<PAGE>

                                                                     EXHIBIT 4.2











































<PAGE>


                                                                     EXHIBIT 4.2
                                                                     -----------

                                                                   EXECUTED COPY
                                                                   -------------



                   BEAR STEARNS ASSET BACKED SECURITIES, INC.
                                   Depositor,




                               ABFS 2001-4, 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 December 1, 2001

<PAGE>


                                TABLE OF CONTENTS
<TABLE>
<CAPTION>
                                                                                                               Page
<S>                <C>                                                                                         <C>
                                                ARTICLE I

                                               DEFINITIONS

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

                                                ARTICLE II

                             PURCHASE, SALE AND CONVEYANCE OF MORTGAGE LOANS

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

                                               ARTICLE III

                                      REPRESENTATIONS AND WARRANTIES

Section 3.01.     Representations and Warranties as to the Originators............................................7
Section 3.02.     Representations and Warranties as to the Unaffiliated Seller....................................9
Section 3.03.     Representations and Warranties Relating to the Mortgage Loans and Warrants.....................11
Section 3.04.     Representations and Warranties of the Depositor................................................20
Section 3.05.     Repurchase Obligation for Defective Documentation and for Breach of a Representation
                      or Warranty................................................................................20
Section 3.06.     Limited Purpose and Corporate Separateness of the Unaffiliated Seller..........................23

                                                ARTICLE IV

                                         THE UNAFFILIATED SELLER

Section 4.01.     Covenants of the Originators and the Unaffiliated Seller.......................................25
Section 4.02.     Merger or Consolidation........................................................................25
Section 4.03.     Costs..........................................................................................25
Section 4.04.     Indemnification................................................................................26
</TABLE>







                                        i
<PAGE>
<TABLE>
<CAPTION>
<S>               <C>                                                                                           <C>

                                                ARTICLE V

                                          CONDITIONS OF CLOSING

Section 5.01.     Conditions of Depositor's Obligations..........................................................28
Section 5.02.     Conditions of Unaffiliated Seller's Obligations................................................30
Section 5.03.     Termination of Depositor's Obligations.........................................................30

                                                ARTICLE VI

                                              MISCELLANEOUS

Section 6.01.     Notices........................................................................................31
Section 6.02.     Severability of Provisions.....................................................................31
Section 6.03.     Agreement of Unaffiliated Seller...............................................................31
Section 6.04.     Survival.......................................................................................31
Section 6.05.     Effect of Headings and Table of Contents.......................................................31
Section 6.06.     Successors and Assigns.........................................................................31
Section 6.07.     Confirmation of Intent; Grant of Security Interest.............................................32
Section 6.08.     Miscellaneous..................................................................................32
Section 6.09.     Amendments.....................................................................................32
Section 6.10.     Third-Party Beneficiaries......................................................................33
Section 6.11.     GOVERNING LAW; CONSENT TO JURISDICTION; WAIVER OF JURY TRIAL...................................33
Section 6.12.     Execution in Counterparts......................................................................34
</TABLE>

Exhibit A - Mortgage Loan Schedule










                                       ii
<PAGE>

                  THIS UNAFFILIATED SELLER'S AGREEMENT, dated as of December 1,
2001, by and among BEAR STEARNS ASSET BACKED SECURITIES, INC., a Delaware
corporation, its successors and assigns (the "Depositor"), ABFS 2001-4, 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
2001-4, a Delaware statutory trust (the "Trust") pursuant to a Sale and
Servicing Agreement to be dated as of December 1, 2001 (the "Sale and Servicing
Agreement"), to be entered into by and among the Depositor, as depositor, the
Trust, American Business Credit, Inc., as servicer (in such capacity, the
"Servicer") and JPMorgan Chase Bank, as trustee and collateral agent (in each
such capacity, as applicable, the "Indenture Trustee" and the "Collateral
Agent") and (b) the Trust shall issue its Mortgage Backed Notes (the "Notes")
pursuant to an Indenture, dated as of December 1, 2001 (the "Indenture"), by and
between the Trust and the Indenture Trustee, which Notes will be secured by a
pledge of the assets of the Trust;

                  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 December 3, 2001
relating to the offering by the Depositor from time to time of its
Mortgage-Backed Notes (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 Notes.

                  "Prospectus Supplement" means the Prospectus Supplement dated
December 3, 2001, relating to the offering of the Notes 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 Notes.

                  "Registration Statement" means that certain registration
statement on Form S-3, as amended (Registration No. 333-56242) relating to the
offering by the Depositor from time to time of its Mortgage-Backed Notes
(Issuable in Series) as heretofore declared effective by the Commission.




                                        1
<PAGE>

                  "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 Notes, 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 Note 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 Notes; (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 Notes on the terms and
in the manner contemplated in the Prospectus Supplement.

                  "Unaffiliated Seller" means ABFS 2001-4, 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 Appendix I to the
Indenture.

                                   ARTICLE II

                 PURCHASE, SALE AND CONVEYANCE OF MORTGAGE LOANS

                  Section 2.01. Agreement to Purchase the 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 Cut-Off Date 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 Appendix I to the
Indenture.




                                        2

<PAGE>

                  (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 December 20, 2001 or such other place and
time as the parties shall agree (such time being herein referred to as the
"Closing Date").

                  Section 2.02. [Reserved].

                  Section 2.03. Purchase Price.

                  (a) On the Closing Date, as consideration for the Originators'
sale of the Mortgage Loans to the Unaffiliated Seller, the Unaffiliated Seller
will deliver to the Originators an amount in cash equal to the sum of (A)
99.73399% of the aggregate principal balance as of the Closing Date of the Class
A Notes and (B) accrued interest on such principal balance at the rate of 5.35%
per annum, on the Class A Notes from (and including) December 1, 2001 to (but
not including) December 20, 2001, payable by wire transfer of same day funds.

                  On the Closing Date, as consideration for the Unaffiliated
Seller's sale of the Mortgage Loans to the Depositor, the Depositor will deliver
to the Unaffiliated Seller (i) an amount in cash equal to the sum of (A)
99.73399% of the aggregate principal balance as of the Closing Date of the Class
A Notes and (B) accrued interest on such principal balance at the rate of 5.35%
per annum, on the Class A Notes from (and including) December 1, 2001 to (but
not including) December 20, 2001, payable by wire transfer of same day funds
pursuant to the Sale and Servicing Agreement.

                  The consideration described in this Section 2.03 collectively
represents (i) full consideration for the Originators' sale of the Mortgage
Loans to the Unaffiliated Seller and (ii) full consideration for the
Unaffiliated Seller's sale of the 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 Mortgage Loans sold by
each.

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

                  (a) On the Closing 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 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 Cut-Off Date 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 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 Cut-Off Date. 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 Cut-Off Date.



                                        3
<PAGE>

                  (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 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 Sale and Servicing Agreement, the
Depositor shall, on the Closing Date, assign all of its right, title and
interest in and to the applicable Mortgage Loans, the related Insurance Policies
and any proceeds thereof and all of its rights under this Agreement to the
Trust. Pursuant to the Indenture, the Trust shall, on the Closing Date, pledge
all of its rights, title and interest in and to the Mortgage Loans to the
Indenture Trustee for the benefit of the Noteholders and the Note Insurer.

                  Section 2.05. Delivery of Mortgage Loan Documents.

                  (a) On or prior to the Closing Date 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
Indenture Trustee (as pledgee of the Trust pursuant to the Indenture, the Trust
being the assignee of the Depositor pursuant to the Sale and Servicing
Agreement), each of the documents described in clauses (i) through (vi) of
Section 2.05(a) of the Sale and Servicing Agreement for each applicable Mortgage
Loan in accordance with the provisions of Section 2.05 of the Sale and Servicing
Agreement.

                  (b) Pursuant to the Sale and Servicing Agreement, the
Unaffiliated Seller shall 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 Sale and Servicing Agreement. The Collateral Agent, on behalf of the
Indenture 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 Indenture Trustee (as
pledgee of the Trust pursuant to the Indenture, the Trust being the assignee of
the Depositor pursuant to the Sale 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 Indenture Trustee (pursuant to the Sale and
Servicing Agreement); (ii) the original recorded assignment of Mortgage from the
related Originator to the Indenture Trustee (pursuant to the Sale 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 Indenture Trustee in those instances where copies of such
assignments certified by the related Originator were delivered to the Collateral
Agent, on behalf of the Indenture Trustee, (pursuant to Section 2.05 of the Sale
and Servicing Agreement); and (iii) the title insurance policy or title opinion
required in Section 2.05(a)(vi) of the Sale and Servicing Agreement.




                                        4
<PAGE>

                  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 Indenture Trustee (pursuant to the Sale 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 Indenture Trustee (pursuant to the Sale 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 Indenture Trustee
(pursuant to the Sale 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 in trust for the benefit of the Indenture Trustee on behalf
of the Noteholders and the Note 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
an Indenture Trustee Mortgage File, such document shall be delivered promptly to
the Collateral Agent, on behalf of the Indenture Trustee (as assignee of the
Depositor pursuant to the Sale 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 Indenture Trustee
(as assignee of the Depositor pursuant to the Sale and Servicing Agreement),
such title shall be retained in trust for the Trust as the owner of the Mortgage
Loans and as the Depositor's assignee and the Indenture Trustee, as Trust's
pledgee.

                  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 Indenture 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 Sale and Servicing Agreement.

                  (b) Pursuant to the Sale and Servicing Agreement, the
Collateral Agent has agreed to execute and deliver on or prior to the Closing
Date an acknowledgment of receipt of each Mortgage Loan, the original Mortgage
Note with respect to each Mortgage Loan (with any exceptions noted), in the form
attached as Exhibit C to the Sale and Servicing Agreement and declares that it
will hold such documents and any amendments, replacements or supplements
thereto, as well as any other assets included in the definition of Trust Estate
in the Sale and Servicing Agreement and delivered to the Collateral Agent, on
behalf of the Indenture Trustee in trust upon and subject to the conditions set
forth in the Sale and Servicing Agreement for the benefit of the Noteholders and
the Note Insurer. Pursuant to the Sale and Servicing Agreement, the Collateral
Agent, on behalf of the Indenture Trustee has agreed, for the benefit of the
Noteholders and the Note Insurer, to review (or cause to be reviewed) each
Indenture Trustee's Mortgage File within thirty (30) days after the Closing Date
(or, with respect to any Qualified Substitute Mortgage Loan, within 30 days
after the receipt by the Collateral Agent, on behalf of the Indenture Trustee
thereof), and to deliver to the Unaffiliated Seller, the Servicer and the Note
Insurer a certification in the form attached to the Sale and Servicing Agreement
as Exhibit D 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
Sale 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
Indenture Trustee's Mortgage File delivered on such date. Pursuant to the Sale
and Servicing Agreement, the Collateral Agent, on behalf of the Indenture
Trustee, shall be under no duty or obligation to inspect, review or examine any
such documents, instruments, certificates or 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 Sale
and Servicing Agreement, within ninety (90) days of the Closing Date, with
respect to the Mortgage Loans, the Collateral Agent, on behalf of the Indenture
Trustee, shall be required to deliver (or cause to be delivered) to the
Servicer, the Unaffiliated Seller and the Note Insurer a final certification in
the form attached to the Sale and Servicing Agreement as Exhibit E 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 Sale 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 Indenture Trustee's Mortgage File
delivered on such date.



                                        5
<PAGE>

                  (c) The Sale and Servicing Agreement provides that, if the
Collateral Agent during the process of reviewing the Indenture Trustee's
Mortgage Files finds any document required to be delivered to it and
constituting a part of an Indenture 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 Servicer, the Indenture Trustee,
the Unaffiliated Seller, the related Originator and the Note Insurer. 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 Indenture
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 Noteholders in the related Mortgage Loan
or the interests of the Note 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 Collateral Agent, the Indenture Trustee
or the Note Insurer 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 Indenture Trustee for the benefit of the Trust as may be required to
effect the purposes of the Sale and Servicing Agreement, without further notice
to, or consent of, the Unaffiliated Seller or the Originators, and the Indenture
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 Sale 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 Trust, and the Trust
shall, pursuant to the Indenture pledge such right, title and interest to the
Indenture Trustee for the benefit of the Noteholders and the Note Insurer. Each
of the Originators and the Unaffiliated Seller agrees that, upon such assignment
to the Trust and pledge to the Indenture Trustee, such representations,
warranties, agreements and covenants will run to and be for the benefit of the
Indenture Trustee and the Indenture Trustee may enforce, without joinder of the
Depositor or the Trust, the repurchase obligations of the Unaffiliated Seller
and the Originators set forth herein with respect to breaches of such
representations, warranties, agreements and covenants.






                                        6
<PAGE>

                  Section 2.08. Examination of Mortgage Files. Prior to the
Closing Date, 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. If the Depositor or its designee makes such
examination prior to the Closing Date 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, 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 Indenture 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 Indenture 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 Indenture Trustee
for the benefit of the Noteholders and the Note 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.

                                   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) the Commonwealth of
Pennsylvania (with respect to ABC and Upland) 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;





                                        7
<PAGE>

                  (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 Indenture Trustee (or the Servicer as the agent of the
Indenture 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 information under the caption "Plan of
Distribution") 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
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;





                                        8
<PAGE>

                  (g) Upon the receipt of each Indenture 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 Estate to each related
Mortgage Loan and such other items comprising the corpus of the Trust Estate
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;

                  (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 Trust and the Indenture 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;





                                        9
<PAGE>

                  (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
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 Indenture
Trustee (or the Servicer as the agent of the Indenture 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 information under the caption "Plan of
Distribution") 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;





                                       10
<PAGE>

                  (g) Upon the receipt of each Indenture 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 Estate to each related
Mortgage Loan and such other items comprising the corpus of the Trust Estate
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;

                  (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 Trust and the Indenture 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 and Warrants. The Originators represent and warrant to the
Unaffiliated Seller and the Unaffiliated Seller represents and warrants to the
Depositor that, as of the Closing Date, as to each 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 Collateral Agent, the Indenture
Trustee and the Note Insurer 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;





                                       11
<PAGE>

                  (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 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 Cut-Off Date, no Mortgage Loan has a Mortgage
Interest Rate less than 7.990% per annum and the weighted average Mortgage
Interest Rate of the Mortgage Loans is 11.23%;

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

                  (h) As of the Cut-Off Date, the weighted average remaining
term to maturity of the Mortgage Loans is 257 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
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;





                                       12
<PAGE>

                  (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 Indenture 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 Cut-Off Date is
approximately 76.69%;

                  (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 Cut-Off Date are secured by Mortgaged
Properties located in the following states:

                                 Mortgage Loan Group
             -------------------------------------------------------------
                                                       Percent of
                 State                              Principal Balance
             ----------------------------       --------------------------

             ----------------------------       --------------------------
             New York                                    26.89%
             New Jersey                                  10.59
             Florida                                      7.57
             Massachusetts                                7.52
             Pennsylvania                                 7.07
             Michigan                                     6.38
             Illinois                                     6.15
             Ohio                                         4.41
             Georgia                                      3.38
             North Carolina                               2.62
             Indiana                                      2.38
             Virginia                                     2.14
             Other                                       12.91
             Total                              -------------------------
                                                           100%
                                                =========================

                  (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 Estate on any
basis adverse to the Trust Estate 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;





                                       13
<PAGE>

                  (t) Each Mortgage 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 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 Mortgage Loan Schedule. The Principal Balance as of the Cut-Off Date does
not exceed the original principal amount of such Mortgage Loan. Except with
respect to no more than $150,000 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
Indenture Trustee and which has been delivered to the Collateral Agent, on
behalf of the Indenture Trustee. The substance of any such alteration or
modification will be reflected on the Mortgage Loan Schedule and, to the extent
necessary, has been or will be approved by (i) the insurer under the applicable
mortgage title 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 Indenture Trustee, and the terms of which are
reflected in the 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;





                                       14
<PAGE>

                  (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 underwriters 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;

                  (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) to 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 Indenture Trustee for the benefit of the
Noteholders and the Note 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 Indenture Trustee, pursuant to Section 2.05(a)(iv) of the Sale 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 Indenture 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 Indenture
Trustee, for recording are sufficient to permit the Indenture 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 Indenture Trustee shall have a first priority perfected security
interest in the Mortgage Loans;





                                       15
<PAGE>


                  (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 laws applicable to such Mortgage Loan have been complied with, and
the Servicer shall maintain in its possession, available for the Indenture
Trustee's inspection, and shall deliver to the Indenture 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 Indenture 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 Indenture 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 Indenture 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;






                                       16
<PAGE>

                  (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 Indenture Trustee or the
Noteholders 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
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 dwelling, 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 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, 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 Cut-Off Date, the Mortgagors with
respect to at least 91.74% 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;





                                       17
<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 11.99% (by Principal Balance) of the
         Mortgage Loans are secured by Mortgages that are second liens.

                  (tt) [Reserved]

                  (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 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;





                                       18
<PAGE>

                  (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 Unaffiliated Seller's knowledge, none
of the Mortgage Loans are Section 32 loans subject to the Home Ownership and
Equity Protection Act;

                  (yy) Except for 1.22% (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 9.27% (by Principal Balance) of the Mortgage
Loans are loans the proceeds of which are to be used for business purposes;

                  (aaa) At least 91.74% (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 578, not more than 8.06% (by Principal Balance)
of the Mortgage Loans have FICO or similar scoring result scores that are less
than 500 and at least 99.13% (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 76.69% and no more than 0.00% (by Principal
Balance) of the Mortgage Loans have a CLTV greater than 100.00%;

                  (ddd) No more than 11.40% (by Principal Balance) of the
Mortgage Loans are made to limited or no documentation borrowers;

                  (eee) No more than 5.06% (by Principal Balance) of the
Mortgage Loans have been originated by a party other than an Originator;

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

                  (ggg) No more than 38.31% (by Principal Balance ) of the
Mortgage Loans consist of balloon Mortgage Loans that mature within 10 years of
the date of origination;

                  (hhh) No Mortgage Loan has a Principal Balance greater than
$500,000;

                  (iii) At least 76.22% (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; and

                  (jjj) No more than 1.55% (by Principal Balance) of the
Mortgage Loans are secured by manufactured homes.





                                       19
<PAGE>

                  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

                  (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 Trust
and the subsequent pledge thereof by the Trust to the Indenture Trustee, for the
benefit of the Noteholders and the Note 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 Sale and Servicing Agreement or the Indenture.




                                       20
<PAGE>

                  (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 Servicer, the
Collateral Agent, any Subservicer, the Indenture Trustee, the Note Insurer or
any Noteholder that the substance of such representation and warranty was
inaccurate as of the Closing Date 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 Unaffiliated Seller, the Collateral Agent, the
Servicer, any Subservicer, the Indenture Trustee, the Note Insurer or any
Noteholder 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 Noteholders, or which materially and adversely affects the interests of the
Note Insurer or the Noteholders 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 Sale 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 a
purchase price equal to the Principal Balance of such Mortgage Loan as of the
date of purchase, plus the greater of (i) all accrued and unpaid interest on
such Principal Balance and (ii) thirty (30) days' interest on such Principal
Balance, computed at the Mortgage Interest Rate, net of the Servicing Fee if the
Unaffiliated Seller is the Servicer, plus the amount of any unreimbursed
Servicing Advances made by the Servicer with respect to such Mortgage Loan, or
(c) remove such Mortgage Loan from the Trust Estate (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
Indenture Trustee and the Note 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
Sale 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 Indenture Trustee and the Note Insurer a certification in
the form attached to the Sale and Servicing Agreement as Exhibit F, 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 Sale and Servicing
Agreement, upon receipt by the Indenture 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 Indenture Trustee, of the related Indenture Trustee's Mortgage File, and the
deposit of certain amounts in the Distribution Account pursuant to Section
2.06(c) of the Sale and Servicing Agreement (which certification shall be in the
form of Exhibit F to the Sale and Servicing Agreement), the Collateral Agent, on
behalf of the Indenture Trustee shall be required to release to the Servicer for
release to the Unaffiliated Seller the related Indenture 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.






                                       21
<PAGE>

                  (d) Pursuant to the Sale 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 Estate 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 Sale and Servicing Agreement, the Servicer shall
be required to give written notice to the Indenture Trustee, the Collateral
Agent and the Note Insurer 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 Sale 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 Sale 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
substitution, the Unaffiliated Seller will remit to the Servicer and pursuant to
the Sale 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 8.01 of the Indenture
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) 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 Indenture Trustee, the Note Insurer and the Noteholders
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 Indenture Trustee for all amounts
payable in respect of such Mortgage Loan.

                  (h) Pursuant to the Sale and Servicing Agreement, upon
discovery by the Unaffiliated Seller, the Servicer, the Indenture Trustee, the
Note Insurer or any Noteholder that any Mortgage Loan does not satisfy the
requirements of Sections 3.02 and 3.03 hereof, the party discovering 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 Indenture 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 Sale and
Servicing Agreement the Indenture 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.





                                       22
<PAGE>

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

                  (j) 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 Sale and Servicing Agreement.

                  (k) The Unaffiliated Seller and the Originators hereby agree,
jointly and severally, to indemnify the Indenture Trustee, the Depositor, the
Noteholders and the Note Insurer 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
Indenture 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 Indenture
Trustee, the Depositor, the Servicer, the Noteholders and the Note Insurer 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 incurrence of
         obligations under this Agreement and the Insurance 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 Note Insurer;

                      (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 of repurchase of the related
         Mortgage Loans by the Originators; (iii) to enter into and perform its
         obligations under this Agreement and the Insurance Agreement and (iv)
         to engage in those activities that are necessary, suitable of
         convenient to accomplish the foregoing or are incidental thereto or
         connected therewith;





                                       23
<PAGE>

                      (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 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.

                  (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;






                                       24
<PAGE>

                      (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 Notes 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.

         (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 Indenture Trustee, and the rating, issuance
and sale of the Notes.

         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 and the Unaffiliated Seller 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 and the
Unaffiliated Seller, shall be approved by the Note Insurer which approval shall
not be unreasonably withheld. If the approval of the Note Insurer is not
required, 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
Indenture Trustee and the Note Insurer.





                                       25
<PAGE>

         Section 4.03. Costs. In connection with the transactions contemplated
under this Agreement and the Sale 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 and Moody's; (c) any of the fees of the Indenture Trustee and
the fees and disbursements of the Indenture Trustee's counsel; (d) expenses
incurred in connection with printing the Prospectus, the Prospectus Supplement,
any amendment or supplement thereto, any preliminary prospectus and the Notes;
(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 0.025% of the
Class A Note Principal Balance on the Closing Date, paid in connection with the
issuance of Notes; (g) the fees and disbursements for the accountants for the
Originators; and (h) all of the initial expenses of the Note 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 Note 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 Indenture Trustee's fees and
expenses in connection with the transactions contemplated by the Sale and
Servicing Agreement. All other costs and expenses in connection with the
transactions contemplated hereunder shall be borne by the party incurring such
expenses.

         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). 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 Originators or the Unaffiliated Seller 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
         Indenture, the Indenture Trustee shall reimburse the Unaffiliated
         Seller in accordance with the Indenture for all amounts advanced by the
         Unaffiliated Seller 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.






                                       26
<PAGE>

         (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
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 Notes. 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
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.






                                       27
<PAGE>

                                    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 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 Notes and regarding any
other information as reasonably requested by the Depositor.

         (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 Indenture, the Trust Agreement, the Sale
         and Servicing Agreement dated as of December 1, 2001 and the
         Underwriting Agreement dated as of December 3, 2001 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;








                                       28
<PAGE>

             (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 Note Insurer, S&P and
         Moody's (it being agreed that the opinion shall expressly provide that
         the Indenture 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 Note Insurer, S&P and
         Moody's as to such matters as shall be required for the assignment of a
         rating to the Class A Notes of "AAA" by S&P, and Aaa by Moody's (it
         being agreed that such opinions shall expressly provide that the
         Indenture 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 Notes;

             (viii) a letter from S&P to the effect that it has assigned a
         rating of "AAA" to the Class A Notes;

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

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

             (xii) an opinion of the counsel for the Originators and the
         Unaffiliated Seller as to securities and tax matters;

             (xiii) an opinion of the counsel for the Originators and the
         Unaffiliated Seller as to true sale matters; and

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






                                       29
<PAGE>

         (e) The Note Insurance Policy shall have been duly executed, delivered
and issued with respect to the Class A Notes.

         (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.

         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) the Sale and Servicing Agreement, and all documents required
      thereunder, in each case executed by the Depositor as applicable; and

             (ii) a copy of a letter from Moody's to the Depositor to the effect
      that it has assigned a rating of "Aaa" to the Class A Notes and a copy of
      a letter from S&P to the Depositor to the effect that it has assigned a
      rating of "AAA" to the Class A Notes.

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

             (iv) an opinion or opinions of counsel for the Note Insurer, in
      each case in form and substance acceptable to the Unaffiliated Seller and
      its counsel.

         (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.





                                       30
<PAGE>

                                   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
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., 245 Park Avenue, 4th Floor, New York, New York 10167,
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 2001-4, 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 party to this
Agreement and the Note Insurer; provided, however, that the Depositor may assign
its rights hereunder without the consent of the Unaffiliated Seller.





                                       31
<PAGE>

         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
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 chattel paper shall be deemed to be "possession by the
secured party" for purposes of perfecting the security interest pursuant to
Section 9-305 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, upon the prior
written consent of the Note Insurer, without notice to or consent of the
Noteholders 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 Indenture Trustee
or (ii) a letter from each Rating Agency confirming that such amendment will not
result in the reduction, qualification or withdrawal of the current rating of
the Class A Notes, adversely affect in any material respect the interests of any
Noteholder; 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 Note without the consent of
the Holder of such Note, 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.





                                       32
<PAGE>

         (b) 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 Note Insurer, the Collateral Agent, the Owner Trustee, the Trust, and the
Indenture 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 of the Depositor under this Agreement which are assigned to the Trust
and then to the Indenture Trustee for the benefit of the Noteholders and the
Note Insurer pursuant to the Sale and Servicing Agreement and the Indenture
respectively, and to the extent necessary to obtain the benefit of the
enforcement of the obligations and covenants of the Unaffiliated Seller under
Section 4.01 and 4.04(a)(ii) of this Agreement. The parties further agree that
the Underwriters and their directors and each person or entity who controls the
Underwriters or any such person, within the meaning of Section 15 of the
Securities Act (each, an "Underwriter Entity") is an intended third-party
beneficiary of this Agreement to the extent necessary to obtain the benefit of
the enforcement of the obligations and covenants of the Unaffiliated Seller with
respect to each Underwriter Entity under Section 4.04(a)(i) of this Agreement.

         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
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.






                                       33
<PAGE>

         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]





































                                       34
<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:___________________________
                                                     Name:
                                                     Title:


                                                  ABFS 2001-4, INC.



                                                  By:___________________________
                                                     Name:
                                                     Title:


                                                  AMERICAN BUSINESS CREDIT, INC.



                                                  By:___________________________
                                                     Name:
                                                     Title:


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



                                                  By:___________________________
                                                     Name:
                                                     Title:


                                                  AMERICAN BUSINESS MORTGAGE
                                                    SERVICES, INC.


                                                  By:___________________________
                                                     Name:
                                                     Title:



             [Signature Page to the Unaffiliated Seller's Agreement]
<PAGE>



                                                                       EXHIBIT A
                                                                       ---------


                             MORTGAGE LOAN SCHEDULE