<PAGE>


                   BEAR STEARNS ASSET BACKED SECURITIES, INC.,
                                   Depositor,



                               ABFS 2003-1, INC.,
                               Unaffiliated Seller




                                       and




                         AMERICAN BUSINESS CREDIT, INC.
              HOMEAMERICAN CREDIT, INC., D/B/A UPLAND MORTGAGE, and
                   AMERICAN BUSINESS MORTGAGE SERVICES, INC.,
                                   Originators




                           ___________________________




                         UNAFFILIATED SELLER'S AGREEMENT


                            Dated as of March 1, 2003



<PAGE>

                                TABLE OF CONTENTS

                                                                            Page
                                    ARTICLE I

                                   DEFINITIONS

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

                                   ARTICLE II

                 PURCHASE, SALE AND CONVEYANCE OF MORTGAGE LOANS

Section 2.01.  Agreement to Purchase the Initial Mortgage Loans................2
Section 2.02.  Agreement to Purchase any Subsequent Mortgage Loans.............3
Section 2.03.  Purchase Price..................................................3
Section 2.04.  Conveyance of Mortgage Loans; Possession of Mortgage Files......4
Section 2.05.  Delivery of Mortgage Loan Documents.............................5
Section 2.06.  Acceptance of Mortgage Loans....................................6
Section 2.07.  Sale of Mortgage Loans; Assignment of Agreement.................7
Section 2.08.  Examination of Mortgage Files...................................8
Section 2.09.  Books and Records...............................................8
Section 2.10.  Cost of Delivery and Recordation of Documents...................8

                                   ARTICLE III

                         REPRESENTATIONS AND WARRANTIES

Section 3.01.  Representations and Warranties as to the Originators............8
Section 3.02.  Representations and Warranties as to the Unaffiliated Seller...10
Section 3.03.  Representations and Warranties Relating to the Mortgage Loans..12
Section 3.04.  Representations and Warranties of the Depositor................21
Section 3.05.  Repurchase Obligation for Defective Documentation and for
                 Breach of a Representation or Warranty.......................21
Section 3.06.  Limited Purpose and Corporate Separateness of the
                 Unaffiliated Seller..........................................24

                                   ARTICLE IV

                             THE UNAFFILIATED SELLER

Section 4.01.  Covenants of the Originators and the Unaffiliated Seller.......26
Section 4.02.  Merger or Consolidation........................................26
Section 4.03.  Costs..........................................................27
Section 4.04.  Indemnification................................................27



                                       i
<PAGE>

                                    ARTICLE V

                              CONDITIONS OF CLOSING

Section 5.01.  Conditions of Depositor's Obligations..........................29
Section 5.02.  Conditions of Unaffiliated Seller's Obligations................31
Section 5.03.  Termination of Depositor's Obligations.........................32

                                   ARTICLE VI

                                  MISCELLANEOUS

Section 6.01.  Notices........................................................32
Section 6.02.  Severability of Provisions.....................................32
Section 6.03.  Agreement of Unaffiliated Seller...............................33
Section 6.04.  Survival.......................................................33
Section 6.05.  Effect of Headings and Table of Contents.......................33
Section 6.06.  Successors and Assigns.........................................33
Section 6.07.  Confirmation of Intent; Grant of Security Interest.............33
Section 6.08.  Miscellaneous..................................................34
Section 6.09.  Amendments.....................................................34
Section 6.10.  Third-Party Beneficiaries......................................34
Section 6.11.  GOVERNING LAW; CONSENT TO JURISDICTION; WAIVER OF JURY TRIAL...35
Section 6.12.  Execution in Counterparts......................................35


Exhibit A - Mortgage Loan Schedule









                                       ii
<PAGE>

          THIS UNAFFILIATED SELLER'S AGREEMENT, dated as of March 1, 2003, by
and among BEAR STEARNS ASSET BACKED SECURITIES, INC., a Delaware corporation,
its successors and assigns (the "Depositor"), ABFS 2003-1, INC., a Delaware
corporation and its successors (the "Unaffiliated Seller"), AMERICAN BUSINESS
CREDIT, INC., a Pennsylvania corporation ("ABC"), HOMEAMERICAN CREDIT, INC.
D/B/A UPLAND MORTGAGE, a Pennsylvania corporation ("Upland"), and AMERICAN
BUSINESS MORTGAGE SERVICES, INC., a New Jersey corporation ("ABMS", and together
with ABC and Upland, the "Originators").

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

          WHEREAS, it is the intention of the Originators, the Unaffiliated
Seller and the Depositor that, simultaneously with the Originators' conveyance
of the Mortgage Loans to the Unaffiliated Seller and the Unaffiliated Seller's
conveyance of the Mortgage Loans to the Depositor on the Closing Date, (a) the
Depositor shall sell the Mortgage Loans to the ABFS Mortgage Loan Trust 2003-1
(the "Trust"), pursuant to a Pooling and Servicing Agreement to be dated as of
March 1, 2003 (the "Pooling and Servicing Agreement"), to be entered into by and
among the Depositor, as depositor, American Business Credit, Inc., as servicer
(in such capacity, the "Servicer") and JPMorgan Chase Bank, as trustee,
collateral agent and back-up servicer (in each such capacity, as applicable, the
"Trustee", the "Collateral Agent" and the "Back-up Servicer") and (b) the Trust
shall issue certificates (the "Certificates") evidencing beneficial ownership
interests in the property of the trust fund formed by the Pooling and Servicing
Agreement to the Depositor.

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

                                   ARTICLE I

                                   DEFINITIONS

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

          "Agreement" means this Unaffiliated Seller's Agreement, as amended or
supplemented in accordance with the provisions hereof.

          "Prospectus" means the Prospectus dated February 25, 2003 relating to
the offering by the Depositor from time to time of its
Mortgage-Backed/Asset-Backed Securities (Issuable in Series) in the form in
which it was or will be filed with the Commission pursuant to Rule 424(b) under
the Securities Act with respect to the offer and sale of the Certificates.

          "Prospectus Supplement" means the Prospectus Supplement dated March
26, 2003, relating to the offering of the Certificates in the form in which it
<PAGE>

was or will be filed with the Commission pursuant to Rule 424(b) under the
Securities Act with respect to the offer and sale of the Certificates.

          "Registration Statement" means that certain registration statement on
Form S-3, as amended (Registration No. 333-91344), relating to the offering by
the Depositor from time to time of its Mortgage-Backed/Asset-Backed Securities
(Issuable in Series) as heretofore declared effective by the Commission.

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

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

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

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

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

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

          "Unaffiliated Seller" means ABFS 2003-1, Inc., in its capacity as
Unaffiliated Seller of the Mortgage Loans under this Agreement.

          Capitalized terms used herein that are not otherwise defined shall
have the respective meanings ascribed thereto in the Pooling and Servicing
Agreement.


                                       2
<PAGE>


                                   ARTICLE II

                 PURCHASE, SALE AND CONVEYANCE OF MORTGAGE LOANS

          Section 2.01. Agreement to Purchase the Initial Mortgage Loans.

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

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

          (c) The closing for the purchase and sale of the Mortgage Loans shall
take place at the offices of Dewey Ballantine LLP, New York, New York, at 10:00
a.m., New York time, on March 31, 2003 or such other place and time as the
parties shall agree (such time being herein referred to as the "Closing Date").

          Section 2.02. Agreement to Purchase any Subsequent Mortgage Loans.
Subject to the satisfaction of the conditions set forth in Section 2.03 of the
Pooling and Servicing Agreement and provided that the Original Pre-Funded Amount
is greater than zero, (i) in consideration of the Unaffiliated Seller's delivery
on the related Subsequent Transfer Dates to or upon the order of the Originators
of all or a portion of the balance of funds on deposit in the Pre-Funding
Account, the Originators shall on any Subsequent Transfer Date sell, transfer,
assign, set over and convey to the Unaffiliated Seller, without recourse, but
subject to the terms and provisions of this Agreement, all of the right, title
and interest of the Originators in and to the Subsequent Mortgage Loans,
including all principal of, and all interest due on, such Subsequent Mortgage
Loans, and all other assets included or to be included in the Trust Fund, and
(ii) in consideration of the Depositor's delivery on the related Subsequent
Transfer Dates to or upon the order of the Unaffiliated Seller of all or a
portion of the balance of funds on deposit in the Pre-Funding Account, the
Unaffiliated Seller shall on any Subsequent Transfer Date sell, transfer,
assign, set over and convey to the Depositor, without recourse, but subject to
the terms and provisions of this Agreement, all of the right, title and interest
of the Unaffiliated Seller in and to the Subsequent Mortgage Loans, including
all principal of, and all interest due on, such Subsequent Mortgage Loans, and
all other assets included or to be included in the Trust Fund.

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


                                       3
<PAGE>

          The obligation of the Depositor to purchase a Subsequent Mortgage Loan
on any Subsequent Transfer Date is subject to the satisfaction of the
requirements set forth in Section 2.03 of the Pooling and Servicing Agreement.

          Section 2.03. Purchase Price.

          (a) On the Closing Date, as consideration for the Originators' sale of
the Initial Mortgage Loans to the Unaffiliated Seller, the Unaffiliated Seller
will deliver to the Originators an amount in cash equal to the sum of (i) with
respect to each Class of Offered Certificates, the product of (x) the Original
Certificate Principal Balance of such Class of Offered Certificates and (y) the
purchase percentage for such Class set forth in the table below, plus (ii) with
respect to the Class A and Class A-IO Certificates only, accrued interest on
each such Original Certificate Principal Balance at the Pass-Through Rate for
such Class set forth in the table below from (and including) March 1, 2003 to
(but not including) the Closing Date, minus (iv) the Original Pre-Funded Amount,
if any.

          On the Closing Date, as consideration for the Unaffiliated Seller's
sale of the Initial Mortgage Loans to the Depositor, the Depositor will deliver
to the Unaffiliated Seller (i) an amount in cash equal to the sum of (A) with
respect to each Class of Offered Certificates, the product of (x) the Original
Certificate Principal Balance of such Class of Offered Certificates and (y) the
purchase percentage for such Class set forth in the table below, plus (B) with
respect to the Class A and Class A-IO Certificates only, accrued interest on
each such Original Certificate Principal Balance at the Pass-Through Rate for
such Class set forth in the table below, from (and including) March 1, 2003 to
(but not including) the Closing Date, minus (D) the Original Pre-Funded Amount,
if any, and (ii) the Class X, Class I and Class R Certificates to be issued
pursuant to the Pooling and Servicing Agreement, if any.

 Class                   Purchase Percentage                 Pass-Through Rate
 -----                   -------------------                 -----------------
   A                          99.927390%                           3.78%
 A-IO                         7.091795%                            4.00%
   M                         100.000000%                     LIBOR plus 1.50%

          (b) On any Subsequent Transfer Date, as full consideration for the
Originators' sale of the Subsequent Mortgage Loans to the Unaffiliated Seller
and the Unaffiliated Seller's sale of the Subsequent Mortgage Loans to the
Depositor, the Depositor will deliver to the Unaffiliated Seller and the
Unaffiliated Seller will deliver to the Originators an amount in cash equal to
the sum of 100.00000% of the Aggregate Principal Balance of the Subsequent
Mortgage Loans as of the related Subsequent Cut-Off Date.

          (c) The consideration described in this Section 2.03 collectively
represents (i) full consideration for the Originators' sale of the Initial
Mortgage Loans to the Unaffiliated Seller and (ii) full consideration for the
Unaffiliated Seller's sale of the Initial Mortgage Loans to the Depositor. The
consideration received by the Originators will be allocated among them in
proportion to the outstanding principal balance of the Initial Mortgage Loans
sold by each.



                                       4
<PAGE>

          Section 2.04. Conveyance of Mortgage Loans; Possession of Mortgage
Files.

          (a) On the Closing Date and on any Subsequent Transfer Date, the
Originators shall sell, transfer, assign, set over and convey, or cause to be
assigned, set over or conveyed, to the Unaffiliated Seller, without recourse but
subject to the terms of this Agreement, all right, title and interest in and to
the applicable Mortgage Loans, including all principal outstanding as of, and
all interest due and accruing after, the related Cut-Off Date, the Insurance
Policies relating to each such Mortgage Loan and all right, title and interest
in and to the proceeds of such Insurance Policies from and after the Initial
Cut-Off Date or the Subsequent Cut-Off Date, as applicable, and the Unaffiliated
Seller shall sell, transfer, assign, set over and convey or cause to be
assigned, set over or conveyed, to the Depositor, without recourse but subject
to the terms of this Agreement, all right, title and interest in and to the
applicable Mortgage Loans, including all principal outstanding as of, and all
interest due after, the related Cut-Off Date, the Insurance Policies relating to
each such Mortgage Loan, all right, title and interest in and to the proceeds of
such Insurance Policies and all of its rights under this Agreement with respect
to the Mortgage Loans from and after the Initial Cut-Off Date or the Subsequent
Cut-Off Date, as applicable. Upon payment of the purchase price for such
Mortgage Loans as provided in Section 2.03 of this Agreement, the Originators
and the Unaffiliated Seller shall have hereby, and shall be deemed to have, or
caused to have sold, transferred, assigned, set over and conveyed such Mortgage
Loans, the Insurance Policies relating to each such Mortgage Loan, all right,
title and interest in and to the proceeds of such Insurance Policies and all of
their rights under this Agreement with respect to the Mortgage Loans from and
after the Initial Cut-Off Date or the Subsequent Cut-Off Date, as applicable.

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

          (c) Pursuant to the Pooling and Servicing Agreement, the Depositor
shall, on the Closing Date, assign all of its right, title and interest in and
to the Initial Mortgage Loans, the related Insurance Policies and any proceeds
thereof and all of its rights under this Agreement to the Trustee for the
benefit of the Certificateholders and the Certificate Insurer.

          Section 2.05. Delivery of Mortgage Loan Documents.

          (a) On or prior to the Closing Date or any Subsequent Transfer Date,
as applicable, the related Originator shall deliver or cause to be delivered to
the Unaffiliated Seller, and the Unaffiliated Seller shall deliver to the
Collateral Agent, on behalf of the Trustee (as assignee of the Depositor




                                       5
<PAGE>

pursuant to the Pooling and Servicing Agreement), each of the documents
described in clauses (i) through (vi) of Section 2.05(a) of the Pooling and
Servicing Agreement for each applicable Mortgage Loan in accordance with the
provisions of Section 2.05 of the Pooling and Servicing Agreement.

          (b) Pursuant to the Pooling and Servicing Agreement, the Unaffiliated
Seller shall within sixty (60) days of the Closing Date be required to promptly
submit, or cause to be submitted by the related Originator, for recording in the
appropriate public office for real property records, each assignment referred to
in Section 2.05(a) of the Pooling and Servicing Agreement. The Collateral Agent,
on behalf of the Trustee, shall be required to retain a copy of each assignment
submitted for recording. In the event that any such assignment is lost or
returned unrecorded because of a defect therein, the Unaffiliated Seller or such
Originator shall promptly prepare a substitute assignment or cure such defect,
as the case may be, and thereafter the Unaffiliated Seller or such Originator
shall be required to submit each such assignment for recording.

          (c) The Unaffiliated Seller or the related Originator shall, within
five (5) Business Days after the receipt thereof, deliver or cause to be
delivered to the Collateral Agent, on behalf of the Trustee (pursuant to the
Pooling and Servicing Agreement): (i) the original recorded Mortgage and related
power of attorney, if any, in those instances where a copy thereof certified by
the related Originator was delivered to the Collateral Agent, on behalf of the
Trustee (pursuant to the Pooling and Servicing Agreement); (ii) the original
recorded assignment of Mortgage from the related Originator to the Trustee
(pursuant to the Pooling and Servicing Agreement), which, together with any
intervening assignments of Mortgage, evidences a complete chain of assignment
from the originator of the Mortgage Loan to the Trustee in those instances where
copies of such assignments certified by the related Originator were delivered to
the Collateral Agent, on behalf of the Trustee (pursuant to Section 2.05 of the
Pooling and Servicing Agreement); and (iii) the title insurance policy or title
opinion required in Section 2.05(a)(vi) of the Pooling and Servicing Agreement.

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

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

          (d) All original documents relating to the Mortgage Loans that are not
delivered to the Collateral Agent, on behalf of the Trustee (pursuant to the
Pooling and Servicing Agreement), as permitted by Section 2.05(a) hereof are and
shall be held by the Servicer, the Unaffiliated Seller or the related Originator




                                       6
<PAGE>

in trust for the benefit of the Trustee on behalf of the Certificateholders and
the Certificate Insurer. In the event that any such original document is
required pursuant to the terms of this Section 2.05 to be a part of a Trustee
Mortgage File, such document shall be delivered promptly to the Collateral
Agent, on behalf of the Trustee (as assignee of the Depositor pursuant to the
Pooling and Servicing Agreement). From and after the sale of the Mortgage Loans
to the Depositor pursuant hereto, to the extent that the Unaffiliated Seller or
the related Originator retains legal title of record to any Mortgage Loans prior
to the vesting of legal title in the Trustee (as assignee of the Depositor
pursuant to the Pooling and Servicing Agreement), such title shall be retained
in trust for the Trustee on behalf of the Trust as the owner of the Mortgage
Loans and as the Depositor's assignee.

          Section 2.06. Acceptance of Mortgage Loans.

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

          (b) Pursuant to the Pooling and Servicing Agreement, the Collateral
Agent, on behalf of the Trustee, has agreed to execute and deliver on or prior
to the Closing Date an acknowledgment of receipt, in the form attached as
Exhibit R to the Pooling and Servicing Agreement, of the original Mortgage Note
with respect to each Mortgage Loan (with any exceptions noted), and declares
that it will hold, or cause the Collateral Agent to hold, on its behalf, such
documents and any amendments, replacements or supplements thereto, as well as
any other assets included in the definition of Trust Fund in the Pooling and
Servicing Agreement and delivered to the Trustee or the Collateral Agent, on its
behalf, in trust upon and subject to the conditions set forth in the Pooling and
Servicing Agreement for the benefit of the Certificateholders and the
Certificate Insurer. Pursuant to the Pooling and Servicing Agreement, the
Collateral Agent, on behalf of the Trustee, has agreed, for the benefit of the
Certificateholders and the Certificate Insurer, to review (or cause to be
reviewed) each Trustee's Mortgage File within thirty (30) days after the Closing
Date (with respect to the Initial Mortgage Loans) or within thirty (30) days of
any Subsequent Transfer Date (with respect to the Subsequent Mortgage Loans), as
applicable (or, with respect to any Qualified Substitute Mortgage Loan, within
thirty (30) days after the receipt by the Collateral Agent, on behalf of the
Trustee thereof), and to deliver to the Unaffiliated Seller, the Certificate
Insurer, the Back-up Servicer and the Servicer a certification in the form
attached to, the Pooling and Servicing Agreement as Exhibit I to the effect
that, as to each Mortgage Loan listed in the Mortgage Loan Schedule (other than
any Mortgage Loan paid in full or any Mortgage Loan specifically identified in
such certification as not covered by such certification), (i) all documents
required to be delivered to it pursuant to the Pooling and Servicing Agreement
are in its possession, (ii) each such document has been reviewed by it and has
not been mutilated, damaged, torn or otherwise physically altered (handwritten
additions, changes or corrections shall not constitute physical alteration if
initiated by the Mortgagor), appears regular on its face and relates to such
Mortgage Loan, and (iii) based on its examination and only as to the foregoing
documents, the information set forth on the Mortgage Loan Schedule accurately
reflects the information set forth in the Trustee's Mortgage File delivered on
such date. Pursuant to the Pooling and Servicing Agreement, the Collateral
Agent, on behalf of the Trustee, shall be under no duty or obligation to
inspect, review or examine any such documents, instruments, certificates or




                                       7
<PAGE>

other papers to determine that they are genuine, enforceable, or appropriate for
the represented purpose or that they are other than what they purport to be on
their face. Pursuant to the Pooling and Servicing Agreement, within ninety (90)
days of the Closing Date (with respect to the Initial Mortgage Loans) or within
ninety (90) days of any Subsequent Transfer Date (with respect to the Subsequent
Mortgage Loans), as applicable, the Collateral Agent, on behalf of the Trustee,
shall be required to deliver (or cause to be delivered) to the Certificate
Insurer, the Servicer, the Back-up Servicer and the Unaffiliated Seller a final
certification in the form attached to the Pooling and Servicing Agreement as
Exhibit J to the effect that, as to each Mortgage Loan listed in the Mortgage
Loan Schedule (other than any Mortgage Loan paid in full or any Mortgage Loan
specifically identified in such certification as not covered by such
certification), (i) all documents required to be delivered to it pursuant to the
Pooling and Servicing Agreement are in its possession, (ii) each such document
has been reviewed by it and has not been mutilated, damaged, torn or otherwise
physically altered (handwritten additions, changes or corrections shall not
constitute physical alteration if initialed by the Mortgagor), appears regular
on its face and relates to such Mortgage Loan, and (iii) based on its
examination and only as to the foregoing documents, the information set forth on
the Mortgage Loan Schedule accurately reflects the information set forth in the
Trustee's Mortgage File delivered on such date.

          (c) The Pooling and Servicing Agreement provides that, if the
Collateral Agent during the process of reviewing the Trustee's Mortgage Files
finds any document required to be delivered to it and constituting a part of a
Trustee's Mortgage File which is not executed, has not been received, is
unrelated to the Mortgage Loan identified in the Mortgage Loan Schedule, or does
not conform to the requirements of Section 2.05 or the description thereof as
set forth in the Mortgage Loan Schedule, the Collateral Agent shall promptly so
notify the Certificate Insurer, the Servicer, the Back-up Servicer, the Trustee,
the Unaffiliated Seller and the related Originator. The Unaffiliated Seller
agrees that in performing any such review, the Collateral Agent may conclusively
rely on the Unaffiliated Seller as to the purported genuineness of any such
document and any signature thereon. Each of the Originators and the Unaffiliated
Seller agrees to use reasonable efforts to remedy a material defect in a
document constituting part of the Trustee's Mortgage File when notified of such
defect in reasonable detail. If, however, within sixty (60) days after such
notice neither the Unaffiliated Seller nor any Originator has remedied the
defect and the defect materially and adversely affects the interest of the
Certificateholders in the related Mortgage Loan or the interests of the
Certificate Insurer, then the Unaffiliated Seller and the Originators shall be
obligated to either substitute in lieu of such Mortgage Loan a Qualified
Substitute Mortgage Loan or purchase such Mortgage Loan in the manner and
subject to the conditions set forth in Section 3.05 hereof.

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

          Section 2.07. Sale of Mortgage Loans; Assignment of Agreement. The
Originators and the Unaffiliated Seller each hereby acknowledges and agrees that
the Depositor may sell, assign and convey its interest under this Agreement to
the Trustee for the benefit of the Trust as may be required to effect the
purposes of the Pooling and Servicing Agreement, without further notice to, or




                                       8
<PAGE>

consent of, the Unaffiliated Seller or the Originators, and the Trustee shall
succeed to such of the rights and obligations of the Depositor hereunder as
shall be so assigned. The Depositor shall, pursuant to the Pooling and Servicing
Agreement, assign all of its right, title and interest in and to the Mortgage
Loans and its right to exercise the remedies created by this Agreement,
including, without limitation, its rights to exercise remedies created by
Sections 2.06 and 3.05 hereof for breaches of the representations, warranties,
agreements and covenants of the Unaffiliated Seller or the Originators contained
in Sections 2.05, 2.06, 3.01, 3.02 and 3.03 hereof to the Trustee for the
benefit of the Certificateholders and the Certificate Insurer. Each of the
Originators and the Unaffiliated Seller agrees that, upon such assignment to the
Trustee, such representations, warranties, agreements and covenants will run to
and be for the benefit of the Trustee and the Certificate Insurer and the
Trustee may enforce, without joinder of the Depositor, the repurchase and
indemnification obligations of the Unaffiliated Seller and the Originators set
forth herein with respect to breaches of such representations, warranties,
agreements and covenants.

          Section 2.08. Examination of Mortgage Files. Prior to the Closing Date
and any Subsequent Transfer Date, as applicable, the Unaffiliated Seller shall
make the Mortgage Files available to the Depositor or its designee for
examination at the Unaffiliated Seller's offices or at such other place as the
Unaffiliated Seller shall reasonably specify. Such examination may be made by
the Depositor or its designee at any time on or before the Closing Date or any
Subsequent Transfer Date, as the case may be. If the Depositor or its designee
makes such examination prior to the Closing Date or any Subsequent Transfer
Date, as the case may be, and identifies any Mortgage Loans that do not conform
to the requirements of the Depositor as described in this Agreement, such
Mortgage Loans shall be deleted from the Mortgage Loan Schedule and may be
replaced, prior to the Closing Date or any Subsequent Transfer Date, as the case
may be, by substitute Mortgage Loans acceptable to the Depositor. The Depositor
may, at its option and without notice to the Unaffiliated Seller, purchase all
or part of the Mortgage Loans without conducting any partial or complete
examination. The fact that the Depositor, the Collateral Agent or the Trustee
has conducted or has failed to conduct any partial or complete examination of
the Mortgage Files shall not affect the rights of the Depositor or the Trustee
to demand repurchase or other relief as provided in this Agreement.

          Section 2.09. Books and Records. The sale of each Mortgage Loan shall
be reflected on each of the Originators' and the Unaffiliated Seller's
accounting and other records, balance sheet and other financial statements as a
sale of assets by the Originators to the Unaffiliated Seller and by the
Unaffiliated Seller to the Depositor. Each of the Originators and the
Unaffiliated Seller shall be responsible for maintaining, and shall maintain, a
complete set of books and records for each Mortgage Loan which shall be clearly
marked to reflect the ownership of each Mortgage Loan by the Trustee for the
benefit of the Certificateholders and the Certificate Insurer.

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


                                       9
<PAGE>

                                  ARTICLE III

                         REPRESENTATIONS AND WARRANTIES

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

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

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

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

          (d) Neither this Agreement nor the information contained in the
Prospectus Supplement (other than the information under the caption
"Underwriting") nor any statement, report or other document prepared by the
Originator and furnished or to be furnished pursuant to this Agreement or in
connection with the transactions contemplated hereby contains any untrue




                                       10
<PAGE>

statement or alleged untrue statement of any material fact or omits to state a
material fact necessary to make the statements contained herein or therein, in
light of the circumstances under which they were made, not misleading;

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

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

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

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

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

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



                                       11
<PAGE>

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

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

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

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

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

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

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

          (c) Neither the execution and delivery of this Agreement, the
acquisition nor origination of the Mortgage Loans by the Unaffiliated Seller nor
the transactions contemplated hereby, nor the fulfillment of or compliance with
the terms and conditions of this Agreement, has or will conflict with or result
in a breach of any of the terms, conditions or provisions of the Unaffiliated
Seller's charter or by-laws or any legal restriction or any agreement or
instrument to which the Unaffiliated Seller is now a party or by which it is
bound or to which its property is subject, or constitute a default or result in




                                       12
<PAGE>

an acceleration under any of the foregoing, or result in the violation of any
law, rule, regulation, order, judgment or decree to which the Unaffiliated
Seller or its property is subject, or impair the ability of the Trustee (or the
Servicer as the agent of the Trustee) to realize on the Mortgage Loans, or
impair the value of the Mortgage Loans;

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

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

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

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

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


                                       13
<PAGE>

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

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

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

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

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

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

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

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

          (b) The information provided by the Originators or any Affiliate to
the Depositor, the Trust, the Certificate Insurer, the Collateral Agent and the
Trustee in connection with a Mortgage Loan will be true and correct in all
material respects on the date or dates when such information is furnished;

          (c) Each Mortgage is a valid first or second lien on a fee simple (or
its equivalent under applicable state law) estate in the real property securing
the amount owed by the Mortgagor under the Mortgage Note subject only to (i) the
lien of current real property taxes and assessments which are not delinquent,
(ii) with respect to any Mortgage Loan identified on the Mortgage Loan Schedule
as secured by a second lien, the related first mortgage loan, (iii) covenants,
conditions and restrictions, rights of way, easements and other matters of



                                       14
<PAGE>

public record as of the date of recording of such Mortgage, such exceptions
appearing of record being acceptable to mortgage lending institutions generally
in the area wherein the property subject to the Mortgage is located or
specifically reflected in the appraisal obtained in connection with the
origination of the related Mortgage Loan obtained by the Unaffiliated Seller,
and (iv) other matters to which like properties are commonly subject which do
not materially interfere with the benefits of the security intended to be
provided by such Mortgage;

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

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

          (f) As of the Initial Cut-Off Date, no Mortgage Loan has a Mortgage
Interest Rate less than 6.25% per annum and the weighted average Mortgage
Interest Rate of the Mortgage Loans is 10.23%;

          (g) At origination, no Mortgage Loan had an original term to maturity
of greater than 360 months;

          (h) As of the Initial Cut-Off Date, the weighted average remaining
term to maturity of the Mortgage Loans is 270 months;

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

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

          (k) Such Mortgage Loan, the Mortgage, and the Mortgage Note,
including, without limitation, the obligation of the Mortgagor to pay the unpaid
principal of and interest on the Mortgage Note, are each not subject to any
right of rescission (or any such rescission right has expired in accordance with
applicable law), set-off, counterclaim, or defense, including the defense of
usury, nor will the operation of any of the terms of the Mortgage Note or the
Mortgage, or the exercise of any right thereunder, render either the Mortgage
Note or the Mortgage unenforceable, in whole or in part, or subject to any right



                                       15
<PAGE>

of rescission, set-off, counterclaim, or defense, including the defense of
usury, and no such right of rescission, set-off, counterclaim, or defense has
been asserted with respect thereto;

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

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

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

          (o) No Mortgage Loan had, at the date of origination, a Combined
Loan-to-Value Ratio in excess of 100.00%, and the weighted average Combined
Loan-to-Value Ratio of all Mortgage Loans as of the Initial Cut-Off Date is
approximately 76.80%;

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

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

                             Mortgage Loan Pool
          -----------------------------------------------------
                                                Percent of
                   State                     Principal Balance
          --------------------------------   ------------------
          Connecticut                              2.87%
          Florida                                  8.23%
          Illinois                                 5.00%
          Maryland                                 2.82%
          Massachusetts                            8.88%
          Michigan                                 5.59%
          New Jersey                              12.65%
          New York                                22.54%
          North Carolina                           2.90%
          Ohio                                     4.23%
          Pennsylvania                             7.23%
          Rhode Island                             2.03%
          Virginia                                 3.26%
          Other                                   12.17%
                                                 ======
          Total                                  100.00%




                                       16
<PAGE>

          (r) The Mortgage Loans were (i) originated by an Originator in the
normal course of its business, (ii) not selected by the Unaffiliated Seller or
the Originators for sale hereunder or inclusion in the Trust Fund on any basis
adverse to the Trust Fund relative to the portfolio of similar mortgage loans of
the Unaffiliated Seller or the Originators and (iii) prior to the Closing Date,
serviced by the Originator or an Affiliate thereof in accordance with Accepted
Servicing Practices;

          (s) No more than 5% (by Principal Balance) of the Mortgage Loans
constitutes a lien on leasehold interests, and with respect to such Mortgage
Loan the cost of the leasehold expense has been factored into the debt-to-income
calculations with respect to the related Mortgagor and the maturity date of the
ground lease is later than the maturity date of the Mortgage Loan;

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

          (u) The proceeds of such Mortgage Loan have been fully disbursed,
including reserves set aside by the Unaffiliated Seller or the Originators,
there is no requirement for, and neither the Unaffiliated Seller nor the
Originators shall make any, future advances thereunder. Any future advances made
prior to the applicable Cut-Off Date have been consolidated with the principal
balance secured by the Mortgage, and such principal balance, as consolidated,
bears a single interest rate and single repayment term reflected on the
applicable Mortgage Loan Schedule. The Principal Balance as of the applicable
Cut-Off Date does not exceed the original principal amount of such Mortgage
Loan. Except with respect to no more than $200,000 of escrow funds in the
aggregate with respect to all Mortgage Loans, any and all requirements as to
completion of any on-site or off-site improvements and as to disbursements of
any escrow funds therefor have been complied with. All costs, fees and expenses
incurred in making or recording such Mortgage Loan have been paid;

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

          (w) The terms of the Mortgage and the Mortgage Note have not been
impaired, waived, altered, or modified in any respect, except by a written
instrument which has been recorded, if necessary, to protect the interest of the
Trustee and which has been delivered to the Collateral Agent, on behalf of the
Trustee. The substance of any such alteration or modification will be reflected
on the applicable Mortgage Loan Schedule and, to the extent necessary, has been
or will be approved by (i) the insurer under the applicable mortgage title




                                       17
<PAGE>

insurance policy, and (ii) the insurer under any other insurance policy required
hereunder for such Mortgage Loan where such insurance policy requires approval
and the failure to procure approval would impair coverage under such policy;

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

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

          (z) All of the improvements which were included for the purposes of
determining the Appraised Value of the Mortgaged Property were completed at the
time that such Mortgage Loan was originated and lie wholly within the boundaries
and building restriction lines of such Mortgaged Property. Except for de minimis
encroachments, no improvements on adjoining properties encroach upon the
Mortgaged Property. To the best of the Unaffiliated Seller's and the
Originators' knowledge, no improvement located on or being part of the Mortgaged
Property is in violation of any applicable zoning law or regulation. All
inspections, licenses and certificates required to be made or issued with
respect to all occupied portions of the Mortgaged Property (including all such
improvements which were included for the purpose of determining such Appraised
Value) and, with respect to the use and occupancy of the same, including, but
not limited, to certificates of occupancy and fire underwriter's certificates,
have been made or obtained from the appropriate authorities and the Mortgaged
Property is lawfully occupied under applicable law;

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


                                       18
<PAGE>

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

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

          (dd) The sale, transfer and conveyance of the Mortgage Note and the
Mortgage as and in the manner contemplated by Section 2.05 of this Agreement is
sufficient (i) fully to transfer to the Depositor all right, title and interest
of the Unaffiliated Seller and the Originators thereto as note holder and
mortgagee, and (ii) to the extent an Originator or the Unaffiliated Seller
retains an interest in such Mortgage Note or Mortgage despite such sale,
transfer and conveyance, to grant to the Depositor the security interest
referred to in Section 6.07 hereof and thereafter (x) to transfer the right,
title and interest of the Depositor to the Trust, and (y) to pledge the interest
of the Trust to the Trustee for the benefit of the Certificateholders and the
Certificate Insurer. The Mortgage has been duly assigned by the Originators to
the Unaffiliated Seller and by the Unaffiliated Seller to the Depositor and by
the Depositor to the Trust and the Mortgage Note has been duly endorsed. The
Assignment of Mortgage delivered to the Collateral Agent, on behalf of the
Trustee, pursuant to Section 2.05(a)(iv) of the Pooling and Servicing Agreement,
is in recordable form and is acceptable for recording under the laws of the
applicable jurisdiction. The endorsement of the Mortgage Note, the delivery to
the Collateral Agent, on behalf of the Trustee, of the endorsed Mortgage Note,
and such Assignment of Mortgage, and the delivery of such Assignment of Mortgage
to the Collateral Agent, on behalf of the Trustee, for recording are sufficient
to permit the Trustee to avail itself of all protection available under
applicable law against the claims of any present or future creditors of the
Depositor, the Unaffiliated Seller or any of the Originators, and are sufficient
to prevent any other sale, transfer, assignment, pledge or hypothecation of the
Mortgage Note and Mortgage by the Depositor, the Unaffiliated Seller or any of
the Originators from being enforceable, even if the Servicer does not record
such Assignment of Mortgage in the applicable recording office. After the
transfer pursuant to Section 2.05 hereof, the Trustee shall have a first
priority perfected security interest in the Mortgage Loans;

          (ee) Any and all requirements of any federal, state, or local law
including, without limitation, usury, truth-in-lending, real estate settlement
procedures, consumer credit protection, equal credit opportunity, or disclosure




                                       19
<PAGE>

laws applicable to such Mortgage Loan have been complied with, and the Servicer
shall maintain in its possession, available for the Trustee's inspection, and
shall deliver to the Trustee or its designee upon demand, evidence of compliance
with all such requirements. The consummation of the transactions contemplated by
this Agreement will not cause the violation of any such laws;

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

          (gg) All improvements upon the Mortgaged Property are insured against
loss by fire, hazards of extended coverage, and such other hazards as are
customary in the area where the Mortgaged Property is located pursuant to
insurance policies conforming to the requirements of Section 3.05 hereof. If the
Mortgaged Property at origination was located in an area identified on a flood
hazard boundary map or flood insurance rate map issued by the Federal Emergency
Management Agency as having special flood hazards (and such flood insurance has
been made available), such Mortgaged Property was covered by flood insurance at
origination. Each individual insurance policy is the valid and binding
obligation of the insurer, is in full force and effect, and will be in full
force and effect and inure to the benefit of the Trustee upon the consummation
of the transactions contemplated by this Agreement, and contain a standard
mortgage clause naming the originator of such Mortgage Loan, and its successors
and assigns, as mortgagee and loss payee. All premiums thereon have been paid.
The Mortgage obligates the Mortgagor to maintain all such insurance at the
Mortgagor's cost and expense, and upon the Mortgagor's failure to do so,
authorizes the holder of the Mortgage to obtain and maintain such insurance at
the Mortgagor's cost and expense and to seek reimbursement therefor from the
Mortgagor, and none of the Unaffiliated Seller, the related Originator or any
prior holder of the Mortgage has acted or failed to act so as to impair the
coverage of any such insurance policy or the validity, binding effect, and
enforceability thereof;

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

          (ii) The Mortgaged Property consists of one or more parcels of real
property separately assessed for tax purposes. To the extent there is erected
thereon a detached or an attached one-family residence or a detached




                                       20
<PAGE>

two-to-six-family dwelling, or an individual condominium unit in a low-rise
condominium, or an individual unit in a planned unit development, or a
commercial property, a manufactured home, or a mixed use or multiple purpose
property, such residence, dwelling or unit is not (i) a unit in a cooperative
apartment, (ii) a property constituting part of a syndication, (iii) a time
share unit, (iv) a property held in trust, (v) a mobile home, (vi) a
log-constructed home, or (vii) a recreational vehicle;

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

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

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

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

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

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

          (pp) When measured by the Cut-Off Date Aggregate Principal Balances of
all Mortgage Loans as of the Initial Cut-Off Date, the Mortgagors with respect
to at least 92.23% of the Mortgage Loans represented at the time of origination
that the Mortgagor would occupy the Mortgaged Property as the Mortgagor's
primary residence;

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


                                       21
<PAGE>

          (rr) Each Mortgage Loan is a "qualified mortgage" within the meaning
of Section 860G(a)(3) of the Code;

          (ss) With respect to second lien Mortgage Loans:

               (i)    neither the Unaffiliated Seller nor the Originators have
                      any knowledge that the Mortgagor has received notice from
                      the holder of the prior mortgage that such prior mortgage
                      is in default;

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

               (iii)  if the prior mortgage has a negative amortization, the
                      Combined Loan-to-Value Ratio was determined using the
                      maximum loan amount of such prior mortgage;

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

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

               (vi)   No more than 14.16% (by Principal Balance) of the Mortgage
                      Loans are secured by Mortgages that are second liens.

          (tt) Each of the Originators and the Unaffiliated Seller further
represents and warrants to the Certificate Insurer, the Trustee and the
Certificateholders that as of the Subsequent Cut-Off Date all representations
and warranties set forth in clauses (a) through (ss) above and (uu) through
(jjj) below will be correct in all material respects as to any Subsequent
Mortgage Loan;

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

          (vv) Each Mortgaged Property is in compliance with all environmental
laws, ordinances, rules, regulations and orders of federal, state or
governmental authorities relating thereto. No hazardous material has been or is
incorporated in, stored on or under (other than properly stored materials used
for reasonable residential purposes), released from, treated on, transported to
or from, or disposed of on or from, any Mortgaged Property such that, under
applicable law (A) any such hazardous material would be required to be
eliminated before the Mortgaged Property could be altered, renovated, demolished
or transferred, or (B) the owner of the Mortgaged Property, or the holder of a
security interest therein, could be subjected to liability for the removal of
such hazardous material or the elimination of the hazard created thereby.
Neither the Unaffiliated Seller nor any Mortgagor has received notification from




                                       22
<PAGE>

any federal, state or other governmental authority relating to any hazardous
materials on or affecting the Mortgaged Property or to any potential or known
liability under any environmental law arising from the ownership or operation of
the Mortgaged Property. For the purposes of this subsection, the term "hazardous
materials" shall include, without limitation, gasoline, petroleum products,
explosives, radioactive materials, polychlorinated biphenyls or related or
similar materials, asbestos or any material containing asbestos, lead,
lead-based paint and any other substance or material as may be defined as a
hazardous or toxic substance by any federal, state or local environmental law,
ordinance, rule, regulation or order, including, without limitation, CERCLA, the
Clean Air Act, the Clean Water Act, the Resource Conservation and Recovery Act,
the Toxic Substances Control Act and any regulations promulgated pursuant
thereto;

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

          (xx) To the best of the Originators' and the Unaffiliated Seller's
knowledge, no Mortgage Loan is covered by the Home Ownership and Equity
Protection Act, no Mortgage Loan is in violation of any comparable state or
local law and no Mortgage Loan is a "high-cost" loan or a loan having similar
characteristics under the laws of the States of Georgia, New York,
Massachusetts, Illinois or North Carolina or any comparable state or local laws;

          (yy) Except for 2.65% (by Principal Balance) of the Mortgage Loans,
which may have an initial CLTV ratio range of up to 100.00%, no Mortgage Loans
have initial CLTV ratios greater than 90.00%;

          (zz) No more than 7.39% (by Principal Balance) of the Mortgage Loans
are loans the proceeds of which are to be used for business purposes;

          (aaa) At least 92.23% (by Principal Balance) of the Mortgage Loans are
secured exclusively by Owner Occupied Mortgaged Property;

          (bbb) To the extent that a credit score was obtained, the weighted
average FICO or similar scoring result score (by Principal Balance) for the
Mortgage Loans is at least 570, not more than 1.85% (by Principal Balance) of
the Mortgage Loans have FICO or similar scoring result scores that are less than
500 and at least 99.68% (by Principal Balance) of the Mortgage Loans have FICO
or similar scoring result scores;

          (ccc) The Mortgage Loans have a weighted average CLTV (by Principal
Balance) of not more than 76.80% and no more than 2.65% (by Principal Balance)
of the Mortgage Loans have a CLTV greater than 90.00%;

          (ddd) No more than 11.43% (by Principal Balance) of the Mortgage Loans
are made to limited or no documentation borrowers;

          (eee) The Mortgage Interest Rate for each Mortgage Loan is fixed;


                                       23
<PAGE>

          (fff) No more than 38.65% (by Principal Balance ) of the Mortgage
Loans consist of balloon Mortgage Loans that mature within 10 years of the date
of origination;

          (ggg) No Mortgage Loan has a Principal Balance greater than
$550,000.00;

          (hhh) At least 78.20% (by Principal Balance) of the Mortgage Loans are
secured by a single-family detached home, an individual unit in a planned unit
development or a townhouse;

          (iii) No more than 0.39% (by Principal Balance) of the Mortgage Loans
are secured by manufactured homes;

          (jjj) None of the consumer Mortgage Loans have prepayment penalties
that apply for more than five years from the date of origination; and

          (kkk) No proceeds from any Mortgage Loan was used to finance
single-premium credit life insurance.

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

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

          (b) The Depositor has the corporate power and authority to purchase
each Mortgage Loan and to execute, deliver and perform, and to enter into and
consummate all the transactions contemplated by this Agreement;

          (c) This Agreement has been duly and validly authorized, executed and
delivered by the Depositor, and, assuming the due authorization, execution and
delivery hereof by the Unaffiliated Seller and the Originators, constitutes the
legal, valid and binding agreement of the Depositor, enforceable against the
Depositor in accordance with its terms, except as such enforcement may be
limited by bankruptcy, insolvency, reorganization, moratorium or other similar
laws relating to or affecting the rights of creditors generally, and by general
equity principles (regardless of whether such enforcement is considered in a
proceeding in equity or at law);

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

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


                                       24
<PAGE>

          (f) None of the execution and delivery of this Agreement, the purchase
of the Mortgage Loans from the Unaffiliated Seller, the consummation of the
other transactions contemplated hereby, or the fulfillment of or compliance with
the terms and conditions of this Agreement, (i) conflicts or will conflict with
the charter or bylaws of the Depositor or conflicts or will conflict with or
results or will result in a breach of, or constitutes or will constitute a
default or results or will result in an acceleration under, any term, condition
or provision of any indenture, deed of trust, contract or other agreement or
other instrument to which the Depositor is a party or by which it is bound and
which is material to the Depositor, or (ii) results or will result in a
violation of any law, rule, regulation, order, judgment or decree of any court
or governmental authority having jurisdiction over the Depositor.

          Section 3.05. Repurchase Obligation for Defective Documentation and
for Breach of a Representation or Warranty.

          (a) Each of the representations and warranties contained in Sections
3.01, 3.02 and 3.03 shall survive the purchase by the Depositor of the Mortgage
Loans and the subsequent transfer thereof by the Depositor to the Trustee, for
the benefit of the Certificateholders and the Certificate Insurer, and shall
continue in full force and effect, notwithstanding any restrictive or qualified
endorsement on the Mortgage Notes and notwithstanding subsequent termination of
this Agreement or the Pooling and Servicing Agreement.

          (b) With respect to any representation or warranty contained in
Sections 3.01 or 3.03 hereof that is made to the best of the Originators'
knowledge or contained in Sections 3.02 or 3.03 hereof that is made to the best
of the Unaffiliated Seller's knowledge, if it is discovered by the Certificate
Insurer, the Servicer, the Back-up Servicer, the Collateral Agent, any
Subservicer, the Trustee or any Certificateholder that the substance of such
representation and warranty was inaccurate as of the Closing Date or the
Subsequent Transfer Date, as applicable, and such inaccuracy materially and
adversely affects the value of the related Mortgage Loan, then notwithstanding
the Originators' or the Unaffiliated Seller's lack of knowledge with respect to
the inaccuracy at the time the representation or warranty was made, such
inaccuracy shall be deemed a breach of the applicable representation or
warranty. Upon discovery by the Originators, the Certificate Insurer, the
Unaffiliated Seller, the Collateral Agent, the Servicer, the Back-up Servicer,
any Subservicer, the Trustee or any Certificateholder of a breach of any of such
representations and warranties which materially and adversely affects the value
of Mortgage Loans or the interest of the Certificate Insurer or the
Certificateholders, or which materially and adversely affects the interests of
the Certificateholders in the related Mortgage Loan in the case of a
representation and warranty relating to a particular Mortgage Loan
(notwithstanding that such representation and warranty was made to the
Originators' or the Unaffiliated Seller's best knowledge), the party discovering
such breach shall promptly give pursuant to this Section 3.05(b) and pursuant to
Section 4.02 of the Pooling and Servicing Agreement (and in any event, within
five (5) Business Days of the discovery) written notice to the others. Subject
to the last paragraph of this Section 3.05(b), within sixty (60) days of the
earlier of its discovery or its receipt of notice of any breach of a
representation or warranty, the Unaffiliated Seller and the Originators shall
(a) promptly cure such breach in all material respects, or (b) purchase such
Mortgage Loan at the Loan Repurchase Price, or (c) remove such Mortgage Loan




                                       25
<PAGE>

from the Trust Fund (in which case it shall become a Deleted Mortgage Loan) and
substitute one or more Qualified Substitute Mortgage Loans; provided, that, such
substitution is effected not later than the date which is 2 years after the
Startup Day or at such later date, if the Trustee and the Certificate Insurer
receive an Opinion of Counsel to the effect set forth below in this Section. Any
such substitution shall be accompanied by payment by the Unaffiliated Seller of
the Substitution Adjustment, if any, to be deposited in the Collection Account
pursuant to the Pooling and Servicing Agreement.

                  The Originators shall cooperate with the Unaffiliated Seller
to cure any breach and shall reimburse the Unaffiliated Seller for the costs and
expenses related to any cure, substitution (including any Substitution
Adjustment) or repurchase incurred by the Unaffiliated Seller pursuant to this
Section 3.05.

          (c) As to any Deleted Mortgage Loan for which the Unaffiliated Seller
or an Originator substitutes a Qualified Substitute Mortgage Loan or Loans, the
Unaffiliated Seller or such Originator shall effect such substitution by
delivering to the Trustee and the Certificate Insurer a certification in the
form attached to the Pooling and Servicing Agreement as Exhibit K, executed by a
Servicing Officer and the documents described in Section 2.06(d) for such
Qualified Substitute Mortgage Loan or Loans. Pursuant to the Pooling and
Servicing Agreement, upon receipt by the Trustee and the Collateral Agent of a
certification of a Servicing Officer of such substitution or purchase and, in
the case of a substitution, upon receipt by the Collateral Agent, on behalf of
the Trustee, of the related Trustee's Mortgage File, and the deposit of certain
amounts in the Distribution Account pursuant to Section 2.07(b) of the Pooling
and Servicing Agreement (which certification shall be in the form of Exhibit K
to the Pooling and Servicing Agreement), the Collateral Agent, on behalf of the
Trustee shall be required to release to the Servicer for release to the
Unaffiliated Seller the related Trustee's Mortgage File and shall be required to
execute, without recourse, and deliver such instruments of transfer furnished by
the Unaffiliated Seller as may be necessary to transfer such Mortgage Loan to
the Unaffiliated Seller or such Originator.

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




                                       26
<PAGE>

substitution, the Unaffiliated Seller will remit to the Servicer and pursuant to
the Pooling and Servicing Agreement the Servicer will deposit into the
Distribution Account an amount equal to the Substitution Adjustment, if any.

          (e) With respect to any Mortgage Loan that has been converted to an
REO Mortgage Loan, all references in this Section 3.05 or Section 2.06 to
"Mortgage Loan" shall be deemed to refer to such REO Mortgage Loan. With respect
to any Mortgage Loan that the Originator or Unaffiliated Seller is required to
repurchase that is or becomes a Liquidated Mortgage Loan, in lieu of
repurchasing such Mortgage Loan, the Originator or Unaffiliated Seller shall
deposit into the Distribution Account, pursuant to Section 6.01 of the Pooling
and Servicing Agreement an amount equal to the amount of the Liquidated Loan
Loss, if any, incurred in connection with the liquidation of such Mortgage Loan
within the same time period in which the Originator or Unaffiliated Seller would
have otherwise been required to repurchase such Mortgage Loan.

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

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

          (h) Notwithstanding any contrary provision of this Agreement, with
respect to any Mortgage Loan which is not in default or as to which no default
is imminent, no purchase, or substitution pursuant to Section 2.06(b) or this
Section 3.05 shall be made unless the Unaffiliated Seller provides to the
Trustee and the Certificate Insurer an Opinion of Counsel to the effect that
such purchase or substitution would not (i) result in the imposition of taxes on
"prohibited transactions" of the REMIC Trust, as defined in Section 860F of the
Code or a tax on contributions to the REMIC Trust under the REMIC Provisions, or
(ii) cause any REMIC created under the Pooling and Servicing Agreement to fail
to qualify as a REMIC at any time that any Certificates are outstanding. Any
Mortgage Loan as to which purchase or substitution was delayed pursuant to this
paragraph shall be purchased or substituted (subject to compliance with Section
2.06 and this Section 3.05) upon the earlier of (a) the occurrence of a default
or imminent default with respect to such loan and (b) receipt by the Trustee and
the Certificate Insurer of an Opinion of Counsel to the effect that such
purchase or substitution will not result in the events described in clauses (i)
and (ii) of the preceding sentence.

          (i) Pursuant to the Pooling and Servicing Agreement, upon discovery by
the Unaffiliated Seller, the Servicer, the Back-up Servicer, the Trustee and the
Certificate Insurer or any Certificateholder that any Mortgage Loan does not
satisfy the requirements of Sections 3.02 and 3.03 hereof, the party discovering




                                       27
<PAGE>

such fact shall promptly (and in any event, within 5 Business Days of the
discovery) give written notice thereof to the other parties. In connection
therewith, the Unaffiliated Seller or the related Originator shall repurchase or
substitute a Qualified Substitute Mortgage Loan for the affected Mortgage Loan
within ninety (90) days of the earlier of such discovery by any of the foregoing
parties, or the Trustee's or the Unaffiliated Seller's receipt of notice, in the
same manner as it would a Mortgage Loan for a breach of representation or
warranty contained in Sections 3.01, 3.02 or 3.03. Pursuant to the Pooling and
Servicing Agreement the Trustee shall reconvey to the Unaffiliated Seller or the
related Originator the Mortgage Loan to be released pursuant hereto in the same
manner, and on the same terms and conditions, as it would a Mortgage Loan
repurchased for breach of a representation or warranty contained in Sections
3.01, 3.02 or 3.03.

          (j) Notwithstanding anything in this Agreement or the Pooling and
Servicing Agreement to the contrary, the Unaffiliated Seller's repurchase
obligations hereunder shall not include failure of the Trustee to record
assignments of the Mortgage Loans referenced in clause (a)(iii) in Section 2.05
of the Pooling and Servicing Agreement. All parties hereto acknowledge and agree
that the Trustee has the responsibility to record all such assignments of the
Mortgage Loans to the Trustee.

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

          (l) The Unaffiliated Seller and the Originators hereby agree, jointly
and severally, to indemnify the Trustee, the Depositor, the Certificate Insurer
and the Certificateholders and their successors, assigns, agents and servants
(collectively, the "Indemnified Parties") from and against, any and all
liabilities, obligations, losses, damages, taxes, claims, actions and suits, and
any and all reasonable out of pocket costs, expenses and disbursements
(including reasonable legal fees and expenses) of any kind and nature whatsoever
(collectively, "Expenses") which may at any time be imposed on, incurred by, or
asserted against any Indemnified Party in any way relating to or arising out of
a breach by the Unaffiliated Seller or the related Originator of the
representations or warranties in Article III hereof. The indemnities contained
in this Section 3.05 shall survive the resignation or termination of the Trustee
or the termination of this Agreement.

          Section 3.06. Limited Purpose and Corporate Separateness of the
Unaffiliated Seller.

          (a) The Unaffiliated Seller covenants to the Trustee, the Depositor,
the Servicer the Back-up Servicer, the Certificate Insurer and the
Certificateholders as follows:

               (i) The Unaffiliated Seller shall not engage in any business or
     activity of any kind or enter into any transaction or indenture, mortgage,
     instrument, agreement contract, lease or other undertaking other than the
     transactions contemplated and authorized by this Agreement. Without
     limiting the generality of the foregoing, the Unaffiliated Seller shall not
     create, incur, guarantee, assume or suffer to exist any indebtedness or
     other liabilities, whether direct or contingent, other than (i) as a result
     of the endorsement of negotiable instruments for deposit or collection or
     similar transactions in the ordinary course of business, (ii) the




                                       28
<PAGE>

     incurrence of obligations under this Agreement and the Insurance and
     Indemnity Agreement and (iii) the incurrence of operating expenses in the
     ordinary course of business permitted under this Agreement;

               (ii) The Unaffiliated Seller shall not amend its certificate of
     incorporation or by-laws in any respect without the prior written consent
     of the Certificate Insurer (absent a Certificate Insurer Default);

               (iii) The Unaffiliated Seller has been formed for, and shall
     limit its activities to, the following purposes: (i) to purchase the
     Mortgage Loans from the Originators and to sell such Mortgage Loans to the
     Depositor, in each case pursuant to this Agreement; (ii) in the event of
     the occurrence of a breach of certain representations and warranties, to
     cause the substitution or repurchase of the related Mortgage Loans by the
     Originators; (iii) to enter into and perform its obligations under this
     Agreement and the Insurance and Indemnity Agreement and (iv) to engage in
     those activities that are necessary, suitable or convenient to accomplish
     the foregoing or are incidental thereto or connected therewith;

               (iv) The Unaffiliated Seller shall not incur, assume or guarantee
     any indebtedness or other liabilities except under the provisions of this
     Agreement and the Insurance and Indemnity Agreement;

               (v) The Unaffiliated Seller shall maintain separate corporate
     records and books of account from those of the Originators or any of their
         Affiliates;

               (vi) The Unaffiliated Seller shall not become involved in the day
     to day management of any other Person, and it shall operate so as not to be
     substantively consolidated with any other Person;

               (vii) The Unaffiliated Seller shall maintain its assets separate
     from those
         of the Originators or any of their Affiliates;

               (viii) The Unaffiliated Seller shall conduct correspondence in
     its own name on its own stationery;

               (ix) The Unaffiliated Seller shall not act as an agent of any
     other entity or Person except pursuant to contractual documents indicating
     such capacity;

               (x) The Unaffiliated Seller shall take all other actions
     necessary on its part in order to ensure that all of the facts and
     assumptions set forth in the opinion issued by Dewey Ballantine LLP in
     connection with the closing or initial purchase under this Agreement and
     relating to true sale and substantive consolidation issues, and in the
     certificates accompanying such opinion, remain true and correct at all
     times; and

               (xi) The Unaffiliated Seller shall not undertake any activity
     which is not a permitted activity for a qualified special purpose entity
     under current accounting literature.


                                       29
<PAGE>

          (b) The Originators will operate in such a manner that the
Unaffiliated Seller would not be substantively consolidated in the trust estate
of the Originators, ABFS or any of their respective Affiliates (each an "ABFS
Company") and the separate existence of Unaffiliated Seller would not be
disregarded in the event of a bankruptcy or insolvency of any ABFS Company.
Without limiting the generality of the foregoing and in addition to the other
covenants set forth herein, each Originator shall take, and shall cause each of
their Affiliates to take, all actions required on its part to ensure that:

               (i) the Unaffiliated Seller shall conduct its business solely in
     its own name and make all written and oral communications solely in its
     name;

               (ii) the Unaffiliated Seller shall provide for its expenses and
     liabilities from its own funds;

               (iii) the Unaffiliated Seller shall not be contractually liable
     for the payment of any liability of any ABFS Company nor generally hold its
     assets nor creditworthiness as being available for the payment of any
     liability of any ABFS Company;

               (iv) the Unaffiliated Seller shall maintain an arm's-length
     relationship with each other ABFS Company;

               (v) the Unaffiliated Seller shall not transfer any assets between
     itself and any other ABFS Company without fair consideration or with the
     intent to hinder, delay or defraud the creditors of any other ABFS Company;
     and

               (vi) any consolidated financial statements of any ABFS Company
     that include the Unaffiliated Seller have notes clearly stating that the
     Unaffiliated Seller is a corporation separate and distinct from each of the
     other ABFS Companies and that the assets of the Unaffiliated Seller will be
     available first and foremost to satisfy the claims of the creditors of the
     Unaffiliated Seller.

                                   ARTICLE IV

                             THE UNAFFILIATED SELLER

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

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

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


                                       30
<PAGE>

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

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

          Section 4.03. Costs. In connection with the transactions contemplated
under this Agreement and the Pooling and Servicing Agreement, the Unaffiliated
Seller shall promptly pay (or shall promptly reimburse the Depositor to the
extent that the Depositor shall have paid or otherwise incurred): (a) the fees
and disbursements of the Depositor's (100% of fees in excess of $30,000 but not
to exceed $65,000), the Unaffiliated Seller's and the Originators' counsel; (b)
the fees of S&P, Moody's and Fitch; (c) any of the fees and expenses of the
Trustee, the Collateral Agent and the Back-Up Servicer and the fees and
disbursements of the Trustee's, the Collateral Agent's and the Back-Up
Servicer's counsel; (d) expenses incurred in connection with printing the
Prospectus, the Prospectus Supplement, any amendment or supplement thereto, any
preliminary prospectus and the Certificates; (e) fees and expenses relating to
the filing of documents with the Securities and Exchange Commission (including,
without limitation, periodic reports under the Exchange Act); (f) the shelf
registration amortization fee of 0.0094% of the Certificate Principal Balance of
the Offered Certificates on the Closing Date, paid in connection with the
issuance of Certificates; (g) the fees and disbursements for the accountants for
the Originators; and (h) all of the initial expenses of the Certificate Insurer
including, without limitation, legal fees and expenses, accountant fees and
expenses and expenses in connection with due diligence conducted on the Mortgage
Files but not including the initial premium paid to the Certificate Insurer. For
the avoidance of doubt, the parties hereto acknowledge that it is the intention
of the parties that the Depositor shall not pay any of the Trustee's fees and
expenses in connection with the transactions contemplated by the Pooling and
Servicing Agreement. All other costs and expenses in connection with the
transactions contemplated hereunder shall be borne by the party incurring such
expenses.


                                       31
<PAGE>

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

               (i) to indemnify and hold harmless the Depositor, each of its
     directors, each of its officers who have signed the Registration Statement,
     and each of its directors and each person or entity who controls the
     Depositor or any such person, within the meaning of Section 15 of the
     Securities Act, against any and all losses, claims, damages or liabilities,
     joint and several, to which the Depositor or any such person or entity may
     become subject, under the Securities Act or otherwise, and will reimburse
     the Depositor and each such controlling person for any legal or other
     expenses incurred by the Depositor or such controlling person in connection
     with investigating or defending any such loss, claim, damage, liability or
     action, insofar as such losses, claims, damages or liabilities (or actions
     in respect thereof) arise out of or are based upon any untrue statement or
     alleged untrue statement of any material fact contained in the Prospectus
     Supplement or any amendment or supplement to the Prospectus Supplement or
     the omission or the alleged omission to state therein a material fact
     required to be stated therein or necessary to make the statements in the
     Prospectus Supplement or any amendment or supplement to the Prospectus
     Supplement approved in writing by the Originators or the Unaffiliated
     Seller, in light of the circumstances under which they were made, not
     misleading, but only to the extent that such untrue statement or alleged
     untrue statement or omission or alleged omission relates to the information
     contained in the Prospectus Supplement referred to in Section 3.01(d);
     provided, however, that in no event will the Unaffiliated Seller be liable
     in excess of the net proceeds of its sale hereunder. This indemnity
     agreement will be in addition to any liability which the Originators and
     the Unaffiliated Seller may otherwise have; and

               (ii) to indemnify and to hold the Depositor harmless against any
     and all claims, losses, penalties, fines, forfeitures, legal fees and
     related costs, judgments, and any other costs, fees and expenses that the
     Depositor may sustain in any way related to the failure of any of the
     Originators or the Unaffiliated Seller to perform its duties in compliance
     with the terms of this Agreement. The Originators or the Unaffiliated
     Seller shall immediately notify the Depositor if a claim is made by a third
     party with respect to this Agreement, and the Servicer shall assume the
     defense of any such claim and pay all expenses in connection therewith,
     including reasonable counsel fees, and promptly pay, discharge and satisfy
     any judgment or decree which may be entered against the Depositor in
     respect of such claim. Pursuant to the Pooling and Servicing Agreement, the
     Trustee shall reimburse the Servicer in accordance with Section 5.19(b) of
     the Pooling and Servicing Agreement for all amounts advanced by the
     Servicer pursuant to the preceding sentence except when the claim relates
     directly to the failure of the Unaffiliated Seller to perform its duties in
     compliance with the terms of this Agreement.

          (b) The Depositor agrees to indemnify and hold harmless each of the
Originators and the Unaffiliated Seller, each of their respective directors and
each person or entity who controls the Originators or the Unaffiliated Seller or
any such person, within the meaning of Section 15 of the Securities Act, against
any and all losses, claims, damages or liabilities, joint and several, to which
the Originators or the Unaffiliated Seller or any such person or entity may




                                       32
<PAGE>

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

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

          (d) In order to provide for just and equitable contribution in
circumstances in which the indemnity agreement provided for in the preceding
parts of this Section 4.04 is for any reason held to be unavailable to or
insufficient to hold harmless an indemnified party under subsection (a) or
subsection (b) of this Section 4.04 in respect of any losses, claims, damages or
liabilities (or actions in respect thereof) referred to therein, the
indemnifying party shall contribute to the amount paid or payable by the
indemnified party as a result of such losses, claims, damages or liabilities (or
actions in respect thereof) subject to the limits set forth in subsection (a)
and subsection (b) of this Section 4.04; provided, however, that no person




                                       33
<PAGE>

guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of
the Securities Act) shall be entitled to a contribution from any person who was
not guilty of such fraudulent misrepresentation. In determining the amount of
contribution to which the respective parties are entitled, there shall be
considered the relative benefits received by the Originators and the
Unaffiliated Seller on the one hand, and the Depositor on the other, the
Originators', the Unaffiliated Seller's and the Depositor's relative knowledge
and access to information concerning the matter with respect to which the claim
was asserted, the opportunity to correct and prevent any statement or omission,
and any other equitable considerations appropriate in the circumstances. The
Originators, the Unaffiliated Seller and the Depositor agree that it would not
be equitable if the amount of such contribution were determined by pro rata or
per capita allocation. For purposes of this Section 4.04, each director of the
Depositor, each officer of the Depositor who signed the Registration Statement,
and each person, if any who controls the Depositor within the meaning of Section
15 of the Securities Act, shall have the same rights to contribution as the
Depositor, and each director of the Originators or the Unaffiliated Seller, and
each person, if any who controls the Originators or the Unaffiliated Seller
within the meaning of Section 15 of the Securities Act, shall have the same
rights to contribution as the Originators and the Unaffiliated Seller.

                                   ARTICLE V

                              CONDITIONS OF CLOSING

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

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

          (b) The Depositor shall have received (i) a letter dated the date of
this Agreement, in form and substance acceptable to the Depositor and its
counsel, prepared by Deloitte & Touche LLP, independent certified public
accountants, regarding the numerical information contained in the Prospectus
Supplement, including, but not limited to, the information under the captions
"Prepayment and Yield Considerations" and "The Mortgage Loan Pool" regarding any
numerical information in any marketing materials relating to the Certificates
and regarding any other information as reasonably requested by the Depositor and
(ii) a letter dated the date of this Agreement, in form and substance acceptable
to the Depositor and its counsel, prepared by BDO Seidman LLP, independent
certified public accountants, regarding the numerical information contained in
the Prospectus Supplement under the caption "The Originators, the Seller and the
Servicer -- Delinquency and Loan Loss Experience."



                                       34
<PAGE>

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

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

               (i) the Mortgage Loan Schedule;

               (ii) this Agreement, the Pooling and Servicing Agreement, dated
     as of March 1, 2003, and the Underwriting Agreement dated as of March 27,
     2003 and between the Depositor and the Representative, and all documents
     required thereunder, duly executed and delivered by each of the parties
     thereto other than the Depositor;

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

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

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

               (vi) opinions of counsel for the Unaffiliated Seller, in forms
     acceptable to the Depositor, its counsel, the Certificate Insurer, S&P,
     Moody's and Fitch as to such matters as shall be required for the
     assignment of a rating to the Offered Certificates described in clauses
     (vii), (viii) and (ix) below (it being agreed that such opinions shall
     expressly provide that the Trustee shall be entitled to rely on such
     opinions);

               (vii) a letter from Moody's to the effect that it has assigned a
     rating of "Aaa" to the Class A and Class A-IO Certificates;

               (viii) a letter from S&P to the effect that it has assigned a
     rating of "AAA" to the Class A and Class A-IO Certificates and "AA" to the
     Class M Certificates;

               (ix) a letter from Fitch to the effect that it has assigned a
     rating of "AAA" to the Class A and Class A-IO Certificates and "AA" to the
     Class M Certificates;

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

               (xi) an opinion or opinions of counsel for the Servicer, in form
     and substance acceptable to the Depositor, its counsel, the Certificate




                                       35
<PAGE>

     Insurer, Moody's, S&P and Fitch (it being agreed that the opinion shall
     expressly provide that the Unaffiliated Seller shall be entitled to rely on
     the opinion);

               (xii) an opinion or opinions of the counsel for the Originators
     and the Unaffiliated Seller as to corporate securities, true sale and 10b-5
     matters;

               (xiii) an opinion of the counsel for the Depositor and the
     Underwriters as to tax and 10b-5 matters;

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

               (xv) the Interest Rate Hedge Agreement.

          (e) The Certificate Insurance Policy shall have been duly executed,
delivered and issued with respect to the Class M Certificates.

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

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

          (h) All other terms and conditions of this Agreement and the Pooling
and Servicing Agreement shall be complied with.

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

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

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

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


                                       36
<PAGE>

               (ii) a letter from Moody's to the effect that it has assigned a
     rating of "Aaa" to the Class A and Class A-IO Certificates;

               (iii) a letter from S&P to the effect that it has assigned a
     rating of "AAA" to the Class A and Class A-IO Certificates and "AA" to the
     Class M Certificates;

               (iv) a letter from Fitch to the effect that it has assigned a
     rating of "AAA" to the Class A and Class A-IO Certificates and "AA" to the
     Class M Certificates;

               (v) an opinion or opinions of the counsel for the Originators and
     the Unaffiliated Seller as to corporate securities, true sale and 10b-5
     matters;

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

               (vii) an opinion of counsel for the Certificate Insurer, in form
     and substance acceptable to the Unaffiliated Seller, its counsel, Moody's,
     S&P and Fitch; and

               (viii) an opinion of counsel for the Depositor, in form and
     substance acceptable to the Unaffiliated Seller, its counsel, Moody's, S&P
     and Fitch.

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

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

                                   ARTICLE VI

                                  MISCELLANEOUS

          Section 6.01. Notices. All demands, notices and communications
hereunder shall be in writing and shall be deemed to have been duly given if




                                       37
<PAGE>

personally delivered to or mailed by registered mail, postage prepaid, or
transmitted by telex or telegraph and confirmed by a similar mailed writing, if
to the Depositor, addressed to the Depositor at Bear Stearns Asset Backed
Securities, Inc., 383 Madison Avenue, 10th Floor, New York, New York 10179,
Attention: Chief Counsel, or to such other address as the Depositor may
designate in writing to the Unaffiliated Seller and if to the Unaffiliated
Seller, addressed to the Unaffiliated Seller at ABFS 2003-1, Inc., Balapointe
Office Centre, 111 Presidential Boulevard, Suite 127, Bala Cynwyd, Pennsylvania
19004, Attention: Mr. Jeffrey M. Ruben, or to such other address as the
Unaffiliated Seller may designate in writing to the Depositor.

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

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

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

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

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

          Section 6.07. Confirmation of Intent; Grant of Security Interest. It
is the express intent of the parties hereto that the conveyance of the Mortgage
Loans by the Originators to the Unaffiliated Seller and by the Unaffiliated




                                       38
<PAGE>

Seller to the Depositor as contemplated by this Unaffiliated Seller's Agreement
be, and be treated for all purposes as, a sale of the Mortgage Loans and that
the conveyance of the Mortgage Loans by the Unaffiliated Seller to the Depositor
as contemplated by this Unaffiliated Seller's Agreement be, and be treated for
accounting purposes as, a sale of the Mortgage Loans. It is, further, not the
intention of the parties that such conveyance be deemed a pledge of the Mortgage
Loans by the Originators to the Unaffiliated Seller or by the Unaffiliated
Seller to the Depositor to secure a debt or other obligation of the Originators
or the Unaffiliated Seller, as the case may be. However, in the event that,
notwithstanding the intent of the parties, the Mortgage Loans are held to
continue to be property of the Originators or the Unaffiliated Seller then (a)
this Unaffiliated Seller's Agreement shall also be deemed to be a security
agreement within the meaning of Articles 8 and 9 of the Uniform Commercial Code;
(b) the transfer of the Mortgage Loans provided for herein shall be deemed to be
a grant by the Originators to the Unaffiliated Seller and by the Unaffiliated
Seller to the Depositor of a security interest in all of such parties' right,
title and interest in and to the Mortgage Loans and all amounts payable on the
Mortgage Loans in accordance with the terms thereof and all proceeds of the
conversion, voluntary or involuntary, of the foregoing into cash, instruments,
securities or other property; (c) the possession by the Depositor of Mortgage
Notes and such other items of property as constitute instruments, money,
negotiable documents or tangible chattel paper shall be deemed to be "taking
possession of the collateral" for purposes of perfecting the security interest
pursuant to Section 9-312 of the Uniform Commercial Code; and (d) notifications
to persons holding such property, and acknowledgments, receipts or confirmations
from persons holding such property, shall be deemed notifications to, or
acknowledgments, receipts or confirmations from, financial intermediaries,
bailees or agents (as applicable) of the Depositor for the purpose of perfecting
such security interest under applicable law. Any assignment of the interest of
the Depositor pursuant to any provision hereof shall also be deemed to be an
assignment of any security interest created hereby. The Originators, the
Unaffiliated Seller and the Depositor shall, to the extent consistent with this
Unaffiliated Seller's Agreement, take such actions as may be necessary to ensure
that, if this Unaffiliated Seller's Agreement were deemed to create a security
interest in the Mortgage Loans, such security interest would be deemed to be a
perfected security interest of first priority under applicable law and will be
maintained as such throughout the term of this Agreement.

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

          Section 6.09. Amendments.

          (a) This Agreement may be amended from time to time by the
Originators, the Unaffiliated Seller and the Depositor by written agreement,
with the prior written consent of the Certificate Insurer (absent a Certificate
Insurer Default), without notice to or consent of the Certificateholders to cure
any ambiguity, to correct or supplement any provisions herein, to comply with
any changes in the Code, or to make any other provisions with respect to matters
or questions arising under this Agreement which shall not be inconsistent with
the provisions of this Agreement; provided, however, that such action shall not,
as evidenced by (i) an Opinion of Counsel, at the expense of the party
requesting the change, delivered to the Trustee and the Certificate Insurer or
(ii) a letter from each Rating Agency confirming that such amendment will not




                                       39
<PAGE>

result in the reduction, qualification or withdrawal of the current rating of
the Offered Certificates, adversely affect in any material respect the interests
of any Certificateholder; and provided, further, that no such amendment shall
(x) reduce in any manner the amount of, or delay the timing of, payments
received on Mortgage Loans which are required to be distributed on any
Certificate without the consent of the Holder of such Certificate, or (y) change
the rights or obligations of any other party hereto without the consent of such
party, or (z) cause the Unaffiliated Seller to conduct any activity not
permitted for qualified special purpose entities under the current accounting
literature.

          (b) This Agreement may be amended from time to time by the
Originators, the Unaffiliated Seller and the Depositor, with the consent of the
Certificate Insurer, or, following the occurrence of a Certificate Insurer
Default, the Majority Certificateholders and the Holders of the majority of the
Percentage Interest in the Class R Certificates, for the purpose of adding any
provisions to or changing in any manner or eliminating any of the provisions of
this Agreement or of modifying in any manner the rights of the Holders;
provided, however, that no such amendment shall be made unless the Trustee and
the Certificate Insurer receives an Opinion of Counsel, at the expense of the
party requesting the change, that such change will not adversely affect the
status of any REMIC created under the Pooling and Servicing Agreement as a REMIC
or cause a tax to be imposed on any such REMIC, and provided further, that no
such amendment shall reduce in any manner the amount of, or delay the timing of,
payments received on Mortgage Loans which are required to be distributed on any
Certificate without the consent of the Holder of such Certificate or reduce the
percentage for each Class the Holders of which are required to consent to any
such amendment without the consent of the Holders of 100% of each Class of
Certificates affected thereby.

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

          Section 6.10. Third-Party Beneficiaries. The parties agree that each
of the Certificate Insurer, the Collateral Agent and the Trustee is an intended
third-party beneficiary of this Agreement to the extent necessary to enforce the
rights and to obtain the benefit of the remedies under this Agreement which are
assigned to the Trustee for the benefit of the Certificateholders and the
Certificate Insurer pursuant to the Pooling and Servicing Agreement, and to the
extent necessary to obtain the benefit of the enforcement of the obligations and
covenants of the Unaffiliated Seller and the Originators.

          Section 6.11. GOVERNING LAW; CONSENT TO JURISDICTION; WAIVER OF JURY
TRIAL.

          (a) THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE
WITH, THE INTERNAL LAWS (AS OPPOSED TO CONFLICT OF LAWS PROVISIONS) OF THE STATE
OF NEW YORK.

          (b) THE ORIGINATORS, THE DEPOSITOR AND THE UNAFFILIATED SELLER EACH
HEREBY SUBMIT TO THE NON-EXCLUSIVE JURISDICTION OF THE COURTS OF THE STATE OF
NEW YORK AND THE UNITED STATES DISTRICT COURT LOCATED IN THE BOROUGH OF
MANHATTAN IN NEW YORK CITY, AND EACH WAIVES PERSONAL SERVICE OF ANY AND ALL




                                       40
<PAGE>

PROCESS UPON IT AND CONSENTS THAT ALL SUCH SERVICE OF PROCESS BE MADE BY
REGISTERED MAIL DIRECTED TO THE ADDRESS SET FORTH IN SECTION 6.01 OF THIS
AGREEMENT AND SERVICE SO MADE SHALL BE DEEMED TO BE COMPLETED FIVE DAYS AFTER
THE SAME SHALL HAVE BEEN DEPOSITED IN THE U.S. MAIL, POSTAGE PREPAID. THE
ORIGINATORS, THE DEPOSITOR AND THE UNAFFILIATED SELLER EACH HEREBY WAIVES ANY
OBJECTION BASED ON FORUM NON CONVENIENS, AND ANY OBJECTION TO VENUE OF ANY
ACTION INSTITUTED HEREUNDER AND CONSENTS TO THE GRANTING OF SUCH LEGAL OR
EQUITABLE RELIEF AS IS DEEMED APPROPRIATE BY THE COURT. NOTHING IN THIS SECTION
SHALL AFFECT THE RIGHT OF THE ORIGINATORS, THE DEPOSITOR AND THE UNAFFILIATED
SELLER TO SERVE LEGAL PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR AFFECT ANY
SUCH PARTIES' RIGHT TO BRING ANY ACTION OR PROCEEDING IN THE COURTS OF ANY OTHER
JURISDICTION.

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

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

                  [Remainder of Page Intentionally Left Blank]








                                       41
<PAGE>

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

                         BEAR STEARNS ASSET BACKED SECURITIES, INC.



                         By: Jonathan Lieberman
                             -------------------------------------
                             Name: Jonathan Lieberman
                             Title: Senior Managing Director


                         ABFS 2003-1, INC.



                         By: Jeffrey M. Ruben
                             -------------------------------------
                             Name: Jeffrey M. Ruben
                             Title: Executive Vice President


                         AMERICAN BUSINESS CREDIT, INC.



                         By: Jeffrey M. Ruben
                             -------------------------------------
                             Name: Jeffrey M. Ruben
                             Title: Executive Vice President


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



                         By: Jeffrey M. Ruben
                             -------------------------------------
                             Name: Jeffrey M. Ruben
                             Title: Executive Vice President


                         AMERICAN BUSINESS MORTGAGE
                             SERVICES, INC.


                         By: Jeffrey M. Ruben
                             -------------------------------------
                             Name: Jeffrey M. Ruben
                             Title: Executive Vice President



            [Signature Page to the Unaffiliated Seller's Agreement]