Document:

THIS
      NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
      “SECURITIES ACT”), OR THE SECURITIES LAWS OF ANY STATE, AND MAY NOT BE OFFERED
      OR SOLD UNLESS A REGISTRATION STATEMENT UNDER THE SECURITIES ACT AND APPLICABLE
      STATE SECURITIES LAWS SHALL HAVE BECOME EFFECTIVE WITH REGARD THERETO, OR AN
      EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT AND APPLICABLE STATE
      SECURITIES LAWS IS AVAILABLE IN CONNECTION WITH SUCH OFFER OR SALE.

    

    NANOSENSORS,
      INC.

    SENIOR
      PROMISSORY NOTE

    

    
      	
              New
                York, New York 

            	
              $50,000.00

            

    

    Issue
      Date as of: December 5, 2007

    

    FOR
      VALUE RECEIVED, NANOSENSORS, INC., a
      Nevada
      corporation (the
      “Company”),
      hereby unconditionally promises to pay to the order of CUCHULAINN
      HOLDINGS INC.,
      a
      Panamanian corporation having its offices c/o Shirley y Asociados, Edificio
      ADR,
      Piso 13, Avenida Samuel Lewis, Obarrio, Panama City, Republic of Panama, or
      its
      permitted successors or assigns (the “Holder”
or
      “Cuchulainn”),
      the
      principal sum (“Principal”)
      of
FIFTY
      THOUSAND DOLLARS ($50,000.00)
      in the
      lawful money of the United States of America available in immediately available
      funds, on the date and in the amount set forth in this Senior Promissory Note
      (this “Note”),
      provided, however, that the aggregate unpaid Principal balance (the
“Principal
      Balance”)
      of
      this Note shall in all events be due and payable, on May 31, 2007, or, if
      earlier, upon the occurrence of an Event of Default (the “Maturity
      Date”).
      

    

    The
      Company also promises to pay interest (computed on the basis of a 365-day year
      for actual days elapsed) at said office in like money on the unpaid Principal
      amount of this Note from time to time outstanding at a rate of five percent
      (5%)
      per annum simple interest (“Interest”).
      Interest on this Note shall be payable on the Maturity Date, except as provided
      in Section 4(c). 

    

    The
      Company further agrees that upon and following an Event of Default (as defined
      herein) and/or after any stated or any accelerated maturity of the indebtedness
      evidenced hereby, the aggregate Principal Balance of this Note shall bear
      Interest (computed daily) at a rate equal to five percent (5%) per annum in
      excess of the rate then applicable to this Note, payable on demand
      (“Default
      Interest Rate”).
      In no
      event shall Interest payable hereunder be in excess of the maximum rate of
      interest permitted under applicable law. If any payment to be so made hereunder
      becomes due and payable on a day other than a Business Day, such payment shall
      be extended to the next succeeding Business Day, and to the extent permitted
      by
      applicable law, interest thereon shall be payable at the then applicable rate
      during such extension.

    

    All
      payments hereunder shall be made to the Holder unconditionally in full without
      set-off, counterclaim or, to the extent permitted by applicable law, other
      defense, and free and clear of, and without reduction for or on account of,
      any
      present and future taxes or withholdings, and all liabilities with respect
      thereto.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    All
      payments shall be made by wire transfer to an account or accounts designated
      by
      Holder which shall provide federal wire transfer instructions to the
      Company.

     

    The
      following additional terms shall apply to this Note:

    

    1. DEFINITIONS.

     

    “Business
      Day”
means
      any
      day
      other than a Saturday, a Sunday or a day on which the New York Stock Exchange
      is
      closed or on which banks are authorized by law to close in New York, New
      York.

    

    “Governmental
      Authority”
means
      any nation or government, any state, provincial or political subdivision thereof
      and any entity exercising executive, legislative, judicial, regulatory or
      administrative functions of or pertaining to government, including without
      limitation any stock exchange, securities market or self-regulatory
      organization.

    

    “Liquidation
      Event”
means
      the (i) institution of any insolvency or bankruptcy proceedings, or any
      receivership, liquidation, reorganization or other similar proceedings in
      connection therewith, relative to the Company,
      or to
      its creditors, as such, or to its assets; or (ii) the liquidation, dissolution
      or other winding up of the Company, whether voluntary (including without
      limitation by a vote or action of the Board of Directors of the Company) or
      involuntary and whether or not involving insolvency or bankruptcy proceedings;
      (iii) any assignment for the benefit of creditors or any marshalling of the
      material assets or material liabilities of the Company;
      (iv)
      the admission, in writing, by the Company of its inability to pay its debts
      as
      such debts become due or the failure of the Company generally to pay its debts
      as they come due; or (v) the Company fails to pay the Principal or Interest
      or
      any other amounts payable under this Note when the same becomes due and
      payable.

    

    “Merger
      Agreement”
means
      the Agreement and Plan of Merger entered into as of November 27, 2007, by and
      among the Company, Cuchulainn Acquisition Inc., a Panamanian corporation and
      a
      wholly-owned subsidiary of the Company, and Cuchulainn.

    

    “Person”
means
      any individual, corporation, trust, association, company, partnership, joint
      venture, limited liability company, joint stock company, Governmental Authority
      or other entity. 

    

    All
      definitions contained in this Note are equally applicable to the singular and
      plural forms of the terms defined. The words “hereof”, “herein” and “hereunder”
and words of similar import referring to this Note refer to this Note as a
      whole
      and not to any particular provision of this Note. 

    

    2. INTEREST.
       

     

    (a) The
      Holder shall be entitled to receive Interest in cash at the annual rate of
      5.0%
      simple interest per annum payable on the Maturity Date. 

    

    (b) All
      payments made by the Company on this Note shall be applied first to the payment
      of accrued and unpaid Interest on this Note and then to the reduction of the
      unpaid Principal amount of this Note. Payments of Principal and Interest shall
      be deemed made on the date such payment is received in an account or accounts
      designated by the Holder. 

     

    
      
         

      

      
        2

        
          

        

      

      
         

      

    

     

    (c) In
      the
      event that the date for the payment of any amount payable under this Note falls
      due on a Saturday, Sunday or public holiday under the laws of the State of
      New
      York, the time for payment of such amount shall be extended to the next
      succeeding Business Day and Interest shall continue to accrue on any Principal
      amount so effected until the payment thereof on such extended due
      date.

     

    3. PREPAYMENT.
      

    

    The
      Company may prepay the Principal Balance of this Note, in whole or in part,
      at
      any time, without discount or penalty, provided that each such prepayment shall
      be accompanied by Interest accrued or the amount prepaid to and including the
      date of prepayment.

     

    4.
       EVENTS
      OF DEFAULT.

     

    (a) Events
      of Default.
      Each of
      the following events shall be deemed an “Event
      of Default”:
      

     

    (i)  The
      failure of Company to pay Principal, Interest or any other amount payable
      hereunder within five (5) days after such amount becomes due
      hereunder;

     

    (ii)  A
      Liquidation Event occurs or is publicly announced;

     

    (iii)  The
      termination of the Merger Agreement for any reason; or

     

    (iv)  The
      failure of the “Closing,” as that term is defined in the Merger Agreement, by
      January 10, 2008.

     

    (b) If
      any
      Event of Default shall occur, the Holder may, by notice to the Company, declare
      the entire unpaid Principal Balance and unpaid accrued Interest in respect
      thereof of this Note, and all other amounts payable hereunder, to be forthwith
      due and payable, whereupon all unpaid Principal Balance and unpaid accrued
      Interest under this Note and all such other amounts shall become and be
      forthwith due and payable, without presentment, demand, protest or further
      notice of any kind, all of which are hereby expressly waived by the Company,
      provided that if a Liquidation Event shall occur, this Note shall automatically
      become immediately due and payable without presentment, demand, protest or
      further notice of any kind, all of which are expressly waived by the
      Company.

     

    (c) Upon
      the
      occurrence and during the continuation of an Event of Default, interest shall
      accrue on the outstanding Principal Balance of this Note at the Default Interest
      Rate until such amount is paid in full. Any interest that accrues at the Default
      Interest Rate shall be due and payable on the last day of each calendar month
      (through and including the date of payment). 

     

    (d) The
      remedies of the Holder in this Note or at law or in equity, shall be cumulative
      and concurrent, and may be pursued singly, successively or together in the
      Holder’s discretion. The Company agrees to pay all reasonable costs of
      collection with respect to amounts owing under this Note, including, without
      limitation, reasonable attorneys’ fees and disbursements of the
      Holder.

     

    
      
         

      

      
        3

        
          

        

      

      
         

      

    

     

    5. SENIORITY.

     

    This
      Note
      shall be senior in priority to the general obligations of the Company.

     

    6. MISCELLANEOUS.

     

    (a) Failure
      to Exercise Rights not Waiver.
      No
      failure or delay on the part of the Holder in the exercise of any power, right
      or privilege hereunder shall operate as a waiver thereof, nor shall any single
      or partial exercise of any such power, right or privilege preclude any other
      or
      further exercise thereof. All rights and remedies of the Holder hereunder are
      cumulative and not exclusive of any rights or remedies otherwise
      available.

     

    (b) Notices.
      Any
      notice, demand or request required or permitted to be given by the Company
      or
      the Holder pursuant to the terms of this Note shall be in writing and shall
      be
      deemed delivered (i) when delivered personally or by verifiable facsimile
      transmission, unless such delivery is made on a day that is not a Business
      Day,
      in which case such delivery will be deemed to be made on the next succeeding
      Business Day, (ii) on the next Business Day after delivery to an overnight
      courier and (iii) on
      the
      Business Day actually received if deposited
      in the U.S. mail (certified or registered mail, return receipt requested,
      postage prepaid), addressed as follows: 

    

      
        	 	
                If
                  to the Holder:

              	
                With
                  a copy to:

              
	 	 	 
	 	
                Cuchulainn
                  Holdings Inc.

              	
                Barry
                  Miller, Esq.

              
	 	
                c/o
                  Shirley y Asociados

              	
                Casa
                  9, Calle Brisa Allegre , Villa Zaita

              
	 	
                Edificio
                  ADR, Piso 13

              	
                Las
                  Cumbres, Republic of Panama

              
	 	
                Avenida
                  Samuel Lewis, Obarrio

              	 
	 	
                Panama
                  City, Republic of Panama

              	 
	 	
                T:
                  +507.269.2255

              	
                T:
                  + 248.232.8039

              
	 	
                F:
                  +507.269.1552

              	
                F:
                  +248.479.5395

              
	 	 	 
	 	
                If
                  to the Company:

              	
                With
                  a
                  copy
                  to: 

              
	 	 	 
	 	
                NanoSensors,
                  Inc.

              	
                Becker
                  & Poliakoff, LLP

              
	 	
                Attn:
                  Josh Moser

              	
                Attn:
                  Victor J. DiGioia, Esq.

              
	 	
                1475
                  Veterans Blvd.

              	
                45
                  Broadway, 11th
                  Floor

              
	 	
                Redwood
                  City, CA 94063

              	
                New
                  York, NY 10006

              
	 	
                P:
                  408.306.5956

              	
                P:
                  212.599.3322

              
	 	
                F:
                  650.618.1483

              	
                F:
                  212.557.0295

              

      

    

    

    Either
      party may from time to time designate by notice delivered in accordance with
      this Section
      6(b),
      specify
      a different address for notices, demands and requests hereunder.

     

    
      
         

      

      
        4

        
          

        

      

      
         

      

    

     

    (c)
       Amendments.
      No
      amendment, modification or other change to, or waiver of any provision of,
      this
      Note may be made unless such amendment, modification or change is set forth
      in
      writing and is signed by the Company and the Holder. 

     

    (d)
       Transfer
      of Note.
      The
      Holder may sell, transfer or otherwise dispose of all or any part of this Note
      (including without limitation pursuant to a pledge) to any person or entity
      as
      long as such sale, transfer or disposition is the subject of an effective
      registration statement under the Securities Act of 1933, as amended, and
      applicable state securities laws, or is exempt from registration thereunder.
      From and after the date of any such sale, transfer or disposition, the
      transferee hereof shall be deemed to be the holder of a Note in the Principal
      amount acquired by such transferee, and the Company shall, as promptly as
      practicable, issue and deliver to such transferee a new note identical in all
      respects to this Note, in the name of such transferee. The Company shall be
      entitled to treat the original Holder as the holder of this entire Note unless
      and until it receives written notice of the sale, transfer or disposition
      hereof.

     

    (e)
       Lost
      or Stolen Note.
      Upon
      receipt by the Company of evidence of the loss, theft, destruction or mutilation
      of this Note, and (in the case of loss, theft or destruction) of indemnity
      or
      security reasonably satisfactory to the Company, and upon surrender and
      cancellation of the Note, if mutilated, the Company shall execute and deliver
      to
      the Holder a new Note identical in all respects to this Note.

     

    (f)
       Governing
      Law; Waiver of Jury Trial.
      This
      Note shall be governed by and construed in accordance with the laws of the
      State
      of New York applicable
      to contracts made and to be performed entirely within the State of New York,
      without regard to conflicts of law principles that would require the application
      of the laws of another jurisdiction. The Company agrees that any suit for the
      enforcement of this Note may be brought in the courts of New York sitting in
      New
      York County or any Federal court sitting therein and consents to the
      nonexclusive jurisdiction of such court and service of process in any such
      suit
      being made upon the Company by mail at the address set forth in the first
      paragraph of this Note. The Company hereby waives any objection that it may
      now
      or hereafter have to the venue of any such suit or any such court or that such
      suit is brought in an inconvenient forum.WAIVER
      OF JURY TRIAL. EACH OF THE PARTIES WAIVES THE RIGHT TO A JURY IN ANY TRIAL
      OF
      ANY CASE OR CONTROVERSY WHICH CASE OR CONTROVERSY ARISES OUT OF OR IS IN RESPECT
      OF ANY DEALINGS AMONG THEM OR ANY ONE OF THEM RELATING TO THE SUBJECT MATTER
      OF
      THIS NOTE.

     

    (g) Successors
      and Assigns.
      The
      terms and conditions of this Note shall inure to the benefit of and be binding
      upon the respective successors (whether by merger or otherwise) and permitted
      assigns of the Company and the Holder. The Company may not assign its rights
      or
      obligations under this Note except as specifically required or permitted
      pursuant to the terms hereof.

    

    (h) Usury.
      This
      Note
      is subject to the express condition that at no time shall the Company be
      obligated or required to pay interest hereunder at a rate which could subject
      the Holder to either civil or criminal liability as a result of being in excess
      of the maximum interest rate which the Company is permitted by applicable law
      to
      contract or agree to pay.  If by the terms of this Note, the Company is at
      any time required or obligated to pay interest hereunder at a rate in excess
      of
      such maximum rate, the rate of interest under this Note shall be deemed to
      be
      immediately reduced to such maximum rate and the interest payable shall be
      computed at such maximum rate and all prior interest payments in excess of
      such
      maximum rate shall be applied and shall be deemed to have been payments in
      reduction of the principal balance of this Note.

     

    
      
         

      

      
        5

        
          

        

      

      
         

      

    

     

     
      

    IN
      WITNESS WHEREOF,
      the
      Company has caused this Note to be signed in its name by its duly authorized
      officer on the date first above written.

    

    NANOSENSORS,
      INC. 

    

    

    By:           
      /s/ Robert
      Baron                                                   

    Name:
      Robert Baron 

    Title:
      Interim Chief Executive Officer

    

    

    
      
         

      

      
        6Exhibit 10.1

                                                               EXECUTION VERSION

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

                           MASTER REPURCHASE AGREEMENT

       CREDIT SUISSE FIRST BOSTON MORTGAGE CAPITAL LLC, as buyer ("Buyer",
                    which term shall include any "Principal"
       as defined and provided for in Annex I) or as agent pursuant hereto
                                 ("Agent"), and

              CHIMERA INVESTMENT CORPORATION, as seller ("Seller")
                                     ------

                             Dated January 18, 2008

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

<PAGE>

                                TABLE OF CONTENTS

                                                                            Page
                                                                            ----

1.    Applicability..........................................................1

2.    Definitions............................................................1

3.    Program; Initiation of Transactions...................................18

4.    Repurchase............................................................20

5.    Price Differential....................................................21

6.    Margin Maintenance....................................................21

7.    Income Payments.......................................................22

8.    Security Interest.....................................................23

9.    Payment and Transfer..................................................23

10.   Conditions Precedent..................................................24

11.   Program; Costs........................................................26

12.   Servicing.............................................................27

13.   Representations and Warranties........................................28

14.   Covenants.............................................................33

15.   Events of Default.....................................................39

16.   Remedies Upon Default.................................................41

17.   Reports...............................................................44

18.   Repurchase Transactions...............................................47

19.   Single Agreement......................................................47

20.   Notices and Other Communications......................................47

21.   Entire Agreement; Severability........................................48

22.   Non assignability.....................................................49

23.   Set-off...............................................................49

                                      -i-
<PAGE>

24.   Binding Effect; Governing Law; Jurisdiction...........................49

25.   No Waivers, Etc.......................................................50

26.   Intent................................................................50

27.   Disclosure Relating to Certain Federal Protections....................51

28.   Power of Attorney.....................................................51

29.   Buyer May Act Through Affiliates......................................52

30.   Indemnification; Obligations..........................................52

31.   Counterparts..........................................................53

32.   Confidentiality.......................................................53

33.   Recording of Communications...........................................54

34.   Periodic Due Diligence Review.........................................54

35.   Authorizations........................................................55

36.   Acknowledgement Of Anti-Predatory Lending Policies....................55

37.   Documents Mutually Drafted............................................55

38.   General Interpretive Principles.......................................55

SCHEDULES

Schedule 1 - Representations and Warranties with Respect to Purchased
             Mortgage Loans

Schedule 2 - Authorized Representatives

Schedule 3A - Approved Servicers for Servicing Released Loans

Schedule 3B - Approved Servicer for Servicing Retained Loans

ANNEXES

Annex I - Buyer Acting as Agent

EXHIBITS

Exhibit A - Form of Transaction Request

Exhibit B - Form of Purchase Confirmation

                                      -ii-

<PAGE>

Exhibit C - Form of Mortgage Loan Schedule

Exhibit D - Form of Officer's Compliance Certificate

Exhibit E - Form of Power of Attorney

Exhibit F - Form of Opinion of Seller's and  counsel

Exhibit G - Reserved

Exhibit H - Officer's Certificate of the Seller and Corporate Resolutions of
            Seller

Exhibit I - Seller's Tax Identification Number

Exhibit J - Existing Indebtedness

Exhibit K - Reserved

Exhibit L - Reserved

Exhibit M - Form of Servicer Notice

                                     -iii-

<PAGE>

1.    Applicability

            From time to time the parties hereto may enter into  transactions in
which Seller agrees to transfer to Buyer Mortgage Loans (as hereinafter defined)
against the transfer of funds by Buyer,  with a simultaneous  agreement by Buyer
to  transfer  to Seller  such  Mortgage  Loans at a date  certain  or on demand,
against the transfer of funds by Seller. This Agreement is a commitment by Buyer
to engage in the  Transactions  as set forth herein up to the Maximum  Committed
Purchase Price; provided,  that the Buyer shall have no commitment to enter into
any Transaction  requested which would result in the aggregate Purchase Price of
then outstanding  Transactions to exceed the Maximum  Committed  Purchase Price.
Each such transaction shall be referred to herein as a "Transaction" and, unless
otherwise agreed in writing, shall be governed by this Agreement,  including any
supplemental terms or conditions  contained in any annexes identified herein, as
applicable hereunder.

2. Definitions

            Whenever used in this  Agreement,  the following  words and phrases,
unless the context otherwise requires, shall have the following meanings:

            "30/40  Mortgage  Loan" means a Mortgage  Loan which has an original
term  to  maturity  of  not  more  than  thirty  years  from   commencement   of
amortization,  with a balloon  payment  in year  thirty  based upon a forty year
amortization schedule.

            "Acceptable  State"  means  any  state  acceptable  pursuant  to the
originator's Acquisition Guidelines.

            "Accepted  Servicing  Practices" means, with respect to any Mortgage
Loan,   those  mortgage   servicing   practices  of  prudent   mortgage  lending
institutions which service mortgage loans of the same type as such Mortgage Loan
in the jurisdiction where the related Mortgaged Property is located.

            "Acquisition Guidelines" means, with respect to a Mortgage Loan, the
originator's  residential  mortgage loan  underwriting  guidelines  (unless such
originator has been disapproved by Buyer),  as the case may be, in effect at the
time the Mortgage Loan was originated.

            "Act  of  Insolvency"  means,  with  respect  to any  Person  or its
Affiliates,  (i) the  filing  of a  petition,  commencing,  or  authorizing  the
commencement of any case or proceeding,  or the voluntary joining of any case or
proceeding  under  any  bankruptcy,  insolvency,  reorganization,   liquidation,
dissolution or similar law relating to the protection of creditors, or suffering
any such  petition or  proceeding  to be commenced by another which is consented
to, not timely  contested  or results in entry of an order for relief;  (ii) the
seeking of the appointment of a receiver, trustee, custodian or similar official
for such  party or an  Affiliate  or any  substantial  part of the  property  of
either;  (iii) the appointment of a receiver,  conservator,  or manager for such
party or an  Affiliate  by any  governmental  agency  or  authority  having  the
jurisdiction to do so; (iv) the making or offering by such party or an Affiliate
of a composition  with its creditors or a general  assignment for the benefit of
creditors;  (v) the admission by such party or an Affiliate of such party of its
inability to pay its debts or discharge  its  obligations  as they become due or
mature; or (vi) that any governmental  authority or agency or any person, agency
or entity acting or purporting to act under  governmental  authority  shall have
taken any  action to  condemn,  seize or  appropriate,  or to assume  custody or
control of, all or any substantial  part of the property of such party or of any
of its Affiliates,  or shall have taken any action to displace the management of
such  party or of any of its  Affiliates  or to  curtail  its  authority  in the
conduct of the business of such party or of any of its Affiliates.

<PAGE>

            "Additional  Purchased  Mortgage  Loans"  has the  meaning  assigned
thereto in Section 6(a) hereof.

            "Adjusted  Tangible Net Worth" means,  for any Person,  Net Worth of
such Person plus  Subordinated  Debt,  minus all  intangible  assets,  including
capitalized  servicing  rights,  goodwill,  patents,   tradenames,   trademarks,
copyrights,  franchises, any organizational expenses, deferred expenses, prepaid
expenses,   prepaid  assets,   receivables  from  shareholders,   Affiliates  or
employees,  and any other asset as shown as an  intangible  asset on the balance
sheet of such Person on a consolidated  basis as determined at a particular date
in accordance with GAAP.

            "Affiliate"  means,  with respect to any Person,  any "affiliate" of
such Person,  as such term is defined in the  Bankruptcy  Code.  Notwithstanding
anything to the contrary  contained herein, the term "Affiliate" with respect to
Seller  shall not include (i) Annaly  Capital  Management,  Inc. or Fixed Income
Discount  Advisory Company  ("FIDAC") or any fund managed or advised by FIDAC or
any of their  respective  Affiliates,  other  than  Seller  or (ii) any  special
purpose entity as a depositor in securitizations or any securitization trust.

            "Agency" means Freddie Mac, Fannie Mae or GNMA, as applicable.

            "Agency  Security"  means a  mortgage-backed  security  issued by an
Agency.

            "Agent" means Credit Suisse First Boston Mortgage Capital LLC or any
affiliate or successor thereto.

            "Agreement"  means this Master  Repurchase  Agreement,  as it may be
amended, supplemented or otherwise modified from time to time.

            "Alt-A  Mortgage  Loan"  means a Mortgage  Loan that  satisfies  the
guidelines for such loans set forth in the related Acquisition Guidelines, or as
otherwise determined by Buyer in its sole discretion.

            "Appraised Value" means the value set forth in an appraisal made in
connection with the origination of the related Mortgage Loan as the value of the
Mortgaged Property.

            "Asset  Tape"  means a  remittance  report  on a  monthly  basis  or
requested  by  Buyer  pursuant  to  Section  17d  hereof  containing   servicing
information, including, without limitation, those fields reasonably requested by
Buyer from time to time,  on a  loan-by-loan  basis and in the  aggregate,  with
respect to the Purchased  Mortgage  Loans serviced by Seller or any Servicer for
the month (or any portion thereof) prior to the Reporting Date.

                                      -2-
<PAGE>

            "Assignment of Mortgage" means an assignment of the Mortgage, notice
of transfer or equivalent  instrument in recordable  form,  sufficient under the
laws of the jurisdiction  wherein the related  Mortgaged  Property is located to
reflect the sale of the Mortgage to Buyer.

            "Bailee  Letter"  has  the  meaning  assigned  to  such  term in the
Custodial Agreement.

            "Bank" means Wells Fargo Bank, N.A.

            "Bankruptcy  Code" means the United States  Bankruptcy Code of 1978,
as amended from time to time.

            "Bid" has the meaning set forth in Section 4(c) hereof.

            "Bid Fee" has the meaning set forth in Section 4(c) hereof.

            "BPO"  means an  opinion  of the fair  market  value of a  Mortgaged
Property  given by a  licensed  real  estate  agent or  broker  which  generally
includes three comparable sales and three comparable listings.

            "Business Day" means any day other than (A) a Saturday or Sunday and
(B) a public or bank holiday in New York City.

            "Buydown Amount" has the meaning set forth in Section 5(c) hereof.

            "Buyer" means Credit Suisse First Boston  Mortgage  Capital LLC, and
any successor or assign hereunder.

            "Buyer's Margin Amount" means with respect to any Transaction as of
any date of determination, an amount equal to the product of (A) Buyer's Margin
Percentage and (B) the Purchase Price for such Transaction.

            "Buyer's Margin  Percentage"  means, with respect to any Transaction
as of any date, a percentage  equal to the  percentage  obtained by dividing the
(A) Market Value of the Purchased  Mortgage  Loans on the Purchase Date for such
Transaction by (B) the Purchase Price on the Purchase Date for such Transaction;
provided,  that,  with respect to any  Mortgage  Loan which was not an Exception
Mortgage  Loan  on the  related  Purchase  Date  and  which,  as of the  date of
determination,  is an Exception  Mortgage Loan,  Buyer's Margin Percentage as of
such date of determination shall be equal to the percentage obtained by dividing
(A) the Market Value of such Mortgage  Loan on the related  Purchase Date by (B)
the amount the  Purchase  Price  would  have been on the  Purchase  Date if such
Mortgage Loan had been categorized as the type of Mortgage Loan (e.g., Exception
Mortgage Loan, etc.) that it is categorized on the date of determination.

            "Capital Lease  Obligations"  means, for any Person, all obligations
of such Person to pay rent or other amounts under a lease of (or other agreement
conveying the right to use) Property to the extent such obligations are required
to be classified and accounted for as a capital lease on a balance sheet of such
Person  under GAAP,  and,  for  purposes of this  Agreement,  the amount of such
obligations  shall be the capitalized  amount thereof,  determined in accordance
with GAAP.

                                      -3-
<PAGE>

            "Cash  Equivalents"  means (a) securities with maturities of 90 days
or less from the date of  acquisition  issued or fully  guaranteed or insured by
the United States Government or any agency thereof,  (b) certificates of deposit
and eurodollar time deposits with maturities of 90 days or less from the date of
acquisition  and  overnight  bank  deposits of Buyer or of any  commercial  bank
having capital and surplus in excess of $500,000,000, (c) repurchase obligations
of Buyer or of any commercial bank satisfying the  requirements of clause (b) of
this  definition,  having a term of not more than  seven  days with  respect  to
securities   issued  or  fully  guaranteed  or  insured  by  the  United  States
Government,  (d) commercial paper of a domestic issuer rated at least A-1 or the
equivalent  thereof by S&P or P-1 or the  equivalent  thereof by Moody's  and in
either case maturing within 90 days after the day of acquisition, (e) securities
with maturities of 90 days or less from the date of acquisition  issued or fully
guaranteed by any state,  commonwealth or territory of the United States, by any
political  subdivision or taxing  authority of any such state,  commonwealth  or
territory  or  by  any  foreign  government,  the  securities  of  which  state,
commonwealth,  territory,  political  subdivision,  taxing  authority or foreign
government (as the case may be) are rated at least A by S&P or A by Moody's, (f)
securities  with  maturities  of 90 days or less  from the  date of  acquisition
backed by  standby  letters  of credit  issued by Buyer or any  commercial  bank
satisfying the  requirements  of clause (b) of this  definition or (g) shares of
money  market  mutual  or  similar  funds  which  invest  exclusively  in assets
satisfying the requirements of clauses (a) through (f) of this definition.

            "Change in Control" means:

            (A) the sale, transfer, or other disposition of all or substantially
            all  of  Seller's  assets   (excluding  any  such  action  taken  in
            connection  with  (1)  any  securitization  transaction;  or  (2) in
            connection with an asset based  financing or other secondary  market
            transaction  related to mortgage loans and in the ordinary course of
            the Seller's business); or

            (B) any  transaction  or event as a result  of which a  "person"  or
            "group"  (within  the  meaning  of  Section  13(d)  or  14(d) of the
            Securities  Exchange Act of 1934, as amended (the  "Exchange  Act"))
            shall  become,  or  obtain  rights  (whether  by means of  warrants,
            options or otherwise) to become,  the "beneficial owner" (as defined
            in Rules  13d-3  and 13d-5  under the  Exchange  Act),  directly  or
            indirectly, of a percentage of the total voting power of all classes
            of capital  stock of the Seller  entitled to vote  generally  in the
            election of directors of 30% or more.

            "Code" means the Internal Revenue Code of 1986, as amended.

            "Collection Account" means the account established by the Collection
Account  Control  Agreement,  into which all  collections  and proceeds on or in
respect of the  Mortgage  Loans shall be deposited  by Master  Servicer  upon an
Event of Default.

            "Collection Account Control Agreement" means that certain collection
account  control  agreement,  dated as of the date hereof,  among Buyer,  Master
Servicer, Seller and Bank.

                                      -4-
<PAGE>

            "Committed Mortgage Loan" means a Mortgage Loan which is the subject
of a Take-out Commitment with a Take-out Investor.

            "Conforming   Mortgage  Loan"  means  a  first  lien  Mortgage  Loan
originated in accordance with the criteria of an Agency for purchase of Mortgage
Loans, including, without limitation, conventional Mortgage Loans, as determined
by Buyer in its sole discretion.

            "Custodial  Agreement" means the custodial agreement dated as of the
date hereof,  among Seller,  Buyer and Custodian as the same may be amended from
time to time.

            "Custodial  Mortgage Loan Schedule" has the meaning assigned to such
term in the Custodial Agreement.

            "Custodian"  means  Wells  Fargo  Bank,  N.A.  or such  other  party
specified  by Buyer  and  agreed  to by  Seller,  which  approval  shall  not be
unreasonably withheld.

            "Default"  means an Event of Default or an event that with notice or
lapse of time or both would become an Event of Default.

            "Dollars"  and "$" means  dollars in lawful  currency  of the United
States of America.

            "Due Date" means the day of the month on which the  Monthly  Payment
is due on a Mortgage Loan, exclusive of any days of grace.

            " Due Diligence Cap" means $40,000.

            "Effective Date" means the date upon which the conditions  precedent
set forth in Section 10 shall have been satisfied.

            "Electronic Tracking Agreement" means an Electronic Tracking
Agreement among Buyer, Seller, MERS and MERSCORP, Inc., to the extent applicable
as the same may be amended from time to time.

            "ERISA" means the Employee Retirement Income Security Act of 1974,
as amended from time to time.

            "ERISA Affiliate" means any corporation or trade or business that is
a member of any group of organizations (i) described in Section 414(b) or (c) of
the Code of which  Seller is a member and (ii) solely for  purposes of potential
liability under Section  302(c)(11) of ERISA and Section  412(c)(11) of the Code
and the lien created  under  Section  302(f) of ERISA and Section  412(n) of the
Code,  described  in  Section  414(m)  or (o) of the Code of which  Seller  is a
member.

            "Escrow  Payments"  means,  with respect to any Mortgage  Loan,  the
amounts constituting ground rents, taxes, assessments, water rates, sewer rents,
municipal  charges,  mortgage  insurance  premiums,  fire and  hazard  insurance
premiums, condominium charges, and any other payments required to be escrowed by
the Mortgagor with the mortgagee pursuant to the Mortgage or any other document.

                                      -5-
<PAGE>

            "Event of Default" has the meaning specified in Section 15 hereof.

            "Event of Termination" means with respect to Seller (i) with respect
to any Plan, a  reportable  event,  as defined in Section  4043 of ERISA,  as to
which the PBGC has not by regulation  waived the  requirement of Section 4043(a)
of ERISA that it be notified with 30 days of the  occurrence  of such event,  or
(ii) the withdrawal of Seller, or any ERISA Affiliate thereof from a Plan during
a plan  year in  which it is a  substantial  employer,  as  defined  in  Section
4001(a)(2)  of ERISA,  or (iii)  the  failure  by Seller or any ERISA  Affiliate
thereof to meet the  minimum  funding  standard  of  Section  412 of the Code or
Section 302 of ERISA with respect to any Plan,  including,  without  limitation,
the  failure  to make on or before  its due date a  required  installment  under
Section 412(m) of the Code or Section 302(e) of ERISA, or (iv) the  distribution
under  Section 4041 of ERISA of a notice of intent to terminate  any Plan or any
action taken by Seller or any ERISA Affiliate  thereof to terminate any plan, or
(v)  the  adoption  of an  amendment  to any  Plan  that,  pursuant  to  Section
401(a)(29)  of the Code or  Section  307 of ERISA,  would  result in the loss of
tax-exempt  status  of the  trust of which  such Plan is a part if Seller or any
ERISA  Affiliate  thereof  fails  to  timely  provide  security  to the  Plan in
accordance with the provisions of said sections,  or (vi) the institution by the
PBGC of proceedings  under Section 4042 of ERISA for the  termination of, or the
appointment of a trustee to administer, any Plan, or (vii) the receipt by Seller
or any ERISA Affiliate thereof of a notice from a Multiemployer Plan that action
of the type  described  in the  previous  clause (vi) has been taken by the PBGC
with respect to such  Multiemployer  Plan,  or (viii) any event or  circumstance
exists which may reasonably be expected to constitute  grounds for Seller or any
ERISA  Affiliate  thereof to incur  liability  under  Title IV of ERISA or under
Sections 412(c)(11) or 412(n) of the Code with respect to any Plan.

            "Exception Mortgage Loan" means any Mortgage Loan which is otherwise
ineligible for purchase  hereunder,  or which otherwise  becomes  ineligible for
purchase  hereunder  and  which is  approved  by  Buyer in its sole  discretion;
provided,  however,  that Seller shall pay to Buyer a fee of $25 with respect to
any such approval of an Exception  Mortgage  Loan;  and  provided,  that upon 30
days'  notice to the  Seller,  Buyer may change  such  Exception  Mortgage  Loan
approval fee. Buyer's approval of a Mortgage Loan as an Exception  Mortgage Loan
shall  expire  on the  earlier  of (a) the  date set  forth by the  Buyer in the
written notice that such Mortgage Loan is approved as an Exception Mortgage Loan
(an "Exception  Notice") or (b) the occurrence of any  additional  event,  other
than that set forth in the Exception Notice, which would cause the Mortgage Loan
to become  ineligible for purchase  hereunder.  The Pricing Rate,  Market Value,
Purchase Price and Buyer's Margin Percentage with respect to Exception  Mortgage
Loans shall be set in the sole  discretion of Buyer.  Buyer may at any time, and
in its sole discretion, no longer consider a Mortgage Loan an Exception Mortgage
Loan, in which case such Mortgage Loan shall have a Market Value of zero.

            "Existing   Indebtedness"  has  the  meaning  specified  in  Section
13(a)(23) hereof.

            "Fannie Mae" means Fannie Mae, the government  sponsored  enterprise
formerly known as the Federal National Mortgage Association.

            "FICO" means Fair Isaac & Co., or any successor thereto.

                                      -6-
<PAGE>

            "Fidelity  Insurance" shall mean insurance  coverage with respect to
omissions,  dishonesty,  forgery, theft, disappearance and destruction,  robbery
and safe burglary, property (other than money and securities) and computer fraud
in an aggregate amount acceptable to Seller's regulators.

            "Freddie  Mac" means the Federal Home Loan Mortgage  Corporation  or
any successor thereto.

            "GAAP" means generally accepted accounting principles in effect from
time to time in the United States of America and applied on a consistent basis.

            "GNMA" means the Government  National  Mortgage  Association and any
successor thereto.

            "Governmental  Authority" means any nation or government,  any state
or other political  subdivision  thereof,  or any entity  exercising  executive,
legislative,  judicial,  regulatory or  administrative  functions over Seller or
Buyer, as applicable.

            "Gross Margin" means,  with respect to each adjustable rate Mortgage
Loan, the fixed percentage amount set forth in the related Mortgage Note.

            "High Cost Mortgage Loan" means a Mortgage Loan  classified as (a) a
"high cost" loan under the Home  Ownership and Equity  Protection Act of 1994 or
(b) a "high cost,"  "threshold,"  "covered," or "predatory" loan under any other
applicable  state,  federal or local law (or a similarly  classified  loan using
different  terminology under a law,  regulation or ordinance imposing heightened
regulatory scrutiny or additional legal liability for residential mortgage loans
having high interest rates, points and/or fees).

            "Income"  means with respect to any  Purchased  Mortgage Loan at any
time until  repurchased  by the Seller,  any  principal  received  thereon or in
respect thereof and all interest, dividends or other distributions thereon.

            "Indebtedness"  means,  for any  Person:  (a)  obligations  created,
issued or incurred  by such  Person for  borrowed  money  (whether by loan,  the
issuance and sale of debt  securities or the sale of Property to another  Person
subject to an understanding or agreement, contingent or otherwise, to repurchase
such  Property  from such  Person);  (b)  obligations  of such Person to pay the
deferred purchase or acquisition price of Property or services, other than trade
accounts  payable (other than for borrowed money) arising,  and accrued expenses
incurred,  in the ordinary  course of business,  so long as such trade  accounts
payable  are  payable  within  90 days of the  date  the  respective  goods  are
delivered or the respective  services are rendered;  (c)  Indebtedness of others
secured by a Lien on the Property of such Person,  whether or not the respective
Indebtedness  so  secured  has been  assumed  by such  Person;  (d)  obligations
(contingent  or  otherwise)  of such  Person in  respect of letters of credit or
similar instruments issued or accepted by banks and other financial institutions
for the account of such Person;  (e) Capital Lease  Obligations  of such Person;
(f)  obligations  of such  Person  under  repurchase  agreements,  sale/buy-back
agreements or like  arrangements;  (g) Indebtedness of others Guaranteed by such
Person;  (h) all  obligations  of such Person  incurred in  connection  with the
acquisition or carrying of fixed assets by such Person;  and (i) Indebtedness of
general partnerships of which such Person is a general partner.

                                      -7-
<PAGE>

            "Index" means,  with respect to any  adjustable  rate Mortgage Loan,
the index  identified on the Mortgage Loan Schedule and set forth in the related
Mortgage Note for the purpose of calculating  the applicable  Mortgage  Interest
Rate.

            "Interest Only Adjustment Date" means, with respect to each Interest
Only Loan, the date, specified in the related Mortgage Note on which the Monthly
Payment will be adjusted to include principal as well as interest.

            "Interest  Only  Loan"  means a Mortgage  Loan  which only  requires
payments  of interest  for a period of time  specified  in the related  Mortgage
Note.

            "Interest  Rate  Adjustment   Date"  means  the  date  on  which  an
adjustment  to the Mortgage  Interest  Rate with respect to each  Mortgage  Loan
becomes effective.

            "Interest Rate Protection  Agreement"  means, with respect to any or
all of the Purchased  Mortgage Loans, any short sale of a US Treasury  Security,
or futures  contract,  or  mortgage  related  security,  or  Eurodollar  futures
contract,  or options  related  contract,  or interest rate swap,  cap or collar
agreement  or  Take-out  Commitment,   or  similar  arrangement   providing  for
protection  against  fluctuations  in interest  rates or the exchange of nominal
interest obligations, either generally or under specific contingencies,  entered
into by Seller and an Affiliate of Buyer or such other party acceptable to Buyer
in its sole  discretion,  which  agreement  is  acceptable  to Buyer in its sole
discretion.

            "Jumbo  Mortgage  Loan" means a first lien Mortgage Loan which would
satisfy the  requirement  for a  Conforming  Mortgage  Loan except for an unpaid
principal balance greater than the maximum balance permitted by the Agencies but
less than $2,000,000.

            "LIBOR" means, in the Buyer's sole discretion which may be confirmed
by fifteen (15) days notice to the Seller  (which may be  electronic),  for each
day,  (a) the rate of interest  (calculated  on a per annum  basis) equal to the
overnight British Bankers Association Rate as reported on the display designated
as "BBAM"  "Page DG8 4a" on  Bloomberg  (or such other  display  as may  replace
"BBAM" "Page DG8 4a" on  Bloomberg) on such date of  determination,  and if such
rate shall not be so quoted,  the rate per annum at which Buyer or an  Affiliate
is offered Dollar deposits at or about 11:00 a.m., (New York City time), on such
day, by prime banks in the interbank  eurodollar market where the eurodollar and
foreign  currency  exchange  operations  in  respect of its loans are then being
conducted  for  delivery on such day for an overnight  period,  and in an amount
comparable to the amount of the Purchase Price of Transactions to be outstanding
on such day or (b) the rate of interest  (calculated on a per annum basis) equal
to the one month  British  Bankers  Association  Rate as reported on the display
designated  as "BBAM" "Page DG8 4a" on Bloomberg  (or such other  display as may
replace "BBAM" "Page DG8 4a" on Bloomberg) on such date of determination, and if
such rate shall not be so quoted,  the rate per annum at which  Buyer is offered
Dollar  deposits at or about 11:00 a.m.,  (New York City time),  on such day, by
prime banks in the interbank  eurodollar market where the eurodollar and foreign
currency  exchange  operations in respect of its loans are then being  conducted
for delivery on such day for a period of one month, and in an amount  comparable
to the amount of the Purchase  Price of  Transactions  to be outstanding on such
day.

                                       -8-
<PAGE>

              "Lien" means any mortgage, lien, pledge, charge, security interest
or similar encumbrance.

            "Loan to Value  Ratio" or "LTV" means with  respect to any  Mortgage
Loan, the ratio of the original  outstanding  principal  amount of such Mortgage
Loan to the  lesser of (a) the  Appraised  Value of the  Mortgaged  Property  at
origination or (b) if the Mortgaged  Property was purchased  within 12 months of
the  origination  of such  Mortgage  Loan,  the purchase  price of the Mortgaged
Property.

            "Margin Call" has the meaning specified in Section 6(a) hereof.

            "Margin Deadline" has the meaning specified in Section 6(b) hereof.

            "Margin Deficit" has the meaning specified in Section 6(a) hereof.

            "Market Value" means, with respect to any Purchased Mortgage Loan as
of any date of determination, the whole-loan servicing released fair market
value of such Purchased Mortgage Loan on such date as determined by Buyer (or an
Affiliate thereof) in its sole discretion. Without limiting the generality of
the foregoing, Seller acknowledges that (a) in the event that a Purchased
Mortgage Loan is not subject to a Take-out Commitment, Buyer may deem the Market
Value for such Mortgage Loan to be no greater than par and (b) the Market Value
of a Purchased Mortgage Loan may be reduced to zero by Buyer if:

                        (i) a breach of a  representation,  warranty or covenant
            made by Seller in this  Agreement  with  respect  to such  Purchased
            Mortgage Loan has occurred and is continuing;

                        (ii) such  Purchased  Mortgage Loan is a  Non-Performing
            Mortgage Loan;

                        (iii) such  Purchased  Mortgage  Loan has been  released
            from the possession of the Custodian  under the Custodial  Agreement
            (other than to a Take-out  Investor pursuant to a Bailee Letter) for
            a period in excess of ten (10) calendar days;

                        (iv) such Purchased Mortgage Loan has been released from
            the possession of the Custodian  under the Custodial  Agreement to a
            Take-out Investor pursuant to a Bailee Letter for a period in excess
            of 45 calendar days;

                        (v) such  Purchased  Mortgage Loan has been subject to a
            Transaction hereunder for a period of greater than 364 days;

                        (vi)  such   Purchased   Mortgage   Loan  is  no  longer
            acceptable for purchase by Buyer (or an Affiliate thereof) under any
            of the flow  purchase or conduit  programs for which Seller then has
            been  approved  due to a  Requirement  of Law  relating  to consumer
            credit laws or otherwise;

                                       -9-
<PAGE>

                        (vii)  when  the  Purchase   Price  for  such  Purchased
            Mortgage  Loan is added  to  other  Purchased  Mortgage  Loans,  the
            aggregate  Purchase Price of all Super Jumbo Mortgage Loans that are
            Purchased  Mortgage  Loans  exceeds  25%  of the  Maximum  Aggregate
            Purchase Price;

                        (viii)  when  the  Purchase  Price  for  such  Purchased
            Mortgage  Loan is added  to  other  Purchased  Mortgage  Loans,  the
            aggregate  Purchase  Price  of all  Alt-A  Mortgage  Loans  that are
            Purchased  Mortgage  Loans  exceeds  10%  of the  Maximum  Aggregate
            Purchase Price.

            "Master Servicer" means Wells Fargo Bank, N.A.

            "Material Adverse Effect" means (a) a material adverse change in, or
a material adverse effect upon, the operations,  business, properties, condition
(financial or otherwise) or prospects of Seller or any Affiliate that is a party
to any Program  Agreement  taken as a whole;  (b) a material  impairment  of the
ability of Seller or any Affiliate  that is a party to any Program  Agreement to
perform under any Program Agreement and to avoid any Event of Default;  or (c) a
material  adverse  effect  upon  the  legality,   validity,  binding  effect  or
enforceability  of any Program Agreement against Seller or any Affiliate that is
a party to any Program Agreement.

            "Maximum  Aggregate  Purchase  Price"  means  FIVE  HUNDRED  MILLION
DOLLARS ($500,000,000).

            "Maximum  Committed  Purchase  Price"  means THREE  HUNDRED  MILLION
DOLLARS  ($300,000,000).  All funds made  available by Buyer to the Seller under
this Agreement will first be attributed to the Maximum Committed Purchase Price.
For purposes of this  Agreement,  Mortgage Loans will be allocated  first to the
Maximum  Committed  Purchase Price based on the date on which such Mortgage Loan
becomes subject to this Agreement, commencing from the earliest date to the most
recent  date.  To the  extent  that  there is  availability  under  the  Maximum
Aggregate  Purchase  Price,  but any Mortgage  Loans proposed by the Sellers for
purchase by Buyer would otherwise exceed the Maximum  Committed  Purchase Price,
then to the extent that such Maximum Committed Purchase Price would be exceeded,
such Mortgage  Loans may be purchased by the Buyer on an uncommitted  basis,  in
Buyer's sole discretion.

            "MERS"  means  Mortgage  Electronic  Registration  Systems,  Inc., a
corporation  organized and existing under the laws of the State of Delaware,  or
any successor thereto.

            "MERS System"  means the system of recording  transfers of mortgages
electronically maintained by MERS.

            "Monthly  Payment" means the scheduled  monthly payment of principal
and/or interest on a Mortgage Loan.

            "Moody's" means Moody's  Investors  Service,  Inc. or any successors
thereto.

                                      -10-
<PAGE>

            "Mortgage"  means  each  mortgage,  assignment  of  rents,  security
agreement and fixture filing,  or deed of trust,  assignment of rents,  security
agreement and fixture filing, deed to secure debt, assignment of rents, security
agreement and fixture filing,  or similar  instrument  creating and evidencing a
lien on real property and other property and rights incidental thereto.

            "Mortgage  File"  means,  with  respect  to  a  Mortgage  Loan,  the
documents  and  instruments  relating  to such  Mortgage  Loan and set  forth in
Exhibit F to the Custodial Agreement.

            "Mortgage  Interest  Rate"  means  the rate of  interest  borne on a
Mortgage  Loan from  time to time in  accordance  with the terms of the  related
Mortgage Note.

            "Mortgage  Interest  Rate Cap" means,  with respect to an adjustable
rate Mortgage Loan, the limit on each Mortgage  Interest Rate  adjustment as set
forth in the related Mortgage Note.

            "Mortgage Loan" means any Conforming  Mortgage Loan,  Jumbo Mortgage
Loan, Super Jumbo Mortgage Loan, Alt-A Mortgage Loan, or Exception Mortgage Loan
which is a fixed or floating-rate,  one-to-four-family  residential  mortgage or
home equity loan evidenced by a promissory note and secured by a mortgage, which
satisfies  the  requirements  set forth in Section  13(b) hereof and is either a
Servicing  Retained  Mortgage  Loan  or  a  Servicing  Released  Mortgage  Loan;
provided,  however,  that,  except as  expressly  approved  in writing by Buyer,
Mortgage  Loans shall not include any  "high-LTV"  loans (i.e.,  a mortgage loan
having a loan-to-value ratio in excess of 100% or any High Cost Mortgage Loans.

            "Mortgage  Loan  Documents"  means  the  documents  in  the  related
Mortgage File to be delivered to the Custodian.

            "Mortgage Loan Schedule" means with respect to any Transaction as of
any date, a mortgage  loan schedule in the form of either (a) Exhibit C attached
hereto or (b) a computer tape or other  electronic  medium  generated by Seller,
and delivered to Buyer and  Custodian,  which provides  information  (including,
without  limitation,  the  information  set forth on Exhibit C attached  hereto)
relating to the Purchased Mortgage Loans in a format acceptable to Buyer.

            "Mortgage  Note" means the promissory  note or other evidence of the
indebtedness of a Mortgagor secured by a Mortgage.

            "Mortgaged  Property" means the real property securing  repayment of
the debt evidenced by a Mortgage Note.

            "Mortgagor"  means the  obligor  or  obligors  on a  Mortgage  Note,
including  any  person who has  assumed or  guaranteed  the  obligations  of the
obligor thereunder.

            "Multiemployer  Plan" means a multiemployer  plan defined as such in
Section  3(37) of ERISA to which  contributions  have been or are required to be
made by Seller or any ERISA Affiliate and that is covered by Title IV of ERISA.

                                      -11-
<PAGE>

            "Net Income" means, for any period and any Person, the net income of
such Person for such period as  determined  in  accordance  with GAAP  excluding
unrealized gains and losses.

            "Net Worth" means,  with respect to any Person,  an amount equal to,
on a  consolidated  basis,  such  Person's  stockholder  equity  (determined  in
accordance with GAAP).

            "1934 Act" means the  Securities  Exchange  Act of 1934,  as amended
from time to time.

            "Non-Performing Mortgage Loan" means (i) any Mortgage Loan for which
any  payment of  principal  or  interest is more than twenty nine (29) days past
due,  (ii) any Mortgage  Loan with respect to which the related  mortgagor is in
bankruptcy  or (iii)  any  Mortgage  Loan  with  respect  to which  the  related
mortgaged property is in foreclosure.

            "Notice Date" has the meaning given to it in Section 3(b) hereof.

            "Obligations" means (a) all of Seller's indebtedness, obligations to
pay the Repurchase Price on the Repurchase Date, the Price  Differential on each
Price  Differential  Payment Date, and other  obligations  and  liabilities,  to
Buyer,  its Affiliates or Custodian  arising under,  or in connection  with, the
Program Agreements,  whether now existing or hereafter arising;  (b) any and all
sums  paid by Buyer or on  behalf of Buyer in order to  preserve  any  Purchased
Mortgage Loan or its interest  therein;  (c) in the event of any  proceeding for
the collection or enforcement  of any of Seller's  indebtedness,  obligations or
liabilities  referred to in clause (a),  the  reasonable  expenses of  retaking,
holding,  collecting,  preparing for sale, selling or otherwise  disposing of or
realizing on any  Purchased  Mortgage  Loan,  or of any exercise by Buyer of its
rights under the Program Agreements,  including, without limitation,  attorneys'
fees and  disbursements  and  court  costs;  and (d) all of  Seller's  indemnity
obligations to Buyer or Custodian or both pursuant to the Program Agreements.

            "OFAC" has the meaning set forth in Section 13(a)(27) hereof.

            "PBGC" means the Pension Benefit Guaranty  Corporation or any entity
succeeding to any or all of its functions under ERISA.

            "Person" means an individual, partnership,  corporation (including a
business  trust),  limited  liability  company,  joint  stock  company,   trust,
unincorporated  association,  joint venture or other entity,  or a government or
any political subdivision or agency thereof.

            "Plan"  means an  employee  benefit  or other  plan  established  or
maintained  by any  Seller or any ERISA  Affiliate  and  covered  by Title IV of
ERISA, other than a Multiemployer Plan.

            "Post Default Rate" means an annual rate of interest equal to the
greater of (a) the Pricing Rate plus 3% or (b) the Mortgage Interest Rate.

            "Price Differential" means with respect to any Transaction as of any
date of  determination,  an amount  equal to the product of (A) the Pricing Rate
for such Transaction and (B) the Purchase Price for such Transaction, calculated
daily on the basis of a 360-day  year for the actual  number of days  during the
period  commencing on (and including) the Purchase Date for such Transaction and
ending on (but excluding) the Repurchase Date.

            "Price Differential Payment Date" means, with respect to a Purchased
Mortgage Loan, the 5th day of the month following the related  Purchase Date and
each succeeding 5th day of the month thereafter; provided, that, with respect to
such Purchased Mortgage Loan, the final Price Differential Payment Date shall be
the related Repurchase Date; and provided,  further, that if any such day is not
a Business Day, the Price Differential Payment Date shall be the next succeeding
Business Day.

                                      -12-
<PAGE>

            "Pricing Rate" means LIBOR plus:

                        (a) 0.75% with  respect to  Transactions  the subject of
            which are Conforming Mortgage Loans;

                        (b) 0.75% with  respect to  Transactions  the subject of
            which are Jumbo Mortgage Loans;

                        (c) 0.75% with  respect to  Transactions  the subject of
            which are Super Jumbo Mortgage Loans;

                        (d) 1.25% with  respect to  Transactions  the subject of
            which are Alt-A Mortgage Loans; and

                        (e) the rate  determined in the sole discretion of Buyer
            with  respect to  Transactions  the  subject of which are  Exception
            Mortgage Loans and any other Transactions so identified by the Buyer
            in  agreeing  to  enter  into a  Transaction  with  respect  to such
            Exception Mortgage Loan

            The Pricing Rate shall change in accordance with LIBOR, as provided
in Section 5(a).

            Where a Purchased  Mortgage Loan may qualify for two or more Pricing
Rates hereunder,  unless otherwise  expressly agreed to by the Buyer in writing,
such  Purchased  Mortgage  Loan shall be assigned the higher  Pricing  Rate,  as
applicable.

            "Principal" has the meaning given to it in Annex I.

            "Program Agreements" means,  collectively,  the Servicing Agreement,
if any, the Servicer Notice,  if any, the Custodial  Agreement,  this Agreement,
the Electronic  Tracking  Agreement,  if entered into,  the  Collection  Account
Control  Agreement,  the Power of Attorney and,  with respect to each  Exception
Mortgage Loan, a Purchase Confirmation.

            "Prohibited Person" has the meaning set forth in Section 13(a)(27)
hereof.

            "Property" means any right or interest in or to property of any kind
whatsoever, whether real, personal or mixed and whether tangible or intangible.

                                      -13-
<PAGE>

            "Purchase  Confirmation"  means a confirmation of a Transaction,  in
the form attached as Exhibit B hereto.

            "Purchase Date" means the date on which Purchased Mortgage Loans are
to be transferred by Seller to Buyer.

            "Purchase  Price" means the price at which each  Purchased  Mortgage
Loan is transferred by Seller to Buyer, which shall equal:

            (i) on the  Purchase  Date,  in the case of all  Purchased  Mortgage
Loans the amount equal to the applicable Purchase Price Percentage multiplied by
the lesser of either:  (x) the Market Value of such  Purchased  Mortgage Loan or
(y) the  outstanding  principal  amount  thereof  as set  forth  on the  related
Mortgage Loan Schedule;

            (ii) on any day after the Purchase Date,  except where Buyer and the
Seller agree otherwise,  the amount  determined under the immediately  preceding
clause  (i)  decreased  by the amount of any cash  transferred  by the Seller to
Buyer  pursuant  to  Section  4(c)  hereof or  applied  to reduce  the  Seller's
obligations under clause (ii) of Section 4(b) hereof or under Section 6 hereof.

            "Purchase  Price  Percentage"  means,  with respect to each Mortgage
Loan, the following percentage, as applicable:

            (a) 97% with respect to Purchased Mortgage Loans that are Conforming
            Mortgage Loans;

            (b) 94% with  respect  to  Purchased  Mortgage  Loans that are Jumbo
            Mortgage Loans;

            (c) 90% with  respect  to  Purchased  Mortgage  Loans that are Super
            Jumbo Mortgage Loans;

            (d) 90% with  respect  to  Purchased  Mortgage  Loans that are Alt-A
            Mortgage Loans; and

            (e) with respect to Transactions  the subject of which are Exception
            Mortgage  Loans,  a percentage to be determined by Buyer in its sole
            discretion, provided that in the absence of an Exception Notice, the
            applicable  Purchase Price  Percentage  for such Purchased  Mortgage
            Loan  shall be reduced by 10% every ten (10)  Business  Day  period,
            such reduction to occur at the outset of each such ten (10) Business
            Day period,  commencing  on the date that such Mortgage Loan becomes
            an Exception Mortgage Loan.

            Where a Purchased Mortgage Loan may qualify for two or more Purchase
Price Percentages  hereunder,  unless otherwise expressly agreed to by the Buyer
in writing,  such  Purchased  Mortgage Loan shall be assigned the lower Purchase
Price Percentage, as applicable.

                                      -14-
<PAGE>

            "Purchased  Mortgage  Loans"  means  the  collective   reference  to
Mortgage  Loans  together with the  Repurchase  Assets  related to such Mortgage
Loans transferred by Seller to Buyer in a Transaction  hereunder,  listed on the
related  Mortgage Loan  Schedule  attached to the related  Transaction  Request,
which such Mortgage Loans the Custodian has been  instructed to hold pursuant to
the  Custodial  Agreement.  For the  avoidance  of doubt,  with  respect  to any
Servicing  Retained Loan, the term  "Purchased  Mortgage Loan" shall not include
the related Servicing Rights.

            "Qualified Insurer" means a mortgage guaranty insurance company duly
authorized  and licensed  where  required by law to transact  mortgage  guaranty
insurance business and approved as an insurer by Fannie Mae or Freddie Mac.

            "Qualified  Originator"  means an originator of Mortgage  Loans duly
licensed and validly authorized under applicable law to originate mortgage loans
in the related jurisdiction and not disapproved by Buyer.

            "Records"  means  all  instruments,   agreements  and  other  books,
records,  and  reports  and data  generated  by other  media for the  storage of
information maintained by Seller or any other person or entity with respect to a
Purchased   Mortgage  Loan.  Records  shall  include  the  Mortgage  Notes,  any
Mortgages,  the  Mortgage  Files,  the credit  files  related  to the  Purchased
Mortgage  Loan and any other  instruments  necessary  to  document  or service a
Mortgage Loan.

            "Recourse  Indebtedness"  means, for any date of determination,  for
any Person the aggregate of Indebtedness of such Person on a consolidated  basis
during such period maintained in accordance with GAAP; provided,  however,  that
for any period,  the  aggregate  Indebtedness  of such Person during such period
maintained in accordance with GAAP shall be calculated less the aggregate amount
of any such  Indebtedness  that is reflected on the balance sheet of such Person
in respect of obligations  incurred pursuant to a securitization  transaction or
other secondary  market  transaction,  solely to the extent such obligations are
secured by the assets subject to such  transaction  and are non recourse to such
Person.  In  the  event  that  any  Indebtedness  would  be  excluded  from  the
calculation of Indebtedness but for the existence of recourse, such Person shall
be entitled  nonetheless to exclude the amount of such  Indebtedness that is not
subject to recourse.

            "REO Property" means real property  acquired by Seller,  including a
Mortgaged Property acquired through foreclosure of a Mortgage Loan or by deed in
lieu of such foreclosure.

            "Reporting  Date" means the 5th day of each month or, if such day is
not a Business Day, the next succeeding Business Day.

                                      -15-
<PAGE>

            "Repurchase  Assets" has the meaning  assigned  thereto in Section 8
hereof.

            "Repurchase  Date"  means the earlier of (i) the  Termination  Date,
(ii) the date set forth in the applicable Purchase Confirmation,  (iii) the date
determined by  application  of Section 16 hereof or (iv) the date  identified to
Buyer  by  Seller  as the  date  that the  related  Mortgage  Loan is to be sold
pursuant to a Take-out Commitment.

            "Repurchase Price" means the price at which Purchased Mortgage Loans
are to be  transferred  from Buyer to Seller upon  termination of a Transaction,
which will be determined in each case  (including  Transactions  terminable upon
demand)  as the sum of the  Purchase  Price and the  accrued  but  unpaid  Price
Differential as of the date of such determination.

            "Request  for  Certification"  means a notice sent to the  Custodian
reflecting the sale of one or more Purchased Mortgage Loans to Buyer hereunder.

            "Requirement  of Law" means,  with  respect to any Person,  any law,
treaty,  rule or regulation or determination of an arbitrator,  a court or other
governmental authority,  applicable to or binding upon such Person or any of its
property or to which such Person or any of its property is subject.

            "Responsible  Officer" means as to any Person,  the chief  executive
officer or, with respect to financial  matters,  the chief financial  officer of
such Person.

            "S&P" means  Standard & Poor's  Ratings  Services,  or any successor
thereto.

            "SEC" means the Securities and Exchange Commission, or any successor
thereto.

            "Security  Agreement"  means, with respect to any Mortgage Loan, any
contract, instrument or other document related to security for repayment thereof
(other than the related  Mortgage and Mortgage Note),  executed by the Mortgagor
and/or  others  in  connection  with  such  Mortgage  Loan,   including  without
limitation,  any security agreement,  guaranty,  title insurance policy,  hazard
insurance policy,  chattel mortgage,  letter of credit or certificate of deposit
or other pledged  accounts,  and any other documents and records relating to any
of the foregoing.

            "Seller"  means  Chimera  Investment  Corporation  or its  permitted
successors and assigns.

            "Servicer"  means,  with respect to Servicing  Released  Loans,  the
servicers  listed on  Schedule  3A  attached  hereto,  and with  respect  to the
Servicing  Retained Loans,  the servicers listed on Schedule 3B attached hereto,
and any successor thereto,  or any other servicer mutually  acceptable to Buyers
and Seller.

            "Servicer Notice" means a notice acknowledged by the Master Servicer
substantially in the form of Exhibit M hereto.

            "Servicing Agreement" means any servicing agreement entered into
among Seller and a Servicer or the Master Servicer as the same may be amended
from time to time.

            "Servicing  Released  Loan"  means a  Purchased  Mortgage  Loan with
respect  to  which  the  related  Servicing  Rights  were  sold  to  Seller  and
subsequently purchased by Buyers on the related Purchase Date.

            "Servicing Retained Loan" means Purchased Mortgage Loan with respect
to which the related  Servicing  Rights were retained by a third party  Servicer
upon the sale of such  Loan to  Seller  and  subsequent  sale to  Buyers  on the
related Purchase Date.

                                      -16-
<PAGE>

            "Servicing Rights" means contractual,  possessory or other rights of
Seller or any other  Person,  whether  arising  under a Servicing  Agreement  or
otherwise, to administer or service a Purchased Mortgage Loan.

            "SIPA" means the  Securities  Investor  Protection  Act of 1970,  as
amended from time to time.

            "Subordinated  Debt"  means,  Indebtedness  of  Seller  which is (i)
unsecured,  (ii) no part of the principal of such Indebtedness is required to be
paid (whether by way of mandatory sinking fund, mandatory redemption,  mandatory
prepayment  or  otherwise)  prior to the date  which is one year  following  the
Termination  Date and (iii) the payment of the principal of and interest on such
Indebtedness and other obligations of Seller in respect of such Indebtedness are
subordinated  to the prior  payment  in full of the  principal  of and  interest
(including  post-petition   obligations)  on  the  Transactions  and  all  other
obligations and liabilities of Seller to Buyer hereunder on terms and conditions
approved  in writing by Buyer and all other  terms and  conditions  of which are
satisfactory in form and substance to Buyer.

            "Subsidiary"  means,  with respect to any Person,  any  corporation,
partnership  or other entity of which at least a majority of the  securities  or
other ownership  interests  having by the terms thereof ordinary voting power to
elect a majority of the board of directors or other persons  performing  similar
functions of such  corporation,  partnership  or other entity  (irrespective  of
whether or not at the time securities or other ownership  interests of any other
class or classes of such corporation,  partnership or other entity shall have or
might have voting power by reason of the happening of any contingency) is at the
time  directly or  indirectly  owned or controlled by such Person or one or more
Subsidiaries  of such Person or by such Person and one or more  Subsidiaries  of
such Person.

            "Super Jumbo  Mortgage  Loan" means a Mortgage  Loan that  otherwise
satisfies the definition of Jumbo  Mortgage  Loan,  but has an unpaid  principal
balance of at least $2,000,000 but not greater than $5,000,000.

            "Take-out  Commitment"  means a  commitment  of Seller to either (a)
sell one or more  identified  Mortgage  Loans to a Take-out  Investor or (b) (i)
swap one or more identified  Mortgage Loans with a Take-out  Investor that is an
Agency for an Agency  Security,  and (ii) sell the related Agency  Security to a
Take-out  Investor,  and in each case,  the  corresponding  Take-out  Investor's
commitment  back to Seller to effectuate  any of the  foregoing,  as applicable.
With respect to any Take-out  Commitment with an Agency,  the applicable  agency
documents list Buyer as sole subscriber.

            "Take-out  Investor"  means (i) an Agency or (ii) other  institution
which has made a Take-out Commitment and has been approved by Buyer.

            "Termination  Date" means the earlier of (a) January 16,  2009,  and
(b) the date of the occurrence of an Event of Default.

            "Test Period" means any calendar quarter.

            "Transaction" has the meaning set forth in Section 1 hereof.

                                      -17-
<PAGE>

            "Transaction  Request" means a request from Seller to Buyer,  in the
form attached as Exhibit A hereto, to enter into a Transaction.

            "Trust  Receipt  and  Certification"  means,  with  respect  to  any
Transaction as of any date, a receipt and  certification in the form attached as
an exhibit to the Custodial Agreement.

            "Uniform  Commercial  Code" means the Uniform  Commercial Code as in
effect on the date  hereof in the  State of New York or the  Uniform  Commercial
Code as in effect in the applicable jurisdiction.

            "Violation Deadline" has the meaning assigned thereto in Section
4(c) hereof.

3. Program; Initiation of Transactions

            a.  From time to time,  Buyer  will  purchase  from  Seller  certain
            Mortgage  Loans  that  have been  purchased  by  Seller  from  other
            originators.  This  Agreement is a commitment by Buyer to enter into
            Transactions  with the  Seller  for an amount  equal to the  Maximum
            Committed  Purchase  Price.  This  Agreement is not a commitment  by
            Buyer  to  enter  into  Transactions  with the  Seller  for  amounts
            exceeding the Maximum Committed Purchase Price but rather sets forth
            the procedures to be used in connection  with periodic  requests for
            Buyer to enter into Transactions with the Seller.  The Seller hereby
            acknowledges  that,  beyond the Maximum  Committed  Purchase  Price,
            Buyer is under no  obligation  to agree to enter  into,  or to enter
            into,  any  Transaction  pursuant to this  Agreement.  All Purchased
            Mortgage Loans shall exceed or meet the Acquisition Guidelines,  and
            shall be serviced  by  Servicer.  The  aggregate  Purchase  Price of
            Purchased  Mortgage Loans subject to outstanding  Transactions shall
            not exceed the Maximum Aggregate Purchase Price.

            b. With  respect to each  Transaction,  Seller  shall give Buyer and
            Custodian  at least 1 Business  Day's prior  notice of any  proposed
            Purchase  Date (the date on which such notice is given,  the "Notice
            Date");  provided, that if Seller is delivering 25 or fewer Mortgage
            Loans on a Purchase Date, the notice shall be delivered on or before
            10:30 a.m. (New York City time) on the Purchase  Date. On the Notice
            Date,  Seller shall (i) request that Buyer enter into a  Transaction
            by furnishing to Buyer a Transaction Request,  (ii) deliver to Buyer
            and  Custodian  a  Mortgage  Loan  Schedule  and  (iii)  deliver  to
            Custodian either a Request for  Certification and each Mortgage File
            in  accordance  with  Section  10(b)(3)  hereof.   With  respect  to
            requested  Transactions which would cause the aggregate  outstanding
            Purchase  Price  for all  outstanding  Transactions  to  exceed  the
            Maximum  Committed   Purchase  Price,  Buyer  may  enter  into  such
            requested  Transaction  or may notify Seller of its intention not to
            enter into such Transaction. In the event the Mortgage Loan Schedule
            provided  by  Seller  contains   erroneous  computer  data,  is  not
            formatted  properly or the computer fields are otherwise  improperly
            aligned,  Buyer shall provide written or electronic notice to Seller
            describing  such error and Seller may either (a) give Buyer  written
            or electronic  authority to correct the computer data,  reformat the
            Mortgage Loans or properly align the computer  fields or (b) correct
            the computer data,  reformat or properly  align the computer  fields
            itself and resubmit the Mortgage Loan  Schedule as required  herein.
            In the event that the Seller  gives Buyer  authority  to correct the
            computer data, reformat the Mortgage Loan Schedule or properly align
            the  computer  fields,  the Seller  shall pay $10 per change and any
            other  direct  expenses  incurred by Buyer;  provided,  that upon 30
            days'  notice  to  the  Sellers,  Buyer  may  change  such  computer
            correction  fee.  The  Seller  shall hold  Buyer  harmless  for such
            correction,  reformatting  or realigning,  as applicable,  except as
            otherwise expressly provided herein.

                                      -18-
<PAGE>

            c. With respect to each Exception Mortgage Loan, upon receipt of the
            Transaction  Request,  Buyer shall,  consistent with this Agreement,
            specify  the  terms for such  proposed  Transaction,  including  the
            Purchase  Price,   the  Pricing  Rate,  the  Market  Value  and  the
            Repurchase  Date in respect of such  Transaction.  The terms thereof
            shall be set forth in the Purchase  Confirmation  to be delivered to
            Seller on or prior to the Purchase Date.

            d. With  respect  to each  Exception  Mortgage  Loan,  the  Purchase
            Confirmation,   together  with  this  Agreement,   shall  constitute
            conclusive  evidence of the terms  agreed  between  Buyer and Seller
            with respect to the  Transaction to which the Purchase  Confirmation
            relates,  and  Seller's  acceptance  of the related  proceeds  shall
            constitute   Seller's  agreement  to  the  terms  of  such  Purchase
            Confirmation.  It is the intention of the parties that, with respect
            to each Exception  Mortgage Loan, each Purchase  Confirmation  shall
            not be separate from this Agreement but shall be made a part of this
            Agreement.  In the event of any conflict between this Agreement and,
            with   respect  to  each   Exception   Mortgage   Loan,  a  Purchase
            Confirmation,  the terms of the Purchase  Confirmation shall control
            with respect to the related Transaction.

            e. Upon the satisfaction of the applicable  conditions precedent set
            forth  in  Section  10  hereof,  all  of  Seller's  interest  in the
            Repurchase Assets shall pass to Buyer on the Purchase Date,  against
            the transfer of the Purchase  Price to Seller.  Upon transfer of the
            Mortgage  Loans to Buyer as set  forth  in this  Section  and  until
            termination of any related  Transactions  as set forth in Sections 4
            or 16 of this Agreement,  ownership of each Mortgage Loan, including
            each document in the related Mortgage File and Records, is vested in
            Buyer;  provided that,  prior to the recordation by the Custodian as
            provided for in the Custodial  Agreement record title in the name of
            Seller to each  Mortgage  shall be retained by Seller in trust,  for
            the  benefit  of Buyer,  for the sole  purpose of  facilitating  the
            servicing  and the  supervision  of the  servicing  of the  Mortgage
            Loans.

                                      -19-
<PAGE>

4. Repurchase

            a. Seller shall repurchase the related Purchased Mortgage Loans from
            Buyer on each related Repurchase Date. Such obligation to repurchase
            exists  without  regard to any prior or  intervening  liquidation or
            foreclosure  with  respect  to  any  Purchased  Mortgage  Loan  (but
            liquidation  or  foreclosure  proceeds  received  by Buyer  shall be
            applied to reduce the Repurchase  Price for such Purchased  Mortgage
            Loan on each Price  Differential  Payment  Date except as  otherwise
            provided  herein).  Seller  is  obligated  to  repurchase  and  take
            physical  possession of the Purchased  Mortgage  Loans from Buyer or
            its designee  (including the  Custodian) at Seller's  expense on the
            related Repurchase Date.

            b. Provided  that no Default shall have occurred and is  continuing,
            and Buyer has received the related  Repurchase Price upon repurchase
            of the  Purchased  Mortgage  Loans,  Buyer  agrees  to  release  its
            ownership   interest  hereunder  in  the  Purchased  Mortgage  Loans
            (including, the Repurchase Assets related thereto) at the request of
            Seller. With respect to payments in full by the related Mortgagor of
            a Purchased Mortgage Loan, Seller agrees to (i) provide Buyer with a
            copy of a report  from  the  related  Servicer  or  Master  Servicer
            indicating that such Purchased  Mortgage Loan has been paid in full,
            (ii) remit to Buyer,  within two Business Days, the Repurchase Price
            with  respect to such  Purchased  Mortgage  Loans and (iii)  provide
            Buyer a notice specifying each Purchased Mortgage Loan that has been
            prepaid in full.  Buyer agrees to release its ownership  interest in
            Purchased  Mortgage  Loans  which  have been  prepaid  in full after
            receipt of evidence of compliance  with clauses (i) through (iii) of
            the immediately preceding sentence.

            c. In the  event  that  at any  time  any  Purchased  Mortgage  Loan
            violates  the  applicable  sublimit set forth in the  definition  of
            Market Value,  Buyer may, in its sole  discretion,  redesignate such
            Mortgage  Loan as an  Exception  Mortgage  Loan.  If Buyer  does not
            redesignate such Mortgage Loan as an Exception Mortgage Loan, and if
            Seller fails to notify Buyer within five (5) Business Days following
            notice or knowledge of such  violation  that Seller does not want to
            receive a bid for such Mortgage Loan as described below, Buyer or an
            Affiliate  of  Buyer  may  offer to  terminate  Seller's  right  and
            obligation to repurchase such Mortgage Loan by paying Seller a price
            to be set by Buyer in its sole discretion (a "Bid").  Seller, within
            five (5)  Business  Days of receipt of Buyer's  bid (the  "Violation
            Deadline")  may, in its sole  discretion,  either (i) accept Buyer's
            bid,  terminating  Seller's  right to repurchase  such Mortgage Loan
            under this  Agreement or (ii)  immediately  repurchase  the Mortgage
            Loan at the  Repurchase  Price in  accordance  with this  Section 4.
            Seller  shall pay Buyer a bid fee equal to $250 (the "Bid Fee") with
            respect to each Mortgage Loan on which Buyer or its Affiliate  makes
            a Bid,  regardless  of whether the Bid is accepted  and such Bid Fee
            shall  be due and  payable  to  Buyer  on or  before  the  Violation
            Deadline.  Any amount paid by Buyer or its  Affiliate  to  terminate
            Seller's  right to repurchase a Purchased  Mortgage Loan if a Bid is
            accepted  pursuant to this Section  shall be applied by Buyer toward
            the outstanding Repurchase Price for the applicable Transaction.

                                      -20-
<PAGE>

5. Price Differential.

            a. On each  Business  Day that a  Transaction  is  outstanding,  the
            Pricing  Rate  shall be reset  and,  unless  otherwise  agreed,  the
            accrued and unpaid  Price  Differential  shall be settled in cash on
            each related  Price  Differential  Payment  Date.  Two Business Days
            prior to the Price  Differential  Payment  Date,  Buyer  shall  give
            Seller  written  or  electronic  notice  of the  amount of the Price
            Differential  due on such Price  Differential  Payment  Date. On the
            Price Differential Payment Date, Seller shall pay to Buyer the Price
            Differential  for such Price  Differential  Payment Date (along with
            any other amounts to be paid pursuant to Section 7 hereof),  by wire
            transfer in immediately available funds.

            b. If Seller fails to pay all or part of the Price  Differential  by
            3:00 p.m.  (New York City time) on the  related  Price  Differential
            Payment Date,  with respect to any Purchased  Mortgage Loan,  Seller
            shall be  obligated  to pay to Buyer (in  addition  to, and together
            with, the amount of such Price Differential)  interest on the unpaid
            Repurchase  Price at a rate per annum equal to the Post Default Rate
            until the Price Differential is received in full by Buyer.

            c.  Seller may remit to Buyer funds up to the  outstanding  Purchase
            Price, to be held as unsegregated cash margin and collateral for all
            Obligations  under the  Repurchase  Agreement  (such amount,  to the
            extent not applied to Obligations  under the  Repurchase  Agreement,
            the "Buydown Amount").  The Buydown Amount shall be used by Buyer in
            order to calculate the Price Differential,  which will accrue on the
            Purchase Price then outstanding minus the Buydown Amount, applied to
            Transactions  involving the lowest Pricing Rate. The Seller shall be
            entitled  to  request  a  drawdown  of the  Buydown  Amount or remit
            additional  funds to be added to the Buydown Amount no more than one
            time per week. Without limiting the generality of the foregoing,  in
            the event  that a Margin  Call or other  Default  exists,  the Buyer
            shall be entitled  to use any or all of the  Buydown  Amount to cure
            such circumstance or otherwise  exercise  remedies  available to the
            Buyer without prior notice to, or consent from, the Seller. Provided
            no  Margin  Call or other  Default  exists,  Buyer  shall  remit any
            portion  of such  Buydown  Amount  back  to  Seller  within  one (1)
            Business Day of written request thereof;  provided that such written
            request  is  received  by the Buyer  prior to 3:00 pm (New York City
            time).

6. Margin Maintenance

            a. If at any time the Market Value of any  Purchased  Mortgage  Loan
            subject to a Transaction is less than Buyer's Margin Amount for such
            Transaction  (a "Margin  Deficit"),  then Buyer may by notice to any
            Seller require Seller to transfer to Buyer cash or Eligible Mortgage
            Loans  satisfactory  to Buyer in its  sole  discretion  ("Additional
            Purchased Mortgage Loans") in an amount at least equal to the Margin
            Deficit (such requirement, a "Margin Call") .

                                      -21-
<PAGE>

            b. Notice  delivered  pursuant  to Section  6(a) may be given by any
            written or electronic means. Any notice given before 10:00 a.m. (New
            York City  time) on a  Business  Day shall be met,  and the  related
            Margin Call satisfied,  no later than 5:00 p.m. (New York City time)
            on such Business  Day;  notice given after 10:00 a.m. (New York City
            time) on a Business  Day shall be met,  and the related  Margin Call
            satisfied,  no later  than  5:00 p.m.  (New  York City  time) on the
            following   Business  Day  (the  foregoing  time   requirements  for
            satisfaction  of a  Margin  Call  are  referred  to as  the  "Margin
            Deadlines").  The failure of Buyer, on any one or more occasions, to
            exercise its rights  hereunder,  shall not change or alter the terms
            and conditions to which this Agreement is subject or limit the right
            of Buyer to do so at a later date.  Seller and Buyer each agree that
            a failure or delay by Buyer to exercise its rights  hereunder  shall
            not limit or waive Buyer's  rights under this Agreement or otherwise
            existing by law or in any way create additional rights for Seller.

            c. In the event that a Margin  Deficit  exists  with  respect to any
            Purchased  Mortgage Loan,  Buyer may retain any funds received by it
            to which the Seller  would  otherwise be entitled  hereunder,  which
            funds (i) shall be held by Buyer against the related  Margin Deficit
            and (ii) may be applied by Buyer against any Purchased Mortgage Loan
            for which the related Margin Deficit remains otherwise  unsatisfied.
            Notwithstanding  the foregoing,  the Buyer retains the right, in its
            sole  discretion,  to make a  Margin  Call in  accordance  with  the
            provisions of this Section 6.

7. Income Payments

            a. If Income  is paid in  respect  of any  Purchased  Mortgage  Loan
            during the term of a Transaction,  such Income shall be the property
            of Buyer.

            b. Provided no Event of Default has occurred and is  continuing,  on
            each Price Differential Payment Date, Seller shall remit to Buyer an
            amount equal to the Price  Differential  out of the interest portion
            of the Income paid in respect to the  Purchased  Mortgage  Loans for
            the preceding  month in accordance with Section 5 of this Agreement.
            Upon termination of any Transaction, to the extent that there is any
            excess Income after  repayment of all amounts to be  transferred  to
            Buyer by Seller,  Buyer,  in its sole  option,  may apply the excess
            income to reduce the  Repurchase  Price due upon  termination of any
            other outstanding Transactions.

            c. Upon the occurrence and  continuance of an Event of Default,  the
            Seller  shall and shall cause the Master  Servicer  to deposit  such
            Income to the Collection  Account.  All such Income shall be held in
            trust for Buyer,  shall  constitute  the property of Buyer and shall
            not be commingled with other property of the Seller, Master Servicer
            or  any  Affiliate  of the  Seller  or  Master  Servicer  except  as
            expressly permitted above. Funds deposited in the Collection Account
            during  any month  shall be held  therein,  in trust for the  Buyer,
            until  the next  Price  Differential  Payment  Date.  If an Event of
            Default has occurred,  all funds in the Collection  Account shall be
            withdrawn and applied as determined by the Buyer.

                                      -22-
<PAGE>

            d.  Notwithstanding any provision to the contrary in this Section 7,
            within two (2) Business Days of receipt by Seller or Master Servicer
            of any prepayment of principal in full,  with respect to a Purchased
            Mortgage Loan,  Seller or Master Servicer shall remit such amount to
            Buyer and Buyer shall  immediately apply any such amount received by
            Buyer  to  reduce  the  amount  of the  Repurchase  Price  due  upon
            termination of the related Transaction.

            e.  Notwithstanding  anything to the contrary set forth herein, upon
            notice  by  Buyer  to  Seller,  Seller  shall  remit  to  Buyer  all
            collections received by Servicer or Seller on the Purchased Mortgage
            Loans in accordance with Buyer's directions no later than the day on
            which  aggregate  collections  of principal and interest  (excluding
            principal  prepayments) on the Purchased  Mortgaged Loans reaches an
            amount to be indicated by Buyer in its sole discretion.  8. Security
            Interest

            Although the parties intend that all Transactions hereunder be sales
and purchases and not loans, in the event any such Transactions are deemed to be
loans,  and in any event,  Seller  hereby  pledges to Buyer as security  for the
performance by Seller of its Obligations and hereby grants,  assigns and pledges
to Buyer a fully  perfected  first priority  security  interest in the Purchased
Mortgage  Loans,  the Records,  and all related  servicing  rights,  the Program
Agreements (to the extent such Program  Agreements and Seller's right thereunder
relate to the Purchased Mortgage Loans), any related Take-out  Commitments,  any
Property  relating to the Purchased  Mortgage Loans, all insurance  policies and
insurance  proceeds  relating  to any  Purchased  Mortgage  Loan or the  related
Mortgaged  Property,  including,  but not limited  to, any  payments or proceeds
under any related primary insurance and hazard insurance, Income, the Collection
Account,  the Buydown  Amount and any account to which such amount is deposited,
Interest Rate Protection  Agreements  relating solely to any Purchased  Mortgage
Loan,  accounts  (including  any interest of Seller in escrow  accounts) and any
other  contract  rights,  instruments,  accounts,  payments,  rights to  payment
(including  payments of interest or finance  charges)  general  intangibles  and
other  assets  relating to the  Purchased  Mortgage  Loans  (including,  without
limitation, any other accounts) or any interest in the Purchased Mortgage Loans,
and  any  proceeds   (including   the  related   securitization   proceeds)  and
distributions  with  respect  to any of the  foregoing  and any other  property,
rights,  title or interests as are  specified on a  Transaction  Request  and/or
Trust  Receipt  and  Certification,  in all  instances,  whether  now  owned  or
hereafter  acquired,  now  existing  or  hereafter  created  (collectively,  the
"Repurchase Assets").

            Seller  agrees to execute,  deliver  and/or file such  documents and
perform  such  acts as may be  reasonably  necessary  to fully  perfect  Buyer's
security interest created hereby. Furthermore,  the Seller hereby authorizes the
Buyer to file financing  statements  relating to the Repurchase  Assets,  as the
Buyer,  at its option,  may deem  appropriate.  The Seller  shall pay the filing
costs for any  financing  statement  or  statements  prepared  pursuant  to this
Section 8.

9. Payment and Transfer

                                      -23-
<PAGE>

            Unless otherwise mutually agreed in writing,  all transfers of funds
to be  made by  Seller  hereunder  shall  be made  in  Dollars,  in  immediately
available funds,  without  deduction,  set-off or counterclaim,  to Buyer at the
following account maintained by Buyer: Account No. 3074 3796, for the account of
CSFB Buyer/Chimera Investment Corporation  Seller-Inbound Account, Citibank, ABA
No.  021 000 089 or such  other  account  as Buyer  shall  specify  to Seller in
writing.  Seller  acknowledges  that it has no  rights  of  withdrawal  from the
foregoing account.  All Purchased Mortgage Loans transferred by one party hereto
to the other party shall be in the case of a purchase by Buyer in suitable  form
for transfer or shall be accompanied by duly executed instruments of transfer or
assignment  in blank  and such  other  documentation  as  Buyer  may  reasonably
request.  All Purchased Mortgage Loans shall be evidenced by a Trust Receipt and
Certification.  Any Repurchase Price received by Buyer after 2:00 p.m. (New York
City time) shall be deemed received on the next succeeding Business Day.

10. Conditions Precedent

            a.  Initial  Transaction.  As  conditions  precedent  to the initial
            Transaction,  Buyer shall have received on or before the day of such
            initial   Transaction   the   following,   in  form  and   substance
            satisfactory  to Buyer and duly  executed  by Seller  and each other
            party thereto:

                        (1)   Program   Agreements.   The   Program   Agreements
            (including  without  limitation  a  Custodial  Agreement  in a  form
            acceptable  to Buyer) duly  executed  and  delivered  by the parties
            thereto   and  being  in  full  force  and   effect,   free  of  any
            modification, breach or waiver.

                        (2) Security  Interest.  Evidence that all other actions
            necessary  or, in the  opinion of Buyer,  desirable  to perfect  and
            protect Buyer's  interest in the Purchased  Mortgage Loans and other
            Repurchase Assets have been taken,  including,  without  limitation,
            duly   authorized  and  filed  Uniform   Commercial  Code  financing
            statements on Form UCC-1.

                        (3)  Organizational  Documents.  A  certificate  of  the
            corporate secretary of Seller substantially in the form of Exhibit H
            hereto,  attaching certified copies of Seller's charter,  bylaws and
            corporate   resolutions   approving  the  Program   Agreements   and
            transactions   thereunder   (either   specifically   or  by  general
            resolution) and all documents  evidencing other necessary  corporate
            action or  governmental  approvals as may be required in  connection
            with the Program Agreements.

                        (4) Good  Standing  Certificate.  A certified  copy of a
            good standing  certificate  from the jurisdiction of organization of
            Seller,  dated as of no earlier than the date 10 Business Days prior
            to  the  Purchase  Date  with  respect  to the  initial  Transaction
            hereunder.

                        (5) Incumbency Certificate. An incumbency certificate of
            the  corporate  secretary  of Seller,  certifying  the  names,  true
            signatures  and titles of the  representatives  duly  authorized  to
            request   transactions   hereunder   and  to  execute   the  Program
            Agreements.

                                      -24-
<PAGE>

                        (6) Opinion of Counsel.  An opinion of Seller's counsel,
            in form  and  substance  substantially  as set  forth in  Exhibit  F
            attached hereto.

                        (7) Fees. Payment of any fees due to Buyer hereunder.

                        (8)  Insurance.  Evidence that Seller has added Buyer as
            an additional loss payee under the Seller's Fidelity Insurance.

            b. All  Transactions.  The  obligation  of Buyer to enter  into each
            Transaction  pursuant to this  Agreement is subject to the following
            conditions precedent:

                        (1)  Due   Diligence   Review.   Without   limiting  the
            generality of Section 34 hereof, Buyer shall have completed,  to its
            satisfaction, its due diligence review of the related Mortgage Loans
            and Seller and each Servicer.

                        (2) Required Documents.  The Seller shall have delivered
            the Mortgage File to the  Custodian in accordance  with the terms of
            the Custodial Agreement.

                        (3) Transaction  Documents.  Buyer or its designee shall
            have  received  on or  before  the day of such  Transaction  (unless
            otherwise  specified in this  Agreement) the following,  in form and
            substance satisfactory to Buyer and (if applicable) duly executed:

            (a) A Transaction  Request delivered pursuant to Section 3(c) hereof
            and a Purchase Confirmation, if applicable.

            (b) The Request for Certification and the related Custodial Mortgage
            Loan Schedule, and the Trust Receipt.

            (c) Such  certificates,  opinions of counsel or other  documents  as
            Buyer may reasonably request.

                        (4) No  Default.  No Default  or Event of Default  shall
            have occurred and be continuing;

                        (5) Acquisition  Guidelines.  A true and correct copy of
            the relevant  Acquisition  Guidelines certified by an officer of the
            Seller, which have been approved by Buyer.

                        (6) Requirements of Law. Buyer shall not have determined
            that the introduction of or a change in any Requirement of Law or in
            the  interpretation  or  administration  of any  Requirement  of Law
            applicable  to  Buyer  has  made it  unlawful,  and no  Governmental
            Authority  shall have  asserted  that it is  unlawful,  for Buyer to
            enter into Transactions with a Pricing Rate based on LIBOR.

                        (7)  Representations  and Warranties.  Both  immediately
            prior to the  related  Transaction  and  also  after  giving  effect
            thereto and to the  intended use thereof,  the  representations  and
            warranties  made by Seller in each Program  Agreement shall be true,
            correct and complete on and as of such Purchase Date in all material
            respects with the same force and effect as if made on and as of such
            date (or, if any such representation or warranty is expressly stated
            to have been made as of a specific date, as of such specific date).

                                      -25-
<PAGE>

                        (8) Electronic Tracking Agreement.  To the extent Seller
            is  selling  Mortgage  Loans  which are  registered  on the  MERS(R)
            System, an Electronic Tracking Agreement entered into, duly executed
            and  delivered  by the  parties  thereto and being in full force and
            effect, free of any modification, breach or waiver.

                        (9) Material Adverse Change. None of the following shall
            have occurred and/or be continuing:

            (a) Credit Suisse First Boston,  New York  Branch's  corporate  bond
            rating  as  calculated  by  S&P  or  Moody's  has  been  lowered  or
            downgraded to a rating below investment grade by S&P or Moody's;

            (b) an  event or  events  shall  have  occurred  in the  good  faith
            determination of Buyer resulting in the effective absence of a "repo
            market"  or  comparable   "lending   market"  for   financing   debt
            obligations  secured by mortgage  loans or securities or an event or
            events  shall  have  occurred  resulting  in Buyer not being able to
            finance  Purchased  Mortgage  Loans  through  the "repo  market"  or
            "lending  market"  with  traditional  counterparties  at rates which
            would have been reasonable  prior to the occurrence of such event or
            events; or

            (c)  an  event  or  events  shall  have  occurred  resulting  in the
            effective absence of a "securities  market" for securities backed by
            mortgage  loans or an event or events shall have occurred  resulting
            in Buyer not being able to sell securities  backed by mortgage loans
            at prices  which would have been  reasonable  prior to such event or
            events; or

            (d) there  shall  have  occurred a  material  adverse  change in the
            financial  condition of Buyer which  affects (or can  reasonably  be
            expected to affect) materially and adversely the ability of Buyer to
            fund its obligations under this Agreement.

11. Program; Costs

            a.  Seller  shall  reimburse  Buyer  for any of  Buyer's  reasonable
            out-of-pocket  costs,  including  due  diligence  review  costs  and
            reasonable  attorney's  fees,  incurred by Buyer in determining  the
            acceptability to Buyer of any Mortgage Loans. Seller shall also pay,
            or reimburse  Buyer if Buyer shall pay, any  termination  fee, which
            may be due any  servicer.  Seller shall pay the fees and expenses of
            Buyer's counsel in connection with the Program Agreements;  provided
            that the Seller shall not be responsible for legal fees in excess of
            $60,000 in connection with the initial  preparation and negotiations
            of the Program Agreements or due diligence cost in excess of the Due
            Diligence Cap in accordance  with Section 34 hereof.  Legal fees for
            any  subsequent  amendments to this  Agreement or related  documents
            shall be borne by Seller.  Seller  shall pay ongoing  custodial  and
            bank fees and  expenses,  and any other  ongoing  fees and  expenses
            under any other Program Agreement.

                                      -26-
<PAGE>

            b. If Buyer  determines that, due to the introduction of, any change
            in, or the  compliance  by Buyer with (i) any  eurocurrency  reserve
            requirement or (ii) the interpretation of any law, regulation or any
            guideline  or request  from any central  bank or other  Governmental
            Authority  (whether or not having the force of law),  there shall be
            an  increase  in the cost to Buyer in engaging in the present or any
            future  Transactions,  then Seller agrees to pay to Buyer, from time
            to time,  upon demand by Buyer (with a copy to Custodian) the actual
            cost of additional amounts as specified by Buyer to compensate Buyer
            for such increased costs.

            c. With  respect to any  Transaction,  Buyer may  conclusively  rely
            upon,  and shall incur no liability  to Seller in acting  upon,  any
            request or other  communication  that Buyer  reasonably  believes to
            have  been  given or made by a  person  authorized  to enter  into a
            Transaction on Seller's behalf, whether or not such person is listed
            on the certificate delivered pursuant to Section 10(a)(5) hereof. In
            each such case,  Seller hereby  waives the right to dispute  Buyer's
            record of the terms of the Purchase  Confirmation,  request or other
            communication.

            d.  Notwithstanding  the assignment of the Program  Agreements  with
            respect to each Purchased Mortgage Loan to Buyer,  Seller agrees and
            covenants  with  Buyer to  enforce  diligently  Seller's  rights and
            remedies set forth in the Program Agreements.

            e. Any payments  made by Seller to the Buyer shall be free and clear
            of, and without  deduction or withholding for, any taxes;  provided,
            however,  that if such payer  shall be  required by law to deduct or
            withhold any taxes from any sums  payable to Buyer,  then such payer
            shall (A) make such deductions or withholdings  and pay such amounts
            to the relevant authority in accordance with applicable law, (B) pay
            to Buyer the sum that would have been payable had such  deduction or
            withholding not been made, and (C) at the time Price Differential is
            paid, pay to Buyer all  additional  amounts as specified by Buyer to
            preserve the  after-tax  yield Buyer would have received if such tax
            had not been  imposed,  and otherwise  indemnify  Buyer for any such
            taxes imposed.

12. Servicing

            a. Seller, on Buyer's behalf,  shall contract with each Servicer and
            the Master Servicer to, or if Seller is the Servicer,  Seller shall,
            service the Mortgage Loans  consistent  with the degree of skill and
            care that  Seller  customarily  requires  with  respect  to  similar
            Mortgage  Loans  owned  or  managed  by it  and in  accordance  with
            Accepted Servicing  Practices.  The Seller shall cause each Servicer
            and the Master  Servicer to (i) comply with all applicable  Federal,
            State and local laws and  regulations,  (ii)  maintain all state and
            federal   licenses   necessary  for  it  to  perform  its  servicing
            responsibilities  hereunder and (iii) not impair the rights of Buyer
            in any Mortgage Loans or any payment thereunder. Buyer may terminate
            the  servicing  of any  Servicing  Released  Mortgage  Loan with the
            then-existing servicer in accordance with Section 12(e) hereof.

                                      -27-
<PAGE>

            b. Seller shall cause each Servicer and the Master  Servicer to hold
            or cause to be held all escrow funds  collected by such  Servicer or
            the Master Servicer with respect to any Purchased  Mortgage Loans in
            trust  accounts  and shall apply the same for the purposes for which
            such funds were collected.

            c. Upon the occurrence and  continuance of an Event of Default,  the
            Seller  shall and shall  cause the Master  Servicer  to deposit  all
            collections  received by Master  Servicer on the Purchased  Mortgage
            Loans in the Collection Account

            d. On the date hereof,  Seller shall provide promptly to Buyer (i) a
            Servicer Notice addressed to and agreed to by the Master Servicer of
            the related Purchased Mortgage Loans, advising such Servicer of such
            matters  as  Buyer  may  reasonably  request,   including,   without
            limitation,  recognition by the Master Servicer of Buyer's  interest
            in such Purchased Mortgage Loans and the Master Servicer's agreement
            that upon  receipt of notice of an Event of Default  from Buyer,  it
            will follow the  instructions of Buyer with respect to the Purchased
            Mortgage Loans and any related Income with respect thereto.

            e.  Upon  the  occurrence  of an  Event of  Default  hereunder  or a
            material default under the Servicing Agreement, Buyer shall have the
            right to immediately  terminate the Servicer's  right to service the
            Servicing  Released  Purchased  Mortgage  Loans under the  Servicing
            Agreement  without payment of any penalty or termination fee. Seller
            and  the  related  Servicer  shall  cooperate  in  transferring  the
            servicing of the Servicing  Released  Purchased  Mortgage Loans to a
            successor servicer appointed by Buyer in its sole discretion.

            f. If Seller should discover that, for any reason whatsoever, Seller
            or any entity  responsible  to Seller for managing or servicing  any
            such  Purchased  Mortgage Loan has failed to perform fully  Seller's
            obligations  under the Program  Agreements or any of the obligations
            of such  entities  with  respect to the  Purchased  Mortgage  Loans,
            Seller shall promptly notify Buyer.

13. Representations and Warranties

            a. Seller represents and warrants to Buyer as of the date hereof and
            as of each Purchase Date for any Transaction that:

                        (1) Seller Existence. Seller has been duly organized and
            is validly existing as a corporation in good standing under the laws
            of the State of Maryland.

                                      -28-
<PAGE>

                        (2)  Licenses.  Seller is duly  licensed or is otherwise
            qualified in each  jurisdiction  in which it transacts  business for
            the  business  which  it  conducts  and  is not  in  default  of any
            applicable  federal,  state or local  laws,  rules  and  regulations
            unless,  in either instance,  the failure to take such action is not
            reasonably likely (either individually or in the aggregate) to cause
            a Material  Adverse  Effect  and is not in  default of such  state's
            applicable  laws,  rules and  regulations.  Seller has the requisite
            power  and  authority  and legal  right to  originate  and  purchase
            Mortgage Loans (as  applicable) and to own, sell and grant a lien on
            all of its right,  title and interest in and to the Mortgage  Loans,
            and to execute and deliver, engage in the transactions  contemplated
            by, and  perform  and  observe  the terms and  conditions  of,  this
            Agreement, each Program Agreement and any Transaction Request or, if
            applicable, Purchase Confirmation.

                        (3) Power.  Seller has all requisite  corporate or other
            power, and has all governmental licenses,  authorizations,  consents
            and approvals  necessary to own its assets and carry on its business
            as now being or as proposed to be  conducted,  except where the lack
            of such licenses,  authorizations,  consents and approvals would not
            be reasonably likely to have a Material Adverse Effect.

                        (4)  Due   Authorization.   Seller  has  all   necessary
            corporate  or other  power,  authority  and legal  right to execute,
            deliver  and  perform  its  obligations  under  each of the  Program
            Agreements, as applicable.  This Agreement, any Transaction Request,
            Purchase  Confirmation and the Program  Agreements have been (or, in
            the case of Program Agreements and any Transaction Request, Purchase
            Confirmation not yet executed,  will be) duly  authorized,  executed
            and  delivered by Seller,  all requisite or other  corporate  action
            having  been  taken,  and each is  valid,  binding  and  enforceable
            against  Seller  in  accordance   with  its  terms  except  as  such
            enforcement may be affected by bankruptcy, by other insolvency laws,
            or by general principles of equity.

                        (5) Financial  Statements.  The financial  statements of
            Seller, copies of which have been furnished to Buyer, (i) are, as of
            the dates and for the  periods  referred to  therein,  complete  and
            correct in all material respects,  (ii) present fairly the financial
            condition  and results of  operations  of Seller as of the dates and
            for the periods indicated and (iii) have been prepared in accordance
            with GAAP consistently  applied (subject as to interim statements to
            normal  year end  adjustments).  Since  the date of the most  recent
            financial statements, there has been no Material Adverse Change with
            respect to Seller.  The Seller  has,  on the date of the  statements
            delivered  pursuant  to  this  Section  (the  "Statement  Date")  no
            liabilities,  direct or indirect,  fixed or  contingent,  matured or
            unmatured,  known or unknown,  or liabilities  for taxes,  long-term
            leases or unusual forward or long-term commitments not disclosed by,
            or reserved  against in, said balance sheet and related  statements,
            and  at  the  present  time  there  are no  material  unrealized  or
            anticipated losses from any loans,  advances or other commitments of
            Seller except as heretofore disclosed to Buyer in writing.

                                      -29-
<PAGE>

                        (6) Event of Default.  There  exists no Event of Default
            under Section  15(b) hereof,  which default gives rise to a right to
            accelerate indebtedness as referenced in Section 15(b) hereof, under
            any mortgage,  borrowing  agreement or other instrument or agreement
            pertaining to  indebtedness  for borrowed money or to the repurchase
            of mortgage loans or securities.

                        (7) Solvency. Seller is solvent and will not be rendered
            insolvent  by any  Transaction  and,  after  giving  effect  to such
            Transaction,  will not be left with an unreasonably  small amount of
            capital with which to engage in its business. Seller does not intend
            to incur, nor does it believe that it has incurred, debts beyond its
            ability  to pay such debts as they  mature and is not  contemplating
            the   commencement   of  insolvency,   bankruptcy,   liquidation  or
            consolidation   proceedings  or  the   appointment  of  a  receiver,
            liquidator,  conservator,  trustee or similar official in respect of
            such entity or any of its assets. The amount of consideration  being
            received by Seller upon the sale of the Purchased  Mortgage Loans to
            Buyer constitutes reasonably equivalent value and fair consideration
            for such Purchased  Mortgage Loans.  Seller is not  transferring any
            Purchased Mortgage Loans with any intent to hinder, delay or defraud
            any of its creditors.

                        (8)  No   Conflicts.   The   execution,   delivery   and
            performance by Seller of this Agreement,  any Transaction Request or
            Purchase  Confirmation  hereunder and the Program  Agreements do not
            conflict  with  any  term  or  provision  of  the   certificate   of
            incorporation  or  by-laws of Seller or any law,  rule,  regulation,
            order, judgment,  writ, injunction or decree applicable to Seller of
            any court,  regulatory body,  administrative  agency or governmental
            body having  jurisdiction  over Seller,  which conflict would have a
            Material  Adverse Effect and will not result in any violation of any
            such mortgage,  instrument,  agreement or obligation to which Seller
            is a party.

                        (9)  True  and  Complete  Disclosure.  All  information,
            reports, exhibits,  schedules,  financial statements or certificates
            of  Seller  or  any  Affiliate  thereof  or any  of  their  officers
            furnished or to be furnished to Buyer in connection with the initial
            or any ongoing due diligence of Seller,  or any Affiliate or officer
            thereof,  negotiation,  preparation,  or  delivery  of  the  Program
            Agreements  are true and  complete  and do not omit to disclose  any
            material facts  necessary to make the statements  herein or therein,
            in  light  of  the   circumstances  in  which  they  are  made,  not
            misleading.   All  financial   statements   have  been  prepared  in
            accordance with GAAP.

                        (10) Approvals. No consent,  approval,  authorization or
            order of, registration or filing with, or notice to any governmental
            authority or court is required  under  applicable  law in connection
            with the  execution,  delivery  and  performance  by  Seller of this
            Agreement,  any Transaction Request,  Purchase  Confirmation and the
            Program Agreements.

                        (11)  Litigation.  There  is no  action,  proceeding  or
            investigation  pending with respect to which the Seller has received
            service of process or, to the best of Seller's knowledge  threatened
            against it before any court, administrative agency or other tribunal
            (A) asserting the  invalidity of this  Agreement,  any  Transaction,
            Transaction Request, Purchase Confirmation or any Program Agreement,
            (B) seeking to prevent the  consummation of any of the  transactions
            contemplated by this Agreement,  any Transaction  Request,  Purchase
            Confirmation   or  any   Program   Agreement,   (C)  makes  a  claim
            individually in an amount greater than $2,000,000 or in an aggregate
            amount greater than  $5,000,000,  (D) which requires filing with the
            Securities and Exchange  Commission in accordance  with the 1934 Act
            or any rules  thereunder or (E) which might materially and adversely
            affect the validity of the Mortgage  Loans or the  performance by it
            of its obligations under, or the validity or enforceability of, this
            Agreement,  any Transaction  Request,  Purchase  Confirmation or any
            Program Agreement.

                                      -30-
<PAGE>

                        (12) Material Adverse Change. There has been no material
            adverse  change in the business,  operations,  financial  condition,
            properties  or  prospects  of Seller  Affiliates  since the date set
            forth in the most recent financial statements supplied to Buyer.

                        (13)  Ownership.  Upon payment of the Purchase Price and
            the filing of the  financing  statement and delivery of the Mortgage
            Files to the  Custodian and the  Custodian's  receipt of the related
            Request for Certification,  Buyer shall become the sole owner of the
            Purchased  Mortgage Loans and related  Repurchase  Assets,  free and
            clear of all liens and encumbrances.

                        (14) Acquisition Guidelines.  The Acquisition Guidelines
            provided to Buyer are the true and correct Acquisition Guidelines of
            the related originator.

                        (15) Taxes. Seller has timely filed all tax returns that
            are  required  to be filed by it and has paid all taxes,  except for
            any such taxes as are being appropriately contested in good faith by
            appropriate  proceedings  diligently  conducted  and with respect to
            which adequate  reserves have been provided.  The charges,  accruals
            and  reserves  on the books of Seller in  respect of taxes and other
            governmental charges are, in the opinion of Seller, adequate.

                        (16) Investment  Company.  Neither Seller nor any of its
            Subsidiaries   is  required  to  be  registered  as  an  "investment
            company",  or a company  "controlled"  by an entity  required  to be
            registered  as an  "investment  company,"  within the meaning of the
            Investment Company Act of 1940, as amended.

                        (17)   Chief   Executive    Office;    Jurisdiction   of
            Organization.  On  the  Effective  Date,  Seller's  chief  executive
            office,  is, and has been,  located at 1211 Avenue of the  Americas,
            Suite  2902,  NY,  NY  10036.  On  the  Effective   Date,   Seller's
            jurisdiction of organization is the State of Maryland.  Seller shall
            provide  Buyer  with  thirty  days  advance  notice of any change in
            Seller's  principal  office or place of  business  or  jurisdiction.
            Seller has no trade name.  During the preceding  five years,  Seller
            has not  been  known  by or done  business  under  any  other  name,
            corporate or  fictitious,  and has not filed or had filed against it
            any bankruptcy receivership or similar petitions nor has it made any
            assignments for the benefit of creditors.

                                      -31-
<PAGE>

                        (18) Location of Books and Records.  The location  where
            Seller keeps its books and records, including all computer tapes and
            records  relating to the  Purchased  Mortgage  Loans and the related
            Repurchase Assets is its chief executive office.

                        (19) Adjusted Tangible Net Worth. On the Effective Date,
            Seller's Adjusted Tangible Net Worth is not less than $200,000,000.

                        (20)   ERISA.   Each   Plan  to  which   Seller  or  its
            Subsidiaries  make direct  contributions,  and, to the  knowledge of
            Seller,   each  other  Plan  and  each  Multiemployer  Plan,  is  in
            compliance in all material  respects with, and has been administered
            in  all  material   respects  in  compliance  with,  the  applicable
            provisions of ERISA, the Code and any other Federal or State law.

                        (21)  Adverse  Selection.  Seller has not  selected  the
            Purchased  Mortgage  Loans in a  manner  so as to  adversely  affect
            Buyer's interests.

                        (22)  Agreements.  Neither  Seller nor any Subsidiary of
            Seller is a party to any  agreement,  instrument,  or  indenture  or
            subject to any  restriction  materially and adversely  affecting its
            business,  operations,  assets  or  financial  condition,  except as
            disclosed in the financial  statements described in Section 13(a)(5)
            hereof. Neither Seller nor any Subsidiary of Seller is in default in
            the   performance,   observance  or   fulfillment   of  any  of  the
            obligations,  covenants or  conditions  contained in any  agreement,
            instrument, or indenture which default could have a material adverse
            effect  on  the  business,  operations,   properties,  or  financial
            condition  of Seller as a whole.  No holder of any  indebtedness  of
            Seller  or of  any of  its  Subsidiaries  has  given  notice  of any
            asserted default thereunder.

                        (23) Other  Indebtedness.  All Indebtedness  (other than
            Indebtedness  evidenced by this Agreement) of Seller existing on the
            date   hereof  is  listed  on  Exhibit  J  hereto   (the   "Existing
            Indebtedness").

                        (24)  Servicing.  Seller has ensured that the applicable
            Servicer  and  Master  Servicer  has  adequate  financial  standing,
            servicing facilities, procedures and experienced personnel necessary
            for the sound  servicing of mortgage  loans of the same types as may
            from time to time  constitute  Mortgage Loans and in accordance with
            Accepted Servicing Practices.

                        (25) No  Reliance.  Seller has made its own  independent
            decisions to enter into the Program  Agreements and each Transaction
            and as to whether such  Transaction is appropriate and proper for it
            based  upon its own  judgment  and upon  advice  from such  advisors
            (including without limitation,  legal counsel and accountants) as it
            has deemed  necessary.  Seller is not  relying  upon any advice from
            Buyer  as to any  aspect  of  the  Transactions,  including  without
            limitation,   the  legal,   accounting  or  tax  treatment  of  such
            Transactions.

                                      -32-
<PAGE>

                        (26) Plan Assets. Seller is not an employee benefit plan
            as defined in Section 3 of Title I of ERISA,  or a plan described in
            Section 4975(e)(1) of the Code, and the Purchased Mortgage Loans are
            not "plan assets" within the meaning of 29 CFR  ss.2510.3-101 in the
            Seller's hands.

                        (27) No Prohibited  Persons.  Neither the Seller nor any
            of its Affiliates,  officers,  directors, partners or members, is an
            entity or person (or to the Seller's knowledge,  owned or controlled
            by an entity or  person):  (i) that is listed in the Annex to, or is
            otherwise  subject to the provisions of Executive Order 13224 issued
            on September  24, 2001  ("EO13224");  (ii) whose name appears on the
            United States Treasury Department's Office of Foreign Assets Control
            ("OFAC") most current list of "Specifically  Designated National and
            Blocked  Persons"  (which list may be published from time to time in
            various  mediums  including,  but not limited to, the OFAC  website,
            http:www.treas.gov/ofac/t11sdn.pdf); (iii) who commits, threatens to
            commit or supports "terrorism",  as that term is defined in EO13224;
            or (iv) who is otherwise affiliated with any entity or person listed
            above  (any and all  parties  or persons  described  in clauses  (i)
            through (iv) above are herein referred to as a "Prohibited Person").

            b. With respect to every Purchased  Mortgage Loan, Seller represents
            and  warrants to Buyer as of the  applicable  Purchase  Date for any
            Transaction and each date thereafter  that each  representation  and
            warranty set forth on Schedule 1 is true and correct.

            c. The  representations  and  warranties set forth in this Agreement
            shall survive transfer of the Purchased  Mortgage Loans to Buyer and
            shall  continue  for so long as the  Purchased  Mortgage  Loans  are
            subject to this Agreement.  Upon discovery by Seller or Buyer of any
            breach of any of the representations or warranties set forth in this
            Agreement,  the party  discovering  such breach shall  promptly give
            notice  of such  discovery  to the  others.  Buyer  has the right to
            require, in its unreviewable discretion, Seller to repurchase within
            1  Business  Day after  receipt of notice  from Buyer any  Purchased
            Mortgage  Loan  (i)  for  which  a  breach  of  one or  more  of the
            representations  and  warranties  referenced in Section 13(b) exists
            and which breach has a material  adverse effect on the value of such
            Mortgage  Loan or the interests of Buyer or (ii) which is determined
            by Buyer,  in its good  faith  discretion,  to be  unacceptable  for
            inclusion in a securitization.

14. Covenants

Seller covenants with Buyer that, during the term of this facility:

                                      -33-
<PAGE>

            a. Adjusted  Tangible Net Worth.  Seller shall  maintain an Adjusted
            Tangible

            Net Worth of at least  $200,000,000.  b.  Indebtedness  to  Adjusted
            Tangible Net Worth Ratio. Seller's ratio of Recourse Indebtedness to
            Adjusted Tangible Net Worth shall not exceed 12:1.

            c.  Litigation.  Seller will  promptly,  and in any event within ten
            (10) days after service of process on any of the following,  give to
            Buyer  notice  of  all  litigation,  actions,  suits,  arbitrations,
            investigations (including,  without limitation, any of the foregoing
            which  are  threatened  or  pending)  or other  legal or  arbitrable
            proceedings  affecting  Seller  or  any  of  their  Subsidiaries  or
            affecting any of the Property of any of them before any Governmental
            Authority   that  (i)  questions  or  challenges   the  validity  or
            enforceability of any of the Program  Agreements or any action to be
            taken in connection with the transactions  contemplated hereby, (ii)
            makes a claim  individually  in an amount greater than $2,000,000 or
            in an  aggregate  amount  greater than  $5,000,000,  or (iii) which,
            individually or in the aggregate, if adversely determined,  could be
            reasonably likely to have a Material Adverse Effect.

            d. Prohibition of Fundamental  Changes.  Seller shall not enter into
            any  transaction  of merger or  consolidation  or  amalgamation,  or
            liquidate,  wind up or dissolve  itself (or suffer any  liquidation,
            winding up or dissolution) or sell all or  substantially  all of its
            assets,  excluding any such action taken in connection  with (1) any
            securitization  transaction or (2) in connection with an asset based
            financing or other secondary market transaction  related to mortgage
            loans  and  the  ordinary  course  of  the  Seller's  business;  and
            provided,  that Seller may merge or consolidate  with (a) any wholly
            owned subsidiary of Seller, or (b) any other Person if Seller is the
            surviving  corporation;  and provided further,  that if after giving
            effect thereto, no Default would exist hereunder.

            e. Maintenance of  Profitability.  Seller shall not permit,  for any
            Test Period,  Net Income for such Test Period,  before  income taxes
            for such Test Period and distributions made during such Test Period,
            to be less than $1.00.

            f. Servicer; Asset Tape. Upon the occurrence of any of the following
            (a) the occurrence and continuation of an Event of Default, (b) upon
            any Purchased  Mortgage  Loan  becoming an Aged Loan,  (c) the fifth
            Business Day of each month, or (d) upon the request of Buyer, Seller
            shall cause the applicable Servicer or Master Servicer to provide to
            Buyer, electronically,  in a format mutually acceptable to Buyer and
            Seller,  an Asset Tape by no later than the Reporting  Date.  Seller
            shall not cause the  Mortgage  Loans to be serviced by any  servicer
            other than a servicer  expressly approved in writing by Buyer, which
            approval  shall be deemed  granted by Buyer  with  respect to Seller
            with the execution of this Agreement.

            g. Insurance.  The Seller shall continue to maintain, for Seller and
            its Subsidiaries, Fidelity Insurance in an aggregate amount at least
            equal to $1,000,000.  The Seller shall maintain,  for Seller and its
            Subsidiaries,   Fidelity  Insurance  in  respect  of  its  officers,
            employees and agents,  with respect to any claims made in connection
            with all or any portion of the Repurchase  Assets.  The Seller shall
            notify  the  Buyer of any  material  change in the terms of any such
            Fidelity Insurance.

                                      -34-
<PAGE>

            h. No Adverse  Claims.  Seller  warrants and will defend,  and shall
            cause any Servicer or Master  Servicer to defend,  the right,  title
            and interest of Buyer in and to all Purchased Mortgage Loans and the
            related Repurchase Assets against all adverse claims and demands.

            i. Assignment.  Except as permitted  herein,  neither Seller nor any
            Servicer shall sell,  assign,  transfer or otherwise  dispose of, or
            grant any option with respect to, or pledge,  hypothecate or grant a
            security  interest  in or  lien  on or  otherwise  encumber  (except
            pursuant to the Program  Agreements),  any of the Purchased Mortgage
            Loans or any interest therein,  provided that this Section shall not
            prevent any transfer of Purchased  Mortgage Loans in accordance with
            the Program Agreements.

            j.  Security  Interest.  Seller  shall do all  things  necessary  to
            preserve the  Purchased  Mortgage  Loans and the related  Repurchase
            Assets so that they  remain  subject to a first  priority  perfected
            security interest hereunder.  Without limiting the foregoing, Seller
            will  comply  with all  rules,  regulations  and  other  laws of any
            Governmental Authority and cause the Purchased Mortgage Loans or the
            related  Repurchase  Assets to  comply  with all  applicable  rules,
            regulations  and other  laws.  Seller will not allow any default for
            which Seller is  responsible  to occur under any Purchased  Mortgage
            Loans or the related  Repurchase Assets or any Program Agreement and
            Seller shall fully perform or cause to be performed  when due all of
            its  obligations  under any Purchased  Mortgage Loans or the related
            Repurchase Assets and any Program Agreement.

            k. Records.

                        (1) Seller  shall  collect  and  maintain or cause to be
            collected  and  maintained  all Records  relating  to the  Purchased
            Mortgage Loans in accordance  with industry  custom and practice for
            assets  similar to the Purchased  Mortgage  Loans,  including  those
            maintained  pursuant  to the  preceding  subparagraph,  and all such
            Records shall be in Custodian's  possession  unless Buyer  otherwise
            approves.  Seller will not allow any such  papers,  records or files
            that  are  an  original  or  an  only  copy  to  leave   Custodian's
            possession,  except for individual  items removed in connection with
            servicing  a specific  Mortgage  Loan,  in which  event  Seller will
            obtain  or  cause  to be  obtained  a  receipt  from  a  financially
            responsible person for any such paper, record or file. Seller or the
            Servicer of the  Purchased  Mortgage  Loans will  maintain  all such
            Records not in the  possession  of  Custodian  in good and  complete
            condition in accordance  with industry  practices for assets similar
            to the Purchased Mortgage Loans and preserve them against loss.

                                      -35-
<PAGE>

                        (2) For so long as Buyer has an  interest  in or lien on
            any Purchased  Mortgage  Loan,  Seller will hold or cause to be held
            all related  Records in trust for Buyer.  Seller  shall  notify,  or
            cause to be notified,  every other party holding any such Records of
            the interests and liens in favor of Buyer granted hereby.

                        (3) Upon  reasonable  advance  notice from  Custodian or
            Buyer,  Seller shall (x) make any and all such Records  available to
            Custodian  or Buyer to examine any such  Records,  either by its own
            officers or employees,  or by agents or  contractors,  or both,  and
            make copies of all or any portion  thereof,  and (y) permit Buyer or
            its authorized agents to discuss the affairs,  finances and accounts
            of  Seller  with its chief  operating  officer  and chief  financial
            officer and to discuss the affairs,  finances and accounts of Seller
            with its independent certified public accountants.

            l. Books. Seller shall keep or cause to be kept in reasonable detail
            books and  records of account of its assets and  business  and shall
            clearly reflect therein the transfer of Purchased  Mortgage Loans to
            Buyer.

            m. Approvals.  Seller shall maintain all licenses,  permits or other
            approvals  necessary  for  Seller to  conduct  its  business  and to
            perform its  obligations  under the Program  Agreements,  and Seller
            shall conduct its business  strictly in accordance  with  applicable
            law.

            n. Material  Change in Business.  Seller shall not make any material
            change  in the  nature of its  business  as  carried  on at the date
            hereof.

            o. Reserved.

            p.  Distributions.  Seller shall not pay any dividends  greater than
            Net Income in any given  calendar  year.  If an Event of Default has
            occurred and is continuing,  Seller shall not pay any dividends with
            respect  to any  capital  stock or other  equity  interests  in such
            entity,  whether  now or  hereafter  outstanding,  or make any other
            distribution  in respect  thereof,  either  directly or  indirectly,
            whether in cash or property or in obligations of Seller.

            q. Applicable Law. Seller shall comply with the  requirements of all
            applicable laws,  rules,  regulations and orders of any Governmental
            Authority.

            r. Existence. Seller shall preserve and maintain its legal existence
            and all of its material rights, privileges, licenses and franchises.

            s. Chief  Executive  Office;  Jurisdiction of  Organization.  Seller
            shall not move its chief executive  office from the address referred
            to in Section  13(a)(17) or change its  jurisdiction of organization
            from the  jurisdiction  referred to in Section  13(a)(17)  unless it
            shall have  provided  Buyer 30 days'  prior  written  notice of such
            change.

                                      -36-
<PAGE>

            t. Taxes. Seller shall timely file all tax returns that are required
            to be filed by it and shall  timely  pay and  discharge  all  taxes,
            assessments and  governmental  charges or levies imposed on it or on
            its income or profits or on any of its property prior to the date on
            which penalties attach thereto, except for any such tax, assessment,
            charge or levy the payment of which is being contested in good faith
            and by proper  proceedings  and against which adequate  reserves are
            being maintained.

            u.  Transactions  with  Affiliates.  Seller  will not enter into any
            transaction,  including,  without  limitation,  any purchase,  sale,
            lease or exchange of property or the rendering of any service,  with
            any Affiliate  unless such  transaction  is (a) otherwise  permitted
            under the Program Agreements, (b) in the ordinary course of Seller's
            business and (c) upon fair and reasonable terms no less favorable to
            Seller than it would obtain in a comparable arm's length transaction
            with a Person which is not an  Affiliate,  or make a payment that is
            not otherwise permitted by this Section to any Affiliate.

            v. Guarantees.  Seller shall not create,  incur, assume or suffer to
            exist any Guarantees, except (i) to the extent reflected in Seller's
            financial  statements  or notes  thereto  and (ii) to the extent the
            aggregate Guarantees of Seller do not exceed $5,000,000.

            w.  Indebtedness.  Seller  shall not incur any  additional  material
            Indebtedness that has not been approved by Buyer, other than:

                        (1) Indebtedness to the Buyer under this Agreement;

                        (2) Obligations to pay taxes;

                        (3)  Liabilities for accounts  payable,  non capitalized
            equipment or operating  leases and similar  liabilities  incurred in
            the ordinary course of business;

                        (4)  Accrued   expenses,   deferred   credits  and  loss
            contingencies  that are properly  classified  as  liabilities  under
            GAAP;

                        (5)  Indebtedness  incurred  in the  ordinary  course of
            business to hedge the risk of interest rate  fluctuations  or any of
            the Seller's  portfolios  or pipelines of Mortgage  Loans under this
            Repurchase  Agreement or in respect of other Indebtedness  permitted
            hereunder;

                        (6)   Liabilities   for   capital   leases  and  similar
            liabilities  incurred in the ordinary  course of business,  up to an
            aggregate maximum amount of $5,000,000;

                        (7)   Indebtedness   under  other   committed   mortgage
            warehouse  lines  of  credit  (including   committed  mortgage  loan
            repurchase   agreements)  now  or  hereafter  existing,  the  papers
            evidencing,  securing,  governing  or  otherwise  related  to  which
            Indebtedness  impose covenants and conditions on the Seller that are
            no more  restrictive  or onerous than the covenants  and  conditions
            imposed on the Seller by this Agreement and notice of which has been
            delivered to the Buyer;

                                      -37-
<PAGE>

                        (8) The specific Indebtedness described on Exhibit J;

                        (9) Other Indebtedness of the Seller approved in writing
            by the Buyer  (provided  that  Buyer  shall have no  obligations  to
            approve any such  Indebtedness,  and may approve or disapprove it in
            the Buyer's sole and absolute discretion).

            x.  Hedging.  Seller  has  entered  into  Interest  Rate  Protection
            Agreements with respect to the Alt-A Mortgage Loans,  Jumbo Mortgage
            Loans and Conforming  Mortgage  Loans,  having terms with respect to
            protection  against  fluctuations  in interest  rates  acceptable to
            Buyer in its sole discretion.

            y. True and Correct Information. All information, reports, exhibits,
            schedules,  financial  statements  or  certificates  of Seller,  any
            Affiliate  thereof  or any of  their  officers  furnished  to  Buyer
            hereunder  and during  Buyer's  diligence  of Seller are and will be
            true and complete  and do not omit to disclose  any  material  facts
            necessary to make the statements herein or therein,  in light of the
            circumstances  in which they are made, not misleading.  All required
            financial statements, information and reports delivered by Seller to
            Buyer  pursuant to this  Agreement  shall be prepared in  accordance
            with U.S. GAAP, or, if applicable,  to SEC filings,  the appropriate
            SEC accounting regulations.

            z.  Servicing.  Seller has ensured that the applicable  Servicer and
            Master   Servicer  has  adequate   financial   standing,   servicing
            facilities,  procedures and experienced  personnel necessary for the
            sound servicing of mortgage loans of the same types as may from time
            to time  constitute  Mortgage Loans and in accordance  with Accepted
            Servicing Practices.

            aa. Take-out Payments. With respect to each Committed Mortgage Loan,
            Seller shall  arrange that all payments  under the related  Take-out
            Commitment  shall be paid directly to Buyer at the account set forth
            in Section 9 hereof,  or to an account  approved by Buyer in writing
            prior  to  such  payment.   With  respect  to  any  Agency  Take-out
            Commitment,  if  applicable,  (1) with respect to the wire  transfer
            instructions  as set forth in  Freddie  Mac Form 987 (Wire  Transfer
            Authorization  for a Cash  Warehouse  Delivery)  such wire  transfer
            instructions are identical to Buyer's wire instructions or Buyer has
            approved  such wire  transfer  instructions  in  writing in its sole
            discretion,  or (2) the Payee  Number  set forth on Fannie  Mae Form
            1068 (Fixed-Rate, Graduated-Payment, or Growing-Equity Mortgage Loan
            Schedule)  or Fannie Mae Form 1069  (Adjustable-Rate  Mortgage  Loan
            Schedule), as applicable,  is identical to the Payee Number that has
            been identified by Buyer in writing as Buyer's Payee Number or Buyer
            has  previously  approved the related Payee Number in writing in its
            sole  discretion;  with respect to any Take-out  Commitment  with an
            Agency,   the  applicable   agency  documents  list  Buyer  as  sole
            subscriber,  unless  otherwise  agreed to in  writing  by Buyer,  in
            Buyer's sole discretion.

                                      -38-
<PAGE>

            bb. No  Pledge.  Seller  shall not  pledge,  transfer  or convey any
            security  interest in the  Collection  Account to any Person without
            the express written consent of Buyer.

            cc. Plan  Assets.  Seller  shall not be an employee  benefit plan as
            defined in  Section 3 of Title I of ERISA,  or a plan  described  in
            Section  4975(e)(1)  of the Code and the Seller  shall not use "plan
            assets" within the meaning of 29 CFR ss.2510.3-101 to engage in this
            Repurchase Agreement or any Transaction hereunder.

            dd. Maintenance of Liquidity.  The Seller shall maintain,  as of the
            end of each calendar month,  unrestricted  cash and Cash Equivalents
            in an amount at least  equal to the  greater of (i)  $25,000,000  or
            (ii) 3% of all mortgage  loans not sold or  securitized  and held by
            the Seller for sale in accordance with GAAP.

            ee.  Additional  Warehouse Lines. The Seller shall maintain at least
            one  additional  warehouse,  repurchase  or similar  facility  in an
            amount at least equal to the Maximum Aggregate Purchase Price.

            ff.  Sharing of  Information.  The Seller  shall  allow the Buyer to
            exchange  information  related  to the  Seller  and the  Transaction
            hereunder  with third party lenders and the Seller shall permit each
            third party lender to share such information with the Buyer.

15. Events of Default

            Each of the  following  shall  constitute  an "Event  of  Default"
hereunder:

            a.  Payment  Failure.  Failure of Seller to (i) make any  payment of
            Price  Differential  or Repurchase  Price or any other sum which has
            become due, on a Price  Differential  Payment  Date or a  Repurchase
            Date or otherwise,  whether by acceleration or otherwise,  under the
            terms of this Agreement,  any other warehouse and security agreement
            or any other document evidencing or securing  Indebtedness of Seller
            to Buyer or to any  Affiliate  of  Buyer,  or (ii)  cure any  Margin
            Deficit when due pursuant to Section 6 hereof.

            b. Cross Default.  (i) Seller or any of Seller's Affiliates shall be
            in default after the  application  of any  applicable  grace periods
            under  (i)  any  Indebtedness,   in  the  aggregate,  in  excess  of
            $5,000,000 of Seller or of such Affiliate which default (1) involves
            the  failure  to  pay a  matured  obligation,  or  (2)  permits  the
            acceleration of the maturity of obligations by any other party to or
            beneficiary  with  respect to such  Indebtedness,  or (ii) any other
            contract or  contracts,  in the aggregate in excess of $5,000,000 to
            which Seller or such Affiliate is a party which default (1) involves
            the  failure  to  pay a  matured  obligation,  or  (2)  permits  the
            acceleration of the maturity of obligations by any other party to or
            beneficiary of such contract.

                                      -39-
<PAGE>

            c. Assignment.  Assignment or attempted assignment by Seller of this
            Agreement  or any  rights  hereunder  without  first  obtaining  the
            specific  written consent of Buyer, or the granting by Seller of any
            security  interest,  lien or  other  encumbrances  on any  Purchased
            Mortgage Loans to any person other than Buyer.

            d. Insolvency. An Act of Insolvency shall have occurred with respect
            to Seller, or any Affiliate.

            e.  Material  Adverse  Change.  Any material  adverse  change in the
            Property,  business,  financial condition or operations of Seller or
            any of its  Affiliates  shall occur,  in each case as  determined by
            Buyer in its sole good  faith  discretion,  or any  other  condition
            shall  exist  which,   in  Buyer's   sole  good  faith   discretion,
            constitutes a material impairment of Seller's ability to perform its
            obligations under this Agreement or any other Program Agreement.

            f. Breach of Financial  Representation or Covenant or Obligation.  A
            breach  by  Seller  of  any of the  representations,  warranties  or
            covenants or obligations set forth in Sections  13(a)(1),  13(a)(7),
            13(a)(12),  13(a)(19), 13(a)(23), 14a, 14b, 14d, 14e, 14r, 14v, 14w,
            14aa, 14bb, 14dd or 14ee of this Agreement.

            g. Breach of Non-Financial  Representation or Covenant.  A breach by
            Seller of any other  material  representation,  warranty or covenant
            set forth in this Agreement (and not otherwise  specified in Section
            15(f)  above),  if such breach is not cured within five (5) Business
            Days (other than the  representations  and  warranties  set forth in
            Schedule  1, which  shall be  considered  solely for the  purpose of
            determining the Market Value,  the existence of a Margin Deficit and
            the  obligation  to repurchase  such Mortgage  Loan) unless (i) such
            party shall have made any such  representations  and warranties with
            knowledge that they were materially  false or misleading at the time
            made,  (ii)  any  such  representations  and  warranties  have  been
            determined by Buyer in its sole discretion to be materially false or
            misleading  on  a  regular  basis,  or  (iii)  Buyer,  in  its  sole
            discretion,    determines   that   such   breach   of   a   material
            representation,   warranty  or  covenant  materially  and  adversely
            affects (A) the  condition  (financial  or otherwise) of such party,
            its  Subsidiaries  or Affiliates;  or (B) Buyer's  determination  to
            enter into this Agreement or Transactions with such party, then such
            breach shall  constitute  an  immediate  Event of Default and Seller
            shall have no cure right hereunder).

            h.  Change of Control.  The  occurrence  of a Change in Control.  i.
            Failure to Transfer. Seller fails to transfer the Purchased Mortgage
            Loans to Buyer on the applicable  Purchase Date (provided  Buyer has
            tendered the related Purchase Price).

            j. Judgment.  A final judgment or judgments for the payment of money
            in excess of $5,000,000 in the aggregate  shall be rendered  against
            the  Seller  or any  of  its  Affiliates  by  one  or  more  courts,
            administrative tribunals or other bodies having jurisdiction and the
            same shall not be satisfied,  discharged (or provision  shall not be
            made for such discharge) or bonded,  or a stay of execution  thereof
            shall  not be  procured,  within  30 days  from  the  date of  entry
            thereof.

                                      -40-
<PAGE>

            k.  Government  Action.  Any  Governmental  Authority or any person,
            agency or  entity  acting or  purporting  to act under  governmental
            authority  shall  have  taken  any  action  to  condemn,   seize  or
            appropriate,  or to  assume  custody  or  control  of,  all  or  any
            substantial part of the Property of Seller or any Affiliate thereof,
            or shall have taken any action to displace the  management of Seller
            or any Affiliate  thereof or to curtail its authority in the conduct
            of the  business of Seller or any  Affiliate  thereof,  or takes any
            action in the nature of enforcement to remove, limit or restrict the
            approval  of  Seller  or  Affiliate   as  an  issuer,   buyer  or  a
            seller/servicer of Mortgage Loans or securities backed thereby,  and
            such action provided for in this  subparagraph k shall not have been
            discontinued or stayed within 30 days.

            l.  Inability  to  Perform.  An  officer of Seller  shall  admit its
            inability  to, or its  intention  not to,  perform  any of  Seller's
            Obligations.

            m. Security  Interest.  This Agreement shall for any reason cease to
            create a valid,  first  priority  security  interest in any material
            portion of the Purchased  Mortgage Loans or other Repurchase  Assets
            purported to be covered hereby.

            n.  Financial   Statements.   Seller's   audited  annual   financial
            statements  or the notes  thereto or other  opinions or  conclusions
            stated  therein  shall be  qualified  or limited by reference to the
            status of Seller as a "going  concern"  or a  reference  of  similar
            import.

            An  Event  of  Default  shall  be  deemed  to be  continuing  unless
expressly waived by Buyer in writing. 16. Remedies Upon Default

            In the event that an Event of Default shall have occurred:

            a. Buyer may, at its option  (which  option  shall be deemed to have
            been  exercised  immediately  upon  the  occurrence  of  an  Act  of
            Insolvency of Seller or any Affiliate),  declare an Event of Default
            to have occurred hereunder and, upon the exercise or deemed exercise
            of such option,  the Repurchase Date for each Transaction  hereunder
            shall,  if it has not already  occurred,  be deemed  immediately  to
            occur  (except  that,  in the event that the  Purchase  Date for any
            Transaction  has not yet occurred as of the date of such exercise or
            deemed  exercise,  such  Transaction  shall  be  deemed  immediately
            canceled).  Buyer shall  (except  upon the  occurrence  of an Act of
            Insolvency)  give notice to Seller of the exercise of such option as
            promptly as practicable.

            b. If Buyer  exercises  or is deemed to have  exercised  the  option
            referred  to in  subparagraph  (a) of  this  Section,  (i)  Seller's
            obligations  in  such   Transactions  to  repurchase  all  Purchased
            Mortgage Loans,  at the Repurchase  Price therefor on the Repurchase
            Date determined in accordance with subparagraph (a) of this Section,
            shall thereupon become immediately due and payable,  (ii) all Income
            paid after such  exercise  or deemed  exercise  shall be retained by
            Buyer and applied,  in Buyer's  sole  discretion,  to the  aggregate
            unpaid  Repurchase  Prices for all outstanding  Transactions and any
            other  amounts  owing by Seller  hereunder,  and (iii)  Seller shall
            immediately  deliver to Buyer the  Mortgage  Files  relating  to any
            Purchased  Mortgage  Loans  subject  to  such  Transactions  then in
            Seller's possession or control.

                                      -41-
<PAGE>

            c. Buyer also  shall have the right to obtain  physical  possession,
            and to  commence  an action to obtain  physical  possession,  of all
            Records and files of Seller relating to the Purchased Mortgage Loans
            and  all  documents   relating  to  the  Purchased   Mortgage  Loans
            (including, without limitation, any legal, credit or servicing files
            with respect to the Purchased  Mortgage Loans) which are then or may
            thereafter  come in to the  possession  of Seller or any third party
            acting for Seller.  To obtain  physical  possession of any Purchased
            Mortgage Loans held by Custodian, Buyer shall present to Custodian a
            Trust Receipt and Certification. Buyer shall be entitled to specific
            performance of all agreements of Seller contained in this Agreement.

            d. Buyer shall have the right to direct all servicers then servicing
            any Purchased  Mortgage  Loans to remit all  collections  thereon to
            Buyer, and if any such payments are received by Seller, Seller shall
            not  commingle  the amounts  received with other funds of Seller and
            shall  promptly  pay them over to Buyer.  Buyer  shall also have the
            right to terminate  any one or all of the servicers  then  servicing
            any Purchased  Mortgage  Loans with or without  cause.  In addition,
            Buyer  shall  have the  right  to  immediately  sell  the  Purchased
            Mortgage Loans and liquidate all Repurchase Assets. Such disposition
            of Purchased  Mortgage Loans may be, at Buyer's option,  on either a
            servicing-released or a servicing-retained basis. Buyer shall not be
            required to give any  warranties as to the Purchased  Mortgage Loans
            with respect to any such disposition thereof. Buyer may specifically
            disclaim or modify any  warranties  of title or the like relating to
            the  Purchased   Mortgage   Loans.   The  foregoing   procedure  for
            disposition of the Purchased  Mortgage Loans and  liquidation of the
            Repurchase  Assets shall not be considered  to adversely  affect the
            commercial reasonableness of any sale thereof. Seller agrees that it
            would not be commercially  unreasonable  for Buyer to dispose of the
            Purchased  Mortgage  Loans or the  Repurchase  Assets or any portion
            thereof by using  Internet  sites that  provide  for the  auction of
            assets  similar to the Purchased  Mortgage  Loans or the  Repurchase
            Assets, or that have the reasonable  capability of doing so, or that
            match buyers and sellers of assets. Buyer shall be entitled to place
            the   Purchased   Mortgage   Loans  in  a  pool  for   issuance   of
            mortgage-backed  securities  at the  then-prevailing  price for such
            securities and to sell such securities for such prevailing  price in
            the open market.  Buyer shall also be entitled to sell any or all of
            such Mortgage Loans  individually  for the prevailing  price.  Buyer
            shall also be entitled,  in its sole discretion to elect, in lieu of
            selling all or a portion of such Purchased  Mortgage  Loans, to give
            the  Seller  credit  for  such  Purchased  Mortgage  Loans  and  the
            Repurchase  Assets in an  amount  equal to the  Market  Value of the
            Purchased  Mortgage  Loans against the aggregate  unpaid  Repurchase
            Price and any other amounts owing by the Seller hereunder.

                                      -42-
<PAGE>

            e. Upon the  happening  of one or more Events of Default,  Buyer may
            apply any proceeds from the  liquidation  of the Purchased  Mortgage
            Loans and Repurchase  Assets to the Repurchase  Prices hereunder and
            all other  Obligations in the manner Buyer deems  appropriate in its
            sole discretion.

            f.  Seller  shall be  liable  to  Buyer  for (i) the  amount  of all
            reasonable legal or other expenses  (including,  without limitation,
            all costs and expenses of Buyer in connection  with the  enforcement
            of this Agreement or any other  agreement  evidencing a Transaction,
            whether in action,  suit or litigation or bankruptcy,  insolvency or
            other similar  proceeding  affecting  creditors'  rights  generally,
            further  including,  without  limitation,  the  reasonable  fees and
            expenses  of counsel  (including  the costs of  internal  counsel of
            Buyer)  incurred  in  connection  with or as a result of an Event of
            Default,  (ii) damages in an amount equal to the cost (including all
            fees,   expenses  and  commissions)  of  entering  into  replacement
            transactions and entering into or terminating hedge  transactions in
            connection with or as a result of an Event of Default, and (iii) any
            other loss,  damage,  cost or expense  directly arising or resulting
            from  the  occurrence  of  an  Event  of  Default  in  respect  of a
            Transaction.

            g. To the extent permitted by applicable law, Seller shall be liable
            to Buyer for interest on any amounts owing by Seller hereunder, from
            the date Seller becomes liable for such amounts hereunder until such
            amounts are (i) paid in full by Seller or (ii)  satisfied in full by
            the  exercise  of  Buyer's  rights  hereunder.  Interest  on any sum
            payable by Seller under this Section  16(g) shall be at a rate equal
            to the Post-Default Rate.

h.          Buyer shall have, in addition to its rights hereunder, any rights
            otherwise available to it under any other agreement or applicable
            law.

            i. Buyer may exercise one or more of the remedies available to Buyer
            immediately  upon the occurrence of an Event of Default and,  except
            to the extent  provided in subsections  (a) and (d) of this Section,
            at any time  thereafter  without  notice to  Seller.  All rights and
            remedies  arising under this  Agreement as amended from time to time
            hereunder  are  cumulative  and not exclusive of any other rights or
            remedies which Buyer may have.

            j. Buyer may enforce its rights and remedies hereunder without prior
            judicial process or hearing,  and Seller hereby expressly waives any
            defenses Seller might otherwise have to require Buyer to enforce its
            rights by judicial  process.  To the extent permitted by law, Seller
            also  waives  any  defense  (other  than a  defense  of  payment  or
            performance)  Seller  might  otherwise  have arising from the use of
            nonjudicial  process,  enforcement and sale of all or any portion of
            the  Repurchase  Assets,  or from any other  election  of  remedies.
            Seller recognizes that nonjudicial  remedies are consistent with the
            usages of the trade, are responsive to commercial  necessity and are
            the result of a bargain at arm's length.

                                      -43-
<PAGE>

            k. Buyer shall have the right to perform  reasonable  due  diligence
            with respect to Seller and the Mortgage Loans, which review shall be
            at the expense of Seller.

17. Reports

            a. Notices.  Seller shall  furnish to Buyer (x) promptly,  copies of
            any material and adverse  notices  (including,  without  limitation,
            notices of  defaults,  breaches,  potential  defaults  or  potential
            breaches)  and  any  material  financial  information  that  is  not
            otherwise required to be provided by Seller hereunder which is given
            to Seller's  lenders,  (y) immediately,  notice of the occurrence of
            any Event of Default  hereunder  or  default or breach by Seller,  a
            Servicer  or Master  Servicer  of any  obligation  under any Program
            Agreement  or any  material  contract  or  agreement  of  Seller.  a
            Servicer  or  Master  Servicer  or the  occurrence  of any  event or
            circumstance that such party reasonably  expects has resulted in, or
            will, with the passage of time, result in, a Material Adverse Effect
            or an Event of Default or such a default or breach by such party and
            (z) the following:

                        (1)  as  soon  as  available  and in  any  event  within
            forty-five  (45) calendar days after the end of each calendar month,
            the unaudited consolidated balance sheets of Seller as at the end of
            such period and the related  unaudited  consolidated  statements  of
            income and  retained  earnings  and of cash flows for the Seller and
            its consolidated Subsidiaries for such period and the portion of the
            fiscal  year  through  the  end of  such  period,  accompanied  by a
            certificate of a Responsible  Officer of Seller,  which  certificate
            shall  state  that said  consolidated  financial  statements  fairly
            present  in  all  material   respects  the  consolidated   financial
            condition and results of  operations  of Seller in  accordance  with
            GAAP,  consistently  applied, as at the end of, and for, such period
            (subject to normal year-end adjustments);

                        (2) as soon as available  and in any event within ninety
            (90)  days  after  the  end of  each  fiscal  year  of  Seller,  the
            consolidated  balance  sheets of Seller as at the end of such fiscal
            year and the related consolidated  statements of income and retained
            earnings  and of cash flows for the  Seller  for such year,  setting
            forth in each case in comparative  form the figures for the previous
            year,  accompanied by an opinion  thereon of  independent  certified
            public accountants of recognized  national  standing,  which opinion
            and the  scope of audit  shall  be  acceptable  to Buyer in its sole
            discretion,  shall have no "going concern"  qualification  and shall
            state that said consolidated financial statements fairly present the
            consolidated financial condition and results of operations of Seller
            as at the end of, and for, such fiscal year in accordance with GAAP;

                        (3)  such  other  prepared  statements  that  Buyer  may
            reasonably request;

                                      -44-
<PAGE>

                        (4)  if   applicable,   copies  of  any  10-Ks,   10-Qs,
            registration  statements and other  "corporate  finance" SEC filings
            (other than 8-Ks) by Seller,  within 5 Business Days of their filing
            with the SEC;  provided,  that, Seller or any Affiliate will provide
            Buyer and Credit Suisse First Boston  Corporation with a copy of the
            annual 10-K filed with the SEC by Seller or its Affiliates, no later
            than 90 days after the end of the year;

                        (5) as soon as available, and in any event within thirty
            (30) days of  receipt,  copies  of  relevant  portions  of all final
            written  Agency,   Governmental   Authority  and  investor   audits,
            examinations,  evaluations,  monitoring  reviews  and reports of its
            operations  (including  those  prepared on a contract  basis)  which
            provide for or relate to (i) material  corrective  action  required,
            (ii) material  sanctions  proposed,  imposed or required,  including
            without  limitation  notices of defaults,  notices of termination of
            approved status,  notices of imposition of supervisory agreements or
            interim servicing agreements, and notices of probation,  suspension,
            or  non-renewal,   or  (iii)  "report  cards,"   "grades"  or  other
            classifications of the quality of Seller's operations;

                        (6) from time to time such other  information  regarding
            the financial  condition,  operations,  or business of the Seller as
            Buyer may reasonably request;

                        (7) as soon as  reasonably  possible,  and in any  event
            within  thirty (30) days after a  Responsible  Officer of the Seller
            has knowledge of the occurrence of any Event of Termination, stating
            the particulars of such Event of Termination in reasonable detail;

                        (8) As soon as reasonably possible, notice of any of the
            following events:  (a) change in the insurance  coverage required of
            Seller,  Master Servicer or any other Person pursuant to any Program
            Agreement, with a copy of evidence of same attached;

            (b) any material dispute, litigation,  investigation,  proceeding or
suspension between Seller,  Master Servicer or a Servicer,  on the one hand, and
any Governmental Authority or any Person;

            (c)  any  material  change  in  accounting   policies  or  financial
reporting practices of Seller, a Servicer or Master Servicer;

            (d) with respect to any Purchased  Mortgage Loan,  immediately  upon
receipt of notice or knowledge thereof,  that the underlying  Mortgaged Property
has been damaged by waste, fire, earthquake or earth movement, windstorm, flood,
tornado or other casualty,  or otherwise  damaged so as to affect  adversely the
value of such Mortgaged Loan;

                                      -45-
<PAGE>

            (e) any  material  issues  raised  upon  examination  of  Seller  or
Seller's facilities by any Governmental Authority;

            (f)  any  material  change  in  the   Indebtedness  of  the  Seller,
including, without limitation, any default, renewal,  non-renewal,  termination,
increase in available amount or decrease in available amount related thereto;

            (g) promptly  upon receipt of notice or knowledge of (i) any default
related to any Repurchase  Asset, (ii) any lien or security interest (other than
security  interests  created hereby or by the other Program  Agreements)  on, or
claim asserted against, any of the Purchased Mortgage Loans;

            (h) a summary of the portfolio  performance  on a rolling  quarterly
period, commencing on the calendar quarter following the date hereof, stratified
by percentage repurchase demands for: representation breaches,  missing document
breaches,  repurchases due to fraud, early payment default requests,  summarized
on the basis of (a)  pending  repurchase  demands  (including  weighted  average
duration of outstanding  request),  (b) satisfied  repurchase demands, (c) total
repurchase demands;

            (i) any other event, circumstance or condition that has resulted, or
has a possibility  of resulting,  in a Material  Adverse  Effect with respect to
Seller, a Servicer or Master Servicer; and

            (j)  the  occurrence  of  any  material  employment  dispute  and  a
description  of the  strategy  for  resolving  it that  has the  possibility  of
resulting in a Material Adverse Effect.

            b. Officer's Certificates. Seller will furnish to Buyer, at the time
            the Seller  furnishes each set of financial  statements  pursuant to
            Section  17(a)(1)  or (2)  above,  a  certificate  of a  Responsible
            Officer of Seller in the form of Exhibit D hereto.

            c.  Mortgage  Loan  Reports.  Seller will  furnish to Buyer  monthly
            electronic  Mortgage  Loan  performance  data,  including,   without
            limitation,  delinquency reports and volume information, broken down
            by  product  (i.e.,  delinquency,  foreclosure  and  net  charge-off
            reports).

            d. Asset Tape. Seller shall provide to Buyer,  electronically,  in a
            format mutually  acceptable to Buyer and Seller, an Asset Tape by no
            later than the Reporting Date.

            e.  Other.  Seller  shall  deliver  to Buyer  any other  reports  or
            information  reasonably  requested by Buyer or as otherwise required
            pursuant to this Agreement.

                                      -46-
<PAGE>

18. Repurchase Transactions

            Buyer may, in its sole election,  engage in repurchase  transactions
with the Purchased  Mortgage  Loans or otherwise  pledge,  hypothecate,  assign,
transfer or otherwise convey the Purchased Mortgage Loans with a counterparty of
Buyer's  choice all at no cost to the Seller.  Unless an Event of Default  shall
have occurred,  no such  transaction  shall relieve Buyer of its  obligations to
transfer and not substitute therefor Purchased Mortgage Loans to Seller pursuant
to  Section 4 hereof,  or of Buyer's  obligation  to credit or pay Income to, or
apply Income to the obligations of, Seller pursuant to Section 7 hereof.  In the
event  Buyer  engages  in a  repurchase  transaction  with any of the  Purchased
Mortgage  Loans  or  otherwise  pledges  or  hypothecates  any of the  Purchased
Mortgage Loans, Buyer shall have the right to assign to Buyer's counterparty any
of the  applicable  representations  or  warranties  herein and the remedies for
breach thereof,  as they relate to the Purchased Mortgage Loans that are subject
to such repurchase transaction.

19. Single Agreement

            Buyer and Seller  acknowledge that, and have entered  hereunto,  and
will enter into each Transaction hereunder,  in consideration of and in reliance
upon the fact that, all Transactions  hereunder constitute a single business and
contractual  relationship  and have been made in  consideration  of each  other.
Accordingly,  each  of  Buyer  and  Seller  agrees  (i)  to  perform  all of its
obligations in respect of each Transaction hereunder,  and that a default in the
performance of any such obligations  shall constitute a default by it in respect
of all  Transactions  hereunder,  (ii) that each of them  shall be  entitled  to
set-off  claims and apply  property  held by them in respect of any  Transaction
against obligations owing to them in respect of any other Transactions hereunder
and (iii) that payments,  deliveries and other  transfers made by either of them
in respect of any Transaction shall be deemed to have been made in consideration
of payments, deliveries and other transfers in respect of any other Transactions
hereunder,  and the obligations to make any such payments,  deliveries and other
transfers may be applied against each other and netted.

20. Notices and Other Communications

            Any and all notices (with the exception of  Transaction  Requests or
Purchase   Confirmations,   which  shall  be  delivered  via  facsimile   only),
statements, demands or other communications hereunder may be given by a party to
the other by mail,  email,  facsimile,  messenger  or  otherwise  to the address
specified  below,  or so sent to such party at any other  place  specified  in a
notice of change of  address  hereafter  received  by the  other.  All  notices,
demands and requests  hereunder may be made orally, to be confirmed  promptly in
writing, or by other communication as specified in the preceding sentence.

                                      -47-
<PAGE>

            If to Seller:

                  Chimera Investment Corporation
                  1211 Avenue of the Americas Suite 2902
                  New York, NY 10036
                  Attention: Chief Financial Officer
                  Phone Number: 212.696.0100
                  Fax Number: 212.696.9809

            If to Buyer:

            For Transaction Requests and Purchase Confirmations:
            ---------------------------------------------------

                  Credit Suisse First Boston Mortgage Capital LLC
                  302 Carnegie Center, 2nd Floor
                  Princeton, NJ  08540
                  Attention:  Warehouse Lending
                  Phone Number:  (609) 627-5004

            For all other Notices:
            ----------------------

                  Credit Suisse First Boston Mortgage Capital LLC
                  302 Carnegie Center, 2nd Floor
                  Princeton, NJ  08540
                  Attention:        Gary Timmerman
                  Phone Number: 609-627-5026
                  Fax Number:   609-627-5080

            with a copy to:

                  Credit Suisse First Boston Mortgage Capital LLC
                     c/o Credit Suisse Securities (USA) LLC
                  One Madison Avenue, 9th Floor
                  New York, NY 10010
                  Attention: Legal Department--RMBS Warehouse Lending

21. Entire Agreement; Severability

            This Agreement shall supersede any existing  agreements  between the
parties  containing  general terms and conditions  for repurchase  transactions.
Each provision and agreement herein shall be treated as separate and independent
from  any  other  provision  or  agreement   herein  and  shall  be  enforceable
notwithstanding  the  unenforceability of any such other provision or agreement.

                                      -48-
<PAGE>

22. Non assignability

The Program Agreements are not assignable by Seller. Buyer may from time to time
assign all or a portion of its rights and  obligations  under this Agreement and
the Program Agreements with the consent of the Seller which consent shall not be
unreasonably  withheld  provided  that such consent shall not be required in the
event (i) the  assignee is an Affiliate of the Buyer or (ii) an Event of Default
has occurred and is continuing;  provided,  however that Buyer shall maintain as
agent of Seller,  for  review by Seller  upon  written  request,  a register  of
assignees  and a copy of an  executed  assignment  and  acceptance  by Buyer and
assignee ("Assignment and Acceptance"),  specifying the percentage or portion of
such rights and obligations  assigned.  Upon such assignment,  (a) such assignee
shall be a party  hereto  and to each  Program  Agreement  to the  extent of the
percentage  or portion set forth in the  Assignment  and  Acceptance,  and shall
succeed to the applicable  rights and  obligations of Buyer  hereunder,  and (b)
Buyer  shall,  to the  extent  that such  rights  and  obligations  have been so
assigned by it to either (i) an Affiliate of Buyer which assumes the obligations
of Buyer or (ii) to another  Person  approved by Seller (such approval not to be
unreasonably  withheld) which assumes the obligations of Buyer, be released from
its obligations  hereunder and under the Program  Agreements.  Unless  otherwise
stated  in  the  Assignment  and  Acceptance,  Seller  shall  continue  to  take
directions  solely  from Buyer  unless  otherwise  notified by Buyer in writing.
Buyer  may  distribute  to  any  prospective  assignee  any  document  or  other
information delivered to Buyer by Seller.

23.   Set-off

            In addition to any rights and remedies of the Buyer hereunder and by
law, the Buyer shall have the right, without prior notice to the Seller, any
such notice being expressly waived by the Seller to the extent permitted by
applicable law to set-off and appropriate and apply against any Obligation from
Seller or any Affiliate thereof to Buyer or any of its Affiliates any and all
deposits (general or special, time or demand, provisional or final), in any
currency, and any other obligation (including to return excess margin), credits,
indebtedness or claims, in any currency, in each case whether direct or
indirect, absolute or contingent, matured or unmatured, at any time held or
owing by or due from the Buyer or any Affiliate thereof to or for the credit or
the account of the Seller or any Affiliate thereof. The Buyer agrees promptly to
notify the Seller after any such set off and application made by the Buyer;
provided that the failure to give such notice shall not affect the validity of
such set off and application.

24. Binding Effect; Governing Law; Jurisdiction

            a. This  Agreement  shall be binding and inure to the benefit of the
            parties  hereto  and  their  respective   successors  and  permitted
            assigns. Seller acknowledges that the obligations of Buyer hereunder
            or otherwise are not the subject of any guaranty by, or recourse to,
            any direct or  indirect  parent or other  Affiliate  of Buyer.  THIS
            AGREEMENT  SHALL BE CONSTRUED IN ACCORDANCE  WITH,  AND GOVERNED BY,
            THE LAW OF THE  STATE OF NEW  YORK,  WITHOUT  GIVING  EFFECT  TO THE
            CONFLICT OF LAWS  PRINCIPLES  THEREOF (EXCEPT FOR SECTION 5-1401 AND
            5-1402 OF THE NEW YORK GENERAL OBLIGATIONS LAW).

                                      -49-
<PAGE>

            b. SELLER  HEREBY WAIVES TRIAL BY JURY.  SELLER  HEREBY  IRREVOCABLY
            CONSENTS TO THE EXCLUSIVE  JURISDICTION OF ANY COURT OF THE STATE OF
            NEW YORK,  OR IN THE UNITED STATES  DISTRICT  COURT FOR THE SOUTHERN
            DISTRICT  OF NEW YORK,  ARISING  OUT OF OR  RELATING  TO THE PROGRAM
            AGREEMENTS IN ANY ACTION OR  PROCEEDING.  SELLER HEREBY  SUBMITS TO,
            AND  WAIVES  ANY  OBJECTION  IT  MAY  HAVE  TO,  EXCLUSIVE  PERSONAL
            JURISDICTION  AND  VENUE IN THE  COURTS OF THE STATE OF NEW YORK AND
            THE UNITED STATES  DISTRICT  COURT FOR THE SOUTHERN  DISTRICT OF NEW
            YORK, WITH RESPECT TO ANY DISPUTES ARISING OUT OF OR RELATING TO THE
            PROGRAM AGREEMENTS.

25. No Waivers, Etc.

            No express or implied waiver of any Event of Default by either party
shall  constitute  a waiver of any other Event of Default and no exercise of any
remedy hereunder by any party shall constitute a waiver of its right to exercise
any other remedy  hereunder.  No modification or waiver of any provision of this
Agreement and no consent by any party to a departure herefrom shall be effective
unless  and until  such shall be in  writing  and duly  executed  by both of the
parties hereto. Without limitation on any of the foregoing,  the failure to give
a notice  pursuant to Section 6(a),  16(a) or otherwise,  will not  constitute a
waiver of any right to do so at a later date.

26. Intent

            a. The parties  recognize  that each  Transaction  is a  "repurchase
            agreement" as that term is defined in Section 101 of Title 11 of the
            United States Code,  as amended and a "securities  contract" as that
            term is  defined in  Section  741 of Title 11 of the  United  States
            Code, as amended and that all payments  hereunder are deemed "margin
            payments"  or  "settlement  payments"  as defined in Title 11 of the
            United States Code.

            b. It is understood that either party's right to liquidate Purchased
            Mortgage  Loans  delivered  to it in  connection  with  Transactions
            hereunder or to exercise any other  remedies  pursuant to Section 16
            hereof is a  contractual  right to  liquidate  such  Transaction  as
            described in Sections  555 and 559 of Title 11 of the United  States
            Code, as amended.

            c. The parties  agree and  acknowledge  that if a party hereto is an
            "insured  depository  institution,"  as such term is  defined in the
            Federal  Deposit  Insurance  Act,  as  amended  ("FDIA"),  then each
            Transaction  hereunder is a "qualified  financial contract," as that
            term is defined in FDIA and any rules,  orders or policy  statements
            thereunder  (except  insofar  as the type of assets  subject to such
            Transaction would render such definition inapplicable).

                                      -50-
<PAGE>

            d. It is  understood  that this  Agreement  constitutes  a  "netting
            contract"  as  defined  in and  subject  to Title IV of the  Federal
            Deposit Insurance Corporation Improvement Act of 1991 ("FDICIA") and
            each  payment   entitlement   and  payment   obligation   under  any
            Transaction   hereunder  shall  constitute  a  "covered  contractual
            payment  entitlement" or "covered  contractual payment  obligation",
            respectively, as defined in and subject to FDICIA (except insofar as
            one or both of the parties is not a "financial  institution" as that
            term is defined in FDICIA).

            e. This  Agreement is intended to be a "repurchase  agreement" and a
            "securities contract," within the meaning of Section 555 and Section
            559 under the Bankruptcy Code.

27. Disclosure Relating to Certain Federal Protections

            The parties acknowledge that they have been advised that:

            a. in the case of  Transactions  in which  one of the  parties  is a
            broker or dealer  registered  with the SEC under  Section  15 of the
            1934 Act, the Securities Investor  Protection  Corporation has taken
            the  position  that the  provisions  of the SIPA do not  protect the
            other party with respect to any Transaction hereunder;

            b. in the case of  Transactions  in which  one of the  parties  is a
            government  securities  broker  or a  government  securities  dealer
            registered with the SEC under Section 15C of the 1934 Act, SIPA will
            not  provide  protection  to the other  party  with  respect  to any
            Transaction hereunder; and

            c. in the case of  Transactions  in which  one of the  parties  is a
            financial  institution,  funds  held  by the  financial  institution
            pursuant to a Transaction  hereunder are not a deposit and therefore
            are not insured by the Federal Deposit Insurance  Corporation or the
            National Credit Union Share Insurance Fund, as applicable.

28.Power of Attorney

            Seller hereby  authorizes Buyer to file such financing  statement or
statements  relating to the Repurchase Assets without Seller's signature thereon
as Buyer, at its option,  may deem appropriate.  Seller hereby appoints Buyer as
Seller's agent and  attorney-in-fact  to execute any such financing statement or
statements  in  Seller's  name and to perform  all other acts which  Buyer deems
appropriate  to  perfect  and  continue  its  ownership  interest  in and/or the
security  interest granted hereby, if applicable,  and to protect,  preserve and
realize upon the Repurchase Assets,  including, but not limited to, the right to
endorse  notes,  complete  blanks in  documents,  transfer  servicing,  and sign
assignments on behalf of Seller as its agent and  attorney-in-fact.  This agency
and power of attorney is coupled  with an interest  and is  irrevocable  without
Buyer's  consent.  Notwithstanding  the foregoing,  the power of attorney hereby
granted may be  exercised  only during the  occurrence  and  continuance  of any
Default hereunder. Seller shall pay the filing costs for any financing statement
or statements  prepared  pursuant to this Section 28. In addition the foregoing,
the Seller agrees to execute a Power of Attorney,  the form of Exhibit E hereto,
to be delivered on the date hereof.

                                      -51-
<PAGE>

29. Buyer May Act Through Affiliates

            Buyer may, from time to time,  designate one or more  affiliates for
the purpose of performing any action hereunder.

30. Indemnification; Obligations

            a. Seller agrees to hold Buyer and each of its respective Affiliates
            and their officers, directors, employees, agents and advisors (each,
            an "Indemnified Party") harmless from and indemnify each Indemnified
            Party  (and will  reimburse  each  Indemnified  Party as the same is
            incurred) against all liabilities, losses, damages, judgments, costs
            and expenses  (including,  without  limitation,  reasonable fees and
            expenses of  counsel) of any kind which may be imposed on,  incurred
            by, or asserted against any Indemnified Party relating to or arising
            out  of  this   Agreement,   any   Transaction   Request,   Purchase
            Confirmation,  any Program Agreement or any transaction contemplated
            hereby or thereby resulting from anything other than the Indemnified
            Party's gross negligence or willful  misconduct.  Seller also agrees
            to reimburse each Indemnified  Party for all reasonable  expenses in
            connection  with the  enforcement of this Agreement and the exercise
            of any right or remedy provided for herein, any Transaction Request,
            Purchase Confirmation and any Program Agreement,  including, without
            limitation,  the  reasonable  fees  and  disbursements  of  counsel.
            Seller's  agreements in this Section 30 shall survive the payment in
            full of the  Repurchase  Price and the  expiration or termination of
            this  Agreement.  Seller hereby  acknowledges  that its  obligations
            hereunder are recourse  obligations of Seller and are not limited to
            recoveries  each  Indemnified  Party  may have with  respect  to the
            Purchased Mortgage Loans. Seller also agrees not to assert any claim
            against Buyer or any of its Affiliates,  or any of their  respective
            officers, directors,  employees, attorneys and agents, on any theory
            of  liability,  for  special,  indirect,  consequential  or punitive
            damages  arising  out  of or  otherwise  relating  to  the  facility
            established hereunder, the actual or proposed use of the proceeds of
            the  Transactions,   this  Agreement  or  any  of  the  transactions
            contemplated  thereby.  THE FOREGOING INDEMNITY AND AGREEMENT NOT TO
            ASSERT  CLAIMS  EXPRESSLY  APPLIES,   WITHOUT  LIMITATION,   TO  THE
            NEGLIGENCE (BUT NOT GROSS  NEGLIGENCE OR WILLFUL  MISCONDUCT) OF THE
            INDEMNIFIED PARTIES.

            b. Without limitation to the provisions of Section 4, if any payment
            of the Repurchase  Price of any  Transaction is made by Seller other
            than on the then scheduled Repurchase Date thereto as a result of an
            acceleration  of the  Repurchase  Date pursuant to Section 16 or for
            any other reason,  Seller shall,  upon demand by Buyer, pay to Buyer
            an amount  sufficient to compensate  Buyer for any losses,  costs or
            expenses  that  it may  reasonably  incur  as of a  result  of  such
            payment.

            c. Without  limiting the  provisions  of Section  30(a)  hereof,  if
            Seller  fails to pay when due any costs,  expenses or other  amounts
            payable by it under this Agreement,  including,  without limitation,
            fees and  expenses  of counsel and  indemnities,  such amount may be
            paid on behalf of Seller by Buyer, in its sole discretion.

                                      -52-
<PAGE>

31. Counterparts

            This Agreement may be executed in one or more counterparts,  each of
which  shall  be  deemed  to be an  original,  and all such  counterparts  shall
together constitute one and the same instrument.

32. Confidentiality

            This   Agreement  and  its  terms,   provisions,   supplements   and
amendments,  and notices hereunder, are proprietary to Buyer and Agent and shall
be held by Seller in strict  confidence  and shall not be disclosed to any third
party without the written consent of Buyer except for (i) disclosure to Seller's
direct and indirect Affiliates and Subsidiaries,  attorneys or accountants,  but
only to the extent such  disclosure  is necessary and such parties agree to hold
all information in strict confidence,  or (ii) disclosure required by law, rule,
regulation or order of a court or other  regulatory  body.  Notwithstanding  the
foregoing or anything to the contrary  contained  herein or in any other Program
Agreement,  the  parties  hereto may  disclose to any and all  Persons,  without
limitation  of any kind,  the  federal,  state and  local tax  treatment  of the
Transactions,  any fact relevant to understanding  the federal,  state and local
tax  treatment of the  Transactions,  and all  materials of any kind  (including
opinions or other tax analyses)  relating to such  federal,  state and local tax
treatment and that may be relevant to understanding such tax treatment; provided
that Seller may not disclose the name of or identifying information with respect
to Buyer or Agent or any  pricing  terms  (including,  without  limitation,  the
Pricing Rate,  Purchase Price  Percentage and Purchase Price) or other nonpublic
business  or  financial  information  (including  any  sublimits  and  financial
covenants)  that is unrelated to the federal,  state and local tax  treatment of
the  Transactions and is not relevant to  understanding  the federal,  state and
local tax treatment of the  Transactions,  without the prior written  consent of
the Buyer.

            Notwithstanding  anything in this  Agreement  to the  contrary,  the
Seller  shall  comply  with  all  applicable  local,  state  and  federal  laws,
including,  without  limitation,  all privacy and data protection law, rules and
regulations  that are  applicable to the Purchased  Assets and/or any applicable
terms of this Agreement (the "Confidential Information"). The Seller understands
that the Confidential  Information may contain "nonpublic personal information",
as that term is  defined in Section  509(4) of the  Gramm-Leach-Bliley  Act (the
"Act"),  and the Seller agrees to maintain such nonpublic  personal  information
that it  receives  hereunder  in  accordance  with the Act and other  applicable
federal and state privacy  laws.  The Seller shall  implement  such physical and
other  security  measures as shall be  necessary  to (a) ensure the security and
confidentiality of the "nonpublic  personal  information" of the "customers" and
"consumers" (as those terms are defined in the Act) of Buyer or any Affiliate of
Buyer which the Seller holds,  (b) protect against any threats or hazards to the
security and integrity of such nonpublic personal  information,  and (c) protect
against  any  unauthorized   access  to  or  use  of  such  nonpublic   personal
information.  The  Seller  represents  and  warrants  that  it  has  implemented
appropriate  measures to meet the objectives of Section 501(b) of the Act and of
the  applicable  standards  adopted  pursuant  thereto,  as now or  hereafter in
effect. Upon request,  the Seller will provide evidence reasonably  satisfactory
to allow Buyer to confirm that the providing party has satisfied its obligations
as required under this Section.  Without  limitation,  this may include  Buyer's
review of audits, summaries of test results, and other equivalent evaluations of
the Seller. The Seller shall notify Buyer immediately following discovery of any
breach or compromise of the security, confidentiality, or integrity of nonpublic
personal information of the customers and consumers of Buyer or any Affiliate of
Buyer  provided  directly to the Seller by Buyer or such  Affiliate.  The Seller
shall  provide  such notice to Buyer by personal  delivery,  by  facsimile  with
confirmation of receipt, or by overnight courier with confirmation of receipt to
the applicable requesting individual.

                                      -53-
<PAGE>

33. Recording of Communications

            Buyer and Seller shall have the right (but not the obligation)  from
time to time to make or  cause  to be made  tape  recordings  of  communications
between its employees and those of the other party with respect to Transactions.
Buyer and Seller  consent to the  admissibility  of such tape  recordings in any
court,  arbitration,  or  other  proceedings.  The  parties  agree  that  a duly
authenticated  transcript  of such a tape  recording  shall  be  deemed  to be a
writing conclusively evidencing the parties' agreement.

34.   Periodic Due Diligence Review

            Seller  acknowledges that Buyer has the right to perform  continuing
due  diligence  reviews with respect to the Seller and the Mortgage  Loans,  for
purposes  of  verifying  compliance  with the  representations,  warranties  and
specifications  made  hereunder,  or  otherwise,  and  Seller  agrees  that upon
reasonable  (but no less than one (1) Business  Day's)  prior  notice  unless an
Event of Default shall have  occurred,  in which case no notice is required,  to
Seller, Buyer or its authorized  representatives will be permitted during normal
business  hours to  examine,  inspect,  and make  copies  and  extracts  of, the
Mortgage Files and any and all documents,  records,  agreements,  instruments or
information  relating  to such  Mortgage  Loans in the  possession  or under the
control of Seller  and/or the  Custodian.  Seller also shall make  available  to
Buyer a  knowledgeable  financial  or  accounting  officer  for the  purpose  of
answering  questions  respecting  the  Mortgage  Files and the  Mortgage  Loans.
Without limiting the generality of the foregoing, Seller acknowledges that Buyer
may  purchase  Mortgage  Loans from Seller  based  solely  upon the  information
provided  by  Seller  to  Buyer  in  the   Mortgage   Loan   Schedule   and  the
representations,  warranties and covenants  contained herein, and that Buyer, at
its  option,  has the right at any time to  conduct a partial  or  complete  due
diligence  review  on  some  or  all  of  the  Mortgage  Loans  purchased  in  a
Transaction,  including,  without limitation,  ordering Broker's price opinions,
new credit  reports and new appraisals on the related  Mortgaged  Properties and
otherwise  re-generating  the information  used to originate such Mortgage Loan.
Buyer may underwrite such Mortgage Loans itself or engage a mutually agreed upon
third party underwriter to perform such underwriting. Seller agrees to cooperate
with Buyer and any third party underwriter in connection with such underwriting,
including,  but not limited to, providing Buyer and any third party  underwriter
with  access  to any and all  documents,  records,  agreements,  instruments  or
information  relating to such  Mortgage  Loans in the  possession,  or under the
control,   of  Seller.   Seller   further  agrees  that  Seller  shall  pay  all
out-of-pocket  costs and expenses  incurred by Buyer in connection  with Buyer's
activities pursuant to this Section 34 ("Due Diligence Costs");  provided,  that
such Due  Diligence  Costs shall not exceed the Due  Diligence  Cap per calendar
year unless a Default or Event of Default  shall have  occurred,  in which event
Buyer  shall have the right to perform  due  diligence,  at the sole  expense of
Seller  without  regard  to  the  dollar  limitation  set  forth  herein..

                                      -54-
<PAGE>

35. Authorizations

            Any of the persons whose  signatures and titles appear on Schedule 2
are authorized,  acting singly,  to act for Seller or Buyer, as the case may be,
under this Agreement.

36. Acknowledgement Of Anti-Predatory Lending Policies

            Buyer has in place internal  policies and procedures  that expressly
prohibit its purchase of any High Cost Mortgage Loan.

37. Documents Mutually Drafted

            The Seller and the Buyer  agree that this  Agreement  and each other
Program Agreement  prepared in connection with the Transactions set forth herein
have been mutually drafted and negotiated by each party,  and consequently  such
documents shall not be construed against either party as the drafter thereof.

38.   General Interpretive Principles

            For  purposes  of this  Agreement,  except  as  otherwise  expressly
provided or unless the context otherwise requires:

            a. the terms defined in this Agreement have the meanings assigned to
            them  in  this  Agreement  and  include  the  plural  as well as the
            singular,  and the use of any  gender  herein  shall  be  deemed  to
            include the other gender;

            b. accounting  terms not otherwise  defined herein have the meanings
            assigned to them in accordance  with generally  accepted  accounting
            principles;

            c.  references  herein  to  "Articles",  "Sections",  "Subsections",
            "Paragraphs", and other subdivisions without reference to a document
            are to designated Articles,  Sections,  Subsections,  Paragraphs and
            other subdivisions of this Agreement;

            d. a  reference  to a  Subsection  without  further  reference  to a
            Section is a reference to such  Subsection  as contained in the same
            Section
            in which the reference appears, and this rule shall also apply to
            Paragraphs and other subdivisions;

            e. the words  "herein",  "hereof",  "hereunder"  and other  words of
            similar  import  refer to this  Agreement  as a whole and not to any
            particular provision;

            f. the term "include" or "including"  shall mean without  limitation
            by reason of enumeration;

                                      -55-
<PAGE>

            g. all times  specified  herein or in any  other  Program  Agreement
            (unless expressly specified  otherwise) are local times in New York,
            New York unless otherwise stated; and

            h. all references herein or in any Program Agreement to "good faith"
            means good faith as  defined in Section  1-201(19)  of the UCC as in
            effect in the State of New York.

                            [Signature Page Follows]

                                      -56-
<PAGE>

IN WITNESS WHEREOF, Seller and the Buyer have caused their names to be signed
hereto by their respective officers thereunto duly authorized as of the date
first above written.

CREDIT SUISSE FIRST BOSTON MORTGAGE CAPITAL LLC, as Buyer

By:  /s/ A. Adam Loskove

Title: Vice President

Date:__________________________________

CHIMERA INVESTMENT CORPORATION, as Seller

By: /s/ A. Alexandra Denahan

Title: Chief Financial Officer

Date:__________________________________

<PAGE>

                                   SCHEDULE 1

     REPRESENTATIONS AND WARRANTIES WITH RESPECT TO PURCHASED MORTGAGE LOANS

            (a) Payments  Current.  All  payments  required to be made up to the
Purchase  Date for the Mortgage  Loan under the terms of the Mortgage  Note have
been  made  and  credited.  No  payment  required  under  the  Mortgage  Loan is
delinquent  nor has any payment under the Mortgage  Loan been  delinquent at any
time since the origination of the Mortgage Loan. The first Monthly Payment shall
be made,  or shall have been made,  with respect to the Mortgage Loan on its Due
Date or within the grace period, all in accordance with the terms of the related
Mortgage Note.

            (b) No Outstanding  Charges.  All taxes,  governmental  assessments,
insurance  premiums,  water, sewer and municipal charges,  leasehold payments or
ground rents which previously  became due and owing have been paid, or an escrow
of funds has been established in an amount sufficient to pay for every such item
which remains unpaid and which has been assessed but is not yet due and payable.
Neither  Seller nor the  Qualified  Originator  from which  Seller  acquired the
Mortgage Loan has advanced  funds, or induced,  solicited or knowingly  received
any  advance  of  funds  by a  party  other  than  the  Mortgagor,  directly  or
indirectly,  for the payment of any amount  required  under the  Mortgage  Loan,
except  for  interest  accruing  from the date of the  Mortgage  Note or date of
disbursement of the proceeds of the Mortgage Loan,  whichever is earlier, to the
day  which  precedes  by one  month  the Due Date of the  first  installment  of
principal and/or interest thereunder.

            (c) Original  Terms  Unmodified.  The terms of the Mortgage Note and
Mortgage  have not been  impaired,  waived,  altered or modified in any respect,
from the date of  origination;  except  by a written  instrument  which has been
recorded,  if  necessary to protect the  interests of Buyer,  and which has been
delivered to the Custodian and the terms of which are reflected in the Custodial
Mortgage  Loan  Schedule.  The  substance  of any  such  waiver,  alteration  or
modification has been approved by the title insurer, to the extent required, and
its terms are reflected on the Custodial Mortgage Loan Schedule. No Mortgagor in
respect of the Mortgage Loan has been released,  in whole or in part,  except in
connection with an assumption  agreement  approved by the title insurer,  to the
extent required by such policy,  and which  assumption  agreement is part of the
Mortgage File delivered to the Custodian and the terms of which are reflected in
the Custodial Mortgage Loan Schedule.

            (d) No Defenses.  The  Mortgage  Loan is not subject to any right of
rescission, set-off, counterclaim or defense, including, without limitation, the
defense of usury,  nor will the  operation  of any of the terms of the  Mortgage
Note or the Mortgage, or the exercise of any right thereunder, render either the
Mortgage  Note or the  Mortgage  unenforceable,  in whole or in part and no such
right of  rescission,  set-off,  counterclaim  or defense has been asserted with
respect  thereto,  and no Mortgagor in respect of the Mortgage Loan was a debtor
in any state or Federal  bankruptcy  or  insolvency  proceeding  at the time the
Mortgage  Loan was  originated.  Seller has no knowledge nor has it received any
notice that any  Mortgagor  in respect of the  Mortgage  Loan is a debtor in any
state or federal bankruptcy or insolvency proceeding.

                                  Schedule 1-1
<PAGE>

            (e) Hazard  Insurance.  The Mortgaged  Property is insured by a fire
and extended perils insurance policy,  issued by a Qualified  Insurer,  and such
other  hazards as are  customary  in the area where the  Mortgaged  Property  is
located,  and to the  extent  required  by Seller as of the date of  origination
consistent with the Acquisition  Guidelines,  against earthquake and other risks
insured  against by Persons  operating  like  properties  in the locality of the
Mortgaged  Property,  in an amount not less than the greatest of (i) 100% of the
replacement  cost  of all  improvements  to the  Mortgaged  Property,  (ii)  the
outstanding  principal  balance  of the  Mortgage  Loan,  or  (iii)  the  amount
necessary to avoid the operation of any co-insurance  provisions with respect to
the  Mortgaged  Property,  and  consistent  with the amount that would have been
required  as of the date of  origination  in  accordance  with  the  Acquisition
Guidelines. If any portion of the Mortgaged Property is in an area identified by
any federal  Governmental  Authority as having special flood hazards,  and flood
insurance is available,  a flood insurance policy meeting the current guidelines
of the  Federal  Emergency  Management  Agency  is in  effect  with a  generally
acceptable  insurance carrier, in an amount representing  coverage not less than
the least of (1) the outstanding  principal balance of the Mortgage Loan (2) the
full insurable  value of the Mortgaged  Property,  and (3) the maximum amount of
insurance  available  under the National Flood Insurance Act of 1968, as amended
by the  Flood  Disaster  Protection  Act of 1974.  All such  insurance  policies
(collectively,  the  "hazard  insurance  policy")  contain a standard  mortgagee
clause naming Seller, its successors and assigns (including, without limitation,
subsequent  owners of the Mortgage Loan), as mortgagee,  and may not be reduced,
terminated or canceled  without 30 days' prior written  notice to the mortgagee.
No such notice has been  received  by Seller.  All  premiums  on such  insurance
policy have been paid. The related Mortgage  obligates the Mortgagor to maintain
all such insurance  and, at such  Mortgagor's  failure to do so,  authorizes the
mortgagee to maintain such insurance at the Mortgagor's  cost and expense and to
seek reimbursement therefor from such Mortgagor.  Where required by state law or
regulation, the Mortgagor has been given an opportunity to choose the carrier of
the  required  hazard  insurance,  provided  the  policy  is not a  "master"  or
"blanket"  hazard  insurance  policy  covering  a  condominium,  or  any  hazard
insurance policy covering the common  facilities of a planned unit  development.
The hazard insurance  policy is the valid and binding  obligation of the insurer
and is in full force and effect. Seller has not engaged in, and has no knowledge
of the Mortgagor's having engaged in, any act or omission which would impair the
coverage of any such  policy,  the  benefits  of the  endorsement  provided  for
herein,  or the  validity  and  binding  effect  of  either  including,  without
limitation, no unlawful fee, commission, kickback or other unlawful compensation
or value of any kind has been or will be  received,  retained or realized by any
attorney,  firm or other Person,  and no such unlawful items have been received,
retained or realized by Seller.

            (f) Compliance with Applicable Laws. Any and all requirements of any
federal,   state  or   local   law   including,   without   limitation,   usury,
truth-in-lending, real estate settlement procedures, consumer credit protection,
equal credit opportunity or disclosure laws applicable to the Mortgage Loan have
been complied with, the  consummation of the  transactions  contemplated  hereby
will not involve the violation of any such laws or regulations, and Seller shall
maintain or shall cause its agent to maintain in its  possession,  available for
the inspection of Buyer,  and shall deliver to Buyer,  upon demand,  evidence of
compliance with all such requirements.

            (g)  No  Satisfaction  of  Mortgage.   The  Mortgage  has  not  been
satisfied,  canceled,  subordinated  or rescinded,  in whole or in part, and the
Mortgaged Property has not been released from the lien of the Mortgage, in whole
or in part,  nor has any  instrument  been  executed  that would effect any such
release,  cancellation,  subordination or rescission.  Seller has not waived the
performance  by the  Mortgagor  of any  action,  if the  Mortgagor's  failure to
perform  such action  would cause the  Mortgage  Loan to be in default,  nor has
Seller  waived  any  default  resulting  from  any  action  or  inaction  by the
Mortgagor.

                                  Schedule 1-2
<PAGE>

            (h) Type of Mortgaged Property. The Mortgaged Property consists of a
single parcel of real property with a detached single family  residence  erected
thereon, or a two- to four-family dwelling, or an individual condominium unit in
a  low-rise  condominium  project,  or an  individual  unit  in a  planned  unit
development or a de minimis planned unit development;  provided,  however,  that
any  condominium  unit or  planned  unit  development  shall  conform  with  the
applicable  Fannie Mae and Freddie Mac requirements  regarding such dwellings or
shall  conform  to  underwriting  guidelines  acceptable  to  Buyer  in its sole
discretion and that no residence or dwelling is a mobile home. No portion of the
Mortgaged  Property  is  used  for  commercial  purposes;  provided,  that,  the
Mortgaged  Property  may be a mixed  use  property  if such  Mortgaged  Property
conforms to underwriting guidelines acceptable to Buyer in its sole discretion.

(i) Valid First Lien. The Mortgage is a valid, subsisting, enforceable and
perfected first priority lien and first priority security interest, on the real
property included in the Mortgaged Property, including all buildings on the
Mortgaged Property and all installations and mechanical, electrical, plumbing,
heating and air conditioning systems located in or annexed to such buildings,
and all additions, alterations and replacements made at any time with respect to
the foregoing. The lien of the Mortgage is subject only to:

            a. the lien of current real property taxes and  assessments  not yet
            due and payable;

            b. covenants, conditions and restrictions,  rights of way, easements
            and other  matters of the public  record as of the date of recording
            acceptable to prudent  mortgage lending  institutions  generally and
            specifically referred to in Buyer's title insurance policy delivered
            to the  originator  of the  Mortgage  Loan  and (a)  referred  to or
            otherwise considered in the appraisal made for the originator of the
            Mortgage  Loan or (b) which do not  adversely  affect the  Appraised
            Value of the Mortgaged Property set forth in such appraisal;

            c. other matters to which like properties are commonly subject which
            do not  materially  interfere  with  the  benefits  of the  security
            intended to be provided by the Mortgage or the use, enjoyment, value
            or marketability of the related Mortgaged Property.

Any security  agreement,  chattel mortgage or equivalent document related to and
delivered in  connection  with the Mortgage  Loan  establishes  and creates with
respect to each first lien mortgage loan, a valid,  subsisting  and  enforceable
first  lien and first  priority  security  interest  on the  property  described
therein  and Seller  has full right to pledge and assign the same to Buyer.  The
Mortgaged  Property was not, as of the date of origination of the Mortgage Loan,
subject to a  mortgage,  deed of trust,  deed to secure  debt or other  security
instrument creating a lien subordinate to the lien of the Mortgage.

                                  Schedule 1-3
<PAGE>

            (j)  Validity  of  Mortgage  Documents.  The  Mortgage  Note and the
Mortgage  and any other  agreement  executed  and  delivered  by a Mortgagor  if
applicable,  in  connection  with a Mortgage  Loan are genuine,  and each is the
legal,  valid  and  binding  obligation  of the  maker  thereof  enforceable  in
accordance  with its terms.  All parties to the Mortgage  Note, the Mortgage and
any other such related  agreement had legal  capacity to enter into the Mortgage
Loan and to execute and deliver the  Mortgage  Note,  the  Mortgage and any such
agreement,  and the  Mortgage  Note,  the  Mortgage  and any other such  related
agreement  have been duly and  properly  executed by such  related  parties.  No
fraud, error, omission, misrepresentation, negligence or similar occurrence with
respect to a Mortgage Loan has taken place on the part of any Person, including,
without limitation,  the Mortgagor,  any appraiser, any builder or developer, or
any other party involved in the  origination  of the Mortgage  Loan.  Seller has
reviewed all of the documents  constituting  the Mortgage File and has made such
inquiries  as it  deems  necessary  to make  and  confirm  the  accuracy  of the
representations set forth herein. To the best of Seller's  knowledge,  except as
disclosed to Buyer in writing, all tax identifications and property descriptions
are legally sufficient; and tax segregation, where required, has been completed.

            (k) Full Disbursement of Proceeds.  There is no further  requirement
for future advances under the Mortgage Loan, and any and all  requirements as to
completion of any on-site or off-site improvement and as to disbursements of any
escrow funds  therefor have been  complied  with.  All costs,  fees and expenses
incurred  in  making or  closing  the  Mortgage  Loan and the  recording  of the
Mortgage  were paid,  and the  Mortgagor  is not  entitled  to any refund of any
amounts paid or due under the Mortgage Note or Mortgage.

            (l)  Ownership.  Seller has full right to sell the Mortgage  Loan to
Buyer free and clear of any encumbrance,  equity,  participation interest, lien,
pledge,  charge,  claim or security  interest,  and has full right and authority
subject to no interest or participation  of, or agreement with, any other party,
to sell each Mortgage Loan pursuant to this  Agreement and following the sale of
each  Mortgage  Loan,  Buyer will own such  Mortgage  Loan free and clear of any
encumbrance,  equity,  participation  interest,  lien, pledge,  charge, claim or
security  interest  except any such security  interest  created  pursuant to the
terms of this Agreement.

            (m) Doing  Business.  All parties which have had any interest in the
Mortgage Loan, whether as mortgagee,  assignee,  pledgee or otherwise,  are (or,
during the period in which they held and disposed of such interest, were) (i) in
compliance with any and all applicable licensing requirements of the laws of the
state wherein the Mortgaged  Property is located,  and (ii) either (A) organized
under the laws of such state,  (B) qualified to do business in such state, (C) a
federal savings and loan association, a savings bank or a national bank having a
principal office in such state, or (D) not doing business in such state.

            (n) Title  Insurance.  The Mortgage Loan is covered by either (i) an
attorney's  opinion of title and  abstract of title,  the form and  substance of
which is acceptable to prudent  mortgage  lending  institutions  making mortgage
loans in the area  wherein  the  Mortgaged  Property  is located or (ii) an ALTA
lender's title insurance policy or other generally  acceptable form of policy or
insurance  acceptable to Fannie Mae or Freddie Mac and each such title insurance
policy is issued by a title insurer  acceptable to Fannie Mae or Freddie Mac and
qualified to do business in the  jurisdiction  where the  Mortgaged  Property is
located,  insuring Seller, its successors and assigns,  as to the first priority
lien of the Mortgage,  as applicable,  in the original  principal  amount of the
Mortgage Loan, with respect to a Mortgage Loan (or to the extent a Mortgage Note
provides for negative amortization,  the maximum amount of negative amortization
in accordance  with the Mortgage),  subject only to the exceptions  contained in
clauses (1), (2) and (3), and in the case of  adjustable  rate  Mortgage  Loans,
against any loss by reason of the  invalidity  or  unenforceability  of the lien
resulting  from the  provisions of the Mortgage  providing for adjustment to the
Mortgage  Interest  Rate and  Monthly  Payment.  Where  required by state law or
regulation,  the Mortgagor has been given the  opportunity to choose the carrier
of the required  mortgage  title  insurance.  Additionally,  such lender's title
insurance   policy   affirmatively   insures  ingress  and  egress  and  against
encroachments  by or upon the Mortgaged  Property or any interest  therein.  The
title  policy does not contain any special  exceptions  (other than the standard
exclusions)  for  zoning  and uses and has been  marked to delete  the  standard
survey  exception or to replace the standard  survey  exception  with a specific
survey  reading.  Seller,  its successors and assigns,  are the sole insureds of
such lender's title insurance  policy,  and such lender's title insurance policy
is valid and  remains  in full  force and effect and will be in force and effect
upon the  consummation of the  transactions  contemplated by this Agreement.  No
claims have been made under such lender's title insurance  policy,  and no prior
holder or servicer of the related Mortgage,  including Seller,  has done, by act
or omission,  anything  which would impair the coverage of such  lender's  title
insurance policy,  including without  limitation,  no unlawful fee,  commission,
kickback or other unlawful compensation or value of any kind has been or will be
received,  retained or realized by any attorney,  firm or other  Person,  and no
such unlawful items have been received, retained or realized by Seller.

                                  Schedule 1-4
<PAGE>

            (o) No Defaults.  There is no default, breach, violation or event of
acceleration  existing  under the Mortgage or the Mortgage Note and no event has
occurred  which,  with the passage of time or with notice and the  expiration of
any grace or cure period, would constitute a default, breach, violation or event
of  acceleration,  and  neither  Seller  nor its  predecessors  have  waived any
default, breach, violation or event of acceleration.

            (p) No Mechanics' Liens. There are no mechanics' or similar liens or
claims  which have been  filed for work,  labor or  material  (and no rights are
outstanding  that under the law could  give rise to such  liens)  affecting  the
Mortgaged  Property  which are or may be liens prior to, or equal or  coordinate
with, the lien of the Mortgage.

            (q) Location of  Improvements;  No  Encroachments.  All improvements
which were  considered  in  determining  the  Appraised  Value of the  Mortgaged
Property lie wholly within the boundaries and building  restriction lines of the
Mortgaged  Property,  and no improvements on adjoining  properties encroach upon
the Mortgaged Property. No improvement located on or being part of the Mortgaged
Property is in violation of any applicable zoning and building law, ordinance or
regulation.

            (r) Origination;  Payment Terms. The Mortgage Loan was originated by
or in  conjunction  with a mortgagee  approved by the  Secretary  of Housing and
Urban Development  pursuant to Sections 203 and 211 of the National Housing Act,
a savings and loan association, a savings bank, a commercial bank, credit union,
insurance  company  or  similar  banking  institution  which is  supervised  and
examined by a federal or state authority.  Principal and/or interest payments on
the Mortgage Loan  commenced no more than 60 days after funds were  disbursed in
connection  with the Mortgage  Loan.  With respect to  adjustable  rate Mortgage
Loans,  the Mortgage  Interest Rate is adjusted on each Interest Rate Adjustment
Date to equal the Index plus the Gross Margin (rounded up or down to the nearest
..125%),  subject to the Mortgage Interest Rate Cap. The Mortgage Note is payable
on the first day of each month in equal monthly installments of principal and/or
interest  (subject to a balloon payment in the case of a 30/40 Mortgage Loan and
subject to an "interest only" period in the case of Interest Only Loans),  which
installments  of interest (a) with respect to adjustable rate Mortgage Loans are
subject to change on the Interest Rate Adjustment Date due to adjustments to the
Mortgage  Interest  Rate on each  Interest  Rate  Adjustment  Date  and (b) with
respect to  Interest  Only  Loans are  subject  to change on the  Interest  Only
Adjustment  Date  due to  adjustments  to the  Mortgage  Interest  Rate  on each
Interest  Only  Adjustment  Date,  in both cases with  interest  calculated  and
payable in arrears, sufficient to amortize the Mortgage Loan fully by the stated
maturity date, over an original term of not more than 30 years from commencement
of  amortization  (except with respect to any 30/40  Mortgage  Loans).  No 30/40
Mortgage  Loan has a balloon  payment  due  prior to the date  which is 15 years
following  the  origination  date.  The Due Date of the first  payment under the
Mortgage Note is no more than 60 days from the date of the Mortgage Note.

                                  Schedule 1-5
<PAGE>

            (s) Customary  Provisions.  The Mortgage Note has a stated maturity.
The Mortgage contains customary and enforceable provisions such as to render the
rights and remedies of the holder thereof  adequate for the realization  against
the  Mortgaged  Property  of the  benefits  of the  security  provided  thereby,
including,  (i) in the case of a  Mortgage  designated  as a deed of  trust,  by
trustee's  sale, and (ii) otherwise by judicial  foreclosure.  Upon default by a
Mortgagor  on a Mortgage  Loan and  foreclosure  on, or  trustee's  sale of, the
Mortgaged Property pursuant to the proper procedures, the holder of the Mortgage
Loan  will be able to  deliver  good and  merchantable  title  to the  Mortgaged
Property.  There is no homestead or other  exemption or other right available to
the Mortgagor or any other  person,  or  restriction  on the Seller or any other
person,  including  without  limitation,  any  federal,  state  or  local,  law,
ordinance,  decree,  regulation,  guidance,  attorney  general action,  or other
pronouncement,  whether  temporary or permanent in nature,  that would interfere
with,  restrict or delay,  either (y) the  ability of the  Seller,  Buyer or any
servicer or any successor  servicer to sell the related Mortgaged  Property at a
trustee's  sale or  otherwise,  or (z) the ability of the  Seller,  Buyer or any
servicer or any  successor  servicer to foreclose on the related  Mortgage.  The
Mortgage Note and Mortgage are on forms acceptable to Freddie Mac or Fannie Mae.

            (t) Occupancy of the Mortgaged Property. As of the Purchase Date the
Mortgaged  Property is lawfully  occupied under applicable law. All inspections,
licenses  and  certificates  required to be made or issued  with  respect to all
occupied  portions of the  Mortgaged  Property  and, with respect to the use and
occupancy of the same,  including but not limited to  certificates  of occupancy
and  fire  underwriting  certificates,  have  been  made or  obtained  from  the
appropriate   authorities.   Seller  has  not  received  notification  from  any
Governmental Authority that the Mortgaged Property is in material non-compliance
with such laws or regulations, is being used, operated or occupied unlawfully or
has failed to have or obtain such inspection,  licenses or certificates,  as the
case may be.  Seller  has not  received  notice of any  violation  or failure to
conform  with  any  such  law,  ordinance,   regulation,  standard,  license  or
certificate.   With   respect  to  any   Mortgage   Loan   originated   with  an
"owner-occupied"  Mortgaged Property,  the Mortgagor  represented at the time of
origination  of the Mortgage Loan that the Mortgagor  would occupy the Mortgaged
Property as the Mortgagor's primary residence.

                                  Schedule 1-6
<PAGE>

            (u) No Additional  Collateral.  The Mortgage Note is not and has not
been secured by any collateral, pledge account or other security except the lien
of the  corresponding  Mortgage  and the  security  interest  of any  applicable
Security Agreement.

            (v) Deeds of Trust. In the event the Mortgage  constitutes a deed of
trust, a trustee, authorized and duly qualified under applicable law to serve as
such,  has been properly  designated and currently so serves and is named in the
Mortgage, and no fees or expenses are or will become payable by the Custodian or
Buyer to the  trustee  under the deed of  trust,  except  in  connection  with a
trustee's sale after default by the Mortgagor.

            (w)  Transfer of  Mortgage  Loans.  Except with  respect to Mortgage
Loans registered with MERS, the Assignment of Mortgage is in recordable form and
is acceptable  for  recording  under the laws of the  jurisdiction  in which the
Mortgaged Property is located.

            (x) Due-On-Sale.  The Mortgage contains an enforceable provision for
the acceleration of the payment of the unpaid principal  balance of the Mortgage
Loan in the event that the Mortgaged Property is sold or transferred without the
prior written consent of the mortgagee thereunder.

            (y) No Buydown  Provisions;  No  Graduated  Payments  or  Contingent
Interests.  Except with respect to Agency Mortgage Loans, the Mortgage Loan does
not contain provisions  pursuant to which Monthly Payments are paid or partially
paid with funds  deposited in any separate  account  established by Seller,  the
Mortgagor,  or anyone on behalf of the  Mortgagor,  or paid by any source  other
than the Mortgagor nor does it contain any other  similar  provisions  which may
constitute a "buydown"  provision.  The Mortgage Loan is not a graduated payment
mortgage  loan (except with  respect to 30/40  Mortgage  Loans) and the Mortgage
Loan does not have a shared appreciation or other contingent interest feature.

            (z)  Consolidation of Future  Advances.  Any future advances made to
the  Mortgagor  prior to the  Purchase  Date  have  been  consolidated  with the
outstanding principal amount secured by the Mortgage,  and the secured principal
amount, as consolidated, bears a single interest rate and single repayment term.
The lien of the Mortgage securing the consolidated principal amount is expressly
insured  as  having  first  lien  priority  by  a  title  insurance  policy,  an
endorsement to the policy insuring the mortgagee's  consolidated  interest or by
other title evidence  acceptable to Fannie Mae and Freddie Mac. The consolidated
principal  amount does not exceed the original  principal amount of the Mortgage
Loan.

            (aa)  No   Condemnation   Proceeding.   There   have  not  been  any
condemnation  proceedings with respect to the Mortgaged  Property and Seller has
no knowledge of any such proceedings.

            (bb)   Collection   Practices;   Escrow   Deposits;   Interest  Rate
Adjustments.  The origination  and collection  practices used by the originator,
each  servicer of the Mortgage Loan and Seller with respect to the Mortgage Loan
have been in all  respects in  compliance  with  Accepted  Servicing  Practices,
applicable laws and regulations, and have been in all respects legal and proper.
With respect to escrow  deposits and Escrow  Payments,  all such payments are in
the  possession  of,  or  under  the  control  of,  Seller  and  there  exist no
deficiencies  in  connection  therewith  for which  customary  arrangements  for
repayment thereof have not been made. All Escrow Payments have been collected in
full compliance with state and federal law. An escrow of funds is not prohibited
by applicable law and has been  established  in an amount  sufficient to pay for
every  item that  remains  unpaid and has been  assessed  but is not yet due and
payable.  No escrow deposits or Escrow Payments or other charges or payments due
Seller have been  capitalized  under the  Mortgage  or the  Mortgage  Note.  All
Mortgage  Interest Rate  adjustments  have been made in strict  compliance  with
state and federal law and the terms of the related  Mortgage  Note. Any interest
required to be paid  pursuant to state,  federal and local law has been properly
paid and credited.

                                  Schedule 1-7
<PAGE>

            (cc) Conversion to Fixed Interest Rate.  Except as allowed by Fannie
Mae or Freddie Mac or otherwise as expressly  approved in writing by Buyer, with
respect to adjustable rate Mortgage Loans,  the Mortgage Loan is not convertible
to a fixed interest rate Mortgage Loan.

            (dd) Other  Insurance  Policies.  No action,  inaction  or event has
occurred  and no state of facts  exists or has existed that has resulted or will
result in the  exclusion  from,  denial  of, or defense  to  coverage  under any
applicable  special  hazard  insurance  policy,  PMI Policy or bankruptcy  bond,
irrespective  of the cause of such failure of coverage.  In connection  with the
placement of any such insurance,  no commission,  fee, or other compensation has
been or will be received by Seller or by any officer,  director,  or employee of
Seller  or any  designee  of Seller or any  corporation  in which  Seller or any
officer, director, or employee had a financial interest at the time of placement
of such insurance.

(ee) Servicemembers Civil Relief Act. The Mortgagor has not notified Seller, and
Seller has no knowledge, of any relief requested or allowed to the Mortgagor
under the Servicemembers Civil Relief Act of 2003. (ff) Appraisal. The Mortgage
File contains an appraisal of the related Mortgaged Property signed prior to the
funding of the Mortgage Loan by a qualified appraiser, duly appointed by Seller,
who had no interest, direct or indirect in the Mortgaged Property or in any loan
made on the security thereof, and whose compensation is not affected by the
approval or disapproval of the Mortgage Loan, and the appraisal and appraiser
both satisfy the requirements of Fannie Mae or Freddie Mac and Title XI of the
Federal Institutions Reform, Recovery, and Enforcement Act of 1989 as amended
and the regulations promulgated thereunder, all as in effect on the date the
Mortgage Loan was originated.

            (gg) Disclosure Materials. The Mortgagor has executed a statement to
the effect that the Mortgagor has received all disclosure  materials required by
applicable law with respect to the making of adjustable rate mortgage loans, and
Seller maintains such statement in the Mortgage File.

            (hh)  Construction  or  Rehabilitation  of  Mortgaged  Property.  No
Mortgage Loan was made in connection with the construction or  rehabilitation of
a Mortgaged  Property or  facilitating  the  trade-in or exchange of a Mortgaged
Property.

                                  Schedule 1-8
<PAGE>

            (ii) No Defense to Insurance  Coverage.  No action has been taken or
failed to be taken,  no event has  occurred  and no state of facts exists or has
existed on or prior to the Purchase  Date  (whether or not known to Seller on or
prior to such date)  which has  resulted or will  result in an  exclusion  from,
denial  of,  or  defense  to  coverage  under  any  private  mortgage  insurance
(including,  without limitation, any exclusions, denials or defenses which would
limit or reduce the availability of the timely payment of the full amount of the
loss  otherwise due thereunder to the insured)  whether  arising out of actions,
representations,  errors, omissions, negligence, or fraud of Seller, the related
Mortgagor or any party involved in the application for such coverage,  including
the  appraisal,  plans  and  specifications  and  other  exhibits  or  documents
submitted therewith to the insurer under such insurance policy, or for any other
reason under such coverage, but not including the failure of such insurer to pay
by reason of such insurer's  breach of such  insurance  policy or such insurer's
financial inability to pay.

            (jj)  Capitalization of Interest.  The Mortgage Note does not by its
terms provide for the capitalization or forbearance of interest.

            (kk) No Equity  Participation.  No document relating to the Mortgage
Loan  provides  for  any  contingent  or  additional  interest  in the  form  of
participation  in the cash flow of the  Mortgaged  Property  or a sharing in the
appreciation of the value of the Mortgaged Property.  The indebtedness evidenced
by the  Mortgage  Note  is  not  convertible  to an  ownership  interest  in the
Mortgaged  Property or the Mortgagor and Seller has not financed nor does it own
directly or indirectly,  any equity of any form in the Mortgaged Property or the
Mortgagor.

            (ll)  Proceeds of Mortgage  Loan.  The proceeds of the Mortgage Loan
have not been and shall not be used to  satisfy,  in whole or in part,  any debt
owed or owing by the  Mortgagor to Seller or any Affiliate or  correspondent  of
Seller, except in connection with a refinanced Mortgage Loan.

            (mm) Origination Date. The Purchase Date is no more than ninety (90)
days following the origination  date.

            (nn)  No  Exception.  The  Custodian  has  not  noted  any  material
exceptions  on a Custodial  Mortgage  Loan Schedule with respect to the Mortgage
Loan  which  would  materially  adversely  affect the  Mortgage  Loan or Buyer's
interest in the Mortgage Loan.

            (oo) Mortgage  Submitted for  Recordation.  The Mortgage  either has
been  or  will  promptly  be  submitted  for   recordation  in  the  appropriate
governmental  recording office of the jurisdiction  where the Mortgaged Property
is located.

            (pp)  Documents  Genuine.  Such  Purchased  Mortgage  Loan  and  all
accompanying  collateral documents are complete and authentic and all signatures
thereon are  genuine.  Such  Purchased  Mortgage  Loan is a "closed"  loan fully
funded by Seller and held in Seller's name.

            (qq) Bona Fide Loan. Such Purchased  Mortgage Loan arose from a bona
fide loan, complying with all applicable State and Federal laws and regulations,
to persons  having legal capacity to contract and is not subject to any defense,
set-off or counterclaim.

                                  Schedule 1-9
<PAGE>

            (rr) Other  Encumbrances.  To the best of  Seller's  knowledge,  any
property  subject  to any  security  interest  given  in  connection  with  such
Purchased  Mortgage Loan is not subject to any other  encumbrances  other than a
stated first  mortgage,  if applicable,  and  encumbrances  which may be allowed
under the Acquisition Guidelines.

            (ss)  Description.  Each  Purchased  Mortgage  Loan  conforms to the
description thereof as set forth on the related Custodial Mortgage Loan Schedule
delivered to the Custodian and Buyer.

            (tt) Located in U.S. No collateral  (including,  without limitation,
the related real property and the dwellings thereon and otherwise) relating to a
Purchased  Mortgage Loan is located in any jurisdiction other than in one of the
fifty (50) states of the United States of America or the District of Columbia.

            (uu) Acquisition  Guidelines.  Each Purchased Mortgage Loan has been
originated  in  accordance  with  the  Acquisition   Guidelines  (including  all
supplements or amendments thereto) previously provided to Buyer.

            (vv) Aging.  Such Purchased  Mortgage Loan has not been subject to a
Transaction hereunder for more than 364 days.

            (ww)  Committed  Mortgage  Loans.  Each  Committed  Mortgage Loan is
covered by a Take-out  Commitment,  does not exceed the availability  under such
Take-out  Commitment (taking into  consideration  mortgage loans which have been
purchased by the respective  Take-out Investor under the Take-out Commitment and
mortgage  loan which Seller has  identified to Buyer as covered by such Take-out
Commitment) and conforms to the requirements and the specifications set forth in
such Take-out Commitment and the related regulations, rules, requirements and/or
handbooks of the  applicable  Take-out  Investor and is eligible for sale to and
insurance or guaranty by,  respectively  the  applicable  Take-out  Investor and
applicable  insurer.  Each  Take-out  Commitment  is a legal,  valid and binding
obligation  of Seller  enforceable  against  it in  accordance  with its  terms,
subject  to  applicable  bankruptcy,   insolvency  and  similar  laws  affecting
creditors'  rights  generally  and  subject,  as to  enforceability,  to general
principles  of  equity  (regardless  of  whether  enforcement  is  sought  in  a
proceeding in equity or at law).

            (xx) Primary  Mortgage  Guaranty  Insurance.  Each  Mortgage Loan is
insured  as to  payment  defaults  by a  policy  of  primary  mortgage  guaranty
insurance in the amount required where  applicable,  and by an insurer approved,
by the applicable Take-out Investor,  if applicable,  and all provisions of such
primary mortgage guaranty  insurance have been and are being complied with, such
policy is in full force and effect,  and all premiums due  thereunder  have been
paid.

            (yy) Predatory  Lending  Regulations;  High Cost Loans.  None of the
Mortgage Loans are classified as High Cost Mortgage Loans.

                                 Schedule 1-10
<PAGE>

                                       M-1

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