Document:

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                               SECURITY AGREEMENT

        THIS SECURITY AGREEMENT (this "AGREEMENT"), dated as of February 22,
2005, is made by AMERICAN BUSINESS FINANCIAL SERVICES, INC., as a debtor and a
debtor-in-possession, a Delaware corporation, ("ABFS"), THE AFFILIATES OF ABFS
LISTED ON ANNEX I HERETO, each as a debtor and a debtor-in-possession (together
with ABFS, each individually a "BORROWER" or a "GRANTOR", and collectively, the
"BORROWERS" or the "GRANTORS"), in favor of GREENWICH CAPITAL FINANCIAL
PRODUCTS, INC., as agent for the Secured Parties (in such capacity, the
"AGENT").

                              W I T N E S S E T H :

        WHEREAS, the Grantors, the lenders party thereto (the "LENDERS") and the
Agent are parties to a Debtor-in-Possession Loan and Security Agreement, dated
as of the date hereof (such Agreement, as amended, restated or otherwise
modified from time to time, being hereinafter referred to as the "LOAN
AGREEMENT");

        WHEREAS, pursuant to Section 5.01(b)(vi) of the Loan Agreement, the
Agent has required Grantors to execute and deliver to the Agent a security
agreement providing for the grant to the Agent for the benefit of the Secured
Parties of a security interest in all personal property of the Grantors, except
as otherwise noted herein; and

        WHEREAS, the Grantors have each determined that the execution, delivery
and performance of this Agreement directly benefits, and is in the best interest
of such Grantor;

        NOW, THEREFORE, in consideration of the premises and the agreements
herein and in order to induce the Agent and the Lenders to enter into the Loan
Agreement with the Pledgors, each Pledgor hereby agrees with the Agent as
follows:

        NOW, THEREFORE, in consideration of the premises and the agreements
herein and in order to induce the Agent and the Lender to enter into the Loan
Agreement with the Grantors, the Grantors jointly and severally agree with the
Agent as follows:

        SECTION 1. DEFINITIONS. All terms used in this Agreement which are
defined in the Loan Agreement and which are not defined herein have the same
meanings as set forth in the Loan Agreement. All terms used in this Agreement
which are defined in Article 9 of the Uniform Commercial Code (the "CODE")
currently in effect in the State of New York and which are not defined herein or
in the Loan Agreement have the same meanings as set forth in the Code. In
addition, the following terms shall have the following meanings:

        "COPYRIGHT LICENSES" means all licenses, contracts or other agreements,
whether written or oral, naming a Grantor as licensee or licensor and providing
for the grant of any right to use or sell any works covered by any Copyright,
including, without limitation, all Copyright Licenses set forth in Schedule III
hereto.

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        "COPYRIGHTS" means all domestic and foreign copyrights, whether
registered or not, including, without limitation, all copyright rights
throughout the universe (whether now or hereafter arising) in any and all media
(whether now or hereafter developed), in and to all original works of authorship
fixed in any tangible medium of expression, acquired or used by any Grantor
(including, without limitation, all copyrights described in Schedule III
hereto), all applications, registrations and recordings thereof (including,
without limitation, applications, registrations and recordings in the United
States Copyright Office or in any similar office or agency of the United States
or any other country or any political subdivision thereof), and all reissues,
divisions, continuations, continuations in part and extensions or renewals
thereof.

        "EXCLUDED COLLATERAL" means the items listed on Annex B hereto.

        "LICENSES" means all Trademark Licenses, Patent Licenses, and Copyright
Licenses.

        "PATENT LICENSES" means all licenses, contracts or other agreements,
whether written or oral, naming a Grantor as licensee or licensor and providing
for the grant of any right to manufacture, use or sell any invention covered by
any Patent, including, without limitation, all Patent Licenses set forth in
Schedule II hereto;

        "PATENTS" means all domestic and foreign letters patent, design patents,
utility patents, industrial designs, inventions, trade secrets, ideas, concepts,
methods, techniques, processes, proprietary information, technology, know-how,
formulae, rights of publicity and other general intangibles of like nature, now
existing or hereafter acquired (including, without limitation, all domestic and
foreign letters patent, design patents, utility patents, industrial designs,
inventions, trade secrets, ideas, concepts, methods, techniques, processes,
proprietary information, technology, know-how and formulae described in Schedule
II hereto), all applications, registrations and recordings thereof (including,
without limitation, applications, registrations and recordings in the United
States Patent and Trademark Office, or in any similar office or agency of the
United States or any other country or any political subdivision thereof), and
all reissues, divisions, continuations, continuations in part and extensions or
renewals thereof.

        "RELATED CONTRACTS" means any and all credit insurance, guaranties,
letters of credit, security agreements, leases and other contracts giving rise
to, or potentially giving rise to, Accounts.

        "TRADEMARK LICENSES" means all licenses, contracts or other agreements,
whether written or oral, naming any Grantor as licensor or licensee and
providing for the grant of any right to use any Trademark, including, without
limitation, all Trademark Licenses described in Schedule I hereto, together with
any goodwill connected with and symbolized by any such trademark licenses or
agreements and the right to prepare for sale and sell any and all Inventory now
or hereafter owned by the Grantor and now or hereafter covered by such licenses;

        "TRADEMARKS" means all domestic and foreign trademarks, service marks,
collective marks, certification marks, trade names, business names, d/b/a's,
Internet domain names, trade styles, designs, logos and other source or business
identifiers and all general

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intangibles of like nature, now or hereafter owned, adopted, acquired or used by
any Grantor (including, without limitation, all domestic and foreign trademarks,
service marks, collective marks, certification marks, trade names, business
names, d/b/a's, Internet domain names, trade styles, designs, logos and other
source or business identifiers described in Schedule I hereto), all
applications, registrations and recordings thereof (including, without
limitation, applications, registrations and recordings in the United States
Patent and Trademark Office or in any similar office or agency of the United
States, any state thereof or any other country or any political subdivision
thereof), and all reissues, extensions or renewals thereof, together with all
goodwill of the business symbolized by such marks and all customer lists,
formulae and other records of any Grantor relating to the distribution of
products and services in connection with which any of such marks are used.

        SECTION 2. GRANT OF SECURITY INTEREST. As collateral security for all of
the Obligations, each Grantor hereby assigns, pledges, transfers and grants to
the Agent, for the benefit of the Secured Parties, pursuant to Section 364 of
the Bankruptcy Code and subject to the limitations set forth in the Orders
(including, without limitation, paragraphs d.i, d.ii and d.iii, paragraph XIII,
paragraphs 17.a.v through 17.a.vii and paragraphs 51.b and 51.c of the Interim
Order), a continuing Lien on and perfected security interest in all of such
Grantor's now owned or hereafter acquired right, title and interest in and to
each of the following (including, without limitation, all Property of the estate
of each Borrower (within the meaning of the Bankruptcy Code) other than
Avoidance Actions and the Excluded Collateral (as defined in the Security
Agreement) (the "COLLATERAL"):

        (a)     Accounts;

        (b)     Books;

        (c)     Chattel Paper (whether tangible or electronic);

        (d)     Commercial Tort Claims;

        (e)     Deposit Accounts (including the Collection Account, the IOS
Account, the Mortgage Collection Account and the other Control Accounts);

        (f)     Documents;

        (g)     Equipment;

        (h)     Fixtures;

        (i)     General Intangibles and Payment Intangibles (including all
Servicing Reimbursement Rights, the Servicing Rights, all causes of action under
the Bankruptcy Code or otherwise, other than Avoidance Actions, and all rights
of the Borrowers under any Servicing Agreement, the Custodial Agreement or any
other document);

        (j)     Goods;

        (k)     Instruments;

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        (l)     all Interest Rate Protection Agreements;

        (m)     Intellectual Property;

        (n)     Inventory;

        (o)     Investment Property;

        (p)     Letter-of-Credit Rights;

        (q)     all Mortgage Loans;

        (r)     all Mortgage Loan Documents, including without limitation all
promissory notes, and all Servicing Records (as defined in SECTION 11.18(B) of
the Loan Agreement), and any other collateral pledged or otherwise relating to
such Mortgage Loans, together with all files, material documents, instruments,
surveys (if available), certificates, correspondence, appraisals, computer
records, computer storage media, Mortgage Loan accounting records and other
books and records relating thereto;

        (s)     all mortgage guaranties and insurance (issued by governmental
agencies or otherwise) and any mortgage insurance certificate or other document
evidencing such mortgage guaranties or insurance relating to any Mortgage Loans
and all claims and payments thereunder;

        (t)     all other insurance policies and Insurance Proceeds relating to
any Mortgage Loans or the related Mortgaged Property

        (u)     Negotiable Collateral;

        (v)     all IOS;

        (w)     Supporting Obligations;

        (x)     money or other assets of each such Borrower that now or
hereafter come into the possession, custody, or control of any Secured Party;

        (y)     all interests in real property owned by any Borrower or
collateralizing any Mortgage Loan;

        (z)     all other Personal Property of the Borrowers, wherever located
and whether now or hereafter existing, and whether now owned or hereafter
acquired, of every kind and description, whether tangible or intangible; and

        (aa)    Proceeds, products, rents and profits, whether tangible or
intangible, of any of the foregoing, including proceeds of insurance covering
any or all of the foregoing, and any and all tangible or intangible property
resulting from the sale, exchange, collection, or other disposition of any of
the foregoing, or any portion thereof or interest therein, and the Proceeds
thereof;

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        SECTION 3. SECURITY FOR OBLIGATIONS. The security interest created
hereby in the Collateral constitutes continuing collateral security for the
payment in full, performance and observance of all of the Obligations.

        SECTION 4. REPRESENTATIONS AND WARRANTIES. Each Grantor jointly and
severally represents and warrants as follows:

                (a)     Schedule V hereto, sets forth (i) the exact legal name
        of each Grantor and (ii) the organizational identification number of
        each Grantor or states that no such organizational identification number
        exists.

                (b)     Each Grantor (i) is a corporation duly organized,
        validly existing and in good standing under the laws of the state or
        jurisdiction of its organization as set forth on Schedule V hereto; (ii)
        is qualified to do business in each jurisdiction where the failure to be
        so qualified reasonably could be expected to have a Material Adverse
        Effect; and (iii) subject to the entry of the Interim Order (or the
        Final Order, when applicable), has all requisite power and authority to
        execute, deliver and perform this Agreement and each other Loan Document
        to be executed and delivered by it pursuant hereto.

                (c)     The execution, delivery and performance by each Grantor
        of this Agreement and each other Loan Document to which such Grantor is
        a party, (i) upon entry of the Interim Order (or the Final Order, when
        applicable), have been duly authorized by all necessary action on the
        part of the Grantor, (ii) do not and will not contravene its charter or
        by-laws, any law or any contractual restriction binding on or affecting
        such Grantor or any of its properties (other than conflicts, breaches
        and defaults the enforcement of which will be stayed by virtue of the
        filing of the Chapter 11 Cases), and (iii) do not and will not result in
        or require the creation of any Lien upon or with respect to any of its
        properties.

                (d)     Upon entry of the Interim Order (or the Final Order,
        when applicable), this Agreement is, and each other Loan Document to
        which any Grantor is or will be a party, when executed and delivered
        pursuant hereto, will be, a legal, valid and binding obligation of such
        Grantor, enforceable against such Grantor in accordance with its terms.

                (e)     There is no pending or, to the knowledge of the Grantor,
        threatened action, suit, proceeding or claim before any court or other
        Governmental Authority or any arbitrator other than the Chapter 11
        Cases, or any order, judgment or award by any court or other
        Governmental Authority or arbitrator, that may adversely affect the
        grant by any Grantor, or the perfection, of the security interest
        purported to be created hereby in the Collateral, or the exercise by the
        Agent of any of its rights or remedies hereunder.

                (f)     Subject to the requirements of the Bankruptcy Code, all
        taxes, assessments and other governmental charges imposed upon any
        Grantor or any property of any Grantor (including, without limitation,
        all federal income and social security taxes on employees' wages) and
        which have become due and payable on or prior to the date

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        hereof have been paid, except to the extent contested in good faith by
        proper proceedings which stay the imposition of any penalty, fine and
        Lien resulting from the non-payment thereof and with respect to which
        adequate reserves in accordance with GAAP have been established for the
        payment thereof.

                (g)     All Equipment and Inventory now existing is, and all
        Equipment and Inventory hereafter existing will be, located at the
        addresses specified therefor in Schedule IV hereto or at such other
        locations permitted by the terms of Section 5(b) hereof. Each Grantor's
        chief place of business and chief executive office, the place where each
        Grantor keeps its records concerning Accounts, and all originals of all
        chattel paper which constitute Accounts are located at the addresses
        specified therefor in Schedule V hereto. None of the Accounts is
        evidenced by a promissory note or other instrument. Set forth in
        Schedule V hereto is a complete and correct list of each trade name used
        by each Grantor.

                (h)     Each Grantor owns, or otherwise possesses adequate
        rights to use, all Trademarks, Patents and Copyrights necessary to
        conduct its business in substantially the same manner as conducted as of
        the date hereof. Schedule I hereto sets forth a true and complete list
        of all Trademarks owned by each Grantor and all Trademark Licenses to
        which each Grantor is a party, in each case as of the date hereof.
        Schedule II hereto sets forth a true and complete list of all Patents
        and Patent Licenses owned or used by each Grantor as of the date hereof.
        Schedule III hereto sets forth a true and complete list of all
        Copyrights owned by any Grantor and all Copyright Licenses (other than
        licenses for commercially available software entered into by each
        Grantor in the ordinary course of its business) to which any Grantor is
        a party, in each case as of the date hereof. All of such Patents,
        Trademarks and Copyrights are subsisting and in full force and effect,
        have not been abandoned in whole or in part, have not been adjudged
        invalid or unenforceable, and to the best knowledge of each Grantor, are
        valid and enforceable. Except as set forth in Schedule I, III or IV
        hereto, (i) other than licensing agreements solely among the Grantors,
        none of such Patents, Trademarks or Copyrights is the subject of any
        licensing or franchising agreement and (ii) each Grantor has no
        knowledge of any conflict with the rights of others to any Trademark,
        Patent or Copyright and, to the best knowledge of each Grantor, no
        Grantor is now infringing or in conflict with any such rights of others
        in any material respect, and to the best knowledge of each Grantor, no
        other Person is now infringing or in conflict in any material respect
        with any such properties, assets and rights owned or used by any
        Grantor. No Grantor has received any notice that it is violating or has
        violated the trademarks, patents, copyrights, inventions, trade secrets,
        proprietary information and technology, know-how, formulae, rights of
        publicity or other intellectual property rights of any third party.

                (i)     The Grantors are and will be at all times the sole and
        exclusive owner of, or otherwise have and will have adequate rights in,
        the Collateral free and clear of any Lien except for (i) the Lien
        created by this Agreement, and (ii) the Liens permitted by the Loan
        Agreement. No effective financing statement or other instrument similar
        in effect covering all or any part of the Collateral is on file in any
        recording or filing office, except (i) such as may have been filed in
        favor of the Agent relating to this Agreement,

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        and (ii) such as may have been filed to perfect or protect any security
        interest or encumbrance permitted by the Loan Agreement.

                (j)     The exercise by the Agent of any of its rights and
        remedies hereunder will not contravene any law or any contractual
        restriction binding on or otherwise affecting any Grantor or any of its
        properties and will not result in or require the creation of any Lien
        upon or with respect to any of its properties.

                (k)     No authorization or approval or other action by, and no
        notice to or filing with, any Governmental Authority or any other
        Person, is required for (i) the grant by any Grantor, or the perfection,
        of the security interest purported to be created hereby in the
        Collateral or (ii) the exercise by the Agent of any of its rights and
        remedies hereunder, except (A) for the filing under the Code as in
        effect in the applicable jurisdiction of the financing statements
        described in Schedule VI hereto, (B) with respect to any action that may
        be necessary to obtain control in Collateral described in Sections 5(i)
        and 5(j) hereof, the taking of such actions, (C) the taking possession
        of all Documents, Chattel Paper, Instruments and cash constituting
        Collateral, (D) with respect to the perfection of the security interest
        created hereby in the United States Trademarks, the United States
        Patents, and the United States Copyrights, for the recording of the
        Grant of Security Interest (Trademarks), substantially in the form of
        Exhibit A hereto and the Collateral Assignment for Security (Patents),
        substantially in the form of Exhibit B hereto, in the United States
        Patent and Trademark Office, (E) with respect to the perfection of the
        security interest created hereby in the United States Copyrights, the
        registration of such United States Copyrights and the recordation of the
        Collateral Assignment for Security (Copyrights), substantially in the
        form of Exhibit C hereto, in the United States Copyright Office, (F)
        with respect to the perfection of the security interest created hereby
        in foreign Trademarks, Patents and Copyrights, for recordings and
        filings in jurisdictions located outside of the United States and
        covering rights in such jurisdictions relating to Patents, Trademarks,
        Copyrights, Patent Licenses, Trademark Licenses and Copyright Licenses,
        (G) with respect to the perfection of the security interest created
        hereby in motor vehicles for which the title to such motor vehicles is
        governed by a certificate of title or ownership (collectively, the
        "MOTOR VEHICLES"), for the submission of an appropriate application
        requesting that the Lien of the Agent be noted on the certificate of
        title or ownership, completed and authenticated by the Grantor, together
        with the certificate of title, with respect to each Motor Vehicle, to
        the appropriate state agency and (H) entry of the Interim Order (or the
        Final Order, as applicable).

                (l)     This Agreement creates valid security interests in favor
        of the Agent for the benefit of the Agent and the Secured Parties in the
        Collateral, as security for the Obligations. The Agent's possession of
        all Instruments and cash constituting Collateral and its Control of all
        Collateral described in Sections 5(i) and 5(j) hereof from time to time,
        the recording of the Collateral Assignment for Security (Trademarks),
        the Collateral Assignment for Security (Patents) and the Collateral
        Assignment for Security (Copyrights), as applicable, executed pursuant
        hereto in the United States Patent and Trademark Office and the United
        States Copyright Office, as applicable, and the filing of

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        the financing statements described in Schedule VI hereto and, with
        respect to Patents, Trademarks and Copyrights hereafter existing and not
        covered by a Collateral Assignment for Security (Trademarks), a
        Collateral Assignment for Security (Patents) or a Collateral Assignment
        for Security (Copyrights), as applicable, the recording in the United
        States Patent and Trademark Office or the United States Copyright
        Office, as applicable, of appropriate instruments of assignment with
        respect to such after-acquired Patents, Trademarks and Copyrights and,
        in the case of such after acquired Copyrights, the registration of such
        Copyrights in the United States Copyright Office, will result in the
        perfection of such security interests. Such security interests are, or
        in the case of Collateral in which any Grantor obtains rights after the
        date hereof, will be, perfected, first priority security interests,
        subject only to the security interests and other encumbrances permitted
        pursuant to the Loan Agreement. Such filings and all other action
        necessary or desirable to perfect and protect such security interests
        have been duly taken, except for the Agent's having possession of
        Collateral consisting of Instruments or cash after the date hereof, the
        recording of a Collateral Assignment for Security (Trademarks), a
        Collateral Assignment for Security (Patents) or a Collateral Assignment
        for Security (Copyrights), as applicable, with respect to hereafter
        existing Trademarks, Patents or Copyrights and the taking of appropriate
        action with respect to foreign Trademarks.

                (m)     No Grantor holds any Commercial Tort Claims or is aware
        of any such pending claims, except for such claims described in Schedule
        VI.

        SECTION 5. COVENANTS AS TO THE COLLATERAL. So long as any of the
Obligations shall remain outstanding or the Loan Agreement and the other Loan
Documents or the Total Commitment shall not have terminated, unless the Agent
shall otherwise consent in writing:

                (a)     FURTHER ASSURANCES. Each Grantor will at its expense, at
        any time and from time to time, promptly execute and deliver all further
        instruments and documents and take all further action that may be
        necessary or desirable or that the Agent may reasonably request in order
        (i) to perfect and protect the security interest purported to be created
        hereby; (ii) to enable the Agent to exercise and enforce its rights and
        remedies hereunder in respect of the Collateral; or (iii) otherwise to
        effect the purposes of this Agreement, including, without limitation:
        (A) marking conspicuously each Chattel Paper included in the Accounts
        and each License and Related Contract and, at the request of the Agent,
        each of its records pertaining to the Collateral with a legend, in form
        and substance satisfactory to the Agent, indicating that such Chattel
        Paper, License, Related Contract or Collateral is subject to the
        security interest created hereby, (B) if any Account shall be evidenced
        by a promissory note or other Instrument or Chattel Paper, delivering
        and pledging to the Agent hereunder any such note, Instrument or Chattel
        Paper duly endorsed and accompanied by executed instruments of transfer
        or assignment, all in form and substance satisfactory to the Agent, (C)
        executing and filing (to the extent, if any, that such Grantor's
        signature is required thereon) or authenticating the filing of, such
        financing or continuation statements, or amendments thereto, as may be
        necessary or desirable or that the Agent may request in order to perfect
        and preserve the security interest purported to be created hereby, and
        (D) furnishing to the Agent from time to time

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        statements and schedules further identifying and describing the
        Collateral and such other reports in connection with the Collateral as
        the Agent may reasonably request, all in reasonable detail, (E) if any
        Collateral shall be in the possession of a third party, notifying such
        Person of the Agent's security interest created hereby and obtaining a
        written acknowledgment from such Person that such Person holds
        possession of the Collateral for the benefit of the Agent, which such
        written acknowledgement shall be in form and substance satisfactory to
        the Agent, (F) if at any time after the date hereof, any Grantor
        acquires or holds any Commercial Tort Claim, immediately notifying the
        Agent in a writing signed by such Grantor setting forth a brief
        description of such Commercial Tort Claim and granting to the Agent a
        security interest therein and in the proceeds thereof, which writing
        shall incorporate the provisions hereof and shall be in form and
        substance satisfactory to the Agent, (G) upon the acquisition after the
        date hereof by any Grantor of any Equipment subject to a certificate of
        title or ownership (other than Equipment that is subject to a purchase
        money security interest permitted by Section 7.17(ii) of the Loan
        Agreement), at the request of the Agent, cause the Agent to be listed as
        the lienholder on such certificate of title or ownership within 2 days
        of the acquisition thereof, and within 5 days of the acquisition thereof
        deliver evidence of the same to the Agent and (H) taking all actions
        required by any applicable law in any relevant Code jurisdiction or by
        other law as applicable in any foreign jurisdiction.

                (b)     LOCATION OF EQUIPMENT AND INVENTORY. Each Grantor will
        keep the Equipment and Inventory (other than used Equipment and
        Inventory sold in the ordinary course of business in accordance with
        Section 5(g) hereof) at the locations specified therefor in Section 4(c)
        hereof, unless it is in transit from one such location to another such
        location, or, upon not less than thirty (30) days' prior written notice
        to the Agent accompanied by a new Schedule IV hereto indicating each new
        location of the Equipment and Inventory, at such other locations in the
        continental United States as the Grantor may elect, provided that (i)
        all action has been taken to grant to the Agent a perfected, first
        priority security interest in such Equipment and Inventory (subject to
        Permitted Liens (to the extent that such Permitted Liens are accorded
        priority as a matter of law or pursuant to agreement)), and (ii) the
        Agent's rights in such Equipment and Inventory, including, without
        limitation, the existence, perfection and priority of the security
        interest created hereby in such Equipment and Inventory, are not
        adversely affected thereby.

                (c)     CONDITION OF EQUIPMENT. Each Grantor will maintain or
        cause to be maintained in good repair, working order and condition,
        excepting ordinary wear and tear and damage due to casualty, all of the
        Equipment and make or cause to be made all of the appropriate repairs,
        renewals and replacements thereof which are necessary or desirable and
        consistent with past practice of the Grantor, as quickly as practicable
        after the occurrence of any loss or damage thereto. Each Grantor shall
        promptly furnish to the Agent a statement describing in reasonable
        detail any loss or damage in excess of $100,000 to any Equipment or
        Inventory due to casualty.

                (d)     TAXES, ETC. Subject to any applicable restrictions
        imposed under the Bankruptcy Code or by the Bankruptcy Court, each
        Grantor jointly and severally

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        agrees to pay promptly when due all property and other taxes,
        assessments and governmental charges or levies imposed upon, and all
        claims (including claims for labor, materials and supplies) against, the
        Equipment and Inventory, except to the extent the validity thereof is
        being contested in good faith by proper proceedings which stay the
        imposition of any penalty, fine or Lien resulting from the non-payment
        thereof and with respect to which adequate reserves in accordance with
        GAAP have been set aside for the payment thereof.

                (e)     INSURANCE.

                (i)     Each Grantor will, at its own expense, maintain
          insurance (including, without limitation, comprehensive general
          liability and property insurance) with respect to the Equipment and
          Inventory in such amounts, against such risks, in such form and with
          such insurers as shall be reasonably satisfactory to the Agent from
          time to time. Each policy for liability insurance shall provide for
          all losses to be paid on behalf of the Agent and the Grantor as their
          respective interests may appear. Each such policy shall in addition
          (A) name the Grantor and the Agent as insured parties thereunder
          (without any representation or warranty by or obligation upon the
          Agent) as their interests may appear, (B) contain the agreement by the
          insurer that any loss thereunder shall be payable to the Agent on its
          own account, notwithstanding any action, inaction or breach of
          representation or warranty by the Grantor, (C) provide that there
          shall be no recourse against the Agent for payment of premiums or
          other amounts with respect thereto, and (D) provide that at least 30
          days' prior written notice of cancellation or of lapse, expiration or
          other adverse change shall be given to the Agent by the insurer. Each
          Grantor will, if so requested by the Agent, deliver to the Agent
          original or duplicate policies of such insurance and, as often as the
          Agent may reasonably request, a report of a reputable insurance broker
          with respect to such insurance. Each Grantor will also, at the request
          of the Agent, execute and deliver instruments of assignment of such
          insurance policies and cause the respective insurers to acknowledge
          notice of such assignment.

                (ii)    Payment under any liability insurance maintained by each
          Grantor pursuant to this Section 5(e) may be paid directly to the
          Person who shall have incurred liability covered by such insurance. In
          the case of any loss involving damage to Equipment or Inventory as to
          which clause (iii) of this Section 5(e) is not applicable, the Grantor
          will make or cause to be made the necessary repairs to or replacements
          of such Equipment and Inventory, and any proceeds of insurance
          maintained by any Grantor pursuant to this Section 5(e) shall be paid
          to the Grantor as reimbursement for the costs of such repairs or
          replacements.

                (iii)   Upon the occurrence and during the continuance of an
          Event of Default under the Loan Agreement or the actual or
          constructive total loss of any Equipment that will not be promptly
          replaced with the proceeds of such insurance or Inventory, all
          insurance payments in respect of such Equipment and Inventory shall,
          to the extent required by the Loan Agreement, be paid to the Agent and
          applied as specified in Section 7(b) hereof.

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                (f)     PROVISIONS CONCERNING THE ACCOUNTS, THE RELATED
        CONTRACTS AND THE  LICENSES.

                (i)     Each Grantor will (A) give the Agent at least 30 days'
          prior written notice of any change in the Grantor's name, identity or
          corporate structure, (B) maintain its state of incorporation, chief
          place of business and chief executive office and all originals of all
          chattel paper which constitute Accounts at the location(s) specified
          therefor in Schedule IV hereof, (C) immediately notify the Agent upon
          obtaining an organizational identification number, if on the date
          hereof such Grantor did not have such identification number, and (D)
          keep adequate records concerning the Accounts and such chattel paper
          and permit representatives of the Agent to inspect and make abstracts
          from such records and chattel paper pursuant to the terms of the Loan
          Agreement.

                (ii)    Each Grantor will duly perform and observe all of its
          obligations under each Related Contract and, except as otherwise
          provided in this subsection (f), continue to collect, at its own
          expense, all amounts due or to become due under the Accounts. In
          connection with such collections, the Grantor may (and, at the Agent's
          direction, will) take such action as the Grantor or the Agent may deem
          necessary or advisable to enforce collection or performance of the
          Accounts; provided, however, that the Agent shall have the right at
          any time, upon the occurrence and during the continuance of an Event
          of Default, to notify the Account Debtors or obligors under any
          Accounts of the assignment of such Accounts to the Agent and to direct
          such Account Debtors or obligors to make payment of all amounts due or
          to become due to the Grantor thereunder directly to the Agent or its
          designated agent and, upon such notification and at the expense of the
          Grantor and to the extent permitted by law, to enforce collection of
          any such Accounts and to adjust, settle or compromise the amount or
          payment thereof, in the same manner and to the same extent as the
          Grantor might have done. After receipt by any Grantor of a notice from
          the Agent that the Agent has notified or intends to notify the Account
          Debtors or obligors under any Accounts as referred to in the proviso
          to the immediately preceding sentence, (A) all amounts and Proceeds
          (including Instruments) received by any Grantor in respect of the
          Accounts shall be received in trust for the benefit of the Agent and
          the Secured Parties hereunder, shall be segregated from other funds of
          the Grantor and shall be forthwith paid over to the Agent in the same
          form as so received (with any necessary indorsement) to be held as
          cash collateral and either (1) credited to an account of the Grantor
          so long as no Event of Default shall have occurred and be continuing
          or (2) if any Event of Default shall have occurred and be continuing,
          applied as specified in Section 7(b) hereof, and (B) no Grantor will
          adjust, settle or compromise the amount or payment of any Receivable
          or release, in whole or in part, any Account Debtor or obligor thereof
          or allow any credit or discount thereon. In addition, upon the
          occurrence and during the continuance of an Event of Default, the
          Agent may (in its sole and absolute discretion) (i) notify the United
          States Postal Service authorities to change to any address Agent may
          designate the address for delivery of mail addressed to any Grantor
          and (ii) direct any or all

                                      -11-
<PAGE>

          of the banks and financial institutions with which any Grantor either
          maintains a Deposit Account or a lockbox or deposits the proceeds of
          any Accounts to send immediately to the Agent by wire transfer (to
          such account as the Agent shall specify, or in such other manner as
          the Agent shall direct) all or a portion of such securities, cash,
          investments and other items held by such institution. Any such
          securities, cash, investments and other items so received by the Agent
          shall (in the sole and absolute discretion of the Agent) be held as
          additional Collateral for the Obligations or distributed in accordance
          with Section 7 hereof.

                (iii)   Upon the occurrence and during the continuance of any
          material breach or default under any material Related Contract or
          other Related Contract specified in writing by the Agent from time to
          time or any License referred to in Schedule I, III or IV hereto by any
          party thereto other than a Grantor, the Grantors will (A) promptly
          after obtaining knowledge thereof, give the Agent written notice of
          the nature and duration thereof, specifying what action, if any, it
          has taken and proposes to take with respect thereto, and (B) upon
          written instructions from the Agent and at the Grantor's expense, take
          such action as the Agent may deem necessary or advisable in respect
          thereof.

                (iv)    Each Grantor will, at its expense, promptly deliver to
          the Agent a copy of each notice or other communication received by it
          by which any other party to any material Related Contract or other
          Related Contract specified in writing by the Agent from time to time
          or any License referred to in Schedule I, III or IV hereto purports to
          exercise any of its rights or affect any of its obligations
          thereunder, together with a copy of any reply by the Grantor thereto.

                (v)     Each Grantor will exercise promptly and diligently each
          and every right which it may have under each License (other than any
          right of termination) to the extent warranted in the conduct of its
          business and will duly perform and observe in all respects all of its
          obligations under each License and will take all action necessary to
          maintain all Licenses necessary for the operation of its business in
          full force and effect. No Grantor will, without the prior written
          consent of the Agent, cancel, terminate, amend or otherwise modify in
          any material respect, or waive any material provision of, any material
          Related Contract except for amendments which would not adversely
          affect Agent and the Secured Parties or any License referred to in
          Schedule I, III or IV hereto.

                (g)     TRANSFERS AND OTHER LIENS.

                (i)     No Grantor will sell, assign (by operation of law or
          otherwise), lease, exchange or otherwise transfer or dispose of any of
          the Collateral except to the extent permitted under Section 7.17 of
          the Loan Agreement, subject to the obligation of the Borrowers to make
          payments pursuant to Section 2.06 of the Loan Agreement.

                                      -12-
<PAGE>

                (ii)    No Grantor will create or suffer to exist any Lien upon
          or with respect to any Collateral, except for (A) the Liens created by
          this Agreement and the other Loan Documents and (B) the Liens
          permitted by the Loan Agreement.

                (h)     TRADEMARKS, PATENTS AND COPYRIGHTS.

                (i)     If applicable, each Grantor has duly executed and
          delivered the Grant of Security Interest (Trademarks) in the form
          attached hereto as Exhibit A, the Collateral Assignment for Security
          (Patents) in the form attached hereto as Exhibit B or the Collateral
          Assignment for Security (Copyrights) in the form attached hereto as
          Exhibit C. Each Grantor (either itself or through licensees) will, and
          will cause each licensee thereof to, take all action necessary to
          maintain all of the Trademarks, Patents and Copyrights in full force
          and effect, including, without limitation, using the proper statutory
          notices and markings and using the Trademarks on each applicable
          trademark class of goods in order to so maintain the Trademarks in
          full force free from any claim of abandonment for non-use, and no
          Grantor will (nor permit any licensee thereof to) do any act or
          knowingly omit to do any act whereby any Trademark, Patent or
          Copyright may become invalidated; provided, however, that so long as
          no Event of Default has occurred and is continuing, the Grantors shall
          have no obligation to use or to maintain any Trademark, Patent or
          Copyright (A) that relates solely to any product or work that has
          been, or is in the process of being, discontinued, abandoned or
          terminated, (B) that is being replaced with a trademark, patent or
          copyright substantially similar to the Trademark, Patent or Copyright,
          as the case may be, that may be abandoned or otherwise become invalid,
          so long as such replacement Trademark, Patent or Copyright, as the
          case may be, is subject to the security interest purported to be
          created by this Agreement, (C) that is substantially the same as
          another Trademark, Patent or Copyright that is in full force, so long
          as such other Trademark, Patent or Copyright, as the case may be, is
          subject to the Lien created by this Agreement, or (D) that is not
          necessary for the operation of the Grantor's business and is
          discontinued or disposed of in the ordinary course of business. Each
          Grantor will cause to be taken all necessary steps in any proceeding
          before the United States Patent and Trademark Office and the United
          States Copyright Office to maintain each registration of the
          Trademarks, the Patents and the Copyrights (other than those
          Trademarks, Patents and Copyrights described in the proviso to the
          immediately preceding sentence), including, without limitation, filing
          of renewals, affidavits of use, affidavits of incontestability and
          opposition, interference and cancellation proceedings and payment of
          maintenance fees, filing fees, taxes or other governmental fees. If
          any Trademark, Patent or Copyright is infringed, misappropriated or
          diluted or otherwise violated in any material respect by a third
          party, the Grantors shall (x) upon learning of such infringement,
          misappropriation or dilution or other violation, promptly notify the
          Agent and (y) to the extent the Grantors shall reasonably deem
          appropriate under the circumstances, promptly sue for infringement,
          misappropriation or dilution or other violation, seek injunctive
          relief where appropriate and recover any and all damages for such
          infringement, misappropriation or dilution or other violation, or

                                      -13-
<PAGE>

          take such other actions as the Grantors shall reasonably deem
          appropriate under the circumstances to protect such Trademark, Patent
          or Copyright. Each Grantor shall furnish to the Agent from time to
          time (but, unless an Event of Default has occurred and is continuing,
          no more frequently than quarterly) statements and schedules further
          identifying and describing the Patents, the Trademarks and the
          Copyrights and such other reports in connection with the Patents, the
          Trademarks and the Copyrights as the Agent may reasonably request, all
          in reasonable detail and promptly upon request of the Agent, following
          receipt by the Agent of any such statements, schedules or reports, the
          Grantors shall modify this Agreement by amending Schedules II, III or
          IV hereto, as the case may be, to include any Patent, Trademark or
          Copyright, as the case may be, which becomes part of the Collateral
          under this Agreement and shall execute and authenticate such documents
          and do such acts as shall be necessary or, in the judgment of the
          Agent, desirable to subject such Trademarks, Patents or Copyrights to
          the Lien created by this Agreement. Notwithstanding anything herein to
          the contrary, upon the occurrence and during the continuance of an
          Event of Default the Grantor may not abandon or otherwise permit a
          Trademark, Patent or Copyright to become invalid without the prior
          written consent of the Agent, and if any Trademark, Patent or
          Copyright is infringed, misappropriated or diluted or otherwise
          violated in any material respect by a third party, the Grantor will
          take such action as the Agent shall deem appropriate under the
          circumstances to protect such Trademark, Patent or Copyright.

                (ii)    If any Grantor or any agent, employee, licensee or
          designee thereof files an application for the registration of any
          Trademark or Copyright or for the issuance of any Patent with the
          United States Patent and Trademark Office or the United States
          Copyright Office, as applicable, within 5 days of such filing the
          Grantor shall provide the Agent written notice thereof. Upon request
          of the Agent, the Grantor shall execute, authenticate and deliver any
          and all assignments, agreements, instruments, documents and papers as
          the Agent may reasonably request to evidence the Agent's security
          interest hereunder in such Trademark, Patent or Copyright and the
          general intangibles of the Grantor relating thereto or represented
          thereby. The Grantor constitutes the Agent as its attorney-in-fact to
          execute and/or authenticate and file all such writings for the
          foregoing purposes, and confirms and ratifies all acts of such
          attorney, and such power (being coupled with an interest) shall be
          irrevocable until the termination of the Total Commitment, the
          repayment of all of the Obligations in full and the termination of
          each of the Loan Documents.

                (i)     DEPOSIT, COMMODITIES AND SECURITIES ACCOUNTS. Without
        the prior written consent of the Agent, no Grantor shall make or
        maintain any Deposit Account, Commodity Account or Securities Account,
        except in accordance with the terms of the Loan Agreement.

                (j)     CONTROL. Each Grantor hereby agrees to take any or all
        action that may be necessary or desirable or that the Agent may request
        in order for the Agent to

                                      -14-
<PAGE>

        obtain control in accordance with Sections 9-105 - 9-107 of the Code
        with respect to the following Collateral: (i) Electronic Chattel Paper,
        (ii) Investment Property and (iii) Letter-of-Credit Rights.

                (k)     INSPECTION AND REPORTING. Each Grantor shall permit the
        Agent or any Lender, or any agents or representatives thereof or such
        professionals or other Persons as the Agent may designate (i) to examine
        and inspect the books and records of the Grantor and take copies and
        extracts therefrom, (ii) to visit and inspect its properties, (iii) to
        verify materials, leases, notes, receivables, inventory and other assets
        of the Grantor from time to time, and (iv) to conduct physical counts,
        appraisals and/or valuations at the locations of the Grantor, in each
        case as provided in the Loan Agreement.

        SECTION 6. ADDITIONAL PROVISIONS CONCERNING THE COLLATERAL.

                (a)     Each Grantor authorizes the Agent to file, without the
        signature of the Grantor where permitted by law, one or more financing
        or continuation statements, and amendments thereto, relating to the
        Collateral and ratifies such authorization to the extent that the Agent
        has filed any such financing or continuation statements, or amendments
        thereto prior to the date hereof. A photocopy or other reproduction of
        this Agreement or any financing statement covering the Collateral or any
        part thereof shall be sufficient as a financing statement where
        permitted by law.

                (b)     Each Grantor irrevocably appoints the Agent as the
        Grantor's attorney-in-fact and proxy, with full authority in the place
        and stead of the Grantor and in the name of the Grantor or otherwise,
        from time to time in the Agent's discretion upon the occurrence and
        during the continuance of an Event of Default, to take any action and to
        execute any instrument which the Agent may deem necessary or advisable
        to accomplish the purposes of this Agreement (subject to the rights of
        the Grantor under Section 5(f) hereof), including, without limitation,
        (i) to obtain and adjust insurance required to be paid to the Agent
        pursuant to Section 5(e) hereof, and to receive, indorse and collect any
        drafts or other instruments, documents and chattel paper in connection
        therewith, (ii) to ask, demand, collect, sue for, recover, compound,
        receive and give acquittance and receipts for moneys due and to become
        due under or in respect of any Collateral, (iii) to receive, indorse,
        and collect any drafts or other instruments, documents and chattel paper
        in connection with clause (i) or (ii) above, and (iv) to file any claims
        or take any action or institute any proceedings which the Agent may deem
        necessary or desirable for the collection of any Collateral or otherwise
        to enforce the rights of the Agent and the Lenders with respect to any
        Collateral. This power is coupled with an interest and is irrevocable
        until all of the Obligations are paid in full after the termination of
        the Loan Agreement and the other Loan Documents.

                (c)     For the purpose of enabling the Agent to exercise rights
        and remedies hereunder, at such time as the Agent shall be lawfully
        entitled to exercise such rights and remedies, and for no other purpose,
        each Grantor grants to the Agent, to the extent assignable, an
        irrevocable, non-exclusive license (exercisable without payment of
        royalty or other compensation to the Grantor) to use, assign, license or
        sublicense any of

                                      -15-
<PAGE>

        the Patents, Trademarks or Copyrights now owned or hereafter acquired by
        the Grantor, wherever the same may be located, including in such license
        reasonable access to all media in which any of the licensed items may be
        recorded or stored and to all computer programs used for the compilation
        or printout thereof, subject with respect to Trademarks to the
        reasonable rights of quality control and inspection in favor of the
        Grantor as shall be reasonably necessary to preserve the validity of
        such Trademarks. Notwithstanding anything contained herein to the
        contrary, but subject to the provisions of the Loan Agreement that limit
        the right of any Grantor to dispose of its property and Section 5(h)
        hereof, so long as no Event of Default shall have occurred and be
        continuing, the Grantors may exploit, use, enjoy, protect, license,
        sublicense, assign, sell, dispose of or take other actions with respect
        to the Patents, Trademarks or Copyrights in the ordinary course of the
        business of the Grantors. In furtherance of the foregoing, unless an
        Event of Default shall have occurred and be continuing, the Agent shall
        from time to time, upon the request of a Grantor, execute and deliver
        any instruments, certificates or other documents, in the form so
        requested, which the Grantor shall have certified are appropriate (in
        its judgment) to allow it to take any action permitted above (including
        relinquishment of the license provided pursuant to this clause (c) as to
        any Patents, Trademarks or Copyrights). Further, upon the payment in
        full of all of the Obligations and termination of the Loan Agreement,
        the Agent (subject to Section 10(e) hereof) shall release and reassign
        to the Grantor all of the Agent's right, title and interest in and to
        the Patents, Trademarks, Copyrights and the Licenses, all without
        recourse, representation or warranty whatsoever. The exercise of rights
        and remedies hereunder by the Agent shall not terminate the rights of
        the holders of any licenses or sublicenses theretofore granted by any
        Grantor in accordance with the second sentence of this clause (c). The
        Grantors release the Agent from any claims, causes of action and demands
        at any time arising out of or with respect to any actions taken or
        omitted to be taken by the Agent under the powers of attorney granted
        herein other than actions taken or omitted to be taken through the
        Agent's gross negligence or willful misconduct.

                (d)     If any Grantor fails to perform any agreement contained
        herein, the Agent may itself perform, or cause performance of, such
        agreement or obligation, in the name of the Grantor or the Agent, and
        the expenses of the Agent incurred in connection therewith shall be
        jointly and severally payable by the Grantor pursuant to Section 8
        hereof and shall be secured by the Collateral.

                (e)     The powers conferred on the Agent hereunder are solely
        to protect its interest in the Collateral and shall not impose any duty
        upon it to exercise any such powers. Except for the safe custody of any
        Collateral in its possession and the accounting for moneys actually
        received by it hereunder, the Agent shall have no duty as to any
        Collateral or as to the taking of any necessary steps to preserve rights
        against prior parties or any other rights pertaining to any Collateral.

                (f)     Anything herein to the contrary notwithstanding (i) each
        Grantor shall remain liable under the Related Contracts and Licenses and
        otherwise with respect to any of the Collateral to the extent set forth
        therein to perform all of its obligations thereunder to the same extent
        as if this Agreement had not been executed, (ii) the exercise

                                      -16-
<PAGE>

        by the Agent of any of its rights hereunder shall not release any
        Grantor from any its obligations under the Related Contracts and
        Licenses or otherwise in respect of the Collateral, and (iii) the Agent
        shall not have any obligation or liability by reason of this Agreement
        under the Related Contracts and Licenses or with respect to any of the
        other Collateral, nor shall the Agent be obligated to perform any of the
        obligations or duties of any Grantor thereunder or to take any action to
        collect or enforce any claim for payment assigned hereunder.

                (g)     To the extent that any provision of this Agreement
        requires the Grantors to take action within a specified period of time,
        or requires the Grantors to deliver written notice to the Agent within a
        specified period of time, such specified period of time may be extended
        or shortened by the Agent, at the Grantors' request, in the Agent's sole
        discretion

        SECTION 7. REMEDIES UPON DEFAULT. If any Event of Default shall have
occurred and be continuing:

                (a)     The Agent may exercise in respect of the Collateral,
        without further order of, or application to, the Bankruptcy Court and in
        addition to other rights and remedies provided for herein or otherwise
        available to it, all of the rights and remedies of a secured party upon
        default under the Bankruptcy Code and the Code (whether or not the Code
        applies to the affected Collateral), and also may (i) take absolute
        control of the Collateral, including, without limitation, (x) transfer
        into the Agent's name or into the name of its nominee or nominees (to
        the extent the Agent has not theretofore done so) and thereafter
        receive, for the benefit of the Secured Parties, all payments made
        thereon, give all consents, waivers and ratifications in respect thereof
        and otherwise act with respect thereto as though it were the outright
        owner thereof, (y) obtain physical possession of the Servicing Records
        and all other files of the Grantors relating to the Collateral and all
        documents relating to the Collateral which are then or may thereafter
        come into the possessions of the Grantors or any third party acting for
        the Grantors and (z) exercise Control over all Control Accounts, (ii)
        require the Grantors to, and each Grantor agrees that it will at its
        expense and upon request of the Agent forthwith, assemble all or part of
        the Collateral as directed by the Agent and make it available to the
        Agent at a place or places to be designated by the Agent which is
        reasonably convenient to both parties, and the Agent may enter into and
        occupy any premises owned or leased by any Grantor where the Collateral
        or any part thereof is located or assembled for a reasonable period in
        order to effectuate the Agent's rights and remedies hereunder or under
        law, without obligation to any Grantor in respect of such occupation,
        (iiii) use, assign, license or sublicense any of the Intellectual
        Property, to the extent permitted by the terms of such Intellectual
        Property, (iv) without notice except as specified below, and without any
        obligation to prepare or process the Collateral for sale, (A) sell the
        Collateral or any part thereof in one or more parcels at public or
        private sale, at any of the Agent's offices or elsewhere, for cash, on
        credit or for future delivery, and at such price or prices and upon such
        other terms as the Agent may deem commercially reasonable and/or (B)
        lease, license or dispose of the Collateral or any part thereof upon
        such terms as the Agent may deem commercially reasonable; PROVIDED,
        HOWEVER, in

                                      -17-
<PAGE>

        accordance with Section 9(a) of the Loan Agreement and the Orders of the
        Bankruptcy Court, the Agent may not consummate foreclosure on the
        Collateral or otherwise seize control of assets of the Grantors' Estates
        (as such term is defined in the Bankruptcy Code) absent five (5)
        Business Days' notice of an Event of Default. The Grantors agree that,
        to the extent notice of sale shall be required by law, 10 days' notice
        to any Grantor of the time and place of any public sale or the time
        after which any private sale is to be made shall constitute reasonable
        notification to all Grantors. The Agent shall not be obligated to make
        any sale of Collateral regardless of notice of sale having been given.
        The Agent may adjourn any public or private sale from time to time by
        announcement at the time and place fixed therefor, and such sale may,
        without further notice, be made at the time and place to which it was so
        adjourned. The Grantors waive any claims against the Agent and the other
        Secured Parties arising by reason of the fact that the price at which
        the Collateral may have been sold at a private sale was less than the
        price which might have been obtained at a public sale or was less than
        the aggregate amount of the Obligations, even if the Agent accepts the
        first offer received and does not offer the Collateral to more than one
        offeree and waives all rights which the Grantor may have to require that
        all or any part of the Collateral be marshalled upon any sale (public or
        private) thereof. Each Grantor hereby acknowledges that (i) any such
        sale of the Collateral by the Agent shall be made without warranty, (ii)
        the Agent may specifically disclaim any warranties of title, possession,
        quiet enjoyment or the like, and (iii) such actions set forth in clauses
        (i) and (ii) above shall not adversely effect the commercial
        reasonableness of any such sale of the Collateral. In addition to the
        foregoing, (i) upon written notice from the Agent, the Grantors shall
        cease any use of the Trademarks, Patents or Copyrights or any mark or
        patent similar thereto for any purpose described in such notice; (ii)
        the Agent may, at any time and from time to time, upon 10 days' prior
        notice to any Grantor, license, whether general, special or otherwise,
        and whether on an exclusive or non-exclusive basis, any of the
        Trademarks, Patents and Copyrights throughout the world for such term or
        terms, on such conditions, and in such manner, as the Agent shall in its
        sole discretion determine; and (iii) the Agent may, at any time,
        pursuant to the authority granted in Section 6 hereof (such authority
        being effective upon the occurrence of an Event of Default), execute and
        deliver on behalf of the Grantors, one or more instruments of assignment
        of the Trademarks, Patents and Copyrights (or any application or
        registration thereof), in form suitable for filing, recording or
        registration in any country.

                (b)     Subject to Section 4.01(k) of the Loan Agreement, any
        cash held by the Agent as Collateral and all cash proceeds received by
        the Agent in respect of any sale of or collection from, or other
        realization upon, all or any part the Collateral may, in the discretion
        of the Agent, be held by the Agent as collateral for, and/or then or at
        any time thereafter applied in whole or in part by the Agent against,
        all or any part of the Obligations as provided in Section 3.03 of the
        Loan Agreement. Any surplus of such cash or cash Proceeds held by the
        Agent and remaining after payment in full of all of the Obligations
        after termination of the Loan Agreement and the other Loan Documents
        shall be paid over to whomsoever shall be lawfully entitled to receive
        the same or as a court of competent jurisdiction shall direct.

                                      -18-
<PAGE>

                (c)     In the event that the proceeds of any such sale,
        collection or realization are insufficient to pay all amounts to which
        the Agent and the other Secured Parties are legally entitled, the
        Grantors shall be liable for the deficiency, together with interest
        thereon at the highest rate specified in any applicable Loan Document
        for interest on overdue principal thereof or such other rate as shall be
        fixed by applicable law, together with the costs of collection and the
        reasonable fees, costs, expenses of any attorneys employed by the Agent
        to collect such deficiency.

                (d)     Each Grantor hereby acknowledges that if the Agent
        complies with any applicable state or federal law requirements in
        connection with a disposition of the Collateral, such compliance will
        not adversely affect the commercial reasonableness of any sale or other
        disposition of the Collateral.

                (e)     The Agent shall not be required to marshal any present
        or future collateral security (including, but not limited to, this
        Agreement and the Collateral) for, or other assurances of payment of,
        the Obligations or any of them or to resort to such collateral security
        or other assurances of payment in any particular order, and all of the
        Agent's rights hereunder and in respect of such collateral security and
        other assurances of payment shall be cumulative and in addition to all
        other rights, however existing or arising. To the extent that any
        Grantor lawfully may, such Grantor hereby agrees that it will not invoke
        any law relating to the marshalling of collateral which might cause
        delay in or impede the enforcement of the Agent's rights under this
        Agreement or under any other instrument creating or evidencing any of
        the Obligations or under which any of the Obligations is outstanding or
        by which any of the Obligations is secured or payment thereof is
        otherwise assured, and, to the extent that it lawfully may, each Grantor
        hereby irrevocably waives the benefits of all such laws.

        SECTION 8. INTENTIONALLY OMITTED.

        SECTION 9. NOTICES, ETC. All notices and other communications provided
for hereunder shall be in writing and governed by the terms of Section 11.03 of
the Loan Agreement. Notice to any Grantor will be deemed notice to all Grantors.

        SECTION 10. MISCELLANEOUS.

                (a)     No amendment of any provision of this Agreement shall be
        effective unless it is in writing and signed by the Grantors and the
        Agent, and no waiver of any provision of this Agreement, and no consent
        to any departure by any Grantor therefrom, shall be effective unless it
        is in writing and signed by the Agent, and then such waiver or consent
        shall be effective only in the specific instance and for the specific
        purpose for which given.

                (b)     No failure on the part of the Agent to exercise, and no
        delay in exercising, any right hereunder or under any other Loan
        Document shall operate as a waiver thereof; nor shall any single or
        partial exercise of any such right preclude any other or further
        exercise thereof or the exercise of any other right. The rights and
        remedies of the Agent provided herein and in the other Loan Documents
        are cumulative

                                      -19-
<PAGE>

        and are in addition to, and not exclusive of, any rights or remedies
        provided by law. The rights of the Agent under any Loan Document against
        any party thereto are not conditional or contingent on any attempt by
        the Agent to exercise any of its rights under any other Loan Document
        against such party or against any other Person.

                (c)     Any provision of this Agreement which is prohibited or
        unenforceable in any jurisdiction shall, as to such jurisdiction, be
        ineffective to the extent of such prohibition or unenforceability
        without invalidating the remaining portions hereof or thereof or
        affecting the validity or enforceability of such provision in any other
        jurisdiction.

                (d)     This Agreement shall create a continuing security
        interest in the Collateral and shall (i) remain in full force and effect
        until the payment in full of the Obligations and the termination of the
        Loan Agreement and the other Loan Documents and (ii) be binding on the
        Grantors and their successors and assigns and shall inure, together with
        all rights and remedies of the Agent hereunder, to the benefit of the
        Agent and the other Secured Parties their respective permitted
        successors, transferees and assigns. Without limiting the generality of
        clause (ii) of the immediately preceding sentence and subject to the
        terms of the Loan Agreement, the Agent and Lenders may assign or
        otherwise transfer their respective rights under this Agreement and any
        other Loan Document, to any other Person and such other Person shall
        thereupon become vested with all of the benefits in respect thereof
        granted to the Agent and the Lenders herein or otherwise. Upon any such
        assignment or transfer, all references in this Agreement to the Agent or
        any such Lender shall mean the assignee or transferee of the Agent or
        such Lender. None of the rights or obligations of the Grantors hereunder
        may be assigned or otherwise transferred without the prior written
        consent of the Agent, and any such attempted assignment or transfer
        shall be null and void.

                (e)     Upon the satisfaction in full of the Obligations and the
        termination of the Loan Agreement and the other Loan Documents, (i) this
        Agreement and the security interests created hereby shall terminate and
        all rights to the Collateral shall revert to the Grantors, and (ii) the
        Agent will, upon the Grantors' request and at the Grantors' sole
        expense, (A) return to the Grantors such of the Collateral as shall not
        have been sold or otherwise disposed of or applied pursuant to the terms
        hereof, and (B) execute and deliver to the Grantors such documents as
        the Grantors shall reasonably request to evidence such termination, all
        without any representation, warranty or recourse whatsoever.

                (f)     This Agreement shall be governed by, and construed and
        interpreted in accordance with, the laws of the State of New York,
        without reference to its conflict of law provisions (other than Section
        5-1401 of the New York General Obligations Law), except as governed by
        the Bankruptcy Code and as required by mandatory provisions of law and
        except to the extent that the validity and perfection or the perfection
        and effect of perfection or non-perfection of the security interest
        created hereby or remedies hereunder, in respect of any particular
        Collateral are required to be governed by the law of a jurisdiction
        other than the State of New York.

                                      -20-
<PAGE>

                (g)     Any legal action, suit or proceeding with respect to
        this Agreement or any document related thereto may be brought in the
        courts of the State of New York or the United States of America for the
        Southern District of New York, and appellate courts thereof, and, by
        execution and delivery of this Agreement, each Grantor hereby accepts
        for itself and in respect of its property, generally and
        unconditionally, the jurisdiction of the aforesaid courts. Each Grantor
        hereby irrevocably waives any objection, including, without limitation,
        any objection to the laying of venue or based on the grounds of FORUM
        NON CONVENIENS, which it may now or hereafter have to the bringing of
        any such action, suit or proceeding in such respective jurisdictions and
        consents to the granting of such legal or equitable relief as is deemed
        appropriate by the court.

                (h)     Each Grantor irrevocably consents to the service of
        process of any of the aforesaid courts in any such action, suit or
        proceeding by the mailing of copies thereof by registered or certified
        mail (or any substantially similar form of mail), postage prepaid, to
        such Grantor at its address provided herein, such service to become
        effective when received or 30 days after such mailing, whichever first
        occurs.

                (i)     Nothing contained herein shall affect the right of the
        Agent to serve process in any other manner permitted by law or commence
        legal proceedings or otherwise proceed against any Grantor or any
        property of any Grantor in any other jurisdiction.

                (j)     Each Grantor irrevocably and unconditionally waives any
        right it may have to claim or recover in any legal action, suit or
        proceeding referred to in this Section any special, exemplary, punitive
        or consequential damages.

                (K)     EACH OF THE GRANTORS AND (BY ITS ACCEPTANCE OF THE
        BENEFITS OF THIS AGREEMENT) THE AGENT WAIVES ANY RIGHT IT MAY HAVE TO
        TRIAL BY JURY IN RESPECT OF ANY LITIGATION BASED ON, ARISING OUT OF,
        UNDER OR IN CONNECTION WITH THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT,
        OR ANY COURSE OF CONDUCT, COURSE OF DEALING, VERBAL OR WRITTEN STATEMENT
        OR OTHER ACTION OF THE PARTIES HERETO.

                (l)     COMMERCIAL TORT CLAIMS. If the Grantor shall at any
        time, acquire a Commercial Tort Claim, the Grantor shall immediately
        notify the Agent in a writing signed by the Grantor of the brief details
        thereof and grant to the Agent in such writing a security interest
        therein and in the proceeds thereof, all upon the terms of this
        Agreement, with such writing to be in form and substance satisfactory to
        the Agent.

                (m)     PERFECTION BY FILING. The Agent may at any time and from
        time to time, pursuant to this Agreement, file financing statements,
        continuation statements and amendments thereto that describe the
        Collateral as all assets of the Grantor or words of similar effect and
        which contain any other information required by Article 9 of the Code
        for the sufficiency or filing office acceptance of any financing
        statement, continuation statement or amendment, including whether the
        Grantor is an organization, the type of organization and any
        organization identification number issued to the Grantor. The

                                      -21-
<PAGE>

        Grantor agrees to furnish any such information to the Agent promptly
        upon request. Any such financing statements, continuation statements or
        amendments may be signed by the Agent on behalf of the Grantor, and may
        be filed at any time in any jurisdiction.

                (n)     OTHER PERFECTION, ETC. The Grantor shall at any time and
        from time to time, take such steps as the Agent may reasonably request
        for the Agent (i) to obtain an acknowledgment, in form and substance
        satisfactory to the Agent, of any bailee having possession of any of the
        Collateral that the bailee holds such Collateral for the Agent, (ii) to
        obtain "CONTROL" (as defined in the Code) of any Investment Property,
        Deposit Accounts, Letter-of-Credit Rights or electronic Chattel Paper,
        with any agreements establishing control to be in form and substance
        satisfactory to the Agent, and (iii) otherwise to insure the continued
        perfection and priority of the Agent's security interest in any of the
        Collateral and of the preservation of its rights therein.

                (o)     This Agreement may be executed in any number of
        counterparts and by different parties hereto in separate counterparts,
        each of which shall be deemed to be an original.

                (p)     Section headings herein are included for convenience of
        reference only and shall not constitute a part of this Agreement for any
        other purpose.

                (q)     All of the obligations of the Grantors hereunder are
        joint and several. The Agent may, in its sole and absolute discretion,
        enforce the provisions hereof against any of the Grantors and shall not
        be required to proceed against all Grantors jointly or seek payment from
        the Grantors ratably. In addition, the Agent may, in its sole and
        absolute discretion, select the Collateral of any one or more of the
        Grantors for sale or application to the Obligations, without regard to
        the ownership of such Collateral, and shall not be required to make such
        selection ratably from the Collateral owned by all of the Grantors. The
        release or discharge of any Grantor by the Agent shall not release or
        discharge any other Grantor from the obligations of such Person
        hereunder.

                [REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]

                                      -22-
<PAGE>

        IN WITNESS WHEREOF, each Grantor has caused this Agreement to be
executed and delivered by its duly authorized officer as of the date first above
written.

                                     GRANTORS

                                     AMERICAN BUSINESS FINANCIAL SERVICES, INC.

                                     By:  /s/ Albert W. Mandia
                                          --------------------------------------
                                     Name: Albert W. Mandia
                                     Title: Executive Vice President and CFO

                                     AMERICAN BUSINESS CREDIT, INC.

                                     By:  /s/ Albert W. Mandia
                                          --------------------------------------
                                     Name: Albert W. Mandia
                                     Title: Executive Vice President and CFO

                                     HOMEAMERICAN CREDIT, INC.

                                     By:  /s/ Albert W. Mandia
                                          --------------------------------------
                                     Name: Albert W. Mandia
                                     Title: Executive Vice President and CFO

                                     AMERICAN BUSINESS MORTGAGE SERVICES, INC.

                                     By:  /s/ Albert W. Mandia
                                          --------------------------------------
                                     Name: Albert W. Mandia
                                     Title: Executive Vice President and CFO

                                     TIGER RELOCATION COMPANY

                                     By:  /s/ Albert W. Mandia
                                          --------------------------------------
                                     Name: Albert W. Mandia
                                     Title: Executive Vice President and CFO

                                      -23-
<PAGE>

                                     ABFS CONSOLIDATED HOLDINGS, INC.

                                     By:  /s/ Albert W. Mandia
                                          --------------------------------------
                                     Name: Albert W. Mandia
                                     Title: Executive Vice President and CFO

                                      -24-<PAGE>

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

                               SERVICING AGREEMENT

                          Dated as of February 22, 2005

                    AMERICAN BUSINESS MORTGAGE SERVICES, INC.
         as debtor and debtor-in-possession and Administrative Borrower,

                           CERTAIN OF ITS AFFILIATES,
               as debtors and debtors-in-possession and Borrowers,

                   GREENWICH CAPITAL FINANCIAL PRODUCTS, INC.
                                    as Agent,

                         AMERICAN BUSINESS CREDIT, INC.
                                   as Servicer

                                       and

                      COUNTRYWIDE HOME LOANS SERVICING LP,
                               as Backup Servicer

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

<PAGE>

        THIS SERVICING AGREEMENT, dated as of February 22, 2005, is executed
among AMERICAN BUSINESS MORTGAGE SERVICES, INC., as a debtor and a
debtor-in-possession, a New Jersey corporation (the "ADMINISTRATIVE BORROWER"),
the affiliates of the Administrative Borrower listed on the signature pages
hereto, each as a debtor and a debtor-in-possession (together with the
Administrative Borrower, individually a "BORROWER" and collectively, the
"BORROWERS"), GREENWICH CAPITAL FINANCIAL PRODUCTS, INC., a Delaware corporation
(the "AGENT"), AMERICAN BUSINESS CREDIT, INC., as a debtor and a
debtor-in-possession, a Pennsylvania corporation (the "Servicer"), and
COUNTRYWIDE HOME LOANS SERVICING LP, a Texas limited partnership (the "BACKUP
SERVICER").

                                   WITNESSETH:

        WHEREAS, the Borrowers, the lenders from time to time party thereto (the
"LENDERS") and the Agent are parties to that certain Debtor-In-Possession Loan
and Security Agreement, dated as of the date hereof (as amended, restated,
supplemented or otherwise modified and in effect from time to time, the "LOAN
AGREEMENT"), pursuant to which the Lenders have agreed, subject to the terms and
conditions of the Loan Agreement, to make revolving credit loans to the
Borrowers to finance Mortgage Loans owned by the Borrowers.

        WHEREAS, the Borrowers and the Servicer wish to prescribe the permanent
management, servicing and control of the Mortgage Loans;

        NOW, THEREFORE, in consideration of the mutual agreements hereinafter
set forth, and for other good and valuable consideration, the receipt and
adequacy of which is hereby acknowledged, the Borrowers, the Servicer, the Agent
and the Backup Servicer agree as follows:

                                   ARTICLE I

                                   DEFINITIONS

        Section 1.01    DEFINED TERMS

        Unless otherwise defined herein, terms defined in the Loan Agreement
shall have their respective assigned meanings when used herein, and the
following terms shall have the following meanings:

        ABFS: American Business Financial Services, Inc., a Delaware corporation
and a Borrower.

        ACCEPTED SERVICING PRACTICES: With respect to any Mortgage Loan,
accepted and prudent mortgage servicing practices (including practices regarding
reconciliation of bank accounts, processing of mortgage payments, processing of
disbursements for tax and insurance payments, maintenance of mortgage loan
records, performance of collection efforts including disposition of delinquent
loans, foreclosure activities and disposition of real estate owned and
performance of investor accounting and reporting processes) of prudent mortgage
lending

<PAGE>

institutions which service mortgage loans of the same type as such Mortgage Loan
in the jurisdiction where the related Mortgaged Property is located and in a
manner at least equal in quality to the servicing that the Servicer, the
Administrative Borrower or HAC provided from the period of July 1, 2004 through
December 31, 2004 to mortgage loans which it owned in its own respective
servicing portfolio during such period.

        ADVANCES: As defined in the Loan Agreement.

        AGREEMENT: This Servicing Agreement including all exhibits hereto,
amendments hereof and supplements hereto.

        APPROVED MORTGAGE ORIGINATORS: Participating Banks (as defined in the
Loan Agreement) and mortgage loan origination companies that are Borrowers and
that are reasonably approved by the Agent in writing from time to time. The
initial Approved Mortgage Originators are Servicer, Administrative Borrower, HAC
and the Participating Banks.

        APPROVED MORTGAGE PURCHASERS: Purchasers of mortgage loans that are
Borrowers and that are reasonably approved by the Agent in writing from time to
time. The initial Approved Mortgage Purchasers are Servicer, Administrative
Borrower and HAC.

        APPROVED UNDERWRITING GUIDELINES: The underwriting guidelines of (a)
Approved Mortgage Purchasers, or (b) Approved Mortgage Originators, in each case
as reasonably approved in writing by the Agent.

        BACKUP SERVICING FEE: The fee payable to the Backup Servicer on each
Payment Date for its services as Backup Servicer hereunder, in an amount equal
to the greater of (a) the Minimum Backup Servicing Fee and (b) the Backup
Servicing Fee Rate accrued for one month (on the basis of a 360-day year and
twelve 30-day months) on the principal balance of the Mortgage Loans as of the
close of business on the Determination Date immediately preceding such Payment
Date; PROVIDED, HOWEVER, if the Servicer has been removed (with or without
cause) as Servicer or has resigned as Servicer or if the Servicer's term as
servicer has expired, and in any such case if a Backup Servicer is no longer
required hereunder, then the Minimum Backup Servicing Fee shall be $0 and the
Backup Servicing Fee Rate shall be 0.00% per annum.

        BACKUP SERVICING FEE RATE: 0.04% per annum.

        BANKRUPTCY COURT: United States Bankruptcy Court for the District of
Delaware.

        BEST'S: Best's Key Rating Guide, as the same shall be amended from time
to time.

        BUSINESS DAY: Any day other than (a) a Saturday or Sunday, (b) a day on
which the New York Stock Exchange, the Federal Reserve Bank of New York, the
Custodian or banking and savings and loan institutions in the State of New York,
Connecticut or California or the City of New York or the city or state in which
the Custodian's offices are located are closed, or (c) a day on which trading in
securities on the New York Stock Exchange or any other major securities exchange
in the United States is not conducted.

                                       -2-
<PAGE>

        CHAPTER 11 CASES: As defined in the Loan Agreement.

        CODE: The Internal Revenue Code of 1986, as amended from time to time.

        CONDEMNATION PROCEEDS: All awards or settlements in respect of a
Mortgaged Property, whether permanent or temporary, partial or entire, by
exercise of the power of eminent domain or condemnation, to the extent not
required to be released to a Mortgagor in accordance with the terms of the
related Mortgage Loan Documents.

        CUSTODIAL AGREEMENT: The Custodial Agreement, dated as of the date
hereof, among the Borrowers, the Custodian, the Servicer and the Agent, in form
and substance satisfactory to the Agent.

        CUSTODIAL LOAN TRANSMISSION: As defined in the Custodial Agreement.

        CUSTODIAN: J.P. Morgan Trust Company, N.A., its successors and permitted
assigns.

        DETERMINATION DATE: The last Business Day of the month immediately
preceding the month of the Payment Date.

        EFFECTIVE DATE: February 22, 2005.

        ESCROW ACCOUNT: The separate trust account or accounts created and
maintained pursuant to SECTION 4.06 which shall be entitled "American Business
Credit, Inc. Debtor in Possession Case 05-10206 Escrow Account, in trust for
American Business Mortgage Services, Inc. and HomeAmerican Credit, Inc. and
various Mortgagors" and shall be established at a Qualified Depository, each of
which accounts shall in no event contain funds in excess of the FDIC insurance
limits.

        ESCROW PAYMENTS: With respect to any Mortgage Loan, the amounts
constituting ground rents, taxes, assessments, water rates, sewer rents,
municipal charges, mortgage insurance premiums, fire and hazard insurance
premiums, condominium charges, and any other payments required to be escrowed by
the Mortgagor with the mortgagee pursuant to the Mortgage or any other document.

        EVENT OF DEFAULT: Any one of the conditions or circumstances enumerated
in SECTION 9.01.

        FANNIE MAE: Fannie Mae, or any successor thereto.

        FDIC: The Federal Deposit Insurance Corporation, or any successor
thereto.

        FIDELITY BOND: A fidelity bond to be maintained by the Servicer pursuant
to SECTION 4.10.

        FINAL ORDER: The order of the Bankruptcy Court in substantially the form
of the Interim Order (with only such modifications thereto as are satisfactory
in form and substance to

                                       -3-
<PAGE>

the Agent), as the same may be amended, modified or supplemented from time to
time with the express written joinder or consent of the Agent, the Lenders and
the Borrowers, approving the Advances made and to be made to the Borrowers in
accordance with the Loan Agreement and granting the Liens (as defined in the
Loan Agreement) contemplated thereby.

        FIRREA: The Financial Institutions Reform, Recovery, and Enforcement Act
of 1989, as amended from time to time.

        FREDDIE MAC: Freddie Mac, or any successor thereto.

        HAC: HomeAmerican Credit, Inc., a Pennsylvania corporation and a
Borrower.

        INSURANCE PROCEEDS: With respect to each Mortgage Loan, proceeds of
insurance policies insuring the Mortgage Loan or the related Mortgaged Property.

        INTERIM ORDER: The order of the Bankruptcy Court, as the same may be
amended, modified or supplemented from time to time with the express written
joinder or consent of the Agent, the Lenders and the Borrowers, approving the
Advances made and to be made to the Borrowers in accordance with the Loan
Agreement and granting the Liens (as defined in the Loan Agreement) contemplated
thereby.

        LIQUIDATION PROCEEDS: Cash received in connection with the liquidation
of a defaulted Mortgage Loan, whether through the sale or assignment of such
Mortgage Loan, trustee's sale, foreclosure sale or otherwise, other than amounts
received following the acquisition of an REO Property pursuant to SECTION 4.11.

        MERS: Mortgage Electronic Registration System, Inc., a corporation
organized and existing under the laws of the State of Delaware, or any successor
thereto.

        MERS DESIGNATED MORTGAGE LOAN: Any Mortgage Loan as to which the related
Mortgage or Assignment of Mortgage has been recorded in the name of MERS, as
agent for the holder from time to time of the Mortgage Note and which is
identified as a "MERS Designated Mortgage Loan" on the related Mortgage Loan
Data Transmission.

        MERS PROCEDURES MANUAL: As defined in the Loan Agreement.

        MERS SYSTEM: MERS mortgage electronic registry system, as more
particularly described in the MERS Procedures Manual.

        MINIMUM BACKUP SERVICING FEE: $5,500.

        MONTHLY PAYMENT: The scheduled monthly payment of principal and interest
on a Mortgage Loan as adjusted in accordance with changes in the Mortgage
Interest Rate pursuant to the provisions of the Mortgage Note for an adjustable
rate Mortgage Loan.

        MORTGAGE: With respect to a Mortgage Loan, the mortgage, deed of trust
or other instrument, as indicated on the Mortgage Loan Data Transmission, which
creates a valid

                                       -4-
<PAGE>

and perfected first priority or valid and perfected second priority Lien on the
fee simple or a leasehold estate in such real property.

        MORTGAGE COLLECTION ACCOUNT: The separate demand account or accounts
created and maintained pursuant to SECTION 4.04 which shall be entitled
"American Business Credit, Inc. Mortgage Collection Account in trust for
American Business Mortgage Services, Inc. and HomeAmerican Credit, Inc." and
shall be established at a Qualified Depository, each of which accounts shall in
no event contain funds in excess of the FDIC insurance limits.

        MORTGAGE FILE: Shall have the meaning assigned thereto in the Custodial
Agreement.

        MORTGAGE INTEREST RATE: The annual rate of interest borne on a Mortgage
Note, which shall be adjusted from time to time with respect to adjustable rate
Mortgage Loans.

        MORTGAGE LOAN: A mortgage loan which the Custodian has been or will be
instructed to hold for the Agent pursuant to the Custodial Agreement, and which
Mortgage Loan includes, without limitation, (a) a Mortgage Note, the related
Mortgage and all other Mortgage Loan Documents and (b) all right, title and
interest in and to the Mortgaged Property covered by such Mortgage.

        MORTGAGE LOAN DATA TRANSMISSION: Shall have the meaning assigned thereto
in the Custodial Agreement.

        MORTGAGE LOAN DOCUMENTS: With respect to a Mortgage Loan, the documents
comprising the Mortgage File for such Mortgage Loan.

        MORTGAGE NOTE: The original executed promissory note or other evidence
of the indebtedness of a mortgagor/borrower with respect to a Mortgage Loan.

        MORTGAGED PROPERTY: The real property (including all improvements,
buildings, fixtures, building equipment and personal property thereon and all
additions, alterations and replacements made at any time with respect to the
foregoing) and all other collateral securing repayment of the debt evidenced by
a Mortgage Note.

        MORTGAGOR: The obligor on a Mortgage Note.

        NONRECOVERABLE ADVANCE: Any expenses incurred pursuant to SECTION 4.08
which, in the good faith judgment of the Servicer, may not be ultimately
recoverable by the Servicer from Liquidation Proceeds. The determination by the
Servicer that it has made a Nonrecoverable Advance, shall be evidenced by an
Officer's Certificate of the Servicer delivered to the Administrative Borrower
and detailing the reasons for such determination.

        NOTICE DATE: Has the meaning specified in SECTION 11.11 hereof.

        OCC: Office of the Comptroller of the Currency, its successors and
assigns.

                                       -5-
<PAGE>

        OFFICER'S CERTIFICATE: A certificate signed by the Chairman of the
Board, the Vice Chairman of the Board, the President, a Senior Vice President or
a Vice President or by the Treasurer or the Secretary or one of the Assistant
Treasurers or Assistant Secretaries of the Servicer, and delivered to the
Administrative Borrower as required by this Agreement.

        OPINION OF COUNSEL: A written opinion of counsel, who may be an employee
of the party on behalf of whom the opinion is being given, in form and substance
reasonably acceptable to the party receiving such opinion letter.

        OTS: Office of Thrift Supervision, its successors and assigns.

        PASS-THROUGH TRANSFER: The sale or transfer of some or all of the
Mortgage Loans to a trust as part of a publicly issued or privately placed,
rated or unrated Mortgage pass-through transaction.

        PAYMENT DATE: The nineteenth (19th) day of any month, or if such
nineteenth (19th) day is not a Business Day, the first Business Day immediately
preceding such nineteenth (19th) day. The first Payment Date shall occur on
March 18, 2005.

        PERSON: Any individual, corporation, company, voluntary association,
partnership, joint venture, limited liability company, trust, unincorporated
association or government (or any agency, instrumentality or political
subdivision thereof).

        PRIMARY MORTGAGE INSURANCE POLICY: Each primary policy of mortgage
insurance, or any replacement policy therefore, if any.

        PRIME RATE: The prime rate of U.S. money center banks as published from
time to time in The Wall Street Journal.

        PRINCIPAL PREPAYMENT: Any payment or other recovery of principal on a
Mortgage Loan, full or partial, which is received in advance of its scheduled
due date, including any prepayment penalty or premium thereon and which is not
accompanied by an amount of interest representing scheduled interest due on any
date or dates in any month or months subsequent to the month of prepayment.

        QUALIFIED APPRAISER: An appraiser, duly appointed by the Servicer, 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 the Mortgage Loan, which appraiser and the appraisal
made by such appraiser both satisfy the requirements of Title XI of FIRREA and
the regulations promulgated thereunder, all as in effect on the date the
Mortgage Loan was originated.

        QUALIFIED DEPOSITORY: (a) The Custodian or (b) a depository, the
accounts of which are insured by the FDIC and the short term debt ratings and
the long term deposit ratings of which are rated in one of the two highest
rating categories by Standard & Poor's Ratings Services, a division of The
McGraw-Hill Companies Inc., Moody's Investors Service, Inc., and Fitch IBCA Inc.

                                       -6-
<PAGE>

        QUALIFIED INSURER: An insurance company (a) duly qualified as such under
the laws of the states in which the Mortgaged Property is located, (b) duly
authorized and licensed in such states to transact the applicable insurance
business and to write the insurance provided in accordance with the Approved
Underwriting Guidelines, (c) approved as an insurer by Fannie Mae and Freddie
Mac or by the Agent, and (d) whose claims paying ability is rated in the two
highest rating categories by any of the rating agencies with respect to primary
mortgage insurance and in the two highest rating categories by Best's with
respect to hazard and flood insurance.

        REMIC: A "real estate mortgage investment conduit" within the meaning of
Section 860D of the Code.

        REMIC PROVISIONS: The provisions of the Federal income tax law relating
to a REMIC, which appear at Section 860A through 860G of Subchapter M of Chapter
1, Subtitle A of the Code, and related provisions, and regulations, rulings or
pronouncements promulgated thereunder, as the foregoing may be in effect from
time to time.

        REO DISPOSITION: The final sale by the Servicer of any REO Property.

        REO DISPOSITION PROCEEDS: Amounts received by the Servicer in connection
with a related REO Disposition.

        REO MARKETING PROVISIONS: Has the meaning specified in SECTION 4.11
hereof.

        REO OPTION: Has the meaning specified in SECTION 4.11 hereof.

        REO PROPERTY: A Mortgaged Property acquired by the Servicer on behalf of
the applicable Borrower as described in SECTION 4.11.

        REPORT: Has the meaning specified in SECTION 5.02 hereof.

        SECURED PARTIES: The Agent, the Lenders, The Patriot Group, LLC and the
Clearwing Indemnified Parties.

        SERVICER EXTENSION NOTICE: Has the meaning specified in SECTION 10.01
hereof.

        SERVICING ADVANCES: All customary, reasonable and necessary "out of
pocket" costs and expenses (including reasonable attorneys' fees and
disbursements) incurred prior to, on and subsequent to the Effective Date in the
performance by the Servicer of its servicing obligations relating to each
Mortgage Loan, including, but not limited to, the cost of (a) the preservation,
restoration and protection of the Mortgaged Property, (b) any enforcement,
administrative or judicial proceedings, or any legal work or advice specifically
related to servicing the Mortgage Loans, including but not limited to,
foreclosures, bankruptcies, condemnations, drug seizures, elections,
foreclosures by subordinate or superior lienholders, and other legal actions
incidental to the servicing of the Mortgage Loans (provided that such expenses
are reasonable and that the Servicer specifies the Mortgage Loan(s) to which
such expenses relate), (c) the management and liquidation of the Mortgaged
Property if the Mortgaged

                                       -7-
<PAGE>

Property is acquired in full or partial satisfaction of the Mortgage, (d) taxes,
assessments, water rates, sewer rates and other charges which are or may become
a lien upon the Mortgaged Property, and Primary Mortgage Insurance Policy
premiums and fire and hazard insurance coverage and (e) compliance with the
obligations under SECTION 4.08.

        SERVICING FEE: With respect to each Mortgage Loan, the amount of the
annual fee the Borrowers shall pay to the Servicer, which shall, for a period of
one full month, be equal to one-twelfth of the product of (a) the applicable
Servicing Fee Rate and (b) the outstanding principal balance of such Mortgage
Loan. Such fee shall be payable monthly, computed on the basis of the same
principal amount and period respecting which any related interest payment on a
Mortgage Loan is computed. The obligation of the Borrowers to pay the Servicing
Fee is limited to, and the Servicing Fee is payable solely from, the interest
portion (not including recoveries of interest from Liquidation Proceeds or
otherwise) of such Monthly Payment collected by the Servicer, or as otherwise
provided under SECTION 4.05.

        SERVICING FEE RATE: The Servicing Fee Rate shall be a rate per annum
equal to 0.35% with respect to any Mortgage Loan; PROVIDED, HOWEVER, that if the
Backup Servicer has succeeded as the successor Servicer hereunder, the Servicing
Fee Rate shall be a rate per annum equal to 0.50% after the Servicing Transfer
Date, PROVIDED, HOWEVER, in the event of an Event of Default under the Loan
Agreement, the Servicing Fee Rate shall be a commercially reasonable rate or per
loan fee as agreed upon by the Backup Servicer and the Agent, who agree to act
in good faith based upon the then principal balance of the Mortgage Loans
outstanding at such time and anticipated balances going forward; and PROVIDED
FURTHER, that the 0.50% rate shall be applicable for a minimum of three (3)
months following such a Servicing Transfer Date.

        SERVICING FILE: With respect to each Mortgage Loan, the file retained by
the Servicer consisting of originals of all material documents in the Mortgage
File which are not delivered to a Custodian and copies of the Mortgage Loan
Documents set forth in SECTION 2 of the Custodial Agreement.

        SERVICING OFFICER: Any officer of the Servicer involved in, or
responsible for, the administration and servicing of the Mortgage Loans whose
name appears on a list of servicing officers furnished by the Servicer to the
Administrative Borrower upon request, as such list may from time to time be
amended.

        SERVICING TRANSFER COSTS: All reasonable costs and expenses incurred by
the Backup Servicer in connection with the transfer of servicing from a
predecessor Servicer, including, without limitation, any reasonable costs or
expenses associated with the complete transfer of all servicing data and the
completion, correction or manipulation of such servicing data as may be required
by the Backup Servicer to correct any errors or insufficiencies in the servicing
data or otherwise to enable the Backup Servicer to service the Mortgage Loans
properly and effectively and any fees of MERS, costs of preparing any
assignments of Mortgage, or fees and costs of filing any assignments of Mortgage
that may be required as a result of the transfer of servicing.

        SERVICING TRANSFER DATE: The date on which the Backup Servicer receives
the written notice of the termination of Servicer pursuant to SECTION 9.01
hereof.

                                       -8-
<PAGE>

        TRANSFER DATE: Has the meaning specified in SECTION 10.03 hereof.

        WHOLE LOAN TRANSFER: The sale or transfer of some or all of the
ownership interest in the Mortgage Loans by the applicable Borrower to one or
more third parties in whole loan or participation format.

                                   ARTICLE II

        SERVICING OF MORTGAGE LOANS; POSSESSION OF SERVICING FILES; BOOKS
                AND RECORDS; DELIVERY OF MORTGAGE LOAN DOCUMENTS

        Section 2.01    SERVICING OF MORTGAGE LOANS.

        From and after the Effective Date, the Servicer does hereby agree to
service the Mortgage Loans, but subject to the terms of this Agreement. The
rights of the Borrowers to receive payments with respect to the Mortgage Loans
shall be as set forth in this Agreement.

        Section 2.02    MAINTENANCE OF SERVICING FILES.

        The Servicer shall maintain a Servicing File consisting of all documents
necessary to service the Mortgage Loans. The possession of each Servicing File
by the Servicer is for the sole purpose of servicing the Mortgage Loan, and such
retention and possession by the Servicer is in a custodial capacity only. The
Servicer acknowledges that the ownership of each Mortgage Loan, including the
Mortgage Note, the Mortgage, all other Mortgage Loan Documents and all rights,
benefits, proceeds and obligations arising therefrom or in connection therewith,
has been vested in the applicable Borrower. All rights arising out of the
Mortgage Loans including, but not limited to, all funds received on or in
connection with the Mortgage Loans and all records or documents with respect to
the Mortgage Loans prepared by or which come into the possession of the Servicer
shall be received and held by the Servicer in trust for the exclusive benefit of
the applicable Borrower as the owner of the related Mortgage Loans. Any portion
of the related Servicing Files retained by the Servicer shall be appropriately
identified in the Servicer's computer system to clearly reflect the ownership of
the related Mortgage Loans by the applicable Borrower and the pledge thereof to
the Agent for the benefit of the Secured Parties. The Servicer shall release its
custody of the contents of the related Servicing Files only in accordance with
written instructions of the Administrative Borrower, except when such release is
required as incidental to the Servicer's servicing of the Mortgage Loans, such
written instructions shall not be required.

        Section 2.03    BOOKS AND RECORDS.

        The Servicer shall be responsible for maintaining, and shall maintain, a
complete set of books and records for the Mortgage Loans which shall be
appropriately identified in the Servicer's computer system to clearly reflect
the ownership of the Mortgage Loan by the applicable Borrower. In particular,
the Servicer shall maintain in its possession, available for inspection by the
Borrowers, or their designees and shall deliver to the Borrowers upon demand,
evidence of compliance with all Federal, state and local laws, rules and
regulations, as applicable, including but not limited to documentation as to the
method used in determining the

                                       -9-
<PAGE>

applicability of the provisions of the Flood Disaster Protection Act of 1973, as
amended, to the Mortgaged Property, documentation evidencing insurance coverage
and eligibility of any condominium project and periodic inspection reports as
required by SECTION 4.09. To the extent that original documents are not required
for purposes of realization of Liquidation Proceeds or Insurance Proceeds,
documents maintained by the Servicer may be in the form of microfilm or
microfiche or such other reliable means of recreating original documents,
including but not limited to, optical imagery techniques so long as the Servicer
complies with Accepted Servicing Practices.

        The Servicer shall maintain with respect to each Mortgage Loan and shall
make available for inspection by any Borrower or its designee the related
Servicing File (or copies thereof) during the time such Borrower retains
ownership of a Mortgage Loan and thereafter in accordance with applicable laws
and regulations.

        Section 2.04    DELIVERY OF MORTGAGE LOAN DOCUMENTS.

        The Servicer shall forward to the Custodian on behalf of the applicable
Borrower and for the benefit of the Secured Parties original documents
evidencing an assumption, modification, consolidation or extension of any
Mortgage Loan entered into in accordance with SECTION 4.01 or SECTION 6.01
promptly after their execution; PROVIDED, HOWEVER, that the Servicer shall
provide the Custodian on behalf of the applicable Borrower and for the benefit
of the Secured Parties with a certified true copy of any such document submitted
for recordation promptly after its execution, and shall provide the original of
any document submitted for recordation or a copy of such document certified by
the appropriate public recording office to be a true and complete copy of the
original within 180 days of its execution. If delivery is not completed within
180 days solely due to delays in making such delivery by reason of the fact that
such documents shall not have been returned by the appropriate recording office,
the Servicer shall continue to use its best efforts to effect delivery as soon
as possible thereafter.

        From time to time the Servicer may have a need for Mortgage Loan
Documents to be released by the Custodian. If the Servicer shall require any of
the Mortgage Loan Documents, the Servicer shall notify the Administrative
Borrower of such request, and the Administrative Borrower shall thereafter
notify the Custodian in writing of such request in the form of the request for
release provided for in the Custodial Agreement. The Custodian shall deliver to
the Servicer within five (5) Business Days, any requested Mortgage Loan Document
previously delivered to the Custodian but only with the consent of the
Administrative Borrower and Agent, provided that such documentation is promptly
returned to the Custodian when the Servicer no longer requires possession of the
document, and provided that during the time that any such documentation is held
by the Servicer, such possession is in trust for the benefit of the applicable
Borrower and Secured Parties.

        Section 2.05    QUALITY CONTROL PROCEDURES.

        The Servicer shall maintain at all times an internal quality control
program that verifies, on a regular basis, the existence and accuracy of the
legal documents, credit documents, property appraisals, and underwriting
decisions. The program must be capable of evaluating and monitoring the overall
quality of its servicing activities. The purpose of the program is to ensure

                                       -10-
<PAGE>

that the Mortgage Loans are serviced in accordance with prudent mortgage banking
practices and accounting principles; guard against dishonest, fraudulent, or
negligent acts; and guard against errors and omissions by officers, employees,
or other authorized persons.

                                  ARTICLE III

                 REPRESENTATIONS AND WARRANTIES OF THE SERVICER

        The Servicer represents, warrants and covenants to the Borrowers that as
of the Effective Date or as of such date specifically provided herein:

        (a) The Servicer is a validly existing corporation in good standing
under the laws of the state of its organization and is qualified to transact
business in, is in good standing under the laws of, and possesses all licenses
necessary for the conduct of its business in, each state in which any Mortgaged
Property is located or is otherwise exempt or not required under applicable law
to effect such qualification or license and no demand for such qualification or
license has been made upon the Servicer by any such state, and in any event the
Servicer is in compliance with the laws of each such State to the extent
necessary to ensure the enforceability of each Mortgage Loan and the servicing
of the Mortgage Loans in accordance with the terms of this Agreement;

        (b) Subject to entry of the Interim Order (and, when applicable, the
Final Order), the Servicer has full power and authority to execute, deliver and
perform, and to enter into and consummate all transactions contemplated by this
Agreement and to conduct its business as presently conducted, has duly
authorized the execution, delivery and performance of this Agreement, has duly
executed and delivered this Agreement, and this Agreement constitutes a legal,
valid and binding obligation of the Servicer, enforceable against it in
accordance with its terms subject to bankruptcy laws and other similar laws of
general application affecting rights of creditors and subject to the application
of the rules of equity, including those respecting the availability of specific
performance;

        (c) None of the execution and delivery of this Agreement, the
consummation of the transactions contemplated thereby and hereby, or the
fulfillment of or compliance with the terms and conditions of this Agreement
will conflict with any of the terms, conditions or provisions of the Servicer's
articles of incorporation or by-laws or materially conflict with or result in a
material breach of any of the terms, conditions or provisions of any legal
restriction or any agreement or instrument to which the Servicer is now a party
or by which it is bound (other than conflicts and breaches the enforcement of
which will be stayed by virtue of the filing of the Chapter 11 Cases), or
constitute a default or result in an acceleration under any of the foregoing, or
result in the material violation of any law, rule, regulation, order, judgment
or decree to which the Servicer or its property is subject;

        (d) Except as disclosed in the Securities Exchange Act of 1934 reports
of ABFS and other than the Chapter 11 Cases, there is no litigation pending or
threatened with respect to the Servicer which is reasonably likely to have a
material adverse effect on the execution,

                                       -11-
<PAGE>

delivery or enforceability of this Agreement, or which is reasonably likely to
have a material adverse effect on the financial condition of the Servicer;

        (e) Subject to entry of the Interim Order (and, when applicable, the
Final Order), no consent, approval, authorization or order of any court or
governmental agency or body is required for the execution, delivery and
performance by the Servicer of or compliance by the Servicer with this Agreement
or the consummation of the transactions contemplated by this Agreement except
for consents, approvals, authorizations and orders which have been obtained;

        (f) The consummation of the transactions contemplated by this Agreement
is in the ordinary course of business of the Servicer;

        (g) The collection and servicing practices used by the Servicer, with
respect to each Mortgage Note and Mortgage have been in all material respects
legal, proper and prudent in the mortgage servicing business. With respect to
escrow deposits and payments that the Servicer collects, all such payments are
in the possession of, or under the control of, the Servicer, and there exist no
deficiencies in connection therewith for which customary arrangements for
repayment thereof have not been made. No escrow deposits or other charges or
payments due under the Mortgage Note have been capitalized under any Mortgage or
the related Mortgage Note;

        (h) The Servicer does not believe, nor does it have any cause or reason
to believe, that it cannot perform each and every covenant contained in this
Agreement;

        (i) No statement, report or other document furnished or to be furnished
pursuant to the Agreement contains or will contain any statement that is or will
be inaccurate or misleading in any material respect or omits to state a material
fact required to be stated therein or necessary to make the information and
statements therein not misleading;

        (j) No fraud or misrepresentation or omission of a material fact with
respect to the servicing of a Mortgage Loan has taken place on the part of the
Servicer;

        (k) At the time Servicer commenced servicing the Mortgage Loans, either
(i) each Mortgagor was properly notified with respect to Servicer's servicing of
the related Mortgage Loan in accordance with the Cranston Gonzalez National
Affordable Housing Act of 1990, as the same may be amended from time to time,
and the regulations provided in accordance with the Real Estate Settlement
Procedures Act or (ii) such notification was not required; and

        (l) At the time Servicer commenced servicing the Mortgage Loans, all
applicable taxing authorities and insurance companies (including primary
mortgage insurance policy insurers, if applicable) and/or agents were notified
of the transfer of the servicing of the Mortgage Loans to Servicer, or its
designee, and Servicer currently receives all related notices, tax bills and
insurance statements (either directly or indirectly through third party tax
services). Additionally, any and all costs, fees and expenses associated with
the Servicer's commencement of the servicing of the Mortgage Loans, including
the costs of any insurer notifications, the transfer or implementation of tax
service contracts, flood certification contracts, and any and all

                                       -12-
<PAGE>

other servicing transfer-related costs and expenses have been paid for by the
Servicer and will, in no event, be the responsibility of the Borrowers.

        (m) To the extent any MERS Designated Mortgage Loan is serviced under
this Agreement, the Servicer will be a member of MERS in good standing and will
comply in all material respects with the MERS Procedures Manual in connection
with the servicing of the MERS Designated Mortgage Loans.

                                   ARTICLE IV

                 ADMINISTRATION AND SERVICING OF MORTGAGE LOANS

        Section 4.01    SERVICER TO ACT AS SERVICER.

        The Servicer, as independent contract servicer, shall service and
administer the Mortgage Loans in accordance with this Agreement and with
Accepted Servicing Practices, and shall have full power and authority, acting
alone, to do or cause to be done any and all things in connection with such
servicing and administration which the Servicer may deem necessary or desirable
and consistent with the terms of this Agreement and with Accepted Servicing
Practices and shall exercise the same care that it customarily employs for its
own account. Except as set forth in this Agreement, the Servicer shall service
the Mortgage Loans in accordance with Accepted Servicing Practices, which
include, but are not limited to, provisions regarding the liquidation of
Mortgage Loans, the collection of Mortgage Loan payments, the payment of taxes,
insurance and other charges, the maintenance of hazard insurance with a
Qualified Insurer, the maintenance of fidelity bond and errors and omissions
insurance, inspections, the restoration of Mortgaged Property, insurance claims,
and title insurance, management of REO Property, permitted withdrawals with
respect to REO Property, liquidation reports, and reports of foreclosures and
abandonments of Mortgaged Property, the transfer of Mortgaged Property, the
release of Mortgage Loan Documents, annual statements, and examination of
records and facilities. In the event of any conflict, inconsistency or
discrepancy between any of the servicing provisions of this Agreement and
Accepted Servicing Practices, the provisions of this Agreement shall control and
be binding upon the Borrowers and the Servicer. The Borrowers may, upon the
written consent of the Agent, deliver powers-of-attorney to the Servicer
sufficient to allow the Servicer as servicer to execute all documentation
requiring execution on behalf of Borrowers with respect to the servicing of the
Mortgage Loans, including satisfactions, partial releases, modifications and
foreclosure documentation or, in the alternative, shall as promptly as
reasonably possible, execute and return such documentation to the Servicer.

        Consistent with the terms of this Agreement and Accepted Servicing
Practices, the Servicer may waive, modify or vary any term of any Mortgage Loan
or consent to the postponement of any such term or in any manner grant
indulgence to any Mortgagor but only if (i) in the Servicer's reasonable and
prudent determination such waiver, modification, postponement or indulgence is
not materially adverse to the applicable Borrower and (ii) the Servicer has
obtained the prior written consent of the Administrative Borrower and Agent.
Without limiting the generality of the foregoing, upon receipt of a Principal
Prepayment in full and deposit of same in the Mortgage Collection Account, the
Servicer shall continue, and is

                                       -13-
<PAGE>

hereby authorized and empowered, to prepare, execute and deliver, all
instruments of satisfaction or cancellation, or of partial or full release,
discharge and all other comparable instruments, with respect to the Mortgage
Loans and with respect to the Mortgaged Properties in accordance with the terms
of this Agreement and Accepted Servicing Practices.

        The Servicer shall perform all of its servicing responsibilities
hereunder or may, with the Administrative Borrower's, the Backup Servicer's and
Agent's prior written approval, cause a subservicer (other than the
Administrative Borrower or HAC, which may act as subservicer without such prior
written approval) to perform any such servicing responsibilities on its behalf
pursuant to a written subservicing agreement approved in writing by, and
assigned to, the Agent, but the use by the Servicer of a subservicer shall not
release the Servicer from any of its obligations hereunder and the Servicer
shall remain responsible hereunder for all acts and omissions of each
subservicer as fully as if such acts and omissions were those of the Servicer.
Any such subservicer that the Administrative Borrower and Agent shall approve
shall agree in writing to conform to the Accepted Servicing Practices. The
Servicer shall pay all fees and expenses of each subservicer from its own funds,
and a subservicer's fee shall not exceed the Servicing Fee.

        At the cost and expense of the Servicer, without any right of
reimbursement from the Mortgage Collection Account, the Servicer shall be
entitled to terminate the rights and responsibilities of a subservicer and
arrange, with the Administrative Borrower's, the Backup Servicer's and Agent's
prior written approval, for any servicing responsibilities to be performed by a
successor subservicer meeting the requirements in the preceding paragraph,
PROVIDED, HOWEVER, that nothing contained herein shall be deemed to prevent or
prohibit the Servicer, at the Servicer's option, from electing to service the
related Mortgage Loans itself. In the event that the Servicer's responsibilities
and duties under this Agreement are terminated pursuant to SECTIONS 8.04, 9.01
OR 10.02, and if requested to do so in writing by the Administrative Borrower,
the Backup Servicer and the Agent, the Servicer shall at its own cost and
expense terminate the rights and responsibilities of each subservicer effective
as of the date of termination of the Servicer. The Servicer shall pay all fees,
expenses or penalties necessary in order to terminate the rights and
responsibilities of each subservicer from the Servicer's own funds without
reimbursement from the Borrowers or Agent.

        Notwithstanding any of the provisions of this Agreement relating to
agreements or arrangements between the Servicer and a subservicer or any
reference herein to actions taken through a subservicer or otherwise, the
Servicer shall not be relieved of its obligations to the Borrowers and Agent and
the Backup Servicer and shall be obligated to the same extent and under the same
terms and conditions as if it alone were servicing and administering the
Mortgage Loans. The Servicer shall be entitled to enter into an agreement with a
subservicer for indemnification of the Servicer by the subservicer and nothing
contained in this Agreement shall be deemed to limit or modify such
indemnification.

        Any subservicing agreement and any other transactions or services
relating to the Mortgage Loans involving a subservicer shall be deemed to be
between such subservicer and Servicer alone, and the Borrowers shall have no
obligations, duties or liabilities with respect to such subservicer including no
obligation, duty or liability of Borrowers to pay such subservicer's fees and
expenses. For purposes of distributions by the Servicer pursuant to this
Agreement, the

                                       -14-
<PAGE>

Servicer shall be deemed to have received a payment on a Mortgage Loan when a
subservicer has received such payment.

        Section 4.02    COLLECTION OF MORTGAGE LOAN PAYMENTS.

        Continuously from the Effective Date until the date each Mortgage Loan
ceases to be subject to this Agreement, the Servicer will proceed with
reasonable diligence to collect all payments due under each Mortgage Loan when
the same shall become due and payable and shall, to the extent such procedures
shall be consistent with this Agreement and the terms and provisions of related
Primary Mortgage Insurance Policy, if any, follow such collection procedures as
it follows with respect to mortgage loans comparable to the Mortgage Loans and
held for its own account and in accordance with Accepted Servicing Practices.
Further, the Servicer will take reasonable care in ascertaining and estimating
annual ground rents, taxes, assessments, water rates, fire and hazard insurance
premiums, mortgage insurance premiums, and all other charges that, as provided
in the Mortgage, will become due and payable to the end that the installments
payable by the Mortgagors will be sufficient to pay such charges as and when
they become due and payable.

        Section 4.03    REALIZATION UPON DEFAULTED MORTGAGE LOANS.

        The Servicer shall use its reasonable efforts, consistent with Accepted
Servicing Practices, to foreclose upon or otherwise comparably convert the
ownership of properties securing such of the Mortgage Loans as come into and
continue in default and as to which no satisfactory arrangements can be made for
collection of delinquent payments pursuant to SECTION 4.01. The Servicer shall
use its reasonable efforts to realize upon defaulted Mortgage Loans in such
manner as will maximize the receipt of principal and interest by the applicable
Borrower and the Secured Parties, taking into account, among other things, the
timing of foreclosure proceedings. The foregoing is subject to the provisions
that, in any case in which Mortgaged Property shall have suffered damage, the
Servicer shall not be required to expend its own funds toward the restoration of
such property unless it shall determine in its discretion (i) that such
restoration will increase the proceeds of liquidation of the related Mortgage
Loan to the applicable Borrower and the Secured Parties after reimbursement to
itself for such expenses, and (ii) that such expenses will be recoverable by the
Servicer through Insurance Proceeds or Liquidation Proceeds from the related
Mortgaged Property, as contemplated in SECTION 4.05. The Servicer shall notify
the Administrative Borrower and Agent in writing of the commencement of
foreclosure proceedings. The Servicer shall be responsible for all costs and
expenses incurred by it in any such proceedings or functions as Servicing
Advances; PROVIDED, HOWEVER, that it shall be entitled to reimbursement therefor
from the related Mortgaged Property, as contemplated in SECTION 4.05.
Notwithstanding anything to the contrary contained herein, in connection with a
foreclosure or acceptance of a deed in lieu of foreclosure, in the event the
Servicer has reasonable cause to believe that a Mortgaged Property is
contaminated by hazardous or toxic substances or wastes, or if the
Administrative Borrower or Agent otherwise requests an environmental inspection
or review of such Mortgaged Property, such an inspection or review is to be
conducted by a qualified inspector. Upon completion of the inspection, the
Servicer shall promptly provide the Administrative Borrower and Agent with a
written report of the environmental inspection. After reviewing the
environmental inspection report, the

                                       -15-
<PAGE>

Administrative Borrower, after receipt of written consent of the Agent, and
Agent shall determine how the Servicer shall proceed with respect to the
Mortgaged Property.

        Section 4.04    ESTABLISHMENT OF MORTGAGE COLLECTION ACCOUNTS; DEPOSITS
                        IN MORTGAGE COLLECTION ACCOUNTS.

        The Servicer shall segregate and hold all funds collected and received
pursuant to each Mortgage Loan separate and apart from any of its own funds and
general assets and shall establish and maintain one or more Mortgage Collection
Accounts. Each Mortgage Collection Account shall be established with a Qualified
Depository. Funds deposited in the Mortgage Collection Account may be drawn on
only by the Agent in accordance with SECTION 4.05; PROVIDED, HOWEVER, in the
event the Backup Servicer becomes the successor Servicer hereunder, the Backup
Servicer may cause to be made withdrawals from the Mortgage Collection Account
in accordance with SECTION 4.05. The creation of any Mortgage Collection Account
shall be evidenced by a Deposit Account Control Agreement in the form shown in
EXHIBIT A hereto. The original of such Deposit Account Control Agreement shall
be delivered to the Administrative Borrower and Agent upon request. In the event
the Backup Servicer becomes the successor Servicer hereunder, it shall have the
right to transfer the Mortgage Collection Account to a Qualified Depository of
its choosing; PROVIDED, HOWEVER, that it shall give notice to the Administrative
Borrower and Agent of any proposed change of the location of the Mortgage
Collection Account prior to any change thereof.

        The Servicer shall deposit in the Mortgage Collection Account(s) no
later than one (1) Business Day after receipt and retain therein the following
payments and collections:

                (i)     all payments on account of principal and interest,
including Principal Prepayments, on the Mortgage Loans;

                (ii)    all Liquidation Proceeds and REO Disposition Proceeds;

                (iii)   any net amounts received by the Servicer in connection
with any REO Property pursuant to SECTION 4.11;

                (iv)    all Insurance Proceeds including amounts required to be
deposited pursuant to SECTIONS 4.08 AND 4.10, other than proceeds to be held in
the Escrow Account and applied to the restoration or repair of the Mortgaged
Property or released to the Mortgagor in accordance with the Servicer's normal
servicing procedures, the loan documents or applicable law;

                (v)     all Condemnation Proceeds affecting any Mortgaged
Property other than proceeds to be held in the Escrow Account and applied to the
restoration or repair of the Mortgaged Property or released to the Mortgagor in
accordance with the Servicer's normal servicing procedures, the loan documents
or applicable law; and

                (vi)    any amounts required to be deposited in the Mortgage
Collection Account pursuant to SECTION 6.02.

                                       -16-
<PAGE>

        The foregoing requirements for deposit in the Mortgage Collection
Account shall be exclusive, it being understood and agreed that, without
limiting the generality of the foregoing, payments in the nature of late payment
charges and assumption fees, to the extent permitted by SECTION 6.01, need not
be deposited by the Servicer in the Mortgage Collection Account. Any interest
paid on funds deposited in the Mortgage Collection Account by the Qualified
Depository shall accrue to the benefit of the Servicer and the Servicer shall be
entitled to be paid the amount of such interest from the Mortgage Collection
Account pursuant to SECTION 4.05(iii).

                Section 4.05    PERMITTED WITHDRAWALS FROM THE MORTGAGE
                                COLLECTION ACCOUNT.

        The Agent, or in the event the Backup Servicer becomes the successor
Servicer hereunder, the Backup Servicer, may, from time to time, cause to be
made withdrawals from the Mortgage Collection Account for the following
purposes:

                (i)     to make payments in the amounts and in the manner
provided for in SECTION 5.01;

                (ii)    to reimburse Servicer for unreimbursed Servicing
Advances, the Servicer's right to reimburse itself pursuant to this subclause
(ii) with respect to any Mortgage Loan being limited to excess Liquidation
Proceeds, Condemnation Proceeds and Insurance Proceeds (after application of all
such amounts to principal, interest on late fees on the related Mortgage Loan)
related to such Mortgage Loan. The Servicer will provide the Administrative
Borrower and Agent with copies of invoices, bills and other documentation
relating to Servicing Advances that are to be reimbursed from the Mortgage
Collection Account, in a form that would permit the Borrowers or Agent to fully
recover any amounts due pursuant to any insurance policies. In no instance shall
Servicing Advances related to a Mortgage Loan be reimbursed from payments or
proceeds of any other Mortgage Loan;

                (iii)   to pay the Servicer any interest earned on the balance
in the Mortgage Collection Account;

                (iv)    only if the Servicer is the Back-up Servicer, to
reimburse the Servicer for any Nonrecoverable Advances made by it;

                (v)     to transfer funds to another Qualified Depository in
accordance with SECTION 4.09 hereof;

                (vi)    to remove funds inadvertently placed in the Mortgage
Collection Account in error by the Servicer; and

                (vii)   to clear and terminate the Mortgage Collection Account
upon the termination of this Agreement.

                Section 4.06    ESTABLISHMENT OF ESCROW ACCOUNTS; DEPOSITS IN
                                ESCROW ACCOUNTS.

                                       -17-

<PAGE>

        The Servicer shall segregate and hold all funds collected and received
pursuant to each Mortgage Loan which constitute Escrow Payments separate and
apart from any of its own funds and general assets and shall establish and
maintain one or more Escrow Accounts. Each Escrow Account shall be established
with a Qualified Depository. Funds deposited in an Escrow Account may be drawn
on by the Servicer in accordance with SECTION 4.07. The creation of any Escrow
Account shall be evidenced by a letter agreement in the form shown in EXHIBIT B.
The original of such letter agreement shall be furnished to the Administrative
Borrower, the Backup Servicer and Agent upon request.

        The Servicer shall deposit in the Escrow Account or Accounts on a daily
basis and retain therein:

                (i)     all Escrow Payments collected on account of the Mortgage
Loans, for the purpose of effecting timely payment of any items as are required
under the terms of this Agreement;

                (ii)    all Insurance Proceeds which are to be applied to the
restoration or repair of any Mortgaged Property; and

                (iii)   all Servicing Advances for Mortgagors whose Escrow
Payments are insufficient to cover escrow disbursements.

        The Servicer shall make withdrawals from an Escrow Account only to
effect such payments as are required under this Agreement, and for such other
purposes as shall be as set forth in and in accordance with SECTION 4.07. The
Servicer shall be entitled to retain or be paid any interest paid on funds
deposited in an Escrow Account by the Qualified Depository other than interest
on escrowed funds required by law to be paid to the Mortgagor and, to the extent
required by law, the Servicer shall pay interest on escrowed funds to the
Mortgagor notwithstanding that the Escrow Account is non-interest bearing or
that interest paid thereon is insufficient for such purposes.

        Section         4.07 PERMITTED WITHDRAWALS FROM ESCROW ACCOUNT.

        Withdrawals from the Escrow Account may be made by the Servicer only:

                (i)     to effect timely payments of ground rents, taxes,
assessments, water rates, fire and hazard insurance premiums, Primary Mortgage
Insurance Policy premiums, if applicable, and comparable items;

                (ii)    to reimburse Servicer for any Servicing Advance made by
Servicer with respect to a related Mortgage Loan but only from amounts received
on the related Mortgage Loan which represent late payments or collections of
Escrow Payments thereunder;

                (iii)   to refund to the Mortgagor any funds as may be
determined to be overages;

                                       -18-
<PAGE>

                (iv)    for transfer to the Mortgage Collection Account in
connection with an acquisition of REO Property;

                (v)     for application to restoration or repair of the
Mortgaged Property securing a Mortgage Loan to the extent that the applicable
Escrow Payments relate to such Mortgage Loan;

                (vi)    to pay to the Servicer, or to the Mortgagor to the
extent required by law, any interest paid on the funds deposited in the Escrow
Account;

                (vii)   to pay to the Mortgagors or other parties Insurance
Proceeds deposited in accordance with SECTION 4.06;

                (viii)  to remove funds inadvertently placed in an Escrow
Account in error by the Servicer; and

                (ix)    to clear and terminate the Escrow Account on the
termination of this Agreement.

        As part of its servicing duties, the Servicer shall pay to the
Mortgagors interest on funds in an Escrow Account, to the extent required by
law, and to the extent that interest earned on funds in the Escrow Account is
insufficient, shall pay such interest from its own funds, without any
reimbursement therefor.

        Section         4.08 PAYMENT OF TAXES, INSURANCE AND OTHER CHARGES;
                        COLLECTIONS THEREUNDER.

        With respect to each Mortgage Loan, the Servicer shall maintain accurate
records reflecting the status of ground rents, taxes, assessments, water rates
and other charges which are or may become a lien upon the Mortgaged Property and
the status of fire and hazard insurance coverage and shall obtain, from time to
time, all bills for the payment of such charges, including renewal premiums and
shall effect payment thereof prior to the applicable penalty or termination date
and at a time appropriate for securing maximum discounts allowable, employing
for such purpose deposits of the Mortgagor in the Escrow Account which shall
have been estimated and accumulated by the Servicer in amounts sufficient for
such purposes, as allowed under the terms of the Mortgage or applicable law. To
the extent that the Mortgage does not provide for Escrow Payments, the Servicer
shall determine that any such payments are made by the Mortgagor at the time
they first become due. The Servicer assumes full responsibility for the timely
payment of all such bills and shall effect timely payments of all such bills
irrespective of the Mortgagor's faithful performance in the payment of same or
the making of the Escrow Payments and shall make advances from its own funds to
effect such payments.

        Section 4.09    MAINTENANCE OF HAZARD INSURANCE.

        The Servicer shall cause to be maintained for each Mortgage Loan fire
and hazard insurance with extended coverage as is customary in the area where
the Mortgaged Property is located in an amount which is equal to the lesser of
(i) the maximum insurable value of the improvements securing such Mortgage Loan
or (ii) the greater of (a) the outstanding principal

                                       -19-
<PAGE>

balance of the Mortgage Loan, and the percentage such that the proceeds thereof
shall be sufficient to prevent the Mortgagor and/or the Mortgagee from becoming
a co-insurer. If the Mortgaged Property is in an area identified in the Federal
Register by the Federal Emergency Management Agency as being a special flood
hazard area that has federally-mandated flood insurance requirements, the
Servicer will cause to be maintained a flood insurance policy meeting the
requirements of the current guidelines of the Federal Insurance Administration
with a generally acceptable insurance carrier, in an amount representing
coverage not less than the least of (i) the outstanding principal balance of the
Mortgage Loan, (ii) the maximum insurable value of the improvements securing
such Mortgage Loan or (iii) the maximum amount of insurance which is available
under the Flood Disaster Protection Act of 1973, as amended. The Servicer shall
also maintain on the REO Property, fire and hazard insurance with extended
coverage in an amount which is at least equal to the maximum insurable value of
the improvements which are a part of such property, liability insurance and, to
the extent required and available under the Flood Disaster Protection Act of
1973, as amended, flood insurance in an amount as provided above. Any amounts
collected by the Servicer under any such policies other than amounts to be
deposited in the Escrow Account and applied to the restoration or repair of the
Mortgaged Property or REO Property, or released to the Mortgagor in accordance
with the Servicer's normal servicing procedures, shall be deposited in the
Mortgage Collection Account, subject to withdrawal pursuant to SECTION 4.05. It
is understood and agreed that no other additional insurance need be required by
the Servicer or the Mortgagor or maintained on property acquired in respect of
the Mortgage Loans, other than pursuant to such applicable state or Federal laws
and regulations as shall at any time be in force and as shall require such
additional insurance. All such policies shall be endorsed with standard
mortgagee clauses with loss payable to the Servicer and its successors and/or
assigns and shall provide for at least thirty (30) days' prior written notice of
any cancellation, reduction in the amount or material change in coverage to the
Servicer. The Servicer shall not interfere with the Mortgagor's freedom of
choice in selecting either his insurance carrier or agent, PROVIDED, HOWEVER,
that the Servicer shall not accept any such insurance policies from insurance
companies unless such companies currently reflect a General Policy Rating in
Best's currently acceptable to Fannie Mae and are licensed to do business in the
state wherein the property subject to the policy is located.

        Section 4.10    FIDELITY BOND, ERRORS AND OMISSIONS INSURANCE.

        The Servicer shall maintain, at its own expense, a blanket fidelity bond
and an errors and omissions insurance policy, with broad coverage with
responsible companies on all officers, employees or other persons acting in any
capacity with regard to the Mortgage Loans and who handle funds, money,
documents and papers relating to the Mortgage Loans. The Fidelity Bond and
errors and omissions insurance shall be in the form of the Mortgage Banker's
Blanket Bond and shall protect and insure the Servicer against losses, including
forgery, theft, embezzlement, fraud, errors and omissions and negligent acts of
such persons. Such Fidelity Bond and errors and omissions insurance shall also
protect and insure the Servicer against losses in connection with the failure to
maintain any insurance policies required pursuant to this Agreement and the
release or satisfaction of a Mortgage Loan without having obtained payment in
full of the indebtedness secured thereby. No provision of this SECTION 4.10
requiring the Fidelity Bond and errors and omissions insurance shall diminish or
relieve the Servicer from its duties and obligations as set forth in this
Agreement. The minimum coverage under any such

                                       -20-
<PAGE>

Fidelity Bond and insurance policy shall be at least equal to the corresponding
amounts required under Accepted Servicing Practices. The Servicer shall, upon
request of Agent, deliver to the Agent a certificate from the surety and the
insurer as to the existence of the Fidelity Bond and errors and omissions
insurance policy and shall obtain a statement from the surety and the insurer
that such Fidelity Bond or insurance policy shall in no event be terminated or
materially modified without thirty (30) days' prior written notice to the
Administrative Borrower and Agent. The Servicer shall notify the Administrative
Borrower and Agent within five (5) Business Days of receipt of notice that such
Fidelity Bond or insurance policy will be, or has been, materially modified or
terminated. The Administrative Borrower, Agent and their respective successors
or assigns as their interests may appear must be named as loss payees on the
Fidelity Bond and as additional insured on the errors and omissions policy.

        Section 4.11    TITLE, MANAGEMENT AND DISPOSITION OF REO PROPERTY.

        In the event that title to any Mortgaged Property is acquired in
foreclosure or by deed in lieu of foreclosure, the deed or certificate of sale
shall be taken in the name of the applicable Borrower or its designees as
designated in writing by Agent. Any such Person or Persons holding such title
other than the applicable Borrower shall acknowledge in writing that such title
is being held as nominee for the benefit of such Borrower and the Secured
Parties.

        The Servicer shall notify the Administrative Borrower and Agent in
accordance with Accepted Servicing Practices of each acquisition of REO Property
upon such acquisition, and thereafter assume the responsibility for marketing
such REO Property in accordance with Accepted Servicing Practices. Thereafter,
the Servicer shall continue to provide certain administrative services to the
applicable Borrower and Agent relating to such REO Property as set forth in this
SECTION 4.11. The REO Property must be sold within three (3) years following the
end of the calendar year of the date of acquisition, unless a REMIC election has
been made with respect to the arrangement under which the Mortgage Loans and REO
Property are held and (i) the applicable Borrower and Agent shall have been
supplied with an Opinion of Counsel to the effect that the holding by the
related trust of such Mortgaged Property subsequent to such three-year period
(and specifying the period beyond such three-year period for which the Mortgaged
Property may be held) will not result in the imposition of taxes on "prohibited
transactions" of the related trust as defined in Section 860F of the Code, or
cause the related REMIC to fail to qualify as a REMIC, in which case the related
trust may continue to hold such Mortgaged Property (subject to any conditions
contained in such Opinion of Counsel), or (ii) the Administrative Borrower (at
the Servicer's expense) or the Servicer shall have applied for, prior to the
expiration of such three-year period, an extension of such three-year period in
the manner contemplated by Section 856(e)(3) of the Code, in which case the
three-year period shall be extended by the applicable period. If a period longer
than three (3) years is permitted under the foregoing sentence and is necessary
to sell any REO Property, (i) the Servicer shall report monthly to the
Administrative Borrower and Agent as to progress being made in selling such REO
Property and (ii) if, with the written consent of the Administrative Borrower
and Agent, a purchase money mortgage is taken in connection with such sale, such
purchase money mortgage shall name the Servicer as mortgagee, and such purchase
money mortgage shall not be held pursuant to this Agreement, but instead a
separate participation agreement between the Servicer and the applicable
Borrower shall be entered into with respect to such purchase money mortgage.

                                       -21-
<PAGE>

        Notwithstanding any other provision of this Agreement, if a REMIC
election has been made, no Mortgaged Property held by a REMIC shall be rented
(or allowed to continue to be rented) or otherwise used for the production of
income by or on behalf of the related trust or sold in such a manner or pursuant
to any terms that would (i) cause such Mortgaged Property to fail to qualify at
any time as "foreclosure property" within a meaning of Section 860G(a)(8) of the
Code, (ii) subject the related trust to the imposition of any Federal or state
income taxes on "net income from foreclosure property" with respect to such
Mortgaged Property within the meaning of Section 860G(c) of the Code, or (iii)
cause the sale of such Mortgaged Property to result in the receipt by the
related trust or any income from non-permitted assets as described in Section
860F(a) (2)(B) of the Code, unless the Servicer has agreed to indemnify and hold
harmless the related trust with respect to the imposition of any such taxes.

        The Servicer shall, either itself or through an agent selected by the
Servicer, and in accordance with the Accepted Servicing Practices, manage,
conserve, protect and operate each REO Property in the same manner that it
manages, conserves, protects and operates other foreclosed property for its own
account, and in the same manner that similar property in the same locality as
the REO Property is managed. Each REO Disposition shall be carried out by the
Servicer at such price and upon such terms and conditions as the Servicer deems
to be in the best interest of the applicable Borrower and the Secured Parties.
The REO Disposition Proceeds from the sale of the REO Property shall be promptly
deposited in the Mortgage Collection Account. As soon as practical thereafter,
the expenses of such sale shall be paid and the Servicer shall reimburse itself
for any related Servicing Advances.

        The Servicer shall cause each REO Property to be inspected promptly upon
the acquisition of title thereto and shall cause each REO Property to be
inspected at least monthly thereafter or more frequently as may be required by
the circumstances. The Servicer shall make or cause the inspector to make a
written report of each such inspection. Such reports shall be retained in the
Servicing File and copies thereof shall be forwarded by the Servicer to the
Administrative Borrower.

        Notwithstanding anything to the contrary set forth in this SECTION 4.11,
the parties hereto hereby agree that the Administrative Borrower, upon the
written consent of Agent, shall be entitled to manage, conserve, protect and
operate each REO Property for the benefit and on behalf of the applicable
Borrower (such option, an "REO OPTION"). In connection with the exercise of an
REO Option, the prior two paragraphs and the related provisions of SECTION 4.03
and SECTION 4.04(III) (such provisions, the "REO MARKETING PROVISIONS") shall be
revised as follows. Following the acquisition of any Mortgaged Property, the
Servicer shall submit to the Administrative Borrower and Agent copies of
invoices, bills and other documentation relating to Servicing Advances in a form
that would permit the applicable Borrower or the Secured Parties to fully
recover any amounts due pursuant to any insurance policies and, upon exercising
the REO Option, such Borrower shall promptly reimburse the Servicer for such
amounts. In the event the REO Option is exercised with respect to an REO
Property, SECTION 4.04(III) shall not be applicable thereto. References made in
SECTION 4.03 with respect to the reimbursement of Servicing Advances shall, for
purposes of such REO Property, be deemed to be covered by this paragraph. The
Administrative Borrower acknowledges that, in the event it exercises an REO

                                       -22-
<PAGE>

Option, with respect to the related REO Property, there shall be no breach by
the Servicer based upon or arising out of the Servicer's failure to comply with
the REO Marketing Provisions.

                                   ARTICLE V

                                    PAYMENTS

        Section 5.01    REMITTANCES.

        On each Payment Date, the Agent shall cause to be remitted all amounts
credited to the Mortgage Collection Account as of the close of business on the
related preceding Determination Date, net of charges against or withdrawals from
the Mortgage Collection Account pursuant to SECTION 4.05. One (1) Business Day
prior to each Payment Date, the Servicer shall deliver to the Agent a remittance
report. The Agent shall confirm the amounts contained in the report and
authorize the remittance of such amounts in the following order of priority:

        (a) to pay the fees and expenses of the Custodian;

        (b) to pay any Servicing Fee then due;

        (c) to pay the accrued Back-up Servicing Fee then due, including any
Servicing Transfer Costs payable pursuant to SECTION 9.03 hereof;

        (d) to pay to the Lenders the unreimbursed Lender Expenses and
Indemnified Liabilities of the Lender-Related Parties;

        (e) to pay the interest due to the Lenders;

        (f) to pay the principal due to the Lenders to satisfy any Borrowing
Base Deficiencies in the order set forth in SECTION 2.06(A) of the Loan
Agreement;

        (g) to pay the Backup Servicer for any Nonrecoverable Advances made by
it; and

        (h) to pay the balance to the Borrowers.

In the event the Backup Servicer becomes the successor Servicer hereunder, the
Backup Servicer may (i) cause to be remitted all amounts credited to the
Mortgage Collection Account as of the close of business on the related preceding
Determination Date, net of charges against or withdrawals from the Mortgage
Collection Account pursuant to SECTION 4.05 and (ii) authorize the remittance of
such amounts in the order of priority set forth above; PROVIDED, HOWEVER, that
it shall seek confirmation from Agent for all such amounts remitted pursuant to
this SECTION 5.01.

        Section 5.02    STATEMENTS TO THE BORROWERS AND AGENT.

        The Servicer shall furnish to the Administrative Borrower, the Backup
Servicer and Agent an individual Mortgage Loan accounting report (a "REPORT"),
as of the last Business

                                       -23-
<PAGE>

Day of each month, in the Servicer's assigned loan number order to document
Mortgage Loan payment activity on an individual Mortgage Loan basis. With
respect to each month, such Report shall be received by the Administrative
Borrower, the Backup Servicer and Agent (i) no later than the fifth (5th)
Business Day of the following month of the related Payment Date on a disk or
tape or other computer-readable format, in such format as may be mutually agreed
upon by the Administrative Borrower, Agent and the Servicer, and (ii) no later
than the tenth (10th) Business Day of the following month of the related Payment
Date in hard copy (PROVIDED, HOWEVER, that if the Backup Servicer has succeeded
as the successor Servicer hereunder, the duty to provide such Report in hard
copy shall be at the option of the successor Servicer), which Report shall
contain the following:

                (i)     With respect to each Monthly Payment (on both an actual
and scheduled basis with respect to Mortgage Loan balances and on an actual
basis with respect to paid-through dates), the amount of such remittance
allocable to principal (including a separate breakdown of any Principal
Prepayment, including the date of such prepayment, and any prepayment penalties
or premiums, along with a detailed report of interest on Principal Prepayment
amounts remitted in accordance with SECTION 5.01);

                (ii)    with respect to each Monthly Payment, the amount of such
remittance allocable

                (iii)   to interest;

                (iv)    the aggregate principal balance of the Mortgage Loans;

                (v)     the aggregate of any Servicing Advances reimbursed to
the Servicer during the prior distribution period pursuant to SECTION 4.05;

                (vi)    the number and aggregate outstanding principal balances
of Mortgage Loans (a) delinquent (1) thirty (30) to fifty-nine (59) days, (2)
sixty (60) to eighty-nine (89) days, (3) ninety (90) days or more; (b) as to
which foreclosure has commenced; and (c) as to which REO Property has been
acquired; and

                (vii)   such other reports as may reasonably be required by the
Administrative Borrower or Agent.

        The Servicer shall also provide a trial balance, sorted in the
Borrowers' assigned loan number order, in such form as the Servicer, Agent and
the Administrative Borrower shall agree, with each such Report.

        The Servicer shall prepare and file any and all information statements
or other filings required to be delivered to any governmental taxing authority
or to Administrative Borrower pursuant to any applicable law with respect to the
Mortgage Loans and the transactions contemplated hereby. In addition, the
Servicer shall provide the Administrative Borrower with such information
concerning the Mortgage Loans as is necessary for the Borrowers to prepare their
Federal income tax returns as the Administrative Borrower may reasonably request
from time to time.

                                       -24-
<PAGE>

        In addition, not more than sixty (60) days after the end of each
calendar year, the Servicer shall furnish to each Person who was a Borrower at
any time during such calendar year an annual statement in accordance with the
requirements of applicable Federal income tax law together with a copy to Agent
as to the aggregate of remittances of principal and interest for the applicable
portion of such year.

        Section 5.03    LIQUIDATION REPORTS.

        Upon the foreclosure sale of any Mortgaged Property or the acquisition
thereof by a Borrower pursuant to a deed-in-lieu of foreclosure, the Servicer
shall submit to the Administrative Borrower a liquidation report with respect to
such Mortgaged Property in such form as the Servicer and the Administrative
Borrower shall agree. The Servicer shall also provide reports on the status of
REO Property containing such information as the Administrative Borrower may
reasonably require.

                                   ARTICLE VI

                          GENERAL SERVICING PROCEDURES

        Section 6.01    ASSUMPTION AGREEMENTS.

        The Servicer will, to the extent it has knowledge of any conveyance or
prospective conveyance by any Mortgagor of a Mortgaged Property (whether by
absolute conveyance or by contract of, sale, and whether or not the Mortgagor
remains or is to remain liable under the Mortgage Note and/or the Mortgage),
exercise its rights to accelerate the maturity of such Mortgage Loan under any
"due-on-sale" clause to the extent permitted by law; PROVIDED, HOWEVER, that the
Servicer shall not exercise any such rights if prohibited by law or the terms of
the Mortgage Note from doing so or if the exercise of such rights would impair
or threaten to impair any recovery under the related Primary Mortgage Insurance
Policy, if any. If the Servicer reasonably believes it is unable under
applicable law to enforce such "due-on-sale" clause, the Servicer, with the
approval of the Administrative Borrower and Agent (such approval not to be
unreasonably withheld), will enter into an assumption agreement with the person
to whom the Mortgaged Property has been conveyed or is proposed to be conveyed,
pursuant to which such person becomes liable under the Mortgage Note and, to the
extent permitted by applicable state law, the Mortgagor remains liable thereon.
Where an assumption is allowed pursuant to this SECTION 6.01, the Servicer, with
the prior consent of the primary mortgage insurer, if any, is authorized to
enter into a substitution of liability agreement with the person to whom the
Mortgaged Property has been conveyed or is proposed to be conveyed pursuant to
which the original mortgagor is released from liability and such Person is
substituted as mortgagor and becomes liable under the related Mortgage Note. Any
such substitution of liability agreement shall be in lieu of an assumption
agreement.

        In connection with any such assumption or substitution of liability, the
Servicer shall follow the underwriting practices and procedures set forth in the
Approved Underwriting Guidelines. With respect to an assumption or substitution
of liability, the Mortgage Interest Rate borne by the related Mortgage Note and
the amount of the Monthly Payment may not be

                                       -25-
<PAGE>

changed. The Servicer shall notify the Administrative Borrower and Agent that
any such substitution of liability or assumption agreement has been completed by
forwarding to the Administrative Borrower and Agent the original of any such
substitution of liability or assumption agreement, which document shall be added
to the related Mortgage Loan Documents and shall, for all purposes, be
considered a part of such related mortgage file to the same extent as all other
documents and instruments constituting a part thereof. All fees collected by the
Servicer for entering into an assumption or substitution of liability agreement
shall belong to the Servicer.

        Notwithstanding the foregoing paragraphs of this section or any other
provision of this Agreement, the Servicer shall not be deemed to be in default,
breach or any other violation of its obligations hereunder by reason of any
assumption of a Mortgage Loan by operation of law or any assumption which the
Servicer may be restricted by law from preventing, for any reason whatsoever.
For purposes of this SECTION 6.01, the term "assumption" is deemed to also
include a sale of the Mortgaged Property subject to the Mortgage that is not
accompanied by an assumption or substitution of liability agreement.

        Section 6.02    SATISFACTION OF MORTGAGES AND RELEASE OF MORTGAGE LOAN
                        DOCUMENTS.

        Upon the payment in full of any Mortgage Loan, the Servicer will
immediately notify the Administrative Borrower with a certification and request
for release, which certification shall include a statement to the effect that
all amounts received in connection with such payment which are required to be
deposited in the Mortgage Collection Account pursuant to SECTION 4.04 have been
so deposited, and a request for delivery to the Servicer of the portion of the
Mortgage Loan Documents held by the Custodian, and unless the related Mortgage
Loans are the subject of a Pass-Through Transfer, such request is to be
acknowledged by the Agent. Upon receipt of such certification and request, the
Administrative Borrower and Agent shall promptly cause the Custodian to promptly
release the related Mortgage Loan Documents to the Servicer and the Servicer
shall prepare and deliver for execution by the applicable Borrower or at such
Borrower's option execute under the authority of a power of attorney delivered
to the Servicer by such Borrower any satisfaction or release. No expense
incurred in connection with any instrument of satisfaction or deed of
reconveyance shall be chargeable to the Mortgage Collection Account.

        In the event the Servicer satisfies or releases a Mortgage without
having obtained payment in full of the indebtedness secured by the Mortgage or
should it otherwise prejudice any right the applicable Borrower or the Secured
Parties may have under the mortgage instruments, the Servicer, upon written
demand, shall remit within two (2) Business Days to the Administrative Borrower
the then outstanding principal balance of the related Mortgage Loan by deposit
thereof in the Mortgage Collection Account. The Servicer shall maintain the
Fidelity Bond insuring the Servicer against any loss it may sustain with respect
to any Mortgage Loan not satisfied in accordance with the procedures set forth
herein and in accordance with Accepted Servicing Practices.

        From time to time and as appropriate for the servicing or foreclosure of
the Mortgage Loans, including for the purpose of collection under any Primary
Mortgage Insurance Policy, upon request of the Servicer and delivery to the
Administrative Borrower of a servicing

                                       -26-
<PAGE>

receipt signed by a Servicing Officer (and unless the related Mortgage Loans are
the subject of a Pass-Through Transfer, acknowledged by the Agent), and upon
receipt of such servicing request, the Administrative Borrower and Agent shall
promptly cause the Custodian to promptly release the portion of the Mortgage
Loan Documents held by the Custodian to the Servicer. Such servicing receipt
shall obligate the Servicer to promptly return the related Mortgage Loan
Documents to the Custodian, when the need therefor by the Servicer no longer
exists, unless the Mortgage Loan has been liquidated and the Liquidation
Proceeds relating to the Mortgage Loan have been deposited in the Mortgage
Collection Account or such documents have been delivered to an attorney, or to a
public trustee or other public official as required by law, for purposes of
initiating or pursuing legal action or other proceedings for the foreclosure of
the Mortgaged Property either judicially or non-judicially, and the Servicer has
promptly delivered to the Administrative Borrower, Agent and the Custodian a
certificate of a Servicing Officer certifying as to the name and address of the
Person to which such documents were delivered and the purpose or purposes of
such delivery. Upon receipt of a certificate of a Servicing Officer stating that
such Mortgage Loan was liquidated, the servicing receipt shall be released by
the Administrative Borrower, Agent and/or the Custodian, as applicable, to the
Servicer.

        Section 6.03    SERVICING COMPENSATION.

        As compensation for its services hereunder, the Servicer shall be
entitled to remit from the Mortgage Collection Account on the Mortgage Loans the
amounts provided for as the Servicer's Servicing Fee under SECTION 5.01.
Additional servicing compensation in the form of interest earned on the Mortgage
Collection Account, assumption fees, as provided in SECTION 6.01, late payment
charges and other ancillary fees shall be retained by the Servicer to the extent
not required to be deposited in the Mortgage Collection Account. The Servicer
shall be required to pay all expenses incurred by it in connection with its
servicing activities hereunder and shall not be entitled to reimbursement
therefor except as specifically provided for.

        Section 6.04    ANNUAL STATEMENT AS TO COMPLIANCE.

        The Servicer will deliver to the Administrative Borrower, the Backup
Servicer and Agent not later than ninety (90) days following the end of each
fiscal year of the Servicer, an Officer's Certificate stating that (i) a review
of the activities of the Servicer during the preceding calendar year and of
performance under this Agreement has been made under such officer's supervision,
and (ii) to the best of such officer's knowledge, based on such review, the
Servicer has fulfilled all of its obligations under this Agreement throughout
such year, or, if there has been a default in the fulfillment of any such
obligation, specifying each such default known to such officer and the nature
and status thereof except for such defaults as such officer in its good faith
judgment believes to be immaterial.

        Section 6.05    ANNUAL INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS'
                        SERVICING REPORT.

        Not later than ninety (90) days following the end of each fiscal year of
the Servicer, the Servicer at its expense shall cause a firm of independent
public accountants which is a member of the American Institute of Certified
Public Accountants to furnish a statement to the Administrative Borrower and
Agent to the effect that such firm has examined certain documents and records
relating to the Servicer's servicing of mortgage loans of the same type as

                                       -27-
<PAGE>

the Mortgage Loans pursuant to servicing agreements substantially similar to
this Agreement, which agreements may include this Agreement, and that, on the
basis of such an examination, conducted substantially in accordance with the
Uniform Single Attestation Program for Mortgage Bankers, such firm is of the
opinion that the Servicer's servicing has been conducted in compliance with the
agreements examined pursuant to this SECTION 6.05, except for (i) such
exceptions as such firm shall believe to be immaterial, and (ii) such other
exceptions as shall be set forth in such statement.

        Section 6.06    BORROWERS' RIGHT TO EXAMINE SERVICER RECORDS.

        Each of the Borrowers, the Backup Servicer and Agent shall have the
right to examine and audit, at its respective expense, upon reasonable notice to
the Servicer, during business hours or at such other times as might be
reasonable under applicable circumstances, any and all of the books, records,
documentation or other information of the Servicer, or held by another for the
Servicer or on its behalf or otherwise, which relate to the performance or
observance by the Servicer of the terms, covenants or conditions of this
Agreement.

        The Servicer shall provide to the Borrowers, the Agent and any
supervisory agents or examiners representing a state or Federal governmental
agency having jurisdiction over the Borrowers or the Agent, including but not
limited to OTS, FDIC and other similar entities, access to any documentation
regarding the Mortgage Loans in the possession of the Servicer which may be
required by any applicable regulations. Such access shall be afforded without
charge, upon reasonable request, during normal business hours and at the offices
of the Servicer, and in accordance with the applicable Federal government
agency, FDIC, OTS, or any other similar regulations.

        Section 6.07    NON-SOLICITATION.

        The Servicer or any agent or affiliate shall not knowingly conduct any
solicitation exclusively targeted to the Mortgagors for the purpose of inducing
or encouraging the early prepayment or refinancing of the related Mortgage
Loans. It is understood and agreed that promotions undertaken by the Servicer or
any agent or affiliate of the Servicer which are directed to the general public
at large, including, without limitation, mass mailings based on commercially
acquired mailing lists, newspaper, radio and television advertisements shall not
constitute solicitation under this section. Nothing contained herein shall
prohibit the Servicer from (i) distributing any general advertising including
information brochures, coupon books, or other similar documentation which
indicates services the seller offers, including refinances to all Mortgagors in
Servicer's servicing portfolio or (ii) providing financing of home equity loans
to Mortgagors at the Mortgagor's request.

                                  ARTICLE VII

                       REPORTS TO BE PREPARED BY SERVICER

        Section 7.01    SERVICER SHALL PROVIDE INFORMATION AS REASONABLY
                        REQUIRED.

                                       -28-
<PAGE>

        The Servicer shall furnish to Agent and the Administrative Borrower upon
request, during the term of this Agreement, such periodic, special or other
reports or information, whether or not provided for herein, as shall be
necessary, reasonable or appropriate with respect to the purposes of this
Agreement. The Servicer may negotiate with the Administrative Borrower or Agent
for a reasonable fee for providing such report or information, unless (i) the
Servicer is required to supply such report or information pursuant to any other
section of this Agreement, or (ii) the report or information has been requested
in connection with Internal Revenue Service, OTS, FDIC or other regulatory
agency requirements. All such reports or information shall be provided by and in
accordance with all reasonable instructions and directions given by the
Administrative Borrower or Agent. The Servicer agrees to execute and deliver all
such instruments and take all such action as the Administrative Borrower or
Agent, from time to time, may reasonably request in order to effectuate the
purpose and to carry out the terms of this Agreement.

                                  ARTICLE VIII

                                  THE SERVICER

        Section 8.01    INDEMNIFICATION; THIRD PARTY CLAIMS.

        The Servicer agrees to indemnify the Borrowers, the Backup Servicer and
Agent and hold each harmless from and against any and all claims, losses,
damages, penalties, fines, forfeitures, legal fees and related costs, judgments,
and any other costs, fees and expenses that the Borrowers, the Backup Servicer
or Agent may sustain in any way related to the failure of the Servicer to
perform in any way its duties and service the Mortgage Loans in strict
compliance with the terms of this Agreement and for breach of any representation
or warranty of the Servicer contained herein. The Servicer shall immediately
notify the Administrative Borrower, the Backup Servicer and Agent if a claim is
made by a third party with respect to this Agreement or the Mortgage Loans,
assume (with the consent of the Administrative Borrower and with counsel
reasonably satisfactory to the Administrative Borrower) the defense of any such
claim and pay all expenses in connection therewith, including counsel fees, and
promptly pay, discharge and satisfy any judgment or decree which may be entered
against it, the Borrowers, the Backup Servicer or Agent in respect of such claim
but failure to so notify the Administrative Borrower, the Backup Servicer or
Agent shall not limit its obligations hereunder. The Servicer agrees that it
will not enter into any settlement of any such claim without the consent of the
Administrative Borrower, the Backup Servicer and Agent unless such settlement
includes an unconditional release of the Borrowers from all liability that is
the subject matter of such claim. The provisions of this SECTION 8.01 shall
survive termination of this Agreement.

        Section 8.02    EXISTENCE OF THE SERVICER.

        The Servicer will keep in full effect its existence, rights and
franchises as a corporation under the laws of the state of its incorporation
except as permitted herein, and will obtain and preserve its qualification to do
business as a foreign corporation in each jurisdiction in which such
qualification is or shall be necessary to protect the validity and
enforceability of this Agreement or any of the Mortgage Loans and to perform its
duties under this Agreement.

                                       29
<PAGE>

        Section 8.03    LIMITATION ON LIABILITY OF THE SERVICER AND OTHERS.

        Neither the Servicer nor any of the officers, employees or agents of the
Servicer shall be under any liability to the Borrowers for any action taken or
for refraining from the taking of any action in good faith pursuant to this
Agreement, or for errors in judgment made in good faith; PROVIDED, HOWEVER, that
this provision shall not protect the Servicer or any such person against any
breach of warranties or representations made herein, or failure to perform in
any way its obligations in compliance with any standard of care set forth in
this Agreement, or any liability which would otherwise be imposed by reason of
negligence or any breach of the terms and conditions of this Agreement. The
Servicer and any officer, employee or agent of the Servicer may rely in good
faith on any document of any kind prima facie properly executed and submitted by
the Borrowers respecting any matters arising hereunder. The Servicer shall not
be under any obligation to appear in, prosecute or defend any legal action which
is not incidental to its duties to service the Mortgage Loans in accordance with
this Agreement and which in its opinion may involve it in any expenses or
liability; PROVIDED, HOWEVER, that the Servicer may, with the consent of the
Administrative Borrower and Agent, which consent shall not be unreasonably
withheld, undertake any such action which it may deem necessary or desirable
with respect to this Agreement and the rights and duties of the parties hereto.
In such event, the reasonable legal expenses and costs of such action and any
liability resulting therefrom shall be expenses, costs and liabilities for which
the Borrowers will be liable, and the Servicer shall be entitled to be
reimbursed therefor from the Borrowers upon written demand.

        Section 8.04     SERVICER NOT TO RESIGN.

        The Servicer shall not resign from the obligations and duties hereby
imposed on it except by mutual consent of the Servicer, the Borrowers and Agent
or upon the determination that its duties hereunder are no longer permissible
under applicable law and such incapacity cannot be cured by the Servicer. Any
such determination permitting the resignation of the Servicer shall be evidenced
by an Opinion of Counsel to such effect delivered to the Borrowers and Agent
which Opinion of Counsel shall be in form and substance acceptable to the
Borrowers. No such resignation shall become effective until a successor shall
have assumed the Servicer's responsibilities and obligations hereunder in the
manner provided in SECTIONS 9.01 AND 9.03.

        Section 8.05    NO TRANSFER OF SERVICING.

        With respect to the retention of the Servicer to service the Mortgage
Loans hereunder, the Servicer acknowledges that the Borrowers and Agent have
acted in reliance upon the Servicer's independent status, the adequacy of its
servicing facilities, plan, personnel, records and procedures, its integrity,
reputation and financial standing and the continuance thereof. Without in any
way limiting the generality of this section, the Servicer shall not either
assign this Agreement or the servicing hereunder or delegate its rights or
duties hereunder or any portion thereof, or sell or otherwise dispose of all or
substantially all of its property or assets, without the prior written approval
of the Borrowers and Agent; provided, that the Servicer may delegate its rights
or duties to the Administrative Borrower or HAC without such prior written
approval.

                                       30
<PAGE>

                                   ARTICLE IX

                                    DEFAULT

        Section 9.01    EVENTS OF DEFAULT.

        In case one or more of the following Events of Default by the Servicer
shall occur and be continuing, that is to say:

                (i)     any failure by the Servicer to remit any payment
required to be made under the terms of this Agreement which continues unremedied
for either one (1) Business Day, if the Servicer is American Business Credit,
Inc. or two (2) Business Days, if the Backup Servicer has become the successor
to the Servicer, (it being understood that this subparagraph shall not affect
Servicer's obligation pursuant to SECTION 5.01 to pay default interest on any
remittance received after the Business Day on which such payment was due); or

                (ii)    any failure on the part of the Servicer duly to observe
or perform in any material respect any other of the covenants or agreements on
the part of the Servicer set forth in this Agreement, the breach of which has a
material adverse effect and which continues unremedied for a period of thirty
(30) days (except that such number of days shall be fifteen (15) in the case of
a failure to pay any premium for any insurance policy required to be maintained
under this Agreement and such failure shall be deemed to have a material adverse
effect) after the date on which written notice of such failure, requiring the
same to be remedied, shall have been given to the Servicer by the Administrative
Borrower or Agent; or

                (iii)   only if American Business Credit, Inc. is the Servicer,
there occurs any "Event of Default" as defined in the Loan Agreement; or

                (iv)    only if American Business Credit, Inc. is the Servicer,
the Servicer attempts to assign its right to servicing compensation hereunder or
the Servicer attempts, without the consent of the Administrative Borrower, to
sell or otherwise dispose of all or substantially all of its property or assets
(other than through a Permitted Disposition in accordance with the terms of the
Loan Agreement) or to assign this Agreement or the servicing responsibilities
hereunder or to delegate its duties hereunder or any portion thereof except as
otherwise permitted herein; or

                (v)     the Servicer ceases (either directly or indirectly
through its subservicers) to be qualified to transact business in any
jurisdiction where it is currently so qualified, but only to the extent such
non-qualification materially and adversely affects the Servicer's ability to
perform its obligations hereunder; or

                (vi)    only if American Business Credit, Inc. is the Servicer,
the Servicer shall cease to be a wholly-owned subsidiary of the Administrative
Borrower;

        then, and in each and every such case, so long as an Event of Default
shall not have been remedied, the Borrowers (with prior written consent of
Agent) or Agent, by notice in writing to the Servicer and a copy to Backup
Servicer may, in addition to whatever rights the

                                       -31-
<PAGE>

Borrowers or Agent may have under SECTION 8.01 and at law or equity to damages,
including injunctive relief and specific performance, terminate all the rights
and obligations of the Servicer under this Agreement and in and to the Mortgage
Loans and the proceeds thereof without compensating the Servicer for the same.
On or after the receipt by the Servicer and Backup Servicer of such written
notice of the termination of Servicer, all authority and power of the Servicer
under this Agreement, whether with respect to the Mortgage Loans or otherwise,
shall pass to and be vested in the Backup Servicer pursuant to and under this
SECTION 9.01, and, without limitation, the Backup Servicer, is hereby authorized
and empowered, as attorney-in-fact or otherwise, to execute and deliver, on
behalf of and at the expense of the Servicer, any and all documents and other
instruments and to do or accomplish all other acts or things necessary or
appropriate to effect the purposes of such notice of termination, whether to
complete the transfer and endorsement or assignment of the Mortgage Loans and
related documents, or otherwise. Upon written request from the Borrowers and the
Agent, the Servicer shall prepare, execute and deliver, any and all documents
and other instruments, and place in the Backup Servicer's possession all
Servicing Files, and do or accomplish all other acts or things necessary or
appropriate to effect the purposes of such notice of termination, whether to
complete the transfer and endorsement or assignment of the Mortgage Loans and
related documents, or otherwise, at the Servicer's sole expense. The Servicer
agrees to cooperate with the Borrowers, the Agent and the Backup Servicer in
effecting the termination of the Servicer's responsibilities and rights
hereunder, including, without limitation, the transfer to the Backup Servicer
for administration by it of all cash amounts which shall at the time be credited
by the Servicer to the Mortgage Collection Account or Escrow Account or
otherwise held by the Servicer or thereafter received with respect to the
Mortgage Loans or any REO Property.

        In the event that the Backup Servicer becomes the successor Servicer,
the parties hereby agree that there shall no longer be the requirement to have a
Backup Servicer.

        Section 9.02    WAIVER OF DEFAULTS.

        The Administrative Borrower may waive only by written notice and only
upon the written consent of Agent any default by the Servicer in the performance
of its obligations hereunder and its consequences. Upon any such waiver of a
past default, such default shall cease to exist, and any Event of Default
arising therefrom shall be deemed to have been remedied for every purpose of
this Agreement. No such waiver shall extend to any subsequent or other default
or impair any right consequent thereon except to the extent expressly so waived
in writing.

        Section 9.03    BACKUP SERVICER.

        (a) From and after the Effective Date hereof until the Servicing
Transfer Date, the Backup Servicer shall act as back-up servicer with respect to
the Mortgage Loans, and shall perform such functions, duties, obligations,
undertakings and responsibilities as set forth in SECTION 9.03(B) below. Prior
to the Servicing Transfer Date, the Backup Servicer shall have only those duties
and obligations imposed by it described in SECTION 9.03(B) below, and shall have
no obligations or duties under any agreement to which it is not a party,
including but not limited to the various agreements named herein. In its
capacity as Backup Servicer, it shall in no event be liable for any obligations
of the Borrowers or the Servicer to any party, whether hereunder or

                                       -32-
<PAGE>

under any other agreement, which are not related to servicing functions,
including, without limitation, any repurchase obligations.

        (b) No later than the fifth (5th) Business Day of each calendar month,
the Servicer shall deliver to the Backup Servicer a complete set of servicing
records in computer-readable form with respect to the payment, collection and
other servicing activity of the Mortgage Loans during the preceding calendar
month, which records shall contain sufficient data to permit the Backup Servicer
to assume the duties of the Servicer hereunder without delay on account of the
absence of relevant servicing information. The information described in the
foregoing sentence and all other information provided by the Servicer to the
Backup Servicer pursuant to the Agreement shall be in form and substance
satisfactory to the Backup Servicer. On at least a monthly basis, the Backup
Servicer shall convert and "map" the data contained in such servicing records to
its own servicing system, and shall provide the Agent not later than the
fifteenth (15th) day of each month commencing March 15, 2005, with a
certification by an appropriate officer of the Backup Servicer to the effect
that it has received from the Servicer each monthly submission of servicing
data, has completed such conversion and mapping of the data delivered with
respect to the immediately preceding month, and is capable of assuming the
duties of the Servicer if required to do so hereunder upon at least twenty (20)
days' prior to written notice from the Agent.

        (c) The Backup Servicer, prior to assuming any of the Servicer's duties
hereunder may not resign hereunder unless it arranges for a successor Backup
Servicer reasonably acceptable to the Administrative Borrower and the Agent with
not less than ninety (90) days' notice delivered to the Administrative Borrower,
the Agent and the Servicer.

        (d) From and after the Servicing Transfer Date, the Backup Servicer
shall perform all of the functions, duties, obligations, undertakings and
responsibilities of the Servicer hereunder and shall be the successor to the
Servicer hereunder, but only in its capacity as Servicer under this Agreement.
In the event the Backup Servicer becomes the successor Servicer, it shall not be
liable for any acts or omissions of the Servicer under this Agreement or any
other agreement or for any act or omission of the Servicer or its affiliated
companies, any prior servicer or any other third party, which occurred in
connection with the origination, receiving, processing, funding or servicing of
a mortgage loan at any time prior to the Servicing Transfer Date or for the
collection of any debt, costs, expenses or fees incurred or assessed by
Servicer, or its affiliated companies or any third party in connection with the
origination or servicing of a mortgage loan prior to the Servicing Transfer
Date, and it shall not be deemed to have made any representations and warranties
of the Servicer or any predecessor Servicer under this Agreement or any other
agreement. In the event the Backup Servicer becomes the successor Servicer, it
shall be not deemed to be in default thereunder by reason of any failure to
make, or any delay in making, any distribution hereunder or any portion thereof
caused by (a) the failure of the Servicer or any predecessor Servicer to (i)
deliver, or any delay in delivering, cash, documents or records to it, (ii)
cooperate as required by this Agreement, or (iii) deliver the Mortgage Loans to
the Custodian as required by this Agreement, or (b) restrictions imposed by any
regulatory authority having jurisdiction over the Servicer.

        (e) Upon the transfer of the servicing of the Mortgage Loans, prior to
the first Payment Date after the Servicing Transfer Date, the Agent shall cause
the Custodian to provide

                                       -33-
<PAGE>

the Backup Servicer with an officer's certificate that contains (i) a complete
description of all material breaches by the Servicer which have not been fully
cured and (ii) a confirmation that all reports required to be filed by the
Custodian have been timely filed.

        (f) The Backup Servicer agrees to indemnify the Borrowers, the Servicer
and the Agent, and any of their respective directors, officers, employees or
agents from, and hold them harmless against, any and all costs, expenses
(including reasonable attorney fees and disbursements), losses, claims, damages
and liabilities to the extent that such cost, expense, loss, claim, damage or
liability arose out of, or was imposed upon the Borrowers, the Servicer or the
Agent and their respective directors, officers, employees and agents through the
Backup Servicer's intentional misconduct or gross negligence, except to the
extent such indemnified party's own bad faith, willful misconduct or gross
negligence contributes to the costs, loss, claim, damage or liability. Each of
the Borrowers, the Servicer and the Agent agrees, severally and not jointly, to
indemnify the Backup Servicer, and any of its respective directors, officers,
employees or agents from, and hold them harmless against, any and all costs,
expenses (including reasonable attorney fees and disbursements), losses, claims,
damages and liabilities to the extent that such cost, expense, loss, claim,
damage or liability arose out of, or was imposed upon the Backup Servicer and
its respective directors, officers, employees and agents through the intentional
misconduct or gross negligence of the Borrowers, the Servicer or the Agent,
except to the extent such indemnified party's own bad faith, willful misconduct
or gross negligence contributes to the costs, loss, claim, damage or liability
(for the avoidance of doubt, in no event shall Borrowers or Agent indemnify the
Backup Servicer for the intentional misconduct or gross negligence of either (x)
the other or (y) the Servicer). The Servicer and each of its affiliates agrees
to indemnify the Backup Servicer, and any of its respective directors, officers,
employees or agents from, and hold them harmless against, any and all costs,
expenses (including reasonable attorney fees and disbursements), losses, claims,
damages and liabilities to the extent that such cost, expense, loss, claim,
damage or liability arose out of, or was imposed upon the Backup Servicer and
its respective directors, officers, employees and agents through or for any act
or omission of the Servicer or its affiliated companies, any prior servicer or
any other third party, which occurred in connection with the origination,
receiving, processing, funding or servicing of a mortgage loan at any time prior
to the Servicing Transfer Date or for the collection of any debt, costs,
expenses or fees incurred or assessed by Servicer, or its affiliated companies
or any third party in connection with the origination or servicing of a mortgage
loan prior to the Servicing Transfer Date.

        (g) The Backup Servicer will not be obligated to incur any expenses or
costs (including, without limitation, legal fees and the preparation and
recording of all intervening assignments of mortgage) in connection with the
transfer of servicing of the Mortgage Loans to the Backup Servicer, or to compel
the performance of any obligations by any party to the Agreement. Without
limiting any obligations of a terminated Servicer as provided above, if the
Servicer is no longer the Servicer hereunder for any reason, such predecessor
Servicer shall be responsible for paying any Servicing Transfer Costs incurred
by the Backup Servicer in connection with the transfer of servicing from the
predecessor Servicer; provided, that if the predecessor Servicer fails to pay
any such Servicing Transfer Costs, the Agent shall cause such Servicing Transfer
Costs to be paid out of the Mortgage Collection Account. In addition, if the
Backup Servicer is the successor to the Servicer, and if the predecessor
Servicer fails to pay any

                                       -34-
<PAGE>

Servicing Transfer Costs incurred by the Backup Servicer, then the Backup
Servicer may offset any such Servicing Transfer Costs against amounts that are
payable or reimbursable to the predecessor Servicer with respect to unpaid
Servicing Fees and unreimbursed Servicing Advances as set forth below in the
following paragraph below (and the Backup Servicer shall only be paid such
Servicing Transfer Costs from the Mortgage Collection Account to the extent it
reasonably determines that such Servicing Transfer Costs will not be recoverable
pursuant to such offsets). To the extent such Servicing Transfer Costs remain
unpaid by the predecessor Servicer, from the Mortgage Collection Account, or
from offset against amounts that are payable or reimbursable to the predecessor
Servicer with respect to unpaid Servicing Fees and unreimbursed Servicing
Advances, such unpaid Servicing Transfer Costs shall be paid by the Borrowers
and the predecessor Servicer, jointly and severally. The foregoing obligation of
the predecessor Servicer with respect to Servicing Transfer Costs shall not be
deemed to limit any other liability the predecessor Servicer may have to the
other parties hereto in respect of any breach of its obligations or duties
hereunder.

        (h) If the Backup Servicer is the successor to the Servicer, the Backup
Servicer in such capacity shall remit all unpaid Servicing Fees accrued during
the period prior to the Servicing Transfer and unreimbursed Servicing Advances
outstanding on the Servicing Transfer Date to the predecessor Servicer;
PROVIDED, HOWEVER, there shall be no duty to so remit if the Servicing Transfer
is the result of an Event of Default under this Agreement with respect to the
predecessor Servicer; and PROVIDED FURTHER, that such duty to reimburse relates
only to all such unpaid Servicing Fees accrued during the period prior to the
Servicing Transfer and unreimbursed Servicing Advances made by the predecessor
Servicer prior to Servicing Transfer Date; and, FURTHER, PROVIDED, that the
Backup Servicer in its capacity as successor Servicer shall be obliged to make
such reimbursement only out of collections on the related Mortgage Loan,
(including monthly collections, Liquidation Proceeds, Insurance Proceeds, or
their equivalent) and such other amounts that the Servicer is permitted to
collect from the related Mortgagor or otherwise relating to the related Mortgage
Loan before the Backup Servicer in its capacity as successor Servicer reimburses
itself for any unreimbursed Servicing Advances which it makes with respect to
such Mortgage Loan. The Backup Servicer in its capacity as successor Servicer
shall remit any funds due to the predecessor Servicer under this paragraph on
the Payment Date.

        (i) The Backup Servicer, as compensation for its obligations and duties
as Backup Servicer hereunder, shall be paid the Backup Servicing Fee on each
Payment Date pursuant to SECTION 5.01. If the Backup Servicer shall succeed as
Servicer hereunder, the Backup Servicer shall no longer be entitled to be paid
the Backup Servicing Fee with respect to any period after the Servicing Transfer
Date.

        (j) If any of the Mortgage Loans are MERS Designated Mortgage Loans, in
connection with the termination or resignation of the Servicer hereunder, the
Backup Servicer shall maintain itself as a member of MERS in good standing and
comply in all material respects with the MERS Procedures Manual in connection
with the servicing of the Mortgage Loans that are registered with MERS, and the
Servicer and Backup Servicer shall cause MERS to designate on the MERS System
the Backup Servicer as the current servicer of such Mortgage Loan.

                                       -35-
<PAGE>

                                   ARTICLE X

                                   TERMINATION

        Section 10.01    SERVICING TERM.

        The Servicer hereby covenants and agrees to act as the Servicer under
this Agreement for an initial term, commencing on the Closing Date and ending on
the last Business Day of the succeeding month, which term shall be extendable by
the Agent for successive terms of one calendar month thereafter, until the
termination of the Servicer's obligations and responsibilities pursuant to this
Article X; provided that, if the Backup Servicer shall become the Servicer
hereunder the term of the Backup Servicer as Servicer shall not be subject to
termination under this SECTION 10.01. Each such notice of extension (a "SERVICER
EXTENSION NOTICE") shall be delivered by the Agent to the Servicer and the
Backup Servicer. The Servicer hereby agrees that, upon its receipt of any such
Servicer Extension Notice, the Servicer shall become bound for the duration of
the term covered by such Servicer Extension Notice to continue as the Servicer
subject to and in accordance with the other provisions of this Agreement.

        On and after the time the Servicer receives a notice of termination, the
Backup Servicer shall be the successor in all respects to the Servicer in its
capacity as Servicer under this Agreement and the transactions set forth or
provided for herein and shall be subject to all the responsibilities, duties and
liabilities relating thereto and arising thereafter placed on the Servicer
(except for any representations or warranties of the Servicer under this
Agreement by the terms and provisions hereof).

        Section 10.02   TERMINATION.

        The respective obligations and responsibilities of the Servicer shall
terminate upon: (i) the later of the final payment of the last Mortgage Loan and
the remittance of all funds due hereunder; or (ii) by mutual consent of the
Servicer, the Borrowers and the Agent in writing; or (iii) termination by the
Agent pursuant to SECTION 9.01.

        Section 10.03   TERMINATION WITHOUT CAUSE.

        The Agent may, at its sole option, terminate any rights the Servicer may
have hereunder, without cause, upon twenty (20) days' prior written notice. Any
such notice of termination shall be in writing and delivered to the Servicer as
provided in SECTION 11.04 of this Agreement.

        Termination pursuant to this SECTION 10.03 shall be effective on the
date (the "TRANSFER DATE") on which the Servicer transfers all responsibilities,
rights, duties and obligations under this Agreement to the successor appointed
pursuant to SECTIONS 9.01 AND 9.03. The Borrowers shall appoint such successor
upon written consent of Agent and such Transfer Date shall be no more than
twenty (20) days following the date on which the Servicer receives notice of
termination.

                                       -36-
<PAGE>

                                   ARTICLE XI

                            MISCELLANEOUS PROVISIONS

        Section 11.01   AMENDMENT.

        This Agreement may be amended from time to time by the Servicer, the
Borrowers, the Agent and the Backup Servicer by written agreement signed by the
Servicer, the Borrowers, the Agent and the Backup Servicer.

        Section 11.02   RECORDATION OF AGREEMENT.

        To the extent permitted by applicable law, this Agreement is subject to
recordation in all appropriate public offices for real property records in all
the counties or other comparable jurisdictions in which any of all the
properties subject to the Mortgages are situated, and in any other appropriate
public recording office or elsewhere, such recordation to be effected by the
Servicer at the Servicer's expense on direction of the Administrative Borrower
or Agent accompanied by an opinion of counsel to the effect that such
recordation materially and beneficially affects the interest of the Borrowers or
Agent or is necessary for the administration or servicing the Mortgage Loans.

        Section 11.03   GOVERNING LAW.

        THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE
INTERNAL LAWS OF THE STATE OF NEW YORK WITHOUT GIVING EFFECT TO PRINCIPLES OF
CONFLICTS OF LAWS. THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER
SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.

        Section 11.04   NOTICES.

        Any demands, notices or other communications permitted or required
hereunder shall be in writing and shall be deemed conclusively to have been
given if personally, delivered, sent by overnight courier with proof of
delivery, mailed by certified mail, postage prepaid, and return receipt
requested or transmitted by telecopier and confirmed by a similar writing
delivered by overnight courier, as follows:

(i)     if to the Servicer:

        American Business Credit, Inc.
        The Wanamaker Building
        100 Penn Square East
        Philadelphia, PA 19107
        Attention: Steve Giroux, Esq., General Counsel
        Telecopier No.: (215) 940-3299

                                       -37-
<PAGE>

        with a copy to:

        Blank Rome LLP
        One Logan Square
        Philadelphia, PA 19103
        Attention: Lawrence F. Flick, II
        Telecopier No.: (215) 569-5555

(ii)    if to the Administrative Borrower or the other Borrowers:

        American Business Mortgage Services, Inc.
        The Wanamaker Building
        100 Penn Square East
        Philadelphia, PA 19107
        Attention: Steve Giroux, Esq., General Counsel
        Telecopier No.: (215) 940-3299

        with a copy to:

        American Business Credit, Inc.
        The Wanamaker Building
        100 Penn Square East
        Philadelphia, PA 19107
        Attention: Steve Giroux, Esq., General Counsel
        Telecopier No.: (215) 940-3299

(iii)   if to the Agent:

        Greenwich Capital Financial Products, Inc.
        600 Steamboat Road
        Greenwich, CT 06830
        Attention: John C. Anderson
        Telecopier No.: (203) 618-2135

        with a copy to:

        Greenwich Capital Financial Products, Inc.
        600 Steamboat Road
        Greenwich, CT 06830
        Attention: General Counsel
        Telecopier No.: (203) 618-2134

        and to:

        Kirkland & Ellis LLP
        200 East Randolph Drive
        Chicago, IL 60601

                                       -38-
<PAGE>

        Attention: Linda K. Myers, P.C.
        Telecopier No.: (312) 861-2200

(iv)    if to the Backup Servicer:

        Countrywide Home Loans Servicing LP
        450 American Street, MS-SV3-A
        Simi Valley, CA 93065
        Attention: Thomas P. Lin
        Telecopier No.: (805) 578-6177

        or such other address as may hereafter be furnished to the other party
by like notice. Any such demand, notice, or communication hereunder shall be
deemed to have been received on the date delivered to or received at the
premises of the address (as evidenced, in the case of registered or certified
mail, by the date noted on the return receipt).

        Section 11.05   SEVERABILITY OF PROVISIONS.

        Any part, provision, representation or warranty 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 or warranty of
this Agreement which is prohibited or unenforceable or is held to be void or
unenforceable in any jurisdiction shall be ineffective, as to such jurisdiction,
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. If the invalidity of any
part, provision, representation or warranty of this Agreement shall deprive any
party of the economic benefit intended to be conferred by this Agreement, the
parties shall negotiate, in good faith, to develop a structure the economic
effect of which is nearly as possible the same as the economic effect of this
Agreement without regard to such invalidity.

        Section 11.06   EXHIBITS.

        The exhibits to this Agreement are hereby incorporated and made a part
hereof and are an integral part of this Agreement. Section 11.07 GENERAL
INTERPRETIVE PRINCIPLES.

        For purposes of this Agreement, except as otherwise expressly provided
or unless the context otherwise requires:

                (i)     the terms defined in this Agreement have the meanings
assigned to them in this Agreement and include the plural as well as the
singular, and the use of any gender herein shall be deemed to include the other
gender;

                                       -39-
<PAGE>

                (ii)    accounting terms not otherwise defined herein have the
meanings assigned to them in accordance with generally accepted accounting
principles;

                (iii)   references herein to "Articles," "Sections,"
"Subsections," "Paragraphs," and other subdivisions without reference to a
document are to designated Articles, Sections, Subsections, Paragraphs and other
subdivisions of this Agreement;

                (iv)    a reference to a Subsection without further reference to
a Section is a reference to such Subsection as contained in the same Section in
which the reference appears, and this rule shall also apply to Paragraphs and
other subdivisions;

                (v)     the words "herein," "hereof," "hereunder" and other
words of similar import refer to this Agreement as a whole and not to any
particular provision; and

                (vi)    the term "include" or "including" shall mean without
limitation by reason of enumeration.

        Section 11.08   REPRODUCTION OF DOCUMENTS.

        This Agreement and all documents relating hereto, including, without
limitation, (i) consents, waivers and modifications which may hereafter be
executed, (ii) documents received by any party at the closing, and (iii)
financial statements, certificates and other information previously or hereafter
furnished, may be reproduced by any photographic, photostatic, microfilm,
micro-card, miniature photographic or other similar process. The parties agree
that any such reproduction shall be admissible in evidence as the original
itself in any judicial or administrative proceeding, whether or not the original
is in existence and whether or not such reproduction was made by a party in the
regular course of business, and that any enlargement, facsimile or further
reproduction of such reproduction shall likewise be admissible in evidence.

        Section 11.09   CONFIDENTIALITY OF INFORMATION.

        Each party recognizes that, in connection with this Agreement, it may
become privy to non-public information regarding the financial condition,
operations and prospects of the other party. Except as required to be disclosed
by law (including, without limitation, upon the request or demand of any
official creditors' committee in the Chapter 11 Cases), each party agrees to
keep all non-public information regarding the other party strictly confidential,
and to use all such information solely in order to effectuate the purpose of
this Agreement.

        Section 11.10   RECORDATION OF ASSIGNMENTS OF MORTGAGE.

        To the extent permitted by applicable law, each of the Assignments of
Mortgage is subject to recordation in all appropriate public offices for real
property records in all the counties or other comparable jurisdictions in which
any or all of the Mortgaged Properties are situated, and in any other
appropriate public recording office or elsewhere, such recordation to be
effected by the Servicer. The Servicer shall not be responsible for the cost or
preparation of such recordation.

                                       -40-
<PAGE>

        Section 11.11   ASSIGNMENT.

        This Agreement is assignable by the Agent upon notice to the
Administrative Borrower, the Servicer and the Backup Servicer (the "NOTICE
DATE") in whole or in part without the consent of the Borrowers, the Servicer or
the Backup Servicer, provided that the rights with respect to this Agreement
shall not be assigned without the associated liabilities with respect to events
occurring after the Notice Date (Agent shall remain liable with respect to
events occurring up to and including the Notice Date). The Borrowers shall have
the right, only upon prior written consent of the Agent, but without the consent
of the Servicer and the Backup Servicer, to assign, in whole or in part, their
interests under this Agreement with respect to some or all of the Mortgage
Loans, and designate any person to exercise any rights of the Borrowers
hereunder. In no event shall Borrowers sell a partial interest in any Mortgage
Loan. The Backup Servicer shall not assign this Agreement without the prior
written consent of the Agent, which consent shall not be unreasonably withheld,
delayed or conditioned. All references to the Bororwers in this Agreement shall
be deemed to include its assignees or designees.

        Section 11.12   NO PARTNERSHIP.

        Nothing herein contained shall be deemed or construed to create a
co-partnership or joint venture between the parties hereto and the services of
the Servicer shall be rendered as an independent contractor and not as agent for
Borrowers.

        Section 11.13   EXECUTION; SUCCESSORS AND ASSIGNS.

        This Agreement may be executed in one or more counterparts and by the
different parties hereto on separate counterparts, each of which, when so
executed, shall be deemed to be an original; such counterparts, together, shall
constitute one and the same agreement. Subject to SECTIONS 8.04 AND 9.03 AND
11.11, this Agreement shall inure to the benefit of and be binding upon the
Servicer, the Backup Servicer and the Borrowers and their respective successors
and assigns.

        Section 11.14   ENTIRE AGREEMENT.

        Each of the Servicer, the Borrowers and the Backup Servicer acknowledges
that no representations, agreements or promises were made to it by the other
party or any of its employees other than those representations, agreements or
promises specifically contained herein. This Agreement sets forth the entire
understanding among the parties hereto and shall be binding upon all successors
of all of the parties.

                            [SIGNATURE PAGES FOLLOW]

                                       -41-
<PAGE>

        IN WITNESS WHEREOF, the Servicer, the Borrowers, the Agent and the
Backup Servicer have caused their names to be signed hereto by their respective
officers thereunto duly authorized as of the date and year first above written.

                                      SERVICER

                                      AMERICAN BUSINESS CREDIT, INC.

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

                                      BORROWERS

                                      AMERICAN BUSINESS FINANCIAL SERVICES, INC.
                                      AMERICAN BUSINESS CREDIT, INC.
                                      HOMEAMERICAN CREDIT, INC.
                                      AMERICAN BUSINESS MORTGAGE SERVICES, INC.
                                      TIGER RELOCATION COMPANY
                                      ABFS CONSOLIDATED HOLDINGS, INC.

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

                                      AGENT

                                      GREENWICH CAPITAL FINANCIAL
                                      PRODUCTS, INC.

                                      By:  /s/ Jason Kennedy
                                          --------------------------------------
                                           Name:  Jason Kennedy
                                           Title:  Associate

                                       -42-
<PAGE>

                                      BACKUP SERVICER

                                      COUNTRYWIDE HOME LOANS
                                      SERVICING LP

                                      By:  COUNTRYWIDE GP, INC.
                                      Its: General Partner

                                      By: /s/ Thomas P. Lin
                                          --------------------------------------
                                           Name:  Thomas P. Lin
                                           Title:  Senior Vice President

                                      -43-

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