Document:

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                                                                    Exhibit 10.1
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                      MASTER CREDIT AND SECURITY AGREEMENT

                                      among

                                    SKY BANK

                                       and

                     FRANKLIN CREDIT MANAGEMENT CORPORATION

                                       and

               THOSE SUBSIDIARIES WHICH RECEIVE ADVANCES HEREUNDER

                          Dated as of October 13, 2004

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                      Master Credit and Security Agreement

          This Master Credit and Security Agreement (the "Agreement") is entered
     into as of October 13, 2004, between Franklin Credit Management
     Corporation, a Delaware corporation (the "Company" ), having its principal
     office at Six Harrison Street, New York, New York 10013, and Sky Bank, an
     Ohio banking corporation (the "Bank"), having an office at 110 East Main
     Street, Salineville, Ohio 43945. The Subsidiaries of the Company which
     receive Company Subsidiary Loans under this Agreement or which have
     heretofore received Company Subsidiary Loans will also become parties
     hereto.
          Whereas, the Bank, the Company and certain Company Subsidiaries have
     previously entered into loan arrangements, whereby Bank and the Company and
     each respective Company Subsidiary entered into a separate term loan and
     security agreement and a promissory note;

          Whereas the Bank, the Company and each Company Subsidiary which have
     previously entered into a loan and security agreement, other than Tribeca
     Lending Corporation, desire to amend and restate each such loan and
     security agreement;

          Whereas, at the request of the Company, the Bank has from time to time
     extended credit to Company subsidiaries and to additional Subsidiaries of
     the Company (i) to finance the purchase of residential mortgage loans, or
     (ii) to consolidate and refinance such extensions of credit made earlier by
     the Bank, with such extensions of credit having been secured by the loans
     purchased by those Subsidiaries with the Bank's financing, and a list of
     all such outstanding extensions of credit from the Bank is set forth on
     Schedule I attached hereto; and

          Whereas, the Company has requested the Bank, and the Bank is willing,
     to amend and restate each such loan and security agreement and to continue
     to extend credit to Subsidiaries of the Company from time to time to
     finance the purchasing of residential mortgage loans, such extensions of
     credit to be secured by the loans to be purchased with the Bank's
     financing; and the parties now desire to set forth herein the terms and
     conditions to which all such prior extensions of credit shall now be
     subject, and under which all such future extensions of credit for those
     purposes shall be made, and the security provided for the repayment
     thereof;

          Now, Therefore, the parties hereby agree to amended and restate each
     previously existing loan and security agreement, other than any warehouse
     arrangement or loan and security agreement with Tribeca Lending
     Corporation, as follows:

                                    Article I

                                   Definitions

          Section 1.1.   Defined  Terms.  Capitalized  terms  defined  below  or
     elsewhere in this Agreement  (including the Exhibits hereto) shall have the
     following meanings:

     "Administrative Services Agreement" has the meaning set forth in Section
     10.1 hereof.

     "Administrative Servicing Fee" means an amount to be agreed to in writing
     from time to time between the Bank and the Company in consideration of the
     services provided under its Administrative Servicing Agreement with its
     Company Subsidiary.

     "Advance" means a disbursement by the Bank under a Company Subsidiary Loan.

     "Affiliate" has the meaning set forth in Rule 12b-2 of the General Rules
     and Regulations under the Exchange Act.

                                       1
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     "Agreement" means this Master Credit and Security Agreement, either as
     originally executed or as it may from time to time be supplemented,
     modified or amended.

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

     Business Day" means any day excluding Saturday, Sunday and any day which
     the principal offices of the Bank in Salineville, Ohio, or the Company in
     New York, New York are closed for business.

     "Collateral" has the meaning set forth in Section 3 hereof.

     "Collateral Documents" has the meaning set forth in Exhibit D. The Bank
     shall have the right, on not less than thirty (30) Business Days' prior
     written notice to the Company to modify Exhibit D to conform to current
     legal requirements or Bank practices, and, as so modified, said Exhibits
     shall be deemed a part hereof

     "Commitment" has the meaning set forth in Section 2.1(a) hereof.

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

     "Company Subsidiary" means any Subsidiary of the Company, whether now
     existing or hereafter organized and created, which becomes a party to this
     Agreement and which has heretofore received or which hereafter receives a
     Company Subsidiary Loan, provided, however, it is recognized that the
     Company has as of the date of this Agreement at least one other Subsidiary
     which has a "warehouse line of credit" facility from the Bank not covered
     by this Agreement, and may in the future have one or more Subsidiaries
     which do not have extensions of credit from the Bank.

     "Company Subsidiary Loan" means a now existing or hereafter arising loan to
     a Company Subsidiary pursuant to this Agreement and the related Note, to
     finance the purchase of residential mortgage loans or to consolidate and
     refinance loans which were granted by Bank to one or more Company
     Subsidiaries to finance the purchase of residential mortgage loans.

     "Company Subsidiary Loan Request" means the current form in use by the Bank
     as set forth in Exhibit B hereto. The Bank shall have the right, on not
     less than thirty (30) Business Days' prior written notice to the Company,
     to modify Exhibit B to conform to current legal requirements or Bank
     practices, and, as so modified, said Exhibits shall be deemed a part
     hereof.

     "Consolidated" refers to the consolidation of accounts in accordance with
     GAAP.

     "Conventional Mortgage Loan" means a Mortgage Loan other than a FHA-insured
     or VA-guaranteed Mortgage Loan.

     "Corporate Advances" means all customary, reasonable and necessary "out of
     pocket" costs and expenses incurred in the performance by the Company or
     any subservicer of its servicing obligations with respect to the
     preservation, restoration and protection of the mortgaged property.

     "Custodial Agreement" means that certain Custodial Agreement dated as of
     October 22, 2003, among the Company, U.S. Bank National Association as
     Custodian, the Bank, and those Subsidiaries of the Company who have become
     parties to that Agreement and who may become parties to it in the future.
     Furthermore, each Company Subsidiary that becomes a party to this Agreement
     by executing a counterpart signature page shall also thereby become and be
     deemed to be a party to the Custodial Agreement to the same extent as if
     such Company Subsidiary had executed a counterpart signature page to the
     Custodial Agreement, and such Company Subsidiary shall be bound by the
     terms and provisions of the Custodial Agreement.

                                       2
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     "Custodian" means the organization which holds documents under the
     Custodial Agreement relating to Mortgage Loans on the Company's behalf or
     on behalf of a Company Subsidiary.
     "Debt" means, with respect to any Person, at any date (a) all indebtedness
     or other obligations of such Person which, in accordance with GAAP, would
     be included in determining total liabilities as shown on the liabilities
     side of a balance sheet of such Person at such date; (b) all indebtedness
     or other obligations of such Person for borrowed money or for the deferred
     purchase price of property or services; (c) all indebtedness or other
     obligations of any other Person for borrowed money or for the deferred
     purchase price of property or services in respect of which such Person is
     liable, contingently or otherwise, to pay or advance money or property as
     guarantor, endorser, or otherwise (except as endorser of negotiable
     instruments for collection in the ordinary course of business), or which
     such Person has agreed to purchase or otherwise acquire; and (d) all
     indebtedness for borrowed money or for the deferred purchase price of
     property or services secured by a Lien on any property owned or being
     purchased by such Person (even though such Person has not assumed or
     otherwise become liable for the payment of such indebtedness).

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

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

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

     "Event of Default" means any of the conditions or events set forth in
     Section 8.1 hereof.

     "Exchange Act" means the Securities Exchange Act of 1934, as amended from
     time to time, and any successor statute.

     "FHA" means The Federal Housing Administration of the United States
     Department of Housing and Urban Development and any successor thereto.

     "FHLMC" means The Federal Home Loan Mortgage Corporation and any successor
     thereto.

     "Floating Rate" has the meaning set forth in Section 2.4(a) hereof.

     "FNMA" means The Federal National Mortgage Association and any successor
     thereto.

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

                                       3
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     "GNMA" means Government National Mortgage Association or any successor
     thereto.

     "HUD" means the United States Department of Housing and Urban Development
     or any successor thereto.

     "Indemnified Liabilities" has the meaning set forth in Section 9.3 hereof.

     "Index" has the meaning set forth in Section   2.4(a) hereof.

     "Insurer" means FHA, VA or a private mortgage insurer, as applicable.

     "Internal Revenue Code" means the Internal Revenue Code of 1986, or any
     subsequent federal income tax law or laws, as any of the foregoing have
     been or may from time to time be amended.

     "Investor" means a financially responsible institution purchasing Mortgage
     Loans from the Company or from a Company Subsidiary pursuant to a Purchase
     Commitment.

     "Lien" means any lien, mortgage, deed of trust, pledge, security interest,
     charge or encumbrance of any kind, including without limitation any
     conditional sale or other title retention agreement, any lease in the
     nature thereof, and any agreement to give any security interest.

     "Lock-box Agreement" has the meaning set forth in Section 3.4 hereof.

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

     "Mortgage" means either (1) a first-lien mortgage, deed of trust, security
     deed or similar instrument on improved real property; or (2) a second-lien
     mortgage, deed of trust, security deed or similar instrument on improved
     real property.

     "Mortgage Loan" means any loan evidenced by a Mortgage Note. A Mortgage
     Loan, unless otherwise expressly stated herein, means a Residential
     Mortgage Loan.

     "Mortgage Loan Documents" means the Mortgage, Mortgage Note, credit and
     closing packages, disclosures, and all other files, records and documents.

     "Mortgage Loan Principal Balance" means, as of any date of determination,"
     the outstanding principal balance of such Mortgage Loan as calculated
     pursuant to the Mortgage Loan Documents.

     "Mortgage Note" means a note secured by a Mortgage and evidencing a
     Mortgage Loan.

     "Multiemployer Plan" means a "multiemployer plan" as defined in
     Section 4001(a)(3) of ERISA which is maintained for employees of the
     Company or a Subsidiary of the Company.

                                       4
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     "Net Worth" mean, with respect to the Company and its Subsidiaries at any
     date of determination, (a) Consolidated total assets of the Company and its
     Subsidiaries at such date less (b) the sum of (i) Consolidated total
     liabilities of the Company and its Subsidiaries at such date and (ii) the
     liquidation value of any redeemable preferred stock of the Company and its
     Subsidiaries at such date, in each case as determined in accordance with
     GAAP.

     "Note" has the meaning set forth in Section 2.3 hereof.

     "Notices" has the meaning set forth in Section 11.3 hereof.

     "Officers' Certificate" means a certificate executed on behalf of the
     Company or of a Company Subsidiary by its vice president, cashier or other
     appropriate officer.

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

     "Plans" has the meaning set forth in Section   5.1(l) hereof.

     "Pledged Mortgage Loans" has the meaning set forth in Section   3.1(a)
     hereof.

     "Post-Default Rate" means in respect of any day (a "Post-Default Day") an
     Event of Default has occurred and is continuing hereunder, a rate per annum
     on a 360 day per year basis equal to 2% per annum plus the applicable
     Floating Rate on such Post-Default Day.

     "Purchase Commitment" means a written commitment, issued in favor of the
     Company or of a Company Subsidiary by an Investor pursuant to which that
     Investor commits to purchase one or more Mortgage Loans, or whole loan
     purchase agreement by and between the Company or a Company Subsidiary and
     the Investor, governing the terms and conditions of any such purchases.

     "Redemption Amount" has the meaning set forth in Section   3.3 hereof.

     "Residential Mortgage Loan" means a Mortgage Loan secured by a Mortgage
     covering improved real property containing a one- to four-family residence.

     "Statement Date" has the meaning set forth in Sections   4.1(h) and
     6.1(b)(ii) hereof.

     "Subsidiary" means any corporation, association or other business entity in
     which more than fifty percent (50%) of the total voting power or shares of
     stock entitled to vote in the election of directors, managers or trustees
     thereof is at the time owned or controlled, directly or indirectly, by any
     Person or one or more of the other Subsidiaries of that Person or a
     combination thereof.

     "Success Fees" has the meaning set forth in Section 2.10.

     "Taxes" means an amount to be agreed to in writing from time to time
     between the Bank and the Company to be used to pay income taxes for the
     Company and/or Company Subsidiary.

                                       5
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     "Underwriting Standards" has the meaning set forth in Exhibits C. The Bank
     shall have the right, on not less than thirty (30) Business Days' prior
     written notice to the Company to modify Exhibits C to conform to current
     legal requirements or Bank practices, and, as so modified, said Exhibits
     shall be deemed a part hereof

     "VA" means the Department of Veterans Affairs and any successor thereto.

     Section 1.2. Other Definitional Provisions. (a)  Accounting terms not
     otherwise defined herein shall have the meanings given them under GAAP.

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

                                   Article II

                                   The Credit

          Section 2.1. The Commitment. (a)  Subject to the terms and conditions
     of this Agreement and the Conditions Precedent described in Section 4.1
     below, and provided no Default has occurred and is continuing, the Bank
     agrees, from time to time during the period from the date hereof to the
     expiration date as provided in Section 2.6 hereof, to make Company
     Subsidiary Loans to, or on behalf of, Company Subsidiaries, provided,
     however, that the total aggregate principal amount which is outstanding at
     any one time of all such Company Subsidiary Loans shall not exceed the
     lesser of (i) the aggregate approved principal amount of all Company
     Subsidiary Loans which have been approved by Bank under this Agreement from
     time to time, or (ii) the amount permitted by the lesser of (a) the loan
     policy guidelines adopted by the Bank from time to time or (b) any
     regulatory limitations applicable to the Bank which are now or hereafter in
     effect (the "Commitment").

          (b) Company Subsidiary Loans approved by Bank from time to time as
     provided herein shall be used by Company Subsidiaries solely for the
     purpose of funding or financing the purchase of Mortgage Loans, or for the
     consolidation and refinancing of then existing Company Subsidiary Loans
     against the pledge of such Mortgage Loans.

          (c) All Company Subsidiary Loans outstanding prior to the date of this
     Agreement for the purpose of funding or financing the purchase of Pledged
     Mortgage Loans shall be treated as having been issued under, and shall be
     subject to the covenants of, this Agreement. The Company shall cause all of
     its Subsidiaries which have such Company Subsidiary Loans outstanding to
     become parties to this Agreement by executing counterpart signature pages
     in the form of Exhibit E. In the event that the terms of this Agreement
     shall conflict with the terms of the loan documentation for such a Company
     Subsidiary Loan, the terms of this Agreement shall prevail, except for
     interest rate terms, which shall not be affected by the terms of this
     Agreement, and except that any Default under any such loan, which has not
     been cured or waived, shall remain in effect.

          (d) The warehousing credit line extended by the Bank to Tribeca
     Lending Corporation, a New York corporation and a Subsidiary of the Company
     shall be separate from and shall not be subject to this Agreement except as
     specifically otherwise provided in this Agreement.

                                       6
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          Section 2.2. Procedures for Obtaining Advances. Each Company
     Subsidiary Loan Request is subject to Bank's approval. Such Bank approval
     is subject to the Conditions Precedent set forth in Section 4.1. Bank shall
     reasonably endeavor to provide a conditional approval or denial within four
     (4) Business Days for requests of less than $1,000,000.00 and within five
     (5) Business Days for requests of $1,000,000.00 or more. Before providing
     final approval and funding any Company Subsidiary Loan, the Bank shall have
     a reasonable amount of time (not less than five (5) Business Days) to
     examine the Collateral Documents required to be delivered to Bank or to
     Custodian, as set forth in Section 4.1, and may reject such of them as do
     not meet the requirements of this Agreement, and/or may reduce the amount
     of such Company Subsidiary Loan. Bank, in all events, reserves the right to
     reject any Company Subsidiary Loan Request to finance the purchase of, or
     which includes Advances for the purchase of a "high cost mortgage" as
     defined in Section 152(a) of the Home Ownership and Equity Protection Act
     of 1994, or if it is in violation of any corresponding state or local law.

          Section 2.3. Note. Each Company Subsidiary Loan, and the corresponding
     Company Subsidiary's obligation to pay the principal of, and interest on
     the Company Subsidiary Loan to it made by the Bank, shall hereafter be
     evidenced by a promissory note of the Company Subsidiary payable to the
     Bank, and being substantially in the form of Exhibit A attached hereto. All
     existing promissory notes evidencing Company Subsidiary Loans heretofore
     granted by Bank to a Company Subsidiary shall remain in full force and
     effect. The term "Note" or "Notes" shall mean each and all such existing
     promissory notes evidencing a Company Subsidiary Loan, and all promissory
     notes hereafter executed and delivered by a Company Subsidiary to evidence
     Company Subsidiary Loans granted hereunder, and shall include all
     extensions, renewals and modifications, and all substitutions therefor.

          Section 2.4. Interest and Transaction Fees. (a)  The unpaid principal
     balance of each Company Subsidiary Loan shall bear interest, payable
     monthly, on the fifth (5th) day of each month, from the date of such
     Advance until paid in full, at a floating per annum rate of interest (the
     "Floating Rate") based upon an index which will be the Federal Home Loan
     Bank of Cincinnati 30 day advance rate (the "Index"), plus the applicable
     margin in accordance with the following matrix:

                           Base Rate Index Bank Margin

                              <201               350
                            201 - 475            325
                        Greater than 475         300

          The interest rate charged herein shall be adjusted monthly, effective
     on the first (1st) day of each month, based upon the Index in effect on the
     last Business Day of the then prior month. The Federal Home Loan Bank of
     Cincinnati 30 day advance rate shall mean the highest rate of interest as
     published daily by Bloomberg under the symbol FHL5LBR1. If the Index
     becomes unavailable during the term of this Agreement, the Bank may
     designate a substitute Index which is reasonably comparable after notice to
     the Company and each Company Subsidiary. Interest will be calculated on the
     basis of actual days elapsed over a 360 day year (365/360 basis), and
     principal and interest payments will be billed monthly and will be due on
     the fifth day of each month.

          If an Event of Defaults has occurred and is continuing hereunder, the
     Company and Company Subsidiary shall be obligated to pay to Bank interest
     on the outstanding principal balance of each Company Subsidiary Loan at a
     rate per annum equal to the Post-Default Rate until such Company Subsidiary
     Loan is paid in full or such Event of Default is cured or waived by the
     Bank.

                                       7
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          (b) At the time of closing of each Company Subsidiary Loan, such
     Company Subsidiary or the Company shall pay the Bank a transaction fee
     equal to one percent (1.0%) of the amount of such Company Subsidiary Loan
     (unless otherwise mutually agreed to by Bank and such Company Subsidiary).

          (c) The books and records of Bank, absent manifest error, shall
     constitute prima facie evidence of the principal balance of each Company
     Subsidiary Loan and the date and amount of each payment of principal and
     interest and applicable interest rates and other information with respect
     thereto.

          Section 2.5. Payments. (a) The Company and each Company Subsidiary
     which becomes a party to this Agreement shall ensure that any and all
     payments on the Pledged Mortgage Loans shall be made as specified in
     Section 3.4. The Bank shall receive, record and forward to the Company or
     the Company Subsidiary the record of all payments made by Pledged Mortgage
     Loan obligors in accordance with the Lock Box Agreement. So long as no
     Event of Default shall have occurred and be continuing, Pledged Mortgage
     Loan payments with the exception of any Escrow Payments deposited in the
     lockbox or otherwise received by the Company or the Company Subsidiary
     shall be delivered to the Bank and shall be applied, on or about the 5th,
     12th, 19th and 26th day of each month as follows:

     First, (i) all amounts received in respect of a particular Mortgage Pool
     shall be distributed to the related Mortgage Pool in the following order up
     to an amount equal to:

               (A) the related Pool Percentage Interest of any accrued and
          unpaid Taxes, Administrative Servicing Fees and any Corporate Advances
          for such month;

               (B) any accrued and unpaid interest and Success Fees due on all
          Company Subsidiary Loans related to such Mortgage Pool; and

               (C) the required Principal Payment for such Mortgage Pool;

              (ii) all remaining amounts after the allocations set forth in
     clauses 2.5(a)(i)(A) through (C) above from all Mortgage Pools in the
     aggregate shall be distributed to all Mortgage Pools in the following order
     , in each case to the extent not distributed to such Mortgage Pool pursuant
     to clause 2.5(a)(i) above, up to an amount equal to:

               (A) any accrued and unpaid Taxes, Administrative Servicing Fees
          and any Corporate Advances for such month for each Mortgage Pool, pro
          rata based on their remaining entitlement pursuant to clause
          2.5(a)(i)(A) above after all allocations pursuant to clause
          2.5(a)(i)(A) above;

               (B) any accrued and unpaid interest and Success Fees due on all
          Company Subsidiary Loans for each Mortgage Pool, pro rata based on
          their remaining entitlement pursuant to clause 2.5(a)(i)(B) above
          after all allocations pursuant to clause 2.5(a)(i)(B) above; and

               (C) the required Principal Payment for such Mortgage Pool, pro
          rata based on their remaining entitlement pursuant to clause
          2.5(a)(i)(C) above after all allocations pursuant to clause
          2.5(a)(i)(C) above;

                                       8
<PAGE>

              (iii) all remaining amounts after the allocations set forth in
     clauses 2.5(a)(i) through 2.5(a)(ii) above from all Mortgage Pools in the
     aggregate shall be applied to pay all other accrued and unpaid sums due to
     the Bank hereunder, and

               (iv) all remaining amounts after the allocations set forth in
          clauses 2.5(a)(i) through 2.5(a)(iii) above from all Mortgage Pools in
          the aggregate shall be paid as determined by the Bank in its
          reasonable discretion exercised in good faith and then,

     Second, all amounts distributed to each Mortgage Pool pursuant to clauses
     2.5(a)(i) through 2.5(a)(ii) above shall then be applied to the Company
     Subsidiary Loans related to such Mortgage Pool in the following order to
     pay:

               (i) any accrued and unpaid interest and Success Fees due on each
          Company Subsidiary Loan related to such Mortgage Pool pro rata based
          on their entitlement thereto; and

               (ii) to each Company Subsidiary Loan, the greater of the related
          Required Amortization Payment and the Subsidiary
          Undercollateralization Amount, pro rata, based on their respective
          entitlement thereto.

     "Pool Percentage Interest" means the related Mortgage Pool Value over the
     aggregate Mortgage Pool Value of all Mortgage Pools.

          "Principal Payment" for the related month and any Mortgage Pool means
          an amount equal to the greater of (i) the Required Amortization
          Payment on all Company Subsidiary Loans related to such Mortgage Pool
          and (ii) the Pool Undercollateralization Amount.

          "Company Subsidiary Loan Value" means, as of any date of
          determination, the aggregate Mortgage Loan Principal Balance of all
          Pledged Mortgage Loans owned by the related Company Subsidiary less an
          amount equal to all Reserves in respect of such Company Subsidiary.

          "Mortgage Pool" means the pool of Mortgage Loans comprised of the
          Pledged Mortgage Loans owned by the Company Subsidiaries set forth on
          Exhibit G.

          "Mortgage Pool Value" means, as of any date of determination, the
          aggregate Mortgage Loan Principal Balance of all Pledged Mortgage
          Loans in the related Mortgage Pool less an amount equal to all
          Reserves in respect of the Pledged Mortgage Loans comprising such
          Mortgage Pool.

          "Mortgage Pool Loan Amount" means the outstanding principal balance of
          all Company Subsidiary Loans made by Company Subsidiaries that own
          Pledged Mortgaged Loans in such Mortgage Pool.

          "Pool LTV" means, as of any date of determination, the ratio of the
          applicable Mortgage Pool Value to the outstanding principal balance of
          all Notes that were funded in respect of Advances for such Mortgage
          Pool.

         "Pool Undercollateralization Amount" for each Mortgage Pool shall mean
          the amount, if any, by which the (i) Mortgage Pool Loan Amount
          immediately prior to making distributions on any payment date as
          described above, exceeds (ii) the product of the applicable Required
          Pool LTV multiplied by the Mortgage Pool Value, taking into account
          all payments made and applied on the underlying Pledged Mortgage Loans
          on or prior to such payment date.

                                       9
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          "Required Amortization Payment" means a payment of principal on the
          related Company Subsidiary Loan as specified in the Note.

          "Required Pool LTV" for each Mortgage Pool shall be as specified on
          Exhibit G. On the 5th day of each calendar quarter (i.e., April 5,
          July 5, October 5 and January 5) or if such day is not a Business Day,
          the next succeeding Business Day, the Required Pool LTV for each
          Mortgage Pool shall be reset (and Exhibit G automatically amended in
          accordance herewith) as the weighted average of the Required Pool LTV
          as of the last day of the preceding calendar month and the Required
          Subsidiary LTV for each Company Subsidiary that was joined to Exhibit
          G since the last reset of the Required Pool LTV's, weighted based on
          the Mortgage Pool Value of the related Mortgage Pool as of the last
          day of the preceding calendar month and the Company Subsidiary Loan
          Value as of the date the related Advance was made, in each case
          subject to the approval of the Bank with respect to such calculations.

          "Required Subsidiary LTV" for each Company Subsidiary Loan shall be as
          specified on Exhibit G. In the event any Company Subsidiary not a
          party hereto on the date hereof becomes a party hereto, the Company
          Subsidiary Loan Request in the form attached hereto as Exhibit B,
          shall set forth the Required Subsidiary LTV as a percentage equal to
          (A) (1) the amount of the Advance less (2) all accrued and unpaid
          interest on such Mortgage Loans included in the purchase price of such
          Mortgage Loan upon acquisition by the Company Subsidiary (or, in the
          case of Mortgage Loans assigned to the Company Subsidiary by the
          Company, by the Company) divided by (B) (1) the outstanding principal
          balance of the Mortgage Loans in respect of which an Advance will be
          made less (2) all Reserves for such Mortgage Loans in the aggregate
          minus (C) if the Company Subsidiary Loan is to become part of the
          Mortgage Pool designated as "A" or "B", 2%, (2) if the Company
          Subsidiary Loan is to become part of the Mortgage Pool designated as
          "C", 3% and (3) if the Company Subsidiary Loan is to become part of
          any other Mortgage Pool, a percentage to be determined by the Bank and
          the Company. Upon the making of the Advance with respect to any such
          new Company Subsidiary, Exhibit G shall be automatically amended to
          include such Company Subsidiary, the designation of the Mortgage Pool
          (as set forth on the Company Subsidiary Loan Request) and the Required
          Subsidiary LTV, as set forth on the Company Subsidiary Loan Request
          and as calculated above, in each case subject to the approval of the
          Bank with respect to such calculations.

          "Reserves" means all reserve amounts in respect of a Pledged Mortgage
          Loan as determined monthly.

          "Subsidiary Undercollateralization Amount" for each Company Subsidiary
          shall mean the amount, if any, by which the (i) outstanding principal
          balance of the applicable Company Subsidiary Loan immediately prior to
          making distributions on any payment date as described above, exceeds
          (ii) the product of the applicable Required Subsidiary LTV multiplied
          by the outstanding principal balance of the applicable Company
          Subsidiary Loan Value, taking into account all payments made and
          applied on the underlying Pledged Mortgage Loans on or prior to such
          payment date.

                                       10
<PAGE>

          Notwithstanding the foregoing, the outstanding principal amount of
          each Company Subsidiary Loan shall be payable: (i) in part, upon the
          occurrence of any event described in Section 2.5(c) hereof with
          respect to such Company Subsidiary Loan; or (ii) in full, upon an
          uncured Event of Default. Furthermore, if an Event of Default has
          occurred and is then continuing, the provisions of Section 8.3 shall
          apply.

          Notwithstanding the foregoing, for purposes of determining Defaults in
          the payment of amounts due under this Agreement, (i) it shall not be a
          Default in payment of principal so long as the amount of principal
          paid to the Company Subsidiary Loans in the aggregate in any calendar
          month is at least equal to the Required Amortization Payments due in
          the aggregate on the Company Subsidiary Loans for such month and (ii)
          it shall not be a payment Default under this Agreement unless all
          amounts paid pursuant to the foregoing waterfalls in the aggregate for
          all payment dates for such month are not at least equal to the
          Administrative Servicing Fees due for such month, interest due on the
          Company Subsidiary Loans for such month and the Required Amortization
          Payments due for such month.

          (b) Notwithstanding the general order of payments set forth in Section
          2.5 above, and so long as the provisions of Sections 2.5(c) or 8.3 do
          not apply, the Company or a Company Subsidiary may prepay a Company
          Subsidiary Loan, in whole or in part at any time and from time to
          time, without premium or penalty (but subject to the Success Fee),
          provided, however, the Bank may, at its reasonable discretion,
          determine in which order of priority that the then outstanding Company
          Subsidiary Loans are prepaid so as not to have a detrimental impact on
          any remaining Company Subsidiary Loans.

          (c) The Company and the Company Subsidiary shall be obligated to pay
          to the Bank, and the Company and the Company Subsidiary hereby
          authorize the Bank to charge its account for, the amount of the
          Advance for the purchase of such Mortgage Loan if the Company or the
          Company Subsidiary (i) fails, to deliver the Collateral Documents
          relating to the Mortgage Loan against which such Advance was made
          within sixty (60) days after written notice by the Bank, or (ii)
          fails, within sixty (60) days after the delivery of any Collateral
          Documents to the Company Subsidiary for correction or completion,
          without being returned to the Bank corrected or completed as
          instructed by the Bank, or from the date a Collateral Document,
          following examination by the Bank, is found not to be in compliance
          with the requirements of this Agreement.

          Section 2.6. Expiration and/or Termination of Commitment. (a)  Unless
          terminated earlier as permitted hereunder, the Commitment shall expire
          of its own term, and without the necessity of action by the Bank, two
          (2) years following the date of execution of this Agreement. No such
          expiration, however, shall in and of itself operate to accelerate the
          due date of any outstanding Company Subsidiary Loan, or otherwise
          terminate the obligations, terms and covenants herein with respect to
          any then outstanding Company Subsidiary Loans.

          (b) Either party shall have the right, without cause, at any time to
          terminate this Commitment on not less than six (6) months' prior
          written notice to the other party. No such termination, however, shall
          in and of itself operate to accelerate the due date of any outstanding
          Company Subsidiary Loan, or otherwise terminate the obligations, terms
          and covenants herein with respect to any then outstanding Company
          Subsidiary Loans.

                                       11
<PAGE>

          (c) The Bank shall, furthermore, have the right to terminate the
          Commitment upon or following the occurrence of a Event of Default as
          specified in Section 8. No such termination, however, shall in and of
          itself operate to accelerate the due date of any outstanding Company
          Subsidiary Loan, or otherwise terminate the obligations, terms and
          covenants herein with respect to any then outstanding Company
          Subsidiary Loans.

          (d) The Bank shall have the right from time to time and in its sole
          discretion, to extend the term of this Agreement with prior written
          agreement with the Company and each Company Subsidiary. The length of
          any such extension shall also be determined in the Bank's sole
          discretion. Such extension may be made subject to the renegotiation of
          the terms hereunder and to any other such conditions as the Bank may
          deem necessary. Under no circumstances shall such an extension by the
          Bank be interpreted or construed as the Bank's waiver, release or
          forfeiture of any of its rights, entitlements or interests created
          hereunder. The Company and each Company Subsidiary acknowledges and
          understands that the Bank is under no obligation whatsoever to extend
          the term of this Agreement beyond its expiration date as originally
          stated in this Agreement.

          Section 2.7. Method of Making Payments. Except as otherwise
          specifically provided herein, all payments under a Note shall be
          received by the Bank on the date when due and shall be made in lawful
          money of the United States of America in immediately available funds
          at the office of the Bank, or such other place as the Bank from time
          to time shall designate; provided that in any event such payments are
          received no later than 12:00 p.m. New York City time. Whenever any
          payment to be made under a Note shall be stated to be due on a day
          which is not a Business Day, the due date thereof shall be extended to
          the next succeeding Business Day, and, with respect to payments of
          principal, the interest thereon shall be payable at the applicable
          rate during such extension. Funds received by the Bank after 4:00 p.m.
          New York City time on a Business Day shall be deemed to have been paid
          on the next succeeding Business Day.

          Section 2.8. Net Payments. All payments with respect to any Company
          Subsidiary Loan shall be made without offset or counterclaim and free
          from any present or future taxes, levies, imports, duties or other
          similar charges of whatsoever nature imposed by any government or any
          political subdivision or taxing authority hereof, other than any taxes
          on or measured by the net income of the Bank.

          Section 2.9. Direct Payments. Any and all payments received by the
          Company or a Company Subsidiary on Pledged Mortgage Loans with respect
          to which a Company Subsidiary Loan is made shall be deemed to have
          been delivered in trust for the benefit of Bank and shall be promptly
          delivered to the Bank for application to the Company Subsidiary Loans
          and such other specified purposes in accordance with and as set forth
          in Section 2.5.

          Section 2.10. Success Fees. The Company or the Company Subsidiary
          shall pay to Bank a "Success Fee" amounting to the lesser of (i) one
          half of one percent (0.50%) of the original principal balance of the
          Company Subsidiary Loan (provided further, however, that Company
          Subsidiary acknowledges and agrees that the Success Fee for a Company
          Subsidiary Loan listed on Schedule I attached hereto, shall be one
          percent (1.0%) of the original principal balance of such Company
          Subsidiary Loan), or (ii) fifty percent (50%) of the remaining
          cashflows of the Pledged Mortgage Loans related to such Company
          Subsidiary Loan received after the payoff of such Company Subsidiary
          Loan.

                                       12
<PAGE>

                                   Article III

                                   Collateral

          Section 3.1. Assignments and Grants of Security Interest by Company
          and Company Subsidiary. In consideration of the Commitment and as
          security for (i) the payment of the Note made by it and the
          performance of all of such Company Subsidiary's obligations under this
          Agreement, (ii) the obligations of such Company Subsidiary under this
          Agreement, (iii) the obligations of any other Company Subsidiary,
          under that other Company Subsidiary's Note and under this Agreement,
          whether such other Company Subsidiary is now existing or is hereafter
          created, and whether such other Company Subsidiary's Loan was made
          prior to or after the Company Subsidiary Loan to the Company
          Subsidiary granting this security interest,  the Company does hereby,
          each Company Subsidiary which contemporaneously herewith becomes a
          party to this Agreement does hereby, and each Company Subsidiary which
          hereafter becomes a party to this Agreement shall, by executing a
          counterpart signature page to this Agreement thereby, grant and convey
          to the Bank a security interest in all rights, titles and interest of
          the Company and the Company Subsidiary, respectively, in and to the
          following described property (collectively, the "Collateral"), and
          each Company Subsidiary which becomes a party hereto contemporaneously
          herewith does hereby confirm and reaffirm its prior grant and
          conveyance to the Bank of a security interest in all of its right,
          title, and interest in the following described Collateral:

          (a) All Mortgage Loans, including all Mortgage Notes and Mortgages
          evidencing or securing such Mortgage Loans and all other related
          Mortgage Loan Documents which from time to time are delivered, or
          caused to be delivered, or which heretofore have been delivered to the
          Bank (including delivery to a third party on behalf of the Bank)
          pursuant hereto or in respect of which an Advance under a Company
          Subsidiary Loan has been made by the Bank or which is hereafter made
          by the Bank hereunder (the "Pledged Mortgage Loans"); each Company
          Subsidiary hereafter obtaining a Company Subsidiary Loan shall deliver
          a schedule, in form and detail acceptable to Bank, of the Mortgage
          Loans being purchased from the proceeds of such Company Subsidiary
          Loan and pledged hereunder, which schedule shall attached to the
          Company Subsidiary's counterpart signature page to this Agreement and
          shall be deemed to be a part of this Agreement.

          (b) All rights, but not any obligations or liabilities under all
          purchase agreements relating to the acquisition of Pledged Mortgage
          Loans under which the Company or the Company Subsidiary is the
          purchaser, and all rights, but not any obligations or liabilities
          under all assignments to the Company Subsidiary by the Company of the
          Company's rights under such agreements where the Company is the
          purchaser.

                                       13
<PAGE>

          (c) All mortgage insurance and all commitments issued by Insurers to
          insure or guarantee any Pledged Mortgage Loans; and all personal
          property, contract rights, servicing and servicing fees and income,
          accounts and general intangibles of whatsoever kind relating to the
          Pledged Mortgage Loans, said Insurer commitments and the Purchase
          Commitments, and all other documents or instruments delivered to the
          Bank in respect of the Pledged Mortgage Loans, including, without
          limitation, the right to receive all insurance proceeds and
          condemnation awards which may be payable in respect of the premises
          encumbered by any Pledged Mortgage Loan;

          (d) All right, title and interest of the Company and/or the Company
          Subsidiary in and to all files, surveys, certificates, correspondence,
          appraisals, computer programs, tapes, discs, cards, accounting
          records, information and data of the Company and/or the Company
          Subsidiary relating to the Pledged Mortgage Loans;

          (e) All property of the Company and/or the Company Subsidiary, in any
          form or capacity now or at any time hereafter in the possession or
          direct or indirect control of the Bank relating to the Pledged
          Mortgage Loans (including possession by a parent company, affiliate or
          subsidiary of the Bank);

          (f) The Company and the Company Subsidiary's rights (but not any
          obligations or liabilities of the Company or the Company Subsidiary)
          under all Purchase Commitments now held or hereafter acquired by the
          Company and/or the Company Subsidiary covering Pledged Mortgage Loans
          and all proceeds resulting from the sale of Pledged Mortgage Loans to
          Investors pursuant thereto;

          (g) All rights (but not any obligations or liabilities) of the Company
          and of the Company Subsidiary under the Administrative Services
          Agreements and under the Custodial Agreements; and

          (h) All replacements, products and proceeds of any and all of the
          foregoing.

              Without limiting the foregoing, it is the express intention of
          the Company, and of each Company Subsidiary that now or hereafter
          becomes a party to this Agreement, that the security interest granted
          above is and shall be a continuing security interest covering all now
          present (or then present), and all future obligations of the Company
          to Bank hereunder or arising hereunder; and all now present (or then
          present), and all future obligations of each and every Company
          Subsidiary to Bank hereunder or arising hereunder, and that the
          security interests granted herein by the Company and each Company
          Subsidiary shall remain in effect until all indebtedness secured
          hereby has been paid in full and the Commitment has expired or has
          been otherwise terminated.

               Upon the request of the Bank, the Company and the Company
          Subsidiaries shall execute any further document or instrument
          reasonably requested by the Bank to further evidence or effectuate the
          assignments and security interests set forth in this Section.
          Furthermore, the Company and the Company Subsidiaries (a) hereby
          authorize Bank to sign (if required) and file financing statements at
          any time with respect to any of the Collateral, without such financing
          statements being executed by, or on behalf of, the Company or the
          Company Subsidiaries, (b) shall, at any time on request of Bank,
          execute or cause to be executed financing statements in respect of any
          Collateral and (c) shall reasonably cooperate to provide any
          information reasonably required by the Bank in connection with the
          filing of financing statements with respect to the Collateral. The
          Company and the Company Subsidiaries agree to pay all filing fees,
          including fees for filing continuation statements in connection with
          such financing statements, and to reimburse Bank for all costs
          incurred in connection therewith.

                                       14
<PAGE>

               Section 3.2 Mandatory Prepayment. In the event that the Bank
          shall in good faith determine at any time that any Pledged Mortgage
          Loan materially and adversely breaches the representations and
          warranties contained in this Agreement, and the Company or the Company
          Subsidiary fails to cure such breach of compliance upon thirty (30)
          Business Days prior written notice from the Bank, the Company or the
          Company Subsidiary shall partially prepay the Company Subsidiary Loan
          Advance by paying the Bank the Redemption Amount with respect to such
          Pledged Mortgage Loan and the Bank shall release such Pledged Mortgage
          Loan from the Pledge of this Agreement.

               Section 3.3. Right of Redemption from Pledge. Provided no Default
          or Event of Default has occurred and is continuing, a Company and/or
          Company Subsidiary may redeem a Pledged Mortgage Loan from pledge, by
          either (i) paying, or causing an Investor to pay, to the Bank, for
          application to prepayment of the principal balance of the Note, an
          amount (the "Redemption Amount") equal to the price at which such
          Mortgage Loan could readily be sold as determined by the Bank, or
          (ii)delivering substitute Collateral which, in addition to being
          acceptable to the Bank in its sole discretion, will when included with
          the Collateral, result in an LTV for the applicable Mortgage Pool
          which is equal to or less than the LTV of such Mortgage Pool at the
          time of the redemption request.

               Section 3.4. Collection and Servicing Rights. (a) The Company
          Subsidiary and the Bank agree that the "Lock Box Terms" set forth on
          Exhibit F shall be utilized by Company Subsidiary for the receiving,
          collecting, and processing of all sums payable to the Company
          Subsidiary in respect of the Collateral (the "Lock-box Agreement").
          Under that Lock-box Agreement, the Bank shall be entitled to receive
          all sums payable to the Company Subsidiary in respect of the
          Collateral. All amounts payable to the Company Subsidiary for the
          purchase by any Investor under a Purchase Commitment of any Pledged
          Mortgage Loans shall also be paid directly to the Bank. The Company
          Subsidiary shall instruct each Pledged Mortgage Loan obligor to direct
          all payments due under the Pledged Mortgage Loans, and shall direct
          each Investor to pay the amounts payable for the purchase of such
          Pledged Mortgage Loans, directly to the Lockbox address at the Bank.

               (b) In the event of any conflict between the terms of the
          Lock-box Agreement and the terms of the Administrative Services
          Agreement, the Lock-box Agreement terms shall prevail. The Bank shall
          have the right on not less than thirty (30) days prior notice to the
          Company and each Company Subsidiary to reasonably modify the Lock-box
          Agreement to conform to then current Bank practices and/or banking
          regulations.

               Section 3.5. Return of Collateral. If no Company Subsidiary
          Loans, interest or other amounts evidenced by a Note or due under a
          Company Subsidiary Loan or under this Agreement shall be outstanding
          and unpaid, the Bank shall promptly deliver or release all Collateral
          in its possession to the Company or to the Company Subsidiaries, as
          appropriate. The Bank shall also execute and deliver such assignments
          and other instruments and documents reasonably requested by the
          Company or by the Company Subsidiaries to vest title in the Collateral
          to the Company or the Company Subsidiaries, as appropriate. The
          receipt of the Company or of Company Subsidiaries, as appropriate, for
          any Collateral released or delivered pursuant to any provision of this
          Agreement shall be a complete and full acquittance for the Collateral
          so returned, and the Bank shall hereafter be discharged from any
          liability or responsibility therefor.

                                       15
<PAGE>

                                   Article IV

                              Conditions Precedent

               Section 4.1. Relating to a Company Subsidiary Advance. The
          obligation of the Bank to fund an approved Company Subsidiary Loan is
          subject to (i) the receipt by the Bank by the date of an Advance
          thereunder of the following documents, all of which must be
          satisfactory in form and content to the Bank in its reasonable
          discretion, and (ii) the satisfaction of the following conditions
          precedent:
               a) Requests for a Company Subsidiary Loan shall be initiated by
          the Company or by a Company Subsidiary by delivering to the Bank a
          completed and signed a Company Subsidiary Loan Request. The Bank shall
          review such Company Subsidiary Loan Request and if the Bank does not
          approve such designation of a Mortgage Pool, the Company or Company
          Subsidiary shall revise such request and deliver a new completed and
          signed Company Subsidiary Loan Request with a revised designation of a
          Mortgage Pool for the Bank's approval.

               b) The Company and/or the Company Subsidiary shall have delivered
          the Collateral Documents to the Custodian within three (3) Business
          Days after the date of the closing of the Company Subsidiary Loan;

              c) The Bank shall have received the Tax Identification number of
          each Company Subsidiary, as the case may be, and, when specifically
          requested for a particular Company Subsidiary Loan, file-stamped
          copies of the Company Subsidiary's articles of incorporation (dated no
          less recently than one (1) month prior to the date of the Advance),
          and operating agreement or by-laws;

               d) When specifically requested for a particular Company
          Subsidiary Loan, the Bank shall have received an original resolution
          of the members/manager, or directors, of the Company and each Company
          Subsidiary, as the case may be, certified by its manager or chief
          executive officer authorizing the execution, delivery and performance
          of this Agreement, the Note, and all other instruments or documents to
          be delivered by the Company Subsidiary pursuant to this Agreement;

               e) When specifically requested for a particular Company
          Subsidiary Loan, the Bank shall have received a certificate of the
          Company's and each Company Subsidiary's manager or chief executive
          officer as to the incumbency and authenticity of the signatures of the
          officers of the Company and the Company Subsidiary executing this
          Agreement, the Note, the Company Subsidiary Loan Request, and all
          other instruments or documents to be delivered pursuant hereto (the
          Bank being entitled to rely thereon until a new such certificate has
          been furnished to the Bank);

               f) The Bank shall have received an original independently audited
          financial statements of the Company for the most recent fiscal
          year-end for which reports on Form 10-K have been filed with the
          Securities and Exchange Commission (the "Statement Date") containing a
          balance sheet and related statements of income and retained earnings
          and changes in financial position for the period ended on the
          Statement Date, all prepared in accordance with GAAP applied on a
          basis consistent with prior periods and reasonably acceptable to the
          Bank;

                                       16
<PAGE>

               g) [Reserved];

               h) [Reserved];

               i) The Bank shall have satisfied itself, in its discretion and
          following due diligence, that the Underwriting Standards have been
          satisfied. The Bank shall have received each of the following, which
          must be satisfactory in form and content to the Bank in its reasonable
          discretion: (i) The purchase agreement relating to the acquisition of
          the Mortgage Loans, and the assignment to the Company Subsidiary by
          the Company of the Company's rights under such purchase agreement when
          the Company is the purchaser; (ii) a schedule, in form and detail
          acceptable to Bank of the Mortgage Loans being purchased, (iii) the
          Note, substantially in the form of Exhibit A hereto, duly executed by
          the Company Subsidiary; (iv) counterpart signature page for this
          Agreement, substantially in the form of Exhibit E hereto, duly
          executed by the Company Subsidiary; and (v) if the Company, not the
          Company Subsidiary, is the party to the purchase agreement covering
          the Mortgage Loans and Mortgage Loan Documents to be acquired by the
          Company Subsidiary and pledged to the Bank to secure the Advance, a
          duly executed assignment by the Company to the Company Subsidiary of
          all of the Company's rights in the purchase agreement and in the
          Mortgage Loans and Mortgage Loan Documents covered by that agreement;

               j) [Reserved];

               k) The representations and warranties of the Company contained in
          Article V hereof shall be true and correct in all material respects as
          if made on and as of the date of each Advance unless the same relates
          to an earlier date;

               l) The representations and warranties of the Company Subsidiary
          contained in Article V hereof shall be true and correct in all
          material respects as if made on and as of the date of the Advance
          unless the same relates to an earlier date;

               m) The Company Subsidiary shall have performed all obligations to
          be performed by it hereunder, and after giving effect to the requested
          Advance, there shall exist no Default or Event of Default hereunder;

               n) The Company Subsidiary shall have become a party to this
          Agreement, shall have performed all obligations to be performed by it
          under this Agreement, and under the Note, and, after giving effect to
          the requested Advance, there shall exist no Default or Event of
          Default under this Agreement or under any Note;

               o) The Company shall not have experienced any other material
          adverse change in its business or operations as reasonably determined
          by the Bank in its reasonable discretion exercised in good faith; and

               p) The Company Subsidiary, as reasonably determined by the Bank
          in its reasonable discretion exercised in good faith, shall not have
          (i) incurred any material liabilities, direct or contingent, other
          than in the ordinary course of its business and other than under this
          Agreement, or (ii) experienced any other material adverse change in
          its business or operations as reasonably determined by the Bank in its
          reasonable discretion exercised in good faith.

                                       17
<PAGE>

               Section 4.2. Acceptance of Proceeds. Acceptance of the proceeds
          of the requested Advance by the Company Subsidiary shall be deemed a
          representation by the Company and the Company Subsidiary that all
          conditions set forth in this Article IV shall have been satisfied as
          of the date of such Advance.

                                    Article V

                         Representations and Warranties

               Section 5.1. By the Company. In order to induce the Bank to enter
          into this Agreement and make each Company Subsidiary Loan, the Company
          hereby represents and warrants to the Bank, as of the date of this
          Agreement and as of the date of each Company Subsidiary Loan Request
          and of each Company Subsidiary Loan, that:

               (a) Organization; Good Standing. The Company is a corporation
          duly organized, validly existing, and in good standing under the laws
          of the State of Delaware and is duly registered to do business and is
          in good standing under the laws of the State of New York, has the full
          legal power and authority to own its property and to carry on its
          business as currently conducted, and is duly qualified as a foreign
          corporation to do business in and is in good standing in each
          jurisdiction in which the transaction of its business makes such
          qualification necessary, except in jurisdictions, if any, where a
          failure to be in good standing has no material adverse effect on the
          business, operations, assets or financial condition of the Company.

               (b) Authorization and Enforceability. The Company has the power
          and authority to execute, deliver and perform this Agreement and all
          other documents contemplated hereby or thereby. The execution,
          delivery and performance by the Company of this Agreement and all
          other documents contemplated hereby or thereby, have been duly and
          validly authorized by all necessary corporate action on the part of
          the Company (none of which actions have been modified or rescinded,
          and all of which actions are in full force and effect) and do not and
          will not conflict with or violate any provision of law or of the
          articles of organization or bylaws of the Company, conflict with or
          result in a breach of or constitute a default or require any consent
          under, or result in the creation of any Lien upon any property or
          assets of the Company (other than pursuant to this Agreement), or
          result in or require the acceleration of any indebtedness of the
          Company pursuant to any agreement, instrument or indenture to which
          the Company is a party or by which the Company or its property may be
          bound or affected. This Agreement and all other documents contemplated
          hereby or thereby constitute legal, valid, and binding obligations of
          the Company enforceable in accordance with their respective terms,
          except as limited by bankruptcy, insolvency or other similar laws
          affecting the enforcement of creditors' rights and by general
          principles of equity.

               (c)Approvals. The execution and delivery of this Agreement and
          all other documents contemplated hereby or thereby and the performance
          of the Company's obligations hereunder and thereunder do not require
          any license, consent, approval or other action of any state or federal
          agency or governmental or regulatory authority.

                                       18
<PAGE>

               (d)Financial Condition. The balance sheet of the Company as at
          the Statement Date, and the related statements of income and cash
          flows for the fiscal year ended on the Statement Date, heretofore
          furnished to the Bank, fairly present the financial condition of the
          Company as at the Statement Date and the results of its operations for
          the fiscal period ended on the Statement Date. The Company had, on the
          Statement Date, no known liabilities, direct or indirect, fixed or
          contingent, matured or unmatured, or liabilities for taxes, long-term
          leases or unusual forward or long-term commitments not disclosed by,
          or reserved against in, said balance sheet and related statements,
          except as heretofore disclosed to the Bank in writing, and except for
          the Bank's extension(s) of credit to the Company and its Subsidiaries.
          Except for financial statements prepared for interim periods between
          the fiscal year-end, all financial statements were prepared in
          accordance with GAAP applied on a consistent basis throughout the
          periods involved. Since the Statement Date, there has been no material
          adverse change in the business, operations, assets or financial
          condition of the Company, nor is the Company aware of any state of
          facts which (with or without notice or lapse of time or both) could
          reasonably be expected to result in any such material adverse change.

               (e) Litigation. There are no actions, claims, suits or
          proceedings pending, or to the knowledge of the Company, threatened
          against or affecting the Company in any court or before any arbitrator
          or before any government commission, board, bureau or other
          administrative agency which, if adversely determined, may reasonably
          be expected to result in any material and adverse change in the
          business, operations, assets, licenses, qualifications or financial
          condition of the Company.

               (f) Compliance with Laws. The Company is not in violation of any
          provision of any law, or of any judgment, award, rule, regulation,
          order, decree, writ or injunction of any court or public regulatory
          body or authority which could reasonably be expected to have a
          material adverse effect on the business, operations, assets or
          financial condition, assets, licenses, qualifications or financial
          condition of the Company.

               (g) Regulation U. No part of the proceeds of any Advances made
          hereunder will be used to purchase or carry any Margin Stock or to
          extend credit to others for the purpose of purchasing or carrying any
          Margin Stock.

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

               (i) Payment of Taxes. The Company has filed or caused to be filed
          all federal, state, and local income, excise, property and other tax
          returns with respect to the operations of the Company, which are
          required to be filed, all such returns are true and correct in all
          material respects, and the Company has paid or caused to be paid all
          taxes as shown on such returns or on any assessment to the extent that
          such taxes have become due, except in cases where the Company has
          disputed in good faith the amount of said taxes.

                                       19
<PAGE>

               (j) Agreements. The Company is not a party to any agreement,
          instrument or indenture or subject to any restriction materially and
          adversely affecting its business, operations, assets or financial
          condition, except as disclosed in the financial statements described
          in Section 5.1(d) hereof. The Company is not in default in the
          performance, observance or fulfillment of any of the obligations,
          covenants or conditions contained in any agreement, instrument, or
          indenture which default could reasonably be expected to have a
          material adverse effect on the business, operations, properties or
          financial condition of the Company. No holder of any indebtedness of
          the Company has given notice of any asserted default thereunder, and
          no liquidation or dissolution of the Company and no receivership,
          insolvency, bankruptcy, reorganization or other similar proceedings
          relative to the Company or any of its properties is pending, or to the
          knowledge of the Company, threatened.

               (k) Title to Properties. The Company or the applicable Company
          Subsidiary has good, valid, insurable (in the case of real property)
          and marketable title to all material portions of its properties and
          assets (whether real or personal, tangible or intangible) reflected on
          the financial statements described in Section 5.1(d) hereof, except
          for such properties and assets as have been disposed of since the date
          of such financial statements as no longer used or useful in the
          conduct of its business or as have been disposed of in the ordinary
          course of business, and all such properties and assets are free and
          clear of all Liens except as disclosed in such financial statements.

               (l) ERISA. All plans ("Plans") of a type described in
          Section 3(3) of ERISA in respect of which the Company is an
          "Employer," as defined in Section 3(8) of ERISA, are in substantial
          compliance with ERISA, and none of such Plans is insolvent or in
          reorganization, has an accumulated or waived funding deficiency within
          the meaning of Section 412 of the Internal Revenue Code, and the
          Company has not incurred any material liability (including any
          material contingent liability) to or on account of any such Plan
          pursuant to Sections 4062, 4063, 4064, 4201 or 4204 of ERISA; and no
          proceedings have been instituted to terminate any such plan, and no
          condition exists which presents a material risk to the Company of
          incurring a material liability to or on account of any such Plan
          pursuant to any of the foregoing Sections of ERISA. No Plan or trust
          forming a part thereof has been terminated since September 1, 1974.

               (m) Eligibility. The Company has all state and local permits,
          licenses, approvals, registrations and qualifications which it is
          required to have, in order to purchase, sell or service the Pledged
          Mortgage Loans.

               Section 5.2. By the Company Subsidiary. In order to induce the
          Bank to make a Company Subsidiary Loan, each Company Subsidiary does
          represent and warrant to the Bank, as of the date of each Company
          Subsidiary Loan Request and each Company Subsidiary Loan, that:

               (a) Organization; Good Standing; Subsidiaries. Such Company
          Subsidiary is a duly organized, validly existing and in good standing
          under the laws of the state of its jurisdiction of incorporation, and
          is duly registered to do business in and is in good standing under the
          laws of the state of its jurisdiction of incorporation, and has the
          full legal power and authority to own its property and to carry on its
          business as currently conducted, and is duly qualified as a foreign
          corporation Company Subsidiary to do business in and is in good
          standing in each jurisdiction in which the transaction of its business
          makes such qualification necessary, except in jurisdictions, if any,
          where a failure to be in good standing has no material adverse effect
          on the business, operations, assets or financial condition of the
          Company Subsidiary. Such Company Subsidiary has no Subsidiaries.

                                       20
<PAGE>

               (b)Authorization and Enforceability. Such Company Subsidiary has
          the power and authority to execute, deliver and perform this
          Agreement, and all other documents contemplated thereby. The
          execution, delivery and performance by such Company Subsidiary of the
          Note, this Agreement and all other documents contemplated thereby and
          the making of the borrowing thereunder, have been duly and validly
          authorized by all necessary corporate action on the part of such
          Company Subsidiary (none of which actions have been modified or
          rescinded, and all of which actions are in full force and effect) and
          do not and will not conflict with or violate any provision of law or
          of the articles of organization, bylaws or operating agreement of such
          Company Subsidiary, conflict with or result in a breach of or
          constitute a default or require any consent under, or result in the
          creation of any Lien upon any property or assets of such Company
          Subsidiary (other than pursuant to this Agreement), or result in or
          require the acceleration of any indebtedness of such Company
          Subsidiary pursuant to any agreement, instrument or indenture to which
          such Company Subsidiary is a party or by which such Company Subsidiary
          or its property may be bound or affected. This Agreement, and all
          other documents contemplated hereby constitute legal, valid, and
          binding obligations of such Company Subsidiary enforceable in
          accordance with their respective terms, except as limited by
          bankruptcy, insolvency or other similar laws affecting the enforcement
          of creditors' rights and by general principles of equity.

               (c) Approvals. The execution and delivery of the Note, this
          Agreement, and all other documents contemplated thereby and the
          performance of such Company Subsidiary's obligations thereunder do not
          require any license, consent, approval or other action of any state or
          federal agency or governmental or regulatory authority.

               (d) Financial Condition. Any balance sheet of such Company
          Subsidiary as at the Statement Date, and the related statements of
          income and cash flows for the fiscal year ended on the Statement Date,
          theretofore furnished to the Bank, fairly present the financial
          condition of such Company Subsidiary as at the Statement Date and the
          results of its operations for the fiscal period ended on the Statement
          Date. Such Company Subsidiary had, on the Statement Date, no known
          liabilities, direct or indirect, fixed or contingent, matured or
          unmatured, or liabilities for taxes, long-term leases or unusual
          forward or long-term commitments not disclosed by, or reserved against
          in, said balance sheet and related statements except as theretofore
          disclosed to the Bank in writing, and except for the Bank's
          extension(s) of credit to such Company Subsidiary. Except for
          financial statements prepared for interim periods between the fiscal
          year end, all financial statements were prepared in accordance with
          GAAP applied on a consistent basis throughout the periods involved.
          Since the Statement Date, there has been no material adverse change in
          the business, operations, assets or financial condition of such
          Company Subsidiary, nor is such Company Subsidiary aware of any state
          of facts which (with or without notice or lapse of time or both) would
          or could result in any such material adverse change.

                                       21
<PAGE>

               (e) Litigation. There are no actions, claims, suits or
          proceedings pending, or to the knowledge of such Company Subsidiary,
          threatened against or affecting such Company Subsidiary in any court
          or before any arbitrator or before any government commission, board,
          bureau or other administrative agency which, if adversely determined,
          may reasonably be expected to result in any material and adverse
          change in the business, operations, assets, licenses, qualifications
          or financial condition of such Company Subsidiary.

               (f) Compliance with Laws. Such Company Subsidiary is not in
          violation of any provision of any law, or of any judgment, award,
          rule, regulation, order, decree, writ or injunction of any court or
          public regulatory body or authority which might have a material
          adverse effect on the business, operations, assets or financial
          condition, assets, licenses, qualifications or financial condition of
          such Company Subsidiary.

               (g) Regulation U. No part of the proceeds of any Advance will be
          used to purchase or carry any Margin Stock or to extend credit to
          others for the purpose of purchasing or carrying any Margin Stock.

               (h) Investment Company Act. Such Company Subsidiary is not an
          "investment company," or a company controlled by an "investment
          company," within the meaning of the Investment Company Act of 1940, as
          amended.

               (i) Payment of Taxes. Such Company Subsidiary has filed or caused
          to be filed all federal, state, and local income, excise, property and
          other tax returns with respect to the operations of such Company
          Subsidiary, which are required to be filed, all such returns are true
          and correct in all material respects, and such Company Subsidiary has
          paid or caused to be paid all taxes as shown on such returns or on any
          assessment to the extent that such taxes have become due, except in
          cases where such Company Subsidiary has disputed in good faith the
          amount of said taxes.

               (j) Agreements. Such Company Subsidiary is not a party to any
          agreement, instrument or indenture or subject to any restriction
          materially and adversely affecting its business, operations, assets or
          financial condition, except as disclosed in the financial statements
          described in Section 5.2(d). Such Company Subsidiary is not in default
          in the performance, observance or fulfillment of any of the
          obligations, covenants or conditions contained in any agreement,
          instrument, or indenture which default could reasonably be expected to
          have a material adverse effect on the business, operations, properties
          or financial condition of such Company Subsidiary. No holder of any
          indebtedness of such Company Subsidiary has given notice of any
          asserted default thereunder, and no liquidation or dissolution of such
          Company Subsidiary and no receivership, insolvency, bankruptcy,
          reorganization or other similar proceedings relative to such Company
          Subsidiary or any of its properties is pending, or to the knowledge of
          such Company Subsidiary, threatened.

               (k) Title to Properties. Such Company Subsidiary has good, valid,
          insurable (in the case of real property) and marketable title to all
          material portions of its properties and assets (whether real or
          personal, tangible or intangible) reflected on the financial
          statements described in Section 5.2(d), except for such properties and
          assets as have been disposed of since the date of such financial
          statements as no longer used or useful in the conduct of its business
          or as have been disposed of in the ordinary course of business, and
          all such properties and assets are free and clear of all Liens except
          as disclosed in such financial statements.

                                       22
<PAGE>

               (l) Eligibility. Such Company Subsidiary has all state and local
          permits, licenses, approvals, registrations and qualifications which
          it is required to have, in order to purchase or sell Pledged Mortgage
          Loans.

               (m) Security Interest. No authorization, approval or other action
          by, and no notice to or filing with, any governmental authority or
          regulatory body is required (and has not been obtained, delivered or
          filed, as applicable) either (i) for the grant by such Company
          Subsidiary of the security interest granted under this Agreement or
          for the execution, delivery or performance of this Agreement by such
          Company Subsidiary or (ii) for the perfection of or the exercise by
          the Bank of its rights and remedies under this Agreement, other than
          the filing of a financing statement.

               Section 5.3 Special Representations Concerning Collateral. The
          Company and each Company Subsidiary shall represent and warrant to the
          Bank as of the date of this Agreement and as of the date of the
          Advance Request and of the Advance, that:

               (i) The Company Subsidiary owns the Collateral free and clear of
          any Lien, except for the security interest created by this Agreement.
          No financing statement or other instrument similar in effect covering
          all or any part of the Collateral is on file in any recording office,
          except such as may have been filed in favor of Bank relating to this
          Agreement. The Company Subsidiary has no trade names.

               (ii) Except as is disclosed to Bank in writing, to the best of
          Company and Company Subsidiary's knowledge based upon due diligence
          conducted by the Company and/or Company Subsidiary, each Mortgage Loan
          conforms in all material respects to the requirements and the
          specifications set forth in the attached Exhibit C constituting the
          Underwriting Standards.

               (iii) The Mortgage Loan Documents have been duly executed by the
          mortgagor and create valid and legally binding obligations of the
          mortgagor, enforceable in accordance with their terms, except as may
          be limited by bankruptcy or other similar laws affecting the
          enforcement of creditors' rights generally, and general principles of
          equity, and to the knowledge of the Company Subsidiary there are no
          rights of rescission, set-offs, counterclaims or other defenses with
          respect thereto. To the best knowledge of the Company and Company
          Subsidiaries, other than home equity line of credit loans, the full
          original principal amount of each Mortgage Loan (net of any discounts)
          has been fully advanced or disbursed to the mortgagor named therein.
          To the best knowledge of the Company and the Company Subsidiaries,
          other than home equity line of credit loans, there is no requirement
          for future advances and except for Mortgage Loans insured under
          Section 203(k) of the National Housing Act, any and all requirements
          as to completion of any on-site or off-site improvements and as to
          disbursements of any escrow funds therefore have been satisfied.

               (iv) Except as is disclosed to Bank in writing, to the best of
          the Company and Company Subsidiary's knowledge based upon due
          diligence conducted by the Company and/or the Company Subsidiary, each
          of the Mortgage Loans has been originated, made and serviced in
          material compliance with all industry standards, applicable Investor
          and Insurer requirements and all applicable federal, state and local
          statutes, regulations and rules, including, without limitation, the
          Federal Truth-in-Lending Act of 1968, as amended, and Regulation Z
          thereunder, the Federal Fair Credit Reporting Act, the Federal Equal
          Credit Opportunity Act, the Federal Real Estate Settlement Procedures
          Act of 1974, as amended, and Regulation X thereunder, the Home
          Ownership and Equity Protection Act of 1994, as amended, and all
          applicable usury, licensing, real property, consumer protection and
          other laws.

                                       23
<PAGE>

               (v) Except as is disclosed to Bank in writing, to the best of the
          Company and Company Subsidiary's knowledge based upon due diligence
          conducted by the Company and/or the Company Subsidiary, no Mortgage
          Loan is a "high cost mortgage" as defined in Section 152(a) of the
          Home Ownership and Equity Protection Act of 1994. Further, no Mortgage
          Loan is "high cost home loan" or other such corresponding term within
          the meaning of corresponding state laws, including but not limited to,
          the Georgia Fair Lending Act, the New York State Anti-Predatory
          Lending Law, and the New Jersey Homeownership Security Act.

               (vi) Reserved

               (vii) Reserved

               (viii) A title opinion or a valid and enforceable title policy
          currently in full force and effect has been issued for each Mortgage
          Loan which is a first mortgage lien, and in the case of title
          insurance, in an amount not less than the original principal amount of
          such Mortgage Loan, and which title opinion opines or which title
          policy insures that the Mortgage relating thereto is either (i) a
          valid first lien on the property therein described and that the
          mortgaged property is free and clear of all encumbrances and liens
          having priority over the first lien of the Mortgage except for taxes
          not yet due and payable and minor title irregularities that do not
          have a material adverse effect on the use or marketability of the
          mortgaged property, and otherwise in compliance with the requirements
          of the applicable Investor; or (ii) if the Mortgage Loan is insured
          under Title I of the National Housing Act, a valid second lien on the
          property therein described and that the mortgaged property is free and
          clear of all encumbrances and liens (other than the first lien) having
          priority over the second lien of the Mortgage except for taxes not yet
          due and payable and minor title irregularities that do not have a
          material adverse effect on the use or marketability of the mortgaged
          property, and otherwise in compliance with the requirements of the
          applicable Investor.

               (ix) All escrow/custodial accounts have been established in
          accordance with the requirements of FHA, VA and the applicable
          Investor and Insurer and all other applicable laws and by the terms of
          the related Mortgages.

               (x)To the best of the Company and/or Company Subsidiary's
          knowledge, the Company, Company Subsidiary, all prior servicers and,
          if different, the originating mortgagee, have performed all
          obligations required of them to be performed under or pursuant to each
          of the servicing contracts and related requirements of the applicable
          Investor and Insurer and each other document or agreement relating to
          the Mortgage Loans by which the Company and/or Company Subsidiary is
          bound, and no event has occurred and is continuing which, under the
          provisions of any such servicing contracts and related requirements of
          the applicable Investor or other document or agreement, but for the
          passage of time or in, giving of notice, or both, would constitute an
          event of default thereunder.

                                       24
<PAGE>

               (xi) Any and all payments made with respect to the individual
          Mortgage Loans have been and will be applied to such Mortgage Loan in
          accordance with the terms of the Mortgage Note and Mortgage evidencing
          and securing that Mortgage Loan. The books, records, accounts and
          reports of the Company and the Company Subsidiary with respect to the
          Mortgage Loans and servicing contracts have been and will be prepared
          and maintained in accordance with all applicable Investor and Insurer
          requirements, if any.

                                   Article VI

                              Affirmative Covenants

               Section 6.1. Of the Company. The Company agrees that so long as
          the Commitment is outstanding or there remains any obligation of the
          Company or any Company Subsidiary to be paid or performed hereunder or
          under any Note, the Company shall:

               (a) Payment of Note. Punctually cause to be paid by the Company
          Subsidiary the principal and interest on and all other amounts due and
          payable hereunder and under the Note in accordance with the terms
          hereof and thereof.

               (b) Financial Statements and Other Reports. Deliver or cause to
          be delivered or make available to the Bank:

               (i) Upon reasonable request by the Bank, as soon as available and
          in any event within thirty (30) days after each calendar quarter,
          statements of income and cash flows of the Company for the immediately
          preceding quarter, and related balance sheet as of the end of the
          immediately preceding quarter, all in reasonable detail and certified
          by the chief financial officer or other appropriate officer of the
          Company, subject, however, to year-end audit adjustments.

               (ii) As soon as available and in any event within one hundred
          twenty (120) days after the close of each fiscal year: original
          independently audited financial statements of the Company for the most
          recent fiscal year-end (the "Statement Date") containing a balance
          sheet and related statements of income and retained earnings and
          changes in financial position for the period ended on the Statement
          Date, all prepared in accordance with GAAP applied on a basis
          consistent with prior periods and reasonably acceptable to the Bank
          and accompanied by an opinion of an accounting firm reasonably
          satisfactory to the Bank, or other independent public accountants of
          recognized standing selected by the Company and acceptable to the
          Bank, as to said financial statements and a certificate signed by the
          chief financial officer or other appropriate officer of the Company
          stating that said financial statements fairly present the financial
          condition and results of operations of the Company as at the end of,
          and for, such year.

                                       25
<PAGE>

               (iii) Together with each delivery of financial statements
          pursuant to Sections 6.1(b) (i) and (ii) hereof, an officer's
          certificate stating that the signatory or signatories thereto have
          reviewed the terms of this Agreement and have made, or caused to be
          made under their supervision, a review in reasonable detail of the
          transactions and conditions of the Company during the accounting
          period covered by such financial statements and that such review has
          not disclosed the existence during or at the end of such accounting
          period, and that the signatory or signatories thereto do not have
          knowledge of the existence as of the date of the Officer's
          Certificate, of any Default or if any Default existed or exists,
          specifying the nature and period of the existence thereof and what
          action the Company has taken, is taking and proposes to take with
          respect thereto.

               (iv) Such other reports in respect of the Mortgage Loans pledged
          as collateral, in such detail and at such times as the Bank in its
          reasonable discretion may request at any time or from time to time.

               (v) Copies of all regular or periodic financial and other
          reports, if any, which the Company shall file with the Securities and
          Exchange Commission or any governmental agency successor thereto.

               (vi) Upon request by the Bank, copies of audits, examinations and
          reports concerning the operations of the Company from any Investor,
          Insurer or licensing authority to the extent not subject to
          restrictions on disclosure.

               (vii) From time to time, with reasonable promptness, such further
          information regarding the business, operations, properties or
          financial condition of the Company or of any one or more of Company
          Subsidiaries as the Bank may reasonably request.

               Except for financial statements and reports prepared for interim
          periods between the fiscal year end, all financial statements and
          reports furnished to the Bank hereunder shall be prepared in
          accordance with GAAP, applied on a basis consistent with that applied
          in preparing the financial statements as at, and for the period ended,
          the Statement Date (except to the extent otherwise required to conform
          to good accounting practice).

               (c)Maintenance of Existence; Conduct of Business. Preserve and
          maintain its corporate existence in good standing and all of its
          rights, privileges, licenses, qualifications and franchises necessary
          or desirable in the normal conduct of its business, including, without
          limitation, as described under Section 5.1(n) hereof; and make no
          material change in the nature or character of its business or engage
          in any business in which it was not engaged on the date of this
          Agreement.

               (d) Compliance with Applicable Laws. Comply with the requirements
          of all applicable laws, rules, regulations and orders of any
          governmental authority and customary industry standards, a breach of
          which could reasonably be expected to materially adversely affect its
          business, operations, assets, or financial condition or which could
          reasonably be expected to materially adversely impair the ability of
          Company to perform its obligation hereunder, except where contested in
          good faith and by appropriate proceedings.

                                       26
<PAGE>

               (e) Inspection of Books, Records, Systems, Properties, Advances,
          Mortgage Loans, and Collateral. Permit authorized representatives of
          the Bank, its parent company or affiliates, upon prior notice to the
          Company, (i) to discuss the business, operations, assets and financial
          condition of the Company and its Subsidiaries with their officers and
          employees, (ii) to examine their books, records, information and
          service systems and properties, and make copies or extracts thereof
          subject to applicable laws with respect to confidentiality of customer
          records, including without limitation access to Company Subsidiaries'
          and the custodian's books, records, systems, properties, and
          documents, (iii) to examine and audit the Company Subsidiaries' Loan
          accounts, individual Mortgage Loans, and related documentation and
          Collateral, and (iv) for those purposes, to visit the Company's and
          all Company Subsidiaries' offices, all at such reasonable times as the
          Bank may request. The Company shall provide its internal and
          independent accountants with a copy of this Agreement promptly after
          the execution hereof and shall instruct them to answer candidly and
          fully any and all questions that the officers of the Bank or any
          authorized representatives of the Bank may address to them in
          reference to the financial condition or affairs of the Company and the
          Company Subsidiaries. In addition to the foregoing, the Company shall
          provide, or cause to be provided, live, "real time" access to the data
          system(s) for all records maintained by the Company and/or each
          Company Subsidiary related to the Mortgage Loans. The purposes or uses
          for which the Bank may use the right of access to such data system
          records, and the rights of inspection, examination, and audit set
          forth in this Section shall include, without limitation, the
          following: (i) to ensure that the Company Subsidiary Loans, their
          administration, and their payment processing remain in compliance with
          the terms of this Agreement; (ii) to enable the Bank (w) to
          periodically sample or test the flow of payments received from its
          Mortgage Loan obligors to ensure that monies are being received from
          its Mortgage Loan obligors and not from other sources, (x) to see if
          there is any rise in defaults and bankruptcy filings among its
          Mortgage Loan obligors, (y) to confirm that payments on particular
          Mortgage Loans are being properly credited to the related Company
          Subsidiary Loan, and (z) to determine the extent to which individual
          Company Subsidiary Mortgage Loan "pools" are being supported by
          payments from other Company Subsidiary Mortgage Loan pools, and to the
          extent to which such payments are correspondingly supporting other
          outstanding Company Subsidiary Loans issued under this Agreement; and
          (iii) to enable the Bank to periodically determine the value of the
          Bank's Collateral from time to time and to ensure that the Collateral
          continues to meet the Bank's underwriting standards throughout the
          life of those Mortgage Loans.

               (f) Notice. Give prompt written notice to the Bank of (i) any
          action, suit or proceeding instituted against the Company in any
          federal or state court or before any commission or other regulatory
          body (federal, state or local, domestic or foreign) seeking specified
          damages of One Hundred Thousand Dollars ($100,000) or more in a
          writing containing the details thereof, (ii) the filing, recording or
          assessment of any federal, state or local tax lien against it, or any
          of its assets, which has a material adverse affect on the Company
          (iii) the occurrence of any Default or Event of Default hereunder,
          (iv) [Reserved], (v) the suspension, revocation or termination of any
          existing credit or Investor relationship made to the Company to
          facilitate the sale and/or origination of residential mortgages which
          has a material adverse affect on the Company, (vi) the transfer or
          loss of any servicing contract to which the Company is a party, or
          which is held for the benefit of the Company, and the reason for such
          transfer or loss, if known to the Company, which has a material
          adverse affect on the Company (vii) any demand by any Investor or
          Insurer for either the repurchase of a Mortgage Loan or
          indemnification which has a material adverse affect on the Company,
          and (viii) any other action, event or condition of any nature which
          has a material adverse effect upon the business, operations, assets,
          or financial condition of the Company or which, with or without notice
          or lapse of time or both, would constitute a default under any other
          material agreement, instrument or indenture to which the Company is a
          party or to which the Company, its properties or assets may be
          subject.

                                       27
<PAGE>

               (g) Payment of Debt, Taxes, etc. Pay and perform all obligations
          of the Company promptly and in accordance with the terms thereof and
          pay and discharge or cause to be paid and discharged promptly all
          taxes, assessments and governmental charges or levies imposed upon the
          Company or upon its income, receipts or properties before the same
          shall become past due, as well as all lawful claims for labor,
          materials and supplies or otherwise which, if unpaid, might become a
          Lien or charge upon such properties or any part thereof; provided,
          however, that the Company shall not be required to pay taxes,
          assessments or governmental charges or levies or claims for labor,
          materials or supplies for which the Company shall have obtained an
          adequate bond or adequate insurance or which are being contested in
          good faith and by proper proceedings which are being reasonably and
          diligently pursued.

               (h) Insurance. Maintain (i) errors and omissions insurance or
          mortgage impairment insurance and blanket bond coverage, with such
          companies and in such amounts as satisfy prevailing FNMA, GNMA or
          FHLMC requirements applicable to a qualified mortgage originating
          institution, and (ii) liability insurance and fire and other hazard
          insurance on its properties, with responsible insurance companies, in
          such amounts and against such risks as is customarily carried by
          similar businesses operating in the same vicinity, and (iii) within
          thirty (30) days after notice from the Bank, will obtain such
          additional insurance as the Bank shall reasonably require, all at the
          sole expense of the Company. Copies of all such policies shall be
          furnished to the Bank without charge upon the reasonable request of
          the Bank.

               (i) Purchased Loans. Indemnify and hold the Bank harmless from
          and against any loss, including reasonable attorneys' fees and costs,
          attributable to the failure of any seller of the Mortgage Loans to the
          Company or the Company Subsidiary, or any escrow agent, to comply with
          the disbursement or instruction letter or letters of the Company, the
          Company Subsidiary or of the Bank relating to Mortgage Loans purchased
          by the Company or the Company Subsidiary with an Advance under a
          Company Subsidiary Loan.

               (j) Other Loan Obligations. Perform in all material respects all
          obligations under the terms of each loan agreement, note, mortgage,
          security agreement or debt instrument by which the Company Subsidiary
          is bound or to which any of its property is subject, and will promptly
          notify the Bank in writing of the cancellation or reduction of any of
          its other mortgage warehousing lines of credit or agreements with any
          other lender.

               (k) Use of Proceeds of Advances. Cause the proceeds of each
          Company Subsidiary Loan to be used solely for the purpose of financing
          the purchase or origination of Mortgage Loans or to refinance Company
          Subsidiary Loans.

                                       28
<PAGE>

               (l) Due Diligence by Bank. Assist the Bank in the performance of
          the Bank's due diligence in response to Company Subsidiary Loan
          Requests in order for the Bank to gain assurance that the terms and
          conditions of this Agreement will be met, and that the product
          standards set forth in Exhibit C will be satisfied, with respect to
          the requested Company Subsidiary Loan, and also shall cause its
          Company Subsidiaries to provide such assistance.

               (m) Due Diligence by Company. Perform reasonable due diligence
          when agreeing to purchase Mortgage Loans to be assigned to Company
          Subsidiaries and to be financed by Advances from the Bank in order to
          ensure that those Mortgage Loans comply with the terms and conditions
          of this Agreement and with the product standards set forth in Exhibit
          C.

               (n) Loan Purchase Agreement. Use its best commercially reasonable
          efforts, reasonably and in good faith, to include covenants,
          representations, and warranties covering the following items in its
          Mortgage Loan purchase agreements with its sellers, and cause Company
          Subsidiaries to use the same efforts in their purchase agreements with
          their sellers: (i) standard representations and warranties as to the
          due organization of the seller and the seller's authorization to sell
          the loans; (ii) representations and warranties regarding the mortgage
          loans being purchased, and the documentation for the same consistent
          with general commercial standards, but in any event, having
          representations and warranties consistent with the requirements for
          Mortgage Loans set forth in this Agreement; (iii) standard remedies
          for breach of contract; (iv) covenant that the seller will buy back
          from the Company Subsidiary (or any assignee, including the Company
          Subsidiary) any mortgage loan which does not comply with
          representations and warranties regarding it; and (vi) covenant that
          the seller will indemnify and hold the Company Subsidiary, and any
          assignee, including the Company Subsidiary, harmless against any and
          all damages which the indemnified party may suffer on account of any
          mortgage loan which does not meet representations and warranties.

               (o) Minimum Net Worth. The Company and its Subsidiaries shall
          together maintain a minimum Net Worth of not less than $10,000,000.

               (p) Administrative Services Agreement. Within a reasonable period
          of time following the execution of the Agreement, the Company shall
          enter into and maintain in effect an Administrative Services Agreement
          with each Company Subsidiary, reasonably acceptable to the Bank, under
          which the Company provides the Company Subsidiary with any and all
          administrative, document, and payment processing services which the
          Company Subsidiary may need in connection with its business, and under
          which the Company Subsidiary compensates the Company for the provision
          of those services.

               (q) Custodial Agreement. Maintain in effect the Custodial
          Agreement, or another custodial agreement with another custodian with
          substantially the same terms as the Custodial Agreement. The Company
          shall cause each Company Subsidiary to become a party to the Custodial
          Agreement or other custodial agreement.

               (r) Company Subsidiary Compliance. The Company shall cause each
          Company Subsidiary to full comply with the terms of this Agreement,
          its Note, and all related agreements or instruments executed and
          delivered to Bank in connection herewith or in connection with a
          Company Subsidiary Loan.

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<PAGE>

               Section 6.2. Of the Company Subsidiary. Each Company Subsidiary
          that becomes a party to this Agreement agrees that so long as the
          Commitment or its Company Subsidiary Loan is outstanding or there
          remains any obligations of the Company Subsidiary to be paid or
          performed under its Note, or any of its Pledged Mortgage Loans remain
          subject to this Agreement, the Company Subsidiary shall:

               (a) Payment of Note. Punctually pay the principal and interest on
          and all other amounts due and payable under this Agreement or the Note
          in accordance with the terms thereof.

               (b) Reports. Make available, deliver or cause to be delivered to
          the Bank such reports as set forth below:

              (i) Such other reports in respect of the Pledged Mortgage Loans,
          in such detail and at such times as the Bank in its reasonable
          discretion may request at any time or from time to time.

               (iii) Upon request, make available to the Bank copies of audits,
          examinations and reports concerning the operations of the Company
          Subsidiary from any Investor, Insurer or licensing authority to the
          extent not subject to restrictions on disclosure.

               (iv) Make available to the Bank from time to time, with
          reasonable promptness, such further information regarding the
          business, operations, properties or financial condition of the Company
          Subsidiary as the Bank may reasonably request.

          All financial statements and reports furnished to the Bank hereunder
          shall be prepared in accordance with GAAP, applied on a basis
          consistent with that applied in preparing the financial statements as
          at, and for the period ended, the statement date (except to the extent
          otherwise required to conform to good accounting practice).

               (c) Maintenance of Existence; Conduct of Business. Preserve and
          maintain its Company Subsidiary existence in good standing and all of
          its rights, privileges, licenses, qualifications and franchises
          necessary or desirable in the normal conduct of its business,
          including, without limitation, its eligibility as an approved lender
          and issuer as described under Section 5.2(l) hereof; and make no
          material change in the nature or character of its business or engage
          in any business in which it was not engaged on the date of this
          Agreement.

               (d) Compliance with Applicable Laws. Comply with the requirements
          of all applicable laws, rules, regulations and orders of any
          governmental authority and customary industry standards, a breach of
          which could reasonably be expected to materially adversely affect its
          business, operations, assets, or financial condition or which could
          reasonably be expected to materially adversely impair the ability of
          Company Subsidiary to perform its obligations under this Agreement and
          the Note, except where contested in good faith and by appropriate
          proceedings.

                                       30
<PAGE>

               (e) Inspection of Books, Records, Systems, and Properties. Permit
          authorized representatives of the Bank, its parent Company Subsidiary
          or affiliates, upon prior notice to the Company Subsidiary, (i) to
          discuss the business, operations, assets and financial condition of
          the Company Subsidiary with the officers and employees, (ii) to
          examine its books, records, information and service systems, and
          properties, and make copies or extracts thereof subject to applicable
          laws with respect to confidentiality of customer records, including
          without limitation access to the Custodian's books, records, systems,
          properties, and documents, (iii) to examine and audit its Company
          Subsidiary Loan Advances, individual Pledged Mortgage Loans, and
          related documentation and Collateral, and (iv) for those purposes, to
          visit the Company Subsidiary's offices, all at such reasonable times
          as the Bank may request. The Company Subsidiary shall provide its
          internal and independent accountants with a copy of this Agreement
          promptly after the execution thereof and shall instruct them to answer
          candidly and fully any and all questions that the officers of the Bank
          or any authorized representatives of the Bank may address to them in
          reference to the financial condition or affairs of the Company
          Subsidiary. The purposes or uses for which the Bank may use the right
          of inspection, examination, and audit set forth in this Section shall
          include, without limitation, the following: (i) to ensure that the
          Company Subsidiary's Loan, its administration, and its payment
          processing remain in compliance with the terms of this Agreement
          generally; (ii) to enable the Bank (w) to periodically sample or test
          the flow of payments received from its Pledged Mortgage Loan obligors
          and not from other sources, (x) to see if there is any rise in
          bankruptcy filings among its Pledged Mortgage Loan obligors, (y) to
          see if payments on particular Pledged Mortgage Loans are being
          credited to that Company Subsidiary's Loan properly, and (z) to
          determine the extent to which such payments are supporting other
          outstanding Company Subsidiary Loans issued under this Agreement; and
          (iii) to enable the Bank to periodically apply its collateral
          eligibility standards to the Company Subsidiary's Pledged Mortgage
          Loans in order to determine the value of the Bank's Collateral and to
          ensure that the Collateral continues to meet the Bank's underwriting
          standards throughout the life of those Pledged Mortgage Loans.

               (f) Notice. Give prompt written notice to the Bank of (i) any
          action, suit or proceeding instituted against the Company Subsidiary
          in any federal or state court or before any commission or other
          regulatory body (federal, state or local, domestic or foreign) seeking
          specified damages of One Hundred Thousand Dollars ($100,000) or more
          in a writing containing the details thereof, (ii) the filing,
          recording or assessment of any federal, state or local tax lien
          against it, or any of its assets, which has a material adverse affect
          on the Company Subsidiary (iii) the occurrence of any Default or Event
          of Default hereunder, (iv) the actual or threatened suspension,
          revocation or termination of the Company Subsidiary's eligibility, in
          any respect, as an approved lender, and issuer as described under
          Section 5.1(m) hereof which has a material adverse affect on the
          Company Subsidiary, (v) the suspension, revocation or termination of
          any existing credit or Investor relationship made to the Company
          Subsidiary to facilitate the sale and/or origination of residential
          mortgages which has a material adverse affect on the Company
          Subsidiary, (vi) the transfer or loss of any servicing contract to
          which the Company Subsidiary is a party, or which is held for the
          benefit of the Company Subsidiary, and the reason for such transfer or
          loss, if known to the Company Subsidiary, which has a material adverse
          affect on the Company Subsidiary (vii) any demand by any Investor or
          Insurer for either the repurchase of a Pledged Mortgage Loan or
          indemnification which has a material adverse affect on the Company
          Subsidiary, and (viii) any other action, event or condition of any
          nature which has a material adverse effect upon the business,
          operations, assets, or financial condition of the Company Subsidiary
          or which, with or without notice or lapse of time or both, would
          constitute a default under any other material agreement, instrument or
          indenture to which the Company Subsidiary is a party or to which the
          Company Subsidiary, its properties or assets may be subject.

                                       31
<PAGE>

               (g) Payment of Debt, Taxes, etc. Pay and perform all obligations
          of the Company Subsidiary promptly and in accordance with the terms
          thereof and pay and discharge or cause to be paid and discharged
          promptly all taxes, assessments and governmental charges or levies
          imposed upon the Company Subsidiary or upon its income, receipts or
          properties before the same shall become past due, as well as all
          lawful claims for labor, materials and supplies or otherwise which, if
          unpaid, might become a Lien or charge upon such properties or any part
          thereof; provided, however, that the Company Subsidiary shall not be
          required to pay taxes, assessments or governmental charges or levies
          or claims for labor, materials or supplies for which the Company
          Subsidiary shall have obtained an adequate bond or adequate insurance
          or which are being contested in good faith and by proper proceedings
          which are being reasonably and diligently pursued.

               (h) Insurance. Maintain or cause to be maintained liability
          insurance and fire and other hazard insurance on its properties, with
          responsible insurance companies, in such amounts and against such
          risks as is customarily carried by similar businesses operating in the
          same vicinity, and (iii) within thirty (30) days after notice from the
          Bank, will obtain such additional insurance as the Bank shall
          reasonably require, all at the sole expense of the Company Subsidiary.
          Copies of all such policies shall be furnished to the Bank without
          charge upon request of the Bank.

               (j) Purchased Loans. Indemnify and hold the Bank harmless from
          and against any loss, including reasonable attorneys' fees and costs,
          attributable to the failure of any seller of the Pledged Mortgage
          Loans to the Company or the Company Subsidiary, or any escrow agent,
          Company Subsidiary to comply with the disbursement or instruction
          letter or letters of the Company, the Company Subsidiary or of the
          Bank relating to Mortgage Loans purchased by the Company or the
          Company Subsidiary with the Company Subsidiary Loan under this
          Agreement.

               (k) Other Loan Obligations. Perform in all material respects all
          obligations under the terms of each loan agreement, note, mortgage,
          security agreement or debt instrument by which the Company Subsidiary
          is bound or to which any of its property is subject, and will promptly
          notify the Bank in writing of the cancellation or reduction of any of
          its other mortgage warehousing lines of credit or agreements with any
          other lender.

               (l) Use of Proceeds of Advances. Use the proceeds of the Company
          Subsidiary Loan solely for the purpose of financing the purchase or
          origination of Pledged Mortgage Loans.

               (m) Administrative Services Agreement. Within a reasonable period
          of time following the execution of the Agreement, the Company
          Subsidiary shall enter into and maintain in effect an Administrative
          Services Agreement with the Company, reasonably acceptable to the
          Bank, under which the Company provides the Company Subsidiary with any
          and all administrative, document, and payment processing services
          which the Company Subsidiary may need in connection its business and
          under which the Company compensates the Company Subsidiary for the
          provision of those services.

                                       32
<PAGE>

               (o) [Reserved]

               (p) Due Diligence by Bank. Assist the Bank in the performance of
          the Bank's due diligence in response to the Company Subsidiary Loan
          Request by the Company Subsidiary in order for the Bank to gain
          assurance that the terms and conditions of this Agreement will be met,
          and that the product standards set forth in Exhibit C will be
          satisfied, with respect to the requested Advance.

          6.3 Special Affirmative Covenants Concerning Collateral.

               (i) The Company and/or the Company Subsidiary warrants and will
          defend the right, title and interest of the Bank in and to the Pledged
          Mortgage Loans against the claims and demands of all persons
          whomsoever.

               (ii) The Company and/or the Company Subsidiary shall service or
          cause to be serviced in all material respects all Pledged Mortgage
          Loans in accordance with the standard requirements of the issuers of
          the respective Purchase Commitments covering the same and all
          applicable governmental requirements, including without limitation
          taking all actions necessary to enforce the obligations of the
          obligors under such Pledged Mortgage Loans. The Company Subsidiary
          shall hold all escrow funds collected in respect of Pledged Mortgage
          Loans in trust, without commingling the same with non-custodial funds,
          and apply the same for the purposes for which such funds were
          collected.

               (iii) The Company and/or the Company Subsidiary shall also
          execute and deliver to the Bank such instruments of sale, pledge or
          assignment or transfer, and such powers of attorney, as reasonably
          required by the Bank, and shall do and perform all matters and things
          necessary or desirable to be done or observed, for the purpose of
          effectively creating, maintaining and preserving the security and
          benefits intended to be afforded the Bank under this Agreement. The
          Bank shall have all the rights and remedies of a secured party under
          the Uniform Commercial Code of the State of New York, or any other
          applicable law, in addition to all rights provided for herein.

               (iv) The Company and/or the Company Subsidiary will promptly
          comply in all material respects with the terms and conditions of all
          Purchase Commitments, and all extensions, renewals and modifications
          or substitutions thereof or thereto. The Company and/or the Company
          Subsidiary will cause to be delivered to the Investor the Pledged
          Mortgage Loans to be sold under each Purchase Commitment not later
          than the earlier of three (3) Business Days prior to the expiration
          thereof or three (3) Business Days prior to the deadline for
          acquisition of the Pledged Mortgage Loan by the Investor thereunder.

               (v) The Company and/or the Company Subsidiary shall maintain, at
          its principal office, or in the office of the custodian under the
          Custodial Agreement, or in the office of a computer service bureau
          engaged by the Company and/or the Company Subsidiary or by the
          custodian and approved by the Bank, and, upon request, shall make
          available to the Bank the originals, or copies in any case where the
          original has been delivered to the Bank, or to an Investor, of its
          Mortgage Notes and Mortgages included in Pledged Mortgage Loans,
          Purchase Commitments, and all related Pledged Mortgage Loan documents
          and instruments, and all files, surveys, certificates, correspondence,
          appraisals, computer programs, tapes, discs, cards, accounting records
          and other information and data relating to the Collateral.

                                       33
<PAGE>

               (vi) Any and all payments made with respect to the individual
          Pledged Mortgage Loans have been will be applied to such Pledged
          Mortgage Loan in accordance with the terms of the Mortgage Note and
          Mortgage evidencing and securing that Pledged Mortgage Loan, and the
          books, records, accounts and reports of the Company and/or the Company
          Subsidiary with respect to the Pledged Mortgage Loans and servicing
          contracts have will be prepared and maintained in accordance with all
          applicable Investor and Insurer requirements.

                                   Article VII

                               Negative Covenants

          Section 7.1. Of the Company. The Company agrees that so long as the
          Commitment is outstanding or there remains any obligation of the
          Company or any Company Subsidiary to be paid or performed hereunder or
          under any Note, the Company shall not, either directly or indirectly,
          without the prior written consent of the Bank, which shall not be
          unreasonably withheld:

               (a) Merger; Sale of Assets; Acquisitions; Change in Control.
          Except for the sale or purchase of loans in the ordinary course of the
          business, liquidate, dissolve, consolidate or merge or sell, transfer
          or otherwise dispose of, any substantial part of its assets, or
          acquire substantially all of the assets of another, or
          permit ownership beneficially or of record of the voting stock of
          Company which results in Thomas J. Axon having a non-controlling
          ownership interest of the voting stock of the Company. For purposes of
          this section, "control" shall have the meaning set forth in Rule 12b-2
          under the Exchange Act.

               (b) Distributions or Payments of Company. Without the consent of
          Bank, cause to be paid any dividends which exceed in the aggregate the
          amount permitted in Section 2.5(a).

               (c) Distributions or Payments From Company Subsidiary. Cause to
          be paid to itself, or receive, or accept any payments, distributions,
          or dividends from any of its Company Subsidiaries which exceed in the
          aggregate the amount permitted in Section 2.5(a); provided that if a
          Default has occurred and is continuing, the Bank may withhold its
          consent in its reasonable discretion exercised in good faith.

               (d) Special Negative Covenants Concerning Collateral. Except for
          actions taken in the ordinary course of servicing Pledged Mortgage
          Loans, the Company shall not do, and shall not cause or permit any
          Company Subsidiary to grant any option with respect to, or pledge or
          otherwise encumber (except pursuant to this Agreement or sales to
          Investors for fair value) any of the Collateral or any interest
          therein.

          Section 7.2. Covenants Of the Company Subsidiary. Each Company
          Subsidiary that becomes a party to this Agreement agrees that so long
          as the Commitment or its Company Subsidiary Loan is outstanding or
          there remains any obligations of the Company Subsidiary to be paid or
          performed under its Note, or any of its Pledged Mortgage Loans remain
          subject to this Agreement, the Company Subsidiary shall not take the
          following actions which could reasonably be expected to materially and
          adversely impact the Company or Company Subsidiary's ability to
          perform under this Agreement, either directly or indirectly, without
          the prior written consent of the Bank:

                                       34
<PAGE>

               (a) Contingent Liabilities. Assume, guarantee, endorse, or
          otherwise become liable for the obligation of any Person except by
          endorsement of negotiable instruments for deposit or collection in the
          ordinary course of business.

               (b) Merger; Sale of Assets; Acquisitions; Change in Control.
          Except for the sale or purchase of loans in the ordinary course of the
          business, liquidate, dissolve, consolidate or merge or sell, transfer
          or otherwise dispose of, any substantial part of its assets, or
          acquire substantially all of the assets of another, or permit
          ownership beneficially or of record of the voting stock of Company
          Subsidiary which results in the Company having an ownership interest
          of less than one hundred percent (100%) of the voting stock of the
          Company Subsidiary.

               (c) Additional Indebtedness. Create, incur, assume or suffer to
          exist any indebtedness other than indebtedness permitted under the
          this Agreement.

               (d) Related Party Transactions. Enter into, or be a party to any
          transaction with any affiliate of the Company, except for (a) the
          transactions contemplated by the this Agreement, including without
          limitation, the transactions contemplated by the Administrative
          Services Agreement and the servicing agreement with the Company and
          (b) to the extent not otherwise prohibited under this Agreement, other
          transactions in the nature of employment contracts and directors'
          fees, upon fair and reasonable terms materially no less favorable to
          it than would be obtained in a comparable arm's-length transaction
          with a person not an affiliate.

               (e) Collateral and Agreements. Except in the ordinary course of
          business, cancel or terminate any of the Collateral Documents or
          Purchase Agreements to which it is party (in any capacity), or consent
          to or accept any cancellation or termination of any of such
          agreements, or materially amend or otherwise modify any term or
          condition of any of the Collateral Documents or Purchase Agreements to
          which it is party (in any capacity) or give any consent, waiver or
          approval under any such agreement, or waive any default under or
          breach of any of the Collateral Documents or Purchase Agreements to
          which it is party (in any capacity) or take any other action under any
          such agreement not required by the terms thereof, unless (in each
          case) the Bank shall have consented thereto (which consent shall not
          unreasonably be withheld to the extent set forth in such Collateral
          Documents or Purchase Agreements); provided that no such consent shall
          be required to the extent that any such action is in the ordinary
          course of business of servicing the Pledged Mortgage Loans in
          accordance with reasonable and customary servicing practices in the
          industry for the same type of mortgage loans as the Pledged Mortgage
          Loan.

                                       35
<PAGE>

               (f) Investments & Subsidiaries. form, or cause to be formed, any
          subsidiaries; or make or suffer to exist any loans or advances to, or
          extend any credit to, or make any investments (by way of transfer of
          property, contributions to capital, purchase of stock or securities or
          evidences of indebtedness, acquisition of the business or assets, or
          otherwise) in, any affiliate or any other person.

              (g) Distributions or Payments of Company Subsidiary. Without the
          consent of Bank, cause to be paid to itself, or receive, or accept any
          payments or distributions from the Pledged Mortgage Loans which exceed
          in the aggregate the amount permitted in Section 2.5(a).

               (h) Special Negative Covenants Concerning Collateral. Except for
          actions taken in the ordinary course of servicing Pledged Mortgage
          Loans, grant any option with respect to, or pledge or otherwise
          encumber (except pursuant to this Agreement or sales to Investors for
          fair value) any of the Collateral or any interest therein.

                                  Article VIII

                               Defaults; Remedies

          Section 8.1. Events of Default by the Company. The occurrence of any
          of the following conditions or events shall be an event of default
          ("Event of Default") under this Agreement:

               (a) Failure of any Company Subsidiary to pay any installment of
          principal and/or interest when due or required under its Note or this
          Agreement, and whether at stated maturity, by acceleration, or
          otherwise; or failure of the Company or any Company Subsidiary to
          otherwise pay any other sum when due by the Company or such Company
          Subsidiary under this Agreement or under any other agreement related
          hereto, and such default shall have continued unremedied for fifteen
          days; or

               (b) Failure of the Company or any Company Subsidiary to pay, or
          any default in the payment of any principal or interest on, any
          indebtedness or in the payment of any contingent obligation which are
          in the aggregate amount of One Hundred Thousand Dollars ($100,000.00)
          or more; or breach or default with respect to any other material term
          of any indebtedness or of any loan agreement, note, mortgage, security
          agreement, indenture or other agreement relating thereto, if the
          effect of such failure, default or breach is to cause, or to permit
          the holder or holders thereof (or a trustee on behalf of such holder
          or holders) to cause, indebtedness of the Company, the Company
          Subsidiary or any other Subsidiaries of the Company in the aggregate
          amount of more than One Hundred Thousand Dollars ($100,000.00) or more
          to become or be declared due prior to its stated maturity; or

               (c) (i) Failure of the Company to perform or comply with any term
          or condition applicable to it contained in Sections 7.1 of this
          Agreement, or failure of the Company Subsidiary to perform or comply
          with any term or condition applicable to it contained in Sections 7.2
          of this Agreement, or with any like provision contained in the Note;
          or (ii) failure of the Company to perform or comply with any term or
          condition applicable to it contained in Section 6.1 of this Agreement,
          or failure of the Company Subsidiary to perform or comply with any
          term or condition applicable to it contained in Section 6.2 of this
          Agreement, or with any like provision contained in the Note after
          receipt of notice of such Default from the Bank.

                                       36
<PAGE>

               (d) Any of the Company's or the Company Subsidiaries'
          representations or warranties made herein or in any statement or
          certificate at any time given by the Company or any Company Subsidiary
          in writing pursuant hereto or in connection herewith shall be false in
          any material respect on the date as of which made; or

               (e) The Company or any Company Subsidiary shall default in the
          performance of or compliance with any term contained in this Agreement
          other than those referred to above in Sections 8.1 (a), (b) or (c) and
          such default shall not have been remedied or waived within thirty (30)
          days after receipt of notice from the Bank of such default; or

               (f) (i) A court having jurisdiction shall enter a decree or order
          for relief in respect of the Company or any Company Subsidiary in an
          involuntary case under any applicable bankruptcy, insolvency or other
          similar law now or hereafter in effect, which decree or order is not
          stayed; or (ii) any other similar relief shall be granted under any
          applicable federal or state law; or a decree or order of a court
          having jurisdiction for the appointment of a receiver, liquidator,
          sequestrator, trustee, custodian or other officer having similar
          powers over the Company or any Company Subsidiary, or over all or a
          substantial part of their respective properties, shall have been
          entered; or the involuntary appointment of an interim receiver,
          trustee or other custodian of the Company or any Company Subsidiary
          for all or a substantial part of its respective property; or the
          issuance of a warrant of attachment, execution or similar process
          against any substantial part of the property of the Company or of any
          Company Subsidiary, and the continuance of any such events in this
          clause (ii) for sixty (60) days unless dismissed, bonded off or
          discharged; or

               (g) The Company or any Company Subsidiary shall have an order for
          relief entered with respect to it or commence a voluntary case under
          any applicable bankruptcy, insolvency or other similar law now or
          hereafter in effect, or shall consent to the entry of an order for
          relief in an involuntary case, or to the conversion to an involuntary
          case, under any such law, or shall consent to the appointment of or
          taking possession by a receiver, trustee or other custodian for all or
          a substantial part of its property; the making by the Company or any
          Company Subsidiary of any assignment for the benefit of creditors; or
          the inability or failure of the Company or any Company Subsidiary, or
          the admission by the Company or any Company Subsidiary in writing of
          its inability, to pay its debts as such debts become due; or

               (h) Any money judgment, writ or warrant of attachment, or similar
          process involving in any case an amount in excess of One Hundred
          Thousand Dollars ($100,000.00) shall be entered or filed against the
          Company or any Company Subsidiary or any of their respective assets
          and shall remain undischarged, unvacated, unbonded or unstayed for a
          period of sixty (60) days or in any event later than five (5) days
          prior to the date of any proposed sale thereunder; or

               (i) Any order, judgment or decree shall be entered against the
          Company or any Company Subsidiary decreeing the dissolution,
          liquidation or split up of the Company or any Company Subsidiary and
          such order shall remain undischarged or unstayed for a period in
          excess of thirty (30) days; or

                                       37
<PAGE>

               (j) Any Plan maintained by the Company shall be terminated within
          the meaning of Title IV of ERISA or a trustee shall be appointed by an
          appropriate United States district court to administer any Plan, or
          the Pension Benefit Guaranty Corporation (or any successor thereto)
          shall institute proceedings to terminate any Plan or to appoint a
          trustee to administer any Plan if as of the date thereof the Company's
          liability (after giving effect to the tax consequences thereof) to the
          Pension Benefit Guaranty Corporation (or any successor thereto) for
          unfunded guaranteed vested benefits under the Plan exceeds the then
          current value of assets accumulated in such Plan by more than One
          Hundred and Fifty Thousand Dollars ($150,000.00) (or in the case of a
          termination involving the Company as a "substantial employer" (as
          defined in Section 4001(a)(2) of ERISA) the withdrawing employer's
          proportionate share of such excess shall exceed such amount); or

               (k) The Company as employer under a Multiemployer Plan shall have
          made a complete or partial withdrawal from such Multiemployer Plan and
          the plan sponsor of such Multiemployer Plan shall have notified such
          withdrawing employer that such employer has incurred a withdrawal
          liability in an annual amount exceeding One Hundred and Fifty Thousand
          Dollars ($150,000.00); or

               (l) The Company or any Company Subsidiary shall purport to
          disavow its obligations hereunder or shall contest the validity or
          enforceability hereof; or the Bank's security interest in any portion
          of the Collateral shall become unenforceable or otherwise impaired; or

               (m) An event of default shall occur under the terms of any note,
          instrument or agreement evidencing, securing or related to any other
          indebtedness, whether now existing or hereafter arising, of any other
          Subsidiary, whether now existing or hereafter created, to Bank,
          including, without limitation, any now existing or hereafter arising
          indebtedness of Tribeca Lending Corporation to Bank if the effect of
          such default is to cause, or to permit the Bank to cause, indebtedness
          of such other Subsidiary to become or be declared due prior to its
          stated maturity; provided that Bank shall have give the Company notice
          of such default and such default shall have continued unremedied for
          at least 5 Business Days.

               Section 8.2. Remedies Relating to Events of Default. (a) Upon the
          occurrence of any Event of Default described in Sections 8.1(f) or (g)
          the unpaid principal amount of and accrued interest on any obligation
          owed by the Company hereunder to the Bank, and the unpaid principal
          amount of and accrued interest on any and all outstanding Notes from
          each Company Subsidiary and any other sums otherwise due from the
          Company Subsidiaries hereunder shall automatically become due and
          payable, without presentment, demand or other requirements of any
          kind, all of which are hereby expressly waived by the Company and each
          Company Subsidiary, and the obligation of the Bank to make Company
          Subsidiary Loans or Advances there-under shall thereupon terminate.

               (b) Upon the occurrence of any Event of Default other than those
          described in Sections 8.1(f) or (g), the Bank may, by written notice
          to the Company declare all or any portion of any obligation owed by
          the Company to the Bank, and all or any portion of the unpaid
          principal amount of and accrued interest on any one or more or all
          outstanding Notes from any one or more of the Company Subsidiaries and
          any other sums otherwise due from the Company Subsidiaries hereunder
          to be due and payable whereupon the same shall forthwith become due
          and payable, together with all accrued interest thereon, and the
          obligation of the Bank to make Company Subsidiary Loans or advances
          there-under shall thereupon terminate.

                                       38
<PAGE>

               (c) Upon the occurrence of any Event of Default, the Bank may
          also do any one or more or all of the following with respect to any
          Collateral, whether individual items of Collateral relate directly to
          a particular Company Subsidiary Loan to a Company Subsidiary, or to a
          now existing or hereafter granted Company Subsidiary Loan, or
          otherwise:

               i) Foreclose upon or otherwise enforce its security interest in
          and Lien on all of the Collateral or on any portion thereof to secure
          all payments and performance of obligations owed by the Company or by
          any Company Subsidiary under this Agreement or by any Company
          Subsidiary under any Note.

               (ii) Notify all obligors of Collateral, or on any portion
          thereof, that the Collateral has been assigned to the Bank and that
          all payments thereon are to be made directly to the Bank, or to such
          other party as may be designated by the Bank; settle, compromise, or
          release, in whole or in part, any amounts owing on the Collateral by
          any such obligor or Investor, or any portion of the Collateral, on
          terms acceptable to the Bank; enforce payment and prosecute any action
          or proceeding with respect to any and all Collateral; and where any
          such Collateral is in default, foreclose on and enforce security
          interests in, such Collateral by any available judicial procedure or,
          if permitted by applicable law, without judicial process and sell
          property acquired as a result of any such foreclosure.

               (iii) Act, or contract with a third party to act, as servicer of
          all or any item of Collateral requiring servicing and perform all
          obligations required in connection with Purchase Commitments, such
          third party's fees to be paid by the Company.

               (iv) Exercise all rights and remedies of a secured creditor under
          the Uniform Commercial Code of the State of New York or the state in
          which the Collateral is located, including but not limited to selling
          the collateral at public or private sale. The Bank shall give the
          Company not less than sixty (60) days' notice of any such public sale
          or of the date after which private sale may be held. The Company
          agrees that sixty (60) days' notice shall be reasonable notice. At any
          such sale the Collateral may be sold as an entirety or in separate
          parts, as the Bank may determine. The Bank may, without notice or
          publication, adjourn any public or private sale or cause the same to
          be adjourned from time to time by announcement at the time and place
          fixed for the sale, and such sale may be made at any time or place to
          which the same may be so adjourned. In case of any sale of all or any
          part of the Collateral on credit or for future delivery, the
          Collateral so sold may be retained by the Bank until the selling price
          is paid by the purchaser thereof, but the Bank shall not incur any
          liability in case of the failure of such purchaser to take up and pay
          for the Collateral so sold and, in case of any such failure, such
          Collateral may again be sold upon like notice. The Bank may, however,
          instead of exercising the power of sale herein conferred upon it,
          proceed by a suit or suits at law or in equity to collect all amounts
          due upon all or any portion of the Collateral or to foreclose the
          pledge and sell all or any portion of the Collateral under a judgment
          or decree of a court or courts of competent jurisdiction, or both.

               (v) Proceed against the Company on any obligation owed by the
          Company to the Bank or proceed against any one or more Company
          Subsidiary under the Notes.

                                       39
<PAGE>

               (vi) Pursue any rights and/or remedies available at law or in
          equity against the Company and/or the Company Subsidiaries.

               (d) Notwithstanding anything herein to the contrary, upon any
          sale or other disposition of the Collateral, all proceeds of such sale
          or disposition will be applied among each Mortgage Pool and the
          related Company Subsidiary Loans in accordance with Section 2.5(a).

               (e) [Reserved]

               (f) The Bank may, but shall not be obligated to, advance any sums
          or do any act or thing necessary to uphold and enforce the Lien and
          priority of, or the security intended to be afforded by, any Pledged
          Mortgage Loan, including, without limitation, payment of delinquent
          taxes or assessments and insurance premiums. All advances, charges,
          costs and expenses, including reasonable attorneys' fees and
          disbursements, incurred or paid by the Bank in exercising any right,
          power or remedy conferred by this Agreement, or in the enforcement
          hereof, shall be paid by the Company or the Company Subsidiary, shall
          be secured by the Collateral, and until paid, shall bear interest from
          the date of expenditure at the rate of interest specified by the
          obligation due to the Bank.

               (g) No failure on the part of the Bank to exercise, and no delay
          in exercising, any right, power or remedy provided hereunder, at law
          or in equity shall operate as a waiver thereof; nor shall any single
          or partial exercise by the Bank of any right, power or remedy provided
          hereunder, at law or in equity preclude any other or further exercise
          thereof or the exercise of any other right, power or remedy. The
          remedies herein provided are cumulative and are not exclusive of any
          remedies provided at law or in equity.

               (h) Notice to the Company for purposes of this Section 8.2 shall
          be deemed to be notice to each and every Company Subsidiary that
          becomes, now or hereafter, a party to this Agreement.

               Section 8.3. Application of Proceeds. Unless otherwise required
          by applicable law, the proceeds of any sale or other enforcement of
          the Bank's security interest in all or any part of the Collateral
          shall be applied by the Bank in such order of priority as the Bank may
          determine at its sole discretion, including, without limitation, the
          following:

               (a) To the payment of the costs and expenses of such sale or
          enforcement, including reasonable compensation to the Bank's agents
          and counsel, and all expenses, liabilities and advances made or
          incurred by or on behalf of the Bank in connection therewith;

               (b) To the payment of any other amounts due under any one or more
          of the Notes (whether for principal or interest or otherwise), in such
          order and manner as the Bank elects;

               (c) To the payment of any other amounts due by the Company or by
          any one or more of the Company Subsidiaries under this Agreement, in
          such order and manner as the Bank elects;

          If the Proceeds of any such sale are insufficient to cover the costs
          and expenses of such sale, as aforesaid, and the payment in full of
          the Note(s), of all amounts due under this Agreement, and all other
          amounts due thereunder or hereunder, the Company Subsidiary(ies)
          and/or the Company, as appropriate, shall remain liable for any
          deficiency.

                                       40
<PAGE>

          Notwithstanding anything herein to the contrary, upon any sale or
          other disposition of the Collateral, all proceeds of such sale or
          disposition will be applied among each Mortgage Pool and the related
          Company Subsidiary Loans in accordance with Section 2.5(a).

          Section 8.4. Bank Appointed Attorney-in-Fact. The Bank is hereby
          appointed the attorney-in-fact of the Company, and of each Company
          Subsidiary which becomes a party to this Agreement, after the
          occurrence and during the continuance of an Event of Default
          hereunder, with full power of substitution, for the purpose of
          carrying out the provisions hereof, and of the Company Subsidiary
          Loans and Notes of parties hereto, and taking any action and executing
          any instruments which the Bank may deem necessary or advisable to
          accomplish the purposes hereof or thereof, after the occurrence and
          during the continuance of an Event of Default hereunder, which
          appointment as attorney-in-fact is irrevocable and coupled with an
          interest. Without limiting the generality of the foregoing, the Bank
          shall have the right and power to give notices of its security
          interest in the Collateral to any Person, either in the name of the
          Company, in the name of the Company Subsidiary, or in its own name,
          after the occurrence and during the continuance of an Event of Default
          hereunder to endorse all Pledged Mortgage Loans payable to the order
          of the Company or the Company Subsidiary, or, after the occurrence and
          during the continuance of an Event of Default hereunder, to receive,
          endorse and collect all checks made payable to the order of the
          Company or the Company Subsidiary, representing any payment on account
          of the principal of or interest on, or the proceeds of sale of, any of
          the Pledged Mortgage Loans and to give full discharge for the same and
          execute any and all instruments in writing whatever kind and nature,
          if they be necessary, and be necessary and deemed proper by Bank to
          effectively assure its appropriate lien position in the Collateral and
          in the Pledged Mortgage Loans.

          Section 8.5. Right of Set-off. If the Company Subsidiary or the
          Company shall default in the payment of the Note or this Agreement,
          any interest accrued thereon, or any other sums which may become
          payable hereunder or thereunder when due, or in the performance of any
          of its or their other obligations or liabilities thereunder or
          hereunder, the Bank shall have the right, at any time and from time to
          time, without notice, to set-off and to appropriate or apply any and
          all deposits of money or property or any other indebtedness at any
          time held or owing by the Bank or a parent company, affiliate, or
          subsidiary to or for the credit of the account of the Company or the
          Company Subsidiary against and on account of the obligations and
          liabilities of the Company or the Company Subsidiary under this
          Agreement, or under the Note or this Agreement, irrespective of
          whether or not the Bank shall have made any demand thereunder or
          hereunder and whether or not said obligations and liabilities shall
          have matured, provided, however, that the aforesaid right of set-off
          shall not apply to any deposits of escrow monies or other funds being
          held on behalf of the mortgagors under Mortgage Loans or other third
          parties.

          Section 8.6. Reasonable Assurances. If, at any time during the term of
          the Agreement, the Bank has reasonably and in good faith believe that
          the Company or the Company Subsidiary is not conducting its business
          in accordance with, or otherwise is not satisfying in all material
          respects: (a) all applicable statutes, regulations, rules, and notices
          of federal, state, or local governmental agencies or
          instrumentalities, or (b) all applicable requirements of Bank, as set
          forth in this Agreement, the or the Note, then, Bank shall have the
          right to demand, pursuant to written notice from Bank to the Company
          or to the Company Subsidiary as appropriate, specifying with
          particularity, the alleged act, error or omission in question,
          reasonable assurances from Company or the Company Subsidiary that such
          a belief is in fact unfounded.

                                       41
<PAGE>

                                   Article IX

                      Reimbursement of Expenses; Indemnity

         The Company or the Company Subsidiary, as appropriate, shall:

               Section 9.1. Cost of Enforcement. Pay all costs and expenses of
          the Bank, including reasonable attorney's fees, in connection with the
          enforcement of this Agreement, the Note, the and other documents and
          instruments related hereto and thereto.

               Section 9.2. Payments of Taxes. Pay, and hold the Bank and any
          holder of the Note harmless from and against, any, and all, present
          and future stamp, documentary and other similar taxes with respect to
          the foregoing matters and save the Bank and the holder or holders of
          the Note harmless from and against any and all liabilities with
          respect to or resulting from any delay or omission to pay such taxes.

               Section 9.3. Indemnification. Indemnify, pay and hold harmless
          the Bank and any of its officers, directors, employees or agents and
          any subsequent holder of the Note from and against any and all
          liabilities, obligations, losses, damages, penalties, judgments,
          suits, costs, expenses and disbursements of any kind whatsoever (the
          "Indemnified Liabilities") (excluding any such Indemnified Liabilities
          resulting from failure by the Bank to perform any of its obligations
          under this Agreement, or any Note, or any other document referred to
          herein or therein as established in a suit between the Company and/or
          the Company Subsidiary and the Bank which may be the same suit in
          which indemnification is being sought hereunder by the Bank and any
          liabilities arising from the Bank's negligence, gross negligence, or
          willful misconduct) which may be imposed upon, incurred by or asserted
          against the Bank or such holder in any way relating to or arising out
          of this Agreement, any Note, or any other document referred to herein
          or therein or any of the transactions contemplated hereby or thereby
          to the extent that any such Indemnified Liabilities result (directly
          or indirectly) from (a) the inaccuracy or incompleteness of any
          representation or warranty made by the Company or by the Company
          Subsidiary in this Agreement, or in any schedule, statement, exhibit
          or certificate furnished by the Company pursuant to this Agreement, or
          any Note, or (b) the failure by the Company or by any Company
          Subsidiary to observe or perform any term or provision of this
          Agreement, or of any agreement executed in connection herewith, or any
          Note, including without limitation any claims made, or any actions,
          suits or proceedings commenced or threatened, by or on behalf of any
          creditor (excluding the Bank and the holder or holders of the Note),
          security holder, shareholder, mortgagor, customer (including, without
          limitation, any person or entity having any dealings of any kind with
          the Company or the Company Subsidiary), trustee, director, officer,
          employee and/or agent of the Company or the Company Subsidiary acting
          in such capacity, the Company, the Company Subsidiary, or any
          governmental regulatory body or authority.

                                       42
<PAGE>

                                    Article X

             Administrative Services; Payment Processing; Servicing

               Section 10.1. Administrative Services Agreement. (a) Within a
          reasonable period of time following the execution of the Agreement,
          the Company and the Company Subsidiary shall enter into, and shall
          maintain in effect, an administrative services agreement (the
          "Administrative Services Agreement") reasonably acceptable to the
          Bank, which covers the provision by the Company of any and all
          administrative services necessary or helpful for the Company
          Subsidiary to operate its business and for the payment by the Company
          Subsidiary to the Company of reasonable compensation for those
          services. Those services shall include, without limitation, the
          handling of such matters as: closing of purchases of Mortgage Loans;
          safe-keeping and administration of Mortgage Loan Documents; processing
          of and record-keeping for Mortgage Loan payments; insurance;
          government reporting; Mortgage Loan administration and collection; and
          compliance with this Agreement.

               (b) In the event that the terms of the Administrative Security
          Agreement should conflict with the terms of this Agreement or with the
          terms of the Lock-box Agreement, the terms of this Agreement or of the
          Lock-box Agreement shall prevail.

               (c) The Company is the servicer of the Pledged Mortgage Loans
          pursuant to a servicing agreement between the Company and each Company
          Subsidiary. Upon an Event of Default, (i) Bank shall have the right to
          terminate the servicing agreement and transfer servicing to its
          designee, (ii) the Company will servicer the Pledged Mortgage Loans
          for the benefit of the Bank as if the Bank was the owner of the
          Pledged Mortgage Loans until such time as the Bank terminates the
          servicing agreement, (ii) the Company will cooperate with the Bank to
          effect a transfer of the servicing of the Pledged Mortgage Loans in
          connection with the Bank's termination of the servicing agreement.

               (d) The Company covenants to maintain or cause the servicing of
          the Pledged Mortgage Loans to be maintained in conformity with
          reasonable and customary servicing practices in the industry for the
          same type of mortgage loans as the Pledged Mortgage Loans and in a
          manner at least equal in quality to the servicing the Company 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 or (ii) the date on which
          this Agreement terminates.

                                       43
<PAGE>

                                   Article XI

                                  Miscellaneous

               Section 11.1. Relationships of Parties. The relationship between
          the Bank each Company Subsidiary which becomes a party to this
          Agreement is limited to that of creditor/secured party, on the one
          hand, and borrower, on the other hand. The relationship between the
          Bank and the Company is limited to that of creditor/secured party, on
          the one hand, and contract obligor and parent of Company Subsidiaries,
          on the other hand. The provisions herein for compliance with financial
          covenants and delivery of financial statements are intended solely for
          the benefit of the Bank to protect its interests as lender in assuring
          performance of the obligations hereunder and thereunder, and nothing
          contained herein or therein shall be construed as permitting or
          obligating Bank to act as a financial or business advisor or
          consultant to the Company or a Company Subsidiary, as permitting or
          obligating the Bank to control the Company or a Company Subsidiary, or
          to conduct the Company's or to a Company Subsidiary's operations, as
          creating any joint venture, agency, fiduciary, trustee, or other
          relationship among the parties other than as explicitly and
          specifically stated herein. The Company and the Company Subsidiary
          acknowledge that they have had the opportunity to obtain the advice of
          experienced counsel of their own choosing in connection with the
          negotiation and execution of this Agreement and to obtain the advice
          of such counsel with respect to all matters contained herein. The
          Company and the Company Subsidiary further acknowledge that they are
          experienced with respect to financial and credit matters and has made
          their own independent decisions to execute and deliver this Agreement.

               Section 11.2. Recourse. The Company and each Company Subsidiary
          each acknowledge and agree that they are each fully liable for
          repayment of all Advances made to them, and/or all sums due by them
          hereunder, or under the Note and for performance of all obligations
          contained in this Agreement and in the Note. Furthermore, the Company
          and each Company Subsidiary jointly and severally acknowledge and
          agree that the Advances hereunder are made, were made and will be made
          by the Bank, in addition to other requirements set forth herein, based
          upon the condition precedent, and in consideration of (in addition to
          any other consideration), the granting of the security interest in the
          Collateral by the Company and each Company Subsidiary to jointly and
          severally secure the repayment of all Advances, now existing or
          hereafter granted by Bank, to all Company Subsidiaries. Each Company
          Subsidiary and the Company unconditionally and irrevocably waives
          until the payment in full of the Advances and all other sums due
          hereunder or under any Note the following:

               (i) Any defense, counterclaim, claim or right to bring any third
          party actions in any proceedings or action brought by Bank to enforce
          its rights under this Agreement against any one or more of the Company
          or Company Subsidiary based on joinder of any other Company Subsidiary
          and/or the Company, contribution, subrogation, reimbursement or any
          other legal or equitable claims involving the liability of any Company
          Subsidiary or the Company to another;

               (ii) Any claim based on marshalling of assets; and

               (iii) Any benefits or rights under Section 105 or any other
          provisions of the U.S. Bankruptcy Code to invoke the automatic stay
          resulting from the bankruptcy of any other Company Subsidiary or the
          Company.

               Section 11.3. Notices. All notices, demands, consents, requests
          and other communications required or, permitted to be given or made
          hereunder (collectively, "Notices") shall, except as otherwise
          expressly provided hereunder, be in writing and shall be delivered in
          person or telegraphed or mailed, first class, return receipt
          requested, postage prepaid, or by overnight delivery service or by
          telecopy or other telecommunications device addressed to the
          respective parties hereto at their respective addresses hereinafter
          set forth or, as to any such party, at such other address as may be
          designated by it in a Notice to the other. All Notices shall be
          conclusively deemed to have been properly given or made when duly
          delivered, in person or by overnight delivery service or by telecopy
          or other telecommunications device, or if mailed on the third Business
          Day after being deposited in the mails or when delivered to the
          telegraph company, addressed as follows:

                                       44
<PAGE>

               If to the Company or to any Company Subsidiary:

                  Franklin Credit Management Corporation
                  Six Harrison Street
                  New York, New York 10013
                  Attn: John M. Collins
                        General Counsel
                  Facsimile No.: 212.925.1971

         If to the Bank:

                  Sky Bank
                  110 East Main Street
                  Salineville, Ohio 43945
                  Attn:  Mr. Jerry S. Sutherin
                         Vice President
                  Facsimile No.:  330.679.0028

         With a Copy To:

                  Sky Bank
                  2221 South Church Street
                  Bowling Green, Ohio 43402
                  Attention: W. Granger Souder, Jr., General Counsel
                  Facsimile Number: (419) 254-6345

               Section 11.4. Terms Binding Upon Successors; Survival. The terms
          and provisions of this Agreement shall be binding upon and inure to
          the benefit of the parties hereto and their respective successors and
          permitted assigns. All representations, warranties, covenants and
          agreements herein contained on the part of the Company or of any
          Company Subsidiary that becomes a party to this Agreement shall
          survive the making of any Company Subsidiary Loan and the execution of
          any Note, and shall be effective so long as the Commitment is
          outstanding or there remains any obligation of the Company hereunder,
          or any obligation of a Company Subsidiary under the Note to be paid or
          under this Agreement to be performed. All representations, warranties,
          covenants, and agreements contained in the Note and in this Agreement
          on the part of a Company Subsidiary shall survive the making of an
          Advance under the Company Subsidiary Loan and the execution of the
          Note and this Agreement, and shall be effective so long as the Company
          Subsidiary Loan is outstanding or there remains any obligations of the
          Company Subsidiary under the Note to be paid or under this Agreement
          to be performed.

               Section 11.5. Assignment. This Agreement may not be assigned by
          the Company or by the Company Subsidiary. This Agreement, the Note,
          along with the Bank's security interest in any or all of the
          Collateral, may be transferred or assigned, in whole or in part, by
          the Bank in its sole discretion and any such transferee or assignee
          thereof may enforce this Agreement, the Note, and such security
          interest.

                                       45
<PAGE>

               Section 11.6. Amendments. This Agreement may not be modified or
          amended or waived unless such modification, waiver or amendment is in
          writing signed by the Bank and the Company. All such written
          amendments, modifications and extensions to this Agreement, the
          Custodial Agreement, and any other agreements related hereto executed
          by the Company shall be binding upon each Company Subsidiary that now
          or hereafter becomes a party to this Agreement to the same extent as
          if such amendment, modification or extension had been executed by each
          such Company Subsidiary, and each such Company Subsidiary shall
          thereafter be bound by any such amendments, modifications and
          extensions.

               Section 11.7. No Waiver; Remedies Cumulative. No failure or delay
          on the part of the Company, the Company Subsidiary, or the Bank or any
          holder of the Note in exercising any right, power or privilege
          hereunder, or under the Note, and no course of dealing between or
          among the Company, the Company Subsidiary, and the Bank or the holder
          of the Note, shall operate as a waiver thereof; nor shall any single
          or partial exercise of any right, power or privilege hereunder or
          there-under preclude any other or further exercise thereof or the
          exercise of any other right, power or privilege hereunder or
          there-under. The rights and remedies herein and therein expressly
          provided are cumulative and not exclusive of any rights or remedies
          which the Company, the Company Subsidiary, or the Bank or the holder
          of the Note would otherwise have. No notice to or demand on the
          Company or the Company Subsidiary in any case shall entitle the
          Company or the Company Subsidiary to any other or further notice or
          demand in similar or other circumstances or constitute a waiver of the
          rights of the Bank or the holder of the Note to any other or further
          action in any circumstances without notice or demand.

               Section 11.8. Invalidity. In case any one or more of the
          provisions contained in this Agreement, the Note, or in any other
          agreement or instrument related hereto shall for any reason be held to
          be invalid, illegal, or unenforceable in any respect, such invalidity,
          illegality or unenforceability shall not affect any other provisions
          hereof or thereof, and this Agreement, the Note, and such other
          instruments or agreements shall be construed as if such invalid,
          illegal or unenforceable provision had not been included.

               Section 11.9. Participations. The Bank may from time to time sell
          or otherwise grant participations in the Note, and the holder of any
          such participation, if the participation agreement so provides,
          (a) shall, with respect to its participation, be entitled to all of
          the rights of the Bank, and (b) may exercise any and all rights of
          setoff or banker's lien with respect thereto, in each case as fully as
          though the Company or the Company Subsidiary were directly indebted to
          the holder of such participation in the amount of such participation;
          provided, however, that the Company or the Company Subsidiary shall
          not be required to send or deliver to any of the participants other
          than the Bank any of the materials or notices required to be sent or
          delivered by it under the terms of this Agreement, nor shall it have
          to act except in compliance with the instructions of the Bank.

               Section 11.10. Integration. This Agreement, together with the
          Note and other documents executed pursuant to the terms hereof and
          thereof, constitute the entire agreement between or among the parties
          hereto, with respect to the subject matter hereof and thereof.

                                       46
<PAGE>

               Section 11.11. Additional Instruments, etc. The Company and the
          Company Subsidiary shall execute and deliver such further instruments,
          and shall do and perform all matters and things necessary or expedient
          to be done or observed, for the purpose of effectively creating,
          maintaining and preserving the security and benefits intended to be
          afforded by this Agreement.

               Section 11.12. Governing Law. This Agreement and the rights and
          obligations of the parties hereunder, under the Note and under other
          documents executed pursuant to the terms hereof and thereof shall be
          construed in accordance with and governed by the laws of the State of
          Ohio.

               Section 11.13. Company and Company Subsidiary Information. The
          Company and the Company Subsidiary hereby authorize the Bank to
          provide any Affiliate of the Bank with information regarding them,
          including copies of documents, financial statements, corporate records
          and reports, obtained by the Bank from them or any other entity during
          the course of the negotiation or administration of this Agreement.

          Section 11.14. Counterparts; Execution by Company Subsidiaries.

               (a) This Agreement may initially be executed in one or one
          counterparts by the Bank, the Company, and the Company Subsidiaries in
          existence as of the date hereof on separate counterpart signature
          pages, each of which when so executed and delivered shall be an
          original, but all of which together shall constitute one and the same
          instrument.

               (b) Each Company Subsidiary which receives a Company Subsidiary
          Loan under this Agreement after the date hereof shall become a party
          to this Agreement and shall execute a counterpart signature page
          substantially in the form Exhibit E hereto. Each such Company
          Subsidiary shall be deemed to become a party hereto no later than the
          receipt of its first Advance regardless of when or if it signs a
          counterpart signature page hereto. The Company shall cause each such
          Company Subsidiary to become a party to this Agreement by executing a
          counterpart signature page as required by this Section.

               (c) Each Subsidiary of the Company, except for Tribeca Lending
          Corporation, which has received an Advance from the Bank for the
          purpose of funding or financing the purchase of Mortgage Loans, any
          part of the principal of which is still outstanding, or any collateral
          for which is still in effect as of the date of this Agreement, shall
          be treated as a Company Subsidiary hereunder, shall become a party
          hereto, and shall execute a counterpart signature page substantially
          in the form of Exhibit E. Each such Company Subsidiary shall be deemed
          to become a party hereto as of the date hereof regardless of when or
          if it signs a counterpart signature page hereto. The Company shall
          cause each such Company Subsidiary to become a party to this Agreement
          by executing a counterpart signature page as required by this Section.
          In the event that the terms of this Agreement shall conflict with the
          terms of the loan documentation for such loan to such a Subsidiary of
          the Company, the terms of this Agreement shall prevail, except for
          interest rate terms which shall not be affected by the terms of this
          Agreement, and except that any default under any such loan, which has
          not been cured or waived, shall remain in effect.

                [ Signatures are located on the following page.]

                                       47
<PAGE>

          In Witness Whereof, the parties have caused this Agreement to be duly
          executed as of the date first above written.

                             Company:
                             Franklin Credit Management Corporation

                             By  /s/ Alan Joseph
                                 -------------------------
                                 Printed Name: Alan Joseph
                                 Title: CFO

                             Bank:
                             Sky Bank

                             By  /s/ Jerry Sutherin
                                 ------------------
                                 Jerry S. Sutherin
                                 Vice President

                                       48
<PAGE>

                                    Exhibit A

                                 PROMISSORY NOTE

$________________                                           New York, New York

                                                          ___________, 20_____

          FOR VALUE RECEIVED, ____________________________ (the "Borrower"),
          hereby unconditionally promises to pay to the order of Sky Bank (the
          "Bank"), at P.O. Box 159, 10 East Main Street, Salineville, Ohio
          43945, the sum of ______________________________________ AND ____/100
          DOLLARS ($_____________), together with an initial interest rate of
          __________% per annum. The interest rate will be adjusted monthly on
          the first day of each month, based upon the following Index: Federal
          Home Loan Bank of Cincinnati 30 day advance rate, plus __________
          basis points.
          This Note shall be for a term of Thirty Six (36) months, amortized
          over a term of Two Hundred Forty (240) months. Beginning
          __________________, 20______, there shall be monthly principal
          payments of ___________________________________________________AND
          _____/100 DOLLARS ($________________), plus interest as billed monthly
          until maturity.

          The interest rate charged herein shall be adjusted monthly as changes
          in the above-referenced index occur. The Federal Home Loan Bank of
          Cincinnati 30 day advance rate shall mean the highest rate of interest
          as published daily by Bloomberg under the symbol FHL5LBR1.

          Amounts payable on this Note are payable in lawful money of the United
          States of America in good and immediately available funds at the
          offices of the Bank, or at such other address as the holder of the
          Note may designate in writing.

          If this Note or any installment hereof becomes due and payable on a
          Saturday, Sunday or public holiday under the laws of the State of
          Ohio, the due date thereof shall be extended to the next succeeding
          full Business Day.

          This Note is a Note referred to in and is subject to the term,
          conditions and covenants of, and is secured by certain collateral as
          more fully described and provided in, a certain Master Credit and
          Security Agreement, dated as of October 13, 2004, among the Bank,
          Franklin Credit Management Corporation, and other subsidiaries of
          Franklin Credit Management Corporation, and to which Borrower has
          become a party to on or about even date herewith, (the "Loan
          Agreement"), including, without limitation, being subject to mandatory
          payment in whole or in part as provided in the Loan Agreement, and
          Borrower acknowledges receiving a copy of and becoming a party to said
          Loan Agreement), provided, however, reference to the Loan Agreement
          and to the collateral does not affect or impair the absolute and
          unconditional obligation of the Borrower to pay the principal of and
          interest on this Note when due.

          Upon the occurrence of any one or more of the Events of Default
          specified in the Loan Agreement, all amounts then remaining unpaid on
          this Note may be declared to be immediately due and payable as
          provided in the Loan Agreement.

                                       49
<PAGE>

Promissory Note
Page 2
_________________, 20______

          Prepayment of this Loan is subject to the terms as more fully outlined
          in the Loan Agreement referred to above.

          This Note shall be construed in accordance with and governed by the
          laws of the State of Ohio without giving effect to the principles
          thereof relating to the conflict of laws. For any dispute arising
          under this Note or in connection herewith, the Borrower hereby
          irrevocably submits to, consents to, and waives any objection to, the
          jurisdiction of the courts of the State of Ohio or the United States
          Courts for the Northern District of Ohio. Trial by jury is waived by
          the Borrower for collection hereof.

          In the event that any one or more of the provisions of this Note shall
          for any reason be held to be invalid, illegal or unenforceable, in
          whole or in part, or in any respect, or in the event that any one or
          more of the provisions of this Note shall operate, or would
          prospectively operate, to invalidate this Note, then, and in any such
          event, such provision or provisions only shall be deemed to be null
          and void and of no force or effect and shall not affect any other
          provision of this Note, and the remaining provisions of this Note
          shall remain operative and in full force and effect and shall in no
          way be affected, prejudiced or disturbed thereby.

          It is the intention of the parties hereto to comply strictly with the
          usury laws of the State of Ohio and applicable Federal law; therefore,
          it is agreed that notwithstanding any provision to the contrary in
          this Note, no such provision shall require the payment or permit the
          collection of interest in excess of the maximum amount permitted by
          law.

                                              -------------------------------

By:

                                               Its: _________________________

                                       50
<PAGE>

                                   SCHEDULE I
      Schedule of All Existing Company Subsidiary Loans and Success Fee Due

                                       51
<PAGE>

{                                     Exhibit B

                      Company Subsidiary Loan Request Form

                                                                          [Date]
Sky Bank
110 East Main Street
Salineville, Ohio 43945
Attn: Mr. Jerry S. Sutherin
      Vice President

Ladies/Gentlemen:

          This letter is a request for you to make an Advance to us in respect
          of the Mortgage Loans listed in Appendix I hereto, pursuant to the
          Master Credit And Security Agreement (the "Agreement") is entered into
          as of October 13, 2004, between Franklin Credit Management Corporation
          (the "Company") and Sky Bank (the "Bank")and each Company subsidiary
          that is a party thereto as follows:

         Company Subsidiary:

         Requested funding date:

         Mortgage Loans requested to be funded in respect of such Advance:
         See Appendix I hereto.

         [Appendix I to Transaction Request Letter will list Mortgage Loans]

         Requested Advance Amount:

         Requested Mortgage Pool:

         Requested Required Subsidiary LTV:

         Anticipated, adjusted Required Pool LTV:

          All capitalized terms used herein shall have the meaning assigned
          thereto in the Agreement.

                                               [COMPANY SUBSIDIARY]

                                      By: _____________________________
                                      Name:
                                      Title:

                                       52
<PAGE>

                                    Exhibit C

                      Product Standards For Mortgage Loans

                                       53
<PAGE>

                                    Exhibit D

                              Collateral Documents

               With respect to each Pledged Mortgage Loan, the Collateral
          Documents shall include each of the following items, which shall be
          available for inspection by the Bank and which shall be delivered to
          the Custodian pursuant to Section 4.1(a) of the Master Credit and
          Security Agreement to which this Exhibit is attached (the
          "Agreement"):

               (a)______the original Mortgage Note bearing all intervening
          endorsements evidencing a complete chain of assignment from the
          originator to the last endorsee, endorsed "Pay to the order of
          _________, without recourse" and signed in the name of the last
          endorsee by an authorized officer. To the extent that there is no room
          on the face of the Mortgage Notes for endorsements, the endorsement
          may be contained on an allonge, if state law so allows and the
          Custodian is so advised by the Company Subsidiary that state law so
          allows;

               (b)______the  original of any  guarantee  executed in  connection
          with the Mortgage Note;

               (c)______the original Mortgage with evidence of recording
          thereon. If in connection with any Mortgage Loan, the Company
          Subsidiary cannot deliver or cause to be delivered the original
          Mortgage with evidence of recording thereon on or prior to the Closing
          Date because of a delay caused by the public recording office where
          such Mortgage has been delivered for recordation or because such
          Mortgage has been lost or because such public recording office retains
          the original recorded Mortgage, the Company Subsidiary shall deliver
          or cause to be delivered to the Custodian, a photocopy of such
          Mortgage, together with (i) in the case of a delay caused by the
          public recording office, an officer's certificate of the Company
          Subsidiary stating that such Mortgage has been dispatched to the
          appropriate public recording office for recordation and that the
          original recorded Mortgage or a copy of such Mortgage certified by
          such public recording office to be a true and complete copy of the
          original recorded Mortgage will be promptly delivered to the Custodian
          upon receipt thereof by the Company Subsidiary; or (ii) in the case of
          a Mortgage where a public recording office retains the original
          recorded Mortgage or in the case where a Mortgage is lost after
          recordation in a public recording office, a copy of such Mortgage
          certified by such public recording office to be a true and complete
          copy of the original recorded Mortgage;

               (d)______the originals of all assumption, modification,
          consolidation or extension agreements, if any, with evidence of
          recording thereon;

               (e)______the original assignment of Mortgage for each Mortgage
          Loan, in form and substance acceptable for recording. The assignment
          of Mortgage shall be delivered in blank;

               (f)______the originals of all intervening assignments of
          mortgage, evidencing a complete chain of assignment from the
          originator to the last endorsee, with evidence of recording thereon,
          or if any such intervening assignment has not been returned from the
          applicable recording office or has been lost or if such public
          recording office retains the original recorded assignments of
          mortgage, the Company Subsidiary shall deliver or cause to be
          delivered to the Custodian, a photocopy of such intervening
          assignment, together with (i) in the case of a delay caused by the
          public recording office, an officers certificate of the Company
          Subsidiary stating that such intervening assignment of mortgage has
          been dispatched to the appropriate public recording office for
          recordation and that such original recorded intervening assignment of
          mortgage or a copy of such intervening assignment of mortgage
          certified by the appropriate public recording office to be a true and
          complete copy of the original recorded intervening assignment of
          mortgage will be promptly delivered to the Custodian upon receipt
          thereof by the Company Subsidiary; or (ii) in the case of an
          intervening assignment where a public recording office retains the
          original recorded intervening assignment or in the case where an
          intervening assignment is lost after recordation in a public recording
          office, a copy of such intervening assignment certified by such public
          recording office to be a true and complete copy of the original
          recorded intervening assignment;

               (g)______the original mortgagee policy of title insurance or, in
          the event such original title policy is unavailable, a certified true
          copy of the related policy binder or commitment for title certified to
          be true and complete by the title insurance company; and

               (h)______security agreement, chattel mortgage or equivalent
          document executed in connection with the Mortgage, if any.

               From time to time, the Company subsidiary shall cause to be
          forwarded to the Custodian additional original documents, additional
          documents evidencing an assumption, modification, consolidation or
          extension of a Mortgage Loan. All such mortgage documents held by the
          Custodian as to each Mortgage Loan shall constitute the "Collateral
          Documents"

                                       54
<PAGE>

                                    Exhibit E

                         Counterpart Signature Page Form

                           Counterpart Signature Page

                                       for

                      Master Credit and Security Agreement

                                     between

    Sky Bank and Franklin Credit Management Corporation and its Subsidiaries

               The undersigned subsidiary of Franklin Credit Management
          Corporation hereby agrees to be bound by the terms, conditions,
          covenants and provisions of the above-referenced Agreement to which
          this Counterpart Signature Page will be attached, including, without
          limitation, the granting of the security interest in Article III of
          the Agreement and the rights and remedies with respect thereto set
          forth in Article VIII. By signing below, the undersigned hereby
          executes and becomes a "Company Subsidiary" (as defined therein) party
          to the Agreement and grants such security interest. Such security
          interest covers, among the items of "Collateral" listed in Article
          III, the "Mortgage Loans" set forth on the Schedule attached to this
          Counterpart Signature Page.

                                              [name of Company Subsidiary here]

Date: __________________________               By:____________________________

                                                    Printed Name:
                                                    Title:

                                       55
<PAGE>

                                  SCHEDULE E-1

                   List Of Mortgage Loans Pledged to Bank By:

                          ----------------------------
                          (Name of Company Subsidiary)

                                       56

<PAGE>

                                    EXHIBIT F

                                 LOCK BOX TERMS

               A. Lockbox Service. The lockbox service (the "Service") will
          operate through a U.S. Postal Service box in the Company Subsidiary's
          name (the "Lockbox") and Company Subsidiary demand deposit accounts at
          Bank (the "Accounts") which are designated herein below, and which
          Accounts are subject to Bank's standard deposit account agreements.
          Company Subsidiary authorizes Bank and its employees, representatives
          or authorized agents to (i) pick up and transport from the Post Office
          mail addressed to the Lockbox, and (ii) open such mail and process its
          contents according to the Lockbox processing procedures which will be
          agreed to by Bank and the Company Subsidiary.

               B. Company Subsidiary's Obligations. Company Subsidiary agrees to
          provide Bank, its employees, representatives or authorized agents with
          unrestricted and exclusive access to the Lockbox. Company Subsidiary
          agrees to follow the recommendations and specifications outlined in
          the Processing Procedures relating, without limitation, to document
          specifications for the remittance documents to be submitted to the
          Lockbox. Insofar as the performance of Services under this Agreement
          by Bank requires data, documents, information or materials of any
          nature to be furnished by Company Subsidiary, or for personnel,
          Company Subsidiary hereby agrees to furnish all data, documents,
          information, and materials and to perform all such acts and to make
          appropriate personnel, records and facilities available to Bank,
          within such time and in such form or manner as may reasonably be
          necessary in order to enable Bank to perform the required Services
          promptly and in a workmanlike manner.

               C. Deposits. Bank will deposit all items which comply with the
          processing procedures agreed to by Bank and Customer for credit to
          Company Subsidiary's Account with Bank. Company Subsidiary authorizes
          Bank to endorse checks and other payment instruments received (the
          "Remittances") and to deposit such instruments in the Accounts. If any
          payee is a legal entity other than Company Subsidiary, Company
          Subsidiary represents and warrants to Bank that Company Subsidiary has
          the proper authorization from such payee to have such check endorsed
          for deposit, and deposited into the Account, and Company Subsidiary
          agrees to indemnify Bank against any losses, liabilities, damages,
          claims, demands, obligations, actions, suits, judgments, penalties,
          costs or expenses, including, but not limited to, attorneys' fees
          (collectively "Losses and Liabilities"), suffered or incurred by Bank
          as a result of, or in connection with, Company Subsidiary's failure to
          have such authorization. Further, the Bank may accept checks and other
          instruments for deposit to the Account without endorsement. Company
          Subsidiary represents and warrants to Bank that the endorsements of
          all items received through this Service are proper and valid and that
          Company Subsidiary has a right to receive such items for deposit to
          the Account. Company Subsidiary agrees to notify Bank no later than
          ten (10) calendar days after Company Subsidiary receives an advice of
          deposit, if there is any error in such advice, and no later than
          thirty (30) calendar days after Company Subsidiary receives a bank
          statement on the Account, if such statement contains an error or fails
          to show a deposit that should have been made during the time period
          covered by such statement.

               C. Account Documentation. Company Subsidiary understands that
          this Agreement covers Lockbox Services as described herein and does
          not cover the handling of the Accounts and the processing of checks
          drawn on the Account or the availability of the deposits made to the
          Accounts. The Accounts will be subject to, and Bank's operation of the
          Accounts will be in accordance with, the terms and provisions of
          Bank's deposit account agreements and the account rules and
          regulations governing the Accounts (collectively the "Account
          Agreements"), copies of which Company Subsidiary acknowledges having
          received, and shall be subject to the Master Credit Agreement to which
          this Lock Box Terms agreement is attached.

               D Reasonable Care. As to property of Company Subsidiary in Bank's
          possession Bank shall be liable only for the exercise of reasonable
          care in safekeeping the same and restricting access to authorized
          persons of information relating to Company Subsidiary's business or
          the business of any of Company Subsidiary's customers which may be
          received in the course of rendering the Service hereunder.

             E. Mail Collection. Bank shall collect the mail from the Lockbox in
          accordance with Bank's post office schedule, as such schedule may
          change from time to time.

               F. Limitation of Liability, Indemnity. The Bank will only be
          liable for damages arising from the Bank's intentional misconduct or
          gross negligence in the performance of this Service. The Bank will not
          be responsible for any loss, delay, costs or liability which arise,
          directly or indirectly, in whole or part, from, Company Subsidiary's
          actions or omissions, negligence or breach of any agreement with Bank;
          any ambiguity, inaccuracy or omission in any instruction or
          information provided to Bank; accidents, strikes, labor disputes,
          civil unrest, fire, flood, water damage (e.g., from fire suppression
          systems), or acts of God; or the actions of others or causes that are
          beyond Bank's reasonable control. The Bank will not be responsible
          under any circumstances for special, indirect, or consequential
          damages, which the Company Subsidiary incurs as a result of the Bank's
          actions or omissions, even if the Bank is aware of the possibility for
          such damage. Any claim, action or proceeding by the Company Subsidiary
          to enforce the terms of this Agreement or to recover for any
          Service-related loss or for any losses or liabilities, must be
          commenced within one year from the date that the event giving rise to
          the claim, action, or proceeding first occurs. The Company Subsidiary
          agrees to cooperate with the Bank in any loss recovery effort the Bank
          undertakes to reduce any loss or liability that arises in connection
          with the Bank's Services. Company Subsidiary agrees to indemnify,
          defend, hold Bank harmless from and against any claim, damage, loss,
          liability and cost (including, without limitation, attorneys' fees) of
          any kind whatsoever which results directly or indirectly, in whole or
          in part from: (a) Bank's actions or omissions, if they are in
          accordance with the Company Subsidiary's instructions or the terms of
          this Agreement; or (b) the actions or omissions of the Company
          Subsidiary, its agents or employees. This clause shall survive the
          termination of this Agreement.

          Account Information:

          Depository Account Number:
          Other:

          Any correspondence between the Company Subsidiary and the Bank
          concerning normal operations of the Payments Processing and Control
          service shall be addressed as follows:

          Account Name:

          Address:

          Primary Contact:                    Telephone:
                                              Fax:

          Special Instructions or Comments:

                                       57
<PAGE>

                                    Exhibit G
                 Required Subsidiary LTV and Required Pool LTV

                                       58<PAGE>

                                                                    Exhibit 10.5

          SECOND AMENDMENT TO WAREHOUSING CREDIT AND SECURITY AGREEMENT

      THIS SECOND AMENDMENT TO WAREHOUSING CREDIT AND SECURITY AGREEMENT (the
"Agreement") is made and entered into effective as of May 19, 2005, by and
between the undersigned TRIBECA LENDING CORPORATION, ("Borrower"), and SKY BANK
("Sky Bank", "Lender", or "Bank").

      WHEREAS, Bank originally granted a revolving warehousing line of credit
loan in the principal amount of THIRTY MILLION AND 00/100 DOLLARS
($30,000,000.00) to Borrower subject to and in accordance with a WAREHOUSING
CREDIT AND SECURITY AGREEMENT dated as of September 30, 2003 by and between
Borrower and Bank (the "Loan Agreement" and all capitalized terms herein having
the meaning ascribed to such term in the Loan Agreement unless otherwise defined
herein); and

      WHEREAS, Borrower and Bank subsequently agreed to (i) increase the maximum
amount of the Commitment from THIRTY MILLION AND 00/100 DOLLARS ($30,000,000.00)
to FORTY MILLION AND 00/100 DOLLARS ($40,000,000.00) (the "Loan" or the
"Commitment") and (ii) extend the original expiration date of the Commitment in
the AMENDED AND RESTATED FIRST AMENDMENT TO WAREHOUSING CREDIT AND SECURITY
AGREEMENT dated effective as of April 7, 2004 ("First Amendment"); and

      WHEREAS, the Loan is guaranteed by Franklin Credit Management Corporation;
and

      WHEREAS, the purpose of the Loan is to finance the funding or purchase of
originations of Mortgage Loans; and

      WHEREAS, Borrower has asked Bank to further extend the date of expiration
and termination of the Commitment up to and through July 31, 2005 and Bank, in
accordance with and subject to the terms, conditions and covenants and
representations and warranties contained herein, has agreed to said request.

      NOW THEREFORE, by mutual agreement of the parties and in mutual
consideration of the premises and for other good and valuable considerations,
the receipt and sufficiency of which is hereby mutually acknowledged, Borrower
and Bank agree as follows:

      1. Extension of Expiration and/or Termination of Commitment. The date of
expiration and/or termination of Commitment shall be extended up to and through
July 31, 2005 and all references in the Loan Agreement and First Amendment to an
expiration and/or termination of Commitment shall now be deemed to refer to the
date of expiration

<PAGE>

and or termination of Commitment up to and through July 31, 2005. All Advances
under the Commitment will continue to be subject to the terms, provisions,
conditions and covenants of the Loan Agreement.

      2. Conditions Precedent. The agreement of Bank to modify the Loan
Agreement as set forth herein shall become effective when, and only when, Bank
has received a counterpart of this Agreement duly executed by Borrower, and
each of the following conditions have been fully satisfied, including, without
limitation, that all related documents as required below have been executed (as
applicable) and/or delivered to Bank by the appropriate party or parties:

            (a) Execution of the Guarantor's Consent and Acknowledgement
herein-below.

      3. Terms and Conditions. Other than as modified herein, all of the terms,
conditions and covenants of the Loan Agreement shall remain in full force and
effect.

      4. Representations and Warranties. Borrower hereby represents and warrants
to Bank that (i) there are no present uncured defaults under the Loan Agreement,
as amended, or, to Borrower's knowledge, any events or conditions which but for
the giving of notice and/or passage of time would constitute a default
thereunder, (ii) Borrower's financial conditions is and shall remain such as to
enable Borrower to perform all of its obligations under the Loan Agreement, as
heretofore modified and as modified herein, (iii) to the best of Borrower's
knowledge, all of the representations and warranties of Borrower in the Loan
Agreement are true and correct in all material respects as of the date hereof,
and Borrower continues to be in compliance with all representations, warranties
and covenants contained in the Loan Agreement, and (iv) as of the date hereof,
Borrower has no defenses, claims, counterclaims or rights of offset or
recoupment with respect to the Loan Agreement, the Note, the Amended and
Restated Note, or with respect to the Loan indebtedness evidenced and/or secured
thereby. Borrower acknowledges and agrees that Bank is specifically relying upon
the representations and warranties contained herein. Borrower waives, releases,
and forever discharges Bank, its agents, officers, directors and employees, from
and against any and all rights, claims or causes of action against the Bank, its
agents, officers, directors and employees, arising out of its or their actions
or inactions in connection with the Loan or the Loan Agreement.

       5. Miscellanous Term and Conditions

            (a) This Agreement may be executed in counterparts, each of which
shall be deemed an original, but all of which shall constitute one and the same
instrument. Whenever used in this Agreement, unless the context otherwise
specifies or requires, the singular includes the plural, and the plural the
singular; the gender used includes the other genders; and verbs in the present
tense include the future tense. This Agreement shall be deemed to be an
agreement entered into in the State of Ohio and shall be construed and enforced
in accordance with the laws of the State of Ohio, without reference to the
conflict of laws provisions thereof. If any provision of this Agreement
conflicts with applicable law in any specific situation, such provision shall be
modified to the minimum extent necessary to make its application to such
situation valid and enforceable. Such conflict shall not affect any other
provision hereof which can be given effect with the conflicting provision as
modified or, if the conflicting provision cannot be modified, without the
conflicting provision. This Agreement and the exhibit(s) attached hereto
constitutes the entire Agreement between the parties hereto, and there are no
other agreements or understandings with respect to the matters set forth herein
other than as set forth in this Agreement. This Agreement may not be amended
except by written instrument executed by both parties.

            (b) The captions and headings contained herein are for convenience
only, and shall not be used to interpret, limit or define the scope or intent of
any provision hereof.

                    Balance of Page Left Blank Intentionally

<PAGE>

         IN WITNESS WHEREOF, this Agreement has been executed as of the date
first appearing above notwithstanding the date it is actually executed.

Bank:

SKY BANK,

By: /s/ Jerry S. Sutherin
    -------------------------
    Jerry S. Sutherin
    Its: Senior Vice President, Specialty Lending Group

Borrower:

Tribeca Lending Corporation:

By: /s/ Craig Galea
    --------------------------
    Craig Galea,
    Its: Managing Director

Acknowledgement and Consent of Guarantor

The undersigned does hereby (i) consent to the foregoing SECOND AMENDMENT TO
WAREHOUSING CREDIT AND SECURITY AGREEMENT (the "Second Amendment"); (ii) and
reaffirm and ratify the undersigned's, Unconditional and Continuing Secured
Guaranty dated on or about September 30, 2003 (the "Guaranty"), and (iii) agrees
that the "Indebtedness" guaranteed under said Guaranty includes, without
limitation, all principal, interest, and other sums due to Sky Bank from Tribeca
Lending Corporation under the Warehouse Credit and Security Agreement dated
September 30, 2003 and the First Amendment dated effective as of April 7, 2004
by and between Tribeca Lending Corporation and Sky Bank, as amended by the
foregoing Second Amendment for the purpose of extending the date of expiration
and/or termination of the Commitment up to and through July 31, 2005.

Franklin Credit Management Corp

By: /s/ Jeff Johnson
    -----------------------------
    Jeff Johnson
    Its: President

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