Document:

<PAGE>

                                                                     EXHIBIT 4.3
                                                                     -----------

                                                                   EXECUTED COPY
                                                                   -------------

                          SALE AND SERVICING AGREEMENT

                          dated as of December 1, 2001

                                  by and among

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

                        ABFS MORTGAGE LOAN TRUST 2001-4,
                                   as Issuer,

                         AMERICAN BUSINESS CREDIT, INC.,
                                  as Servicer,

                                       and

                              JPMORGAN CHASE BANK,
                    as Indenture Trustee and Collateral Agent

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                                TABLE OF CONTENTS
<TABLE>
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<S>                                                                                                              <C>
ARTICLE I DEFINITIONS.............................................................................................1

   Section 1.01. Certain Defined Terms............................................................................1
   Section 1.02. Provisions of General Application................................................................1
   Section 1.03. Business Day Certificate.........................................................................2

ARTICLE II SALE AND CONVEYANCE OF THE MORTGAGE LOANS..............................................................2

   Section 2.01. Purchase and Sale of Mortgage Loans..............................................................2
   Section 2.02. [Reserved].......................................................................................3
   Section 2.03. Purchase Price...................................................................................3
   Section 2.04. Possession of Mortgage Files; Access to Mortgage Files...........................................3
   Section 2.05. Delivery of Mortgage Loan Documents..............................................................4
   Section 2.06. Acceptance by Indenture Trustee of the Trust Estate; Certain Substitutions;
                     Certification by Indenture Trustee...........................................................7
   Section 2.07. Grant of Security Interest.......................................................................9
   Section 2.08. Further Action Evidencing Assignments...........................................................10
   Section 2.09. Assignment of Agreement.........................................................................10

ARTICLE III REPRESENTATIONS AND WARRANTIES.......................................................................11

   Section 3.01. Representations of the Servicer and the Unaffiliated Seller.....................................11
   Section 3.02. Representations, Warranties and Covenants of the Depositor......................................13
   Section 3.03. Representations, Warranties and Covenants of the Collateral Agent...............................15
   Section 3.04. Representations, Warranties and Covenants of the Indenture Trustee..............................15

ARTICLE IV THE MORTGAGE LOANS....................................................................................16

   Section 4.01. Representations and Warranties Concerning the Mortgage Loans....................................16
   Section 4.02. Purchase and Substitution.......................................................................16

ARTICLE V ADMINISTRATION AND SERVICING OF THE MORTGAGE LOANS.....................................................18

   Section 5.01. The Servicer....................................................................................18
   Section 5.02. Collection of Certain Mortgage Loan Payments; Collection Account................................19
   Section 5.03. Permitted Withdrawals from the Collection Account...............................................20
   Section 5.04. Hazard Insurance Policies; Property Protection Expenses.........................................21
   Section 5.05. Assumption and Modification Agreements..........................................................22
   Section 5.06. Realization Upon Defaulted Mortgage Loans.......................................................23
   Section 5.07. Indenture Trustee to Cooperate..................................................................24
   Section 5.08. Servicing Compensation; Payment of Certain Expenses by Servicer.................................24
   Section 5.09. Annual Statement as to Compliance...............................................................25
   Section 5.10. Annual Independent Public Accountants' Servicing Report.........................................25
   Section 5.11. Access to Certain Documentation.................................................................25
   Section 5.12. Maintenance of Fidelity Bond....................................................................26
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<S>                                                                                                             <C>
   Section 5.13. The Subservicers................................................................................26
   Section 5.14. Reports to the Indenture Trustee; Collection Account Statements.................................26
   Section 5.15. Optional Purchase of Defaulted Mortgage Loans...................................................26
   Section 5.16. Reports to be Provided by the Servicer..........................................................27
   Section 5.17. Adjustment of Servicing Compensation in Respect of Prepaid Mortgage Loans.......................29
   Section 5.18. Periodic Advances; Special Advance..............................................................29
   Section 5.19. Indemnification; Third Party Claims.............................................................30
   Section 5.20. Maintenance of Corporate Existence and Licenses; Merger or Consolidation of the Servicer........30
   Section 5.21. Assignment of Agreement by Servicer; Servicer Not to Resign.....................................31
   Section 5.22. Periodic Filings with the Securities and Exchange Commission; Additional Information............31

ARTICLE VI APPLICATION OF FUNDS..................................................................................32

   Section 6.01. Deposits to the Distribution Account............................................................32
   Section 6.02. Collection of Money.............................................................................32
   Section 6.03. Application of Principal and Interest...........................................................32
   Section 6.04. Information Concerning the Mortgage Loans.......................................................32
   Section 6.05. Compensating Interest...........................................................................32
   Section 6.06. Effect of Payments by the Note Insurer; Subrogation.............................................33

ARTICLE VII SERVICER DEFAULT.....................................................................................33

   Section 7.01. Servicer Events of Default......................................................................33
   Section 7.02. Indenture Trustee to Act; Appointment of Successor..............................................35
   Section 7.03. Waiver of Defaults..............................................................................37
   Section 7.04. Rights of the Note Insurer to Exercise Rights of the Noteholders................................37
   Section 7.05. Indenture Trustee To Act Solely with Consent of the Note Insurer................................38
   Section 7.06. Mortgage Loans, Trust Estate and Accounts Held for Benefit of the Note Insurer..................38
   Section 7.07. Note Insurer Default............................................................................39

ARTICLE VIII TERMINATION.........................................................................................39

   Section 8.01. Termination.....................................................................................39
   Section 8.02. Additional Termination Requirements.............................................................40
   Section 8.03. Accounting Upon Termination of Servicer.........................................................40

ARTICLE IX THE COLLATERAL AGENT..................................................................................41

   Section 9.01. Duties of the Collateral Agent..................................................................41
   Section 9.02. Certain Matters Affecting the Collateral Agent..................................................42
   Section 9.03. Collateral Agent Not Liable for Notes or Mortgage Loans.........................................43
   Section 9.04. Collateral Agent May Own Notes..................................................................44
   Section 9.05. Collateral Agent's Fees and Expenses; Indemnity.................................................44
   Section 9.06. Eligibility Requirements for Collateral Agent...................................................44
   Section 9.07. Resignation and Removal of the Collateral Agent.................................................44
   Section 9.08. Successor Collateral Agent......................................................................45
   Section 9.09. Merger or Consolidation of Collateral Agent.....................................................46
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                                       ii

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<S>                                                                                                            <C>
ARTICLE X MISCELLANEOUS PROVISIONS...............................................................................46

   Section 10.01. Limitation on Liability........................................................................46
   Section 10.02. Acts of Noteholders............................................................................46
   Section 10.03. Amendment......................................................................................47
   Section 10.04. Recordation of Agreement.......................................................................48
   Section 10.05. Duration of Agreement..........................................................................48
   Section 10.06. Notices........................................................................................48
   Section 10.07. Severability of Provisions.....................................................................48
   Section 10.08. No Partnership.................................................................................49
   Section 10.09. Counterparts...................................................................................49
   Section 10.10. Successors and Assigns.........................................................................49
   Section 10.11. Headings.......................................................................................49
   Section 10.12. The Note Insurer Default.......................................................................49
   Section 10.13. Third Party Beneficiary........................................................................49
   Section 10.14. Intent of the Parties..........................................................................49
   Section 10.15. GOVERNING LAW; CONSENT TO JURISDICTION; WAIVER OF JURY TRIAL...................................49

                                    EXHIBITS

EXHIBIT A  Contents of the Mortgage File
EXHIBIT B  Indenture Trustee's Acknowledgement of Receipt
EXHIBIT C  Collateral Agent's Acknowledgement of Receipt
EXHIBIT D  Initial Certification of Collateral Agent
EXHIBIT E  Final Certification of Collateral Agent
EXHIBIT F  Request for Release of Documents
EXHIBIT G  [Reserved]

SCHEDULES

SCHEDULE I  Mortgage Loan Schedule

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                                      iii
<PAGE>

         SALE AND SERVICING AGREEMENT, dated as of December 1, 2001 (this
"Agreement"), by and among BEAR STEARNS ASSET BACKED SECURITIES, INC., a
Delaware corporation, as depositor (the "Depositor"), ABFS MORTGAGE LOAN TRUST
2001-4, a Delaware statutory business trust, as issuer (the "Trust"), AMERICAN
BUSINESS CREDIT, INC., a Pennsylvania corporation, as servicer (the "Servicer"),
and JPMORGAN CHASE BANK, a New York banking corporation, as indenture trustee
and collateral agent (respectively, the "Indenture Trustee" and the "Collateral
Agent").

                               W I T N E S S E T H

         WHEREAS, the Depositor desires to sell to the Trust, and the Trust
desires to purchase from the Depositor, the mortgage loans (the "Mortgage
Loans") listed on Schedule I to this Agreement;

         WHEREAS, immediately after such purchase, the Trust will pledge such
Mortgage Loans to the Indenture Trustee pursuant to the terms of an
Indenture, dated as of December 1, 2001 (the "Indenture"), between the Trust and
the Indenture Trustee, and issue the ABFS Mortgage Loan Trust 2001-4, Mortgage
Backed Notes (the "Notes");

         WHEREAS, the Servicer has agreed to service the Mortgage Loans, which
constitute the principal assets of the Trust;

         WHEREAS, the Collateral Agent will hold, on behalf of the Indenture
Trustee, the Mortgage Loans and certain other assets pledged to the Indenture
Trustee pursuant to the Indenture; and

         WHEREAS, MBIA Insurance Corporation (the "Note Insurer") is intended to
be a third-party beneficiary of this Agreement, and is hereby recognized by the
parties hereto as a third-party beneficiary of this Agreement.

         NOW, THEREFORE, in consideration of the premises and the mutual
agreements herein contained, the Trust, the Depositor, the Servicer, the
Collateral Agent and the Indenture Trustee hereby agree as follows:

                                   ARTICLE I

                                  DEFINITIONS

         Section 1.01. Certain Defined Terms. Capitalized terms used herein but
not defined herein shall have the meanings ascribed to such terms in Appendix I
attached hereto.

         Section 1.02. Provisions of General Application. (a) All accounting
terms not specifically defined herein shall be construed in accordance with
GAAP.

         (b) The terms defined herein and in Appendix I to the Indenture include
the plural as well as the singular.

                                       1
<PAGE>

         (c) The words "herein," "hereof" and "hereunder" and other words of
similar import refer to this Agreement as a whole. All references to Articles
and Sections shall be deemed to refer to Articles and Sections of this
Agreement.

         (d) Any reference to statutes are to be construed as including all
statutory provisions consolidating, amending or replacing the statute to
which reference is made and all regulations promulgated pursuant to such
statutes.

         (e) All calculations of interest with respect to the Class A Notes
provided for herein shall be made on the basis of a 360-day year consisting of
twelve 30-day months. All calculations of interest with respect to any Mortgage
Loan provided for herein shall be made in accordance with the terms of the
related Mortgage Note and Mortgage or, if such documents do not specify the
basis upon which interest accrues thereon, on the basis of a 360-day year
consisting of twelve 30-day months, to the extent permitted by applicable law.

         (f) Any Mortgage Loan payment is deemed to be received on the date such
payment is actually received by the Servicer; provided, however, that, for
purposes of calculating payments on the Notes, prepayments with respect to any
Mortgage Loan are deemed to be received on the date they are applied in
accordance with Accepted Servicing Practices consistent with the terms of the
related Mortgage Note and Mortgage to reduce the outstanding Principal Balance
of such Mortgage Loan on which interest accrues.

         Section 1.03. Business Day Certificate. On the Closing Date (with
respect to the calendar year 2001) and thereafter, within fifteen (15) days
prior to the end of each calendar year while this Agreement remains in effect
(with respect to the succeeding calendar years), the Servicer shall provide to
the Indenture Trustee and the Collateral Agent a certificate of a Servicing
Officer specifying the days on which banking institutions in the Commonwealth of
Pennsylvania are authorized or obligated by law, executive order or governmental
decree to be closed.

                                   ARTICLE II

                    SALE AND CONVEYANCE OF THE MORTGAGE LOANS

         Section 2.01. Purchase and Sale of Mortgage Loans. The Depositor does
hereby sell, transfer, assign, set over and convey to the Trust, without
recourse, but subject to the terms and provisions of this Agreement, all of the
right, title and interest of the Depositor in and to the Mortgage Loans,
including the outstanding principal as of, and interest due and accruing after
the Cut-off Date on such Mortgage Loans listed on Schedule I attached hereto,
and all other assets included or to be included in the Trust Estate. In
connection with such transfer and assignment, and pursuant to Section 2.07 of
the Unaffiliated Seller's Agreement, the Depositor does hereby also irrevocably
transfer, assign, set over and otherwise convey to the Indenture Trustee, on
behalf of the Trust, all of its rights under the Unaffiliated Seller's
Agreement, including, without limitation, its right to exercise the remedies
created by Sections 2.06 and 3.05 of the Unaffiliated Seller's Agreement for
defective documentation and for breaches of certain representations and
warranties, agreements and covenants of the Unaffiliated Seller and the
Originators contained in Sections 3.01, 3.02 and 3.03 of the Unaffiliated
Seller's Agreement.

                                       2
<PAGE>

         Section 2.02. [Reserved]

         Section 2.03. Purchase Price. On the Closing Date, as full
consideration for the Depositor's sale of the Mortgage Loans to the Trust, the
Underwriter, on behalf of the Trust, will deliver to, or at the direction of,
the Depositor (i) an amount in cash equal to the sum of (A) [__]% of the
Original Aggregate Principal Balance as of the Closing Date of the Class A
Notes, plus (B) accrued interest on the Original Aggregate Principal Balance of
the Class A Notes at the rate of 5.35% per annum from (and including) December
1, 2001 to (but not including) the Closing Date, payable by wire transfer of
same day funds, and (ii) the Trust Certificates to be issued pursuant to the
Trust Agreement.

         Section 2.04. Possession of Mortgage Files; Access to Mortgage Files.
(a) Upon the receipt by the Depositor, or its designee, of the purchase price
for the Mortgage Loans set forth in Section 2.03 hereof and the issuance of the
Notes pursuant to the Indenture, the ownership of each Mortgage Note, each
Mortgage and the contents of the Mortgage File related to each Mortgage Loan
will be vested in the Trust, and will be pledged to the Indenture Trustee, for
the benefit of the Noteholders and the Note Insurer.

         (b) Pursuant to Section 2.05 hereof and Section 2.05 of the
Unaffiliated Seller's Agreement, the Unaffiliated Seller has delivered or caused
to be delivered the Indenture Trustee's Mortgage File related to each Mortgage
Loan to the Collateral Agent, on behalf of the Indenture Trustee.

         (c) The Collateral Agent, on behalf of the Indenture Trustee, will be
the custodian, on behalf of the Indenture Trustee, with the consent of the Note
Insurer, to hold the Indenture Trustee's Mortgage Files in trust for the benefit
of all present and future Noteholders and the Note Insurer. In the event the
Collateral Agent resigns or is removed, the Indenture Trustee shall either (x)
hold the Indenture Trustee's Mortgage Files, or (y) with the consent of the Note
Insurer appoint a successor Collateral Agent to hold the Indenture Trustee's
Mortgage Files as set forth in Section 9.08 hereof.

         (d) The Collateral Agent shall afford the Depositor, the Trust, the
Note Insurer and the Servicer reasonable access to all records and documentation
regarding the Mortgage Loans relating to this Agreement, such access being
afforded, upon reasonable prior written request and during normal business hours
at the offices of the Collateral Agent at customary charges.

                                       3
<PAGE>

         Section 2.05. Delivery of Mortgage Loan Documents. (a) In connection
with the transfer and assignment of the Mortgage Loans, the Depositor shall
deliver or cause to be delivered to the Collateral Agent, on behalf of the
Indenture Trustee, the following documents or instruments with respect to each
Mortgage Loan so transferred or assigned:

                  (i) the original Mortgage Note, endorsed without recourse in
         blank by the related Originator, including all intervening endorsements
         showing a complete chain of endorsement;

                  (ii) the related Mortgage with evidence of recording indicated
         thereon or a copy thereof certified by the applicable recording office;

                  (iii) the recorded Assignment of Mortgage, or copy thereof
         certified by the applicable recording office, if any, showing a
         complete chain of assignment from the originator of the related
         Mortgage Loan to the related Originator (which assignment may, at such
         Originator's option, be combined with the assignment referred to in
         subpart (iv) hereof);

                  (iv) an Assignment of Mortgage in recordable form (which, if
         acceptable for recording in the relevant jurisdiction, may be included
         in a blanket assignment or assignments) of each Mortgage from the
         related Originator to the Indenture Trustee;

                  (v) originals of all assumption, modification and substitution
         agreements in those instances where the terms or provisions of a
         Mortgage or Mortgage Note have been modified or such Mortgage or
         Mortgage Note has been assumed; and

                  (vi) an original title insurance policy (or (A) a copy of the
         title insurance policy, or (B) a binder thereof or copy of such binder
         together with a certificate from the related Originator that the
         original Mortgage has been delivered to the title insurance company
         that issued such binder for recordation).

         In instances where the original recorded Mortgage and any original
recorded Assignment of Mortgage thereof pursuant to clause (iii) above cannot be
delivered by the Depositor to the Collateral Agent on behalf of the Indenture
Trustee prior to or concurrently with the execution and delivery of this
Agreement, due to a delay in connection with recording, the Depositor may:

         (x) In lieu of delivering such original recorded Mortgage, deliver to
the Collateral Agent on behalf of the Indenture Trustee a copy thereof provided
that the related Originator certifies that the original Mortgage has been
delivered to a title insurance company for recordation after receipt of its
policy of title insurance or binder therefor; and

         (y) In lieu of delivering the original recorded Assignment of Mortgage,
deliver to the Collateral Agent on behalf of the Indenture Trustee a copy of the
Assignment of Mortgage certified by the related Originator.

         Indenture Trustee shall promptly upon receipt thereof, with respect to
each Mortgage Note described in clause (i) above and each Assignment of Mortgage
described in clause (iv) above, endorse such Mortgage Note and Assignment of
Mortgage as follows: "JPMorgan Chase Bank, as the Indenture Trustee under the
Indenture dated as of December 1, 2001, ABFS Mortgage Loan Trust 2001-4."

                                       4
<PAGE>

         As promptly as practicable, but in any event within thirty (30) days
from the Closing Date, the related Originator shall cause to be recorded, at the
related Originator's expense, in the appropriate public office for real property
records, the Assignments of Mortgages to the Indenture Trustee.

         All original documents relating to the Mortgage Loans which are not
delivered to the Collateral Agent on behalf of the Indenture Trustee, as
permitted by Section 2.05(d) of the Unaffiliated Seller's Agreement and this
Section 2.05(a), are and shall be held by the related Originator, the
Unaffiliated Seller or the Servicer in trust for the benefit of the Indenture
Trustee on behalf of the Noteholders and the Note Insurer.

         (b) Within thirty (30) days following delivery of the Mortgage Files to
the Collateral Agent on behalf of the Indenture Trustee, the Collateral Agent
will review each Mortgage File to ascertain that all required documents set
forth in Section 2.05(a) (other than clause (v) thereof) have been executed and
received, and that such documents relate to the Mortgage Loans identified on the
Mortgage Loan Schedule, and in so doing the Collateral Agent may rely on the
purported due execution and genuineness of any signature thereon. If within such
30-day period (or, with respect to any Qualified Substitute Mortgage Loan,
within thirty (30) days after the assignment thereof) the Collateral Agent on
behalf of the Indenture Trustee finds any document constituting a part of a
Mortgage File not to have been executed or received or to be unrelated to the
Mortgage Loans identified in the Mortgage Loan Schedule, the Collateral Agent
shall promptly notify the Servicer, the Indenture Trustee and the Note Insurer,
and the Servicer shall have a period of sixty (60) days after such notice within
which to correct or cure any such defect. Each original recorded Assignment of
Mortgage shall be delivered to the Collateral Agent, behalf of the Indenture
Trustee within ten (10) days following the date on which it is returned to the
Servicer by the office with which such Assignment of Mortgage was filed for
recording and within ten (10) days following receipt by the Collateral Agent or
the Collateral Agent shall review such Assignment of Mortgage to confirm the
information specified above with respect to the documents constituting the
Mortgage File. Upon receipt by the Collateral Agent on behalf of the Indenture
Trustee of the recorded assignment such recorded assignment shall become part of
the Mortgage File. The Collateral Agent shall notify the Servicer and the
Indenture Trustee of any defect in such assignment based on such review. The
Servicer shall have a period of sixty (60) days following such notice to correct
or cure such defect. In the event that the Servicer fails to record an
Assignment of Mortgage as herein provided the Collateral Agent on behalf of the
Indenture Trustee shall, at the Servicer's expense, use reasonable efforts to
prepare and, if required hereunder, file such assignments for recordation in the
appropriate real property or other records and the Servicer hereby appoints the
Collateral Agent on behalf of the Indenture Trustee as its attorney-in-fact with
full power and authority acting in its stead for the purpose of such
preparation, execution and filing.

                                       5
<PAGE>

         (c) Without diminution of the requirements of Sections 2.04(c) and this
Section 2.05, all original documents relating to the Mortgage Loans that are not
delivered to the Collateral Agent on behalf of the Indenture Trustee, are and
shall be held by the Servicer in trust for the benefit of the Indenture Trustee
on behalf of the Noteholders and the Note Insurer. In the event that any such
original document is required pursuant to the terms of this Section 2.05 to be a
part of a Mortgage File, such document shall be delivered promptly to the
Collateral Agent on behalf of the Indenture Trustee pursuant to the Unaffiliated
Seller's Agreement. In acting as custodian of any such original document, the
Servicer agrees further that it does not and will not have or assert any
beneficial ownership interest in the Mortgage Loans or the Mortgage Files.
Promptly upon the Depositor's and the Trust's acquisition thereof and the
Servicer's receipt thereof, the Servicer, and the Unaffiliated Seller, if
applicable, on behalf of the Trust shall mark conspicuously each original
document not delivered to the Collateral Agent on behalf of the Indenture
Trustee, and note in its master data processing records evidencing each Mortgage
Loan with a legend or data tag, acceptable to the Indenture Trustee and the Note
Insurer, evidencing that the Trust has purchased the Mortgage Loans and all
right and title thereto and interest therein pursuant to the Unaffiliated
Seller's Agreement and pledged such Mortgage Loan and all right and title
thereto and interest therein to the Indenture Trustee, on behalf of the
Noteholders and the Note Insurer.

                                       6
<PAGE>

         Section 2.06. Acceptance by Indenture Trustee of the Trust Estate;
Certain Substitutions; Certification by Indenture Trustee. (a) The Indenture
Trustee, agrees to execute and deliver to the Depositor, the Note Insurer, the
Servicer and the Unaffiliated Seller on or prior to the Closing Date an
acknowledgment of receipt of the Note Insurance Policy, in a form attached as
Exhibit B hereto, and, on or prior to the Closing Date, with respect to each
Mortgage Loan transferred on such date, the original Mortgage Note (with any
exceptions noted), in the form attached as Exhibit C hereto and declares that it
will hold or cause the Collateral Agent on its behalf to hold such documents and
any amendments, replacements or supplements thereto, as well as any other assets
included in the definition of Trust Estate and delivered to it or the Collateral
Agent on its behalf in trust upon and subject to the conditions set forth herein
for the benefit of the Noteholders and the Note Insurer. The Collateral Agent
agrees, for the benefit of the Noteholders and the Note Insurer, to review (or
cause to be reviewed) each Indenture Trustee's Mortgage File within thirty (30)
days after the Closing Date (or, with respect to any Qualified Substitute
Mortgage Loans, within thirty (30) days after the receipt by the Collateral
Agent, on behalf of the Indenture Trustee, thereof), and to deliver to the
Unaffiliated Seller, the Servicer, the Depositor and the Note Insurer a
certification in the form attached hereto as Exhibit D to the effect that, as to
each Mortgage Loan listed in the related 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 Section 2.05 (other than the items listed in
clause (a)(v) thereof) 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 as to the information set forth in (i), (ii), (v) and (vi) of the
definition of "Mortgage Loan Schedule" set forth herein accurately reflects the
information set forth in the Indenture Trustee's Mortgage File delivered on such
date. The Collateral Agent on behalf of the Indenture Trustee shall be under no
duty or obligation to inspect, review or examine any such documents,
instruments, certificates or other papers to determine that they are genuine,
enforceable, or appropriate for the represented purpose or that they are other
than what they purport to be on their face.

         (b) Within ninety (90) days of the Closing Date, with respect to the
Mortgage Loans transferred on such date; the Collateral Agent on behalf of the
Indenture Trustee shall deliver (or cause to be delivered) to the Servicer, the
Unaffiliated Seller, the Depositor, the Rating Agencies and the Note Insurer a
final certification in the form attached hereto as Exhibit E to the effect that,
as to each Mortgage Loan listed in the related 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 Section 2.05 (other than the items
listed in clause (a)(v) thereof) 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 in
(i), (ii), (v) and (vi) of the definition of "Mortgage Loan Schedule" set forth
herein accurately reflects the information set forth in the Indenture Trustee's
Mortgage File delivered on such date.

                                       7
<PAGE>

         (c) If the Collateral Agent on behalf of the Indenture Trustee during
the process of reviewing the Indenture Trustee's Mortgage Files finds any
document constituting a part of a Indenture Trustee's Mortgage File which is not
executed, has not been received, is unrelated to the Mortgage Loan identified in
the related Mortgage Loan Schedule, or does not conform to the requirements of
Section 2.05 or the description thereof as set forth in the related Mortgage
Loan Schedule, the Collateral Agent shall promptly so notify the Servicer, the
Indenture Trustee, the Unaffiliated Seller and the Note Insurer. In performing
any such review, the Collateral Agent on behalf of the Indenture Trustee may
conclusively rely on the Unaffiliated Seller as to the purported genuineness of
any such document and any signature thereon. It is understood that the scope of
the Collateral Agent's review of the Mortgage Files is limited solely to
confirming that the documents listed in Section 2.05 (other than those listed in
clause (v) thereof) have been executed and received and relate to the Mortgage
Files identified in the related Mortgage Loan Schedule. The Collateral Agent on
behalf of the Indenture Trustee shall have no responsibility for determining
whether any document is valid and binding, whether the text of any assignment or
endorsement is in proper or recordable form, whether any document has been
recorded in accordance with the requirements of any applicable jurisdiction, or
whether a blanket assignment is permitted in any applicable jurisdiction.
Pursuant to the Unaffiliated Seller's Agreement, the Unaffiliated Seller and the
Originators have agreed to use reasonable efforts to cause to be remedied a
material defect in a document constituting part of a Mortgage File of which it
is so notified by the Collateral Agent or the Indenture Trustee. If, however,
within sixty (60) days after the Collateral Agent or Indenture Trustee's notice
to it respecting such defect the Unaffiliated Seller or the Originators have not
caused to be remedied the defect and the defect materially and adversely affects
the value of, or the interest of the Noteholders in the related Mortgage Loan or
the interests of the Note Insurer, the Unaffiliated Seller and the Originators
will be obligated, pursuant to the Unaffiliated Seller's Agreement, to either
(i) substitute in lieu of such Mortgage Loan a Qualified Substitute Mortgage
Loan in the manner and subject to the conditions set forth in the Unaffiliated
Seller's Agreement or (ii) purchase such Mortgage Loan at a purchase price equal
to the Principal Balance of such Mortgage Loan as of the date of purchase, plus
all accrued and unpaid interest on such Principal Balance computed at the
Mortgage Interest Rate, net of the Servicing Fee if the Unaffiliated Seller or
an Originator, as applicable, is the Servicer, plus the amount of any
unreimbursed Servicing Advances made by the Servicer with respect to such
Mortgage Loan, which purchase price shall be deposited in the Collection Account
on the next succeeding Servicer Remittance Date, after deducting therefrom any
amounts received in respect of such repurchased Mortgage Loan or Loans and being
held in the Collection Account for future distribution to the extent such
amounts have not yet been applied to principal or interest on such Mortgage Loan
(the "Loan Repurchase Price"). For purposes of calculating the Available Funds,
any Loan Repurchase Price or Substitution Adjustment that is paid shall be
deemed deposited in the Distribution Account in the Due Period preceding such
Servicer Remittance Date.

         (d) Upon receipt by the Indenture Trustee of a certification of a
Servicing Officer of such substitution or purchase and, in the case of a
substitution, upon receipt of the related Indenture Trustee's Mortgage File, and
the deposit of the amounts described above in the Collection Account (which
certification shall be in the form of Exhibit F hereto), the Indenture Trustee
shall release or cause the Collateral Agent to release to the Servicer for
release to the Unaffiliated Seller the related Indenture Trustee's Mortgage File
and shall 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. The Indenture Trustee shall notify the
Note Insurer if the Unaffiliated Seller fails to repurchase or substitute for a
Mortgage Loan in accordance with the foregoing or Section 2.05(c).

                                       8
<PAGE>

         Section 2.07. Grant of Security Interest. (a) It is intended that
the conveyance of the Mortgage Loans and other property by the Depositor to the
Trust as provided in this Article II be, and be construed as, a sale of the
Mortgage Loans and such other property by the Depositor to the Trust. It is,
further, not intended that such conveyance be deemed a pledge of the Mortgage
Loans or such other property by the Depositor to the Trust to secure a debt or
other obligation of the Depositor. However, in the event that the Mortgage Loans
or any of such other property are held to be property of the Depositor, or if
for any reason this Agreement is held or deemed to create a security interest in
the Mortgage Loans or any of such other property, then it is intended that: (i)
this Agreement shall also be deemed to be a security agreement within the
meaning of the Uniform Commercial Code; (ii) the conveyance provided for in this
Article II shall be deemed to be a grant by the Depositor to the Trust of a
security interest in all of the Depositor's right, title and interest in and to
the Mortgage Loans and such other property and all amounts payable to the
holders of 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, including, without limitation,
all amounts from time to time held or invested in the Distribution Account,
whether in the form of cash, instruments, securities or other property; (iii)
the possession by the Collateral Agent, on behalf of the Indenture Trustee, of
the Mortgage Notes and such other items of property as constitute instruments,
money, negotiable documents or chattel paper shall be deemed to be "possession
by the secured party" for purposes of perfecting the security interest pursuant
to the Uniform Commercial Code; and (iv) 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 Indenture Trustee for the purpose of perfecting such security interest
under applicable law. The Depositor, the Servicer, on behalf of the Trust, the
Collateral Agent and the Indenture Trustee, shall, to the extent consistent with
this Agreement, take such actions as may be reasonably necessary to ensure that,
if this Agreement were deemed to create a security interest in the Mortgage
Loans or any of such other property, 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.

         (b) The Unaffiliated Seller, the Depositor and the Servicer shall take
no action inconsistent with the Trust's ownership of the Trust Estate and each
shall indicate or shall cause to be indicated in its records and records held on
its behalf that ownership of each Mortgage Loan and the other assets in the
Trust Estate are held by the Collateral Agent, on behalf of the Indenture
Trustee, for the benefit of the Noteholders and the Note Insurer. The Collateral
Agent is authorized to act, pursuant to the terms of this Agreement, as agent
and bailee of the Indenture Trustee for the benefit of the Noteholders and Note
Insurer and shall be authorized to act at the direction of such parties. In
addition, the Unaffiliated Seller, the Depositor and the Servicer shall respond
to any inquiries from third parties with respect to ownership of a Mortgage Loan
or any other asset in the Trust Estate by stating that it is not the owner of
such asset and that the Trust is the owner of such Mortgage Loan or other asset
in the Trust Estate, which is held by the Collateral Agent, on behalf of the
Indenture Trustee, for the benefit of the Noteholders and the Note Insurer.

                                       9
<PAGE>

         Section 2.08. Further Action Evidencing Assignments. (a) The Servicer
agrees that, from time to time, at its expense, it shall cause the Unaffiliated
Seller to (and the Depositor on behalf of itself also agrees that it shall),
promptly execute and deliver all further instruments and documents, and take all
further action, that may be necessary or appropriate, or that the Servicer, the
Note Insurer (absent a Note Insurer Default), the Indenture Trustee or the
Collateral Agent may reasonably request, in order to perfect, protect or more
fully evidence the transfer of ownership of the Mortgage Loans and other assets
in the Trust Estate or to enable the Collateral Agent, on behalf of the
Indenture Trustee, to exercise or enforce any of its rights hereunder. Without
limiting the generality of the foregoing, the Servicer and the Depositor will,
upon the request of the Servicer, the Note Insurer (absent a Note Insurer
Default), the Indenture Trustee or the Collateral Agent execute and file (or
cause to be executed and filed) such real estate filings, financing or
continuation statements, or amendments thereto or assignments thereof, and such
other instruments or notices, as may be necessary or appropriate.

         (b) The Depositor hereby grants to the Servicer, the Indenture Trustee
and the Collateral Agent powers of attorney to execute all documents on its
behalf under this Agreement and the Unaffiliated Seller's Agreement as may be
necessary or desirable to effectuate the foregoing.

         Section 2.09. Assignment of Agreement. The Depositor hereby
acknowledges and agrees that the Trust may assign its interest under this
Agreement to the Indenture Trustee, for the benefit of the Noteholders and the
Note Insurer, as may be required to effect the purposes of the Indenture,
without further notice to, or consent of, the Depositor, and the Indenture
Trustee shall succeed to such of the rights and obligations of the Trust
hereunder as shall be so assigned. The Trust shall, pursuant to the Indenture,
assign all of its right, title and interest in and to the Mortgage Loans and its
right to exercise the remedies created by the Unaffiliated Seller's Agreement
for breaches of the representations, warranties, agreements and covenants of the
Unaffiliated Seller or the Originators contained in the Unaffiliated Seller's
Agreement, assign such right, title and interest to the Indenture Trustee, for
the benefit of the Noteholders and the Note Insurer. The Depositor agrees that,
upon such assignment to the Indenture Trustee, such representations, warranties,
agreements and covenants will run to and be for the benefit of the Indenture
Trustee and the Indenture Trustee may enforce, without joinder of the Depositor
or the Trust, the repurchase obligations of the Unaffiliated Seller and the
Originators set forth herein with respect to breaches of such representations,
warranties, agreements and covenants.

                                       10

<PAGE>

                                  ARTICLE III

                         REPRESENTATIONS AND WARRANTIES

         Section 3.01. Representations of the Servicer and the Unaffiliated
Seller. The Servicer and the Unaffiliated Seller hereby represent and warrant to
the Indenture Trustee, the Depositor, the Collateral Agent, the Trust, the Note
Insurer and the Noteholders as of the Closing Date and during the term of this
Agreement that:

         (a) Each of the Unaffiliated Seller, the Servicer and the Subservicers
is a corporation duly organized, validly existing and in good standing under the
laws of their respective states of incorporation and has the corporate power to
own its assets and to transact the business in which it is currently engaged.
Each of the Unaffiliated Seller, the Servicer and the Subservicers is duly
qualified to do business as a foreign corporation and is in good standing in
each jurisdiction in which the character of the business transacted by it or
properties owned or leased by it or the performance of its obligations hereunder
requires such qualification and in which the failure so to qualify could
reasonably be expected to have a material adverse effect on the business,
properties, assets, or condition (financial or other) of the Unaffiliated
Seller, the Servicer or the Subservicers or the performance of their respective
obligations hereunder;

         (b) The Unaffiliated Seller and the Servicer each has the power and
authority to make, execute, deliver and perform this Agreement and all of the
transactions contemplated under this Agreement, and has taken all necessary
corporate action to authorize the execution, delivery and performance of this
Agreement. When executed and delivered, this Agreement will constitute the
legal, valid and binding obligation of the Unaffiliated Seller and the Servicer,
enforceable in accordance with its terms, except as enforcement of such terms
may be limited by bankruptcy, insolvency, reorganization, moratorium or 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);

         (c) Neither the Unaffiliated Seller nor the Servicer is required to
obtain the consent of any other party or any consent, license, approval or
authorization from, or registration or declaration with, any governmental
authority, bureau or agency which consent already has not been obtained in
connection with the execution, delivery, performance, validity or enforceability
of this Agreement, except such as have been obtained prior to the Closing Date;

         (d) The execution, delivery and performance of this Agreement by the
Unaffiliated Seller and the Servicer will not violate any provision of any
existing law or regulation or any order or decree of any court or the
Certificate of Incorporation or Bylaws of the Unaffiliated Seller or the
Servicer, respectively, or constitute a breach of any mortgage, indenture,
contract or other agreement to which the Unaffiliated Seller or the Servicer,
respectively, is a party or by which it may be bound;

         (e) There is no action, suit, proceeding or investigation pending or
threatened against the Servicer, the Unaffiliated Seller or the Subservicers
which, either in any one instance or in the aggregate, is, likely to result in
any material adverse change in the business, operations, financial condition,
properties, or assets of the Servicer, the Unaffiliated Seller or the
Subservicers, or in any material impairment of the right or ability of any of
them to carry on its business substantially as now conducted, or in any material
liability on the part of any of them, or which would draw into question the
validity of this Agreement, the Notes, or the Mortgage Loans or of any action
taken or to be taken in connection with the obligations of the Unaffiliated
Seller or the Servicer contemplated herein or therein, or which would be likely
to impair materially the ability of the Unaffiliated Seller or the Servicer to
perform its obligations hereunder;

                                       11
<PAGE>

         (f) Neither this Agreement nor any statement, report, or other document
furnished or to be furnished by the Servicer, the Unaffiliated Seller or the
Subservicer pursuant to this Agreement or the Insurance Agreement or in
connection with the transactions contemplated hereby, including, without
limitation, the sale or placement of the Notes, contains any untrue statement of
fact provided by or on behalf of the Unaffiliated Seller or the Servicer or
omits to state a fact necessary to make the statements provided by or on behalf
of the Unaffiliated Seller or the Servicer contained herein or therein not
misleading:

         (g) Neither the Unaffiliated Seller nor the Servicer believes, nor does
either have any reason or cause to believe, that it cannot perform each and
every covenant contained in this Agreement;

         (h) The transfer, assignment, and conveyance of the Mortgage Loans by
the Unaffiliated Seller pursuant to this Agreement is not subject to the bulk
transfer or any similar statutory provisions in effect in any applicable
jurisdiction;

         (i) The Unaffiliated Seller is solvent and will not as a result of this
Agreement and the undertakings of the Unaffiliated Seller hereunder be rendered
insolvent;

         (j) None of the Unaffiliated Seller, the Servicer or the Subservicers
is an "investment company" or a company "controlled by an investment company,"
within the meaning of the Investment Company Act of 1940, as amended; and

         (k) Immediately prior to the transfer and assignment by the Depositor
to the Trust, the Depositor had good title to, and was the sole owner of each
Mortgage Loan, free of any interest of any other Person, and the Depositor has
transferred all right, title and interest in each Mortgage Loan to the Trust.
The transfer of the Mortgage Note and the Mortgage as and in the manner
contemplated by this Agreement is sufficient either (i) fully to transfer to the
Trust, all right, title, and interest of the Depositor thereto as note holder
and mortgagee or (ii) to grant to the Trust, the security interest referred to
in Section 2.07 hereof. The Mortgage has been duly assigned and the Mortgage
Note has been duly endorsed. The Assignment of Mortgage delivered to the
Collateral Agent on behalf of the Indenture Trustee pursuant to Section
2.05(a)(iv) 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 Indenture Trustee of the
endorsed Mortgage Note, and such Assignment of Mortgage, and the delivery of
such Assignment of Mortgage for recording to, and the due recording of such
Assignment of Mortgage in, the appropriate public recording office in the
jurisdiction in which the Mortgaged Property is located are sufficient to permit
the Indenture Trustee to avail itself of all protection available under
applicable law against the claims of any present or future creditors of the
Depositor, and are sufficient to prevent any other sale, transfer, assignment,
pledge, or hypothecation of the Mortgage Note and Mortgage by the Depositor from
being enforceable.
                                       12
<PAGE>

         It is understood and agreed that the representations, warranties and
covenants set forth in this Section 3.01 shall survive the delivery of the
respective Mortgage Files to the Collateral Agent on behalf of the Indenture
Trustee or to a custodian, as the case may be, and inure to the benefit of the
Indenture Trustee and the Note Insurer.

         Section 3.02. Representations, Warranties and Covenants of the
Depositor. The Depositor hereby represents, warrants and covenants to the
Indenture Trustee, the Trust, the Collateral Agent, the Note Insurer and the
Servicer that as of the date of this Agreement or as of such date specifically
provided herein:

         (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 convey the
Mortgage Loans and to execute, deliver and perform, and to enter into and
consummate the transactions contemplated by this Agreement;

         (c) This Agreement has been duly and validly authorized, executed and
delivered by the Depositor, all requisite corporate action having been taken,
and, assuming the due authorization, execution and delivery hereof by the other
parties hereto, constitutes or will constitute 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 as have been made on or prior to the Closing Date;

         (e) None of the execution and delivery of this Agreement, the
consummation of the transactions contemplated hereby or thereby, or the
fulfillment of or compliance with the terms and conditions of this Agreement,
(i) 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 (A) the charter or bylaws of the Depositor, or (B) of any
term, condition or provision of any material indenture, deed of trust, contract
or other agreement or instrument to which the Depositor or any of its
subsidiaries is a party or by which it or any of its subsidiaries is bound; (ii)
results or will result in a violation of any law, rule, regulation, order,
judgment or decree applicable to the Depositor of any court or governmental
authority having jurisdiction over the Depositor or its subsidiaries; or (iii)
results in the creation or imposition of any lien, charge or encumbrance which
would have a material adverse effect upon the Mortgage Loans or any documents or
instruments evidencing or securing the Mortgage Loans;

                                       13
<PAGE>

         (f) There are no actions, suits or proceedings before or against or
investigations of, the Depositor pending, or to the knowledge of the Depositor,
threatened, before any court, administrative agency or other tribunal, and no
notice of any such action, which, in the Depositor's reasonable judgment, might
materially and adversely affect the performance by the Depositor of its
obligations under this Agreement, or the validity or enforceability of this
Agreement; and

         (g) The Depositor is not in 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 that may materially and adversely affect its performance
hereunder.

         (h) Immediately prior to the transfer and assignment by the Depositor
to the Trust, the Depositor had good title to, and was the sole owner of each
Mortgage Loan, free of any interest of any other Person, and the Depositor has
transferred all right, title and interest in each Mortgage Loan to the Trust.
The transfer of the Mortgage Note and the Mortgage as and in the manner
contemplated by this Agreement is sufficient either (i) fully to transfer to the
Trust, all right, title, and interest of the Depositor thereto as note holder
and mortgagee or (ii) to grant to the Trust, the security interest referred to
in Section 2.07 hereof. The Mortgage has been duly assigned and the Mortgage
Note has been duly endorsed. The Assignment of Mortgage delivered to the
Collateral Agent on behalf of the Indenture Trustee pursuant to Section
2.05(a)(iv) 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 Indenture Trustee of the
endorsed Mortgage Note, and such Assignment of Mortgage, and the delivery of
such Assignment of Mortgage for recording to, and the due recording of such
Assignment of Mortgage in, the appropriate public recording office in the
jurisdiction in which the Mortgaged Property is located are sufficient to permit
the Indenture Trustee to avail itself of all protection available under
applicable law against the claims of any present or future creditors of the
Depositor, and are sufficient to prevent any other sale, transfer, assignment,
pledge, or hypothecation of the Mortgage Note and Mortgage by the Depositor from
being enforceable.

         It is understood and agreed that the representations, warranties and
covenants set forth in this Section 3.02 shall survive delivery of the
respective Mortgage Files to the Collateral Agent on behalf of the Indenture
Trustee or to a custodian, as the case may be, and shall inure to the benefit of
the Indenture Trustee and the Note Insurer.

                                       14
<PAGE>

         Section 3.03. Representations, Warranties and Covenants of the
Collateral Agent. The Collateral Agent hereby represents, warrants and covenants
to the Indenture Trustee, the Trust, the Servicer, the Note Insurer and the
Depositor that as of the date of this Agreement or as of such date specifically
provided herein:

         (a) The Collateral Agent is a banking corporation duly organized,
validly existing and in good standing under the laws of the State of New York;

         (b) The Collateral Agent has the corporate power and authority to
execute, deliver and perform, and to enter into and consummate transactions
contemplated by this Agreement; and

         (c) This Agreement has been duly and validly authorized, executed and
delivered by the Collateral Agent, all requisite corporate action having been
taken, and, assuming the due authorization, execution and delivery hereof by the
other parties hereto, constitutes or will constitute the legal, valid and
binding agreement of the Collateral Agent, enforceable against the Collateral
Agent 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).

         It is understood and agreed that the representations, warranties and
covenants set forth in this Section 3.03(b) and 3.03(c) shall survive delivery
of the respective Indenture Trustee's Mortgage Files to the Collateral Agent, on
behalf of the Indenture Trustee or to another custodian, as the case may be, and
shall inure to the benefit of the Indenture Trustee and the Note Insurer.

         Section 3.04. Representations, Warranties and Covenants of the
Indenture Trustee. The Indenture Trustee hereby represents, warrants and
covenants to the Collateral Agent, the Trust, the Servicer, the Note Insurer and
the Depositor that as of the date of this Agreement or as of such date
specifically provided herein:

         (a) The Indenture Trustee is a banking corporation duly organized,
validly existing and in good standing under the laws of the State of New York;

         (b) The Indenture Trustee has the corporate power and authority to
execute, deliver and perform, and to enter into and consummate transactions
contemplated by this Agreement;

         (c) This Agreement has been duly and validly authorized, executed and
delivered by the Indenture Trustee, all requisite corporate action having been
taken, and, assuming the due authorization, execution and delivery hereof by the
other parties hereto, constitutes or will constitute the legal, valid and
binding agreement of the Indenture Trustee, enforceable against the Indenture
Trustee 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);

                                       15
<PAGE>

         It is understood and agreed that the representations, warranties and
covenants set forth in this Section 3.04 shall survive delivery of the
respective Indenture Trustee's Mortgage Files to the Collateral Agent, on behalf
of the Indenture Trustee or to another custodian, as the case may be and shall
inure to the benefit of the Note Insurer.

                                   ARTICLE IV

                               THE MORTGAGE LOANS

         Section 4.01. Representations and Warranties Concerning the Mortgage
Loans. With respect to each Mortgage Loan, the Depositor hereby assigns to the
Trust, pursuant to Section 2.07 of the Unaffiliated Seller's Agreement, the
representations, warranties and covenants of the Unaffiliated Seller and the
Originators set forth in Sections 3.01, 3.02 and 3.03 of the Unaffiliated
Seller's Agreement. Such representations, warranties and covenants are made or
deemed to be made with respect to the Mortgage Loans, as of the Cut-Off Date.

         Section 4.02. Purchase and Substitution. (a) It is understood and
agreed that the representations and warranties set forth in Sections 3.01, 3.02
and 3.03 of the Unaffiliated Seller's Agreement shall survive the purchase by
the Depositor of the Mortgage Loans, the subsequent transfer thereof by the
Depositor to the Trust, the subsequent pledge thereof by the Trust to the
Indenture Trustee, for the benefit of the Noteholders and the Note Insurer, and
the delivery of the Notes to the Noteholders, 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 Unaffiliated Seller's Agreement. Pursuant to the Unaffiliated Seller's
Agreement, with respect to any representation or warranty contained in Sections
3.01, 3.02 or 3.03 of the Unaffiliated Seller's Agreement that is made to the
best of the Unaffiliated Seller's knowledge, the Unaffiliated Seller shall be
deemed to have knowledge of all facts and circumstances in existence as of such
date and, if it is discovered by the Servicer, any Subservicer, the Indenture
Trustee, the Note Insurer or any Noteholder that the substance of such
representation and warranty was inaccurate as of the Closing Date and such
inaccuracy materially and adversely affects the value of the related Mortgage
Loan or the interests of the Trust, the Indenture Trustee or the Note Insurer
with respect thereto, then notwithstanding 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 Unaffiliated Seller, the
Servicer, any Subservicer, the Indenture Trustee or the Note Insurer of a breach
of any of such representations and warranties which materially and adversely
affects the value of the Mortgage Loans or the interest of the Trust, the
Indenture Trustee, the Noteholders or the Note Insurer, or which materially and
adversely affects the interests of the Trust, the Indenture Trustee, the Note
Insurer or the Noteholders 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
Unaffiliated Seller's best knowledge), the party discovering such breach shall
promptly (and in any event within five (5) Business Days of the discovery) give
written notice to the others. Within sixty (60) days of the earlier of its
discovery or its receipt of notice of any breach of a representation or
warranty, pursuant to the Unaffiliated Seller's Agreement, the Servicer shall,
or shall cause the Unaffiliated Seller or an Originator to (a) promptly cure
such breach in all material respects, or (b) purchase such Mortgage Loan on the
next succeeding Servicer Remittance Date, by depositing an amount equal to the
Loan Repurchase Price into the Collection Account, or (c) remove such Mortgage
Loan from the Trust Estate (in which case it shall become a Deleted Mortgage
Loan) and substitute one or more Qualified Substitute Mortgage Loans in
accordance with this Section 4.02; provided, that, such substitution is effected
not later than the date which is two years after the Startup Day or at such
later date, if the Indenture Trustee and the Note Insurer receive an Opinion of
Counsel to the effect set forth below in this Section. In addition, pursuant to
the Unaffiliated Seller's Agreement, the Unaffiliated Seller and the related
Originator shall be obligated to indemnify the Indenture Trustee, the
Noteholders and the Note Insurer for any third party claims arising out of a
breach by the Unaffiliated Seller of representations or warranties regarding the
Mortgage Loans. Pursuant to the Unaffiliated Seller's Agreement 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.

                                       16
<PAGE>

         (b) As to any Deleted Mortgage Loan for which the Unaffiliated Seller
substitutes a Qualified Substitute Mortgage Loan or Loans, the Servicer shall
cause the Unaffiliated Seller or an Originator, as applicable, to effect such
substitution by delivering to the Collateral Agent on behalf of the Indenture
Trustee a certification in the form attached hereto as Exhibit F, executed by a
Servicing Officer and shall cause the Unaffiliated Seller or an Originator, as
applicable, to deliver the documents described in Sections 2.05(a)(i)-(vi) for
such Qualified Substitute Mortgage Loan or Loans to the Collateral Agent on
behalf of the Indenture Trustee.

         (c) 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 a
Qualified Substitute Mortgage Loan or Loans on or before the date of
substitution will be retained by the Unaffiliated Seller. The Trust will own all
payments received on the Deleted Mortgage Loan on or before the date of
substitution, and the Unaffiliated Seller shall thereafter be entitled to retain
all amounts subsequently received in respect of such Deleted Mortgage Loan. The
Servicer shall give written notice to the Indenture Trustee and the Note Insurer
that such substitution has taken place and shall amend the Mortgage Loan
Schedule to reflect the removal of such Deleted Mortgage Loan from the terms of
this Agreement and the substitution of the Qualified Substitute Mortgage Loan or
Loans. Upon such substitution, such Qualified Substitute Mortgage Loan or Loans
shall be subject to the terms of this Agreement in all respects.

         (d) With respect to any Mortgage Loan that has been converted to an REO
Mortgage Loan, all references in this Section 4.02 or Section 2.06 to "Mortgage
Loan" shall be deemed to also refer to the REO Mortgage Loan. With respect to
any Mortgage Loan that the Servicer, Originator or Unaffiliated Seller is
required to repurchase that is or becomes a Liquidated Mortgage Loan, in lieu of
repurchasing such Mortgage Loan, the Servicer, Originator or Unaffiliated Seller
shall deposit into the Distribution Account, pursuant to Section 8.01 of the
Indenture, 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 Servicer, Originator or Unaffiliated Seller would
have otherwise been required to repurchase such Mortgage Loan.

         (e) It is understood and agreed that the obligations of the
Unaffiliated Seller and the related Originator set forth in Sections 2.06 and
3.05 of the Unaffiliated Seller's Agreement to and the Servicer's obligation to
cause the Unaffiliated Seller and the Originator to cure, purchase or substitute
for a defective Mortgage Loan, or to indemnify as described in clause (a) above,
constitute the sole remedies of the Indenture Trustee, the Note Insurer and the
Noteholders respecting a breach of the representations and warranties of the
Unaffiliated Seller and the Originators set forth in Sections 3.01, 3.02 and
3.03 of the Unaffiliated Seller's Agreement. The Indenture Trustee shall give
prompt written notice to the Note Insurer and the Rating Agencies of any
repurchase or substitution made pursuant to this Section 3.03 or Section
2.06(b).

                                       17
<PAGE>

         (f) Upon discovery by the Servicer, the Indenture Trustee, the Note
Insurer or any Noteholder that any Mortgage Loan does not constitute a qualified
Mortgage Loan, the party discovering such fact shall promptly (and in any event
within five (5) Business Days of the discovery) give written notice thereof to
the other parties. In connection therewith, pursuant to the Unaffiliated
Seller's Agreement, the Unaffiliated Seller shall be required to repurchase or
substitute a Qualified Substitute Mortgage Loan for the affected Mortgage Loan
within sixty (60) days of the earlier of such discovery by any of the foregoing
parties, or the Indenture 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 of the
Unaffiliated Seller's Agreement. The Indenture Trustee shall reconvey to the
Unaffiliated Seller 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 of the Unaffiliated Seller's Agreement.

         (g) Pursuant to the Unaffiliated Seller's Agreement the Unaffiliated
Seller and each of the Originators shall be jointly and severally responsible
for any repurchase, cure or substitution obligation of the Unaffiliated Seller
or any of the Originators under this Agreement, the Unaffiliated Seller's
Agreement or the Indenture.

                                   ARTICLE V

               ADMINISTRATION AND SERVICING OF THE MORTGAGE LOANS

         Section 5.01. The Servicer. (a) The Servicer shall service and
administer the Mortgage Loans in accordance with the Accepted Servicing
Practices and shall have full power and authority to do any and all things not
inconsistent therewith in connection with such servicing and administration
which it may deem necessary or desirable in order to maximize collections on the
Mortgage Loans, subject to the limitations set forth in this Agreement. The
Indenture Trustee shall furnish the Servicer with any powers of attorney and
other documents necessary or appropriate to enable the Servicer to carry out its
servicing and administrative duties hereunder. Without limiting the generality
of the foregoing, the Servicer shall continue, and is hereby authorized and
empowered by the Indenture Trustee, to execute and deliver, on behalf of itself,
the Noteholders and the Indenture Trustee or any of them, any and all
instruments of satisfaction or cancellation, or of partial or full release or
discharge and all other comparable instruments, and to effect such
modifications, waivers, indulgences and other like matters as are in its
judgment necessary or desirable, with respect to the Mortgage Loans and the
Mortgaged Properties and the servicing and administration thereof in order to
maximize collections on the Mortgage Loans subject to the limitations set forth
in this Agreement. The Servicer shall notify the Indenture Trustee of any such
waiver, release, discharge, modification, indulgence or other such matter by
delivering to the Indenture Trustee an Officer's Certificate certifying that
such agreement is in compliance with this Section 5.01(a) together with the
original copy of any written agreement or other document executed in connection
therewith, all of which written agreements or documents shall, for all purposes,
be considered a part of the related Indenture Trustee's Mortgage File to the
same extent as all other documents and instruments constituting a part thereof.
Notwithstanding anything in this Agreement to the contrary, the Servicer shall
not permit any modification with respect to any Mortgage Loan that would change
the Mortgage Interest Rate, reduce or increase the principal balance, change the
lien priority, the original LTV or change the final maturity date on or of such
Mortgage Loan unless (i) the Mortgagor is in default with respect to the
Mortgage Loan or such default is, in the judgment of the Servicer, imminent and
(ii) the Note Insurer consents to such modifications in writing such consent not
to be unreasonably withheld, conditioned or delayed; provided, however, that the
Servicer shall be permitted to extend the final maturity date on a Mortgage Loan
by 180 days or less without the consent of the Note Insurer, so long as such
final maturity date (as so extended) is not later than the Class A Final
Scheduled Maturity Date.

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<PAGE>

                  (b) The relationship of the Servicer (and of any successor to
         the Servicer as servicer under this Agreement) to the Indenture Trustee
         under this Agreement is intended by the parties to be that of an
         independent contractor and not that of a joint venturer, partner or
         agent.

                  (c) The Servicer agrees to give notice as required under
         Section 3.07 and Section 3.13 of the Indenture.

         Section 5.02. Collection of Certain Mortgage Loan Payments; Collection
Account. (a) The Servicer shall make reasonable efforts to collect all
payments called for under the terms and provisions of the Mortgage Loans, and
shall, to the extent such procedures shall be consistent with this Agreement,
follow the Accepted Servicing Practices. Consistent with the foregoing, the
Servicer may in its sole discretion waive any assumption fees or other fees
which may be collected in the ordinary course of servicing such Mortgage Loans.

         (b) The Servicer shall establish and maintain in the name of the
Indenture Trustee the Collection Account, in trust for the benefit of the
Noteholders and the Note Insurer. The Collection Account shall be established
and maintained as an Eligible Account.

         (c) The Servicer shall deposit or cause to be deposited in the
Collection Account any amounts representing Monthly Payments on the Mortgage
Loans due and accrued or to be applied as of a date after the Cut-Off Date, and
thereafter, on each Business Day (except as otherwise permitted herein), the
following payments and collections received or made by it (other than in respect
of principal collected and interest due and accrued on the Mortgage Loans on or
before the Cut-Off Date):

         (i) Payments of interest on the Mortgage Loans;

                                       19
<PAGE>

         (ii) Payments of principal of the Mortgage Loans;

         (iii) The Loan Repurchase Price of Mortgage Loans repurchased
      pursuant to Sections 2.06, 4.02, 5.05, 5.15 or otherwise hereunder;

         (iv) The Substitution Adjustment received in connection with
      Mortgage Loans for which Qualified Substitute Mortgage Loans are
      received pursuant to Sections 2.06 and 4.02;

         (v) All Liquidation Proceeds; and

         (vi) All Insurance Proceeds (including, for this purpose, any amounts
      required to be deposited by the Servicer pursuant to the last sentence of
      Section 5.04).

         It is understood that the Servicer need not deposit amounts
representing fees, prepayment premiums, late payment charges or extension or
other administrative charges payable by Mortgagors, or amounts received by the
Servicer for the account of Mortgagors for application towards the payment of
taxes, insurance premiums, assessments and similar items.

         (d) The Indenture Trustee shall invest any funds in the Collection
Account in Permitted Investments as directed in writing by the Servicer, which
shall mature not later than the Business Day next preceding the Servicer
Remittance Date next following the date of such investment (except that any
investment held by the Indenture Trustee may mature on such Servicer Remittance
Date) and shall not be sold or disposed of prior to its maturity. All net income
and gain realized from any such investment shall be for the benefit of the
Servicer and shall be subject to its withdrawal or order on a Distribution Date.
The Servicer shall deposit from its own funds the amount of any loss, to the
extent not offset by investment income or earnings, in the Collection Account
upon the realization of such loss.

         Section 5.03. Permitted Withdrawals from the Collection Account. The
Indenture Trustee shall make withdrawals from the Collection Account, on any
Distribution Date, for the following purposes:

         (a) to reimburse the Servicer for Liquidation Expenses theretofore
incurred in respect of any Mortgage Loan in an amount not to exceed the amount
of the sum of the related Insurance Proceeds and Liquidation Proceeds deposited
in the Collection Account pursuant to Section 5.02(c)(v)-(vi);

         (b) to reimburse the Servicer for amounts expended by it pursuant to
Section 5.04 in good faith in connection with the restoration of damaged
property, in an amount not to exceed the amount of the related Insurance
Proceeds and Liquidation Proceeds (net of withdrawals pursuant to clause (a)
above) and amounts representing proceeds of other insurance policies covering
the property subject to the related Mortgage deposited in the Collection Account
pursuant to Section 5.02(c)(v)-(vi);

         (c) to pay to the Unaffiliated Seller amounts received in respect of
any Deleted Mortgage Loan purchased or substituted for by the Unaffiliated
Seller to the extent that the distribution to the Noteholders of any such
amounts on the Distribution Date upon which the proceeds of such purchase are
distributed to the Noteholders would make the total amount distributed in
respect of any such Mortgage Loan on such Distribution Date greater than the
Loan Repurchase Price or the Substitution Adjustment therefor;

                                       20
<PAGE>

         (d) to reimburse the Servicer for unreimbursed Servicing Advances,
without interest, with respect to the Mortgage Loans for which it has made a
Servicing Advance, from subsequent collections with respect to interest on such
Mortgage Loans and from Liquidation Proceeds, Insurance Proceeds and/or the Loan
Repurchase Price or Substitution Adjustment of or relating to such Mortgage
Loans;

         (e) to reimburse the Servicer for any Periodic Advances, such
reimbursement to be made from any collections in respect of the related Mortgage
Loan with respect to which such Periodic Advance was made;

         (f) to withdraw any amount received from a Mortgagor that is
recoverable and sought to be recovered as a voidable preference by a trustee in
bankruptcy pursuant to the United States Bankruptcy Code in accordance with a
final, nonappealable order of a court having competent jurisdiction;

         (g) to withdraw any Net Foreclosure Profits;

         (h) to withdraw any funds deposited in the Collection Account that were
not required to be deposited therein; and

         (i) to pay the Servicer Servicing Compensation pursuant to Section 5.08
hereof to the extent not retained or paid.

         The Servicer shall keep and maintain a separate accounting for each
Mortgage Loan for the purpose of accounting for withdrawals from the Collection
Account pursuant to subclause (a).

         Section 5.04. Hazard Insurance Policies; Property Protection
Expenses. (a) The Servicer shall cause to be maintained for each Mortgage
Loan a hazard insurance policy with extended coverage which contains a standard
mortgagee's clause with an appropriate endorsement in an amount equal to the
lesser of (a) the maximum insurable value of the related Mortgaged Property or
(b) the sum of the Principal Balance of such Mortgage Loan plus the outstanding
balance of any mortgage loan senior to such Mortgage Loan, but in no event shall
such amount be less than is necessary to prevent the Mortgagor from becoming a
coinsurer thereunder. The Servicer shall also maintain on property acquired upon
foreclosure, or by deed in lieu of foreclosure, hazard insurance with extended
coverage in an amount which is at least equal to the lesser of (i) the maximum
insurable value from time to time of the improvements which are a part of such
property or (ii) the combined Principal Balance of such Mortgage Loan and the
principal balance of any mortgage loan senior to such Mortgage Loan at the time
of such foreclosure plus accrued interest and the good-faith estimate of the
Servicer of related Liquidation Expenses to be incurred in connection therewith.
Amounts collected by the Servicer under any such policies shall be deposited in
the Collection Account to the extent that they constitute Liquidation Proceeds
or Insurance Proceeds. Each hazard insurance policy shall contain a standard
mortgagee clause naming the Originator, its successors and assigns, as
mortgagee. Subject to Section 5.04(c) the Servicer shall be under no obligation
to require that any Mortgagor maintain earthquake or flood or other additional
insurance and shall be under no obligation itself to maintain any such
additional insurance on property acquired in respect of a Mortgage Loan, other
than pursuant to such applicable laws and regulations as shall at any time be in
force and as shall require such additional insurance.

                                       21
<PAGE>

         (b) If the Servicer shall obtain and maintain a blanket policy issued
by an insurer acceptable to the Rating Agencies and the Note Insurer insuring
against hazard losses on all of the Mortgage Loans, it shall conclusively be
deemed to have satisfied its obligations as set forth in Section 5.04(a), it
being understood and agreed that such policy may contain a deductible clause, in
which case the Servicer shall, in the event that there shall not have been
maintained on the related Mortgaged Property a policy complying with Section
5.04(a), and there shall have been a loss which would have been covered by such
policy, deposit in the Collection Account the amount not otherwise payable under
the blanket policy because of such deductible clause.

         (c) If the Mortgaged Property or REO Property is located at the time of
origination of the Mortgage Loan in a federally designated special flood hazard
area (and if the flood insurance policy referenced herein has been made
available), the Servicer will cause to be maintained flood insurance in respect
thereof. Such flood insurance shall be in an amount equal to the lesser of (i)
the Principal Balance of the related Mortgage Loan and the balance of the
related first lien, if any, (ii) the maximum insurable value of the related
Mortgaged Property, and (iii) the maximum amount of such insurance available for
the related Mortgaged Property under the national flood insurance program
(assuming that the area in which such Mortgaged Property is located is
participating in such program).

         Section 5.05. Assumption and Modification Agreements. In any case in
which a Mortgaged Property has been or is about to be conveyed by the Mortgagor,
the Servicer shall exercise its right to accelerate the maturity of the related
Mortgage Loan and require that the Principal Balance thereof be paid in full on
or prior to such conveyance by the Mortgagor under any "due-on-sale" clause
applicable thereto. If such "due-on-sale" clause, by its terms, is not operable
or the Servicer is prevented, as provided in the last paragraph of this Section
5.05, from enforcing any such clause, the Servicer is authorized, subject to the
consent of the Note Insurer, to take or enter into an assumption and
modification agreement from or with the Person to whom such property has been or
is about to be conveyed, pursuant to which such Person becomes liable under the
Mortgage Note and the Mortgagor remains liable thereon or, if the Servicer in
its reasonable judgment finds it appropriate, is released from liability
thereon. The Servicer shall notify the Indenture Trustee, the Note Insurer and
the Collateral Agent that any assumption and modification agreement has been
completed by delivering to the Indenture Trustee, the Collateral Agent and the
Note Insurer an Officer's Certificate certifying that such agreement is in
compliance with this Section 5.05 together with the original copy of such
assumption and modification agreement. Any such assumption and modification
agreement shall, for all purposes, be considered a part of the related Mortgage
File to the same extent as all other documents and instruments constituting a
part thereof. In connection with any such agreement, the then current Mortgage
Interest Rate thereon shall not be increased or decreased. Any fee collected by
the Servicer for entering into any such agreement will be retained by the
Servicer as additional servicing compensation. At its sole election, the
Servicer may purchase from the Trust Estate any Mortgage Loan that has been
assumed in accordance with this Section 5.05 within one month after the date of
such assumption at a price equal to the greater of (i) the fair market value of
such Mortgage Loan (as determined by the Servicer in its good faith judgment)
and (ii) the Loan Repurchase Price. Such amount, if any, shall be deposited into
the Collection Account in the Due Period in which such repurchase is made.

                                       22
<PAGE>

         Notwithstanding the foregoing paragraph of this Section 5.05 or any
other provision of this Agreement, the Servicer shall not be deemed to be in
default, breach or any other violation of its obligations hereunder by reason of
any assumption of a Mortgage Loan, or transfer of any Mortgaged Property without
the assumption thereof, by operation of law or any assumption or transfer which
the Servicer reasonably believes it may be restricted by law from preventing for
any reason whatsoever.

         Section 5.06. Realization Upon Defaulted Mortgage Loans. (a) The
Servicer shall foreclose upon or otherwise comparably convert to ownership
Mortgaged Properties securing such of the Mortgage Loans as come into and
continue in default and as to which no satisfactory arrangements can be made for
collection of delinquent payments pursuant to Section 5.02(a). Prior to
conducting any sale in a foreclosure proceeding or accepting a deed-in-lieu of
foreclosure with respect to any Mortgaged Property, the Servicer shall cause an
environmental review to be performed, in accordance with Accepted Servicing
Practices on the Mortgaged Property by a company such as Equifax, Inc. or
Toxicheck. If such review reveals that the Mortgaged Property has on it, under
it or is near hazardous or toxic material or waste or reveals any other
environmental problem, the Servicer shall not foreclose or record a deed-in-lieu
of foreclosure without the prior written consent of the Note Insurer, such
consent not to be unreasonably withheld, conditioned or delayed. In connection
with such foreclosure or other conversion, the Servicer shall follow such
practices (including, in the case of any default on a related senior mortgage
loan, the advancing of funds to correct such default) and procedures which are
consistent with Accepted Servicing Practices as it shall deem necessary or
advisable and as shall be normal and usual in its general first and second
mortgage loan servicing activities. The foregoing is subject to the proviso that
the Servicer shall not be required to expend its own funds in connection with
any foreclosure or towards the correction of any default on a related senior
mortgage loan or restoration of any property unless, in the reasonable judgment
of the Servicer, such expenses will be recoverable from Liquidation Proceeds.

         (b) In the event that title to any Mortgaged Property is acquired in
foreclosure or by deed in lieu of foreclosure, the deed or certificate of sale
shall be issued to the Indenture Trustee, or to its nominee on behalf of
Noteholders and the Note Insurer. With respect to any REO Property, the Servicer
either itself or through an agent selected by the Servicer shall manage,
conserve, protect and operate such REO Property in the same manner and to such
extent as is customary in the locality where such REO Property is located. Any
net income generated from the REO Property and the proceeds from a sale of any
REO Property shall be deposited in the Collection Account. Any expenses incurred
by the Servicer pursuant to its obligations with respect to any REO Property
shall constitute Servicing Advances.

                                       23
<PAGE>

         (c) Any Insurance Proceeds or Liquidation Proceeds received with
respect to a Mortgage Loan or REO Property (other than received in connection
with a purchase by the Servicer of all the Mortgage Loans and REO Properties in
the Trust Estate pursuant to Section 10.01 of the Indenture will be applied in
the following order of priority, in each case to the extent of Available Funds:
first, to pay the Servicer any accrued and unpaid Servicing Fees relating to
such Mortgage Loan; second, to reimburse the Servicer or any Subservicer for any
related unreimbursed Servicing Advances, and any related unreimbursed Periodic
Advances theretofore funded by the Servicer or any Subservicer from its own
funds, in each case, with respect to the related Mortgage Loan; third, to
accrued and unpaid interest on the Mortgage Loan, at the Mortgage Interest Rate
(or at such lesser rate as may be in effect for such Mortgage Loan pursuant to
application of the Relief Act) on the Principal Balance of such Mortgage Loan,
to the date such Mortgage Loan is determined to be a Liquidated Mortgage Loan if
it is a Liquidated Mortgage Loan, or to the Due Date in the Due Period prior to
the Distribution Date on which such amounts are to be distributed if such
determination has not yet been made, minus any unpaid Servicing Fees with
respect to such Mortgage Loan; fourth, to the extent of the Principal Balance of
the Mortgage Loan outstanding immediately prior to the receipt of such proceeds,
as a recovery of principal of the related Mortgage Loan; and fifth, to any
prepayment or late payment charges or penalty interest payable in connection
with the receipt of such proceeds and to all other fees and charges due and
payable with respect to such Mortgage Loan. The amount of any gross Insurance
Proceeds and Liquidation Proceeds received with respect to any Mortgage Loan or
REO Property minus the amount of any unreimbursed Servicing Advances,
unreimbursed Periodic Advances or unpaid Servicing Fees, in each case, with
respect to the related Mortgage Loan, are the "Net Recovery Proceeds" with
respect to such Mortgage Loan or REO Property.

         Section 5.07. Indenture Trustee to Cooperate. Upon the payment in full
of the Principal Balance of any Mortgage Loan, the Servicer will notify the
Indenture Trustee and the Collateral Agent by a certification (which
certification shall include a statement to the effect that all amounts received
in connection with such payment which are required to be deposited in the
Collection Account pursuant to Section 5.02 have been so deposited) of a
Servicing Officer. Upon any such payment in full, the Servicer is authorized to
execute, pursuant to the authorization contained in Section 5.01, an instrument
of satisfaction regarding the related Mortgage, which instrument of satisfaction
shall be recorded by the Servicer if required by applicable law and be delivered
to the Person entitled thereto, it being understood and agreed that no expenses
incurred in connection with such instrument of satisfaction shall be reimbursed
from the Collection Account. From time to time and as appropriate for the
servicing or foreclosure of any Mortgage Loan, the Collateral Agent on behalf of
the Indenture Trustee shall, upon request of the Servicer and delivery to the
Collateral Agent of a Request for Release signed by a Servicing Officer, release
the related Mortgage File to the Servicer and shall execute such documents as
shall be necessary for the prosecution of any such proceedings. Such Request for
Release shall obligate the Servicer to return the Indenture Trustee's Mortgage
File to the Collateral Agent on behalf of the Indenture Trustee when the need
therefor by the Servicer no longer exists unless the Mortgage Loan shall be
liquidated, in which case, upon receipt of a certificate of a Servicing Officer
similar to that hereinabove specified, the Request for Release shall be released
by the Collateral Agent on behalf of the Indenture Trustee to the Servicer.

         Section 5.08. Servicing Compensation; Payment of Certain Expenses by
Servicer. On each Distribution Date, the Servicer shall be entitled to receive
and the Indenture Trustee shall pay, out of collections on the Mortgage Loans
for the Due Period, as servicing compensation for such Due Period, an amount
(the "Monthly Servicing Fee") equal to the product of one-twelfth of the
Servicing Fee. Additional servicing compensation in the form of assumption fees,
late payment charges or extension and other administrative charges shall be
retained by the Servicer. The Servicer shall be required to pay all expenses
incurred by it in connection with its activities hereunder (including payment of
all fees and expenses of the Subservicer and payment of the Indenture Trustee
Fee to the extent that monies in the Collection Account are insufficient
therefor, as provided in Section 6.16 of the Indenture and payment of the
Collateral Agent Fee as provided in Section 9.05 hereof, and all other fees and
expenses not expressly stated hereunder to be payable by or from another source)
and shall not be entitled to reimbursement therefor except as specifically
provided herein.

                                       24

<PAGE>

         Section 5.09. Annual Statement as to Compliance. (a) The Servicer
will deliver to the Indenture Trustee, the Collateral Agent, the Rating
Agencies, the Depositor, the Note Insurer and each Noteholder, on or before
April 30 of each year, beginning April 30, 2002, an Officer's Certificate of the
Servicer stating that (a) a review of the activities of the Servicer during the
preceding calendar year and of its performance under this Agreement has been
made under such officer's supervision and (b) to the best of such officer's
knowledge, based on such review, the Servicer has fulfilled all its material
obligations under this Agreement throughout such year, or, if there has been a
default in the fulfillment of any such obligation, specifying each such default
known to such officer and the nature and status thereof.

         Section 5.10. Annual Independent Public Accountants' Servicing Report.
On or before April 30 of each year, beginning April 30, 2002, the Servicer at
its expense shall cause a firm of independent public accountants that is a
member of the American Institute of Certified Public Accountants (who may also
render other services to the Servicer) to furnish a report to the Indenture
Trustee, the Collateral Agent, the Depositor, the Rating Agencies, the Note
Insurer and each Noteholder to the effect that such firm has examined certain
documents and records relating to the servicing of mortgage loans under
servicing agreements (including this Agreement) substantially similar to this
Agreement, and that such examination, which has been conducted substantially in
compliance with the Uniform Single Attestation Program for Mortgage Bankers (to
the extent that the procedures in such audit guide are applicable to the
servicing obligations set forth in such agreements), has disclosed no items of
noncompliance with the provisions of this Agreement which, in the opinion of
such firm, are material, except for such items of noncompliance as shall be set
forth in such report.

         Section 5.11. Access to Certain Documentation. Each of the Servicer,
the Depositor and the Unaffiliated Seller shall permit the designated agents or
representatives of each Noteholder, the Note Insurer, the Collateral Agent and
the Indenture Trustee (i) to examine and make copies of and abstracts from all
books, records and documents (including computer tapes and disks) in the
possession or under the control of the Servicer, the Depositor or the
Unaffiliated Seller relating to the Mortgage Loans and (ii) to visit the offices
and properties of the Servicer, of the Depositor and of the Unaffiliated Seller
for the purpose of examining such materials and to discuss matters relating to
the Mortgage Loans and the Servicer's, the Depositor's and the Unaffiliated
Seller's performance under this Agreement with any of the officers or employees
of the Servicer, the Depositor and the Unaffiliated Seller having knowledge
thereof and with the independent public accountants of the Servicer (and by this
provision the Servicer, the Depositor and the Unaffiliated Seller each authorize
their respective accountants to discuss their respective finances and affairs),
all at such reasonable times, as often as may be reasonably requested and
without charge to such Noteholder, the Note Insurer, the Collateral Agent or the
Indenture Trustee.

                                       25

<PAGE>

         Section 5.12. Maintenance of Fidelity Bond. The Servicer shall during
the term of its service as servicer maintain in force a fidelity bond and errors
and omissions insurance in respect of its officers, employees or agents. Such
bond and insurance shall comply with the requirements from time to time of the
Fannie Mae for Persons performing servicing for mortgage loans purchased by such
association.

         Section 5.13. The Subservicers. The parties acknowledge that the
Servicer intends to appoint the Subservicers as the Servicer's agents for the
purpose of servicing on the Servicer's behalf such of the Mortgage Loans as were
originated by such subservicer. The Servicer agrees to cause the Subservicers to
service such Mortgage Loans in a manner consistent with the Accepted Servicing
Practices set forth in this Agreement, and agrees that receipt by the
Subservicers of any and all amounts which by the terms hereof are required to be
deposited in the Collection Account shall constitute receipt thereof by the
Servicer for all purposes hereof as of the date so received by the Subservicers.
Notwithstanding such designation of the Subservicers, the Servicer agrees that
it is, and it shall remain, fully obligated under the terms hereof as Servicer
with respect to all such Mortgage Loans, and nothing herein shall relieve or
release the Servicer from its obligations to the other parties hereto to service
such Mortgage Loans in the manner provided in this Agreement.

         Section 5.14. Reports to the Indenture Trustee; Collection Account
Statements. Not later than fifteen (15) days after each Distribution Date, the
Servicer shall provide to the Indenture Trustee, the Collateral Agent and the
Note Insurer a statement, certified by a Servicing Officer, setting forth the
status of the Collection Account as of the close of business on the related
Distribution Date, stating that all distributions required by this Agreement to
be made by the Servicer on behalf of the Indenture Trustee have been made (or if
any required distribution has not been made by the Servicer, specifying the
nature and status thereof) and showing, for the period covered by such
statement, the aggregate of deposits into and withdrawals from the Collection
Account for each category of deposit specified in Section 5.02 and each category
of withdrawal specified in Section 5.03 and the aggregate of deposits into the
Collection Account as specified in Section 6.01(c). Such statement shall also
state the aggregate unpaid principal balance of all the Mortgage Loans as of the
close of business on the last day of the month preceding the month in which such
Distribution Date occurs. Copies of such statement shall be provided by the
Indenture Trustee to any Noteholder upon request.

         Section 5.15. Optional Purchase of Defaulted Mortgage Loans. (a) The
Unaffiliated Seller, in its sole discretion, shall have the right to elect
(by written notice sent to the Indenture Trustee and the Note Insurer), but
shall not be obligated, to purchase for its own account from the Trust any
Mortgage Loan which is one hundred and eighty (180) days or more Delinquent in
the manner and at the Loan Repurchase Price except that the amount described in
clause (ii) of the definition of Loan Purchase Price shall in no case be net of
the Servicing Fee). The purchase price for any Mortgage Loan purchased hereunder
shall be deposited in the Collection Account and the Indenture Trustee, upon
receipt of such deposit, shall release or cause to be released to the
Unaffiliated Seller the related Indenture Trustee's Mortgage File and shall
execute and deliver such instruments of transfer or assignment prepared by the
Unaffiliated Seller, in each case without recourse, representation or warranty
as shall be necessary to vest in the Unaffiliated Seller any Mortgage Loan
released pursuant hereto and the Unaffiliated Seller shall succeed to all the
Indenture Trustee's right, title and interest in and to such Mortgage Loan and
all security and documents related thereto. Such assignment shall be an
assignment outright and not for security. The Unaffiliated Seller shall
thereupon own such Mortgage Loan, and all security and documents, free of any
further obligation to the Indenture Trustee or the Noteholders with respect
thereto.

                                       26
<PAGE>

         (b) If the Unaffiliated Seller shall have repurchased Mortgage Loans
which are one hundred and eighty (180) days or more Delinquent under this
Section 5.15 in an aggregate principal amount equal to 2.00% of the Original
Aggregate Principal Balance, the Unaffiliated Seller may not thereafter exercise
its right under this Section 5.15 to purchase any Mortgage Loan without the
prior written consent of the Note Insurer. Any request by the Unaffiliated
Seller to the Note Insurer for consent to repurchase Mortgage Loans that are not
the most Delinquent shall be accompanied by a description of the Mortgage Loans
that have been Delinquent longer than the Mortgage Loan or Mortgage Loans the
Unaffiliated Seller proposes to repurchase. If the Note Insurer fails to respond
to such request within ten (10) Business Days after receipt thereof, the
Unaffiliated Seller shall be deemed to have been granted consent to repurchase
the Mortgage Loan or Mortgage Loans proposed to be repurchased. Notice to the
Note Insurer shall be delivered in accordance with the terms of the Insurance
Agreement.

         Section 5.16. Reports to be Provided by the Servicer. (a) No later
than 12:00 noon, New York, New York time on the Servicer Remittance Date, the
Servicer shall deliver to the Indenture Trustee a report in computer-readable
form containing such information as to enable the Indenture Trustee to make the
distribution pursuant to Section 8.02(a) (i) through (x) of the Indenture, and
such other information as the Indenture Trustee shall reasonably require.

         (b) On each Servicer Remittance Date, the Servicer shall deliver to the
Indenture Trustee and the Note Insurer: (i) a Noteholder Statement and (ii) a
Servicer Remittance Report. The Servicer Remittance Report shall include the
following information with respect to all Mortgage Loans in the Mortgage Loan
Group as well as a break out as to (x) consumer purpose and (y) business purpose
Mortgage Loans as of the close of business on the last Business Day of the prior
calendar month (except as otherwise provided in clause (v) below), which is
hereby required to be prepared by the Servicer and furnished to the Indenture
Trustee for such purpose and to the Note Insurer on or prior to the related
Servicer Remittance Date:

                  (i) for the related Due Period, the total number of Mortgage
         Loans and the aggregate Principal Balances thereof, together with the
         number, aggregate principal balances of such Mortgage Loans and the
         percentage (based on the aggregate Principal Balances of the Mortgage
         Loans) of the aggregate Principal Balances of such Mortgage Loans to
         the aggregate Principal Balance of all Mortgage Loans (A) 31-60 days
         Delinquent, (B) 61-90 days Delinquent and (C) 91 or more days
         Delinquent;

                  (ii) for the related Due Period, the number, aggregate
         Principal Balances of all Mortgage Loans and percentage (based on the
         aggregate Principal Balances of the Mortgage Loans) of the aggregate
         Principal Balances of such Mortgage Loans to the aggregate Principal
         Balance of all Mortgage Loans in foreclosure proceedings and the
         number, aggregate Principal Balances of all Mortgage Loans and
         percentage (based on the aggregate Principal Balances of the Mortgage
         Loans) of any such Mortgage Loans also included in any of the
         statistics described in the foregoing clause (i);

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<PAGE>

                  (iii) for the related Due Period, the number, aggregate
         Principal Balances of all Mortgage Loans and percentage (based on the
         aggregate Principal Balances of the Mortgage Loans) of the aggregate
         Principal Balances of such Mortgage Loans to the aggregate Principal
         Balance of all Mortgage Loans relating to Mortgagors in bankruptcy
         proceedings and the number, aggregate Principal Balances of all
         Mortgage Loans and percentage (based on the aggregate Principal
         Balances of the Mortgage Loans) of any such Mortgage Loans also
         included in any of the statistics described in the foregoing clause
         (i);

                  (iv) for the related Due Period, the number, aggregate
         Principal Balances of all Mortgage Loans and percentage (based on the
         aggregate Principal Balances of the Mortgage Loans) of the aggregate
         Principal Balances of such Mortgage Loans to the aggregate Principal
         Balance of all Mortgage Loans relating to REO Properties and the
         number, aggregate Principal Balances of all Mortgage Loans and
         percentage (based on the aggregate Principal Balances of the Mortgage
         Loans) of any such Mortgage Loans also included in any of the
         statistics described in the foregoing clause (i);

                  (v) the weighted average Mortgage Interest Rate as of the Due
         Date occurring in the Due Period related to such Distribution Date;

                  (vi) the weighted average remaining term to stated maturity of
         all Mortgage Loans;

                  (vii) the book value of any REO Property;

                  (viii) the Cumulative Loss Percentage for the related Due
         Period and the aggregate Cumulative Loss Percentage since the Closing
         Date;

                  (ix) the Delinquency Ratio, the Rolling Three Month
         Delinquency Rate and the Twelve Month Loss Amount;

                  (x) the aggregate Principal Balance of the three largest
         Mortgage Loans; and

                  (xi) the total number of Mortgage Loans and the Aggregate
         Principal Balance.

         (c) In connection with the transfer of the Notes, the Indenture Trustee
on behalf of any Noteholder may request that the Servicer make available to any
prospective Noteholder annual financial statements of the Servicer for one or
more of the most recently completed five fiscal years for which such statements
are publicly available, which request shall not be unreasonably denied or
unreasonably delayed. Such annual financial statements also shall be made
available to the Note Insurer upon request.

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<PAGE>

         (d) The Servicer also agrees, upon reasonable advanced written notice,
to make available on a reasonable basis to the Note Insurer or any prospective
Noteholder a knowledgeable financial or accounting officer for the purpose of
answering reasonable questions respecting recent developments affecting the
Servicer or the financial statements of the Servicer and to permit the Note
Insurer or any prospective Noteholder to inspect the Servicer's servicing
facilities during normal business hours for the purpose of satisfying the Note
Insurer or such prospective Noteholder that the Servicer has the ability to
service the Mortgage Loans in accordance with this Agreement.

         Section 5.17. Adjustment of Servicing Compensation in Respect of
Prepaid Mortgage Loans. The Monthly Servicing Fee that the Servicer shall be
entitled to receive with respect to all of the Mortgage Loans and each
Distribution Date shall be offset on such Distribution Date by an amount equal
to the aggregate Prepayment Interest Shortfall with respect to all Mortgage
Loans which were subjects of Principal Prepayments during the month preceding
the month of such Distribution Date. The amount of any offset against the
Monthly Servicing Fee with respect to any Distribution Date under this Section
5.17 shall be limited to the Monthly Servicing Fee otherwise payable to the
Servicer (without adjustment on account of Prepayment Interest Shortfalls) with
respect to such Distribution Date, and the rights of the Noteholders to the
offset of the aggregate Prepayment Interest Shortfalls shall not be cumulative.

         Section 5.18. Periodic Advances; Special Advance. (a) If, on any
Servicer Remittance Date, the Servicer determines that any Monthly Payments due
on the Due Date immediately preceding such Servicer Remittance Date have not
been received as of the close of business on the Business Day preceding such
Servicer Remittance Date, the Servicer shall determine the amount of any
Periodic Advance required to be made with respect to the related Distribution
Date. The Servicer shall include in the amount to be deposited in the Collection
Account on such Servicer Remittance Date an amount equal to the Periodic
Advance, if any, which deposit may be made in whole or in part from funds in the
Collection Account being held for future distribution or withdrawal on or in
connection with Distribution Dates in subsequent months. Any funds being held
for future distribution to Noteholders and so used shall be replaced by the
Servicer from its own funds by deposit in the Collection Account on or before
the Business Day preceding the next Servicer Remittance Date on which the funds
in the Collection Account shall be less than the amount necessary to pay in full
the Required Distribution with respect to such date be made on such date;
provided, that if such funds are not sufficient the Servicer will use its own
funds to the extent necessary to fulfill its replacement or advance obligation.

         The Servicer shall designate on its records the specific Mortgage Loans
and related installments (or portions thereof) as to which such Periodic Advance
shall be deemed to have been made, such determination being conclusive for
purposes of withdrawals from the Collection Account pursuant to Section 5.03.

         (b) In addition to the Periodic Advances the Servicer shall make a
special advance (the "Special Advance") on the Servicer Remittance Date
occurring in January 2002, with respect to interest on Mortgage Loans not having
their first payment due until after December 2001. The Special Advance will be
deposited into the Interest Reserve Account and will be paid out of the Interest
Reserve Account, and will be equal to the lesser of the (1) Class A Interest
Distribution Amount over the sum of (x) the amount of interest collected for the
first Due Period and (y) the amount on deposit in the Interest Reserve Account
immediately prior to such Special Advance or (2) an amount equal to the amount
of interest that would have accrued on all such Mortgage Loans from the Cut-Off
Date to its corresponding scheduled payment date, assuming it had a scheduled
payment date in December 2001. Any funds remaining in the Interest Reserve
Account after the January 2002 Distribution Date shall be remitted to the
Servicer on such Distribution Date. The Special Advance shall be made without
regard to recoverability, and shall not be reimbursable, except as set forth in
the preceding sentences. In no event shall the Indenture Trustee, as successor
Servicer, be liable for the payment of the Special Advance except to the extent
of the amount on deposit in the Interest Reserve Account.

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<PAGE>

         Section 5.19. Indemnification; Third Party Claims. (a) The Servicer
agrees to indemnify and to hold each of the Trust, the Owner Trustee, the
Depositor, the Indenture Trustee, the Collateral Agent, the Unaffiliated Seller,
the Note Insurer and each Noteholder 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 Trust, the Owner Trustee, the
Depositor, the Indenture Trustee, the Collateral Agent, the Unaffiliated Seller,
the Note Insurer and any Noteholder may sustain in any way related to the
failure of the Servicer to perform its duties and service the Mortgage Loans in
compliance with the terms of this Agreement and the other Basic Documents
including Section 8.02 of the Trust Agreement and Section 6.16 of the Indenture.
Each indemnified party and the Servicer shall immediately notify the other
indemnified parties if a claim is made by a third party with respect to this
Agreement, and the other Basic Documents, 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 Trust, the Owner Trustee,
the Depositor, the Servicer, the Indenture Trustee, the Collateral Agent, the
Unaffiliated Seller, the Note Insurer and/or a Noteholder in respect of such
claim. The obligations of the Servicer under this Section 5.19 arising prior to
any resignation or termination of the Servicer hereunder shall survive the
resignation or termination of the Servicer.

         (b) The Indenture Trustee shall, if necessary, reimburse the Servicer
from amounts otherwise distributable on the Trust Certificates for all amounts
advanced by it pursuant to Section 4.04 of the Unaffiliated Seller's Agreement,
except when the claim relates directly to the failure of the Servicer, if it is,
or is an Affiliate of, the Unaffiliated Seller, to perform its obligations to
service and administer the Mortgages in compliance with the terms of the
Unaffiliated Seller's Agreement, or the failure of the Unaffiliated Seller to
perform its duties in compliance with the terms of this Agreement.

         (c) The Indenture Trustee shall reimburse the Unaffiliated Seller from
amounts otherwise distributable on the Trust Certificates for all amounts
advanced by the Unaffiliated Seller pursuant to the second sentence of Section
4.04(a)(ii) of the Unaffiliated Seller's Agreement except when the relevant
claim relates directly to the failure of the Unaffiliated Seller to perform its
duties in compliance with the terms of the Unaffiliated Seller's Agreement.

         Section 5.20. Maintenance of Corporate Existence and Licenses; Merger
or Consolidation of the Servicer. (a) The Servicer will keep in full effect
its existence, rights and franchises as a corporation, 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 and will
otherwise operate its business so as to cause the representations and warranties
under Section 3.01 to be true and correct at all times under this Agreement. Any
person succeeding in business of the Servicer shall assume all rights and
obligations of the Servicer under the Basic Documents.

                                       30
<PAGE>

         (b) Any Person into which the Servicer may be merged or consolidated,
or any corporation resulting from any merger, conversion or consolidation to
which the Servicer shall be a party, or any Person succeeding to the business of
the Servicer, shall be an established mortgage loan servicing institution that
has a net worth of at least $15,000,000 and is a Permitted Transferee, and in
all events shall be the successor of the Servicer 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 Servicer shall send notice
of any such merger or consolidation to the Owner Trustee, the Indenture Trustee,
the Collateral Agent, the Depositor and the Note Insurer.

         Section 5.21. Assignment of Agreement by Servicer; Servicer Not to
Resign. The Servicer shall not assign this Agreement nor resign from the
obligations and duties hereby imposed on it except by mutual consent of the
Owner Trustee, on behalf of the Trust, at the direction of the Trust
Certificateholders, the Depositor, the Servicer, the Unaffiliated Seller, the
Note Insurer, the Collateral Agent and the Indenture Trustee or upon the
determination that the Servicer's duties hereunder are no longer permissible
under applicable law and that such incapacity cannot be cured by the Servicer
without incurring, in the reasonable judgment of the Note Insurer, unreasonable
expense. Any such determination that the Servicer's duties hereunder are no
longer permissible under applicable law permitting the resignation of the
Servicer shall be evidenced by a written Opinion of Counsel (who may be outside
counsel for the Servicer) to such effect delivered to the Indenture Trustee, the
Collateral Agent, the Unaffiliated Seller, the Trust, the Depositor and the Note
Insurer. No such resignation shall become effective until the Indenture Trustee
or a successor appointed in accordance with the terms of this Agreement has
assumed the Servicer's responsibilities and obligations hereunder in accordance
with Section 7.02. The Servicer shall provide the Indenture Trustee, the
Collateral Agent, the Depositor, the Rating Agencies and the Note Insurer with
30 days prior written notice of its intention to resign pursuant to this Section
5.21.

         Section 5.22. Periodic Filings with the Securities and Exchange
Commission; Additional Information. The Indenture Trustee shall prepare or cause
to be prepared for filing with the Commission (other than the initial Current
Report on Form 8-K to be filed by the Depositor in connection with the issuance
of the Notes) any and all reports, statements and information respecting the
Trust and/or the Notes required to be filed, and shall solicit any and all
proxies of the Noteholders whenever such proxies are required to be solicited,
pursuant to the Securities Exchange Act of 1934, as amended. The Depositor shall
promptly file, and exercise its reasonable best efforts to obtain a favorable
response to, no-action requests with, or other appropriate exemptive relief
from, the Commission seeking the usual and customary exemption from such
reporting requirements granted to issuers of securities similar to the Notes if
and to the extent the Depositor shall deem any such relief to be necessary or
appropriate. Fees and expenses incurred by the Indenture Trustee in connection
with the foregoing shall be reimbursed pursuant to Section 6.16 of the Indenture
and shall not be paid by the Trust.

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<PAGE>

         The Servicer and the Depositor each agree to promptly furnish to the
Indenture Trustee, from time to time upon request, such further information,
reports and financial statements as the Indenture Trustee deems appropriate to
prepare and file all necessary reports with the Commission.

                                   ARTICLE VI

                              APPLICATION OF FUNDS

         Section 6.01. Deposits to the Distribution Account. On each Servicer
Remittance Date, the Servicer shall cause to be deposited in the Distribution
Account, from funds on deposit in the Collection Account, (a) an amount equal to
the Servicer Remittance Amount and (b) Net Foreclosure Profits, if any with
respect to the related Distribution Date, minus any portion thereof payable to
the Servicer pursuant to Section 5.03. On each Servicer Remittance Date, the
Servicer shall also deposit into the Distribution Account any Periodic Advances
with respect to the related Distribution Date calculated in accordance with
Section 5.18.

         Section 6.02. Collection of Money. Except as otherwise expressly
provided herein, the Indenture Trustee may demand payment or delivery of all
money and other property payable to or receivable by the Indenture Trustee
pursuant to this Agreement, including (a) all payments due on the Mortgage Loans
in accordance with the respective terms and conditions of such Mortgage Loans
and required to be paid over to the Indenture Trustee by the Servicer or by any
Subservicer and (b) Insured Payments. The Indenture Trustee shall hold all such
money and property received by it, as part of the Trust Estate and shall apply
it as provided in the Indenture.

         Section 6.03. Application of Principal and Interest. In the event that
Net Liquidation Proceeds on a Liquidated Mortgage Loan are less than the
Principal Balance of the related Mortgage Loan plus accrued interest thereon, or
any Mortgagor makes a partial payment of any Monthly Payment due on a Mortgage
Loan, such Net Liquidation Proceeds or partial payment shall be applied to
payment of the related Mortgage Note as provided therein, and if not so
provided, first to interest accrued at the Mortgage Interest Rate and then to
principal.

         Section 6.04. Information Concerning the Mortgage Loans. No later than
12:00 noon Pennsylvania time on the fourth Business Day preceding each
Distribution Date, the Servicer shall deliver to the Indenture Trustee a report
in computer-readable form containing such information as to each Mortgage Loan
and as to the Mortgage Loan Pool as of such Distribution Date and such other
information as the Indenture Trustee shall reasonably require.

         Section 6.05. Compensating Interest. Not later than the close of
business on the third Business Day prior to the Distribution Date, the Servicer
shall remit to the Indenture Trustee (without right to reimbursement therefor)
for deposit into the Distribution Account, an amount equal to, for each Mortgage
Loan, the lesser of (a) the Prepayment Interest Shortfall for such Mortgage Loan
for the related Distribution Date resulting from Principal Prepayments during
the related Due Period and (b) its Monthly Servicing Fee with respect to such
Mortgage Loan received in the related Due Period (the "Compensating Interest").

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<PAGE>

         Section 6.06. Effect of Payments by the Note Insurer; Subrogation.
Anything herein to the contrary notwithstanding, any payment with respect to
principal of or interest on the Notes which is made with moneys received
pursuant to the terms of the Policy shall not be considered payment of the Notes
from the Trust Estate. The Depositor, the Servicer, the Trust, the Collateral
Agent and the Indenture Trustee acknowledge and agree, that without the need for
any further action on the part of the Note Insurer, the Depositor, the Servicer,
the Trust, the Collateral Agent, the Indenture Trustee or the Note Registrar (a)
to the extent the Note Insurer makes payments, directly or indirectly, on
account of principal of or interest on the Notes to the Holders of such Notes,
the Note Insurer will be fully subrogated to, and each Noteholder, the Servicer,
the Depositor, the Trust, the Collateral Agent and the Indenture Trustee hereby
delegate and assign to the Note Insurer, to the fullest extent permitted by law,
the rights of such Holders to receive such principal and interest from the Trust
Estate, including, without limitation, any amounts due to the Noteholders in
respect of securities law violations arising from the offer and sale of the
Notes, and (b) the Note Insurer shall be paid such amounts from the sources and
in the manner provided herein for the payment of such amounts and as provided in
the Insurance Agreement. The Indenture Trustee, the Collateral Agent and the
Servicer shall cooperate in all respects with any reasonable request by the Note
Insurer for action to preserve or enforce the Note Insurer's rights or interests
under this Agreement without limiting the rights or affecting the interests of
the Holders as otherwise set forth herein.

                                  ARTICLE VII

                                SERVICER DEFAULT

         Section 7.01. Servicer Events of Default. (a) The following events
shall each constitute a "Servicer Event of Default" hereunder:

                  (i) any failure by the Servicer to remit to the Indenture
         Trustee any payment required to be made by the Servicer under the terms
         of this Agreement (other than Servicing Advances covered by clause (ii)
         below), which continues unremedied for one (1) Business Day after the
         date upon which written notice of such failure, requiring the same to
         be remedied, shall have been given to the Servicer and the Note Insurer
         by the Indenture Trustee or to the Servicer and the Indenture Trustee
         by the Note Insurer or Noteholders of Notes evidencing Percentage
         Interests of at least 25%;

                  (ii) the failure by the Servicer to make any required
         Servicing Advance, which failure continues unremedied for a period of
         thirty (30) days after the date on which written notice of such
         failure, requiring the same to be remedied, shall have been given to
         the Servicer by the Indenture Trustee or to the Servicer and the
         Indenture Trustee by any Noteholder or the Note Insurer;

                  (iii) any failure on the part of the Servicer duly to observe
         or perform in any material respect any other of the covenants or
         agreements on the part of the Servicer contained in this Agreement, or
         the failure of any representation and warranty made pursuant to Section
         3.01(a) hereof to be true and correct which continues unremedied for a
         period of thirty (30) days after the date on which written notice of
         such failure, requiring the same to be remedied, shall have been given
         to the Servicer by the Indenture Trustee or to the Servicer and the
         Indenture Trustee by any Noteholder or the Note Insurer;

                                       33
<PAGE>

                  (iv) a decree or order of a court or agency or supervisory
         authority having jurisdiction in an involuntary case under any present
         or future federal or state bankruptcy, insolvency or similar law or for
         the appointment of a conservator or receiver or liquidation in any
         insolvency, readjustment of debt, marshalling of assets and liabilities
         or similar proceedings, or for the winding-up or liquidation of its
         affairs, shall have been entered against the Servicer and such decree
         or order shall have remained in force, undischarged or unstayed for a
         period of forty-five (45) days;

                  (v) the Servicer shall consent 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 Servicer or of or relating to all or
         substantially all of the Servicer's property;

                  (vi) the Servicer shall admit in writing its inability
         generally to pay its debts as they become due, file a petition to take
         advantage of any applicable insolvency or reorganization statute, make
         an assignment for the benefit of its creditors, or voluntarily suspend
         payment of its obligations;

                  (vii) the Note Insurer shall notify the Indenture Trustee of
         any "event of default" under the Insurance Agreement;

                  (viii) if on any Distribution Date the Rolling Three Month
         Delinquency Rate exceeds 12.50% of the aggregate outstanding Principal
         Balance of the Mortgage Loans;

                  (ix) if on any Distribution Date, commencing in December 2002,
         the Twelve Month Loss Amount exceeds 2.50% of the sum of aggregate
         outstanding Principal Balance for the Mortgage Loans, as of the close
         of business on the first day of the twelfth preceding calendar month
         (or, if later, the Cut-Off Date);

                  (x) ABFS or the Servicer shall fail to pay any principal or
         interest when due on any outstanding indebtedness having an aggregate
         principal amount in excess of $1,000,000 and such failure shall
         continue after the applicable grace period, if any, specified in the
         agreement or instrument relating to such outstanding indebtedness, or
         any such outstanding indebtedness of ABFS or the Servicer having an
         aggregate principal amount in excess of $1,000,000 shall be declared to
         be due and payable or required to be prepaid (other than a regular
         scheduled payment) prior to the date of maturity thereof;

                  (xi) Net Worth of ABFS on a consolidated basis shall be less
         than the sum of (i) $30,000,000 plus (ii) 50% of the cumulative Net
         Income for each fiscal quarter ending after the Closing Date (excluding
         any fiscal quarter for which Net Income was less than zero);

                  (xii) any Change of Control shall occur; or

                  (xiii) the occurrence of an Event of Default under the
         Indenture.

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<PAGE>

         (b) So long as a Servicer Event of Default shall have occurred and not
have been remedied: (x) with respect solely to Section 7.01(a)(i), if such
payment is in respect of Periodic Advances or Compensating Interest owing by the
Servicer and such payment is not made by 12:00 noon, New York, New York time on
the fourth Business Day prior to the applicable Distribution Date, the Indenture
Trustee, may, and upon receipt of written notice or discovery by a Responsible
Officer of such failure, shall give immediate telephonic and facsimile notice of
such failure to a Servicing Officer of the Servicer and to the Note Insurer and
the Indenture Trustee may, and shall, at the direction of the Note Insurer
(absent a Note Insurer Default), terminate all of the rights and obligations of
the Servicer under this Agreement, except for the Servicer's indemnification
obligation under Section 5.19, and the Indenture Trustee, or a successor
Servicer appointed in accordance with Section 7.02, shall immediately make such
Periodic Advance or payment of Compensating Interest and assume, pursuant to
Section 7.02 hereof, the duties of a successor Servicer and (y) with respect to
any other Servicer Event of Default, the Indenture Trustee shall, but only at
the direction of the Note Insurer or the Majority Noteholders, by notice in
writing to the Servicer and a Responsible Officer of the Indenture Trustee and
subject to the prior written consent of the Note Insurer, in the case of any
removal at the direction of the Majority Noteholders, and in addition to
whatever rights such Noteholders may have at law or equity to damages, including
injunctive relief and specific performance, terminate all the rights and
obligations of the Servicer under this Agreement, except for the Servicer's
indemnification obligations under Section 5.19, and in and to the Mortgage Loans
and the proceeds thereof, as servicer. Upon receipt by the Servicer of such
written notice, all authority and power of the Servicer under this Agreement,
whether with respect to the Mortgage Loans or otherwise, shall, subject to
Section 7.02, pass to and be vested in the Indenture Trustee, or such other
Person as may be specified by the Note Insurer, and the Indenture Trustee is
hereby authorized and empowered to execute and deliver, on behalf of the
Servicer, as attorney-in-fact or otherwise, at the expense of the Servicer, any
and all documents and other instruments and do or cause to be done all other
acts or things necessary or appropriate to effect the purposes of such notice of
termination, including, but not limited to, the transfer and endorsement or
assignment of the Mortgage Loans and related documents. The Servicer agrees to
cooperate (and pay any related costs and expenses) with the Indenture Trustee in
effecting the termination of the Servicer's responsibilities and rights
hereunder and the transfer of such responsibilities and rights to a successor
Servicer, including, without limitation, the transfer to the Indenture Trustee,
or its designee, for administration by it of all amounts which shall at the time
be credited by the Servicer to the Collection Account or thereafter received
with respect to the Mortgage Loans. The Indenture Trustee shall promptly notify
the Note Insurer and the Rating Agencies of the occurrence of a Servicer Event
of Default.

         Section 7.02. Indenture Trustee to Act; Appointment of Successor. On
and after the time the Servicer receives a notice of termination pursuant to
Section 7.01 or the Indenture Trustee receives the resignation of the Servicer
evidenced by an Opinion of Counsel (if required) pursuant to Section 5.21, or
the Servicer is removed as Servicer pursuant to this Article VII, in which event
the Indenture Trustee shall promptly notify the Rating Agencies, except as
otherwise provided in Section 7.01, the Indenture Trustee or such other Person
as may be specified by the Note Insurer shall be the successor in all respects
to the Servicer in its capacity as servicer under this Agreement and the
transactions set forth or provided for herein and shall be subject to all the
responsibilities, duties and liabilities relating thereto placed on the Servicer
by the terms and provisions hereof arising on or after the date of succession;
provided, however, that the Indenture Trustee shall not be liable for any
actions or the representations and warranties of any Servicer prior to it and
including, without limitation, the obligations of the Servicer set forth in
Sections 2.06 and 4.02 hereof. The Indenture Trustee, as successor Servicer,
shall be obligated to pay Compensating Interest pursuant to Section 6.05 in any
event and to make advances pursuant to Section 5.18 unless, and only to the
extent the Indenture Trustee determines reasonably and in good faith that such
advances would not be recoverable pursuant to Section 5.04, such determination
to be evidenced by a certification of a Responsible Officer of the Indenture
Trustee delivered to the Note Insurer.

                                       35
<PAGE>

         (b) Notwithstanding the above, the Indenture Trustee may, if it shall
be unwilling to so act, or shall, if it is unable to so act or if the Note
Insurer so requests in writing to the Indenture Trustee, appoint, pursuant to
such direction of the Note Insurer, or if no such direction is provided to the
Indenture Trustee, pursuant to the provisions set forth in Section 7.02(c), or
petition a court of competent jurisdiction to appoint, any established mortgage
loan servicing institution acceptable to the Note Insurer that has a net worth
of not less than $15,000,000 as the successor to the Servicer hereunder in the
assumption of all or any part of the responsibilities, duties or liabilities of
the Servicer hereunder.

         (c) In the event the Indenture Trustee is the successor Servicer, it
shall be entitled to the same Servicing Compensation (including the Servicing
Fee as adjusted pursuant to the definition thereof) and other funds pursuant to
Section 5.08 hereof as the Servicer if the Servicer had continued to act as
servicer hereunder. In the event the Indenture Trustee is unable or unwilling to
act as successor Servicer, the Indenture Trustee shall solicit, by public
announcement, bids from housing and home finance institutions, banks and
mortgage servicing institutions meeting the qualifications set forth above. Such
public announcement shall specify that the successor servicer shall be entitled
to the full amount of the aggregate Servicing Fees hereunder as servicing
compensation, together with the other Servicing Compensation. Within thirty (30)
days after any such public announcement, the Indenture Trustee shall negotiate
and effect the sale, transfer and assignment of the servicing rights and
responsibilities hereunder to the qualified party submitting the highest
qualifying bid. The Indenture Trustee shall deduct from any sum received by the
Indenture Trustee from the successor to the Servicer in respect of such sale,
transfer and assignment all costs and expenses of any public announcement and of
any sale, transfer and assignment of the servicing rights and responsibilities
hereunder and the amount of any unreimbursed Servicing Advances and Periodic
Advances owed to the Indenture Trustee. After such deductions, the remainder of
such sum shall be paid by the Indenture Trustee to the Servicer at the time of
such sale, transfer and assignment to the Servicer's successor.

         (d) The Indenture Trustee and such successor shall take such action,
consistent with this Agreement, as shall be necessary to effectuate any such
succession. The Servicer agrees to cooperate with the Indenture Trustee and any
successor Servicer in effecting the termination of the Servicer's servicing
responsibilities and rights hereunder and shall promptly provide the Indenture
Trustee or such successor Servicer, as applicable, at the Servicer's cost and
expense, all documents and records reasonably requested by it to enable it to
assume the Servicer's functions hereunder and shall promptly also transfer to
the Indenture Trustee or such successor servicer, as applicable, all amounts
that then have been or should have been deposited in the Collection Account by
the Servicer or that are thereafter received with respect to the Mortgage Loans.
Any collections received by the Servicer after such removal or resignation shall
be endorsed by it to the Indenture Trustee and remitted directly to the
Indenture Trustee or, at the direction of the Indenture Trustee, to the
successor Servicer. Neither the Indenture Trustee nor any other successor
Servicer shall be held liable by reason of any failure to make, or any delay in
making, any payment hereunder or any portion thereof caused by (i) the failure
of the Servicer to deliver, or any delay in delivering, cash, documents or
records to it, or (ii) restrictions imposed by any regulatory authority having
jurisdiction over the Servicer hereunder. Notwithstanding anything to the
contrary herein, no appointment of a successor Servicer under this Agreement
shall be effective until the Note Insurer shall have consented thereto, and
written notice of such proposed appointment shall have been provided by the
Indenture Trustee to the Note Insurer, the Depositor, and to each Noteholder.
The Indenture Trustee shall not resign as Servicer until a successor Servicer
reasonably acceptable to the Note Insurer has been appointed or until a
successor Servicer has been appointed in accordance with paragraph (c) above.
The Note Insurer shall have the right to remove the Indenture Trustee (or any
successor Servicer) as successor Servicer under this Section 7.02 without cause,
and the Indenture Trustee shall appoint such other successor Servicer as
directed by the Note Insurer.

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<PAGE>

         (e) Pending appointment of a successor Servicer hereunder, the
Indenture Trustee shall act in such capacity as hereinabove provided. In
connection with such appointment and assumption, the Indenture Trustee may make
such arrangements for the compensation of such successor Servicer out of
payments on Mortgage Loans as the Note Insurer and such successor shall agree;
provided, however, that unless otherwise agreed to by the Note Insurer no such
compensation shall be in excess of that permitted the Servicer pursuant to
Section 5.08, together with other Servicing Compensation. The Servicer, the
Indenture Trustee and such successor Servicer shall take such action, consistent
with this Agreement, as shall be necessary to effectuate any such succession.

         Section 7.03. Waiver of Defaults. The Majority Noteholders may, on
behalf of all Noteholders, and subject to the consent of the Note Insurer, waive
any events permitting removal of the Servicer as servicer pursuant to this
Article VII; provided, however, that the Majority Noteholders may not waive a
default in making a required payment on a Note without the consent of the Holder
of such Note. Upon any waiver of a past default, such default shall cease to
exist, and any Servicer Event of Default arising therefrom shall be deemed to
have been remedied for every purpose of this Agreement. No such waiver shall
extend to any subsequent or other default or impair any right consequent thereto
except to the extent expressly so waived. Notice of any such waiver shall be
given by the Indenture Trustee to the Rating Agencies, the Depositor and the
Note Insurer.

         Section 7.04. Rights of the Note Insurer to Exercise Rights of the
Noteholders. By accepting its Note, each Noteholder agrees that unless a Note
Insurer Default exists, the Note Insurer shall be deemed to be the Noteholders
for all purposes (other than with respect to the receipt of payment on the
Notes) and shall have the right to exercise all rights of the Noteholders under
this Agreement and under the Notes without any further consent of the
Noteholders, including, without limitation:

         (a) the right to require the Unaffiliated Seller to repurchase Mortgage
Loans pursuant to Sections 2.06 and 4.02 hereof to the extent set forth therein;

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<PAGE>

         (b) the right to give notices of breach or to terminate the rights and
obligations of the Servicer as servicer pursuant to Section 7.01 hereof and to
consent to or direct waivers of Servicer defaults pursuant to Section 7.03
hereof;

         (c) the right to direct the actions of the Indenture Trustee during the
continuance of a Servicer Event of Default pursuant to Sections 7.01 and 7.02
hereof;

         (d) the right to institute proceedings against the Servicer pursuant to
Section 7.01 hereof;

         (e) the right to remove the Indenture Trustee pursuant to Section 6.09
of the Indenture;

         (f) the right to direct foreclosures upon the failure of the Servicer
to do so in accordance with the provisions of Section 5.06 of this Agreement;
and

         (g) any rights or remedies expressly given the Majority Noteholders.

         In addition, each Noteholder agrees that, subject to Section 10.02,
unless a Note Insurer Default exists, the rights specifically enumerated above
may only be exercised by the Noteholders with the prior written consent of the
Note Insurer.

         Section 7.05. Indenture Trustee To Act Solely with Consent of the Note
Insurer. Unless a Note Insurer Default exists, the Indenture Trustee shall not,
without the Note Insurer's consent or unless directed by the Note Insurer:

         (a) terminate the rights and obligations of the Servicer as Servicer
pursuant to Section 7.01 hereof;

         (b) agree to any amendment pursuant to Section 10.03 hereof; or

         (c) undertake any litigation.

         The Note Insurer may, in writing and in its sole discretion renounce
all or any of its rights under Sections 7.04, 7.05 or 7.06 or any requirement
for the Note Insurer's consent for any period of time.

         Section 7.06. Mortgage Loans, Trust Estate and Accounts Held for
Benefit of the Note Insurer. (a) The Indenture Trustee shall hold the Trust
Estate and shall cause the Collateral Agent on its behalf to hold the Indenture
Trustee's Mortgage Files, for the benefit of the Noteholders and the Note
Insurer, and all references in this Agreement and in the Notes to the benefit of
Noteholders shall be deemed to include the Note Insurer. The Indenture Trustee
shall cooperate in all reasonable respects with any reasonable request by the
Note Insurer for action to preserve or enforce the Note Insurer's rights or
interests under this Agreement and the Notes unless, as stated in an Opinion of
Counsel addressed to the Indenture Trustee and the Note Insurer, such action is
adverse to the interests of the Noteholders or diminishes the rights of the
Noteholders or imposes additional burdens or restrictions on the Noteholders.

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<PAGE>

         (b) The Servicer hereby acknowledges and agrees that it shall service
the Mortgage Loans for the benefit of the Noteholders and for the benefit of the
Note Insurer, and all references in this Agreement to the benefit of or actions
on behalf of the Noteholders shall be deemed to include the Note Insurer.

         Section 7.07. Note Insurer Default. Notwithstanding anything elsewhere
in this Agreement or in the Notes to the contrary, if a Note Insurer Default
exists, or if and to the extent the Note Insurer has delivered its written
renunciation of all of its rights under this Agreement, the provisions of this
Article VII and all other provisions of this Agreement which (a) permit the Note
Insurer to exercise rights of the Noteholders, (b) restrict the ability of the
Noteholders, the Servicer, the Collateral Agent or the Indenture Trustee to act
without the consent or approval of the Note Insurer, (c) provide that a
particular act or thing must be acceptable to the Note Insurer, (d) permit the
Note Insurer to direct (or otherwise to require) the actions of the Indenture
Trustee, the Collateral Agent, the Servicer or the Noteholders, (e) provide that
any action or omission taken with the consent, approval or authorization of the
Note Insurer shall be authorized hereunder or shall not subject the party taking
or omitting to take such action to any liability hereunder or (f) which have a
similar effect, shall be of no further force and effect and the Indenture
Trustee shall administer the Trust Estate and perform its obligations hereunder
solely for the benefit of the Holders of the Notes. Nothing in the foregoing
sentence, nor any action taken pursuant thereto or in compliance therewith,
shall be deemed to have released the Note Insurer from any obligation or
liability it may have to any party or to the Noteholders hereunder, under any
other agreement, instrument or document (including, without limitation, the
Policy) or under applicable law.

                                  ARTICLE VIII

                                   TERMINATION

         Section 8.01. Termination. (a) Subject to Section 8.02, this Agreement
shall terminate upon notice to the Indenture Trustee of the disposition of all
funds with respect to the last Mortgage Loan and the remittance of all funds due
hereunder and the payment of all Reimbursement Amounts, Premium Amounts, the
Indenture Trustee Fee and other amounts due and payable to the Note Insurer and
the Indenture Trustee.

         (b) In addition, subject to Section 8.02, the Servicer may, at its
option and at its sole cost and expense, call the Notes or terminate the Trust
in accordance with the terms of Section 10.01 of the Indenture.

         (c) If on any Distribution Date, the Servicer determines that there are
no outstanding Mortgage Loans and no other funds or assets in the Trust Estate
other than funds in the Distribution Account, the Servicer shall send a final
payment notice promptly to each Noteholder and the Note Insurer in accordance
with Section 8.01(d).

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<PAGE>

         (d) Notice of any termination, specifying the Distribution Date upon
which the Trust will terminate and the Noteholders shall surrender their Notes
to the Indenture Trustee for final payment and cancellation, shall be given
promptly by the Servicer by letter to Noteholders and the Note Insurer mailed
during the month of such final payment before the Servicer Remittance Date in
such month, specifying (i) the Distribution Date upon which final payment of the
Notes will be made upon presentation and surrender of Notes at the office of the
Indenture Trustee therein designated, (ii) the amount of any such final payment
and (iii) that the Record Date otherwise applicable to such Distribution Date is
not applicable, payments being made only upon presentation and surrender of the
Notes at the office of the Indenture Trustee therein specified. The Servicer
shall give such notice to the Indenture Trustee therein specified at the time
such notice is given to Noteholders. The obligations of the Note Insurer
hereunder shall terminate upon the deposit by the Servicer with the Indenture
Trustee of a sum sufficient to purchase all of the Mortgage Loans and REO
Properties as set forth in Section 10.01 of the Indenture or when the Note
Principal Balance of the Notes has been reduced to zero.

         (e) In the event that all of the Noteholders do not surrender their
Notes for cancellation within six (6) months after the time specified in the
above-mentioned written notice, the Servicer shall give a second written notice
to the remaining Noteholders to surrender their Notes for cancellation and
receive the final payment with respect thereto. If within six (6) months after
the second notice, all of the Notes shall not have been surrendered for
cancellation, the Indenture Trustee may take appropriate steps, or may appoint
an agent to take appropriate steps, to contact the remaining Noteholders
concerning surrender of their Notes and the cost thereof shall be paid out of
the funds and other assets which remain subject hereto. If within nine (9)
months after the second notice all the Notes shall not have been surrendered for
cancellation, the Trust Certificateholders shall be entitled to all unclaimed
funds and other assets which remain subject hereto and the Indenture Trustee
upon transfer of such funds shall be discharged of any responsibility for such
funds and the Noteholders shall look only to the Trust Certificateholders for
payment and not to the Note Insurer. Such funds shall remain uninvested.

         Section 8.02. Additional Termination Requirements. By their acceptance
of the Notes, the Holders thereof hereby agree to appoint the Servicer as their
attorney in fact to: (i) adopt such a plan of complete liquidation (and the
Noteholders hereby appoint the Indenture Trustee as their attorney in fact to
sign such plan) as appropriate or upon the written request of the Note Insurer
and (ii) to take such other action in connection therewith as may be reasonably
required to carry out such plan of complete liquidation all in accordance with
the terms hereof.

         Section 8.03. Accounting Upon Termination of Servicer. Upon termination
of the Servicer, the Servicer shall, at its expense:

         (a) deliver to the successor Servicer or, if none shall yet have been
appointed, to the Indenture Trustee, the funds in any Account;

         (b) deliver to the successor Servicer or, if none shall yet have been
appointed, to the Collateral Agent on behalf of the Indenture Trustee all
Indenture Trustee's Mortgage Files and related documents and statements held by
it hereunder and a Mortgage Loan portfolio computer tape;

         (c) deliver to the successor Servicer or, if none shall yet have been
appointed, to the Indenture Trustee and, upon request, to the Noteholders a full
accounting of all funds, including a statement showing the Monthly Payments
collected by it and a statement of monies held in trust by it for the payments
or charges with respect to the Mortgage Loans; and

                                       40
<PAGE>

         (d) execute and deliver such instruments and perform all acts
reasonably requested in order to effect the orderly and efficient transfer of
servicing of the Mortgage Loans to the successor Servicer and to more fully and
definitively vest in such successor all rights, powers, duties,
responsibilities, obligations and liabilities of the Servicer under this
Agreement.

                                   ARTICLE IX

                              THE COLLATERAL AGENT

         Section 9.01. Duties of the Collateral Agent. (a) The Collateral Agent,
prior to the occurrence of an Event of Default of which a Responsible Officer
shall have actual knowledge and after the curing of all Events of Default which
may have occurred, undertakes to perform such duties and only such duties as are
specifically set forth in this Agreement. If an Event of Default of which a
Responsible Officer shall have actual knowledge has occurred and has not been
cured or waived, the Collateral Agent shall exercise such of the rights and
powers vested in it by this Agreement, and use the same degree of care and skill
in its exercise as a prudent person would exercise or use under the
circumstances in the conduct of such person's own affairs.

         (b) The Collateral Agent, upon receipt of all resolutions,
certificates, statements, opinions, reports, documents, orders or other
instruments furnished to the Collateral Agent which are specifically required to
be furnished pursuant to any provision of this Agreement, shall examine them to
determine whether they conform on their face to the requirements of this
Agreement; provided, however, that the Collateral Agent shall not be responsible
for the accuracy or content of any resolution, certificate, statement, opinion,
report, document, order or other instrument furnished by any Person hereunder.
If any such instrument is found not to conform on its face to the requirements
of this Agreement, the Collateral Agent shall note it as such on the Initial
Certification or Final Certification delivered pursuant to Section 2.06(b).

         (c) No provision of this Agreement shall be construed to relieve the
Collateral Agent from liability for its own negligent action, its own negligent
failure to act or its own willful misconduct; provided, however, that:

                  (i) prior to the occurrence of an Event of Default of which a
         Responsible Officer shall have actual knowledge , and after the curing
         of all such Events of Default which may have occurred, the duties and
         obligations of the Collateral Agent shall be determined solely by the
         express provisions of this Agreement, the Collateral Agent shall not be
         liable except for the performance of such duties and obligations as are
         specifically set forth in this Agreement, no implied covenants or
         obligations shall be read into this Agreement against the Collateral
         Agent and, in the absence of bad faith on the part of the Collateral
         Agent, the Collateral Agent may conclusively rely, as to the truth of
         the statements and the correctness of the opinions expressed therein,
         upon any certificates or opinions furnished to the Collateral Agent and
         conforming to the requirements of this Agreement;

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<PAGE>

                  (ii) the Collateral Agent shall not be personally liable for
         an error of judgment made in good faith by a Responsible Officer or
         other officers of the Collateral Agent, unless it shall be proved that
         the Collateral Agent was negligent in ascertaining the pertinent facts;

                  (iii) the Collateral Agent shall not be personally liable with
         respect to any action taken, suffered or omitted to be taken by it in
         good faith in accordance with this Agreement or at the direction of the
         Note Insurer or the Indenture Trustee or with the consent of the Note
         Insurer or the Indenture Trustee;

                  (iv) the Collateral Agent shall not be required to expend or
         risk its own funds or otherwise incur financial liability for the
         performance of any of its duties hereunder or the exercise of any of
         its rights or powers if there is reasonable ground for believing that
         the repayment of such funds or adequate indemnity against such risk or
         liability is not reasonably assured to it and none of the provisions
         contained in this Agreement shall in any event require the Collateral
         Agent to perform, or be responsible for the manner of performance of,
         any of the obligations of the Servicer or the Indenture Trustee under
         this Agreement; and

                  (v) subject to the other provisions of this Agreement and
         without limiting the generality of this Section 9.01, the Collateral
         Agent shall have no duty (A) to see to any recording, filing, or
         depositing of this Agreement or any agreement referred to herein or any
         financing statement or continuation statement evidencing a security
         interest, or to see to the maintenance of any such recording or filing
         or depositing or to any rerecording, refiling or redepositing of any
         thereof, (B) to see to any insurance, (C) to see to the payment or
         discharge of any tax, assessment, or other governmental charge or any
         lien or encumbrance of any kind owing with respect to, assessed or
         levied against, any part of the Trust, the Trust Estate, the
         Noteholders or the Mortgage Loans, (D) to confirm or verify the
         contents of any reports or certificates of any Person delivered to the
         Collateral Agent pursuant to this Agreement believed by the Collateral
         Agent to be genuine and to have been signed or presented by the proper
         party or parties.

         Section 9.02. Certain Matters Affecting the Collateral Agent. Except as
otherwise provided in Section 9.01 hereof:

         (a) the Collateral Agent may rely and shall be protected in acting or
refraining from acting upon any resolution, Officer's Certificate, Opinion of
Counsel, certificate of auditors or any other certificate, statement,
instrument, opinion, report, notice, request, consent, order, appraisal, bond or
other paper or document believed by it to be genuine and to have been signed or
presented by the proper party or parties;

         (b) the Collateral Agent may consult with counsel and any Opinion of
Counsel or advice of such counsel shall be full and complete authorization and
protection in respect of any action taken or suffered or omitted by it hereunder
in good faith and in accordance with such Opinion of Counsel or such advice of
counsel;

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<PAGE>

         (c) the Collateral Agent shall be under no obligation to exercise any
of the powers vested in it by this Agreement or to institute, conduct or defend
by litigation hereunder or in relation hereto at the request, order or direction
of the Note Insurer or any of the Noteholders, pursuant to the provisions of
this Agreement, unless such Noteholders or the Note Insurer, as applicable,
shall have offered to the Collateral Agent reasonable security or indemnity
reasonably satisfactory to it against the costs, expenses and liabilities which
may be incurred therein by the Collateral Agent or thereby; nothing contained
herein shall, however, relieve the Collateral Agent of the obligation, upon the
occurrence of an Event of Default of which a Responsible Officer shall have
actual knowledge (which has not been cured), to exercise such of the rights and
powers vested in it by this Agreement, and to use the same degree of care and
skill in its exercise as a prudent person would exercise or use under the
circumstances in the conduct of such person's own affairs;

         (d) the Collateral Agent shall not be personally liable for any action
taken, suffered or omitted by it in good faith and believed by it to be
authorized or within the discretion or rights or powers conferred upon it by
this Agreement;

         (e) the Collateral Agent shall not be bound to make any investigation
into the facts or matters stated in any resolution, certificate, statement,
instrument, opinion, report, notice, request, consent, order, approval, bond or
other paper or document, unless requested in writing to do so by the Note
Insurer or the Majority Noteholders; provided, however, that if the payment
within a reasonable time to the Collateral Agent of the costs, expenses or
liabilities likely to be incurred by it in the making of such investigation is,
in the opinion of the Collateral Agent, not reasonably assured to the Collateral
Agent by the security afforded to it by the terms of this Agreement, the
Collateral Agent may require reasonable indemnity reasonably satisfactory to the
Collateral Agent against such cost, expense or liability as a condition to
taking any such action. The reasonable expense of every such examination shall
be paid by the Servicer or, if paid by the Collateral Agent, shall be repaid by
the Servicer upon demand from the Servicer's own funds;

         (f) the right of the Collateral Agent to perform any discretionary act
enumerated in this Agreement shall not be construed as a duty, and the
Collateral Agent shall not be answerable for anything other than its negligence
or willful misconduct in the performance of such act;

         (g) the Collateral Agent may execute any of the powers hereunder or
perform any duties hereunder either directly or by or through agents or
attorneys.

         Section 9.03. Collateral Agent Not Liable for Notes or Mortgage Loans.
The recitals contained herein shall be taken as the statements of the Trust and
the Servicer, as the case may be, and the Collateral Agent assumes no
responsibility for their correctness. The Collateral Agent makes no
representations as to the validity or sufficiency of this Agreement or of any
Mortgage Loan or related document. The Collateral Agent shall not be accountable
for the use or application of any funds paid to the Servicer in respect of the
Mortgage Loans or deposited in or withdrawn from the Collection Account by the
Servicer. The Collateral Agent shall not be responsible for the legality or
validity of the Agreement or the validity, priority, perfection or sufficiency
of the security for the Notes issued or intended to be issued under the
Indenture.

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<PAGE>

         Section 9.04. Collateral Agent May Own Notes. The Collateral Agent
in its individual or any other capacity may become the owner or pledgor of Notes
with the same rights it would have if it were not Collateral Agent, and may
otherwise deal with the parties hereto.

         Section 9.05. Collateral Agent's Fees and Expenses; Indemnity. (a)
The Collateral Agent acknowledges that in consideration of the performance of
its duties hereunder it is entitled to receive its fees and expenses from the
Servicer, as separately agreed between the Servicer and the Collateral Agent.
The Depositor, the Indenture Trustee and the Note Insurer shall not pay any of
the Collateral Agent fees and expenses in connection with this transaction. The
Collateral Agent shall not be entitled to compensation for any expense,
disbursement or advance as may arise from its negligence or bad faith.

         (b) The Collateral Agent and any director, officer, employee or agent
of the Collateral Agent shall be indemnified by first, the Trust and, second,
the Servicer and held harmless against any loss, liability, claim, damage or
reasonable expense incurred in connection with this Agreement other than any
loss, liability or expense incurred by reason of willful misfeasance, bad faith
or negligence of the Collateral Agent in the performance of its duties hereunder
or by reason of the Collateral Agent's reckless disregard of obligations and
duties hereunder. The obligations of the Servicer under this Section 9.05
arising prior to any resignation or termination of the Servicer hereunder shall
survive termination of the Servicer and payment of the Notes.

         Section 9.06. Eligibility Requirements for Collateral Agent. The
Collateral Agent hereunder shall at all times be a banking entity (a) organized
and doing business under the laws of any state or the United States of America
subject to supervision or examination by federal or state authority, (b)
authorized under such laws to exercise corporate trust powers, including taking
title to the Trust Estate on behalf of the Indenture Trustee, for the benefit of
the Noteholders and the Note Insurer, (c) be a wholly owned subsidiary of a bank
holding company having a combined capital and surplus of at least $50,000,000,
(d) whose long-term deposits, if any, shall be rated at least BBB- by S&P and
Baa3 by Moody's (except as provided herein) or such lower long-term deposit
rating as may be approved in writing by the Note Insurer, and (e) reasonably
acceptable to the Note Insurer as evidenced in writing. If such banking entity
publishes reports of condition at least annually, pursuant to law or to the
requirements of the aforesaid supervising or examining authority, then for the
purposes of determining an entity's combined capital and surplus for clause (c)
of this Section 9.06, the amount set forth in its most recent report of
condition so published shall be deemed to be its combined capital and surplus.
In case at any time the Collateral Agent shall cease to be eligible in
accordance with the provisions of this Section 9.06, the Collateral Agent shall
resign immediately in the manner and with the effect specified in Section 9.07.

         Section 9.07. Resignation and Removal of the Collateral Agent. (a)
The Collateral Agent may at any time resign and be discharged from the trusts
hereby created by giving thirty (30) days' written notice thereof to the
Indenture Trustee, the Servicer, and the Note Insurer.

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<PAGE>

         (b) If at any time the Collateral Agent shall cease to be eligible in
accordance with the provisions of Section 9.06 and shall fail to resign after
written request therefor by the Indenture Trustee, the Servicer or the Note
Insurer, or if at any time the Collateral Agent shall become incapable of
acting, or shall be adjudged bankrupt or insolvent, or a receiver of the
Collateral Agent or of its property shall be appointed, or any public officer
shall take charge or control of the Collateral Agent or of its property or
affairs for the purpose of rehabilitation, conservation or liquidation, then the
Indenture Trustee or the Servicer, with the consent of the Note Insurer, or the
Note Insurer may remove the Collateral Agent.

         (c) If the Collateral Agent fails to perform in accordance with the
terms of this Agreement, the Indenture Trustee, the Servicer or the Majority
Noteholders, with the consent of the Note Insurer, or the Note Insurer may
remove the Collateral Agent.

         (d) Upon removal or receipt of notice of resignation of the Collateral
Agent, the Indenture Trustee shall either (i) take possession of the Indenture
Trustee's Mortgage Files and assume the duties of the Collateral Agent hereunder
or (ii) appoint a successor Collateral Agent pursuant to Section 9.08. If the
Indenture Trustee shall assume the duties of the Collateral Agent hereunder, it
shall notify the Trust, the Depositor, the Servicer and Note Insurer in writing.

         Section 9.08. Successor Collateral Agent. Upon the resignation or
removal of the Collateral Agent, the Indenture Trustee may appoint a successor
Collateral Agent, with the written approval of the Note Insurer; provided,
however, that the successor Collateral Agent so appointed shall in no event be
the Unaffiliated Seller, the Depositor or the Servicer or any Person known to a
Responsible Officer of the Indenture Trustee to be an Affiliate of the
Unaffiliated Seller, the Depositor or the Servicer and shall be approved by the
Note Insurer. The Indenture Trustee or such custodian, as the case may be, shall
assume the duties of the Collateral Agent hereunder. Any successor Collateral
Agent appointed as provided in this Section 9.08 shall execute, acknowledge and
deliver to the Trust, the Depositor, the Note Insurer, the Servicer, the
Indenture Trustee and to its predecessor Collateral Agent an instrument
accepting such appointment hereunder, and thereupon the resignation or removal
of the predecessor Collateral Agent shall become effective and such successor
Collateral Agent, without any further act, deed or conveyance, shall become
fully vested with all the rights, powers, duties and obligations of its
predecessor hereunder, with the like effect as if originally named as Collateral
Agent herein. The predecessor Collateral Agent shall deliver to the successor
Collateral Agent all of the Indenture Trustee's Mortgage Files and related
documents and statements held by it hereunder, and the Servicer and the
predecessor Collateral Agent shall execute and deliver such instruments and do
such other things as may reasonably be required for more fully and certainly
vesting and confirming in the successor Collateral Agent all such rights,
powers, duties and obligations. The cost of any such transfer to the successor
Collateral Agent shall be for the account of the Collateral Agent in the event
of the resignation of the Collateral Agent, and shall be for the account of the
Servicer in the event of the removal of the Collateral Agent. No successor
Collateral Agent shall accept appointment as provided in this Section 9.08
unless at the time of such acceptance such successor Collateral Agent shall be
eligible under the provisions of Section 9.06. Upon acceptance of appointment by
a successor Collateral Agent as provided in this Section 9.08, the Servicer
shall mail notice of the succession of such Collateral Agent hereunder to all
Noteholders at their addresses as shown in the Note Register and to the Rating
Agencies. If the Servicer fails to mail such notice within ten (10) days after
acceptance of appointment by the successor Collateral Agent, the successor
Collateral Agent shall cause such notice to be mailed at the expense of the
Servicer.

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<PAGE>

Section 9.09. Merger or Consolidation of Collateral Agent. Any Person into which
the Collateral Agent may be merged or converted or with which it may be
consolidated or any corporation or national banking association resulting from
any merger, conversion or consolidation to which the Collateral Agent shall be a
party, or any corporation or national banking association succeeding to the
business of the Collateral Agent, shall be the successor of the Collateral Agent
hereunder; provided, that such corporation or national banking association shall
be eligible under the provisions of Section 9.06, 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.

                                   ARTICLE X

                            MISCELLANEOUS PROVISIONS

         Section 10.01. Limitation on Liability. None of the Trust, the Owner
Trustee, the Depositor, the Servicer, the Collateral Agent, the Indenture
Trustee or any of the directors, officers, employees or agents of such Persons
shall be under any liability to the Trust, the Noteholders or the Note Insurer
for any action taken, or for refraining from the taking of any action, in good
faith pursuant to this Agreement, or for errors in judgment; provided, however,
that this provision shall not protect the Trust, the Owner Trustee, the
Depositor, the Servicer, the Collateral Agent, the Indenture Trustee or any such
Person against any breach of warranties, representations, covenants or
agreements made herein by such party, or against any specific liability imposed
on each such party pursuant to this Agreement or against any liability which
would otherwise be imposed upon such party by reason of willful misfeasance, bad
faith or gross negligence in the performance of duties or by reason of reckless
disregard of obligations or duties hereunder. The Trust, the Owner Trustee, the
Depositor, the Servicer, the Collateral Agent, the Indenture Trustee and any
director, officer, employee or agent of such Person may rely in good faith on
any document of any kind which, prima facie, is properly executed and submitted
by any appropriate Person respecting any matters arising hereunder.

         Section 10.02. Acts of Noteholders. (a) Except as otherwise
specifically provided herein, whenever Noteholder action, consent or approval is
required under this Agreement, such action, consent or approval shall be deemed
to have been taken or given on behalf of, and shall be binding upon, all
Noteholders if the Majority Noteholders or the Note Insurer agrees to take such
action or give such consent or approval.

         (b) The death or incapacity of any Noteholder shall not operate to
terminate this Agreement or the Trust, nor entitle such Noteholder's legal
representatives or heirs to claim an accounting or to take any action or
proceeding in any court for a partition or winding up of the Trust, nor
otherwise affect the rights, obligations and liabilities of the parties hereto
or any of them.

         (c) No Noteholder shall have any right to vote (except as expressly
provided for herein) or in any manner otherwise control the operation and
management of the Trust, or the obligations of the parties hereto, nor shall
anything herein set forth, or contained in the terms of the Notes, be construed
so as to constitute the Noteholders from time to time as partners or members of
an association; nor shall any Noteholder be under any liability to any third
person by reason of any action taken by the parties to this Agreement pursuant
to any provision hereof.

                                       46
<PAGE>

         Section 10.03. Amendment. (a) This Agreement may be amended from time
to time by the Owner Trustee, on behalf of the Trust, the Servicer, the
Depositor, the Collateral Agent and the Indenture Trustee by written agreement,
upon the prior written consent of the Note Insurer, without notice to or consent
of the Noteholders or the Holders of the Trust Certificates 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 or effect a significant changes in the permitted
activities of the Trust; 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 Indenture Trustee or (ii) a letter from each Rating
Agency confirming that such action will not result in the reduction,
qualification or withdrawal of the then-current ratings on the Notes, adversely
affect in any material respect the interests of any Noteholder; 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 paid on any Note without the consent of such Noteholder, or change the rights
or obligations of any other party hereto without the consent of such party. The
Indenture Trustee shall give prompt written notice to the Rating Agencies of any
amendment made pursuant to this Section 10.03.

         (b) This Agreement may be amended from time to time by the Owner
Trustee, on behalf of the Trust, the Servicer, the Depositor, the Collateral
Agent and the Indenture Trustee, with the consent of the Note Insurer, the
Majority Noteholders and the Holder of the majority of the Percentage Interest
of the Trust 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 Noteholders; provided, however,
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 paid on
the Notes without the consent of the Holders of Notes or reduce the percentage
for the Holders of which are required to consent to any such amendment without
the consent of the Holders of 100% of the Notes affected thereby.

         (c) It shall not be necessary for the consent of Holders under this
Section 10.03 to approve the particular form of any proposed amendment, but it
shall be sufficient if such consent shall approve the substance thereof.

         (d) In executing, or accepting the additional trusts created by, any
supplemental indenture permitted by Article IX of the Indenture or the
modifications thereby of the trusts created by the Indenture, the Indenture
Trustee shall be entitled to receive, and (subject to Section 6.01 of the
Indenture) shall be fully protected in relying upon, an Opinion of Counsel
stating that the execution of such supplemental indenture is authorized or
permitted by the Indenture. The Indenture Trustee may, but shall not be
obligated to, enter into any such supplemental indenture that affects the
Indenture Trustee's own rights, duties or immunities under the Indenture or
otherwise. The Servicer, on behalf of the Trust, shall cause executed copies of
any supplemental indentures to be delivered to the Note Insurer and the Rating
Agencies.

                                       47
<PAGE>

         Section 10.04. Recordation of Agreement. To the extent permitted by
applicable law, this Agreement, or a memorandum thereof if permitted under
applicable law, is subject to recordation in all appropriate public offices for
real property records in all of the counties or other comparable jurisdictions
in which any or all of the properties subject to the Mortgages are situated, and
in any other appropriate public recording office or elsewhere, such recordation
to be effected by the Servicer at the direction of Majority Noteholders or the
Note Insurer.

         Section 10.05. Duration of Agreement. This Agreement shall continue in
existence and effect until terminated as herein provided.

         Section 10.06. Notices. All demands, notices and communications
hereunder shall be in writing and shall be deemed to have been duly given when
delivered to (i) in the case of the Servicer, the Subservicers or the
Originators, addressed to such Person, c/o American Business Financial Services,
Inc., Balapointe Office Centre, 111 Presidential Boulevard, Suite 127, Bala
Cynwyd, Pennsylvania 19004, Attention: General Counsel; (ii) in the case of the
Unaffiliated Seller, Balapointe Office Centre, 111 Presidential Boulevard, Suite
127, Bala Cynwyd, Pennsylvania 19004, Attention: Jeffrey M. Ruben, Executive
Vice President; (iii) in the case of the Trust, ABFS Mortgage Loan Trust 2001-4,
c/o the Owner Trustee at 400 North Michigan Avenue, 2nd floor, Chicago, Illinois
60611, Attention: Corporate Trust Services and at its Corporate Trust Office;
(iv) in the case of the Indenture Trustee or the Collateral Agent, c/o JPMorgan
Chase Bank, 450 West 33rd Street, 14th Floor, New York, New York, 10001,
Attention: Institutional Trust Services, ABFS Mortgage Loan Trust 2001-4,
telephone (212) 946-3200, telecopy (212) 946-7317; (v) in the case of the
Depositor or the Representative, Bear Stearns Asset Backed Securities, Inc. or
Bear, Stearns & Co. Inc., 245 Park Avenue, New York, New York 10292, Attention:
Chief Counsel, (vi) in the case of the Co-Underwriter, Credit Suisse First
Boston Corporation, 11 Madison Avenue, 5th Floor, New York, New York 10010,
Attention: Brendan Keane, ; (vii) in the case of the Note Insurer, MBIA
Insurance Corporation, 113 King Street, Armonk, New York 10504 Attention:
Insured Portfolio Management - Mortgage-Backed Securities (in each case in which
notice or other communication to the Note Insurer refers to an Event of Default,
a Servicer Event of Default or a claim on the Policy or with respect to which
failure on the part of the Note Insurer to respond shall be deemed to constitute
consent or acceptance, then a copy of such notice or other communication should
also be sent to the attention of the General Counsel, and shall be marked to
indicate "URGENT MATERIAL ENCLOSED"); (viii) in the case of Standard & Poor's 55
Water Street, New York, New York 10041-0003 Attention: Residential Mortgage
Surveillance Group; (ix) in the case of Moody's Investors Service, Inc., 99
Church Street, New York, New York 10007 Attention: Home Equity Monitoring Group;
and (x) in the case of the Noteholders, as set forth in the Note Register. Any
such notices shall be deemed to be effective with respect to any party hereto
upon the receipt of such notice by such party, except that notices to the
Noteholders shall be effective upon mailing or personal delivery.

         Section 10.07. Severability of Provisions. If any one or more of the
covenants, agreements, provisions or terms of this Agreement shall be held
invalid for any reason whatsoever, then such covenants, agreements, provisions
or terms shall be deemed severable from the remaining covenants, agreements,
provisions or terms of this Agreement and shall in no way affect the validity or
enforceability of the other covenants, agreements, provisions or terms of this
Agreement.

                                       48
<PAGE>

         Section 10.08. No Partnership. Nothing herein contained shall be deemed
or construed to create a co-partnership or joint venture between the parties
hereto and the services of the Servicer shall be rendered as an independent
contractor and not as agent for the Noteholders.

         Section 10.09. Counterparts. This Agreement may be executed in one or
more counterparts and by the different parties hereto on separate counterparts,
each of which, when so executed, shall be deemed to be an original; such
counterparts, together, shall constitute one and the same agreement.

         Section 10.10. Successors and Assigns. This Agreement shall inure to
the benefit of and be binding upon the Trust, the Servicer, the Depositor, the
Indenture Trustee, the Collateral Agent and the Noteholders and their respective
successors and permitted assigns.

         Section 10.11. Headings. The headings of the various sections of this
Agreement have been inserted for convenience of reference only and shall not be
deemed to be part of this Agreement.

         Section 10.12. The Note Insurer Default. Any right conferred to the
Note Insurer shall be suspended during any period in which a Note Insurer
Default exists. At such time as the Notes are no longer outstanding hereunder,
the Note Insurance Policy has terminated in accordance with its terms and no
amounts owed to the Note Insurer hereunder and no Reimbursement Amounts remain
unpaid, the Note Insurer's rights hereunder shall terminate.

         Section 10.13. Third Party Beneficiary. The parties agree that each of
the Owner Trustee, the Unaffiliated Seller and the Note Insurer is intended and
shall have all rights of a third-party beneficiary of this Agreement.

         Section 10.14. Intent of the Parties. It is the intent of the parties
hereto and Noteholders that, for federal income taxes, state and local income or
franchise taxes and other taxes imposed on or measured by income, the Notes be
treated as debt. The parties to this Agreement and the Holder of each Note, by
acceptance of its Note, and each Beneficial Owner thereof, agree to treat, and
to take no action inconsistent with the treatment of, the related Notes in
accordance with the preceding sentence for purposes of federal income taxes,
state and local income and franchise taxes and other taxes imposed on or
measured by income.

         Section 10.15. 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.

                                       49
<PAGE>

         (b) THE TRUST, THE SERVICER, THE DEPOSITOR, THE COLLATERAL AGENT AND
THE INDENTURE TRUSTEE HEREBY SUBMIT TO THE NON-EXCLUSIVE JURISDICTION OF THE
COURTS OF THE STATE OF NEW YORK AND THE UNITED STATES DISTRICT COURT LOCATED IN
THE BOROUGH OF MANHATTAN IN NEW YORK CITY, AND EACH WAIVES PERSONAL SERVICE OF
ANY AND ALL PROCESS UPON IT AND CONSENTS THAT ALL SUCH SERVICE OF PROCESS BE
MADE BY REGISTERED MAIL DIRECTED TO THE ADDRESS SET FORTH IN SECTION 10.06
HEREOF AND SERVICE SO MADE SHALL BE DEEMED TO BE COMPLETED FIVE (5) DAYS AFTER
THE SAME SHALL HAVE BEEN DEPOSITED IN THE U.S. MAILS, POSTAGE PREPAID. THE
TRUST, THE DEPOSITOR, THE SERVICER, THE COLLATERAL AGENT AND THE INDENTURE
TRUSTEE EACH HEREBY WAIVE 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 10.15 SHALL AFFECT THE RIGHT OF THE TRUST, THE
DEPOSITOR, THE SERVICER, THE COLLATERAL AGENT OR THE INDENTURE TRUSTEE TO SERVE
LEGAL PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR AFFECT ANY OF THEIR RIGHTS
TO BRING ANY ACTION OR PROCEEDING IN THE COURTS OF ANY OTHER JURISDICTION.

         (c) THE TRUST, THE DEPOSITOR, THE SERVICER, THE COLLATERAL AGENT AND
THE INDENTURE TRUSTEE EACH HEREBY WAIVES 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 WILL BE RESOLVED IN A BENCH TRIAL WITHOUT A JURY.

                  [Remainder of Page Intentionally Left Blank]

                                       50
<PAGE>

                  IN WITNESS WHEREOF, the Servicer, the Trust, the Indenture
Trustee, the Collateral Agent and the Depositor have caused their names to be
signed hereto by their respective officers thereunto duly authorized as of the
day and year first above written.

                BEAR STEARNS ASSET BACKED SECURITIES, INC.,
                  as Depositor

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

                ABFS MORTGAGE LOAN TRUST 2001-4

                By:      U.S. BANK TRUST NATIONAL ASSOCIATION, not in its
                individual capacity, but solely as Owner Trustee under the
                Trust Agreement

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

                AMERICAN BUSINESS CREDIT, INC.,
                  as Servicer

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

                JPMORGAN CHASE BANK,
                  as Indenture Trustee and Collateral Agent

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

                [Signature Page to Sale and Servicing Agreement]

<PAGE>

                                                                       EXHIBIT A

                          CONTENTS OF THE MORTGAGE FILE

         With respect to each Mortgage Loan, the Mortgage File shall include
each of the following items (copies to the extent the originals have been
delivered to the Collateral Agent, on behalf of the Indenture Trustee, for the
benefit of the Noteholders and the Note Insurer, pursuant to Section 2.05 of the
Sale and Servicing Agreement), all of which shall be available for inspection by
the Noteholders, to the extent required by applicable laws:

     1.   The original Mortgage Note, with all prior and intervening
          endorsements showing a complete chain of endorsements from the
          originator of the Mortgage Loan to the Person so endorsing the
          Mortgage Loan to the Trustee, endorsed by such Person "Pay to the
          order of ________________ without recourse" and signed, by facsimile
          or manual signature, in the name of the Unaffiliated Seller by a
          Responsible Officer.

     2.   Either: (i) the original Mortgage, and related power of attorney, if
          any, with evidence of recording thereon, or (ii) a copy of the
          Mortgage and related power of attorney, if any, certified as a true
          copy of the original Mortgage or power of attorney by a Responsible
          Officer of the Unaffiliated Seller on the face of such copy
          substantially as follows: "certified true and correct copy of original
          which has been transmitted for recordation."

     3.   Either: (i) The original Assignment of Mortgage in recordable form in
          blank or (ii) a copy of the Assignment of Mortgage certified as a true
          copy of the original Assignment of Mortgage by a Responsible Officer
          of the Unaffiliated Seller on the face of such copy substantially as
          follows: "certified true and correct copy of original which has been
          transmitted for recordation." Any such Assignments of Mortgage may be
          made by blanket assignments for Mortgage Loans secured by the
          Mortgaged Properties located in the same county, if permitted by
          applicable law.

     4.   The original lender's policy of title insurance or a true copy
          thereof, or if such original lender's title insurance policy has been
          lost, a copy thereof certified by the appropriate title insurer to be
          true and complete, or if such lender's title insurance policy has not
          been issued as of the Closing Date, a marked up commitment (binder) to
          issue such policy.

     5.   All original intervening assignments, if any, showing a complete chain
          of assignments from the originator to the related Originator,
          including any recorded warehousing assignments, with evidence of
          recording thereon, certified by a Responsible Officer of the related
          Originator by facsimile or manual signature as a true copy of the
          original of such intervening assignments.

     6.   Originals of all assumption, written assurance, substitution and
          modification agreements, if any.

                                       A-1
<PAGE>
                                                                       EXHIBIT B

                  INDENTURE TRUSTEE'S ACKNOWLEDGMENT OF RECEIPT

                                December __, 2001

<TABLE>
<CAPTION>
<S>                                                 <C>
Bear Stearns Asset Backed Securities, Inc.         American Business Credit, Inc.
245 Park Avenue                                    BalaPointe Office Centre
New York, New York 10167                           111 Presidential Boulevard, Suite 127
                                                   Bala Cynwyd, Pennsylvania  19004

JPMorgan Chase Bank,                               MBIA Insurance Corporation
  as Collateral Agent                              113 King Street
450 West 33rd Street                               Armonk, New York  10504
New York, New York  10001
</TABLE>

     Re:  The Sale and Servicing Agreement, dated as of December 1, 2001 among
          Bear Stearns Asset Backed Securities, Inc., as Depositor, American
          Business Credit, Inc., as Servicer, JPMorgan Chase Bank, as Indenture
          Trustee and as Collateral Agent and ABFS Mortgage Loan Trust 2001-4,
          as the Trust
          ---------------------------------------------------------------------

Ladies and Gentlemen:

In accordance with Section 2.06 of the above-captioned Sale and Servicing
Agreement, the undersigned, as Indenture Trustee, hereby acknowledges receipt by
it in good faith without notice of adverse claims, of the Note Insurance Policy,
and declares that it holds and will hold the Note Insurance Policy in trust for
the exclusive use and benefit of all present and future Noteholders.

Capitalized words and phrases used herein shall have the respective meanings
assigned to them in the Appendix I to the Indenture.

                                             JPMORGAN CHASE BANK
                                                  as Indenture Trustee

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

                                      B-1
<PAGE>

                                                                       EXHIBIT C

                  COLLATERAL AGENT'S ACKNOWLEDGMENT OF RECEIPT

                                December __, 2001

<TABLE>
<CAPTION>
<S>                                                            <C>
Bear Stearns Asset Backed Securities, Inc.                   American Business Credit, Inc.
245 Park Avenue                                              BalaPointe Office Centre
New York, New York 10167                                     111 Presidential Boulevard, Suite 127
                                                             Bala Cynwyd, Pennsylvania  19004

JPMorgan Chase Bank,                                         MBIA Insurance Corporation
  as Collateral Agent                                        113 King Street
450 West 33rd Street                                         Armonk, New York  10504
New York, New York  10001
</TABLE>

     Re:  The Sale and Servicing Agreement, dated as of December 1, 2001 among
          Bear Stearns Asset Backed Securities, Inc., as Depositor, American
          Business Credit, Inc., as Servicer, JPMorgan Chase Bank, as Indenture
          Trustee and as Collateral Agent and ABFS Mortgage Loan Trust 2001-4,
          as the Trust
          ---------------------------------------------------------------------

Ladies and Gentlemen:

In accordance with Section 2.06 of the above-captioned Sale and Servicing
Agreement, the undersigned, as Collateral Agent, hereby acknowledges receipt by
it in good faith without notice of adverse claims, subject to the provisions of
Sections 2.04 and 2.05 of the Sale and Servicing Agreement (as such provisions
relate to the Mortgage Loans), of, with respect to each of the Mortgage Loans,
the Mortgage File containing the original Mortgage Note, except with respect to
the list of exceptions attached hereto, and based on its examination and only as
to the foregoing, the information set forth in the Mortgage Loan Schedule
accurately reflects information set forth in the Mortgage Note, and declares
that it holds and will hold such documents and the other documents delivered to
it constituting the Indenture Trustee's Mortgage Files, and that it holds or
will hold all such assets and such other assets included in the definition of
"Trust Estate" that are delivered to it, on behalf of the Indenture Trustee, in
trust for the exclusive use and benefit of all present and future Noteholders
and the Note Insurer.

The Collateral Agent has made no independent examination of any such documents
beyond the review specifically required in the above-referenced Sale and
Servicing Agreement. The Collateral Agent makes no representations as to: (i)
the validity, legality, sufficiency, enforceability or genuineness of any such
documents or any of the Mortgage Loans identified on the Mortgage Loan Schedule,
or (ii) the collectibility, insurability, effectiveness or suitability of any
such Mortgage Loan.

The Schedule of Mortgage Loans is attached to this Receipt.

Capitalized words and phrases used herein shall have the respective meanings
assigned to them in the Appendix I to the Indenture.

                                              JPMORGAN CHASE BANK
                                                     as Collateral Agent

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

                                      C-1
<PAGE>

                                                                       EXHIBIT D

                    INITIAL CERTIFICATION OF COLLATERAL AGENT

                              ______________, 2001

<TABLE>
<CAPTION>
<S>                                                           <C>
Bear Stearns Asset Backed Securities, Inc.                   American Business Credit, Inc.
245 Park Avenue                                              BalaPointe Office Centre
New York, New York 10167                                     111 Presidential Boulevard, Suite 127
                                                             Bala Cynwyd, Pennsylvania 19004

JPMorgan Chase Bank,                                         MBIA Insurance Corporation
  as Indenture Trustee                                       113 King Street
  and Collateral Agent                                       Armonk, New York  10504
450 West 33rd Street
New York, New York 10001
</TABLE>

     Re:  Sale and Servicing Agreement, dated as of December 1, 2001 among Bear
          Stearns Asset Backed Securities, Inc., as Depositor, ABFS Mortgage
          Loan Trust 2001-4, American Business Credit, Inc., as Servicer and
          JPMorgan Chase Bank, as Indenture Trustee and as Collateral Agent
          ---------------------------------------------------------------------

Ladies and Gentlemen:

                  In accordance with the provisions of Section 2.06 of the
above-referenced Sale and Servicing Agreement, the undersigned, as Collateral
Agent, hereby certifies that as to each Mortgage Loan listed in the Mortgage
Loan Schedule (other than any Mortgage Loan paid in full or any Mortgage Loan
listed on the attachment hereto), it has reviewed the documents delivered to it
pursuant to Section 2.05 of the Sale and Servicing Agreement and has determined
that (i) all documents required to be delivered to it pursuant to Section 2.05
of the above-referenced Sale and Servicing Agreement are in its possession, (ii)
such documents have been reviewed by it and appear regular on their face and
have not been mutilated, damaged, torn or otherwise physically altered
(handwritten additions, changes or corrections do not constitute physical
alteration if they reasonably appear to have been initialed by the Mortgagor),
appear regular on their face and relate to such Mortgage Loan and (iii) based on
its examination and only as to the foregoing documents, the information set
forth in the Mortgage Loan Schedule as to the information in clauses (i), (ii),
(v) and (vi) of the definition of "Mortgage Loan Schedule" respecting such
Mortgage Loan accurately reflects the information set forth in Indenture
Trustee's Mortgage File. The Collateral Agent has made no independent
examination of such documents beyond the review specifically required in the
above-referenced Sale and Servicing Agreement. The Collateral Agent makes no
representations as to: (x) the validity, legality, enforceability or genuineness
of any such documents contained in each or any of the Mortgage Loans identified
on the Mortgage Loan Schedule, or (y) the collectability, insurability,
effectiveness or suitability of any such Mortgage Loan.

                  Capitalized words and phrases used herein shall have the
respective meanings assigned to them in the above-captioned Sale and Servicing
Agreement.

                                                JPMORGAN CHASE BANK,
                                                      as Collateral Agent

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

                                      D-1
<PAGE>

                                                                       EXHIBIT E

                     FINAL CERTIFICATION OF COLLATERAL AGENT

                             ________________, 2002

<TABLE>
<CAPTION>
<S>                                                               <C>
Bear Stearns Asset Backed Securities, Inc.                   American Business Credit, Inc.
245 Park Avenue                                              BalaPointe Office Centre
New York, New York 10167                                     111 Presidential Boulevard, Suite 127
                                                             Bala Cynwyd, Pennsylvania 19004

JPMorgan Chase Bank,                                         MBIA Insurance Corporation
  as Indenture Trustee                                       113 King Street
  and Collateral Agent                                       Armonk, New York  10504
450 West 33rd Street
New York, New York 10001
</TABLE>

     Re:  Sale and Servicing Agreement, dated as of December 1, 2001 among Bear
          Stearns Asset Backed Securities, Inc., as Depositor, ABFS Mortgage
          Loan Trust 2001-4, American Business Credit, Inc., as Servicer and
          JPMorgan Chase Bank, as Indenture Trustee and as Collateral Agent
          --------------------------------------------------------------------

Ladies and Gentlemen:

                  In accordance with the provisions of Section 2.06 of the
above-referenced Sale and Servicing Agreement, the undersigned, as Collateral
Agent, hereby certifies that as to each Mortgage Loan listed in the Mortgage
Loan Schedule (other than any Mortgage Loan paid in full or any Mortgage Loan
listed on the attachment hereto), it has reviewed the documents delivered to it
pursuant to Section 2.05 of the Sale and Servicing Agreement and has determined
that (i) all documents required to be delivered to it pursuant to Section 2.05
of the above-referenced Sale and Servicing Agreement are in its possession, (ii)
such documents have been reviewed by it and appear regular on their face and
have not been mutilated, damaged, torn or otherwise physically altered
(handwritten additions, changes or corrections do not constitute physical
alteration if they reasonably appear to have been 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 in the Mortgage Loan Schedule respecting such Mortgage Loan accurately
reflects the information set forth in the Indenture Trustee's Mortgage File. The
Collateral Agent has made no independent examination of such documents beyond
the review specifically required in the above-referenced Sale and Servicing
Agreement. The Collateral Agent makes no representations as to: (x) the
validity, legality, enforceability or genuineness of any such documents
contained in each or any of the Mortgage Loans identified on the Mortgage Loan
Schedule, or (y) the collectability, insurability, effectiveness or suitability
of any such Mortgage Loan.

                  Capitalized words and phrases used herein shall have the
respective meanings assigned to them in the above-captioned Sale and Servicing
Agreement.

                                             JPMORGAN CHASE BANK,
                                                   as Collateral Agent

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

                                      E-1
<PAGE>
                                                                       EXHIBIT F

                        REQUEST FOR RELEASE OF DOCUMENTS

                             ________________, 2002

JPMorgan Chase Bank,
     as Indenture Trustee
     and Collateral Agent
450 West 33rd Street
New York, NY 10001

     Re:  Sale and Servicing Agreement, dated as of December 1, 2001 among Bear
          Stearns Asset Backed Securities, Inc., as Depositor, ABFS Mortgage
          Loan Trust 2001-4, American Business Credit, Inc., as Servicer and
          JPMorgan Chase Bank, as Indenture Trustee and as Collateral Agent

                  In connection with the administration of the pool of Mortgage
Loans held by JPMorgan Chase Bank, as Collateral Agent, on behalf of JPMorgan
Chase Bank, as Indenture Trustee, for the benefit of the Noteholders and the
Note Insurer, we request the release, and acknowledge receipt, of the (Indenture
Trustee's Mortgage File/[specify document]) for the Mortgage Loan described
below, for the reason indicated.

Mortgagor's Name, Address & Zip Code:
------------------------------------

Mortgage Loan Number:
--------------------

Reason for Requesting Documents (check one)
-------------------------------

____   1.         Mortgage Loan Paid in Full
                           (Servicer hereby certifies that all amounts received
                           in connection therewith have been credited to the
                           Collection Account.)

____  2. Mortgage Loan Liquidated
                           (Servicer hereby certifies that all proceeds of
                           foreclosure, insurance or other liquidation have been
                           finally received and credited to the Collection
                           Account.)

____  3. Mortgage Loan in Foreclosure

____  4.           Mortgage Loan Repurchased Pursuant to Section 5.15 of the
                   Sale and Servicing Agreement.

                                       F-1
<PAGE>

____  5.           Mortgage Loan Repurchased or Substituted pursuant to Article
                   II or III of the Sale and Servicing Agreement (Servicer
                   hereby certifies that the repurchase price or Substitution
                   Adjustment has been credited to the related Distribution
                   Account and that the substituted mortgage loan is a
                   Qualified Substitute Mortgage Loan.)

____  6.          Other (explain)_______________________________________________

                  If box 1 or 2 above is checked, and if all or part of the
Indenture Trustee's Mortgage File was previously released to us, please release
to us our previous receipt on file with you, as well as any additional documents
in your possession relating to the above specified Mortgage Loan.

                  If box 3, 4, 5 or 6 above is checked, upon our return of all
of the above documents to the Collateral Agent, please acknowledge your receipt
by signing in the space indicated below, and returning this form.

                                              AMERICAN BUSINESS CREDIT, INC.,
                                                    as Servicer

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

Documents returned to Collateral Agent:

JPMORGAN CHASE BANK,
      as Collateral Agent

By:
   -----------------------------------------
      Name:
      Title:
      Date:
                                      F-2

<PAGE>

                                                                       EXHIBIT G

                                   [RESERVED]

                                       G-1

<PAGE>

                                                                      SCHEDULE I

                             MORTGAGE LOAN SCHEDULE

               [See Schedule I to Unaffiliated Seller's Agreement]

<PAGE>

                                                                      APPENDIX I

                                  DEFINED TERMS

                        [See Appendix I to the Indenture]<PAGE>

                                                                    EXHIBIT 10.1
                                                                    ------------

                           MBIA INSURANCE CORPORATION

                       FINANCIAL GUARANTY INSURANCE POLICY

                                December 20, 2001

                                                      Insurance Policy No. 37100

Obligations:               ABFS Mortgage Loan Trust 2001-4 Mortgage-Backed
                           Notes, Series 2001-4, Class A with an initial Class A
                           Note Principal Balance of $322,320,000 (the "Class A
                           Notes").

Beneficiary:               JPMorgan Chase Bank, as indenture trustee (the
                           "Indenture Trustee") under the Indenture, dated as of
                           December 1, 2001 (as amended or otherwise modified
                           with the consent of MBIA, the "Indenture") between
                           ABFS Mortgage Loan Trust 2001-4, as the Trust, and
                           the Indenture Trustee.

                  MBIA INSURANCE CORPORATION ("MBIA"), for consideration
received, hereby unconditionally and irrevocably guarantees to the Indenture
Trustee for the benefit of the Class A Noteholders, subject to the terms of this
Financial Guaranty Insurance Policy (this "Insurance Policy"), that an amount
equal to each Insured Distribution will be received by the Indenture Trustee
after claim by the Indenture Trustee, for distribution in accordance with the
terms of the Indenture; provided, however, that in no event shall any payment
under this Insurance Policy be made in respect of or due to the failure by the
Indenture Trustee to deliver to the Class A Noteholders any amount due to the
Class A Noteholders under the terms of the Class A Notes or the Indenture from
the funds then available for such payment on deposit in any Account or otherwise
available to the Indenture Trustee for payment to the Noteholders under the
Indenture, or the failure of the Indenture Trustee to deliver to any Class A
Noteholder any amount paid by MBIA hereunder. MBIA's obligations hereunder with
respect to a particular Insured Distribution shall be discharged to the extent
funds equal to the applicable Insured Distribution are received by the Indenture
Trustee, whether or not such funds are properly applied by the Indenture
Trustee. Insured Distributions shall be made only at the time set forth in this
Insurance Policy, and no accelerated Insured Distributions shall be made
regardless of any acceleration of the Obligations or any amounts due in respect
thereof, unless such acceleration is at the sole option of MBIA.

                  Notwithstanding the foregoing paragraph, this Insurance Policy
does not cover shortfalls, if any, attributable to the liability of the Trust or
the Indenture Trustee for withholding taxes, if any (including interest and
penalties in respect of any such liability). In addition, this Insurance Policy
does not cover any Net Mortgage Loan Interest Shortfalls, nor does this
Insurance Policy guarantee to the Noteholders any particular rate of principal
distribution.

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<PAGE>

                  Capitalized terms used herein and not otherwise defined herein
shall have the meanings assigned to them in the Indenture.

                  The following terms shall have the following meanings:

                  "Deficiency Amount" means for any Distribution Date, the
excess, if any, of (i) the Required Distributions due on such date over (ii) the
Available Amount as of such date.

                  "Insurance Agreement" means the Insurance and Reimbursement
Agreement, dated as of December 20, 2001 among MBIA, the Unaffiliated Seller,
the Trust, the Depositor, the Servicer, the Originators and the Indenture
Trustee, as amended, restated or otherwise modified from time to time.

                  "Insured Distribution" means (i) with respect to any
Distribution Date, the Deficiency Amount, if any, with respect to such
Distribution Date and (ii) any Preference Amounts.

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

                  "Required Distributions" means, with respect to (1) any
Distribution Date occurring prior to the Distribution Date on May 15, 2032, the
sum of (x) the Interest Distribution Amount net of any Net Mortgage Loan
Interest Shortfalls and (y) the Over-collateralization Deficit and (2) the final
scheduled Distribution Date on May 15, 2032, the sum of (x) the amount set forth
in clause (1)(x) above and (y) the aggregate outstanding principal balance, if
any, of the Notes, after giving effect to all other distributions of principal
on such Notes on that Distribution Date.

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

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<PAGE>

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

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

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

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

                  This Insurance Policy is neither transferable nor assignable,
in whole or in part, except to a successor Indenture Trustee duly appointed and
qualified under the Indenture. Such transfer and assignment shall be effective
upon receipt by MBIA of a copy of the instrument effecting such transfer and
assignment signed by the transferor and by the transferee, and a certificate,
properly completed and signed by the transferor and the transferee (which shall
be conclusive evidence of such transfer and assignment), and, in such case, the
transferee instead of the transferor shall, without the necessity of further
action, be entitled to all the benefits of and rights under this Insurance
Policy in the transferor's place, provided that, in such case, the Notice for
Payment presented hereunder shall be a certificate of the transferee and shall
be signed by one who states therein that he or she is a duly authorized officer
of the transferee.

                                        3
<PAGE>

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

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

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

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

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

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

                  This Insurance Policy and the obligations of MBIA hereunder
shall expire and terminate, without any action on the part of MBIA or any other
person, on the day (the "Termination Date") which is one year and one day
following the date on which the outstanding principal balance of the Class A
Notes has been reduced to zero. The Indenture Trustee shall, promptly following
the Termination Date, deliver this Insurance Policy to MBIA at its office set
forth above for cancellation.

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

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

                                        4
<PAGE>

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

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

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

                                        5
<PAGE>

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

                                                      MBIA INSURANCE CORPORATION

                                                      By:_______________________
                                                         President

                                    Attest:              _______________________
                                                         Assistant Secretary

                                       A-1

<PAGE>

                                      Exhibit A to Insurance Policy Number 37100

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

                               NOTICE FOR PAYMENT
                       UNDER INSURANCE POLICY NUMBER 37100

                  JPMorgan Chase Bank, not in its individual capacity, but
solely as Indenture Trustee (the "Indenture Trustee"), hereby certifies to MBIA
Insurance Corporation ("MBIA") with reference to that certain Insurance Policy
Number 37100 dated December 20, 2001 (the "Insurance Policy"), issued by MBIA in
favor of the Indenture Trustee under that certain Indenture dated as of December
1, 2001 (the "Indenture"), between ABFS Mortgage Loan Trust 2001-4, as the
Trust, and the Indenture Trustee as follows:

                  1. The Indenture Trustee is the Indenture Trustee under the
Indenture and the Beneficiary under the Insurance Policy.

                  2. The Indenture Trustee is entitled to make a demand under
the Insurance Policy pursuant to Section 8.03 of the Indenture.

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

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

                  4. The Indenture Trustee demands payment of $____________,
which is an amount equal to the amount, if any, by which the Required
Distribution on such date exceeds the Available Amounts which are available to
pay such Required Distribution pursuant to the Indenture.

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

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<PAGE>

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

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

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

[For a Notice for Payment relating to both a Preference Amount and a
Distribution Date, use all of the foregoing paragraphs.]

                  Capitalized terms used herein and not otherwise defined herein
shall have the meanings assigned to them in the Indenture.

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

                                           _______________, as Indenture Trustee

                                           By:__________________________________
                                                     Authorized Officer

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