Document:

EXHIBIT 10.31

                             AMENDMENT NO. 1 TO THE
                       MASTER LOAN AND SECURITY AGREEMENT

            Amendment No. 1, dated as of December 11, 2002 (this "Amendment"),
to the Master Loan and Security Agreement, dated as of August 2, 2002 (the
"Existing Loan Agreement", and as amended hereby the "Loan Agreement"), among
American Home Mortgage Corp. and Marina Mortgage Company, Inc. (each a
"Borrower", collectively, the "Borrowers") and Morgan Stanley Bank (the
"Lender").

                                    RECITALS

            The Borrowers and the Lender are parties to the Existing Loan
Agreement. Capitalized terms used but not otherwise defined herein shall have
the meanings given to them in the Existing Loan Agreement.

            The Borrowers and the Lender have agreed, subject to the terms and
conditions of this Amendment, that the Existing Loan Agreement be amended to add
certain interest-only Mortgage Loans as a type of Eligible Mortgage Loan and to
reflect certain other agreed upon revisions to the terms of the Existing Loan
Agreement.

            Accordingly, the Borrowers and the Lender hereby agree, in
consideration of the mutual premises and mutual obligations set forth herein,
that the Existing Loan Agreement is hereby amended as follows:

SECTION 1.  Amendments.

            (a) Section 1.01 of the Existing Loan Agreement is hereby amended by
deleting the definition of "Applicable Collateral percentage" in its entirety
and substituting in lieu thereof the following new definition:

            "'Applicable Collateral Percentage' shall mean, with respect to each
      Eligible Mortgage Loan, the applicable collateral percentage set forth in
      the chart below opposite the applicable type of Mortgage Loan:

           ----------------------------------------------------------------
                                                  Applicable Collateral
                 Type of Mortgage Loan                  Percentage
           ----------------------------------------------------------------

             Agency Eligible Mortgage Loan                     97%
           ----------------------------------------------------------------

              Alternate 'A' Mortgage Loan                      96%
           ----------------------------------------------------------------

            Conduit Eligible Mortgage Loan                     97%
           ----------------------------------------------------------------

             Interest-Only Mortgage Loans                      97%
           ----------------------------------------------------------------

            (b) Section 1.01 of the Existing Loan Agreement is hereby amended by
deleting the definition of "Collateral Value" in its entirety and substituting
in lieu thereof the following new definition:

            "Collateral Value" shall mean, with respect to each Eligible
Mortgage Loan, the lesser of (a) the Applicable Collateral Percentage of the
Market Value of such Mortgage Loan, and (b) 100% of the outstanding principal
balance of such Mortgage Loan; provided, that the following additional
limitations shall apply:

            (i) The aggregate Collateral Value of all Alternate `A' Mortgage
      Loans included in the Borrowing Base at any time shall not exceed 25% of
      the Maximum Credit at such time;

            (ii) The aggregate Collateral Value of all California Program
      Mortgage Loans included in the Borrowing Base at any time shall not exceed
      $20,000,000;

            (iii) The aggregate Collateral Value of all Interest Only Mortgage
      Loans included in the Borrowing Base at any time shall not exceed
      $30,000,000; and

            (iv) Collateral Value shall be deemed to be zero with respect to
      each Mortgage Loan:

                  (1) in respect of which there is a breach of a representation
            and warranty set forth on Schedule 1 (assuming each representation
            and warranty is made as of the date Collateral Value is determined),

                  (2) in respect of which there is a delinquency in the payment
            of principal and/or interest which continues for a period in excess
            of thirty (30) days (without regard to applicable grace periods),

                  (3) (other than Interest Only Mortgage Loans) which remains
            pledged to the Lender hereunder later than 180 days after the date
            on which it is first included in the Collateral,

                  (4) in respect of any Interest Only Mortgage Loan which
            remains pledged to the Lender hereunder later than 120 days after
            the date on which it is first included in the Collateral,

                  (5) which has been released from the possession of the
            Custodian under the Custodial Agreement for a period in excess of
            eighteen (18) days, or

                  (6) which exceeds the limitation on Collateral Value set forth
            in (i) through (iii) above."

            (c) Section 1.01 of the Existing Loan Agreement is hereby amended by
deleting the definition of "Eligible Mortgage Loan" in its entirety and
substituting in lieu thereof the following new definition:

            "'Eligible Mortgage Loan' shall mean a Mortgage Loan secured by a
first mortgage lien on a one-to-four family residential property (a) as to which
the representations and warranties in Section 6.10 and Part I of Schedule 1
hereof are correct and (b) which is either an Agency Eligible Mortgage Loan, an
Alternate `A' Mortgage Loan, a California Program Mortgage Loan, an Eligible
Cooperative Mortgage Loan, an Interest Only Mortgage Loan, a Jumbo Mortgage
Loan, a MERS Designated Mortgage Loan or a Conduit Eligible Mortgage Loan;
provided, that in no event shall any Eligible Mortgage Loan be a security for
purposes of any securities or blue sky laws."

            (d) Section 1.01 of the Existing Loan Agreement is hereby amended by
inserting the following new definition in alphabetical order:

            "'Interest-Only Mortgage Loan' shall mean a Mortgage Loan that is in
strict compliance with the requirements in the Underwriting Guidelines for
"One-Month and Six-Month Interest Only ARM Products" (as defined in the
Underwriting Guidelines)."

            SECTION 2. Conditions Precedent. This Amendment shall become
effective on the date (the "Amendment Effective Date") on which the following
conditions precedent shall have been satisfied:

            2.1 Delivered Documents. On the Amendment Effective Date, the Lender
shall have received the following documents, each of which shall be satisfactory
to the Lender in form and substance:

            (a) Amendment. This Amendment, executed and delivered by a duly
authorized officer of each Borrower and the Lender;

            (b) RFC Notice Requirement. A certificate from the Borrowers
indicating compliance with the notice requirement with respect to additional
lines of credit contained in the Warehouse Credit and Security Agreement dated
as of December 28, 2001 among American Home Mortgage Corp., Marina Mortgage
Company, Inc. and Residential Funding Corporation or a waiver of such
requirement; and

            (c) Other Documents. Such other documents as the Lender or counsel
to the Lender may reasonably request.

                  2.2 No Default. On the Amendment Effective Date, (i) the
Borrowers shall be in compliance with all the terms and provisions set forth in
the Existing Loan Agreement on its part to be observed or performed, (ii) the
representations and warranties made and restated by the Borrowers pursuant to
Section 3 of this Amendment shall be true and complete on and as of such date
with the same force and effect as if made on and as of such date, and (ii) no
Default or Event of Default shall have occurred and be continuing on such date.

            SECTION 3. Representations and Warranties. Each Borrower hereby
represents and warrants to the Lender that it is in compliance with all the
terms and provisions set forth in the Loan Documents on its part to be observed
or performed, and that no Default or Event of Default has occurred or is
continuing, and hereby confirms and reaffirms the representations and warranties
contained in Section 6 of the Existing Loan Agreement.

            SECTION 4. Limited Effect. Except as expressly amended and modified
by this Amendment, the Existing Loan Agreement shall continue to be, and shall
remain, in full force and effect in accordance with its terms; provided,
however, that reference therein and herein to the "Loan Documents" shall be
deemed to include, in any event, (i) the Existing Loan Agreement, (ii) this
Amendment, (iii) the Note, (iii) the Custodial Agreement, (iv) the Electronic
Tracking Agreement and (v) the Parent Guarantee. Each reference to the Loan
Agreement in any of the Loan Documents shall be deemed to be a reference to the
Loan Agreement as amended hereby.

            SECTION 5. Counterparts. This Amendment may be executed by each of
the parties hereto on any number of separate counterparts, each of which shall
be an original and all of which taken together shall constitute one and the same
instrument.

            SECTION 6. GOVERNING LAW. THIS AMENDMENT SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK WITHOUT REFERENCE
TO THE CHOICE OF LAW PROVISIONS THEREOF.
<PAGE>

            IN WITNESS WHEREOF, the parties hereto have caused this Amendment to
be duly executed and delivered as of the day and year first above written.

                                     BORROWER

                                     AMERICAN HOME MORTGAGE CORP.

                                     By: /s/ Richard D. Silver
                                         ---------------------------
                                         Name:  Richard D. Silver
                                         Title: Senior Vice President-Treasurer

                                     MARINA MORTGAGE COMPANY, INC.

                                     By: /s/ Richard D. Silver
                                         ---------------------------
                                         Name:  Richard D. Silver
                                         Title: Senior Vice President-Treasurer
<PAGE>

                                     LENDER

                                     MORGAN STANLEY  BANK

                                     By: /s/ Christian B. Malone
                                         ---------------------------
                                         Name:  Christian B. Malone
                                         Title: Vice PresidentEXHIBIT 10.35

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

                           MASTER REPURCHASE AGREEMENT

                                     BETWEEN

                       CDC MORTGAGE CAPITAL INC., AS BUYER

                                       AND

                     AMERICAN HOME MORTGAGE CORP., AS SELLER

                           Dated as of April 17, 2002

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

<PAGE>

                                TABLE OF CONTENTS

                                                                            Page
                                                                            ----

1.   APPLICABILITY.............................................................1

2.   DEFINITIONS...............................................................1

3.   INITIATION; TERMINATION..................................................20

4.   MARGIN AMOUNT MAINTENANCE................................................27

5.   INCOME PAYMENTS..........................................................28

6.   REQUIREMENTS OF LAW......................................................29

7.   SECURITY INTEREST........................................................30

8.   PAYMENT, TRANSFER AND CUSTODY............................................31

9.   HYPOTHECATION OR PLEDGE OF PURCHASED ASSETS..............................32

10.  SELLER REPRESENTATIONS...................................................32

11.  COVENANTS OF SELLER......................................................37

12.  EVENTS OF DEFAULT........................................................44

13.  REMEDIES.................................................................46

14.  INDEMNIFICATION AND EXPENSES.............................................48

15.  RECORDING OF COMMUNICATIONS..............................................49

16.  SINGLE AGREEMENT.........................................................49

17.  NOTICES AND OTHER COMMUNICATIONS.........................................50

18.  ENTIRE AGREEMENT; SEVERABILITY...........................................50

19.  NON-ASSIGNABILITY........................................................50

20.  TERMINABILITY............................................................50

21.  GOVERNING LAW............................................................51

22.  SUBMISSION TO JURISDICTION; WAIVERS......................................51

                                      -i-

<PAGE>

23.  NO WAIVERS, ETC..........................................................52

24.  SERVICING................................................................52

25.  INTENT...................................................................53

26.  PERIODIC DUE DILIGENCE REVIEW............................................54

27.  BUYER'S APPOINTMENT AS ATTORNEY-IN-FACT..................................54

28.  MISCELLANEOUS............................................................56

29.  CONFIDENTIALITY..........................................................56

30.  CONFLICTS................................................................57

31.  Set-Off..................................................................57

                                      -ii-

<PAGE>

EXHIBITS

         SCHEDULE 1                 Representations and Warranties Re:
                                    Mortgage Loans

         EXHIBIT I                  Transaction Request

         EXHIBIT II                 Underwriting Guidelines

         EXHIBIT III                Form of Opinion Letter

         EXHIBIT IV                 UCC Filing Jurisdictions

         EXHIBIT V                  Form of Account Agreement

         EXHIBIT VI                 Form of True Sale Certification

         EXHIBIT VII-A              Form of Seller's Release Letter

         EXHIBIT VII-B              Form of Warehouse Lender's Release Letter

         EXHIBIT VIII               Form of Servicer Notice

         EXHIBIT IX                 Form of Request for Additional
                                    Transactions For Excess Margin

                                     -iii-

<PAGE>

                           MASTER REPURCHASE AGREEMENT

            This is a MASTER REPURCHASE AGREEMENT, dated as of April 17, 2002,
between AMERICAN HOME MORTGAGE CORP., a New York corporation ("Seller"), and CDC
MORTGAGE CAPITAL INC., a New York corporation ("Buyer").

1.    APPLICABILITY

      From time to time the parties hereto may enter into transactions
      ("Committed Transactions") in which Seller agrees to transfer to Buyer
      Mortgage Loans against the transfer of funds by Buyer, with a simultaneous
      agreement by Buyer to transfer to Seller such Mortgage Loans on demand by
      Buyer against the transfer of funds by Seller. Additionally, from time to
      time the Buyer is prepared to consider entering into additional
      transactions ("Uncommitted Transactions") in which Seller agrees to
      transfer to Buyer Mortgage Loans against the transfer of funds by Buyer,
      with a simultaneous agreement by Buyer to transfer to Seller such Mortgage
      Loans on demand by Buyer, against the transfer of funds by Seller. Each
      such Committed Transaction and Uncommitted Transaction shall be referred
      to herein as a "Transaction" and shall be governed by this Agreement,
      unless otherwise agreed in writing.

2.    DEFINITIONS

      As used herein, the following terms shall have the following meanings (all
      terms defined in this Section 2 or in other provisions of this Agreement
      in the singular to have the same meanings when used in the plural and vice
      versa). Terms otherwise not defined herein shall have the meanings
      assigned thereto in the Custodial and Disbursement Agreement.

      "Account Agreement" shall mean a letter agreement among Seller, Buyer, and
      the Bank substantially in the form of Exhibit V attached hereto.

      "Act of Insolvency" shall mean, with respect to any Person, (i) the filing
      of a petition, commencing, or authorizing the commencement 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 or consenting to the appointment of a receiver,
      trustee, custodian or similar official for such Person or any substantial
      part of the property of such Person; (iii) the appointment of a receiver,
      conservator, or manager for such Person by any governmental agency or
      authority having the jurisdiction to do so; (iv) the making or offering by
      such Person of a composition with its creditors or a general assignment
      for the benefit of creditors; (v) the admission by such Person 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 Person, or shall have taken any action to displace the
      management of such Person or to curtail its authority in the conduct of
      the business of such Person.

<PAGE>

      "Affiliate" shall mean with respect to any Person, any "affiliate" of such
      Person, as such term is defined in the Bankruptcy Code.

      "Agreement" shall mean this Master Repurchase Agreement, as the same may
      be further amended, supplemented or otherwise modified in accordance with
      the terms hereof.

      "ALTA" shall mean the American Land Title Association.

      "Alt-A Mortgage Loan" shall mean an Eligible Asset which is a Mortgage
      Loan made to a Mortgagor of "A" or "A-" credit quality, which is a secured
      by a lien on a single-family Residential Dwelling and for which the
      related Mortgagor has a FICO score of greater than 600. In no event shall
      any Mortgage Loan be an "Alt-A Mortgage Loan" if the related Mortgagor
      does not have a FICO score of at least 600 as of the date of origination.

      "Alt-A First Mortgage Loan" shall mean an Eligible Asset which is an Alt-A
      Mortgage Loan and a First Lien Mortgage Loan.

      "Alt-A Second Mortgage Loan" shall mean an Eligible Asset which is an
      Alt-A Mortgage Loan and a Second Lien Mortgage Loan.

      "Appraised Value" shall mean 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 (or the related residential dwelling unit in the
      Underlying Mortgaged Property, in the case of a Co-op Loan).

      "Asset Schedule and Exception Report" shall have the meaning assigned
      thereto in the Custodial and Disbursement Agreement.

      "Asset Value" shall mean as of any date of determination with respect to
      (A) each Eligible Asset that is not a Repurchased Mortgage Loan, the
      lesser of (a) the Purchase Percentage applicable to such Eligible Asset
      multiplied by the Market Value of such Mortgage Loan as of such date and
      (b) the outstanding principal balance of such Eligible Asset as of such
      date and (B) with respect to each Repurchased Mortgage Loan, 60% of the
      lesser of (a) the outstanding principal balance of such Eligible Asset as
      of such date and (b) the Repurchased Appraised Value of such Mortgage
      Loan; provided, that, the following additional limitations on Asset Value
      shall apply:

            (1) after giving effect to any requested Transaction, the aggregate
      Asset Value of all Alt-A Mortgage Loans and Sub-Prime Mortgage Loans owned
      hereunder by Buyer as of such date of determination may not exceed the
      Non-Conforming Sub- Limit;

            (2) after giving effect to any requested Transaction, the aggregate
      Asset Value of all Sub-Prime Mortgage Loans owned hereunder by Buyer as of
      such date of determination may not exceed the Sub-Prime Sub-Limit;

            (3) after giving effect to any requested Transaction, the aggregate
      Asset Value of all Sub-Prime Second Lien Mortgage Loans owned hereunder by
      Buyer as of such date of determination may not exceed the Sub-Prime Second
      Lien Sub-Limit;

                                      -2-

<PAGE>

            (4) after giving effect to any requested Transaction, the aggregate
      Asset Value of all Sub-Prime Mortgage Loans made to "C" or "D" credit
      quality Mortgagors owned hereunder by Buyer as of such date of
      determination may not exceed the Sub-Prime Credit Sub-Limit;

            (5) after giving effect to any requested Transaction, the aggregate
      Asset Value of all Sub-Prime Mortgage Loans which are Manufactured Housing
      Mortgage Loans owned hereunder by Buyer as of such date of determination
      may not exceed the Sub-Prime Manufactured Housing Sub-Limit;

            (6) after giving effect to any requested Transaction, the aggregate
      Asset Value of all Sub-Prime Mortgage Loans which are not occupied by the
      related Mortgagor as its primary residence (as determined on the
      origination date) owned hereunder by Buyer as of such date of
      determination may not exceed the Sub-Prime N/O/O Sub-Limit;

            (7) after giving effect to any requested Transaction, the aggregate
      Asset Value of all Repurchased Mortgage Loans owned hereunder by Buyer as
      of such date of determination may not exceed the Repurchased Mortgage Loan
      Sub-Limit;

            (8) after giving effect to any requested Transaction, the aggregate
      Asset Value of all Co-op Loans owned hereunder by Buyer as of such date of
      determination may not exceed the Co-op Sub-Limit;

            (9) after giving effect to any requested Transaction, the aggregate
      Asset Value of all Super Jumbo Mortgage Loans owned hereunder by Buyer as
      of such date of determination may not exceed the Super Jumbo Sub-Limit;

            (10) after giving effect to any requested Transaction, the aggregate
      Asset Value of all Fannie Mae Flex 100 Mortgage Loans owned hereunder by
      Buyer as of such date of determination may not exceed the Fannie Mae Flex
      100 Sub-Limit;

            (11) after giving effect to any requested Transaction, the aggregate
      Asset Value of all Wet-Ink Mortgage Loans owned hereunder by Buyer as of
      such date is determination may not exceed the Wet-Ink Sub-Limit;

            (12) after giving effect to any requested Transaction, the aggregate
      Asset Value of all Co-op Loans that are Super Jumbo Mortgage Loans or
      Jumbo Mortgage Loans owned hereunder by Buyer as of such date of
      determination may not exceed the Co-op Jumbo Sub-Limit;

            (13) with respect to each Check Funded Loan, the Asset Value shall
      be deemed zero until at least one check set forth on the related Check
      Funding Schedule has been presented for payment and paid in accordance
      with the procedures set forth in the Custodial and Disbursement Agreement
      and the Check Disbursement Agreement; provided that for purposes of
      Section 3(n) and Section 4 hereof, the Asset Value shall be equal to no
      more than amounts that have previously been paid in respect of checks with
      respect to such Check Funded Loan; and

                                      -3-

<PAGE>

            (14) the Asset Value shall be deemed to be zero with respect to each
      Mortgage Loan (i) in respect of which there is a breach of a
      representation and warranty set forth in Schedule 1 (assuming each
      representation and warranty is made as of the date the Asset Value is
      determined), (ii) other than with respect to a Repurchased Loan, in
      respect of which there is a delinquency in the payment of principal and/or
      interest which continues for a period in excess of twenty-nine (29)
      calendar days (without regard to any applicable grace periods), (iii)
      which has not been repurchased by Seller by the earlier to occur of (A)
      the Termination Date and (B) except with respect to Repurchased Mortgage
      Loans, the 90th day after the date on which it is first purchased by
      Buyer, and with respect to Repurchased Mortgage Loans, the 180th day after
      the date on which such Mortgage Loan becomes a Repurchased Mortgage Loan,
      (iv) which has been released from the possession of Custodian under the
      Custodial and Disbursement Agreement to Seller for a period in excess of
      twenty (20) calendar days with respect to releases pursuant to Section
      5(c), (v) which has been released from the possession of Custodian under
      the Custodial and Disbursement Agreement to Seller for a period in excess
      of ten (10) calendar days with respect to releases pursuant to Sections
      5(a) and 5(b), (vi) which exceed the Sub-Limit for the related Class or
      otherwise or (vii) which is a Wet-Ink Mortgage Loan, for which Custodian
      has failed to receive the related Mortgage Documents by the tenth 10th
      Business Day following the applicable Purchase Date.

      "Assignment of Mortgage" shall mean, with respect to any Mortgage, 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 assignment of the
      Mortgage to Buyer.

      "Bank" shall mean Deutsche Bank National Trust Company, a national banking
      association, and its successors in interest, or such other depository
      institution as may be acceptable to Buyer in its sole discretion, and
      their respective successors in interest.

      "Bank Charter Event" shall mean the date on which American Home Mortgage
      Holdings, Inc. acquires Valley Bancorp. Inc. and its wholly owned
      subsidiary, Valley Bank of Maryland.

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

      "Business Day" shall mean any day other than (i) a Saturday or Sunday or
      (ii) a day on which banks in the State of New York (or state in which any
      of Custodian, Disbursement Agent, Seller or Buyer is located) is
      authorized or obligated by law or executive order to be closed.

      "Buyer" shall mean CDC Mortgage Capital Inc., a New York corporation, and
      its successors in interest and assigns.

      "Capital Lease Obligations" shall mean, 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

                                      -4-

<PAGE>

      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.

      "Cash" shall mean all cash and Cash Equivalents, as shown on the balance
      sheet of the Seller prepared in accordance with GAAP.

      "Cash Equivalents" shall mean (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 any commercial
      bank having capital and surplus in excess of $500,000,000, (c) repurchase
      obligations 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 Standard and Poor's Ratings Group
      ("S&P") or P-1 or the equivalent thereof by Moody's Investors Service,
      Inc. ("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 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.

      "Check Disbursement Account" shall have the meaning specified in the Check
      Disbursement Agreement.

      "Check Disbursement Agreement" shall mean the Letter Agreement, dated as
      of the date hereof, among Seller, Buyer, Disbursement Agent, Deutsche Bank
      Trust Company Delaware and Deutsche Bank Trust Company Americas as may be
      amended from time to time.

      "Class" shall mean each group of Mortgage Loans where each Mortgage Loan
      within such group qualifies as at least one of the following: "Conforming
      Mortgage Loan", "Jumbo Mortgage Loan", "Alt-A First Mortgage Loan", "Alt-A
      Second Mortgage Loan", "Sub-Prime First Mortgage Loan", "Sub-Prime Second
      Mortgage Loan", "Wet-Ink Mortgage Loan" or "Repurchased Mortgage Loan";
      provided, that a Mortgage Loan may be within more than one Class as of any
      date of determination.

      "Code" shall mean the Internal Revenue Code of 1986, as amended from time
      to time.

                                      -5-

<PAGE>

      "Collection Account" shall mean the account established by the Bank
      subject to an Account Agreement, into which all Income shall be deposited.

      "Combined Loan-to-Value Ratio or CLTV" shall mean with respect to any
      Second Lien Mortgage Loan, the sum of the original principal balance of
      such Second Lien Mortgage Loan and the outstanding principal balance of
      any related first lien loan as of the date of origination of such Second
      Lien Mortgage Loan, divided by the lesser of (a) the Appraised Value of
      the related Mortgage Property as of the date of origination of such Second
      Lien Mortgage Loan and (b) if the related Mortgaged Property was purchased
      within twelve (12) months of the origination of such Second Lien Mortgage
      Loan, the purchase price of such Mortgaged Property.

      "Committed Transaction" as defined in the recitals hereto.

      "Commitment Fee" shall mean the fee payable by Seller to Buyer pursuant to
      Section 3(a)(7) equal to 0.075% of the Maximum Committed Amount.

      "Commonly Controlled Entity" shall mean an entity, whether or not
      incorporated, which is under common control with Seller within the meaning
      of Section 4001 of ERISA or is part of a group which includes Seller and
      which is treated as a single employer under Section 414 of the Code.

      "Confirmation" shall have the meaning specified in Section 3(c).

      "Conforming Mortgage Loan" shall mean an Eligible Asset which is insured
      by, and meets all criteria of, Fannie Mae, Freddie Mac, the FHA or the VA
      which is secured by a first lien on the related Mortgaged Property.

      "Co-op" shall mean a private, cooperative housing corporation, having only
      one class of stock outstanding, which owns or leases land and all or part
      of a building or buildings, including apartments, spaces used for
      commercial purposes and common areas therein and whose board of directors
      authorizes the sale of stock and the issuance of a Co-op Lease.

      "Co-op Lease" shall mean with respect to a Co-op Loan, the lease with
      respect to a dwelling unit occupied by the Mortgagor and relating to the
      stock allocated to the related dwelling unit.

      "Co-op Loan" shall mean an Eligible Asset that is a Conforming Mortgage
      Loan, except with respect to the outstanding principal balance at
      origination, secured by the pledge of stock allocated to a dwelling unit
      in a Co-op and a collateral assignment of the related Co-op Lease.

      "Co-op Security Agreement" shall mean the agreement creating a first lien
      security interest in the stock allocated to a dwelling unit in the
      residential cooperative housing corporation that was pledged to secure
      such Co-op Loan and the related Co-op Lease.

      "Co-op Sub-Limit" shall mean $16,000,000.

                                      -6-

<PAGE>

      "Co-op Jumbo Sub-Limit" shall mean $8,000,000.

      "Custodial and Disbursement Agreement" shall mean that custodial and
      disbursement agreement, dated as of the date hereof, by and among Buyer,
      Seller, Disbursement Agent and Custodian, as the same shall be modified
      and supplemented and in effect from time to time.

      "Custodial Identification Certificate" shall have the meaning assigned
      thereto in the Custodial and Disbursement Agreement.

      "Custodian" shall mean Deutsche Bank National Trust Company, a national
      banking association, and its successors in interest, as custodian under
      the Custodial and Disbursement Agreement, and any successor Custodian
      under the Custodial and Disbursement Agreement.

      "DDA Account" shall have the meaning specified in the Check Disbursement
      Agreement.

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

      "Disbursement Agent" shall mean Deutsche Bank National Trust Company, a
      national banking association, and its successors in interest, as
      disbursement agent under the Custodial and Disbursement Agreement, and any
      successor Disbursement Agent under the Custodial and Disbursement
      Agreement.

      "Dollars" and "$" shall mean lawful money of the United States of America.

      "Due Diligence Review" shall mean the performance by Buyer of any or all
      of the reviews permitted under Section 26 with respect to any or all of
      the Mortgage Loans, as desired by Buyer from time to time.

      "Effective Date" shall mean the date upon which the conditions precedent
      set forth in Section 3(a) shall have been satisfied.

      "Electronic Transmission" shall mean the delivery of information in an
      electronic format acceptable to the applicable recipient thereof.

      "Eligible Asset" shall mean a Mortgage Loan, including a Wet-Ink Mortgage
      Loan, (i) as to which the representations and warranties in Schedule 1
      attached hereto are true and correct, (ii) which is underwritten strictly
      in accordance with Seller's Underwriting Guidelines, a copy of which is
      attached hereto as Exhibit II or with such exceptions as Buyer shall
      approve pursuant to Section 3(b)(9) or meets all underwriting criteria of,
      Fannie Mae, Freddie Mac, the FHA or the VA, and (iii) which is secured by
      a Residential Dwelling.

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

                                      -7-

<PAGE>

      "ERISA Affiliate" shall mean 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 Instruction Letter" shall have the meaning assigned thereto in the
      Custodial and Disbursement Agreement.

      "Eurodollar Rate" shall mean, with respect to each day a Transaction is
      outstanding (and reset on each day a Transaction is outstanding), the rate
      per annum equal to the rate appearing at page 5 of the Telerate Screen as
      one-month LIBOR at or about 9:00 a.m., New York City time, on such date
      (and if such date is not a Business Day, the Eurodollar Rate in effect on
      the Business Day immediately preceding such date), and if such rate shall
      not be so quoted, the average rate per annum at which three mutually
      acceptable banks are offered Dollar deposits at or about 8:00 a.m., New
      York City time, on such date by prime banks in the interbank eurodollar
      market where the eurodollar and foreign currency exchange operations in
      respect of its Transactions are then being conducted for delivery on such
      day for a period of thirty (30) days and in an amount comparable to the
      amount of the Transactions to be outstanding on such day. The Eurodollar
      Rate shall be reset by Buyer as described above and Buyer's determination
      of Eurodollar Rate shall be conclusive upon the parties absent manifest
      error on the part of Buyer.

      "Event of Default" has the meaning specified in Section 12.

      "Excess Margin" has the meaning specified in Section 3(q).

      "Existing Financing Facilities" shall mean the Morgan Facility, the UBS
      Warburg Facility, the RFC Facility and the Freddie Facility.

      "Fannie Mae" shall mean the Federal National Mortgage Association, and its
      successors in interest.

      "Fannie Mae Flex 100 Mortgage Loan" shall mean an Eligible Asset which
      meets all criteria of the Fannie Mae Flex 100 program.

      "Fannie Mae Flex 100 Sub-Limit" shall mean $2,000,000.

      "Foreclosed Loan" shall mean a loan the property securing which has been
      foreclosed upon by Seller.

      "Freddie Facility" means the financing facility between the Seller and
      Freddie Mac, as may be amended from time to time, and all other documents
      or agreements executed in connection therewith, or replacement facilities
      with substantially similar terms (including, but not limited to, amounts
      and rates) with financial institutions approved by Buyer.

                                      -8-

<PAGE>

      "Freddie Mac" shall mean the Federal Home Loan Mortgage Corporation, and
      its successors in interest.

      "GAAP" shall mean generally accepted accounting principles as in effect
      from time to time in the United States.

      "Governmental Authority" shall mean any nation or government, any state or
      other political subdivision thereof, any entity exercising executive,
      legislative, judicial, regulatory or administrative functions of or
      pertaining to government and any court or arbitrator having jurisdiction
      over Seller, any of its Subsidiaries or any of their properties.

      "Guarantee" shall mean, as to any Person, any obligation of such Person
      directly or indirectly guaranteeing any Indebtedness of any other Person
      or in any manner providing for the payment of any Indebtedness of any
      other Person or otherwise protecting the holder of such Indebtedness
      against loss (whether by virtue of partnership arrangements, by agreement
      to keep-well another Person, to purchase assets, goods, securities or
      services, or to agree to take-or-pay arrangement or otherwise); provided
      that the term "Guarantee" shall not include (i) endorsements for
      collection or deposit in the ordinary course of business, or (ii)
      obligations to make servicing advances for delinquent taxes and insurance,
      or other obligations in respect of a Mortgaged Property, or other
      principal and interest advances made in the ordinary course of servicing
      the Mortgage Loans. The amount of any Guarantee of a Person shall be
      deemed to be an amount equal to the stated or determinable amount of the
      primary obligation in respect of which such Guarantee is made or, if not
      stated or determinable, the maximum reasonably anticipated liability in
      respect thereof as determined by such Person in good faith. The terms
      "Guarantee" and "Guaranteed" used as verbs shall have correlative
      meanings.

      "Guarantor" shall mean American Home Mortgage Holdings, Inc. a Delaware
      corporation, and its successors in interest.

      "Guaranty" shall mean the Guarantee, dated as of the date hereof, made by
      Guarantor in favor of Buyer, as may be amended from time to time.

      "Income" shall mean, with respect to any Mortgage Loan at any time, all
      collections and proceeds on or in respect of the Mortgage Loans,
      including, without limitation, any principal thereof then payable and all
      interest or other distributions payable thereon less any related servicing
      fee(s) charged by Servicer.

      "Indebtedness" shall mean, 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

                                      -9-

<PAGE>

      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 account of such
      Person; (e) obligations of such Person under repurchase agreements,
      sale/buy-back agreements or like arrangements; (f) Indebtedness of others
      Guaranteed by such Person; (g) all obligations of such Person incurred in
      connection with the acquisition or carrying of fixed assets by such
      Person; (h) Indebtedness of general partnerships of which such Person is
      secondarily or contingently liable (other than by endorsement of
      instruments in the course of collection), whether by reason of any
      agreement to acquire such indebtedness to supply or advance sums or
      otherwise; and (i) Capital Lease Obligations of such Person.

      "Interest Rate Protection Agreement" shall mean, with respect to any or
      all of the Mortgage Loans, any short sale of US Treasury securities, or
      futures contract, or options related contract, or interest rate swap, cap
      or collar agreement or similar arrangement providing for protection
      against fluctuations in interest rates or the exchange of nominal interest
      obligations, either generally or under specific contingencies and
      acceptable to Buyer.

      "Jumbo Mortgage Loans" shall mean an Eligible Asset which meets all
      criteria of Fannie Mae or Freddie Mac except that the outstanding
      principal balance thereof at origination was in excess of Fannie Mae or
      Freddie Mac's guidelines which is secured by a first lien on the related
      Mortgaged Property.

      "Late Payment Fee" has the meaning specified in Section 5(b).

      "Lien" shall mean 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 outstanding principal amount of such Mortgage Loan at the
      time of origination to the lesser of (a) the Appraised Value of the
      related Mortgaged Property at origination of such Mortgage Loan and (b) if
      the related Mortgaged Property was purchased within twelve (12) months of
      the origination of such Mortgage Loan, the purchase price of the related
      Mortgaged Property.

      "Margin Base" shall mean the aggregate Asset Value of all Purchased Assets
      which are Eligible Assets.

      "Margin Deficit" has the meaning specified in Section 4.

      "Market Value" shall mean, as of any date in respect of any Mortgage Loan,
      the price at which such Mortgage Loan could readily be sold as determined
      by Buyer, which price may be determined to be zero. Buyer's determination
      of Market Value shall be conclusive upon the parties absent manifest error
      on the part of Buyer.

      "Material Adverse Effect" shall mean a material adverse effect on (a) the
      Property, business, operations, financial condition or prospects of Seller
      or Guarantor, (b) the ability of Seller or Guarantor to perform its

                                      -10-

<PAGE>

      respective obligations under any of the Repurchase Documents to which it
      is a party, (c) the validity or enforceability of any of the Repurchase
      Documents, (d) the rights and remedies of Buyer under any of the
      Repurchase Documents, (e) the timely payment of any amounts payable under
      the Repurchase Documents, or (f) the Asset Value of the Purchased Assets.

      "Maximum Amount" shall mean $300,000,000.

      "Maximum Committed Amount" shall mean $200,000,000.

      "Maximum Uncommitted Amount" shall mean $100,000,000.

      "Morgan Facility" means the Master Loan and Security Agreement, dated as
      of June 21, 2000, by and among American Home Mortgage Corp., Marina
      Mortgage Company, Inc., and Morgan Stanley Dean Witter Mortgage Capital
      Inc., as may be amended from time to time, and all other documents or
      agreements executed in connection therewith, or replacement facilities
      with substantially similar terms (including, but not limited to, amounts
      and rates) with financial institutions approved by Buyer.

      "Mortgage" shall mean with respect to a Mortgage Loan that is not a Co-op
      Loan, the mortgage, deed of trust or other instrument securing a Mortgage
      Note, which creates a first lien or second lien on a fee simple
      Residential Dwelling securing the Mortgage Note and with respect to a
      Co-op Loan, the Co-op Security Agreement.

      "Mortgage File" shall have the meaning assigned thereto in the Custodial
      and Disbursement Agreement.

      "Mortgage Loan" shall mean a mortgage loan originated in accordance with
      the Underwriting Guidelines which Custodian has been instructed to hold
      for Buyer pursuant to the Custodial and Disbursement Agreement, including
      any Wet-Ink Mortgage Loan listed on a Transaction Request, and which
      Mortgage Loan includes, without limitation, (i) a Mortgage Note and
      related Mortgage, and (ii) all right, title and interest of Seller in and
      to the Mortgaged Property covered by such Mortgage.

      "Mortgage Note" shall mean the original executed promissory note or other
      evidence of the indebtedness of a Mortgagor with respect to a Mortgage
      Loan.

      "Mortgaged Property" shall mean, with respect to a Mortgage Loan that is
      not a Co-op Loan, a fee simple interest in the real property (including
      all improvements, buildings, fixtures, building equipment and personal
      property thereon and all additions, alterations and replacements made at
      any time with respect to the foregoing) and all other collateral securing
      repayment of the debt evidenced by a Mortgage Note. With respect to a
      Co-op Loan, the stock allocated to a dwelling unit in the residential
      cooperative housing corporation that was pledged to secure such Co-op Loan
      and the related Co-op Lease.

      "Mortgagee" shall mean the record holder of a Mortgage Note secured by a
      Mortgage.

                                      -11-

<PAGE>

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

      "Multiemployer Plan" shall mean 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.

      "Net Income" shall mean, for any period, the net income of Seller for such
      period as determined in accordance with GAAP.

      "Non-Conforming Sub-Limit" shall mean $45,000,000.

      "Payment Calculation Date" shall mean the tenth (10th) day of each month.

      "Payment Date" shall mean two (2) Business Days after the Payment
      Calculation Date.

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

      "Periodic Advance Repurchase Payment" has the meaning specified in Section
      5(b).

      "Person" shall mean any individual, corporation, company, voluntary
      association, partnership, joint venture, limited liability company, trust,
      unincorporated association or government (or any agency, instrumentality
      or political subdivision thereof).

      "Plan" shall mean 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" shall mean, in respect of any day a Transaction is
      outstanding or any other amount under this Agreement or any other
      Repurchase Document that is not paid when due to Buyer at the stated
      Repurchase Date or otherwise when due (a "Post-Default Day"), a rate per
      annum on a 360 day per year basis during the period from and including the
      due date to but excluding the date on which such amount is paid in full
      equal to 4% per annum plus the Prime Rate on such Post-Default Day.

      "Price Differential" means, with respect to any Transaction hereunder as
      of any date, the aggregate amount obtained by daily application of the
      Pricing Rate for such Transaction to the Purchase Price for such
      Transaction on a 360 day per year basis 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 (reduced by
      any amount of such Price Differential previously paid by Seller to Buyer
      with respect to such Transaction).

      "Pricing Rate" shall mean with respect to any Class of Mortgage Loans and
      any date of determination a rate per annum equal to the sum of (a) the
      Eurodollar Rate applicable on such date plus (b) the Pricing Spread for
      such Class applicable on such date.

                                      -12-

<PAGE>

      "Pricing Spread" shall mean (a) with respect to each Committed Transaction
      with respect to any Class of Mortgage Loan, the rate per annum
      corresponding to such Class as set forth in the table below:

                      CLASS                                 PRICING SPREAD
      ---------------------------------------        ---------------------------
      Conforming Mortgage Loan                                   0.75%

      Jumbo Mortgage Loan                                        0.75%

      Alt-A First Lien Mortgage Loan                             0.85%
      Alt-A Second Lien Mortgage Loan                            0.85%
      Sub-Prime First Lien Mortgage Loan                         0.95%
      Sub-Prime Second Lien Mortgage Loan                        0.95%
      Wet-Ink Mortgage Loans                                     1.00%
      Repurchased Loans                                          1.75%

      and (b) with respect to each Uncommitted Transaction, a percentage to be
      determined by Buyer in its sole discretion; provided, that should a
      Mortgage Loan qualify for more than one Class as of any date of
      determination, then the Pricing Spread, subject to clause (b), shall be
      the Pricing Spread of the Class for which such Mortgage Loan qualifies
      that produces the greatest Pricing Rate.

      "Prime Rate" shall mean the prime rate announced to be in effect from time
      to time, as published as the average rate in The Wall Street Journal.

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

      "Purchase Agreement" shall mean any purchase agreement by and between
      Seller and any third party, including without limitation, any Affiliate of
      Seller, pursuant to which Seller has purchased assets subsequently sold to
      Buyer hereunder.

      "Purchase Date" shall mean the date on which Purchased Assets are
      transferred by Seller to Buyer or its designee (including Custodian).

      "Purchase Percentage" shall mean, with respect to each Committed
      Transaction with respect to any Class of Mortgage Loan, the applicable
      percentage corresponding to such Class as set forth in the table below:

                                      -13-

<PAGE>

                                                           PURCHASE
                     CLASS                                PERCENTAGE
      ------------------------------------               ------------
      Conforming Mortgage Loan                              98%

      Jumbo Mortgage Loan                                   98%

      Alt-A First Lien Mortgage Loan                        98%
      Alt-A Second Lien Mortgage Loan                       95%
      Sub-Prime First Lien Mortgage Loan                    98%
      Sub-Prime Second Lien Mortgage Loan                   95%

      provided that with respect to each Uncommitted Transaction, such
      percentage as is acceptable to Buyer in its sole discretion and set forth
      in the related Confirmation; provided further that should a Mortgage Loan
      qualify for more than one Class, then the Purchase Percentage, subject to
      the preceding proviso, shall be the Purchase Percentage of the Class for
      which such Mortgage Loan qualifies which produces the lowest percentage.

      "Purchase Price" shall mean on each Purchase Date, the price at which
      Purchased Assets are transferred by Seller to Buyer or its designee
      (including Custodian) which shall equal the Asset Value for such Purchased
      Assets on the Purchase Date.

      "Purchased Assets" shall mean the Mortgage Loans sold by Seller to Buyer
      in a Transaction.

      "Purchased Items" has the meaning specified in Section 7.

      "Qualified Originator" means an originator of Mortgage Loans acceptable to
      Buyer in its sole discretion.

      "Regulations T, U and X" shall mean Regulations T, U and X of the Board of
      Governors of the Federal Reserve System (or any successor), as the same
      may be modified and supplemented and in effect from time to time.

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

      "Reportable Event" shall mean any of the events set forth in Section
      4043(b) of ERISA or a successor provision thereof, other than those events
      as to which the thirty day notice period is waived under subsections .13,
      .14, .16, .18, .19 or .20 of PBGC Reg. ss. 2615 or one or more successor
      provision thereof.

                                      -14-

<PAGE>

      "Repurchase Date" shall mean the date on which Seller is to repurchase the
      Purchased Assets from Buyer as specified in the related Confirmation
      including any date determined by application of the provisions of Sections
      3 or 13 which date shall be specified as "open" unless otherwise requested
      by Seller and agreed by Buyer; provided that in no event shall the
      Repurchase Date be in excess of 364 days after the Purchase Date.

      "Repurchased Appraised Value" shall mean the value set forth in an
      appraisal made no earlier than 30 days prior to the Purchase Date of a
      Repurchased Mortgage Loan by an appraiser satisfactory to Buyer in its
      sole discretion, as the value of the Mortgaged Property.

      "Repurchased Mortgage Loan" shall mean an Eligible Asset with a current
      outstanding principal balance not in excess of $750,000 which is a
      Conforming Mortgage Loan, a Jumbo Mortgage Loan, an Alt-A First Lien
      Mortgage Loan or a Sub-Prime First Mortgage Loan but in each case is not a
      Wet-Ink Mortgage Loan or a Second Lien Mortgage Loan, which has previously
      been sold to a warehouse lender under a gestation or similar facility and
      is required to be repurchased thereunder by the Seller for which Seller
      has obtained an appraisal by an appraiser satisfactory to Buyer in its
      sole discretion not earlier than 30 days prior to the requested Purchase
      Date for such Mortgage Loan. In no event shall Buyer be required to
      purchase a "Repurchased Mortgage Loan" (a) unless Seller has delivered to
      Buyer an appraisal meeting the criteria in the preceding sentence, (b) if
      such Mortgage Loan is the subject of a contested foreclosure, (c) if such
      Mortgage Loan has an obligor that has filed for bankruptcy relief, or (d)
      if such Mortgage Loan is the subject of any fraud or suspected fraud on
      the part of the obligor thereunder.

      "Repurchased Mortgage Loan Sub-Limit" shall mean $4,000,000; provided
      however, that if the aggregate Purchase Price of all Transactions
      outstanding hereunder on such date of determination is less than
      $75,000,000 after giving effect to any requested Transactions, then the
      Repurchased Mortgage Loan Sub-Limit shall mean 2% of the aggregate
      Purchase Price of all Transactions outstanding hereunder on such date of
      determination.

      "Repurchase Documents" shall mean this Agreement, the Custodial and
      Disbursement Agreement, the Account Agreement, the Check Disbursement
      Agreement and the Guaranty.

      "Repurchase Obligations" shall have the meaning specified in Section 7(b).

      "Repurchase Price" means the price at which Purchased Assets are to be
      transferred from Buyer or its designee (including Custodian) 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 Price Differential as of the date of such determination
      decreased by all cash, Income and Periodic Advance Repurchase Payments
      (including Late Payment Fees, if any) actually received by Buyer pursuant
      to Sections 5(a) or 5(b), respectively.

      "Request for Additional Transactions for Excess Margin" shall have the
      meaning specified in Section 3(q)(1).

                                      -15-

<PAGE>

      "Requirement of Law" shall mean as to any Person, the certificate of
      incorporation and by-laws or other organizational or governing documents
      of such Person, and any law, treaty, rule or regulation or determination
      of an arbitrator or a court or other Governmental Authority, in each case
      applicable to or binding upon such Person or any of its property or to
      which such Person or any of its property is subject.

      "Residential Dwelling" shall mean any one of the following: (i) a detached
      single family dwelling, (ii) a two-to-four family dwelling, (iii) a
      co-operative unit, (iv) a unit in a condominium project, or (v) a detached
      single family dwelling in a planned unit development. Mortgaged Properties
      that consist of the following property types are not Residential
      Dwellings: (a) log homes, (b) earthen homes, (c) underground homes, (d)
      mobile homes, (e) any dwelling situated on more than ten acres of property
      and (f) any dwelling situated on a leasehold estate.

      "Responsible Officer" shall mean, as to any Person, the chief executive
      officer, the chief financial officer, the treasurer or the chief operating
      officer of such Person.

      "RFC Facility" means the Warehousing Credit and Security Agreement, dated
      as of December 19, 2001, between American Home Mortgage Corp., Marina
      Mortgage Company, Inc. and Residential Funding Corporation, as may be
      amended from time to time, and all other documents or agreements executed
      in connection therewith, or replacement facilities with substantially
      similar terms (including, but not limited to, amounts and rates) with
      financial institutions approved by Buyer.

      "Second Lien Mortgage Loan" shall mean an Eligible Asset secured by a lien
      on the Mortgaged Property, which is subject to one prior lien on such
      Mortgaged Property.

      "Security Agreement" shall mean 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" shall mean American Home Mortgage Corp., a New York corporation,
      and its successors in interest.

      "Seller Asset Schedule" shall have the meaning assigned thereto in the
      Custodial and Disbursement Agreement.

      "Seller-Related Obligations" shall mean any obligations of Seller
      hereunder and under any other arrangement between Seller or an Affiliate
      of Seller on the one hand and Buyer or an Affiliate of Buyer on the other
      hand.

      "Servicer" shall have the meaning specified in Section 24.

                                      -16-

<PAGE>

      "Servicer Account" shall mean any account established by Servicer in
      connection with the servicing of the Mortgage Loans.

      "Servicer Notice" shall mean the notice from Seller to Servicer,
      substantially in the form of Exhibit VIII attached hereto.

      "Servicing Agreement" has the meaning specified in Section 24.

      "Servicing File" means with respect to each Mortgage Loan, the file
      retained by Seller consisting of originals of all documents in the
      Mortgage File which are not delivered to a Custodian and copies of all
      documents in the Mortgage File set forth in Section 2 of the Custodial and
      Disbursement Agreement.

      "Servicing Records" has the meaning specified in Section 24.

      "Settlement Agent" shall mean, with respect to any Transaction, the entity
      approved by Buyer, in its sole discretion, which may be a title company,
      escrow company or attorney in accordance with local law and practice in
      the jurisdiction where the related Wet-Ink Mortgage Loan is being
      originated, to which the proceeds of such Transaction are to be wired
      pursuant to Section 3.

      "Sub-Limit" shall mean each of the Non-Conforming Sub-Limit, the Sub-Prime
      Sub-Limit, the Sub-Prime Second Lien Sub-Limit, the Sub-Prime Credit
      Sub-Limit, the Sub-Prime Manufactured Housing Sub-Limit, the Sub-Prime
      N/O/O Sub-Limit, the Co-op Sub-Limit, the Fannie Mae Flex 100 Sub-Limit,
      Super Jumbo Sub-Limit and the Repurchased Mortgage Loan Sub-Limit.

      "Sub-Prime Credit Sub-Limit" shall mean $3,000,000.

      "Sub-Prime First Mortgage Loan" shall mean an Eligible Asset which is a
      Sub-Prime Mortgage Loan and a First Lien Mortgage Loan.

      "Sub-Prime Manufactured Housing Sub-Limit" shall mean $2,000,000.

      "Sub-Prime Mortgage Loan" shall mean an Eligible Asset which is a Mortgage
      Loan made to a Mortgagor of less than "A-" credit quality secured by a
      lien on a single-family Residential Dwelling.

      "Sub-Prime N/O/O Sub-Limit" shall mean $3,000,000.

      "Sub-Prime Second Lien Sub-Limit" shall mean $5,000,000.

      "Sub-Prime Second Mortgage Loan" shall mean an Eligible Asset which is a
      Sub-Prime Mortgage Loan and a Second Lien Mortgage Loan.

      "Sub-Prime Sub-Limit" shall mean $21,000,000.

                                      -17-

<PAGE>

      "Subsidiary" shall mean, with respect to any Person, any corporation,
      partnership, limited liability company 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, limited liability company 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" " shall mean an Eligible Asset which is a
      Jumbo Mortgage Loan with an outstanding principal balance at origination
      of greater than or equal to $750,000.

      "Super Jumbo Sub-Limit" " shall mean $5,000,000.

      "Tangible Net Worth" shall mean as to any Person, as of a particular date,

            (a) all amounts which would be included under capital on a balance
      sheet of such Person at such date, determined in accordance with GAAP,
      less

            (b) (i) amounts owing to such Person from Affiliates, or from
      officers, employees, partners, members, directors, shareholders or other
      Persons similarly affiliated with such Person or its respective
      Affiliates, (ii) intangible assets, and (iii) the value of REO Property
      and Foreclosed Loans.

      "Termination Date" shall mean the date which is 364 days from the date
      hereof which shall be April 17, 2003 or such earlier date on which this
      Agreement shall terminate in accordance with the provisions hereof or by
      operation of law, as may be extended pursuant to Section 3(m).

      "Termination Fee" shall mean a fee payable by Seller to Buyer in
      accordance with Section 20 hereof equal to 0.10% per annum on the Maximum
      Committed Amount for the period commencing on the date of such termination
      through and including April 17, 2003.

      "Test Period" shall have the meaning specified in Section 11(m).

      "Total Indebtedness" shall mean with respect to any Person, for any
      period, the aggregate Indebtedness of such Person during such period less
      the amount of any nonspecific balance sheet reserves maintained in
      accordance with GAAP.

      "Transaction" has the meaning specified in Section 1.

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

                                      -18-

<PAGE>

      "True Sale Certification" shall mean a true sale certification in the form
      of Exhibit VI attached hereto.

      "Trust Receipt" shall mean a trust receipt issued by Custodian to Buyer
      confirming Custodian's possession of certain Mortgage Files which are held
      by Custodian for the benefit of Buyer or the registered holder of such
      trust receipt.

      "UBS Warburg Facility" means the Mortgage Loan Purchase Agreement, dated
      February 26, 1999, between UBS Warburg Real Estate Securities Inc. as
      successor to Paine Webber Real Estate Securities Inc. and American Home
      Mortgage, the Mortgage Loan Repurchase Agreement, dated February 26, 1999,
      between UBS Warburg Real Estate Securities Inc. and American Home
      Mortgage, as amended, the Mortgage Loan Custodial Agreement, dated
      February 26, 1999, between UBS Warburg Real Estate Securities Inc. and
      American Home Mortgage, each as may be amended from time to time, and all
      other documents or agreements executed in connection therewith, or
      replacement facilities with substantially similar terms (including, but
      not limited to, amounts and rates) with financial institutions approved by
      Buyer.

      "Uncommitted Transaction" as defined in the recitals hereto.

      "Underlying Mortgaged Property" shall mean with respect to each Co-op
      Loan, the underlying real property owned by the related residential
      cooperative housing corporation.

      "Underwriting Guidelines" shall mean (i) with respect to each Mortgage
      Loan other than a Conforming Mortgage Loan or a Jumbo Mortgage Loan, the
      underwriting guidelines delivered by Seller to Buyer on or prior to the
      Effective Date and as may be modified or supplemented from time to time
      thereafter as approved by Buyer in its sole discretion attached hereto as
      Exhibit II and (ii) with respect to each Conforming Mortgage Loan and
      Jumbo Mortgage Loan, the guidelines set forth in the applicable guide
      published by Fannie Mae, Freddie Mac, the FHA or the VA setting forth the
      requirements each Mortgage Loan needs to satisfy in order to be eligible
      for purchase or insurance by Fannie Mae, Freddie Mac, the FHA or the VA,
      as applicable, or any other set of criteria established by Fannie Mae,
      Freddie Mac, the FHA or the VA, as applicable, that a Mortgage Loan must
      satisfy in order to be eligible for purchase or insurance by Fannie Mae,
      Freddie Mac, the FHA or the VA, as applicable, in each case, except with
      respect to the outstanding principal balance of a Jumbo Mortgage Loan.

      "Uniform Commercial Code" or "UCC" shall mean the Uniform Commercial Code
      as in effect on the date hereof in the State of New York; provided that if
      by reason of mandatory provisions of law, the perfection or the effect of
      perfection or non-perfection of the security interest in any Purchased
      Items is governed by the Uniform Commercial Code as in effect in a
      jurisdiction other than New York, "Uniform Commercial Code" shall mean the
      Uniform Commercial Code as in effect in such other jurisdiction for
      purposes of the provisions hereof relating to such perfection or effect of
      perfection or non-perfection.

                                      -19-

<PAGE>

      "VA" shall mean the Veterans Administration, an agency of the United
      States of America, or any successor thereto including the Administrator of
      Veterans Affairs.

      "Wet-Ink Mortgage Loan" shall mean an Eligible Asset which is sold to
      Buyer simultaneously with the origination thereof by Seller, which
      origination is in accordance with the Underwriting Guidelines and is
      funded in part or in whole with proceeds of the sale of the Eligible Asset
      to Buyer advanced directly to a Settlement Agent.

      "Wet-Ink Sub-Limit" shall mean an amount equal to $75,000,000.

3.    INITIATION; TERMINATION

(a)   Conditions Precedent to Effective Date. It is a condition precedent to the
      Effective Date hereof, and Buyer's obligations hereunder are subject to
      the satisfaction of the condition precedent that Buyer shall have received
      from Seller any fees and expenses payable hereunder, and all of the
      following documents, each of which shall be satisfactory in form and
      substance to Buyer and its counsel:

      (1) The following Repurchase Documents delivered to Buyer:

                        (A) Master Repurchase Agreement. This Master Repurchase
                  Agreement duly completed and executed by the parties thereto.
                  In addition, Seller shall have taken such other action as
                  Buyer shall have requested in order to perfect the security
                  interests created pursuant to this Agreement, including filing
                  of UCC financing statements in form and substance satisfactory
                  to Buyer;

                        (B) Custodial and Disbursement Agreement. The Custodial
                  and Disbursement Agreement, duly executed and delivered by
                  each party thereto. In addition, Seller shall have taken such
                  other action as Buyer shall have requested in order to
                  transfer the Purchased Assets pursuant to this Agreement;

                        (C) Guarantee. A Guarantee of all obligations of Seller
                  hereunder, duly executed and delivered by the Guarantor in
                  favor of Buyer;

                        (D) Account Agreement. An Account Agreement, duly
                  executed and delivered by the parties thereto;

                        (E) Consents and Waivers. Any and all consents and
                  waivers required under the Existing Financing Facilities; and

                        (F) UCC Financing Statements. UCC Financing Statements
                  naming Seller as Debtor and Buyer as Secured Party and
                  describing the Purchased Items.

                                      -20-

<PAGE>

      (2)   Opinions of Counsel. An opinion or opinions of outside counsel to
            each of Seller and Guarantor, substantially in the form of Exhibit
            III;

      (3)   Organizational Documents. A good standing certificate and certified
            copies of the charter and by-laws (or equivalent documents) of each
            of Seller and Guarantor and of all corporate or other authority for
            Seller or Guarantor, as applicable, with respect to the execution,
            delivery and performance of the Repurchase Documents each other
            document to be delivered by Seller or Guarantor, as applicable, from
            time to time in connection herewith (and Buyer may conclusively rely
            on such certificate until it receives notice in writing from Seller
            or Guarantor, as applicable to the contrary);

      (4)   Underwriting Guidelines. A copy of Seller's current Underwriting
            Guidelines, and any material changes to the Underwriting Guidelines
            made since the Underwriting Guidelines were last delivered to Buyer;

      (5)   Other Documents. Such other documents as Buyer may reasonably
            request, in form and substance reasonably acceptable to Buyer; and

      (6)   Commitment Fee. Seller shall have paid to Buyer the Commitment Fee.
            Notwithstanding the foregoing, on the date occurring on the later of
            6 months from (a) the Effective Date or (b) the Bank Charter Event,
            Seller may terminate this Agreement in accordance with Section 20
            hereof and shall be entitled to a pro-rata reimbursement of its
            Commitment Fee if Buyer or an Affiliate has not entered into an
            "off-balance sheet" financing facility with Seller or its Affiliate;
            provided that such "off-balance sheet" facility will provide that
            (i) the purchase price or advance rate under such facility will be
            equal to no more than 96%, (ii) mortgage loans may not be held on
            such facility for longer than 60 days and (iii) such facility will
            not provide for "wet-ink" mortgage loans.

(b)   Conditions Precedent to all Transactions. Buyer's obligation to enter into
      each Committed Transaction (including the initial Transaction) and, in the
      event Buyer chooses, in its sole discretion, to enter into an Uncommitted
      Transaction pursuant to Section 3(c) below, Buyer's obligation to enter
      into each Uncommitted Transaction, is subject to the satisfaction of the
      following further conditions precedent, both immediately prior to entering
      into such Transaction and also after giving effect to the consummation
      thereof and the intended use of the proceeds of the sale:

      (1)   Seller shall have delivered a Transaction Request via Electronic
            Transmission in accordance with the procedures set forth in Section
            3(c).

      (2)   no Default or Event of Default shall have occurred and be continuing
            under the Repurchase Documents;

      (3)   after giving effect to the requested Transaction, the aggregate
            outstanding Purchase Price of the Transactions outstanding shall not
            exceed the Maximum Amount;

                                      -21-

<PAGE>

      (4)   both immediately prior to the requested Transaction and also after
            giving effect thereto and to the intended use thereof, the
            representations and warranties made by Seller in Section 10, 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);

      (5)   after giving effect to the requested Transaction, the aggregate
            outstanding Purchase Price of the Transactions outstanding shall not
            exceed the Asset Value of all the Purchased Assets subject to
            outstanding Transactions;

      (6)   subject to Buyer's right to perform one or more Due Diligence
            Reviews pursuant to Section 26, Buyer shall have completed its due
            diligence review of the Mortgage File for each Purchased Asset, and
            such other documents, records, agreements, instruments, mortgaged
            properties or information relating to such Purchased Asset as Buyer
            in its sole discretion deems appropriate to review and such review
            shall be satisfactory to Buyer in its sole discretion;

      (7)   with respect to any Eligible Asset to be purchased hereunder on the
            related Purchase Date which is not serviced by the Seller, Seller
            shall have provided to Buyer a copy of the related Servicing
            Agreement, certified as a true, correct and complete copy of the
            original, together with a Servicer Notice, fully executed by Seller
            and the Servicer;

      (8)   Buyer shall have received all fees and expenses of counsel to Buyer
            as contemplated by Section 14(b) and, to the extent Seller is
            required hereunder to reimburse Buyer for such amounts, Buyer shall
            have received the reasonable costs and expenses incurred by it in
            connection with the entering into of any Transaction hereunder,
            including, without limitation, costs associated with due diligence
            recording or other administrative expenses necessary or incidental
            to the execution of any Transaction hereunder, which amounts, at
            Buyer's option, may be withheld from the sale proceeds of any
            Transaction hereunder;

      (9)   Buyer shall have approved, in its sole discretion, all exceptions to
            the Underwriting Guidelines;

      (10)  none of the following shall have occurred and/or be continuing:

                        (A) 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 Assets 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

                                      -22-

<PAGE>

                        (B) 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

                        (C) 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)  with respect to each Eligible Asset that is not a Wet-Ink Mortgage
            Loan, Buyer shall have received from Custodian on each Purchase Date
            an Asset Schedule and Exception Report, dated the Purchase Date,
            duly completed and with exceptions acceptable to Buyer in its sole
            discretion in respect of Eligible Assets to be purchased hereunder
            on such Business Day;

      (12)  Buyer shall have received from Seller a Warehouse Lender's Release
            Letter substantially in the form of Exhibit VII-B hereto (or such
            other form acceptable to Buyer) or a Seller's Release Letter
            substantially in the form of Exhibit VII-A hereto (or such other
            form acceptable to Buyer) covering each Eligible Asset to be sold to
            Buyer;

      (13)  prior to the purchase of any Mortgage Loan acquired (by purchase or
            otherwise) by Seller from any third party, including without
            limitation, any Affiliate of Seller, Buyer shall have received a
            True Sale Certification;

      (14)  the Effective Date shall have occurred;

      (15)  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;

      (16)  the Repurchase Date for such Transaction is not later than the
            Termination Date;

      (17)  after giving effect to the requested Committed Transaction, the
            aggregate amount of outstanding Committed Transactions shall not
            have Purchase Prices in excess of the Maximum Committed Amount; and

      (18)  after giving effect to the requested Uncommitted Transaction, the
            aggregate amount of outstanding Uncommitted Transactions shall not
            have Purchase Prices in excess of the Maximum Uncommitted Amount.

      Each Transaction Request delivered by Seller hereunder shall constitute a
      certification by Seller that all the conditions set forth in this Section
      3(b) have been satisfied (both as of the date of such notice or request
      and as of the date of such purchase) and shall be deemed to be a request
      for a Committed Transaction; provided that after giving effect to the

                                      -23-

<PAGE>

      requested Committed Transaction, the aggregate amount of outstanding
      Committed Transactions shall not have Purchase Prices in excess of the
      Maximum Committed Amount, in which case such request shall be deemed a
      request for an Uncommitted Transaction.

(c)   This Agreement is not a commitment by Buyer to enter into Uncommitted
      Transactions with Seller but rather sets forth the procedures to be used
      in connection with periodic requests for Buyer to enter into Uncommitted
      Transactions with Seller. Seller hereby acknowledges that Buyer is under
      no obligation to agree to enter into, or to enter into, any Uncommitted
      Transaction pursuant to this Agreement. Seller shall request a Transaction
      by delivering to Custodian, Disbursement Agent and Buyer via Electronic
      Transmission a request in the form of Exhibit I attached hereto (a
      "Transaction Request") in accordance with the timeframe set forth in
      Section 3(a) of the Custodial and Disbursement Agreement. Such Transaction
      Request shall describe the Purchased Assets in a Seller Asset Schedule and
      set forth (i) the Purchase Date, (ii) the Purchase Price, (iii) the
      Repurchase Date, (iv) the Pricing Rate applicable to the Transaction, (v)
      the applicable Purchase Percentages, (vi) the applicable Class or Classes
      for each Mortgage Loan for which Seller is requesting the Transaction and
      (vii) additional terms or conditions not inconsistent with this Agreement.

      With respect to any request for an Uncommitted Transaction, unless
      otherwise agreed in writing, upon receipt of the Transaction Request,
      Buyer may, in its sole discretion, agree to enter into that portion of the
      requested Transaction representing a request for an Uncommitted
      Transaction, and such agreement shall be evidenced by a Confirmation to be
      delivered to Seller on the Purchase Date as described below.

      On each Purchase Date, Buyer shall forward to Seller a confirmation (a
      "Confirmation") by Electronic Transmission setting forth with respect to
      each Transaction funded on such date, (1) the mortgage loan number, (2)
      the Purchase Price for such Purchased Assets, (3) the Market Value of the
      related Mortgage Loans as of the date of such Confirmation, (4) the
      outstanding principal amount of the related Mortgage Loans, (5) the
      Repurchase Date, (6) the Pricing Rate and (7) the Class designations of
      such Purchased Assets. Buyer shall forward to Seller a revised
      Confirmation by Electronic Transmission notifying Seller as to any changes
      made by Buyer in the Pricing Spread, Purchase Percentage or Reduction
      Amount pursuant to the terms hereof.

      In the event Seller disagrees with any terms of the Confirmation and
      Seller shall notify Buyer in writing of such disagreement within one (1)
      Business Day after receipt of such Confirmation unless a corrected
      Confirmation is sent by Buyer. An objection sent by Seller must state
      specifically that it is an objection, must specify the provision(s) being
      objected to by Seller, must set forth such provision(s) in the manner that
      Seller believes they should be stated, and must be received by Buyer no
      more than one (1) Business Day after the Confirmation was received by
      Seller.

(d)   Any Confirmation by Buyer shall be deemed to have been received by Seller
      on the date actually received by Seller.

                                      -24-

<PAGE>

(e)   Except as set forth in Section 3(c), each 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
      Confirmation relates, and Seller's acceptance of the related proceeds
      shall constitute Seller's agreement to the terms of such Confirmation. It
      is the intention of the parties that each Confirmation shall not be
      separate from this Agreement but shall be made a part of this Agreement.

(f)   On the Repurchase Date, termination of a Transaction will be effected by
      transfer to Seller or its designee of the Purchased Assets (and any Income
      in respect thereof received by Buyer not previously credited or
      transferred to, or applied to the obligations of, Seller pursuant to
      Section 5) which amount shall be netted against the simultaneous receipt
      of the Repurchase Price by Buyer. To the extent a net amount is owed to
      one party, the other party shall pay such amount to such party. Seller is
      obligated to obtain the Mortgage Files from Buyer or its designee
      (including Custodian) at Seller's expense on the Repurchase Date. Any
      payment made by Seller to repurchase Purchased Assets shall be first
      applied to repurchase Purchased Assets under Uncommitted Transactions
      until all outstanding Uncommitted Transactions have been terminated; it
      being understood that it is the intention of the parties hereto that at no
      time shall there be any outstanding Uncommitted Transactions when the
      aggregate amount of the Purchase Price with respect to all outstanding
      Committed Transactions is less than the Maximum Committed Amount.

(g)   Subject to the terms and conditions of this Agreement, during the term of
      this Agreement Seller may sell to Buyer, repurchase from Buyer and resell
      to Buyer Eligible Assets hereunder.

(h)   In no event shall a Transaction be entered into when any Default or Event
      of Default has occurred and is continuing or when the Repurchase Date for
      such Transaction would be later than the Termination Date.

(i)   With respect to each Eligible Asset that is not a Wet-Ink Mortgage Loan,
      Seller shall deliver to Custodian the Mortgage File pertaining to each
      Eligible Asset to be purchased by Buyer no later than the time set forth
      in the Custodial and Disbursement Agreement.

(j)   With respect to each Eligible Asset that is not a Wet-Ink Mortgage Loan,
      pursuant to the Custodial and Disbursement Agreement, Custodian shall
      deliver to Buyer and Seller an Asset Schedule and Exception Report with
      respect to the Eligible Assets which Seller has requested Buyer purchase
      on such Purchase Date, and no later than 5 p.m., New York City time, on
      each Purchase Date, Custodian shall deliver to Buyer a Trust Receipt in
      respect of all such Eligible Assets purchased by Buyer on such Purchase
      Date. Subject to the provisions of this Section 3 and Section 11 of the
      Custodial and Disbursement Agreement, the Purchase Price for each Eligible
      Asset that is not a Wet-Ink Mortgage Loan will be made available to Seller
      by Disbursement Agent transferring, the aggregate amount of such Purchase
      Price in accordance with the Custodial and Disbursement Agreement.

                                      -25-

<PAGE>

(k)   With respect to each Eligible Asset that is a Wet-Ink Mortgage Loan,
      Seller shall cause the Settlement Agent to send the Custodian a facsimile
      of the associated Escrow Instruction Letter on each Purchase Date. Subject
      to the provisions of this Section 3 and Section 11 of the Custodial and
      Disbursement Agreement, the Purchase Price for each Eligible Asset which
      is a Wet-Ink Mortgage Loan will then be made available to Seller by
      Disbursement Agent transferring the aggregate amount of such Purchase
      Price in accordance with the Custodial and Disbursement Agreement. Seller
      shall deliver the Mortgage File related thereto and the original Escrow
      Instruction Letter to Custodian, for receipt by Custodian no later than
      ten (10) Business Days following the Purchase Date

(l)   Seller may repurchase Purchased Assets without penalty or premium, but
      subject to the last sentence of this Section 3(l), on any date. The
      Repurchase Price payable for the repurchase of any such Purchased Asset
      shall be reduced as provided in Section 5(d). If Seller intends to make
      such a repurchase, Seller shall give one (1) Business Day's prior written
      notice thereof to Buyer, designating the Purchased Assets to be
      repurchased. If such notice is given, the amount specified in such notice
      shall be due and payable on the date specified therein, and, on receipt,
      such amount shall be applied to the Repurchase Price for the designated
      Purchased Assets. The amount of the original Purchase Price of the
      Purchased Assets thus repurchased shall be available for subsequent
      Transactions subject to the terms of this Agreement. If any Purchased
      Asset is repurchased on any date other than the Repurchase Date for such
      Transaction, Seller shall pay to Buyer any amount determined by Buyer, in
      its sole discretion, as necessary to compensate Buyer for any additional
      losses, costs or expenses which it may reasonably incur as a result of
      such repurchase, including, without limitation, any loss, cost or expense
      incurred by reason of the liquidation or reemployment of deposits or other
      funds acquired by Buyer to fund or maintain such Transaction.

(m)   Seller agrees to pay to Buyer on the first Business Day following the 6
      month anniversary of the Effective Date and every 6 month anniversary
      thereafter, a non-use fee (the "Non-Use Fee"), equal to 10 basis points
      (0.10%) per annum on the average daily amount of the unutilized portion of
      the Maximum Committed Amount during the immediately ended 6-month period
      for which such payment is made, if the average daily amount of unutilized
      portion of the Maximum Committed Amount is in excess of 50% of the Maximum
      Committed Amount, such payment to be made in Dollars, in immediately
      available funds, without deduction, set-off or counterclaim, to Buyer at
      the account set forth in Section 8(a) hereof.

(n)   On any day on which the Margin Base exceeds the aggregate outstanding
      Purchase Price of all Transactions, so long as no Default or Event of
      Default has occurred and is continuing:

      (1)   Seller may prepare a Request for Additional Transactions for Excess
            Margin in the form of Exhibit IX attached hereto ("Request for
            Additional Transactions for Excess Margin"), (A) specifying (i) the
            increase in Purchase Price for all outstanding Transactions and the
            requested Purchase Date, (ii) the Excess Margin with respect to all
            outstanding Transactions before giving effect to the requested

                                      -26-

<PAGE>

            Transaction, (iii) the remaining Excess Margin after giving effect
            to the requested Transaction, and (iv) the aggregate outstanding
            Purchase Price of the Transactions after giving effect to the
            requested Transaction, and (B) including a certification that, upon
            the consummation of the additional Transactions, the Margin Base
            will be equal to or greater than the aggregate outstanding Purchase
            Price of all Transactions, and the excess of the Margin Base over
            the aggregate outstanding Purchase Price, after giving effect to the
            Transaction, shall be the "Excess Margin".

      (2)   Seller shall transmit via Electronic Transmission the Request for
            Additional Transactions for Excess Margin to Disbursement Agent and
            Buyer prior to 12:00 noon, New York City time, on the requested
            Purchase Date. Upon confirming that the Request for Additional
            Transactions for Excess Margin correctly reflects the information
            set forth in Section 3(n)(1) and that, after giving effect to the
            requested Transaction, the amount of the Margin Base would be equal
            to or greater than the aggregate outstanding Purchase Prices of all
            Transactions, Buyer shall cause Disbursement Agent to remit the
            additional Purchase Price in the amount set forth in such Request
            for Additional Transactions for Excess Margin and send a revised
            Confirmation with respect to such Purchased Assets. In the event
            that Buyer's assessment of the Margin Base would alter the
            information set forth in any Request for Additional Transactions for
            Excess Margin, Buyer shall promptly notify Seller in writing of such
            assessment.

      (3)   Buyer shall not be obligated to cause Disbursement Agent to remit
            the additional Purchase Price requested pursuant to a Request for
            Additional Transactions for Excess Margin which (i) Buyer reasonably
            determines is based on erroneous information or would result in a
            Transaction other than in accordance with the terms of this
            Agreement, or (ii) does not reflect Buyer's current determination of
            Market Value as provided in the definition thereof.

4.    MARGIN AMOUNT MAINTENANCE

(a)   If at any time the Margin Base is less than the aggregate Purchase Price
      for all outstanding Transactions (a "Margin Deficit"), then Buyer may by
      notice to Seller (as such notice is more particularly set forth below, a
      "Margin Deficit Notice") require Seller to transfer to Buyer or its
      designee (including Custodian) cash so that the aggregate Asset Value of
      the Purchased Assets will thereupon equal or exceed the aggregate Purchase
      Price for all outstanding Transactions. If Buyer delivers a Margin Deficit
      Notice to Seller on or prior to 10 a.m., New York City time, on any
      Business Day, then Seller shall transfer cash to Buyer no later than 5
      p.m. New York City time, on such Business Day. In the event Buyer delivers
      a Margin Deficit Notice to Seller after 10 a.m., New York City time, on
      any Business Day, Seller shall be required to transfer cash no later than
      5 p.m., New York City time, on the subsequent Business Day. All cash
      transferred to Buyer pursuant to this Section 4(a) shall be deposited in
      the account set forth in Section 8(a) hereof and shall be deemed to reduce
      the aggregate Purchase Price with respect to all outstanding Transactions.

                                      -27-

<PAGE>

(b)   Buyer's election, in its sole and absolute discretion, not to deliver a
      Margin Deficit Notice at any time there is a Margin Deficit shall not in
      any way limit or impair its right to deliver a Margin Deficit Notice at
      any time a Margin Deficit exists.

5.    INCOME PAYMENTS

(a)   Where a particular Transaction's term extends over an Income payment date
      on the Purchased Assets subject to that Transaction such Income shall be
      the property of Buyer. Buyer agrees that until an Event of Default has
      occurred and Buyer otherwise directs as contemplated in each Servicer
      Notice, each Servicer that is not Seller shall be permitted to continue to
      remit Income in accordance with the respective Servicing Agreement. In the
      event that Seller is the Servicer of any Mortgage Loans, Buyer agrees that
      until an Event of Default has occurred, Seller shall be permitted to
      continue to remit or retain Income with respect to such Mortgage Loans in
      accordance with its current existing business practice. Upon notice of an
      Event of Default to Seller hereunder or to Servicer pursuant to a Servicer
      Notice, Seller shall, and pursuant to the Servicer Notice, Servicer shall
      be required to, deposit promptly all Income in a deposit account (the
      title of which shall indicate that the funds therein are being held in
      trust for Buyer) (the "Collection Account") with the Bank and which is
      subject to the Account Agreement. All funds in the Collection Account may
      be withdrawn by Buyer and applied as determined by Buyer.

(b)   Notwithstanding that Buyer and Seller intend that the Transactions
      hereunder be sales to Buyer of the Purchased Assets, Seller shall pay to
      Buyer the accreted value of the Price Differential (less any amount of
      such Price Differential previously paid by Seller to Buyer) of each
      Transaction through but not including the Payment Calculation Date (each
      such payment, a "Periodic Advance Repurchase Payment") on each Payment
      Date. Buyer shall deliver to Seller, via Electronic Transmission, notice
      of the required Periodic Advance Repurchase Payment on or prior to the
      second Business Day preceding each Payment Date. If Seller fails to make
      all or part of the Periodic Advance Repurchase Payment by 5:00 p.m., New
      York City time, on the Payment Date, Seller shall be obligated to pay to
      Buyer (in addition to, and together with, the Periodic Advance Repurchase
      Payment) interest on the unpaid amount of the Periodic Advance Repurchase
      Payment at a rate per annum equal to the Post-Default Rate (the "Late
      Payment Fee") until the overdue Periodic Advance Repurchase Payment is
      received in full by Buyer.

(c)   Seller shall hold or cause to be held for the benefit of, and in trust
      for, Buyer all income, including without limitation all Income received by
      or on behalf of Seller with respect to such Purchased Assets. 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 Seller, any
      affiliate of Seller or the applicable Servicer except as expressly
      permitted above in this Section 5. Funds deposited in the Collection
      Account during any month shall be held therein, in trust for Buyer.

(d)   Buyer shall offset against the Repurchase Price of each such Transaction
      all Income and Periodic Advance Repurchase Payments actually received by
      Buyer for such Transaction pursuant to Sections 5(a) and 5(b) as of the
      applicable Repurchase Date, respectively, excluding any Late Payment Fees
      paid pursuant to Section 5(b); it being understood that the Late Payment

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<PAGE>

      Fees are properties of Buyer that are not subject to offset against the
      Repurchase Price.

6.    REQUIREMENTS OF LAW

(a)   If any Requirement of Law (other than with respect to any amendment made
      to Buyer's certificate of incorporation and by-laws or other
      organizational or governing documents) or any change in the interpretation
      or application thereof or compliance by Buyer with any request or
      directive (whether or not having the force of law) from any central bank
      or other Governmental Authority made subsequent to the date hereof:

      (1)   shall subject Buyer to any tax of any kind whatsoever with respect
            to this Agreement or any Transaction (excluding net income taxes) or
            change the basis of taxation of payments to Buyer in respect
            thereof;

      (2)   shall impose, modify or hold applicable any reserve, special
            deposit, compulsory loan or similar requirement against assets held
            by, deposits or other liabilities in or for the account of,
            advances, or other extensions of credit by, or any other acquisition
            of funds by, any office of Buyer which is not otherwise included in
            the determination of the Eurodollar Rate hereunder;

      (3)   shall impose on Buyer any other condition;

            and the result of any of the foregoing is to increase the cost to
            Buyer, by an amount which Buyer deems to be material, of entering,
            continuing or maintaining any Transaction or to reduce any amount
            due or owing hereunder in respect thereof, then, in any such case,
            Seller shall promptly pay Buyer such additional amount or amounts as
            calculated by Buyer in good faith as will compensate Buyer for such
            increased cost or reduced amount receivable.

(b)   If Buyer shall have determined that the adoption of or any change in any
      Requirement of Law (other than with respect to any amendment made to
      Buyer's certificate of incorporation and by-laws or other organizational
      or governing documents) regarding capital adequacy or in the
      interpretation or application thereof or compliance by Buyer or any
      corporation controlling Buyer with any request or directive regarding
      capital adequacy (whether or not having the force of law) from any
      Governmental Authority made subsequent to the date hereof shall have the
      effect of reducing the rate of return on Buyer's or such corporation's
      capital as a consequence of its obligations hereunder to a level below
      that which Buyer or such corporation could have achieved but for such
      adoption, change or compliance (taking into consideration Buyer's or such
      corporation's policies with respect to capital adequacy) by an amount
      deemed by Buyer to be material, then from time to time, Seller shall
      promptly pay to Buyer such additional amount or amounts as will compensate
      Buyer for such reduction.

(c)   Any payments made by Seller to Buyer shall be free and clear of, and
      without deduction or withholding for, any taxes; provided, however, that
      if Seller shall be required by law to deduct or withhold any taxes from
      any sums payable to Buyer, then Seller shall (A) make such deductions or
      withholdings and pay such amounts to the relevant authority in accordance

                                      -29-

<PAGE>

      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 the
      Price Differential is paid, pay to Buyer all additional amounts as
      specified by Buyer to preserve the after-tax yield Buyer would have been
      received had such tax not been imposed.

(d)   If Buyer becomes entitled to claim any additional amounts pursuant to this
      Section, it shall promptly notify Seller of the event by reason of which
      it has become so entitled. A certificate as to any additional amounts
      payable pursuant to this Section 6(d) submitted by Buyer to Seller shall
      be conclusive in the absence of manifest error.

7.    SECURITY INTEREST

(a)   Each of the following items or types of property, whether now owned or
      hereafter acquired, now existing or hereafter created and wherever
      located, is hereinafter referred to as the "Purchased Items": all Mortgage
      Loans, all rights under each Purchase Agreement (but not the obligations
      thereunder), all Mortgage Files, including without limitation all
      promissory notes, all Servicing Records relating to the Mortgage Loans,
      all Servicing Agreements relating to the Mortgage Loans and any other
      collateral pledged or otherwise relating to such Mortgage Loans, together
      with all files, documents, instruments, surveys, certificates,
      correspondence, appraisals, computer programs, computer storage media,
      accounting records and other books and records relating thereto, all
      mortgage guaranties and insurance (issued by governmental agencies or
      otherwise) and any mortgage insurance certificate or other document
      evidencing such mortgage guaranties or insurance relating to any Mortgage
      Loan, all servicing fees to which such Seller is entitled and servicing
      and other rights relating to the Mortgage Loans, all Servicer Accounts
      established pursuant to any Servicing Agreement and all amounts on deposit
      therein, from time to time, all Purchase Agreements or other agreements or
      contracts relating to, constituting, or otherwise governing, any or all of
      the foregoing to the extent they relate to the Purchased Assets including
      the right to receive principal and interest payments with respect to the
      Purchased Assets and the right to enforce such payments, the Collection
      Account and all monies from time to time on deposit in the Collection
      Account, the DDA Account and all monies from time to time on deposit in
      the DDA Account, the Check Disbursement Account and all monies from time
      to time on deposit in the Check Disbursement Account, all "general
      intangibles", "accounts", "chattel paper", "deposit accounts" and
      "investment property" as defined in the Uniform Commercial Code as in
      effect from time to time relating to or constituting any and all of the
      foregoing, and any and all replacements, substitutions, distributions on
      or proceeds of any and all of the foregoing.

(b)   Buyer and Seller intend that the Transactions hereunder be sales to Buyer
      of the Purchased Assets and not loans from Buyer to Seller secured by the
      Purchased Assets. However, in order to preserve Buyer's rights under this
      Agreement in the event that a court or other forum recharacterizes the
      Transactions hereunder as loans and as security for the performance by
      Seller of all of Seller's obligations to Buyer hereunder and the
      Transactions entered into hereunder ("Repurchase Obligations") and the
      Seller-Related Obligations, Seller hereby assigns, pledges and grants a
      security interest in all of its right, title and interest in, to and under
      the Purchased Items and the Purchased Assets to Buyer to secure the

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<PAGE>

      Repurchase Obligations and the Seller-Related Obligations, including
      without limitation the repayment of all amounts owing to Buyer hereunder.
      The assignment, pledge and grant of security interest contained herein
      shall be, and Seller hereby represents and warrants to Buyer that it is, a
      first priority perfected security interest. Seller agrees to mark its
      computer records and tapes to evidence the interests granted to Buyer
      hereunder. All Purchased Items shall secure the payment of all obligations
      of Seller now or hereafter existing under this Agreement, including,
      without limitation, Seller's obligation to repurchase Purchased Assets, or
      if such obligation is so recharacterized as a loan, to repay such loan,
      for the Repurchase Price and to pay any and all other amounts owing to
      Buyer hereunder.

(c)   Pursuant to the Custodial and Disbursement Agreement, Custodian shall hold
      the Mortgage Files as exclusive bailee and agent for Buyer pursuant to the
      terms of the Custodial and Disbursement Agreement and shall deliver to
      Buyer Trust Receipts each to the effect that Custodian has reviewed such
      Mortgage Files in the manner and to the extent required by the Custodial
      and Disbursement Agreement and identifying any deficiencies in such
      Mortgage Files as so reviewed.

8.    PAYMENT, TRANSFER AND CUSTODY

(a)   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. GLA 111569, for the
      account of CDC Mortgage Capital, Inc., Bank of New York, ABA No.
      021000018, Attn: Eric Seyffer, not later than 3 p.m., New York City time,
      on the date on which such payment shall become due (and each such payment
      made after such time shall be deemed to have been made on the next
      succeeding Business Day). Seller acknowledges that it has no rights of
      withdrawal from the foregoing account.

(b)   On the Purchase Date for each Transaction, ownership of the Purchased
      Assets shall be transferred to Buyer or its designee (including Custodian)
      against the simultaneous transfer of the Purchase Price as set forth in
      Section 11 of the Custodial and Disbursement Agreement not later than 6
      p.m., New York City time, simultaneously with the delivery to Custodian of
      the Purchased Assets relating to each Transaction. Seller hereby sells,
      transfers, conveys and assigns to Buyer or its designee (including
      Custodian) without recourse, but subject to the terms of this Agreement,
      all the right, title and interest of Seller in and to the Purchased Assets
      together with all right, title and interest in and to the proceeds of any
      related Purchased Items.

(c)   In connection with such sale, transfer, conveyance and assignment, on or
      prior to each Purchase Date, Seller shall deliver or cause to be delivered
      and released to Buyer or its designee (including Custodian) (i) the
      Custodial Identification Certificate and (ii) the documents identified in
      the Custodial and Disbursement Agreement.

(d)   Any Mortgage Files not delivered to Buyer or its designee (including
      Custodian) are and shall be held in trust by Seller or its designee for
      the benefit of Buyer as the owner thereof. Seller or its designee shall
      maintain a copy of the Mortgage File and the originals of the Mortgage

                                      -31-

<PAGE>

      File not delivered to Buyer or its designee (including Custodian). The
      possession of the Mortgage File by Seller or its designee is at the will
      of Buyer for the sole purpose of servicing the related Purchased Asset,
      and such retention and possession by Seller or its designee is in a
      custodial capacity only. Each Mortgage File retained or held by Seller or
      its designee shall be segregated on Seller's books and records from the
      other assets of Seller or its designee and the books and records of Seller
      or its designee shall be marked appropriately to reflect clearly the sale
      of the related Purchased Asset to Buyer. Seller or its designee shall
      release its custody of the Mortgage File only in accordance with written
      instructions from Buyer, unless such release is required as incidental to
      the servicing of the Purchased Assets or is in connection with a
      repurchase of any Purchased Asset by Seller.

9.    HYPOTHECATION OR PLEDGE OF PURCHASED ASSETS

      Title to all Purchased Assets and Purchased Items shall pass to Buyer and
      Buyer shall have free and unrestricted use of all Purchased Assets and
      Purchased Items. Nothing in this Agreement shall preclude Buyer from
      engaging in repurchase transactions with the Purchased Assets and
      Purchased Items or otherwise pledging, repledging, transferring,
      hypothecating, or rehypothecating the Purchased Assets and Purchased
      Items, all on terms that Buyer may determine in its sole discretion.
      Nothing contained in this Agreement shall obligate Buyer to segregate any
      Purchased Assets and Purchased Items delivered to Buyer by Seller.

10.   SELLER REPRESENTATIONS

      Seller represents and warrants to Buyer that as of the Purchase Date for
      the purchase of any Purchased Assets by Buyer from Seller and as of the
      date of this Agreement and any Transaction hereunder and at all times
      while the Repurchase Documents and any Transaction hereunder is in full
      force and effect:

(a)   Acting as Principal. Seller will engage in such Transactions as principal
      (or, if agreed in writing in advance of any Transaction by the other party
      hereto, as agent for a disclosed principal);

(b)   Solvency. Neither the Repurchase Documents nor any Transaction thereunder
      are entered into in contemplation of insolvency or with intent to hinder,
      delay or defraud any of Seller's creditors. The transfer of the Mortgage
      Loans subject hereto and the obligation to repurchase such Mortgage Loans
      is not undertaken with the intent to hinder, delay or defraud any of
      Seller's creditors. Seller is not insolvent within the meaning of 11
      U.S.C. Section 101(32) or any successor provision thereof and the transfer
      and sale of the Mortgage Loans pursuant hereto and the obligation to
      repurchase such Mortgage Loan (i) will not cause Seller to become
      insolvent, (ii) will not result in Seller having unreasonably small
      capital, and (iii) will not result in debts that would be beyond Seller's
      ability to pay as the same mature. Seller received reasonably equivalent
      value in exchange for the transfer and sale of the Purchased Assets and
      Purchased Items subject hereto;

                                      -32-

<PAGE>

(c)   No Broker. Seller has not dealt with any broker, investment banker, agent,
      or other person, except for Buyer and Milestone Merchant Partners, who may
      be entitled to any commission or compensation in connection with the sale
      of Purchased Assets pursuant to this Agreement;

(d)   Ability to Perform. Seller does not believe, nor does it have any reason
      or cause to believe, that either it or Guarantor cannot perform each and
      every covenant contained in the Repurchase Documents applicable to such
      Person;

(e)   No Defaults. No Default or Event of Default has occurred and is continuing
      hereunder;

(f)   Legal Name; Existence; Organizational Identification Number. Seller's
      exact legal name is American Home Mortgage Corp. Seller (i) is a
      corporation duly organized, validly existing and in good standing under
      the laws of New York; (ii) 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; and (iii) is qualified to do business and
      is in good standing in all other jurisdictions in which the nature of the
      business conducted by it makes such qualification necessary, except where
      failure so to qualify could not be reasonably likely (either individually
      or in the aggregate) to have a Material Adverse Effect. The Seller is
      organized under the laws of the state of New York and no organizational
      identification number has been assigned by the state of New York.
      Guarantor (a) is a corporation duly organized, validly existing and in
      good standing under the laws of Delaware; (b) 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; and (c) is qualified
      to do business and is in good standing in all other jurisdictions in which
      the nature of the business conducted by it makes such qualification
      necessary, except where failure so to qualify could not be reasonably
      likely (either individually or in the aggregate) to have a Material
      Adverse Effect.

(g)   Financial Condition. Seller has heretofore furnished to Buyer a copy of
      (a) Guarantor's consolidated balance sheet and the consolidated balance
      sheets of Guarantor's consolidated Subsidiaries for the fiscal year ended
      December 31, 2000, and the related consolidated statements of income and
      retained earnings and of cash flows for Guarantor and Guarantor's
      consolidated Subsidiaries for such fiscal year, each audited by and with
      the unqualified opinion thereon of Deloitte and Touche, L.L.P. and (b)
      Guarantor's consolidated balance sheet and the consolidated balance sheets
      of Guarantor's consolidated Subsidiaries for the quarterly fiscal period
      of Guarantor ended March 31, 2001, June 31, 2001, and September 30, 2001
      and the related consolidated statements of income and retained earnings
      and of cash flows for Guarantor and Guarantor's consolidated Subsidiaries
      for such quarterly fiscal period, setting forth in each case in
      comparative form the figures for the previous year. All such financial
      statements are complete and correct and fairly present, in all material
      respects, the consolidated financial position of Guarantor and Guarantor's

                                      -33-

<PAGE>

      Subsidiaries and the consolidated results of their operations as at such
      dates and for such fiscal periods, all in accordance with GAAP applied on
      a consistent basis. Since September 30, 2001, there has been no material
      adverse change in the consolidated business, operations or financial
      condition of Guarantor and Guarantor's consolidated Subsidiaries taken as
      a whole from that set forth in said financial statements.

(h)   Litigation. There are no actions, suits, arbitrations, investigations
      (including, without limitation, any of the foregoing which are pending or
      threatened) or other legal or arbitrable proceedings affecting Guarantor,
      Seller or any of its Subsidiaries or affecting any of the Property of any
      of them before any Governmental Authority which (i) questions or
      challenges the validity or enforceability of the Repurchase Documents or
      any action to be taken in connection with the transactions contemplated
      hereby, (ii) makes a claim or claims in an aggregate amount greater than
      $500,000, or (iii) individually or in the aggregate, if adversely
      determined, could reasonably be likely to have a Material Adverse Effect.

(i)   No Breach. Neither (a) the execution and delivery of the Repurchase
      Documents nor (b) the consummation of the transactions therein
      contemplated to be entered into by Seller or Guarantor, as applicable, in
      compliance with the terms and provisions thereof will conflict with or
      result in a breach of the organizational documents of Seller or Guarantor,
      as applicable, or any applicable law, rule or regulation, or any order,
      writ, injunction or decree of any Governmental Authority, or any Servicing
      Agreement or other material agreement or instrument to which Guarantor,
      Seller or any of their respective Subsidiaries is a party or by which any
      of them or any of their Property is bound or to which any of them is
      subject, or constitute a default under any such material agreement or
      instrument or result in the creation or imposition of any Lien (except for
      the Liens created pursuant to the Repurchase Documents) upon any Property
      of Seller or Guarantor, as applicable, or any of its respective
      Subsidiaries pursuant to the terms of any such agreement or instrument.

(j)   Action. Each of Guarantor and Seller has all necessary corporate or other
      power, authority and legal right to execute, deliver and perform its
      obligations under each of the Repurchase Documents to which it is a party;
      the execution, delivery and performance by it of each of the Repurchase
      Documents to which it is a party has been duly authorized by all necessary
      corporate or other action on its part; and each Repurchase Document to
      which it is a party has been duly and validly executed and delivered by
      it, and constitutes a legal, valid and binding obligation of it
      enforceable against it in accordance with its terms.

(k)   Approvals. No authorizations, approvals or consents of, and no filings or
      registrations with, any Governmental Authority or any securities exchange
      are necessary for the execution, delivery or performance by Seller or
      Guarantor of the Repurchase Documents to which it is a party or for the
      legality, validity or enforceability thereof, except for filings and
      recordings in respect of the Liens created pursuant to the Repurchase
      Documents.

                                      -34-

<PAGE>

(l)   Margin Regulations. Neither any Transaction hereunder, nor the use of the
      proceeds thereof, will violate or be inconsistent with the provisions of
      Regulation T, U or X.

(m)   Taxes. Guarantor, Seller and its Subsidiaries have filed all Federal
      income tax returns and all other material tax returns that are required to
      be filed by them and have paid all taxes due pursuant to such returns or
      pursuant to any assessment received by it or any of its Subsidiaries,
      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 Guarantor, Seller and their respective
      Subsidiaries in respect of taxes and other governmental charges are, in
      the opinion of Seller, adequate.

(n)   Investment Company Act. None of Guarantor, Seller nor any of their
      respective Subsidiaries is an "investment company", or a company
      "controlled" by an "investment company," within the meaning of the
      Investment Company Act of 1940, as amended.

(o)   Purchased Assets.

      (1)   Seller has not assigned, pledged, or otherwise conveyed or
            encumbered any Mortgage Loan to any other Person, and immediately
            prior to the sale of such Mortgage Loan to Buyer, Seller was the
            sole owner of such Mortgage Loan and had good and marketable title
            thereto, free and clear of all Liens, in each case except for Liens
            to be released simultaneously with the sale to Buyer hereunder. No
            Mortgage Loan sold to Buyer hereunder was acquired (by purchase or
            otherwise) by Seller from an Affiliate of Seller unless a True Sale
            Certification has been delivered to Buyer.

      (2)   The provisions of this Agreement are effective to either constitute
            a sale of Purchased Items to Buyer or to create in favor of Buyer a
            valid and fully perfected first priority security interest in all
            right, title and interest of Seller in, to and under the Purchased
            Items.

      (3)   Upon receipt by Custodian of each Mortgage Note, endorsed in blank
            by a duly authorized officer of Seller, either a purchase shall have
            been completed by Buyer of each Mortgage Note or Buyer shall have a
            valid and fully perfected first priority security interest in the
            applicable Mortgage Note and in such Seller's interest in the
            related Mortgaged Property.

      (4)   Upon the filing of financing statements on Form UCC-1 naming Buyer
            as "Secured Party", Seller as "Debtor" and describing the Purchased
            Items, in the jurisdictions and recording offices listed on Exhibit
            IV attached hereto, the security interests granted hereunder in the
            Purchased Items will constitute fully perfected security interests
            under the Uniform Commercial Code in all right, title and interest
            of Seller in, to and under such Purchased Items, which can be
            perfected by filing under the Uniform Commercial Code.

                                      -35-

<PAGE>

      (5)   Upon execution and delivery of the Account Agreement, Buyer shall
            either be the owner of, or have a valid and fully perfected first
            priority security interest in, the investment property and all
            deposit accounts comprising Purchased Items.

      (6)   With respect to each Purchased Asset, each of the representations
            and warranties on Schedule 1 is true and correct.

(p)   Location of Books and Records. The location where Seller keeps its books
      and records, including all computer tapes and records related to the
      Purchased Items is its chief executive office.

(q)   [Reserved].

(r)   Existing Financing Facilities. All credit facilities of Seller which are
      presently in effect are listed under the definition of "Existing Financing
      Facilities." No defaults or events of default exist under any of the
      Existing Financing Facilities.

(s)   True and Complete Disclosure. The information, reports, financial
      statements, exhibits and schedules furnished in writing by or on behalf of
      Guarantor or Seller to Buyer in connection with the negotiation,
      preparation or delivery of this Agreement and the other Repurchase
      Documents or included herein or therein or delivered pursuant hereto or
      thereto (other than with respect to the Mortgage Loans), when taken as a
      whole, do not contain any untrue statement of material fact or omit to
      state any material fact necessary to make the statements herein or
      therein, in light of the circumstances under which they were made, not
      misleading. All written information furnished after the date hereof by or
      on behalf of each of Guarantor and Seller to Buyer in connection with this
      Agreement and the other Repurchase Documents and the transactions
      contemplated hereby (other than with respect to the Mortgage Loans) and
      thereby will be true, complete and accurate in every material respect, or
      (in the case of projections) based on reasonable estimates, on the date as
      of which such information is stated or certified. There is no fact known
      to a Responsible Officer of Seller, after due inquiry, that could
      reasonably be expected to have a Material Adverse Effect that has not been
      disclosed herein, in the other Repurchase Documents or in a report,
      financial statement, exhibit, schedule, disclosure letter or other writing
      furnished to Buyer for use in connection with the transactions
      contemplated hereby or thereby.

(t)   ERISA. Each Plan to which Guarantor, Seller or any of their respective
      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. No event or condition has occurred and is
      continuing as to which either Guarantor or Seller would be under an
      obligation to furnish a report to Buyer under Section 11(a)(4).

(u)   Servicing. The Seller is the servicer of each Mortgage Loan.

(v)   No Reliance. Each of Seller and Guarantor has made its own independent
      decisions to enter into the Repurchase Documents and each Transaction and
      as to whether such Transaction is appropriate and proper for it based upon

                                      -36-

<PAGE>

      its own judgment and upon advice from such advisors (including without
      limitation, legal counsel and accountants) as it has deemed necessary.
      Neither Seller nor Guarantor is 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.

(w)   Compliance with Anti-Money Laundering Laws. Seller has complied with all
      applicable anti-money laundering laws and regulations, including without
      limitation the USA Patriot Act of 2001 (collectively, the "Anti-Money
      Laundering Laws"); Seller has established an anti-money laundering
      compliance program as required by the Anti-Money Laundering Laws, has
      conducted the requisite due diligence in connection with the origination
      of each Mortgage Loan for purposes of the Anti-Money Laundering Laws,
      including with respect to the legitimacy of the applicable Mortgagor and
      the origin of the assets used by the said Mortgagor to purchase the
      property in question, and maintains, and will maintain, sufficient
      information to identify the applicable Mortgagor for purposes of the
      Anti-Money Laundering Laws.

11.   COVENANTS OF SELLER

      On and as of the date of this Agreement and each Purchase Date and until
      this Agreement is no longer in force with respect to any Transaction,
      Seller covenants that it will:

(a)   Financial Statements. Seller shall deliver to Buyer:

      (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 Guarantor and its consolidated
            Subsidiaries as at the end of such period and the related unaudited
            consolidated statements of income and retained earnings and of cash
            flows for Guarantor 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
            Guarantor, which certificate shall state that said consolidated
            financial statements fairly present in all material respects the
            consolidated financial condition and results of operations of
            Guarantor and its consolidated Subsidiaries 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 Guarantor, the consolidated balance
            sheets of Guarantor and its consolidated Subsidiaries as at the end
            of such fiscal year and the related consolidated statements of
            income and retained earnings and of cash flows for Guarantor and its
            consolidated Subsidiaries 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 shall not be qualified
            as to scope of audit or going concern and shall state that said
            consolidated financial statements fairly present the consolidated
            financial condition and results of operations of Guarantor and its
            respective consolidated Subsidiaries as at the end of, and for, such
            fiscal year in accordance with GAAP, and a certificate of such

                                      -37-

<PAGE>

            accountants stating that, in making the examination necessary for
            their opinion, they obtained no knowledge, except as specifically
            stated, of any Default or Event of Default;

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

      (4)   as soon as reasonably possible, and in any event within thirty (30)
            days after a Responsible Officer of Seller knows, or with respect to
            any Plan or Multiemployer Plan to which Guarantor or any of its
            Subsidiaries makes direct contributions, has reason to believe, that
            any of the events or conditions specified below with respect to any
            Plan or Multiemployer Plan has occurred or exists, a statement
            signed by a senior financial officer of Guarantor setting forth
            details respecting such event or condition and the action, if any,
            that Guarantor or its ERISA Affiliate proposes to take with respect
            thereto (and a copy of any report or notice required to be filed
            with or given to PBGC by Guarantor or an ERISA Affiliate with
            respect to such event or condition):

                        (A) any reportable event, as defined in Section 4043(c)
                  of ERISA or any successor provision thereof and the
                  regulations issued thereunder, with respect to a Plan, as to
                  which PBGC has not by regulation waived the requirement of
                  Section 4043(a) of ERISA that it be notified within thirty
                  (30) days of the occurrence of such event (provided that a
                  failure to meet the minimum funding standard of Section 412 of
                  the Code or Section 302 of ERISA or any successor provision
                  thereof, 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 any successor
                  provision thereof, shall be a reportable event regardless of
                  the issuance of any waivers in accordance with Section 412(d)
                  of the Code or any successor provision thereof); and any
                  request for a waiver under Section 412(d) of the Code or any
                  successor provision thereof for any Plan;

                        (B) the distribution under Section 4041(c) of ERISA or
                  any successor provision thereof of a notice of intent to
                  terminate any Plan or any action taken by Seller or an ERISA
                  Affiliate to terminate any Plan;

                        (C) the institution by PBGC of proceedings under Section
                  4042 of ERISA or any successor provision thereof for the
                  termination of, or the appointment of a trustee to administer,
                  any Plan, or the receipt by Seller or any ERISA Affiliate of a
                  notice from a Multiemployer Plan that such action has been
                  taken by PBGC with respect to such Multiemployer Plan;

                        (D) the complete or partial withdrawal from a
                  Multiemployer Plan by Guarantor or any ERISA Affiliate that
                  results in liability under Section 4201 or 4204 of ERISA or
                  any successor provision thereof (including the obligation to

                                      -38-

<PAGE>

                  satisfy secondary liability as a result of a purchaser
                  default) that would have a Material Adverse Effect or the
                  receipt by Guarantor or any ERISA Affiliate of notice from a
                  Multiemployer Plan that it is in reorganization or insolvency
                  pursuant to Section 4241 or 4245 of ERISA or any successor
                  provision thereof or that it intends to terminate or has
                  terminated under Section 4041A of ERISA or any successor
                  provision thereof;

                        (E) the institution of a proceeding by a fiduciary of
                  any Multiemployer Plan against Guarantor or any ERISA
                  Affiliate to enforce Section 515 of ERISA or any successor
                  provision thereof, which proceeding is not dismissed within
                  thirty (30) days; and

                        (F) the adoption of an amendment to any Plan that would
                  result in the loss of tax-exempt status of the trust of which
                  such Plan is a part if Guarantor or an ERISA Affiliate fails
                  to provide timely security to such Plan in accordance with the
                  provisions of Section 401(a)(29) of the Code or Section 307 of
                  ERISA or any successor provision thereof.

      Guarantor will furnish to Buyer, at the time Guarantor furnishes each set
      of financial statements pursuant to paragraphs (a)(1) and (a)(2) above, a
      certificate of a Responsible Officer of Guarantor to the effect that, to
      the best of such Responsible Officer's knowledge, Guarantor during such
      fiscal period or year has observed or performed in all material respects
      all of its covenants and other agreements, and satisfied every condition,
      contained in this Agreement and the other Repurchase Documents to be
      observed, performed or satisfied by it, and that such Responsible Officer
      has obtained no knowledge of any Default or Event of Default except as
      specified in such certificate (and, if any Default or Event of Default has
      occurred and is continuing, describing the same in reasonable detail and
      describing the action Guarantor has taken or proposes to take with respect
      thereto).

(b)   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 Guarantor, Seller or
      any of their respective 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 Repurchase
      Documents or any action to be taken in connection with the transactions
      contemplated hereby, (ii) makes a claim or claims in an aggregate amount
      greater than $1,000,000, or (iii) which, individually or in the aggregate,
      if adversely determined, could be reasonably likely to have a Material
      Adverse Effect.

(c)   Existence, etc. Seller will with respect to itself and shall cause
      Guarantor with respect to Guarantor to:

      (1)   preserve and maintain its legal existence and all of its material
            rights, privileges, licenses and franchises necessary for the
            operation of its business (provided that nothing in this Section

                                      -39-

<PAGE>

            11(c)(1) shall prohibit any transaction expressly permitted under
            Section 11(d));

      (2)   comply with the requirements of all applicable laws, rules,
            regulations and orders of Governmental Authorities (including,
            without limitation, all environmental laws) if failure to comply
            with such requirements could be reasonably likely (either
            individually or in the aggregate) to have a Material Adverse Effect;

      (3)   keep adequate records and books of account, in which complete
            entries will be made in accordance with GAAP consistently applied;

      (4)   not (i) cause or permit any change to be made in its name,
            organizational identification number, identity or corporate
            structure, each as described in Section 10(f) or (ii) change its
            jurisdiction of organization, unless it shall have provided Buyer
            thirty (30) days' prior written notice of such change and shall have
            first taken all action required by Buyer for the purpose of
            perfecting or protecting the lien and security interest of Buyer
            established hereunder;

      (5)   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; and

      (6)   permit representatives of Buyer, upon reasonable notice (unless a
            Default shall have occurred and is continuing, in which case, no
            prior notice shall be required), during normal business hours, to
            examine, copy and make extracts from its books and records, to
            inspect any of its Properties, and to discuss its business and
            affairs with its officers, all to the extent reasonably requested by
            Buyer.

(d)   Prohibition of Fundamental Changes. Except with respect to the Bank
      Charter Event, neither Guarantor nor 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; provided,
      that Seller may merge or consolidate with (i) any wholly owned subsidiary
      of it, or (ii) any other Person if it is the surviving corporation; and
      provided, further, that if after giving effect thereto, no Default would
      exist hereunder.

(e)   Margin Deficit. If at any time there exists a Margin Deficit Seller shall
      cure same in accordance with Section 4.

(f)   Notices. Seller shall give notice to Buyer:

      (1)   promptly upon receipt of notice or knowledge of the occurrence of
            any Default or Event of Default;

      (2)   with respect to any Purchased Asset, promptly upon receipt of any
            principal prepayment (in full or partial) of such Purchased Asset;

                                      -40-

<PAGE>

      (3)   with respect to any Purchased Asset hereunder, promptly upon receipt
            of notice or knowledge that the underlying Mortgaged Property has
            been damaged by waste, fire, earthquake or earth movement, flood,
            tornado or other casualty, or otherwise damaged so as to affect
            adversely the Asset Value of such Purchased Asset;

      (4)   promptly upon receipt of notice or knowledge of (i) any material
            default related to any Purchased Item, (ii) any Lien or security
            interest on, or claim asserted against, any Purchased Item or (iii)
            any event or change in circumstances which could reasonably be
            expected to have a Material Adverse Effect;

      (5)   promptly upon any material change in the market value of any or all
            of Seller's or Guarantor's assets which could reasonably be expected
            to have a Material Adverse Effect; and

      (6)   promptly upon the occurrence of any default or event of default
            under the Existing Financing Facilities.

      Each notice pursuant to this Section shall be accompanied by a statement
      of a Responsible Officer of Seller setting forth details of the occurrence
      referred to therein and stating what action Seller has taken or proposes
      to take with respect thereto.

(g)   Reports. Within forty-five calendar days of the end of each calendar
      quarter, Seller shall provide Buyer with a quarterly report, which report
      shall include, among other items, a summary of such Seller's delinquency
      and loss experience with respect to Mortgage Loans serviced by Seller, any
      Servicer or any designee of either, operating statements and the occupancy
      status of such Mortgaged Property and other property level information,
      plus any such additional reports as Buyer may reasonably request with
      respect to Seller or any Servicer's servicing portfolio or pending
      originations of Mortgage Loans.

(h)   Underwriting Guidelines. All Eligible Assets will conform with the
      Underwriting Guidelines. Seller shall not make any material change in the
      Underwriting Guidelines without the prior written consent of Buyer and
      shall review the Underwriting Guidelines periodically to confirm that they
      are being complied with in all material respects and are adequate to meet
      Seller's business objectives. In the event Seller makes any amendment or
      modification to the Underwriting Guidelines, Seller shall promptly deliver
      to Buyer a complete copy of the amended or modified Underwriting
      Guidelines.

(i)   Transactions with Affiliates. Seller shall not enter into any transaction
      with any Affiliate, including without limitation, any purchase, sale,
      lease or exchange of property or the rendering of any service unless such
      transaction is not otherwise expressly prohibited under this Agreement and
      is 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 except for (i) the acquisition of equity or stock or
      warrants of an Affiliate and (ii) the payment of dividends, in either
      case, in the ordinary course of business, and (iii) the purchase or sale
      of loans in the ordinary course of business which is a true sale and does
      not constitute a fraudulent conveyance. Seller shall not make a payment
      that is not otherwise permitted by this Section 11(i) to any Affiliate. In
      no event shall Seller transfer to Buyer hereunder any Mortgage Loan

                                      -41-

<PAGE>

      acquired by Seller from an Affiliate of Seller unless a True Sale
      Certification has been delivered to Buyer prior to such sale.

(j)   Limitation on Liens. Immediately upon notice of a Lien or any circumstance
      which could give rise to a Lien on the Purchased Items, Seller will defend
      the Purchased Items against, and will take such other action as is
      necessary to remove, any Lien, security interest or claim on or to the
      Purchased Items (other than any security interest created under this
      Agreement), and Seller will defend the right, title and interest of Buyer
      in and to any of the Purchased Items against the claims and demands of all
      persons whomsoever.

(k)   Limitations on Guarantees. Seller shall not create, incur, assume or
      suffer to exist any Guarantees.

(l)   Limitation on Distributions. After the occurrence and during the
      continuation of any Default, Seller shall not make any payment on account
      of, or set apart assets for, a sinking or other analogous fund for the
      purchase, redemption, defeasance, retirement or other acquisition of any
      equity or partnership interest of Seller, 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.

(m)   Maintenance of Profitability. Seller shall not permit, for any period of
      three (3) consecutive calendar months (each such period, a "Test Period"),
      Net Income of either of Seller or Guarantor for such Test Period
      determined on a monthly basis, before income taxes for such Test Period
      and distributions made during such Test Period, to be less than $1.00.

(n)   Maintenance of Tangible Net Worth; Liquidity. Seller shall not permit
      Tangible Net Worth of Seller or Guarantor at any time to be less than the
      sum of (i) $45,000,000 plus (ii) an amount equal to 75% of the aggregate
      positive Net Income (without deduction for quarterly losses) made since
      the Effective Date plus 50% of capital contributions made since the
      Effective Date. In addition, Seller shall maintain at least $7,500,000 of
      Cash at all times.

(o)   Maintenance of Ratio of Total Indebtedness to Tangible Net Worth. Seller
      shall not permit the ratio of Total Indebtedness to Tangible Net Worth of
      either of Seller or Guarantor at any time to be greater than 11:1.

(p)   Servicer; Servicing Information. Seller shall provide to Buyer and to
      Disbursement Agent via Electronic Transmission, a list of Mortgage Loans
      (including each loan number, Mortgagor name and Mortgagor address) on a
      monthly basis by no later than the 10th day following the end of each
      month (the "Reporting Date") containing the following information, on a
      loan-by-loan basis and in the aggregate, with respect to the Purchased
      Assets serviced hereunder by Seller or any Servicer for the month (or any
      portion thereof) prior to the Reporting Date: (i) Mortgage Loans that are
      30 days or more delinquent (including the paid through date and the
      outstanding principal balance of each such Mortgage Loan individually and
      in the aggregate as of the last day of the preceding month) and (ii)

                                      -42-

<PAGE>

      Mortgage Loans that were originated more than 45 days prior to the last
      day of the calendar month preceding the Reporting Date (including the paid
      through date and the outstanding principal balance of each such Mortgage
      Loan individually and in the aggregate as of the last day of the preceding
      month). 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.

(q)   Required Filings. Seller shall promptly provide Buyer with copies of all
      documents which Guarantor, Seller or any Subsidiary of either is required
      to file with any regulatory body in accordance with its regulations.

(r)   Remittance of Prepayments. Seller shall remit or cause to be remitted to
      Buyer, with sufficient detail via Electronic Transmission to enable Buyer
      to appropriately identify the Mortgage Loan to which any amount remitted
      applies, all full or partial principal prepayments on any Purchased Asset
      that Seller has received no later than one (1) Business Day following the
      date such prepayment was received.

(s)   Custodial and Disbursement Agreement and Account Agreement. Seller shall
      maintain each of the Custodial and Disbursement Agreement and Account
      Agreement in full force and effect and shall not amend or modify either of
      the Custodial and Disbursement Agreement or the Account Agreement or waive
      compliance with any provisions thereunder without the prior written
      consent of Buyer.

(t)   Compliance Report. Seller shall provide Buyer together with, and on each
      date it delivers or is required to deliver, financial statements pursuant
      to Section 11(a)(1) or 11(a)(2), in a letter format acceptable to Buyer in
      its sole discretion, a compliance report demonstrating therein the
      calculations Seller utilized to determine its compliance and the
      Guarantor's compliance with the financial covenants set forth in clauses
      (m), (n) and (o) of this Section 11 as of the end of the immediately
      preceding month.

(u)   Sub-Limits. Seller shall not sell to Buyer any Eligible Assets if, after
      giving effect to such Transaction, the aggregate principal balance of all
      Purchased Assets are in excess of any Sub-Limit as set forth in the
      definition of "Asset Value".

(v)   Inconsistent Agreements. Seller will not, and will not permit any of its
      Subsidiaries to, directly or indirectly, enter into any agreement
      containing any provision which would be violated or breached by any
      Transaction hereunder or by the performance by Seller of its obligations
      under any Repurchase Document.

(w)   Escrow Imbalance. Seller will, no later than five (5) Business Days after
      learning (from any source) of any material imbalance in any escrow
      account, fully and completely correct and eliminate such imbalance
      including, without limitation, depositing its own funds into such account
      to eliminate any overdrawal or deficit.

(x)   Independence of Covenants. All covenants hereunder shall be given
      independent effect so that if a particular action or condition is not
      permitted by any of such covenants, the fact that it would be permitted by
      an exception to, or be otherwise within the limitations of, another

                                      -43-

<PAGE>

      covenant shall not avoid the occurrence of an Event of Default or Default
      if such action is taken or condition exists.

12.   EVENTS OF DEFAULT

      If any of the following events (each, an "Event of Default") occur, Seller
      and Buyer shall have the rights set forth in Section 13, as applicable:

(a)   Seller shall default in the payment of any Repurchase Price due or any
      amount under Section 5 when due (whether at stated maturity, upon
      acceleration or at mandatory or optional prepayment); or

(b)   Seller shall default in the payment of any other amount payable by it
      hereunder or under any other Repurchase Document after notification by
      Buyer of such default, and such default shall have continued unremedied
      for one (1) Business Day; or

(c)   any representation, warranty or certification made or deemed made herein
      or in any other Repurchase Document by Seller or any certificate furnished
      to Buyer pursuant to the provisions hereof or thereof or any information
      with respect to the Mortgage Loans furnished in writing by on behalf of
      Seller shall prove to have been false or misleading in any material
      respect as of the time made or furnished (other than the representations
      and warranties set forth in Schedule 1, which shall be considered solely
      for the purpose of determining the Asset Value of the Purchased Assets,
      unless (i) Seller shall have made any such representations and warranties
      with actual knowledge that they were materially false or misleading at the
      time made; or (ii) any such representations and warranties have been
      determined in good faith by Buyer in its sole discretion to be materially
      false or misleading on a regular basis); or

(d)   Seller shall fail to comply with the requirements of Section 11(c) through
      Section 11(f), or Sections 11(g) through 11(t); or except as otherwise set
      forth in Sections 12(a), 12(b), 12(c), or 12(d), Seller shall fail to
      observe or perform any other covenant or agreement contained in this
      Agreement or any other Repurchase Document and such failure to observe or
      perform shall continue unremedied for a period of 10 Business Days; or

(e)   a final judgment or judgments for the payment of money in excess of
      $250,000 in the aggregate shall be rendered against 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; or

(f)   an Act of Insolvency shall have occurred with respect to Seller or any of
      its Affiliates; or

(g)   the Custodial and Disbursement Agreement, the Account Agreement or any
      Repurchase Document shall for whatever reason be terminated or cease to be
      in full force and effect, or the enforceability thereof shall be contested
      by Seller; or

                                      -44-

<PAGE>

(h)   Seller shall grant, or suffer to exist, any Lien on any Purchased Item
      (except any Lien in favor of Buyer); or the Purchased Items shall not have
      been sold to Buyer, or the Liens contemplated hereby shall cease or fail
      to be first priority perfected Liens on any Purchased Items in favor of
      Buyer or shall be Liens in favor of any Person other than Buyer; or

(i)   Seller or any of Seller's Affiliates shall be in default under (i) any
      Indebtedness 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, (ii) any other contract 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, or
      (iii) any Seller-Related Obligation; or

(j)   any material adverse change in the Property, business or financial
      condition of Seller or any of its Affiliates shall occur, in each case as
      determined by Buyer in its sole discretion, or any other condition shall
      exist which, in Buyer's sole discretion, constitutes a material impairment
      of Seller's ability to perform its obligations under this Agreement or any
      other Repurchase Document; or

(k)   (i) any Person shall engage in any "prohibited transaction" (as defined in
      Section 406 of ERISA or Section 4975 of the Code) involving any Plan, (ii)
      any material "accumulated funding deficiency" (as defined in Section 302
      of ERISA), whether or not waived, shall exist with respect to any Plan or
      any Lien in favor of the PBGC or a Plan shall arise on the assets of
      Seller or any Commonly Controlled Entity, (iii) a Reportable Event shall
      occur with respect to, or proceedings shall commence to have a trustee
      appointed, or a trustee shall be appointed, to administer or to terminate,
      any Plan, which Reportable Event or commencement of proceedings or
      appointment of a trustee is, in the reasonable opinion of Buyer, likely to
      result in the termination of such Plan for purposes of Title IV of ERISA,
      (iv) any Plan shall terminate for purposes of Title IV of ERISA, (v)
      Seller or any Commonly Controlled Entity shall, or in the reasonable
      opinion of Buyer is likely to, incur any liability in connection with a
      withdrawal from, or the insolvency or reorganization of, a Multiemployer
      Plan or (vi) any other event or condition shall occur or exist with
      respect to a Plan; and in each case in clauses (i) through (vi) above,
      such event or condition, together with all other such events or
      conditions, if any, could reasonably be expected to have a Material
      Adverse Effect; or

(l)   upon any event of default or event which, with the passage of time or
      expiration of any grace periods, would constitute an event of default
      under the Existing Financing Facilities; or

(m)   any of the events specified in Section 3(b)(10) have occurred.

                                      -45-

<PAGE>

13.   REMEDIES

(a)   If an Event of Default occurs, the following rights and remedies are
      available to Buyer; provided, that an Event of Default shall be deemed to
      be continuing unless expressly waived by Buyer in writing.

      (1)   At the option of Buyer, exercised by written notice to Seller (which
            option shall be deemed to have been exercised, even if no notice is
            given, immediately upon the occurrence of an Act of Insolvency of
            Seller), the Repurchase Date for each Transaction hereunder, if it
            has not already occurred, shall be deemed immediately to occur.
            Buyer shall (except upon the occurrence of an Act of Insolvency of
            Seller) give notice to Seller of the exercise of such option as
            promptly as practicable.

      (2)   If Buyer exercises or is deemed to have exercised the option
            referred to in subsection (a)(1) of this Section 13,

                        (A) Seller's obligations in such Transactions to
                  repurchase all Purchased Assets, at the Repurchase Price
                  therefor on the Repurchase Date, (1) shall thereupon become
                  immediately due and payable, (2) all Income paid after such
                  exercise or deemed exercise shall be retained by Buyer and
                  applied to the aggregate unpaid Repurchase Prices and any
                  other amounts owed by Seller hereunder, and (3) Seller shall
                  immediately deliver to Buyer any Purchased Assets subject to
                  such Transactions then in Seller's possession or control;

                        (B) to the extent permitted by applicable law, the
                  Repurchase Price with respect to each such Transaction shall
                  be increased by the aggregate amount obtained by daily
                  application of, on a 360 day per year basis for the actual
                  number of days during the period from and including the date
                  of the exercise or deemed exercise of such option to but
                  excluding the date of payment of the Repurchase Price, (x) the
                  Post-Default Rate to (y) the Repurchase Price for such
                  Transaction as of the Repurchase Date (decreased as of any day
                  by (i) any amounts actually in the possession of Buyer
                  pursuant to clause (C) of this subsection, (ii) any proceeds
                  from the sale of Purchased Assets applied to the Repurchase
                  Price pursuant to subsection (a)(4) of this Section 13, and
                  (iii) any amounts applied to the Repurchase Price pursuant to
                  subsection (a)(4) of this Section 13); and

                        (C) all Income actually received by Buyer pursuant to
                  Section 5 (excluding any Late Payment Fees paid pursuant to
                  Section 5(b)) shall be applied to the aggregate unpaid
                  Repurchase Price owed by Seller.

      (3)   Upon the occurrence of one or more Events of Default, Buyer shall
            have the right to obtain physical possession of the Servicing
            Records (subject to the provisions of the Custodial and Disbursement
            Agreement) and all other files of Seller relating to the Purchased

                                      -46-

<PAGE>

            Assets and all documents relating to the Purchased Assets which are
            then or may thereafter come in to the possession of Seller or any
            third party acting for Seller and Seller shall deliver to Buyer such
            assignments as Buyer shall request and Buyer shall have the right to
            appoint any Person to act as Servicer for the Purchased Assets.
            Buyer shall be entitled to specific performance of all agreements of
            Seller contained in the Repurchase Documents.

      (4)   At any time on the Business Day following notice to Seller (which
            notice may be the notice given under subsection (a)(1) of this
            Section 13), in the event Seller has not repurchased all Purchased
            Assets, Buyer may (A) immediately sell, without demand or further
            notice of any kind, at a public or private sale and at such price or
            prices as Buyer may deem satisfactory any or all Purchased Assets
            subject to such Transactions hereunder and apply the proceeds
            thereof to the aggregate unpaid Repurchase Price and any other
            amounts owing by Seller hereunder or (B) in its sole discretion
            elect, in lieu of selling all or a portion of such Purchased Assets,
            to give Seller credit for such Purchased Assets in an amount equal
            to the Market Value of the Purchased Assets against the aggregate
            unpaid Repurchase Price and any other amounts owing by Seller
            hereunder. The proceeds of any disposition of Purchased Assets shall
            be applied first to the costs and expenses incurred by Buyer in
            connection with Seller's default; second to costs of related
            covering and/or related hedging transactions; third to the
            Repurchase Price; and fourth to any other outstanding obligation of
            Seller to Buyer or its Affiliates.

      (5)   Seller agrees that Buyer may obtain an injunction or an order of
            specific performance to compel Seller to fulfill its obligations as
            set forth in Section 24, if Seller fails or refuses to perform its
            obligations as set forth therein.

      (6)   Seller shall be liable to Buyer, payable as and when incurred by
            Buyer, for (A) the amount of all actual out-of-pocket expenses,
            including legal or other expenses incurred by Buyer in connection
            with or as a consequence of an Event of Default, and (B) all costs
            incurred in connection with hedging or covering transactions.

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

(b)   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)(1) and (4) of this Section 13, 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.

(c)   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. 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
      Purchased Items, or from any other election of remedies. Seller recognizes
      that nonjudicial remedies are consistent with the usages of the trade, are

                                      -47-

<PAGE>

      responsive to commercial necessity and are the result of a bargain at
      arm's-length.

(d)   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 to Buyer
      under this paragraph 13(d) shall be at a rate equal to the Post-Default
      Rate.

14.   INDEMNIFICATION AND EXPENSES

(a)   Seller agrees to hold Buyer and its Affiliates and their present and
      former respective officers, directors, employees, agents, advisors and
      other representatives (each, an "Indemnified Party") harmless from and
      indemnify any Indemnified Party against all liabilities, losses, damages,
      judgments, costs and expenses of any kind which may be imposed on,
      incurred by or asserted against such Indemnified Party (including
      counsel's fees and disbursements) (collectively, "Costs"), relating to or
      arising out of this Agreement, any other Repurchase Document or any
      transaction contemplated hereby or thereby, or any amendment, supplement
      or modification of, or any waiver or consent under or in respect of, this
      Agreement, any other Repurchase Document or any transaction contemplated
      hereby or thereby, that, in each case, results from anything other than
      the Indemnified Party's gross negligence or willful misconduct. Without
      limiting the generality of the foregoing, Seller agrees to hold any
      Indemnified Party harmless from and indemnify such Indemnified Party
      against all Costs with respect to all Mortgage Loans relating to or
      arising out of any violation or alleged violation of any environmental
      law, rule or regulation or any consumer credit laws, including without
      limitation the federal Truth in Lending Act and/or the federal Real Estate
      Settlement Procedures Act, that, in each case, results from anything other
      than the Indemnified Party's gross negligence or willful misconduct. In
      any suit, proceeding or action brought by an Indemnified Party in
      connection with any Mortgage Loan for any sum owing thereunder, or to
      enforce any provisions of any Mortgage Loan, Seller will save, indemnify
      and hold such Indemnified Party harmless from and against all expense,
      loss or damage suffered by reason of any defense, set-off, counterclaim,
      recoupment or reduction or liability whatsoever of the account debtor or
      obligor thereunder, arising out of a breach by Seller of any obligation
      thereunder or arising out of any other agreement, indebtedness or
      liability at any time owing to or in favor of such account debtor or
      obligor or its successors from Seller. Seller also agrees to reimburse an
      Indemnified Party as and when billed by such Indemnified Party for all the
      Indemnified Party's costs and expenses incurred in connection with the
      enforcement or the preservation of Buyer's rights under this Agreement,
      any other Repurchase Document or any transaction contemplated hereby or
      thereby, including without limitation the fees and disbursements of its
      counsel.

(b)   Seller agrees to pay as and when billed by Buyer all of the out-of-pocket
      costs and expenses (including legal fees and any costs associated with any
      upfront due diligence costs, including appraisals) incurred by Buyer in
      connection with the development, preparation and execution of this
      Agreement, any other Repurchase Document or any other documents prepared

                                      -48-

<PAGE>

      in connection herewith or therewith; provided that such expenses shall not
      exceed $85,000 without the prior written consent of Seller which consent
      shall not be unreasonably withheld. Seller agrees to pay as and when
      billed by Buyer all of the out-of-pocket costs and expenses incurred in
      connection with the consummation and administration of the transactions
      contemplated hereby and thereby including without limitation all fees,
      disbursements and expenses of counsel to Buyer which amount shall be
      deducted from the Purchase Price paid for the first Transaction hereunder
      and all initial set-up costs with the Custodian and the Disbursement
      Agent. Seller agrees to pay as and when billed by Buyer all of the
      out-of-pocket costs and expenses (including legal fees) incurred by Buyer
      in connection with the development, preparation and execution of any
      amendment, supplement or modification to this Agreement, any other
      Repurchase Document or any other documents prepared in connection
      therewith. Subject to the limitations set forth in Section 27, Seller
      agrees to pay Buyer all the out of pocket due diligence, inspection,
      appraisals, testing and review costs and expenses incurred by Buyer with
      respect to Mortgage Loans submitted by Seller for purchase under this
      Agreement, including, but not limited to, those out of pocket costs and
      expenses incurred by Buyer pursuant to Sections 24 and 27.

15.   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 upon notice to the other party of such recording. 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.

16.   SINGLE AGREEMENT

      Buyer and Seller acknowledge that, and have entered hereinto 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 that each has been entered into
      in consideration of the other Transactions. 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 Transaction
      hereunder; (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 and (iv) to promptly provide notice to the other
      after any such set off or application.

                                      -49-

<PAGE>

17.   NOTICES AND OTHER COMMUNICATIONS

      Except as otherwise expressly permitted by this Agreement, all notices,
      requests and other communications provided for herein and under the
      Custodial and Disbursement Agreement (including without limitation any
      modifications of, or waivers, requests or consents under, this Agreement)
      shall be given or made in writing (including without limitation by email,
      telex or telecopy) delivered to the intended recipient at the "Address for
      Notices" specified below its name on the signature pages hereof or
      thereof); or, as to any party, at such other address as shall be
      designated by such party in a written notice to each other party. Except
      as otherwise provided in this Agreement and except for notices given under
      Section 3 (which shall be effective only on receipt), all such
      communications shall be deemed to have been duly given when transmitted by
      telecopy or personally delivered or, in the case of a mailed notice, upon
      receipt.

18.   ENTIRE AGREEMENT; SEVERABILITY

      This Agreement together with the other Repurchase Documents and the
      Account Agreement constitute the entire understanding between Buyer and
      Seller with respect to the subject matter it covers and shall supersede
      any existing agreements between the parties containing general terms and
      conditions for repurchase transactions involving Purchased Assets. By
      acceptance of this Agreement, Buyer and Seller acknowledge that they have
      not made, and are not relying upon, any statements, representations,
      promises or undertakings not contained in this Agreement or the other
      Repurchase Documents. 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.

19.   NON-ASSIGNABILITY

      The rights and obligations of the parties under this Agreement and under
      any Transaction shall not be assigned by Seller without the prior written
      consent of Buyer, and any attempted assignment without such consent shall
      be null and void. Subject to the foregoing, this Agreement and any
      Transactions shall be binding upon and shall inure to the benefit of the
      parties and their respective successors and assigns. Nothing in this
      Agreement express or implied, shall give to any person, other than the
      parties to this Agreement and their successors hereunder, any benefit of
      any legal or equitable right, power, remedy or claim under this Agreement.

20.   TERMINABILITY

      This Agreement may be terminated by Seller upon 30 days written notice to
      Buyer upon payment to Buyer of the Termination Fee except that this
      Agreement shall, notwithstanding termination, remain applicable to any
      Transaction then outstanding. Each representation and warranty made or
      deemed to be made by entering into a Transaction, herein or pursuant
      hereto shall survive the making of such representation and warranty, and
      Buyer shall not be deemed to have waived any Default that may arise
      because any such representation or warranty shall have proved to be false
      or misleading, notwithstanding that Buyer may have had notice or knowledge

                                      -50-

<PAGE>

      or reason to believe that such representation or warranty was false or
      misleading at the time the Transaction was made. Notwithstanding any such
      termination or the occurrence of an Event of Default, all of the
      representations and warranties and covenants hereunder shall continue and
      survive. The obligations of Seller under Section 14 and under this Section
      20 with respect to the payment of the Termination Fee shall survive the
      termination of this Agreement.

21.   GOVERNING LAW

      THIS AGREEMENT SHALL BE GOVERNED AND CONSTRUED IN ACCORDANCE WITH THE LAWS
      OF THE STATE OF NEW YORK WITHOUT REGARD TO THE CONFLICTS OF LAW
      PRINCIPLES.

22.   SUBMISSION TO JURISDICTION; WAIVERS

      EACH OF BUYER AND SELLER HEREBY IRREVOCABLY AND UNCONDITIONALLY:

(A)   SUBMITS FOR ITSELF AND ITS PROPERTY IN ANY LEGAL ACTION OR PROCEEDING
      RELATING TO THIS AGREEMENT AND THE OTHER REPURCHASE DOCUMENTS, OR FOR
      RECOGNITION AND ENFORCEMENT OF ANY JUDGMENT IN RESPECT THEREOF, TO THE
      EXCLUSIVE GENERAL JURISDICTION OF THE COURTS OF THE STATE OF NEW YORK
      SITTING IN THE BOROUGH OF MANHATTAN, THE FEDERAL COURTS OF THE UNITED
      STATES OF AMERICA FOR THE SOUTHERN DISTRICT OF NEW YORK, AND APPELLATE
      COURTS FROM ANY THEREOF;

(B)   CONSENTS THAT ANY SUCH ACTION OR PROCEEDING MAY BE BROUGHT IN SUCH COURTS
      AND, TO THE EXTENT PERMITTED BY LAW, WAIVES ANY OBJECTION THAT IT MAY NOW
      OR HEREAFTER HAVE TO THE VENUE OF ANY SUCH ACTION OR PROCEEDING IN ANY
      SUCH COURT OR THAT SUCH ACTION OR PROCEEDING WAS BROUGHT IN AN
      INCONVENIENT COURT AND AGREES NOT TO PLEAD OR CLAIM THE SAME;

(C)   AGREES THAT SERVICE OF PROCESS IN ANY SUCH ACTION OR PROCEEDING MAY BE
      EFFECTED BY MAILING A COPY THEREOF BY REGISTERED OR CERTIFIED MAIL (OR ANY
      SUBSTANTIALLY SIMILAR FORM OF MAIL), POSTAGE PREPAID, TO ITS ADDRESS SET
      FORTH UNDER ITS SIGNATURE BELOW OR AT SUCH OTHER ADDRESS OF WHICH BUYER
      SHALL HAVE BEEN NOTIFIED;

(D)   AGREES THAT NOTHING HEREIN SHALL AFFECT THE RIGHT TO EFFECT SERVICE OF
      PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR SHALL LIMIT THE RIGHT TO
      SUE IN ANY OTHER JURISDICTION; AND

                                      -51-

<PAGE>

(E)   WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY AND ALL
      RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING
      TO THIS AGREEMENT, ANY OTHER REPURCHASE DOCUMENT OR THE TRANSACTIONS
      CONTEMPLATED HEREBY OR THEREBY.

23.   NO WAIVERS, ETC.

      No failure on the part of Buyer to exercise and no delay in exercising,
      and no course of dealing with respect to, any right, power or privilege
      under any Repurchase Document shall operate as a waiver thereof, nor shall
      any single or partial exercise of any right, power or privilege under any
      Repurchase Document preclude any other or further exercise thereof or the
      exercise of any other right, power or privilege. The remedies provided
      herein are cumulative and not exclusive of any remedies provided by law.
      An Event of Default shall be deemed to be continuing unless expressly
      waived by Buyer in writing.

24.   SERVICING

(a)   Seller covenants to maintain or cause the servicing of the Mortgage Loans
      to be maintained in conformity with accepted and prudent servicing
      practices in the industry for the same type of mortgage loans as the
      Mortgage Loans and in a manner at least equal in quality to the servicing
      Seller provides for mortgage loans which it owns. In the event that the
      preceding language is interpreted as constituting one or more servicing
      contracts, each such servicing contract shall terminate automatically upon
      the earliest of (i) an Event of Default, (ii) the date on which this
      Agreement terminates or (iii) the transfer of servicing approved by Buyer.

(b)   If the Mortgage Loans are serviced by Seller, Seller agrees that Buyer is
      the owner of all servicing records, including but not limited to any and
      all servicing agreements, files, documents, records, data bases, computer
      tapes, copies of computer tapes, proof of insurance coverage, insurance
      policies, appraisals, other closing documentation, payment history
      records, and any other records relating to or evidencing the servicing of
      the Mortgage Loans (the "Servicing Records"). Seller covenants to
      safeguard such Servicing Records and to deliver them promptly to Buyer or
      its designee (including Custodian) at Buyer's request.

(c)   If the Mortgage Loans are serviced by a person other than Seller (such
      third party the "Servicer"), Seller (i) shall, in accordance with Section
      (3)(b)(7), provide a copy of the servicing agreement to Buyer, which shall
      be in form and substance acceptable to Buyer (the "Servicing Agreement"),
      and shall provide a Servicer Notice to the Buyer substantially in the form
      of Exhibit VIII hereto, fully executed by Seller and the Servicer; and
      (ii) hereby irrevocably assigns to Buyer and Buyer's successors and
      assigns all right, title and interest of Seller in, to and under, and the
      benefits of, any Servicing Agreement with respect to the Mortgage Loans.
      Seller agrees that no Person shall assume the servicing obligations with
      respect to the Mortgage Loans as successor to the Servicer unless such

                                      -52-

<PAGE>

      successor is approved in writing by Buyer prior to such assumption of
      servicing obligations.

(d)   If the servicer of the Mortgage Loans is Seller, upon the occurrence of an
      Event of Default, Buyer shall have the right to terminate the Seller as
      servicer of the Mortgage Loans and transfer servicing to its designee, at
      no cost or expense to Buyer, at any time thereafter. If the servicer of
      the Mortgage Loans is not Seller, Buyer shall have the right, as
      contemplated in the applicable Servicer Notice, upon the occurrence of an
      Event of Default, to terminate any applicable Servicing Agreement and
      transfer servicing to its designee, at no cost or expense to Buyer, it
      being agreed that Seller will pay any and all fees required to terminate
      such Servicing Agreement and to effectuate the transfer of servicing to
      the designee of Buyer.

(e)   After the Purchase Date, until the repurchase of any Mortgage Loan, Seller
      will have no right to modify or alter the terms of such Mortgage Loan and
      Seller will have no obligation or right to repossess such Mortgage Loan or
      substitute another Mortgage Loan, in each case except as provided in the
      Custodial and Disbursement Agreement.

(f)   In the event Seller or its Affiliate is servicing the Mortgage Loans,
      Seller shall permit Buyer to inspect Seller's or its Affiliate's servicing
      facilities, as the case may be, for the purpose of satisfying Buyer that
      Seller or its Affiliate, as the case may be, has the ability to service
      the Mortgage Loans as provided in this Agreement.

25.   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 (except insofar as the type of Purchased Assets subject to such
      Transaction or the term of such Transaction would render such definition
      inapplicable), and a "securities contract" as that term is defined in
      Section 741 of Title 11 of the United States Code, as amended (except
      insofar as the type of Purchased Assets subject to such Transaction would
      render such definition inapplicable).

(b)   It is understood that either party's right to liquidate Purchased Assets
      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 Purchased Assets subject to such Transaction would render such
      definition inapplicable).

(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

                                      -53-

<PAGE>

      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 or regulations
      promulgated thereunder).

26.   PERIODIC DUE DILIGENCE REVIEW

      Seller acknowledges that Buyer has the right to perform continuing due
      diligence reviews with respect to 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 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 Seller Asset 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 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. Buyer shall pay all out-of-pocket costs and expenses incurred
      by Buyer in connection with Buyer's activities pursuant to this Section 26
      ("Due Diligence Costs"); provided that, in the event that a Default or an
      Event of Default shall have occurred, Seller shall reimburse Buyer for all
      Due Diligence Costs for any and all reasonable out-of-pocket costs and
      expenses incurred by Buyer in connection with Buyer's activities pursuant
      to this Section 26.

27.   BUYER'S APPOINTMENT AS ATTORNEY-IN-FACT

(a)   Seller hereby irrevocably constitutes and appoints Buyer and any officer
      or agent thereof, with full power of substitution, as its true and lawful
      attorney-in-fact with full irrevocable power and authority in the place
      and stead of Seller and in the name of Seller or in its own name, from
      time to time in Buyer's discretion, for the purpose of carrying out the
      terms of this Agreement, to take any and all appropriate action and to
      execute any and all documents and instruments which may be reasonably
      necessary or desirable to accomplish the purposes of this Agreement, and,
      without limiting the generality of the foregoing, Seller hereby gives

                                      -54-

<PAGE>

      Buyer the power and right, on behalf of Seller, without assent by, but
      with notice to, Seller, to do the following:

      (1)   in the name of Seller, or in its own name, or otherwise, to take
            possession of and endorse and collect any checks, drafts, notes,
            acceptances or other instruments for the payment of moneys due under
            any mortgage insurance or with respect to any other Purchased Items
            and to file any claim or to take any other action or proceeding in
            any court of law or equity or otherwise deemed appropriate by Buyer
            for the purpose of collecting any and all such moneys due under any
            such mortgage insurance or with respect to any other Purchased Items
            whenever payable;

      (2)   to pay or discharge taxes and Liens levied or placed on or
            threatened against the Purchased Items;

      (3)   (A) to direct any party liable for any payment under any Purchased
            Items to make payment of any and all moneys due or to become due
            thereunder directly to Buyer or as Buyer shall direct; (B) to ask or
            demand for, collect, receive payment of and receipt for, any and all
            moneys, claims and other amounts due or to become due at any time in
            respect of or arising out of any Purchased Items; (C) to sign and
            endorse any invoices, assignments, verifications, notices and other
            documents in connection with any Purchased Items; (D) to commence
            and prosecute any suits, actions or proceedings at law or in equity
            in any court of competent jurisdiction to collect the Purchased
            Items or any proceeds thereof and to enforce any other right in
            respect of any Purchased Items; (E) to defend any suit, action or
            proceeding brought against Seller with respect to any Purchased
            Items; (F) to settle, compromise or adjust any suit, action or
            proceeding described in clause (E) above and, in connection
            therewith, to give such discharges or releases as Buyer may deem
            appropriate; and (G) generally, to sell, transfer, pledge and make
            any agreement with respect to or otherwise deal with any Purchased
            Items as fully and completely as though Buyer were the absolute
            owner thereof for all purposes, and to do, at Buyer's option and
            Seller's expense, at any time, and from time to time, all acts and
            things which Buyer deems necessary to protect, preserve or realize
            upon the Purchased Items and Buyer's Liens thereon and to effect the
            intent of this Agreement, all as fully and effectively as such
            Seller might do;

      (4)   to direct the actions of Custodian with respect to the Purchased
            Items under the Custodial and Disbursement Agreement; and

      (5)   to execute, from time to time, in connection with any sale provided
            for in Section 13, any endorsements, assignments or other
            instruments of conveyance or transfer with respect to the Purchased
            Items.

      Seller hereby ratifies all that said attorneys shall lawfully do or cause
      to be done by virtue hereof. This power of attorney is a power coupled
      with an interest and shall be irrevocable.

                                      -55-

<PAGE>

(b)   The powers conferred on Buyer hereunder are solely to protect Buyer's
      interests in the Purchased Items and Purchase Assets and shall not impose
      any duty upon it to exercise any such powers. Buyer shall be accountable
      only for amounts that it actually receives as a result of the exercise of
      such powers, and neither it nor any of its officers, directors, employees
      or agents shall be responsible to Seller for any act or failure to act
      hereunder, except for its or their own gross negligence or willful
      misconduct.

28.   MISCELLANEOUS

(a)   If there is any conflict between the terms of this Agreement or any
      Transaction entered into hereunder and the Custodial and Disbursement
      Agreement, this Agreement shall prevail.

(b)   This Agreement may be executed in any number of counterparts, all of which
      taken together shall constitute one and the same instrument, and any of
      the parties hereto may execute this Agreement by signing any such
      counterpart.

(c)   The captions and headings appearing herein are for included solely for
      convenience of reference and are not intended to affect the interpretation
      of any provision of this Agreement.

(d)   Seller hereby acknowledges that:

      (1)   it has been advised by counsel in the negotiation, execution and
            delivery of this Agreement and the other Repurchase Documents;

      (2)   Buyer has no fiduciary relationship to Seller; and

      (3)   no joint venture exists between Buyer and Seller.

29.   CONFIDENTIALITY

      Seller hereby acknowledges and agrees that all information regarding the
      terms set forth in any of the Repurchase Documents or the Transactions
      contemplated thereby (the "Confidential Terms") shall be kept confidential
      by it, the Guarantor and the Buyer and shall not be divulged to any party
      without the prior written consent of such other party except to the extent
      that (i) it is necessary to do so in working with legal counsel, auditors,
      taxing authorities or other governmental agencies or regulatory bodies or
      in order to comply with any applicable federal or state laws, (ii) any of
      the Confidential Terms are in the public domain other than due to a breach
      of this covenant, or (iii) in the event of a Default or an Event of
      Default, Buyer determines such information to be necessary or desirable to
      disclose in connection with the marketing and sales of the Purchased
      Assets or otherwise to enforce or exercise Buyer's rights hereunder. The
      provisions set forth in this Section 29 shall survive the termination of
      this Agreement for a period of one year following such termination.

                                      -56-

<PAGE>

30.   CONFLICTS

      In the event of any conflict between the terms of this Agreement, any
      other Repurchase Document and any Confirmation, the documents shall
      control in the following order of priority: first, the terms of the
      Confirmation shall prevail, second, the terms of this Agreement shall
      prevail, and third, the terms of the other Repurchase Documents shall
      prevail.

31.   SET-OFF

      In addition to any rights and remedies of Buyer provided by this Agreement
      and by law, Buyer shall have the right, without prior notice to Seller,
      any such notice being expressly waived by Seller to the extent permitted
      by applicable law, upon any amount becoming due and payable by Seller to
      Buyer hereunder or otherwise (whether at the stated maturity, by
      acceleration or otherwise) to set-off and appropriate and apply against
      such amount any and all monies and other property of Seller, any and all
      deposits (general or special, time or demand, provisional or final), in
      any currency, and any and all other credits, indebtedness or claims, in
      any currency, in each case whether direct or indirect, absolute or
      contingent, matured or unmatured, and in each case at any time held or
      owing by Buyer or any Affiliate thereof to or for the credit or the
      account of Seller. Buyer agrees promptly to notify Seller after any such
      set-off and application made by Buyer; provided that the failure to give
      such notice shall not affect the validity of such set-off and application.

                            [SIGNATURE PAGE FOLLOWS]

                                      -57-

<PAGE>

            IN WITNESS WHEREOF, the parties have entered into this Agreement as
of the date set forth above.

                                      BUYER:
                                      -----

                                      CDC MORTGAGE CAPITAL INC.

                                      By: /s/ Joe Piscina
                                          -------------------------------------
                                          Name:  Joe Piscina
                                          Title: Managing Director

                                      By: /s/ William Branagh
                                          -------------------------------------
                                          Name:  William Branagh
                                          Title: Director

Address for Notices:                      with a copy to:
-------------------
9 West 57th Street                        9 West 57th Street
New York, NY 10019                        New York, NY 10019
Attn: Ray Sullivan                        Attn:  Al Zakes, Esq., General Counsel
                                          Telecopier No.:  (212) 891-1922
Telecopier No.:  (212) 891-3347           Telephone No.:  (212) 891-6137
Telephone No.:  (212) 891-5815            Email:  albert.zakes@cdcixis-cmna.com
Email:  r.sullivan@cdcixis-cmna.com

<PAGE>

                                          SELLER:
                                          ------

                                          AMERICAN HOME MORTGAGE CORP.

                                          By: /s/ Michael Strauss
                                              ---------------------------------
                                              Name:  Michael Strauss
                                              Title: President

                                          Address for Notices:
                                          -------------------
                                              520 Broadhollow Road,
                                              Melville, New York 11747
                                              Attn:
                                              Telecopier No.:
                                              Telephone No:
                                              Email:

<PAGE>

                                                                      SCHEDULE 1
                                                                      ----------

                REPRESENTATIONS AND WARRANTIES RE: MORTGAGE LOANS

                       PART I: RESIDENTIAL MORTGAGE LOANS

Seller represents and warrants to Buyer, with respect to each Mortgage Loan,
that as of the Purchase Date for the purchase of any Purchased Assets by Buyer
from Seller and as of the date of this Agreement and any Transaction hereunder
and at all times while the Repurchase Documents and any Transaction hereunder is
in full force and effect. For purposes of this Schedule 1 and the
representations and warranties set forth herein, a breach of a representation or
warranty shall be deemed to have been cured with respect to a Mortgage Loan if
and when Seller has taken or caused to be taken action such that the event,
circumstance or condition that gave rise to such breach no longer adversely
affects such Mortgage Loan.

      (1)   Mortgage Loans. The information set forth in the Seller Asset
            Schedule is complete, true and correct;

      (2)   Payments Current. All payments required to be made up to the related
            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 for 30 days or more. The first and second
            Monthly Payments 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;

      (3)   No Outstanding Charges. There are no defaults in complying with the
            terms of the Mortgage securing the Mortgage Loan, and all taxes,
            governmental assessments, insurance premiums, water, sewer or
            municipal charges 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. Except for (A)
            payments in the nature of escrow payments and (B) interest accruing
            from the date of the Mortgage Note or date of disbursement of the
            Mortgage proceeds, whichever is greater to the day which precedes by
            one month the Due Date of the first installment of principal and
            interest, including, without limitation, taxes and insurance
            payments, Seller has not 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
            Mortgage Loan proceeds, whichever is earlier, to the day which
            precedes by one month the Due Date of the first installment of
            principal and interest;

      (4)   Original Terms Unmodified. The terms of the Mortgage Note and
            Mortgage have not been impaired, waived, altered or modified in any
            respect, except by a written instrument which has been recorded, if
            necessary to protect the interests of Buyer and which has been

                                    Exh. IX-1

<PAGE>

            delivered to Custodian and the terms of which are reflected in the
            Seller Asset Schedule. The substance of any such waiver, alteration
            or modification has been approved by the title insurer, to the
            extent required by the policy, and its terms are reflected on the
            Seller Asset Schedule. No Mortgagor 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 the policy, and
            which assumption agreement is part of the Mortgage File delivered to
            Custodian and the terms of which are reflected in the Seller Asset
            Schedule;

      (5)   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, or subject to any right
            of rescission, set-off, counterclaim or defense, including without
            limitation the defense of usury, and no such right of rescission,
            set-off, counterclaim or defense has been asserted with respect
            thereto, and no Mortgagor was a debtor in any state or federal
            bankruptcy or insolvency proceeding at, or subsequent to, the time
            the Mortgage Loan was originated;

      (6)   Hazard Insurance. With respect to a Mortgage Loan which is not a
            Co-op Loan, pursuant to the terms of the Mortgage, all buildings or
            other improvements upon the Mortgaged Property are insured by a
            generally acceptable insurer against loss by fire, hazards of
            extended coverage and such other hazards as are customary in the
            area where the Mortgaged Property is located pursuant to insurance
            policies conforming to the requirements of Fannie Mae and Freddie
            Mac in an amount not less than the greatest of (i) 100% of the
            replacement cost of all improvements to the Mortgaged Property or
            (ii) the outstanding principal balance of the Mortgage Loan, but in
            any event at least equal to 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 that
            required by Fannie Mae and Freddie Mac. If upon origination of the
            Mortgage Loan, the Mortgaged Property was in an area identified in
            the Federal Register by the Federal Emergency Management Agency as
            having special flood hazards (and such flood insurance has been made
            available) a flood insurance policy meeting the requirements of the
            current guidelines of the Federal Flood Insurance Administration is
            in effect which policy conforms to the requirements of Fannie Mae
            and Freddie Mac. All individual insurance policies contain a
            standard mortgagee clause naming Seller and its successors and
            assigns as mortgagee, and all premiums thereon have been paid and
            such policies may not be reduced, terminated or cancelled without 30
            days' prior written notice to the mortgagee. The Mortgage obligates
            the Mortgagor thereunder to maintain the hazard insurance policy at
            the Mortgagor's cost and expense, and on the Mortgagor's failure to
            do so, authorizes the holder of the Mortgage to obtain and maintain
            such insurance at such Mortgagor's cost and expense, and to seek
            reimbursement therefor from the Mortgagor. Where required by state
            law or regulation, the Mortgagor has been given an opportunity to

                                   Exh. IX-2

<PAGE>
            choose the carrier of the required hazard insurance, provided the
            policy is not a "master" or "blanket" 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, is in full force and effect, and will be in full force and
            effect and inure to the benefit of Buyer upon the consummation of
            the transactions contemplated by this Agreement. Seller has not
            engaged in, and has no knowledge of the Mortgagor's or any
            subservicer's having engaged in, any act or omission which would
            impair the coverage of any such policy, the benefits of the
            endorsement provided for therein, 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 or entity, and no such unlawful items
            have been received, retained or realized by Seller;

      (7)   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 in its
            possession, available for Buyer's inspection, and shall deliver to
            Buyer, upon demand, evidence of compliance with all such
            requirements;

      (8)   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;

      (9)   Location and Type of Mortgaged Property. The Mortgaged Property (or
            Underlying Mortgaged Property, in the case of a Co-op Loan) is a fee
            simple property located in the state identified in the Seller Asset
            Schedule, 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 residential
            condominium unit in a low-rise condominium project, or an individual
            unit in a planned unit development or a co-operative unit and that
            no residence or dwelling is a mobile home, provided, however, that
            any condominium unit or planned unit development shall not fall
            within any of the "Ineligible Projects" of part VIII, Section 102 of
            the Fannie Mae Selling Guide and shall conform with the Underwriting
            Guidelines. In the case of any Mortgaged Properties that are
            manufactured homes (a "Manufactured Home Mortgage Loans"), (i) such
            Manufactured Home Mortgage Loan conforms with the applicable Fannie
            Mae or Freddie Mac requirements regarding mortgage loans related to
            manufactured dwellings, (ii) the related manufactured dwelling is
            permanently affixed to the land, (iii) the related manufactured

                                   Exh. IX-3

<PAGE>

            dwelling and the related land are subject to a Mortgage properly
            filed in the appropriate public recording office and naming Seller
            as mortgagee, (iv) the applicable laws of the jurisdiction in which
            the related Mortgaged Property is located will deem the manufactured
            dwelling located on such Mortgaged Property to be a part of the real
            property on which such dwelling is located, and (v) such
            Manufactured Home Mortgage Loan is (x) a qualified mortgage under
            Section 860G(a)(3) of the Internal Revenue Code of 1986, as amended
            and (y) secured by manufactured housing treated as a single family
            residence under Section 25(e)(10) of the Code. No portion of the
            Mortgaged Property (or Underlying Mortgaged Property, in the case of
            a Co-op Loan) is used for commercial purposes; provided, that
            Mortgaged Properties which contain a home office shall not be
            considered as being used for commercial purposes as long as the
            Mortgaged Property has not been altered for commercial purposes and
            is not storing any chemicals or raw materials other than those
            commonly used for homeowner repair, maintenance and/or household
            purposes;

      (10)  Valid First or Second Lien. The Mortgage is a valid, subsisting,
            enforceable and perfected first or second lien and first or second
            priority security interest on 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 the
                  lender's title insurance policy delivered to the originator of
                  the Mortgage Loan and (i) referred to or otherwise considered
                  in the appraisal made for the originator of the Mortgage Loan
                  or (ii) 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; and

                        (D) with respect to each Second Lien Mortgage Loan a
                  prior mortgage lien on the Mortgaged Property.

            Any Security Agreement, chattel mortgage or equivalent document
            related to and delivered in connection with the Mortgage Loan
            establishes and creates a valid, subsisting and enforceable (A)
            first lien and first priority perfected security interest with

                                   Exh. IX-4

<PAGE>

            respect to each First Lien Mortgage Loan, or (B) second lien and
            second priority perfected security interest with respect to each
            Second Lien Mortgage Loan, in either case, on the property described
            therein and Seller has full right to sell 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.

            With respect to any Co-op Loan, the related Mortgage is a valid,
            subsisting and enforceable first priority security interest on the
            related cooperative shares securing the Mortgage Note, subject only
            to (a) liens of the related residential cooperative housing
            corporation for unpaid assessments representing the Mortgagor's pro
            rata share of the related residential cooperative housing
            corporation's payments for its blanket mortgage, current and future
            real property taxes, insurance premiums, maintenance fees and other
            assessments to which like collateral is commonly subject, and (b)
            other matters to which like collateral is commonly subject which do
            not materially interfere with the benefits of the security interest
            intended to be provided by the related Co-op Security Agreement.
            There are no liens against or security interest in the cooperative
            shares relating to each Co-op Loan (except for unpaid maintenance,
            assessments and other amounts owed to the related cooperative which
            individually or in the aggregate will not have a material adverse
            effect on such Co-op Loan), which have priority over the Buyer's
            security interest in such cooperative shares;

      (11)  Validity of Mortgage Loan Documents. The Mortgage Note, the Mortgage
            and any other agreement executed and delivered by a Mortgagor or
            guarantor, if applicable, in connection with the 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 related agreement
            had legal capacity to enter into the Mortgage Loan and to execute
            and deliver the Mortgage Note, the Mortgage and any other related
            agreement, and the Mortgage Note, the Mortgage and any other related
            agreement have been duly and properly executed by such parties. The
            documents, instruments and agreements submitted for loan
            underwriting were not falsified and contain no untrue statement of
            material fact or omit to state a material fact required to be stated
            therein or necessary to make the information and statements therein
            not misleading. No fraud, error, negligence, misrepresentation or
            omission of fact with respect to a Mortgage Loan has taken place on
            the part of Seller or the Mortgagor or any other party involved in
            the origination or servicing of the Mortgage Loan. Seller has
            reviewed all of the documents constituting the Servicing File and
            has made such inquiries as it deems necessary to make and confirm
            the accuracy of the representations set forth herein;

      (12)  Full Disbursement of Proceeds. The Mortgage Loan has been closed and
            the proceeds of the Mortgage Loan have been fully disbursed and
            there is no requirement for future advances thereunder, 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

                                   Exh. IX-5

<PAGE>

            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;

      (13)  Ownership. Seller is the sole owner of record and holder of the
            Mortgage Loan. The Mortgage Loan is not assigned or pledged, and
            Seller has good, indefeasible and marketable title thereto, and has
            full right to transfer and sell the Mortgage Loan therein 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 and assign 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;

      (14)  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) (1) in compliance with any and all applicable
            licensing requirements of the laws of the state wherein the
            Mortgaged Property (or Underlying Mortgaged Property, in the case of
            a Co-op Loan) is located, and (2) organized under the laws of such
            state, or (3) qualified to do business in such state, or (4) federal
            savings and loan associations or national banks having principal
            offices in such state, or (5) not doing business in such state;

      (15)  LTV. No Mortgage Loan has an LTV greater than 100%.

      (16)  Title Insurance. With respect to any Mortgage Loan which is not a
            Co-op Loan, the Mortgage Loan is covered by an ALTA lender's title
            insurance policy or other generally acceptable form of policy of
            insurance acceptable to Fannie Mae or Freddie Mac, 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 or second priority lien of the Mortgage in the original
            principal amount of the Mortgage Loan, and against any loss by
            reason of the invalidity or unenforceability of the lien resulting
            from the provisions of the Mortgage providing for adjustment in the
            Mortgage Interest Rate and Monthly Payment, subject only to the
            exceptions contained in clauses (A), (B), and (C), and with respect
            to each Second Lien Mortgage Loan clause (D) of Paragraph (10) of
            this Schedule I. 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

                                   Exh. IX-6

<PAGE>

            reading. Seller its successors and assigns is the sole insured of
            such lender's title insurance policy, and such lender's title
            insurance policy is 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 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;

      (17)  No Defaults. There is no default, breach, violation or event of
            acceleration existing under the Mortgage or the Mortgage Note and no
            event 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. With respect to each Second Lien Mortgage Loan, (i)
            the prior mortgage is in full force and effect, (ii) there is no
            default, breach, violation or event of acceleration existing under
            such prior mortgage or the related mortgage note, (iii) no event
            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 thereunder, and either (A) the
            prior mortgage contains a provision which allows or (B) applicable
            law requires, the mortgagee under the Second Lien Mortgage Loan to
            receive notice of, and affords such mortgagee an opportunity to cure
            any default by payment in full or otherwise under the prior
            mortgage;

      (18)  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 related Mortgaged Property which are or may be
            liens prior to, or equal or coordinate with, the lien of the related
            Mortgage;

      (19)  Location of Improvements; No Encroachments. With respect to a
            Mortgage Loan which is not a Co-op Loan, all improvements which were
            considered in determining the Appraised Value of the Mortgaged
            Property lay 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;

      (20)  Origination: Payment Terms. At the time the Mortgage Loan was
            originated, the originator was a mortgagee approved by the Secretary
            of Housing and Urban Development pursuant to Sections 203 and 211 of
            the National Housing Act or a savings and loan association, a
            savings bank, a commercial bank or similar banking institution which
            is supervised and examined by a Federal or State authority. No

                                   Exh. IX-7

<PAGE>

            Mortgage Loan contains terms or provisions which would result in
            negative amortization. Principal payments on the Mortgage Loan
            commenced no more than 60 days after funds were disbursed in
            connection with the Mortgage Loan. The Mortgage Interest Rate is
            adjusted, with respect to adjustable rate Mortgage Loans, on each
            Interest Rate Adjustment Date to equal the applicable index plus the
            Gross Margin (rounded up or down to the nearest 0.125%), subject to
            the Maximum Mortgage Interest Rate. The Mortgage Note is payable on
            the first day of each month in equal monthly installments of
            principal and interest, which installments of interest, with respect
            to adjustable rate Mortgage Loans, are subject to change due to the
            adjustments to the Mortgage Interest Rate on each Interest Rate
            Adjustment Date, 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. The due date of the first payment
            under the Mortgage Note is no more than 60 days from the date of the
            Mortgage Note;

      (21)  Customary Provisions. 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 available to the
            Mortgagor which would interfere with the right to sell the Mortgaged
            Property at a trustee's sale or the right to foreclose the Mortgage
            subject to applicable federal and state laws and judicial precedent
            with respect to bankruptcy and right of redemption;

      (22)  Conformance with Underwriting Guidelines and Agency Standards. The
            Mortgage Loan was underwritten in accordance with Seller's
            underwriting guidelines in effect at the time the Mortgage Loan was
            originated, a copy of which underwriting guidelines are attached as
            Exhibit II hereto. The Mortgage Note and Mortgage are on forms
            acceptable to Fannie Mae or Freddie Mac and Seller has not made any
            representations to a Mortgagor that are inconsistent with the
            mortgage instruments used;

      (23)  Occupancy of the Mortgaged Property. As of the related 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

                                   Exh. IX-8

<PAGE>

            conform with any such law, ordinance, regulation, standard, license
            or certificate;

      (24)  No Additional Collateral. The Mortgage Note is not and has not been
            secured by any collateral except the lien of the corresponding
            Mortgage and the security interest of any applicable Security
            Agreement or chattel mortgage referred to in Paragraph (10) above;

      (25)  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 Custodian or Buyer to the trustee under the
            deed of trust, except in connection with a trustee's sale after
            default by the Mortgagor;

      (26)  Acceptable Investment. The Mortgagor is not in bankruptcy or
            insolvent and Seller has no knowledge of any circumstances or
            conditions with respect to the Mortgage, the Mortgaged Property, the
            Mortgagor or the Mortgagor's credit standing that can reasonably be
            expected to cause private institutional investors to regard the
            Mortgage Loan as an unacceptable investment, cause the Mortgage Loan
            to become delinquent, or adversely affect the value or marketability
            of the Mortgage Loan;

      (27)  Delivery of Mortgage Loan Documents. Other than with respect to
            Wet-Ink Mortgage Loans, the Mortgage Note, the Mortgage, the
            Assignment of Mortgage and any other documents required to be
            delivered by Seller under this Agreement have been delivered to
            Buyer or its Custodian. Seller is in possession of a complete, true
            and accurate Mortgage File in compliance with Section 2 of the
            Custodial and Disbursement Agreement, except for such documents the
            originals of which have been delivered to Buyer or its Custodian;

      (28)  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;

      (29)  Transfer of Mortgage Loans. The Assignment of Mortgage is in
            recordable form and is acceptable for recording (or, in the case of
            a Co-op Loan, is in a form acceptable for filing) under the laws of
            the jurisdiction in which the Mortgaged Property (or Underlying
            Mortgaged Property, in the case of a Co-op Loan) is located;

      (30)  No Buydown Provisions; No Graduated Payments or Contingent
            Interests. 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 currently in effect which may constitute a

                                   Exh. IX-9

<PAGE>

            "buydown" provision. The Mortgage Loan is not a graduated payment
            mortgage loan and the Mortgage Loan does not have a shared
            appreciation or other contingent interest feature;

      (31)  Consolidation of Future Advances. Any future advances made prior to
            the related 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 or second 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;

      (32)  Mortgaged Property Undamaged. There is no proceeding pending or
            threatened for the total or partial condemnation of the Mortgaged
            Property (or Underlying Mortgaged Property, in the case of a Co-op
            Loan). The Mortgaged Property (or Underlying Mortgaged Property, in
            the case of a Co-op Loan) is undamaged by waste, fire, earthquake or
            earth movement, windstorm, flood, tornado or other casualty so as to
            affect adversely the value of the Mortgaged Property as security for
            the Mortgage Loan or the use for which the premises were intended;

      (33)  Collection Practices; Escrow Deposits; Adjustable Rate Mortgage Loan
            Adjustments. The origination and collection practices used with
            respect to the Mortgage Loan have been in accordance with Accepted
            Servicing Practices and in all respects in compliance with all
            applicable laws and regulations. With respect to escrow deposits and
            Escrow Payments (other than with respect to Second Lien Mortgage
            Loans for which the mortgagee under the prior mortgage lien is
            collecting Escrow Payments), all such payments are in the possession
            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 laws. An escrow of funds is not prohibited by
            applicable law and has been established in an amount sufficient to
            pay for every item which remains unpaid and which 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 laws and the terms of the related Mortgage Note.
            Any interest required to be paid pursuant to state and local laws
            has been properly paid and credited;

      (34)  Appraisal. Seller has delivered to Buyer or maintains in its
            Servicing Files an appraisal of the Mortgaged Property (or the
            related residential dwelling unit in the Underlying Mortgaged
            Property, in the case of a Co-op Loan) signed prior to the approval
            of the Mortgage application by a appraiser qualified under Fannie
            Mae and Freddie Mac guidelines who (i) is licensed in the state
            where the Mortgaged Property (or the related residential dwelling
            unit in the Underlying Mortgaged Property, in the case of a Co-op

                                   Exh. IX-10

<PAGE>

            Loan) is located, (ii) has no interest, direct or indirect, in the
            Mortgaged Property (or the related residential dwelling unit in the
            Underlying Mortgaged Property, in the case of a Co-op Loan) or in
            any Mortgage Loan or the security therefor, and (iii) does not
            receive compensation that is affected by the approval or disapproval
            of the Mortgage Loan. The appraisal shall have been made within one
            hundred and eighty (180) days of the origination of the Mortgage
            Loan, be completed in compliance with the Uniform Standards of
            Professional Appraisal Practice and all applicable Federal and state
            laws and regulations. If the appraisal was made more than one
            hundred and twenty (120) days before the origination of the Mortgage
            Loan, Seller shall have received and deliver to Buyer a
            recertification of the appraisal.

      (35)  Soldiers' and Sailors' 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 Soldiers' and
            Sailors' Civil Relief Act of 1940;

      (36)  Environmental Matters. The Mortgaged Property (or Underlying
            Mortgaged Property, in the case of a Co-op Loan) is free from any
            and all toxic or hazardous substances and there exists no violation
            of any local, state or federal environmental law, rule or
            regulation. There is no pending action or proceeding directly
            involving any Mortgaged Property (or Underlying Mortgaged Property,
            in the case of a Co-op Loan) of which Seller is aware in which
            compliance with any environmental law, rule or regulation is an
            issue; and to the best of Seller's knowledge, nothing further
            remains to be done to satisfy in full all requirements of each such
            law, rule or regulation consisting a prerequisite to use and
            enjoyment of said property;

      (37)  No Construction Loans No Mortgage Loan was made in connection with
            (a) facilitating the trade-in or exchange of a Mortgaged Property or
            (b) the construction or rehabilitation of a Mortgaged Property,
            unless the Mortgage Loan is a construction-to-permanent mortgage
            loan listed on the Seller Asset Schedule which has been fully
            disbursed, all construction work is complete and a completion
            certificate has been issued;

      (38)  No Denial of Insurance. No action, inaction, or event has occurred
            and no state of fact exists or has existed that has resulted or will
            result in the exclusion from, denial of, or defense to coverage
            under any applicable pool insurance policy, primary mortgage
            insurance policy, special hazard insurance 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
            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;

      (39)  Regarding the Mortgagor. The Mortgagor is one or more natural
            persons and/or trustees for an Illinois land trust or a trustee
            under a "living trust" and such "living trust" is in compliance with
            Fannie Mae guidelines for such trusts;

                                   Exh. IX-11

<PAGE>

      (40)  Mortgagor Acknowledgment. The Mortgagor has received all disclosure
            materials required by applicable law with respect to the making of
            Adjustable Rate Mortgage Loans. Seller shall maintain such documents
            in the Mortgage File;

      (41)  Predatory Lending Regulations; High Cost Loans. None of the Mortgage
            Loans are classified as (a) "high cost" loans under the Home
            Ownership and Equity Protection Act of 1994 or (b) "high cost,"
            "threshold," or "predatory" loans under any other applicable state,
            federal or local law.

      (42)  Qualified Mortgage. The Mortgage Loan is a "qualified mortgage"
            within the meaning of Section 860G(a)(3) or any successor provision
            thereof of the Internal Revenue Code of 1986, as amended;

      (43)  Insurance. Seller has caused or will cause to be performed any and
            all acts required to preserve the rights and remedies of Buyer in
            any insurance policies applicable to the Mortgage Loans including,
            without limitation, any necessary notifications of insurers,
            assignments of policies or interests therein, and establishments of
            coinsured, joint loss payee and mortgagee rights in favor of Buyer;

      (44)  Simple Interest Mortgage Loans. None of the Mortgage Loans are
            simple interest Mortgage Loans;

      (45)  Prepayment Fee. With respect to each Mortgage Loan that has a
            prepayment fee feature, each such prepayment fee is enforceable and
            will be enforced by Seller for the benefit of Buyer, and each
            prepayment fee is permitted pursuant to federal, state and local law
            and is only payable during the first 5 years of the term of the
            Mortgage Loan. Each such prepayment fee is in an amount equal to the
            maximum amount permitted under applicable law;

      (46)  Flood Certification Contract. Seller shall have obtained a life of
            loan, transferable flood certification contract for each Mortgage
            Loan and shall assign all such contracts to Buyer;

      (47)  CLTV. No Second Lien Mortgage Loan that is not a Fannie Mae Flex 100
            Mortgage Loan has a CLTV in excess of 100% and no Fannie Mae Flex
            100 Mortgage Loan has a CLTV in excess of 103%; and

      (48)  Consent. Either (a) no consent for the Second Lien Mortgage Loan is
            required by the holder of the related first lien or (b) such consent
            has been obtained and is contained in the Mortgage File;

      (49)  Wet-Ink Mortgage Loans. With respect to each Mortgage Loan that is a
            Wet-Ink Mortgage Loan, the Settlement Agent has been instructed in
            writing by Seller to hold the related Mortgage File as agent and
            bailee for Buyer or Buyer's agent and to promptly forward such
            Mortgage File in accordance with the provisions of the Custodial and
            Disbursement Agreement and the Escrow Instruction Letter.

                                   Exh. IX-12

<PAGE>

      (50)  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;

      (51)  [Reserved].

      (52)  Withdrawn Mortgage Loans. If the Mortgage Loan has been released to
            Seller or its designee pursuant to a Request for Release as
            permitted under Section 5(c) of the Custodial and Disbursement
            Agreement, then the Mortgage Note relating to the Mortgage Loan was
            returned to Custodian within twenty (20) calendar days. If the
            Mortgage Loan has been released to Seller or its designee pursuant
            to a Request for Release as permitted under Sections 5(a) and 5(b)
            of the Custodial and Disbursement Agreement, then the Mortgage Note
            relating to the Mortgage Loan was returned to Custodian within ten
            (10) calendar days;

      (53)  Origination Date. The Origination Date is no earlier than thirty
            (30) days prior to the date the Mortgage Loan is first purchased by
            Buyer;

      (54)  No Exception. Custodian has not noted any material exceptions on a
            Seller Asset Schedule and Exception Report (as defined in the
            Custodial and Disbursement Agreement) with respect to the Mortgage
            Loan which would materially and adversely affect the Mortgage Loan
            or Buyer's ownership of the Mortgage Loan, unless consented to by
            Buyer;

      (55)  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 (or Underlying Mortgaged Property, in the case of
            a Co-op Loan) is located;

      (56)  Endorsements. Each Mortgage Note has been endorsed by Seller for its
            own account and not as a fiduciary, trustee, trustor or beneficiary
            under a trust agreement;

      (57)  Accuracy of Information. All information provided to Buyer by Seller
            with respect to the Mortgage Loans is accurate in all material
            respects;

      (58)  Single Premium Credit Insurance. No Mortgagor is offered or required
            to purchase single premium credit insurance in connection with the
            origination of the related Mortgage Loan; and

      (59)  Co-op Loans. With respect to a Mortgage Loan that is a Co-op Loan,
            the stock that is pledged as security for the Mortgage Loan is held
            by a person as a tenant-stockholder (as defined in Section 216 of
            the Code) in a cooperative housing corporation (as defined in
            Section 216 of the Code).

                                   Exh. IX-13

<PAGE>

      (60)  Insured Closing Letters. With respect to each Eligible Asset that is
            a Wet-Ink Mortgage Loan, Seller has received an insured closing
            letter from the related Settlement Agent if such Settlement Agent is
            not a title insurance company.

                                   Exh. IX-14

<PAGE>

                             Part II: Defined Terms

            In addition to terms defined elsewhere in the Repurchase Agreement,
the following terms shall have the following meanings when used in this Schedule
1:

            "Accepted Servicing Practices" shall mean, 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
Loans in the jurisdiction where the related Mortgaged Property is located.

            "Adjustable Rate Mortgage Loan" shall mean an Adjustable Rate
Mortgage Loan purchased pursuant to this Agreement.

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

            "Escrow Payments" shall mean, with respect to any Mortgage Loan, the
amounts constituting taxes, assessments, water charges, sewer rents, municipal
charges, mortgage insurance premiums, fire and hazard insurance premiums,
condominium charges, and other payments as may be required to be escrowed by the
Mortgagor with the Mortgagee pursuant to the terms of any Mortgage Note,
Mortgage or any other document.

            "FHA" shall mean the Federal Housing Administration, an agency
within the United States Department of Housing and Urban Development, or any
successor thereto and including the Federal Housing Commissioner and the
Secretary of Housing and Urban Development where appropriate under the FHA
regulations.

            "First Lien Mortgage Loan" shall mean a Mortgage Loan secured by a
first lien Mortgage on the related Mortgaged Property.

            "Fixed Rate Mortgage Loan" shall mean a fixed rate Mortgage Loan
purchased pursuant to this Repurchase Agreement.

            "Gross Margin" shall mean, with respect to each Adjustable Rate
Mortgage Loan, the fixed percentage amount set forth in the related Mortgage
Note which amount is added to the index in accordance with the terms of the
related Mortgage Note to determine on each Interest Rate Adjustment Date the
Mortgage Interest Rate for such Mortgage Loan.

            "High Cost Mortgage Loan" shall mean any Mortgage Loan classified as
a "high cost," "threshold," or "predatory" loan under any other applicable
state, federal or local law.

            "Interest Rate Adjustment Date" shall mean, with respect to each
Adjustable Rate Mortgage Loan, the date set forth in the related Mortgage Note
on which the Mortgage Interest Rate on the Mortgage Loan is adjusted in
accordance with the terms of the Mortgage Note.

            "Maximum Mortgage Interest Rate" shall mean, with respect to each
Adjustable Rate Mortgage Loan, a rate that is set forth on the related Seller
Asset Schedule and in the related Mortgage Note and is the maximum interest rate

                                   Exh. IX-15

<PAGE>

to which the Mortgage Interest Rate on such Mortgage Loan may be increased on
any Interest Rate Adjustment Date.

            "Minimum Mortgage Interest Rate" shall mean, with respect to each
Adjustable Rate Mortgage Loan, a rate that is set forth on the related Seller
Asset Schedule and in the related Mortgage Note and is the minimum interest rate
to which the Mortgage Interest Rate on such Mortgage Loan may be decreased on
any Interest Rate Adjustment Date.

            "Monthly Payment" shall mean, with respect to any Mortgage Loan, the
scheduled combined payment of principal and interest payable by a Mortgagor
under the related Mortgage Note on each Due Date.

            "Mortgage Interest Rate" shall mean, with respect to each Mortgage
Loan, the annual rate at which interest accrues on such Mortgage Loan from time
to time in accordance with the provisions of the related Mortgage Note.

            "Origination Date" shall mean, with respect to each Mortgage Loan,
the date on which the applicable lien was placed on the related Mortgaged
Property.

                                   Exh. IX-16

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