<PAGE>



      AMENDMENT NO. 1 TO THE POOLING AND SERVICING AGREEMENT, SERIES 2003-1

         THIS AMENDMENT NO. 1 TO THE POOLING AND SERVICING AGREEMENT, dated as
of October 31, 2003 ("Amendment No. 1") is entered into by and among Bear
Stearns Asset Backed Securities, Inc., a Delaware corporation (the "Depositor"),
American Business Credit, Inc., a Pennsylvania corporation (the "ABC"), EMC
Mortgage Corporation, a Delaware Corporation ("EMC") and JPMorgan Chase Bank, as
trustee (the "Trustee").

         WHEREAS, pursuant to the Pooling and Servicing Agreement, dated as of
March 1, 2003 (the "Servicing Agreement"), by and among the Depositor, ABC, as
the Servicer and the Trustee, as Trustee, Collateral Agent and Back-Up Servicer,
ABC agreed to service and administer the Mortgage Loans in accordance with
accepted servicing practices as provided therein;

         WHEREAS, ABC, the Depositor and the Trustee have agreed that they
mutually desire to provide for term servicing as provided for herein;

         WHEREAS, pursuant to the request of the Class A-1 Certificateholder,
ABC, the Depositor and the Trustee have agreed that EMC shall replace the
JPMorgan Chase Bank as Back-Up Servicer;

         WHEREAS, the Depositor, ABC and the Trustee desire to amend certain
provisions of the Servicing Agreement as set forth in this Amendment No. 1 in
accordance with Section 11.03(b) of the Servicing Agreement and the Certificate
Insurer and the Majority Certificateholders hereby consent to such amendments;

         WHEREAS, Bear Stearns & Co. Inc., as the Class A-1 Certificateholder,
is, as of the date hereof, the Majority Certificateholder;

         NOW, THEREFORE, in consideration of the mutual agreements contained
herein and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto, intending to
be legally bound hereby, agree as follows:

         1. Defined Terms. Any capitalized term used-herein and not defined
herein shall have the meanings assigned to such term in the Servicing Agreement.

         2. Replacement of Back-Up Servicer. JPMorgan Chase Bank is hereby
replaced by EMC as Back-Up Servicer under the Servicing Agreement.

         3. Amendment to Section 1.01. Section 1.01 of the Servicing Agreement
is amended as follows:

            A. The following definition shall be replaced in its entirety with
the following:

         "Back-Up Servicer: EMC Mortgage Corporation, a Delaware corporation, or
any of its successors in interest or any successor under this Agreement
appointed as herein provided."

<PAGE>


            B. The following definitions shall be added:

         "Servicing Extension Notice: As defined in Section 7.04(b).

         Servicing Period: As defined in Section 7.04(b).

         Servicing Transfer Costs: All reasonable costs and expenses incurred by
the Back-Up Servicer in connection with the transfer of servicing from the
Servicer, including, without limitation, any reasonable costs or expenses
associated with the complete transfer of all servicing data and the completion,
correction or manipulation of such servicing data as may be required by the
Back-Up Servicer to correct any errors or insufficiencies in the servicing data
which came to the attention of the Back-Up Servicer after the transfer of
servicing or otherwise to enable the Back-Up Servicer to service the Mortgage
Loans properly and effectively, costs of preparing any assignments of Mortgage,
or fees and costs of filing any assignments of Mortgage that may be required as
a result of the transfer of servicing."

         4. Amendments to Article III.

            A. Section 3.04. Section 3.04 of the Servicing Agreement shall be
amended by replacing "," with the word "and" on the first line thereof and by
deleting the words "and the Back-Up Servicer" on the second line thereof.

            B. The following Section 3.06 shall be added at the end of Article
III to the Servicing Agreement:

         "Section 3.06 Representations, Warranties and Covenants of the Back-Up
Servicer. The Back-Up Servicer hereby represents, warrants and covenants to the
Servicer, the Certificate Insurer, the Certificateholders, the Unaffiliated
Seller and the Depositor that as of the date hereof or as of a date specifically
provided herein:

               (a) It is duly organized, validly existing and in good standing
under the laws governing its formation and existence;

               (b) It has the corporate power and authority to execute, deliver
and perform, and to enter into and consummate transactions contemplated by this
Agreement;

               (c) Bear Stearns & Co. Inc., as the Class A-1 Certificateholder,
is, as of the date hereof, the Majority Certifcateholder;

               (d) This Agreement has been duly and validly authorized, executed
and delivered by it, all requisite corporate action have been taken, and,
assuming the due authorization, execution and delivery hereof by the other
parties hereto, constitutes or will constitute the legal, valid and binding
agreement of it, enforceable against it in accordance with its terms, except as
such enforcement may be limited by banhuptcy, insolvency, reorganization,
moratorium or other similar laws relating to or affected 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."

                                       2
<PAGE>

         5. Amendment to Section 6.05. Section 6.05 of the Servicing Agreement
is hereby amended as follows:

            A. Section 6.05(a)(iii) is deleted in its entirety and replaced
with, "third, to the Back-Up Servicer, the Back-Up Servicing Fee and any
Servicing Transfer Costs, in an amount not to exceed $200,000 in the aggregate
for any servicing transfer,"

            B. Section 6.05(a)(xi) is deleted in its entirety and replaced with
"(xi) eleventh, to the Back-Up Servicer, to the extent not paid pursuant to
clause (iii) above, any Servicing Transfer Costs and other amounts owing to the
Back-Up Servicer in connection with the transfer of servicing after the
resignation or removal of the Servicer and for any Nonrecoverable Advances made
by it."

         6. Amendments to Article VII.

            A. Section 7.02 of the Servicing Agreement is deleted in its
entirety and replaced with the following:

         "Section 7.02 Back-Up Servicer (a) From and after the date hereof and
until the Servicer is terminated pursuant to section 7.01 or Section 7.08, or
the Trustee receives the resignation of the Servicer evidenced by an Opinion of
Counsel pursuant to Section 5.21, the Back-Up Servicer shall act as Back-Up
Servicer with respect to the Mortgage Loans, and shall perform such functions,
duties, obligations, undertakings and responsibilities set forth herein. Prior
to such termination of the Servicer, the Back-Up Servicer shall have only those
duties and obligations imposed by it described in Section 7.02(b) below, and
shall have no obligations or duties under any agreement to which it is not a
party, including but not limited to the various agreements named herein. In its
capacity as Back-Up Servicer, it shall in no event be liable for any obligations
of the Servicer to any party, whether hereunder or under any other agreement,
which are not related to servicing functions, including, without limitation, any
repurchase obligations.

               (b) At such time as the Servicer receives a notice of termination
pursuant to Section 7.01 or the Servicer's term expires unrenewed pursuant to
Section 7.08, or the Trustee receives the resignation of the Servicer evidenced
by an Opinion of Counsel pursuant to Section 5.21, the Trustee shall promptly
notify the Rating Agencies and the Certificate Insurer and, except as otherwise
provided in Section 7.01, the Back-Up Servicer. On and after such time, the
Back-Up Servicer shall be the successor in all respects to the Servicer in its
capacity as servicer under this Agreement and the transactions set forth or
provided for herein and shall be subject to all the responsibilities, duties and
liabilities relating thereto placed on the Servicer by the terms and provisions
hereof arising on or after the date of succession; provided, however, that the
BackUp Servicer shall not be liable for any actions or omissions or the
representations and warranties of any prior servicer and including, without
limitation, the obligations of the Servicer set forth in Sections 2.06 and 3.03.
Without limiting the generality of the foregoing proviso, the Back-Up Servicer
shall not be liable for any losses or delays resulting from the failure of the
Servicer to take such actions as are necessary to effectuate the succession of
the Back-Up Servicer hereunder. Notwithstanding its prior termination, the
Servicer shall continue servicing until such time as the succession to the
Back-Up Servicer or other successor is complete.


                                       3
<PAGE>


               (c) Notwithstanding the above, the Trustee shall, if the Back-Up
Servicer is unable to so act or if the Certificate Insurer so requests in
writing to the Trustee, appoint, pursuant to such direction of the Certificate
Insurer, or if no such direction is provided to the Trustee, pursuant to the
provisions set forth in paragraph (d) below, or petition a court of competent
jurisdiction to appoint, any established mortgage loan servicing institution
acceptable to the Certificate Insurer that has a net worth of not less than
$15,000,000 as the successor to the Servicer hereunder in the assumption of all
or any part of the responsibilities, duties or liabilities of the Servicer
hereunder.

               (d) The Back-Up Servicer, as compensation for its obligations and
duties as Back-Up Servicer hereunder, shall be paid the Back-Up Servicing Fee on
each Distribution Date. In the event the Back-Up Servicer is the successor
servicer, it shall be entitled to the same Servicing Compensation (including the
Servicing Fee as adjusted pursuant to the definition thereof) and other funds
pursuant to Section 5.08 hereof as the Servicer if the Servicer had continued to
act as servicer hereunder; it being understood that, in such event, the Back-Up
Servicer would no longer be entitled to the Back-Up Servicing Fee. In the event
the Back-Up Servicer is unable to act as successor servicer, and a successor
servicer is not appointed by the Certificate insurer, the Trustee shall solicit,
by public announcement, bids from housing and home finance institutions, banks
and mortgage servicing institutions meeting the qualifications set forth above
and acceptable to the Certificate Insurer. Such public announcement shall
specify that the successor servicer shall be entitled to the full amount of the
aggregate Servicing Fees hereunder as servicing compensation, together with the
other Servicing Compensation. The Trustee shall negotiate and effect the sale,
transfer and assignment of the servicing rights and responsibilities hereunder
to the qualified party submitting the highest qualifying bid. The Trustee shall
deduct from any sum received by the Trustee from the successor to the Servicer
in respect of such sale, transfer and assignment all costs and expenses of any
public announcement and of any sale, transfer and assignment of the servicing
rights and responsibilities hereunder and the amount of any unreimbursed
Servicing Advances and Periodic Advances owed to the Servicer. Alter such
deductions, the remainder of such sum shall be paid by the Trustee to the
Servicer at the tine of such sale, transfer and assignment to the Servicer's
successor.

               (e) The Trustee and such successor servicer (including, without
limitation, the Back-Up Servicer) shall take such action, consistent with this
Agreement, as shall be necessary to effectuate any such succession. The Servicer
agrees to deliver promptly to such successor, electronically or physically, as
the case may be, all files, data and funds related to the Mortgage Loans, of the
types provided for in the Mortgage Loan Servicing Purchase and Sale Agreement,
dated as of October 16, 2003, by and among EMC Mortgage Corporation, American
Business Credit, Inc., ABFS Mortgage Loan Warehouse Trust 2000-2 and American
Business Financial Services, Inc. The Servicer agrees to cooperate with the
Trustee and any successor servicer in effecting the termination of the
Servicer's servicing responsibilities and rights hereunder and shall promptly
provide the Trustee or such successor servicer, as applicable, at the servicer's
cost and expense, all documents and records reasonably requested by it to enable
it to assume the Servicer's functions hereunder and shall promptly also transfer
to the Trustee or such successor servicer, as applicable, all amounts that then
have been or should have been deposited in the Collection Account by the
Servicer or that are thereafter received with respect to the Mortgage Loans. Any
collections received by the Servicer after such removal or resignation shall be


                                       4

<PAGE>

endorsed by it to the Trustee and remitted directly to the Trustee or, at the
direction of the Trustee, to the successor servicer. In connection with any
failure by the Servicer to make any remittance required to be made by the
Servicer to the Collection Account pursuant to this Section 7.02 on the day and
by the time such remittance is required to be made under the terms of this
Section 7.02 (without giving effect to any grace or cure period), the Servicer
shall pay to the Trustee for the account of the Trustee interest at the Late
Payment Rate on any amount not timely remitted from and including the day such
remittance was required to be made to, but not including, the day on which such
remittance was actually made. Neither the Trustee nor any successor servicer
shall be held liable by reason of any failure to make, or any delay in making,
any distribution hereunder or any portion thereof caused by (i) the failure of
the Servicer to deliver, or any delay in delivering, cash, documents, files,
data or records to it, or (ii) restrictions imposed by any regulatory authority
having jurisdiction over the Servicer hereunder. Notwithstanding anything to the
contrary herein, no appointment of a successor to the Servicer under this
Agreement shall be effective until written notice, at the written direction of
the Certificate Insurer, of such proposed appointment shall have been provided
by the Trustee to each Certificateholder provided, that for a successor servicer
other than the Back-Up Servicer, the Certificate Insurer shall have consented in
writing thereto. The Back-Up Servicer shall not resign as servicer until a
successor servicer has been appointed or until a successor servicer has been
appointed in accordance with paragraph (d) above. The Certificate Insurer shall
have the right to remove the Back-Up Servicer (or any successor Servicer) as
successor Servicer under this Section 7.02 without cause, and the Trustee shall
appoint such other successor Servicer as directed in writing by the Certificate
Insurer.

               (f) Pending appointment of a successor to the Servicer hereunder,
the BackUp Servicer shall act in such capacity as hereinabove provided. In
connection with the appointment and assumption of a successor to the Back-Up
Servicer as Servicer, the Certificate Insurer may make such arrangements for the
compensation of such successor out of payments on Mortgage Loans as the
Certificate Insurer and such successor shall agree; provided, however, that
unless otherwise agreed by the Certificate Insurer, no such compensation shall
be in excess of that permitted the Servicer pursuant to Section 5.08, together
with other Servicing Compensation. The Servicer, the Back-Up Servicer, the
Trustee and such successor shall take such action, consistent with this
Agreement, as shall be necessary to effectuate any such succession.

            B. The following Section 7.08 shall be added at the end of Article
VII of the Servicing Agreement:

         "Section 7.08. Term Servicing. (a) Notwithstanding anything to the
contrary herein, at the direction of the Certificate Insurer, the Trustee
designates ABC as the Servicer of the Mortgage Loans under this Agreement for a
term of ninety (90) days, commencing on October 31, 2003. The Trustee, at the
direction of the Certificate Insurer, hereby retains ABC to perform all duties
and obligations of the Servicer with respect to the Mortgage Loans under this
Agreement, in accordance with the terms hereof, all applicable laws and
regulations, and the terms of all related documents pursuant to which ABC has
acted prior to the date hereof. ABC hereby assumes the due and punctual
performance and observance of each covenant and condition to be performed or
observed by the Servicer with respect to the Mortgage Loans under this
Agreement.

                                       5
<PAGE>


               (b) The Certificate Insurer may, in its sole discretion, send or
direct the Trustee in writing, to send a written notice (each such notice, a
"Servicer Extension Notice"), in the form of Exhibit U hereto, to ABC and the
Trustee, extending any such term for one or more terns of one (90) day period,
or such longer terms as may be specified therein by the Certificate Insurer
(each, a "Servicing Period"). Any Servicer Extension Notice shall be delivered
to such parties no later than ten (10) Business Days prior to the expiration of
the existing Servicing Period; provided, further, that any such Servicer
Extension Notice that extends the terms under this Agreement is revocable by the
Certificate Insurer, in its sole discretion, upon the occurrence of an Event of
Default. The Servicer hereby agrees that, as of the date hereof and upon its
receipt of any such Servicer Extension Notice prior to the expiration of the
existing Servicing Period, the Servicer shall be bound for the duration of the
initial term and each successive term covered by such Servicer Extension Notice
to act as the Servicer of the Mortgage Loans hereunder, unless the Servicer is
otherwise terminated in accordance with Section 7.01 hereof. If a Servicer
Extension Notice is delivered after the expiration of the existing Servicing
Period, the Trustee, the Certificate Insurer and the Servicer may agree that the
Servicer shall be bound for the Servicing Period covered by such Servicer
Extension Notice to act as the Servicer of the Mortgage Loans hereunder, unless
the Servicer is otherwise terminated in accordance with Section 7.01 hereof.
Unless a Servicer Extension Notice is sent, all of the Servicer's rights and
obligations hereunder and under the Servicing Agreement and with respect to the
Mortgage Loans shall expire.

               (c) In the event the Trustee has not received a Servicer
Extension Notice from the Certificate Insurer on or before the ten (10) Business
Days prior to the expiration of the existing Servicing Period, then the Trustee
may notify the Certificate Insurer to that effect and inquire as to whether the
Certificate Insurer will send or direct the Trustee to send a Servicer Extension
Notice.

               (d) Notwithstanding anything to the contrary herein, this Section
7.04 shall only apply to ABC as Servicer and not to the Back-Up Servicer or any
successor servicer.

         7. Amendment to Section 11.03. Section 11.03 of the Servicing Agreement
shall be amended by (a) adding the words ", the Back-Up Servicer" after the
words "the Depositor" in the second line of subsection (a) and in the second
line of subsection (b) thereof.

         8. Amendment to Section 11.06. Section 11.06 of the Servicing Agreement
shall be amended by deleting the words "and Back-Up Servicer" in (iii) thereto
and by adding the following at the end of the second to last sentence thereof:
(x) in the case of the Back-Up Servicer, EMC Mortgage Corporation, 909 Hidden
Ridge, Irving, Texas 75038, Attn: Ralene Ruyle, Telecopy No.: (972) 444-2880.

         9. Any amendments to this Amendment No. 1 or the Servicing Agreement
shall be in writing and executed by each party hereto.

         10. Each party represents as to itself that it has duly and validly
executed and delivered this Amendment No. 1 and that, assuming this Amendment
No. 1 has been duly and validly executed and delivered by the other party
hereto, this Amendment No. 1 constitutes the legal, valid and binding obligation
of such party, enforceable against it in accordance with its terms, except as



                                       6
<PAGE>


enforcement may be limited by bankruptcy, insolvency, moratorium or other
similar laws relating to creditors rights generally and by general equitable
principles (regardless of whether such enforceability is considered in a
proceeding in equity or at law).

         11. Except as modified herein, each of the parties hereto acknowledges
and agrees that it continues to be bound by each of the terms and provisions of
the Servicing Agreement, which terms and provisions, as amended hereby, shall
continue in full force and effect

         12. If one or more of the provisions, agreements or terms of this
Amendment No. 1 shall be for any reason whatsoever held invalid, then such
provisions, agreements or terms shall be deemed severable from the remaining
provisions, agreements or terms of this Amendment No. 1 and shall in no way
affect the validity or enforceability of the other provisions of this Amendment
No. 1, the Servicing Agreement, or the rights of the parties hereto or thereto.

         13. This Amendment No. 1 may be executed in one or more counterparts,
all of which shall be considered one and the same agreement, and shall become
effective when one or more counterparts have been signed by each of the parties
and delivered to the other parties, it being understood that both parties need
not sign the same counterpart.

         14. This Amendment No. 1 shall be governed by and construed in
accordance with the laws of the State of New York.



         [The remainder of this page has been intentionally left blank]



                                       7

<PAGE>



         IN WITNESS WHEREOF, each of the parties has caused this Amendment No. 1
to be duly executed on its behalf as of the day and year first above written.



                                            BEAR STEARNS ASSET BACKED
                                            SECURITIES, INC., as Depositor


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


                                            AMERICAN BUSINESS CREDIT, INC., as
                                            Servicer


                                            By: /s/ Beverly Santilli
                                                --------------------------------
                                                Name: Beverly Santilli
                                                Title: President


                                            JPMORGAN CHASE BANK, as Trustee and
                                            Collateral Agent


                                            By: /s/ Joseph M. Costantino
                                                --------------------------------
                                                Name: Joseph M. Costantino
                                                Title: Trust Officer


                                            EMC MORTGAGE CORPORATION, as Back-
                                            Up Servicer


                                            By: /s/ Sue Stepanek
                                                --------------------------------
                                                Name: Sue Stepanek
                                                Title: Executive Vice President




      [Signature Page to Amendment 2003-1 Pooling and Servicing Agreement]



<PAGE>


         The Certificateholders named below hereby consent to this Amendment No.
1 to the Pooling and Servicing Agreement.


                                            BEAR STEARNS & CO. INC.
                                            as Class A-1 Certificateholder


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


                                            RADIAN ASSET ASSURANCE INC.,
                                            as Certificate Insurer


                                            By: /s/ Bret S. Derman
                                                --------------------------------
                                                Name: Bret S. Derman
                                                Title: Senior Vice President










      [Signature Page to Amendment 2003-1 Pooling and Servicing Agreement]



<PAGE>

                                                                      Exhibit U

                       [FORM OF SERVICER EXTENSION NOTICE]



American Business Credit, Inc.
c/o American Business Financial Services, Inc.
The Wanamaker Building
100 Penn Square East, 8th Floor
Philadelphia, Pennsylvania 19107
Attn:    General Counsel

[Date]


RE: Pooling and Servicing Agreement, dated as of March 1, 2003, as amended
    ----------------------------------------------------------------------

         Reference is made to Pooling and Servicing Agreement, dated as of March
1, 2003, as amended, by and among Bear Steams Asset Backed Securities, Inc., as
Depositor American Business Credit, Inc., as the Servicer, JPMorgan Chase Bank,
as Trustee and Collateral Agent and EMC Mortgage Corporation, as Back-Up
Servicer (the "Agreement"). Pursuant to Section 7.04(b) of the Agreement, we
hereby notify you of the extension of the Servicing Period for ___ term(s).


                                            RADIAN ASSET ASSURANCE INC.,
                                            as Certificate Insurer


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