Document:

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                                 Exhibit 10.101

                          RADIAN ASSET ASSURANCE INC.,
                             as Certificate Insurer,

                HOMEAMERICAN CREDIT, INC. D/B/A UPLAND MORTGAGE,
                      as an Original Mortgage Loan Seller,

                   AMERICAN BUSINESS MORTGAGE SERVICES, INC.,
                      as an Original Mortgage Loan Seller,

                         AMERICAN BUSINESS CREDIT, INC.,
              as an Original Mortgage Loan Seller and as Servicer,

                               ABFS 2003-1, INC.,
                       as Secondary Mortgage Loan Seller,

                   BEAR STEARNS ASSET BACKED SECURITIES, INC.,
                                  as Depositor,

                                       and

                              JPMORGAN CHASE BANK,

             as Trustee, as Back-up Servicer and as Collateral Agent

                        INSURANCE AND INDEMNITY AGREEMENT

                        ABFS MORTGAGE LOAN TRUST 2003-1,
           MORTGAGE PASS-THROUGH CERTIFICATES, SERIES 2003-1, CLASS M

                           Dated as of March 31, 2003

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                                TABLE OF CONTENTS

(This Table of Contents is for convenience of reference only and shall not be
deemed to be part of this Agreement. All capitalized terms used in this
Agreement and not otherwise defined shall have the meanings set forth in Article
I of this Agreement.)

                                                                           Page
                                                                           ----

ARTICLE I  DEFINITIONS.......................................................2

   Section 1.01  Defined Terms...............................................2
   Section 1.02. Other Definitional Provisions...............................6

ARTICLE II  REPRESENTATIONS, WARRANTIES AND COVENANTS........................6

   Section 2.01. Representations and Warranties..............................6
   Section 2.02. Affirmative Covenants......................................11
   Section 2.03. Negative Covenants.........................................17
   Section 2.04. Representations, Warranties and Covenants of
                   the Certificate Insurer..................................18

ARTICLE III  THE POLICY; REIMBURSEMENT......................................20

   Section 3.01. Issuance of the Policy.....................................20
   Section 3.02. Payment of Fees and Premium................................22
   Section 3.03. Reimbursement Obligation...................................23
   Section 3.04. Indemnification............................................25
   Section 3.05. Payment Procedure..........................................28
   Section 3.06. Subrogation................................................28
   Section 3.07. Assignment and Other Rights................................29

ARTICLE IV  FURTHER AGREEMENTS..............................................29

   Section 4.01. Effective Date; Term of the Insurance Agreement............29
   Section 4.02. Further Assurances and Corrective Instruments..............29
   Section 4.03. Obligations Absolute.......................................30
   Section 4.04. Assignments; Reinsurance; Third-Party Rights...............32
   Section 4.05. Liability of the Certificate Insurer.......................32
   Section 4.06. Annual Servicing Audit and Certification...................33

ARTICLE V  DEFAULTS AND REMEDIES............................................33

   Section 5.01. Defaults...................................................33
   Section 5.02. Remedies; No Remedy Exclusive..............................34
   Section 5.03. Waivers....................................................35

ARTICLE VI  MISCELLANEOUS...................................................36

   Section 6.01. Amendments, Etc............................................36
   Section 6.02. Notices....................................................36
   Section 6.03. Severability...............................................36
   Section 6.04. GOVERNING LAW..............................................37
   Section 6.05. Payments...................................................37

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   Section 6.06. Consent to Jurisdiction....................................37
   Section 6.07. Consent of the Certificate Insurer.........................38
   Section 6.08. Counterparts...............................................38
   Section 6.09. Headings...................................................38
   Section 6.10. Trial by Jury Waived.......................................38
   Section 6.11. Limited Liability..........................................38
   Section 6.12. Entire Agreement...........................................39
   Section 6.13. Joint and Several Liability................................39

                                       ii

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         INSURANCE AND INDEMNITY AGREEMENT (as may be amended, modified or
supplemented from time to time, this "Insurance Agreement"), dated as of March
31, 2003, by and among RADIAN ASSET ASSURANCE INC., a New York stock insurance
company, regulated by the Insurance Department of the State of New York, as
Certificate Insurer, AMERICAN BUSINESS CREDIT, INC., a Pennsylvania corporation
("ABC Inc."), in its capacity as an Original Mortgage Loan Seller and as
Servicer, HOMEAMERICAN CREDIT, INC. d/b/a UPLAND MORTGAGE, as an Original
Mortgage Loan Seller, AMERICAN BUSINESS MORTGAGE SERVICES, INC., as an Original
Mortgage Loan Seller, ABFS 2003-1, INC., as Secondary Mortgage Loan Seller, BEAR
STEARNS ASSET BACKED SECURITIES, INC., a Delaware corporation, in its capacity
as depositor (the "Depositor"), and JPMORGAN CHASE BANK, a New York banking
corporation, as Trustee, Back-up Servicer and Collateral Agent (the "Trustee").

                              W I T N E S S E T H:

         WHEREAS, (i) the Original Mortgage Loan Sellers have sold and assigned
their entire interest to the Secondary Mortgage Loan Seller and (ii) the
Secondary Mortgage Loan Seller has sold and assigned its entire interest to the
Depositor, and the Depositor has accepted from the Secondary Mortgage Loan
Seller the sale and assignment of such interest, in the Mortgage Loans pursuant
to an Unaffiliated Seller's Agreement, dated as of March 1, 2003, by and among
the Original Mortgage Loan Sellers, the Secondary Mortgage Loan Seller and the
Depositor (the "Purchase Agreement");

         WHEREAS, each of the Original Mortgage Loan Sellers and the Secondary
Mortgage Loan Seller has made certain representations and warranties with
respect to the related Mortgage Loans subject to the Purchase Agreement;

         WHEREAS, a Pooling and Servicing Agreement, dated as of March 1, 2003,
by and among the Depositor, the Servicer, the Back-up Servicer, the Collateral
Agent and the Trustee (as may be amended, modified or supplemented from time to
time as set forth therein, the "P&S Agreement") provides for, among other
things, the assignment of the Mortgage Loans by the Depositor to the Trustee for
the benefit of the Certificateholders and the Certificate Insurer, the issuance
of the ABFS Mortgage Loan Trust 2003-1 Mortgage Pass-Through Certificates,
Series 2003-1 evidencing the entire beneficial ownership interest in the Trust
Fund and the servicing of the Mortgage Loans;

         WHEREAS, the Certificate Insurer intends to issue the Policy, pursuant
to which it will agree to pay in favor of the Trustee for the benefit of the
Holders of the Class M Certificates, amounts in respect of certain payments on
the Class M Certificates;

         WHEREAS, the Certificate Insurer shall be paid a Premium as set forth
herein; and

         WHEREAS, each of the Sellers and the Depositor has undertaken certain
obligations under the Purchase Agreement and the P&S Agreement for the benefit
of the Certificate Insurer and in consideration for the Certificate Insurer's
issuance of its Policy.

         NOW, THEREFORE, in consideration of the premises and the mutual
agreements herein contained, the parties hereto agree as follows:
<PAGE>

                                    ARTICLE I
                                   DEFINITIONS

     Section 1.01. Defined Terms. Unless the context clearly requires
otherwise, capitalized terms used and not defined herein shall have the
respective meanings given to them in the P&S Agreement or, if not defined
therein, the Policy specified below. References herein to the Servicer shall
also be deemed to refer to ABC Inc. in its capacity as Servicer under the P&S
Agreement. For purposes of this Insurance Agreement, the terms set forth below
shall have the following meanings:

         "ABC Inc." means American Business Credit, Inc., a Pennsylvania
corporation, as seller and/or originator under the Purchase Agreement and as
Servicer under the P&S Agreement.

         "ABFS" means American Business Financial Services, Inc., a Delaware
corporation.

         "Affiliate" means, as to any specified Person, any other Person
controlling or controlled by or under common control with such specified Person.
For the purposes of this definition, "control" when used with respect to any
specified Person means the power to direct the management and policies of such
Person, directly or indirectly, whether through the ownership of voting
securities, by contract or otherwise; and the terms "controlling" or
"controlled" have meanings correlative to the foregoing.

         "Benefit Plan" means any "employee benefit plan," as defined in Section
3(3) of ERISA, and any other employee benefit arrangement or payroll practice,
including, without limitation, any bonus plan, consulting, employment or other
compensation agreement, incentive, equity or equity-based compensation, or
deferred compensation arrangement, stock purchase, severance pay, sick leave,
vacation pay, salary continuation for disability, hospitalization, medical
insurance, life insurance, scholarship program.

         "Certificate Insurer" means Radian Asset Assurance Inc., or any
successor thereto, as issuer of the Policy.

         "Certificates" means the ABFS Mortgage Loan Trust 2003-1 Mortgage
Pass-Through Certificates, Series 2003-1, issued pursuant to the P&S Agreement.

         "Class M Certificates" means those of the Certificates designated as
belonging to Class M pursuant to the P&S Agreement.

         "Closing Date" means the date hereof.

         "Code" means the Internal Revenue Code of 1986, as amended.

         "Commonly Controlled Entity" means, with respect to any Person, each
entity, whether or not incorporated, which is affiliated with such Person
pursuant to Section 414(b), (c), (m) or (o) of the Code.

         "Default" means any event which results, or which with the giving of
notice or the lapse of time or both would result, in an Event of Default.

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         "Depositor" means Bear Stearns Asset Backed Securities, Inc., a
Delaware corporation, or any successor thereto as Depositor under the P&S
Agreement.

         "Documents" has the meaning given to such term in Section 2.01(k)
herein.

         "ERISA" means the Employee Retirement Income Security Act of 1974,
including the rules and regulations thereunder, as amended from time to time.

         "ERISA Affiliate" means any entity or trade or business (whether or not
incorporated) which, together with the subject Person, would be treated as a
single employer or under common control under Section 414 of the Code or Section
4001 of ERISA and any general partnership of which any such entity is or has
been a general partner.

         "Event of Default" means any event of default specified in Section 5.01
of this Insurance Agreement.

         "Financial Statements" means, with respect to each of the Sellers, the
consolidated statements of financial condition of ABFS as of June 30, 2002 and
June 30, 2001, and the statements of operations, stockholders' equity and cash
flows for each of the years in the three-year period ended June 30, 2001 and for
the interim period ended December 31, 2002.

         "Fitch" means Fitch Ratings, and any successor thereto.

         "Indemnification Agreement" means the Indemnification Agreement dated
the Closing Date among the Certificate Insurer and Bear, Stearns & Co. Inc., as
representative of the Underwriters.

         "Insurance Agreement" has the meaning given to such term in the initial
paragraph hereof.

         "Insurer Information" means the information with respect to the
Certificate Insurer set forth in the Offering Document under the caption "THE
CERTIFICATE INSURER."

         "Investment Company Act" means the Investment Company Act of 1940,
including, unless the context otherwise requires, the rules and regulations
thereunder, as in effect from time to time.

         "Late Payment Rate" means the lesser of (A) the greater of (1) the
"prime rate" of interest, which is published in the "Money Rates" section of The
Wall Street Journal (any change in such rate of interest to be effective on the
date such change is so announced), plus 3%, and (2) the then applicable highest
rate of interest on the Class M Certificates and (B) the maximum rate
permissible under applicable usury or similar laws limiting interest rates.
Interest at the Late Payment Rate shall be computed on the basis of a 360-day
year and the actual number of days elapsed in the related accrual period.

         "Material Adverse Change" means, in respect of any Person, a material
adverse change in (i) the ability of such Person to perform its obligations
under any of the Operative Documents or (ii) the business, financial condition,

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results of operations or properties of such Person. References to a "Material
Adverse Change" herein which do not refer to a particular Person mean a Material
Adverse Change with regard to the Sellers, the Depositor or the Trust Fund.

         "Mortgage Loan Information" means the information in the Offering
Document regarding the Mortgage Loans set forth under the heading "THE MORTGAGE
LOAN POOL" and the related Sellers' underwriting standards set forth under the
headings "THE ORIGINATORS, THE SELLER AND THE SERVICER--Origination of Mortgage
Loans" and "--Underwriting Procedures and Practices" and "RISK FACTORS" (to the
extent of information concerning the Mortgage Loans thereunder).

         "Multiemployer Plan" means a multiemployer plan (within the meaning of
Section 400(1)(a)(3) of ERISA) in respect of which a Commonly Controlled Entity
makes contributions, is obligated to contribute or has liability.

         "Offering Document" means the Prospectus Supplement, dated March 26,
2003 in respect of the Class A, Class A-IO and Class M Certificates and any
amendment or supplement thereto.

         "Operative Documents" means this Insurance Agreement, the Policy, the
Indemnification Agreement, the Certificates, the Optional Termination Side
Letter, the Support Agreement, the Interest Rate Hedge Agreement, the
Underwriting Agreement, the P&S Agreement and the Purchase Agreement.

         "Optional Termination Side Letter" means the optional termination side
letter dated as of the date hereof from the Servicer to the Certificate Insurer
and the Trustee.

         "Original Mortgage Loan Seller" means each of ABC Inc., HomeAmerican
Credit, Inc. d/b/a Upland Mortgage and American Business Mortgage Services, Inc.
or any successor thereto, as originator/purchaser of the Mortgage Loans and
seller thereof to the Secondary Mortgage Loan Seller.

         "P&S Agreement" has the meaning given to such term in the recitals.

         "PBGC" means the Pension Benefit Guaranty Corporation or any successor
agency, corporation or instrumentality of the United States to which the duties
and powers of the Pension Benefit Guaranty Corporation are transferred.

         "Person" means an individual, joint stock company, trust,
unincorporated association, joint venture, corporation, business or other trust,
limited liability company, partnership or other organization or entity (whether
governmental or private).

         "Plan" means any Benefit Plan (other than a Multiemployer Plan) covered
by Title IV of ERISA, which is maintained by a Commonly Controlled Entity or in
respect of which a Commonly Controlled Entity has liability.

         "Policy" means the Financial Guaranty Insurance Policy, designated as
policy number FANI-0509-03090-NY, together with all endorsements thereto, issued

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by the Certificate Insurer in favor of the Trustee and for the benefit of the
Class M Certificateholders in respect of certain payments on the Class M
Certificates.

         "Premium" means the non-refundable premium payable in respect of the
Policy, which shall be payable (a) on the Closing Date in an amount equal to
$75,000.00 and (b) on each Distribution Date in an amount equal to the product
of (i) the Premium Percentage, (ii) the aggregate Certificate Principal Balance
of the Class A Certificates and the Class M Certificates that are Outstanding on
the immediately preceding Distribution Date (or on the Closing Date, in the case
of the first Distribution Date), after giving effect to any payments of
principal made on such immediately preceding Distribution Date other than any
such payment related to an unreimbursed Insured Payment and (iii) 1/12 (or, on
the first Distribution Date, a fraction, the numerator of which is the actual
number of days from and including the Closing Date to but excluding the first
Distribution Date, and the denominator of which is 360).

         "Premium Percentage" shall mean 0.20%.

         "Purchase Agreement" has the meaning given to such term in the
recitals.

         "S&P" means Standard & Poor's Ratings Services, a division of The
McGraw-Hill Companies, Inc., and any successor thereto.

         "Securities Act" means the Securities Act of 1933, including, unless
the context otherwise requires, the rules and regulations thereunder, as amended
from time to time.

         "Securities Exchange Act" means the Securities Exchange Act of 1934,
including, unless the context otherwise requires, the rules and regulations
thereunder, as amended from time to time.

         "Secondary Mortgage Loan Seller" means ABFS 2003-1, Inc. or any
successor thereto, as seller of the Mortgage Loans to the Depositor.

         "Seller" means each of the Original Mortgage Loan Sellers and the
Secondary Mortgage Loan Seller.

         "Servicing Information" means the information in the Offering Document
regarding the Servicer and certain of its servicing practices and set forth
under the heading "THE ORIGINATORS, THE SELLER AND THE SERVICER--The Servicer"
and "SERVICING OF THE MORTGAGE LOANS" (to the extent of information concerning
the Servicer) therein.

         "Transaction" means the transactions contemplated by the Operative
Documents, including the transactions described in the Offering Document.

         "Trustee" means JPMorgan Chase Bank, as the Trustee under the P&S
Agreement, and any successor thereto under the P&S Agreement.

         "Underwriter Information" has the meaning provided in section 3(c) of
the Indemnification Agreement.

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<PAGE>

         "Underwriters" means Bear Stearns & Co. Inc. and Credit Suisse First
Boston LLC.

         "Underwriting Agreement" means the Underwriting Agreement between Bear,
Stearns & Co. Inc., as representative of the Underwriters and the Depositor,
dated March 26, 2003, with respect to the offer and sale of certain of the
Certificates, as such may be amended, modified or supplemented from time to
time.

         Section 1.02. Other Definitional Provisions. The words "hereof,"
"herein" and "hereunder" and words of similar import when used in this Insurance
Agreement shall refer to this Insurance Agreement as a whole and not to any
particular provision of this Insurance Agreement, and Section, subsection,
Schedule and Exhibit references are to this Insurance Agreement unless otherwise
specified. The meanings given to terms defined herein shall be equally
applicable to both the singular and plural forms of such terms. The words
"include" and "including" and words of similar import shall be deemed to be
followed by the phrase "without limitation."

                                   ARTICLE II
                    REPRESENTATIONS, WARRANTIES AND COVENANTS

     Section 2.01. Representations and Warranties. Each of the Sellers, the
Depositor and the Servicer represents and warrants with respect to itself
(subject to Section 6.13), in each case, as of the Closing Date and as of the
date of each transfer of the Mortgage Loans (other than any Qualified Substitute
Mortgage Loan) to the Trust pursuant to the P&S Agreement, as follows:

         (a) Due Organization and Qualification. It is a corporation, duly
organized, validly existing and in good standing under the laws of the
jurisdiction of its incorporation or formation. It is duly qualified to do
business, is in good standing and has obtained all necessary licenses, permits,
charters, registrations and approvals (together, "approvals") necessary for the
conduct of its business as currently conducted and as described in the Offering
Document and the performance of its obligations under the Operative Documents to
which it is a party in each jurisdiction in which the failure to be so qualified
or to obtain such approvals would render any Operative Document unenforceable in
any material respect or would have a material adverse effect upon the
Transaction.

         (b) Power and Authority. It has all necessary power and authority to
conduct its business as currently conducted and as described in the Offering
Document, to execute and deliver, and to perform its obligations under, the
Operative Documents to which it is a party and to consummate the Transaction.

         (c) Due Authorization. The execution, delivery and performance by it of
the Operative Documents to which it is a party have been duly authorized by all
necessary action on its part and does not require any additional approvals or
consents from, or other action by or any notice to or filing with, any Person,
including any governmental entity or any of its stockholders, members or other
owners which have not previously been obtained or given by it.

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         (d) Noncontravention. The execution and delivery by it of the Operative
Documents to which it is a party, the consummation of the Transaction and the
satisfaction of the terms and conditions of the Operative Documents do not and
will not:

             (i) conflict with or result in any breach or violation of any
provision of its organizational documents or any law, rule, regulation, order,
writ, judgment, injunction, decree, determination or award currently in effect
having applicability to it or any of their respective material properties,
including regulations issued by any administrative agency or other governmental
authority having supervisory powers over it;

             (ii) constitute a default by it or result in the acceleration of
any obligation under, or breach any provision of, any loan agreement, mortgage,
indenture or other agreement or instrument to which it is a party or by which
any of their respective properties is or may be bound or affected; or

             (iii) result in or require the creation of any lien upon or in
respect of any of its assets, except as otherwise contemplated by the Operative
Documents.

         (e) Legal Proceedings. There is no action, proceeding or investigation
by or before any court, governmental or administrative agency or arbitrator
against or affecting it or any of its respective subsidiaries, any of its
properties or rights or any of its subsidiaries or any of the Mortgage Loans,
pending or, to its knowledge after reasonable inquiry, threatened, which, in any
case, could result in a Material Adverse Change.

         (f) Valid and Binding Obligations. The Operative Documents (other than
the Certificates) to which it is a party have been duly executed and delivered
by such party and constitute its legal, valid and binding obligations, as
applicable, enforceable against it in accordance with their respective terms,
except as such enforceability may be limited by bankruptcy, insolvency,
reorganization, moratorium or other similar laws affecting creditors' rights
generally and general equitable principles and public policy considerations as
to rights of indemnification for violations of federal securities laws. Without
attributing the representations and warranties in this sentence to the Servicer
or the Sellers, the Certificates when executed, authenticated and delivered by
the Trustee in accordance with the P&S Agreement, will be validly issued and
outstanding and entitled to the benefits of the P&S Agreement. It will not at
any time in the future deny that the Operative Documents to which it is a party
constitute its legal, valid and binding obligations.

         (g) Financial Statements. Without attributing the representations and
warranties in this Section 2.01(g) to the Depositor, such of ABFS's Financial
Statements as have been furnished to the Certificate Insurer, (i) are, as of the
dates and for the periods referred to therein, complete and correct in all
material respects, (ii) present fairly its financial condition and results of
operations as of the dates and for the periods indicated and (iii) have been
prepared in accordance with generally accepted accounting principles
consistently applied, except as certified therein (subject as to interim
statements to normal year-end adjustments). Since the respective dates of the
most recent of such Financial Statements, there has been no Material Adverse
Change with respect to it. Except as disclosed in the Financial Statements, it

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<PAGE>

is not subject to any contingent liabilities or commitments that, individually
or in the aggregate, have a material possibility of causing a Material Adverse
Change.

         (h) ERISA.

             (i) No accumulated funding deficiency (as defined in Section 302 of
ERISA or Section 412 of the Code), whether or not waived, has occurred with
respect to any Plan. No Plan has been terminated, and no Commonly Controlled
Entity has withdrawn from any Multiemployer Plan under circumstances that could
result in a Commonly Controlled Entity incurring liability under ERISA that has
not been satisfied. No Commonly Controlled Entity has withdrawn from a Plan that
is or was subject to Section 4063 of ERISA during a plan year in which such
Commonly Controlled Entity was a substantial employer (as defined in Section
4001(a)(2) of ERISA) and no Commonly Controlled Entity has had a cessation of
operations that could be treated as a withdrawal under Section 4062(e) of ERISA
in either case which could result in material liability to it. No reportable
event (as defined in Section 4043 of ERISA) or other event or condition has
occurred which could result in the termination of any Plan by the PBGC. As of
the last day of the Plan's most recently ended plan year, no Plan has
liabilities (determined using the actuarial and interest factors used by such
Plan for purposes of the actuarial report used for such plan year, the interest
and actuarial factors being reasonable at the time used,) that exceed the Plan's
assets by more than $100,000. As of the last day of the Plan's most recently
ended plan year, the aggregate liabilities for all Plans (determined using the
actuarial and interest factors used by such Plan for purposes of the actuarial
report used for such plan year, the interest and actuarial factors being
reasonable at the time used,) do not exceed the aggregate assets of the Plans by
more than $100,000. The liability to which the Commonly Controlled Entities
would become subject under ERISA if they withdrew completely from all
Multiemployer Plans (determined as of the most recent valuation date for each
Multiemployer Plan) does not exceed $100,000. No Multiemployer Plan is in
reorganization (as defined in Section 4241 of ERISA) or insolvent (as defined in
Section 4245 of ERISA).

             (ii) Each Commonly Controlled Entity is in compliance in all
material respects with ERISA and has not incurred and does not reasonably expect
to incur any liabilities to the PBGC under ERISA in connection with any Plan or
Multiemployer Plan in any capacity other than as a Commonly Controlled Entity
with respect to it, or to contribute now or in the future in respect of any Plan
or Multiemployer Plan.

         (i) Compliance With Law, Etc. No practice, procedure or policy
employed, or proposed to be employed, by it in the conduct of its business
violates any law, regulation, judgment, agreement, order or decree applicable to
either of them that, if enforced, could reasonably be expected to result in a
Material Adverse Change with respect to it.

         (j) Taxes. It has filed or has participated in the filing of a
consolidated filing with its parent company or companies prior to the date
hereof all United States federal, state and local tax returns that are required
to be filed and paid all taxes, including any assessments received by it or its
parent company or companies that are not being contested in good faith, to the
extent that such taxes have become due. Any taxes, fees and other governmental
charges payable by it or any of its respective parent companies in connection
with the Transaction, the execution and delivery of the Operative Documents to
which it is a party and the issuance of the Certificates have been paid or shall

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have been paid at or prior to the Closing Date if such taxes, fees or other
governmental changes were due on or prior to the Closing Date.

         (k) Accuracy of Information.

             (i) Without attributing the representations and warranties in this
Section 2.01(k)(i) to the Servicer or the Sellers, neither the Operative
Documents nor any other information furnished by it to the Certificate Insurer
and relating to the Operative Documents, the Mortgage Loans, the Trust Fund, the
Certificates, or the operations or financial condition of the Trustee, any
Seller, the Depositor, or the Servicer (as amended, supplemented or superseded,
collectively, the "Documents") contain any statement of a material fact which
was untrue or misleading in any material respect when made.

             (ii) Without attributing the representations and warranties in this
Section 2.01(k)(ii) other than to the Servicer and the Sellers, no information
furnished by it to the Certificate Insurer and relating to the Operative
Documents, the Mortgage Loans, the Trust Fund or its operations or financial
condition (as amended, supplement or superseded, collectively, the "Limited
Documents") contain any statement of a material fact which was untrue or
misleading in any material respect when made.

             (iii) It does not have any knowledge of any circumstances that
could reasonably be expected to cause a Material Adverse Change or, to the
extent that the representations and warranties in this sentence are attributable
to the Servicer or the Sellers, a Material Adverse Change with respect to it or
the Trust Fund.

             (iv) Since the furnishing by it of such Documents or, in the case
of the Servicer and the Sellers, such Limited Documents, there has been no
change, nor any development or event involving a prospective change known to it,
that would render any of such Documents or, in the case of the Servicer and the
Sellers, such Limited Documents untrue or misleading in any material respect.

         (l) Compliance With Securities Laws.

             (i) Without attributing the representations and warranties in this
Section 2.01(l)(i) to the Servicer or the Sellers, the offer and sale of the
Certificates comply in all material respects with all requirements of law,
including all registration requirements of applicable federal securities laws
and the representations and warranties made in the Underwriting Agreement are
true and correct as of the date of the Offering Document and the date of this
Insurance Agreement. Without limiting the foregoing, the Offering Document does
not contain any untrue statement of a material fact and does not omit to state a
material fact necessary to make the statements made therein, in light of the
circumstances under which they were made, not misleading; provided, however,
that no representation is made with respect to the Insurer Information, the
Servicing Information or the Mortgage Loan Information. The offer and sale of
the Certificates have not been and will not be in violation of the Securities
Act, any other federal, state or local securities laws. The P&S Agreement is not
required to be qualified under the Trust Indenture Act, and none of the Trustee,
the Depositor or the Trust Fund is required to be registered as an "investment
company" under the Investment Company Act. Each of the Trust Fund and the

                                       9
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Depositor will satisfy in all material respects any of the information reporting
requirements of the Securities Exchange Act arising out of the Transaction to
which it or the Depositor is subject.

             (ii) Without attributing the representations and warranties in this
Section 2.01 (l)(ii) other than to the Servicer, the Servicing Information does
not contain any untrue statement of a material fact and does not omit to state a
material fact necessary to make the statements made therein, in light of the
circumstances under which they were made, not misleading. The Servicer has not
participated in the offer and sale of the Certificates.

             (iii) Without attributing the representations and warranties in
this Section 2.01(l)(iii) other than to the Sellers, the Mortgage Loan
Information does not contain any untrue statement of a material fact and does
not omit to state a material fact necessary to make the statements made therein,
in light of the circumstances under which they were made, not misleading. None
of the Sellers have participated in the offer and sale of the Certificates.

         (m) Operative Documents. Each of the representations and warranties
made by it in the Operative Documents (other than this Insurance Agreement) to
which it is a party is true and correct in all material respects and it hereby
makes each such representation and warranty to, and for the benefit of, the
Certificate Insurer as if the same were set forth in full herein; provided,
however, that, except as provided in Section 3.04 and subject to Article V
hereto, the remedies for a breach of any such representation or warranty shall
be limited to the remedies therefor provided in the related Operative Document.

         (n) No Consents. No consent, license, approval or authorization from,
or registration, filing or declaration with, any regulatory body, administrative
agency, or other governmental instrumentality, nor any consent, approval, waiver
or notification of any creditor, lessor or other nongovernmental person, is
required in connection with the execution, delivery and performance by it of
this Insurance Agreement or of any other Operative Document to which such Person
is a party, except (in each case) as have been obtained and are in full force
and effect.

         (o) Solvency; Fraudulent Conveyance. It is solvent and will not be
rendered insolvent by the Transaction and, after giving effect to the
Transaction, it will not be left with an unreasonably small amount of capital
with which to engage in its business, and it does not intend to incur, nor does
it believe that it has incurred debts beyond its ability to pay as they mature.
None of the Sellers, the Servicer, the Depositor or the Trustee contemplates the
commencement of insolvency, bankruptcy, liquidation or consolidation proceedings
or the appointment of a receiver, liquidator, conservator, trustee or similar
official in respect of the Sellers, the Servicer, the Depositor or the Trustee,
or any of their respective assets. The amount of consideration being received by
the Original Mortgage Loan Sellers upon the sale of Mortgage Loans to the
Secondary Mortgage Loan Seller and by the Secondary Mortgage Loan Seller upon
the sale of the Mortgage Loans to the Depositor constitutes reasonably
equivalent value and fair consideration therefor. The amount of consideration
being received by the Depositor upon the sale of the Certificates to the
Underwriters constitutes reasonably equivalent value and fair consideration for
the Certificates. None of the Original Mortgage Loan Sellers are transferring
the Mortgage Loans to the Secondary Mortgage Loan Seller and the Secondary

                                       10
<PAGE>

Mortgage Loan Seller is not transferring the Mortgage Loans to the Depositor and
the Depositor is not transferring Mortgage Loans to the Trust Fund, nor is the
Depositor transferring the Certificates to the Underwriters, with any intent to
hinder, delay or defraud any of the Sellers or the Depositor, or any of their
respective creditors.

         (p) Good Title; Absence of Liens. Without attributing the
representations. and warranties in this subsection 2.01(p) to the Servicer or
the Sellers, immediately prior to the conveyance of the Mortgage Loans to the
Trust Fund pursuant to the P&S Agreement, the Depositor had good title to, and
was the sole owner of each Mortgage Loan, free of any interest of any other
Person.

         (q) Rating Agency. The information supplied by each of the Sellers, the
Servicer and the Depositor to S&P and Fitch in connection with obtaining a
rating for the Class M Certificates did not contain any untrue statement of a
material fact or omit to state any material fact required to be stated in order
to make such information not misleading.

         (r) No Violation of Securities Exchange Act or Regulations T, U or X.
Without attributing the representations and warranties in this subsection
2.01(r) to the Servicer or the Sellers, none of the transactions contemplated in
the Operative Documents (including the use of the proceeds from the sale of any
Class of Certificates) will result in a violation of Section 7 of the Securities
Exchange Act, or any regulations issued pursuant thereto, or will result in a
violation of any of Regulations T, U or X of the Board of Governors of the
Federal Reserve System.

     Section 2.02. Affirmative Covenants. Each of the Sellers, the Depositor
and the Servicer hereby agrees, with respect to itself (subject to Section
6.13), in each case, that during the term of this Insurance Agreement, unless
the Certificate Insurer shall otherwise expressly consent in writing:

         (a) Compliance With Agreements and Applicable Laws. It shall comply in
all material respects with the terms and conditions of, and shall perform its
obligations under, and shall not be in default under, any of the Operative
Documents to which it is a party, and shall comply with all material
requirements of any law, rule or regulation applicable to it.

         (b) Existence. It and its successors and permitted assigns shall
maintain its existence and shall at all times continue to be duly organized
under the laws of its jurisdiction of incorporation or formation and duly
qualified and duly authorized (as described in subsections 2.01(a), (b) and (c)
hereof) and shall conduct its business in accordance with the terms of its
organizational documents.

         (c) Financial Statements; Accountants' Reports; Other information. It
shall keep or cause to be kept in reasonable detail books and records of account
of its assets and business, including books and records relating to the
Transaction. Each of the Sellers, the Depositor and the Servicer shall furnish
or cause to be furnished to the Certificate Insurer in respect of itself:

                                       11
<PAGE>

             (i) Annual Financial Statements. As soon as available, and in any
event within 90 days after the close of ABFS's fiscal year, ABC Inc. shall
furnish the audited consolidated statement of financial condition of ABFS and
its subsidiaries as of the end of such fiscal year and the related audited
consolidated statements of operations, stockholders' equity and cash flows for
such fiscal year, all in reasonable detail and stating in comparative form the
respective figures for the corresponding date and period in the preceding fiscal
year, prepared in accordance with generally accepted accounting principles,
consistently applied, and accompanied by the audit opinion of its independent
accountants (which shall be a nationally recognized independent public
accounting firm or otherwise acceptable to the Certificate Insurer) and by the
certificate specified in Section 2.02(d).

             (ii) Quarterly Financial Statements. As soon as available and in
any event within 45 days after the close of each of the first three quarters of
each fiscal year, ABC Inc. shall furnish the unaudited consolidated statement of
financial condition of ABFS and its subsidiaries as of the end of such quarter
and the related unaudited consolidated statements of operations, stockholders'
equity and cash flows for the portion of the fiscal year then ended, all in
reasonable detail and stating in comparative form the respective figures for the
corresponding date and period in the preceding fiscal year, prepared in
accordance with generally accepted accounting principles consistently applied
(subject to normal year-end adjustments) and accompanied by the certificate
specified in Section 2.02(d).

             (iii) Initial Report. On or before the Closing Date, the Depositor
shall furnish or cause to be furnished to the Certificate Insurer a copy of a
magnetic tape setting forth, as to each Mortgage Loan to be included in the
Trust on the Closing Date, the information required under the definition of
"Mortgage Loan Schedule" in the P&S Agreement.

             (iv) Certain Information. Upon the written request of the
Certificate Insurer, copies of any proxy statements, financial statements,
reports and other documents that it or any of its affiliates files with the
United States Securities and Exchange Commission or any national securities
exchange.

             (v) Other Information. (A) Promptly upon receipt or delivery
thereof, copies of all schedules, financial statements or other similar reports
delivered to or by it pursuant to the terms of any of the Operative Documents,
including all reports and other information provided by or to the Trustee or any
holder of Certificates pursuant to the P&S and (B) promptly upon the written
request of the Certificate Insurer, such other information as the Certificate
Insurer may reasonably request.

         (d) Compliance Certificate. ABC Inc. shall, with respect to itself and
the Original Mortgage Loan Sellers, deliver or cause to be delivered to the
Certificate Insurer, concurrently with the delivery of the financial statements
required pursuant to subsection 2.02(c)(i) and (ii) hereof, one or more
certificates signed by an officer authorized to execute such certificates on its
behalf stating that:

             (i) a review of its performance under the Operative Documents to
which it is a party during such period has been made under such officer's
supervision;

                                       12
<PAGE>

             (ii) to the best of such individual's knowledge and belief
following reasonable inquiry, no Default or Event of Default has occurred, or if
a Default or Event of Default has occurred, specifying the nature thereof and,
if there is a right to cure such Default or Event of Default, stating in
reasonable detail (including, if applicable, any supporting calculations) the
steps, if any, being taken by it to cure such Default or Event of Default or to
otherwise comply with the terms of the agreement to which such Default or Event
of Default relates;

             (iii) the financial statements submitted in accordance with
subsection 2.02(c)(i) or (ii) hereof are complete and correct in all material
respects and present fairly the financial condition and the results of its,
operations or the operations of its parent company and consolidated subsidiaries
as of the dates and for the periods indicated, in accordance with generally
accepted accounting principles consistently applied; and

             (iv) the Servicer has in full force and effect a blanket fidelity
bond (or direct surety bond) and an errors and omissions insurance policy in
accordance with the terms and requirements of the P&S Agreement.

         (e) Access to Records; Discussions with Officers and Accountants. Upon
the prior written request of the Certificate Insurer, each of the Sellers, the
Servicer and the Depositor shall permit, at the Certificate Insurer's sole
expense, the Certificate Insurer or its authorized agents:

             (i) to inspect the books and records as they may relate to the
Certificates, the Mortgage Loans, the obligations of any such Person under the
Operative Documents to which it is a party, and the Transaction;

             (ii) to discuss the affairs, finances and accounts of such Person
(with respect to the Servicer or the Sellers, to the extent relating to its
capacity to perform its obligations under the Operative Documents to which it is
a party) with its chief operating officer and chief financial officer; and

             (iii) with its consent, which shall not be unreasonably withheld,
to discuss the affairs, finances and accounts of such Person (with respect to
the Servicer or the Sellers, to the extent relating to its capacity to perform
its obligations under the Operative Documents to which it is a party) with its
independent accountants; provided, however, that its officers shall have the
right to be present during such discussions.

     Such inspections and discussions shall be conducted during normal
business hours and shall not unreasonably disrupt the business of the Sellers,
the Servicer or the Depositor. The books and records of each of the Sellers, the
Servicer and the Depositor shall be maintained at its address as designated
herein for receipt of notices, unless it shall otherwise advise the parties
hereto in writing.

         (f) Notice of Material Events. It shall be obligated promptly to inform
the Certificate Insurer in writing of the occurrence of any of the following:

                                       13
<PAGE>

             (i) the submission of any claim or the initiation or threat of any
legal process, litigation or administrative or judicial investigation, or rule
making or disciplinary proceeding by or against it that (A) would be required to
be disclosed to its shareholders or to the United States Securities and Exchange
Commission if any Class of Certificates were publicly registered or (B) could
result in a Material Adverse Change, or the initiation of any proceeding or the
promulgation of any proposed or final rule which would likely result in a
Material Adverse Change;

             (ii) any change in the location of its principal office or any
change in the location of its books and records, other than the date of the
relocation by the Sellers and the Servicer to 100 East Penn Square,
Philadelphia, PA 19103 in July 2003; provided, that, if such relocation does not
occur in July 2003, it shall so inform the Certificate Insurer;

             (iii) the occurrence of any Default or Event of Default or any
Material Adverse Change;

             (iv) the commencement of any proceedings by or against it under any
applicable bankruptcy, reorganization, liquidation, rehabilitation, insolvency
or other similar law now or hereafter in effect or of any proceeding in which a
receiver, liquidator, conservator, trustee or similar official shall have been,
or may be, appointed or requested for it or any of its assets, or any actual,
proposed or anticipated assignment for the benefit of its creditors;

             (v) the receipt of notice that (A) it is being placed under
regulatory supervision, (B) any license, permit, charter, registration or
approval materially necessary for the conduct of its business is to be, or may
be, suspended or revoked or (C) it is to cease and desist any practice,
procedure or policy employed by it in the conduct of its business, and such
suspension, revocation or cessation may result in a Material Adverse Change; or

             (vi) the imposition of any tax, assessment or other government
charge upon the Trust Fund other than any such charge payable out of collections
on the Mortgage Loans pursuant to the P&S Agreement.

         (g) Further Assurances. It agrees to cooperate with S&P and Fitch in
connection with any review of the Transaction that may be undertaken by S&P or
Fitch after the date hereof.

         (h) Maintenance of Licenses. It has and shall maintain all licenses,
permits, charters and registrations which are material to the conduct of its
business.

         (i) Retirement of Class M Certificates. Without attributing the
covenants in this sentence to the Servicer or the Sellers, it shall instruct the
Trustee upon a retirement or other payment of all of the Class M Certificates to
surrender the Policy to the Certificate Insurer for cancellation.

         (j) Third-Party Beneficiary. It agrees that the Certificate Insurer
shall have all rights of a third-party beneficiary in respect of the Operative
Documents (other than this Insurance Agreement, the Underwriting Agreement, the
Certificates and any other Operative Document to which the Certificate Insurer
is a party) and hereby incorporates and restates its representations,

                                       14
<PAGE>

warranties, covenants and agreements as set forth therein or in any certificate
or other document delivered in connection with the Transaction for the benefit
of the Certificate Insurer.

         (k) Transaction Documents. It shall comply with each of the covenants
and other agreements made by it in any of the Operative Documents.

         (l) [Reserved]

         (m) Closing Documents. The Depositor shall provide or cause to be
provided to the Certificate Insurer (i) a photostatic or facsimile copy of each
of the Operative Documents and any other documents executed and/or delivered in
connection with the Transaction as requested by the Certificate Insurer
concurrently with the closing on the Closing Date, and (ii) an executed original
copy of each document executed in connection with the Transaction within 60 days
after the Closing Date.

         (n) Due Diligence. The Certificate Insurer shall have the right, so
long as any Class M Certificates remain outstanding, to conduct reviews of the
Servicer's practices through reviews of the Mortgage Loans and the servicing
practices of the Servicer and through reappraisals of Mortgaged Properties. Such
due diligence shall be conducted in a reasonable manner convenient to both the
Servicer and the Certificate Insurer and at the Certificate Insurer's sole
expense.

         (o) Disclosure Document. Each Offering Document delivered with respect
to the Class M Certificates shall clearly disclose that the Policy is not
covered by the property/casualty insurance security fund specified in Article 76
of the New York Insurance Law. In addition, each Offering Document delivered
with respect to the Class M Certificates which includes financial information of
the Certificate Insurer prepared in accordance with GAAP shall include the
following statement immediately preceding such financial information:

     The New York State Insurance Department recognizes only statutory
accounting practices for determining and reporting the financial condition and
results of operations of an insurance company, for determining its solvency
under the New York Insurance Law, and for determining where its financial
condition warrants the payment of a dividend to its stockholders. No
consideration is given by the New York State Insurance Department to financial
statements prepared in accordance with generally accepted accounting principles
in making any such determinations.

         (p) Special Purpose Entities.

             (i) Each of the Depositor and the Secondary Mortgage Loan Seller
shall conduct its business solely in its own name through its duly authorized
officers or agents so as not to mislead others as to the identity of the entity
with which those others are concerned.

             (ii) Each of the Depositor and the Secondary Mortgage Loan Seller
shall keep its assets and liabilities wholly separate from those of all other
entities. Neither the Depositor nor the Secondary Mortgage Loan Seller shall
commingle its funds or other assets with those of any of its Affiliates (other
than in respect of items of payment or funds which may be commingled until

                                       15
<PAGE>

deposit into the Collection Account in accordance with the P&S Agreement) and
shall not hold its assets in any manner that would create an appearance that
such assets belong to any such Affiliate, not maintain bank accounts or other
depository accounts to which any such Affiliate is an account party, into which
such Affiliate makes deposits or from which any such Affiliate has the power to
make withdrawals and not act as an agent or representative of any of its
Affiliates in any capacity.

             (iii) Neither the Depositor nor the Secondary Mortgage Loan Seller
shall guarantee any obligation of any of its Affiliates, or otherwise hold
itself out as responsible for the debts of any Affiliate.

             (iv) Each of the Depositor and the Secondary Mortgage Loan Seller
shall pay its own incidental administrative costs and expenses from its own
funds and allocate all other shared overhead expenses (including, without
limitation, telephone and other utility charges, the services of shared
employees, consultants and agent, and reasonable legal auditing expenses), and
other items of cost and expense shared between the Depositor or the Secondary
Mortgage Loan Seller and any respective Affiliate thereof, on the basis of
actual use to the extent practicable.

             (v) The financial statements, of the Secondary Mortgage Loan Seller
and the Depositor and their respective affiliates shall disclose the effects of
the Transactions in accordance with GAAP and shall disclose that the assets of
the Depositor are not available to pay creditors of the Sellers or their
respective Affiliates.

             (vi) The resolutions, agreements and other instruments of each of
the Depositor and the Secondary Mortgage Loan Seller underlying the transactions
described in this Insurance Agreement and in the other Documents shall, be
continuously maintained by it as its official records, separately identified and
held apart from the records of their respective Affiliates.

             (vii) Each of the Depositor and the Secondary Mortgage Loan Seller
shall take such actions as are necessary on its part to ensure that the facts
and assumptions set forth in the opinions delivered by its counsel remain true
and correct at all times.

         (q) Benefit Plan.

             (i) It shall comply in all material respects with the provisions of
ERISA, the Code and all other applicable laws, and the Plan and Multi-Employer
Plan regulations and interpretations thereunder to the extent applicable, with
respect to each Benefit Plan. Without limiting the foregoing, it shall not, and
shall cause each ERISA Affiliate not to:

                   (A) permit to exist any material accumulated funding
deficiency as defined in Section 302 of ERISA or Section 412 of the Code with
respect to any Plan or amend any Plan if, as a result of such amendment, it or
an ERISA Affiliate would be required to provide material security under Section
401 or 412 of the Code or Section 306 or 307 of ERISA; or

                                       16
<PAGE>

                    (B) terminate any Benefit Plan of either it or any ERISA
Affiliate if such termination would result in any material liability to it or an
ERISA Affiliate or withdraw from any Multiemployer Plan if such withdrawal would
result in any material liability to it or an ERISA Affiliate.

                (ii) It and its subsidiaries shall not engage in any non-exempt
prohibited transaction (within the meaning of Code Section 4975 or ERISA Section
406) with respect to any Benefit Plan which would result in a material liability
to it or any such subsidiary.

         Section 2.03. Negative Covenants. Each of the Sellers, the
Servicer, the Depositor and the Trustee hereby agrees, with respect to itself
(subject to Section 6.13), that during the term of this Insurance Agreement,
unless the Certificate Insurer shall otherwise expressly consent in writing:

             (a) Impairment of Rights. It shall not take any action, or fail to
take any action, if such action or failure to take action may result in a
Material Adverse Change (within the meaning of the second sentence of the
definition of such term, for the avoidance of doubt), nor shall it interfere
(or, with respect to the Trustee, intentionally interfere or fail to remove or
otherwise withdraw any unintentional interference by it brought to the attention
of a Responsible Officer, as defined in the P&S Agreement) with the enforcement
of any rights of the Certificate Insurer under or with respect to any of the
Operative Documents or with respect to the Trust Fund. It shall give the
Certificate Insurer written notice of any such event, action or failure to act
on the earlier of: (i) the date upon which any publicly available filing or
release is made with respect to such event, action or failure to act and (ii)
promptly prior to the date of occurrence of such event, action or failure to
act. It shall furnish to the Certificate Insurer all information reasonably
requested by it that is necessary to determine compliance with this paragraph.

             (b) Waiver, Amendments, Etc. It shall not modify, waive or amend,
or consent to any modification, waiver or amendment of, any of the terms,
provisions or conditions of the Operative Documents to which it is a party
without the prior written consent of the Certificate Insurer except as permitted
by the P&S Agreement.

             (c) Clean-up Calls. The Servicer shall not exercise its right to
terminate the Trust Fund by purchasing the Mortgage Loans and other assets at
the applicable Termination Price, or otherwise, without the consent of the
Certificate Insurer unless, as a result of the termination, all interest,
principal and other amounts due or otherwise owed in respect of the Class M
Certificates would be or otherwise are paid in full and, following such
termination, all amounts reimbursable or otherwise payable to the Certificate
Insurer under any Operative Document would be or otherwise are reimbursed or
otherwise paid in full of the applicable Termination Price or other
consideration payable in respect thereof. None of the Servicer, the Depositor or
the Trustee shall appoint, consent to or otherwise suffer the appointment of any
successor to the Servicer under the P&S Agreement without the consent of the
Certificate Insurer unless such successor shall have agreed to be bound by the
provisions of this Insurance Agreement and the Optional Termination Side Letter,
and upon becoming the successor to the Servicer under the P&S Agreement, the
Trustee shall be so bound.

                                       17
<PAGE>

             (d) Creation of Indebtedness; Guarantees. Except as contemplated by
the Documents, the Depositor shall not create, incur, assume or suffer to exist
any indebtedness other than indebtedness guaranteed or approved in writing by
the Certificate Insurer except debt for which there is no recourse to the
Depositor excluding recourse to the assets pledged to secure such indebtedness.
The Depositor shall not assume, guarantee, endorse or otherwise be or become
directly or contingently liable for the obligations of any Person by, among
other things, agreeing to purchase any obligation of another Person, agreeing to
advance funds to such Person or causing or assisting such Person to maintain any
amount of capital.

             (e) Retirement of Certificates. The Trustee shall, upon retirement
of the Class M Certificates, furnish to the Certificate Insurer a notice of such
retirement and, upon such retirement, shall surrender the Policy to the
Certificate Insurer for cancellation.

             (f) No Change in Name, Etc. The Depositor shall not change its name
(including using any trade names, fictitious names, assumed names or "doing
business as" names), identity or organizational structure in any manner that
would, could or might make any financing statement or continuation statement
filed in connection with the closing of the Transactions, or otherwise in
accordance herewith, seriously misleading unless it shall have given the
Certificate Insurer at least 60 days' prior written notice thereof and shall
have filed before the date of such change appropriate amendments to all such
previously filed financing statements or continuation statements.

             (g) Limitation on Mergers, Etc. The Depositor shall not consolidate
with or merge with or into any Person or transfer all or substantially all of
its assets to any Person or liquidate or dissolve except as provided in the
Operative Documents to which it is a party or as permitted hereby. The Depositor
shall furnish to the Certificate Insurer all information requested by the
Certificate Insurer that is reasonably necessary to determine compliance with
this paragraph.

             (h) Successors. No successor Servicer, Paying Agent, Collateral
Agent or Trustee shall be terminated or designated without the prior written
approval of the Certificate Insurer, which consent shall not be unreasonably
withheld or delayed.

         Section 2.04. Representations, Warranties and Covenants of the
Certificate Insurer. The Certificate Insurer represents and warrants to and
covenants with the other parties hereto as follows:

             (a) Organization and Licensing. The Certificate Insurer is duly
authorized and validly existing stock insurance company organized under the
Insurance Laws of the State of New York, duly qualified and licensed to issue
financial guaranty insurance policies under the laws of the State of New York
and is in good standing under the laws of that State.

             (b) Corporate Power. The Certificate Insurer has the corporate
power and authority to issue the Policy and execute and deliver this Insurance
Agreement and to perform all of its obligations hereunder and thereunder.

                                       18
<PAGE>

             (c) Authorization; Approvals. Proceedings legally required for the
issuance and execution of the Policy and the execution, delivery and performance
of this Insurance Agreement have been taken and licenses, orders, consents or
other authorizations or approvals of any governmental boards or bodies legally
required for the enforceability of the Policy and the conduct by the Certificate
Insurer of the business and activities contemplated by the Transaction have been
obtained; any proceedings not taken and any licenses, authorizations or
approvals not obtained are not material to the enforceability of the Policy.

             (d) Enforceability. The Policy, when issued, and this Insurance
Agreement will each constitute a legal, valid and binding obligation of the
Certificate Insurer, enforceable against the Certificate Insurer in accordance
with its terms, subject to bankruptcy, insolvency, reorganization, moratorium,
receivership and other similar laws affecting creditors' rights generally and to
general principles of equity and subject to principles of public policy limiting
the right to enforce the indemnification provisions contained therein and
herein, insofar as such provisions relate to indemnification for liabilities
arising under federal securities laws.

             (e) Insurer Information. The Insurer Information is limited. With
due regard for the limitations of the Insurer Information, however, as of the
date of the Offering Document and as of the date hereof, the Insurer Information
does not contain any untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the statements
contained therein, in the light of the circumstances under which they were made,
not misleading. Copies of the Certificate Insurer's quarterly and annual
statutory financial statements prepared on the basis of statutory accounting
principles as filed with the New York State Insurance Department and annual
financial statements prepared in accordance with generally accepted accounting
principles are available upon written request to the Certificate Insurer.

             (f) No Litigation. There are no actions, suits, proceedings or
investigations pending or, to the best of the Certificate Insurer's knowledge,
threatened against it at law or in equity or before or by any court,
governmental agency, board or commission or any arbitrator which, if decided
adversely, would materially and adversely affect its ability to perform its
obligations under the Policy or this Insurance Agreement.

             (g) The execution by the Certificate Insurer of this Insurance
Agreement will not, and the satisfaction of the terms hereof will not, conflict
with or result in a breach of any of the terms, conditions or provisions of the
organizational documents of the Certificate Insurer, or any restriction
contained in any contract, agreement or instrument to which the Certificate
Insurer is a party or by which it is bound or constitute a default under any of
the foregoing.

             (h) Confidential Information. The Certificate Insurer agrees that
it and its shareholders, directors, agents, accountants and attorneys shall keep
confidential any information or matter of which it becomes aware (i) as a result
of financial statements, reports or other information furnished pursuant to
Section 2.02(c) or (ii) during the inspections conducted or discussions had
pursuant to Section 2.02(e), unless such information is readily available from
public sources or is disclosed to the Certificate Insurer on a non-confidential
basis from any Person or source, which Person or source is not actually known to
the Certificate Insurer to be subject to a confidentiality obligation to the
Sellers, the Servicer or the Depositor, or except as may be otherwise required
by regulation, law or court order or requested by appropriate governmental

                                       19
<PAGE>

authorities or as necessary or expedient to preserve its rights or security
under or to enforce any of the Operative Documents or any other agreement
executed in connection with the transactions related to the Operative Documents
to which the Certificate Insurer is a party or of which the Certificate Insurer
is a third party beneficiary, or in connection with the defense of any legal
proceeding in which the Certificate Insurer is a party; provided, however, that
the foregoing shall not limit the right of the Certificate Insurer to make such
information available to its regulators, rating agencies, reinsurers,
participants, credit and liquidity providers, any government sponsored entities,
counsel and accountants. If the Certificate Insurer is requested or required (by
oral questions, interrogatories, requests for information or documents subpoena,
civil investigative demand or similar process) to disclose any information of
which it becomes aware through such inspections or discussions, the Certificate
Insurer will promptly notify the Sellers, the Servicer and the Depositor of such
request(s) so that the Sellers, the Servicer and the Depositor may seek an
appropriate protective order and/or waive the Certificate Insurer's compliance
with the provisions of this Insurance Agreement, unless the Certificate Insurer,
in the opinion of its counsel, is prohibited from providing such notice by any
tribunal, court or governmental agency or other governmental or
quasi-governmental authority. If, in the absence of a protective order or the
receipt of a waiver hereunder, the Certificate Insurer is, nonetheless, in the
opinion of its counsel, compelled to disclose such information to any tribunal
or else suffer a penalty or liability, the Certificate Insurer may disclose such
information to such tribunal that the Certificate Insurer is compelled to
disclose; provided, however, that a copy of all information disclosed is
provided to the Sellers, the Servicer and the Depositor promptly upon such
disclosure; provided, further, however, that no such copy must be delivered or
supplied if the Certificate Insurer, in the opinion of its counsel, is
prohibited from providing such a copy by any tribunal, court or governmental
agency or other governmental or quasi-governmental authority.

             (i) Compliance with Law, Etc. No practice, procedure or policy
employed, or proposed to be employed, by the Certificate Insurer in the conduct
of its business violates any law, regulation, judgment, agreement, order or
decree applicable to the Certificate Insurer that, if enforced, could result in
a Material Adverse Change with respect to the Certificate Insurer.

             (j) Rating. The Certificate Insurer is not aware of any facts with
regard to itself which, if disclosed to S&P or Fitch, would be reasonably
expected to result in a downgrade of the rating of the claims paying ability of
the Certificate Insurer by S&P or Fitch.

             (k) Securities Act Registration. To the extent that the Policy
constitutes a security within the meaning of Section 2(1) of the Securities Act,
the Policy is a security that is exempt from registration under the Securities
Act pursuant to the exemption provided by Section 3(a)(8) thereof.

                                  ARTICLE III
                            THE POLICY; REIMBURSEMENT

         Section 3.01. Issuance of the Policy. The Certificate Insurer
agrees to issue the Policy on the Closing Date subject to satisfaction of the
conditions precedent set forth below on or prior to the Closing Date:

                                       20
<PAGE>

             (a) Payment of Fees, Premium and Expenses. The Certificate Insurer
shall have been paid or reimbursed for, or payment shall have been made on
behalf of the Certificate Insurer of, that portion of the Premium and those fees
and expenses that are payable on the Closing Date;

             (b) Operative Documents. The Certificate Insurer shall have
received a copy of each of the Operative Documents, in form and substance
reasonably satisfactory to the Certificate Insurer, duly authorized, executed
and delivered by each party thereto (other than the Certificate Insurer);

             (c) Certified Documents and Resolutions. The Certificate Insurer
shall have received copies of (i) the organizational documents for each of the
Sellers, the Servicer, the Depositor and the other parties to the Operative
Documents and (ii) the resolutions of the Board of Directors of each such Person
authorizing the issuance of the Certificates and the execution, delivery and
performance by such Person of the Operative Documents to which it is a party and
the transactions contemplated thereby, certified by the Secretary or an
Assistant Secretary of such Person (which certificate shall state that such
organizational documents are in full force and effect without modification on
the Closing Date);

             (d) Incumbency Certificate. The Certificate Insurer shall have
received a certificate of the Secretary or an Assistant Secretary of each of the
Sellers, the Servicer, the Depositor and the other parties to the Operative
Documents certifying the names and signatures of the officers of each such
Person authorized to execute and deliver the Operative Documents to which such
Person is a party and that shareholder consent to the execution and delivery of
such documents is not necessary or has been obtained;

             (e) Representations and Warranties. The representations and
warranties of the Sellers, the Servicer, and the Depositor set forth or
incorporated by reference in this Insurance Agreement shall be true and correct
on and as of the Closing Date as if made on the Closing Date and the Certificate
Insurer shall have received a certificate of appropriate officers of each such
Person to that effect;

             (f) Opinions of Counsel. The Certificate Insurer shall have
received opinions of counsel addressed to the Certificate Insurer in respect of
the Sellers, the Servicer and the Depositor, and the other parties to the
Operative Documents and the Transaction, in form and substance satisfactory to
the Certificate Insurer and addressing such matters as the Certificate Insurer
may reasonably request;

             (g) Approvals, Etc. The Certificate Insurer shall have received
true and correct copies of all approvals and consents, if any (including any
required approval of the shareholders or other owners of equity interests in
each of the Sellers, the Servicer and the Depositor), required in connection
with the Transaction;

             (h) No Litigation, Etc. No suit, action or other proceeding,
investigation or injunction, or final judgment relating thereto, shall be
pending or threatened before any court, governmental or administrative agency or

                                       21
<PAGE>

arbitrator in which it is sought to restrain or prohibit or to obtain damages or
other relief in connection with any of the Operative Documents or the
consummation of the Transaction;

             (i) Legality. No statute, rule, regulation or order shall have been
enacted, entered or deemed applicable by any government or governmental or
administrative agency or court that would make the Transaction illegal or
otherwise prevent the consummation thereof;

             (j) Satisfaction of Conditions of the Underwriting Agreement. All
conditions in the Underwriting Agreement relating to the Underwriters'
obligation to purchase the Certificates shall have been satisfied. The
Certificate Insurer shall have received copies of each of the documents, and
shall be entitled to rely on each of the documents (other than the opinion of
counsel to the Underwriter), required to be delivered to the Underwriter
pursuant to the Underwriting Agreement;

             (k) Issuance of Ratings. The Certificate Insurer shall have
received confirmation that the Class M Certificates insured by the Policy are
rated at least "BBB" by S&P and Fitch, without regard to the Policy, and that
the Class M Certificates, when issued, will be rated at least "AA" by S&P and
Fitch;

             (l) No Default. No Default or Event of Default shall have occurred;

             (m) Additional Items. The Certificate Insurer shall have received
such other documents, instruments, approvals or opinions reasonably requested by
the Certificate Insurer, including evidence satisfactory to the Certificate
Insurer that the conditions precedent, if any, in the other Operative Documents
have been satisfied; and

             (n) Satisfactory Documentation. The Certificate Insurer and its
counsel shall have reasonably determined that all agreements, instruments,
certificates, opinions and other documents to be delivered in connection with
the issuance of the Class M Certificates conform to the terms of the Operative
Documents and the Offering Document.

         Section 3.02. Payment of Fees and Premium.

             (a) Legal, Accounting and Due Diligence Fees. ABC Inc. shall pay or
cause to be paid to the Certificate Insurer, on the Closing Date, the legal,
accounting and due diligence fees of the Certificate Insurer, as well as
disbursements of counsel to the Certificate Insurer.

             (b) Rating Agency Fees. ABC Inc. will promptly pay or cause to be
paid the initial fees of S&P and Fitch with respect to the Class M Certificates
and the transactions contemplated hereby following, receipt of a statement with
respect thereto. All periodic and subsequent fees of S&P or Fitch with respect
to, and directly allocable to, the Class M Certificates shall be for the account
of, and shall be billed to, ABC Inc.. The fees for any other rating agency shall
be paid by the party requesting such other agency's rating, unless such other
agency is a substitute for S&P or Fitch in the event that S&P or Fitch is no
longer rating the Class M Certificates, in which case the fees for such agency
shall be paid by ABC Inc.

                                       22
<PAGE>

         (c) Premium. In consideration of the issuance by the Certificate
Insurer of the Policy, the Certificate Insurer shall be entitled to receive
pursuant to this Insurance Agreement and the P&S Agreement, in the State of New
York, the Premium as and when due in accordance with the terms of this Insurance
Agreement (i) in the case of the Premium due on the Closing Date, directly from
the net proceeds of the issuance of the Class M Certificates or from ABC Inc. to
the extent that such proceeds are insufficient to pay such Premium, and (ii) on
each Distribution Date, pursuant to Section 6.05 of the P&S Agreement until the
Class M Certificates have been indefeasibly paid in full. The Premium paid under
this Insurance Agreement or under the P&S Agreement shall be nonrefundable and
the right of the Certificate Insurer to receive any Premium payable hereunder or
thereunder shall be absolute and unconditional, in each case without regard to
whether the Certificate Insurer makes any payment under the Policy or any other
circumstances relating to the Class M Certificates or the Policy (including any
provision being made for payment of the Class' M Certificates prior to
maturity). All payments of the Premium shall be made to the Certificate Insurer
by wire transfer to an account designated by the Certificate Insurer in a
written notice to ABC Inc. and the Trustee.

     Section 3.03. Reimbursement Obligation.

         (a) As and when due in accordance with and from the funds specified in
Section 6.05 of the P&S Agreement, the Certificate Insurer shall be entitled to
reimbursement for any payment made by the Certificate Insurer under the Policy
and any other amount reimbursable or otherwise payable to the Certificate
Insurer under this Agreement, to the extent not previously reimbursed or
otherwise paid. Such right of reimbursement shall be absolute and unconditional,
in each case without regard to whether the Certificate Insurer makes any payment
under the Policy or any other circumstances relating to the Class M Certificates
or the Policy (including any provision) being made for payment of the Class M
Certificates prior to maturity). Reimbursement shall be due and payable on the
date that any such amount is paid, in an amount equal to the amount so paid and
all such amounts previously paid that remain unreimbursed, together with
interest on any and all such amounts remaining unreimbursed (to the extent
permitted by law, if in respect of any unreimbursed amounts representing
interest) from the date such amounts became due until paid in full (after as
well as before judgment), at a rate of interest equal to the Late Payment Rate.

         (b) Each of the Depositor, the Sellers and the Servicer agrees to pay,
anything herein or in any of the other Operative Documents to the contrary
notwithstanding, and the Certificate Insurer shall be entitled to full
reimbursement from it for:

             (i) in the case of the Servicer, (A) any payment made under the
Policy' arising as a result of any failure by the Servicer to repurchase,
substitute for or otherwise deposit any amount required to be deposited in
respect of any Mortgage Loan as mandated by any Operative Document (whether
because defective or otherwise), together with interest on any and all such
amounts remaining unreimbursed (to the extent permitted by law, if in respect of
any such unreimbursed amounts representing interest) from the date such amounts
became due until paid in full (after as well as before judgment), at a rate of
interest equal to the Late Payment Rate, and (B) any payment made under the
Policy arising as a result of the failure by the Servicer to otherwise pay or
deposit any amount required to be paid or deposited pursuant to the Operative
Documents (other than the Certificates), together with interest on any and all

                                       23
<PAGE>

such amounts remaining unreimbursed (to the extent permitted by law, if in
respect of any such unreimbursed amounts representing interest) from the date
such amounts became due until paid in full (after as well as before judgment),
at a rate of interest equal to the Late Payment Rate;

             (ii) in case of the Sellers, (A) any payment made under the Policy
arising as a result of its failure to repurchase, substitute for or otherwise
deposit any amount required to be deposited in respect of any Mortgage Loan as
mandated by the Purchase Agreement (whether because defective or otherwise),
together with interest on any and alt such amounts remaining unreimbursed (to
the extent permitted by law, if in respect of any such unreimbursed amounts
representing interest) from the date such amounts became due until paid in full
(after as well as before judgment), at a rate of interest equal to the Late
Payment Rate; and

             (iii) in the case of the Depositor, any payment made under the
Policy arising as a result of a breach by the Depositor of any of its
representations, warranties, covenants or agreements in any of the Operative
Documents (including any failure to make any payment, remittance or deposit
required to be made by it pursuant to the Operative Documents (other than the
Certificates)), together with interest on any and all such amounts remaining
unreimbursed (to the extent permitted by law, if in respect of any such
unreimbursed amounts representing interest) from the date such amounts became
due until paid in full (after as well as before judgment), at a rate of interest
equal to the Late Payment Rate.

         (c) Each of the Sellers, the Depositor and the Servicer agrees to pay
to the Certificate Insurer any and all reasonable charges, fees, costs and
expenses that the Certificate Insurer may reasonably pay or incur, including
reasonable attorneys' and accountants' fees and expenses, in connection with:

             (i) in the case of the Depositor, the enforcement, defense or
preservation of any rights in respect of any of the Operative Documents as
against or otherwise relating to it, including defending, monitoring or
participating in any litigation or proceeding (including any bankruptcy or other
insolvency proceeding in respect of any Transaction participant or any affiliate
thereof) relating to any of the Operative Documents or any party to any of the
Operative Documents (in its capacity as such a party) or the Transaction; and

             (ii) in the case of the Sellers and the Servicer, (i) any accounts
established to facilitate payments under the Policy to the extent that the
Certificate Insurer has not been immediately reimbursed on the date that any
amount is paid by the Certificate Insurer under the Policy, (ii) the
enforcement, defense or preservation of any rights in respect of any of the
Operative Documents as against or otherwise relating to it, including defending,
monitoring or participating in any litigation or proceeding (including any
bankruptcy or other insolvency proceeding in respect of any Transaction
participant or any affiliate thereof) relating to any of the Operative
Documents, any party to any of the Operative Documents (in its capacity as such
a party) or the Transaction or (iii) any amendment, waiver, consent or other
action with respect to, or related to, any Operative Document, whether or not
executed or completed.

                                       24
<PAGE>

Costs and expenses shall include a reasonable allocation of compensation and
overhead (up to a limit of $30,000 in the aggregate) attributable to the time of
employees of the Certificate Insurer spent in connection with the actions
described above (other than surveillance and monitoring), and the Certificate
Insurer reserves the right to charge a reasonable fee as a condition to
executing any waiver or consent proposed in respect of any of the Operative
Documents. Payments under this subsection 3.03(c) shall be made as the related
charges, fees, costs or expenses are paid or incurred by the Certificate
Insurer. All amounts payable under this Section 3.03 are to be immediately due
and payable without demand, in full, without any requirement on the part of the
Certificate Insurer or any other Person to seek reimbursement of such amounts
from any source of reimbursement or indemnity, or to allocate such amounts to
any other transaction that may have benefited from the expenditure of such
amounts.

         (d) Each of the Sellers, the Servicer and the Depositor agrees to pay
to the Certificate Insurer interest on any and all amounts specified in
subsection 3.03(b) or 3.03(c) from the date payable until payment thereof in
full and to pay to the Certificate Insurer interest on any and all amounts
specified in Section 3.02 or 3.04 from the date such amounts become due or, in
the case of Section 3.04, are incurred or paid by the Certificate Insurer until
payment thereof in full (after as well as before judgment), in each case at the
Late Payment Rate.

     Section 3.04. Indemnification.

         (a) In addition to any and all of the Certificate Insurer's rights of
reimbursement, indemnification, subrogation and to any other rights of the
Certificate Insurer pursuant hereto or under law or in equity, each of the
Depositor, the Sellers and the Servicer agrees to pay, and to protect, indemnify
and save harmless, the Certificate Insurer and its officers, directors,
shareholders, employees, agents and each Person, if any, who controls the
Certificate Insurer within the meaning of either Section 15 of the Securities
Act or Section 20 of the Securities Exchange Act from and against, any and all
claims, losses, liabilities (including penalties), actions, suits, judgments,
demands, damages, costs or expenses (including reasonable fees and expenses of
attorneys, consultants and auditors and reasonable costs of investigations
actually incurred) of any nature (including payments made under the Policy):

             (i) in the case of the Depositor and the Servicer (subject to the
proviso that, to the extent not required to be paid by the Certificate Insurer
to any other Person, the Servicer shall not be required to pay to the
Certificate Insurer or to protect, indemnify or hold the Certificate Insurer
harmless against punitive or other exemplary damages or loss of profits),
arising out of or relating to the breach by the Depositor or, with respect to
the Servicer, its breach of any of the representations, warranties or covenants
contained herein or arising out of or relating to the transactions contemplated
by the Operative Documents by reason of:

                 (A) with, respect to the Depositor only, any omission or action
in connection with the offering, sale, issuance or delivery of the Certificates
by the Depositor, other than those covered by subparagraph (F) below;

                 (B) the misfeasance or malfeasance of, or gross negligence or
theft committed by, the Depositor or, with respect to the Servicer, itself, or
any director, officer, employee, agent, independent contractor or other

                                       25
<PAGE>

representative of any such Person, in connection with the Transaction or arising
from or relating to any Operative Document;

                 (C) the violation by the Depositor or, with respect to the
Servicer, itself of (a) any United States federal, state or local law, rule or
regulation or (b) any judgment, order or decree that is applicable to any such
Person;

                 (D) the breach by the Depositor or, with respect to the
Servicer, itself of any representation, warranty, or covenant under any of the
other Operative Documents or the occurrence, in respect of any such Person under
any of the other Operative Documents, of any "incipient default" or "event of
default";

                 (E) shortfalls, if any (but in the case of the Servicer, only
to the extent caused by it), attributable to the (A) liability of any Person for
taxes payable in respect of the Certificates or any interest or interests
represented thereby, (B) failure to qualify or loss of status by, or termination
of, any REMIC as such or (C) imposition of income or other taxes on or with
respect to the Trust or the Trust Fund; or

                 (F) subject to the proviso that the Servicer shall be liable
under this subparagraph (F) only in respect of the Servicing Information and
that the Depositor shall not have liability in respect of the Servicing
Information, any untrue statement or alleged untrue statement of a material fact
contained in the Offering Document (or any preliminary version thereof or
information provided in addition thereto, to the extent not corrected in the
Offering Document as delivered or any subsequently provided additional
information consistent therewith), or any omission or alleged omission to state
in the Offering Document (or any preliminary version thereof or information
provided in addition thereto, to the extent not corrected in the Offering
Document as delivered or any subsequently provided additional information
consistent therewith) a material fact required to be stated in the Offering
Document (or any preliminary version thereof or information provided in addition
thereto, to the extent not corrected in the Offering Document as delivered or
any subsequently provided additional information consistent therewith) or
necessary to make the statements in the Offering Document (or any preliminary
version thereof or information provided in addition thereto, to the extent not
corrected in the Offering Document as delivered or any subsequently provided
additional information consistent therewith), in the light of the circumstances
under which they were made, not misleading; and provided, further, that this
subparagraph (F) does not cover the Insurer Information, the Underwriters
Information and the Mortgage Loan Information; and

             (ii) in the case of each of the Sellers, arising out of or relating
to its breach of any of the representations, warranties or covenants contained
herein or arising out of or relating to the transactions contemplated by the
Operative Documents by reason of:

                 (A) the misfeasance or malfeasance of, or gross negligence or
theft committed by, it or any of its directors, officers, employees, agents,
independent contractors or other representatives in connection with the
Transaction or arising from or relating to any Operative Document;

                                       26
<PAGE>

                 (B) the occurrence under any of the other Operative Documents,
of any "incipient default" or "event of default"; or

                 (C) any (1) untrue statement or alleged untrue statement of any
material fact contained in the Mortgage Loan Information, or the omission or the
alleged omission to state therein a material fact required to be stated therein
or necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading or (2) representation,
warranty or covenant made by any of the Sellers in the Purchase Agreement, the
P&S Agreement or any of the other Operative Documents, being or alleged to be
untrue or incorrect.

         (b) The Certificate Insurer agrees to pay, and to protect, indemnify
and save harmless, the Sellers, the Servicer, the Trustee and the Depositor, and
their respective officers, directors, shareholders, employees, agents and each
Person, if any, who controls any of them, within the meaning of either Section
15 of the Securities Act or Section 20 of the Securities Exchange Act from and
against, any and all claims, losses, liabilities (including penalties), actions,
suits, judgments, demands, damages, costs or expenses (including reasonable fees
and expenses of attorneys, consultants and auditors and reasonable costs of
investigations) of any nature arising out of or by reason of (i) any untrue
statement or alleged untrue statement of a material fact contained in the
Insurer Information or any omission or. alleged omission to state in the Insurer
Information a material fact required to be stated therein or necessary to make
the statements therein, in the light of the circumstances under which they were
made, not misleading, (ii) any failure of the Certificate Insurer to make a
payment required to be made under the Policy or (iii) a breach of any of the
representations and warranties of the Certificate Insurer contained in Section
2.04.

         (c) If any action or proceeding (including any governmental
investigation) shall be brought or asserted against any Person (individually, an
"Indemnified Party" and, collectively, the "Indemnified Parties") in respect of
which the indemnity provided, in Section 3.04(a) or (b) may be sought from any
party under Section 3.04(a), on the one hand, or the Certificate Insurer, on the
other (each, an "Indemnifying Party") hereunder, each such Indemnified Party
shall promptly notify the Indemnifying Party in writing, and the Indemnifying
Party shall assume the defense thereof, including the employment of counsel
reasonably satisfactory to the Indemnified Party and the payment of all expenses
thereof. The omission so to notify the Indemnifying Party will not relieve it
from any liability which it may have to any Indemnified Party except to the
extent the Indemnifying Party is prejudiced thereby. The Indemnified Party shall
have the right to employ separate counsel in any such action and to participate
in the defense thereof at the expense of the Indemnified Party, but the fees and
expenses of such separate counsel shall be at the expense of the Indemnifying
Party if (i) the Indemnifying Party has agreed in writing to pay such fees and
expenses, (ii) the Indemnifying Party shall have failed within a reasonable
period of time to assume, the defense of such action or proceeding and employ
counsel reasonably satisfactory to the Indemnified Party in any such action or
proceeding or (iii) the named parties to any such action or proceeding
(including any impleaded parties) include both the Indemnified Party and the
Indemnifying Party, and the Indemnified Party shall have been advised by counsel
that there may be one or more legal defenses available to it which are different
from or additional to those available to the Indemnifying Party (in which case,
if the Indemnified Party notifies the Indemnifying Party in writing that it

                                       27
<PAGE>

elects to employ separate counsel at the expense of the Indemnifying Party, the
Indemnifying Party shall not have the right to assume the defense of such action
or proceeding on behalf of such Indemnified Party, it being understood, however,
that the Indemnifying Party shall not, in connection with any one such action or
proceeding or separate but substantially similar or related actions or
proceedings in the same jurisdiction arising out of the same general allegations
or circumstances, be liable at any time for the reasonable fees and expenses of
more than one separate firm of attorneys acting as general counsel and one
separate firm of attorneys acting as local counsel for the Indemnified Parties,
which firm or firms shall be designated in writing by the Indemnified Party and
shall be reasonably satisfactory to the Indemnifying Party). The Indemnifying
Party shall not be liable for any settlement of any such action or proceeding
effected without its written consent, which consent shall not be unreasonably
withheld, conditioned or delayed, but, if settled with its written consent, or
if there is a final judgment for the plaintiff in any such action or proceeding
with respect to which ,the Indemnifying Party shall have received notice in
accordance with this subsection (c), the Indemnifying Party agrees to indemnify
and hold the Indemnified Parties harmless from and against any loss or liability
by reason of such settlement or judgment. Notwithstanding anything in this
paragraph to the contrary, the consent of such Indemnified Party shall not be
required if such settlement fully discharges, with prejudice against the
plaintiff, the claim or action against such Indemnified Party.

         (d) To provide for just and equitable contribution if the
indemnification provided by the Indemnifying Party is determined to be
unavailable or insufficient to hold harmless any Indemnified Party (other than
due to application of this Section), each Indemnifying Party shall contribute to
the losses incurred by the Indemnified Parties on the basis of the relative
fault of the Indemnifying Party, on the one hand, and the Indemnified Parties,
on the other hand.

     Section 3.05. Payment Procedure. In the event of any payment by the
Certificate Insurer, each other party hereto agrees to accept the voucher or
other evidence of payment as prima facie evidence of the propriety thereof and
the liability, if any, described in Section 3.03 therefor to the Certificate
Insurer. All payments to be made to the Certificate Insurer under this Insurance
Agreement shall be made to the Certificate Insurer in lawful currency of the
United States of America in immediately available funds at the notice address
for the Certificate Insurer as specified herein on the date when due or as the
Certificate Insurer shall otherwise direct by written notice to the other
parties hereto. In the event that the date of any payment to the Certificate
Insurer or the expiration of any time period hereunder occurs on a day that is
not a Business Day, then such payment or expiration of time period shall be made
or occur on the next succeeding Business Day with the same force and effect as
if such payment was made or time period expired on the scheduled date of payment
or expiration date except as provided in Section 6.05. Payments to be made to
the Certificate Insurer hereunder shall bear interest at the Late Payment Rate
from and including the date when payable to but excluding the date when paid.

     Section 3.06. Subrogation.

         (a) The parties hereto acknowledge that, to the extent of any payment
made by the Certificate Insurer pursuant to the Policy, the Certificate Insurer

                                       28
<PAGE>

shall be subrogated to the rights of each Class M Certificateholder to receive
payments in respect of the Class M Certificates, all in accordance with the P&S
Agreement and in accordance with the priorities set forth therein for
reimbursement of the Certificate Insurer as provided herein and therein. The
Depositor agrees to take, or cause to be taken, all actions deemed desirable by
the Certificate Insurer to preserve, enforce, perfect or maintain the perfection
in the Certificate Insurer's favor of such rights and of all equitable rights of
subrogation.

         (b) Each of the parties hereto agrees to promptly and duly take,
execute, acknowledge and deliver such further acts, documents, instruments and
assurances as the Certificate Insurer may from time to time reasonably request
to more effectively evidence any rights to assignment or subrogation under this
Article III, and to protect and perfect all of the Certificate Insurer's other
rights.

     Section 3.07. Assignment and Other Rights.

         (a) In consideration of the issuance of the Policy by the Certificate
Insurer, in the case of any payment made by or on behalf of the Certificate
Insurer under the Policy, in addition to and not by way of limitation of any of
the rights and remedies of the Certificate Insurer hereunder, under the Policy
or under the P&S Agreement with respect to such payment, each of the Depositor,
the Sellers and the Servicer hereby acknowledges and consents to the assignment
by the Trustee, on behalf of the Class M Certificateholders, to the Certificate
Insurer in accordance with the terms of the relevant notice and certificate (in
the case of any payment made by or on behalf of the Certificate Insurer under
the Policy) the rights of the Class M Certificateholders with respect to the
Class M Certificates to the extent of any such payment made on the Class M
Certificates under the Policy.

         (b) The rights and remedies of the Certificate Insurer described in
clause (a) above are in addition to, and not in limitation of, the rights of
subrogation and other rights and remedies otherwise available to the Certificate
Insurer in respect of payments under the Policy made by the Certificate Insurer.
The Trustee shall take such action and deliver such instruments as may be
reasonably requested or required by the Certificate Insurer to effectuate the
purpose or provisions of this Section 3.07.

                                   ARTICLE IV
                               FURTHER AGREEMENTS

     Section 4.01. Effective Date; Term of the Insurance Agreement. This
Insurance Agreement shall take effect on the Closing Date and shall remain in
effect until the later of such time as (a) the Certificate Insurer is no longer
subject to a claim under the Policy and the Policy shall have been surrendered
to the Certificate Insurer for cancellation and (b) all amounts payable to the
Certificate Insurer by any party hereunder or from any other source hereunder or
under any or the other Operative Documents, and all amounts payable under the
Class M Certificates, have been indefeasibly paid in full; provided, that the
provisions of Sections 3.02, 3.03 and 3.04 hereof shall survive any termination
of this Insurance Agreement.

     Section 4.02. Further Assurances and Corrective Instruments.

                                       29
<PAGE>

         (a) Except at such times as a default in payment under the Policy shall
exist or shall have occurred, none of the parties hereto shall grant any waiver
of rights under any of the Operative Documents to which it is a party without
the prior written consent of the Certificate Insurer, which shall not be
unreasonably withheld, conditioned or delayed and any such waiver without prior
written consent of the Certificate Insurer shall be null and void and of no
force or effect.

         (b) To the extent permitted by law, each party hereto agrees that it
will promptly and from time to time execute, acknowledge and deliver, or cause
to be executed, acknowledged and delivered, such supplements hereto and such
further instruments as the Certificate Insurer may reasonably request and as may
be required in the Certificate Insurer's judgment to effectuate the intention of
or facilitate the performance of this Insurance Agreement.

     Section 4.03. Obligations Absolute.

         (a) The obligations of the parties hereto shall be absolute and
unconditional and shall be paid or performed strictly in accordance with this
Insurance Agreement under all circumstances irrespective of:

             (i) any lack of validity or enforceability of any of the Operative
Documents or any amendment or other modification of, or waiver with respect to,
any of the Operative Documents;

             (ii) any exchange or release of any other obligations hereunder or
under any other Operative Document, or of any guarantee of or security for any
obligations hereunder or thereunder;

             (iii) the existence of any claim, counterclaim, setoff, defense,
reduction, abatement or other right that any Person may have at any time against
the Certificate Insurer or any other Person, including with respect to the
liability of any other Person for the payment of any such obligation;

             (iv) any document presented in connection with the Policy proving
to be forged, fraudulent, invalid or insufficient in any respect or any
statement therein being untrue or inaccurate in any respect;

             (v) any payment by the Certificate Insurer under the Policy against
presentation of a certificate or other document that does not strictly comply
with terms of
the Policy;

             (vi) any failure of the Depositor or ABC Inc. to receive the
proceeds from the sale of the Certificates; and

             (vii) the inaccuracy or alleged inaccuracy of any Servicer
Remittance Report or any notice and certificate upon which any drawing under the
Policy is based;

             (viii) the bankruptcy or insolvency of the Certificate Insurer or
any other party or any default or alleged default of the Certificate Insurer
under the Policy;

                                       30
<PAGE>

             (ix) any nonapplication or misapplication of the proceeds of any
drawing upon the Policy; and

             (x) any other circumstances, other than payment in full, that might
otherwise constitute a defense available to, or discharge of, any party to any
Operative Document.

         (b) The Sellers, the Servicer and the Depositor and any and all others
who are now or may become liable for all or part of their respective obligations
under this Insurance Agreement, agree to be bound by this Insurance Agreement or
any other Operative Document and, to the extent permitted by applicable law,
waive and renounce the right to assert as a defense to the performance of their
respective obligations each of the following: (i) any and all redemption and
exemption rights and the benefit of all valuation and appraisement privileges
against the indebtedness and obligations evidenced by any Operative Document or
by any extension or renewal thereof; (ii) diligence, presentment and demand for
payment, notices of nonpayment and of dishonor, protest of dishonor and notice
of protest; (iii) all notices in connection with the delivery and acceptance
hereof and all other notices in connection with the performance, default or
enforcement of any payment hereunder, except as required by the Operative
Documents; (iv) all rights of abatement, diminution, postponement or deduction,
and to any defense other than payment, and to any right of setoff or recoupment
arising out of any breach under any of the Operative Documents, by any party
thereto or any beneficiary thereof, or out of any obligation at any time owing
to any of them; and (v) any requirement that any Person exhaust any right, power
or remedy or proceed against any other Person under this Insurance Agreement or
any other Operative document, or against any other Person or any collateral
under any other obligation to pay, guarantee or security arrangement.

         (c) The Sellers, the Servicer, the Depositor and any and all others who
are now or may become liable for all or part of their respective obligations
under this Insurance Agreement, to the extent permitted by law, agree to be
bound by this Insurance Agreement and (i) agree that its liabilities hereunder
shall, except as otherwise expressly provided herein, be absolute and
unconditional and without regard to any setoff or counterclaim or the liability
of any other Person for the payment thereof; (ii) agree that any consent, waiver
or forbearance hereunder with respect to an event shall operate only for such
event and not for any subsequent event; (iii) consent to any and all extensions
of time that may be granted by the Certificate Insurer with respect to any
payment hereunder or other provisions hereof and to the release of any security
at any time given for any payment hereunder, or any part thereof, with or
without substitution, and to the release of any Person or entity liable for any
such payment; and (iv) consent to the addition of any and all other makers,
endorsers, guarantors and other obligors for any payment hereunder, and to the
acceptance of any and all other security for any payment hereunder, and agree
that the addition of any such obligors or security shall not affect the
liability of the parties hereto for any payment hereunder.

         (d) The obligations of ABC Inc. under Sections 3.03 and 3.04 shall be
automatically restored and reinstated if and to the extent that for any reason
any payment by or on behalf of any Seller is rescinded or must be otherwise
restored by any Person, whether as a result of any proceedings in bankruptcy or
reorganization or otherwise, and ABC Inc. agrees to indemnify each such Person
on demand for all reasonable costs and expenses (including fees and

                                       31
<PAGE>

disbursements of counsel) incurred by such Person in connection with such
rescission or restoration.

         (e) The obligations of ABC Inc. under Sections 3.03 and 3.04 are
continuing obligations and shall apply to all related amounts and other
obligations whenever arising.

         (f) Except as otherwise provided in this Insurance Agreement, nothing
herein shall be construed as prohibiting any party hereto from pursuing any
rights or remedies it may have against any Person in a separate legal
proceeding.

     Section 4.04. Assignments; Reinsurance; Third-Party Rights.

         (a) This Insurance Agreement shall be a continuing obligation of the
parties hereto and shall be binding upon and inure to the benefit of the parties
hereto and their respective successors and permitted assigns. None of the
Sellers, the Servicer, the Depositor or the Trustee may assign any of their
respective rights under this Insurance Agreement or any other Operative
Document, or delegate any of their respective duties hereunder or thereunder,
without the prior written consent of the Certificate Insurer. Any assignments
made in violation of this Insurance Agreement shall be null and void.

         (b) The Certificate Insurer shall have the right to give participations
in its rights under this Insurance Agreement and to enter into contracts of
reinsurance with respect to the Policy upon such terms and conditions as the
Certificate Insurer may in its discretion determine; provided, however, that no
such participation or reinsurance agreement or arrangement shall relieve the
Certificate Insurer of any of its obligations hereunder or under the Policy. The
Certificate Insurer shall be entitled to assign or pledge to any bank or other
investor providing liquidity or credit with respect to the Transaction or the
obligations of the Certificate Insurer in connection therewith any rights of the
Certificate Insurer under the Operative Documents or with respect to any real or
personal property or other interests pledged to the Certificate Insurer, or in
which the Certificate Insurer has a security interest, in connection with the
Transaction.

         (c) Except as provided herein with respect to participants and
reinsurers, nothing in this Insurance Agreement shall confer any right, remedy
or claim, express or implied, upon any Person, including, particularly, any
Certificateholder or Certificate Owner, other than the Certificate Insurer
against the Sellers, the Servicer or the Depositor, and all the terms,
covenants, conditions, promises and agreements contained herein shall be for the
sole and exclusive benefit of the parties hereto and their successors and
permitted assigns. None of the Trustee or any Certificateholder or Certificate
Owner shall have any right to payment from any Premiums paid or payable under
the P&S Agreement pursuant hereto or from any amounts paid pursuant to Sections
3.02, 3.03 or 3.04.

     Section 4.05. Liability of the Certificate Insurer. Neither the
Certificate Insurer nor any of its officers, directors or employees shall be
liable or responsible for: (a) the use that may be made of the Policy by the
Trustee or for any acts or omissions of the Trustee in connection therewith; or
(b) the validity, sufficiency, accuracy or genuineness of documents delivered to

                                       32
<PAGE>

the Certificate Insurer in connection with any claim under the Policy, or of any
signatures thereon, even if such documents or signatures should in fact prove to
be in any or all respects invalid, insufficient, fraudulent or forged (unless
the Certificate Insurer shall have actual knowledge thereof). In furtherance and
not in limitation of the foregoing, the Certificate Insurer may accept documents
that appear on their face to be in order, without responsibility for further
investigation.

     Section 4.06. Annual Servicing Audit and Certification. The annual
servicing audit required pursuant to Section 5.10 of the P&S Agreement shall be
performed by an independent third party reasonably acceptable to the Certificate
Insurer. Any one of the five major nationally recognized firms of independent
public accountants is deemed to be acceptable.

                                   ARTICLE V
                              DEFAULTS AND REMEDIES

     Section 5.01. Defaults. The occurrence of any of the following shall
constitute an Event of Default hereunder:

         (a) Any representation or warranty made by any party hereto (other than
the Certificate Insurer) under this Insurance Agreement or any such party, a
counterparty under the Interest Rate Hedge Agreement, or any other Person under
any other Operative Document, or in any certificate furnished hereunder or
thereunder by any such party or Person, shall prove to be untrue or incorrect in
any material respect; provided, however, that if such party effectively cures
any such defects in any representation or warranty with respect to the Mortgage
Loans under any Operative Document or certificate or report furnished under any
Operative Document, within the time period specified in the related document as
the cure period thereof, such defect shall not in and of itself constitute an
Event of Default;

         (b) (i) Any party hereto (other than the Certificate Insurer), a
counterparty under any Interest Rate Hedge Agreement, or any other Person shall
fail to pay when due any amount payable by it hereunder or under any other
Operative Document or (ii) a legislative body has enacted any law that declares
or a court of competent jurisdiction shall find or rule, or any Seller, the
Servicer or the Depositor shall assert, that this Insurance Agreement or any
other Operative Document is not valid and binding on any party hereto or
thereto;

         (c) The occurrence and continuance of an "event of default," "Event of
Default," or "Servicer Event of Default," or any similar occurrence, in each
case under any Operative Document, or any termination of or loss of status or
failure to qualify by any REMIC as such;

         (d) Any failure on the part of any party hereto (other than the
Certificate Insurer), a counterparty under any Interest Rate Hedge Agreements,
or any other Person to duly observe or perform in any material respect any other
of the covenants or agreements on its part contained in this Insurance Agreement
or in any other Operative Document which continues unremedied, with respect to
this Insurance Agreement, for a period of 30 days after the date on which
written notice of such failure requiring the same to be remedied shall have been
given to it by the Certificate Insurer (with a copy to the Trustee) or, with
respect to any other Operative Document, beyond any cure period provided therein

                                       33
<PAGE>

commencing on the date at which written notice of such failure requiring the
same to be remedied shall have been given to it by the Certificate Insurer (with
a copy to the Trustee);

         (e) A decree or order of a court or agency or supervisory authority
having jurisdiction in the premises in an involuntary case under any present or
future federal or state bankruptcy, insolvency or similar law or the appointment
of a conservator or receiver or liquidator or other similar official in any
bankruptcy, insolvency, readjustment of debt, marshaling of assets and
liabilities or similar proceedings, or for the winding-up or liquidation of its
affairs, shall have been entered against any Seller, the Servicer or the
Depositor, a counterparty under any Interest Rate Hedge Agreements and such
decree or order shall have remained in force undischarged or unstayed for a
period of 60 consecutive days;

         (f) Any Seller, the Servicer or the Depositor, the counterparty under
the Interest Rate Hedge Agreements shall consent to the appointment of a
trustee, conservator or receiver or liquidator or other similar official in any
bankruptcy, insolvency, readjustment of debt, marshaling of assets and
liabilities or similar proceedings of or relating to it or of or relating to all
or substantially all of its property;

         (g) Any Seller, the Servicer or the Depositor, a counterparty under any
Interest Rate Hedge Agreement shall admit in writing its inability to pay its
debts generally as they become due, file a petition to take advantage of or
otherwise voluntarily commence a case or proceeding under any applicable
bankruptcy, insolvency, reorganization or other similar statute, make an
assignment for the benefit of its creditors or voluntarily suspend payment of
its obligations; or

         (h) The Trust Fund or the Depositor shall become subject to
registration as an investment company under the Investment Company Act, or for
United States federal, state or local income and tax purposes, (i) the Trust
Fund shall not qualify as one or more separate REMICs or (ii) the Class A
Certificates, the Class M Certificates or the Class A-IO Certificates shall not
be treated as one or more regular interests in a REMIC.

     Section 5.02. Remedies; No Remedy Exclusive.

         (a) Upon the occurrence of an Event of Default, the Certificate Insurer
may exercise any one or more of the rights and remedies set forth below:

             (i) declare all indebtedness under this Insurance Agreement of
every type or description then owed by any Seller, the Servicer or the Depositor
to be immediately due and payable, and the same shall thereupon be immediately
due and payable;

             (ii) exercise any rights and remedies under this Insurance
Agreement or any other Operative Document in accordance with the terms hereof or
thereof or direct the Trustee, the Depositor or the Servicer to exercise its
rights and remedies in accordance with any Operative Document to which it is a
party;

                                       34
<PAGE>

             (iii) exercise any rights and remedies under the Purchase Agreement
in accordance with the terms thereof or direct the Depositor to exercise such
rights and remedies in accordance with the terms of the Purchase Agreement; or

             (iv) take whatever action at law or in equity as may appear
necessary or desirable in its judgment to collect the amounts, if any, then due
under this Insurance Agreement or any other Operative Document or to enforce
performance and observance of any obligation, agreement or covenant on the part
of any party (other than the Certificate Insurer) under this Insurance Agreement
or under any other Operative Document.

         (b) Unless otherwise expressly provided, no remedy herein conferred or
reserved is intended to be exclusive of any other available remedy, but each
remedy shall be cumulative and shall be in addition to other remedies given
under this Insurance Agreement or any other Operative Document or existing at
law or in equity. No delay or omission to exercise any right or power accruing
under this Insurance Agreement or any other Operative Document upon the
happening of any event set forth in Section 5.01 shall impair any such right or
power or shall be construed to be a waiver thereof, but any such right and power
may be exercised from time to time and as often as may be deemed expedient. In
order to entitle the Certificate Insurer to exercise any remedy reserved to the
Certificate Insurer in this Article, it shall not be necessary to give any
notice, other than such notice as may be required by this Article.

Section 5.03.  Waivers.

         (a) No failure by the Certificate Insurer to exercise, and no delay by
the Certificate Insurer in exercising, any right hereunder shall operate as a
waiver thereof. The exercise by the Certificate Insurer of any right hereunder
shall not preclude the exercise of any other right, and the remedies provided
herein to the Certificate Insurer are declared in every case to be cumulative
and not exclusive of any remedies provided by law or equity. Any waiver, consent
or forbearance hereunder with respect to an event or other occurrence shall
operate only with respect to such event or occurrence and not with respect to
any subsequent or other event or occurrence, whether or not similar.

         (b) The Certificate Insurer shall have the right, to be exercised in
its complete discretion, to waive any Event of Default hereunder, by a writing
setting forth the terms, conditions and extent of such waiver signed by the
Certificate Insurer and delivered to the Depositor (with a copy to the Trustee).
Unless such writing expressly provides to the contrary, any waiver so granted
shall extend only to the specific event or occurrence which gave rise to the
Event of Default so waived and not to any other similar event or occurrence
which occurs subsequent to the date of such waiver.

         (c) If any proceeding has been commenced to enforce any right or remedy
under this Insurance Agreement and such proceeding has been discontinued or
abandoned for any reason, or has been determined adversely to the Certificate
Insurer, then and in every such case the parties hereto shall, subject to any
determination in such proceeding, be restored to their respective former
positions hereunder and, thereafter, all rights and remedies of the Certificate
Insurer shall continue as though no such proceeding had been instituted.

                                       35
<PAGE>

                                   ARTICLE VI
                                  MISCELLANEOUS

     Section 6.01. Amendments, Etc. This Insurance Agreement may be amended,
modified, supplemented or terminated only by written instrument or written
instruments signed by the parties hereto. The Depositor agrees to provide a copy
of any amendment to this Insurance Agreement promptly to the rating agencies
maintaining a rating on the Certificates. No act or course of dealing shall be
deemed to constitute an amendment, modification, supplement or termination
hereof.

     Section 6.02. Notices. All demands, notices and other communications to
be given hereunder shall be in writing (except as otherwise specifically
provided herein) and shall be mailed by registered mail, reliable overnight
courier or personally delivered and telecopied to the recipient as follows:

         (a) To the Certificate Insurer:

              Radian Asset Assurance Inc.
              335 Madison Avenue
              New York, New York 10017
              Attention:    Chief Risk Officer and Chief Legal Officer
                            Re: ABFS Mortgage Loan Trust, Series 2003-1, Class M
              Facsimile:    (212) 682-5377
              Confirmation: (212) 983-5859

         (in each case in which notice or other communication to the Certificate
         Insurer refers to an Event of Default, a claim on the Policy or with
         respect to which failure on the part of the Certificate Insurer to
         respond shall be deemed to constitute consent or acceptance, then a
         copy of such notice or other communication should also be sent to the
         attention of the general counsel of the Certificate Insurer and shall
         be marked to indicate "URGENT MATERIAL ENCLOSED.")

         (b) To any other party hereto, at the address for such party provided
         in the Operative Documents (other than this Insurance Agreement) to
         which it is a party.

         A party may specify an additional or different address or addresses by
         writing mailed or delivered to the other parties as aforesaid. All such
         notices and other communications shall be effective upon receipt.

     Section 6.03. Severability. In the event that any provision of this
Insurance Agreement shall be held invalid or unenforceable by any court of
competent jurisdiction, the parties hereto agree that such holding shall not
invalidate or render unenforceable any other provision hereof. The parties
hereto further agree that the holding by any court of competent jurisdiction
that any remedy pursued by any party hereto is unavailable or unenforceable
shall not affect in any way the ability of such party to pursue any other remedy
available to it.

                                       36
<PAGE>

     Section 6.04. GOVERNING LAW. THIS INSURANCE AGREEMENT SHALL BE GOVERNED
BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK (WITHOUT
GIVING EFFECT TO THE CONFLICT OF LAWS PROVISIONS THEREOF).

     Section 6.05. Payments.

         (a) All payments to the Certificate Insurer hereunder shall be made in
lawful currency of the United States and in immediately available funds, shall
be made prior to 12:00 p.m. noon (New York City time) on the date such payment
is due by wire transfer pursuant to wire transfer instructions and bank account
information provided by the Certificate Insurer, or to such other office or
account as the Certificate Insurer may direct. Payments received by the
Certificate Insurer after 12:00 p.m. noon (New York City time) shall be deemed
to have been received on the next succeeding Business Day, and such extension of
time shall be included in computing interest, commissions or fees, if any, in
connection with such payment.

         (b) Whenever any payment under this Insurance Agreement stated to be
due on a day which is not a Business Day is to be made on the next succeeding
Business Day pursuant to Section 3.05, such extension of time shall in such
cases be included in computing interest, commissions or fees, if any, in
connection with such payment.

         (c) To the extent permitted by law, the Certificate Insurer shall be
entitled to interest on all amounts owed to the Certificate Insurer under this
Agreement in respect of interest from the date such amounts become due until
paid in full (after as well as before judgment), at a rate of interest equal to
the Late Payment Rate.

     Section 6.06. Consent to Jurisdiction.

         (a) The parties hereto hereby irrevocably submit to the non-exclusive
jurisdiction of the United States District Court for the Southern District of
New York and any court in the State of New York located in the Borough of
Manhattan, and any appellate court from any thereof, in any action, suit or
proceeding brought against it and to or in connection with this Insurance
Agreement, the Policy or any of the other Operative Documents or the Transaction
or for recognition or enforcement of any judgment, and the parties hereto hereby
irrevocably and unconditionally agree that all claims in respect of any such
action or proceeding may be heard or determined in such New York court or, to
the extent permitted by law, in such federal court. The parties hereto agree
that a final unappealable judgment in any such action, suit or proceeding shall
be conclusive and may be enforced in other jurisdictions by suit on the judgment
or in any other manner provided by law. To the extent permitted by applicable
law, the parties hereto hereby waive and agree not to assert by way of motion,
as a defense or otherwise in any such suit, action or proceeding, any claim that
it is not personally subject to the jurisdiction of such courts, that the suit,
action or proceeding is brought in an inconvenient forum, that the venue of the
suit, action or proceeding is improper or that the related documents or the
subject matter thereof may not be litigated in or by such courts.

                                       37
<PAGE>

         (b) To the extent permitted by applicable law, the parties hereto shall
not seek and hereby waive the right to any review of the judgment of any such
court by any court of any other nation or jurisdiction which may be called upon
to grant an enforcement of such judgment.

         (c) Service on the Depositor may be made by mailing or delivering
copies of the summons and complaint and other process which may be served in any
suit, action or proceeding to the Depositor addressed as follows: Bear Stearns
Asset Backed Securities, Inc., 383 Madison Avenue, New York, New York 10179,
Attention: General Counsel. Such address may be changed by the applicable party
or parties by written notice to the other parties hereto. The provision of
notice to change the address set forth in Section 6.02 shall constitute notice
for purposes of the preceding sentence, unless such notice shall expressly state
to the contrary.

         (d) Nothing contained in this Insurance Agreement shall limit or affect
any party's right to serve process in any other manner permitted by law or to
start legal proceedings relating to this Insurance Agreement, the Policy or any
of the other Operative Documents against any other party or its properties in
the courts of any jurisdiction.

     Section 6.07. Consent of the Certificate Insurer. In the event that the
consent of the Certificate Insurer is required under this Insurance Agreement,
the Policy or any of the other Operative Documents, the determination whether to
grant or withhold such consent shall be made by the Certificate Insurer in its
sole discretion without any implied duty towards any other Person, except as
otherwise expressly provided therein, and such consent shall be effective only
when and if given by the Certificate Insurer in writing.

     Section 6.08. Counterparts. This Insurance Agreement may be executed in
counterparts by the parties hereto, and all such counterparts shall constitute
one and the same instrument.

     Section 6.09. Headings. The headings of Articles and Sections and the
Table of Contents contained in this Insurance Agreement are provided for
convenience only. They form no part of this Insurance Agreement and shall not
affect its construction or interpretation. Unless otherwise indicated, all
references to Articles and Sections in this Insurance Agreement refer to the
corresponding Articles and Sections of this Insurance Agreement.

     Section 6.10. Trial by Jury Waived. Each party hereby waives, to the
fullest extent permitted by law, any right to a trial by jury in respect of any
litigation arising directly or indirectly out of, under or in connection with
this Insurance Agreement, the Policy or any of the other Operative Documents or
any of the transactions contemplated thereunder. Each party hereto (A) certifies
that no representative, agent or attorney of any party hereto has represented,
expressly or otherwise, that it would not, in the event of litigation, seek to
enforce the foregoing waiver and (B) acknowledges that it has been induced to
enter into this Insurance Agreement, the Policy (in the case of the Certificate
Insurer) and the other Operative Documents to which it is a party by, among
other things, this waiver.

     Section 6.11. Limited Liability. No recourse under this Insurance
Agreement, the Policy or any other Operative Document shall be had against, and
no personal liability shall attach to, any officer, employee, director,

                                       38
<PAGE>

affiliate or shareholder of any party hereto, as such, by the enforcement of any
assessment or by any legal or equitable proceeding, by virtue of any statute or
otherwise in respect of any of the Operative Documents, it being expressly
agreed and understood that this Insurance Agreement and each other Operative
Document is solely a corporate obligation of each party thereto and hereto, and
that any and all personal liability, either at common law or in equity, or by
statute or constitution, of every such officer, employee, director, affiliate or
shareholder for breaches of any party hereto of any obligations under any
Operative Document is hereby expressly waived as a condition of and in
consideration for the execution and delivery of this Insurance Agreement and the
issuance of the Policy hereunder.

     Section 6.12. Entire Agreement. This Insurance Agreement, the Policy
and the other Operative Documents set forth the entire agreement between the
parties with respect to the subject matter hereof and thereof and supersede and
replace any agreement or understanding that may have existed between the parties
prior to the date hereof in respect of such subject matter.

     Section 6.13. Joint and Several Liability. Each of the representations,
warranties, covenants and other agreements made by any of the Sellers in this
Insurance Agreement are made by such party for it and on its own behalf.
However, such agreements and all other obligations and other duties of
HomeAmerican Credit, Inc. d/b/a Upland Mortgage, American Business Mortgage
Services, Inc. and ABFS 2003-1, Inc. (collectively, the "ABFS Entities"),
separately or together with ABC Inc., under this Insurance Agreement shall be
joint and several obligations and duties of the ABFS Entities and ABC Inc.,
irrespective of any allocation of proceeds, rights or obligations between them
and of any other matter. Without limiting the generality of the foregoing, each
representation, warranty, covenant or other agreement designated in this
Insurance Agreement as a representation, warranty, covenant or other agreement
of the ABFS Entities, separately or together with ABC Inc., shall be a
representation, warranty, covenant or other agreement of ABC Inc., jointly and
severally with the ABFS Entities. ABC Inc. shall not exercise any right of
subrogation as against the ABFS Entities until one year and one day after the
Class M Certificates are no longer Outstanding, the Class M Certificateholders
and the Certificate Insurer have indefeasibly been paid in full all amounts
owing to them under the Class M Certificates, this Insurance Agreement and all
other Operative Documents, have been fully satisfied, discharged and otherwise
terminated and the security interest Granted under the P&S Agreement with
respect to the collateral in the Trust Fund has been released in accordance
therewith. If, prior to such time, any amount is paid by the ABFS Entities to
ABC Inc., or is otherwise received by ABC Inc. on account of any such right of
subrogation, such amount shall be held by it in trust for and shall be promptly
be paid by it to the Trustee.

                                       39
<PAGE>

         IN WITNESS WHEREOF, the parties hereto have executed this Agreement,
all as of the day and year first above mentioned.

               RADIAN ASSET ASSURANCE INC., as Certificate Insurer

               By: Myer R. Strauss
                   ---------------------------------
               Name: Myer R. Strauss
               Title: Vice President

               HOMEAMERICAN CREDIT, INC., d/b/a UPLAND MORTGAGE,
                as an Original Mortgage, as an Original Mortgage Loan Seller

               By: Jeffrey M. Ruben
                   ---------------------------------
               Name: Jeffrey M. Ruben
               Title: EVP

               AMERICAN BUSINESS MORTGAGE SERVICES, INC.,
                as an Original Mortgage Loan

               By: Jeffrey M. Ruben
                   ---------------------------------
               Name: Jeffrey M. Ruben
               Title: EVP

               AMERICAN BUSINESS CREDIT, INC.,
                as an Original Mortgage Loan Seller and as Servicer

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

               ABFS 2003-1, as Secondary Mortgage Loan Seller

               By: Jeffrey M. Ruben
                   ---------------------------------
               Name: Jeffrey M. Ruben
               Title: EVP

                                       40
<PAGE>

               BEAR STEARNS ASSET BACKED SECURITIES, INC., as Depositor

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

               JPMORGAN CHASE BANK, not in its individual capacity but
                solely as Trustee, as Back-up Servicer and as Collateral
                Agent

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

                                       41<PAGE>

                              AMENDED AND RESTATED
                          COMMITTED LINE OF CREDIT NOTE

$5,000,000                                                         June 2, 2003

         FOR VALUE RECEIVED, AMERICAN BUSINESS FINANCIAL SERVICES, INC. (the
"Borrower"), with an address at 111 Presidential Boulevard, Bala Cynwyd, PA
19004, promises to pay to the order of FIRSTRUST SAVINGS BANK (the "Bank"), in
lawful money of the United States of America in immediately available funds at
its offices located at 4612 Street Road, Trevose, PA 19053, or at such other
location as the Bank may designate from time to time, the principal sum of FIVE
MILLION DOLLARS ($5,000,000) or such lesser amount as may be advanced to or for
the benefit of the Borrower hereunder, together with interest accruing on the
outstanding principal balance from the date hereof, as provided below:

1. Rate of Interest. Amounts outstanding under this Note will accrue interest at
a per annum rate (the "Note Rate") equal to the LIBOR Rate (as hereinafter
defined) plus the Applicable Margin, calculated on the basis of a year of 360
days for the actual number of days elapsed. As used herein:

                           (i) "Applicable Margin" means: (A) 3.25 percentage
points with respect to loan advances supported by the X Note and the R Note, and
(B) 2.50 percentage points with respect to loan advances supported by the B
Note, as each of those terms are defined in the Amendment No. 2 referred to in
Section 7 hereof, provided that the interest rate hereon shall in no event be
less than (A) 5.25% with respect to loan advances supported by the X Note and
the R Note and (B) 4.50% with respect to loan advances supported by the B Note.

                           (ii) "LIBOR Rate" means, for each calendar month on
and after the date hereof and with respect to the principal outstanding
hereunder during such calendar month, the interest rate per annum determined by
the Bank by dividing (the resulting quotient rounded upwards, if necessary, to
the nearest 1/100th of 1%) (a) the rate of interest determined by the Bank in
accordance with its usual procedures (which determination shall be conclusive
absent manifest error) to be the average of the one (1) month London inter-bank
offered rates for U.S. Dollars quoted by the British Bankers' Association, or
appropriate successor, as set forth on Dow Jones Markets Service (formerly known
as Telerate) display page 3750 (or such other display page on the Dow Jones
Markets Service system as may replace display page 3750), or if British Bankers'
Association or its successor ceases to provide such quote, a comparable
replacement rate determined by the Bank (which determination shall be conclusive
absent manifest error), on the first day of such month by (b) a number equal to
1.00 minus the LIBOR Reserve Percentage;

                           (iii) "Business Day" means a day on which commercial
banks settle payments in U.S. dollars in New York City and London other than a
Saturday or Sunday or a legal holiday on which commercial banks are authorized
or required to be closed for business in New York, New York; and

                           (iv) "LIBOR Reserve Percentage" shall mean the
maximum effective percentage in effect on any day as prescribed by the Board of
Governors of the Federal Reserve System (or any successor) for determining the
reserve requirements (including, without limitation, supplemental, marginal and
emergency reserve requirements) with respect to eurocurrency funding (currently
referred to as "Eurocurrency liabilities").

<PAGE>

Upon maturity, whether by acceleration, demand or otherwise, and at the Bank's
option upon the occurrence of any Event of Default (as hereinafter defined) and
during the continuance thereof, this Note shall bear interest at a rate per
which shall be 2.5 percentage points in excess of the interest rate in effect
from time to time under this Note but not more than the maximum rate allowed by
law (the "Default Rate"). The Default Rate shall continue to apply whether or
not judgment shall be entered on this Note. The Default Rate is imposed as
liquidated damages for the purpose of defraying the Bank's expenses incident to
the handling of delinquent payments, but is in addition to, and not in lieu of,
the Bank's exercise of any rights and remedies hereunder, under other loan
documents or under applicable law, and any fees and expenses of any agents or
attorneys which the Bank may employ. In addition, the Default Rate reflects the
increased credit risk to the Bank of carrying a loan that is in default. The
Borrower agrees that the Default Rate is a reasonable forecast of just
compensation for anticipated and actual harm incurred by the Bank, and that the
actual harm incurred by the Bank cannot be estimated with certainty and without
difficulty.

If the Bank determines (which determination shall be final and conclusive) that,
by reason of circumstances affecting the eurodollar market generally, deposits
in dollars (in the applicable amounts) are not being offered to banks in the
eurodollar market for the selected term, or adequate means do not exist for
ascertaining LIBOR, then the Bank shall give notice thereof to the Borrower.
Thereafter, until the Bank notifies the Borrower that the circumstances giving
rise to such suspension no longer exist, (a) the availability of LIBOR shall be
suspended, and (b) the interest rate for all amounts outstanding under this Note
shall be immediately converted to a rate of interest per annum equal to the
Bank's variable prime rate ("Prime Rate") as in effect from time to time at Bank
as its prime rate, which rate is not necessarily the best or lowest rate which
Bank makes available to its commercial customers.

In addition, if, after the date of this Note, the Bank shall determine (which
determination shall be final and conclusive) that any enactment, promulgation or
adoption of or any change in any applicable law, rule or regulation, or any
change in the interpretation or administration thereof by a governmental
authority, central bank or comparable agency charged with the interpretation or
administration thereof, or compliance by the Bank with any guideline, request or
directive (whether or not having the force of law) of any such authority,
central bank or comparable agency shall make it unlawful or impossible for the
Bank to make or maintain or fund loans bearing interest based on LIBOR, the Bank
shall notify the Borrower in writing. Ten Business Days after receipt of such
notice, until the Bank notifies the Borrower that the circumstances giving rise
to such determination no longer apply, (a) the availability of LIBOR shall be
suspended, and (b) the interest rate on all amounts outstanding under this Note
shall be converted to the Prime Rate either (i) as of the first day of the
immediately preceding month if the Bank may lawfully continue to maintain
amounts outstanding hereunder to such day at a rate of interest based on LIBOR,
or (ii) immediately if the Bank may not lawfully continue to maintain amounts
outstanding hereunder at a rate of interest based on LIBOR.

                                      -2-
<PAGE>

2. Advances. The Borrower may borrow, repay and reborrow hereunder until the
Expiration Date, subject to the terms and conditions of this Note and the Loan
Documents (as defined herein). The "Expiration Date" shall mean January 14,
2004, or such later date as may be designated by the Bank by written notice from
the Bank to the Borrower. The Borrower acknowledges and agrees that in no event
will the Bank be under any obligation to extend or renew the Facility or this
Note beyond the Expiration Date. In no event shall the aggregate unpaid
principal amount of advances under this Note exceed the Facility Limit as set
forth in the Loan Agreement referred to in Section 7 hereof.

3. Advance Procedures. A request for advance made by telephone or electronically
must be promptly confirmed in writing by such method as the Bank may reasonably
require. The Borrower authorizes the Bank to accept telephonic requests for
advances, and the Bank shall be entitled to rely upon the authority of any
person providing such instructions. The Borrower hereby indemnifies and holds
the Bank harmless from and against any and all damages, losses, liabilities,
costs and expenses (including reasonable attorneys' fees and expenses) which may
arise or be created by the acceptance of such telephone requests or making such
advances. The Bank will enter on its books and records, which entry when made
will be presumed correct, the date and amount of each advance, as well as the
date and amount of each payment made by the Borrower.

4. Payment Terms. Accrued interest will be due and payable on the first day of
each month, beginning with the payment due on June 1, 2003. The outstanding
principal balance and any accrued but unpaid interest shall be due and payable
on the Expiration Date.

If any payment under this Note shall become due on a Saturday, Sunday or public
holiday under the laws of the State where the Bank's office indicated above is
located, such payment shall be made on the next succeeding business day and such
extension of time shall be included in computing interest in connection with
such payment. Payments received will be applied to charges, fees and expenses
(including reasonable attorneys' fees), accrued interest and principal in any
order the Bank may choose, in its sole discretion.

5. Late Payments. If the Borrower fails to make any payment of principal,
interest or other amount coming due pursuant to the provisions of this Note
within 15 calendar days of the date due and payable, the Borrower also shall pay
to the Bank a late charge equal to the lesser of two percent (2%) of the amount
of such payment or $100.00 (the "Late Charge"). Such 15 day period shall not be
construed in any way to extend the due date of any such payment.

6. Prepayment. The indebtedness evidenced by this Note may be prepaid in whole
or in part at any time without penalty or notice.

7. Other Loan Documents. This Note is issued in connection with a loan agreement
between the Borrower and the Bank dated January 18, 2002 (as amended from time
to time, including by Amendment No. 2 of even date herewith, being herein called
the "Loan Agreement"), and the other agreements and documents executed in
connection therewith or referred to therein, the terms of which are incorporated
herein by reference (as amended, modified or renewed from time to time,
collectively the "Loan Documents"), and is secured by the property described in
the Loan Documents (if any) and by such other collateral as previously may have
been or may in the future be granted to the Bank to secure this Note.

                                      -3-
<PAGE>

8. Events of Default. The occurrence of any of the following events will be
deemed to be an "Event of Default" under this Note: (i) the nonpayment of any
principal, interest or other indebtedness under this Note within two (2)
Business Days when due; (ii) the occurrence of any event of default or default
and the lapse of any notice or cure period under any Loan Document or any other
debt, liability or obligation to the Bank of any Obligor; (iii) the filing by or
against any Obligor of any proceeding in bankruptcy, receivership, insolvency,
reorganization, liquidation, conservatorship or similar proceeding (and, in the
case of any such proceeding instituted against any Obligor, such proceeding is
not dismissed or stayed within 60 days of the commencement thereof, provided
that the Bank shall not be obligated to advance additional funds during such
period); (iv) any assignment by any Obligor for the benefit of creditors, or any
levy, garnishment, attachment or similar proceeding is instituted against any
property of any Obligor held by or deposited with the Bank; (v) a default with
respect to any other indebtedness of any Obligor for borrowed money in excess of
$1,000,000 in the aggregate, if the effect of such default is to cause or permit
the acceleration of such debt; (vi) the commencement of any foreclosure or
forfeiture proceeding, execution or attachment against any collateral securing
the obligations of any Obligor to the Bank; (vii) the entry of a final judgment
or judgements in excess of $1,000,000 in the aggregate against any Obligor and
the failure of such Obligor to discharge the judgment within ten days of the
entry thereof; (viii) [intentionally omitted]; (ix) any material adverse change
in any Obligor's business, assets, operations, financial condition or results of
operations; (x) any Obligor ceases doing business as a going concern; (xi) the
revocation or attempted revocation, in whole or in part, of any guarantee by any
Guarantor; (xii) the death, incarceration, indictment or legal incompetency of
any individual Obligor or, if any Obligor is a partnership or limited liability
company, the death, incarceration, indictment or legal incompetency of any
individual general partner or member; (xiii) any representation or warranty made
by any Obligor to the Bank in any Loan Document, or any other documents now or
in the future evidencing or securing the obligations of any Obligor to the Bank,
is false, erroneous or misleading in any material respect; or (xiv) any
Obligor's failure to observe or perform any covenant or other agreement with the
Bank contained in any Loan Document or any other documents now or in the future
evidencing or securing the obligations of any Obligor to the Bank. As used
herein, the term "Obligor" means any Borrower and any Guarantor, and the term
"Guarantor" means any guarantor of the Borrower's obligations to the Bank
existing on the date of this Note or arising in the future.

Upon the occurrence of an Event of Default: (a) the Bank shall be under no
further obligation to make advances hereunder; (b) if an Event of Default
specified in clause (iii) or (iv) above shall occur, the outstanding principal
balance and accrued interest hereunder together with any additional amounts
payable hereunder shall be immediately due and payable without demand or notice
of any kind; (c) if any other Event of Default shall occur, the outstanding
principal balance and accrued interest hereunder together with any additional
amounts payable hereunder, at the Bank's option and without demand or notice of
any kind, may be accelerated and become immediately due and payable; (d) at the
Bank's option, this Note will bear interest at the Default Rate from the date of
the occurrence of the Event of Default; and (e) the Bank may exercise from time
to time any of the rights and remedies available under the Loan Documents or
under applicable law.

                                      -4-
<PAGE>

9. Right of Setoff. In addition to all liens upon and rights of setoff against
the Borrower's money, securities or other property given to the Bank by law, the
Bank shall have, with respect to the Borrower's obligations to the Bank under
this Note and to the extent permitted by law, a contractual possessory security
interest in and a contractual right of setoff against, and the Borrower hereby
assigns, conveys, delivers, pledges and transfers to the Bank all of the
Borrower's right, title and interest in and to, all of the Borrower's deposits,
moneys, securities and other property now or hereafter in the possession of or
on deposit with, or in transit to, the Bank, whether held in a general or
special account or deposit, whether held jointly with someone else, or whether
held for safekeeping or otherwise, excluding, however, all IRA, Keogh, and trust
accounts. Every such security interest and right of setoff may be exercised
without demand upon or notice to the Borrower. Every such right of setoff shall
be deemed to have been exercised immediately upon the occurrence of an Event of
Default hereunder without any action of the Bank, although the Bank may enter
such setoff on its books and records at a later time.

10. Miscellaneous. All notices, demands, requests, consents, approvals and other
communications required or permitted hereunder must be in writing (except as may
be agreed otherwise above with respect to borrowing requests) and will be
effective upon receipt. Such notices and other communications may be
hand-delivered, sent by facsimile transmission with confirmation of delivery and
a copy sent by first-class mail, or sent by nationally recognized overnight
courier service, to the addresses for the Bank and the Borrower set forth above
or to such other address as either may give to the other in writing for such
purpose. No delay or omission on the Bank's part to exercise any right or power
arising hereunder will impair any such right or power or be considered a waiver
of any such right or power, nor will the Bank's action or inaction impair any
such right or power. No modification, amendment or waiver of any provision of
this Note nor consent to any departure by the Borrower therefrom will be
effective unless made in a writing signed by the Bank. The Borrower agrees to
pay on demand, to the extent permitted by law, all costs and expenses incurred
by the Bank in the enforcement of its rights in this Note and in any security
therefor, including without limitation reasonable fees and expenses of the
Bank's counsel. If any provision of this Note is found to be invalid by a court,
all the other provisions of this Note will remain in full force and effect. The
Borrower and all other Borrowers and indorsers of this Note hereby forever waive
presentment, protest, notice of dishonor and notice of non-payment. The Borrower
also waives all defenses based on suretyship or impairment of collateral. If
this Note is executed by more than one Borrower, the obligations of such persons
or entities hereunder will be joint and several. This Note shall bind the
Borrower and its heirs, executors, administrators, successors and assigns, and
the benefits hereof shall inure to the benefit of the Bank and its successors
and assigns; provided, however, that the Borrower may not assign this Note in
whole or in part without the Bank's written consent and the Bank at any time may
assign this Note in whole or in part except that Bank may not assign it to any
entity or person which it knows or reasonably should know is a competitor or
Borrower.

                                      -5-
<PAGE>

This Note has been delivered to and accepted by the Bank and will be deemed to
be made in the State where the Bank's office indicated above is located. THIS
NOTE WILL BE INTERPRETED AND THE RIGHTS AND LIABILITIES OF THE BANK AND THE
BORROWER DETERMINED IN ACCORDANCE WITH THE LAWS OF THE STATE WHERE THE BANK'S
OFFICE INDICATED ABOVE IS LOCATED, EXCLUDING ITS CONFLICT OF LAWS RULES. The
Borrower hereby irrevocably consents to the exclusive jurisdiction of any state
or federal court in the county or judicial district where the Bank's office
indicated above is located; provided that nothing contained in this Note will
prevent the Bank from bringing any action, enforcing any award or judgment or
exercising any rights against the Borrower individually, against any security or
against any property of the Borrower within any other county, state or other
foreign or domestic jurisdiction. The Borrower acknowledges and agrees that the
venue provided above is the most convenient forum for both the Bank and the
Borrower. The Borrower waives any objection to venue and any objection based on
a more convenient forum in any action instituted under this Note.

11. WAIVER OF JURY TRIAL. THE BORROWER IRREVOCABLY WAIVES ANY AND ALL RIGHTS THE
BORROWER MAY HAVE TO A TRIAL BY JURY IN ANY ACTION, PROCEEDING OR CLAIM OF ANY
NATURE RELATING TO THIS NOTE, ANY DOCUMENTS EXECUTED IN CONNECTION WITH THIS
NOTE OR ANY TRANSACTION CONTEMPLATED IN ANY OF SUCH DOCUMENTS. THE BORROWER
ACKNOWLEDGES THAT THE FOREGOING WAIVER IS KNOWING AND VOLUNTARY.

The Borrower acknowledges that it has read and understood all the provisions of
this Note, including the waiver of jury trial, and has been advised by counsel
as necessary or appropriate.

         WITNESS the due execution hereof as a document under seal, as of the
date first written above, with the intent to be legally bound hereby.

WITNESS / ATTEST:                    AMERICAN BUSINESS FINANCIAL SERVICES, INC.

____________________________________        By:_________________________________
                                                                          (SEAL)
Print Name:___________________________      Print Name:_________________________

Title:________________________________      Title:______________________________

                                      -6-

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