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                           RECEIVABLES SALE AGREEMENT


                                  by and among


                        AMERICAN BUSINESS LEASING, INC.,
                                 as Originator,


                            ABFS FINANCE LLC 1999-A,
                                  as Transferor


                                       and


                            ABFS RESIDUAL LLC 1999-A,
                                  as Transferor








                            Dated as of June 1, 1999


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                  This RECEIVABLES SALE AGREEMENT, dated as of June 1, 1999
(this "Agreement"), by and among AMERICAN BUSINESS LEASING, INC., a Pennsylvania
corporation (the "Originator"), ABFS FINANCE LLC 1999-A, a Delaware limited
liability company ("Transferor I"), and ABFS RESIDUAL LLC 1999-A, a Delaware
limited liability company ("Transferor II" and, together with Transferor I, the
"Transferors").


                                   WITNESSETH:


                  WHEREAS, the Originator, in the ordinary course of its
business, acquires and originates equipment contracts in the United States; and

                  WHEREAS, the Originator desires to convey, transfer,
contribute and assign all of its right title and interest in and to (x)
Contracts to Transferor I, and (y) the ownership interest or security interest
of the Originator in each item of Equipment and any Residual Receipts to
Transferor II, each upon the terms and conditions hereinafter set forth; and

                  WHEREAS, the Originator and the Transferors agree that all
representations, warranties, covenants and agreements made by it herein shall be
for the benefit of the Depositor, the Collateral Agent, the Noteholders, the
Residual Holders, the Note Insurer, the Owner Trustee and the Indenture Trustee.

                  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:


                                    ARTICLE I

                                   DEFINITIONS

                  SECTION 1.01 Definitions. Whenever used in this Agreement,
capitalized terms used herein but not defined herein shall have the meanings set
forth in Annex A to the Indenture, dated as of June 1, 1999 (the "Indenture"),
by and among ABFS Equipment Contract Trust 1999-A, as issuer (the "Issuer"), the
Originator, as servicer (in such capacity, the "Servicer"), and The Chase
Manhattan Bank, as indenture trustee (the "Indenture Trustee") and as back-up
servicer (the "Back-up Servicer").

                  SECTION 1.02 Other Definitional Provisions.

                      (a) Terms used in Related Documents. Each term defined in
this Agreement will have the meaning assigned to such term in this Agreement
when used in any certificate or other document made or delivered pursuant to
this Agreement, unless such term is otherwise defined therein.

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                      (b) Accounting Terms. As used in this Agreement,
accounting terms which are not defined pursuant to Section 1.01 have the
respective meanings given to them under GAAP, as in effect on the date of this
Agreement. To the extent that the definitions of accounting terms in this
Agreement are inconsistent with the meanings of such terms under GAAP, the
definitions contained in this Agreement will control.

                      (c) "Hereof," etc. The words "hereof," "herein" and
"hereunder" and words of similar import when used in this Agreement will refer
to this Agreement as a whole and not to any particular provision of this
Agreement; and Article, Section, Schedule and Exhibit references contained in
this Agreement are references to Articles, Sections, Schedules and Exhibits in
or to this Agreement, unless otherwise specified.

                      (d) Number and Gender. Each defined term used in this
Agreement has a comparable meaning when used in its plural or singular form.
Each gender-specific term used in this Agreement has a comparable meaning
whether used in a masculine, feminine or gender-neutral form.

                      (e) Including. Whenever the term "including" (whether or
not that term is followed by the phrase "but not limited to" or "without
limitation" or words of similar effect) is used in this Agreement in connection
with a listing of items within a particular classification, that listing will be
interpreted to be illustrative only and will not be interpreted as a limitation
on, or exclusive listing of, the items within that classification.


                                   ARTICLE II

                           TRANSFER OF CONVEYED ASSETS

                  SECTION 2.01 Direction; Acquisition; Capital Contribution. (a)
Subject to the terms and condition of this Agreement, the Originator hereby
agrees to sell, convey and contribute, on the Closing Date, all of its right,
title and interest in and to the Initial Conveyed Assets to the Transferors, as
set forth in subsection (c) below. Upon receipt of the consideration specified
in subsection (d) below, the Originator hereby releases all of its right, title
and interest in, to and under the related Initial Conveyed Assets, such receipt
being hereby acknowledged by the execution of this Agreement by the Originator.

                      (b) Each sale, conveyance and contribution of Subsequent
Conveyed Assets shall be evidenced by the execution and delivery by the
Originator and Transferors of a Subsequent Receivables Sale Agreement in the
form of Exhibit A hereto. Each such sale, conveyance and contribution shall be
effective as of the related Subsequent Funding Date.

                      (c) The transfers occurring on each Conveyance Date shall
be consummated such that those Conveyed Assets which are considered "financial
assets" within the meaning of the Statement of Financial Accountings Standards
No. 125 ("FAS 125") (such Conveyed Assets include, without limitation, the
Contracts) (other than any Contract which is an "operating" or "true" lease))
are acquired by Transferor I, and such that those Conveyed Assets which are not
considered "financial assets" within the meaning of FAS 125 (such Conveyed
Assets include, without limitation, any Contract which is an "operating" or
"true" lease, the ownership interest or security interest of the Originator in
each item of Equipment and any Residual Receipts) are acquired by Transferor II.

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                      (d) In consideration of (x) the receipt by the Originator
of a 99% membership interest in each of the Transferors, (y) the receipt by the
Originator of $_____________ from the Transferors and (z) other good and
valuable consideration, the Originator hereby conveys to the applicable
Transferor all of its right, title and interest in, to and under the Initial
Conveyed Assets, whether now existing or hereinafter arising, without recourse,
except as may be set forth herein. The purchase price for any Subsequent
Conveyed Assets will be paid by the applicable Transferor to the Originator in
immediately available funds on the related Subsequent Funding Date in accordance
with the terms of the related Subsequent Receivables Sale Agreement. In
connection with the transfers on each Conveyance Date, the Originator hereby
makes a capital contribution to the related Transferor in the amount by which
the fair market value of the related Conveyed Assets exceeds the cash
consideration received by the Originator in connection therewith.

                      (e) In connection with each sale, contribution and
conveyance of Conveyed Assets, the Originator agrees to record and file, at its
own expense, financing statements (and thereafter will file continuation
statements with respect to such financing statements) with respect to such
Conveyed Assets, meeting the requirements of applicable state law in such manner
and in such jurisdictions as are necessary to perfect and to maintain the
perfection of, (x) the transfer, conveyance and contribution of such Conveyed
Assets (subject to the Filing Requirements with respect to the Equipment) from
the Originator to the related Transferors, (y) the pledge of such Conveyed
Assets (subject to the Filing Requirements with respect to the Equipment) from
the Transferors to the Trust as security for the Pledged Notes, and (z) the
pledge of the related Pledged Property from the Trust to the Indenture Trustee,
on behalf of the Noteholders and the Note Insurer, and to deliver a file-stamped
copy of such financing statements or other evidence of such filings to the
related Transferor (and copies to the Indenture Trustee and the Note Insurer) on
or prior to each Conveyance Date; provided, however, that the Contract Files
(including each original executed Contract) will not be physically delivered to
either of the Transferors, but instead will be held by the Collateral Agent, on
behalf of the Indenture Trustee, as bailee for the Noteholders and the Note
Insurer. In addition, the Originator will assign to the Transferors any UCC-1
financing statement filed by the Originator against the Source with respect to
any Contract originated by a Source.

                      (f) In connection with each sale, contribution and
conveyance of Conveyed Assets, the Originator shall, at its own expense, on or
prior to the related Conveyance Date, and with respect to Substitute Contracts,
as soon as possible, but in no event later than two (2) Business Days after the
related Conveyance Date (i) cause the Contract Management System to be marked
with a specified code (the "Contract Management Code") to show that such
Conveyed Assets have been assigned and transferred to the Transferors in
accordance with this Agreement or a Subsequent Receivables Transfer Agreement,
as applicable, subsequently pledged by the Transferors to the Trust in
accordance with the Receivables Pledge Agreement or a Subsequent Receivables
Pledge Agreement, as applicable, and such security interest was assigned by the
Trust to the Indenture Trustee, on behalf of the Noteholders and the Note
Insurer, pursuant to the Indenture or an Assignment, as applicable, and (ii)
cause the Servicer to prepare and hold on behalf of the Transferors and the
Indenture Trustee, (x) the List of Contracts on or prior to the Closing Date and
(y) the List of Contracts as supplemented by the List of Subsequent Contracts on
or prior to each Subsequent Funding Date. Pursuant to Section 3.04, the
Originator from time to time may make capital contributions of (A) Substitute
Contracts to Transferor I and (B) the ownership interest or security interest of
the Originator in each item of Substitute Equipment and any Residual Receipts to
Transferor II, at any time pursuant to Section 3.04. Upon delivery of any such
List of Subsequent Contracts or List of Substitute Contracts, the List of
Contracts shall be deemed amended to incorporate therein the information
contained in such List of Subsequent Contracts or List of Substitute Contracts,
as applicable.

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                      (g) Except for the obligations of the Originator pursuant
to Section 3.03 and Article IV of the Indenture with respect to any breach of a
representation, warranty or covenant made herein, the sale, contribution and
conveyance of the Contracts will be without recourse to the Originator.

                  SECTION 2.02 Custody of Contract Files. In connection with the
sale, contribution, assignment, transfer and conveyance of the Conveyed Assets
to the Transferors pursuant to this Agreement, the pledge of the Conveyed Assets
to the Trust, and the pledge of the Pledged Assets to the Indenture Trustee, for
the benefit of the Noteholders and the Note Issuer, the Collateral Agent, on
behalf of the Indenture Trustee, for the benefit of the Noteholders and the Note
Insurer, will retain the Contract Files, any related evidence of insurance and
payments and original executed counterparts of each Contract in accordance with
the terms of the Indenture.

                  SECTION 2.03 Intention of the Parties; Grant of Security
Interest. It is the intention of the parties hereto that each transfer of
Conveyed Assets to be made pursuant to the terms hereof shall constitute a sale
or capital contribution of (x) the Contracts by the Originator to Transferor I,
and (y) the ownership interest or security interest of the Originator in each
item of Equipment and any Residual Receipts by the Originator to Transferor II,
and, in either case, not a loan. In the event, however, that a court of
competent jurisdiction were to hold that any such transfer constitutes a loan
and not a sale or capital contribution, it is the intention of the parties
hereto that this Agreement is deemed to be a security agreement and that the
Originator shall be deemed to have granted to the related Transferor as of the
date hereof a first priority perfected security interest in all of the
Originator's right, title and interest in, to and under the related Conveyed
Asset, and all income and proceeds thereof.


                                   ARTICLE III

                         REPRESENTATIONS AND WARRANTIES

                  SECTION 3.01 Representations and Warranties of the Originator.
The Originator hereby makes the following representations and warranties for the
benefit of the Indenture Trustee, the Depositor, the Collateral Agent, the
Noteholders, the Note Insurer and the Transferors. Such representations and
warranties are made as of the Closing Date (with respect to Initial Conveyed
Assets), any Subsequent Funding Date (with respect to Subsequent Conveyed Assets
transferred to the Transferors on such date) or any Transfer Date (with respect
to Substitute Conveyed Assets transferred to the Transferors on such date) and
shall survive each sale, contribution, assignment, transfer and conveyance by
the Originator of the Conveyed Assets to the Transferors and their respective
successors and assigns.

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                      (a) Organization and Good Standing. The Originator is a
         corporation duly organized, validly existing and in good standing,
         under the laws of the state of its incorporation, with corporate power
         and authority to own its properties and to conduct its business as such
         properties are currently owned and such business is currently
         conducted, and had at all relevant times, and now has, power,
         authority, and legal right to acquire and own the Conveyed Assets;

                      (b) Due Qualification. The Originator is qualified as a
         foreign corporation in any state where it is required to be so
         qualified to conduct its business and enforce the Source Agreements to
         which it is a party, and has obtained all necessary licenses, consents,
         approvals, authorizations, registrations or declarations as required by
         any Person or any Governmental Authority under federal and state law,
         in each case, where the failure to be so qualified, licensed, consented
         to, authorized, registered, declared or approved could reasonably be
         expected to materially and adversely affect the ability of the
         Originator to execute and deliver, or comply with the terms of, this
         Agreement or any other Transaction Document to which it is a party;

                      (c) Power and Authority. The Originator has the corporate
         power and authority to execute and deliver this Agreement, the Source
         Agreements to which it is a party, the Contracts and any other
         Transaction Document to which it is a party, and to carry out their
         respective terms; the Originator has duly authorized the sale,
         contribution, assignment, transfer and conveyance to the Transferors of
         the Conveyed Assets by all necessary corporate action; and the
         execution, delivery, and performance of this Agreement, the Source
         Agreements, the Contracts and any other Transaction Document to which
         it is a party, has been duly authorized by the Originator by all
         necessary corporate action;

                      (d) Due Execution and Delivery. Each of this Agreement,
         the Source Agreements, the Contracts and any other Transaction Document
         to which it is a party has been duly executed and delivered on behalf
         of the Originator;

                      (e) Valid Assignment; Binding Obligations. This Agreement
         constitutes a valid sale, contribution, assignment, transfer and
         conveyance to the Transferors of all right, title, and interest of the
         Originator in, to and under the Conveyed Assets and the Conveyed Assets
         will be held by the Transferors free and clear of any Lien of any
         Person claiming, through or under the Originator, except for Liens
         permitted under, or to be created by the Indenture; and this Agreement,
         and the other Transaction Documents to which it is a party, when duly
         executed and delivered, will constitute legal, valid, and binding
         obligations of the Originator enforceable against the Originator in
         accordance with their respective terms subject as to enforceability to
         applicable bankruptcy, reorganization, insolvency, moratorium or other
         laws affecting creditors' rights generally and to general principles of
         equity (regardless of whether enforcement is sought in a proceeding in
         equity or at law);

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                      (f) No Violation. The consummation of the transactions
         contemplated by, and the fulfillment of the terms of, this Agreement,
         the Source Agreements, the Contracts and the other Transaction
         Documents to which it is a party will not conflict with, result in any
         breach of any of the terms and provisions of, or constitute (with or
         without notice or lapse of time) a default under, the articles of
         incorporation or bylaws of the Originator, or any material term of any
         indenture, agreement, mortgage, deed of trust, or other instrument to
         which the Originator is a party or by which it is bound, or result in
         the creation or imposition of any Lien upon any of its properties
         pursuant to the terms of any such indenture, agreement, mortgage, deed
         of trust, or other instrument, other than this Agreement, or violate
         any law or any order, injunction, writ, rule, or regulation applicable
         to the Originator of any court or of any federal or state regulatory
         body, administrative agency, or other Governmental Authority having
         jurisdiction over the Originator or any of its properties which would
         have a material adverse effect on the Conveyed Assets;

                      (g) No Proceedings. There are no proceedings or
         investigations pending, or, to the knowledge of the Originator,
         threatened, before any court, regulatory body, administrative agency,
         or other tribunal or Governmental Authority (A) asserting the
         invalidity of this Agreement, (B) seeking to prevent the consummation
         of any of the transactions contemplated by this Agreement, or (C)
         seeking any determination or ruling that might (in the reasonable
         judgment of the Originator ) materially and adversely affect the
         performance by the Originator of its obligations under, or the validity
         or enforceability of, this Agreement;

                      (h) Tax Returns. The Originator has filed on a timely
         basis all tax returns (federal, state and local) required to be filed
         and has paid or made adequate provisions for the payment of all taxes,
         assessments and other governmental charges due from the Originator;

                      (i) Pensions. Each pension plan or profit sharing plan to
         which the Originator is a party has been fully funded in accordance
         with the obligations of the Originator set forth in such plan;

                      (j) Valid Business Reasons. The Originator has valid
         business reasons for selling its interests in the Conveyed Assets
         rather than obtaining a loan with the Conveyed Assets as collateral;

                      (k) Insolvency. The Originator is not insolvent nor will
         it be rendered insolvent by the transactions contemplated by this
         Agreement and the Originator has an adequate amount of capital to
         conduct its business in the ordinary course and to carry out its
         obligations hereunder and under each Transaction Document to which it
         is a party;

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                      (l) Principal Place of Business. The principal place of
         business and chief executive office of the Originator is located at the
         respective addresses set forth herein and, there are now no, and during
         the past four months there have not been, any other locations where the
         Originator is located (as that term is used in the UCC in the state of
         such location) except that, with respect to such changes occurring
         after the date of this Agreement, as shall have been specifically
         disclosed to the Servicer, the Depositor, the Collateral Agent, the
         Note Insurer and the Indenture Trustee in writing;

                      (m) Accounting and Tax Treatment. The Originator will
         treat the assignment of the related Conveyed Assets to the Transferors
         pursuant to Article II as a sale and contribution of the Conveyed
         Assets to the capital of the related Transferor for Federal income tax
         purposes, and as a contribution for financial reporting and accounting
         purposes; the Originator will respond to any inquiries from third
         parties by indicating that the Conveyed Assets are owned by the
         Transferors;

                      (n) Legal Name. The legal name of the Originator is as set
         forth in the signature line of this Agreement and the Originator has
         not changed its name since its incorporation and since its
         incorporation, the Originator has not used, nor does the Originator now
         use, any trade names, fictitious names, assumed names or "doing
         business as" names;

                      (o) Material Adverse Change. Since March 31, 1999, no
         event has occurred and is continuing which materially and adversely
         affects the Originator's operations, including, without limitation, the
         ability of the Originator to perform the transactions contemplated
         hereunder; and

                      (p) Fair Consideration. The consideration received by the
         Originator as set forth herein is fair consideration having value
         reasonably equivalent to or in excess of the value of the related
         Conveyed Assets conveyed by it and the performance of the Originator's
         obligations hereunder.; and

                  SECTION 3.02 Representations and Warranties of the
Transferors. Each of the Transferors hereby makes the following representations
and warranties for the benefit of the Originator, the Note Insurer, the
Depositor, the Collateral Agent, the Indenture Trustee and the Noteholders. Such
representations and warranties speak as of the Closing Date, each Subsequent
Funding Date and each Transfer Date.

                      (a) Organization and Good Standing. Each of the
         Transferors is a limited liability company duly organized and validly
         existing in good standing under the laws of the State of Delaware, with
         full power and authority to own its properties and to conduct its
         business as presently conducted and has the power, authority and legal
         right to acquire and own the related Conveyed Assets;

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                      (b) Due Qualification. Each of the Transferors is duly
         qualified to do business as a foreign limited liability company in good
         standing, and has obtained all necessary licenses and approvals in all
         jurisdictions in which the ownership or lease of property or the
         conduct of its business requires such qualification, except to the
         extent that the failure to be so qualified, licensed or approved would
         not, in the aggregate, materially and adversely affect the ability of
         such Transferor to comply with the terms of this Agreement and the
         other Transaction Documents to which it is a party;

                      (c) Power and Authority. Each of the Transferors has the
         power and authority to execute and deliver this Agreement and the other
         Transaction Documents to which it is a party and to carry out their
         respective terms; and the execution, delivery, and performance of this
         Agreement and other Transaction Documents to which it is a party have
         been duly authorized by such Transferor by all necessary action;

                      (d) Due Execution and Delivery. This Agreement and the
         other Transaction Documents to which it is a party have been duly
         executed and delivered on behalf of each Transferor;

                      (e) Binding Obligations. This Agreement and the other
         Transaction Documents to which it is a party constitute legal, valid,
         and binding obligations of each Transferor and are enforceable in
         accordance with their respective terms subject as to enforceability to
         applicable bankruptcy, reorganization, insolvency, moratorium or other
         laws affecting creditors' rights generally and to general principles of
         equity (regardless of whether enforcement is sought in a proceeding in
         equity or at law);

                      (f) No Violation. The consummation of the transactions
         contemplated by and the fulfillment of the terms of this Agreement and
         other Transaction Documents to which it is a party will not conflict
         with, result in any breach of any of the terms and provisions of, or
         constitute (with or without notice of lapse of time) a default under,
         the Certificate of Formation or Limited Liability Company Agreement of
         either Transferor, or any material term to any indenture to which
         either Transferor is a party or violate any law or any order,
         injunction, writ, rule or regulation applicable to either Transferor of
         any court or of any federal or state regulatory body, administrative
         agency or other Governmental Authority having jurisdiction over either
         Transferor or any of its properties which would have a material adverse
         effect on the Conveyed Assets;

                      (g) Membership Interests. The Originator is the registered
         owner of 99% of the membership interests of each of the Transferors,
         each of which are owned of record, free and clear of all mortgages,
         assignments and pledges, and security interests;

                      (h) No Proceedings. There are no proceedings or
         investigations pending or, to the knowledge of each of the Transferors,
         threatened, before any court, regulatory body, administrative agency or
         other tribunal or governmental instrumentality (A) asserting the
         invalidity of or any of the Transaction Documents, (B) seeking to
         prevent the consummation of any of the transactions contemplated by any
         of the Transaction Documents or (C) seeking any determination or ruling
         that would materially and adversely affect the performance by either
         Transferor of its obligations under, or the validity or enforceability
         of, any of the Transaction Documents;

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                      (i) Approvals and Compliance. All approvals,
         authorizations, consents, orders or other actions of any person,
         corporation or other organization, or of any court, governmental agency
         or body or official, required in connection with the execution and
         delivery of the Transaction Documents, have been or will be taken or
         obtained on or prior to the Closing Date and each Transferor is in
         compliance with all applicable laws, rules, regulations and orders with
         respect to such Transferor, its business and properties and all
         Conveyed Assets, except to the extent that non-compliance, or failure
         to be so approved, authorized or consented to, would not, in the
         aggregate, materially and adversely affect the ability of such
         Transferor to comply with the terms of this Agreement and the other
         Transaction Documents to which it is a party;

                      (j) Solvency. Each Transferor is solvent and will not be
         rendered insolvent by the transactions contemplated by this Agreement
         and the other Transaction Documents and each Transferor has an adequate
         amount of capital to conduct its business in the ordinary course and to
         carry out its obligations under this Agreement and the other
         Transaction Documents;

                      (k) Subsidiaries. Neither of the Transferor has any
         subsidiaries other than the Trust;

                      (l) Tax Returns. Each Transferor has filed on a timely
         basis all tax returns (federal, state and local) required to be filed
         and has paid or made adequate provisions for the payment of all taxes,
         assessments and other governmental charges due from such Transferor;

                      (m) Principal Place of Business. The principal place of
         business and chief executive office of each Transferor are located at
         the address of such Transferor set forth herein and, there are now no,
         and during the past four months there have not been, any other
         locations where such Transferor is located (as that term is used in the
         UCC in the state of such location) except that, with respect to such
         changes occurring after the date of this Agreement, as shall have been
         specifically disclosed to the Servicer, the Note Insurer and the
         Indenture Trustee in writing;

                      (n) Accounting and Tax Treatment. Each Transferor will
         treat the assignment of the related Conveyed Assets from the Originator
         to the Transferors pursuant to this Agreement as a contribution of such
         Conveyed Assets for Federal income tax purposes, and as a sale and
         contribution for financial reporting and accounting purposes; each
         Transferor will respond to any inquiries by third parties by indicating
         that the Conveyed Assets are owned by the Transferors; and

                      (o) Legal Name. The legal name of each Transferor is as
         set forth in the related signature line of this Agreement and neither
         Transferor has changed its name since its incorporation and since its
         incorporation, such Transferor did not use, nor does such Transferor
         now use, any trade names, fictitious names, assumed names or "doing
         business as" names.

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                  SECTION 3.03 Representations and Warranties of the Originator
with respect to the Conveyed Assets. (a) With respect to each Contract, the
Originator hereby remakes to the Transferors the representations, warranties and
covenants set forth in Section 2.02 of the Servicing Agreement. Such
representations, warranties and covenants are made or deemed to be made, (x)
with respect to the Initial Conveyed Assets, as of the Cut-Off Date, (y) with
respect to the Subsequent Conveyed Assets, as of the Subsequent Cut-Off Date,
and (z) with respect to the Substitute Conveyed Assets, as of the related
Transfer Date.

                      (b) Upon the discovery by the Originator, either
Transferor, the Collateral Agent, the Depositor, the Indenture Trustee or the
Note Insurer of a breach of any of the representations or warranties set forth
in Section 2.02 of the Servicing Agreement that materially and adversely affects
any Contract, the related Equipment or the related Contract File, as the case
may be, or if the Servicer fails to cause delivery of evidence of filing or
copies of any UCC financing statement in accordance with the Servicing Agreement
(any such event, a "Warranty Event"), the party discovering such breach shall
give prompt written notice to the other parties hereto, the Indenture Trustee,
the Trust and the Note Insurer, and the Originator shall be required to
reacquire or replace such Contract in accordance with Article IV of the
Indenture.

                  SECTION 3.04 Substitution of Contracts and Equipment by the
Originator. (a) With respect to a substitution of Contracts in accordance with
the provisions of this Section 3.04, each proposed Substitute Contract must (i)
be an Eligible Contract, (ii) satisfy all of the representations and warranties
set forth in Section 2.02 of the Servicing Agreement, (iii) have a Discounted
Contract Principal Balance of not less than the Discounted Contract Principal
Balance of the Contract being, (iv) have a Purchase Option Payment of not less
than the Purchase Option Payment of the Contract being replaced, and (v) satisfy
the requirements of Section 4.02(d) of the Indenture. For purposes of
determining compliance with clauses (iii) and (iv) of the preceding sentence, if
more than one Substitute Contract is being provided on any date, the Discounted
Contract Principal Balance of the Substitute Contracts and the Contracts being
replaced shall be determined on an aggregate basis.

                      (b) Any substitution of a Contract pursuant to this
Agreement will be effected by (i) delivery to the Collateral Agent, on behalf of
the Indenture Trustee, of the Contract File for each such Substitute Contracts,
(ii) filing of any UCC financing statements necessary to comply with the Filing
Requirements and to perfect the interest of the Indenture Trustee in the
Substitute Contracts, (iii) delivery to the Indenture Trustee and the Collateral
Agent of a supplement to the List of Contracts reflecting such substitution and
(iv) delivery to the Collateral Agent, on behalf of the Indenture Trustee, of a
release request for the replaced Contract and the originally executed trust
receipt relating thereto.


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                      (c) The parties hereto agree that in addition to the
obligation of the Originator to reacquire or to substitute any Contract and the
related Equipment as to which a breach of the representations set forth in the
Servicing Agreement has occurred and is continuing, the Originator will enforce
its remedies, if any, against any Source under any Source Agreement. In
consideration of the reacquisition of the Equipment and the Contract, the
Originator shall remit the Reacquisition Amount to the Servicer for allocation
of such Reacquisition Amount pursuant to the terms of the Indenture. Except as
may be set forth in the Transaction Documents, it is understood and agreed that
the obligations of the Originator with respect to a breach as provided in this
Section 3.04 and Section 4.01 of the Indenture constitute the sole remedy
against the Originator for such breach available to the Transferor, the Note
Insurer, the Depositor, the Collateral Agent, the Indenture Trustee and
Noteholders, except to the extent that such breach is proven by final judgment
of a court of law having due jurisdiction to be the result of any fraud or
wilfull misconduct on the part of such Obligor. The representations and
warranties set forth in Sections 3.01, 3.02 and 3.03 shall survive the
assignment of the Conveyed Assets to the Transferors, the pledge of the Conveyed
Assets to the Trust and the pledge of the Pledged Property to the Indenture
Trustee.


                                   ARTICLE IV

                                    COVENANTS

                  SECTION 4.01 Originator Covenants. The Originator hereby
covenants and agrees with the Transferor, the Note Insurer, the Depositor, the
Collateral Agent, the Noteholders and the Indenture Trustee with respect to
itself as follows:

                      (a) Preservation of Security Interest. The Originator
         shall execute and file such financing statements and cause to be
         executed and filed such continuation statements, all in such manner and
         in such places as may be required by law fully to preserve, maintain,
         and protect the respective right, title and interest of the
         Transferors, the Trust and the Indenture Trustee in the Conveyed
         Assets. The Originator shall deliver (or cause to be delivered) to the
         Transferors file-stamped copies of, or filing receipts for, any
         document filed as provided above, as soon as available following such
         filing.

                      (b) Preservation of Name, etc. The Originator will not
         change its name, identity or corporate structure in any manner that
         would, could, or might make any financing statement or continuation
         statement filed by the Originator in accordance with paragraph (a)
         above or under any Transaction Document seriously misleading within the
         meaning of ss. 9-402(7) of the UCC, unless it shall have given the
         Transferors, the Note Insurer, the Depositor, the Collateral Agent and
         the Indenture Trustee at least 60 days' prior written notice thereof.

                      (c) Preservation of Office. The Originator will give the
         Transferors, the Depositor, the Collateral Agent, the Note Insurer and
         the Indenture Trustee at least 60 days' prior written notice of any
         relocation of its principal executive office if, as a result of such
         relocation, the applicable provisions of the UCC would require the
         filing of any amendment of any previously filed financing or
         continuation statement or of any new financing statement.

                                       11
<PAGE>

                      (d) Obligations with Respect to Conveyed Assets. The
         Originator will duly fulfill all obligations on its part to be
         fulfilled under or in connection with each Contract and each Source
         Agreement, and will do nothing to impair the rights of the Transferors,
         the Trust, the Note Insurer or the Indenture Trustee in any of the
         Conveyed Assets.

                      (e) Compliance with Law. The Originator will comply, in
         all material respects, with all acts, rules, requisitions, orders,
         decrees and directions of any Governmental Authority applicable to its
         business and to the Conveyed Assets or any part thereof; provided,
         however, that the Originator may contest any act, regulation, order,
         decree or direction in any reasonable manner which shall not materially
         and adversely affect the rights of the Transferors, the Indenture
         Trustee, the Note Insurer or the Trust in any of the Conveyed Assets.

                      (f) Conveyance of Conveyed Assets; Security Interests.
         Except for the transfers and conveyances hereunder, or under any
         Transaction Document, the Originator will not sell, pledge, assign or
         transfer to any other Person, or grant, create, incur, assume or suffer
         to exist any Lien, on any Conveyed Asset, or any interest therein and
         the Originator shall defend the right, title, and interest of the
         Transferors, the Trust, the Indenture Trustee, the Note Insurer and
         their respective successors and assigns in, to, and under the Conveyed
         Assets, against all claims of third parties claiming, through or under
         the Originator; provided, however, that nothing in this Section 4.01(f)
         shall prevent or be deemed to prohibit the Originator from suffering to
         exist upon any of the Conveyed Assets any Liens for municipal or other
         local taxes if such taxes shall not at the time be due and payable or
         if the Originator shall concurrently be contesting the validity thereof
         in good faith by appropriate proceedings and shall have set aside on
         its books adequate reserves with respect thereto and such contests pose
         no risk of forfeiture.

                      (g) Notification of Breach. The Originator will advise the
         Transferors, the Indenture Trustee, the Collateral Agent, the
         Depositor, and the Note Insurer promptly, in reasonable detail, upon
         discovery of the occurrence of any breach by the Originator of any of
         its representations, warranties and covenants contained herein.

                      (h) Further Assurances. The Originator will make, execute
         or endorse, acknowledge and file or deliver to the Transferors, the
         Trust, the Collateral Agent, the Depositor, the Note Insurer and the
         Indenture Trustee from time to time such schedules, confirmatory
         assignments, conveyances, transfer endorsements, powers of attorney,
         certificates, reports and other assurances or instruments and take such
         further steps relating to the Conveyed Assets and other rights covered
         by this Agreement, as the Transferors, the Trust, the Indenture
         Trustee, the Collateral Agent, the Depositor and the Note Insurer may
         request and reasonably require; provided, that no UCC filing will be
         required with respect to the Equipment, except as required by the
         Filing Requirements.


                                       12
<PAGE>

                      (i) Indemnification. The Originator agrees to indemnify,
         defend and hold the Transferors, the Indenture Trustee, the Collateral
         Agent, the Depositor and the Note Insurer harmless from and against any
         and all loss, liability, damage, judgment, claim, deficiency, or
         expense (including interest, penalties, reasonable attorneys' fees and
         amounts paid in settlement) to which any of them may become subject
         insofar as such loss, liability, damage, judgment, claim, deficiency,
         or expense arises out of or is based upon a breach by the Originator of
         its representations and warranties contained in Article III, its
         covenants contained in Section 4.01, or in any certificate or in any
         schedule delivered by the Originator hereunder, being untrue in any
         material respect at any time; provided, that the obligations of the
         Originator with respect to the representations and warranties set forth
         in Section 3.03(a) shall be limited as set forth in Section 3.04(c).
         The obligations of the Originator under this Section 4.01(i) shall be
         considered to have been relied upon by the Transferors, the Indenture
         Trustee, the Collateral Agent, the Depositor and the Note Insurer and
         shall survive the execution, delivery, and performance of this
         Agreement regardless of any investigation made by the Transferors, the
         Indenture Trustee, the Collateral Agent, the Depositor and the Note
         Insurer or on their respective behalf. THE INDEMNIFICATION OBLIGATIONS
         OF THE ORIGINATOR PURSUANT TO THE PRECEDING PROVISIONS OF THIS
         PARAGRAPH SHALL APPLY REGARDLESS OF ANY NEGLIGENCE OR OTHER FAULT ON
         THE PART OF THE TRANSFERORS, THE INDENTURE TRUSTEE, THE DEPOSITOR, THE
         COLLATERAL AGENT, THE NOTE INSURER OR ANY OF THEIR RESPECTIVE OFFICERS,
         EMPLOYEES OR AGENTS.

                      (j) Notice of Liens. The Originator shall notify the
         Transferors, the Depositor, the Collateral Agent (other than any
         Permitted Liens), the Indenture Trustee and the Note Insurer promptly
         after becoming aware of any Lien on any Conveyed Asset.

                      (k) Taxes. The Originator shall promptly pay all
         applicable taxes required to be paid in connection with the assignment
         of the Conveyed Assets and acknowledges that the Transferors shall have
         no responsibility with respect thereto. The Originator shall promptly
         pay and discharge, or cause the payment and discharge of, all federal
         income taxes (and all other material taxes) when due and payable by the
         Originator, except (i) such as may be paid thereafter without penalty
         or (ii) such as may be contested in good faith by appropriate
         proceedings and for which an adequate reserve has been established and
         is maintained in accordance with GAAP. The Originator shall promptly
         notify the Transferors, the Depositor, the Collateral Agent, the
         Indenture Trustee, the Noteholders and the Note Insurer of any material
         challenge, contest or proceeding pending by or against the Originator
         before any taxing authority.

                      (l) Taxes and Other Liabilities. The Originator shall
         promptly pay and discharge all material taxes, assessments, fees,
         claims and other governmental charges when due and payable by the
         Originator, except (i) such as may be paid thereafter without penalty
         or (ii) such as may be contested in good faith by appropriate
         proceedings and for which an adequate reserve has been established and
         is maintained in accordance with GAAP. The Originator shall promptly
         notify the Transferors, the Depositor, the Collateral Agent, the Note
         Insurer, the Rating Agencies and the Indenture Trustee of any material
         challenge, contest or proceeding pending by or against the Originator
         before any taxing authority.

                                       13

<PAGE>


                      (m) Non-Consolidation. The Originator shall take all
         action necessary to ensure that neither of the Transferors nor the
         Manager would be substantially consolidated with the Originator, such
         that the separate corporate existence of the Originator and either
         Transferor or the Manager would be ignored in the event of a bankruptcy
         of the Originator.

                  SECTION 4.02 Transferor Covenants. Each of the Transferors
hereby covenants and agrees with the Originator, the Depositor, the Collateral
Agent, the Note Insurer and the Indenture Trustee as follows:

                      (a) Transferor Certificate. Prior to each date as of which
         Contracts and the Equipment subject to such Contracts are to be
         reacquired by the Originator pursuant to the Indenture, the Transferors
         shall submit to the Originator a certificate signed by the president,
         executive vice president, any vice president or the treasurer of the
         Manager of each of the Transferors (a "Transferors Certificate") and
         completed as to its date and the date of this Agreement. Each
         Transferors Certificate shall operate as an assignment, without
         recourse, representation, or warranty, to the Originator of all of the
         Transferors' respective right, title and interests in and to such
         Contracts and Equipment, and all security and documents relating
         thereto, such assignment being an assignment outright and not for
         security; and upon payment of the Reacquisition Amount, the Originator
         will thereupon own such Contract, such interest in the related
         Equipment and all such security and documents, free of any further
         obligation to the Transferors with respect thereto. If in any
         enforcement suit or legal proceeding it is held that the Servicer may
         not enforce a Contract on the ground that it is not a real
         party-in-interest or holder entitled to enforce the Contract, the
         Transferors shall, at the Servicer's expense, take such steps as the
         Servicer deems necessary to enforce the Contract, including bringing
         suit in a Transferor's name.

                      (b) Obligor's Quiet Enjoyment. Transferor II hereby
         acknowledges and agrees that its rights in the Equipment are expressly
         subject to the rights of the related Obligors in such Equipment
         pursuant to the applicable Contracts. Transferor II covenants and
         agrees that, so long as an Obligor shall not be in default of any of
         the provisions of the applicable Contract, neither Transferor II nor
         any assignee of Transferor II will disturb the Obligor's quiet and
         peaceful possession of such Equipment and the Obligor's use thereof for
         its intended purpose.

                      (c) Operation of Transferor. Each of the Transferors shall
         be operated in such a manner that it should not be substantively
         consolidated in the trust estate of another Person (that is, such that
         the separate legal existence of such Transferor and such Person should
         be disregarded) and in that regard, each Transferor shall:

                               (i) not engage in any action that would cause the
                  separate legal identity of such Transferor not to be
                  respected, including, without limitation, (x) holding itself
                  out as being liable for the debts of any other party or (y)
                  acting other than through its duly authorized agents;

                                       14
<PAGE>

                               (ii) not incur, assume or guarantee any
                  indebtedness except for such indebtedness as may be incurred
                  by such Transferor in connection with the issuance of the
                  Pledged Notes or as otherwise permitted by the Note Insurer;

                               (iii) not commingle its funds with those of any
                  other entity;

                               (iv) act solely in its name in the conduct of its
                  business and shall conduct its business so as not to mislead
                  others as to the identity of the entity with which they are
                  concerned;

                               (v) maintain company records and books of account
                  and shall not commingle its company records and books of
                  account with the records and books of account of any entity;

                               (vi) not engage in any business or activity other
                  than in connection with or relating to the activities allowed
                  by its Certificate of Formation and/or Limited Liability
                  Company Agreement;

                               (vii) not form, or cause to be formed, any
                  subsidiaries;

                               (viii) comply with all restrictions and covenants
                  in, and shall not fail to comply with the corporate
                  formalities established in, the Certificate of Formation
                  and/or Limited Liability Company Agreement;

                               (ix) maintain separate bank accounts, if any;

                               (x)  not act as an agent of the Originator; and

                               (xi) have as its managing member a limited
                  purpose corporation who maintains at all times one independent
                  director as required by the Certificate of Incorporation
                  and/or Bylaws.

                  SECTION 4.03 Transfer of Conveyed Assets. The Originator
understands that the Transferors intend to pledge the Conveyed Assets and their
respective rights under this Agreement to the Indenture Trustee, on behalf of
the Trust, as collateral security for its obligations on the Pledged Notes, and
that the Trust intends to pledge the Pledged Property to the Indenture Trustee,
on behalf of the Note Insurer and the Noteholders, pursuant to the Indenture.
The Originator agrees that any such assignee of the Transferors may exercise the
rights of the Transferors hereunder, without any consent or action by either
Transferor, and shall be entitled to all of the benefits of the Transferors
hereunder to the extent provided for in such assignment.

                                       15

<PAGE>


                                    ARTICLE V

                              CONDITIONS PRECEDENT

                  SECTION 5.01 Conditions to Transferors Obligations. The
obligations of the Transferors to accept the transfer of the Initial Conveyed
Assets on the Closing Date shall be subject to the satisfaction of the following
conditions:

                      (a) All representations and warranties of the Originator
         contained in this Agreement shall be true and correct on the Closing
         Date with the same effect as though such representations and warranties
         had been made on such date;

                      (b) All information concerning the Initial Conveyed Assets
         provided to the Transferors shall be true and correct as of the Cut-Off
         Date in all material respects;

                      (c) The Originator shall have delivered to the Transferors
         a List of Contracts with respect to its respective Contracts as of the
         Cut-Off Date and shall have substantially performed all other
         obligations required to be performed by the provisions of this
         Agreement;

                      (d) The Originator shall have recorded and filed, at its
         expense, any financing statement with respect to the Initial Conveyed
         Assets to be transferred from time to time to the related Transferor
         from the Originator pursuant to this Agreement meeting the requirements
         of applicable state law in such manner in such jurisdictions as are
         necessary to perfect the transfer of the Initial Conveyed Assets from
         the Originator to the related Transferor, and shall deliver a
         file-stamped copy of such financing statements or other evidence of
         such filings to the related Transferor;

                      (e) All corporate and legal proceedings and all
         instruments in connection with the transactions contemplated by this
         Agreement shall be satisfactory in form and substance to the
         Transferors, and the Transferors shall have received from the
         Originator copies of all documents (including, without limitation,
         records of corporate proceedings) relevant to the transactions herein
         contemplated as the Transferors may reasonably have requested; and

                      (f) All respective conditions necessary to vest in the
         Originator good title, free and clear of all Liens (other than Liens
         permitted in the proviso contained in Section 4.01(f) hereof), to its
         respective Contracts and interests in Equipment shall have been
         satisfied.

                  SECTION 5.02 Conditions to the Originator's Obligations. The
obligations of the Originator to convey and contribute the Initial Conveyed
Assets to the Transferors on the Closing Date shall be subject to the
satisfaction of the following conditions:

                                       16

<PAGE>


                      (a) All representations and warranties of the Transferors
         contained in this Agreement shall be true and correct with the same
         effect as though such representations and warranties had been made on
         such date; and

                      (b) All corporate and legal proceedings and all
         instruments in connection with the transactions contemplated by this
         Agreement shall be satisfactory in form and substance to the
         Originator, and the Originator shall have received from the Transferors
         copies of all documents (including, without limitation, records of
         corporate proceedings) relevant to the transactions herein contemplated
         as the Originator may reasonably have requested.


                                   ARTICLE VI

                            TERMINATION; LIABILITIES

                  SECTION 6.01 Termination. The respective obligations and
responsibilities of the Originator and the Transferors created by this Agreement
shall terminate upon the latest of (i) the maturity or other liquidation of the
last Contract and the disposition of any amounts received upon disposition of
any Defaulted Contracts and any Equipment leased thereunder; (ii) the
distribution to the Transferors of all amounts required to be paid thereto
pursuant to this Agreement; (iii) the termination of the Indenture in accordance
with the terms thereof and (iv) the payment in full of all amounts owed to the
Note Insurer; provided, however, that (A) the indemnifications contained in
Section 4.01(i) herein and (B) the covenant contained in Section 7.13 hereof,
shall survive the termination of this Agreement.

                  SECTION 6.02 Effect of Termination. No termination or
rejection or failure to assume the executory obligations of this Agreement in
the bankruptcy of the Originator or the Transferors shall be deemed to impair or
affect the obligations pertaining to any executed contribution or executed
obligations, including, without limitation, pre-termination breaches of
representations and warranties by the Originator or the Transferors. Without
limiting the foregoing, prior to termination, neither the failure of the
Transferors to deliver a Transferors Certificate pursuant to Section 4.02, nor
the failure of the Originator to pay a Reacquisition Amount shall render such
transfer or obligation executory, nor shall the continued duties of the parties
pursuant to Article IV or Section 7.06 of this Agreement render an executed
contribution executory.

                  SECTION 6.03 Liabilities. By entering into this Agreement, the
Transferors agree to be liable, directly to each of the Issuer, the Indenture
Trustee, the Owner Trustee, the Note Insurer, the Collateral Agent, the
Depositor and each Noteholder, for the entire amount of any losses, claims,
damages or liabilities (other than those incurred by a Noteholder in the
capacity of an investor in the Notes or those which arise from any action or
omission by any Noteholder) of the Trust (to the extent Trust Assets remaining
after the Noteholders have been paid in full are insufficient to pay such
losses, claims, damages or liabilities).

                                       17

<PAGE>



                                   ARTICLE VII

                            MISCELLANEOUS PROVISIONS

                  SECTION 7.01 Amendment. This Agreement may be amended from
time to time by the parties hereto only with (x) the prior written consent of
the Servicer, the Indenture Trustee and the Note Insurer (or, in the event of a
Note Insurer Default, the Majority Holders) and (y) satisfaction of the Rating
Agency Condition.

                  SECTION 7.02 GOVERNING LAW. THIS AGREEMENT AND ANY AMENDMENT
HEREOF PURSUANT TO SECTION 7.01 SHALL BE CONSTRUED IN ACCORDANCE WITH AND
GOVERNED BY THE SUBSTANTIVE LAWS OF THE STATE OF NEW YORK (WITHOUT REGARD TO
CHOICE OF LAW PRINCIPLES) APPLICABLE TO AGREEMENTS MADE AND TO BE PERFORMED
THEREIN AND THE OBLIGATIONS, RIGHTS, AND REMEDIES OF THE PARTIES UNDER THIS
AGREEMENT SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.

                  SECTION 7.03 Notices. All demands, notices, and communications
under this Agreement shall be in writing and shall be deemed to have been duly
given, made and received (i) when delivered against receipt of registered or
certified mail or upon actual receipt of registered or certified mail, postage
prepaid, return receipt requested; (ii) when delivered by courier with
appropriate evidence of receipt; or (iii) upon transmission via facsimile or
telex with appropriate evidence of receipt (a) in the case of the Originator, at
the following address: Balapointe Office Centre, 111 Presidential Boulevard,
Suite 127, Bala Cynwyd, Pennsylvania 19004, Attention: General Counsel, telecopy
(610) 668-1468, (b) in the case of the Indenture Trustee, 450 West 33rd Street,
New York, New York 10001, Attention: Global Trust Services, telecopy (212)
946-8191; (c) in the case of Transferor I, c/o American Business Financial
Services, Inc., Balapointe Office Centre, 111 Presidential Boulevard, Suite 127,
Bala Cynwyd, Pennsylvania 19004, Attention: General Counsel, telecopy (610)
668-1468, (d) in the case of Transferor II, c/o American Business Financial
Services, Inc., Balapointe Office Centre, 111 Presidential Boulevard, Suite 127,
Bala Cynwyd, Pennsylvania 19004, Attention: General Counsel, telecopy (610)
668-1468, (e) in the case of the Collateral Agent, at the address set forth in
the Servicing Agreement, (f) in the case of the Depositor, as the address set
forth in the Receivables Pledge Agreement, and (g) in the case of the Note
Insurer, the Rating Agencies or the Owner Trustee at their respective addresses
set forth in Section 11.06 of the Indenture. Either party may alter the address
to which communications are to be sent by giving notice of such change of
address in conformity with the provisions of this Section 7.03 for giving notice
and by otherwise complying with any applicable terms of this Agreement,
including, but not limited to, subsections 4.01(b) and (c).

                  SECTION 7.04 Severability of Provisions. If any one or more of
the covenants, agreements, provisions, or terms of this Agreement shall be for
any reason whatsoever held invalid, then such covenants, agreements, provisions,
or terms shall be deemed severable from the remaining covenants, agreements,
provisions, or terms of this Agreement and shall in no way affect the validity
or enforceability of the other provisions of this Agreement.

                                       18

<PAGE>


                  SECTION 7.05 Assignment. Notwithstanding anything to the
contrary contained in this Agreement, this Agreement may not be assigned by the
Originator, without the prior written consent of the Transferors, the Note
Insurer (or, in the event of a Note Insurer Default, the Majority Holders) and
the Indenture Trustee (acting upon the written direction of the Controlling
Party) and, except as provided in Section 4.03, this Agreement may not be
assigned by the Transferors without the prior written consent of the Originator,
the Note Insurer (or, in the event of a Note Insurer Default, the Majority
Holders) and the Indenture Trustee. Whether or not expressly stated, all
representations, warranties, covenants and agreements of the Originator and the
Transferors in this Agreement, or in any document delivered by any of them in
connection with this Agreement, shall be for the benefit of, and shall be
exercisable by, the Indenture Trustee for the benefit of the Noteholders and the
Note Insurer.

                  SECTION 7.06 Further Assurances. Each of the parties hereto
agrees to do such further acts and things and to execute and deliver to the
Indenture Trustee such additional assignments, agreements, powers and
instruments as are required by the Indenture Trustee or the Note Insurer to
carry into effect the purposes of this Agreement or to better assure and confirm
unto the Indenture Trustee or the Note Insurer its rights, powers and remedies
hereunder.

                  SECTION 7.07 No Waiver; Cumulative Remedies. No failure to
exercise and no delay in exercising, on the part of either Transferor or the
Originator, any right, remedy, power or privilege hereunder, shall operate as a
waiver thereof; nor shall any single or partial exercise of any right, remedy,
power or privilege hereunder preclude any other or further exercise hereof or
the exercise of any other right, remedy, power or privilege. The rights,
remedies, powers and privileges herein provided are cumulative and not
exhaustive of any rights, remedies, powers and privilege provided by law.

                  SECTION 7.08 Counterparts. This Agreement may be executed in
two or more 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 7.09 Binding Effect: Third-Party Beneficiaries. This
Agreement will inure to the benefit of and be binding upon the parties hereto.
The Indenture Trustee, the Owner Trustee, the Trust, the Note Insurer, the
Collateral Agent, the Depositor and the Noteholders are intended third party
beneficiaries of this Agreement.

                  SECTION 7.10 Merger and Integration. Except as specifically
stated otherwise herein, this Agreement sets forth the entire understanding of
the parties relating to the subject matter hereof, and all prior understandings,
written or oral, are superseded by this Agreement. This Agreement may not be
modified, amended, waived or supplemented except as provided herein.

                  SECTION 7.11 Headings. The headings herein are for purposes of
reference only and shall not otherwise affect the meaning or interpretation of
any provision hereof.

                                       19

<PAGE>


                  SECTION 7.12 Schedules and Exhibits. The schedules and
exhibits attached hereto and referred to herein shall constitute a part of this
Agreement and are incorporated into this Agreement for all purposes.

                  SECTION 7.13 No Bankruptcy Petition Against the Transferors,
the Manager or the Trust. Each of the parties hereto agrees that, prior to the
date that is one year and one day after the payment in full of (a) the of the
latest maturing Notes issued by the Trust and (b) all amounts owed to the Note
Insurer under the Transaction Documents, it will not institute against any of
the Transferors, the Manager or the Trust, or join any other Person in
instituting against any of the Transferors, the Manager or the Trust, any
bankruptcy, reorganization, arrangement, insolvency or liquidation proceedings
or other proceedings under the laws of the United States or any state of the
United States. This Section 7.13 shall survive the termination of this
Agreement.

                  [Remainder of Page Intentionally Left Blank]




                                       20
<PAGE>



                  IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed by their respective officers as of the day and
year first above written.

                             AMERICAN BUSINESS LEASING, INC.,
                                  as Originator


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



                             ABFS FINANCE LLC 1999-A, as Transferor I

                             By:      ABFS Special Purpose Management, Inc.,
                                      as Managing Member


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



                             ABFS RESIDUAL LLC 1999-A, as Transferor II

                             By:      ABFS Special Purpose Management, Inc.,
                                      as Managing Member


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



                 [Signature Page for Receivables Sale Agreement]



<PAGE>


                                                                      EXHIBIT A


                               FORM OF SUBSEQUENT
                           RECEIVABLES SALE AGREEMENT

                  This SUBSEQUENT RECEIVABLES SALE AGREEMENT, dated as of
____________ (the "Subsequent Funding Date"), by and among AMERICAN BUSINESS
LEASING, INC., a Pennsylvania corporation (the "Originator"), ABFS FINANCE LLC
1999-A, a Delaware limited liability company ("Transferor I"), and ABFS RESIDUAL
LLC 1999-A, a Delaware limited liability company ("Transferor II", and, together
with Transferor I, the "Transferors").



                                   WITNESSETH:

                  Reference is hereby made to that certain Receivables Sale
Agreement, dated as of June 1, 1999 (the "Receivables Sale Agreement"), by and
among the Originator and the Transferors. Pursuant to the Receivables Sale
Agreement, the Originator agreed to sell, convey and contribute, and the
Transferors agreed to accept, from time to time, Subsequent Conveyed Assets. The
Receivables Sale Agreement provides that each such sale, conveyance and
contribution of Subsequent Conveyed Assets be evidenced by the execution and
delivery of a Subsequent Receivables Sale Agreement such as this Subsequent
Receivables Sale Agreement (this "Agreement").

                  The "Subsequent Contracts" are those listed on the List of
Subsequent Contracts attached hereto.

                  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 Agreement,
capitalized terms used herein but not otherwise defined shall have the
respective meanings assigned to such terms in the Receivables Sale Agreement or
in Annex A to the Indenture.

                  Section 2. Direction; Acquisition; Capital Contribution. (a)
Subject to the terms and conditions of this Agreement, the Originator hereby
agrees to sell, convey and contribute, on the Subsequent Funding Date, all of
the Subsequent Conveyed Assets to the Transferors, as set forth in subsection
(b) below. Upon receipt of the consideration specified in subsection (c) below,
the Originator hereby releases all of its right, title and interest in, to and
under the Subsequent Conveyed Assets, such receipt being hereby acknowledged by
the execution of this Agreement by the Originator.

                      (b) The transfers occurring on the Subsequent Funding Date
shall be consummated such that those Conveyed Assets which are considered
"financial assets" within the meaning of the Statement of Financial Accounting
Standards No. 125 ("FAS 125") (such Conveyed Assets include, without limitation,
the Contracts) are acquired by Transferor I, and such that those Conveyed Assets
which are not considered "financial assets" within the meaning of FAS 125 (such
Conveyed Assets include, without limitation, the ownership or security interest
of the Originator in each item of Equipment and any Residual Receipts) are
acquired by Transferor II.

                                      A-1
<PAGE>


                      (c) In consideration for (x) the receipt by the Originator
of $__________ from the Transferors and (y) other good and valuable
consideration, the Originator hereby conveys to the applicable Transferor all of
its right, title and interest in, to and under the Subsequent Conveyed Assets,
whether now existing or hereinafter arising, without recourse, except as may be
set forth herein. In connection with the transfers on Subsequent Funding Date,
the Originator hereby makes a capital contribution to the related Transferor in
the amount by which the fair market value of the Subsequent Conveyed Assets
exceeds the cash consideration received by the Originator in connection
therewith.

                      (d) In connection with the sale, contribution and
conveyance of the Subsequent Conveyed Assets, the Originator shall, at its own
expense, on or prior to the Subsequent Funding Date (i) cause the Contract
Management System to be marked with a specified code (the "Contract Management
Code") to show that such Subsequent Conveyed Assets have been transferred and
contributed to the Transferors in accordance with this Agreement, subsequently
pledged to the Trust, as collateral security for the Pledged Notes in accordance
with the related Subsequent Receivables Pledge Agreement, and such security
interest was assigned to the Indenture Trustee, on behalf of the Noteholders and
the Note Insurer, pursuant to the related Assignment, and (ii) cause the
Servicer to prepare and hold on behalf of the Transferors and the Indenture
Trustee the List of Contracts as supplemented by the List of Subsequent
Contracts on or prior to the Subsequent Funding Date.

                      (e) Except for the obligations of the Originator pursuant
to Section 3 hereof, Section 3.03 of the Receivables Sale Agreement and Article
IV of the Indenture with respect to any breach of a representation, warranty or
covenant made herein, the sale and contribution of the Subsequent Contracts will
be without recourse to the Originator.

                  Section 3. Representations and Warranties of the Originator.
(a) With respect to each Subsequent Contract, the Originator hereby remakes to
the Transferors the representations, warranties and covenants set forth in
Section 2.02 of the Servicing Agreement.

                      (b) Upon the discovery by the Originator, either
Transferor, the Depositor, the Collateral Agent, the Indenture Trustee or the
Note Insurer of a breach of any of the representations or warranties set forth
in Section 2.02 of the Servicing Agreement that materially and adversely affects
any Contract, the related Equipment or the related Contract File, as the case
may be, or if the Servicer fails to cause delivery of evidence of filing or
copies of any UCC financing statement in accordance with the Servicing Agreement
(any such event, a "Warranty Event"), the party discovering such breach shall
give prompt written notice to the other parties hereto, the Indenture Trustee,
the Trust and the Note Insurer, the Depositor, the Collateral Agent and the
Originator shall be required to reacquire or replace such Contract in accordance
with Article IV of the Indenture.

                                      A-2
<PAGE>

                      (c) The Originator understands that the Transferors intend
to pledge the Subsequent Conveyed Assets and their respective rights under this
Agreement to the Trust, as collateral security for its obligations on the
Pledged Notes, and that the Trust intends to pledge the Pledged Property to the
Indenture Trustee, on behalf of the Note Insurer and the Noteholders, pursuant
to the Indenture. The Originator agrees that any such assignee of the
Transferors may exercise the rights of the Transferors hereunder, without any
consent or action by either Transferor, and shall be entitled to all of the
benefits of the Transferors hereunder to the extent provided for in such
assignment.

                  Section 4. Amendment. This Agreement may be amended from time
to time by the parties hereto only with (x) the prior written consent of the
Servicer, the Indenture Trustee and the Note Insurer (or, in the event of a Note
Insurer Default, the Majority Holders) and (y) satisfaction of the Rating Agency
Condition.

                  Section 5. GOVERNING LAW. THIS AGREEMENT AND ANY AMENDMENT
HEREOF PURSUANT TO SECTION 4 SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED
BY THE SUBSTANTIVE LAWS OF THE STATE OF NEW YORK (WITHOUT REGARD TO CHOICE OF
LAW PRINCIPLES) APPLICABLE TO AGREEMENTS MADE AND TO BE PERFORMED THEREIN AND
THE OBLIGATIONS, RIGHTS, AND REMEDIES OF THE PARTIES UNDER THIS AGREEMENT SHALL
BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.

                  Section 6. Counterparts. This Agreement may be executed in two
or more 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 7. Binding Effect; Third-Party Beneficiaries. This
Agreement will inure to the benefit of and be binding upon the parties hereto.
The Indenture Trustee, the Owner Trustee, the Trust, the Depositor, the
Collateral Agent, the Note Insurer and the Noteholders are intended third party
beneficiaries of this Agreement.

                  Section 8. Headings. The headings herein are for purposes of
reference only and shall not otherwise affect the meaning or interpretation of
any provision hereof.

                  Section 9. Exhibits. The schedules and exhibits attached
hereto and referred to herein shall constitute a part of this Agreement and are
incorporated into this Agreement for all purposes.


                                       A-3
<PAGE>

                  Section 10. Intent of Parties; Security Agreement. It is the
intention of the parties hereto that the transfer of the Subsequent Conveyed
Assets to be made pursuant to the terms hereof shall constitute a sale or
capital contribution of (x) the Contracts by the Originator to Transferor I, and
(y) the ownership interest or security interest of the Originator in each item
of Equipment and any Residual Receipts by the Originator to Transferor II, and,
in either case, not a loan. In the event, however, that a court of competent
jurisdiction were to hold that any such transfer constitutes a loan and not a
sale or capital contribution, it is the intention of the parties hereto that
this Agreement is deemed to be a security agreement and that the Originator
shall be deemed to have granted to the related Transferor as of the date hereof
a first priority perfected security interest in all of the Originator's right,
title and interest in, to and under the related Subsequent Conveyed Asset, and
all income and proceeds thereof.

                  [Remainder of Page Intentionally Left Blank]










                                       A-4
<PAGE>




                  IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed by their respective officers as of the day and
year first above written.

                            AMERICAN BUSINESS LEASING, INC.,
                                 as Originator


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



                            ABFS FINANCE LLC 1999-A, as Transferor I

                            By:      ABFS Special Purpose Management, Inc.,
                                     as Managing Member


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



                            ABFS RESIDUAL LLC 1999-A, as Transferor II

                            By:      ABFS Special Purpose Management, Inc.,
                                     as Managing Member





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



                                      A-5
<PAGE>


<TABLE>
<CAPTION>

                                                 TABLE OF CONTENTS

                                                                                                      Page
                                                                                                      ----

<S>                        <C>                                                                         <C>
ARTICLE I  DEFINITIONS...................................................................................1

   SECTION 1.01            Definitions...................................................................1
   SECTION 1.02            Other Definitional Provisions.................................................1


ARTICLE II  TRANSFER OF CONVEYED ASSETS..................................................................2

   SECTION 2.01            Direction; Acquisition; Capital Contribution..................................2
   SECTION 2.02            Custody of Contract Files.....................................................4
   SECTION 2.03            Intention of the Parties; Grant of Security Interest..........................4


ARTICLE III  REPRESENTATIONS AND WARRANTIES..............................................................4

   SECTION 3.01            Representations and Warranties of the Originator..............................4
   SECTION 3.02            Representations and Warranties of the Transferors.............................7
   SECTION 3.03            Representations and Warranties of the Originator with respect to the
                              Conveyed Assets...........................................................10
   SECTION 3.04            Substitution of Contracts and Equipment by the Originator....................10


ARTICLE IV  COVENANTS...................................................................................11

   SECTION 4.01            Originator Covenants.........................................................11
   SECTION 4.02            Transferor Covenants.........................................................14
   SECTION 4.03            Transfer of Conveyed Assets..................................................15


ARTICLE V  CONDITIONS PRECEDENT.........................................................................15

   SECTION 5.01            Conditions to Transferors Obligations........................................15
   SECTION 5.02            Conditions to the Originator's Obligations...................................16


ARTICLE VI  TERMINATION; LIABILITIES....................................................................17

   SECTION 6.01            Termination..................................................................17
   SECTION 6.02            Effect of Termination........................................................17
   SECTION 6.03            Liabilities..................................................................17

</TABLE>

                                       i

<PAGE>


<TABLE>
<CAPTION>

<S>                                                                                                    <C>
ARTICLE VII  MISCELLANEOUS PROVISIONS...................................................................17

   SECTION 7.01            Amendment....................................................................17
   SECTION 7.02            GOVERNING LAW................................................................17
   SECTION 7.03            Notices......................................................................18
   SECTION 7.04            Severability of Provisions...................................................18
   SECTION 7.05            Assignment...................................................................18
   SECTION 7.06            Further Assurances...........................................................19
   SECTION 7.07            No Waiver; Cumulative Remedies...............................................19
   SECTION 7.08            Counterparts.................................................................19
   SECTION 7.09            Binding Effect:  Third-Party Beneficiaries...................................19
   SECTION 7.10            Merger and Integration.......................................................19
   SECTION 7.11            Headings.....................................................................19
   SECTION 7.12            Schedules and Exhibits.......................................................19
   SECTION 7.13            No Bankruptcy Petition Against the Transferors, the Manager or the
                              Trust.....................................................................19


Exhibit A  -               Form of Subsequent Receivables Sale Agreement



</TABLE>

                                       ii