10-Q

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549

FORM 10-Q (Mark One)

[   X   ]           QUARTERLY REPORT PURSUANT TO SECTION 13 or 15(d)
                          OF THE SECURITIES EXCHANGE ACT OF 1934

FOR THE QUARTERLY PERIOD ENDED NOVEMBER 30, 2001

OR

[      ]          TRANSITION REPORT PURSUANT TO SECTION 13 OR
                          15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from      _______________________  to  __________________________

Commission File Number:     1-8422

COUNTRYWIDE CREDIT INDUSTRIES, INC.
(Exact name of registrant as specified in its charter)

DELAWARE

(State or other jurisdiction of
incorporation or organization)

4500 Park Granada, Calabasas, California

(Address of principal executive offices) 13-2641992

(IRS Employer
Identification No.)

91302

(Zip Code)

(818) 225-3000
--------------------------------------------------------------------------------------------------
(Registrant's telephone number, including area code)

         Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes   X       No          

         Indicate the number of shares outstanding of each of the registrant's classes of common stock, as of the latest practicable date.

Class
Common Stock $.05 par value Outstanding at January 10, 2002
122,722,171

PART I
FINANCIAL INFORMATION

Item 1. FINANCIAL STATEMENTS

COUNTRYWIDE CREDIT INDUSTRIES, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
(Dollar amounts in thousands, except per share data)

                                           A S S E T S
                                                                                      November 30,                   February 28,
                                                                                          2001                           2001
                                                                               --------------------------     ---------------------------

Cash                                                                               $        209,888               $        126,496
Mortgage loans and mortgage-backed securities held for sale                               7,674,478                      1,964,018
Trading securities, at market value ($570,077 and  $309,089 pledged
   as collateral at November 30, 2001 and February 28, 2001, respectively)
                                                                                          6,146,683                      4,050,082
Mortgage servicing rights, net                                                            5,769,375                      5,767,748
Investments in other financial instruments                                                3,770,713                      4,160,314
Securities purchased under agreements to resell                                           4,732,668                      3,109,556
Property, equipment and leasehold improvements, net                                         443,120                        396,943
Other assets                                                                              6,671,241                      3,380,350
                                                                               --------------------------     ---------------------------
         Total assets                                                                   $35,418,166                 $   22,955,507
                                                                               ==========================     ===========================

Borrower and investor custodial accounts (segregated in special
   accounts - excluded from corporate assets)                                        $   10,664,605                $     5,553,143
                                                                               ==========================     ===========================

                              LIABILITIES AND SHAREHOLDERS' EQUITY

Notes payable                                                                        $   15,121,427                 $   11,402,791
Securities sold under agreements to repurchase                                            8,528,227                      3,541,230
Drafts payable issued in connection with mortgage loan closings                           1,602,564                        932,931
Accounts payable, accrued liabilities and other                                           3,819,735                      1,449,288
Deferred income taxes                                                                     1,787,389                      1,570,003
                                                                               --------------------------     ---------------------------
         Total liabilities                                                               30,859,342                     18,896,243

Commitments and contingencies                                                                      -                              -

Company-obligated mandatorily redeemable capital trust pass-
   through securities of subsidiary trusts holding solely Company
   guaranteed related subordinated debt                                                     500,000                        500,000

Shareholders' equity
Preferred stock - authorized, 1,500,000 shares of $0.05 par value;
   issued and outstanding, none                                                                    -                              -
Common stock - authorized, 240,000,000 shares of $0.05 par
   value; issued and outstanding, 122,698,753 shares at
   November 30, 2001 and 117,732,249 shares at February 28, 2001                              6,135                          5,887
Additional paid-in capital                                                                1,505,880                      1,307,679
Accumulated other comprehensive income                                                       74,937                        173,249
Retained earnings                                                                         2,471,872                      2,072,449
                                                                               --------------------------     ---------------------------
         Total shareholders' equity                                                       4,058,824                      3,559,264
                                                                               --------------------------     ---------------------------
         Total liabilities and shareholders' equity                                   $  35,418,166                 $   22,955,507
                                                                               ==========================     ===========================

Borrower and investor custodial accounts                                             $   10,664,605                  $   5,553,143
                                                                               ==========================     ===========================
                                                 The accompanying notes are an integral part of these statements.

COUNTRYWIDE CREDIT INDUSTRIES, INC. AND SUBSIDIARIES
>CONSOLIDATED STATEMENTS OF EARNINGS
(UNAUDITED)
(Dollar amounts in thousands, except per share data)

                                                                                       Three Months                                     Nine Months
                                                                                    Ended November 30,                              Ended November 30,
                                                                                 2001                     2000                    2001                     2000
                                                                        ----------------------     ------------------      --------------------    --------------------
Revenues
   Loan origination fees                                                    $   258,324               $     99,647             $   660,034             $   273,869
   Gain on sale of loans                                                        312,810                    156,740                 821,006                 433,267
                                                                        ----------------------     ------------------      --------------------    --------------------
      Loan production revenue                                                   571,134                    256,387               1,481,040                 707,136

   Interest earned                                                              552,314                    367,312               1,631,160                 964,732
   Interest charges                                                            (410,198)                  (365,535)             (1,333,914)               (954,311)
                                                                        ----------------------     ------------------      --------------------    --------------------
      Net interest revenue                                                      142,116                      1,777                 297,246                  10,421

   Loan servicing revenue                                                       407,894                    307,238               1,133,675                 870,461
   Amortization & impairment/recovery of mortgage servicing rights,
      net of hedge                                                             (447,388)                  (161,600)             (1,087,254)               (413,850)
                                                                        ----------------------     ------------------      --------------------    --------------------
      Net loan administration revenue                                           (39,494)                   145,638                  46,421                 456,611

   Net premiums earned                                                          104,760                     71,264                 283,926                 199,567
   Commissions, fees and other revenues                                          84,093                     49,610                 198,631                 147,007
                                                                        ----------------------     ------------------      --------------------    --------------------
            Total revenues                                                      862,609                    524,676               2,307,264               1,520,742

Expenses
   Salaries and related expenses                                                331,061                    196,932                 874,590                 557,365
   Occupancy and other office expenses                                          106,354                     67,730                 290,988                 203,984
   Marketing expenses                                                            16,996                     17,563                  48,164                  57,310
   Insurance net losses                                                          47,011                     26,788                 118,002                  78,261
   Other operating expenses                                                     104,144                     66,036                 283,161                 201,055
                                                                                                                           --------------------    --------------------
                                                                        ----------------------     ------------------
            Total expenses                                                      605,566                    375,049               1,614,905               1,097,975
                                                                        ----------------------     ------------------      --------------------    --------------------

Earnings before income taxes                                                    257,043                    149,627                 692,359                 422,767
   Provision for income taxes                                                    96,032                     54,214                 259,064                 152,860
                                                                        ----------------------     ------------------      --------------------    --------------------

NET EARNINGS                                                                $   161,011               $     95,413             $   433,295             $   269,907
                                                                        ======================     ==================      ====================    ====================

Earnings per share
   Basic                                                                         $1.32                       $.83                   $3.61                   $2.36
   Diluted                                                                       $1.27                       $.80                   $3.48                   $2.29



                                                 The accompanying notes are an integral part of these statements.

COUNTRYWIDE CREDIT INDUSTRIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
(Dollar amounts in thousands)

                                                                                         Nine Months
                                                                                     Ended November 30,
                                                                                  2001                          2000
                                                                         ------------------------     -----------------------
Cash flows from operating activities:
   Net earnings                                                                   $ 433,295                  $  269,907
      Adjustments to reconcile net earnings to net cash
         used by operating activities:
       Gain on sale of available-for-sale securities                               (266,218)                    (37,066)
        Impairment of mortgage-backed securities retained
            in securitization                                                       145,350                       8,645
      Amortization and impairment/recovery of mortgage servicing
rights                                                                            2,183,203                     513,312
      Depreciation and other amortization                                            31,456                      52,921
      Deferred income taxes                                                         259,064                     152,860

      Origination and purchase of loans held for sale                          (106,418,780)                (48,452,386)
      Principal repayments and sale of loans                                    100,708,320                  48,819,161
                                                                         ------------------------     -----------------------
           (Increase) decrease in mortgage loans and mortgage-
               backed securities held for sale                                   (5,710,460)                    366,775

      (Increase) decrease in other financial instruments                            816,477                    (877,235)
      Increase in trading securities                                             (2,096,601)                 (1,386,196)
      Increase in securities purchased under agreements to resell                (1,623,112)                 (2,161,776)
      Increase in other assets                                                   (3,270,757)                   (992,969)
      Increase in accounts payable and accrued liabilities                        1,597,532                     324,228
                                                                         ------------------------     -----------------------
         Net cash used by operating activities                                   (7,500,771)                 (3,766,594)
                                                                         ------------------------     -----------------------
Cash flows from investing activities:
   Additions to mortgage servicing rights, net                                   (2,103,125)                 (1,177,004)
   Additions to available-for-sale securities                                    (2,933,226)                          -
   Purchase of property, equipment and leasehold
      improvements, net                                                             (80,309)                    (30,805)
   Proceeds from sale of available-for-sale securities                            2,395,952                     861,883
                                                                         ------------------------     -----------------------
      Net cash used by investing activities                                      (2,720,708)                   (345,926)
                                                                         ------------------------     -----------------------
Cash flows from financing activities:
   Net increase in short-term borrowings                                          5,468,418                   2,225,452
   Issuance of long-term debt                                                     6,990,800                   2,902,236
   Repayment of long-term debt                                                   (3,037,551)                   (957,050)
    Net increase in deposit liabilities                                             726,513                           -
   Issuance of common stock                                                         190,563                      38,002
   Cash dividends paid                                                              (33,872)                    (34,152)
                                                                         ------------------------     -----------------------
         Net cash provided by financing activities                               10,304,871                   4,174,488
                                                                         ------------------------     -----------------------
Net increase in cash                                                                 83,392                      61,968
Cash at beginning of period                                                         126,496                      59,890
                                                                         ------------------------     -----------------------
Cash at end of period                                                           $   209,888                  $  121,858
                                                                         ========================     =======================
Supplemental cash flow information:
   Cash used to pay interest                                                     $1,316,405                  $  956,513
   Cash used to pay income taxes                                              $       4,741                 $    11,731
Noncash investing activities:
   Unrealized (loss) gain on available-for-sale securities,
      net of tax                                                               $    (98,312)                $    41,189


                                                 The accompanying notes are an integral part of these statements.

COUNTRYWIDE CREDIT INDUSTRIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(UNAUDITED)
(Dollar amounts in thousands)

                                                                       Three Months                                     Nine Months
                                                                    Ended November 30,                                Ended November 30,
                                                                   2001                    2000                    2001                    2000
                                                          ---------------------    -------------------     -------------------     --------------------

NET EARNINGS                                                   $  161,011                $  95,413              $  433,295                $  269,907

Other comprehensive income (loss), net of tax:
     Unrealized gains (losses) on available for sale
securities:
        Unrealized holding gains (losses) arising
           during the period, before tax                           91,486                   (5,211)                (36,776)                 101,524
        Income tax (expense) benefit                              (34,252)                   1,965                  13,855                   (36,651)
                                                          ---------------------    -------------------     -------------------     --------------------
        Unrealized holding gains (losses) arising
           during the period, net of tax                           57,234                   (3,246)                (22,921)                   64,873
        Less: reclassification adjustment for (gains)
 losses included in net earnings, before tax                      (99,267)                 (23,470)               (120,964)                  (37,066)
        Income tax expense (benefit)                               37,435                    8,463                  45,573                    13,382
                                                                                   -------------------     -------------------     --------------------
                                                          ---------------------
           Reclassification adjustment for (gains)
losses included in net earnings, net of tax                       (61,832)                 (15,007)                (75,391)                  (23,684)
                                                                                                                                   --------------------
                                                          ---------------------    -------------------     -------------------
Other comprehensive income (loss)                                  (4,598)                 (18,253)                (98,312)                   41,189
                                                          ---------------------                                                    --------------------
                                                                                   -------------------     -------------------

COMPREHENSIVE INCOME                                           $  156,413                 $ 77,160              $  334,983                 $ 311,096
                                                          =====================    ===================     ===================     ====================



                                                     The accompanying notes are an integral part of these statements.

COUNTRYWIDE CREDIT INDUSTRIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)

NOTE A - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

         The accompanying consolidated financial statements have been prepared in accordance with generally accepted accounting principles for interim financial information and with the instructions to Form 10-Q and Rule 10-01 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring adjustments) considered necessary for a fair presentation have been included. Operating results for the nine months ended November 30, 2001 are not necessarily indicative of the results that may be expected for the ten months ending December 31, 2001 ("Transitional Fiscal Year"). For further information, refer to the consolidated financial statements and footnotes thereto included in the annual report on Form 10-K for the fiscal year ended February 28, 2001 of Countrywide Credit Industries, Inc. (the "Company").

         On March 1, 2001, the Company adopted Financial Accounting Standards Board (FASB) Statement No. 133, "Accounting For Derivative Instruments And Hedging Activities," and FASB Statement No. 138, "Accounting For Certain Derivative Instruments And Certain Hedging Activities-An Amendment Of FASB Statement No. 133" (collectively, "FAS 133"). Under FAS 133, all derivative instruments are recognized on the balance sheet at fair value. On the date the Company enters into a derivative contract the Company designates the derivative instrument as a hedge of the fair value of a recognized asset or liability or of an unrecognized firm commitment ("fair value" hedge), a hedge of a forecasted transaction or of the variability of cash flows to be received or paid related to a recognized asset or liability ("cash flow" hedge) or a free-standing derivative instrument. For a fair value hedge, changes in the fair value of the derivative instrument and changes in the fair value of the hedged asset or liability attributable to the hedged risk are recorded in current period net income. For a cash flow hedge, changes in the fair value of the derivative to the extent that it is effective are recorded in other comprehensive income within stockholders' equity and subsequently reclassified to income in the same period(s) that the hedged transaction impacts net income. For free-standing derivative instruments, changes in the fair values are reported in current period net income.

         The Company formally documents the relationship between hedging instruments and hedged items, as well as the risk management objective and strategy for undertaking various hedge transactions. This process includes linking all derivative instruments that are designated as fair value hedges to specific assets and liabilities on the balance sheet. The Company also formally assesses, both at the inception of the hedge and on an ongoing basis, whether the derivative instruments used are highly effective in offsetting changes in fair values or cash flows of hedged items. If it is determined that the derivative instrument is not highly effective as a hedge, hedge accounting is discontinued.

         The Company discontinues hedge accounting prospectively when (1) it determines that a derivative instrument is no longer effective in offsetting changes in the fair value or cash flows of a hedged item; (2) a derivative instrument expires or is sold, terminated, or exercised; (3) a derivative instrument is de-designated as a hedge instrument because it is unlikely that a forecasted transaction will occur or (4) management determines that designation of a derivative instrument as a hedge instrument is no longer appropriate. When hedge accounting is discontinued the derivative instrument will continue to be carried on the balance sheet at its fair value; however, the previously hedged asset or liability will no longer be adjusted for changes in fair value. When hedge accounting is discontinued because it is probable that a forecasted transaction will not occur, the derivative instrument will continue to be carried on the balance sheet at its fair value, and gains and losses that were accumulated in other comprehensive income will be recognized immediately in earnings. When hedge accounting is discontinued because the hedging instrument is sold or terminated the amount reported in other comprehensive income to the date of sale or termination will continue to be reported in other comprehensive income until the forecasted transaction impacts earnings. In all other situations in which hedge accounting is discontinued , the derivative instrument will be carried at its fair value on the balance sheet, with changes in its fair value recognized in current period earnings.

         The Company occasionally purchases or originates financial instruments that contain an embedded derivative instrument. At inception of the financial instrument, the Company assesses whether the economic characteristics of the embedded derivative instrument are clearly and closely related to the economic characteristics of the financial instrument (host contract), whether the financial instrument that embodies both the embedded derivative instrument and the host contract is currently measured at fair value with changes in fair value reported in earnings, and whether a separate instrument with the same terms as the embedded instrument would meet the definition of a derivative instrument.

NOTE A - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

        If the embedded derivative instrument is determined not to be clearly and closely related to the host contract, is not currently measured at fair value with changes in fair value reported in earnings, and the embedded derivative instrument would qualify as a derivative instrument, the embedded derivative instrument is separated from the host contract and carried at fair value with changes recorded in current period earnings.

         Certain amounts reflected in the consolidated financial statements for the nine-month period ended November 30, 2000 have been reclassified to conform to the presentation for the nine-month period ended November 30, 2001.

NOTE B - MORTGAGE SERVICING RIGHTS

         The activity in mortgage servicing rights is as follows:

- ------------------------------------------------------------------------- -- -----------------------------------
                                                                                      Nine Months Ended
   (Dollar amounts in thousands)                                                      November 30, 2001
- ------------------------------------------------------------------------- -- -----------------------------------
                                                                             ------------------------------
   Mortgage Servicing Rights
      Balance at beginning of period                                               $        5,876,121
      Additions                                                                             2,103,125
      Scheduled amortization                                                                 (729,769)
      Change in fair value attributable to hedged risk                                       (384,692)
                                                                             ------------------------------
      Balance before valuation reserve
              at end of period                                                              6,864,785
                                                                             ------------------------------

    Reserve for Impairment of Mortgage Servicing Rights
      Balance at beginning of period                                                          (108,373)
      Reductions (additions)                                                                  (987,037)
                                                                              -----------------------------
      Balance at end of period                                                              (1,095,410)
                                                                              -----------------------------
        Mortgage Servicing Rights, net                                               $       5,769,375
                                                                              =============================

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

NOTE C – INVESTMENTS IN OTHER FINANCIAL INSTRUMENTS

         Investments in other financial instruments include the following.

 --------------------------------------------------------------------------------------------------------------------------------
                                                                             November 30,                    February 28,
      (Dollar amounts in thousands)                                               2001                           2001
 ----------------------------------------------------------------- --- ------------------------- --- ----------------------- ----
      Servicing hedge instruments                                            $    1,388,148               $     2,407,799
      Mortgage-backed securities retained in securitizations                      1,167,328                     1,202,093
      Insurance company investment portfolio                                        648,960                       550,422
      Bank investment portfolio                                                     566,277                             -
                                                                       -------------------------     -----------------------
                                                                             $    3,770,713                $    4,160,314
                                                                       =========================     =======================

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

NOTE D – AVAILABLE-FOR-SALE SECURITIES

         Amortized cost and fair value of available-for-sale securities are as follows.

 ---------------------------------------- ---------------------- --- ------------------------------------------------- --- ---------------------- ----
                                                                                    November 30, 2001
                                          ---------------------- --- ------------------------------------------------- --- ---------------------- ----
                                                                             Gross                      Gross
                                               Amortized                  Unrealized                 Unrealized                    Fair
 (Dollar amounts in thousands)                    Cost                       Gains                     Losses                      Value
 ---------------------------------------- ---------------------- --- ---------------------- --- ---------------------- --- ---------------------- ----

       Mortgage-backed                           $ 1,076,813            $        90,580                     ($  65)               $ 1,167,328
          securities retained in
          securitizations
       Principal only securities                     863,769                     29,268                       (400)                   892,637
       Insurance company  investment
          portfolio                                  634,627                     17,909                     (3,576)                   648,960
        Bank investment portfolio                    564,917                      2,083                       (723)                   566,277
                                          ----------------------     ----------------------     ----------------------     ----------------------
                                                 $ 3,140,126                $   139,840                  ($  4,764)               $ 3,275,202
                                          ======================     ======================     ======================     ======================

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

 ---------------------------------------- ---------------------- --- ------------------------------------------------- --- ---------------------- ----
                                                                                    February 28, 2001
                                          ---------------------- --- ------------------------------------------------- --- ---------------------- ----
                                                                             Gross                      Gross
                                               Amortized                  Unrealized                 Unrealized                    Fair
 (Dollar amounts in thousands)                    Cost                       Gains                     Losses                      Value
 ---------------------------------------- ---------------------- --- ---------------------- --- ---------------------- --- ---------------------- ----

       Mortgage-backed
          securities retained in
          securitizations                         $1,108,557                   $107,627                  ($ 14,091)                $1,202,093
       Principal only securities                   1,190,281                    159,318                       (605)                 1,348,994
       Insurance company  investment
          portfolio                                  531,983                     21,637                     (3,198)                   550,422
                                          ----------------------     ----------------------     ----------------------     ----------------------
                                                  $2,830,821                   $288,582                  ($ 17,894)                $3,101,509
                                          ======================     ======================     ======================     ======================

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

NOTE E - NOTES PAYABLE

         Notes payable consists of the following.

 -----------------------------------------------------------------------------------------------------------------------------
                                                                            November 30,                February 28,
      (Dollar amounts in thousands)                                           2001                          2001
 -------------------------------------------------------------- --- ------------------------- --- ----------------------- ----
      Medium-term notes, various series, and Euro Notes:
        Fixed-rate                                                            $9,962,058                   $ 7,158,304
        Floating-rate                                                          4,305,300                     3,277,206
      Convertible debentures                                                     504,602                       500,717
      Subordinated notes                                                         200,000                       200,000
      Secured note payable                                                        75,000                             -
      Unsecured notes payable                                                     71,000                       264,196
      Other notes payable                                                          3,467                         2,368
                                                                    -------------------------     -----------------------
                                                                            $ 15,121,427                   $11,402,791
                                                                    =========================     =======================

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

NOTE E - NOTES PAYABLE (Continued)

Medium-Term Notes

         During the nine months ended November 30, 2001, Countrywide Home Loans ("CHL"), the Company's mortgage banking subsidiary, issued medium term notes under shelf registration statements or pursuant to its Euro medium-term note program as summarized as follows:

- ------------------------------------------------------------------------------------------------------------------------------------------------------------------------
(Dollar amounts in thousands)
                                                   Outstanding Balance                                 Interest Rate                       Maturity Date
                                                                                              ------------------------------   ---------------------------------------
                                 -----------------------------------------------------------
                                     Floating-Rate        Fixed-Rate            Total              From            To                 From                 To
                                 -----------------------------------------------------------  --------------- --------------   -------------------  ------------------
         Series I                          $742,000             $30,000           $772,000        2.17%           4.56%              March 2002            May 2002

        Series J                          1,770,000           4,230,000          6,000,000        2.26%           7.05%                May 2002           Aug. 2016

         Euro Notes                          52,700              91,100            143,800        2.35%           2.55%              April 2002            May 2002

                                 -----------------------------------------------------------
       Total                             $2,564,700          $4,351,100         $6,915,800
                                 ===========================================================

         There were $143.8 million in foreign currency-denominated notes issued pursuant to the Euro medium-term notes program outstanding. Such notes are denominated in Japanese yen. The Company manages the associated foreign currency risk by entering into currency swaps. The terms of the currency swaps effectively translate the foreign currency denominated medium-term notes into U.S. dollars.

         During the nine months ended November 30, 2001, CHL redeemed $3.0 billion of maturing medium term notes.

NOTE F - DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES

         The primary market risk facing the Company is interest rate risk. From an enterprise perspective, the Company manages this risk by striving to balance its Loan Servicing Sector with the Loan Production Sector, which are counter-cyclical in nature. In addition, the Company utilizes various financial instruments, including derivatives contracts, to manage the interest rate risk related specifically to its Committed Pipeline, mortgage loan inventory and MBS held for sale, MSRs, mortgage-backed securities retained in securitizations, trading securities and debt securities. The overall objective of the Company's interest rate risk management policies is to offset changes in the values of these items resulting from changes in interest rates.

         Derivative instruments that the Company uses as part of its interest rate risk management strategy include interest rate floors, MBS mandatory forward sale and purchase commitments, options to sell or buy MBS, treasury futures and interest rate futures, interest rate caps, Capped Swaps, Swaptions, interest rate futures and interest rate swaps. In addition, the Company manages foreign currency exchange rate risk with foreign currency swaps.

         As a result of using over-the-counter derivative instruments, the Company has potential exposure to credit loss in the event of nonperformance by the counterparties. The Company manages this credit risk by selecting only well established, financially strong counterparties, spreading the credit risk amongst many such counterparties, and by placing contractual limits on the amount of unsecured credit risk from any one counterparty. The Company's exposure to credit risk in the event of default by a counterparty is the current cost of replacing the contracts net of any available margins retained by the Company, a custodian or the Mortgage-Backed Securities Clearing Corporation (the "MBSCC"), which is a clearing agent.

Servicing Hedge

         In order to mitigate the effect on earnings of MSR impairment that may result from increased current and projected prepayment activity that generally occurs when interest rates decline, the Company maintains a portfolio of financial instruments, including derivative contracts, that increase in aggregate value when interest rates decline (the "Servicing Hedge"). The financial instruments that form the Servicing Hedge include interest rate floors, options on interest rate futures, interest rate swaps, interest rate caps, Swaptions, options on MBS, principal-only swaps and P/O securities. A portion of the Servicing Hedge is designed to qualify as a fair value hedge under FAS 133. For the nine months ended November 30, 2001, the Company recognized a pre-tax gain of $14.3 million, which represents the ineffective portion of all such FAS 133 fair value hedges of MSRs. This amount is included in amortization and impairment/recovery of mortgage servicing rights, net of hedge, in the statement of earnings. The remaining derivative instruments are free-standing derivatives. These derivatives are marked to fair value and recorded as a component of amortization and impairment/recovery of mortgage servicing rights, net of hedge, in the statement of earnings.

Hedge of Committed Pipeline and Mortgage Loan Inventory

         In order to mitigate the risk that a change in interest rates will result in a decline in the value of the Company's Committed Pipeline or Inventory, the Company enters into hedging transactions. The Inventory is hedged with forward contracts for the sale of loans and net sales of MBS, including options to sell MBS where the Company can exercise the option on or prior to the anticipated settlement date of the MBS. Substantially all of the inventory hedge is designed to qualify as a fair value hedge under FAS 133. For the nine months ended November 30, 2001, the Company recognized a pre-tax gain of $13.6 million, representing the ineffective portion of such fair value hedges of inventory. This amount is included in gain on sale of loans in the statement of earnings.

         The Committed Pipeline is hedged with a combination of options on MBS and treasury futures and MBS forward contracts. The underlying MBS to be delivered generally correspond with the composition of the Committed Pipeline.

         The Committed Pipeline, which is comprised of interest rate lock commitments issued on residential mortgage loans to be held for sale, is considered a portfolio of derivative instruments. The Committed Pipeline and the associated free-standing derivative instruments are marked to fair value and recorded as a component of gain on sale of loans in the statement of earnings.

Debt Securities

         The Company enters into interest rate swaps to convert a portion of its fixed-rate medium term notes to LIBOR-based floating-rate debt and to convert a portion of its foreign currency fixed-rate medium term notes to U.S. dollar LIBOR-based floating-rate debt. These transactions are designed as fair value hedges under FAS 133. For the nine months ended November 30, 2001, the Company recognized a pre-tax gain of $5.6 million, representing the ineffective portion of such fair value hedges of medium-term notes. This amount is included in interest charges in the statement of earnings. In addition the company enters into interest rate swaps to convert a portion of its floating-rate medium term notes to fixed-rate debt and convert a portion of its foreign currency floating-rate medium term notes to US fixed-rate debt. These transactions are designed as a cash flow hedge under FAS 133. For the nine months ended November 30, 2001, the Company recognized a pre-tax loss of $1.3 million, representing the ineffective portion of such cash flow hedges. As of November 30, 2001, the amount of deferred net gains or losses on derivative instruments included in other comprehensive income that is expected to be reclassified as earnings during the next twelve months is not expected to be material.

Broker-Dealer Activities

         Countrywide Securities Corporation ("CSC") utilizes derivatives in connection with its trading activities to manage interest-rate risk. These instruments include MBS mandatory forward sale and purchase commitments as well as short sales of cash market U.S. Treasury securities. All such derivatives are considered free-standing and as such are marked to fair value and recorded as a component of gain on sale of loans in the statement of earnings.

NOTE G – LEGAL PROCEEDINGS

Legal Proceedings

         The Company and certain subsidiaries are defendants in various legal proceedings involving matters generally incidental to their business. Although it is difficult to predict the ultimate outcome of these proceedings, management believes, based on discussions with counsel, that any ultimate liability will not materially affect the consolidated financial position or results of operations of the Company and its subsidiaries.

NOTE H - SUMMARIZED FINANCIAL INFORMATION

         Summarized financial information for Countrywide Credit Industries, Inc. and subsidiaries is as follows:

- ------- ------------------------------------------------- -------------- -------------------------------------------------------------------- ---------------------------------
                                                                                                       November 30, 2001

                                                          -------------- -------------------------------------------------------------------- ---------------------------------
                                                           Countrywide Credit       Countrywide Home
             (Dollar amounts in thousands)                  Industries, Inc.          Loans, Inc.         Other Subsidiaries
                                                                                                                                    Eliminations           Consolidated
- --------------------------------------------------------- --------------------- -- ------------------- -- ------------------- --- ------------------ -- -------------------- --
  Balance Sheets:

  Mortgage loans and mortgage-backed
  securities held for sale                                   $           -              $  7,674,478       $             -         $             -          $   7,674,478
  Mortgage servicing rights, net                                         -                 5,769,375                     -                       -              5,769,375
  Other assets                                                    4,855,915                9,087,462             13,094,142             (5,063,206)            21,974,313
                                                          ---------------------    -------------------    -------------------     ------------------    --------------------
            Total assets                                         $4,855,915              $22,531,315            $13,094,142           ($ 5,063,206)           $35,418,166
                                                          =====================    ===================    ===================     ==================    ====================

  Company-obligated mandatorily     redeemable capital
  trust pass-through    securities                           $           -          $             -            $    500,000        $             -           $    500,000

  Short- and long-term debt                                         740,515               15,561,686              8,729,555             (1,382,102)            23,649,654
  Other liabilities                                                  56,576                4,562,780.             2,618,100                (27,768)             7,209,688
  Equity                                                          4,058,824                2,406,849              1,246,487             (3,653,336)             4,058,824
                                                          ---------------------    -------------------    -------------------     ------------------    --------------------
            Total liabilities and equity                         $4,855,915              $22,531,315            $13,094,142           ($ 5,063,206)           $35,418,166
                                                          =====================    ===================    ===================     ==================    ====================

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

- ------- ------------------------------------------------- -------------- -------------------------------------------------------------------- ---------------------------------
                                                                                              Nine months ended November 30, 2001

                                                          -------------- -------------------------------------------------------------------- ---------------------------------
                                                           Countrywide Credit       Countrywide Home
             (Dollar amounts in thousands)                  Industries, Inc.          Loans, Inc.         Other Subsidiaries
                                                                                                                                    Eliminations           Consolidated
- --------------------------------------------------------- --------------------- -- ------------------- -- ------------------- --- ------------------ -- -------------------- --
  Statements of Earnings:

  Revenues                                                       $    7,538               $1,432,297              $893,593              ($ 26,164)             $2,307,264
  Expenses                                                            5,956                1,023,658               611,455                (26,164)              1,614,905
  Provision for income taxes                                            597                  154,261               104,206                       -                259,064
  Equity in net earnings of subsidiaries                            432,310                       -                      -               (432,310)                     -
                                                          ---------------------    -------------------    -------------------     ------------------    --------------------
            Net earnings                                           $433,295              $   254,378              $177,932             ($ 432,310)            $   433,295
                                                          =====================    ===================    ===================     ==================    ====================

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

NOTE H - SUMMARIZED FINANCIAL INFORMATION (Continued)

- ------- ------------------------------------------------- -------------- -------------------------------------------------------------------- ---------------------------------
                                                                                                       February 28, 2001

                                                          -------------- -------------------------------------------------------------------- ---------------------------------
                                                           Countrywide Credit       Countrywide Home
             (Dollar amounts in thousands)                  Industries, Inc.          Loans, Inc.         Other Subsidiaries
                                                                                                                                    Eliminations           Consolidated
- --------------------------------------------------------- --------------------- -- ------------------- -- ------------------- --- ------------------ -- -------------------- --
  Balance Sheets:

  Mortgage loans and mortgage-backed
  securities held for sale                                      $         -             $  1,964,018            $         -            $         -           $  1,964,018
  Mortgage servicing rights, net                                          -                5,767,748                      -                      -              5,767,748
  Other assets                                                    4,343,853                9,155,120              8,336,417             (6,611,649)            15,223,741
                                                          ---------------------    -------------------    -------------------     ------------------    --------------------
            Total assets                                         $4,343,853              $16,886,886            $ 8,336,417           ($ 6,611,649)           $22,955,507
                                                          =====================    ===================    ===================     ==================    ====================

  Company-obligated mandatorily     redeemable capital
  trust pass-through    securities
                                                                $         -            $           -            $   500,000       $                         $     500,000
                                                                                                                                                  -

  Short- and long-term debt                                         736,630               11,435,760              5,959,565             (3,187,934)            14,944,021
  Other liabilities                                                  47,959                3,068,888                835,658                   (283)             3,952,222
  Equity                                                          3,559,264                2,382,238              1,041,194             (3,423,432)             3,559,264
                                                          ---------------------    -------------------    -------------------     ------------------    --------------------
            Total liabilities and equity                         $4,343,853              $16,886,886             $8,336,417           ($ 6,611,649)           $22,955,507
                                                          =====================    ===================    ===================     ==================    ====================

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

- ------- ------------------------------------------------- -------------- -------------------------------------------------------------------- ---------------------------------
                                                                                              Nine months ended November 30, 2000

                                                          -------------- -------------------------------------------------------------------- ---------------------------------
                                                           Countrywide Credit       Countrywide Home
             (Dollar amounts in thousands)                  Industries, Inc.          Loans, Inc.         Other Subsidiaries
                                                                                                                                    Eliminations           Consolidated
- --------------------------------------------------------- --------------------- -- ------------------- -- ------------------- --- ------------------ -- -------------------- --
  Statements of Earnings:

  Revenues                                                        $  (6,664)                $955,468              $574,147             $   (2,209)             $1,520,742
  Expenses                                                            6,014                  700,676               393,494                 (2,209)              1,097,975
  Provision for income taxes                                         (4,628)                  92,999                64,489                        -               152,860
  Equity in net earnings of subsidiaries                            277,957                        -                      -              (277,957)                      -
                                                          ---------------------    -------------------    -------------------     ------------------    --------------------
            Net earnings                                           $269,907                 $161,793              $116,164             ($ 277,957)            $   269,907
                                                          =====================    ===================    ===================     ==================    ====================

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

NOTE I - SEGMENTS AND RELATED INFORMATION

         The Company has five major segments. They include the Mortgage Banking Segment, the Insurance Segment, the Capital Markets Segment, the Global Operations Segment and the Banking Segment. The Mortgage Banking Segment includes the Production, Servicing and Closing Services Sectors.

         The Production Sector of the Mortgage Banking Segment originates mortgage loans through the Company's retail branch network ("Consumer Markets Division") and Full Spectrum Lending, Inc.; loans sourced through mortgage brokers ("Wholesale Lending Division"); correspondent lending, which buys loans from other financial institutions ("Correspondent Lending Division"). The Servicing Sector of the Mortgage Banking Segment includes activities related to the mortgage servicing rights ("MSRs") associated with the Company's own portfolio and subservicing for other domestic financial institutions. The Closing Services Sector of the Mortgage Banking Segment is comprised of Countrywide's LandSafe companies, which provide credit reports, appraisals, title reports and flood determinations to the Company's Production Sector as well as third parties.

         The Insurance Segment activities include Balboa Life and Casualty, a national provider of property, life and liability insurance; Second Charter Reinsurance Company, a mortgage reinsurance company; and Countrywide Insurance Services, Inc., a national insurance agency offering a full menu of insurance products. The Capital Markets Segment primarily includes the operations of Countrywide Securities Corporation, a registered broker-dealer specializing in mortgage-related

NOTE I - SEGMENTS AND RELATED INFORMATION (Continued)

securities. The Global Operations Segment primarily includes the operations of Global Home Loans, the Company’s European mortgage banking affiliate. The Banking Segment represents the operations of Treasury Bank, N.A., as well as a separate mortgage warehouse lending division. Included in the tables below labeled “Other” are the holding company activities and certain reclassifications to conform management reporting to the consolidated financial statements.

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

                                                                      For the three months ended November 30, 2001
                                             Mortgage Banking                                                          Diversified Businesses
                          -------------- -------------- -------------- --------------     -------------- ------------- ------------- -------------- ------------

                                                        Closing                                            Capital
(Dollars in thousands)      Production     Servicing    Services           Total          Insurance        Markets         Global       Banking        Other          Total

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

Total revenues             $   678,346   ($   71,047)     $  40,407    $      647,706     $   130,594    $     52,754    $  20,154   $     10,336   $     1,065  $    862,609

Segment earnings                                                                                                                                                )
   (pre-tax)              $    361,052   ($  175,612)     $  20,018    $      205,458     $    25,672    $     20,058   $    1,247   $      5,308   ($       700 $     257,043

Segment assets             $ 9,111,724   $ 11,033,095     $  51,641    $ 20,196,460       $ 1,202,509    $11,704,836      $ 81,691   $ 2,090,264      $142,406    $35,418,166

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

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

                                                                      For the three months ended November 30, 2000
                                             Mortgage Banking                                                      Diversified Businesses
                          -------------- -------------- -------------- --------------     -------------- ------------- ------------- -------------- ------------

                                                        Closing                                            Capital
(Dollars in thousands)      Production     Servicing    Services           Total          Insurance        Markets         Global       Banking        Other          Total

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

Total revenues              $  251,223    $  133,821        $20,480    $     405,524      $    88,268    $     29,211   $  2,505     $       590    ($    1,422) $     524,676

Segment earnings
   (pre-tax)              $     48,582   $    64,193       $  8,243    $     121,018       $   20,061    $       9,638 $     361     ($        69)  ($    1,382) $     149,627

Segment assets              $3,339,433    $9,885,491        $32,635     $13,257,559         $ 966,285     $6,311,294     $43,555        $164,017      $ 56,757    $20,799,467

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

NOTE I - SEGMENTS AND RELATED INFORMATION (Continued)

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

                                                                      For the nine months ended November 30, 2001
                                             Mortgage Banking                                                       Diversified Businesses
                          -------------- --------------- ------------- --------------     -------------- ------------- ------------- -------------- ------------

                                                         Closing                                           Capital
(Dollars in thousands)      Production      Servicing    Services          Total          Insurance        Markets         Global       Banking        Other          Total

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

Total revenues             $ 1,658,755   ($      27,432)  $  104,110   $  1,735,433        $  352,662     $   161,888    $  36,472   $     19,449   $    1,360    $  2,307,264

Segment earnings
   (pre-tax)               $   797,286   ($    303,849)  $    49,333   $     542,770      $    70,634    $     68,823   $    4,247   $       9,987  ($    4,102) $     692,359

Segment assets              $9,111,724   $11,033,095      $   51,641    $20,196,460        $1,202,509    $11,704,836     $81,691      $2,090,264      $142,406     $35,418,166

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

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

                                                                      For the nine months ended November 30, 2000
                                             Mortgage Banking                                                        Diversified Businesses
                          -------------- --------------- ------------- --------------     -------------- ------------- ------------- -------------- ------------

                                                         Closing                                           Capital
(Dollars in thousands)      Production      Servicing    Services          Total          Insurance        Markets         Global       Banking        Other          Total

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

Total revenues             $  711,640    $     409,565    $  58,920     $  1,180,125        $ 249,656    $     81,802  $     4,697   $     1,393     $  3,069    $   1,520,742

Segment earnings
   (pre-tax)               $  115,228    $     204,422    $  22,589    $      342,239      $   52,012    $     27,394   $    2,212   ($        375) ($     715)  $     422,767

Segment assets             $ 3,339,433    $ 9,885,491       $ 32,635    $13,257,559         $ 966,285     $6,311,294      $ 43,555     $ 164,017      $ 56,757    $20,799,467

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

NOTE J – IMPLEMENTATION OF NEW ACCOUNTING STANDARDS

         The Company adopted FAS 133 on March 1, 2001. At the date of adoption, the Company recorded certain transition adjustments as required by FAS 133. There was no impact on net income as a result of such transition adjustments. However, such adjustments resulted in the following impact on the Company's balance sheet (in millions).

     Decrease in fair value of derivatives classified as assets                                                    ($93.7)
     Increase in fair value of derivatives classified as liabilities                                              ($107.2)
     Decrease in book value of hedged borrowings                                                                   $107.2
     Increase in book value of MSRs                                                                                 $81.7
     Increase in book value of inventory and other assets                                                           $12.0

        In November 1999, the Emerging Issues Task Force (“EITF”) released Issue No. 99-20, titled “Recognition of Interest Income and Impairment on Purchased and Retained Interests in Securitized Financial Assets.” EITF 99-20 is effective for quarters beginning after March 15, 2001. Under the guidelines of EITF 99-20, the accounting treatment of interest income and impairment of beneficial interests in securitization transactions is modified such that beneficial interests which are determined to have an other-than-temporary impairment are required to be written down to fair value through current period earnings. The Company adopted EITF 99-20 for the fiscal quarter ended August 31, 2001 and there was no material impact on the Company’s financial statements.

        In September 2000, the FASB issued Statement No. 140 (FAS 140), “Accounting for the Transfers and Servicing of Financial Assets and Extinguishments of Liabilities,” which replaces FAS 125 (of the same title). FAS 140 revises certain standards in the accounting for securitizations and other transfers of financial assets and collateral, and requires some disclosures relating to securitization transactions and collateral, but it carries over most of FAS 125‘s provisions. The collateral and disclosure provisions of FAS 140 were included in the February 28, 2001 financial statements. All other

NOTE J - IMPLEMENTATION OF NEW ACCOUNTING STANDARDS (Continued)

provisions of this Statement were adopted on April 1, 2001, as required by the statement. The adoption of this statement did not have a material impact on the Company's financial statements.

        In June 2001, the FASB issued Statement No. 141 (FAS 141), titled “Business Combinations.” FAS 141 addresses financial accounting and reporting for business combinations and supercedes previously issued authoritative literature on the topic, including APB 16. FAS 141 requires that all business combinations initiated after June 30, 2001 be accounted for under the purchase method of accounting. The use of the pooling-of-interests method will no longer be allowed. FAS 141 also provides guidance as to how the purchase method is to be applied. Implementation of FAS 141 is not expected to have a material impact on the Company’s financial statements.

        In June 2001, the FASB issued Statement No. 142 (FAS 142), titled “Goodwill and Other Intangibles.” Effective January 1, 2002, FAS 142 eliminates the amortization of goodwill and certain other intangible assets. These assets will be reviewed at least annually and assessed for impairment. Implementation of FAS 142 is not expected to have a material impact on the Company’s financial statements.

NOTE K - EARNINGS PER SHARE

         Basic earnings per share is determined using net income divided by the weighted average shares outstanding during the period. Diluted EPS is computed by dividing net income by the weighted average shares outstanding, assuming all dilutive potential common shares were issued.

         The following table presents basic and diluted EPS for the three and nine months ended November 30, 2001 and 2000.

- -------------------------------- --- --- ------- -------------------------------------------------- --- ------- ------
                                                         Three Months Ended November 30,
                                 --- --- ------- -------------------------------------------------- --- ------- ------
                                                   2001                                        2000
                                 ------------- ------------- -----------      ------------- ------------ -------------
(Amounts in thousands, except                                 Per-Share                                   Per-Share
per share data)                      Net                        Amount            Net                       Amount
                                   Earnings       Shares                        Earnings      Shares
- --------------------------------               ------------- -----------                    ------------ -------------
                                 -------------                                -------------
Net earnings                         $161,011                                      $95,413
                                 =============                                =============

Basic EPS
Net earnings available to
common shareholders                  $161,011       122,309       $1.32            $95,413      114,989         $0.83

Effect of dilutive stock
options                               -               4,257                        -              4,369
                                 ------------- -------------                  ------------- ------------

Diluted EPS
Net earnings available to
common shareholders                  $161,011       126,566       $1.27            $95,413      119,358         $0.80
                                 ============= =============                  ============= ============

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

NOTE K - EARNINGS PER SHARE (Continued)

- -------------------------------- --- --- ------- -------------------------------------------------- --- ------- ------
                                                         Nine Months Ended November 30,
                                 --- --- ------- -------------------------------------------------- --- ------- ------
                                                   2001                                        2000
                                 ------------- ------------- ------------     ------------- ------------ -------------
(Amounts in thousands, except                                 Per-Share                                   Per-Share
per share data)                      Net                       Amount             Net                       Amount
                                   Earnings       Shares                        Earnings      Shares
- --------------------------------               ------------- ------------                   ------------ -------------
                                 -------------                                -------------
Net earnings                         $433,295                                     $269,907
                                 =============                                =============

Basic EPS
Net earnings available to
common shareholders                  $433,295       120,078        $3.61          $269,907      114,359         $2.36

Effect of dilutive stock
options                               -               4,499                        -              3,635
                                 ------------- -------------                  ------------- ------------

Diluted EPS
Net earnings available to
common shareholders                  $433,295       124,577        $3.48          $269,907      117,994         $2.29
                                 ============= =============                  ============= ============

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

NOTE L – SUBSEQUENT EVENTS

         On December 21, 2001, the Company declared a cash dividend of $.10 per common share payable January 31, 2002 to shareholders of record on January 14, 2002.

         Effective January 1, 2002, the Company will begin reporting its financial results on a calendar year basis with a December 31 year-end. Within 90 days following that date, the Company will file a Form 10-K for the 10-month period ending December 31, 2001.

         In August of 2001, the FASB issued Statement of Financial Accounting Standards No. 144, "Accounting for the Impairment or Disposal of Long-Lived Assets" ("FAS 144"). FAS 144 retains the existing requirements to recognize and measure the impairment of long-lived assets to be held and used or to be disposed of by sale. However, FAS 144 makes changes to the scope and certain measurement requirements of existing accounting guidance. FAS 144 also changes the requirements relating to reporting the effects of a disposal or discontinuation of a segment of a business. The adoption of this statement is not expected to have a significant impact on the financial condition or results of operations of the Company.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL

CONDITION AND RESULTS OF OPERATIONS (Continued)

ITEM 2.           MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL                      CONDITION AND RESULTS OF OPERATIONS

FORWARD-LOOKING STATEMENTS

         This Quarterly Report on Form 10-Q may contain forward-looking statements. These forward-looking statements are subject to certain risks and uncertainties, which could cause actual results to differ materially from historical results or those anticipated due to a number of factors such as the direction and level of interest rates, competitive and general economic conditions in each of our business sectors, expense and loss levels in our mortgage, insurance and other business sectors, general economic conditions in the United States and abroad and in the domestic and international areas in which we do business, the legal, regulatory and legislative environments in the markets in which the company operates, changes in accounting and financial reporting standards, decisions by the company to change its business mix, and other risks detailed in documents filed by the company with the Securities and Exchange Commission from time to time. Words like "believe", "expect", "should", "may", "could", "anticipated", "promising" and other expressions which indicate future events and trends identify forward-looking statements. The Company undertakes no obligation to publicly update or revise any forward-looking statements.

Quarter Ended November 30, 2001 Compared to Quarter Ended November 30, 2000

OPERATING SEGMENT RESULTS

         The Company's pre-tax earnings by Segment are summarized below.

- ------------------------------------------------------------ ----------------------------------------------------- -----------
                                                                              Three Months Ended
               (Dollar amounts in thousands)                                     November 30,
- ------------------------------------------------------------ ----------------------------------------------------- -----------
                                                                   2001                            2000
                                                             ------------------             -------------------
Mortgage Banking:
     Production                                                   $ 361,052                      $  48,582
     Servicing                                                     (175,612)                        64,193
     Closing Services                                                20,018                          8,243
                                                             ------------------             -------------------
          Total Mortgage Banking                                    205,458                        121,018
                                                             ------------------             -------------------

Diversified Businesses:
     Insurance                                                       25,672                         20,061
     Capital Markets                                                 20,058                          9,638
     Global Operations                                                1,247                            361
     Banking                                                          5,308                            (69)
     Other                                                             (700)                        (1,382)
                                                                                            -------------------
                                                             ------------------
          Total Diversified Businesses                               51,585                         28,609
                                                             ------------------             -------------------

Pre-tax Earnings                                                  $ 257,043                      $ 149,627
                                                             ==================             ===================

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

MORTGAGE BANKING SEGMENT

        The Mortgage Banking Segment is comprised of three distinct business sectors, Production, Servicing and Closing Services. These three sectors are well-defined elements of the Company’s mortgage banking operations and serve to provide balanced operating performance under varying business conditions.

Production Sector

         The Production Sector is comprised of four distribution channels: Consumer-direct lending through Countrywide's 383-branch retail system, telemarketing operations and the Internet (“Consumer Markets Division”); Full Spectrum Lending, Inc., a consumer-direct sub-prime lender with 51 branches; loans sourced through a network of over 15,000 mortgage brokers (“Wholesale Lending Division”); and correspondent lending, which buys loans from other financial institutions, such as banks, savings and loans, credit unions and insurance companies (“Correspondent Lending Division”).

         Total loan production by Division is summarized below.

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

               (Dollar amounts in millions)                                    Loan Production
                                                                              Three Months Ended
                                                                                 November 30,
- ------------------------------------------------------------ ----------------------------------------------------- -----------
                                                                   2001                             2000
                                                             ------------------             ----------------------
     Consumer Markets Division                                    $  12,809                       $  4,645
     Wholesale Lending Division                                      13,766                          5,218
     Correspondent Lending Division                                  15,081                          7,456
      Full Spectrum Lending, Inc.                                       620                            393
                                                             ------------------             ----------------------
     Total                                                         $ 42,276                       $ 17,712
                                                             ==================             ======================

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

         The factors which affect the relative volume of production among the divisions within the Production Sector include the price competitiveness of the various product offerings, the level of mortgage lending activity in each respective market and the success of the Company's sales and marketing efforts.

         The increase in pre-tax earnings of $312.5 million in the quarter ended November 30, 2001 as compared to the quarter ended November 30, 2000 was primarily attributable to greatly higher prime credit quality first mortgage loan production and margins driven largely by re-finances. These increases were partially offset by reduced sales of high-margin home equity loans and higher expenses as a result of the increased production.

Servicing Sector

         The Servicing Sector includes activities related to the mortgage servicing rights ("MSRs") associated with Countrywide's own portfolio and subservicing for other domestic financial institutions. Since the MSRs and other retained interests perform optimally in higher interest rate environments, earnings from the servicing sector act as a natural counter-balance against the production sector, which typically performs better in lower rate environments.

         The decrease in pre-tax earnings of $239.8 million in the quarter ended November 30, 2001 as compared to the quarter ended November 30, 2000 was primarily due to increased amortization and impairment of the MSRs, net of the servicing hedge; a reduction in custodial balance earnings due to a drop in short term rates; and higher servicing expenses driven by the growth in the servicing portfolio. In addition, impairment charges relating to residuals and other retained interests contributed to the decline in pre-tax earnings. These factors were partially offset by an increase in revenues generated from a larger servicing portfolio and a decline in interest expense resulting from a decrease in short term rates. As of November 30, 2001, the Company serviced $331.0 billion of loans (including $9.1 billion of loans subserviced for others), up from $281.5 billion (including $6.5 billion of loans subserviced for others) as of November 30, 2000, an 18% increase. The growth in the Company's servicing portfolio since November 30, 2000 was primarily the result of a strong increase in loan production volume, as well as certain acquisitions of bulk servicing rights. The growth in the servicing portfolio was partially offset by prepayments and scheduled principal amortization.

         During the quarter ended November 30, 2001, the annual prepayment rate of the Company's servicing portfolio was 32%, compared to 10% for the quarter ended November 30, 2000. In general, the prepayment rate is affected by the level of refinance activity, which in turn is driven primarily by the relative level of mortgage interest rates. The weighted average interest rate of the mortgage loans in the Company's servicing portfolio as of November 30, 2001 was 7.5% compared to 7.8% as of November 30, 2000.

Closing Services Sector

         The Closing Services Sector is comprised of Countrywide's LandSafe companies, which provide credit reports, appraisals, title reports and flood determinations to Countrywide's Production Sector as well as third parties. The increase in pre-tax earnings of $11.8 million in the quarter ended November 30, 2001 as compared to the quarter ended November 30, 2000 was primarily due to the significant increase in loan origination activity during the period.

DIVERSIFIED BUSINESSES

Insurance Segment

         The Insurance Segment activities include Balboa Life and Casualty, a national provider of property, life and liability insurance; Second Charter Reinsurance Company, a mortgage reinsurance company; and Countrywide Insurance Services, Inc., a national insurance agency offering a full menu of insurance products. The increase in pre-tax earnings of $5.6 million in the quarter ended November 30, 2001 as compared to the quarter ended November 30, 2000 was due to increased net earned premiums.

Capital Markets Segment

         The Capital Markets Segment activities include the operations of Countrywide Securities Corporation ("CSC"), a registered broker-dealer specializing in mortgage-related securities; and a manager of distressed real estate assets. The increase in pre-tax earnings of $10.4 million in the quarter ended November 30, 2001 as compared to the quarter ended November 30, 2000 was largely due to increased activity in the underwriting of mortgage backed securities as well as increased margins and profits from greatly increased trading volumes at CSC.

Global Operations Segment

         The Global Operations Segment primarily includes the operations of Global Home Loans, Countrywide's European mortgage banking affiliate, which provides loan application processing and servicing on behalf of third parties. The increase in pre-tax earnings of $0.9 million in the quarter ended November 30, 2001 as compared to quarter ended November 30, 2000 was attributable to increased volume.

Banking Segment

         The Banking Segment represents the operations of Treasury Bank, N.A. (acquired May 2001), as well as a separate mortgage warehouse lending division. The bank provides the Company with the increased ability to retain mortgage customers and diversify funding sources as well as enabling the insourcing of certain bank-related services. The increase in pre-tax earnings of $5.4 million in the quarter ended November 30, 2001 as compared to the quarter ended November 30, 2000 was primarily attributable to the growth and expansion of warehouse lending activities.

CONSOLIDATED EARNINGS PERFORMANCE

         Revenues for the quarter ended November 30, 2001 increased 64% to $862.6 million, up from $524.7 million for the quarter ended November 30, 2000. Net earnings increased 69% to $161.0 million for the quarter ended November 30, 2001, up from $95.4 million for the quarter ended November 30, 2000. The increase in revenues and net earnings for the quarter ended November 30, 2001 compared to the quarter ended November 30, 2000 was primarily attributable to increased earnings in the Production Sector due to increased loan production and improved margins and to improved earnings in the Closing Services Sector and the Capital Markets Segment. The increase was partially offset by a decline in earnings from the Loan Servicing Segment due to increased amortization and impairment of the MSRs net of servicing hedge and reduced earnings from other retained interests.

         The total volume of loans produced by the Company increased 139% to $42.3 billion for the quarter ended November 30, 2001, up from $17.7 billion for the quarter ended November 30, 2000. The increase in loan production was driven largely by an increase in refinance activity, although purchase loan activity also showed a significant increase.

         Total loan production by purpose and by interest rate type is summarized below.

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

               (Dollar amounts in millions)                                    Loan Production
                                                                              Three Months Ended
                                                                                 November 30,
- ------------------------------------------------------------ ----------------------------------------------------- -----------
                                                                   2001                             2000
                                                             ------------------             ----------------------
     Purchase                                                        $16,090                        $13,458
     Refinance                                                        26,186                          4,254
                                                             ------------------             ----------------------
     Total                                                           $42,276                        $17,712
                                                             ==================             ======================
                                                             ------------------             ----------------------

     Fixed Rate                                                      $37,161                        $15,823
     Adjustable Rate                                                   5,115                          1,889
                                                             ------------------             ----------------------
     Total                                                           $42,276                        $17,712
                                                             ==================             ======================

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

         Non-traditional loan production (which is included in the Company's total volume of loans produced) is summarized below.

- ------------------------------------------------------------ ----------------------------------------------------- -----------
                                                                              Non-Traditional
              (Dollar amounts in millions)                                    Loan Production
                                                                             Three Months Ended
                                                                                November 30,
- ------------------------------------------------------------ ----------------------------------------------------- -----------
                                                                  2001                             2000
                                                             ------------------             ----------------------
     Sub-prime                                                       $1,720                         $1,122
     Home Equity                                                      1,838                          1,243
                                                             ------------------             ----------------------
     Total                                                           $3,558                         $2,365
                                                             ==================             ======================

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

         Loan production revenue increased in the quarter ended November 30, 2001 as compared to the quarter ended November 30, 2000 due to increased loan production and improved margins on prime credit quality, first lien mortgages combined with increased trading activity in the Capital Markets Segment, partially offset by reduced sales of high-margin, home equity production. Sub-prime loans contributed $73.6 million to the gain on sale of loans in the quarter ended November 30, 2001 and $59.6 million in the quarter ended November 30, 2000. The sale of home equity loans contributed $5.1 million and $38.4 million to gain on sale of loans in the quarter ended November 30, 2001 and the quarter ended November 30, 2000, respectively. In general, loan production revenue is affected by numerous factors including the volume and mix of loans produced and sold, channel mix, loan pricing decisions, and changes in interest rates.

         Net interest income (interest earned net of interest charges) of $142.1 million for the quarter ended November 30, 2001 was up from net interest income of $1.8 million for the quarter ended November 30, 2000. Net interest income is principally a function of: (i) net interest income earned from the Company's mortgage loan inventory ($96.1 million and $16.5 million for the quarter ended November 30, 2001 and the quarter ended November 30, 2000, respectively); (ii) interest expense related to the Company's mortgage-related investments ($49.4 million and $93.3 million for the quarters ended November 30, 2001 and November 30, 2000, respectively); (iii) interest income earned from the custodial balances associated with the Company's servicing portfolio ($13.5 million and $64.5 million for the quarters ended November 30, 2001 and November 30, 2000, respectively); (iv) net interest earned on the Capital Markets net trading portfolio ($56.6 million and $6.9 million for the quarters ended November 30, 2001 and November 30, 2000, respectively) and (v) net interest earned from banking operations ($8.9 million and $0.5 million for the quarters ended November 30, 2001 and November 30 2000, respectively).

         The increase in net interest income from the mortgage loan inventory was primarily attributable to significantly higher inventory levels combined with an increased net earnings rate during the quarter ended November 30, 2001. The decrease in interest expense from mortgage-related investments resulted primarily from a decline in short-term rates, which more than offset an increase in the amounts financed. Although custodial balances increased due to increased payoff activity, interest earned on custodial balances decreased due to the decline in short term rates. In addition, the Company is obligated to pass through a portion of the payoff float benefit to the certain MBS holders at underlying security rates, which were significantly higher than the short-term rates earned by the Company. The increase in net interest earned on the Capital Markets net trading portfolio is due to increased trading activity and a relatively steep yield curve in the quarter ended November 30, 2001, resulting in increased average balances and improved margins. The increase in net interest margins from banking operations was primarily attributable to growth in warehouse lending activity.

         The Company recorded MSR amortization for the quarter ended November 30, 2001 totaling $268.0 million compared to $132.5 million for the quarter ended November 30, 2000. The Company recorded impairment of $828.6 million for the quarter ended November 30, 2001 compared to impairment of $132.9 million for the quarter November 30, 2000. The primary factors affecting the amount of amortization and impairment or impairment recovery of MSRs recorded in an accounting period are the level of prepayments during the period and the change, if any, in estimated future prepayments. To mitigate the effect on earnings of MSR impairment that may result from increased current and projected future prepayment activity, the Company acquires financial instruments, including derivative contracts, that increase in aggregate value when interest rates decline (the "Servicing Hedge"). The Company recognized net gains of $649.2 million and $103.9 million from the Servicing Hedge for the quarters ended November 30, 2001 and November 30, 2000, respectively.

         The financial instruments that comprised the Servicing Hedge included interest rate floors, principal only securities ("P/O Securities"), options on interest rate swaps ("Swaptions"), options on MBS, options on interest rate futures, interest rate swaps and interest rate caps. With respect to the floors, options on interest rate futures and MBS, caps and Swaptions, the Company is not exposed to loss beyond its initial outlay to acquire the hedge instruments plus any unrealized gains recognized to date. With respect to the interest rate swap contracts entered into by the Company as of November 30, 2001, the Company estimates that its maximum exposure to loss over the contractual terms is $343 million.

         Salaries and related expenses are summarized below for the quarters ended November 30, 2001 and 2000.

 ----- -------------------------------------- --- --- -------- -------------------------------------------------------------------- ------- --- ------ ------
       (Dollar amounts in thousands)                                     Quarter Ended November 30, 2001
                                                  --- -------- -------------------------------------------------------------------- ------- --- ------ ------
 ----- -------------------------------------- ---
                                                     Mortgage Banking         Diversified Businesses              Corporate
                                                                                                               Administration                 Total
 ----- -------------------------------------- --- ----------------------- --- ----------------------- --- ----------------------- --- -----------------------

       Base Salaries                                         $111,284                     $28,895                     $26,650                    $166,829

       Incentive Bonus                                        104,807                      19,649                       7,615                     132,071

       Payroll Taxes and Benefits                              19,637                       3,455                       9,069                      32,161
                                                  -----------------------     -----------------------     -----------------------     -----------------------
       Total Salaries and Related
             Expenses                                        $235,728                     $51,999                     $43,334                    $331,061
                                                  =======================     =======================     =======================     =======================

       Average Number of Employees                             12,390                       2,473                       1,874                      16,737

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

 ----- -------------------------------------- --- --- -------- -------------------------------------------------------------------- ------- --- ------ ------
       (Dollar amounts in thousands)                                     Quarter Ended November 30, 2000
                                                  --- -------- -------------------------------------------------------------------- ------- --- ------ ------
 ----- -------------------------------------- ---
                                                     Mortgage Banking         Diversified Businesses              Corporate
                                                                                                               Administration                 Total
 ----- -------------------------------------- --- ----------------------- --- ----------------------- --- ----------------------- --- -----------------------

       Base Salaries                                          $89,649                     $15,776                     $26,321                    $131,746

       Incentive Bonus                                         31,471                       9,527                       4,612                      45,610

       Payroll Taxes and Benefits                              13,406                       2,117                       4,053                      19,576
                                                  -----------------------     -----------------------     -----------------------     -----------------------
       Total Salaries and Related
             Expenses                                        $134,526                     $27,420                     $34,986                    $196,932
                                                  =======================     =======================     =======================     =======================

       Average Number of Employees                              9,125                       1,311                       1,648                      12,084

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

         The amount of salaries increased during the quarter ended November 30, 2001 as compared to the quarter ended November 30, 2000 primarily due to an increase within the Mortgage Banking sectors due to a significant increase in production volume and a larger servicing portfolio. In addition, increased activity in the Diversified Businesses, including consolidation of a previously non-consolidated European mortgage banking joint venture, contributed to the increase in salaries. Incentive bonuses earned during the quarter ended November 30, 2001 increased primarily due to an increase in production volume, additional commissioned sales personnel in the Production Sector and increased trading activity in the Capital Markets Segment.

         Occupancy and other office expenses for the quarter ended November 30, 2001 increased to $106.4 million from $67.7 million for the quarter ended November 30, 2000. This was primarily due to higher loan production combined with the growth in the Company's non-mortgage banking activities.

         Other operating expenses were $104.1 million for the quarter ended November 30, 2001 as compared to $66.0 million for the quarter ended November 30, 2000. This increase was primarily due to significantly higher loan production activity and a larger servicing portfolio combined with growth in the Insurance Segment.

         Insurance net losses are attributable to insurance claims in the Insurance Segment. Insurance losses were $47.0 million or 36% of Insurance Segment revenues, for the quarter ended November 30, 2001 as compared to $26.8 million and 30% of Insurance Segment revenues, for the quarter ended November 30, 2000. The level of losses recognized in a period is dependent on many factors, a primary driver being the occurrence of natural disasters.

         Marketing expenses for the quarter ended November 30, 2001 changed only slightly, with a decrease of 3% to $17.0 million as compared to $17.6 million for the quarter ended November 30, 2000.

Nine Months Ended November 30, 2001 Compared to Nine Months Ended November 30, 2000

OPERATING SEGMENT RESULTS

         The Company's pre-tax earnings by segment is summarized below.

- ------------------------------------------------------------ ----------------------------------------------------- -----------
                                                                              Nine Months Ended
               (Dollar amounts in thousands)                                     November 30,
- ------------------------------------------------------------ ----------------------------------------------------- -----------
                                                                   2001                            2000
                                                             ------------------             -------------------
Mortgage Banking:
     Production                                                   $ 797,286                      $ 115,228
     Servicing                                                     (303,849)                       204,422
     Closing Services                                                49,333                         22,589
                                                             ------------------             -------------------
          Total Mortgage Banking                                    542,770                        342,239
                                                             ------------------             -------------------

Diversified Businesses:
     Insurance                                                       70,634                         52,012
     Capital Markets                                                 68,823                         27,394
     Global Operations                                                4,247                          2,212
     Banking                                                          9,987                           (375)
     Other                                                           (4,102)                          (715)
                                                             ------------------             -------------------
          Total Diversified Businesses                              149,589                         80,528
                                                             ------------------             -------------------

Pre-tax Earnings                                                  $ 692,359                      $ 422,767
                                                             ==================             ===================

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

MORTGAGE BANKING SEGMENT

The Mortgage Banking Segment is comprised of three distinct business sectors, Production, Servicing and Closing Services. These three sectors are well-defined elements of the Company’s mortgage banking operations and serve to provide balanced operating performance under varying business conditions.

Production Sector

         The Production Sector is comprised of four distribution channels: Consumer Markets Division, Full Spectrum Lending, Inc., Wholesale Division and Correspondent Lending Division.

         Total loan production by Division is summarized below.

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

               (Dollar amounts in millions)                                    Loan Production
                                                                              Nine Months Ended
                                                                                 November 30,
- ------------------------------------------------------------ ----------------------------------------------------- -----------
                                                                   2001                             2000
                                                             ------------------             ----------------------
     Consumer Markets Division                                    $  31,876                      $  13,073
     Wholesale Lending Division                                      34,513                         13,636
     Correspondent Lending Division                                  38,436                         20,527
      Full Spectrum Lending, Inc.                                     1,594                          1,216
                                                             ------------------             ----------------------
     Total                                                        $ 106,419                       $ 48,452
                                                             ==================             ======================

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

         The increase in pre-tax earnings of $682.1 million for the nine months ended November 30, 2001 as compared to the nine months ended November 30, 2000 was primarily attributable to greatly higher prime credit quality first mortgage loan production and margins driven largely by re-finances. These increases were partially offset by higher expenses as a result of the increased production and reduced sales of high margin home equity loans.

Servicing Sector

         The Servicing Sector includes activities related to the mortgage servicing rights ("MSRs") associated with Countrywide's own portfolio and subservicing for other domestic financial institutions. Since the MSRs and other retained interests perform optimally in higher interest rate environments, earnings from the servicing sector act as a natural counter-balance against the production sector, which typically performs better in lower rate environments.

         The decrease in pre-tax earnings of $508.3 million for the nine months ended November 30, 2001 as compared to the nine months ended November 30, 2000 was primarily due to increased amortization and impairment of the MSRs, net of the servicing hedge; a reduction in custodial balance earnings due to a drop in short term rates; and higher servicing expenses driven by the growth in the servicing portfolio. In addition, impairment charges relating to residuals and other retained interests contributed to the decline in pre-tax earnings. These factors were partially offset by an increase in revenues generated from a larger servicing portfolio and a decline in interest expense resulting from a decrease in short term rates. As of November 30, 2001, the Company serviced $331.0 billion of loans (including $9.1 billion of loans subserviced for others), up from $281.5 billion (including $6.5 billion of loans subserviced for others) as of November 30, 2000, an 18% increase.

         During the nine months ended November 30, 2001, the annual prepayment rate of the Company's servicing portfolio was 30%, compared to 10% for the nine months ended November 30, 2000. In general, the prepayment rate is affected by the level of refinance activity, which in turn is driven primarily by the relative level of mortgage interest rates.

Closing Services Sector

         The Closing Services Sector is comprised of Countrywide's LandSafe companies, which provide credit reports, appraisals, title reports and flood determinations to Countrywide's production sector as well as third parties. The increase in pre-tax earnings of $26.7 million for the nine months ended November 30, 2001 as compared to the quarter ended November 30, 2000 was primarily due to the significant increase in loan origination activity during the period.

DIVERSIFIED BUSINESSES

Insurance Segment

         The Insurance Segment activities include Balboa Life and Casualty, a national provider of property, life and liability insurance; Second Charter Reinsurance Company, a mortgage reinsurance company; and Countrywide Insurance Services, Inc., a national insurance agency offering a full menu of insurance products. The increase in pre-tax earnings of $18.6 million for the nine months ended November 30, 2001 as compared to the nine months ended November 30, 2000 was due to increased net earned premiums.

Capital Markets Segment

         The Capital Markets Segment activities include the operations of Countrywide Securities Corporation ("CSC"), a registered broker-dealer specializing in mortgage-related securities; and a manager of distressed real estate assets. The increase in pre-tax earnings of $41.4 million for the nine months ended November 30, 2001 as compared to the nine months ended November 30, 2000 was largely due to increased activity in the underwriting of mortgage backed securities as well as increased margins and profits from greatly increased trading volumes at CSC.

Global Operations Segment

         The Global Operations Segment primarily includes the operations of Global Home Loans, Countrywide's European mortgage banking affiliate, which provides loan application processing and servicing on behalf of third parties. The increase in pre-tax earnings of $2.0 million in the nine months ended November 30, 2001 as compared to the nine months ended November 30, 2000 was attributable to increased volume.

Banking Segment

         The Banking Segment represents the operations of Treasury Bank, N.A., as well as a separate mortgage warehouse lending division. The bank provides the Company with the increased ability to retain mortgage customers and diversify funding sources as well as enabling the insourcing of certain bank-related services. The increase in pre-tax earnings of $10.4 million for the nine months ended November 30, 2001 as compared to the nine months ended November 30, 2000 was primarily attributable to the growth and expansion of warehouse lending activities.

CONSOLIDATED EARNINGS PERFORMANCE

         Revenues for the nine months ended November 30, 2001 increased 52% to $2,307.3 million, up from $1,520.7 million for the nine months ended November 30, 2000. Net earnings increased 61% to $433.3 million for the nine months ended November 30, 2001, up from $269.9 million for the nine months ended November 30, 2000. The increase in revenues and net earnings for the nine months ended November 30, 2001 compared to the nine months ended November 30, 2000 was primarily attributable to increased earnings in the Production Sector due to increased loan production and improved margins and to improved earnings in the Closing Services Sector and the Capital Markets Segment. The increase was partially offset by a decline in earnings from the Servicing Sector due to increased amortization and impairment of the MSRs net of servicing hedge and reduced earnings from other retained interests.

         The total volume of loans produced by the Company increased 120% to $106.4 billion for the nine months ended November 30, 2001, up from $48.5 billion for the nine months ended November 30, 2000. The increase in loan production was driven by a large increase in refinance activity, although purchase loan activity also showed a significant increase.

         Total loan production by purpose and by interest rate type is summarized below.

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

               (Dollar amounts in millions)                                    Loan Production
                                                                              Nine Months Ended
                                                                                 November 30,
- ------------------------------------------------------------ ----------------------------------------------------- -----------
                                                                   2001                             2000
                                                             ------------------             ----------------------
     Purchase                                                        $46,336                        $38,458
     Refinance                                                        60,083                          9,994
                                                             ------------------             ----------------------
     Total                                                          $106,419                        $48,452
                                                             ==================             ======================
                                                             ------------------             ----------------------

     Fixed Rate                                                      $93,541                        $40,693
     Adjustable Rate                                                  12,878                          7,759
                                                             ------------------             ----------------------
     Total                                                          $106,419                        $48,452
                                                             ==================             ======================

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

         Non-traditional loan production (which is included in the Company's total volume of loans produced) is summarized below.

- ------------------------------------------------------------ ----------------------------------------------------- -----------
                                                                              Non-Traditional
              (Dollar amounts in millions)                                    Loan Production
                                                                             Nine Months Ended
                                                                                November 30,
- ------------------------------------------------------------ ----------------------------------------------------- -----------
                                                                  2001                             2000
                                                             ------------------             ----------------------
     Sub-prime                                                       $4,778                         $3,954
     Home Equity                                                      4,927                          3,513
                                                             ------------------             ----------------------
     Total                                                           $9,705                         $7,467
                                                             ==================             ======================

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

         Loan production revenue increased for the nine months ended November 30, 2001 as compared to the nine months ended November 30, 2000 due to increased loan production and improved margins on prime credit quality, first lien mortgages combined with increased trading activity in the Capital Markets Segment, partially offset by reduced sales of high-margin, home equity production. Sub-prime loans contributed $197.7 million to the gain on sale of loans for the nine months ended November 30, 2001 and $182.6 million for the nine months ended November 30, 2000. The sale of home equity loans contributed $52.7 million and $88.4 million to gain on sale of loans for the nine months ended November 30, 2001 and the nine months ended November 30, 2000, respectively. In general, loan production revenue is affected by numerous factors including the volume and mix of loans produced and sold, channel mix, loan pricing decisions, and changes in interest rates.

         Net interest income (interest earned net of interest charges) of $297.2 million for the nine months ended November 30, 2001 was up from net interest income of $10.4 million for the nine months ended November 30, 2000. Net interest income is principally a function of: (i) net interest income earned from the Company's mortgage loan inventory ($217.1 million and $68.3 million for the nine months ended November 30, 2001 and the nine months ended November 30, 2000, respectively); (ii) interest expense related to the Company's mortgage-related investments ($182.8 million and $273.1 million for the nine months ended November 30, 2001 and November 30, 2000, respectively); (iii) interest income earned from the custodial balances associated with the Company's servicing portfolio ($110.3 million and $177.3 million for the nine months ended November 30, 2001 and November 30, 2000, respectively); (iv) net interest earned on the CSC's net trading portfolio ($101.2 million and $17.7 million for the nine months ended November 30, 2001 and November 30, 2000, respectively); and (v) net interest earned from banking operations ($16.9 million and $1.2 million for the nine months ended November 30, 2001 and November 30 2000, respectively).

         The increase in net interest income from the mortgage loan inventory was primarily attributable to significantly higher inventory levels combined with an increased net earnings rate during the nine months ended November 30, 2001. The decrease in interest expense related to mortgage-related investments resulted primarily from a sharp decline in short-term rates, which more than offset an increase in amounts financed. Interest earned on custodial accounts decreased even though the balance of custodial accounts increased due to increased prepayment activity. These increased balances were more than offset by the decline in short-term rates. In addition, the Company is obligated to pass through a portion of the payoff float benefit to certain MBS holders at underlying security rates, which were significantly higher than the short term rates earned by the Company. The increase in net interest earned on the Capital Markets net trading portfolio is due to increased trading activity and a relatively steep yield curve in the nine months ended November 30, 2001, resulting in increased average balances and improved margins. The increase in net interest margins from banking operations was primarily attributable to growth in warehouse lending activity.

         The Company recorded MSR amortization for the nine months ended November 30, 2001 totaling $729.8 million compared to $356.8 million for the nine months ended November 30, 2000. The Company recorded impairment of $1,453.4 million for the nine months ended November 30, 2001 compared to impairment of $156.5 million for the nine months ended November 30, 2000. The primary factors affecting the amount of amortization and impairment or impairment recovery of MSRs recorded in an accounting period are the level of prepayments during the period and the change, if any, in estimated future prepayments. To mitigate the effect on earnings of MSR impairment that may result from increased current and projected future prepayment activity, the Company acquires financial instruments, including derivative contracts, that increase in aggregate value when interest rates decline (the "Servicing Hedge"). The Company recognized a net gain of $1,095.9 million and a net gain of $99.5 million from the Servicing Hedge for the nine month periods ended November 30, 2001 and November 30, 2000, respectively.

         Salaries and related expenses are summarized below for the nine months ended November 30, 2001 and 2000.

 ----- -------------------------------------- --- --- -------- -------------------------------------------------------------------- ------- --- ------ ------
       (Dollar amounts in thousands)                                   Nine Months Ended November 30, 2001
                                                  --- -------- -------------------------------------------------------------------- ------- --- ------ ------
 ----- -------------------------------------- ---
                                                     Mortgage Banking         Diversified Businesses              Corporate
                                                                                                               Administration                 Total
 ----- -------------------------------------- --- ----------------------- --- ----------------------- --- ----------------------- --- -----------------------

       Base Salaries                                         $290,010                     $84,973                     $77,455                    $452,438

       Incentive Bonus                                        255,967                      57,087                      21,418                     334,472

       Payroll Taxes and Benefits                              55,421                      10,271                      21,988                      87,680
                                                  -----------------------     -----------------------     -----------------------     -----------------------
       Total Salaries and Related
             Expenses                                        $601,398                    $152,331                    $120,861                    $874,590
                                                  =======================     =======================     =======================     =======================

       Average Number of Employees                             11,037                       1,912                       1,773                      14,722

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

 ----- -------------------------------------- --- --- -------- -------------------------------------------------------------------- ------- --- ------ ------
       (Dollar amounts in thousands)                                   Nine Months Ended November 30, 2000
                                                  --- -------- -------------------------------------------------------------------- ------- --- ------ ------
 ----- -------------------------------------- ---
                                                     Mortgage Banking         Diversified Businesses              Corporate
                                                                                                               Administration                 Total
 ----- -------------------------------------- --- ----------------------- --- ----------------------- --- ----------------------- --- -----------------------

       Base Salaries                                         $254,360                     $43,600                     $79,472                    $377,432

       Incentive Bonus                                         81,592                      26,438                      13,454                     121,484

       Payroll Taxes and Benefits                              40,325                       5,849                      12,275                      58,449
                                                  -----------------------     -----------------------     -----------------------     -----------------------
       Total Salaries and Related
             Expenses                                        $376,277                     $75,887                    $105,201                    $557,365
                                                  =======================     =======================     =======================     =======================

       Average Number of Employees                              8,742                       1,239                       1,624                      11,605

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

         The amount of salaries increased during the nine months ended November 30, 2001 as compared to the nine months ended November 30, 2000 primarily due to an increase within the Mortgage Banking sectors due to a significant increase in production volume and a larger servicing portfolio. In addition, increased activity in the Diversified Businesses, including consolidation of a previously non-consolidated European mortgage banking joint venture, contributed to the increase in salaries. Incentive bonuses earned during the nine months ended November 30, 2001 increased primarily due to an increase in production volume, additional commissioned sales personnel in the Production Sector and increased trading activity in the Capital Markets Segment.

         Occupancy and other office expenses for the nine months ended November 30, 2001 increased 43% to $291.0 million from $204.0 million for the nine months ended November 30, 2000. This was primarily due to higher loan production combined with the growth in the Company's non-mortgage banking activities.

         Other operating expenses were $283.2 million for the nine months ended November 30, 2001 as compared to $201.1 million for the nine months ended November 30, 2000. The increase was primarily due to the higher loan production and a larger servicing portfolio combined with growth in the Insurance Segment.

         Insurance net losses are attributable to insurance claims in the Insurance Segment. Insurance losses were $118.0 million or 33% of Insurance revenues, for the nine months ended November 30, 2001 as compared to $78.3 million and 31.0% of Insurance revenues, for the nine months ended November 30, 2000. The level of losses recognized in a period is dependent on many factors, a primary driver being the occurrence of natural disasters.

         Marketing expenses for the nine months ended November 30, 2001 decreased 16% to $48.2 million as compared to $57.3 million for the nine months ended November 30, 2000, the bulk of the reduction coming from the Production Sector.

QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK

         The primary market risk facing the Company is interest rate risk. From an enterprise perspective, the Company manages this risk by striving to balance its loan production and loan servicing operations, which are counter cyclical in nature. In addition, the Company utilizes various financial instruments, including derivatives contracts, to manage the interest rate risk related specifically to its committed pipeline, mortgage loan inventory and MBS held for sale, MSRs, mortgage-backed securities retained in securitizations, trading securities and debt securities. The overall objective of the Company's interest rate risk management policies is to offset changes in the values of these items resulting from changes in interest rates.

         As part of its interest rate risk management process, the Company performs various sensitivity analyses that quantify the net financial impact of changes in interest rates on its interest rate-sensitive assets, liabilities and commitments. These analyses incorporate scenarios including selected hypothetical (instantaneous) parallel and non-parallel shifts in the yield curve. Various modeling techniques are employed to value the financial instruments. For mortgages, MBS and MBS forward contracts and CMOs, an option-adjusted spread ("OAS") model is used. The primary assumptions used in this model are the implied market volatility of interest rates and prepayment speeds. For options and interest rate floors, an option-pricing model is used. The primary assumption used in this model is implied market volatility of interest rates. MSRs and residual interests are valued using discounted cash flow models. The primary assumptions used in these models are prepayment rates, discount rates and credit losses.

         Utilizing the sensitivity analyses described above, as of November 30 2001, the Company estimates that a permanent 0.50% reduction in interest rates, all else being constant, would result in a $81.7 million after-tax loss related to its other financial instruments and MSRs and there would be no loss related to its trading securities. As of November 30, 2001, the Company estimates that this after-tax loss of $81.7 million is the largest such loss that would occur within the range of reasonably possible interest rate changes. These sensitivity analyses are limited by the fact that they are performed at a particular point in time, are subject to the accuracy of various assumptions used, including prepayment forecasts, and do not incorporate other factors that would impact the Company's overall financial performance in such a scenario. Consequently, the preceding estimates should not be viewed as a forecast.

         An additional, albeit less significant, market risk facing the Company is foreign currency risk. The Company has issued foreign currency-denominated medium-term notes. The Company manages the foreign currency risk associated with such medium-term notes by entering into currency swaps. The terms of the currency swaps effectively translate the foreign currency denominated medium-term notes into U.S. dollars, thereby eliminating the associated foreign currency risk (subject to the performance of the various counterparties to the currency swaps). As a result, potential changes in the exchange rates of foreign currencies denominating such medium-term notes would not have a net financial impact on future earnings, fair values or cash flows.

INFLATION

         Inflation affects the Company most significantly in the areas of Mortgage Banking and Capital Markets. Interest rates normally increase during periods of high inflation and decrease during periods of low inflation. Historically, as interest rates increase, loan production decreases, particularly from loan refinancings. Although in an environment of gradual interest rate increases, purchase activity may actually be stimulated by an improving economy or the anticipation of increasing real estate values. In such periods of reduced loan production, production margins may decline due to increased competition resulting from overcapacity in the market. In a higher interest rate environment, loan servicing earnings are enhanced because prepayment rates tend to slow down thereby extending the average life of the Company's servicing portfolio and reducing amortization and impairment of the MSRs, and because the rate of interest earned from the custodial balances tends to increase. Conversely, as interest rates decline, loan production, particularly from loan refinancings, increases. However, during such periods, prepayment rates tend to accelerate (principally on the portion of the portfolio having a note rate higher than the prevailing mortgage rates), thereby decreasing the average life of the Company's servicing portfolio and adversely impacting its loan servicing earnings primarily due to increased amortization and impairment of the MSRs, and decreased earnings from residual investments. The Servicing Hedge is designed to mitigate the impact of changing interest rates on loan servicing earnings.

SEASONALITY

         The mortgage banking industry is generally subject to seasonal trends. These trends reflect the general national pattern of sales and resales of homes, although refinancings tend to be less seasonal and more closely related to changes in mortgage rates. Sales and resales of homes typically peak during the spring and summer seasons and decline to lower levels from mid-November through February. In addition, delinquency rates typically rise in the winter months, which results in higher servicing costs. However, late charge income has historically been sufficient to offset such incremental expenses.

LIQUIDITY AND CAPITAL RESOURCES

         The Company is dependent upon the secondary mortgage market as the principal source of permanent funding for its loan production. The Company's principal on balance sheet financing needs related to its Mortgage Banking Segment are the financing of its mortgage loan inventory, investment in MSRs and available-for-sale securities. To meet these needs, the Company currently utilizes commercial paper supported by revolving credit facilities, medium-term notes, MBS repurchase agreements, subordinated notes, pre-sale funding facilities, redeemable capital trust pass-through securities, convertible debentures and cash flow from operations. In addition, in the past the Company has utilized whole loan repurchase agreements, servicing-secured bank facilities, private placements of unsecured notes and other financings, direct borrowings from revolving credit facilities and public offerings of common and preferred stock. The Company strives to maintain sufficient liquidity in the form of unused, committed lines of credit to meet anticipated short-term cash requirements as well as to provide for potential sudden increases in business activity driven by changes in the market environment.

         Certain of the debt obligations of CCI and CHL contain various provisions that could affect the ability of CCI and CHL to pay dividends and remain in compliance with such obligations. These provisions include requirements concerning net worth and other financial covenants. These provisions have not had, and are not expected to have, an adverse impact on the ability of CCI and CHL to pay dividends.

         The principal financing needs of CCM consist of the financing of its inventory of securities and mortgage loans and its underwriting activities. Its securities inventory is financed primarily through repurchase agreements. CCM also has access to a $200 million secured bank loan facility and a secured lending facility with CHL.

         The primary cash needs for the Insurance Segment are to meet short-term and long-term obligations to policyholders (i.e., payment of policy benefits) costs of acquiring new business (principally commissions) and the purchases of new investments. To meet these needs, Balboa currently utilizes cash flow provided from operations as well as through partial liquidation of its investment portfolio from time to time.

         The Company continues to investigate and pursue alternative and supplementary methods to finance its operations through the public and private capital markets. These may include such methods as mortgage loan sale transactions designed to expand the Company's financial capacity and reduce its cost of capital and the additional securitization of servicing income cash flows.

         In connection with its derivative contracts, the Company may be required to deposit cash or certain government securities or obtain letters of credit to meet margin requirements. The Company considers such potential margin requirements in its overall liquidity management.

         In the course of the Company's mortgage banking operations, the Company sells the mortgage loans it originates and purchases to investors but generally retains the right to service the loans, thereby increasing the Company's investment in MSRs. The Company views the sale of loans on a servicing-retained basis in part as an investment vehicle. Significant unanticipated prepayments in the Company's servicing portfolio could have a material adverse effect on the Company's future operating results and liquidity.

Cash Flows

         Operating Activities. In the nine months ended November 30, 2001, the Company's operating activities used cash of approximately $7.5 billion on a short-term basis primarily to support an increase in mortgage loan inventory, trading securities and securities purchased under agreements to resale. In the nine months ended November 30, 2000, operating activities used cash of approximately $3.8 billion.

         Investing Activities. The primary investing activities for which cash was used by the Company were the investment in MSRs and investments in available-for-sale securities. Net cash used by investing activities was $2.7 billion for the nine months ended November 30, 2001 and $0.3 billion for the nine months ended November 30, 2000.

         Financing Activities. Net cash provided by financing activities amounted to $10.3 billion for the nine months ended November 30, 2001 and $4.2 billion for the nine months ended November 30, 2000. The increase in cash flow from financing activities was primarily used to fund the change in the Company’s trading securities, increase in mortgage loan inventory, investment in MSRs and investments in available-for-sale securities.

PROSPECTIVE TRENDS

Applications and Pipeline of Loans in Process

         For the month ended December 31, 2001, the Company received new loan applications at an average daily rate of $797 million. As of December 31, 2001, the Company's pipeline of loans in process was $22.1 billion. This compares to a daily application rate for the month ended December 31, 2000 of $422 million and a pipeline of loans in process as of December 31, 2000 of $9.9 billion. The size of the pipeline is generally an indication of the level of near-term future fundings, as historically between 43% and 77% of the pipeline of loans in process has funded. In addition, the Company's LOCK `N SHOP(R)Pipeline as of December 31, 2001 was $2.8 billion and as of December 31, 2000 was $2.2 billion. Future application levels and loan fundings are dependent on numerous factors, including the level of demand for mortgage loans, the level of competition in the market, the direction of mortgage rates, seasonal factors and general economic conditions.

Market Factors

         Loan production increased 139% from the quarter ended November 30, 2000 to the quarter ended November 30, 2001. This increase was primarily due to the fact that mortgage interest rates were significantly lower in the quarter ended November 30, 2001, resulting in a very strong refinance mortgage market. Additionally, home purchase activity was somewhat stronger in the quarter ended November 30, 2001, than in the quarter ended November 30, 2000.

         The prepayment rate in the servicing portfolio increased from 10% for the quarter ended November 30, 2000 to 32% for the quarter ended November 30, 2001.

         The Company's California mortgage loan production (as measured by principal balance) constituted 25% and 23% of its total production during the quarters ended November 30, 2001 and November 30, 2000, respectively. Some regions in which the Company operates have experienced slower economic growth, and real estate financing activity in these regions has been impacted negatively. The Company has been very successful in the diversification of its mortgage banking activities on a geographic basis so as to mitigate such effects.

         The delinquency rate in the Company's servicing portfolio, (excluding loans subserviced for others and GNMA rewarehouse loans sold into a third party-owned conduit), increased to 4.92% at November 30, 2001 from 4.58% as of November 30, 2000. This increase was primarily the result of changes in portfolio mix and aging. Sub-prime loans (which tend to experience higher delinquency rates than prime loans) represented approximately 6% of the total portfolio as of November 30, 2001, up from 5% as of November 30, 2000. In addition, the weighted average age of the FHA and VA loans in the portfolio increased to 38 months at November 30, 2001 from 34 months in November 30, 2000. Delinquency rates tend to increase as loans age, reaching a peak at three to five years of age. Related late charge income has historically been sufficient to offset incremental servicing expenses resulting from increased loan delinquencies.

         The percentage of loans in the Company's servicing portfolio, excluding loans subserviced for others and GNMA rewarehouse loans sold into a third party-owned conduit, that are in foreclosure increased to 0.56% as of November 30, 2001 from 0.43% as of November 30, 2000. Because the Company services substantially all conventional loans on a non-recourse basis, related credit losses are generally the responsibility of the investor or insurer and not the Company. While the Company does not generally retain credit risk with respect to the prime credit quality first mortgage loans it sells, it does have potential liability under representations and warranties made to purchasers and insurers of the loans. In the event of a breach of these representations and warranties, the Company may be required to repurchase a mortgage loan and any subsequent loss on the mortgage loan may be borne by the Company. Similarly, government loans serviced by the Company (19% of the Company's servicing portfolio as of November 30, 2001) are insured by the Federal Housing Administration ("FHA") or partially guaranteed against loss by the Department of Veterans Affairs ("VA"). The Company is exposed to credit losses to the extent that the partial guarantee provided by the VA is inadequate to cover the total credit losses incurred. For the nine months ended November 30, 2001, the Company experienced losses in excess of the VA guaranty of approximately $2.2 million. The Company retains credit risk on the home equity and sub-prime loans it securitizes, through retention of a subordinated interest or through a corporate guarantee of losses up to a negotiated maximum amount. As of November 30, 2001, the Company had investments in such subordinated interests amounting to $428.9 million, net of imbedded credit loss reserves, and had additional reserves amounting to $101.4 million related to the corporate guarantees.

Servicing Hedge

         As previously discussed, the Company's Servicing Hedge is designed to protect the value of its investment in MSRs from the effects of increased prepayment activity that generally results from declining interest rates. In periods of increasing interest rates, the value of the Servicing Hedge generally declines and the value of MSRs generally increases. The historical correlation of the Servicing Hedge and the MSRs has been very high. However, given the complexity and uncertainty inherent in hedging MSRs, there can be no assurance that future results will match the historical performance of the Servicing Hedge.

Implementation of New Accounting Standards

         The Company adopted FAS 133 on March 1, 2001. At the date of adoption, the Company recorded certain transition adjustments as required by FAS 133. There was no impact on net income as a result of such transition adjustments. However, such adjustments resulted in the following impact on the Company's balance sheet (in millions).

     Decrease in fair value of derivatives classified as assets                                                  $  (93.7)
     Increase in fair value of derivatives classified as liabilities                                              $(107.2)
     Decrease in book value of hedged borrowings                                                                  $ 107.2
     Increase in book value of MSRs                                                                              $   81.7
     Increase in book value of inventory and other assets                                                        $   12.0

        In November 1999, the Emerging Issues Task Force (“EITF”) released Issue No. 99-20, titled “Recognition of Interest Income and Impairment on Purchased and Retained Interests in Securitized Financial Assets.” EITF 99-20 is effective for quarters beginning after March 15, 2001. Under the guidelines of EITF 99-20, the accounting treatment of interest income and impairment of beneficial interests in securitization transactions is modified such that beneficial interests which are determined to have an other-than-temporary impairment are required to be written down to fair value. The Company adopted EITF 99-20 for the fiscal quarter ended August 31, 2001 and there was no material impact on the Company’s financial statements.

        In September 2000, the FASB issued Statement No. 140 (FAS 140), Accounting for the Transfers and Servicing of Financial Assets and Extinguishments of Liabilities, which replaces FAS 125 (of the same title). FAS 140 revises certain standards in the accounting for securitizations and other transfers of financial assets and collateral, and requires some disclosures relating to securitization transactions and collateral, but it carries over most of FAS 125‘s provisions. The collateral and disclosure provisions of FAS 140 were included in the February 28, 2001 financial statements. All other provisions of this Statement were adopted on April 1, 2001, as required by the statement. The adoption of this statement did not have a material impact on the Company’s financial statements.

        In June 2001, the FASB issued Statement No. 141 (FAS 141), titled “Business Combinations.” FAS 141 addresses financial accounting and reporting for business combinations and supercedes previously issued authoritative literature on the topic, including APB 16. FAS 141 requires that all business combinations initiated after June 30, 2001 be accounted for under the purchase method of accounting. The use of the pooling-of-interests method will no longer be allowed. FAS 141 also provides guidance as to how the purchase method is to be applied. Implementation of FAS 141 is not expected to have a material impact on the Company’s financial statements.

         In June 2001, the FASB issued Statement No. 142 (FAS 142), titled "Goodwill and Other Intangibles." Effective January 1, 2002, FAS 142 eliminates the amortization of goodwill and certain other intangible assets. These assets will be reviewed at least annually and assessed for impairment. Implementation of FAS 142 is not expected to have a material impact on the Company’s financial statements.

        In August of 2001, the FASB issued Statement of Financial Accounting Standards No. 144, “Accounting for the Impairment or Disposal of Long-Lived Assets” (“FAS 144”). FAS 144 retains the existing requirements to recognize and measure the impairment of long-lived assets to be held and used or to be disposed of by sale. However, FAS 144 makes changes to the scope and certain measurement requirements of existing accounting guidance. FAS 144 also changes the requirements relating to reporting the effects of a disposal or discontinuation of a segment of a business. The adoption of this statement is not expected to have a significant impact on the financial condition or results of operations of the Company.

PART II. OTHER INFORMATION

Item 6. Exhibits

(a) Exhibits

4.29 Note Deed Poll, dated October 11, 2001, by CHL in favor of each person who is from time to time an Australian dollar denominated Noteholder.

+10.7.4 First Amendment, effective January 1, 2002, to the Deferred Compensation Plan Amended and Restated effective March 1, 2000.

+10.8.9 Short Term Facility Extension Amendment, dated as of the 19th day of September, 2001, by and among CHL, The Company, The Short Term Lenders Under (and as that term is defined in) the Revolving Credit Agreement, and Bankers Trust Company, as Credit Agent (in such capacity, the “Credit Agent”).

10.8.10 Short Term Facility Extension Amendment, dated as of the 15th day of October, 2001, by and among CHL, the Company, the Short Term Lenders Under (and as that term is defined in) the Revolving Credit Agreement, and Bankers Trust Company, as Credit Agent (in such capacity, the “Credit Agent”).

10.8.11 Revolving Credit Agreement, dated as of December 17, 2001, by and among CHL and Bank Of America, N.A., as Managing Administrative Agent, Bank Of America, N.A. and JP Morgan Chase Bank, as the Administrative Agents, The Bank Of New York, as the Documentation Agent, Bank One, N.A. and Deutsche Bank AG, as the Co-Syndication Agents, the lenders party thereto and Banc of America Securities LLC and JP Morgan Securities, Inc., as Co-Arrangers.

+10.23.4 Third Amendment, effective January 1, 2002, to the Company's Supplemental Executive Retirement Plan.

12.1 Computation of the Ratio of Earnings to Fixed Charges.

+ Constitutes a management contract or compensatory plan or arrangement.

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

COUNTRYWIDE CREDIT INDUSTRIES, INC.
(Registrant)

DATE:      January 14, 2002    /s/ Stanford L. Kurland
----------------------------------------------------
Executive Managing Director and
Chief Operating Officer

DATE:      January 14, 2002    /s/ Thomas K. McLaughlin
----------------------------------------------------
Senior Managing Director and Chief Financial Officer

EX-4

Note Deed Poll

Date: 11 October 2001

By: Countrywide Home Loans, Inc. a company incorporated with limited liability in the State of New York of 4500 Park Granada, Calabasas, California 91302, United States of America ("Issuer")

In favour of: Each person who is from time to time a Noteholder (as defined below).

Recitals: A. The Issuer proposes to issue Notes from time to time under the Programme (as defined below).

B. The Registered Notes will be issued in registered form by inscription in the Register. Bearer Notes will be issued in definitive bearer form.

Operative provisions:

1   Interpretation

Terms and Conditions

        1.1   In this deed, Terms and Conditions means, in relation to a Note, the terms and conditions applicable to such Note set out in schedule 1, as amended, supplemented or replaced by the relevant Pricing Supplement.

Definitions

        1.2   In this deed, capitalised terms which are not defined in this clause 1 have the meaning given to them in the Terms and Conditions.

2 The Registered Notes

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Creation of Registered Notes

        2.1   The Registered Notes will, for New South Wales state and Australian federal law purposes, initially be issued in registered form by inscription in the Register.

         2.2   The obligations of the Issuer under the Registered Notes are constituted by, and specified in, this deed poll.

Form of Notes

        2.3   Each Tranche of Registered Notes and, for the purposes of that Tranche of Registered Notes only, this deed poll, is initially in temporary form and will be converted to permanent form on or after the Exchange Date upon and to the extent of delivery to the Paying Agent of:

        (a)   a certificate or certificates, issued by Austraclear and dated not earlier than the Exchange Date, in substantially the form set out in Appendix 1, which certificate or certificates are based upon a written certification or certifications in substantially the form set out in Appendix 2 received by Austraclear or the Paying Agent on its behalf, by facsimile or electronic transmission from the relevant Austraclear Participants; or

        (b)   where the Tranche of Registered Notes is not settled through the Austraclear System, a certificate or certificates in substantially the form set out in Appendix 2 by facsimile or electronic transmission from the relevant Noteholder,

         in relation to the Registered Notes to be converted to permanent form.

         The delivery to the Paying Agent by Austraclear of any certificate referred to above may be relied upon by the Issuer and the Paying Agent as conclusive evidence that a corresponding certification or certifications has or have been delivered to Austraclear or the Paying Agent by such Austraclear Participants.

Title passes by registration

        2.4   This deed poll is evidence of entitlement only. Title to any Registered Note passes only on due registration in the Register maintained by the Registrar, and only the duly registered Noteholder is entitled to payment in respect of that Registered Note.

Undertaking to pay

        2.5   The Issuer undertakes with each Noteholder of a Registered Note to duly and punctually pay the principal of, any premium and/or interest on each Registered Note held by the Noteholder in accordance with the Terms and Conditions and otherwise to comply with the Terms and Conditions.

Appointment of Registrar

         2.6   The Issuer agrees to appoint the Registrar as registrar under the Agency Services Agreement.

Appointment of Paying Agent

        2.7   The Issuer agrees to appoint the Paying Agent under the Agency Services Agreement as Paying Agent in relation to the Registered Notes and to perform certain functions in relation to the Bearer Notes.

3   Rights and obligations of Noteholders

Benefit and entitlement

        3.1   This deed is executed as a deed poll. Accordingly, each Noteholder of a Registered Note has the benefit of, and is entitled to enforce, this deed poll against the Issuer even though it is not a party to, or is not in existence at the time of execution and delivery of, this deed poll.

Rights independent

        3.2   Each Noteholder of a Registered Note may enforce its rights under this deed poll independently from each other Noteholder of a Registered Note.

Noteholders bound

        3.3   Each Noteholder of a Registered Note and any person claiming through or under a Noteholder is bound by this deed poll. The Registered Notes will be issued subject to, and on the basis that each Noteholder is deemed to have notice of, and be bound by, this deed poll, the Information Memorandum, the Terms and Conditions, the Agency Services Agreement and any other arrangements concerning the Registered Notes as are applicable to Noteholders of Registered Notes as specified in the Pricing Supplement.

Payments of interest

        3.4   Payments of interest on Registered Notes will be made only on Registered Notes that have converted to permanent form in accordance with clause 2.3 of this deed.

Direction to hold Deed Poll for Registered Notes

        3.5   Each Noteholder of a Registered Note is taken to have irrevocably nominated and authorised the Registrar to hold this deed poll in New South Wales (or such other place as the Issuer and the Registrar agree) on its behalf.

        3.6   The Issuer acknowledges the right of every Noteholder to the production of this deed poll in accordance with clause 4.9 of the Agency Services Agreement.

4   Governing law, jurisdiction and service of process

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Governing law

         4.1   This deed poll is governed by the law in force in New South Wales.

Submission to jurisdiction

        4.2   The Issuer irrevocably and unconditionally submits to the non-exclusive jurisdiction of the courts of New South Wales and courts of appeal from them in relation to any action (including, without limitation, any writ of summons or other originating process or any third or other party notice) arising out of or in relation to the Notes. The Issuer waives any right it has to object to an action being brought in those courts, to claim that the action has been brought in an inconvenient forum, or to claim that those courts do not have jurisdiction.

Service of process

        4.3   Without preventing any other mode of service, any document in an action (including, without limitation, any writ of summons or other originating process or any third or other party notice) arising out of or in relation to the Notes may be served on the Issuer by being left for the Issuer with its process agent referred to in clause 4.4.

Process agent

        4.4   The Issuer appoints Dabserv Corporate Services Pty Ltd (ABN 73 001 824 111) currently c/- Mallesons Stephen Jaques, Governor Phillip Tower, 1 Farrer Place, Sydney, NSW 2000, Australia to receive any document referred to in clause 4.3. If for any reason that person ceases to be able to act as such, the Issuer must immediately appoint another person with an office located in the Commonwealth of Australia to receive any such document and promptly notify Noteholders of such appointment.

EXECUTED as a deed poll by the Issuer.

Schedule 1     Terms and Conditions of the Notes

The following are the terms and conditions of the Notes which, as supplemented, modified or replaced in relation to any Series of Notes by the relevant Pricing Supplement, will be applicable to each Series of Notes.

Each Tranche of Notes will be the subject of a Pricing Supplement. References in the terms and conditions to a Pricing Supplement are references to the Pricing Supplement applicable to the relevant Tranche of Notes.

Each Noteholder and any person claiming through or under a Noteholder is deemed to have notice of and is bound by these terms and conditions, the Note Deed Poll, the Information Memorandum (including any documents incorporated by reference in it), the Agency Services Agreement, the relevant Pricing Supplement and the Guarantee. Copies of each of these documents are available for inspection by the holder of any Note of such Tranche at the offices of the Programme Manager and the Registrar at their respective addresses specified in the Information Memorandum.

1  Interpretation

         Definitions

        1.1   The following words have these meanings in these terms and conditions unless the contrary intention appears:

Agency Services Agreement means the agreement entitled “Agency Services Agreement” dated on or about 11 October 2001 between the Issuer, the Registrar and the Paying Agent and any amendment, supplement or replacement of it.

Applicable Business Day Convention means the Business Day Convention specified in the relevant Pricing Supplement as applicable to any date in respect of the Note or, if none is specified, the Applicable Business Day Convention for such purpose is the Following Business Day Convention. Different Business Day Conventions may apply, or be specified in relation to the Interest Payment Dates and any other date or dates in respect of any Notes.

Auditors means the auditors for the time being of the Issuer or, as the case may be, the Guarantor or, in the event of their being unable or unwilling promptly to carry out any action requested of them pursuant to the provisions of these terms and conditions, such other firm of independent accountants as may be for the purposes of these terms and conditions.

Austraclear means Austraclear Limited (ABN 94 002 060 773).

Austraclear Participant means, in relation to a Registered Note lodged in the Austraclear System, a person in whose Security Record (as defined in the Austraclear Regulations) that Registered Note is recorded from time to time.

Austraclear Regulations means the regulations known as the “Regulations and Operating Manual” established by Austraclear to govern the use of the Austraclear System (as amended and replaced from time to time).

Austraclear System means the system operated by Austraclear for holding securities and electronic recording and settling of transactions in those securities between members of that system.

Bearer Exchange Notice means a notice in substantially the form set out in schedule 6 to the Note Deed Poll or such other form provided by the Paying Agent.

Bearer Notes means any Note substantially in the form set out in schedule 3 to the Note Deed Poll which is payable to bearer and is in definitive form and, where the context so requires, includes Coupons and Talons relating to such Bearer Note.

Business Day means:

(a)   a day (other than a Saturday, Sunday or public holiday) on which commercial banks are open for general business (including dealing in foreign exchange and foreign currency deposits) in the place specified in the relevant Pricing Supplement, or, if no such place is specified, Sydney; and

(b)   if a Note is to be issued or a payment in respect of a Note is to be made on that day, a day on which the Austraclear System is operating.

Business Day Convention means a convention for adjusting any date if it would otherwise fall on a day that is not a Business Day and the following Business Day Conventions, where specified in the relevant Pricing Supplement in relation to any date applicable to any Note, have the following meanings:

(a)  Floating Rate Convention means that the date is postponed to the next following day which is a Business Day unless that day falls in the next calendar month, in which event:

         (A)   such date is brought forward to the first preceding day that is a Business Day; and

         (B) each subsequent Interest Payment Date is the last Business Day in the month which falls the number of months or other period specified as the Interest Period in the relevant Pricing Supplement after the preceding applicable Interest Payment Date occurred;

(b)   Following Business Day Convention means that the date is postponed to the next following day that is a Business Day;

(c)   Modified Following Business Day Convention or Modified Business Day Convention means that the date is postponed to the next following day that is a Business Day unless that day falls in the next calendar month in which case that date is the immediately preceding day that is a Business Day; and

(d)   Preceding Business Day Convention means that the date is brought forward to the immediately preceding day that is a Business Day.

Calculation Agent means, in respect of a Tranche of Notes, such person as is specified as the Calculation Agent (if any) in the relevant Pricing Supplement. The Calculation Agent must be the same for all Notes in a Series.

Condition means the correspondingly numbered condition in these terms and conditions.

Corporations Law means the Corporations Act 2001 (of the Commonwealth of Australia) and, where the context so requires, includes a reference to regulations made under that Act.

Coupon means any interest coupon appertaining to a Bearer Note substantially in the form set out in schedule 4 to the Note Deed Poll.

Day Count Fraction means, in respect of the calculation of an amount of interest on any Note for any period of time (from and including the first day of such period to but excluding the last) (whether or not constituting an Interest Period, the “Calculation Period”):

        (a)   if Actual/365 or Actual/Actual - ISDA is specified in the relevant Pricing Supplement, the actual number of days in the Calculation Period divided by 365 (or, if any portion of that Calculation Period falls in a leap year, the sum of (i) the actual number of days in that portion of the Calculation Period falling in a leap year divided by 366 and (ii) the actual number of days in that portion of the Calculation Period falling in a non-leap year divided by 365);

         (b)   if Actual/365 (Fixed) is specified in the relevant Pricing Supplement, the actual number of days in the Calculation Period divided by 365;

         (c)   if Actual/360 is specified in the relevant Pricing Supplement, the actual number of days in the Calculation Period divided by 360; and

        (d)   if Australian Bond Basis or RBA Bond Basis is specified in the relevant Pricing Supplement, one divided by the number of Interest Payment Dates in a year.

Denomination means the notional face value of a Note as specified in the relevant Pricing Supplement.

Early Termination Amount means in relation to a Note, the Outstanding Principal Amount or such other redemption amount as may be specified in, or determined in accordance with the provisions of, the relevant Pricing Supplement.

Event of Default has the meaning given to it in Condition 7.1 (Events of Default).

Exchange Date means the first Business Day following the expiration of a period of 40 days after the completion of distribution of the Notes.

Extraordinary Resolution has the same meaning as in the Meetings Provisions.

Guarantee means the Deed Poll Guarantee and Indemnity by the Guarantor in favour of Noteholders from time to time dated on or about the date of the Note Deed Poll.

Guarantor means Countrywide Credit Industries, Inc., a company incorporated with limited liability in the State of Delaware of 4500 Park Granada, Calabasas, California 91302, United States of America.

Government Agency means:

(a)   any government or any governmental, semi-governmental, administrative, fiscal or judicial body, department, commission, authority, tribunal, agency or entity; or

(b)   any self regulatory entity established under any law or regulation or any stock or other securities exchange.

Information Memorandum means, in relation to the Programme or any issue of Notes, at any time the then latest information memorandum and any supplement or amendment to it, (whether in printed or electronic form) prepared on behalf of, and approved in writing by, the Issuer and the Guarantor in connection with the issue of Notes, all documents incorporated by reference in it, and such other information to provide potential investors with information on any Note (including in the case of a Tranche of Notes, a Pricing Supplement) approved in writing by the Issuer and the Guarantor from time to time.

Interest Commencement Date means the Issue Date or such other date as may be specified as such in the relevant Pricing Supplement.

Interest Payment Date means the date or dates specified as such in, or determined in accordance with the provisions of, the relevant Pricing Supplement and adjusted, in the case of a Note bearing a floating rate of interest, in accordance with the Applicable Business Day Convention.

Interest Period means each successive period beginning on and including an Interest Payment Date and ending on but excluding the next succeeding Interest Payment Date provided that the first Interest Period commences on and includes the Interest Commencement Date and the final Interest Period ends on but excludes the Maturity Date.

Interest Rate means the rate or rates (expressed as a percentage per annum) or amount or amounts (expressed as a price per unit of relevant currency) of interest payable in respect of the Notes specified in, or calculated or determined in accordance with the provisions of, the relevant Pricing Supplement.

Issue Date means the date on which any Note is or is to be issued as specified in or determined in accordance with the provisions of the relevant Pricing Supplement.

Issue Price means the Issue Price specified in, or calculated or determined in accordance with the provisions of the relevant Pricing Supplement.

Issuer means Countrywide Home Loans, Inc., a company incorporated with limited liability in the State of New York of 4500 Park Granada, Calabasas, California 91302, United States of America.

ITAA means the Income Tax Assessment Act 1936 (of the Commonwealth of Australia).

Liability means any loss, damage, cost, charge, claim, demand, expense, judgment, action, proceeding or other liability whatsoever (including, without limitation, in respect of taxes, duties, levies, imposts and other charges) and including any value added tax or similar tax charged or chargeable in respect thereof and legal fees and expenses provided that such legal fees and expenses are properly incurred.

Maturity Date means, in relation to a Note, the maturity date specified in or determined in accordance with the provisions of the relevant Pricing Supplement and recorded in the Register as the date for redemption of that Note.

Maturity Redemption Amount means in relation to a Note, the Outstanding Principal Amount or such other redemption amount as may be specified in, or calculated or determined in accordance with the provisions of, the relevant Pricing Supplement.

Meetings Provisions means the provisions for the convening of meetings of, and passing of resolutions by Noteholders set out in schedule 2 to the Note Deed Poll.

Note means a medium term note being a debt obligation of the Issuer and includes:

(a)   Registered Notes; and

(b)   pursuant to Condition 17 (Conversion of Registered Notes into Bearer Notes), Bearer Notes.

Note Deed Poll means the deed poll executed by the Issuer in relation to the Programme dated on or about 11 October 2001 (including these terms and conditions which form schedule 1 to the Note Deed Poll).

Noteholder means:

(a)   in the case of any Registered Note, the person whose name is for the time being entered in the Register as the holder of the Registered Note or, where the Registered Note is owned jointly by two or more persons, the persons whose names appear in the Register as the joint owners of the Registered Note and (for the avoidance of doubt) when the Registered Note is entered in the Austraclear System, includes Austraclear acting on behalf of a member of the Austraclear System; and

(b)   in the case of any Bearer Note, the bearer of that Bearer Note.

Outstanding means on any day all Notes issued, less those Notes:

(a)   which have been redeemed or satisfied in full by the Issuer; or

(b)   for the payment of which funds equal to their aggregate Outstanding Principal Amount are on deposit with the Paying Agent on terms which prohibit the return of the deposit or the use of the deposit for any purpose other than the payment of those Notes or in respect of which the Registrar holds an irrevocable direction to apply funds in repayment of Notes to be redeemed on that day; or

(c)   in respect of which a Noteholder is unable to make a claim as a result of the operation of Condition 11 (Time limit for claims).

Outstanding Principal Amount means, in respect of an Outstanding Note at any time, the Denomination of the Note less the aggregate of any part of the principal amount of that Note that has been paid or otherwise satisfied by the Issuer (or, as the case may be, the Guarantor) and for such purposes:

(a)   the premium of a Note to be redeemed at a premium is to be taken to be added to the principal amount; and

(b)   the principal amount of a Note issued at a discount is to be taken as at any time to equal its Denomination.

Paying Agent means Computershare Investor Services Pty Limited (ABN 48 078 279 277) or such other person appointed by the Issuer as a replacement or additional paying agent from time to time provided that no paying agent will be located in the United States.

Payment Date means, in respect of a Note, an Interest Payment Date, the Maturity Date or other relevant payment date (including an early payment date).

Potential Event of Default means any condition, event or act which, with the lapse of time and/or the issue, making or giving of any notice, certification, declaration, demand, determination and/or request and/or the taking of any similar action and/or the fulfilment of any similar condition, would constitute an Event of Default.

Pricing Supplement means a Pricing Supplement prepared and issued in relation to Notes of a relevant Tranche or Series, and confirmed in writing by the Issuer.

Programme means the Issuer's uncommitted programme for the issue of Notes as described in the Information Memorandum.

Programme Manager means ABN AMRO Bank N.V., (Australian Branch) (ABN 84 079 478 612) in its capacity as administration manager of the Programme, or such other person appointed by the Issuer from time to time and who has consented to act as Programme Manager.

Record Date means, in the case of payments of interest or principal, the eighth calendar day before the relevant date for payment.

Registered Note means any Note which, solely for the purposes of New South Wales law, is in registered form and which is constituted by, and owing under, the Note Deed Poll.

Register means a register, including any sub-register, of Noteholders established and maintained by or on behalf of the Issuer in which is entered the names and addresses of Noteholders whose Notes are carried on that register, the amount of Notes held by each Noteholder and the Tranche, Series and Issue Date and date of transfer of those Notes, and any other particulars which the Issuer sees fit.

Registrar means Computershare Investor Services Pty Limited (ABN 48 078 279 277) or such other person appointed by the Issuer to establish and maintain the Register on the Issuers’ behalf from time to time.

Series means a Tranche or Tranches of Notes all of which have identical terms, except that:

(a)   the Issue Date and the amount of the first payment of interest may be different in respect of different Tranches of a Series; and

(b)   a Series may comprise Notes in more than one Denomination.

Stock Exchange means the Australian Stock Exchange Limited, or any other or further stock exchange(s) on which any Notes may from time to time be listed, and references to the “relevant Stock Exchange” is, in relation to any Notes, a reference to the Stock Exchange on which the Notes are, from time to time, or are intended to be, listed.

Talon means the Talons (if any) appertaining to, and exchangeable for, further Coupons appertaining to a Bearer Note substantially in the form set out in schedule 5 to the Note Deed Poll.

Tranche means an issue of Notes all of which are issued on the same Issue Date and the terms of which are identical in all respects (except that a Tranche may comprise Notes in more than one Denomination).

Transaction Documents means the Note Deed Poll (including these terms and conditions), the Agency Services Agreement, the Guarantee, each Note, each Pricing Supplement and any other instrument specified as such in a Pricing Supplement.

Interpretation

         1.2      In these terms and conditions unless the contrary intention appears:

         (a)   a reference to these terms and conditions is a reference to these terms and conditions as modified, supplemented or replaced by the relevant Pricing Supplement;

         (b)   a reference to "Australian Dollars", "A$" or "dollars" is a reference to the lawful currency of the Commonwealth of Australia;

         (c)   a reference to a statute, ordinance, code or other law includes regulations and other instruments under it and consolidations, amendments, re-enactments or replacements of any of them;

         (d)   the singular includes the plural and vice versa;

         (e)   the word "person" includes a firm, body corporate, an unincorporated association or an authority;

         (f)   a reference to a person includes a reference to the person's executors, administrators, successors, substitutes (including, without limitation, persons taking by novation) and assigns;

        (g)   a reference to any thing (including, without limitation, any amount) is a reference to the whole and each part of it and a reference to the Issuer or to a group of persons is a reference to all of them collectively and to each of them individually;

         (h)   a reference to a deed poll, deed, agreement or another instrument includes any variation or replacement of them;

         (i)   a reference to a time of day is a reference to that time in Sydney; and

        (j)   a reference to “current accounting practice” applying to a person is to accounting principles and practices applying by law or otherwise generally accepted in the place of incorporation of that person, consistently applied. A reference to an accounting term is to be interpreted according to those principles and practices.

Headings

         1.3    Headings are inserted for convenience and do not affect the interpretation of these terms and conditions.

2   Form, Denomination and title

Form of Notes

        2.1   Each Tranche of Registered Notes and, for the purposes of that Tranche of Registered Notes only, the Note Deed Poll, is initially in temporary form and will be converted to permanent form on or after the Exchange Date upon and to the extent of delivery to the Paying Agent of:

        (a) a certificate or certificates issued by Austraclear and dated no earlier than the Exchange Date, in substantially the form set out in Appendix 1 to the Note Deed Poll, which certificate or certificates are based upon a written certification or certifications in substantially the form set out in Appendix 2 to the Note Deed Poll received by Austraclear or the Paying Agent on its behalf, by facsimile or electronic transmission from the relevant Austraclear Participants; or

        (b) where the Tranche of Registered Notes is not settled through the Austraclear System, a certificate or certificates in substantially the form set out in Appendix 2 to the Note Deed Poll by facsimile or electronic transmission from the relevant Noteholder,

         in relation to the Registered Notes to be converted to permanent form.

         The delivery to the Paying Agent by Austraclear of any certificate referred to above may be relied upon by the Issuer and the Paying Agent as conclusive evidence that a corresponding certification or certifications has or have been delivered to Austraclear or the Paying Agent on its behalf by such Austraclear Participants. The Paying Agent must retain any certificate received from Austraclear or any other Noteholder for at least four calendar years following the year in which the certificate is received.

         Interest payments in respect of Registered Notes will only be made in respect of Registered Notes in permanent form.

Registered

         Notes in permanent form are exchangeable for Bearer Notes in accordance with Condition 17 (Conversion of Registered Notes into Bearer Notes). Bearer Notes are not exchangeable for Registered Notes.

         The Registered Notes are debt obligations of the Issuer constituted by, and owing under, the Note Deed Poll and take the form of entries in the Register. Each entry in the Register constitutes a separate and individual acknowledgment to the relevant Noteholder of the indebtedness of the Issuer to that Noteholder.

Independent obligations

        2.2   The obligations of the Issuer in respect of each Note issued by it constitute separate and independent obligations which the Noteholder to whom those obligations are owed is entitled to enforce without having to join any other Noteholder or any predecessor in title of a Noteholder.

Currency

         2.3   Notes will be denominated in Australian Dollars.

Denomination

        2.4   Notes are issued in the Denomination of A$10,000, unless otherwise specified in the relevant Pricing Supplement. Notes may only be issued if the aggregate consideration payable to the Issuer by the relevant Noteholder is at least A$500,000 (disregarding moneys lent by the Issuer or its associates) or if the Notes are otherwise issued in a manner which does not require disclosure to investors in accordance with Part 6D.2 of the Corporations Law.

Register conclusive

        2.5   Entries in the Register in relation to a Registered Note constitute conclusive evidence that the person so entered in the Register is the registered owner of that Registered Note subject to rectification for fraud or error. No Registered Note will be registered in the name of more than four persons. A Registered Note registered in the name of more than one person is held by those persons as joint tenants. Registered Notes will be registered by name only without reference to any trusteeship. The person registered in the Register as a holder of a Registered Note will be treated by the Issuer and the Registrar as absolute owner of that Registered Note and neither the Issuer nor the Registrar are, except as ordered by a court or as required by statute, obliged to take notice of any other claim to a Registered Note.

Noteholder absolutely entitled

        2.6   Upon a person acquiring title to any Registered Note by virtue of becoming registered as the owner of that Registered Note, all rights and entitlements arising by virtue of the Note Deed Poll in respect of that Registered Note vest absolutely in the registered owner of the Registered Note, such that no person who has previously been registered as the owner of the Registered Note has or is entitled to assert against the Issuer or the Registrar or the registered owner of the Registered Note for the time being and from time to time any rights, benefits or entitlements in respect of the Registered Note.

Location of Register

        2.7   The Register will be established and maintained in New South Wales unless otherwise agreed with the Registrar.

Certificates

        2.8   No certificate or other evidence of title will be issued by or on behalf of the Issuer to evidence title to a Registered Note unless the Issuer determines that certificates should be made available or it is required to do so pursuant to any applicable law or regulation.

Acknowledgment

        2.9   Where Austraclear is recorded in the Register as the Noteholder of a Registered Note, each relevant Austraclear Participant is deemed to acknowledge in favour of the Registrar and Austraclear that:

        (a)   the Registrar’s decision to act as the Registrar of the Registered Note does not constitute a recommendation or endorsement by the Registrar or Austraclear in relation to the Registered Note but only indicates that such Registered Note is considered by the Registrar to be compatible with the performance by it of its obligations as Registrar under its agreement with the Issuer to act as Registrar of the Registered Note; and

         (b)   the Noteholder does not rely on any fact, matter or circumstance contrary to Condition 2.9(a).

3 Transfers

Limits on transfer to, from and within Australia

         3.1   Notes may only be transferred to, from or within Australia:

         (i)   in whole;

        (ii)   if the minimum aggregate consideration payable at the time of transfer is at least A$500,000 (disregarding moneys lent by the transferor or its associates to the transferee) or the transfer otherwise does not require disclosure to investors in accordance with Part 6D.2 of the Corporations Law; and

         (iii)   if the transfer is in compliance with the laws of the jurisdiction in which the transfer takes place.

Limits on transfer outside Australia

        3.2   A Note may only be transferred between persons in a jurisdiction or jurisdictions other than Australia if a transfer and acceptance form is signed outside Australia and the transfer is in compliance with the laws of the jurisdiction or jurisdictions in which the transfer takes place.

Transfers

        3.3   Unless Registered Notes are lodged in the Austraclear System, Registered Notes will be transferable only by duly completed and (if applicable) stamped transfer and acceptance forms in the form specified by, and obtainable from, the Registrar or by any other method approved by the Issuer and the Registrar. Each transfer and acceptance form must be accompanied by such evidence (if any) as the Registrar may require to prove the title of the transferor or the transferor’s right to transfer the Registered Note and be signed by both the transferor and the transferee. Registered Notes entered in the Austraclear System will be transferable only in accordance with the Austraclear Regulations.

         Bearer Notes are transferable by delivery.

Registration of transfer

        3.4   The transferor of a Registered Note is deemed to remain the holder of that Registered Note until the name of the transferee is entered in the Register in respect of that Registered Note. Transfers will not be registered during the period from the Record Date until the calendar day after the relevant Payment Date.

No charge on transfer

        3.5   Transfers will be registered without charge provided taxes, duties or other governmental charges (if any) imposed in relation to the transfer have been paid.

Estates

        3.6   A person becoming entitled to a Registered Note as a consequence of the death or bankruptcy of a Noteholder or of a vesting order or a person administering the estate of a Noteholder may, upon producing such evidence as to that entitlement or status as the Registrar considers sufficient, transfer the Registered Note or, if so entitled, become registered as the holder of the Registered Note.

Unincorporated associations

         3.7   A transfer to an unincorporated association is not permitted.

Transfer of unidentified Notes

        3.8   Where the transferor executes a transfer of less than all Registered Notes registered in its name, and the specific Registered Notes to be transferred are not identified, the Registrar may (subject to the limit on minimum holdings, if any) register the transfer in respect of such of the Registered Notes registered in the name of the transferor as the Registrar thinks fit, provided the aggregate principal amount of the Registered Notes registered as having been transferred equals the aggregate principal amount of the Registered Notes expressed to be transferred in the transfer.

Stamp duty

         3.9   The Issuer must bear any stamp duty payable on the issue and subscription of the Notes issued by it.

         The Noteholder is responsible for any stamp duties or other similar taxes which are payable in any jurisdiction in connection with any transfer, assignment or any other dealing with the Notes.

4   Status and covenants

Status of Notes

        4.1   The Notes are direct, unconditional, unsubordinated and unsecured obligations of the Issuer and rank pari passu among themselves and (except for liabilities mandatorily preferred by law) equally with all other unsecured and unsubordinated obligations of the Issuer, from time to time outstanding.

Guarantee

        4.2   The payment of the principal and interest in respect of the Notes and all other moneys payable by the Issuer under or pursuant to the Notes has been unconditionally and irrevocable guaranteed by the Guarantor under the Guarantee. The obligations of the Guarantor under the Guarantee are direct, unconditional, unsubordinated and unsecured obligations of the Guarantor and rank pari passu and (except for liabilities mandatorily preferred by law) equally with all other unsecured and unsubordinated obligations of the Guarantor, from time to time outstanding.

Covenants by the Issuer and the Guarantor

         4.3   So long as any of the Notes remain Outstanding, each of the Issuer and the Guarantor agree to:

        (a)   at all times carry on and conduct its affairs and procure its subsidiaries to carry on and conduct their respective affairs in a proper and efficient manner;

        (b)   cause to be prepared and certified by its Auditors in respect of each annual financial accounting period accounts in such form as will comply with all relevant legal and accounting requirements and all requirements for the time being of the relevant Stock Exchange;

        (c)   use its best endeavours to maintain the quotation or listing on the relevant Stock Exchange of those of the Notes which are quoted or listed on the relevant Stock Exchange or, if it is unable to do so having used such endeavours, use its best endeavours to obtain and maintain a quotation or listing of such Notes issued by it on such other stock exchange or exchanges or securities market or markets as the Issuer may decide; and

         (d)   give to the Programme Manager:

(i)   within seven days after demand by the Programme Manager; and

(ii)   (without the necessity for any such demand) promptly after the publication of its audited accounts in respect of each financial year and in any event not later than 180 days after the end of each such financial year a certificate signed by two of its directors, to the effect that as at a date not more than seven days before delivering such certificate (the “relevant certification date”) there did not exist and had not existed since the relevant certification date of the previous certificate (or in the case of the first such certificate the date hereof) any Event of Default or any Potential Event of Default (or if such exists or existed specifying the same) and that during the period from and including the relevant certification date of the last such certificate (or in the case of the first such certificate the date hereof) to and including the relevant certification date of such certificate the Issuer has complied with all its obligations contained in these terms and conditions or (if such is not the case) specifying the respects in which it has not complied.

Consolidation, merger, conveyance or transfer by the Issuer

        4.4   The Issuer shall not consolidate with or merge into any other corporation or convey or transfer its properties and assets substantially as an entirety to any person, unless:

        (a)   the corporation formed by such consolidation or into which the Issuer is merged or the person which acquires by conveyance or transfer the properties and assets of the Issuer substantially as an entirety is a corporation organised and existing under the laws of the United States of America, any political subdivision thereof or any State thereof and expressly assumes, by deed poll in favour of Noteholders from time to time in a form not materially prejudicial to the interests of Noteholders, the due and punctual payment of the principal of and interest on all the Notes and the performance of all obligations of the Issuer under the Transaction Documents;

         (b)   immediately after giving effect to such transaction, no Event of Default or Potential Event of Default has occurred;

        (c)   the Issuer has delivered to the Programme Manager a certificate signed by two of its directors and an opinion of counsel acceptable to the Programme Manager, each stating that such consolidation, merger, conveyance or transfer and such deed poll comply with this Condition 4.4 and that all conditions precedent provided for in these terms and conditions relating to such transaction have been complied with; and

        (d)   the Guarantor has delivered to the Programme Manager a certificate signed by two of its directors and an opinion of counsel acceptable to the Programme Manager, each stating that the Guarantor’s obligations under the Guarantee remain in full force and effect after such assumption.

        4.5   Upon any consolidation with or merger into any other corporation, or any conveyance or transfer of the properties and assets of the Issuer substantially as an entirety, in each case in accordance with Condition 4.4 (Consolidation, merger, conveyance or transfer by the Issuer), the successor corporation formed by that consolidation or into which the Issuer is merged or the successor person to which that conveyance or transfer is made shall succeed to, and be substituted for, and may exercise every right and power of, the Issuer under the Transaction Documents with the same effect as if such successor had been named as the Issuer therein, and following such succession the predecessor corporation is relieved of all obligations and covenants under the Transaction Documents.

Consolidation, merger, conveyance or transfer by the Guarantor

        4.6   The Guarantor shall not consolidate with or merge into any other corporation or convey or transfer its properties and assets substantially as an entirety to any person, unless:

        (a)   the corporation formed by such consolidation or into which the Guarantor is merged or the person which acquires by conveyance or transfer the properties and assets of the Guarantor substantially as an entirety is a corporation organised and existing under the laws of the United States of America, any political subdivision thereof or any State thereof and expressly assumes, by a deed poll in favour of Noteholders from time to time in a form not materially prejudicial to the interests of the Noteholders, the obligations of the Guarantor under the Guarantee and the performance of all obligations of the Guarantor under the Transaction Documents;

         (b)   immediately after giving effect to such transaction, no Event of Default or Potential Event of Default has occurred; and

        (c)   the Guarantor has delivered to the Programme Manager a certificate signed by two of its directors and an opinion of counsel acceptable to the Programme Manager, each stating that such consolidation, merger, conveyance or transfer and such deed poll comply with this Condition 4.6 and that all conditions precedent provided for in these terms and conditions relating to such transaction have been complied with.

        4.7   Upon any consolidation with or merger into any other corporation, or any conveyance or transfer of the properties and assets of the Guarantor substantially as an entirety, in each case in accordance with Condition 4.6 (Consolidation, merger, conveyance or transfer by the Guarantor), the successor corporation formed by that consolidation or into which the Guarantor is merged or the successor person to which that conveyance or transfer is made shall succeed to, and be substituted for, and may exercise every right and power of, the Guarantor under the Transaction Documents with the same effect as if such successor had been named as the Guarantor therein, and following such succession the predecessor corporation is relieved of all obligations and covenants under the Transaction Documents.

5   Interest

Interest

        5.1   Notes may bear interest at a fixed rate per annum or a fixed coupon rate (“Fixed Rate Notes”) or at a floating rate (“Floating Rate Notes”), as specified in the relevant Pricing Supplement. Notes bear interest from their Interest Commencement Date at the Interest Rate and such interest is payable in arrears on each Interest Payment Date.

         Interest accrues from the Interest Commencement Date on the Outstanding Principal Amount. Interest will cease to accrue on maturity of a Note unless default is made in the payment of any principal amount in which case interest continues to accrue on the principal amount in respect of which payment has been improperly withheld or refused or default has been made (as well after as before any demand or judgement) at the Interest Rate then applicable or such other rate as may be specified for this purpose in the Pricing Supplement until the date on which the relevant payment is made.

Calculations and adjustments

        5.2   The amount of interest payable in respect of any Note for any period is calculated by multiplying the product of the Interest Rate and the Outstanding Principal Amount by the Day Count Fraction, save that if the Pricing Supplement specifies an amount in respect of such period, the amount of interest payable in respect of such Note for such period is equal to such specified amount.

         For the purposes of any calculations referred to in these terms and conditions and unless otherwise specified in these terms and conditions or the Pricing Supplement, all amounts used in or resulting from such calculations will be rounded to the nearest cent (with one half cent being rounded up).

Notification of Interest Rate

        5.3   The Issuer will, if requested in writing by a Noteholder, notify the Noteholder of the Interest Rate, the amount of interest payable to that Noteholder and the relevant Interest Payment Date (or the method of determining them).

Notification, etc to be final

        5.4   Except as provided in Condition 5.3 (Notification of Interest Rate), all notifications, opinions, determinations, certificates, calculations, quotations and decisions given, expressed, made or obtained for the purposes of the provisions of this Condition 5 by the Issuer are (in the absence of wilful default, bad faith or manifest error) binding on the Issuer and all Noteholders.

6   Redemption and purchase

Redemption on maturity

        6.1   Unless previously redeemed, or purchased and cancelled or unless such Note is stated in the relevant Pricing Supplement as having no fixed Maturity Date, each Note shall be redeemed on the Maturity Date specified in the relevant Pricing Supplement at its Maturity Redemption Amount.

Purchase of Notes

        6.2   The Issuer, the Guarantor or any of its subsidiaries may at any time purchase Notes in the open market or otherwise and at any price. All unmatured Notes purchased in accordance with this Condition 6.2, Condition 6.9 (Early redemption at option of Issuer) or Condition 6.12 (Early redemption at option of Noteholders) may be held, resold, reissued or cancelled at the discretion of the Issuer or the Guarantor, subject to compliance with all legal and regulatory requirements.

Early redemption for taxation reasons

        6.3   The Notes may be redeemed at the option of the Issuer in whole, but not in part, at any time (if the Note is not a Floating Rate Note) or on any Interest Payment Date (if the Note is a Floating Rate Note), on giving not less than 30 nor more than 60 days’ notice to the Registrar and Paying Agent and, in accordance with Condition 12 (Notices), the Noteholders (which notice shall be irrevocable), if:

        (a)   on the occasion of the next payment due under the Notes, the Issuer has or will become obliged to pay additional amounts as provided or referred to in Condition 9 (Taxation) or the Guarantor would be unable for reasons outside its control to procure payment by the Issuer and in making payment itself would be required to pay such additional amounts in each case as a result of any change in, or amendment to, the laws or regulations of the United States of America or any political subdivision or any authority thereof or therein having power to tax, or any change in the application or official interpretation of such laws or regulations, which change or amendment becomes effective on or after the Issue Date of the first Tranche of the Notes; and

         (b)   such obligation cannot be avoided by the Issuer or, as the case may be, the Guarantor taking reasonable measures available to it,

provided that no such notice of redemption is given earlier than 90 days prior to the earliest date on which the Issuer or, as the case may be, the Guarantor would be obliged to pay such additional amounts were a payment in respect of the Notes then due.

Prior to the publication of any notice of redemption pursuant to this Condition 6.3, the Issuer shall deliver to the Paying Agent a certificate signed by two directors of the Issuer or, as the case may be, two directors of the Guarantor stating that the Issuer is entitled to effect such redemption and setting out a statement of facts showing that the conditions precedent to the right of the Issuer to redeem have occurred, and an opinion of independent legal advisers of recognised standing to the effect that the Issuer or, as the case may be, the Guarantor has or will become obliged to pay such additional amounts as a result of such change or amendment.

        6.4   If the Issuer, or if applicable, the Guarantor determines, based upon a written opinion of independent United States legal counsel, that any payment made outside the United States by the Issuer, the Guarantor or the Paying Agent of principal or interest due in respect of any Note would, under any present or future laws or regulations of the United States of America, be subject to any certification, identification or other information reporting requirement of any kind, the effect of which is the disclosure to the Issuer, the Guarantor, Paying Agent or any governmental authority of the nationality, residence or identity (as distinguished from, for example, status as a United States Alien (as defined in Condition 9 (Taxation)) of a beneficial owner of such Note who is a United States Alien the Issuer, at its option, will either:

         (a)   redeem the Notes, in whole but not in part; or

         (b)   if and so long as the conditions of Condition 9 (Taxation) are satisfied, pay the additional amounts specified in Condition 9 (Taxation).

        6.5   The right of the Issuer to exercise such option will not apply where the requirement otherwise giving rise to such option:

         (a)   would not be applicable to a payment made by the Issuer, the Guarantor or the Paying Agent:

(i)   directly to the beneficial owner; or

(ii)   to a custodian, nominee or other agent of the beneficial owner,

         (b)   can be satisfied by such custodian, nominee or other agent certifying that such beneficial owner is a United States Alien,

provided that in each case referred to in paragraphs (a)(ii) and (b) of this Condition 6.5 payment by such custodian, nominee or agent of such beneficial owner is not otherwise subject to any such requirement (other than a requirement which is imposed on a custodian, nominee or other agent described in paragraph (d) of this Condition 6.5); or

         (c)    would not be applicable to payment made by at least one other Paying Agent; or

        (d)   is applicable to a payment to a custodian, nominee or other agent of the beneficial owner who is a United States person, a controlled foreign corporation for United States tax purposes, a foreign person 50 per cent. or more of whose gross income for the 3-year period ending with the close of its taxable year preceding the year of payment is effectively connected with a United States trade or business, or is otherwise related to the United States.

; Such determination and election will be made as soon as practicable, and the Issuer will promptly publish notice thereof (the “Determination Notice”) stating the effective date of such certification, identification or other information or reporting requirement, whether the Notes shall be redeemed or that the additional amounts specified in Condition 9 (Taxation) should be paid and (if applicable) the last date by which the redemption of the Notes must take place.

        6.6   If an election has been made that the Notes be redeemed, such redemption will take place on such date (being an Interest Payment Date if the Note is a Floating Rate Note), not later than one year after the publication of the Determination Notice, as the Issuer elects by notice to the Noteholders in accordance with Condition 12 (Notice) at least 60 days before the date fixed for redemption.

        6.7   Notwithstanding Conditions 6.3 to 6.6, the Notes will not be redeemed if the Issuer subsequently determines, based on an opinion of independent United States legal counsel, no less than 30 days prior to the redemption date, that subsequent payments would not be subject to any such requirement, in which case the Issuer will promptly publish notice of such determination and any earlier redemption notice will be revoked and of no further effect.

         6.8   Notes redeemed pursuant to Condition 6.3 (Early redemption for tax reasons) will be redeemed at their tax early redemption amount (“Early Redemption Amount (Tax)”) (which is their Outstanding Principal Amount or such other redemption amount as may be specified in, or determined in accordance with the provisions of, the Pricing Supplement), together with accrued interest (if any) to (but excluding) the date of redemption.

Early redemption at option of Issuer

        6.9   If this Condition 6.9 is specified in the Pricing Supplement as being applicable, then the Issuer may, having given the appropriate notice and subject to such conditions as may be specified in the Pricing Supplement, redeem all (but not, unless and to the extent that the Pricing Supplement specifies otherwise, some only) of the Notes of the relevant Series at their call early redemption amount (“Early Redemption Amount (Call)”) (which is their Outstanding Principal Amount or such other redemption amount as may be specified in, or determined in accordance with the provisions of, the Pricing Supplement), together with accrued interest (if any) to (but excluding) the date of redemption.

The Issuer may not exercise such option in respect of any Note which is the subject of the prior exercise by the Noteholder thereof of its option to require the redemption of such Note under Condition 6.12 (Early redemption at option of Noteholders).

        6.10   The appropriate notice referred to in Condition 6.9 (Early redemption at option of Issuer) is a notice given by the Issuer to the Registrar and Paying Agent and to the Noteholders of the relevant Series in accordance with Condition 12 (Notices), which notice shall be irrevocable and shall specify:

         (a)   the Series of Notes subject to redemption;

        (b)   whether such Series is to be redeemed in whole or in part only and, if in part only, the aggregate principal amount of and the serial numbers (if Bearer Notes) of the Notes of the relevant Series which are to be redeemed;

        (c)   the due date for such redemption, which shall be not less than 30 days nor more than 60 days after the date on which such notice is given and which shall be such date or the next of such dates (“Call Option Date(s)”) or a day falling within such period (“Call Option Period”), as may be specified in the Pricing Supplement and which is, in the case of Notes which bear interest at a floating rate, Interest Payment Date; and

         (d)   the Early Redemption Amount (Call) at which such Notes are to be redeemed.

Partial Redemption

        6.11   In the case of a partial redemption of Registered Notes, the Notes to be redeemed will be selected by the Registrar, and notice of the Notes selected for redemption will be given in accordance with Condition 12 (Notices) not less than 15 days prior to the date fixed for redemption.

Early redemption at option of Noteholders

        6.12   If this Condition 6.12 is specified in the Pricing Supplement as being applicable, then the Issuer shall, upon the exercise of the relevant option by any Noteholder of the relevant Series, redeem such Note on the date specified in the relevant Put Notice (as defined below) at its put early redemption amount (the “Early Redemption Amount (Put)”) (which is their Outstanding Principal Amount or such other redemption amount as may be specified in, or determined in accordance with the provisions of, the Pricing Supplement), together with accrued interest (if any) to (but excluding) the date of redemption.

In order to exercise such option, the Noteholder must, not less than 30 nor more that 60 days’ before the date on which such redemption is required to be made as specified in the Put Notice (as defined below) (which date shall be such date or the next of the dates (“Put Date(s)”), or a day falling within such period (“Put Period”), as may be specified in the Pricing Supplement), deposit (together, in the case of a Bearer Note, with all unmatured Coupons and Talons appertaining thereto other than any Coupon maturing on or before the date of redemption) during normal business hours at the specified office of the Paying Agent a duly completed early redemption notice (“Put Notice”) in the form which is available from the specified office of the Paying Agent specifying, in the case of a Registered Note, the aggregate principal amount in respect of which such option is exercised (which must be the minimum Denomination specified in the Pricing Supplement or an integral multiple thereof). No Bearer Note so deposited and option exercised may be withdrawn.

A Noteholder may not exercise such option in respect of any Note which is the subject of an exercise by the Issuer of its option to redeem such Note under either Condition 6.3 (Early redemption for tax reasons) or 6.9 (Early redemption at option of Issuer).

7 Events of Default

Events of Default

         7.1   An Event of Default occurs in relation to a Series of Notes if any one or more of the following events occurs:

        (a)   (payment default) default is made in the payment of any principal or interest due in respect of the Notes or any of them and the default continues for a period of 30 days in the case of interest; or

        (b)   (other default) the Issuer or the Guarantor fails to perform or observe any of its other obligations under these terms and conditions, the Note Deed Poll on the Guarantee and, if the default can be remedied, the Issuer or Guarantor (as the case may be) does not remedy the default within the period of 60 days next following the service on the Issuer or the Guarantor (as the case may be) of notice requiring the default to be remedied by Noteholders holding at least 25% of the Outstanding Principal Amount of Outstanding Notes; or

        (c)   (cross default) any Indebtedness for Borrowed Money of the Issuer or the Guarantor becomes due and repayable prematurely by reason of an event of default (however described) or the Issuer or the Guarantor fails to make any payment in respect of any Indebtedness for Borrowed Money on the due date for payment or any security given by the Issuer or the Guarantor for any Indebtedness for Borrowed Money becomes enforceable or if default is made by the Issuer or the Guarantor in making any payment due under any guarantee and/or indemnity given by it in relation to any Indebtedness for Borrowed Money of any other person provided that no such event shall constitute an Event of Default unless the relative Indebtedness for Borrowed Money either alone or when aggregated with other Indebtedness for Borrowed Money relative to all (if any) other such events which shall have occurred shall amount to at least U.S.$10,000,000 (or its equivalent in any other currency); or

        (d)   (insolvency - order for relief) the entry of a decree or order for relief in respect of the Issuer or the Guarantor by a court having jurisdiction in the premises in an involuntary case under the Federal bankruptcy laws of the United States of America, as now or hereafter constituted, or any other Federal or State bankruptcy, insolvency or other similar law, or appointing a receiver, liquidator, assignee, custodian, trustee, sequestrator (or other similar official) of the Issuer or the Guarantor or of any substantial part of its property, or ordering the winding up or liquidation of its affairs, and the continuance of any such decree or order unstayed and in effect for a period of 90 consecutive days; or

        (e)   (insolvency - voluntary proceedings) the commencement by the Issuer or the Guarantor of a voluntary case under the Federal bankruptcy laws of the United States of America, as now or hereafter constituted, or any other applicable Federal or State bankruptcy, insolvency or other similar law, or the consent by it to the entry of an order for relief in an involuntary case under any such law or to the appointment of a receiver, liquidator, assignee, custodian, trustee, sequestrator (or other similar official) of the Issuer or the Guarantor or of any substantial part of its property, or the making by it of an assignment for the benefit of creditors, or the admission by it in writing of its inability to pay its debts generally as they become due, or the taking of any corporate action in furtherance of any of the foregoing; or

        (g)   (void) any of the Notes or the Guarantee is or becomes wholly or partly void, voidable or unenforceable or is claimed to be so by the Issuer or the Guarantor or any person on behalf of the Issuer or the Guarantor.

For the purposes of this Condition, “Indebtedness for Borrowed Money” means any present or future indebtedness (whether being principal, premium, interest or other amounts) for or in respect of (i) money borrowed, (ii) liabilities under or in respect of any acceptance or acceptance credit or (iii) any notes, bonds, debentures, debenture stock, loan stock or other securities offered, issued or distributed whether by way of public offer, private placing, acquisition consideration or otherwise and whether issued for cash or in whole or in part for a consideration other than cash.

Consequences of an Event of Default

        7.2   If an Event of Default occurs and is continuing, each Note will become due and payable immediately upon the Issuer or the Guarantor (as the case may be) receiving a notice to that effect from Noteholders holding at least 25% of the Outstanding Principal Amount of the Outstanding Notes of the relevant Series, without any further action whatsoever on the part of the Issuer, the Guarantor or the Noteholders of the relevant Series, at its Early Termination Amount (together with all accrued interest (if any)).

Rectification

        7.3   The right of Noteholders to give notice to the Issuer or Guarantor in accordance with Condition 7.2 (Consequences of an Event of Default) terminates if the event or circumstance giving rise to it is cured before such notice is given.

Restrictions on institution of proceedings

        7.4   No Noteholder of any Series has any right to institute any proceedings, judicial or otherwise, with respect to any Note other than in accordance with Condition 7.2 (Consequences of an Event of Default).

Notification of Event of Default

        7.5   If an Event of Default or a Potential Event of Default occurs, the Issuer must promptly after becoming aware of it notify the Programme Manager and Registrar of the occurrence of the Event of Default (specifying details of it) and procure that the Registrar promptly notifies the relevant Noteholders of the occurrence of the Event of Default in accordance with Condition 12 (Notices).

8   Payments

Record Date

        8.1   Payments to holders of Registered Notes will be made according to the particulars recorded in the Register at 5.00pm on the relevant Record Date.

Bearer Notes

        8.2   Unless otherwise provided in the relevant Pricing Supplement, payments of principal on Bearer Notes will be made against surrender of such Bearer Notes, and payments of interest on Bearer Notes will be made against surrender of the applicable Coupons, to the Paying Agent.

Joint holders

        8.3   When a Registered Note is held jointly, payment will be made to the holders in their joint names unless requested otherwise.

Method of payments

         8.4   Payments in respect of each Registered Note issued by an Issuer will be made:

        (a)   where the Registered Notes are in the Austraclear System, by crediting on the relevant Payment Date the amount then due to the account (held with a bank in Australia) of Austraclear in accordance with the Austraclear Regulations; or

        (b)   if the relevant Registered Notes are not in the Austraclear System, by crediting on the Payment Date the amount then due to an account in Australia previously notified by the relevant Noteholder to the Issuer and the Paying Agent. If the relevant Noteholder has not notified the Issuer and the Paying Agent of such an account by 5.00pm on the relevant Record Date payments in respect of the relevant Registered Note will be made by cheque (drawn on a bank in Australia), mailed on the Business Day immediately preceding the relevant Payment Date, at the relevant Noteholder’s risk to the Noteholder (or to the first named of joint holders) of such Registered Note at the address appearing in the Register as at the Record Date. Cheques to be despatched to the nominated address of a Noteholder will in such cases be deemed to have been received by the Noteholder on the relevant Payment Date and no further amount will be payable by the Issuer in respect of the relevant Registered Note as a result of payment not being received by the Noteholder on the due date.

No payment of interest will be mailed to an address in the United States or transferred to an account maintained by a Noteholder in the United States and no payment of interest will be made with respect to any Registered Notes in temporary form.

Payments by electronic transfer

        8.5   In the case of payments made by electronic transfer, payments will for all purposes be deemed to be made when the Registrar gives irrevocable instructions in Sydney for the making of the relevant payment by electronic transfer, being instructions which would be reasonably expected to result, in the ordinary course of banking business, in the funds transferred reaching the account of the relevant Noteholder and, in the case of accounts maintained in Australia, reaching the account on the same day as the day on which the instructions are given.

Alternative arrangements for payment

        8.6   If a cheque posted or an electronic transfer for which irrevocable instructions have been given by the Registrar is shown, to the satisfaction of the Registrar, not to have reached the relevant Noteholder and the Registrar is able to recover the relevant funds, the Registrar may make such other arrangements as it thinks fit for the effecting of the payment in Sydney.

Non-Business Days

         8.7   If a payment:

         (a)   is due under a Note on a day which is not a Business Day then the due date for payment will be the next following day which is a Business Day; or

        (b)   is to be made to an account on a Business Day on which banks are not open for general banking business in the place in which the account is located, then the due date for payment will be the next following day on which banks are open for general banking business in that place,

and in either case, the Noteholder is not entitled to any additional payment in respect of that delay.

Payments subject to fiscal laws

        8.8   Payments will be subject in all cases to any fiscal or other applicable laws and regulations. Neither the Issuer or the Registrar is liable to any Noteholder for any commissions, costs, losses or expenses in relation to or resulting from such payments.

9   Taxation

Additional amounts

        9.1   Subject to certain exceptions and limitations set out below, all payments of principal and interest in respect of the Notes by the Issuer or the Guarantor will be made without withholding or deduction for or on account of any present or future taxes or duties of whatever nature imposed or levied by or on behalf of the United States of America or any political subdivision or any authority thereof or therein having power to tax unless such withholding or deduction is required by law. In such event, the Issuer or, as the case may be, the Guarantor will pay such additional amounts as shall be necessary in order that the net amounts received by Noteholders after such withholding or deduction equals the respective amounts of principal and interest which would otherwise have been receivable in respect of the Notes in the absence of such withholding or deduction; except that no such additional amounts is payable with respect to any Note as a result of withholding or deduction on account of any one or more of the following:

         (a)   any tax or duty which would not have been so imposed but for;

(i)   the existence of any present or former connection between such Noteholder (or between a fiduciary, settlor, or beneficiary of, or a person holding a power over, such holder, if such Noteholder is an estate or a trust, or a member or shareholder of such Noteholder, if such Noteholder is a partnership or a corporation) and the United States of America including, without limitation, such Noteholder (or such fiduciary, settlor, beneficiary, person holding a power, member or shareholder) being or having been a citizen or resident or treated as a resident thereof or being or having been engaged in a trade or business therein or having had a permanent establishment therein, or

(ii)   such Noteholder’s present or former status as a personal holding company, foreign personal holding company or passive foreign investment company with respect to the United States of America or a controlled foreign corporation or a foreign tax exempt organisation for United States tax purposes or as a corporation which accumulates earnings to avoid United States Federal income tax;

        (b)   any tax or duty which would not have been so imposed but for the presentation or surrender by the Noteholder of such Note for payment on a date more than 30 days after the Relevant Date except to the extent that the Noteholder would have been entitled to an additional amount on presenting the same for payment on such thirtieth day;

         (c)   any estate, inheritance, gift, sales, transfer or personal property tax or any similar tax or duty;

        (d)   any tax or duty which would not have been so imposed but for the failure to comply with certification, identification or other information reporting requirements concerning the nationality, residence, identity or connection with the United States of America of the holder or beneficial owner of such Note if such compliance is required by statute or by regulation of the United States of America as a precondition of relief or exemption from such tax or duty;

         (e)   any tax or duty which is payable otherwise than by withholding from a payment on a Note;

        (f)   any tax or duty imposed on a Noteholder that actually or constructively owns 10 per cent. or more of the total combined voting power of all classes of stock of the Issuer or, as the case may be, the Guarantor entitled to vote within the meaning of Section 871 (h)(3) of the United States Internal Revenue Code of 1986, as amended, and any regulations thereunder (the “Code”); or

         (g)   any combination of items (a), (b), (c), (d), (e) and (f),

nor will additional amounts be paid with respect to any payment of principal of or interest on any such Note to any United States Alien which is a fiduciary or partnership or other than the sole beneficial owner of such payment, to the extent that a beneficiary or settlor with respect to such fiduciary or a member of such partnership or the beneficial owner would not have been entitled to the additional amounts had such beneficiary, settlor, member or beneficial owner been the Noteholder of such Note.

In this Condition 9.1 “United States Alien” means any corporation, partnership, individual or fiduciary that is, for United States Federal tax purposes, a foreign corporation, a non-resident alien individual, a non-resident fiduciary of a foreign estate or trust, or a foreign partnership one or more of the members of which is, for United States Federal tax purposes, a foreign corporation, a non-resident alien individual or a non-resident fiduciary of a foreign estate or trust.

        9.2   Notwithstanding Condition 9.1 (Additional amounts), if and so long as a certification, identification or other information reporting requirement referred to in Condition 6.4 would be fully satisfied by payment of a backup withholding tax or similar charge, the Issuer may elect, by so stating in the Determination Notice (as defined in Condition 6.5), to have the following provisions of this Condition 9.2 apply in lieu of the provisions of Condition 6.4.

In such event, the Issuer, failing which, if applicable, the Guarantor, will pay as additional amounts such amounts as may be necessary so that every net payment made following the effective date of such requirements outside the United States of America by it, the Guarantor (if applicable) or the Paying Agents of principal or interest due in respect of any Note of which the beneficial owner is a United States Alien (but without any requirement that the nationality, residence or identity of such beneficial owner be disclosed to the Issuer, the Paying Agent or any governmental authority), after withholding or deduction for or on account of such backup withholding tax or similar charge (other than a backup withholding tax or similar charge which (a) is the result of a certification, identification or other information reporting requirement which would not be applicable in the circumstances described in Condition 6.5 or (b) is imposed as a result of any of the circumstances described in Condition 9.1(a), (b) or (f) above or any combination thereof), will not be less than the amount provided for in such Note to be then due and payable.

If the Issuer or, if applicable, the Guarantor elects to pay such additional amounts and so long as they are obligated to pay the same, the Issuer may subsequently redeem the Notes in accordance with Condition 6.4.

As used in these terms and conditions, the “Relevant Date” means the date on which a payment in respect of a Note first becomes due, except that, if the full amount of the moneys payable has not been duly received by the Paying Agent on or prior to such due date, it means the date on which, the full amount of such moneys having been so received, notice to that effect is duly given to the Noteholders in accordance with Condition 12 (Notices).

Bearer Exchange Notice

        9.3   The Issuer (or the Paying Agent) may request a Noteholder of a Bearer Note to provide its name and address or a declaration substantially in the form set out as Appendix 1 to the Form of Bearer Exchange Notice set out in Schedule 6 to the Note Deed Poll for purposes of Australian tax laws. If the Noteholder fails to comply with such request the Issuer (or Paying Agent who shall retain and remit such amount to the Issuer who shall remit to the Australian Taxation Office (“ATO”)) will retain and remit to the ATO an amount as specified in the Income Tax (Bearer Debentures) Act 1971 (of the Commonwealth of Australia) (currently 47%) of the interest otherwise payable to the Noteholder unless the Noteholder demonstrates to the satisfaction of the Issuer (or the Paying Agent) that section 126 of the ITAA does not apply to the relevant interest payment.

No additional amounts will be payable by the Issuer in relation to any withholdings or deductions from any payment in respect of a Bearer Note which is levied on such payment due to the fact that the Note is a Bearer Note.

10   Further Issues

         The Issuer may from time to time, without the consent of any Noteholder, issue further Notes having the same terms and conditions as the Notes of any Series in all respects (or in all respects except for the first payment of interest on them and/or their Denomination) so as to form a single Series with the Notes of that Series issued by the Issuer.

11 Time limit for claims

         A claim against the Issuer for a payment under a Note is void unless such claim is made within 5 years of the relevant Payment Date.

12 Notices

To the Issuer or the Registrar

        12.1   A notice or other communication in connection with a Note to the Issuer or the Registrar must be in writing and may be given by prepaid post or delivery to the address of the addressee or by facsimile to the facsimile number of the addressee specified:

         (a)   in the Information Memorandum; or

         (b)   as otherwise agreed between those parties from time to time and notified to the Noteholders.

To Noteholders

        12.2   A notice or other communication in connection with a Note to Noteholders must be in writing and given by means of:

         (a)   an advertisement published in The Australian Financial Review or any other newspaper or newspapers circulating in Australia generally; or

        (b)   prepaid post (airmail if posted to or from a place outside Australia) or delivery to the address of each Noteholder or any relevant Noteholder as shown in the Register at the close of business 3 Business Days prior to the dispatch of the relevant notice or communication.

If any Bearer Note is then Outstanding, any notice or communication to Noteholders must include an advertisement given in accordance with Condition 12.2(a).

Effective on receipt

        12.3   Unless a later time is specified in it a notice, approval, consent or other communication takes effect from the time it is received, except that if it is received after 5.00pm in the place of receipt or on a non-business day in that place, it is to be taken to be received at 9.00am on the next succeeding Business Day in that place.

Proof of receipt

        12.4   Subject to Condition 12.3 (Effective on receipt), proof of posting of a letter or of dispatch of a facsimile or of publication of a notice is proof of receipt:

         (a)   in the case of a letter, on the third (seventh, if outside Australia) day after posting; and

         (b)   in the case of a facsimile, on receipt by the sender of a successful transmission report; and

         (c)   in the case of publication, on the date of such publication.

13   Meetings of Noteholders

         Meetings of Noteholders may be convened in accordance with the Meeting Provisions. Any such meeting may consider any matters affecting the interests of Noteholders including, without limitation, the variation of the terms of the Notes by the Issuer and the granting of approvals, consents and waivers, and the declaration of an Event of Default.

14   Amendments

To cure ambiguities

        14.1   These terms and conditions and the relevant Pricing Supplement may be amended by the Issuer and the Agency Services Agreement may be amended by the parties to that document without the consent of any Noteholder for the purposes of curing any ambiguity, or correcting or supplementing any defective or inconsistent provisions therein where such amendment does not adversely affect the interests of the relevant Noteholders.

Approval by Noteholders

        14.2   These terms and conditions, the relevant Pricing Supplement and the Agency Services Agreement may otherwise be varied by the Issuer with the approval of the relevant Noteholders by Extraordinary Resolution. No other variation to these terms and conditions has effect in relation to the Noteholders who hold relevant Notes at the date of any amending deed or agreement unless they otherwise agree in writing. A variation which affects only a particular Series or Tranche of Notes may be approved solely by the Noteholders of the relevant Series or Tranche and will take effect in relation to, and bind, all subsequent Noteholders of that Series or Tranche. For the avoidance of doubt, any variation to these terms and conditions, the relevant Pricing Supplement and the Agency Services Agreement approved by the Noteholders of relevant Registered Notes shall be binding on all relevant Noteholders, including Noteholders of relevant Bearer Notes.

15   Registrar

Role of the Registrar

        15.1   In acting under the Agency Services Agreement in connection with the Notes, the Registrar acts solely as agent of the Issuer and does not assume any obligations towards or relationship of agency or trust for or with any of the Noteholders save insofar as that any funds received by the Registrar in accordance with the Agency Services Agreement shall, pending their application in accordance with the Agency Services Agreement, be held by it in a segregated account which shall be held on trust for the persons entitled thereto.

Change of Registrar

        15.2   The Issuer reserves the right at any time to terminate the appointment of the Registrar in accordance with the Agency Services Agreement and to appoint successor or additional registrars, provided, however, that the Issuer must at all times maintain the appointment of a registrar with its specified office in Australia. Notice of any such termination of appointment will be given to the Noteholders in accordance with Condition 12 (Notices).

16   Replacement of Bearer Notes, Coupons and Talons

         Any Bearer Note, Coupons or Talon that becomes mutilated, destroyed, lost or stolen will be replaced by the Issuer at the expense of the relevant Noteholder upon surrender of the Bearer Note, Coupon or Talon to the Paying Agent or upon receipt by the Paying Agent of satisfactory evidence of the destruction, loss or theft thereof.

         In each case, an indemnity in respect of, without limitation, double payment and any costs (including reasonable legal costs and expenses) incurred by the Issuer or the Paying Agent in connection with the replacement, satisfactory to the Issuer and the Paying Agent may be required at the expense of the holder of such Bearer Note, Coupon or Talon before a replacement Bearer Note, Coupon or Talon will be issued.

17   Conversion of Registered Notes into Bearer Notes

Exchange of Registered Notes for Bearer Notes

        17.1   Registered Notes in permanent form with an aggregate principal amount of not less than A$500,000 are exchangeable, at the option of the relevant Noteholder, for a Bearer Note with a principal amount equal to the principal amount of the Registered Note being exchanged. Bearer Notes will be made available for collection by the persons entitled thereto at the specified office of the Paying Agent or, at the request of the person entitled thereto, mailed, at the risk of the person entitled thereto, to the address specified in the Bearer Exchange Notice.

         If a Registered Note is lodged in the Austraclear System, the relevant Austraclear Participant must make arrangements for the Uplift (as defined in the Austraclear Regulations) of its entitlement in that Registered Note from the Austraclear System and for the appropriate entry in relation to that entitlement to be made in the Register before a Bearer Exchange Notice is given to the Paying Agent. The Registrar has agreed to make the relevant entry on the Register upon receipt of a duly completed transfer and acceptance form between Austraclear, as transferor, and the relevant Austraclear Participant uplifting the Registered Note, as transferee.

         The Issuer undertakes to procure that the relevant Bearer Notes will be duly issued in accordance with these terms and conditions.

         Whenever a Registered Note is to be exchanged for a Bearer Note, the Issuer agrees to procure the prompt delivery of the Bearer Note, duly authenticated and where and to the extent applicable, with Coupons and/or Talons attached in an aggregate principal amount equal to the principal amount of the relevant Registered Note to the relevant Noteholder within 120 days of the Noteholder requesting such exchange, but in no event later than the Maturity Date.

Notation on the Register

        17.2   On any occasion on which a Registered Note is exchanged in accordance with Condition 17.1 (Exchange of Registered Notes for Bearer Notes) the Issuer agrees to procure that:

         (a)   the aggregate principal amount of the Bearer Notes which are delivered in definitive form is noted on the Register; and

        (b)   the remaining aggregate principal amount of the Registered Notes (which is the aggregate principal amount thereof less the amount referred to in Condition 17.2(a)) is noted on the Register, whereupon the aggregate principal amount of the Registered Notes shall for all purposes be as most recently so noted.

Exercise of option

        17.3   The option of the Noteholders to exchange Registered Notes for Bearer Notes provided for in this Condition 17 may be exercised by the relevant Noteholder giving a Bearer Exchange Notice to the Paying Agent within the time limits set out in these terms and conditions and stating the principal amount of the Registered Notes in respect of which the option is exercised. Each such notice must be accompanied by the payment to the Paying Agent of A$7,500 (or such lesser amount specified by the Paying Agent) on account of the expenses to be incurred by the Paying Agent or the Issuer in connection with an exchange under this Condition 17 (including, without limitation, the cost of printing the Bearer Notes).

Bearer Exchange Notice

        17.4   A Noteholder may only exercise the option to exchange Registered Notes for Bearer Notes under this Condition 17 if that Noteholder provides a declaration, substantially as set out in Appendix 1 to the Bearer Exchange Notice, that:

        (a)   such Noteholder is not an Australian resident, as defined in the ITAA or, on exchange, will not otherwise be holding the Bearer Notes to which the declaration applies, in the course of carrying on business in Australia at or through a permanent establishment in Australia; and

         (b)   such Noteholder will notify the Issuer if either:

(i)   such Noteholder holds or commences to hold the Bearer Notes, to which the declaration applies, as either an Australian resident, as defined in the ITAA, or in the course of carrying on business in Australia at or through a permanent establishment in Australia; or

(ii)   such Noteholder disposes of any part of such Noteholder’s beneficial interest in the Bearer Notes, to which the declaration applies, to either:

(A)   an Australian resident, as defined in the ITAA; or

(B)   a person who otherwise acquires or would hold that beneficial interest in those Bearer Notes in the course of carrying on business in Australia at or through a permanent establishment in Australia.

Such notification (the “Notice”) to occur within a reasonable time after the occurrence of any of the events set out in Condition 17.4(b) above and in any case prior to the first Interest Payment Date after that occurrence.

Subsequent holders

        17.5   If an option to exchange Registered Notes for Bearer Notes under this Condition 17 has been exercised, any subsequent Noteholder (i.e. other than the person who exercises the exchange option) of the Bearer Notes is also required to notify the Issuer if either Condition 17.4(b)(i) or (ii) occurs.

No representation by the Issuer

         17.6   The Issuer makes no representation that:

         (a)   Bearer Notes can be lodged in or traded through the Austraclear System or the clearing systems maintained by Euroclear Bank S.A./N.V. as operator of the Euroclear System, Clearstream Banking, societe anonyme or any other person; or

         (b)   Bearer Notes will be included in the UBSWA Composite Bond Index or any other index.

18   Currency indemnity

        Each of the Issuer and the Guarantor indemnify the Noteholders and keep them indemnified against:

        (a)   any Liability incurred by any of them arising from the non-payment by the Issuer or the Guarantor of any amount due in respect of a Note or the Guarantee, as the case may be, by reason of any variation in the rates of exchange between those used for the purposes of calculating the amount due under a judgment or order in respect thereof and those prevailing at the date of actual payment by the Issuer or the Guarantor; and

         (b)   any deficiency arising or resulting from any variation in rates of exchange between;

(i)   the date as of which the local currency equivalent of the amounts due or contingently due in respect of a Note or the Guarantee, as the case may be (other than under this Condition 18), is calculated for the purposes of any bankruptcy, insolvency or liquidation of the Issuer or the Guarantor; and

(ii)   the final date for ascertaining the amount of claims in such bankruptcy, insolvency or liquidation.

The amount of such deficiency is not reduced by any variation in rates of exchange occurring between that final date and the date of any distribution of assets in connection with any such bankruptcy, insolvency or liquidation.

The above indemnities constitute obligations of the Issuer and the Guarantor separate and independent from their other obligations under the Transaction Documents and apply irrespective of any indulgence granted by the Noteholders from time to time and continue in full force and effect notwithstanding the judgment or filing of any proof or proofs in any bankruptcy, insolvency or liquidation of the Issuer or the Guarantor for a liquidated sum or sums in respect of amounts due in respect of a Note or the Guarantee, as the case may be (other than under this Condition 18). Any deficiency referred to in Condition 18(b) above, constitutes a loss suffered by the Noteholders and no proof or evidence of any actual loss shall be required by the Issuer or the Guarantor or its liquidator or liquidators.

19  Waiver and Remedies

         No failure of exercise, and no delay in exercising, on the part of any Noteholder, any right under these terms and conditions shall operate as a waiver of any such right nor shall any single or partial exercise thereof preclude any other or future exercise of any such right or the exercise of any other right. Rights under these terms and conditions shall be in addition to all other rights provided by law. No notice or demand given in any case shall constitute a waiver of rights to take other action in the same, similar or other instances without such notice or demand.

20   Governing law, jurisdiction and service of process

Governing law

         20.1   The Notes are governed by the law in force in the New South Wales.

Jurisdiction

        20.2   The Issuer irrevocably and unconditionally submits to the non-exclusive jurisdiction of the courts of New South Wales and courts of appeal from them in relation to any action (including, without limitation, any writ of summons or other originating process or any third or other party notice) arising out of or in relation to the Notes. The Issuer waives any right it has to object to an action being brought in those courts, to claim that the action has been brought in an inconvenient forum, or to claim that those courts do not have jurisdiction.

Process agent

        20.3   Without preventing any other mode of service, any document in an action (including, without limitation, any writ of service of summons or other originating process or any third or other party notice) arising out of or in relation to the Notes may be served on the Issuer by being left for the Issuer with its process agent referred to in Condition 20.4.

        20.4   The Issuer has appointed Dabserv Corporate Services Pty Ltd (ABN 73 001 824 111) currently c/- Mallesons Stephen Jaques, Governor Phillip Tower, 1 Farrer Place, Sydney, NSW 2000, Australia as its agent to receive any document referred to in Condition 20.3. If for any reason that person ceases to be able to act as such, the Issuer must immediately appoint another person with an office located in the Commonwealth of Australia to receive any such document and promptly notify Noteholders of such appointment.

Schedule 2   Meetings Provisions

         The following are the Meetings Provisions which are applicable to the convening of meetings of Noteholders and the passing of resolutions by them.

Interpretation

        1   (a)   Capitalised terms used in these provisions that are not defined below have the meaning given to those terms in the Terms and Conditions unless the contrary intention appears.

         Dealer means a person appointed by the Issuer to act as a dealer in relation to Registered Notes.

         Extraordinary Resolution means:

         (i)   a resolution passed at a Meeting by a majority of at least 75% of the votes cast; or

         (ii)   a resolution made in writing by Noteholders in accordance with paragraph 24(b).

         Form of Proxy means a notice in writing in the usual or common form and available from the Registrar.

         Meeting is deemed to include:

         (i)   if there is only one Noteholder, the attendance of that person or its Proxy on the day and at the place and time specified in accordance with these provisions;

         (ii)   the presence of persons physically, by conference telephone call or by video conference; and

         (iii)   (other than in paragraphs 7, 8, 12 and 14) any adjourned meeting.

         Ordinary Resolution means:

         (i)   a resolution passed at a Meeting by a clear majority of the votes cast; or

         (ii)   a resolution made in writing by Noteholders in accordance with paragraph 24(a).

         Proxy means a person so appointed pursuant to a Form of Proxy.

         Notification Date means the date stated in the copies of a resolution to be made in writing sent for that purpose to Noteholders, which must be no later than the date on which such resolution is first notified to Noteholders in the manner provided in the Terms and Conditions.

         Special Quorum Resolution means an Extraordinary Resolution for the purpose referred to in paragraph 27(a), (b), (h), (i), (j) or (k), any amendment of this definition or the provisions of the table in paragraph 10 expressed to relate to a “Special Quorum Resolution”.

         Terms and Conditions means the terms and conditions applicable to the Notes.

        (b)   If there is only one Noteholder that person must be treated as two persons for the purposes of any quorum requirements of a Meeting.

        (c)   The time and date for determining the identity of a Noteholder who may be counted for the purposes of determining a quorum or the right to attend, speak and vote at a Meeting (including any adjourned Meeting) or sign a resolution made in writing is (in the case of a Noteholder of a Registered Note or a Bearer Note), at the close of business in the place where the Register is kept 7 days prior to the date of the Meeting or, for a resolution made in writing, the Notification Date.

        (d)   References to persons representing a proportion of the Notes are to Noteholders or Proxies holding or representing in aggregate at least that proportion of the Outstanding Principal Amount of the Outstanding Notes.

        (e)   In determining whether the provisions relating to quorum, meeting and voting procedures are complied with, any Notes held by or in the name of the Issuer shall be disregarded.

Proxies

         2   A Noteholder may by a Form of Proxy signed by the Noteholder or, in the case of a corporation, executed under its common seal, executed in accordance with Section 127(1) of the Corporations Law or signed on its behalf by its duly appointed attorney or a person authorised under section 250D of the Corporations Law to act as the corporation’s representative at the Meeting, appoint a Proxy to attend and act on that Noteholder’s behalf in connection with any Meeting or proposed meeting of the Noteholders.

         3   Forms of Proxy are valid for so long as the Notes to which they relate are registered in the name of the appoint or but not otherwise. Despite any other paragraph of these provisions and during the validity of a Form of Proxy, the Proxy is, for all purposes in connection with any Meeting of Noteholders, deemed to be the Noteholder of the Notes to which that Form of Proxy relates.

         4   A person appointed as Proxy in any Form of Proxy:

         (a)   need not be a Noteholder; and

         (b)   may be an officer, employee, representative of or otherwise connected with the Issuer.

         5   Each Form of Proxy, the power of attorney or other authority (if any) under which it is signed, or a copy of such power or authority certified in such manner as the Registrar may require, must be deposited at the office of the Registrar specified in the Form of Proxy not less than 48 hours before the time appointed for holding the Meeting to which the Form of Proxy relates, failing which the Form of Proxy may not be treated as valid unless the chairman of the Meeting decides otherwise before the Meeting or adjourned Meeting proceeds to business.

         6   Any vote given in accordance with the terms of a Form of Proxy will be valid despite the previous revocation or amendment of the Form of Proxy or of any instructions of the Noteholder pursuant to which it was executed, unless notice in writing of such revocation or amendment is received from the Noteholder who has executed such Form of Proxy at the principal office of the Issuer not less than 24 hours before the commencement of the Meeting or adjourned Meeting at which the Form of Proxy is used.

Convening Meetings

         7   A Meeting of the Noteholders:

         (a)   may be convened at any time by the Issuer or the Registrar at the place and time appointed by the convenor; and

         (b)   must be convened by the Registrar at a place and time appointed by it:

(i)   if requested to do so by the Issuer; or

(ii)   if requested to do so by Noteholders of Notes representing in the aggregate at least 10% of the aggregate Outstanding Principal Amount of the Outstanding Notes.

Notice of Meeting

         8   Unless otherwise agreed in writing by each Noteholder, at least 21 days’ notice (exclusive of the day on which the notice is given and of the day on which the Meeting is held) specifying the day, time and place of the Meeting must be given to the Noteholders and, if not given by the Registrar, copied to the Registrar or, if not given by the Issuer, copied to the Issuer. Such notice must be given in the manner provided in the Terms and Conditions, must state generally the nature of the business to be transacted at the Meeting but (except for an Extraordinary Resolution) need not specify the terms of the resolutions to be proposed and must include statements to the effect that Proxies may be appointed until 48 hours before the time fixed for the Meeting but not after that time. The accidental omission to give notice to, or the non-receipt of notice by, any Noteholder does not invalidate the proceedings at any Meeting.

Chairman

         9   A person (who may, but need not, be a Noteholder) nominated in writing by the convenor of the Meeting must take the chair at every such Meeting but if no such nomination is made or if at any Meeting the person nominated is not present within 15 minutes after the time appointed for the holding of such Meeting or is unable or unwilling to chair the Meeting the person or persons present being Noteholders or Proxies must choose one of their number to be chairman. The chairman of an adjourned Meeting need not be the same person as was the chairman of the Meeting from which the adjournment took place.

Quorum

         10  At any Meeting any person or persons present being a Noteholder or Proxy form a quorum and only if they represent the proportion of the Outstanding Principal Amount of the Outstanding Notes shown in the table below.

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

                      Column 1                             Column 2                           Column 3
                                              ----------------------------------- ----------------------------------
         ------------------------------------ ----------------------------------- ----------------------------------

         Purpose of Meeting                   Any Meeting except one referred     Meeting previously adjourned
                                              to in Column 3                      because of lack of quorum
         ------------------------------------ ----------------------------------- ----------------------------------
                                              ----------------------------------- ----------------------------------

                                                     Required proportion                 Required proportion
         ------------------------------------ ----------------------------------- ----------------------------------
         ------------------------------------ ----------------------------------- ----------------------------------

         To pass a Special Quorum Resolution                 75%                                 50%
         ------------------------------------ ----------------------------------- ----------------------------------
         ------------------------------------ ----------------------------------- ----------------------------------

         To pass any other Extraordinary                     50%                                 35%
         Resolution
         ------------------------------------ ----------------------------------- ----------------------------------
         ------------------------------------ ----------------------------------- ----------------------------------

         To pass any Ordinary Resolution                     50%                                 25%
         ------------------------------------ ----------------------------------- ----------------------------------

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

         11   No business (other than the choosing of a chairman) may be transacted at any Meeting unless the requisite quorum is present at the commencement of the relevant business.

Adjournment

         12   If within 15 minutes from the time appointed for any Meeting a quorum is not present for the transaction of any particular business then, subject and without prejudice to the transaction of the business (if any) for which a quorum is present, the Meeting will, if convened on the requisition of Noteholders, be dissolved. In any other case it will stand adjourned until such date, being not less than 14 days nor more than 42 days (in each case exclusive of the day on which the Meeting is held and the day on which the adjourned Meeting is to be held) and to such time and place as the chairman appoints.

         13   If within 15 minutes from the time appointed for any adjourned Meeting a quorum is not present for the transaction of any particular business then, subject and without prejudice to the transaction of the business (if any) for which a quorum is present, the chairman may dissolve such Meeting.

         14   If the meeting is not dissolved in accordance with paragraph 13, the chairman may with the consent of (and must if directed by) any Meeting adjourn the Meeting from time to time and from place to place. Only business which might validly (but for the lack of required quorum) have been transacted at the original Meeting may be transacted at such adjourned Meeting.

Notice of adjourned Meeting

         15   Unless otherwise agreed in writing by each Noteholder, at least 10 days' notice (exclusive of the day on which the notice is given and of the day on which the adjourned Meeting is to be held) of any Meeting adjourned because of lack of a quorum must be given in the same manner as the notice of the original Meeting and such notice must state the quorum required at such adjourned Meeting but need not contain any further information.

Attendees

         16   The Issuer, the Registrar, the Programme Manager and the Noteholders (through their respective representatives and Proxies) and their respective financial and legal advisers are entitled to attend and speak at any Meeting of Noteholders. Otherwise, no person may, except for the chairman, attend or speak at any Meeting of Noteholders.

Voting and polls

         17   Every question submitted to a Meeting will be decided in the first instance by a show of hands and in the case of equality of votes the chairman has, both on a show of hands and on a poll, a casting vote in addition to the vote or votes (if any) to which the chairman may be entitled as a Noteholder.

         18   At any Meeting, unless a poll is (before or on the declaration of the result of the show of hands) demanded by the chairman, the Issuer or by one or more persons holding or representing at least 2% of the aggregate Outstanding Principal Amount of the Outstanding Notes, a declaration by the chairman that a resolution has been carried or carried by a particular majority or lost or not carried by any particular majority is conclusive evidence of the fact without proof of the number or proportion of the votes recorded in favour of or against such resolution.

         19   If at any Meeting a poll is so demanded, it must be taken in such manner and (subject to paragraph 20) either at once or after such an adjournment as the chairman directs. The result of such poll is deemed to be the resolution of the Meeting at which the poll was demanded as at the date of the taking of the poll. The demand for a poll does not prevent the continuance of the Meeting for the transaction of any business other than the question on which the poll has been demanded.

         20   Any poll demanded at any Meeting on the election of a chairman or on any question of adjournment must be taken at the Meeting without adjournment.

Voting entitlements

         21   A Noteholder or, in the case of a Registered Note registered as being owned jointly, the person whose name appears first on the Register as one of the owners of the Registered Note is entitled to vote in respect of the Note either in person or by Proxy.

         22   Subject to paragraphs 17 and 21, at any Meeting:

         (a)   on a show of hands every person who is present and is a Noteholder or a Proxy has one vote; and

         (b)   on a poll every person who is present and is a Noteholder or a Proxy has one vote in respect of each principal amount equal to the Denomination of the Notes in respect of which that person is a Noteholder or a Proxy.

         23   Without affecting the obligations of the Proxies named in any Form of Proxy, any person entitled to more than one vote need not use all votes (or cast all the votes) to which that person is entitled in the same way.

Passing resolutions in writing

         24   A resolution is passed:

         (a)    if it is an Ordinary Resolution, where within one month from the Notification Date, Noteholders representing more than 50% of the aggregate Outstanding Principal Amount of Outstanding Notes as at the Notification Date have signed the resolution; or

         (b)   if it is an Extraordinary Resolution, where within one month from the Notification Date stated in the copies of the resolution sent for that purpose to Noteholders, Noteholders representing at least 75% of the aggregate Outstanding Principal Amount of Outstanding Notes as at the Notification Date have signed the resolution,

and any such resolution is deemed to have been passed on the date on which the last Noteholder whose signature on the resolution caused it to be so passed signed it (as evidenced on its face).

         25   The accidental omission to give a copy of the resolution to, or the non-receipt of such a copy by, any Noteholder does not invalidate a resolution in writing made pursuant to paragraph 24.

         26    A resolution in writing signed by Noteholders may be contained in one document or in several documents in like form each signed by one or more Noteholders.

Use of Extraordinary Resolution

         27   The Noteholders have, in addition to the powers set out above but without affecting any powers of any other person, the following powers exercisable only by Extraordinary Resolution subject to the provisions relating to quorum in paragraph 10:

         (a)   to sanction any proposal by the Issuer for any modification, abrogation, variation or compromise of, or arrangement in respect of, the rights of the Noteholders against the Issuer whether such rights arise under the Notes or otherwise;

         (b)   to sanction the exchange or substitution for the Notes of, or the conversion of the Notes into, other obligations or securities of the Issuer or any other body corporate formed or to be formed;

         (c)   to assent to any modification of the provisions of the Note Deed Poll or the Notes proposed by the Issuer or any Noteholder;

         (d)   to waive or authorise any breach or proposed breach by the Issuer of any of its obligations under the Note Deed Poll or the Notes;

         (e)   to authorise any person to concur in and do anything necessary to carry out and give effect to an Extraordinary Resolution;

         (f)   to give any authority, direction or sanction which is required to be given by Extraordinary Resolution;

         (g)    to appoint any persons (whether Noteholders or not) as a committee or committees to represent the interests of the Noteholders and to confer upon such committee or committees any powers or discretions which the Noteholders could themselves exercise by Extraordinary Resolution;

         (h)   to approve any amendment of the dates of maturity or redemption of the Notes or any date on which a payment of principal or interest is due on the Notes;

         (i)   to approve any reduction or cancellation of an amount payable or, where applicable, modification of the method of calculating the amount payable or modification of the date of payment in respect of the Notes (other than where such reduction, cancellation or modification is provided for in the Terms and Conditions or where such modification is bound to result in an increase in the amount payable);

         (j)   to approve the alteration of the currency in which payments in respect of the Notes are made; and

         (k)   to approve the alteration of the majority required to pass an Extraordinary Resolution.

Use of Ordinary Resolution

         28   The Noteholders have the power exercisable by Ordinary Resolution to do anything for which an Extraordinary Resolution is not required.

Effect and notice of resolution

         29   A resolution passed at a Meeting of Noteholders duly convened and held (or passed by those Noteholders in writing pursuant to paragraph 24) in accordance with these provisions is binding on all Noteholders, whether present or not present and whether or not voting at the Meeting (or signing or not signing the written resolution), and each Noteholder is bound to give effect to it accordingly. The passing of any such resolution is conclusive evidence that the circumstances of such resolution justify its passing.

         30   The Issuer must give notice to the Noteholders of the result of the voting on a resolution within 14 days of such result being known but failure to do so will not invalidate the resolution. Such notice to Noteholders must be given in the manner provided in the Terms and Conditions.

Minutes

         31   Minutes of all resolutions and proceedings at every Meeting (or resolutions otherwise passed in accordance with these provisions) must be duly entered by the Registrar (failing which the Issuer) in minute books to be kept for that purpose by the Registrar (or the Issuer as the case may be) and any such minutes, if purported to be signed by the chairman of the Meeting at which such resolutions were passed or proceedings transacted or by the chairman of the next succeeding Meeting of Noteholders (or, where the resolution is passed otherwise than at a Meeting, if purporting to be signed by a director or secretary of the Registrar or Issuer as the case may be), are conclusive evidence of the matters contained in them. Until the contrary is proved, every Meeting (and every resolution passed in writing) in respect of which minutes have been so made and signed is deemed to have been duly convened and held (or copies of the proposed written resolution duly sent) and all resolutions passed or proceedings transacted at that Meeting are deemed to have been duly passed and transacted (or, where a resolution is passed in writing, such resolution is deemed to have been duly passed).

Further procedures

         32   The Issuer (with the approval of the Programme Manager and the Registrar) may prescribe such further regulations for the holding of, attendance and voting at Meetings as are necessary or desirable and do not adversely affect the interests of the Noteholders.

Notes of more than one Series

         33   Whenever there are Notes Outstanding which do not form one single Series then these provisions have effect subject to the following:

         (a)   a resolution which affects one Series only of Notes is deemed to have been duly passed if passed at a Meeting of the Noteholders of that Series (or, subject to paragraph 33(d), pursuant to paragraph 24);

         (b)    a resolution which affects more than one Series of Notes but does not give rise to a conflict of interest between the Noteholders of any of the Series so affected is deemed to have been duly passed if passed at a single Meeting of the Noteholders of all Series so affected (or, subject to paragraph 33(d), pursuant to paragraph 24);

         (c)   a resolution which affects more than one Series of Notes and gives or may give rise to a conflict of interest between the Noteholders of any of the Series so affected is deemed to have been duly passed if passed at separate Meetings of the Noteholders of each Series so affected (or, subject to paragraph 33(d), pursuant to paragraph 24);

         (d)   in respect of a Meeting referred to in paragraphs 33(a), (b) and (c), these provisions apply with the necessary modifications as though references in them to Notes and Noteholders were references to Notes of the Series in question and to the Noteholders of the Notes of such Series, respectively; and

         (e)   references to the "Registrar" in these Meetings Provisions means the Registrar of each of the relevant Series acting jointly.

         34   The Issuer may rely on, and the Noteholders and the Registrar are bound by, a legal opinion from a leading law firm in the Commonwealth of Australia to the effect that a resolution affects one Series only or, if it affects more than one Series of Notes, does not give rise to a conflict of interest, for the purposes of determining the Meeting or Meetings which need to be held for the purposes of paragraph 33.

Schedule 3    Form of Bearer Note

[On the face of Bearer Note]

COUNTRYWIDE HOME LOANS, INC.
(the "Issuer")
(incorporated with limited liability in the State of New York)

Unconditionally and irrevocably guaranteed by
COUNTRYWIDE CREDIT INDUSTRIES, INC.
(incorporated with limited liability in the State of Delaware)

[Aggregate Principal Amount of Tranche][Title of Notes]
under the A$2,000,000,000 Medium Term Note Programme

Series No:      [       ] Serial No:      [       ]

Tranche No:      [        ]

[Denomination]

ANY UNITED STATES PERSON WHO HOLDS THIS NOTE WILL BE SUBJECT TO LIMITATIONS UNDER THE UNITED STATES FEDERAL INCOME TAX LAWS, INCLUDING THE LIMITATIONS PROVIDED IN SECTIONS 165(j) AND 1287(a) OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED.

THE NOTES HAVE NOT BEEN AND WILL NOT BE REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR ANY APPLICABLE STATE SECURITIES OR "BLUE SKY" LAWS AND NEITHER THE NOTES NOR ANY INTEREST THEREIN MAY BE SOLD, TRANSFERRED, PLEDGED OR OTHERWISE DISPOSED OF TO OR FOR THE ACCOUNT OR BENEFIT OF A US PERSON (AS DEFINED IN REGULATION S UNDER THE SECURITIES ACT) IN THE ABSENCE OF SUCH REGISTRATION OR AN EXEMPTION UNDER THE SECURITIES ACT AND THE RULES AND REGULATIONS THEREUNDER OR ANY APPLICABLE STATE SECURITIES LAWS.

This Bearer Note is one of a Series of Notes of [Specified Currency(ies) and Specified Denomination(s)] of the Issuer ("Notes") with Coupons attached and having the benefit of a Deed Poll Guarantee and Indemnity by Countrywide Credit Industries, Inc. References herein to the Conditions shall be to the Terms and Conditions endorsed hereon as supplemented, replaced and modified by the relevant information (appearing in the Pricing Supplement (the "Pricing Supplement")) endorsed hereon but, in the event of any conflict between the provisions of the said Conditions and such information in the Pricing Supplement, such information in the Pricing Supplement will prevail. Words and expressions defined in the Conditions shall bear the same meanings when used in this Note.

The Issuer, subject to and in accordance with the Conditions, promises to pay to the bearer hereof on the Maturity Date or on such earlier date as this Bearer Note may become due and repayable in accordance with the Conditions, the amount payable on redemption of this Note and to pay interest (if any) on the principal amount of this Bearer Note calculated and payable as provided in the Conditions together with any other sums payable under the Conditions.

This Bearer Note shall not/Neither this Bearer Note nor any of the interest coupons or talons appertaining hereto shall be valid for any purpose until this Bearer Note has been authenticated for and on behalf of the Paying Agent.

This Bearer Note is governed by, the laws in force in New South Wales.

AS WITNESS the manual/facsimile signature of an authorized officer on behalf of the Issuer.

By: [manual/facsimile signature]
Authorized Officer)

ISSUED in [       ] as of [       ]

AUTHENTICATED for and on behalf of
COMPUTERSHARE INVESTOR
SERVICES PTY LIMITED
as Paying Agent
without recourse, warranty or liability

By:

(duly authorized)

[On the reverse of Bearer Note]

TERMS AND CONDITIONS

[Reproduce from Schedule 1 to the Note Deed Poll]

[At the foot of the Terms and Conditions]

RELEVANT PRICING SUPPLEMENT

[To be attached]

PAYING AGENT

COMPUTERSHARE INVESTOR SERVICES PTY LIMITED
Level 3
60 Carrington Street
Sydney NSW 2000
Australia

Schedule 4 Form of Coupon

[On the front of Coupon:]

COUNTRYWIDE HOME LOANS, INC.

[Aggregate Principal Amount of Tranche][Title of Notes]
under the A$2,000,000,000 Medium Term Note Programme

ANY UNITED STATES PERSON WHO HOLDS THIS OBLIGATION WILL BE SUBJECT TO LIMITATIONS UNDER THE UNITED STATES FEDERAL INCOME TAX LAWS, INCLUDING THE LIMITATIONS PROVIDED IN SECTIONS 165(j) AND 1287(a) OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED.

Series No:       [       ] Serial Number of the Bearer Note:   [        ]

Tranche No:       [       ]

Coupon for [set out the amount due] due on [date] [Interest Payment Date falling in [month, year]]*

Such amount is payable (subject to the Terms and Conditions applicable to the Bearer Note to which this Coupon appertains, which shall be binding on the holder of this Coupon whether or not it is for the time being attached to such Bearer Note) against surrender of this Coupon at the specified office of the Paying Agent set out on the reverse hereof (or any other or further paying agents and/or specified offices from time to time designated for the purpose by notice duly given in accordance with such Terms and Conditions).

[The Bearer Note to which this Coupon appertains may, in certain circumstances specified in such Terms and Conditions, fall due for redemption before the due date in relation to this Coupon. In such event, this Coupon will become void and no payment will be made in respect hereof.]

AS WITNESS the Issuer has caused this Coupon to be duly executed by the manual/facsimile signature of an Authorized Officer on behalf of the Issuer.

By: [manual/facsimile signature]
Authorized Officer)

[On the reverse of Coupon]

PAYING AGENT

COMPUTERSHARE INVESTOR SERVICES PTY LIMITED
Level 3
60 Carrington Street
Sydney NSW 2000
Australia

Schedule 5 Form of Talon

[On the front of Talon]

COUNTRYWIDE HOME LOANS, INC.

[Aggregate Principal Amount of Tranche][Title of Notes]
under the A$2,000,000,000 Medium Term Note Programme

Series No:       [       ] Serial Number of the Bearer Note:   [        ]

Tranche No:       [       ]

Talon for further Coupons

ANY UNITED STATES PERSON WHO HOLDS THIS OBLIGATION WILL BE SUBJECT TO LIMITATIONS UNDER THE UNITED STATES FEDERAL INCOME TAX LAWS, INCLUDING THE LIMITATIONS PROVIDED IN SECTIONS 165(j) AND 1287(a) OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED.

After all the Coupons appertaining to the Bearer Note to which this Talon appertains have matured, further Coupons [(including, where appropriate, a Talon for further Coupons)] will be issued at the specified office of the Paying Agent set out in the reverse hereof (or any other or further paying agents and/or specified offices from time to time designated by notice duly given in accordance with the Terms and Conditions applicable to the Bearer Note to which this Talon appertains (which shall be binding on the holder of this Talon whether or not it is for the time being attached to such Bearer Note)) upon production and surrender of this Talon upon and subject to such Terms and Conditions.

Under the said Terms and Conditions, such Bearer Note may, in certain circumstances, fall due for redemption before the original due date for exchange of this Talon and in any such event this Talon shall become void and no exchange shall be made in respect hereof.

[On the reverse of Talon]

PAYING AGENT

COMPUTERSHARE INVESTOR SERVICES PTY LIMITED
Level 3
60 Carrington Street
Sydney NSW 2000
Australia

Schedule 6 Form of Bearer Exchange Notice

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

COUNTRYWIDE HOME LOANS, INC.

[Aggregate Principal Amount of Tranche][Title of Issue]
under the A$2,000,000,000 Medium Term Note Programme

Series No:       [        ]

Tranche No:       [        ]

FORM OF BEARER EXCHANGE NOTICE

.................................. being the Noteholder of [       ] principal amount of Registered Notes, hereby exercises the option set out in Condition 17 of the Registered Notes to have such Registered Notes exchanged for Bearer Notes in an aggregate principal amount equal to the principal amount of the Registered Notes being exchanged and directs that such Bearer Notes [be made available for collection by it from the Paying Agent's specified office/be mailed to the (respective) address(es) of the registered holder(s) as set forth below]*.

Name(s) and address(es) of registered holder(s):

By:.....................................
        (duly authorized)

Notes:

1 This notice must be given in respect of Registered Notes with an aggregate principal amount of not less than A$500,000.

2 Bearer Notes are not required to be delivered pursuant to this notice until 120 days after the Noteholder delivers this notice to the Paying Agent, but in no event later than the Maturity Date.

3 This notice must be accompanied by the payment to the Paying Agent of A$7,500 (or such lesser amount specified by the Paying Agent).

* Delete and complete, as appropriate.

APPENDIX 1 TO BEARER EXCHANGE NOTICE

This is an Appendix to the Bearer Exchange Notice and sets out the form of the Declaration to be given by the Noteholder of a Bearer Note to the Issuer.

COUNTRYWIDE HOME LOANS, INC.

[Aggregate Principal Amount of Tranche][Title of Notes]
under the A$2,000,000,000 Medium Term Note Programme

Series No:        [       ]

Tranche No:       [       ]

FORM OF EXCHANGE DECLARATION

I declare that I am not an Australian resident, as defined in the Income Tax Assessment Act 1936 (of the Commonwealth of Australia), nor will I otherwise hold the Bearer Notes, to which this declaration applies, in the course of carrying on business in Australia at or through a permanent establishment in Australia.

I further undertake to notify the Issuer if I either:

(a)   hold or commence to hold the Bearer Notes, to which this declaration applies, as either:

(i)   an Australian resident, as defined in the Income Tax Assessment Act 1936 (of the Commonwealth of Australia); or

(ii)   otherwise in the course of carrying on business in Australia at or through a permanent establishment in Australia; or

(b)   dispose of any part of the beneficial interest in the Bearer Notes, to which this declaration applies, to, at the time of such disposal, either:

(i)   an Australian resident, as defined in the Income Tax Assessment Act 1936 (of the Commonwealth of Australia); or

(ii)   a person who otherwise acquires or would hold the Bearer Notes in the course of carrying on business in Australia at or through a permanent establishment in Australia.

and I undertake to provide such notification (the "Notice") within a reasonable time after the occurrence of either (a) or (b) above and in any case prior to the first Interest Payment Date after that occurrence.

Name and Address:   [        ]

Signed:   ......................................
         (duly authorised)

Date:   [        ]

Appendix 1 Form of Austraclear Certificate

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

COUNTRYWIDE HOME LOANS, INC.
[Aggregate Principal Amount of Tranche] [Title of Notes] ("Registered Notes")
under the A$2,000,000,000 Medium Term Note Programme

This is to certify that, based solely on certifications we have received in writing, by tested telex or by electronic transmission from member organizations appearing in our records as persons being entitled to interest on, or a portion of, the principal amount set forth below (our "Member Organizations") substantially to the effect set forth in the Pricing Supplement as of the date hereof, [ ] principal amount of the above-captioned Registered Notes (i) is owned by persons that are not citizens or residents of the United States, domestic partnerships, domestic corporations or estates or trusts described in Section 7701(a)(30) of the Internal Revenue Code of 1986, as amended (taking into account changes thereto and associated effective dates, elections, and transition rules) ("United States persons"), (ii) is owned by United States persons that (a) are foreign branches of United States financial institutions (as defined in U.S. Treasury Regulations Section 1.165-12(c)(1) ("financial institutions")) purchasing for their own account or for resale, or (b) acquired the Registered Notes through and are holding through on the date hereof (as such terms "acquired through" and "holding through" are described in U.S. Treasury Regulations Section 1.163-5(c)(2)(i)(D)(6)) foreign branches of United States financial institutions (and in either case (a) or (b), each such United States financial institution has agreed, on its own behalf or through its agent, that we may advise the Issuer or the Issuer's agent that it will comply with the requirements of Section 165(j)(3)(A), (B) or (C) of the Internal Revenue Code of 1986, as amended, and the regulations thereunder), or (iii) is owned by United States or foreign financial institutions for purposes of resale during the restricted period (as defined in U.S. Treasury Regulations Section 1.163-5(c)(2)(i)(D)(7)), and to the further effect that United States or foreign financial institutions described in clause (iii) above (whether or not also described in clause (i) or (ii)) have certified that they have not acquired the Registered Notes for purposes of resale directly or indirectly to a United States person or to a person within the United States or its possessions. Any such certification by electronic transmission satisfies the requirements set forth in U.S. Treasury Regulations Section 1.163-5(c)(2)(i)(D)(3)(ii). We will retain all certifications from our Member Organizations for the period specified in U.S. Treasury Regulations Section 1.163-5(c)(2)(i)(D)(3)(i).

As used herein, "United States" means the United States of America (including the States and the District of Columbia); and its "possessions" include Puerto Rico, the U.S. Virgin Islands, Guam, American Samoa, Wake Island and the Northern Mariana Islands.

We further certify (i) that we are not making available herewith for exchange (or, if relevant, exercise of any rights or collection of any interest) any portion of the Registered Notes excepted in such certifications and (ii) that as of the date hereof we have not received any notification from any of our Member Organizations to the effect that the statements made by such Member Organizations with respect to any portion of the part submitted herewith for exchange (or, if relevant, exercise of any rights or collection of any interest) are no longer true and cannot be relied upon as at the date hereof.

We understand that this certification is required in connection with certain tax laws and, if applicable, certain securities laws of the United States. In connection therewith, if administrative or legal proceedings are commenced or threatened in connection with which this certification is or would be relevant, we irrevocably authorize you to produce this certification to any interested party in such proceedings.

Date:   [       ]*

Austraclear Limited, as operator of the Austraclear System

By:   [authorized signature]

Appendix 2     Form of Austraclear Participant/Noteholder Certificate

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

COUNTRYWIDE HOME LOANS, INC.
[Aggregate Principal Amount of Tranche] [Title of Notes] ("Registered Notes")
under the A$2,000,000,000 Medium Term Note Programme

This is to certify that as of the date hereof, and except as set forth below, the above-captioned Registered Notes held by [you for our account/us] (i) are owned by persons that are not citizens or residents of the United States, domestic partnerships, domestic corporations or estates or trusts described in Section 7701(a)(30) of the Internal Revenue Code of 1986, as amended (taking into account changes thereto and associated effective dates, elections, and transition rules) ("United States persons"), (ii) are owned by United States person(s) that (a) are foreign branches of a United States financial institution (as defined in U.S. Treasury Regulations Section 1.165-12(c)(1)) ("financial institutions") purchasing for their own account or for resale, or (b) acquired the Registered Notes through and are holding through on the date hereof (as such terms "acquired through" and "holding through" are described in U.S. Treasury Regulations Section 1.163-5(c)(2)(i)(D)(6)) foreign branches of United States financial institutions (and in either case (a) or (b), each such United States financial institution hereby agrees, on its own behalf or through its agent, that you may advise the Issuer or the Issuer's agent that it will comply with the requirements of Section 165(j)(3)(A), (B) or (C) of the Internal Revenue Code of 1986, as amended, and the regulations thereunder), or (iii) are owned by United States or foreign financial institution(s) for purposes of resale during the restricted period (as defined in U.S. Treasury Regulations Section 1.163-5(c)(2)(i)(D)(7)), and in addition if the owner of the Registered Notes is a United States or foreign financial institution described in clause (iii) above (whether or not also described in clause (i) or (ii)) this is further to certify that such financial institution has not acquired the Registered Notes for purposes of resale directly or indirectly to a United States person or to a person within the United States or its possessions. Any such certification by electronic transmission satisfies the requirements set forth in U.S. Treasury Regulations Section 1.163-5(c)(2)(i)(D)(3)(ii).

As used herein, "United States" means the United States of America (including the States and the District of Columbia); and its "possessions" include Puerto Rico, the U.S. Virgin Islands, Guam, American Samoa, Wake Island and the Northern Mariana Islands.

We undertake to advise you promptly by facsimile or electronic transmission on or prior to [the date on which you intend to submit your certification relating to the Registered Notes held by you for our account in accordance with your operating procedures/ the Exchange Date (as defined in the terms and conditions of the Registered Notes)] if any applicable statement herein is not correct on such date, and in the absence of any such notification it may be assumed that this certification applies as of such date.

This certification excepts and does not relate to [ ] of such interest in the above Registered Notes in respect of which we are not able to certify and as to which we understand exercise of any rights (or collection of any interest) cannot be made until we do so certify.

We understand that this certification is required in connection with certain tax laws and, if applicable, certain securities laws of the United States and, if required shall be retained in the manner specified in such laws. In connection therewith, if administrative or legal proceedings are commenced or threatened in connection with which this certification is or would be relevant, we irrevocably authorize you to produce this certification to any interested party in such proceedings.

Date:    [       ]*

[Account Holder] as or as agent for the beneficial owner of the Registered Notes.

By:   [authorized signature]

Execution page
- ---------------------------------------------------------------------------------------------------------------------------------------

EXECUTED AS A DEED by                           )
                                                )
COUNTRYWIDE HOME LOANS, INC. acting under the   )
authority of that company in the presence of:   )


 ............................................
Signature of witness                                 ............................................
                                                     By executing this deed the authorised
 ............................................         signatory states that it has received no
Name of witness (block letters)                      notice of revocation of its signing
                                                     authority.
 ............................................
Address of witness

 ............................................
Occupation of witness

Note Deed Poll

relating to the
A$2,000,000,000
Medium Term Note Programme
of Countrywide Home Loans, Inc.

Countrywide Home Loans, Inc. as Issuer

FOR THE PURPOSES OF UNITED STATES FEDERAL INCOME TAX LAWS, THE REGISTERED NOTES AND THE BEARER NOTES ARE BOTH “BEARER OBLIGATIONS”. ANY UNITED STATES PERSON WHO HOLDS A NOTE WILL BE SUBJECT TO LIMITATIONS UNDER THE UNITED STATES FEDERAL INCOME TAX LAWS, INCLUDING THE LIMITATIONS PROVIDED IN SECTIONS 165(j) AND 1287(a) OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED.

THE NOTES HAVE NOT BEEN AND WILL NOT BE REGISTERED UNDER THE UNITED STATES OF AMERICA SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”) OR ANY APPLICABLE STATE SECURITIES OR “BLUE SKY” LAWS AND NEITHER THE NOTES NOR ANY INTEREST THEREIN MAY BE SOLD, TRANSFERRED, PLEDGED OR OTHERWISE DISPOSED OF TO OR FOR THE ACCOUNT OR BENEFIT OF A US PERSON (AS DEFINED IN REGULATION S UNDER THE SECURITIES ACT) IN THE ABSENCE OF SUCH REGISTRATION OR AN EXEMPTION UNDER THE SECURITIES ACT AND THE RULES AND REGULATIONS THEREUNDER OR ANY APPLICABLE STATE SECURITIES LAW. THE ISSUER HAS NOT BEEN AND WILL NOT BE REGISTERED AS AN INVESTMENT COMPANY UNDER THE UNITED STATES INVESTMENT COMPANY ACT OF 1940, AS AMENDED.

FOR UNITED STATES FEDERAL INCOME TAX AND SECURITIES LAWS PURPOSES, EACH TRANCHE OF REGISTERED NOTES AND, FOR THE PURPOSES OF THAT TRANCHE OF REGISTERED NOTES ONLY, THIS DEED POLL, CONSTITUTE A TEMPORARY GLOBAL NOTE ISSUED IN ACCORDANCE WITH REGULATION S UNDER THE SECURITIES ACT AND WILL BECOME A PERMANENT GLOBAL NOTE ON OR AFTER THE EXCHANGE DATE UPON AND TO THE EXTENT OF DELIVERY TO THE PAYING AGENT OF (A) A CERTIFICATE OR CERTIFICATES FROM AUSTRACLEAR LIMITED (AS OPERATOR OF THE AUSTRACLEAR SYSTEM) BASED UPON A WRITTEN CERTIFICATION OR CERTIFICATIONS FROM THE MEMBER ORGANISATIONS SHOWN IN THE RECORDS OF AUSTRACLEAR LIMITED AS HOLDING AN INTEREST IN THE NOTE AND DATED NOT EARLIER THAN THE EXCHANGE DATE IN SUBSTANTIALLY THE FORM SET OUT IN APPENDICES 1 AND 2 OF THIS DEED POLL RESPECTIVELY; OR (B) WHERE THE TRANCHE OF REGISTERED NOTES IS NOT SETTLED THROUGH THE AUSTRACLEAR SYSTEM, A CERTIFICATE OR CERTIFICATES FROM THE RELEVANT NOTEHOLDERS IN SUBSTANTIALLY THE FORM SET OUT IN APPENDIX 2 OF THIS DEED POLL.

Mallesons Stephen Jaques
Solicitors
Rialto
525 Collins Street
Melbourne Vic 3000
Telephone (61 3) 9643 4000
Fax (61 3) 9643 5999
Ref: BSR:DCO

- ---------------------------------------------------------------------------------------------------------------------------------------
Contents                          Note Deed Poll
- ---------------------------------------------------------------------------------------------------------------------------------------

                                  1    Interpretation                                                             1

                                           Terms and Conditions                                                   1
                                           Definitions                                                            1

                                  2    The Registered Notes                                                       1

                                           Creation of Registered Notes                                           1
                                           Form of Notes                                                          1
                                           Title passes by registration                                           2
                                           Undertaking to pay                                                     2
                                           Appointment of Registrar                                               2
                                           Appointment of Paying Agent                                            2

                                  3    Rights and obligations of Noteholders                                      2

                                           Benefit and entitlement                                                2
                                           Rights independent                                                     3
                                           Noteholders bound                                                      3
                                           Payments of interest                                                   3
                                           Direction to hold Deed Poll for Registered Notes                       3

                                  4    Governing law, jurisdiction and service of process                         3

                                           Governing law                                                          3
                                           Submission to jurisdiction                                             3
                                           Service of process                                                     3
                                           Process agent                                                          4

                                  Schedule 1     Terms and Conditions of the Notes                                5


                                  Schedule 2     Meetings Provisions                                             36


                                  Schedule 3     Form of Bearer Note                                             44


                                  Schedule 4      Form of Coupon                                                 47


                                  Schedule 5      Form of Talon                                                  49


                                  Schedule 6      Form of Bearer Exchange Notice                                 51


                                  Appendix 1      Form of Austraclear Certificate                                53


                                  Appendix 2      Form of Austraclear Participant/Noteholder Certificate           54

- --------

*Only necessary where Interest Payment Dates on Notes bearing a floating rate of interest are subject to adjustment in accordance with an Applicable Business Day Convention.
* To be dated not earlier than the Exchange Date.

* To be dated not earlier than fifteen days before the Exchange Date or, as the case may be, the relevant Interest Payment Date.

EX-10

FIRST AMENDMENT TO
COUNTRYWIDE CREDIT INDUSTRIES, INC.
DEFERRED COMPENSATION PLAN
Originally Effective August 1, 1993
Amended and Restated Effective March 1, 2000

        Countrywide Credit Industries, Inc., a Delaware corporation (the “Company”), pursuant to the power granted to it by Section 11.2 of the Countrywide Credit Industries, Inc. Deferred Compensation Plan, (the “Plan”), hereby amends the Plan, by action of its Board of Directors, to comply with Rules and Regulations for Administration and Enforcement; Claims Procedures issued by the Department of Labor effective January 1, 2002.

        Article 14, Claims Procedures, is deleted and new Article 14 is inserted in its place as follows:

Article 14
Claims Procedures

14.1     Presentation of Claim. Any Participant or Beneficiary of a deceased Participant (such Participant or Beneficiary being referred to below as a “Claimant”) may deliver to the Committee a written claim for a determination with respect to the amounts distributable to such Claimant from the Plan. If such a claim relates to the contents of a notice received by the Claimant, the claim must be made within 60 days after such notice was received by the Claimant. All other claims must be made within 180 days of the date on which the event that caused the claim to arise occurred. The claim must state with particularity the determination desired by the Claimant.

14.2     Notification of Decision. The Committee shall consider a Claimant’s claim within a reasonable time; provided, that claims based on Disability shall be considered within 45 days, unless, within such time, the Committee notifies the Claimant in writing that a 30-day extension is required pursuant to Labor Regulation 2560.503-1. Once a decision is made, the Committee shall notify the Claimant in writing:

(a) that the Claimant's requested determination has been made, and that the claim has been allowed in full; or

(b) that the Committee has reached a conclusion contrary, in whole or in part, to the Claimant’s requested determination, and such notice must set forth in a manner calculated to the understood by the Claimant:

(i) the specific reason(s) for the denial of the claim, or any part of it;

(ii) the specific reference(s) to pertinent provisions of the Plan upon which such denial was based;

(iii) a description of any additional material or information necessary for the Claimant to perfect the claim, and an explanation of why such material or information is necessary; and

(iv) an explanation of the claim review procedure set forth in Section 14.3 below, including Claimants right to bring a civil action as described in Section 14.5

14.3     Review of a Denied Claim. Within 60 days (180 days for a claim based on Disability) after receiving a notice from the Committee that a claim has been denied, in whole or in part, a Claimant (or the Claimant’s’ duly authorized representative) may file with the Committee a written request for a review of the denial of the claim. Therefore, but not later than 30 days after the review procedure began, the Claimant (or the Claimant’s duly authorized representative):

(a) may review pertinent documents;

(b) may submit written comments or other documents; and/or

(c) may request a hearing, which the Committee, in its sole discretion, may grant.

14.4     Decision on Review. The Committee shall render its decision on review promptly, and not later than 60 days (45 days for a claim based on Disability) after the filing of a written request for review of the denial, unless a hearing is held or other special circumstances require additional time, in which case the Committee’s decision must be rendered within 120 days after such date; provided, that this period shall be up to one 45-day extension for claims based on Disability. Such decision must be written in a manner calculated to be understood by the Claimant, and it must contain:

(a) specific reasons for the decision;

(b) specific reference(s) to the pertinent Plan provisions upon which the decision was based; and

(c) such other matters as the Committee deems relevant.

14.5      Legal Action. A Claimant's compliance with the foregoing provisions of this Article 14 is a mandatory prerequisite to a Claimant's right to commence any legal action with respect to any claim for benefits under this Plan.

         The Company has caused this Amendment to be signed by its duly authorized officer as of the date written below:

Countrywide Credit Industries, Inc.

By: ------------------------------------------------

          Anne D. McCallion
          Managing Director
          Chief Administrative Officer

Date: ----------------------------------------------

EX-10

INTERIM SHORT TERM FACILITY EXTENSION AMENDMENT
(September, 2001)

        THIS SHORT TERM FACILITY EXTENSION AMENDMENT (the “Amendment”) is made and dated as of the 19th day of September, 2001 by and among COUNTRYWIDE HOME LOANS, INC. (the “Company”), COUNTRYWIDE CREDIT INDUSTRIES, INC. (the “Parent”), the undersigned financial institutions constituting the Short Term Lenders under (and as that term and capitalized terms not otherwise defined herein are defined in) the Revolving Credit Agreement described below, and BANKERS TRUST COMPANY, as Credit Agent (in such capacity, the “Credit Agent”).

RECITALS

        A. Pursuant to that certain Revolving Credit Agreement dated as of September 24, 1997 by and among the Company, the Lenders party thereto, including, without limitation, the Short Term Lenders, the Credit Agent and others (as amended, extended and replaced from time to time, the “Revolving Credit Agreement”), the Short Term Lenders agreed to extend credit to the Company in the form of a 364-day revolving credit facility.

        B. The Company has requested that the Short Term Lenders agree to extend the Short Term Facility Maturity Date and the Short Term Lenders have agreed to do so on the terms and subject to the conditions set forth herein.

        NOW, THEREFORE, in consideration of the above Recitals and for other good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, the parties hereto hereby agree as follows:

AGREEMENT

        1.   Interim Extension of Current Short Term Facility Maturity Date. To reflect the agreement of the Short Term Lenders to extend the current Short Term Facility Maturity Date on an interim basis, effective as of the Amendment Effective Date (as defined in Paragraph 5 below), the definition of “Short Term Facility Maturity Date” set forth in the Glossary attached to the Revolving Credit Agreement is hereby amended to delete the date “September 19, 2001” appearing therein and to replace the same with the date “October 15, 2001".

        2.   Extension of Short Term Facility Fee Letter. To reflect the agreement of the Company to continue to pay to the Short Term Lenders a facility fee during the period from the current Short Term Facility Maturity Date to the Short Term Facility Maturity Date as extended hereunder, the Company hereby reaffirms the Short Term Facility Fee Letter dated as of September 24, 1997 and agrees that the “Short Term Facility Maturity Date” referred to therein shall mean the Short Term Facility Maturity Date as extended hereunder.

        3.   Reaffirmation of Loan Documents. The Company hereby affirms and agrees that: (a) the execution and delivery by the Company of and the performance of its obligations under this Amendment shall not in any way amend, impair, invalidate or otherwise affect any of the obligations of the Company or the rights of the Credit Agent, the Lenders or any other Person under the Revolving Credit Agreement or any other Credit Document, (b) the term “Obligations” as used in the Credit Documents includes, without limitation, the Obligations of the Company under the Revolving Credit Agreement as amended hereby, and (c) the Revolving Credit Agreement as amended hereby and the other Credit Documents remain in full force and effect.

        4.   Reaffirmation of Guaranty and Subordination Agreement. The Parent hereby affirms and agrees that: (a) the execution and delivery by the Company and the performance of its obligations under this Amendment shall not in any manner or to any extent affect any of the obligations of the Parent or the rights of the Credit Agent, the Lenders or any other Person under the Guaranty, the Subordination Agreement or any other document or instrument made or given by the Parent in connection therewith, (b) the term “Obligations” as used in the Guaranty and the Subordination Agreement includes, without limitation, the Obligations of the Company under the Revolving Credit Agreement as amended hereby, and (c) the Guaranty and the Subordination Agreement remain in full force and effect.

         5.   Amendment Effective Date. This Amendment shall be effective as of the day and year first above written upon the date (the "Amendment Effective Date") that there has been delivered to the Credit Agent:

                    (a)   A copy of this Amendment, duly executed by the Company, the Parent, the Credit Agent and each Short Term Lender; and

                    (b)    From the Company and the Parent, such corporate resolutions, incumbency certificates and other authorizing documentation as the Credit Agent may request.

As required pursuant to Paragraph 13(b) of the Revolving Credit Agreement, following the Amendment Effective Date the Credit Agent shall provide a copy of this Amendment to all parties to the Credit Documents.

         6.   Representations and Warranties. The Company and the Parent hereby represent and warrant to the Credit Agent and each of the Short Term Lenders that at the date hereof and at and as of the Amendment Effective Date:

                    (a)   Each of the Company and the Parent has the corporate power and authority and the legal right to execute, deliver and perform this Amendment and has taken all necessary corporate action to authorize the execution, delivery and performance of this Amendment. This Amendment has been duly executed and delivered on behalf of the Company and the Parent and constitutes the legal, valid and binding obligation of such Person, enforceable against such Person in accordance with its terms.

                    (b)   Both prior to and after giving effect hereto: (1) the representations and warranties of the Company and the Parent contained in the Credit Documents are accurate and complete in all respects, and (2) there has not occurred an Event of Default or Potential Default.

         7.   No Other Amendment. Except as expressly amended hereby, the Credit Documents shall remain in full force and effect as written and amended to date.

         8.   Counterparts. This Amendment may be executed in any number of counterparts, each of which when so executed shall be deemed to be an original and all of which when taken together shall constitute one and the same agreement.

[Signature Pages Following]

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

                                             COUNTRYWIDE HOME LOANS, INC.,
                                             a New York corporation



                                             By
                                                ----------------------------------------------------------
                                             Name
                                                  --------------------------------------------------------
                                             Title
                                                   -------------------------------------------------------


                                             COUNTRYWIDE CREDIT INDUSTRIES, INC.,
                                             a Delaware corporation



                                             By
                                                ----------------------------------------------------------
                                             Name
                                                  --------------------------------------------------------
                                             Title
                                                   -------------------------------------------------------


                                             BANKERS TRUST COMPANY,
                                             as Credit Agent



                                             By
                                                ----------------------------------------------------------
                                             Name
                                                  --------------------------------------------------------
                                             Title
                                                   -------------------------------------------------------


                                             BANCO DI NAPOLI S.p.A., NEW YORK BRANCH, as a Short Term Lender



                                             By
                                                ----------------------------------------------------------
                                             Name
                                                  --------------------------------------------------------
                                             Title
                                                   -------------------------------------------------------


                                             By
                                                ----------------------------------------------------------
                                             Name
                                                  --------------------------------------------------------
                                             Title _______________________________________________________



                                             BANCA DI ROMA, SAN FRANCISCO BRANCH, as a Short Term Lender



                                             By __________________________________________________________
                                                ----------------------------------------------------------
                                             Name ________________________________________________________
                                                  --------------------------------------------------------
                                             Title _______________________________________________________
                                                   -------------------------------------------------------


                                             By __________________________________________________________
                                                ----------------------------------------------------------
                                             Name ________________________________________________________
                                                  --------------------------------------------------------
                                             Title _______________________________________________________



                                             BANK OF AMERICA, N.A., as a Short Term Lender



                                             By __________________________________________________________
                                                ----------------------------------------------------------
                                             Name ________________________________________________________
                                                  --------------------------------------------------------
                                             Title _______________________________________________________
                                                   -------------------------------------------------------


                                             THE BANK OF NEW YORK, as a Short Term Lender



                                             By __________________________________________________________
                                                ----------------------------------------------------------
                                             Name ________________________________________________________
                                                  --------------------------------------------------------
                                             Title _______________________________________________________
                                                   -------------------------------------------------------


                                             BANK ONE, NA, as a Short Term Lender



                                             By __________________________________________________________
                                                ----------------------------------------------------------
                                             Name ________________________________________________________
                                                  --------------------------------------------------------
                                             Title _______________________________________________________
                                                   -------------------------------------------------------


                                             BANKERS TRUST COMPANY, as a Short Term Lender



                                             By __________________________________________________________
                                                ----------------------------------------------------------
                                             Name ________________________________________________________
                                                  --------------------------------------------------------
                                             Title _______________________________________________________
                                                   -------------------------------------------------------


                                             BNP PARIBAS, as a Short Term Lender



                                             By __________________________________________________________
                                                ----------------------------------------------------------
                                             Name ________________________________________________________
                                                  --------------------------------------------------------
                                             Title _______________________________________________________
                                                   -------------------------------------------------------


                                             By __________________________________________________________
                                                ----------------------------------------------------------
                                             Name ________________________________________________________
                                                  --------------------------------------------------------
                                             Title _______________________________________________________
                                                   -------------------------------------------------------


                                             BARCLAYS BANK PLC, as a Short Term Lender



                                             By __________________________________________________________
                                                ----------------------------------------------------------
                                             Name ________________________________________________________
                                                  --------------------------------------------------------
                                             Title _______________________________________________________
                                                   -------------------------------------------------------


                                             BAYERISCHE LANDESBANK GIROZENTRALE, CAYMAN ISLANDS BRANCH, as a
                                             Short Term Lender


                                             By __________________________________________________________
                                             Name ________________________________________________________
                                             Title _______________________________________________________


                                             By __________________________________________________________
                                             Name ________________________________________________________
                                             Title _______________________________________________________


                                             CANADIAN IMPERIAL BANK OF COMMERCE, as a Short Term Lender



                                             By __________________________________________________________
                                                ----------------------------------------------------------
                                             Name ________________________________________________________
                                                  --------------------------------------------------------
                                             Title _______________________________________________________
                                                   -------------------------------------------------------







                                             THE CHASE MANHATTAN BANK, as a Short Term Lender



                                             By __________________________________________________________
                                                ----------------------------------------------------------
                                             Name ________________________________________________________
                                                  --------------------------------------------------------
                                             Title _______________________________________________________
                                                   -------------------------------------------------------


                                             COMMERZBANK AKTIENGESELLSCHAFT, NEW YORK AND GRAND CAYMAN
                                             BRANCHES, as a Short Term Lender


                                             By __________________________________________________________
                                                ----------------------------------------------------------
                                             Name ________________________________________________________
                                                  --------------------------------------------------------
                                             Title _______________________________________________________

                                             By __________________________________________________________
                                                ----------------------------------------------------------
                                             Name ________________________________________________________
                                                  --------------------------------------------------------
                                             Title _______________________________________________________
                                                   -------------------------------------------------------


                                             FIRSTAR, NATIONAL ASSOCIATION, as a Short Term Lender



                                             By __________________________________________________________
                                                ----------------------------------------------------------
                                             Name ________________________________________________________
                                                  --------------------------------------------------------
                                             Title _______________________________________________________
                                                   -------------------------------------------------------


                                             FIRST UNION NATIONAL BANK, as a Short Term Lender



                                             By __________________________________________________________
                                                ----------------------------------------------------------
                                             Name ________________________________________________________
                                                  --------------------------------------------------------
                                             Title _______________________________________________________
                                                   -------------------------------------------------------





                                             THE FUJI BANK, LIMITED, as a Short Term Lender



                                             By __________________________________________________________
                                                ----------------------------------------------------------
                                             Name ________________________________________________________
                                                  --------------------------------------------------------
                                             Title _______________________________________________________
                                                   -------------------------------------------------------


                                             THE INDUSTRIAL BANK OF JAPAN, LIMITED, as a Short Term Lender



                                             By __________________________________________________________
                                                ----------------------------------------------------------
                                             Name ________________________________________________________
                                                  --------------------------------------------------------
                                             Title _______________________________________________________
                                                   -------------------------------------------------------


                                             LASALLE BANK, NATIONAL ASSOCIATION, as a Short Term Lender



                                             By __________________________________________________________
                                                ----------------------------------------------------------
                                             Name ________________________________________________________
                                                  --------------------------------------------------------
                                             Title _______________________________________________________
                                                   -------------------------------------------------------


                                             LLOYDS TSB BANK PLC, as a Short Term Lender



                                             By __________________________________________________________
                                                ----------------------------------------------------------
                                             Name ________________________________________________________
                                                  --------------------------------------------------------
                                             Title ________________________________________


                                             By __________________________________________________________
                                             Name ________________________________________________________
                                             Title ________________________________________


                                             MELLON BANK, N.A., as a Short Term Lender



                                             By __________________________________________________________
                                                ----------------------------------------------------------
                                             Name ________________________________________________________
                                                  --------------------------------------------------------
                                             Title _______________________________________________________
                                                   -------------------------------------------------------







                                             MORGAN GUARANTY TRUST COMPANY OF NEW YORK, as a Short Term Lender



                                             By __________________________________________________________
                                                ----------------------------------------------------------
                                             Name ________________________________________________________
                                                  --------------------------------------------------------
                                             Title _______________________________________________________
                                                   -------------------------------------------------------


                                             NORDDEUTSCHE LANDESBANK GIROZENTRALE, NEW YORK BRANCH AND/OR
                                             CAYMAN ISLANDS BRANCH, as a Short Term Lender



                                             By __________________________________________________________
                                                ----------------------------------------------------------
                                             Name ________________________________________________________
                                                  --------------------------------------------------------
                                             Title _______________________________________________________
                                                   -------------------------------------------------------


                                             By __________________________________________________________
                                                ----------------------------------------------------------
                                             Name ________________________________________________________
                                                  --------------------------------------------------------
                                             Title _______________________________________________________
                                                   -------------------------------------------------------


                                             ROYAL BANK OF CANADA, as a Short Term Lender



                                             By __________________________________________________________
                                                ----------------------------------------------------------
                                             Name ________________________________________________________
                                                  --------------------------------------------------------
                                             Title _______________________________________________________
                                                   -------------------------------------------------------


                                             SUMITOMO MITSUI BANKING CORP., as a Short Term Lender



                                             By __________________________________________________________
                                                ----------------------------------------------------------
                                             Name ________________________________________________________
                                                  --------------------------------------------------------
                                             Title _______________________________________________________
                                                   -------------------------------------------------------


                                             UNION BANK OF CALIFORNIA, N.A., as a Short Term Lender



                                             By __________________________________________________________
                                                ----------------------------------------------------------
                                             Name ________________________________________________________
                                                  --------------------------------------------------------
                                             Title _______________________________________________________
                                                   -------------------------------------------------------


                                             WESTDEUTSCHE LANDESBANK GIROZENTRALE, NEW YORK BRANCH/CAYMAN
                                             ISLANDS BRANCH, as a Short Term Lender



                                             By __________________________________________________________
                                                ----------------------------------------------------------
                                             Name ________________________________________________________
                                                  --------------------------------------------------------
                                             Title _______________________________________________________
                                                   -------------------------------------------------------

EX-10

INTERIM SHORT TERM FACILITY EXTENSION AMENDMENT
(October, 2001)

        THIS SHORT TERM FACILITY EXTENSION AMENDMENT (the “Amendment”) is made and dated as of the 15th day of October, 2001 by and among COUNTRYWIDE HOME LOANS, INC. (the “Company”), COUNTRYWIDE CREDIT INDUSTRIES, INC. (the “Parent”), the undersigned financial institutions constituting the Short Term Lenders under (and as that term and capitalized terms not otherwise defined herein are defined in) the Revolving Credit Agreement described below, and BANKERS TRUST COMPANY, as Credit Agent (in such capacity, the “Credit Agent”).

RECITALS

        A.    Pursuant to that certain Revolving Credit Agreement dated as of September 24, 1997 by and among the Company, the Lenders party thereto, including, without limitation, the Short Term Lenders, the Credit Agent and others (as amended, extended and replaced from time to time, the “Revolving Credit Agreement”), the Short Term Lenders agreed to extend credit to the Company in the form of a 364-day revolving credit facility.

        B.    The Company has requested that the Short Term Lenders agree to extend the Short Term Facility Maturity Date and the Short Term Lenders have agreed to do so on the terms and subject to the conditions set forth herein.

        NOW, THEREFORE, in consideration of the above Recitals and for other good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, the parties hereto hereby agree as follows:

AGREEMENT

        1.    Interim Extension of Current Short Term Facility Maturity Date. To reflect the agreement of the Short Term Lenders to extend the current Short Term Facility Maturity Date on an interim basis, effective as of the Amendment Effective Date (as defined in Paragraph 5 below), the definition of “Short Term Facility Maturity Date” set forth in the Glossary attached to the Revolving Credit Agreement is hereby amended to delete the date “October 15, 2001” appearing therein and to replace the same with the date “December 17, 2001".

        2.    Extension of Short Term Facility Fee Letter. To reflect the agreement of the Company to continue to pay to the Short Term Lenders a facility fee during the period from the current Short Term Facility Maturity Date to the Short Term Facility Maturity Date as extended hereunder, the Company hereby reaffirms the Short Term Facility Fee Letter dated as of September 24, 1997 and agrees that the “Short Term Facility Maturity Date” referred to therein shall mean the Short Term Facility Maturity Date as extended hereunder.

        3.    Reaffirmation of Loan Documents. The Company hereby affirms and agrees that: (a) the execution and delivery by the Company of and the performance of its obligations under this Amendment shall not in any way amend, impair, invalidate or otherwise affect any of the obligations of the Company or the rights of the Credit Agent, the Lenders or any other Person under the Revolving Credit Agreement or any other Credit Document, (b) the term “Obligations” as used in the Credit Documents includes, without limitation, the Obligations of the Company under the Revolving Credit Agreement as amended hereby, and (c) the Revolving Credit Agreement as amended hereby and the other Credit Documents remain in full force and effect.

        4.    Reaffirmation of Guaranty and Subordination Agreement. The Parent hereby affirms and agrees that: (a) the execution and delivery by the Company and the performance of its obligations under this Amendment shall not in any manner or to any extent affect any of the obligations of the Parent or the rights of the Credit Agent, the Lenders or any other Person under the Guaranty, the Subordination Agreement or any other document or instrument made or given by the Parent in connection therewith, (b) the term “Obligations” as used in the Guaranty and the Subordination Agreement includes, without limitation, the Obligations of the Company under the Revolving Credit Agreement as amended hereby, and (c) the Guaranty and the Subordination Agreement remain in full force and effect.

         5.    Amendment Effective Date. This Amendment shall be effective as of the day and year first above written upon the date (the "Amendment Effective Date") that there has been delivered to the Credit Agent:

                    (a)    A copy of this Amendment, duly executed by the Company, the Parent, the Credit Agent and each Short Term Lender; and

                    (b)     From the Company and the Parent, such corporate resolutions, incumbency certificates and other authorizing documentation as the Credit Agent may request.

As required pursuant to Paragraph 13(b) of the Revolving Credit Agreement, following the Amendment Effective Date the Credit Agent shall provide a copy of this Amendment to all parties to the Credit Documents.

         6.     Representations and Warranties. The Company and the Parent hereby represent and warrant to the Credit Agent and each of the Short Term Lenders that at the date hereof and at and as of the Amendment Effective Date:

                    (a)    Each of the Company and the Parent has the corporate power and authority and the legal right to execute, deliver and perform this Amendment and has taken all necessary corporate action to authorize the execution, delivery and performance of this Amendment. This Amendment has been duly executed and delivered on behalf of the Company and the Parent and constitutes the legal, valid and binding obligation of such Person, enforceable against such Person in accordance with its terms.

                    (b)    Both prior to and after giving effect hereto: (1) the representations and warranties of the Company and the Parent contained in the Credit Documents are accurate and complete in all respects, and (2) there has not occurred an Event of Default or Potential Default.

         7.    No Other Amendment. Except as expressly amended hereby, the Credit Documents shall remain in full force and effect as written and amended to date.

         8.    Counterparts. This Amendment may be executed in any number of counterparts, each of which when so executed shall be deemed to be an original and all of which when taken together shall constitute one and the same agreement.

[Signature Pages Following]

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

                                             COUNTRYWIDE HOME LOANS, INC.,
                                             a New York corporation



                                             By
                                                ----------------------------------------------------------
                                             Name
                                                  --------------------------------------------------------
                                             Title
                                                   -------------------------------------------------------


                                             COUNTRYWIDE CREDIT INDUSTRIES, INC.,
                                             a Delaware corporation



                                             By
                                                ----------------------------------------------------------
                                             Name
                                                  --------------------------------------------------------
                                             Title
                                                   -------------------------------------------------------







                                             BANKERS TRUST COMPANY,
                                             as Credit Agent



                                             By
                                                ----------------------------------------------------------
                                             Name
                                                  --------------------------------------------------------
                                             Title
                                                   -------------------------------------------------------


                                             BANKERS TRUST COMPANY, as a Short Term Lender



                                             By __________________________________________________________
                                                ----------------------------------------------------------
                                             Name ________________________________________________________
                                                  --------------------------------------------------------
                                             Title _______________________________________________________
                                                   -------------------------------------------------------










                                             BANCO DI NAPOLI S.p.A., NEW YORK BRANCH, as a Short Term Lender



                                             By
                                                ----------------------------------------------------------
                                             Name
                                                  --------------------------------------------------------
                                             Title
                                                   -------------------------------------------------------


                                             By
                                                ----------------------------------------------------------
                                             Name
                                                  --------------------------------------------------------
                                             Title _______________________________________________________








                                             BANCA DI ROMA, SAN FRANCISCO BRANCH, as a Short Term Lender



                                             By __________________________________________________________
                                                ----------------------------------------------------------
                                             Name ________________________________________________________
                                                  --------------------------------------------------------
                                             Title _______________________________________________________
                                                   -------------------------------------------------------


                                             By __________________________________________________________
                                                ----------------------------------------------------------
                                             Name ________________________________________________________
                                                  --------------------------------------------------------
                                             Title _______________________________________________________








                                             BANK OF AMERICA, N.A., as a Short Term Lender



                                             By __________________________________________________________
                                                ----------------------------------------------------------
                                             Name ________________________________________________________
                                                  --------------------------------------------------------
                                             Title _______________________________________________________
                                                   -------------------------------------------------------







                                             THE BANK OF NEW YORK, as a Short Term Lender



                                             By __________________________________________________________
                                                ----------------------------------------------------------
                                             Name ________________________________________________________
                                                  --------------------------------------------------------
                                             Title _______________________________________________________
                                                   -------------------------------------------------------







                                             BANK ONE, NA, as a Short Term Lender



                                             By __________________________________________________________
                                                ----------------------------------------------------------
                                             Name ________________________________________________________
                                                  --------------------------------------------------------
                                             Title _______________________________________________________
                                                   -------------------------------------------------------







                                             BNP PARIBAS, as a Short Term Lender



                                             By __________________________________________________________
                                                ----------------------------------------------------------
                                             Name ________________________________________________________
                                                  --------------------------------------------------------
                                             Title _______________________________________________________
                                                   -------------------------------------------------------


                                             By __________________________________________________________
                                                ----------------------------------------------------------
                                             Name ________________________________________________________
                                                  --------------------------------------------------------
                                             Title _______________________________________________________
                                                   -------------------------------------------------------







                                             BARCLAYS BANK PLC, as a Short Term Lender



                                             By __________________________________________________________
                                                ----------------------------------------------------------
                                             Name ________________________________________________________
                                                  --------------------------------------------------------
                                             Title _______________________________________________________
                                                   -------------------------------------------------------







                                             BAYERISCHE LANDESBANK GIROZENTRALE, CAYMAN ISLANDS BRANCH, as a
                                             Short Term Lender


                                             By __________________________________________________________
                                             Name ________________________________________________________
                                             Title _______________________________________________________


                                             By __________________________________________________________
                                             Name ________________________________________________________
                                             Title _______________________________________________________







                                             CANADIAN IMPERIAL BANK OF COMMERCE, as a Short Term Lender



                                             By __________________________________________________________
                                                ----------------------------------------------------------
                                             Name ________________________________________________________
                                                  --------------------------------------------------------
                                             Title _______________________________________________________
                                                   -------------------------------------------------------







                                             THE CHASE MANHATTAN BANK, as a Short Term Lender



                                             By __________________________________________________________
                                                ----------------------------------------------------------
                                             Name ________________________________________________________
                                                  --------------------------------------------------------
                                             Title _______________________________________________________
                                                   -------------------------------------------------------







                                             COMMERZBANK AKTIENGESELLSCHAFT, NEW YORK AND GRAND CAYMAN
                                             BRANCHES, as a Short Term Lender


                                             By __________________________________________________________
                                                ----------------------------------------------------------
                                             Name ________________________________________________________
                                                  --------------------------------------------------------
                                             Title _______________________________________________________

                                             By __________________________________________________________
                                                ----------------------------------------------------------
                                             Name ________________________________________________________
                                                  --------------------------------------------------------
                                             Title _______________________________________________________
                                                   -------------------------------------------------------







                                             FIRSTAR, NATIONAL ASSOCIATION, as a Short Term Lender



                                             By __________________________________________________________
                                                ----------------------------------------------------------
                                             Name ________________________________________________________
                                                  --------------------------------------------------------
                                             Title _______________________________________________________
                                                   -------------------------------------------------------







                                             FIRST UNION NATIONAL BANK, as a Short Term Lender



                                             By __________________________________________________________
                                                ----------------------------------------------------------
                                             Name ________________________________________________________
                                                  --------------------------------------------------------
                                             Title _______________________________________________________
                                                   -------------------------------------------------------







                                             THE FUJI BANK, LIMITED, as a Short Term Lender



                                             By __________________________________________________________
                                                ----------------------------------------------------------
                                             Name ________________________________________________________
                                                  --------------------------------------------------------
                                             Title _______________________________________________________
                                                   -------------------------------------------------------







                                             THE INDUSTRIAL BANK OF JAPAN, LIMITED, as a Short Term Lender



                                             By __________________________________________________________
                                                ----------------------------------------------------------
                                             Name ________________________________________________________
                                                  --------------------------------------------------------
                                             Title _______________________________________________________
                                                   -------------------------------------------------------







                                             LASALLE BANK, NATIONAL ASSOCIATION, as a Short Term Lender



                                             By __________________________________________________________
                                                ----------------------------------------------------------
                                             Name ________________________________________________________
                                                  --------------------------------------------------------
                                             Title _______________________________________________________
                                                   -------------------------------------------------------







                                             LLOYDS TSB BANK PLC, as a Short Term Lender



                                             By __________________________________________________________
                                                ----------------------------------------------------------
                                             Name ________________________________________________________
                                                  --------------------------------------------------------
                                             Title ________________________________________


                                             By __________________________________________________________
                                             Name ________________________________________________________
                                             Title ________________________________________







                                             MELLON BANK, N.A., as a Short Term Lender



                                             By __________________________________________________________
                                                ----------------------------------------------------------
                                             Name ________________________________________________________
                                                  --------------------------------------------------------
                                             Title _______________________________________________________
                                                   -------------------------------------------------------







                                             MORGAN GUARANTY TRUST COMPANY OF NEW YORK, as a Short Term Lender



                                             By __________________________________________________________
                                                ----------------------------------------------------------
                                             Name ________________________________________________________
                                                  --------------------------------------------------------
                                             Title _______________________________________________________
                                                   -------------------------------------------------------







                                             NORDDEUTSCHE LANDESBANK GIROZENTRALE, NEW YORK BRANCH AND/OR
                                             CAYMAN ISLANDS BRANCH, as a Short Term Lender



                                             By __________________________________________________________
                                                ----------------------------------------------------------
                                             Name ________________________________________________________
                                                  --------------------------------------------------------
                                             Title _______________________________________________________
                                                   -------------------------------------------------------


                                             By __________________________________________________________
                                                ----------------------------------------------------------
                                             Name ________________________________________________________
                                                  --------------------------------------------------------
                                             Title _______________________________________________________
                                                   -------------------------------------------------------







                                             ROYAL BANK OF CANADA, as a Short Term Lender



                                             By __________________________________________________________
                                                ----------------------------------------------------------
                                             Name ________________________________________________________
                                                  --------------------------------------------------------
                                             Title _______________________________________________________
                                                   -------------------------------------------------------







                                             SUMITOMO MITSUI BANKING CORP., as a Short Term Lender



                                             By __________________________________________________________
                                                ----------------------------------------------------------
                                             Name ________________________________________________________
                                                  --------------------------------------------------------
                                             Title _______________________________________________________
                                                   -------------------------------------------------------







                                             UNION BANK OF CALIFORNIA, N.A., as a Short Term Lender



                                             By __________________________________________________________
                                                ----------------------------------------------------------
                                             Name ________________________________________________________
                                                  --------------------------------------------------------
                                             Title _______________________________________________________
                                                   -------------------------------------------------------







                                             WESTDEUTSCHE LANDESBANK GIROZENTRALE, NEW YORK BRANCH/CAYMAN
                                             ISLANDS BRANCH, as a Short Term Lender



                                             By __________________________________________________________
                                                ----------------------------------------------------------
                                             Name ________________________________________________________
                                                  --------------------------------------------------------
                                             Title _______________________________________________________
                                                   -------------------------------------------------------


                                             By __________________________________________________________
                                                ----------------------------------------------------------
                                             Name ________________________________________________________
                                                  --------------------------------------------------------
                                             Title _______________________________________________________
                                                   -------------------------------------------------------

EX-10

EXECUTION DOCUMENT

REVOLVING CREDIT AGREEMENT



By and Among

COUNTRYWIDE HOME LOANS, INC.

and



BANK OF AMERICA, N.A.,
as Managing Administrative Agent


BANK OF AMERICA, N.A. AND JPMORGAN CHASE BANK,
as the Administrative Agents



THE BANK OF NEW YORK,
as the Documentation Agent

BANK ONE, NA AND DEUTSCHE BANK AG,
as the Co-Syndication Agents



AND THE LENDERS PARTY HERETO


and with

and
BANC OF AMERICA SECURITIES LLC and JP MORGAN SECURITIES, INC.,
as Co-Arrangers



Dated as of December 17, 2001

                                              TABLE OF CONTENTS
                                              -----------------

                                                                                                           Page
                                                                                                           ----

RECITALS 1

1.       Credit Facilities........................................................................................1
         -----------------
         1(a)     Multi-Year Facility.............................................................................1
                  -------------------
         1(b)     Short Term Facility.............................................................................2
                  -------------------
         1(c)     Negotiated Loan Facility........................................................................3
                  ------------------------
         1(d)     Swing Loan Facilities...........................................................................4
                  ---------------------
         1(e)     GNMA Pool Advance Facility......................................................................7
                  --------------------------

2.       Requests for Credit Events; Funding......................................................................7
         -----------------------------------
         2(a)     Requests for Credit Events......................................................................7
                  --------------------------
         2(b)     Funding of Loans and GNMA Pool Advance Loans....................................................7
                  --------------------------------------------
         2(c)     Sale and Assignment of Discount Loans by Balance Banks..........................................8
                  ------------------------------------------------------
         2(d)     Funding.........................................................................................8
                  -------

3.       Payment of Principal; Prepayments........................................................................8
         ---------------------------------
         3(a)     Required Principal Payments.....................................................................8
                  ---------------------------
         3(b)     Prepayments.....................................................................................9
                  -----------
         3(c)     Short Term Facility Term-Out Provisions.........................................................9
                  ---------------------------------------

4.       Calculation and Payment of Interest; Related Provisions.................................................10
         -------------------------------------------------------
         4(a)     Interest on Direct Loans.......................................................................10
                  ------------------------
         4(b)     Interest on Discount Loans.....................................................................11
                  --------------------------
         4(c)     Interest on Negotiated Loans...................................................................11
                  ----------------------------
         4(d)     Interest on Swing Loans........................................................................11
                  -----------------------
         4(e)     Interest on GNMA Pool Advance Loans............................................................11
                  -----------------------------------
         4(f)     Payment of Interest............................................................................12
                  -------------------
         4(g)     Inability to Determine Rate....................................................................12
                  ---------------------------
         4(h)     Funding Indemnification........................................................................12
                  -----------------------
         4(i)     Illegality; Impracticality.....................................................................13
                  --------------------------
         4(j)     Requirements of Law; Increased Costs...........................................................13
                  ------------------------------------
         4(k)     Taxes..........................................................................................14
                  -----
         4(l)     Treatment of Qualifying Balances; Indemnity....................................................15
                  -------------------------------------------
         4(m)     Obligation of Lenders to Mitigate; Replacement of Lenders......................................15
                  ---------------------------------------------------------
         4(n)     Buy-Down Provisions............................................................................16

5.       Miscellaneous Lending Provisions........................................................................16
         --------------------------------
         5(a)     Use of Proceeds................................................................................16
                  ---------------
         5(b)     Assumption of Funding/Purchase.................................................................17
                  ------------------------------
         5(c)     Evidence of Indebtedness.......................................................................17
                  ------------------------
         5(d)     Interest and Fee Billing and Payment...........................................................17
                  ------------------------------------
         5(e)     Nature and Place of Payments...................................................................18
                  ----------------------------
         5(f)     Post-Default Interest..........................................................................19
                  ---------------------
         5(g)     Computations...................................................................................19
                  ------------
         5(h)     Disbursement of Payments Received..............................................................19
                  ---------------------------------
         5(i)     Fees...........................................................................................20
                  ----
         5(j)     Wire Transfers of Funds........................................................................20
                  -----------------------
         5(k)     Reduction in Aggregate Credit Limit............................................................20
                  -----------------------------------
         5(l)     Capital Requirements...........................................................................20
                  --------------------

6.       Guaranty; Subordination; Additional Documents...........................................................21
         ---------------------------------------------
         6(a)     Guaranties and Subordination Agreements........................................................21
                  ---------------------------------------
         6(b)     Further Documents..............................................................................21
                  -----------------

7.       Conditions Precedent....................................................................................21
         --------------------
         7(a)     Effective Date.................................................................................21
                  --------------
         7(b)     All Credit Events..............................................................................23
                  -----------------
         7(c)     Extension of Short Term Facility Maturity Date.................................................24

8.       Representations and Warranties of the Company...........................................................25
         ---------------------------------------------
         8(a)     Financial Condition............................................................................25
                  -------------------
         8(b)     Corporate Existence; Compliance with Law.......................................................25
                  ----------------------------------------
         8(c)     Corporate Power; Authorization; Enforceable Obligations........................................25
                  -------------------------------------------------------
         8(d)     No Legal Bar...................................................................................25
                  ------------
         8(e)     No Material Litigation.........................................................................25
                  ----------------------
         8(f)     Taxes..........................................................................................26
                  -----
         8(g)     Investment Company Act.........................................................................26
                  ----------------------
         8(h)     Subsidiaries...................................................................................26
                  ------------
         8(i)     Federal Reserve Board Regulations..............................................................26
                  ---------------------------------
         8(j)     ERISA..........................................................................................26
                  -----
         8(k)     Assets.........................................................................................26
                  ------
         8(l)     Consents, etc..................................................................................26
                  --------------

9.       Affirmative Covenants...................................................................................27
         ---------------------
         9(a)     Financial Statements...........................................................................27
                  --------------------
         9(b)     Certificates; Reports; Other Information.......................................................28
                  ----------------------------------------
         9(c)     Payment of Indebtedness........................................................................28
                  -----------------------
         9(d)     Maintenance of Existence and Properties........................................................28
                  ---------------------------------------
         9(e)     Inspection of Property; Books and Records; Discussions.........................................29
                  ------------------------------------------------------
         9(f)     Notices........................................................................................29
                  -------
         9(g)     Expenses.......................................................................................29
                  --------
         9(h)     Credit Documents...............................................................................30
                  ----------------
         9(i)     Insurance......................................................................................30
                  ---------
         9(j)     Hedging Program................................................................................30
                  ---------------
         9(k)     Compliance with Laws...........................................................................30
                  --------------------
         9(l)     Taxes..........................................................................................30
                  -----
         9(m)     Indemnification................................................................................30
                  ---------------

10.      Negative Covenants......................................................................................31
         ------------------
         10(a)    Liens..........................................................................................31
                  -----
         10(b)    Indebtedness...................................................................................32
                  ------------
         10(c)    Consolidation and Merger.......................................................................32
                  ------------------------
         10(d)    Acquisitions...................................................................................32
                  ------------
         10(e)    Payment of Dividends...........................................................................32
                  --------------------
         10(f)    Purchase or Retirement of Stock................................................................32
                  -------------------------------
         10(g)    Investments; Advances; Receivables.............................................................33
                  ----------------------------------
         10(h)    Sale of Assets.................................................................................33
                  --------------
         10(i)    Minimum Net Worth..............................................................................34
                  -----------------
         10(j)    Maximum Total Debt.............................................................................34
                  ------------------

11.      Events of Default.......................................................................................35
         -----------------

12.      Agency Provisions.......................................................................................37
         -----------------
         12(a)    Appointment....................................................................................37
                  -----------
         12(b)    Delegation of Duties...........................................................................37
                  --------------------
         12(c)    Exculpatory Provisions.........................................................................37
                  ----------------------
         12(d)    Reliance by Agent..............................................................................38
                  -----------------
         12(e)    Notice of Default; Agreement to Advance........................................................38
                  ---------------------------------------
         12(f)    Non-Reliance on Agent and Other Lenders........................................................38
                  ---------------------------------------
         12(g)    Indemnification by Lenders.....................................................................39
                  --------------------------
         12(h)    Agent in Its Individual Capacity...............................................................39
                  --------------------------------
         12(i)    Successor Agents...............................................................................39
                  ----------------
         12(j)    Sharing of Set-Offs............................................................................40
                  -------------------

13.      Miscellaneous Provisions................................................................................40
         ------------------------
         13(a)    No Assignment..................................................................................40
                  -------------
         13(b)    Amendment......................................................................................40
                  ---------
         13(c)    Cumulative Rights; No Waiver...................................................................41
                  ----------------------------
         13(d)    Entire Agreement; Severability.................................................................41
                  ------------------------------
         13(e)    Survival.......................................................................................41
                  --------
         13(f)    Notices........................................................................................42
                  -------
         13(g)    Governing Law..................................................................................42
                  -------------
         13(h)    Counterparts...................................................................................42
                  ------------
         13(i)    Waiver of Jury Trial...........................................................................42
                  --------------------

14.      Additional Lenders; Assignments and Participations; Increases in Availability...........................42
         -----------------------------------------------------------------------------
         14(a)    Addition of New Lender.........................................................................42
                  ----------------------
         14(b)    Assignments Among Existing Lenders.............................................................44
                  ----------------------------------
         14(c)    Minimum Loan Commitment........................................................................44
                  -----------------------
         14(d)    Sub-Participations by Lenders..................................................................45
                  -----------------------------
         14(e)    Federal Reserve Bank...........................................................................46
                  --------------------
         14(f)    Increases in Availability......................................................................46
                  -------------------------
         14(g)    Provision of Information; Confidentiality......................................................46
                  -----------------------------------------

1

REVOLVING CREDIT AGREEMENT

         THIS REVOLVING CREDIT AGREEMENT (the "Agreement") is made and dated as of the 17th day of December, 2001, by and among the lenders signatory hereto and such other lenders as may from time to time become party hereto in the future (collectively, the "Lenders"); BANK OF AMERICA, N.A. ("BofA"), as the managing administrative agent (in such capacity, the "Managing Administrative Agent") and as a co-administrative agent; JPMORGAN CHASE BANK ("JPChase"), as a co-administrative agent (BofA and JPChase, in their capacities as co-administrative agents, each an "Administrative Agent" and collectively, the "Administrative Agents"); THE BANK OF NEW YORK, as documentation agent (in such capacity, the "Documentation Agent"); BANK ONE, NA and DEUTSCHE BANK AG, as the co-syndication agents (in such capacity, the "Co-Syndication Agents"); the Managing Agents and the Co-Agents designated as such on the signature pages hereof (in such capacities, the "Other Facility Agents"); and COUNTRYWIDE HOME LOANS, INC., a New York corporation (the "Company").

RECITALS

         A.      Pursuant to that certain Revolving Credit Agreement dated as of the 24th day of September 1997 by and among the Company, certain of the Lenders signatory hereto, Bankers Trust Company, as "Credit Agent," and certain other agents acting thereunder (as amended to date, the "Existing Credit Agreement") the lenders thereunder agreed to extend credit to the Company on the terms and subject to the conditions set forth therein.

         B.      The Company and certain of the lenders and other parties to the Existing Credit Agreement have agreed to replace the Existing Credit Agreement with this Agreement, pursuant to which the Lenders have agreed to extend credit to the Company and the Managing Administrative Agent, the Administrative Agents, the Documentation Agent, the Co-Arrangers, the Co-Syndication Agents and the Other Facility Agents have agreed to act in such capacities, all on the terms and subject to the conditions set forth herein and in the other Credit Documents (as such term and capitalized terms not otherwise defined herein are defined in the Glossary attached hereto as Annex I).

         NOW, THEREFORE, in consideration of the above Recitals and for other good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, the parties hereto hereby agree as follows:

AGREEMENT

         1.      Credit Facilities.

                 1(a)     Multi-Year Facility. On the terms and subject to the conditions set forth herein, the Multi-Year Lenders severally agree that they shall, from time to time to but not including the Multi-Year Facility Maturity Date, directly, or indirectly by purchase from a Multi-Year Balance Bank, advance their Multi-Year Facility Percentage Share of loans (the “Multi-Year Loans” or a “Multi-Year Loan”) to the Company in amounts such that:

                         (1)      The aggregate amount of Multi-Year Loans outstanding does not exceed at any date the lesser of:

                                  (i)      The Multi-Year Facility Credit Limit minus the sum of: a. the aggregate dollar amount of Multi-Year Swing Loans outstanding, plus b. the aggregate dollar amount of Multi-Year Within Commitment Negotiated Loans outstanding; and

                                  (ii)      The Aggregate Credit Limit minus the sum of: a. Loans - (other than Multi-Year Loans) outstanding, b. the GNMA Pool Advance Commitment, c. Outstanding CPNs, plus d. outstanding Funding Checks; and

                          (2)      The aggregate dollar amount of the sum of: (i) each Multi-Year Lender’s Multi-Year Facility Percentage Share of Multi-Year Loans, plus (ii) each Multi-Year Lender’s Multi-Year Facility Percentage Share of Multi-Year Swing Loans outstanding, plus (iii) all Multi-Year Within Commitment Negotiated Loans held by such Lender, if any, does not exceed such Multi-Year Lender’s Maximum Multi-Year Facility Commitment.

In calculating the availability of Multi-Year Loans on any date, Loans outstanding, including, without limitation, Multi-Year Swing Loans and Multi-Year Within Commitment Negotiated Loans, and Outstanding CPNs shall include all Loans and Outstanding CPNs to be funded or issued on such date and shall exclude any of such items which will be repaid on such date. The Company may request that Multi-Year Loans be made, at the election of the Company as set forth on the related Loan Request, Interest Rate Election and Payoff Notice:

                          (y)      By the Multi-Year Balance Banks in the form of Discount Loans; provided, however, that any request for Discount Loans may be made only in the Loan Request, Interest Rate Election and Payoff Notice provided for the initial Credit Event and, thereafter, on a Discount Loan Funding Date; and, provided, further, that as conditions precedent to the Company’s right to request any Multi-Year Balance Bank to fund a Discount Loan: a. the Managing Administrative Agent and one hundred percent (100%) of the Multi-Year Lenders, in their sole and absolute discretion, shall have agreed to make Discount Loans available to the Company hereunder, and b. assuming such agreement is given, the Company shall have delivered to the Managing Administrative Agent a Pre-Funding Notice thereof no later than 10:00 a.m. (Los Angeles time) three Eurodollar Business Days prior thereto (the Managing Administrative Agent hereby agreeing to promptly transmit by facsimile transmission said Pre-Funding Notice to the applicable Multi-Year Balance Bank and each of the Multi-Year Lenders); and/or

                          (z)      By the Multi-Year Lenders in the form of Direct Loans on any Business Day.

                 1(b)     Short Term Facility. On the terms and subject to the conditions set forth herein, the Short Term Lenders severally agree that they shall, from time to time to but not including the Short Term Facility Maturity Date, directly, or indirectly by purchase from a Short Term Balance Bank, advance their Short Term Loan Percentage Share of loans (the “Short Term Loans” or a “Short Term Loan”) to the Company in amounts such that:

                          (1)      The aggregate amount of Short Term Loans outstanding does not exceed at any date the lesser of:

                                  (i)      The Short Term Facility Credit Limit minus the sum of: a. the aggregate dollar amount of Short Term Swing Loans outstanding, plus b. the aggregate dollar amount of Short Term Within Commitment Negotiated Loans outstanding; and

                                  (ii     ) The Aggregate Credit Limit minus the sum of: a. Loans (other than Short Term Loans) outstanding, b. the GNMA Pool Advance Commitment, c. Outstanding CPNs, plus d. outstanding Funding Checks; and

                          (2)      The aggregate dollar amount of the sum of: (i) each Short Term Lender’s Short Term Facility Percentage Share of Short Term Loans, plus (ii) each Short Term Lender’s Short Term Facility Percentage Share of Short Term Swing Loans outstanding, plus (iii) all Short Term Within Commitment Negotiated Loans held by such Lender, if any, does not exceed such Short Term Lender’s Maximum Short Term Facility Commitment.

In calculating the availability of Short Term Loans on any date, Loans outstanding, including, without limitation, Short Term Swing Loans and Short Term Within Commitment Negotiated Loans, and Outstanding CPNs shall include all Loans and Outstanding CPNs to be funded or issued on such date and shall exclude any of such items which will be repaid on such date. The Company may request that Short Term Loans be made, at the election of the Company as set forth on the related Loan Request, Interest Rate Election and Payoff Notice:

                          (y)      By the Short Term Balance Banks in the form of Discount Loans; provided, however, that any request for Discount Loans may be made only in the Loan Request, Interest Rate Election and Payoff Notice provided for the initial Credit Events and, thereafter, on a Discount Loan Funding Date; and, provided, further, that as conditions precedent to the Company’s right to request any Short-Term Balance Bank to fund a Discount Loan: a. the Managing Administrative Agent and one hundred percent (100%) of the Short Term Lenders, in their sole and absolute discretion, shall have agreed to make Discount Loans available to the Company hereunder, and b. assuming such agreement is given, the Company shall have delivered to the Managing Administrative Agent a Pre-Funding Notice thereof no later than 10:00 a.m. (Los Angeles time) three Eurodollar Business Days prior thereto (the Managing Administrative Agent hereby agreeing to promptly transmit by facsimile transmission said Pre-Funding Notice to the applicable Short Term Balance Bank and each of the Lenders); and/or

                          (z)      By the Short Term Lenders in the form of Direct Loans on any Business Day.

                 1(c)     Negotiated Loan Facility. On the terms and subject to the conditions set forth herein, any Lender may from time to time in its sole and absolute discretion offer to make loans (“Negotiated Loans” or a “Negotiated Loan”) to the Company in such amounts, at such interest rates and for such terms (not to extend beyond the Multi-Year Facility Maturity Date if such Lender is a Multi-Year Lender or if such Lender is not a Multi-Year Lender, the Short Term Facility Maturity Date) as such Lender and the Company may agree; provided, however, that in no event will any Lender advance any Negotiated Loan to the Company nor will the Company accept the proceeds of any Negotiated Loan unless:

                          (1)      There shall have been provided to the Managing Administrative Agent in writing a Negotiated Loan Notice not less than one (1) Business Day (or such shorter time period as may be acceptable to the Managing Administrative Agent) prior to the proposed funding date of such Negotiated Loan setting forth the following information:

                                  (i)      The principal amount of such Negotiated Loan;

                                  (ii)      The maturity date of such Negotiated Loan;

                                  (iii)      Whether such Negotiated Loan is a Within Commitment Negotiated Loan or Additional Commitment Negotiated Loan; and

                                  (iv)      If such Negotiated Loan is a Within Commitment Negotiated Loan, whether such Negotiated Loan is a Multi-Year Within Commitment Negotiated Loan or a Short Term Within Commitment Negotiated Loan; and

                          (2)      The Managing Administrative Agent shall have delivered written confirmation to the Company and such Lender that:

                                  (i)      Upon the funding of such Negotiated Loan the aggregate amount of Negotiated Loans outstanding will not exceed the: (1) the Aggregate Credit Limit, minus (2) the sum of: (i) Loans (other than Negotiated Loans) outstanding, (ii) the GNMA Pool Advance Commitment, (iii) Outstanding CPNs, and (iv) outstanding Funding Checks; and

                                  (ii)      If such Negotiated Loan is a Multi-Year Within Commitment Negotiated Loan, upon the funding of such Negotiated Loan the aggregate amount of Multi-Year Loans outstanding will not exceed the: (1) the Multi-Year Facility Credit Limit, minus all Multi-Year Within Commitment Negotiated Loans outstanding; and

                                  (iii)      If such Negotiated Loan is a Short Term Within Commitment Negotiated Loan, upon the funding of such Negotiated Loan the aggregate amount of Short Term Loans outstanding will not exceed the: (1) the Short Term Facility Credit Limit, minus all Short Term Within Commitment Negotiated Loans outstanding.

For purposes of the Managing Administrative Agent’s calculation of the availability of Negotiated Loans on any date pursuant to subparagraph (2) above, Loans outstanding and Outstanding CPNs shall include all Loans and Outstanding CPNs to be funded or issued on such date and to exclude any of such items which will be repaid on such date, as set forth in the notice of proposed funding given by the Company. The agreement of a Lender to make an Additional Commitment Negotiated Loan hereunder shall not to any extent reduce such Lender’s obligation to fund Multi-Year Loans and/or Short Term Loans, as applicable to the fullest extent of such Lender’s Maximum Multi-Year Facility Commitment and/or Maximum short Term Facility commitment, it being expressly acknowledged and agreed that the agreement by a Lender to make Additional Commitment Negotiated Loans is optional on the part of such Lender and in addition to its Maximum Multi-Year Facility Commitment and/or Maximum Short Term Facility Commitment, as applicable. .

                 1(d)     Swing Loan Facilities. On the terms and subject to the conditions set forth herein:

                          (1)      The Multi-Year Swing Line Lenders severally agree that they shall, from time to time to but not including the Multi-Year Facility Maturity Date, advance its Multi-Year Swing Line Percentage Share of loans (the “Multi-Year Swing Loans” or a “Multi-Year Swing Loan”) to the Company in amounts such that the aggregate amount of Multi-Year Swing Loans outstanding does not exceed at any date the least of:

                                  (i)      The Aggregate Multi-Year Swing Line Commitment;

                                  (ii)      The Multi-Year Facility Credit Limit minus the sum of: a. the aggregate dollar amount of Multi-Year Loans outstanding, plus b. the aggregate dollar amount of Multi-Year Within Commitment Negotiated Loans outstanding; and

                                  (iii)      The Aggregate Credit Limit minus the sum of: a. Loans - (other than Multi-Year Swing Loans) outstanding, b. the GNMA Pool Advance Commitment, c. Outstanding CPNs, and d. outstanding Funding Checks.

In calculating the availability of Multi-Year Swing Loans on any date, Loans outstanding, including, without limitation, Multi-Year Loans and Negotiated Loans, and Outstanding CPNs shall include all Loans and Outstanding CPNs to be funded or issued on such date and shall exclude any of such items which will be repaid on such date. At the request of any Multi-Year Swing Line Lender, made through the Managing Administrative Agent at any time and from time to time, including, without limitation, following the occurrence of an Event of Default, each Multi-Year Lender (including each of the Multi-Year Swing Line Lenders) absolutely and unconditionally agrees to refund Multi-Year Swing Loans held by the Multi-Year Swing Line Lenders by advancing its Multi-Year Facility Percentage Share thereof to the Managing Administrative Agent for disbursement to the Multi-Year Swing Line Lenders pro rata, in accordance with their respective Multi-Year Swing Line Percentage Shares. Such fundings shall be made no later than 12:00 noon (Los Angeles time) on the date request therefor is made if such request is made on or before 11:00 a.m. (Los Angeles time) on such date, and no later than 12:00 noon (Los Angeles time) on the next succeeding Business Day if request therefor is made after 11:00 a.m. (Los Angeles time). Advances made by the Multi-Year Lenders hereunder for the purpose of refunding Multi-Year Swing Loans shall, for all purposes of the Credit Documents: (y) constitute Multi-Year Loans to the extent of such Lender’s Multi-Year Facility Percentage Share thereof, and (z) be advanced as Federal Funds Rate Loans. In the event, for whatever reason, the Multi-Year Lenders are not able to advance their respective Multi-Year Facility Percentage Shares for the purpose of refunding Multi-Year Swing Loans as required hereunder, then each of the Multi-Year Lenders (including each of the Multi-Year Swing Line Lenders) absolutely and unconditionally agrees to purchase and take from the Multi-Year Swing Line Lenders on demand an undivided participation interest in Multi-Year Swing Loans outstanding in an amount equal to their respective Multi-Year Facility Percentage Shares of such Multi-Year Swing Loans and upon such purchase such Multi-Year Swing Loans shall automatically be deemed Federal Funds Rate Loans and shall thereafter bear interest at the Federal Funds Effective Rate. Notwithstanding anything contained herein, in no event shall any Multi-Year Lender be required to advance its Multi-Year Facility Percentage Share of any Multi-Year Swing Loan or to purchase any undivided participation interest in any Multi-Year Swing Loan: a. unless such Multi-Year Swing Loan was initially made in accordance with the requirements of this Agreement (as such requirements may be amended or waived from time to time as permitted hereunder) or b. if upon such advance or purchase the aggregate dollar amount of Multi-Year Loans, Multi-Year Swing Loans and Multi-Year Within Commitment Negotiated loans held by such Multi-Year Lender would exceed such Multi-Year Lender’s Maximum Multi-Year Facility Commitment.

                           (2)      The Short Term Swing Line Lenders severally agree that they shall, from time to time to but not including the Short Term Facility Maturity Date, advance its Short Term Swing Line Percentage Share of loans (the “Short Term Swing Loans” or a “Short Term Swing Loan”) to the Company in amounts such that the aggregate amount of Short Term Swing Loans outstanding does not exceed at any date the least of:

                                  (i)      The Aggregate Short Term Swing Line Commitment;

                                  (ii)      The Short Term Facility Credit Limit minus the sum of: a. the aggregate dollar amount Short Term Loans outstanding, plus b. the aggregate dollar - amount of Short Term Within Commitment Negotiated Loans outstanding; and

                                  (iii)      The Aggregate Credit Limit minus the sum of: a. Loans - (other than Short Term Swing Loans) outstanding, b. the GNMA Pool Advance Commitment, c. Outstanding CPNs, and d. outstanding Funding Checks.

In calculating the availability of Short Term Swing Loans on any date, Loans outstanding, including, without limitation, Short Term Loans and Negotiated Loans, and Outstanding CPNs shall include all Loans and Outstanding CPNs to be funded or issued on such date and shall exclude any of such items which will be repaid on such date. At the request of any Short Term Swing Line Lender, made through the Managing Administrative Agent at any time and from time to time, including, without limitation, following the occurrence of an Event of Default, each Short Term Lender (including each of the Short Term Swing Line Lenders) absolutely and unconditionally agrees to refund Short Term Swing Loans held by the Short Term Swing Line Lenders by advancing its Short Term Facility Percentage Share thereof to the Managing Administrative Agent for disbursement to the Short Term Swing Line Lenders pro rata, in accordance with their respective Short Term Swing Line Percentage Shares. Such fundings shall be made no later than 12:00 noon (Los Angeles time) on the date request therefor is made if such request is made on or before 11:00 a.m. (Los Angeles time) on such date, and no later than 12:00 noon (Los Angeles time) on the next succeeding Business Day if request therefor is made after 11:00 a.m. (Los Angeles time). Advances made by the Short Term Lenders hereunder for the purpose of refunding Short Term Swing Loans shall, for all purposes of the Credit Documents: (y) constitute Short Term Loans to the extent of such Lender’s Short Term Facility Percentage Share thereof, and (z) be advanced as Federal Funds Rate Loans. In the event, for whatever reason, the Short Term Lenders are not able to advance their respective Short Term Facility Percentage Shares for the purpose of refunding Short Term Swing Loans as required hereunder, then each of the Short Term Lenders (including each of the Short Term Swing Line Lenders) absolutely and unconditionally agrees to purchase and take from the Short Term Swing Line Lenders on demand an undivided participation interest in Short Term Swing Loans outstanding in an amount equal to their respective Short Term Facility Percentage Shares of such Short Term Swing Loans and upon such purchase such Short Term Swing Loans shall automatically be deemed Federal Funds Rate Loans and shall thereafter bear interest at the Federal Funds Effective Rate. Notwithstanding anything contained herein, in no event shall any Short Term Lender be required to advance its Short Term Facility Percentage Share of any Short Term Swing Loan or to purchase any undivided participation interest in any Short Term Swing Loan: a. unless such Short Term Swing Loan was initially made in accordance with the requirements of this Agreement (as such requirements may be amended or waived from time to time as permitted hereunder) or b. if upon such advance or purchase the aggregate dollar amount of Short Term Loans, Short Term Swing Loans and Short Term Within Commitment Negotiated Loans held by such Short Term Lender would exceed such Short Term Lender’s Maximum Short Term Facility Commitment.

                 1(e)     GNMA Pool Advance Facility. On the terms and subject to the conditions set forth in the GNMA Pool Advance Agreement, the GNMA Pool Advance Lender agrees that it shall, from time to time to but not including the Multi-Year Facility Maturity Date, make loans (the “GNMA Pool Advance Loans” or a “GNMA Pool Advance Loan”) to the Company in an aggregate amount not to exceed the GNMA Pool Advance Commitment.

         2.      Requests for Credit Events; Funding.

                 2(a)     Requests for Credit Events. Subject to the advance notice required with respect to Eurodollar Loans pursuant to Paragraph 4(a) below, on any Business Day that the Company desires to borrow Loans or GNMA Pool Advance Loans, it shall deliver a Loan Request, Interest Rate Election and Payoff Notice to the Managing Administrative Agent no later than: (1) in the case of Multi-Year Loans, Short Term Loans and GNMA Pool Advance Loans, 10:00 a.m. (Los Angeles time) on such date; (2) in the case of Negotiated Loans, 12:00 noon (Los Angeles time) on such date; and (3) in the case of Swing Loans, 11:00 a.m. (Los Angeles time) on such date; provided, however, that in the event the Managing Administrative Agent receives a request for a Multi-Year Swing Loan or a Short Term Swing Loan after 11:00 a.m. (Los Angeles time) on a Business Day, the Managing Administrative Agent shall work with the Multi-Year Swing Line Lenders and the Short Term Swing Lenders, as applicable, on a best efforts basis with a view toward funding the requested Multi-Year Swing Loans or Short Term Swing Loans no later than 1:00 p.m. (Los Angeles time) on such date, the Company expressly acknowledging and agreeing that there is no assurance that any such funding can be provided. Said Loan Request, Interest Rate Election and Payoff Notice shall, as applicable, identify the Lender which has agreed to fund any Negotiated Loan. Except for a request for a Negotiated Loan or a Swing Loan made after 10:00 a.m. (Los Angeles time) on a given date, only one consolidated Loan Request, Interest Rate Election and Payoff Notice requesting Loans and/or GNMA Pool Advance Loans shall be submitted to the Managing Administrative Agent on any date. Any request for Multi-Year Loans or Short Term Loans shall be in such amount that the aggregate dollar amount of Multi-Year Loans or Short Term Loans, as applicable, which the Lenders are required to actually newly fund with respect thereto is not less than $5,000,000.00, and any request for Multi-Year Swing Loans or Short Term Swing Loans shall be in an amount not less than $1,000,000.00. On each Business Day on which a Loan Request, Interest Rate Election and Payoff Notice is delivered to the Managing Administrative Agent, the Managing Administrative Agent shall notify the applicable Lenders (which notification may be telephonic and, if telephonic, shall be promptly confirmed in writing) no later than 11:00 a.m. (Los Angeles time) (or in the case of a Negotiated Loan, 1:00 p.m. (Los Angeles time) or in the case of a Swing Loan, 1:30 p.m. (Los Angeles time)) of the aggregate amount of Credit Events which will occur on such date.

                 2(b)     Funding of Loans and GNMA Pool Advance Loans. Loans and GNMA Pool Advance Loans requested pursuant to any Loan Request, Interest Rate Election and Payoff Notice shall be funded as follows:

                          (1)      Each Balance Bank shall make Discount Loans net of the applicable Balance Bank Discount, each Lender shall make its Multi-Year Facility Percentage Share of Multi-Year Loans which are Direct Loans or Short Term Facility Percentage Share of Short Term Facility Loans which are Direct Loans and the GNMA Pool Advance Lender shall make its GNMA Pool Advance Loans available by wiring the amount thereof in immediately available same day (including Federal) funds, to the Funding Account no later than 12:30 p.m. (Los Angeles time) on the proposed funding date;

                          (2)      Each Lender agreeing to make a Negotiated Loan shall make the same available by wiring the amount thereof in immediately available same day (including Federal) funds, to such account and by such time on the proposed funding date (but no later than 2:30 p.m. (Los Angeles time)) as agreed to by such Lender and the Company, with written notice of such funding being given concurrently to the Managing Administrative Agent; and

                          (3)      Each Multi-Year Swing Line Lender and each Short Term Swing Lender shall make its Multi-Year Swing Line Percentage Share or Short Term Swing Line Percentage Share of each Multi-Year Swing Loan or Short Term Swing Loan, as applicable, available by wiring the amount thereof in immediately available same day (including Federal) funds to the Funding Account no later than 2:00 p.m. (Los Angeles time) on the proposed funding date.

                 2(c)     Sale and Assignment of Discount Loans by Balance Banks. Simultaneously with the making of a Multi-Year Loan as a Discount Loan by a Multi-Year Balance Bank on a Discount Loan Funding Date, or the making of a Short Term Loan as a Discount Loan by a Short Term Balance Bank on a Discount Loan Funding Date, such Balance Bank agrees to sell and assign, and does hereby sell and assign, to each Multi-Year Lender or Short Term Lender, as applicable (including such Balance Bank in its capacity as a Lender), and each Lender irrevocably agrees to purchase and acquire, its Multi-Year Facility Percentage Share or Short Term Facility Percentage Share, as applicable, of such Discount Loan for a purchase price equal to such Lender’s Multi-Year Facility Percentage Share or Short Term Facility Percentage Share, as applicable, of the principal amount of such Discount Loan less the Lender Discount applicable thereto. Such purchase price will be paid to the Managing Administrative Agent for the account of the applicable Balance Banks in immediately available same day (including Federal) funds at the Contact Office of the Managing Administrative Agent no later than 12:15 p.m. (Los Angeles time) on the Discount Loan Funding Date. The Company hereby acknowledges and consents to the assignment of Discount Loans by the Balance Banks to the Lenders as provided herein. The Company and the Managing Administrative Agent shall deem and treat each Lender as the creditor in respect of its Multi-Year Facility Percentage Share or Short Term Facility Percentage Share, as applicable, of each Discount Loan to the same extent as if such Discount Loan were a Direct Loan as to which such Lender had advanced its Multi-Year Facility Percentage Share or Short Term Facility Percentage Share, as applicable.

                 2(d)     Funding. Each Lender shall be entitled to fund all or any portion of its Multi-Year Facility Percentage Share of Multi-Year Loans, its Short Term Facility Percentage Share of Short Term Loans, its Negotiated Loans, its Multi-Year Swing Line Percentage Share of Multi-Year Swing Loans, its Short Term Swing Line Percentage Share of Short Term Swing Loans and its GNMA Pool Advance Loans, as applicable, in any manner it may determine in its sole discretion, including, without limitation, in the Grand Cayman inter-bank market, the eurocurrency inter-bank market and within the United States, but all calculations and transactions hereunder shall be conducted as though all Lenders actually fund Discount Loans and Eurodollar Loans by them hereunder through the purchase of offshore dollar deposits in such amounts with maturities corresponding to the applicable Interest Periods.

         3.      Payment of Principal; Prepayments.

                 3(a)     Required Principal Payments. Subject to the provisions of Paragraph 3(b) below, and, in the case of the Short Term Loans, the provisions of Paragraph 3(c) below, the Company shall pay: (1) to the Managing Administrative Agent for the account of the applicable Lender or Lenders, the unpaid principal balance of each Discount Loan and each Eurodollar Loan on the last day of the applicable Interest Period, the unpaid principal balance of each Multi-Year Loan which is a Federal Funds Rate Loan and each Multi-Year Swing Loan on the Multi-Year Facility Maturity Date and the unpaid principal balance of each Short Term Loan which is a Federal Funds Rate Loan and each Short Term Swing Loan on the Short Term Facility Maturity Date; and (2) to the Lender or Lenders making Negotiated Loans and the GNMA Pool Advance Lender, directly, as applicable, the unpaid principal balance of each Negotiated Loan on the last day of the applicable Interest Period, and the unpaid principal balance of each GNMA Pool Advance Loan on or before the earlier of: (i) the thirtieth day following the date advanced and (ii) the Multi-Year Facility Maturity Date. The Company shall give notice to the Managing Administrative Agent of any payment under subparagraph (2) above on the date such payment is made.

                 3(b)     Prepayments. The Company:

                          (1)      May voluntarily prepay Direct Loans, Negotiated Loans, Swing Loans and GNMA Pool Advance Loans in whole or in part and may voluntarily prepay Discount Loans in whole at any time; provided, however, that in the case of prepayment of a Discount Loan, the Company shall pay the net funded amount of such Discount Loan actually advanced by the Balance Bank with respect thereto plus that portion of the Balance Bank Discount for such Discount Loan for the period from the date of funding to but not including the date of prepayment; and, provided further, that any prepayment of a Direct Loan, Negotiated Loan, Swing Loan or GNMA Pool Advance Loan shall be accompanied by accrued but unpaid interest on the portion being prepaid.

                          (2     ) Shall pay in connection with any prepayment hereunder any amount payable on account thereof pursuant to Paragraph 4(h) below concurrently with such prepayment.

                 3(c)     Short Term Facility Term-Out Provisions.

                          (1)      Notwithstanding anything contained in Paragraph 3(a) above, upon written request for such final extension given by the Company to the Managing Administrative Agent no earlier than ninety (90) days nor later than thirty (30) days prior to the then current Short Term Facility Maturity Date (a copy of which request shall be promptly forwarded to each of the Short Term Lenders by the Managing Administrative Agent), the Short Term Lenders shall, subject to the conditions precedent set forth below, agree to extend the then current Short Term Facility Maturity Date for one final time to the date which is the 364th day following the then current Short Term Facility Maturity Date (the “Final Short Term Facility Maturity Date”) and to permit the Company to convert the aggregate principal amount of Short Term Loans outstanding on the then current Short Term Facility Maturity Date (or such portion thereof as the Company may designate) into a term loan (the “Short Term Facility Term-Out Loan”).

                          (2)      As conditions precedent to the right of the Company to convert Short Term Loans outstanding into the Short Term Facility Term-Out Loan on the then current Short Term Facility Maturity Date, on and as of the then current Short Term Facility Maturity Date:

                                  (i)      The representations and warranties of the Company and the Parent contained in the Credit Documents shall be accurate and complete in all respects;

                                  (ii)      The Managing Administrative Agent shall have received a non-refundable term-out fee in an amount equal to one eighth of one percent (0.125%) of the aggregate dollar amount of the outstanding Short Term Loans to be converted into the Short Term Facility Term-Out Loan, such fee to be promptly distributed to the Short Term Lenders in accordance with their Short Term Facility Percentage Shares as of the Short Term Facility Maturity Date;

                                  (iii)      There shall not have occurred and be continuing a Potential Default or an Event of Default; and

                                  (iv)      Following the conversion of outstanding Short Term Loans into the Short Term Facility Term-Out Loan, the aggregate amount of Loans outstanding shall not exceed the applicable limitations of Paragraphs 1(a), 1(c), 1(d) and 1(e) above.

                          (3)      The Short Term Facility Term-Out Loan (and portions thereof outstanding) shall be considered “Direct Loans” for all purposes of this Agreement, including, without limitation, for purposes of computation of interest on the outstanding principal balance thereof as provided in Paragraph 4(a) below.

                          (4)      The outstanding principal balance of the Short Term Facility Term-Out Loan shall be payable in full on the Final Short Term Facility Maturity Date.

                          (5)      Notwithstanding anything in this Agreement or any other Credit Document to the contrary, payments, repayments and prepayments of the Short Term Facility Term-Out Loan may not be reborrowed.

         4.      Calculation and Payment of Interest; Related Provisions.

                 4(a)     Interest on Direct Loans.

                          (1)      The Company shall pay interest to each Multi-Year Lender on such Multi-Year Lender’s Multi-Year Facility Percentage Share of Multi-Year Loans outstanding as Direct Loans and shall pay interest to each Short Term Lender on such Short Term Lender’s Short Term Facility Percentage Share of Short Term Loans outstanding as Direct Loans calculated, at the election of the Company made from time to time as permitted herein and set forth on a duly executed Loan Request, Interest Rate Election and Payoff Notice, at either: (i) the Applicable Federal Funds Rate, and/or (ii) the Applicable Eurodollar Rate.

                          (2)      The Company may elect from time to time to convert Direct Loans from Eurodollar Loans to Federal Funds Rate Loans or to have Direct Loans funded as Federal Funds Rate Loans by giving the Managing Administrative Agent irrevocable notice of such election as set forth on a duly executed Loan Request, Interest Rate Election and Payoff Notice delivered on the proposed conversion or funding date; provided, however, that any conversion of Eurodollar Loans may only be made on the last day of the applicable Eurodollar Interest Period. The Company may elect from time to time to convert Direct Loans from Federal Funds Rate Loans to Eurodollar Loans or to have Direct Loans funded as Eurodollar Loans by giving the Managing Administrative Agent at least three Eurodollar Business Days’ prior irrevocable notice of such election by delivery of a duly executed Loan Request, Interest Rate Election and Payoff Notice. Upon receipt of any such notice, the Managing Administrative Agent shall promptly notify each of the Lenders affected thereby thereof. No Direct Loan shall be funded as or converted into a Eurodollar Loan if an Event of Default or Potential Default has occurred and is continuing on the day occurring three (3) Business Days prior to the date of the funding or conversion requested by the Company.

                          (3)      Any Eurodollar Loan may be continued as such upon the expiration of the Interest Period applicable thereto by giving the Managing Administrative Agent (which shall notify the Lenders) at least three Eurodollar Business Days’ prior irrevocable notice of such election as set forth on a duly executed Loan Request, Interest Rate Election and Payoff Notice; provided, however, that no Eurodollar Loan may be continued as such when any Event of Default or Potential Default has occurred and is continuing, but shall be automatically converted to an Federal Funds Rate Loan on the last day of the then current Interest Period applicable thereto. The Managing Administrative Agent shall notify the Lenders and the Company promptly that such automatic conversion will occur. If the Company shall fail to give notice as provided above, the Company shall be deemed to have elected to convert the affected Eurodollar Loan to an Federal Funds Rate Loan on the last day of the Interest Period applicable thereto.

                          (4)      The Managing Administrative Agent shall give prompt written notice (or notice by telephone immediately confirmed in writing) to the Company and the Lenders of the applicable interest rate determined by the Managing Administrative Agent.

                          (5)      Under no circumstances shall the Lenders be required to make or maintain Eurodollar Loans under this Agreement with more than an aggregate number of eight (8) different Interest Periods.

                 4(b)     Interest on Discount Loans. Since Discount Loans will be funded by the Balance Banks net of the applicable Balance Bank Discount, no additional interest shall be payable thereon prior to the maturity date thereof.

                 4(c)     Interest on Negotiated Loans. The Company shall pay interest to any Lender making a Negotiated Loan from the date advanced to but not including the date of payment calculated at the Negotiated Loan Interest Rate applicable thereto.

                 4(d)     Interest on Swing Loans. The Company shall pay interest to each Multi-Year Swing Line Lender on such Multi-Year Swing Line Lender’s Multi-Year Swing Line Percentage Share of Multi-Year Swing Loans and each Short Term Swing Line Lender on such Short Term Swing Line Lender’s Short Term Swing Line Percentage Share of Short Term Swing Loans outstanding, as applicable, from the date advanced to but not including the date of payment thereof, at the Overnight Transaction Loan Rate.

                 4(e)     Interest on GNMA Pool Advance Loans. The Company shall pay interest on GNMA Pool Advance Loans from the date advanced to but not including the date of payment calculated at such rates and at such times as may be established in writing from time to time by the Company and the GNMA Pool Advance Lender.

                 4(f)     Payment of Interest. The Company shall pay interest, in each case as more specifically provided in Paragraph 5(d) below:

                          (1)      On Federal Funds Rate Loans, Swing Loans, and GNMA Pool Advance Loans monthly, in arrears, on the fifth day of each month for the period from and including the first day of the immediately preceding month to and including the last day of such month; and

                          (2)      On Eurodollar Loans and Negotiated Loans on the last day of the applicable Interest Period relating thereto; provided, however, that in the case any Eurodollar Loan having a six month Interest Period, the Company shall pay interest on the ninetieth (90th) day following the day on which such Eurodollar Loan was made as well as on the last day of the applicable Interest Period relating thereto.

                 4(g)     Inability to Determine Rate. In the event that the Managing Administrative Agent shall have determined (which determination shall be conclusive and binding upon the Company) that by reason of circumstances affecting the interbank eurodollar market adequate and reasonable means do not exist for ascertaining the Eurodollar Rate for any given Interest Period, the Managing Administrative Agent shall forthwith give notice (which may be telephonic and promptly confirmed in writing or by facsimile transmission) of such determination to each Lender and to the Company at least two Eurodollar Business Days prior to, as the case may be, the proposed funding date of a Discount Loan, the conversion date of an Federal Funds Rate Loan to a Eurodollar Loan or the proposed funding or continuation date of a Direct Loan as a Eurodollar Loan. If such notice is given: (1) any Multi-Year Loan or Short Term Loan that was to have been funded as a Discount Loan shall be funded as an Federal Funds Rate Loan, (2) any Direct Loan that was to have been converted to or funded as a Eurodollar Loan shall, subject to the provisions hereof, be continued or funded as an Federal Funds Rate Loan, and (3) any outstanding Eurodollar Loan shall be converted, on the last day of the then current Interest Period with respect thereto, to an Federal Funds Rate Loan. Until such notice has been withdrawn by the Managing Administrative Agent, the Company shall not have the right to have a Multi-Year Loan or a Short Term Loan funded as a Discount Loan or to convert a Direct Loan to or fund or continue a Direct Loan as a Eurodollar Loan.

                 4(h)     Funding Indemnification. In addition to all other payment obligations hereunder, in the event: (1) any Multi-Year Loan or Short Term Loan funded as a Discount Loan or which is outstanding as a Eurodollar Loan is prepaid prior to the last day of the applicable Interest Period, whether following acceleration upon the occurrence of an Event of Default or otherwise, including, without limitation, pursuant to Paragraphs 14(a), 14(b) and 14(c) below, or (2) the Company shall fail to make a conversion into or a borrowing as a Eurodollar Loan after the Company has given notice thereof as provided in Paragraph 4(a)(2) above, or (3) the Company shall fail to continue any Direct Loan which it has elected to have continued as a Eurodollar Loan, or (4) the Company shall fail to borrow any Multi-Year Loan or Short Term Loan as a Discount Loan after giving a Pre-Funding Notice with respect thereto or fail to prepay any Discount Loan after having given notice of its intention so to do, or (5) the Company shall fail to make any payment of principal or interest on any Loan when due, then the Company shall immediately pay to each of the affected Lenders, through the Managing Administrative Agent, an additional amount compensating such Lender for all losses, costs and expenses incurred by such Lender in connection therewith, including, without limitation, such as may arise out of the re-employment of funds obtained by such Lender or from fees payable to terminate the deposits from which such funds were obtained, such losses, costs and expenses and the method of calculation thereof being set forth in reasonable detail in a statement delivered to the Company by such Lender, such statement to be conclusive in the absence of manifest error. Under no circumstances shall any Lender have any obligation to remit monies to the Company upon prepayment of any Discount Loan or any Eurodollar Loan, even under circumstances which do not result in the necessity for the payment by the Company of any amount hereunder. The provisions hereof shall survive termination of this Agreement and payment of the outstanding Loans and GNMA Pool Advance Loans and all other Obligations.

                 4(i)     Illegality; Impracticality. Notwithstanding any other provisions herein, if any law, regulation, treaty or directive or any change therein or in the interpretation or application thereof shall or may in the opinion of any Lender make it unlawful or impractical for such Lender to make or maintain Eurodollar Loans or purchase its Multi-Year Facility Percentage Share or Short Term Facility Percentage Share of Discount Loans: (1) the commitment of such Lender hereunder to purchase its Multi-Year Facility Percentage Share or Short Term Facility Percentage Share of Discount Loans or to make, continue or convert into Eurodollar Loans, as applicable, shall forthwith be cancelled and (2) such Lender’s Multi-Year Facility Percentage Share or Short Term Facility Percentage Share, as applicable, of Loans outstanding as Discount Loans or as Eurodollar Loans, if any, shall be converted automatically to Federal Funds Rate Loans at the end of their respective Interest Periods or within such earlier period as required by law. In the event the commitment of any Lender to purchase its Multi-Year Facility Percentage Share or Short Term Facility Percentage Share, as applicable, of Discount Loans shall be terminated hereunder, the agreement of the Balance Banks to fund Discount Loans shall be reduced in a like amount. In the event of a conversion of any Loan prior to the end of its applicable Interest Period the Company hereby agrees promptly to pay each Lender, upon its written demand, the amounts required pursuant to Paragraph 4(h) above, it being agreed and understood that such conversion shall constitute a prepayment for all purposes hereof. The provisions hereof shall survive the termination of this Agreement and payment of the outstanding Loans and GNMA Pool Advance Loans and all other Obligations.

                 4(j)     Requirements of Law; Increased Costs. In the event that a change subsequent to the date hereof in any applicable law, regulation, treaty or directive or in the governmental or judicial interpretation or application thereof, or compliance by any Lender with any request or directive (whether or not having the force of law) issued subsequent to the date hereof by any central bank or other governmental authority, agency or instrumentality:

                          (1)      Does or shall subject any Lender to any tax of any kind whatsoever with respect to this Agreement or any Loans or GNMA Pool Advance Loans purchased or made hereunder, or changes the basis of taxation of payments to such Lender of principal, fees, interest or any other amount payable hereunder (except for changes in the rate of tax on the overall net income of such Lender);

                          (2)      Does or shall impose, modify or hold applicable any reserve, special deposit, compulsory loan or similar requirement against assets held by, or deposits or other liabilities in or for the account of, advances or loans by, or other credit extended by, or any other acquisition of funds by, any office of such Lender which are not otherwise included in the determination of the Balance Bank Discount, the Lender Discount, the Applicable Federal Funds Rate or the Applicable Eurodollar Rate or the rate applicable to a Negotiated Loan or a GNMA Pool Advance Loan; or

                          (3)      Does or shall impose on such Lender any other condition; and the result of any of the foregoing is to increase the cost to such Lender of purchasing, making, agreeing to make, renewing or maintaining or issuing any Loan or any GNMA Pool Advance Loan or to reduce any amount receivable in respect thereof then, in any such case, the Company shall promptly pay to such Lender, upon its written demand, any additional amounts necessary to compensate such Lender for such additional cost or reduced amounts receivable as determined by such Lender with respect to this Agreement or such credit extensions. If a Lender becomes entitled to claim any additional amounts pursuant to this Paragraph 4(j), it shall promptly notify the Company of the event by reason of which it has become so entitled. A certificate as to any additional amounts payable pursuant to the foregoing sentence submitted by a Lender to the Company shall be conclusive in the absence of manifest error. The obligations of the Company under this Paragraph 4(j) shall survive the termination of this Agreement and the payment of all other Obligations.

                 4(k)     Taxes.

                          (1)      All payments made by the Company, the Managing Administrative Agent and the Lenders on account of the Obligations shall be made free and clear of, and without deduction or withholding for or on account of, any present or future income, stamp or other taxes, levies, imposts, duties, charges, fees, deductions or withholdings, now or hereafter imposed, levied, collected, withheld or assessed by any Governmental Authority, excluding, in the case of a Lender, net income taxes and franchise taxes (imposed in lieu of net income taxes), imposed on such Lender, as the case may be, as a result of a present or former connection between the jurisdiction of the government or taxing authority imposing such tax, or any political subdivision or taxing authority thereof or therein, and such Lender (other than a connection arising solely from such Lender having executed, delivered or performed its obligations or received a payment under, or enforced, the Credit Documents) (all such non-excluded taxes, levies, imposts, duties, charges, fees, deductions and withholdings being hereinafter called “Taxes”). If any Taxes are required to be withheld from any amounts payable to any Lender under the Credit Documents, the amounts so payable by the Company to the Managing Administrative Agent for the benefit of such Lender shall be increased to the extent necessary to yield to such Lender (after payment of all Taxes) interest or any such other amounts payable thereunder at the rates or in the amounts specified in the Credit Documents. Whenever any Taxes are payable by the Company or on behalf of the Company, the Company shall pay such Taxes to the appropriate taxing authority when due, and as promptly as possible thereafter the Company shall send to the Managing Administrative Agent for its own account or for the account of such Lender, as the case may be, a certified copy of an original official receipt received by the Company showing payment thereof. If the Company fails to pay any Taxes when due to the appropriate taxing authority or fails to remit to the Managing Administrative Agent the required receipts or other required documentary evidence, the Company shall indemnify the Managing Administrative Agent and such Lender for any incremental taxes, interest or penalties that may become payable by the Managing Administrative Agent and such Lender as a result of any such failure. The agreements in this subsection shall survive the termination of this Agreement and the payment of all other Obligations. Each Lender by executing this Agreement represents and warrants to the Company and the Managing Administrative Agent that at the date of this Agreement no Taxes are imposed upon such Lender which would result in increased liability of the Company to such Lender pursuant to this Paragraph 4(k)(1).

                          (2)      Each Lender that is not incorporated under the laws of the United States of America or a state thereof agrees that it will deliver to the Company and the Managing Administrative Agent (1) two duly completed copies of United States Internal Revenue Service Form 1001 or 4224 or successor applicable form, as the case may be, and (2) an Internal Revenue Service Form W-8 or W-9 or successor applicable form. Each such Lender also agrees to deliver to the Company and the Managing Administrative Agent two further copies of the said Form 1001 or 4224 and Form W-8 or W-9, or successor applicable forms or other manner of certification, as the case may be, on or before the date that any such form expires or becomes obsolete or after the occurrence of any event requiring a change in the most recent form previously delivered by it to the Company, and such extensions or renewals thereof as may reasonably be requested by the Company or the Managing Administrative Agent, unless in any such case an event (including, without limitation, any change in treaty, law or regulation) has occurred prior to the date on which any such delivery would otherwise be required which renders all such forms inapplicable or which would prevent such Lender from duly completing and delivering any such form with respect to it and such Lender so advises the Company and the Managing Administrative Agent. Such Lender shall certify (i) in the case of a Form 1001 or 4224, that it is entitled to receive payments under this Agreement without deduction or withholding of any United States federal income taxes and (ii) in the case of a Form W-8 or W-9, that it is entitled to an exemption from United States backup withholding tax.

                 4(l)     Treatment of Qualifying Balances; Indemnity. Each Balance Bank and the time to time with a view toward allowing the Company to maintain its deposit balances at such Balance Bank in types of deposit accounts bearing the lowest reserve requirements practicable consistent with the flexibility required by the Company to make frequent withdrawals and deposits. In the event that it shall be determined at any time that (1) any Balance Bank has incorrectly characterized deposit accounts maintained by the Company with such Balance Bank for purposes of determining required reserves, (2) any Balance Bank has maintained inadequate reserves in respect of such deposit accounts, (3) the cost of reserves used in the calculation of the amount of Qualifying Balances at any time was the cost of the inadequate reserves so maintained or (4) any Balance Bank is required to maintain retroactive reserves, or to pay other costs, penalties or charges, as a result thereof, then, in any such event, the Company shall pay to such Balance Bank on demand the additional amounts necessary to compensate such Balance Bank for the cost of maintaining such retroactive reserves and for any other costs, penalties or charges related thereto, including any amounts arising from a recalculation of the “Balance Deficiency Fee” referred to in the applicable Balance Bank Agreement. A certificate as to any additional amounts payable pursuant to this subsection submitted by a Balance Bank directly to the Company prior to the occurrence of an Event of Default and acceleration of the Obligations, and through the Managing Administrative Agent thereafter, shall be conclusive in the absence of manifest error. The agreements in this subsection shall survive termination of this Agreement and payment of all other Obligations.

                 4(m)     Obligation of Lenders to Mitigate; Replacement of Lenders. Each Lender agrees that:

                          (1)      As promptly as practicable after the officer of such Lender responsible for administering the Loans of such Lender becomes aware of any event or condition that would entitle such Lender to receive payments under Paragraph 4(j) above or to cease making Eurodollar Loans or to cease purchasing its Multi-Year Facility Percentage Share or Short Term Facility Percentage Share of Discount Loans pursuant to Paragraph 4(i) above, such Lender will use reasonable efforts (i) to make, issue, fund or maintain the affected Loans of such Lender through another lending office of such Lender or (ii) take such other measures as such Lender may deem reasonable, if as a result thereof the additional amounts which would otherwise be required to be paid to such Lender pursuant to Paragraph 4(j) above would be materially reduced or eliminated or the conditions rendering such Lender incapable of making Eurodollar Loans or purchasing its Multi-Year Facility Percentage Share or Short Term Facility Percentage Share of Discount Loans under Paragraph 4(i) above no longer would be applicable, and if, as determined by such Lender in its sole discretion, the making, issuing, funding or maintaining or purchasing of such Loans through such other lending office or in accordance with such other measures, as the case may be, would not otherwise materially adversely affect such Loans or the interests of such Lender.

                          (2)      If the Company receives a notice pursuant to Paragraph 4(j) above or a notice pursuant to Paragraph 4(i) above stating that a Lender is unable to extend Eurodollar Loans or purchase its Multi-Year Facility Percentage Share or Short Term Facility Percentage Share of Discount Loans (for reasons not generally applicable to the Majority Lenders), so long as (i) no Potential Default or Event of Default shall have occurred and be continuing, (ii) the Company has obtained a commitment from another Lender or another financial institution reasonably acceptable to the Managing Administrative Agent to purchase at par such Lender’s Loans, Maximum Multi-Year Facility Commitment and Maximum Short Term Facility Commitment, accrued interest and fees and to assume all obligations of the Lender to be replaced under the Credit Documents, and (iii) such Lender to be replaced is unwilling to withdraw the notice delivered to the Company, upon thirty (30) days’ prior written notice to such Lender and the Managing Administrative Agent and payment of any amounts due under Paragraph 4(j) above, the Company may require, at the Company’s expense and subject to Paragraph 4(h) above, the Lender giving such notice to assign, without recourse, all of its Loans, Maximum Multi-Year Facility Commitment, Maximum Short Term Facility Commitment, accrued interest and fees to such other Lender or financial institution pursuant to the provisions of Paragraph 14 below.

                 4(n)     Buy-Down Provisions. Notwithstanding anything contained in this Agreement, the Company and any individual Lender may notify the Managing Administrative Agent in writing that the Company and such Lender have entered into an agreement (a “Buy-Down Agreement”) with respect to all or a portion of the Loans from time to time outstanding held by such Lender, and that, pursuant to said Buy-Down Agreement, the interest rate otherwise applicable to such Loans during any interest calculation period shall be reduced to such lower rate as may be agreed to by the Company and such Lender and the interest otherwise payable by the Company to such Lender during such interest calculation period with respect to such Loans shall be reduced accordingly. The Managing Administrative Agent, in rendering any interest billing pursuant to Paragraph 5(d) below, shall bill such interest payable to such Lender as instructed by such Lender from time to time (it being agreed and understood that unless otherwise instructed by such Lender the Administrative Agent shall bill interest at the rate or rate which would otherwise apply and that the Administrative Agent shall have no obligation or duty to verify any interest rate instruction provided by such Lender). The Company shall pay all such interest in accordance with Paragraph 5(d) below. Any deficiency fees or other amounts payable to any Lender by the Company under the a Buy-Down Agreement shall be billed by such Lender to the Company directly.

         5.     Miscellaneous Lending Provisions.

                 5(a)     Use of Proceeds. The proceeds of Loans shall be utilized by the Company solely to repay Indebtedness of the Company (including Indebtedness of the Company to the Parent permitted to be repaid by the Company to the Parent pursuant to the terms of the Credit Documents and including CPNs) and for other general corporate purposes, including, without limitation, Advances permitted pursuant to Paragraph 10(g) below. The proceeds of the GNMA Pool Advance Loans shall be used solely for the purpose of fulfilling the Company’s obligations to GNMA as described in the GNMA Pool Advance Agreement.

                 5(b)     Assumption of Funding/Purchase. The Managing Administrative Agent may (but shall not be obligated to) assume that each Multi-Year Lender has advanced its Multi-Year Facility Percentage Share of Multi-Year Loans, that each Short Term Lender has advanced its Short Term Facility Percentage Share of Short Term Loans and that each Lender has advanced other Loans required to be funded by such Lender hereunder and that the GNMA Pool Advance Lender has advanced such GNMA Pool Advance Loans as are to be advanced by it on the funding date therefor and may, in reliance upon such assumption, make available to the Company on such date a corresponding amount. If and to the extent any Lender shall not have so made such amounts available, such Lender and the Company jointly and severally agree to repay to the Managing Administrative Agent forthwith on demand such corresponding amount together with interest thereon, for each day from the date such amount is made available to the Company until the date such amount is repaid to the Managing Administrative Agent, at, in the case of the Company, the interest rate applicable at the time to the subject Loan or GNMA Pool Advance Loan and, in the case of the Lenders, the Federal Funds Effective Rate. If such Lender shall repay to the Managing Administrative Agent such corresponding amount, such amount so repaid shall constitute such Lender’s Multi-Year Facility Percentage Share or Short Term Facility Percentage Share, as applicable, of the subject Loan or, as applicable, the other subject Loans or the subject GNMA Pool Advance Loans for all purposes of the Credit Documents. Nothing contained herein shall affect the liability of any Lender for its failure to make its Multi-Year Facility Percentage Share of Multi-Year Loans or its Short Term Facility Percentage Share of Short Term Loans or its other Loans or GNMA Pool Advance Loans available to the Company as required pursuant to this Agreement and the other Credit Documents.

                 5(c)     Evidence of Indebtedness. The obligation of the Company to repay Loans and GNMA Pool Advance Loans shall be evidenced by notations on the books and records of the Managing Administrative Agent and the Lenders. Such accounts shall be conclusive absent manifest error. Any failure to record the advance of any Loan or GNMA Pool Advance Loan, the interest rate applicable thereto or any other information regarding the Obligations, or any error in doing so, shall not limit or otherwise affect the obligation of the Company with respect to any of the Obligations. Upon the request of any Lender, the Company shall promptly execute a promissory note or promissory notes in favor of such Lender evidencing the Obligations held by such Lender hereunder.

                 5(d)     Interest and Fee Billing and Payment. The Managing Administrative Agent

                          (1)      On or before the first Business Day of each month notify the Company (which notification may be telephonic) of the estimated amount of interest payable with respect to Federal Funds Rate Loans and Swing Loans as of the fifth day of the current month for the period from and including the first day of the immediately preceding month to and including the last day of such month, with the actual amount confirmed by notification by the Managing Administrative Agent to the Company (which notification may be telephonic and which, if telephonic, shall be promptly confirmed in writing) given no later than 9:00 a.m. (Los Angeles time) on the due date of payment thereof;

                          (2)       On the last day of the Interest Period for each Eurodollar Loan and, in the case any Eurodollar Loan having a six month Interest Period, on the ninetieth (90th) day following the day on which such Eurodollar Loan was made, notify the Company, which notification may be telephonic and which, if telephonic, shall be promptly confirmed in writing, of the amount of interest payable on such date on account thereof;

                          (3)      On or before the first Business Day of the first month of each calendar quarter and on the Short Term Facility Maturity Date and the Multi-Year Facility Maturity Date, notify the Company (which notification may be telephonic) of the amount of facility fees payable pursuant to the Fee Letters, which facility fees shall be payable in arrears for each calendar quarter on the fifth day of such month for the immediately succeeding calendar quarter and (i) in the case of the Short Term Facility Fee Letter, on the Short Term Facility Maturity Date and (ii); in the case of the Multi-Year Facility Fee Letter, on the Multi-Year Facility Maturity Date; and

                          (4)      From time to time upon the request of any Lender, deliver to the Company a funding indemnification billing for amounts payable to such Lender pursuant to Paragraph 4(h) above or a billing for amounts payable to such Lender pursuant to Paragraphs 4(j), 4(k) and 4(l) above and Paragraph 5(l) below.

The Company shall pay the full amount of interest and fees of which it has been notified pursuant to subparagraphs (1) and (3) above on the fifth day of each month, shall pay the full amount of interest of which it has been notified pursuant to subparagraph (2) above on the date such notification is given and shall pay the full amount of each billing delivered to it pursuant to subparagraph (4) above within five Business Days thereafter. Interest payable with respect to GNMA Pool Advance Loans prior to the occurrence of an Event of Default and acceleration of the Obligations shall be billed to the Company directly by the GNMA Pool Advance Lender in accordance with the timeframes set forth in subparagraph (1) above, and the Company shall pay the full amount of interest due on GNMA Pool Advance Loans directly to such Lender on the fifth day of each month. Interest payable with respect to Negotiated Loans prior to the occurrence of an Event of Default and acceleration of the Obligations shall be billed to the Company directly by each Lender which advanced such Negotiated Loans on the last day of the Interest Period for such Negotiated Loan, and the Company shall pay the full amount of interest due on such Negotiated Loans directly to each such Lender on such date. Following the occurrence of an Event of Default and acceleration of the Obligations, interest payable on Loans and GNMA Pool Advance Loans shall be billed through the Managing Administrative Agent.

                 5(e)     Nature and Place of Payments. Except as otherwise expressly provided in the Credit Documents, all payments made on account of the Obligations shall be made to the Managing Administrative Agent at the Contact Office for distribution to the Lenders, as the Company shall, subject to Paragraph 5(h) below, direct pursuant to a Loan Request, Interest Rate Election and Payoff Notice, without set-off or counterclaim in lawful money of the United States of America in immediately available same day funds, and must be received by the Managing Administrative Agent accompanied by a Loan Request, Interest Rate Election and Payoff Notice at the Contact Office by 11:30 a.m. (Los Angeles time) on the day of payment, it being expressly agreed and understood that if a payment is received after 11:30 a.m. (Los Angeles time) by the Managing Administrative Agent or the Managing Administrative Agent does not receive a Loan Request, Interest Rate Election and Payoff Notice therefor, such payment will be considered to have been made on the next succeeding Business Day or such later date as the Managing Administrative Agent receives the Loan Request, Interest Rate Election and Payoff Notice therefor and interest thereon shall be payable by the Company at the then applicable rate during such extension. If any payment required to be made by the Company hereunder becomes due and payable on a day other than a Business Day, the due date thereof shall be extended to the next succeeding Business Day and interest thereon shall be payable at the then applicable rate during such extension. The Managing Administrative Agent is hereby authorized to debit accounts of the Company maintained with the Managing Administrative Agent for amounts payable by the Company under this Agreement through the Managing Administrative Agent and the Managing Administrative Agent will promptly notify the Company of any such debit.

                 5(f).....Post-Default Interest. Following the occurrence of an Event of Default --------------------- and until such Event of Default is cured or waived as provided herein, Obligations shall bear interest at a per annum rate equal to the Alternate Base Rate plus three percent (3%).

                 5(g)     Computations. All computations of interest and fees payable hereunder and under the Fee Letters and computations of each Balance Bank Discount and Lender Discount shall be based upon a year of 360 days for the actual number of days elapsed. The determination by the Managing Administrative Agent of a Balance Bank Discount, a Lender Discount or interest rate hereunder shall be conclusive and binding on the Company and the Lenders absent manifest error.

                 5(h)     Disbursement of Payments Received.

                          (1)      All amounts received by the Managing Administrative Agent on account of the Obligations shall be disbursed by the Managing Administrative Agent to the Lenders by wire transfer prior to the cut-off deadline of the Federal Reserve Wire System on the date of receipt if received by the Managing Administrative Agent before 11:30 a.m. (Los Angeles time) and accompanied by a Loan Request, Interest Rate Election and Payoff Notice (or disbursed on the day of receipt although received later than 11:30 a.m. (Los Angeles time) with the agreement of the Managing Administrative Agent and any Lender) or if received later or if the Managing Administrative Agent has not received a Loan Request, Interest Rate Election and Payoff Notice therefor, on the next succeeding Business Day or such later date as the Managing Administrative Agent receives the Loan Request, Interest Rate Election and Payoff Notice relating thereto, without interest payable by the Managing Administrative Agent.

                          (2)      Prior to the occurrence of an Event of Default and acceleration of the Obligations, amounts received by the Managing Administrative Agent on account of the Obligations shall be disbursed in accordance with the written direction of the Company, subject only to the requirements that amounts disbursed to the Multi-Year Lenders on account of Multi-Year Loans be disbursed pro rata in accordance with the Multi-Year Lenders’ respective Multi-Year Facility Percentage Shares, that amounts disbursed to the Multi-Year Swing Line Lenders on account of Multi-Year Swing Loans be disbursed pro rata in accordance with the Multi-Year Swing Line Lenders’ respective Multi-Year Swing Line Percentage Shares, that amounts disbursed to the Short Term Lenders on account of Short Term Loans be disbursed pro rata in accordance with the Short Term Lenders’ respective Short Term Facility Percentage Shares and that amounts disbursed to the Short Term Swing Line Lenders on account of Short Term Swing Loans be disbursed pro rata in accordance with the Short Term Swing Line Lenders’ respective Short Term Swing Line Percentage Shares.

                          (3)      Following the occurrence of an Event of Default and acceleration of the Obligations, amounts received by the Managing Administrative Agent on account of the Obligations shall be disbursed as follows: (i) first among the Lenders, pro rata in accordance with their respective Aggregate Percentage Shares, on account of the Obligations (other than Additional Commitment Negotiated Loans and Obligations relating thereto) until such Obligations have been paid in full, (ii) then to the Lenders holding outstanding Additional Commitment Negotiated Loans and Obligations relating thereto, pro rata in accordance with their respective Additional Commitment Negotiated Loans Percentage Shares, until all Additional Commitment Negotiated Loans and Obligations relating thereto have been paid in full, and (iii) then, to the Managing Administrative Agent with respect to the remaining Obligations held by it in its capacity as Managing Administrative Agent until such Obligations have been paid in full.

                 5(i)     Fees. The Company shall pay:

                          (1)      To the Managing Administrative Agent, the Administrative Agents and the Co-Arrangers such fees as may from time to time be agreed upon in writing by such Persons and the Company;

                          (2)      To each of the Multi-Year Lenders, the facility fees described in the Multi-Year Facility Fee Letter and to each of the Short Term Lenders, the facility fees described in the Short Term Facility Fee Letter;

                          (3)      To each of the Balance Banks, the additional fees described in the Balance Bank Agreements; and

                          (4)      To the GNMA Pool Advance Lender, fees on account of the GNMA Pool Advance Commitment in such amounts and at such times as may be established in writing from time to time by the Company and the GNMA Pool Advance Lender.

                 5(j)     Wire Transfers of Funds. Notwithstanding anything to the contrary contained herein and in the other Credit Documents, funds which the Managing Administrative Agent and the Lenders are transmitting by wire transfer shall be deemed to have been sent and received upon release by the transmitting party of such funds into the Federal Reserve Wire System.

                 5(k)     Reduction in Aggregate Credit Limit. Upon not less than thirty (30) days' prior written notice to the Managing Administrative Agent, which shall promptly transmit such notice to each of the Lenders, the Company may permanently reduce the Aggregate Credit Limit in full or in increments of $5,000,000.00; provided, however, that any such reduction shall be in a minimum amount of $25,000,000.00; and, provided, further, that upon the effective date of any such reduction, the aggregate amount of Loans outstanding, the GNMA Pool Advance Commitment, Outstanding CPNs and outstanding Funding Checks shall not exceed the Aggregate Credit Limit as so reduced.

                 5(l)     Capital Requirements. The Company shall pay from time to time upon demand such amounts as any Lender may determine to be necessary to compensate such Lender for all reasonable costs which such Lender determines are attributable to its making, agreeing to make, purchasing or maintaining its Multi-Year Facility Percentage Share of any Multi-Year Loan, its Short Term Facility Percentage Share of any Short Term Loan or other Loan or GNMA Pool Advance Loan under this Agreement or its obligation to make or purchase its Multi-Year Facility Percentage Share of any Multi-Year Loan or its Short Term Facility Percentage Share of any Short Term Loan or to make any other Loan or GNMA Pool Advance Loan, including, without limitation, reserve requirements attributed to the unused portion of the Aggregate Credit Limit, in respect of any amount of capital required to be maintained by such Lender pursuant to any law or regulation of any jurisdiction or any interpretation, directive or request affecting banks, savings and loan institutions and/or financial institutions generally notwithstanding the creditworthiness of any particular bank, savings and loan institution or other financial institution (whether or not having the force of law) of any court or governmental or monetary authority, whether in effect on the date of this Agreement or thereafter. The obligations of the Company under this Paragraph 5(l) shall survive the termination of this Agreement and the payment of all Loans and all other Obligations.

         6.     Guaranties; Subordinations; Additional Documents.

                 6(a)     Guaranties and Subordination Agreements. As support for the Obligations, the Company shall cause to be executed and delivered to the Managing Administrative Agent on behalf of the Lenders:

                          (1)      On or before the Effective Date:

                                  (i)      From the Parent, the Parent Guaranty and the Parent Subordination Agreement; and

                                  (ii)      From each Initial Subsidiary Guarantor, a Subsidiary Guaranty and a Subsidiary Guarantor Subordination Agreement; and

                          (2)      Following the Effective Date from each Subsidiary Guarantor formed or acquired after the Effective Date and each Subsidiary existing on the Effective Date which becomes a Subsidiary Guarantor following the Effective Date), a Subsidiary Guaranty and a Subsidiary Guarantor Subordination Agreement.

                 6(b)     Further Documents. The Company agrees to execute and deliver and to cause to be executed and delivered to the Managing Administrative Agent or such Persons as the Managing Administrative Agent may direct from time to time such documents, instruments and agreements as the Managing Administrative Agent on behalf of the Lenders may reasonably request, which are in any of the Lenders’ judgment necessary or desirable to obtain for the Managing Administrative Agent, the Administrative Agents, the Documentation Agent, the Co-Syndication Agents, the Other Facility Agents and the Lenders the benefit of the Credit Documents.

         7.      Conditions Precedent.

                 7(a)     Effective Date. As conditions precedent to the Effective Date:

                          (1)      There shall have been delivered to the Managing Administrative Agent, in form and substance and in quantities reasonably satisfactory to the Lenders and their counsel, each of the following:

                                  (i)      A duly executed copy of this Agreement;

                                  (ii)      A duly executed copy of each of the Parent Guaranty and the Parent Subordination Agreement;

                                  (iii)      A duly executed copy of a Subsidiary Guaranty and a Subsidiary Guarantor Subordination Agreement from each Initial Subsidiary Guarantor;

                                  (iv)      A duly executed copy of each of the Multi-Year Facility Fee Letter and the Short Term Facility Fee Letter and, in immediately available funds, the dollar amount of all fees payable thereunder on the Effective Date;

                                  (v)       Such credit applications, financial statements, pro forma financial statements, authorizations and information concerning the Company, its Subsidiaries and their respective businesses, operations and condition (financial and otherwise) as the Managing Administrative Agent or any Lender may reasonably request;

                                  (vi)      Certified copies of resolutions of the Boards of Directors of the Company and the Parent approving the execution and delivery of all documents required to be delivered by the Company and the Parent hereunder;

                                  (vi)      Certificates of the Secretary or an Assistant Secretary of each of the Company and the Parent certifying the names, incumbency and true signatures of the officers of the Company and the Parent authorized to sign the documents required to be executed and delivered by the Company and the Parent

hereunder;

                                  (vii)      From each of the Initial Subsidiary Guarantors, such authorizing documentation and evidence of incumbency as the Managing Administrative Agent may require;

                                  (viii)      An opinion of counsel for the Company, each Initial Subsidiary Guarantor, and the Parent (which counsel may be in-house counsel) in form and substance satisfactory to the Lenders and covering such matters as the Lenders may reasonably request;

                                  (ix)      A Closing Certificate duly executed by an executive officer of each of the Company and the Parent and dated as of the date of the first Credit Event;

                                  (x)       A Covenant Compliance Certificate, dated as of August 31, 2001, for each of the Company and the Parent demonstrating in detail satisfactory to the Lenders the Company’s compliance with the covenants set forth in Paragraphs 10(i) and 10(j) below, and the Parent’s compliance with the financial covenants set forth in Paragraphs 11(a) and 11(b) of the Parent Guaranty; and

                                  (xi)      A duly executed copy of the Balance Bank Agreement with each Balance Bank if any such Balance Bank Agreements are in place as of the Effective Date.

                          (2)      All acts and conditions (including, without limitation, the obtaining of all necessary regulatory approvals and the making of all required filings, recordings and registrations) required to be done and performed and to have happened precedent to the execution, delivery and performance of the Credit Documents and to constitute the same legal, valid and binding obligations, enforceable in accordance with their respective terms, shall have been done and performed and shall have happened in due and strict compliance with all applicable laws.

                          (3)      All documentation, including, without limitation, documentation for corporate and legal proceedings in connection with the transactions contemplated by the Credit Documents, shall be satisfactory in form and substance to the Lenders and their counsel.

                          (4)      The Company shall have delivered to each of Managing Administrative Agent, the Administrative Agents and the Co-Arrangers letters acceptable to each such Person, respectively, regarding the payment by the Company to each such Person of fees, and the Company shall have paid all fees required under each such letter to have been paid prior to the first Credit Event hereunder.

                          (5)      All "Obligations" outstanding under (and as the term “Obligations” is defined in) the Existing Credit Agreement shall have been (or shall upon the happening of the first Credit Event hereunder be) paid in full and the Existing Credit Agreement and any obligations of the Existing Lenders to make advances thereunder terminated.

                          (6)       No material adverse change in the business, operations, assets or financial or other condition of the Company or of the Parent and its consolidated Subsidiaries taken as a whole shall have occurred since August 31, 2001 and the Company by presenting the initial Loan Request, Interest Rate Election and Payoff Notice shall be deemed to have so represented and warranted hereunder.

                          (7)      There shall not exist any action, suit, investigation or proceeding pending or threatened in or before any court, arbitrator or Governmental Authority that would, if decided adversely, have a material adverse effect on the Company or on the Parent and its consolidated Subsidiaries taken as a whole or on any transaction contemplated hereby or could have a material adverse effect on the Company, the Parent or their respective Subsidiaries or any transaction contemplated hereby or on the ability of the Company, the Parent or any Initial Subsidiary Guarantor to perform its obligations under any of the Credit Documents to which it is party.

(8) The Company, the Parent and each of their respective Subsidiaries shall be in compliance with the terms and conditions of all Indebtedness of such Persons. 7(b).....All Credit Events. As conditions precedent to each Credit Event ----------------- hereunder, at and as of the date of, and after giving effect to, such Credit Event: (1) The representations and warranties of the Company and the Parent contained in the Credit Documents shall be accurate and complete in all respects; (2) There shall not have occurred and be continuing a Potential Default or an Event of Default which has not been waived in writing by the requisite Lenders as required pursuant to this Agreement; (3) Following such Credit Event, the aggregate principal amount of Loans outstanding shall not exceed the applicable limitations of Paragraphs 1(a), 1(b), 1(c), 1(d) and 1(e) above; (4) The Company shall have delivered to the Managing Administrative Agent a duly executed Loan Request, Interest Rate Election and Payoff Notice requesting such Credit Event; and (5) If the Credit Event is the making of a Discount Loan: (i) the

  Company shall have delivered a timely Pre-Funding Notice with respect thereto; and (ii) the Balance Bank funding said Discount Loan shall have received from each Lender the amount payable by such Lender on account thereof pursuant to Paragraph 2(c) above, it being expressly agreed and understood that in the event any Lender has not delivered to such Balance Bank the amount payable by such Lender, the Discount Loan disbursed to the Company shall be reduced by the amount not received.

By delivering a Loan Request, Interest Rate Election and Payoff Notice to the Managing Administrative Agent, the Company shall be deemed to have represented and warranted the accuracy and completeness of the statements set forth in subparagraphs (b)(1) through (b)(5) above and all information set forth in such Loan Request, Interest Rate Election and Payoff Notice.

7(c).....Extension of Short Term Facility Maturity Date As conditions precedent to ------------------------------------------------

each extension of the Short Term Facility Maturity Date, at and as of the then current Short Term Facility Maturity Date and the effective date of such extension, if different, and subject to written waiver by one hundred percent (100%) of the Short Term Lenders which have otherwise agreed to such extension:

(1) The representations and warranties of the Company and the Parent contained in the Credit Documents shall be accurate and complete in all respects; (2) No material adverse change in the business, operations, assets or

  financial or other condition of the Company or of the Parent and its consolidated Subsidiaries taken as a whole shall have occurred since the last day of the fiscal quarter of the Parent immediately preceding the then current Short Term Facility Maturity Date;

(3) There shall not exist any action, suit, investigation or

  proceeding pending or threatened in or before any court, arbitrator or Governmental Authority that would, if decided adversely, have a material adverse effect on the Company or on the Parent and its consolidated Subsidiaries taken as a whole or on any transaction contemplated hereby or could have a material adverse effect on the Company, the Parent or their respective Subsidiaries or any transaction contemplated hereby or on the ability of the Company, the Parent or any Initial Subsidiary Guarantor to perform its obligations under any of the Credit Documents to which it is party;

(4) There shall not have occurred and be continuing a Potential

  Default or an Event of Default which has not been waived in writing by the Short Term Lenders which have agreed to remain as Short Term Lenders under this Agreement following the extension of the Short Term Facility Maturity Date; and

(5) There shall have been executed and delivered by the Company, the

  Parent, each Subsidiary Guarantor, the Administrative Agent and each of the Short Term Lenders which have agreed to remain as Short Term Lenders under this Agreement following the extension of the Short Term Facility Maturity Date, such documents, instruments and agreements as are deemed necessary to reflect the extension and and terms and conditions, including without limitation, interest and fees, as the Administrative Agent and each of such Short Term Lenders may have reasonably required.

By delivering a request for the extension of any Short Term Facility Maturity Date, the Company shall be deemed to have represented and warranted the accuracy and completeness of the statements set forth in subparagraphs (c)(1) through (c)(4) above. It is expressly agreed that this Paragraph 7(c) does not apply to the conversion of Short Term Loans into the Short Term Facility Term-Out Loan pursuant to Paragraph 3(c) above.

8. Representations and Warranties of the Company. As an inducement to the Agents and --------------------------------------------- each Lender to enter into this Agreement, the Company represents and warrants to the Agents and each Lender that: 8(a).....Financial Condition. The financial statements, respectively dated the -------------------

Statement Date and August 31, 2001, copies of which have heretofore been furnished to the Managing Administrative Agent and each Lender, are complete and correct and present fairly in accordance with GAAP the consolidated and consolidating financial condition of the Parent and its consolidated Subsidiaries at such dates and the consolidated and consolidating results of their operations and changes in financial position for the fiscal periods then ended.

8(b).....Corporate Existence; Compliance with Law. Each of the Parent and its ----------------------------------------

Subsidiaries: (1) is duly organized, validly existing and in good standing as a corporation or other legal entity under the laws of the state of its incorporation, and is in good standing as a foreign corporation in each jurisdiction where its ownership of property or conduct of business requires such qualification and where failure to be in good standing could have a material adverse effect on the Parent, any of its Subsidiaries, or their respective property and/or business or on the ability of the Parent, the Company or any of Subsidiary Guarantor to pay or perform the Credit Documents to which it is party; (2) has the power and authority and the legal right to own and operate its property and to conduct business in the manner in which it does and proposes so to do; and (3) is in compliance with all Requirements of Law and Contractual Obligations except to the extent that failure to comply could not have a material adverse effect on the Parent, any of its Subsidiaries, or their respective property and/or business or on the ability of the Parent, the Company or any of the Subsidiary Guarantors to pay or perform the Credit Documents to which it is party.

8(c).....Corporate Power; Authorization; Enforceable Obligations. Each of the -------------------------------------------------------

Company, the Parent and the Subsidiary Guarantors has the corporate power and authority and the legal right to execute, deliver and perform the Credit Documents to which it is a party and has taken all necessary corporate action to authorize the execution, delivery and performance of such Credit Documents. The Credit Documents to which the Company, the Parent and the Subsidiary Guarantors, as applicable, are party, have been duly executed and delivered on behalf of such Persons and constitute legal, valid and binding obligations of such Persons enforceable against such Persons in accordance with their respective terms.

8(d).....No Legal Bar. The execution, delivery and performance of the Credit ------------

Documents, the borrowing thereunder and the use of the proceeds thereof, will not violate any Requirement of Law or any Contractual Obligation of the Company, the Parent or any of their respective Subsidiaries to the extent that failure to comply therewith could have a material adverse effect on the Company or its property and/or business or on the ability of the Parent, Company or any of the Subsidiary Guarantors to pay or perform the Credit Documents to which it is party.

8(e).....No Material Litigation. Except as disclosed on Schedule 8(a) attached ---------------------- -------------

hereto, no litigation, investigation or proceeding of or before any court, arbitrator or Governmental Authority is pending or, to the knowledge of the Company, threatened by or against the Company or any of its Subsidiaries or against any of such parties’ properties or revenues involving amounts, in the aggregate, in excess of $100,000,000.00.

8(f).....Taxes. The Parent and each of its Subsidiaries have filed or caused to be -----

filed all tax returns that are required to be filed and have paid all taxes (other than incidental local business and other municipal taxes which are not material to the operation of the Parent and its Subsidiaries) shown to be due and payable on said returns or on any assessments made against them or any of their property other than taxes which are being contested in good faith by appropriate proceedings and as to which the Parent or the applicable Subsidiary has established adequate reserves in conformity with GAAP.

8(g).....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. 8(h).....Subsidiaries. Schedule 8(h) attached hereto sets forth an accurate and ------------ -------------

complete list of all presently existing Subsidiaries of the Parent, their respective jurisdictions of organization, the percentage of their capital stock or other equity interests owned by the Parent or other Subsidiaries of the Parent, the legal nature of such Person and whether such Subsidiary is a “Subsidiary Guarantor”. All of the issued and outstanding shares of capital stock of the Subsidiaries of the Parent have been duly authorized and issued and are fully paid and non-assessable. Countrywide Home Loans Servicing LP, a Texas limited partnership, is the sole Initial Subsidiary Guarantor.

8(i).....Federal Reserve Board Regulations. Neither the Parent nor any of its ---------------------------------

Subsidiaries is engaged or will engage, principally or as one of its important activities, in the business of extending credit for the purpose of “purchasing” or “carrying” any “margin stock” within the respective meanings of such terms under Regulation U. No part of the proceeds of any Loan made hereunder will be used for “purchasing” or “carrying” “margin stock” as so defined or for any purpose which violates, or which would be inconsistent with, the provisions of the Regulations of the Board of Governors of the Federal Reserve System.

8(j).....ERISA. The Parent and each of its Subsidiaries are in compliance in all -----

material respects with the requirements of ERISA and no Reportable Event has occurred under any Plan maintained by the Parent or any of its or their Subsidiaries which is likely to result in the termination of such Plan for purposes of Title IV of ERISA.

8(k).....Assets. The Company and each of its Subsidiaries have good and marketable ------

title to all property and assets reflected in the financial statements referred to in Paragraph 8(a) above, except property and assets sold or otherwise disposed of in the ordinary course of business subsequent to that date. Neither the Company nor any of its Subsidiaries has outstanding Liens on any of its properties or assets nor are there any security agreements to which the Company or any of its Subsidiaries is a party, or title retention agreements, whether in the form of leases or otherwise, of any personal property except as reflected in said financial statements referred to in Paragraph 8(a) above or as permitted under Paragraph 10(a) below.

8(l).....Consents, etc. Except for consents, approvals and authorizations --------------

previously obtained and which, if necessary, are in full force and effect, no consent, approval or authorization of, or registration, declaration or filing with, any Person is required in connection with the execution and delivery by the Parent, the Company or any Subsidiary Guarantor of the Credit Documents or the borrowing hereunder or the performance by the Parent, the Company or any Subsidiary Guarantor of or compliance by any such Person with the terms, provisions and conditions hereof or thereof.

9. Affirmative Covenants. The Company hereby covenants and agrees that, as long as --------------------- any Obligations remain unpaid or any Lender has any obligation to make or purchase all or any portion of any Loans or to make GNMA Pool Advance Loans, the Company shall: 9(a).....Financial Statements. Furnish or cause to be furnished directly to the -------------------- Managing Administrative Agent and each Lender: (1) Within ninety (90) days after the last day of each fiscal year of

  the Parent, consolidated statements of income and statements of changes in cash flow of the Parent and its Subsidiaries for such year and a balance sheet of the Parent and it Subsidiaries as of the end of such year (including therein as supplemental information, consolidating statements of income and statements of changes in cash flow and balance sheets as of the end of such year) in each case presented fairly in accordance with GAAP and, in the case of the Company, the requirements of HUD Handbook IG 4000.3 REV and accompanied, in all cases, by an unqualified report of a firm of independent certified public accountants acceptable to the Majority Lenders;

(2) Within forty-five (45) days after the last day of each fiscal

  quarter, consolidated and consolidating statements of income and statements of changes in cash flow of the Parent and its Subsidiaries for such fiscal quarter or calendar month, as applicable, and balance sheets of the Parent and its Subsidiaries as of the last day of such fiscal quarter, presented fairly in accordance with GAAP, in each case certified in writing as to fairness of presentation by the chief financial officer or treasurer of the Company and the Parent;

(3) Within forty-five (45) days following each Applicable Financial

  Test Date, a Covenant Compliance Certificate from the chief financial officer or treasurer of each of the Company and the Parent, certifying that there does not exist an Event of Default or Potential Default and, in addition, demonstrating in detail satisfactory to the Majority Lenders the Company’s compliance with the covenants set forth in Paragraphs 10(i) and 10(j) below as of and at such Applicable Financial Test Date, and the Parent’s compliance with the covenants set forth in Paragraphs 11(a) and 11(b) of the Parent Guaranty as of and at such Applicable Financial Test Date;

(4) As soon as is available any written report pertaining to material

  items in respect of the internal control matters of the Parent or the Company submitted to any of such Persons by their respective independent accountants in connection with each annual or interim special audit of the financial condition of such Persons made by such independent public accountants; and

(5) Copies of all proxy statements, financial statements, and reports

  which the Parent sends to its stockholders, and copies of all regular, periodic and special reports, and all registration statements under the Securities Act of 1933, as amended (the “Act”), which the Parent or the Company files with the Securities and Exchange Commission or any governmental authority which may be substituted therefor, or with any national securities exchange; provided, however, that there shall not be required to be delivered hereunder to the Managing Administrative Agent such copies for any Lender of prospectuses relating to future series of offerings under registration statements filed under Rule 415 of the Act or other items which such Lender has indicated in writing to the Parent or the Company from time to time need not be delivered to such Lender.

9(b).....Certificates; Reports; Other Information. Furnish or cause to be ---------------------------------------- furnished directly to the Managing Administrative Agent and each Lender: (1) Within forty-five (45) days following each Applicable Financial

  Test Date, prepared as of such Applicable Financial Test Date and certified by an appropriate officer of the Company, a report covering the servicing portfolio of the Company and each of the Subsidiary Guarantors covering such matters as the Majority Lenders, through the Managing Administrative Agent, may reasonably request (but which shall in any event list the aggregate principal amount of mortgage notes serviced and the number and types of loans evidenced by such notes, and show all loans in the servicing portfolio more than thirty (30) days past due the due dates set forth in such notes). In addition, such report shall also include a schedule specifically identifying the Servicing Contracts and Servicing Hedge Instruments that have been pledged (and as to which the Company shall automatically be deemed to represent and warrant secures Indebtedness conforming to the requirements of Paragraphs 10(a)(6) and 10(a)(7) below), which schedule shall be in form and detail satisfactory to the Managing Administrative Agent and which report shall in any event set forth for such pledged Servicing Contracts and pledged Servicing Hedge Instruments, as applicable: (i) the aggregate unpaid principal balance of the Mortgage Loans being serviced pursuant to such Servicing Contracts, (ii) the aggregate notional amount of such Servicing Hedge Instruments, (iii) the value thereof as reflected in the Company’s consolidated balance sheet, (iv) the dollar amount of the maximum Indebtedness and the current outstanding Indebtedness supported by the Lien on such Servicing Contracts and Hedge Servicing Instruments and the maturity date of such Indebtedness, and (v) the value of such Servicing Contracts and Servicing Hedge Instruments reconciled to the consolidated balance sheet of the Company.

(2) Promptly, such additional financial and other information,

  including, without limitation, financial statements of the Company, the Parent, any Subsidiary or Affiliate of the Company or the Parent, as any Lender, through the Managing Administrative Agent, may from time to time reasonably request, including, without limitation, such information as is necessary for any Lender to participate out any of its interests in Loans and GNMA Pool Advance Loans hereunder or to enable another financial institution to become a signatory hereto.

(3) Promptly upon receipt thereof by the Company, the Parent or any

  of their respective Subsidiaries, copies of all audit reports prepared by or on behalf of FNMA, FHLMC and GNMA.

9(c).....Payment of Indebtedness. Itself, and shall cause each of its Subsidiaries -----------------------

to, pay, discharge or otherwise satisfy at or before maturity or before it becomes delinquent, defaulted or accelerated, as the case may be, all its Indebtedness, except: (1) Indebtedness (other than Indebtedness with respect to CPNs) being contested in good faith and for which provision is made to the satisfaction of the Majority Lenders for the payment thereof in the event the Parent or any of its Subsidiaries is found to be obligated to pay such Indebtedness and which Indebtedness is thereupon promptly paid by the Parent or such Subsidiary, and (2) additional Indebtedness of the Parent and it Subsidiaries (other than Indebtedness with respect to CPNs) in the aggregate not to exceed $100,000.00.

9(d).....Maintenance of Existence and Properties. Itself, and shall cause each of ---------------------------------------

its Subsidiaries to, maintain all rights, privileges, licenses, approvals, franchises, properties and assets necessary in the normal conduct of its business, and comply with all Contractual Obligations and Requirements of Law. The Company, Countrywide Home Loans Servicing, LP, a Texas limited partnership, and each other Subsidiary of the Company which originates and/or services Mortgage Loans for or on behalf of FNMA, FHLMC and/or GNMA or originates and/or services Mortgage-Backed Securities issued or guaranteed by FNMA, FHLMC and/or GNMA, will at all times be a FNMA, FHLMC and GNMA-approved Seller/Servicer. The Company will at all times be a wholly-owned Subsidiary of the Parent. Each Subsidiary Guarantor will at all times be a wholly-owned Subsidiary of the Company.

9(e).....Inspection of Property; Books and Records; Discussions. Itself, and shall ------------------------------------------------------

cause each of its Subsidiaries to, keep proper books of record and account in which full, true and correct entries in conformity with GAAP and all Requirements of Law shall be made of all dealings and transactions in relation to its business and activities, and permit representatives of each Lender (at no cost or expense to the Company or any of its Subsidiaries unless there shall have occurred and be continuing an Event of Default) to visit and inspect those properties of the Company and its Subsidiaries and examine and make abstracts from those books and records of the Company and its Subsidiaries as are reasonably necessary to enable such Lender to conduct appropriate credit due diligence in connection with customary credit approval practices for credit facilities of this type, at any reasonable time and as often as may reasonably be desired by any of the Lenders, and to discuss the business, operations, properties and financial and other condition of the Company and any of its Subsidiaries with officers and employees of such parties, and with their independent certified public accountants.

9(f).....Notices. Promptly give written notice to the Managing Administrative ------- Agent (who shall promptly notify each of the Lenders thereof) of: (1) The occurrence of any Potential Default or Event of Default; (2) Any litigation or proceeding affecting the Company or any of its Subsidiaries involving amounts in excess of $100,000,000.00 in the aggregate; (3) Receipt by the Company or the Parent of notice from any rating agency concerning a potential change in any credit rating previously accorded the Company or the Parent by such rating agency; (4) The formation or acquisition of any Subsidiary Guarantor or if any Subsidiary existing on the Effective Date which is not a Subsidiary Guarantor on the Effective Date but subsequently becomes a Subsidiary Guarantor; (5) Any changes in the officer of the Company or the Parent holding

  the title of President or any material change in the duties of the Persons holding such title from the duties of such Persons at the Effective Date; and

(6) A material adverse change in the business, operations, property or financial or other condition of the Parent, the Company or any of their Subsidiaries. 9(g).....Expenses. Pay all reasonable out-of-pocket expenses (including fees and --------

disbursements of counsel) of the Managing Administrative Agent, the Administrative Agents and the Co-Arrangers incident to the preparation, negotiation, administration and amendment of the Credit Documents and, following the occurrence of an Event of Default, of the Managing Administrative Agent, the Administrative Agents and each of the Lenders incident to the protection of the rights of the Lenders, the Managing Administrative Agent, and the Administrative Agents under the Credit Documents, and incident to the enforcement of payment of the Obligations, whether by judicial proceedings or otherwise, including, without limitation, in connection with bankruptcy, insolvency, liquidation, reorganization, moratorium or other similar proceedings involving the Parent, the Company, or any Subsidiary Guarantor or a “workout” of the Obligations. The obligations of the Company under this Paragraph 9(g) shall be effective and enforceable whether or not any Loan is advanced by any Lender hereunder and shall survive payment of all other Obligations.

9(h).....Credit Documents. Itself, and shall cause each of the Parent and the ---------------- Subsidiary Guarantors to, comply with and observe all terms and conditions applicable to such Person under the Credit Documents to which it is party. 9(i).....Insurance. Itself, and shall cause each of its Subsidiaries to, obtain ---------

and maintain insurance with responsible companies in such amounts and against such risks as are usually carried by corporations engaged in similar businesses similarly situated, including, without limitation, errors and omissions coverage and fidelity coverage in form and substance acceptable under FNMA or FHLMC guidelines, and furnish the Lenders on request full information as to all such insurance.

9(j).....Hedging Program. Itself, and shall cause each Subsidiary Guarantor to, --------------- maintain at all times a Hedging Program consistent with the Hedging Program for such Person in effect at and as of the Effective Date. 9(k).....Compliance with Laws. Itself, and shall cause each of its Subsidiaries --------------------

to, comply, in all material respects with all Requirements of Law and Contractual Obligations, including, without limitation, all requirements of ERISA, the failure to comply with which could have a material adverse effect on the business, operations, assets or financial or other condition of the Company, any Subsidiary Guarantor or the Company and its Subsidiaries taken as a whole.

9(l).....Taxes. Itself, and shall cause each of its Subsidiaries to, file or -----

caused to be filed all tax returns that are required to be filed and pay all taxes (other than incidental local business and other municipal taxes which are not material to the operation of the Company and its Subsidiaries) shown to be due and payable on said returns or on any assessments made against them or any of their property other than taxes which are being contested in good faith by appropriate proceedings and as to which the Company or the applicable Subsidiary has established adequate reserves in conformity with GAAP.

9(m).....Indemnification. Indemnify, defend and hold harmless each Agent, the ---------------

Co-Arrangers and the Lenders (collectively, the “Indemnified Persons”) from and against any and all claims, obligations, penalties, actions, suits, judgments, costs, disbursements, losses, liabilities and/or damages (including, without limitation, reasonable attorneys’ fees) of any kind (“Claims”) whatsoever which may at any time be imposed on, assessed against or incurred by such Indemnified Person in any way (1) relating to or arising out of the Credit Documents or any documents contemplated by or referred to therein or the transactions contemplated thereby or any action taken or omitted to be taken by such Indemnified Person in connection with the foregoing; provided, the Company shall not be liable for any portion of any such Claims arising out of or resulting from the gross negligence or willful misconduct of such Indemnified Person, or (2) resulting from any action taken or omitted to be taken by such Indemnified Person in accordance with written instructions given as provided in the Credit Documents, or (3) relating to any one or more of the matters covered by Paragraph 12(c) below. The indemnification obligations of the Company under this Paragraph 9(m) shall survive the termination of this Agreement and the payment in full of the Obligations.

10. Negative Covenants. The Company hereby agrees that, as long as any Obligations ------------------ remain unpaid or any Lender has any obligation to make or purchase all or any portion of any Loans or to make GNMA Pool Advance Loans hereunder, the Company shall not, directly or indirectly: 10(a)....Liens. Itself, or allow any of its Subsidiaries to, create, incur, assume ----- or suffer to exist any Lien upon any property and assets (including servicing rights) of the Company or any of its Subsidiaries other than: (1) Liens or charges for current taxes, assessments or other

  governmental charges which are not delinquent or which remain payable without penalty, or the validity of which are contested in good faith by appropriate proceedings upon stay of execution of the enforcement thereof, provided the Company or such Subsidiary shall have set aside on its books and shall maintain adequate reserves for the payment of same in conformity with GAAP;

(2) Liens, deposits or pledges made to secure statutory obligations,

  surety or appeal bonds, or bonds for the release of attachments or for stay of execution, or to secure the performance of bids, tenders, contracts (other than for the payment of borrowed money), leases or margin call requirements or for purposes of like general nature in the ordinary course of the Company’s or such Subsidiary’s business;

(3) Liens on Mortgage Loans and Mortgage-Backed Securities which are the subject of repurchase agreements; (4) Liens on real property (including fixtures and improvements thereon) securing Indebtedness in an amount not to exceed $50,000,000.00 in the aggregate at any time outstanding; (5) Liens on property and assets of the Company consisting of

  Mortgage Loans and MBS Held for Sale securing short term Indebtedness of the Company (Indebtedness with a maturity of one year or less and not automatically renewable by the Company or any of its Subsidiaries at such Person’s sole option) in an aggregate amount not to exceed at any date twenty five percent (25%) of the book value of such Mortgage Loans and MBS Held for Sale as reported on the balance sheet of the Company in accordance with GAAP;

(6) Liens on specified Servicing Contracts (as identified in the most

  recent report delivered to the Managing Administrative Agent and the Lenders pursuant to Paragraph 9(b)(1) above) of the Company or any Subsidiary Guarantor securing non-recourse Indebtedness of the Company or such Subsidiary Guarantor (Indebtedness as to which the holder has no recourse to assets of the Company, the Parent or any of their respective Subsidiaries for the payment thereof other than the specified Servicing Contracts which are the subject of such Liens), which specified Servicing Contracts have a value not to exceed at any date fifty percent (50%) of the book value of Mortgage Servicing Rights as reported on the consolidated balance sheet of the Company and its Subsidiaries in accordance with GAAP and which specified Servicing Contracts do not in any event include more than fifty percent (50%) in book value of Mortgage Servicing Rights included in the Eligible Servicing Portfolio;

(7) Liens on specified Servicing Hedge Instruments (as identified in

  the most recent report delivered to the Managing Administrative Agent and the Lenders pursuant to Paragraph 9(b)(1) above) of the Company or any Subsidiary Guarantor securing non-recourse Indebtedness of the Company or such Subsidiary Guarantor (Indebtedness as to which the holder has no recourse to assets of the Company, the Parent or any of their respective Subsidiaries for the payment thereof other than the Servicing Hedge Instruments which are the subject of such Liens) in an aggregate amount not to exceed at any date fifty percent (50%) of the book value of said Servicing Hedge Instruments as reported on the consolidated balance sheet of the Company and its Subsidiaries in accordance with GAAP; and

(8) Liens on cash, cash equivalents and marketable securities securing obligations under rate management agreements entered into by the Company and its Subsidiaries with any of the Lenders. 10(b)....Indebtedness. Itself, or allow any of its Subsidiaries to, create, incur, ------------

assume or suffer to exist, or otherwise become or be liable in respect of any Indebtedness, including secured Indebtedness otherwise permitted pursuant to Paragraph 10(a) above, if immediately upon giving effect to such creation, incurrence, assumption or sufferance to exist of such Indebtedness: (1) there would exist an Event of Default, or (2) the Company would not be in compliance with the financial covenants set forth in Paragraphs 10(i) or 10(j) below (assuming the “Applicable Test Date” therefor was immediately following such action).

10(c)....Consolidation and Merger. Itself, or allow any of its Subsidiaries to, ------------------------

liquidate or dissolve or enter into any consolidation, merger, partnership, joint venture, syndicate or other combination, except that any Subsidiary Guarantor may be merged into the Company, any other Subsidiary may be merged into the Company or any other Subsidiary and the Company may be merged into or consolidated with any corporation provided that (1) in any such merger or consolidation the Company shall be the surviving or resulting corporation and (2) at the time of and immediately after the effectiveness of such merger or consolidation there shall not have occurred and be continuing an Event of Default or Potential Default.

10(d)....Acquisitions. Itself, or allow any of its Subsidiaries to, purchase or ------------

acquire or incur liability for the purchase or acquisition of any or all of the assets or business of any Person other than in the normal course of a mortgage banking-related business (it being expressly agreed and understood that the acquisition of servicing is a normal course of business activity); provided, however, that the Company may acquire all or a portion of the stock or assets of another mortgage company or companies so long as no Event of Default or Potential Default shall exist immediately following the consummation of such acquisition, and, provided, further, that the Company shall be in compliance with the financial covenants set forth in Paragraphs 10(i) and 10(j) below (assuming for purposes of this Paragraph 10(d) that the “Applicable Financial Test Date” referenced in such covenants is the day of the consummation of such acquisition after giving effect thereto).

10(e)....Payment of Dividends. Itself, or allow any of its Subsidiaries to, --------------------

declare or pay any dividends upon any shares of the Company’s stock now or hereafter outstanding or make any distribution of assets to its stockholders as such, whether in cash, property or securities (except dividends payable in the capital stock of the Company or such Subsidiary and dividends and distributions by a Subsidiary to the Company or another wholly-owned Subsidiary of the Company), if at the date of payment or distribution (either before or after giving effect thereto) there should exist an Event of Default or Potential Default.

10(f)....Purchase or Retirement of Stock. Itself, or allow any of its Subsidiaries ------------------------------- to, acquire, purchase, redeem or retire any shares of its capital stock now or hereafter outstanding for value. 10(g)....Investments; Advances; Receivables. Itself, or allow any of its ----------------------------------

Subsidiaries to, make or commit to make any advance, loan or extension of credit (“Advances”) to, or hold any receivable (“Receivable”) of, or make or commit to make any capital contribution to, or purchase any stock, bonds, notes, debentures or other securities (“Investments”) of, or make any other investment in, any Person, except:

(1) Advances constituting Mortgage Loans made in the ordinary course of business of the Company; (2) Advances to and Receivables of any Person which are fully secured on a first priority perfected basis by Mortgage Loans; (3) Investments in, Advances to and Receivables of any Affiliate which are fully secured on a first priority perfected basis by Mortgage Loans or Mortgage-Backed Securities; (4) Advances to any wholly-owned Subsidiary of the Parent which are used solely to purchase Residuals, which Advances are secured by a first priority perfected Lien on such Residuals; (5) Advances to and Receivables of any Affiliate (in addition to

  Investments, Advances and Receivables permitted pursuant to subparagraphs (1) through (4) of this Paragraph 10(g)) or any Servicing Pass-Through Venture which is not otherwise an Affiliate, which are unsecured or which are secured on a first priority perfected basis by collateral other than Mortgage Loans or Mortgage-Backed Securities, in an aggregate amount not to exceed fifty percent (50%) of the consolidated net worth of the Company, determined in accordance with GAAP;

(6) Investments in, Advances to and Receivables of Countrywide

  Capital Markets, Inc. or any of its Subsidiaries, which are fully secured on a first priority perfected basis by: (i) debt instruments issued by FNMA or FHLMC or (ii) time deposit accounts issued by a financial institution the deposits of which are insured by the Bank Insurance Fund and which financial institution has a deposit rating issued by a recognized rating agency not less than the rating assigned to the Company’s long term indebtedness; and

(7) Investments in connection with Acquisitions by the Company permitted pursuant to Paragraph 10(d) above. 10(h)....Sale of Assets. Itself, or allow any of its Subsidiaries to sell, lease, --------------

assign, transfer or otherwise dispose of any assets of the Company and its Subsidiaries (other than obsolete or worn out property), whether now owned or hereafter acquired, other than in the ordinary course of business as presently conducted and at fair market value (it being expressly agreed and understood that the sale or other disposition of Mortgage Loans with or without servicing released and the sale or other disposition of servicing rights are in the ordinary course of business); provided, however, that in no event shall the Company or any of its Subsidiaries enter into any sale and leaseback transaction involving any of its assets without the prior written consent of the Majority Lenders; and, provided further, that the Company may sell, lease, assign, transfer or otherwise dispose of any of its assets to a Subsidiary of the Company (which, for the purpose of this proviso shall include any limited partnership the general and limited partners of which are Subsidiaries of the Company) so long as: (1) all classes of stock of, or partnership interests in, such Subsidiary are owned, directly or indirectly, by the Company, and such Subsidiary incurs no obligations for third party indebtedness (other than Indebtedness secured by Liens permitted by Paragraphs 10(a)(6) and 10(a)(7) above and obligations to employees and vendors as are necessary or desirable in the normal conduct of the business of servicing 1-4 unit single family mortgage loans and in managing an office building owned by such Subsidiary), (2) any such unpaid obligations as are described in subparagraph (1) above (excluding Indebtedness secured by Liens permitted by Paragraphs 10(a)(6) and 10(a)(7) above and payroll and benefits obligations to employees) shall not exceed at any time $50,000,000.00 in the aggregate, and (3) if as a result of such transfer of assets such Subsidiary becomes a Subsidiary Guarantor, such Subsidiary executes the documents, instruments and agreements required pursuant to Paragraph 6(a)(2) above.

10(i)....Minimum Net Worth. Permit its consolidated net worth determined in -----------------

accordance with GAAP on and as of each Applicable Financial Test Date to be less than $1,500,000,000.00.

10(j)....Maximum Total Debt. Permit Total Debt (excluding outstanding Indebtedness ------------------ secured by Liens permitted pursuant to Paragraphs 10(a)(6) and 10(a)(7) above) on and as of each Applicable Financial Test Date to exceed the sum of: (1) One hundred percent (100%) of Cash, plus (2) Ninety percent (90%) of Margins, plus (3) Ninety-seven percent (97%) of the amount of Mortgage Loans and

  MBS Held for Sale (including Mortgage Loans and Mortgage-Backed Securities subject to a Lien under a repurchase agreement but excluding all other Mortgage Loans and Mortgage-Backed Securities which are excluded from “Eligible Mortgage Assets” pursuant to subparagraphs (a), (b) and (c) of the definition of such term), plus

(4) Ninety percent (90%) of Pool Loan Purchases and Mortgage Claims

  Receivable to the extent such assets represent VA and FHA Mortgage Loans repurchased by the Company from pools supporting GNMA Mortgage-Backed Securities, plus

(5) Fifty percent (50%) of Deferred Commitment Fees, plus (6) Fifty percent (50%) of Property and Equipment, plus (7) Eighty percent (80%) of Mortgage Servicing Rights (excluding all

  Mortgage Servicing Rights consisting of Servicing Contracts subject to Liens permitted to Paragraph 10(a)(6) above as disclosed to the Managing Administrative Agent and the Lenders in the most recent report delivered pursuant to Paragraph 9(b)(1) above), plus

(8) Eighty percent (80%) of Servicing Hedge Instruments (excluding

  all Servicing Hedge Instruments secured by Liens permitted pursuant to Paragraph 10(a)(7) above as disclosed to the Managing Administrative Agent and the Lenders in the most recent report delivered pursuant to Paragraph 9(b)(1) above), plus

(9) Fifty percent (50%) of Other Assets (excluding any unsecured

  Advances to or Receivables of Affiliates and Servicing Pass-Through Ventures permitted under Paragraph 10(g)(5) above, but including secured Advances made to Subsidiaries and other Affiliates permitted under Paragraph 10(g) above).

11. Events of Default. Upon the occurrence of any of the following events (an "Event ----------------- of Default"): 11(a)....The Company shall fail to make any payment on account of that portion of the Obligations consisting of principal or interest on Loans or GNMA Pool Advance Loans on the date when due; or 11(b)....Any representation or warranty made or deemed made by the Company, any

Guarantor Subsidiary or the Parent in any Credit Document or in connection with any Credit Document shall be materially inaccurate or incomplete in any respect on or as of the date made or deemed made; or

11(c)....The Company shall default in the observance or performance of any covenant or agreement contained in Paragraph 10 above; or 11(d)....The Parent shall fail to observe or comply with any term or provision contained in the Parent Guaranty (other than those contained in Paragraph 11(a) thereof); or 11(e)....Any Subsidiary Guarantor shall fail to observe or comply with any term or provision contained in its Subsidiary Guaranty; or 11(f)....The Company, any Subsidiary Guaranty, or the Parent shall fail to observe or perform any other term or provision contained in the Credit Documents and such failure shall continue for thirty (30) days; or 11(g)....The Company, any of its Subsidiaries or the Parent shall default in any

payment of any Indebtedness (other than the Obligations or as permitted under Paragraph 9(c) above) in an aggregate amount of more than $100,000,000.00 or any other event shall occur and, as a result, the holder or holders thereof, or any trustee or agent for such holders, either: (1) cause such Indebtedness to become due and payable prior to its stated maturity, or (2) fail to cause such Indebtedness to become so due and payable, but such event continues for a period of thirty (30) days and is not cured or waived; or

11(h)....(1) The Parent, the Company or any of its Subsidiaries shall commence any

case, proceeding or other action (i) under any existing or future law of any jurisdiction, domestic or foreign, relating to bankruptcy, insolvency, reorganization or relief of debtors, seeking to have an order for relief entered with respect to it, or seeking to adjudicate it a bankrupt or insolvent, or seeking reorganization, arrangement, adjustment, winding-up, liquidation, dissolution, composition or other relief with respect to it or its debts, or (ii) seeking appointment of a receiver, trustee, custodian or other similar official for it or for all or any substantial part of its assets, or the Parent, the Company or any of its Subsidiaries shall make a general assignment for the benefit of its creditors; or (2) there shall be commenced against the Parent, the Company or any of its Subsidiaries any case, proceeding or other action of a nature referred to in clause (1) above which (i) results in the entry of an order for relief or any such adjudication or appointment, or (ii) remains undismissed, undischarged or unbonded for a period of sixty (60) days; or (3) there shall be commenced against the Parent, the Company or any of its Subsidiaries any case, proceeding or other action seeking issuance of a warrant of attachment, execution, distraint or similar process against all or any substantial part of its assets which results in the entry of an order for any such relief which shall not have been vacated, discharged, or stayed or bonded pending appeal within sixty (60) days from the entry thereof; or (4) the Parent, the Company or any of its Subsidiaries shall take any action in furtherance of, or indicating its consent to, approval of, or acquiescence in, any of the acts set forth in clause (1), (2) or (3) above; or (5) the Parent, the Company or any of its Subsidiaries shall generally not, or shall be unable to, or shall admit in writing its inability to, pay its debts as they become due; or

11(i)....(1) Any Person shall engage in any "prohibited transaction" (as defined in

Section 406 of ERISA or Section 4975 of the Code) involving any Plan, (2) any “accumulated funding deficiency” (as defined in Section 302 of ERISA), whether or nor waived, shall exist with respect to any Plan, (3) a Reportable Event shall occur with respect to, or proceedings shall commence to have a trustee appointed, or a trustee shall be appointed, to administer or to terminate, any Single Employer Plan, which Reportable Event or institution of proceedings is, in the reasonable opinion of the Managing Administrative Agent, likely to result in the termination of such Plan for purposes of Title IV of ERISA, and, in the case of a Reportable Event, the continuance of such Reportable Event unremedied for ten days after notice of such Reportable Event pursuant to Section 4043(a), (c) or (d) of ERISA is given or the continuance of such proceedings for ten days after commencement thereof, as the case may be, (4) any Single Employer Plan shall terminate for purposes of Title IV of ERISA, (5) any withdrawal liability to a Multiemployer Plan shall be incurred by the Company or the Parent or any Commonly Controlled Entity, or (6) any other event or condition shall occur or exist; and in each case in clauses (1) through (6) above, such event or condition, together with all other such events or conditions, if any, could subject the Parent, the Company or any of its Subsidiaries to any tax, penalty or other liabilities in the aggregate material in relation to the business, operations, property or financial or other condition of the Parent, the Company or any of its Subsidiaries; or

11(j)....One or more judgments or decrees in amounts aggregating $25,000,000.00 or

more not fully covered by insurance (exclusive of self-insurance (not to exceed $5,000,000.00) and deductibles) during any consecutive twelve (12) month period shall be entered against the Company or any of its Subsidiaries and all such judgments or decrees shall not have been vacated, discharged or satisfied, or stayed or bonded pending appeal, within sixty (60) days from the entry thereof unless counsel to the Company reasonably acceptable to the Majority Lenders has delivered to the Lenders within such sixty (60) day period an opinion that the Company and/or such Subsidiary(ies) has/have the legal right to have such judgment or decree vacated without the expenditure of funds (other than for costs of proceedings) and the Company and/or such Subsidiary(ies) is/are diligently proceeding to accomplish such vacation; or

11(k)....The Parent shall notify the Managing Administrative Agent or any Lender of

its intention to rescind or revoke the Parent Guaranty or the Parent Subordination Agreement, in whole or in part, with respect to future transactions or otherwise; or

11(l)....Any Subsidiary Guarantor shall notify the Managing Administrative Agent or

any Lender of its intention to rescind or revoke its Subsidiary Guaranty or its Subsidiary Guarantor Subordination Agreement, in whole or in part, with respect to future transactions or otherwise; or

11(m)....The Parent shall cease to own one hundred percent (100%) of the outstanding capital stock of the Company; or 11(n)....The Company, the Parent, or any Subsidiary Guarantor shall fail to maintain its corporate existence; 11(o)....Any Subsidiary Guarantor shall default in the payment of any secured Indebtedness permitted pursuant to Paragraphs 10(a) above; THEN: (1) Automatically upon the occurrence of an Event of Default under Paragraph 11(h) above, (2) At the option of any Lender upon the occurrence of an

  Event of Default under Paragraph 11(a) above unless such Event of Default is expressly waived in writing by one hundred percent (100%) of the Lenders, and

(3) In all other cases, at the option of the Majority Lenders,

each Lender’s obligation to make or purchase Loans and the obligation of the GNMA Pool Advance Lender to make GNMA Pool Advance Loans shall terminate, the principal balance of outstanding Loans and GNMA Pool Advance Loans and interest accrued but unpaid thereon and all other Obligations shall become immediately due and payable, without demand upon or notice or presentment to the Company, all of which are hereby waived.

12. Agency Provisions. ----------------- 12(a)....Appointment. Each Lender hereby irrevocably designates and appoints each -----------

Agent as the agent of such Lender under the Credit Documents and each Lender hereby irrevocably authorizes each Agent, as the agent for such Lender, to take such action on its behalf under the provisions of the Credit Documents and to exercise such powers and perform such duties as are expressly delegated to such Agent by the terms of the Credit Documents, together with such other powers as are reasonably incidental thereto. Notwithstanding any provision to the contrary elsewhere in the Credit Documents, no Agent shall have any duties or responsibilities, except those expressly set forth herein or therein, or any fiduciary relationship with any Lender, and no implied covenants, functions, responsibilities, duties, obligations or liabilities shall be read into the Credit Documents or otherwise exist against any Agent.

12(b)....Delegation of Duties. The Managing Administrative Agent may execute any --------------------

of its duties under the Credit Documents by or through agents or attorneys-in-fact and shall be entitled to advice of counsel concerning all matters pertaining to such duties. The Managing Administrative Agent shall not be responsible for the negligence or misconduct of any agents or attorneys-in-fact selected by it with reasonable care.

12(c)....Exculpatory Provisions. No Agent nor any of its respective officers, ----------------------

directors, employees, agents, counsel, attorneys-in-fact or Affiliates shall be (1) liable to any Lender, any other Agent, the holder of any CPN, the Parent, the Company or any of their Subsidiaries for any action taken or omitted to be taken by it or such Person under or in connection with the Credit Documents (except for its or such Person’s own gross negligence or willful misconduct), or (2) responsible in any manner to any of the Lenders, any other Agent, the holder of any CPN, the Company, the Parent or any of their Subsidiaries for: (i) any recitals, statements, representations or warranties made by the Parent, the Company, any of their Subsidiaries, or any officer thereof contained in the Credit Documents or in any certificate, report, statement or other document referred to or provided for in, or received by such Agent under or in connection with, the Credit Documents (except such as are prepared by such Agent and, then, only to the extent such Agent is responsible for verification of the accuracy and completeness of the information contained therein or the facts upon which such information is based as expressly provided herein) or for the value, validity, effectiveness, genuineness, enforceability, collectability or sufficiency of the Credit Documents or for any failure of the Parent, the Company, or any Subsidiary Guarantor to perform its obligations thereunder or (ii) assuring compliance of the Credit Documents and/or the transactions contemplated by the Credit Documents with any law or regulation binding upon such Person, it being expressly acknowledged, agreed and understood that each such Person has obtained independent advice satisfactory to it in all such regards. No Agent shall be under any obligation to any Lender to ascertain or to inquire as to the observance or performance of any of the agreements contained in, or conditions of, the Credit Documents (other than agreements required to be complied with by such Agent thereunder and subject to the standards of care set forth herein with respect thereto) or to inspect the properties, books or records of the Parent, the Company, or any Subsidiary Guarantor. Each Agent shall be entitled to refrain from exercising any discretionary powers or actions under this Agreement or any other Credit Document until it shall have received the prior written consent of one hundred percent (100%) of the Lenders to such action.

12(d)....Reliance by Agent. Each Agent shall be entitled to rely, and shall be -----------------

fully protected in relying, upon any note, writing, resolution, notice, consent, certification, affidavit, letter, cablegram, telegram, telecopy, telex or teletype message, statement, order or other document or conversation reasonably believed by it to be genuine and correct and to have been signed, sent or made by the proper Person or Persons and upon advice and statements of legal counsel (including, without limitation, counsel to the Parent, the Company, or any Subsidiary Guarantor), independent accountants and other experts selected by such Agent. The Managing Administrative Agent may deem and treat each Lender designated on the current Commitment Schedule as a Lender hereunder for all purposes of the Credit Documents unless a written notice of assignment, negotiation or transfer of such Lender’s interests hereunder and thereunder as permitted pursuant to Paragraph 14 below shall have been filed with the Managing Administrative Agent. Each Agent shall be fully justified in failing or refusing to take any action under the Credit Documents unless it shall first receive such advice or concurrence of the Majority Lenders (or all Lenders, as required under the Credit Documents) or it shall first be indemnified to its satisfaction by the Lenders against any and all liability and expense which may be incurred by it by reason of taking or continuing to take any action (other than liability and/or expense arising out of such Agent’s gross negligence or willful misconduct). Each Agent shall in all cases be fully protected in acting, or in refraining from acting, under the Credit Documents in accordance with a request of the Majority Lenders (or all Lenders, if applicable) absent gross negligence and willful misconduct on the part of such Agent in the method in which it acts or refrains from acting in accordance therewith, and such request and any action taken or failure to act pursuant thereto shall be binding upon all the Lenders.

12(e)....Notice of Default; Agreement to Advance. No Agent shall be deemed to have ---------------------------------------

knowledge or notice of the occurrence of any Event of Default or Potential Default unless such Agent has received notice from a Lender or the Company referring to the Credit Documents, describing such Event of Default or Potential Default and stating that such notice is a “notice of default”. In the event that any Agent receives such a notice, such Agent shall give notice thereof to the Lenders and the other Agents.

12(f)....Non-Reliance on Agent and Other Lenders. Each Lender expressly ---------------------------------------

acknowledges that no Agent nor any of its respective officers, directors, employees, agents, attorneys-in-fact or Affiliates has made any representations or warranties to it and that no act by such Agent hereafter taken, including any review of the affairs of the Parent, the Company, or any Subsidiary Guarantor, shall be deemed to constitute any representation or warranty by such Agent to any Lender. Each Lender represents to each Agent that it has, independently and without reliance upon such Agent or any other Lender or their respective counsel, and based on such documents and information as it has deemed appropriate, made its own appraisal of and investigation into the business, operations, property, financial and other condition and creditworthiness of the Parent, the Company, or any Subsidiary Guarantor and made its own decision to extend credit hereunder and enter into this Agreement. Each Lender also represents that it will, independently and without reliance upon any Agent or any other Lender or their respective counsel, and based on such documents, information and legal advice (including, without limitation, advice of regulatory counsel to it) as it shall deem appropriate at the time, continue to make its own credit analysis, appraisals and decisions in entering into the Credit Documents and taking or not taking action thereunder, and to make such investigation as it deems necessary to inform itself as to the business, operations, property, financial and other condition and creditworthiness of the Parent, the Company, or any Subsidiary Guarantor. Except for notices, reports and other documents expressly required to be furnished to the Lenders by an Agent hereunder, such Agent shall not have any duty or responsibility to provide any Lender with any legal advice or credit or other information concerning the business, operations, property, financial and other condition or creditworthiness of the Parent, the Company, or any Subsidiary Guarantor which may come into the possession of such Agent or any of its officers, directors, employees, agents, attorneys-in-fact or Affiliates.

12(g)....Indemnification by Lenders. The Lenders agree to indemnify and hold --------------------------

harmless each Agent in its capacity as such ratably in accordance with their Aggregate Percentage Shares to the extent required by the Company pursuant to Paragraph 9(m) above if any Agent is not reimbursed by the Company and without limiting the obligation of the Company to do so. To the extent indemnification payments made by the Lenders pursuant to this Paragraph 12(g) are subsequently recovered by any Agent from, or for the account of, the Company, such Agent will promptly refund such previously paid indemnity payments to the Lenders. The indemnification obligations of the Lenders under this Paragraph 12(g) shall survive termination of this Agreement and payment in full of the Obligations.

12(h)....Agent in Its Individual Capacity. Any Agent and its Affiliates may make --------------------------------

loans to, accept deposits from and generally engage in any kind of business with the Parent, the Company, or any Subsidiary Guarantor as though such Agent were not an Agent hereunder. With respect to such loans made or renewed by them and any note issued to them hereunder, each Agent shall have the same rights and powers under the Credit Documents as any Lender thereunder and may exercise the same as though it were not an Agent, and the terms “Lender” and “Lenders” shall include Agents in their individual capacities.

12(i)....Successor Agents. Any Agent may resign as such under the Credit Documents ----------------

upon ninety (90) days’ prior written notice to the Lenders and the Company and the Managing Administrative Agent shall resign in the event its Aggregate Maximum Commitment shall be less than $25,000,000.00. In addition, in the event any Agent fails to perform its obligations under the Credit Documents in any material manner and fails to correct its performance within thirty (30) days of written notice of such failure of performance given by not less than the Majority Lenders, then such Agent may be removed upon thirty (30) days notice given by not less than the Majority Lenders. If an Agent shall resign or be so removed, then, on or before the effective date of such resignation or removal, the Majority Lenders shall appoint a successor agent reasonably acceptable to the Company or, if the Majority Lenders are unable to agree on the appointment of a successor agent, such Agent shall appoint a successor agent for the Lenders, which successor agent shall be reasonably acceptable to the Company, whereupon such successor agent shall succeed to the rights, powers and duties of such Agent, and the term “Documentation Agent,” “Co-Syndication Agent,” “Managing Administrative Agent,” “Administrative Agent,” or “Other Facility Agent”), as applicable, shall mean such successor agent effective upon its appointment, and the former Agent’s rights, powers and duties shall be terminated without any other or further act or deed on the part of such former Agent or any of the parties to this Agreement or any of the other Credit Documents or successors thereto. After any Agent’s resignation or removal hereunder, the provisions of this Paragraph 12 shall inure to its benefit as to any actions taken or omitted to be taken by it while it was Agent under the Credit Documents.

12(j)....Sharing of Set-Offs. If following the occurrence and during the -------------------

continuance of an Event of Default any Lender (a “benefited Lender”) shall at any time receive any payment of all or part of the Obligations held by it or receive any collateral in respect thereof (whether voluntarily or involuntarily, by set-off or otherwise) in a greater proportion than any such payment to and collateral received by any other Lender, if any, in respect of such other Lender’s portion of the Obligations, or interest thereon, such benefited Lender shall purchase for cash from the other Lenders such portion of each such other Lender’s Obligations, or shall provide such other Lenders with the benefits of such collateral, or the proceeds thereof, as shall be necessary to cause such benefited Lender to share the excess payment or benefits of such collateral or proceeds ratably with each of the Lenders in accordance with their respective Aggregate Percentage Shares; provided, however, that if all or any portion of such excess payment or benefits is thereafter recovered from such benefited Lender, such purchase shall be rescinded, and the purchase price and benefits returned, to the extent of such recovery but without interest. The Company agrees that each Lender so purchasing a portion of another Lender’s Obligations may exercise all rights of payment (including, without limitation, rights of set-off) with respect to such portion as fully as if such Lender were the direct holder of such portion.

13. Miscellaneous Provisions. ------------------------ 13(a)....No Assignment. The Company may not assign its rights or obligations under -------------

the Credit Documents without the prior written consent of one hundred percent (100%) of the Lenders. Subject to the foregoing, all provisions contained in this Agreement or any document or agreement referred to herein or relating hereto shall inure to the benefit of each Lender, its successors and assigns, and shall be binding upon the Company, its successors and assigns.

13(b)....Amendment. The Credit Documents may not be amended or terms or provisions ---------

hereof waived unless such amendment or waiver is in writing and signed by the Majority Lenders and the Company; provided, however, that without the prior written consent of one hundred percent (100%) of the Lenders, no amendment or waiver shall:

(1) Waive or amend any term or provision of Paragraphs 4(h), 4(i), 4(j), or 5(d) above, or this Paragraph 13(b); (2) Reduce the principal of, or interest on, the Obligations or any

  amount of fees payable under this Agreement (other than fees payable pursuant to the Multi-Year Facility Fee Letter or the Short Term Facility Fee Letter which reduction shall require only the consent of one hundred percent (100%) of the Multi-Year Lenders or one hundred percent (100%) of the Short Term Lenders, as applicable), or extend the required payment date of principal or interest on the Obligations or any fees except as a result of the extension of the Short Term Facility Maturity Date (which reduction shall require only the consent of one hundred percent (100%) of those of the Short Term Lenders electing to so extend );

(3) Increase the Aggregate Credit Limit above the Aggregate Maximum Credit Limit; (4) Modify any Lender's Multi-Year Facility Percentage Share,

  Multi-Year Swing Line Percentage Share, Short Term Facility Percentage Share or Short Term Swing Line Percentage Share except modifications resulting from an increase, permanent or temporary, in a Lender’s Maximum Multi-Year Facility Commitment, Multi-Year Swing Line Commitment, Maximum Short Term Facility Commitment and/or Short Term Swing Line Commitment made as permitted under this Agreement;

(5) Modify the definition of "Majority Lenders"; (6) Waive or amend any term or provision of any of the Credit Documents concerning indemnification or any right of set-off; (7) Include any Person other than the Lenders signatory hereto as a "Lender" hereunder except as expressly permitted pursuant to Paragraph 14(a) below; or (8) Cancel or terminate the Parent Guaranty or permit the revocation of the Parent Subordination Agreement; or (9) Cancel or terminate any Subsidiary Guaranty or permit the revocation of any Subsidiary Guarantor Subordination Agreement;

provided, however, that nothing contained herein shall in any manner or to any extent be deemed to supersede any provision of the Credit Documents which expressly designates which Lenders are empowered to modify such provision, including, without limitation, any provision of the Credit Documents which expressly requires the consent of one hundred percent (100%) of the Lenders to any modification thereof. Any amendment or waiver affecting to any material extent the rights of the following groups of Lenders shall require the prior written consent of one hundred percent (100%) of such group of Lenders, as appropriate: (i) the Multi-Year Balance Banks, (ii) the Short-Term Balance Banks, (iii) the Multi-Year Swing Line Lenders, and (iv) the Short-Term Swing Line Lenders. No amendment or waiver shall, unless agreed to in writing by the affected Agent, modify the rights or duties of such Agent. The Managing Administrative Agent shall provide notice and a copy of all amendments to the Credit Documents to all parties to the Credit Documents.

13(c)....Cumulative Rights; No Waiver. The rights, powers and remedies of the ----------------------------

Lenders hereunder are cumulative and in addition to all rights, powers and remedies provided under any and all agreements between the Company and the Lenders relating hereto, at law, in equity or otherwise. Any delay or failure by the Lenders to exercise any right, power or remedy shall not constitute a waiver thereof by the Lenders, and no single or partial exercise by the Lenders of any right, power or remedy shall preclude any other or further exercise thereof or any exercise of any other rights, powers or remedies.

13(d)....Entire Agreement; Severability. This Agreement and the documents and ------------------------------

agreements referred to herein embody the entire agreement and understanding between the parties hereto and supersede all prior agreements and understandings relating to the subject matter hereof and thereof. All waivers by the Company provided for in the Credit Documents have been specifically negotiated by the parties with full cognizance and understanding of their rights. If any of the provisions of the Credit Documents shall be held invalid or unenforceable, the Credit Documents shall be construed as if not containing such provisions, and the rights and obligations of the parties hereto shall be construed and enforced accordingly.

13(e)....Survival. All representations, warranties, covenants and agreements --------

herein contained on the part of the Company shall survive the termination of this Agreement and shall be effective until the Obligations are paid and performed in full or longer as expressly provided herein.

13(f)....Notices. All notices given by any party to any of the others shall be in -------

writing (which may be by facsimile transmission), delivered personally, by commercial courier service or by depositing the same in the United States mail, registered, with postage prepaid, addressed to such party at the address set forth on Annex II attached hereto. Any party may change the address to which notices are to be sent by notice of such change to the other party or parties given as provided herein.

13(g)....Governing Law. This Agreement shall be deemed to be a contract made under -------------

the laws of the State of California, and for all purposes shall be construed in accordance with the laws of said State, without regard to principles of conflicts of law.

13(h)....Counterparts. This Agreement may be executed in counterparts each of ------------ which when so executed shall be deemed to be an original and all of which when taken together shall constitute one and the same agreement. 13(i)....Waiver of Jury Trial. THE COMPANY, THE LENDERS AND THE AGENTS EACH WAIVE --------------------

THEIR RESPECTIVE RIGHTS TO A TRIAL BY JURY OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF OR RELATED TO THIS AGREEMENT, THE OTHER CREDIT DOCUMENTS, OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY, IN ANY ACTION, PROCEEDING OR OTHER LITIGATION OF ANY TYPE BROUGHT BY ANY OF THE PARTIES AGAINST ANY OTHER PARTY OR ANY PARTICIPANT OR ASSIGNEE, WHETHER WITH RESPECT TO CONTRACT CLAIMS, TORT CLAIMS, OR OTHERWISE. THE COMPANY, THE LENDERS AND THE AGENTS EACH AGREE THAT ANY SUCH CLAIM OR CAUSE OF ACTION SHALL BE TRIED BY A COURT TRIAL WITHOUT A JURY. WITHOUT LIMITING THE FOREGOING, THE PARTIES FURTHER AGREE THAT THEIR RESPECTIVE RIGHT TO A TRIAL BY JURY IS WAIVED BY OPERATION OF THIS SECTION AS TO ANY ACTION, COUNTERCLAIM OR OTHER PROCEEDING WHICH SEEKS, IN WHOLE OR IN PART, TO CHALLENGE THE VALIDITY OR ENFORCEABILITY OF THIS AGREEMENT OR THE OTHER CREDIT DOCUMENTS OR ANY PROVISION HEREOF OR THEREOF. THIS WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO THIS AGREEMENT AND THE OTHER CREDIT DOCUMENTS.

14. Additional Lenders; Assignments and Participations; Increases in Availability. ----------------------------------------------------------------------------- 14(a)....Addition of New Lender. ---------------------- (1) Subject to the limitation on the Aggregate Credit Limit set forth

  in the definition of such term, the Company or any Lender may at any time propose that one or more financial institutions (each, an “Applicant Financial Institution”) become an additional Lender hereunder; provided, however, that each Applicant Financial Institution shall be an Eligible Financial Institution. At such time, the Company or such Lender, as applicable, shall notify the other parties hereto, including the Managing Administrative Agent, of the identity of such Applicant Financial Institution and such Applicant Financial Institution’s proposed Aggregate Maximum Commitment (which in no event shall be less than $10,000,000.00) and, as applicable, Maximum Multi-Year Facility Commitment, Maximum Short Term Facility Commitment, Multi-Year Facility Percentage Share, Short Term Facility Percentage Share, Multi-Year Swing Line Commitment, Short Term Swing Line Commitment, Multi-Year Swing Line Percentage Share, Short Term Swing Line Percentage Share and/or GNMA Pool Advance Commitment. The addition of any Applicant Financial Institution shall be subject to:

(i) The prior written consent of the Managing Administrative

  Agent, in its sole and absolute discretion, and, if but only if there shall not have occurred and be continuing an Event of Default or Potential Default, the prior written consent of the Company, such consent not to be unreasonably withheld, and each of which consents shall be affirmatively given in writing to the other parties no later than the tenth day following receipt of request therefor (it being agreed and understood that if such written consent is not so provided, the consent shall automatically be deemed to have been withheld);

(ii) If such Applicant Financial Institution will become the

  GNMA Pool Advance Lender under this Agreement, such Applicant Financial Institution shall execute a replacement GNMA Pool Advance Agreement and cooperate with the current GNMA Pool Advance Lender to effect such intent;

(iii) Delivery of each of the items and the occurrence of each of the events described in subparagraph (2) below. (2) Assuming delivery of the consent of the Company and/or Managing

  Administrative Agent as required pursuant to subparagraph (1)(i) above, the Managing Administrative Agent, the Company and, if such Applicant Financial Institution will be acquiring a portion of an existing Lender’s Aggregate Maximum Commitment by way of assignment from such existing Lender, such existing Lender, shall mutually agree on the Adjustment Date on which such Applicant Financial Institution shall become a party hereto and a Lender hereunder. On such Adjustment Date:

(i) The Company shall deliver to the Managing Administrative

  Agent and each of the Lenders a Commitment Schedule to be effective as of such Adjustment Date, reflecting the inclusion of such Applicant Financial Institution as a party hereto and a Lender hereunder.

(ii) No later than 12:30 p.m. (Los Angeles time) on such

  Adjustment Date, such Applicant Financial Institution shall pay to the Managing Administrative Agent, as applicable, an amount equal to such Applicant Financial Institution’s Multi-Year Facility Percentage Share of Multi-Year Loans outstanding and/or Short Term Facility Percentage Share of Short Term Loans outstanding. If such Applicant Financial Institution is becoming a Lender hereunder as a result of an increase in the Aggregate Credit Limit, the Managing Administrative Agent shall thereupon remit to the Lenders, as applicable, their shares of such funds. If such Applicant Financial Institution is acquiring a portion of an existing Lender’s outstanding Loans, the Managing Administrative Agent shall thereupon remit such funds to the assigning Lender. Following such Adjustment Date, fees and interest accrued on the Obligations to but not including such Adjustment Date shall be payable to the Lenders in accordance with their respective Multi-Year Facility Percentage Shares and Short Term Facility Percentage Shares prior to such Adjustment Date before giving effect to the readjustment thereof pursuant to the Commitment Schedule provided by the Company on such Adjustment Date.

(iii) If such Applicant Financial Institution is acquiring a

  portion of an existing Lender’s Aggregate Maximum Commitment by way of assignment from such existing Lender, the Managing Administrative Agent, the Company, the assigning Lender and the Applicant Financial Institution shall execute and deliver an Assignment Agreement, or if such Applicant Financial Institution is becoming a Lender hereunder as a result of an increase in the Aggregate Credit Limit, the Managing Administrative Agent, the Company and the Applicant Financial Institution shall execute and deliver an Additional Lender Agreement, either of which Assignment Agreement or Additional Lender Agreement shall constitute an amendment to this Agreement to the extent necessary to reflect the inclusion of the Applicant Financial Institution as a Lender hereunder.

(iv) The Applicant Financial Institution shall pay to the Managing Administrative Agent for its own account a registration fee of $3,500.00.

Subject to the requirements described above, the Applicant Financial Institution shall become a party hereto and a Lender hereunder and shall be entitled to all rights, benefits and privileges accorded a Lender under the Credit Documents and shall be subject to all obligations of a Lender under the Credit Documents.

14(b)....Assignments Among Existing Lenders. Any Lender may at any time, but ----------------------------------

subject to receipt by the Managing Administrative Agent of a registration fee of $3,500.00, agree to assign a portion of such Lender’s Aggregate Maximum Commitment to a Transferee Lender. In such event the Lender and the Transferee Lender shall so notify the Managing Administrative Agent and the Company of the Adjustment Date on which such assignment is to be effective. On such Adjustment Date:

(1) The Company shall deliver to the Managing Administrative Agent and each of the Lenders a Commitment Schedule to be effective as of such Adjustment Date reflecting the assignment. (2) The Managing Administrative Agent, the Company, the assigning

  Lender and the Transferee Lender shall execute and deliver an Assignment Agreement, which shall constitute an amendment to this Agreement to the extent necessary to reflect such transfer.

(3) No later than 12:30 p.m. (Los Angeles time) on such Adjustment

  Date, the Transferee Lender shall pay to the Managing Administrative Agent an amount equal to, as applicable, such Transferee Lender’s Multi-Year Facility Percentage Share and Short Term Facility Percentage Share of Multi-Year Loans and Short Term Loans, respectively, outstanding in excess of such Transferee Lender’s previous Multi-Term Facility Percentage Share and Short Term Facility Percentage Share thereof. The Managing Administrative Agent shall thereupon remit to the transferring Lender the amount thereof.

(4) If the Transferee Lender will become the GNMA Pool Advance

  Lender, such Transferee Lender shall execute a replacement GNMA Pool Advance Agreement and cooperate with the current GNMA Pool Advance Lender to effect such intent.

14(c)....Minimum Loan Commitment. Notwithstanding anything to the contrary -----------------------

contained herein, the inclusion of any Applicant Financial Institution as a Lender hereunder pursuant to Paragraph 14(a) above and the assignment by a Lender of a portion of such Lender’s Aggregate Maximum Commitment to a Transferee Lender pursuant to Paragraph 14(b) above shall be subject to the following restrictions:

(1) If an Applicant Financial Institution is acquiring a portion of

  an existing Lender’s Aggregate Maximum Commitment by way of an assignment from such existing Lender, then following the consummation of the contemplated assignment and after giving effect to any other assignments occurring on the related Adjustment Date, such existing Lender must continue to hold an Aggregate Maximum Commitment of not less than $10,000,000.00 and such Applicant Financial Institution must hold an Aggregate Maximum Commitment of not less than $10,000,000.00;

(2) If an existing Lender is assigning a portion of its Aggregate

  Maximum Commitment to a Transferee Lender, then following the consummation of the contemplated assignment and after giving effect to any other assignments occurring on the related Adjustment Date, such existing Lender shall continue to hold an Aggregate Maximum Commitment of not less than $10,000,000.00 following the consummation of the contemplated assignment.

There shall be no minimum hold requirement in the event that an existing Lender is assigning one hundred percent (100%) of its Aggregate Maximum Commitment.

14(d)....Sub-Participations by Lenders. Any Lender may at any time sell ----------------------------- participating interests in any of the Obligations held by such Lender and its commitments hereunder; provided, however, that: (1) No participation contemplated by this Paragraph 14(d) shall relieve such Lender from its obligations hereunder or under any other Credit Document; (2) Such Lender shall remain solely responsible for the performance of such obligations; (3) The Company, the Managing Administrative Agent and the other

  Lenders shall continue to deal solely and directly with such Lender in connection with such Lender’s rights and obligations under the Credit Documents;

(4) The participation agreement between such Lender and the Person

  purchasing such participation interest (a “Participant”) shall provide that: (i) the participation interest of the Participant is an undivided interest in such Lender’s Aggregate Maximum Commitment, and (ii) the sole voting rights of the Participant are with respect to those items on which such Lender is entitled to vote pursuant to Paragraphs 13(b)(2), 13(b)(4), 13(b)(8) and 13(b)(9) above;

(5) Each such participation shall be in the minimum amount of

  $5,000,000.00 and after giving effect to any participation permitted by this Paragraph 14(d), the portion of such Lender’s Aggregate Maximum Commitment not subject to any participation shall not be less than $25,000,000.00; and

(6) Such Lender shall not enter into participation agreements with more than two Participants for each $25,000,000.00 of the Aggregate Maximum Commitment held by such Lender.

The Company acknowledges and agrees that each Participant shall be considered a Lender for purposes of Paragraphs 4(h), 4(i), 4(j) and 5(l) above; provided, however, that in no event shall any Participant be entitled to receive any payment or compensation in excess of that to which such Participant’s selling Lender would be entitled with respect to the participation interest held by such Participant if such Lender had not sold any participation interest to such Participant.

14(e)....Federal Reserve Bank. Notwithstanding the provisions of Paragraphs 14(a) --------------------

and 14(b) above, any Lender may at any time pledge or assign all or any portion of such Lender’s rights under this Agreement and the other Credit Documents to a Federal Reserve Bank.

14(f)....Increases in Availability. From time to time the Company and any Lender -------------------------

(an “Increasing Lender”) may agree, with the prior written consent of the Managing Administrative Agent, to permanently or temporarily increase such Lender’s Aggregate Maximum Commitment and Multi-Year Facility Percentage Share and/or Short Term Facility Percentage Share, the dollar amount of any such increase to be, subject to the Maximum Aggregate Credit Limit limitation, in the minimum dollar amount of $5,000,000.00 and integral multiples of $5,000,000.00 in excess thereof. The Company and the Increasing Lender shall agree on the Adjustment Date for said increase and, if the increase is a temporary rather than permanent increase, the date on which said increase shall terminate (the “Temporary Increase Termination Date”). The Company shall deliver to the Managing Administrative Agent and each of the Lenders a Commitment Schedule to be effective as of such Adjustment Date. On the Temporary Increase Termination Date the aggregate amount of such Increasing Lender’s Multi-Year Facility Percentage Share of outstanding Multi-Year Loans in excess of its Maximum Multi-Year Facility Commitment and/or the aggregate amount of such Increasing Lender’s Short Term Facility Percentage Share of outstanding Short Term Loans in excess of its Maximum Short Term Facility Commitment after giving effect to the termination of the subject increase shall, if but only if at such Temporary Increase Termination Date there does not exist an Event of Default or Potential Default, be payable in full. If at the Temporary Increase Termination Date there exists an Event of Default or Potential Default, the temporary increase of the Increasing Lender shall continue in effect and, unless otherwise agreed by one hundred percent (100%) of the Lenders, shall be treated thereafter as a permanent increase in said Increasing Lender’s Aggregate Maximum Commitment.

14(g)....Provision of Information; Confidentiality. The Company hereby -----------------------------------------

acknowledges and agrees that in connection with the proposed assignment or subparticipation by a Lender of its interest in the Obligations, such Lender may disclose to prospective assignees and Participants any and all information provided to such Lender hereunder; provided, however, that such information shall be furnished to such prospective assignees and Participants on a confidential basis.

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed as of the day and year first above written. [Signature Pages Following]

ANNEXES AND SCHEDULES TO CREDIT AGREEMENT

ANNEXES: Annex I: Glossary, with Annexes and Exhibits Annex II: Schedule of Addresses for Notices, Etc. SCHEDULES: Schedule 8(a): Schedule of Litigation Schedule 8(h) Schedule of Subsidiaries EXECUTION DOCUMENT

ANNEX I: GLOSSARY

For purposes of the Credit Documents (as defined herein), the terms set forth below shall have the following meanings: "Additional Commitment Negotiated Loan" shall mean a Negotiated Loan which the Company and ------------------------------------- the Lender funding such Negotiated Loan have agreed, as evidenced by written notice to such effect given to the Administrative Agent by the Company and the Lender funding such Negotiated Loan prior to the funding of such Negotiated Loan as required pursuant to Paragraph 1(c)(1) of the Agreement, will not reduce to any extent availability under such Lender's Maximum Multi-Year Commitment or such Lender's Maximum Short Term Commitment. "Additional Commitment Negotiated Loan Percentage Share" shall mean at any date for any ------------------------------------------------------ Lender holding outstanding Additional Commitment Negotiated Loans, that percentage which: (a) the aggregate dollar amount of outstanding Additional Commitment Negotiated Loans held by such Lender bears to (b) the aggregate dollar amount of all outstanding Additional Commitment Negotiated Loans. "Additional Lender Agreement" shall mean an agreement in the form of that attached hereto as --------------------------- Glossary Exhibit A. - ------------------ "Adjustment Date" shall mean that date as of which an Applicant Financial Institution --------------- becomes a "Lender" or an existing Lender takes all of or a portion of another existing Lender's Aggregate Maximum Commitment under the Credit Documents, or otherwise increases its Aggregate Maximum Commitment, as provided therein. "Administrative Agents" shall mean BofA and JPChase, collectively, in their capacity as --------------------- co-administrative agents under the Credit Documents. "Advance" shall have the meaning given such term in Paragraph 10(g) of the Agreement. ------- "Affiliate" shall mean any Person directly or indirectly controlling, controlled by or under --------- direct or indirect common control with, any other Person. "Control" as used herein means the power to direct the management and policies of a Person. "Agents" shall mean, collectively and severally, the Managing Administrative Agent, the ------ Administrative Agents, the Documentation Agent, the Co-Syndication Agents and the Other Facility Agents. "Aggregate Credit Limit" shall mean at any date the sum (not to exceed the Aggregate Maximum ---------------------- Credit Limit) of the Multi-Year Facility Credit Limit, the Short Term Facility Credit Limit and the GNMA Pool Advance Commitment at such date, with the "Aggregate Credit Limit" at the Effective Date set forth on the initial Commitment Schedule attached hereto as Glossary Annex 1. ---------------- "Aggregate Maximum Commitment" shall mean for any Lender at any date such Lender's Maximum ---------------------------- Multi-Year Facility Commitment, plus, if applicable, such Lender's Maximum Short Term Facility Commitment plus, if applicable, for the GNMA Pool Advance Lender the GNMA Pool Advance Commitment. "Aggregate Maximum Credit Limit" shall mean $6,000,000,000.00, as such amount may be ------------------------------ increased from time to time by written consent of the Company, the Managing Administrative Agent and one hundred percent (100%) of the Lenders. "Aggregate Multi-Year Swing Line Commitment" shall mean at any date the sum of the ------------------------------------------ Multi-Year Swing Line Commitments of the Multi-Year Swing Line Lenders at such date. "Aggregate Percentage Share" shall mean for any Lender at any date that percentage which the -------------------------- dollar amount of such Lender's Aggregate Maximum Commitment bears to the Aggregate Credit Limit or, if the Aggregate Credit Limit shall have been reduced to zero, whether following the occurrence of an Event of Default or otherwise, such Lender's Aggregate Percentage Share shall mean that percentage which the aggregate dollar amount of outstanding Loans held (or participated in pursuant to Paragraph 1(a) or Paragraph 1(b) of the Agreement) by such Lender (including the aggregate dollar amount of Within Commitment Negotiated Loans held by such Lender but excluding the aggregate dollar amount of Additional Commitment Negotiated Loans held by such Lender) plus, if applicable, the aggregate dollar amount of outstanding GNMA Pool Advance Loans held by such Lender, bears to (b) the aggregate dollar amount of outstanding Loans (including Within Commitment Negotiated Loans but excluding Additional Commitment Negotiated Loans), plus the aggregate dollar amount of outstanding GNMA Pool Advance Loans. "Aggregate Short Term Swing Line Commitment" shall mean at any date the sum of the Short ------------------------------------------ Term Swing Line Commitments of the Short Term Swing Line Lenders at such date. "Agreement" shall mean that certain Revolving Credit Agreement dated as of December 17, 2001 --------- by and among the Managing Administrative Agent, the Administrative Agents, the Co-Arrangers, the Documentation Agent, the Co-Syndication Agents, the Other Facility Agents the Lenders and the Company, as the same may be amended, extended or replaced from time to time. "Alternate Base Rate" shall mean on any date the greater of: (a) the rate announced by the ------------------- Managing Administrative Agent from time to time as its "prime rate," with any change in the prime rate to be effective on and as of the date of such change, and (b) the Federal Funds Effective Rate plus one half of one percent (0.50%). "Applicable Eurodollar Rate" shall mean with respect to any Eurodollar Interest Period or -------------------------- Discount Loan Interest Period, the rate per annum (rounded upward, if necessary, to the next higher one hundredth of one percent (.01%)) calculated in accordance with the following formula:

                           Applicable Eurodollar Rate =    ER    + PS
                                                        --------
 .................................                           1-RR

where

                           ER  =  Eurodollar Rate
                           RR  =  Reserve Requirement
                           PS  =  Pricing Spread

"Applicable Federal Funds Rate" shall mean on any date a rate per annum equal to the Federal ----------------------------- Funds Effective Rate plus the Pricing Spread. "Applicable Financial Test Date" shall mean for each of the Company and the Parent, the last ------------------------------ day of each fiscal quarter of such Person. "Applicant Financial Institution" shall mean a financial institution proposed for inclusion ------------------------------- as a "Lender" under the Credit Documents by the Company or by an existing Lender thereunder. "Assignment Agreement" shall mean an agreement in the form of Glossary Exhibit B attached -------------------- ------------------ hereto. "Balance Bank" shall mean, collectively and severally, each of the Multi-Year Balance Banks ------------ and each of the Short Term Balance Banks. "Balance Bank Agreement" shall mean: (a) with respect to Multi-Year Loans, an agreement in ---------------------- the form of Glossary Exhibit C-1 attached hereto among the Company, the Managing Administrative Agent and a -------------------- Balance Bank which is a Multi-Year Lender, and (b) with respect to Short Term Loans, an agreement in the form of Glossary Exhibit C-2 attached hereto among the Company, the Managing Administrative Agent and a Balance -------------------- Bank which is a Short Term Lender "Balance Bank Discount" shall mean with respect to each Multi-Year Loan and each Short Term --------------------- Loan which is a Discount Loan, an amount determined by the Managing Administrative Agent with respect to such Discount Loan such that, when the principal amount of such Discount Loan is repaid by the Company on the last day of the Discount Loan Interest Period with respect thereto, such principal amount will be equivalent to the proceeds of such Discount Loan (net of the Balance Bank Discount) plus interest on such proceeds calculated at a per annum rate (based upon a year of 360 days for the actual number of days elapsed) equal to the Pricing Spread. "BofA" shall mean Bank of America, N.A. ---- "Business Day" shall mean any day other than a Saturday, a Sunday or a day on which banks in ------------ Los Angeles, California, New York, New York or Dallas, Texas are authorized or required to close. "Buy-Down Agreement" shall have the meaning given such term in Paragraph 4(n) of the ------------------ Agreement. "Cash" shall mean at any date the dollar amount of "Cash" of the Company and its ---- Subsidiaries set forth in the consolidated balance sheet of the Company and its Subsidiaries as of the most recent Applicable Financial Test Date, prepared in accordance with GAAP. "Claims" shall have the meaning given such term in Paragraph 9(n) of the Agreement. ------ "Closing Certificate" shall mean: (a) with respect to the Company, a certificate in the ------------------- form of Glossary Exhibit D-1 attached hereto, and (b) with respect to the Parent, a certificate in the form -------------------- of Glossary Exhibit D-2 attached hereto. -------------------- "Code" shall mean the Internal Revenue Code of 1986, as amended. ---- "Commitment Schedule" shall mean a schedule setting forth: (a) the current Aggregate ------------------- Maximum Credit Limit, Aggregate Credit Limit, Multi-Year Facility Credit Limit, Short Term Facility Credit Limit, Aggregate Multi-Year Swing Line Commitment and Aggregate Short Term Swing Line Commitment, and (b) for each Lender, such Lender's Aggregate Maximum Commitment, Maximum Multi-Year Facility Commitment, Maximum Short Term Facility Commitment, Multi-Year Facility Percentage Share, Short Term Facility Percentage Share, Multi-Year Swing Line Commitment, Short Term Swing Line Commitment, Multi-Year Swing Line Percentage Share, Short Term Swing Line Percentage Share and GNMA Pool Advance Commitment, as applicable, as such schedule may be modified from time to time consistent with the Credit Documents, with the Commitment Schedule in effect at the Effective Date being attached hereto as Glossary Annex 1. ---------------- "Commonly Controlled Entity" of a Person shall mean a Person, whether or not incorporated, -------------------------- which is under common control with such Person within the meaning of Section 414(c) of the Code. "Contact Office" shall mean the office of the Managing Administrative Agent as announced by -------------- the Managing Administrative Agent from time to time. "Contractual Obligation" as to any Person shall mean any provision of any security issued by ---------------------- such Person or of any agreement, instrument or undertaking to which such Person is a party or by which it or any of its property is bound. "Covenant Compliance Certificate" shall mean: (a) with respect to the Company, a ------------------------------- certificate in the form of Glossary Exhibit E-1 attached hereto, and (b) with respect to the Parent, a -------------------- certificate in the form of Glossary Exhibit E-2 attached hereto. -------------------- "CPN" shall mean a commercial paper note issued by the Company in the ordinary course of --- business. "Credit Documents" shall mean the Agreement, the Parent Guaranty, the Parent Subordination ---------------- Agreement, each Subsidiary Guaranty, each Subsidiary Guarantor Subordination Agreement, the Fee Letters, the Balance Bank Agreements and each other document, instrument or agreement executed by the Company or the Parent in connection herewith or therewith, as any of the same may be amended, extended or replaced from time to time, and with reference to any individual "Credit Document" being deemed automatically to be a reference to such Credit Document as so amended, extended or replaced. "Credit Event" shall mean the making of a Loan or a GNMA Pool Advance Loan, as applicable. ------------ "Deferred Commitment Fees" shall mean [refundable and non-refundable fees] paid by consumers ------------------------ to the Company and its Subsidiaries for mortgages not yet closed with the dollar amount of such fees set forth as "Deferred Commitment Fees" set forth in the consolidated balance sheet of the Company and its Subsidiaries as of the most recent Applicable Financial Test Date, prepared in accordance with GAAP. "Direct Loan" shall mean a Multi-Year Loan or a Short Term Loan which is interest bearing ----------- and as to which each Multi-Year Lender or Short Term Lender, as applicable, advances its Multi-Year Facility Percentage Share or Short Term Facility Percentage Share, as applicable, directly to the Company. "Discount Loan" shall mean a Multi-Year Loan or a Short Term Loan which is funded on a ------------- discounted basis by a Multi-Year Balance Bank or a Short Term Balance Bank, as applicable, with a concurrent sale to each Multi-Year Lender or each Short Term Lender, as applicable, of its Multi-Year Facility Percentage Share thereof or Short Term Facility Percentage Share thereof, as applicable. "Discount Loan Funding Date" shall mean: (a) with respect to each outstanding Discount Loan, -------------------------- the last day of the Discount Loan Interest Period with respect thereto, or (b) if no Discount Loans are then outstanding, on the fifth and twentieth days of each calendar month (or if such day is not a Business Day, the next succeeding Business Day). "Discount Loan Interest Period" shall mean with respect to each Discount Loan, the period ----------------------------- commencing on the Discount Loan Funding Date for such Discount Loan and ending on the twentieth day (if the Discount Loan Funding Date was the twenty-first day of the immediately preceding month) or fifth day (if the Discount Loan Funding Date was the sixth day of the immediately preceding month) of the next succeeding calendar month; provided, however, that (a) if any Discount Loan Interest Period would otherwise end on a day that is not a Eurodollar Business Day, such Discount Loan Interest Period shall be extended to the next succeeding Eurodollar Business Day, (b) any Discount Loan Interest Period for a Discount Loan which is a Multi-Year Loan that would otherwise extend beyond the Multi-Year Maturity Date shall end on the Multi-Year Maturity Date, and (c) any Discount Loan Interest Period for a Discount Loan which is a Short Term Loan that would otherwise extend beyond the Short Term Maturity Date shall end on the Short Term Maturity Date. "Double Level Subordinated Parent Debt" shall mean Indebtedness of the Company to the Parent ------------------------------------- which is subject to the Parent Subordination Agreement and which constituted an advance from the Parent to the Company or investment by the Parent in the Company from funds of the Parent obtained through Subordinated Parent Borrowings. "Effective Date" shall mean the date each of the conditions set forth in Paragraph 7(a) of -------------- the Agreement is satisfied. "Eligible Financial Institution" shall mean any of the following: ------------------------------ (a)......A commercial bank organized under the laws of the United States, or any state thereof, and having a combined capital and surplus of at least $100,000,000.00; (b)......A commercial bank organized under the laws of any other country which is a

member of the Organization for Economic Cooperation and Development (the “OECD”), or a political subdivision of any such country, and having a combined capital and surplus of at least $100,000,000.00 (provided that such bank is acting through a branch or agency located in the country in which it is organized or another country which is also a member of the OECD;

(c)......A Person that is engaged in the business of commercial banking and that is: (1) a Subsidiary of a Lender, (2) a Subsidiary of a Person of which a Lender is a Subsidiary, or (3) a Person of which a Lender is a Subsidiary; (d)......An insurance company, mutual fund or other financial institution organized under the laws of the United States, any state thereof, any other country which is a member of the OECD or a political subdivision of any such country which in vests in bank loans and has a net worth of $500,000,000.00; and (e)......Any fund (other than a mutual fund) which invests in bank loans and whose assets exceed $100,000,000.00;

provided, however, that no Person shall be an “Eligible Financial Institution” unless at the time of the proposed assignment to such Person: (i) such Person is able to make Loans in U.S. dollars, and (ii) such Person is exempt from withholding of tax on interest and is able to delivery the documents related thereto pursuant to Paragraph 4(k)(2) of the Agreement.

"Eligible Mortgage Assets" shall mean the dollar amount of Mortgage Loans and MBS Held for ------------------------ Sale owned by the Company set forth in the consolidated balance sheet of the Company and its Subsidiaries as of the most recent Applicable Financial Test Date, prepared in accordance with GAAP, but excluding, in any event: (a) Mortgage Loans and Mortgage-Backed Securities which are subject to a Lien, (b) Mortgage Loans secured by properties which are not 1-4 unit residential properties, and (c) Mortgage Loans deemed to be unsaleable by the Company. "Eligible Servicing Portfolio" shall mean that portion of the Company's or any Subsidiary ---------------------------- Guarantor's servicing portfolio consisting of Servicing Contracts as to which each of the following statements is accurate and complete: (a)......Each such Servicing Contract provides for the servicing by the Company or

such Subsidiary Guarantor of Mortgage Loans owned by FNMA, FHLMC or GNMA and/or the servicing by the Company or such Subsidiary Guarantor of Mortgage Loans in pools underlying Mortgage-Backed Securities (including, without limitation, participation certificates) issued or guaranteed by FNMA, FHLMC or GNMA;

(b)......Each such Servicing Contract is in full force and effect and there does not exist any fact or circumstance that would entitle FNMA, FHLMC or GNMA, as applicable, to suspend or terminate said Servicing Contract for cause; and (c)......The servicing obligations under each such Servicing Contract are being performed, on a non-recourse basis, directly by the Company or such Subsidiary Guarantor. "ERISA" shall mean the Employee Retirement Income Security Act of 1974, as the same may from ----- time to time be supplemented or amended. "Eurodollar Business Day" shall mean a Business Day upon which commercial banks in London, ----------------------- England are open for domestic and international business. "Eurodollar Interest Period" shall mean the period of time commencing on the date as of -------------------------- which the Company has elected certain Direct Loans to be Eurodollar Loans and ending 1, 2, 3, or 6 months thereafter (as designated by the Company in the related Loan Request, Interest Rate Election and Payoff Notice); provided, however, that (a) any Eurodollar Interest Period which would otherwise end on a day which is not a Eurodollar Business Day shall be extended to the next succeeding Eurodollar Business Day unless by such extension it would fall in another calendar month, in which case such Eurodollar Interest Period shall end on the immediately preceding Eurodollar Business Day; (b) any Eurodollar Interest Period which begins on a day for which there is no numerically corresponding day in the calendar month during which such Eurodollar Interest Period is to end shall, subject to the provisions of clause (a) hereof, end on the last day of such calendar month; (c) no Eurodollar Interest Period for a Multi-Year Loan which is a Eurodollar Loan shall extend beyond the Multi-Year Maturity Date, and (d) no Eurodollar Interest Period for a Short Term Loan which is a Eurodollar Loan shall extend beyond the Short Term Maturity Date. "Eurodollar Loans" shall mean Direct Loans at such time as they are made and/or being ---------------- maintained at a rate of interest based upon the Eurodollar Rate. "Eurodollar Rate" shall mean with respect to any Eurodollar Interest Period or Discount Loan --------------- Interest Period, the rate per annum equal to the rate set forth at Telerate Page 3750 at approximately 11:00 a.m. London time two Eurodollar Business Days prior to the first day of such Eurodollar Interest Period or Discount Loan Interest Period for deposits in dollars in an amount equal to the aggregate amount of Loans proposed to be subject to such rate during such Eurodollar Interest Period or Discount Loan Interest Period and for a period of time equal to such Eurodollar Interest Period or Discount Loan Interest Period; provided, however, that if such information is not available on Telerate the "Eurodollar Rate" shall be determined from information supplied to the Managing Administrative Agent by a nationally recognized reporting service for similar information acceptable to the Managing Administrative Agent. "Event of Default" shall have the meaning given such term in Paragraph 11 of the Agreement. ---------------- "Existing Credit Agreement" shall have the meaning given such term in Recital A of the ------------------------- Agreement. "Federal Funds Effective Rate" shall mean for any day an interest rate per annum equal to ---------------------------- the weighted average of the rates on overnight Federal funds transactions with members of the Federal Reserve System arranged by Federal funds brokers on such day, as published for such day (or, if such day is not a Business Day, for the immediately preceding Business Day) by the Federal Reserve Bank of New York, or, if such rate is not so published for any day which is a Business Day, the average of the quotations at approximately 8:00 a.m. (Los Angeles time) on such day on such transactions received by the Managing Administrative Agent from three Federal funds brokers of recognized standing selected by the Managing Administrative Agent in its sole discretion. "Federal Funds Rate Loans" shall mean Direct Loans at such time as they are made and/or ------------------------ being maintained at a rate of interest based upon the Federal Funds Effective Rate. "Fee Letters" shall mean, jointly, the Multi-Year Facility Fee Letter and the Short Term ----------- Facility Fee Letter. "FHA" shall mean the Federal Housing Administration and any successor agency. --- "FHLMC" shall mean the Federal Home Loan Mortgage Corporation and any successor agency. ----- "Final Short Term Maturity Date" shall have the meaning given such term in Paragraph 3(c) of ------------------------------ the Agreement. "FNMA" shall mean the Federal National Mortgage Association and any successor agency. ---- "Funding Account" shall mean an account maintained in the Company's name alone with the --------------- Managing Administrative Agent, as announced to the Lenders by the Managing Administrative Agent from time to time. "Funding Check" shall mean a check issued by or on behalf of the Company the proceeds of ------------- which will be used to close the origination of a Mortgage Loan and which check has not been presented for payment and cleared. "GAAP" shall mean generally accepted accounting principles in the United States of America ---- in effect from time to time. "GNMA" shall mean the Government National Mortgage Association and any successor agency. ---- "GNMA Pool Advance Agreement" shall mean such agreement as GNMA may require be executed --------------------------- between the Company and the GNMA Pool Advance Lender setting forth the obligations of the GNMA Pool Advance Lender to fund advances on behalf of the Company to GNMA. "GNMA Pool Advance Commitment" shall mean that dollar amount which is established from time ---------------------------- to time under the GNMA Pool Advance Agreement with the Managing Administrative Agent notified in writing of such dollar amount as in effect from time to time immediately upon the establishment of such dollar amount initially and upon any change in such dollar amount, with the GNMA Pool Advance Commitment on the Effective Date being zero. "GNMA Pool Advance Lender" shall mean that Multi-Year Lender, if any, which shall agree to ------------------------ act in such capacity hereunder and under the GNMA Pool Advance Agreement. "GNMA Pool Advance Loan" shall have the meaning given such term in Paragraph 1(e) of the ---------------------- Agreement. "Governmental Authority" shall mean any nation or government, any state or other political ---------------------- subdivision thereof, and any entity exercising executive, legislative, judicial, regulatory or administrative functions of or pertaining to government. "Hedge Contract" shall mean a contract to buy or sell an instrument on the futures market or -------------- the futures options market or an option or financial future purchased over the counter for future delivery of such instrument, each of the above issued in accordance with the requirements of the Company's Hedging Program. "Hedging Program" shall mean a program for hedging interest rate risks by the Company, which --------------- program shall provide, without limitation, that all Hedge Contracts will be placed with registered broker-dealers, futures commission merchants or clearing houses, if applicable, with whom the Company has written, assignable agreements. "Indebtedness" of any Person shall mean all items of indebtedness which, in accordance with ------------ GAAP, would be included in determining liabilities as shown on the liability side of a balance sheet of such Person as of the date as of which indebtedness is to be determined, including, without limitation, all obligations for money borrowed and capitalized lease obligations, and shall also include all indebtedness and liabilities of others assumed or guaranteed by such Person or in respect of which such Person is secondarily or contingently liable (other than by endorsement of instruments in the course of collection) whether by reason of any agreement to acquire such indebtedness or to supply or advance sums or otherwise. "Indemnified Persons" shall have the meaning given such term in Paragraph 9(n) of the ------------------- Agreement. "Initial Subsidiary Guarantors" shall mean Countrywide Home Loans Servicing LP, a Texas ----------------------------- limited partnership, and any and all other Subsidiary Guarantors which are in existence at the Effective Date. "Interest Period" shall mean, as the context requires, a Discount Loan Interest Period, a --------------- Eurodollar Interest Period and/or a Negotiated Loan Interest Period. "Investments" shall have the meaning given such term in Paragraph 10(g) of the Agreement. ----------- "JPChase" shall mean JPMorgan Chase Bank. ------- "Lender Discount" shall mean with respect to each Discount Loan, an amount determined by the --------------- Managing Administrative Agent with respect to such Discount Loan such that, when the principal amount of such Discount Loan is repaid by the Company on the last day of the Discount Loan Interest Period with respect thereto, such principal amount will be equivalent to the proceeds of such Discount Loan (net of the Lender Discount) plus interest on such net proceeds calculated at a rate per annum (based upon a year of 360 days for the actual number of days elapsed) equal to the Applicable Eurodollar Rate in respect of such Discount Loan for such Discount Loan Interest Period. "Lenders" shall mean, collectively and severally, the "Lenders" under (and as defined in the ------- introductory paragraph of) the Agreement and such additional lenders who may become "Lenders" pursuant to Paragraph 14(a) of the Agreement. "Lien" shall mean any security interest, mortgage, pledge, lien, claim, charge or ---- encumbrance (including any conditional sale or other title retention agreement), any lease in the nature thereof, and the filing of or agreement to give any financing statement under the Uniform Commercial Code of any jurisdiction. "Loan" shall mean a Multi-Year Loan, a Short Term Loan, the Short Term Facility Term-Out ---- Loan, a Multi-Year Swing Loan, a Short Term Swing Loan or a Negotiated Loan, as applicable, and "Loans" shall ----- mean all such loans, collectively and severally. "Loan Request, Interest Rate Election and Payoff Notice" shall mean a written request, ------------------------------------------------------ election and notice in form satisfactory to the Managing Administrative Agent. "Majority Lenders" shall mean at any date those Lenders holding not less than sixty-two ---------------- percent (62%) of the Aggregate Percentage Shares. "Managing Administrative Agent" shall mean BofA and any successors assuming the position of ----------------------------- "Managing Administrative Agent" under the Credit Documents. "Margins" shall mean cash and government securities which are required by third parties to ------- support business transactions conducted with the Company and are restricted for that purpose and are not immediately available to the Company unless the underlying business transaction has been changed to cause the release of such cash or securities with the dollar amount of such cash and securities shown as "Margins" on the most recent Covenant Compliance Certificate delivered by the Company pursuant to Paragraph 9(a)(3) of the Agreement and shall equal that dollar portion of "Other Receivables" shown on the consolidated balance sheet of the Company and its Subsidiaries as of the most recent Applicable Financial Test Date delivered by the Company, prepared in accordance with GAAP. "Maximum Multi-Year Facility Commitment" shall mean at any date for any Multi-Year Lender at -------------------------------------- any date the maximum dollar portion of Multi-Year Loans that such Multi-Year Lender has agreed to make or to participate in, as set forth on the current Commitment Schedule, as such amount may be increased or decreased as provided in the Credit Documents. "Maximum Short Term Facility Commitment" shall mean for any Short Term Lender at any date -------------------------------------- the maximum dollar portion of Short Term Loans that such Short Term Lender has agreed to make or to participate in, as set forth on the current Commitment Schedule, as such amount may be increased or decreased as provided in the Credit Documents. "Moody's" shall mean Moody's Investors Service, Inc. ------- "Mortgage-Backed Security" shall mean a security (including, without limitation, a ------------------------ participation certificate) secured by or representing an undivided interest in a pool of Mortgage Loans each of which Mortgage Loan is secured by a completed single family dwelling (one-to-four family units), which security is: (a)...... Guaranteed by GNMA; (b)......Issued or guaranteed by FNMA or FHLMC; or (c)......Issued by any other Person provided that such security: (1) was subject

to an effective registration statement filed with the Securities and Exchange Commission at the time of initial issuance or was included in a senior tranche of privately-placed securities, and (2) is rated by a recognized rating agency in a category that is not less than the rating assigned to the Company’s long term indebtedness.

"Mortgage Claims Receivable" shall mean that dollar amount shown as such on the balance -------------------------- sheet of the Company as of the end of the calendar month immediately preceding the month in which "Mortgage Claims Receivable" is calculated. "Mortgage Loan" shall mean a residential real estate secured loan, including, without ------------- limitation: (a) a promissory note and related deed of trust (or mortgage) and/or security agreements; (b) all guaranties and insurance policies, including, without limitation, all mortgage and title insurance policies and all fire and extended coverage insurance policies and rights of the owner of such loan to return premiums or payments with respect thereto; and (c) all right, title and interest of the owner of such loan in the property covered by said deed of trust (or mortgage). "Mortgage Loans and MBS Held For Sale" shall mean that dollar amount shown as such on the ------------------------------------ balance sheet of the Company as of the end of the calendar month immediately preceding the month in which "Mortgage Loans and MBS Held For Sale" is calculated. "Mortgage Servicing Rights" shall mean the agreements between investors and the Company or ------------------------- any of the Subsidiary Guarantors providing for the servicing of Mortgage Loans, including pools of Mortgage Loans underlying Mortgage-Backed Securities, with the dollar amount of such agreements shown as "Mortgage Servicing Rights" on the consolidated balance sheet of the Company and its Subsidiaries as of the most recent Applicable Financial Test Date, prepared in accordance with GAAP. "Multiemployer Plan" as to any Person shall mean a Plan of such Person which is a ------------------ multiemployer plan as defined in Section 4001(a)(3) of ERISA. "Multi-Year Balance Bank" shall mean each of the Multi-Year Lenders which has executed a ----------------------- Balance Bank Agreement with the Company and the Managing Administrative Agent. "Multi-Year Facility Credit Limit" shall mean at any date the aggregate of the Multi-Year -------------------------------- Lenders' Maximum Multi-Year Facility Commitments at such date, as set forth on the current Commitment Schedule; provided, however, that in no event shall the Multi-Year Facility Credit Limit exceed at any date the Aggregate Credit Limit minus the Short Term Facility Credit Limit at such date and minus the GNMA Pool Advance Commitment at such date. "Multi-Year Facility Fee Letter" shall mean a letter executed by the Company and each of the ------------------------------ Multi-Year Lenders setting forth the fees payable by the Company to the Multi-Year Lenders, as such letter may be amended from time to time by written agreement of the Company and one hundred percent (100%) of the Multi-Year Lenders. "Multi-Year Facility Maturity Date" shall mean December 17, 2006. --------------------------------- "Multi-Year Facility Percentage Share" shall mean for any Multi-Year Lender at any date that ------------------------------------ percentage which: (a) the aggregate dollar amount of outstanding Multi-Year Loans held (or participated in pursuant to Paragraph 1(a) of the Agreement) by such Multi-Year Lender plus such Multi-Year Lender's Multi-Year Within Commitment Negotiated Loans bears to (b) the Multi-Year Facility Credit Limit. "Multi-Year Lenders" shall mean at any date those Lenders holding a Multi-Year Facility ------------------ Percentage Share as set forth on the current Commitment Schedule. "Multi-Year Loan" shall have the meaning given such term in Paragraph 1(a) of the Agreement. --------------- "Multi-Year Swing Line Commitment" shall mean for any Multi-Year Swing Line Lender at any -------------------------------- date the maximum dollar portion of Multi-Year Swing Loans that such Multi-Year Swing Line Lender has agreed to make, as set forth on the current Commitment Schedule, as such amount may be increased or decreased as provided in the Credit Documents. "Multi-Year Swing Line Lenders" shall mean at any date those Multi-Year Lenders holding a ----------------------------- Multi-Year Swing Line Percentage Share as set forth on the current Commitment Schedule. "Multi-Year Swing Line Percentage Share" shall mean for any Multi-Year Swing Line Lender at -------------------------------------- any date that percentage which the dollar amount of such Multi-Year Swing Line Lender's Multi-Year Swing Line Commitment bears to the Aggregate Multi-Year Swing Line Commitment. "Multi-Year Swing Loans" shall have the meaning given such term in Paragraph 1(d)(1) of the ---------------------- Agreement. "Multi-Year Within Commitment Negotiated Loan" shall mean a Negotiated Loan which the -------------------------------------------- Company and the Lender funding such Negotiated Loan have agreed, as evidenced by written notice to such effect given to the Administrative Agent prior to the funding of such Negotiated Loan as required pursuant to Paragraph 1(c)(1) of the Agreement, will reduce, dollar for dollar, availability under such Lender's Maximum Multi-Year Commitment. "Negotiated Loan" shall have the meaning given such term in Paragraph 1(c) of the --------------- Agreement. "Negotiated Loan Interest Period" shall mean as to any Negotiated Loan the period of time ------------------------------- from the date such Negotiated Loan is advanced until the principal amount thereof is payable in full, as agreed by the Company and the Lender which makes such Negotiated Loan, subject to the restrictions on the term of Negotiated Loans set forth in Paragraph 1(c) of the Agreement. "Negotiated Loan Interest Rate" shall mean as to any Negotiated Loan such fixed rate per ----------------------------- annum as the Company and the Lender which agreed to advance such Negotiated Loan have agreed. "Negotiated Loan Notice" shall mean a written notice in the form attached hereto as Glossary ---------------------- --------- Exhibit F. - --------- "Obligations" shall mean any and all debts, obligations and liabilities of the Company to ----------- the Lenders and the Agents (whether now existing or hereafter arising, voluntary or involuntary, whether or not jointly owed with others, direct or indirect, absolute or contingent, liquidated or unliquidated, and whether or not from time to time decreased or extinguished and later increased, created or incurred), arising out of or related to the Credit Documents. "Other Assets" shall mean the dollar amount shown as "Other Assets" on the most recent ------------ Covenant Compliance Certificate delivered by the Company pursuant to Paragraph 9(a)(3) of the Agreement and shall consist of all assets of the Company shown on the balance sheet of the Company as of the most recent Applicable Financial Test Date other than assets included in the calculation of subparagraphs (1) through (9) of Paragraph 10(j) of the Agreement; provided, however, that in no event shall Other Assets include intangible assets. "Other Facility Agents" shall have the meaning given such term in the introductory paragraph --------------------- of the Agreement. "Outstanding CPN" shall mean each CPN issued by the Company which has not been presented for --------------- payment and for which payment has not been made in full. "Overnight Transaction Loan Rate" shall mean on any day the rate per annum determined by the ------------------------------- Managing Administrative Agent for such day to be its transaction loan rate, plus the Pricing Spread. "Parent" shall mean Countrywide Credit Industries, Inc., a Delaware corporation. ------ "Parent Guaranty" shall mean a guaranty duly executed by the Parent in the form of that --------------- attached hereto as Glossary Exhibit G. ------------------ "Parent Subordination Agreement" shall mean a subordination agreement in the form of ------------------------------ Glossary Exhibit H attached hereto, as the same may be amended, extended or replaced from time to time. - ------------------ "Parent Notes" shall mean all promissory notes or other Indebtedness issued by the Parent ------------ pursuant to either of those certain Form S-3 Registration Statements filed on behalf of the Parent with the Securities and Exchange Commission on January 20, 1988, and July 25, 1989, respectively, as the same may be amended, extended or supplemented from time to time. "Participant" shall mean a Person to whom has been sold an undivided participation interest ----------- in the Obligations as permitted under the Credit Documents. "PBGC" shall mean the Pension Benefit Guaranty Corporation established pursuant to ---- Subtitle A of Title IV of ERISA and any successor agency. "Person" shall mean any corporation, limited liability company, natural person, firm, joint ------ venture, partnership, trust, unincorporated organization, government or any department or agency of any government. "Plan" shall mean as to any Person, any pension plan that is covered by Title IV of ERISA ---- and in respect of which such Person or a Commonly Controlled Entity of such Person is an "employer" as defined in Section 3(5) of ERISA. "Pool Loan Purchases" shall mean that dollar amount shown as such on the balance sheet of ------------------- the Company as of the end of the calendar month immediately preceding the month in which "Pool Loan Purchases" is calculated. "Potential Default" shall mean an event which but for the lapse of time or the giving of ----------------- notice, or both, would constitute an Event of Default. "Pre-Funding Notice" shall mean: (a) with respect to Multi-Year Loans, a notice in the form ------------------ of Glossary Exhibit I-1 attached hereto, and (b) with respect to Short Term Loans, a notice in the form of -------------------- Glossary Exhibit I-2 attached hereto. - -------------------- "Pricing Spread" shall be determined as follows (and established for each Eurodollar Loan on -------------- the first day of the Eurodollar Interest Period thereof and for each Discount Loan on the first day of the Discount Loan Interest Period thereof): (a)......With respect to each Loan which is a Multi-Year Loan or a Multi-Year Swing

Loan, if on such day the Company’s long term unsecured debt rating is: (1) at least “A+” with S&P or “A1" with Moody’s, the Pricing Spread shall be 0.185%; (2) at least “A” with S&P or “A2” with Moody’s, the Pricing Spread shall be 0.275%; (3) at least “A-” with S&P or “A3” with Moody’s, the Pricing Spread shall be 0.375%; (4) at least “BBB+” with S&P or “Baa1” with Moody’s, the Pricing Spread shall be 0.475%; (5) at least “BBB” with S&P or “Baa2” with Moody’s, the Pricing Spread shall be 0.550% and (6) below “BBB” with S&P and “Baa2" with Moody’s, the Pricing Spread shall be 0.575%; provided, however, that if on any day for whatever reason the Company’s long term unsecured debt rating is not available from S&P or Moody’s or is not otherwise determinable hereunder (including, without limitation, by reference to an alternate rating agency of recognized standing), the Pricing Spread shall be deemed to be 0.575%; and, provided, further, that the Pricing Spread determined pursuant to this subparagraph (a) in effect on each day on which the aggregate dollar amount of Multi-Year Loans and Multi-Year Swing Loans outstanding exceeds twenty five percent (25%) of the Multi-Year Facility Credit Limit on such date shall be increased by an additional one eighth of one percent (0.125%)

(b)......With respect to each Loan which is a Short Term Loan or a Short Term Swing

Loan, if on such day the Company’s long term unsecured debt rating is: (1) at least “A+” with S&P or “A1" with Moody’s, the Pricing Spread shall be 0.205%; (2) at least “A” with S&P or “A2” with Moody’s, the Pricing Spread shall be 0.295%; (3) at least “A-” with S&P or “A3” with Moody’s, the Pricing Spread shall be 0.40%; (4) at least “BBB+” with S&P or “Baa1” with Moody’s, the Pricing Spread shall be 0.50%; (5) at least “BBB” with S&P or “Baa2” with Moody’s, the Pricing Spread shall be 0.575% and (6) below “BBB” with S&P and “Baa2" with Moody’s, the Pricing Spread shall be 0.65%; provided, however, that if on any day for whatever reason the Company’s long term unsecured debt rating is not available from S&P or Moody’s or is not otherwise determinable hereunder (including, without limitation, by reference to an alternate rating agency of recognized standing), the Pricing Spread shall be deemed to be 0.65%; and, provided, further, that the Pricing Spread determined pursuant to this subparagraph (b) in effect on each day on which the aggregate dollar amount of Short Term Loans and Short Term Swing Loans outstanding exceeds twenty five percent (25%) of the Short Term Facility Credit Limit on such date shall be increased by and additional one eighth of one percent (0.125%).

Property and Equipment shall mean the dollar amount shown as Property, Equipment and ---------------------- Leasehold Improvements on the balance sheet of the Company as of the Applicable Financial Test Date delivered by the Company pursuant to Paragraph 9(a)(2) of the Agreement. "Qualifying Balances" shall have the meaning with respect to each Balance Bank given such ------------------- term in the Balance Bank Agreement among the Company, the Managing Administrative Agent and such Balance Bank. "Receivables" shall have the meaning given such term in Paragraph 10(g) of the Agreement. ----------- "Regulation D" shall mean Regulation D of the Board of Governors of the Federal Reserve ------------ System from time to time in effect and shall include any successor or other regulation of said Board of Governors relating to reserve requirements applicable to member banks of the Federal Reserve System. "Regulation U" shall mean Regulation U of the Board of Governors of the Federal Reserve ------------ System (12 C.F.R.ss. 221), as the same may from time to time be amended, supplemented or superseded. "Reportable Event" shall mean any of the events set forth in Section 4043(b) of ERISA. ---------------- "Requirements of Law" shall mean as to any Person the Certificate of Incorporation and ------------------- By-Laws or other organizational or governing documents of such Person, and any law, treaty, rule or regulation, or a final and binding determination of an arbitrator or a determination of a court or other Governmental Authority, in each case applicable to or binding upon such Person or any of its property or to which such Person or any of its property is subject. "Reserve Requirement" shall mean with respect to an Interest Period for a Eurodollar Loan or ------------------- a Discount Loan, the maximum aggregate reserve requirement (including all basic, supplemental, marginal and other reserves and taking into account any transitional adjustments) which is imposed under Regulation D on eurocurrency liabilities. "Residuals" shall mean financial instruments held by the Company whose value is determined --------- by the value of another financial instrument with the dollar amount of such financial instruments shown as "Investments in Other Financial Instruments" on the consolidated balance sheet of the Company and its Subsidiaries as of the most recent Applicable Financial Test Date, prepared in accordance with GAAP. "S&P" shall mean Standard & Poor's Ratings Services. --- "Servicing Contract" shall mean a written agreement between the Company and a third party ------------------ providing for the direct servicing and administration of Mortgage Loans, including pools of Mortgage Loans underlying Mortgage-Backed Securities. "Servicing Hedge Instrument" shall mean those assets of the Company and its Subsidiaries -------------------------- constituting a component of `Investments in other financial instruments' as specifically listed under the heading "Servicing hedge instruments" in the notes to the consolidated balance sheet of the Company and its Subsidiaries as of the most recent Applicable Financial Test Date, prepared in accordance with GAAP. "Servicing Pass-Through Venture" shall mean any corporation, partnership, joint venture, ------------------------------ trust or other entity legally separate from the Company and formed for the purpose of acquiring (either from the Company or from unaffiliated parties) the right to service mortgage loans for a fee and selling or pledging all or any portion of the related servicing fee income to finance all or part of the acquisition of such servicing rights. "Short Term Balance Bank" shall mean each of the Short Term Lenders which has executed a ----------------------- Balance Bank Agreement with the Company and the Managing Administrative Agent. "Short Term Facility Credit Limit" shall mean at any date the aggregate of the Short Term -------------------------------- Lenders' Maximum Short Term Facility Commitments at such date, as set forth on the current Commitment Schedule; provided, however, that in no event shall the Short Term Facility Credit Limit exceed at any date the Aggregate Credit Limit minus the Multi-Year Facility Credit Limit at such date and minus the GNMA Pool Advance Commitment at such date. "Short Term Facility Fee Letter" shall mean a letter executed by the Company and each of the ------------------------------ Short Term Lenders setting forth the fees payable by the Company to the Short Term Lenders, as such letter may be amended from time to time by written agreement of the Company and one hundred percent (100%) of the Short Term Lenders. "Short Term Facility Maturity Date" shall mean December 16, 2002, as such date may be --------------------------------- extended from time to time in writing by the Managing Administrative Agent, the Company and one hundred percent (100%) of the Short Term Lenders; provided, however, that if prior to the then current Short Term Facility Maturity Date less than one hundred percent (100%) of the Short Term Lenders shall decline to extend such date, the Short Term Facility Maturity Date shall be extended as to only those Short Term Facility Lenders who have elected to so extend and on the then current Short Term Facility Maturity Date those of the Short Term Lenders electing not to extend shall cease to be Short Term Facility Lenders under the Agreement; and, provided further, that if the Company has elected pursuant to Paragraph 3(c) of the Agreement to convert the aggregate principal amount of Short Term Loans outstanding on the then current Short Term Facility Maturity Date then any agreement of the Short Term Lenders to extend the then current Short Term Facility Maturity Date and continue to make Short Term Loans on a revolving basis thereunder shall be ineffective and of no further force or effect, it being expressly agreed and understood that the Short Term Facility Term-Out Loan shall replace in its entirety (and as to all Short Term Lenders) the revolving credit facility previously provided. "Short Term Facility Percentage Share" shall mean for any Short Term Lender at any date that ------------------------------------ percentage which: (a) the aggregate dollar amount of outstanding Short Term Loans held (or participated in pursuant to Paragraph 1(b) of the Agreement) by such Short Term Lender plus such Short Term Lender's Short Term Within Commitment Negotiated Loans bears to (b) the Short Term Facility Credit Limit. "Short Term Facility Term-Out Loan" shall have the meaning given such term in Paragraph 3(c) --------------------------------- of the Agreement. "Short Term Lenders" shall mean at any date those Lenders holding a Short Term Facility ------------------ Percentage Share as set forth on the current Commitment Schedule. "Short Term Loan" shall have the meaning given such term in Paragraph 1(b) of the Agreement. --------------- "Short Term Swing Line Commitment" shall mean for any Short Term Swing Line Lender at any -------------------------------- date the maximum dollar portion of Short Term Swing Loans that such Short Term Swing Line Lender has agreed to make, as set forth on the current Commitment Schedule, as such amount may be increased or decreased as provided in the Credit Documents. "Short Term Swing Line Lenders" shall mean at any date those Short Term Lenders holding a ----------------------------- Short Term Swing Line Percentage Share as set forth on the current Commitment Schedule. "Short Term Swing Line Percentage Share" shall mean for any Short Term Swing Line Lender at -------------------------------------- any date that percentage which the dollar amount of such Short Term Swing Line Lender's Short Term Swing Line Commitment bears to the Aggregate Short Term Swing Line Commitment. "Short Term Swing Loans" shall have the meaning given such term in Paragraph 1(d)(2) of the ---------------------- Agreement. "Short Term Within Commitment Negotiated Loan" shall mean a Negotiated Loan which the -------------------------------------------- Company and the Lender funding such Negotiated Loan have agreed, as evidenced by written notice to such effect given to the Administrative Agent prior to the funding of such Negotiated Loan as required pursuant to Paragraph 1(c)(1) of the Agreement, will reduce, dollar for dollar, availability under such Lender's Maximum Short Term Commitment. "Single Employer Plan" shall mean as to any Person any Plan of such Person which is not a -------------------- Multiemployer Plan. "Single Level Subordinated Parent Debt" shall mean Indebtedness of the Company to the Parent ------------------------------------- which although subject to the Subordination Agreement (and therefore constituting Subordinated Debt) is not Double Level Subordinated Parent Debt. "Statement Date" shall mean February 28, 2001. -------------- "Subordinated Debt" shall mean Indebtedness of the Company subordinated to the Obligations ----------------- in the manner and to the extent required by the Managing Administrative Agent pursuant to written subordination agreements satisfactory in form and substance to the Managing Administrative Agent, and such other Indebtedness as would customarily be classified as "subordinated" to the Obligations which the Managing Administrative Agent may from time to time designate as included in `Subordinated Debt' in its reasonable business judgment. "Subordinated Parent Borrowings" shall mean Indebtedness of the Parent subordinated to other ------------------------------ Indebtedness of the Parent to the extent satisfactory to the Majority Lenders, it being expressly agreed and understood that Indebtedness of the Parent under the Parent Notes does not constitute Subordinated Parent Borrowings. "Subsidiary" shall mean as to any Person: (a) any corporation more than fifty percent (50%) ---------- of the outstanding securities having ordinary voting power of which shall at the time be owned or controlled, directly or indirectly, by such Person or by one or more of its Subsidiaries or by such Person and one or more of its Subsidiaries, or (b) any partnership, limited liability company, association, joint venture or similar business organization more than fifty percent (50%) of the ownership interests having ordinary voting power of which shall at the time be so owned or controlled. Unless otherwise expressly provided, all references in the Loan Documents to a "Subsidiary" shall mean a Subsidiary of the Company. "Subsidiary Guarantor" shall mean each wholly-owned Subsidiary of the Company the assets of -------------------- which are comprised primarily of assets included in the calculation of permitted Total Debt pursuant to Paragraph 10(j) of the Agreement. "Subsidiary Guarantor Subordination Agreement" shall mean a subordination agreement in the -------------------------------------------- form of Glossary Exhibit J attached hereto, as the same may be amended, extended or replaced from time to ------------------ time. "Subsidiary Guaranty" a guaranty duly executed by a Subsidiary Guarantor in the form of that ------------------- attached hereto as Glossary Exhibit K. ------------------ "Swing Loan" shall mean, collectively and severally, each of the Multi-Year Swing Loans and ---------- each of the Short Term Swing Loans. "Taxes" shall have the meaning given such term in Paragraph 4(k) of the Agreement. ----- "Total Debt" shall mean all Indebtedness of the Company and its Subsidiaries excluding ---------- Subordinated Debt (other than Single Level Subordinated Parent Debt) and deferred taxes of the Company attributable to capitalization of purchased servicing rights and excess servicing fees. "Transferee Lender" shall mean an existing Lender to which another existing Lender transfers ----------------- a portion of its Aggregate Maximum Commitment. "VA" shall mean the Veterans Administration and any successor agency. -- "Within Commitment Negotiated Loan" shall mean a Multi-Year Within Commitment Negotiated --------------------------------- Loan or a Short Term Within Commitment Negotiated Loan. SCHEDULE OF GLOSSARY ANNEXES AND EXHIBITS

GLOSSARY ANNEXES:

         ANNEX 1:          .........Initial Commitment Schedule

GLOSSARY EXHIBITS:

         EXHIBIT A:        .........        Form of Additional Lender Agreement
         EXHIBIT B:        .........        Form of Assignment Agreement
         EXHIBIT C-1:      .........        Form of Balance Bank Agreement (Multi-Year Facility)
         EXHIBIT C-2:      .........        Form of Balance Bank Agreement (Short Term Facility)
         EXHIBIT D-1:      .........        Form of Closing Certificate (Company)
         EXHIBIT D-2:      .........        Form of Closing Certificate (Parent)
         EXHIBIT E-1:      .........        Form of Covenant Compliance Certificate (Company)
         EXHIBIT E-2:      .........        Form of Covenant Compliance Certificate (Parent)
         EXHIBIT F:        .........        Form of Negotiated Loan Notice
         EXHIBIT G:        .........        Form of Parent Guaranty
         EXHIBIT H:        .........        Form of Parent Subordination Agreement
         EXHIBIT I-1:      .........        Form of Pre-Funding Notice (Multi-Year Facility)
         EXHIBIT I-2:      .........        Form of Pre-Funding Notice (Short Term Facility)
         EXHIBIT J:        .........        Form of Subsidiary Guarantor Guaranty
         EXHIBIT K:        .........        Form of Subsidiary Guarantor Subordination Agreement

GLOSSARY EXHIBIT A ------------------ FORM OF

ADDITIONAL LENDER AGREEMENT

THIS ADDITIONAL LENDER AGREEMENT (the "AL Agreement") is made and dated as of ___________ __, 200_ by ______________________________ __________________________________________ (the "Applicant Financial Institution"), BANK OF AMERICA, N.A., as "Managing Administrative Agent" under the Credit Agreement referred to in Recital A below (in such capacity, the "Managing Administrative Agent"), and COUNTRYWIDE HOME LOANS, INC. (the "Company").

RECITALS

A. The Applicant Financial Institution desires to become a "Lender" under that certain Revolving Credit Agreement dated as of December 17, 2001 (as amended, extended and restated from time to time, the "Credit Agreement" and with capitalized terms not otherwise defined herein used with the same meaning as in the Credit Agreement), by and among the Managing Administrative Agent, the Administrative Agents, the Documentation Agent, the Co-Syndication Agents, the Other Facility Agents, the Lenders currently participating therein (the "Existing Lenders") and the Company. B. The Applicant Financial Institution has been approved for inclusion as a Lender under the terms of the Credit Agreement. NOW, THEREFORE, for good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, the parties agree as follows: AGREEMENT --------- 1. The Applicant Financial Institution hereby acknowledges and agrees that from and after ___________ __, 200_ (the "Adjustment Date") it will be a "Lender" under the Credit Agreement and the other Credit Documents with all the rights and benefits and with all the obligations of the Existing Lenders thereunder. 2. The Applicant Financial Institution hereby agrees to purchase on the Adjustment Date and to accept the assignment and transfer of a portion of the Obligations held by the Existing Lenders consistent with the Commitment Schedule delivered by the Company effective as of the Adjustment Date, a copy of which is attached hereto. 3. The address of the Applicant Financial Institution for purposes of the Credit Agreement shall initially be as set forth beneath its signature below and shall upon the Adjustment Date be deemed added to Annex II to the Credit Agreement. 4. This AL Agreement shall be governed by and construed and interpreted in accordance with the laws of the State of California. 5. This AL Agreement may be executed in counterparts and such counterparts together shall constitute one and the same agreement. 6. This AL Agreement, when executed by each of the parties hereto shall constitute an amendment of the Credit Agreement consistent with the Commitment Schedule referred to in Paragraph 2 above. 7. As provided in Paragraph 14(a) of the Credit Agreement, on or before the Adjustment Date the Applicant Financial Institution shall pay to the Managing Administrative Agent a registration fee of $3,500.00. [Signature page following] EXECUTED as of the day and year first above written.

APPLICANT FINANCIAL
INSTITUTION:                                         [
                                                      ---------------------------
Name                          ]
- ------------------------------


                                                     By: __________________________________________________________
                                                     Name: ________________________________________________________
                                                     Title: _______________________________________________________


                                                     Address: _____________________________________________________
===================================================================================================================
                                                     Attn: ________________________________________________________


MANAGING ADMINISTRATIVE
AGENT:                                               BANK OF AMERICA, N.A.


                                                     By: __________________________________________________________
                                                     Name: ________________________________________________________
                                                     Title: _______________________________________________________


COMPANY:                                             COUNTRYWIDE HOME LOANS, INC.,
                                                     a New York corporation


                                                     By: __________________________________________________________
                                                     Name: ________________________________________________________
                                                     Title: _______________________________________________________

GLOSSARY EXHIBIT B ------------------ FORM OF

ASSIGNMENT AGREEMENT

THIS ASSIGNMENT AGREEMENT (the "Assignment Agreement") is made and dated as of _____________, 200_ between ____________________ (the "Assignor") and ______________________ (the "Assignee"). The parties hereto agree as follows: 1._______The Assignor is a Lender under that certain Revolving Credit Agreement dated as of December 17, 2001 by and among Countrywide Home Loans, Inc. (the "Company"), Bank of America, N.A., as managing administrative agent (in such capacity, the "Managing Administrative Agent"), the Administrative Agents, the Documentation Agent, the Co-Syndication Agents, the Other Facility Agents, and the Lenders currently participating therein (as amended, extended and restated from time to time, the "Credit Agreement," and with capitalized terms used herein and not otherwise defined herein used with the same meanings attributed to them in the Credit Agreement). 2._______The Assignor hereby sells and assigns to the Assignee, and the Assignee hereby purchases and assumes from the Assignor, a portion of the Obligations held by the Assignor consistent with the Commitment Schedule delivered by the Company effective as of the Adjustment Date (as defined in Paragraph 3 below), a copy of which is attached hereto as Schedule I. ---------- 3._______By executing this Assignment Agreement in the space provided below, the Company and the Managing Administrative Agent approve the inclusion of the Assignee as a Lender under the Credit Agreement and agree with the Assignor and the Assignee that the Adjustment Date therefor shall be _______________, 200_ (the "Adjustment Date"). 4._______On and after the Adjustment Date: (a) the Assignee shall have the rights and obligations of a Lender under the Credit Agreement and the other Credit Documents with respect to the rights and obligations assigned to the Assignee hereunder arising on and after such Adjustment Date, and (b) the Assignor shall relinquish its rights (other than under Paragraphs 4(j) and 5(l) of the Credit Agreement) and be released from its corresponding obligations under the Credit Agreement and the other Credit Documents with respect to the rights and obligations assigned to Assignee hereunder arising prior to such Adjustment Date. 5._______The Assignee shall be entitled to receive from the Managing Administrative Agent all payments of principal, interest and fees with respect to the interest assigned hereby accruing on and after the Adjustment Date. In the event that either the Assignee or the Assignor receives any payment to which the other party hereto is entitled under this Assignment Agreement, then the party receiving such amount shall promptly remit it to the other party hereto. 6._______The Assignor represents and warrants that it is the legal and beneficial owner of the interest being assigned by it hereunder and that such interest is free and clear of any adverse claim. It is understood and agreed that the assignment and assumption hereunder are made without recourse to the Assignor and that the Assignor makes no other representation or warranty of any kind to the Assignee. Neither the Assignor nor any of its officers, directors, employees, agents or attorneys shall be responsible for: (a) the due execution, legality, validity, enforceability, genuineness, sufficiency or collectability of any Credit Documents, (b) any representation, warranty or statement made in or in connection with any of the Credit Documents, (c) the financial condition or creditworthiness of the Company, any of its Subsidiaries or the Parent, (d) the performance of or compliance with any of the terms or provisions of any of the Credit Documents, (e) inspecting any of the property, books or records of the Company, any of its Subsidiaries or the Parent, (f) the validity, enforceability, perfection, priority, condition, value or sufficiency of any collateral securing or purporting to secure the Obligations or (g) any mistake, error of judgment, or action taken or omitted to be taken in connection with the Credit Documents. 7._______The Assignee: (a) confirms that it has received a copy of the Credit Documents, together with copies of any financial statements requested by the Assignee and such other documents and information as it has deemed appropriate to make its own credit analysis and decision to enter into this Assignment Agreement, (b) agrees that it will, independently and without reliance upon the Managing Administrative Agent, any other Agent, the Assignor or any other Lender and based on such documents and information as it shall deem appropriate at the time, continue to make its own credit decisions in taking or not taking action under the Credit Documents, (c) appoints and authorizes each Agent to take such actions as agent on its behalf and to exercise such powers under the Credit Documents as are delegated to such Agent by the terms thereof on the terms set forth therein, including, without limitation, the terms set forth in Paragraph 12 of the Credit Agreement entitled "Agency Provisions," (d) agrees that on and after the Adjustment Date it will perform in accordance with their terms all of the obligations which by the terms of the Credit Documents are required to be performed by it as a Lender, and (e) agrees that its payment instructions and notice instructions are as set forth in Schedule II attached hereto. ----------- 8._______The Assignee agrees to indemnify and hold harmless the Assignor against any and all losses, costs and expenses (including, without limitation, reasonable attorneys' fees) and liabilities incurred by the Assignor in connection with or arising in any manner from the Assignee's non-performance of the obligations assumed under this Assignment Agreement. 9._______This Assignment Agreement embodies the entire agreement and understanding between the parties hereto and supersedes all prior agreements and understandings between the parties hereto relating to the subject matter hereof. 10.______This Assignment Agreement shall be deemed to be a contract made under the laws of the State of California and for all purposes shall be construed in accordance with the laws of said State, without regard to principles of conflicts of law. 11.______Notices shall be given under this Assignment Agreement in the manner set forth in the Credit Agreement. For the purpose hereof and of the Credit Documents, the address of the Assignee (until notice of a change is delivered pursuant to the provisions of the Credit Agreement) shall be the address set forth beneath the Assignee's signature below. 12.______As provided in Paragraph 14(a) of the Credit Agreement, on or before the Adjustment Date the Assignee shall pay to the Managing Administrative Agent a registration fee of $3,500.00. IN WITNESS WHEREOF, the parties hereto have executed this Assignment Agreement by their duly authorized officers as of the date first above written.

                                                     [NAME OF ASSIGNOR]


                                                     By: _________________________________________________
                                                     Name:________________________________________________
                                                     Title: ______________________________________________



                                                     [NAME OF ASSIGNEE]


                                                     By: _________________________________________________
                                                     Name: _______________________________________________
                                                     Title: ______________________________________________
                                                     Address:_____________________________________________
==========================================================================================================
                                                                 Attn:____________________________________
ACKNOWLEDGED AND AGREED TO
this __ day of _____________, 200_:

BANK OF AMERICA, NA., as Managing Administrative Agent



By:__________________________________________________
Name: _______________________________________________
Title:_______________________________________________


COUNTRYWIDE HOME LOANS, INC., a New York corporation



By:__________________________________________________
Name:________________________________________________
Title:_______________________________________________

GLOSSARY EXHIBIT C-1 -------------------- FORM OF

BALANCE BANK AGREEMENT

(Multi-Year Facility)

This BALANCE BANK AGREEMENT (this "Agreement") is made and dated as of _______________, 200_, between the Multi-Year Lender (as that term is used in the Credit Agreement referred to below) named on the signature pages hereof, as a "Balance Bank" under the Credit Agreement (the "Multi-Year Facility Balance Bank"), Countrywide Home Loans, Inc., a New York corporation (the "Company"), and Bank of America, N.A., as the managing administrative agent under the Credit Agreement (in such capacity, the "Managing Administrative Agent"). W I T N E S S E T H: - - - - - - - - - - WHEREAS, the Company and the Multi-Year Facility Balance Bank are parties to the Credit Agreement; WHEREAS, the Multi-Year Facility Balance Bank has agreed to make and assign Multi-Year Loans in the form of Discount Loans (the "Multi-Year Facility Discount Loans") under the Credit Agreement, on the terms and conditions set forth therein; and WHEREAS, the Company has agreed to compensate the Multi-Year Facility Balance Bank as hereinafter set forth; NOW, THEREFORE, in consideration of the premises and mutual covenants contained herein, the parties hereto hereby agree as follows: 1. Defined Terms. Capitalized terms not otherwise defined herein shall be used herein ------------- as defined in the Glossary attached to the Credit Agreement as Annex I. As used in this Agreement, the ------- following terms shall have the following meanings: "Balance Deficiency Fee" shall have the meaning set forth in Section 4 of this ---------------------- Agreement. "Credit Agreement" shall mean that certain Revolving Credit Agreement dated as of ---------------- December 17, 2001 among the Company, the Managing Administrative Agent, the Administrative Agents, the Documentation Agent, the Co-Syndication Agents, the Other Facility Agents, and the Lenders party thereto, as amended, extended and replaced from time to time. "Supplemental Borrowing Fee" shall have the meaning set forth in Section 3 of this -------------------------- Agreement. "Supplemental Borrowing Fee Rate" shall mean the rate per annum agreed to by the ------------------------------- Company and the Multi-Year Facility Balance Bank from time to time in writing. 2. Maximum Availability. The maximum aggregate dollar amount of Multi-Year Facility -------------------- Discount Loans at any time outstanding from the Multi-Year Facility Balance Bank to the Company (without giving effect to the sale of interests therein to the Lenders) will not exceed that amount agreed to by the Multi-Year Facility Balance Bank and the Company from time to time in writing with the initial such amount being set forth on Annex I attached hereto. ------- 3. Supplemental Borrowing Fee. The Company shall pay to the Multi-Year Facility -------------------------- Balance Bank on each Discount Loan Funding Date for a Multi-Year Facility Discount Loan a supplemental borrowing fee calculated at the Supplemental Borrowing Fee Rate on the principal amount of each Multi-Year Facility Discount Loan made by the Multi-Year Facility Balance Bank (without giving effect to the sale of interests therein to Lenders) on such Discount Loan Funding Date (the "Supplemental Borrowing Fee"). The aggregate amount of the Supplemental Borrowing Fee payable to the Multi-Year Facility Balance Bank on each Discount Loan Funding Date for a Multi-Year Facility Discount Loan shall be payable by the Company directly to the Multi-Year Facility Balance Bank on such Discount Loan Funding Date. 4. Balance Deficiency Fee. If during any Discount Loan Interest Period for a ---------------------- Multi-Year Facility Discount Loan the average daily outstanding net disbursed principal amount of Multi-Year Facility Discount Loans made by the Multi-Year Facility Balance Bank (without giving effect to the sale of interests therein to the Multi-Year Lenders) during such Discount Loan Interest Period (without giving effect to any prepayment of Multi-Year Facility Discount Loans during such Discount Loan Interest Period) exceeds the average daily outstanding amount of Qualifying Balances (as defined in Annex I attached hereto) held at ------- the Multi-Year Facility Balance Bank during such Discount Loan Interest Period, the Company shall within five Business Days after the billing of such amount by the Multi-Year Facility Balance Bank pay to the Multi-Year Facility Balance Bank a balance deficiency fee (the "Balance Deficiency Fee") calculated on the amount of such excess at a rate per annum equal to the Applicable Eurodollar Rate used in calculating the Lender Discount applicable to such Multi-Year Facility Discount Loans and such Discount Loan Interest Period, less the Supplemental Borrowing Fee Rate. 5. Computation of Fees. The Balance Deficiency Fee and the Supplemental Borrowing Fee ------------------- shall be calculated on the basis of a 360 day year for the number of days elapsed or to elapse, as the case may be, in the relevant Discount Loan Interest Period. 6. Counterparts. This Agreement may be executed by one or more of the parties to this ------------ Agreement on any number of separate counterparts, and all of said counterparts taken together shall be deemed to constitute one and the same instrument. A set of the copies of this Agreement signed by all the parties shall be lodged with the Company and the Managing Administrative Agent. No party to this Agreement may assign its rights or obligations hereunder without the written consent of the other parties. 7. Severability. Any provision of this Agreement which is prohibited or unenforceable ------------ in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof, and any such prohibition or unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction. 8. GOVERNING LAW. THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES UNDER ------------- THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF CALIFORNIA WITHOUT GIVING EFFECT TO ITS CHOICE OF LAW RULES. IN WITNESS HEREOF, the parties hereto have caused this Agreement to be duly executed and delivered by their proper and duly authorized officers as of the day and year first above written.

                                              [___________________________________________], as a Multi-Year
                                              Facility Balance Bank


                                              By:       ___________________________________________________________
                                              Name:     ___________________________________________________________
                                              Title:    ___________________________________________________________



                                              COUNTRYWIDE HOME LOANS, INC., a New York corporation


                                              By:       ___________________________________________________________
                                              Name:     ___________________________________________________________
                                              Title:    ___________________________________________________________



                                              BANK OF AMERICA, N.A., as Managing Administrative Agent


                                              By:       ___________________________________________________________
                                              Name:     ___________________________________________________________
                                              Title:    ___________________________________________________________

                                                                                                     ANNEX I TO
                                                                                                     ----------
                                                                                        THE MULTI-YEAR FACILITY
                                                                                        -----------------------
                                                                                         BALANCE BANK AGREEMENT
                                                                                         ----------------------


                                           MAXIMUM AVAILABLE AMOUNT
                                           ------------------------
                                          (as of ____________, 200_)
                                              $-----------------

                                     DESCRIPTION OF "QUALIFYING BALANCES"
                                     ------------------------------------

                    [To be provided by each Multi-Year Facility Balance Bank individually]

GLOSSARY EXHIBIT C-2 -------------------- FORM OF

BALANCE BANK AGREEMENT

(Short Term Facility)

_________This BALANCE BANK AGREEMENT (this "Agreement") is made and dated as of _______________, 200_, between the Short Term Lender (as that term is used in the Credit Agreement referred to below) named on the signature pages hereof, as a "Balance Bank" under the Credit Agreement (the "Short Term Facility Balance Bank"), Countrywide Home Loans, Inc., a New York corporation (the "Company"), and Bank of America, N.A., as the managing administrative agent under the Credit Agreement (in such capacity, the "Managing Administrative Agent"). W I T N E S S E T H: - - - - - - - - - - _________WHEREAS, the Company and the Short Term Facility Balance Bank are parties to the Credit Agreement; _________WHEREAS, the Short Term Facility Balance Bank has agreed to make and assign Short Term Loans in the form of Discount Loans (the "Short Term Facility Discount Loans") under the Credit Agreement, on the terms and conditions set forth therein; and _________WHEREAS, the Company has agreed to compensate the Short Term Facility Balance Bank as hereinafter set forth; _________NOW, THEREFORE, in consideration of the premises and mutual covenants contained herein, the parties hereto hereby agree as follows: _________1. Defined Terms. Capitalized terms not otherwise defined herein shall be used herein ------------- as defined in the Glossary attached to the Credit Agreement as Annex I. As used in this Agreement, the ------- following terms shall have the following meanings: _________ "Balance Deficiency Fee" shall have the meaning set forth in Section 4 of this ---------------------- Agreement. _________ "Credit Agreement" shall mean that certain Revolving Credit Agreement dated as of ---------------- December 17, 2001 among the Company, the Managing Administrative Agent, the Administrative Agents, the Documentation Agent, the Co-Syndication Agents, the Other Facility Agents, and the Lenders party thereto, as amended, extended and replaced from time to time. _________ "Supplemental Borrowing Fee" shall have the meaning set forth in Section 3 of this -------------------------- Agreement. _________ "Supplemental Borrowing Fee Rate" shall mean the rate per annum agreed to by the ------------------------------- Company and the Short Term Facility Balance Bank from time to time in writing. _________2. Maximum Availability. The maximum aggregate dollar amount of Short Term Facility -------------------- Discount Loans at any time outstanding from the Short Term Facility Balance Bank to the Company (without giving effect to the sale of interests therein to the Lenders) will not exceed that amount agreed to by the Short Term Facility Balance Bank and the Company from time to time in writing with the initial such amount being set forth on Annex I attached hereto. ------- _________3. Supplemental Borrowing Fee. The Company shall pay to the Short Term Facility -------------------------- Balance Bank on each Discount Loan Funding Date for a Short Term Facility Discount Loan a supplemental borrowing fee calculated at the Supplemental Borrowing Fee Rate on the principal amount of each Short Term Facility Discount Loan made by the Short Term Facility Balance Bank (without giving effect to the sale of interests therein to Lenders) on such Discount Loan Funding Date (the "Supplemental Borrowing Fee"). The aggregate amount of the Supplemental Borrowing Fee payable to the Short Term Facility Balance Bank on each Discount Loan Funding Date for a Short Term Facility Discount Loan shall be payable by the Company directly to the Short Term Facility Balance Bank on such Discount Loan Funding Date. _________4. Balance Deficiency Fee. If during any Discount Loan Interest Period for a Short ---------------------- Term Facility Discount Loan the average daily outstanding net disbursed principal amount of Short Term Facility Discount Loans made by the Short Term Facility Balance Bank (without giving effect to the sale of interests therein to the Short Term Lenders) during such Discount Loan Interest Period (without giving effect to any prepayment of Short Term Facility Discount Loans during such Discount Loan Interest Period) exceeds the average daily outstanding amount of Qualifying Balances (as defined in Annex I attached hereto) held at ------- the Short Term Facility Balance Bank during such Discount Loan Interest Period, the Company shall within five Business Days after the billing of such amount by the Short Term Facility Balance Bank pay to the Short Term Facility Balance Bank a balance deficiency fee (the "Balance Deficiency Fee") calculated on the amount of such excess at a rate per annum equal to the Applicable Eurodollar Rate used in calculating the Lender Discount applicable to such Short Term Facility Discount Loans and such Discount Loan Interest Period, less the Supplemental Borrowing Fee Rate. _________5. Computation of Fees. The Balance Deficiency Fee and the Supplemental Borrowing Fee ------------------- shall be calculated on the basis of a 360 day year for the number of days elapsed or to elapse, as the case may be, in the relevant Discount Loan Interest Period. _________6. Counterparts. This Agreement may be executed by one or more of the parties to this ------------ Agreement on any number of separate counterparts, and all of said counterparts taken together shall be deemed to constitute one and the same instrument. A set of the copies of this Agreement signed by all the parties shall be lodged with the Company and the Managing Administrative Agent. No party to this Agreement may assign its rights or obligations hereunder without the written consent of the other parties. _________7. Severability. Any provision of this Agreement which is prohibited or unenforceable ------------ in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof, and any such prohibition or unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction. _________8. GOVERNING LAW. THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES UNDER ------------- THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF CALIFORNIA WITHOUT GIVING EFFECT TO ITS CHOICE OF LAW RULES. _________IN WITNESS HEREOF, the parties hereto have caused this Agreement to be duly executed and delivered by their proper and duly authorized officers as of the day and year first above written.

                                              [___________________________________________], as a Short Term
                                              Facility Balance Bank


                                              By:       ___________________________________________________________
                                              Name:     ___________________________________________________________
                                              Title:    ___________________________________________________________



                                              COUNTRYWIDE HOME LOANS, INC., a New York corporation


                                              By:       ___________________________________________________________
                                              Name:     ___________________________________________________________
                                              Title:    ___________________________________________________________



                                              BANK OF AMERICA, N.A., as Managing Administrative Agent


                                              By:       ___________________________________________________________
                                              Name:     ___________________________________________________________
                                              Title:    ___________________________________________________________

                                                                                                     ANNEX I TO
                                                                                        THE SHORT TERM FACILITY
                                                                                        -----------------------
                                                                                         BALANCE BANK AGREEMENT
                                                                                         ----------------------


                                           MAXIMUM AVAILABLE AMOUNT
                                           ------------------------
                                          (as of ____________, 200_)
                                              $-----------------

                                     DESCRIPTION OF "QUALIFYING BALANCES"
                                     ------------------------------------

                    [To be provided by each Short Term Facility Balance Bank individually]

1 GLOSSARY EXHIBIT D-1 -------------------- FORM OF

CLOSING CERTIFICATE (Company)

I, _____________, the duly elected ________________ of COUNTRYWIDE HOME LOANS, INC. (the "Company"), DO HEREBY CERTIFY as follows: 1. The representations and warranties made by the Company under the Credit Documents (as defined in and as all other capitalized terms not otherwise defined herein are as defined in that certain Revolving Credit Agreement dated as of December 17, 2001, among the Company, Bank of America, N.A., as Managing Administrative Agent, the Administrative Agents, the Documentation Agent, the Co-Syndication Agents, the Other Facility Agents, and the Lenders named therein), are accurate and complete on and as of the date hereof with the same effect as though such representations and warranties had been made on and as of the date hereof. 2. The Company is in compliance with all the terms and provisions set forth in the Credit Documents on its part to be observed and performed, and no Event of Default or Potential Default has occurred and is continuing. 3. Since the Statement Date no material adverse change in the business, assets or financial or other condition of the Company or the Company and its consolidated Subsidiaries taken as a whole has occurred. IN WITNESS WHEREOF, the undersigned has hereunto signed his name as of the 17th day of December, 2001.

- ----------------------------------------------------------------------------------------------------------
                                              Name: ______________________________________________________

1 GLOSSARY EXHIBIT D-2 -------------------- FORM OF

CLOSING CERTIFICATE (Parent)

I, _____________, the duly elected ________________ of COUNTRYWIDE CREDIT INDUSTRIES, INC. (the "Parent"), DO HEREBY CERTIFY as follows: 1. The representations and warranties made by the Parent under the Credit Documents (as defined in and as all other capitalized terms not otherwise defined herein are as defined in that certain Revolving Credit Agreement dated as of December 17, 2001, among the Company, Bank of America, N.A., as Managing Administrative Agent, the Administrative Agents, the Documentation Agent, the Co-Syndication Agents, the Other Facility Agents, and the Lenders named therein), are accurate and complete on and as of the date hereof with the same effect as though such representations and warranties had been made on and as of the date hereof. 2. The Parent is in compliance with all the terms and provisions set forth in the Credit Documents on its part to be observed and performed, and no Event of Default or Potential Default has occurred and is continuing. 3. Since the Statement Date no material adverse change in the business, assets or financial or other condition of the Company or the Company and its consolidated Subsidiaries taken as a whole has occurred. IN WITNESS WHEREOF, the undersigned has hereunto signed his name as of the 17th day of December, 2001.

- ----------------------------------------------------------------------------------------------------------
                                              Name: ______________________________________________________

1 la-531314 GLOSSARY EXHIBIT E-1 -------------------- FORM OF

COVENANT COMPLIANCE CERTIFICATE (Company)

To: Bank of America, N.A., as Managing Administrative Agent and each Lender party to the Agreement referred to below Reference is made to that certain Revolving Credit Agreement dated as of December 17, 2001 by and among the Countrywide Home Loans, Inc., Bank of America, N.A., as Managing Administrative Agent, the Administrative Agents, the Documentation Agent, the Co-Syndication Agents, the Other Facility Agents, and the Lenders named therein (as amended from time to time, the "Agreement" with capitalized terms not otherwise defined having the same meanings assigned such terms in the Agreement). Attached are the calculations of the financial covenants set forth in Paragraphs 10(i) and 10(j) of the Agreement as of the fiscal quarter ending ______________________. Such calculations are correct and are based upon accurate and complete information. I hereby further certify that there does not exist an Event of Default or Potential Default. Dated: ______________________

         _________                                            COUNTRYWIDE HOME LOANS, INC.


         _________                                            By: ___________________________________
         _________                                            Name: _________________________________
         _________                                            Title: __________________________________

[COVER SHEET ONLY--ATTACH FINANCIAL COVENANT CALCULATIONS] 1 GLOSSARY EXHIBIT E-2 -------------------- FORM OF

COVENANT COMPLIANCE CERTIFICATE (Parent)

To: Bank of America, N.A., as Managing Administrative Agent and each Lender party to the Agreement referred to below Reference is made to that certain Revolving Credit Agreement dated as of December 17, 2001 by and among the Countrywide Home Loans, Inc., Bank of America, N.A., as Managing Administrative Agent, the Administrative Agents, the Documentation Agent, the Co-Syndication Agents, the Other Facility Agents, and the Lenders named therein (as amended from time to time, the "Agreement" with capitalized terms not otherwise defined having the same meanings assigned such terms in the Agreement). Attached are the calculations of the financial covenants set forth in Paragraphs 11(a) and 11(b) of the Parent Guaranty as of the fiscal quarter ending ______________________. Such calculations are correct and are based upon accurate and complete information. I hereby further certify that there does not exist an Event of Default or Potential Default. Dated: ______________________

         _________                                            COUNTRYWIDE CREDIT INDUSTRIES, INC.


         _________                                            By: ___________________________________
         _________                                            Name: _________________________________
         _________                                            Title: __________________________________

[COVER SHEET ONLY--ATTACH FINANCIAL COVENANT CALCULATIONS] GLOSSARY EXHIBIT F ------------------ FORM OF

NEGOTIATED LOAN NOTICE

To: _________Bank of America, N.A. _________901 Main Street, 66th Floor _________Dallas, Texas 75202 Attn: ____________________ Phone: ____________________ Fax: ____________________ Date: _______________ Reference is made to that certain Revolving Credit Agreement dated as of December 17, 2001 by and among the Countrywide Home Loans, Inc. (the "Company"), Bank of America, N.A., as Managing Administrative Agent, the Administrative Agents, the Documentation Agent, the Co-Syndication Agents, the Other Facility Agents, and the Lenders named therein (as amended from time to time, the "Agreement" with capitalized terms not otherwise defined having the same meanings assigned such terms in the Agreement). The Company and the undersigned Lender hereby notify the Managing Administrative Agent that the undersigned Lender will make a Negotiated Loan to the Company as set forth below:

         Requested funding date
         of Negotiated Loan:                         __________________________

         Maturity date of
         Negotiated Loan:                            __________________________

         Principal amount of
         Negotiated Loan:                            $_________________________

         Negotiated Loan is a:                       [    ]  Additional Commitment Negotiated Loan

                                                     [    ]  Within Commitment Negotiated Loan

                                                              [    ]  Multi-Year Within Commitment
                                                                   Negotiated Loan

                                                              [    ]  Short Term Within Commitment
                                                                   Negotiated Loan

This notice is provided at least one (1) Business Day prior to the requested funding date unless otherwise agreed by the Managing Administrative Agent. Signed: COUNTRYWIDE HOME LOANS, INC. By:_________________________________________ Name:_______________________________________ Title:______________________________________ [LENDER] By:_________________________________________ Name:_______________________________________ Title:______________________________________ GLOSSARY EXHIBIT G ------------------

PARENT GUARANTY

_________ THIS PARENT GUARANTY (the “Guaranty”) is made and dated as of the 17th day of December, 2001 by COUNTRYWIDE CREDIT INDUSTRIES, INC., a Delaware corporation (“Guarantor”).

RECITALS

_________ A. Pursuant to that certain Revolving Credit Agreement dated as of December 17, 2001 among COUNTRYWIDE HOME LOANS, INC., a New York corporation (“Borrower”), the lenders named therein (the “Lenders”), Bank of America, N.A., as the managing administrative agent to the Lenders (in such capacity, the “Managing Administrative Agent”), the Administrative Agents, the Documentation Agent, the Co-Syndication Agents, and the Other Facility Agents (as amended and extended to date, the “Credit Agreement,” and with capitalized terms not otherwise defined herein used as defined in the Glossary attached to the Credit Agreement as Annex I), the Lenders party thereto agreed to extend credit to Borrower, on the terms and subject to the conditions set forth therein.

_________ B. As a condition precedent to the effectiveness of the Credit Agreement, the Guarantor is required to execute and deliver this Guaranty to the Managing Administrative Agent for the benefit of the Lenders.

_________ NOW, THEREFORE, in consideration of the above Recitals and for other good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, Guarantor hereby agrees as follows:

AGREEMENT

_________ 1. Guarantor hereby irrevocably and unconditionally guarantees the payment when due, upon maturity, acceleration or otherwise, of the Obligations, whether heretofore, now, or hereafter made, incurred or created, whether voluntary or involuntary and however arising, absolute or contingent, liquidated or unliquidated, determined or undetermined, whether or not such Obligations are from time to time reduced, or extinguished and thereafter increased or incurred, whether Borrower may be liable individually or jointly with others, whether or not recovery upon such Obligations may be or hereafter become barred by any statute of limitations, and whether or not such Obligations may be or hereafter become otherwise invalid or unenforceable.

_________ 2. Guarantor irrevocably and unconditionally guarantees the payment of the Obligations whether or not due or payable by Borrower upon: (a) the dissolution, insolvency or business failure of, or any assignment for the benefit of creditors by, or commencement of any bankruptcy, reorganization, arrangement, moratorium or other debtor relief proceedings by or against, Borrower or Guarantor, or (b) the appointment of a receiver for, or the attachment, restraint of or making or levying of any order of court or legal process affecting, the property of Borrower or Guarantor, and unconditionally promises to pay such Obligations to the Managing Administrative Agent for the benefit of Lenders, or order, on demand, in lawful money of the United States.

_________ 3. The liability of Guarantor hereunder is exclusive and independent of any security for or other guaranty of the Obligations, whether executed by Guarantor or by any other party, and the liability of Guarantor hereunder is not affected or impaired by (a) any direction of application of payment by Borrower or by any other party, or (b) any other guaranty, undertaking or maximum liability of Guarantor or of any other party as to the Obligations, or (c) any payment on or in reduction of any such other guaranty or undertaking, or (d) any revocation or release of any obligations of any other guarantor of the Obligations, or (e) any dissolution, termination or increase, decrease or change in personnel of Guarantor, or (f) any payment made to Lenders or Managing Administrative Agent on the Obligations which any of such Persons repay to Borrower pursuant to court order in any bankruptcy, reorganization, arrangement, moratorium or other debtor relief proceeding, and Guarantor waives any right to the deferral or modification of Guarantor’s obligations hereunder by reason of any such proceeding.

_________ 4. (a) The obligations of Guarantor hereunder are independent of the Obligations of Borrower, and a separate action or actions may be brought and prosecuted against Guarantor whether or not action is brought against Borrower and whether or not Borrower is joined in any such action or actions. Guarantor waives, to the fullest extent permitted by law, the benefit of any statute of limitations affecting its liability hereunder or the enforcement thereof. Any payment by Borrower or other circumstance which operates to toll any statute of limitations as to Borrower shall operate to toll the statute of limitations as to Guarantor.

_________ (b) All payments made by Guarantor under this Guaranty shall be made without set-off or counterclaim and free and clear of and without deductions for any present or future taxes, fees, withholdings or conditions of any nature (“Taxes”). Guarantor shall pay any such Taxes, including Taxes on any amounts so paid, and will promptly furnish each Lender with copies of any tax receipts or such other evidence of payment as Lenders or Managing Administrative Agent may require.

_________ 5. Guarantor authorizes Lenders and Managing Administrative Agent (whether or not after termination of this Guaranty), without notice or demand (except as shall be required by applicable statute and cannot be waived), and without affecting or impairing its liability hereunder, from time to time to (a) renew, compromise, extend, increase, accelerate or otherwise change the time for payment of, or otherwise change the terms of, Obligations or any part thereof, including increase or decrease of the rate of interest thereon; (b) take and hold security for the payment of this Guaranty or the Obligations and exchange, enforce, waive and release any such security; (c) apply such security and direct the order or manner of sale thereof as Lenders and Managing Administrative Agent in their discretion may determine; and (d) release or substitute any one or more endorsers, guarantors, Borrower or other obligors. Lenders and Managing Administrative Agent may without notice to or the further consent of Borrower or Guarantor assign this Guaranty in whole or in part to any person acquiring an interest in the Obligations.

_________ 6. It is not necessary for Lenders or Managing Administrative Agent to inquire into the capacity or power of Borrower or the officers acting or purporting to act on its behalf, and Obligations made or created in reliance upon the professed exercise of such powers shall be guaranteed hereunder.

_________ 7. Guarantor waives any right to require Lenders or Managing Administrative Agent to (a) proceed against Borrower or any other party; (b) proceed against or exhaust any security held from Borrower; or (c) pursue any other remedy in Lenders’ power whatsoever. Guarantor waives any personal defense based on or arising out of any personal defense of Borrower other than payment in full of the Obligations, including, without limitation, any defense based on or arising out of the disability of Borrower, or the invalidity or unenforceability of the Obligations or any part thereof from any cause, or the cessation from any cause of the liability of Borrower other than payment in full of the Obligations. Lenders and Managing Administrative Agent may, at their election, exercise any right or remedy Lenders or Managing Administrative Agent may have against Borrower, or any security, without affecting or impairing in any way the liability of Guarantor hereunder except to the extent the Obligations have been paid. Guarantor waives any defense arising out of any such election, even though such election operates to impair or extinguish any right of reimbursement or subrogation or other right or remedy of Guarantor against Borrower or any security. Guarantor hereby waives any claim or other rights which Guarantor may now have or may hereafter acquire against the Borrower or any other guarantor of all or any of the Obligations that arise from the existence or performance of the Guarantor’s obligations under this Guaranty or any other of the Credit Documents (all such claims and rights being referred to as the “Guarantor’s Conditional Rights”), including, without limitation, any right of subrogation, reimbursement, exoneration, contribution, or indemnification, or any right to participate in any claim or remedy which the Lenders or Managing Administrative Agent have against the Borrower or any collateral which the Lenders or Managing Administrative Agent have or thereafter acquire for the Obligations, whether or not such claim, remedy or right arises in equity or under contract, statute or common law, by any payment made hereunder or otherwise, including, without limitation, the right to take or receive from the Borrower, directly or indirectly, in cash or other property or setoff or in any other manner, payment or security on account of such claim or other rights. If, notwithstanding the foregoing provisions, any amount shall be paid to the Guarantor on account of the Guarantor’s Conditional Rights and either (a) such amount is paid to the Guarantor at any time when the Obligations shall not have been paid or performed in full, or (b) regardless of when such amount is paid to the Guarantor any payment made by Borrower to the Lenders or Managing Administrative Agent is at any time determined to be a preferential payment, then such amount paid to the Guarantor shall be deemed to be held in trust for the benefit of the Lenders or Managing Administrative Agent and shall forthwith be paid to the Lenders or Managing Administrative Agent to be credited and applied upon the Obligations, whether matured or unmatured, in such order and manner as the Lenders or Managing Administrative Agent shall determine. To the extent that any of the provisions of this Paragraph shall not be enforceable, the Guarantor agrees that until such time as the Obligations have been paid and performed in full and the period of time has expired during which any payment made by the Borrower or the Guarantor to the Lenders or Managing Administrative Agent may be determined to be a preferential payment, the Guarantor’s Conditional Rights to the extent not validly waived shall be subordinate to the Lenders’ or Managing Administrative Agent’s right to full payment and performance of the Obligations and the Guarantor shall not seek to enforce the Guarantor’s Conditional Rights during such period. Guarantor waives all presentments, demands for performance, protests and notices, including, without limitation, notices of nonperformance, notices of protest, notices of dishonor, notices of acceptance of this Guaranty, and notices of the existence, creation or incurring of new or additional Obligations. Guarantor assumes all responsibility for being and keeping itself informed of Borrower’s financial condition and assets, and of all other circumstances bearing upon the risk of nonpayment of the Obligations and the nature, scope and extent of the risks which Guarantor assumes and incurs hereunder, and agrees that neither Lenders nor Managing Administrative Agent shall have any duty to advise Guarantor of information known to any of them regarding such circumstances or risks.

_________ 8. In addition to the Obligations, Guarantor agrees to pay reasonable attorneys’ fees and all other costs and expenses incurred by Lenders and Managing Administrative Agent in enforcing this Guaranty in any action or proceeding arising out of, or relating to, this Guaranty. This Guaranty and the liability and obligations of Guarantor hereunder are binding upon Guarantor and its successors and assigns, and this Guaranty inures to the benefit of and is enforceable by Lenders and Managing Administrative Agent and their successors, transferees, and assigns.

_________ 9. No right or power of Lenders or Managing Administrative Agent hereunder shall be deemed to have been waived by any act or conduct on the part of such Persons, or by any neglect to exercise such right or power, or by any delay in so doing; and every right or power shall continue in full force and effect until specifically waived or released by an instrument in writing executed by Lenders and Managing Administrative Agent.

_________ 10. Guarantor agrees to execute any and all further documents, instruments and agreements as Managing Administrative Agent from time to time reasonably requests to evidence Guarantor's obligations hereunder. _________ 11. (a) Guarantor hereby agrees that it shall not permit its consolidated net worth determined in accordance with GAAP on and as of each Applicable Financial Test Date to be less than $2,500,000,000.00.

_________ (b) Guarantor hereby agrees that it will not declare or pay any dividends upon any shares of Guarantor’s stock now or hereafter outstanding, except dividends payable in the capital stock or stock rights of Guarantor, or make any distribution of assets to its stockholders including, without limitation, pursuant to any stock repurchase, whether in cash, property or securities; provided, however, that if at the date of such payment or distribution (both before and after giving effect thereto) there shall not exist an Event of Default or Potential Default, Guarantor may pay dividends and make other distributions not later than 120 days after the end of any fiscal quarter or year, as applicable, in an aggregate amount which does not exceed, when combined with all prior dividends and other distributions, if any, applicable to such fiscal year to date, the greater of: (i) the after tax net income of Guarantor determined in accordance with GAAP for such fiscal year to the date of the most recently ended fiscal quarter of such fiscal year, and (ii) the aggregate dollar amount of dividends and other distributions paid during the immediately preceding year.

_________ 12. Guarantor hereby confirms that all of the representations and warranties as to the Parent and its Subsidiaries set forth in Paragraph 8 of the Credit Agreement are accurate and complete and are incorporated herein by this reference.

_________ 13. This Guaranty shall be deemed to be made under and shall be governed by the laws of the State of California.

_________ 14. If any of the provisions of this Guaranty shall contravene or be held invalid under the laws of any jurisdiction, this Guaranty shall be construed as if not containing those provisions and the rights and obligations of the parties hereto shall be construed and enforced accordingly.

_________ Executed as of the day and year first above written.

                                                     COUNTRYWIDE CREDIT INDUSTRIES, INC.,
                                                     a Delaware corporation



                                                     By:    _______________________________________________________
                                                     Name:
                                                     Title: _______________________________________________________
                                                     Address:      4500 Park Granada
                                                                   Calabasas, California  91302
                                                                   Attn:  Stanford L. Kurland

GLOSSARY EXHIBIT H ------------------ FORM OF

PARENT SUBORDINATION AGREEMENT

THIS PARENT SUBORDINATION AGREEMENT (the "Subordination Agreement") is made and dated as of the 17th day of December, 2001 by and among BANK OF AMERICA, N.A., as managing administrative agent for the "Lenders" from time to time party to the Credit Agreement referred to below (in such capacity, the "Managing Administrative Agent"), COUNTRYWIDE HOME LOANS, INC., a New York corporation ("Borrower"), and COUNTRYWIDE CREDIT INDUSTRIES, INC., a Delaware corporation ("Creditor").

RECITALS

Pursuant to that certain Revolving Credit Agreement dated as of December 17, 2001 (as amended, extended or replaced from time to time, the "Credit Agreement," and capitalized terms not otherwise defined herein used with the meaning given such terms in the Glossary attached to the Credit Agreement as Annex I) by and among the Company, the Managing Administrative Agent, the Administrative agents, the - ------- Co-Syndication Agents, the Documentation Agent, the Other Facility Agents, and the Lenders from time to time party thereto, the Lenders have agreed to extend credit to Borrower on the terms and subject to the conditions set forth therein, including, without limitation, the condition that Creditor execute and deliver to Lenders: (a) a continuing guaranty of the Obligations of Borrower to Lenders under the Credit Documents, and (b) this Subordination Agreement. NOW, THEREFORE, in consideration of the above Recitals and for other good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, the parties hereto hereby agree as follows:

AGREEMENT

1._______Creditor has extended and will in the future extend credit to Borrower from time to time. The principal of all now existing and hereafter arising Indebtedness of Borrower to Creditor together with accrued but unpaid interest thereon is hereinafter referred to as the "Claim". 2._______Creditor is the sole and absolute owner of the Claim and has not sold, assigned, transferred or otherwise disposed of any right it may have to repayment of the Claim or any security therefor. 3._______The Claim and all rights and remedies of Creditor with respect thereto and any lien securing payment thereof are and shall continue to be subject, subordinate and rendered junior in right of payment to the Obligations, as the same may be extended, amended or replaced from time to time; provided, however, that unless and until there shall occur an Event of Default or Potential Default under the Credit Agreement, Borrower may make and Creditor may receive payments on account of the Claim as follows: (a) interest accruing on Double Level Subordinated Parent Debt at a per annum rate not to exceed ten percent (10%), (b) interest accruing on the principal of all other Indebtedness at a per annum rate not to exceed the pre-default rate of interest payable on account of Indebtedness of the Parent the proceeds of which were lent by the Parent to Borrower and constitute the "Indebtedness" of Borrower to the Parent as to which such interest is being paid, and (c) principal outstanding on such Indebtedness. 4._______Unless and until the Obligations shall have been fully and indefeasibly paid and discharged in cash or cash equivalents and any agreement by Lenders to make further Loans to Borrower or otherwise extend credit to Borrower pursuant to the Credit Agreement shall have terminated, except as expressly permitted pursuant to Paragraph 3 above:

___________________________(a) Borrower will not make or give, and Creditor will not receive, directly or indirectly, any payment, advance, credit or further security of any kind whatsoever on account of the Claim, or any new or further evidence thereof;

___________________________(b) Creditor will not sell, assign, transfer, dispose of or endorse the Claim or any part or evidence thereof;

___________________________(c) Creditor will pay to Managing Administrative Agent for the pro rata benefit of Lenders in accordance with their respective Aggregate Percentage Shares promptly upon receipt, for application against the Obligations, any and all amounts which may be received by Creditor on account of the Claim in excess of amounts permitted under Paragraph 3 above and until such amounts are paid to Managing Administrative Agent the same shall be held in trust for the benefit of Lenders, segregated from other funds and property held by Creditor; and

___________________________(d) Creditor will not take, or permit any action to be taken, to assert, collect or enforce the Claim or any part thereof. 5._______Each of Borrower and Creditor waives notice of acceptance of this Subordination Agreement by Lenders and Managing Administrative Agent, and Creditor waives notice of and consents to the making, amount and terms of any loan or loans which any of Lenders or Managing Administrative Agent may from time to time make to Borrower and any renewal or extension thereof and any action which any of Lenders or Managing Administrative Agent in their sole and absolute discretion may take or omit to take with respect thereto. 6._______This Subordination Agreement shall constitute a continuing agreement of subordination and Lenders and Managing Administrative Agent may, from time to time and without notice to Creditor, lend money to or make other financial arrangements with Borrower in reliance hereon until written notice of termination shall be delivered by Creditor to the Managing Administrative Agent, by certified mail, return receipt requested. The receipt by the Managing Administrative Agent of such notice shall not affect this Subordination Agreement as it relates to any Obligations then existing, to any Obligations incurred thereafter pursuant to a previous commitment by Lenders or Managing Administrative Agent or to any amendments to, or extensions or renewals of, any such Obligations. 7._______Each of Creditor and Borrower acknowledges that the failure of Creditor or Borrower to observe or perform the terms and provisions hereof or the attempt by Creditor to rescind or revoke this Subordination Agreement shall constitute an Event of Default under the Credit Agreement and may result in acceleration of the Obligations. 8._______Creditor agrees as follows:

___________________________(a) Upon any distribution of the assets of Borrower to creditors of Borrower upon the dissolution, winding up, liquidation, arrangement, or reorganization of Borrower, whether in any bankruptcy, insolvency, arrangement, reorganization or receivership proceeding or upon an assignment for the benefit of creditors or any other marshalling of the assets and liabilities of Borrower or otherwise, any payment or distribution of any kind (whether in cash, property or securities) which otherwise would be payable or deliverable upon or with respect to the Claim shall be paid or delivered directly to Managing Administrative Agent for the benefit of Lenders for application (in the case of cash) to, or as collateral (in the case of non-cash property or securities) for, the payment or prepayment of the Obligations until the Obligations shall have been paid in full.

___________________________(b) If any proceeding referred to in subsection (a) above is commenced by or against Borrower: (1) Lenders and Managing Administrative Agent are hereby irrevocably

  authorized and empowered (in their own names or in the name of Creditor or otherwise), but shall have no obligation, to demand, sue for, collect and receive every payment or distribution referred to in subsection (a) above and give acquittance therefor and to file claims and proofs of claim and take such other action (including, without limitation, voting the Claim or enforcing any security interest or other lien securing payment of the Claim) as they may deem necessary or advisable for the exercise or enforcement of any of the rights or interests of Lenders hereunder; and

(2) Creditor shall duly and promptly take such action as Lenders and

  Managing Administrative Agent may request (i) to collect the Claim for account of Lenders and to file appropriate claims or proofs of claim in respect of the Claim, (ii) to execute and deliver to Lenders and Managing Administrative Agent such powers of attorney, assignments, and other instruments as they may request in order to enable them to enforce any and all claims with respect to, and any security interests and other liens securing payment of, the Claim, and (iii) to collect and receive any and all payments or distributions which may be payable or deliverable upon or with respect to the Claim.

___________________________(c) All payments or distributions upon or with respect to the Claim which are received by Creditor contrary to the provisions of this Subordination Agreement shall be received in trust for the benefit of Lenders, shall be segregated from other funds and property held by Creditor and shall be forthwith paid over to Lenders, through the Managing Administrative Agent, in the same form as so received (with any necessary endorsement) to be applied (in the case of cash) to, or held as collateral (in the case of non-cash property or securities) for, the payment or prepayment of the Obligations.

___________________________(d) Lenders and Managing Administrative Agent are hereby authorized to demand specific performance of this Subordination Agreement, whether or not Borrower shall have complied with any or all of the provisions hereof applicable to it, at any time when the Creditor shall have failed to comply with any of the provisions of this Subordination Agreement applicable to it.

9._______It is the intent of Creditor to create by this Subordination Agreement a security interest in favor of Managing Administrative Agent for the benefit of Lenders in the Claim and in Creditor's rights to receive money or other property from Borrower on account thereof, whether such rights shall constitute accounts, contract rights, chattel paper, instruments, general intangibles or otherwise. Creditor hereby grants to Managing Administrative Agent and Lenders a security interest in the Claim and such rights of receipt in order to secure the payment and performance of the Creditor's obligations pursuant to this Subordination Agreement. 10.______Creditor authorizes Lenders and Managing Administrative Agent (whether or not after revocation of this Subordination Agreement), without notice or demand (except as shall be required by applicable statute and cannot be waived), and without affecting or impairing Creditor's obligations hereunder, from time to time to (a) renew, compromise, extend, increase, accelerate or otherwise change the time for payment of, or otherwise change the terms of, the Obligations or any part thereof, including without limitation to increase or decrease the rate of interest thereon; (b) take and hold security for the payment of the Obligations and exchange, enforce, waive and release any such security; (c) apply such security and direct the order or manner of sale thereof as Lenders and Managing Administrative Agent in their sole discretion may determine; and (d) release and substitute any one or more endorsers, warrantors, Borrower or other obligors. Lenders and Managing Administrative Agent may without notice to or the further consent of Borrower or Creditor assign this Subordination Agreement in whole or in part to any Person acquiring an interest in the Obligations. 11.______This Subordination Agreement shall extend to and be binding upon the successors and assigns of each of the parties hereto. 12.______This Subordination Agreement may be executed in any number of counterparts all of which taken together shall constitute one agreement and any party hereto may execute this Subordination Agreement by signing any such counterpart. 13.______This Subordination Agreement shall be governed by and construed in accordance with the laws of the State of California without giving effect to its choice of law rules. [Signature page following] Executed as of the day and year first above written.

                                                     COUNTRYWIDE CREDIT INDUSTRIES, INC., a Delaware
                                                     corporation


                                                     By:
                                                         -------------------------------------------------
                                                     Name:
                                                           -----------------------------------------------
                                                     Title:
                                                            ----------------------------------------------


                                                     COUNTRYWIDE HOME LOANS, INC.,
                                                     a New York corporation


                                                     By:
                                                         -------------------------------------------------
                                                     Name:
                                                           -----------------------------------------------
                                                     Title:
                                                            ----------------------------------------------


                                                     BANK OF AMERICA, N.A., as Managing Administrative Agent


                                                     By:
                                                        --------------------------------------------------
                                                     Name:
                                                          ------------------------------------------------
                                                     Title:
                                                           -----------------------------------------------

GLOSSARY EXHIBIT I-1 -------------------- FORM OF

PRE-FUNDING NOTICE

(Multi-Year Facility)

To: Bank of America, N.A. 901 Main Street, 66th Floor Dallas, Texas 75202 Attn: ____________________ Phone: ____________________ Fax: ____________________ Date: _______________

Countrywide Home Loans, Inc. notifies the Managing Administrative Agent and Multi-Year Lenders which are Balance Banks (specified below as applicable) that the following Multi-Year Loans which are to be funded as Discount Loan(s) will be requested as part of a Loan Request, Interest Rate Election and Payoff Notice to be delivered to the Managing Administrative Agent. This notice is provided three Eurodollar Business Days prior to the requested funding date.

Name of Balance Bank Discount Loans: - -------------------- Net Amount of Discount Loan (1) ------------------------------- $ (1) The "net" amount requested reflects the principal amount of each discount loan reduced by the Balance Bank Discount as calculated by the Managing Administrative Agent after receiving this Pre-Funding Notice. Signed: COUNTRYWIDE HOME LOANS, INC. By:_________________________________________ Name:_______________________________________ Title:______________________________________ GLOSSARY EXHIBIT I-2 -------------------- FORM OF

PRE-FUNDING NOTICE

(Short Term Facility)

To: _________Bank of America, N.A. _________901 Main Street, 66th Floor _________Dallas, Texas 75202 Attn: ______________________ Phone: ______________________ Fax: ______________________ Date: _______________

Countrywide Home Loans, Inc. notifies the Managing Administrative Agent and Short Term Lenders which are Balance Banks (specified below as applicable) that the following Short Term Loans which are to be funded as Discount Loan(s) will be requested as part of a Loan Request, Interest Rate Election and Payoff Notice to be delivered to the Managing Administrative Agent. This notice is provided three Eurodollar Business Days prior to the requested funding date.

Name of Balance Bank Discount Loans: - -------------------- Net Amount of Discount Loan (1) ------------------------------- $ (1) The "net" amount requested reflects the principal amount of each discount loan reduced by the Balance Bank Discount as calculated by the Managing Administrative Agent after receiving this Pre-Funding Notice. Signed: COUNTRYWIDE HOME LOANS, INC. By:_________________________________________ Name:_______________________________________ Title:______________________________________ 5 la-531314 GLOSSARY EXHIBIT J ------------------ FORM OF

SUBSIDIARY GUARANTOR GUARANTY

__________________THIS SUBSIDIARY GUARANTOR GUARANTY (the “Guaranty”) is made and dated as of the ___ day of ____________, 200_ by _____________________________, a ________________________ (“Guarantor”).

RECITALS

__________________A._______Pursuant to that certain Revolving Credit Agreement dated as of December 17, 2001 among COUNTRYWIDE HOME LOANS, INC., a New York corporation (“Borrower”), the lenders named therein (the “Lenders”), Bank of America, N.A., as the managing administrative agent to the Lenders (in such capacity, the “Managing Administrative Agent”), the Administrative Agents, the Documentation Agent, the Co-Syndication Agents, and the Other Facility Agents (as amended and extended to date, the “Credit Agreement,” and with capitalized terms not otherwise defined herein used as defined in the Glossary attached to the Credit Agreement as Annex I), the Lenders party thereto agreed to extend credit to Borrower, on the terms and subject to the conditions set forth therein.

__________________B._______As a condition precedent to the effectiveness of the Credit Agreement, the Guarantor is required to execute and deliver this Guaranty to the Managing Administrative Agent for the benefit of the Lenders.

__________________NOW, THEREFORE, in consideration of the above Recitals and for other good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, Guarantor hereby agrees as follows:

AGREEMENT

__________________1._______Guarantor hereby irrevocably and unconditionally guarantees the payment when due, upon maturity, acceleration or otherwise, of the Obligations, whether heretofore, now, or hereafter made, incurred or created, whether voluntary or involuntary and however arising, absolute or contingent, liquidated or unliquidated, determined or undetermined, whether or not such Obligations are from time to time reduced, or extinguished and thereafter increased or incurred, whether Borrower may be liable individually or jointly with others, whether or not recovery upon such Obligations may be or hereafter become barred by any statute of limitations, and whether or not such Obligations may be or hereafter become otherwise invalid or unenforceable.

__________________2._______Guarantor irrevocably and unconditionally guarantees the payment of the Obligations whether or not due or payable by Borrower upon: (a) the dissolution, insolvency or business failure of, or any assignment for the benefit of creditors by, or commencement of any bankruptcy, reorganization, arrangement, moratorium or other debtor relief proceedings by or against, Borrower or Guarantor, or (b) the appointment of a receiver for, or the attachment, restraint of or making or levying of any order of court or legal process affecting, the property of Borrower or Guarantor, and unconditionally promises to pay such Obligations to the Managing Administrative Agent for the benefit of Lenders, or order, on demand, in lawful money of the United States.

__________________3._______The liability of Guarantor hereunder is exclusive and independent of any security for or other guaranty of the Obligations, whether executed by Guarantor or by any other party, and the liability of Guarantor hereunder is not affected or impaired by (a) any direction of application of payment by Borrower or by any other party, or (b) any other guaranty, undertaking or maximum liability of Guarantor or of any other party as to the Obligations, or (c) any payment on or in reduction of any such other guaranty or undertaking, or (d) any revocation or release of any obligations of any other guarantor of the Obligations, or (e) any dissolution, termination or increase, decrease or change in personnel of Guarantor, or (f) any payment made to Lenders or Managing Administrative Agent on the Obligations which any of such Persons repay to Borrower pursuant to court order in any bankruptcy, reorganization, arrangement, moratorium or other debtor relief proceeding, and Guarantor waives any right to the deferral or modification of Guarantor’s obligations hereunder by reason of any such proceeding.

__________________4._______(a) The obligations of Guarantor hereunder are independent of the Obligations of Borrower, and a separate action or actions may be brought and prosecuted against Guarantor whether or not action is brought against Borrower and whether or not Borrower is joined in any such action or actions. Guarantor waives, to the fullest extent permitted by law, the benefit of any statute of limitations affecting its liability hereunder or the enforcement thereof. Any payment by Borrower or other circumstance which operates to toll any statute of limitations as to Borrower shall operate to toll the statute of limitations as to Guarantor.

___________________________(b) All payments made by Guarantor under this Guaranty shall be made without set-off or counterclaim and free and clear of and without deductions for any present or future taxes, fees, withholdings or conditions of any nature (“Taxes”). Guarantor shall pay any such Taxes, including Taxes on any amounts so paid, and will promptly furnish each Lender with copies of any tax receipts or such other evidence of payment as Lenders or Managing Administrative Agent may require.

__________________5._______Guarantor authorizes Lenders and Managing Administrative Agent (whether or not after termination of this Guaranty), without notice or demand (except as shall be required by applicable statute and cannot be waived), and without affecting or impairing its liability hereunder, from time to time to (a) renew, compromise, extend, increase, accelerate or otherwise change the time for payment of, or otherwise change the terms of, Obligations or any part thereof, including increase or decrease of the rate of interest thereon; (b) take and hold security for the payment of this Guaranty or the Obligations and exchange, enforce, waive and release any such security; (c) apply such security and direct the order or manner of sale thereof as Lenders and Managing Administrative Agent in their discretion may determine; and (d) release or substitute any one or more endorsers, guarantors, Borrower or other obligors. Lenders and Managing Administrative Agent may without notice to or the further consent of Borrower or Guarantor assign this Guaranty in whole or in part to any person acquiring an interest in the Obligations.

__________________6._______It is not necessary for Lenders or Managing Administrative Agent to inquire into the capacity or power of Borrower or the officers acting or purporting to act on its behalf, and Obligations made or created in reliance upon the professed exercise of such powers shall be guaranteed hereunder.

__________________7._______Guarantor waives any right to require Lenders or Managing Administrative Agent to (a) proceed against Borrower or any other party; (b) proceed against or exhaust any security held from Borrower; or (c) pursue any other remedy in Lenders’ power whatsoever. Guarantor waives any personal defense based on or arising out of any personal defense of Borrower other than payment in full of the Obligations, including, without limitation, any defense based on or arising out of the disability of Borrower, or the invalidity or unenforceability of the Obligations or any part thereof from any cause, or the cessation from any cause of the liability of Borrower other than payment in full of the Obligations. Lenders and Managing Administrative Agent may, at their election, exercise any right or remedy Lenders or Managing Administrative Agent may have against Borrower, or any security, without affecting or impairing in any way the liability of Guarantor hereunder except to the extent the Obligations have been paid. Guarantor waives any defense arising out of any such election, even though such election operates to impair or extinguish any right of reimbursement or subrogation or other right or remedy of Guarantor against Borrower or any security. Guarantor hereby waives any claim or other rights which Guarantor may now have or may hereafter acquire against the Borrower or any other guarantor of all or any of the Obligations that arise from the existence or performance of the Guarantor’s obligations under this Guaranty or any other of the Credit Documents (all such claims and rights being referred to as the “Guarantor’s Conditional Rights”), including, without limitation, any right of subrogation, reimbursement, exoneration, contribution, or indemnification, or any right to participate in any claim or remedy which the Lenders or Managing Administrative Agent have against the Borrower or any collateral which the Lenders or Managing Administrative Agent have or thereafter acquire for the Obligations, whether or not such claim, remedy or right arises in equity or under contract, statute or common law, by any payment made hereunder or otherwise, including, without limitation, the right to take or receive from the Borrower, directly or indirectly, in cash or other property or setoff or in any other manner, payment or security on account of such claim or other rights. If, notwithstanding the foregoing provisions, any amount shall be paid to the Guarantor on account of the Guarantor’s Conditional Rights and either (a) such amount is paid to the Guarantor at any time when the Obligations shall not have been paid or performed in full, or (b) regardless of when such amount is paid to the Guarantor any payment made by Borrower to the Lenders or Managing Administrative Agent is at any time determined to be a preferential payment, then such amount paid to the Guarantor shall be deemed to be held in trust for the benefit of the Lenders or Managing Administrative Agent and shall forthwith be paid to the Lenders or Managing Administrative Agent to be credited and applied upon the Obligations, whether matured or unmatured, in such order and manner as the Lenders or Managing Administrative Agent shall determine. To the extent that any of the provisions of this Paragraph shall not be enforceable, the Guarantor agrees that until such time as the Obligations have been paid and performed in full and the period of time has expired during which any payment made by the Borrower or the Guarantor to the Lenders or Managing Administrative Agent may be determined to be a preferential payment, the Guarantor’s Conditional Rights to the extent not validly waived shall be subordinate to the Lenders’ or Managing Administrative Agent’s right to full payment and performance of the Obligations and the Guarantor shall not seek to enforce the Guarantor’s Conditional Rights during such period. Guarantor waives all presentments, demands for performance, protests and notices, including, without limitation, notices of nonperformance, notices of protest, notices of dishonor, notices of acceptance of this Guaranty, and notices of the existence, creation or incurring of new or additional Obligations. Guarantor assumes all responsibility for being and keeping itself informed of Borrower’s financial condition and assets, and of all other circumstances bearing upon the risk of nonpayment of the Obligations and the nature, scope and extent of the risks which Guarantor assumes and incurs hereunder, and agrees that neither Lenders nor Managing Administrative Agent shall have any duty to advise Guarantor of information known to any of them regarding such circumstances or risks.

__________________8._______In addition to the Obligations, Guarantor agrees to pay reasonable attorneys’ fees and all other costs and expenses incurred by Lenders and Managing Administrative Agent in enforcing this Guaranty in any action or proceeding arising out of, or relating to, this Guaranty. This Guaranty and the liability and obligations of Guarantor hereunder are binding upon Guarantor and its successors and assigns, and this Guaranty inures to the benefit of and is enforceable by Lenders and Managing Administrative Agent and their successors, transferees, and assigns.

__________________9._______No right or power of Lenders or Managing Administrative Agent hereunder shall be deemed to have been waived by any act or conduct on the part of such Persons, or by any neglect to exercise such right or power, or by any delay in so doing; and every right or power shall continue in full force and effect until specifically waived or released by an instrument in writing executed by Lenders and Managing Administrative Agent.

__________________10.______Guarantor agrees to execute any and all further documents, instruments and agreements as Managing Administrative Agent from time to time reasonably requests to evidence Guarantor's obligations hereunder.

__________________11.______Guarantor hereby confirms that all of the representations and warranties as to Guarantor set forth in Paragraph 8 of the Credit Agreement are accurate and complete and are incorporated herein by this reference.

__________________12.______This Guaranty shall be deemed to be made under and shall be governed by the laws of the State of California.

__________________13.______If any of the provisions of this Guaranty shall contravene or be held invalid under the laws of any jurisdiction, this Guaranty shall be construed as if not containing those provisions and the rights and obligations of the parties hereto shall be construed and enforced accordingly.

__________________Executed as of the day and year first above written.

                                                     --------------------------------------------,
                                                     a _____________________________________



                                                     By:    _______________________________________________________
                                                     Name:
                                                     Title: _______________________________________________________
                                                     Address:      __________________________
                                                                   --------------------------
                                                                   Attn:  _____________________

|la-527541|| 5 GLOSSARY EXHIBIT K ------------------ FORM OF

SUBSIDIARY GUARANTOR SUBORDINATION AGREEMENT

THIS SUBSIDIARY GUARANTOR SUBORDINATION AGREEMENT (the "Subordination Agreement") is made and dated as of the 17th day of December, 2001 by and among BANK OF AMERICA, N.A., as managing administrative agent for the "Lenders" from time to time party to the Credit Agreement referred to below (in such capacity, the "Managing Administrative Agent"), COUNTRYWIDE HOME LOANS, INC., a New York corporation ("Borrower"), and __________________________________________, a ___________________________ ("Creditor").

RECITALS

Pursuant to that certain Revolving Credit Agreement dated as of December 17, 2001 (as amended, extended or replaced from time to time, the "Credit Agreement," and capitalized terms not otherwise defined herein used with the meaning given such terms in the Glossary attached to the Credit Agreement as Annex I) by and among the Company, the Managing Administrative Agent, the Administrative agents, the - ------- Co-Syndication Agents, the Documentation Agent, the Other Facility Agents, and the Lenders from time to time party thereto, the Lenders have agreed to extend credit to Borrower on the terms and subject to the conditions set forth therein, including, without limitation, the condition that Creditor execute and deliver to Lenders: (a) a continuing guaranty of the Obligations of Borrower to Lenders under the Credit Documents, and (b) this Subordination Agreement. NOW, THEREFORE, in consideration of the above Recitals and for other good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, the parties hereto hereby agree as follows:

AGREEMENT

1._______Creditor has either extended and/or may in the future extend credit to Borrower from time to time. The principal of all now existing and hereafter arising Indebtedness of Borrower to Creditor together with accrued but unpaid interest thereon is hereinafter referred to as the "Claim". 2._______Creditor is the sole and absolute owner of the Claim and has not sold, assigned, transferred or otherwise disposed of any right it may have to repayment of the Claim or any security therefor. 3._______The Claim and all rights and remedies of Creditor with respect thereto and any lien securing payment thereof are and shall continue to be subject, subordinate and rendered junior in right of payment to the Obligations, as the same may be extended, amended or replaced from time to time; provided, however, that unless and until there shall occur an Event of Default or Potential Default under the Credit Agreement, Borrower may make and Creditor may receive payments on account of the Claim as follows: (a) interest accruing on the principal of all Indebtedness at a per annum rate not to exceed the pre-default rate of interest payable on account of Indebtedness of the Creditor the proceeds of which were lent by the Creditor to Borrower and constitute the "Indebtedness" of Borrower to the Creditor as to which such interest is being paid, and (b) principal outstanding on such Indebtedness. 4._______Unless and until the Obligations shall have been fully and indefeasibly paid and discharged in cash or cash equivalents and any agreement by Lenders to make further Loans to Borrower or otherwise extend credit to Borrower pursuant to the Credit Agreement shall have terminated, except as expressly permitted pursuant to Paragraph 3 above:

___________________________(a) Borrower will not make or give, and Creditor will not receive, directly or indirectly, any payment, advance, credit or further security of any kind whatsoever on account of the Claim, or any new or further evidence thereof;

___________________________(b) Creditor will not sell, assign, transfer, dispose of or endorse the Claim or any part or evidence thereof;

___________________________(c) Creditor will pay to Managing Administrative Agent for the pro rata benefit of Lenders in accordance with their respective Aggregate Percentage Shares promptly upon receipt, for application against the Obligations, any and all amounts which may be received by Creditor on account of the Claim in excess of amounts permitted under Paragraph 3 above and until such amounts are paid to Managing Administrative Agent the same shall be held in trust for the benefit of Lenders, segregated from other funds and property held by Creditor; and

___________________________(d) Creditor will not take, or permit any action to be taken, to assert, collect or enforce the Claim or any part thereof. 5._______Each of Borrower and Creditor waives notice of acceptance of this Subordination Agreement by Lenders and Managing Administrative Agent, and Creditor waives notice of and consents to the making, amount and terms of any loan or loans which any of Lenders or Managing Administrative Agent may from time to time make to Borrower and any renewal or extension thereof and any action which any of Lenders or Managing Administrative Agent in their sole and absolute discretion may take or omit to take with respect thereto. 6._______This Subordination Agreement shall constitute a continuing agreement of subordination and Lenders and Managing Administrative Agent may, from time to time and without notice to Creditor, lend money to or make other financial arrangements with Borrower in reliance hereon until written notice of termination shall be delivered by Creditor to the Managing Administrative Agent, by certified mail, return receipt requested. The receipt by the Managing Administrative Agent of such notice shall not affect this Subordination Agreement as it relates to any Obligations then existing, to any Obligations incurred thereafter pursuant to a previous commitment by Lenders or Managing Administrative Agent or to any amendments to, or extensions or renewals of, any such Obligations. 7._______Each of Creditor and Borrower acknowledges that the failure of Creditor or Borrower to observe or perform the terms and provisions hereof or the attempt by Creditor to rescind or revoke this Subordination Agreement shall constitute an Event of Default under the Credit Agreement and may result in acceleration of the Obligations. 8._______Creditor agrees as follows:

___________________________(a) Upon any distribution of the assets of Borrower to creditors of Borrower upon the dissolution, winding up, liquidation, arrangement, or reorganization of Borrower, whether in any bankruptcy, insolvency, arrangement, reorganization or receivership proceeding or upon an assignment for the benefit of creditors or any other marshalling of the assets and liabilities of Borrower or otherwise, any payment or distribution of any kind (whether in cash, property or securities) which otherwise would be payable or deliverable upon or with respect to the Claim shall be paid or delivered directly to Managing Administrative Agent for the benefit of Lenders for application (in the case of cash) to, or as collateral (in the case of non-cash property or securities) for, the payment or prepayment of the Obligations until the Obligations shall have been paid in full.

___________________________(b) If any proceeding referred to in subsection (a) above is commenced by or against Borrower: (1) Lenders and Managing Administrative Agent are hereby irrevocably

  authorized and empowered (in their own names or in the name of Creditor or otherwise), but shall have no obligation, to demand, sue for, collect and receive every payment or distribution referred to in subsection (a) above and give acquittance therefor and to file claims and proofs of claim and take such other action (including, without limitation, voting the Claim or enforcing any security interest or other lien securing payment of the Claim) as they may deem necessary or advisable for the exercise or enforcement of any of the rights or interests of Lenders hereunder; and

(2) Creditor shall duly and promptly take such action as Lenders and

Managing Administrative Agent may request (i) to collect the Claim for account of Lenders and to file appropriate claims or proofs of claim in respect of the Claim, (ii) to execute and deliver to Lenders and Managing Administrative Agent such powers of attorney, assignments, and other instruments as they may request in order to enable them to enforce any and all claims with respect to, and any security interests and other liens securing payment of, the Claim, and (iii) to collect and receive any and all payments or distributions which may be payable or deliverable upon or with respect to the Claim.

___________________________(c) All payments or distributions upon or with respect to the Claim which are received by Creditor contrary to the provisions of this Subordination Agreement shall be received in trust for the benefit of Lenders, shall be segregated from other funds and property held by Creditor and shall be forthwith paid over to Lenders, through the Managing Administrative Agent, in the same form as so received (with any necessary endorsement) to be applied (in the case of cash) to, or held as collateral (in the case of non-cash property or securities) for, the payment or prepayment of the Obligations.

___________________________(d) Lenders and Managing Administrative Agent are hereby authorized to demand specific performance of this Subordination Agreement, whether or not Borrower shall have complied with any or all of the provisions hereof applicable to it, at any time when the Creditor shall have failed to comply with any of the provisions of this Subordination Agreement applicable to it.

9._______It is the intent of Creditor to create by this Subordination Agreement a security interest in favor of Managing Administrative Agent for the benefit of Lenders in the Claim and in Creditor's rights to receive money or other property from Borrower on account thereof, whether such rights shall constitute accounts, contract rights, chattel paper, instruments, general intangibles or otherwise. Creditor hereby grants to Managing Administrative Agent and Lenders a security interest in the Claim and such rights of receipt in order to secure the payment and performance of the Creditor's obligations pursuant to this Subordination Agreement. 10.______Creditor authorizes Lenders and Managing Administrative Agent (whether or not after revocation of this Subordination Agreement), without notice or demand (except as shall be required by applicable statute and cannot be waived), and without affecting or impairing Creditor's obligations hereunder, from time to time to (a) renew, compromise, extend, increase, accelerate or otherwise change the time for payment of, or otherwise change the terms of, the Obligations or any part thereof, including without limitation to increase or decrease the rate of interest thereon; (b) take and hold security for the payment of the Obligations and exchange, enforce, waive and release any such security; (c) apply such security and direct the order or manner of sale thereof as Lenders and Managing Administrative Agent in their sole discretion may determine; and (d) release and substitute any one or more endorsers, warrantors, Borrower or other obligors. Lenders and Managing Administrative Agent may without notice to or the further consent of Borrower or Creditor assign this Subordination Agreement in whole or in part to any Person acquiring an interest in the Obligations. 11.______This Subordination Agreement shall extend to and be binding upon the successors and assigns of each of the parties hereto. 12.______This Subordination Agreement may be executed in any number of counterparts all of which taken together shall constitute one agreement and any party hereto may execute this Subordination Agreement by signing any such counterpart. 13.______This Subordination Agreement shall be governed by and construed in accordance with the laws of the State of California without giving effect to its choice of law rules. [Signature page following] Executed as of the day and year first above written.

                                                     -----------------------------------,
                                                     a _______________________


                                                     By:
                                                         -------------------------------------------------
                                                     Name:
                                                           -----------------------------------------------
                                                     Title:
                                                            ----------------------------------------------


                                                     COUNTRYWIDE HOME LOANS, INC.,
                                                     a New York corporation


                                                     By:
                                                         -------------------------------------------------
                                                     Name:
                                                           -----------------------------------------------
                                                     Title:
                                                            ----------------------------------------------


                                                     BANK OF AMERICA, N.A., as Managing Administrative Agent


                                                     By:
                                                        --------------------------------------------------
                                                     Name:
                                                          ------------------------------------------------
                                                     Title:
                                                           -----------------------------------------------

EX-10

THIRD AMENDMENT
TO
COUNTRYWIDE CREDIT INDUSTRIES, INC.
SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN
Originally Effective March 1, 1994
Amended Effective September 13, 1996
Amended and Restated Effective July 1, 1998

        Countrywide Credit Industries, Inc., a Delaware corporation (the “Company”), pursuant to the power granted to it by Section 5.2 of the Countrywide Credit Industries, Inc. Supplemental Executive Retirement Plan, 1998 Amendment and Restatement (the “Plan”), hereby amends the Plan to comply with Rules and Regulations for Administration and Enforcement; Claims Procedures, issued by the Department of Labor, effective January 1, 2002.

         Article 8, Claims Procedures, is deleted and new Article 8 is inserted in its place as follows:

         Article 8
Claims Procedures

8.1 Presentation of Claim. Any Participant or Beneficiary of a deceased Participant (such Participant or Beneficiary being referred to below as a “Claimant”) may deliver to the Committee a written claim for a determination with respect to the amounts distributable to such Claimant from the Plan. If such a claim relates to the contents of a notice received by the Claimant, the claim must be made within 60 days after such notice was received by the Claimant. All other claims must be made within 180 days of the date on which the event that caused the claim to arise occurred. The claim must state with particularity the determination desired by the Claimant.

8.2 Notification of Decision. The Committee shall consider a Claimant’s claim within a reasonable time; provided, that claims based on Disability shall be considered within 45 days, unless, within such time, the Committee notifies the Claimant in writing that a 30-day extension is required pursuant to Labor Regulation 2560.503-1. Once a decision is made, the Committee shall notify the Claimant in writing:

(a)   that the Claimant's requested determination has been made, and that the claim has been allowed in full; or

(b)   that the Committee has reached a conclusion contrary, in whole or in part, to the Claimant’s requested determination, and such notice must set forth in a manner calculated to the understood by the Claimant:

(i)   the specific reason(s) for the denial of the claim, or any part of it;

(ii)   the specific reference(s) to pertinent provisions of the Plan upon which such denial was based;

(iii)   a description of any additional material or information necessary for the Claimant to perfect the claim, and an explanation of why such material or information is necessary; and

(iv)   an explanation of the claim review procedure set forth in Section 8.3 below, including Claimants right to bring a civil action as described in Section 8.5

8.3 Review of a Denied Claim. Within 60 days (180 days for a claim based on Disability) after receiving a notice from the Committee that a claim has been denied, in whole or in part, a Claimant (or the Claimant’s’ duly authorized representative) may file with the Committee a written request for a review of the denial of the claim. Therefore, but not later than 30 days after the review procedure began, the Claimant (or the Claimant’s duly authorized representative):

(a)   may review pertinent documents;

(b)   may submit written comments or other documents; and/or

(c)   may request a hearing, which the Committee, in its sole discretion, may grant.

8.4 Decision on Review. The Committee shall render its decision on review promptly, and not later than 60 days (45 days for a claim based on Disability) after the filing of a written request for review of the denial, unless a hearing is held or other special circumstances require additional time, in which case the Committee’s decision must be rendered within 120 days after such date; provided, that this period shall be up to one 45-day extension for claims based on Disability. Such decision must be written in a manner calculated to be understood by the Claimant, and it must contain:

(a)   specific reasons for the decision;

(b)   specific reference(s) to the pertinent Plan provisions upon which the decision was based; and

(c)   such other matters as the Committee deems relevant.

8.5 Legal Action. A Claimant's compliance with the foregoing provisions of this Article 8 is a mandatory prerequisite to a Claimant's right to commence any legal action with respect to any claim for benefits under this Plan.

         The Company has caused this Amendment to be signed by its duly authorized officer as of the date written below:

Countrywide Credit Industries, Inc.

By: ------------------------------------------------

          Anne D. McCallion
          Managing Director
          Chief Administrative Officer

Date: ----------------------------------------------

EX-12

COUNTRYWIDE CREDIT INDUSTRIES, INC. AND SUBSIDIARIESEXHIBIT
12.1 - COMPUTATION OF THE RATIO OF EARNINGS TO FIXED CHARGES
(Dollar amounts in thousands)

The following table sets forth the ratio of earnings to fixed charges of the Company for the nine months ended November 30, 2001 and for the five fiscal years ended February 28, 2001 computed by dividing net fixed charges (interest expense on all debt plus the interest element (one-third) of operating leases) into earnings (income before income taxes and fixed charges).

                                         Nine months ended
                                           November 30,                             Fiscal Years Ended February 28(29),
                                    ------------------------------  ------------------------------------------------------------------------------
                                         2001           2000            2001            2000             1999            1998           1997
                                    --------------- --------------  -------------  ---------------  --------------- --------------- --------------
Net earnings                           $  433,295      $  269,907        $374,153        $410,243         $385,401       $344,983        $257,358
Income tax expense                        259,064         152,860         211,882         220,955          246,404        220,563         164,540
Interest charges                        1,333,914         954,311       1,348,242         922,225          977,326        564,640         418,682
Interest portion of rental
  Expense                                  14,336          13,118          17,745          19,080           14,898         10,055           7,420
                                    --------------- --------------  ------------------------------  --------------- --------------- --------------

Earnings available to cover
  fixed charges                      $2,040,609        $1,390,196    $1,952,022        $1,572,503       $1,624,029     $1,140,241        $848,000
                                    =============== ==============  =============  ===============  =============== =============== ==============

Fixed charges
  Interest charges                     $1,333,914        $954,311      $1,348,242        $922,225         $977,326       $564,640        $418,682
  Interest portion of rental
    Expense                                14,336          13,118          17,745          19,080           14,898         10,055           7,420
                                    --------------- --------------  -------------  ---------------  --------------- --------------- --------------

      Total fixed charges              $1,348,250        $967,429      $1,365,987        $941,305         $992,224       $574,695        $426,102
                                    =============== ==============  =============  ===============  =============== =============== ==============

Ratio of earnings to fixed
  Charges                                 1.51            1.44            1.43           1.67             1.64            1.98            1.99
                                    =============== ==============  =============  ===============  =============== =============== ==============