Document:

<PAGE>
                                                                     EXHIBIT 4.2

                   BEAR STEARNS ASSET BACKED SECURITIES, INC.
                                   Depositor,

                               ABFS 2001-2, INC.,
                               Unaffiliated Seller

                                       and

                         AMERICAN BUSINESS CREDIT, INC.
              HOMEAMERICAN CREDIT, INC., D/B/A UPLAND MORTGAGE, and
                    AMERICAN BUSINESS MORTGAGE SERVICES, INC.
                                   Originators

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

                         UNAFFILIATED SELLER'S AGREEMENT

                            Dated as of June 1, 2001

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                                TABLE OF CONTENTS

<TABLE>
<CAPTION>
                                                                                                               Page

                                    ARTICLE I
                                   DEFINITIONS
<S>              <C>                                                                                            <C>
Section 1.01.     Definitions.................................................................................... 1

                                   ARTICLE II
                  PURCHASE, SALE AND CONVEYANCE OF MORTGAGE LOANS

Section 2.01.     Agreement to Purchase the Mortgage Loans....................................................... 4
Section 2.02.     [Reserved]..................................................................................... 4
Section 2.03.     Purchase Price................................................................................. 4
Section 2.04.     Conveyance of Mortgage Loans; Possession of Mortgage Files..................................... 5
Section 2.05.     Delivery of Mortgage Loan Documents............................................................ 6
Section 2.06.     Acceptance of Mortgage Loans................................................................... 7
Section 2.07.     Sale of Mortgage Loans; Assignment of Agreement................................................ 8
Section 2.08.     Examination of Mortgage Files.................................................................. 8
Section 2.09.     Books and Records.............................................................................. 9
Section 2.10.     Cost of Delivery and Recordation of Documents.................................................. 9

                                   ARTICLE III
                         REPRESENTATIONS AND WARRANTIES

Section 3.01.     Representations and Warranties as to the Originators........................................... 9
Section 3.02.     Representations and Warranties as to the Unaffiliated Seller...................................11
Section 3.03.     Representations and Warranties Relating to the Mortgage Loans..................................13
Section 3.04.     Representations and Warranties of the Depositor................................................20
Section 3.05.     Repurchase Obligation for Defective Documentation and for Breach of a Representation
                      or Warranty................................................................................21
Section 3.06.     Limited Purpose and Corporate Separateness of the Unaffiliated Seller..........................24

                                   ARTICLE IV
                             THE UNAFFILIATED SELLER

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

                                    ARTICLE V
                              CONDITIONS OF CLOSING

Section 5.01.     Conditions of Depositor's Obligations..........................................................27

                                        i

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Section 5.02.     Conditions of Unaffiliated Seller's Obligations................................................29
Section 5.03.     Termination of Depositor's Obligations.........................................................29

                                   ARTICLE VI
                                  MISCELLANEOUS

Section 6.01.     Notices........................................................................................30
Section 6.02.     Severability of Provisions.....................................................................30
Section 6.03.     Agreement of Unaffiliated Seller...............................................................30
Section 6.04.     Survival.......................................................................................30
Section 6.05.     Effect of Headings and Table of Contents.......................................................30
Section 6.06.     Successors and Assigns.........................................................................30
Section 6.07.     Confirmation of Intent; Grant of Security Interest.............................................30
Section 6.08.     Miscellaneous..................................................................................31
Section 6.09.     Amendments.....................................................................................31
Section 6.10.     Third-Party Beneficiaries......................................................................32
Section 6.11.     GOVERNING LAW; CONSENT TO JURISDICTION; WAIVER OF JURY TRIAL...................................32
Section 6.12.     Execution in Counterparts......................................................................33

Exhibit A - Mortgage Loan Schedule
</TABLE>

                                       ii

<PAGE>

                  THIS UNAFFILIATED SELLER'S AGREEMENT, dated as of June 1,
2001, by and among BEAR STEARNS ASSET BACKED SECURITIES, INC., a Delaware
corporation, its successors and assigns (the "Depositor"), ABFS 2001-2, INC., a
Delaware corporation and its successors (the "Unaffiliated Seller"), AMERICAN
BUSINESS CREDIT, INC., a Pennsylvania corporation ("ABC"), HOMEAMERICAN CREDIT,
INC. D/B/A UPLAND MORTGAGE, a Pennsylvania corporation ("Upland") and AMERICAN
BUSINESS MORTGAGE SERVICES, INC., a New Jersey corporation ("ABMS", and together
with ABC and Upland, the "Originators").

                  WHEREAS, Exhibit A attached hereto and made a part hereof
lists certain fixed rate business purpose and consumer purpose first and second
lien mortgage loans (the "Mortgage Loans") owned by the Originators that the
Originators desire to sell to the Unaffiliated Seller and the Unaffiliated
Seller desires to sell to the Depositor and that the Depositor desires to
purchase; and

                  WHEREAS, it is the intention of the Originators, the
Unaffiliated Seller and the Depositor that simultaneously with the Originators'
conveyance of the Mortgage Loans to the Unaffiliated Seller and the Unaffiliated
Seller's conveyance of the Mortgage Loans to the Depositor on the Closing Date,
(a) the Depositor shall sell the Mortgage Loans to a trust pursuant to a Pooling
and Servicing Agreement to be dated as of June 1, 2001 (the "Pooling and
Servicing Agreement"), to be entered into by and among the Depositor, as
depositor, American Business Credit, Inc., as servicer (in such capacity, the
"Servicer") and The Chase Manhattan Bank, as trustee and collateral agent (in
each such capacity, as applicable, the "Trustee" and the "Collateral Agent") and
(b) the Trust shall issue certificates evidencing beneficial ownership interests
in the property of the trust fund formed by the Pooling and Servicing Agreement
to the Depositor;

                  NOW, THEREFORE, in consideration of the premises and the
mutual agreements hereinafter set forth, the parties hereto agree as follows:

                                    ARTICLE I

                                   DEFINITIONS

                  Section 1.01. Definitions. Whenever used herein, the following
words and phrases, unless the context otherwise requires, shall have the
meanings specified in this Article I:

                  "Accepted Servicing Practices" means the Servicer's normal
servicing practices including practices regarding reconciliation of bank
accounts, processing of mortgage payments, processing of disbursements for tax
and insurance payments, maintenance of mortgage loan records, performance of
collection efforts including disposition of delinquent loans, foreclosure
activities and disposition of real estate owned and performance of investor
accounting and reporting processes. Such services in general will conform to the
mortgage servicing practices of prudent mortgage lending institutions which
service, for their own account, mortgage loans of the same type as the Mortgage
Loans in the jurisdiction in which the related Mortgaged Properties are located,
which may change from time to time; provided, that such policies shall at all
times conform to the Credit and Servicing Policy Manuals.

                  "Agreement" means this Unaffiliated Seller's Agreement, as
amended or supplemented in accordance with the provisions hereof.

                  "Appraised Value" means the appraised value of the Mortgaged
Property based upon the appraisal made by or on behalf of the Originators.

<PAGE>

                  "Certificate Insurer" means MBIA Insurance Corporation, a New
York stock insurance company.

                  "Closing Date" shall have the meaning ascribed thereto in
Section 2.01(c).

                  "Commission" means the Securities and Exchange Commission.

                  "Cut-Off Date" means, with respect to the Mortgage Loans, the
close of business on May 31, 2001 or, with respect to Mortgage Loans originated
after May 31, 2001, the date of origination of such Mortgage Loans.

                  "Cut-Off Date Aggregate Principal Balance" means the aggregate
unpaid principal balance of the Mortgage Loans as of the Cut-Off Date (or, with
respect to Mortgage Loans which were originated after the Cut-Off Date, as of
the date of origination). The Cut-Off Date Aggregate Principal Balance is
$355,000,168.03. The Cut-Off Date Aggregate Principal Balance for Mortgage Loan
Group I and Mortgage Loan Group II is $275,000,112.66 and $80,000,055.37,
respectively.

                  "Cut-Off Date Principal Balance" means as to each Mortgage
Loan, its unpaid principal balance as of the Cut-Off Date (or, with respect to
Mortgage Loans which were originated after the Cut-Off Date, as of the date of
origination).

                  "Deleted Mortgage Loan" means a Mortgage Loan replaced by or
to be replaced by a Qualified Substitute Mortgage Loan pursuant to the terms of
the Pooling and Servicing Agreement.

                  "Exchange Act" means the Securities Exchange Act of 1934, as
amended.

                  "Monthly Payment" means, as to any Mortgage Loan (including
any REO Mortgage Loan) and any Due Date, the payment of principal and interest
due thereon in accordance with the amortization schedule at the time applicable
thereto (after adjustment for any Curtailments and Deficient Valuations
occurring prior to such Due Date but before any adjustment to such amortization
schedule by reason of any bankruptcy, other than Deficient Valuations or similar
proceeding or any moratorium or similar waiver or grace period).

                  "Mortgage" means the mortgage or deed of trust creating a
first or second lien on an estate in fee simple in real property, and securing a
Mortgage Note, as amended or modified.

                  "Mortgage Interest Rate" means, as to any Mortgage Loan, the
fixed per annum rate at which interest accrues on the unpaid principal balance
thereof as set forth in the related Mortgage Note.

                  "Mortgage Loan Group I" means a pool of mortgages held in a
trust created pursuant to the Pooling and Servicing Agreement. The Class A-1
Certificates represent undivided ownership interests in the Mortgage Loan Group
I.

                  "Mortgage Loan Group II" means a pool of mortgages held in a
trust created pursuant to the Pooling and Servicing Agreement. The Class A-2,
A-3 and A-4 Certificates represent undivided ownership interests in Mortgage
Loan Group II.

                   "Mortgage Loans" means such of the mortgage loans to be sold,
transferred and assigned, or caused to be sold, transferred and assigned, to the
Depositor on the Closing Date pursuant to Article II hereof (including the
related Mortgage Notes and related Mortgages), all as identified in the

                                       2
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Mortgage Loan Schedule, and including any mortgage loan substituting or
replacing a Mortgage Loan pursuant to the terms of the Pooling and Servicing
Agreement.

                  "Mortgage Loan Schedule" shall have the meaning ascribed
thereto in Section 2.01(b).

                  "Mortgage Note" means the note or other evidence of
indebtedness evidencing the indebtedness of a Mortgagor under a Mortgage Loan,
as amended or modified.

                  "Mortgaged Property" means the property subject to a Mortgage.

                  "Mortgagor" means the obligor on a Mortgage Note.

                  "Pooling and Servicing Agreement" shall have the meaning
ascribed thereto in the recitals hereof.

                  "Prospectus" means the Prospectus dated June 8, 2001 relating
to the offering by the Depositor from time to time of its Mortgage-Backed
Certificates (Issuable in Series) in the form in which it was or will be filed
with the Commission pursuant to Rule 424(b) under the Securities Act with
respect to the offer and sale of the Certificates.

                  "Prospectus Supplement" means the Prospectus Supplement dated
June 8, 2001, relating to the offering of the Certificates in the form in which
it was or will be filed with the Commission pursuant to Rule 424(b) under the
Securities Act with respect to the offer and sale of the Certificates.

                  "Qualified Appraiser" means an appraiser, duly appointed by
the Unaffiliated Seller, who had no interest, direct or indirect, in the
Mortgaged Property or in any loan made on the security thereof, and whose
compensation is not affected by the approval or disapproval of the Mortgage
Loan, and such appraiser and the appraisal made by such appraiser both satisfy
the requirements of Title XI of the Federal Institutions Reform, Recovery and
Enforcement Act of 1989 and the regulations promulgated thereunder, all as in
effect on the date the Mortgage Loan was originated.

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

                  "Securities Act" means the Securities Act of 1933, as amended.

                  "Termination Event" means the existence of any one or more of
the following conditions:

                           (a) a stop order suspending the effectiveness of the
         Registration Statement shall have been issued or a proceeding for that
         purpose shall have been initiated or threatened by the Commission; or

                           (b) subsequent to the execution and delivery of this
         Agreement, a downgrading, or public notification of a possible change,
         without indication of direction, shall have occurred in the rating
         afforded any of the debt securities or claims paying ability of any
         person providing any form of credit enhancement for any of the
         Certificates, by any "nationally recognized statistical rating
         organization," as that term is defined by the Commission for purposes
         of Rule 436(g)(2) under the Securities Act; or

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                           (c) subsequent to the execution and delivery of this
         Agreement, there shall have occurred an adverse change in the
         condition, financial or otherwise, earnings, affairs, regulatory
         situation or business prospects of the Certificate Insurer or the
         Unaffiliated Seller reasonably determined by the Depositor to be
         material; or

                           (d) subsequent to the date of this Agreement there
         shall have occurred any of the following: (i) a suspension or material
         limitation in trading in securities substantially similar to the
         Certificates; (ii) a general moratorium on commercial banking
         activities in the State of New York declared by either Federal or New
         York State authorities; or (iii) the engagement by the United States in
         hostilities, or the escalation of such hostilities, or any calamity or
         crisis, if the effect of any such event specified in this clause (iii)
         in the judgment of the Depositor makes it impracticable or inadvisable
         to proceed with the public offering or the delivery of the Certificates
         on the terms and in the manner contemplated in the Prospectus
         Supplement.

                  "Unaffiliated Seller" means ABFS 2001-2, Inc., in its capacity
as Unaffiliated Seller of the Mortgage Loans under this Agreement.

                  Capitalized terms used herein that are not otherwise defined
shall have the respective meanings ascribed thereto in the Pooling and Servicing
Agreement.

                                   ARTICLE II

                 PURCHASE, SALE AND CONVEYANCE OF MORTGAGE LOANS

                  Section 2.01. Agreement to Purchase the Mortgage Loans.

                  (a) Subject to the terms and conditions of this Agreement, the
Originators agree to sell, and the Unaffiliated Seller agrees to purchase on the
Closing Date and immediately subsequent thereto, the Unaffiliated Seller agrees
to sell, and the Depositor agrees to purchase, the Mortgage Loans having the
Cut-Off Date Aggregate Principal Balance or, in accordance with Section 2.08
hereof, such other balance as is evidenced by the actual Cut-Off Date Aggregate
Principal Balance of the Mortgage Loans accepted by the Depositor on the Closing
Date and listed in the Mortgage Loan Schedule.

                  (b) Subject to Section 2.08 hereof, the Depositor and the
Unaffiliated Seller have agreed upon which of the Unaffiliated Seller's Mortgage
Loans are to be purchased by the Depositor on the Closing Date pursuant to this
Agreement, and the Unaffiliated Seller has prepared a schedule describing the
Mortgage Loans (the "Mortgage Loan Schedule") setting forth all of the Mortgage
Loans to be purchased under this Agreement, which schedule is attached hereto as
Exhibit A. The Mortgage Loan Schedule shall conform to the requirements of the
Depositor and to the definition of "Mortgage Loan Schedule" under the Pooling
and Servicing Agreement.

                  (c) The closing for the purchase and sale of the Mortgage
Loans shall take place at the offices of Dewey Ballantine LLP, New York, New
York, at 10:00 a.m., New York time, on June 28, 2001 or such other place and
time as the parties shall agree (such time being herein referred to as the
"Closing Date").

                  Section 2.02. [Reserved].

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<PAGE>

                  Section 2.03. Purchase Price.

                  (a) On the Closing Date, as consideration for the Originators'
sale of the Mortgage Loans to the Unaffiliated Seller, the Unaffiliated Seller
will deliver to the Originators an amount in cash equal to the sum of (A)
100.02580% of the aggregate principal balance as of the Closing Date of the
Class A-1 Certificates and (B) accrued interest on such principal balance at the
rate of 6.34% per annum, on the Class A-1 Certificates from (and including) June
1, 2001 to (but not including) June 28, 2001, payable by wire transfer of same
day funds.

                  On the Closing Date, as consideration for the Unaffiliated
Seller's sale of the Mortgage Loans to the Depositor, the Depositor will deliver
to the Unaffiliated Seller (i) an amount in cash equal to the sum of (A)
100.02580% of the aggregate principal balance as of the Closing Date of the
Class A-1 Certificates and (B) accrued interest on such principal balance at the
rate of 6.34% per annum, on the Class A-1 Certificates from (and including) June
1, 2001 to (but not including) June 28, 2001, payable by wire transfer of same
day funds and (ii) the Class X and Class R Certificates to be issued pursuant to
the Pooling and Servicing Agreement.

                  (b) On the Closing Date, as consideration for the Originators'
sale of the Mortgage Loans to the Unaffiliated Seller, the Unaffiliated Seller
will deliver to the Originators an amount in cash equal to the sum of (A)
100.00000% of the aggregate principal balance as of the Closing Date of the
Class A-2 Certificates payable by wire transfer of same day funds.

                  On the Closing Date, as consideration for the Unaffiliated
Seller's sale of the Mortgage Loans to the Depositor, the Depositor will deliver
to the Unaffiliated Seller (i) an amount in cash equal to 100.00000% of the
aggregate principal balance as of the Closing Date of the Class A-2 Certificates
payable by wire transfer of same day funds and (ii) the Class X and Class R
Certificates to be issued pursuant to the Pooling and Servicing Agreement.

                  (c) On the Closing Date, as consideration for the Originators'
sale of the Mortgage Loans to the Unaffiliated Seller, the Unaffiliated Seller
will deliver to the Originators an amount in cash equal to the sum of (A)
99.97860% of the aggregate principal balance as of the Closing Date of the Class
A-3 Certificates and (B) accrued interest on such principal balance at the rate
of 5.82% per annum, on the Class A-3 Certificates from (and including) June 1,
2001 to (but not including) June 28, 2001, payable by wire transfer of same day
funds.

                  On the Closing Date, as consideration for the Unaffiliated
Seller's sale of the Mortgage Loans to the Depositor, the Depositor will deliver
to the Unaffiliated Seller (i) an amount in cash equal to the sum of (A)
99.97867% of the aggregate principal balance as of the Closing Date of the Class
A-3 Certificates and (B) accrued interest on such principal balance at the rate
of 5.82% per annum, on the Class A-3 Certificates from (and including) June 1,
2001 to (but not including) June 28, 2001, payable by wire transfer of same day
funds and (ii) the Class X and Class R Certificates to be issued pursuant to the
Pooling and Servicing Agreement.

                  (d) On the Closing Date, as consideration for the Originators'
sale of the Mortgage Loans to the Unaffiliated Seller, the Unaffiliated Seller
will deliver to the Originators an amount in cash equal to the sum of (A)
99.99258% of the aggregate principal balance as of the Closing Date of the Class
A-4 Certificates and (B) accrued interest on such principal balance at the rate
of 6.99% per annum, on the Class A-4 Certificates from (and including) June 1,
2001 to (but not including) June 28, 2001, payable by wire transfer of same day
funds.

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<PAGE>

                  On the Closing Date, as consideration for the Unaffiliated
Seller's sale of the Mortgage Loans to the Depositor, the Depositor will deliver
to the Unaffiliated Seller (i) an amount in cash equal to the sum of (A)
99.99258% of the aggregate principal balance as of the Closing Date of the Class
A-4 Certificates and (B) accrued interest on such principal balance at the rate
of 6.99% per annum, on the Class A-4 Certificates from (and including) June 1,
2001 to (but not including) June 28, 2001, payable by wire transfer of same day
funds and (ii) the Class X and Class R Certificates to be issued pursuant to the
Pooling and Servicing Agreement.

                  (e) On the Closing Date, as consideration for the Originators'
sale of the Mortgage Loans to the Unaffiliated Seller, the Unaffiliated Seller
will deliver to the Originators an amount in cash equal to the sum of (A)
18.01220% of the notional amount as of the Closing Date of the Class A-IO
Certificates and (B) accrued interest on such notional amount at the rate of
8.00% per annum, on the Class A-IO Certificates from (and including) June 1,
2001 to (but not including) June 28, 2001, payable by wire transfer of same day
funds.

                  On the Closing Date, as consideration for the Unaffiliated
Seller's sale of the Mortgage Loans to the Depositor, the Depositor will deliver
to the Unaffiliated Seller (i) an amount in cash equal to the sum of (A)
18.01220% of the notional amount as of the Closing Date of the Class A-IO
Certificates and (B) accrued interest on such notional amount at the rate of
8.00% per annum, on the Class A-IO Certificates from (and including) June 1,
2001 to (but not including) June 28, 2001, payable by wire transfer of same day
funds and (ii) the Class X and Class R Certificates to be issued pursuant to the
Pooling and Servicing Agreement.

                  The consideration described in this Section 2.03 collectively
represents (i) full consideration for the Originators' sale of the Mortgage
Loans to the Unaffiliated Seller and (ii) full consideration for the
Unaffiliated Seller's sale of the Mortgage Loans to the Depositor. The
Consideration received by the Originators will be allocated among them in
proportion to the outstanding principal balance of the mortgage loans sold by
each.

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

                  (a) On the Closing Date the Originators shall sell, transfer,
assign, set over and convey, or cause to be assigned, set over or conveyed, to
the Unaffiliated Seller, without recourse but subject to the terms of this
Agreement, all right, title and interest in and to the applicable Mortgage
Loans, including all principal outstanding as of, and all interest due and
accruing after, the Cut-Off Date, the Insurance Policies relating to each such
Mortgage Loan and all right, title and interest in and to the proceeds of such
Insurance Policies from and after the Cut-Off Date and the Unaffiliated Seller
shall sell, transfer, assign, set over and convey or cause to be assigned, set
over or conveyed, to the Depositor, without recourse but subject to the terms of
this Agreement, all right, title and interest in and to the applicable Mortgage
Loans, including all principal outstanding as of, and all interest due after,
the Cut-Off Date, the Insurance Policies relating to each such Mortgage Loan,
all right, title and interest in and to the proceeds of such Insurance Policies
and all of its rights under this Agreement with respect to the Mortgage Loans
from and after the Cut-Off Date. Upon payment of the purchase price for such
Mortgage Loans as provided in Section 2.03 of this Agreement, the Originators
and the Unaffiliated Seller shall have hereby, and shall be deemed to have, or
caused to have sold, transferred, assigned, set over and conveyed such Mortgage
Loans, the Insurance Policies relating to each such Mortgage Loan, all right,
title and interest in and to the proceeds of such Insurance Policies and all of
their rights under this Agreement with respect to the Mortgage Loans from and
after the Cut-Off Date.

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<PAGE>

                  (b) Upon the sale of such Mortgage Loans, the ownership of
each related Mortgage Note, each related Mortgage and the contents of the
related Mortgage File shall immediately vest in the Depositor and the ownership
of all related records and documents with respect to each Mortgage Loan prepared
by or which come into the possession of the Originators or the Unaffiliated
Seller shall immediately vest in the Depositor. The contents of any Mortgage
File in the possession of the Originators or the Unaffiliated Seller at any time
after such sale, and any principal collected and interest due on the Mortgage
Loans after the Cut-Off Date and received by the Originators or the Unaffiliated
Seller, shall be held in trust by the Originators or the Unaffiliated Seller for
the benefit of the Depositor as the owner thereof, and shall be promptly
delivered by the Originators or the Unaffiliated Seller to or upon the order of
the Depositor.

                  (c) Pursuant to the Pooling and Servicing Agreement, the
Depositor shall, on the Closing Date, assign all of its right, title and
interest in and to the applicable Mortgage Loans, the related Insurance Policies
and any proceeds whereof and all of its rights under this Agreement to the
Trustee for the benefit of the Certificateholders and the Certificate Insurer.

                  Section 2.05. Delivery of Mortgage Loan Documents.

                  (a) On or prior to the Closing Date the related Originator
shall deliver or cause to be delivered to the Unaffiliated Seller, and the
Unaffiliated Seller shall deliver to the Collateral Agent, on behalf of the
Trustee (as assignee of the Depositor pursuant to the Pooling and Servicing
Agreement), each of the documents described in clauses (i) through (vi) of
Section 2.05(a) of the Pooling and Servicing Agreement for each applicable
Mortgage Loan in accordance with the provisions of Section 2.05 of the Pooling
and Servicing Agreement.

                  (b) Pursuant to the Pooling and Servicing Agreement, the
Unaffiliated Seller shall be required to promptly submit, or cause to be
submitted by the related Originator, for recording in the appropriate public
office for real property records, each assignment referred to in Section 2.05(a)
of the Pooling and Servicing Agreement. The Collateral Agent, on behalf of the
Trustee, shall be required to retain a copy of each assignment submitted for
recording. In the event that any such assignment is lost or returned unrecorded
because of a defect therein, the Unaffiliated Seller or such Originator shall
promptly prepare a substitute assignment or cure such defect, as the case may
be, and thereafter the Unaffiliated Seller or such Originator shall be required
to submit each such assignment for recording.

                  (c) The Unaffiliated Seller or the related Originator shall,
within five (5) Business Days after the receipt thereof, deliver or cause to be
delivered to the Collateral Agent, on behalf of the Trustee (pursuant to the
Pooling and Servicing Agreement): (i) the original recorded Mortgage and related
power of attorney, if any, in those instances where a copy thereof certified by
the related Originator was delivered to the Collateral Agent, on behalf of the
Trustee (pursuant to the Pooling and Servicing Agreement); (ii) the original
recorded assignment of Mortgage from the related Originator to the Trustee
(pursuant to the Pooling and Servicing Agreement), which, together with any
intervening assignments of Mortgage, evidences a complete chain of assignment
from the originator of the Mortgage Loan to the Trustee in those instances where
copies of such assignments certified by the related Originator were delivered to
the Collateral Agent, on behalf of the Trustee, (pursuant to Section 2.05 of the
Pooling and Servicing Agreement); and (iii) the title insurance policy or title
opinion required in Section 2.05(a)(vi) of the Pooling and Servicing Agreement.

                  Notwithstanding anything to the contrary contained in this
Section 2.05, in those instances where the public recording office retains the
original Mortgage, power of attorney, if any, assignment or assignment of
Mortgage after it has been recorded or such original has been lost, the

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<PAGE>

Unaffiliated Seller or the related Originator shall be deemed to have satisfied
its obligations hereunder upon delivery to the Collateral Agent, on behalf of
the Trustee (pursuant to the Pooling and Servicing Agreement), of a copy of such
Mortgage, power of attorney, if any, assignment or assignment of Mortgage
certified by the public recording office to be a true copy of the recorded
original thereof.

                  From time to time the Unaffiliated Seller or the related
Originator may forward or cause to be forwarded to the Collateral Agent, on
behalf of the Trustee (pursuant to the Pooling and Servicing Agreement),
additional original documents evidencing an assumption or modification of a
Mortgage Loan.

                  (d) All original documents relating to the Mortgage Loans that
are not delivered to the Collateral Agent, on behalf of the Trustee (pursuant to
the Pooling and Servicing Agreement), as permitted by Section 2.05 (a) hereof
are and shall be held by the Servicer, the Unaffiliated Seller or the related
Originator in trust for the benefit of the Trustee on behalf of the
Certificateholders and the Certificate Insurer. In the event that any such
original document is required pursuant to the terms of this Section 2.05 to be a
part of a Mortgage File, such document shall be delivered promptly to the
Collateral Agent, on behalf of the Trustee (as assignee of the Depositor
pursuant to the Pooling and Servicing Agreement). From and after the sale of the
Mortgage Loans to the Depositor pursuant hereto, to the extent that the
Unaffiliated Seller or the related Originator retains legal title of record to
any Mortgage Loans prior to the vesting of legal title in the Trustee (as
assignee of the Depositor pursuant to the Pooling and Servicing Agreement), such
title shall be retained in trust for the Depositor as the owner of the Mortgage
Loans and the Trustee, as the Depositor's assignee.

                  Section 2.06. Acceptance of Mortgage Loans.

                  (a) To evidence the transfer of the Mortgage Loans and related
Mortgage Files to the Collateral Agent, on behalf of the Trustee, the Collateral
Agent shall deliver the acknowledgement of receipt, the Initial Certification
and the Final Certification required to be delivered pursuant to Section 2.06(a)
and (b) of the Pooling and Servicing Agreement.

                  (b) Pursuant to the Pooling and Servicing Agreement, the
Collateral Agent has agreed to execute and deliver on or prior to the Closing
Date an acknowledgment of receipt of each Mortgage Loan, the original Mortgage
Note with respect to each Mortgage Loan (with any exceptions noted), in the form
attached as Exhibit Q to the Pooling and Servicing Agreement and declares that
it will hold such documents and any amendments, replacements or supplements
thereto, as well as any other assets included in the definition of Trust Fund in
the Pooling and Servicing Agreement and delivered to the Collateral Agent, on
behalf of the Trustee in trust upon and subject to the conditions set forth in
the Pooling and Servicing Agreement for the benefit of the Certificateholders
and the Certificate Insurer. Pursuant to the Pooling and Servicing Agreement,
the Collateral Agent, on behalf of the Trustee has agreed, for the benefit of
the Certificateholders and the Certificate Insurer, to review (or cause to be
reviewed) each Trustee's Mortgage File within thirty (30) days after the Closing
Date (or, with respect to any Qualified Substitute Mortgage Loan, within 30 days
after the receipt by the Collateral Agent, on behalf of the Trustee thereof),
and to deliver to the Unaffiliated Seller, the Servicer and the Certificate
Insurer a certification in the form attached to the Pooling and Servicing
Agreement as Exhibit H to the effect that, as to each Mortgage Loan listed in
the Mortgage Loan Schedule (other than any Mortgage Loan paid in full or any
Mortgage Loan specifically identified in such certification as not covered by
such certification), (i) all documents required to be delivered to it pursuant
to the Pooling and Servicing Agreement are in its possession, (ii) each such
document has been reviewed by it and has not been mutilated, damaged, torn or
otherwise physically altered (handwritten additions, changes or corrections
shall not constitute physical alteration if initiated by the Mortgagor), appears
regular on its face and

                                       8
<PAGE>

relates to such Mortgage Loan, and (iii) based on its examination and only as to
the foregoing documents, the information set forth on the Mortgage Loan Schedule
accurately reflects the information set forth in the Trustee's Mortgage File
delivered on such date. Pursuant to the Pooling and Servicing Agreement, the
Collateral Agent, on behalf of the Trustee, shall be under no duty or obligation
to inspect, review or examine any such documents, instruments, certificates or
other papers to determine that they are genuine, enforceable, or appropriate for
the represented purpose or that they are other than what they purport to be on
their face. Pursuant to the Pooling and Servicing Agreement, within ninety (90)
days of the Closing Date, with respect to the Mortgage Loans, the Collateral
Agent, on behalf of the Trustee, shall be required to deliver (or cause to be
delivered) to the Servicer, the Unaffiliated Seller and the Certificate Insurer
a final certification in the form attached to the Pooling and Servicing
Agreement as Exhibit I to the effect that, as to each Mortgage Loan listed in
the Mortgage Loan Schedule (other than any Mortgage Loan paid in full or any
Mortgage Loan specifically identified in such certification as not covered by
such certification), (i) all documents required to be delivered to it pursuant
to the Pooling and Servicing Agreement are in its possession, (ii) each such
document has been reviewed by it and has not been mutilated, damaged, torn or
otherwise physically altered (handwritten additions, changes or corrections
shall not constitute physical alteration if initialed by the Mortgagor), appears
regular on its face and relates to such Mortgage Loan, and (iii) based on its
examination and only as to the foregoing documents, the information set forth on
the Mortgage Loan Schedule accurately reflects the information set forth in the
Trustee's Mortgage File delivered on such date.

                  (c) The Pooling and Servicing Agreement provides that, if the
Collateral Agent during the process of reviewing the Trustee's Mortgage Files
finds any document required to be delivered to it and constituting a part of a
Trustee's Mortgage File which is not executed, has not been received, is
unrelated to the Mortgage Loan identified in the Mortgage Loan Schedule, or does
not conform to the requirements of Section 2.05 or the description thereof as
set forth in the Mortgage Loan Schedule, the Collateral Agent shall promptly so
notify the Servicer, the Trustee, the Unaffiliated Seller, the related
Originator and the Certificate Insurer. The Unaffiliated Seller agrees that in
performing any such review, the Collateral Agent may conclusively rely on the
Unaffiliated Seller as to the purported genuineness of any such document and any
signature thereon. Each of the Originators and the Unaffiliated Seller agrees to
use reasonable efforts to remedy a material defect in a document constituting
part of a Mortgage File of which it is notified. If, however, within sixty (60)
days after such notice neither the Unaffiliated Seller nor any Originator has
remedied the defect and the defect materially and adversely affects the interest
of the Certificateholders in the related Mortgage Loan or the interests of the
Certificate Insurer, then the Unaffiliated Seller and the Originators shall be
obligated to either substitute in lieu of such Mortgage Loan a Qualified
Substitute Mortgage Loan or purchase such Mortgage Loan in the manner and
subject to the conditions set forth in Section 3.05 hereof.

                  (d) The failure of the Collateral Agent, the Trustee or the
Certificate Insurer to give any notice contemplated herein within the time
periods specified above shall not affect or relieve the Unaffiliated Seller's or
the Originators' obligation to repurchase for any Mortgage Loan pursuant to this
Section 2.06 or Section 3.05 of this Agreement.

                  Section 2.07. Sale of Mortgage Loans; Assignment of Agreement.
The Originators and the Unaffiliated Seller each hereby acknowledges and agrees
that the Depositor may sell, assign and convey its interest under this Agreement
to the Trustee for the benefit of the Trust as may be required to effect the
purposes of the Pooling and Servicing Agreement, without further notice to, or
consent of, the Unaffiliated Seller or the Originators, and the Trustee shall
succeed to such of the rights and obligations of the Depositor hereunder as
shall be so assigned. The Depositor shall, pursuant to the Pooling and Servicing
Agreement, assign all of its right, title and interest in and to the Mortgage
Loans and its right to exercise the remedies created by this Agreement,
including, without limitation, its rights to exercise

                                        9

<PAGE>

remedies created by Sections 2.06 and 3.05 hereof for breaches of the
representations, warranties, agreements and covenants of the Unaffiliated Seller
or the Originators contained in Sections 2.05, 2.06, 3.01, 3.02 and 3.03 hereof
to the Trustee for the benefit of the Certificateholders and the Certificate
Insurer. Each of the Originators and the Unaffiliated Seller agrees that, upon
such assignment to the Trustee, such representations, warranties, agreements and
covenants will run to and be for the benefit of the Trustee and the Trustee may
enforce, without joinder of the Depositor, the repurchase obligations of the
Unaffiliated Seller and the Originators set forth herein with respect to
breaches of such representations, warranties, agreements and covenants.

                  Section 2.08. Examination of Mortgage Files. Prior to the
Closing Date, the Unaffiliated Seller shall make the Mortgage Files available to
the Depositor or its designee for examination at the Unaffiliated Seller's
offices or at such other place as the Unaffiliated Seller shall reasonably
specify. Such examination may be made by the Depositor or its designee at any
time on or before the Closing Date. If the Depositor or its designee makes such
examination prior to the Closing Date and identifies any Mortgage Loans that do
not conform to the requirements of the Depositor as described in this Agreement,
such Mortgage Loans shall be deleted from the Mortgage Loan Schedule and may be
replaced, prior to the Closing Date, by substitute Mortgage Loans acceptable to
the Depositor. The Depositor may, at its option and without notice to the
Unaffiliated Seller, purchase all or part of the Mortgage Loans without
conducting any partial or complete examination. The fact that the Depositor, the
Collateral Agent or the Trustee has conducted or has failed to conduct any
partial or complete examination of the Mortgage Files shall not affect the
rights of the Depositor or the Trustee to demand repurchase or other relief as
provided in this Agreement.

                  Section 2.09. Books and Records. The sale of each Mortgage
Loan shall be reflected on each of the Originators' and the Unaffiliated
Seller's accounting and other records, balance sheet and other financial
statements as a sale of assets by the Originators to the Unaffiliated Seller and
by the Unaffiliated Seller to the Depositor. Each of the Originators and the
Unaffiliated Seller shall be responsible for maintaining, and shall maintain, a
complete set of books and records for each Mortgage Loan which shall be clearly
marked to reflect the ownership of each Mortgage Loan by the Trustee for the
benefit of the Certificateholders and the Certificate Insurer.

                  Section 2.10. Cost of Delivery and Recordation of Documents.
The costs relating to the delivery and recordation of the documents specified in
this Article II in connection with the Mortgage Loans shall be borne by the
Unaffiliated Seller or the Originators.

                                  ARTICLE III

                         REPRESENTATIONS AND WARRANTIES

                  Section 3.01. Representations and Warranties as to the
Originators. Each of the Originators hereby represents and warrants to the
Unaffiliated Seller and the Depositor, as of the Closing Date, that:

                  (a) The Originator is a corporation duly organized, validly
existing and in good standing under the laws of (i) the State of Pennsylvania
(with respect to ABC and Upland) or (ii) with respect to ABMS, the State of New
Jersey and has all licenses necessary to carry on its business as now being
conducted and is licensed, qualified and in good standing in each state where a
Mortgaged Property is located if the laws of such state require licensing or
qualification in order to conduct business of the type conducted by the
Originator and to perform its obligations as the Originator hereunder, and in
any event the Originator is in compliance with the laws of any such state to the
extent necessary to ensure the

                                       10
<PAGE>

enforceability of the related Mortgage Loan; the Originator has the full power
and authority, corporate and otherwise, to execute and deliver this Agreement
and to perform in accordance herewith; the execution, delivery and performance
of this Agreement (including all instruments of transfer to be delivered
pursuant to this Agreement) by the Originator or the consummation of the
transactions contemplated hereby have been duly and validly authorized; this
Agreement evidences the valid, binding and enforceable obligation of the
Originator; and all requisite corporate action has been taken by the Originator
to make this Agreement valid and binding upon the Originator in accordance with
its terms;

                  (b) No consent, approval, authorization or order of any court
or governmental agency or body is required for the execution, delivery and
performance by the Originator of, or compliance by the Originator with, this
Agreement or the sale of the Mortgage Loans pursuant to the terms of this
Agreement or the consummation of the transactions contemplated by this
Agreement, or if required, such approval has been obtained prior to the Closing
Date;

                  (c) Neither the execution and delivery of this Agreement, the
acquisition nor origination of the Mortgage Loans by the Originator or the
transactions contemplated hereby, nor the fulfillment of or compliance with the
terms and conditions of this Agreement, has or will conflict with or result in a
breach of any of the terms, conditions or provisions of the Originator's charter
or by-laws or any legal restriction or any agreement or instrument to which the
Originator is now a party or by which it is bound or to which its property is
subject, or constitute a default or result in an acceleration under any of the
foregoing, or result in the violation of any law, rule, regulation, order,
judgment or decree to which the Originator or its property is subject, or impair
the ability of the Trustee (or the Servicer as the agent of the Trustee) to
realize on the Mortgage Loans, or impair the value of the Mortgage Loans;

                  (d) Neither this Agreement nor the information contained in
the Prospectus Supplement (other than information under the caption "Plan of
Distribution") nor any statement, report or other document prepared by the
Originator and furnished or to be furnished pursuant to this Agreement or in
connection with the transactions contemplated hereby contains any untrue
statement or alleged untrue statement of any material fact or omits to state a
material fact necessary to make the statements contained herein or therein, in
light of the circumstances under which they were made, not misleading;

                  (e) There is no action, suit, proceeding or investigation
pending or, to the knowledge of the Originator, threatened before a court,
administrative agency or government tribunal against the Originator which,
either in any one instance or in the aggregate, may result in any material
adverse change in the business, operations, financial condition, properties or
assets of the Originator, or in any material impairment of the right or ability
of the Originator to carry on its business substantially as now conducted, or in
any material liability on the part of the Originator, or which would draw into
question the validity of this Agreement, the Mortgage Loans, or of any action
taken or to be taken in connection with the obligations of the Originator
contemplated herein, or which would impair materially the ability of the
Originator to perform under the terms of this Agreement or that will prohibit
its entering into this Agreement or the consummation of any of the transactions
contemplated hereby;

                  (f) The Originator is not in violation of or in default with
respect to, and the execution and delivery of this Agreement by the Originator
and its performance of and compliance with the terms hereof will not constitute
a violation or default with respect to, any order or decree of any court or any
order, regulation or demand of any federal, state, municipal or governmental
agency, which violation or default might have consequences that would materially
and adversely affect the condition (financial or other) or operations of the
Originator or its properties or might have consequences that would materially
and adversely affect its performance hereunder or under any subservicing
agreement;

                                       11
<PAGE>

                  (g) Upon the receipt of each Trustee's Mortgage File by the
Depositor (or its assignee) under this Agreement, the Depositor (or its
assignee) will have good title on behalf of the Trust Fund to each related
Mortgage Loan and such other items comprising the corpus of the Trust Fund free
and clear of any lien created by the Originator (other than liens which will be
simultaneously released);

                  (h) The consummation of the transactions contemplated by this
Agreement are in the ordinary course of business of the Originator, and the
transfer, assignment and conveyance of the Mortgage Notes and the Mortgages by
the Originator pursuant to this Agreement are not subject to the bulk transfer
or any similar statutory provisions in effect in any applicable jurisdiction;

                  (i) With respect to any Mortgage Loan purchased by the
Originator, the Originator acquired title to the Mortgage Loan in good faith,
without notice of any adverse claim;

                  (j) The Originator does not believe, nor does it have any
reason or cause to believe, that it cannot perform each and every covenant
contained in this Agreement. The Originator is solvent and the sale of the
Mortgage Loans by the Originator pursuant to the terms of this Agreement will
not cause the Originator to become insolvent. The sale of the Mortgage Loans by
the Originator pursuant to the terms of this Agreement was not undertaken with
the intent to hinder, delay or defraud any of the Originator's creditors;

                  (k) The Mortgage Loans are not intentionally selected in a
manner so as to affect adversely the interests of the Depositor or of any
transferee of the Depositor (including the Trustee);

                  (l) The Originator has determined that it will treat the
disposition of the Mortgage Loans pursuant to this Agreement as a sale for
accounting and tax purposes;

                  (m) The Originator has not dealt with any broker or agent or
anyone else that may be entitled to any commission or compensation in connection
with the sale of the Mortgage Loans to the Depositor other than to the Depositor
or an affiliate thereof; and

                  (n) The consideration received by the Originator upon the sale
of the Mortgage Loans under this Agreement constitutes fair consideration and
reasonably equivalent value for the Mortgage Loans.

                  Section 3.02. Representations and Warranties as to the
Unaffiliated Seller. The Unaffiliated Seller hereby represents and warrants to
the Depositor, as of the Closing Date, that:

                  (a) The Unaffiliated Seller is a corporation duly organized,
validly existing and in good standing under the laws of the State of Delaware
and has all licenses necessary to carry on its business as now being conducted
and is licensed, qualified and in good standing in each state where a Mortgaged
Property is located if the laws of such state require licensing or qualification
in order to conduct business of the type conducted by the Unaffiliated Seller
and to perform its obligations as the Unaffiliated Seller hereunder, and in any
event the Unaffiliated Seller is in compliance with the laws of any such state
to the extent necessary to ensure the enforceability of the related Mortgage
Loan; the Unaffiliated Seller has the full power and authority, corporate and
otherwise, to execute and deliver this Agreement and to perform in accordance
herewith; the execution, delivery and performance of this Agreement (including
all instruments of transfer to be delivered pursuant to this Agreement) by the
Unaffiliated Seller and the consummation of the transactions contemplated hereby
have been duly and validly authorized; this Agreement evidences the valid,
binding and enforceable obligation of the Unaffiliated Seller; and all

                                       12
<PAGE>

requisite corporate action has been taken by the Unaffiliated Seller to make
this Agreement valid and binding upon the Unaffiliated Seller in accordance with
its terms;

                  (b) No consent, approval, authorization or order of any court
or governmental agency or body is required for the execution, delivery and
performance by the Unaffiliated Seller of or compliance by the Unaffiliated
Seller with this Agreement or the sale of the Mortgage Loans pursuant to the
terms of this Agreement or the consummation of the transactions contemplated by
this Agreement, or if required, such approval has been obtained prior to the
Closing Date;

                  (c) Neither the execution and delivery of this Agreement, the
acquisition nor origination of the Mortgage Loans by the Unaffiliated Seller nor
the transactions contemplated hereby, nor the fulfillment of or compliance with
the terms and conditions of this Agreement, has or will conflict with or result
in a breach of any of the terms, conditions or provisions of the Unaffiliated
Seller's charter or by-laws or any legal restriction or any agreement or
instrument to which the Unaffiliated Seller is now a party or by which it is
bound or to which its property is subject, or constitute a default or result in
an acceleration under any of the foregoing, or result in the violation of any
law, rule, regulation, order, judgment or decree to which the Unaffiliated
Seller or its property is subject, or impair the ability of the Trustee (or the
Servicer as the agent of the Trustee) to realize on the Mortgage Loans, or
impair the value of the Mortgage Loans;

                  (d) Neither this Agreement nor the information contained in
the Prospectus Supplement (other than information under the caption "Plan of
Distribution") nor any statement, report or other document prepared by the
Unaffiliated Seller and furnished or to be furnished pursuant to this Agreement
or in connection with the transactions contemplated hereby contains any untrue
statement or alleged untrue statement of any material fact or omits to state a
material fact necessary to make the statements contained herein or therein, in
light of the circumstances under which they were made, not misleading;

                  (e) There is no action, suit, proceeding or investigation
pending nor, to the knowledge of the Unaffiliated Seller, threatened before a
court, administrative agency or government tribunal against the Unaffiliated
Seller which, either in any one instance or in the aggregate, may result in any
material adverse change in the business, operations, financial condition,
properties or assets of the Unaffiliated Seller, or in any material impairment
of the right or ability of the Unaffiliated Seller to carry on its business
substantially as now conducted, or in any material liability on the part of the
Unaffiliated Seller, or which would draw into question the validity of this
Agreement, the Mortgage Loans, or of any action taken or to be taken in
connection with the obligations of the Unaffiliated Seller contemplated herein,
or which would impair materially the ability of the Unaffiliated Seller to
perform under the terms of this Agreement or that will prohibit its entering
into this Agreement or the consummation of any of the transactions contemplated
hereby or under any subservicing agreements;

                  (f) The Unaffiliated Seller is not in violation of or in
default with respect to, and the execution and delivery of this Agreement by the
Unaffiliated Seller and its performance of and compliance with the terms hereof
will not constitute a violation or default with respect to, any order or decree
of any court or any order, regulation or demand of any federal, state, municipal
or governmental agency, which violation or default might have consequences that
would materially and adversely affect the condition (financial or other) or
operations of the Unaffiliated Seller or its properties or might have
consequences that would materially and adversely affect its performance
hereunder or under any subservicing agreement;

                  (g) Upon the receipt of each Trustee's Mortgage File by the
Depositor (or its assignee) under this Agreement, the Depositor (or its
assignee) will have good title on behalf of the Trust Fund to

                                       13
<PAGE>

each related Mortgage Loan and such other items comprising the corpus of the
Trust Fund free and clear of any lien created by the Unaffiliated Seller (other
than liens which will be simultaneously released);

                  (h) The consummation of the transactions contemplated by this
Agreement are in the ordinary course of business of the Unaffiliated Seller, and
the transfer, assignment and conveyance of the Mortgage Notes and the Mortgages
by the Unaffiliated Seller pursuant to this Agreement are not subject to the
bulk transfer or any similar statutory provisions in effect in any applicable
jurisdiction;

                  (i) With respect to any Mortgage Loan purchased by the
Unaffiliated Seller, the Unaffiliated Seller acquired title to the Mortgage Loan
in good faith, without notice of any adverse claim;

                  (j) The Unaffiliated Seller does not believe, nor does it have
any reason or cause to believe, that it cannot perform each and every covenant
contained in this Agreement. The Unaffiliated Seller is solvent and the sale of
the Mortgage Loans by the Unaffiliated Seller pursuant to the terms of this
Agreement will not cause the Unaffiliated Seller to become insolvent. The sale
of the Mortgage Loans by the Unaffiliated Seller pursuant to the terms of this
Agreement was not undertaken with the intent to hinder, delay or defraud any of
the Unaffiliated Seller's creditors;

                  (k) The Mortgage Loans are not intentionally selected in a
manner so as to affect adversely the interests of the Depositor or of any
transferee of the Depositor (including the Trustee);

                  (l) The Unaffiliated Seller has determined that it will treat
the disposition of the Mortgage Loans pursuant to this Agreement as a sale for
accounting and tax purposes;

                  (m) The Unaffiliated Seller has not dealt with any broker or
agent or anyone else that may be entitled to any commission or compensation in
connection with the sale of the Mortgage Loans to the Depositor other than to
the Depositor or an affiliate thereof; and

                  (n) The consideration received by the Unaffiliated Seller upon
the sale of the Mortgage Loans under this Agreement constitutes fair
consideration and reasonably equivalent value for the Mortgage Loans.

                  Section 3.03. Representations and Warranties Relating to the
Mortgage Loans. The Originators represent and warrant to the Unaffiliated Seller
and the Unaffiliated Seller represents to the Depositor that, as of the Closing
Date, as to each Mortgage Loan, immediately prior to the sale and transfer of
such Mortgage Loan by the Unaffiliated Seller to the Depositor:

                  (a) The information set forth in the Mortgage Loan Schedule is
complete, true and correct;

                  (b) The information provided by the Originators or any
Affiliate to the Depositor, the Trust, the Collateral Agent, the Trustee and the
Certificate Insurer in connection with a Mortgage Loan will be true and correct
in all material respects on the date or dates when such information is
furnished;

                  (c) Each Mortgage is a valid first or second lien on a fee
simple (or its equivalent under applicable state law) estate in the real
property securing the amount owed by the Mortgagor under the Mortgage Note
subject only to (i) the lien of current real property taxes and assessments
which are not delinquent, (ii) with respect to any Mortgage Loan identified on
the Mortgage Loan Schedule as secured by a second lien, the related first
mortgage loan, (iii) covenants, conditions and restrictions, rights of way,
easements and other matters of public record as of the date of recording of such
Mortgage, such exceptions appearing of record being acceptable to mortgage
lending institutions generally in the area

                                       14
<PAGE>

wherein the property subject to the Mortgage is located or specifically
reflected in the appraisal obtained in connection with the origination of the
related Mortgage Loan obtained by the Unaffiliated Seller and (iv) other matters
to which like properties are commonly subject which do not materially interfere
with the benefits of the security intended to be provided by such Mortgage;

                  (d) Immediately prior to the sale, transfer and assignment by
the related Originator to the Unaffiliated Seller and by the Unaffiliated Seller
to the Depositor, the Unaffiliated Seller or such Originator, as applicable, had
good title to, and was the sole owner of each Mortgage Loan, free of any
interest of any other Person, and the Unaffiliated Seller or such Originator has
transferred all right, title and interest in each Mortgage Loan to the Depositor
or the Unaffiliated Seller, as applicable;

                  (e) As of the Cut-Off Date, no payment of principal or
interest on or in respect of any Mortgage Loan remains unpaid for thirty (30) or
more days past the date the same was due in accordance with the related Mortgage
Note without regard to applicable grace periods and without giving effect to any
Periodic Advances by the applicable Originator or any Affiliate thereof;

                  (f) As of the Cut-Off Date, no Mortgage Loan has a Mortgage
Interest Rate less than 8.750% per annum for Mortgage Loan Group I and 9.240%
per annum for Mortgage Loan Group II and the weighted average Mortgage Interest
Rate of the Mortgage Loans is 11.694%;

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

                  (h) As of the Cut-Off Date, the weighted average remaining
term to maturity of the Mortgage Loans is 266 months in Mortgage Loan Group I
and 204 months for Mortgage Loan Group II;

                  (i) To the best knowledge of the Unaffiliated Seller and each
of the Originators, there is no mechanics' lien or claim for work, labor or
material (and no rights are outstanding that under law could give rise to such
lien) affecting the premises subject to any Mortgage which is or may be a lien
prior to, or equal or coordinate with, the lien of such Mortgage, except those
which are insured against by the title insurance policy referred to in (ff)
below;

                  (j) To the best knowledge of the Unaffiliated Seller and each
of the Originators, there is no delinquent tax or assessment lien against any
Mortgaged Property;

                  (k) Such Mortgage Loan, the Mortgage, and the Mortgage Note,
including, without limitation, the obligation of the Mortgagor to pay the unpaid
principal of and interest on the Mortgage Note, are each not subject to any
right of rescission (or any such rescission right has expired in accordance with
applicable law), set-off, counterclaim, or defense, including the defense of
usury, nor will the operation of any of the terms of the Mortgage Note or the
Mortgage, or the exercise of any right thereunder, render either the Mortgage
Note or the Mortgage unenforceable, in whole or in part, or subject to any right
of rescission, set-off, counterclaim, or defense, including the defense of
usury, and no such right of rescission, set-off, counterclaim, or defense has
been asserted with respect thereto;

                  (l) To the best knowledge of the Unaffiliated Seller and each
of the Originators, the Mortgaged Property is free of material damage and is in
good repair, and there is no pending or threatened proceeding for the total or
partial condemnation of the Mortgaged Property;

                                       15
<PAGE>

                  (m) Neither the Originators nor the Unaffiliated Seller has
received a notice of default of any first mortgage loan secured by the Mortgaged
Property which has not been cured by a party other than the Unaffiliated Seller;

                  (n) Each Mortgage Note and Mortgage are in substantially the
forms previously provided to the Trustee on behalf of the Unaffiliated Seller;

                  (o) No Mortgage Loan had, at the date of origination, a
Combined Loan-to-Value Ratio in excess of 100%, and the weighted average
Combined Loan-to-Value ratio of all Mortgage Loans as of the Cut-Off Date is
approximately 77.45% for Mortgage Loan Group I and 72.20% for Mortgage Loan
Group II;

                  (p) The Mortgage Loan was not originated in a program in which
the amount of documentation in the underwriting process was limited in
comparison to an Originator's normal documentation requirements;

                  (q) No more than the following percentages of the Mortgage
Loans by Principal Balance as of the Cut-Off Date are secured by Mortgaged
Properties located in the following states:

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

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

             New York                                      27.32%
             New Jersey                                    10.43
             Pennsylvania                                   8.51
             Massachusetts                                  7.56
             Florida                                        7.21
             Ohio                                           6.20
             Michigan                                       4.31
             Illinois                                       4.07
             Georgia                                        3.39
             North Carolina                                 2.84
             Indiana                                        2.51
             Other                                         15.63
             Total                              -------------------------
                                                            100%
                                                =========================

                                       16
<PAGE>

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

             New York                                      30.94%
             New Jersey                                    12.92
             Pennsylvania                                   8.26
             Ohio                                           7.08
             Florida                                        7.00
             Georgia                                        5.75
             Illinois                                       5.51
             Massachusetts                                  4.59
             Maryland                                       2.67
             Virginia                                       2.61
             Connecticut                                    2.37
             North Carolina                                 2.04
             Other                                          8.25
             Total                              -------------------------
                                                            100%

                                                =========================

                  (r) The Mortgage Loans were (i) originated by an Originator in
the normal course of its business, (ii) not selected by the Unaffiliated Seller
or the Originators for sale hereunder or inclusion in the Trust Fund on any
basis adverse to the Trust Fund relative to the portfolio of similar mortgage
loans of the Unaffiliated Seller or the Originators and (iii) prior to the
Closing Date, serviced by the Originator or an Affiliate thereof in accordance
with Accepted Services Practices;

                  (s) No more than 5% (by Principal Balance) of the Mortgage
Loans constitutes a lien on leasehold interests, and with respect to such
Mortgage Loan the cost of the leasehold expense has been factored into the
debt-to-income calculations with respect to the related Mortgagor and the
maturity date of the ground lease is later than the maturity date of the
Mortgage Loan;

                  (t) Each Mortgage contains customary and enforceable
provisions which render the rights and remedies of the holder thereof adequate
for the realization against the related Mortgaged Property of the benefits of
the security including (A) in the case of a Mortgage designated as a deed of
trust, by trustee's sale and (B) otherwise by judicial foreclosure. To the best
of the Unaffiliated Seller's and the Originators' knowledge, there is no
homestead or other exemption available to the related Mortgagor which would
materially interfere with the right to sell the related Mortgaged Property at a
trustee's sale or the right to foreclose the related Mortgage. The Mortgage
contains customary and enforceable provisions for the acceleration of the
payment of the Principal Balance of such Mortgage Loan in the event all or any
part of the related Mortgaged Property is sold or otherwise transferred without
the prior written consent of the holder thereof;

                  (u) The proceeds of such Mortgage Loan have been fully
disbursed, including reserves set aside by the Unaffiliated Seller or the
Originators, there is no requirement for, and neither the Unaffiliated Seller
nor the Originators shall make any, future advances thereunder. Any future
advances made prior to the Cut-Off Date have been consolidated with the
principal balance secured by the Mortgage, and such principal balance, as
consolidated, bears a single interest rate and single repayment term reflected
on the Mortgage Loan Schedule. The Principal Balance as of the Cut-Off Date does
not exceed the original principal amount of such Mortgage Loan. Except with
respect to no more than $150,000 of escrow funds in the aggregate with respect
to all Mortgage Loans, any and all requirements as to completion of any on-site
or off-site improvements and as to disbursements of any escrow funds

                                       17
<PAGE>

therefor have been complied with. All costs, fees, and expenses incurred in
making, or recording such Mortgage Loan have been paid;

                  (v) All Mortgage Loans were originated in compliance with the
Originators' Underwriting Guidelines;

                  (w) The terms of the Mortgage and the Mortgage Note have not
been impaired, waived, altered, or modified in any respect, except by a written
instrument which has been recorded, if necessary, to protect the interest of the
Trustee and which has been delivered to the Collateral Agent, on behalf of the
Trustee. The substance of any such alteration or modification will be reflected
on the Mortgage Loan Schedule and, to the extent necessary, has been or will be
approved by (i) the insurer under the applicable mortgage title insurance
policy, and (ii) the insurer under any other insurance policy required hereunder
for such Mortgage Loan where such insurance policy requires approval and the
failure to procure approval would impair coverage under such policy;

                  (x) No instrument of release, waiver, alteration, or
modification has been executed in connection with such Mortgage Loan, and no
Mortgagor has been released, in whole or in part, except in connection with an
assumption agreement which has been approved by the insurer under any insurance
policy required hereunder for such Mortgage Loan where such policy requires
approval and the failure to procure approval would impair coverage under such
policy, and which is part of the Mortgage File and has been delivered to the
Collateral Agent, on behalf of the Trustee, and the terms of which are reflected
in the Mortgage Loan Schedule;

                  (y) There is no default, breach, violation, or event of
acceleration existing under the Mortgage or the Mortgage Note and no event
which, with the passage of time or with notice and the expiration of any grace
or cure period, would constitute such a default, breach, violation or event of
acceleration, and neither the Originators nor the Unaffiliated Seller has waived
any such default, breach, violation or event of acceleration. All taxes,
governmental assessments (including assessments payable in future installments),
insurance premiums, water, sewer, and municipal charges, leaseholder payments,
or ground rents which previously became due and owing in respect of or affecting
the related Mortgaged Property have been paid. Neither the Originators nor the
Unaffiliated Seller has advanced funds, or induced, solicited, or knowingly
received any advance of funds by a party other than the Mortgagor, directly or
indirectly, for the payment of any amount required by the Mortgage or the
Mortgage Note;

                  (z) All of the improvements which were included for the
purposes of determining the Appraised Value of the Mortgaged Property were
completed at the time that such Mortgage Loan was originated and lie wholly
within the boundaries and building restriction lines of such Mortgaged Property.
Except for de minimis encroachments, no improvements on adjoining properties
encroach upon the Mortgaged Property. To the best of the Unaffiliated Seller's
and the Originators' knowledge, no improvement located on or being part of the
Mortgaged Property is in violation of any applicable zoning law or regulation.
All inspections, licenses, and certificates required to be made or issued with
respect to all occupied portions of the Mortgaged Property (including all such
improvements which were included for the purpose of determining such Appraised
Value) and, with respect to the use and occupancy of the same, including but not
limited to certificates of occupancy and fire underwriters certificates, have
been made or obtained from the appropriate authorities and the Mortgaged
Property is lawfully occupied under applicable law;

                  (aa) To the best of the Unaffiliated Seller's and the
Originators' knowledge, there do not exist any circumstances or conditions with
respect to the Mortgage, the Mortgaged Property, the Mortgagor, or the
Mortgagor's credit standing that can be reasonably expected to cause such
Mortgage

                                       18
<PAGE>

Loan to become delinquent or adversely affect the value or marketability of such
Mortgage Loan, other than any such circumstances or conditions permitted under
the Originator's Underwriting Guidelines;

                  (bb) All parties which have had any interest in the Mortgage,
whether as mortgagee, assignee, pledgee or otherwise, are (or, during the period
in which they held and disposed of such interest, were) (i) in compliance with
any and all applicable licensing requirements of the laws of the state wherein
the Mortgaged Property is located and (ii) (A) organized under the laws of such
state, (B) qualified to do business in such state, (C) federal savings and loan
associations or national banks having principal offices in such state, (D) not
doing business in such state, or (E) not required to qualify to do business in
such state;

                  (cc) The Mortgage Note and the Mortgage are genuine, and each
is the legal, valid and binding obligation of the maker thereof, enforceable in
accordance with its terms, except as such enforcement may be limited by
bankruptcy, insolvency, reorganization, moratorium, or other similar laws
affecting the enforcement of creditors' rights generally and except that the
equitable remedy of specific performance and other equitable remedies are
subject to the discretion of the courts. All parties to the Mortgage Note and
the Mortgage had legal capacity to execute the Mortgage Note and the Mortgage
and convey the estate therein purported to be conveyed, and the Mortgage Note
and the Mortgage have been duly and properly executed by such parties or
pursuant to a valid power-of-attorney that has been recorded with the Mortgage;

                  (dd) The sale, transfer and conveyance of the Mortgage Note
and the Mortgage as and in the manner contemplated by Section 2.05 of this
Agreement is sufficient (i) to fully to transfer to the Depositor all right,
title, and interest of the Unaffiliated Seller and the Originators thereto as
note holder and mortgagee and (ii) to the extent an Originator or the
Unaffiliated Seller retains an interest in such Mortgage Note or Mortgage
despite such sale, transfer and conveyance, to grant to the Depositor the
security interest referred to in Section 6.07 hereof and thereafter (x) to
transfer the right, title and interest of the Depositor to the Trust and (y) to
pledge the interest of the Trust to the Trustee for the benefit of the
Certificateholders. The Mortgage has been duly assigned by the Originators to
the Unaffiliated Seller and by the Unaffiliated Seller to the Depositor and by
the Depositor to the Trust and the Mortgage Note has been duly endorsed. The
Assignment of Mortgage delivered to the Collateral Agent, on behalf of the
Trustee, pursuant to Section 2.05(a)(iv) of the Pooling and Servicing Agreement
is in recordable form and is acceptable for recording under the laws of the
applicable jurisdiction. The endorsement of the Mortgage Note, the delivery to
the Collateral Agent, on behalf of the Trustee, of the endorsed Mortgage Note,
and such Assignment of Mortgage, and the delivery of such Assignment of Mortgage
to the Collateral Agent, on behalf of the Trustee, for recording are sufficient
to permit the Trustee to avail itself of all protection available under
applicable law against the claims of any present or future creditors of the
Depositor, the Unaffiliated Seller or any of the Originators, and are sufficient
to prevent any other sale, transfer, assignment, pledge, or hypothecation of the
Mortgage Note and Mortgage by the Depositor, the Unaffiliated Seller or any of
the Originators from being enforceable, even if the Servicer does not record
such Assignment of Mortgage in the applicable recording office. The Trustee
shall have a first priority perfected security interest in the Mortgage Loans;

                  (ee) Any and all requirements of any federal, state, or local
law including, without limitation, usury, truth-in-lending, real estate
settlement procedures, consumer credit protection, equal credit opportunity, or
disclosure laws applicable to such Mortgage Loan have been complied with, and
the Servicer shall maintain in its possession, available for the Trustee's
inspection, and shall deliver to the Trustee or its designee upon demand,
evidence of compliance with all such requirements. The consummation of the
transactions contemplated by this Agreement will not cause the violation of any
such laws;

                                       19
<PAGE>

                  (ff) Such Mortgage Loan is covered by an ALTA mortgage title
insurance policy or such other generally used and acceptable form of policy,
issued by and the valid and binding obligation of a title insurer qualified to
do business in the jurisdiction where the Mortgaged Property is located,
insuring the Unaffiliated Seller, and its successors and assigns, as to the
first or second priority lien, as applicable, of the Mortgage in the original
principal amount of such Mortgage Loan. The assignment to the Trustee of the
Unaffiliated Seller's interest in such mortgage title insurance policy does not
require the consent of or notification to the insurer. Such mortgage title
insurance policy is in full force and effect and will be in full force and
effect and inure to the benefit of the Trustee upon the consummation of the
transactions contemplated by this Agreement. No claims have been made under such
mortgage title insurance policy and none of the Unaffiliated Seller, the
Originators nor any prior holder of the Mortgage has done, by act or omission,
anything which would impair the coverage of such mortgage title insurance
policy;

                  (gg) All improvements upon the Mortgaged Property are insured
against loss by fire, hazards of extended coverage, and such other hazards as
are customary in the area where the Mortgaged Property is located pursuant to
insurance policies conforming to the requirements of Section 3.05 hereof. If the
Mortgaged Property at origination was located in an area identified on a flood
hazard boundary map or flood insurance rate map issued by the Federal Emergency
Management Agency as having special flood hazards (and such flood insurance has
been made available), such Mortgaged Property was covered by flood insurance at
origination. Each individual insurance policy is the valid and binding
obligation of the insurer, is in full force and effect, and will be in full
force and effect and inure to the benefit of the Trustee upon the consummation
of the transactions contemplated by this Agreement, and contain a standard
mortgage clause naming the originator of such Mortgage Loan, and its successors
and assigns, as mortgagee and loss payee. All premiums thereon have been paid.
The Mortgage obligates the Mortgagor to maintain all such insurance at the
Mortgagor's cost and expense, and upon the Mortgagor's failure to do so,
authorizes the holder of the Mortgage to obtain and maintain such insurance at
the Mortgagor's cost and expense and to seek reimbursement therefor from the
Mortgagor, and none of the Unaffiliated Seller, the related Originator or any
prior holder of the Mortgage has acted or failed to act so as to impair the
coverage of any such insurance policy or the validity, binding effect, and
enforceability thereof;

                  (hh) If the Mortgage constitutes a deed of trust, a trustee,
duly qualified under applicable law to serve as such, has been properly
designated and currently so serves and is named in such Mortgage, and no fees or
expenses are or will become payable by the Trustee or the Certificateholders to
the trustee under the deed of trust, except in connection with a trustee's sale
after default by the Mortgagor;

                  (ii) The Mortgaged Property consists of one or more parcels of
real property separately assessed for tax purposes. To the extent there is
erected thereon a detached or an attached one-family residence or a detached
two-to-six-family dwelling, or an individual condominium unit in a low-rise
condominium, or an individual unit in a planned unit development, or a
commercial property, a manufactured dwelling, or a mixed use or multiple purpose
property, such residence, dwelling or unit is not (i) a unit in a cooperative
apartment, (ii) a property constituting part of a syndication, (iii) a time
share unit, (iv) a property held in trust, (v) a mobile home, (vi) a
log-constructed home, or (vii) a recreational vehicle;

                  (jj) There exist no material deficiencies with respect to
escrow deposits and payments, if such are required, for which customary
arrangements for repayment thereof have not been made or which the Unaffiliated
Seller or the related Originator expects not to be cured, and no escrow deposits
or payments of other charges or payments due the Unaffiliated Seller have been
capitalized under the Mortgage or the Mortgage Note;

                                       20
<PAGE>

                  (kk) Such Mortgage Loan was not originated at a below market
interest rate. Such Mortgage Loan does not have a shared appreciation feature,
or other contingent interest feature;

                  (ll) The origination and collection practices used by the
Unaffiliated Seller, the Originators or the Servicer with respect to such
Mortgage Loan have been in all respects legal, proper, prudent, and customary in
the mortgage origination and servicing business;

                  (mm) The Mortgagor has, to the extent required by applicable
law, executed a statement to the effect that the Mortgagor has received all
disclosure materials, if any, required by applicable law with respect to the
making of fixed-rate mortgage loans. The Servicer shall maintain or cause to be
maintained such statement in the Mortgage File;

                  (nn) All amounts received by the Unaffiliated Seller or the
Originators with respect to such Mortgage Loan after the Cut-Off Date and
required to be deposited in the Certificate Account have been so deposited in
the Certificate Account and are, as of the Closing Date, in the Certificate
Account;

                  (oo) The appraisal report with respect to the Mortgaged
Property contained in the Mortgage File was signed prior to the approval of the
application for such Mortgage Loan by a qualified appraiser, duly appointed by
the originator of such Mortgage Loan, who had no interest, direct or indirect,
in the Mortgaged Property or in any loan made on the security thereof and whose
compensation is not affected by the approval or disapproval of such application;

                  (pp) When measured by the Cut-Off Date Balances of all
Mortgage Loans as of the Cut-Off Date, the Mortgagors with respect to at least
95.81% of the Mortgage Loans in Mortgage Loan Group I and 75.37% in Mortgage
Loan Group II represented at the time of origination that the Mortgagor would
occupy the Mortgaged Property as the Mortgagor's primary residence;

                  (qq) Each of the Originators and the Unaffiliated Seller has
no knowledge with respect to the Mortgaged Property of any governmental or
regulatory action or third party claim made, instituted or threatened in writing
relating to a violation of any applicable federal, state or local environmental
law, statute, ordinance, regulation, order, decree or standard;

                  (rr) Each Mortgage Loan is a "qualified mortgage" within the
meaning of Section 860G(a)(3) of the Code;

                  (ss) With respect to second lien Mortgage Loans:

                       (i) neither the Unaffiliated Seller nor the Originators
         have any knowledge that the Mortgagor has received notice from the
         holder of the prior mortgage that such prior mortgage is in default,

                       (ii) no consent from the holder of the prior mortgage is
         needed for the creation of the second lien Mortgage or, if required,
         has been obtained and is in the related Mortgage File,

                       (iii) if the prior mortgage has a negative amortization,
         the Combined Loan-to-Value Ratio was determined using the maximum loan
         amount of such prior mortgage,

                       (iv) the related first mortgage loan encumbering the
         related Mortgaged Property does not have a mandatory future advance
         provision,

                                       21
<PAGE>

                       (v) the Mortgage Loans conform in all material respects
         to the description thereof in the Prospectus Supplement; and

                       (vi) No more than 12.98% (by Principal Balance) of the
         Mortgage Loans are secured by Mortgages that are second liens.

                  (tt) [Reserved]

                  (uu) To the best of the Unaffiliated Seller's and the
Originators' knowledge, no error, omission, misrepresentation, negligence, fraud
or similar occurrence with respect to a Mortgage Loan has taken place on the
part of any person, including without limitation the Mortgagor, any appraiser,
any builder or developer, or any other party involved in the origination of the
Mortgage Loan or in the application of any insurance in relation to such
Mortgage Loan;

                  (vv) Each Mortgaged Property is in compliance with all
environmental laws, ordinances, rules, regulations and orders of federal, state
or governmental authorities relating thereto. No hazardous material has been or
is incorporated in, stored on or under (other than properly stored materials
used for reasonable residential purposes), released from, treated on,
transported to or from, or disposed of on or from, any Mortgaged Property such
that, under applicable law (A) any such hazardous material would be required to
be eliminated before the Mortgaged Property could be altered, renovated,
demolished or transferred, or (B) the owner of the Mortgaged Property, or the
holder of a security interest therein, could be subjected to liability for the
removal of such hazardous material or the elimination of the hazard created
thereby. Neither the Unaffiliated Seller nor any Mortgagor has received
notification from any federal, state or other governmental authority relating to
any hazardous materials on or affecting the Mortgaged Property or to any
potential or known liability under any environmental law arising from the
ownership or operation of the Mortgaged Property. For the purposes of this
subsection, the term "hazardous materials" shall include, without limitation,
gasoline, petroleum products, explosives, radioactive materials, polychlorinated
biphenyls or related or similar materials, asbestos or any material containing
asbestos, lead, lead-based paint and any other substance or material as may be
defined as a hazardous or toxic substance by any federal, state or local
environmental law, ordinance, rule, regulation or order, including, without
limitation, CERCLA, the Clean Air Act, the Clean Water Act, the Resource
Conservation and Recovery Act, the Toxic Substances Control Act and any
regulations promulgated pursuant thereto;

                  (ww) With respect to any business purpose loan, the related
Mortgage Note contains an acceleration clause, accelerating the maturity date
under the Mortgage Note to the date the individual guarantying such loan, if
any, becomes subject to any bankruptcy, insolvency, reorganization, moratorium,
or other similar laws affecting the enforcement of creditors' rights generally;

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

                  (yy) Except for 0.25% (by Principal Balance) of the Mortgage
Loans, which may have an initial LTV ratio range of up to 100.00%, no Mortgage
Loans have initial LTV ratios greater than 90.00%;

                  (zz) No more than 9.30% (by Principal Balance) of the Mortgage
Loans are loans the proceeds of which are to be used for business purposes;

                                       22
<PAGE>

                  (aaa) At least 91.21% (by Principal Balance) of the Mortgage
Loans are secured exclusively by Owner Occupied Mortgaged Property;

                  (bbb) To the extent that a credit score was obtained, the
weighted average FICO score (by Principal Balance) for the Mortgage Loans is at
least 591, not more than 7.00% (by Principal Balance) of the Mortgage Loans have
FICO scores that are less than 500 and at least 95.00% (by Principal Balance) of
the Mortgage Loans have FICO scores;

                  (ccc) The Mortgage Loans have a weighted average CLTV (by
Principal Balance) of not more than 76.26% and no more than 44.12% (by Principal
Balance) of the Mortgage Loans have a CLTV greater than 80.00%;

                  (ddd) No more than 10.83% (by Principal Balance) of the
Mortgage Loans are made to limited or no documentation borrowers;

                  (eee) No more than 10.00% (by Principal Balance) of the
Mortgage Loans have been originated by a party other than an Originator;

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

                  (ggg) No more than 1.00% (by Principal Balance ) of the
Mortgage Loans consist of balloon Mortgage Loans that mature within 10 years of
the date of origination;

                  (hhh) No Mortgage Loan has a Principal Balance greater than
$654,135.38;

                  (iii) At least 76.52% (by Principal Balance) of the Mortgage
Loans are secured by a single-family detached home, an individual unit in a
planned unit development or a townhouse; and

                  (jjj) No more than 1.21% (by Principal Balance) of the
Mortgage Loans are secured by manufactured homes.

                  Section 3.04. Representations and Warranties of the Depositor.
The Depositor hereby represents, warrants and covenants to the Unaffiliated
Seller, as of the date of execution of this Agreement and the Closing Date,
that:

                  (a) The Depositor is a corporation duly organized, validly
existing and in good standing under the laws of the State of Delaware;

                  (b) The Depositor has the corporate power and authority to
purchase each Mortgage Loan and to execute, deliver and perform, and to enter
into and consummate all the transactions contemplated by this Agreement;

                  (c) This Agreement has been duly and validly authorized,
executed and delivered by the Depositor, and, assuming the due authorization,
execution and delivery hereof by the Unaffiliated Seller and the Originators,
constitutes the legal, valid and binding agreement of the Depositor, enforceable
against the Depositor in accordance with its terms, except as such enforcement
may be limited by bankruptcy, insolvency, reorganization, moratorium or other
similar laws relating to or affecting the rights of creditors generally, and by
general equity principles (regardless of whether such enforcement is considered
in a proceeding in equity or at law);

                                       23
<PAGE>

                  (d) No consent, approval, authorization or order of or
registration or filing with, or notice to, any governmental authority or court
is required for the execution, delivery and performance of or compliance by the
Depositor with this Agreement or the consummation by the Depositor of any of the
transactions contemplated hereby, except such as have been made on or prior to
the Closing Date;

                  (e) The Depositor has filed or will file the Prospectus and
Prospectus Supplement with the Commission in accordance with Rule 424(b) under
the Securities Act; and

                  (f) None of the execution and delivery of this Agreement, the
purchase of the Mortgage Loans from the Unaffiliated Seller, the consummation of
the other transactions contemplated hereby, or the fulfillment of or compliance
with the terms and conditions of this Agreement, (i) conflicts or will conflict
with the charter or bylaws of the Depositor or conflicts or will conflict with
or results or will result in a breach of, or constitutes or will constitute a
default or results or will result in an acceleration under, any term, condition
or provision of any indenture, deed of trust, contract or other agreement or
other instrument to which the Depositor is a party or by which it is bound and
which is material to the Depositor, or (ii) results or will result in a
violation of any law, rule, regulation, order, judgment or decree of any court
or governmental authority having jurisdiction over the Depositor.

                  Section 3.05. Repurchase Obligation for Defective
Documentation and for Breach of a Representation or Warranty.

                  (a) Each of the representations and warranties contained in
Sections 3.01, 3.02 and 3.03 shall survive the purchase by the Depositor of the
Mortgage Loans and the subsequent transfer thereof by the Depositor to the
Trustee and shall continue in full force and effect, notwithstanding any
restrictive or qualified endorsement on the Mortgage Notes and notwithstanding
subsequent termination of this Agreement or the Pooling and Servicing Agreement.

                  (b) With respect to any representation or warranty contained
in Sections 3.01 or 3.03 hereof that is made to the best of the Originators'
knowledge or contained in Sections 3.02 or 3.03 hereof that is made to the best
of the Unaffiliated Seller's knowledge, if it is discovered by the Servicer, the
Collateral Agent, any Subservicer, the Trustee, the Certificate Insurer or any
Certificateholder that the substance of such representation and warranty was
inaccurate as of the Closing Date and such inaccuracy materially and adversely
affects the value of the related Mortgage Loan, then notwithstanding the
Originators' or the Unaffiliated Seller's lack of knowledge with respect to the
inaccuracy at the time the representation or warranty was made, such inaccuracy
shall be deemed a breach of the applicable representation or warranty. Upon
discovery by the Originators, the Unaffiliated Seller, the Collateral Agent, the
Servicer, any Subservicer, the Trustee, the Certificate Insurer or any
Certificateholder of a breach of any of such representations and warranties
which materially and adversely affects the value of Mortgage Loans or the
interest of the Certificateholders, or which materially and adversely affects
the interests of the Certificate Insurer or the Certificateholders in the
related Mortgage Loan in the case of a representation and warranty relating to a
particular Mortgage Loan (notwithstanding that such representation and warranty
was made to the Originators' or the Unaffiliated Seller's best knowledge), the
party discovering such breach shall give pursuant to this Section 3.05(b) and
pursuant to Section 3.03 of the Pooling and Servicing Agreement shall promptly
(and in any event of discovery, five (5) Business Days) give written notice to
the others. Subject to the last paragraph of this Section 3.05(b), within sixty
(60) days of the earlier of its discovery or its receipt of notice of any breach
of a representation or warranty, the Unaffiliated Seller and the Originators
shall (a) promptly cure such breach in all material respects, or (b) purchase
such Mortgage Loan at a purchase price equal to the Principal Balance of such
Mortgage Loan as of the date of purchase, plus the greater of (i) all accrued
and unpaid interest on such Principal Balance and (ii) 30 days' interest on such
Principal Balance, computed at the Mortgage Interest

                                       24
<PAGE>

Rate, net of the Servicing Fee if the Unaffiliated Seller is the Servicer, plus
the amount of any unreimbursed Servicing Advances made by the Servicer with
respect to such Mortgage Loan, or (c) remove such Mortgage Loan from the Trust
Fund (in which case it shall become a Deleted Mortgage Loan) and substitute one
or more Qualified Substitute Mortgage Loans; provided, that, such substitution
is effected not later than the date which is 2 years after the Startup Day or at
such later date, if the Trustee and the Certificate Insurer receive an Opinion
of Counsel to the effect set forth below in this Section. Any such substitution
shall be accompanied by payment by the Unaffiliated Seller of the Substitution
Adjustment, if any, to be deposited in the Collection Account pursuant to the
Pooling and Servicing Agreement.

                  The Originators shall cooperate with the Unaffiliated Seller
to cure any breach and shall reimburse the Unaffiliated Seller for the costs and
expenses related to any cure, substitution (including any Substitution
Adjustment) or repurchase incurred by the Unaffiliated Seller pursuant to this
Section 3.05.

                  (c) As to any Deleted Mortgage Loan for which the Unaffiliated
Seller or an Originator substitutes a Qualified Substitute Mortgage Loan or
Loans, the Unaffiliated Seller or such Originator shall effect such substitution
by delivering to the Trustee and the Certificate Insurer a certification in the
form attached to the Pooling and Servicing Agreement as Exhibit H, executed by a
Servicing Officer and the documents described in Section 2.06(d) for such
Qualified Substitute Mortgage Loan or Loans. Pursuant to the Pooling and
Servicing Agreement, upon receipt by the Trustee and the Collateral Agent of a
certification of a Servicing Officer of such substitution or purchase and, in
the case of a substitution, upon receipt by the Collateral Agent, on behalf of
the Trustee, of the related Trustee's Mortgage File, and the deposit of certain
amounts in the Certificate Account pursuant to Section 2.07(b) of the Pooling
and Servicing Agreement (which certification shall be in the form of Exhibit H
to the Pooling and Servicing Agreement), the Collateral Agent, on behalf of the
Trustee shall be required to release to the Servicer for release to the
Unaffiliated Seller the related Trustee's Mortgage File and shall be required to
execute, without recourse, and deliver such instruments of transfer furnished by
the Unaffiliated Seller as may be necessary to transfer such Mortgage Loan to
the Unaffiliated Seller or such Originator.

                  (d) Pursuant to the Pooling and Servicing Agreement, the
Servicer shall deposit in the Certificate Account all payments received in
connection with such Qualified Substitute Mortgage Loan or Loans after the date
of such substitution. Monthly Payments received with respect to Qualified
Substitute Mortgage Loans on or before the date of substitution will be retained
by the Unaffiliated Seller. The Trust Fund will own all payments received on the
Deleted Mortgage Loan on or before the date of substitution, and the
Unaffiliated Seller or the Originator, as applicable, shall thereafter be
entitled to retain all amounts subsequently received in respect of such Deleted
Mortgage Loan. Pursuant to the Pooling and Servicing Agreement, the Servicer
shall be required to give written notice to the Trustee, the Collateral Agent
and the Certificate Insurer that such substitution has taken place and shall
amend the Mortgage Loan Schedule to reflect the removal of such Deleted Mortgage
Loan from the terms of the Pooling and Servicing Agreement and the substitution
of the Qualified Substitute Mortgage Loan. The parties hereto agree to amend the
Mortgage Loan Schedule accordingly. Upon such substitution, such Qualified
Substitute Mortgage Loan or Loans shall be subject to the terms of the Pooling
and Servicing Agreement and this Agreement in all respects, and the Unaffiliated
Seller shall be deemed to have made with respect to such Qualified Substitute
Mortgage Loan or Loans, as of the date of substitution, the representations and
warranties set forth in Sections 3.02 and 3.03 herein. On the date of such
substitution, the Unaffiliated Seller will remit to the Servicer and pursuant to
the Pooling and Servicing Agreement the Servicer will deposit into the
Certificate Account an amount equal to the Substitution Adjustment, if any.

                                       25
<PAGE>

                  (e) With respect to any Mortgage Loan that has been converted
to an REO Mortgage Loan, all references in this Section 3.05 or Section 2.06 to
"Mortgage Loan" shall be deemed to refer to such REO Mortgage Loan. With respect
to any Mortgage Loan that the Originator or Unaffiliated Seller is required to
repurchase that is or becomes a Liquidated Mortgage Loan, in lieu of
repurchasing such Mortgage Loan, the Originator or Unaffiliated Seller shall
deposit into the related Certificate Account, pursuant to Section 6.01 of the
Pooling and Servicing Agreement an amount equal to the amount of the Liquidated
Loan Loss, if any, incurred in connection with the liquidation of such Mortgage
Loan within the same time period in which the Originator or Unaffiliated Seller
would have otherwise been required to repurchase such Mortgage Loan.

                  (f) It is understood and agreed that the obligations of the
Unaffiliated Seller and the Originator set forth in Section 2.06 and this
Section 3.05 to cure, purchase or substitute for a defective Mortgage Loan as
provided in Section 2.06 and this Section 3.05 constitute the sole remedies of
the Depositor, the Trustee, the Certificate Insurer and the Certificateholders
respecting a breach of the foregoing representations and warranties.

                  (g) Any cause of action against the Unaffiliated Seller or an
Originator relating to or arising out of the breach of any representations and
warranties or covenants made in Sections 2.06, 3.02 or 3.03 shall accrue as to
any Mortgage Loan upon (i) discovery of such breach by any party and notice
thereof to the Unaffiliated Seller or such Originator, (ii) failure by the
Unaffiliated Seller or such Originator to cure such breach or purchase or
substitute such Mortgage Loan as specified above, and (iii) demand upon the
Unaffiliated Seller or such Originator by the Trustee for all amounts payable in
respect of such Mortgage Loan.

                  (h) Notwithstanding any contrary provision of this Agreement,
with respect to any Mortgage Loan which is not in default or as to which no
default is imminent, no purchase, or substitution pursuant to Section 2.06(b) or
this Section 3.05 shall be made unless the Unaffiliated Seller provides to the
Trustee and the Certificate Insurer an Opinion of Counsel to the effect that
such purchase or substitution would not (i) result in the imposition of taxes on
"prohibited transactions" of the REMIC Trust, as defined in Section 860F of the
Code or a tax on contributions to the REMIC Trust under the REMIC Provisions, or
(ii) cause the REMIC Fund to fail to qualify as a REMIC at any time that any
Certificates are outstanding. Any Mortgage Loan as to which purchase or
substitution was delayed pursuant to this paragraph shall be purchased or
substituted (subject to compliance with Section 2.06 and this Section 3.05) upon
the earlier of (a) the occurrence of a default or imminent default with respect
to such loan and (b) receipt by the Trustee and the Certificate Insurer of an
Opinion of Counsel to the effect that such purchase or substitution will not
result in the events described in clauses (i) and (ii) of the preceding
sentence.

                  (i) Pursuant to the Pooling and Servicing Agreement, upon
discovery by the Unaffiliated Seller, the Servicer, the Trustee, the Certificate
Insurer or any Certificateholder that any Mortgage Loan does not constitute a
Qualified Mortgage, the party discovering such fact shall promptly (and in any
event within 5 days of the discovery) give written notice thereof to the other
parties. In connection therewith, the Unaffiliated Seller or the related
Originator shall repurchase or substitute a Qualified Substitute Mortgage Loan
for the affected Mortgage Loan within ninety (90) days of the earlier of such
discovery by any of the foregoing parties, or the Trustee's or the Unaffiliated
Seller's receipt of notice, in the same manner as it would a Mortgage Loan for a
breach of representation or warranty contained in Sections 3.02 or 3.03.
Pursuant to the Pooling and Servicing Agreement the Trustee shall reconvey to
the Unaffiliated Seller or the related Originator the Mortgage Loan to be
released pursuant hereto in the same manner, and on the same terms and
conditions, as it would a Mortgage Loan repurchased for breach of a
representation or warranty contained in Sections 3.02 or 3.03.

                                       26
<PAGE>

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

                  (k) Each of the Originators and the Unaffiliated Seller shall
be jointly and severally responsible for any repurchase, cure or substitution
obligation of any of the Originators or the Unaffiliated Seller under this
Agreement and the Pooling and Servicing Agreement.

                  (l) The Unaffiliated Seller and the Originators hereby agree,
jointly and severally, to indemnify the Trustee, the Depositor, the
Certificateholders and the Certificate Insurer and their successors, assigns,
agents and servants (collectively, the "Indemnified Parties") from and against,
any and all liabilities, obligations, losses, damages, taxes, claims, actions
and suits, and any and all reasonable out of pocket costs, expenses and
disbursements (including reasonable legal fees and expenses) of any kind and
nature whatsoever (collectively, "Expenses") which may at any time be imposed
on, incurred by, or asserted against any Indemnified Party in any way relating
to or arising out of a breach by the Unaffiliated Seller or the related
Originator of the representations or warranties in Article III hereof. The
indemnities contained in this Section 3.05 shall survive the resignation or
termination of the Trustee or the termination of this Agreement.

                  Section 3.06. Limited Purpose and Corporate Separateness of
the Unaffiliated Seller.

                  (a) The Unaffiliated Seller covenants to the Trustee, the
Depositor, the Servicer, the Certificateholders and the Certificate Insurer as
follows:

                       (i) The Unaffiliated Seller shall not engage in any
         business or activity of any kind or enter into any transaction or
         indenture, mortgage, instrument, agreement contract, lease or other
         undertaking other than the transactions contemplated and authorized by
         this Agreement. Without limiting the generality of the foregoing, the
         Unaffiliated Seller shall not create, incur, guarantee, assume or
         suffer to exist any indebtedness or other liabilities, whether direct
         or contingent, other than (i) as a result of the endorsement of
         negotiable instruments for deposit or collection or similar
         transactions in the ordinary course of business, (ii) the incurrence of
         obligations under this Agreement and the Insurance and Indemnity
         Agreement and (iii) the incurrence of operating expenses in the
         ordinary course of business permitted under this Agreement;

                       (ii) The Unaffiliated Seller shall not amend its
         certificate of incorporation or by-laws in any respect without the
         prior written consent of the Certificate Insurer;

                       (iii) The Unaffiliated Seller has been formed for, and
         shall limit its activities to, the following purposes: (i) to purchase
         the Mortgage Loans from the Originators and to sell such Mortgage Loans
         to the Depositor, in each case pursuant to this Agreement; (ii) in the
         event of the occurrence of a breach of certain representations and
         warranties, to cause the substitution of repurchase of the related
         Mortgage Loans by the Originators; (iii) to enter into and perform its
         obligations under this Agreement and the Insurance and Indemnity
         Agreement and (iv) to engage in those activities that are necessary,
         suitable of convenient to accomplish the foregoing or are incidental
         thereto or connected therewith;

                                       27
<PAGE>

                       (iv) The Unaffiliated Seller shall not incur, assume or
         guarantee any indebtedness or other liabilities except under the
         provisions of this Agreement and the Insurance and Indemnity Agreement;

                       (v) The Unaffiliated Seller shall maintain separate
         corporate records and books of account from those of the Originators or
         any of their Affiliates;

                       (vi) The Unaffiliated Seller shall not become involved in
         the day to day management of any other Person, and it shall operate so
         as not to be substantively consolidated with any other Person;

                       (vii) The Unaffiliated Seller shall maintain its assets
         separate from those of the Originators or any of their Affiliates;

                       (viii) The Unaffiliated Seller shall conduct
         correspondence in its own name on its own stationery;

                       (ix) The Unaffiliated Seller shall not act as an agent of
         any other entity or Person except pursuant to contractual documents
         indicating such capacity;

                       (x) The Unaffiliated Seller shall take all other actions
         necessary on its part in order to ensure that all of the facts and
         assumptions set forth in the opinion issued by Dewey Ballantine LLP in
         connection with the closing or initial purchase under this Agreement
         and relating to true sale and substantive consolidation issues, and in
         the certificates accompanying such opinion, remain true and correct at
         all times; and

                       (xi) The Unaffiliated Seller shall not undertake any
         activity which is not a permitted activity for a qualified special
         purpose entity under current accounting literature.

                  (b) The Originators will operate in such a manner that the
Unaffiliated Seller would not be substantively consolidated in the trust estate
of the Originators, ABFS or any of their respective Affiliates (each an "ABFS
Company") and the separate existence of Unaffiliated Seller would not be
disregarded in the event of a bankruptcy or insolvency of any ABFS Company.
Without limiting the generality of the foregoing and in addition to the other
covenants set forth herein, each Originator shall take, and shall cause each of
their Affiliates to take, all actions required on its part to ensure that:

                       (i) the Unaffiliated Seller shall conduct its business
         solely in its own name and make all written and oral communications
         solely in its name;

                       (ii) the Unaffiliated Seller shall provide for its
         expenses and liabilities from its own funds;

                       (iii) the Unaffiliated Seller shall not be contractually
         liable for the payment of any liability of any ABFS Company nor
         generally hold its assets nor creditworthiness as being available for
         the payment of any liability of any ABFS Company;

                       (iv) the Unaffiliated Seller shall maintain an
         arm's-length relationship with each other ABFS Company;

                                       28
<PAGE>

                       (v) the Unaffiliated Seller shall not transfer any assets
         between itself and any other ABFS Company without fair consideration or
         with the intent to hinder, delay or defraud the creditors of any other
         ABFS Company; and

                       (vi) any consolidated financial statements of any ABFS
         Company that include the Unaffiliated Seller have notes clearly stating
         that the Unaffiliated Seller is a corporation separate and distinct
         from each of the other ABFS Companies and that the assets of the
         Unaffiliated Seller will be available first and foremost to satisfy the
         claims of the creditors of the Unaffiliated Seller.

                                   ARTICLE IV

                             THE UNAFFILIATED SELLER

                  Section 4.01. Covenants of the Originators and the
Unaffiliated Seller. Each of the Originators and the Unaffiliated Seller
covenants to the Depositor as follows:

                  (a) The Originators and the Unaffiliated Seller shall
cooperate with the Depositor and the firm of independent certified public
accountants retained with respect to the issuance of the Certificates in making
available all information and taking all steps reasonably necessary to permit
the accountants' letters required hereunder to be delivered within the times set
for delivery herein.

                  (b) The Unaffiliated Seller agrees to satisfy or cause to be
satisfied on or prior to the Closing Date, all of the conditions to the
Depositor's obligations set forth in Section 5.01 hereof that are within the
Unaffiliated Seller's (or its agents') control.

                  (c) The Originators and the Unaffiliated Seller hereby agree
to do all acts, transactions, and things and to execute and deliver all
agreements, documents, instruments, and papers by and on behalf of the
Originators or the Unaffiliated Seller as the Depositor or its counsel may
reasonably request in order to consummate the transfer of the Mortgage Loans to
the Depositor and the subsequent transfer thereof to the Trustee, and the
rating, issuance and sale of the Certificates.

                  Section 4.02. Merger or Consolidation. Each of the Originators
will keep in full effect its existence, rights and franchises as a corporation
and will obtain and preserve its qualification to do business as a foreign
corporation, in each jurisdiction necessary to protect the validity and
enforceability of this Agreement or any of the Mortgage Loans and to perform its
duties under this Agreement. Any Person into which any of the Originators or the
Unaffiliated Seller may be merged or consolidated, or any corporation resulting
from any merger, conversion or consolidation to which the Originators shall be a
party, or any Person succeeding to the business of the Originators, shall be
approved by the Certificate Insurer which approval shall not be unreasonably
withheld. If the approval of the Certificate Insurer is not required, the
successor shall be an established mortgage loan servicing institution that is a
Permitted Transferee and in all events shall be the successor of the Originators
without the execution or filing of any paper or any further act on the part of
any of the parties hereto, anything herein to the contrary notwithstanding. The
Originators shall send notice of any such merger or consolidation to the Trustee
and the Certificate Insurer.

                  Section 4.03. Costs. In connection with the transactions
contemplated under this Agreement and the Pooling and Servicing Agreement, the
Unaffiliated Seller shall promptly pay (or shall promptly reimburse the
Depositor to the extent that the Depositor shall have paid or otherwise
incurred): (a) the fees and disbursements of the Depositor's (100% of fees in
excess of $30,000 but not to exceed $65,000), the Unaffiliated Seller's and the
Originators' counsel; (b) the fees of S&P and Moody's; (c) any

                                       29
<PAGE>

of the fees of the Trustee and the fees and disbursements of the Trustee's
counsel; (d) expenses incurred in connection with printing the Prospectus, the
Prospectus Supplement, any amendment or supplement thereto, any preliminary
prospectus and the Certificates; (e) fees and expenses relating to the filing of
documents with the Securities and Exchange Commission (including without
limitation periodic reports under the Exchange Act); (f) the shelf registration
amortization fee of 0.04% of the Class A Certificate Principal Balance on the
Closing Date, paid in connection with the issuance of Certificates; (g) the fees
and disbursements for the accountants for the Originators; and (h) all of the
initial expenses of the Certificate Insurer including, without limitation, legal
fees and expenses, accountant fees and expenses and expenses in connection with
due diligence conducted on the Mortgage Files but not including the initial
premium paid to the Certificate Insurer. For the avoidance of doubt, the parties
hereto acknowledge that it is the intention of the parties that the Depositor
shall not pay any of the Trustee's fees and expenses in connection with the
transactions contemplated by the Pooling and Servicing Agreement. All other
costs and expenses in connection with the transactions contemplated hereunder
shall be borne by the party incurring such expenses.

                  Section 4.04. Indemnification. (a) The Originators, the
Servicer and the Unaffiliated Seller, jointly and severally, agree

                       (i) to indemnify and hold harmless the Depositor, each of
         its directors, each of its officers who have signed the Registration
         Statement, and each of its directors and each person or entity who
         controls the Depositor or any such person, within the meaning of
         Section 15 of the Securities Act, against any and all losses, claims,
         damages or liabilities, joint and several, to which the Depositor or
         any such person or entity may become subject, under the Securities Act
         or otherwise, and will reimburse the Depositor and each such
         controlling person for any legal or other expenses incurred by the
         Depositor or such controlling person in connection with investigating
         or defending any such loss, claim, damage, liability or action, insofar
         as such losses, claims, damages or liabilities (or actions in respect
         thereof) arise out of or are based upon any untrue statement or alleged
         untrue statement of any material fact contained in the Prospectus
         Supplement or any amendment or supplement to the Prospectus Supplement
         or the omission or the alleged omission to state therein a material
         fact required to be stated therein or necessary to make the statements
         in the Prospectus Supplement or any amendment or supplement to the
         Prospectus Supplement approved in writing by the Originators or the
         Unaffiliated Seller, in light of the circumstances under which they
         were made, not misleading, but only to the extent that such untrue
         statement or alleged untrue statement or omission or alleged omission
         relates to the information contained in the Prospectus Supplement
         referred to in Section 3.01(d). This indemnity agreement will be in
         addition to any liability which the Originators and the Unaffiliated
         Seller may otherwise have; and

                       (ii) to indemnify and to hold the Depositor harmless
         against any and all claims, losses, penalties, fines, forfeitures,
         legal fees and related costs, judgments, and any other costs, fees and
         expenses that the Depositor may sustain in any way related to the
         failure of any of the Originators or the Unaffiliated Seller to perform
         its duties in compliance with the terms of this Agreement. The
         Originators or the Unaffiliated Seller shall immediately notify the
         Depositor if a claim is made by a third party with respect to this
         Agreement, and the Originators or the Unaffiliated Seller shall assume
         the defense of any such claim and pay all expenses in connection
         therewith, including reasonable counsel fees, and promptly pay,
         discharge and satisfy any judgment or decree which may be entered
         against the Depositor in respect of such claim. Pursuant to the Pooling
         and Servicing Agreement, the Trustee shall reimburse the Unaffiliated
         Seller in accordance with the Pooling and Servicing Agreement for all
         amounts advanced by the Unaffiliated Seller pursuant to the preceding
         sentence except when the claim relates directly to

                                       30
<PAGE>

         the failure of the Unaffiliated Seller to perform its duties in
         compliance with the terms of this Agreement.

                  (b) The Depositor agrees to indemnify and hold harmless each
of the Originators and the Unaffiliated Seller, each of their respective
directors and each person or entity who controls the Originators or the
Unaffiliated Seller or any such person, within the meaning of Section 15 of the
Securities Act, against any and all losses, claims, damages or liabilities,
joint and several, to which the Originators or the Unaffiliated Seller or any
such person or entity may become subject, under the Securities Act or otherwise,
and will reimburse the Originators and the Unaffiliated Seller and any such
director or controlling person for any legal or other expenses incurred by such
party or any such director or controlling person in connection with
investigating or defending any such loss, claim, damage, liability or action,
insofar as such losses, claims, damages or liabilities (or actions in respect
thereof) arise out of or are based upon any untrue statement or alleged untrue
statement of any material fact contained in the Registration Statement, the
Prospectus, the Prospectus Supplement, any amendment or supplement to the
Prospectus or the Prospectus Supplement or the omission or the alleged omission
to state therein a material fact required to be stated therein or necessary to
make the statements therein, in light of the circumstances under which they were
made, not misleading, but only to the extent that such untrue statement or
alleged untrue statement or omission or alleged omission is other than a
statement or omission relating to the information set forth in subsection (a)(i)
of this Section 4.04; provided, however, that in no event shall the Depositor be
liable to the Unaffiliated Seller under this paragraph (b) in an amount in
excess of the Depositor's resale profit or the underwriting fee on the sale of
the Certificates. This indemnity agreement will be in addition to any liability
which the Depositor may otherwise have.

                  (c) Promptly after receipt by an indemnified party under this
Section 4.04 of notice of the commencement of any action, such indemnified party
will, if a claim in respect thereof is to be made against the indemnifying party
under this Section 4.04, notify the indemnifying party in writing of the
commencement thereof, but the omission to so notify the indemnifying party will
not relieve the indemnifying party from any liability which the indemnifying
party may have to any indemnified party hereunder except to the extent such
indemnifying party has been prejudiced thereby. In case any such action is
brought against any indemnified party, and it notifies the indemnifying party of
the commencement thereof, the indemnifying party will be entitled to participate
therein and, to the extent that it may elect by written notice delivered to the
indemnified party promptly after receiving the aforesaid notice from such
indemnified party, to assume the defense thereof with counsel reasonably
satisfactory to such indemnified party. After notice from the indemnifying party
to such indemnified party of its election to assume the defense thereof, the
indemnifying party will not be liable to such indemnified party under this
Section 4.04 for any legal or other expenses subsequently incurred by such
indemnified party in connection with the defense thereof other than reasonable
costs of investigation; provided, however, if the defendants in any such action
include both the indemnified party and the indemnifying party and the
indemnified party shall have reasonably concluded that there may be legal
defenses available to it that are different from or additional to those
available to the indemnifying party, the indemnified party or parties shall have
the right to select separate counsel to assert such legal defenses and to
otherwise participate in the defense of such action on behalf of such
indemnified party or parties. The indemnifying party shall not be liable for the
expenses of more than one separate counsel.

                  (d) In order to provide for just and equitable contribution in
circumstances in which the indemnity agreement provided for in the preceding
parts of this Section 4.04 is for any reason held to be unavailable to or
insufficient to hold harmless an indemnified party under subsection (a) or
subsection (b) of this Section 4.04 in respect of any losses, claims, damages or
liabilities (or actions in respect thereof) referred to therein, the
indemnifying party shall contribute to the amount paid or payable by the
indemnified party as a result of such losses, claims, damages or liabilities (or
actions in respect thereof)

                                       31
<PAGE>

subject to the limits set forth in subsection (a) and subsection (b) of this
Section 4.04; provided, however, that no person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Securities Act)
shall be entitled to a contribution from any person who was not guilty of such
fraudulent misrepresentation. In determining the amount of contribution to which
the respective parties are entitled, there shall be considered the relative
benefits received by the Originators and the Unaffiliated Seller on the one
hand, and the Depositor on the other, the Originators', the Unaffiliated
Seller's and the Depositor's relative knowledge and access to information
concerning the matter with respect to which the claim was asserted, the
opportunity to correct and prevent any statement or omission, and any other
equitable considerations appropriate in the circumstances. The Originators, the
Unaffiliated Seller and the Depositor agree that it would not be equitable if
the amount of such contribution were determined by pro rata or per capita
allocation. For purposes of this Section 4.04, each director of the Depositor,
each officer of the Depositor who signed the Registration Statement, and each
person, if any who controls the Depositor within the meaning of Section 15 of
the Securities Act, shall have the same rights to contribution as the Depositor,
and each director of the Originators or the Unaffiliated Seller, and each
person, if any who controls the Originators or the Unaffiliated Seller within
the meaning of Section 15 of the Securities Act, shall have the same rights to
contribution as the Originators and the Unaffiliated Seller.

                                   ARTICLE V

                              CONDITIONS OF CLOSING

                  Section 5.01. Conditions of Depositor's Obligations. The
obligations of the Depositor to purchase the Mortgage Loans will be subject to
the satisfaction on the Closing Date of the following conditions. Upon payment
of the purchase price for the Mortgage Loans, such conditions shall be deemed
satisfied or waived.

                  (a) Each of the obligations of the Unaffiliated Seller
required to be performed by it on or prior to the Closing Date pursuant to the
terms of this Agreement shall have been duly performed and complied with and all
of the representations and warranties of the Unaffiliated Seller and the
Originators under this Agreement shall be true and correct as of the Closing
Date and no event shall have occurred which, with notice or the passage of time,
would constitute a default under this Agreement, and the Depositor shall have
received a certificate to the effect of the foregoing signed by an authorized
officer of the Unaffiliated Seller and the Originators.

                  (b) The Depositor shall have received a letter dated the date
of this Agreement, in form and substance acceptable to the Depositor and its
counsel, prepared by Deloitte & Touche LLP, independent certified public
accountants, regarding the numerical information contained in the Prospectus
Supplement including, but not limited to the information under the captions
"Prepayment and Yield Considerations" and "The Mortgage Loan Pool" regarding any
numerical information in any marketing materials relating to the Certificates
and regarding any other information as reasonably requested by the Depositor.

                  (c) The Mortgage Loans will be acceptable to the Depositor, in
its sole reasonable discretion.

                  (d) The Depositor shall have received the following additional
closing documents, in form and substance reasonably satisfactory to the
Depositor and its counsel:

                                       32
<PAGE>

                       (i) the Mortgage Loan Schedule;

                       (ii) the Pooling and Servicing Agreement dated as of
         June 1, 2001 and the Underwriting Agreement dated as of June 8, 2001
         between the Depositor and the Representative and all documents required
         thereunder, duly executed and delivered by each of the parties thereto
         other than the Depositor;

                       (iii) officer's certificates of an officer of each of the
         Originators and the Unaffiliated Seller, dated as of the Closing Date,
         and attached thereto resolutions of the board of directors and a copy
         of the charter and by-laws;

                       (iv) copy of each of the Originators and the Unaffiliated
         Seller's charter and all amendments, revisions, and supplements
         thereof, certified by a secretary of each entity;

                       (v) an opinion of the counsel for the Originators and the
         Unaffiliated Seller as to various corporate matters in a form
         acceptable to the Depositor, its counsel, the Certificate Insurer, S&P
         and Moody's (it being agreed that the opinion shall expressly provide
         that the Trustee shall be entitled to rely on the opinion);

                       (vi) opinions of counsel for the Unaffiliated Seller, in
         forms acceptable to the Depositor, its counsel, the Certificate
         Insurer, S&P and Moody's as to such matters as shall be required for
         the assignment of a rating to the Class A Certificates of "AAA" by S&P,
         and Aaa by Moody's (it being agreed that such opinions shall expressly
         provide that the Trustee shall be entitled to rely on such opinions);

                       (vii) a letter from Moody's to the effect that it has
         assigned a rating of Aaa to the Class A Certificates;

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

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

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

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

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

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

                                       33
<PAGE>

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

                  (f) All proceedings in connection with the transactions
contemplated by this Agreement and all documents incident hereto shall be
satisfactory in form and substance to the Depositor and its counsel.

                  (g) The Unaffiliated Seller shall have furnished the Depositor
with such other certificates of its officers or others and such other documents
or opinions as the Depositor or its counsel may reasonably request.

                  Section 5.02. Conditions of Unaffiliated Seller's Obligations.
The obligations of the Unaffiliated Seller under this Agreement shall be subject
to the satisfaction, on the Closing Date, of the following conditions:

                  (a) Each of the obligations of the Depositor required to be
performed by it at or prior to the Closing Date pursuant to the terms of this
Agreement shall have been duly performed and complied with and all of the
representations and warranties of the Depositor contained in this Agreement
shall be true and correct as of the Closing Date and the Unaffiliated Seller
shall have received a certificate to that effect signed by an authorized officer
of the Depositor.

                  (b) The Unaffiliated Seller shall have received the following
additional documents:

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

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

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

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

                  (c) The Depositor shall have furnished the Unaffiliated Seller
with such other certificates of its officers or others and such other documents
to evidence fulfillment of the conditions set forth in this Agreement as the
Unaffiliated Seller may reasonably request.

                  Section 5.03. Termination of Depositor's Obligations. The
Depositor may terminate its obligations hereunder by notice to the Unaffiliated
Seller at any time before delivery of and payment of the purchase price for the
Mortgage Loans if: (a) any of the conditions set forth in Section 5.01 are not
satisfied when and as provided therein; (b) there shall have been the entry of a
decree or order by a court or agency or supervisory authority having
jurisdiction in the premises for the appointment of a conservator, receiver or
liquidator in any insolvency, readjustment of debt, marshalling of assets and
liabilities or similar proceedings of or relating to the Unaffiliated Seller, or
for the winding up or liquidation of the affairs of the Unaffiliated Seller; (c)
there shall have been the consent by the Unaffiliated Seller to the appointment
of a conservator or receiver or liquidator in any insolvency, readjustment of
debt, marshalling of assets and liabilities or similar proceedings of or
relating to the Unaffiliated Seller or of or relating to substantially all of
the property of the Unaffiliated Seller; (d) any

                                       34
<PAGE>

purchase and assumption agreement with respect to the Unaffiliated Seller or the
assets and properties of the Unaffiliated Seller shall have been entered into;
or (e) a Termination Event shall have occurred. The termination of the
Depositor's obligations hereunder shall not terminate the Depositor's rights
hereunder or its right to exercise any remedy available to it at law or in
equity.

                                   ARTICLE VI

                                  MISCELLANEOUS

                  Section 6.01. Notices. All demands, notices and communications
hereunder shall be in writing and shall be deemed to have been duly given if
personally delivered to or mailed by registered mail, postage prepaid, or
transmitted by telex or telegraph and confirmed by a similar mailed writing, if
to the Depositor, addressed to the Depositor at Bear Stearns Asset Backed
Securities, Inc., 245 Park Avenue, 4th Floor, New York, New York 10167,
Attention: Chief Counsel, or to such other address as the Depositor may
designate in writing to the Unaffiliated Seller and if to the Unaffiliated
Seller, addressed to the Unaffiliated Seller at ABFS 2001-2, Inc., Balapointe
Office Centre, 111 Presidential Boulevard, Suite 127, Bala Cynwyd, Pennsylvania
19004, Attention: Mr. Jeffrey M. Ruben, or to such other address as the
Unaffiliated Seller may designate in writing to the Depositor.

                  Section 6.02. Severability of Provisions. Any part, provision,
representation, warranty or covenant of this Agreement which is prohibited or
which is held to be void or unenforceable shall be ineffective to the extent of
such prohibition or unenforceability without invalidating the remaining
provisions hereof. Any part, provision, representation, warranty or covenant of
this Agreement which is prohibited or unenforceable or is held to be void or
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective
to the extent of such prohibition or unenforceability without invalidating the
remaining provisions hereof, and any such prohibition or unenforceability in any
jurisdiction as to any Mortgage Loan shall not invalidate or render
unenforceable such provision in any other jurisdiction. To the extent permitted
by applicable law, the parties hereto waive any provision of law which prohibits
or renders void or unenforceable any provision hereof.

                  Section 6.03. Agreement of Unaffiliated Seller. The
Unaffiliated Seller agrees to execute and deliver such instruments and take such
actions as the Depositor may, from time to time, reasonably request in order to
effectuate the purpose and to carry out the terms of this Agreement.

                  Section 6.04. Survival. The parties to this Agreement agree
that the representations, warranties and agreements made by each of them herein
and in any certificate or other instrument delivered pursuant hereto shall be
deemed to be relied upon by the other party hereto, notwithstanding any
investigation heretofore or hereafter made by such other party or on such other
party's behalf, and that the representations, warranties and agreements made by
the parties hereto in this Agreement or in any such certificate or other
instrument shall survive the delivery of and payment for the Mortgage Loans.

                  Section 6.05. Effect of Headings and Table of Contents. The
Article and Section headings herein and the Table of Contents are for
convenience only and shall not affect the construction hereof.

                  Section 6.06. Successors and Assigns. This Agreement shall
inure to the benefit of and be binding upon the parties hereto and their
respective successors and permitted assigns. Except as expressly permitted by
the terms hereof, this Agreement may not be assigned, pledged or hypothecated by
any party hereto to a third party without the written consent of the other party
to this Agreement and the

                                       35
<PAGE>

Certificate Insurer; provided, however, that the Depositor may assign its rights
hereunder without the consent of the Unaffiliated Seller.

                  Section 6.07. Confirmation of Intent; Grant of Security
Interest. It is the express intent of the parties hereto that the conveyance of
the Mortgage Loans by the Originators to the Unaffiliated Seller and by the
Unaffiliated Seller to the Depositor as contemplated by this Unaffiliated
Seller's Agreement be, and be treated for all purposes as, a sale of the
Mortgage Loans. It is, further, not the intention of the parties that such
conveyance be deemed a pledge of the Mortgage Loans by the Originators to the
Unaffiliated Seller or by the Unaffiliated Seller to the Depositor to secure a
debt or other obligation of the Originators or the Unaffiliated Seller, as the
case may be. However, in the event that, notwithstanding the intent of the
parties, the Mortgage Loans are held to continue to be property of the
Originators or the Unaffiliated Seller then (a) this Unaffiliated Seller's
Agreement shall also be deemed to be a security agreement within the meaning of
Articles 8 and 9 of the Uniform Commercial Code; (b) the transfer of the
Mortgage Loans provided for herein shall be deemed to be a grant by the
Originators to the Unaffiliated Seller and by the Unaffiliated Seller to the
Depositor of a security interest in all of such parties' right, title and
interest in and to the Mortgage Loans and all amounts payable on the Mortgage
Loans in accordance with the terms thereof and all proceeds of the conversion,
voluntary or involuntary, of the foregoing into cash, instruments, securities or
other property; (c) the possession by the Depositor of Mortgage Notes and such
other items of property as constitute instruments, money, negotiable documents
or chattel paper shall be deemed to be "possession by the secured party" for
purposes of perfecting the security interest pursuant to Section 9-305 of the
Uniform Commercial Code; and (d) notifications to persons holding such property,
and acknowledgments, receipts or confirmations from persons holding such
property, shall be deemed notifications to, or acknowledgments, receipts or
confirmations from, financial intermediaries, bailees or agents (as applicable)
of the Depositor for the purpose of perfecting such security interest under
applicable law. Any assignment of the interest of the Depositor pursuant to any
provision hereof shall also be deemed to be an assignment of any security
interest created hereby. The Originators, the Unaffiliated Seller and the
Depositor shall, to the extent consistent with this Unaffiliated Seller's
Agreement, take such actions as may be necessary to ensure that, if this
Unaffiliated Seller's Agreement were deemed to create a security interest in the
Mortgage Loans, such security interest would be deemed to be a perfected
security interest of first priority under applicable law and will be maintained
as such throughout the term of this Agreement.

                  Section 6.08. Miscellaneous. This Agreement supersedes all
prior agreements and understandings relating to the subject matter hereof.

                  Section 6.09. Amendments.

                  (a) This Agreement may be amended from time to time by the
Originators, the Unaffiliated Seller and the Depositor by written agreement,
upon the prior written consent of the Certificate Insurer, without notice to or
consent of the Certificateholders to cure any ambiguity, to correct or
supplement any provisions herein, to comply with any changes in the Code, or to
make any other provisions with respect to matters or questions arising under
this Agreement which shall not be inconsistent with the provisions of this
Agreement; provided, however, that such action shall not, as evidenced by (i) an
Opinion of Counsel, at the expense of the party requesting the change, delivered
to the Trustee or (ii) a letter from each Rating Agency confirming that such
amendment will not result in the reduction, qualification or withdrawal of the
current rating of the Class A Certificates, adversely affect in any material
respect the interests of any Certificateholder; and provided, further, that no
such amendment shall (y) reduce in any manner the amount of, or delay the timing
of, payments received on Mortgage Loans which are required to be distributed on
any Certificate without the consent of the Holder of such Certificate, or (x)
change the rights or obligations of any other party hereto without the consent
of such

                                       36
<PAGE>

party, or (2) cause the Unaffiliated Seller to conduct any activity not
permitted for qualified special purpose entities under the current accounting
literature.

                  (b) This Agreement may be amended from time to time by the
Originators, the Unaffiliated Seller and the Depositor with the consent of the
Certificate Insurer, the Majority Certificateholders and the Holders of the
majority of the Percentage Interest in the Class R Certificates for the purpose
of adding any provisions to or changing in any manner or eliminating any of the
provisions of this Agreement or of modifying in any manner the rights of the
Holders; provided, however, that no such amendment shall be made unless the
Trustee receives an Opinion of Counsel, at the expense of the party requesting
the change, that such change will not adversely affect the status of the REMIC
Trust as a REMIC or cause a tax to be imposed on the REMIC, and provided
further, that no such amendment shall reduce in any manner the amount of, or
delay the timing of, payments received on Mortgage Loans which are required to
be distributed on any Certificate without the consent of the Holder of such
Certificate or reduce the percentage for each Class the Holders of which are
required to consent to any such amendment without the consent of the Holders of
100% of each Class of Certificates affected thereby.

                  (c) It shall not be necessary for the consent of Holders under
this Section to approve the particular form of any proposed amendment, but it
shall be sufficient if such consent shall approve the substance thereof.

                  Section 6.10. Third-Party Beneficiaries. The parties agree
that each of the Certificate Insurer, the Collateral Agent and the Trustee is an
intended third-party beneficiary of this Agreement to the extent necessary to
enforce the rights and to obtain the benefit of the remedies of the Depositor
under this Agreement which are assigned to the Trustee for the benefit of the
Certificateholders and the Certificate Insurer pursuant to the Pooling and
Servicing Agreement and to the extent necessary to obtain the benefit of the
enforcement of the obligations and covenants of the Unaffiliated Seller under
Section 4.01 and 4.04(a)(ii) of this Agreement. The parties further agree that
the Underwriters and their directors and each person or entity who controls the
Underwriters or any such person, within the meaning of Section 15 of the
Securities Act (each, an "Underwriter Entity") is an intended third-party
beneficiary of this Agreement to the extent necessary to obtain the benefit of
the enforcement of the obligations and covenants of the Unaffiliated Seller with
respect to each Underwriter Entity under Section 4.04(a)(i) of this Agreement.

                  Section 6.11. GOVERNING LAW; CONSENT TO JURISDICTION; WAIVER
OF JURY TRIAL.

                  (a) THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE INTERNAL LAWS (AS OPPOSED TO CONFLICT OF LAWS PROVISIONS)
OF THE STATE OF NEW YORK.

                  (b) THE ORIGINATORS, THE DEPOSITOR AND THE UNAFFILIATED SELLER
EACH HEREBY SUBMIT TO THE NON-EXCLUSIVE JURISDICTION OF THE COURTS OF THE STATE
OF NEW YORK AND THE UNITED STATES DISTRICT COURT LOCATED IN THE BOROUGH OF
MANHATTAN IN NEW YORK CITY, AND EACH WAIVES PERSONAL SERVICE OF ANY AND ALL
PROCESS UPON IT AND CONSENTS THAT ALL SUCH SERVICE OF PROCESS BE MADE BY
REGISTERED MAIL DIRECTED TO THE ADDRESS SET FORTH IN SECTION 6.01 OF THIS
AGREEMENT AND SERVICE SO MADE SHALL BE DEEMED TO BE COMPLETED FIVE DAYS AFTER
THE SAME SHALL HAVE BEEN DEPOSITED IN THE U.S. MAIL, POSTAGE PREPAID. THE
ORIGINATORS, THE DEPOSITOR AND THE UNAFFILIATED SELLER EACH HEREBY

                                       37
<PAGE>

WAIVES ANY OBJECTION BASED ON FORUM NON CONVENIENS, AND ANY OBJECTION TO VENUE
OF ANY ACTION INSTITUTED HEREUNDER AND CONSENTS TO THE GRANTING OF SUCH LEGAL OR
EQUITABLE RELIEF AS IS DEEMED APPROPRIATE BY THE COURT. NOTHING IN THIS SECTION
SHALL AFFECT THE RIGHT OF THE ORIGINATORS, THE DEPOSITOR AND THE UNAFFILIATED
SELLER TO SERVE LEGAL PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR AFFECT ANY
SUCH PARTIES' RIGHT TO BRING ANY ACTION OR PROCEEDING IN THE COURTS OF ANY OTHER
JURISDICTION.

                  (c) THE ORIGINATORS, THE DEPOSITOR AND THE UNAFFILIATED SELLER
EACH HEREBY WAIVE ANY RIGHT TO HAVE A JURY PARTICIPATE IN RESOLVING ANY DISPUTE,
WHETHER SOUNDING IN CONTRACT, TORT, OR OTHERWISE ARISING OUT OF, CONNECTED WITH,
RELATED TO, OR IN CONNECTION WITH THIS AGREEMENT. INSTEAD, ANY DISPUTE RESOLVED
IN COURT WILL BE RESOLVED IN A BENCH TRIAL WITHOUT A JURY.

                  Section 6.12. Execution in Counterparts. This Agreement may be
executed in any number of counterparts, each of which so executed shall be
deemed to be an original, but all such counterparts shall together constitute
but one and the same instrument.

                  [Remainder of Page Intentionally Left Blank]

                                       38

<PAGE>

                  IN WITNESS WHEREOF, the parties, to this Unaffiliated Seller's
Agreement have caused their names to be signed by their respective officers
thereunto duly authorized as of the date first above written.

                                      BEAR STEARNS ASSET BACKED
                                        SECURITIES, INC.

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

                                      ABFS 2001-2, INC.

                                      By: /s/ Anthony J. Santilli, Jr.
                                         ---------------------------------
                                         Name: Anthony J. Santilli, Jr.
                                         Title: Chairman

                                      AMERICAN BUSINESS CREDIT, INC.

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

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

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

                                      AMERICAN BUSINESS MORTGAGE
                                        SERVICES, INC.

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

             [Signature Page to the Unaffiliated Seller's Agreement]

<PAGE>

                                                                      EXHIBIT A

                             MORTGAGE LOAN SCHEDULE<PAGE>

                                                                    EXHIBIT 10.1

                           MBIA INSURANCE CORPORATION

                                INSURANCE POLICY

                                  JUNE 28, 2001

                                                      INSURANCE POLICY NO. 35634

OBLIGATIONS:        ABFS MORTGAGE LOAN TRUST 2001-2 MORTGAGE PASS-THROUGH
-----------         CERTIFICATES, SERIES 2001-2, CLASS A-1 WITH AN INITIAL CLASS
                    A-1 CERTIFICATE PRINCIPAL BALANCE OF $275,000,000 (THE
                    "CLASS A-1 CERTIFICATES"), CLASS A-2 WITH AN INITIAL CLASS
                    A-2 CERTIFICATE PRINCIPAL BALANCE OF $32,798,000 (THE "CLASS
                    A-2 CERTIFICATES"), CLASS A-3 WITH AN INITIAL CLASS A-3
                    CERTIFICATE PRINCIPAL BALANCE OF $23,278,000 (THE "CLASS A-3
                    CERTIFICATES"), CLASS A-4 WITH AN INITIAL CLASS A-4
                    CERTIFICATE PRINCIPAL BALANCE OF $23,924,000 (THE "CLASS A-4
                    CERTIFICATES"), AND CLASS A-IO WITH AN INITIAL CLASS A-IO
                    NOTIONAL AMOUNT OF $35,500,000 (THE "CLASS A-IO
                    CERTIFICATES" AND, TOGETHER WITH THE CLASS A-1, CLASS A-2,
                    CLASS A-3 AND CLASS A-4 CERTIFICATES, THE "CLASS A
                    CERTIFICATES").

BENEFICIARY:        THE CHASE MANHATTAN BANK, AS TRUSTEE (THE "TRUSTEE") UNDER
-----------         THE POOLING AND SERVICING AGREEMENT, DATED AS OF JUNE 28,
                    2001 (AS AMENDED OR OTHERWISE MODIFIED WITH THE CONSENT OF
                    MBIA, THE "P&S AGREEMENT") AMONG BEAR STEARNS ASSET BACKED
                    SECURITIES, INC., AS DEPOSITOR, AMERICAN BUSINESS CREDIT,
                    INC., AS SERVICER, AND THE TRUSTEE, FOR THE BENEFIT OF THE
                    CERTIFICATEHOLDERS.

         MBIA INSURANCE CORPORATION ("MBIA"), for consideration received, hereby
unconditionally and irrevocably guarantees to the Trustee for the benefit of the
Class A Certificateholders, subject to the terms of this Insurance Policy (this
"Insurance Policy"), that an amount equal to each Insured Distribution will be
received by the Trustee after claim by the Trustee, for distribution in
accordance with the terms of the P&S Agreement; provided, however, that in no
event shall any payment under this Insurance Policy be made in respect of or due
to the failure by the Trustee to deliver to the Class A Certificateholders any
amount due to the Class A Certificateholders under the terms of the Class A
Certificates or the P&S Agreement from the funds then available for such payment
on deposit in the Certificate Account or otherwise available to the Trustee for
payment to the Certificateholders under the P&S Agreement, or the failure of the
Trustee to deliver to any Class A Certificateholder any amount paid by MBIA
hereunder. MBIA's obligations hereunder with respect to a particular Insured
Distribution shall be discharged to the extent funds equal to the applicable
Insured Distribution are received by the Trustee, whether or not such funds are
properly applied by the Trustee. Insured Distributions shall be made only at the
time set forth in this Insurance Policy, and no accelerated Insured

<PAGE>

Distributions shall be made regardless of any acceleration of the Obligations or
any amounts due in respect thereof, unless such acceleration is at the sole
option of MBIA.

         Notwithstanding the foregoing paragraph, this Insurance Policy does not
cover shortfalls, if any, attributable to the liability of the Trust, any REMIC
Trust or the Trustee for withholding taxes, if any (including interest and
penalties in respect of any such liability). In addition, this Insurance Policy
does not cover any Class A-2 Available Funds Cap Carry-Forward Amount or Net
Mortgage Loan Interest Shortfalls, nor does this Insurance Policy guarantee to
the holders of the certificates any particular rate of principal distribution.

         Capitalized terms used herein and not otherwise defined herein shall
have the meanings assigned to them in the P&S Agreement.

         The following terms shall have the following meanings:

         "Deficiency Amount" means for either Mortgage Loan Group and any
Distribution Date, the excess, if any of (i) the Required Distributions relating
to such Mortgage Loan Group due on such date over (ii) the Available Funds with
respect to such Mortgage Loan Group as of such date.

         "Insurance Agreement" shall mean the Insurance and Reimbursement
Agreement, dated as of June 28, 2001 among MBIA, the Unaffiliated Seller, the
Depositor, the Servicer, the Originators and the Trustee, as amended, restated
or otherwise modified from time to time.

         "Insured Distribution" shall mean (i) with respect to either Mortgage
Loan Group and any Distribution Date, the Deficiency Amount, if any, with
respect to such Distribution Date and such Mortgage Loan Group and (ii) any
Preference Amounts.

         "Preference Amount" means any amount previously distributed to a
Certificateholder on or in respect of the Class A Certificates that is
recoverable and sought to be recovered as a voidable preference by a trustee in
bankruptcy pursuant to the United States Bankruptcy Code (11 U.S.C.), as amended
from time to time in accordance with a final nonappealable order of a court
having competent jurisdiction.

         "Required Distributions" means, with respect to (1) any Distribution
Date occurring prior to December 25, 2031, the sum of (x) the Interest
Distribution Amount for all Class A Certificates net of any Net Mortgage Loan
Interest Shortfalls and Class A-2 Available Funds Cap Carry-Forward Amounts and
(y) the sum of the Over-collateralization Deficit(s) with respect to both
Mortgage Loan Groups, and (2) the final scheduled Distribution Date on December
25, 2031, the sum of (x) the amount set forth in clause (1)(x) above and (y) the
aggregate outstanding principal balance, if any, of the Class A-1, Class A-2,
Class A-3 and Class A-4 Certificates, after giving effect to all other
distributions of principal on the Class A-1, Class A-2, Class A-3 and Class A-4
Certificates on that Distribution Date.

         MBIA will pay any Insured Distribution that is a Preference Amount on
the Business Day following receipt on a Business Day by the Fiscal Agent (as
described below) of (a) a certified copy of the order requiring the return of a
preference payment, (b) an opinion of counsel satisfactory to MBIA that such
order is final and not subject to appeal, (c) an assignment

                                       2
<PAGE>

in such form as is reasonably required by MBIA, irrevocably assigning to MBIA
all rights and claims of the Certificateholder relating to or arising under the
Obligations against the debtor which made such preference payment or otherwise
with respect to such preference payment and (d) appropriate instruments to
effect the appointment of MBIA as agent for such Certificateholder in any legal
proceeding related to such preference payment, such instruments being in a form
satisfactory to MBIA, provided that if such documents are received after 12:00
noon, New York City time, on such Business Day, they will be deemed to be
received on the following Business Day. Such payments shall be disbursed to the
receiver or trustee in bankruptcy named in the final order of the court
exercising jurisdiction on behalf of the Certificateholder and not to any
Certificateholder directly unless such Certificateholder has returned principal
or interest paid on the Obligations to such receiver or trustee in bankruptcy,
in which case such payment shall be disbursed to such Certificateholder.

         Payment of amounts in respect of any other Insured Distribution
hereunder shall be made no later than 12:00 noon, New York City time, on the
later of the Distribution Date on which the related Required Distribution is due
or the third Business Day following receipt in New York, New York on a Business
Day by MBIA and State Street Bank and Trust Company, N.A., as Fiscal Agent for
MBIA, or any successor fiscal agent appointed by MBIA (the "Fiscal Agent"), of a
notice for payment in the form of Exhibit A hereto ("Notice for Payment"),
appropriately completed and executed by the Trustee; provided, that if Notice
for Payment is received after 12:00 noon, New York City time, on such Business
Day, it will be deemed to be received on the following Business Day. If any such
Notice for Payment received by the Fiscal Agent or MBIA is not in proper form or
is otherwise insufficient for the purpose of making claim hereunder, it shall be
deemed not to have been received by the Fiscal Agent or MBIA for purposes of
this paragraph, and MBIA or the Fiscal Agent, as the case may be, shall promptly
so advise the Trustee and the Trustee may submit amended documentation. Payments
due hereunder, unless otherwise stated herein, will be disbursed to the Trustee
by wire transfer of immediately available funds.

         The Fiscal Agent is the agent of MBIA only, and the Fiscal Agent shall
in no event be liable to the Trustee for any acts of the Fiscal Agent or any
failure of MBIA to deposit, or cause to be deposited, sufficient funds to make
payments due under this Insurance Policy.

         MBIA hereby waives and agrees not to assert any and all rights to
require the Trustee to make demand on or to proceed against any person, party or
security prior to the Trustee demanding payment under this Insurance Policy.

         No defenses, set-offs and counterclaims of any kind available to MBIA
so as to deny payment of any amount due in respect of this Insurance Policy will
be valid and MBIA hereby waives and agrees not to assert any and all such
defenses, set-offs and counterclaims, including, without limitation, any such
rights acquired by subrogation, assignment or otherwise.

         This Insurance Policy is neither transferable nor assignable, in whole
or in part, except to a successor Trustee duly appointed and qualified under the
P&S Agreement. Such transfer and assignment shall be effective upon receipt by
MBIA of a copy of the instrument effecting such transfer and assignment signed
by the transferor and by the transferee, and a certificate, properly completed
and signed by the transferor and the transferee (which shall be

                                       3
<PAGE>

conclusive evidence of such transfer and assignment), and, in such case, the
transferee instead of the transferor shall, without the necessity of further
action, be entitled to all the benefits of and rights under this Insurance
Policy in the transferor's place, provided that, in such case, the Notice for
Payment presented hereunder shall be a certificate of the transferee and shall
be signed by one who states therein that he or she is a duly authorized officer
of the transferee.

         All notices, presentations, transmissions, deliveries and
communications made by the Trustee to MBIA with respect to this Insurance Policy
shall specifically refer to the number of this Insurance Policy and shall be
made to MBIA at:

                MBIA Insurance Corporation
                113 King Street
                Armonk, New York 10504
                Attention: IPM Surveillance, Structured Finance
                Telephone: (914) 765-3779
                Facsimile: (914) 765-3810

         All notices, presentations, transmissions, deliveries and
communications made by the Trustee to the Fiscal Agent with respect to this
Insurance Policy shall specifically refer to the number of this Insurance Policy
and shall be made to the Fiscal Agent at:

                State Street Bank and Trust Company, N.A.
                61 Broadway, 15th Floor,
                New York, New York 10006,
                Attention: Municipal Registrar and Paying Agency,
                Telephone: (212) 612-3458
                Facsimile: (212) 612-3201

or such other address, telephone number or facsimile number as MBIA may
designate to the Trustee in writing from time to time. Each such notice,
presentation, transmission, delivery and communication shall be effective only
upon actual receipt by MBIA and the Fiscal Agent.

         The obligations of MBIA under this Insurance Policy are irrevocable,
primary, absolute and unconditional (except as expressly provided herein) and
neither the failure of the Trustee, the Depositor, the Servicer, any Originator,
the Unaffiliated Seller or any other person to perform any covenant or
obligation in favor of MBIA (or otherwise), nor the failure or omission to make
a demand permitted hereunder, nor the commencement of any bankruptcy, debtor or
other insolvency proceeding by or against the Trustee, the Depositor, the
Servicer, any Originator, the Unaffiliated Seller or any other person shall in
any way affect or limit MBIA's obligations under this Insurance Policy.

         This Insurance Policy and the obligations of MBIA hereunder shall
terminate on the day (the "Termination Date") which is one year and one day
following the date on which the outstanding principal balance of the Class A-1,
Class A-2, Class A-3 and Class A-4 Certificates, has been reduced to zero. The
Trustee shall, promptly following the Termination Date, deliver this Insurance
Policy to MBIA at its office set forth above for cancellation.

                                       4
<PAGE>

         Upon any payment hereunder, in furtherance and not in limitation of
MBIA's equitable right of subrogation and MBIA's rights under the Insurance
Agreement, MBIA will be subrogated to the rights of the Class A
Certificateholders in respect of which such payment was made to receive any and
all amounts due in respect of the obligations in respect of which MBIA has made
a payment hereunder, as set forth in the P&S Agreement.

         This Insurance Policy is not covered by the property/casualty insurance
fund specified in Article Seventy-Six of the New York State insurance law.

         This Insurance Policy sets forth in full the undertaking of MBIA, and
shall not, except with the prior written consent of the Trustee or otherwise in
accordance with the express terms hereof, be modified, altered or affected by
any other agreement or instrument, including any modification or amendment
thereto and may not be canceled or revoked by MBIA.

         THIS INSURANCE POLICY SHALL BE CONSTRUED, AND THE OBLIGATIONS, RIGHTS
AND REMEDIES OF THE PARTIES HEREUNDER SHALL BE DETERMINED, IN ACCORDANCE WITH
THE LAWS OF THE STATE OF NEW YORK, INCLUDING WITHOUT LIMITATION SECTION 5-1401
OF THE GENERAL OBLIGATIONS LAW OF THE STATE OF NEW YORK BUT OTHERWISE WITHOUT
REFERENCE TO ITS CONFLICT OF LAWS PROVISIONS, AND THE OBLIGATIONS, RIGHTS AND
REMEDIES OF THE PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH THE
LAWS OF THE STATE OF NEW YORK.

         In the event that the terms and provisions of this Insurance Policy
conflicts with any terms and provisions regarding the obligations of MBIA set
forth in the P&S Agreement or any agreement related thereto, then the terms and
provisions of this Insurance Policy shall control.

                                       5
<PAGE>

         IN WITNESS WHEREOF, MBIA has caused this Insurance Policy to be
executed on the date first written above.

                                                    MBIA INSURANCE CORPORATION

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

                                       6
<PAGE>

                                      EXHIBIT A TO INSURANCE POLICY NUMBER 35634

MBIA Insurance Corporation
113 King Street
Armonk, New York 10504
Attention:  IPM Surveillance, Structured Finance
Telephone: (914) 765-3779
Facsimile: (914) 765-3810

                               NOTICE FOR PAYMENT
                       UNDER INSURANCE POLICY NUMBER 35634

         The Chase Manhattan Bank, not in its individual capacity, but solely as
Trustee (the "Trustee"), hereby certifies to MBIA Insurance Corporation ("MBIA")
with reference to that certain Insurance Policy, Number 35634 dated June 28,
2001 (the "Insurance Policy"), issued by MBIA in favor of the Trustee under that
certain Pooling and Servicing Agreement dated as of March 1, 2001 (the "P&S
Agreement"), among the Trustee, Bear Stearns Asset Backed Securities, Inc., as
Depositor and American Business Credit, Inc., as Servicer as follows:

         1. The Trustee is the Trustee under the P&S Agreement and the
Beneficiary under the Insurance Policy.

         2. The Trustee is entitled to make a demand under the Insurance Policy
pursuant to Section 6.04 of the P&S Agreement.

[For a Notice for Payment in respect of a Distribution Date use the following
paragraphs 3, 4, and 5.]

         3. This notice relates to the [insert date] Distribution Date. The
Required Distribution, as specified, for such Distribution Date is
$____________. The amount demanded by this notice does not exceed such Required
Distribution.

         4. The Trustee demands payment of $____________, which is an amount
equal to the amount, if any, by which the Required Distribution on such date
exceeds the Available Funds which are available to pay such Required
Distribution pursuant to the P&S Agreement;

         5. The foregoing amount demanded is to be paid in immediately available
funds to the Certificate Insurance Payment Account at __________, account number
__________.

[For a Notice for Payment in respect of a Preference Amount use the following
paragraphs 6 and 7.]

<PAGE>

         6. The Trustee hereby represents and warrants, based upon information
available to it, that (i) the amount entitled to be drawn under the Insurance
Policy on the date hereof in respect of Preference Amounts is $________, (ii)
the Class A Certificateholders with respect to which the drawing is being made
under the Insurance Policy have paid or simultaneously with such draw on the
Insurance Policy will pay such Preference Amounts, and (iii) the documents
required by the Insurance Policy to be delivered in connection with such
Preference Amounts have previously been presented to MBIA or are attached
hereto.

         7. The Preference Amount demanded is to be paid in immediately
available funds by wire transfer to [____________].

[For a Notice for Payment relating to both a Preference Amount and a
Distribution Date, use all of the foregoing paragraphs and renumber the second
set of paragraphs 3-5 as paragraphs 6-8.]

         Capitalized terms used herein and not otherwise defined herein shall
have the meanings assigned to them in the P&S Agreement.

         IN WITNESS WHEREOF, this notice has been executed this ___ day of
__________, _____.

                                                 _______________, as Trustee

                                                 By:______________________
                                                      Authorized Officer

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