<PAGE>


                                                                    Exhibit 10.1

                                                               EXECUTION VERSION
--------------------------------------------------------------------------------



                AMENDED AND RESTATED MASTER REPURCHASE AGREEMENT


                                  By and Among:


                             THE PATRIOT GROUP, LLC,

                                    as Buyer,

                          ABFS WAREHOUSE TRUST 2004-2,

                                   as Seller,


                                       and


                     the other ABFS ENTITIES parties hereto



 Dated as of November 15, 2004 and Amended and Restated as of December 21, 2004



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

<PAGE>

                                TABLE OF CONTENTS

                                                                            PAGE

1.   DEFINITIONS AND INTERPRETATION............................................1
2.   THE TRANSACTION..........................................................11
3.   [RESERVED]...............................................................11
4.   FEES; PAYMENT AND TRANSFER...............................................11
5.   MARGIN MAINTENANCE.......................................................12
6.   INCOME PAYMENTS..........................................................12
7.   SECURITY INTEREST........................................................13
8.   TAXES; TAX TREATMENT.....................................................14
9.   CONDITIONS PRECEDENT.....................................................15
9A.  CONDITIONS SUBSEQUENT....................................................19
10.  RELEASE OF PURCHASED ASSETS..............................................18
11.  RELIANCE.................................................................19
12.  REPRESENTATIONS AND WARRANTIES...........................................19
13.  COVENANTS................................................................22
14.  [RESERVED]...............................................................27
15.  CHANGE OF LAW............................................................27
16.  [RESERVED]...............................................................27
17.  REPURCHASE TRANSACTIONS..................................................27
18.  EVENTS OF DEFAULT........................................................28
19.  REMEDIES.................................................................30
20.  DELAY NOT WAIVER; REMEDIES ARE CUMULATIVE................................33
21.  USE OF EMPLOYEE PLAN ASSETS..............................................33
22.  INDEMNITY................................................................33
23.  WAIVER OF REDEMPTION AND DEFICIENCY RIGHTS...............................34
24.  REIMBURSEMENT............................................................34
25.  FURTHER ASSURANCES.......................................................35
26.  ENTIRE AGREEMENT; PRODUCT OF NEGOTIATION.................................35
27.  TERMINATION..............................................................35
28.  ASSIGNMENT; PARTICIPATIONS...............................................35
29.  AMENDMENTS, ETC..........................................................36
30.  SEVERABILITY.............................................................36
31.  BINDING EFFECT; GOVERNING LAW............................................36
32.  CONSENT TO JURISDICTION..................................................37
33.  NOTICES AND OTHER COMMUNICATIONS.........................................37
34.  CONFIDENTIALITY..........................................................38
35.  ACKNOWLEDGMENTS WITH RESPECT TO THE TRANSACTION..........................39
36.  AMENDMENT AND RESTATEMENT................................................39

                                       i

<PAGE>

                               TABLE OF CONTENTS
                                  (continued)



EXHIBIT A       MONTHLY CERTIFICATION
EXHIBIT B       REPRESENTATIONS AND WARRANTIES RE: PURCHASED ASSETS
                AND THE 2003-2 IO
EXHIBIT C       FORM OF CUSTODIAL AGREEMENT
EXHIBIT D       FORM OF TRANSACTION NOTICE

SCHEDULE I      PURCHASED ASSETS
SCHEDULE II     INTEREST RATES AND FEES
SCHEDULE III    GOVERNING AGREEMENTS










                                       ii

<PAGE>


                AMENDED AND RESTATED MASTER REPURCHASE AGREEMENT



                                       Dated as of November 15, 2004 and amended
                                            and restated as of December 21, 2004

BY AND AMONG:

THE PATRIOT GROUP, LLC, a Delaware limited liability company, as buyer (the
"Buyer");

ABFS WAREHOUSE TRUST 2004-2, a Delaware statutory trust, as seller (the
"Seller"); and

AMERICAN BUSINESS FINANCIAL SERVICES, INC., a Delaware corporation, AMERICAN
BUSINESS CREDIT, INC., a Pennsylvania corporation, and ABFS CONSOLIDATED
HOLDINGS, INC., a Delaware corporation.

1.      DEFINITIONS AND INTERPRETATION.

        (a)     DEFINED TERMS.

        "2003-2 IO" means, collectively, Certificate Nos. X-1, P-1 and R-1,
issued by ABFS Mortgage Loan Trust 2003-2.

        "2003-2 OFFICER'S CERTIFICATE" means that certain Officer's Certificate,
dated as of the Closing Date, regarding the 2003-2 IO and ABFS 2003-2, Inc.

        "2004-1 TRUST AGREEMENT" means that certain Amended and Restated Trust
Agreement, dated as of November 15, 2004, among Holdings and the Originators, as
depositors, Wilmington Trust Company, as owner trustee, and ABFS, as indemnitor
(as amended, restated, supplemented or otherwise modified from time to time).

        "2004-2 TRUST AGREEMENT" means that certain Amended and Restated Trust
Agreement, dated as of November 15, 2004, among Trust 2004-1, as depositor,
Wilmington Trust Company, as owner trustee, and ABFS, as indemnitor (as amended,
restated, supplemented or otherwise modified from time to time).

        "ABC" means American Business Credit, Inc., a Pennsylvania corporation.

        "ABFS" means American Business Financial Services, Inc., a Delaware
corporation.

        "ABFS 2003-2 SHARES" means the Seller's one hundred percent (100%)
ownership interest in the issued and outstanding capital stock of ABFS 2003-2,
Inc.

        "ABFS ENTITY" means each of the Seller, Trust 2004-1, ABFS, ABC and
Holdings.

        "ADDITIONAL COLLATERAL" means (i) the Holdings Shares, (ii) the ABFS
2003-2 Shares, and (iii) the Servicer Reimbursement and Fee Collateral.

<PAGE>

        "ADDITIONAL WAREHOUSE LINES" shall mean warehouse facilities of ABFS or
its Affiliates that provide an aggregate minimum $100,000,000 in warehouse
funding, with an aggregate minimum $30,000,000 sub-limit for wet-ink mortgage
loans.

        "AFFILIATE" means, with respect to any specified Person, any other
Person controlling or controlled by or under common control with such specified
Person. For the purposes of this definition, "control" when used with respect to
any specified Person means the power to direct the management and policies of
such Person, directly or indirectly, whether through the ownership of voting
equity, by contract or otherwise and the terms "controlling" and "controlled"
have meanings correlative to the meaning of "control."

        "AGREEMENT" means this Master Repurchase Agreement, as it may be
amended, supplemented or otherwise modified from time to time.

        "ASSIGNMENT AND ACCEPTANCE" shall have the meaning assigned thereto in
Section 28(a).

        "BOOK-ENTRY SECURITIES" shall have the meaning assigned to such term in
Section 7(a) hereof.

        "BUSINESS DAY" means any day other than (i) a Saturday or Sunday or (ii)
a day upon which the New York Stock Exchange or the Federal Reserve Bank of New
York is obligated by law or executive order to be closed.

        "BUYER'S MARGIN AMOUNT" means, as of any date of determination, the
amount equal to the product of the Buyer's Margin Percentage and the Repurchase
Price.

        "BUYER'S MARGIN PERCENTAGE" means one hundred thirty-three and one-third
percent (133- 1/3%) provided, that over the first ten (10) months following the
Closing Date, commencing in January 2005, the Buyer's Margin Percentage shall
permanently increase to two hundred percent (200%) in equal increments of six
and two-thirds percent (6-2/3%) on the 25th day of each such month.

        "CAPITAL LEASE OBLIGATIONS" means, for any Person, all obligations of
such Person to pay rent or other amounts under a lease of (or other agreement
conveying the right to use) Property to the extent such obligations are required
to be classified and accounted for as a capital lease on a balance sheet of such
Person under GAAP, and, for purposes of this Master Repurchase Agreement, the
amount of such obligations shall be the capitalized amount thereof, determined
in accordance with GAAP.

        "CHANGE IN LAW" means (a) the adoption of any law, rule or regulation
after the date of this Agreement, (b) any change in any law, rule or regulation
or in the interpretation or application thereof by any Governmental Authority
after the date of this Agreement or (c) compliance by the Buyer (or any
Affiliate of the Buyer) with any request, guideline or directive (whether or not
having the force of law) of any Governmental Authority made or issued after the
date of this Agreement.

                                     - 2 -
<PAGE>

        "CHRYSALIS" means Chrysalis Warehouse Funding, LLC, a Delaware limited
liability company.

        "CHRYSALIS LOAN AGREEMENT" means that certain Master Loan and Security
Agreement, dated as of October 14, 2003, between ABFS Warehouse Trust 2003-2 and
Chrysalis (as amended, modified, supplemented or restated from time to time).

        "CLOSING DATE" means December 21, 2004.

        "CODE" means the Internal Revenue Code of 1986, as amended.

        "COLLATERAL" shall have the meaning assigned thereto in Section 7
hereof.

        "CUSTODIAL AGREEMENT" means the Custodial Agreement, dated as of
November 15, 2004, by and between Buyer and JPMorgan, as custodian, which is
incorporated herein for all purposes, a copy of which is attached hereto as
Exhibit C.

        "CUSTODIAN" means JPMorgan.

        "DEFAULT" means any event, occurrence, condition or circumstance that,
with the giving of notice or passage of time, or both, would constitute an Event
of Default.

        "DEFAULT RATE" shall have the meaning set forth on Schedule II hereto.

        "DOLLARS" and the sign "$" shall each mean freely transferable lawful
money of the United States (expressed in dollars).

        "ELIGIBLE ASSET" means securities approved by the Buyer in its sole
discretion. The securities set forth on Schedule I hereto have been approved by
the Buyer as Eligible Assets.

        "EMC" means EMC Mortgage Corporation.

        "ERISA" means the Employee Retirement Income Security Act of 1974, as
the same may be amended from time to time.

        "ERISA AFFILIATE" means any entity, trade or business (whether or not
incorporated) that is a member of a group of which the Seller is a member and
that is treated as a single employer under Section 414(b), (c), (m) or (o) of
the Code or, solely for purposes of Section 412 of the Code, that is treated as
a single employer under Section 414 of the Code.

        "ESCROW AGREEMENT" means the Escrow and Release of Lien Agreement, dated
as of the Interim Closing Date, by and among ABFS Warehouse Trust 2003-1, ABFS,
Holdings, ABFS Residual Holding II, Inc., the Seller, the Buyer, Clearwing
Capital, LLC and JPMorgan.

        "EVENT OF DEFAULT" shall have the meaning assigned thereto in Section 18
hereof.

        "FEES" shall mean all fees (including without limitation the Quarterly
Maintenance Fee, the Monitoring Fee and the commitment fee referred to in the
definition of Initial Securities

                                     - 3 -
<PAGE>

Purchase Price) and other amounts owing from the Seller to the Buyer as more
fully set forth on Schedule II hereto.

        "FOREIGN BUYER" shall have the meaning assigned to such term in Section
8(d) hereof.

        "GAAP" means generally accepted accounting principles in the United
States of America in effect from time to time.

        "GOVERNING AGREEMENT" means with respect to any Purchased Asset or the
2003-2 IO, the pooling and servicing agreement, sale and servicing agreement,
indenture or similar agreements governing such asset.

        "GOVERNMENTAL AUTHORITY" means any nation or government, any state or
other political subdivision thereof, or any entity exercising executive,
legislative, judicial, regulatory or administrative functions of or pertaining
to government.

        "GUARANTEE" means, as to any Person, any obligation of such Person
directly or indirectly guaranteeing any Indebtedness of any other Person or in
any manner providing for the payment of any Indebtedness of any other Person.

        "HOLDBACK AMOUNT" has the meaning assigned thereto in Section 2(c).

        "HOLDINGS" means ABFS Consolidated Holdings, Inc., a Delaware
corporation.

        "HOLDINGS SHARES" means ABFS's one hundred percent (100%) ownership
interest in the issued and outstanding capital stock of Holdings.

        "INCOME" means, with respect to any Purchased Asset at any time, any
principal thereof and all interest, dividends or other distributions thereon.

        "INDEBTEDNESS" means, with respect to any Person, (a) obligations
created, issued or incurred by such Person for borrowed money (whether by loan,
the issuance and sale of debt securities or the sale of Property to another
Person subject to an understanding or agreement, contingent or otherwise, to
repurchase such Property from such Person); (b) obligations of such Person to
pay the deferred purchase or acquisition price of Property or services, other
than trade accounts payable (other than for borrowed money) arising, and accrued
expenses incurred, in the ordinary course of business, so long as such trade
accounts payable are payable within 90 days of the date the respective goods are
delivered or the respective services are rendered; (c) Indebtedness of others
secured by a Lien on the Property of such Person, whether or not the respective
Indebtedness so secured has been assumed by such Person; (d) obligations
(contingent or otherwise) of such Person in respect of letters of credit or
similar instruments issued or accepted by banks and other financial institutions
for the account of such Person; (e) Capital Lease Obligations of such Person;
(f) obligations of such Person under repurchase agreements, sale/buy-back
agreements or like arrangements; (g) Indebtedness of others guaranteed by such
Person; (h) all obligations of such Person incurred in connection with the
acquisition or carrying of fixed assets by such Person; and (i) Indebtedness of
general partnerships of which such Person is a general partner.

                                     - 4 -
<PAGE>

        "INITIAL SECURITIES PURCHASE PRICE" shall mean $20,554,661, which is the
aggregate of (i) the Securities Purchase Price of $20,414,661 currently
outstanding under, and as defined in, the Interim Master Repurchase Agreement,
and (ii) $140,000 which is a non-refundable commitment fee fully earned at the
Closing Date upon the execution and delivery of this Agreement.

        "INSOLVENCY EVENT" means any of the Events of Default described in
Sections 18(e) or 18(f) hereof.

        "INTEREST RATE PROTECTION AGREEMENT" means any interest rate protection
agreement or other interest hedging arrangement.

        "INTERIM CLOSING DATE" means November 15, 2004.

        "INTERIM MASTER REPURCHASE AGREEMENT" has the meaning assigned thereto
in Section 36.

        "INTERIM TRANSACTION" has the meaning assigned thereto in Section 2(a).

        "INVESTMENT COMPANY ACT" means the Investment Company Act of 1940, as
amended, including all rules and regulations promulgated thereunder.

        "IRS" shall have the meaning assigned to such term in Section 8(d)
hereof.

        "JPMORGAN" means JPMorgan Chase Bank, N.A. (f/k/a JPMorgan Chase Bank).

        "LIEN" means any security interest, mortgage, pledge, hypothecation,
assignment, deposit arrangement, encumbrance, lien (statutory or other), or
preference, priority or other security agreement or preferential arrangement of
any kind or nature whatsoever (including, without limitation, any conditional
sale or other title retention agreement, any financing lease having
substantially the same economic effect as any of the foregoing, and the filing
of any financing statement executed by or on behalf of the debtor named therein
under the Uniform Commercial Code or comparable law of any jurisdiction.

        "MARGIN CALL" shall have the meaning assigned to such term in Section
5(a) hereof.

        "MARGIN DEFICIT" shall have the meaning assigned thereto in Section 5(a)
hereof.

        "MARKET VALUE" means (i) with respect to any Purchased Asset which is an
Eligible Asset as of any date of determination, the market price as determined
by the Buyer in its sole discretion (marked to market daily at the Buyer's sole
discretion) and (ii) with regard to any Purchased Asset which is not an Eligible
Asset, zero.

        "MATERIAL ADVERSE CHANGE" means any event, development or circumstance
(including but not limited to any pending litigation) that has had or could
reasonably be expected to have a material adverse effect on the business,
assets, property, condition (financial or otherwise), or prospects of ABFS and
its Affiliates taken as a whole or the value of the Purchased Assets and the
other Collateral taken as a whole or (b) the validity or enforceability of any
of the Program Documents or the rights or remedies of the Buyer thereunder.

                                     - 5 -
<PAGE>

        "MATERIAL ADVERSE EFFECT" means (a) a Material Adverse Change, (b) a
material impairment of the ability of the Seller or any Affiliate thereof that
is a party to any Program Document to perform under any Program Document and to
avoid any Event of Default; (c) a material adverse effect upon the legality,
validity, binding effect or enforceability of any Program Document against the
Seller or any Affiliate that is a party to any Program Document; or (d) a
material adverse effect upon the marketability of a material portion of the
Purchased Assets and the other Collateral taken as a whole.

        "MINIMUM MONTHLY PAYDOWNS" means, the amount of Permanent Margin
Payments required to be made each month pursuant to Sections 5(b), 6(b) and 6(c)
hereunder, in the following amounts: for each of the months of January,
February, March, April, May and June of 2005, $2,000,000, and for each month
thereafter to the Termination Date, $1,500,000.

        "MONITORING FEE" shall have the meaning assigned thereto on Schedule II
hereto.

        "MULTIEMPLOYER PLAN" means a multiemployer plan as defined in Section
4001(a)(3) of ERISA to which the Seller or any ERISA Affiliate has any liability
or obligation, or has within any of the preceding five plan years had any
liability or obligation whether contingent or otherwise.

        "NET WORTH" means, with respect to any Person, the excess of such
Person's consolidated total assets over such Person's consolidated total
liabilities, determined in accordance with GAAP.

        "NON-EXCLUDED TAXES" shall have the meaning assigned to such term in
Section 8(a) hereof.

        "OBLIGATIONS" means (a) all of the Seller's obligations to pay the Price
Differential (and other amounts due and owing), the Minimum Monthly Paydowns and
the Repurchase Price on or prior to the Termination Date, and other obligations
and liabilities of the Seller or any Affiliate thereof to the Buyer or its
Affiliates (including all Fees) arising under, or in connection with, the
Program Documents, whether now existing or hereafter arising; (b) any and all
sums paid by the Buyer or on behalf of the Buyer pursuant to the Program
Documents in order to preserve any Purchased Asset or its interest therein; (c)
in the event of any proceeding for the collection or enforcement of any of the
Seller's or applicable Affiliate's indebtedness, obligations or liabilities
referred to in clause (a), the reasonable expenses of retaking, holding,
collecting, preparing for sale, selling or otherwise disposing of or realizing
on any Purchased Asset, or of any exercise by the Buyer or any Affiliate thereof
of its rights under the related agreements, including without limitation,
reasonable attorneys' fees and disbursements and court costs, and (d) all of the
Seller's or applicable Affiliate's indemnity obligations to the Buyer pursuant
to the Program Documents.

        "OTHER TAXES" shall have the meaning set forth in Section 8(b).

        "OWNER TRUSTEE" means, with respect to the Seller, Wilmington Trust
Company.

        "PERMANENT MARGIN PAYMENTS" shall have the meaning set forth in Section
5.

                                     - 6 -
<PAGE>

        "PERSON" means any legal person, including any individual, corporation,
partnership, association, joint-stock company, trust, limited liability company,
unincorporated organization, governmental entity or other entity of similar
nature.

        "PLAN" means any pension plan (other than a Multiemployer Plan) subject
to the provisions of Title IV of ERISA or Section 412 of the Code which is
maintained for employees of the Seller or any ERISA Affiliate or as to which the
Seller or any ERISA Affiliate has or may have an obligation or liability,
whether direct or indirect.

        "PLEDGE AGREEMENTS" means (i) that certain Pledge and Security Agreement
dated as of November 15, 2004 between ABFS and the Buyer pursuant to which ABFS
pledged the Holdings Shares to the Buyer; and (ii) that certain Pledge and
Security Agreement dated as of November 15, 2004 between the Seller and the
Buyer pursuant to which the Seller pledged the ABFS 2003-2 Shares to the Buyer
(the "ABFS 2003-2 Share Pledge").

        "PRICE DIFFERENTIAL" means, as of any date of determination, the
aggregate amount obtained by daily application of the Pricing Rate (or during
the continuation of an Event of Default, by daily application of the Default
Rate) to the Securities Purchase Price plus any other outstanding Obligations on
a 360-day-per-year basis for the actual number of days elapsed during the period
commencing on (and including) the Closing Date and ending on (but excluding)
such date of determination (reduced by any amount of such Price Differential in
respect of such period previously paid by the Seller to the Buyer).

        "PRICING RATE" shall have the meaning set forth on Schedule II hereto.

        "PRIME RATE" means the daily prime loan rate as reported in THE WALL
STREET JOURNAL or if more than one rate is published, the highest of such rates.

        "PROGRAM DOCUMENTS" means this Agreement, the Custodial Agreement, the
Pledge Agreements, the Security Agreement, the Servicing Advances Control
Agreement, the Trust Agreements, the Escrow Agreement, the Trustee Direction
Letters, the 2003-2 Officer's Certificate, the Side Letter and any other
agreement entered into by the Seller and/or any of its Affiliates, on the one
hand, and the Buyer and/or any of its Affiliates on the other, in connection
herewith or therewith.

        "PROPERTY" means any right or interest in or to property of any kind
whatsoever, whether real, personal or mixed and whether tangible or intangible.

        "PURCHASED ASSETS" means the securities set forth on Schedule I hereto,
together with the related Records and other Collateral. The term "Purchased
Assets" also shall include (i) any and all rights of the Seller, ABC and/or
applicable Affiliates thereof to effect a cleanup call with respect to the
securitizations to which such Purchased Assets relate (which rights of ABC
and/or its Affiliates have been sold to the Seller), and (ii) any and all rights
to purchase delinquent loans in the underlying securitizations (including,
without limitation, for the purpose of managing delinquency and loss percentages
used to calculate whether a "Trigger Event" or a similar event has occurred
under the related pooling and servicing agreement or the related sale and
servicing agreement pursuant to which the Purchased Assets were issued);
PROVIDED, that the Buyer shall

                                     - 7 -
<PAGE>

only control the exercise of the rights set forth in clause (ii) to purchase
delinquent loans from the related trust upon an Event of Default hereunder and
upon written notice to the Seller of the decision by the Buyer to so control the
exercise of such rights.

        "QUARTERLY MAINTENANCE FEE" shall have the meaning assigned thereto on
Schedule II hereto.

        "RECORDS" means all instruments, agreements and other books, records,
and reports and data generated by other media for the storage of information
maintained by the Seller or any other person or entity on behalf of the Seller
with respect to a Purchased Asset. Records shall include the certificates with
respect to any Purchased Asset and any other instruments necessary to document
or service a Purchased Asset.

        "RELATED PARTIES" means any of ABFS, Trust 2004-1, the Seller, ABC,
Holdings, American Business Mortgage Services, Inc. fka New Jersey Mortgage and
Investment Corp. a New Jersey corporation, HomeAmerican Credit, Inc. dba Upland
Mortgage, a Pennsylvania corporation, or any of their Subsidiaries or
Affiliates.

        "RELEVANT SYSTEM" means (a) The Depository Trust Corporation in New
York, New York, or (b) such other clearing organization or book-entry system as
is designated in writing by the Buyer.

        "REPURCHASE OPTION PREMIUM" has the meaning set forth on Schedule II
hereto.

        "REPURCHASE PRICE" means, as of any date of determination, the sum of
(A) the Securities Purchase Price, (B) any accrued and unpaid Price
Differential, and (C) any accrued and unpaid fees (including without limitation
any due and unpaid Repurchase Option Premium, Quarterly Maintenance Fee or
Monitoring Fee), expenses, breakage costs and/or indemnity amounts. The
Purchased Assets shall be transferred from the Buyer to the Seller on the
Termination Date in exchange for the Repurchase Price and the payment of any
other outstanding Obligations, as more fully described herein.

        "RESPONSIBLE OFFICER" means, with respect to the Seller, any President,
Executive Vice President, Senior Vice President, Assistant Vice President,
Treasury, Secretary or Assistant Secretary of the Seller.

        "SEC" means the United States Securities and Exchange Commission.

        "SECURITIES PURCHASE PRICE" means, as of any date of determination, the
Initial Securities Purchase Price less the sum of all Permanent Margin Payments
made by the Seller to the Buyer (if any) prior to such date; provided, that if
the Holdback Amount, net of the Repurchase Option Premium, is released to the
Seller pursuant to Section 2(c), then the Securities Purchase Price shall be
increased by the Holdback Amount on the date of such release.

        "SECURITY AGREEMENT" means the Security Agreement, dated as of the
Interim Closing Date, executed by ABC in favor of the Buyer, regarding servicer
advances, fees and

                                     - 8 -
<PAGE>

reimbursement rights under ABFS's outstanding securitizations and warehouse
facilities (as amended on the date hereof).

        "SERVICER REIMBURSEMENT AND FEE COLLATERAL" means a perfected first
priority security interest in and lien on all rights to reimbursement for
servicer advances, unearned fees of all types and prepay, late, forbearance,
satisfaction, not sufficient funds and other similar earned fees due to ABC (or
any Affiliate thereof including, without limitation, the Related Parties) as
servicers under any ABFS securitization or warehouse facility, the "par" amount
of which as of November 30, 2004 was not less than $37,000,000 (which shall
constitute a super-priority claim to ABC's or any such Affiliate's right to
receive collections of such amounts from each securitization trust), all pledged
by ABC or any other applicable Affiliate thereof.

        "SERVICING ADVANCES CONTROL AGREEMENT" means the Blocked Account Control
Agreement, dated as of December 16, 2004, by and among the Buyer, ABC and
JPMorgan, in form and substance satisfactory to the Buyer.

        "SIDE LETTER" means that certain Side Letter, dated as of the Interim
Closing Date, between the Buyer and ABFS.

        "SUBSIDIARY" means, with respect to any Person, any corporation,
partnership or other entity of which at least a majority of the securities or
other ownership interests having by the terms thereof ordinary voting power to
elect a majority of the board of directors or other persons performing similar
functions of such corporation, partnership or other entity (irrespective of
whether or not at the time securities or other ownership interests of any other
class or classes of such corporation, partnership or other entity shall have or
might have voting power by reason of the happening of any contingency) is at the
time directly or indirectly owned or controlled by such Person or one or more
Subsidiaries of such Person or by such Person and one or more Subsidiaries of
such Person.

        "TERMINATION DATE" has the meaning assigned thereto in Section 27.

        "TRANSACTION" has the meaning assigned thereto in Section 2(a).

        "TRANSACTION NOTICE" means a written request of the Seller to enter into
the Transaction, in the form attached as Exhibit D hereto, which is delivered to
the Buyer.

        "TRUST 2004-1" means ABFS Warehouse Trust 2004-1.

        "TRUST 2004-2" means ABFS Warehouse Trust 2004-2.

        "TRUST AGREEMENTS" means, collectively, (i) the 2004-1 Trust Agreement
and (ii) the 2004-2 Trust Agreement.

        "TRUSTEE DIRECTION LETTERS" means the payment direction letters,
satisfactory to the Buyer in its sole discretion, from ABFS to the trustees with
respect to the securitizations underlying each of the Purchased Assets, signed
and acknowledged by each recipient thereof, directing all payments on the
Purchased Assets from November 2004 until the Termination Date to the Buyer.

                                     - 9 -
<PAGE>

        "TRUSTS" means, collectively, (i) Trust 2004-1 and (ii) Trust 2004-2.

        "UNIFORM COMMERCIAL CODE" means the Uniform Commercial Code as in effect
on the date hereof in the State of New York or the Uniform Commercial Code as in
effect in the applicable jurisdiction.

        (b)     INTERPRETATION.

        Headings are for convenience only and do not affect interpretation. The
following rules of this subsection (b) apply unless the context requires
otherwise. The singular includes the plural and conversely. A gender includes
all genders. Where a word or phrase is defined, its other grammatical forms have
a corresponding meaning. A reference to a subsection, Section, Annex or Exhibit
is, unless otherwise specified, a reference to a Section of, or annex or exhibit
to, this Agreement. A reference to a party to this Agreement or another
agreement or document includes the party's successors and permitted substitutes
or assigns. A reference to an agreement or document is to the agreement or
document as amended, modified, novated, supplemented or replaced, except to the
extent prohibited by any Program Document; provided, that when a defined term
used herein refers to the Interim Master Repurchase Agreement, such term is used
herein with the meaning specified in the Interim Master Repurchase Agreement. A
reference to legislation or to a provision of legislation includes a
modification or re-enactment of it, a legislative provision substituted for it
and a regulation or statutory instrument issued under it. A reference to writing
includes a facsimile transmission and any means of reproducing words in a
tangible and permanently visible form. A reference to conduct includes, without
limitation, an omission, statement or undertaking, whether or not in writing. An
Event of Default subsists until it has been waived in writing by the Buyer. The
words "hereof", "herein", "hereunder" and similar words refer to this Agreement
as a whole and not to any particular provision of this Agreement. The term
"including" is not limiting and means "including without limitation." In the
computation of periods of time from a specified date to a later specified date,
the word "from" means "from and including"; the words "to" and "until" each mean
"to but excluding", and the word "through" means "to and including." This
Agreement may use several different limitations, tests or measurements to
regulate the same or similar matters. All such limitations, tests and
measurements are cumulative and shall each be performed in accordance with their
terms. Unless the context otherwise clearly requires, all accounting terms not
expressly defined herein shall be construed, and all financial computations
required under this Agreement shall be made, in accordance with GAAP,
consistently applied. References herein to "fiscal year" and "fiscal quarter"
refer to such fiscal periods of the Seller. Except where otherwise provided in
this Agreement any determination, statement or certificate by the Buyer or an
authorized officer of the Buyer provided for in this Agreement is conclusive and
binds the parties in the absence of manifest error. A reference to an agreement
includes a security interest, guarantee, agreement or legally enforceable
arrangement whether or not in writing. A reference to a document includes an
agreement (as so defined) in writing or a certificate, notice, instrument or
document, or any information recorded in computer disk form. Where the Seller is
required to provide any document to the Buyer under the terms of this Agreement,
the relevant document shall be provided in writing or printed form to the Buyer
unless the Buyer requests otherwise. At the request of the Buyer, the document
shall be provided in electronic form or both printed and electronic form. This
Agreement is the result of negotiations between and has been reviewed by counsel
to the Buyer and the Seller, and is the product of both parties. In the
interpretation of this

                                     - 10 -
<PAGE>

Agreement, no rule of construction shall apply to disadvantage one party on the
ground that such party proposed or was involved in the preparation of any
particular provision of this Agreement or this Agreement itself. Except where
otherwise expressly stated the Buyer may give or withhold, or give
conditionally, approvals and consents, may be satisfied or unsatisfied, and may
form opinions and make determinations in its absolute discretion. Any
requirement of good faith or judgment by the Buyer shall not be construed to
require the Buyer to request or await receipt of information or documentation
not immediately available from or with respect to the Seller, a servicer of the
Purchased Assets, any other Person or the Purchased Assets themselves.

2.      THE TRANSACTION.

        (a)     On the Interim Closing Date, the Buyer entered into a
transaction (the "Interim Transaction"), pursuant to the terms set forth in the
Interim Master Repurchase Agreement, in which the Seller transferred to the
Buyer the Purchased Assets, against the Buyer's payment to the Seller of an
Initial Securities Purchase Price of $23,000,000, with a simultaneous agreement,
as set forth therein, by the Buyer to transfer to the Seller such Purchased
Assets on the Termination Date, against the Seller's complete payment of the
Repurchase Price and any other Obligations to the Buyer. The Interim Transaction
was evidenced by a Transaction Notice, executed by the Seller and acknowledged
and agreed to by the Buyer.

        (b)     The Seller has requested the Buyer to modify the residual
repurchase facility underlying the Interim Transaction through an amendment and
restatement of the Interim Master Repurchase Agreement in order to, among other
things, increase the amount thereof and extend the term, which the Buyer hereby
agrees to, subject to the terms and conditions herein.

        (c)     On the Closing Date, the Buyer hereby enters into a transaction
(the "Transaction"), pursuant to the terms set forth herein, in which the
Initial Securities Purchase Price shall have the meaning set forth herein and
the Buyer agrees to increase the Securities Purchase Price by $ 9,445,339.48
(the "Holdback Amount"). The Buyer will promptly release the Holdback Amount to
the Seller, net of the Repurchase Option Premium (in the amount of $360,000),
if, and only if, no later than December 31, 2004: (i) the Buyer has received a
legal opinion (which may also be subject to customary commercial opinion
assumptions, conditions and qualifications) from Blank Rome LLP, as counsel to
ABFS and the Seller, as follows:

        "We are of the opinion that:

        A.      The registration statement of American Business Financial
        Services, Inc. ("ABFS") regarding its retail secured subordinated
        indebtedness (the "Securities"), SEC File No. 333-116742 (the
        "Registration Statement"), has been declared effective under the
        Securities Act of 1933. To our knowledge, upon inquiry of the staff of
        the U.S. Securities and Exchange Commission (the "SEC"), no stop order
        suspending the effectiveness of the Registration Statement has been
        instituted and no proceedings for that purpose have been instituted or
        are pending. The opinion in this paragraph is based solely upon a
        telephone conversation occurring on _________between _________, a member
        of our Firm, and a member of the staff of the Division of Corporate
        Finance of the United States Securities and Exchange Commission.

                                     - 11 -
<PAGE>

        B.      The Securities, when issued pursuant to the terms of the
        Indenture and as contemplated by the Registration Statement, will have
        been duly authorized, validly issued and will be legal, valid and
        binding obligations of ABFS, enforceable in accordance with their terms,
        except as enforcement may be limited by bankruptcy, insolvency or other
        similar laws or court decisions affecting creditors' rights generally
        currently in effect or which may hereafter occur which would render
        unenforceable certain rights and remedies or by general principles of
        equity.

        C.      The issuance of the Securities pursuant to the Indenture and as
        contemplated by the Registration Statement will not violate the
        registration provisions contained in the Securities Act of 1933, as
        amended, to which ABFS is subject, any order, judgment or administrative
        decree applicable to ABFS and known to us, the articles of incorporation
        or by-laws of ABFS, or the terms of any material contracts or agreements
        to which ABFS is a party. For this purpose, the terms "material
        contracts or agreements" includes only those agreements or contracts
        filed with the Securities and Exchange Commission.

        D.      No consents, approvals, authorizations and orders (if any) are
        required by any Federal or Pennsylvania regulatory or governmental body
        or under NASDAQ stock market rules for ABFS to issue and sell the
        securities pursuant to the Indenture and as contemplated by the
        Registration Statement except for those which have been obtained (other
        than approvals or authorizations required under any state securities or
        Blue Sky Laws, if any, as to which we express no opinion);"

(ii) no Event of Default shall have occurred; and (iii) no Termination Event
shall have occurred. If the conditions precedent to the Buyer's conditional
obligation to release the Holdback Amount are not satisfied by 6 p.m. Eastern
Standard Time on December 31, 2004, such obligation shall terminate. The
Transaction shall be evidenced by the Transaction Notice, executed by the Seller
and acknowledged and agreed to by the Buyer.

        (d)     The Seller shall repurchase Purchased Assets from the Buyer on
the Termination Date by paying to the Buyer the Repurchase Price and any other
Obligations by such date. Such obligation to repurchase subsists without regard
to any prior or intervening liquidation or foreclosure with respect to each
Purchased Asset (but liquidation or foreclosure proceeds received by the Buyer
shall be applied to reduce the Repurchase Price except as otherwise provided
herein). The Seller is obligated to obtain the Purchased Assets from the Buyer
or its designee at the Seller's expense on (or after) the Termination Date.

3.      [RESERVED]

4.      FEES; PAYMENT AND TRANSFER.

        (a)     In connection with the Interim Transaction, interest and fees
have been paid under the Interim Master Repurchase Agreement to the date hereof.
Seller acknowledges that all such interest and fees were fully-earned and are
not refundable.

                                     - 12 -
<PAGE>

        (b)     From and after the date hereof, the Seller agrees to pay the
Buyer all Fees owing by the Seller (or any affiliate thereof) to the Buyer as
and when such Fees become due (as more fully set forth on Schedule II hereto).

        (c)     The Seller agrees to pay the accrued Price Differential to the
Buyer no less frequently than on the 25th day of each month.

        (d)     Unless otherwise agreed, all transfers of funds hereunder shall
be in immediately available funds. Any Price Differential received by the Buyer
after 5:00 p.m. New York City time shall be applied on the next succeeding
Business Day, in which case the Seller agrees to pay the Buyer an additional
amount equal to one day's Price Differential with respect to such amount.

5.      MARGIN MAINTENANCE.

        (a)     If on any date the Market Value of the Purchased Assets is less
than Buyer's Margin Amount (a "Margin Deficit"), then the Buyer may make a
margin call on the Seller (a "Margin Call"), specifying, as applicable, the
amount of the Margin Deficit and how payment of the Margin Deficit will be
applied to reduce the components of the Repurchase Price. If a Margin Call is
made, the Seller shall be obligated, within the time period set forth below, to
pay to the Buyer such amount of the outstanding Securities Purchase Price and
Price Differential thereon (and, if applicable, the then outstanding amounts
referred to in clause (C) of the definition of Repurchase Price) all as
specified by the Buyer and as is needed to eliminate the Margin Deficit (and the
portion of any such payment applied by the Buyer to the Securities Purchase
Price shall permanently reduce the Securities Purchase Price) (each such
payment, a "Permanent Margin Payment"). The Seller shall have two (2) Business
Days (not extending beyond the Termination Date) to satisfy any such Margin
Call. Any Income on the Purchased Assets and the other Collateral may be applied
by the Buyer at its option to make Permanent Margin Payments.

        (b)     In addition, the Seller agrees to make payments to the Buyer to
reduce the Securities Purchase Price during the term of this Agreement in the
amounts referred to as the Minimum Monthly Paydowns. Such payments shall be
made, from and after January 1, 2005, in accordance with the provisions of
Section 6 hereof.

        (c)     Notice required pursuant to Section 5(a) may be given by any
means. The failure of the Buyer, on any one or more occasions, to exercise its
rights hereunder shall not change or alter the terms and conditions to which
this Agreement is subject or limit the right of the Buyer to do so at a later
date. The Seller and the Buyer agree that a failure or delay by the Buyer to
exercise its rights hereunder shall not limit or waive the Buyer's rights under
this Agreement or otherwise existing by law or in any way create additional
rights for the Seller.

6.      INCOME PAYMENTS.

        (a)     All Income payments made on the Purchased Assets during the
month of December, 2004 (i.e., those received on December 15, 2004 and scheduled
to be received on December 27, 2004) shall be held by the Buyer to pay (i) the
accrued and unpaid Price

                                     - 13 -
<PAGE>

Differential under, and as defined in, the Interim Master Repurchase Agreement
through and including the date hereof and the accrued and unpaid Price
Differential hereunder and (ii) the Monitoring Fee for November 2004 (pursuant
to the Interim Master Repurchase Agreement) and December 2004, with the balance
of such Income payments then received to be remitted to the Seller, on December
20, 2004 and on December 27, 2004; provided that to the extent such Income
payments for December 2004 exceed $2,100,000, such excess amount of Income
payments shall be retained by the Buyer and applied as a Permanent Margin
Payment, accordingly reducing the Securities Purchase Price.

        (b)     From and after January 1, 2005, all Income payments made on the
Purchased Assets shall be held by the Buyer and applied first, to pay the
accrued and unpaid Fees due to Buyer; second, to pay the accrued and unpaid
Price Differential; and third, to the extent of remaining funds available, to
pay any remaining Obligations (which, for the purposes of this Section 6, shall
include the Securities Purchase Price; all such payments pursuant to clause
third above, together with any other amounts paid to or applied by the Buyer in
accordance with Section 6(c) as necessary to achieve the Minimum Monthly
Paydowns, shall be considered Permanent Margin Payments which shall permanently
reduce the Securities Purchase Price by the amount so paid) until all
Obligations are indefeasibly satisfied in full.

        (c)     As provided in Section 5(b), beginning with the month of January
2005, the Securities Purchase Price is required to be reduced by payments from
the Seller of no less than the Minimum Monthly Paydown for the applicable month.
Any excess reduction in the Securities Purchase Price from prior months (above
the Minimum Monthly Paydown for such month) shall not be credited to future
Minimum Monthly Paydowns. If the aggregate amount of monthly Income payments
applied pursuant to Section 6(b)(third) are insufficient to reduce the
Securities Purchase Price by the applicable Minimum Monthly Paydown, the Buyer
may apply all proceeds received by the Buyer with respect to the Additional
Collateral to the Minimum Monthly Paydown.

7.      SECURITY INTEREST.

        (a)     The Seller and the Buyer intend that the Transaction hereunder
be a sale to the Buyer of the Purchased Assets and not a loan from the Buyer to
the Seller secured by the Purchased Assets. However, in order to preserve the
Buyer's rights under this Agreement in the event that a court or other forum
recharacterizes the Transaction hereunder as other than a sale, and as security
for the Seller's performance of all of its Obligations, the Seller hereby grants
the Buyer a fully perfected first priority security interest in the Additional
Collateral owned by the Seller, the Purchased Assets, the Records, and all
related Property, insurance, Income, custodial accounts, escrow accounts
(including any interest of the Seller in escrow accounts) and any other contract
rights, payments, rights to payment (including payments of interest or finance
charges) general intangibles, all "securities accounts" (as defined in Section
8-501(a) of the Uniform Commercial Code) to which the related securities are or
may be credited, all "investment property", "accounts" and "chattel paper" as
defined in the Uniform Commercial Code as in effect from time to time relating
to or constituting any and all of the foregoing, and all other assets relating
to the Purchased Assets (including, without limitation, any other accounts) or

                                     - 14 -
<PAGE>

any interest in the Purchased Assets and any proceeds and distributions with
respect to any of the foregoing (collectively, the "Collateral"). The parties
acknowledge and agree that the perfection of such security interest is intended
to be accomplished through possession of the related Purchased Assets by the
Buyer or by any other Person on the Buyer's behalf. The Seller, ABFS, ABC and
Holdings further acknowledge and agree, for themselves and on behalf of any
other Affiliates, that rights relating to the Purchased Assets shall only be
exercised by or on behalf of the Buyer, pursuant to instructions provided by the
Buyer. The Buyer or their designee shall, as applicable, hold any book-entry
securities constituting Collateral (the "Book-Entry Securities") through the
facilities of a Relevant System, as "securities intermediary" (as defined in
Section 8-102(a)(14) of the Uniform Commercial Code) and credit them to a
"securities account" (as defined in Section 8-501(a) of the Uniform Commercial
Code) exclusively in the name of the Buyer.

        (b)     (i) The Buyer, as "entitlement holder" (as defined in Section
8-102(a) of the Uniform Commercial Code) with respect to any Book-Entry
Securities, shall be entitled to receive all cash dividends and distributions
paid in respect thereof. Unless an Event of Default shall have occurred and be
continuing, the Seller shall be entitled to exercise all voting and corporate
rights with respect to the Book-Entry Securities, and the Buyer shall exercise
such rights on the Seller's behalf during the time in which the Buyer is the
registered holder of such Book-Entry Securities, provided, however, that no vote
shall be cast or corporate right exercised or other action taken which, in the
Buyer's judgment, would impair the Book-Entry Securities or which would be
inconsistent with or result in any violation of any provision of this Agreement.

        (ii)    Upon the final termination of the Transaction and the payment of
any amounts due hereunder to the Buyer, the Buyer shall register or cause to be
registered in the name of the Seller or its designee the Book Entry Securities.

        (c)     The Buyer may engage, at the Seller's expense, an independent
residual valuation expert to analyze and value the Purchased Assets and the
2003-2 IO during the term of this Agreement.

8.      TAXES; TAX TREATMENT.

        (a)     All payments made by the Seller under this Master Repurchase
Agreement shall be made free and clear of, and without deduction or withholding
for or on account of any present or future taxes, levies, imposts, deductions,
charges or withholdings, and all liabilities (including penalties, interest and
additions to tax) with respect thereto imposed by any Governmental Authority,
excluding income taxes, branch profits taxes, franchise taxes or any other tax
imposed on the net income by the United States, a state or a foreign
jurisdiction under the laws of which the Buyer is organized and/or is operating,
or any political subdivision thereof (collectively, "Non-Excluded Taxes"), all
of which shall be paid by the Seller for its own account not later than the date
when due. If the Seller is required by law or regulation to deduct or withhold
any Non-Excluded Taxes from or in respect of any amount payable hereunder, it
shall: (a) make such a deduction or withholding; (b) pay the amount so deducted
or withheld to the appropriate Governmental Authority not later than the date
when due; (c) deliver to the Buyer promptly, original tax receipts and other
evidence satisfactory to the Buyer of the payment when due of the full amount of
such Non-Excluded Taxes; (d) pay to the Buyer for the ratable benefit of the

                                     - 15 -
<PAGE>

Buyer such additional amount as may be necessary so that the Buyer receives,
free and clear of all Non-Excluded Taxes, a net amount equal to the amount it
would have received under this Agreement if no such deduction or withholding had
been made.

        (b)     In addition, the Seller agrees to pay to the relevant
Governmental Authority in accordance with applicable law any current or future
stamp or documentary taxes or any other excise or property taxes, charges or
similar levies (including, without limitation, mortgage recording taxes,
transfer taxes and similar fees) imposed by the United States or any taxing
authority thereof or therein that arise from any payment made hereunder or from
the execution, delivery or registration of, or otherwise with respect to, this
Master Repurchase Agreement (such taxes, collectively, the "Other Taxes").

        (c)     The Seller agrees to indemnify the Buyer for the full amount of
Non-Excluded Taxes (including additional amounts with respect thereto) and Other
Taxes, and the full amount of Non-Excluded Taxes of any kind imposed by any
jurisdiction on amounts payable under this Section 8, and any liability
(including penalties, interest and expenses) arising therefrom or with respect
thereto, provided that the Buyer shall have provided the Seller with evidence,
reasonably satisfactory to the Seller, of payment of Non-Excluded Taxes or Other
Taxes, as the case may be.

        (d)     Any Buyer that is not incorporated under the laws of the United
States, any State thereof, or the District of Columbia (a "Foreign Buyer") shall
provide the Seller with properly completed United States Internal Revenue
Service ("IRS") Form W-8BEN or W-8SCI or any successor from prescribed by the
IRS, certifying that such Foreign Buyer is entitled to benefits under an income
tax treaty to which the United States is a party which reduces the rate of
withholding tax on payments of interest or certifying that the income receivable
pursuant to this Agreement is effectively connected with the conduct of a trade
or business in the United States on or prior to the date upon which each such
Foreign Buyer becomes the Buyer. Each Foreign Buyer will resubmit the
appropriate form on the earliest of (A) the third anniversary of the prior
submission or (B) on or before the expiration of thirty (30) days after there is
a "change in circumstances" with respect to such Foreign Buyer as defined in
Treas. Reg. Section 1.1441(e)(4)(ii)(D). For any period with respect to which a
Foreign Buyer has failed to provide the Seller with the appropriate form or
other relevant document pursuant to this Section 8(d) (unless such failure is
due to a change in treaty, law, or regulation occurring subsequent to the date
on which a form originally was required to be provided), such Foreign Buyer
shall not be entitled to any "gross up" of Non-Excluded Taxes or indemnification
under Section 8(c) with respect to Non-Excluded Taxes imposed by the United
States; provided, however, that should a Foreign Buyer, which is otherwise
exempt from a withholding tax, become subject to Non-Excluded Taxes because of
its failure to deliver a form required hereunder, the Seller shall take such
steps as such Foreign Buyer shall reasonably request to assist such Foreign
Buyer to recover such Non-Excluded Taxes.

        (e)     Without prejudice to the survival or any other agreement of the
Seller hereunder, the agreements and obligations of the Seller contained in this
Section 8 shall survive the termination of this Master Repurchase Agreement.
Nothing contained in this Section 8 shall require any Buyer to make available
any of its tax returns or other information that it deems to be confidential or
proprietary.

                                     - 16 -
<PAGE>

        (f)     Each party to this Master Repurchase Agreement acknowledges that
it is its intent for purposes of U.S. federal, state and local income and
franchise taxes to treat the Transaction as indebtedness of the Seller that is
secured by the Purchased Assets and that the Purchased Assets are owned by the
Seller in the absence of an Event of Default by the Seller. All parties to this
Master Repurchase Agreement agree to such treatment and agree to take no action
inconsistent with this treatment unless required by law.

9.      CONDITIONS PRECEDENT.

        (a)     As conditions precedent to the Transaction, the Buyer shall have
received, or the following shall have been accomplished, on or before the
Closing Date, in form and substance satisfactory to the Buyer and duly executed
by the Seller and any third party thereto:

                (i)     Each of the Program Documents, duly executed and
        delivered by the parties thereto and being in full force and effect,
        free of any modification, breach or waiver, and, with respect to the
        pledge by ABFS to the Buyer of the Holdings Shares, an acknowledgement
        by ABFS of this amendment and restatement, in form and substance
        satisfactory to the Buyer;

                (ii)    Evidence that all other actions necessary or, in the
        opinion of the Buyer, desirable to perfect and protect the Buyer's
        interest in the Purchased Assets and other Collateral have been taken,
        including, without limitation, duly executed and filed Uniform
        Commercial Code financing statements on Form UCC-1;

                (iii)   A certified copy of the Seller's corporate resolutions
        approving the Program Documents and the Transaction, and all documents
        evidencing other necessary corporate action or governmental approvals as
        may be required in connection with the Program Documents;

                (iv)    An incumbency certificate of the Seller's corporate
        secretary certifying the names, true signatures and titles of the
        Seller's representatives duly authorized to request the Transaction
        hereunder and to execute the Program Documents and the other documents
        to be delivered thereunder;

                (v)     Opinions of the Seller's counsel as to such matters as
        the Buyer may reasonably request and in form and substance acceptable to
        the Buyer, including but not limited to (A) the perfection of the
        Buyer's security interest and Uniform Commercial Code filings, (B) the
        enforceability of the Program Documents, (C) the true sale or
        contribution of the Purchased Assets from (1) ABFS and its Subsidiaries
        to Trust 2004-1 and (2) Trust 2004-1 to the Seller, (D) the
        nonconsolidation of (1) ABFS or its Subsidiaries with Trust 2004-1 and
        (2) Trust 2004-1 and the Seller, (E) the status under the Code of this
        Agreement as a "securities contract", (F) the Investment Company Act
        (and a re-confirmation of the opinions described in subsections (A)
        through, and including, (F) hereof, as of the Closing Date), and (G)
        from Richards, Layton and Finger regarding the Trusts;

                                     - 17 -
<PAGE>

                (vi)    A description of the intended use by Seller of the
        proceeds represented by the Initial Securities Purchase Price, in form
        and substance satisfactory to the Buyer in its sole discretion;

                (vii)   Copies of certified resolutions of the Board of
        Directors of ABFS and the other ABFS Entities party hereto (including
        any applicable committees thereof) authorizing and approving this
        Agreement and the Transaction, in form and substance satisfactory to the
        Buyer;

                (viii)  the Buyer and all participants herein or lenders thereto
        shall have received all Fees (including, without limitation, the
        Repurchase Option Premium) required to be paid, and reimbursement for
        all expenses for which invoices have been presented;

                (ix)    The Buyer shall have received and determined as
        satisfactory, prior to the Closing Date, (i) ABFS's annual report and
        final audited, consolidated financial statements for the fiscal year
        ended June 30, 2004 substantially in the form filed with the SEC on Form
        10-K, together with the opinion thereon of BDO Seidman, LLP; and (ii)
        all correspondence between ABFS and the SEC regarding ABFS's
        registration statement on Form S-2, SEC File Number 333-116,742, and any
        amendments thereto, regarding its retail secured subordinated
        indebtedness;

                (x)     the Buyer or their designee shall have received with
        respect to the related Purchased Assets and the 2003-2 IO (if
        applicable) (unless otherwise specified in this Agreement) the
        following, in form and substance satisfactory to the Buyer and (if
        applicable) duly executed:

                        (1)     The definitive certificate representing
                                ownership of the securities included in the
                                Purchased Assets in the name of the Buyer;

                        (2)     Each Governing Agreement with respect to such
                                Purchased Asset and the 2003-2 IO, a list of
                                which is set forth on Schedule III hereto and
                                the Seller shall have delivered all certificates
                                required of the Seller under all such Governing
                                Agreements;

                        (3)     Copies of any bond insurer consents with respect
                                to the transfer of the Purchased Assets to the
                                Seller and from the Seller to the Buyer, all in
                                form and substance satisfactory to the Buyer in
                                its sole discretion;

                        (4)     Copies of the Trustee Direction Letters; and

                        (5)     Such certificates, opinions of counsel or other
                                documents executed in connection with the
                                Transaction by or on behalf of any ABFS Entity
                                or any other documents that the Buyer may
                                reasonably request in connection therewith;

                (xi)    No Default or Event of Default shall have occurred and
        be continuing;

                                     - 18 -
<PAGE>

                (xii)   All representations and warranties in the Program
        Documents hereof shall be true and correct on the Closing Date;

                (xiii)  No event or events shall have been reasonably determined
        by the Buyer to have occurred resulting in the effective absence of a
        "repo market" for a period of at least two (2) consecutive days
        respecting loans or mortgage-backed or asset-backed securities such that
        the Buyer is or was unable after good faith efforts to finance or fund
        purchases under this Agreement through the "repo market" or the Buyer's
        customers;

                (xiv)   ABFS shall have obtained a "key man" life insurance
        policy on the life of Anthony J. Santilli, collaterally assigned to the
        Buyer, in an amount at least equal to $3,000,000;

                (xv)    Buyer shall receive prior written notice from the
        insurer of any termination of ABFS's errors and omissions insurance and
        fidelity bond;

                (xvi)   ABFS shall have received one or more definitive
        warehouse commitments (or similar financing arrangements) for one or
        more Additional Warehouse Lines, which Additional Warehouse Lines shall
        be required to close (and at least one which shall have funded) not
        later than the Closing Date, and ABFS shall have delivered to the Buyer
        an Officer's Certificate certifying the same;

                (xvii)  There shall not have occurred and be continuing one or
        more events that, in the reasonable judgment of the Buyer, constitute(s)
        or should reasonably be expected to constitute, a Material Adverse
        Effect;

                (xviii) The Seller shall have registered the applicable
        Purchased Assets in the name of the Buyer. In connection with any
        account to which the Purchased Assets are credited or otherwise held,
        the Seller shall execute and deliver such other and further documents or
        instruments necessary, in the reasonable opinion of the Buyer, to effect
        and perfect a legally valid delivery of the relevant interest granted
        therein to Buyer hereunder. Any account to which the Purchased Assets
        are credited or otherwise shall be designated as the Buyer may direct;

                (xix)   Chrysalis and Clearwing Capital, LLC shall have released
        all of their respective interests in the Purchased Assets and the
        servicer advances and reimbursement rights granted to ABFS Warehouse
        Trust 2003-1 on October 14, 2003, such release to be in form and
        substance satisfactory to the Buyer;

                (xx)    An independent director satisfactory to Buyer shall have
        been appointed with respect to Holdings and amendments to the
        organizational documents of Holdings satisfactory to the Buyer shall
        have been adopted;

                                     - 19 -
<PAGE>

                (xxi)   Information and/or documents satisfactory to the Buyer
        in its sole discretion shall have been provided by Seller to Buyer
        regarding and/or evidencing any outstanding Liens with respect to the
        2003-2 IO (including but not limited to the 2003-2 Officer's
        Certificate);

                (xxii)  Amendment Number One of the Security Agreement shall
        have been fully executed and delivered, and the Seller shall have
        acknowledged and agreed to Buyer's satisfaction that the Pledge
        Agreement to which Seller is party secures Seller's obligation under
        this Agreement; and

                (xxiii) A letter agreement in form and substance satisfactory to
        the Buyer and the Seller pursuant to which the Buyer conditionally
        agrees to release its security interest in certain Servicer
        Reimbursement and Fee Collateral related to the securitization referred
        to as "ABFS Mortgage Loan Trust 2003-1" upon a sale of such assets to a
        third party unrelated to ABFS shall be executed and delivered.

        (b)     The following shall be ongoing conditions required to be
satisfied by the Seller throughout the term of this Agreement (including as of
the Closing Date):

                (i)     No Default or Event of Default shall have occurred and
        be continuing;

                (ii)    All representations and warranties in the Program
        Documents hereof shall be true and correct;

                (iii)   No event or events shall have been reasonably determined
        by the Buyer to have occurred resulting in the effective absence of a
        "repo market" for a period of at least two (2) consecutive days
        respecting loans or mortgage-backed or asset-backed securities such that
        the Buyer is or was unable to finance or fund purchases under this
        Agreement through the "repo market" or the Buyer's customers;

                (iv)    There shall not have occurred and be continuing one or
        more events that, in the reasonable judgment of the Buyer, constitute(s)
        or should reasonably be expected to constitute, a Material Adverse
        Effect; and

                (v)     The Buyer shall have received (A) the financial
        statements required pursuant to Section 13(c) hereof; (B) current
        financial statements from the servicers of ABFS's securitizations and
        warehouse facilities, prepared in accordance with GAAP, along with
        certifications, which must evidence that each such servicer has a
        positive net worth (and cover related matters); (C) all data regarding
        ABFS's or any of its Subsidiaries' outstanding securitizations as Buyer
        in its sole discretion may request (including but not limited to all
        servicer or trustee reports regarding same and all loan level and
        servicing data requested from time to time); (D) any other documents or
        information requested by Buyer regarding the documents referred to in
        clauses (B) and (C); and (E) any correspondence between ABFS and the SEC
        and between ABFS and its bond insurers which the Buyer in its sole
        discretion may request.

9A.     CONDITIONS SUBSEQUENT.

        The following shall be conditions subsequent required to be satisfied by
the Seller on or before Friday, December 24, 2004:

                                     - 20 -
<PAGE>

        (a)     The Seller shall have executed and delivered an amendment to the
ABFS 2003-2 Share Pledge, to which ABFS 2003-2, Inc. shall be joined as a party,
in form and substance satisfactory to the Buyer in its sole discretion, pursuant
to which ABFS 2003-2, Inc. shall agree not to pledge the 2003-2 IO (except
pursuant to the existing pledge in favor EMC pursuant to the 2003-2 sale of
servicing to EMC) and ABFS 2003-2, Inc. will covenant not to incur indebtedness
or guarantees other than the existing obligation to EMC; and

        (b)     A payment direction letter, in form and substance satisfactory
to the Buyer in its sole discretion, shall have been delivered by the Seller and
ABFS 2003-2, Inc. to the paying agent for the related securitization with
respect to all principal, interest, dividends or other distributions to be paid
with respect to the 2003-2 IO; and

        (c)     The owners of Trust 2004-1 shall amend the 2004-1 Trust
Agreement to (i) require the consent of the holder of the 2004-1 P Certificate
to actions taken by any other certificateholder of Trust 2004-1 or the depositor
thereunder, (ii) restrict all further pledges of the 2004-1 R Certificates and
distributions thereon (and, accordingly, the pledge of distributions thereon in
favor of the indenture trustees to secure ABFS' secured subordinated
indebtedness shall remain in place), and (iii) restrict all transfers of the
2004-1 R Certificates, such amendment to be in form and substance satisfactory
to the Buyer in its sole discretion.

10.     RELEASE OF PURCHASED ASSETS.

        Upon timely payment in full of the Repurchase Price and all other
Obligations owing with respect to the Purchased Assets by the Termination Date,
if no Event of Default has occurred and is continuing, the Buyer shall transfer
the Purchased Assets to the Seller or its nominee free and clear of any security
interest of the Buyer.

11.     RELIANCE.

        With respect to the Transaction, the Buyer may conclusively rely upon,
and shall incur no liability to the Seller in acting upon, any request or other
communication that the Buyer reasonably believes to have been given or made by a
person authorized to enter into the Transaction on the Seller's behalf, provided
that such person is listed on the certificate delivered pursuant to subsection
9(a)(iv) hereof. In each such case, the Seller hereby waives the right to
dispute the Buyer's record of the terms of such request or other communication.

12.     REPRESENTATIONS AND WARRANTIES.

        The Seller hereby represents and warrants that:

        (a)     DUE ORGANIZATION AND QUALIFICATION. The Seller is duly
organized, validly existing and in good standing under the laws of the
jurisdiction under whose laws it is organized. The Seller is duly qualified to
do business, is in good standing and has obtained all necessary licenses,
permits, charters, registrations and approvals necessary for the conduct of its
business as currently conducted and the performance of its obligations under the
Program Documents, except where failure to so qualify, be in good standing or to
so obtain would not be reasonably

                                     - 21 -
<PAGE>

likely to have a Material Adverse Effect. Neither Seller nor Trust 2004-1 is an
entity that may be a debtor under Title 11 of the United States Code, as
amended.

        (b)     POWER AND AUTHORITY. The Seller has all necessary power and
authority to conduct its business as currently conducted, to execute, deliver
and perform its obligations under the Program Documents and to consummate the
Transaction.

        (c)     DUE AUTHORIZATION. The execution, delivery and performance of
the Program Documents by the Seller has been duly authorized by all necessary
action and do not require any additional approvals or consents or other action
by or any notice to or filing with any Person other than any that have
heretofore been obtained, given or made.

        (d)     NONCONTRAVENTION. None of the execution and delivery of the
Program Documents by the Seller or any other ABFS Entity or the consummation of
the Transaction:

                (i)     conflicts with, breaches or violates any provision of
        the organizational documents or material agreements of the Seller or
        such other ABFS Entity or any law, rule, regulation, order, writ,
        judgment, injunction, decree, determination or award currently in effect
        having applicability to the Seller or its properties;

                (ii)    constitutes a material default by the Seller or such
        other ABFS Entity under any loan or repurchase agreement, mortgage,
        indenture or other agreement or instrument to which the Seller is a
        party or by which it or any of its properties is or may be bound or
        affected; or

                (iii)   results in or requires the creation of any Lien upon or
        in respect of any of the assets of the Seller or such other ABFS Entity
        except the Lien relating to the Program Documents.

        (e)     LEGAL PROCEEDINGS. There is no action, proceeding or
investigation by or before any court, governmental or administrative agency or
arbitrator affecting any of the Purchased Assets, the 2003-2 IO, the Seller or
any of its Affiliates, pending or threatened, which is reasonably likely to be
adversely determined and which, if decided adversely, would have a Material
Adverse Effect.

        (f)     VALID AND BINDING OBLIGATIONS. Each of the Program Documents to
which the Seller is a party, when executed and delivered by the Seller, will
constitute the legal, valid and binding obligation of the Seller enforceable
against the Seller in accordance with their respective terms, except as such
enforceability may be limited by bankruptcy, insolvency, reorganization,
moratorium or other similar laws affecting creditors' rights generally and
general equitable principles.

        (g)     FINANCIAL STATEMENTS. The financial statements of the Seller,
ABFS, Holdings and ABC, copies of which have been furnished to the Buyer, (i)
are, as of the dates and for the periods referred to therein, complete and
correct in all material respects, (ii) present fairly the financial condition
and results of operations of the Seller as of the dates and for the periods
indicated and (iii) have been prepared in accordance with GAAP consistently
applied, except as

                                     - 22 -
<PAGE>

noted therein (subject as to interim statements to normal year-end adjustments).
Since the date of the most recent financial statements, there has been no
Material Adverse Change in such financial condition or results of operations.
Except as disclosed in such financial statements, the Seller is not subject to
any contingent liabilities or commitments that, individually or in the
aggregate, have a material possibility of causing a Material Adverse Change with
respect to the Seller, provided, to the extent that the September 30, 2004
financial statements reflect a loss of between $25,000,000 and $30,000,000, the
existence and amount of such loss alone shall not constitute a Material Adverse
Change.

        (h)     ACCURACY OF INFORMATION. None of the documents or information
prepared by or on behalf of the Seller or any of its Affiliates and provided by
the Seller or any of its Affiliates to the Buyer relating to the Seller's or any
such Affiliate's financial condition contain any statement of a material fact
with respect to the Seller or any such Affiliate or the Transaction that was
untrue or misleading in any material respect when made. Since the furnishing of
such documents or information, there has been no change, nor any development or
event involving a prospective change known to the Seller or any such Affiliate
that would render any of such documents or information untrue or misleading in
any material respect.

        (i)     NO CONSENTS. No consent, license, approval or authorization
from, or registration, filing or declaration with, any regulatory body,
administrative agency, or other governmental instrumentality, nor any consent,
approval, waiver or notification of any creditor, lessor or other
nongovernmental person (including bond insurers in the securitizations relating
to the Purchased Assets), is required in connection with the execution, delivery
and performance by the Seller of this Agreement or the consummation by the
Seller of any other Program Document, other than any that have heretofore been
obtained, waived, given or made.

        (j)     COMPLIANCE WITH LAW, ETC. No practice, procedure or policy
employed or proposed to be employed by the Seller in the conduct of its
businesses violates any law, regulation, judgment, agreement, order or decree
applicable to it which, if enforced, would result in a Material Adverse Effect.

        (k)     SOLVENCY; FRAUDULENT CONVEYANCE. The Seller is solvent and will
not be rendered insolvent by the Transaction and, after giving effect to the
Transaction, the Seller will not be left with an unreasonably small amount of
capital with which to engage in its business. The Seller does not intend to
incur, or believe that it has incurred, debts beyond its ability to pay such
debts as they mature. The Seller is not contemplating the commencement of
insolvency, bankruptcy, liquidation or consolidation proceedings or the
appointment of a receiver, liquidator, conservator, trustee or similar official
in respect of the Seller or any of its assets. The amount of consideration being
received by the Seller upon the sale of the Purchased Assets to the Buyer
constitutes reasonably equivalent value and fair consideration for such
Purchased Assets. The Seller is not transferring any Purchased Assets with any
intent to hinder, delay or defraud any of its creditors.

        (l)     INVESTMENT COMPANY ACT COMPLIANCE. None of the Seller, Trust
2004-1, ABFS Warehouse Trust 2003-1, ABFS, ABC or Holdings is required to be
registered as an "investment company" as defined under the Investment Company
Act or as an entity under the control of an "investment company" as defined
under the Investment Company Act.

                                     - 23 -
<PAGE>

        (m)     TAXES. Each ABFS Entity or applicable Affiliate thereof has
filed all federal and state tax returns which are required to be filed and paid
all taxes, including any assessments received by it, to the extent that such
taxes have become due with respect to the Purchased Assets (other than for taxes
that are being contested in good faith or for which it has established adequate
reserves). Any taxes, fees and other governmental charges payable by any ABFS
Entity or applicable Affiliate thereof in connection with the Transaction and
the execution and delivery of the Program Documents have been paid.

        (n)     ADDITIONAL REPRESENTATIONS. With respect to each Purchased Asset
and the 2003-2 IO, the Seller hereby makes all of the representations and
warranties set forth in Exhibit B continuously while such Purchased Asset or the
ABFS 2003-2 Shares are subject to the Transaction; and the Seller understands
that if the substance of any such representation or warranty ceases to be true
because of events occurring while such Purchased Asset is subject to the
Transaction, the Market Value thereof could be adversely affected.

        (o)     NO BROKER. The Seller has not dealt with any broker, investment
banker, agent, or other person, except for the Buyer, who may be entitled to any
commission or compensation in connection with the sale of Purchased Assets
pursuant to this Agreement; provided, that if the Seller has dealt with any
broker, investment banker, agent, or other person, except for the Buyer, who may
be entitled to any commission or compensation in connection with the sale of
Purchased Assets pursuant to this Agreement, such commission or compensation
shall have been paid in full by the Seller.

        (p)     NET WORTH. The Net Worth of ABFS as of the fiscal quarter ending
September 30, 2004 was at least $10,000,000.

        (q)     TRUE SALES. Any and all interest of any ABFS Entity or any
Affiliate thereof (other than the Seller) in, to and under the Purchased Assets
had, immediately prior to the Transaction, been sold, transferred, conveyed and
assigned to the Seller pursuant to a legal true sale or contribution and no ABFS
Entity nor any other Person (other than the Seller) retained, immediately prior
to the Transaction, any interest in such Purchased Assets and this is covered by
an opinion of counsel to that effect in form and substance reasonably acceptable
to the Buyer.

        (r)     CHARACTERIZATION OF THE TRANSACTION. The Transaction is a
"forward contract" as that term is defined in Section 101 of Title 11 of the
USC, and a "securities contract" as that term is defined in Section 741 of Title
11 of the USC. The Buyer's right to liquidate the Purchased Assets delivered to
it in connection with the Transaction hereunder or to exercise any other
remedies pursuant to Section 19 hereof is a contractual right to liquidate the
Transaction as described in Sections 555 of Title 11 of the USC.

        The representations and warranties set forth in this Agreement shall
survive transfer of the Purchased Assets to the Buyer and shall continue for so
long as the Purchased Assets are subject to this Agreement.

                                     - 24 -
<PAGE>

13.     COVENANTS.

        On and as of the date of this Agreement and continuously until this
Agreement is no longer in force with respect to the Transaction, each ABFS
Entity hereby covenants with the Buyer as follows:

        (a)     PRESERVATION OF EXISTENCE; COMPLIANCE WITH LAW. Such ABFS Entity
shall:

                (i)     Preserve and maintain its legal existence and all of its
        material rights, privileges, licenses and franchises necessary for the
        operation of its business;

                (ii)    Comply in all material respects with the requirements of
        all applicable laws, rules, regulations and orders, whether now in
        effect or hereafter enacted or promulgated by any applicable
        Governmental Authority (including, without limitation, all environmental
        laws), if failure to comply with such requirements would be reasonably
        likely (either individually or in the aggregate) to have a Material
        Adverse Effect; and

                (iii)   Maintain all licenses, permits or other approvals
        necessary for the Seller to conduct its business and to perform its
        obligations under the Program Documents, and conduct its business
        strictly in accordance with applicable law, except where failure to do
        so would not be reasonably likely to have a Material Adverse Effect.

        (b)     NOTICE OF PROCEEDINGS OR ADVERSE CHANGE. Such ABFS Entity shall
give notice to the Buyer promptly after a Responsible Officer thereof has any
knowledge of:

                (i)     the occurrence of any Default or Event of Default or
        default or breach by such ABFS Entity of any obligation under any
        Program Document, or the occurrence or existence of any event or
        circumstance that such ABFS Entity reasonably expects will with the
        passage of time become a Default, Event of Default or such a default or
        breach by it;

                (ii)    any change in the insurance coverage required of such
        ABFS Entity pursuant to any Program Document, with copy of evidence of
        same attached;

                (iii)   (a) any default or event of default under any
        Indebtedness of it, (b) within ten (10) calendar days after service of
        process with respect to the same, any litigation, investigation,
        regulatory action or proceeding that is pending or threatened by or
        against such ABFS Entity in any federal or state court or before any
        Governmental Authority which, if not cured or if adversely determined,
        would reasonably be expected to have a Material Adverse Effect or
        constitute a Default or Event of Default, or (c) any Material Adverse
        Effect with respect to the Seller or ABFS;

                (iv)    within ten (10) calendar days after service of process
        with respect to the same, any litigation or proceeding that is pending
        or threatened against such ABFS Entity (a) in which the amount involved
        exceeds $50,000 and is not covered by insurance, in which injunctive or
        similar relief is sought, or which, would reasonably be expected to have
        a Material Adverse Effect and (b) any litigation or proceeding that is
        pending or

                                     - 25 -
<PAGE>

        threatened in connection with any Collateral, which, if adversely
        determined, would reasonably be expected to have a Material Adverse
        Effect;

                (v)     and, as soon as reasonably possible, notice of any of
        the following events:

                        (1)     any material change in accounting policies or
                                financial reporting practices of the it;

                        (2)     promptly upon receipt of notice or knowledge of
                                any Lien or security interest (other than
                                security interests created hereby) on, or claim
                                asserted against, any of the Collateral.

                (vi)    the occurrence of any material employment dispute and a
        description of the strategy for resolving it; and

                (vii)   any event, circumstance or condition that has resulted,
        or has the possibility of resulting, in a Material Adverse Effect.

        (c)     FINANCIAL REPORTING. Such ABFS Entity shall maintain a system of
accounting established and administered in accordance with GAAP, and shall
clearly reflect therein the transfer of Purchased Assets to the Buyer. ABFS
shall furnish to the Buyer:

                (i)     Within ninety (90) days after the close of each fiscal
        year, the consolidated, audited balance sheets of ABFS as of the end of
        each fiscal year, and the audited financial statements of income and
        changes in equity of ABFS, and the audited statement of cash flows of
        ABFS, for such fiscal year, all in reasonable detail and accompanied by
        an opinion of an accounting firm as to said financial statements;

                (ii)    Within forty-five (45) days after the close of each of
        ABFS's first three fiscal quarters in each fiscal year unaudited balance
        sheets and income statements, for the period from the beginning of such
        fiscal year to the end of such fiscal year, subject, however, to normal
        year-end adjustments and the inclusion of footnotes, and certified by an
        executive officer of ABFS;

                (iii)   Within thirty (30) days after the end of each calendar
        month, the unaudited balance sheets of ABFS as at the end of such period
        and the related unaudited consolidated statements of income and retained
        earnings and of cash flows for ABFS for such period and the portion of
        the fiscal year through the end of such period, subject, however, to
        year end adjustments and the inclusion of footnotes, and certified by an
        executive officer of ABFS;

                (iv)    Simultaneously with the furnishing of each of the
        financial statements to be delivered pursuant to subsection (ii) above,
        or monthly upon the Buyer's request, a certificate in the form of
        Exhibit A hereto and certified by an executive officer of ABFS and the
        Seller;

                (v)     Copies of any 10-Ks, 10-Qs, registration statements and
        other "corporate finance" SEC filings (other than 8-Ks) by ABFS, within
        five (5) Business Days of their

                                     - 26 -
<PAGE>

        filing with the SEC; provided, that, the Seller or any Affiliate will
        provide the Buyer with a copy of the annual 10-K filed with the SEC by
        ABFS no later than 90 days after the end of the year; and

                (vi)    Promptly, from time to time, such other information
        regarding the business affairs, operations and financial condition of
        ABFS and the Seller as the Buyer may reasonably request.

        (d)     FURTHER ASSURANCES. Such ABFS Entity shall execute and deliver
to the Buyer all further documents, financing statements, agreements and
instruments, and take all further action that may be required under applicable
law, or that the Buyer may reasonably request, in order to effectuate the
transactions contemplated by this Agreement or, without limiting any of the
foregoing, to grant, preserve, protect and perfect the validity and
first-priority of the security interests created or intended to be created
hereby. Such ABFS Entity shall do all things necessary to preserve the
Collateral so that such ABFS Entity remains subject to a first priority
perfected security interest hereunder. Without limiting the foregoing, (i) such
ABFS Entity will comply with all rules, regulations, and other laws of any
Governmental Authority and cause the Collateral to comply with all applicable
rules, regulations and other laws, and (ii) each ABFS Entity as applicable
agrees to fully cooperate on a time-of-the-essence basis with the Buyer and any
of its designees in connection with any exercise of the rights provided for in
clause (i) of the definition of Purchased Assets, including, without limitation,
in respect of (x) the preparation of due diligence and marketing materials for
the disposition by Buyer to third parties of the related mortgage loans (and any
real property) and servicing rights related thereto; (y) the provision of
responses to questions from prospective buyers of the related mortgage loans
(and any real property) regarding origination and prior servicing practices; and
(z) the preparation of appropriate conveyance documents for such dispositions,
all in accordance with prudent and customary secondary mortgage market
practices. Such ABFS Entity will not allow any default for which the Seller is
responsible to occur under any Collateral document or any Program Document and
such ABFS Entity shall fully perform or cause to be performed when due all of
its obligations under any Collateral document or the Program Documents.

        (e)     TRUE AND CORRECT INFORMATION. All information, reports,
exhibits, schedules, financial statements or certificates of ABFS or any of its
Subsidiaries or any of their officers furnished to the Buyer hereunder and
during the Buyer's diligence of ABFS (when taken as a whole) are and will be
true and complete and do not and will not omit to disclose any material facts
necessary to make the statements herein or therein, in light of the
circumstances in which they are made, not misleading. All required financial
statements, information and reports delivered by such ABFS Entity to the Buyer
pursuant to any Program Document shall, except as otherwise specifically
permitted herein, be prepared in accordance with GAAP.

        (f)     BOOKS AND RECORDS. Such ABFS Entity shall, to the extent
practicable, maintain and implement administrative and operating procedures
(including without limitation, an ability to recreate records evidencing the
Collateral in the event of the destruction of the originals thereof), and keep
and maintain or obtain, as and when required, all documents, books, records and
other information reasonably necessary or advisable for the collection of all
the Collateral.

                                     - 27 -
<PAGE>

        Upon reasonable advance notice from the Buyer, such ABFS Entity shall
(x) make any and all such Records available to the Buyer to examine any such
Records, either by their own officers or employees, or by agents or contractors,
or both, and make copies of all or any portion thereof, (y) permit the Buyer or
its authorized agents to discuss the affairs, finances and accounts of ABFS and
the Seller with their chief operating officers and chief financial officers and
to discuss the affairs, finances and accounts of ABFS and the Seller with their
independent certified public accountants.

        (g)     ILLEGAL ACTIVITIES. Such ABFS Entity has not engaged, is not
engaging, and shall not in the future engage in any conduct or activity that
could subject its assets to forfeiture or seizure, including without limitation,
conduct or activities in violation of the Racketeer Influenced and Corrupt
Organizations Act, the Bank Secrecy Act, anti-money laundering laws and
regulations (including the USA PATRIOT Act of 2001 and the regulations issued
thereto), or narcotic drug laws.

        (h)     MATERIAL CHANGE IN BUSINESS. Such ABFS Entity shall not make any
material change in the nature of its business as carried on at the date hereof.

        (i)     ASSIGNMENt. Except as permitted herein, such ABFS Entity shall
not sell, assign, transfer or otherwise dispose of, or grant any option with
respect to, or pledge, hypothecate or grant a security interest in or Lien on or
otherwise encumber (except pursuant to the Program Documents), any of the
Purchased Assets or any interest therein, provided that this Section 13(i) shall
not prevent any transfer of Purchased Assets in accordance with the Program
Documents.

        (j)     TRANSACTIONS WITH AFFILIATES. Such ABFS Entity shall not enter
into any transaction, including without limitation any purchase, sale, lease or
exchange of property or the rendering of any service, with any Affiliate (except
for (i) the acquisition of equity or stock or warrants of an Affiliate and (ii)
the payment of dividends, in either case, in the ordinary course of business,
and (iii) the purchase or sale of loans in the ordinary course of business which
is a true sale and does not constitute a fraudulent conveyance) unless such
transaction is (a) not otherwise expressly prohibited under this Agreement, (b)
in the ordinary course of its business and (c) upon fair and reasonable terms no
less favorable to the Seller than such ABFS Entity would obtain in a comparable
arm's length transaction with a Person which is not an Affiliate, or make a
payment that is not otherwise permitted by this Section 13(j) to any Affiliate.

        (k)     ERISA MATTERS. Such ABFS Entity shall not establish, maintain or
contribute to, any Plans or Multiemployer Plans.

        (l)     CONSOLIDATIONS, MERGERS AND SALES OF ASSETS. Such ABFS Entity
shall not (i) consolidate or merge with or into any other Person or (ii) sell,
lease or otherwise transfer all or substantially all of its assets to any other
Person; provided that such ABFS Entity may merge or consolidate with (a) any
wholly owned subsidiary of it, or (b) any other Person if such ABFS Entity is
the surviving corporation or shareholders of the ABFS Entity immediately prior
to the merger continue to own a majority of the voting shares of the surviving
corporation; and provided further that if after giving effect thereto, no Event
of Default would exist hereunder.

                                     - 28 -
<PAGE>

        (m)     REPORTS. The Seller shall promptly deliver to the Buyer (unless
received from the Buyer) (a) any report received by or required to be delivered
by such ABFS Entity pursuant to the Governing Agreements at the same time as
required thereunder; (b) any notice of transfer of servicing under the Governing
Agreement and (c) any other such document or information as may be reasonably
requested by the Buyer from time to time.

        (n)     TAXES.

                (i)     Such ABFS Entity shall timely pay and discharge or cause
to be paid and discharged, when due, all taxes, assessments and governmental
charges or levies imposed upon such ABFS Entity or upon its income and profits
or upon any of its property, real, personal or mixed (including without
limitation, the Collateral) or upon any part thereof; as well as any other
lawful claims which, if unpaid, might become a Lien upon such properties or any
part thereof, except for any such taxes as are appropriately contested in good
faith by appropriate proceedings diligently conducted and with respect to which
adequate reserves are provided.

                (ii)    Such ABFS Entity shall file on a timely basis all tax
and information returns, reports and any other information statements or
schedules required to be filed by or in respect of such ABFS Entity in any
applicable jurisdiction.

        (o)     SUBORDINATED INDEBTEDNESS. ABFS shall maintain an effective
registration statement with the SEC for retail subordinated indebtedness with
availability of at least $30,000,000 at all times following December 31, 2004.
In addition, ABFS shall not be unable for any reason to sell or issue
subordinated debentures or senior collateralized subordinated notes under any
existing Sub-debt Indentures (defined in the Chrysalis Loan Agreement as all
indentures entered into prior to the closing date of that credit facility
between ABFS and U.S. Bank National Association) or any other similar future
indentures (A) on or after December 10, 2004, for more than three (3)
consecutive weeks or (B) on more than two (2) occasions during the term of this
Agreement irrespective of the length of time of such two occasions;

        (p)     NASDAQ LISTING STATUS. ABFS shall at all times satisfy all
requirements for maintaining ABFS's Nasdaq listing status subject to the cure
period or appeal process provided in Section 18(t) hereof; (q) KEY EMPLOYEES.
ABFS shall retain Anthony J. Santilli, Jeffrey Ruben and Albert Mandia in their
current positions at ABFS at all times or shall replace such employees with
successors acceptable to the Buyer in its reasonable discretion;

        (r)     INSURANCE. ABFS shall maintain at all time levels of general
liability, errors and omissions and fidelity bond coverage no lower than the
levels of coverage maintained by ABFS as of the Closing Date; in addition, ABFS
shall maintain in force a "key man" life insurance policy on the life of Anthony
J. Santilli, ABFS collaterally assigned to the Buyer, in an amount at least
equal to $3,000,000;

        (s)     LINES OF BUSINESS. The Seller will not engage in any line or
lines of business activity other than the businesses specifically permitted by
the trust agreement constituting the Seller in effect as of the Interim Closing
Date; and

                                     - 29 -
<PAGE>

        (t)     MAINTENANCE OF SEPARATENESS. The Seller acknowledges that the
Buyer is relying upon and will continue to rely on the separate legal identity
and the separate assets of the Seller as distinguished from any other Person.
The Seller agrees that its business shall be operated and its affairs shall be
conducted in such a manner that its assets and liabilities can be readily
determined and shall not be substantively consolidated with those of any other
Person in the event of the bankruptcy or insolvency of the Seller or such other
Person. Without limiting the foregoing, the Seller shall conduct its business in
its own name, maintain its books and records separate from those of any other
Person, maintain its bank accounts separate from those of any other Person,
maintain separate financial statements, showing its assets and liabilities
separate and apart from those of any other Person, pay its own liabilities and
expenses only out of its own funds, enter into a transaction with an Affiliate
only if such transaction is intrinsically fair, commercially reasonable and on
the same terms as would be available in an arm's length transaction with a
Person or entity that is not an Affiliate, allocate fairly and reasonably any
overhead expenses that are shared with an Affiliate, hold itself out as a
separate entity, maintain adequate capital in light of its contemplated business
operations and observe all other appropriate entity and other organizational
formalities.

        (u)     ABFS 2003-2, INC. The Seller shall cause dividends to be
declared and paid on the ABFS 2003-2 Shares upon receipt of payments on the
2003-2 IO, and direct such cash flow to the Buyer to satisfy the Obligations.
If, at the time such cash flow is received by the Buyer, no Event of Default
exists, then the Buyer will promptly remit such amount to the Seller net of any
amounts necessary to cover a Margin Deficit, a shortfall in a Minimum Monthly
Paydown, and any other amount(s) due to the Buyer hereunder. The Seller further
undertakes to prohibit the incurrence of any indebtedness, whether direct or
contingent, by ABFS 2003-2, Inc., and to exercise its control rights with
respect to ABFS 2003-2, Inc. so as to prevent any further pledge with respect to
the 2003-2 IO, other than the existing indebtedness and encumbrances in favor of
EMC, and the Obligations. The Seller also hereby acknowledges and agrees that,
from the Closing Date, references in the ABFS 2003-2 Share Pledge are deemed to
be references to this Agreement.

14.     [RESERVED]

15.     CHANGE OF LAW.

        If the Buyer determines in its sole discretion that any Change in Law
regarding capital requirements has or would have the effect of reducing the rate
of return on the Buyer's capital or on the capital of any Affiliate of the Buyer
as a consequence of such Change in Law on this Agreement, then from time to time
the Seller will compensate the Buyer or the Buyer's Affiliate, as applicable,
for such reduced rate of return suffered as a consequence of such Change in Law.
The Buyer shall provide the Seller with prompt notice as to any Change in Law.
Notwithstanding any other provisions in this Agreement, in the event of any such
Change in Law the Seller will have the right to terminate the Transaction (and
in connection therewith pay the Quarterly Maintenance Fee (if any), the
Repurchase Price and any other Obligations) as of a date selected by the Seller,
which date shall be deemed to be the Termination Date.

                                     - 30 -
<PAGE>

16.     [RESERVED]

17.     REPURCHASE TRANSACTIONS.

         The Buyer may, in its sole election, engage in repurchase transactions
with the Purchased Assets or otherwise pledge, hypothecate, assign, transfer or
otherwise convey the Purchased Assets with a counterparty of the Buyer's choice,
in all cases subject to the Buyer's obligation to reconvey the Purchased Assets
(and not substitutes therefor) on or before, as applicable, the Termination
Date.

18.     EVENTS OF DEFAULT.

        With respect to the Transaction covered by or related to this Agreement,
the occurrence of any of the following events shall constitute an "Event of
Default":

        (a)     FAILURE TO MAKE REQUIRED PAYMENTS AND/OR REPURCHASE PURCHASED
ASSETS. The Seller fails to (i) pay the accrued Price Differential pursuant to
Sections 4 and 5 hereof or otherwise no less frequently than the 25th day of
each month and on the Termination Date, (ii) pay the Minimum Monthly Paydowns
pursuant to Sections 5 and 6 hereof (no later than the second Business Day after
the 25th day of each month); (iii) repurchase the Purchased Assets on the
Termination Date, (iv) pay any Fees when due or (v) perform its other
obligations under Sections 5, 6, 22 or 24 hereof;

        (b)     IMMEDIATE COVENANT DEFAULT. The Seller fails to perform, comply
with or observe any term, covenant or agreement applicable to the Seller
contained in any of Sections 13(a)(i) or 13(g), (i) or (l);

        (c)     FAILURE TO SATISFY ONGOING CONDITIONS; ADDITIONAL COVENANT
DEFAULTS. The Seller otherwise fails to comply with any of the requirements of
Sections 9(b)(iii), 9(b)(v) or 13(a) (except (a)(i)), and such default continues
unremedied for a period of five (5) Business Days; or the Seller fails to
perform, observe or comply with any other covenant or agreement contained in
this Agreement or any other Program Document and such failure is not cured
within ten (10) Business Days; or the Seller fails to comply with any of the
conditions subsequent in Section 9A;

        (d)     REPRESENTATION AND WARRANTY BREACH. Any representation or
warranty made by ABFS or the Seller (or any of their officers) in the Program
Documents or in any other document prepared by the Seller pursuant thereto shall
have been incorrect or untrue in any material respect when made or repeated or
deemed to have been made or repeated;

        (e)     APPOINTMENT OF CUSTODIAN OR SIMILAR OFFICIAL OR OCCURRENCE OF
OTHER INSOLVENCY EVENTS. A custodian, receiver, conservator, liquidator,
trustee, sequestrator or similar official for any ABFS Entity, including the
Seller, or of any ABFS Entity's Property, is appointed or takes possession of
such Property; or any ABFS Entity generally fails to pay such ABFS Entity's
debts as they become due, as applicable, or any ABFS Entity is adjudicated
bankrupt or insolvent; or an order for relief is entered under the Federal
Bankruptcy Code, or any successor or similar applicable statute, or any
administrative insolvency scheme, against any ABFS Entity; or any of ABFS's or
any ABFS Entity's Property is sequestered by court or administrative order; or a

                                     - 31 -
<PAGE>

petition is filed against any ABFS Entity under any bankruptcy, reorganization,
arrangement, insolvency, readjustment of debt, dissolution, moratorium,
delinquency or liquidation law of any jurisdiction, whether now or subsequently
in effect; provided that, if any event described in this subsection (f) is not
voluntarily caused or consented to by ABFS or an applicable Subsidiary a 30-day
cure period shall be applicable to stay or discharge such event;

        (f)     FILING OF BANKRUPTCY OR SIMILAR PROCEEDINGS; INVESTMENT COMPANY
ACT. Any (i) ABFS Entity files a voluntary petition in bankruptcy, seeks relief
under any provision of any bankruptcy, reorganization, moratorium, delinquency,
arrangement, insolvency, readjustment of debt, dissolution or liquidation law of
any jurisdiction whether now or subsequently in effect; or consents to the
filing of any petition against it under any such law; or consents to the
appointment of or taking possession by a custodian, receiver, conservator,
trustee, liquidator, sequestrator or similar official for any ABFS Entity, or of
all or any part of any ABFS Entity's Property; or makes an assignment for the
benefit of any ABFS Entity's creditors; or (ii) of the Seller, Trust 2004-1,
ABFS Warehouse Trust 2003-1, ABFS, ABC or Holdings shall be required to be
registered as an "investment company" as defined under the Investment Company
Act or as an entity under the control of an "investment company" as defined
under the Investment Company Act;

        (g)     JUDGMENTS. A final judgment or judgments for the payment of
money in excess of $50,000 in the aggregate (which is not insured) shall be
rendered against any ABFS Entity by one or more courts, administrative tribunals
or other bodies having jurisdiction and the same shall not be satisfied,
discharged (or provision shall not be made for such discharge) or bonded, or a
stay of execution thereof shall not be procured, within 30 days from the date of
entry thereof, and no ABFS Entity shall, within said period of 30 days, or such
longer period during which execution of the same shall have been stayed or
bonded, appeal therefrom and cause the execution thereof to be stayed during
such appeal;

        (h)     CONDEMNATION OR OTHER GOVERNMENTAL ACTION. Any Governmental
Authority or any person, agency or entity acting or purporting to act under
governmental authority shall have taken any action to condemn, seize or
appropriate, or to assume custody or control of, all or any substantial part of
the Property of any ABFS Entity, or shall have taken any action to displace the
management of any ABFS Entity or to curtail its authority in the conduct of the
business of such ABFS Entity, or takes any action in the nature of enforcement
to remove, limit or restrict the approval of any ABFS Entity, as an issuer,
buyer or a seller/servicer of the Purchased Assets, the 2003-2 IO or similar
securities, and such action provided for in this subsection (i) shall not have
been discontinued or stayed within 30 days;

        (i)     CROSS-DEFAULT. Any ABFS Entity shall be in breach of or default
under (i) any Indebtedness or Interest Rate Protection Agreement between any
ABFS Entity, on the one hand, and Buyer or any of the Buyer's Affiliates, on the
other hand, (ii) any Indebtedness of any ABFS Entity which default (1) involves
the failure to pay a matured obligation in an amount in excess of $50,000, or
(2) permits the acceleration of the maturity of obligations by any other party
to or beneficiary with respect to such Indebtedness, (iii) any agreement
allowing EMC Mortgage Corporation to make any claim or exercise any remedies
with respect to the 2003-2 IO or ABFS 2003-2, Inc., or (iv) any Program
Document;

                                     - 32 -
<PAGE>

        (j)     MATERIAL ADVERSE CHANGE. Any Material Adverse Change shall have
occurred with respect to ABFS, in each case as determined by the Buyer in its
sole good faith discretion; or any other condition shall exist which, in the
Buyer's sole good faith discretion, constitutes a material impairment of the
Seller's ability to perform its obligations under this Agreement;

        (k)     INABILITY TO PERFORM, OR REPUDIATION OF, OBLIGATIONS. ABFS or
the Seller shall admit its inability to, or intention not to, perform any of its
Obligations;

        (l)     LIENS. The Seller or any grantor of Collateral shall grant, or
suffer to exist, any Lien on any Collateral (except the Lien in favor of the
Buyer), or this Agreement shall for any reason cease to create a valid, first
priority security interest in any portion of the Purchased Assets or Collateral
purported to be covered hereby;

        (m)     ENFORCEABILITY. For any reason, this Agreement at any time shall
not be in full force and effect in all material respects or shall not be
enforceable in all material respects in accordance with its terms, or any Lien
granted pursuant thereto shall fail to be perfected and of first priority, or
any Person (other than the Buyer) shall contest the validity, enforceability,
perfection or priority of any Lien granted pursuant thereto, or any party
thereto (other than the Buyer) shall seek to disaffirm, terminate, limit or
reduce its obligations hereunder;

        (n)     GOING CONCERN. ABFS's audited annual financial statements or the
notes thereto or other opinions or conclusions stated therein shall be qualified
or limited by reference to the status of ABFS as a "going concern" or a
reference of similar import;

        (o)     CHANGE IN CONTROL. The aggregate ownership interests in the
Seller owned by Trust 2004-1, whether directly or indirectly, shall be less than
100% of the total equity interests of the Seller, or the aggregate ownership
interests in Trust 2004-1 shall be owned by persons or entities other than
Holdings, American Business Mortgage Services, Inc. and HomeAmerican Credit,
Inc., dba Upland Mortgage Inc.

        (p)     CHANGE IN BUSINESS. ABFS shall state its intention to materially
alter or discontinue its business, operations or any line of business as
currently conducted;

        (q)     CHANGE IN MANAGEMENT. At any time, any of the following persons
are no longer officers of ABFS holding the positions they occupied on the
Interim Closing Date: Anthony J. Santilli, Jeffrey Ruben and Albert Mandia,
unless replacements acceptable to the Buyer in its reasonable discretion have
been made with respect to each such officer;

        (r)     LOSS OF SERVICING RIGHTS. More than (A) two (2) servicing
agreements for which any ABFS Entity or Affiliate thereof acts as a servicer in
a securitization, or (B) one (1) servicing agreement for which any ABFS Entity
or Affiliate thereof acts as a servicer for a warehouse facility of ABFS or any
of its Subsidiaries, is or are terminated for cause or an event of default; and

        (s)     NASDAQ LISTING STATUS. The covenant contained in Section 13(p)
shall have been breached; provided, ABFS shall have a cure period for such
breach equal to such cure period or appeal process as is provided in NASDAQ's
listing standards and/or regulations to

                                     - 33 -
<PAGE>

re-establish ABFS's listing status, evidence of which shall be provided to the
Buyer by ABFS or the Seller.

19.     REMEDIES.

        Upon the occurrence, and during the continuance, of an Event of Default,
the Buyer, at its option (which option shall be deemed to have been exercised
immediately upon the occurrence of an Event of Default pursuant to Section 18(e)
or (f) hereof), shall have any or all of the following rights and remedies,
which may be exercised by the Buyer; provided that an Event of Default shall be
deemed to be continuing unless expressly waived by the Buyer in writing:

        (a)     The Termination Date for the Transaction shall be deemed
immediately to occur.

        (b)     The Seller's obligations hereunder to repurchase all Purchased
Assets at the Repurchase Price therefor on the Termination Date shall thereupon
become immediately due and payable; any remaining obligation of the Buyer to
release the Holdback Amount shall terminate, all Income paid after such exercise
or deemed exercise shall be retained by the Buyer and applied to the aggregate
Repurchase Price and any other Obligations hereunder; the Seller shall
immediately deliver to the Buyer or its designee all Income then held by the
Seller or an Affiliate thereof and deliver any and all original papers, records
and files relating to the Purchased Assets subject to the Transaction then in
the Seller's possession and/or control, as well as all proceeds of the 2003-2 IO
and the ABFS 2003-2 Shares; and all right, title and interest in and entitlement
to such Purchased Assets shall be deemed transferred to the Buyer.

        (c)     The Buyer may at its option either exercise or, at the Seller's
expense, engage a third party to exercise on behalf of the Buyer, any of the
rights described in clause (ii) of the definition of Purchased Assets, and the
Seller, ABC and their applicable Affiliates shall cooperate fully with the Buyer
and/or such third party therein, on a time-of-the-essence basis.

        The Buyer may (A) sell, on or following the Business Day following the
date on which the Repurchase Price became due and payable pursuant to Section
19(b) without notice or demand of any kind, at a public or private sale and at
such price or prices as the Buyer may reasonably deem satisfactory in its sole
discretion any or all Purchased Assets or (B) on or following such Business Day,
in its sole discretion elect, in lieu of selling all or a portion of such
Purchased Assets, to give the Seller credit for such Purchased Assets in an
amount equal to the Market Value of the Purchased Assets against the aggregate
unpaid Repurchase Price and any other amounts owing by the Seller hereunder. The
Seller shall remain liable to the Buyer for any amounts that remain owing to the
Buyer following a sale and/or credit under the preceding sentence. The proceeds
of any disposition of Purchased Assets shall be applied first to the reasonable
costs and expenses incurred by the Buyer in connection with or as a result of an
Event of Default; second to breakage costs of cover and/or related hedging
transactions; third to the aggregate Repurchase Price; fourth to all other
Obligations hereunder; and fifth to the Seller. The Seller acknowledges and
agrees that the Buyer has entered into the Transaction in reliance upon the
Seller's representation and warranty in Section 12(r).

        The parties recognize that it may not be possible to purchase or sell
all of the Purchased Assets on a particular Business Day, or in a transaction
with the same purchaser, or in the same

                                     - 34 -
<PAGE>

manner because the market for such Purchased Assets may not be liquid. In view
of the nature of the Purchased Assets, the parties agree that liquidation of the
Transaction or the underlying Purchased Assets does not require a public
purchase or sale and that a good faith private purchase or sale shall be deemed
to have been made in a commercially reasonable manner. Accordingly, the Buyer
may elect the time and manner of liquidating any Purchased Asset and nothing
contained herein shall obligate the Buyer to liquidate any Purchased Asset on
the occurrence of an Event of Default or to liquidate all Purchased Assets in
the same manner or on the same Business Day or constitute a waiver of any right
or remedy of the Buyer.

        (c)     The Seller hereby acknowledges, admits and agrees that the
Seller's obligations under this Agreement are recourse obligations of the Seller
to which the Seller pledges its full faith and credit. In addition to their
rights hereunder, the Buyer shall have the right to proceed against any of the
Seller's assets which may be in the possession of the Buyer, any of the Buyer's
Affiliates or its designee, including the right to liquidate such assets and to
set-off the proceeds against monies owed by the Seller to the Buyer pursuant to
this Agreement. The Buyer may set off cash, the proceeds of the liquidation of
the Purchased Assets, any other Collateral or its proceeds and all other sums or
obligations owed by the Buyer to the Seller hereunder against all of the
Seller's Obligations to the Buyer, whether under this Agreement or under any
other agreement between the parties, or otherwise, whether or not such
Obligations are then due, without prejudice to the Buyer's right to recover any
deficiency.

        The Buyer may direct all Persons servicing the Purchased Assets to take
such action with respect to the Purchased Assets as the Buyer determines
appropriate.

        The Seller shall be liable to the Buyer for the amount of all expenses
(plus interest thereon at a rate equal to the Default Rate), and reasonable
foreseeable consequential damages, including, without limitation, all costs and
expenses incurred within 30 days of the Event of Default in connection with
hedging or covering transactions related to the Purchased Assets.

        The Seller shall cause all sums received by it with respect to the
Purchased Assets to be deposited with the Buyer (or such other Person as the
Buyer may direct) after receipt thereof.

        The Buyer shall without regard to the adequacy of the security for the
Obligations, be entitled to the appointment of a receiver by any court having
jurisdiction, without notice, to take possession of and protect, collect,
manage, liquidate, and sell the Purchased Assets and any other Collateral or any
portion thereof, collect the payments due with respect to the Purchased Assets
and any other Collateral or any portion thereof, and do anything that the Buyer
is authorized hereunder to do. The Seller shall pay all costs and expenses
incurred by the Buyer in connection with the appointment and activities of such
receiver.

        The Buyer may enforce its rights and remedies hereunder without prior
judicial process or hearing, and the Seller hereby expressly waives, to the
extent permitted by law, any right the Seller might otherwise have to require
the Buyer to enforce its rights by judicial process. The Seller also waives, to
the extent permitted by law, any defense (other than a defense of payment or
performance) the Seller might otherwise have to the Obligations, arising from
use of nonjudicial process, enforcement and sale of all or any portion of the
Purchased Assets and any other Collateral or from any other election of

                                     - 35 -
<PAGE>

remedies. The Seller recognizes that nonjudicial remedies are consistent with
the usages of the trade, are responsive to commercial necessity and are the
result of a bargain at arm's length.

        The Buyer shall have all the rights and remedies provided herein,
provided by applicable federal, state, foreign, and local laws in equity. The
Seller acknowledges and agrees that (A) the Custodian is a third party
beneficiary of this Agreement and (B) under such circumstances and conditions as
may be agreed from time to time by Buyer and Custodian upon notice to Seller,
Custodian may exercise on behalf of Buyer any of the rights and remedies of
Buyer under this Agreement. Any such notice (i) shall be given by Buyer and (ii)
may be concurrent with such exercise; provided, however, that such notice shall
be deemed to have been given immediately prior to an Insolvency Event.

        Upon the occurrence, and during the continuance, of an Event of Default,
the Buyer shall have, except as otherwise expressly provided in this Agreement,
the right to exercise any of its rights and/or remedies without presentment,
demand, protest or further notice of any kind other than as expressly set forth
herein, all of which are hereby expressly waived by the Seller.

        The Seller hereby authorizes the Buyer, at the Seller's expense, to file
such financing statement or statements relating to the Purchased Assets and the
other Collateral without the Seller's signature thereon as the Buyer at its
option may deem appropriate, and appoints the Buyer as the Seller's
attorney-in-fact to execute any such financing statement or statements in the
Seller's name and to perform all other acts which the Buyer deems appropriate to
perfect and continue the lien and security interest granted hereby and to
protect, preserve and realize upon the Purchased Assets and the Collateral. This
power of attorney is coupled with an interest and is irrevocable without the
Buyer's consent.

20.     DELAY NOT WAIVER; REMEDIES ARE CUMULATIVE.

        No failure on the part of the Buyer to exercise, and no delay in
exercising, any right, power or remedy hereunder shall operate as a waiver
thereof, nor shall any single or partial exercise by the Buyer of any right,
power or remedy hereunder preclude any other or further exercise thereof or the
exercise of any other right, power or remedy. All rights and remedies of the
Buyer provided for herein are cumulative and in addition to any and all other
rights and remedies provided by law, the Program Documents and the other
instruments and agreements contemplated hereby and thereby, and are not
conditional or contingent on any attempt by the Buyer to exercise any of its
rights under any other related document. The Buyer may exercise at any time
after the occurrence, and during the continuance, of an Event of Default, one or
more remedies, as it so desires, and may thereafter at any time and from time to
time exercise any other remedy or remedies.

21.     USE OF EMPLOYEE PLAN ASSETS.

        The Buyer represents and warrants to the Seller and the Seller
represents and warrants to the Buyer that (a) it is not and will not be an
employee benefit plan as defined in Section 3 of Title I of ERISA, or a plan
described in Section 4975(e)(1) of the Code and (b) it is not using and will not
use "plan assets" within the meaning of 29 C.F.R. ss. 2510.3-101 to engage in
the Agreement or the Transaction hereunder.

                                     - 36 -
<PAGE>

22.     INDEMNITY.

        (a)     The Seller agrees to pay as and when billed by the Buyer (i) the
reasonable fees and expenses of counsel for the Buyer in connection with the
preparation, execution, delivery, modification and amendment of this Agreement,
with respect to the perfection, protection or preservation of rights or
interests under this Agreement, with respect to negotiations with the Seller or
with other creditors of the Seller or any of its Subsidiaries arising out of any
Default or any events or circumstances that may give rise to a Default, and with
respect to presenting claims in or otherwise participating in or monitoring any
bankruptcy, insolvency or other similar proceeding involving creditors' rights
generally and any proceeding ancillary thereto) and (ii) all costs and expenses
of the Buyer in connection with the enforcement of this Agreement, whether in
any action, suit or litigation, any bankruptcy, insolvency or other similar
proceeding affecting creditors' rights generally (including, without limitation,
the reasonable fees and expenses of counsel for the Buyer) whether or not the
transactions contemplated hereby are consummated.

        (b)     The Seller agrees to indemnify and hold harmless the Buyer and
each of its respective Affiliates and their officers, directors, employees,
agents and advisors (each, an "Indemnified Party") from and against any and all
claims, damages, losses, liabilities and expenses (including, without
limitation, reasonable fees and expenses of counsel) that may be incurred by or
awarded against any Indemnified Party, in each case arising out of or in
connection with or by reason of (including, without limitation, in connection
with any investigation, litigation or other proceeding (whether or not such
Indemnified Party is a party thereto) relating to, resulting from or arising out
of the Seller's non-performance under any of the Program Documents and all other
documents related thereto, any breach of a representation or warranty of the
Seller or the Seller's officer in this Agreement or any other Program Document,
and all actions taken pursuant thereto) the Transaction, the actual or proposed
use of the proceeds of the Transaction, this Agreement or any of the
transactions contemplated thereby, including, without limitation, any
acquisition or proposed acquisition, except to the extent such claim, damage,
loss, liability or expense is found in a final, non-appealable judgment by a
court of competent jurisdiction to have resulted from such Indemnified Party's
gross negligence or willful misconduct. The Seller also agrees not to assert any
claim against the Buyer or any of its Affiliates, or any of their respective
officers, directors, employees, attorneys and agents, on any theory of
liability, for special, indirect, consequential or punitive damages arising out
of or otherwise relating to the Facilities, or the actual or proposed use of the
proceeds of the Transaction. THE FOREGOING INDEMNITY AND AGREEMENT NOT TO ASSERT
CLAIMS EXPRESSLY APPLIES, WITHOUT LIMITATION, TO THE NEGLIGENCE (BUT NOT GROSS
NEGLIGENCE OR WILLFUL MISCONDUCT) OF THE INDEMNIFIED PARTIES.

        (c)     Without prejudice to the survival of any other agreement of the
Seller hereunder, the agreements and obligations of the Seller contained in this
Section 22 shall survive the payment in full of the Repurchase Price and all
other Obligations and delivery of the Purchased Assets by the Buyer against full
payment therefor.

                                     - 37 -
<PAGE>

23.     WAIVER OF REDEMPTION AND DEFICIENCY RIGHTS.

        The Seller hereby expressly waives, to the fullest extent permitted by
law, every statute of limitation on a deficiency judgment, any reduction in the
proceeds of any Purchased Assets as a result of restrictions upon the Buyer
contained in the Program Documents or any other instrument delivered in
connection therewith, and any right that it may have to direct the order in
which any of the Purchased Assets shall be disposed of in the event of any
disposition pursuant hereto.

24.     REIMBURSEMENT.

        All sums reasonably expended by the Buyer in connection with the
exercise of any right or remedy provided for herein shall be and remain the
Seller's obligation. The Seller agrees to pay, with interest at the Default Rate
to the extent that a Default has occurred, the reasonable out-of-pocket expenses
and reasonable attorneys' fees incurred by the Buyer in connection with the
enforcement of the Program Documents, the taking of any action, including legal
action, required or permitted to be taken by the Buyer pursuant thereto, or any
refinancing or restructuring in the nature of a "workout". If the Buyer
determines that, due to the introduction of, any change in, or the compliance by
the Buyer with (i) any eurocurrency reserve requirement or (ii) the
interpretation of any law, regulation or any guideline or request from any
central bank or other Governmental Authority (whether or not having the force of
law), there shall be an increase in the cost to the Buyer in engaging in the
Transaction, then the Seller agrees to pay to the Buyer, from time to time, upon
demand by the Buyer the actual cost of additional amounts as specified by the
Buyer to compensate the Buyer for such increased costs. In addition, the Buyer
shall promptly notify the Seller if any events in clause (i) or (ii) of this
Section 24 occur.

        In addition to any rights and remedies of the Buyer hereunder and by
law, the Buyer shall have the right, without prior notice to the Seller, any
such notice being expressly waived by the Seller to the extent permitted by
applicable law, upon any amount becoming due and payable by the Seller hereunder
(whether at the stated maturity, by acceleration or otherwise) to set off and
appropriate and apply against such amount any and all deposits (general or
special, time or demand, provisional or final), in any currency, and any other
credits, indebtedness or claims, in any currency, in each case whether direct or
indirect, absolute or contingent, matured or unmatured, at any time held or
owing by the Buyer or any Affiliate thereof to or for the credit or the account
of the Seller or any Affiliate thereof. The Buyer agrees promptly to notify the
Seller after any such set off and application made by the Buyer; provided that
the failure to give such notice shall not affect the validity of such set off
and application.

25.     FURTHER ASSURANCES.

         The Seller agrees to do such further acts and things and to execute and
deliver to the Buyer such additional assignments, acknowledgments, agreements,
powers and instruments as are reasonably required by the Buyer to carry into
effect the intent and purposes of this Agreement, to perfect the interests of
the Buyer in the Purchased Assets or to better assure and confirm unto the Buyer
its rights, powers and remedies hereunder.

                                     - 38 -
<PAGE>

26.     ENTIRE AGREEMENT; PRODUCT OF NEGOTIATION.

        This Agreement supersedes and integrates all previous negotiations,
contracts, agreements and understandings between the parties relating to a sale
and repurchase of the Purchased Assets thereto (other than those contained in
that certain letter agreement dated December 14, 2004 between ABFS and the Buyer
and those referred to in Sections 4(a) and 36), and it, together with the other
Program Documents and the other documents delivered pursuant hereto or thereto,
contains the entire final agreement of the parties with respect to the
Transaction. No prior negotiation, agreement, understanding or prior contract
shall have any validity hereafter.

27.     TERMINATION.

        This Agreement shall terminate upon the occurrence of the earliest of
(i) Wednesday, June 26, 2006, (ii) at the Buyer's option, upon the occurrence of
an Event of Default, (iii) the date determined by the Seller in accordance with
Section 15, and (iv) the date all Obligations due and to become due under this
Agreement have irrevocably been paid to Buyer (such date, the "Termination
Date"). No termination shall affect the Seller's outstanding Obligations to the
Buyer or the Buyer's rights and remedies in respect thereof at the time of such
termination. The Seller's obligations to indemnify the Buyer pursuant to this
Agreement shall survive the termination hereof.

28.     ASSIGNMENT; PARTICIPATIONS.

        (a)     Subject to that certain side letter between the Buyer and ABFS
dated as of the Interim Closing Date regarding assignments and participations,
the Buyer may from time to time assign all or a portion of its rights and
obligations under this Agreement and the Program Documents; provided, that the
Buyer shall maintain, for review by the Seller upon written request, a register
of assignees and a copy of an executed assignment and acceptance by the Buyer
and its assignee (an "Assignment and Acceptance"), specifying the percentage or
portion of such rights and obligations assigned. Upon such assignment, (a) such
assignee shall be a party hereto and to each Program Document to the extent of
the percentage or portion set forth in the Assignment and Acceptance, and shall
succeed to the applicable rights and obligations of the Buyer hereunder, and (b)
the Buyer shall, to the extent that such rights and obligations have been so
assigned by it to either (i) an Affiliate of the Buyer which assumes the
obligations of the Buyer or (ii) to another Person which assumes the obligations
of the Buyer, be released from its obligations hereunder and under the Program
Documents. Unless otherwise stated in the Assignment and Acceptance, the Seller
shall continue to take directions solely from the Buyer. The Buyer may
distribute to any prospective assignee any document or other information
delivered to the Buyer by the Seller.

        (b)     The Buyer may sell participations to one or more Persons in or
to all or a portion of their rights and obligations under this Agreement;
provided, however, that (i) the Buyer's obligations under this Agreement shall
remain unchanged, (ii) the Buyer shall remain solely responsible to the other
parties hereto for the performance of such obligations; and (iii) the Seller
shall continue to deal solely and directly with the Buyer in connection with the
Buyer's rights and obligations under this Agreement.

                                     - 39 -
<PAGE>

        (c)     The Buyer may, in connection with any participation or proposed
participation pursuant to this Section 28, disclose to the assignee or
participant or proposed participant, as the case may be, any information
relating to the Seller or any of its Affiliates or to any aspect of the
Transaction that has been furnished to the Buyer by or on behalf of the Seller
or any of its Affiliates; provided that such participant agrees to hold such
information subject to the confidentiality provisions of this Agreement.

29.     AMENDMENTS, ETC.

        No amendment or waiver of any provision of this Agreement nor any
consent to any failure to comply herewith or therewith shall in any event be
effective unless the same shall be in writing and signed by the Seller and the
Buyer, and then such amendment, waiver or consent shall be effective only in the
specific instance and for the specific purpose for which given.

30.     SEVERABILITY.

        If any provision of any Program Document is declared invalid by any
court of competent jurisdiction, such invalidity shall not affect any other
provision of the Program Documents, and each Program Document shall be enforced
to the fullest extent permitted by law.

31.     BINDING EFFECT; GOVERNING LAW.

        This Agreement shall be binding and inure to the benefit of the parties
hereto and their respective successors and assigns, except that the Seller may
not assign or transfer any of its rights or obligations under this Agreement or
any other Program Document without the prior written consent of the Buyer. THIS
AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH, AND GOVERNED BY, THE LAW OF THE
STATE OF NEW YORK, WITHOUT GIVING EFFECT TO THE CONFLICT OF LAWS PRINCIPLES
THEREOF (EXCEPT FOR SECTIONS 5-1401 AND 5-1402 OF THE NEW YORK GENERAL
OBLIGATIONS LAW).

32.     CONSENT TO JURISDICTION.

        THE SELLER HEREBY WAIVES TRIAL BY JURY. THE SELLER HEREBY IRREVOCABLY
CONSENTS TO THE NON-EXCLUSIVE JURISDICTION OF ANY COURT OF THE STATE OF NEW
YORK, OR IN THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW
YORK, ARISING OUT OF OR RELATING TO THE PROGRAM DOCUMENTS IN ANY ACTION OR
PROCEEDING. THE SELLER HEREBY SUBMITS TO, AND WAIVES ANY OBJECTION THE SELLER
MAY HAVE TO, NON-EXCLUSIVE PERSONAL JURISDICTION AND VENUE IN THE COURTS OF THE
STATE OF NEW YORK AND THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT
OF NEW YORK, WITH RESPECT TO ANY DISPUTES ARISING OUT OF OR RELATING TO THE
PROGRAM DOCUMENTS.

                                     - 40 -
<PAGE>

33.     NOTICES AND OTHER COMMUNICATIONS.

        Except as provided herein, any notice required or permitted by this
Agreement shall be in writing and shall be effective and deemed delivered only
when received by the party to which it is sent; provided, however, that a
facsimile transmission shall be deemed to be received when transmitted so long
as the transmitting machine has provided an electronic confirmation (without
error message) of such transmission. Any such notice shall be sent to a party at
the address or facsimile transmission number set forth below:

if to any ABFS Entity:

                      c/o American Business Financial Services, Inc.
                      The Wanamaker Building
                      100 Penn Square East, 8th Floor
                      Philadelphia, Pennsylvania  19109
                      Attention: Jeffrey M. Ruben
                      Tel: (215) 940-4502
                      Fax: (215) 940-3244


                      with a copy to:

                      Lawrence F. Flick, II, Esq.
                      Blank Rome LLP
                      One Logan Square
                      Philadelphia, PA 19103
                      Tel: 215.569.5556
                      Fax: 215.832.5556

if to the Buyer:

                      The Patriot Group, LLC
                      28 Thorndal Circle
                      Darien, CT 06820
                      Attn: Bruce Katz
                      Tel: 203-656-4395
                      Fax: 203-656-4263

                      with a copy to:

                      Jeffrey J. Murphy, Esq.
                      Thacher Proffitt & Wood LLP
                      Two World Financial Center
                      New York, N.Y. 10281
                      Tel: 212-912-7469
                      Fax: 212-912-7751

                                     - 41 -
<PAGE>

        The financial statements, monthly certifications and other reports and
information required to be delivered by the Seller to the Buyer pursuant to
Section 13 of this Agreement shall also be delivered by the Seller to the Buyer
at the address listed above, as such address or facsimile transmission number
may be changed by like notice.

34.     CONFIDENTIALITY.

        The Buyer and the Seller hereby acknowledge and agree that (a) all
written or computer-readable information provided by one party to any other
regarding the terms set forth in this Agreement or the Transaction contemplated
hereby and (b) all information and materials provided by one party to the other
in connection with this Agreement and the Transaction contemplated hereby which
are non-public, confidential or proprietary in nature, and all analyses,
compilations, studies or other documents prepared by such party containing such
material (the "Confidential Terms") shall be kept confidential and shall not be
divulged to any party without the prior written consent of either Buyer or
Seller (as applicable) except to the extent that (i) it is necessary to do so in
working with legal counsel, auditors, taxing authorities or other governmental
agencies or regulatory bodies or in order to comply with any applicable federal
or state laws, (ii) any of the Confidential Terms are in the public domain other
than due to a breach of this covenant, (iii) in the event of an Event of
Default, the Buyer determines such information to be necessary or desirable to
disclose in connection with the marketing and sales of the Purchased Assets or
otherwise to enforce or exercise the Buyer's rights hereunder or (iv) disclosure
is made to the holders of the debt or repurchase obligations of the Seller
(provided that any such disclosure shall not identify any Pricing Rate
information or any other financial terms under this Agreement). Notwithstanding
the foregoing, the Buyer may (i) disclose the Confidential Terms to (A) any of
its agents, assignees, participants, and to any counterparties in any
transactions permitted by Section 17 or (B) its advisors (including Pentalpha)
and (ii) generally make use of such Confidential Terms in connection with
administering this Agreement and exercising any of its rights under the Program
Documents. The provisions set forth in this Section 34 shall survive the
termination of this Agreement.

35.     ACKNOWLEDGMENTS WITH RESPECT TO THE TRANSACTION.

        Each ABFS Entity acknowledges by executing this Agreement and entering
into the Transaction that (i) the Buyer's assessments of Market Value will be
made in the Buyer's sole discretion and that the Buyer has taken the cash flow
characteristics of the Purchased Assets into account, which reflect, among other
things, past repurchases of delinquent and defaulted loans from the
securitization trusts to which such Purchased Assets relate, and failure of ABFS
or its Affiliates to continue such repurchases could negatively affect Market
Value determinations; (ii) because distributions on the Purchased Assets (other
than the December 2004 Income payments) will be applied to make required
Permanent Margin Payments to Buyer prior to any release of funds to Seller,
Seller will not receive cash flows on the Purchased Assets until the Obligations
are satisfied; (iii) the management and board of directors of ABFS and the other
ABFS Entities fully understand the implications of the Transaction as they
relate to the ongoing financial and liquidity needs of ABFS.

        It is expressly understood and agreed by the parties hereto that (a)
this Agreement is executed and delivered by Wilmington Trust Company, not
individually or personally, but solely

                                     - 42 -
<PAGE>

in its capacity as Owner Trustee, in the exercise of the powers and authority
conferred and vested in it, (b) each of the representations, undertakings and
agreements herein made on the part of the Owner Trustee or the Seller, as the
case may be, is made and intended not as a personal representation, undertaking
or agreement by Wilmington Trust Company, but is made and intended for the
purpose of binding only the Seller or the Owner Trustee, as the case may be, (c)
nothing herein contained shall be construed as creating any liability on
Wilmington Trust Company, individually or personally, to perform any covenant
either expressed or implied contained herein, all such liability, if any, being
expressly waived by the parties hereto and by any Person claiming by, through or
under the parties hereto and (d) under no circumstances shall Wilmington Trust
Company be personally liable for the payment of any indebtedness or expenses of
the Seller or the Owner Trustee, as the case may be, or be liable for the breach
or failure of any obligation, representation, warranty or covenant made or
undertaken by the Seller or the Owner Trustee, as the case may be, under this
Agreement or any other related documents.

36.     AMENDMENT AND RESTATEMENT.

        This Agreement is an amendment and restatement of the Master Repurchase
Agreement dated as of November 15, 2004 (the "Interim Master Repurchase
Agreement"). On and after the effective date of this Agreement, each reference
herein and in each other Program Document to the "Master Repurchase Agreement,"
"thereunder," "thereof," "therein" or any other expression of like import
referring to the Interim Master Repurchase Agreement shall mean and be a
reference to this Agreement. The execution, delivery and effectiveness of this
Agreement shall not operate as a waiver of any right, power or remedy hereunder
or constitute a waiver of any provision hereof. This amended and restated
Agreement does not constitute a novation or termination of the "Interim Master
Repurchase Agreement" or any other Program Document and all obligations under
the Interim Master Repurchase Agreement and any other Program Documents,
including without limitation the Pledge Agreements, are in all respects
continuing as hereby amended.




                         [Next page is signature page.]




                                     - 43 -
<PAGE>

        IN WITNESS WHEREOF, the Seller, the Buyer and the other ABFS Entities
parties hereto have caused their names to be signed to this Agreement by their
respective officers thereunto duly authorized as of the date first above written
to signify their acknowledgment of and agreement with the terms hereof.


                                      ABFS WAREHOUSE TRUST 2004-2, as Seller

                                      By: Wilmington Trust Company, not in its
                                      individual capacity but solely as trustee
                                      of ABFS WAREHOUSE TRUST 2004-2


                                      By: /s/ Jeffrey J. Rossi
                                         --------------------------------------

                                      Name: Jeffrey J. Rossi
                                           ------------------------------------

                                      Title: Senior Financial Services Officer
                                            -----------------------------------


                                      THE PATRIOT GROUP, LLC, as Buyer

                                      By: /s/ Jonathan T. Kane
                                         --------------------------------------

                                      Name: Jonathan T. Kane
                                           ------------------------------------

                                      Title: Senior Vice President
                                            -----------------------------------


                                      AMERICAN BUSINESS FINANCIAL SERVICES, INC.


                                      By: /s/ Jeffrey M. Ruben
                                         --------------------------------------

                                      Name: Jeffrey M. Ruben
                                           ------------------------------------

                                      Title: Executive Vice President
                                            -----------------------------------

<PAGE>

                                      ABFS CONSOLIDATED HOLDINGS, INC.


                                      By: /s/ Jeffrey M. Ruben
                                         --------------------------------------

                                      Name: Jeffrey M. Ruben
                                           ------------------------------------

                                      Title: Executive Vice President
                                            -----------------------------------


                                      AMERICAN BUSINESS CREDIT, INC.


                                      By:  /s/ Beverly Santilli
                                         --------------------------------------

                                      Name: Beverly Santilli
                                           ------------------------------------

                                      Title: President
                                            -----------------------------------