June 28, 2002

Mark Carver

Duxford Financial, Inc. and/or Bayport Mortgage, L. P.

3300 Dove Street, Suite 200

Newport Beach, CA 92660

Re: Warehouse Facility Commitment Terms

Dear Mr. Carver:

First Tennessee Bank (Bank) is pleased to make a warehouse line of credit available to Duxford Financial, Inc. and/or Bayport Mortgage, L. P. (Borrower) based upon the following terms and in accordance with terms and conditions stated within the Mortgage warehouse loan and Security Agreement (Agreement) pertaining to this facility. All terms contained within this letter (Commitment Letter) shall be binding and shall be considered to be part of the Agreement upon mutual acceptance by all parties. This loan commitment shall expire 30 days from the date of this letter unless accepted and executed prior to that date. This commitment replaces all prior warehouse facility commitments made to Duxford Financial, Inc. and/or Bayport Mortgage, L. P, by the Bank and is not in addition to any such prior commitments.

The terms of this commitment are as follows:

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Please indicate your acceptance of these terms by executing below.

If you have any questions or if I may be of assistance in any way, please call.

Sincerely

/s/ GAITHER DAUGHERTY

Gaither Daugherty

Vice PresidentWarehouse Lending

Agreed to and accepted this 12 day of July, 2002

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MORTGAGE WAREHOUSE LOAN AND SECURITY AGREEMENT

THIS AGREEMENT entered into effective as of this day, June 28, 2002, by and between Duxford Financial, Inc. and/or Bayport Mortgage, L. P., a California Corporation with offices at 1300 Dove Street, Suite 200, Newport Beach, CA 92660 (hereinafter sometimes referred to as Borrower) and First Tennessee Bank, 165 Madison Ave., Memphis, Tennessee (hereinafter referred to as Bank).

W I T N E S S E T H

WHEREAS, Borrower is engaged in the business of originating and/or acquiring mortgage loans secured by mortgages upon improved, residential real property, including mortgage loans insured or to be insured by the Federal Housing Administration (FHA), loans guaranteed or to be guaranteed by the Veterans Administration (VA) and conventional loans and

WHEREAS, Borrower desires to borrow money from Bank under the Line of Credit to assist in funding the origination and/or acquisition of such mortgage loans, granting unto the Bank a first lien security interest in (i) each such mortgage loan (ii) all contract and related rights with respect to each such Lock related thereto (iii) the proceeds from the sale of such mortgage loans (iv) all deposit accounts of Borrower maintained at Bank and (v) other collateral (collectively, Collateral) to secure such Line of Credit, and the Bank is willing to provide financing to assist in funding the origination and/or acquisition of such mortgage loans with advances under the Line of Credit on the security of such Collateral and

WHEREAS, this Agreement has been entered into by the parties for the purpose of confirming the terms and conditions under which all advances under the Line of Credit shall be made by the Bank on behalf of the Borrower to assist in funding the origination and/or acquisition of such mortgage loans.

NOW, THEREFORE, the parties mutually agree as follows:

Advance Amount shall mean the lesser of:

Advance Date shall mean the date the Closing Check is presented to the Banks Mortgage Warehouse Lending Division for payment in accordance with Section 2.3. hereof.

Advance Documents with respect to any funding, shall mean the documentation described in Section 2.3.5.

Advance Request and Supplemental Closing Instructions shall mean that document to be executed by Borrower and Closing Agent with respect to each Eligible Mortgage Loan to be funded hereunder and which shall serve as a cash advance request hereunder by Borrower, in the form of Exhibit A attached hereto, which may be changed from time to time at the sole discretion of the Bank,

Bailee Letter shall mean a letter in the form of Exhibit C attached hereto which shall be attached to the front of every Mortgage Note by the Bank and used by the Bank and its bailees for the purposes stated therein.

Bank shall mean First Tennessee Bank, Memphis, Tennessee.

Base Rate shall mean the Banks base commercial rate of interest which is established from time to time by the Bank, each change in the Base Rate to become effective, without notice to the Borrower, on the effective date of each change in the Base Rate.

Business Day shall mean 8:30 AM until 4:00 PM, Central Time, any Monday, Tuesday, Wednesday. Thursday or Friday on which the Bank is open for the transaction of business in Memphis, Tennessee, All payments to the Warehouse Line of Credit received after 4:00 PM shall be included in the following Business Day.

Closing Agent shall mean the attorney or title company designated by the Borrower to close the Eligible Mortgage Loan on behalf of Borrower.

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Closing Check shall mean a check or wire transfer drawn on the Warehouse Clearing Account and payable to the closing agent for the sole purpose of closing or acquiring an Eligible Mortgage Loan.

Collateral shall mean each Mortgage Note and such other collateral as may be pledged to Bank pursuant to this Agreement as described in section 2.8.1.

Combined Net Worth shall mean that sum calculated as follows from borrower and guarantor financial statements, each prepared as of the same date: Borrowers Tangible Net worth plus Guarantor(s) Tangible Net Worth minus the sum of the following, if included in the Guarantors Tangible Net Worth: assets held jointly unless ail owners guaranty the debt secured hereby, Guarantors equity in the Borrower, receivables due from the Borrower, unverified and unrealized appreciation in personal residence(s), equity in automobiles and other personal property, and unsecured receivables, MINUS payables due to Borrower.

Commitment Letter shall mean that letter from the Bank to the Borrower which describes the terms under which this Agreement is being entered into and which shall be considered a part hereof, a copy of which is attached hereto as Exhibit F.

Eligible Mortgage Loan shall mean each residential loan evidenced by a Mortgage Note, Mortgage and related documents, which has been originated or acquired by the Borrower, and which has been, or is to be, pledged to the Bank as Collateral for the Line of Credit, and which meets all criteria specified in the Schedule of Eligible Mortgage Loan Criteria attached hereto as Exhibit G, and which may change from time to time at the sole discretion of the Bank.

Eligible Prime Mortgage Loan shall mean an Eligible Mortgage Loan which conforms to FHA, VA, FHLMC, or FNMA guidelines. An Eligible Mortgage Loan which conforms to all FNMA guidelines except maximum loan size and debt ratios shall be considered to be an Eligible Prime Mortgage Loan.

Eligible Sub-prime Mortgage Loan shall mean any Eligible Mortgage Loan which is not an Eligible Prime Mortgage Loan.

Funding Date shall mean the earlier of: 1. the date on the face of the Closing Check, which shall be equal to the date the proceeds from the Eligible Mortgage Loan are disbursed by the Closing Agent; OR 2. the date the Closing Check is deposited into an account of the Closing Agent.

Guarantor(s) shall mean None.

Line of Credit or Loan shall mean the credit facility governed hereby.

Liquidity shall mean the sum of all Borrower and Guarantor assets owned and held in cash or accounts which can be converted to cash within 30 days, including but not limited to checking accounts, money market or savings, certificates of deposit, and marketable securities. IRAs owned and held in assets which can be converted to cash within 30 days will be discounted by a factor of 40%.

Loan Account shall mean that account established by the Bank pursuant to Section 2.2. hereof.

Lock with respect to any Eligible Mortgage Loan shall mean the obligation of a Qualified Investor to Purchase such Eligible Mortgage Loan upon its presentation to the Qualified Investor by or on behalf of the Borrower, as well as the full amount which such Qualified Investor has committed to pay for the same.

Master Promissory Note shall mean that note of even date herewith described in Section 2.2., a copy of which is            , attached hereto as Exhibit B, and any extensions, modifications, and renewals thereof.

Maximum Line of Credit shall be Twenty Million and no/100 Dollars ($20,000,000.00).

Mortgage shall mean or refer to the deed of trust, mortgage or other instrument granting to the Borrower, or the holder of such deed of trust, mortgage or instrument, a mortgage lien upon the property therein described.

Mortgage Note Rate shall mean the interest rate stated on each Mortgage Note.

Mortgage Note shall mean an original promissory note evidencing an Eligible Mortgage Loan.

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Mortgagor shall mean that person or persons executing and delivering the Mortgage Note and Mortgage.

One Month LIBOR shall mean the London Inter-Bank Offered Rate for a one month term as published in the Wall Street Journal, each change in One Month LIBOR to become effective, without notice to the Borrower, on the date of publication of each such change.

Purchase shall mean the act of a Qualified Investor or other person or entity providing funds and remittance advice to the Bank in accordance with the wire transfer instructions set forth on the applicable Bailee Letter in an amount and in a manner sufficient to cause Bank to release its security interest as provided hereunder.

Purchase Date shall mean the Business Day upon which the Bank receives both 1) the Purchase Price, plus all accrued interest and other payments, if any, due on the Purchase of the Eligible Mortgage Loan, and 2) remittance instructions pertaining to such purchase proceeds.

Purchase Price shall mean the dollar amount the Qualified Investor has contracted or agreed to pay for the Purchase of the particular Eligible Mortgage Loan, not including any premium or other sums allocated to or for the purchase of servicing rights and not including any sums for any interest that has or will have accrued on the Eligible Mortgage Loan from the date it is closed by the Closing Agent until the date the Eligible Mortgage loan is actually purchased by the Qualified Investor.

Qualified Investor shall mean an investor listed on Exhibit E attached hereto and approved by the Bank to Purchase Mortgage Loans.

Tangible Net Worth shall mean total assets minus total liabilities MINUS the sum of: goodwill, organization costs. receivables due from parties related to this credit, and other assets as specified by Bank as unacceptable, PLUS payables due to parties related to this credit, all measured in accordance with GAAP.

Termination Date shall mean the first to occur of (i) the maturity date stated in the Master Promissory Note, or (ii) the occurrence of an Event of Default.

Warehouse Clearing Account shall mean that account at Bank on which the Closing Checks will be drawn to fund, in whole or in part, the closing and/or acquisition of Eligible Mortgage Loans.

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