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                                                                    EXHIBIT 10.5

                       ACCREDITED HOME LENDERS HOLDING CO.
                        2002 EMPLOYEE STOCK PURCHASE PLAN

     1.   Establishment, Purpose and Term of Plan.

          1.1   Establishment. The Accredited Home Lenders Holding Co. 2002
Employee Stock Purchase Plan (the "Plan") is hereby established effective as of
the effective date of the initial registration by the Company of its Stock under
Section 12 of the Securities Exchange Act of 1934, as amended (the "Effective
Date").

          1.2   Purpose. The purpose of the Plan is to advance the interests of
the Company and its stockholders by providing an incentive to attract, retain
and reward Eligible Employees of the Participating Company Group and by
motivating such persons to contribute to the growth and profitability of the
Participating Company Group. The Plan provides such Eligible Employees with an
opportunity to acquire a proprietary interest in the Company through the
purchase of Stock. The Company intends that the Plan qualify as an "employee
stock purchase plan" under Section 423 of the Code (including any amendments or
replacements of such section), and the Plan shall be so construed.

          1.3   Term of Plan. The Plan shall continue in effect until the
earlier of its termination by the Board or the date on which all of the shares
of Stock available for issuance under the Plan have been issued.

     2.   Definitions and Construction.

          2.1   Definitions. Any term not expressly defined in the Plan but
defined for purposes of Section 423 of the Code shall have the same definition
herein. Whenever used herein, the following terms shall have their respective
meanings set forth below:

                (a)  "Board" means the Board of Directors of the Company. If one
or more Committees have been appointed by the Board to administer the Plan,
"Board" also means such Committee(s).

                (b)  "Code" means the Internal Revenue Code of 1986, as amended,
and any applicable regulations promulgated thereunder.

                (c)  "Committee" means a committee of the Board duly appointed
to administer the Plan and having such powers as specified by the Board. Unless
the powers of the Committee have been specifically limited, the Committee shall
have all of the powers of the Board granted herein, including, without
limitation, the power to amend or terminate the Plan at any time, subject to the
terms of the Plan and any applicable limitations imposed by law.

                (d)  "Company" means Accredited Home Lenders Holding Co., a
Delaware corporation, or any successor corporation thereto.

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                (e)  "Compensation" means, with respect to any Offering Period,
base salary and commissions, including any base salary or commissions deferred
under any program or plan established by a Participating Company, including,
without limitation, any plan described in Section 401(k) or Section 125 of the
Code. Compensation shall be limited to amounts actually payable in cash directly
to the Participant or deferred by the Participant during the Offering Period.
Compensation shall not include overtime, bonuses, annual awards, profit sharing,
other incentive payments, shift premiums, long-term disability, workers'
compensation, moving allowances, payments pursuant to a severance agreement,
termination pay, relocation payments, sign-on bonuses, expense reimbursements,
the cost of employee benefits paid by a Participating Company, tuition
reimbursements, imputed income arising under any benefit program, contributions
made by a Participating Company under any employee benefit plan, income directly
or indirectly received pursuant to the Plan or any other stock purchase or stock
option plan, or any other compensation not included in base salary and
commissions.

                (f)  "Eligible Employee" means an Employee who meets the
requirements set forth in Section 5 for eligibility to participate in the Plan.

                (g)  "Employee" means a person treated as an employee of a
Participating Company for purposes of Section 423 of the Code. A Participant
shall be deemed to have ceased to be an Employee either upon an actual
termination of employment or upon the corporation employing the Participant
ceasing to be a Participating Company. For purposes of the Plan, an individual
shall not be deemed to have ceased to be an Employee while on any military
leave, sick leave, or other bona fide leave of absence approved by the Company
of ninety (90) days or less. If an individual's leave of absence exceeds ninety
(90) days, the individual shall be deemed to have ceased to be an Employee on
the ninety-first (91st) day of such leave unless the individual's right to
reemployment with the Participating Company Group is guaranteed either by
statute or by contract.

                (h)  "Fair Market Value" means, as of any date:

                     (i)   If the Stock is then listed on a national or regional
securities exchange or market system or is regularly quoted by a recognized
securities dealer, the closing sale price of a share of Stock (or the mean of
the closing bid and asked prices if the Stock is so quoted instead) as quoted on
the Nasdaq National Market, the Nasdaq SmallCap Market or such other national or
regional securities exchange or market system constituting the primary market
for the Stock, or by such recognized securities dealer, as reported in The Wall
Street Journal or such other source as the Company deems reliable. If the
relevant date does not fall on a day on which the Stock has traded on such
securities exchange or market system or has been quoted by such securities
dealer, the date on which the Fair Market Value is established shall be the last
day on which the Stock was so traded or quoted prior to the relevant date, or
such other appropriate day as determined by the Board, in its discretion.

                     (ii)  If, on the relevant date, the Stock is not then
listed on a national or regional securities exchange or market system or
regularly quoted by a recognized securities dealer, the Fair Market Value of a
share of Stock shall be as determined in good faith by the Board.

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                     (iii)  Notwithstanding the foregoing, the Fair Market Value
of a share of Stock on the Effective Date shall be deemed to be the public
offering price set forth in the final prospectus filed with the Securities and
Exchange Commission in connection with the Company's initial public offering of
the Stock.

                (i)  "Initial Offering Period Cash Exercise Notice" means a
written notice in such form as specified by the Company, which states a
Participant's election to exercise, as of the next Purchase Date, a Purchase
Right granted to such Participant with respect to the Initial Offering Period.

                (j)  "Offering" means an offering of Stock as provided in
Section 6.

                (k)  "Offering Date" means, for any Offering, the first day of
the Offering Period.

                (l)  "Offering Period" means a period established in accordance
with Section 6.

                (m)  "Parent Corporation" means any present or future "parent
corporation" of the Company, as defined in Section 424(e) of the Code.

                (n)  "Participant" means an Eligible Employee who has become a
participant in an Offering Period in accordance with Section 7 and remains a
participant in accordance with the Plan.

                (o)  "Participating Company" means the Company or any Parent
Corporation or Subsidiary Corporation designated by the Board as a corporation
the Employees of which may, if Eligible Employees, participate in the Plan. The
Board shall have the sole and absolute discretion to determine from time to time
which Parent Corporations or Subsidiary Corporations shall be Participating
Companies.

                (p)  "Participating Company Group" means, at any point in time,
the Company and all other corporations collectively which are then Participating
Companies.

                (q)  "Purchase Date" means, for any Offering Period, the last
day of such period.

                (r)  "Purchase Price" means the price at which a share of Stock
may be purchased under the Plan, as determined in accordance with Section 9.

                (s)  "Purchase Right" means an option granted to a Participant
pursuant to the Plan to purchase such shares of Stock as provided in Section 8,
which the Participant may or may not exercise during the Offering Period in
which such option is outstanding. Such option arises from the right of a
Participant to withdraw any accumulated payroll deductions of the Participant
not previously applied to the purchase of Stock under the Plan and to terminate
participation in the Plan at any time during an Offering Period.

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                (t)  "Registration Date" means the effective date of the initial
registration on Form S-8 of shares of Stock issuable pursuant to the Plan.

                (u)  "Stock" means the common stock of the Company, as adjusted
from time to time in accordance with Section 4.2.

                (v)  "Subscription Agreement" means a written agreement in such
form as specified by the Company, stating an Employee's election to participate
in the Plan and authorizing payroll deductions under the Plan from the
Employee's Compensation.

                (w)  "Subscription Date" means the last business day prior to
the Offering Date of an Offering Period or such earlier date as the Company
shall establish.

                (x)  "Subsidiary Corporation" means any present or future
"subsidiary corporation" of the Company, as defined in Section 424(f) of the
Code.

          2.2   Construction. Captions and titles contained herein are for
convenience only and shall not affect the meaning or interpretation of any
provision of the Plan. Except when otherwise indicated by the context, the
singular shall include the plural and the plural shall include the singular. Use
of the term "or" is not intended to be exclusive, unless the context clearly
requires otherwise.

     3.   Administration.

          3.1   Administration by the Board. The Plan shall be administered by
the Board. All questions of interpretation of the Plan, of any form of agreement
or other document employed by the Company in the administration of the Plan, or
of any Purchase Right shall be determined by the Board, and such determinations
shall be final, binding and conclusive upon all persons having an interest in
the Plan or the Purchase Right, unless fraudulent or made in bad faith. Subject
to the provisions of the Plan, the Board shall determine all of the relevant
terms and conditions of Purchase Rights; provided, however, that all
Participants granted Purchase Rights pursuant to an Offering shall have the same
rights and privileges within the meaning of Section 423(b)(5) of the Code. Any
and all actions, decisions and determinations taken or made by the Board in the
exercise of its discretion pursuant to the Plan or any agreement thereunder
(other than determining questions of interpretation pursuant to the second
sentence of this Section 3.1) shall be final, binding and conclusive upon all
persons having an interest therein. All expenses incurred in connection with the
administration of the Plan shall be paid by the Company.

          3.2   Authority of Officers. Any officer of the Company shall have the
authority to act on behalf of the Company with respect to any matter, right,
obligation, determination or election that is the responsibility of or that is
allocated to the Company herein, provided that the officer has apparent
authority with respect to such matter, right, obligation, determination or
election.

          3.3   Policies and Procedures Established by the Company. The Company
may, from time to time, consistent with the Plan and the requirements of Section
423 of the Code, establish, change or terminate such rules, guidelines,
policies, procedures, limitations, or

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adjustments as deemed advisable by the Company, in its discretion, for the
proper administration of the Plan, including, without limitation, (a) a minimum
payroll deduction amount required for participation in an Offering, (b) a
limitation on the frequency or number of changes permitted in the rate of
payroll deduction during an Offering, (c) an exchange ratio applicable to
amounts withheld in a currency other than United States dollars, (d) a payroll
deduction greater than or less than the amount designated by a Participant in
order to adjust for the Company's delay or mistake in processing a Subscription
Agreement or in otherwise effecting a Participant's election under the Plan or
as advisable to comply with the requirements of Section 423 of the Code, and (e)
determination of the date and manner by which the Fair Market Value of a share
of Stock is determined for purposes of administration of the Plan. All such
actions by the Company shall be taken consistent with the requirement under
Section 423(b)(5) of the Code that all Participants granted Purchase Rights
pursuant to an Offering shall have the same rights and privileges within the
meaning of such section.

              3.4    Indemnification. In addition to such other rights of
indemnification as they may have as members of the Board or officers or
employees of the Participating Company Group, members of the Board and any
officers or employees of the Participating Company Group to whom authority to
act for the Board or the Company is delegated shall be indemnified by the
Company against all reasonable expenses, including attorneys' fees, actually and
necessarily incurred in connection with the defense of any action, suit or
proceeding, or in connection with any appeal therein, to which they or any of
them may be a party by reason of any action taken or failure to act under or in
connection with the Plan, or any right granted hereunder, and against all
amounts paid by them in settlement thereof (provided such settlement is approved
by independent legal counsel selected by the Company) or paid by them in
satisfaction of a judgment in any such action, suit or proceeding, except in
relation to matters as to which it shall be adjudged in such action, suit or
proceeding that such person is liable for gross negligence, bad faith or
intentional misconduct in duties; provided, however, that within sixty (60) days
after the institution of such action, suit or proceeding, such person shall
offer to the Company, in writing, the opportunity at its own expense to handle
and defend the same.

         4.   Shares Subject to Plan.

              4.1    Maximum Number of Shares Issuable. Subject to adjustment as
provided in Section 4.2, the maximum aggregate number of shares of Stock that
may be issued under the Plan shall be 1,000,000, cumulatively increased on
January 1, 2003 and each January 1 thereafter until and including January 1,
2012 (the "Annual Increase") by the lesser of (a) 5% of the number of shares of
Stock issued and outstanding on the immediately preceding December 31, (b)
500,000 shares, or (c) such lesser number of shares determined by the Board, and
shall consist of authorized but unissued or reacquired shares of Stock, or any
combination thereof. If an outstanding Purchase Right for any reason expires or
is terminated or canceled, the shares of Stock allocable to the unexercised
portion of that Purchase Right shall again be available for issuance under the
Plan.

              4.2    Adjustments for Changes in Capital Structure. In the event
of any stock dividend, stock split, reverse stock split, recapitalization,
combination, reclassification or similar change in the capital structure of the
Company, or in the event of any merger (including a merger effected for the
purpose of changing the Company's domicile), sale of assets or other

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reorganization in which the Company is a party, appropriate adjustments shall be
made in the number and class of shares subject to the Plan, the Annual Increase,
the limit on the shares which may be purchased by any Participant during an
Offering (as described in Section 8.1) and each Purchase Right, and in the
Purchase Price. If a majority of the shares of the same class as the shares
subject to outstanding Purchase Rights are exchanged for, converted into, or
otherwise become (whether or not pursuant to an Ownership Change Event) shares
of another corporation (the "New Shares"), the Board may unilaterally amend the
outstanding Purchase Rights to provide that such Purchase Rights are exercisable
for New Shares. In the event of any such amendment, the number of shares subject
to, and the Purchase Price of, the outstanding Purchase Rights shall be adjusted
in a fair and equitable manner, as determined by the Board, in its discretion.
Notwithstanding the foregoing, any fractional share resulting from an adjustment
pursuant to this Section 4.2 shall be rounded down to the nearest whole number,
and in no event may the Purchase Price be decreased to an amount less than the
par value, if any, of the stock subject to the Purchase Right. The adjustments
determined by the Board pursuant to this Section 4.2 shall be final, binding and
conclusive.

         5.   Eligibility.

              5.1    Employees Eligible to Participate. Each Employee of a
Participating Company is eligible to participate in the Plan and shall be deemed
an Eligible Employee, except the following:

                     (a)  Any Employee who is customarily employed by the
Participating Company Group for less than twenty (20) hours per week; or

                     (b)  Any Employee who is customarily employed by the
Participating Company Group for not more than five (5) months in any calendar
year.

              5.2    Exclusion of Certain Stockholders. Notwithstanding any
provision of the Plan to the contrary, no Employee shall be treated as an
Eligible Employee and granted a Purchase Right under the Plan if, immediately
after such grant, the Employee would own or hold options to purchase stock of
the Company or of any Parent Corporation or Subsidiary Corporation possessing
five percent (5%) or more of the total combined voting power or value of all
classes of stock of such corporation, as determined in accordance with Section
423(b)(3) of the Code. For purposes of this Section 5.2, the attribution rules
of Section 424(d) of the Code shall apply in determining the stock ownership of
such Employee.

              5.3    Determination by Company. The Company shall determine in
good faith and in the exercise of its discretion whether an individual has
become or has ceased to be an Employee or an Eligible Employee and the effective
date of such individual's attainment or termination of such status, as the case
may be. For purposes of an individual's participation in or other rights, if
any, under the Plan as of the time of the Company's determination, all such
determinations by the Company shall be final, binding and conclusive,
notwithstanding that the Company or any court of law or governmental agency
subsequently makes a contrary determination.

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         6.   Offerings.

              The Plan shall be implemented on and after the Effective Date by
sequential Offerings of approximately six (6) months duration or such other
duration as the Board shall determine (an "Offering Period"); provided, however,
that the first Offering Period (the "Initial Offering Period") shall commence on
the Effective Date and end on June 30, 2003. Subsequent Offering Periods shall
commence on or about July 1 and January 1 of each year and end on or about
December 31 and June 30, respectively, occurring thereafter. Notwithstanding the
foregoing, the Board may establish a different duration for one or more Offering
Periods or different commencing or ending dates for such Offering Periods;
provided, however, that no Offering Period may have a duration exceeding
twenty-seven (27) months. If the first or last day of an Offering Period is not
a day on which the national securities exchanges or Nasdaq Stock Market are open
for trading, the Company shall specify the trading day that will be deemed the
first or last day, as the case may be, of the Offering Period.

         7.   Participation in the Plan.

              7.1    Initial Participation.

                     (a)  Generally. Except as provided in Section 7.1(b), an
Eligible Employee may become a Participant in an Offering Period by delivering a
properly completed Subscription Agreement to the office designated by the
Company not later than the close of business for such office on the Subscription
Date established by the Company for that Offering Period. An Eligible Employee
who does not deliver a properly completed Subscription Agreement to the
Company's designated office on or before the Subscription Date for an Offering
Period shall not participate in the Plan for that Offering Period or for any
subsequent Offering Period unless the Eligible Employee subsequently delivers a
properly completed Subscription Agreement to the appropriate office of the
Company on or before the Subscription Date for such subsequent Offering Period.
An Employee who becomes an Eligible Employee after the Offering Date of an
Offering Period shall not be eligible to participate in that Offering Period but
may participate in any subsequent Offering Period provided the Employee is still
an Eligible Employee as of the Offering Date of such subsequent Offering Period.

                     (b)  Automatic Participation in Initial Offering Period.
Notwithstanding Section 7.1(a), each Employee who is an Eligible Employee as of
the Effective Date shall automatically become a Participant in the Initial
Offering Period and shall be granted automatically a Purchase Right consisting
of an option to purchase the lesser of (a) a number of whole shares of Stock
determined in accordance with Section 8 or (b) a number of whole shares of Stock
determined by dividing fifteen percent (15%) of such Participant's Compensation
paid during the Initial Offering Period by the Purchase Price applicable to the
Initial Offering Period. The Company shall not require or permit any Participant
to deliver a Subscription Agreement for participation in the Initial Offering
Period; provided, however, that following the Registration Date a Participant
may deliver a Subscription Agreement to the office designated by the Company if
the Participant wishes to change the terms of the Participant's participation in
the Initial Offering Period. Such changes may include, for example, an election
to commence payroll deductions in accordance with Section 10.

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              7.2    Continued Participation.

                     (a)  Generally. Except as provided in Section 7.2(b), a
Participant shall automatically participate in the next Offering Period
commencing immediately after the Purchase Date of each Offering Period in which
the Participant participates provided that the Participant remains an Eligible
Employee on the Offering Date of the new Offering Period and has not either (a)
withdrawn from the Plan pursuant to Section 12.1 or (b) terminated employment as
provided in Section 13. A Participant who may automatically participate in a
subsequent Offering Period, as provided in this Section, is not required to
deliver any additional Subscription Agreement for the subsequent Offering Period
in order to continue participation in the Plan. However, a Participant may
deliver a new Subscription Agreement for a subsequent Offering Period in
accordance with the procedures set forth in Section 7.1(a) if the Participant
desires to change any of the elections contained in the Participant's then
effective Subscription Agreement.

                     (b)  Participation in Subsequent Offering Period.
Notwithstanding Section 7.2(a), an Eligible Employee who was automatically
enrolled in the Initial Offering Period and who wishes to participate in an
Offering Period which begins after the Initial Offering Period shall deliver a
Subscription Agreement in accordance with Section 7.1(a) no earlier than the
Registration Date and no later than the Subscription Date for such Offering
Period, unless such Employee was a Participant in the Initial Offering Period
who delivered a Subscription Agreement with respect to the Initial Offering
Period as provided in Section 7.1(b).

         8.   Right to Purchase Shares.

              8.1    Grant of Purchase Right. Except as provided in Section 7.1
with respect to the Initial Offering Period or as set forth below (or otherwise
specified by the Board prior to the Offering Date), on the Offering Date of each
Offering Period, each Participant in such Offering Period shall be granted
automatically, on the Offering Date, a Purchase Right consisting of an option to
purchase the lesser of (a) that number of whole shares of Stock determined by
dividing Twelve Thousand Five Hundred Dollars ($12,500) by the Fair Market Value
of a share of Stock on such Offering Date or (b) one thousand five hundred
(1,500) shares of Stock. No Purchase Right shall be granted on an Offering Date
to any person who is not, on such Offering Date, an Eligible Employee.

              8.2    Calendar Year Purchase Limitation. Notwithstanding any
provision of the Plan to the contrary, no Participant shall be granted a
Purchase Right which permits his or her right to purchase shares of Stock under
the Plan to accrue at a rate which, when aggregated with such Participant's
rights to purchase shares under all other employee stock purchase plans of a
Participating Company intended to meet the requirements of Section 423 of the
Code, exceeds Twenty-Five Thousand Dollars ($25,000) in Fair Market Value (or
such other limit, if any, as may be imposed by the Code) for each calendar year
in which such Purchase Right is outstanding at any time. For purposes of the
preceding sentence, the Fair Market Value of shares purchased during a given
Offering Period shall be determined as of the Offering Date for such Offering
Period. The limitation described in this Section shall be applied in conformance
with applicable regulations under Section 423(b)(8) of the Code.

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9.       Purchase Price.

                  The Purchase Price at which each share of Stock may be
acquired in an Offering Period upon the exercise of all or any portion of a
Purchase Right shall be established by the Board; provided, however, that the
Purchase Price on each Purchase Date shall not be less than eighty-five percent
(85%) of the lesser of (a) the Fair Market Value of a share of Stock on the
Offering Date of the Offering Period or (b) the Fair Market Value of a share of
Stock on the Purchase Date.

10.      Accumulation of Purchase Price Through Payroll Deduction.

                  Except as provided in Section 11.1(b) with respect to the
Initial Offering Period, shares of Stock acquired pursuant to the exercise of
all or any portion of a Purchase Right may be paid for only by means of payroll
deductions from the Participant's Compensation accumulated during the Offering
Period for which such Purchase Right was granted, subject to the following:

                  10.1 Amount of Payroll Deductions. Except as otherwise
provided herein, the amount to be deducted under the Plan from a Participant's
Compensation on each payday during an Offering Period shall be determined by the
Participant's Subscription Agreement. The Subscription Agreement shall set forth
the percentage of the Participant's Compensation to be deducted on each payday
during an Offering Period in whole percentages of not less than one percent (1%)
(except as a result of an election pursuant to Section 10.3 to stop payroll
deductions effective following the first payday during an Offering) or more than
fifteen percent (15%). The Board may change the foregoing limits on payroll
deductions effective as of any Offering Date.

                  10.2 Commencement of Payroll Deductions. Payroll deductions
shall commence on the first payday following the Offering Date and shall
continue to the end of the Offering Period unless sooner altered or terminated
as provided herein; provided, however, that with respect to the Initial Offering
Period, payroll deductions shall commence as soon as practicable following the
Company's receipt of the Participant's Subscription Agreement (delivered no
earlier than the Registration Date), if any.

                  10.3 Election to Change or Stop Payroll Deductions. During an
Offering Period, a Participant may elect to stop deductions from his or her
Compensation by delivering to the Company's designated office an amended
Subscription Agreement authorizing such change on or before the Change Notice
Date, as defined below. A Participant who elects, effective following the first
payday of an Offering Period, to decrease the rate of his or her payroll
deductions to zero percent (0%) shall nevertheless remain a Participant in the
current Offering Period unless such Participant withdraws from the Plan as
provided in Section 12.1. The "Change Notice Date" shall be the day immediately
prior to the beginning of the first pay period for which such election is to be
effective, unless a different date is established by the Company and announced
to the Participants. Except as otherwise described above, a Participant may not
elect to increase or decrease deductions from his or her Compensation during an
Offering.

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                  10.4 Administrative Suspension of Payroll Deductions. The
Company may, in its sole discretion, suspend a Participant's payroll deductions
under the Plan as the Company deems advisable to avoid accumulating payroll
deductions in excess of the amount that could reasonably be anticipated to
purchase the maximum number of shares of Stock permitted (a) under the
Participant's Purchase Right or (b) during a calendar year under the limit set
forth in Section 8.2. Payroll deductions shall be resumed at the rate specified
in the Participant's then effective Subscription Agreement at the beginning of
the next Offering Period, unless the Participant has either withdrawn from the
Plan as provided in Section 12.1 or has ceased to be an Eligible Employee.

                  10.5 Participant Accounts. Individual bookkeeping accounts
shall be maintained for each Participant. All payroll deductions from a
Participant's Compensation (and other amounts received from the Participant in
the Initial Offering Period) shall be credited to such Participant's Plan
account and shall be deposited with the general funds of the Company. All such
amounts received or held by the Company may be used by the Company for any
corporate purpose.

                  10.6 No Interest Paid. Interest shall not be paid on sums
deducted from a Participant's Compensation pursuant to the Plan or otherwise
credited to the Participant's Plan account.

              11. Purchase of Shares.

                  11.1 Exercise of Purchase Right.

                  (a) Generally. Except as provided in Section 11.1(b), on each
Purchase Date of an Offering Period, each Participant who has not withdrawn from
the Plan and whose participation in the Offering has not otherwise terminated
before such Purchase Date shall automatically acquire pursuant to the exercise
of the Participant's Purchase Right the number of whole shares of Stock
determined by dividing (a) the total amount of the Participant's payroll
deductions accumulated in the Participant's Plan account during the Offering
Period and not previously applied toward the purchase of Stock by (b) the
Purchase Price. However, in no event shall the number of shares purchased by the
Participant during an Offering Period exceed the number of shares subject to the
Participant's Purchase Right. No shares of Stock shall be purchased on a
Purchase Date on behalf of a Participant whose participation in the Offering or
the Plan has terminated before such Purchase Date.

                  (b) Purchase in Initial Offering Period. Notwithstanding
Section 11.1(a), on the Purchase Date of the Initial Offering Period, each
Participant who has not withdrawn from the Plan and whose participation in such
Offering has not otherwise terminated before such Purchase Date shall
automatically acquire pursuant to the exercise of the Participant's Purchase
Right (i) a number of whole shares of Stock determined in accordance with
Section 11.1(a) to the extent of the total amount of the Participant's payroll
deductions accumulated in the Participant's Plan account during the Initial
Offering Period, if any, and not previously applied toward the purchase of Stock
and (ii) such additional shares of Stock (not exceeding in the aggregate the
Participant's Purchase Right) as determined in accordance with an Initial
Offering Period Cash Exercise Notice delivered to the office designated by the
Company

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no earlier than the Registration Date and not later than the close of business
for such office on the last business day immediately preceding the Purchase Date
or such earlier date as the Company shall establish, accompanied by payment in
cash or by check of the Purchase Price for such additional shares. However, in
no event shall the number of shares purchased by a Participant during the
Initial Offering Period exceed the number of shares subject to the Participant's
Purchase Right. In addition, if a Participant delivers a Subscription Agreement
to the Company after the Registration Date, the Participant may not elect to
exercise a Purchase Right pursuant to an Initial Offering Period Cash Exercise
Notice in an amount which exceeds fifteen percent (15%) of the Compensation paid
such Participant prior to the effectiveness of such initial Subscription
Agreement. The Company shall refund to the Participant in accordance with
Section 11.4 any excess Purchase Price payment received from the Participant.

                  11.2 Pro Rata Allocation of Shares. If the number of shares of
Stock which might be purchased by all Participants in the Plan on a Purchase
Date exceeds the number of shares of Stock available in the Plan as provided in
Section 4.1, the Company shall make a pro rata allocation of the remaining
shares in as uniform a manner as practicable and as the Company determines to be
equitable. Any fractional share resulting from such pro rata allocation to any
Participant shall be disregarded.

                  11.3 Delivery of Certificates. As soon as practicable after
each Purchase Date, the Company shall arrange the delivery to each Participant
of a certificate representing the shares acquired by the Participant on such
Purchase Date; provided that the Company may deliver such shares to a broker
designated by the Company that will hold such shares for the benefit of the
Participant. Shares to be delivered to a Participant under the Plan shall be
registered in the name of the Participant, or, if requested by the Participant,
in the name of the Participant and his or her spouse, or, if applicable, in the
names of the heirs of the Participant.

                  11.4 Return of Cash Balance. Any cash balance remaining in a
Participant's Plan account following any Purchase Date shall be refunded to the
Participant as soon as practicable after such Purchase Date. However, if the
cash balance to be returned to a Participant pursuant to the preceding sentence
is less than the amount that would have been necessary to purchase an additional
whole share of Stock on such Purchase Date, the Company may retain the cash
balance in the Participant's Plan account to be applied toward the purchase of
shares of Stock in the subsequent Offering Period, as the case may be.

                  11.5 Tax Withholding. At the time a Participant's Purchase
Right is exercised, in whole or in part, or at the time a Participant disposes
of some or all of the shares of Stock he or she acquires under the Plan, the
Participant shall make adequate provision for the federal, state, local and
foreign tax withholding obligations, if any, of the Participating Company Group
which arise upon exercise of the Purchase Right or upon such disposition of
shares, respectively. The Participating Company Group may, but shall not be
obligated to, withhold from the Participant's compensation the amount necessary
to meet such withholding obligations.

                  11.6 Expiration of Purchase Right. Any portion of a
Participant's Purchase Right remaining unexercised after the end of the Offering
Period to which the Purchase Right relates shall expire immediately upon the end
of the Offering Period.

                                       11

<PAGE>

                  11.7 Provision of Reports and Stockholder Information to
Participants. Each Participant who has exercised all or part of his or her
Purchase Right shall receive, as soon as practicable after the Purchase Date, a
report of such Participant's Plan account setting forth the total amount
credited to his or her Plan account prior to such exercise, the number of shares
of Stock purchased, the Purchase Price for such shares, the date of purchase and
the cash balance, if any, remaining immediately after such purchase that is to
be refunded or retained in the Participant's Plan account pursuant to Section
11.4. The report required by this Section may be delivered in such form and by
such means, including by electronic transmission, as the Company may determine.
In addition, each Participant shall be provided information concerning the
Company equivalent to that information provided generally to the Company's
common stockholders.

              12. Withdrawal From Plan or Offering.

                  12.1 Voluntary Withdrawal from the Plan. A Participant may
withdraw from the Plan by signing and delivering to the Company's designated
office a written notice of withdrawal on a form provided by the Company for this
purpose. Such withdrawal may be elected at any time prior to the end of an
Offering Period; provided, however, that if a Participant withdraws from the
Plan after a Purchase Date, the withdrawal shall not affect shares of Stock
acquired by the Participant on such Purchase Date. A Participant who voluntarily
withdraws from the Plan is prohibited from resuming participation in the Plan in
the same Offering from which he or she withdrew, but may participate in any
subsequent Offering by again satisfying the requirements of Sections 5 and 7.1.
The Company may impose, from time to time, a requirement that the notice of
withdrawal from the Plan be on file with the Company's designated office for a
reasonable period prior to the effectiveness of the Participant's withdrawal.

                  12.2 Return of Payroll Deductions. Upon a Participant's
voluntary withdrawal from the Plan pursuant to Section 12.1, the Participant's
accumulated Plan account balance which has not been applied toward the purchase
of shares of Stock shall be refunded to the Participant as soon as practicable
after the withdrawal, without the payment of any interest, and the Participant's
interest in the Plan or the Offering, as applicable, shall terminate. Such
amounts to be refunded in accordance with this Section may not be applied to any
other Offering under the Plan.

              13. Termination of Employment or Eligibility.

                  Upon a Participant's ceasing, prior to a Purchase Date, to be
an Employee of the Participating Company Group for any reason, including
retirement, disability or death, or upon the failure of a Participant to remain
an Eligible Employee, the Participant's participation in the Plan shall
terminate immediately. In such event, the Participant's Plan account balance
which has not been applied toward the purchase of shares shall, as soon as
practicable, be returned to the Participant or, in the case of the Participant's
death, to the Participant's beneficiary designated in accordance with Section
20, if any, or legal representative, and all of the Participant's rights under
the Plan shall terminate. Interest shall not be paid on sums returned pursuant
to this Section 13. A Participant whose participation has been so terminated may
again become eligible to participate in the Plan by satisfying the requirements
of Sections 5 and 7.1.

                                       12

<PAGE>

    14.  Change in Control.

         14.1     Definitions.

                  (a) An "Ownership Change Event" shall be deemed to have
occurred if any of the following occurs with respect to the Company: (i) the
direct or indirect sale or exchange in a single or series of related
transactions by the stockholders of the Company of more than fifty percent (50%)
of the voting stock of the Company; (ii) a merger or consolidation in which the
Company is a party; (iii) the sale, exchange, or transfer of all or
substantially all of the assets of the Company; or (iv) a liquidation or
dissolution of the Company.

                  (b) A "Change in Control" shall mean an Ownership Change Event
or a series of related Ownership Change Events (collectively, the "Transaction")
wherein the stockholders of the Company immediately before the Transaction do
not retain immediately after the Transaction, in substantially the same
proportions as their ownership of shares of the Company's voting stock
immediately before the Transaction, direct or indirect beneficial ownership of
more than fifty percent (50%) of the total combined voting power of the
outstanding voting securities of the Company or, in the case of a Transaction
described in Section 14.1(a)(iii), the corporation or other business entity to
which the assets of the Company were transferred (the "Transferee"), as the case
may be. For purposes of the preceding sentence, indirect beneficial ownership
shall include, without limitation, an interest resulting from ownership of the
voting securities of one or more corporations or other business entities which
own the Company or the Transferee, as the case may be, either directly or
through one or more subsidiary corporations or other business entities. The
Board shall have the right to determine whether multiple sales or exchanges of
the voting securities of the Company or multiple Ownership Change Events are
related, and its determination shall be final, binding and conclusive.

         14.2     Effect of Change in Control on Purchase Rights. In the event
of a Change in Control, the surviving, continuing, successor, or purchasing
corporation or other business entity or parent thereof, as the case may be (the
"Acquiring Corporation"), may, without the consent of any Participant, assume
the Company's rights and obligations under the Plan. If the Acquiring
Corporation elects not to assume the Company's rights and obligations under the
Plan, the Purchase Date of the then current Offering Period shall be accelerated
to a date before the date of the Change in Control specified by the Board, but
the number of shares of Stock subject to outstanding Purchase Rights shall not
be adjusted. All Purchase Rights which are neither assumed by the Acquiring
Corporation in connection with the Change in Control nor exercised as of the
date of the Change in Control shall terminate and cease to be outstanding
effective as of the date of the Change in Control.

    15.  Nontransferability of Purchase Rights.

         Neither payroll deductions or other amounts credited to a Participant's
Plan account nor a Participant's Purchase Right may be assigned, transferred,
pledged or otherwise disposed of in any manner other than as provided by the
Plan or by will or the laws of descent and distribution. (A beneficiary
designation pursuant to Section 20 shall not be treated as a disposition for
this purpose.) Any such attempted assignment, transfer, pledge or other

                                       13

<PAGE>

disposition shall be without effect, except that the Company may treat such act
as an election to withdraw from the Plan as provided in Section 12.1. A Purchase
Right shall be exercisable during the lifetime of the Participant only by the
Participant.

      16.    Compliance With Securities Law.

             The issuance of shares under the Plan shall be subject to
compliance with all applicable requirements of federal, state and foreign law
with respect to such securities. A Purchase Right may not be exercised if the
issuance of shares upon such exercise would constitute a violation of any
applicable federal, state or foreign securities laws or other law or regulations
or the requirements of any securities exchange or market system upon which the
Stock may then be listed. In addition, no Purchase Right may be exercised unless
(a) a registration statement under the Securities Act of 1933, as amended, shall
at the time of exercise of the Purchase Right be in effect with respect to the
shares issuable upon exercise of the Purchase Right, or (b) in the opinion of
legal counsel to the Company, the shares issuable upon exercise of the Purchase
Right may be issued in accordance with the terms of an applicable exemption from
the registration requirements of said Act. The inability of the Company to
obtain from any regulatory body having jurisdiction the authority, if any,
deemed by the Company's legal counsel to be necessary to the lawful issuance and
sale of any shares under the Plan shall relieve the Company of any liability in
respect of the failure to issue or sell such shares as to which such requisite
authority shall not have been obtained. As a condition to the exercise of a
Purchase Right, the Company may require the Participant to satisfy any
qualifications that may be necessary or appropriate, to evidence compliance with
any applicable law or regulation, and to make any representation or warranty
with respect thereto as may be requested by the Company.

      17.    Rights as a Stockholder and Employee.

             A Participant shall have no rights as a stockholder by virtue of
the Participant's participation in the Plan until the date of the issuance of a
certificate for the shares purchased pursuant to the exercise of the
Participant's Purchase Right (as evidenced by the appropriate entry on the books
of the Company or of a duly authorized transfer agent of the Company). No
adjustment shall be made for dividends, distributions or other rights for which
the record date is prior to the date such certificate is issued, except as
provided in Section 4.2. Nothing herein shall confer upon a Participant any
right to continue in the employ of the Participating Company Group or interfere
in any way with any right of the Participating Company Group to terminate the
Participant's employment at any time.

      18.    Legends.

             The Company may at any time place legends or other identifying
symbols referencing any applicable federal, state or foreign securities law
restrictions or any provision convenient in the administration of the Plan on
some or all of the certificates representing shares of Stock issued under the
Plan. The Participant shall, at the request of the Company, promptly present to
the Company any and all certificates representing shares acquired pursuant to a
Purchase Right in the possession of the Participant in order to carry out the
provisions of this

                                       14

<PAGE>

Section. Unless otherwise specified by the Company, legends placed on such
certificates may include but shall not be limited to the following:

"THE SHARES EVIDENCED BY THIS CERTIFICATE WERE ISSUED BY THE CORPORATION TO THE
REGISTERED HOLDER UPON THE PURCHASE OF SHARES UNDER AN EMPLOYEE STOCK PURCHASE
PLAN AS DEFINED IN SECTION 423 OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED.
THE TRANSFER AGENT FOR THE SHARES EVIDENCED HEREBY SHALL NOTIFY THE CORPORATION
IMMEDIATELY OF ANY TRANSFER OF THE SHARES BY THE REGISTERED HOLDER HEREOF. THE
REGISTERED HOLDER SHALL HOLD ALL SHARES PURCHASED UNDER THE PLAN IN THE
REGISTERED HOLDER'S NAME (AND NOT IN THE NAME OF ANY NOMINEE)."

      19.    Notification of Disposition of Shares.

             The Company may require the Participant to give the Company prompt
notice of any disposition of shares acquired by exercise of a Purchase Right.
The Company may require that until such time as a Participant disposes of shares
acquired upon exercise of a Purchase Right, the Participant shall hold all such
shares in the Participant's name (or, if elected by the Participant, in the name
of the Participant and his or her spouse but not in the name of any nominee)
until the later of two years after the date of grant of such Purchase Right or
one year after the date of exercise of such Purchase Right. The Company may
direct that the certificates evidencing shares acquired by exercise of a
Purchase Right refer to such requirement to give prompt notice of disposition.

      20.    Designation of Beneficiary.

             20.1 Designation Procedure. A Participant may file a written
designation of a beneficiary who is to receive (a) shares and cash, if any, from
the Participant's Plan account if the Participant dies subsequent to a Purchase
Date but prior to delivery to the Participant of such shares and cash or (b)
cash, if any, from the Participant's Plan account if the Participant dies prior
to the exercise of the Participant's Purchase Right. If a married Participant
designates a beneficiary other than the Participant's spouse, the effectiveness
of such designation shall be subject to the consent of the Participant's spouse.
A Participant may change his or her beneficiary designation at any time by
written notice to the Company.

             20.2 Absence of Beneficiary Designation. If a Participant dies
without an effective designation pursuant to Section 20.1 of a beneficiary who
is living at the time of the Participant's death, the Company shall deliver any
shares or cash credited to the Participant's Plan account to the Participant's
legal representative.

      21.    Notices.

             All notices or other communications by a Participant to the Company
under or in connection with the Plan shall be deemed to have been duly given
when received in the form specified by the Company at the location, or by the
person, designated by the Company for the receipt thereof.

                                       15

<PAGE>

      22.    Amendment or Termination of the Plan.

             The Board may at any time amend or terminate the Plan, except that
(a) no such amendment or termination shall affect Purchase Rights previously
granted under the Plan unless expressly provided by the Board and (b) no such
amendment or termination may adversely affect a Purchase Right previously
granted under the Plan without the consent of the Participant, except to the
extent permitted by the Plan or as may be necessary to qualify the Plan as an
employee stock purchase plan pursuant to Section 423 of the Code or to comply
with any applicable law, regulation or rule. In addition, an amendment to the
Plan must be approved by the stockholders of the Company within twelve (12)
months of the adoption of such amendment if such amendment would authorize the
sale of more shares than are then authorized for issuance under the Plan or
would change the definition of the corporations that may be designated by the
Board as Participating Companies.

                                       16

<PAGE>

                                  PLAN HISTORY

______________, 2002          Board of Directors of Accredited Home Lenders,
                              Inc., a California corporation ("AHL California")
                              adopts the Plan, with an initial reserve of
                              1,000,000 shares. The Board also established that
                              the share reserve will be increased cumulatively
                              on each January 1 from January 1, 2003 through
                              January 1, 2012 by the lesser of (i) 5% of the
                              shares of common stock issued and outstanding on
                              the immediately preceding December 31, (ii)
                              500,000 shares, or (iii) such lesser number of
                              shares determined by the Board.

______________, 2002          Shareholders of AHL California approve Plan.

______________, 2002          Effective date of Delaware reincorporation of AHL
                              California.

______________, 2002          Effective Date of the Plan (i.e., date on which
                              Initial Offering Period commenced).


<PAGE>

                       ACCREDITED HOME LENDERS HOLDING CO.
                        2002 EMPLOYEE STOCK PURCHASE PLAN
                             SUBSCRIPTION AGREEMENT

NAME (Please print): ___________________________________________________________
                     (Last)                 (First)                     (Middle)

(TM)  Original application for the Offering Period beginning (date): ___________

(TM)  Stop payroll deductions effective with the pay period ending (date): ____

(TM)  Change of beneficiary.

I.    SUBSCRIPTION

      I elect to participate in the 2002 Employee Stock Purchase Plan (the
"Plan") of Accredited Home Lenders Holding Co. (the "Company") and to subscribe
to purchase shares of the Company's Common Stock in accordance with this
Subscription Agreement and the Plan.

      I authorize payroll deductions of __________ percent (in whole percentages
not less than 1%, unless an election to stop deductions is being made, or more
than 15%) of my "Compensation" on each payday throughout the "Offering Period"
in accordance with the Plan. I understand that these payroll deductions will be
accumulated for the purchase of shares of Common Stock at the applicable
purchase price determined in accordance with the Plan. Except as otherwise
provided by the Plan, I will automatically purchase shares on each "Purchase
Date" unless I withdraw from the Plan by giving written notice on a form
provided by the Company or unless my eligibility or employment terminates.

      I understand that I will automatically participate in each subsequent
Offering that commences immediately after the last day of an Offering in which I
am participating until I withdraw from the Plan by giving written notice on a
form provided by the Company or my eligibility or employment terminates.

      Shares I purchase under the Plan should be issued in the name(s) set forth
below. (Shares may be issued in the participant's name alone or together with
the participant's spouse as community property or in joint tenancy.)

      NAME(S) (please print): __________________________________________________

      ADDRESS: _________________________________________________________________

      MY SOCIAL SECURITY NUMBER: _______________________________________________

      I agree to make adequate provision for the federal, state, local and
foreign tax withholding obligations, if any, which arise upon my purchase of
shares under the Plan and/or my disposition of shares. The Company may withhold
from my compensation the amount necessary to meet such withholding obligations.

      I agree that, unless otherwise permitted by the Company, until I dispose
of shares I purchase under the Plan, I will hold such shares in the name(s)
entered above (and not in the name of any nominee) until the later of (i) two
years after the first day of the Offering Period in which I purchased the shares
and (ii) one year after the Purchase Date on which I purchased the shares. This
restriction only applies to the name(s) in which shares are held and does not
affect my ability to dispose of Plan shares.

      I agree that I will notify the Chief Financial Officer of the Company in
writing within 30 days after any sale, gift, transfer or other disposition of
any kind prior to the end of the periods referred to in the preceding paragraph
(a "Disqualifying Disposition") of any shares I purchased

                                       1

<PAGE>

under the Plan. If I do not respond within 30 days of the date of a
Disqualifying Disposition Survey delivered to me by certified mail, the Company
is authorized to treat my nonresponse as my notice to the Company of a
Disqualifying Disposition and to compute and report to the Internal Revenue
Service the ordinary income I must recognize upon such Disqualifying
Disposition.

II.   BENEFICIARY DESIGNATION

      In the event of my death, I designate the following as my beneficiary to
receive all payments and shares then due me under the Plan:

      BENEFICIARY'S NAME (please print): _______________________________________
                                         (First)         (Middle)         (Last)

      RELATIONSHIP: _____________________________        SOC. SEC. NO.: ________

      ADDRESS: _________________________________________________________________

      If you are married and your beneficiary is someone other than your spouse,
then your spouse must sign and date this form as indicated below. If you are not
married when you designate a beneficiary and you later become married, or if you
later become married to a different person, the beneficiary designation
previously made will be automatically revoked. Payments and shares then due you
upon your death will be delivered to your then spouse unless you have completed
a new beneficiary designation and it is consented to by your then spouse.

III.  CONSENT OF SPOUSE

      I am the spouse of . I consent to the above designation of a beneficiary
other than me to receive payments and shares due my spouse under the Plan.

Date: ________________________________        __________________________________
                                              Signature of Participant's Spouse

IV.   PARTICIPANT DECLARATION

      Any election I have made on this form revokes all prior elections with
regard to this form.

      I am familiar with the provisions of the Plan and agree to participate in
the Plan subject to all of its provisions. I understand that the Board of
Directors of the Company reserves the right to terminate the Plan or to amend
the Plan and my right to purchase stock under the Plan to the extent provided by
the Plan. I understand that the effectiveness of this Subscription Agreement is
dependent upon my eligibility to participate in the Plan.

Date: ________________________________        __________________________________
                                              Signature of Participant

                                       2

<PAGE>

                       ACCREDITED HOME LENDERS HOLDING CO.
                        2002 EMPLOYEE STOCK PURCHASE PLAN
                              NOTICE OF WITHDRAWAL

NAME (Please print): ___________________________________________________________
                     (Last)                  (First)                    (Middle)

      I elect to withdraw from the Accredited Home Lenders Holding Co. 2002
Employee Stock Purchase Plan (the "Plan") and the Offering which began on (date)
____________________ and in which I am participating (the "Current Offering").

                  I elect to terminate immediately my participation in the
                  Current Offering and the Plan. I request that the Company
                  cease all further payroll deductions under the Plan (provided
                  I have given sufficient notice before the next payday). My
                  payroll deductions not previously used to purchase shares
                  should not be used to purchase shares in the Current Offering.
                  Instead, I request that all such amounts be paid to me as soon
                  as practicable. I understand that this election immediately
                  terminates my interest in the Current Offering and in the
                  Plan.

      I understand that I am terminating my interest in the Plan and that no
further payroll deductions will be made (provided I have given sufficient notice
before the next payday), unless I elect to become a participant in another
Offering by filing a new Subscription Agreement with the Company. I understand
that I will receive no interest on the amounts paid to me from my Plan account,
and that I may not apply such amounts to any other Offering under the Plan or
any other employee stock purchase plan of the Company.

Date: ______________________________        Signature: _________________________