Document:

<PAGE>

                                                                     EXHIBIT 4.2

                   BEAR STEARNS ASSET BACKED SECURITIES, INC.,
                                   Depositor,

                               ABFS 2003-1, 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 March 1, 2003

<PAGE>

                                TABLE OF CONTENTS

<TABLE>
<CAPTION>
                                                                                                             Page

                                                    ARTICLE I

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

                                                    ARTICLE II

                                 PURCHASE, SALE AND CONVEYANCE OF MORTGAGE LOANS

Section 2.01.   Agreement to Purchase the Initial Mortgage Loans.......................................        2
Section 2.02.   Agreement to Purchase any Subsequent Mortgage Loans....................................        3
Section 2.03.   Purchase Price.........................................................................        3
Section 2.04.   Conveyance of Mortgage Loans; Possession of Mortgage Files.............................        4
Section 2.05.   Delivery of Mortgage Loan Documents....................................................        5
Section 2.06.   Acceptance of Mortgage Loans...........................................................        6
Section 2.07.   Sale of Mortgage Loans; Assignment of Agreement........................................        7
Section 2.08.   Examination of Mortgage Files..........................................................        8
Section 2.09.   Books and Records......................................................................        8
Section 2.10.   Cost of Delivery and Recordation of Documents..........................................        8

                                                   ARTICLE III

                                          REPRESENTATIONS AND WARRANTIES

Section 3.01.   Representations and Warranties as to the Originators...................................        8
Section 3.02.   Representations and Warranties as to the Unaffiliated Seller...........................       10
Section 3.03.   Representations and Warranties Relating to the Mortgage Loans..........................       12
Section 3.04.   Representations and Warranties of the Depositor........................................       21
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...............................       26
Section 4.02.   Merger or Consolidation................................................................       26
Section 4.03.   Costs..................................................................................       27
Section 4.04.   Indemnification........................................................................       27
</TABLE>

                                       i

<PAGE>

                                   ARTICLE V

                              CONDITIONS OF CLOSING

<TABLE>
<S>                                                                                                          <C>
Section 5.01.   Conditions of Depositor's Obligations..................................................       29
Section 5.02.   Conditions of Unaffiliated Seller's Obligations........................................       31
Section 5.03.   Termination of Depositor's Obligations.................................................       32

                                   ARTICLE VI

                                  MISCELLANEOUS

Section 6.01.   Notices................................................................................       32
Section 6.02.   Severability of Provisions.............................................................       32
Section 6.03.   Agreement of Unaffiliated Seller.......................................................       33
Section 6.04.   Survival...............................................................................       33
Section 6.05.   Effect of Headings and Table of Contents...............................................       33
Section 6.06.   Successors and Assigns.................................................................       33
Section 6.07.   Confirmation of Intent; Grant of Security Interest.....................................       33
Section 6.08.   Miscellaneous..........................................................................       34
Section 6.09.   Amendments.............................................................................       34
Section 6.10.   Third-Party Beneficiaries..............................................................       34
Section 6.11.   GOVERNING LAW; CONSENT TO JURISDICTION; WAIVER OF JURY TRIAL...........................       35
Section 6.12.   Execution in Counterparts..............................................................       35
</TABLE>

Exhibit A - Mortgage Loan Schedule

                                       ii

<PAGE>

                  THIS UNAFFILIATED SELLER'S AGREEMENT, dated as of March 1,
2003, by and among BEAR STEARNS ASSET BACKED SECURITIES, INC., a Delaware
corporation, its successors and assigns (the "Depositor"), ABFS 2003-1, INC., a
Delaware corporation and its successors (the "Unaffiliated Seller"), AMERICAN
BUSINESS CREDIT, INC., a Pennsylvania corporation ("ABC"), HOMEAMERICAN CREDIT,
INC. D/B/A UPLAND MORTGAGE, a Pennsylvania corporation ("Upland"), and AMERICAN
BUSINESS MORTGAGE SERVICES, INC., a New Jersey corporation ("ABMS", and together
with ABC and Upland, the "Originators").

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

                  WHEREAS, it is the intention of the Originators, the
Unaffiliated Seller and the Depositor that, simultaneously with the Originators'
conveyance of the Mortgage Loans to the Unaffiliated Seller and the Unaffiliated
Seller's conveyance of the Mortgage Loans to the Depositor on the Closing Date,
(a) the Depositor shall sell the Mortgage Loans to the ABFS Mortgage Loan Trust
2003-1 (the "Trust"), pursuant to a Pooling and Servicing Agreement to be dated
as of March 1, 2003 (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 JPMorgan Chase Bank, as trustee,
collateral agent and back-up servicer (in each such capacity, as applicable, the
"Trustee", the "Collateral Agent" and the "Back-up Servicer") and (b) the Trust
shall issue certificates (the "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:

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

                  "Prospectus" means the Prospectus dated February 25, 2003
relating to the offering by the Depositor from time to time of its
Mortgage-Backed/Asset-Backed Securities (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
March 26, 2003, relating to the offering of the Certificates in the form in
which it was or will be filed with

<PAGE>

the Commission pursuant to Rule 424(b) under the Securities Act with respect to
the offer and sale of the Certificates.

                  "Registration Statement" means that certain registration
statement on Form S-3, as amended (Registration No. 333-91344), relating to the
offering by the Depositor from time to time of its Mortgage-Backed/Asset-Backed
Securities (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

                  (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 2003-1, 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

                                       2

<PAGE>

                  Section 2.01. Agreement to Purchase the Initial 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 Original Aggregate Principal Balance of the Mortgage Loans accepted by
the Depositor on the Closing Date and listed in the Mortgage Loan Schedule.

                  (b)      Subject to Section 2.08 hereof, the Depositor and the
Unaffiliated Seller have agreed upon which of the Unaffiliated Seller's Mortgage
Loans are to be purchased by the Depositor on the Closing Date pursuant to this
Agreement, and the Unaffiliated Seller has prepared a schedule describing the
Mortgage Loans (the "Mortgage Loan Schedule") setting forth all of the Mortgage
Loans to be purchased under this Agreement, which schedule is attached hereto as
Exhibit A. The Mortgage Loan Schedule shall conform to the requirements of the
Depositor and to the definition of "Mortgage Loan Schedule" in 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 March 31, 2003 or such other place and
time as the parties shall agree (such time being herein referred to as the
"Closing Date").

                  Section  2.02. Agreement to Purchase any Subsequent Mortgage
Loans. Subject to the satisfaction of the conditions set forth in Section 2.03
of the Pooling and Servicing Agreement and provided that the Original Pre-Funded
Amount is greater than zero, (i) in consideration of the Unaffiliated Seller's
delivery on the related Subsequent Transfer Dates to or upon the order of the
Originators of all or a portion of the balance of funds on deposit in the
Pre-Funding Account, the Originators shall on any Subsequent Transfer Date sell,
transfer, assign, set over and convey to the Unaffiliated Seller, without
recourse, but subject to the terms and provisions of this Agreement, all of the
right, title and interest of the Originators in and to the Subsequent Mortgage
Loans, including all principal of, and all interest due on, such Subsequent
Mortgage Loans, and all other assets included or to be included in the Trust
Fund, and (ii) in consideration of the Depositor's delivery on the related
Subsequent Transfer Dates to or upon the order of the Unaffiliated Seller of all
or a portion of the balance of funds on deposit in the Pre-Funding Account, the
Unaffiliated Seller shall on any Subsequent Transfer Date sell, transfer,
assign, set over and convey to the Depositor, without recourse, but subject to
the terms and provisions of this Agreement, all of the right, title and interest
of the Unaffiliated Seller in and to the Subsequent Mortgage Loans, including
all principal of, and all interest due on, such Subsequent Mortgage Loans, and
all other assets included or to be included in the Trust Fund.

                  The amount released from the Pre-Funding Account with respect
to a transfer of Subsequent Mortgage Loans to the Mortgage Loan Pool shall be
one hundred percent (100%) of the Aggregate Principal Balance of such Subsequent
Mortgage Loans so transferred, as of the related Subsequent Cut-Off Date.

                                       3

<PAGE>

                  The obligation of the Depositor to purchase a Subsequent
Mortgage Loan on any Subsequent Transfer Date is subject to the satisfaction of
the requirements set forth in Section 2.03 of the Pooling and Servicing
Agreement.

                  Section  2.03. Purchase Price.

                  (a)      On the Closing Date, as consideration for the
Originators' sale of the Initial Mortgage Loans to the Unaffiliated Seller, the
Unaffiliated Seller will deliver to the Originators an amount in cash equal to
the sum of (i) with respect to each Class of Offered Certificates, the product
of (x) the Original Certificate Principal Balance of such Class of Offered
Certificates and (y) the purchase percentage for such Class set forth in the
table below, plus (ii) with respect to the Class A and Class A-IO Certificates
only, accrued interest on each such Original Certificate Principal Balance at
the Pass-Through Rate for such Class set forth in the table below from (and
including) March 1, 2003 to (but not including) the Closing Date, minus (iv) the
Original Pre-Funded Amount, if any.

                  On the Closing Date, as consideration for the Unaffiliated
Seller's sale of the Initial Mortgage Loans to the Depositor, the Depositor will
deliver to the Unaffiliated Seller (i) an amount in cash equal to the sum of (A)
with respect to each Class of Offered Certificates, the product of (x) the
Original Certificate Principal Balance of such Class of Offered Certificates and
(y) the purchase percentage for such Class set forth in the table below, plus
(B) with respect to the Class A and Class A-IO Certificates only, accrued
interest on each such Original Certificate Principal Balance at the Pass-Through
Rate for such Class set forth in the table below, from (and including) March 1,
2003 to (but not including) the Closing Date, minus (D) the Original Pre-Funded
Amount, if any, and (ii) the Class X, Class I and Class R Certificates to be
issued pursuant to the Pooling and Servicing Agreement, if any.

<TABLE>
<CAPTION>
Class              Purchase Percentage               Pass-Through Rate
-----              -------------------               -----------------
<S>                <C>                               <C>
  A                     99.927390%                         3.78%
 A-IO                    7.091795%                         4.00%
  M                    100.000000%                    LIBOR plus 1.50%
</TABLE>

                  (b)      On any Subsequent Transfer Date, as full
consideration for the Originators' sale of the Subsequent Mortgage Loans to the
Unaffiliated Seller and the Unaffiliated Seller's sale of the Subsequent
Mortgage Loans to the Depositor, the Depositor will deliver to the Unaffiliated
Seller and the Unaffiliated Seller will deliver to the Originators an amount in
cash equal to the sum of 100.00000% of the Aggregate Principal Balance of the
Subsequent Mortgage Loans as of the related Subsequent Cut-Off Date.

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

                                       4

<PAGE>

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

                  (a)      On the Closing Date and on any Subsequent Transfer
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 related 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 Initial Cut-Off Date or the Subsequent Cut-Off Date, as applicable,
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 related 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 Initial Cut-Off Date or
the Subsequent Cut-Off Date, as applicable. 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 Initial Cut-Off Date or the Subsequent Cut-Off Date, as
applicable.

                  (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 related 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 Initial Mortgage Loans, the related Insurance Policies
and any proceeds thereof 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 or any Subsequent
Transfer Date, as applicable, 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

                                       5

<PAGE>

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 within sixty (60) days of the Closing Date 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
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

                                       6

<PAGE>

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 Trustee 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 Trustee on behalf of the Trust as the
owner of the Mortgage Loans and 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, on behalf of the Trustee, has agreed to execute and deliver on
or prior to the Closing Date an acknowledgment of receipt, in the form attached
as Exhibit R to the Pooling and Servicing Agreement, of the original Mortgage
Note with respect to each Mortgage Loan (with any exceptions noted), and
declares that it will hold, or cause the Collateral Agent to hold, on its
behalf, 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 Trustee or the Collateral
Agent, on its behalf, 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 (with respect to the Initial Mortgage Loans) or within thirty (30) days of
any Subsequent Transfer Date (with respect to the Subsequent Mortgage Loans), as
applicable (or, with respect to any Qualified Substitute Mortgage Loan, within
thirty (30) days after the receipt by the Collateral Agent, on behalf of the
Trustee thereof), and to deliver to the Unaffiliated Seller, the Certificate
Insurer, the Back-up Servicer and the Servicer a 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
initiated by the Mortgagor), appears regular on its face and relates to such
Mortgage Loan, and (iii) based on its examination and only as to the foregoing
documents, the information set forth on the Mortgage Loan Schedule accurately
reflects the information set forth in the 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

                                       7

<PAGE>

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 Initial Mortgage Loans) or within ninety (90)
days of any Subsequent Transfer Date (with respect to the Subsequent Mortgage
Loans), as applicable, the Collateral Agent, on behalf of the Trustee, shall be
required to deliver (or cause to be delivered) to the Certificate Insurer, the
Servicer, the Back-up Servicer and the Unaffiliated Seller a final certification
in the form attached to the Pooling and Servicing Agreement as Exhibit J 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 Certificate Insurer, the Servicer, the Back-up Servicer, the Trustee,
the Unaffiliated Seller and the related Originator. The Unaffiliated Seller
agrees that in performing any such review, the Collateral Agent may conclusively
rely on the Unaffiliated Seller as to the purported genuineness of any such
document and any signature thereon. Each of the Originators and the Unaffiliated
Seller agrees to use reasonable efforts to remedy a material defect in a
document constituting part of the Trustee's Mortgage File when notified of such
defect in reasonable detail. If, however, within sixty (60) days after such
notice neither the Unaffiliated Seller nor any Originator has remedied the
defect and the defect materially and adversely affects the interest of the
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 Certificate Insurer, the
Collateral Agent or the Trustee 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

                                       8

<PAGE>

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 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 Certificate Insurer and the
Trustee may enforce, without joinder of the Depositor, the repurchase and
indemnification 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 and any Subsequent Transfer Date, as applicable, 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 or
any Subsequent Transfer Date, as the case may be. If the Depositor or its
designee makes such examination prior to the Closing Date or any Subsequent
Transfer Date, as the case may be, 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 or any Subsequent Transfer Date, as the case
may be, 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.

                                       9

<PAGE>

                                  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) with respect to ABC
and Upland, the Commonwealth of Pennsylvania or (ii) with respect to ABMS, the
State of New Jersey, and has all licenses necessary to carry on its business as
now being conducted and is licensed, qualified and in good standing in each
state where a Mortgaged Property is located if the laws of such state require
licensing or qualification in order to conduct business of the type conducted by
the Originator and to perform its obligations as the Originator hereunder, and
in any event the Originator is in compliance with the laws of any such state to
the extent necessary to ensure the enforceability of the related Mortgage Loan;
the Originator has the full power and authority, corporate and otherwise, to
execute and deliver this Agreement and to perform in accordance herewith; the
execution, delivery and performance of this Agreement (including all instruments
of transfer to be delivered pursuant to this Agreement) by the Originator or the
consummation of the transactions contemplated hereby have been duly and validly
authorized; this Agreement evidences the valid, binding and enforceable
obligation of the Originator; and all requisite corporate action has been taken
by the Originator to make this Agreement valid and binding upon the Originator
in accordance with its terms;

                  (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 the information under the caption
"Underwriting") 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

                                       10

<PAGE>

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;

                  (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;

                                       11

<PAGE>

                  (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 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

                                       12

<PAGE>

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 the information under the caption
"Underwriting") 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 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;

                                       13

<PAGE>

                  (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 Depositor and the Unaffiliated Seller represents and warrants to the
Depositor that, as of the Closing Date, as to each Initial Mortgage Loan, and as
of the Subsequent Transfer Date, as to each Subsequent 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 Certificate Insurer, the Collateral
Agent and the Trustee 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

                                       14

<PAGE>

record as of the date of recording of such Mortgage, such exceptions appearing
of record being acceptable to mortgage lending institutions generally in the
area wherein the property subject to the Mortgage is located or specifically
reflected in the appraisal obtained in connection with the origination of the
related Mortgage Loan obtained by the Unaffiliated Seller, and (iv) other
matters to which like properties are commonly subject which do not materially
interfere with the benefits of the security intended to be provided by such
Mortgage;

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

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

                  (f)      As of the Initial Cut-Off Date, no Mortgage Loan has
a Mortgage Interest Rate less than 6.25% per annum and the weighted average
Mortgage Interest Rate of the Mortgage Loans is 10.23%;

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

                  (h)      As of the Initial Cut-Off Date, the weighted average
remaining term to maturity of the Mortgage Loans is 270 months;

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

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

                  (k)      Such Mortgage Loan, the Mortgage, and the Mortgage
Note, including, without limitation, the obligation of the Mortgagor to pay the
unpaid principal of and interest on the Mortgage Note, are each not subject to
any right of rescission (or any such rescission right has expired in accordance
with applicable law), set-off, counterclaim, or defense, including the defense
of usury, nor will the operation of any of the terms of the Mortgage Note or the
Mortgage, or the exercise of any right thereunder, render either the Mortgage
Note or the Mortgage unenforceable, in whole or in part, or subject to any right
of rescission, set-off,

                                       15

<PAGE>

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;

                  (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 100.00%, and the weighted average
Combined Loan-to-Value Ratio of all Mortgage Loans as of the Initial Cut-Off
Date is approximately 76.80%;

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

<TABLE>
<CAPTION>
                        Mortgage Loan Pool
------------------------------------------------------------------
                                                     Percent of
    State                                         Principal Balance
--------------                                    -----------------
<S>                                               <C>
Connecticut                                             2.87%
Florida                                                 8.23%
Illinois                                                5.00%
Maryland                                                2.82%
Massachusetts                                           8.88%
Michigan                                                5.59%
New Jersey                                             12.65%
New York                                               22.54%
North Carolina                                          2.90%
Ohio                                                    4.23%
Pennsylvania                                            7.23%
Rhode Island                                            2.03%
Virginia                                                3.26%
Other                                                  12.17%
                                                   =========

Total                                                 100.00%
</TABLE>

                                       16

<PAGE>

                  (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 Servicing Practices;

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

                  (t)      Each Mortgage and related Mortgage Note 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 applicable 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 applicable Mortgage Loan Schedule. The Principal Balance as of the
applicable Cut-Off Date does not exceed the original principal amount of such
Mortgage Loan. Except with respect to no more than $200,000 of escrow funds in
the aggregate with respect to all Mortgage Loans, any and all requirements as to
completion of any on-site or off-site improvements and as to disbursements of
any escrow funds therefor have been complied with. All costs, fees and expenses
incurred in making or recording such Mortgage Loan have been paid;

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

                  (w)      The terms of the Mortgage and the Mortgage Note have
not been impaired, waived, altered, or modified in any respect, except by a
written instrument which has been recorded, if necessary, to protect the
interest of the 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 applicable Mortgage Loan Schedule and, to the extent
necessary, has been or will be approved by (i) the insurer under the applicable
mortgage title

                                       17

<PAGE>

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 applicable 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 underwriter's certificates,
have been made or obtained from the appropriate authorities and the Mortgaged
Property is lawfully occupied under applicable law;

                  (aa)     To the best of the Unaffiliated Seller's and the
Originators' knowledge, there do not exist any circumstances or conditions with
respect to the Mortgage, the Mortgaged Property, the Mortgagor or the
Mortgagor's credit standing that can be reasonably expected to cause such
Mortgage Loan to become delinquent or adversely affect the value or
marketability of such Mortgage Loan, other than any such circumstances or
conditions permitted under the Originator's Underwriting Guidelines;

                                       18

<PAGE>

                  (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) 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 and the
Certificate Insurer. The Mortgage has been duly assigned by the Originators to
the Unaffiliated Seller and by the Unaffiliated Seller to the Depositor and by
the Depositor to the Trust and the Mortgage Note has been duly endorsed. The
Assignment of Mortgage delivered to the Collateral Agent, on behalf of the
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. After the
transfer pursuant to Section 2.05 hereof, 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

                                       19

<PAGE>

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;

                  (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 Trust or the Trustee or the
Certificateholders or the Certificate Insurer to any trustee under the deed of
trust, except in connection with a trustee's sale after default by the
Mortgagor;

                  (ii)     The Mortgaged Property consists of one or more
parcels of real property separately assessed for tax purposes. To the extent
there is erected thereon a detached or an attached one-family residence or a
detached two-to-six-family dwelling, or an individual

                                       20

<PAGE>

condominium unit in a low-rise condominium, or an individual unit in a planned
unit development, or a commercial property, a manufactured home, or a mixed use
or multiple purpose property, such residence, dwelling or unit is not (i) a unit
in a cooperative apartment, (ii) a property constituting part of a syndication,
(iii) a time share unit, (iv) a property held in trust, (v) a mobile home, (vi)
a log-constructed home, or (vii) a recreational vehicle;

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

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

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

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

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

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

                  (pp)     When measured by the Cut-Off Date Aggregate Principal
Balances of all Mortgage Loans as of the Initial Cut-Off Date, the Mortgagors
with respect to at least 92.23% of the Mortgage Loans represented at the time of
origination that the Mortgagor would occupy the Mortgaged Property as the
Mortgagor's primary residence;

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

                                       21

<PAGE>

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

                  (ss)     With respect to second lien Mortgage Loans:

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

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

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

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

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

                           (vi)     No more than 14.16% (by Principal Balance)
         of the Mortgage Loans are secured by Mortgages that are second liens.

                  (tt)     Each of the Originators and the Unaffiliated Seller
further represents and warrants to the Certificate Insurer, the Trustee and the
Certificateholders that as of the Subsequent Cut-Off Date all representations
and warranties set forth in clauses (a) through (ss) above and (uu) through
(jjj) below will be correct in all material respects as to any Subsequent
Mortgage Loan;

                  (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,

                                       22

<PAGE>

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 Originators' and the Unaffiliated
Seller's knowledge, no Mortgage Loan is covered by the Home Ownership and Equity
Protection Act, no Mortgage Loan is in violation of any comparable state or
local law and no Mortgage Loan is a "high-cost" loan or a loan having similar
characteristics under the laws of the States of Georgia, New York,
Massachusetts, Illinois or North Carolina or any comparable state or local laws;

                  (yy)     Except for 2.65% (by Principal Balance) of the
Mortgage Loans, which may have an initial CLTV ratio range of up to 100.00%, no
Mortgage Loans have initial CLTV ratios greater than 90.00%;

                  (zz)     No more than 7.39% (by Principal Balance) of the
Mortgage Loans are loans the proceeds of which are to be used for business
purposes;

                  (aaa)    At least 92.23% (by Principal Balance) of the
Mortgage Loans are secured exclusively by Owner Occupied Mortgaged Property;

                  (bbb)    To the extent that a credit score was obtained, the
weighted average FICO or similar scoring result score (by Principal Balance) for
the Mortgage Loans is at least 570, not more than 1.85% (by Principal Balance)
of the Mortgage Loans have FICO or similar scoring result scores that are less
than 500 and at least 99.68% (by Principal Balance) of the Mortgage Loans have
FICO or similar scoring result scores;

                  (ccc)    The Mortgage Loans have a weighted average CLTV (by
Principal Balance) of not more than 76.80% and no more than 2.65% (by Principal
Balance) of the Mortgage Loans have a CLTV greater than 90.00%;

                  (ddd)    No more than 11.43% (by Principal Balance) of the
Mortgage Loans are made to limited or no documentation borrowers;

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

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<PAGE>

                  (fff)    No more than 38.65% (by Principal Balance ) of the
Mortgage Loans consist of balloon Mortgage Loans that mature within 10 years of
the date of origination;

                  (ggg)    No Mortgage Loan has a Principal Balance greater than
$550,000.00;

                  (hhh)    At least 78.20% (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;

                  (iii)    No more than 0.39% (by Principal Balance) of the
Mortgage Loans are secured by manufactured homes;

                  (jjj)    None of the consumer Mortgage Loans have prepayment
penalties that apply for more than five years from the date of origination; and

                  (kkk)    No proceeds from any Mortgage Loan was used to
finance single-premium credit life insurance.

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

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

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

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

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

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

                                       24

<PAGE>

                  (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, for the benefit of the Certificateholders and the Certificate Insurer,
and shall continue in full force and effect, notwithstanding any restrictive or
qualified endorsement on the Mortgage Notes and notwithstanding subsequent
termination of this Agreement or the 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
Certificate Insurer, the Servicer, the Back-up Servicer, the Collateral Agent,
any Subservicer, the Trustee or any Certificateholder that the substance of such
representation and warranty was inaccurate as of the Closing Date or the
Subsequent Transfer Date, as applicable, 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 Certificate Insurer, the
Unaffiliated Seller, the Collateral Agent, the Servicer, the Back-up Servicer,
any Subservicer, the Trustee 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 Certificate Insurer or the
Certificateholders, or which materially and adversely affects the interests of
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 promptly give pursuant to this Section 3.05(b) and pursuant to
Section 4.02 of the Pooling and Servicing Agreement (and in any event, within
five (5) Business Days of the discovery) written notice to the others. Subject
to the last paragraph of this Section 3.05(b), within sixty (60) days of the
earlier of its discovery or its receipt of notice of any breach of a
representation or warranty, the Unaffiliated Seller and the Originators shall
(a) promptly cure such breach in all material respects, or (b) purchase such
Mortgage Loan at the Loan Repurchase Price, or (c) remove such Mortgage Loan
from the Trust Fund (in which case it shall become a Deleted Mortgage Loan)

                                       25

<PAGE>

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 K, 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 Distribution Account pursuant to Section
2.07(b) of the Pooling and Servicing Agreement (which certification shall be in
the form of Exhibit K 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 Collection Account all payments received in
connection with such Qualified Substitute Mortgage Loan or Loans after the date
of such substitution. Monthly Payments received with respect to Qualified
Substitute Mortgage Loans on or before the date of substitution will be retained
by the Unaffiliated Seller. The Trust 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 Certificate Insurer, the Trustee
and the Collateral Agent 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

                                       26

<PAGE>

will remit to the Servicer and pursuant to the Pooling and Servicing Agreement
the Servicer will deposit into the Distribution Account an amount equal to the
Substitution Adjustment, if any.

                  (e)      With respect to any Mortgage Loan that has been
converted to an REO Mortgage Loan, all references in this Section 3.05 or
Section 2.06 to "Mortgage Loan" shall be deemed to refer to such REO Mortgage
Loan. With respect to any Mortgage Loan that the Originator or Unaffiliated
Seller is required to repurchase that is or becomes a Liquidated Mortgage Loan,
in lieu of repurchasing such Mortgage Loan, the Originator or Unaffiliated
Seller shall deposit into the Distribution Account, pursuant to Section 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)      Subject to Section 3.05(l), 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 any REMIC created under the Pooling and Servicing
Agreement 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 Back-up Servicer, the
Trustee and the Certificate Insurer or any Certificateholder that any Mortgage
Loan does not satisfy the requirements of Sections 3.02 and 3.03 hereof, the
party discovering such fact shall promptly (and in any event, within 5

                                       27

<PAGE>

Business Days of the discovery) give written notice thereof to the other
parties. In connection therewith, the Unaffiliated Seller or the related
Originator shall repurchase or substitute a Qualified Substitute Mortgage Loan
for the affected Mortgage Loan within ninety (90) days of the earlier of such
discovery by any of the foregoing parties, or the Trustee's or the Unaffiliated
Seller's receipt of notice, in the same manner as it would a Mortgage Loan for a
breach of representation or warranty contained in Sections 3.01, 3.02 or 3.03.
Pursuant to the 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 3.01, 3.02 or 3.03.

                  (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 of the Pooling and Servicing Agreement. 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
Certificate Insurer and the Certificateholders 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 Back-up Servicer, the Certificate Insurer and the
Certificateholders 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

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<PAGE>

         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 (absent a Certificate
         Insurer Default);

                           (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 or 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 or convenient to accomplish the foregoing or are
         incidental thereto or connected therewith;

                           (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.

                                       29

<PAGE>

                  (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;

                           (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.

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<PAGE>

                  (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 and the Unaffiliated Seller will keep in full effect its existence,
rights and franchises as a corporation and will obtain and preserve its
qualification to do business as a foreign corporation, in each jurisdiction
necessary to protect the validity and enforceability of this Agreement or any of
the Mortgage Loans and to perform its duties under this Agreement. Any Person
into which any of the Originators or the Unaffiliated Seller may be merged or
consolidated, or any corporation resulting from any merger, conversion or
consolidation to which the Originators or the Unaffiliated Seller shall be a
party, or any Person succeeding to the business of the Originators or the
Unaffiliated Seller, shall be approved by the Certificate Insurer (which
approval shall not be unreasonably withheld). The successor shall be an
established mortgage loan servicing institution that is a permitted transferee
and in all events shall be the successor of the Originators and the Unaffiliated
Seller without the execution or filing of any paper or any further act on the
part of any of the parties hereto, anything herein to the contrary
notwithstanding. The Originators and the Unaffiliated Seller shall send notice
of any such merger or consolidation to the 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, Moody's and Fitch; (c) any of the
fees and expenses of the Trustee, the Collateral Agent and the Back-Up Servicer
and the fees and disbursements of the Trustee's, the Collateral Agent's and the
Back-Up Servicer'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 0.0094% of the Certificate Principal
Balance of the Offered Certificates 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.

                                       31

<PAGE>

                  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); provided, however, that in no event
         will the Unaffiliated Seller be liable in excess of the net proceeds of
         its sale hereunder. 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 Servicer 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 Servicer in accordance with Section
         5.19(b) of the Pooling and Servicing Agreement for all amounts advanced
         by the Servicer pursuant to the preceding sentence except when the
         claim relates directly to the failure of the Unaffiliated Seller to
         perform its duties in compliance with the terms of this Agreement.

                  (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

                                       32

<PAGE>

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) subject to the limits set forth in
subsection (a) and subsection (b) of this Section 4.04; provided, however, that
no person guilty

                                       33

<PAGE>

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 (i) 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 and
(ii) a letter dated the date of this Agreement, in form and substance acceptable
to the Depositor and its counsel, prepared by BDO Seidman LLP, independent
certified public accountants, regarding the numerical information contained in
the Prospectus Supplement under the caption "The Originators, the Seller and the
Servicer -- Delinquency and Loan Loss Experience."

                                       34

<PAGE>

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

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

                           (i)      the Mortgage Loan Schedule;

                           (ii)     this Agreement, the Pooling and Servicing
         Agreement, dated as of March 1, 2003, and the Underwriting Agreement
         dated as of March 27, 2003 and 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, Moody's and Fitch (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, Moody's and Fitch as to such matters as shall
         be required for the assignment of a rating to the Offered Certificates
         described in clauses (vii), (viii) and (ix) below (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 and Class A-IO
         Certificates;

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

                           (ix)     a letter from Fitch to the effect that it
         has assigned a rating of "AAA" to the Class A and Class A-IO
         Certificates and "AA" to the Class M Certificates;

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

                           (xi)     an opinion or opinions of counsel for the
         Servicer, in form and substance acceptable to the Depositor, its
         counsel, the Certificate Insurer, Moody's, S&P

                                       35

<PAGE>

         and Fitch (it being agreed that the opinion shall expressly provide
         that the Unaffiliated Seller shall be entitled to rely on the opinion);

                           (xii)    an opinion or opinions of the counsel for
         the Originators and the Unaffiliated Seller as to corporate securities,
         true sale and 10b-5 matters;

                           (xiii)   an opinion of the counsel for the Depositor
         and the Underwriters as to tax and 10b-5 matters;

                           (xiv)    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, S&P and Fitch (it being agreed
         that the opinion shall expressly provide that the Unaffiliated Seller
         shall be entitled to rely on the opinion); and

                           (xv)     the Interest Rate Hedge Agreement.

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

                  (h)      All other terms and conditions of this Agreement and
the Pooling and Servicing Agreement shall be complied with.

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

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<PAGE>

                           (ii)     a letter from Moody's to the effect that it
         has assigned a rating of "Aaa" to the Class A and Class A-IO
         Certificates;

                           (iii)    a letter from S&P to the effect that it has
         assigned a rating of "AAA" to the Class A and Class A-IO Certificates
         and "AA" to the Class M Certificates;

                           (iv)     a letter from Fitch to the effect that it
         has assigned a rating of "AAA" to the Class A and Class A-IO
         Certificates and "AA" to the Class M Certificates;

                           (v)      an opinion or opinions of the counsel for
         the Originators and the Unaffiliated Seller as to corporate securities,
         true sale and 10b-5 matters;

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

                           (vii)    an opinion of counsel for the Certificate
         Insurer, in form and substance acceptable to the Unaffiliated Seller,
         its counsel, Moody's, S&P and Fitch; and

                           (viii)   an opinion of counsel for the Depositor, in
         form and substance acceptable to the Unaffiliated Seller, its counsel,
         Moody's, S&P and Fitch.

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

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

                                   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

                                       37

<PAGE>

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., 383 Madison Avenue,
10th Floor, New York, New York 10179, 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
2003-1, 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
parties to this Agreement and the 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

                                       38

<PAGE>

Unaffiliated Seller and by the Unaffiliated Seller to the Depositor as
contemplated by this Unaffiliated Seller's Agreement be, and be treated for all
purposes as, a sale of the Mortgage Loans and that the conveyance of the
Mortgage Loans by the Unaffiliated Seller to the Depositor as contemplated by
this Unaffiliated Seller's Agreement be, and be treated for accounting purposes
as, a sale of the Mortgage Loans. It is, further, not the intention of the
parties that such conveyance be deemed a pledge of the Mortgage Loans by the
Originators to the Unaffiliated Seller or by the Unaffiliated Seller to the
Depositor to secure a debt or other obligation of the Originators or the
Unaffiliated Seller, as the case may be. However, in the event that,
notwithstanding the intent of the parties, the Mortgage Loans are held to
continue to be property of the Originators or the Unaffiliated Seller then (a)
this Unaffiliated Seller's Agreement shall also be deemed to be a security
agreement within the meaning of Articles 8 and 9 of the Uniform Commercial Code;
(b) the transfer of the Mortgage Loans provided for herein shall be deemed to be
a grant by the Originators to the Unaffiliated Seller and by the Unaffiliated
Seller to the Depositor of a security interest in all of such parties' right,
title and interest in and to the Mortgage Loans and all amounts payable on the
Mortgage Loans in accordance with the terms thereof and all proceeds of the
conversion, voluntary or involuntary, of the foregoing into cash, instruments,
securities or other property; (c) the possession by the Depositor of Mortgage
Notes and such other items of property as constitute instruments, money,
negotiable documents or tangible chattel paper shall be deemed to be "taking
possession of the collateral" for purposes of perfecting the security interest
pursuant to Section 9-312 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,
with the prior written consent of the Certificate Insurer (absent a Certificate
Insurer Default), 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 and the Certificate Insurer 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 Offered

                                       39

<PAGE>

Certificates, adversely affect in any material respect the interests of any
Certificateholder; and provided, further, that no such amendment shall (x)
reduce in any manner the amount of, or delay the timing of, payments received on
Mortgage Loans which are required to be distributed on any Certificate without
the consent of the Holder of such Certificate, or (y) change the rights or
obligations of any other party hereto without the consent of such party, or (z)
cause the Unaffiliated Seller to conduct any activity not permitted for
qualified special purpose entities under the current accounting literature.

                  (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, or, following the occurrence of a Certificate Insurer
Default, 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 and
the Certificate Insurer receives an Opinion of Counsel, at the expense of the
party requesting the change, that such change will not adversely affect the
status of any REMIC created under the Pooling and Servicing Agreement as a REMIC
or cause a tax to be imposed on any such 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 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 and the
Originators.

                  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

                                       40

<PAGE>

MANHATTAN IN NEW YORK CITY, AND EACH WAIVES PERSONAL SERVICE OF ANY AND ALL
PROCESS UPON IT AND CONSENTS THAT ALL SUCH SERVICE OF PROCESS BE MADE BY
REGISTERED MAIL DIRECTED TO THE ADDRESS SET FORTH IN SECTION 6.01 OF THIS
AGREEMENT AND SERVICE SO MADE SHALL BE DEEMED TO BE COMPLETED FIVE DAYS AFTER
THE SAME SHALL HAVE BEEN DEPOSITED IN THE U.S. MAIL, POSTAGE PREPAID. THE
ORIGINATORS, THE DEPOSITOR AND THE UNAFFILIATED SELLER EACH HEREBY WAIVES ANY
OBJECTION BASED ON FORUM NON CONVENIENS, AND ANY OBJECTION TO VENUE OF ANY
ACTION INSTITUTED HEREUNDER AND CONSENTS TO THE GRANTING OF SUCH LEGAL OR
EQUITABLE RELIEF AS IS DEEMED APPROPRIATE BY THE COURT. NOTHING IN THIS SECTION
SHALL AFFECT THE RIGHT OF THE ORIGINATORS, THE DEPOSITOR AND THE UNAFFILIATED
SELLER TO SERVE LEGAL PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR AFFECT ANY
SUCH PARTIES' RIGHT TO BRING ANY ACTION OR PROCEEDING IN THE COURTS OF ANY OTHER
JURISDICTION.

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

                  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]

                                       41

<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 2003-1, INC.

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

                                           AMERICAN BUSINESS CREDIT, INC.

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

                       FINANCIAL GUARANTY INSURANCE POLICY

<TABLE>
<CAPTION>
INSURED CERTIFICATES:                               MAXIMUM CLASS M INSURED PRINCIPAL PAYMENT:
<S>                                                 <C>
ABFS Mortgage Loan Trust 2003-1,
Mortgage Pass-Through Certificates, Series 2003-1,                $63,000,000.00
Class M (the "Class M Certificates")
</TABLE>

POLICY NO.: FANI-0509-03090-NY

                                              EFFECTIVE DATE: March 31, 2003

         RADIAN ASSET ASSURANCE INC., a New York stock insurance company
regulated by the Insurance Department of the State of New York (the "Insurer"),
in consideration of the payment of the Premium (as defined herein) and subject
to the terms of this Financial Guaranty Insurance Policy (this "Policy"), hereby
unconditionally and irrevocably guarantees that an amount equal to each Insured
Payment (as defined herein) will be received from the Insurer by JPMorgan Chase
Bank, as trustee under the P&S Agreement (as defined herein) or any successor
thereto (the "Trustee") for the benefit of the Class M Certificateholders (as
defined herein); provided, however, that the aggregate of all Class M Insured
Principal Payments (as defined herein) shall not exceed the Maximum Class M
Insured Principal Payment. Insured Payments shall be made by or on behalf of the
Insurer only at the time set forth in this Policy and no accelerated Insured
Payments shall be made regardless of any acceleration of the Class M
Certificates unless the Insurer shall elect, in its sole discretion, to pay such
principal due upon such acceleration together with any accrued interest thereon.
Capitalized terms used and not defined herein shall have the meanings assigned
to them in the P&S Agreement.

         Notwithstanding anything contained herein to the contrary, this Policy
does not cover shortfalls, if any, attributable to taxes required to be paid or
withheld in respect of payments on the Class M Certificates (including interest
and penalties in respect thereof).

<PAGE>

         1.       Definitions. As used herein, the following terms shall have
the following meanings:

         "Business Day" means any day other than a Saturday, a Sunday or a day
on which banking institutions in New York, New York or in the city in which the
corporate trust office of the Trustee under the P&S Agreement is located, are
authorized or obligated by law or executive order to close.

         "Class M Certificateholder" means any Holder of a Class M Certificate.

         "Class M Collateralization Deficit" shall mean, with respect to any
Distribution Date immediately prior to which the Class M Certificates are
outstanding, the lesser of (i) the amount, if any, by which (A) the aggregate
Certificate Principal Balance of the Class A and Class M Certificates (after
giving effect to all distributions to be made thereon on such Distribution Date
other than any portion thereof consisting of a Class M Insured Principal Payment
in respect of a Class M Collateralization Deficit) exceeds (B) the Aggregate
Principal Balance of the Mortgage Loans on the last day of the immediately
preceding Due Period (after giving effect to scheduled payments of principal due
during the related Due Period, to the extent received or advanced, and
unscheduled collections of principal received during the preceding calendar
month), and (ii) the Certificate Principal Balance of the Class M Certificates
(after giving effect to all distributions to be made thereon on such
Distribution Date other than any portion thereof consisting of a Class M Insured
Principal Payment in respect of a Class M Collateralization Deficit).

         "Class M Deficiency Amount" means, with respect to any Distribution
Date and the Class M Certificates, the sum of (i) any Class M Insured Interest
Payment for such Distribution Date and (ii) any Class M Insured Principal
Payment for such Distribution Date.

         "Class M Insured Interest Payment" shall mean, with respect to any
Distribution Date and the Class M Certificates, the excess, if any, of (i) the
sum of the Class Monthly Interest and (without duplication) any Class Interest
Carryover Shortfall for the Class M Certificates for such Distribution Date over
(ii) the Net Available Amount remaining on deposit in the Distribution Account
following the payment of the Class Monthly Interest and any Class Interest
Carryover Shortfall on the Class A and the Class A-IO Certificates on such
Distribution Date.

         "Class M Insured Principal Payment" shall mean, with respect to any
Distribution Date other than the Final Insured Distribution Date and the Class M
Certificates, the lesser of (i) the Class M Collateralization Deficit, if any,
for such Distribution Date and (ii) the Applied Realized Loss Amount applied in
reduction of the Certificate Principal Balance of the Class M Certificates on
such Distribution Date (after taking into account any funds in the Interest Rate
Hedge Payment Fund which are applied on such Distribution Date towards the
payment of such Applied Realized Loss Amount). With respect to the related Final
Insured Distribution Date and the Class M Certificates, the aggregate
Certificate Principal Balance of the Class M Certificates (after giving effect
to all distributions to be made thereon on such Distribution Dateother than any
portion thereof consisting of a Class M Insured Principal Payment).

                                       2

<PAGE>

         "Final Insured Distribution Date" means the Distribution Date in August
15, 2033.

         "Fiscal Agent" has the meaning provided in Section 4 of this Policy.

         "Holder" means any Person who is the registered owner or beneficial
owner of any of the Class M Certificates and who, on the applicable Distribution
Date, is entitled under the terms of the the Class M Certificates to payment
thereunder.

         "Insurance Agreement" means the Insurance and Indemnity Agreement dated
the Effective Date among the Insurer, American Business Credit, Inc. d/b/a
Upland Mortgage, as an Original Mortgage Loan Seller and as Servicer,
HomeAmerican Credit, Inc., as an Original Mortgage Loan Seller, American
Business Mortgage Services, Inc., as an Original Mortgage Loan Seller, ABFS
2003-1, Inc., as Secondary Mortgage Loan Seller, Bear Stearns Asset Backed
Securities, Inc., as Depositor, and JPMorgan Chase Bank, as Trustee, Back-up
Servicer and Collateral Agent, as the same may be amended, modified or
supplemented from time to time.

         "Insured Payment" shall mean, with respect to any Distribution Date,
the sum of any Class M Deficiency Amount for such Distribution Date and any
Preference Amount for such Distribution Date. An Insured Payment shall not
include any Prepayment Interest Shortfalls, any Relief Act Interest Shortfalls
or any Net WAC Cap Carryover Amounts.

         "Insurer" shall mean Radian Asset Assurance Inc., or any successor
thereto, as issuer of this Policy.

         "P&S Agreement" means the Pooling and Servicing Agreement, dated as of
March 1, 2003, among American Business Credit, Inc., as Servicer, Bear Stearns
Asset Backed Securities, Inc., as Depositor, and JPMorgan Chase Bank, as
Trustee, Back-up Servicer and Collateral Agent, without regard to any amendment
or supplement thereto unless such amendment or supplement has been approved in
writing by the Insurer.

         "Preference Amount" means any amount previously paid in respect of the
Class M Certificates that is recoverable and sought to be recovered as avoidable
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,
non-appealable order of a court of competent jurisdiction.

         "Receipt" and "Received" mean actual delivery to the Insurer and to the
Fiscal Agent (as defined below), if any, prior to 12:00 noon, New York City
time, on a Business Day; delivery either on a day that is not a Business Day, or
after 12:00 noon, New York City time, shall be deemed to be receipt on the next
succeeding Business Day. If any notice or certificate given hereunder is not in
proper form or is not properly completed, executed or delivered, or otherwise
insufficient for the purpose of making a claim under this Policy, it shall be
deemed not to have been Received, and the Insurer or its Fiscal Agent shall
promptly so advise the Trustee and the Trustee may submit an amended or
corrected notice.

         "Trust Fund" has the meaning assigned to such term in the P&S
Agreement.

                                       3

<PAGE>

         "Trustee" shall mean JPMorgan Chase Bank, or any successor thereto
under the P&S Agreement.

         2.       Notices and Conditions to Payment.

                  (a)      Following Receipt by the Insurer of a notice and
certificate from the Trustee in the form attached as Exhibit A to this Policy,
the Insurer will pay any related Class M Deficiency Amount payable hereunder in
respect of the Class M Certificates out of the funds of the Insurer on the later
to occur of (a) 12:00 noon, New York City time, on the second Business Day
following such Receipt; and (b) 12:00 noon, New York City time, on the
Distribution Date on which such Class M Deficiency Amount is due. Such Class M
Deficiency Amount will be disbursed to the Trustee by wire transfer of
immediately available funds.

                  (b)      The Insurer shall pay any Preference Amount on the
later of (a) the date when due to be paid pursuant to the Order referred to
below or (b) the first Distribution Date occurring on or after the fourth
Business Day following Receipt on a Business Day by the Insurer of (i) a
certified copy of a final, non-appealable order of a court or other governmental
body that exercised jurisdiction in such insolvency proceeding to the effect
that the Trustee or the Holder, as applicable, is required to return such
Preference Amount paid during the term of this Policy because such payments were
avoided as a preferential transfer or otherwise rescinded or required to be
restored by the Trustee or the Holder under applicable bankruptcy law (the
"Order"), (ii) a certificate by or on behalf of the Trustee or the Holder that
the Order has been entered and is not subject to any stay, (iii) an assignment,
in form and substance satisfactory to the Insurer, duly executed and delivered
by the Trustee or the Holder, as applicable, irrevocably assigning to the
Insurer all rights and claims of the Trustee or the Holder, as applicable,
relating to or arising under the P&S Agreement against the Trust Fund or
otherwise with respect to such Preference Amount and (iv) Receipt of a notice
and certificate as described in Section 2(a) above appropriately completed and
executed by the Trustee. Such payment shall be disbursed to the receiver,
conservator, debtor-in-possession or trustee in bankruptcy named in the Order,
and not to the Trustee or the Holder, as applicable, directly, unless the
Trustee or the Holder, as applicable, has made a payment of the Preference
Amount to the court or such receiver, conservator, debtor-in-possession or
trustee in bankruptcy named in the Order, in which case the Insurer will pay the
Trustee for distribution to the Holder, subject to the delivery of (a) the items
referred to in clauses (i), (ii), (iii) and (iv) above to the Insurer and (b)
evidence satisfactory to the Insurer that payment has been made to such court or
receiver, conservator, debtor-in-possession or trustee in bankruptcy named in
the Order.

                  (c)      The Insurer's obligations hereunder in respect of
Insured Payments shall be discharged to the extent funds are disbursed by the
Insurer as provided herein whether or not such funds are properly applied by the
Trustee.

                                       4

<PAGE>

         3.       GOVERNING LAW. THIS POLICY IS BEING ISSUED UNDER AND PURSUANT
TO THE INSURANCE AGREEMENT AND SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE
WITH, THE LAWS OF THE STATE OF NEW YORK, WITHOUT GIVING EFFECT TO THE CONFLICT
OF LAWS PRINCIPLES THEREOF.

         4.       Fiscal Agent. At any time during the term of this Policy, the
Insurer may appoint a fiscal agent (the "Fiscal Agent") for purposes of this
Policy by written notice to the Trustee at the notice address specified in the
P&S Agreement specifying the name and notice address of the Fiscal Agent. From
and after the date of receipt of such notice by the Trustee, (i) copies of all
notices and documents required to be delivered to the Insurer pursuant to this
Policy shall be simultaneously delivered to the Fiscal Agent and to the Insurer
and shall not be deemed Received until Received by both, and (ii) all payments
required to be made by the Insurer under this Policy may be made directly by the
Insurer or by the Fiscal Agent on behalf of the Insurer. The Fiscal Agent is the
agent of the Insurer only and the Fiscal Agent shall in no event be liable to
any Class M Certificateholder for any acts of the Fiscal Agent or any failure of
the Insurer to deposit, or cause to be deposited, sufficient funds to make
payments due under this Policy.

         5.       Waiver of Defenses. To the fullest extent permitted by
applicable law, the Insurer agrees not to assert, and hereby waives, for the
benefit of each Certificateholder, all rights (whether by counterclaim, setoff
or otherwise) and defenses (including, without limitation, the defense of
fraud), whether acquired by subrogation, assignment or otherwise, to the extent
that such rights and defenses may be available to the Insurer to avoid payment
of its obligations under this Policy in accordance with the express provisions
of this Policy. In particular, and without limiting the foregoing, in the event
a breach of any representation or warranty made by Bear Stearns Asset Backed
Securities, Inc. occurs, the Insurer will nevertheless make all payments in
accordance with this Policy without setoff or reduction and will assert any
claims against Bear Stearns Asset Backed Securities, Inc. separately.

         6.       Notices. All notices to be given hereunder shall be in writing
(except as otherwise specifically provided herein) and shall be mailed by
registered mail or personally delivered or telecopied to the Insurer as follows:

                 Radian Asset Assurance Inc.
                 335 Madison Avenue
                 New York, New York 10017
                 Attention: Chief Risk Officer and Chief Legal Officer
                 Telephone: (212) 983-5859
                 Facsimile: (212) 682-5377

                  The Insurer may specify a different address or addresses by
writing mailed or delivered to the Trustee. Each such notice shall be effective
only upon Receipt.

                                       5

<PAGE>

         7.       EXCLUSIONS FROM INSURANCE GUARANTY FUNDS. THIS POLICY IS NOT
COVERED BY THE PROPERTY/CASUALTY INSURANCE SECURITY FUND SPECIFIED IN ARTICLE 76
OF THE NEW YORK INSURANCE LAW.

         8.       Surrender of Policy. The Trustee shall surrender this Policy
to the Insurer for cancellation upon expiration of the term of this Policy.

         9.       Assignability. This Policy is neither transferable nor
assignable except, in whole but not in part, to a successor Trustee duly
appointed and qualified under the P&S Agreement. Such transfer and assignment
shall be effective upon receipt by the Insurer of a copy of the instrument
effecting such transfer and assignment signed by the assignor and the assignee,
and a certificate, properly completed and signed by the assignor and the
assignee, in the form of Exhibit B hereto (which shall be conclusive evidence of
such transfer and assignment) and, in such case, the assignee instead of the
assignor shall, without the necessity of further action, be entitled to all the
benefits of and rights under this Policy in the assignor's place, provided that,
in such case, the notice and certificate for payment presented hereunder shall
be a certificate of the assignee and shall be signed by a Person who states
therein that he or she is a duly authorized officer of the assignee.

         10.      No Other Undertakings. This Policy sets forth in full the
undertaking of the Insurer and shall not be amended or otherwise modified by any
other agreement or instrument, including any amendment or other modification to
any other agreement or instrument, and this Policy may not be canceled or
revoked prior to the time it is terminated in accordance with the express terms
hereof.

         11.      No Cancellation; No Refunds. This Policy is not cancelable for
any reason, and the Premiums paid in respect of this Policy are not refundable
for any reason.

                                       6

<PAGE>

         IN WITNESS WHEREOF, the Insurer has caused this Policy to be executed
and delivered as of the Effective Date.

                                                     RADIAN ASSET ASSURANCE INC.

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

<PAGE>

                                                                       EXHIBIT A

                         NOTICE OF CLAIM AND CERTIFICATE

                                     [Date]

Radian Asset Assurance Inc.
335 Madison Avenue
New York, New York 10017
Attention: Manager, Asset-Backed Surveillance

         Re: ABFS Mortgage Loan Trust 2003-1, Mortgage Pass-Through
             Certificates, Series 2003-1, Class M

Ladies and Gentlemen:

         The undersigned, a duly authorized officer of JPMorgan Chase Bank, as
trustee (the "Trustee"), under the Pooling and Servicing Agreement, dated as of
March 1, 2003, among American Business Credit, Inc., as Servicer, Bear Stearns
Asset Backed Securities, Inc., as Depositor, and JPMorgan Chase Bank, as
Trustee, Back-up Servicer and Collateral Agent (the "P&S Agreement"), hereby
certifies to Radian Asset Assurance Inc. (the "Insurer"), with reference to
Insurance Policy No FANI-0509-03090-NY (the "Policy") issued by the Insurer in
respect of the ABFS Mortgage Loan Trust 2003-1, Mortgage Pass-Through
Certificates, Series 2003-1, Class M (the "Class M Certificates"), and the
[Distribution Date] to occur on [Month] [Day], [Year] (the "Applicable Date"),
that:

         1.       The Trustee is the Trustee under the P&S Agreement for the
                  Class M Certificates;

         2.       The relevant Distribution Date or Final Insured Distribution
                  Date is [date].

         3.       [The amount to be paid to the Holders of the Class M
                  Certificates on the Final Insured Distribution Date is
                  $_________________.]

         4.       [There is a Class M Deficiency Amount of $_______________ in
                  respect of the Class M Certificates, which amount is an
                  Insured Payment pursuant to the terms of the Agreement, and
                  consists of a Class M Insured Interest Payment of
                  $_______________ and a Class M Insured Principal Payment of
                  $_______________.] [There is a Preference Amount of
                  $___________ in respect of the Class M Certificates and the
                  relevant Distribution Date.]

         5.       The sum of $_______________ is the Insured Payment that is due
                  for payment.

                                      A-1

<PAGE>

         6.       The Trustee has not heretofore made a demand for the Insured
                  Payment in respect of the Distribution Date.

         7.       The Trustee hereby requests the payment of the Insured Payment
                  that is due for payment be made by the Insurer under the
                  Policy and directs that payment under the Policy be made to
                  the following account by bank wire transfer of federal or
                  other immediately available funds in accordance with the terms
                  of the Policy to:

                  [Trustee's account number.]

         8.       The Trustee hereby agrees that, following receipt of the
                  Insured Payment from the Insurer, it shall (a) hold such
                  amounts in trust and apply the same directly to the
                  distribution of payment on the Class M Certificates when due;
                  (b) not apply such funds for any other purpose; (c) deposit
                  such funds to the Certificate Insurance Payment Account and
                  not commingle such funds with other funds held by the Trustee
                  and (d) maintain an accurate record of such payments with
                  respect to the Insured Certificates and the corresponding
                  claim on the Policy and proceeds thereof.

         9.       The Trustee, on behalf of the Class M Certificateholders,
                  hereby assigns to the Insurer the rights of the Class M
                  Certificateholders with respect to the Class M Certificates to
                  the extent of any payments under the Policy, including,
                  without limitation, any amounts due to the Class M
                  Certificateholders in respect of securities law violations
                  arising from the offer and sale of the Class M Certificates.
                  The foregoing assignment is in addition to, and not in
                  limitation of, rights of subrogation otherwise available to
                  the Insurer in respect of such payments. Payments to the
                  Insurer in respect of the foregoing assignment shall in all
                  cases be subject to and subordinate to the rights of the Class
                  M Certificateholders to receive all Insured Payments. The
                  Trustee shall take such action and deliver such instruments as
                  may be reasonably requested or required by the Insurer to
                  effectuate the purpose or provisions of this clause (9).

         10.      The Trustee, on behalf of the Class M Certificateholders,
                  hereby appoints the Insurer as agent and attorney-in-fact for
                  the Trustee and each such Class M Certificateholder in any
                  legal proceeding with respect to the Class M Certificates. The
                  Trustee hereby agrees that, so long as an Insurer Default (as
                  defined in the P&S Agreement) shall not exist, the Insurer may
                  at any time during the continuation of any proceeding by or
                  against the Obligor under the United States Bankruptcy Code or
                  any other applicable bankruptcy, insolvency, receivership,
                  reorganization, rehabilitation or similar law (an "Insolvency
                  Proceeding") direct all matters relating to such Insolvency
                  Proceeding, including without limitation, (A) all matters
                  relating to any claim in connection with an Insolvency
                  Proceeding seeking the avoidance as a preferential transfer of
                  any payment made with respect

                                      A-2

<PAGE>

                  to the Class M Certificates (a "Preference Claim"), (B) the
                  direction of any appeal of any order relating to any
                  Preference Claim at the expense of the Insurer but subject to
                  reimbursement as provided in the Insurance Agreement and (C)
                  the posting of any surety, supersedeas or performance bond
                  pending any such appeal. In addition, so long as an Insurer
                  Default (as defined in the P&S Agreement) shall not exist, the
                  Trustee hereby agrees that the Insurer shall be subrogated to,
                  and the Trustee on its behalf and on behalf of each Class M
                  Certificateholder, hereby delegates and assigns, to the
                  fullest extent permitted by law, the rights of the Trustee and
                  each Class M Certificateholder in the conduct of any
                  Insolvency Proceeding, including, without limitation, all
                  rights of any party to an adversary proceeding or action with
                  respect to any court order issued in connection with any such
                  Insolvency Proceeding.

         ANY PERSON WHO KNOWINGLY AND WITH INTENT TO DEFRAUD ANY INSURANCE
COMPANY OR OTHER PERSON, FILES AN APPLICATION FOR INSURANCE OR STATEMENT OF
CLAIM CONTAINING ANY MATERIALLY FALSE INFORMATION, OR CONCEALS, FOR THE PURPOSE
OF MISLEADING, INFORMATION CONCERNING ANY FACT MATERIAL THERETO, COMMITS A
FRAUDULENT INSURANCE ACT, WHICH IS A CRIME, AND SHALL BE SUBJECT TO A CIVIL
PENALTY NOT TO EXCEED FIVE THOUSAND DOLLARS AND THE STATED VALUE OF THE CLAIM
FOR EACH SUCH VIOLATION.

         Any capitalized term used in this notice and certificate and not
otherwise defined herein shall have the meaning assigned thereto in the Policy.

                                       A-3

<PAGE>

         IN WITNESS WHEREOF, the Trustee has cause this notice and certificate
to be duly executed and delivered under the Policy as of the date first written
above.
                                              JPMORGAN CHASE BANK, as Trustee

                                              By:_______________________________
                                              Name:
                                              Title:

                                      A-4

<PAGE>

                                                                       EXHIBIT B

Radian Asset Assurance Inc.
335 Madison Avenue
New York, New York 10017
Attention: Manager, Asset-Backed Surveillance

            Re: Policy No. FANI-0509-03090-NY

Ladies and Gentlemen:

         Reference is made to the above-referenced Policy dated March 31, 2003
(the "Policy"), which has been issued by Radian Asset Assurance Inc. in favor of
JPMorgan Chase Bank, as Trustee.

         The undersigned, [Name of Assignor] ("Assignor"), has transferred and
assigned (and hereby confirms to you said transfer and assignment) all of its
rights in and under said Policy to [Name of Assignee] ("Assignee"), and confirms
that Assignor no longer has any rights under or interest in said Policy.

         Assignor and Assignee have indicated on the face of said Policy that it
has been transferred and assigned to Assignee.

         Assignee hereby certifies that it is a duly authorized Assignee under
the terms of said Policy and is accordingly entitled, upon presentation of the
document(s) called for therein, to receive payment thereunder.

[Name of Assignor]

By:_______________________________________________
[Name and Title of Authorized Officer of Assignor]

[Name of Assignee]

By:_______________________________________________
[Name and Title of Authorized Officer of Assignee]

                                      B-1

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