between October 1, 2003, and September 30, 2005, and any substitute,
amendment or renewal thereof.

"Freddie Mac" means the Federal Home Loan Mortgage Corporation, a corporation
created under the laws of the United States, and any successor corporation or
other entity.

"Funding Bank" means Bank One or any other bank designated by Lender as a
Funding Bank.

"Funding Bank Agreement" means a letter agreement on the form prescribed by
Lender between the Funding Bank and Borrower authorizing Lender's access to the
Operating Account and the Check Disbursement Account.

"GAAP" means generally accepted accounting principles set forth in opinions and
pronouncements of the Accounting Principles Board and the American Institute of
Certified Public Accountants and in statements and pronouncements of the
Financial Accounting Standards Board, or in opinions, statements or
pronouncements of any other entity approved by a significant segment of the
accounting profession, which are applicable to the circumstances as of the date
of determination.

"Gestation Agreement" means an agreement under which Borrower agrees to sell or
finance (a) a Mortgage Loan prior to the date of purchase by an Investor or (b)
a Mortgage Pool prior to the date a Mortgage-backed Security backed by the
Mortgage Pool is issued.

"Ginnie Mae" means the Government National Mortgage Association, an agency of
the United States government, and any successor agency or other entity.

"GMAC-RFC Client Guide" means the applicable loan purchase guide issued by
Lender, as the same may be amended or replaced.

"Government Mortgage Loan" means a closed-end First Mortgage Loan that is either
HUD/FHA insured (other than a HUD 203(K) Mortgage Loan or a Title I Mortgage
Loan) or VA guaranteed.

"Hedging Arrangements" means, with respect to any Person, any agreements or
other arrangements (including interest rate swap agreements, interest rate cap
agreements and forward sale agreements) entered into to protect that Person
against changes in interest rates or the market value of assets.

"High LTV Mortgage Loan" has the meaning set forth in Exhibit H.

"HUD" means the Department of Housing and Urban Development, and any successor
agency or other entity.

"HUD 203(K) Mortgage Loan" means an FHA-insured closed-end First Mortgage Loan
to an individual obligor the proceeds of which will be used for the purpose of
rehabilitating and repairing the related single family property, and which
satisfies the definition of "rehabilitation loan" in 24 C.F.R. 203.50(a).

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"Indemnified Liabilities" has the meaning set forth in Section 11.2.

"Indemnitees" has the meaning set forth in Section 11.2.

"Interest Rate" means, for any Warehousing Advance, the floating rate of
interest specified for that Warehousing Advance in Exhibit H.

"Interim Statement Date" means the date of the most recent unaudited financial
statements of Borrower (and, if applicable, Borrower's Subsidiaries, on a
consolidated basis) delivered to Lender under the Existing Agreement or this
Agreement.

"Internal Revenue Code" means the Internal Revenue Code of 1986, Title 26 of the
United States Code, and all rules, regulations and interpretations issued under
those statutory provisions, as amended, and any subsequent or successor federal
income tax law or laws, rules, regulations and interpretations.

"Investment Company Act" means the Investment Company Act of 1940 and all rules
and regulations promulgated under that statute, as amended, and any successor
statute, rules, and regulations.

"Investor" means Fannie Mae, Freddie Mac or a financially responsible private
institution that Lender deems acceptable, in its sole discretion, to issue
Purchase Commitments with respect to a particular category of Eligible Loans.

"Lender" has the meaning set forth in the first paragraph of this Agreement.

"Leverage Ratio" means the ratio of a Person's Debt to Tangible Net Worth. For
purposes of calculating a Person's Leverage Ratio, Debt arising under Hedging
Arrangements, to the extent of assets arising under those Hedging Arrangements,
may be excluded from that Person's Debt.

"LIBOR" means, for each week, the rate of interest per annum that is equal to
the arithmetic mean of the U.S. Dollar London Interbank Offered Rates for 1
month periods of certain U.S. banks as of 11:00 a.m. (London time) on the first
Business Day of each week on which the London Interbank market is open, as
published by Bloomberg L.P. If those interest rates are not offered or published
for any period, then during that period LIBOR means the London Interbank Offered
Rate for 1 month periods as published in The Wall Street Journal in its regular
column entitled "Money Rates" on the first Business Day of each week on which
the London Interbank market is open.

"Lien" means any lien, mortgage, deed of trust, pledge, security interest,
charge or encumbrance of any kind (including any conditional sale or other title
retention agreement, any lease in the nature of such an agreement and any
agreement to give any security interest).

"Liquid Assets" means the following assets owned by a Person (and, if
applicable, that Person's Subsidiaries, on a consolidated basis) as of any date
of determination: (a) unrestricted and unencumbered cash, (b) funds on deposit
in accounts with any bank located in the United States (net of the aggregate
amount payable under all outstanding and unpaid checks, drafts and similar items
drawn by a Person against those accounts), (c) investment grade commercial
paper, (d) money market funds, and (e) marketable securities, plus, in the case
of Borrower and in the absence of a Default or Event of Default, (f) the amount
of any Buydowns and Excess Buydowns.

"Loan Documents" means this Agreement, the Warehousing Note, any agreement of
Borrower relating to Subordinated Debt, and each other document, instrument or
agreement executed by Borrower in connection with any of those documents,
instruments and agreements, as originally executed or as any of the same may be
amended, restated, renewed or replaced.

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"Loan Package Fee" has the meaning set forth in Section 3.6.

"Loan-to-Value Ratio" means, for any Mortgage Loan, the ratio of (a) the maximum
amount that may be borrowed under the Mortgage Loan (whether or not borrowed) at
the time of origination, plus the Mortgage Note Amounts of all other Mortgage
Loans secured by senior or pari passu Liens on the related property, to (b) the
Appraised Property Value of the related property.

"Manufactured Home" means a structure that is built on a permanent chassis
(steel frame) with the wheel assembly necessary for transportation in one or
more sections to a permanent site or semi-permanent site.

"Margin Stock" has the meaning assigned to that term in Regulation U of the
Board of Governors of the Federal Reserve System, as amended.

"MERS" means Mortgage Electronic Registrations Systems, Inc. and any successor
entity.

"Miscellaneous Fees and Charges" means the Collateral Operations Fees set forth
on Lender's fee schedule attached as Exhibit I and all miscellaneous
disbursements, charges and expenses incurred by or on behalf of Lender for the
handling and administration of Warehousing Advances and Collateral, including
costs for Uniform Commercial Code, tax lien and judgment searches conducted by
Lender, filing fees, charges for wire transfers and check processing charges,
charges for security delivery fees, charges for overnight delivery of Collateral
to Investors, recording fees, Funding Bank service fees and overdraft charges
and Designated Bank Charges. Upon not less than 3 Business Days' prior Notice to
Borrower, Lender may modify the Collateral Operations Fees set forth in Exhibit
I to conform to current Lender practices and, as so modified, the revised
Exhibit I will become part of this Agreement.

"Mortgage" means a mortgage or deed of trust on real property that is improved
and substantially completed (including real property to which a Manufactured
Home has been affixed in a manner such that the Lien of a mortgage or deed of
trust would attach to the Manufactured Home under applicable real property law).

"Mortgage-backed Securities" means securities that are secured or otherwise
backed by Mortgage Loans.

"Mortgage Loan" means any loan evidenced by a Mortgage Note and secured by a
Mortgage and, if applicable, a Security Agreement.

"Mortgage Note" means a promissory note secured by one or more Mortgages and, if
applicable, one or more Security Agreements.

"Mortgage Note Amount" means, as of any date of determination, the then
outstanding and unpaid principal amount of a Mortgage Note (whether or not an
additional amount is available to be drawn under that Mortgage Note).

"Mortgage Pool" means a pool of one or more Pledged Loans on the basis of which
a Mortgage-backed Security is to be issued.

"Multiemployer Plan" means a "multiemployer plan" as defined in Section 4001
(a)(3) of ERISA, to which either Borrower or any ERISA Affiliate of Borrower has
any obligation with respect to its employees.

"NLC, INC." has the meaning set forth in the first paragraph of this Agreement.

"Nonperforming Mortgage Loan" has the meaning set forth in Exhibit H.

                                    Page 12-7

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"Non-Usage Fee" has the meaning set forth in Section 3.5.

"Notices" has the meaning set forth in Section 11.1.

"Obligations" means all indebtedness, obligations and liabilities of Borrower to
Lender and Lender's Subsidiaries (whether now existing or arising after the date
of this Agreement, voluntary or involuntary, joint or several, direct or
indirect, absolute or contingent, liquidated or unliquidated, or decreased or
extinguished and later increased and however created or incurred), including
Borrower's obligations and liabilities to Lender under the Loan Documents and
disbursements made by Lender for Borrower's account.

"Operating Account" means a demand deposit account maintained at the Funding
Bank in Borrower's name and designated for funding that portion of each Eligible
Loan not funded by a Warehousing Advance made against that Eligible Loan and for
returning any excess payment from an Investor for a Pledged Loan or Pledged
Security.

"Overdraft Advance" has the meaning set forth in Section 3.8.

"Parent" means NLC Financial Services, LLC, a Delaware limited liability
company, and the parent of First NLC.

"Participant" has the meaning set forth in Section 11.8.

"Person" means and includes natural persons, corporations, limited liability
companies, limited liability partnerships, limited partnerships, general
partnerships, joint stock companies, joint ventures, associations, companies,
trusts, banks, trust companies, land trusts, business trusts or other
organizations, whether or not legal entities, and governments and agencies and
political subdivisions of those governments.

"Plan" means each employee benefit plan (whether in existence on the date of
this Agreement or established after that date), as that term is defined in
Section 3 of ERISA, maintained for the benefit of directors, officers or
employees of Borrower or any ERISA Affiliate.

"Pledged Assets" means, collectively, Pledged Loans and Pledged Securities.

"Pledged Hedging Accounts" has the meaning set forth in Section 4.1 (h).

"Pledged Hedging Arrangements" has the meaning set forth in Section 4.1 (h).

"Pledged Loans" has the meaning set forth in Section 4.1(b).

"Pledged Securities" has the meaning set forth in Section 4.1(c).

"Prime Mortgage Loan" has the meaning set forth in Exhibit H.

"Prohibited Transaction" has the meanings set forth for such term in Section
4975 of the Internal Revenue Code and Section 406 of ERISA.

"Purchase Commitment" means a written commitment, in form and substance
satisfactory to Lender, issued in favor of Borrower by an Investor under which
that Investor commits to purchase Mortgage Loans or Mortgage-backed Securities.

"Rating Agency" means any nationally recognized statistical rating organization
that in the ordinary course of its business rates Mortgage-backed Securities.

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"Receivables" has the meaning set forth in Section 4.1(e).

"Release Amount" has the meaning set forth in Section 4.3(f).

"Repurchased Mortgage Loan" has the meaning set forth in Exhibit H.

"Restriction List" and "Restriction Lists" means each and every list of Persons
to whom the Government of the United States prohibits or otherwise restricts the
provision of financial services. For the purposes of this Agreement, Restriction
Lists include the list of Specifically Designated Nationals and Blocked Persons
established pursuant to Executive Order 13224 (September 23, 2001) and
maintained by the Office of Foreign Assets Control, U.S. Department of the
Treasury, current as of the day the Restriction List is used for purposes of
comparison in accordance with the requirements of this Agreement.

"RFC Mortgage Loan" means a Mortgage Loan covered by a Purchase Commitment
issued by Lender.

"RFConnects Delivery" means Lender's proprietary service to support the
electronic exchange of information between Lender and Borrower, including
Warehousing Advance Requests, shipping requests, payoff requests, wire transfer
instructions, security delivery instructions, activity reports and exception
reports.

"RFConnects Pledge Agreement" means an agreement (on the then current form
prescribed by Lender) granting Lender a security interest in Mortgage Loans for
which Borrower has requested Warehousing Advances using RFConnects Delivery.

"Second Mortgage" means a Mortgage that constitutes a second Lien on the real
property and improvements described in or covered by that Mortgage.

"Second Mortgage Loan" means a Mortgage Loan secured by a Second Mortgage.

"Security Agreement" means a security agreement or other agreement that creates
a Lien on personal property, including furniture, fixtures and equipment, to
secure repayment of a Mortgage Loan.

"Servicing Contract" means, with respect to any Person, the arrangement, whether
or not in writing, under which that Person has the right to service Mortgage
Loans.

"Servicing Portfolio" means, as to any Person, the unpaid principal balance of
Mortgage Loans serviced by that Person under Servicing Contracts, minus the
principal balance of all Mortgage Loans that are serviced by that Person for
others under subservicing arrangements.

"Single Family Mortgage Loan" means a Mortgage Loan secured by a Mortgage on
improved real property on which is located a 1-to-4 family residence.

"Standard Warehouse Period" means, for any Mortgage Loan, the maximum number of
days a Warehousing Advance against that type of Mortgage Loan, other than
against an Aged Mortgage Loan, may remain outstanding, as set forth in Exhibit
H.

"Statement Date" means the Audited Statement Date or the Interim Statement Date,
as applicable.

"Sublimit" means the aggregate amount of Warehousing Advances (expressed as a
dollar amount or as a percentage of the Warehousing Commitment Amount) that is
permitted to be outstanding at any one time against a specific type of Eligible
Loan.

                                    Page 12-9

<PAGE>

"Subordinated Debt" means (a) all indebtedness of Borrower for borrowed money
that is effectively subordinated in right of payment to all present and future
Obligations either (1) under a Subordination of Debt Agreement on the form
prescribed by Lender or (2) otherwise on terms acceptable to Lender, and (b)
solely for purposes of Section 8.5, all indebtedness of Borrower that is
required to be subordinated by Sections 5.1(b) and 7.11.

"Subprime Mortgage Loan" has the meaning set forth in Exhibit H

"Subsidiary" means any corporation, partnership, association or other business
entity in which more than 50% of the shares of stock or other ownership
interests having voting power for the election of directors, managers, trustees
or other Persons performing similar functions is at the time owned or controlled
by any Person either directly or indirectly through one or more Subsidiaries
of that Person.

"Tangible Net Worth" means the excess of a Person's (and, if applicable, that
Person's Subsidiaries, on a consolidated basis) total assets over total
liabilities as of the date of determination, each determined in accordance with
GAAP applied in a manner consistent with the most recent audited financial
statements delivered to Lender under the Existing Agreement, plus that portion
of Subordinated Debt due more than 6 months after the Warehousing Maturity Date.
For purposes of calculating a Person's Tangible Net Worth, advances or loans to
managers, members, employees or Affiliates, investments in Affiliates, assets
pledged to secure any liabilities not included in the Debt of that Person,
intangible assets, those other assets that would be deemed by HUD to be
non-acceptable in calculating adjusted net worth in accordance with its
requirements in effect as of that date, as those requirements appear in the
"Consolidated Audit Guide for Audits of HUD Programs," and other assets Lender
deems unacceptable, in its sole discretion, must be excluded from that Person's
total assets.

"Third Party Originated Loan" means a Mortgage Loan originated and funded by a
third party (other than with funds provided by Borrower at closing to purchase
the Mortgage Loan) and subsequently purchased by Borrower.

"Title I Mortgage Loan" means an FHA co-insured closed-end First Mortgage Loan
or Second Mortgage Loan that is underwritten in accordance with HUD underwriting
standards for the Title I Property Improvement Program set forth in, and that is
reported for insurance under, the Mortgage Insurance Program authorized and
administered under Title I of the National Housing Act of 1934, as amended, and
the regulations related to that statute.

"Trust Receipt" means a trust receipt in a form approved by and under which
Lender may deliver any document relating to the Collateral to Borrower for
correction or completion.

"Unused Portion" has the meaning set forth in Section 3.5.

"Used Portion" has the meaning set forth in Section 3.5.

"Warehousing Advance" means a disbursement by Lender under Section 1.1.

"Warehousing Advance Request" has the meaning set forth in Section 2.1.

"Warehousing Collateral Value" means, as of any date of determination, (a) with
respect to any Eligible Loan, the lesser of (1) the amount of any Warehousing
Advance made, or that could be made, against such Eligible Loan under Exhibit H
or (2) an amount equal to the Advance Rate for the applicable type of Eligible
Loan multiplied by the Fair Market Value of such Eligible Loan; (b) if Eligible
Loans have been exchanged for Agency Securities, the lesser of (1) the amount of
any Warehousing Advances outstanding against the Eligible Loans backing the
Agency Securities or (2) an amount equal to the Advance Rates for the applicable
types of Eligible Loans

                                   Page 12-10

<PAGE>

backing the Agency Securities multiplied by the Fair Market Value of the Agency
Securities; and (c) with respect to cash, the amount of the cash.

"Warehousing Commitment" means the obligation of Lender to make Warehousing
Advances to Borrower under Section 1.1.

"Warehousing Commitment Amount" means $135,000,000. Notwithstanding the
foregoing, during the period from March 6, 2004, to and including May 31, 2004,
the Warehousing Commitment Amount will be temporarily increased to $200,000,000.
On the first Business Day following the expiration of the temporary increase of
the Warehousing Commitment Amount, Borrower must repay to Lender the amount by
which the outstanding Warehousing Advances exceed the Warehousing Commitment
Amount.

"Warehousing Fee" has the meaning set forth in Section 3.6.

"Warehousing Maturity Date" has the meaning set forth in Section 1.2.

"Warehousing Note" has the meaning set forth in Section 1.3.

"Wet Settlement Advance" means with respect to any Warehousing Advance, the time
from the date the Warehousing Advance is made until the date of Lender's receipt
of the Collateral Documents required by Article 2 and the Exhibits and documents
referenced in that Article.

"Wire Disbursement Account" means a demand deposit account maintained at the
Funding Bank in Lender's name for clearing wire transfers requested by Borrower
to fund Warehousing Advances.

"Wire Fee" has the meaning set forth in Section 3.6.

12.2. Other Definitional Provisions; Terms of Construction

12.2 (a) Accounting terms not otherwise defined in this Agreement have the
         meanings given to those terms under GAAP.

12.2 (b) Defined terms may be used in the singular or the plural, as the context
         requires.

12.2 (c) All references to time of day mean the then applicable time in
         Chicago, Illinois, unless otherwise expressly provided.

12.2 (d) References to Sections, Exhibits, Schedules and like references
         are to Sections, Exhibits, Schedules and the like of this Agreement
         unless otherwise expressly provided.

12.2 (e) The words "include," "includes" and "including" are deemed to be
         followed by the phrase "without limitation."

12.2 (f) Unless the context in which it is used otherwise clearly requires,
         the word "or" has the inclusive meaning represented by the phrase
         "and/or."

12.2 (g) All incorporations by reference of provisions from other
         agreements are incorporated as if such provisions were fully set forth
         into this Agreement, and include all necessary definitions and related
         provisions from those other agreements. All provisions from other
         agreements incorporated into this Agreement by reference survive any
         termination of those other agreements until the Obligations of
         Borrower under this Agreement and the Warehousing Note are irrevocably
         paid in full and the Warehousing Commitment is terminated.

                                   Page 12-11

<PAGE>

12.2 (h) All references to the Uniform Commercial Code shall be deemed to
         be references to the Uniform Commercial Code in effect on the date of
         this Agreement in the applicable jurisdiction.

12.2 (i) Unless the context in which it is used otherwise clearly requires,
         all references to days, weeks and months mean calendar days, weeks and
         months.

                                End of Article 12

                                   Page 12-12

<PAGE>

                                                                       EXHIBIT H

--------------------------------------------------------------------------------
                         ELIGIBLE LOANS AND OTHER ASSETS
--------------------------------------------------------------------------------

                        First NLC Financial Services, LLC
                                    NLC, Inc.

LIMITATIONS ON WAREHOUSING ADVANCES AGAINST MORTGAGE LOANS

     Lender's obligation to make Warehousing Advances under the Agreement is
     subject to the following limitations:

          1.   No Warehousing Advance will be made against any Mortgage Loan
               that has been previously sold or pledged to obtain financing
               (whether or not such financing constitutes Debt) under another
               warehousing financing arrangement or a gestation agreement.

          2.   No Warehousing Advance will be made against any Mortgage Loan
               that Lender believes may be based on untrue, incomplete or
               inaccurate or fraudulent information or may otherwise be subject
               to fraud.

          3.   No Warehousing Advance will be made against a Mortgage Loan if
               any of the limitations set forth in this Exhibit H would be
               exceeded after giving effect to the Warehousing Advance.

          4.   No Warehousing Advance will be made against a Mortgage Loan with
               an original principal balance in excess of $2,000,000.

SUBLIMITS

     These general limitations apply to all Warehousing Advances against
     Eligible Loans:

          1.   Wet Settlement Advances:        40% of the Warehousing Commitment
                                               Amount.

          2.   Third Party Originated Loans:   Not Permitted

ELIGIBLE LOANS AND TERMS OF WAREHOUSING ADVANCES

     Subject to compliance with the terms and limitations set forth below and
     the terms, representations and warranties and the covenants in the
     Agreement, each of the following Mortgage Loans is an Eligible Loan for
     purposes of the Agreement:

1.   Prime Mortgage Loan

     (a) Definition: A First Mortgage Loan or a Second Mortgage Loan with the
     following characteristics:

          (i)  For a First Mortgage Loan:

                                        1

<PAGE>

               A. Underwritten substantially in accordance with Fannie Mae or
               Freddie Mac underwriting standards (except as to maximum amount);
               and

               B. Loan-to-Value Ratio not to exceed 80% or, if the Loan-to-Value
               Ratio exceeds 80%, the Prime Mortgage Loan is insured by or
               subject to a commitment for mortgage insurance in an amount and
               on terms and conditions that satisfy the underwriting standards
               of Fannie Mae or Freddie Mac; or

               C. A Government Mortgage Loan.

          (ii) For a Second Mortgage Loan:

               A. The credit of the obligor has been underwritten substantially
               in accordance with Fannie Mae or Freddie Mac underwriting
               standards; and

               B. Loan-to-Value Ratio not more than 100%.

     (b) Interest Rate:

          (i)  Other Mortgage Loans:      [*]% over LIBOR*

          (ii) Aged Mortgage Loans:       [*]% over LIBOR

     (c) Prime Sublimit:                  (i) from March 23, 2004, to and
                                          including May 31, 2004, $75,000,000;
                                          and (ii) thereafter, $65,000,000

          (i)  First Mortgage Loans:      (i) from March 23, 2004, to and
                                          including May 31, 2004, $75,000,000;
                                          and (ii) thereafter, $65,000,000

          (ii) Second Mortgage Loans:     (i) from March 23, 2004, to and
                                          including May 31, 2004, $16,750,000;
                                          and (ii) thereafter, $6,750,000

          (iii) Aged Mortgage Loans:      $2,500,000

     (d) Committed/Uncommitted:

          (i)  First Mortgage Loans:      Purchase Commitment required

          (ii) Second Mortgage Loans:     Purchase Commitment NOT required

     (e) Wet Settlement Advances:         Permitted

     (f) Aged Mortgage Loans:             Permitted for First Mortgage Loans
                                          only

     (g) Committed Advance Rate:

          (i)  First Mortgage Loans:      [*]% of the lesser of (i) the Mortgage
                                          Note Amount or (ii) the Committed
                                          Purchase Price

          (ii) RFC Mortgage Loans:        [*]% of the lesser of (i) of the
                                          Mortgage Note Amount or (ii) the
                                          Committed Purchase Price

     (h) Uncommitted Advance Rate:        [*]% of the Mortgage Note Amount

                                        2

<PAGE>

     (i) Standard Warehouse Period:        90 days

     (j) Aged Warehouse Period:            180 days

     (k) Required Prepayments:             On the day a Pledged Loan becomes an
                                           Aged Mortgage Loan, the Warehousing
                                           Advance against such Pledged Loan
                                           must be (a) repaid in full, to the
                                           extent the Aged Mortgage Loan
                                           Sublimit would be exceeded, or (b)
                                           otherwise, reduced by [*]% of the
                                           Mortgage Note Amount on the 15th day
                                           of each month commencing after 90
                                           days.

     *If at any time (i) the Forward Commitment is no longer in effect, or (ii)
     Borrowers fail to deliver to Lender Mortgage Loans as required by the terms
     of the Forward Commitment, the interest rates then in effect for Prime
     Mortgage Loans will increase by [*]% per annum. If Borrowers enter into a
     new commitment for the forward sale of Mortgage Loans by Borrowers to
     Lender, in an amount at least equal to $300,000,000, the interest rates
     then in effect for Prime Mortgage Loans (not including Aged Mortgage Loans)
     will be reduced by [*]% per annum.

2.   Subprime Mortgage Loan

     (a) Definition: A First Mortgage Loan or Second Mortgage Loan that has a
     risk rating of "A-," "B" or "C" (determined using underwriting standards
     that comply with industry standards in the sole judgment of Lender), and
     that is acceptable for purchase by at least two Investors.

     (b) Interest Rate:

          (i)  Other Mortgage Loans:       [*]% over LIBOR*

          (ii) Aged Mortgage Loans:        [*]% over LIBOR

     (c) Subprime Sublimit:                (i) from March 23, 2004, to and
                                           including May 31, 2004, $200,000,000;
                                           and (ii) thereafter, $135,000,000

          (i)  First Mortgage Loans:       (i) from March 23, 2004, to and
                                           including May 31, 2004, $200,000,000;
                                           and (ii) thereafter, $135,000,000

          (iii) Second Mortgage Loans:     (i) from March 23, 2004, to and
                                           including May 31, 2004, $25,000,000;
                                           and (ii) thereafter, $15,000,000

          (iv) Aged Mortgage Loans:        $2,500,000

     (d) Committed/Uncommitted:            Purchase Commitment NOT required

     (e) Wet Settlement Advances:          Permitted

     (f) Aged Mortgage Loans:              Permitted for First Mortgage Loans
                                           only

     (g) Committed Advance Rate:

                                        3

<PAGE>

          (i)  First Mortgage Loans:           [*]% of the lesser of (i) the
                                               Mortgage Note Amount or (ii) the
                                               Committed Purchase Price

          (ii) RFC Mortgage Loans:             [*]% of the lesser of (i) of the
                                               Mortgage Note Amount or (ii) the
                                               Committed Purchase Price

     (h)  Uncommitted "Advance Rate:

          (i)  First Mortgage Loans:           [*]% of the Mortgage Note Amount

          (ii) Second Mortgage Loans:          [*]% of the Mortgage Note Amount

     (i)  Standard Warehouse Period:           90 days

     (j)  Aged Warehouse Period:               180 days

     (k)  Required Prepayments:                On the day a Pledged Loan
                                               becomes an Aged Mortgage Loan,
                                               the Warehousing Advance against
                                               such Pledged Loan must be (a)
                                               repaid in full; to the extent
                                               the Aged Mortgage Loan Sublimit
                                               would be exceeded, or (b)
                                               otherwise, reduced by [*]% of
                                               the Mortgage Note Amount on the
                                               15th day of each month
                                               commencing after 90 days.

     *If at any time (i) the Forward Commitment is no longer in effect, or (ii)
     Borrowers fail to deliver to Lender Mortgage Loans as required by the terms
     of the Forward Commitment, the interest rates then in effect for Subprime
     Mortgage Loans will increase by [*]% per annum. If Borrowers enter into a
     new commitment for the forward sale of Mortgage Loans by Borrowers to
     Lender, in an amount at least equal to $300,000,000, the interest rates
     then in effect for Subprime Mortgage Loans (not including Aged Mortgage
     Loans) will be reduced by [*]% per annum.

3.   High LTV Mortgage Loan

     (a) Definition: A Second Mortgage Loan that meets the 125 Loan Program
     eligibility criteria set forth in the GMAC-RFC Client Guide and for which
     an AssetWise Certificate has been issued, and a First Mortgage Loan that
     meets the Home Solution Program eligibility criteria set forth in the
     GMAC-RFC Client Guide and for which an AssetWise Certificate has been
     issued.

     (b)  Interest Rate:                       [*]% over LIBOR*

     (c)  High LTV Sublimit:                   $5,000,000

     (d)  Committed/Uncommitted:               Purchase Commitment required
                                               from Lender

     (e)  Wet Settlement Advances:             Permitted

     (f)  Aged Mortgage Loans:                 Not Permitted

     (g)  Committed Advance Rate:

                                        4

<PAGE>

          (i)  First Mortgage Loans:           [*]% of the lesser of (i) the
                                               Mortgage Note Amount or (ii) the
                                               Committed Purchase Price

          (ii) Second Mortgage Loans:          [*]% of the lesser of (i) the
                                               Mortgage Note Amount or (ii) the
                                               Committed Purchase Price

          (iii) RFC Mortgage Loans:            [*]% of the lesser of (i) of the
                                               Mortgage Note Amount or (ii) the
                                               Committed Purchase Price

     (h)  Standard Warehouse Period:           45 days

     *If at any time (i) the Forward Commitment is no longer in effect, or (ii)
     Borrowers fail to deliver to Lender Mortgage Loans as required by the terms
     of the Forward Commitment, the interest rates then in effect for High LTV
     Mortgage Loans will increase by [*]% per annum. If Borrowers enter into a
     new commitment for the forward sale of Mortgage Loans by Borrowers to
     Lender, in an amount at least equal to $300,000,000, the interest rates
     then in effect for High LTV Mortgage Loans will be reduced by [*]% per
     annum.

4.   Repurchased Mortgage Loan/Nonperforming Mortgage Loan

     (a)  Definitions:

     Repurchased Mortgage Loan: A First Mortgage Loan that has been repurchased
     from an Investor or a Mortgage Pool pursuant to a Servicing Contract and
     for which the Warehousing Advance has been pre-approved by the Lender.

     Nonperforminq Mortgage Loan: A First Mortgage Loan or a Second Mortgage
     Loan that is not a High LTV Mortgage Loan and (i) is in the process of
     foreclosure, (ii) is 60 days or more delinquent or (iii) with respect to
     which the Aged Warehousing Period has expired.

     (b)  Interest Rate:                      [*]% over LIBOR

     (c)  Repurchased/Nonperforming Sublimit: $5,000,000

     (d)  Committed/Uncommitted:              Purchase Commitment NOT required

     (e)  Wet Settlement Advances:            Permitted

     (f)  Aged Mortgage Loans:                Not Permitted

     (g)  Advance Rate:                       [*]% of the lesser of (i) Lender's
                                              initial Warehousing Advance, (ii)
                                              the unpaid principal balance or
                                              (iii) the Appraised Property
                                              Value or BPO Value

     (h)  Standard Warehouse Period:          180 days

     (i)  Required Prepayments:               [*]% of the Mortgage Note Amount,
                                              paid each month occurring more
                                              than 90 days after the date of
                                              the Warehousing Advance

                                        5

<PAGE>

--------------------------------------------------------------------------------
                               FIRST AMENDMENT TO
                           SECOND AMENDED AND RESTATED
                    WAREHOUSING CREDIT AND SECURITY AGREEMENT
--------------------------------------------------------------------------------

FIRST AMENDMENT TO SECOND AMENDED AND RESTATED WAREHOUSING CREDIT AND SECURITY
AGREEMENT (this "Amendment") dated as of February 6, 2004, among FIRST NLC
FINANCIAL SERVICES, LLC, a Florida limited liability company ("First NLC"), NLC,
INC., a Tennessee corporation ("NLC, Inc.") (First NLC and NLC, Inc. are
collectively referred to as "Borrower") and RESIDENTIAL FUNDING CORPORATION, a
Delaware corporation ("Lender").

A.   Borrower and Lender have entered into a revolving mortgage warehousing
     facility with a present Warehousing Commitment Amount of $135,000,000,
     which is evidenced by a Promissory Note dated November 1, 2003 (the
     "Note"), and by a Second Amended and Restated Warehousing Credit and
     Security Agreement dated as of November 1, 2003 (as the same may have been
     and may be amended or supplemented, the "Agreement").

B.   Borrower has requested that Lender temporarily increase the Warehousing
     Commitment Amount, and Lender has agreed to such increase, subject to the
     terms and conditions of this Amendment.

NOW, THEREFORE, the parties to this Amendment agree as follows:

1.   Subject to Borrower's satisfaction of the conditions set forth in Section
     5, the effective date of this Amendment is February 6, 2004 ("Effective
     Date").

2.   Unless otherwise defined in this Amendment, all capitalized terms have the
     meanings given to those terms in the Agreement. Defined terms may be used
     in the singular or the plural, as the context requires. The words
     "include," "includes" and "including" are deemed to be followed by the
     phrase "without limitation." Unless the context in which it is used
     otherwise clearly requires, the word "or" has the inclusive meaning
     represented by the phrase "and/or." References to Sections and Exhibits are
     to Sections and Exhibits of this Amendment unless otherwise expressly
     provided.

3.   Article 12 of the Agreement is amended and restated in its entirety as set
     forth in Article 12 attached to this Amendment. All references in the
     Agreement and other Loan Documents to Article 12 (including each and every
     Section in Article 12) are deemed to refer to the new Article 12.

4.   Exhibit H to the Agreement is amended and restated in its entirety as set
     forth in Exhibit H to this Amendment. All references in the Agreement and
     the other Loan Documents to Exhibit H are deemed to refer to the new
     Exhibit H.

5.   Borrower must deliver to Lender (a) two executed copies of this Amendment,
     and (b) a $350 document production fee.

6.   Borrower represents, warrants and agrees that (a) there exists no Default
     or Event of Default under the Loan Documents, (b) the Loan Documents
     continue to be the legal, valid and binding agreements and obligations of
     Borrower, enforceable in accordance with their terms, as modified by this
     Amendment, (c) Lender is not in default under any of the Loan Documents and
     Borrower has no offset or defense to its performance or obligations under
     any of the Loan Documents, (d) except for changes permitted by the terms of
     the Agreement, Borrower's representations and warranties contained in the

                                      -1-

<PAGE>

     Loan Documents are true, accurate and complete in all respects as of the
     Effective Date and (e) there has been no material adverse change in
     Borrower's financial condition from the date of the Agreement to the
     Effective Date.

7.   Except as expressly modified, the Agreement is unchanged and remains in
     full force and effect, and Borrower ratifies and reaffirms all of its
     obligations under the Agreement and the other Loan Documents.

8.   This Amendment may be executed in any number of counterparts, each of which
     will be deemed an original, but all of which shall together constitute but
     one and the same instrument

IN WITNESS WHEREOF, Borrower and Lender have caused this Amendment to be duly
executed on their behalf by their duly authorized officers as of the day and
year above written.

                                         FIRST NLC FINANCIAL SERVICES, LLC.
                                         a Florida limited liability company

                                         By: /s/ Jeffrey M. Henschel
                                             -----------------------------------
                                         Its: President

                                         NLC, INC. a Tenhessee corporation

                                         By: /s/ Jeffrey M. Henschel
                                             -----------------------------------
                                         Its: President

                                         RESIDENTIAL FUNDING CORPORATION,
                                         a Delaware corporation

                                         By: /s/ Illegible
                                             -----------------------------------
                                         Its: Director

                                      -2-

<PAGE>

12.  DEFINITIONS

12.1. Defined Terms

Capitalized terms defined below or elsewhere in this Agreement have the
following meanings or, as applicable, the meanings given to those terms in
Exhibits to this Agreement:

"Accrual Basis" has the meaning set forth in Section 3.1(c).

"Advance Rate" means, with respect to any Eligible Loan, the Advance Rate set
forth in Exhibit H for that type of Eligible Loan.

"Affiliate" means, when used with reference to any Person, (a) each Person
that, directly or indirectly, controls, is controlled by or is under common
control with, the Person referred to, (b) each Person that beneficially owns
or holds, directly or indirectly, 5% of more of any class of voting Equity
Interests of the Person referred to, (c) each Person, 5% or more of the voting
Equity Interests of which is beneficially owned or held, directly or indirectly,
by the Person referred to, and (d) each of such Person's officers, directors,
joint venturers and partners. For these purposes, the term "control" (including
the terms "controlled by" and "under common control with") means the possession,
directly or indirectly, of the power to direct or cause the direction of the
management and policies of the Person in question.

"Aged Mortgage Loans" means Mortgage Loans against which a Warehousing Advance
has been outstanding for longer than the Standard Warehouse Period, provided
that Aged Mortgage Loans are permitted for such type of Mortgage Loan.

"Aged Warehouse Period" means the maximum number of days a Warehouse Advance
against Aged Mortgage Loans of a particular type may remain outstanding as set
forth in Exhibit H.

"Agency Security" means a Mortgage-backed Security issued or guaranteed by
Fannie Mae, Freddie Mac or Ginnie Mae.

"Agreement" means this Second Amended and Restated Warehousing Credit and
Security Agreement, either as originally executed or as it may be amended,
restated, renewed or replaced.

"Appraised Property Value" means with respect to an interest in real property,
the then current fair market value of the real property and any improvements on
it as of recent date determined in accordance with Title XI of FIRREA by a
qualified appraiser who is a member of the American Institute of Real Estate
Appraisers or other group of professional appraisers.

"Approved Custodian" means a pool custodian or other Person that Lender deems
acceptable, in its sole discretion, to hold Mortgage Loans for inclusion in a
Mortgage Pool or to hold Mortgage Loans as agent for an Investor that has issued
a Purchase Commitment for those Mortgage Loans.

"Audited Statement Date" means the date of Borrower's most recent audited
financial statements (and, if applicable, Borrower's Subsidiaries, on a
consolidated basis) delivered to Lender under the Existing Agreement or this
Agreement.

"Bank One" means Bank One, National Association, or any successor bank.

"Bank One Prime Rate" means, as of any date of determination, the highest prime
rate quoted by Bank One is not

                                   Page 12-1

<PAGE>

quoted or published for any period, then during that period the term "Bank One
Prime Rate" means the highest prime rate published in the most recent edition of
The Wall Street Journal in its regular column entitled "Money Rates."

"Borrower" has the meaning set forth in the first paragraph of this Agreement.

"Business Day" means any day other than Saturday, Sunday or any other day on
which national banking associations are closed for business.

"Buydown" has the meaning set forth in Section 3.4.

"Calendar Quarter" means the 3 month period beginning on each January 1, April
1, July 1 or October 1.

"Cash Collateral Account" means a demand deposit account maintained at the
Funding Bank in Lender's name and designated for receipt of the proceeds of the
sale or other disposition of Collateral.

"Check Disbursement Account" means a demand deposit account maintained at the
Funding Bank in Borrower's name and under the control of Lender for clearing
checks written by Borrower to fund Mortgage Loans funded by Warehousing
Advances.

"Closing Date" has the meaning set forth in the Recitals to this Agreement.

"Collateral" has the meaning set forth in Section 4.1.

"Collateral Documents" means, with respect to each Mortgage Loan, (a) the
Mortgage Note, the Mortgage and all other documents including, if applicable,
any Security Agreement, executed in connection with or relating to the Mortgage
Loan; (b) as applicable, the original lender's ALTA Policy of Title Insurance or
its equivalent, documents evidencing the FHA Commitment to Insure, the VA
Guaranty or private mortgage insurance, the appraisal, the Regulation Z
statement, the environmental assessment, the engineering report, certificates of
casualty or hazard insurance, credit information on the maker of the Mortgage
Note, the HUD-1 or corresponding purchase advice; (c) any other document listed
in Exhibit B; and (d) any other document that is customarily desired for
inspection or transfer incidental to the purchase of any Mortgage Note by an
Investor or that is customarily executed by the seller of a Mortgage Note to an
Investor.

"Committed Purchase Price" means for an Eligible Loan (a) the dollar price as
set forth in the Purchase Commitment or, if the price is not expressed in
dollars, the product of the Mortgage Note Amount multiplied by the price
(expressed as a percentage) as set forth in the Purchase Commitment for the
Eligible Loan, or (b) if the Eligible Loan is to be used to back an Agency
Security, an amount equal to the product of the Mortgage Note Amount multiplied
by the price (expressed as a percentage) as set forth in the Purchase Commitment
for the Agency Security.

"Compliance Certificate" means a certificate executed on behalf of Borrower by
its manager having principal financial accounting responsibilities,
substantially in the form of Exhibit E.

"Credit Score" means a mortgagor's overall consumer credit rating, represented
by a single numeric credit score using the Fair, Isaac consumer credit scoring
system, provided by a credit repository acceptable to Lender and the Investor
that issued the Purchase Commitment covering the related Mortgage Loan (if a
Purchase Commitment is required by Exhibit H).

"Debt" means (a) all indebtedness or other obligations of a Person (and, if
applicable, that Person's Subsidiaries, on a consolidated basis) that, in
accordance with GAAP, would be included in determining total liabilities as
shown on the liabilities side of a balance sheet of that

                                   Page 12-2

<PAGE>

Person on the date of determination, plus (b) all indebtedness or other
obligations of that Person (and, if applicable, that Person's Subsidiaries, on a
consolidated basis) for borrowed money or for the deferred purchase price of
property or services. For purposes of calculating a Person's Debt, Subordinated
Debt due more than 6 months after the Warehousing Maturity Date may be excluded
from that Person's indebtedness.

"Default" means the occurrence of any event or existence of any condition that,
but for the giving of Notice or the lapse of time, would constitute an Event of
Default.

"Default Rate" means, for any Warehousing Advance, the Interest Rate applicable
to that Warehousing Advance plus 4% per annum. If no Interest Rate is applicable
to a Warehousing Advance, "Default Rate" means, for that Warehousing Advance,
the highest Interest Rate then applicable to any outstanding Warehousing Advance
plus 4% per annum.

"Depository Benefit" means the compensation received by Lender, directly or
indirectly, as a result of Borrower's maintenance of Eligible Balances with a
Designated Bank.

"Designated Bank" means any bank designated by Lender as a Designated Bank, but
only for as long as Lender has an agreement under which Lender receives
Depository Benefits from that bank.

"Designated Bank Charges" means any fees, interest or other charges that would
otherwise be payable to a Designated Bank in connection with Eligible Balances
maintained at the Designated Bank, including deposit insurance premiums, service
charges and any other charges that may be imposed by governmental authorities
from time to time.

"Discontinued Loan" has the meaning set forth in the GMAC-RFC Client Guide.

"Earnings Allowance" has the meaning set forth in Section 3.1(b).

"Earnings Credit" has the meaning set forth in Section 3.1(b).

"Electronic Advance Request" means an electronic transmission through RFConnects
Delivery containing the same information as Exhibit A to this Agreement.

"Electronic Tracking Agreement" means an Electronic Tracking Agreement, on the
form prescribed by Lender, among Borrower, Lender, MERS and MERSCORP, Inc.

"Eligible Balances" means all funds of or maintained by Borrower (and, if
applicable, Borrower's Subsidiaries) in demand deposit or time deposit accounts
at a Designated Bank, minus balances to support float, reserve requirements and
any other reductions that may be imposed by governmental authorities from time
to time.

"Eligible Loan" means a Single Family Mortgage Loan that satisfies the
conditions and requirements set forth in Exhibit H.

"Eligible Mortgage Pool" means a Mortgage Pool for which (a) an Approved
Custodian has issued its initial certification, (b) there exists a Purchase
Commitment covering the Agency Security to be issued on the basis of that
certification and (c) the Agency Security will be delivered to Lender.

"Equity Interests" means all shares, interests, participations or other
equivalents, however, designated, of or in a Person (other than a natural
person), whether or not voting, including common stock, membership interests,
warrants, preferred stock, convertible debentures and all agreements,
instruments and documents convertible, in whole or in part, into any one or more
of the foregoing.

                                   Page 12-3

<PAGE>

"ERISA" means the Employee Retirement Income Security Act of 1974 and all rules
and regulations promulgated under that statute, as amended, and any successor
statute, rules, and regulations.

"ERISA Affiliate" means any trade or business (whether or not incorporated) that
is a member of a group of which Borrower is a member and that is treated as a
single employer under Section 414 of the Internal Revenue Code.

"Event of Default" means any of the conditions or events set forth in Section
10.1.

"Excess Buydown" has the meaning set forth in Section 3.4.

"Exchange Act" means the Securities Exchange Act of 1934 and all rules and
regulations promulgated under that statute, as amended, and any successor
statute, rules, and regulations.

"Exhibit B" means Exhibit B, Exhibit B-REP, as applicable to the type
of Eligible Loan against which a Warehousing Advance is to be made.

"Existing Agreement" means the First Amended and Restated Warehousing Credit and
Security Agreement dated as of November 15, 2002, as amended, between Borrower
and Lender.

"Fair Market Value" means, at any time for an Eligible Loan or a related Agency
Security (if the Eligible Loan is to be used to back an Agency Security) as of
any date of determination, (a) the Committed Purchase Price if the Eligible Loan
is covered by a Purchase Commitment from Fannie Mae or Freddie Mac or the
Eligible Loan is to be exchanged for an Agency Security and that Agency Security
is covered by a Purchase Commitment from an Investor, or (b) otherwise, the
market price for such Eligible Loan or Agency Security, determined by Lender
based on market data for similar Mortgage Loans or Agency Securities and such
other criteria as Lender deems appropriate in its sole discretion.

"Fannie Mae" means Fannie Mae, a corporation created under the laws of the
United States, and any successor corporation or other entity.

"FHA" means the Federal Housing Administration and any successor agency or other
entity.

"FHA Mortgage Loan" means an FHA-insured Mortgage Loan included in the Pledged
Loans.

"FICA" means the Federal Insurance Contributions Act and all rules and
regulations promulgated under that statute, as amended, and any successor
statute, rules and regulations.

"FIRREA" means the Financial Institutions Reform, Recovery and Enforcement Act
of 1989 and all rules and regulations promulgated under that statute, as
amended, and any successor statute, rules, and regulations.

"First Mortgage" means a Mortgage that constitutes a first Lien on the real
property and improvements described in or covered by that Mortgage.

"First Mortgage Loan" means a Mortgage Loan secured by a First Mortgage.

"FIRST NLC FINANCIAL SERVICES, LLC" has the meaning set forth in the first
paragraph of this Agreement.

"Forward Commitment" means the forward commitment of First NLC to sell Mortgage
Loans to Lender, obligating First NLC to deliver $230,000,000 of Mortgage Loans
to Lender between October 1,2003, and September 30, 2005, and any substitute,
amendment or renewal thereof.

                                   Page 12-4

<PAGE>

"Freddie Mac" means the Federal Home Loan Mortgage Corporation, a corporation
created under the laws of the United States, and any successor corporation or
other entity.

"Funding Bank" means Bank One or any other bank designated by Lender as a
Funding Bank.

"Funding Bank Agreement" means a letter agreement on the form prescribed by
Lender between the Funding Bank and Borrower authorizing Lender's access to the
Operating Account and the Check Disbursement Account.

"GAAP" means generally accepted accounting principles set forth in opinions and
pronouncements of the Accounting Principles Board and the American Institute of
Certified Public Accountants and in statements and pronouncements of the
Financial Accounting Standards Board, or in opinions, statements or
pronouncements of any other entity approved by a significant segment of the
accounting profession, which are applicable to the circumstances as of the date
of determination.

"Gestation Agreement" means an agreement under which Borrower agrees to sell or
finance (a) a Mortgage Loan prior to the date of purchase by an Investor or (b)
a Mortgage Pool prior to the date a Mortgage-backed Security backed by the
Mortgage Pool is issued.

"Ginnie Mae" means the Government National Mortgage Association, an agency of
the United States government, and any successor agency or other entity.

"GMAC-RFC Client Guide" means the applicable loan purchase guide issued by
Lender, as the same may be amended or replaced.

"Government Mortgage Loan" means a closed-end First Mortgage Loan that is either
HUD/FHA insured (other than a HUD 203(K) Mortgage Loan or a Title I Mortgage
Loan) or VA guaranteed.

"Hedging Arrangements" means, with respect to any Person, any agreements or
other arrangements (including interest rate swap agreements, interest rate cap
agreements and forward sale agreements) entered into to protect that Person
against changes in interest rates or the market value of assets.

"High LTV Mortgage Loan" has the meaning set forth in Exhibit H.

"HUD" means the Department of Housing and Urban Development, and any successor
agency or other entity.

"HUD 203(K) Mortgage Loan" means an FHA-insured closed-end First Mortgage Loan
to an individual obligor the proceeds of which will be used for the purpose of
rehabilitating and repairing the related single family property, and which
satisfies the definition of "rehabilitation loan" in 24 C.F.R. 203.50(a).

"Indemnified Liabilities" has the meaning set forth in Section 11.2.

"Indemnitees" has the meaning set forth in Section 11.2.

"Interest Rate" means, for any Warehousing Advance, the floating rate of
interest specified for that Warehousing Advance in Exhibit H.

"Interim Statement Date" means the date of the most recent unaudited financial
statements of Borrower (and, if applicable, Borrower's Subsidiaries, on a
consolidated basis) delivered to Lender under the Existing Agreement or this
Agreement.

                                    Page 12-5

<PAGE>

"Internal Revenue Code" means the Internal Revenue Code of 1986, Title 26 of the
United States Code, and all rules, regulations and interpretations issued under
those statutory provisions, as amended, and any subsequent or successor federal
income tax law or laws, rules, regulations and interpretations.

"Investment Company Act" means the Investment Company Act of 1940 and all rules
and regulations promulgated under that statute, as amended, and any successor
statute, rules, and regulations.

"Investor" means Fannie Mae, Freddie Mac or a financially responsible private
institution that Lender deems acceptable, in its sole discretion, to issue
Purchase Commitments with respect to a particular category of Eligible Loans.

"Lender" has the meaning set forth in the first paragraph of this Agreement.

"Leverage Ratio" means the ratio of a Person's Debt to Tangible Net Worth. For
purposes of calculating a Person's Leverage Ratio, Debt arising under Hedging
Arrangements, to the extent of assets arising under those Hedging Arrangements,
may be excluded from that Person's Debt.

"LIBOR" means, for each week, the rate of interest per annum that is equal to
the arithmetic mean of the U.S. Dollar London Interbank Offered Rates for 1
month periods of certain U.S. banks as of 11:00 a.m. (London time) on the first
Business Day of each week on which the London Interbank market is open, as
published by Bloomberg L.P. If those interest rates are not offered or published
for any period, then during that period LIBOR means the London Interbank Offered
Rate for 1 month periods as published in The Wall Street Journal in its regular
column entitled "Money Rates" on the first Business Day of each week on which
the London Interbank market is open.

"Lien" means any lien, mortgage, deed of trust, pledge, security interest,
charge or encumbrance of any kind (including any conditional sale or other title
retention agreement, any lease in the nature of such an agreement and any
agreement to give any security interest).

"Liquid Assets" means the following assets owned by a Person (and, if
applicable, that Person's Subsidiaries, on a consolidated basis) as of any date
of determination: (a) unrestricted and unencumbered cash, (b) funds on deposit
in accounts with any bank located in the United States (net of the aggregate
amount payable under all outstanding and unpaid checks, drafts and similar items
drawn by a Person against those accounts), (c) investment grade commercial
paper, (d) money market funds, and (e) marketable securities, plus, in the case
of Borrower and in the absence of a Default or Event of Default, (f) the amount
of any Buydowns and Excess Buydowns.

"Loan Documents" means this Agreement, the Warehousing Note, any agreement of
Borrower relating to Subordinated Debt, and each other document, instrument or
agreement executed by Borrower in connection with any of those documents,
instruments and agreements, as originally executed or as any of the same may be
amended, restated, renewed or replaced.

"Loan Package Fee" has the meaning set forth in Section 3.6.

"Loan-to-Value Ratio" means, for any Mortgage Loan, the ratio of (a) the maximum
amount that may be borrowed under the Mortgage Loan (whether or not borrowed) at
the time of origination, plus the Mortgage Note Amounts of all other Mortgage
Loans secured by senior or pari passu Liens on the related property, to (b) the
Appraised Property Value of the related property.

"Manufactured Home' means a structure that is built on a permanent chassis
(steel frame) with the wheel assembly necessary for transportation in one or
more sections to a permanent site or semi-permanent site.

                                   Page 12-6

<PAGE>

"Margin Stock" has the meaning assigned to that term in Regulation U of the
Board of Governors of the Federal Reserve System, as amended.

"MERS" means Mortgage Electronic Registrations Systems, Inc. and any successor
entity.

"Miscellaneous Fees and Charges" means the Collateral Operations Fees set forth
on Lender's fee schedule attached as Exhibit I and all miscellaneous
disbursements, charges and expenses incurred by or on behalf of Lender for the
handling and administration of Warehousing Advances and Collateral, including
costs for Uniform Commercial Code, tax lien and judgment searches conducted by
Lender, filing fees, charges for wire transfers and check processing charges,
charges for security delivery fees, charges for overnight delivery of Collateral
to Investors, recording fees, Funding Bank service fees and overdraft charges
and Designated Bank Charges. Upon not less than 3 Business Days' prior Notice to
Borrower, Lender may modify the Collateral Operations Fees set forth in Exhibit
I to conform to current Lender practices and, as so modified, the revised
Exhibit I will become part of this Agreement.

"Mortgage" means a mortgage or deed of trust on real property that is improved
and substantially completed (including real property to which a Manufactured
Home has been affixed in a manner such that the Lien of a mortgage or deed of
trust would attach to the Manufactured Home under applicable real property law).

"Mortgage-backed Securities" means securities that are secured or otherwise
backed by Mortgage Loans.

"Mortgage Loan" means any loan evidenced by a Mortgage Note and secured by a
Mortgage and, if applicable, a Security Agreement.

"Mortgage Note" means a promissory note secured by one or more Mortgages and, if
applicable, one or more Security Agreements.

"Mortgage Note Amount" means, as of any date of determination, the then
outstanding and unpaid principal amount of a Mortgage Note (whether or not an
additional amount is available to be drawn under that Mortgage Note).

"Mortgage Pool" means a pool of one or more Pledged Loans on the basis of which
a Mortgage-backed Security is to be issued.

"Multiemplover Plan" means a "multiemployer plan" as defined in Section 4001
(a)(3) of ERISA, to which either Borrower or any ERISA Affiliate of Borrower has
any obligation with respect to its employees.

"NLC. INC." has the meaning set forth in the first paragraph of this Agreement.

"Nonperforming Mortgage Loan" has the meaning set forth in Exhibit H.

"Non-Usage Fee" has the meaning set forth in Section 3.5.

"Notices" has the meaning set forth in Section 11.1.

"Obligations" means all indebtedness, obligations and liabilities of Borrower to
Lender and Lender's Subsidiaries (whether now existing or arising after the date
of this Agreement, voluntary or involuntary, joint or several, direct or
indirect, absolute or contingent, liquidated or unliquidated, or decreased or
extinguished and later increased and however created or incurred), including

                                    Page 12-7

<PAGE>

Borrower's obligations and liabilities to Lender under the Loan Documents and
disbursements made by Lender for Borrower's account.

"Operating Account" means a demand deposit account maintained at the Funding
Bank in Borrower's name and designated for funding that portion of each Eligible
Loan not funded by a Warehousing Advance made against that Eligible Loan and for
returning any excess payment from an Investor for a Pledged Loan or Pledged
Security.

"Overdraft Advance" has the meaning set forth in Section 3.8.

"Parent" means NLC Financial Services, LLC, a Delaware limited liability
company, and the parent of First NLC.

"Participant" has the meaning set forth in Section 11.8.

"Person" means and includes natural persons, corporations, limited liability
companies, limited liability partnerships, limited partnerships, general
partnerships, joint stock companies, joint ventures, associations, companies,
trusts, banks, trust companies, land trusts, business trusts or other
organizations, whether or not legal entities, and governments and agencies and
political subdivisions of those governments.

"Plan" means each employee benefit plan (whether in existence on the date of
this Agreement or established after that date), as that term is defined in
Section 3 of ERISA, maintained for the benefit of directors, officers or
employees of Borrower or any ERISA Affiliate.

"Pledged Assets" means, collectively, Pledged Loans and Pledged Securities.

"Pledged Hedging Accounts" has the meaning set forth in Section 4.1(h).

"Pledged Hedging Arrangements" has the meaning set forth in Section 4.1(h).

"Pledged Loans" has the meaning set forth in Section 4.1(b).

"Pledged Securities" has the meaning set forth in Section 4.1(c).

"Prime Mortgage Loan" has the meaning set forth in Exhibit H.

"Prohibited Transaction" has the meanings set forth for such term in Section
4975 of the Internal Revenue Code and Section 406 of ERISA.

"Purchase Commitment" means a written commitment, in form and substance
satisfactory to Lender, issued in favor of Borrower by an Investor under which
that Investor commits to purchase Mortgage Loans or Mortgage-backed Securities.

"Rating Agency" means any nationally recognized statistical rating organization
that in the ordinary course of its business rates Mortgage-backed Securities.

"Receivables" has the meaning set forth in Section 4.1(e).

"Release Amount" has the meaning set forth in Section 4.3(f).

"Repurchased Mortgage Loan" has the meaning set forth in Exhibit H.

"Restriction List" and "Restriction Lists" means each and every list of Persons
to whom the Government of the United States prohibits or otherwise restricts the
provision of financial

                                   Page 12-8

<PAGE>

services. For the purposes of this Agreement, Restriction Lists include the list
of Specifically Designated Nationals and Blocked Persons established pursuant to
Executive Order 13224 (September 23, 2001) and maintained by the Office of
Foreign Assets Control, U.S. Department of the Treasury, current as of the day
the Restriction List is used for purposes of comparison in accordance with the
requirements of this Agreement.

"RFC Mortgage Loan" means a Mortgage Loan covered by a Purchase Commitment
issued by Lender.

"RFConnects Delivery" means Lender's proprietary service to support the
electronic exchange of information between Lender and Borrower, including
Warehousing Advance Requests, shipping requests, payoff requests, wire transfer
instructions, security delivery instructions, activity reports and exception
reports.

"RFConnects Pledge Agreement" means an agreement (on the then current form
prescribed by Lender) granting Lender a security interest in Mortgage Loans for
which Borrower has requested Warehousing Advances using RFConnects Delivery.

"Second Mortgage" means a Mortgage that constitutes a second Lien on the real
property and improvements described in or covered by that Mortgage.

"Second Mortgage Loan" means a Mortgage Loan secured by a Second Mortgage.

"Security Agreement" means a security agreement or other agreement that creates
a Lien on personal property, including furniture, fixtures and equipment, to
secure repayment of a Mortgage Loan.

"Servicing Contract" means, with respect to any Person, the arrangement, whether
or not in writing, under which that Person has the right to service Mortgage
Loans.

"Servicing Portfolio" means, as to any Person, the unpaid principal balance of
Mortgage Loans serviced by that Person under Servicing Contracts, minus the
principal balance of all Mortgage Loans that are serviced by that Person for
others under subservicing arrangements.

"Single Family Mortgage Loan" means a Mortgage Loan secured by a Mortgage on
improved real property on which is located a 1-to-4 family residence.

"Standard Warehouse Period" means, for any Mortgage Loan, the maximum number of
days a Warehousing Advance against that type of Mortgage Loan, other than
against an Aged Mortgage Loan, may remain outstanding, as set forth in Exhibit
H.

"Statement Date" means the Audited Statement Date or the Interim Statement Date,
as applicable.

"Sublimit" means the aggregate amount of Warehousing Advances (expressed as a
dollar amount or as a percentage of the Warehousing Commitment Amount) that is
permitted to be outstanding at any one time against a specific type of Eligible
Loan.

"Subordinated Debt" means (a) all indebtedness of Borrower for borrowed money
that is effectively subordinated in right of payment to all present and future
Obligations either (1) under a Subordination of Debt Agreement on the form
prescribed by Lender or (2) otherwise on terms acceptable to Lender, and (b)
solely for purposes of Section 8.5, all indebtedness of Borrower that is
required to be subordinated by Sections 5.1(b) and 7.11.

"Subprime Mortgage Loan" has the meaning set forth in Exhibit H.

                                   Page 12-9

<PAGE>

"Subsidiary" means any corporation, partnership, association or other business
entity in which more than 50% of the shares of stock or other ownership
interests having voting power for the election of directors, managers, trustees
or other Persons performing similar functions is at the time owned or controlled
by any Person either directly or indirectly through one or more Subsidiaries
of that Person.

"Tangible Net Worth" means the excess of a Person's (and, if applicable, that
Person's Subsidiaries, on a consolidated basis) total assets over total
liabilities as of the date of determination, each determined in accordance with
GAAP applied in a manner consistent with the most recent audited financial
statements delivered to Lender under the Existing Agreement, plus that portion
of Subordinated Debt due more than 6 months after the Warehousing Maturity Date.
For purposes of calculating a Person's Tangible Net Worth, advances or loans to
managers, members, employees or Affiliates, investments in Affiliates, assets
pledged to secure any liabilities not included in the Debt of that Person,
intangible assets, those other assets that would be deemed by HUD to be
non-acceptable in calculating adjusted net worth in accordance with its
requirements in effect as of that date, as those requirements appear in the
"Consolidated Audit Guide for Audits of HUD Programs," and other assets Lender
deems unacceptable, in its sole discretion, must be excluded from that Person's
total assets.

Third Party Originated Loan" means a Mortgage Loan originated and funded by a
third party (other than with funds provided by Borrower at closing to purchase
the Mortgage Loan) and subsequently purchased by Borrower.

Title I Mortgage Loan" means an FHA co-insured closed-end First Mortgage Loan or
Second Mortgage Loan that is underwritten in accordance with HUD underwriting
standards for the Title I Property Improvement Program set forth in, and that is
reported for insurance under, the Mortgage Insurance Program authorized and
administered under Title I of the National Housing Act of 1934, as amended, and
the regulations related to that statute.

"Trust Receipt" means a trust receipt in a form approved by and under which
Lender may deliver any document relating to the Collateral to Borrower for
correction or completion.

"Unused Portion" has the meaning set forth in Section 3.5.

"Used Portion" has the meaning set forth in Section 3.5.

"Warehousing Advance" means a disbursement by Lender under Section 1.1.

"Warehousing Advance Request" has the meaning set forth in Section 2.1.

"Warehousing Collateral Value" means, as of any date of determination, (a) with
respect to any Eligible Loan, the lesser of (1) the amount of any Warehousing
Advance made, or that could be made, against such Eligible Loan under Exhibit H
or (2) an amount equal to the Advance Rate for the applicable type of Eligible
Loan multiplied by the Fair Market Value of such Eligible Loan; (b) if Eligible
Loans have been exchanged for Agency Securities, the lesser of (1) the amount of
any Warehousing Advances outstanding against the Eligible Loans backing the
Agency Securities or (2) an amount equal to the Advance Rates for the applicable
types of Eligible Loans backing the Agency Securities multiplied by the Fair
Market Value of the Agency Securities; and (c) with respect to cash, the amount
of the cash.

"Warehousing Commitment" means the obligation of Lender to make Warehousing
Advances to Borrower under Section 1.1.

"Warehousing Commitment Amount" means $135,000,000. Notwithstanding the
foregoing, during the period from February 6, 2004, to and including May 31,
2004, the Warehousing Commitment

                                   Page 12-10

<PAGE>

Amount will be temporarily increased to $160,000,000. On the first Business Day
following the expiration of the temporary increase of the Warehousing Commitment
Amount, Borrower must repay to Lender the amount by which the outstanding
Warehousing Advances exceed the Warehousing Commitment Amount.

"Warehousing Fee" has the meaning set forth in Section 3.6.

"Warehousing Maturity Date" has the meaning set forth in Section 1.2.

"Warehousing Note" has the meaning set forth in Section 1.3.

"Wet Settlement Advance" means with respect to any Warehousing Advance, the time
from the date the Warehousing Advance is made until the date of Lender's receipt
of the Collateral Documents required by Article 2 and the Exhibits and documents
referenced in that Article.

"Wire Disbursement Account" means a demand deposit account maintained at the
Funding Bank in Lender's name for clearing wire transfers requested by Borrower
to fund Warehousing Advances.

"Wire Fee" has the meaning set forth in Section 3.6.

12.2. Other Definitional Provisions; Terms of Construction

12.2 (a) Accounting terms not otherwise defined in this Agreement have the
     meanings given to those terms under GAAP.

12.2 (b) Defined terms may be used in the singular or the plural, as the context
     requires.

12.2 (c) All references to time of day mean the then applicable time in Chicago,
     Illinois, unless otherwise expressly provided.

12.2 (d) References to Sections, Exhibits, Schedules and like references are to
     Sections, Exhibits, Schedules and the like of this Agreement unless
     otherwise expressly provided.

12.2 (e) The words "include," "includes" and "including" are deemed to be
     followed by the phrase "without limitation."

12.2 (f) Unless the context in which it is used otherwise clearly requires, the
     word "or" has the inclusive meaning represented by the phrase "and/or."

12.2 (g) All incorporations by reference of provisions from other agreements are
     incorporated as if such provisions were fully set forth into this
     Agreement, and include all necessary definitions and related provisions
     from those other agreements. All provisions from other agreements
     incorporated into this Agreement by reference survive any termination of
     those other agreements until the Obligations of Borrower under this
     Agreement and the Warehousing Note are irrevocably paid in full and the
     Warehousing Commitment is terminated.

12.2 (h) All references to the Uniform Commercial Code shall be deemed to be
     references to the Uniform Commercial Code in effect on the date of this
     Agreement in the applicable jurisdiction.

12.2 (i) Unless the context in which it is used otherwise clearly requires, all
     references to days, weeks and months mean calendar days, weeks and months.

                                   Page 12-11

<PAGE>

                                End of Article 12

                                   Page 12-12

<PAGE>

                                                                       EXHIBIT H

--------------------------------------------------------------------------------
                         ELIGIBLE LOANS AND OTHER ASSETS
--------------------------------------------------------------------------------

                        First NLC Financial Services, LLC
                                   NLC, Inc.

LIMITATIONS ON WAREHOUSING ADVANCES AGAINST MORTGAGE LOANS

     Lender's obligation to make Warehousing Advances under the Agreements
     subject to the following limitations:

          1.   No Warehousing Advance will be made against any Mortgage Loan
               that has been previously sold or pledged to obtain financing
               (whether or not such financing constitutes Debt) under another
               warehousing financing arrangement or a gestation agreement.

          2.   No Warehousing Advance will be made against any Mortgage Loan
               that Lender believes may be based on untrue, incomplete or
               inaccurate or fraudulent information or may otherwise be subject
               to fraud.

          3.   No Warehousing Advance will be made against a Mortgage Loan if
               any of the limitations set forth in this Exhibit H would be
               exceeded after giving effect to the Warehousing Advance.

          4.   No Warehousing Advance will be made against a Mortgage Loan with
               an original principal balance in excess of $2,000,000.

SUBLIMITS

     These general limitations apply to all Warehousing Advances against
     Eligible Loans:

          1. Wet Settlement Advances:  40% of the Warehousing Commitment Amount.

          2. Third Party Originated Loans:  Not Permitted

ELIGIBLE LOANS AND TERMS OF WAREHOUSING ADVANCES

     Subject to compliance with the terms and limitations set forth below and
     the terms, representations and warranties and the covenants in the
     Agreement, each of the following Mortgage Loans is an Eligible Loan for
     purposes of the Agreement:

1.   Prime Mortgage Loan

     (a) Definition: A First Mortgage Loan or a Second Mortgage Loan with the
     following characteristics:

          (i) For a First Mortgage Loan:

                                        1

<PAGE>

               A. Underwritten substantially in accordance with Fannie Mae or
               Freddie Mac underwriting standards (except as to maximum amount);
               and

               B. Loan-to-Value Ratio not to exceed 80% or, if the Loan-to-Value
               Ratio exceeds 80%, the Prime Mortgage Loan is insured by or
               subject to a commitment for mortgage insurance in an amount and
               on terms and conditions that satisfy the underwriting standards
               of Fannie Mae or Freddie Mac; or

               C. A Government Mortgage Loan,

          (ii) For a Second Mortgage Loan:

               A. The credit of the obligor has been underwritten substantially
               in accordance with Fannie Mae or Freddie Mac underwriting
               standards; and

               B. Loan-to-Value Ratio not more than 100%.

<TABLE>
<S>                                    <C>
     (b) Interest Rate:

          (i) Other Mortgage Loans:    [*]% over LIBOR*

          (ii) Aged Mortgage Loans:    [*]% over LIBOR

     (c) Prime Sublimit:               $65,000,000

          (i) First Mortgage Loans:    $65,000,000

          (ii) Second Mortgage Loans:  $6,750,000

          (iii) Aged Mortgage Loans:   $2,500,000

     (d) Committed/Uncommitted:

          (i) First Mortgage Loans:    Purchase Commitment required

          (ii) Second Mortgage Loans:  Purchase Commitment NOT required

     (e) Wet Settlement Advances:      Permitted

     (f) Aged Mortgage Loans:          Permitted for First Mortgage Loans only

     (g) Committed Advance Rate:

          (i) First Mortgage Loans:    [*]% of the lesser of (i) the Mortgage Note
                                       Amount or (ii) the Committed Purchase Price

          (ii) RFC Mortgage Loans:     [*]% of the lesser of (i) of the Mortgage Note
                                       Amount or (ii) the Committed Purchase Price

     (h) Uncommitted Advance Rate:     [*]% of the Mortgage Note Amount

     (i) Standard Warehouse Period:    90 days

     (j) Aged Warehouse Period:        180 days
</TABLE>

                                        2

<PAGE>

     (k) Required Prepayments:         On the day a Pledged Loan becomes an
                                       Aged Mortgage Loan, the Warehousing
                                       Advance against such Pledged Loan must
                                       be (a) repaid in full, to the extent the
                                       Aged Mortgage Loan Sublimit would be
                                       exceeded, or (b) otherwise, reduced by
                                       [*]% of the Mortgage Note Amount on the
                                       15th day of each month commencing after
                                       90 days.

     *If at any time (i) the Forward Commitment is no longer in effect, or (ii)
     Borrowers fail to deliver to Lender Mortgage Loans as required by the terms
     of the Forward Commitment, the interest rates then in effect for Prime
     Mortgage Loans will increase by [*]% per annum. If Borrowers enter into a
     new commitment for the forward sale of Mortgage Loans by Borrowers to
     Lender, in an amount at least equal to $300,000,000, the interest rates
     then in effect for Prime Mortgage Loans (not including Aged Mortgage Loans)
     will be reduced by [*]% per annum.

2.   Subprime Mortgage Loan

     (a) Definition: A First Mortgage Loan or Second Mortgage Loan that has a
     risk rating of "A-," "B" or "C" (determined using underwriting standards
     that comply with industry standards in the sole judgment of Lender), and
     that is acceptable for purchase by at least two Investors.

     (b) Interest Rate:

         (i) Other Mortgage Loans:     [*]% over LIBOR*

         (ii) Aged Mortgage Loans:     [*]% over LIBOR

     (c) Subprime Sublimit:            From the period (A) February 6, 2004, to
                                       and including May 31, 2004, $160,000,000
                                       and (B) thereafter, $135,000,000

         (i) First Mortgage Loans:     From the period (A) February 6, 2004, to
                                       and including May 31, 2004, $160,000,000
                                       and (B) thereafter, $135,000,000

         (ii) Second Mortgage Loans:   $15,000,000

         (iii) Aged Mortgage Loans:    $2,500,000

     (d) Committed/Uncommitted:        Purchase Commitment NOT required

     (e) Wet Settlement Advances:      Permitted

     (f) Aged Mortgage Loans:          Permitted for First Mortgage Loans only

     (g) Committed Advance Rate:

         (i) First Mortgage Loans:     [*]% of the lesser of (i) the Mortgage
                                       Note Amount or (ii) the Committed
                                       Purchase Price

                                        3

<PAGE>

         (ii) RFC Mortgage Loans:      [*]% of the lesser of (i) the Mortgage
                                       Note Amount or (ii) the Committed
                                       Purchase Price

     (h) Uncommitted "Advance Rate:

         (i) First Mortgage Loans:     [*]% of the Mortgage Note Amount

         (ii) Second Mortgage Loans:   [*]% of the Mortgage Note Amount

     (i) Standard Warehouse Period:    90 days

     (j) Aged Warehouse Period:        180 days

     (k) Required Prepayments:         On the day a Pledged Loan becomes an
                                       Aged Mortgage Loan, the Warehousing
                                       Advance against such Pledged Loan must
                                       be (a) repaid in full; to the extent the
                                       Aged Mortgage Loan Sublimit would be
                                       exceeded, or (b) otherwise, reduced by
                                       [*]% of the Mortgage Note Amount on the
                                       15th day of each month commencing after
                                       90 days.

     *If at any time (i) the Forward Commitment is no longer in effect, or (ii)
     Borrowers fail to deliver to Lender Mortgage Loans as required by the terms
     of the Forward Commitment, the interest rates then in effect for Subprime
     Mortgage Loans will increase by [*]% per annum, If Borrowers enter into a
     new commitment for the forward sale of Mortgage Loans by Borrowers to
     Lender, in an amount at least equal to $300,000,000, the interest rates
     then in effect for Subprime Mortgage Loans (not including Aged Mortgage
     Loans) will be reduced by [*]% per annum,

3.   High LTV Mortgage Loan

     (a) Definition: A Second Mortgage Loan that meets the 125 Loan Program
     eligibility criteria set forth in the GMAC-RFC Client Guide and for which
     an AssetWise Certificate has been issued, and a First Mortgage Loan that
     meets the Home Solution Program eligibility criteria set forth in the
     GMAC-RFC Client Guide and for which an AssetWise Certificate has been
     issued.

     (b) Interest Rate:                [*]% over LIBOR*

     (c) High LTV Sublimit:            $5,000,000

     (d) Committed/Uncommitted:        Purchase Commitment required from Lender

     (e) Wet Settlement Advances:      Permitted

     (f) Aged Mortgage Loans:          Not Permitted

     (g) Committed Advance Rate:

         (i) First Mortgage Loans:     [*]% of the lesser of (i) the Mortgage
                                       Note Amount or (ii) the Committed
                                       Purchase Price

                                        4

<PAGE>

         (ii) Second Mortgage Loans:   [*]% of the lesser of (i) the Mortgage
                                       Note Amount or (ii) the Committed
                                       Purchase Price

         (iii) RFC Mortgage Loans:     [*]% of the lesser of (i) of the
                                       Mortgage Note Amount or (ii) the
                                       Committed Purchase Price

     (h) Standard Warehouse Period:    45 days

     *If at any time (i) the Forward Commitment is no longer in effect, or (ii)
     Borrowers fail to deliver to Lender Mortgage Loans as required by the terms
     of the Forward Commitment, the interest rates then in effect for High LTV
     Mortgage Loans will increase by [*]% per annum. If Borrowers enter into a
     new commitment for the forward sale of Mortgage Loans by Borrowers to
     Lender, in an amount at least equal to $300,000,000, the interest rates
     then in effect for High LTV Mortgage Loans will be reduced by [*]% per
     annum.

4.   Repurchased Mortgage Loan/Nonperforming Mortgage Loan

     (a) Definitions:

     Repurchased Mortgage Loan: A First Mortgage Loan that has been repurchased
     from an Investor or a Mortgage Pool pursuant to a Servicing Contract and
     for which the Warehousing Advance has been pre-approved by the Lender.

     Nonperforming Mortgage Loan: A First Mortgage Loan or a Second Mortgage
     Loan that is not a High LTV Mortgage Loan and (i) is in the process of
     foreclosure, (ii) is 60 days or more delinquent or (iii) with respect to
     which the Aged Warehousing Period has expired.

     (b) Interest Rate:                [*]% over LIBOR

     (c) Repurchased/Nonperforming
         Sublimit:                     $5,000,000

     (d) Committed/Uncommitted:        Purchase Commitment NOT required

     (e) Wet Settlement Advances:      Permitted

     (f) Aged Mortgage Loans:          Not Permitted

     (g) Advance Rate:                 [*]% of the lesser of (i) Lender's
                                       initial Warehousing Advance, (ii) the
                                       unpaid principal balance or (iii) the
                                       Appraised Property Value or BPO Value

     (h) Standard Warehouse Period:    180 days

     (i) Required Prepayments:         [*]% of the Mortgage Note Amount, paid
                                       each month occurring more than 90 days
                                       after the date of the Warehousing
                                       Advance

                                        5

<PAGE>

--------------------------------------------------------------------------------
                                LEGAL FEE STATEMENT
--------------------------------------------------------------------------------

INVOICE DATE:   February 6, 2004

CUSTOMER:       First NLC Financial Services, LLC
                NLC, Inc.

Re:  Legal document preparation fee for the First Amendment to the Second
     Amended and Restated Warehousing Credit and Security Agreement dated
     November 1, 2003, by and among First NLC Financial Services, LLC, NLC, Inc.
     and Residential Funding Corporation.

--------------------------------------------------------------------------------
TOTAL AMOUNT DUE                                                         $350.00
--------------------------------------------------------------------------------

<PAGE>

INFORMATION DENOTED BY [*] HEREIN HAS BEEN OMITTED PURSUANT TO A REQUEST FOR
CONFIDENTIAL TREATMENT. THIS INFORMATION HAS BEEN FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION.

                                                                        EXECUTED

GMAC Residential Funding

--------------------------------------------------------------------------------
                     SECOND AMENDED AND RESTATED WAREHOUSING
                         CREDIT AND SECURITY AGREEMENT
--------------------------------------------------------------------------------

                                     BETWEEN

                       FIRST NLC FINANCIAL SERVICES, LLC,
                      a Florida limited liability company

                                       AND

                       NLC, INC., a Tennessee corporation

                                       AND

                        RESIDENTIAL FUNDING CORPORATION,
                             a Delaware corporation

                          Dated as of November 1, 2003

<PAGE>

--------------------------------------------------------------------------------
                                TABLE OF CONTENTS
--------------------------------------------------------------------------------

<TABLE>
<S>                                                                              <C>
1.  THE CREDIT...................................................................1-1
    1.1.   The Warehousing Commitment............................................1-1
    1.2.   Expiration of Warehousing Commitment..................................1-1
    1.3.   Warehousing Note......................................................1-2
2.  PROCEDURES FOR OBTAINING ADVANCES............................................2-1
    2.1.   Warehousing Advances..................................................2-1
3.  INTEREST, PRINCIPAL AND FEES.................................................3-1
    3.1.   Interest..............................................................3-1
    3.2.   Interest Limitation...................................................3-2
    3.3.   Principal Payments....................................................3-2
    3.4.   Buydowns..............................................................3-4
    3.5.   Non-Usage Fees........................................................3-4
    3.6.   Loan Package Fees, Wire Fees, Warehousing Fees........................3-5
    3.7.   Miscellaneous Fees and Charges........................................3-5
    3.8.   Overdraft Advances....................................................3-5
    3.9.   Method of Making Payments.............................................3-5
4.  COLLATERAL...................................................................4-1
    4.1.   Grant of Security Interest............................................4-1
    4.2.   Maintenance of Collateral Records.....................................4-2
    4.3.   Release of Security Interest in Pledged Loans and Pledged
              Securities.........................................................4-2
    4.4.   Collection and Servicing Rights.......................................4-4
    4.5.   Return of Collateral at End of Warehousing Commitment.................4-4
    4.6.   Delivery of Collateral Documents......................................4-4
5.  CONDITIONS PRECEDENT.........................................................5-1
    5.1.   Initial Advance.......................................................5-1
    5.2.   Each Advance..........................................................5-2
    5.3.   Force Majeure.........................................................5-3
6.  GENERAL REPRESENTATIONS AND WARRANTIES.......................................6-1
    6.1.   Place of Business.....................................................6-1
    6.2.   Organization; Good Standing; Subsidiaries.............................6-1
    6.3.   Authorization and Enforceability......................................6-1
    6.4.   Approvals.............................................................6-2
    6.5.   Financial Condition...................................................6-2
    6.6.   Litigation............................................................6-2
    6.7.   Compliance with Laws..................................................6-2
    6.8.   Regulation U..........................................................6-3
    6.9.   Investment Company Act................................................6-3
    6.10.  Payment of Taxes......................................................6-3
    6.11.  Agreements............................................................6-3
    6.12.  Title to Properties...................................................6-3
    6.13.  ERISA ................................................................6-4
    6.14.  No Retiree Benefits...................................................6-4
    6.15.  Assumed Names.........................................................6-4
    6.16.  Servicing.............................................................6-4
7.  AFFIRMATIVE COVENANTS........................................................7-1
</TABLE>

<PAGE>

<TABLE>
<S>                                                                             <C>
    7.1.   Payment of Obligations................................................7-1
    7.2.   Financial Statements..................................................7-1
    7.3.   Other Borrower Reports................................................7-1
    7.4.   Maintenance of Existence; Conduct of Business.........................7-2
    7.5.   Compliance with Applicable Laws.......................................7-2
    7.6.   Inspection of Properties and Books; Operational Reviews...............7-2
    7.7.   Notice................................................................7-3
    7.8.   Payment of Debt, Taxes and Other Obligations..........................7-3
    7.9.   Insurance.............................................................7-3
    7.10.  Closing Instructions..................................................7-4
    7.11.  Subordination of Certain Indebtedness.................................7-4
    7.12.  Other Loan Obligations................................................7-4
    7.13.  ERISA.................................................................7-4
    7.14.  Use of Proceeds of Warehousing Advances...............................7-5
    7.15.  MERS Implementation...................................................7-5
8.  NEGATIVE COVENANTS...........................................................8-1
    8.1.   Contingent Liabilities................................................8-1
    8.2.   Pledge of Servicing Contracts.........................................8-1
    8.3.   Restrictions on Fundamental Changes................................   8-1
    8.4.   Subsidiaries..........................................................8-1
    8.5.   Deferral of Subordinated Debt.........................................8-2
    8.6.   Loss of Eligibility...................................................8-2
    8.7.   Accounting Changes....................................................8-2
    8.8.   Leverage Ratio........................................................8-2
    8.9.   Minimum Tangible Net Worth............................................8-2
    8.10.  Minimum Liquid Assets.................................................8-2
    8.11.  Distributions to Members..............................................8-2
    8.12.  Transactions with Affiliates..........................................8-2
    8.13.  Recourse Servicing Contracts..........................................8-3
    8.14.  Gestation Agreements..................................................8-3
9.  SPECIAL REPRESENTATIONS, WARRANTIES AND COVENANTS
       CONCERNING COLLATERAL.....................................................9-1
    9.1.   Special Representations and Warranties Concerning Eligibility as
              Seller/Servicer of Mortgage Loans..................................9-1
    9.2.   Special Representations and Warranties Concerning Warehousing
              Collateral.........................................................9-1
    9.3.   Special Affirmative Covenants Concerning Warehousing Collateral.......9-3
    9.4.   Special Negative Covenants Concerning Warehousing Collateral..........9-4
10. DEFAULTS; REMEDIES.....................:....................................10-1
    10.1.  Events of Default....................................................10-1
    10.2.  Remedies.............................................................10-2
    10.3.  Application of Proceeds..............................................10-5
    10.4.  Lender Appointed Attorney-in-Fact....................................10-5
    10.5.  Right of Set-Off.....................................................10-6
11. MISCELLANEOUS...............................................................11-1
    11.1.  Notices..............................................................11-1
    11.2.  Reimbursement Of Expenses; Indemnity.................................11-1
    11.3.  Financial Information................................................11-2
    11.4.  Terms Binding Upon Successors; Survival of Representations...........11-2
    11.5.  Assignment...........................................................11-2
    11.6.  Amendments...........................................................11-2
    11.7.  Governing Law........................................................11-3
    11.8.  Participations.......................................................11-3
    11.9.  Relationship of the Parties..........................................11-3
</TABLE>

<PAGE>

<TABLE>
<S>                                                                            <C>
    11.10. Severability.........................................................11-3
    11.11. Consent to Credit References.........................................11-3
    11.12. Counterparts.........................................................11-4
    11.13. Headings/Captions....................................................11-4
    11.14. Entire Agreement.....................................................11-4
    11.15. Consent to Jurisdiction..............................................11-4
    11.16. Waiver of Jury Trial.................................................11-4
    11.17. Waiver of Punitive, Consequential, Special or Indirect Damages.......11-5
12. DEFINITIONS.................................................................12-1
    12.1.  Defined Terms........................................................12-1
    12.2.  Other Definitional Provisions; Terms of Construction................12-11
</TABLE>

<PAGE>

--------------------------------------------------------------------------------
                                    EXHIBITS
--------------------------------------------------------------------------------

Exhibit A          Request for Advance Against Eligible Loans

Exhibit B          Procedures and Documentation for Warehousing Mortgage Loans

Exhibit B-REP/NP   Procedures and Documentation for Warehousing Repurchased
                   Mortgage Loans and Nonperforming Mortgage Loans

Exhibit C          Schedule of Servicing Portfolio

Exhibit D          Subsidiaries

Exhibit E          Compliance Certificate

Exhibit F          Schedule of Lines of Credit

Exhibit G          Assumed Names

Exhibit H          Eligible Loans and Other Assets

Exhibit I          Collateral Operations Fee Schedule

Exhibit J          Terms of Guaranteed Obligations

<PAGE>

--------------------------------------------------------------------------------
                     SECOND AMENDED AND RESTATED WAREHOUSING
                         CREDIT AND SECURITY AGREEMENT
--------------------------------------------------------------------------------

SECOND AMENDED AND RESTATED WAREHOUSING CREDIT AND SECURITY AGREEMENT, dated as
of November 1, 2003, among FIRST NLC FINANCIAL SERVICES, LLC, a Florida limited
liability company ("First NLC"), NLC, INC., a Tennessee corporation ("NLC,
Inc.") (First NLC and NLC, Inc. are collectively referred to as "Borrower") and
RESIDENTIAL FUNDING CORPORATION, a Delaware corporation ("Lender").

A.   Borrower has requested certain financing from Lender.

B.   Borrower has asked Lender to amend and restate the Existing Agreement (as
     defined below) and to set forth the terms and conditions upon which Lender
     will provide certain financing to Borrower.

C.   Lender has agreed to amend and restate the Existing Agreement to provide
     that financing to Borrower subject to the terms and conditions of this
     Agreement.

D.   Subject to Borrower's satisfaction of the conditions set forth in Article
     5, the "Closing Date" for the transactions contemplated by this Agreement
     is the date set forth as the Closing Date on the signature page to this
     Agreement.

NOW, THEREFORE, the parties to this Agreement agree as follows:

1.   THE CREDIT

1.1. The Warehousing Commitment

On the terms and subject to the conditions and limitations of this Agreement,
including Exhibit H, Lender agrees to make Warehousing Advances to Borrower from
the Closing Date to the Business Day immediately preceding the Warehousing
Maturity Date, during which period Borrower may borrow, repay and reborrow in
accordance with the provisions of this Agreement. Lender has no obligation to
make Warehousing Advances in excess of the Warehousing Commitment Amount. While
a Default or Event of Default exists, Lender may refuse to make any additional
Warehousing Advances to Borrower, Effective as of the Closing Date, all
outstanding loans made under the Existing Agreement are deemed to be the initial
Warehousing Advances made under this Agreement. All Warehousing Advances under
this Agreement constitute a single indebtedness, and all of the Collateral is
security for the Warehousing Note and for the performance of all of the
Obligations. Warehousing Advances will be made either to First NLC or to NLC,
Inc., as requested by either First NLC or to NLC, Inc., will be deemed made to
or for the benefit of First NLC and NLC, Inc., and First NLC and NLC, Inc.,
jointly and severally, are obligated to repay any Warehousing Advances made to
First NLC or to NLC, Inc. under the Warehousing Commitment. With respect to its
obligation to repay Warehousing Advances made to the other Borrower, each
Borrower agrees to the terms set forth in Exhibit J.

1.2. Expiration of Warehousing Commitment

The Warehousing Commitment expires on the earlier of ("Warehousing Maturity
Date"): (a) September 30, 2005, as such date may be extended in writing by
Lender, in its sole discretion, on which date the Warehousing Commitment will
expire of its own term and the

                                    Page 1-1

<PAGE>

Warehousing Advances will become due and payable without the necessity of Notice
or action by Lender; and (b) the date the Warehousing Commitment is terminated
and the Warehousing Advances become due and payable under Section 10.2.

1.3. Warehousing Note

Warehousing Advances are evidenced by Borrower's promissory note, payable to
Lender on the form prescribed by Lender ("Warehousing Note"). The term
"Warehousing Note" as used in this Agreement includes all amendments,
restatements, renewals or replacements of the original Warehousing Note and all
substitutions for it. All terms and provisions of the Warehousing Note are
incorporated into this Agreement

                                End of Article 1

                                    Page 1-2

<PAGE>

2.   PROCEDURES FOR OBTAINING ADVANCES

2.1. Warehousing Advances

To obtain a Warehousing Advance under this Agreement, Borrower must deliver to
Lender either a completed and signed request for a Warehousing Advance on the
then current form approved by Lender, or an Electronic Advance Request, together
with a list of the Mortgage Loans for which the request is being made and a
signed RFConnects Pledge Agreement sent by facsimile ("Warehousing Advance
Request"), not later than (i) in the case of Electronic Advance Requests, 3:30
p.m. on the Business Day, and (ii) in all other cases, 1 Business Day before the
Business Day on which Borrower desires the Warehousing Advance. Subject to the
delivery of a Warehousing Advance Request and the satisfaction of the conditions
set forth in Sections 5.1 and 5.2,Borrower may obtain a Warehousing Advance
under this Agreement upon compliance with the procedures set forth in this
Section and in the applicable Exhibit B, including delivery to Lender of all
required Collateral Documents. Lender's current form of Warehousing Advance
Request is set forth in Exhibit A. Upon not less than 3 Business Days' prior
Notice to Borrower, Lender may modify its form of Warehousing Advance Request,
RFConnects Pledge Agreement and any other Exhibit or document referred to in
this Section to conform to current legal requirements or Lender practices and,
as so modified, those Exhibits and documents will become part of this Agreement.

                                End of Article 2

                                    Page 2-1

<PAGE>

3.   INTEREST, PRINCIPAL AND FEES

3.1. Interest

3.1(a) Except as otherwise provided in this Section, Borrower must pay interest
     on the unpaid amount of each Warehousing Advance from the date the
     Warehousing Advance is made until it is paid in full at the Interest Rate
     specified in Exhibit H.

3.1(b) As long as no Event of Default exists, Borrower is entitled to receive a
     benefit in the form of an "Earnings Credit" on the portion of the Eligible
     Balances maintained in time deposit accounts with a Designated Bank, and
     Borrower is entitled to receive a benefit in the form of an 'Earnings
     Allowance" on the portion of the Eligible Balances maintained in demand
     deposit accounts with a Designated Bank. Any Earnings Allowance will be
     used first and any Earnings Credit will be used second as a credit against
     Miscellaneous Fees and Charges (including Designated Bank Charges),
     Warehousing Fees, Wire Fees, Non-Usage Fees, Loan Package Fees, and any
     other fees payable under this Agreement, and may be used, at Lender's
     option, to reduce accrued interest. Any Earnings Allowance not used during
     the month in which the benefit was received will be accumulated and must be
     used within 6 months of the month in which the benefit was received. As
     long as no Event of Default exists, any Earnings Credit not used during the
     month in which the benefit was received will be used to provide a cash
     benefit to Borrower. Any Earnings Credit retained by Lender as a result of
     an Event of Default will be applied to the payment of Borrower's
     Obligations in the order Lender determines in its sole discretion. The
     Earnings Credit and the Earnings Allowance for any month will be determined
     by Lender in its sole discretion and Lender's determination of those
     amounts is conclusive and binding absent manifest error. In no event will
     the benefit received by Borrower exceed the Depository Benefit.

     Either party to this Agreement may terminate the benefits provided for in
     this Section effective immediately upon Notice to the other party, if the
     terminating party determines (which determination is conclusive and binding
     on the other party, absent manifest error) at any time that any applicable
     law, rule, regulation, order or decree or any interpretation or
     administration of such law, rule, regulation, order or decree by any
     governmental authority charged with its interpretation or administration,
     or compliance by such party with any request or directive (whether or not
     having the force of law) of any such authority, makes it unlawful or
     impossible for the party sending the Notice to continue to offer or receive
     the benefits provided for in this Section. No Notice is required for a
     termination of benefits as a result of an Event of Default.

3.1(c) Lender computes interest on the basis of the actual number of days in
     each month and a year of 360 days ("Accrual Basis"). Borrower must pay
     interest monthly in arrears, not later than 9 days after the date of
     Lender's invoice or, if applicable, 2 days after the date of Lender's
     account analysis statement, commencing with the first month following the
     Closing Date and on the Warehousing Maturity Date.

3.1(d) If for any reason Borrower repays a Warehousing Advance on the same day
     that it was made by Lender, Borrower agrees to pay to Lender an
     administrative fee equal to 1 day of interest on that Warehousing Advance
     at the Interest Rate that would otherwise be applicable under Exhibit H.
     Borrower must pay all administrative fees within 9 days after the date of
     Lender's invoice or, if applicable, within 2 days after the date of
     Lender's account analysis statement.

                                    Page 3-1

<PAGE>

3.1(e) After an Event of Default occurs and upon Notice to Borrower by Lender,
     the unpaid amount of each Warehousing Advance will bear interest at the
     Default Rate until paid in full.

3.1(f) Lender will adjust the rates of interest provided for in this Agreement
     as of the effective date of each change in the applicable index. Lender's
     determination of such rates of interest as of any date of determination are
     conclusive and binding, absent manifest error.

3.2. Interest Limitation

Lender does not intend, by reason of this Agreement, the Warehousing Note or any
other Loan Document, to receive interest in excess of the amount permitted by
applicable law. If Lender receives any interest in excess of the amount
permitted by applicable law, whether by reason of acceleration of the maturity
of this Agreement, the Warehousing Note or otherwise, Lender will apply the
excess to the unpaid principal balance of the Warehousing Advances and not to
the payment of interest If all Warehousing Advances have been paid in full and
the Warehousing Commitment has expired or has been terminated, Lender will remit
any excess to Borrower. This Section controls every other provision of all
agreements between Borrower and Lender and is binding upon and available to any
subsequent holder of the Warehousing Note.

3.3. Principal Payments

3.3(a) Borrower must pay Lender the outstanding principal amount of all
     Warehousing Advances on the Warehousing Maturity Date.

3.3(b) Except as otherwise provided in Section 3.1, Borrower may prepay any
     portion of the Warehousing Advances without premium or penalty at any time.

3.3(c) Borrower must pay to Lender, without the necessity of prior demand or
     Notice from Lender, and Borrower authorizes Lender to cause the Funding
     Bank to charge Borrower's Operating Account for, the amount of any
     outstanding Warehousing Advance against a specific Pledged Asset upon the
     earliest occurrence of any of the following events:

     (1)  One (1) Business Day elapses from the date a Warehousing Advance was
          made if the Pledged Loan to be funded by that Warehousing Advance is
          not closed and funded.

     (2)  Ten (10) Business Days elapse without the return of a Collateral
          Document delivered by Lender to Borrower under a Trust Receipt for
          correction or completion.

     (3)  On the date on which a Pledged Loan is determined to have been
          originated based on untrue, incomplete or inaccurate information or
          otherwise to be subject to fraud, whether or not Borrower had
          knowledge of the misrepresentation, incomplete or incorrect
          information or fraud, on the date on which Borrower knows, has reason
          to know, or receives Notice from Lender, that (A) one or more of the
          representations and warranties set forth in Article 9 were inaccurate
          or incomplete in any material respect on any date when made or deemed
          made, or (B) Borrower has failed to perform or comply with any
          covenant, term or condition set forth in Article 9.

                                    Page 3-2

<PAGE>

     (4)  On the date the Pledged Loan or a Lien prior to the Mortgage securing
          repayment of the Pledged Loan is defaulted and remains in default for
          a period of 60 days or more.

     (5)  Upon the sale, other disposition or prepayment of any Pledged Asset
          or, with respect to a Pledged Loan included in an Eligible Mortgage
          Pool, upon the sale or other disposition of the related Agency
          Security.

     (6)  One (1) Business Day immediately preceding the date scheduled for the
          foreclosure or trustee sale of the premises securing a Pledged Loan.

3.3(d) Upon telephonic or written Notice to Borrower by Lender, Borrower must
     pay to Lender, and Borrower authorizes Lender to cause the Funding Bank to
     charge Borrower's Operating Account for, the amount of any outstanding
     Warehousing Advance against a specific Pledged Asset upon the earliest
     occurrence of any of the following events:

     (1)  For any Pledged Loan, other than an Aged Mortgage Loan, the Standard
          Warehouse Period elapses and, for any Aged Mortgage Loan, the Aged
          Warehouse Period elapses.

     (2)  Forty-five (45) days elapse from the date a Pledged Loan was delivered
          to an Investor or Approved Custodian for examination and purchase or
          for inclusion in a Mortgage Pool, without the purchase being made or
          an Eligible Mortgage Pool being initially certified, or upon rejection
          of a Pledged Loan as unsatisfactory by an Investor or Approved
          Custodian.

     (3)  Seven (7) Business Days elapse from the date a Wet Settlement Advance
          was made against a Pledged Loan other than a Repurchased Mortgage Loan
          without receipt by Lender of all Collateral Documents relating to the
          Pledged Loan.

     (4)  Three (3) Business Days after the mandatory delivery date of the
          related Purchase Commitment if the specific Pledged Loan or the
          Pledged Security backed by that Pledged Loan has not been delivered
          under the Purchase Commitment prior to such mandatory delivery date,
          or on the date the related Purchase Commitment expires or is
          terminated, unless, in each case, the Pledged Loan or Pledged Security
          is eligible for delivery to another Investor under a comparable
          Purchase Commitment.

     (5)  Twenty (20) Business Days elapse from the date a Wet Settlement
          Advance was made against a Repurchased Mortgage Loan without receipt
          by Lender of all Collateral Documents relating to the Pledged Loan.

     (6)  With respect to any Pledged Loan, any of the Collateral Documents,
          upon examination by Lender, are found not to be in compliance with the
          requirements of this Agreement or the related Purchase Commitment.

3.3(e) In addition to the payments required by Sections 3.3(a), 3.3(c) and
     3.3(d), if the principal amount of any Pledged Loan is prepaid in whole or
     in part while a Warehousing Advance is outstanding against the Pledged
     Loan, Borrower must pay to Lender, without the necessity of prior demand or
     Notice from Lender, and Borrower authorizes Lender to cause the Funding
     Bank to charge Borrower's Operating Account for, the amount of the
     prepayment, to be applied against the Warehousing Advance.

3.3(f) The proceeds of the sale or other disposition of Pledged Assets must be
     paid directly by the Investor to the Cash Collateral Account. Borrower must
     give Notice to Lender in

                                    Page 3-3

<PAGE>

     writing or by telephone or by RFConnects Delivery to Lender (and if by
     telephone, followed promptly by written Notice) of the Pledged Assets for
     which proceeds have been received. Upon receipt of Borrower's Notice,
     Lender will apply any proceeds deposited into the Cash Collateral Account
     to the payment of the Warehousing Advances related to the Pledged Assets
     identified by Borrower in its Notice, and those Pledged Assets will be
     considered to have been redeemed from pledge. Lender is entitled to rely
     upon Borrower's affirmation that deposits in the Cash Collateral Account
     represent payments from Investors for the purchase of the Pledged Assets
     specified by Borrower in its Notice. If the payment from an Investor for
     the purchase of Pledged Assets is less than the outstanding Warehousing
     Advances against the Pledged Assets identified by Borrower in its Notice,
     Borrower must pay to Lender, and Borrower authorizes Lender to cause the
     Funding Bank to charge Borrower's Operating Account in, an amount equal to
     that deficiency. As long as no Default or Event of Default exists, Lender
     will return to Borrower any excess payment from an Investor for Pledged
     Assets.

3.3(g) Lender reserves the right to revalue any Pledged Loan. Borrower must pay
     to Lender, without the necessity of prior demand or Notice from Lender, and
     Borrower authorizes Lender to cause the Funding Bank to charge Borrower's
     Operating Account for, any amount required after any such revaluation to
     reduce the principal amount of the Warehousing Advance outstanding against
     the revalued Pledged Loan to an amount equal to the Advance Rate for the
     applicable type of Eligible Loan multiplied by the Fair Market Value of the
     Mortgage Loan.

3.4. Buydowns

Borrower may prepay a portion of the Warehousing Advances outstanding against
Subprime Mortgage Loans (a "Buydown") upon Notice to Lender not later than 1:00
p.m. on the Business Day immediately preceding the Business Day on which
Borrower desires to make a Buydown. Each Buydown must be in an amount not less
than $100,000, and minimum increments of $5,000 in excess of $100,000, and
Buydowns may not exceed the aggregate principal balance of the Warehousing
Advances outstanding against Subprime Mortgage Loans. A Buydown is a reduction
in the aggregate amount of the Warehousing Advances outstanding against Subprime
Mortgage Loans, but does not represent the prepayment of any particular
Warehousing Advance, and does not entitle Borrower to the release of any
Collateral. Lender may apply Buydowns to reduce interest payable by Borrower on
outstanding Warehousing Advances in any order that Lender determines in its sole
discretion. Unless a Default or Event of Default exists, Borrower may reborrow
all or any portion of a Buydown upon Notice to Lender not later than 1:00 p.m.
on the Business Day immediately preceding the Busines Day on which borrower
desires to reborrow. If Lender receives Buydowns or a combination of Buydowns
and payments of Warehousing Advances that exceed the aggregate principal balance
of the Warehousing Advances outstanding against Subprime Mortgage Loans (an
"Excess Buydown"), as long as no Default or Event of Default exists, Borrower
may reborrow all or any portion of an Excess Buydown upon Notice to Lender not
later than 1:00 p.m. on the Business Day immediately preceding the Business Day
on which Borrower desires to reborrow. Alternatively, Lender may, in its sole
discretion, re-advance to Borrower all or any portion of an Excess Buydown by
causing the Funding Bank to credit the Operating Account in that amount. Lender
has no obligation to pay or otherwise provide to Borrower any interest,
dividends or other benefits on an Excess Buydown.

3.5. Non-Usage Fees

At the end of each Calendar Quarter during the term of this Agreement, Lender
will determine the average usage of the Warehousing Commitment by calculating
the arithmetic daily average of the Warehousing Advances outstanding during such
Calendar Quarter ("Used Portion"). Lender will then subtract the Used Portion
from the arithmetic daily average of the Warehousing Commitment Amount during
such Calendar Quarter, and the result, if positive, will be known as the "Unused

                                    Page 3-4

<PAGE>

Portion." Borrower must pay to Lender a fee ("Non-Usage Fee") in the amount set
forth in Exhibit I. The Non-Usage Fee is payable quarterly, in arrears. Lender
computes the Non-Usage Fee on the basis of the actual number of days in each
Calendar Quarter and a year of 360 days. Borrower must pay the Non-Usage Fee
within 9 days after the date of Lender's invoice or, if applicable, within 2
days after the date of Lender's account analysis statement. If the date set
forth in clause (a) of the definition of Warehousing Maturity Date occurs on a
day other than the last day of a Calendar Quarter, Borrower must pay the
prorated portion of the Non-Usage Fee due from the beginning of the then current
Calendar Quarter to and including that date. Borrower is not entitled to a
reduction in the amount of the Non-Usage Fee if (a) the Warehousing Commitment
Amount is reduced or (b) the Warehousing Commitment is terminated at the request
of Borrower or as a result of an Event of Default. If the Warehousing Commitment
terminates at the request of Borrower or as a result of an Event of Default,
Borrower must pay, on the date of termination, a Non-Usage Fee on the
Warehousing Commitment Amount in effect immediately prior to the date of
termination, for the period from the date of termination to and including the
date set forth in clause (a) of the definition of Warehousing Maturity Date.
Lender's determination of the Non-Usage Fee for any period is conclusive and
binding, absent manifest error.

3.6. Loan Package Fees, Wire Fees, Warehousing Fees

At the time of each Warehousing Advance against an Eligible Loan, Borrower will
incur a loan package fee ("Loan Package Fee") and a wire fee ("Wire Fee"). Loan
Package Fees and Wire Fees may, at Lender's discretion, be billed separately or
combined into a single warehousing fee ("Warehousing Fee"). Borrower must pay
all Loan Package Fees, Wire Fees or Warehousing Fees in the amount set forth in
Exhibit I within 9 days after the date of Lender's invoice or, if applicable,
within 2 days after the date of Lender's account analysis statement.

3.7. Miscellaneous Fees and Charges

Borrower must reimburse Lender for all Miscellaneous Fees and Charges. Borrower
must pay all Miscellaneous Fees and Charges within 9 days after the date of
Lender's invoice or, if applicable, within 2 days after the date of Lender's
account analysis statement.

3.8. Overdraft Advances

If, under the authorization given by Borrower in the Funding Bank Agreement or
pursuant to this Agreement, Lender debits Borrower's Operating Account or
directs the Funding Bank to honor an item presented against the Operating
Account or against the Check Disbursement Account, and that debit or direction
results in an overdraft, Lender may make an additional Warehousing Advance to
fund that overdraft ("Overdraft Advance"). Borrower must pay (a) the outstanding
amount of any Overdraft Advance, within 1 Business Day after the date of the
Overdraft Advance, and (b) interest on the amount of the Overdraft Advance, at a
rate per annum equal to the Bank One Prime Rate plus 2%, within 9 days after the
date of Lender's invoice or, if applicable, within 2 days after the date of
Lender's account analysis statement.

3.9. Method of Making Payments

3.9(a) Unless otherwise specified in this Agreement, Borrower must make all
     payments under this Agreement to Lender by the close of business on the
     date when due unless the date is not a Business Day. If the due date is not
     a Business Day, payment is due on, and interest will accrue to, the next
     Business Day. Borrower must make all payments in United States dollars in
     immediately available funds transferred by wire to accounts designated by
     Lender.

                                    Page 3-5

<PAGE>

3.9(b) Borrower authorizes Lender to cause the Funding Bank to charge Borrower's
     Operating Account for any interest or fees due and payable to Lender on or
     after the 9th day after the date of Lender's invoice or, if applicable, on
     or after the 2nd day after the date of Lender's account analysis statement,
     without the necessity of prior demand or Notice from Lender.

3.9(c) While an Event of Default exists, Borrower authorizes Lender to cause the
     Funding Bank to charge Borrower's Operating Account for any Obligations due
     and payable to Lender, without the necessity of prior demand or Notice from
     Lender.

                                End of Article 3

                                    Page 3-6

<PAGE>

4.   COLLATERAL

4.1. Grant of Security Interest

As security for the payment of the Warehousing Note and for the performance of
all of Borrower's Obligations, Borrower grants a security interest to Lender in
all of Borrower's right, title and interest in and to the following described
property ("Collateral"):

4.1(a) All amounts advanced by Lender to or for the account of Borrower under
     this Agreement to fund a Mortgage Loan until that Mortgage Loan is closed
     and those funds disbursed.

4.1(b) All Mortgage Loans, including all Mortgage Notes, Mortgages and Security
     Agreements evidencing or securing those Mortgage Loans, that are delivered
     or caused to be delivered to Lender (including delivery to a third party on
     behalf of Lender), or that otherwise come into the possession, custody or
     control of Lender (including the possession, custody or control of a third
     party on behalf of Lender) for the purpose of pledge or in respect of which
     Lender has made a Warehousing Advance under this Agreement (collectively,
     "Pledged Loans").

4.1(c) All Mortgage-backed Securities that are created in whole or in part on
     the basis of Pledged Loans or that are delivered or caused to be delivered
     to Lender (including delivery to a third party on behalf of Lender), or
     that otherwise come into the possession, custody or control of Lender
     (including the possession, custody or control of a third party on behalf of
     Lender) or that are registered by book-entry in the name of Lender
     (including registration in the name of a third party on behalf of Lender),
     in each case for the purpose of pledge, or in respect of which a
     Warehousing Advance has been made by Lender under this Agreement
     (collectively, "Pledged Securities").

4.1(d) All private mortgage insurance and all commitments issued by the VA or
     FHA to insure or guarantee any Mortgage Loans included in the Pledged
     Loans; all Purchase Commitments held by Borrower covering Pledged Loans or
     Pledged Securities, and all proceeds from the sale of Pledged Loans or
     Pledged Securities to Investors pursuant to those Purchase Commitments; and
     all personal property, contract rights, servicing rights or contracts and
     servicing fees and income or other proceeds, amounts and payments payable
     to Borrower as compensation or reimbursement, accounts, payments,
     intangibles and general intangibles of every kind relating to Pledged
     Loans, Pledged Securities, Purchase Commitments, VA commitments or
     guaranties. FHA commitments, private mortgage insurance and commitments,
     and all other documents or instruments relating to Pledged Loans and
     Pledged Securities, including any interest of Borrower in any fire,
     casualty or hazard insurance policies and any awards made by any public
     body or decreed by any court of competent jurisdiction for a taking or for
     degradation of value in any eminent domain proceeding as the same relate to
     Pledged Loans.

4.1(e) All accounts or general intangibles owned by Borrower ("Receivables") for
     the payment of money against (1) VA under a VA guaranty of, FHA or a
     private mortgage insurer under an FHA or private insurer's mortgage
     insurance policy insuring payment of, or any other Person under any other
     agreement (including a Servicing Contract) relating to, all or part of a
     defaulted Mortgage Loan repurchased by Borrower from an investor or out of
     a pool of Mortgage Loans serviced by Borrower, (2) obligors and their
     accounts, Fannie Mae, Freddie Mac, Ginnie Mae or any other investor under a
     Servicing Contract covering, or out of the proceeds of any sale of or
     foreclosure sale in respect of, any Mortgage Loan (A) repurchased by
     Borrower out of a pool of Mortgage Loans serviced by Borrower, or (B) being
     serviced by Borrower, in either case, for the reimbursement of real estate
     taxes or assessments, or casualty or liability insurance premiums, paid by

                                    Page 4-1

<PAGE>

     Borrower in connection with Mortgage Loans and (3) obligors and their
     accounts, or Fannie Mae, Freddie Mac, Ginnie Mae or any other investor
     under or in respect of, or out of the proceeds of any sale or foreclosure
     sale in respect of, any Mortgage Loans serviced by Borrower for repayment
     of advances made by Borrower to cover shortages in principal and interest
     payments.

4.1(f) All escrow accounts, documents, instruments, files, surveys,
     certificates, correspondence, appraisals, computer programs, tapes, discs,
     cards, accounting records (including all information, records, tapes, data,
     programs, discs and cards necessary or helpful in the administration or
     servicing of the Collateral) and other information and data of Borrower
     relating to the Collateral.

4.1(g) All cash, whether now existing or acquired after the date of this
     Agreement, delivered to or otherwise in the possession of Lender, the
     Funding Bank or Lender's agent, bailee or custodian or designated on the
     books and records of Borrower as assigned and pledged to Lender, including
     all cash deposited in the Cash Collateral Account, the Check Disbursement
     Account and the Wire Disbursement Account.

4.1(h) All Hedging Arrangements related to the Collateral ("Pledged Hedging
     Arrangements") and Borrower's accounts in which those Hedging Arrangements
     are held ("Pledged Hedging Accounts"), including all rights to payment
     arising under the Pledged Hedging Arrangements and the Pledged Hedging
     Accounts, except that Lender's security interest in the Pledged Hedging
     Arrangements and Pledged Hedging Accounts applies only to benefits,
     including rights to payment, related to the Collateral.

4.1(i) All cash and non-cash proceeds of the Collateral, including all
     dividends, distributions and other rights in connection with, and all
     additions to, modifications of and replacements for, the Collateral, and
     all products and proceeds of the Collateral, together with whatever is
     receivable or received when the Collateral or proceeds of Collateral are
     sold, collected, exchanged or otherwise disposed of, whether such
     disposition is voluntary or involuntary, including all rights to payment
     with respect to any cause of action affecting or relating to the Collateral
     or proceeds of Collateral.

4.2. Maintenance of Collateral Records

As long as the Warehousing Commitment is outstanding or there remain any
Obligations to be paid or performed under this Agreement or under any other Loan
Document, Borrower must preserve and maintain, at its chief executive office and
principal place of business or in a regional office approved by Lender, or in
the office of a computer service bureau engaged by Borrower and approved by
Lender and, upon request, make available to Lender the originals, or copies in
any case where the originals have been delivered to Lender or to an Investor, of
the Mortgage Notes, Mortgages and Security Agreements included in Pledged Loans,
Mortgage-backed Securities delivered to Lender as Pledged Securities, Purchase
Commitments, and all related Mortgage Loan documents and instruments, and all
files, surveys, certificates, correspondence, appraisals, computer programs,
tapes, discs, cards, accounting records and other information and data relating
to the Collateral.

4.3. Release of Security Interest in Pledged Loans and Pledged Securities

4.3(a) Except as provided in Section 4.3(b), Lender will release its security
     interest in the Pledged Loans only against payment to Lender of the Release
     Amount in connection with those Pledged Loans. If Pledged Loans are
     transferred to a pool custodian or an Investor for inclusion in a Mortgage
     Pool and Lender's security interest in the Pledged Loans included in the
     Mortgage Pool is not released before the issuance of the related
     Mortgage-backed Security, then that Mortgage-backed Security, when issued,
     is a

                                   Page 4-2

<PAGE>

     Pledged Security, Lender's security interest continues in the Pledged Loans
     backing that Pledged Security and Lender is entitled to possession of the
     Pledged Security in the manner provided in this Agreement.

4.3(b) If Pledged Loans are transferred to an Approved Custodian and included in
     an Eligible Mortgage Pool, Lender's security interest in the Pledged Loans
     included in the Eligible Mortgage Pool will be released upon the delivery
     of the Agency Security to Lender (including delivery to or registration in
     the name of a third party on behalf of Lender) and that Agency Security is
     a Pledged Security. Lender's security interest in that Pledged Security
     will be released only against payment to Lender of the Release Amount in
     connection with the Mortgage Loans backing that Pledged Security.

4.3(c) Lender has the exclusive right to possession of all Pledged Securities
     or, if Pledged Securities are issued in book-entry form or issued in
     certificated form and delivered to a clearing corporation (as that term is
     defined in the Uniform Commercial Code of Minnesota) or its nominee, Lender
     has the right to have the Pledged Securities registered in the name of a
     securities intermediary (as that term is defined in the Uniform Commercial
     Code of Minnesota) in an account containing only customer securities and
     credited to an account of Lender. Lender has no duty or obligation to
     deliver Pledged Securities to an Investor or to credit Pledged Securities
     to the account of an Investor or an Investor's designee except against
     payment for those Pledged Securities. Borrower acknowledges that Lender may
     enter into one or more standing arrangements with securities intermediaries
     with respect to Pledged Securities issued in book entry form or issued in
     certificated form and delivered to a clearing corporation or its designee,
     under which the Pledged Securities are registered in the name of the
     securities intermediary, and Borrower agrees, upon request of Lender, to
     execute and deliver to those securities intermediaries Borrower's written
     concurrence in any such standing arrangements.

4.3(d) If no Default or Event of Default occurs, Borrower may redeem a Pledged
     Loan or Pledged Security from Lender's security interest by notifying
     Lender of its intention to redeem the Pledged Loan or Pledged Security from
     pledge and either (1) paying, or causing an Investor to pay, to Lender, for
     application as a prepayment on the principal balance of the Warehousing
     Note, the Release Amount in connection with the Pledged Loan or the Pledged
     Loans backing that Pledged Security, or (2) delivering substitute
     Collateral that, in addition to being acceptable to Lender in its sole
     discretion, will, when included with the remaining Collateral, result in a
     Warehousing Collateral Value of all Collateral held by Lender that is at
     least equal to the aggregate outstanding Warehousing Advances.

4.3(e) After a Default or Event of Default occurs, Lender may, with no liability
     to Borrower or any Person, continue to release its security interest in any
     Pledged Loan or Pledged Security against payment of the Release Amount for
     that Pledged Loan or for the Pledged Loans backing that Pledged Security.

4.3(f) The amount to be paid by Borrower to obtain the release of Lender's
     security interest in a Pledged Loan ("Release Amount") will be (1) in
     connection with the sale of a Pledged Loan by Borrower, the payment
     required in any bailee letter pursuant to which Lender ships that Pledged
     Loan to an Investor, Approved Custodian, pool custodian or other party, (2)
     in connection with the sale of a Pledged Loan by Lender while an Event of
     Default exists, the amount paid to Lender in a commercially reasonable
     disposition of that Pledged Loan and (3) otherwise, until an Event of
     Default occurs, the principal amount of the Warehousing Advance outstanding
     against the Pledged Loan.

                                    Page 4-3

<PAGE>

4.4. Collection and Servicing Rights

4.4(a) If no Event of Default exists, Borrower may service and receive and
     collect directly all sums payable to Borrower in respect of the Collateral
     other than proceeds of any Purchase Commitment or proceeds of the sale of
     any Collateral. All proceeds of any Purchase Commitment or any other sale
     of Collateral must be paid directly to the Cash Collateral Account for
     application as provided in this Agreement.

4.4(b) After an Event of Default, Lender or its designee is entitled to service
     and receive and collect all sums payable to Borrower in respect of the
     Collateral, and in such case (1) Lender or its designee in its discretion
     may, in its own name, in the name of Borrower or otherwise, demand, sue
     for, collect or receive any money or property at any time payable or
     receivable on account of or in exchange for any of the Collateral, but
     Lender has no obligation to do so, (2) Borrower must, if Lender requests it
     to do so, hold in trust for the benefit of Lender and immediately pay to
     Lender at its office designated by Notice, all amounts received by Borrower
     upon or in respect of any of the Collateral, advising Lender as to the
     source of those funds and (3) all amounts so received and collected by
     Lender will be held by it as part of the Collateral.

4.5. Return of Collateral at End of Warehousing Commitment

If (a) the Warehousing Commitment has expired or been terminated, and (b) no
Warehousing Advances, interest or other Obligations are outstanding and unpaid,
Lender will release its security interest and will deliver all Collateral in its
possession to Borrower at Borrower's expense. Borrower's acknowledgement or
receipt for any Collateral released or delivered to Borrower under any provision
of this Agreement is a complete and full acquittance for the Collateral so
returned, and Lender is discharged from any liability or responsibility for that
Collateral.

4.6. Delivery of Collateral Documents

4.6(a) Lender may deliver documents relating to the Collateral to Borrower for
     correction or completion under a Trust Receipt.

4.6(b) If no Event of Default exists, upon delivery by Borrower to Lender of
     shipping instructions pursuant to the applicable Exhibit B, Lender will
     deliver the Mortgage Notes evidencing Pledged Loans or Pledged Securities,
     together with all related loan documents and pool documents previously
     received by Lender under the requirements of the applicable Exhibit B, to
     the designated Investor or Approved Custodian or to another party
     designated by Borrower and acceptable to Lender in its sole discretion.

4.6(c) If an Event of Default exists, Lender may, without liability to Borrower
     or any other Person, continue to deliver Pledged Loans or Pledged
     Securities, together with all related loan documents and pool documents in
     Lender's possession, to the applicable Investor, or Approved Custodian or
     to another party acceptable to Lender in its sole discretion.

                                End of Article 4

                                    Page 4-4

<PAGE>

5.   CONDITIONS PRECEDENT

5.1. Initial Advance

Lender's obligation to make the initial Warehousing Advance, is subject to the
satisfaction, in the sole discretion of Lender, of the following conditions
precedent:

5.1(a) Lender must receive the following, all of which must be satisfactory in
     form and content to Lender, in its sole discretion:

     (1)  The Warehousing Note and this Agreement duly executed by each
          Borrower.

     (2)  First NLC's articles of organization, together with all amendments, as
          certified by the Secretary of State of Florida, First NLC's operating
          agreement, together with all amendments, certified by the assistant
          secretary of First NLC, or a certificate of First NLC stating that
          there has been no change in either First NLC's articles of
          organization or operating agreement since those delivered in
          connection with the Existing Agreement, and certificates of good
          standing dated within 60 days of the date of this Agreement, together
          with a certification from the Franchise Tax Board or other state tax
          authority stating that First NLC is in good standing with the
          Franchise Tax Board or such state tax authority, if applicable.

     (3)  A resolution, consent or approval of all of the managers of First NLC
          authorizing the execution, delivery and performance of this Agreement
          and the other Loan Documents, each Warehousing Advance Request and all
          other agreements, instruments or documents to be delivered by First
          NLC under this Agreement.

     (4)  A certificate as to the incumbency and authenticity of the signatures
          of the managers of First NLC executing this Agreement and the other
          Loan Documents.

     (5)  NLC, Inc.'s charter, together with all amendments, as certified by the
          Secretary of State of Tennessee, NLC, Inc.'s bylaws, together with all
          amendments, certified by the corporate secretary or assistant
          secretary of NLC, Inc., or a certificate of NLC, Inc. stating that
          there has been no change in either NLC, Inc.'s charter or bylaws since
          those delivered in connection with the Existing Agreement, and
          certificates of good standing dated within 60 days of the date of this
          Agreement, together with a certification from the Franchise Tax Board
          or other state tax authority stating that NLC, Inc. is in good
          standing with the Franchise Tax Board or such state tax authority, if
          applicable.

     (6)  A resolution, consent or approval of all of the board of directors of
          NLC, Inc. authorizing the execution, delivery and performance of this
          Agreement and the other Loan Documents, each Warehousing Advance
          Request and all other agreements, instruments or documents to be
          delivered by NLC, Inc. under this Agreement.

     (7)  A certificate as to the incumbency and authenticity of the signatures
          of the officers of NLC, Inc. executing this Agreement and the other
          Loan Documents.

     (8)  Assumed Name Certificates dated within 30 days of the date of this
          Agreement for any assumed name used by each Borrower in the conduct of
          its business.

     (9)  Uniform Commercial Code, tax lien and judgment searches of the
          appropriate public records for each Borrower that do not disclose the
          existence of any prior

                                    Page 5-1

<PAGE>

          Lien on the Collateral other than in favor of Lender or as permitted
          under this Agreement.

     (10) Copies of each Borrower's errors and omissions insurance policy or
          mortgage impairment insurance policy, and blanket bond coverage
          policy, or certificates in lieu of policies, showing compliance by
          each Borrower as of the date of this Agreement with the provisions of
          Section 7.9.

     (11) Receipt by Lender of any fees due on the date of this Agreement.

5.1(b) If, as of the date of this Agreement, Borrower has any indebtedness for
     borrowed money to any of its managers, members or Affiliates of any manager
     or member or any director, officer or shareholder of any manager, member or
     Affiliate of any manager or member, which indebtedness has a term of more
     than 1 year or is in excess of $25,000, the Person to whom Borrower is
     indebted must have executed a Subordination of Debt Agreement, on the form
     prescribed by Lender; and Lender must have received an executed copy of
     that Subordination of Debt Agreement, certified by the manager of First NLC
     or the corporate secretary of NLC, Inc. to be true and complete and in full
     force and effect as of the date of the Warehousing Advance.

5.1(c) Borrower must not have incurred any material liabilities, direct or
     contingent, other than in the ordinary course of its business, since the
     Audited Statement Date.

5.2. Each Advance

Lender's obligation to make the initial and each subsequent Warehousing Advance
is subject to the satisfaction, in the sole discretion of Lender, as of the date
of each Warehousing Advance, of the following additional conditions precedent:

5.2(a) Borrower must have delivered to Lender the Warehousing Advance Request
     and Collateral Documents required by, and must have satisfied the
     procedures set forth in, Article 2 and the Exhibits described in that
     Article. All items delivered to Lender must be satisfactory to Lender in
     form and content, and Lender may reject any item that does not satisfy the
     requirements of this Agreement or of the related Purchase Commitment.

5.2(b) Lender must have received evidence satisfactory to it as to the making or
     continuation of any book entry or the due filing and recording in all
     appropriate offices of all financing statements and other instruments
     necessary to perfect the security interest of Lender in the Collateral
     under the Uniform Commercial Code or other applicable law.

5.2(c) The representations and warranties of Borrower contained in Article 6 and
     Article 9 must be accurate and complete in all material respects as if made
     on and as of the date of each Warehousing Advance.

5.2(d) Borrower must have performed all agreements to be performed by it under
     this Agreement, and after giving effect to the requested Warehousing
     Advance, no Default or Event of Default will exist under this Agreement.

Delivery of a Warehousing Advance Request by Borrower will be deemed a
representation by Borrower that all conditions set forth in this Section have
been satisfied as of the date of the Warehousing Advance.

                                    Page 5-2

<PAGE>

5.3. Force Majeure

Notwithstanding Borrower's satisfaction of the conditions set forth in this
Agreement, Lender has no obligation to make a Warehousing Advance if Lender is
prevented from obtaining the funds necessary to make a Warehousing Advance, or
is otherwise prevented from making a Warehousing Advance as a result of any fire
or other casualty, failure of power, strike, lockout or other labor trouble,
banking moratorium, embargo, sabotage, confiscation, condemnation, riot, civil
disturbance, insurrection, act of terrorism, war or other activity of armed
forces, act of God or other similar reason beyond the control of Lender. Lender
will make the requested Warehousing Advance as soon as reasonably possible
following the occurrence of such an event.

                                End of Article 5

                                    Page 5-3

<PAGE>

6.   GENERAL REPRESENTATIONS AND WARRANTIES

Each Borrower represents and warrants to Lender, as of the date of this
Agreement and as of the date of each Warehousing Advance Request and the making
of each Warehousing Advance, that:

6.1. Place of Business

Each Borrower's chief executive office and principal place of business is 700 W.
Hillsboro Boulevard, Building 1, Suite 204, Deerfield Beach, Florida, 33441.

6.2. Organization; Good Standing; Subsidiaries

6.2(a) First NLC is a limited liability company duly organized, validly existing
     and in good standing under the laws of the State of Florida, and has the
     full legal power and authority to own its property and to carry on its
     business as currently conducted. First NLC is duly qualified as a foreign
     limited liability company to do business and is in good standing in each
     jurisdiction in which the transaction of its business makes qualification
     necessary, except in jurisdictions, if any, where a failure to be in good
     standing has no material adverse effect on First NLC's business,
     operations, assets or financial condition as a whole. For the purposes of
     this Agreement, good standing includes qualification for all licenses and
     payment of all taxes required in the jurisdiction of its formation and in
     each jurisdiction in which First NLC transacts business. First NLC has no
     Subsidiaries except as set forth on Exhibit D, which sets forth with
     respect to each Subsidiary, its name, address, jurisdiction of
     organization, each state in which it is qualified to do business, and the
     percentage ownership of its membership interests by First NLC. Each of
     First NLC's Subsidiaries is duly organized, validly existing and in good
     standing under the laws of the jurisdiction of its organization, and has
     the full legal power and authority to own its property and to carry on its
     business as currently conducted.

6.2(b) NLC, Inc. is a corporation duly organized, validly existing and in good
     standing under the laws of the State of Tennessee, and has the full legal
     power and authority to own its property and to carry on its business as
     currently conducted. NLC, Inc. is duly qualified as a foreign corporation
     to do business and is in good standing in each jurisdiction in which the
     transaction of its business makes qualification necessary, except in
     jurisdictions, if any, where a failure to be in good standing has no
     material adverse effect on NLC, Inc.'s business, operations, assets or
     financial condition as a whole. For the purposes of this Agreement, good
     standing includes qualification for all licenses and payment of all taxes
     required in the jurisdiction of its formation and in each jurisdiction in
     which NLC, Inc. transacts business. NLC, Inc. has no Subsidiaries.

6.3. Authorization and Enforceability

Each Borrower has the power and authority to execute, deliver and perform this
Agreement, the Warehousing Note and other Loan Documents to which Borrower is
party and to make the borrowings under this Agreement. The execution, delivery
and performance by each Borrower of this Agreement, the Warehousing Note and the
other Loan Documents to which Borrower is party and the making of the borrowings
under this Agreement, and the Warehousing Note, have been duly and validly
authorized by all necessary company action on the part of Borrower (none of
which actions has been modified or rescinded, and all of which actions are in
full force and effect) and do not and will not (a) conflict with or violate any
provision of law, of any judgments binding upon Borrower, or of the articles of
organization or operating agreement of Borrower, or (b) conflict with or result
in a breach of, constitute a default or require any consent under, or result in

                                    Page 6-1

<PAGE>

or require the acceleration of any indebtedness of Borrower under any agreement,
instrument or indenture to which Borrower is a party or by which Borrower or its
property may be bound or affected, or result in the creation of any Lien upon
any property or assets of Borrower (other than the Lien on the Collateral
granted under this Agreement). This Agreement, the Warehousing Note and the
other Loan Documents constitute the legal, valid and binding obligations of each
Borrower, enforceable in accordance with their respective terms, except as
limited by bankruptcy, insolvency or other such laws affecting the enforcement
of creditors' rights.

6.4. Approvals

The execution and delivery of this Agreement, the Warehousing Note and the other
Loan Documents and the performance of Borrower's obligations under this
Agreement, the Warehousing Note and the other Loan Documents and the validity
and enforceability of this Agreement, the Warehousing Note and the other Loan
Documents do not require any license, consent, approval or other action of any
state or federal agency or governmental or regulatory authority other than those
that have been obtained and remain in full force and effect.

6.5. Financial Condition

The balance sheet of First NLC and its Subsidiaries, on a consolidated basis, as
of each Statement Date, and the related statements of income, cash flows and
changes in members' equity for the fiscal period ended on each Statement Date,
furnished to Lender, fairly present the financial condition of First NLC and its
Subsidiaries as at that Statement Date and the results of its operations for the
fiscal period ended on that Statement Date. First NLC had, on each Statement
Date, no known material liabilities, direct or indirect, fixed or contingent,
matured or unmatured, or liabilities for taxes, long-term leases or unusual
forward or long-term commitments not disclosed by, or reserved against in, those
financial statements, and at the present time there are no material unrealized
or anticipated losses from any loans, advances or other commitments of First NLC
except as previously disclosed to Lender in writing. Those financial statements
were prepared in accordance with GAAP applied on a consistent basis throughout
the periods involved. Since the Audited Statement Date, there has been no
material adverse change in the business, operations, assets or financial
condition of First NLC and its Subsidiaries, nor is First NLC aware of any state
of facts that (with or without notice or lapse of time or both) would or could
result in any such material adverse change.

6.6. Litigation

There are no actions, claims, suits or proceedings pending or, to Borrower's
knowledge, threatened or reasonably anticipated against or affecting Borrower or
any Subsidiary of Borrower in any court or before any arbitrator or before any
government commission, board, bureau or other administrative agency that, if
adversely determined, may reasonably be expected to result in a material adverse
change in Borrower's business, operations, assets or financial condition as a
whole, or that would affect the validity or enforceability of this Agreement,
the Warehousing Note or any other Loan Document.

6.7. Compliance with Laws

Neither Borrower nor any Subsidiary of Borrower is in violation of any provision
of any law, or of any judgment, award, rule, regulation, order, decree, writ or
injunction of any court or public regulatory body or authority that could result
in a material adverse change in Borrower's business, operations, assets or
financial condition as a whole or that would affect the validity or
enforceability of this Agreement, the Warehousing Note or any other Loan
Document.

                                    Page 6-2

<PAGE>

6.8. Regulation U

Borrower is not engaged principally, or as one of its important activities, in
the business of extending credit for the purpose of purchasing or carrying
Margin Stock, and no part of the proceeds of any Warehousing Advance made under
this Agreement will be used to purchase or carry any Margin Stock or to extend
credit to others for the purpose of purchasing or carrying any Margin Stock.

6.9. Investment Company Act

Borrower is not an "investment company" or controlled by an "investment company"
within the meaning of the Investment Company Act.

6.10. Payment of Taxes

Borrower and each of its Subsidiaries has filed or caused to be filed all
federal, state and local income, excise, property and other tax returns that are
required to be filed with respect to the operations of Borrower and its
Subsidiaries, all such returns are true and correct and Borrower and each of its
Subsidiaries has paid or caused to be paid all taxes shown on those returns or
on any assessment, to the extent that those taxes have become due, including all
FICA payments and withholding taxes, if appropriate. The amounts reserved as a
liability for income and other taxes payable in the financial statements
described in Section 6.5 are sufficient for payment of all unpaid federal, state
and local income, excise, property and other taxes, whether or not disputed, of
Borrower and its Subsidiaries accrued for or applicable to the period and on the
dates of those financial statements and all years and periods prior to those
financial statements and for which Borrower and its Subsidiaries may be liable
in their own right or as transferee of the assets of, or as successor to, any
other Person. No tax Liens have been filed and no material claims are being
asserted against Borrower, any Subsidiary of Borrower or any property of
Borrower or any Subsidiary of Borrower with respect to any taxes, fees or
charges.

6.11. Agreements

Neither Borrower nor any Subsidiary of Borrower is a party to any agreement,
instrument or indenture or subject to any restriction materially and adversely
affecting its business, operations, assets or financial condition, except as
disclosed in the financial statements described in Section 6.5. Neither Borrower
nor any Subsidiary of Borrower is in default in the performance, observance or
fulfillment of any of the obligations, covenants or conditions contained in any
agreement, instrument, or indenture which default could result in a material
adverse change in Borrower's business, operations, properties or financial
condition as a whole. No holder of any indebtedness of Borrower or of any of its
Subsidiaries has given notice of any asserted default under that indebtedness,
and no liquidation or dissolution of Borrower or of any of its Subsidiaries and
no receivership, insolvency, bankruptcy, reorganization or other similar
proceedings relative to Borrower or of any of its Subsidiaries or any of its or
their properties is pending, or to the knowledge of Borrower, threatened.

6.12. Title to Properties

Borrower and each Subsidiary of Borrower has good, valid, insurable and (in the
case of real property) marketable title to all of its properties and assets
(whether real or personal, tangible or intangible) reflected on the financial
statements described in Section 6.5, except for those properties and assets that
Borrower has disposed of since the date of those financial statements either in
the ordinary course of business or because they were no longer used or useful in
the conduct of Borrower's or the Subsidiary's business. All of Borrower's
properties and assets are free and clear of all Liens except as disclosed in
Borrower's financial statements.

                                    Page 6-3

<PAGE>

6.13. ERISA

Each Plan is in compliance with all applicable requirements of ERISA and the
Internal Revenue Code and with all material applicable rulings and regulations
issued under the provisions of ERISA and the Internal Revenue Code setting forth
those requirements, except where any failure to comply would not result in a
material loss to Borrower or any ERISA Affiliate. All of the minimum funding
standards or other contribution obligations applicable to each Plan have been
satisfied. No Plan is a defined-benefit pension plan subject to Title IV of
ERISA, and there is no Multiemployer Plan.

6.14. No Retiree Benefits

Except as required under Section 4980B of the Internal Revenue Code, Section 601
of ERISA or applicable state law, neither Borrower nor, if applicable, any
Subsidiary is obligated to provide post-retirement medical or insurance benefits
with respect to employees or former employees.

6.15. Assumed Names

Borrower does not originate Mortgage Loans or otherwise conduct business under
any names other than its legal name and the assumed names set forth on Exhibit
G. Borrower has made all filings and taken all other action as may be required
under the laws of any jurisdiction in which it originates Mortgage Loans or
otherwise conducts business under any assumed name. Borrower's use of the
assumed names set forth on Exhibit G does not conflict with any other Person's
legal rights to any such name, nor otherwise give rise to any liability by
Borrower to any other Person. Borrower may amend Exhibit G to add or delete any
assumed names used by Borrower to conduct business. An amendment to Exhibit G to
add an assumed name is not effective until Borrower has delivered to Lender an
assumed name certificate in the jurisdictions in which the assumed name is to be
used, which must be satisfactory in form and content to Lender, in its sole
discretion. In connection with any amendment to delete a name from Exhibit G,
Borrower represents and warrants that it has ceased using that assumed name in
all jurisdictions.

6.16. Servicing

Exhibit C is a true and complete list of Borrower's Servicing Portfolio. All of
Borrower's Servicing Contracts are in full force and effect, and are
unencumbered by Liens other than Liens disclosed in Exhibit C. No default or
event that, with notice or lapse of time or both, would become a default, exists
under any of Borrower's Servicing Contracts.

                                End of Article 6

                                    Page 6-4

<PAGE>

7.   AFFIRMATIVE COVENANTS

As long as the Warehousing Commitment is outstanding or there remain any
Obligations to be paid or performed under this Agreement or under any other Loan
Document, Borrower must:

7.1. Payment of Obligations

Punctually pay or cause to be paid all Obligations, including the Obligations
payable under this Agreement and under the Warehousing Note, in accordance with
their terms.

7.2. Financial Statements

Deliver to Lender:

7.2(a) As soon as available and in any event within 30 days after the end of
     each month, including the last month of First NLC's fiscal year, an interim
     statement of income of First NLC and its Subsidiaries, on a consolidated
     basis, for the immediately preceding month and for the period from the
     beginning of the fiscal year to the end of that month, and the related
     balance sheet as at the end of the immediately preceding month, all in
     reasonable detail, subject, however, to year-end audit adjustments.

7.2(b) As soon as available and in any event within 90 days after the end of
     each fiscal year of First NLC, fiscal year-end statements of income,
     changes in members' equity and cash flow of First NLC and its Subsidiaries,
     on a consolidated basis, for that year, and the related balance sheet as of
     the end of that year (setting forth in comparative form the corresponding
     figures for the preceding fiscal year), all in reasonable detail and
     accompanied by (1) an opinion as to those financial statements in form and
     substance satisfactory to Lender and prepared by independent certified
     public accountants of recognized standing acceptable to Lender and (2) any
     management letters, management reports or other supplementary comments or
     reports delivered by those accountants to First NLC or its board of
     managers.

7.2(c) Together with each delivery of financial statements required by this
     Section, a Compliance Certificate substantially in the form of Exhibit E.

7.2(d) Copies of all regular or periodic financial and other reports that
     Borrower files with the Securities and Exchange Commission or any successor
     governmental agency or other entity.

7.3. Other Borrower Reports

Deliver to Lender:

 7.3(a) As soon as available and in any event within 30 days after the end of
 each month, a consolidated loan production report as of the end of that month,
 presenting the total dollar volume and the number of Mortgage Loans originated
 and closed or purchased during that month and for the fiscal year-to-date,
 specified by property type and loan type.

7.3(b) Unless the Funding Bank has previously provided Lender with a copy of
     the Funding Bank's monthly statement for the Check Disbursement Account, as
     soon as available and in any event within 30 days after the end of each
     month, a copy of that monthly statement.

                                    Page 7-1

<PAGE>

7.3(c) As soon as available and in any event within 30 days after the end of
     each month, a report describing all Mortgage Loans owned by Borrower,
     whether funded by Lender or Borrower's other warehouse lenders, and listing
     the number of days that have passed since Borrower originated each Mortgage
     Loan.

7.3(d) As soon as available and in any event within 30 days after the end of
     each month, a report as of the end of that month detailing all requests
     that Borrower repurchase Mortgage Loans from an Investor or out of an
     Eligible Mortgage Pool, the status of each such request and any
     indemnification or similar agreement to which Borrower is a party in
     connection with any such request.

7.3(e) Other reports in respect of Pledged Assets, including copies of purchase
     confirmations issued by Investors purchasing Pledged Loans from Borrower,
     in such detail and at such times as Lender in its discretion may reasonably
     request.

7.3(f) With reasonable promptness, all further information regarding the
     business, operations, properties or financial condition of Borrower as
     Lender may reasonably request, including copies of any audits completed by
     HUD, Ginnie Mae, Fannie Mae or Freddie Mac.

7.4. Maintenance of Existence; Conduct of Business

7.4(a) Preserve and maintain First NLC's existence as a limited liability
     company in good standing and all of its rights, privileges, licenses and
     franchises necessary or desirable in the normal conduct of First NLC's
     business, including its eligibility as lender, seller/servicer and issuer
     described under Section 9.1; conduct its business in an orderly and
     efficient manner; maintain a net worth of acceptable assets as required for
     maintaining First NLC's eligibility as lender, seller/servicer and issuer
     described under Section 9.1; and make no material change in the nature or
     character of its business or engage in any business in which it was not
     engaged on the date of this Agreement.

7.4(b) Preserve and maintain NLC, Inc.'s corporate existence in good standing
     and all of its rights, privileges, licenses and franchises necessary or
     desirable in the normal conduct of its business, including its eligibility
     as lender, seller/servicer and issuer described under Section 9.1; conduct
     NLC, Inc.'s business in an orderly and efficient manner; maintain a net
     worth of acceptable assets as required for maintaining NLC, Inc.'s
     eligibility as lender, seller/servicer and issuer described under Section
     9.1; and make no material change in the nature or character of its business
     or engage in any business in which it was not engaged on the date of this
     Agreement.

7.5. Compliance with Applicable Laws

Comply with the requirements of all applicable laws, rules, regulations and
orders of any governmental authority, a breach of which could result in a
material adverse change in Borrower's business, operations, assets, or financial
condition as a whole or on the enforceability of this Agreement, the Warehousing
Note, any other Loan Document or any Collateral, except where contested in good
faith and by appropriate proceedings.

7.6. Inspection of Properties and Books; Operational Reviews

Permit Lender or any Participant (and their authorized representatives) to
discuss the business, operations, assets and financial condition of Borrower and
its Subsidiaries with Borrower's managers and other management officials, agents
and employees, and to examine and make copies or extracts of Borrower's and its
Subsidiaries' books of account, all at such reasonable times as Lender or any
Participant may request. Provide its accountants with a copy of this

                                    Page 7-2

<PAGE>

Agreement promptly after its execution and authorize and instruct them to answer
candidly all questions that the officers of Lender or any Participant or any
authorized representatives of Lender or any Participant may address to them in
reference to the financial condition or affairs of Borrower and its
Subsidiaries. Borrower may have its representatives in attendance at any
meetings held between the officers or other representatives of Lender or any
Participant and Borrower's accountants under this authorization. Permit Lender
or any Participant (and their authorized representatives) access to Borrower's
premises and records for the purpose of conducting a review of Borrower's
general mortgage business methods, policies and procedures, auditing its loan
files and reviewing the financial and operational aspects of Borrower's
business.

7.7. Notice

Give prompt Notice to Lender of (a) any action, suit or proceeding instituted by
or against Borrower or any of its Subsidiaries in any federal or state court or
before any commission or other regulatory body (federal, state or local,
domestic or foreign), which action, suit or proceeding has at issue in excess of
$25,000, or any such proceedings threatened against Borrower or any of its
Subsidiaries in writing containing the details of that action, suit or
proceeding; (b) the filing, recording or assessment of any federal, state or
local tax Lien against Borrower, or any of its assets or any of its
Subsidiaries; (c) an Event of Default; (d) a Default that continues for more
than 4 days; (e) the suspension, revocation or termination of Borrower's
eligibility, in any respect, as lender, seller/servicer or issuer as described
under Section 9.1; (f) the transfer, loss, nonrenewal or termination of any
Servicing Contracts to which Borrower is a party, or which is held for the
benefit of Borrower, and the reason for that transfer, loss, nonrenewal or
termination; (g) any Prohibited Transaction with respect to any Plan, specifying
the nature of the Prohibited Transaction and what action Borrower proposes to
take with respect to it; and (h) any other action, event or condition of any
nature that could lead to or result in a material adverse change in the
business, operations, assets or financial condition of Borrower or any of its
Subsidiaries.

7.8. Payment of Debt, Taxes and Other Obligations

Pay, perform and discharge, or cause to be paid, performed and discharged, all
of the obligations and indebtedness of Borrower and its Subsidiaries, all taxes,
assessments and governmental charges or levies imposed upon Borrower or its
Subsidiaries or upon their respective income, receipts or properties before
those taxes, assessments and governmental charges or levies become past due, and
all lawful claims for labor, materials and supplies or otherwise that, if
unpaid, could become a Lien or charge upon any of their respective properties or
assets. Borrower and its Subsidiaries are not required to pay, however, any
taxes, assessments and governmental charges or levies or claims for labor,
materials or supplies for which Borrower or its Subsidiaries have obtained an
adequate bond or insurance or that are being contested in good faith and by
proper proceedings that are being reasonably and diligently pursued and for
which proper reserves have been created.

7.9. Insurance

Maintain blanket bond coverage and errors and omissions insurance or mortgage
impairment insurance, with such companies and in such amounts as satisfy
prevailing requirements applicable to a lender, seller/servicer and issuer
described under Section 9.1, and liability insurance and fire and other hazard
insurance on its properties, in each case with responsible insurance companies
acceptable to Lender, in such amounts and against such risks as is customarily
carried by similar businesses operating in the same location. Within 30 days
after Notice from Lender, obtain such additional insurance as Lender may
reasonably require, all at the sole expense of Borrower. Copies of such policies
must be furnished to Lender without charge upon request of Lender.

                                    Page 7-3

<PAGE>

7.10. Closing Instructions

Indemnify and hold Lender harmless from and against any loss, including
reasonable attorneys' fees and costs, attributable to the failure of any title
insurance company, agent or attorney to comply with Borrower's disbursement or
instruction letter relating to any Mortgage Loan. Lender has the right to
pre-approve Borrower's choice of title insurance company, agent or attorney and
Borrower's disbursement or instruction letter to them in any case in which
Borrower intends to obtain a Warehousing Advance against the Mortgage Loan to be
created at settlement or to pledge that Mortgage Loan as Collateral under this
Agreement. In any event, Borrower's disbursement or instruction letter must
include the following language:

     Residential Funding Corporation has a security interest in any amounts
     advanced by it to fund this mortgage loan and in the mortgage loan funded
     with those amounts. You must promptly return any amounts advanced by
     Residential Funding Corporation and not used to fund this mortgage loan.
     You also must immediately return all amounts advanced by Residential
     Funding Corporation if this mortgage loan does not close and fund within 1
     Business Day of your receipt of those funds.

7.11. Subordination of Certain Indebtedness

Cause any indebtedness of Borrower for borrowed money to any member, manager or
Affiliate or any shareholder, director or officer of any manager, member or
Affiliate of Borrower, which indebtedness has a term of more than 1 year or is
in excess of $25,000, to be subordinated to the Obligations by the execution and
delivery to Lender of a Subordination of Debt Agreement, on the form prescribed
by Lender, certified by the corporate secretary of Borrower to be true and
complete and in full force and effect.

7.12. Other Loan Obligations

Perform all material obligations under the terms of each loan agreement, note,
mortgage, security agreement or debt instrument by which Borrower is bound or to
which any of its property is subject, and promptly notify Lender in writing of a
declared default under or the termination, cancellation, reduction or nonrenewal
of any of its other lines of credit or agreements with any other lender. Exhibit
F is a true and complete list of all such lines of credit or agreements as of
the date of this Agreement. Borrower must give Lender at least 30 days Notice
before entering into any additional lines of credit or agreements.

7.13. ERISA

Maintain (and, if applicable, cause each ERISA Affiliate to maintain) each Plan
in compliance with all material applicable requirements of ERISA and of the
Internal Revenue Code and with all applicable rulings and regulations issued
under the provisions of ERISA and of the Internal Revenue Code, and not (and, if
applicable, not permit any ERISA Affiliate to), (a) engage in any transaction in
connection with which Borrower or any ERISA Affiliate would be subject to either
a civil penalty assessed pursuant to Section 502(i) of ERISA or a tax imposed by
Section 4975 of the Internal Revenue Code, in either case in an amount exceeding
$25,000 or (b) fail to make full payment when due of all amounts that, under the
provisions of any Plan, Borrower or any ERISA Affiliate is required to pay as
contributions to that Plan, or permit to exist any accumulated funding
deficiency (as such term is defined in Section 302 of ERISA and Section 412 of
the Internal Revenue Code), whether or not waived, with respect to any Plan in
an aggregate amount exceeding $25,000.

                                    Page 7-4

<PAGE>

7.14. Use of Proceeds of Warehousing Advances

Use the proceeds of each Warehousing Advance solely for the purpose of funding
Eligible Loans and against the pledge of those Eligible Loans as Collateral.

7.15. MERS Implementation

On and after May 15,2004, register all Mortgage Loans (except those Mortgage
Loans to be sold to Investors not then using MERS) against which Borrower
requests Warehousing Advances on MERS.

                                End of Article 7

                                    Page 7-5

<PAGE>

8.   NEGATIVE COVENANTS

As long as the Warehousing Commitment is outstanding or there remain any
Obligations to be paid or performed, Borrower must not, either directly or
indirectly, without the prior written consent of Lender:

8.1. Contingent Liabilities

Assume, guarantee, endorse or otherwise become contingently liable for the
obligation of any Person except by endorsement of negotiable instruments for
deposit or collection in the ordinary course of business, and except for
obligations arising in connection with the sale of Mortgage Loans with recourse
in the ordinary course of Borrower's business.

8.2. Pledge of Servicing Contracts

Pledge or grant a security interest in any existing or future Servicing
Contracts of Borrower other than to Lender or omit to take any action required
to keep all of Borrower's Servicing Contracts in full force and effect.

8.3. Restrictions on Fundamental Changes

8.3(a) Consolidate, merge or enter into any analogous reorganization or
     transaction with any Person.

8.3(b) Amend or otherwise modify First NLC's articles of organization or
     operating agreement or NLC, Inc.'s charter or bylaws.

8.3(c) Liquidate, wind up or dissolve (or suffer any liquidation or
     dissolution).

8.3(d) Cease actively to engage in the business of originating or acquiring
     Mortgage Loans or make any other material change in the nature or scope of
     the business in which Borrower engages as of the date of this Agreement.

8.3(e) Sell, assign, lease, convey, transfer or otherwise dispose of (whether in
     one transaction or a series of transactions) all or any substantial part of
     Borrower's business or assets, whether now owned or acquired after the
     Closing Date, other than, in the ordinary course of business and to the
     extent not otherwise prohibited by this Agreement, sales of (1) Mortgage
     Loans, (2) Mortgage-backed Securities and (3) Servicing Contracts.

8.3(f) Acquire by purchase or in any other transaction all or substantially all
     of the business or property of, or stock or other ownership interests of,
     any Person, that has a value in excess of $50,000 per transaction and an
     aggregate value not to exceed $250,000 for all transactions within one
     fiscal year.

8.3(g) Permit any Subsidiary of Borrower to do or take any of the foregoing
     actions.

8.4. Subsidiaries

Form or acquire, or permit any Subsidiary of Borrower to form or acquire, any
Person that would thereby become a Subsidiary.

                                    Page 8-1

<PAGE>

8.5. Deferral of Subordinated Debt

Pay any Subordinated Debt of Borrower in advance of its stated maturity or,
after a Default or Event of Default under this Agreement has occurred, make any
payment of any kind on any Subordinated Debt of Borrower until all of the
Obligations have been paid and performed in full and any applicable preference
period has expired.

8.6. Loss of Eligibility

Take any action that would cause Borrower to lose all or any part of its status
as an eligible lender, seller/servicer or issuer as described under Section 9.1.

8.7. Accounting Changes

Make, or permit any Subsidiary of Borrower to make, any significant change in
accounting treatment or reporting practices, except as required by GAAP, or
change its fiscal year or the fiscal year of any Subsidiary of Borrower.

8.8. Leverage Ratio

Permit First NLC's Leverage Ratio at any time to exceed 20 to 1.

8.9. Minimum Tangible Net Worth

Permit First NLC's Tangible Net Worth at any time to be less than (a)
$10,500,000, plus (b) beginning June 30, 2004, 50% of First NLC's net income
after taxes and distributions to members for tax purposes (adjusted
semi-annually) for each six-month period ending on and after June 30, 2004.
Adjustments will occur on the first Business Day in July and January of each
year.

8.10. Minimum Liquid Assets

Permit First NLC's Liquid Assets at any time to be less than (a) $2,500,000,
plus (b) beginning June 30, 2004, $500,000 for each six-month period endong on
and after June 30, 2004. Adjustments will occur on the first Business Day in
July and January of each year.

8.11. Distributions to Members

Make any distributions to First NLC's members (including any purchase or
redemption of stock) if a Default or Event of Default exists or would occur as a
result of the dividend or distribution. Declare or pay any dividends or
otherwise declare or make any distribution to NLC, Inc.'s shareholders
(including any purchase or redemption of stock) if a Default or Event of Default
exists or would occur as a result of the dividend or distribution.

8.12. Transactions with Affiliates

Directly or indirectly (a) make any loan, advance, extension of credit or
capital contribution to any of First NLC's Affiliates, (b) sell, transfer,
pledge or assign any of its assets to or on behalf of those Affiliates, (c)
merge or consolidate with or purchase or acquire assets from those Affiliates,
or (d) pay management fees to or on behalf of those Affiliates except for
management fees paid to Sun Capital Partners, Inc. that do not exceed $500,000
per annum.

                                    Page 8-2

<PAGE>

8.13. Recourse Servicing Contracts

Acquire or enter into Servicing Contracts under which Borrower must repurchase
or indemnify the holder of the Mortgage Loans as a result of defaults on the
Mortgage Loans at any time during the term of those Mortgage Loans.

8.14. Gestation Agreements

Directly or indirectly sell or finance a Mortgage Loan under any Gestation
Agreement if the Mortgage Loan is or was previously pledged to Lender as
Collateral under this Agreement.

                                End of Article 8

                                    Page 8-3

<PAGE>

9.   SPECIAL REPRESENTATIONS, WARRANTIES AND COVENANTS CONCERNING COLLATERAL

9.1. Special Representations and Warranties Concerning Eligibility as
     Seller/Servicer of Mortgage Loans

Each Borrower represents and warrants to Lender, as of the date of this
Agreement and as of the date of each Warehousing Advance Request and the making
of each Warehousing Advance, that Borrower is approved and qualified and in good
standing as a lender, seller/servicer or issuer, as set forth below, and meets
all requirements applicable to its status as:

9.1(a) A HUD-approved mortgagee, eligible to originate, purchase, hold, sell and
     service FHA fully insured Mortgage Loans.

9.1(b) A VA-approved mortgagee and a lender in good-standing under the VA loan
     guarantee program, eligible to originate, purchase, hold, sell and service
     VA-guaranteed Mortgage Loans.

9.1(c) A Lender-approved seller/servicer of Mortgage Loans, eligible to
     originate, purchase, hold, sell and service Mortgage Loans to be sold to
     Lender.

9.2. Special Representations and Warranties Concerning Warehousing Collateral

Each Borrower represents and warrants to Lender, as of the date of this
Agreement and as of the date of each Warehousing Advance Request and the making
of each Warehousing Advance, that:

9.2(a) Borrower has not selected the Collateral in a manner so as to affect
     adversely Lender's interests.

9.2(b) Borrower is the legal and equitable owner and holder, free and clear of
     all Liens (other than Liens granted under this Agreement), of the Pledged
     Loans and the Pledged Securities. All Pledged Loans, Pledged Securities and
     related Purchase Commitments have been duly authorized and validly issued
     to Borrower, and all of the foregoing items of Collateral comply with all
     of the requirements of this Agreement, and have been and will continue to
     be validly pledged or assigned to Lender, subject to no other Liens.

9.2(c) Borrower has, and will continue to have, the full right, power and
     authority to pledge the Collateral pledged and to be pledged by it under
     this Agreement.

9.2(d) Each Mortgage Loan and each related document included in the Pledged
     Loans (1) has been duly executed and delivered by the parties to that
     Mortgage Loan and that related document, (2) has been made in compliance
     with all applicable laws, rules and regulations (including all laws, rules
     and regulations relating to usury), (3) is and will continue to be a legal,
     valid and binding obligation, enforceable in accordance with its terms,
     without setoff, counterclaim or defense in favor of the mortgagor under the
     Mortgage Loan or any other obligor on the Mortgage Note and (4) has not
     been modified, amended or any requirements of which waived, except in
     writing that is part of the Collateral Documents.

9.2(e) Each Pledged Loan is secured by a Mortgage on real property and
     improvements located in one of the states of the United States or the
     District of Columbia.

                                    Page 9-1

<PAGE>

9.2(f) Unless Third Party Originated Loans are permitted, each Pledged Loan has
     been closed or will be closed and funded with the Warehousing Advance made
     against it.

9.2(g) Except for open-ended Second Mortgage Loans, each Mortgage Loan has been
     fully advanced in the face amount of its Mortgage Note.

9.2(h) Each First Mortgage Loan is secured by a First Mortgage on the real
     property and improvements described in or covered by that Mortgage.

9.2(i) Each First Mortgage Loan has or will have a title insurance policy, in
     ALTA form or equivalent, from a recognized title insurance company,
     insuring the priority of the Lien of the Mortgage and meeting the usual
     requirements of Investors purchasing those Mortgage Loans.

9.2(j) Each Second Mortgage Loan is secured by a Second Mortgage on the real
     property and improvements described in or covered by that Mortgage.

9.2(k) To the extent required by the related Purchase Commitment or by Investors
     generally for similar Mortgage Loans, each Second Mortgage Loan has or will
     have a title insurance policy, in ALTA form or equivalent, from a
     recognized title insurance company, insuring the priority of the Lien of
     the Mortgage and meeting the usual requirements of Investors purchasing
     those Mortgage Loans.

9.2(l) Each Mortgage Loan has been evaluated or appraised in accordance with
     Title XI of FIRREA.

9.2(m) The Mortgage Note for each Pledged Loan is (1) payable or endorsed to
     the order of Borrower, (2) an "instrument" within the meaning of Article 9
     of the Uniform Commercial Code of all applicable jurisdictions and (3) is
     denominated and payable in United States dollars.

9.2(n) No default has existed for 60 days or more under any Mortgage Loan
     included in the Pledged Loans.

9.2(o) No party to a Mortgage Loan or any related document is in violation of
     any applicable law, rule or regulation that would impair the collectibility
     of the Mortgage Loan or the performance by the mortgagor or any other
     obligor of its obligations under the Mortgage Note or any related document.

9.2(p) All fire and casualty policies covering the real property and
     improvements encumbered by each Mortgage included in the Pledged Loans (1)
     name and will continue to name Borrower and its successors and assigns as
     the insured under a standard mortgagee clause, (2) are and will continue to
     be in full force and effect and (3) afford and will continue to afford
     insurance against fire and such other risks as are usually insured against
     in the broad form of extended coverage insurance generally available.

9.2(q) Pledged Loans secured by real property and improvements located in a
     special flood hazard area designated as such by the Director of the Federal
     Emergency Management Agency are and will continue to be covered by special
     flood insurance under the National Flood Insurance Program.

9.2(r) Each Pledged Loan against which a Warehousing Advance is made on the
     basis of a Purchase Commitment meets all of the requirements of that
     Purchase Commitment, and each Pledged Security against which a Warehousing
     Advance is outstanding meets all of the requirements of the related
     Purchase Commitment.

                                    Page 9-2

<PAGE>

9.2(s) Pledged Loans that are intended to be exchanged for Agency Securities
     comply or, prior to the issuance of the Agency Securities will comply, with
     the requirements of any governmental instrumentality, department or agency
     issuing or guaranteeing the Agency Securities.

9.2(t) Pledged Loans that are intended to be used in the formation of
     Mortgage-backed Securities (other than Agency Securities) comply with the
     requirements of the issuer of the Mortgage-backed Securities (or its
     sponsor) and of the Rating Agencies.

9.2(u) The original assignments of Mortgage delivered to Lender for each Pledged
     Loan are in recordable form and comply with all applicable laws and
     regulations governing the filing and recording of such documents.

9.2(v) None of the mortgagors, guarantors or other obligors of any Pledged Loan
     is a Person named in any Restriction List and to whom the provision of
     financial services is prohibited or otherwise restricted by applicable law.

9.2(w) No Pledged Loan delivered to Lender is a Discontinued Loan.

9.2(x) Each Pledged Loan secured by real property to which a Manufactured Home
     is affixed will create a valid Lien on that Manufactured Home that will
     have priority over any other Lien on the Manufactured Home, whether or not
     arising under applicable real property law.

9.3. Special Affirmative Covenants Concerning Warehousing Collateral

As long as the Warehousing Commitment is outstanding or there remain any
Obligations to be paid or performed under this Agreement or under any other Loan
Document, Borrower must:

9.3(a) Warrant and defend the right, title and interest of Lender in and to the
     Collateral against the claims and demands of all Persons.

9.3(b) Service or cause to be serviced all Pledged Loans in accordance with the
     standard requirements of the issuers of Purchase Commitments covering them
     and all applicable HUD, Fannie Mae and Freddie Mac requirements, including
     taking all actions necessary to enforce the obligations of the obligors
     under such Mortgage Loans. Service or cause to be serviced all Mortgage
     Loans backing Pledged Securities in accordance with applicable governmental
     requirements and requirements of issuers of Purchase Commitments covering
     them. Hold all escrow funds collected in respect of Pledged Loans and
     Mortgage Loans backing Pledged Securities in trust, without commingling the
     same with non-custodial funds, and apply them for the purposes for which
     those funds were collected.

9.3(c) Execute and deliver to Lender with respect to the Collateral those
     further instruments of sale, pledge, assignment or transfer, and those
     powers of attorney, as required by Lender, and do and perform all matters
     and things necessary or desirable to be done or observed, for the purpose
     of effectively creating, maintaining and preserving the security and
     benefits intended to be afforded Lender under this Agreement.

9.3(d) Notify Lender within 2 Business Days of any default under, or of the
     termination of, any Purchase Commitment relating to any Pledged Loan,
     Eligible Mortgage Pool, or Pledged Security.

9.3(e) Promptly comply in all respects with the terms and conditions of all
     Purchase Commitments, and all extensions, renewals and modifications or
     substitutions of or to all

                                    Page 9-3

<PAGE>

     Purchase Commitments. Deliver or cause to be delivered to the Investor the
     Pledged Loans and Pledged Securities to be sold under each Purchase
     Commitment not later than the mandatory delivery date of the Pledged Loans
     or Pledged Securities under the Purchase Commitment.

9.3(f) Compare the names of every mortgagor, guarantor and other obligor of
     every Mortgage Loan, together with appropriate identifying information
     concerning those Persons obtained by Borrower, against every Restriction
     List, and make certain that none of the mortgagors, guarantors or other
     obligors of any Mortgage Loan is a Person named in any Restriction List and
     to whom the provision of financial services is prohibited or otherwise
     restricted by applicable law.

9.3(g) Prior to the origination by Borrower of any Mortgage Loans for sale to
     Fannie Mae, enter into an agreement among Borrower, Lender and Fannie Mae,
     pursuant to which Fannie Mae agrees to send all cash proceeds of Mortgage
     Loans sold by Borrower to Fannie Mae to the Cash Collateral Account.

9.3(h) Prior to the origination by Borrower of Borrower's initial Mortgage Loan
     to be registered on the MERS system, obtain the approval of Lender and
     enter into an Electronic Tracking Agreement.

9.4. Special Negative Covenants Concerning Warehousing Collateral

As long as the Warehousing Commitment is outstanding or there remain any
Obligations to be paid or performed, Borrower must not, either directly or
indirectly, without the prior written consent of Lender:

9.4(a) Amend or modify, or waive any of the terms and conditions of, or settle
     or compromise any claim in respect of, any Pledged Loans or Pledged
     Securities.

9.4(b) Sell, transfer or assign, or grant any option with respect to, or pledge
     (except under this Agreement and, with respect to each Pledged Loan or
     Pledged Security, the related Purchase Commitment) any of the Collateral or
     any interest in any of the Collateral.

9.4(c) Make any compromise, adjustment or settlement in respect of any of the
     Collateral or accept other than cash in payment or liquidation of the
     Collateral.

                                End of Article 9

                                    Page 9-4

<PAGE>

10.  DEFAULTS; REMEDIES

10.1. Events of Default

The occurrence of any of the following is an event of default ("Event of
Default"):

10.1(a) Borrower fails to pay the principal of any Warehousing Advance when due,
     whether at stated maturity, by acceleration, or otherwise; or fails to pay
     any installment of interest on any Warehousing Advance within 9 days after
     the date of Lender's invoice or, if applicable, within 2 days after the
     date of Lender's account analysis statement; or fails to pay, within any
     applicable grace period, any other amount due under this Agreement or any
     other Obligation of Borrower to Lender.

10.1(b) Borrower or any of its Subsidiaries fails to pay, or defaults in the
     payment of any principal or interest on, any other indebtedness or any
     contingent obligation within any applicable grace period; breaches or
     defaults with respect to any other material term of any other indebtedness
     or of any loan agreement, mortgage, indenture or other agreement relating
     to that indebtedness, if the effect of that breach or default is to cause,
     or to permit the holder or holders of that indebtedness (or a trustee on
     behalf of such holder or holders) to cause, indebtedness of Borrower or its
     Subsidiaries in the aggregate amount of $250,000 or more to become or be
     declared due before its stated maturity (upon the giving or receiving of
     notice, lapse of time, both, or otherwise).

10.1(c) Borrower fails to perform or comply with any term or condition
     applicable to it contained in Sections 7.4 or 7.14 or in any Section of
     Article 8.

10.1(d) Any representation or warranty made or deemed made by Borrower under
     this Agreement, in any other Loan Document or in any written statement or
     certificate at any time given by Borrower, other than the representations
     and warranties set forth in Article 9 with respect to specific Pledged
     Loans, is inaccurate or incomplete in any material respect on the date as
     of which it is made or deemed made.

10.1(e) Borrower defaults in the performance of or compliance with any term
     contained in this Agreement or any other Loan Document other than those
     referred to in Sections 10.1 (a), 10.1(c) or 10.1(d) and such default has
     not been remedied or waived within 30 days after the earliest of (1)
     receipt by Borrower of Notice from Lender of that default, (2) receipt by
     Lender of Notice from Borrower of that default or (3) the date Borrower
     should have notified Lender of that default under Section 7.7(c) or 7.7(d).

10.1(f) An "event of default" (however defined) occurs under any agreement
     between Borrower and Lender other than this Agreement and the other Loan
     Documents, if the effect of that event of default is to cause Borrower to
     incur a potential liability or obligation to Lender in the aggregate amount
     of $250,000 or more.

10.1(g) A case (whether voluntary or involuntary) is filed by or against
     Borrower or any Subsidiary of Borrower under any applicable bankruptcy,
     insolvency or other similar federal or state law; or a court of competent
     jurisdiction appoints a receiver (interim or permanent), liquidator,
     sequestrator, trustee, custodian or other officer having similar powers
     over Borrower or any Subsidiary of Borrower, or over all or a substantial
     part of their respective properties or assets; or Borrower or any
     Subsidiary of Borrower (1) consents to the appointment of or possession by
     a receiver (interim or permanent), liquidator, sequestrator, trustee,
     custodian or other officer having similar powers over Borrower or any
     Subsidiary of Borrower, or over all or a substantial part of their

                                   Page 10-1

<PAGE>

     respective properties or assets, (2) makes an assignment for the benefit of
     creditors, or (3) fails, or admits in writing its inability, to pay its
     debts as those debts become due.

10.1(h) Borrower fails to perform any contractual obligation to repurchase
     Mortgage Loans, if such obligations in the aggregate exceed $500,000.

10.1(i) Any money judgment, writ or warrant of attachment or similar process
     involving an amount in excess of $50,000 is entered or filed against
     Borrower or any of its Subsidiaries or any of their respective assets and
     remains undischarged, unvacated, unbonded or unstayed for a period of 30
     days or 5 days before the date of any proposed sale under that money
     judgment, writ or warrant of attachment or similar process.

10.1(j) Any order, judgment or decree decreeing the dissolution of Borrower is
     entered and remains undischarged or unstayed for a period of 20 days.

10.1(k) Borrower purports to disavow the Obligations or contests the validity or
     enforceability of any Loan Document.

10.1(l) Lender's security interest on any portion of the Collateral becomes
     unenforceable or otherwise impaired.

10.1(m) A material adverse change occurs in Borrower's financial condition,
     business, properties, operations or prospects, or in Borrower's ability to
     repay the Obligations.

10.1(n) Any Lien for any taxes, assessments or other governmental charges (1) is
     filed against Borrower or any of its property, or is otherwise enforced
     against Borrower or any of its property, or (2) obtains priority that is
     equal to or greater than the priority of Lender's security interest in any
     of the Collateral.

10.1(o) Parent consents to the appointment of a conservator or receiver or
     liquidator in any insolvency, readjustment of debt, marshalling of assets
     and liabilities or similar proceedings of or relating to the Parent or of
     or relating to all or substantially all of its property, or a decree or
     order of a court or agency or supervisory authority having jurisdiction
     over Parent for the appointment of a conservator or receiver or liquidator
     in any insolvency, readjustment of debt, marshalling of assets and
     liabilities or similar proceedings, or the winding up or liquidation of its
     affairs, has been entered against the Parent, or Parent admits in writing
     its inability to pay its debts generally as they become due, files a
     petition to take advantage of any applicable insolvency or reorganization
     statute, makes any assignment for the benefit of its creditors or
     voluntarily suspends payment of its obligations.

10.1(p) First NLC ceases to own, directly, all of the outstanding capital stock
     of NLC, Inc.; Parent ceases to own, directly, the majority membership
     interests in First NLC; and Neal Henschel and Jeffrey Henschel cease to
     own, directly, 45% of the membership interests in Parent.

10.1(q) Jeffrey Henschel ceases to be the President and COO of First NLC.

10.1(r) Neal Henschel ceases to be the Chairman of the Board of Managers and CEO
     of First NLC.

10.2. Remedies

10.2(a) If an Event of Default described in Section 10.1(g) occurs with respect
     to Borrower, the Warehousing Commitment will automatically terminate and
     the unpaid principal amount

                                   Page 10-2

<PAGE>

     of and accrued interest on the Warehousing Note and all other Obligations
     will automatically become due and payable, without presentment, demand or
     other Notice or requirements of any kind, all of which Borrower expressly
     waives.

10.2(b) If any other Event of Default occurs, Lender may, by Notice to Borrower,
     terminate the Warehousing Commitment and declare the Obligations to be
     immediately due and payable.

10.2(c) Upon the occurrence and during the continuance of an Event of Default,
     Lender may also take any of the following actions:

     (1)  Foreclose upon or otherwise enforce its security interest in any Lien
          on the Collateral to secure all payments and performance of the
          Obligations in any manner permitted by law or provided for in the Loan
          Documents.

     (2)  Notify all. obligors under any of the Collateral that the Collateral
          has been assigned to Lender (or to another Person designated by
          Lender) and that all payments on that Collateral are to be made
          directly to Lender (or such other Person); settle, compromise or
          release, in whole or in part, any amounts any obligor or Investor owes
          on any of the Collateral on terms acceptable to Lender; enforce
          payment and prosecute any action or proceeding involving any of the
          Collateral; and where any Collateral is in default, foreclose on and
          enforce any Liens securing that Collateral in any manner permitted by
          law and sell any property acquired as a result of those enforcement
          actions.

     (3)  Prepare and submit for filing Uniform Commercial Code amendment
          statements evidencing the assignment to Lender or its designee of any
          Uniform Commercial Code financing statement filed in connection with
          any item of Collateral.

     (4)  Act, or contract with a third party to act, at Borrower's expense, as
          servicer or subservicer of Collateral requiring servicing, and perform
          all obligations required under any Collateral, including Servicing
          Contracts and Purchase Commitments.

     (5)  Require Borrower to assemble and make available to Lender the
          Collateral and all related books and records at a place designated by
          Lender.

     (6)  Enter onto property where any Collateral or related books and records
          are located and take possession of those items with or without
          judicial process; and obtain access to Borrower's data processing
          equipment, computer hardware and software relating to the Collateral
          and use all of the foregoing and the information contained in the
          foregoing in any manner Lender deems necessary for the purpose of
          effectuating its rights under this Agreement and any other Loan
          Document.

     (7)  Before the disposition of the Collateral, prepare it for disposition
          in any manner and to the extent Lender deems appropriate.

     (8)  Exercise all rights and remedies of a secured creditor under the
          Uniform Commercial Code of Minnesota or other applicable law,
          including selling or otherwise disposing of all or any portion of the
          Collateral at one or more public or private sales, whether or not the
          Collateral is present at the place of sale, for cash or credit or
          future delivery, on terms and conditions and in the manner as Lender
          may determine, including sale under any applicable Purchase
          Commitment. Borrower waives any right it may have to prior notice of
          the sale of all or any portion of the Collateral to the extent allowed
          by applicable law. If

                                   Page 10-3

<PAGE>

          notice is required under applicable law, Lender will give Borrower not
          less than 10 days' notice of any public sale or of the date after
          which any private sale may be held. Borrower agrees that 10 days'
          notice is reasonable notice. Lender may, without notice or
          publication, adjourn any public or private sale one or more times by
          announcement at the time and place fixed for the sale, and the sale
          may be held at any time or place announced at the adjournment. In the
          case of a sale of all or any portion of the Collateral on credit or
          for future delivery, the Collateral sold on those terms may be
          retained by Lender until the purchaser pays the selling price or takes
          possession of the Collateral. Lender has no liability to Borrower if a
          purchaser fails to pay for or take possession of Collateral sold on
          those terms, and in the case of any such failure, Lender may sell the
          Collateral again upon notice complying with this Section.

     (9)  Instead of or in conjunction with exercising the power of sale
          authorized by Section 10.2(c)(8), Lender may proceed by suit at law or
          in equity to collect all amounts due on the Collateral, or to
          foreclose Lender's Lien on and sell all or any portion of the
          Collateral pursuant to a judgment or decree of a court of competent
          jurisdiction.

     (10) Proceed against Borrower on the Warehousing Note.

     (11) Retain all excess proceeds from the sale or other disposition of the
          Collateral, and apply them to the payment of the Obligations under
          Section 10.3.

10.2(d) Lender will incur no liability as a result of the commercially
     reasonable sale or other disposition of all or any portion of the
     Collateral at any public or private sale or other disposition. Borrower
     waives (to the extent permitted by law) any claims it may have against
     Lender arising by reason of the fact that the price at which the Collateral
     may have been sold at a private sale was less than the price that Lender
     might have obtained at a public sale, or was less than the aggregate amount
     of the outstanding Warehousing Advances, accrued and unpaid interest on
     those Warehousing Advances, and unpaid fees, even if Lender accepts the
     first offer received and does not offer the Collateral to more than one
     offeree. Borrower agrees that any sale of Collateral under the terms of a
     Purchase Commitment, or any other disposition of Collateral arranged by
     Borrower, whether before or after the occurrence of an Event of Default,
     will be deemed to have been made in a commercially reasonable manner.

10.2(e) Borrower acknowledges that Mortgage Loans are collateral of a type that
     is the subject of widely distributed standard price quotations and that
     Mortgage-backed Securities are collateral of a type that is customarily
     sold on a recognized market. Borrower waives any right it may have to prior
     notice of the sale of Pledged Securities, and agrees that Lender may
     purchase Pledged Loans and Pledged Securities at a private sale of such
     Collateral.

10.2(f) Borrower specifically waives and releases (to the extent permitted by
     law) any equity or right of redemption, stay or appraisal that Borrower has
     or may have under any rule of law or statute now existing or adopted after
     the date of this Agreement, and any right to require Lender to (1) proceed
     against any Person, (2) proceed against or exhaust any of the Collateral or
     pursue its rights and remedies against the Collateral in any particular
     order, or (3) pursue any other remedy within its power. Lender is not
     required to take any action to preserve any rights of Borrower against
     holders of mortgages having priority to the Lien of any Mortgage or
     Security Agreement included in the Collateral or to preserve Borrower's
     rights against other prior parties.

10.2(g) Lender may, but is not obligated to, advance any sums or do any act or
     thing necessary to uphold or enforce the Lien and priority of, or the
     security intended to be afforded by,

                                   Page 10-4

<PAGE>

     any Mortgage or Security Agreement included in the Collateral, including
     payment of delinquent taxes or assessments and insurance premiums. All
     advances, charges, costs and expenses, including reasonable attorneys' fees
     and disbursements, incurred or paid by Lender in exercising any right,
     power or remedy conferred by this Agreement, or in the enforcement of this
     Agreement, together with interest on those amounts at the Default Rate,
     from the time paid by Lender until repaid by Borrower, are deemed to be
     principal outstanding under this Agreement and the Warehousing Note.

10.2(h) No failure or delay on the part of Lender to exercise any right, power
     or remedy provided in this Agreement or under any other Loan Document, at
     law or in equity, will operate as a waiver of that right, power or remedy.
     No single or partial exercise by Lender of any right, power or remedy
     provided under this Agreement or any other Loan Document, at law or in
     equity, precludes any other or further exercise of that right, power, or
     remedy by Lender, or Lender's exercise of any other right, power or remedy.
     Without limiting the foregoing, Borrower waives all defenses based on the
     statute of limitations to the extent permitted by law. The remedies
     provided in this Agreement and the other Loan Documents are cumulative and
     are not exclusive of any remedies provided at law or in equity.

10.2(i) Borrower grants Lender a license or other right to use, without charge,
     Borrower's computer programs, other programs, labels, patents, copyrights,
     rights of use of any name, trade secrets, trade names, trademarks, service
     marks and advertising matter, or any property of a similar nature, as it
     pertains to the Collateral, in advertising for sale and selling any of the
     Collateral and Borrower's rights under all licenses and all other
     agreements related to the foregoing inure to Lender's benefit until the
     Obligations are paid in full.

10.3. Application of Proceeds

Lender may apply the proceeds of any sale, disposition or other enforcement of
Lender's Lien on all or any portion of the Collateral to the payment of the
Obligations in the order Lender determines in its sole discretion. From and
after the indefeasible payment to Lender of all of the Obligations, any
remaining proceeds of the Collateral will be paid to Borrower, or to its
successors or assigns, or as a court of competent jurisdiction may direct. If
the proceeds of any sale, disposition or other enforcement of the Collateral are
insufficient to cover the costs and expenses of that sale, disposition or other
enforcement and payment in full of all Obligations, Borrower is liable for the
deficiency.

10.4. Lender Appointed Attorney-in-Fact

Borrower appoints Lender its attorney-in-fact, with full power of substitution,
for the purpose of carrying out the provisions of this Agreement, the
Warehousing Note and the other Loan Documents and taking any action and
executing any instruments that Lender deems necessary or advisable to accomplish
that purpose. Borrower's appointment of Lender as attorney-in-fact is
irrevocable and coupled with an interest. Without limiting the generality of the
foregoing, Lender may give notice of its Lien on the Collateral to any Person,
either in Borrower's name or in its own name, endorse all Pledged Loans or
Pledged Securities payable to the order of Borrower, change or cause to be
changed the book-entry registration or name of subscriber or Investor on any
Pledged Security, prepare and submit for filing Uniform Commercial Code
amendment statements with respect to any Uniform Commercial Code financing
statements filed in connection with any item of Collateral or receive, endorse
and collect all checks made payable to the order of Borrower representing
payment on account of the principal of or interest on, or the proceeds of sale
of, any of the Pledged Loans or Pledged Securities and give full discharge for
those transactions.

                                   Page 10-5

<PAGE>

10.5. Right of Set-Off

Upon the occurrence and during the continuance of an Event of Default, if
Borrower defaults in the payment of any Obligation or in the performance of any
of its duties under the Loan Documents, Lender may, without Notice to or demand
on Borrower (which Notice or demand Borrower expressly waives), set-off,
appropriate or apply any property of Borrower held at any time by Lender
(excluding deposits held in escrow or trust for the benefit of third parties, if
any), or any indebtedness at any time owed by Lender to or for the account of
Borrower, against the Obligations, whether or not those Obligations have
matured.

                                End of Article 10

                                   Page 10-6

<PAGE>

11.  MISCELLANEOUS

11.1. Notices

Except where telephonic or facsimile notice is expressly authorized by this
Agreement, all communications required or permitted to be given or made under
this Agreement ("Notices") must be in writing and must be sent by manual
delivery, overnight courier or United States mail (postage prepaid), addressed
as follows (or at such other address as may be designated by it in a Notice to
the other):

          If to Borrower:   First NLC Financial Services, LLC
                            NLC, Inc.
                            700 W. Hillsboro Boulevard, Bldg. 1
                            Suite 204
                            Deerfield Beach, FL 33441
                            Attention: Jeffrey M. Henschel, President & COO
                            Facsimile: (954) 420-5470

          If to Lender:     Residential Funding Corporation
                            440 Sawgrass Corp. Parkway, Suite 204
                            Sunrise, FL 33325
                            Attention: Robin Swanson, Director
                            Facsimile: (954) 846-8352

All periods of Notice will be measured from the date of delivery if delivered
manually or by facsimile, from the first Business Day after the date of sending
if sent by overnight courier or from 4 days after the date of mailing if sent by
United States mail, except that Notices to Lender under Article 2 and Section
3.3(f) shall be deemed to have been given only when actually received by Lender.
Borrower authorizes Lender to accept Borrower's bailee pledge agreements,
Warehousing Advance Requests, shipping requests, wire transfer instructions and
security delivery instructions transmitted to Lender by facsimile or RFConnects
Delivery, and those documents, when transmitted to Lender by facsimile or by
RFConnects Delivery, have the same force and effect as the originals.

11.2. Reimbursement Of Expenses; Indemnity

Borrower must: (a) pay Lender a document production fee in connection with the
preparation and negotiation of this Agreement; (b) pay such additional
documentation production fees as Lender may require and all out-of-pocket costs
and expenses of Lender, including reasonable fees, service charges and
disbursements of counsel to Lender (including allocated costs of internal
counsel), in connection with the amendment, enforcement and administration of
this Agreement, the Warehousing Note, and other Loan Documents, the making,
repayment and payment of interest on the Warehousing Advances and the payment of
all other Obligations under Loan Documents; (c) indemnify, pay, and hold
harmless Lender and any other holder of the Warehousing Note from and against,
all present and future stamp, documentary and other similar taxes with respect
to the foregoing matters and save Lender and any other holder of the Warehousing
Note harmless from and against all liabilities with respect to or resulting from
any delay or omission to pay such taxes; and (d) indemnify, pay and hold
harmless Lender and all of its Affiliates, officers, directors, employees or
agents and any subsequent holder of the Warehousing Note (collectively called
the "Indemnitees") from and against all liabilities, obligations, losses,
damages, penalties, judgments, suits, costs, expenses and disbursements of every
kind or nature (including the reasonable fees and disbursements of counsel to
the Indemnitees (including allocated costs of internal counsel) in connection
with any investigative, administrative or judicial proceeding, whether or not
the Indemnitees have been designated as

                                    Page 11-1

<PAGE>

parties to such proceeding) that may be imposed upon, incurred by or asserted
against such Indemnitees in any manner relating to or arising out of this
Agreement, the Warehousing Note, or any other Loan Document or any of the
transactions contemplated by this Agreement, the Warehousing Note and the other
Loan Documents, including against all liabilities, obligations, losses, damages,
penalties, judgments, suits, costs, expenses and disbursements of every kind or
nature (including the reasonable fees and disbursements of counsel to the
Indemnitees (including allocated costs of internal counsel) in connection with
any investigative, administrative or judicial proceeding, whether or not the
Indemnitees have been designated as parties to such proceeding) arising from any
breach of Sections 9.2(v) or 9.3(f) or the making of any Mortgage Loan in which
any mortgagor, guarantor or other obligor is a Person named in any Restriction
List and to whom the provision of financial services is prohibited or otherwise
restricted by applicable law ("Indemnified Liabilities"), except that Borrower
has no obligation under this Agreement with respect to Indemnified Liabilities
arising from the gross negligence or willful misconduct of any such Indemnitees.
To the extent that the undertaking to indemnify, pay and hold harmless as set
forth in the preceding sentence may be unenforceable because it is violative of
any law or public policy, Borrower must contribute the maximum portion that it
is permitted to pay and satisfy under applicable law to the payment and
satisfaction of all Indemnified Liabilities incurred by the Indemnitees or any
of them. The agreement of Borrower contained in this Article survives the
expiration or termination of this Agreement and the payment in full of the
Warehousing Note. Attorneys' fees and disbursements incurred in enforcing, or on
appeal from, a judgment under this Agreement are recoverable separately from and
in addition to any other amount included in such judgment, and this clause is
intended to be severable from the other provisions of this Agreement and to
survive and not be merged into Such judgment.

11.3. Financial Information

All financial statements and reports furnished to Lender under this Agreement
must be prepared in accordance with GAAP, applied on a basis consistent with
that applied in preparing the financial statements as at the end of and for
Borrower's most recent fiscal year (except to the extent otherwise required to
conform to good accounting practice).

11.4. Terms Binding Upon Successors; Survival of Representations

The terms and provisions of this Agreement are binding upon and inure to the
benefit of Borrower, Lender and their respective successors and assigns. All of
Borrower's representations, warranties, covenants and agreements survive the
making of any Warehousing Advance, and except where a longer period is set forth
in this Agreement, remain effective for as long as the Warehousing Commitment is
outstanding or there remain any Obligations to be paid or performed.

11.5. Assignment

Borrower cannot assign this Agreement. Lender may at any time, without Notice to
or the consent of Borrower, transfer or assign, in whole or in part, its
interest in this Agreement and the Warehousing Note along with Lender's security
interest in any of the Collateral, and any assignee of Lender may enforce this
Agreement, the Warehousing Note and its security interest in the Collateral
assigned.

11.6. Amendments

Except as otherwise provided in this Agreement, this Agreement may not be
amended, modified or supplemented unless the amendment, modification or
supplement is set forth in writing signed by both Borrower and Lender.

                                    Page 11-2

<PAGE>

11.7. Governing Law

This Agreement and the other Loan Documents are governed by the laws of the
State of Minnesota, without reference to its principles of conflicts of laws.

11.8. Participations

Lender may at any time, with the consent of Borrowers, sell, assign or grant
participations in, or otherwise transfer to any other Person ("Participant"),
all or part of the Obligations. Without limiting Lender's exclusive right to
collect and enforce the Obligations, Borrower agrees that each participation
will give rise to a debtor-creditor relationship between Borrower and the
Participant, and Borrower authorizes each Participant, upon the occurrence of an
Event of Default, to proceed directly by right of setoff, banker's lien, or
otherwise, against any assets of Borrower that may be held by that Participant.
Borrower authorizes Lender to disclose to prospective and actual Participants
all information in Lender's possession concerning Borrower, this Agreement and
the Collateral.

11.9. Relationship of the Parties

This Agreement provides for the making and repayment of Warehousing Advances by
Lender (in its capacity as a lender) and Borrower (in its capacity as a
borrower), for the payment of interest on those Warehousing Advances and for the
payment of certain fees by Borrower to Lender. The relationship between Lender
and Borrower is limited to that of creditor and secured party on the part of
Lender and of debtor on the part of Borrower. The provisions of this Agreement
and the other Loan Documents for compliance with financial covenants and the
delivery of financial statements and other operating reports are intended solely
for the benefit of Lender to protect its interest as a creditor and secured
party. Nothing in this Agreement creates or may be construed as permitting or
obligating Lender to act as a financial or business advisor or consultant to
Borrower, as permitting or obligating Lender to control Borrower or to conduct
Borrower's operations, as creating any fiduciary obligation on the part of
Lender to Borrower, or as creating any joint venture, agency, partnership or
other relationship between Lender and Borrower other than as explicitly and
specifically stated in the Loan Documents. Borrower acknowledges that it has had
the opportunity to obtain the advice of experienced counsel of its own choice in
connection with the negotiation and execution of the Loan Documents and to
obtain the advice of that counsel with respect to all matters contained in the
Loan Documents, including the waivers of jury trial and of punitive,
consequential, special or indirect damages contained in Sections 11.16 and
11.17, respectively. Borrower further acknowledges that it is experienced with
respect to financial and credit matters and has made its own independent
decisions to apply to Lender for credit and to execute and deliver this
Agreement.

11.10. Severability

If any provision of this Agreement is declared to be illegal or unenforceable in
any respect, that provision is null and void and of no force and effect to the
extent of the illegality or unenforceability, and does not affect the validity
or enforceability of any other provision of the Agreement.

11.11. Consent to Credit References

Borrower consents to the disclosure of information regarding Borrower and its
Subsidiaries and their relationships with Lender to Persons making credit
inquiries to Lender. This consent is revocable by Borrower at any time upon
Notice to Lender as provided in Section 11.1.

                                    Page 11-3

<PAGE>

11.12. Counterparts

This Agreement may be executed in any number of counterparts, each of which will
be deemed an original, but all of which together constitute but one and the same
instrument.

11.13. Headings/Captions

The captions or headings in this Agreement and the other Loan Documents are for
convenience only and in no way define, limit or describe the scope or intent of
any provision of this Agreement or any other Loan Document.

11.14. Entire Agreement

This Agreement, the Warehousing Note and the other Loan Documents represent the
final agreement among the parties with respect to their subject matter, and may
not be contradicted by evidence of prior or contemporaneous oral agreements
among the parties. There are no oral agreements among the parties with respect
to the subject matter of this Agreement, the Warehousing Note and the other Loan
Documents.

11.15. Consent to Jurisdiction

AT THE OPTION OF LENDER, THIS AGREEMENT, THE WAREHOUSING NOTE AND THE OTHER LOAN
DOCUMENTS MAY BE ENFORCED IN ANY STATE OR FEDERAL COURT WITHIN THE STATE OF
MINNESOTA. BORROWER CONSENTS TO THE JURISDICTION AND VENUE OF THOSE COURTS, AND
WAIVES ANY OBJECTION TO THE JURISDICTION OR VENUE OF THOSE COURTS, INCLUDING THE
OBJECTION THAT VENUE IN THOSE COURTS IS NOT CONVENIENT. ANY SUCH SUIT, ACTION OR
PROCEEDING MAY BE COMMENCED AND INSTITUTED BY SERVICE OF PROCESS UPON BORROWER
BY FIRST CLASS REGISTERED OR CERTIFIED MAIL, RETURN RECEIPT REQUESTED, ADDRESSED
TO BORROWER AT ITS ADDRESS LAST KNOWN TO LENDER. BORROWER'S CONSENT AND
AGREEMENT UNDER THIS SECTION DOES NOT AFFECT LENDER'S RIGHT TO ACCOMPLISH
SERVICE OF PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR TO COMMENCE LEGAL
PROCEEDINGS OR OTHERWISE PROCEED AGAINST BORROWER IN ANY OTHER JURISDICTION OR
COURT. IN THE EVENT BORROWER COMMENCES ANY ACTION IN ANOTHER JURISDICTION OR
VENUE UNDER ANY TORT OR CONTRACT THEORY ARISING DIRECTLY OR INDIRECTLY FROM THE
RELATIONSHIP CREATED BY THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS, LENDER AT
ITS OPTION MAY HAVE THE CASE TRANSFERRED TO A STATE OR FEDERAL COURT WITHIN THE
STATE OF MINNESOTA OR, IF A TRANSFER CANNOT BE ACCOMPLISHED UNDER APPLICABLE
LAW, MAY HAVE BORROWER'S ACTION DISMISSED WITHOUT PREJUDICE.

11.16. Waiver of Jury Trial

BORROWER AND LENDER EACH PROMISES AND AGREES NOT TO ELECT A TRIAL BY JURY OF ANY
ISSUE TRIABLE OF RIGHT BY A JURY, AND FULLY WAIVES ANY RIGHT TO TRIAL BY JURY TO
THE EXTENT THAT ANY SUCH RIGHT NOW EXISTS OR ARISES AFTER THE DATE OF THIS
AGREEMENT. THIS WAIVER OF THE RIGHT TO TRIAL BY JURY IS SEPARATELY GIVEN,
KNOWINGLY AND VOLUNTARILY, BY BORROWER AND LENDER, AND IS INTENDED TO ENCOMPASS
EACH INSTANCE AND EACH ISSUE FOR WHICH THE RIGHT TO TRIAL BY JURY WOULD
OTHERWISE APPLY. LENDER AND BORROWER ARE EACH AUTHORIZED AND DIRECTED TO SUBMIT
THIS AGREEMENT TO ANY COURT HAVING JURISDICTION OVER THE SUBJECT MATTER AND THE
PARTIES TO THIS AGREEMENT AS CONCLUSIVE EVIDENCE OF THIS WAIVER OF THE RIGHT TO
TRIAL BY JURY. FURTHER, BORROWER AND LENDER EACH CERTIFIES THAT NO

                                   Page 11-4

<PAGE>

REPRESENTATIVE OR AGENT OF THE OTHER PARTY, INCLUDING THE OTHER PARTY'S COUNSEL,
HAS REPRESENTED, EXPRESSLY OR OTHERWISE, TO ANY OF ITS REPRESENTATIVES OR AGENTS
THAT THE OTHER PARTY WILL NOT SEEK TO ENFORCE THIS WAIVER OF RIGHT TO TRIAL BY
JURY.

11.17. Waiver of Punitive, Consequential, Special or Indirect Damages

BORROWER WAIVES ANY RIGHT IT MAY HAVE TO SEEK PUNITIVE, CONSEQUENTIAL, SPECIAL
OR INDIRECT DAMAGES FROM LENDER OR ANY OF LENDER'S AFFILIATES, OFFICERS,
DIRECTORS, EMPLOYEES OR AGENTS WITH RESPECT TO ANY AND ALL ISSUES PRESENTED IN
ANY ACTION, PROCEEDING, CLAIM OR COUNTERCLAIM BROUGHT BY BORROWER AGAINST LENDER
OR ANY OF LENDER'S AFFILIATES, OFFICERS, DIRECTORS, EMPLOYEES OR AGENTS WITH
RESPECT TO ANY MATTER ARISING OUT OF OR IN CONNECTION WITH THIS AGREEMENT OR ANY
OTHER LOAN DOCUMENT. THIS WAIVER OF THE RIGHT TO SEEK PUNITIVE, CONSEQUENTIAL,
SPECIAL OR INDIRECT DAMAGES IS KNOWINGLY AND VOLUNTARILY GIVEN BY BORROWER, AND
IS INTENDED TO ENCOMPASS EACH INSTANCE AND EACH ISSUE FOR WHICH THE RIGHT TO
SEEK PUNITIVE, CONSEQUENTIAL, SPECIAL OR INDIRECT DAMAGES WOULD OTHERWISE APPLY.
LENDER IS AUTHORIZED AND DIRECTED TO SUBMIT THIS AGREEMENT TO ANY COURT HAVING
JURISDICTION OVER THE SUBJECT MATTER AND THE PARTIES TO THIS AGREEMENT AS
CONCLUSIVE EVIDENCE OF THIS WAIVER OF THE RIGHT TO SEEK PUNITIVE, CONSEQUENTIAL,
SPECIAL OR INDIRECT DAMAGES.

                                End of Article 11

                                   Page 11-5

<PAGE>

12.  DEFINITIONS

12.1. Defined Terms

Capitalized terms defined below or elsewhere in this Agreement have the
following meanings or, as applicable, the meanings given to those terms in
Exhibits to this Agreement:

"Accrual Basis" has the meaning set forth in Section 3.1(c).

"Advance Rate" means, with respect to any Eligible Loan, the Advance Rate set
forth in Exhibit H for that type of Eligible Loan.

"Affiliate" means, when used with reference to any Person, (a) each Person that,
directly or indirectly, controls, is controlled by or is under common control
with, the Person referred to, (b) each Person that beneficially owns or holds,
directly or indirectly, 5% or more of any class of voting Equity Interests of
the Person referred to, (c) each Person, 5% or more of the voting Equity
Interests of which is beneficially owned or held, directly or indirectly, by the
Person referred to, and (d) each of such Person's officers, directors, joint
venturers and partners. For these purposes, the term "control" (including the
terms "controlled by" and "under common control with") means the possession,
directly or indirectly, of the power to direct or cause the direction of the
management and policies of the Person in question.

"Aged Mortgage Loans" means Mortgage Loans against which a Warehousing Advance
has been outstanding for longer than the Standard Warehouse Period, provided
that Aged Mortgage Loans are permitted for such type of Mortgage Loan.

"Aged Warehouse Period" means the maximum number of days a Warehouse Advance
against Aged Mortgage Loans of a particular type may remain outstanding as set
forth in Exhibit H.

"Agency Security" means a Mortgage-backed Security issued or guaranteed by
Fannie Mae, Freddie Mac or Ginnie Mae.

"Agreement" means this Second Amended and Restated Warehousing Credit and
Security Agreement, either as originally executed or as it may be amended,
restated, renewed or replaced.

"Appraised Property Value" means with respect to an interest in real property,
the then current fair market value of the real property and any improvements on
it as of recent date determined in accordance with Title XI of FIRREA by a
qualified appraiser who is a member of the American Institute of Real Estate
Appraisers or other group of professional appraisers.

"Approved Custodian" means a pool custodian or other Person that Lender deems
acceptable, in its sole discretion, to hold Mortgage Loans for inclusion in a
Mortgage Pool or to hold Mortgage Loans as agent for an Investor that has issued
a Purchase Commitment for those Mortgage Loans.

"Audited Statement Date" means the date of Borrower's most recent audited
financial statements (and, if applicable, Borrower's Subsidiaries, on a
consolidated basis) delivered to Lender under the Existing Agreement or this
Agreement.

"Bank One" means Bank One, National Association, or any successor bank.

"Bank One Prime Rate" means, as of any date of determination, the highest prime
rate quoted by Bank One and most recently published by Bloomberg L.P. If the
prime rate for Bank One is not

                                   Page 12-1

<PAGE>

quoted or published for any period, then during that period the term "Bank One
Prime Rate" means the highest prime rate published in the most recent edition of
The Wall Street Journal in its regular column entitled "Money Rates."

"Borrower" has the meaning set forth in the first paragraph of this Agreement.

"Business Day" means any day other than Saturday, Sunday or any other day on
which national banking associations are closed for business.

"Buydown" has the meaning set forth in Section 3.4.

"Calendar Quarter" means the 3 month period beginning on each January 1, April
1, July 1 or October 1.

"Cash Collateral Account" means a demand deposit account maintained at the
Funding Bank in Lender's name and designated for receipt of the proceeds of the
sale or other disposition of Collateral.

"Check Disbursement Account" means a demand deposit account maintained at the
Funding Bank in Borrower's name and under the control of Lender for clearing
checks written by Borrower to fund Mortgage Loans funded by Warehousing
Advances.

"Closing Date" has the meaning set forth in the Recitals to this Agreement.

"Collateral" has the meaning set forth in Section 4.1.

"Collateral Documents" means, with respect to each Mortgage Loan, (a) the
Mortgage Note, the Mortgage and all other documents including, if applicable,
any Security Agreement, executed in connection with or relating to the Mortgage
Loan; (b) as applicable, the original lender's ALTA Policy of Title Insurance or
its equivalent, documents evidencing the FHA Commitment to Insure, the VA
Guaranty or private mortgage insurance, the appraisal, the Regulation Z
statement, the environmental assessment, the engineering report, certificates of
casualty or hazard, insurance, credit information on the maker of the Mortgage
Note, the HUD-1 or corresponding purchase advice; (c) any other document listed
in Exhibit B; and (d) any other document that is customarily desired for
inspection or transfer incidental to the purchase of any Mortgage Note by an
Investor or that is customarily executed by the seller of a Mortgage Note to an
Investor.

"Committed Purchase Price" means for an Eligible Loan (a) the dollar price as
set forth in the Purchase Commitment or, if the price is not expressed in
dollars, the product of the Mortgage Note Amount multiplied by the price
(expressed as a percentage) as set forth in the Purchase Commitment for the
Eligible Loan, or (b) if the Eligible Loan is to be used to back an Agency
Security, an amount equal to the product of the Mortgage Note Amount multiplied
by the price (expressed as a percentage) as set forth in the Purchase Commitment
for the Agency Security.

"Compliance Certificate" means a certificate executed on behalf of Borrower by
its manager having principal financial accounting responsibilities,
substantially in the form of Exhibit E.

"Credit Score" means a mortgagor's overall consumer credit rating, represented
by a single numeric credit score using the Fair, Isaac consumer credit scoring
system, provided by a credit repository acceptable to Lender and the Investor
that issued the Purchase Commitment covering the related Mortgage Loan (if a
Purchase Commitment is required by Exhibit H).

"Debt" means (a) all indebtedness or other obligations of a Person (and, if
applicable, that Person's Subsidiaries, on a consolidated basis) that, in
accordance with GAAP, would be included in determining total liabilities as
shown on the liabilities side of a balance sheet of that

                                   Page 12-2

<PAGE>

Person on the date of determination, plus (b) all indebtedness or other
obligations of that Person (and, if applicable, that Person's Subsidiaries, on a
consolidated basis) for borrowed money or for the deferred purchase price of
property or services. For purposes of calculating a Person's Debt, Subordinated
Debt due more than 6 months after the Warehousing Maturity Date may be excluded
from that Person's indebtedness.

"Default" means the occurrence of any event or existence of any condition that,
but for the giving of Notice or the lapse of time, would constitute an Event of
Default.

"Default Rate" means, for any Warehousing Advance, the Interest Rate applicable
to that Warehousing Advance plus 4% per annum. If no Interest Rate is applicable
to a Warehousing Advance, "Default Rate" means, for that Warehousing Advance,
the highest Interest Rate then applicable to any outstanding Warehousing Advance
plus 4% per annum.

"Depository Benefit" means the compensation received by Lender, directly or
indirectly, as a result of Borrower's maintenance of Eligible Balances with a
Designated Bank.

"Designated Bank" means any bank designated by Lender as a Designated Bank, but
only for as long as Lender has an agreement under which Lender receives
Depository Benefits from that bank.

"Designated Bank Charges" means any fees, interest or other charges that would
otherwise be payable to a Designated Bank in connection with Eligible Balances
maintained at the Designated Bank, including deposit insurance premiums, service
charges and any other charges that may be imposed by governmental authorities
from time to time.

"Discontinued Loan" has the meaning set forth in the GMAC-RFC Client Guide.

"Earnings Allowance" has the meaning set forth in Section 3.1(b).

"Earnings Credit" has the meaning set forth in Section 3.1(b).

"Electronic Advance Request" means an electronic transmission through RFConnects
Delivery containing the same information as Exhibit A to this Agreement.

"Electronic Tracking Agreement" means an Electronic Tracking Agreement, on the
form prescribed by Lender, among Borrower, Lender, MERS and MERSCORP, Inc.

"Eligible Balances" means all funds of or maintained by Borrower (and, if
applicable, Borrower's Subsidiaries) in demand deposit or time deposit accounts
at a Designated Bank, minus balances to support float, reserve requirements and
any other reductions that may be imposed by governmental authorities from time
to time.

"Eligible Loan" means a Single Family Mortgage Loan that satisfies the
conditions and requirements set forth in Exhibit H.

"Eligible Mortgage Pool" means a Mortgage Pool for which (a) an Approved
Custodian has issued its initial certification, (b) there exists a Purchase
Commitment covering the Agency Security to be issued on the basis of that
certification and (c) the Agency Security will be delivered to Lender.

"Equity Interests" means all shares, interests, participations or other
equivalents, however, designated, of or in a Person (other than a natural
person), whether or not voting, including common stock, membership interests,
warrants, preferred stock, convertible debentures and all agreements,
instruments and documents convertible, in whole or in part, into any one or more
of the foregoing.

                                   Page 12-3

<PAGE>

"ERISA" means the Employee Retirement Income Security Act of 1974 and all rules
and regulations promulgated under that statute, as amended, and any successor
statute, rules, and regulations.

"ERISA Affiliate" means any trade or business (whether or not incorporated) that
is a member of a group of which Borrower is a member and that is treated as a
single employer under Section 414 of the Internal Revenue Code.

"Event of Default" means any of the conditions or events set forth in Section
10.1.

"Excess Buydown" has the meaning set forth in Section 3.4.

"Exchange Act" means the Securities Exchange Act of 1934 and all rules and
regulations promulgated under that statute, as amended, and any successor
statute, rules, and regulations.

"Exhibit B" means Exhibit B. Exhibit B-REP. as applicable to the type of
Eligible Loan against which a Warehousing Advance is to be made.

"Existing Agreement" means the First Amended and Restated Warehousing Credit and
Security Agreement dated as of November 15, 2002, as amended, between Borrower
and Lender.

"Fair Market Value" means, at any time for an Eligible Loan or a related Agency
Security (if the Eligible Loan is to be used to back an Agency Security) as of
any date of determination, (a) the Committed Purchase Price if the Eligible Loan
is covered by a Purchase Commitment from Fannie Mae or Freddie Mac or the
Eligible Loan is to be exchanged for an Agency Security and that Agency Security
is covered by a Purchase Commitment from an Investor, or (b) otherwise, the
market price for such Eligible Loan or Agency Security, determined by Lender
based on market data for similar Mortgage Loans or Agency Securities and such
other criteria as Lender deems appropriate in its sole discretion.

"Fannie Mae" means Fannie Mae, a corporation created under the laws of the
United States, and any successor corporation or other entity.

"FHA" means the Federal Housing Administration and any successor agency or other
entity.

"FHA Mortgage Loan" means an FHA-insured Mortgage Loan included in the Pledged
Loans.

"FICA" means the Federal Insurance Contributions Act and all rules and
regulations promulgated under that statute, as amended, and any successor
statute, rules and regulations.

"FIRREA" means the Financial Institutions Reform, Recovery and Enforcement Act
of 1989 and all rules and regulations promulgated under that statute, as
amended, and any successor statute, rules, and regulations.

"First Mortgage" means a Mortgage that constitutes a first Lien on the real
property and improvements described in or covered by that Mortgage.

"First Mortgage Loan" means a Mortgage Loan secured by a First Mortgage.

"FIRST NLC FINANCIAL SERVICES. LLC" has the meaning set forth in the first
paragraph of this Agreement.

"Forward Commitment" means the forward commitment of First NLC to sell Mortgage
Loans to Lender, obligating First NLC to deliver $230,000,000 of Mortgage Loans
to Lender between October 1, 2003, and September 30, 2005, and any substitute,
amendment or renewal thereof.

                                   Page 12-4

<PAGE>

"Freddie Mac" means the Federal Home Loan Mortgage Corporation, a corporation
created under the laws of the United States, and any successor corporation or
other entity.

"Funding Bank" means Bank One or any other bank designated by Lender as a
Funding Bank.

"Funding Bank Agreement" means a letter agreement on the form prescribed by
Lender between the Funding Bank and Borrower authorizing Lender's access to the
Operating Account and the Check Disbursement Account.

"GAAP" means generally accepted accounting principles set forth in opinions and
pronouncements of the Accounting Principles Board and the American Institute of
Certified Public Accountants and in statements and pronouncements of the
Financial Accounting Standards Board, or in opinions, statements or
pronouncements of any other entity approved by a significant segment of the
accounting profession, which are applicable to the circumstances as of the date
of determination.

"Gestation Agreement" means an agreement under which Borrower agrees to sell or
finance (a) a Mortgage Loan prior to the date of purchase by an Investor or (b)
a Mortgage Pool prior to the date a Mortgage-backed Security backed by the
Mortgage Pool is issued.

"Ginnie Mae" means the Government National Mortgage Association, an agency of
the United States government, and any successor agency or other entity.

"GMAC-RFC Client Guide" means the applicable loan purchase guide issued by
Lender, as the same may be amended or replaced.

"Government Mortgage Loan" means a closed-end First Mortgage Loan that is either
HUD/FHA insured (other than a HUD 203(K) Mortgage Loan or a Title I Mortgage
Loan) or VA guaranteed.

"Hedging Arrangements" means, with respect to any Person, any agreements or
other arrangements (including interest rate swap agreements, interest rate cap
agreements and forward sale agreements) entered into to protect that Person
against changes in interest rates or the market value of assets.

"High LTV Mortgage Loan" has the meaning set forth in Exhibit H.

"HUD" means the Department of Housing and Urban Development, and any successor
agency or other entity.

"HUD 203(K) Mortgage Loan" means an FHA-insured closed-end First Mortgage Loan
to an individual obligor the proceeds of which will be used for the purpose of
rehabilitating and repairing the related single family property, and which
satisfies the definition of "rehabilitation loan" in 24 C.F.R. 203.50(a).

"Indemnified Liabilities" has the meaning set forth in Section 11.2.

"Indemnitees" has the meaning set forth in Section 11.2.

"Interest Rate" means, for any Warehousing Advance, the floating rate of
interest specified for that Warehousing Advance in Exhibit H.

"Interim Statement Date" means the date of the most recent unaudited financial
statements of Borrower (and, if applicable, Borrower's Subsidiaries, on a
consolidated basis) delivered to Lender under the Existing Agreement or this
Agreement.

                                   Page 12-5

<PAGE>

"Internal Revenue Code" means the Internal Revenue Code of 1986, Title 26 of the
United States Code, and all rules, regulations and interpretations issued under
those statutory provisions, as amended, and any subsequent or successor federal
income tax law or laws, rules, regulations and interpretations.

"Investment Company Act" means the Investment Company Act of 1940 and all rules
and regulations promulgated under that statute, as amended, and any successor
statute, rules, and regulations.

"Investor" means Fannie Mae, Freddie Mac or a financially responsible private
institution that Lender deems acceptable, in its sole discretion, to issue
Purchase Commitments with respect to a particular category of Eligible Loans.

"Lender" has the meaning set forth in the first paragraph of this Agreement.

"Leverage Ratio" means the ratio of a Person's Debt to Tangible Net Worth. For
purposes of calculating a Person's Leverage Ratio, Debt arising under Hedging
Arrangements, to the extent of assets arising under those Hedging Arrangements,
may be excluded from that Person's Debt.

"LIBOR" means, for each week, the rate of interest per annum that is equal to
the arithmetic mean of the U.S. Dollar London Interbank Offered Rates for 1
month periods of certain U.S. banks as of 11:00 a.m. (London time) on the first
Business Day of each week on which the London Interbank market is open, as
published by Bloomberg L.P. If those interest rates are not offered or published
for any period, then during that period LIBOR means the London Interbank Offered
Rate for 1 month periods as published in The Wall Street Journal in its regular
column entitled "Money Rates" on the first Business Day of each week on which
the London Interbank market is open.

"Lien" means any lien, mortgage, deed of trust, pledge, security interest,
charge or encumbrance of any kind (including any conditional sale or other title
retention agreement, any lease in the nature of such an agreement and any
agreement to give any security interest).

"Liquid Assets" means the following assets owned by a Person (and, if
applicable, that Person's Subsidiaries, on a consolidated basis) as of any date
of determination: (a) unrestricted and unencumbered cash, (b) funds on deposit
in accounts with any bank located in the United States (net of the aggregate
amount payable under all outstanding and unpaid checks, drafts and similar items
drawn by a Person against those accounts), (c) investment grade commercial
paper, (d) money market funds, and (e) marketable securities, plus, in the case
of Borrower and in the absence of a Default or Event of Default, (f) the amount
of any Buydowns and Excess Buydowns.

"Loan Documents" means this Agreement, the Warehousing Note, any agreement of
Borrower relating to Subordinated Debt, and each other document, instrument or
agreement executed by Borrower in connection with any of those documents,
instruments and agreements, as originally executed or as any of the same may be
amended, restated, renewed or replaced.

"Loan Package Fee" has the meaning set forth in Section 3.6.

"Loan-to-Value Ratio" means, for any Mortgage Loan, the ratio of (a) the maximum
amount that may be borrowed under the Mortgage Loan (whether or not borrowed) at
the time of origination, plus the Mortgage Note Amounts of all other Mortgage
Loans secured by senior or pari passu Liens on the related property, to (b) the
Appraised Property Value of the related property.

"Manufactured Home" means a structure that is built on a permanent chassis
(steel frame) with the wheel assembly necessary for transportation in one or
more sections to a permanent site or semi-permanent site.

                                    Page 12-6

<PAGE>

"Margin Stock" has the meaning assigned to that term in Regulation U of the
Board of Governors of the Federal Reserve System, as amended.

"MERS" means Mortgage Electronic Registrations Systems, Inc. and any successor
entity.

"Miscellaneous Fees and Charges" means the Collateral Operations Fees set forth
on Lender's fee schedule attached as Exhibit I and all miscellaneous
disbursements, charges and expenses incurred by or on behalf of Lender for the
handling and administration of Warehousing Advances and Collateral, including
costs for Uniform Commercial Code, tax lien and judgment searches conducted by
Lender, filing fees, charges for wire transfers and check processing charges,
charges for security delivery fees, charges for overnight delivery of Collateral
to Investors, recording fees, Funding Bank service fees and overdraft charges
and Designated Bank Charges. Upon not less than 3 Business Days' prior Notice to
Borrower, Lender may modify the Collateral Operations Fees set forth in Exhibit
I to conform to current Lender practices and, as so modified, the revised
Exhibit I will become part of this Agreement.

"Mortgage" means a mortgage or deed of trust on real property that is improved
and substantially completed (including real property to which a Manufactured
Home has been affixed in a manner such that the Lien of a mortgage or deed of
trust would attach to the Manufactured Home under applicable real property law).

"Mortgage-backed Securities" means securities that are secured or otherwise
backed by Mortgage Loans.

"Mortgage Loan" means any loan evidenced by a Mortgage Note and secured by a
Mortgage and, if applicable, a Security Agreement.

"Mortgage Note" means a promissory note secured by one or more Mortgages and, if
applicable, one or more Security Agreements.

"Mortgage Note Amount" means, as of any date of determination, the then
outstanding and unpaid principal amount of a Mortgage Note (whether or not an
additional amount is available to be drawn under that Mortgage Note).

"Mortgage Pool" means a pool of one or more Pledged Loans on the basis of which
a Mortgage-backed Security is to be issued.

"Multiemployer Plan" means a "multiemployer plan" as defined in Section 4001
(a)(3) of ERISA, to which either Borrower or any ERISA Affiliate of Borrower has
any obligation with respect to its employees.

"NLC, INC." has the meaning set forth in the first paragraph of this Agreement.

"Nonperforming Mortgage Loan" has the meaning set forth in Exhibit H.

"Non-Usage Fee" has the meaning set forth in Section 3.5.

"Notices" has the meaning set forth in Section 11.1.

"Obligations" means all indebtedness, obligations and liabilities of Borrower to
Lender and Lender's Subsidiaries (whether now existing or arising after the date
of this Agreement, voluntary or involuntary, joint or several, direct or
indirect, absolute or contingent, liquidated or unliquidated, or decreased or
extinguished and later increased and however created or incurred), including

                                    Page 12-7

<PAGE>

Borrower's obligations and liabilities to Lender under the Loan Documents and
disbursements made by Lender for Borrower's account.

"Operating Account" means a demand deposit account maintained at the Funding
Bank in Borrower's name and designated for funding that portion of each Eligible
Loan not funded by a Warehousing Advance made against that Eligible Loan and for
returning any excess payment from an Investor for a Pledged Loan or Pledged
Security.

"Overdraft Advance" has the meaning set forth in Section 3.8.

"Parent" means NLC Financial Services, LLC, a Delaware limited liability
company, and the parent of First NLC.

"Participant" has the meaning set forth in Section 11.8.

"Person" means and includes natural persons, corporations, limited liability
companies, limited liability partnerships, limited partnerships, general
partnerships, joint stock companies, joint ventures, associations, companies,
trusts, banks, trust companies, land trusts, business trusts or other
organizations, whether or not legal entities, and governments and agencies and
political subdivisions of those governments.

"Plan" means each employee benefit plan (whether in existence on the date of
this Agreement or established after that date), as that term is defined in
Section 3 of ERISA, maintained for the benefit of directors, officers or
employees of Borrower or any ERISA Affiliate.

"Pledged Assets" means, collectively, Pledged Loans and Pledged Securities.

"Pledged Hedging Accounts" has the meaning set forth in Section 4.1 (h).

"Pledged Hedging Arrangements" has the meaning set forth in Section 4.1 (h).

"Pledged Loans" has the meaning set forth in Section 4.1 (b).

"Pledged Securities" has the meaning set forth in Section 4.1(c).

"Prime Mortgage Loan" has the meaning set forth in Exhibit H.

"Prohibited Transaction" has the meanings set forth for such term in Section
4975 of the Internal Revenue Code and Section 406 of ERISA.

"Purchase Commitment" means a written commitment, in form and substance
satisfactory to Lender, issued in favor of Borrower by an Investor under which
that Investor commits to purchase Mortgage Loans or Mortgage-backed Securities.

"Rating Agency" means any nationally recognized statistical rating organization
that in the ordinary course of its business rates Mortgage-backed Securities.

"Receivables" has the meaning set forth in Section 4.1 (e).

"Release Amount" has the meaning set forth in Section 4.3(f).

"Repurchased Mortgage Loan" has the meaning set forth in Exhibit H.

"Restriction List" and "Restriction Lists" means each and every list of Persons
to whom the Government of the United States prohibits or otherwise restricts the
provision of financial

                                    Page 12-8

<PAGE>

services. For the purposes of this Agreement, Restriction Lists include the list
of Specifically Designated Nationals and Blocked Persons established pursuant to
Executive Order 13224 (September 23, 2001) and maintained by the Office of
Foreign Assets Control, U.S. Department of the Treasury, current as of the day
the Restriction List is used for purposes of comparison in accordance with the
requirements of this Agreement.

"RFC Mortgage Loan" means a Mortgage Loan covered by a Purchase Commitment
issued by Lender.

"RFConnects Delivery" means Lender's proprietary service to support the
electronic exchange of information between Lender and Borrower, including
Warehousing Advance Requests, shipping requests, payoff requests, wire transfer
instructions, security delivery instructions, activity reports and exception
reports.

"RFConnects Pledge Agreement" means an agreement (on the then current form
prescribed by Lender) granting Lender a security interest in Mortgage Loans for
which Borrower has requested Warehousing Advances using RFConnects Delivery.

"Second Mortgage" means a Mortgage that constitutes a second Lien on the real
property and improvements described in or covered by that Mortgage.

"Second Mortgage Loan" means a Mortgage Loan secured by a Second Mortgage.

"Security Agreement" means a security agreement or other agreement that creates
a Lien on personal property, including furniture, fixtures and equipment, to
secure repayment of a Mortgage Loan.

"Servicing Contract" means, with respect to any Person, the arrangement, whether
or not in writing, under which that Person has the right to service Mortgage
Loans.

"Servicing Portfolio" means, as to any Person, the unpaid principal balance of
Mortgage Loans serviced by that Person under Servicing Contracts, minus the
principal balance of all Mortgage Loans that are serviced by that Person for
others under subservicing arrangements.

"Single Family Mortgage Loan" means a Mortgage Loan secured by a Mortgage on
improved real property on which is located a 1-to-4 family residence.

"Standard Warehouse Period" means, for any Mortgage Loan, the maximum number of
days a Warehousing Advance against that type of Mortgage Loan, other than
against an Aged Mortgage Loan, may remain outstanding, as set forth in Exhibit
H.

"Statement Date" means the Audited Statement Date or the Interim Statement Date,
as applicable.

"Sublimit" means the aggregate amount of Warehousing Advances (expressed as a
dollar amount or as a percentage of the Warehousing Commitment Amount) that is
permitted to be outstanding at any one time against a specific type of Eligible
Loan.

"Subordinated Debt" means (a) all indebtedness of Borrower for borrowed money
that is effectively subordinated in right of payment to all present and future
Obligations either (1) under a Subordination of Debt Agreement on the form
prescribed by Lender or (2) otherwise on terms acceptable to Lender, and (b)
solely for purposes of Section 8.5, all indebtedness of Borrower that is
required to be subordinated by Sections 5.1(b) and 7.11.

"Subprime Mortgage Loan" has the meaning set forth in Exhibit H.

                                   Page 12-9

<PAGE>

"Subsidiary" means any corporation, partnership, association or other business
entity in which more than 50% of the shares of stock or other ownership
interests having voting power for the election of directors, managers, trustees
or other Persons performing similar functions is at the time owned or controlled
by any Person either directly or indirectly through one or more Subsidiaries of
that Person.

"Tangible Net Worth" means the excess of a Person's (and, if applicable, that
Person's Subsidiaries, on a consolidated basis) total assets over total
liabilities as of the date of determination, each determined in accordance with
GAAP applied in a manner consistent with the most recent audited financial
statements delivered to Lender under the Existing Agreement, plus that portion
of Subordinated Debt due more than 6 months after the Warehousing Maturity Date.
For purposes of calculating a Person's Tangible Net Worth, advances or loans to
managers, members, employees or Affiliates, investments in Affiliates, assets
pledged to secure any liabilities not included in the Debt of that Person,
intangible assets, those other assets that would be deemed by HUD to be
non-acceptable in calculating adjusted net worth in accordance with its
requirements in effect as of that date, as those requirements appear in the
"Consolidated Audit Guide for Audits of HUD Programs," and other assets Lender
deems unacceptable, in its sole discretion, must be excluded from that Person's
total assets.

"Third Party Originated Loan" means a Mortgage Loan originated and funded by a
third party (other than with funds provided by Borrower at closing to purchase
the Mortgage Loan) and subsequently purchased by Borrower.

"Title I Mortgage Loan" means an FHA co-insured closed-end First Mortgage Loan
or Second Mortgage Loan that is underwritten in accordance with HUD underwriting
standards for the Title I Property Improvement Program set forth in, and that is
reported for insurance under, the Mortgage Insurance Program authorized and
administered under Title I of the National Housing Act of 1934, as amended, and
the regulations related to that statute.

Trust Receipt" means a trust receipt in a form approved by and under which
Lender may deliver any document relating to the Collateral to Borrower for
correction or completion.

"Unused Portion" has the meaning set forth in Section 3.5.

"Used Portion" has the meaning set forth in Section 3.5.

"Warehousing Advance" means a disbursement by Lender under Section 1.1.

"Warehousing Advance Request" has the meaning set forth in Section 2.1.

"Warehousing Collateral Value" means, as of any date of determination, (a) with
respect to any Eligible Loan, the lesser of (1) the amount of any Warehousing
Advance made, or that could be made, against such Eligible Loan under Exhibit H
or (2) an amount equal to the Advance Rate for the applicable type of Eligible
Loan multiplied by the Fair Market Value of such Eligible Loan; (b) if Eligible
Loans have been exchanged for Agency Securities, the lesser of (1) the amount of
any Warehousing Advances outstanding against the Eligible Loans backing the
Agency Securities or (2) an amount equal to the Advance Rates for the applicable
types of Eligible Loans backing the Agency Securities multiplied by the Fair
Market Value of the Agency Securities; and (c) with respect to cash, the amount
of the cash.

"Warehousing Commitment" means the obligation of Lender to make Warehousing
Advances to Borrower under Section 1.1.

"Warehousing Commitment Amount" means $135,000,000.

                                   Page 12-10

<PAGE>

"Warehousing Fee" has the meaning set forth in Section 3.6.

"Warehousing Maturity Date" has the meaning set forth in Section 1.2.

"Warehousing Note" has the meaning set forth in Section 1.3.

"Wet Settlement Advance" means with respect to any Warehousing Advance, the time
from the date the Warehousing Advance is made until the date of Lender's receipt
of the Collateral Documents required by Article 2 and the Exhibits and documents
referenced in that Article.

"Wire Disbursement Account" means a demand deposit account maintained at the
Funding Bank in Lender's name for clearing wire transfers requested by Borrower
to fund Warehousing Advances.

"Wire Fee" has the meaning set forth in Section 3.6.

12.2. Other Definitional Provisions; Terms of Construction

12.2(a) Accounting terms not otherwise defined in this Agreement have the
     meanings given to those terms under GAAP.

12.2(b) Defined terms may be used in the singular or the plural, as the context
     requires.

12.2(c) All references to time of day mean the then applicable time in Chicago,
     Illinois, unless otherwise expressly provided.

12.2(d) References to Sections, Exhibits, Schedules and like references are to
     Sections, Exhibits, Schedules and the like of this Agreement unless
     otherwise expressly provided.

12.2(e) The words "include," "includes" and "including" are deemed to be
     followed by the phrase "without limitation."

12.2(f) Unless the context in which it is used otherwise clearly requires, the
     word "or" has the inclusive meaning represented by the phrase "and/or."

12.2(g) All incorporations by reference of provisions from other agreements are
     incorporated as if such provisions were fully set forth into this
     Agreement, and include all necessary definitions and related provisions
     from those other agreements. All provisions from other agreements
     incorporated into this Agreement by reference survive any termination of
     those other agreements until the Obligations of Borrower under this
     Agreement and the Warehousing Note are irrevocably paid in full and the
     Warehousing Commitment is terminated.

12.2(h) All references to the Uniform Commercial Code shall be deemed to be
     references to the Uniform Commercial Code in effect on the date of this
     Agreement in the applicable jurisdiction.

12.2(i) Unless the context in which it is used otherwise clearly requires, all
     references to days, weeks and months mean calendar days, weeks and months.

                                End of Article 12

                                   Page 12-11

<PAGE>

IN WITNESS WHEREOF, the parties have caused this Agreement to be duly executed
as of the date first above written.

Closing Date: November 1, 2003           FIRST NLC FINANCIAL SERVICES, LLC,
                                         a Florida limited liability company

                                         By: /s/ Jeffrey M. Henschel
                                             -----------------------------------
                                         Its: President

                                         NLC, INC., a Tennessee corporation

                                         By: /s/ Jeffrey M. Henschel
                                             -----------------------------------
                                         Its: President

                                         RESIDENTIAL FUNDING CORPORATION,
                                         a Delaware Corporation

                                         By: Illegible
                                             -----------------------------------
                                         Its: Director

                                   Page 12-12

<PAGE>

                                                                       EXHIBIT A

<TABLE>
<CAPTION>
-------------------------------------------------------------------------------------------
                               REQUEST FOR ADVANCE
-------------------------------------------------------------------------------------------
<S>            <C>                           <C>
               [ ] FIRST NLC FINANCIAL SERVICES, LLC [ ] NLC, INC.

Loan Number:                                 Reviewed
             -----------------------------   By:
Mortgagor:                                             ------------------------------------
             -----------------------------   Warehouse
Address:                                     Date:
             -----------------------------             ------------------------------------
                                             Effective
             -----------------------------   Date:     ------------------------------------
Zip Code:
             -----------------------------

Status:
             [ ] Committed      [ ] RFC      Loan Type: [ ] Prime    [ ] FHA [ ] VA
             [ ] Uncommitted                            [ ] Subprime/Grade
             [ ] Wet Settlement [ ] Received                               -------
             [ ] Repurchased                            [ ] Nonperforming
             [ ] MERS
             [ ] Open-end Second
             [ ] Closed-end Second           Term:      [ ] Fixed         Term
                                                                  -------
                                                        [ ] ARM           Adjustment Period
                                                                ---------
                                                        [ ] Balloon         Term
                                                                    -------

Mortgage Note Amount:                        Interest Rate:
                      --------------------                  -------------------------------
Mortgage Note Date:                          Requested Warehouse Advance Amount:
                    ----------------------                                       ----------
Investor:                                    Title Company:
          --------------------------------                  -------------------------------
Investor Contact:                            Title Company Contact:
                  ------------------------                          -----------------------
Investor Phone:                              Title Company Phone:
                --------------------------                        -------------------------
Committed Purchase Price:                    Expiration Date:
                          ----------------                    -----------------------------
Purchase Commitment No.:                     Acquisition Cost (if applicable):
                         -----------------                                     ------------

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

                              FUNDING INSTRUCTIONS

[ ] Wire Funding

       Account to Debit:                     Date of Wire:
                         -----------------                 --------------------------------
       Credit Acct. Name:                    Amount of Wire:
                          ----------------                   ------------------------------
       Bank Name:                            Credit Acct. No.:
                  ------------------------                     ----------------------------
       City and State:                       ABA No.:
                       -------------------            -------------------------------------
       Ref:                                  Advise:               Phone:
            ------------------------------           -------------        -----------------

[ ] Check Funding
       Check No.:                            Amount:
                  ------------------------           --------------------------------------
</TABLE>

                                       A-1

<PAGE>

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

                             REQUIRED DOCUMENTATION

The following documents in connection with the above request are enclosed:

RIGHT

[ ]  Original and 1 copy of Mortgage Note
[ ]  Certified copy of Mortgage
[ ]  Original or certified copy of recorded Mortgage (Repurchased Mortgage Loan
     or Nonperforming Mortgage Loan)
[ ]  Original ALTA Mortgagee's Policy of Title Insurance or equivalent
     (Repurchased Mortgage Loan or Nonperforming Mortgage Loan)
[ ]  *Copy of Investor Purchase Commitment (or satisfactory evidence thereof)
[ ]  *Copy of HUD-1 Settlement Statement or equivalent with evidence of initial
     Advance amount (open- end Second Mortgage Loans)
[ ]  *Copy of AssetWise Certificate (Required for High LTV Mortgage Loans)
[ ]  *Copy of Borrower's closing instructions to escrow/title company (table
     funded Mortgage Loans only)

LEFT

[ ]  *Request for Advance (original and 1 copy)
[ ]  Recordable assignment of Mortgage (not required for Mortgage Loans
     registered on the MERS system after delivery of an Electronic Tracking
     Agreement, if approved by Lender)
[ ]  Certified copies of interim assignments of Mortgage (if applicable)
[ ]  *Investor repurchase demand letter (Repurchased Mortgage Loans only)
[ ]  *Summary of Mortgage Loan documentation or Investor problems, expected cure
     period and current payment history (Repurchased Mortgage Loans only)
[ ]  *Broker price opinion or Appraisal (Repurchased Mortgage Loans and
     Nonperforming Mortgage loans only)

NOTE: Items designated with the "*" are required prior to a Wet Settlement
      Advance.

For the new value this day received, First NLC Financial Services, LLC and NLC,
INC. (collectively, "Borrower"), grants a security interest to Residential
Funding Corporation ("Lender") in all of Borrower's right, title and interest in
and to the Mortgage Loan described above, together with all related
"Collateral," as more particularly described in the Second Amended and Restated
Warehousing Credit and Security Agreement (as amended, supplemented or otherwise
modified) between Borrower and Lender.

First NLC Financial Services, LLC
NLC, Inc.

Authorized Signature:
                      ------------------------

                                      A-2

<PAGE>

                                                                       EXHIBIT B

--------------------------------------------------------------------------------
                  PROCEDURES AND DOCUMENTATION FOR WAREHOUSING
                          SINGLE FAMILY MORTGAGE LOANS
--------------------------------------------------------------------------------

                        FIRST NLC FINANCIAL SERVICES, LLC
                                   NLC, INC.

     FIRST NLC FINANCIAL SERVICES, LLC and NLC, INC. (collectively, "Borrower")
     must observe the following procedures and documentation requirements in all
     respects. All documents must be satisfactory to RESIDENTIAL FUNDING
     CORPORATION ("Lender") in its sole discretion. Capitalized terms used in
     this Exhibit without further definition have the meanings set forth in the
     Second Amended and Restated Warehousing Credit and Security Agreement
     between Borrower and Lender (as amended, restated, renewed or replaced,
     "Agreement"). HUD, Fannie Mae and Freddie Mac form numbers used in this
     Exhibit are for convenience only and Borrower must use the equivalent forms
     required at the time of delivery of a Pledged Loan or a Pledged Security.
     Except for documents submitted through RFConnects Delivery, all Warehousing
     Advance Requests and Collateral Documents must be submitted to the Lender
     in a top tabbed, legal size manila file folder, hole-punched and
     acco-fastened in the order specified in the Warehousing Advance Request.
     Each folder must be labeled with the mortgagor name(s), Borrower loan
     number and Borrower name. If a Wet Settlement Advance is being requested,
     the Warehousing Advance Request and required Collateral Documents should be
     submitted in accordance with the above instructions. The remaining
     Collateral Documents must be submitted with a cover letter identifying the
     mortgagor name(s) and Borrower loan number.

I.   PRIOR TO MAKING A WET SETTLEMENT ADVANCE, THE LENDER MUST RECEIVE THE
     FOLLOWING:

     (1)  An estimate of the amount of the requested Warehousing Advance 1
          Business Day prior to the date the requested Warehousing Advance is to
          be made.

     (2)  Either an Electronic Advance Request (including RFConnects Pledge
          Agreement and list of Mortgage Loans) or a written Warehousing Advance
          Request (Exhibit A) and 1 copy of same.

     (3)  A copy of Borrower's closing instructions to the escrow/title company
          (table-funded Mortgage Loans only).

     (4)  A copy of a letter (or other acceptable documentation) from the holder
          of the Mortgage Loan to Borrower documenting the purchase price for
          the Mortgage Loan, releasing the holder's ownership interest in the
          Mortgage Loan against payment of that purchase price by Borrower and
          containing wire transfer instructions for payment of that purchase
          price (Third Party Originated Loans only).

     (5)  A copy of the Purchase Commitment or satisfactory evidence of its
          existence and, for each High LTV Mortgage Loan, a copy of the
          AssetWise Certificate (High LTV Mortgage Loans).

     (6)  A copy of the HUD-1 Settlement Statement or equivalent with evidence
          of the initial Warehousing Advance amount (open-end Second Mortgage
          Loans only).

                                        1

<PAGE>

     (7)  The original signed Mortgage Note, endorsed by Borrower in blank with
          corresponding interim endorsements, if applicable, and 1 copy of same.

     (8)  A copy of the Mortgage sent for recording certified true by Borrower
          or the escrow/title company.

     (9)  Copies of all interim assignments of the Mortgage certified true by
          Borrower or the escrow/title company (recorded or sent for
          recordation). The Mortgage Note must bear corresponding endorsements.

     (10) An assignment of the Mortgage, endorsed by Borrower in blank, in
          recordable form but unrecorded (not required for Mortgage Loans
          registered on the MERS system after execution and delivery by all
          parties of an Electronic Tracking Agreement, if approved by Lender).

II.  PRIOR TO MAKING A WAREHOUSING ADVANCE (OTHER THAN A WET SETTLEMENT
     ADVANCE), LENDER MUST RECEIVE ALL OF THE COLLATERAL DOCUMENTS LISTED IN
     SECTION I ABOVE.

III. LENDER HAS A REASONABLE TIME (1 BUSINESS DAY UNDER ORDINARY CIRCUMSTANCES)
     TO EXAMINE BORROWER'S WAREHOUSING ADVANCE REQUEST AND THE COLLATERAL
     DOCUMENTS TO BE DELIVERED BY BORROWER BEFORE FUNDING THE REQUESTED
     WAREHOUSING ADVANCE OR WET SETTLEMENT ADVANCE, AND MAY REJECT ANY ELIGIBLE
     LOAN THAT DOES NOT MEET THE REQUIREMENTS OF THIS EXHIBIT, THE AGREEMENT OR
     THE RELATED PURCHASE COMMITMENT.

     Borrower must hold or cause its custodian to hold, in trust for Lender,
     those original Collateral Documents of which only copies are required to be
     delivered to Lender under this Exhibit. Promptly upon request by Lender or,
     if the recorded Collateral Documents have not yet been returned from the
     recording office, immediately upon receipt by Borrower or its custodian of
     those recorded Collateral Documents, Borrower must deliver or cause its
     custodian to deliver to Lender any or all of the original Collateral
     Documents.

     To fund Warehousing Advances under this Exhibit and the Agreement, Lender
     will cause the Funding Bank to credit the Wire Disbursement Account or the
     Check Disbursement Account, upon compliance by Borrower with the terms of
     the Loan Documents.

     Lender will determine, in its sole discretion, the method by which
     Warehousing Advances and other amounts on deposit in the Wire Disbursement
     Account are disbursed by the Funding Bank to or for the account of
     Borrower.

IV.  WITHIN 7 BUSINESS DAYS AFTER THE DATE OF A WAREHOUSING ADVANCE AGAINST A
     MORTGAGE LOAN TO BE REGISTERED ON THE MERS SYSTEM. THE MORTGAGE LOAN MUST
     BE REGISTERED ON THE MERS SYSTEM, SHOWING BORROWER AS SERVICER OR
     SUBSERVICER AND LENDER AS INTERIM FUNDER.

V.   ONLY LENDER MAY DELIVER THE MORTGAGE NOTES AND OTHER ORIGINAL COLLATERAL
     DOCUMENTS REQUIRED BY THIS EXHIBIT EVIDENCING PLEDGED LOANS OR PLEDGED
     SECURITIES AND RELATED POOL DOCUMENTS TO AN INVESTOR OR POOL CUSTODIAN,
     UNLESS OTHERWISE AGREED IN WRITING.

     A.   Borrower must comply with the following procedures for deliveries of
          Pledged Loans:

          No later than 1 Business Day prior to the requested shipment date for
          deliveries of less than 100 Pledged Loans and no later than 2 Business
          Days prior to the requested shipment date for deliveries of 100 or
          more Pledged Loans, Lender must receive the following:

          (1)  Signed shipping instructions or authenticated shipping
               instructions sent via RFConnects Delivery for the delivery of the
               Pledged Loans, including the following:

                                        2

<PAGE>

               (a)  Name and address of the office of the Investor to which the
                    loan documents are to be shipped, the desired shipping date
                    and the preferred method of delivery;

               (b)  Instructions for endorsement of the Mortgage Note;

               (c)  Name(s) of the mortgagors), Mortgage Note Amounts of the
                    Pledged Loans to be shipped and the Borrower's loan numbers
                    for those Pledged Loans; and

               (d)  Commitment number and expiration date of the Purchase
                    Commitment.

          (2)  For deliveries of Pledged Loans to Fannie Mae for cash purchase,
               Borrower must include a Copy of Loan Schedule (Fannie Mae Form
               1068 or 1069) showing Lender's designated Fannie Mae payee code
               as recipient of the loan purchase proceeds.

          (3)  For deliveries of Pledged Loans to Freddie Mac for cash purchase,
               Borrower must include the following additional documents:

               (a)  Original completed Warehouse Lender Release of Security
                    Interest (Freddie Mac Form 996) to be executed by Lender,
                    designating Lender as the Warehouse Lender and showing the
                    Cash Collateral Account designated by Lender as the
                    receiving account for loan purchase proceeds; and

               (b)  Copy of Wire Transfer Authorization for a Cash Warehouse
                    Delivery (Freddie Mac Form 987), designating Lender as the
                    Warehouse Lender and showing the Cash Collateral Account
                    designated by Lender as the receiving account for loan
                    purchase proceeds.

     B.   If Pledged Loans are to be delivered to a pool custodian (other than
          an Approved Custodian), Borrower must pay the related Warehousing
          Advance within 2 Business Days of shipment.

     C.   Borrower must comply with the following procedures for deliveries of
          Pledged Loans to Approved Custodians:

          No later than 1 Business Day prior to the requested shipment date for
          deliveries of less than 100 Pledged Loans and no later than 2 Business
          Days prior to the requested shipment date for deliveries of 100 or
          more Pledged Loans, Lender must receive the following:

          (1)  Signed shipping instructions or authenticated shipping
               instructions sent via RFConnects Delivery for the delivery of the
               Pledged Loans to the Approved Custodian, including the following:

               (a)  Name and address of the office of the Approved Custodian to
                    which the loan documents are to be shipped, the desired
                    shipping date and the preferred method of delivery;

               (b)  Instructions for endorsement of the Mortgage Note;

               (c)  Name(s) of the mortgagor(s). Mortgage Note Amounts of the
                    Pledged Loans to be shipped and the Borrower's loan numbers
                    for those Pledged Loans; and

               (d)  Commitment number and expiration date of the Purchase
                    Commitment for the Pledged Securities.

          (2)  If Mortgage-backed Securities are to be issued by Fannie Mae,
               Borrower must include the following additional documents:

                                       3

<PAGE>

               (a)  Copy of Schedule of Mortgages (Fannie Mae Form 2005 or
                    2025); and

               (b)  Copy of Delivery Schedule (Fannie Mae Form 2014),
                    instructing Fannie Mae to issue the Mortgage-backed
                    Securities in Borrower's name with Lender as pledgee and to
                    deliver the Mortgage-backed Securities to Lender's custody
                    account at JP Morgan Chase (JPMORGAN CHASE/CUST/G55026). The
                    ABA number for JP Morgan Chase is 021000021.

          (3)  If Mortgage-backed Securities are to be issued by Freddie Mac,
               Borrower must include the following additional documents:

               (a)  Copy of Settlement Information and Delivery Authorization
                    (Freddie Mac Form 939), designating Lender as the Warehouse
                    Lender and instructing Freddie Mac to deliver the
                    Mortgage-backed Securities to Lender's custody account at JP
                    Morgan Chase (JPMORGAN CHASE/CUST/G55026). The ABA number
                    for JP Morgan Chase is 021000021; and

               (b)  Original Warehouse Lender Release of Security Interest
                    (Freddie Mac Form 996) to be executed by Lender, designating
                    the Lender as the Warehouse Lender and instructing Freddie
                    Mac to deliver the Mortgage-backed Securities to Lender's
                    custody account at JP Morgan Chase (JPMORGAN
                    CHASE/CUST/G55026). The ABA number for JP Morgan Chase is
                    021000021.

          (4)  If Mortgage-backed Securities are to be issued by Ginnie Mae,
               Borrower must include the following additional documents:

               (a)  Signed copy of schedule of Mortgages (HUD Form 11706);

               (b)  Signed copy of Schedule of Subscribers (HUD Form 11705)
                    instructing Ginnie Mae to issue the Mortgage-backed
                    Securities in Borrower's name, and to deliver the Pledged
                    Securities to Lender's custody account at JP Morgan Chase
                    (JPMORGAN CHASE/CUST/G55026). The ABA number for JP Morgan
                    Chase is 021000021. The Schedule of Subscribers should also
                    bear the following instructions: "These instructions may not
                    be changed without the prior written consent of Residential
                    Funding Corporation, Preston A. Lyvers, Managing Director or
                    Patti Erfan, Director," and

               (c)  Completed Original Release of Security Interest (HUD Form
                    11711 A) to be executed by Lender.

          (5)  No later than 2 Business Days prior to the Settlement Date for
               the Mortgage-backed Securities, Lender must receive signed
               Securities Delivery Instructions form attached as Schedule I to
               this Exhibit.

          Upon instruction by Borrower, Lender will complete the endorsement of
          the Mortgage Note and make arrangements for the delivery of the
          original Collateral Documents evidencing Pledged Loans or Pledged
          Securities and related original pool documents with the appropriate
          bailee letter to an Investor, Approved Custodian or other pool
          custodian. Upon receipt of Mortgage-backed Securities, Lender will
          cause those Mortgage-backed Securities to be delivered to the Investor
          that issued the Purchase Commitment. Mortgage-backed Securities will
          be released to an Investor only upon payment of the purchase proceeds
          to Lender. Cash proceeds of sales of Pledged Loans and Pledged
          Securities will be applied to related Warehousing Advances outstanding
          under the Warehousing Commitment. As long as no Default or Event of
          Default exists, Lender will return any excess proceeds of the sale of
          Pledged Loans or Pledged Securities to Borrower, unless otherwise
          instructed in writing.

                                        4

<PAGE>

                                                         SCHEDULE I TO EXHIBIT B

                         RESIDENTIAL FUNDING CORPORATION
                           WAREHOUSE LENDING DIVISION
                         SECURITY DELIVERY INSTRUCTIONS
--------------------------------------------------------------------------------

INSTRUCTIONS MUST BE RECEIVED 2 BUSINESS DAYS IN ADVANCE OF PICK-UP/DELIVERY

BOOK-ENTRY DATE:                           SETTLEMENT DATE:
                 --------------------                       --------------------

ISSUER:                                    SECURITY: $
        -----------------------------                  -------------------------

NO. OF CERTIFICATES:                       1)
                     ----------------         ----------------------------------

                                           2)
                                              ----------------------------------

                                           3)
                                              ----------------------------------

CUSIP NO.
          --------------------

Pool No.                   MI No.             Coupon Rate:
         ---------------          ---------                ---------------------

Issue Date (M/D/Y):                           Maturity Date (M/D/Y):
                    -----------------                                -----------

POOL TYPE (circle one):

Ginnie Mae:       GINNIE MAE I      GINNIE MAE II

Freddie Mac:      FIXED ARM         DISCOUNT NOTE

Fannie Mae:       FIXED ARM         DISCOUNT NOTE      DEBENTURES      REMIC

DELIVER TO:
            -------------------------      ( ) Versus Payment

                                           DVP AMOUNT $
            -------------------------                   ------------------------

            -------------------------      ( ) Free Delivery

DELIVER TO:
            -------------------------      ( ) Versus Payment

                                           DVP AMOUNT $
            -------------------------                   ------------------------

            -------------------------      ( ) Free Delivery

DELIVER TO:
            -------------------------      ( ) Versus Payment

                                           DVP AMOUNT $
            -------------------------                   ------------------------

            -------------------------      ( ) Free Delivery

AUTHORIZED SIGNATURE:
                      ----------------------------------------------------------

TITLE:
       -------------------------------------------------------------------------

                                        5

<PAGE>

                                                                EXHIBIT B-REP/NP

--------------------------------------------------------------------------------
                  PROCEDURES AND DOCUMENTATION FOR WAREHOUSING
                           REPURCHASED MORTGAGE LOANS
                          NONPERFORMING MORTGAGE LOANS
--------------------------------------------------------------------------------

                        FIRST NLC FINANCIAL SERVICES, LLC
                                    NLC, INC.

FIRST NLC FINANCIAL SERVICES, LLC and NLC, INC. (collectively, "Borrower") must
observe the following procedures and documentation requirements in all respects.
All documents must be satisfactory to Residential Funding Corporation ("Lender")
in its sole discretion. Capitalized terms used in this Exhibit without further
definition have the meanings set forth in the Second Amended and Restated
Warehousing Credit and Security Agreement between Borrower and Lender (as
amended, restated, renewed or replaced, "Agreement"). HUD, Fannie Mae and
Freddie Mac form numbers used in this Exhibit are for convenience only and
Borrower must use the equivalent forms required at the time of delivery of a
Pledged Loan or a Pledged Security. Except for documents submitted through
RFConnects Delivery, all Warehousing Advance Requests and Collateral Documents
must be submitted to Lender in a top tabbed, legal size manila file folder,
hole-punched and acco-fastened in the order specified in the Warehousing Advance
Request. Each folder must be labeled with the mortgagor name(s), Borrower loan
number and Borrower name. If a Wet Settlement Advance is being requested, the
Warehousing Advance Request and required Collateral Documents should be
submitted in accordance with the above instructions. The remaining Collateral
Documents must be submitted with a cover letter identifying the mortgagor
name(s) and Borrower loan number.

I.   PRIOR TO MAKING A WET SETTLEMENT ADVANCE. AGAINST A REPURCHASED MORTGAGE
     LOAN OR A NONPERFORMING MORTGAGE LOAN, THE LENDER MUST RECEIVE THE
     FOLLOWING:

     (1)  An estimate of the amount of the requested Wet Settlement Advance 1
          Business Day prior to the date the requested Advance is to be made.

     (2)  Original Request for Advance against Repurchased Mortgage Loans or
          Nonperforming Mortgage Loans (Exhibit A-SF) and 1 copy of same.

     (3)  Copy of Mortgage Note (only required for Wet Settlement Advance).

     (4)  Investor repurchase demand letter (Repurchased Mortgage Loans only).

     (5)  Summary of Mortgage Loan documentation or Investor problems, expected
          cure period, and current payment history.

     (6)  Broker price opinion, dated within 60 days prior to the date of the
          Wet Settlement Advance, setting forth the value of the real property
          if sold within a 30-day marketing period.

     THE FOLLOWING DOCUMENTS MUST BE RECEIVED BY LENDER WITHIN 20 DAYS OF THE
     DATE ON WHICH LENDER MAKES A WET SETTLEM ENT ADVANCE TO BORROWER:

     (7)  Original signed Mortgage Note, endorsed by Borrower in blank with
          corresponding interim endorsements, if applicable, and one copy of
          same.

     (8)  Original or certified true (by recorder's office) copy of the
          Mortgage.

                                       B-1

<PAGE>

     (9)  Original or certified true (by recorder's officer) copies of all
          interim assignments of the Mortgage. (If an interim assignment has not
          been recorded or sent for recordation, such original interim
          assignment). Mortgage Note must bear corresponding endorsements.

     (10) An assignment of the Mortgage, endorsed by Borrower in blank, in
          recordable form but unrecorded (not required for Mortgage Loans
          registered on the MERS system after execution and delivery by all
          parties of an Electronic Tracking Agreement, if approved by Lender).

     (11) Original ALTA Mortgagee's Policy of Title Insurance or equivalent
          thereto.

     (12) Original VA Loan Guaranty Certificate, FHA Mortgage Insurance
          Certificate, or copy of Private Mortgage Insurance Certificate
          (Conventional Loans, if applicable).

II.  PRIOR TO THE MAKING OF A WET SETTLEMENT ADVANCE AGAINST A REPURCHASED
     MORTGAGE LOAN OR A NONPERFORMING MORTGAGE LOAN (OTHER THAN A WET SETTLEMENT
     ADVANCE), THE LENDER MUST RECEIVE ALL OF THE COLLATERAL DOCUMENTS LISTED IN
     SECTION I ABOVE.

III. WITHIN 7 BUSINESS DAYS AFTER THE DATE OF A WET SETTLEMENT ADVANCE AGAINST A
     MORTGAGE LOAN TO BE REGISTERED ON THE MERS SYSTEM, THE REPURCHASED MORTGAGE
     LOAN OR THE NONPERFORMING MORTGAGE LOAN MUST BE REGISTERED ON THE MERS
     SYSTEM, SHOWING BORROWER AS SERVICER OR SUBSERVICER AND LENDER AS INTERIM
     FUNDER.

IV.  ONLY LENDER MAY DELIVER THE MORTGAGE NOTES AND OTHER ORIGINAL COLLATERAL
     DOCUMENTS EVIDENCING PLEDGED LOANS OR PLEDGED SECURITIES AND RELATED POOL
     DOCUMENTS TO THE INVESTOR, POOL CUSTODIAN OR ATTORNEYS CONDUCTING
     FORECLOSURE SALES, UNLESS OTHERWISE AGREED IN WRITING.

A.   The following procedures must be followed for deliveries of Pledged Loans:

     No later than 1 Business Day prior to the requested shipment date and no
     later than 1 Business Day prior to the expiration date of the Purchase
     Commitment, Lender must receive the following:

     (1)  Signed shipping instructions for the delivery of the Pledged Loans
          including the following:

          (a)  Name and address of the office of the Investor to which the loan
               documents are to be shipped, the desired shipping date and the
               preferred method of delivery;

          (b)  Instructions for endorsement of the Mortgage Note;

          (c)  Names of mortgagor(s), Mortgage Note Amounts of Pledged Loans to
               be shipped and Borrower's loan number; and

          (d)  Commitment number and expiration date of the Purchase Commitment.

     (2)  For deliveries of Pledged Loans to Fannie Mae for cash purchase, the
          following additional documents are required:

          (a)  Copy of Loan Schedule (Fannie Mae Form 1068 or 1069) showing
               Lender's designated Fannie Mae payee code as recipient of the
               loan purchase proceeds.

     (3)  For deliveries of Pledged Loans to Freddie Mac for cash purchase, the
          following additional documents are required:

          (a)  Original completed Warehouse Lender Release of Security Interest
               (Freddie Mac Form 996) to be executed by Lender, designating
               Lender as the Warehouse Lender

                                       B-2

<PAGE>

               and showing the Cash Collateral Account designated by Lender as
               the receiving account for loan purchase proceeds; and

          (b)  Copy of Wire Transfer Authorization for a Cash Warehouse Delivery
               (Freddie Mac Form 987), designating Lender as the Warehouse
               Lender and showing the Cash Collateral Account designated by
               Lender as the receiving account for loan purchase proceeds.

B.   In the event Pledged Loans are delivered to a pool custodian, other than an
     Approved Custodian, payment of the related Advance is required within 2
     Business Days of shipment.

     The following procedures are to be followed for deliveries of Pledged
     Loans to Approved Custodians:

     No later than 1 Business Day prior to the requested shipment date. Lender
     must receive the following:

     (1)  Signed shipping instructions or authenticated shipping instructions
          sent via RFConnects Delivery for the delivery of the Pledged Loans to
          the Approved Custodian including the following:

          (a)  Name and address of the office of the approved Custodian to which
               the loan document are to be shipped, the desired shipping date
               and the preferred method of delivery;

          (b)  Instructions for endorsement of the Mortgage Note;

          (c)  Name(s) of mortgagors) and Mortgage Note Amounts of Pledged Loans
               to be shipped and Borrower's loan number; and

          (d)  Commitment number and expiration date of the Purchase Commitment
               for the Pledged Securities.

     (2)  For Fannie Mae Mortgage-backed Securities issuance, the following
          additional documents are required:

          (a)  Copy of Schedule of Mortgages (Fannie Mae Form 2005 or 2025);

          (b)  Copy of Delivery Schedule (Fannie Mae Form 2014), instructing
               Fannie Mae to issue the Mortgage-backed Securities in the name of
               Borrower with Lender as pledgee and to deliver the
               Mortgage-backed Securities to Lender's custody account at JP
               Morgan Chase (JPMORGAN CHASE/CUST/G55026). The ABA number for JP
               Morgan Chase is 021000021.

     (3)  For Freddie Mac Mortgage-backed Securities issuance, the following
          additional documents are required:

          (a)  Copy of Settlement Information and Delivery Authorization
               (Freddie Mac Form 939). designating Lender as the Warehouse
               Lender and instructing Freddie Mac to deliver the Mortgage-backed
               Securities to Lender's custody account at JP Morgan Chase
               (JPMORGAN CHASE/CUST/G55026). The ABA number for JP Morgan Chase
               is 021000021; and

          (b)  Original Warehouse Lender Release of Security Interest (Freddie
               Mac Form 996) to be executed by Lender, designating Lender as the
               Warehouse Lender and instructing Freddie Mac to deliver the
               Mortgage-backed Securities to Lender's custody account at JP
               Morgan Chase (JPMORGAN CHASE/CUST/G55026). The ABA number for JP
               Morgan Chase is 021000021.

                                       B-3

<PAGE>

     (4)  For Ginnie Mae Mortgage-backed Securities issuance, the following
          additional documents are required:

          (a)  Signed copy of schedule of Mortgages (HUD Form 11706);

          (b)  Signed copy of Schedule of Subscribers (HUD Form 11705)
               instructing Ginnie Mae to issue the Mortgage-backed securities in
               Borrower's name, and to deliver the Pledged Securities to
               Lender's custody account at JP Morgan Chase (JPMORGAN
               CHASE/CUST/G55026). The following instructions must also be
               included on the form: These instructions may not be changed
               without the prior written consent of Residential Funding
               Corporation, Preston A. Lyvers, Managing Director or Patti Erfan,
               Director." The ABA number for JP Morgan Chase is 021000021.

          (c)  Completed Original Release of Security Interest (HUD Form 11711A)
               to be executed by Lender.

     (5)  No later than 2 Business Days prior to the Settlement Date for the
          Mortgage-backed Securities, Lender must receive signed Securities
          Delivery Instructions form attached hereto as Schedule I.

C.   The following procedures are to be followed for deliveries of Pledged Loans
     to attorneys conducting a foreclosure sale:

     No later than 1 Business Day prior to the requested shipment date and no
     later than 1 Business Day prior to the required delivery date to the
     Attorney conducting the foreclosure sale, Lender must receive signed
     shipping instructions for the delivery of the Pledged Loans including the
     following:

     (1)  Name and address of the office of the attorney to which the Collateral
          Documents are to be shipped, the desired shipping date and the
          preferred method of delivery;

     (2)  Names of Mortgagor and Mortgage Note Amounts of Pledged Loans to be
          shipped; and

     (3)  Confirmation that the attorney will execute and return the bailee
          letter (acknowledged instructions from Borrower to do so).

     Upon instruction by Borrower, Lender will complete the endorsement of the
     Mortgage Note and make arrangements for the delivery of the original
     Collateral Documents evidencing Pledged Loans or Pledged Securities and
     related original pool documents with the appropriate bailee letter to the
     Investor, Approved Custodian, other pool custodian or attorney conducting a
     foreclosure sale. Upon receipt of Mortgage-backed Securities, Lender will
     cause those Mortgage-backed Securities to be delivered to the Investor that
     issued the Purchase Commitment. Mortgage-backed Securities will be released
     to the Investor only upon payment of the purchase proceeds to Lender. Cash
     proceeds of sales of Pledged Loans and Pledged Securities will be applied
     to related Wet Settlement Advances outstanding against Repurchased Mortgage
     Loans or Nonperforming Mortgage Loans under the Warehousing Commitment. As
     long as no Default or Event of Default exists, Lender will return any
     excess proceeds of the sale of Pledged Loans or Pledged Securities to
     Borrower, unless otherwise instructed in writing.

                                      B-4

<PAGE>

                                                  SCHEDULE I TO EXHIBIT B-REP/NP

                         RESIDENTIAL FUNDING CORPORATION
                           WAREHOUSE LENDING DIVISION
                         SECURITY DELIVERY INSTRUCTIONS
--------------------------------------------------------------------------------

INSTRUCTIONS MUST BE RECEIVED 2 BUSINESS DAYS IN ADVANCE OF PICK-UP/DELIVERY

BOOK-ENTRY DATE:                           SETTLEMENT DATE:
                 ---------------------                      --------------------

ISSUER:                                    SECURITY: $
        ------------------------------                --------------------------

NO. OF CERTIFICATES:                       1)
                     -----------------       -----------------------------------

                                           2)
                                             -----------------------------------

                                           3)
                                             -----------------------------------

CUSIP NO.
          ---------------------

Pool No.                   Ml No.             Coupon Rate:
         ----------------         ----------               ---------------------

Issue Date (M/D/Y):                           Maturity Date (M/D/Y):
                    ------------------                               -----------

POOL TYPE (circle one):

Ginnie Mae:       GINNIE MAE 1      GINNIE MAE II

Freddie Mac:      FIXED ARM         DISCOUNT NOTE

Fannie Mae:       FIXED ARM         DISCOUNT NOTE      DEBENTURES      REMIC

DELIVER TO:
            ----------------------------   ( ) Versus Payment

                                           DVP AMOUNTS $
            ----------------------------                ------------------------

            ----------------------------   ( ) Free Delivery

DELIVER TO:
            ----------------------------   ( ) Versus Payment

                                           DVP AMOUNTS $
            ----------------------------                ------------------------

            ----------------------------   ( ) Free Delivery

DELIVER TO:
            ----------------------------   ( ) Versus Payment

                                           DVP AMOUNTS $
            ----------------------------                ------------------------

            ----------------------------   ( ) Free Delivery

AUTHORIZED SIGNATURE:
                     -----------------------------------------------------------

TITLE:
      --------------------------------------------------------------------------

                                      B-5

<PAGE>

                                                                       EXHIBIT C

--------------------------------------------------------------------------------
                         SCHEDULE OF SERVICING PORTFOLIO
--------------------------------------------------------------------------------

                                     Unpaid Principal Balance of
                         Investor   Loans Serviced as of the Date
                           Name            of this Agreement
                         --------   -----------------------------

                            N/A                  N/A

                          (TO BE COMPLETED BY BORROWER)

                            (IF NONE, STATE "NONE")

<PAGE>

                                                                       EXHIBIT D

--------------------------------------------------------------------------------
                                  SUBSIDIARIES
--------------------------------------------------------------------------------
   Borrower                            States Qualified
     Name         State of Formation    to do Business    Percentaqe Owned
---------------   ------------------   ----------------   ----------------
NLC, Inc.                 TN                TN, PA               10%
First NLC, Inc.           MN                   MN               100%

                          (TO BE COMPLETED BY BORROWER)

                            (IF NONE, STATE "NONE")

<PAGE>

                                                                       EXHIBIT E

--------------------------------------------------------------------------------
                             COMPLIANCE CERTIFICATE
--------------------------------------------------------------------------------

This Compliance Certificate is submitted to the Lender pursuant to Section
7.2(c) of the Second Amended and Restated Warehousing Credit and Security
Agreement among FIRST NLC FINANCIAL SERVICES, LLC ("First NLC"), NLC, INC.
("NLC, Inc.") (First NLC and NLC, Inc. are collectively referred to as
"Borrowers") and RESIDENTIAL FUNDING CORPORATION ("Lender"), dated as of
November 1, 2003 (as amended, restated, renewed or replaced, "Agreement").
Capitalized terms and Section numbers used in this Compliance Certificate
without further definition refer to those terms and Sections set forth in the
Agreement.

The undersigned hereby certifies to Lender that as of the close of business
on                                     , ("Statement Date") and with respect to
   ------------------------------------
Borrowers (and, if applicable, Borrowers' Subsidiaries on a consolidated basis):

1.   As demonstrated by the attached calculations supporting this Compliance
     Certificate, Borrowers satisfied the covenants set forth in Sections 8.8,
     8.9, 8.10, 8.11 and 8.12 or, if Borrowers did not satisfy any of those
     covenants, a detailed explanation is attached setting forth the nature and
     the period of existence of any Default or Event of Default and the action
     Borrowers have taken, are taking or propose to take with respect to that
     Default or Event of Default.

2.   Borrowers have not transferred (by sale or otherwise), pledged or granted a
     security interest in any Servicing Contracts, except as permitted under the
     terms of the Agreement.

3.   Borrowers have not made any payments in advance of the scheduled maturity
     date on any Subordinated Debt, and Borrowers have not incurred any
     additional Debt that must be subordinated under the terms of Section 7.11.

4.   Borrowers were in full compliance with all applicable Investor net worth
     requirements, and in good standing with each Investor.

5.   I have reviewed the terms of the Agreement and have made, or caused to be
     made under my supervision, a review in reasonable detail of the
     transactions and conditions of Borrowers (and, if applicable, Borrowers'
     Subsidiaries). That review has not disclosed, and I have no other knowledge
     of the existence of, any Default or Event of Default, or if any Default or
     Event of Default existed or exists, a detailed explanation is attached
     setting forth the nature and the period of existence of the Default or
     Event of Default and the action Borrowers have taken, are taking or propose
     to take with respect to that Default or Event of Default.

6.   Pursuant to Section 7.2 of the Agreement, enclosed are the financial
     statements of First NLC as of the Statement Date. The financial statements
     for the period ending on the Statement Date fairly present the financial
     condition and results of operations of First NLC and First NLC's
     Subsidiaries on a consolidated basis as of the Statement Date.

Dated:                                   FIRST NLC FINANCIAL SERVICES, LLC
       ---------------------             a Florida limited liability company

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

                                       1

<PAGE>

                 CALCULATIONS SUPPORTING COMPLIANCE CERTIFICATE
--------------------------------------------------------------------------------

Borrower Name: FIRST NLC FINANCIAL SERVICES, LLC (and its Subsidiaries)

Statement Date:
                -------------------------

All financial calculations set forth in this Compliance Certificate are as of
the Statement Date.

1.   TANGIBLE NET WORTH

     A.   Net Worth of Borrower is:

          Excess of total assets over total
          liabilities:                                $
                                                       -------------------------

          Plus:  Subordinated Debt (or any portion
                 of that Subordinated Debt) due
                 (must be more than 6 months after
                 the Warehousing Maturity Date):      $
                                                       -------------------------

          Minus: Advances or loans to members,
                 managers or Affiliates or any
                 shareholder, director or officer of
                 any manager, member or Affiliate:    $
                                                       -------------------------

          Minus: Investments in Affiliates:           $
                                                       -------------------------

          Minus: Assets pledged to secure
                 liabilities not included in Debt:    $
                                                       -------------------------

          Minus: Intangible assets:                   $
                                                       -------------------------

          Minus: Other assets that HUD deems
                 non-acceptable:                      $
                                                       -------------------------

          Minus: Other assets that Lender deems
                 unacceptable:                        $
                                                       -------------------------

               TANGIBLE NET WORTH                     $
                                                       -------------------------

     B.   Minimum Tangible Net Worth of First NLC is:

                 (i)  Base Minimum:                   $
                                                       -------------------------

                 (ii) On and after June 30, 2004,
                      50% of positive net income for
                      each completed 6-month period
                      after taxes and distributions
                      to members for tax purposes
                      for each 6-month period:        $
                                                       -------------------------

                 New  Minimum ((i) plus (ii)):        $
                                                       -------------------------

     C.   Requirements of Section 8.9 of the Agreement:

          FIRST NLC'S TANGIBLE NET WORTH MUST BE AT LEAST $10,500,000. PLUS 50%
          OF FIRST NLC'S POSITIVE NET INCOME AFTER TAXES AND DISTRIBUTIONS TO
          MEMBERS FOR TAX PURPOSES (ADJUSTED SEMIN-

                                        2

<PAGE>

          ANNUALLY) FOR EACH SIX-MONTH PERIOD ENDING ON AND AFTER JUNE 30,2004.

     D.   Covenant Satisfied:              Covenant Not Satisfied:
                              -----------                          -----------

2.   DEBT OF BORROWER

     A.   Borrower's total liabilities calculated in
          accordance with GAAP, plus all
          indebtedness or other obligations for
          borrowed money or for the deferred
          purchase price of property or services:     $
                                                       -------------------------

          Minus: Subordinated Debt (or any portion
                 of that Subordinated Debt) due
                 (must be more than 6 months after
                 the Warehousing Maturity Date):      $
                                                       -------------------------

     B.   DEBT (Total):                               $
                                                       -------------------------

          Minus: Debt arising under Hedging
                 Arrangements (to the extent of
                 assets arising under those Hedging
                 Arrangements):                       $
                                                       -------------------------

     C.   DEBT (adjusted for Hedging Arrangements):   $
                                                       -------------------------

3.   LEVERAGE RATIO

     A.   The ratio of Debt (adjusted for Hedging
          Arrangements) to Tangible Net Worth is (2.C.
          to 1.A.):                                                  to 1
                                                      --------------

     B.   Requirements of Section 8.8 of the Agreement:

          BORROWER'S LEVERAGE RATIO MUST NOT EXCEED 20 TO 1.

     C.   Covenant Satisfied:              Covenant Not Satisfied:
                              -----------                          -----------

4.   LIQUID ASSETS OF BORROWER

     A.   The following unrestricted and unencumbered assets:

          Cash:                                       $
                                                       -------------------------

          Funds on deposit in any United States bank
          (net of all outstanding checks, drafts and
          similar items):                             $
                                                       -------------------------

          Investment grade commercial paper:          $
                                                       -------------------------

          Money market funds:                         $
                                                       -------------------------

          Marketable securities:                      $
                                                       -------------------------

          Buydown:                                    $
                                                       -------------------------

          Excess Buydown:                             $
                                                       -------------------------

                                        3

<PAGE>

     B.   LIQUID ASSETS                               $
                                                       -------------------------

     C.   Requirements of Section 8.10 of the Agreement:

          FIRST NLC'S LIQUID ASSETS MUST NOT BE LESS THAN (A) $2,500,000 PLUS
          (B) BEGINNING JUNE 30, 2004, $500,000 FOR EACH SIX-MONTH PERIOD ENDING
          ON AND AFTER JUNE 30, 2004. ADJUSTMENTS WILL OCCUR ON THE FIRST
          BUSINESS DAY IN JULY AND JANUARY OF EACH YEAR.

     D.   Covenant Satisfied:        Covenant Not Satisfied:
                              ------                         ------

5.   DISTRIBUTIONS TO MEMBERS; DISTRIBUTIONS TO SHAREHOLDERS

     A.   Distributions to First NLC's members
          during the current fiscal year were:        $
                                                       -------------------------

     B.   Dividends and distributions to NLC, Inc.'s
          shareholders during the current fiscal
          year were:                                  $
                                                       -------------------------

     C.   Requirements of Section 8.11 of the Agreement:

          NO DISTRIBUTIONS WILL BE DECLARED OR PAID TO FIRST NLC'S MEMBERS
          (INCLUDING ANY PURCHASE OR REDEMPTION OF MEMBERSHIP INTERESTS) IF,
          EITHER BEFORE OR AFTER GIVING EFFECT THERETO, AN EVENT OF DEFAULT WILL
          HAVE OCCURRED AND BE CONTINUING.

          NO DIVIDENDS OR DISTRIBUTIONS WILL BE DECLARED OR PAID TO NLC, INC.'S
          SHAREHOLDERS (INCLUDING ANY PURCHASE OR REDEMPTION OF STOCK) IF,
          EITHER BEFORE OR AFTER GIVING EFFECT THERETO, AN EVENT OF DEFAULT WILL
          HAVE OCCURRED AND BE CONTINUING.

     D.   Covenant Satisfied:        Covenant Not Satisfied:
                              ------                         ------

6.   TRANSACTIONS WITH AFFILIATES

     A.   Loans, advances, and extensions of credit
          by First NLC to its Affiliates during the
          current fiscal year:                        $
                                                       -------------------------

     B.   Capital contributions made by First NLC to
          its Affiliates during the current fiscal
          year:                                       $
                                                       -------------------------

     C.   Transfers, sales, pledges, assignments or
          other dispositions of assets  made by
          First NLC or on behalf of its Affiliates:   $
                                                       -------------------------

     D.   Management fees paid by First NLC to
          Affiliates during the current fiscal year:  $
                                                       -------------------------

     E.   Requirements of Section 8.12 of the Agreement:

                                        4

<PAGE>

     (1)  FIRST NLC MAY NOT MAKE ANY LOANS, ADVANCES, EXTENSIONS OF CREDIT OR
          CAPITAL CONTRIBUTIONS TO ITS AFFILIATES.

          Covenant Satisfied:        Covenant Not Satisfied:
                              ------                         ------

     (2)  FIRST NLC MAY NOT TRANSFER, SELL, PLEDGE, ASSIGN OR MAKE ANY OTHER
          DISPOSITION OF ASSETS TO OR ON BEHALF OF ITS AFFILIATES.

          Covenant Satisfied:        Covenant Not Satisfied:
                              ------                         ------

     (3)  FIRST NLC MAY NOT MERGE OR CONSOLIDATE WITH, OR PURCHASE OR ACQUIRE
          ANY ASSETS FROM, ITS AFFILIATES.

          Covenant Satisfied:        Covenant Not Satisfied:
                              ------                         ------

     (4)  MANAGEMENT FEES PAID BY FIRST NLC TO SUN CAPITAL PARTNERS, INC. MUST
          NOT EXCEED $500,000 PER ANNUM.

          Covenant Satisfied:        Covenant Not Satisfied:
                              ------                         ------

7.   LOAN PRODUCTION VOLUME

--------------------------------------------------------------------------------
                                                     Aggregate Mortgage Note
       Loan Type          Number of Mortgage Loans            Amount
--------------------------------------------------------------------------------
  Prime Mortgage Loans
--------------------------------------------------------------------------------
Subprime Mortgage Loans
--------------------------------------------------------------------------------
High LTV Mortgage Loans
--------------------------------------------------------------------------------

                                       5

<PAGE>

                                                                       EXHIBIT F

--------------------------------------------------------------------------------
                      SCHEDULE OF EXISTING LINES OF CREDIT
--------------------------------------------------------------------------------

                                  As of 11/1/03

Lender Name   Commitment Amount   Expiration Date
-----------   -----------------   ---------------
RFC              $135,000,000         9/30/05
CSFB               75,000,000         7/27/04
WAMU               40,000,000          8/1/04

                         (TO BE COMPLETED BY BORROWER)

                            (IF NONE, STATE "NONE")

                                        1

<PAGE>

                                                                       EXHIBIT G

--------------------------------------------------------------------------------
                                   ASSUMED NAMES
--------------------------------------------------------------------------------

First NLC Financial Services, LLC

     D/B/A - Florida Mortgage Network
     D/B/A - The Lending Center
     D/B/A - First NLC

NLC, Inc.
     D/B/A - First NLC, Inc.

First NLC, Inc. - None

                          (TO BE COMPLETED BY BORROWER)

                     (PLEASE LIST -- IF NONE, STATE "NONE")

                                       1

<PAGE>

                                                                       EXHIBIT H

--------------------------------------------------------------------------------
                         ELIGIBLE LOANS AND OTHER ASSETS
--------------------------------------------------------------------------------

                        First NLC Financial Services, LLC
                                    NLC, Inc.

LIMITATIONS ON WAREHOUSING ADVANCES AGAINST MORTGAGE LOANS

     Lender's obligation to make Warehousing Advances under the Agreement is
     subject to the following limitations:

          1.   No Warehousing Advance will be made against any Mortgage Loan
               that has been previously sold or pledged to obtain financing
               (whether or not such financing constitutes Debt) under another
               warehousing financing arrangement or a gestation agreement.

          2.   No Warehousing Advance will be made against any Mortgage Loan
               that Lender believes may be based on untrue, incomplete or
               inaccurate or fraudulent information or may otherwise be subject
               to fraud.

          3.   No Warehousing Advance will be made against a Mortgage Loan if
               any of the limitations set forth in this Exhibit H would be
               exceeded after giving effect to the Warehousing Advance.

          4.   No Warehousing Advance will be made against a Mortgage Loan with
               an original principal balance in excess of $2,000,000.

SUBLIMITS

     These general limitations apply to all Warehousing Advances against
     Eligible Loans:

          1.   Wet Settlement Advances:        40% of the Warehousing Commitment
                                               Amount.

          2.   Third Party Originated Loans:   Not Permitted

ELIGIBLE LOANS AND TERMS OF WAREHOUSING ADVANCES

     Subject to compliance with the terms and limitations set forth below and
     the terms, representations and warranties and the covenants in the
     Agreement, each of the following Mortgage Loans is an Eligible Loan for
     purposes of the Agreement:

1.   Prime Mortgage Loan

     (a) Definition: A First Mortgage Loan or a Second Mortgage Loan with the
     following characteristics:

          (i)  For a First Mortgage Loan:

                                       1

<PAGE>

               A. Underwritten substantially in accordance with Fannie Mae or
               Freddie Mac underwriting standards (except as to maximum amount);
               and

               B. Loan-to-Value Ratio not to exceed 80% or, if the Loan-to-Value
               Ratio exceeds 80%, the Prime Mortgage Loan is insured by or
               subject to a commitment for mortgage insurance in an amount and
               on terms and conditions that satisfy the underwriting standards
               of Fannie Mae or Freddie Mac; or

               C. A Government Mortgage Loan.

          (ii) For a Second Mortgage Loan:

               A. The credit of the obligor has been underwritten substantially
               in accordance with Fannie Mae or Freddie Mac underwriting
               standards; and

               B. Loan-to-Value Ratio not more than 100%.

     (b)  Interest Rate:

          (i) Other Mortgage Loans:            [*]% over LIBOR*

          (ii) Aged Mortgage Loans:            [*]% over LIBOR

     (c)  Prime Sublimit:                      $65,000,000

          (i)  First Mortgage Loans:           $65,000,000

          (ii) Second Mortgage Loans:          $6,750,000

          (iii) Aged Mortgage Loans:           $2,500,000

     (d)  Committed/Uncommitted:

          (i)  First Mortgage Loans:           Purchase Commitment required

          (ii) Second Mortgage Loans:          Purchase Commitment NOT required

     (e)  Wet Settlement Advances:             Permitted

     (f)  Aged Mortgage Loans:                 Permitted for First Mortgage
                                               Loans only

     (g)  Committed Advance Rate:

          (i)  First Mortgage Loans:           [*]% of the lesser of (i) the
                                               Mortgage Note Amount or (ii) the
                                               Committed Purchase Price

          (ii) RFC Mortgage Loans:             [*]% of the lesser of (i) of the
                                               Mortgage Note Amount or (ii) the
                                               Committed Purchase Price

     (h)  Uncommitted Advance Rate:            [*]% of the Mortgage Note Amount

     (i)  Standard Warehouse Period:           90 days

     (j)  Aged Warehouse Period:               180 days

                                        2

<PAGE>

     (k)  Required Prepayments:                On the day a Pledged Loan becomes
                                               an Aged  Mortgage Loan, the
                                               Warehousing Advance against such
                                               Pledged Loan must be (a) repaid
                                               in full, to the extent the Aged
                                               Mortgage Loan Sublimit would be
                                               exceeded, or (b) otherwise,
                                               reduced by [*]% of the Mortgage
                                               Note Amount on the 15th day of
                                               each month commencing after 90
                                               days.

     *lf at any time (i) the Forward Commitment is no longer in effect, or (ii)
     Borrowers fail to deliver to Lender Mortgage Loans as required by the terms
     of the Forward Commitment, the interest rates then in effect for Prime
     Mortgage Loans will increase by [*]% per annum. If Borrowers enter into a
     new commitment for the forward sale of Mortgage Loans by Borrowers to
     Lender, in an amount at least equal to $300,000,000, the interest rates
     then in effect for Prime Mortgage Loans (not including Aged Mortgage Loans)
     will be reduced by [*]% per annum.

2.   Subprime Mortgage Loan

     (a) Definition: A First Mortgage Loan or Second Mortgage Loan that has a
     risk rating of "A-," "B" or "C" (determined using underwriting standards
     that comply with industry standards in the sole judgment of Lender), and
     that is acceptable for purchase by at least two Investors.

     (b)  Interest Rate:

          (i)  Other Mortgage Loans:           [*]% over LIBOR*

          (ii) Aged Mortgage Loans:            [*]% over LIBOR

     (c)  Subprime Sublimit:                   $135,000,000

          (i)  First Mortgage Loans:           $135,000,000

          (ii) Second Mortgage Loans:          $15,000,000

          (iii) Aged Mortgage Loans:           $2,500,000

     (d)  Committed/Uncommitted:               Purchase Commitment NOT required

     (e)  Wet Settlement Advances:             Permitted

     (f)  Aged Mortgage Loans:                 Permitted for First Mortgage
                                               Loans only

     (g)  Committed Advance Rate:

          (i)  First Mortgage Loans:           [*]% of the lesser of (i) the
                                               Mortgage Note Amount or (ii) the
                                               Committed Purchase Price

          (ii) RFC Mortgage Loans:             [*]% of the lesser of (i) of the
                                               Mortgage Note Amount or (ii) the
                                               Committed Purchase Price

     (h)  Uncommitted Advance Rate:

          (i)  First Mortgage Loans:           [*]% of the Mortgage Note Amount

                                       3

<PAGE>

          (ii) Second Mortgage Loans:          [*]% of the Mortgage Note Amount

     (i)  Standard Warehouse Period:           90 days

     (j)  Aged Warehouse Period:               180 days

     (k)  Required Prepayments:                On the day a Pledged Loan becomes
                                               an Aged Mortgage Loan, the
                                               Warehousing Advance against such
                                               Pledged Loan must be (a) repaid
                                               in full, to the extent the Aged
                                               Mortgage Loan Sublimit would be
                                               exceeded, or (b) otherwise,
                                               reduced by [*]% of the Mortgage
                                               Note Amount on the 15th day of
                                               each month commencing after 90
                                               days.

     *If at any time (i) the Forward Commitment is no longer in effect, or (ii)
     Borrowers fail to deliver to Lender Mortgage Loans as required by the terms
     of the Forward Commitment, the interest rates then in effect for Subprime
     Mortgage Loans will increase by [*]% per annum. If Borrowers enter into a
     new commitment for the forward sale of Mortgage Loans by Borrowers to
     Lender, in an amount at least equal to $300,000,000, the interest rates
     then in effect for Subprime Mortgage Loans (not including Aged Mortgage
     Loans) will be reduced by [*]% per annum.

3.   High LTV Mortgage Loan

     (a) Definition: A Second Mortgage Loan that meets the 125 Loan Program
     eligibility criteria set forth in the GMAC-RFC Client Guide and for which
     an AssetWise Certificate has been issued, and a First Mortgage Loan that
     meets the Home Solution Program eligibility criteria set forth in the
     GMAC-RFC Client Guide and for which an AssetWise Certificate has been
     issued.

     (b)  Interest Rate:                       [*]% over LIBOR*

     (c)  High LTV Sublimit:                   $5,000,000

     (d)  Committed/Uncommitted:               Purchase Commitment required from
                                               Lender

     (e)  Wet Settlement Advances:             Permitted

     (f)  Aged Mortgage Loans:                 Not Permitted

     (g)  Committed Advance Rate:

          (i)  First Mortgage Loans:           [*]% of the lesser of (i) the
                                               Mortgage Note Amount or (ii) the
                                               Committed Purchase Price

          (ii) Second Mortgage Loans:          [*]% of the lesser of (i) the
                                               Mortgage Note Amount or (ii) the
                                               Committed Purchase Price

          (iii) RFC Mortgage Loans:            [*]% of the lesser of (i) of the
                                               Mortgage Note Amount or (ii) the
                                               Committed Purchase Price

                                        4

<PAGE>

     (h)  Standard Warehouse Period:           45 days

     *If at any time (i) the Forward Commitment is no longer in effect, or (ii)
     Borrowers fail to deliver to Lender Mortgage Loans as required by the terms
     of the Forward Commitment, the interest rates then in effect for High LTV
     Mortgage Loans will increase by [*]% per annum. If Borrowers enter into a
     new commitment for the forward sale of Mortgage Loans by Borrowers to
     Lender, in an amount at least equal to $300,000,000, the interest rates
     then in effect for High LTV Mortgage Loans will be reduced by [*]% per
     annum.

4.   Repurchased Mortgage Loan/Nonperforming Mortgage Loan

     (a)  Definitions:

     Repurchased Mortgage Loan: A First Mortgage Loan that has been repurchased
     from an Investor or a Mortgage Pool pursuant to a Servicing Contract and
     for which the Warehousing Advance has been pre-approved by the Lender.

     Nonperforming Mortgage Loan: A First Mortgage Loan or a Second Mortgage
     Loan that is not a High LTV Mortgage Loan and (i) is in the process of
     foreclosure, (ii) is 60 days or more delinquent or (iii) with respect to
     which the Aged Warehousing Period has expired.

     (b)  Interest Rate:                       [*]% over LIBOR

     (c)  Repurchased/Nonperforming Sublimit:  $5,000,000

     (d)  Committed/Uncommitted:               Purchase Commitment NOT required

     (e)  Wet Settlement Advances:             Permitted

     (f)  Aged Mortgage Loans:                 Not Permitted

     (g)  Advance Rate:                        [*]% of the lesser of (i)
                                               Lender's initial Warehousing
                                               Advance, (ii) the unpaid
                                               principal balance or (iii) the
                                               Appraised Property Value or BPO
                                               Value

     (h)  Standard Warehouse Period:           180 days

     (i)  Required Prepayments:                [*]% of the Mortgage Note Amount,
                                               paid each month occurring more
                                               than 90 days after the date of
                                               the Warehousing Advance

                                        5

<PAGE>

                                                                       EXHIBIT I

--------------------------------------------------------------------------------
                       COLLATERAL OPERATIONS FEE SCHEDULE
                                (SINGLE FAMILY)
--------------------------------------------------------------------------------

--------------------------------------------------------------------------------
                                    Loan Fees
--------------------------------------------------------------------------------

--------------------------------------------------------------------------------
Non-Usage Fees                          0.125% per annum of the Unused Portion
                                        during such Calendar Quarter, except
                                        that no Non-Usage Fee will be payable
                                        for any Calendar Quarter in which the
                                        Used Portion equals or exceeds 50%,
                                        computed on the basis of the actual
                                        number of days in each Calendar Quarter
                                        and a year of 360 days.
--------------------------------------------------------------------------------
Loan Package Fee                        $[*]
--------------------------------------------------------------------------------
Wire Fee                                $[*]
--------------------------------------------------------------------------------

*At such time that Borrower implements MERS, the Loan Package Fee will be
reduced to $15.00.

--------------------------------------------------------------------------------
                           Collateral Operations Fees
--------------------------------------------------------------------------------
                                                  $[*] per Reservation Number
          Reservation Number Fee                  (Good funds states only)
--------------------------------------------------------------------------------
     Restocking Fee for Mortgage Loans              $[*] per Mortgage Loan
      Returned to Lender by Investors
--------------------------------------------------------------------------------
             Returned Wire Fee                          $[*] per wire
--------------------------------------------------------------------------------
        Early Payoff Fee (payoff of                 $[*] per Mortgage Loan
       Warehousing Advance prior to
             check clearance)
--------------------------------------------------------------------------------
     Late Fee for Interest or Fees not               $[*] per occurrence
     paid within time period specified
               in Agreement
--------------------------------------------------------------------------------
               Overdraft Fee                         $[*] per occurrence
--------------------------------------------------------------------------------
     Security Pick-up, Delivery and DK               $[*] per transaction
                   Fees
--------------------------------------------------------------------------------

                                     Page 1

<PAGE>

--------------------------------------------------------------------------------
                           Collateral Operations Fees
--------------------------------------------------------------------------------
      Prior Day Bank Reporting Fee:

..    Warehousing Commitments of                      $[*] per month
     up to $50 million

..    Warehousing Commitments of                      $[*] per month
     more than $50 million but
     less than $100 million

..    Warehousing Commitments of                      $[*] per month
     more than $100 million
--------------------------------------------------------------------------------
      Intra-Day Bank Reporting Fee                   $[*] per month
--------------------------------------------------------------------------------

                                     Page 2

<PAGE>

                                                                       EXHIBIT J

--------------------------------------------------------------------------------
                         TERMS OF GUARANTEED OBLIGATIONS
--------------------------------------------------------------------------------

Each Borrower hereby agrees to the following terms with respect to Warehousing
Advances made by the Lender to the other Borrower:

1. Each Borrower irrevocably, unconditionally and absolutely guarantees to the
Lender the due and prompt payment, and not just the collectibility, of the
principal of, and interest, fees and late charges and all other indebtedness, if
any, on the Warehousing Advances made to the other Borrower when due, whether at
maturity, by acceleration or otherwise all at the times and places and at the
rates described in, and otherwise according to the terms of the Note and the
Agreement, whether now existing or hereafter created or arising.

2. Each Borrower further hereby irrevocably, unconditionally and absolutely
guarantees to the Lender the due and prompt performance by the other Borrower of
all duties, agreements and obligations of the other Borrower contained in the
Note and the Agreement, and the due and prompt payment of all costs and expenses
incurred, including, without limitation, attorneys' fees, court costs and all
other litigation expenses (including but not limited to expert witness fees,
exhibit preparation, and courier, postage, communication and document copying
expenses), in enforcing the payment and performance of the Note and the
Agreement from the other Borrower (the payment and performance of the items set
forth in Paragraphs 1 and 2 of this Exhibit J are collectively referred to as
the ("Other Borrower Debt").

3. In the event the other Borrower shall at any time fail to pay the Lender any
Other Borrower Debt when due, whether by acceleration or otherwise, each
Borrower promises to pay such amount to the Lender forthwith, together with all
collection costs and expenses, including, without limitation, attorneys' fees,
court costs and all other litigation expenses (including but not limited to
expert witness fees, exhibit preparation, and courier, postage, communication
and document copying expenses).

4. Each Borrower does hereby (a) agree to any modifications of any terms or
conditions of any Other Borrower Debt and/or to any extensions or renewals of
time of payment or performance by the other Borrower; (b) agree that it shall
not be necessary for the Lender to resort to legal remedies against the other
Borrower, nor to take any action against any other Person obligated (an
"Obligor") on or against any collateral for payment or performance of the Other
Borrower Debt before proceeding against such Borrower; (c) agree that no release
of the other Borrower or any other guarantor or Obligor, or of any collateral,
for the Other Borrower Debt, whether by operation of law or by any act of the
Lender, with or without notice to such Borrower, shall release such Borrower;
and (d) waive notice of demand, dishonor, notice of dishonor, protest, and
notice of protest and waive, to the extent permitted by law, all benefit of
valuation, appraisement, and exemptions under the laws of the state of Minnesota
or any other state or territory of the United States.

5. The obligations of each Borrower for the Other Borrower Debt shall be
primary, absolute and unconditional, and shall remain in full force and effect
without regard to, and shall not be impaired or affected by: (a) the
genuineness, validity, regularity or enforceability of, or any amendment or
change in the Agreement or the Note, or any change in or extension of the
manner, place or terms of payment of, all or any portion of the Other Borrower
Debt; (b) the taking or failure to take any action to enforce the Agreement or
the Note, or the exercise or failure to exercise any remedy, power or privilege
contained therein or available at law or otherwise, or the waiver by the Lender
of any provisions of the Agreement or the Note; (c) any impairment,
modification, change, release or limitation in any manner of the liability of
the other Borrower or its estate in bankruptcy, or of any remedy for the
enforcement of the other Borrower's liability, resulting from the operation of
any

                                       1

<PAGE>

present or future provision of the bankruptcy laws or any other statute or
regulation, or the dissolution, bankruptcy, insolvency, or reorganization of the
other Borrower; (d) the merger or consolidation of the other Borrower, or any
sale or transfer by the other Borrower of all or part of its assets or property;
(e) any claim such Borrower may have against the other Borrower or any other
Obligor, including any claim of contribution; (f) the release, in whole or in
part, of any other guarantor (if more than one), the other Borrower or any other
Obligor; (g) any other action or circumstance which (with or without notice to
or knowledge of such Borrower) might in any manner or to any extent vary the
risks of such Borrower or otherwise constitute a legal or equitable discharge or
defense, it being understood and agreed by each Borrower that its obligations
for the Other Borrower Debt shall not be discharged except by the full payment
and performance of the Other Borrower Debt.

6. The Lender shall have the right to determine how, when and what application
of payments and credits, if any, whether derived from either Borrower or from
any other source, shall be made on the Obligations and any other indebtedness
owed by either Borrower and/or any other Obligor to the Lender.

7. The obligations of each Borrower hereunder shall continue to be effective, or
be automatically reinstated, as the case may be, if at any time the performance
or the payment, as the case may be, in whole or in part, of any of the Other
Borrower Debt is rescinded or must otherwise be restored or returned by the
Lender (as a preference, fraudulent conveyance or otherwise) upon the
insolvency, bankruptcy, dissolution, liquidation or reorganization of either
Borrower or any other person or upon or as a result of the appointment of a
custodian, receiver, trustee or other officer with similar powers with respect
to either Borrower or any other Person, or any substantial part of its property,
or otherwise, all as though such payments had not been made. If an Event of
Default shall at any time have occurred and be continuing or shall exist and
declaration of default or acceleration under or with respect to the Other
Borrower Debt shall at such time be prevented by reason of the pendency against
either Borrower or any other Person of a case or proceeding under a bankruptcy
or insolvency law, each Borrower agrees that its obligations for the Other
Borrower Debt shall be deemed to have been declared in default or accelerated
with the same effect as if such obligations had been declared in default and
accelerated in accordance with their respective terms and each Borrower shall
forthwith perform or pay, as the case may be, as required hereunder in
accordance with the terms hereunder without further notice or demand.

8. Each Borrower hereby irrevocably waives any claim or other rights that he may
now or hereafter acquire against other Borrower that arises from the existence,
payment, performance or enforcement of such Borrower's obligations for the Other
Borrower Debt, including any right of subrogation, reimbursement, exoneration or
indemnification, any right to participate in any claim or remedy of the Lender
against the other Borrower or any collateral that the Lender now has or
hereafter acquires, whether or not such claim, remedy or right arises in equity
or under contract, statute or common law, including the right to take or receive
from the other Borrower directly or indirectly, in cash or other property or by
set-off or in any manner, payment or security on account of such claim or other
rights. If any amount shall be paid to either Borrower in violation of the
preceding sentence and the Other Borrower Debt shall not have been paid and
performed in full, such amount shall be deemed to have been paid to such
Borrower for the benefit of, and held in trust for, the Lender and shall
forthwith be paid to the Lender to be credited and applied to the Other Borrower
Debt, whether matured or unmatured. Notwithstanding the blanket waiver of
subrogation rights as set forth above, each Borrower hereby specifically
acknowledges that any subrogation rights which it may have against the other
Borrower or any collateral that the Lender now has or hereafter acquires may be
destroyed by a nonjudicial foreclosure of the collateral. This may give such
Borrower a defense to a deficiency judgment against it. Such Borrower hereby
irrevocably waives such defense. Each Borrower acknowledges that it will receive
direct and indirect benefits from the arrangements contemplated by the Agreement
and the Note and that the waivers set forth in this Section are knowingly made
in contemplation of such benefits.

9. No postponement or delay on the part of the Lender in the enforcement of any
right with respect to the Obligations of either Borrower, including, without
limitation, the Other Borrower

                                       2

<PAGE>

Debt, shall constitute a waiver of such right and all rights of the Lender
hereunder shall be cumulative and not alternative and shall be in addition to
any other rights granted to the Lender in any other agreement or by law.

10. Any indebtedness of either Borrower now or hereafter held by the other
Borrower is hereby subordinated to the indebtedness of the Borrowers to the
Lender, and such indebtedness of either Borrower to the other Borrower shall, if
the Lender so requests, be collected, enforced and received by the Borrower to
which it is owed as trustee for the Lender and be paid over to the Lender on
account of the indebtedness of the other Borrower to the Lender.

                                       3Registration Rights Agreement

 EXHIBIT 10.1 
  
 REGISTRATION RIGHTS AGREEMENT 
  

This Registration Rights Agreement (this “Agreement”) is made and entered into as of April 23, 2004, by and among AirNet
Communications Corporation, a Delaware corporation (the “Company”), and the investors signatory hereto (each an “Investor” and collectively, the “Investors”). 
  
 This Agreement is made pursuant to the Securities Purchase Agreement, dated
as of the date hereof among the Company and the Investors (the “Purchase Agreement”). 
  
 The Company and the Investors hereby agree as follows: 
  
 1. Definitions. Capitalized terms used and not otherwise defined herein that are defined in the Purchase Agreement will have the meanings given
such terms in the Purchase Agreement. As used in this Agreement, the following terms have the respective meanings set forth in this Section 1: 
  
 “Effective Date” means the date that the initial Registration Statement filed pursuant to Section 2(a) is first declared effective by the
Commission. 
  
 “Effectiveness Date” (a) with
respect to the initial Registration Statement required to be filed under Section 2(a), the earlier of: (a)(i) the 90th day following the Closing Date; provided, that, if the Commission reviews and has written comments to the filed Registration Statement that would require the filing of a pre-effective amendment thereto with the Commission,
then the Effectiveness Date under this clause (a)(i) shall be the 120th day following the Closing Date, and (ii) the
fifth Trading Day following the date on which the Company is notified by the Commission that the initial Registration Statement will not be reviewed or is no longer subject to further review and comments, and (b) with respect to any additional
Registration Statements that may be required pursuant to Section 2(b), the earlier of (i) the 90th day following (x)
if such Registration Statement is required because the Commission shall have notified the Company in writing that certain Registrable Securities were not eligible for inclusion on a previously filed Registration Statement, the date or time on which
the Commission shall indicate as being the first date or time that such Registrable Securities may then be included in a Registration Statement, or (y) if such Registration Statement is required for a reason other than as described in (x) above, the
date on which the Company first knows, or reasonably should have known, that such additional Registration Statement(s) is required; provided, that, if the Commission reviews and has written comments to such filed Registration Statement that
would require the filing of a pre-effective amendment thereto with the Commission, then the Effectiveness Date under this clause (b)(i) shall be the 120th day following the date that the Company first knows, or reasonably should have known, that such additional Registration Statement is required under such Section and (ii) the fifth Trading Day
following the date on which the Company is notified by the Commission that such additional Registration Statement will not be reviewed or is no longer subject to further review and comments; provided, that in any case above in which a reference is
made to the fifth Trading Day following the date on which the Company is notified by the Commission that any Registration Statement will not be reviewed or is no longer subject to further review and comments, no Event shall be deemed to 

 

 1 

 have occurred under Section 2(c) hereof so long as the Company reasonably determines, after consultation with legal
counsel, that a pre-effective amendment to the Registration Statement would be necessary or desirable to reflect additional or supplemental financial information which was not reflected in the Registration Statement as filed (including, without
limitation, any information included in a Quarterly Report on Form 10-Q or other periodic or current report filed with the Commission subsequent to the original filing of the Registration Statement), so long as such amendment is filed, and the
Registration Statement declared effective, by the period required in (a)(i) or (b)(i) hereof, as the case may be. 
  
 “Effectiveness Period” has the meaning set forth in Section 2(a). 
  
 “Exchange Act” means the Securities Exchange Act of 1934, as amended. 
  
 “Filing Date” means: (a) with respect to the initial
Registration Statement required to be filed under Section 2(a), the 30th day following the Closing Date, and (b)
with respect to any additional Registration Statements that may be required pursuant to Section 2(b), the 30th day
following (x) if such Registration Statement is required because the Commission shall have notified the Company in writing that certain Registrable Securities were not eligible for inclusion on a previously filed Registration Statement, the date or
time on which the Commission shall indicate as being the first date or time that such Registrable Securities may then be included in a Registration Statement, or (y) if such Registration Statement is required for a reason other than as described in
(x) above, the date on which the Company first knows, or reasonably should have known, that such additional Registration Statement(s) is required. 
  
 “Holder” or “Holders” means the holder or holders, as the case may be, from time to time of Registrable
Securities. 
  
 “Indemnified Party” has
the meaning set forth in Section 5(c). 
  
 “Indemnifying
Party” has the meaning set forth in Section 5(c). 
  
 “Losses” has the meaning set forth in Section 5(a). 
  
 “New York Courts” means the state and federal courts sitting in the City of New York, Borough of Manhattan. 
  
 “Proceeding” means an action, claim, suit, investigation or proceeding (including, without limitation, an investigation or partial
proceeding, such as a deposition), whether commenced or threatened. 
  
 “Prospectus” means the prospectus included in a Registration Statement (including, without limitation, a prospectus that includes any information previously omitted from a prospectus filed as part of an effective
registration statement in reliance upon Rule 430A promulgated under the Securities Act), as amended or supplemented by any prospectus supplement, with respect to the terms of the offering of any portion of the Registrable Securities covered by a
Registration Statement, and all other amendments and supplements to the Prospectus, including post-effective amendments, and all material incorporated by reference or deemed to be incorporated by reference in such Prospectus. 
  

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 “Registrable Securities” means: (i) the Shares issued pursuant to the Purchase Agreement
and (ii) the Warrant Shares, together with any securities issued or issuable upon any stock split, dividend or other distribution, recapitalization or similar event, or any conversion price adjustment with respect to any of the securities referenced
in (i) - (ii) above. 
  
 “Registration Statement”
means each of the following: (i) the initial registration statement required under Section 2(a), and (ii) each additional registration statement that may be required to be filed under Section 2(c), and including, in each case, the Prospectus,
amendments and supplements to each such registration statement or Prospectus, including pre- and post-effective amendments, all exhibits thereto, and all material incorporated by reference or deemed to be incorporated by reference in such
registration statement. 
  
 “Rule 144” means Rule
144 promulgated by the Commission pursuant to the Securities Act, as such Rule may be amended from time to time, or any similar rule or regulation hereafter adopted by the Commission having substantially the same effect as such Rule. 
  
 “Rule 415” means Rule 415 promulgated by the Commission
pursuant to the Securities Act, as such Rule may be amended from time to time, or any similar rule or regulation hereafter adopted by the Commission having substantially the same effect as such Rule. 
  
 “Rule 424” means Rule 424 promulgated by the Commission
pursuant to the Securities Act, as such Rule may be amended from time to time, or any similar rule or regulation hereafter adopted by the Commission having substantially the same effect as such Rule. 
  
 “Securities Act” means the Securities Act of 1933, as
amended. 
  
 “Shares” has the meaning set forth
in the Purchase Agreement. 
  
 “Warrant Shares”
has the meaning set forth in the Purchase Agreement. 
  
 2.
Registration. 
  
 (a) On or prior to each Filing Date, the
Company shall prepare and file with the Commission a Registration Statement covering the resale of all Registrable Securities not already covered by an existing and effective Registration Statement for an offering to be made on a continuous basis
pursuant to Rule 415. The Registration Statement shall be on Form S-3 (except if the Company is not then eligible to register for resale the Registrable Securities on Form S-3, in which case such registration shall be on another appropriate form for
such purpose) and shall contain (except if otherwise required pursuant to written comments received from the Commission upon a review of such Registration Statement) the “Plan of Distribution” attached hereto as Annex A. The Company
shall cause such Registration Statement to be declared effective under the Securities Act as soon as possible but, in any event, no later than its Effectiveness Date, and shall use its best efforts to keep such Registration Statement continuously
effective under the Securities Act until the date which is two years after the Closing Date or such earlier date when all Registrable Securities covered by such Registration Statement have been publicly sold or may be sold without volume
restrictions pursuant to Rule 144(k) as determined by the counsel to the Company pursuant to a written opinion letter to such effect, addressed and acceptable to the Company’s transfer agent and the affected Holders (the “Effectiveness
Period”). 
  

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 (b) If for any reason the Commission does not permit all of the Registrable Securities to be included in
the Registration Statement filed pursuant to Section 2(a), or for any reason any outstanding Registrable Securities are not then covered by an effective Registration Statement, then the Company shall prepare and file by the Filing Date for such
Registration Statement, an additional Registration Statement covering the resale of all Registrable Securities not already covered by an existing and effective Registration Statement for an offering to be made on a continuous basis pursuant to Rule
415, on Form S-3 (except if the Company is not then eligible to register for resale the Registrable Securities on Form S-3, in which case such registration shall be on another appropriate form for such purpose). Each such Registration Statement
shall contain (except if otherwise required pursuant to written comments received from the Commission upon a review of such Registration Statement) the “Plan of Distribution” attached hereto as Annex A. The Company shall cause each
such Registration Statement to be declared effective under the Securities Act as soon as possible but, in any event, by its Effectiveness Date, and shall use its best efforts to keep such Registration Statement continuously effective under the
Securities Act during the entire Effectiveness Period. 
  
 (c) If:
(i) a Registration Statement is not filed on or prior to its Filing Date (if the Company files a Registration Statement without affording the Holders the opportunity to review and comment on the same as required by Section 3(a) hereof, the Company
shall not be deemed to have satisfied this clause (i)), or (ii) a Registration Statement filed or required to be filed hereunder is not declared effective by the Commission on or before its Effectiveness Date, or (iii) during the Effectiveness
Period, a Registration Statement ceases for any reason to remain continuously effective as to all Registrable Securities for which it is required to be effective, or the Holders are not permitted to utilize the Prospectus therein to resell such
Registrable Securities, for in any and all such cases for more than an aggregate of 20 Trading Days during such Effectiveness Period (which need not be consecutive Trading Days) (any such failure or breach being referred to as an
“Event,” and for purposes of clause (i) or (ii) the date on which such Event occurs, or for purposes of clause (iii) the date on which such 20 Trading Days is exceeded being referred to as “Event Date”), then in
addition to any other rights the Holders may have hereunder or under applicable law: (x) on each such Event Date the Company shall pay to each Holder an amount in cash, as partial liquidated damages and not as a penalty, equal to 1.5% of the
aggregate Investment Amount paid by such Holder pursuant to the Purchase Agreement; and (y) on each monthly anniversary of each such Event Date (if the applicable Event shall not have been cured by such date) until the applicable Event is cured, the
Company shall pay to each Holder an amount in cash, as partial liquidated damages and not as a penalty, equal to 1.5% of the aggregate Investment Amount paid by such Holder pursuant to the Purchase Agreement; provided, that if an Event shall
have occurred and be continuing after the 180th day following the Closing Date, the liquidated damages described
above shall be calculated by substituting 2.0% in place of 1.5%; and provided further, that no more than one Event shall be deemed to have occurred and not to have been cured at any time, and such payments shall not be cumulative, so that no
more than one payment under the foregoing clauses shall be due in any month to any one Holder (except for amounts owing on account of prior periods). If the Company fails to pay any partial liquidated damages pursuant to this Section in full within
seven days after the date payable, the Company will pay interest thereon at a rate of 10% per annum (or 
  

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 such lesser maximum amount that is permitted to be paid by applicable law) to the Holder, accruing daily from the date
such partial liquidated damages are due until such amounts, plus all such interest thereon, are paid in full. The partial liquidated damages pursuant to the terms hereof shall apply on a daily pro-rata basis for any portion of a month prior to the
cure of an Event, except in the case of the first Event Date. 
  
 (d) Each Holder agrees to furnish to the Company a completed Questionnaire in the form attached to this Agreement as Annex B (a “Selling Holder Questionnaire”). The Company shall not be required to include the
Registrable Securities of a Holder in a Registration Statement and shall not be required to pay any liquidated or other damages under Section 2(c) hereof to such Holder who fails to furnish to the Company a fully completed Selling Holder
Questionnaire at least two Trading Days prior to the Filing Date (subject to the requirements set forth in Section 3(a)). 
  
 3. Registration Procedures 
  
 In connection with the Company’s registration obligations hereunder, the Company shall: 
  
 (a) Not less than four Trading Days prior to the filing of a Registration
Statement or any related Prospectus or any amendment or supplement thereto, the Company shall furnish to each Holder copies of the “Selling Stockholders” section of such document, the “Plan of Distribution” and any risk factor
contained in such document that addresses specifically this transaction or the Selling Stockholders, as proposed to be filed which documents will be subject to the review of such Holder. The Company shall not file a Registration Statement or any
such Prospectus or any amendments or supplements thereto that does not contain disclosure naming such Holder as a “Selling Stockholder” as provided to the Company by such Holder in connection therewith. 
  
 (b) (i) Prepare and file with the Commission such amendments, including
post-effective amendments, to each Registration Statement and the Prospectus used in connection therewith as may be necessary to keep such Registration Statement continuously effective as to the applicable Registrable Securities for its
Effectiveness Period and prepare and file with the Commission such additional Registration Statements in order to register for resale under the Securities Act all of the Registrable Securities; (ii) cause the related Prospectus to be amended or
supplemented by any required Prospectus supplement, and as so supplemented or amended to be filed pursuant to Rule 424; (iii) respond as promptly as reasonably possible to any comments received from the Commission with respect to each Registration
Statement or any amendment thereto and, as promptly as reasonably possible provide the Holders true and complete copies of all correspondence from and to the Commission relating to such Registration Statement that would not result in the disclosure
to the Holders of material and non-public information concerning the Company; and (iv) comply in all material respects with the provisions of the Securities Act and the Exchange Act with respect to the Registration Statements and the disposition of
all Registrable Securities covered by each Registration Statement. 
  

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 (c) Notify the Holders as promptly as reasonably possible (and, in the case of (i)(A) below, not less
than three Trading Days prior to such filing) and (if requested by any such Person) confirm such notice in writing no later than one Trading Day following the day (i)(A) when a Prospectus or any Prospectus supplement or post-effective amendment to a
Registration Statement is proposed to be filed; (B) when the Commission notifies the Company whether there will be a “review” of such Registration Statement and whenever the Commission comments in writing on such Registration Statement
(the Company shall provide true and complete copies thereof and all written responses thereto to each of the Holders that pertain to the Holders as a Selling Stockholder or to the Plan of Distribution, but not information which the Company believes
would constitute material and non-public information); and (C) with respect to each Registration Statement or any post-effective amendment, when the same has become effective; (ii) of any request by the Commission or any other Federal or state
governmental authority for amendments or supplements to a Registration Statement or Prospectus or for additional information; (iii) of the issuance by the Commission of any stop order suspending the effectiveness of a Registration Statement covering
any or all of the Registrable Securities or the initiation of any Proceedings for that purpose; (iv) of the receipt by the Company of any notification with respect to the suspension of the qualification or exemption from qualification of any of the
Registrable Securities for sale in any jurisdiction, or the initiation or threatening of any Proceeding for such purpose; and (v) of the occurrence of any event or passage of time that makes the financial statements included in a Registration
Statement ineligible for inclusion therein or any statement made in such Registration Statement or Prospectus or any document incorporated or deemed to be incorporated therein by reference untrue in any material respect or that requires any
revisions to such Registration Statement, Prospectus or other documents so that, in the case of such Registration Statement or the Prospectus, as the case may be, it will not contain any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading. 
  
 (d) Use its best efforts to avoid the issuance of, or, if issued, obtain the withdrawal of (i) any order suspending the
effectiveness of a Registration Statement, or (ii) any suspension of the qualification (or exemption from qualification) of any of the Registrable Securities for sale in any jurisdiction, at the earliest practicable moment. 
  
 (e) Furnish to each Holder, without charge, at least one conformed copy of
each Registration Statement and each amendment thereto and all exhibits to the extent requested by such Person (including those previously furnished) promptly after the filing of such documents with the Commission. 
  
 (f) Promptly deliver to each Holder, without charge, as many copies of each
Prospectus or Prospectuses (including each form of prospectus) and each amendment or supplement thereto as such Persons may reasonably request. The Company hereby consents to the use of such Prospectus and each amendment or supplement thereto by
each of the selling Holders in connection with the offering and sale of the Registrable Securities covered by such Prospectus and any amendment or supplement thereto. 
  
 (g) Prior to any public offering of Registrable Securities, to register or qualify or cooperate with the selling Holders in
connection with the registration or qualification (or 
  

 - 6 - 

 exemption from such registration or qualification) of such Registrable Securities for offer and sale under the securities
or Blue Sky laws of all jurisdictions within the United States, to keep each such registration or qualification (or exemption therefrom) effective during the Effectiveness Period and to do any and all other acts or things necessary or advisable to
enable the disposition in such jurisdictions of the Registrable Securities covered by the Registration Statements. 
  
 (h) Cooperate with the Holders to facilitate the timely preparation and delivery of certificates representing Registrable Securities to be delivered to a
transferee pursuant to the Registration Statements, which certificates shall be free, to the extent permitted by the Purchase Agreement, of all restrictive legends, and to enable such Registrable Securities to be in such denominations and registered
in such names as any such Holders may request. 
  
 (i) Upon the
occurrence of any event contemplated by Section 3(c)(v), as promptly as reasonably possible, prepare a supplement or amendment, including a post-effective amendment, to the affected Registration Statements or a supplement to the related Prospectus
or any document incorporated or deemed to be incorporated therein by reference, and file any other required document so that, as thereafter delivered, no Registration Statement nor any Prospectus will contain an untrue statement of a material fact
or omit to state a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading. 
  
 4. Registration Expenses. All fees and expenses incident to the Company’s performance of its obligation under
this Agreement (excluding any underwriting discounts and selling commissions and all legal fees and expenses of legal counsel for any Holder) shall be borne by the Company whether or not any Registrable Securities are sold pursuant to a Registration
Statement. The fees and expenses referred to in the foregoing sentence shall include, without limitation, (i) all registration and filing fees (including, without limitation, fees and expenses (A) with respect to filings required to be made with the
Trading Market on which the Common Stock is then listed for trading, and (B) in compliance with applicable state securities or Blue Sky laws), (ii) printing expenses (including, without limitation, expenses of printing certificates for Registrable
Securities and of printing prospectuses if the printing of prospectuses is reasonably requested by the holders of a majority of the Registrable Securities included in the Registration Statement), (iii) messenger, telephone and delivery expenses,
(iv) fees and disbursements of counsel for the Company, (v) Securities Act liability insurance, if the Company so desires such insurance, and (vi) fees and expenses of all other Persons retained by the Company in connection with the consummation of
the transactions contemplated by this Agreement. In addition, the Company shall be responsible for all of its internal expenses incurred in connection with the consummation of the transactions contemplated by this Agreement (including, without
limitation, all salaries and expenses of its officers and employees performing legal or accounting duties), the expense of any annual audit and the fees and expenses incurred in connection with the listing of the Registrable Securities on any
securities exchange as required hereunder. 
  

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 5. Indemnification. 
  
 (a) Indemnification by the Company. The Company shall, notwithstanding any termination of this Agreement, indemnify
and hold harmless each Holder, the officers, directors, agents, investment advisors, partners, members, shareholders and employees of each of them, each Person who controls any such Holder (within the meaning of Section 15 of the Securities Act or
Section 20 of the Exchange Act) and the officers, directors, agents and employees of each such controlling Person, to the fullest extent permitted by applicable law, from and against any and all losses, claims, damages, liabilities, costs
(including, without limitation, reasonable costs of preparation and reasonable attorneys’ fees) and expenses (collectively, “Losses”), as incurred, arising out of or relating to any untrue or alleged untrue statement of a
material fact contained in any Registration Statement, any Prospectus or any form of prospectus or in any amendment or supplement thereto or in any preliminary prospectus, or arising out of or relating to any omission or alleged omission of a
material fact required to be stated therein or necessary to make the statements therein (in the case of any Prospectus or form of prospectus or supplement thereto, in light of the circumstances under which they were made) not misleading, except to
the extent, but only to the extent, that (1) such untrue statements or omissions are based solely upon information regarding such Holder furnished in writing to the Company by such Holder expressly for use therein (it being understood that each
Holder which provides the Notice and Questionnaire in the form attached as Annex B hereto is providing it for such purpose), or to the extent that such information relates to such Holder or such Holder’s proposed method of distribution of
Registrable Securities and was reviewed and expressly approved in writing by such Holder expressly for use in the Registration Statement, such Prospectus or such form of Prospectus or in any amendment or supplement thereto (it being understood that
the Holder has approved Annex A hereto for this purpose) or (2) in the case of an occurrence of an event of the type specified in Section 3(c)(ii)-(v), the use by such Holder of any preliminary prospectus or an outdated or defective Prospectus after
the Company has notified such Holder in writing that the Prospectus is outdated or defective and prior to the receipt by such Holder of a final Prospectus or (in the case of an outdated or defective Prospectus) an Advice or an amended or
supplemented Prospectus, but only if and to the extent that following the receipt of the final Prospectus or the Advice or the amended or supplemented Prospectus the misstatement or omission giving rise to such Loss would have been corrected. The
Company shall notify the Holders promptly of the institution, threat or assertion of any Proceeding of which the Company is aware in connection with the transactions contemplated by this Agreement. 
  
 (b) Indemnification by Holders. Each Holder shall, notwithstanding any
termination of this Agreement, severally and not jointly, indemnify and hold harmless the Company, its directors, officers, agents and employees, each Person who controls the Company (within the meaning of Section 15 of the Securities Act and
Section 20 of the Exchange Act), and the directors, officers, agents or employees of such controlling Persons, to the fullest extent permitted by applicable law, from and against all Losses, as incurred, arising solely out of or based solely upon:
(x) such Holder’s failure to comply with the prospectus delivery requirements of the Securities Act or (y) any untrue statement of a material fact contained in any Registration Statement, any Prospectus, or any form of prospectus, or in any
amendment or supplement thereto, or any preliminary prospectus, or arising solely out of or based solely upon any omission of a material fact required to be stated therein or necessary to make the statements therein not misleading to the extent, but
only to the extent that, (1) such untrue statements or omissions are based solely upon information regarding such Holder furnished in writing to the Company by 
  

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 such Holder expressly for use therein, or to the extent that such information relates to such Holder or such
Holder’s proposed method of distribution of Registrable Securities and was reviewed and expressly approved in writing by such Holder expressly for use in the Registration Statement (it being understood that the Holder has approved Annex A
hereto for this purpose and each Holder which provides the Notice and Questionnaire in the form attached as Annex B hereto is providing it for this purpose), such Prospectus or such form of Prospectus or in any amendment or supplement thereto or (2)
in the case of an occurrence of an event of the type specified in Section 3(c)(ii)-(v), the use by such Holder of an outdated or defective Prospectus after the Company has notified such Holder in writing that the Prospectus is outdated or defective
and prior to the receipt by such Holder of an Advice or an amended or supplemented Prospectus, but only if and to the extent that following the receipt of the Advice or the amended or supplemented Prospectus the misstatement or omission giving rise
to such Loss would have been corrected. In no event shall the liability of any selling Holder hereunder be greater in amount than the dollar amount of the net proceeds received by such Holder upon the sale of the Registrable Securities giving rise
to such indemnification obligation. 
  
 (c) Conduct of
Indemnification Proceedings. If any Proceeding shall be brought or asserted against any Person entitled to indemnity hereunder (an “Indemnified Party”), such Indemnified Party shall promptly notify the Person from whom indemnity
is sought (the “Indemnifying Party”) in writing, and the Indemnifying Party shall assume the defense thereof, including the employment of counsel reasonably satisfactory to the Indemnified Party and the payment of all fees and
expenses incurred in connection with defense thereof; provided, that the failure of any Indemnified Party to give such notice shall not relieve the Indemnifying Party of its obligations or liabilities pursuant to this Agreement, except (and only) to
the extent that it shall be finally determined by a court of competent jurisdiction (which determination is not subject to appeal or further review) that such failure shall have proximately and materially adversely prejudiced the Indemnifying Party.

  
 An Indemnified Party shall have the right to employ separate
counsel in any such Proceeding and to participate in the defense thereof, but the fees and expenses of such counsel shall be at the expense of such Indemnified Party or Parties unless: (1) the Indemnifying Party has agreed in writing to pay such
fees and expenses; (2) the Indemnifying Party shall have failed promptly to assume the defense of such Proceeding and to employ counsel reasonably satisfactory to such Indemnified Party in any such Proceeding; or (3) the named parties to any such
Proceeding (including any impleaded parties) include both such Indemnified Party and the Indemnifying Party, and such Indemnified Party shall have been advised by counsel that a conflict of interest is likely to exist if the same counsel were to
represent such Indemnified Party and the Indemnifying Party (in which case, if such Indemnified Party notifies the Indemnifying Party in writing that it elects to employ separate counsel at the expense of the Indemnifying Party, the Indemnifying
Party shall not have the right to assume the defense thereof and such counsel shall be at the expense of the Indemnifying Party). The Indemnifying Party shall not be liable for any settlement of any such Proceeding effected without its written
consent, which consent shall not be unreasonably withheld. No Indemnifying Party shall, without the prior written consent of the Indemnified Party, effect any settlement of any pending Proceeding in respect of which any Indemnified Party is a party,
unless such settlement includes an unconditional release of such Indemnified Party from all liability on claims that are the subject matter of such Proceeding. 
  

 - 9 - 

 All fees and expenses of the Indemnified Party (including reasonable fees and expenses to the extent
incurred in connection with investigating or preparing to defend such Proceeding in a manner not inconsistent with this Section) shall be paid to the Indemnified Party, as incurred, within ten Trading Days of written notice thereof to the
Indemnifying Party (regardless of whether it is ultimately determined that an Indemnified Party is not entitled to indemnification hereunder; provided, that the Indemnifying Party may require such Indemnified Party to undertake to reimburse all such
fees and expenses to the extent it is finally judicially determined that such Indemnified Party is not entitled to indemnification hereunder). 
  
 (d) Contribution. If a claim for indemnification under Section 5(a) or 5(b) is unavailable to an Indemnified Party (by reason of public policy or
otherwise), then each Indemnifying Party, in lieu of indemnifying such Indemnified Party, shall contribute to the amount paid or payable by such Indemnified Party as a result of such Losses, in such proportion as is appropriate to reflect the
relative fault of the Indemnifying Party and Indemnified Party in connection with the actions, statements or omissions that resulted in such Losses as well as any other relevant equitable considerations. The relative fault of such Indemnifying Party
and Indemnified Party shall be determined by reference to, among other things, whether any action in question, including any untrue or alleged untrue statement of a material fact or omission or alleged omission of a material fact, has been taken or
made by, or relates to information supplied by, such Indemnifying Party or Indemnified Party, and the parties’ relative intent, knowledge, access to information and opportunity to correct or prevent such action, statement or omission. The
amount paid or payable by a party as a result of any Losses shall be deemed to include, subject to the limitations set forth in Section 5(c), any reasonable attorneys’ or other reasonable fees or expenses incurred by such party in connection
with any Proceeding to the extent such party would have been indemnified for such fees or expenses if the indemnification provided for in this Section was available to such party in accordance with its terms. 
  
 The parties hereto agree that it would not be just and equitable if
contribution pursuant to this Section 5(d) were determined by pro rata allocation or by any other method of allocation that does not take into account the equitable considerations referred to in the immediately preceding paragraph. Notwithstanding
the provisions of this Section 5(d), no Holder shall be required to contribute, in the aggregate, any amount in excess of the amount by which the proceeds actually received by such Holder from the sale of the Registrable Securities subject to the
Proceeding exceeds the amount of any damages that such Holder has otherwise been required to pay by reason of such untrue or alleged untrue statement or omission or alleged omission. 
  
 The indemnity and contribution agreements contained in this Section are in addition to any liability that the Indemnifying
Parties may have to the Indemnified Parties. 
  
 6.
Miscellaneous 
  
 (a) Remedies. In the event of a
breach by the Company or by a Holder, of any of their obligations under this Agreement, each Holder or the Company, as the case may be, in addition to being entitled to exercise all rights granted by law and under this Agreement, including recovery
of damages, will be entitled to specific performance of its rights under this Agreement. The Company and each Holder agree that monetary damages would not provide 
  

 - 10 - 

 adequate compensation for any losses incurred by reason of a breach by it of any of the provisions of this Agreement and
hereby further agrees that, in the event of any action for specific performance in respect of such breach, it shall waive the defense that a remedy at law would be adequate. 
  
 (b) No Piggyback on Registrations. Except as and to the extent specified in Schedule 3.1(v) to the Purchase
Agreement, neither the Company nor any of its security holders (other than the Holders in such capacity pursuant hereto) may include securities of the Company in a Registration Statement other than the Registrable Securities, and the Company shall
not enter into any agreement providing any such right to any of its security holders. 
  
 (c) Compliance. Each Holder covenants and agrees that it will comply with the prospectus delivery requirements of the Securities Act as applicable to it in connection with sales of Registrable Securities
pursuant to the Registration Statement. 
  
 (d) Discontinued
Disposition. Each Holder agrees by its acquisition of such Registrable Securities that, upon receipt of a notice from the Company of the occurrence of any event of the kind described in Section 3(c), such Holder will forthwith discontinue
disposition of such Registrable Securities under the Registration Statement until such Holder’s receipt of the copies of the supplemented Prospectus and/or amended Registration Statement or until it is advised in writing (the
“Advice”) by the Company that the use of the applicable Prospectus may be resumed, and, in either case, has received copies of any additional or supplemental filings that are incorporated or deemed to be incorporated by reference in
such Prospectus or Registration Statement. The Company may provide appropriate stop orders to enforce the provisions of this paragraph. 
  
 (e) Piggy-Back Registrations. If at any time during the Effectiveness Period there is not an effective Registration Statement covering all of the
Registrable Securities and the Company shall determine to prepare and file with the Commission a registration statement relating to an offering for its own account or the account of others under the Securities Act of any of its equity securities,
other than on Form S-4 or Form S-8 (each as promulgated under the Securities Act) or their then equivalents relating to equity securities to be issued solely in connection with any acquisition of any entity or business or equity securities issuable
in connection with stock option or other employee benefit plans, then the Company shall send to each Holder written notice of such determination and, if within fifteen days after receipt of such notice, any such Holder shall so request in writing,
the Company shall include in such registration statement all or any part of such Registrable Securities such holder requests to be registered, subject to customary underwriter cutbacks applicable to all holders of registration rights. 
  
 (f) Amendments and Waivers. The provisions of this Agreement,
including the provisions of this sentence, may not be amended, modified or supplemented, and waivers or consents to departures from the provisions hereof may not be given, unless the same shall be in writing and signed by the Company and the Holder
or Holders (as applicable) of no less than a majority in interest of the then outstanding Registrable Securities. Notwithstanding the foregoing, a waiver or consent to depart from the provisions hereof with respect to a matter that relates
exclusively to the rights of certain Holders and that does not directly or indirectly affect 
  

 - 11 - 

 the rights of other Holders may be given by Holders of at least a majority of the Registrable Securities to which such
waiver or consent relates, provided, that the provisions of this sentence may not be amended, modified, or supplemented except in accordance with the provisions of the immediately preceding sentence. 
  
 (g) Notices. Any and all notices or other communications or deliveries
required or permitted to be provided hereunder shall be in writing and shall be deemed given and effective on the earliest of (a) the date of transmission, if such notice or communication is delivered via facsimile (provided the sender receives a
machine-generated confirmation of successful transmission) at the facsimile number specified in this Section prior to 6:30 p.m. (New York City time) on a Trading Day, (b) the next Trading Day after the date of transmission, if such notice or
communication is delivered via facsimile at the facsimile number specified in this Section on a day that is not a Trading Day or later than 6:30 p.m. (New York City time) on any Trading Day, (c) the Trading Day following the date of mailing, if sent
by U.S. nationally recognized overnight courier service, or (d) upon actual receipt by the party to whom such notice is required to be given. The address for such notices and communications shall be as follows: 
  

			
	If to the Company:	  	AirNet Communications Corporation
	 	  	3950 Dow Road
	 	  	Melbourne, Florida 32934
	 	  	Attn: Chief Financial Officer and General Counsel
	 	  	Facsimile: (321) 676-9914
		
	With a copy to:	  	John G. Igoe, Esq.
	 	  	Edwards & Angell, LLP
	 	  	One North Clematis St., Suite 400
	 	  	West Palm Beach, Florida 33401
	 	  	Facsimile: (561) 655-8719

  

			
	If to an Investor:	    	To the address for notices to such Investor under the Purchase Agreement.
	
	If to any other Person who is then the registered Holder:
		
	 	    	To the address of such Holder as it appears in the stock transfer books of the Company

  
 or such other address as may be
designated in writing hereafter, in the same manner, by such Person. 
  
 (h) Successors and Assigns. This Agreement shall inure to the benefit of and be binding upon the successors and permitted assigns of each of the parties and shall inure to the benefit of each Holder. The Company may not assign its
rights or obligations hereunder without the prior written consent of each Holder. Each Holder may assign their respective rights hereunder in the manner and to the Persons as permitted under the Purchase Agreement. 
  
 (i) Execution and Counterparts. This Agreement may be executed in any
number of counterparts, each of which when so executed shall be deemed to be an original and, 
  

 -12 - 

 all of which taken together shall constitute one and the same Agreement. In the event that any signature is delivered by
facsimile transmission, such signature shall create a valid binding obligation of the party executing (or on whose behalf such signature is executed) the same with the same force and effect as if such facsimile signature were the original thereof.

  
 (j) Governing Law. All questions concerning the
construction, validity, enforcement and interpretation of this Agreement shall be governed by and construed and enforced in accordance with the internal laws of the State of New York, without regard to the principles of conflicts of law thereof.
Each party agrees that all Proceedings concerning the interpretations, enforcement and defense of the transactions contemplated by this Agreement (whether brought against a party hereto or its respective Affiliates, employees or agents) will be
commenced in the New York Courts. Each party hereto hereby irrevocably submits to the exclusive jurisdiction of the New York Courts for the adjudication of any dispute hereunder or in connection herewith or with any transaction contemplated hereby
or discussed herein, and hereby irrevocably waives, and agrees not to assert in any Proceeding, any claim that it is not personally subject to the jurisdiction of any New York Court, or that such Proceeding has been commenced in an improper or
inconvenient forum. Each party hereto hereby irrevocably waives personal service of process and consents to process being served in any such Proceeding by mailing a copy thereof via registered or certified mail or overnight delivery (with evidence
of delivery) to such party at the address in effect for notices to it under this Agreement and agrees that such service shall constitute good and sufficient service of process and notice thereof. Nothing contained herein shall be deemed to limit in
any way any right to serve process in any manner permitted by law. Each party hereto hereby irrevocably waives, to the fullest extent permitted by applicable law, any and all right to trial by jury in any Proceeding arising out of or relating to
this Agreement or the transactions contemplated hereby. If either party shall commence a Proceeding to enforce any provisions of this Agreement, then the prevailing party in such Proceeding shall be reimbursed by the other party for its
attorney’s fees and other costs and expenses incurred with the investigation, preparation and prosecution of such Proceeding. 
  
 (k) Cumulative Remedies. The remedies provided herein are cumulative and not exclusive of any remedies provided by law. 
  
 (l) Severability. If any term, provision, covenant or restriction of
this Agreement is held by a court of competent jurisdiction to be invalid, illegal, void or unenforceable, the remainder of the terms, provisions, covenants and restrictions set forth herein shall remain in full force and effect and shall in no way
be affected, impaired or invalidated, and the parties hereto shall use their reasonable efforts to find and employ an alternative means to achieve the same or substantially the same result as that contemplated by such term, provision, covenant or
restriction. It is hereby stipulated and declared to be the intention of the parties that they would have executed the remaining terms, provisions, covenants and restrictions without including any of such that may be hereafter declared invalid,
illegal, void or unenforceable. 
  
 (m) Headings. The
headings in this Agreement are for convenience of reference only and shall not limit or otherwise affect the meaning hereof. 
  
 (n) Independent Nature of Investors’ Obligations and Rights. The obligations of each Investor under this Agreement are several and not joint
with the obligations of any other 
  

 - 13 - 

 Investor, and no Investor shall be responsible in any way for the performance of the obligations of any other Investor
under this Agreement. Nothing contained herein or in any Transaction Document, and no action taken by any Investor pursuant thereto, shall be deemed to constitute the Investors as a partnership, an association, a joint venture or any other kind of
entity, or create a presumption that the Investors are in any way acting in concert or as a group with respect to such obligations or the transactions contemplated by this Agreement or any other Transaction Document. Each Investor acknowledges that
no other Investor will be acting as agent of such Investor in enforcing its rights under this Agreement. Each Investor shall be entitled to independently protect and enforce its rights, including without limitation the rights arising out of this
Agreement, and it shall not be necessary for any other Investor to be joined as an additional party in any Proceeding for such purpose. The Company acknowledges that each of the Investors has been provided with the same Registration Rights Agreement
for the purpose of closing a transaction with multiple Investors and not because it was required or requested to do so by any Investor. 
  
 [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK 
 SIGNATURE PAGES TO FOLLOW] 
  

 - 14 - 

 IN WITNESS WHEREOF, the parties have executed this Registration Rights Agreement as of the date first
written above. 
  

			
	 AIRNET COMMUNICATIONS CORPORATION

		
	 By:
	 	 /s/ Stuart P. Dawley

	 Name:
	 	 Stuart P. Dawley

	 Title:
	 	 V.P, General Counsel & Secretary

  
 [REMAINDER OF
PAGE INTENTIONALLY LEFT BLANK 
 SIGNATURE PAGES OF PURCHASER TO FOLLOW] 
  

 - 15 - 

 IN WITNESS WHEREOF, the parties have executed this Registration Rights Agreement as of the date first
written above. 
  

			
	 SF CAPITAL PARTNERS LTD.

		
	 By:
	 	 /s/    Brian H. Davidson

	 Name:
	 	 Brian H. Davidson

	 Title:
	 	 Authorized Signatory

	
	 Address for Notice:

	
	 3600 Southlake Drive
 St. Francis, WI 53235

	 Facsimile No.:    414-294-7000

	 Attn:    414-294-7700

  

 - 16 - 

 IN WITNESS WHEREOF, the parties have executed this Registration Rights Agreement as of the date first
written above. 
  

			
	 CAPITAL VENTURES INTERNATIONAL

		
	 By
	 	 Heights Capital Management, Inc., its authorized agent

		
	 By:
	 	 /s/    Martin Kobinger

	 Name:
	 	 Martin Kobinger

	 Title:
	 	 Investment Manager

	
	 Address for Notice:

	
	 c/o Heights Capital Management, Inc.
 425 California Street, Suite 1100
 San Francisco, CA 94104

	 Facsimile No.:    (415) 403-6525

	 Attn:    Martin Kobinger or Sam Winer

  

 -17- 

 IN WITNESS WHEREOF, the parties have executed this Registration Rights Agreement as of the date first
written above. 
  

			
	 JR SQUARED, LLC

		
	 By:
	 	 /s/    Jeffrey Markowitz

	 Name:
	 	 Jeffrey Markowitz

	 Title:
	 	 Managing Member

	
	 Address for Notice:

	
	 c/o RFJM Partners
 900 Third Ave.
 Suite 201
 NYC, NY 10022

	 Facsimile No.:    212.750.3496

	 Attn:    Jeffrey Markowitz

  

 -18- 

 IN WITNESS WHEREOF, the parties have executed this Registration Rights Agreement as of the date first
written above. 
  

			
	 Smithfield Fiduciary LLC

		
	 By:
	 	 /s/    Scott M. Wallace

	 Name:
	 	 Scott M. Wallace

	 Title:
	 	 Authorized Signatory

	
	 Address for Notice:

	
	 c/o Highbridge Capital Management LLC
 9 West 57th Street 27th Floor
 New York, NY 10019
 Attn: Scott M. Wallace
 Facsimile No. 212-751-0755

  

 -19- 

 IN WITNESS WHEREOF, the parties have executed this Registration Rights Agreement as of the date first
written above. 
  

			
	 Bluegrass Growth Fund LP

		
	 By:
	 	 /s/    Brian Shatz

	 Name:
	 	 Brian Shatz

	 Title:
	 	 Managing Member, Bluegrass Growth Fund Partners LLC

	
	 Address for Notice:

	
	 115 E 57th St.
 Suite 1111
 New York, NY 10022
 Facsimile No. 212-202-9624
 Attn: Brian Shatz

  
  

 -20- 

 Annex A 
  
 Plan of Distribution 
  
 The Selling Stockholders and any of their pledgees, donees, transferees, assignees and successors-in-interest may, from time to time, sell any or all of
their shares of Common Stock on any stock exchange, market or trading facility on which the shares are traded or in private transactions. These sales may be at fixed or negotiated prices. The Selling Stockholders may use any one or more of the
following methods when selling shares: 
  

	•	ordinary brokerage transactions and transactions in which the broker-dealer solicits Investors; 

  

	•	block trades in which the broker-dealer will attempt to sell the shares as agent but may position and resell a portion of the block as principal to facilitate the transaction;

  

	•	purchases by a broker-dealer as principal and resale by the broker-dealer for its account; 

  

	•	an exchange distribution in accordance with the rules of the applicable exchange; 

  

	•	privately negotiated transactions; 

  

	•	to cover short sales made after the date that this Registration Statement is declared effective by the Commission; 

  

	•	broker-dealers may agree with the Selling Stockholders to sell a specified number of such shares at a stipulated price per share; 

  

	•	a combination of any such methods of sale; and 

  

	•	any other method permitted pursuant to applicable law. 

  
 The Selling Stockholders may also sell shares under Rule 144 under the Securities Act, if available, rather than under this prospectus. 
  
 Broker-dealers engaged by the Selling Stockholders may arrange for other
brokers-dealers to participate in sales. Broker-dealers may receive commissions or discounts from the Selling Stockholders (or, if any broker-dealer acts as agent for the purchaser of shares, from the purchaser) in amounts to be negotiated. The
Selling Stockholders do not expect these commissions and discounts to exceed what is customary in the types of transactions involved. 
  
 The Selling Stockholders may from time to time pledge or grant a security interest in some or all of the Shares owned by them and, if they default in the
performance of their secured obligations, the pledgees or secured parties may offer and sell shares of Common Stock from time to time under this prospectus, or under an amendment to this prospectus under Rule 424(b)(3) or other applicable provision
of the Securities Act of 1933 amending the list of selling stockholders to include the pledgee, transferee or other successors in interest as selling stockholders under this prospectus. 
  

 - 17 - 

 Upon the Company being notified in writing by a Selling Stockholder that any material arrangement has
been entered into with a broker-dealer for the sale of Common Stock through a block trade, special offering, exchange distribution or secondary distribution or a purchase by a broker or dealer, a supplement to this prospectus will be filed, if
required, pursuant to Rule 424(b) under the Securities Act, disclosing (i) the name of each such Selling Stockholder and of the participating broker-dealer(s), (ii) the number of shares involved, (iii) the price at which such the shares of Common
Stock were sold, (iv)the commissions paid or discounts or concessions allowed to such broker-dealer(s), where applicable, (v) that such broker-dealer(s) did not conduct any investigation to verify the information set out or incorporated by reference
in this prospectus, and (vi) other facts material to the transaction. In addition, upon the Company being notified in writing by a Selling Stockholder that a donee or pledge intends to sell more than 500 shares of Common Stock, a supplement to this
prospectus will be filed if then required in accordance with applicable securities law. 
  
 The Selling Stockholders also may transfer the shares of Common Stock in other circumstances, in which case the transferees, pledgees or other successors in interest will be the selling beneficial owners for purposes
of this prospectus. 
  
 The Selling Stockholders and any
broker-dealers or agents that are involved in selling the shares may be deemed to be “underwriters” within the meaning of the Securities Act in connection with such sales. In such event, any commissions received by such broker-dealers or
agents and any profit on the resale of the shares purchased by them may be deemed to be underwriting commissions or discounts under the Securities Act. Discounts, concessions, commissions and similar selling expenses, if any, that can be attributed
to the sale of Securities will be paid by the Selling Stockholder and/or the purchasers. Each Selling Stockholder has represented and warranted to the Company that it acquired the securities subject to this registration statement in the ordinary
course of such Selling Stockholder’s business and, at the time of its purchase of such securities such Selling Stockholder had no agreements or understandings, directly or indirectly, with any person to distribute any such securities.

  
 The Company has advised each Selling Stockholder that it may
not use shares registered on this Registration Statement to cover short sales of Common Stock made prior to the date on which this Registration Statement shall have been declared effective by the Commission. If a Selling Stockholder uses this
prospectus for any sale of the Common Stock, it will be subject to the prospectus delivery requirements of the Securities Act. The Selling Stockholders will be responsible to comply with the applicable provisions of the Securities Act and Exchange
Act, and the rules and regulations thereunder promulgated, including, without limitation, Regulation M, as applicable to such Selling Stockholders in connection with resales of their respective shares under this Registration Statement. 

 
 The Company is required to pay all fees and expenses incident to the
registration of the shares, but the Company will not receive any proceeds from the sale of the Common Stock. The Company has agreed to indemnify the Selling Stockholders against certain losses, claims, damages and liabilities, including liabilities
under the Securities Act. If the Selling Stockholders use this prospectus for any sale of the Common Stock, they will be subject to the prospectus delivery requirements of the Securities Act. 
  

 - 18 - 

 Annex B 
  
 Selling Securityholder Notice and Questionnaire 
  
 The undersigned beneficial owner of common stock (the “Common Stock”), of AIRNET COMMUNICATIONS CORPORATION (the “Company”) understands
that the Company has filed or intends to file with the Securities and Exchange Commission (the “Commission”) a Registration Statement for the registration and resale of the Registrable Securities, in accordance with the terms of the
Registration Rights Agreement, dated as of April 23, 2004 (the “Registration Rights Agreement”), among the Company and the Investors named therein. A copy of the Registration Rights Agreement is available from the Company upon
request at the address set forth below. All capitalized terms used and not otherwise defined herein shall have the meanings ascribed thereto in the Registration Rights Agreement. 
  
 The undersigned hereby provides the following information to the Company and represents and warrants that such information is accurate:

  
 QUESTIONNAIRE 
  
 1. Name. 
  

			
	 (a)
	  	Full Legal Name of Selling Securityholder
	 	  	  
  

		
	 (b)
	  	Full Legal Name of Registered Holder (if not the same as (a) above) through which Registrable Securities Listed in Item 3 below are held:
	 	  	  
  

		
	 (c)
	  	Full Legal Name of Natural Control Person (which means a natural person who directly you indirectly alone or with others has power to vote or dispose of the securities covered by the
questionnaire):
	 	  	  
  

  
 2. Address for Notices to Selling
Securityholder: 
  

			
	  

	  

	  

	Telephone: 	 	  

	Fax:	 	  

	Contact Person:	 	  

  

 - 19 - 

 3. Beneficial Ownership of Registrable Securities: 
  

			
	 (a)
	  	Type and Principal Amount of Registrable Securities beneficially owned:
	 	  	  
  

	 	  	  

	 	  	  

  
 4. Broker-Dealer Status:

  

	 	(a)	Are you a broker-dealer? 

  
 Yes   ̈                    No   ̈

  

	 	Note:	If yes, the Commission’s staff has indicated that you should be identified as an underwriter in the Registration Statement. 

  

	 	(b)	Are you an affiliate of a broker-dealer? 

  
 Yes   ̈                    No   ̈

  

	 	(c)	If you are an affiliate of a broker-dealer, do you certify that you bought the Registrable Securities in the ordinary course of business, and at the time of the purchase of the
Registrable Securities to be resold, you had no agreements or understandings, directly or indirectly, with any person to distribute the Registrable Securities? 

  
 Yes   ̈                    No   ̈

  

	 	Note:	If no, the Commission’s staff has indicated that you should be identified as an underwriter in the Registration Statement. 

  
 5. Beneficial Ownership of Other Securities of the Company Owned by the Selling
Securityholder. 
  
 Except as set forth below in this Item
5, the undersigned is not the beneficial or registered owner of any securities of the Company other than the Registrable Securities listed above in Item 3. 
  

			
	 (a)
	  	Type and Amount of Other Securities beneficially owned by the Selling Securityholder:
	 	  	  
  

	 	  	  

  

 - 20 - 

 6. Relationships with the Company: 
  
 Except as set forth below, neither the undersigned nor any of its affiliates, officers, directors or principal equity
holders (owners of 5% of more of the equity securities of the undersigned) has held any position or office or has had any other material relationship with the Company (or its predecessors or affiliates) during the past three years. 

 

	
	  State any exceptions here:

	  

	  

  
 The undersigned agrees to promptly
notify the Company of any inaccuracies or changes in the information provided herein that may occur subsequent to the date hereof and prior to the Effective Date for the Registration Statement. 
  
 By signing below, the undersigned consents to the disclosure of the information contained
herein in its answers to Items 1 through 6 and the inclusion of such information in the Registration Statement and the related prospectus. The undersigned understands that such information will be relied upon by the Company in connection with the
preparation or amendment of the Registration Statement and the related prospectus. 
  
 IN WITNESS WHEREOF the undersigned, by authority duly given, has caused this Notice and Questionnaire to be executed and delivered either in person or by its duly authorized agent. 
  

					
	Dated:                     	 	 Beneficial Owner:

			
	 	 	By:	 	  

	 	 	Name:	 	 
	 	 	Title:	 	 

  
 PLEASE FAX A COPY OF THE COMPLETED
AND EXECUTED NOTICE AND QUESTIONNAIRE, AND RETURN THE ORIGINAL BY OVERNIGHT MAIL, TO: 
  
 [            ] 
  

 - 21 -

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