Document:

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                                                                     Exhibit 4.1

                   ===========================================

                        OAKWOOD MORTGAGE INVESTORS, INC.,

                       OAKWOOD ACCEPTANCE CORPORATION, LLC

                                       AND

                              JPMORGAN CHASE BANK,
                                     TRUSTEE

                                   ----------

                  SERIES 2002-B POOLING AND SERVICING AGREEMENT

                             Dated as of May 1, 2002

                                   ----------

                        OAKWOOD MORTGAGE INVESTORS, INC.

                               SENIOR/SUBORDINATED

                    PASS-THROUGH CERTIFICATES, SERIES 2002-B

                   ===========================================

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                                Table of Contents

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                                                                                        Page

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SECTION 1.  STANDARD TERMS ..........................................................      3

SECTION 2.  DEFINED TERMS ...........................................................      3

SECTION 3.  CERTIFICATES, SUBACCOUNTS AND SUBSIDIARY INTERESTS ......................     19

SECTION 4.  DENOMINATIONS ...........................................................     23

SECTION 5.  DISTRIBUTIONS ...........................................................     23

SECTION 6.  GUARANTEE ...............................................................     30

SECTION 7.  ESTABLISHMENT OF CERTIFICATEHOLDERS' INTEREST CARRYOVER ACCOUNT .........     31

SECTION 8.  SERVICING TRANSITION ACCOUNT ............................................     31

SECTION 9.  ALLOCATION OF WRITEDOWN AMOUNTS .........................................     32

SECTION 10. PRE-FUNDING ACCOUNT .....................................................     33

SECTION 11. CAPITALIZED INTEREST ACCOUNT ............................................     34

SECTION 12. REMITTANCE REPORTS ......................................................     35

SECTION 13. LIMITED RIGHT OF SERVICER TO RETAIN SERVICING FEES FROM COLLECTIONS .....     37

SECTION 14. DETERMINATION OF ONE-MONTH LIBOR ........................................     37

SECTION 15. REMIC ADMINISTRATION ....................................................     39

SECTION 16. OPTIONAL TERMINATION AND AUCTION CALL ...................................     40

SECTION 17. CONCERNING THE CONTRACT OF INSURANCE HOLDER .............................     40

SECTION 18. VOTING RIGHTS ...........................................................     43

SECTION 19. TRUSTEE CERTIFICATION ...................................................     43

SECTION 20. AMENDMENTS TO THE STANDARD TERMS ........................................     43

SECTION 21. GOVERNING LAW ...........................................................     47

SECTION 22. FORMS OF CERTIFICATES ...................................................     47

SECTION 23. COUNTERPARTS ............................................................     47

SECTION 24. ENTIRE AGREEMENT ........................................................     47
</TABLE>

                                       i

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     THIS SERIES 2002-B POOLING AND SERVICING AGREEMENT, dated as of May 1,
2002, is made with respect to the formation of OMI Trust 2002-B (the "Trust")
among OAKWOOD MORTGAGE INVESTORS, INC., a Nevada corporation ("OMI"), OAKWOOD
ACCEPTANCE CORPORATION, LLC, a Delaware limited liability company ("OAC" and, in
its capacity as servicer, the "Servicer"), and JPMORGAN CHASE BANK, a New York
banking corporation, as trustee (the "Trustee"), under this Agreement and the
Standard Terms to Pooling and Servicing Agreement, September 2001 Edition (the
"Standard Terms"), all the provisions of which are incorporated herein as
modified hereby and shall be a part of this Agreement as if set forth herein in
full (this Agreement with the Standard Terms so incorporated, the "Pooling and
Servicing Agreement"). Capitalized terms used and not otherwise defined herein
shall have the respective meanings given them in the Standard Terms.

                              PRELIMINARY STATEMENT

     The Board of Directors of OMI has duly authorized the formation of the
Trust to issue a Series of Certificates with an aggregate initial principal
amount of $235,271,000 without regard to the notional principal balance of the
Class A-IO Certificates (defined below), to be known as the Senior/Subordinated
Pass-Through Certificates, Series 2002-B (the "Certificates"). The Certificates
consist of eleven Classes that in the aggregate evidence the entire beneficial
ownership interest in the Trust.

     In accordance with Section 10.01 of the Standard Terms, the Trustee will
make an election to treat all of the assets of the Trust (except the Pre-Funding
Account, the Capitalized Interest Account, the Certificateholders' Interest
Carryover Account, the Servicing Transition Account, and the Certificate
Account), as three real estate mortgage investment conduits (each, a "REMIC"
and, individually, the "Pooling REMIC," the "Intermediate REMIC" and the
"Issuing REMIC") for federal income tax purposes. The Pooling REMIC will consist
of the Distribution Account and the Assets listed on the Asset Schedules
attached as Schedule I and Schedule II hereto. The Intermediate REMIC will
consist of the uncertificated Subsidiary Interests designated as provided
herein. The Issuing REMIC will consist of the Subaccounts designated as provided
herein. The "startup day" of each REMIC for purposes of the REMIC Provisions is
the Closing Date.

                                GRANTING CLAUSES

     To provide for the distribution of the principal of and interest on the
Certificates in accordance with their terms, all of the sums distributable under
this Pooling and Servicing Agreement with respect to the Certificates and the
performance of the covenants contained in this Pooling and Servicing Agreement,
OMI hereby bargains, sells, conveys, assigns and transfers to the Trustee, in
trust and as provided in this Pooling and Servicing Agreement, without recourse
and for the exclusive benefit of the Holders of the Certificates, all of OMI's
right, title and interest in and to, and any and all benefits accruing to OMI
from the following to make distributions on the Certificates as specified herein
(collectively referred to herein as the "Trust Estate"):

                                        1

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     (a) the Contracts listed in Schedule IA and Schedule IIA hereto and the
Mortgage Loans (together with the Contracts, the "Assets") listed in Schedule IB
and Schedule IIB hereto, (Schedule IA and Schedule IB shall be collectively
referred to herein as "Schedule I", and Schedule IIA and Schedule IIB shall be
collectively referred to herein as "Schedule II"), including the Subsequent
Assets transferred to the trust from time to time, together with the related
Asset Documents, and all payments thereon and proceeds of the conversion,
voluntary or involuntary, of the foregoing, including, without limitation, all
rights to receive all principal and interest payments due on the Assets after
the applicable Cut-off Date, including such scheduled payments received by OMI
or the respective sellers on or prior to the applicable Cut-off Date, and
Principal Prepayments, Net Insurance Proceeds, Net Liquidation Proceeds,
Repurchase Prices and other unscheduled collections received on the Assets on
and after the applicable Cut-off Date;

     (b) the security interests in the Manufactured Homes, Mortgaged Properties
and Real Properties granted by the Obligors pursuant to the related Assets;

     (c) all funds, other than investment earnings, relating to the Pre-Funding
Account, to the assets on deposit in the Capitalized Interest Account, the
Certificateholders' Interest Carryover Account, the Servicing Transition
Account, the Certificate Account or the Distribution Account for the
Certificates and all proceeds thereof, whether in the form of cash, instruments,
securities or other properties;

     (d) any and all rights, privileges and benefits accruing to OMI under the
Sales Agreement and the Servicer's Representations Agreement with respect to the
Assets (provided that OMI shall retain its rights to indemnification from the
Seller under such Sales Agreement and the Servicer's Representations Agreement,
but also hereby conveys its rights to such indemnification to the Trustee as its
assignee), including the rights and remedies with respect to the enforcement of
any and all representations, warranties and covenants under such Sales
Agreement; and

     (e) proceeds of all the foregoing (including, but not by way of limitation,
all proceeds of any Standard Hazard Insurance Policy or FHA Insurance, or any
other insurance policy relating to any of the Assets, cash proceeds, accounts,
accounts receivable, notes, drafts, acceptances, chattel paper, checks, deposit
accounts, rights to payment of any and every kind, and other forms of
obligations and receivables that at any time constitute all or part or are
included in the proceeds of any of the foregoing).

     The Trustee acknowledges the foregoing, accepts the trusts hereunder in
accordance with the provisions hereof and the Standard Terms and agrees to
perform the duties herein or therein required to the best of its ability to the
end that the interests of the Holders of the Certificates may be adequately and
effectively protected.

                                        2

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     Section 1. Standard Terms.
                --------------

     OMI, the Servicer and the Trustee acknowledge that the Standard Terms
prescribe certain obligations of OMI, the Servicer and the Trustee with respect
to the Certificates. OMI, the Servicer and the Trustee agree to observe and
perform such prescribed duties, responsibilities and obligations, and
acknowledge that, except to the extent inconsistent with the provisions of this
Pooling and Servicing Agreement, the Standard Terms are and shall be a part of
this Pooling and Servicing Agreement to the same extent as if set forth herein
in full.

     Section 2. Defined Terms.
                -------------

     With respect to the Certificates and in addition to or in replacement for
the definitions set forth in Section 1.01 of the Standard Terms, the following
definitions shall be assigned to the defined terms set forth below:

     "Accelerated Principal Distribution Amount": With respect to any
Distribution Date, the positive difference, if any, between the Target
Overcollateralization Amount and the Current Overcollateralization Amount.

     "Accrual Date": The Accrual Date shall be (i) with respect to the Class A-1
Certificates, the Closing Date, and (ii) with respect to all other Classes of
Certificates, May 1, 2002.

     "Adjusted Certificate Principal Balance": With respect to each Class of
Subordinated Certificates on any date of determination, its Certificate
Principal Balance immediately following the most recently preceding Distribution
Date reduced by all Writedown Amounts allocated to such Class on such
Distribution Date and all prior Distribution Dates.

     "Adjusted Subaccount Principal Balance": With respect to each of the
Corresponding Subaccounts relating to the Subordinated Certificates, on any date
of determination, its Subaccount Principal Balance immediately following the
most recently preceding Distribution Date reduced by all Writedown Amounts
allocated to such Subaccount on such Distribution Date and all prior
Distribution Dates.

     "Adjusted Weighted Average Net Asset Rate": For any Distribution Date, a
fraction expressed as a percentage, (a) the numerator of which is the sum of (i)
the Weighted Average Net Asset Rate multiplied by the Subsidiary Interest
Principal Balance of the Class S-1 Interest and (ii) the Weighted Average Net
Asset Rate multiplied by the aggregate Subsidiary Interest Principal Balance of
the Class S-2 Interests, less (iii) (A) 6.00% (six hundred basis points)
multiplied by the sum of the Subsidiary Interest Principal Balance of the

     (1)  Class S-2(1) Interest through and including the August 2002
          Distribution Date,
     (2)  Class S-2(2) Interest through and including the November 2002
          Distribution Date,
     (3)  Class S-2(3) Interest through and including the February 2003
          Distribution Date,
     (4)  Class S-2(4) Interest through and including the May 2003 Distribution
          Date,
     (5)  Class S-2(5) Interest through and including the August 2003
          Distribution Date,
     (6)  Class S-2(6) Interest through and including the November 2003
          Distribution Date, (7) Class S-2
     (7)  Interest through and including the February 2004 Distribution Date,
     (8)  Class S-2(8) Interest through and including the May 2004 Distribution
          Date,

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     (9)  Class S-2(9) Interest through and including the August 2004
          Distribution Date, (10) Class S-2
     (10) Interest through and including the November 2004 Distribution Date,
     (11) Class S-2(11) Interest through and including the February 2005
          Distribution Date,
     (12) Class S-2(12) Interest through and including the May 2005 Distribution
          Date,
     (13) Class S-2(13) Interest through and including the August 2005
          Distribution Date, (14) Class S-2
     (14) Interest through and including the November 2005 Distribution Date,
     (15) Class S-2(15) Interest through and including the February 2006
          Distribution Date, (16) Class S-2
     (16) Interest through and including the May 2006 Distribution Date,
     (17) Class S-2(17) Interest through and including the August 2006
          Distribution Date,
     (18) Class S-2(18) Interest through and including the November 2006
          Distribution Date,
     (19) Class S-2(19) Interest through and including the February 2007
          Distribution Date,
     (20) Class S-2(20) Interest through and including the May 2007 Distribution
          Date, (21) Class S-2
     (21) Interest through and including the August 2007 Distribution Date,
     (22) Class S-2(22) Interest through and including the November 2007
          Distribution Date,
     (23) Class S-2(23) Interest through and including the February 2008
          Distribution Date,
     (24) Class S-2(24) Interest through and including the May 2008 Distribution
          Date,
     (25) Class S-2(25) Interest through and including the August 2008
          Distribution Date, (26) Class S-2
     (26) Interest through and including the November 2008 Distribution Date,
          (27) Class S-2
     (27) Interest through and including the February 2009 Distribution Date,
     (28) Class S-2(28) Interest through and including the May 2009 Distribution
          Date,
     (29) Class S-2(29) Interest through and including the August 2009
          Distribution Date,
     (30) Class S-2(30) Interest through and including the November 2009
          Distribution Date,
     (31) Class S-2(31) Interest through and including the February 2010
          Distribution Date, and
     (32) Class S-2(32) Interest through and including the May 2010
          Distribution Date,

and (B) 0% after the May 2010 Distribution Date, and (b) the denominator of
which is the sum of the Subsidiary Interest Principal Balances of the Class S-1
and Class S-2 Interests.

     "Average Sixty-Day Delinquency Ratio": With respect to any Distribution
Date, the arithmetic average of the Sixty-Day Delinquency Ratios for such
Distribution Date and the two preceding Distribution Dates. The "Sixty-Day
Delinquency Ratio" for a Distribution Date is the percentage derived from the
fraction, the numerator of which is the aggregate Scheduled Principal Balance
(as of the end of the preceding Prepayment Period) of all Assets (including
Assets in respect of which the related Manufactured Home, Real Property or
Mortgaged Property has been repossessed or foreclosed upon but not yet disposed
of, but exclusive of the Pooled Certificates) as to which a Monthly Payment
thereon is delinquent 60 days or more as of the end of the related Prepayment
Period, and the denominator of which is the Pool Scheduled Principal Balance for
such Distribution Date. For purposes of this definition only, the Pool Scheduled
Principal Balance shall be calculated as of the close of the related Collection
Period.

     "Book-Entry Certificates": The Class A, Class M and Class B Certificates.

     "Call Option Date": Any Distribution Date occurring on or after the
Distribution Date on or after the later of (a) the Distribution Date on which,
after taking into account distributions of principal to be made on such
Distribution Date, the aggregate Certificate Principal Balance of the

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Certificates is less than 10% of the sum of the initial aggregate
Certificate Principal Balance of the Certificates and (b) May 2010.

     "Capitalized Interest Amount": $373,000, as adjusted from time to time
pursuant to Section 11 hereof.

     "Capitalized Interest Account": The account so designated and established
pursuant to Section 11 hereof, which shall not be an asset of any of the Pooling
REMIC, the Intermediate REMIC or the Issuing REMIC.

     "Capitalized Interest Account Distribution Date": Any or all, as
appropriate, of the Distribution Dates occurring during the Pre-Funding Period
and on the Distribution Date immediately following the Pre-Funding Period.

     "Capitalized Interest Account Withdrawal Amount": On each Capitalized
Interest Account Distribution Date, the lesser of (i) the then remaining
Capitalized Interest Amount, and (ii) the positive difference, if any, between
(x) the amount necessary to make all distributions required under Section
5(b)(i)-(v) herein, and (y) the Available Distribution Amount for such
Distribution Date (calculated without reference to the Capitalized Interest
Account Withdrawal Amount for purposes hereof).

     "Carryover Interest Distribution Amount": For each Distribution Date and
with respect to each Class of Certificates, except the Class X Certificates and
the Residual Certificates, all amounts that were distributable on the previous
Distribution Date, but were not distributed, as (a) Interest Distribution
Amounts and (b) unpaid Interest Distribution Amounts from previous Distribution
Dates with interest thereon at the related Pass-Through Rate. For each
Distribution Date and with respect to each Subaccount, all amounts that were
allocable on the previous Distribution Date, but were not allocated, as (a)
Priority Interest Distribution Amounts and (b) unpaid Priority Interest
Distribution Amounts from previous Distribution Dates with interest thereon at
the related Pass-Through Rate in effect for the Corresponding Certificates with
respect to such Subaccount. With respect to each Class of Subsidiary Interests
on each Distribution Date, all amounts that were allocable to such Subsidiary
Interests as Interest Distribution Amounts on the previous Distribution Date but
not previously distributed, together with interest accrued on any such amount at
the Weighted Average Net Asset Rate.

     "Carryover Non-Priority Interest Distribution Amount": For any Subaccount,
on any Distribution Date, all amounts that were distributable on such Subaccount
as Non-Priority Interest Distribution Amounts on previous Distribution Dates
that remain unpaid.

     "Carryover Writedown Interest Distribution Amount": With respect to each
Distribution Date and each Class of Subordinated Certificates (other than the
Class X and Class R Certificates) or Subaccounts, all amounts that were
distributable, but were not distributed, as (a) Writedown Interest Distribution
Amounts and (b) unpaid Writedown Interest Distribution Amounts from previous
Distribution Dates with interest accrued thereon at the related Pass-Through
Rate.

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     "Certificateholders' Interest Carryover Account": The account maintained
pursuant to Section 7 hereof, which shall not be an asset of any of the Pooling
REMIC, the Intermediate REMIC or the Issuing REMIC.

     "Claims Administrator": The Servicer, or any successor thereof.

     "Class A Certificates": The Class A-1, Class A-2, Class A-3, Class A-4, and
Class A-IO Certificates.

     "Class A Percentage": With respect to each Distribution Date, the
percentage derived from the fraction (which shall not be greater than 1), the
numerator of which is the Certificate Principal Balance of the Class A
Certificates (not including the Class A-IO Certificates) immediately prior to
such Distribution Date and the denominator of which is the aggregate Certificate
Principal Balances for all Classes of Certificates (other than the Class A-IO
Certificates), as reduced by all Writedown Amounts, immediately prior to such
Distribution Date.

     "Class A Principal Distribution Amount": For any Distribution Date, will
equal (i) prior to the Cross-over Date, the entire Principal Distribution
Amount, (ii) on any Distribution Date as to which the Principal Distribution
Tests are not met, the entire Principal Distribution Amount, or (iii) on any
other Distribution Date, the Class A Percentage of the Principal Distribution
Amount, subject to increase as described in the last sentence of the definition
of "Class B-2 Principal Distribution Amount." For any Distribution Date, if the
Class A Principal Distribution Amount exceeds the Class A Certificate Principal
Balance less the Principal Distribution Shortfall Carryover Amount with respect
to such Class and Distribution Date, then such excess amount shall be allocated
to the Class M-1 Principal Distribution Amount.

     "Class A Subaccounts": Any or all, as appropriate, of the Class A-1, Class
A-2, Class A-3, Class A-4, and Class A-IO Subaccounts.

     "Class A-IO Notional Principal Balance": For any Distribution Date, an
amount equal to (a) through and including the Distribution Date in May 2010, the
lesser of (i) the Class A-IO Scheduled Notional Principal Balance and (ii) the
Pool Scheduled Principal Balance, and (b) thereafter, zero.

     "Class A-IO Scheduled Notional Principal Balance": For any Distribution
Date, the Class A-IO Notional Principal Balance as reflected on the Class A-IO
Scheduled Notional Principal Balance Schedule.

     "Class A-IO Scheduled Notional Principal Balance Schedule": Schedule IV
annexed hereto.

     "Class B Certificates": The Class B-1 Certificates and Class B-2
Certificates.

     "Class B Subaccounts": Any or all, as appropriate, of the Class B-1 or
Class B-2 Subaccounts.

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     "Class B-1 Percentage": With respect to each Distribution Date, the
percentage derived from the fraction (which shall not be greater than 1), the
numerator of which is the Adjusted Certificate Principal Balance of the Class
B-1 Certificates immediately prior to such Distribution Date and the denominator
of which is the aggregate Certificate Principal Balance for all Classes of
Certificates (other than the Class A-IO Certificates), as reduced by all
Writedown Amounts, immediately prior to such Distribution Date.

     "Class B-1 Principal Distribution Amount": For any Distribution Date will
equal (i) as long as the Class A-1 Certificate Principal Balance, the Class A-2
Certificate Principal Balance, the Class A-3 Certificate Principal Balance, the
Class A-4 Certificate Principal Balance, the Class M-1 Certificate Principal
Balance and the Class M-2 Certificate Principal Balance have not been reduced to
zero and prior to the Cross-over Date, zero, (ii) on any Distribution Date as to
which the Principal Distribution Tests are not met and the Class A-1 Certificate
Principal Balance, the Class A-2 Certificate Principal Balance, the Class A-3
Certificate Principal Balance, the Class A-4 Certificate Principal Balance, the
Class M-1 Certificate Principal Balance and the Class M-2 Certificate Principal
Balance have not been reduced to zero, zero, (iii) on any Distribution Date as
to which the Principal Distribution Tests are not met and the Class A-1
Certificate Principal Balance, the Class A-2 Certificate Principal Balance, the
Class A-3 Certificate Principal Balance, the Class A-4 Certificate Principal
Balance, the Class M-1 Certificate Principal Balance and the Class M-2
Certificate Principal Balance each have been reduced to zero, the Principal
Distribution Amount, or (iv) on any other Distribution Date, the Class B-1
Percentage of the Principal Distribution Amount (subject to increase as
described in sections (b) and (c) of the definition of "Class B-2 Principal
Distribution Amount") and the Class B-2 Percentage of the Principal Distribution
Amount (subject to decrease as described in sections (b) and (c) of the
definition of "Class B-2 Principal Distribution Amount"). For any Distribution
Date, if the Class B-1 Principal Distribution Amount exceeds the Class B-1
Certificate Principal Balance less the Principal Distribution Shortfall
Carryover Amount with respect to such Class and Distribution Date, then such
excess amount shall be allocated to the Class B-2 Principal Distribution Amount.

     "Class B-2 Certificateholders' Interest Carryover Amount": For the Class
B-2 Certificates on any Distribution Date and to the extent of available Class X
Strip Amounts and Class X Carryover Strip Amounts, the sum of (i) if on that
Distribution Date the Pass-Through Rate for such Class of Certificates is based
upon the Adjusted Weighted Average Net Asset Rate, the positive difference of
(A) the amount of interest on the sum of the Interest Computational Components
that the Class B-2 Certificates would be entitled to receive on such
Distribution Date had interest been calculated at a rate equal to 9.70% per
annum, over (B) the amount of interest on the sum of the Interest Computational
Components that the Class B-2 Certificates will receive on such Distribution
Date at the Adjusted Weighted Average Net Asset Rate, plus (ii) the unpaid
portion of any such excess from prior Distribution Dates (and interest thereon
at the Pass-Through Rate for the Class B-2 Certificates, without giving effect
to the cap of the Adjusted Weighted Average Net Asset Rate). No Class B-2
Certificateholders' Interest Carryover Amount shall be paid after the Class
Principal Balance of the Class B-2 Certificates is reduced to zero.

     "Class B-2 Floor Amount": With respect to any Distribution Date, either (a)
1.00% of the Pool Scheduled Principal Balance as of the Cut-off Date, if the
Class A-1 Certificate

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Principal Balance, the Class A-2 Certificate Principal Balance, the Class A-3
Certificate Principal Balance, the Class A-4 Certificate Principal Balance, the
Class M-1 Certificate Principal Balance, the Class M-2 Certificate Principal
Balance and the Class B-1 Certificate Principal Balance have not been reduced to
zero prior to such Distribution Date, and (b) zero, if the Class A-1 Certificate
Principal Balance, the Class A-2 Certificate Principal Balance, the Class A-3
Certificate Principal Balance, the Class A-4 Certificate Principal Balance, the
Class M-1 Certificate Principal Balance, the Class M-2 Certificate Principal
Balance and the Class B-1 Certificate Principal Balance have been reduced to
zero prior to such Distribution Date.

     "Class B-2 Percentage": With respect to any Distribution Date, the
percentage derived from the fraction (which shall not be greater than 1), the
numerator of which is the sum of the Class B-2 Adjusted Certificate Principal
Balance and the Overcollateralization Amount, each immediately prior to such
Distribution Date and the denominator of which is the aggregate Certificate
Principal Balance for all Classes of Certificates (other than the Class A-IO
Certificates), as reduced by all Writedown Amounts, immediately prior to such
Distribution Date.

     "Class B-2 Principal Distribution Amount":
      ----------------------------------------

     (a)  For any Distribution Date will equal (i) as long as the Class A-1
Certificate Principal Balance, the Class A-2 Certificate Principal Balance, the
Class A-3 Certificate Principal Balance, the Class A-4 Certificate Principal
Balance, the Class M-1 Certificate Principal Balance, the Class M-2 Certificate
Principal Balance and the Class B-1 Certificate Principal Balance have not been
reduced to zero and prior to the Cross-over Date, zero, (ii) on any Distribution
Date as to which the Principal Distribution Tests are not met and the Class A-1
Certificate Principal Balance, the Class A-2 Certificate Principal Balance, the
Class A-3 Certificate Principal Balance, the Class A-4 Certificate Principal
Balance, the Class M-1 Certificate Principal Balance, the Class M-2 Certificate
Principal Balance and the Class B-1 Certificate Principal Balance have not been
reduced to zero and prior to the Cross-over Date, zero, (iii) on any
Distribution Date as to which the Principal Distribution Tests are not met and
the Class A-1 Certificate Principal Balance, the Class A-2 Certificate Principal
Balance, the Class A-3 Certificate Principal Balance, the Class A-4 Certificate
Principal Balance, the Class M-1 Certificate Principal Balance, the Class M-2
Certificate Principal Balance and the Class B-1 Certificate Principal Balance
each have been reduced to zero, the Principal Distribution Amount, (iv) on any
Distribution Date as to which the Class B-1 Certificate Principal Balance has
not been reduced to zero, zero, or (v) on any other Distribution Date, the Class
B-2 Percentage of the Principal Distribution Amount. On any Distribution Date,
the Class B-2 Principal Distribution Amount shall not exceed the Class B-2
Certificate Principal Balance less the Principal Distribution Shortfall
Carryover Amount with respect to such Class and such Distribution Date.

     (b)  If the Class A-1 Certificate Principal Balance, the Class A-2
Certificate Principal Balance, the Class A-3 Certificate Principal Balance, the
Class A-4 Certificate Principal Balance, the Class M-1 Certificate Principal
Balance, the Class M-2 Certificate Principal Balance and the Class B-1
Certificate Principal Balance have not been reduced to zero on or before a
Distribution Date, then amounts otherwise allocable as Class B-2 Principal
Distribution Amounts shall be allocated first to the Class B-1 Principal
Distribution Amount, then to the Class M-2 Principal Distribution Amount, then
to the Class M-1 Principal Distribution Amount, then to the Class A

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Principal Distribution Amount, and finally to the Class B-2 Principal
Distribution Amount, to the extent that allocation of such amounts to the Class
B-2 Principal Distribution Amount would reduce the Class B-2 Certificate
Principal Balance below the Class B-2 Floor Amount.

     (c)  If the Class A-1 Certificate Principal Balance, the Class A-2
Certificate Principal Balance, the Class A-3 Certificate Principal Balance, the
Class A-4 Certificate Principal Balance, the Class M-1 Certificate Principal
Balance, the Class M-2 Certificate Principal Balance and the Class B-1
Certificate Principal Balance have not been reduced to zero on or before a
Distribution Date, then the amounts otherwise allocable to the Class B-2
Principal Distribution Amount shall be allocated first to the Class B-1
Principal Distribution Amount, next to the Class M-2 Principal Distribution
Amount, next to the Class M-1 Principal Distribution Amount, next to the Class A
Principal Distribution Amount, and finally to the Class B-2 Principal
Distribution Amount, to the extent that allocation of these amounts to the Class
B-2 Principal Distribution Amount would reduce the sum of the Class B-2
Certificate Principal Balance and the Current Overcollateralization Amount below
the Total Floor Amount.

     "Class M Certificates": The Class M-1 and Class M-2 Certificates.

     "Class M Subaccounts": Any or all, as appropriate, of the Class M-1 or
Class M-2 Subaccounts.

     "Class M-1 Percentage": With respect to any Distribution Date, the
percentage derived from the fraction (which shall not be greater than 1), the
numerator of which is the Class M-1 Adjusted Certificate Principal Balance
immediately prior to such Distribution Date and the denominator of which is the
aggregate Certificate Principal Balance for all Classes of Certificates (other
than the Class A-IO Certificates), as reduced by all Writedown Amounts,
immediately prior to such Distribution Date.

     "Class M-1 Principal Distribution Amount": For any Distribution Date will
equal (i) as long as the Class A-1 Certificate Principal Balance, the Class A-2
Certificate Principal Balance, the Class A-3 Certificate Principal Balance, and
the Class A-4 Certificate Principal Balance have not been reduced to zero, and
prior to the Cross-over Date, zero, (ii) on any Distribution Date as to which
the Principal Distribution Tests are not met and the Class A-1 Certificate
Principal Balance, the Class A-2 Certificate Principal Balance, the Class A-3
Certificate Principal Balance, and the Class A-4 Certificate Principal Balance
have not been reduced to zero, zero, (iii) on any Distribution Date as to which
the Principal Distribution Tests are not met and the Class A-1 Certificate
Principal Balance, the Class A-2 Certificate Principal Balance, the Class A-3
Certificate Principal Balance and the Class A-4 Certificate Principal Balance
each have been reduced to zero, the Principal Distribution Amount, or (iv) on
any other Distribution Date, the Class M-1 Percentage of the Principal
Distribution Amount, in any case subject to increase as described in sections
(b) and (c) of the definition of "Class B-2 Principal Distribution Amount." For
any Distribution Date, if the Class M-1 Principal Distribution Amount exceeds
the Class M-1 Certificate Principal Balance less the Principal Distribution
Shortfall Carryover Amount with respect to such Class and Distribution Date,
then such amounts shall be allocated to the Class M-2 Principal Distribution
Amount.

                                        9

<PAGE>

     "Class M-2 Percentage": With respect to any Distribution Date, the
percentage derived from the fraction (which shall not be greater than 1), the
numerator of which is the Class M-2 Adjusted Certificate Principal Balance
immediately prior to such Distribution Date and the denominator of which is the
aggregate Certificate Principal Balance for all Classes of Certificates (other
than the Class A-IO Certificates), as reduced by all Writedown Amounts,
immediately prior to such Distribution Date.

     "Class M-2 Principal Distribution Amount": For any Distribution Date will
equal (i) as long as the Class A-1 Certificate Principal Balance, the Class A-2
Certificate Principal Balance, the Class A-3 Certificate Principal Balance and
the Class A-4 Certificate Principal Balance and the Class M-1 Certificate
Principal Balance have not been reduced to zero and prior to the Cross-over
Date, zero, (ii) on any Distribution Date as to which the Principal Distribution
Tests are not met and the Class A-1 Certificate Principal Balance, the Class A-2
Certificate Principal Balance, the Class A-3 Certificate Principal Balance and
the Class A-4 Certificate Principal Balance and the Class M-1 Certificate
Principal Balance have not been reduced to zero, zero, (iii) on any Distribution
Date as to which the Principal Distribution Tests are not met and the Class A-1
Certificate Principal Balance, the Class A-2 Certificate Principal Balance, the
Class A-3 Certificate Principal Balance and the Class A-4 Certificate Principal
Balance and the Class M-1 Certificate Principal Balance each have been reduced
to zero, the Principal Distribution Amount, or (iv) on any other Distribution
Date, the Class M-2 Percentage of the Principal Distribution Amount, in any case
subject to increase as described in sections (b) and (c) of the definition of
"Class B-2 Principal Distribution Amount." For any Distribution Date, if the
Class M-2 Principal Distribution Amount exceeds the Class M-2 Certificate
Principal Balance less the Principal Distribution Shortfall Carryover Amount
with respect to such Class and Distribution Date, then such amounts shall be
allocated to the Class B-1 Principal Distribution Amount.

     "Class R Certificates": The Class R Certificates, which represent
beneficial ownership of each of the Pooling REMIC Residual Interest, the
Intermediate REMIC Residual Interest and the Issuing REMIC Residual Interest.

     "Class R-1 Certificates": Following the division of the Class R
Certificates into three separately transferable, certificated and fully
registered certificates in accordance with Section 15(b) hereof, the Class R-1
Certificates, which will represent the Issuing REMIC Residual Interest.

     "Class R-2 Certificates": Following the division of the Class R
Certificates into three separately transferable, certificated and fully
registered certificates in accordance with Section 15(b) hereof, the Class R-2
Certificates, which will represent the Intermediate REMIC Residual Interest.

     "Class R-3 Certificates": Following the division of the Class R
Certificates into three separately transferable, certificated and fully
registered certificates in accordance with Section 15(b) hereof, the Class R-3
Certificates, which will represent the Pooling REMIC Residual Interest.

     "Class S-1 Interest," "Class S-2(1) Interest," "Class S-2(2) Interest,"
"Class S-2(3) Interest," "Class S-2(4) Interest," "Class S-2(5) Interest,"
"Class S-2(6) Interest," "Class S-2(7)

                                       10

<PAGE>

     Interest," "Class S-2(8) Interest," "Class S-2(9) Interest," "Class S-2(10)
Interest," "Class S-2(11) Interest," "Class S-2(12) Interest," "Class S-2(13)
Interest," "Class S-2(14) Interest," "Class S-2(15) Interest," "Class S-2(16)
Interest," "Class S-2(17) Interest," "Class S-2(18) Interest," "Class S-2(19)
Interest," "Class S-2(20) Interest," "Class S-2(21) Interest," "Class S-2(22)
Interest," "Class S-2(23) Interest," "Class S-2(24) Interest," "Class S-2(25)
Interest," "Class S-2(26) Interest," "Class S-2(27) Interest," "Class S-2(28)
Interest," "Class S-2(29) Interest," "Class S-2(30) Interest," "Class S-2(31)
Interest" or "Class S-2(32) Interest": means, respectively, a regular interest
in the Pooling REMIC which is held as an asset of the Intermediate REMIC, is
entitled to monthly distributions as provided in Section 3 hereof, and has the
Subsidiary Interest Principal Balance and bears interest at the Pass-Through
Rate specified in Section 3 hereof.

     "Class S-2 Interest": Any of the Class S-2(1) Interest, Class S-2(2)
Interest, Class S-2(3) Interest, Class S-2(4) Interest, Class S-2(5) Interest,
Class S-2(6) Interest, Class S-2(7) Interest, Class S-2(8) Interest, Class
S-2(9) Interest, Class S-2(10) Interest, Class S-2(11) Interest, Class S-2(12)
Interest, Class S-2(13) Interest, Class S-2(14) Interest, Class S-2(15)
Interest, Class S-2(16) Interest, Class S-2(17) Interest, Class S-2(18)
Interest, Class S-2(19) Interest, Class S-2(20) Interest, Class S-2(21)
Interest, Class S-2(22) Interest, Class S-2(23) Interest, Class S-2(24)
Interest, Class S-2(25) Interest, Class S-2(26) Interest, Class S-2(27)
Interest, Class S-2(28) Interest, Class S-2(29) Interest, Class S-2(30)
Interest, Class S-2(31) Interest or Class S-2(32) Interest.

     "Class X Carryover Strip Amount": With respect to the Class X Certificates
on each Distribution Date, all amounts that were distributable on such Class as
Class X Strip Amounts on previous Distribution Dates that remain unpaid.

     "Class X Certificates": The Class X Certificates created pursuant to
Section 3 hereof.

     "Class X Strip Amount": With respect to any Distribution Date, 30 days'
interest on the Subaccount Principal Balance of the Class A (other than the
Class A-IO), Class M and Class B Subaccounts, at a rate equal to the positive
difference, if any, between (i)(A) the Adjusted Weighted Average Net Asset Rate
less (B) 1.00%, for as long as OAC is the Servicer, and 0% thereafter and (ii)
the weighted average of the Pass-Through Rates on the Class A (other than the
Class A-IO), Class M and Class B Subaccounts. Solely for the purposes of those
calculations, the Pass-Through Rates on the Class A (other than the Class A-IO),
Class M and Class B Subaccounts shall be the Pass-Through Rates on the
respective Corresponding Certificates.

     "Closing Date": May 31, 2002.

     "Contract of Insurance Holder": JPMorgan Chase Bank, a New York banking
corporation, or any successor appointed as herein provided. Notices to the
Contract of Insurance Holder shall be sent to JPMorgan Chase Bank, 450 West 33rd
Street, 14th floor New York, NY 10001, Attn: OMI Trust 2002-B, or its successor
in interest.

     "Corporate Trust Office": The address set forth hereinbelow under
"Trustee."

     "Corresponding Certificates": For any Subaccount, the Class of Certificates
bearing the same letter and numerical designation as that borne by such
Subaccount.

                                       11

<PAGE>

     "Corresponding Subaccount" For any Class of Certificates, the Subaccount
bearing the same letter and numerical designation as that borne by such Class.

     "Cross-over Date": The later to occur of (a) the Distribution Date
occurring in December 2006 or (b) the first Distribution Date on which the
percentage equivalent of a fraction (which shall not be greater than 1) the
numerator of which is the sum of the aggregate Adjusted Certificate Principal
Balance of the Subordinated Certificates and the Current Overcollateralization
Amount, for such Distribution Date and the denominator of which is the Pool
Scheduled Principal Balance on such Distribution Date, equals or exceeds 1.90
times the percentage equivalent of a fraction (which shall not be greater than
1) the numerator of which is the sum of the initial aggregate Adjusted
Certificate Principal Balance of the Subordinated Certificates and the Current
Overcollateralization Amount as of May 1, 2002 and the denominator of which is
the Pool Scheduled Principal Balance as of May 1, 2002.

     "Cumulative Realized Losses": With respect to any Distribution Date, the
aggregate Realized Losses incurred on the Assets during the period from May 1,
2002 through the end of the related Prepayment Period.

     "Current Overcollateralization Amount": As of any Distribution Date, the
positive difference, if any, between the Pool Scheduled Principal Balance and
the Certificate Principal Balance of all then outstanding Classes of
Certificates (other than the Class A-IO Certificates).

     "Current Realized Loss Ratio": With respect to any Distribution Date, the
annualized percentage derived from the fraction, the numerator of which is the
sum of the aggregate Realized Losses in respect of the Assets for the three
preceding Prepayment Periods and the denominator of which is the arithmetic
average of the Pool Scheduled Principal Balances for such Distribution Date and
the preceding two Distribution Dates.

     "Cut-off Date": With respect to the Initial Assets, May 1, 2002, and with
respect to the Subsequent Assets, the date such subsequent assets are
transferred to the Trust.

     "Daiwa Assets": The Assets identified on Schedule IIIB hereto.

     "Distribution Date": The first Business Day occurring on or after the 15th
of each month, commencing in June 2002.

     "Excess Subaccount Principal Balance": With respect to each Subaccount, the
excess, if any, of the Subaccount Principal Balance over the Certificate
Principal Balance of the Corresponding Certificates.

     "ERISA Restricted Certificates": The Class B-2, Class X and Class R
Certificates.

     "Floating Rate Determination Date": For any Interest Accrual Period for the
Class A-1 Certificates other than the first Interest Accrual Period, the second
London Banking Day prior to the commencement of such Interest Accrual Period,
and for the first Interest Accrual Period, the Closing Date.

                                       12

<PAGE>

     "Guarantee": The guarantee by the Guarantor, dated as of May 1, 2002, for
the benefit of the Class B-2 Certificateholders.

     "Guarantee Excess Amount": With respect to any Distribution Date, (a) the
positive difference, if any, between (1) distributions to be made with respect
to any Interest Distribution Amount, Carryover Interest Distribution Amount,
Writedown Interest Distribution Amount, Carryover Writedown Interest
Distribution Amount, and Class B-2 Certificateholders' Interest Carryover Amount
pursuant to clauses (v), (xi) and (xii) of Section 5(b) hereof, and (2) an
amount equal to interest accrued at a rate equal to 9.70% per annum for the
related Interest Accrual Period on the Guaranteed Class B-2 Certificate
Principal Balance, and (b) any Principal Distribution Shortfall Carryover Amount
distributable pursuant to clause (xi) under Section 5(b) hereof.

     "Guarantee Payment Amount": With respect to any Distribution Date,

     (a)  the positive difference, if any, between (1) an amount equal to
interest accrued at a rate equal to 9.70% per annum for the related Interest
Accrual Period on the Guaranteed Class B-2 Certificate Principal Balance, and
(2) distributions to be made with respect to any Interest Distribution Amount,
Carryover Interest Distribution Amount, Writedown Interest Distribution Amount,
Carryover Writedown Interest Distribution Amount and Class B-2
Certificateholders' Interest Carryover Amount pursuant to clauses (v), (xi) and
(xiii) of Section 5(b) hereof,

     (b)  after giving effect to the allocation of the Available Distribution
Amount, any due but unpaid principal amounts distributable pursuant to clause
(xi) under Section 5(b) hereof, and

     (c)  if, after giving effect to the distributions of principal amounts
pursuant to clause (xi) under Section 5(b) hereof, the Adjusted Certificate
Principal Balance of the Class B-2 Certificates has been reduced to zero, an
amount equal to the remaining Guaranteed Class B-2 Certificate Balance, if any.

     "Guaranteed Class B-2 Certificate Principal Balance": On any Distribution
Date, the Initial Certificate Principal Balance of the Class B-2 Certificates as
set out in Section 3 hereof, reduced by all prior distributions of principal to
the Class B-2 Certificates.

     "Guarantor": Oakwood Homes Corporation, a North Carolina corporation.

     "Initial Assets": The Assets identified on Schedule I hereto.

     "Institutional Holder": An insurance company whose long-term debt is rated
at least A- (or equivalent rating) by a Rating Agency, or an equivalent rating
from any other nationally recognized statistical rating organization.

     "Interest Accrual Period": With respect to each Distribution Date (i) for
the Class A-1 Certificates, the period commencing on the 15th day of the
preceding month through the 14th day of the month in which such Distribution
Date occurs (except that the first Interest Accrual Period for the Class A-1
Certificates will be the period from the Closing Date through June 14, 2002) and
(ii) for the Class A-2, Class A-3, Class A-4, Class A-IO, Class M and Class B
Certificates, the calendar month preceding the month in which the Distribution
Date occurs.

                                       13

<PAGE>

Interest on the Class A-1 Certificates will be calculated on the basis of a
360-day year and the actual number of days elapsed in the applicable Interest
Accrual Period. Interest on the Class A-2, Class A-3, Class A-4, Class A-IO,
Class M and Class B Certificates will be computed on the basis of a 360-day year
consisting of twelve 30-day months.

     "Interest Computational Components": For each Distribution Date and with
respect to each Class of Certificates (i) the Certificate Principal Balance, if
any, (ii) the unpaid Interest Distribution Amount and Carryover Interest
Distribution Amount from the prior Distribution Date, if any, (iii) the
Writedown Amount, if any, and (iv) the Carryover Writedown Interest Distribution
Amount, if any.

     "Interest Deficiency Amount": With respect to the Class M Certificates or
the Class B Certificates and any Distribution Date, the sum of any of the
Interest Distribution Amount, Carryover Interest Distribution Amount, Writedown
Interest Distribution Amount and Carryover Writedown Interest Distribution
Amount for such Class that would remain unpaid after application of the
Available Distribution Amount in accordance with Section 5 hereof.

     "Interest Deficiency Withdrawal": With respect to any Distribution Date and
the:

     (i)    Class M-1 Certificates, the least of (A) the applicable Interest
Deficiency Amount, (B) the positive difference, if any, between $474,268.80
(three months of interest coverage) and the sum of all previous Interest
Deficiency Withdrawals made with respect to the Class M-1 Certificates and (C)
the amount remaining on deposit in the Certificate Account as of the fourth
Business Day prior to that Distribution Date after excluding the Remittance
Amount;

     (ii)   Class M-2 Certificates, the least of (A) the applicable Interest
Deficiency Amount, (B) the positive difference, if any, between $370,345.00
(three months of interest coverage) and the sum of all previous Interest
Deficiency Withdrawals made with respect to the Class M-2 Certificates and (C)
the amount remaining on deposit in the Certificate Account as of the fourth
Business Day prior to that Distribution Date after excluding the Remittance
Amount;

     (iii)  Class B-1 Certificates, the least of (A) the applicable Interest
Deficiency Amount, (B) the positive difference, if any, between $251,302.50
(three months of interest coverage) and the sum of all previous Interest
Deficiency Withdrawals made with respect to the Class B-1 Certificates and (C)
the amount remaining on deposit in the Certificate Account as of the fourth
Business Day prior to that Distribution Date after excluding the Remittance
Amount; and

     (iv)   Class B-2 Certificates, the least of (A) the applicable Interest
Deficiency Amount, (B) the positive difference, if any, between $578,564.58
(five months of interest coverage) and the sum of all previous Interest
Deficiency Withdrawals made with respect to the Class B-2 Certificates and (C)
the amount remaining on deposit in the Certificate Account as of the fourth
Business Day prior to that Distribution Date after excluding the Remittance
Amount.

     "Interest Distribution Amount": On each Distribution Date, an amount equal
to interest accrued at the applicable Pass-Through Rate for the related Interest
Accrual Period on (i) in the case of each Class of the Class A Certificates or
the Class A Subaccounts, the Certificate Principal Balance or Class A-IO
Notional Principal Balance, as applicable, of such Class or the Subaccount
Principal Balance or Subaccount Notional Balance, as applicable, of such

                                       14

<PAGE>

Subaccount, respectively, immediately prior to that Distribution Date, (ii) in
the case of the Subordinated Certificates or the Corresponding Subaccounts, on
the Adjusted Certificate Principal Balance of such Class or the Subaccount
Principal Balance of such Subaccount, respectively, immediately prior to that
Distribution Date, and (iii) in the case of the Subsidiary Interests, the
related Subsidiary Interest Principal Balance immediately prior to that
Distribution Date.

     "Intermediate REMIC": The Trust REMIC consisting of the Subsidiary
Interests.

     "Intermediate REMIC Residual Interest": The residual interest (as defined
in Code section 860G(a)(2)) in the Intermediate REMIC.

     "Issuing REMIC": The Trust REMIC consisting of the Subaccounts.

     "Issuing REMIC Residual Interest": The residual interest (as defined in
Code section 860G(a)(2)) in the Issuing REMIC.

     "London Banking Day": Any day on which commercial banks and foreign
exchange markets settle payments in London and New York City.

     "Non-Priority Interest Distribution Amount": For any Subaccount, on any
Distribution Date, an amount equal to the positive difference, if any, between
(i) the related Interest Distribution Amount for such Subaccount and (ii) the
related Priority Interest Distribution Amount for such Subaccount.

     "Notional Principal Balance": The Notional Principal Balance of the Class X
Certificates on any date shall equal the sum of all of the Subaccount Principal
Balances on such date.

     "Overcollateralization Reduction Amount": With respect to each Distribution
Date, the positive difference, if any, between the Current Overcollateralization
Amount and the Target Overcollateralization Amount; provided, however, that if
on any Distribution Date the Principal Distribution Tests are not satisfied,
then the Overcollateralization Reduction Amount shall equal zero.

     "Pass-Through Rate": With respect to each Class of Certificates (except the
Class X Certificates and the Residual Certificates) on any Distribution Date,
the per annum rate for such Class set forth in the table in Section 3(a) hereof.
With respect to any Subaccount on any Distribution Date, the per annum rate for
such Subaccount set forth in the table in Section 3(b) hereof. With respect to
any Subsidiary Interest on any Distribution Date, the per annum rate for such
Subsidiary Interest set forth in the table in Section 3(c) hereof.

     "Pooling REMIC": The Trust REMIC consisting of the Assets and the
Distribution Account.

     "Pooling REMIC Residual Interest": The residual interest (as defined in
Code section 860G(a)(2)) in the Pooling REMIC.

     "Pre-Funded Amount": $58,817,750, as reduced from time to time.

                                       15

<PAGE>

     "Pre-Funding Account": The account so designated and established pursuant
to Section 9 hereof, which shall not be an asset of any of the Pooling REMIC,
the Intermediate REMIC or the Issuing REMIC.

     "Pre-Funding Period": The period beginning on the Closing Date and ending
on the earlier of (i) August 14, 2002 or (ii) the date on which there is
$100,000 or less (exclusive of investment earnings) remaining in the Pre-Funding
Account.

     "Principal Distribution Shortfall Carryover Amount": With respect to each
Distribution Date and each Class of Certificates, an amount equal to all
Principal Distribution Amounts distributable on such Class from previous
Distribution Dates that have not yet been distributed on such Class of
Certificates. With respect to each Distribution Date and each Corresponding
Subaccount, an amount equal to all Principal Distribution Amounts distributable
on the Corresponding Certificates from previous Distribution Dates that have not
yet been distributed on such Corresponding Certificates. With respect to each
Distribution Date and each Class of Subsidiary Interests, an amount equal to all
Principal Distribution Amounts distributable on such Class from previous
Distribution Dates that have not yet been distributed on such Class of
Subsidiary Interests.

     "Principal Distribution Tests": With respect to each Distribution Date: (a)
the Average Sixty-Day Delinquency Ratio as of such Distribution Date does not
exceed 7.0%; (b) the Cumulative Realized Losses as of such Distribution Date do
not exceed an amount equal to the percentage set forth below of the initial
aggregate Certificate Principal Balance of all the Certificates:

     Distribution Dates                           Percentage
     ------------------                           ----------

     December 2006 through May 2008                    8.50%

     June 2008 through May 2009                        9.75%

     June 2009 through November 2011                  12.75%

     December 2011 and after                          14.50%;

and (c) the Current Realized Loss Ratio as of such Distribution Date does not
exceed 4.0%.

     "Priority Interest Distribution Amount": For any Subaccount, on any
Distribution Date, an amount equal to the Interest Distribution Amount for the
Corresponding Certificates.

     "Private Certificates": The Class B-2, Class X and Class R Certificates.

     "Qualified Bidders": Firms and institutions that are engaged in the
business of buying and selling manufactured housing paper.

     "Rating Agency": Each of Standard & Poor's Ratings Services (55 Water
Street, New York, New York 10041) and Moody's Investors Service, Inc. (99 Church
Street, New York, New York 10007).

                                       16

<PAGE>

     "Reacquired Assets": The Assets identified on Schedule IIIA hereto.

     "Record Date": With respect to each Distribution Date, the last Business
Day of the month immediately preceding the month in which such Distribution Date
occurs.

     "Regular Certificates": The Class A Certificates, Class M Certificates,
Class B Certificates and Class X Certificates.

     "Residual Certificates": The Class R Certificates or, following the
division of the Class R Certificates into three separately transferable,
certificated and fully registered certificates in accordance with Section 15(b)
hereof, the Class R-1 Certificates, Class R-2 Certificates and Class R-3
Certificates.

     "Seller": OMI Note Trust 2001-A, a Delaware business trust.

     "Servicer's Representations Agreement": The Servicer's Representations
Agreement, dated as of May 1, 2002, by and between OMI and OAC.

     "Servicing Fee Rate": (a) As long as OAC is the Servicer, 1.00% per annum,
or (b) if any other Person is the Servicer, 1.50% per annum, or such lesser
amount as may be agreed to by such successor Servicer and the Trustee.

     "Servicing Transition Account": The account so designated and established
pursuant to Section 8 hereof, which shall not be an asset of any of the Pooling
REMIC, the Intermediate REMIC or the Issuing REMIC.

     "Subaccount": Each of the Class A-1, Class A-2, Class A-3, Class A-4, Class
A-IO, Class M-1, Class M-2, Class B-1 and Class B-2 Subaccounts described in
Section 3 hereof.

     "Subaccount Notional Balance": With respect to the Class A-IO Subaccount,
on any date of determination, an amount equal to the Class A-IO Notional
Principal Balance.

     "Subaccount Principal Balance": With respect to each Subaccount, on any
date of determination, the amount identified as the "Initial Subaccount
Principal Balance" of such Subaccount in Section 3 hereof, minus all amounts
allocated to such Subaccount in reduction of its Subaccount Principal Balance
pursuant to Sections 5(a) and 9 hereof.

     "Subordinated Certificates": The Class M-1, Class M-2, Class B-1, Class
B-2, Class X and Residual Certificates.

     "Subsequent Assets": The Assets identified on Schedule II hereto, if any,
as may be acquired from time to time following the Closing Date.

     "Subsequent Transfer Date": The date on which Subsequent Assets are
transferred to the Trust pursuant to the Sales Agreement and Section 10 hereof.

     "Subsidiary Interest Principal Balance": For any Distribution Date and each
Class of Subsidiary Interests, the amount identified as the Initial Subsidiary
Interest Principal Balance of

                                       17

<PAGE>

such Class in Section 3 hereof, less all amounts previously distributed to such
Class pursuant to Section 5 hereof.

     "Subsidiary Interest Writedown Amount": With respect to each Distribution
Date, the amount, if any, by which (i) the aggregate Subsidiary Interest
Principal Balance of all the Subsidiary Interests after all distributions have
been made on such Subsidiary Interests of such Distribution Date pursuant to
Sections 5(g)(i) and 5(g)(ii) hereof exceeds (ii) the Pool Scheduled Principal
Balance for the next Distribution Date.

     "Subsidiary Interests": Each of the Class S-1 and Class S-2 Interests
described in Section 3 hereof.

     "Target Overcollateralization Amount": With respect to (i) any Distribution
Date prior to the Cross-over Date, shall equal 8.50% of the Pool Scheduled
Principal Balance as of May 1, 2002, and (ii) for any other Distribution Date,
shall equal the lesser of (x) 8.50% of the Pool Scheduled Principal Balance as
of May 1, 2002, and (y) 14.875% of the then current Pool Scheduled Principal
Balance; provided, however, that in no event shall the Target
Overcollateralization Amount be less than 1.00% of the Pool Scheduled Principal
Balance as of May 1, 2002.

     "Total Floor Amount": With respect to any Distribution Date, either (a)
1.00% of the aggregate Pool Scheduled Principal Balance as of May 1, 2002, if
(x) the Class A-1 Certificate Principal Balance, the Class A-2 Certificate
Principal Balance, the Class A-3 Certificate Principal Balance, the Class A-4
Certificate Principal Balance, the Class M-1 Certificate Principal Balance, the
Class M-2 Certificate Principal Balance and the Class B-1 Certificate Principal
Balance have not been reduced to zero immediately prior to such Distribution
Date, and (y) the sum of the Current Overcollateralization Amount and the Class
B-2 Floor Amount is less than 1.00% of the Pool Scheduled Principal Balance as
of May 1, 2002 or (b) zero, in any other case.

     "Trustee": JPMorgan Chase Bank, a New York banking corporation, not in its
individual capacity but solely as Trustee under this Pooling and Servicing
Agreement, or any successor trustee appointed as herein provided. Notices to the
Trustee shall be sent to 450 West 33rd Street, 14th Floor, New York, NY
10001/OMI Trust 2002-A (the "Corporate Trust Office"), or its successor in
interest.

     "Trustee Fee": On each Distribution Date, the sum of (a) the product
obtained by multiplying one-twelfth of the Trustee Fee Rate by the aggregate
Pool Scheduled Principal Balance immediately prior to the preceding Collection
Period (without giving effect to any Principal Prepayments, Net Liquidation
Proceeds and Repurchase Prices received (or Realized Losses incurred) on the day
preceding the beginning of such Collection Period), and (b) the reasonable
out-of-pocket expenses of the Trustee, pursuant to Section 8.05 of the Standard
Terms.

     "Trustee Fee Rate": 0.050% per annum.

     "Trust REMIC": Each of the Pooling REMIC, the Intermediate REMIC and the
Issuing REMIC.

                                       18

<PAGE>

     "Underwriters": Credit Suisse First Boston Corporation (whose address is 11
Madison Avenue, New York, New York 10010) and Merrill Lynch, Pierce, Fenner &
Smith Incorporated (whose address is 250 Vesey Street, World Financial Center,
North Tower, New York, New York 10281).

     "Voting Rights": With respect to each Class of Certificates, the voting
rights set forth in Section 18.

     "Weighted Average Net Asset Rate": With respect to any Distribution Date,
the weighted average of the Asset Rates applicable to the Monthly Payments that
were due during the related Collection Period on Assets that were Outstanding at
the beginning of the related Prepayment Period, less the sum of the Servicing
Fee Rate (if OAC is no longer the Servicer) and the Trustee Fee Rate.

     "Writedown Amount": With respect to each Distribution Date, the amount, if
any, by which (i) the aggregate Certificate Principal Balance of all the
Certificates, after all distributions have been made on the Certificates on such
Distribution Date pursuant to Section 5(b) hereof, exceeds (ii) the Pool
Scheduled Principal Balance for the next Distribution Date.

     "Writedown Interest Distribution Amount": With respect to each Distribution
Date and each Class of Subordinated Certificates, interest accrued during the
related Interest Accrual Period at the applicable Pass-Through Rate on any
related Writedown Amount. With respect to each Distribution Date and each
Corresponding Subaccount, interest accrued during the related Interest Accrual
Period on any related Writedown Amount at the Pass-Through Rate applicable to
the Corresponding Certificates.

     Section 3.  Certificates, Subaccounts and Subsidiary Interests.

     (a)   The aggregate initial principal amount of Certificates that may be
executed and delivered under this Pooling and Servicing Agreement is limited to
$235,271,000, except for Certificates executed and delivered upon registration
of transfer of, or in exchange for, or in lieu of, other Certificates pursuant
to Sections 5.04 or 5.07 of the Standard Terms. The Certificates shall be issued
in eleven Classes having the designations, initial Certificate Principal
Balances, Pass-Through Rates and Final Scheduled Distribution Dates set forth or
described below:

                 Initial Certificate     Pass Through        Final Scheduled
  Designation     Principal Balance          Rate         Distribution Dates(12)
  -----------     -----------------          ----         ------------------
     A-1             $62,300,000              (1)            May 2013
     A-2             $50,200,000              (2)            September 2019
     A-3             $22,500,000              (3)            March 2025
     A-4             $31,806,000              (4)            June 2032
     A-IO                 (5)                 (5)            May 2010
     M-1             $24,896,000              (6)            June 2032
     M-2             $17,428,000              (7)            June 2032
     B-1             $11,826,000              (8)            November 2025

                                       19

<PAGE>

     B-2             $14,315,000              (9)            June 2032
     X                   (10)                 (10)           June 2032
     R                   (11)                 (11)           June 2032

          (1)   The Pass-Through Rate on the Class A-1 Certificates for any
Distribution Date shall be the per annum rate equal to the lesser of (i)
One-Month LIBOR, as determined (except for the initial Distribution Date) on the
applicable Floating Rate Determination Date, plus 0.23% and (ii) the Adjusted
Weighted Average Net Asset Rate. For the initial Distribution Date, the
Pass-Through Rate for the Class A-1 Certificates will be 2.07% per annum, and
the initial Interest Accrual Period for the Class A-1 Certificates will commence
on the Closing Date and end on June 14, 2002.

          (2)   The Pass-Through Rate on the Class A-2 Certificates for any
Distribution Date shall be equal to the lesser of (i) 5.19% per annum and (ii)
the Adjusted Weighted Average Net Asset Rate.

          (3)   The Pass-Through Rate on the Class A-3 Certificates for any
Distribution Date shall be equal to the lesser of (i) 6.06% per annum and (ii)
the Adjusted Weighted Average Net Asset Rate.

          (4)   The Pass-Through Rate on the Class A-4 Certificates for any
Distribution Date shall be equal to the lesser of (i) 7.09% per annum and (ii)
the Adjusted Weighted Average Net Asset Rate.

          (5)   The Class A-IO Certificates are interest only certificates that
have no principal balance but are entitled to distributions of interest at a
Pass-Through Rate for any Distribution Date equal to 6.00% per annum on the
Class A-IO Notional Principal Balance.

          (6)   The Pass-Through Rate on the Class M-1 Certificates for any
Distribution Date shall be equal to the lesser of (i) 7.62% per annum and (ii)
the Adjusted Weighted Average Net Asset Rate.

          (7)   The Pass-Through Rate on the Class M-2 Certificates for any
Distribution Date shall be equal to the lesser of (i) 8.50% per annum and (ii)
the Adjusted Weighted Average Net Asset Rate.

          (8)   The Pass-Through Rate on the Class B-1 Certificates for any
Distribution Date shall be equal to the lesser of (i) 8.50% per annum and (ii)
the Adjusted Weighted Average Net Asset Rate.

          (9)   The Pass-Through Rate on the Class B-2 Certificates for any
Distribution Date shall be equal to the lesser of (i) 9.70% per annum and (ii)
the Adjusted Weighted Average Net Asset Rate.

          (10)  The Class X Certificates shall have no Certificate Principal
Balance and no Pass-Through Rate. The Class X Certificates will represent the
right to receive, on each Distribution Date, the applicable Class X Strip Amount
and any Class X Carryover Strip Amount.

          (11)  The Class R Certificates shall have no Certificate Principal
Balance and no Pass-Through Rate, and shall represent the residual interest in
each of the Pooling REMIC, the Intermediate REMIC and the Issuing REMIC.
Following the division of the Class R Certificates into three separately
transferable, certificated and fully registered certificates in accordance with
Section 15(b) hereof, the Class R-1, Class R-2 and Class R-3 Certificates shall
have no Certificate Principal Balances and no Pass-Through Rates and shall
represent the residual interest in the Issuing REMIC, the Intermediate REMIC and
the Pooling REMIC, respectively.

          (12)  For purposes of Treasury Regulation (S)1.860G-1(a)(4), the
latest possible maturity date of each Class of Certificates shall be the Final
Scheduled Distribution Date.

     (b)  The Subaccounts are being issued in nine classes and are hereby
designated as constituting the "regular interests" in the Intermediate REMIC for
the purposes of Section 860G(a)(1) of the Code. The following terms of the
Subaccounts are irrevocably established as of the Closing Date:

<TABLE>
<CAPTION>
                                                     Initial Subaccount        Final Scheduled
  Subaccount            Pass-Through Rate            Principal Balance        Distribution Date
--------------   -------------------------------   ----------------------   ---------------------
<S>              <C>                               <C>                      <C>
Class A-1        Adjusted Weighted Average Net           $62,300,000               May 2013
                 Asset Rate
Class A-2        Adjusted Weighted Average Net            50,200,000            September 2019
                 Asset Rate
</TABLE>

                                       20

<PAGE>

<TABLE>
<S>                   <C>                                         <C>                        <C>
Class A-3             Adjusted Weighted Average Net               22,500,000                    March 2025
                      Asset Rate

Class A-4             Adjusted Weighted Average Net               31,806,000                     June 2032
                      Asset Rate

Class A-IO            6.00% per annum through and                     (1)                         May 2010
                      including the Distribution
                      Date in May 2010 and 0%
                      thereafter

Class M-1             Adjusted Weighted Average Net               24,896,000                     June 2032
                      Asset Rate

Class M-2             Adjusted Weighted Average Net               17,428,000                     June 2032
                      Asset Rate

Class B-1             Adjusted Weighted Average Net               11,826,000                 November 2025
                      Asset Rate

Class B-2             Adjusted Weighted Average Net               14,315,000                     June 2032
                      Asset Rate
</TABLE>

         (1) The Class A-IO Subaccount has no Subaccount Principal Balance and
is entitled only to distributions of interest at a Pass-Through Rate for any
Distribution Date equal to 6.00% per annum on the Subaccount Notional Balance.

     For purposes of Treasury Regulation (S) 1.860G-1(a)(4), the latest possible
maturity date of each Class of Subaccounts shall be the Final Scheduled
Distribution Date.

     (c) The Subsidiary Interests are being issued in 33 classes and are hereby
designated as constituting the "regular interests" in the Pooling REMIC for the
purposes of Section 860G(a)(1) of the Code. The following terms of the
Subsidiary Interests are irrevocably established as of the Closing Date:

<TABLE>
<CAPTION>
    Subsidiary                                       Initial Subsidiary Interest           Final Scheduled
     Interest            Pass-Through Rate                Principal Balance               Distribution Date
------------------- ----------------------------- ----------------------------------- ---------------------------
<S>                 <C>                              <C>                                  <C>
Class S-1           Weighted Average Net Asset             $174,471,000                       June 2032
                    Rate

Class S-2(1)        Weighted Average Net Asset                1,500,000
                    Rate                                                                      June 2032

Class S-2(2)        Weighted Average Net Asset                1,700,000
                    Rate                                                                      June 2032

Class S-2(3)        Weighted Average Net Asset                1,700,000
                    Rate                                                                      June 2032

Class S-2(4)        Weighted Average Net Asset                1,700,000
                    Rate                                                                      June 2032

Class S-2(5)        Weighted Average Net Asset                1,700,000
                    Rate                                                                      June 2032

Class S-2(6)        Weighted Average Net Asset                1,800,000
                    Rate                                                                      June 2032

Class S-2(7)        Weighted Average Net Asset                1,800,000
                    Rate                                                                      June 2032
</TABLE>

                                       21

<PAGE>

<TABLE>
<CAPTION>
    Subsidiary                                       Initial Subsidiary Interest           Final Scheduled
     Interest            Pass-Through Rate                Principal Balance               Distribution Date
------------------- ----------------------------- ----------------------------------- ---------------------------
<S>                 <C>                              <C>                                  <C>
Class S-2(7)        Weighted Average Net Asset                1,800,000                      June 2032
                    Rate

Class S-2(8)        Weighted Average Net Asset                1,800,000                      June 2032
                    Rate

Class S-2(9)        Weighted Average Net Asset                1,700,000                      June 2032
                    Rate

Class S-2(10)       Weighted Average Net Asset                1,700,000                      June 2032
                    Rate

Class S-2(11)       Weighted Average Net Asset                1,600,000                      June 2032
                    Rate

Class S-2(12)       Weighted Average Net Asset                1,500,000                      June 2032
                    Rate

Class S-2(13)       Weighted Average Net Asset                1,600,000                      June 2032
                    Rate

Class S-2(14)       Weighted Average Net Asset                1,400,000                      June 2032
                    Rate

Class S-2(15)       Weighted Average Net Asset                1,400,000                      June 2032
                    Rate

Class S-2(16)       Weighted Average Net Asset                1,400,000                      June 2032
                    Rate

Class S-2(17)       Weighted Average Net Asset                1,300,000                      June 2032
                    Rate

Class S-2(18)       Weighted Average Net Asset                1,300,000                      June 2032
                    Rate

Class S-2(19)       Weighted Average Net Asset                1,200,000                      June 2032
                    Rate

Class S-2(20)       Weighted Average Net Asset                1,300,000                      June 2032
                    Rate

Class S-2(21)       Weighted Average Net Asset                1,100,000                      June 2032
                    Rate

Class S-2(22)       Weighted Average Net Asset                1,100,000                      June 2032
                    Rate

Class S-2(23)       Weighted Average Net Asset                  900,000                      June 2032
                    Rate

Class S-2(24)       Weighted Average Net Asset                1,000,000                      June 2032
                    Rate

Class S-2(25)       Weighted Average Net Asset                  900,000                      June 2032
                    Rate

Class S-2(26)       Weighted Average Net Asset                  900,000                      June 2032
                    Rate

Class S-2(27)       Weighted Average Net Asset                  800,000                      June 2032
                    Rate
</TABLE>

                                       22

<PAGE>

<TABLE>
<CAPTION>
    Subsidiary                                       Initial Subsidiary Interest           Final Scheduled
     Interest            Pass-Through Rate                Principal Balance               Distribution Date
------------------- ----------------------------- ----------------------------------- ---------------------------
<S>                 <C>                              <C>                                  <C>
Class S-2(28)       Weighted Average Net Asset                   900,000                      June 2032
                    Rate

Class S-2(29)       Weighted Average Net Asset                   800,000                      June 2032
                    Rate

Class S-2(30)       Weighted Average Net Asset                   700,000                      June 2032
                    Rate

Class S-2(31)       Weighted Average Net Asset                   800,000                      June 2032
                    Rate

Class S-2(32)       Weighted Average Net Asset                19,800,000                      June 2032
                    Rate
</TABLE>

     For purposes of Treasury Regulation (S) 1.860G-1(a)(4), the latest possible
maturity date of each Class of Subsidiary Interests shall be the Final Scheduled
Distribution Date.

     Section 4.  Denominations.
                 -------------

     The Book-Entry Certificates will be registered as one or more certificates
in the name of the Clearing Agency or its nominee. Beneficial interests in the
Book-Entry Certificates will be held by the Beneficial Owners through the
book-entry facilities of the Clearing Agency, in minimum denominations of $1,000
and integral multiples of $1 in excess thereof.

     The Class X Certificates and the Residual Certificates will be issued in
certificated, fully registered form. The Class X Certificates and the Residual
Certificates will be issued in minimum Percentage Interests equal to 10%.

     Section 5.  Distributions.
                 -------------

     (a)   On each Distribution Date, after allocation of the Available
Distribution Amount to the Subsidiary Interests in accordance with Section 5(g)
hereof and, where applicable, to OAC, to the extent of the amount thereof
remaining after application pursuant to clauses (1) through (5) of Section 4.03
of the Standard Terms, the Trustee (or the Paying Agent on behalf of the
Trustee) shall withdraw all amounts allocated to the various Subsidiary
Interests and shall allocate such amounts to the various Subaccounts, in the
following manner and in the following order of priority as directed in writing
by the Servicer:

           (i)  First, to each Class A Subaccount, (A) first, its Priority
     Interest Distribution Amount for such Distribution Date, in each case with
     the Available Distribution Amount being allocated among the Class A
     Subaccounts pro rata based on their respective Priority Interest
     Distribution Amounts, and (B) second, the related Carryover Interest
     Distribution Amount for such Distribution Date, if any, plus interest on
     such Carryover Interest Distribution Amount, in each case with the
     Available Distribution Amount being allocated among the Class A Subaccounts
     pro rata based on their respective Carryover Interest Distribution Amounts,
     each at the related Pass-Through Rate;

                                       23

<PAGE>

           (ii)   Second, to the Class M-1 Subaccount, (A) first, the related
     Priority Interest Distribution Amount for such Distribution Date, and (B)
     second, any related Carryover Interest Distribution Amount for such
     Distribution Date plus interest on such Carryover Interest Distribution
     Amount, each at the related Pass-Through Rate;

           (iii)  Third, to the Class M-2 Subaccount, (A) first, the related
     Priority Interest Distribution Amount for such Distribution Date, and (B)
     second, any related Carryover Interest Distribution Amount for such
     Distribution Date plus interest on such Carryover Interest Distribution
     Amount, each at the related Pass-Through Rate;

           (iv)   Fourth, to the Class B-1 Subaccount, (A) first, the related
     Priority Interest Distribution Amount for such Distribution Date, and (B)
     second, any related Carryover Interest Distribution Amount for such
     Distribution Date plus interest on such Carryover Interest Distribution
     Amount, each at the related Pass-Through Rate;

           (v)    Fifth, to the Class B-2 Subaccount, (A) first, the related
     Priority Interest Distribution Amount for such Distribution Date, and (B)
     second, any related Carryover Interest Distribution Amount for such
     Distribution Date plus interest on such Carryover Interest Distribution
     Amount, each at the related Pass-Through Rate;

           (vi)   Sixth, concurrently, to each Class A Subaccount (other than
     the Class A-IO Subaccount), the related Principal Distribution Shortfall
     Carryover Amount for the Class A Subaccounts, if any, for such Distribution
     Date, allocated among the Class A Subaccounts pro rata based on their
     respective Principal Distribution Shortfall Carryover Amounts;

           (vii)  Seventh, sequentially to the Class A-1 Subaccount, the Class
     A-2 Subaccount, the Class A-3 Subaccount, and the Class A-4 Subaccount, the
     Class A Principal Distribution Amount, allocated in the foregoing
     sequential order, in reduction of their respective Subaccount Principal
     Balances; in each case, until the Certificate Principal Balance of the
     Corresponding Class has been reduced to zero;

           (viii) Eighth, to the Class M-1 Subaccount, (A) first, any related
     Writedown Interest Distribution Amount for such Distribution Date, (B)
     second, any related Carryover Writedown Interest Distribution Amount for
     such Distribution Date plus interest on such Carryover Writedown Interest
     Distribution Amount at the related Pass-Through Rate, (C) third, the
     related Principal Distribution Shortfall Carryover Amount for the Class M-1
     Subaccount, if any, for such Distribution Date, and (D) fourth, the Class
     M-1 Principal Distribution Amount, in reduction of the Subaccount Principal
     Balance of such Class, until the Class M-1 Certificate Principal Balance is
     reduced to zero;

           (ix)   Ninth, to the Class M-2 Subaccount, (A) first, any related
     Writedown Interest Distribution Amount for such Distribution Date, (B)
     second, any related Carryover Writedown Interest Distribution Amount for
     such Distribution Date plus interest on such Carryover Writedown Interest
     Distribution Amount at the related Pass-Through Rate, (C) third, the
     related Principal Distribution Shortfall Carryover Amount

                                       24

<PAGE>

     for the Class M-2 Subaccount, if any, for such Distribution Date, and (D)
     fourth, the Class M-2 Principal Distribution Amount, in reduction of the
     Subaccount Principal Balance of such Class, until the Class M-2 Certificate
     Principal Balance is reduced to zero;

           (x)    Tenth, to the Class B-1 Subaccount, (A) first, any related
     Writedown Interest Distribution Amount for such Distribution Date, (B)
     second, any related Carryover Writedown Interest Distribution Amount for
     such Distribution Date plus interest on such Carryover Writedown Interest
     Distribution Amount at the related Pass-Through Rate, (C) third, the
     related Principal Distribution Shortfall Carryover Amount for the Class B-1
     Subaccount, if any, for such Distribution Date, and (D) fourth, the Class
     B-1 Principal Distribution Amount, in reduction of the Subaccount Principal
     Balance of such Class, until the Class B-1 Certificate Principal Balance is
     reduced to zero;

           (xi)   Eleventh, to the Class B-2 Subaccount, (A) first, any related
     Writedown Interest Distribution Amount for such Distribution Date, (B)
     second, any related Carryover Writedown Interest Distribution Amount for
     such Distribution Date plus interest on such Carryover Writedown Interest
     Distribution Amount at the related Pass-Through Rate, (C) third, the
     related Principal Distribution Shortfall Carryover Amount for the Class B-2
     Subaccount, if any, for such Distribution Date, and (D) fourth, the Class
     B-2 Principal Distribution Amount, in reduction of the Subaccount Principal
     Balance of such Class, until the Class B-2 Certificate Principal Balance is
     reduced to zero;

           (xii)  Twelfth, to each Subaccount, (A) first, its Carryover
     Non-Priority Interest Distribution Amount for such Distribution Date, (B)
     second, its Non-Priority Interest Distribution Amount for such Distribution
     Date, and (C) its remaining Subaccount Principal Balance in each case with
     the Available Distribution Amount being allocated among the Subaccounts pro
     rata based upon the total Excess Subaccount Principal Balance remaining to
     be paid with respect to each Subaccount; and

           (xiii) Finally, any remainder to the Holders of the Intermediate
     REMIC Residual Interest.

     (b)   On each Distribution Date, after all Subaccount allocations have been
made as described in Section 5(a) above and Section 9 below, the Trustee (or the
Paying Agent on behalf of the Trustee) shall withdraw all amounts allocated to
the various Subaccounts, and shall distribute such amounts in the following
manner and in the following order of priority:

           (i)    First to each Class of Class A Certificates, (A) first, its
     Interest Distribution Amount for such Distribution Date, in each case with
     the Available Distribution Amount being allocated among such Classes pro
     rata based on their respective Interest Distribution Amounts, and (B)
     second, the related Carryover Interest Distribution Amount, if any, for
     such Distribution Date, plus interest on such Carryover Interest
     Distribution Amount, in each case with the Available Distribution Amount
     being allocated among the Classes of Class A Certificates pro rata based on
     their respective Carryover Interest Distribution Amounts, each at the
     related Pass-Through Rate;

                                       25

<PAGE>

          (ii)   Second, to the Class M-1 Certificates, (A) first, the related
     Interest Distribution Amount for such Distribution Date, and (B) second,
     any related Carryover Interest Distribution Amount for such Distribution
     Date plus interest on such Carryover Interest Distribution Amount, each at
     the related Pass-Through Rate;

          (iii)  Third, to the Class M-2 Certificates, (A) first, the related
     Interest Distribution Amount for such Distribution Date, and (B) second,
     any related Carryover Interest Distribution Amount for such Distribution
     Date plus interest on such Carryover Interest Distribution Amount, each at
     the related Pass-Through Rate;

          (iv)   Fourth, to the Class B-1 Certificates, (A) first, the related
     Interest Distribution Amount for such Distribution Date, and (B) second,
     any related Carryover Interest Distribution Amount for such Distribution
     Date plus interest on such Carryover Interest Distribution Amount, each at
     the related Pass-Through Rate;

          (v)    Fifth, to the Class B-2 Certificates, (A) first, the related
     Interest Distribution Amount for such Distribution Date, and (B) second,
     any related Carryover Interest Distribution Amount for such Distribution
     Date plus interest on such Carryover Interest Distribution Amount, each at
     the related Pass-Through Rate;

          (vi)   Sixth, concurrently, to each Class of the Class A Certificates
     (other than the Class A-IO Certificates), the related Principal
     Distribution Shortfall Carryover Amount for the Class A Certificates, if
     any, for such Distribution Date, allocated among the Class A Certificates
     (other than the Class A-IO Certificates) pro rata based on their respective
     Principal Distribution Shortfall Carryover Amounts;

          (vii)  Seventh, sequentially to the Class A-1 Certificates, the Class
     A-2 Certificates, the Class A-3 Certificates and the Class A-4
     Certificates, the Class A Principal Distribution Amount, allocated in the
     foregoing sequential order, in reduction of their respective Certificate
     Principal Balances, in each case, until it has been reduced to zero;

          (viii) Eighth, to the Class M-1 Certificates, (A) first, any related
     Writedown Interest Distribution Amount for such Distribution Date, (B)
     second, any related Carryover Writedown Interest Distribution Amount for
     such Distribution Date plus interest on such Carryover Writedown Interest
     Distribution Amount at the related Pass-Through Rate, (C) third, the
     related Principal Distribution Shortfall Carryover Amount for the Class M-1
     Certificates, if any, for such Distribution Date, and (D) fourth, the Class
     M-1 Principal Distribution Amount, in reduction of the Certificate
     Principal Balance of such Class, until it is reduced to zero;

          (ix)   Ninth, to the Class M-2 Certificates, (A) first, any related
     Writedown Interest Distribution Amount for such Distribution Date, (B)
     second, any related Carryover Writedown Interest Distribution Amount for
     such Distribution Date plus interest on such Carryover Writedown Interest
     Distribution Amount at the related Pass-Through Rate, (C) third, the
     related Principal Distribution Shortfall Carryover Amount for the Class M-2
     Certificates, if any, for such Distribution Date, and (D) fourth, the

                                       26

<PAGE>

     Class M-2 Principal Distribution Amount, in reduction of the Certificate
     Principal Balance of such Class, until it is reduced to zero;

          (x)    Tenth, to the Class B-1 Certificates, (A) first, any related
     Writedown Interest Distribution Amount for such Distribution Date, (B)
     second, any related Carryover Writedown Interest Distribution Amount for
     such Distribution Date plus interest on such Carryover Writedown Interest
     Distribution Amount at the related Pass-Through Rate, (C) third, the
     related Principal Distribution Shortfall Carryover Amount for the Class B-1
     Certificates, if any, for such Distribution Date, and (D) fourth, the Class
     B-1 Principal Distribution Amount, in reduction of the Certificate
     Principal Balance of such Class, until it is reduced to zero;

          (xi)   Eleventh, to the Class B-2 Certificates, (A) first, any related
     Writedown Interest Distribution Amount for such Distribution Date, (B)
     second, any related Carryover Writedown Interest Distribution Amount for
     such Distribution Date plus interest on such Carryover Writedown Interest
     Distribution Amount at the related Pass-Through Rate, (C) third, the
     related Principal Distribution Shortfall Carryover Amount for the Class B-2
     Certificates, if any, for such Distribution Date, and (D) fourth, the Class
     B-2 Principal Distribution Amount, in reduction of the Certificate
     Principal Balance of such Class, until it is reduced to zero;

          (xii)  Twelfth, if OAC is the Servicer, to the Servicer in the
     following Order: first, the entire Servicing Fee with respect to the
     related Collection Period, and thereafter all Servicing Fees from previous
     Distribution Dates remaining unpaid;

          (xiii) Thirteenth, sequentially, (A) first, for deposit in the
     Certificateholders' Interest Carryover Account, the Class X Strip Amounts
     in an amount equal to the Class B-2 Certificateholders' Interest Carryover
     Amount in respect of the Class B-2 Certificates, if any, for such
     Distribution Date, and (B) second, to the Class B-2 Certificates, the Class
     B-2 Certificateholders' Interest Carryover Amount in respect of the Class
     B-2 Certificates, if any, for such Distribution Date;

          (xiv)  Fourteenth, sequentially (A) to each Class of Class A
     Certificates (other than the Class A-IO Certificates) in the manner
     provided in Subparagraph (vii) above, (B) to the Class M-1 Certificates,
     (C) to the Class M-2 Certificates, (D) to the Class B-1 Certificates and
     (E) to the Class B-2 Certificates, in that order, the Accelerated Principal
     Distribution Amount for such Distribution Date, in reduction of the
     Certificate Principal Balance of each Class until it has been reduced to
     zero;

          (xv)   Fifteenth, to the Class X Certificates (less amounts deposited
     in the Certificateholders' Interest Carryover Account on such Distribution
     Date), in the following sequential order:

                 (A) the current Class X Strip Amount; and

                 (B) any Class X Carryover Strip Amount;

                                       27

<PAGE>

          (xvi)  Sixteenth, to the Class X Certificates, any amounts remaining
     in the Certificateholders' Interest Carryover Account after all payments
     made pursuant to Section 5(b)(xii) above; and

          (xvii) Finally, any remainder to the Holders of the Issuing REMIC
     Residual Interest.

     (c)  On each Distribution Date for which the applicable Remittance Report
indicates that one or more Interest Deficiency Withdrawals is required, after
making the withdrawals and applications described in Section 5(a) and (b) above,
the Trustee (or the Paying Agent on behalf of the Trustee) shall withdraw from
the Certificate Account and allocate the Interest Deficiency Withdrawal, based
upon the information set forth in the related Remittance Report, in the
following manner and in the following order of priority:

          (i)    to the Class M-1 Subaccount, the Interest Deficiency Withdrawal
     for such Class, if any;

          (ii)   to the Class M-2 Subaccount, the Interest Deficiency Withdrawal
     for such Class, if any;

          (iii)  to the Class B-1 Subaccount, the Interest Deficiency Withdrawal
     for such Class, if any;

          (iv)   to the Class B-2 Subaccount, the Interest Deficiency Withdrawal
     for such Class, if any; and

          (v)    Finally, any remainder to Holders of the Intermediate REMIC
     Residual Interest.

     (d)  On each Distribution Date, after all Subaccount allocations have been
made as described in Section 5(c) above, the Trustee (or the Paying Agent on
behalf of the Trustee) shall withdraw all amounts allocated to the various
Subaccounts pursuant to Section 5(c) above, and shall distribute such amounts in
the following manner and in the following order of priority all in accordance
with the related Remittance Report:

          (i)    to the Class M-1 Certificates, the Interest Deficiency
     Withdrawal for such Class, if any;

          (ii)    to the Class M-2 Certificates, the Interest Deficiency
     Withdrawal for such Class, if any;

          (iii)  to the Class B-1 Certificates, the Interest Deficiency
     Withdrawal for such Class, if any;

          (iv)   to the Class B-2 Certificates, the Interest Deficiency
     Withdrawal for such Class, if any; and

                                       28

<PAGE>

          (v)    Finally, any remainder to the holders of the Issuing REMIC
     Residual Interest.

     (e)  All distributions or allocations made with respect to each Class on
each Distribution Date shall be allocated pro rata among the outstanding
Certificates of such Class based on their respective Percentage Interests. So
long as the Book-Entry Certificates are registered in the name of a Clearing
Agency or its nominee, the Trustee shall make all distributions or allocations
on such Certificates by wire transfers of immediately available funds to the
Clearing Agency or its nominee. In the case of Certificates issued in
fully-registered, certificated form, payment shall be made either (i) by check
mailed to the address of each Certificateholder as it appears in the Certificate
Register on the Record Date immediately prior to such Distribution Date or (ii)
by wire transfer of immediately available funds to the account of a Holder at a
bank or other entity having appropriate facilities therefor, if such Holder
shall have so notified the Trustee in writing at least five Business Days prior
to the Record Date immediately prior to such Distribution Date and such Holder
is (A) with respect to any Class A, Class M or Class B Certificates issued after
the Closing Date in certificated, fully-registered form, the registered owner of
Class A, Class M or Class B Certificates with an aggregate initial Certificate
Principal Balance (or with respect to the Class A-IO Certificates, a notional
principal balance) of at least $1,000,000, and (B) with respect to the Residual
Certificates or Class X Certificates, the registered owner of the Residual
Certificates or Class X Certificates evidencing an aggregate Percentage Interest
of at least 50%. The Trustee may charge any Holder its standard wire transfer
fee for any payment made by wire transfer. Final distribution on the
Certificates will be made only upon surrender of the Certificates at the offices
of the Trustee set forth in the notice of such final distribution sent by the
Trustee to all Certificateholders pursuant to Section 9.01 of the Standard
Terms. All sums distributed on the Certificates shall be payable in the coin or
currency of the United States of America as at the time of payment is legal
tender for the payment of public and private debts.

     (f) (i)     Any amounts remaining in the Distribution Account on any
Distribution Date after all allocations and distributions required to be made by
this Pooling and Servicing Agreement have been made, and any amounts remaining
in the Pooling REMIC after payment in full of all of the Regular Interests
therein and any administrative expenses associated with the Trust, will be
distributed to the Holders of the Pooling REMIC Residual Interest.

          (ii)   Any amounts remaining in the Subsidiary Interests on any
     Distribution Date after all allocations and distributions required to be
     made by this Pooling and Servicing Agreement have been made, and any
     amounts remaining in the Intermediate REMIC after payment in full of all of
     the Regular Interests therein and any administrative expenses associated
     with the Trust, will be distributed to the Holders of the Intermediate
     REMIC Residual Interest.

          (iii)  Any amounts remaining in the Subaccounts on any Distribution
     Date after all distributions required to be made by this Pooling and
     Servicing Agreement have been made, and any amounts remaining in the
     Issuing REMIC after payment in full of the Regular Interests therein and
     any administrative expenses associated with the Trust, will be distributed
     to the Holders of the Issuing REMIC Residual Interest.

                                       29

<PAGE>

     (g)  On each Distribution Date, the Subsidiary Interests shall
receive distributions, to the extent of the Available Distribution Amount, in
the following order of priority:

          (i)    first, each of the Class S-1 and Class S-2 Interests shall
     receive pro rata, based on their respective entitlements, (i) their
     Interest Distribution Amounts, plus (ii) any Carryover Interest
     Distribution Amount with respect to such Class;

          (ii)   second, distributions of principal (including any Principal
     Distribution Shortfall Carryover Amounts) shall be made to the Class S-1
     and Class S-2 Interests sequentially, first to the Class S-1 Interest until
     the Subsidiary Interest Principal Balance of such Class has been reduced to
     zero, and second to the Class S-2 Interests, sequentially in numeric order,
     until the Subsidiary Interest Principal Balance of each such Class has been
     reduced to zero, provided, that for purposes of this Section 5(g)(ii), any
     Subsidiary Interest Writedown Amounts shall be treated as distributions of
     principal, and shall reduce the Subsidiary Interest Principal Balance of
     the Class S-1 Interest until its Subsidiary Interest Principal Balance has
     been reduced to zero, and then shall reduce the Subsidiary Interest
     Principal Balances of the Class S-2 Interests, in numeric order, until the
     Subsidiary Interest Principal Balances thereof have been reduced to zero;
     and

          (iii)  third, any amounts remaining to the Holders of the Pooling
     REMIC Residual Interest.

     Section 6.  Guarantee.
                 ---------

     (a)  On any Distribution Date, the Guarantor is hereby obligated to pay the
Guarantee Payment Amount, if any, for the benefit of the holders of the Class
B-2 Certificates.

     (b)  No later than 1:00 p.m. New York City time on each Remittance Date,
after taking into account the amounts allocated to the various Subaccounts in
accordance with Section 5(a) hereof, the Trustee shall, in accordance with the
related Remittance Report and in accordance with the terms of the Guarantee,
notify the Guarantor of any Guarantee Payment Amount payable under the Guarantee
on the related Distribution Date. In addition, the Servicer shall notify the
Guarantor as soon as practical (but no later than the related Remittance Date)
after determining that a Guarantee Payment Amount shall be payable under the
Guarantee on the related Distribution Date. Upon receipt of notice as described
above, the Guarantor shall be required to deliver the Guarantee Payment Amount,
if any, on or prior to 10:00 a.m. on the Distribution Date for the related
Distribution Date. Such Guarantee Payment Amount received by the Trustee shall
be paid to the Holders of the Class B-2 Certificates on such Distribution Date
(or such later date, if such amounts are received subsequent to such
Distribution Date). In no event shall the Guarantee Payment Amount be
distributed on any Class of Certificates other than the Class B-2 Certificates
and any such amounts received by the Trustee which are not distributable to the
Class B-2 Certificates shall be returned by the Trustee to the Guarantor. Any
Guarantee Payment Amounts made by the Guarantor to the Trustee shall be made in
cash and shall be considered to be payments made outside of the Issuing REMIC,
the Intermediate REMIC and the Pooling REMIC and shall be considered to be made
directly to the holders of the Class B-2 Certificates and not payments made to
the Issuing REMIC in the nature of a guarantee within the meaning of I.R.C. (S)
860G(d)(2)(B).

                                       30

<PAGE>

     (c)  On each Distribution Date, the Guarantor is entitled to receive any
Guarantee Excess Amount. At such time as the Guaranteed Class B-2 Certificate
Principal Balance has been reduced to zero, the Guarantor will be entitled to
receive any subsequent distributions with respect to the Class B-2 Certificates
as set forth in Section 5 hereof (which amounts will constitute Guarantee Excess
Amount) from the Class B-2 Certificateholders, and such payment shall be
considered to be made outside the Issuing REMIC, the Intermediate REMIC and the
Pooling REMIC. The Class B-2 Certificateholders shall be deemed to authorize the
Trustee to make any and all such payments to the Guarantor on their behalf. All
Guarantee Excess Amounts will be deemed to be reimbursements for prior Guarantee
Payment Amounts.

     Section 7. Establishment of Certificateholders' Interest Carryover Account.
                ---------------------------------------------------------------

     No later than the Closing Date, the Trustee will establish and maintain the
Certificateholders' Interest Carryover Account as a non-interest bearing trust
account. The Certificateholders' Interest Carryover Account shall be an Eligible
Account. The Certificateholders' Interest Carryover Account will not be an asset
of any of the Pooling REMIC, the Intermediate REMIC, or the Issuing REMIC. For
federal income tax purposes, the holders of the Class X Certificates will be
treated as the owners of the Certificateholders' Interest Carryover Account and
the Trustee and the holders of the Class X Certificates shall treat amounts
distributed by the Issuing REMIC to the Certificateholders' Interest Carryover
Account as having been distributed with respect to the Class X Certificates and
as reducing the Class X Strip Amount or the Class X Carryover Strip Amount, as
applicable. Distributions to the holders of the Class X Certificates out of the
Certificateholders' Interest Carryover Account shall not be considered to be
distributions from any of the Pooling REMIC, the Intermediate REMIC, or the
Issuing REMIC. The parties hereto intend and agree to treat the
Certificateholders' Interest Carryover Account as an arrangement described in
Treasury Regulations Section 1.61-13(b); provided, that if the Internal Revenue
Service does not permit such treatment, the parties hereto intend and agree
that, solely for federal and, to the extent applicable, state and local tax
purposes, (i) if the Class X Certificates are held by a single Holder, that the
assets and liabilities of the Certificateholders' Interest Carryover Account be
treated solely for federal income tax purposes as assets and liabilities of the
Class X Certificateholder pursuant to Treasury Regulations Section
301.7701-3(b)(ii), and (ii) if the Class X Certificates are held by more than
one Holder, the Certificateholders' Interest Carryover Account be treated solely
for federal income tax purposes as a partnership pursuant to Treasury
Regulations Section 301.7701-3(b)(ii), in which event each Class X
Certificateholder, including all successors to the original Class X
Certificateholder, irrevocably elects under Section 761 of the Code to exclude
the Certificateholders' Interest Carryover Account from the application of
Subchapter K of the Code. The Trustee shall separately report to any Class X
Certificateholders amounts deposited into and paid to Class X Certificateholders
from the Certificateholders' Interest Carryover Account. Amounts on deposit in
the Certificateholders' Interest Carryover Account shall not be reinvested.

     Section 8. Servicing Transition Account.
                ----------------------------

     (a)  The Trustee shall establish and maintain at the Corporate Trust Office
a separate trust account titled "JPMorgan Chase Bank, as Trustee of OMI Trust
2002-B, Servicing Transition Account" (the "Servicing Transition Account").

                                       31

<PAGE>

     (b) On the Closing Date, the Servicer shall deposit $175,000 into the
Servicing Transition Account.

     (c) The Trustee shall release amounts on deposit in the Servicing
Transition Account to the successor Servicer of OAC or to the Trustee, if any,
from time to time upon the receipt of written certification of such successor
Servicer that OAC has not reimbursed to such successor Servicer costs and
expenses incurred by such successor Servicer pursuant to Section 7.02 of the
Standard Terms or, with respect to the Trustee, to reimburse the Trustee for its
costs and expenses (including, without limitation, the fees and expenses of its
counsel and agents) incurred in connection with such servicing transition. Each
such certification shall list such reimbursable expenses in reasonable detail.

     (d) On the earlier of (i) the date that this Agreement is terminated and
(ii) the date the long-term senior debt rating of OHC is rated at least "Baa3"
by Moody's and "BBB-" by Standard & Poor's, the Trustee shall withdraw (or
direct the holder of the applicable account to withdraw) all amounts on deposit
in the Servicing Transition Account and pay such amounts to OAC and at such time
the Servicing Transition Account shall be closed.

     (e) The Servicing Transition Account shall be part of the Trust, but not
part of the Pooling REMIC, the Intermediate REMIC or the Issuing REMIC. The
Trustee, on behalf of the Trust, shall be the legal owner of the Servicing
Transition Account. The Servicing Transition Account shall be an "outside
reserve fund" within the meaning of Treasury regulation ss. 1.860G-2(h) and
shall be treated as beneficially owned for federal income tax purposes by OAC.

     Section 9. Allocation of Writedown Amounts.
                -------------------------------

     On each Distribution Date, after all required distributions have been made
on the Certificates pursuant to Section 5 above, the Writedown Amount, if any,
shall be allocated on such Distribution Date in the following manner and in the
following order of priority:

     (a) First, to the Class B-2 Subaccount, to be applied in reduction of the
Adjusted Subaccount Principal Balance of such Subaccount, until the Adjusted
Subaccount Principal Balance has been reduced to zero;

     (b) Second, to the Class B-1 Subaccount, to be applied in reduction of the
Adjusted Subaccount Principal Balance of such Subaccount, until the Adjusted
Subaccount Principal Balance has been reduced to zero;

     (c) Third, to the Class M-2 Subaccount, to be applied in reduction of the
Adjusted Subaccount Principal Balance of such Subaccount, until the Adjusted
Subaccount Principal Balance has been reduced to zero; and

     (d) Finally, to the Class M-1 Subaccount, to be applied in reduction of the
Adjusted Subaccount Principal Balance of such Subaccount, until the Adjusted
Subaccount Principal Balance has been reduced to zero;

     (e) Writedown Amounts allocated to the Class B-2, Class B-1, Class M-2 and
Class M-1 Subaccounts pursuant to this Section 9 shall be allocated to the Class
B-2, Class B-1, Class

                                       32

<PAGE>

M-2 and Class M-1 Certificates, respectively, until the Adjusted Certificate
Principal Balance of each such Class has been reduced to zero.

     Section 10.  Pre-Funding Account.
                  -------------------

     (a) On or before the Closing Date, the Trustee shall establish a
pre-funding account (the "Pre-Funding Account"), which must be an Eligible
Account. The Pre-Funding Account is to be held by and for the benefit of the
Trustee on behalf of the Certificateholders, and shall be either in the
Trustee's name or designated in a manner that reflects the custodial nature of
the account and that all funds (excluding investment earnings thereon) in such
account are held for the benefit of the Trustee.

     (b) On or before the Closing Date, OMI shall deposit $58,817,750 in the
Pre-Funding Account. Amounts on deposit in the Pre-Funding Account shall be
withdrawn by the Trustee as follows:

          (i)   Pursuant to and in accordance with the Sales Agreement and a
     notice of direction from an officer of OMI substantially in the form of
     Exhibit PF attached hereto, on any Subsequent Transfer Date, the Trustee
     shall withdraw an amount equal to 100% of the Scheduled Principal Balance
     as of the related Subsequent Transfer Date of each Subsequent Asset
     transferred and assigned to the Trustee on such Subsequent Transfer Date
     and pay such amount to or upon the order of OMI with respect to such
     transfer and assignment.

          (ii)  On each Subsequent Transfer Date, OMI shall sell to the Trustee,
     without recourse, the Subsequent Assets referred to on the related Exhibit
     PF pursuant to the provisions of Article II of the Standard Terms, and this
     Agreement. On each Subsequent Transfer Date Servicer shall execute and
     deliver a Servicer Custodial Certification pursuant to Section 2.02(b) of
     the Standard Terms, and the Trustee shall execute and deliver an Initial
     Certification pursuant to Section 2.03(c)(1) of the Standard Terms.

          (iii) On the last day of the Pre-Funding Period, the Trustee shall
     deposit into the Distribution Account any amounts then remaining in the
     Pre-Funding Account, net of investment earnings, which amounts shall be
     held uninvested in the Distribution Account and will be included in the
     Available Distribution Amount for the immediately following Distribution
     Date and distributed as an additional prepayment of principal to
     Certificateholders in accordance with the Remittance Report prepared by the
     Servicer then entitled to such distributions.

                                       33

<PAGE>

     (c) The Pre-Funding Account shall be part of the Trust, but not part of the
Pooling REMIC, the Intermediate REMIC or the Issuing REMIC. The Trustee, on
behalf of the Trust, shall be the legal owner of the Pre-Funding Account. OMI
shall be the beneficial owner of the Pre-Funding Account, subject to the
foregoing power of the Trustee to transfer amounts in the Pre-Funding Account to
the Distribution Account. Funds in the Pre-Funding Account shall, at the
direction of the Servicer, be invested in Eligible Investments that mature no
later than the Business Day prior to the next occurring Distribution Date. All
amounts earned on deposits in the Pre-Funding Account shall be taxable to OMI.
The Trustee shall release to OMI all investment earnings in the Pre-Funding
Account on the Business Day immediately following the end of the Pre-Funding
Period.

     (d) The Trustee shall clear and terminate the Pre-Funding Account upon the
earlier to occur of (i) the Distribution Date immediately following the end of
the Pre-Funding Period and (ii) the date on which an Event of Default occurs
under this Agreement, with any amounts remaining on deposit therein being paid
to the holders of Certificates then entitled to distributions in respect of
principal. Withdrawals pursuant to clauses (b)(i)-(iii) and this clause (d)
shall be treated as contributions of cash to the Pooling REMIC on the date of
withdrawal.

     (e) Each Subsequent Asset acquired by the Trust with funds from the
Pre-Funding Account shall be acquired pursuant to a fixed price contract within
the meaning of I.R.C. (S)860G(a)(3)(A)(ii).

     Section 11. Capitalized Interest Account.
                 ----------------------------

     (a) On or before the Closing Date, the Trustee shall establish the
Capitalized Interest Account, which must be an Eligible Account. The Capitalized
Interest Account is to be held by and for the benefit of the Trustee on behalf
of the Certificateholders, and shall be either in the Trustee's name or
designated in a manner that reflects the custodial nature of the account and
that all funds (including investment earnings thereon) in such account are held
for the benefit of the Trustee.

     (b) On or before the Closing Date, OMI shall deposit $373,000 in the
Capitalized Interest Account. After the Closing Date, OMI shall deposit
additional amounts in the Capitalized Interest Account to the extent that, after
the withdrawal and application of funds from the Capitalized Interest Account
pursuant to this Section 11, any deficiency in the Available Distribution Amount
remains. The Trustee shall, on the Business Day immediately preceding each
Capitalized Interest Account Distribution Date, withdraw the Capitalized
Interest Account Withdrawal Amount (as calculated by the Servicer and set forth
in the related Remittance Report pursuant to Section 12(a)(ix) hereof), if any,
from the Capitalized Interest Account for deposit in the Distribution Account in
order to pay:

          (i) first, any deficiency in the Available Distribution Amount to pay
     the related Interest Distribution Amount and any related Carryover Interest
     Distribution Amount for the Class A Certificates for such Distribution
     Date,

                                       34

<PAGE>

          (ii)   second, any deficiency in the Available Distribution Amount to
     pay the related Interest Distribution Amount and any related Carryover
     Interest Distribution Amount for the Class M-1 Certificates for such
     Distribution Date,

          (iii)  third, any deficiency in the Available Distribution Amount to
     pay the related Interest Distribution Amount and any related Carryover
     Interest Distribution Amount for the Class M-2 Certificates for such
     Distribution Date,

          (iv)   fourth, any deficiency in the Available Distribution Amount to
     pay the related Interest Distribution Amount and any related Carryover
     Interest Distribution Amount for the Class B-1 Certificates for such
     Distribution Date,

          (v)    fifth, any deficiency in the Available Distribution Amount to
     pay the related Interest Distribution Amount and any related Carryover
     Interest Distribution Amount for the Class B-2 Certificates for such
     Distribution Date; and

          (vi)   sixth, any deficiency in the Available Distribution Amount to
     pay the related Interest Distribution Amount and any related Carryover
     Interest Distribution Amount for the Class X Certificates for such
     Distribution Date.

     (c)  The Capitalized Interest Account shall be part of the Trust, but not
part of the Pooling REMIC, the Intermediate REMIC or the Issuing REMIC. The
Trustee, on behalf of the Trust, shall be the legal owner of the Capitalized
Interest Account. OMI shall be the beneficial owner of the Capitalized Interest
Account, subject to the foregoing power of the Trustee to withdraw amounts from
the Capitalized Interest Account. Funds in the Capitalized Interest Account
shall, at the direction of the Servicer, be invested in Eligible Investments
that mature no later than the Business Day prior to the related Capitalized
Interest Account Distribution Date. All amounts earned on deposits in the
Capitalized Interest Account shall be taxable to OMI. The Trustee shall release
to OMI all investment earnings in the Capitalized Interest Account upon written
notice from an officer of OMI to the Trustee that all of the Subsequent Assets
have been transferred to the Trust. The Capitalized Interest Account shall be an
"outside reserve fund" within the meaning of Treasury regulation ss.
1.806G-2(h). The owner of the Capitalized Interest Account for tax purposes
shall be OMI. For all federal tax purposes, amounts transferred by any of the
Pooling REMIC, the Intermediate REMIC, or the Issuing REMIC to the Capitalized
Interest Account shall be treated as amounts distributed by the applicable REMIC
to OMI.

     (d)  The Trustee shall release to OMI all funds remaining in the
Capitalized Interest Account on the Distribution Date immediately following the
final transfer of Subsequent Assets to the Trust upon written notice from an
officer of OMI to the Trustee (which may be contained in the Notice and
Direction to the Trustee under Section 10(b)(i) hereof) that all of the
Subsequent Assets have been transferred to the Trust.

     Section 12.  Remittance Reports.
                  ------------------

     (a)  The Remittance Report for each Distribution Date shall identify the
following items, in addition to the items specified in Section 4.01 of the
Standard Terms:

                                       35

<PAGE>

         (i)   the Interest Distribution Amount for each Class of the
     Certificates for such Distribution Date (which shall equal the Priority
     Interest Distribution Amount for the Corresponding Subaccount) and the
     Carryover Interest Distribution Amount, as well as any Writedown Interest
     Distribution Amount and any Carryover Writedown Interest Distribution
     Amount, for each Class of the Certificates for such Distribution Date, and
     the amount of interest of each such category to be distributed on each such
     Class based upon the Available Distribution Amount for such Distribution
     Date;

         (ii)  the amount to be distributed on such Distribution Date on each
     Class of the Certificates to be applied to reduce the Certificate Principal
     Balance of such Class (which will be equal to the amount to be allocated on
     such Distribution Date on the Corresponding Subaccount to be applied to
     reduce the Subaccount Principal Balance of such Subaccount), separately
     identifying any portion of such amount attributable to any prepayments, the
     amount to be distributed to reduce the Principal Distribution Shortfall
     Carryover Amount on each such Class based upon the Available Distribution
     Amount for such Distribution Date and separately identifying any
     Accelerated Principal Distribution Amount to be distributed on the
     Certificates, the Current Overcollateralization Amount and the Target
     Overcollateralization Amount;

         (iii) the aggregate amount, if any, to be distributed on the Residual
     Certificates;

         (iv)  the amount of any Writedown Amounts to be allocated to reduce the
     Certificate Principal Balance of any Class of Subordinated Certificates
     (which will be equal to the amount of any Writedown Amount to be allocated
     to the Corresponding Subaccount) on such Distribution Date;

         (v)   the Certificate Principal Balance of each Class of the
     Certificates (which will be equal to the Subaccount Principal Balance of
     the Corresponding Subaccount) and the Adjusted Certificate Principal
     Balance of each Class of the Offered Subordinated Certificates (which will
     be equal to the Adjusted Subaccount Principal Balance of the Corresponding
     Subaccount) after giving effect to the distributions to be made (and any
     Writedown Amounts to be allocated) on such Distribution Date;

         (vi)  the aggregate Interest Distribution Amount remaining unpaid, if
     any, and the aggregate Carryover Interest Distribution Amount remaining
     unpaid, if any, for each Class of Certificates (which will be equal to the
     Priority Interest Distribution Amount and Carryover Interest Distribution
     Amount remaining unpaid on the Corresponding Subaccount), after giving
     effect to all distributions to be made on such Distribution Date;

         (vii) the aggregate Writedown Interest Distribution Amount remaining
     unpaid, if any, and the aggregate Carryover Writedown Interest Distribution
     Amount remaining unpaid, if any, for each Class of Certificates (which will
     be equal to such amounts remaining unpaid on the Corresponding Subaccount),
     after giving effect to all distributions to be made on such Distribution
     Date;

                                       36

<PAGE>

         (viii) the aggregate Principal Distribution Shortfall Carryover Amount
     remaining unpaid, if any, for each Class of Certificates, after giving
     effect to the distributions to be made on such Distribution Date;

         (ix)   the Pre-Funded Amount, if any, in the Pre-Funding Account on
     such Distribution Date, the amount of funds, if any, used to purchase
     Subsequent Assets during the Pre-Funding Period, the Capitalized Interest
     Account Withdrawal Amount, and the amount of funds, if any, allocated as a
     prepayment of principal at the end of the Pre-Funding Period;

         (x)    the Class B-2 Certificateholders' Interest Carryover Amount in
     respect of the Class B-2 Certificates; and

         (xi)   the amount of the Guarantee Payment Amount, if any, for such
     Distribution Date, the Aggregate amount of any unpaid Guarantee Payment
     Amounts for any previous Distribution Dates, and the Guaranteed Class B-2
     Certificate Principal Balance immediately prior to such Distribution Date.

     In the case of information furnished pursuant to clauses (i), (ii) and
(iii) above, the amounts shall be expressed, with respect to any Class A, Class
M or Class B Certificate, as a dollar amount per $1,000 denomination.

     (b) In addition to making available a copy of the related Remittance Report
to each Certificateholder on each Distribution Date in accordance with Section
4.01 of the Standard Terms, on each Distribution Date, the Trustee shall make
available a copy of the related Remittance Report to the Underwriters (to the
attention of the person, if any, reported to the Trustee by the Underwriters).

     Section 13. Limited Right of Servicer to Retain Servicing Fees from
                 -------------------------------------------------------
Collections.
-----------

     The Servicer may retain its Servicing Fee and any other servicing
compensation provided for herein and in the Standard Terms from gross interest
collections on the Assets prior to depositing such collections into the
Certificate Account; provided, however, that OAC as Servicer may only so retain
its Servicing Fee in respect of a Distribution Date from gross interest
collections on the Assets to the extent that the amounts on deposit in the
Certificate Account and attributable to the Available Distribution Amount for
such Distribution Date exceed the sum of all amounts to be allocated and
distributed on such Distribution Date pursuant to clauses (i) through (xi) under
Section 5(b) hereof.

     Section 14. Determination of One-Month LIBOR.
                 --------------------------------

     (a) The Class A-1 Certificates will be entitled to receive on each
Distribution Date interest distributions at the Pass-Through Rate for such Class
as specified in Section 3 hereof.

                                       37

<PAGE>

     (b) With respect to the Class A-1 Certificates, One-Month LIBOR shall be
determined as follows:

         For each Floating Rate Determination Date, the Servicer will determine
         the arithmetic mean of the London Interbank Offered Rate ("LIBOR")
         quotations for one-month Eurodollar deposits ("One-Month LIBOR") for
         the succeeding Interest Accrual Period for the Class A-1 Certificates
         on the basis of the Reference Banks' offered LIBOR quotations provided
         to the Servicer as of 11:00 a.m. (London time) for such Floating Rate
         Determination Date. As used herein with respect to a Floating Rate
         Determination Date, "Reference Banks" means leading banks engaged in
         transactions in Eurodollar deposits in the international Eurocurrency
         market (i) with an established place of business in London, (ii) whose
         quotations appear on the Bloomberg Screen US0001M Index Page for the
         Floating Rate Determination Date in question and (iii) which have been
         designated as such by the Servicer and are able and willing to provide
         such quotations to the Servicer for each Floating Rate Determination
         Date; and "Bloomberg Screen US0001M Index Page" means the display
         designated as page US0001M on the Bloomberg Financial Markets
         Commodities News (or such other pages as may replace such page on that
         service for the purpose of displaying LIBOR quotations of major
         banks). If any Reference Bank should be removed from the Bloomberg
         Screen US0001M Index Page or in any other way fails to meet the
         qualifications of a Reference Bank, the Servicer may, in its sole
         discretion, designate an alternative Reference Bank.

         For each Floating Rate Determination Date, One-Month LIBOR for the
         next succeeding Interest Accrual Period for the Class A-1 Certificates
         will be established by the Servicer as follows:

         (i)  If, for any Floating Rate Determination Date, two or more of the
     Reference Banks provide offered One-Month LIBOR quotations on the Bloomberg
     Screen US0001M Index Page, One-Month LIBOR for the next Accrual Period for
     the Class A-1 Certificates will be the arithmetic mean of such offered
     quotations (rounding such arithmetic mean if necessary to the nearest five
     decimal places).

         (ii) If, for any Floating Rate Determination Date, only one or none of
     the Reference Banks provides such offered One-Month LIBOR quotations for
     the next applicable Interest Accrual Period, One-Month LIBOR for the next
     Accrual Period for the Class A-1 Certificates will be the higher of (x)
     One-Month LIBOR as determined for the previous Floating Rate Determination
     Date and (y) the Reserve Interest Rate. The "Reserve Interest Rate" will be
     the rate per annum that the Servicer determines to be either (A) the
     arithmetic mean (rounding such arithmetic mean if necessary to the nearest
     five decimal places) of the one-month Eurodollar lending rate that New York
     City banks selected by the Servicer are quoting, on the relevant Floating
     Rate Determination Date, to the principal London offices of at least two
     leading banks in the London Interbank market or (B) in the event that the
     Servicer can determine no such arithmetic mean, the lowest

                                       38

<PAGE>

     one-month Eurodollar lending rate that the New York City banks selected by
     the Servicer are quoting on such Floating Rate Determination Date to
     leading European banks.

         (iii) If, for any Floating Rate Determination Date, the Servicer is
     required but is unable to determine the Reserve Interest Rate in the manner
     provided in paragraph (ii) above, One-Month LIBOR for the next applicable
     Interest Accrual Period will be One-Month LIBOR as determined for the
     previous Floating Rate Determination Date.

     Notwithstanding the foregoing, One-Month LIBOR for an Interest Accrual
Period shall not be based on One-Month LIBOR for the previous Interest Accrual
Period on the Class A-1 Certificates for two consecutive Floating Rate
Determination Dates. If, under the priorities described above, One-Month LIBOR
for an Interest Accrual Period on the Class A-1 Certificates would be based on
One-Month LIBOR for the previous Floating Rate Determination Date for the second
consecutive Floating Rate Determination Date, the Servicer shall select an
alternative index (over which the Servicer has no control) used for determining
one-month Eurodollar lending rates that is calculated and published (or
otherwise made available) by an independent third party.

     The establishment of One-Month LIBOR (or an alternative index) by the
Servicer and the Servicer's subsequent calculation of the Pass-Through Rate on
the Class A-1 Certificates for the relevant Interest Accrual Period, in the
absence of manifest error, will be final and binding.

     Section 15. REMIC Administration.
                 --------------------

     (a) For purposes of the REMIC Provisions, all of the Certificates (except
the Residual Certificates) will be designated as the "regular interests" in the
Issuing REMIC; provided, however, that the Class B-2 Certificates will represent
beneficial ownership of a "regular interest" and the right to receive the Class
B-2 Certificateholders' Interest Carryover Amounts. The Subaccounts will be
designated as the "regular interests" in the Intermediate REMIC, and the
Subsidiary Interests will be designated as the "regular interests" in the
Pooling REMIC. The Class R Certificates represent beneficial ownership of the
"residual interest" in each of the Issuing REMIC, the Intermediate REMIC and the
Pooling REMIC and, following the division of the Class R Certificates into three
separately transferable, certificated and fully registered certificates in
accordance with Section 15(b) below, the Class R-1 Certificates will be
designated as the "residual interest" in the Issuing REMIC, the Class R-2
Certificates will be designated as the "residual interest" in the Intermediate
REMIC, and the Class R-3 Certificates will be designated as the "residual
interest" in the Pooling REMIC.

     (b) Upon the request of any registered Holder of a Class R Certificate, the
Trustee shall issue to such Holder three separately transferable, certificated
and fully registered Certificates (a Class R-1 Certificate, a Class R-2
Certificate and a Class R-3 Certificate), in substantially the forms of Exhibit
R-1, Exhibit R-2 and Exhibit R-3 attached hereto. In the event that the Class R
Certificates are exchanged for separately transferable Class R-1, Class R-2 and
Class R-3 Certificates: (1) the Class R-1 Certificates will be designated as the
residual interest in the Issuing REMIC, (2) the Class R-2 Certificates will be
designated as the residual interest in the Intermediate REMIC, (3) the Class R-3
Certificates will be designated as the residual interest in the Pooling REMIC,
and (4) the restrictions on the transfer of a Residual Certificate provided

                                       39

<PAGE>

in the Standard Terms will apply to each of the Class R-1, Class R-2 and the
Class R-3 Certificates.

     Section 16. Optional Termination and Auction Call.
                 -------------------------------------

     (a) Section 9.01(b) of the Standard Terms is hereby amended by inserting
"the earlier of (A)" after "(2)" and by inserting, "or (B) May 2010" at the end
of the paragraph.

     (b) If the Servicer does not exercise its optional termination right as
described in Section 9.01 of the Standard Terms within 90 days after it first
becomes entitled to do so, the Trustee shall use commercially reasonable efforts
to solicit bids for the purchase of all Assets, REO Properties and Repo
Properties remaining in the Trust from no fewer than two prospective purchasers
that it believes to be Qualified Bidders. If OAC is then the Servicer of the
Assets, the solicitation of bids shall be conditioned upon the continuation of
OAC as the servicer of the Assets on terms and conditions substantially similar
to those in the Pooling and Servicing Agreement, except that it shall not be
required to pay Compensating Interest or make Advances.

     (c) If the Trustee receives bids from at least two Qualified Bidders and
the net proceeds of the highest bid are equal to or greater than the Termination
Price, the Trustee shall promptly advise the Servicer of the highest bid and the
terms of purchase, and the Servicer shall have three Business Days, at its
option, to match the terms of such bid. The Trustee shall thereafter sell the
Assets, REO Properties and Repo Properties either (i) to the Servicer, if it
shall so elect, or (ii) to the highest bidder, and in either case the Trustee
shall distribute the net proceeds of such sale in redemption of the Certificates
in compliance with Article IX of the Standard Terms and Section 5 hereof. Any
such sale must also comply with the requirements applicable to a Terminating
Purchase set forth in Section 9.02 of the Standard Terms.

     (d) Any costs incurred by the Trustee in connection with such sale
(including without limitation any legal opinions or consents required by Section
9.02 of the Standard Terms) shall be deducted from the bid price of the Assets,
REO Properties and Repo Properties in determining the net proceeds therefrom.

     (e) If the Trustee does not obtain bids from at least two Qualified
Bidders, or does not receive a bid such that the net proceeds therefrom would at
least equal the Termination Price, it shall not sell the Assets, REO Properties
and Repo Properties, and shall thereafter have no obligation to attempt to sell
same.

     (f) The Servicer shall cooperate with and provide necessary information to
the Trustee in connection with any auction sale as described herein.

     Section 17. Concerning the Contract of Insurance Holder.
                 -------------------------------------------

     (a) Compliance with FHA Regulations and Filing of FHA Claims.

         (i) The Contract of Insurance Holder shall at all times be reflected as
     the lender of record solely for FHA regulatory purposes with respect to
     each FHA Asset and shall maintain its status as a HUD approved lender. To
     the extent applicable to the duties of the Contract of Insurance Holder
     hereunder, the Contract of Insurance Holder shall

                                       40

<PAGE>

     take or refrain from taking such actions as directed by the Claims
     Administrator, as necessary or appropriate to maintain FHA Insurance for
     the FHA Assets.

            (ii)    As of the Closing Date and at all times thereafter, FHA
     Insurance will cover the FHA Assets. The Servicer and Claims Administrator,
     in each such capacity, covenants and agrees that it shall not take any
     action that would reduce or otherwise diminish the protection of the FHA
     Insurance. On or before March 1 of each year after the date of this
     Agreement, the Servicer shall submit to the Trustee a certification letter
     substantially in the form attached hereto as Exhibit SC.

            (iii)   The Trustee hereby appoints the Claims Administrator to
     facilitate the servicing of FHA Assets. The Claim Administrator shall
     perform on behalf of the Contract of Insurance Holder the duties associated
     with the submission of FHA claims in connection with the FHA Insurance,
     except to the extent that certain documents must be signed by the Contract
     of Insurance Holder (in which case the Contract of Insurance Holder may
     appoint an attorney-in-fact to sign on its behalf) and shall not, in its
     capacity as Claims Administrator or as Servicer, take any action or omit to
     take any action that would cause the Contract of Insurance Holder to
     violate this Section 17 or otherwise fail to maintain valid FHA Insurance
     or cause any denial by FHA of an insurance claim.

            (iv)    The Contract of Insurance Holder shall not be deemed to have
     violated this Section 17 and shall otherwise incur no liability hereunder
     if any failure to maintain valid FHA Insurance or to comply with FHA
     regulations requirements or any denial by FHA of an insurance claim shall
     have been caused by any act or omission of the Servicer or Claims
     Administrator in the performance of its duties hereunder.

            (v)     No Certificateholder, by virtue of holding a Certificate
     that evidences a beneficial interest in any FHA Asset, shall have any right
     against FHA or HUD with respect to the FHA Insurance applicable to any FHA
     Asset, and each Certificateholder, by its acceptance of such Certificate,
     or any interest therein, shall be deemed to have agreed to the foregoing.

     (b)    Regarding the Contract of Insurance Holder, the Servicer and the
            Trustee.

            (i)     The Contract of Insurance Holder, the Servicer and the
     Trustee (including any successor Trustee) shall at all times be approved by
     HUD as Title I lender. The Contract of Insurance Holder shall not resign
     from the obligations and duties imposed on it by this Agreement as Contract
     of Insurance Holder except upon a determination that by reason of a change
     in legal requirements or requirements imposed by the FHA (including,
     without limitation, loss of its status as a HUD approved lender) the
     performance of its duties under this Agreement would cause it to be in
     violation of such legal requirements or FHA imposed requirements in a
     manner which would result in a material adverse effect on the Contract of
     Insurance Holder or cause it to become ineligible to hold the FHA
     Insurance. Any such determination permitting the resignation of the
     Contract of Insurance Holder shall be evidenced by an Opinion of Counsel to
     such effect delivered and acceptable to the Trustee. Upon receiving such
     notice of resignation, the FHA Insurance shall be transferred to a
     qualified successor appointed by the Servicer (which

                                       41

<PAGE>

     qualified successor must be a HUD approved Title I lender) by written
     instrument, in duplicate, one copy of which instrument shall be delivered
     to the resigning Contract of Insurance Holder and one copy to the successor
     contract of insurance holder.

            (ii)    If at any time the Contract of Insurance Holder shall become
     incapable of acting, or shall fail to perform its obligations hereunder or
     shall be adjudged as bankrupt or insolvent, or a receiver of the Contract
     of Insurance Holder or of its property shall be appointed, or any public
     officer shall take charge or control of the Contract of Insurance Holder or
     of its property or affairs for the purpose of rehabilitation, conservation
     or liquidation, or the Contract of Insurance Holder shall fail to be "well
     capitalized" within the meaning of the Federal Deposit Insurance Act and
     the regulations thereunder, then, in any such case the Servicer shall
     remove the Contract of Insurance Holder and appoint a successor contract of
     insurance holder (which successor must be a HUD approved lender) by written
     instrument, in duplicate, one copy of which instrument shall be delivered
     to the Contract of Insurance Holder so removed and one copy to the
     successor contract of insurance holder. Upon removal of the Contract of
     Insurance Holder, the outgoing Contract of Insurance Holder shall take all
     action required to maintain the benefits of the FHA Insurance; provided
     that, if the Contract of Insurance Holder is removed because it has failed
     to be "well capitalized" as provided in the preceding sentence, the
     Depositor and Servicer each shall bear the expenses incurred in connection
     with such transfer.

            (iii)   Any resignation or removal of the Contract of Insurance
     Holder and appointment of a successor contract of insurance holder pursuant
     to any of the provisions of this Section 17 shall become effective upon
     acceptance of appointment by the successor contract of insurance holder.

            (iv)    The Servicer shall be liable for and shall indemnify, defend
     and hold harmless the Trustee and the Contract of Insurance Holder and its
     officers, directors, employees, representatives and agents, from and
     against and reimburse the Trustee and the Contract of Insurance Holder for
     any and all claims, expenses, obligations, liabilities, losses, damages,
     injuries (to person, property, or natural resources), penalties, stamp or
     other similar taxes, actions, suits, judgments, reasonable costs and
     expenses (including reasonable attorney's and agent's fees and expenses) of
     whatever kind or nature regardless of their merit, demanded, asserted or
     claimed against the Trustee and the Contract of Insurance Holder directly
     or indirectly relating to, or arising from, claims against the Trustee and
     the Contract of Insurance Holder by reason of its participation in the
     transactions contemplated under this Section 17 and in connection with the
     FHA Asset, including without limitation all reasonable costs required to be
     associated with claims for damages to persons or property, and reasonable
     attorneys' and consultants' fees and expenses and court costs, except to
     the extent caused by the Trustee's or the Contract of Insurance Holder's
     gross negligence or willful misconduct. The provisions of this Section
     17(b)(4) shall survive the termination of this Agreement or the earlier
     resignation or removal of the Trustee or the Contract of Insurance Holder.

                                       42

<PAGE>

     Section 18.       Voting Rights.
                       -------------

     The Voting Rights applicable to the Certificates shall be allocated 0.5% to
the Class R Certificates, 0.5% to the Class X Certificates, 1.0% to the Class
A-IO Certificates, and 98% to the other Certificates in proportion with their
respective Certificate Principal Balance; provided, however, that the Class B-2
Certificates, the Class X Certificates and the Class R Certificates shall not be
entitled to any voting rights in respect of any matter concerning the
resignation, termination, appointment or any other matters in respect of the
service or duties of the Trustee.

     Section 19.       Trustee Certification.
                       ---------------------

     Section 2.03(c)(1)(C) of the Standard Terms is hereby amended by inserting
"(other than the Cut-off Date Principal Balance and the original Mortgage
Loan-to-Value Ratio of each Mortgage Loan)" after "Mortgage Loan Schedule."

     Section 20.       Amendments to the Standard Terms
                       --------------------------------

     (a) Section 1.01 of the Standard Terms, the definition of "Business Day" is
hereby amended by replacing "the Trustee's Corporate Trust Office is" with "the
Servicer's offices or the Trustee's Corporate Trust Office are."

     (b) Section 1.01 of the Standard Terms, the definition of "OAC" is hereby
amended by replacing "a North Carolina corporation" with "LLC, a Delaware
limited liability company."

     (c) Section 1.01 of the Standard Terms, the definition of "Trustee Mortgage
Loan File" is hereby amended by adding after "Documents" the following: "except
proof of maintenance of a Standard Hazard Insurance Policy (and a flood
insurance policy, if applicable) as to the related Mortgaged Property."

     (d) Section 3.04 of the Standard Terms is hereby amended by adding a new
subsection (f) as follows:

     Section 3.04(f).  Advance Facility.

        (1) The Servicer is hereby authorized to enter into a financing or other
     facility (any such arrangement, an "Advance Facility"), the documentation
     for which complies with Section 3.04(f)(5) below, under which (1) the
     Servicer assigns or pledges its rights under this Agreement to be
     reimbursed for any or all P&I Advances and/or Servicing Advances to a
     special-purpose bankruptcy-remote entity (an "SPV"), which in turn,
     directly or through other assignees and/or pledgees, assigns or pledges
     such rights to a Person, which may include a trustee acting on behalf of
     holders of debt instruments (any such Person, an "Advance Financing
     Person"), and/or (2) an Advance Financing Person agrees to fund some or all
     P&I Advances and/or Servicing Advances required to be made by the Servicer
     pursuant to this Agreement. No consent of the Trustee, Certificateholders
     or any other party is required before the Servicer may enter into an
     Advance Facility. Notwithstanding the existence of any Advance Facility
     under which an Advance Financing Person agrees to fund P&I Advances and/or
     Servicing Advances on the Servicer's behalf, the Servicer shall remain
     obligated pursuant to this Agreement to make

                                       43

<PAGE>

P&I Advances and Servicing Advances pursuant to and as required by this
Agreement, and shall not be relieved of such obligations by virtue of such
Advance Facility. If the Servicer enters into an Advance Facility, and for so
long as an Advance Financing Person remains entitled to receive reimbursement
for any P&I Advances or Servicing Advances outstanding and previously
unreimbursed pursuant to this Agreement, then the Servicer shall not be
permitted to reimburse itself for P&I Advances and/or Servicing Advances, as
applicable, pursuant to Sections 3.04(b), 3.04(c), and/or 3.07(a) of this
Agreement, but instead the Servicer's assignee and designee (the "Servicer's
Assignee") shall have the right to withdraw from the Certificate Account
collections that the Servicer would otherwise have the right to withdraw from
the Certificate Account, pursuant to Section 3.07(a)(1) of this Agreement,
amounts available to reimburse previously unreimbursed P&I Advances ("P&I
Advance Reimbursement Amounts") and/or previously unreimbursed Servicing
Advances ("Servicing Advance Reimbursement Amounts" and together with P&I
Advance Reimbursement Amounts, "Reimbursement Amounts") (in each case to the
extent such type of Advance is included in the Advance Facility).
Notwithstanding anything to the contrary herein, in no event shall P&I Advance
Reimbursement Amounts or Servicing Advance Reimbursement Amounts be included in
the "Available Distribution" or distributed to Certificateholders. In addition,
the Trustee shall remit Reimbursement Amounts which are deposited into the
Distribution Account for a Series pursuant to Section 4.03(2).

     (2) If the Servicer enters into an Advance Facility, the Servicer and the
related Advance Financing Person shall deliver to the Trustee a written notice
of the existence of such Advance Facility (an "Advance Facility Notice"),
stating the identity of the Advance Financing Person and the related Servicer's
Assignee, and specifying what P&I Advances and/or Servicing Advances are covered
by the Advance Facility. An Advance Facility Notice may only be terminated by
the joint written direction of the Servicer and the related Advance Financing
Person.

     (3) Reimbursement Amounts shall consist solely of amounts in respect of P&I
Advances and/or Servicing Advances made with respect to the Assets for which the
Servicer would be permitted to reimburse itself in accordance with Sections
3.04(b), 3.04(c), and/or 3.07(a) hereof, assuming the Servicer had made the
related P&I Advance(s) and/or Servicing Advance(s).

     (4) An Advance Financing Person who receives an assignment or pledge of
rights to receive Reimbursement Amounts and/or whose obligations hereunder are
limited to the funding of P&I Advances and/or Servicing Advances shall not be
required to meet the criteria for qualification of Section 6.07 hereof.

     (5) The documentation establishing any Advance Facility shall require that
Reimbursement Amounts distributed with respect to each Series be allocated to
outstanding unreimbursed P&I Advances or Servicing Advances (as the case may be)
made with respect to that Series on a "first-in, first out" ("FIFO") basis. In
the event that, as a result of this FIFO allocation, some or all of a
Reimbursement Amount for a Series relates to P&I Advances or Servicing Advances
that were made by a Person other than Oakwood Acceptance Corporation, LLC
(successor by merger to Oakwood Acceptance

                                       44

<PAGE>

Corporation) or the Advance Financing Person, then the Servicer's Assignee shall
be required to remit any portion of such Reimbursement Amount to each person
entitled to such portion of such Reimbursement Amount. At any time when the
Advance Financing Person shall have ceased funding P&I Advances and/or Servicing
Advances (as the case may be) with respect to a Series, and the Servicer's
Assignee shall have withdrawn from the related Certificate Account Reimbursement
Amounts sufficient to reimburse all P&I Advances and/or Servicing Advances (as
the case may be), the right to reimbursement for which were assigned to the
Servicer's Assignee, then the Servicer's Assignee and the Advance Financing
Person and the Servicer shall deliver a written notice to the Trustee
terminating the Advance Facility Notice with respect to the Series, whereupon
the Servicer shall again be entitled to withdraw the related Reimbursement
Amounts from the Certificate Account pursuant to Section 3.07(a)(1). Without
limiting the generality of the foregoing, the Servicer shall remain entitled to
be reimbursed by the Advance Financing Person for all P&I Advances and Servicing
Advances funded by the Servicer to the extent the related Reimbursement
Amount(s) have not been assigned or pledged to an Advance Financing Person or
related Servicer's Assignee. By way of illustration, and not by way of limiting
the generality of the foregoing, if a Servicer who is a party to an Advance
Facility resigns or is terminated, and is replaced by a successor Servicer, and
the successor Servicer directly funds P&I Advances or Servicing Advances with
respect to a Series and does not assign or pledge the related Reimbursement
Amounts to the Advance Financing Person, then after all Reimbursement Amounts
attributable to such Series that are owed to the predecessor Servicer and the
Advance Financing Person, which were made prior to any Advances made by the
successor Servicer, have been reimbursed in full, then the successor Servicer
shall be entitled to receive all Reimbursement Amounts subsequently collected
with respect to that Series.

     (6) The parties hereto acknowledge that Oakwood Acceptance Corporation, LLC
(successor by merger to Oakwood Acceptance Corporation) as Servicer, has
assigned, conveyed and transferred all of its rights to reimbursement, pursuant
to Sections 3.04(b), 3.04(c), 3.07(a)(1) and 4.03(2) hereof, in respect of now
existing outstanding P&I Advances and, to the extent described in the P&I
Advance Facility Indenture referred to below, P&I Advances that may be disbursed
by the Servicer in the future, to Oakwood Advance Receivables Company, L.L.C.
(the "Advance SPV"). The Advance SPV is the Servicer's Assignee with respect to
this Advance Facility, and shall be entitled to withdraw P&I Advance
Reimbursement Amounts from the Certificate Account pursuant to this Section
3.04(f) and Section 3.07(a)(1). The Advance SPV shall remit P&I Advance
Reimbursement Amounts that it withdraws from the Certificate Account, subject to
Section 3.04(f)(5) above, to JPMorgan Chase Bank (formerly known as The Chase
Manhattan Bank), as Trustee (the "P&I Advance Facility Trustee") under the
Indenture (the "P&I Advance Facility Indenture"), dated as of September 28,
2001, by and among the Advance SPV, as issuer, JPMorgan Chase Bank (formerly
known as The Chase Manhattan Bank), as trustee, calculating agent and paying
agent, and Oakwood Acceptance Corporation, LLC (successor by merger to Oakwood
Acceptance Corporation) as REMIC Servicer. The P&I Advance Facility Trustee is
the Advance SPV's pledgee with respect to the right to be reimbursed for such
P&I Advances, and is the "Advance Financing Person" for purposes of the other
provisions of this Section 3.04(f) with respect to the Advance Facility
described in this subsection (f). The parties

                                       45

<PAGE>

     hereto further agree that any rights of set-off that the Trust may
     otherwise have against Oakwood Acceptance Corporation, LLC (successor by
     merger to Oakwood Acceptance Corporation) or the Servicer hereunder shall
     not attach to any rights to be reimbursed for P&I Advances that have been
     sold, transferred, conveyed and otherwise assigned to the Advance SPV. The
     parties hereto further covenant and agree that this Subsection 3.04(f)(6)
     may not be amended or otherwise modified without the prior written consent
     of 100% of the holders of the notes issued pursuant to the P&I Advance
     Facility Indenture, unless and until such notes shall have been paid in
     full or the P&I Advance Facility Indenture shall have been discharged and
     terminated.

     (e)  Subsection 3.07(a)(1) of the Standard Terms is hereby deleted and
replaced in its entirety with the following:

          (1) to reimburse itself for any Advances previously made, which
     Advances remain unreimbursed, pursuant to the provisions of Section 3.04(c)
     (including, without limitation, if such Advances have been determined by
     the Servicer to have become Non-Recoverable Advances, out of any funds on
     deposit in the Certificate Account);

     (f)  Subsection 3.07(c) of the Standard Terms is hereby amended by adding
as the last sentence of the subsection: "Any Early Payments used by the Servicer
to cover delinquencies shall be replaced by the Servicer or from Early Payments
when they become part of the Available Distribution Amount."

     (g)  Section 3.11 of the Standard Terms is hereby amended by adding "(a)"
before the first paragraph and adding as a second paragraph the following:

          (b) Neither OMI nor the Trust shall organize under the law of any
     jurisdiction other than the State under which each is organized as of the
     Closing Date (whether changing its jurisdiction of organization or
     organizing under an additional jurisdiction) without giving 30 days prior
     written notice of such action to its immediate and mediate transferee,
     including the Trustee. Before effecting such change, each of OMI or the
     Trust proposing to change its jurisdiction of organization shall prepare
     and file in the appropriate filing office any financing statements or other
     statements necessary to continue the perfection of the interests of its
     immediate and mediate transferees, including the Trustee, in the Mortgage
     Loans. In connection with the transactions contemplated by the Pooling and
     Servicing Agreement, each of OMI and the Trust authorizes its immediate or
     mediate transferee, including the Trustee, to file in any filing office any
     initial financing statements, any amendments to financing statements, any
     continuation statements, or any other statements or filings necessary to
     comply with this Section 3.11(b).

     (h)  Subsection 4.03(2) of the Standard Terms is hereby deleted and
replaced in its entirety with the following:

          (2) without duplication, to reimburse the Servicer or pay to the
     Servicer's Assignee, as appropriate, from any amounts on deposit in the
     Distribution Account for any Advance previously made which has become a
     Non-Recoverable Advance, and to

                                       46

<PAGE>

     reimburse the Servicer or pay to the Servicer's Assignee, as appropriate,
     for any other Advance pursuant to the provisions of Section 3.04(c), to the
     extent not previously withdrawn from the Certificate Account by the
     Servicer or the Servicer's Assignee;

     (i) Section 5.06 of the Standard Terms is hereby amended by (1) adding
"Except for the Class A-1 Certificates," before "Certificates," and (2) adding
as the last sentence of the section: "The Class A-1 Certificates shall accrue
interest at the applicable Pass-Through Rate on the basis of a 360-day year and
the actual number of days elapsed in the applicable Interest Accrual Period."

     Section 21. Governing Law.
                 -------------

     The Pooling and Servicing Agreement shall be construed in accordance with
and governed by the laws of the State of North Carolina applicable to agreements
made and to be performed therein, except that the rights, duties, immunities and
indemnities of the Trustee shall be construed in accordance with and governed by
the laws of the State of New York. The parties hereto agree to submit to the
personal jurisdiction of all federal and state courts sitting in the State of
North Carolina and hereby irrevocably waive any objection to such jurisdiction.
In addition, the parties hereto hereby irrevocably waive any objection that they
may have to the laying of venue of any suit, action or proceeding arising out of
or relating to this Agreement in any federal or state court sitting in the State
of North Carolina, and further irrevocably waive any claim that any such suit,
action or proceeding brought in any such court has been brought in an
inconvenient forum.

     Section 22. Forms of Certificates.
                 ---------------------

     Each of the Schedules and Exhibits attached hereto or referenced herein are
incorporated herein by reference as contemplated by the Standard Terms. Each
Class of Certificates shall be in substantially the related form attached
hereto, as set forth in the Index to Schedules and Exhibits attached hereto.

     Section 23. Counterparts.
                 ------------

     This Pooling and Servicing Agreement may be executed in any number of
counterparts, each of which so executed shall be deemed to be an original, but
all of such counterparts shall together constitute but one and the same
instrument.

     Section 24. Entire Agreement.
                 ----------------

     This Pooling and Servicing Agreement constitutes the entire agreement among
the parties hereto with respect to the subject matter hereof, and fully
supersedes any prior or contemporaneous agreements relating to such subject
matter.

                  [Remainder of Page Intentionally Left Blank]

                                       47

<PAGE>

     IN WITNESS WHEREOF, OMI, the Servicer and the Trustee have caused this
Pooling and Servicing Agreement to be duly executed by their respective officers
thereunto duly authorized and their respective signatures duly attested all as
of the day and year first above written.

                             OAKWOOD MORTGAGE INVESTORS, INC.

                             By:     /s/ Dennis W. Hazelrigg
                                 -----------------------------------------------
                                 Name:  Dennis W. Hazelrigg
                                 Title: President

                             OAKWOOD ACCEPTANCE CORPORATION, LLC

                             By:     /s/ Douglas R. Muir
                                 -----------------------------------------------
                                 Name:  Douglas R. Muir
                                 Title: Vice President

                             JPMORGAN CHASE BANK,
                             as Trustee and as Contract of Insurance Holder

                             By:     /s/ Kevin Crombie
                                 -----------------------------------------------
                                 Name:  Kevin Crombie
                                 Title: Assistant Vice President

                   [Pooling and Servicing Agreement - 2002-B]

<PAGE>

STATE OF ARIZONA          )
                          ) s.
COUNTY OF MARICOPA        )

     The foregoing instrument was acknowledged before me in the County of
Maricopa this 29/th/ day of May, 2002 by Dennis W. Hazelrigg, President of
Oakwood Mortgage Investors, Inc., a Nevada corporation, on behalf of the
corporation.

                                                /s/ Patti S. Ringler
                                     -------------------------------------------
                                                Notary Public

My Commission expires:  November 14, 2004
                        -----------------

                   [Pooling and Servicing Agreement - 2002-B]

<PAGE>

STATE OF NORTH CAROLINA   )
                          ) s.
COUNTY OF GUILFORD        )

     The foregoing instrument was acknowledged before me in the County of
Guilford this 29/th/ day of May, 2002 by Douglas R. Muir, Vice President of
Oakwood Acceptance Corporation, LLC, a Delaware limited liability company (as
successor to Oakwood Acceptance Corporation, a North Carolina corporation), on
behalf of the company.

                                                      /s/ Dena E. Bailey
                                             -----------------------------------
                                                      Notary Public

My Commission expires:  November 30, 2005
                        -----------------

                   [Pooling and Servicing Agreement - 2002-B]

<PAGE>

STATE OF NEW YORK         )
                          )  s.
CITY OF NEW YORK          )

     The foregoing instrument was acknowledged before me in the City of New
York, this 31/st/ day of May, 2002 by Kevin Crombie, Assistant Vice President of
JPMorgan Chase Bank, a New York banking corporation, on behalf of the
corporation.

                                                     /s/ Jonathan P. Ravens
                                             -----------------------------------
                                                     Notary Public

My Commission expires:  August 7, 2002

                   [Pooling and Servicing Agreement - 2002-B]

<PAGE>

                         INDEX TO SCHEDULES AND EXHIBITS

Schedule IA       Initial Contract Schedule
Schedule IB       Initial Mortgage Loan Schedule
Schedule IIA      Subsequent Contract Schedule
Schedule IIB      Subsequent Mortgage Loan Schedule
Schedule IIIA     Reacquired Assets
Schedule IIIB     Daiwa Assets
Schedule IV       Class A-IO Scheduled Notional Principal Balance Schedule

Exhibit A-1       Form of Class A-1 Certificate
Exhibit A-2       Form of Class A-2 Certificate
Exhibit A-3       Form of Class A-3 Certificate
Exhibit A-4       Form of Class A-4 Certificate
Exhibit A-IO      Form of Class A-IO Certificate
Exhibit M-1       Form of Class M-1 Certificate
Exhibit M-2       Form of Class M-2 Certificate
Exhibit B-1       Form of Class B-1 Certificate
Exhibit B-2       Form of Class B-2 Certificate
Exhibit X         Form of Class X Certificate
Exhibit R         Form of Class R Certificate
Exhibit PF        Form of Notice and Direction to Trustee under Section 10(b)(1)
Exhibit SC        Form of Servicer Certification Letter

                                        1

<PAGE>

                                                                     SCHEDULE IA

                            Initial Contract Schedule

                         [On File at Hunton & Williams]

                                  Schedule IA-1

<PAGE>

                                                                     SCHEDULE IB

                         Initial Mortgage Loan Schedule

                         [On File at Hunton & Williams]

                                  Schedule IB-1

<PAGE>

                                                                    SCHEDULE IIA

                          Subsequent Contract Schedule

                                 Schedule IIA-2

<PAGE>

                                                                    SCHEDULE IIB

                        Subsequent Mortgage Loan Schedule

                                 Schedule IIB-1

<PAGE>

                                                                   SCHEDULE IIIA

                                Reacquired Assets

                         [On File at Hunton & Williams]

                                Schedule IIIA-1

<PAGE>

                                                                   SCHEDULE IIIB

                                  Daiwa Assets

                         [On File at Hunton & Williams]

                                Schedule IIIB-1

<PAGE>

                                                                     SCHEDULE IV

           Class A-IO Certificate Notional Principal Balance Schedule

<TABLE>
<CAPTION>
Distribution                Notional      Distribution            Notional       Distribution             Notional
   Date                     Balance          Date                 Balance           Date                  Balance
   ----                     -------          ----                 -------           ----                  -------
<S>                      <C>             <C>                   <C>              <C>                    <C>
June 2002                $60,800,000     February 2005         $43,700,000      October 2007           $28,600,000
July 2002                 60,800,000     March 2005             42,100,000      November 2007           28,600,000
August 2002               60,800,000     April 2005             42,100,000      December 2007           27,500,000
September 2002            59,300,000     May 2005               42,100,000      January 2008            27,500,000
October 2002              59,300,000     June 2005              40,600,000      February 2008           27,500,000
November 2002             59,300,000     July 2005              40,600,000      March 2008              26,600,000
December 2002             57,600,000     August 2005            40,600,000      April 2008              26,600,000
January 2003              57,600,000     September 2005         39,000,000      May 2008                26,600,000
February 2003             57,600,000     October 2005           39,000,000      June 2008               25,600,000
March 2003                55,900,000     November 2005          39,000,000      July 2008               25,600,000
April 2003                55,900,000     December 2005          37,600,000      August 2008             25,600,000
May 2003                  55,900,000     January 2006           37,600,000      September 2008          24,700,000
June 2003                 54,200,000     February 2006          37,600,000      October 2008            24,700,000
July 2003                 54,200,000     March 2006             36,200,000      November 2008           24,700,000
August 2003               54,200,000     April 2006             36,200,000      December 2008           23,800,000
September 2003            52,500,000     May 2006               36,200,000      January 2009            23,800,000
October 2003              52,500,000     June 2006              34,800,000      February 2009           23,800,000
November 2003             52,500,000     July 2006              34,800,000      March 2009              23,000,000
December 2003             50,700,000     August 2006            34,800,000      April 2009              23,000,000
January 2004              50,700,000     September 2006         33,500,000      May 2009                23,000,000
February 2004             50,700,000     October 2006           33,500,000      June 2009               22,100,000
March 2004                48,900,000     November 2006          33,500,000      July 2009               22,100,000
April 2004                48,900,000     December 2006          32,200,000      August 2009             22,100,000
May 2004                  48,900,000     January 2007           32,200,000      September 2009          21,300,000
June 2004                 47,100,000     February 2007          32,200,000      October 2009            21,300,000
July 2004                 47,100,000     March 2007             31,000,000      November 2009           21,300,000
August 2004               47,100,000     April 2007             31,000,000      December 2009           20,600,000
September 2004            45,400,000     May 2007               31,000,000      January 2010            20,600,000
October 2004              45,400,000     June 2007              29,700,000      February 2010           20,600,000
November 2004             45,400,000     July 2007              29,700,000      March 2010              19,800,000
December 2004             43,700,000     August 2007            29,700,000      April 2010              19,800,000
January 2005              43,700,000     September 2007         28,600,000      May 2010                19,800,000
</TABLE>

                                 Schedule IV-1

<PAGE>

                                                                      EXHIBIT PF

         Form of Notice and Direction to Trustee under Section 10(b)(i)

                                   __________
                                      date

JPMorgan Chase Bank,
as Trustee
450 West 33/rd/ Street
New York, New York 10006

                 Oakwood Mortgage Investors, Inc., Series 2002-B
               Notification and Direction to the Trustee Regarding
                   Transfer of Subsequent Assets to the Trust
                   ------------------------------------------

Ladies and Gentlemen:

     Pursuant to Section 10(b)(i) of the Pooling and Servicing Agreement, dated
as of May 1, 2002, by and among Oakwood Mortgage Investors, Inc., a Nevada
corporation ("OMI"), Oakwood Acceptance Corporation, LLC, a Delaware limited
liability company, and JPMorgan Chase Bank, as Trustee (the "Trustee"), the
undersigned hereby notify and direct you, as Trustee, that on ___________, 2002
(the "Subsequent Transfer Date") OMI will transfer to the Trustee on behalf of
the Trust the additional assets identified on Schedule A attached hereto (the
"Subsequent Assets") with a principal balance as of the Subsequent Transfer Date
of $______________ (the "Subsequent Asset Balance"). In consideration for the
delivery by OMI to the Trust of the Subsequent Assets, the undersigned hereby
direct you to withdraw an amount from the Pre-Funding Account equal to the
Subsequent Asset Balance on the Subsequent Asset Transfer Date and pay such
amount to or upon the order of OMI with respect to this transfer and assignment.
Capitalized terms used but not defined herein shall have the meanings assigned
to such terms in the Pooling and Servicing Agreement.

                                        OAKWOOD MORTGAGE INVESTORS, INC.

                                        By: ____________________________________
                                            Name:
                                            Title:

                                  Exhibit PF-1

<PAGE>

                                                                      Exhibit SC

                      Form of Servicer Certification Letter

                                   __________
                                      date

JPMorgan Chase Bank,
as Trustee
450 West 33/rd/ Street
New York, New York 10006

                 Oakwood Mortgage Investors, Inc., Series 2002-B
               Notification and Direction to the Trustee Regarding
                   Transfer of Subsequent Assets to the Trust
                   ------------------------------------------

Ladies and Gentlemen:

     For the year ending on December 31, 20__ and in accordance with Section
17(a)(ii) of the Pooling and Servicing Agreement, dated as of May 1, 2002, by
and among Oakwood Mortgage Investors, Inc., a Nevada corporation ("OMI"),
Oakwood Acceptance Corporation, LLC, a Delaware limited liability company, and
JPMorgan Chase Bank, as Trustee (the "Trustee"), we hereby certify the following
matters concerning the following matters for the Oakwood Mortgage Investors,
Inc., Senior/Subordinated Pass-Through Certificates, Series 2002-B, that we
service for JPMorgan Chase Bank:

     1.   Taxes, MIP and Insurance premiums and reserve for replacement
          repayments have been properly collected and applied in accordance with
          the mortgage, regulatory agreement and other appropriate documents.

     2.   Property Insurance is at FHA required levels and is in full force.

     3.   All payments due under the terms of the mortgage have been properly
          collected and applied to a Custodial Account titled ("Servicer" in
          trust for JPMorgan Chase Bank and name of the specific mortgagor).
          Enclose a copy of the most recent bank statement for the account.

     4.   Our servicer's fidelity bond and errors and omissions insurance are
          current and comply with the requirements of the insurance. Attached is
          a copy of the c urrent binder.

     5.   Our qualification as a FHA approved Mortgagee is in full force and
          effect.

     6.   An annual property inspection has been completed for the year ending
          December 31, 20__ and is attached.

                                  Exhibit SC-1

<PAGE>

     7.   All U.C.C.s required under the terms of the mortgage loan documents
          are current.

                                      Oakwood Acceptance Corporation, LLC

                                      By: ____________________________________
                                          Name:
                                          Title:

                                  Exhibit SC-2Prepared by R.R. Donnelley Financial -- Asset Sale Agreement

 EXHIBIT 10.1 
  
 ASSET SALE AGREEMENT 
 POTASH FIELD 
  

	  1.
	 
	Sale and Purchase of Assets 
 

	  2.
	 
	Closing 
 

	  3.
	 
	Effective Date 
 

	  4.
	 
	Transfer Date 
 

	  5.
	 
	Purchase Price and Manner of Payment 
 

	  6.
	 
	Liquidated Damages 
 

	  7.
	 
	Disposition of Accounts Receivable and Other Revenue 
 

	  8.
	 
	Proration of Credits and Payment Obligations 
 

	  9.
	 
	Proration of Real Estate and Other Taxes 
 

	10.
	 
	Sales Tax and Use Taxes 
 

	11.
	 
	Documentation of Sale and Transfer of Ownership 
 

	12.
	 
	Conditions Precedent to Closing 
 

	13.
	 
	Deliveries at Closing 
 

	14.
	 
	Post-Closing Settlement 
 

	15.
	 
	Title Matters 
 

	16.
	 
	Buyer’s Acceptance of the Assets 
 

	17.
	 
	Physical Condition of the Assets 
 

	18.
	 
	Buyer’s Investigation and Indemnification 
 

	19.
	 
	Compliance 
 

	20.
	 
	Indemnification and Assumption of Obligations 
 

	21.
	 
	Indemnification and Assumption of Environmental Risks 
 

	22.
	 
	Representations 
 

	23.
	 
	Operation of the Assets Prior to Closing 
 

	24.
	 
	Covenant Not to Sue and Alternative Dispute Resolution 
 

	25.
	 
	Miscellaneous 
 

	26.
	 
	Insurance Proceeds 
 

	27.
	 
	Casualty Losses 
 

  
 
	 Exhibit A
 	 	 Leases
 
	 Exhibit A-1
 	 	 Contracts and Agreements
 
	 Exhibit B
 	 	 Escrow Agreement
 
	 Exhibit C
 	 	 Assignment of Leases and Agreements and Bill of Sale
 
	 Exhibit D
 	 	 Letter in Lieu of Transfer Order
 
	 Exhibit E
 	 	 Form of Release and Waiver
 

 
  
 
	 Schedule 1.1(d)
 	 	 Asset Sale Agreement
 
	 Schedule 12(b)(v)
 	 	 Mortgages and Liens
 
	 Schedule 22(a)(iii)
 	 	 Governmental Approvals
 
	 Schedule 22(a)(iv)
 	 	 Legal Proceedings
 
	 Schedule 22(a)(vii)
 	 	 Preferential Purchase Rights
 

 
 

 1 

 
	 Schedule  22(a)(viii)
 	 	 Consents
 
	 Schedule  22(a)(ix)
 	 	 Gas Balancing
 
	 Schedule  22(a)(xiv)
 	 	 Contracts
 
	 Schedule  22(a)(xv)
 	 	 Accounts Payable
 

 
  
 

 2 

 ASSET SALE AGREEMENT 
 POTASH FIELD

  
 THIS AGREEMENT, made as of this 16th day of May, 2002, between GREKA AM, INC., a Colorado corporation
(“Seller”), with a place of business at 3000 Wilcrest, Suite 220, Houston, TX 77042, and Sundown Energy, Inc., a Texas corporation (“Buyer”), with a place of business at 8150 N. Central Expressway, Suite 400, Dallas, Texas
75206. 
  
 RECITALS 
  
 Seller desires to sell to Buyer and Buyer desires to purchase from Seller on the terms and conditions set forth in this Asset Sale Agreement (“Contract”) those certain oil and gas interests, operating rights, real property,
personal property, fixtures and improvements located on the real property and associated assets, identified herein. Accordingly, in consideration of the mutual promises contained herein, the mutual benefits to be derived by each party hereunder and
other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, Buyer and Seller agree as follows: 
  
 1.    Sale and Purchase of Assets: 
  
 1.1 Assets To Be Sold: Seller
shall sell, assign, transfer and convey to Buyer, and Buyer shall purchase and receive at “Closing” (as defined below) effective as of the Effective Date (as defined below) all of Seller’s right, title and interest (but exclusive of
the equipment, machinery, and other real, personal movable, immovable and mixed property expressly reserved by Seller pursuant to Section 1.2 hereof and elsewhere herein) in and to the following: 
  

	 	a)
	 
	The oil, gas and/or mineral leases, overriding royalties, production payments and net profits interests, fee mineral interests, fee royalty interests and all other
interests which are described on Exhibit A hereto (hereinafter called the “Leases”); 
 

  

	 	b)
	 
	The contractual rights to interests in the Leases and in any other oil, gas and/or mineral leases arising pursuant to the terms of the agreements and contracts listed on
Exhibit A-1 hereto, and any other agreements or contracts affecting the Leases, whether or not listed on Exhibit A-1 (hereinafter called the “Applicable Contracts”); 
 

  

	 	c)
	 
	The lands and other rights described (in whole or in part) in the Leases (“Lands”); 
 

 

 3 

  

	 	d)
	 
	The oil, condensate or natural gas wells, water source wells, and water and other types of injection wells, including those wells described in Schedule 1.1(d)
(hereinafter called the “Subject Wells”) and associated materials and other personal property situated on the Lands; 
 

  

	 	e)
	 
	All other properties and rights used or held for use in connection with the production, storage, gathering, processing and treating of oil, gas and other liquid and
gaseous hydrocarbons from, and the disposal of salt water produced from, the Leases and the Subject Wells, including, without limitation, all materials, equipment, personal property and fixtures located thereon or used in connection therewith
(hereinafter called the “Personal Property”); 
 

  

	 	f)
	 
	All easements, servitudes, rights-of-way, surface leases and other surface rights affecting the Lands or used or held for use in connection with the Leases; 

  

	 	g)
	 
	All leases, options, rights of first refusal, rights arising under forced pooling and other similar regulatory orders, contracts, operating agreements or other agreements
(including specifically, but without limitation, all salt water disposal and surface leases or agreements and area of mutual interest rights under existing contracts) and instruments to the extent that the same relate, appertain, belong to or are
incidental to the Leases, Lands or Subject Wells; 
 

  

	 	h)
	 
	All hydrocarbons, including, natural gas, casinghead gas, drip gasoline, natural gasoline, natural gas liquids, condensate products, and crude oil, whether gaseous or
liquid, produced from or allocable to the Leases and/or Lands on or after the Effective Date (the “Hydrocarbons”); 
 

  

	 	i)
	 
	Originals of all of the files, records, information and materials relating to the Leases, Lands, Subject Wells, Hydrocarbons, Applicable Contracts and Personal Property,
owned by Seller and which Seller is not prohibited from transferring to Buyer by law or existing contractual relationship (collectively, the “Records”), including, without limitation: (i) lease, land and title records (including abstracts
of title, certificates of title, title curative documents, division orders, and division order files) (the “Land Files”), (ii) the Applicable Contracts, (iii) all environmental and production files (the “Production Files”), and
(iv) original well files; 
 

 

 4 

  
         All such Leases, Subject Wells,
Hydrocarbons, Applicable Contracts, Personal Property, Records and other rights, prospects and interest described in this Section 1.1 are hereinafter collectively referred to as the “Assets”. 
  
 1.2  Exclusions and Reservations: Specifically excepted and reserved from this transaction are the following, hereinafter referred to as the
“Excluded Assets”. 
  

	 	a)
	 
	Any of Seller’s reserve estimates; economic analyses; pricing forecasts; analyses; or information considered by Seller as confidential or legal opinions (other than
title opinions) protected by “Attorney-Client Privilege”; 
 

  

	 	b)
	 
	All rights and claims arising, occurring, or existing in favor of Seller prior to the Effective Date including, but not limited to, any and all contract rights, claims,
penalties, receivables, revenues, recoupment rights, recovery rights, accounting adjustments, mispayments, erroneous payments, personal injury, property damage, royalty or other rights and claims of any nature in favor of Seller relating to any time
period prior to the Effective Date; 
 

  

	 	c)
	 
	All corporate, financial, and tax records of Seller; however, Buyer shall be entitled to receive copies of any financial and tax records which directly relate to the
Assets, or which are necessary for Buyer’s ownership, administration, or operation of the Assets; 
 

  

	 	d)
	 
	All rights, titles, claims and interests of Seller related to the Assets for all periods prior to the Effective Date (i) under any policy or agreement of insurance
or indemnity, (ii) under any bond, or (iii) to any insurance or condemnation proceeds or awards; 
 

  

	 	e)
	 
	All hydrocarbons produced from or attributable to Seller’s interest in the Assets with respect to all periods prior to the Effective Date together with all proceeds
from or of such hydrocarbons; 
 

  

	 	f)
	 
	Claims of Seller for refund of or loss carry forwards with respect to (i) production, windfall profit, severance, ad valorem or any other taxes attributable to the Assets
for any period prior to the Effective Date, (ii) income or franchise taxes attributable to the Assets for any period prior to the Effective Date; 
 

  

	 	g)
	 
	All amounts due or payable to Seller as adjustments or refunds under any contracts or agreements affecting the Assets for all periods prior to the Effective Date;

 

 

 5 

  

	 	h)
	 
	All amounts due or payable to Seller as adjustments to insurance premiums related to the Assets for all periods prior to the Effective Date; 

  

	 	i)
	 
	Subject to the terms hereof, all monies, proceeds, benefits, receipts, credits, income or revenues (and any security or other deposits made) attributable to the Assets,
subject to any costs associated therewith, prior to the Effective Date; 
 

  

	 	j)
	 
	All Seller’s patents, trade secrets, copyrights, names, marks and logos; 
 

  

	 	k)
	 
	All software and software licenses; 
 

  

	 	l)
	 
	Vehicles, but not boats, barges and water craft; 
 

  

	 	m)
	 
	Office furniture, equipment and supplies, not located on the Lands; 
 

  

	 	n)
	 
	All of Seller’s geophysical, geological, engineering and other technical and interpretative data relating to the Assets, if such data is subject to restriction on
transfer or disclosure by agreements with third parties. 
 

  
 2.    Closing: Closing shall mean the date on
which the Purchase Price (as defined below) is paid to Seller and the conveyancing instruments referred to in Paragraph 13 are delivered to Buyer. Closing shall occur at the offices of Jones Walker, 201 St. Charles Ave., 49th Floor, New Orleans, Louisiana 70170 on or before May 31, 2002, at 10:00am Central. 
  
 3.    Effective Date: The Effective Date of the sale shall be May 1, 2002 as of 7:00am local time where the Assets are located. 
  

4.    Transfer Date: The Transfer Date shall be June 1, 2002 as of 7:00am local time where the Assets are located. 
  
 5.    Purchase Price and Manner of Payment: Buyer shall pay to Seller, or its respective designee, as consideration for the Assets, cash in the sum of Twenty Million dollars ($20,000,000.00)
(the “Purchase Price”), as adjusted as hereinafter provided: 
  
 a.    Upon execution of this
Contract, Buyer shall deposit with Bank of Oklahoma (“Escrow Agent”) the sum of $2,000,000.00 to be held by Escrow Agent pursuant to the terms of the Escrow Agreement in the form attached hereto as Exhibit B (“Escrow Agreement”)
which will be signed by Seller, Buyer 
 

 6 

 and Escrow Agent upon execution of this Contract, as an earnest money deposit (the “Deposit”) which shall be (_) credited
against the Purchase Price at Closing subject to the terms and conditions of this Contract, (ii) refunded to Buyer as provided in this Contract, (iii) or forfeited by Buyer to Seller as provided in this Contract. 
  
 b.    At Closing, Buyer shall pay to Seller the balance of the Purchase Price, as adjusted herein. 
  
 c.    All amounts to be paid hereunder to Seller shall be paid by wire transfer of immediately available funds made payable to
“Greka Energy” or its designee to the account designated by Seller from time to time. 
  
 6.    Liquidated Damages: IF THE PURCHASE AND SALE OF THE ASSETS IS NOT CLOSED AS CONTEMPLATED HEREIN BY REASON OF ANY MATERIAL BREACH OR DEFAULT OR FAILURE TO PROCEED BY BUYER (WHETHER OR NOT BUYER’S
MATERIAL BREACH OR DEFAULT OR FAILURE IS BASED IN WHOLE OR IN PART ON BUYER’S EVALUATION OR FINANCING CONTINGENCIES), THEN SELLER SHALL, IN CONSIDERATION OF HOLDING THE ASSETS OFF THE MARKET AND REFRAINING FROM DEALING WITH OTHERS CONCERNING
THE ASSETS AND AS LIQUIDATED DAMAGES IN LIEU OF ALL OTHER DAMAGES (AND AS SELLER’S SOLE REMEDY IN SUCH EVENT), RETAIN THE DEPOSIT MADE BY BUYER. THE PARTIES HEREBY ACKNOWLEDGE THAT THE EXTENT OF DAMAGES TO SELLER OCCASIONED BY SUCH MATERIAL
BREACH OR DEFAULT OR FAILURE TO PROCEED BY BUYER WOULD BE IMPOSSIBLE OR EXTREMELY IMPRACTICABLE TO ASCERTAIN AND THAT THE AMOUNT OF THE DEPOSIT IS A FAIR AND REASONABLE ESTIMATE OF SUCH DAMAGES UNDER THE CIRCUMSTANCES. 
  
 IF THE PURCHASE AND SALE OF THE ASSETS FAILS TO CLOSE FOR ANY OTHER REASON, BUYER SHALL BE ENTITLED TO THE RETURN OF THE DEPOSIT, THE RECOVERY OF
WHICH SHALL BE BUYER’S SOLE REMEDY AGAINST SELLER IN THE EVENT SELLER FAILS TO COMPLY WITH THIS CONTRACT. 
  
 
	 
	 SELLER  /s/    RANDEEP S. GREWAL
 
	 	 BUYER  /s/    GREGG ALLEN
 

 
  
 7.    Disposition of Accounts Receivable and Other Revenue: Accounts receivable
or other revenue associated with the Assets, to the extent that such accounts receivable or revenue are attributable to times prior to the Effective Date, and marketable oil in tanks above the pipeline connections produced prior to such date shall
not be part of the sale but shall remain the property of Seller. All storage tanks, if any, on the property subject to this Contract shall be gauged at 7:00 a.m. local time on the 
 

 7 

 Effective Date. Seller and Buyer shall execute such additional documents as may be necessary to properly evidence the transfer of the interests herein
sold and purchased. Seller shall have the right to enter upon the Assets to remove all oil and gas not sold herein within a reasonable time following Closing, or sell the same to Buyer at the highest posted field price for oil and Seller’s gas
sales contract price for gas prevailing in the field as of Closing. All revenue from the production of oil and gas after the Effective Date shall be paid to Buyer. 
  
 8.    Proration of Credits and Payment Obligations: 
  
 a.    All credits and payment obligations associated with the Assets, including but not limited to royalties, lease rentals, and other forms of contractual payments shall be prorated between
Seller and Buyer as of the Effective Date. Seller shall be responsible for all such items attributable to periods prior to the Effective Date or Closing, as applicable, and Buyer shall be responsible for and shall pay for all such items attributable
to periods on and after such date. Buyer shall pay and be responsible for all sales, transfer, and use taxes, plus any penalty or interest thereon, applicable to the sale of the Assets. 
  
 b.    Seller shall retain all rights and obligations regarding outstanding receivables pertaining to the Assets which accrued to Seller prior to the Effective
Date. 
  
 c.    Seller shall retain all rights and obligations regarding outstanding trade payables related
to the Assets which accrued to Seller prior to the Effective Date. 
  
 d.    In accordance with generally
accepted accounting principles, Seller shall complete a settlement statement accounting within 90 days of Closing pursuant to Paragraph 14. 
  
 9.    Proration of Real Estate and Other Taxes: All real estate, occupation, ad valorem, personal property, and severance taxes and charges on any of the Assets shall be prorated as of the Effective Date. Seller
shall pay all such items for all periods prior to such date and shall be entitled to all refunds and rebates with regard to such periods. In the event Buyer pays additional taxes or charges which are assessed upon or levied against any of the Assets
after Closing with respect to any period prior to the Effective Date, Seller shall promptly reimburse Buyer the amount thereof upon presentation of a receipt therefor. If Seller elects to challenge the validity of such assessment or levy, or any
portion thereof, Buyer shall extend reasonable cooperation to Seller in such efforts, at no expense to Buyer. Buyer shall be responsible for the determination and payment of any sales tax or transfer tax due on the sale and purchase of any tangible
personal property hereunder. 
 

 8 

 10.    Sales Tax and Use Taxes: Buyer shall be responsible for all sales, use, transfer and similar taxes arising out of the sale of
the Assets. All recording and transfer fees shall be paid by Buyer. 
  
 11.    Documentation of Sale and Transfer of Ownership:
The Assets contemplated to be conveyed by Seller to Buyer shall be conveyed “AS IS, WHERE IS” pursuant to the instruments substantially in the form attached hereto as Exhibit C (“Assignment”) and such other form or forms
customary and necessary to properly transfer the Assets according to the requirements of any applicable federal, state or local agency. Buyer assumes the risk of description, title and condition of the Assets and shall satisfy itself with respect
thereto. 
  
 a.    Seller shall deliver the Assets to Buyer on the Transfer Date subject to the
reservations, limitations, conditions and restrictions contained in this Contract and the instrument of conveyance attached hereto. 
  
 b.    The title to the Assets shall be subject to all matters appearing of record or that can be ascertained by an inspection thereof and shall be conveyed to Buyer without any representation or warranty of title,
express or implied, except that Seller has not heretofore disposed of, burdened or otherwise encumbered, any interest herein offered for sale. The cost of title insurance, if any, shall be paid for by the party requesting it. 

 
 12.    Conditions Precedent to Closing: 

	

  
 a.    Seller’s Conditions Precedent: The obligations
of Seller to consummate the transactions contemplated by this Contract are subject to each of the following conditions: 
  
 (i).    Buyer shall have performed and complied with all terms of this Contract required to be performed or complied with by Buyer prior to Closing; 
  
 (ii).    No action or proceeding by or before any governmental authority shall have been instituted or threatened (and not subsequently dismissed, settled or
otherwise terminated) which might restrain, prohibit or invalidate any of the transactions contemplated by this Contract, other than an action or proceeding instituted or threatened by Seller or any of its affiliates; 
  
 (iii).    Buyer shall have executed and acknowledged the Assignment whereby Seller transfers its right, title and interest in
the Assets to Buyer 
 

 9 

 and Buyer assumes the obligations and liabilities pursuant to Paragraphs 20 and 21, hereof; 
  
 (iv).    The representations and warranties of Buyer contained in this Contract shall be true and correct in all material
respects on the Closing Date as though made on and as of such date. 
  
 (v).    Buyer shall provide Seller
with the certificate of insurance provided for in Section 18(b)(ii). 
  
 (vi).    Seller shall have
received an opinion of C.B. Harrison, Jr. or other counsel to Buyer, acceptable to Seller, that the Representations contained in Sections 22(b)(_), (ii) and (iii) are true and correct at Closing, together with Certificate of Good Standing from the
Secretary of States of Texas and Louisiana and certified copies of board of directors resolutions authorizing the execution and delivery of this Contract and the transaction contemplated herein. 
  

b.    Buyer’s Conditions Precedent: The obligations of Buyer to consummate the transactions contemplated by this Contract are subject to each of the
following conditions; 
  
 (i).    Seller shall have performed and complied with all terms of this Contract
required to be performed or complied with by Seller prior to Closing; 
  
 (ii).    No action or proceeding
by or before any governmental authority shall have been instituted or threatened (and not subsequently dismissed, settled or otherwise terminated) which might restrain, prohibit or invalidate any of the transactions contemplated by this Contract,
other than an action or proceeding instituted or threatened by Buyer or any of its affiliates; 
  
 (iii).    Seller shall have executed and acknowledged and delivered the Assignment whereby Seller transfers its right, title and interest in the Assets to Buyer, and Buyer assumes the obligations and liabilities
pursuant to Paragraphs 20 and 21, hereof. 
  
 (iv).    The representations and warranties of Seller
contained in this Contract shall be true and correct in all material respects on the Closing Date as though made on and as of such date. 
  
 (v).    Seller shall have delivered to Buyer or its agents releases of all mortgages and liens burdening the Assets, including the Release of Lien 
 

 10 

 and Waiver of Lien Rights in substantially the form attached hereto as Exhibit E, executed by all vendors set forth on Schedule
12(b)(v), and, as may be reasonably required by Buyer, any persons who have furnished material labor, services, materials, supplies or equipment on or for use on the Assets. 
  
 (vi).    Seller shall have paid to Buyer the amount of all Suspense Funds as provided in Section 25.13. 
  
 (vii).    Buyer shall have received an opinion of Susan M. Whalen or other counsel to Seller, acceptable to Buyer, that the Representations contained in Sections
22(a)(_) and (ii) are true and correct at Closing, together with Certificate of Good Standing from the Secretary of States of Colorado and Louisiana and certified copies of board of directors resolutions authorizing the execution and delivery of
this Contract and the transaction contemplated herein. 
  
 If Seller does not comply with, or Buyer has not waived the
conditions precedent to closing as contained in Section 12(b), Buyer may terminate this Contract in which event the Deposit will be paid by Escrow Agent to Buyer. 
  
 13.    Deliveries at Closing: 
  
 a.    Buyer shall deliver to Seller at or before Closing the following: 
  
 (_).    the amount specified in Paragraph 5.b. above, as adjusted by this Contract; 
  
 (ii).    an original Assignment in favor of Buyer duly executed, witnessed and acknowledged by Buyer; and 
  
 (iii).    such other instruments or documents as Seller may reasonably request of Buyer to consummate the transaction contemplated herein. 
  
 b.    Seller shall deliver to Buyer at Closing the following: 
  
 (i).    a triplicate original Assignment in favor of Buyer duly executed, witnessed and acknowledged by Seller, the original of which will be filed by Buyer at Buyer’s expense contemporaneously with
closing; and 
  
 (ii).    Seller shall deliver executed Letter in Lieu of Transfer Order to Buyer in form
attached hereto as Exhibit D, addressed to each payee of the proceeds of the sale of oil and gas production, and 
 

 11 

  
 (iii).    such other instruments or documents as Buyer may reasonably
request of Seller to consummate the transaction contemplated herein. 
  
 14.    Settlement: Not later than 5:00pm (Central) on May
28, 2002, Seller shall deliver to Buyer a preliminary settlement statement that will reconcile the reasonably estimated expenses and revenues attributable to the period between the Effective Date and the Closing and other adjustments to the Purchase
Price as prescribed in this Contract. The parties shall use their commercially reasonable efforts to agree on such preliminary settlement statement no later than 5:00pm (Central) on May 29, 2002. Not later than 90 days after Closing, or as soon
thereafter as practicable, Seller shall deliver to Buyer a final settlement statement that will reconcile the actual expenses and revenues attributable to the period between the Effective Date and the Closing and other adjustments to the Purchase
Price as prescribed in this Contract including, without limitation, any outstanding joint interest billings owed by either party or its affiliates to the other party or its affiliates, irrespective of whether it relates to the Property. The Parties
shall use their commercially efforts to agree to such settlement statement within thirty (30) days after delivery to Buyer. If unable to reach agreement, the parties agree to enter into alternative dispute resolution pursuant to Paragraph 24 of this
Contract. Settlement will be made within fifteen (15) days following agreement on the settlement statement. Thereafter, additional proceeds received by or expenses paid by either Seller or Buyer for or on behalf of the other shall be settled by
invoicing the other party for expenses paid or remitting to the other party any proceeds received within ten (10) days of receipt of proceeds or such invoice. 
  
 15.    Title Matters: 
  
 a.    Asset Title Review:  Seller shall make available until 5:00pm (Central) on May 29, 2002 at Seller’s office at 3000 Wilcrest, Suite 220, Houston, TX, or such other place as deemed appropriate
by Seller, during normal business hours, and Buyer shall have the right to thoroughly review all title information, abstracts, and other non-proprietary documents relating directly to Seller’s ownership interests in the Assets, and contracts,
agreements or similar documents which benefit or obligate Seller as to the Assets or the production therefrom, including accounting records related thereto, in Seller’s possession and those documents located in the data room. Seller shall not
perform any additional title work, and any existing abstracts and title opinions will not be made current by Seller. NO REPRESENATION OR WARRANTY OF ANY KIND IS MADE BY SELLER AS TO THE COMPLETENESS OR ACCURACY OF INFORMATION SO SUPPLIED, and Buyer
agrees that any conclusions drawn therefrom shall be the result of its own independent review and judgment. 
  
 b.    Title Adjustments:  In the event of a “Title Defect” as defined in Paragraph 15.c below, Buyer shall notify Seller in writing of any matter Buyer considers to be a Title Defect not later
than 5:00 p.m. (Central) on May 28, 2002 (the 
 

 12 

 “Defect Notice”). Such notice shall include (i) a specific description of the matter Buyer asserts as a Title Defect,
(ii) a specific description of the Asset or portion of the Assets that is affected by the Title Defect, (iii) Buyer’s calculation and basis of the proposed amount by which each Title Defect has diminished the value of the Assets, such amount to
be determined by Buyer in good faith and in a commercially reasonable manner, and (iv) commercially reasonable supporting documentation. Buyer shall be deemed to have waived any Title Defect which Buyer fails to assert in its notice prior to the
date set forth in this Paragraph 15.b, or which Buyer accepts or assumes by Closing on that Asset. 
  
 c.    Title Defect:  The term “Title Defect” shall refer to any defect or deficiency in title to the Property, except for Permitted Encumbrances, that reasonably (i) creates a lien, claim,
encumbrance, restriction or other obligation affecting the interests of Seller in the Assets, (ii) diminishes Seller’s net revenue interest (defined as Seller’s share of the proceeds from the sale of hydrocarbons produced
from and allocable to the Assets, net of all royalties, overriding royalties, or other burdens on production or non-operating interests applicable thereto), or (iii) increases Seller’s working interest (defined as Seller’s share of the
costs of operation, development or production borne by the owner of such interest without a corresponding increase in Seller’s net revenue interest, or which creates an obligation to pay costs or expenses in an amount greater than such
interest). 
  
 d.    Permitted Encumbrances:  As used in this Paragraph 15, the term
“Permitted Encumbrance” means: 
  
 (i).    lessor’s royalties, non-participating royalties,
overriding royalties and division orders and sales contracts containing customary terms and provisions covering oil, gas or associated liquefied or gaseous hydrocarbons, reversionary interests, and similar burdens whether recorded or unrecorded if
the net cumulative effect of such burdens does not operate to reduce the net revenue interest claimed by Seller; 
  
 (ii).    preferential rights to purchase, rights of first refusal and required third party consents, if any, to assignments and similar agreements which are customarily obtained after closing; 

 
 (iii).    liens for taxes or assessments to secure payment of amounts not yet due or delinquent, or are contested in
good faith; 
  
 (iv).    all rights to consent by, required notices to, filings with, or other actions by
governmental entities in connection with the sale or conveyance of oil and gas leases or interests therein, if the same are customarily obtained subsequent to such sale or conveyance; 
 

 13 

  
 (v).    conventional rights of reassignment requiring Seller to
reassign its interests in any portion of the Assets to a third party in the event it intends to release or abandon such Assets prior to the expiration of the primary term or other termination of such Assets; 
  
 (vi).    such Title Defects as Buyer may have waived; 
  
 (vii).    easements, road-use agreements, rights-of-way, servitudes, permits, surface leases and other rights in respect of surface operations; provided they do
not materially interfere with Buyer’s operation or use of the Assets taken as a whole; 
  
 (viii).    defects, irregularities and deficiencies in title of or to any rights-of-way, road-use agreements, easements, surface leases or other rights which in the aggregate do not materially impair the use of
such rights-of-way, road-use agreements, easements, surface leases or other rights for the purpose of which such rights will be held by Buyer and would not have a material adverse effect on the operation or value of the Assets taken as a whole;

  
 (ix).    All rights reserved to or vested in any governmental, statutory or public authority to control
or regulate any of the Assets in any manner, and all applicable laws, rules, regulations and orders of governmental authority; 
  
 (x).    encumbrances relating to the Assets that arise under operating agreements to secure payment of amounts not yet due or delinquent, or are contested in good faith; and 
  
 (xi).    vendors’, carriers’, warehousemen’s, repairmen’s mechanics’, workmen’s,
materialmen’s, construction or other like liens arising by operation of law in the ordinary course of business or incident to the construction or improvement of any property in respect of obligations which are not yet due or delinquent, or are
contested in good faith. 
  
 e.    Remedies for Title Failures:  Seller shall have the right but
not the obligation to cure any Title Defect asserted in such Defect Notice at its own expense prior to Closing; provided, however, Seller shall incur no liability for failure to cure such Title Defects. If Seller chooses to cure a Title Defect,
Seller must cure the Title Defect to the commercially reasonable satisfaction of Buyer before Closing. If Seller cures the Title Defect, the parties shall proceed to Closing without adjustment of the Purchase Price. Seller may delay Closing not more
than 10 days in order to attempt to cure any such Title Defect. If Seller 
 

 14 

 fails to cure any Title Defect on or prior to Closing, it shall be deemed to be a title failure (“Title Failure”), and
the parties shall proceed to Closing with an adjustment to the Purchase Price which adjustment shall be negotiated in good faith between Buyer and Seller taking into account the portion of the Purchase Price to be allocated by agreement of Seller
and Buyer of the Assets, the legal effect of the Title Failure, and the potential economic effect of the Title Failure over the life of the Assets; provided, however, that Buyer shall not be entitled to any adjustment to the Purchase Price unless
the aggregate amount of the Title Failures is at least one percent (1%) of the Purchase Price (the “Title Failure Deductible Amount”) except for liens, for which there will be no deductible. It is fully understood by Seller and Buyer that
Buyer shall never be entitled to an adjustment to the Purchase Price for the Title Failure Deductible Amount. In the event that Seller and Buyer are unable to agree upon the amount of the adjustment for a Title Failure, Seller or Buyer may elect to
terminate this Contract, in which event, Escrow Agent shall immediately pay the Deposit to Buyer. 
  
 f.    Increase in Purchase Price:  Seller shall be entitled to an increase in the Purchase Price with respect to any interest to which Seller has (i) record title ownership of a net revenue interest that
is greater than the net revenue interest claimed by Seller and/or (ii) an ownership interest in any Personal Property greater than the interest for such Asset claimed by Seller. In the event that Seller is entitled to an adjustment, such adjustment
shall be calculated in the same manner as downward adjustments to the Purchase Price in accordance with Paragraph 15.e. Buyer shall be obligated to notify Seller, if Buyer makes any determination of any interest increase at the same time as required
for Title Defects Notice.15.e. Provided, however, Seller shall not receive an increase in the Purchase Price unless the increase exceeds the Title Failure Deductible Amount. It is fully understood by Buyer and Seller that Seller shall never be
entitled to an adjustment to the Purchase Price for the Title Failure Deductible Amount. 
  
 16.    Buyer’s Acceptance of the Assets: 
  
 a.    At Closing
Buyer assumes the risk of condition of the Assets, including compliance with all laws, rules, orders and regulations affecting the environment, whether existing before or after Closing and Buyer shall satisfy itself with respect thereto.

  
 b.    THE ASSETS ARE SOLD “AS IS, WHERE IS” AND SELLER MAKES NO REPRESENTATION OR WARRANTY,
WHETHER EXPRESS OR IMPLIED IN FACT OR IN LAW, OF MERCHANTABILITY, FITNESS FOR ANY PURPOSE, STATE OF REPAIR, CONDITION OR SAFETY OF THE REAL OR PERSONAL PROPERTY, 
 

 15 

 NOR COMPLIANCE WITH APPLICABLE LAW, RULE, ORDER AND REGULATION, CONCERNING THE ASSETS. 
  
 17.    Physical Condition of the Assets: 
  
 a.    The Assets have been used for oil and gas drilling and producing operations, related oilfield operations and possibly for the storage and disposal of waste
materials or hazardous substances. Physical changes in the land may have occurred as a result of such uses. The Assets contain buried pipelines and other equipment, whether or not of a similar nature, the locations of which may not now be within the
knowledge of Seller’s current employees, easily determined by an examination of Seller’s records, or be readily apparent by a physical inspection of the property. 
  
         Buyer understands that Seller does not have the requisite information with which to determine the exact nature or condition of the
Assets or the effect any such use has had on the physical condition of the Assets. 
  
 b.    Buyer
acknowledges that: 
  
 (i).    It has entered into this Contract on the basis of its own investigation of
the physical condition of the Assets, including subsurface condition. 
  
 (ii).    The Assets have been
used in the manner and for the purposes set forth above and that physical changes to the Assets may have occurred as a result of such use. 
  
 (iii).    Low levels of naturally occurring radioactive material (NORM) may be present at some locations. NORM is a natural phenomena associated with many oil fields in the U.S. and throughout the world. Buyer
should make its own determination on this matter. 
  
 (iv).    Buyer is hereby notified and assumes the
risk that detectable amounts of chemicals known to cause cancer, birth defects and other reproductive harm may be found in, on or around the Assets. 
  
 (v).    Buyer acknowledges that one or more hazardous substances may have come to be located in or on the Assets. 
  
 (vi).    On Closing, Buyer shall assume the risk that the Assets may contain waste materials, contaminants or hazardous substances and that adverse physical conditions, including the
presence of waste materials, contaminants or hazardous substances or the presence of unknown 
 

 16 

 abandoned and unabandoned oil and as wells, water wells, sumps, and pipelines or other Environmental Defects (as hereinafter
defined), may not have been revealed by Buyer’s investigation, and all responsibility and liability related to all such conditions and disposal, spills, waste, or contamination on and below the Assets known or unknown shall be transferred from
Seller to Buyer. This provision shall survive the Closing. 
  
 18.    Buyer’s
Investigation, Indemnification and Insurance: 
  
 a.    Buyer shall conduct a thorough environmental and
physical condition assessment of the Assets during the period (“Examination Period”) beginning on the date of this Contract and ending 9:00am (Central) on May 24, 2002. Buyer and its agents shall have the right to do the following (and
Seller agrees to cooperate reasonably with Buyer in this regard): to enter upon and within the Assets and all buildings and improvements thereon, inspect the same, conduct soil and water tests and borings, and generally conduct such tests,
examinations, investigations and studies as may be necessary or appropriate in Buyer’s sole judgment for the preparation of appropriate engineering and other reports and judgments relating to the Assets, their condition, and the presence of
waste or contaminants. Additionally, Buyer shall have the right to thoroughly review all environmental, regulatory, engineering and other technical, documents in Seller’s possession relating directly to the Assets and those documents located in
the data room. Buyer shall keep any data or information acquired by all such examinations and the results of all analyses of such data and information strictly confidential and not disclose same to any person or agency without the prior written
approval of Seller. 
  
 b.    Buyer is hereby granted access to the Assets prior to Closing to conduct its
environmental assessment upon the following conditions: 
  
 (i).    Buyer waives and releases all claims
against Seller, its directors, officers, employees and agents for injury to or death of persons or damage to property arising in any way from the exercise of rights granted to Buyer hereby or the activities of Buyer or its employees or agents on the
Assets. Buyer shall indemnify Seller, its directors, officers, employees and agents against and hold each and all of said indemnitees harmless from any and all loss, cost, damage, expense or liability, including attorneys’ fees, whatsoever
arising out of (a) any and all statutory or common law liens or other encumbrances for labor or materials furnished in connection with such tests, samplings, studies or surveys as Buyer may conduct with respect to the Assets, and (b) any injury to
or death of persons or damage to property occurring in, on or about the Assets as a result of such exercise or activities (except where any such injury or damage is caused solely by the gross negligence or 
 

 17 

 willful misconduct of any of said indemnitees). The foregoing obligation of indemnity shall survive Closing or termination of this
Contract without Closing. 
  
 (ii).    For a period of 10 years following closing, Buyer shall obtain and
maintain comprehensive public liability and property damage insurance with respect to the exercise by Buyer and its agents of the rights granted in this Paragraph 18, which insurance shall: (a) be obtained from and maintained with an insurer
acceptable to Seller, (b) have limits of not less than $1,000,000.00 per occurrence for death or injury and $500,000.00 for property damage, (c) cover Buyer’s obligations under the indemnity provisions of this paragraph 18, (d) name Seller as
an additional insured, and (e) contain a provision pursuant to which the insurer agrees not to cancel or modify the insurance coverage without furnishing at least thirty (30) days’ prior written notice to Seller. Buyer shall furnish Seller
certificates of such insurance naming Seller as an additional named insured. Buyer agrees that any sale or transfer of The Assets shall include a reference to this provision and an agreement by the buyer or transferor to be bound by the terms of
this sub-section. 
  
 c.    If as a result of information which Buyer obtains from any such assessment done
by Buyer, it is reasonably determined that the environment associated with the Assets has been materially contaminated (“Environmental Defect”), such terms being defined as the violation of existing applicable federal or state laws or
regulations or common law principles, with respect to environmental conditions, to the extent that removal and remediation of such contamination required by present federal or state laws or regulations or court order would be reasonably likely to
result, Buyer shall notify Seller in writing of any and all such claims of Environmental Defect (“Notice of Claims”) no later than 5:00 p.m. (Central), May 28, 2002. Buyer shall be deemed to have waived any Environmental Defect which Buyer
fails to assert on or before such dates. Notification shall include (i) a detailed description of such claim, (ii) a specific description of the Asset or portion of the Assets that is affected by the Notice of Claims, (iii) a copy of any
environmental assessment, reports, data and information pertaining to such claim, if applicable, and (iv) Buyer’s calculation and basis of the amount by which such claim has diminished the value of the Assets, such proposed amount to be
determined by Buyer in good faith and in a commercially reasonable manner. The value of an Environmental Defect asserted by Buyer to any particular Asset shall be based upon costs to remediate such Environmental Defect in accordance with applicable
environmental laws. 
  
 d.    If an Environmental Defect exists, the parties shall proceed to Closing with
an adjustment to the Purchase Price which adjustment shall be negotiated 
 

 18 

 in good faith between Buyer and Seller; provided, however, that Buyer shall not be entitled to any adjustment to the Purchase Price
unless the aggregate amount of the Environmental Defects in the Notice of Claims is at least five percent (5%) of the Purchase Price (the “Environmental Defect Deductible Amount”). It is fully understood by Seller and Buyer that Buyer
shall never be entitled to an adjustment to the Purchase Price for the Environmental Defect Deductible Amount. Each party shall cooperate with the other party’s reasonable corrective work, and any operations unreasonably interfering with the
corrective work shall cease until correction is completed. In the event that Seller and Buyer cannot agree upon the amount of the adjustment for Environmental Defects, Seller or Buyer may elect to terminate this Contract, in which event, Escrow
Agent shall immediately pay the Deposit to Buyer. 
  
 e.    In the event of Closing, then Buyer shall
acquire the Assets in an “AS IS, WHERE IS” condition and shall assume the risk that the Assets may contain waste materials, contaminants or hazardous substances, and that adverse physical conditions, including but not limited to the
presence of waste materials, contaminants or hazardous substances or the presence of unknown abandoned and unabandoned oil and gas wells, water wells, sumps and pipelines or other Environmental Defects may not have been revealed by Buyer’s
investigation, AND ALL RESPONSIBILITY AND LIABILITY RELATED TO ALL OF SUCH CONDITIONS AND DISPOSAL, SPILLS, WASTE OR CONTAMINATION ON AND BELOW THE ASSETS KNOWN OR UNKNOWN SHALL BE TRANSFERRED FROM SELLER TO BUYER. 
  
 f.    As of Closing, Buyer specifically assumes and shall be responsible for all obligations and liabilities and shall defend,
indemnify and hold Seller harmless in accordance with Paragraph 21 (including, but not limited to, indemnification for liability under CERCLA, RCRA, environmental laws and regulations, as well as all acts, laws and regulations amendatory or
supplemental thereto) against any and all damages pertaining to the environmental or physical condition of the Assets (whether relating to periods before or after the Effective Date). 
  
 g.    In the event of Closing, Buyer shall grant to Seller a right of entry to the Assets to perform environmental remedial work at Seller’s sole cost, risk
and expense, if Seller, in its sole discretion, determines that such action is necessary to reduce alleged future environmental liabilities of Seller. Seller agrees to indemnify, hold harmless, and defend Buyer from and against all loss, liability,
claims, fines, expenses, costs (including attorneys’ fees and expenses), and causes of action caused by or arising out of Seller’s use of the right of entry granted hereby and/or Seller’s performance of environmental remedial work
hereunder. Any such entry or action on the Assets by Seller shall not be construed as an admission of responsibility by Seller, nor shall Seller’s action lessen or reduce Buyer’s responsibility for environmental liability. A perpetual

 

 19 

 right of entry for environmental remedial work may be incorporated in the final documents transferring title to Buyer.

  
 19.    Compliance:  Buyer shall comply with all applicable laws, rules, ordinances and regulations, and shall
promptly obtain or request assignment from Seller of all permits required by public authorities in connection with the Assets. Buyer shall comply with all covenants in the instruments in the chain of title to the Assets and with all terms and
provisions, expressed or implied, in the agreements, deeds, and leases to which the Assets are subject whether of record or not. Seller shall cooperate with Buyer after Closing in securing the issuance and assignment to Buyer of all permits relating
to the ownership or operation of the Assets. In the event of Buyer’s noncompliance resulting in Seller’s receipt of a notice of breach that could result in cancellation of any oil and gas lease included in the Assets, Seller shall have the
option, but not the obligation to cure such breach, within thirty (30) days from receipt of such notice; provided notice of Seller’s intent to cure is given to Buyer in writing within fifteen (15) days of receipt. Buyer shall indemnify and hold
harmless Seller for any action taken and upon further notice from Seller, Buyer shall have a period of thirty (30) days from receipt of further notice from Seller to reimburse Seller for any action taken. 
  
 20.    Indemnification and Assumption of Obligations:  To the fullest extent permitted by law, but no further, Buyer shall assume full
responsibility for the Assets as of Closing including, but not limited to, all operations, royalty payments, rental payments, suspense accounts, if any, and all accounting and reporting thereof and shall indemnify, hold harmless and defend Seller
and its directors, officers, contractors, agents, employees or representatives from and against all loss, liability, claims, fines, expenses, costs (including attorney’s fees and expenses) and causes of action, arising after the Closing, with
respect thereto, including but not limited to, plugging and abandonment of existing wells, liability for previously plugged and abandoned wells, the restoration of the surface of the land as may be required under the applicable lease or as may be
required by any federal, state or local agency having jurisdiction and the removal of or failure to remove any sumps, foundation, structures, or equipment. 
  
 21.    Indemnification and Assumption of Environmental Risks:  Upon Closing, to the fullest extent permitted by law, but no further, Buyer assumes full responsibility for, and agrees to indemnify, hold
harmless and defend Seller and its directors, officers, contractors, agents, employees or representatives from and against all loss, liability, claims, fines, expenses, costs (including attorney’s fees and expenses) and causes of action caused
by or arising out of any current or hereinafter enacted federal, state or local laws, rules, orders, regulations and amendments thereto, applicable to any waste material or hazardous substances on or included with the Assets or the presence,
disposal, release or threatened release of all waste material or hazardous substance from the Assets into the atmosphere or into or upon land or any water course or body of water, including ground water, or disposal of any waste material or
hazardous substances on or included with the Assets, whether or not attributable to Seller’s 
 

 20 

 activities or ownership or the activities of Seller’s officers, employees or agents, or to the activities of third parties prior to, during or after
the period of Seller’s ownership of the Assets. This indemnification and assumption shall apply to liability for any environmental response actions undertaken pursuant to the Comprehensive Environmental Response Compensation and Liability Act
(CERCLA) or any other federal, state or local law. 
  
 22.    Representations:

  
 a.    Seller’s Representations. Seller represents and warrants that: 

 
 (_).    Seller’s Authority and Corporate Approvals.  Seller has full corporate power and
corporate authority to execute, deliver, and perform this Contract and to consummate the transactions contemplated hereby. The execution, delivery, and performance by Seller of this Contract, and the consummation by it of the transactions
contemplated hereby, have been duly authorized by all necessary corporate action of Seller. This Contract has been duly executed and delivered by Seller, constitutes, and each other agreement, instrument, or document executed or to be executed by
Seller in connection with the transactions contemplated hereby has been, or when executed will be, duly executed and delivered by Seller (as the case may be) and constitutes, or when executed and delivered will constitute, a valid and legally
binding obligation of Seller (which is a party to the same), enforceable against Seller in accordance with their respective terms, except that such enforceability may be limited by (_) applicable bankruptcy, insolvency, reorganization, moratorium,
and similar laws affecting creditors’ rights generally and (ii) equitable principles which may limit the availability of certain equitable remedies (such as specific performance) in certain instances. 
  
 (_i).    Noncontravention.  The execution, delivery, and performance by Seller of this Contract and the
consummation by them of the transactions contemplated hereby do not and will not (_) conflict with or result in a violation of any provision of the charter of bylaws of Seller, (ii), conflict with or result in a violation of any provision of,
or constitute (with or without the giving of notice or the passage of time or both) a default under, or give rise (with or without the giving of notice or the passage of time or both) to any right of termination, cancellation, or acceleration under,
any material bond, debenture, note, mortgage, indenture, lease, contract, agreement, or other material instrument or obligation to which Seller is a party or by which Seller or any of their respective properties may be bound, except to the extent
that waivers, consents or releases regarding the same shall be obtained on or before the Closing, or (iii) 
 

 21 

 result in the creation or imposition of an encumbrance upon the properties of Seller, violate any applicable law binding upon
Seller. 
  
 (_ii).    Governmental Approvals.  No consent, approval, order, or
authorization of, or declaration, filing, or registration with, any governmental entity is required to be obtained or made by Seller in connection with the execution, delivery, or performance by Seller of this Contract or the consummation by it of
the transactions contemplated hereby, other than (_) as set forth on Schedule 22(a)(iii), and (ii) filings with governmental entities to occur in the ordinary course following the consummation of the transactions contemplated hereby. 

 
 (_v).    Legal Proceedings.  To Seller’s knowledge except for the litigation set forth in
Schedule 22(a)(iv) attached hereto (“Existing Litigation”) there are no Proceedings pending, or threatened in which Seller is a party and/or which affect the Properties or arise out of operations of the Assets prior to Closing (including,
without limitation, any actions challenging or pertaining to Seller’s title to any of the Assets), or which seek to restrain, prohibit, or obtain damages or other relief in connection with this Contract or the transactions contemplated hereby.

  
 (v).    Violations of Law.  Seller is not in violation of, nor do any of its
operations violate, in any material respect, any applicable law pertaining to the Assets which would have a material adverse effect on the Assets taken as a whole, and no material expenditures are, or based on present requirements will be, required
of the Seller in order for it to comply or remain in compliance with any applicable laws. 
  
 (vi).    Take or Pay Payments.  Seller has not received any take or pay payment or similar payment from the Assets which will entitle the Buyer of such production to receive gas from and after the
Closing without paying the full contract price therefor. Further, (a) no proceeds of production from the Assets prior to the Closing Date are subject to any refund as a result of the price paid therefor exceeding the applicable maximum lawful
prices, and (b) no buyer of production from the Assets has placed any significant amount of funds owing to Seller attributable to the period of time subsequent to the Effective Date in suspense due to any purported problem affecting Seller’s
title to the applicable Asset. 
  
 (vii).    Preferential Purchase Rights.  To
Seller’s knowledge, all preferential purchase rights which may pertain to the transfer of the Assets to Buyer are set forth on Schedule 22(a)(vii) hereto (the “Specified Preferential Rights”). 
 

 22 

  
 (viii).    Consents.  To Seller’s knowledge, all
third party consent requirements which would pertain to the transfer of the Assets to Buyer are set forth on Schedule 22(a)(viii) hereto, other than consents and/or approvals required to be obtained from Governmental Entities who are lessors under
leases forming a part of the Assets (“Governmental Authorizations”). 
  
 (ix).    Gas
Balancing.  To Seller’s knowledge except as set forth on Schedule 22(a)(ix) hereto, Seller has not taken more (“overproduction”) or less (“underproduction”) than its applicable share of the production from the
Assets such that a current state of overproduction or underproduction exists on the Assets. 
  
 (x).    Default.  To Seller’s knowledge except as previously disclosed to Buyer in writing or related to Existing Litigation, Seller has not received written notice of any default on the part
of Seller under any obligation, lease, contract, plan or arrangement, which default or defaults would, singly or in the aggregate, have a material adverse effect upon the Seller and/or the ownership, operation or value of any portion of the Assets
subsequent to the Effective Date. 
  
 (xi).    Payment of Royalties.  To Seller’s
knowledge all royalties, overriding royalties and other payments due from the proceeds of the sale of production have been paid to the holder thereof or paid to Buyer pursuant to Section 25.13 hereof. 
  
 (xii).    Mineral or Royalty Owners.  To Seller’s knowledge Seller is in compliance with the terms of all
Leases and Seller has not received any notice or other communication from any mineral or royalty owner of a breach of any obligation of any lease or breach of any obligation for payment that has not been cured. 
  
 (xiii).    Leases.  To Seller’s knowledge the Leases are in full force and effect pursuant to the terms of
each lease, as amended by amendment recorded in the Parish records of Placquemines Parish, Louisiana. 
  
 (xiv).    Contracts.  All material contracts effecting operation of the Assets are set forth in Schedule 22(a)(xiv) hereof. 
  
 (xv).    Accounts Payable.  Except as set forth on Schedule 22(a)(xv), all expenses of all operations on the Assets have been paid. 

 
 (xvi).    Mechanic’s and Materialmen’s Liens.  Except as set forth on Schedule 12(b)(v),
there are no liens filed which would perfect in any person which has furnished in goods, services or supplies for the use on 
 

 23 

 or for the benefit of the Assets under any Louisiana Statute or the Constitution of the State of Louisiana. 

 
 (xvii).    Seller Not a Foreign Person.  Seller is not a “foreign person” within the
meanings of Sections 4145 and 7701 of the Code (i.e. Seller is not a non-resident alien, foreign corporation, foreign partnership, foreign trust or foreign estate as those terms are defined in the Code and regulations promulgated thereunder) and
Seller shall deliver at Closing a Certificate of Non-Foreign Status to certify such fact. 
  
 (xviii).    Bankruptcy or Insolvency Actions.  There are no bankruptcy, reorganization or similar proceedings pending, being contemplated by, or to Seller’s Knowledge, threatened against
Seller. 
  
 The representations contained in paragraphs 22(a)(v through xiii) shall terminate if closing occurs. All other
representations shall survive closing for a period of 10 years. 
  
 b.    Buyer’s Representations.
Buyer represents and warrants that: 
  
 (i)    Buyer:  (a) is a corporation duly organized,
validly existing and in good standing under the laws of Texas, (b) is duly qualified to transact business Louisiana and in each jurisdiction where the nature and extent of its business and properties require the same in order for it to perform its
obligations under this Contract; and (c) possesses all requisite authority and power to conduct its business and execute, deliver and comply with the terms and provisions of this Contract and to perform all of its obligations hereunder; and at
Closing, Buyer shall be authorized to own and operate the Properties under the laws and regulations of Louisiana. 
  
 (ii)    This Contract and the transaction contemplated hereby have been duly authorized by Buyer and do not conflict with the provisions of any by-law or other document under which Buyer is organized.

  
 (iii)    This Contract has been duly executed and delivered by Buyer and constitutes the valid and
binding obligation of Buyer, enforceable against it in accordance with its terms except as such enforceability may be limited by bankruptcy, insolvency or other laws relating to or affecting the enforcement of creditors’ rights generally and
general principles of equity (regardless of whether such enforceability is considered in a proceeding in equity or at law). 
 

 24 

  
 (iv)    Buyer has incurred no liability, contingent or otherwise, for
brokers’ or finders’ fees relating to the transaction contemplated hereby for which Seller shall have any responsibility whatsoever. 
  
 (v)    Buyer is knowledgeable, competent, and experienced in the oil and gas industry and has independently evaluated and interpreted the technical data and other information regarding the Assets prior to
entering into this Contract, understands and is financially able to bear the risk associated with ownership of the Assets, and will independently conduct all the due diligence investigations and reviews of all matters concerning the Assets as it
deems necessary prior to Closing. Buyer acknowledges that Buyer is not relying upon any statement or representations made by Seller concerning the present or future value of, or anticipated income, costs, or profits, if any, to be derived from the
Assets or concerning any other matter, and other than Seller’s representations and warranties provided in this Contract, Buyer has relied solely upon its independent inspections, estimates, computations, evaluations, reports, studies, knowledge
and other information regarding the Assets. 
  
 (vi)    Buyer is not buying the Assets for resale in any
manner that would subject the transaction to requirements for registration under applicable securities laws. 
  
 22.    Operation of the Assets Prior to Closing:  During the period subsequent to the execution of this Contract and prior to Closing, Seller shall not be obligated to make expenditures for purposes
other than normal day–to–day operations. In the event an expenditure for other purposes is proposed or contemplated, Seller shall submit the written proposal to Buyer for the parties’ mutual approval and subsequent payment by Seller,
which payment shall be an adjustment to the Purchase Price. After Closing, Buyer will assume the risk of any consequences which arise as a result of Buyer’s failure or refusal to timely approve such expenditure as provided in the proposal.
Unless Buyer and Seller first agree in writing (which agreement shall not be unreasonably withheld or delayed), Seller shall not Materially alter the Assets (other than the use of supplies and consumables), with the exception of individual Assets
(i) involving a fair market value of less than twenty five thousand dollars ($25,000) and (ii) sold or transferred to unaffiliated third parties or disposed of or consumed in the ordinary course of business. If because of legally binding agreements
which existed prior to the date of this Contract, Seller, after the date of this Contract, but prior to Closing, acquires assets related to the Assets or otherwise improves the Assets, the Purchase Price shall be increased by an amount equal to the
consideration to be paid by Seller for such acquisition or improvement of the Assets, and the acquired asset or improvement shall be transferred hereunder. Seller shall promptly notify Buyer of any Material matter affecting the Assets known to
Seller which arises from the date of this 
 

 25 

 Contract to the date of Closing. As used in this Paragraph “Materially” or “Material” refer to any single circumstance or event
involving a value exceeding one hundred thousand ($100,000). 
  
 24.    Covenant Not
to Sue and Alternative Dispute Resolution:             
  
 This Paragraph applies to any dispute between the parties and their affiliates, arising at any time, related to the Assets or this Contract, including whether there is a contract between the parties. 
  
 Any claim or controversy related to the Assets or this Contract of whatever nature, including an action in tort or contract or a
statutory action (“Disputed Claim”), or the arbitrability of a Disputed Claim, will be resolved under the terms, conditions, and procedures of this Paragraph and will be binding on both parties and their respective affiliates, successors
and assigns. Neither party nor their affiliates may prosecute or commence any suit or action against the other party relating to any matters that are subject to the Paragraph. 
  
 A claim filed by a third party against the Buyer or Seller or their affiliates will be subject to this Paragraph. If Buyer has notified Seller before Closing of a
Disputed Claim by Buyer before Closing and the Disputed Claim in not resolved prior to Closing, the Disputed Claim will not be subject to this Paragraph unless agreed to by the parties. 
  
 Disputed Claims covered by this Paragraph shall be governed by the following procedure to resolve such dispute: 
  

(i).    A meeting shall be held promptly between the parties, attended by individuals with decision-making authority regarding the dispute, to attempt in
good faith to negotiate a resolution of the dispute. 
  
 (ii).    If, within thirty (30) days after such
meeting, the parties have not succeeded in negotiating a resolution of the dispute, the parties shall submit the dispute to mediation in Dallas, Texas in accordance with the Commercial Mediation Rules of the American Arbitration Association. The
parties shall bear equally the costs of the mediation. 
  
 (iii).    The parties will jointly appoint a
mutually acceptable mediator, seeking assistance in such regard from the American Arbitration Association if they have been unable to agree upon such appointment within twenty (20) days from the conclusion of the negotiation period. 

 
 (iv).    The parties shall participate in good faith in the mediation and negotiations related thereto for a period
of thirty (30) days. If the parties 
 

 26 

 are not successful in resolving the dispute through mediation, then the parties shall settle the dispute through binding
arbitration in accordance with the Commercial Arbitration Rules of the American Arbitration Association. Judgment upon the award rendered by the arbitrator(s) may be entered in any court having jurisdiction. The place of arbitration shall be Dallas,
Texas. The arbitrator(s) are not empowered to award damages in excess of actual damages, such as, but not limited to punitive damages. 
  
 BINDING ARBITRATION 
  
 NOTICE: BY INITIALING IN THE SPACE PROVIDED BELOW YOU ARE
AGREEING TO HAVE ANY DISPUTE ARISING OUT OF THE MATTERS INCLUDING THE “ALTERNATIVE DISPUTE RESOLUTION” PROVISION DECIDED BY NEUTRAL ARBITRATION AND YOU ARE GIVING UP ANY RIGHTS YOU MIGHT POSSESS TO HAVE THE DISPUTE LITIGATED IN A COURT OR
JURY TRIAL. BY INITIALING IN THE SPACE PROVIDED BELOW YOU ARE GIVING UP YOUR JUDICIAL RIGHTS TO DISCOVERY AND APPEAL, UNLESS THOSE RIGHTS ARE SPECIFICALLY INCLUDED IN THE “ALTERNATIVE DISPUTE RESOLUTION” PROVISION. IF YOU REFUSE TO SUBMIT
TO ARBITRATION AFTER AGREEING TO THIS PROVISION, YOU MAY BE COMPELLED TO ARBITRATE UNDER THE TEXAS SATUTORY AUTHORITY. YOUR AGREEMENT TO THIS ARBITRATION PROVISION IS VOLUNTARY. 
  
 WE HAVE READ AND UNDERSTAND THE FOREGOING AND AGREE TO SUBMIT DISPUTES ARISING OUT OF THE MATTERS INCLUDED IN THE “ALTERNATIVE DISPUTE RESOLUTION”
PROVISON TO NEUTRAL ARBITRATION. 
  
 
	 
	 SELLER  /s/    RANDEEP S. GREWAL
 
	 	 BUYER  /s/    GREGG ALLEN
 

 
  
 25.    Miscellaneous: 

 
 25.1.    Force Majeure:  In the event all or part of the Assets, including fixtures and improvements, is
damaged or destroyed by fire or other calamity prior to Closing, Seller shall have the option, but not the obligation, of repairing the damage at its sole cost or deleting the damaged Assets from the proposed sale and determining the value of the
property in the manner prescribed in Paragraph 15.e. 
  
 25.2.    Preferential Rights to Purchase, Rights
of First Refusal and Consents to Assign: 
 

 27 

  
 a.    In the event any conveyance, assignment or transfer from Seller
to Buyer of any portion of the Assets requires the consent(s) of a third party, a right of first refusal or a preferential right to purchase (collectively, “Consents”), Buyer shall be responsible for obtaining the Consents or waiver
thereof at its expense. Seller shall not be liable to Buyer by reason of any inability or failure by Buyer to obtain any such Consents or waiver thereof to the conveyance, assignment or transfer from Seller to Buyer of any portion of the Assets.

  
 b.    If Buyer is unable to obtain the Consents or waiver thereof, the Purchase Price shall not be
reduced by any amount, the portion of the Assets shall not be excluded from the Assets conveyed, assigned or transferred from Seller to Buyer on the Closing Date, and BUYER AGREES TO AND SHALL PROTECT, DEFEND, INDEMNIFY, SAVE, HOLD HARMLESS,
DISCHARGE AND RELEASE SELLER AND ITS DIRECTORS, OFFICERS, CONTRACTORS, AGENTS, EMPLOYEES OR REPRESENTATIVES FROM AND AGAINST ANY AND ALL DEMANDS, CLAIMS, SUITS, OR CAUSES OF ACTION (INCLUDING, BUT NOT LIMITED TO ANY JUDGMENTS, LOSSES, LIABILITIES,
EXPENSES, INTEREST, LEGAL FEES, AND DAMAGES, WHETHER IN LAW OR EQUITY, WHETHER GENERAL, SPECIAL, PENAL, STAUTORY, OR CONSEQUENTIAL, AND WHETHER IN CONTRACT, TORT OR OTHERWISE) ARISING OUT OF OR RELATED TO THE CONVEYANCE, ASSIGNMENT OR TRANSFER FROM
SELLER TO BUYER OF THE ASSETS ASSIGNED WITHOUT CONSENT. 
  
 25.3.    Fees, Costs and
Expenses:  Except as otherwise provided herein, all fees, costs and expenses incurred by Seller or Buyer relating to this Contract shall be paid by the party incurring the same. 
  
 25.4.    Notices:  All notices to be given hereunder shall be in writing and shall be deemed to have been duly given if delivered personally, sent by
facsimile with original sent otherwise herein with 24 hours, mailed by registered mail, postage prepaid, or delivered by a recognized commercial courier to the party at the address set forth within this Paragraph 25.4. or such other address as any
party shall have designated for itself by ten (10) days’ prior written notice to the other party. 
  
 
	 Seller
 	  	 Buyer
 
	 Greka Energy
 ATTN: Susan M.
Whalen
 2801B Santa Maria Way
 P. O. Box
6209
 	  	 Sundown Energy, Inc.
 ATTN: Gregg Allen
 8150 N. Central Expressway
 Suite 400
 

 
 

 28 

 
	 Santa Maria, CA 93455
 	  	 Dallas, TX 75206
 
	 Fax: 805-347-1072
 	  	 Fax: 214-365-0444
 
	 
	 With a copy to:
 	  	 C. B. Harrison, Jr.
 
	  	  	 13101 Preston Road, Suite 400
 
	  	  	 Dallas, TX 75240
 

 
  
 25.5.    Severability:  In the event any
covenant, condition, or provision contained herein is held to be invalid by a court of competent jurisdiction, the invalidity of any such covenant, condition or provision shall in no way affect any other covenant, condition or provision contained
herein; provided, however, that any such invalidity does not materially prejudice either the Buyer or Seller in its respective rights and obligations contained in the valid covenants, conditions, and provisions of this Contract. 

 
 25.6.    Construction of Ambiguity:  In the event of any ambiguity in any of the terms or conditions of
this Contract, including any exhibits whether or not placed of record, such ambiguity shall not be construed for or against any party hereto on the basis that such party did or did not author the same. 
  
 25.7.    Audit:  Buyer and Seller, for itself and for its directors, partners, employers, and agents warrants,
covenants and represents to the other that, except as otherwise expressly provided in this Contract, neither it nor any of its directors, employees, partners or agents has given to or received from the other party, for any of such party’s
directors, partners, employees or agents any commission, fee, rebate, gift or other thing or service in connection with this Contract, and Buyer and Seller each agree that its books and records shall be subject to reasonable audit by the other as
may be required to substantiate compliance with this provision. 
  
 25.8.    Confidentiality:  Buyer acknowledges that all information furnished or disclosed pursuant hereto must remain confidential. Buyer may disclose such information only to its subsidiaries or
affiliates, agents, advisors or representatives (herein “Representatives”) who have agreed in writing, prior to being given access to such information, to be bound by the terms of this Contract. An original of the signed agreement(s) of
the Representatives will be furnished to Seller upon request. In the event that Closing of the transactions contemplated by this Contract does not occur for any reason, Buyer and its Representatives shall promptly return to Seller or destroy any and
all materials and information, including any notes, summaries, compilations, analyses or other material derived from the inspection or evaluation of such material and information, without retaining copies thereof, except for the purposes of any
action instituted to enforce the terms of this Contract. Notwithstanding the 
 

 29 

 provisions of Paragraph 25.10., nothing in this Paragraph 25.8. and this Contract shall have the effect of terminating, modifying
or superseding any confidentiality agreement entered into by and between Buyer and Seller in relation to this Contract. 
  
 Prior to Closing, without prior consent of the other Party (which consent may not be unreasonably withheld), neither Party may make any public disclosure or issue any press release or other communication regarding the subject matter
of this Contract, whether directly or indirectly. A Party shall have 48 hours exclusive of Saturdays, Sundays and legal holidays, to respond to a proposed disclosure, press release or communication. Notwithstanding the foregoing, a Party may make
such disclosures as are required by applicable law or by the rules of a relevant stock exchange, provided however that a Party shall promptly advise the other Parties that such disclosure is so mandated. For purposes of consultation under this
section, the following individuals are designated as primary contacts: 
  
 
	 For Seller
 
	  	 For Buyer
 

	 
	 Richard A. L’Altrelli
 	  	 Gregg Allen
 
	 Director of Corporate Development
 	  	 Vice President
 
	 Ph. 212-218-4680
 	  	 Ph. 214-368-6100
 

 
  
 25.9.    Time of Performance:  Time is of the
essence of this Contract and each and every provision hereof which in time or performance is a factor. 
  
 25.10.    Entire Agreement:  This Contract constitutes the entire agreement between Seller and Buyer with respect to the subject matter hereof, superseding all prior statements, representations,
discussions, agreements and understandings relating to such subject matter. No amendment shall be binding unless in writing and signed by representatives of both parties. Headings used in this Contract are only for convenience of reference and shall
not be used to define the meaning of any provision. This Contract is for the benefit of Seller and Buyer only and not for the benefit of third parties. 
  
 25.11.    Assignment:  Prior to Closing, neither party may assign this Contract to another party, except to an affiliate, without the express written consent of the other party,
which consent shall not be unreasonably withheld, and thereafter such assignee will exercise and perform the assigning party’s rights and duties under this Contract; provided, however, that the assigning party shall remain responsible to the
other party in all respects and will defend, indemnify and hold the other party harmless from any 
 

 30 

 liability, damages or costs including reasonable attorney’s fees, that may arise as a result of the assignment. 

 
 25.12.    Removal of Signs and Markers:  Buyer shall, at its own expense and within 90 days after Closing
either: (i) remove or cause to be removed all references to Seller (including its name or logo and those of is predecessors) from all lease and well signs and placards which identify or indicate Seller’s prior ownership in the Assets and place
Buyers name and logo, or those of its designated operator, whichever is applicable thereon, (ii) remove said lease and well signs and placards and erect or install signs and placards as may be required by state or other governmental agencies
indicating Buyer or its designated operator, whichever is applicable, as the owner–operator of the Assets and/or property or (iii) any combination of (i) and (ii) above, so long as any reference to the Seller is removed from all lease and well
signs and placards. 
  
 Buyer acknowledges that Seller is relying on Buyer to remove references of Seller from
all signs and placards. If Buyer fails to comply with this paragraph within thirty (30) days notice of breach by Seller, then Seller shall be entitled to the costs incurred in enforcing this paragraph. 
  
 25.13     Suspense Accounts:  At Closing Seller shall pay to Buyer all monies due to any owner in the
properties of which the Assets are a part, including all royalty and overriding royalty owners which are due to such parties but have not been paid. 
  
 25.14.    Governing Law:  This Contract shall be governed by the law of the State of Texas without regard to rules concerning conflicts of law. 
  
 25.15.    Waiver:  The waiver or failure of either party to enforce any provision of this Contract shall not be
construed or operate as a waiver of any further breach of such provision or of any other provision of this Contract. 
  
 25.15.    Survival of Agreements:  Except as otherwise specifically provided in this Contract, all covenants, agreements, representations, guaranties and warranties shall survive the execution of this
Contract, Closing, the delivery and recordation of any assignments and bills of sale which convey the Assets from Seller to Buyer. 
  
 25.16.    Successors and Assigns:  This Contract and the provisions herein, which shall survive Closing, shall bind and inure to the benefit and burden of the heirs, successors and assigns of the parties
hereto. 
 

 31 

  
 25.17.    Recording and Filing:  Buyer shall be solely
responsible for recording of the assignments and any other document related to the conveyance of the Assets, and shall promptly furnish Seller copies of the recorded originals or with the recording information, dependent upon whether the applicable
governmental body returns or retains the recorded originals. Seller shall be responsible for all filings with state and federal agencies for change of operator, and shall promptly provide Buyer with the original approved copies of all such filings,
or confirmation thereof. All recording and filing shall be at the sole cost and expense of Buyer and Buyer shall promptly reimburse Seller for all such costs upon presentation of appropriate invoices. 
  
 25.18    Further Assurances.  Buyer and Seller agree to execute and deliver to the other all division orders, transfer
orders and all other documents necessary to fully vest in Buyer the rights, obligations and benefits acquired pursuant to this Contract. 
  
 25.19    Attorney’s Fees and Costs.  If any action is instituted to enforce the terms of this Contract, the prevailing party shall be entitled to recover from the losing party all attorney’s
fees and costs incurred in such action. 
  
 26.    Insurance Proceeds.  Anything contained herein to the contrary
notwithstanding, if closing occurs, Seller hereby assigns to Buyer all rights in any policies of insurance or indemnity (including proceeds) covering any claim or relating to any loss which Buyer assumes hereunder or for which Buyer indemnifies
Seller. 
  
 27.    Casualty Losses:  If, prior to the Closing Date, any facility or equipment included within the Assets
to be transferred by Seller is damaged or destroyed by fire, flood, storm or other casualty (hereinafter called “Casualty Loss”), Seller shall notify Buyer promptly. If such Casualty Loss in Buyer’s commercially reasonable opinion is
greater than five percent (5%) of the Purchase Price, excluding any insurance proceeds, Buyer shall be entitled to an adjustment in the Purchase Price. At Closing, Buyer shall receive any insurance proceeds payable to Seller with respect to such
Casualty Loss. 
  
 28.    Termination.  This Contract and the transactions contemplated hereby may be terminated in the
following instances, without any liability, upon written notice to the other on or prior to the Closing. This Contract shall then become void and have no effect and neither party shall have any further rights or duty to or claim against the other
party under this Contract, except as expressly provided to the contrary in this Contract. 
  
 a.    By
Seller if the obligation set forth in Paragraph 5.a herein shall not be satisfied upon execution hereof or if any condition set forth in Paragraph 12.a herein shall not be satisfied on or before Closing. 
 

 32 

  
 b.    By Buyer if any condition set forth in Paragraph 12.b herein
shall not be satisfied on or before Closing. 
  
 c.    As otherwise provided herein. 

 
 d.    By the mutual written agreement of Seller and Buyer. 
  
 e.    In the event of the termination of this Agreement as provided in this Contract, Seller and Buyer will jointly instruct the Escrow Agent to pay all funds in
the Escrow to Seller or Buyer as provided herein. 
  
 IN WITNESS WHEREOF the undersigned parties to this Contract have executed it as of the
day and year first mentioned above. 
  
 
	 SELLER
 	 	 BUYER
 
	 
	 GREKA AM, INC.
 	 	 SUNDOWN ENERGY, INC.
 
	 
	 By:  /s/    RANDEEP S. GREWAL
 
	 	 By:  /s/    GREGG ALLEN
 

	  	 	         Gregg Allen
 
	  	 	         Vice President
 

 
 

 33

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