<PAGE>



                         UNAFFILIATED SELLER'S AGREEMENT

                          dated as of December 1, 1999

                                  by and among



              PRUDENTIAL SECURITIES SECURED FINANCING CORPORATION,
                                  as Depositor,



                               ABFS 1999-4, INC.,
                             as Unaffiliated Seller



                                       and



                         AMERICAN BUSINESS CREDIT, INC.,
              HOMEAMERICAN CREDIT, INC., D/B/A UPLAND MORTGAGE, and
                    NEW JERSEY MORTGAGE AND INVESTMENT CORP.,
                                 as Originators



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                              TABLE OF CONTENTS

                                                                            Page



Article I DEFINITIONS........................................................1

  Section 1.01 Definitions...................................................1


Article II PURCHASE, SALE AND CONVEYANCE OF MORTGAGE LOANS...................3

  Section 2.01 Agreement to Purchase the Initial Mortgage Loans..............3
  Section 2.02 Agreement to Purchase the Subsequent Mortgage Loans...........3
  Section 2.03 Purchase Price................................................4
  Section 2.04 Conveyance of Mortgage Loans; Possession of Mortgage Files....4
  Section 2.05 Delivery of Mortgage Loan Documents...........................5
  Section 2.06 Acceptance of Mortgage Loans..................................6
  Section 2.07 Transfer of Mortgage Loans; Assignment of Agreement...........7
  Section 2.08 Examination of Mortgage Files.................................7
  Section 2.09 Books and Records.............................................8
  Section 2.10 Cost of Delivery and Recordation of Documents.................8


Article III REPRESENTATIONS AND WARRANTIES...................................8

  Section 3.01 Representations and Warranties as to the Originators..........8
  Section 3.02 Representations and Warranties as to the Unaffiliated
               Seller.......................................................11
  Section 3.03 Representations and Warranties Relating to the Mortgage
               Loans........................................................13
  Section 3.04 Representations and Warranties of the Depositor..............25
  Section 3.05 Repurchase Obligation for Defective Documentation and for
               Breach of a Representation or Warranty.......................26


Article IV THE UNAFFILIATED SELLER..........................................28

  Section 4.01 Covenants of the Originators and the Unaffiliated Seller.....28
  Section 4.02 Merger or Consolidation......................................29
  Section 4.03 Costs........................................................29
  Section 4.04 Indemnification..............................................30


Article V CONDITIONS OF CLOSING.............................................32

  Section 5.01 Conditions of Depositor's Obligations........................32
  Section 5.02 Conditions of Unaffiliated Seller's Obligations..............34
  Section 5.03 Termination of Depositor's Obligations.......................35


Article VI MISCELLANEOUS....................................................35

  Section 6.01 Notices......................................................35
  Section 6.02 Severability of Provisions...................................36


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                                                                           Page


  Section 6.03 Agreement of Unaffiliated Seller.............................36
  Section 6.04 Survival.....................................................36
  Section 6.05 Effect of Headings and Table of Contents.....................36
  Section 6.06 Successors and Assigns.......................................36
  Section 6.07 Confirmation of Intent; Grant of Security Interest...........36
  Section 6.08 Miscellaneous................................................37
  Section 6.09 Amendments...................................................37
  Section 6.10 Third-Party Beneficiaries....................................38
  Section 6.11 GOVERNING LAW; CONSENT TO JURISDICTION; WAIVER OF
               JURY TRIAL...................................................38
  Section 6.12 Execution in Counterparts....................................39

                            SCHEDULES AND EXHIBITS

Schedule I - Mortgage Loan Schedule

Exhibit A - Form of Subsequent Transfer Agreement


                                       ii

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         This UNAFFILIATED SELLER'S AGREEMENT, dated as of December 1, 1999
(this "Agreement"), by and among PRUDENTIAL SECURITIES SECURED FINANCING
CORPORATION, a Delaware corporation, (the "Depositor"), ABFS 1999-4, INC., a
Delaware corporation (the "Unaffiliated Seller"), AMERICAN BUSINESS CREDIT,
INC., a Pennsylvania corporation ("ABC"), HOMEAMERICAN CREDIT, INC. D/B/A UPLAND
MORTGAGE, a Pennsylvania corporation ("Upland") and NEW JERSEY MORTGAGE AND
INVESTMENT CORP., a New Jersey corporation ("NJMIC", and together with ABC and
Upland, the "Originators").

                             W I T N E S S E T H:

         WHEREAS, Schedule I attached hereto and made a part hereof lists
certain fixed rate business purpose loans and consumer purpose first and second
lien mortgage loans (the "Mortgage Loans") owned by the Originators that the
Originators desire to sell to the Unaffiliated Seller, the Unaffiliated Seller
desires to sell to the Depositor and that the Depositor desires to purchase; and

         WHEREAS, it is the intention of the Originators, the Unaffiliated
Seller and the Depositor that simultaneously with the Originators' conveyance of
the Mortgage Loans to the Unaffiliated Seller and the Unaffiliated Seller's
conveyance of the Mortgage Loans to the Depositor on the Closing Date, (a) the
Depositor shall sell the Mortgage Loans to the ABFS Mortgage Loan Trust 1999-4,
a Delaware statutory business trust (the "Trust") pursuant to a Sale and
Servicing Agreement to be dated as of December 1, 1999 (the "Sale and Servicing
Agreement"), to be entered into by and among the Depositor, as depositor, the
Trust, as issuer, ABC, as servicer (in such capacity, the "Servicer"), Chase
Bank of Texas, N.A., a national banking association, as collateral agent (the
"Collateral Agent"), and The Bank of New York, a New York banking corporation,
as indenture trustee (the "Indenture Trustee"), and (b) the Trust shall issue
its Mortgage Backed Notes (the "Notes"), pursuant to an Indenture, to be dated
as of December 1, 1999 (the "Indenture"), by and between the Trust and the
Indenture Trustee, which Notes will be secured by a pledge of the assets of the
Trust.

         NOW, THEREFORE, in consideration of the premises and the mutual
agreements hereinafter set forth, the parties hereto agree as follows:

                                    ARTICLE I

                                   DEFINITIONS

         Section 1.01 Definitions. (a) Whenever used herein, the following words
and phrases, unless the context otherwise requires, shall have the meanings
specified in this Article I:

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

         "Prospectus" means the Prospectus dated June 23, 1999 relating to the
offering by the Depositor from time to time of its Mortgage Backed Notes
(Issuable in Series) in the form in which it was or will be filed with the
Commission pursuant to Rule 424(b) under the Securities Act with respect to the
offer and sale of the Notes.




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         "Prospectus Supplement" means the Prospectus Supplement dated December
1, 1999, relating to the offering of the Notes in the form in which it was or
will be filed with the Commission pursuant to Rule 424(b) under the Securities
Act with respect to the offer and sale of the Notes.

         "Registration Statement" means that certain registration statement on
Form S-3, as amended (Registration No. 333-75489) relating to the offering by
the Depositor from time to time of its Mortgage Backed Notes (Issuable in
Series) as heretofore declared effective by the Commission.

         "Securities Act" means the Securities Act of 1933, as amended.

         "Termination Event" means the existence of any one or more of the
following conditions:

                  (a) a stop order suspending the effectiveness of the
         Registration Statement shall have been issued or a proceeding for that
         purpose shall have been initiated or threatened by the Commission; or

                  (b) subsequent to the execution and delivery of this
         Agreement, a downgrading, or public notification of a possible change,
         without indication of direction, shall have occurred in the rating
         afforded any of the debt securities or claims paying ability of any
         person providing any form of credit enhancement for any of the Notes,
         by any "nationally recognized statistical rating organization," as that
         term is defined by the Commission for purposes of Rule 436(g)(2) under
         the Securities Act; or

                  (c) subsequent to the execution and delivery of this
         Agreement, there shall have occurred an adverse change in the
         condition, financial or otherwise, earnings, affairs, regulatory
         situation or business prospects of the Note Insurer or the Unaffiliated
         Seller reasonably determined by the Depositor to be material; or

                  (d) subsequent to the date of this Agreement there shall have
         occurred any of the following: (i) a suspension or material limitation
         in trading in securities substantially similar to the Notes; (ii) a
         general moratorium on commercial banking activities in the State of New
         York declared by either Federal or New York State authorities; or (iii)
         the engagement by the United States in hostilities, or the escalation
         of such hostilities, or any calamity or crisis, if the effect of any
         such event specified in this clause (iii) in the reasonable judgment of
         the Depositor makes it impracticable or inadvisable to proceed with the
         public offering or the delivery of the Notes on the terms and in the
         manner contemplated in the Prospectus Supplement.

         (b) Capitalized terms used herein that are not otherwise defined shall
have the respective meanings ascribed thereto in Appendix I to the Indenture.


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                                   ARTICLE II

                 PURCHASE, SALE AND CONVEYANCE OF MORTGAGE LOANS

         Section 2.01 Agreement to Purchase the Initial Mortgage Loans. (a)
Subject to the terms and conditions of this Agreement, the Originators agree to
sell, and the Unaffiliated Seller agrees to purchase on the Closing Date and
immediately subsequent thereto, the Unaffiliated Seller agrees to sell, and the
Depositor agrees to purchase, the Mortgage Loans having the Cut-Off Date
Aggregate Principal Balance or, in accordance with Section 2.08 hereof, such
other balance as is evidenced by the actual Cut-Off Date Aggregate Principal
Balance of the Mortgage Loans accepted by the Depositor on the Closing Date and
listed in the Mortgage Loan Schedule.

         (b) Subject to Section 2.08 hereof, the Depositor and the Unaffiliated
Seller have agreed upon which of the Unaffiliated Seller's Mortgage Loans are to
be purchased by the Depositor on the Closing Date pursuant to this Agreement,
and the Unaffiliated Seller has prepared a schedule describing the Mortgage
Loans (the "Mortgage Loan Schedule") setting forth all of the Mortgage Loans to
be purchased under this Agreement, which Mortgage Loan Schedule is attached
hereto as Schedule I. The Mortgage Loan Schedule shall conform to the
requirements of the Depositor and to the definition of "Mortgage Loan Schedule"
in Appendix I to the Indenture.

         (c) The closing for the purchase and sale of the Mortgage Loans shall
take place at the offices of Dewey Ballantine LLP, New York, New York, at 10:00
a.m., New York, New York time, on the Closing Date, or such other place and time
as the parties shall agree.

         Section 2.02 Agreement to Purchase the Subsequent Mortgage Loans. (a)
Subject to the satisfaction of the conditions set forth in Section 2.14(b) of
the Indenture, (i) in consideration of the Unaffiliated Seller's delivery on the
related Subsequent Transfer Dates to or upon the order of the Originators of all
or a portion of the balance of funds on deposit in the Pre-Funding Accounts, the
Originators shall on any Subsequent Transfer Date sell, transfer, assign, set
over and convey to the Unaffiliated Seller, without recourse, but subject to the
terms and provisions of this Agreement, all of the right, title and interest of
the Originators in and to the Subsequent Mortgage Loans, including all principal
of, and all interest due on, such Subsequent Mortgage Loans, and all other
assets included or to be included in the Trust Estate and (ii) in consideration
of the Depositor's delivery on the related Subsequent Transfer Dates to or upon
the order of the Unaffiliated Seller of all or a portion of the balance of funds
on deposit in the Pre-Funding Accounts, the Unaffiliated Seller shall on any
Subsequent Transfer Date sell, transfer, assign, set over and convey to the
Depositor, without recourse, but subject to the terms and provisions of this
Agreement, all of the right, title and interest of the Unaffiliated Seller in
and to the Subsequent Mortgage Loans, including all principal of, and all
interest due on, such Subsequent Mortgage Loans, and all other assets included
or to be included in the Trust Estate.

         The amount released from a Pre-Funding Account with respect to a
transfer of Subsequent Mortgage Loans to the related Pool shall be one-hundred
percent (100%) of the Aggregate Principal Balance of such Subsequent Mortgage
Loans so transferred, as of the related Subsequent Cut-Off Date.


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            The obligation of the Depositor to purchase a Subsequent Mortgage
Loan on any Subsequent Transfer Date is subject to the satisfaction of the
requirements set forth in Section 2.14(b) of the Indenture.

         Section 2.03 Purchase Price. (a) On the Closing Date, as consideration
for the Originators' sale of the Initial Mortgage Loans to the Unaffiliated
Seller, the Unaffiliated Seller will deliver to the Originators an amount in
cash equal to the sum of (A) 99.70%, 98.7625% and 99.70% of the Original Note
Principal Balance as of the Closing Date of the Class A-1 Notes, Class A-2 Notes
and Class A-3 Notes, respectively, plus (B) accrued interest on the Original
Note Principal Balance of the Class A-1 Notes and Class A-2 Notes at the rate of
7.675% and 7.200% per annum, respectively, from (and including) December 1, 1999
to (but not including) the Closing Date, minus (C) the Original Pre-Funded
Amount and the Original Capitalized Interest Amount for each Class of Notes,
payable by wire transfer of same day funds.

         On the Closing Date, as full consideration for the Unaffiliated
Seller's sale of the Initial Mortgage Loans to the Depositor, the Depositor will
deliver to, or at the direction of, the Unaffiliated Seller (i) an amount in
cash equal to the sum of (A) 99.70%, 98.7625% and 99.70% of the Original Note
Principal Balance as of the Closing Date of the Class A-1 Notes, Class A-2 Notes
and Class A-3 Notes, respectively, plus (B) accrued interest on the Original
Note Principal Balance of the Class A-1 Notes and Class A-2 Notes at the rate of
7.675% and 7.200% per annum, respectively, from (and including) December 1, 1999
to (but not including) the Closing Date, minus (C) the Original Pre-Funded
Amount and the Original Capitalized Interest Amount for each Class of Notes,
payable by wire transfer of same day funds, and (ii) the Trust Certificates to
be issued pursuant to the Trust Agreement.

         (b) On each Subsequent Transfer Date, as full consideration for the
Originators' sale of the Subsequent Mortgage Loans to the Unaffiliated Seller
and the Unaffiliated Seller's sale of the Subsequent Mortgage Loans to the
Depositor, the Depositor will deliver to the Unaffiliated Seller and the
Unaffiliated Seller will deliver to the Originators an amount in cash equal to
the sum of 100% of the Aggregate Principal Balance of the Subsequent Mortgage
Loans of the related Pool as of the related Subsequent Cut-Off Date.

         Section 2.04 Conveyance of Mortgage Loans; Possession of Mortgage
Files. (a) On the Closing Date and on each Subsequent Transfer Date, the
Originators shall sell, transfer, assign, set over and convey to the
Unaffiliated Seller, without recourse, but subject to the terms of this
Agreement, all right, title and interest in and to the applicable Mortgage
Loans, including all principal outstanding as of, and all interest due after,
the related Cut-Off Date, the Insurance Policies relating to each such Mortgage
Loan and all right, title and interest in and to the proceeds of such Insurance
Policies and all of its rights under this Agreement with respect to the Mortgage
Loans from and after the related Cut-Off Date or the Subsequent Cut-Off Date, as
applicable, and the Unaffiliated Seller shall sell, transfer, assign, set over
and convey to the Depositor, without recourse, but subject to the terms of this
Agreement, all right, title and interest in and to the applicable Mortgage
Loans, including all principal outstanding as of, and all interest due after,
the related Cut-Off Date, the Insurance Policies relating to each such Mortgage
Loan, all right, title and interest in and to the proceeds of such Insurance
Policies and all of its rights under this Agreement with respect to the Mortgage
Loans from and after the related Cut-Off Date or the Subsequent Cut-Off Date, as
applicable. Upon payment of the purchase price for


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such Mortgage Loans as provided in Section 2.03 of this Agreement, the
Originators and the Unaffiliated Seller shall have hereby, and shall be deemed
to have, sold, transferred, assigned, set over and conveyed to the Depositor
such Mortgage Loans, the Insurance Policies relating to each such Mortgage Loan,
all right, title and interest in and to the proceeds of such Insurance Policies
and all of its rights under this Agreement with respect to the Mortgage Loans
from and after the related Cut-Off Date or the Subsequent Cut-Off Date, as
applicable.

         (b) Upon the sale of such Mortgage Loans, the ownership of each related
Mortgage Note, each related Mortgage and the contents of the related Mortgage
File shall immediately vest in the Depositor and the ownership of all related
records and documents with respect to each Mortgage Loan prepared by or which
come into the possession of the Originators or the Unaffiliated Seller shall
immediately vest in the Depositor. The contents of any Indenture Trustee's
Mortgage File in the possession of the Originators or the Unaffiliated Seller at
any time after such sale, and any principal collected and interest due on the
Mortgage Loans after the related Cut-Off Date and received by the Originators or
the Unaffiliated Seller, shall be held in trust by the Originators or the
Unaffiliated Seller for the benefit of the Depositor as the owner thereof, and
shall be promptly delivered by the Originators or the Unaffiliated Seller to or
upon the order of the Depositor.

         (c) Pursuant to the Sale and Servicing Agreement, the Depositor shall,
on the Closing Date, assign all of its right, title and interest in and to the
Initial Mortgage Loans to the Trust. Pursuant to the Indenture, the Trust shall,
on the Closing Date, pledge all of its right, title and interest in and to the
Initial Mortgage Loans to the Indenture Trustee, for the benefit of the
Noteholders and the Note Insurer.

         Section 2.05 Delivery of Mortgage Loan Documents. (a) On or prior to
the Closing Date or Subsequent Transfer Date, as applicable, the related
Originator shall deliver to the Unaffiliated Seller, and the Unaffiliated Seller
shall deliver to the Collateral Agent, on behalf of the Indenture Trustee (as
pledgee of the Trust pursuant to the Indenture, the Trust being the assignee of
the Depositor pursuant to the Sale and Servicing Agreement), each of the
documents for each applicable Mortgage Loan in accordance with the provisions of
Section 2.05 of the Sale and Servicing Agreement.

         (b) As promptly as practicable, but in any event within thirty (30)
days from the Closing Date or the Subsequent Transfer Date, as applicable, the
Unaffiliated Seller shall promptly submit, or cause to be submitted by the
related Originator, for recording in the appropriate public office for real
property records, each assignment referred to in Section 2.05(a)(iv) of the Sale
and Servicing Agreement. The Collateral Agent, on behalf of the Indenture
Trustee, shall be required to retain a copy of each assignment submitted for
recording. In the event that any such assignment is lost or returned unrecorded
because of a defect therein, the Unaffiliated Seller or such Originator shall
promptly prepare a substitute assignment or cure such defect, as the case may
be, and thereafter the Unaffiliated Seller or such Originator shall submit each
such assignment for recording.

         (c) The Unaffiliated Seller or the related Originator shall, within
five (5) Business Days after the receipt thereof, deliver or cause to be
delivered to the Collateral Agent, on behalf of the Indenture Trustee (as
pledgee of the Trust pursuant to the Indenture, the Trust


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being the assignee of the Depositor pursuant to the Sale and Servicing
Agreement): (i) the original recorded Mortgage and related power of attorney, if
any, in those instances where a copy thereof certified by the related Originator
was delivered to the Collateral Agent, on behalf of the Indenture Trustee,
pursuant to Section 2.05 of the Sale and Servicing Agreement; (ii) the original
recorded assignment of Mortgage from the related Originator to the Indenture
Trustee, which, together with any intervening assignments of Mortgage, evidences
a complete chain of assignment from the originator of the Mortgage Loan to the
Indenture Trustee in those instances where copies of such assignments certified
by the related Originator were delivered to the Collateral Agent, on behalf of
the Indenture Trustee, pursuant to Section 2.05 of the Sale and Servicing
Agreement; and (iii) the title insurance policy or title opinion required in
Section 2.05(a)(vi) of the Sale and Servicing Agreement.

         Notwithstanding anything to the contrary contained in this Section
2.05, in those instances where the public recording office retains the original
Mortgage, power of attorney, if any, assignment or assignment of Mortgage after
it has been recorded or such original has been lost, the Unaffiliated Seller or
the related Originator shall be deemed to have satisfied its obligations
hereunder upon delivery to the Collateral Agent, on behalf of the Indenture
Trustee, of a copy of such Mortgage, power of attorney, if any, assignment or
assignment of Mortgage certified by the public recording office to be a true
copy of the recorded original thereof.

         From time to time the Unaffiliated Seller or the related Originator may
forward or cause to be forwarded to the Collateral Agent, on behalf of the
Indenture Trustee, additional original documents evidencing an assumption or
modification of a Mortgage Loan.

         (d) All original documents relating to the Mortgage Loans that are not
delivered to the Collateral Agent, on behalf of the Indenture Trustee, as
permitted by Section 2.05(a) hereof are and shall be held by the Servicer, the
Unaffiliated Seller or the related Originator in trust for the benefit of the
Indenture Trustee, on behalf of the Noteholders and the Note Insurer. In the
event that any such original document is required pursuant to the terms of this
Section 2.05 to be a part of an Indenture Trustee's Mortgage File, such document
shall be delivered promptly to the Collateral Agent, on behalf of the Indenture
Trustee. From and after the sale of the Mortgage Loans to the Depositor pursuant
hereto, to the extent that the Unaffiliated Seller or the related Originator
retains legal title of record to any Mortgage Loans prior to the vesting of
legal title in the Indenture Trustee, such title shall be retained in trust for
the Trust as the owner of the Mortgage Loans, as the Depositor's assignee, and
the Indenture Trustee, as the Trust's pledgee.

         Section 2.06 Acceptance of Mortgage Loans. (a) To evidence the transfer
of the Mortgage Loans and related Mortgage Files to the Collateral Agent, on
behalf of the Indenture Trustee, the Collateral Agent shall deliver the
acknowledgement of receipt, the Initial Certification and the Final
Certification required to be delivered pursuant to Section 2.06(b) of the Sale
and Servicing Agreement.

         (b) The Sale and Servicing Agreement provides that, if the Collateral
Agent during the process of reviewing the Indenture Trustee's Mortgage Files,
finds any document constituting a part of an Indenture Trustee's Mortgage File
which is not executed, has not been received, is unrelated to the Mortgage Loan
identified in the Mortgage Loan Schedule, or does


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not conform to the requirements of Section 2.05 of the Sale and Servicing
Agreement or the description thereof as set forth in the Mortgage Loan Schedule,
the Collateral Agent shall promptly so notify the Servicer, the Unaffiliated
Seller, the Indenture Trustee, the related Originator and the Note Insurer. The
Unaffiliated Seller and the Originators agree that in performing any such
review, the Collateral Agent may conclusively rely on the Unaffiliated Seller
and the Originators as to the purported genuineness of any such document and any
signature thereon. Each of the Originators and the Unaffiliated Seller agrees to
use reasonable efforts to remedy a material defect in a document constituting
part of an Indenture Trustee's Mortgage File of which it is notified. If,
however, within sixty (60) days after such notice neither the Unaffiliated
Seller nor any Originator has remedied the defect and the defect materially and
adversely affects the interest of the Noteholders in the related Mortgage Loan
or the interests of the Note Insurer, then the Unaffiliated Seller and the
Originators shall be obligated to either substitute in lieu of such Mortgage
Loan a Qualified Substitute Mortgage Loan or purchase such Mortgage Loan in the
manner and subject to the conditions set forth in Section 3.05 hereof.

         (c) The failure of the Collateral Agent, the Indenture Trustee or the
Note Insurer to give any notice contemplated herein within the time periods
specified above shall not affect or relieve the Unaffiliated Seller's or the
Originators obligation to repurchase for any Mortgage Loan pursuant to this
Section 2.06 or Section 3.05 of this Agreement.

         Section 2.07 Transfer of Mortgage Loans; Assignment of Agreement. The
Originators and the Unaffiliated Seller each hereby acknowledges and agrees that
the Depositor or the Trust may assign its interest under this Agreement to the
Indenture Trustee as may be required to effect the purposes of the Indenture and
the Sale and Servicing Agreement, without further notice to, or consent of, the
Unaffiliated Seller or the Originators, and the Indenture Trustee shall succeed
to such of the rights and obligations of the Depositor and the Trust hereunder
as shall be so assigned. The Depositor shall, pursuant to the Sale and Servicing
Agreement, assign all of its right, title and interest in and to the Mortgage
Loans and its right to exercise the remedies created by Sections 2.06 and 3.05
hereof for breaches of the representations, warranties, agreements and covenants
of the Unaffiliated Seller or the Originators contained in Sections 2.05, 2.06,
3.02 and 3.03 hereof to the Trust, and the Trust shall, pursuant to the
Indenture, pledge such right, title and interest to the Indenture Trustee, for
the benefit of the Noteholders and the Note Insurer. Each of the Originators and
the Unaffiliated Seller agrees that, upon such assignment to the Trust and
pledge to the Indenture Trustee, such representations, warranties, agreements
and covenants will run to and be for the benefit of the Indenture Trustee and
the Indenture Trustee may enforce, without joinder of the Depositor or the
Trust, the repurchase obligations of the Unaffiliated Seller and the Originators
set forth herein with respect to breaches of such representations, warranties,
agreements and covenants.

         Section 2.08 Examination of Mortgage Files. Prior to the Closing Date
and each Subsequent Transfer Date, as applicable, the Unaffiliated Seller shall
make the Mortgage Files available to the Depositor or its designee for
examination at the Unaffiliated Seller's offices or at such other place as the
Unaffiliated Seller shall reasonably specify. Such examination may be made by
the Depositor or its designee at any time on or before the Closing Date or
Subsequent Transfer Date, as the case may be. If the Depositor or its designee
makes such examination prior to the Closing Date or Subsequent Transfer Date, as
the case may be, and


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identifies any Mortgage Loans that do not conform to the requirements of the
Depositor as described in this Agreement, such Mortgage Loans shall be deleted
from the Mortgage Loan Schedule and may be replaced, prior to the Closing Date
or Subsequent Transfer Date, as the case may be, by substitute Mortgage Loans
acceptable to the Depositor. The Depositor may, at its option and without notice
to the Unaffiliated Seller, purchase all or part of the Mortgage Loans without
conducting any partial or complete examination. The fact that the Depositor, the
Collateral Agent or the Indenture Trustee has conducted or has failed to conduct
any partial or complete examination of the Mortgage Files shall not affect the
rights of the Depositor or the Indenture Trustee to demand repurchase or other
relief as provided in this Agreement.

         Section 2.09 Books and Records. The transfer of each Mortgage Loan
shall be reflected on each of the Originators' and the Unaffiliated Seller's
accounting and other records, balance sheet and other financial statements as a
sale of assets by the Originators to the Unaffiliated Seller, by the
Unaffiliated Seller to the Depositor and by the Depositor to the Trust;
provided, that the Unaffiliated Seller's tax returns shall not reflect the
transfer from the Unaffiliated Seller to the Depositor and from the Depositor to
the Trust as a sale of the Mortgage Loans. Each of the Originators and the
Unaffiliated Seller shall be responsible for maintaining, and shall maintain, a
complete set of books and records for each Mortgage Loan which shall be clearly
marked to reflect the ownership of each Mortgage Loan by the Trust, and the
pledge of each Mortgage Loan by the Trust to the Indenture Trustee, for the
benefit of the Noteholders and the Note Insurer.

         Section 2.10 Cost of Delivery and Recordation of Documents. The costs
relating to the delivery and recordation of the documents in connection with the
Mortgage Loans as specified in this Article II and in Article II of the Sale and
Servicing Agreement shall be borne by the Unaffiliated Seller or the
Originators.

                                  ARTICLE III

                         REPRESENTATIONS AND WARRANTIES

         Section 3.01 Representations and Warranties as to the Originators. Each
of the Originators hereby represents and warrants to the Unaffiliated Seller and
the Depositor, as of the Closing Date, that:

                  (a) The Originator is a corporation duly organized, validly
         existing and in good standing under the laws of (i) with respect to ABC
         and Upland, the State of Pennsylvania, or (ii) with respect to NJMIC,
         the State of New Jersey, and has all licenses necessary to carry on its
         business as now being conducted and is licensed, qualified and in good
         standing in each state where a Mortgaged Property is located if the
         laws of such state require licensing or qualification in order to
         conduct business of the type conducted by the Originator and to perform
         its obligations as the Originator hereunder, and in any event the
         Originator is in compliance with the laws of any such state to the
         extent necessary to ensure the enforceability of the related Mortgage
         Loan; the Originator has the full power and authority, corporate and
         otherwise, to execute and deliver this Agreement and to perform in
         accordance herewith; the execution, delivery and performance of this
         Agreement (including all instruments of transfer to be delivered


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         pursuant to this Agreement) by the Originator and the consummation of
         the transactions contemplated hereby have been duly and validly
         authorized; this Agreement evidences the valid, binding and enforceable
         obligation of the Originator; and all requisite corporate action has
         been taken by the Originator to make this Agreement valid and binding
         upon the Originator in accordance with its terms;

                  (b) No consent, approval, authorization or order of any court
         or governmental agency or body is required for the execution, delivery
         and performance by the Originator of, or compliance by the Originator
         with, this Agreement or the sale of the Mortgage Loans pursuant to the
         terms of this Agreement or the consummation of the transactions
         contemplated by this Agreement, or if required, such approval has been
         obtained prior to the Closing Date;

                  (c) Neither the execution and delivery of this Agreement, the
         acquisition nor origination of the Mortgage Loans by the Originator or
         the transactions contemplated hereby, nor the fulfillment of or
         compliance with the terms and conditions of this Agreement, has or will
         conflict with or result in a breach of any of the terms, conditions or
         provisions of the Originator's charter or by-laws or any legal
         restriction or any agreement or instrument to which the Originator is
         now a party or by which it is bound or to which its property is
         subject, or constitute a default or result in an acceleration under any
         of the foregoing, or result in the violation of any law, rule,
         regulation, order, judgment or decree to which the Originator or its
         property is subject, or impair the ability of the Indenture Trustee (or
         the Servicer as the agent of the Indenture Trustee) to realize on the
         Mortgage Loans, or impair the value of the Mortgage Loans;

                  (d) Neither this Agreement nor the information contained in
         the Prospectus Supplement (other than the information under the caption
         "Underwriting") nor any statement, report or other document prepared by
         the Originator and furnished or to be furnished pursuant to this
         Agreement or in connection with the transactions contemplated hereby
         contains any untrue statement or alleged untrue statement of any
         material fact or omits to state a material fact necessary to make the
         statements contained herein or therein, in light of the circumstances
         under which they were made, not misleading;

                  (e) There is no action, suit, proceeding or investigation
         pending or, to the knowledge of the Originator, threatened before a
         court, administrative agency or government tribunal against the
         Originator which, either in any one instance or in the aggregate, may
         result in any material adverse change in the business, operations,
         financial condition, properties or assets of the Originator, or in any
         material impairment of the right or ability of the Originator to carry
         on its business substantially as now conducted, or in any material
         liability on the part of the Originator, or which would draw into
         question the validity of this Agreement, the Mortgage Loans, or of any
         action taken or to be taken in connection with the obligations of the
         Originator contemplated herein, or which would impair materially the
         ability of the Originator to perform under the terms of this Agreement
         or that will prohibit its entering into this Agreement or the
         consummation of any of the transactions contemplated hereby;


                                       9

<PAGE>



                  (f) The Originator is not in violation of or in default with
         respect to, and the execution and delivery of this Agreement by the
         Originator and its performance of and compliance with the terms hereof
         will not constitute a violation or default with respect to, any order
         or decree of any court or any order, regulation or demand of any
         federal, state, municipal or governmental agency, which violation or
         default might have consequences that would materially and adversely
         affect the condition (financial or other) or operations of the
         Originator or its properties or might have consequences that would
         materially and adversely affect its performance hereunder or under any
         subservicing agreement;

                  (g) Upon the receipt of each Mortgage File by the Depositor
         (or its assignee) under this Agreement, the Depositor (or its assignee)
         will have good title to each related Mortgage Loan and such other items
         comprising the corpus of the Trust Estate free and clear of any lien
         created by the Originator (other than liens which will be
         simultaneously released);

                  (h) The consummation of the transactions contemplated by this
         Agreement are in the ordinary course of business of the Originator, and
         the transfer, assignment and conveyance of the Mortgage Notes and the
         Mortgages by the Originator pursuant to this Agreement are not subject
         to the bulk transfer or any similar statutory provisions in effect in
         any applicable jurisdiction;

                  (i) With respect to any Mortgage Loan purchased by the
         Originator, the Originator acquired title to the Mortgage Loan in good
         faith, without notice of any adverse claim;

                  (j) The Originator does not believe, nor does it have any
         reason or cause to believe, that it cannot perform each and every
         covenant contained in this Agreement. The Originator is solvent and the
         sale of the Mortgage Loans by the Originator pursuant to the terms of
         this Agreement will not cause the Originator to become insolvent. The
         sale of the Mortgage Loans by the Originator pursuant to the terms of
         this Agreement was not undertaken with the intent to hinder, delay or
         defraud any of the Originator's creditors;

                  (k) The Mortgage Loans are not intentionally selected in a
         manner so as to affect adversely the interests of the Depositor or of
         any transferee of the Depositor (including the Trust and the Indenture
         Trustee);

                  (l) The Originator has determined that it will treat the
         disposition of the Mortgage Loans pursuant to this Agreement as a sale
         for accounting and tax purposes;

                  (m) The Originator has not dealt with any broker or agent or
         anyone else that may be entitled to any commission or compensation in
         connection with the sale of the Mortgage Loans to the Depositor other
         than to the Depositor or an affiliate thereof; and

                  (n) The consideration received by the Originator upon the sale
         of the Mortgage Loans under this Agreement constitutes fair
         consideration and reasonably equivalent value for the Mortgage Loans.


                                       10

<PAGE>



         Section 3.02 Representations and Warranties as to the Unaffiliated
Seller. The Unaffiliated Seller hereby represents and warrants to the Depositor,
as of the Closing Date, that:

                  (a) The Unaffiliated Seller is a corporation duly organized,
         validly existing and in good standing under the laws of the State of
         Delaware and has all licenses necessary to carry on its business as now
         being conducted and is licensed, qualified and in good standing in each
         state where a Mortgaged Property is located if the laws of such state
         require licensing or qualification in order to conduct business of the
         type conducted by the Unaffiliated Seller and to perform its
         obligations as the Unaffiliated Seller hereunder, and in any event the
         Unaffiliated Seller is in compliance with the laws of any such state to
         the extent necessary to ensure the enforceability of the related
         Mortgage Loan; the Unaffiliated Seller has the full power and
         authority, corporate and otherwise, to execute and deliver this
         Agreement and to perform in accordance herewith; the execution,
         delivery and performance of this Agreement (including all instruments
         of transfer to be delivered pursuant to this Agreement) by the
         Unaffiliated Seller and the consummation of the transactions
         contemplated hereby have been duly and validly authorized; this
         Agreement evidences the valid, binding and enforceable obligation of
         the Unaffiliated Seller; and all requisite corporate action has been
         taken by the Unaffiliated Seller to make this Agreement valid and
         binding upon the Unaffiliated Seller in accordance with its terms;

                  (b) No consent, approval, authorization or order of any court
         or governmental agency or body is required for the execution, delivery
         and performance by the Unaffiliated Seller of or compliance by the
         Unaffiliated Seller with this Agreement or the sale of the Mortgage
         Loans pursuant to the terms of this Agreement or the consummation of
         the transactions contemplated by this Agreement, or if required, such
         approval has been obtained prior to the Closing Date;

                  (c) Neither the execution and delivery of this Agreement, the
         acquisition nor origination of the Mortgage Loans by the Unaffiliated
         Seller nor the transactions contemplated hereby, nor the fulfillment of
         or compliance with the terms and conditions of this Agreement, has or
         will conflict with or result in a breach of any of the terms,
         conditions or provisions of the Unaffiliated Seller's charter or
         by-laws or any legal restriction or any agreement or instrument to
         which the Unaffiliated Seller is now a party or by which it is bound or
         to which its property is subject, or constitute a default or result in
         an acceleration under any of the foregoing, or result in the violation
         of any law, rule, regulation, order, judgment or decree to which the
         Unaffiliated Seller or its property is subject, or impair the ability
         of the Indenture Trustee (or the Servicer as the agent of the Indenture
         Trustee) to realize on the Mortgage Loans, or impair the value of the
         Mortgage Loans;

                  (d) Neither this Agreement nor the information contained in
         the Prospectus Supplement (other than the information under the caption
         "Underwriting") nor any statement, report or other document prepared by
         the Unaffiliated Seller and furnished or to be furnished pursuant to
         this Agreement or in connection with the transactions contemplated
         hereby contains any untrue statement or alleged untrue statement of any
         material fact or omits to state a material fact necessary to make the
         statements contained


                                       11

<PAGE>



         herein or therein, in light of the circumstances under which they were
         made, not misleading;

                  (e) There is no action, suit, proceeding or investigation
         pending nor, to the knowledge of the Unaffiliated Seller, threatened
         before a court, administrative agency or government tribunal against
         the Unaffiliated Seller which, either in any one instance or in the
         aggregate, may result in any material adverse change in the business,
         operations, financial condition, properties or assets of the
         Unaffiliated Seller, or in any material impairment of the right or
         ability of the Unaffiliated Seller to carry on its business
         substantially as now conducted, or in any material liability on the
         part of the Unaffiliated Seller, or which would draw into question the
         validity of this Agreement, the Mortgage Loans, or of any action taken
         or to be taken in connection with the obligations of the Unaffiliated
         Seller contemplated herein, or which would impair materially the
         ability of the Unaffiliated Seller to perform under the terms of this
         Agreement or that will prohibit its entering into this Agreement or the
         consummation of any of the transactions contemplated hereby;

                  (f) The Unaffiliated Seller is not in violation of or in
         default with respect to, and the execution and delivery of this
         Agreement by the Unaffiliated Seller and its performance of and
         compliance with the terms hereof will not constitute a violation or
         default with respect to, any order or decree of any court or any order,
         regulation or demand of any federal, state, municipal or governmental
         agency, which violation or default might have consequences that would
         materially and adversely affect the condition (financial or other) or
         operations of the Unaffiliated Seller or its properties or might have
         consequences that would materially and adversely affect its performance
         hereunder or under any subservicing agreement;

                  (g) Upon the receipt of each Mortgage File by the Depositor
         (or its assignee) under this Agreement, the Depositor (or its assignee)
         will have good title to each related Mortgage Loan and such other items
         comprising the corpus of the Trust Estate free and clear of any lien
         created by the Unaffiliated Seller (other than liens which will be
         simultaneously released);

                  (h) The consummation of the transactions contemplated by this
         Agreement are in the ordinary course of business of the Unaffiliated
         Seller, and the transfer, assignment and conveyance of the Mortgage
         Notes and the Mortgages by the Unaffiliated Seller pursuant to this
         Agreement are not subject to the bulk transfer or any similar statutory
         provisions in effect in any applicable jurisdiction;

                  (i) With respect to any Mortgage Loan purchased by the
         Unaffiliated Seller, the Unaffiliated Seller acquired title to the
         Mortgage Loan in good faith, without notice of any adverse claim;

                  (j) The Unaffiliated Seller does not believe, nor does it have
         any reason or cause to believe, that it cannot perform each and every
         covenant contained in this Agreement. The Unaffiliated Seller is
         solvent and the sale of the Mortgage Loans by the Unaffiliated Seller
         pursuant to the terms of this Agreement will not cause the Unaffiliated


                                       12

<PAGE>



         Seller to become insolvent. The sale of the Mortgage Loans by the
         Unaffiliated Seller pursuant to the terms of this Agreement was not
         undertaken with the intent to hinder, delay or defraud any of the
         Unaffiliated Seller's creditors;

                  (k) The Mortgage Loans are not intentionally selected in a
         manner so as to affect adversely the interests of the Depositor or of
         any transferee of the Depositor (including the Trust and the Indenture
         Trustee);

                  (l) The Unaffiliated Seller has determined that it will treat
         the disposition of the Mortgage Loans pursuant to this Agreement as a
         sale for accounting purposes;

                  (m) The Unaffiliated Seller has not dealt with any broker or
         agent or anyone else that may be entitled to any commission or
         compensation in connection with the sale of the Mortgage Loans to the
         Depositor other than to the Depositor or an affiliate thereof; and

                  (n) The consideration received by the Unaffiliated Seller upon
         the sale of the Mortgage Loans under this Agreement constitutes fair
         consideration and reasonably equivalent value for the Mortgage Loans.

         Section 3.03 Representations and Warranties Relating to the Mortgage
Loans. The Originators represent and warrant to the Unaffiliated Seller and the
Unaffiliated Seller represents to the Depositor that, as of the Closing Date, as
to each Initial Mortgage Loan, and as of the Subsequent Transfer Date, as to
each Subsequent Mortgage Loan, immediately prior to the sale and transfer of
such Mortgage Loan by the Unaffiliated Seller to the Depositor:

                  (a) The information set forth in each Mortgage Loan Schedule
         is complete, true and correct;

                  (b) The information to be provided by the Unaffiliated Seller
         or the Originators, directly or indirectly, to the Depositor in
         connection with a Subsequent Mortgage Loan will be true and correct in
         all material respects at the date or dates respecting which such
         information is furnished;

                  (c) Each Mortgage is a valid first or second lien on a fee
         simple (or its equivalent under applicable state law) estate in the
         real property securing the amount owed by the Mortgagor under the
         Mortgage Note subject only to (i) the lien of current real property
         taxes and assessments which are not delinquent, (ii) with respect to
         any Mortgage Loan identified on the Mortgage Loan Schedule as secured
         by a second lien, the related first mortgage loan, (iii) covenants,
         conditions and restrictions, rights of way, easements and other matters
         of public record as of the date of recording of such Mortgage, such
         exceptions appearing of record being acceptable to mortgage lending
         institutions generally in the area wherein the property subject to the
         Mortgage is located or specifically reflected in the appraisal obtained
         in connection with the origination of the related Mortgage Loan
         obtained by the Unaffiliated Seller and (iv) other matters to which
         like properties are commonly subject which do not materially interfere
         with the benefits of the security intended to be provided by such
         Mortgage;


                                       13

<PAGE>



                  (d) Immediately prior to the transfer and assignment by the
         related Originator to the Unaffiliated Seller and by the Unaffiliated
         Seller to the Depositor, the Unaffiliated Seller or such Originator, as
         applicable, had good title to, and was the sole owner of each Mortgage
         Loan, free of any interest of any other Person, and the Unaffiliated
         Seller or such Originator has transferred all right, title and interest
         in each Mortgage Loan to the Depositor or the Unaffiliated Seller, as
         applicable;

                  (e) As of the applicable Cut-Off Date, no payment of principal
         or interest on or in respect of any Mortgage Loan remains unpaid for
         thirty (30) or more days past the date the same was due in accordance
         with the related Mortgage Note without regard to applicable grace
         periods;

                  (f) As of the Initial Cut-Off Date, no Mortgage Loan has a
         Mortgage Interest Rate less than 8.25% per annum in Pool I, 7.99% per
         annum in Pool II and 8.99% per annum in Pool III and the weighted
         average Mortgage Interest Rate of the Mortgage Loans is 11.71% in Pool
         I, 11.61% in Pool II and 12.76% in Pool III;

                  (g) At origination, no Mortgage Loan in Pool I, Pool II or
         Pool III had an original term to maturity of greater than 360 months;

                  (h) As of the Initial Cut-Off Date, the weighted average
         remaining term to maturity of the Mortgage Loans is 302 months for the
         Mortgage Loans in Pool I, 303 months for the Mortgage Loans in Pool II
         and 234 months for the Mortgage Loans in Pool III;

                  (i) To the best knowledge of the Unaffiliated Seller and each
         of the Originators, there is no mechanics' lien or claim for work,
         labor or material (and no rights are outstanding that under law could
         give rise to such lien) affecting the premises subject to any Mortgage
         which is or may be a lien prior to, or equal or coordinate with, the
         lien of such Mortgage, except those which are insured against by the
         title insurance policy referred to in (ff) below;

                  (j) To the best knowledge of the Unaffiliated Seller and each
         of the Originators, there is no delinquent tax or assessment lien
         against any Mortgaged Property;

                  (k) Such Mortgage Loan, the Mortgage, and the Mortgage Note,
         including, without limitation, the obligation of the Mortgagor to pay
         the unpaid principal of and interest on the Mortgage Note, are each not
         subject to any right of rescission (or any such rescission right has
         expired in accordance with applicable law), set-off, counterclaim, or
         defense, including the defense of usury, nor will the operation of any
         of the terms of the Mortgage Note or the Mortgage, or the exercise of
         any right thereunder, render either the Mortgage Note or the Mortgage
         unenforceable, in whole or in part, or subject to any right of
         rescission, set-off, counterclaim, or defense, including the defense of
         usury, and no such right of rescission, set-off, counterclaim, or
         defense has been asserted with respect thereto;


                                       14

<PAGE>



                  (l) To the best knowledge of the Unaffiliated Seller and each
         of the Originators, the Mortgaged Property is free of material damage
         and is in good repair, and there is no pending or threatened proceeding
         for the total or partial condemnation of the Mortgaged Property;

                  (m) Neither the Originators nor the Unaffiliated Seller has
         received a notice of default of any first mortgage loan secured by the
         Mortgaged Property which has not been cured by a party other than the
         Unaffiliated Seller;

                  (n) Each Mortgage Note and Mortgage are in substantially the
         forms previously provided to the Depositor and the Indenture Trustee on
         behalf of the Unaffiliated Seller;

                  (o) No Mortgage Loan had, at the date of origination, a CLTV
         in excess of 100% for Pool I, 100% for Pool II and 95.16% for Pool III,
         and the weighted average CLTV of all Mortgage Loans as of the Initial
         Cut-Off Date is approximately 75.65% in Pool I, 76.23% for Pool II and
         70.87% in Pool III;

                  (p) The Mortgage Loan was not originated in a program in which
         the amount of documentation in the underwriting process was limited in
         comparison to the originator's normal documentation requirements;

                  (q) No more than the following percentages of the Mortgage
         Loans by Cut-Off Date Aggregate Principal Balance are secured by
         Mortgaged Properties located in the following states:


                                       15

<PAGE>



                          Pool I
         ------------------------------------------
                                   Percentage of
                                   Cut-Off Date
                                     Aggregate
         State                   Principal Balance
         --------------------    ------------------

         Arkansas                       0.16
         Colorado                       0.19
         Connecticut                    1.32
         Delaware                       1.82
         Florida                       10.07
         Georgia                        5.15
         Illinois                       4.13
         Indiana                        0.54
         Iowa                           0.09
         Kansas                         0.06
         Kentucky                       0.16
         Maine                          0.15
         Maryland                       3.36
         Massachusetts                  0.67
         Michigan                       0.17
         Minnesota                      0.15
         Mississippi                    0.17
         Missouri                       0.57
         New Hampshire                  0.31
         New Jersey                    15.10
         New York                      27.01
         North Carolina                 2.48
         Ohio                           3.96
         Pennsylvania                  16.20
         Rhode Island                   0.03
         South Carolina                 1.06
         Tennessee                      1.69
         Utah                           0.14
         Vermont                        0.43
         Virginia                       2.45
         Washington                     0.14
         West Virginia                  0.06
         Wisconsin                      0.03
                                 -----------------
                                      100.00%
                                 =================


                                       16

<PAGE>



                          Pool II
         ------------------------------------------
                                   Percentage of
                                   Cut-Off Date
                                     Aggregate
         State                   Principal Balance
         --------------------    ------------------

         Alabama                        0.11%
         Arkansas                       0.10
         Connecticut                    2.08
         Delaware                       1.91
         Florida                       10.64
         Georgia                        4.47
         Illinois                       6.15
         Indiana                        0.58
         Kentucky                       0.24
         Maryland                       1.65
         Massachusetts                  1.31
         Michigan                       0.56
         Missouri                       0.19
         Montana                        0.13
         Nebraska                       0.15
         New Jersey                    15.24
         New York                      23.63
         North Carolina                 2.42
         Ohio                           4.60
         Oklahoma                       0.07
         Pennsylvania                  17.48
         Rhode Island                   0.09
         South Carolina                 0.97
         Tennessee                      1.52
         Virginia                       3.24
         West Virginia                  0.46
                                 -----------------
                                      100.00%
                                 =================


                                       17

<PAGE>



                         Pool III
         ------------------------------------------
                                   Percentage of
                                   Cut-Off Date
                                     Aggregate
         State                   Principal Balance
         --------------------    ------------------

         Connecticut                    5.60%
         Florida                        4.42
         Georgia                        2.85
         Illinois                       5.53
         Indiana                        1.97
         Maryland                       3.02
         Massachusetts                  2.02
         Michigan                       1.64
         New Jersey                    20.96
         New York                      32.02
         North Carolina                 0.44
         Ohio                           3.00
         Pennsylvania                   6.04
         South Carolina                 0.52
         Tennessee                      2.49
         Texas                          1.59
         Virginia                       6.89
                                 -----------------
                                      100.00%
                                 =================


                  (r) The Mortgage Loans were not selected by the Unaffiliated
         Seller or the Originators for sale hereunder or inclusion in the Trust
         Estate on any basis adverse to the Trust Estate relative to the
         portfolio of similar mortgage loans of the Unaffiliated Seller or the
         Originators;

                  (s) None of the Mortgage Loans constitutes a lien on leasehold
         interests;

                  (t) Each Mortgage contains customary and enforceable
         provisions which render the rights and remedies of the holder thereof
         adequate for the realization against the related Mortgaged Property of
         the benefits of the security including (A) in the case of a Mortgage
         designated as a deed of trust, by trustee's sale and (B) otherwise by
         judicial foreclosure. To the best of the Unaffiliated Seller's and the
         Originators' knowledge, there is no homestead or other exemption
         available to the related Mortgagor which would materially interfere
         with the right to sell the related Mortgaged Property at a trustee's
         sale or the right to foreclose the related Mortgage. The Mortgage
         contains customary and enforceable provisions for the acceleration of
         the payment of the Principal Balance of such Mortgage Loan in the event
         all or any part of the related Mortgaged Property is sold or otherwise
         transferred without the prior written consent of the holder thereof;

                  (u) The proceeds of such Mortgage Loan have been fully
         disbursed, including reserves set aside by the Unaffiliated Seller or
         the Originators, there is no requirement for, and neither the
         Unaffiliated Seller nor the Originators shall make any, future advances
         thereunder. Any future advances made prior to the applicable Cut-Off
         Date have been consolidated with the principal balance secured by the
         Mortgage, and such principal balance, as consolidated, bears a single
         interest rate and single repayment term reflected on the applicable
         Mortgage Loan Schedule. The Principal Balance as of the applicable
         Cut-Off Date does not exceed the original principal amount of such
         Mortgage Loan. Except with respect to no more than $150,000 of escrow
         funds, any and all


                                       18

<PAGE>



         requirements as to completion of any on-site or off-site improvements
         and as to disbursements of any escrow funds therefor have been complied
         with. All costs, fees, and expenses incurred in making, or recording
         such Mortgage Loan have been paid;

                  (v) All Mortgage Loans were originated in compliance with the
         Originators' Underwriting Guidelines;

                  (w) The terms of the Mortgage and the Mortgage Note have not
         been impaired, waived, altered, or modified in any respect, except by a
         written instrument which has been recorded, if necessary, to protect
         the interest of the Indenture Trustee and which has been delivered to
         the Collateral Agent, on behalf of the Indenture Trustee. The substance
         of any such alteration or modification is or as to Subsequent Mortgage
         Loans will be reflected on the applicable Mortgage Loan Schedule and,
         to the extent necessary, has been or will be approved by (i) the
         insurer under the applicable mortgage title insurance policy, and (ii)
         the insurer under any other insurance policy required hereunder for
         such Mortgage Loan where such insurance policy requires approval and
         the failure to procure approval would impair coverage under such
         policy;

                  (x) No instrument of release, waiver, alteration, or
         modification has been executed in connection with such Mortgage Loan,
         and no Mortgagor has been released, in whole or in part, except in
         connection with an assumption agreement which has been approved by the
         insurer under any insurance policy required hereunder for such Mortgage
         Loan where such policy requires approval and the failure to procure
         approval would impair coverage under such policy, and which is part of
         the Mortgage File and has been delivered to the Collateral Agent, on
         behalf of the Indenture Trustee, and the terms of which are reflected
         in the applicable Mortgage Loan Schedule;

                  (y) Other than delinquencies described in clause (e) above,
         there is no default, breach, violation, or event of acceleration
         existing under the Mortgage or the Mortgage Note and no event which,
         with the passage of time or with notice and the expiration of any grace
         or cure period, would constitute such a default, breach, violation or
         event of acceleration, and neither the Originators nor the Unaffiliated
         Seller has waived any such default, breach, violation or event of
         acceleration. All taxes, governmental assessments (including
         assessments payable in future installments), insurance premiums, water,
         sewer, and municipal charges, leaseholder payments, or ground rents
         which previously became due and owing in respect of or affecting the
         related Mortgaged Property have been paid. Neither the Originators nor
         the Unaffiliated Seller has advanced funds, or induced, solicited, or
         knowingly received any advance of funds by a party other than the
         Mortgagor, directly or indirectly, for the payment of any amount
         required by the Mortgage or the Mortgage Note;

                  (z) All of the improvements which were included for the
         purposes of determining the Appraised Value of the Mortgaged Property
         were completed at the time that such Mortgage Loan was originated and
         lie wholly within the boundaries and building restriction lines of such
         Mortgaged Property. Except for de minimis encroachments, no
         improvements on adjoining properties encroach upon the Mortgaged
         Property. To the best of the Unaffiliated Seller's and the Originators'
         knowledge, no


                                       19

<PAGE>



         improvement located on or being part of the Mortgaged Property is in
         violation of any applicable zoning law or regulation. All inspections,
         licenses, and certificates required to be made or issued with respect
         to all occupied portions of the Mortgaged Property (including all such
         improvements which were included for the purpose of determining such
         Appraised Value) and, with respect to the use and occupancy of the
         same, including but not limited to certificates of occupancy and fire
         underwriters certificates, have been made or obtained from the
         appropriate authorities and the Mortgaged Property is lawfully occupied
         under applicable law;

                  (aa) To the best of the Unaffiliated Seller's and the
         Originators' knowledge, there do not exist any circumstances or
         conditions with respect to the Mortgage, the Mortgaged Property, the
         Mortgagor, or the Mortgagor's credit standing that can be reasonably
         expected to cause such Mortgage Loan to become delinquent or adversely
         affect the value or marketability of such Mortgage Loan, other than any
         such circumstances or conditions permitted under the Originator's
         Underwriting Guidelines;

                  (bb) All parties which have had any interest in the Mortgage,
         whether as mortgagee, assignee, pledgee or otherwise, are (or, during
         the period in which they held and disposed of such interest, were) (i)
         in compliance with any and all applicable licensing requirements of the
         laws of the state wherein the Mortgaged Property is located and (ii)
         (A) organized under the laws of such state, (B) qualified to do
         business in such state, (C) federal savings and loan associations or
         national banks having principal offices in such state, (D) not doing
         business in such state, or (E) not required to qualify to do business
         in such state;

                  (cc) The Mortgage Note and the Mortgage are genuine, and each
         is the legal, valid and binding obligation of the maker thereof,
         enforceable in accordance with its terms, except as such enforcement
         may be limited by bankruptcy, insolvency, reorganization, moratorium,
         or other similar laws affecting the enforcement of creditors' rights
         generally and except that the equitable remedy of specific performance
         and other equitable remedies are subject to the discretion of the
         courts. All parties to the Mortgage Note and the Mortgage had legal
         capacity to execute the Mortgage Note and the Mortgage and convey the
         estate therein purported to be conveyed, and the Mortgage Note and the
         Mortgage have been duly and properly executed by such parties or
         pursuant to a valid power-of-attorney that has been recorded with the
         Mortgage;

                  (dd) The transfer of the Mortgage Note and the Mortgage as and
         in the manner contemplated by this Agreement is sufficient either (i)
         fully to transfer to the Depositor all right, title, and interest of
         the Unaffiliated Seller and the Originators thereto as note holder and
         mortgagee or (ii) to grant to the Depositor the security interest
         referred to in Section 6.07 hereof. The Mortgage has been duly assigned
         and the Mortgage Note has been duly endorsed. The Assignment of
         Mortgage delivered to the Collateral Agent, on behalf of the Indenture
         Trustee, pursuant to Section 2.04(a)(iv) of the Sale and Servicing
         Agreement is in recordable form and is acceptable for recording under
         the laws of the applicable jurisdiction. The endorsement of the
         Mortgage Note, the delivery to the Collateral Agent, on behalf of the
         Indenture Trustee, of the endorsed Mortgage Note, and such Assignment
         of Mortgage, and the delivery of such Assignment of Mortgage for


                                       20

<PAGE>



         recording to, and the due recording of such Assignment of Mortgage in,
         the appropriate public recording office in the jurisdiction in which
         the Mortgaged Property is located are sufficient to permit the
         Indenture Trustee to avail itself of all protection available under
         applicable law against the claims of any present or future creditors of
         the Unaffiliated Seller and the Originators, and are sufficient to
         prevent any other sale, transfer, assignment, pledge, or hypothecation
         of the Mortgage Note and Mortgage by the Unaffiliated Seller or the
         Originators from being enforceable;

                  (ee) Any and all requirements of any federal, state, or local
         law including, without limitation, usury, truth-in-lending, real estate
         settlement procedures, consumer credit protection, equal credit
         opportunity, or disclosure laws applicable to such Mortgage Loan have
         been complied with, and the Servicer shall maintain in its possession,
         available for the Indenture Trustee's inspection, and shall deliver to
         the Indenture Trustee or its designee upon demand, evidence of
         compliance with all such requirements. The consummation of the
         transactions contemplated by this Agreement will not cause the
         violation of any such laws;

                  (ff) Such Mortgage Loan is covered by an ALTA mortgage title
         insurance policy or such other generally used and acceptable form of
         policy, issued by and the valid and binding obligation of a title
         insurer qualified to do business in the jurisdiction where the
         Mortgaged Property is located, insuring the Unaffiliated Seller, and
         its successors and assigns, as to the first or second priority lien, as
         applicable, of the Mortgage in the original principal amount of such
         Mortgage Loan. The assignment to the Indenture Trustee of the
         Unaffiliated Seller's interest in such mortgage title insurance policy
         does not require the consent of or notification to the insurer. Such
         mortgage title insurance policy is in full force and effect and will be
         in full force and effect and inure to the benefit of the Indenture
         Trustee upon the consummation of the transactions contemplated by this
         Agreement. No claims have been made under such mortgage title insurance
         policy and none of the Unaffiliated Seller, the Originators nor any
         prior holder of the Mortgage has done, by act or omission, anything
         which would impair the coverage of such mortgage title insurance
         policy;

                  (gg) All improvements upon the Mortgaged Property are insured
         against loss by fire, hazards of extended coverage, and such other
         hazards as are customary in the area where the Mortgaged Property is
         located pursuant to insurance policies conforming to the requirements
         of Section 3.05 hereof. If the Mortgaged Property at origination was
         located in an area identified on a flood hazard boundary map or flood
         insurance rate map issued by the Federal Emergency Management Agency as
         having special flood hazards (and such flood insurance has been made
         available), such Mortgaged Property was covered by flood insurance at
         origination. Each individual insurance policy is the valid and binding
         obligation of the insurer, is in full force and effect, and will be in
         full force and effect and inure to the benefit of the Indenture Trustee
         upon the consummation of the transactions contemplated by this
         Agreement, and contain a standard mortgage clause naming the originator
         of such Mortgage Loan, and its successors and assigns, as mortgagee and
         loss payee. All premiums thereon have been paid. The Mortgage obligates
         the Mortgagor to maintain all such insurance at the Mortgagor's cost
         and expense, and upon the Mortgagor's failure to do so, authorizes the
         holder of the Mortgage


                                       21

<PAGE>



         to obtain and maintain such insurance at the Mortgagor's cost and
         expense and to seek reimbursement therefor from the Mortgagor, and none
         of the Unaffiliated Seller, the related Originator or any prior holder
         of the Mortgage has acted or failed to act so as to impair the coverage
         of any such insurance policy or the validity, binding effect, and
         enforceability thereof;

                  (hh) If the Mortgage constitutes a deed of trust, a trustee,
         duly qualified under applicable law to serve as such, has been properly
         designated and currently so serves and is named in such Mortgage, as no
         fees or expenses are or will become payable by the trustee or the
         Noteholders to the Indenture Trustee under the deed of trust, except in
         connection with a trustee's sale after default by the Mortgagor;

                  (ii) The Mortgaged Property consists of one or more parcels of
         real property separately assessed for tax purposes. To the extent there
         is erected thereon a detached or an attached one-family residence or a
         detached two-to six-family dwelling, or an individual condominium unit
         in a low-rise condominium, or an individual unit in a planned unit
         development, or a commercial property, a manufactured dwelling, or a
         mixed use or multiple purpose property, such residence, dwelling or
         unit is not (i) a unit in a cooperative apartment, (ii) a property
         constituting part of a syndication, (iii) a time share unit, (iv) a
         property held in trust, (v) a mobile home, (vi) a log-constructed home,
         or (vii) a recreational vehicle;

                  (jj) There exist no material deficiencies with respect to
         escrow deposits and payments, if such are required, for which customary
         arrangements for repayment thereof have not been made or which the
         Unaffiliated Seller or the related Originator expects not to be cured,
         and no escrow deposits or payments of other charges or payments due the
         Unaffiliated Seller have been capitalized under the Mortgage or the
         Mortgage Note;

                  (kk) Such Mortgage Loan was not originated at a below market
         interest rate. Such Mortgage Loan does not have a shared appreciation
         feature, or other contingent interest feature;

                  (ll) The origination and collection practices used by the
         Unaffiliated Seller, the Originators or the Servicer with respect to
         such Mortgage Loan have been in all respects legal, proper, prudent,
         and customary in the mortgage origination and servicing business;

                  (mm) The Mortgagor has, to the extent required by applicable
         law, executed a statement to the effect that the Mortgagor has received
         all disclosure materials, if any, required by applicable law with
         respect to the making of fixed-rate mortgage loans. The Servicer shall
         maintain or cause to be maintained such statement in the Mortgage File;

                  (nn) All amounts received by the Unaffiliated Seller or the
         Originators with respect to such Mortgage Loan after the applicable
         Cut-Off Date and required to be deposited in the related Distribution
         Account have been so deposited in the related Distribution Account and
         are, as of the Closing Date, or will be as of the Subsequent Transfer
         Date, as applicable, in the related Distribution Account;


                                       22

<PAGE>



                  (oo) The appraisal report with respect to the Mortgaged
         Property contained in the Mortgage File was signed prior to the
         approval of the application for such Mortgage Loan by a qualified
         appraiser, duly appointed by the originator of such Mortgage Loan, who
         had no interest, direct or indirect, in the Mortgaged Property or in
         any loan made on the security thereof and whose compensation is not
         affected by the approval or disapproval of such application;

                  (pp) When measured by the Cut-Off Date Aggregate Principal
         Balance, the Mortgagors with respect to at least 83.76% of the Mortgage
         Loans in Pool I, 85.37% of the Mortgage Loans in Pool II and 80.56% of
         the Mortgage Loans in Pool III, represented at the time of origination
         that the Mortgagor would occupy the Mortgaged Property as the
         Mortgagor's primary residence;

                  (qq) Each of the Originators and the Unaffiliated Seller has
         no knowledge with respect to the Mortgaged Property of any governmental
         or regulatory action or third party claim made, instituted or
         threatened in writing relating to a violation of any applicable
         federal, state or local environmental law, statute, ordinance,
         regulation, order, decree or standard;

                  (rr) [Reserved];

                  (ss) With respect to second lien Mortgage Loans:

                           (i) the Unaffiliated Seller and the Originators have
                  no knowledge that the Mortgagor has received notice from the
                  holder of the prior mortgage that such prior mortgage is in
                  default,

                           (ii) no consent from the holder of the prior mortgage
                  is needed for the creation of the second lien Mortgage or, if
                  required, has been obtained and is in the related Mortgage
                  File,

                           (iii) if the prior mortgage has a negative
                  amortization, the CLTV was determined using the maximum loan
                  amount of such prior mortgage,

                           (iv) the related first mortgage loan encumbering the
                  related Mortgaged Property does not have a mandatory future
                  advance provision, and

                           (v) the Mortgage Loans conform in all material
                  respects to the description thereof in the Prospectus
                  Supplement.

                  (tt) Each of the Originators and the Unaffiliated Seller
         further represents and warrants to the Indenture Trustee, the Note
         Insurer and the Noteholders that as of the Subsequent Cut-Off Date all
         representations and warranties set forth in clauses (a) through (ss)
         above and (uu) through (ww) below will be correct in all material
         respects as to each Subsequent Mortgage Loan, and the representations
         so made in this subsection (tt) as to the following matters will be
         correct: (i) each Subsequent Mortgage Loan may not be thirty (30) or
         more days contractually delinquent as of the related Subsequent Cut-Off
         Date; (ii) the original term to maturity of such Subsequent Mortgage
         Loan may not


                                       23

<PAGE>



         exceed 360 months for Pool I, 360 months for Pool II and 360 months for
         Pool III; (iii) such Subsequent Mortgage Loan must have a mortgage
         interest rate of at least 8.25% for Pool I, 7.99% for Pool II and 9.50%
         for Pool III; (iv) the purchase of the Subsequent Mortgage Loans is
         consented to by the Note Insurer and the Rating Agencies,
         notwithstanding the fact that the Subsequent Mortgage Loans meet the
         parameters stated herein; (v) the principal balance of any such
         Subsequent Mortgage Loan may not exceed $240,000 for Pool I, $240,000
         for Pool II and $500,000 for Pool III; (vi) no more than 18.00% for
         Pool I, 18.25% for Pool II and 53.10% for Pool III of the aggregate
         principal balance of such Subsequent Mortgage Loans may be Second
         Liens; (vii) no such Subsequent Mortgage Loan shall have a CLTV of more
         than (a) for consumer purpose loans, 100% for Pool I, 100% for Pool II
         and 100% for Pool III, and (b) for business purpose loans, 75% for Pool
         I, 75% for Pool II and 75% for Pool III; (viii) no more than 45.25% for
         Pool I, 45.45% for Pool II and 41.20% for Pool III of such Subsequent
         Mortgage Loans may be Balloon Loans; (ix) no more than 7.05% for Pool
         I, 6.10% for Pool II and 18.00% for Pool III of such Subsequent
         Mortgage Loans may be secured by mixed-use properties, commercial
         properties, or five or more unit multifamily properties; and (x)
         following the purchase of such Subsequent Mortgage Loans by the Trust,
         the Mortgage Loans (including the Subsequent Mortgage Loans), (a) will
         have a weighted average mortgage interest rate, (I) for consumer
         purpose loans, of at least 11.20% for Pool I, 11.25% for Pool II and
         11.35% for Pool III and (II) for business purpose loans, of at least
         16.00% for Pool I, 16.00% for Pool II and 16.00% for Pool III; and (b)
         will have a weighted average CLTV of not more than (I) for consumer
         purpose loans, 77% for Pool I, 77% for Pool II and 78% for Pool III,
         and (II) for business purpose loans, 65% for Pool I, 63% for Pool II
         and 60% for Pool III.

                  (uu) To the best of the Unaffiliated Seller's and the
         Originators' knowledge, no error, omission, misrepresentation,
         negligence, fraud or similar occurrence with respect to a Mortgage Loan
         has taken place on the part of any person, including without limitation
         the Mortgagor, any appraiser, any builder or developer, or any other
         party involved in the origination of the Mortgage Loan or in the
         application of any insurance in relation to such Mortgage Loan;

                  (vv) Each Mortgaged Property is in compliance with all
         environmental laws, ordinances, rules, regulations and orders of
         federal, state or governmental authorities relating thereto. No
         hazardous material has been or is incorporated in, stored on or under,
         released from, treated on, transported to or from, or disposed of on or
         from, any Mortgaged Property such that, under applicable law (A) any
         such hazardous material would be required to be eliminated before the
         Mortgaged Property could be altered, renovated, demolished or
         transferred, or (B) the owner of the Mortgaged Property, or the holder
         of a security interest therein, could be subjected to liability for the
         removal of such hazardous material or the elimination of the hazard
         created thereby. Neither the Unaffiliated Seller nor any Mortgagor has
         received notification from any federal, state or other governmental
         authority relating to any hazardous materials on or affecting the
         Mortgaged Property or to any potential or known liability under any
         environmental law arising from the ownership or operation of the
         Mortgaged Property. For the purposes of this subsection, the term
         "hazardous materials" shall include, without limitation, gasoline,
         petroleum products, explosives, radioactive materials, polychlorinated
         biphenyls or


                                       24

<PAGE>



         related or similar materials, asbestos or any material containing
         asbestos, lead, lead-based paint and any other substance or material as
         may be defined as a hazardous or toxic substance by any federal, state
         or local environmental law, ordinance, rule, regulation or order,
         including, without limitation, CERCLA, the Clean Air Act, the Clean
         Water Act, the Resource Conservation and Recovery Act, the Toxic
         Substances Control Act and any regulations promulgated pursuant
         thereto; and

                  (ww) With respect to any business purpose loan, the related
         Mortgage Note contains an acceleration clause, accelerating the
         maturity date under the Mortgage Note to the date the individual
         guarantying such loan, if any, becomes subject to any bankruptcy,
         insolvency, reorganization, moratorium, or other similar laws affecting
         the enforcement of creditors' rights generally.

         Section 3.04 Representations and Warranties of the Depositor. The
Depositor hereby represents, warrants and covenants to the Unaffiliated Seller,
as of the date of execution of this Agreement and the Closing Date, that:

                  (a) The Depositor is a corporation duly organized, validly
         existing and in good standing under the laws of the State of Delaware;

                  (b) The Depositor has the corporate power and authority to
         purchase each Mortgage Loan and to execute, deliver and perform, and to
         enter into and consummate all the transactions contemplated by this
         Agreement; (c) This Agreement has been duly and validly authorized,
         executed and delivered by the Depositor, and, assuming the due
         authorization, execution and delivery hereof by the Unaffiliated Seller
         and the Originators, constitutes the legal, valid and binding agreement
         of the Depositor, enforceable against the Depositor in accordance with
         its terms, except as such enforcement may be limited by bankruptcy,
         insolvency, reorganization, moratorium or other similar laws relating
         to or affecting the rights of creditors generally, and by general
         equity principles (regardless of whether such enforcement is considered
         in a proceeding in equity or at law);

                  (d) No consent, approval, authorization or order of or
         registration or filing with, or notice to, any governmental authority
         or court is required for the execution, delivery and performance of or
         compliance by the Depositor with this Agreement or the consummation by
         the Depositor of any of the transactions contemplated hereby, except
         such as have been made on or prior to the Closing Date;

                  (e) The Depositor has filed or will file the Prospectus and
         Prospectus Supplement with the Commission in accordance with Rule
         424(b) under the Securities Act; and

                  (f) None of the execution and delivery of this Agreement, the
         purchase of the Mortgage Loans from the Unaffiliated Seller, the
         consummation of the other transactions contemplated hereby, or the
         fulfillment of or compliance with the terms and conditions of this
         Agreement, (i) conflicts or will conflict with the charter or bylaws of
         the Depositor or conflicts or will conflict with or results or will
         result in a breach of, or constitutes or will


                                       25

<PAGE>



         constitute a default or results or will result in an acceleration
         under, any term, condition or provision of any indenture, deed of
         trust, contract or other agreement or other instrument to which the
         Depositor is a party or by which it is bound and which is material to
         the Depositor, or (ii) results or will result in a violation of any
         law, rule, regulation, order, judgment or decree of any court or
         governmental authority having jurisdiction over the Depositor.

         Section 3.05 Repurchase Obligation for Defective Documentation and for
Breach of a Representation or Warranty. (a) Each of the representations and
warranties contained in Sections 3.01, 3.02 and 3.03 shall survive the purchase
by the Depositor of the Mortgage Loans, the subsequent transfer thereof by the
Depositor to the Trust and the subsequent pledge thereof by the Trust to the
Indenture Trustee, for the benefit of the Noteholders and the Note Insurer, and
shall continue in full force and effect, notwithstanding any restrictive or
qualified endorsement on the Mortgage Notes and notwithstanding subsequent
termination of this Agreement, the Sale and Servicing Agreement or the
Indenture.

         (b) With respect to any representation or warranty contained in
Sections 3.01 or 3.03 hereof that is made to the best of the Originators'
knowledge or contained in Sections 3.02 or 3.03 hereof that is made to the best
of the Unaffiliated Seller's knowledge, if it is discovered by the Servicer, any
Subservicer, the Indenture Trustee, the Collateral Agent, the Depositor, the
Note Insurer or any Noteholder that the substance of such representation and
warranty was inaccurate as of the Closing Date or the Subsequent Transfer Date,
as applicable, and such inaccuracy materially and adversely affects the value of
the related Mortgage Loan, then notwithstanding the Originators' or the
Unaffiliated Seller's lack of knowledge with respect to the inaccuracy at the
time the representation or warranty was made, such inaccuracy shall be deemed a
breach of the applicable representation or warranty. Upon discovery by the
Originators, the Unaffiliated Seller, the Servicer, any Subservicer, the
Indenture Trustee, the Collateral Agent, the Note Insurer, the Depositor or any
Noteholder of a breach of any of such representations and warranties which
materially and adversely affects the value of Mortgage Loans or the interest of
the Noteholders, or which materially and adversely affects the interests of the
Note Insurer or the Noteholders in the related Mortgage Loan in the case of a
representation and warranty relating to a particular Mortgage Loan
(notwithstanding that such representation and warranty was made to the
Originators' or the Unaffiliated Seller's best knowledge), the party discovering
such breach shall give, pursuant to this Section 3.05(b) and pursuant to Section
4.02 of the Sale and Servicing Agreement, prompt written notice to the others.
Subject to the last paragraph of this Section 3.05(b), within sixty (60) days of
the earlier of its discovery or its receipt of notice of any breach of a
representation or warranty, the Unaffiliated Seller and the Originators shall
(a) promptly cure such breach in all material respects, or (b) purchase such
Mortgage Loan at a purchase price equal to the Loan Repurchase Price, or (c)
remove such Mortgage Loan from the Trust Estate (in which case it shall become a
Deleted Mortgage Loan) and substitute one or more Qualified Substitute Mortgage
Loans. Any such substitution shall be accompanied by payment by the Unaffiliated
Seller of the Substitution Adjustment, if any, to be deposited in the related
Distribution Account pursuant to the Sale and Servicing Agreement.

         The Originators shall cooperate with the Unaffiliated Seller to cure
any breach and shall reimburse the Unaffiliated Seller for the costs and
expenses related to any cure,


                                       26

<PAGE>



substitution (including any Substitution Adjustment) or repurchase incurred by
the Unaffiliated Seller pursuant to this Section 3.05.

         (c) As to any Deleted Mortgage Loan for which the Unaffiliated Seller
or an Originator substitutes a Qualified Substitute Mortgage Loan or Loans, the
Unaffiliated Seller or such Originator shall effect such substitution by
delivering to the Indenture Trustee and the Collateral Agent, a certification in
the form attached to the Sale and Servicing Agreement as Exhibit H, executed by
a Servicing Officer and the documents described in Section 2.05(a) of the Sale
and Servicing Agreement for such Qualified Substitute Mortgage Loan or Loans.
Pursuant to the Sale and Servicing Agreement, upon receipt by the Indenture
Trustee and the Collateral Agent of a certification of a Servicing Officer of
such substitution or purchase and, in the case of a substitution, upon receipt
by the Collateral Agent, on behalf of the Indenture Trustee of the related
Mortgage File, and the deposit of certain amounts in the related Distribution
Account pursuant to Section 2.07(b) of the Sale and Servicing Agreement (which
certification shall be in the form of Exhibit H to the Sale and Servicing
Agreement), the Collateral Agent, on behalf of the Indenture Trustee, shall be
required to release to the Servicer for release to the Unaffiliated Seller the
related Indenture Trustee's Mortgage File and shall be required to execute,
without recourse, and deliver such instruments of transfer furnished by the
Unaffiliated Seller as may be necessary to transfer such Mortgage Loan to the
Unaffiliated Seller or such Originator.

         (d) Pursuant to the Sale and Servicing Agreement, the Servicer shall
deposit in the related Distribution Account all payments received in connection
with such Qualified Substitute Mortgage Loan or Loans after the date of such
substitution. Monthly Payments received with respect to Qualified Substitute
Mortgage Loans on or before the date of substitution will be retained by the
Unaffiliated Seller. The Trust will own all payments received on the Deleted
Mortgage Loan on or before the date of substitution, and the Unaffiliated Seller
shall thereafter be entitled to retain all amounts subsequently received in
respect of such Deleted Mortgage Loan. Pursuant to the Sale and Servicing
Agreement, the Servicer shall be required to give written notice to the
Indenture Trustee, the Collateral Agent and the Note Insurer that such
substitution has taken place and shall amend the Mortgage Loan Schedule to
reflect the removal of such Deleted Mortgage Loan from the terms of the Sale and
Servicing Agreement and the substitution of the Qualified Substitute Mortgage
Loan. The parties hereto agree to amend the Mortgage Loan Schedule accordingly.
Upon such substitution, such Qualified Substitute Mortgage Loan or Loans shall
be subject to the terms of the Indenture, the Sale and Servicing Agreement and
this Agreement in all respects, and the Unaffiliated Seller shall be deemed to
have made with respect to such Qualified Substitute Mortgage Loan or Loans, as
of the date of substitution, the representations and warranties set forth in
Sections 3.02 and 3.03 herein. On the date of such substitution, the
Unaffiliated Seller will remit to the Servicer and, pursuant to the Sale and
Servicing Agreement, the Servicer will deposit into the related Distribution
Account, an amount equal to the Substitution Adjustment, if any.

         (e) With respect to any Mortgage Loan that has been converted to an REO
Mortgage Loan, all references in this Section 3.05 or Section 2.06 to "Mortgage
Loan" shall be deemed to refer to such REO Mortgage Loan. With respect to any
Mortgage Loan that the Originator or Unaffiliated Seller is required to
repurchase that is or becomes a Liquidated Mortgage Loan, in lieu of
repurchasing such Mortgage Loan, the Originator or Unaffiliated Seller shall
deposit into the related Payment Account, pursuant to Section 8.01 of the
Indenture


                                       27

<PAGE>



an amount equal to the amount of the Liquidated Loan Loss, if any, incurred in
connection with the liquidation of such Mortgage Loan within the same time
period in which the Originator or Unaffiliated Seller would have otherwise been
required to repurchase such Mortgage Loan.

         (f) It is understood and agreed that the obligations of the
Unaffiliated Seller and the Originator set forth in Section 2.06 and this
Section 3.05 to cure, purchase or substitute for a defective Mortgage Loan as
provided in Section 2.06 and this Section 3.05 constitute the sole remedies of
the Depositor, the Indenture Trustee, the Note Insurer and the Noteholders
respecting a breach of the foregoing representations and warranties.

         (g) The Unaffiliated Seller and the Originator shall be obligated to
indemnify the Indenture Trustee, the Trust, the Depositor, the Owner Trustee,
the Collateral Agent, the Noteholders and the Note Insurer (in their individual
and trust capacities) and their successors, assigns, agents and servants
(collectively, the "Indemnified Parties") from and against, any and all
liabilities, obligations, losses, damages, taxes, claims, actions and suits, and
any and all reasonable costs, expenses and disbursements (including reasonable
legal fees and expenses) of any kind and nature whatsoever (collectively,
"Expenses") which may at any time be imposed on, incurred by, or asserted
against any Indemnified Party in any way relating to or arising out of a breach
by the Unaffiliated Seller or the related Originator of the representations or
warranties herein. The indemnities contained in this Section 3.05 shall survive
the resignation or termination of the Owner Trustee or the termination of this
Agreement.

         (h) Each of the Originators and the Unaffiliated Seller shall be
jointly and severally responsible for any repurchase, cure or substitution
obligation of any of the Originators or the Unaffiliated Seller under this
Agreement, the Indenture and the Sale and Servicing Agreement.

         (i) Any cause of action against the Unaffiliated Seller or an
Originator relating to or arising out of the breach of any representations and
warranties or covenants made in Sections 2.06, 3.02 or 3.03 shall accrue as to
any Mortgage Loan upon (i) discovery of such breach by any party and notice
thereof to the Unaffiliated Seller or such Originator, (ii) failure by the
Unaffiliated Seller or such Originator to cure such breach or purchase or
substitute such Mortgage Loan as specified above, and (iii) demand upon the
Unaffiliated Seller or such Originator by the Indenture Trustee for all amounts
payable in respect of such Mortgage Loan.

                                   ARTICLE IV

                             THE UNAFFILIATED SELLER

         Section 4.01 Covenants of the Originators and the Unaffiliated Seller.
Each of the Originators and the Unaffiliated Seller covenants to the Depositor
as follows:

                  (a) The Originators and the Unaffiliated Seller shall
         cooperate with the Depositor and the firm of independent certified
         public accountants retained with respect to the issuance of the Notes
         in making available all information and taking all steps reasonably
         necessary to permit the accountants' letters required hereunder to be
         delivered within the times set for delivery herein.


                                       28

<PAGE>



                  (b) The Unaffiliated Seller agrees to satisfy or cause to be
         satisfied on or prior to the Closing Date, all of the conditions to the
         Depositor's obligations set forth in Section 5.01 hereof that are
         within the Unaffiliated Seller's (or its agents') control.

                  (c) The Originators and the Unaffiliated Seller hereby agree
         to do all acts, transactions, and things and to execute and deliver all
         agreements, documents, instruments, and papers by and on behalf of the
         Originators or the Unaffiliated Seller as the Depositor or its counsel
         may reasonably request in order to consummate the transfer of the
         Mortgage Loans to the Depositor and the subsequent transfer thereof to
         the Indenture Trustee, and the rating, issuance and sale of the Notes.

         Section 4.02 Merger or Consolidation. Each of the Originators and the
Unaffiliated Seller will keep in full effect its existence, rights and
franchises as a corporation and will obtain and preserve its qualification to do
business as a foreign corporation, in each jurisdiction necessary to protect the
validity and enforceability of this Agreement or any of the Mortgage Loans and
to perform its duties under this Agreement. Any Person into which any of the
Originators or the Unaffiliated Seller may be merged or consolidated, or any
corporation resulting from any merger, conversion or consolidation to which the
Originators or the Unaffiliated Seller shall be a party, or any Person
succeeding to the business of the Originators or the Unaffiliated Seller, shall
be approved by the Note Insurer which approval shall not be unreasonably
withheld. If the approval of the Note Insurer is not required, the successor
shall be an established mortgage loan servicing institution that is a Permitted
Transferee and in all events shall be the successor of the Originators or the
Unaffiliated Seller without the execution or filing of any paper or any further
act on the part of any of the parties hereto, anything herein to the contrary
notwithstanding. The Originators and the Unaffiliated Seller shall send notice
of any such merger or consolidation to the Indenture Trustee and the Note
Insurer.

         Section 4.03 Costs. In connection with the transactions contemplated
under this Agreement, the Trust Agreement, the Indenture and the Sale and
Servicing Agreement, the Unaffiliated Seller shall promptly pay (or shall
promptly reimburse the Depositor to the extent that the Depositor shall have
paid or otherwise incurred): (a) the fees and disbursements of the Depositor's
(50% of fees up to $30,000 and then 100% thereafter), the Unaffiliated Seller's
and the Originators' counsel; (b) the fees of S&P and Moody's; (c) any of the
fees of the Indenture Trustee and the fees and disbursements of the Indenture
Trustee's counsel; (d) any of the fees of the Owner Trustee and the fees and
disbursements of the Owner Trustee's counsel; (e) expenses incurred in
connection with printing the Prospectus, the Prospectus Supplement, any
amendment or supplement thereto, any preliminary prospectus and the Notes; (f)
fees and expenses relating to the filing of documents with the Commission
(including without limitation periodic reports under the Exchange Act); (g) the
shelf registration amortization fee of 0.04% of the Note Principal Balance of
the Notes on the Closing Date, paid in connection with the issuance of Notes;
(h) the fees and disbursements for Deloitte & Touche LLP, accountants for the
Originators; and (i) all of the initial expenses (not to exceed $75,000) of the
Note Insurer including, without limitation, legal fees and expenses, accountant
fees and expenses and expenses in connection with due diligence conducted on the
Mortgage Files but not including the initial premium paid to the Note Insurer.
For the avoidance of doubt, the parties hereto acknowledge that it is the
intention of the parties that the Depositor shall not pay any of the Indenture
Trustee's or Owner Trustee's fees and expenses in connection with the
transactions


                                       29

<PAGE>



contemplated by this Agreement, the Trust Agreement, the Indenture and the Sale
and Servicing Agreement. All other costs and expenses in connection with the
transactions contemplated hereunder shall be borne by the party incurring such
expenses.

         Section 4.04 Indemnification. (a) The Originators and the Unaffiliated
Seller, jointly and severally, agree

                  (i) to indemnify and hold harmless the Depositor, each of its
         directors, each of its officers who have signed the Registration
         Statement, and each of its directors and each person or entity who
         controls the Depositor or any such person, within the meaning of
         Section 15 of the Securities Act, against any and all losses, claims,
         damages or liabilities, joint and several, to which the Depositor or
         any such person or entity may become subject, under the Securities Act
         or otherwise, and will reimburse the Depositor and each such
         controlling person for any legal or other expenses incurred by the
         Depositor or such controlling person in connection with investigating
         or defending any such loss, claim, damage, liability or action, insofar
         as such losses, claims, damages or liabilities (or actions in respect
         thereof) arise out of or are based upon any untrue statement or alleged
         untrue statement of any material fact contained in the Prospectus
         Supplement or any amendment or supplement to the Prospectus Supplement
         or the omission or the alleged omission to state therein a material
         fact required to be stated therein or necessary to make the statements
         in the Prospectus Supplement or any amendment or supplement to the
         Prospectus Supplement approved in writing by the Originators or the
         Unaffiliated Seller, in light of the circumstances under which they
         were made, not misleading, but only to the extent that such untrue
         statement or alleged untrue statement or omission or alleged omission
         relates to the information contained in the Prospectus Supplement
         referred to in Section 3.01(d). This indemnity agreement will be in
         addition to any liability which the Originators and the Unaffiliated
         Seller may otherwise have; and

                  (ii) to indemnify and to hold the Depositor harmless against
         any and all claims, losses, penalties, fines, forfeitures, legal fees
         and related costs, judgments, and any other costs, fees and expenses
         that the Depositor may sustain in any way related to the failure of any
         of the Originators or the Unaffiliated Seller to perform its duties in
         compliance with the terms of this Agreement. The Originators or the
         Unaffiliated Seller shall immediately notify the Depositor if a claim
         is made by a third party with respect to this Agreement, and the
         Originators or the Unaffiliated Seller shall assume the defense of any
         such claim and pay all expenses in connection therewith, including
         reasonable counsel fees, and promptly pay, discharge and satisfy any
         judgment or decree which may be entered against the Depositor in
         respect of such claim. Pursuant to the Indenture, the Indenture Trustee
         shall reimburse the Unaffiliated Seller in accordance with the
         Indenture for all amounts advanced by the Unaffiliated Seller pursuant
         to the preceding sentence except when the claim relates directly to the
         failure of the Unaffiliated Seller to perform its duties in compliance
         with the terms of this Agreement.

         (b) The Depositor agrees to indemnify and hold harmless each of the
Originators and the Unaffiliated Seller, each of their respective directors and
each person or entity who controls the Originators or the Unaffiliated Seller or
any such person, within the


                                       30

<PAGE>



meaning of Section 15 of the Securities Act, against any and all losses, claims,
damages or liabilities, joint and several, to which the Originators or the
Unaffiliated Seller or any such person or entity may become subject, under the
Securities Act or otherwise, and will reimburse the Originators and the
Unaffiliated Seller and any such director or controlling person for any legal or
other expenses incurred by such party or any such director or controlling person
in connection with investigating or defending any such loss, claim, damage,
liability or action, insofar as such losses, claims, damages or liabilities (or
actions in respect thereof) arise out of or are based upon any untrue statement
or alleged untrue statement of any material fact contained in the Registration
Statement, the Prospectus, the Prospectus Supplement, any amendment or
supplement to the Prospectus or the Prospectus Supplement or the omission or the
alleged omission to state therein a material fact required to be stated therein
or necessary to make the statements therein, in light of the circumstances under
which they were made, not misleading, but only to the extent that such untrue
statement or alleged untrue statement or omission or alleged omission is other
than a statement or omission relating to the information set forth in subsection
(a)(i) of this Section 4.04; provided, however, that in no event shall the
Depositor be liable to the Unaffiliated Seller under this paragraph (b) in an
amount in excess of the Depositor's resale profit or the underwriting fee on the
sale of the Notes. This indemnity agreement will be in addition to any liability
which the Depositor may otherwise have.

         (c) Promptly after receipt by an indemnified party under this Section
4.04 of notice of the commencement of any action, such indemnified party will,
if a claim in respect thereof is to be made against the indemnifying party under
this Section 4.04, notify the indemnifying party in writing of the commencement
thereof, but the omission to so notify the indemnifying party will not relieve
the indemnifying party from any liability which the indemnifying party may have
to any indemnified party hereunder except to the extent such indemnifying party
has been prejudiced thereby. In case any such action is brought against any
indemnified party, and it notifies the indemnifying party of the commencement
thereof, the indemnifying party will be entitled to participate therein and, to
the extent that it may elect by written notice delivered to the indemnified
party promptly after receiving the aforesaid notice from such indemnified party,
to assume the defense thereof with counsel reasonably satisfactory to such
indemnified party. After notice from the indemnifying party to such indemnified
party of its election to assume the defense thereof, the indemnifying party will
not be liable to such indemnified party under this Section 4.04 for any legal or
other expenses subsequently incurred by such indemnified party in connection
with the defense thereof other than reasonable costs of investigation; provided,
however, if the defendants in any such action include both the indemnified party
and the indemnifying party and the indemnified party shall have reasonably
concluded that there may be legal defenses available to it that are different
from or additional to those available to the indemnifying party, the indemnified
party or parties shall have the right to select separate counsel to assert such
legal defenses and to otherwise participate in the defense of such action on
behalf of such indemnified party or parties. The indemnifying party shall not be
liable for the expenses of more than one separate counsel.

         (d) In order to provide for just and equitable contribution in
circumstances in which the indemnity agreement provided for in the preceding
parts of this Section 4.04 is for any reason held to be unavailable to or
insufficient to hold harmless an indemnified party under subsection (a) or
subsection (b) of this Section 4.04 in respect of any losses, claims, damages or
liabilities (or actions in respect thereof) referred to therein, the
indemnifying party shall


                                       31

<PAGE>



contribute to the amount paid or payable by the indemnified party as a result of
such losses, claims, damages or liabilities (or actions in respect thereof)
subject to the limits set forth in subsection (a) and subsection (b) of this
Section 4.04; provided, however, that no person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Securities Act)
shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation. In determining the amount of contribution to which
the respective parties are entitled, there shall be considered the relative
benefits received by the Originators and the Unaffiliated Seller on the one
hand, and the Depositor on the other, the Originators', the Unaffiliated
Seller's and the Depositor's relative knowledge and access to information
concerning the matter with respect to which the claim was asserted, the
opportunity to correct and prevent any statement or omission, and any other
equitable considerations appropriate in the circumstances. The Originators, the
Unaffiliated Seller and the Depositor agree that it would not be equitable if
the amount of such contribution were determined by pro rata or per capita
allocation. For purposes of this Section 4.04, each director of the Depositor,
each officer of the Depositor who signed the Registration Statement, and each
person, if any who controls the Depositor within the meaning of Section 15 of
the Securities Act, shall have the same rights to contribution as the Depositor,
and each director of the Originators or the Unaffiliated Seller, and each
person, if any who controls the Originators or the Unaffiliated Seller within
the meaning of Section 15 of the Securities Act, shall have the same rights to
contribution as the Originators and the Unaffiliated Seller.

                                   ARTICLE V

                              CONDITIONS OF CLOSING

         Section 5.01 Conditions of Depositor's Obligations. The obligations of
the Depositor to purchase the Mortgage Loans will be subject to the satisfaction
on the Closing Date of the following conditions. Upon payment of the purchase
price for the Mortgage Loans, such conditions shall be deemed satisfied or
waived.

         (a) Each of the obligations of the Unaffiliated Seller required to be
performed by it on or prior to the Closing Date pursuant to the terms of this
Agreement shall have been duly performed and complied with and all of the
representations and warranties of the Unaffiliated Seller and the Originators
under this Agreement shall be true and correct as of the Closing Date and no
event shall have occurred which, with notice or the passage of time, would
constitute a default under this Agreement, and the Depositor shall have received
a certificate to the effect of the foregoing signed by an authorized officer of
the Unaffiliated Seller and the Originators.

         (b) The Depositor shall have received a letter dated the date of this
Agreement, in form and substance acceptable to the Depositor and its counsel,
prepared by Deloitte & Touche LLP, independent certified public accountants,
regarding the numerical information contained in the Prospectus Supplement
including, but not limited to the information under the captions "Prepayment and
Yield Considerations" and "The Mortgage Loan Pools" regarding any numerical
information in any marketing materials relating to the Notes and regarding any
other information as reasonably requested by the Depositor.


                                       32

<PAGE>



         (c) The Mortgage Loans will be acceptable to the Depositor, in its sole
reasonable discretion.

         (d) The Depositor shall have received the following additional closing
documents, in form and substance reasonably satisfactory to the Depositor and
its counsel:

                  (i) the Mortgage Loan Schedule;

                  (ii) this Agreement, the Sale and Servicing Agreement, the
         Indenture, the Trust Agreement, and the Underwriting Agreement dated as
         of October 21, 1999 between the Depositor and Prudential Securities
         Incorporated and all documents required thereunder, duly executed and
         delivered by each of the parties thereto other than the Depositor;

                  (iii) officer's certificates of an officer of each of the
         Originators and the Unaffiliated Seller, dated as of the Closing Date,
         and attached thereto resolutions of the board of directors and a copy
         of the charter and by-laws;

                  (iv) copy of each of the Originators and the Unaffiliated
         Seller's charter and all amendments, revisions, and supplements
         thereof, certified by a secretary of each entity;

                  (v) an opinion of the counsel for the Originators and the
         Unaffiliated Seller as to various corporate matters in a form
         acceptable to the Depositor, its counsel, the Note Insurer, S&P and
         Moody's (it being agreed that the opinion shall expressly provide that
         the Indenture Trustee shall be entitled to rely on the opinion);

                  (vi) opinions of counsel for the Unaffiliated Seller, in forms
         acceptable to the Depositor, its counsel, the Note Insurer, S&P and
         Moody's as to such matters as shall be required for the assignment of a
         rating to the Notes of "AAA" by S&P, and "Aaa" by Moody's (it being
         agreed that such opinions shall expressly provide that the Indenture
         Trustee shall be entitled to rely on such opinions);

                  (vii) a letter from Moody's to the effect that it has assigned
         a rating of "Aaa" to the Notes;

                  (viii) a letter from S&P to the effect that it has assigned a
         rating of "AAA" to the Notes;

                  (ix) an opinion of counsel for the Indenture Trustee in form
         and substance acceptable to the Depositor, its counsel, the Note
         Insurer, Moody's and S&P (it being agreed that the opinion shall
         expressly provide that the Unaffiliated Seller shall be entitled to
         rely on the opinion);

                  (x) an opinion of counsel for the Owner Trustee in form and
         substance acceptable to the Depositor, its counsel, the Note Insurer,
         Moody's and S&P (it being agreed that the opinion shall expressly
         provide that the Unaffiliated Seller shall be entitled to rely on the
         opinion);


                                       33

<PAGE>



                  (xi) an opinion or opinions of counsel for the Servicer, in
         form and substance acceptable to the Depositor, its counsel, the Note
         Insurer, Moody's and S&P (it being agreed that the opinion shall
         expressly provide that the Unaffiliated Seller shall be entitled to
         rely on the opinion); and

                  (xii) an opinion or opinions of counsel for the Note Insurer,
         in each case in form and substance acceptable to the Depositor, its
         counsel, Moody's and S&P (it being agreed that the opinion shall
         expressly provide that the Unaffiliated Seller shall be entitled to
         rely on the opinion).

         (e) The Note Insurance Policy shall have been duly executed, delivered
and issued with respect to the Notes.

         (f) All proceedings in connection with the transactions contemplated by
this Agreement and all documents incident hereto shall be satisfactory in form
and substance to the Depositor and its counsel.

         (g) The Unaffiliated Seller shall have furnished the Depositor with
such other certificates of its officers or others and such other documents or
opinions as the Depositor or its counsel may reasonably request.

         Section 5.02 Conditions of Unaffiliated Seller's Obligations. The
obligations of the Unaffiliated Seller under this Agreement shall be subject to
the satisfaction, on the Closing Date, of the following conditions:

         (a) Each of the obligations of the Depositor required to be performed
by it at or prior to the Closing Date pursuant to the terms of this Agreement
shall have been duly performed and complied with and all of the representations
and warranties of the Depositor contained in this Agreement shall be true and
correct as of the Closing Date and the Unaffiliated Seller shall have received a
certificate to that effect signed by an authorized officer of the Depositor.

         (b) The Unaffiliated Seller shall have received the following
additional documents:

                  (i) this Agreement and the Sale and Servicing Agreement, and
         all documents required thereunder, in each case executed by the
         Depositor as applicable; and

                  (ii) a copy of a letter from Moody's to the Depositor to the
         effect that it has assigned a rating of "Aaa" to the Notes and a copy
         of a letter from S&P to the Depositor to the effect that it has
         assigned a rating of "AAA" to the Notes.

                  (iii) an opinion of counsel for the Indenture Trustee in form
         and substance acceptable to the Unaffiliated Seller and its counsel;

                  (iv) an opinion of counsel for the Owner Trustee in form and
         substance acceptable to the Unaffiliated Seller and its counsel;


                                       34

<PAGE>



                  (v) an opinion of counsel for the Note Insurer in form and
         substance acceptable to the Unaffiliated Seller and its counsel;

                  (vi) an opinion of the counsel for the Depositor as to
         securities and tax matters; and

                  (vii) an opinion of the counsel for the Depositor as to true
         sale matters.

         (c) The Depositor shall have furnished the Unaffiliated Seller with
such other certificates of its officers or others and such other documents to
evidence fulfillment of the conditions set forth in this Agreement as the
Unaffiliated Seller may reasonably request.

         Section 5.03 Termination of Depositor's Obligations. The Depositor may
terminate its obligations hereunder by notice to the Unaffiliated Seller at any
time before delivery of and payment of the purchase price for the Mortgage Loans
if: (a) any of the conditions set forth in Section 5.01 are not satisfied when
and as provided therein; (b) there shall have been the entry of a decree or
order by a court or agency or supervisory authority having jurisdiction in the
premises for the appointment of a conservator, receiver or liquidator in any
insolvency, readjustment of debt, marshalling of assets and liabilities or
similar proceedings of or relating to the Unaffiliated Seller, or for the
winding up or liquidation of the affairs of the Unaffiliated Seller; (c) there
shall have been the consent by the Unaffiliated Seller to the appointment of a
conservator or receiver or liquidator in any insolvency, readjustment of debt,
marshalling of assets and liabilities or similar proceedings of or relating to
the Unaffiliated Seller or of or relating to substantially all of the property
of the Unaffiliated Seller; (d) any purchase and assumption agreement with
respect to the Unaffiliated Seller or the assets and properties of the
Unaffiliated Seller shall have been entered into; or (e) a Termination Event
shall have occurred. The termination of the Depositor's obligations hereunder
shall not terminate the Depositor's rights hereunder or its right to exercise
any remedy available to it at law or in equity.

                                   ARTICLE VI

                                  MISCELLANEOUS

         Section 6.01 Notices. All demands, notices and communications hereunder
shall be in writing and shall be deemed to have been duly given if personally
delivered to or mailed by registered mail, postage prepaid, or transmitted by
telex or telegraph and confirmed by a similar mailed writing, if to the
Depositor, addressed to the Depositor at Prudential Securities Secured Financing
Corporation, One New York Plaza, 14th Floor, New York, New York 10292,
Attention: Managing Director - Asset Backed Finance Group, or to such other
address as the Depositor may designate in writing to the Unaffiliated Seller and
the Originators and if to the Unaffiliated Seller or an Originator, addressed to
the Unaffiliated Seller, 3411 Silverside Road, 103 Springer Bldg., Wilmington,
Delaware 19810, Attention: Jeffrey Ruben, or to such Originator at Balapointe
Office Centre, 111 Presidential Boulevard, Suite 127, Bala Cynwyd, Pennsylvania
19004, Attention: Mr. Anthony Santilli, Jr., or to such other address as the
Unaffiliated Seller or such Originator may designate in writing to the
Depositor.


                                       35

<PAGE>



         Section 6.02 Severability of Provisions. Any part, provision,
representation, warranty or covenant of this Agreement which is prohibited or
which is held to be void or unenforceable shall be ineffective to the extent of
such prohibition or unenforceability without invalidating the remaining
provisions hereof. Any part, provision, representation, warranty or covenant of
this Agreement which is prohibited or unenforceable or is held to be void 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 as to any Mortgage Loan shall not invalidate or render
unenforceable such provision in any other jurisdiction. To the extent permitted
by applicable law, the parties hereto waive any provision of law which prohibits
or renders void or unenforceable any provision hereof.

         Section 6.03 Agreement of Unaffiliated Seller. The Unaffiliated Seller
agrees to execute and deliver such instruments and take such actions as the
Depositor may, from time to time, reasonably request in order to effectuate the
purpose and to carry out the terms of this Agreement.

         Section 6.04 Survival. The parties to this Agreement agree that the
representations, warranties and agreements made by each of them herein and in
any Note or other instrument delivered pursuant hereto shall be deemed to be
relied upon by the other party hereto, notwithstanding any investigation
heretofore or hereafter made by such other party or on such other party's
behalf, and that the representations, warranties and agreements made by the
parties hereto in this Agreement or in any such certificate or other instrument
shall survive the delivery of and payment for the Mortgage Loans.

         Section 6.05 Effect of Headings and Table of Contents. The Article and
Section headings herein and the Table of Contents are for convenience only and
shall not affect the construction hereof.

         Section 6.06 Successors and Assigns. This Agreement shall inure to the
benefit of and be binding upon the parties hereto and their respective
successors and permitted assigns. Except as expressly permitted by the terms
hereof, this Agreement may not be assigned, pledged or hypothecated by any party
hereto to a third party without the written consent of the other party to this
Agreement and the Note Insurer; provided, however, that the Depositor may assign
its rights hereunder without the consent of the Unaffiliated Seller.

         Section 6.07 Confirmation of Intent; Grant of Security Interest. It is
the express intent of the parties hereto that the conveyance of the Mortgage
Loans by the Originators to the Unaffiliated Seller as contemplated by this
Unaffiliated Seller's Agreement be, and be treated for all purposes as, a sale
of the Mortgage Loans and that the conveyance of the Mortgage Loans by the
Unaffiliated Seller to the Depositor as contemplated by this Unaffiliated
Seller's Agreement be, and be treated for accounting purposes as, a sale of the
Mortgage Loans. It is, further, not the intention of the parties that any such
conveyance be deemed a pledge of the Mortgage Loans by the Originators to the
Unaffiliated Seller or by the Unaffiliated Seller to the Depositor to secure a
debt or other obligation of the Originators or the Unaffiliated Seller, as the
case may be. However, in the event that, notwithstanding the intent of the
parties, the Mortgage Loans are held to continue to be property of the
Originators or the Unaffiliated Seller then (a) this Unaffiliated

                                       36
<PAGE>

Seller's Agreement shall also be deemed to be a security agreement within the
meaning of Articles 8 and 9 of the Uniform Commercial Code; (b) the transfer of
the Mortgage Loans provided for herein shall be deemed to be a grant by the
Originators to the Unaffiliated Seller and by the Unaffiliated Seller to the
Depositor of a security interest in all of such parties' right, title and
interest in and to the Mortgage Loans and all amounts payable on the Mortgage
Loans in accordance with the terms thereof and all proceeds of the conversion,
voluntary or involuntary, of the foregoing into cash, instruments, securities or
other property; (c) the possession by the Depositor (or its assignee) of
Mortgage Notes and such other items of property as constitute instruments,
money, negotiable documents or chattel paper shall be deemed to be "possession
by the secured party" for purposes of perfecting the security interest pursuant
to Section 9-305 of the Uniform Commercial Code; and (d) notifications to
persons holding such property, and acknowledgments, receipts or confirmations
from persons holding such property, shall be deemed notifications to, or
acknowledgments, receipts or confirmations from, financial intermediaries,
bailees or agents (as applicable) of the Depositor (or its assignee) for the
purpose of perfecting such security interest under applicable law. Any
assignment of the interest of the Depositor pursuant to any provision hereof
shall also be deemed to be an assignment of any security interest created
hereby. The Originators, the Unaffiliated Seller and the Depositor shall, to the
extent consistent with this Unaffiliated Seller's Agreement, take such actions
as may be necessary to ensure that, if this Unaffiliated Seller's Agreement were
deemed to create a security interest in the Mortgage Loans, such security
interest would be deemed to be a perfected security interest of first priority
under applicable law and will be maintained as such throughout the term of this
Agreement.

         Section 6.08 Miscellaneous. This Agreement supersedes all prior
agreements and understandings relating to the subject matter hereof.

         Section 6.09 Amendments. (a) This Agreement may be amended from time to
time by the Originators, the Unaffiliated Seller and the Depositor by written
agreement, upon the prior written consent of the Note Insurer, without notice to
or consent of the Noteholders, and with prior written notice to the Owner
Trustee to cure any ambiguity, to correct or supplement any provisions herein,
to comply with any changes in the Code, or to make any other provisions with
respect to matters or questions arising under this Agreement which shall not be
inconsistent with the provisions of this Agreement; provided, however, that such
action shall not, as evidenced by (i) an Opinion of Counsel, at the expense of
the party requesting the change, delivered to the Indenture Trustee or (ii) a
letter from each Rating Agency confirming that such amendment will not result in
the reduction, qualification or withdrawal of the then current rating of the
Notes, adversely affect in any material respect the interests of any Noteholder;
and provided, further, that no such amendment shall reduce in any manner the
amount of, or delay the timing of, payments received on Mortgage Loans which are
required to be distributed on any Note without the consent of the Holder of such
Note, or change the rights or obligations of any other party hereto without the
consent of such party.

         (b) This Agreement may be amended from time to time by the Originators,
the Unaffiliated Seller and the Depositor with the consent of the Note Insurer,
the Majority Noteholders and the Holders of the majority of the Percentage
Interest in the Trust Certificates and with prior written notice to the Owner
Trustee for the purpose of adding any provisions to or changing in any manner or
eliminating any of the provisions of this Agreement or of modifying

                                       37
<PAGE>

in any manner the rights of the Holders; provided, however, that no such
amendment shall reduce in any manner the amount of, or delay the timing of,
payments received on Mortgage Loans which are required to be distributed on any
Note without the consent of the Holder of such Note or reduce the percentage for
each Class the Holders of which are required to consent to any such amendment
without the consent of the Holders of 100% of each Class of Notes affected
thereby.

         (c) It shall not be necessary for the consent of Holders under this
Section 6.09 to approve the particular form of any proposed amendment, but it
shall be sufficient if such consent shall approve the substance thereof.

         Section 6.10 Third-Party Beneficiaries. The parties agree that each of
the Trust, the Owner Trustee, the Note Insurer and the Indenture Trustee is an
intended third-party beneficiary of this Agreement to the extent necessary to
enforce the rights and to obtain the benefit of the remedies of the Depositor
under this Agreement which are assigned to the Trust and then to the Indenture
Trustee, for the benefit of the Noteholders and the Note Insurer, pursuant to
the Sale and Servicing Agreement and the Indenture, respectively, and to the
extent necessary to obtain the benefit of the enforcement of the obligations and
covenants of the Unaffiliated Seller under Section 4.01 and 4.04(a)(ii) of this
Agreement. The parties further agree that Prudential Securities Incorporated and
each of its directors and each person or entity who controls Prudential
Securities Incorporated or any such person, within the meaning of Section 15 of
the Securities Act (each, an "Underwriter Entity") is an intended third-party
beneficiary of this Agreement to the extent necessary to obtain the benefit of
the enforcement of the obligations and covenants of the Unaffiliated Seller with
respect to each Underwriter Entity under Section 4.04(a)(i) of this Agreement.

         Section 6.11 GOVERNING LAW; CONSENT TO JURISDICTION; WAIVER OF JURY
TRIAL. (a) THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE
WITH, THE INTERNAL LAWS (AS OPPOSED TO CONFLICT OF LAWS PROVISIONS) OF THE STATE
OF NEW YORK.

         (b) THE ORIGINATORS, THE DEPOSITOR AND THE UNAFFILIATED SELLER EACH
HEREBY SUBMIT TO THE NON-EXCLUSIVE JURISDICTION OF THE COURTS OF THE STATE OF
NEW YORK AND THE UNITED STATES DISTRICT COURT LOCATED IN THE BOROUGH OF
MANHATTAN IN NEW YORK CITY, AND EACH WAIVES PERSONAL SERVICE OF ANY AND ALL
PROCESS UPON IT AND CONSENTS THAT ALL SUCH SERVICE OF PROCESS BE MADE BY
REGISTERED MAIL DIRECTED TO THE ADDRESS SET FORTH IN SECTION 6.01 OF THIS
AGREEMENT AND SERVICE SO MADE SHALL BE DEEMED TO BE COMPLETED FIVE DAYS AFTER
THE SAME SHALL HAVE BEEN DEPOSITED IN THE U.S. MAIL, POSTAGE PREPAID. THE
ORIGINATORS, THE DEPOSITOR AND THE UNAFFILIATED SELLER EACH HEREBY WAIVES ANY
OBJECTION BASED ON FORUM NON CONVENIENS, AND ANY OBJECTION TO VENUE OF ANY
ACTION INSTITUTED HEREUNDER AND CONSENTS TO THE GRANTING OF SUCH LEGAL OR
EQUITABLE RELIEF AS IS DEEMED APPROPRIATE BY THE COURT. NOTHING IN THIS SECTION
SHALL AFFECT THE RIGHT OF THE ORIGINATORS, THE DEPOSITOR AND THE UNAFFILIATED
SELLER TO SERVE LEGAL PROCESS IN ANY OTHER MANNER

                                       38
<PAGE>

PERMITTED BY LAW OR AFFECT EITHERS' RIGHT TO BRING ANY ACTION OR PROCEEDING IN
THE COURTS OF ANY OTHER JURISDICTION.

         (c) THE ORIGINATORS, THE DEPOSITOR AND THE UNAFFILIATED SELLER EACH
HEREBY WAIVE ANY RIGHT TO HAVE A JURY PARTICIPATE IN RESOLVING ANY DISPUTE,
WHETHER SOUNDING IN CONTRACT, TORT, OR OTHERWISE ARISING OUT OF, CONNECTED WITH,
RELATED TO, OR IN CONNECTION WITH THIS AGREEMENT. INSTEAD, ANY DISPUTE RESOLVED
IN COURT WILL BE RESOLVED IN A BENCH TRIAL WITHOUT A JURY.

         Section 6.12 Execution in Counterparts. This Agreement may be executed
in any number of counterparts, each of which so executed shall be deemed to be
an original, but all such counterparts shall together constitute but one and the
same instrument.

                  [Remainder of Page Intentionally Left Blank]


                                      39
<PAGE>

         IN WITNESS WHEREOF, the parties to this Unaffiliated Seller's Agreement
have caused their names to be signed by their respective officers thereunto duly
authorized as of the date first above written.

                                    PRUDENTIAL SECURITIES SECURED FINANCING
                                       CORPORATION



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

                                    ABFS 1999-4, INC.



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

                                    AMERICAN BUSINESS CREDIT, INC.



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

                                    HOMEAMERICAN CREDIT, INC., D/B/A UPLAND
                                       MORTGAGE



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

                                    NEW JERSEY MORTGAGE AND INVESTMENT CORP.



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



<PAGE>



                                                                    SCHEDULE I

                             MORTGAGE LOAN SCHEDULE


<PAGE>



                                                                     EXHIBIT A

                               FORM OF SUBSEQUENT
                               TRANSFER AGREEMENT

         This SUBSEQUENT TRANSFER AGREEMENT, dated as of ________, 1999 (the
"Subsequent Transfer Date"), is entered into by and among ABFS 1999-4, INC., as
unaffiliated seller (the "Unaffiliated Seller"), AMERICAN BUSINESS CREDIT, INC.,
as an originator ("ABC"), HOMEAMERICAN CREDIT, INC. D/B/A UPLAND MORTGAGE, as an
originator ("Upland"), NEW JERSEY MORTGAGE AND INVESTMENT CORP., as an
originator ("NJMIC") (ABC, Upland and NJMIC are collectively referred to herein
as the "Originators"), and PRUDENTIAL SECURITIES SECURED FINANCING CORPORATION,
as depositor (the "Depositor").

                              W I T N E S S E T H:

         Reference is hereby made to (x) that certain Unaffiliated Seller's
Agreement, dated as of December 1, 1999 (the "Unaffiliated Seller's Agreement"),
by and among the Unaffiliated Seller, the Originators and the Depositor, and (y)
that certain Indenture, dated as of December 1, 1999 (the "Indenture"), by and
between the ABFS Mortgage Loan Trust 1999-4 (the "Trust") and The Bank of New
York, as indenture trustee (the "Indenture Trustee"). Pursuant to the
Unaffiliated Seller's Agreement, the Originators have agreed to sell, assign and
transfer, and the Unaffiliated Seller has agreed to accept, from time to time,
Subsequent Mortgage Loans (as defined below), and the Unaffiliated Seller has
agreed to sell, assign and transfer, and the Depositor has agreed to accept,
from time to time, such Subsequent Mortgage Loans. The Unaffiliated Seller's
Agreement provides that each such sale of Subsequent Mortgage Loans be evidenced
by the execution and delivery of a Subsequent Transfer Agreement such as this
Subsequent Transfer Agreement.

         The assets sold to the Unaffiliated Seller, and then sold to the
Depositor pursuant to this Subsequent Transfer Agreement consist of (a) the
Subsequent Mortgage Loans in Pool I, Pool II and Pool III listed in the Mortgage
Loan Schedule attached hereto (including property that secures a Subsequent
Mortgage Loan that becomes an REO Property), including the related Mortgage
Files delivered or to be delivered to the Collateral Agent, on behalf of the
Indenture Trustee, including all payments of principal received, collected or
otherwise recovered after the Subsequent Cut-Off Date for each Subsequent
Mortgage Loan, all payments of interest due on each Subsequent Mortgage Loan
after the Subsequent Cut-Off Date therefor whenever received and all other
proceeds received in respect of such Subsequent Mortgage Loans, (b) the
Insurance Policies relating to the Subsequent Mortgage Loans, and (c) all
proceeds of the conversion, voluntary or involuntary, of any of the foregoing
into cash or other liquid assets, including, without limitation, all insurance
proceeds and condemnation awards.

         The "Subsequent Mortgage Loans" are those listed on the Schedule of
Mortgage Loans attached hereto. The Aggregate Principal Balance of such
Subsequent Mortgage Loans as of the Subsequent Cut-Off Date is $__________ in
Pool I,$__________ in Pool II and $______ in Pool III.



<PAGE>



         NOW, THEREFORE, in consideration of the mutual covenants contained
herein, and other good and valuable consideration, the receipt and adequacy of
which is hereby acknowledged, the parties hereto agree as follows:

         Section 1. Definitions. For the purposes of this Subsequent Transfer
Agreement, capitalized terms used herein but not otherwise defined shall have
the respective meanings assigned to such terms in Appendix I to the Indenture.

         Section 2. Sale, Assignment and Transfer. In consideration of the
receipt of $__________ (such amount being approximately 100% of the Aggregate
Principal Balance of the Subsequent Mortgage Loans) from the Unaffiliated
Seller, each of the Originators hereby sells, assigns and transfers to the
Unaffiliated Seller, without recourse, all of their respective right, title and
interest in, to, and under the Subsequent Mortgage Loans and related assets
described above, whether now existing or hereafter arising.

         In consideration of receipt of $__________ (such amount being
approximately 100% of the Aggregate Principal Balance of the Subsequent Mortgage
Loans) from the Depositor, the Unaffiliated Seller hereby sells, assigns and
transfers to the Depositor, without recourse, all of its right, title and
interest in, to, and under the Subsequent Mortgage Loans and related assets
described above, whether now existing or hereafter arising.

         In connection with each such sale, assignment and transfer, the
Originators and the Unaffiliated Seller shall satisfy the document delivery
requirements set forth in Section 2.05 of the Sale and Servicing Agreement with
respect to each Subsequent Mortgage Loan.

         Section 3. Representations and Warranties of the Originators and the
Unaffiliated Seller. With respect to each Subsequent Mortgage Loan, each of the
Originators and the Unaffiliated Seller hereby remake each of the
representations, warranties and covenants made by the Originators and the
Unaffiliated Seller in Section 3.03 of the Unaffiliated Seller's Agreement, on
which the Depositor relies in accepting the Subsequent Mortgage Loans. Such
representations and warranties speak as of the Subsequent Transfer Date unless
otherwise indicated, and shall survive each sale, assignment, transfer and
conveyance of the Subsequent Mortgage Loans to the Depositor.

         Each of the Originators and the Unaffiliated Seller hereby acknowledge
that the Depositor is transferring the Subsequent Mortgage Loans to the Trust,
and that the Trust is pledging the Subsequent Mortgage Loans to the Indenture
Trustee, for the benefit of the Noteholders and the Note Insurer, on the date
hereof. Each of the Originators and the Unaffiliated Seller hereby acknowledge
and agree that the Depositor may assign to the Trust, and the Trust may assign
to the Indenture Trustee, for the benefit of the Noteholders and the Note
Insurer, its interest in the representations and warranties set forth in this
Section 3. Each of the Originators and the Unaffiliated Seller agrees that, upon
such assignment to the Trust and pledge to the Indenture Trustee, such
representations, warranties, agreements and covenants will run to and be for the
benefit of the Indenture Trustee and the Indenture Trustee may enforce, without
joinder of the Depositor or the Trust, the repurchase and indemnification
obligations of the Unaffiliated Seller and the Originators set forth herein with
respect to breaches of such representations, warranties, agreements and
covenants.


                                       2

<PAGE>



         Section 4. Repurchase of Subsequent Mortgage Loans. Upon discovery by
any of the Depositor, the Unaffiliated Seller, an Originator, the Indenture
Trustee, the Servicer on behalf of the Trust, the Note Insurer or any Noteholder
of a breach of any of the representations and warranties made by the Originators
and the Unaffiliated Seller pursuant to Section 3.03 of the Unaffiliated
Seller's Agreement or this Section 3, the party discovering such breach shall
give prompt written notice to each other Person; provided, that the Indenture
Trustee shall have no duty to inquire or to investigate the breach of any such
representations and warranties. The Originators and the Unaffiliated Seller will
be obligated to repurchase a Subsequent Mortgage Loan which breaches a
representation or warranty in accordance with the provisions of Section 4.02 of
the Sale and Servicing Agreement or to indemnify as described in Section 3.05(g)
of the Unaffiliated Seller's Agreement. Such repurchase and indemnification
obligation of the Originators and the Unaffiliated Seller shall constitute the
sole remedy against the Originators and the Unaffiliated Seller, and the Trust
for such breach available to the Servicer, the Trust, the Owner Trustee, the
Depositor, the Indenture Trustee, the Note Insurer and the Noteholders.

         Section 5. Amendment. This Subsequent Transfer Agreement may be amended
from time to time by the Originators, the Unaffiliated Seller and the Depositor
only with the prior written consent of the Note Insurer (or, in the event of a
Note Insurer Default, the Majority Holders), and to the extent such amendment
materially affects the interests of the Owner Trustee, upon written notice to
the Owner Trustee.

         Section 6. GOVERNING LAW; WAIVER OF JURY TRIAL. THIS SUBSEQUENT
TRANSFER AGREEMENT AND ANY AMENDMENT HEREOF PURSUANT TO SECTION 5 SHALL BE
CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE STATE OF NEW YORK.
EACH PARTY HERETO HEREBY IRREVOCABLY WAIVES ALL RIGHTS TO TRIAL BY JURY IN ANY
ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS SUBSEQUENT TRANSFER
AGREEMENT OR ANY TRANSACTION CONTEMPLATED HEREBY AND FOR ANY COUNTERCLAIM
THEREIN.

         Section 7. Counterparts. This Subsequent Transfer Agreement may be
executed in counterparts (and by different parties on separate counterparts),
each of which shall be an original, but all of which shall constitute one and
the same instrument.

         Section 8. Binding Effect; Third-Party Beneficiaries. This Subsequent
Transfer Agreement will inure to the benefit of and be binding upon the parties
hereto, the Note Insurer, the Trust, the Owner Trustee, the Noteholders, and
their respective successors and permitted assigns.

         Section 9. Headings. The headings herein are for purposes of reference
only and shall not otherwise affect the meaning or interpretation of any
provision hereof.

         Section 10. Exhibits. The exhibits attached hereto and referred to
herein shall constitute a part of this Subsequent Transfer Agreement and are
incorporated into this Subsequent Transfer Agreement for all purposes.


                                       3

<PAGE>



         Section 11. Intent of the Parties; Security Agreement. The Originators,
the Unaffiliated Seller and the Depositor intend that the conveyance of all
right, title and interest in and to the Subsequent Mortgage Loans and related
assets described above by the Originators to the Unaffiliated Seller and by the
Unaffiliated Seller to the Depositor pursuant to this Subsequent Transfer
Agreement shall be, and be construed as, a sale of the Subsequent Mortgage Loans
from the Originators to the Unaffiliated Seller and from the Unaffiliated Seller
to the Depositor.

         It is, further, not intended that such conveyances be deemed to be
pledges of the Subsequent Mortgage Loans by the Originators to the Unaffiliated
Seller and by the Unaffiliated Seller to the Depositor to secure a debt or other
obligation of the Originators or of the Unaffiliated Seller, as the case may be.
However, in the event that the Subsequent Mortgage Loans are held to be property
of the Originators or the Unaffiliated Seller, or if for any reason this
Subsequent Transfer Agreement is held or deemed to create a security interest in
the Subsequent Mortgage Loans, then it is intended that: (a) this Subsequent
Transfer Agreement shall also be deemed to be a security agreement within the
meaning of Articles 8 and 9 of the Uniform Commercial Code of any other
applicable jurisdiction; (b) the conveyance provided for in this Subsequent
Transfer Agreement shall be deemed to be a grant by the Originators to the
Unaffiliated Seller and by the Unaffiliated Seller to the Depositor of a
security interest in all of the Originators' and the Unaffiliated Seller's
respective right, title and interest, whether now owned or hereafter acquired,
in and to the Subsequent Mortgage Loans and related assets described above. The
Originators and the Unaffiliated Seller, as applicable, shall, to the extent
consistent with this Subsequent Transfer Agreement, take such reasonable actions
as may be necessary to ensure that, if this Subsequent Transfer Agreement were
deemed to create a security interest in the Subsequent Mortgage Loans and the
other property described above, such interest would be deemed to be a perfected
security interest of first priority under applicable law and will be maintained
as such throughout the term of this Subsequent Transfer Agreement.

                  [Remainder of Page Intentionally Left Blank]


                                       4

<PAGE>



IN WITNESS WHEREOF, the Originators, the Unaffiliated Seller and the Depositor
have caused this Subsequent Transfer Agreement to be duly executed by their
respective officers as of the day and year first above written.

                                    AMERICAN BUSINESS CREDIT, INC.


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

                                    HOMEAMERICAN CREDIT, INC. D/B/A
                                        UPLAND MORTGAGE


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

                                    NEW JERSEY MORTGAGE AND
                                        INVESTMENT, INC.


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

                                    ABFS 1999-4, INC.


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

                                    PRUDENTIAL SECURITIES SECURED
                                        FINANCING CORPORATION


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




                [Signature Page to Subsequent Transfer Agreement]