Document:

EXHIBIT 4.14                CONVERTIBLE LOAN AGREEMENT

                            AMENDMENT AGREEMENT NO 1

AGREEMENT dated ________________August 2001 between:

1.    TRACER PETROLEUM CORPORATION, a corporation incorporated in Canada
      ("Tracer");

2.    ROC OIL COMPANY LIMITED (ACN 075 965 856), a company incorporated in New
      South Wales, Australia ("Roc"); and

3.    TEPCO LTD, a company incorporated in Bermuda ("Tepco").

RECITALS

A.    Tracer, Roc and Tepco are parties to the Convertible Loan Agreement dated
      22 May 2001 ("Convertible Loan Agreement").

B.    Tracer, Roc and Tepco have agreed to amend the Convertible Loan Agreement
      in the manner set out in this Agreement.

IT IS AGREED AS FOLLOWS.

1.    Interpretation

      In this Agreement, headings are for convenience only and shall not effect
      interpretation and terms defined in the Convertible Loan Agreement and
      used in this Agreement and shall have the same meaning as in the
      Convertible Loan Agreement.

2.    Amendments to Convertible Loan Agreement

      The Convertible Loan Agreement shall, with effect from the date of this
      Agreement, be amended in the following manner:

      (a)   Clause 1.1 - add the following definitions in Clause 1.1:

            ""Future Project" means a petroleum and/or natural gas exploration,
            development and/or production project in whatever form carried out
            including, without limitation, by way of production sharing
            contract, service contract, lease, licence, permit or other
            authorization but does not include:

            (i)   the Project;

            (ii)  Tracer's direct or indirect interest in Transmeridian
                  Exploration Inc ("TMIE");

            "Future Project Interest" means any direct or indirect interest in a
            Future Project including, without limitation, an interest:

            (i)   in a production sharing contract, service contract, lease,
                  licence, permit or other authorisation relating to the Future
                  Project;

                                       47
<PAGE>

            (ii)  in a joint operating agreement, joint venture agreement or
                  other incorporated or unincorporated joint venture that
                  carries out, or has an interest (including, without
                  limitation, an interest of the kind described in paragraph (a)
                  above) in the Future Project;

            (iii) (A)   in shares or other securities of a company or other body
                        corporate;

                  (B)   in units in a unit trust; or

                  (C)   in a partnership,

                  that carries out or has an interest (including, without
                  limitation, an interest of the kind described in paragraphs
                  (a) and/or (b)) in the Future Project or is the operator or
                  the manager of the Future Project;

            "Project" means the upstream petroleum exploration and development
            opportunity in the Islamic Republic of Iran known as the South Pars
            Oil Layer Project";

      (b)   Clause 2.1(b)(ii)(A) - in Clause 2.1(a)(ii)(A) delete "US$3,137,000"
            and substitute in lieu "US$3,507,510";

      (c)   Clause 2.1(b)(ii)(B) - in Clause 2.1(a)(ii)(B) delete "US$1,568,500"
            wherever appearing and substitute in lieu "US$1,753,755";

      (d)   Clause 2.2 - in Clause 2.2 delete the words "Tracer and TEPCO of an
            upstream petroleum exploration and development opportunity in the
            Islamic Republic of Iran ("Iran") known as the South Pars Oil Layer
            Project (the "Project")" and substitute in lieu:

            ":

            (a)   by Tracer and TEPCO of the Project;

            (b)   by Tracer and its Affiliates of Future Projects."

      (e)   Clause 2.3(a) - in Clause 2.3(a) delete "US$663,000" and substitute
            in lieu "US$292,490";

      (f)   Clause 2.3(c) - in Clause 2.3(c) delete "US$3,137,000" and
            substitute in lieu "US$3,507,510";

      (g)   Clause 2.4(a) - in Clause 2.4(a):

            (iii) delete "and July" in line 2 and substitute in lieu "July,
                  August, September and October"; and

            (iv)  delete "July 31, 2001" in line 3 and substitute in lieu
                  "October 31, 2001";

      (h)   Clause 2.8 - in Clause 2.8:

                                       48
<PAGE>

            (i)   in line 11 delete "interest in any future petroleum or natural
                  gas, exploration, development or production project or
                  business opportunity in Iran ("Future Project")" and
                  substitute in lieu "Future Project Interest";

            (ii)  add after the words "Future Project" wherever appearing the
                  word "Interest";

      (i)   Clause 2.9 - in Clause 2.9 delete "July 31, 2001" in line 3 and
            substitute in lieu "October 31, 2001";

      (j)   "Clause 2.12 - in Clause 2.12, add after "Project" in line 2 the
            words "and give details of all Future Projects that Tracer or Tracer
            Affiliates have pursued" and add after "Project in line 3 the words
            "and pursuing Future Projects"

      (k)   Clause 3.3(b) - in Clause 3.3(b) delete "US$3,137,000" and
            substitute in lieu "US$3,507,510";

      (l)   Clause 3.3(c) - in Clause 3.3(c) delete "US$3,137,000 and substitute
            in lieu "US$3,507,510";

      (m)   Clause 3.4 (b) - in Clause 3.4(b) delete "US$1,568,500" and
            substitute in lieu "US$1,753,755";

      (n)   Clause 3.4(c) - Clause 3.4(c) delete "US$1,568,500" and substitute
            in lieu "US$1,753,755";

      (o)   Clause 3.4(j) - in Clause 3.4(j) delete "US$1,568,500" and
            substitute in lieu "US$1,753,755"; and

      (p)   Schedule A - delete Schedule A and substitute in lieu the First Roc
            Loan Budget set out in Annexure A to this Agreement.

3.    Ratification

      Tracer, Roc and Tepco ratify and confirm the provisions of the Convertible
      Loan Agreement as amended by this Agreement.

4.    Counterparts

      This Agreement may be executed in counterpart. Once a counterpart executed
      by a party has been exchanged for a counterpart executed by each other
      party, this Agreement shall be deemed to be fully executed and effective
      from its date.

5.    Governing Law

      This Agreement and all matters arising under it shall be governed by and
      construed in accordance with the laws of the Province of Alberta and the
      laws of Canada applicable in that Province. Each party attorns and submits
      to the jurisdiction of the courts of the Province of Alberta for the
      determination of all matters arising under this Agreement.

                                       49
<PAGE>

Executed by Parties

TRACER PETROLEUM CORPORATION

Per:
    --------------------------------

Per:
    --------------------------------

ROC OIL COMPANY LIMITED

Per:
    --------------------------------

Per:
    --------------------------------

TEPCO LTD

Per:
    --------------------------------

Per:
    --------------------------------

                                       50
<PAGE>

                                   ANNEXURE A

                  NEW SCHEDULE A TO CONVERTIBLE LOAN AGREEMENT

                                       51EXHIBIT 10.1

                  CONSENT OF INDEPENDENT CHARTERED ACCOUNTANTS

We consent to the use of our report and accompanying "Comments by Auditor for
U.S. Readers on Canada - U.S. Reporting Difference" dated May 11, 2002 with
respect to the consolidated financial statements of Tracer Petroleum Corporation
in the 2001 Annual Report on Form 20-F of Tracer Petroleum Corporation.

                                            /s/ Ernst & Young LLP
Calgary, Canada
July 12, 2002                               Chartered Accountants

                                       52______________________________________

                                 AMENDMENT NO. 1
                            Dated as of June 25, 2002
                                       to
                         POOLING AND SERVICING AGREEMENT
                           Dated as of January 1, 2002
                                      among
                   BEAR STEARNS ASSET BACKED SECURITIES, INC.,
                                    Depositor
                            EMC MORTGAGE CORPORATION,
                               Seller and Company
                WELLS FARGO BANK MINNESOTA, NATIONAL ASSOCIATION,
                  Master Servicer and Securities Administrator
                                       and
                         BANK ONE, NATIONAL ASSOCIATION,
                                     Trustee

                     ______________________________________

               BEAR STEARNS ASSET BACKED SECURITIES TRUST 2002-AC1
                   ASSET-BACKED CERTIFICATES, SERIES 2002-AC1

                     ______________________________________

         THIS AMENDMENT NO. 1, dated as of June 25, 2002 (the "Amendment"), to
the Pooling and Servicing Agreement (the "Pooling and Servicing Agreement"),
dated as of January 1, 2002, among BEAR STEARNS ASSET BACKED SECURITIES, INC., a
Delaware corporation, as depositor (the "Depositor"), EMC MORTGAGE CORPORATION,
a Delaware corporation, as seller (the "Seller") and company (the "Company"),
WELLS FARGO BANK MINNESOTA, NATIONAL ASSOCIATION, a national banking
association, as master servicer (the "Master Servicer") and securities
administrator (the "Securities Administrator") and BANK ONE, NATIONAL
ASSOCIATION, a national banking association, as trustee (the "Trustee").

                               W I T N E S S E T H

         WHEREAS, the Depositor, the Seller, the Company, the Master Servicer,
the Securities Administrator and the Trustee entered into the Pooling and
Servicing Agreement;

         WHEREAS, the Depositor, the Seller, the Company, the Master Servicer,
the Securities Administrator and the Trustee desire to amend certain provisions
of the Pooling and Servicing Agreement to evidence that the servicing rights
with respect to certain of the Mortgage Loans and the Class XP Certificate has
been sold to CitiMortgage, Inc.

         WHEREAS, Section 12.01 of the Pooling and Servicing Agreement provides
that the Pooling

                                        1

<PAGE>

and Servicing Agreement may be amended by the Depositor, the Seller, the
Company, the Master Servicer, the Securities Administrator and the Trustee
without the consent of any of the Certificateholders to correct or supplement
any provisions contained in the Pooling and Servicing Agreement;

         NOW, THEREFORE, the parties hereto agree as follows:

         SECTION 1. Defined Terms.

         For purposes of this Amendment, unless the context clearly requires
otherwise, all capitalized terms which are used but not otherwise defined herein
shall have the respective meanings assigned to such terms in the Pooling and
Servicing Agreement.

         SECTION 2. The Amendments.

         (a)      Section 1.01 of the Pooling and Servicing Agreement is hereby
amended as follows:

                  (i) The following definitions are hereby added to Section 1.01
of the Pooling and Servicing Agreement:

                  COMPANY: Shall mean either (i) with respect to any EMC
                  Mortgage Loans for which the servicing rights related thereto
                  were sold by the Seller to CitiMortgage, Inc. pursuant to the
                  Purchase Agreement, CitiMortgage, Inc. and (ii) with respect
                  to any other EMC Mortgage Loan (including, without limitation,
                  EMC Mortgage Loans for which the servicing rights are required
                  to be repurchased or transferred pursuant to the Purchase
                  Agreement), EMC Mortgage Corporation.

                  INDEMNIFIED PERSONS: The Trustee, the Master Servicer, the
                  Company and the Securities Administrator and their officers,
                  directors, agents and employees and, with respect to the
                  Trustee, any separate co-trustee and its officers, directors,
                  agents and employees.

                  LENDER PAID MORTGAGE INSURANCE POLICY or LPMI POLICY: A policy
                  of mortgage guaranty insurance issued by an insurer meeting
                  the requirements of Fannie Mae and Freddie Mac in which the
                  servicer of the related Mortgage Loan is responsible for the
                  payment of the LPMI Fee thereunder from amounts collected on
                  the related Mortgage Loan.

                  LPMI FEE: Shall mean the fee payable to the insurer for each
                  Mortgage Loan subject to a LPMI Policy as set forth in such
                  LPMI Policy.

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

                                       -2-

<PAGE>

                  MERS(R) SYSTEM: The system of recording transfers of Mortgages
                  electronically maintained by MERS.

                  MIN: The Mortgage Identification Number for Mortgage Loans
                  registered with MERS on the MERS(R)System.

                  MOM LOAN: With respect to any Mortgage Loan, MERS acting as
                  the mortgagee of such Mortgage Loan, solely as nominee for the
                  originator of such Mortgage Loan and its successors and
                  assigns, at the origination thereof.

                  PURCHASE AGREEMENT: Shall meant the Mortgage Servicing
                  Purchase and Sale Agreement, dated as of March 31, 2002, among
                  Bear, Stearns & Co., Inc., EMC Mortgage Corporation and
                  CitiMortgage, Inc.

                  (ii) The definition of "Certificate Notional Balance" is
hereby deleted in its entirety and replaced with the following:

                  "CERTIFICATE NOTIONAL BALANCE: As to any Class X-1 Certificate
and any Distribution Date, the aggregate Stated Principal Balance of the
Mortgage Loans in Loan Group I. As to any Class X-2 Certificate and any
Distribution Date, the aggregate Stated Principal Balance of the Mortgage Loans
in Loan Group II. As to any Class X-3 Certificate and any Distribution Date, the
aggregate Certificate Principal Balance of the Subordinated Certificates,
provided, however, for federal income tax purposes, the equivalent of the
foregoing, stated as the Uncertificated Principal Balance of REMIC I Regular
Interest LTI-B."

                  (iii) The definition of "Class X-1 Pass-Through Rate" is
hereby deleted in its entirety and replaced with the following:

                  "CLASS X-1 PASS-THROUGH RATE: On any Distribution Date, the
weighted average of the excess of (a) the Net Mortgage Rate on each Non-Discount
Mortgage Loan in Loan Group I over (b) 8.00% per annum. For federal income tax
purposes, however, the Class X-1 Certificates will not have a Class X-1
Pass-Through Rate, and the Accrued Certificate Interest for the Class X-1
Certificates and any Distribution Date will be deemed to be 100% of the amount
distributed on REMIC I Regular Interest LTI-XI for such Distribution Date."

                  (iv) The definition of "Class X-2 Pass-Through Rate" is hereby
deleted in its entirety and replaced with the following:

                  "CLASS X-2 PASS-THROUGH RATE: On any Distribution Date, the
weighted average of the excess of (a) the Net Mortgage Rate on each Non-Discount
Mortgage Loan in Loan Group II over (b) 8.00% per annum. For federal income tax
purposes, however, the Class X-2 Certificates will not have a Class X-2
Pass-Through Rate, and the Accrued Certificate Interest for the Class X-2
Certificates and any Distribution Date will be deemed to be 100% of the amount
distributed on

                                       -3-

<PAGE>

REMIC I Regular Interest LTI-XII for such Distribution Date."

                  (v) The definition of "EMC Loans" is hereby deleted in its
entirety and replaced with the following:

                  "EMC MORTGAGE LOANS: Shall mean those Mortgage Loans serviced
                  by the Company pursuant to the terms of this Agreement."

                  (vi) The definition of "Insurance Policy" is hereby amended by
adding the words "or LPMI Policy" after the word "policy" in the second line
thereof.

                  (vii) Clause (i)(a) of the definition of "Interest Funds" is
hereby amended by adding the words "and the LPMI Fee, if any" before the comma
at the end thereof.

                  (viii) The definition of "Net Mortgage Rate" is hereby deleted
in its entirety and replaced with the following:

                  "NET MORTGAGE RATE: As to each Mortgage Loan, and at any time,
                  the per annum rate equal to the Mortgage Rate less the sum of
                  (i) the related Servicing Fee Rate, (ii) the Master Servicing
                  Fee Rate and (iii) the rate at which the LPMI Fee is
                  calculated."

                  (ix) The definition of "Prepayment Interest Shortfall" is
hereby deleted in its entirety and replaced with the following:

                  "PREPAYMENT INTEREST SHORTFALL: With respect to any
                  Distribution Date, for each Mortgage Loan that was the subject
                  of a partial Principal Prepayment, a Principal Prepayment in
                  full, or that became a Liquidated Loan during the related
                  Prepayment Period, (other than a Principal Prepayment in full
                  resulting from the purchase of a Mortgage Loan pursuant to
                  Section 2.02, 2.03, 4.21 or 11.01 hereof), the amount, if any,
                  by which (i) one month's interest at the Mortgage Rate (net of
                  the related Servicing Fee and the LPMI Fee, if any) on the
                  Stated Principal Balance of such Mortgage Loan immediately
                  prior to such prepayment (or liquidation) or in the case of a
                  partial Principal Prepayment on the amount of such prepayment
                  (or liquidation proceeds) exceeds (ii) the amount of interest
                  paid or collected in connection with such Principal Prepayment
                  or such liquidation proceeds less the sum of (a) any
                  Prepayment Charges, (b) the related Servicing Fee and (c) the
                  LPMI Fee, if any."

                  (x) Clause (ii) of the definition of "Servicing Advances" is
hereby amended by adding the following at the end thereof:

                  "and including any expenses incurred in relation to any such
                  proceedings that result from the Mortgage Loan being
                  registered in the MERS(R) System"

                  (xi) Clause (iv) of the definition of "Servicing Advances" is
hereby amended by

                                       -4-

<PAGE>

substituting the words "Sections 3.05 and 3.07" for the words "Section 3.09" in
the second the last line thereof.

         (b) Clause (ii) of the fourth paragraph of Section 2.01 of the Pooling
and Servicing Agreement is hereby deleted in its entirety and replaced with the
following:

                  "(ii) the original Mortgage and, if the related Mortgage Loan
                  is a MOM Loan, noting the presence of the MIN and language
                  indicating that such Mortgage Loan is a MOM Loan, which shall
                  have been recorded (or if the original is not available, a
                  copy), with evidence of such recording indicated thereon (or
                  if clause (x) in the proviso below applies, shall be in
                  recordable form),"

         (c) Clause (iii) of the fourth paragraph of Section 2.01 of the Pooling
and Servicing Agreement is hereby amended by adding "unless the Mortgage Loan is
a MOM Loan," at the beginning thereof.

         (d) The proviso contained in the fourth paragraph of Section 2.01 of
the Pooling and Servicing Agreement is hereby deleted in its entirety and
replaced with the following:

                  ; provided that the Seller need not cause to be recorded any
                  assignment if MERS is identified on the Mortgage or on a
                  properly recorded assignment of the Mortgage as the mortgagee
                  of record solely as nominee for Seller and its successor and
                  assigns."

         (e) Section 2.01 of the Pooling and Servicing Agreement is hereby
amended by adding the following paragraph to the end thereof:

                  "In connection with the assignment of any Mortgage Loan
                  registered on the MERS(R) System, the Seller further agrees
                  that it will cause, at the Seller's own expense, on or before
                  the Transfer Date (as defined in the Purchase Agreement, the
                  MERS(R) System to indicate that such Mortgage Loans have been
                  assigned by the Seller to the Depositor and by the Depositor
                  to the Trustee in accordance with this Agreement for the
                  benefit of the Certificateholders by including (or deleting,
                  in the case of Mortgage Loans which are repurchased in
                  accordance with this Agreement) in such computer files (a) the
                  code in the field which identifies the specific Trustee and
                  (b) the code in the field "Pool Field" which identifies the
                  series of the Certificates issued in connection with such
                  Mortgage Loans. The Seller further agrees that it will not,
                  and will not permit any Subservicer or the Master Servicer to,
                  and the Master Servicer agrees that it will not, alter the
                  codes referenced in this paragraph with respect to any
                  Mortgage Loan during the term of this Agreement unless and
                  until such Mortgage Loan is repurchased in accordance with the
                  terms of this Agreement. With respect to any EMC Mortgage Loan
                  serviced by CitiMortgage, Inc. pursuant to the terms hereof,
                  the Seller shall notify MERS that CitiMortgage, Inc. is to be
                  added as servicer of record with respect thereto."

                                       -5-

<PAGE>

         (f) Section 2.03(b)(vii)(MM) of the Pooling and Servicing Agreement is
hereby amended by adding the words "from the date of origination of such
Mortgage Loan" to the end thereof.

         (g) Section 2.03(b)(vii) of the Pooling and Servicing Agreement is
hereby amended by adding the following additional clauses to the end thereof:

                  "(NN) To the best of the Seller's knowledge, the subservicer
         for each Mortgage Loan in Loan Group I has accurately and fully
         reported its borrower credit files to each of the credit repositories
         in a timely manner.

                  (OO) None of the proceeds of any Mortgage Loan in Loan Group I
         were used to finance the purchase of single premium credit insurance
         policies."

         (h) The second paragraph of clause (c) of Section 2.03 of the Pooling
and Servicing Agreement is hereby amended by adding the following to the end
thereof:

                  "; provided, however, that this paragraph shall not apply to
CitiMortgage, Inc. in its capacity as Company if CitiMortgage, Inc. is the
Holder of the Class XP Certificate."

         (i) The last sentence of the first paragraph of Section 3.01 of the
Pooling and Servicing Agreement is hereby amended by adding the following to the
end thereof:

                  "; provided, however, that this sentence shall not apply to
CitiMortgage, Inc. in its capacity as Company if CitiMortgage, Inc. is the
Holder of the Class XP Certificate."

         (j) The last paragraph of Section 5.01(b) of the Pooling and Servicing
Agreement shall be amended by adding the following after the first sentence
thereof:

                  "In addition, notwithstanding clause (i) above, for so long as
                  CitiMortgage, Inc. is the Holder of the Class XP Certificate,
                  it shall be entitled to retain any Prepayment Charges
                  collected on the Mortgage Loans which it is servicing pursuant
                  hereto in its capacity as Company."

         (k) Clause (b)(ii) of Section 5.01 of the Pooling and Servicing
Agreement is hereby deleted in its entirety and replaced with the following:

                  "(ii) all payments on account of interest on the EMC Mortgage
                  Loans, net of the related Servicing Fee Rate, any Prepayment
                  Charges and the LPMI Fee, if any;"

         (l) The last sentence of the second to last paragraph of Section 5.02
of the Pooling and Servicing Agreement is hereby amended by adding the following
to the end thereof:

                  "; provided, however, that this sentence shall not apply to
CitiMortgage, Inc. in its capacity as Company if CitiMortgage, Inc. is the
Holder of the Class XP Certificate."

                                       -6-

<PAGE>

         (m) Clause (c)(i) of Section 5.04 of the Pooling and Servicing
Agreement is hereby deleted in its entirety and replaced with the following:

                  "(ii) Scheduled Payments on the Mortgage Loans received or any
                  related portion thereof advanced by the Company or the
                  Servicers pursuant to the Servicing Agreements which were due
                  on or before the related Due Date, net of the amount thereof
                  comprising the Servicing Fees and the LPMI Fees, if any;"

         (n) Clause (c)(ii) of Section 5.04 of the Pooling and Servicing
Agreement is hereby deleted in its entirety and replaced with the following:

                  "(ii) Full Principal Prepayments and any Liquidation Proceeds
received by the Company or the Servicers with respect to such Mortgage Loans in
the related Prepayment Period, with interest to the date of prepayment or
liquidation, net of the amount thereof comprising the Servicing Fees and the
LPMI Fees, if any;"

         (o) Article XI of the Pooling and Servicing is hereby amended to
replace references therein to "the Company" to "EMC".

         SECTION 3. Tax Reporting.

         CitiMortgage, Inc., by its agreement and acknowledgment hereof, hereby
agrees to report, on an annual basis, the amount of Prepayment Charges collected
and retained by CitiMortgage with respect to the EMC Mortgage Loans which
obligation will continue for so long as CitiMortgage is the holder of the Class
XP Certificate.

         SECTION 4. CitiMortgage, Inc. bound by Pooling and Servicing Agreement.

         CitiMortgage, Inc., by its agreement and acknowledgment hereof, hereby
agrees to service and administer the EMC Mortgage Loans serviced by it pursuant
to the terms and conditions of the Pooling and Servicing Agreement as amended
pursuant to the terms hereof and agrees to be bound as "Company" by the
provisions of the Pooling and Servicing Agreement, as amended pursuant to the
terms hereof, as if it were originally named Company thereunder.

         SECTION 5. Fair Credit Reporting Act.

         Each of EMC Mortgage Corporation and CitiMortgage, Inc., by its
execution of this Amendment, hereby covenants to furnish, on a monthly basis, in
accordance with the Fair Credit Reporting Act and its implementing regulations,
accurate and complete borrower credit files to Equifax, Experian and the
TransUnion Credit Information Company with respect to each EMC Mortgage Loan
subject to the Pooling and Servicing Agreement.

                                       -7-

<PAGE>

         SECTION 6. Effect of Amendment.

         Upon execution of this Amendment, the Pooling and Servicing Agreement
shall be, and be deemed to be, modified and amended in accordance herewith and
the respective rights, limitations, obligations, duties, liabilities and
immunities of the Seller, the Company, the Master Servicer, the Depositor, the
Trustee and the Securities Administrator shall hereafter be determined,
exercised and enforced subject in all respects to such modifications and
amendments, and all the terms and conditions of this Amendment shall be deemed
to be part of the terms and conditions of the Pooling and Servicing Agreement
for any and all purposes. Except as modified and expressly amended by this
Amendment, the Pooling and Servicing Agreement is in all respects ratified and
confirmed, and all the terms, provisions and conditions thereof shall be and
remain in full force and effect.

         SECTION 7. Binding Effect.

         The provisions of this Amendment shall be binding upon and inure to the
benefit of the respective successors and assigns of the parties hereto, and all
such provisions shall inure to the benefit of the Seller, the Company, the
Master Servicer, the Depositor, the Trustee and the Securities Administrator.

         SECTION 8. Governing Law.

         This Amendment shall be construed in accordance with the substantive
laws of the State of New York (without regard to conflict of law principles) and
the obligations, rights and remedies of the parties hereto shall be determined
in accordance with such laws.

         SECTION 9. Severability of Provisions.

         If any one or more of the provisions or terms of this Amendment shall
be for any reason whatsoever held invalid, then such provisions or terms shall
be deemed severable from the remaining provisions or terms of this Amendment and
shall in no way affect the validity or enforceability of the other provisions or
terms of this Amendment.

         SECTION 10. Section Headings.

         The section headings herein are for convenience of reference only, and
shall not limit or otherwise affect the meaning hereof.

         SECTION 11. Counterparts.

         This Amendment may be executed in several counterparts, each of which
shall be an original and all of which shall constitute but one and the same
instrument.

                            [signature pages follow]

                                       -8-

<PAGE>

         IN WITNESS WHEREOF, the Depositor, the Company, the Seller, the Master
Servicer, the Trustee and the Securities Administrator have caused their names
to be signed hereto by their respective officers thereunto duly authorized as of
the day and year first above written.

                                               BEAR STEARNS ASSET BACKED
                                               SECURITIES, INC.,
                                                        as Depositor

                                               By:/s/: Matthew Perkins
                                               Name: Mathew Perkins
                                               Title: Vice President

                                               EMC MORTGAGE CORPORATION,
                                                        as Seller and Company

                                               By: /s/:Ralene Ruyle
                                               Name: Ralene Ruyle
                                               Title: President

                                               WELLS FARGO BANK MINNESOTA,
                                               NATIONAL ASSOCIATION
                                                        as Master Servicer and
                                                        Securities Administrator

                                               By:/s/: Brett Handelman
                                               Name: Brett Handelman
                                               Title: Vice President

                                               BANK ONE, NATIONAL ASSOCIATION
                                                        as Trustee

                                               By: /s/: Sandra  Whelen
                                               Name: Sandra  Whelen
                                               Title: Vice President
ACKNOWLEDGED AND AGREED:

CITIMORTGAGE, INC.

By: /s/: Bradley J. Brunts
Name: Bradley J. Brunts
Title: Senior Vice President

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