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Pooling And Servicing Agreement - AMERICAN BUSINESS FINANCIAL SERVICES INC /DE/ - 9-29-2003

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Pooling And Servicing Agreement - AMERICAN BUSINESS FINANCIAL SERVICES INC /DE/ - 9-29-2003 Powered By Docstoc
					POOLING AND SERVICING AGREEMENT dated as of March 1, 2003 by and among BEAR STEARNS ASSET BACKED SECURITIES, INC. (Depositor) AMERICAN BUSINESS CREDIT, INC. (Servicer) and JPMORGAN CHASE BANK (Trustee, Collateral Agent and Back-up Servicer) ABFS MORTGAGE LOAN TRUST 2003-1 Mortgage Pass-Through Certificates, Series 2003-1, Class A, Class A-IO, Class M, Class X, Class I and Class R

TABLE OF CONTENTS

ARTICLE I DEFINITIONS Certain Defined Terms.............................................................. Provisions of General Application.................................................. Business Day Certificate........................................................... ARTICLE II ESTABLISHMENT OF THE TRUST SALE AND CONVEYANCE OF THE TRUST FUND Section Section Section Section Section Section Section Section Section Section Section 2.01 2.02 2.03 2.04 2.05 2.06 2.07 2.08 2.09 2.10 2.11 Establishment of the Trust......................................................... Purchase and Sale of Initial Mortgage Loans........................................ Purchase and Sale of Subsequent Mortgage Loans..................................... Possession of Mortgage Files; Access to Mortgage Files............................. Delivery of Mortgage Loan Documents................................................ Acceptance by Trustee of the Trust Fund; Certain Substitutions; Certification by Collateral Agent................................................................... Designations under REMIC Provisions; Designation of Startup Day.................... Execution of Certificates.......................................................... Application of Principal and Interest.............................................. Grant of Security Interest......................................................... Further Action Evidencing Assignments.............................................. ARTICLE III REPRESENTATIONS, WARRANTIES AND COVENANTS Section Section Section Section 3.01 3.02 3.03 3.04 Representations of the Servicer and the Unaffiliated Seller........................ Representations, Warranties and Covenants of the Depositor......................... Purchase and Substitution.......................................................... Representations, Warranties and Covenants of the Trustee, the Collateral Agent and the Back-up Servicer............................................................... Negative Covenants of the Trustee and the Servicer................................. ARTICLE IV THE CERTIFICATES

Section 1.01 Section 1.02 Section 1.03

Section 3.05

TABLE OF CONTENTS

ARTICLE I DEFINITIONS Certain Defined Terms.............................................................. Provisions of General Application.................................................. Business Day Certificate........................................................... ARTICLE II ESTABLISHMENT OF THE TRUST SALE AND CONVEYANCE OF THE TRUST FUND Section Section Section Section Section Section Section Section Section Section Section 2.01 2.02 2.03 2.04 2.05 2.06 2.07 2.08 2.09 2.10 2.11 Establishment of the Trust......................................................... Purchase and Sale of Initial Mortgage Loans........................................ Purchase and Sale of Subsequent Mortgage Loans..................................... Possession of Mortgage Files; Access to Mortgage Files............................. Delivery of Mortgage Loan Documents................................................ Acceptance by Trustee of the Trust Fund; Certain Substitutions; Certification by Collateral Agent................................................................... Designations under REMIC Provisions; Designation of Startup Day.................... Execution of Certificates.......................................................... Application of Principal and Interest.............................................. Grant of Security Interest......................................................... Further Action Evidencing Assignments.............................................. ARTICLE III REPRESENTATIONS, WARRANTIES AND COVENANTS Section Section Section Section 3.01 3.02 3.03 3.04 Representations of the Servicer and the Unaffiliated Seller........................ Representations, Warranties and Covenants of the Depositor......................... Purchase and Substitution.......................................................... Representations, Warranties and Covenants of the Trustee, the Collateral Agent and the Back-up Servicer............................................................... Negative Covenants of the Trustee and the Servicer................................. ARTICLE IV THE CERTIFICATES Section Section Section Section 4.01 4.02 4.03 4.04 The Certificates................................................................... Registration of Transfer and Exchange of Certificates.............................. Mutilated, Destroyed, Lost or Stolen Certificates.................................. Persons Deemed Owners..............................................................

Section 1.01 Section 1.02 Section 1.03

Section 3.05

ARTICLE V ADMINISTRATION AND SERVICING OF THE MORTGAGE LOANS REMIC Matters; The Servicer........................................................ Collection of Certain Mortgage Loan Payments; Collection Account................... Permitted Withdrawals from the Collection Account.................................. Hazard Insurance Policies; Property Protection Expenses............................ Assumption and Modification Agreements............................................. Realization Upon Defaulted Mortgage Loans.......................................... Trustee to Cooperate............................................................... Servicing Compensation; Payment of Certain Expenses by Servicer.................... Annual Statement as to Compliance.................................................. Annual Independent Public Accountants' Servicing Report............................ Access to Certain Documentation.................................................... Maintenance of Fidelity Bond....................................................... The Subservicers................................................................... Reports to the Trustee; Collection Account Statements.............................. Optional Purchase of Defaulted Mortgage Loans...................................... Reports to be Provided by the Servicer............................................. Adjustment of Servicing Compensation in Respect of Prepaid Mortgage Loans.......... Periodic Advances; Special Advance................................................. Indemnification; Third Party Claims................................................ Maintenance of Corporate Existence and Licenses; Merger or Consolidation of the Servicer........................................................................... Assignment of Agreement by Servicer; Servicer Not to Resign........................

Section Section Section Section Section Section Section Section Section Section Section Section Section Section Section Section Section Section Section Section

5.01 5.02 5.03 5.04 5.05 5.06 5.07 5.08 5.09 5.10 5.11 5.12 5.13 5.14 5.15 5.16 5.17 5.18 5.19 5.20

Section 5.21

ARTICLE V ADMINISTRATION AND SERVICING OF THE MORTGAGE LOANS REMIC Matters; The Servicer........................................................ Collection of Certain Mortgage Loan Payments; Collection Account................... Permitted Withdrawals from the Collection Account.................................. Hazard Insurance Policies; Property Protection Expenses............................ Assumption and Modification Agreements............................................. Realization Upon Defaulted Mortgage Loans.......................................... Trustee to Cooperate............................................................... Servicing Compensation; Payment of Certain Expenses by Servicer.................... Annual Statement as to Compliance.................................................. Annual Independent Public Accountants' Servicing Report............................ Access to Certain Documentation.................................................... Maintenance of Fidelity Bond....................................................... The Subservicers................................................................... Reports to the Trustee; Collection Account Statements.............................. Optional Purchase of Defaulted Mortgage Loans...................................... Reports to be Provided by the Servicer............................................. Adjustment of Servicing Compensation in Respect of Prepaid Mortgage Loans.......... Periodic Advances; Special Advance................................................. Indemnification; Third Party Claims................................................ Maintenance of Corporate Existence and Licenses; Merger or Consolidation of the Servicer........................................................................... Assignment of Agreement by Servicer; Servicer Not to Resign........................ Periodic Filings with the Securities and Exchange Commission; Additional Information........................................................................ ARTICLE VI DISTRIBUTIONS AND PAYMENTS Section 6.01 Section Section Section Section Section Section Section Section Section 6.02 6.03 6.04 6.05 6.06 6.07 6.08 6.09 6.10 Establishment of Accounts; Withdrawals from Accounts; Deposits to the Distribution Account............................................................................ Permitted Withdrawals From the Distribution Account................................ Collection of Money................................................................ The Certificate Insurance Policy................................................... Distributions...................................................................... Investment of Accounts............................................................. Reports............................................................................ Additional Reports by Trustee...................................................... Compensating Interest.............................................................. Supplemental Interest Trust; Net WAC Cap Carryover Fund; Interest Rate Hedge Payment Fund....................................................................... Effect of Payments by the Certificate Insurer; Subrogation......................... Additional Rights of Certificate Insurer........................................... Special Reserve Account............................................................

Section Section Section Section Section Section Section Section Section Section Section Section Section Section Section Section Section Section Section Section

5.01 5.02 5.03 5.04 5.05 5.06 5.07 5.08 5.09 5.10 5.11 5.12 5.13 5.14 5.15 5.16 5.17 5.18 5.19 5.20

Section 5.21 Section 5.22

Section 6.11 Section 6.12 Section 6.13

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ARTICLE VII DEFAULT Events of Default.................................................................. Back-up Servicer to Act; Appointment of Successor.................................. Waiver of Defaults................................................................. Rights of the Certificate Insurer to Exercise Rights of Certificateholders......... Trustee To Act Solely with Consent of the Certificate Insurer...................... Mortgage Loans, Trust Fund and Accounts Held for Benefit of the Certificate Insurer Certificate Insurer Default........................................................ ARTICLE VIII TERMINATION Section 8.01 Section 8.02 Section 8.03 Termination........................................................................ Additional Termination Requirements................................................ Accounting Upon Termination of Servicer............................................ ARTICLE IX THE TRUSTEE Section Section Section Section 9.01 9.02 9.03 9.04 Duties of Trustee.................................................................. Certain Matters Affecting the Trustee.............................................. Trustee Not Liable for Certificates or Mortgage Loans.............................. Trustee May Own Certificates.......................................................

Section Section Section Section Section Section Section

7.01 7.02 7.03 7.04 7.05 7.06 7.07

ARTICLE VII DEFAULT Events of Default.................................................................. Back-up Servicer to Act; Appointment of Successor.................................. Waiver of Defaults................................................................. Rights of the Certificate Insurer to Exercise Rights of Certificateholders......... Trustee To Act Solely with Consent of the Certificate Insurer...................... Mortgage Loans, Trust Fund and Accounts Held for Benefit of the Certificate Insurer Certificate Insurer Default........................................................ ARTICLE VIII TERMINATION Section 8.01 Section 8.02 Section 8.03 Termination........................................................................ Additional Termination Requirements................................................ Accounting Upon Termination of Servicer............................................ ARTICLE IX THE TRUSTEE Section Section Section Section Section Section Section Section Section Section Section Section Section Section 9.01 9.02 9.03 9.04 9.05 9.06 9.07 9.08 9.09 9.10 9.11 9.12 9.13 9.14 Duties of Trustee.................................................................. Certain Matters Affecting the Trustee.............................................. Trustee Not Liable for Certificates or Mortgage Loans.............................. Trustee May Own Certificates....................................................... Trustee's Fees and Expenses; Indemnity............................................. Eligibility Requirements for Trustee............................................... Resignation and Removal of the Trustee............................................. Successor Trustee.................................................................. Merger or Consolidation of Trustee................................................. Appointment of Co-Trustee or Separate Trustee...................................... Tax Returns........................................................................ Retirement of Certificates......................................................... Trustee May Enforce Claims Without Possession of Certificates...................... Suits for Enforcement..............................................................

Section Section Section Section Section Section Section

7.01 7.02 7.03 7.04 7.05 7.06 7.07

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ARTICLE X THE COLLATERAL AGENT Duties of the Collateral Agent..................................................... Certain Matters Affecting the Collateral Agent..................................... Collateral Agent Not Liable for Certificates or Mortgage Loans..................... Collateral Agent May Own Certificates.............................................. Collateral Agent's Fees and Expenses; Indemnity.................................... Eligibility Requirements for Collateral Agent...................................... Resignation and Removal of the Collateral Agent.................................... Successor Collateral Agent......................................................... Merger or Consolidation of Collateral Agent........................................ ARTICLE XI MISCELLANEOUS PROVISIONS Section Section Section Section Section Section Section Section Section Section Section Section Section Section 11.01 11.02 11.03 11.04 11.05 11.06 11.07 11.08 11.09 11.10 11.11 11.12 11.13 11.14 Limitation on Liability of the Depositor, the Back-up Servicer and the Servicer.... Acts of Certificateholders......................................................... Amendment.......................................................................... Recordation of Agreement........................................................... Duration of Agreement.............................................................. Notices............................................................................ Severability of Provisions......................................................... No Partnership..................................................................... Counterparts....................................................................... Successors and Assigns............................................................. Headings........................................................................... Third Party Beneficiary............................................................ Appointment of Tax Matters Person; Certain Taxes................................... GOVERNING LAW; CONSENT TO JURISDICTION; WAIVER OF JURY TRIAL....................... EXHIBITS EXHIBIT A EXHIBIT B EXHIBIT C Class A Certificate Class A-IO Certificate Class M Certificate

Section Section Section Section Section Section Section Section Section

10.01 10.02 10.03 10.04 10.05 10.06 10.07 10.08 10.09

ARTICLE X THE COLLATERAL AGENT Duties of the Collateral Agent..................................................... Certain Matters Affecting the Collateral Agent..................................... Collateral Agent Not Liable for Certificates or Mortgage Loans..................... Collateral Agent May Own Certificates.............................................. Collateral Agent's Fees and Expenses; Indemnity.................................... Eligibility Requirements for Collateral Agent...................................... Resignation and Removal of the Collateral Agent.................................... Successor Collateral Agent......................................................... Merger or Consolidation of Collateral Agent........................................ ARTICLE XI MISCELLANEOUS PROVISIONS Section Section Section Section Section Section Section Section Section Section Section Section Section Section 11.01 11.02 11.03 11.04 11.05 11.06 11.07 11.08 11.09 11.10 11.11 11.12 11.13 11.14 Limitation on Liability of the Depositor, the Back-up Servicer and the Servicer.... Acts of Certificateholders......................................................... Amendment.......................................................................... Recordation of Agreement........................................................... Duration of Agreement.............................................................. Notices............................................................................ Severability of Provisions......................................................... No Partnership..................................................................... Counterparts....................................................................... Successors and Assigns............................................................. Headings........................................................................... Third Party Beneficiary............................................................ Appointment of Tax Matters Person; Certain Taxes................................... GOVERNING LAW; CONSENT TO JURISDICTION; WAIVER OF JURY TRIAL....................... EXHIBITS EXHIBIT EXHIBIT EXHIBIT EXHIBIT EXHIBIT EXHIBIT EXHIBIT EXHIBIT EXHIBIT EXHIBIT EXHIBIT EXHIBIT EXHIBIT EXHIBIT EXHIBIT EXHIBIT EXHIBIT EXHIBIT EXHIBIT EXHIBIT A B C D E F G H I J K L M N O P Q R S T Class A Certificate Class A-IO Certificate Class M Certificate Class R Certificate Class X Certificate Class I Certificate Contents of the Mortgage File Certificate Re: Prepaid Loans Initial Certification of Collateral Agent Final Certification of Collateral Agent Request for Release of Documents Transfer Affidavit and Agreement Transferor's Certificate ERISA Investment Representation Letter Resale Certification Assignment Wiring Instruction Form Trustee's Acknowledgement of Receipt Collateral Agent's Acknowledgment of Receipt Form of Subsequent Transfer Agreement SCHEDULES SCHEDULE I Mortgage Loan Schedule

Section Section Section Section Section Section Section Section Section

10.01 10.02 10.03 10.04 10.05 10.06 10.07 10.08 10.09

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POOLING AND SERVICING AGREEMENT, relating to ABFS MORTGAGE LOAN TRUST 2003-1, dated as of March 1, 2003 (this "Agreement"), by and among BEAR STEARNS ASSET BACKED SECURITIES, INC., a Delaware corporation, in its capacity as depositor (the "Depositor"), AMERICAN BUSINESS CREDIT, INC., a Pennsylvania corporation, in its capacity as servicer (the "Servicer"), and JPMORGAN CHASE BANK, a New York banking corporation, in its capacity as trustee, collateral agent and back-up servicer (the "Trustee", the "Collateral Agent" and the "Back-up Servicer", respectively). WHEREAS, the Depositor wishes to establish a trust which provides for the allocation and sale of the beneficial interests therein and the maintenance and distribution of the trust estate;

POOLING AND SERVICING AGREEMENT, relating to ABFS MORTGAGE LOAN TRUST 2003-1, dated as of March 1, 2003 (this "Agreement"), by and among BEAR STEARNS ASSET BACKED SECURITIES, INC., a Delaware corporation, in its capacity as depositor (the "Depositor"), AMERICAN BUSINESS CREDIT, INC., a Pennsylvania corporation, in its capacity as servicer (the "Servicer"), and JPMORGAN CHASE BANK, a New York banking corporation, in its capacity as trustee, collateral agent and back-up servicer (the "Trustee", the "Collateral Agent" and the "Back-up Servicer", respectively). WHEREAS, the Depositor wishes to establish a trust which provides for the allocation and sale of the beneficial interests therein and the maintenance and distribution of the trust estate; WHEREAS, the Servicer has agreed to service the Mortgage Loans, which constitute the principal assets of the trust estate; WHEREAS, JPMorgan Chase Bank is willing to serve in the capacities of Trustee, Collateral Agent and Backup Servicer hereunder; and WHEREAS, Radian Asset Assurance Inc. (the "Certificate Insurer") is intended to be a third-party beneficiary of this Agreement and is hereby recognized by the parties hereto to be a third-party beneficiary of this Agreement. NOW, THEREFORE, in consideration of the premises and the mutual agreements herein contained, the Depositor, the Servicer, the Trustee, the Collateral Agent and the Back-up Servicer hereby agree as follows: ARTICLE I DEFINITIONS Section 1.01 Certain Defined Terms. Whenever used herein, the following words and phrases, unless the context otherwise requires, shall have the following meanings: ABFS: American Business Financial Services, Inc. ACCEPTED SERVICING PRACTICES: The Servicer's normal servicing practices including practices regarding reconciliation of bank accounts, processing of mortgage payments, processing of disbursements for tax and insurance payments, maintenance of mortgage loan records, performance of collection efforts including disposition of delinquent loans, foreclosure activities and disposition of real estate owned and performance of investor accounting and reporting processes. Such practices will conform to the mortgage servicing practices of prudent mortgage lending institutions which service, for their own account, mortgage loans of the same type as the Mortgage Loans in the jurisdiction in which the related Mortgaged Properties are located, which may change from time to time; provided, that such practices shall at all times conform to the Credit and Servicing Policy Manuals.

ACCOUNT: Any of the Collection Account, the Distribution Account, the Interest Reserve Account, the Capitalized Interest Account, if any, the Pre-Funding Account, if any, the Certificate Insurance Payment Account, the Net WAC Cap Carryover Fund, the Interest Rate Hedge Payment Fund or the Special Reserve Account. ACCRUAL PERIOD: With respect to (x) the Class A and Class A-IO Certificates and any Distribution Date, the prior calendar month, and (y) the Class M Certificates, the period from and including the prior Distribution Date (or the Closing Date in the case of the first Distribution Date) to but excluding the applicable Distribution Date. ADDITION NOTICE: A written notice from the Unaffiliated Seller to the Trustee, the Rating Agencies and the Certificate Insurer that the Unaffiliated Seller desires to make a Subsequent Transfer. ADJUSTED PASS-THROUGH RATE: With respect to any Distribution Date, the weighted average (weighted by Certificate Principal Balance or Class A-IO Notional Balance, as applicable) of (a) the Class A Pass-through

ACCOUNT: Any of the Collection Account, the Distribution Account, the Interest Reserve Account, the Capitalized Interest Account, if any, the Pre-Funding Account, if any, the Certificate Insurance Payment Account, the Net WAC Cap Carryover Fund, the Interest Rate Hedge Payment Fund or the Special Reserve Account. ACCRUAL PERIOD: With respect to (x) the Class A and Class A-IO Certificates and any Distribution Date, the prior calendar month, and (y) the Class M Certificates, the period from and including the prior Distribution Date (or the Closing Date in the case of the first Distribution Date) to but excluding the applicable Distribution Date. ADDITION NOTICE: A written notice from the Unaffiliated Seller to the Trustee, the Rating Agencies and the Certificate Insurer that the Unaffiliated Seller desires to make a Subsequent Transfer. ADJUSTED PASS-THROUGH RATE: With respect to any Distribution Date, the weighted average (weighted by Certificate Principal Balance or Class A-IO Notional Balance, as applicable) of (a) the Class A Pass-through Rate, (b) the Class A-IO Pass-through Rate and (c) the percentage equal to the sum of (i) the Class M Passthrough Rate, plus (ii) the Premium Percentage. AFFILIATE: With respect to any Person, any other Person directly or indirectly controlling, controlled by, or under direct or indirect common control with such specified Person. For the purposes of this definition, "control" when used with respect to any specified Person means the power to direct the management and policies of such Person, directly or indirectly, whether through the ownership of voting securities, by contract or otherwise; and the terms "controlling" and "controlled" have meanings correlative to the foregoing. AGGREGATE PRINCIPAL BALANCE: With respect to the Mortgage Loans and any date of determination, the aggregate Principal Balance of the Mortgage Loans as of such date of determination. AGREEMENT: This Pooling and Servicing Agreement, including the Exhibits hereto, and all amendments hereof and supplements hereto. APPLIED REALIZED LOSS AMOUNT: With respect to any Distribution Date, the amount, if any, by which the aggregate Certificate Principal Balance of the Offered Certificates after distributions of principal on such Distribution Date exceeds the Current Pool Principal Balance for that Distribution Date. APPRAISED VALUE: As to any Mortgaged Property and time referred to herein, the appraised value of the Mortgaged Property based upon the appraisal made by or on behalf of the related Originator at the time referred to herein or, in the case of a Mortgage Loan that is a purchase money mortgage loan, the sales price of the Mortgaged Property, if such sales price is less than such appraised value. ASSIGNMENT OF MORTGAGE: With respect to each Mortgage Loan, an assignment of the Mortgage, notice of transfer or equivalent instrument sufficient under the laws of the jurisdiction wherein the related Mortgaged Property is located to reflect of record the sale of the Mortgage to the Trustee for the benefit of the Certificateholders and the Certificate Insurer. 2

AUTHORIZED DENOMINATIONS: Each of the Offered Certificates is issuable only in the minimum Percentage Interest corresponding to a minimum denomination of $1,000 or integral multiples of $1,000 in excess thereof, in each case of Certificate Principal Balance; provided, however, that one Certificate of each Class is issuable in a denomination equal to any such multiple plus an additional amount such that the aggregate denomination of each Class of Offered Certificates shall be equal to the applicable Original Certificate Principal Balance or the Class A-IO Notional Balance, as applicable. AVAILABLE AMOUNT: For any Distribution Date, the amount on deposit in the Distribution Account, exclusive of the amount of any Class M Insured Payment, on that Distribution Date. BACK-UP SERVICER: JPMorgan Chase Bank, a New York banking corporation, its successors and assigns.

AUTHORIZED DENOMINATIONS: Each of the Offered Certificates is issuable only in the minimum Percentage Interest corresponding to a minimum denomination of $1,000 or integral multiples of $1,000 in excess thereof, in each case of Certificate Principal Balance; provided, however, that one Certificate of each Class is issuable in a denomination equal to any such multiple plus an additional amount such that the aggregate denomination of each Class of Offered Certificates shall be equal to the applicable Original Certificate Principal Balance or the Class A-IO Notional Balance, as applicable. AVAILABLE AMOUNT: For any Distribution Date, the amount on deposit in the Distribution Account, exclusive of the amount of any Class M Insured Payment, on that Distribution Date. BACK-UP SERVICER: JPMorgan Chase Bank, a New York banking corporation, its successors and assigns. BACK-UP SERVICING FEE: As to any Distribution Date, the fee payable to the Back-up Servicer in respect of its services as Back-up Servicer that accrues at a monthly rate equal to one-twelfth of 0.01125% on the Principal Balance of each Mortgage Loan as of the immediately preceding Due Date. BANKRUPTCY CODE: The Bankruptcy Reform Act of 1978 (Title 11 of the United States Code), as amended. BASIC DOCUMENTS: This Agreement, the Unaffiliated Seller's Agreement, the Insurance and Indemnity Agreement and the Underwriting Agreement. BUSINESS DAY: Any day other than (a) a Saturday or Sunday, or (b) a day on which banking institutions in the States of Pennsylvania, New York, Delaware or New Jersey are authorized or obligated by law or executive order to be closed. BUSINESS PURPOSE PROPERTY: Any mixed-use property, commercial property, or four or more unit multifamily property. CAPITALIZED INTEREST ACCOUNT: The Capitalized Interest Account, if any, established in accordance with Section 6.01(a) hereof and maintained by the Trustee. CAPITALIZED INTEREST REQUIREMENT: With respect to the Pre-Funding Distribution Dates, if any, an amount equal to (A) the product of (i) one twelfth of the Adjusted Pass-Through Rate as calculated as of such Distribution Date and (ii) the PreFunding Amount as of the first day of the related Due Period, minus (B) 30 days' interest, at the related Mortgage Interest Rate, on the Subsequent Mortgage Loans transferred to the Trust during the related Due Period which had a Due Date after the related Subsequent Cut-Off Date during the related Due Period, minus (C) the amount of any Pre-Funding Earnings earned from the last Distribution Date (or the Closing Date with respect to the first Distribution Date). In no event will the Capitalized Interest Requirement be less than zero. 3

CAPPED CERTIFICATES: The Class A and Class M Certificates. CERCLA: The Comprehensive Environmental Response, Compensation and Liability Act of 1980, as amended. CERTIFICATE: Any Class A, Class A-IO, Class M, Class X, Class I or Class R Certificate executed by the Trustee on behalf of the Trust Fund and authenticated by the Trustee. CERTIFICATEHOLDER or HOLDER: Each Person in whose name a Certificate is registered in the Certificate Register, except that, solely for the purposes of giving any consent, waiver, request or demand pursuant to this Agreement, any Certificate registered in the name of the Servicer or any Subservicer or the Unaffiliated Seller, or any Affiliate of any of them, shall be deemed not to be outstanding and the undivided Percentage Interest evidenced thereby shall not be taken into account in determining whether the requisite percentage of Certificates necessary to effect any such consent, waiver, request or demand has been obtained. For purposes of any consent, waiver, request or demand of Certificateholders pursuant to this Agreement, upon the Trustee's request,

CAPPED CERTIFICATES: The Class A and Class M Certificates. CERCLA: The Comprehensive Environmental Response, Compensation and Liability Act of 1980, as amended. CERTIFICATE: Any Class A, Class A-IO, Class M, Class X, Class I or Class R Certificate executed by the Trustee on behalf of the Trust Fund and authenticated by the Trustee. CERTIFICATEHOLDER or HOLDER: Each Person in whose name a Certificate is registered in the Certificate Register, except that, solely for the purposes of giving any consent, waiver, request or demand pursuant to this Agreement, any Certificate registered in the name of the Servicer or any Subservicer or the Unaffiliated Seller, or any Affiliate of any of them, shall be deemed not to be outstanding and the undivided Percentage Interest evidenced thereby shall not be taken into account in determining whether the requisite percentage of Certificates necessary to effect any such consent, waiver, request or demand has been obtained. For purposes of any consent, waiver, request or demand of Certificateholders pursuant to this Agreement, upon the Trustee's request, the Servicer and the Unaffiliated Seller shall provide to the Trustee a notice identifying any of their respective Affiliates or the Affiliates of any Subservicer that is a Certificateholder as of the date(s) specified by the Trustee in such request. Any Certificates on which payments are made under the Certificate Insurance Policy shall be deemed to be outstanding and held by the Certificate Insurer to the extent of such payment. CERTIFICATE INSURANCE PAYMENT ACCOUNT: The Certificate Insurance Payment Account established in accordance with Section 6.04(c) hereof and maintained by the Trustee. CERTIFICATE INSURANCE POLICY: The Financial Guaranty Insurance Policy No. FANI-0509-03090NY issued by the Certificate Insurer, and all endorsements thereto dated the Closing Date, issued by the Certificate Insurer for the benefit of the Class M Certificateholders. CERTIFICATE INSURER: Radian Asset Assurance Inc., a New York stock insurance company, its successors and assigns. CERTIFICATE INSURER DEFAULT: The existence and continuance of any of the following: (a) the Certificate Insurer shall have failed to make a required payment when due under the Certificate Insurance Policy; (b) the Certificate Insurer shall have (i) filed a petition or commenced any case or proceeding under any provision or chapter of the United States Bankruptcy Code, the New York State Insurance Law, the New York Department of Insurance or any other similar federal or state law relating to insolvency, bankruptcy, rehabilitation, liquidation, or reorganization, (ii) made a general assignment for the benefit of its creditors or (iii) had an order for relief entered against it under the United States Bankruptcy Code, the New York State Insurance Law or any other similar federal or state law relating to insolvency, bankruptcy, rehabilitation, liquidation, or reorganization that is final and nonappealable; or 4

(c) a court of competent jurisdiction, the New York Department of Insurance or any other competent regulatory authority shall have entered a final and nonappealable order, judgment or decree (i) appointing a custodian, trustee, agent, or receiver for the Certificate Insurer or for all of any material portion of its property or (ii) authorizing the taking of possession by a custodian, trustee, agent, or receiver of the Certificate Insurer or of all or any material portion of its property. CERTIFICATE PRINCIPAL BALANCE: With respect to any Class of Certificates, other than the Class A-IO, Class X, Class I or Class R Certificates, as of any date of determination, the maximum dollar amount of principal to which the Holders thereof are then entitled hereunder, such amount being equal to the Original Certificate Principal Balance of such Class minus (i) the amount of all distributions of principal previously made with respect thereto and (ii) in the case of any Subordinate Certificates, reduced by any Applied Realized Loss Amounts applicable to such Class of Subordinate Certificates. The Class A-IO, Class X, Class I and Class R Certificates do not have a "Certificate

(c) a court of competent jurisdiction, the New York Department of Insurance or any other competent regulatory authority shall have entered a final and nonappealable order, judgment or decree (i) appointing a custodian, trustee, agent, or receiver for the Certificate Insurer or for all of any material portion of its property or (ii) authorizing the taking of possession by a custodian, trustee, agent, or receiver of the Certificate Insurer or of all or any material portion of its property. CERTIFICATE PRINCIPAL BALANCE: With respect to any Class of Certificates, other than the Class A-IO, Class X, Class I or Class R Certificates, as of any date of determination, the maximum dollar amount of principal to which the Holders thereof are then entitled hereunder, such amount being equal to the Original Certificate Principal Balance of such Class minus (i) the amount of all distributions of principal previously made with respect thereto and (ii) in the case of any Subordinate Certificates, reduced by any Applied Realized Loss Amounts applicable to such Class of Subordinate Certificates. The Class A-IO, Class X, Class I and Class R Certificates do not have a "Certificate Principal Balance". CERTIFICATE REGISTER: As defined in Section 4.02(a). CERTIFICATE REGISTRAR: As defined in Section 4.02(a). CHANGE OF CONTROL: Any of the following: (a) ABFS shall cease to own, beneficially and of record, 100% of the issued and outstanding Stock of the Servicer; (b) the consummation of a merger or consolidation of ABFS with or into another entity or any other corporate reorganization, if more that 50% of the combined voting power of the continuing or surviving entity's Stock outstanding immediately after such merger, consolidation or such other reorganization is owned by persons who were not stockholders of ABFS immediately prior to such merger, consolidation or other reorganization; or (c) the sale, transfer, or other disposition of all or substantially all of ABFS's assets. For purposes of the foregoing, "Stock" means all shares, options, warrants, interests, participation or other equivalents (regardless of how designated) of or in a corporation or equivalent entity, whether voting or nonvoting, including common stock, preferred stock, convertible debentures and all agreements, instruments and documents convertible, in whole or in part, into any one or more or all of the foregoing. CIVIL RELIEF ACT: The Soldiers' and Sailors' Civil Relief Act of 1940, as amended or similar state statutes. CIVIL RELIEF ACT INTEREST SHORTFALL: With respect to any Distribution Date, for any Mortgage Loan as to which there has been a reduction in the amount of interest collectible thereon for the most recently ended Due Period as a result of the application of the Civil Relief Act, the amount, if any, by which (a) interest collectible on such Mortgage Loan during the most recently ended calendar month is less than (b) the sum of one month's interest on the Principal Balance of such Mortgage Loan, calculated at a rate equal to the Mortgage Interest Rate. 5

CLASS: Each class of Certificates designated as the Class A, Class A-IO, Class M, Class X, Class I or Class R Certificates and, for the purposes of Section 2.07, any class of interests referenced in Section 2.07. CLASS A CERTIFICATE: Any Certificate designated as a "Class A Certificate" on the face thereof, in the form of Exhibit A hereto. The Class A Certificates shall be issued with an initial aggregate Certificate Principal Balance equal to the Original Certificate Principal Balance therefor. CLASS A PASS-THROUGH RATE: With respect to any Distribution Date, the lesser of (1) for any Distribution Date which occurs on or prior to the Clean-Up Call Date, the per annum rate equal to 3.78%, and for any Distribution Date thereafter, the per annum rate equal to 4.28% and (2) the Net WAC Cap for such Distribution Date. CLASS A PRINCIPAL DISTRIBUTION AMOUNT: With respect to any Distribution Date (a) prior to the Stepdown Date and on any Distribution Date thereafter on which a Trigger Event is in effect, the lesser of (i) 100% of the Principal Distribution Amount and (ii) the Certificate Principal Balance of the Class A Certificates

CLASS: Each class of Certificates designated as the Class A, Class A-IO, Class M, Class X, Class I or Class R Certificates and, for the purposes of Section 2.07, any class of interests referenced in Section 2.07. CLASS A CERTIFICATE: Any Certificate designated as a "Class A Certificate" on the face thereof, in the form of Exhibit A hereto. The Class A Certificates shall be issued with an initial aggregate Certificate Principal Balance equal to the Original Certificate Principal Balance therefor. CLASS A PASS-THROUGH RATE: With respect to any Distribution Date, the lesser of (1) for any Distribution Date which occurs on or prior to the Clean-Up Call Date, the per annum rate equal to 3.78%, and for any Distribution Date thereafter, the per annum rate equal to 4.28% and (2) the Net WAC Cap for such Distribution Date. CLASS A PRINCIPAL DISTRIBUTION AMOUNT: With respect to any Distribution Date (a) prior to the Stepdown Date and on any Distribution Date thereafter on which a Trigger Event is in effect, the lesser of (i) 100% of the Principal Distribution Amount and (ii) the Certificate Principal Balance of the Class A Certificates immediately prior to the related Distribution Date and (b) on or after the related Stepdown Date, to the extent a Trigger Event is not in effect, the least of: (i) the Principal Distribution Amount; (ii) the excess of (1) the Certificate Principal Balance of the Class A Certificates immediately prior to the related Distribution Date over (2) the lesser of (a) 61.00% of the Current Pool Principal Balance for that Distribution Date and (b) the Current Pool Principal Balance for that Distribution Date minus the OC Floor (but not less than zero); and (iii) the Certificate Principal Balance of the Class A Certificates immediately prior to the related Distribution Date. CLASS A-IO CERTIFICATE: Any Certificate designated as a "Class A-IO Certificate" on the face thereof, in the form of Exhibit B hereto. CLASS A-IO NOTIONAL BALANCE: With respect to any Distribution Date (i) prior to the Distribution Date occurring in October 2005, an amount equal to the lesser of (x) the Class A-IO Scheduled Notional Balance and (y) the Aggregate Principal Balance of the Mortgage Loans as of the first day of the related Due Period and (ii) on and after the Distribution Date occurring in October 2005, an amount equal to $0. CLASS A-IO PASS-THROUGH RATE: With respect to any Distribution Date, a per annum rate equal to 4.00%. 6

CLASS A-IO SCHEDULED NOTIONAL BALANCE: With respect to any Distribution Date, the applicable amount set forth in the following schedule:
Class A-IO Scheduled Notional Balance ---------------$118,125,000 $118,125,000 $118,125,000 $117,562,500 $117,562,500 $117,562,500 $112,106,250 $112,106,250 $112,106,250 $105,975,000 $105,975,000 $105,975,000 $98,718,750 $98,718,750 Class A-IO Scheduled Notional Balance ---------------$92,362,500 $92,362,500 $91,350,000 $91,350,000 $91,350,000 $72,337,500 $72,337,500 $72,337,500 $57,375,000 $57,375,000 $57,375,000 $48,937,500 $48,937,500 $48,937,500

Distribution Date ------------------------April 2003 May 2003 June 2003 July 2003 August 2003 September 2003 October 2003 November 2003 December 2003 January 2004 February 2004 March 2004 April 2004 May 2004

Distribution Date --------------------------August 2004 September 2004 October 2004 November 2004 December 2004 January 2005 February 2005 March 2005 April 2005 May 2005 June 2005 July 2005 August 2005 September 2005

CLASS A-IO SCHEDULED NOTIONAL BALANCE: With respect to any Distribution Date, the applicable amount set forth in the following schedule:
Class A-IO Scheduled Notional Balance ---------------$118,125,000 $118,125,000 $118,125,000 $117,562,500 $117,562,500 $117,562,500 $112,106,250 $112,106,250 $112,106,250 $105,975,000 $105,975,000 $105,975,000 $98,718,750 $98,718,750 $98,718,750 $92,362,500 Class A-IO Scheduled Notional Balance ---------------$92,362,500 $92,362,500 $91,350,000 $91,350,000 $91,350,000 $72,337,500 $72,337,500 $72,337,500 $57,375,000 $57,375,000 $57,375,000 $48,937,500 $48,937,500 $48,937,500 $0

Distribution Date ------------------------April 2003 May 2003 June 2003 July 2003 August 2003 September 2003 October 2003 November 2003 December 2003 January 2004 February 2004 March 2004 April 2004 May 2004 June 2004 July 2004

Distribution Date --------------------------August 2004 September 2004 October 2004 November 2004 December 2004 January 2005 February 2005 March 2005 April 2005 May 2005 June 2005 July 2005 August 2005 September 2005 October 2005 and thereafter

CLASS I CERTIFICATE: Any Certificate designated as a "Class I Certificate" on the face thereof, in the form of Exhibit F hereto. CLASS I CERTIFICATEHOLDER: A Holder of a Class I Certificate. CLASS I DISTRIBUTION AMOUNT: With respect to each Distribution Date from the initial Distribution Date through the Distribution Date in September, 2005, $125,517.00, and with respect to each Distribution Date thereafter, $0. CLASS INTEREST CARRYOVER SHORTFALL: With respect to any Class of Offered Certificates and any Distribution Date, an amount equal to the sum of (a) the excess, if any, of (i) the Class Monthly Interest for such Class (the amount to which the Class is entitled in the absence of any shortfall but after giving effect to the Net WAC Cap, if applicable) for the preceding Distribution Date plus any outstanding Class Interest Carryover Shortfall with respect to that Class from any preceding Distribution Dates over (ii) the amount in respect of interest that is actually distributed to the Holders of that Class on the preceding Distribution Date, plus (b) one-month's interest on the amount described in clause (a), to the extent permitted by law, at the related Pass-Through Rate. CLASS M CERTIFICATE: Any Certificate designated as a "Class M Certificate" on the face thereof, in the form of Exhibit C hereto. The Class M Certificates shall be comprised of the Class M Components and shall be issued with an initial aggregate Certificate Principal Balance equal to the Original Certificate Principal Balance therefor. Following the occurrence of a Separation Event, references herein to the Class M Certificates shall be deemed to be references to the Class M-1, Class M-2 and Class M-3 Certificates, as applicable. 7

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

CLASS M COLLATERALIZATION DEFICIT: With respect to any Distribution Date immediately prior to which the Class M Certificates are outstanding, the lesser of (i) the amount, if any, by which (A) the aggregate Certificate Principal Balance of the Class A and Class M Certificates (after giving effect to all distributions to be made thereon on such Distribution Date other than any portion thereof consisting of a Class M Insured Principal Payment in respect of a Class M Collateralization Deficit) exceeds (B) the Aggregate Principal Balance of the Mortgage Loans on the last day of the immediately preceding Due Period (after giving effect to scheduled payments of principal due during the related Due Period, to the extent received or advanced, and unscheduled collections of principal received during the preceding calendar month), and (ii) the Certificate Principal Balance of the Class M Certificates (after giving effect to all distributions to be made thereon on such Distribution Date other than any portion thereof consisting of a Class M Insured Principal Payment in respect of a Class M Collateralization Deficit). CLASS M COMPONENT: The Class M-1 Component, the Class M-2 Component and the Class M-3 Component, as applicable. CLASS M DEFICIENCY AMOUNT: For any Distribution Date and the Class M Certificates, the sum of (i) any Class M Insured Interest Payment for such Distribution Date and (ii) any Class M Insured Principal Payment for such Distribution Date. CLASS M INSURED AMOUNTS: With respect to any Distribution Date, any Class M Deficiency Amount for such Distribution Date plus any Class M Preference Amount for such Distribution Date. A Class M Insured Amount will not include any Prepayment Interest Shortfalls, any Civil Relief Act Interest Shortfalls or any Net WAC Cap Carryover Amounts. CLASS M INSURED INTEREST PAYMENT: With respect to any Distribution Date and the Class M Certificates, the excess, if any, of (i) the sum of the Class Monthly Interest and any Class Interest Carryover Shortfall for the Class M Certificates for such Distribution Date over (ii) the Net Available Amount remaining on deposit in the Distribution Account following the payment of the Class Monthly Interest and any Class Interest Carryover Shortfall on the Class A and Class A-IO Certificates on that Distribution Date. CLASS M INSURED PAYMENTS: With respect to any Distribution Date, the aggregate amount actually paid by the Certificate Insurer pursuant to the Certificate Insurance Policy in respect of Class M Insured Amounts for such Distribution Date. CLASS M INSURED PRINCIPAL PAYMENT: With respect to (x) any Distribution Date other than the Final Insured Distribution Date and the Class M Certificates, the lesser of (i) the Class M Collateralization Deficit, if any, for such Distribution Date and (ii) the Applied Realized Loss Amount applied in reduction of the Certificate Principal Balance of the Class M Certificates on such Distribution Date (after taking into account any funds in the Interest Rate Hedge Payment Fund which are applied on such Distribution Date towards the payment of such Applied Realized Loss Amount pursuant to Section 6.10(d) of this Agreement), and (y) the Final Insured Distribution Date and the Class M Certificates, the aggregate Certificate Principal Balance of the Class M Certificates (after giving effect to all distributions of principal to be made thereon on such Distribution Date other than any portion thereof consisting of a Class M Insured Principal Payment). 8

CLASS M PASS-THROUGH RATE: With respect to any Distribution Date, the lesser of (1) for any Distribution Date which occurs on or prior to the Clean-Up Call Date, the per annum rate equal to LIBOR plus 1.50%, and for any Distribution Date thereafter, the per annum rate equal to LIBOR plus 2.25% and (2) the Net WAC Cap for such Distribution Date. CLASS M PREFERENCE AMOUNT: Any amount previously paid in respect of the Class M Certificates that is recoverable and sought to be recovered as a voidable preference by a trustee in bankruptcy pursuant to the United States Bankruptcy Code (11 U.S.C. ss.ss.101 et seq.), as amended from time to time in accordance with a final, nonappealable order of a court having competent jurisdiction. CLASS M PREFERENCE CLAIM: As defined in Section 6.04(f).

CLASS M PASS-THROUGH RATE: With respect to any Distribution Date, the lesser of (1) for any Distribution Date which occurs on or prior to the Clean-Up Call Date, the per annum rate equal to LIBOR plus 1.50%, and for any Distribution Date thereafter, the per annum rate equal to LIBOR plus 2.25% and (2) the Net WAC Cap for such Distribution Date. CLASS M PREFERENCE AMOUNT: Any amount previously paid in respect of the Class M Certificates that is recoverable and sought to be recovered as a voidable preference by a trustee in bankruptcy pursuant to the United States Bankruptcy Code (11 U.S.C. ss.ss.101 et seq.), as amended from time to time in accordance with a final, nonappealable order of a court having competent jurisdiction. CLASS M PREFERENCE CLAIM: As defined in Section 6.04(f). CLASS M PRINCIPAL DISTRIBUTION AMOUNT: With respect to any Distribution Date, sum of the Class M-1 Principal Distribution Amount, the Class M-2 Principal Distribution Amount and the Class M-3 Principal Distribution Amount for such Distribution Date. CLASS M-1 COMPONENT: The component portion of the Class M Certificates designated as the "Class M-1 Component" and having an initial Component Principal Balance equal to $25,875,000. The Class M-1 Component will not be transferable separately from the other Class M Components except upon the occurrence of a Separation Event, at which time the Class M-1 Component will be issued as a Class M-1 Certificate. CLASS M-1 CERTIFICATE: Any Certificate designated as a "Class M-1 Certificate" on the face thereof, in the form of Exhibit C hereto. The Class M-1 Certificates will be issued upon the occurrence of a Separation Event with an initial aggregate Certificate Principal Balance equal to the Component Principal Balance of the Class M-1 Component on the date of the Separation Event. The CUSIP number for the Class M-1 Certificates is 000759 OH0. CLASS M-1 PRINCIPAL DISTRIBUTION AMOUNT: With respect to any Distribution Date: (a) prior to the Stepdown Date and on any Distribution Date thereafter on which a Trigger Event is in effect: (i) if any Class A Certificates remain outstanding, zero ($0); or (ii) if the Certificate Principal Balance of the Class A Certificates has been reduced to zero ($0), the lesser of (A) the Certificate Principal Balance of the Class M-1 Component immediately prior to that Distribution Date and (B) 100% of the Principal Distribution Amount; and 9

(b) on an after the Stepdown Date, to the extent a Trigger Event is not in effect, the least of: (i) the Principal Distribution Amount remaining after distribution of the Class A Principal Distribution Amount on the related Distribution Date; (ii) the excess of (A) the sum of (1) the Certificate Principal Balance of the Class A Certificates after distribution of the Class A Principal Distribution Amount on the related Distribution Date and (2) the Certificate Principal Balance of the Class M-1 Component immediately prior to the related Distribution Date over (B) the lesser of (1) 72.50% of the Current Pool Principal Balance for that Distribution Date and (2) the Current Pool Principal Balance for that Distribution Date minus the OC Floor (but not less than zero); and (iii) the Certificate Principal Balance of the Class M-1 Component immediately prior to the related Distribution Date. CLASS M-2 COMPONENT: The component portion of the Class M Certificates designated as the "Class M-2 Component" and having an initial Component Principal Balance equal to $23,625,000. The Class M-2 Component will not be transferable separately from the other Class M Components except upon the occurrence of a Separation Event, at which time the Class M-2 Component will be issued as a Class M-2 Certificate.

(b) on an after the Stepdown Date, to the extent a Trigger Event is not in effect, the least of: (i) the Principal Distribution Amount remaining after distribution of the Class A Principal Distribution Amount on the related Distribution Date; (ii) the excess of (A) the sum of (1) the Certificate Principal Balance of the Class A Certificates after distribution of the Class A Principal Distribution Amount on the related Distribution Date and (2) the Certificate Principal Balance of the Class M-1 Component immediately prior to the related Distribution Date over (B) the lesser of (1) 72.50% of the Current Pool Principal Balance for that Distribution Date and (2) the Current Pool Principal Balance for that Distribution Date minus the OC Floor (but not less than zero); and (iii) the Certificate Principal Balance of the Class M-1 Component immediately prior to the related Distribution Date. CLASS M-2 COMPONENT: The component portion of the Class M Certificates designated as the "Class M-2 Component" and having an initial Component Principal Balance equal to $23,625,000. The Class M-2 Component will not be transferable separately from the other Class M Components except upon the occurrence of a Separation Event, at which time the Class M-2 Component will be issued as a Class M-2 Certificate. CLASS M-2 CERTIFICATE: Any Certificate designated as a "Class M-2 Certificate" on the face thereof, in the form of Exhibit C hereto. The Class M-2 Certificates will be issued upon the occurrence of a Separation Event with an initial aggregate Certificate Principal Balance equal to the Component Principal Balance of the Class M-2 Component on the date of the Separation Event. The CUSIP number for the Class M-2 Certificates is 000759 DJ6. CLASS M-2 PRINCIPAL DISTRIBUTION AMOUNT: With respect to any Distribution Date: (a) prior to the Stepdown Date and on any Distribution Date thereafter on which a Trigger Event is in effect: (i) if any Class A Certificates or Class M-1 Component remain outstanding, zero ($0); or (ii) if the Certificate Principal Balance of the Class A Certificates and Class M-1 Component have been reduced to zero ($0), the lesser of (A) the Certificate Principal Balance of the Class M-2 Component immediately prior to that Distribution Date and (B) 100% of the Principal Distribution Amount; and 10

(b) on an after the Stepdown Date, to the extent a Trigger Event is not in effect, the least of: (i) the Principal Distribution Amount remaining after distribution of the Class A and Class M-1 Principal Distribution Amounts on the related Distribution Date; (ii) the excess of (A) the sum of (1) the aggregate Certificate Principal Balance of the Class A Certificates and the Class M-1 Component after distribution of the Class A and Class M-1 Principal Distribution Amounts on the related Distribution Date and (2) the Certificate Principal Balance of the Class M-2 Component immediately prior to the related Distribution Date over (B) the lesser of (1) 83.00% of the Current Pool Principal Balance for that Distribution Date and (2) the Current Pool Principal Balance for that Distribution Date minus the OC Floor (but not less than zero); and (iii) the Certificate Principal Balance of the Class M-1 Component immediately prior to the related Distribution Date. CLASS M-3 COMPONENT: The component portion of the Class M Certificates designated as the "Class M-3 Component" and having an initial Component Principal Balance equal to $13,500,000. The Class M-3 Component will not be transferable separately from the other Class M Components except upon the occurrence of a Separation Event, at which time the Class M-3 Component will be issued as a Class M-3 Certificate.

(b) on an after the Stepdown Date, to the extent a Trigger Event is not in effect, the least of: (i) the Principal Distribution Amount remaining after distribution of the Class A and Class M-1 Principal Distribution Amounts on the related Distribution Date; (ii) the excess of (A) the sum of (1) the aggregate Certificate Principal Balance of the Class A Certificates and the Class M-1 Component after distribution of the Class A and Class M-1 Principal Distribution Amounts on the related Distribution Date and (2) the Certificate Principal Balance of the Class M-2 Component immediately prior to the related Distribution Date over (B) the lesser of (1) 83.00% of the Current Pool Principal Balance for that Distribution Date and (2) the Current Pool Principal Balance for that Distribution Date minus the OC Floor (but not less than zero); and (iii) the Certificate Principal Balance of the Class M-1 Component immediately prior to the related Distribution Date. CLASS M-3 COMPONENT: The component portion of the Class M Certificates designated as the "Class M-3 Component" and having an initial Component Principal Balance equal to $13,500,000. The Class M-3 Component will not be transferable separately from the other Class M Components except upon the occurrence of a Separation Event, at which time the Class M-3 Component will be issued as a Class M-3 Certificate. CLASS M-3 CERTIFICATE: Any Certificate designated as a "Class M-3 Certificate" on the face thereof, in the form of Exhibit C hereto. The Class M-3 Certificates will be issued upon the occurrence of a Separation Event with an initial aggregate Certificate Principal Balance equal to the Component Principal Balance of the Class M-3 Component on the date of the Separation Event. The CUSIP number for the Class M-3 Certificates is 000759 DK3. CLASS M-3 PRINCIPAL DISTRIBUTION AMOUNT: With respect to any Distribution Date: (a) prior to the Stepdown Date and on any Distribution Date thereafter on which a Trigger Event is in effect: (i) if any Class A Certificates or Class M-1 or Class M-2 Component remain outstanding, zero ($0); or (ii) if the Certificate Principal Balance of the Class A Certificates and Class M-1 and Class M-2 Component have been reduced to zero ($0), the lesser of (A) the Certificate Principal Balance of the Class M-3 Component immediately prior to that Distribution Date and (B) 100% of the Principal Distribution Amount; and 11

(b) on an after the Stepdown Date, to the extent a Trigger Event is not in effect, the least of: (i) the Principal Distribution Amount remaining after distribution of the Class A, Class M-1 and Class M-2 Principal Distribution Amounts on the related Distribution Date; (ii) the excess of (A) the sum of (1) the aggregate Certificate Principal Balance of the Class A Certificates and the Class M-1 and Class M-2 Component after distribution of the Class A, Class M-1 and Class M-2 Principal Distribution Amounts on the related Distribution Date and (2) the Certificate Principal Balance of the Class M-3 Component immediately prior to the related Distribution Date over (B) the lesser of (1) 89.00% of the Current Pool Principal Balance for that Distribution Date and (2) the Current Pool Principal Balance for that Distribution Date minus the OC Floor (but not less than zero); and (iii) the Certificate Principal Balance of the Class M-3 Component immediately prior to the related Distribution Date. CLASS MONTHLY INTEREST: With respect to any Class of Offered Certificates and any Distribution Date, the amount of interest accrued during the related Accrual Period on the Certificate Principal Balance of such Class (or the Class A-IO Notional Balance in the case of the Class A-IO Certificates)

(b) on an after the Stepdown Date, to the extent a Trigger Event is not in effect, the least of: (i) the Principal Distribution Amount remaining after distribution of the Class A, Class M-1 and Class M-2 Principal Distribution Amounts on the related Distribution Date; (ii) the excess of (A) the sum of (1) the aggregate Certificate Principal Balance of the Class A Certificates and the Class M-1 and Class M-2 Component after distribution of the Class A, Class M-1 and Class M-2 Principal Distribution Amounts on the related Distribution Date and (2) the Certificate Principal Balance of the Class M-3 Component immediately prior to the related Distribution Date over (B) the lesser of (1) 89.00% of the Current Pool Principal Balance for that Distribution Date and (2) the Current Pool Principal Balance for that Distribution Date minus the OC Floor (but not less than zero); and (iii) the Certificate Principal Balance of the Class M-3 Component immediately prior to the related Distribution Date. CLASS MONTHLY INTEREST: With respect to any Class of Offered Certificates and any Distribution Date, the amount of interest accrued during the related Accrual Period on the Certificate Principal Balance of such Class (or the Class A-IO Notional Balance in the case of the Class A-IO Certificates) immediately prior to such Distribution Date at the related Pass-Through Rate, as reduced by that Class's pro rata share of Mortgage Loan Interest Shortfalls for such Distribution Date allocated to such Class pursuant to Section 6.05(c) of this Agreement and, with respect to the Class M Certificates only, as further reduced by the amount of any distribution to the Holder of the Class M Certificates in respect of Class Monthly Interest on such Distribution Date pursuant to Section 6.10(d) hereof. CLASS R CERTIFICATE: Any Certificate designated as a "Class R Certificate" on the face thereof, in the form of Exhibit D hereto. CLASS R CERTIFICATEHOLDER: A Holder of a Class R Certificate. CLASS X CERTIFICATE: Any Certificate designated as a "Class X Certificate" on the face thereof, in the form of Exhibit E hereto. CLASS X CERTIFICATEHOLDER: A Holder of a Class X Certificate. CLASS X DISTRIBUTION AMOUNT: With respect to any Distribution Date, the sum of (i) the Overcollateralization Reduction Amount and (ii) the product of the notional principal balance of the Class X Certificate and the Pass-Through Rate of the Class X Certificate each as described in footnotes (5) and (6), respectively, of Section 2.07(b) hereof for the current and for all prior Distribution Dates less amounts distributed to the Class X Certificates on prior Distribution Dates pursuant to Sections 6.05(a)(ix) and (xiii) hereof. CLEAN-UP CALL DATE: As defined in Section 8.01(b). 12

CLOSING DATE: March 31, 2003. CODE: The Internal Revenue Code of 1986, as amended. COLLATERAL AGENT: JPMorgan Chase Bank, a New York banking corporation, its successors and assigns. COLLECTION ACCOUNT: The Eligible Account established and maintained by the Servicer pursuant to Section 5.02(b). COMBINED LOAN-TO-VALUE RATIO or CLTV: As to any Mortgage Loan at any time, the fraction, expressed as a percentage, the numerator of which is the sum of (i) the Principal Balance thereof at such time and (ii) if such Mortgage Loan is subject to a second mortgage, the unpaid principal balance of any related first

CLOSING DATE: March 31, 2003. CODE: The Internal Revenue Code of 1986, as amended. COLLATERAL AGENT: JPMorgan Chase Bank, a New York banking corporation, its successors and assigns. COLLECTION ACCOUNT: The Eligible Account established and maintained by the Servicer pursuant to Section 5.02(b). COMBINED LOAN-TO-VALUE RATIO or CLTV: As to any Mortgage Loan at any time, the fraction, expressed as a percentage, the numerator of which is the sum of (i) the Principal Balance thereof at such time and (ii) if such Mortgage Loan is subject to a second mortgage, the unpaid principal balance of any related first mortgage loan or loans, if any, as of such time, and the denominator of which is the Appraised Value of any related Mortgaged Property or Properties as of the date of the appraisal used by or on behalf of the Unaffiliated Seller to underwrite such Mortgage Loan. COMMISSION: The Securities and Exchange Commission. COMPENSATING INTEREST: As defined in Section 6.09 hereof. COMPONENT PRINCIPAL BALANCE: With respect to any Class M Component and any Distribution Date, the initial component principal balance of such Class M Component, reduced by the aggregate amount of principal payments on the Class M Certificates prior to such Distribution Date which were allocable to such Class M Component. CORRESPONDING CLASS: Means the Class of Master REMIC Regular Interests as used in the Table in Section 2.07. CREDIT AND SERVICING POLICY MANUALS: With respect to an Originator, its written policies and procedures regarding underwriting, origination and servicing of mortgage loans, as delivered to the Certificate Insurer on or prior to the Closing Date, with such changes notified to the Certificate Insurer (a) that do not have a material adverse effect on such policies and procedures, or (b) that are approved by the Certificate Insurer, such approval not to be unreasonably withheld, conditional or delayed, or (c) that the Servicer does not apply to the Mortgage Loans. CUMULATIVE LOSS PERCENTAGE: As of any date of determination thereof, the percentage obtained by dividing (x) the aggregate of all Liquidated Loan Losses incurred since the Closing Date through the last day of the related Due Period by (y) the Maximum Pool Principal Balance. 13

CUMULATIVE LOSS TRIGGER EVENT: With respect to any Distribution Date, the event that occurs if the Cumulative Loss Percentage for such Distribution Date exceeds the following percentages with respect to the applicable Distribution Date specified below:
Distribution Date ---------------------------January 2006 - December 2006 January 2007 - December 2007 January 2008 - December 2008 January 2009 - December 2009 January 2010 and thereafter Loss Percentage -------------------------------------------------2.75% for the first month, plus an additional 1/12 of 1.75% for each month thereafter 4.50% for the first month, plus an additional 1/12 of 1.50% for each month thereafter 6.00% for the first month, plus an additional 1/12 of 1.00% for each month thereafter 7.00% for the first month, plus an additional 1/12 of 0.25% for each month thereafter 7.25%

CURRENT POOL PRINCIPAL BALANCE: With respect to any Distribution Date, the sum of (i) the

CUMULATIVE LOSS TRIGGER EVENT: With respect to any Distribution Date, the event that occurs if the Cumulative Loss Percentage for such Distribution Date exceeds the following percentages with respect to the applicable Distribution Date specified below:
Distribution Date ---------------------------January 2006 - December 2006 January 2007 - December 2007 January 2008 - December 2008 January 2009 - December 2009 January 2010 and thereafter Loss Percentage -------------------------------------------------2.75% for the first month, plus an additional 1/12 of 1.75% for each month thereafter 4.50% for the first month, plus an additional 1/12 of 1.50% for each month thereafter 6.00% for the first month, plus an additional 1/12 of 1.00% for each month thereafter 7.00% for the first month, plus an additional 1/12 of 0.25% for each month thereafter 7.25%

CURRENT POOL PRINCIPAL BALANCE: With respect to any Distribution Date, the sum of (i) the Aggregate Principal Balance of the Mortgage Loans on the last day of the related Due Period, and (ii) the PreFunding Amount (net of Pre-Funding Earnings), if any, immediately prior to the Distribution Date. CUT-OFF DATE: With respect to Initial Mortgage Loans, the Initial Cut-Off Date, and, with respect to Subsequent Mortgage Loans, if any, the Subsequent Cut-Off Date. DEBT SERVICE REDUCTION: With respect to any Mortgage Loan, a reduction by a court of competent jurisdiction of the Monthly Payment due on such Mortgage Loan in a proceeding under the United States Bankruptcy Code, except such a reduction that constitutes a Deficient Valuation or a permanent forgiveness of principal. DEFICIENT VALUATION: With respect to any Mortgage Loan, a valuation of the related Mortgaged Property by a court of competent jurisdiction in an amount less than the then outstanding principal balance of the Mortgage Loan, which valuation results from a proceeding initiated under the United States Bankruptcy Code. DELETED MORTGAGE LOAN: A Mortgage Loan replaced by or to be replaced by a Qualified Substitute Mortgage Loan. DELINQUENCY RATIO: With respect to any Distribution Date, the percentage equivalent of a fraction (a) the numerator of which equals the aggregate Principal Balances of all Mortgage Loans that are 60 or more days Delinquent, in foreclosure, converted to REO Property or in bankruptcy and are 60 or more days Delinquent, as of the last day of the related Due Period and (b) the denominator of which is the Current Pool Principal Balance for that Distribution Date. 14

DELINQUENCY TRIGGER EVENT: The event that occurs when the Rolling Three Month Delinquency Rate exceeds 45% of the Senior Enhancement Percentage. DELINQUENT: A Mortgage Loan is "delinquent" if any payment due thereon is not made by the close of business on the day such payment is scheduled to be due. A Mortgage Loan is "30 days delinquent" if such payment has not been received by the close of business on the corresponding day of the month immediately succeeding the month in which such payment was due, or, if there is no such corresponding day (e.g., as when a 30-day month follows a 31-day month in which a payment was due on the 31st day of such month) then on the last day of such immediately succeeding month. Similarly for "60 days delinquent," "90 days delinquent" and so on. DEPOSITOR: Bear Stearns Asset Backed Securities, Inc., a Delaware corporation, and any successor thereto. DEPOSITORY: The Depository Trust Company, 55 Water Street, New York, New York 10041 and any successor Depository hereafter named.

DELINQUENCY TRIGGER EVENT: The event that occurs when the Rolling Three Month Delinquency Rate exceeds 45% of the Senior Enhancement Percentage. DELINQUENT: A Mortgage Loan is "delinquent" if any payment due thereon is not made by the close of business on the day such payment is scheduled to be due. A Mortgage Loan is "30 days delinquent" if such payment has not been received by the close of business on the corresponding day of the month immediately succeeding the month in which such payment was due, or, if there is no such corresponding day (e.g., as when a 30-day month follows a 31-day month in which a payment was due on the 31st day of such month) then on the last day of such immediately succeeding month. Similarly for "60 days delinquent," "90 days delinquent" and so on. DEPOSITOR: Bear Stearns Asset Backed Securities, Inc., a Delaware corporation, and any successor thereto. DEPOSITORY: The Depository Trust Company, 55 Water Street, New York, New York 10041 and any successor Depository hereafter named. DIRECT PARTICIPANT: Any broker-dealer, bank or other financial institution for which the Depository holds Offered Certificates from time to time as a securities depository. DISTRIBUTION ACCOUNT: The Distribution Account established in accordance with Section 6.01(a) hereof and maintained by the Trustee. DISTRIBUTION DATE: The 15th day of any month or if such 15th day is not a Business Day, the first Business Day immediately following, commencing on April 15, 2003. DUE DATE: With respect to each Mortgage Loan and any Distribution Date, the day of the calendar month preceding the calendar month in which such Distribution Date occurs on which the Monthly Payment for such Mortgage Loan was due. DUE PERIOD: With respect to each Distribution Date, the calendar month preceding the related Distribution Date. ELIGIBLE ACCOUNT: Either (A) an account or accounts maintained with an institution (which may include the Trustee, provided such institution otherwise meets these requirements) whose deposits are insured by the FDIC, the unsecured and uncollateralized debt obligations of which institution shall be rated "AA" or better by S&P and "Aa2" or better by Moody's and in the highest short term rating category by S&P and Moody's, and which is (i) a federal savings and loan association duly organized, validly existing and in good standing under the federal banking laws, (ii) an institution (including the Trustee) duly organized, validly existing and in good standing under the applicable banking laws of any state, (iii) a national banking association duly organized, validly existing and in good standing under the federal banking laws, (iv) a principal subsidiary of a bank holding company, or (v) approved in writing by the Certificate Insurer and the Rating Agencies or (B) a trust account or accounts maintained with the trust department of a federal or state chartered depository institution or trust company (which may include the Trustee, provided that the Trustee otherwise meets these requirements), having capital and surplus of not less than $50,000,000, acting in its fiduciary capacity. 15

ERISA: As defined in Section 4.02(n) hereof. EVENT OF DEFAULT: As described in Section 7.01. EXCESS INTEREST: For any Distribution Date is equal to the excess of (a) the Net Available Amount for such Distribution Date over (b) the sum of: (i) the Interest Distribution Amount for such Distribution Date;

ERISA: As defined in Section 4.02(n) hereof. EVENT OF DEFAULT: As described in Section 7.01. EXCESS INTEREST: For any Distribution Date is equal to the excess of (a) the Net Available Amount for such Distribution Date over (b) the sum of: (i) the Interest Distribution Amount for such Distribution Date; (ii) the Principal Distribution Amount for such Distribution Date (calculated for this purpose without regard to any Overcollateralization Increase Amount or portion thereof included therein); and (iii) any Reimbursement Amount or other amount owed to the Certificate Insurer on such Distribution Date. EXCESS OVERCOLLATERALIZED AMOUNT: With respect to any Distribution Date, the excess, if any, of (a) the Overcollateralized Amount that would apply on such Distribution Date after taking into account all distributions that would be made on such Distribution Date (other than the Overcollateralization Reduction Amount) over (b) the Specified Overcollateralization Amount. FDIC: The Federal Deposit Insurance Corporation, and any successor thereto. FHLMC: The Federal Home Loan Mortgage Corporation, and any successor thereto. FINAL CERTIFICATION: As defined in Section 2.06(b) hereof. FINAL INSURED DISTRIBUTION DATE: The earlier of (i) the Distribution Date on August 15, 2033 or (ii) the final Distribution Date that occurs in connection with any earlier termination of the Trust pursuant to Section 8.01 of this Pooling and Servicing Agreement. FINAL SCHEDULED MATURITY DATE: With respect to any Class of Offered Certificates (other than the Class A-IO Certificates), the Distribution Date occurring in the month specified below:
Final Scheduled Maturity Date --------------------August 2033 August 2033

Class ------------A M

FITCH: Fitch Ratings, a corporation organized and existing under Delaware law, or any successor thereto and if such corporation no longer for any reason performs the services of a securities rating agency, "Fitch" shall be deemed to refer to any other nationally recognized rating agency designated by the Certificate Insurer. 16

FNMA: The Federal National Mortgage Association, and any successor thereto. FORECLOSURE PROFITS: As to any Servicer Remittance Date, the excess, if any, of (i) Net Liquidation Proceeds in respect of each Mortgage Loan that became a Liquidated Mortgage Loan during the related Due Period over (ii) the sum of the unpaid Principal Balance of each such Liquidated Mortgage Loan plus accrued and unpaid interest at the applicable Mortgage Interest Rate on the unpaid Principal Balance thereof from the Due Date to which interest was last paid by the Mortgagor (or, in the case of a Liquidated Mortgage Loan that had been an REO Mortgage Loan, from the Due Date to which interest was last deemed to have been paid pursuant to Section 5.06 to the first day of the month following the month in which such Mortgage Loan became a Liquidated Mortgage Loan). GAAP: Generally accepted accounting principles, consistently applied, as of the date of such application.

FNMA: The Federal National Mortgage Association, and any successor thereto. FORECLOSURE PROFITS: As to any Servicer Remittance Date, the excess, if any, of (i) Net Liquidation Proceeds in respect of each Mortgage Loan that became a Liquidated Mortgage Loan during the related Due Period over (ii) the sum of the unpaid Principal Balance of each such Liquidated Mortgage Loan plus accrued and unpaid interest at the applicable Mortgage Interest Rate on the unpaid Principal Balance thereof from the Due Date to which interest was last paid by the Mortgagor (or, in the case of a Liquidated Mortgage Loan that had been an REO Mortgage Loan, from the Due Date to which interest was last deemed to have been paid pursuant to Section 5.06 to the first day of the month following the month in which such Mortgage Loan became a Liquidated Mortgage Loan). GAAP: Generally accepted accounting principles, consistently applied, as of the date of such application. HEDGE COUNTERPARTY: Bear Stearns Financial Products Inc., a Delaware corporation, its successors and assigns. HEDGE PAYMENTS: With respect to any Distribution Date, any amounts paid by the Hedge Counterparty under the Interest Rate Hedge Agreement to the Trustee for deposit into the Interest Rate Hedge Payment Fund, other than any Hedge Termination Payments. HEDGE PREMIUM: With respect to any Distribution Date, the Fixed Amount (as defined in the Interest Rate Hedge Agreement) owing to the Hedge Counterparty pursuant to the Interest Rate Hedge Agreement on such Distribution Date. HEDGE TERMINATION PAYMENTS: Any termination payments paid by the Hedge Counterparty under the Interest Rate Hedge Agreement to the Trustee for deposit into the Interest Rate Hedge Payment Fund, including any termination payments in respect of a Additional Termination Event (as defined in the Interest Rate Hedge Agreement). INDIRECT PARTICIPANT: Any financial institution for whom any Direct Participant holds an interest in an Offered Certificate. INITIAL CERTIFICATION: As defined in Section 2.06(a) hereof. INITIAL CUT-OFF DATE: With respect to any Initial Mortgage Loan, the close of business on February 28, 2003, or, if such Initial Mortgage Loan was originated or otherwise acquired by an Originator after February 28, 2003, the date of origination or acquisition of such Initial Mortgage Loan. INITIAL MORTGAGE LOANS: The Mortgage Loans delivered by the Depositor on the Closing Date. INSURANCE AND INDEMNITY AGREEMENT: The Insurance and Indemnity Agreement, dated as of March 31, 2003, among the Certificate Insurer, the Depositor, the Trustee, the Collateral Agent, the Back up Servicer, the Servicer, the Unaffiliated Seller and the Originators, as such agreement may be amended or supplemented in accordance with the provisions thereof. 17

INSURANCE POLICIES: All insurance policies insuring any Mortgage Loan or Mortgaged Property to the extent the Trust or the Trustee has any interest therein. INSURANCE PROCEEDS: Proceeds paid by any insurer pursuant to any insurance policy covering a Mortgage Loan to the extent such proceeds are not applied to the restoration of the related Mortgaged Property or released to the related Mortgagor in accordance with Accepted Servicing Practices. "Insurance Proceeds" do not include "Class M Insured Payments". INTEREST DISTRIBUTION AMOUNT: With respect to any Distribution Date, an amount equal to the sum of the Class Monthly Interest and any Class Interest Carryover Shortfall for the Class A, Class A-IO and Class M

INSURANCE POLICIES: All insurance policies insuring any Mortgage Loan or Mortgaged Property to the extent the Trust or the Trustee has any interest therein. INSURANCE PROCEEDS: Proceeds paid by any insurer pursuant to any insurance policy covering a Mortgage Loan to the extent such proceeds are not applied to the restoration of the related Mortgaged Property or released to the related Mortgagor in accordance with Accepted Servicing Practices. "Insurance Proceeds" do not include "Class M Insured Payments". INTEREST DISTRIBUTION AMOUNT: With respect to any Distribution Date, an amount equal to the sum of the Class Monthly Interest and any Class Interest Carryover Shortfall for the Class A, Class A-IO and Class M Certificates, in each case, as of such Distribution Date. INTEREST RATE HEDGE AGREEMENT: The Interest Rate Hedge Agreement, dated as of March 31, 2003, between the Hedge Counterparty and the Trustee, on behalf of the Supplemental Interest Trust. INTEREST RATE HEDGE PAYMENT FUND: The Eligible Account established and maintained in accordance with Section 6.10(a). INTEREST RATE HEDGE PAYMENT RIGHT: The right of the Holders of the Class M Certificates to receive Hedge Payments in accordance with Section 6.10(d). INTEREST REMITTANCE AMOUNT: With respect to any Distribution Date, the sum, without duplication, of: (i) all scheduled installments of interest due (or advanced by the Servicer) on the Mortgage Loans during the related Due Period; plus (ii) Compensating Interest paid by the Servicer on the related Servicer Remittance Date; plus (iii) the interest component of all related Substitution Adjustments and Loan Repurchase Prices; plus (iv) the interest component, if any, of all Insurance Proceeds and Liquidation Proceeds received by the Servicer during the related Due Period (in each case, net (but not to be reduced below zero) of unreimbursed expenses incurred in connection with a liquidation or foreclosure and unreimbursed Periodic Advances and Servicing Advances, if any); plus (v) the interest component of the proceeds of any termination of the Trust Fund; plus 18

(vi) any Special Advance amounts transferred to the Distribution Account pursuant to Section 5.18(b) hereof; plus (vii) on the Pre-Funding Distribution Dates, if any, the Capitalized Interest Requirement for such Distribution Date, if any; plus (viii) on the Pre-Funding Distribution Dates, if any, the Pre-Funding Earnings, if any; minus (xi) to the extent previously retained by the Servicer, the Servicing Fee for the related Due Period, together with amounts in reimbursement for Periodic Advances or Servicing Advances previously made with respect to the Mortgage Loans and other amounts as to which the Servicer is entitled to be reimbursed pursuant to this Agreement. INTEREST RESERVE ACCOUNT: The Eligible Account established in accordance with Section 6.01(a) hereof and maintained by the Trustee. LATE PAYMENT RATE: Has the meaning given in the Insurance and Indemnity Agreement.

(vi) any Special Advance amounts transferred to the Distribution Account pursuant to Section 5.18(b) hereof; plus (vii) on the Pre-Funding Distribution Dates, if any, the Capitalized Interest Requirement for such Distribution Date, if any; plus (viii) on the Pre-Funding Distribution Dates, if any, the Pre-Funding Earnings, if any; minus (xi) to the extent previously retained by the Servicer, the Servicing Fee for the related Due Period, together with amounts in reimbursement for Periodic Advances or Servicing Advances previously made with respect to the Mortgage Loans and other amounts as to which the Servicer is entitled to be reimbursed pursuant to this Agreement. INTEREST RESERVE ACCOUNT: The Eligible Account established in accordance with Section 6.01(a) hereof and maintained by the Trustee. LATE PAYMENT RATE: Has the meaning given in the Insurance and Indemnity Agreement. LIBOR: With respect to any Accrual Period for the Class M Certificates, the rate determined by the Trustee on the related LIBOR Determination Date on the basis of the offered rates of the Reference Banks for one-month U.S. dollar deposits, as such rates appear on Telerate Page 3750, as of 11:00 a.m. (London time) on such LIBOR Determination Date. On each LIBOR Determination Date, LIBOR for the related Accrual Period will be established by the Trustee as follows: (a) if on such LIBOR Determination Date two or more Reference Banks provide such offered quotations, LIBOR for the related Accrual Period for the Class M Certificates shall be the arithmetic mean of such offered quotations (rounded upwards if necessary to the nearest whole multiple of 1/16%); or (b) if on such LIBOR Determination Date fewer than two Reference Banks provide such offered quotations, LIBOR for the related Accrual Period for the Class M Certificates shall be the higher of (i) LIBOR as determined on the previous LIBOR Determination Date and (ii) the Reserve Interest Rate. LIBOR Determination Date: With respect to any Accrual Period for the Class M Certificates, the second London Business Day preceding the first day of such Accrual Period. LIQUIDATED LOAN LOSS: With respect to any Servicer Remittance Date as of the related Due Date, an amount equal to the excess of (i) the unpaid principal balance of a Liquidated Mortgage Loan, plus accrued interest thereon in accordance with the amortization schedule at the time applicable thereto at the applicable Mortgage Interest Rate from the Due Date as to which interest was last paid with respect thereto through the last day of the month in which such Mortgage Loan became a Liquidated Mortgage Loan, over (ii) Net Liquidation Proceeds with respect to such Liquidated Mortgage Loan. 19

LIQUIDATED MORTGAGE LOAN: A Mortgage Loan with respect to which the related Mortgaged Property has been acquired, liquidated or foreclosed in connection with (i) the taking of all or a part of Mortgaged Property by exercise of the power of eminent domain or condemnation, (ii) the liquidation of a defaulted Mortgage Loan through a trustee's sale, foreclosure sale, REO Disposition or otherwise and with respect to which the Servicer determines that all Liquidation Proceeds which it expects to recover have been recovered. LIQUIDATION EXPENSES: Without limitation, expenses incurred by the Servicer in connection with the liquidation of any Liquidated Mortgage Loan or property acquired in respect thereof (including, without limitation, legal fees and expenses, committee or referee fees, and, if applicable, brokerage commissions and conveyance taxes), any unreimbursed amount expended by the Servicer pursuant to Sections 5.04 and 5.06 hereof in respect of the related Mortgage Loan and any unreimbursed expenditures for real property taxes or for property restoration or preservation of the related Mortgaged Property. Liquidation Expenses shall not include any previously incurred expenses in respect of an REO Mortgage Loan which have been netted against related REO

LIQUIDATED MORTGAGE LOAN: A Mortgage Loan with respect to which the related Mortgaged Property has been acquired, liquidated or foreclosed in connection with (i) the taking of all or a part of Mortgaged Property by exercise of the power of eminent domain or condemnation, (ii) the liquidation of a defaulted Mortgage Loan through a trustee's sale, foreclosure sale, REO Disposition or otherwise and with respect to which the Servicer determines that all Liquidation Proceeds which it expects to recover have been recovered. LIQUIDATION EXPENSES: Without limitation, expenses incurred by the Servicer in connection with the liquidation of any Liquidated Mortgage Loan or property acquired in respect thereof (including, without limitation, legal fees and expenses, committee or referee fees, and, if applicable, brokerage commissions and conveyance taxes), any unreimbursed amount expended by the Servicer pursuant to Sections 5.04 and 5.06 hereof in respect of the related Mortgage Loan and any unreimbursed expenditures for real property taxes or for property restoration or preservation of the related Mortgaged Property. Liquidation Expenses shall not include any previously incurred expenses in respect of an REO Mortgage Loan which have been netted against related REO Proceeds. In no event may Liquidation Expenses with respect to a Liquidated Mortgage Loan exceed the related Liquidation Proceeds. LIQUIDATION PROCEEDS: The amount (other than Insurance Proceeds) received by the Servicer in connection with (i) the taking of all or a part of Mortgaged Property by exercise of the power of eminent domain or condemnation, (ii) the liquidation of a defaulted Mortgage Loan through a trustee's sale, foreclosure sale, REO Disposition or otherwise or (iii) the liquidation of any other security for such Mortgage Loan, including, without limitation, pledged equipment, inventory and working capital and assignments of rights and interests made by the related mortgagor. LOAN REPURCHASE PRICE: As defined in Section 2.06(c). LONDON BUSINESS DAY: A day on which banks are open for dealing in foreign currency and exchange in London and New York City. MAJORITY CERTIFICATEHOLDERS: For so long as any of the Offered Certificates are outstanding, the Holder or Holders of Offered Certificates evidencing Percentage Interests in excess of 51% in the aggregate, and thereafter, the Holder or Holders of Class R Certificates evidencing Percentage Interests in excess of 51% in the aggregate. MASTER REMIC: As defined in Section 2.07. MASTER REMIC REGULAR INTERESTS: As defined in Section 2.07. MAXIMUM POOL PRINCIPAL BALANCE: The sum of (i) the Aggregate Principal Balance of the Initial Mortgage Loans as of their respective Initial Cut-Off Dates and (ii) the Original Pre-Funded Amount, if any. MONTHLY PAYMENT: As to any Mortgage Loan (including any REO Mortgage Loan) and any Due Date, the payment of principal and interest due thereon as specified for such Due Date in the related amortization schedule at the time applicable thereto (after adjustment for any Deficient Valuations occurring prior to such Due Date but before any adjustment to such amortization schedule by reason of any bankruptcy, other than Deficient Valuations or similar proceeding or any moratorium or similar waiver or grace period). 20

MONTHLY SERVICING FEE: As defined in Section 5.08 hereof. MOODY'S: Moody's Investors Service, Inc., a corporation organized and existing under Delaware law, or any successor thereto and if such corporation no longer for any reason performs the services of a securities rating agency, "Moody's" shall be deemed to refer to any other nationally recognized rating agency designated by the Certificate Insurer. MORTGAGE: The mortgage, deed of trust or other instrument creating a first or second lien on the Mortgaged Property.

MONTHLY SERVICING FEE: As defined in Section 5.08 hereof. MOODY'S: Moody's Investors Service, Inc., a corporation organized and existing under Delaware law, or any successor thereto and if such corporation no longer for any reason performs the services of a securities rating agency, "Moody's" shall be deemed to refer to any other nationally recognized rating agency designated by the Certificate Insurer. MORTGAGE: The mortgage, deed of trust or other instrument creating a first or second lien on the Mortgaged Property. MORTGAGED PROPERTY: The underlying property or properties securing a Mortgage Loan, consisting of a fee simple estate in such real property. MORTGAGE FILE: As described in Exhibit G. MORTGAGE INTEREST RATE: As to any Mortgage Loan, the per annum fixed rate at which interest accrues on the unpaid principal balance thereof as set forth on the related Mortgage Note. MORTGAGE LOAN INTEREST SHORTFALL: With respect to any Distribution Date, as to any Mortgage Loan, the sum of (a) any Prepayment Interest Shortfall for which no payment of Compensating Interest is paid and (b) any Civil Relief Act Interest Shortfall in respect of such Mortgage Loan for such Distribution Date. MORTGAGE LOAN POOL: Those Initial Mortgage Loans listed on the initial Mortgage Loan Schedule together with any Subsequent Mortgage Loans listed on any subsequent Mortgage Loan Schedules. MORTGAGE LOANS: The Initial Mortgage Loans and the Subsequent Mortgage Loans, if any, together with any Qualified Substitute Mortgage Loans submitted therefor in accordance with this Agreement, as from time to time are held as a part of the Trust Fund. When used in respect of any Distribution Date, the term Mortgage Loans shall mean all Mortgage Loans (including those in respect of which the Trustee has acquired the related Mortgaged Property) which have not been repaid in full prior to the related Due Period, did not become Liquidated Mortgage Loans prior to such related Due Period or were not repurchased or replaced by the Unaffiliated Seller prior to such related Due Period. MORTGAGE LOAN SCHEDULE: The initial schedule of Initial Mortgage Loans as of the Initial Cut-Off Date as attached hereto as Schedule I, which will be deemed to be modified automatically upon any replacement, sale, substitution, liquidation, transfer or addition of any Mortgage Loan, including the addition of a Subsequent Mortgage Loan, pursuant to the terms hereof. The initial Mortgage Loan Schedule sets forth as to each Initial Mortgage Loan, and any subsequent Mortgage Loan Schedule provided in connection with the Subsequent Mortgage Loans will set forth as to each Subsequent Mortgage Loan: (i) its identifying number and the name of the related Mortgagor; (ii) the billing address for the related Mortgaged Property including the state and zip code; (iii) its date of origination; (iv) the original number of months to stated maturity; (v) the original stated maturity; (vi) the original Principal Balance; (vii) the Principal Balance as of its Cut-Off Date; (viii) the Mortgage Interest Rate; and (ix) the scheduled monthly payment of principal and interest. 21

MORTGAGE NOTE: The original, executed note or other evidence of indebtedness evidencing the indebtedness of a Mortgagor under a Mortgage Loan. MORTGAGED PROPERTY: The underlying property or properties securing a Mortgage Loan, consisting of a fee simple interest in such real property. MORTGAGOR: The obligor on a Mortgage Note. NET AVAILABLE AMOUNT: With respect to any Distribution Date, the Available Amount, less the sum of the

MORTGAGE NOTE: The original, executed note or other evidence of indebtedness evidencing the indebtedness of a Mortgagor under a Mortgage Loan. MORTGAGED PROPERTY: The underlying property or properties securing a Mortgage Loan, consisting of a fee simple interest in such real property. MORTGAGOR: The obligor on a Mortgage Note. NET AVAILABLE AMOUNT: With respect to any Distribution Date, the Available Amount, less the sum of the Servicing Fee, the Back-up Servicing Fee, the Trustee Fee, the Class I Distribution Amount and the Premium Amount due on such Distribution Date and any applicable expenses due on such Distribution Date. NET FORECLOSURE PROFITS: As to any Servicer Remittance Date, the excess, if any, of (i) the aggregate Foreclosure Profits with respect to such Servicer Remittance Date over (ii) Liquidated Loan Losses with respect to such Servicer Remittance Date. NET LIQUIDATION PROCEEDS: As to any Liquidated Mortgage Loan, Liquidation Proceeds net of Liquidation Expenses and net of any unreimbursed Periodic Advances made by the Servicer out of its own funds. For all purposes of this Agreement, Net Liquidation Proceeds shall be allocated first to accrued and unpaid interest on the related Mortgage Loan and then to the unpaid principal balance thereof. NET REO PROCEEDS: As to any REO Mortgage Loan, REO Proceeds net of any related expenses of the Servicer. NET WAC CAP: As of any Distribution Date, a per annum rate equal to: (a) in the case of the Class A Certificates, (i) the Net Weighted Average Mortgage Interest Rate less (ii) a per annum rate equal to the product of (A) 4.00% per annum and (B) a per annum rate equal to a fraction, the numerator of which is the Class A-IO Notional Balance for that Distribution Date and the denominator of which is the sum of (x) the Aggregate Principal Balance of the Mortgage Loans as of the beginning of the related Due Period and (y) the Pre-Funding Amount, if any, immediately prior to such Distribution Date (net of the PreFunding Earnings); and (b) in the case of the Class M Certificates, (i) the sum of (A) the Net Weighted Average Mortgage Interest Rate and (B) any Hedge Payment and any Hedge Termination Payment for such Distribution Date (converted to a per annum rate based upon the Certificate Principal Balance of the Class M Certificates) less (ii) a per annum rate equal to the sum of (1) the Premium Percentage, (2) the Class I Distribution Amount (converted to a per annum rate based upon the Certificate Principal Balance of the Class M Certificates) and (3) the product of (A) 4.00% per annum and (B) a per annum rate equal to a fraction, the numerator of which is the Class A-IO Notional Balance for that Distribution Date and the denominator of which is the sum of (x) the Aggregate Principal Balance of the Mortgage Loans as of the beginning of the related Due Period and (y) the Pre-Funding Amount, if any, immediately prior to such Distribution Date (net of the Pre-Funding Earnings). 22

NET WAC CAP CARRYOVER AMOUNT: With respect to each Class of the Capped Certificates and any Distribution Date, the sum of (a) the excess, if any, of the Class Monthly Interest for such Class, calculated at the applicable Pass-Through Rate without regard to the Net WAC Cap, over the Class Monthly Interest for such Class for the applicable Distribution Date, (b) any Net WAC Cap Carryover Amount remaining unpaid from prior Distribution Dates, and (c) one month's interest on the amount in clause (b) calculated at the applicable Pass-Through Rate without regard to the Net WAC Cap. NET WAC CAP CARRYOVER FUND: The Eligible Account established and maintained in accordance with Section 6.10(a). NET WAC CAP CARRYOVER RIGHT: The right of the Holders of the Capped Certificates to receive Net WAC Cap Carryover Amounts in accordance with

NET WAC CAP CARRYOVER AMOUNT: With respect to each Class of the Capped Certificates and any Distribution Date, the sum of (a) the excess, if any, of the Class Monthly Interest for such Class, calculated at the applicable Pass-Through Rate without regard to the Net WAC Cap, over the Class Monthly Interest for such Class for the applicable Distribution Date, (b) any Net WAC Cap Carryover Amount remaining unpaid from prior Distribution Dates, and (c) one month's interest on the amount in clause (b) calculated at the applicable Pass-Through Rate without regard to the Net WAC Cap. NET WAC CAP CARRYOVER FUND: The Eligible Account established and maintained in accordance with Section 6.10(a). NET WAC CAP CARRYOVER RIGHT: The right of the Holders of the Capped Certificates to receive Net WAC Cap Carryover Amounts in accordance with Section 6.10(b). NET WEIGHTED AVERAGE MORTGAGE INTEREST RATE: With respect to any Due Period, the weighted average Mortgage Interest Rates (weighted by Principal Balances) of the Mortgage Loans, calculated at the opening of business on the first day of such Due Period, less the rate at which the Servicing Fee is then calculated, less the rate at which the Back-up Servicing Fee is then calculated, less the rate at which the Trustee Fee is then calculated. NONRECOVERABLE ADVANCES: With respect to any Mortgage Loan, (a) any Periodic Advance previously made and not reimbursed from late collections pursuant to Section 5.03, or (b) a Periodic Advance proposed to be made in respect of a Mortgage Loan or REO Property either of which, in the good faith business judgment of the Servicer, as evidenced by an Officer's Certificate delivered to the Certificate Insurer and the Trustee no later than the Business Day following such determination, would not ultimately be recoverable pursuant to Sections 5.03. OC FLOOR: 0.50% of the Maximum Pool Principal Balance. OFFERED CERTIFICATES: The Senior Certificates and the Subordinate Certificates. OFFICER'S CERTIFICATE: A certificate signed by the Chairman of the Board, the President or a Vice President, the Treasurer, the Secretary or one of the Assistant Treasurers or Assistant Secretaries of the Unaffiliated Seller and/or the Servicer, or the Depositor, as required by this Agreement. OPINION OF COUNSEL: A written opinion of counsel, who may, without limitation, be counsel for the Unaffiliated Seller, the Servicer, the Trustee, a Certificateholder or a Certificateholder's prospective transferee or the Certificate Insurer (including except as otherwise provided herein, in-house counsel) reasonably acceptable to each addressee of such opinion and experienced in matters relating to the subject of such opinion; except that any opinion of counsel relating to (a) the qualification of any of the REMICs described in Section 2.07 hereof as a REMIC or (b) compliance with the REMIC Provisions must be an opinion of counsel who (i) is in fact independent of the Unaffiliated Seller, the Servicer and the Trustee, (ii) does not have any direct financial interest or any material indirect financial interest in the Unaffiliated Seller or the Servicer or the Trustee or in an Affiliate thereof, (iii) is not connected with the Unaffiliated Seller or the Servicer or the Trustee as an officer, employee, director or person performing similar functions and (iv) is reasonably acceptable to the Certificate Insurer. 23

ORIGINAL AGGREGATE PRINCIPAL BALANCE: The Aggregate Principal Balance of the Mortgage Loan Pool on the Closing Date, calculated as of the Initial Cut-Off Date, which amount is equal to $450,000,068.12. ORIGINAL CERTIFICATE PRINCIPAL BALANCE: As of the Startup Day and with respect to each Class of Certificates, the amount set forth below:
Original Certificate

ORIGINAL AGGREGATE PRINCIPAL BALANCE: The Aggregate Principal Balance of the Mortgage Loan Pool on the Closing Date, calculated as of the Initial Cut-Off Date, which amount is equal to $450,000,068.12. ORIGINAL CERTIFICATE PRINCIPAL BALANCE: As of the Startup Day and with respect to each Class of Certificates, the amount set forth below:
Original Certificate Principal Balance --------------------------$387,000,000 $63,000,000

Class ------------A M

The Class A-IO, Class X, Class I and Class R Certificates do not have an Original Certificate Principal Balance. ORIGINAL PRE-FUNDED AMOUNT: $0. ORIGINATORS: American Business Credit, Inc., HomeAmerican Credit, Inc., d/b/a Upland Mortgage and American Business Mortgage Services, Inc. Overcollateralization Deficit: With respect to any Distribution Date, the amount, if any, by which (i) the aggregate Certificate Principal Balance of the Offered Certificates as of such Distribution Date (after taking into account the distribution of the Principal Distribution Amount on such Distribution Date, except for any portion thereof in respect of the Overcollateralization Deficit) exceeds (ii) the Current Pool Principal Balance for such Distribution Date. OVERCOLLATERALIZATION INCREASE AMOUNT: With respect to any Distribution Date, the lesser of (x) the Excess Interest for such Distribution Date and (y) the Specified Overcollateralization Amount for such Distribution Date, minus the Overcollateralized Amount immediately prior to such Distribution Date. OVERCOLLATERALIZATION REDUCTION AMOUNT: With respect to any Distribution Date, an amount equal to the lesser of (a) the Excess Overcollateralized Amount for such Distribution Date and (b) the Principal Distribution Amount for such Distribution Date (without regard to clause (b)(10) of the definition of Principal Distribution Amount). 24

OVERCOLLATERALIZED AMOUNT: With respect to any Distribution Date, the excess, if any, of (a) the Current Pool Principal Balance for that Distribution Date, over (b) the aggregate Certificate Principal Balance of the Offered Certificates as of such Distribution Date (after taking into account the distribution of the Principal Distribution Amount on such Distribution Date, except for any portion thereof related to any Overcollateralization Increase Amount). OVERFUNDED INTEREST AMOUNT: With respect to each Subsequent Transfer Date, if any, occurring in the first calendar month of the Pre-Funding Period, if any, the excess, if any, of (i) the amount on deposit in the Capitalized Interest Account, over (ii) three-months' interest calculated at the Adjusted Pass-Through Rate on the Pre-Funding Amount (net of any Pre-Funding Earnings) immediately following such Subsequent Transfer Date (disregarding any amount applied from the Pre-Funding Account to a Subsequent Mortgage Loan that does not have a Due Date in such month). With respect to each Subsequent Transfer Date, if any, occurring in the second calendar month of the PreFunding Period, if any, the excess of (i) the amount on deposit in the Capitalized Interest Account, over (ii) two-month's interest calculated at the Adjusted Pass-Through Rate on the Pre-Funding Amount (net of any Pre-Funding Earnings) immediately following such Subsequent Transfer Date (disregarding any amount applied from the Pre-Funding Account to a Subsequent Mortgage Loan that does not have a Due Date in such month). With respect to each Subsequent Transfer Date, if any, occurring in the third calendar month of the Pre-Funding

OVERCOLLATERALIZED AMOUNT: With respect to any Distribution Date, the excess, if any, of (a) the Current Pool Principal Balance for that Distribution Date, over (b) the aggregate Certificate Principal Balance of the Offered Certificates as of such Distribution Date (after taking into account the distribution of the Principal Distribution Amount on such Distribution Date, except for any portion thereof related to any Overcollateralization Increase Amount). OVERFUNDED INTEREST AMOUNT: With respect to each Subsequent Transfer Date, if any, occurring in the first calendar month of the Pre-Funding Period, if any, the excess, if any, of (i) the amount on deposit in the Capitalized Interest Account, over (ii) three-months' interest calculated at the Adjusted Pass-Through Rate on the Pre-Funding Amount (net of any Pre-Funding Earnings) immediately following such Subsequent Transfer Date (disregarding any amount applied from the Pre-Funding Account to a Subsequent Mortgage Loan that does not have a Due Date in such month). With respect to each Subsequent Transfer Date, if any, occurring in the second calendar month of the PreFunding Period, if any, the excess of (i) the amount on deposit in the Capitalized Interest Account, over (ii) two-month's interest calculated at the Adjusted Pass-Through Rate on the Pre-Funding Amount (net of any Pre-Funding Earnings) immediately following such Subsequent Transfer Date (disregarding any amount applied from the Pre-Funding Account to a Subsequent Mortgage Loan that does not have a Due Date in such month). With respect to each Subsequent Transfer Date, if any, occurring in the third calendar month of the Pre-Funding Period, if any, the excess of (i) the amount on deposit in the Capitalized Interest Account, over (ii) one-month's interest calculated at the Adjusted Pass-Through Rate on the Pre-Funding Amount (net of any Pre-Funding Earnings) immediately following such Subsequent Transfer Date (disregarding any amount applied from the Pre-Funding Account to a Subsequent Mortgage Loan that does not have a Due Date in such month). OWNER-OCCUPIED MORTGAGED PROPERTY: A Residential Dwelling as to which (a) the related Mortgagor represented an intent to occupy as such Mortgagor's primary, secondary or vacation residence at the origination of the Mortgage Loan, and (b) the Unaffiliated Seller has no actual knowledge that such Residential Dwelling is not so occupied. OWNERSHIP INTEREST: As to any Certificate, any ownership or security interest in such Certificate, including any interest in such Certificate as the Holder thereof and any other interest therein, whether direct or indirect, legal or beneficial, as owner or as pledgee. PASS-THROUGH RATE: The Class A, Class A-IO and Class M Pass-Through Rate and, for the purposes of Section 2.07, the pass-through rate for any class of interests referenced in Section 2.07. PAYING AGENT: As defined in Section 6.05(a) hereof. PERCENTAGE INTEREST: With respect to any Offered Certificate, other than a Class A-IO Certificate, the portion evidenced by such Certificate, expressed as a percentage rounded to four decimal places, equal to a fraction the numerator of which is the denomination represented by such Certificate and the denominator of which is the Original Certificate Principal Balance of such Class. With respect to a Class A-IO, Class X, Class I or Class R Certificate, the portion evidenced thereby as stated on the face of such Certificate. 25

PERIODIC ADVANCE: The aggregate of the advances required to be made by the Servicer on any Servicer Remittance Date pursuant to Section 5.18 hereof, the amount of any such advances being equal to the sum of: (a) with respect to each Mortgage Loan that was Delinquent as of the close of business on the last day of the Due Period preceding the related Servicer Remittance Date, the product of (i) the Principal Balance of such Mortgage Loan and (ii) one-twelfth of the Mortgage Interest Rate for such Mortgage Loan net of the Servicing Fee; and (b) with respect to each REO Property which was acquired during or prior to the related Due Period and as to which an REO Disposition did not occur during the related Due Period, an amount equal to the excess, if any, of (i) interest on the Principal Balance of such REO Mortgage Loan at the Mortgage Interest Rate for such REO

PERIODIC ADVANCE: The aggregate of the advances required to be made by the Servicer on any Servicer Remittance Date pursuant to Section 5.18 hereof, the amount of any such advances being equal to the sum of: (a) with respect to each Mortgage Loan that was Delinquent as of the close of business on the last day of the Due Period preceding the related Servicer Remittance Date, the product of (i) the Principal Balance of such Mortgage Loan and (ii) one-twelfth of the Mortgage Interest Rate for such Mortgage Loan net of the Servicing Fee; and (b) with respect to each REO Property which was acquired during or prior to the related Due Period and as to which an REO Disposition did not occur during the related Due Period, an amount equal to the excess, if any, of (i) interest on the Principal Balance of such REO Mortgage Loan at the Mortgage Interest Rate for such REO Mortgage Loan net of the Servicing Fee, for the most recently ended Due Period over (ii) the net income from the REO Property transferred to the Distribution Account for such Distribution Date; provided, however, that in each such case such advance has not been determined by the Servicer to be a Nonrecoverable Advance. PERMITTED INVESTMENTS: As used herein, Permitted Investments shall include the following: (i) obligations of, or guaranteed as to principal and interest by, the United States or any agency or instrumentality thereof when such obligations are backed by the full faith and credit of the United States; (ii) repurchase agreements on obligations specified in clause (i) maturing not more than three months from the date of acquisition thereof, provided that the unsecured obligations of the party agreeing to repurchase such obligations are at the time rated in one of the two highest rating categories by the Rating Agencies; (iii) certificates of deposit, time deposits and bankers' acceptances (which, in the case of bankers' acceptances, shall in no event have an original maturity of more than 365 days) of any U.S. depository institution or trust company, incorporated under the laws of the United States or any state; provided, that the debt obligations of such depository institution or trust company at the date of acquisition thereof have been rated in one of the two highest rating categories by the Rating Agencies; (iv) commercial paper (having original maturities of not more than 270 days) of any corporation incorporated under the laws of the United States or any state thereof which on the date of acquisition has been rated in the highest short-term rating category by the Rating Agencies; 26

(v) the JPMorgan Funds U.S. Government Money Market Fund, the JPMorgan Prime Money Market Fund and the JPMorgan Treasury Plus Fund, so long as any such fund is rated in the highest rating category by Moody's or S&P; provided, that each such Permitted Investment shall be a "permitted investment" within the meaning of Section 860G(a)(5) of the Code and that no instrument described hereunder shall evidence either the right to receive (x) only interest with respect to the obligations underlying such instrument or (y) both principal and interest payments derived from obligations underlying such instrument and the interest and principal payments with respect to such instrument provided a yield to maturity at par greater than 120% of the yield to maturity at par of the underlying obligations; provided, further, that no instrument described hereunder may: (x) be purchased at a price greater than par if such instrument may be prepaid or called at a price less than its purchase price prior to stated maturity; or (y) provide any voting right or substantially equivalent interest in the producer of such investment, whether directly or indirectly, through conversion or any other manner or method. or be disposed of prior to its maturity. PERMITTED TRANSFEREE: Any Person other than (a) the United States, any State or political subdivision thereof, or any agency or instrumentality of any of the foregoing, (b) a foreign government, international organization or any agency or instrumentality of either of the foregoing, (c) an organization (except certain farmers' cooperatives described in Section 521 of the Code) which is exempt from tax imposed by Chapter 1 of the Code (including the tax imposed by Section 511 of the Code on unrelated business taxable income) on any

(v) the JPMorgan Funds U.S. Government Money Market Fund, the JPMorgan Prime Money Market Fund and the JPMorgan Treasury Plus Fund, so long as any such fund is rated in the highest rating category by Moody's or S&P; provided, that each such Permitted Investment shall be a "permitted investment" within the meaning of Section 860G(a)(5) of the Code and that no instrument described hereunder shall evidence either the right to receive (x) only interest with respect to the obligations underlying such instrument or (y) both principal and interest payments derived from obligations underlying such instrument and the interest and principal payments with respect to such instrument provided a yield to maturity at par greater than 120% of the yield to maturity at par of the underlying obligations; provided, further, that no instrument described hereunder may: (x) be purchased at a price greater than par if such instrument may be prepaid or called at a price less than its purchase price prior to stated maturity; or (y) provide any voting right or substantially equivalent interest in the producer of such investment, whether directly or indirectly, through conversion or any other manner or method. or be disposed of prior to its maturity. PERMITTED TRANSFEREE: Any Person other than (a) the United States, any State or political subdivision thereof, or any agency or instrumentality of any of the foregoing, (b) a foreign government, international organization or any agency or instrumentality of either of the foregoing, (c) an organization (except certain farmers' cooperatives described in Section 521 of the Code) which is exempt from tax imposed by Chapter 1 of the Code (including the tax imposed by Section 511 of the Code on unrelated business taxable income) on any excess inclusions (as defined in Section 860E(c)(1) of the Code) with respect to any Class R Certificate, (d) rural electric and telephone cooperatives described in Section 1381(a)(2)(C) of the Code, (e) an "electing large partnership" within the meaning Section 775 of the Code and (f) any other Person so designated by the Trustee based upon an Opinion of Counsel to the Trustee and the Certificate Insurer that the transfer of an Ownership Interest in a Class R Certificate to such Person may cause either (i) any of the REMICs described in Section 2.07 hereof to fail to qualify as a REMIC at any time that the Offered Certificates or Class X Certificates are outstanding or (ii) the Trust Fund or any Person having an Ownership Interest in any Class of Certificates, other than such Person, to incur a liability for any federal tax imposed under the Code that would not otherwise be imposed but for the Transfer of an Ownership Interest in a Class R Certificate to such Person. The terms "United States," "State" and "international organization" shall have the meanings set forth in Section 7701 of the Code or successor provisions. A corporation will not be treated as an instrumentality of the United States or of any State or political subdivision thereof for these purposes if all of its activities are subject to tax and, with the exception of FHLMC, a majority of its board of directors is not selected by such governmental unit. PERSON: Any individual, corporation, partnership, joint venture, association, joint-stock company, trust, national banking association, unincorporated organization or government or any agency or political subdivision thereof. PLAN: As defined in Section 4.02(n). PRE-FUNDING ACCOUNT: The Pre-Funding Account, if any, established in accordance with Section 6.01 hereof and maintained by the Trustee. 27

PRE-FUNDING AMOUNT: With respect to any date, the amount, if any, on deposit in the Pre-Funding Account. PRE-FUNDING DISTRIBUTION DATES: Each Distribution Date occurring during the Pre-Funding Period, if any, and the Distribution Date immediately following the end of the Pre-Funding Period, if any. PRE-FUNDING EARNINGS: The actual investment earnings realized on amounts deposited in the Pre-Funding Account, if any. PRE-FUNDING PERIOD: If the Original Pre-Funded Amount is greater than zero, the period commencing on the Startup Day and ending on the earliest to occur of (i) the date on which the Pre-Funding Amount (net of any Pre-Funding Earnings) is less than $100,000, (ii) the date on which any Event of Default occurs and (iii) the close of business on May 31, 2003.

PRE-FUNDING AMOUNT: With respect to any date, the amount, if any, on deposit in the Pre-Funding Account. PRE-FUNDING DISTRIBUTION DATES: Each Distribution Date occurring during the Pre-Funding Period, if any, and the Distribution Date immediately following the end of the Pre-Funding Period, if any. PRE-FUNDING EARNINGS: The actual investment earnings realized on amounts deposited in the Pre-Funding Account, if any. PRE-FUNDING PERIOD: If the Original Pre-Funded Amount is greater than zero, the period commencing on the Startup Day and ending on the earliest to occur of (i) the date on which the Pre-Funding Amount (net of any Pre-Funding Earnings) is less than $100,000, (ii) the date on which any Event of Default occurs and (iii) the close of business on May 31, 2003. PREMIUM AMOUNT: The product of the Premium Percentage and the Certificate Principal Balance of the Class M Certificates for the related Distribution Date. PREMIUM PERCENTAGE: Has the meaning given in the Insurance and Indemnity Agreement. PREPAYMENT ASSUMPTION: A constant prepayment rate of 23% HEP for the Offered Certificates and Class X Certificates used solely for determining the accrual of original issue discount and market discount on the Certificates for federal income tax purposes. PREPAYMENT INTEREST SHORTFALL: With respect to any Distribution Date, for each Mortgage Loan that was the subject during the related Due Period of a Principal Prepayment in full, an amount equal to the excess, if any, of (a) 30 days' interest on the Principal Balance, prior to giving effect to a principal distribution for the related Due Period, of such Mortgage Loan at a per annum rate equal to (i) the Mortgage Interest Rate (or at such lower rate as may be in effect for such Mortgage Loan pursuant to application of the Civil Relief Act, any Deficient Valuation and/or any Debt Service Reduction) minus (ii) the rate at which the Servicing Fee is calculated over (b) the amount of interest actually remitted by the Mortgagor in connection with such Principal Prepayment less the Servicing Fee for such Mortgage Loan in such month. PRINCIPAL BALANCE: As to any Mortgage Loan and any date of determination, the outstanding principal balance of such Mortgage Loan as of such date of determination after giving effect to Principal Prepayments received prior to the end of the related Due Period and Deficient Valuations incurred prior to the related Due Date. The Principal Balance of a Mortgage Loan which becomes a Liquidated Mortgage Loan on or prior to the related Due Date shall be zero (except for purposes of calculating the Loan Repurchase Price of such Mortgage Loan). 28

PRINCIPAL DISTRIBUTION AMOUNT: With respect to any Distribution Date, will be the lesser of: (a) the excess of (x) the sum, as of such Distribution Date, of (1) the Net Available Amount and (2) any Class M Insured Payment (to be applied to the Class M Principal Distribution Amount only) over (y) the Interest Distribution Amount for such Distribution Date; and (b) the sum, without duplication, of: (1) all principal in respect of the Mortgage Loans actually collected during the related Due Period; (2) the Principal Balance of each Mortgage Loan that either was repurchased by the Unaffiliated Seller or purchased by the Servicer on the related Servicer Remittance Date, to the extent such Principal Balance is actually received by the Trustee; (3) any Substitution Adjustments delivered by the Unaffiliated Seller on the related Servicer Remittance Date in connection with a substitution of a Mortgage Loan, to the extent such Substitution Adjustments are actually

PRINCIPAL DISTRIBUTION AMOUNT: With respect to any Distribution Date, will be the lesser of: (a) the excess of (x) the sum, as of such Distribution Date, of (1) the Net Available Amount and (2) any Class M Insured Payment (to be applied to the Class M Principal Distribution Amount only) over (y) the Interest Distribution Amount for such Distribution Date; and (b) the sum, without duplication, of: (1) all principal in respect of the Mortgage Loans actually collected during the related Due Period; (2) the Principal Balance of each Mortgage Loan that either was repurchased by the Unaffiliated Seller or purchased by the Servicer on the related Servicer Remittance Date, to the extent such Principal Balance is actually received by the Trustee; (3) any Substitution Adjustments delivered by the Unaffiliated Seller on the related Servicer Remittance Date in connection with a substitution of a Mortgage Loan, to the extent such Substitution Adjustments are actually received by the Trustee; (4) the Net Liquidation Proceeds actually collected by the Servicer on all Mortgage Loans during the related Due Period (to the extent such Net Liquidation Proceeds relate to principal); (5) on the Pre-Funding Distribution Dates, if any, moneys released from the Pre-Funding Account pursuant to Section 6.01(g); (6) the proceeds received by the Trustee upon the exercise by the Servicer of its option to repurchase the Mortgage Loans on or after the Clean-up Call Date (to the extent that such proceeds relate to principal); (7) the amount of any Overcollateralization Deficit for such Distribution Date; (8) the proceeds received by the Trustee on any termination of the Trust (to the extent such proceeds relate to principal); (9) the amount of any Overcollateralization Increase Amount for such Distribution Date, to the extent of any Excess Interest available for such purpose; and (10) if the Certificate Insurer so elects in its sole discretion, an amount of principal (including Liquidated Loan Losses) that would have been distributed pursuant to clauses (1) through (9) above if sufficient funds were available therefore; minus 29

(11) the amount of any Overcollateralization Reduction Amount for such Distribution Date. PRINCIPAL PREPAYMENT: Any payment of principal made by the Mortgagor on a Mortgage Loan which is received in advance of its scheduled Due Date. PROSPECTUS SUPPLEMENT: The Prospectus Supplement dated March 26, 2003 relating to the Offered Certificates filed with the Commission in connection with the Registration Statement heretofore filed or to be filed with the Commission pursuant to Rule 424(b)(2) or 424(b)(5). QUALIFIED APPRAISER: An appraiser, duly appointed by the Unaffiliated Seller, who had no interest, direct or indirect, in the Mortgaged Property or in any loan made on the security thereof, and whose compensation is not affected by the approval or disapproval of the Mortgage Loan, and such appraiser and the appraisal made by such appraiser both satisfy the requirements of Title XI of the Federal Institutions Reform, Recovery and Enforcement Act of 1989 and the regulations promulgated thereunder, all as in effect on the date the Mortgage

(11) the amount of any Overcollateralization Reduction Amount for such Distribution Date. PRINCIPAL PREPAYMENT: Any payment of principal made by the Mortgagor on a Mortgage Loan which is received in advance of its scheduled Due Date. PROSPECTUS SUPPLEMENT: The Prospectus Supplement dated March 26, 2003 relating to the Offered Certificates filed with the Commission in connection with the Registration Statement heretofore filed or to be filed with the Commission pursuant to Rule 424(b)(2) or 424(b)(5). QUALIFIED APPRAISER: An appraiser, duly appointed by the Unaffiliated Seller, who had no interest, direct or indirect, in the Mortgaged Property or in any loan made on the security thereof, and whose compensation is not affected by the approval or disapproval of the Mortgage Loan, and such appraiser and the appraisal made by such appraiser both satisfy the requirements of Title XI of the Federal Institutions Reform, Recovery and Enforcement Act of 1989 and the regulations promulgated thereunder, all as in effect on the date the Mortgage Loan was originated. QUALIFIED MORTGAGE: "Qualified Mortgage" shall have the meaning set forth from time to time in the definition thereof at Section 860G(a)(3) of the Code (or any successor statute thereto). QUALIFIED SUBSTITUTE MORTGAGE LOAN: A mortgage loan or mortgage loans substituted for a Deleted Mortgage Loan pursuant to Section 2.06(c) or 3.03 hereof, which (a) has or have an interest rate at least equal to that applicable to the Deleted Mortgage Loan, (b) relates or relate to a detached one-family residence or to the same type of Residential Dwelling or Business Purpose Property, or any combination thereof, as the Deleted Mortgage Loan and in each case has or have the same or a better lien priority as the Deleted Mortgage Loan and has the same occupancy status or is an Owner Occupied Mortgaged Property, (c) matures or mature no later than (and not more than one year earlier than) the Deleted Mortgage Loan, (d) has or have a Loan-toValue Ratio at the time of such substitution no higher than the Loan-to-Value Ratio of the Deleted Mortgage Loan, (e) has or have a Combined Loan-to-Value Ratio or Combined Loan-to-Value Ratios at the time of such substitution no higher than the Combined Loan-to-Value Ratio of the Deleted Mortgage Loan, (f) has or have a Principal Balance or Principal Balances (after application of all payments received on or prior to the date of substitution) not substantially less and not more than the Principal Balance of the Deleted Mortgage Loan as of such date, (g) satisfies or satisfy the criteria set forth from time to time in the definition of "qualified replacement mortgage" at Section 860G(a)(4) of the Code (or any successor statute thereto), and (h) complies or comply as of the date of substitution with each representation and warranty set forth in Sections 3.01, 3.02 and 3.03 of the Unaffiliated Seller's Agreement. RATING AGENCY: S&P, Moody's or Fitch. 30

RATING AGENCY CONDITION: With respect to any action, written confirmation from the Rating Agencies that such action will not result in the withdrawal, downgrade or qualification of the then-current rating (including, in the case of the Class M Certificates, the rating of such Certificates without giving effect to the Certificate Insurance Policy) of any of the Offered Certificates. RECORD DATE: With respect to (i) the first Distribution Date, for all of the Offered Certificates, the Closing Date and (ii) thereafter, with respect to (x) the Class A Certificates and Class A-IO Certificates, the last Business Day of the calendar month immediately preceding the month in which a Distribution Date occurs and (y) the Class M Certificates, the Business Day preceding the applicable Distribution Date. REFERENCE BANKS: Citibank, Barclay's Bank PLC, The Bank of Tokyo-Mitsubishi and National Westminster Bank PLC; provided, that if any of the foregoing banks are not suitable to serve as a Reference Bank, then any leading banks which are engaged in transactions in Eurodollar deposits in the international Eurocurrency market whose quotations appear on the Telerate Page 3750 on the relevant LIBOR Determination Date.

RATING AGENCY CONDITION: With respect to any action, written confirmation from the Rating Agencies that such action will not result in the withdrawal, downgrade or qualification of the then-current rating (including, in the case of the Class M Certificates, the rating of such Certificates without giving effect to the Certificate Insurance Policy) of any of the Offered Certificates. RECORD DATE: With respect to (i) the first Distribution Date, for all of the Offered Certificates, the Closing Date and (ii) thereafter, with respect to (x) the Class A Certificates and Class A-IO Certificates, the last Business Day of the calendar month immediately preceding the month in which a Distribution Date occurs and (y) the Class M Certificates, the Business Day preceding the applicable Distribution Date. REFERENCE BANKS: Citibank, Barclay's Bank PLC, The Bank of Tokyo-Mitsubishi and National Westminster Bank PLC; provided, that if any of the foregoing banks are not suitable to serve as a Reference Bank, then any leading banks which are engaged in transactions in Eurodollar deposits in the international Eurocurrency market whose quotations appear on the Telerate Page 3750 on the relevant LIBOR Determination Date. REGULAR INTEREST: As defined in Section 2.07 herein. REIMBURSEMENT AMOUNT: As of any Distribution Date, the sum of (a)(i) all Class M Insured Payments paid by the Certificate Insurer pursuant to the Certificate Insurance Policy but for which the Certificate Insurer has not been reimbursed prior to such Distribution Date pursuant to Sections 6.05(a) hereof plus (ii) interest accrued thereon, calculated at the Late Payment Rate from the date the Trustee (or other party entitled thereto, in case of a Class M Preference Amount) received the related Class M Insured Payments or the date such Class M Insured Payments were made and (b)(i) any other amounts then due and owing to the Certificate Insurer hereunder and under the Insurance and Indemnity Agreement but for which the Certificate Insurer has not been reimbursed prior to such Distribution Date, as certified to the Trustee by the Certificate Insurer plus (ii) interest on such amounts at the Late Payment Rate. The Certificate Insurer shall notify the Trustee, the Servicer and the Depositor of the amount of any Reimbursement Amount. REMIC: A "real estate mortgage investment conduit" within the meaning of Section 860D of the Code. REMIC I: As described in Section 2.07 herein. REMIC I REGULAR INTERESTS: As described in Section 2.07 herein. REMIC II: As described in Section 2.07 herein. REMIC II NET WAC CAP: As described in Section 2.07 herein. REMIC II REGULAR INTERESTS: As described in Section 2.07 herein. REMIC III: As described in Section 2.07 herein. 31

REMIC III NET WAC CAP: As described in Section 2.07 herein. REMIC III REGULAR INTERESTS: As described in Section 2.07 herein. REMIC PROVISIONS: Provisions of the federal income tax law relating to real estate mortgage investment conduits, which appear at Sections 860A through 860G of Subchapter M of Chapter 1 of the Code, and related provisions, and temporary and final regulations promulgated thereunder and published rulings, notices and announcements, as the foregoing may be in effect from time to time. REMIC TRUST: The segregated pool of assets consisting of the Trust Fund; provided, however, that the PreFunding Account, if any, the Capitalized Interest Account, if any, the Net WAC Cap Carryover Fund and the Interest Rate Hedge Payment Fund shall not be part of the REMIC Trust.

REMIC III NET WAC CAP: As described in Section 2.07 herein. REMIC III REGULAR INTERESTS: As described in Section 2.07 herein. REMIC PROVISIONS: Provisions of the federal income tax law relating to real estate mortgage investment conduits, which appear at Sections 860A through 860G of Subchapter M of Chapter 1 of the Code, and related provisions, and temporary and final regulations promulgated thereunder and published rulings, notices and announcements, as the foregoing may be in effect from time to time. REMIC TRUST: The segregated pool of assets consisting of the Trust Fund; provided, however, that the PreFunding Account, if any, the Capitalized Interest Account, if any, the Net WAC Cap Carryover Fund and the Interest Rate Hedge Payment Fund shall not be part of the REMIC Trust. REO DISPOSITION: The final sale by the Servicer of a Mortgaged Property acquired by the Servicer in foreclosure or by deed-in-lieu of foreclosure. REO MORTGAGE LOAN: Any Mortgage Loan which is not a Liquidated Mortgage Loan and as to which the indebtedness evidenced by the related Mortgage Note is discharged and the related Mortgaged Property is held as part of the Trust Fund. REO PROCEEDS: Proceeds received in respect of any REO Mortgage Loan (including, without limitation, proceeds from the rental of the related Mortgaged Property). REO PROPERTY: A Mortgaged Property acquired by the Servicer in the name of the Trustee on behalf of the Certificateholders through foreclosure or deed-in-lieu of foreclosure following a default on the related Mortgage Loan. REPRESENTATION LETTER: Letters to, or agreements with, the Depository to effectuate a book entry system with respect to the Offered Certificates registered in the Certificate Register under the nominee name of the Depository. REPRESENTATIVE: Bear Stearns & Co. Inc., as the representative underwriter for the Underwriters listed on Schedule A to the Underwriting Agreement. REQUEST FOR RELEASE: A request for release in substantially the form attached as Exhibit K hereto. REQUIRED INFORMATION: With respect to each Mortgage Loan and any date of determination: (a) the name and address of the obligor; (b) the aggregate Principal Balance of the Mortgage Loan as of the end of the immediately preceding Due Period; (c) the maturity date; and (d) the Mortgage Interest Rate as of the end of the immediately preceding Due Period; provided, that the Servicer's obligation to furnish any portion of the Required Information to any Person shall not require the Servicer to fail to observe any applicable law prohibiting disclosure of information regarding the obligors. 32

RESERVE INTEREST RATE: The rate per annum that the Trustee determines to be either: (a) the arithmetic mean (rounded upwards if necessary to the nearest whole multiple of 1/16%) of the one-month U.S. dollar lending rates which New York City banks selected by the Trustee are quoting on the relevant LIBOR Determination Date to the principal London offices of leading banks in the London interbank market; or (b) in the event that the Trustee can determine no such arithmetic mean as described in clause (a), the lowest onemonth U.S. dollar lending rate which New York City banks selected by the Trustee are quoting on such LIBOR Determination Date to leading European banks. RESIDENTIAL DWELLING: A one- to four-family dwelling, a unit in a planned unit development, a unit in a condominium development, a townhouse or a manufactured housing unit which is non-mobile.

RESERVE INTEREST RATE: The rate per annum that the Trustee determines to be either: (a) the arithmetic mean (rounded upwards if necessary to the nearest whole multiple of 1/16%) of the one-month U.S. dollar lending rates which New York City banks selected by the Trustee are quoting on the relevant LIBOR Determination Date to the principal London offices of leading banks in the London interbank market; or (b) in the event that the Trustee can determine no such arithmetic mean as described in clause (a), the lowest onemonth U.S. dollar lending rate which New York City banks selected by the Trustee are quoting on such LIBOR Determination Date to leading European banks. RESIDENTIAL DWELLING: A one- to four-family dwelling, a unit in a planned unit development, a unit in a condominium development, a townhouse or a manufactured housing unit which is non-mobile. RESPONSIBLE OFFICER: When used with respect to the Trustee, the Collateral Agent and the Back-up Servicer, any officer assigned to the Corporate Trust Division (or any successor thereto), including any Vice President, Assistant Vice President, Trust Officer, any Assistant Secretary or any other officer of the Trustee customarily performing functions similar to those performed by any of the above designated officers and to whom, with respect to a particular matter, such matter is referred because of such officer's knowledge of and familiarity with the particular subject in each case having direct responsibility for the administration of this Agreement. When used with respect to the Unaffiliated Seller or the Servicer, the President or any Vice President, Assistant Vice President, or any Secretary or Assistant Secretary. RETAINED INTEREST: An interest in a pool of promissory notes, mortgage loans, or other financial assets which entitles the holder to receive excess cash flows derived from such assets after payments to senior holders of direct or indirect beneficial or other interests in such assets as well as expenses and other payments accorded priority in right or payment to such residual interest. ROLLING THREE MONTH DELINQUENCY RATE: For any Distribution Date, the percentage, equal to the average of the Delinquency Ratio for each of the three (1 or 2 in the case of the first three Distribution Dates, as the case may be) immediately preceding Due Periods. S&P: Standard & Poor's, a division of The McGraw-Hill Companies, Inc. or any successor thereto and if such corporation no longer for any reason performs the services of a securities rating agency, "S&P" shall be deemed to refer to any other nationally recognized statistical rating organization designated by the Certificate Insurer. SENIOR CERTIFICATES: The Class A and Class A-IO Certificates. SENIOR ENHANCEMENT PERCENTAGE: With respect to any Distribution Date, the percentage obtained by dividing (x) the sum of (i) the aggregate Certificate Principal Balance of the Subordinate Certificates and (ii) the Overcollateralized Amount (in each case after taking into account the distributions of the Principal Distribution Amount) by (y) the Current Pool Principal Balance for that Distribution Date. 33

SEPARATION EVENT: The occurrence of a Certificate Insurer Default. SERVICER: American Business Credit, Inc., a Pennsylvania corporation, or any successor appointed as herein provided. SERVICER REMITTANCE AMOUNT: With respect to any Servicer Remittance Date, an amount equal to the sum of (i) all collections of principal and interest on the Mortgage Loans (including Principal Prepayments, Net REO Proceeds and Net Liquidation Proceeds, if any) collected by the Servicer during the related Due Period, (ii) all Periodic Advances made by the Servicer with respect to interest payments due to be received on the Mortgage Loans on the related Due Date and (iii) any other amounts required to be placed in the Collection Account by the Servicer pursuant to this Agreement (including Insurance Proceeds), but excluding the following: (a) amounts received on particular Mortgage Loans as late payments of interest and respecting which the

SEPARATION EVENT: The occurrence of a Certificate Insurer Default. SERVICER: American Business Credit, Inc., a Pennsylvania corporation, or any successor appointed as herein provided. SERVICER REMITTANCE AMOUNT: With respect to any Servicer Remittance Date, an amount equal to the sum of (i) all collections of principal and interest on the Mortgage Loans (including Principal Prepayments, Net REO Proceeds and Net Liquidation Proceeds, if any) collected by the Servicer during the related Due Period, (ii) all Periodic Advances made by the Servicer with respect to interest payments due to be received on the Mortgage Loans on the related Due Date and (iii) any other amounts required to be placed in the Collection Account by the Servicer pursuant to this Agreement (including Insurance Proceeds), but excluding the following: (a) amounts received on particular Mortgage Loans as late payments of interest and respecting which the Servicer has previously made an unreimbursed Periodic Advance out of its own funds; (b) those portions of each payment of interest on a particular Mortgage Loan which represent the Servicing Fee; (c) that portion of Liquidation Proceeds and REO Proceeds to the extent of any unpaid Servicing Fee; (d) all income from Permitted Investments that is held in the Collection Account for the account of the Servicer; (e) all amounts in respect of late fees, assumption fees, prepayment fees and similar fees; (f) certain other amounts which are reimbursable to the Servicer, as provided in this Pooling and Servicing Agreement; and (g) Net Foreclosure Profits. SERVICER REMITTANCE DATE: With respect to any Distribution Date, the 10th day of the month in which such Distribution Date occurs, or if such 10th day is not a Business Day, the Business Day preceding such 10th day. SERVICER REMITTANCE REPORT: As defined in Section 6.07 hereof. 34

SERVICER TERMINATION LOSS TRIGGER EVENT: With respect to any Distribution Date, the event that occurs if the Cumulative Loss Percentage for such Distribution Date exceeds the following percentages with respect to the applicable Distribution Date specified below:
Distribution Date ---------------------------January 2006 - December 2006 January 2007 - December 2007 January 2008 - December 2008 January 2009 - December 2009 January 2010 and thereafter Loss Percentage -------------------------------------------------4.00% for the first month, plus an additional 1/12 of 1.75% for each month thereafter 5.75% for the first month, plus an additional 1/12 of 1.50% for each month thereafter 7.25% for the first month, plus an additional 1/12 of 1.00% for each month thereafter 8.25% for the first month, plus an additional 1/12 of 0.25% for each month thereafter 8.50%

SERVICING ADVANCES: All reasonable and customary "out-of-pocket" costs and expenses (including legal fees) incurred in the performance by the Servicer of its servicing obligations, including, but not limited to, the cost and expenses relating to (a) the preservation, restoration, inspection and protection of the Mortgaged Property, (b) any enforcement or judicial proceedings, including foreclosures, (c) the management and liquidation of the REO Property, including reasonable fees paid to any independent contractor in connection therewith, (d) compliance with the obligations under

SERVICER TERMINATION LOSS TRIGGER EVENT: With respect to any Distribution Date, the event that occurs if the Cumulative Loss Percentage for such Distribution Date exceeds the following percentages with respect to the applicable Distribution Date specified below:
Distribution Date ---------------------------January 2006 - December 2006 January 2007 - December 2007 January 2008 - December 2008 January 2009 - December 2009 January 2010 and thereafter Loss Percentage -------------------------------------------------4.00% for the first month, plus an additional 1/12 of 1.75% for each month thereafter 5.75% for the first month, plus an additional 1/12 of 1.50% for each month thereafter 7.25% for the first month, plus an additional 1/12 of 1.00% for each month thereafter 8.25% for the first month, plus an additional 1/12 of 0.25% for each month thereafter 8.50%

SERVICING ADVANCES: All reasonable and customary "out-of-pocket" costs and expenses (including legal fees) incurred in the performance by the Servicer of its servicing obligations, including, but not limited to, the cost and expenses relating to (a) the preservation, restoration, inspection and protection of the Mortgaged Property, (b) any enforcement or judicial proceedings, including foreclosures, (c) the management and liquidation of the REO Property, including reasonable fees paid to any independent contractor in connection therewith, (d) compliance with the obligations under Section 5.22, all of which reasonable and customary out-of-pocket costs and expenses are reimbursable to the Servicer to the extent provided in Sections 5.03 and 5.22. SERVICING COMPENSATION: The Servicing Fee and other amounts to which the Servicer is entitled pursuant to Section 5.08. SERVICING FEE: As to each Mortgage Loan, the annual fee payable to the Servicer, which is calculated as an amount equal to the product of (a) 0.50% per annum, and (b) the Principal Balance thereof (or, in the case of any successor Servicer, such other amount as the Certificate Insurer and such successor may agree upon in writing; provided, however, that if the Back-up Servicer is acting as successor Servicer in no event shall the Servicing Fee be less than the amount paid to the initial Servicer hereunder). Such fee shall be calculated and payable monthly only from the amounts received in respect of interest on such Mortgage Loan and shall be computed on the basis of the same principal amount and for the period respecting which any related interest payment on a Mortgage Loan is computed. The Servicing Fee includes any servicing fees owed or payable to any Subservicer. SERVICING OFFICER: Any officer of the Servicer involved in, or responsible for, the administration and servicing of the Mortgage Loans whose name and specimen signature appear on a list of servicing officers furnished to the Trustee and the Certificateholders by the Servicer on the Closing Date, as such list may from time to time be amended. 35

SPECIAL ADVANCE: As defined in Section 5.18(b) hereof. SPECIAL RESERVE ACCOUNT: The Eligible Account established in accordance with Section 6.13 hereof and maintained by the Trustee. SPECIFIED OVERCOLLATERALIZATION AMOUNT: With respect to any Distribution Date, (i) prior to the Stepdown Date 5.50% of the Maximum Pool Principal Balance or (ii) on or after the Stepdown Date 11.00% of the Current Pool Principal Balance for that Distribution Date; provided, that the Specified Overcollateralization Amount shall never be less than the OC Floor; provided, further, that on any Distribution Date on which a Trigger Event is in effect, the Specified Overcollateralization Amount shall be equal to 100.00% of the Current Pool Principal Balance for such Distribution Date. STARTUP DAY: The day designated as such pursuant to Section 2.07(g) hereof.

SPECIAL ADVANCE: As defined in Section 5.18(b) hereof. SPECIAL RESERVE ACCOUNT: The Eligible Account established in accordance with Section 6.13 hereof and maintained by the Trustee. SPECIFIED OVERCOLLATERALIZATION AMOUNT: With respect to any Distribution Date, (i) prior to the Stepdown Date 5.50% of the Maximum Pool Principal Balance or (ii) on or after the Stepdown Date 11.00% of the Current Pool Principal Balance for that Distribution Date; provided, that the Specified Overcollateralization Amount shall never be less than the OC Floor; provided, further, that on any Distribution Date on which a Trigger Event is in effect, the Specified Overcollateralization Amount shall be equal to 100.00% of the Current Pool Principal Balance for such Distribution Date. STARTUP DAY: The day designated as such pursuant to Section 2.07(g) hereof. STEPDOWN DATE: The earlier to occur of (i) the Distribution Date on which the aggregate Certificate Principal Balance of the Class A Certificates has been reduced to zero and (ii) the later to occur of (a) the Distribution Date in April 2006 and (b) the first Distribution Date on which the Current Pool Principal Balance (after giving effect to distributions on that Distribution Date) has been reduced to less than 50% of the Maximum Pool Principal Balance. SUBORDINATE CERTIFICATES: The Class M Certificates. SUBSERVICERS: HomeAmerican Credit, Inc., d/b/a Upland Mortgage, a Pennsylvania corporation, or its successor in interest and American Business Mortgage Services, Inc., a New Jersey corporation, or its successor in interest. SUBSEQUENT CUT-OFF DATE: With respect to any Subsequent Mortgage Loan, the date specified in the Addition Notice delivered in connection therewith, which date shall be the close of business on the last day of the month immediately preceding the month in which such Subsequent Mortgage Loan will be conveyed to the Trust or, if such Subsequent Mortgage Loan was originated, or otherwise required by an Originator after such day, the date of origination or acquisition of such Mortgage Loan. SUBSEQUENT MORTGAGE LOANS: The Mortgage Loans, if any, transferred and assigned to the Trust pursuant to Section 2.03 hereof. SUBSEQUENT TRANSFER: The transfer and assignment by the Depositor to the Trust of any Subsequent Mortgage Loans pursuant to the terms hereof. SUBSEQUENT TRANSFER DATE: The Business Day, if any, on which a Subsequent Transfer occurs. SUBSERVICING AGREEMENT: The agreement between the Servicer and the Subservicers relating to subservicing and/or administration of certain Mortgage Loans as provided in Section 5.13, a copy of which shall be delivered, along with any modifications thereto, to the Trustee and the Certificate Insurer. 36

SUBSTITUTION ADJUSTMENT: As to any date on which a substitution occurs pursuant to Sections 2.06 or 3.03 hereof, the amount (if any) by which the aggregate unpaid principal balance (after application of principal payments received on or before the date of substitution) of any Qualified Substitute Mortgage Loans as of the date of substitution, are less than the aggregate of the Principal Balances of the related Deleted Mortgage Loans together with 30 days' interest thereon at the Mortgage Interest Rate. SUPPLEMENTAL INTEREST TRUST: The trust established in accordance with Section 6.10(a) to hold (x) the Net WAC Cap Carryover Fund and the Interest Rate Hedge Payment Fund and (y) the Interest Rate Hedge Agreement. The Supplemental Interest Trust will not be an asset of any REMIC. TAX MATTERS PERSON: The Person or Persons appointed pursuant to Section 11.13 from time to time to

SUBSTITUTION ADJUSTMENT: As to any date on which a substitution occurs pursuant to Sections 2.06 or 3.03 hereof, the amount (if any) by which the aggregate unpaid principal balance (after application of principal payments received on or before the date of substitution) of any Qualified Substitute Mortgage Loans as of the date of substitution, are less than the aggregate of the Principal Balances of the related Deleted Mortgage Loans together with 30 days' interest thereon at the Mortgage Interest Rate. SUPPLEMENTAL INTEREST TRUST: The trust established in accordance with Section 6.10(a) to hold (x) the Net WAC Cap Carryover Fund and the Interest Rate Hedge Payment Fund and (y) the Interest Rate Hedge Agreement. The Supplemental Interest Trust will not be an asset of any REMIC. TAX MATTERS PERSON: The Person or Persons appointed pursuant to Section 11.13 from time to time to act as the "tax matters person" (within the meaning of the REMIC Provisions) for each of the REMICs created hereunder. TAX RETURN: The federal income tax return on Internal Revenue Service Form 1066, "U.S. Real Estate Mortgage Investment Conduit (REMIC) Income Tax Return," including Schedule Q thereto, Quarterly Notice to Residual Interest Holders of REMIC Taxable Income or Net Loss Allocation, or any successor forms, to be filed on behalf of each REMIC created hereunder due to its classification as a REMIC under the REMIC Provisions, together with any and all other information reports or returns that may be required to be furnished to the Certificateholders or filed with the Internal Revenue Service or any other governmental taxing authority under any applicable provision of federal, state or local tax laws. Telerate Page 3750: The display designated as page 3750 on the Telerate Service (or such other page as may replace the page 3750 on that service for the purpose of displaying London interbank offered rates of major banks). TRANSFER: Any direct or indirect transfer, sale, pledge, hypothecation or other form of assignment of any Ownership Interest in a Certificate. TRANSFER AFFIDAVIT AND AGREEMENT: As defined in Section 4.02(l)(ii). TRANSFEREE: Any Person who is acquiring by Transfer any Ownership Interest in a Certificate. TRANSFEROR: Any Person who is disposing by Transfer any Ownership Interest in a Certificate. TRIGGER EVENT: Either a Delinquency Trigger Event or Cumulative Loss Trigger Event. 37

TRUST: ABFS Mortgage Loan Trust 2003-1, the express trust created hereunder in Section 2.01(a). TRUST FUND: The segregated pool of assets subject hereto, constituting the trust created hereby and to be administered hereunder, consisting of: (i) such Mortgage Loans as from time to time are subject to this Agreement, together with the Mortgage Files relating thereto, and together with all principal collected and interest due and accruing thereon after the related Cut-Off Date, and any proceeds thereof; (ii) any REO Property, together with all collections thereon and proceeds thereof; (iii) the Trustee's rights with respect to the Mortgage Loans under all insurance policies required to be maintained pursuant to this Agreement and any proceeds thereof; any other security for such Mortgage Loan, including, without limitation, pledged equipment, inventory and working capital and assignments of rights and interests made by the related mortgagor; (v) the rights and remedies of the Trustee against any Person making any representation or warranty to the Trustee hereunder, to the extent provided herein; (vi) all rights of the Depositor under the Unaffiliated Seller's Agreement; (vii) each Account and such assets that are deposited therein from time to time and any investments thereof, together with any and all income, proceeds and payments with respect thereto; and (viii) all proceeds of the foregoing. TRUSTEE: JPMorgan Chase Bank, a New York banking corporation, or its successor-in-interest, or any successor trustee appointed as herein provided.

TRUST: ABFS Mortgage Loan Trust 2003-1, the express trust created hereunder in Section 2.01(a). TRUST FUND: The segregated pool of assets subject hereto, constituting the trust created hereby and to be administered hereunder, consisting of: (i) such Mortgage Loans as from time to time are subject to this Agreement, together with the Mortgage Files relating thereto, and together with all principal collected and interest due and accruing thereon after the related Cut-Off Date, and any proceeds thereof; (ii) any REO Property, together with all collections thereon and proceeds thereof; (iii) the Trustee's rights with respect to the Mortgage Loans under all insurance policies required to be maintained pursuant to this Agreement and any proceeds thereof; any other security for such Mortgage Loan, including, without limitation, pledged equipment, inventory and working capital and assignments of rights and interests made by the related mortgagor; (v) the rights and remedies of the Trustee against any Person making any representation or warranty to the Trustee hereunder, to the extent provided herein; (vi) all rights of the Depositor under the Unaffiliated Seller's Agreement; (vii) each Account and such assets that are deposited therein from time to time and any investments thereof, together with any and all income, proceeds and payments with respect thereto; and (viii) all proceeds of the foregoing. TRUSTEE: JPMorgan Chase Bank, a New York banking corporation, or its successor-in-interest, or any successor trustee appointed as herein provided. TRUSTEE FEE: As to any Distribution Date, the fee payable to the Trustee in respect of its services as Trustee that accrues at a monthly rate equal to one-twelfth of 0.00625% on the Principal Balance of each Mortgage Loan as of the immediately preceding Due Date. TRUSTEE'S MORTGAGE FILE: The documents delivered to the Trustee or its designated agent pursuant to Section 2.05. TRUSTEE'S REMITTANCE REPORT: As defined in Section 6.07. UNAFFILIATED SELLER: ABFS 2003-1, Inc. UNAFFILIATED SELLER'S AGREEMENT: The Unaffiliated Seller's Agreement, dated as of the date hereof, among the Unaffiliated Seller, the Originators and the Depositor relating to the sale of the Mortgage Loans from the Originators to the Unaffiliated Seller and from the Unaffiliated Seller to the Depositor. UNDERWRITERS: The Representative and Credit Suisse First Boston LLC. UNDERWRITING AGREEMENT: The Underwriting Agreement, dated as of March 27, 2003 between the Depositor and the Representative. UNITED STATES PERSON: A citizen or resident of the United States, a corporation, partnership or other entity created or organized in, or under the laws of, the United States, any state thereof or the District of Columbia, an estate whose income from sources without the United States is includible in gross income for United States federal income tax purposes regardless of its connection with the conduct of a trade or business within the United States or a trust if a court within the United States can exercise primary jurisdiction over its administration and at least one United States fiduciary has the authority to control all substantial decisions of the trust. 38

WAC EXCESS: The sum of the Net WAC Cap Carryover Amounts allocable to each of the Capped Certificates. 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 in this Article include the plural as well as the singular. (c) The words "herein," "hereof" and "hereunder" and other words of similar import refer to this Agreement as a

WAC EXCESS: The sum of the Net WAC Cap Carryover Amounts allocable to each of the Capped Certificates. 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 in this Article include the plural as well as the singular. (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 (other than with respect to the Mortgage Loans and the Class M Certificates) 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 the Class M Certificates shall be made on the basis of a 360-day year consisting of the actual number of days elapsed in the applicable Accrual Period. 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 distributions on the Certificates 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 2003) and thereafter, within 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 Trustee, the Depositor and the Certificate Insurer a certificate of a Servicing Officer specifying the days on which banking institutions in the State of Pennsylvania are authorized or obligated by law, executive order or governmental decree to be closed. 39

ARTICLE II ESTABLISHMENT OF THE TRUST SALE AND CONVEYANCE OF THE TRUST FUND Section 2.01 Establishment of the Trust(a). (a) The Depositor does hereby establish, pursuant to the further provisions of this Agreement and the laws of the State of New York, an express trust to be known, for convenience, as "ABFS Mortgage Loan Trust 2003-1" and does hereby appoint JPMorgan Chase Bank as Trustee in accordance with the provisions of this Agreement. (b) The Trust may perform the following permitted activities: (i) hold receivables transferred from the Unaffiliated Seller and other passive assets of the Trust, which assets cannot be contrary to the status of the Trust as a qualified special purpose entity under existing accounting literature, including passive derivative financial instruments that pertain to beneficial interests issued or sold to parties other than the Unaffiliated Seller, its affiliates or agents; (ii) issue the Certificates and other interests in the Trust;

ARTICLE II ESTABLISHMENT OF THE TRUST SALE AND CONVEYANCE OF THE TRUST FUND Section 2.01 Establishment of the Trust(a). (a) The Depositor does hereby establish, pursuant to the further provisions of this Agreement and the laws of the State of New York, an express trust to be known, for convenience, as "ABFS Mortgage Loan Trust 2003-1" and does hereby appoint JPMorgan Chase Bank as Trustee in accordance with the provisions of this Agreement. (b) The Trust may perform the following permitted activities: (i) hold receivables transferred from the Unaffiliated Seller and other passive assets of the Trust, which assets cannot be contrary to the status of the Trust as a qualified special purpose entity under existing accounting literature, including passive derivative financial instruments that pertain to beneficial interests issued or sold to parties other than the Unaffiliated Seller, its affiliates or agents; (ii) issue the Certificates and other interests in the Trust; (iii) receive collections and make payments on such Certificates and interests in accordance with the terms of this Agreement; and (iv) engage in other activities that are necessary or incidental to accomplish these limited purposes, which activities cannot be contrary to the status of the Trust as a qualified special purpose entity under existing accounting literature. Section 2.02 Purchase and Sale of Initial Mortgage Loans. The Depositor does hereby sell, transfer, assign, set over and convey to the Trustee, on behalf of 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 Initial Mortgage Loans, including the outstanding principal as of and interest due and accruing after the Initial Cut-Off Date on such Mortgage Loans, and all other assets included or to be included in the Trust Fund for the benefit of the Certificateholders and the Certificate Insurer. 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 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 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. Section 2.03 Purchase and Sale of Subsequent Mortgage Loans. (a) Subject to the satisfaction of the conditions set forth in paragraph (b) below and provided that the Original Pre-Funded Amount is greater than zero, in consideration of the Trustee's delivery on the related Subsequent Transfer Dates, if any, upon the order of the Depositor of all or a portion of the balance of funds in the PreFunding Account (net of the Pre-Funding Earnings), if any, the Depositor shall on any Subsequent Transfer Date sell, transfer, assign, set over and convey to the Trustee without recourse but subject to terms and provisions of this Agreement, all of the right, title and interest of the Depositor in and to the Subsequent Mortgage Loans, including the outstanding principal of and interest due on such Subsequent Mortgage Loans, and all other assets included or to be included in the Trust Fund for the benefit of the Certificateholders and the Certificate Insurer. 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 Trustee, for the benefit of the Certificateholders and the Certificate Insurer, all of its rights under the Unaffiliated Seller's Agreement, including, without limitation, its right to exercise the remedies arising under Sections 2.06 and 3.05 of the Unaffiliated Seller's Agreement for defective documentation and for breaches of representations and warranties, agreements and covenants of the Unaffiliated Seller contained in Sections 3.01, 3.02 and 3.03 of the Unaffiliated Seller's Agreement. 40

The amount released from the Pre-Funding Account with respect to a transfer of Subsequent Mortgage Loans shall be one-hundred percent (100%) of the aggregate Principal Balance of the Subsequent Mortgage Loans so transferred as of the related Subsequent Cut-Off Date. (b) The Subsequent Mortgage Loans, if any, and the other property and rights related thereto described in paragraph (a) above shall be transferred by the Depositor to the Trust only upon the satisfaction of each of the following conditions on or prior to the related Subsequent Transfer Date: (i) the Unaffiliated Seller shall have provided the Trustee, the Rating Agencies and the Certificate Insurer with a timely Addition Notice, which shall include a Mortgage Loan Schedule, listing the Subsequent Mortgage Loans and shall provide any other information reasonably requested by any of the foregoing with respect to the Subsequent Mortgage Loans or required by this Agreement; (ii) the Unaffiliated Seller shall have deposited in the Collection Account all collections of (x) principal in respect of the Subsequent Mortgage Loans received after the related Subsequent Cut-Off Date and (y) interest due on the Subsequent Mortgage Loans after the related Subsequent Cut-Off Date; (iii) as of each Subsequent Transfer Date, the Depositor was not insolvent nor will be made insolvent by such transfer nor is the Depositor aware of any pending insolvency; (iv) such addition will not result in a material adverse tax consequence to the Trust or the Holders of the Certificates; (v) the Pre-Funding Period shall not have terminated; (vi) the Unaffiliated Seller shall have delivered to the Trustee and the Certificate Insurer an Officer's Certificate confirming the satisfaction of each condition precedent specified in this paragraph (b) and that the Subsequent Mortgage Loans comply with the provisions of this Section 2.03 and the terms of the Unaffiliated Seller's Agreement, including each of the representations and warranties made with respect thereto; 41

(vii) there shall have been delivered to the Certificate Insurer, the Rating Agencies and the Trustee, Independent Opinions of Counsel with respect to the transfer of the Subsequent Mortgage Loans substantially in the form of the Opinions of Counsel delivered to the Certificate Insurer and the Trustee on the Startup Day (bankruptcy, corporate and tax opinions); and (viii) the Originators, the Certificate Insurer, the Unaffiliated Seller and the Depositor shall have delivered to the Trustee an executed copy of a Subsequent Transfer Agreement, substantially in the form of Exhibit T hereto. (c) The obligation of the Trust to purchase the Subsequent Mortgage Loans on a Subsequent Transfer Date is subject to the requirements in Section 2.02 of the Unaffiliated Seller's Agreement. (d) In connection with the transfer and assignment of any Subsequent Mortgage Loans, the Depositor shall satisfy the document delivery requirements set forth in Section 2.05. (e) On each Subsequent Transfer Date, if any, upon written instruction from the Unaffiliated Seller, the Trustee shall withdraw from the Capitalized Interest Account and pay to the Unaffiliated Seller on such Subsequent Transfer Date the Overfunded Interest Amount for such Subsequent Transfer Date, as calculated by the Servicer with the cooperation of the Unaffiliated Seller and subject to the approval of the Certificate Insurer. (f) For any Subsequent Mortgage Loan that has a first Due Date that occurs later than the last day of the Due Period in which the Subsequent Mortgage Loan was sold to the Trust, on the Servicer Remittance Date following such Subsequent Transfer Date, the Servicer will deposit into the Distribution Account a Special Advance in the amount of 30 days' interest at the Mortgage Interest Rate, net of the Servicing Fee, for the month in which the Subsequent Transfer Date occurs and any month thereafter until, but not including, the month in which the first Due Date occurs.

(vii) there shall have been delivered to the Certificate Insurer, the Rating Agencies and the Trustee, Independent Opinions of Counsel with respect to the transfer of the Subsequent Mortgage Loans substantially in the form of the Opinions of Counsel delivered to the Certificate Insurer and the Trustee on the Startup Day (bankruptcy, corporate and tax opinions); and (viii) the Originators, the Certificate Insurer, the Unaffiliated Seller and the Depositor shall have delivered to the Trustee an executed copy of a Subsequent Transfer Agreement, substantially in the form of Exhibit T hereto. (c) The obligation of the Trust to purchase the Subsequent Mortgage Loans on a Subsequent Transfer Date is subject to the requirements in Section 2.02 of the Unaffiliated Seller's Agreement. (d) In connection with the transfer and assignment of any Subsequent Mortgage Loans, the Depositor shall satisfy the document delivery requirements set forth in Section 2.05. (e) On each Subsequent Transfer Date, if any, upon written instruction from the Unaffiliated Seller, the Trustee shall withdraw from the Capitalized Interest Account and pay to the Unaffiliated Seller on such Subsequent Transfer Date the Overfunded Interest Amount for such Subsequent Transfer Date, as calculated by the Servicer with the cooperation of the Unaffiliated Seller and subject to the approval of the Certificate Insurer. (f) For any Subsequent Mortgage Loan that has a first Due Date that occurs later than the last day of the Due Period in which the Subsequent Mortgage Loan was sold to the Trust, on the Servicer Remittance Date following such Subsequent Transfer Date, the Servicer will deposit into the Distribution Account a Special Advance in the amount of 30 days' interest at the Mortgage Interest Rate, net of the Servicing Fee, for the month in which the Subsequent Transfer Date occurs and any month thereafter until, but not including, the month in which the first Due Date occurs. Section 2.04 Possession of Mortgage Files; Access to Mortgage Files. (a) Upon the issuance of the Certificates, the ownership of each Mortgage Note, the Mortgage and the contents of the related Mortgage File related to each Initial Mortgage Loan is vested, and on each Subsequent Transfer Date, if any, the ownership of each Mortgage Note, the Mortgage and the contents of the related Mortgage File related to each Subsequent Mortgage Loan will be vested in the Trustee for the benefit of the Certificateholders and the Certificate Insurer. (b) Pursuant to Section 2.05 of the Unaffiliated Seller's Agreement, the Depositor has delivered or caused to be delivered the Trustee's Mortgage File related to each Mortgage Loan to the Trustee. (c) The Collateral Agent, on behalf of the Trustee, will be the custodian or may, with the consent of the Certificate Insurer, enter into a custodial agreement pursuant to which the Trustee will appoint a custodian to hold the Mortgage Files in trust for the benefit of all present and future Certificateholders and the Certificate Insurer; provided, however, that the custodian so appointed shall satisfy the eligibility requirements for the Collateral Agent as described in Section 10.06 hereof, shall in no event be the Depositor or the Servicer or any Person known to a Responsible Officer of the Trustee to be an Affiliate of the Depositor or the Servicer and shall be approved by the Certificate Insurer. 42

(d) The Collateral Agent shall afford the Depositor, the Certificate Insurer, the Servicer and the Back-up Servicer reasonable access to all records and documentation regarding the Mortgage Loans relating to this Agreement, such access being afforded upon reasonable request and during normal business hours at the offices of the Collateral Agent at customary charges. Section 2.05 Delivery of Mortgage Loan Documents(a). (a) In connection with the transfer and assignment of the Mortgage Loans, the Depositor does hereby with respect to the Initial Mortgage Loans, and will, on or before each Subsequent Transfer Date, if any, with respect to Subsequent Mortgage Loans, deliver or cause to be delivered to the Collateral Agent, on behalf of the 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

(d) The Collateral Agent shall afford the Depositor, the Certificate Insurer, the Servicer and the Back-up Servicer reasonable access to all records and documentation regarding the Mortgage Loans relating to this Agreement, such access being afforded upon reasonable request and during normal business hours at the offices of the Collateral Agent at customary charges. Section 2.05 Delivery of Mortgage Loan Documents(a). (a) In connection with the transfer and assignment of the Mortgage Loans, the Depositor does hereby with respect to the Initial Mortgage Loans, and will, on or before each Subsequent Transfer Date, if any, with respect to Subsequent Mortgage Loans, deliver or cause to be delivered to the Collateral Agent, on behalf of the 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 original Mortgage with evidence of recording indicated thereon and the original recorded power of attorney or a copy thereof certified by the applicable recording office; (iii) the original recorded Assignment of Mortgage, or copy thereof certified by the applicable recording office, if any, showing a complete chain of assignment from the original mortgagee/secured party 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 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 Trustee prior to or concurrently with the execution and delivery of this Agreement (or, with respect to any Subsequent Mortgage Loans, prior to or on the Subsequent Transfer Date), due to a delay in connection with recording, the Depositor may: 43

(x) in lieu of delivering such original recorded Mortgage, deliver to the Collateral Agent on behalf of the 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 Trustee a copy of the Assignment of Mortgage certified by the related Originator. The Trustee shall promptly upon receipt thereof, with respect to each Mortgage Note described in (i) above and each Assignment of Mortgage described in (iv) above, endorse such Mortgage Note and Assignment of Mortgage as follows: "JPMorgan Chase Bank, as Trustee under the Pooling and Servicing Agreement dated as of March 1, 2003, ABFS Mortgage Loan Trust 2003-1." As promptly as practicable, but in any event within thirty (30) days from the Closing Date, or any Subsequent Transfer Date, as applicable, the related Originator shall cause to be recorded, at the related Originator's expense, in the appropriate public office for real property

(x) in lieu of delivering such original recorded Mortgage, deliver to the Collateral Agent on behalf of the 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 Trustee a copy of the Assignment of Mortgage certified by the related Originator. The Trustee shall promptly upon receipt thereof, with respect to each Mortgage Note described in (i) above and each Assignment of Mortgage described in (iv) above, endorse such Mortgage Note and Assignment of Mortgage as follows: "JPMorgan Chase Bank, as Trustee under the Pooling and Servicing Agreement dated as of March 1, 2003, ABFS Mortgage Loan Trust 2003-1." As promptly as practicable, but in any event within thirty (30) days from the Closing Date, or any Subsequent Transfer Date, as applicable, 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 Trustee. All original documents relating to the Mortgage Loans which are not delivered to the Trustee, as permitted by Section 2.05(a) 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 Trustee on behalf of the Certificateholders and the Certificate Insurer. (b) Within thirty (30) days following delivery of the Mortgage Files to the Collateral Agent on behalf of the 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 Trustee 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 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 Certificate Insurer, the Servicer, the Back-up Servicer and the Trustee, 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 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 Trustee, the Trustee 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 Trustee of the recorded assignment such recorded assignment shall become part of the Mortgage File. The Trustee shall notify the Servicer of any defect in such assignment based on such review. The Servicer shall have a period of 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 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 Trustee as its attorney-in-fact with full power and authority acting in its stead for the purpose of such preparation, execution and filing. 44

(c) It is intended that the conveyance of the Mortgage Loans and other property by the Depositor to the Trustee as provided in this Section 2.05 and Section 2.02 be, and be construed as, a sale of the Mortgage Loans and such other property by the Depositor to the Trustee for the benefit of the Certificateholders and the Certificate Insurer. 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 Trustee 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 Section shall be deemed to be a grant by the Depositor to the Trustee of a security interest in all of the Depositor's right, title and

(c) It is intended that the conveyance of the Mortgage Loans and other property by the Depositor to the Trustee as provided in this Section 2.05 and Section 2.02 be, and be construed as, a sale of the Mortgage Loans and such other property by the Depositor to the Trustee for the benefit of the Certificateholders and the Certificate Insurer. 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 Trustee 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 Section shall be deemed to be a grant by the Depositor to the Trustee of a security interest in all of the Depositor's right, title and interest in and to the Mortgage Loans, the Trust Fund 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 Trustee or its agent 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 Trustee for the purpose of perfecting such security interest under applicable law. The Depositor and the Trustee shall, to the extent consistent with this Agreement, take such actions as may be necessary to ensure that, if this Agreement were deemed to create a security interest in the Mortgage Loans, the Trust Fund 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. (d) 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 Trustee, are and shall be held by the Servicer in trust for the benefit of the Trustee on behalf of the Certificateholders and the Certificate Insurer. In the event that any such original document is required pursuant to the terms of this Section 2.05 to be a part of a Mortgage File, such document shall be delivered promptly to the 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 on behalf of the Trust shall mark conspicuously each original document not delivered to the Trustee, and the Unaffiliated Seller's master data processing records evidencing each Mortgage Loan with a legend, acceptable to the Trustee, 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 this Agreement. 45

(e) In connection with the execution of this Agreement, the Depositor shall deliver to the Trustee an executed copy of the Unaffiliated Seller's Agreement. Section 2.06 Acceptance by Trustee of the Trust Fund; Certain Substitutions; Certification by Collateral Agent. (a) The Trustee agrees to execute and deliver to the Depositor, the Back-up Servicer, the Servicer, the Certificate Insurer and the Unaffiliated Seller on or prior to the Closing Date an acknowledgement of receipt of the Certificate Insurance Policy, in the form attached as Exhibit R hereto, and the Collateral Agent agrees to execute and deliver to the Depositor, the Back-up Servicer, the Servicer, the Certificate Insurer and the Unaffiliated Seller, on or prior to the Closing Date or any Subsequent Transfer Date an acknowledgement of receipt of, with respect to each Mortgage Loan transferred on such date, the original Mortgage Note (with any exceptions noted), and the Trustee 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 Fund and delivered to the Trustee or the Collateral Agent on its behalf, as Trustee in trust upon and subject to the conditions set forth herein for the benefit of the Certificateholders and the Certificate Insurer. The Collateral Agent agrees, for the benefit of the Certificateholders and the Certificate Insurer, to review (or cause to be reviewed) each Trustee's Mortgage File within thirty (30) days after the Closing Date

(e) In connection with the execution of this Agreement, the Depositor shall deliver to the Trustee an executed copy of the Unaffiliated Seller's Agreement. Section 2.06 Acceptance by Trustee of the Trust Fund; Certain Substitutions; Certification by Collateral Agent. (a) The Trustee agrees to execute and deliver to the Depositor, the Back-up Servicer, the Servicer, the Certificate Insurer and the Unaffiliated Seller on or prior to the Closing Date an acknowledgement of receipt of the Certificate Insurance Policy, in the form attached as Exhibit R hereto, and the Collateral Agent agrees to execute and deliver to the Depositor, the Back-up Servicer, the Servicer, the Certificate Insurer and the Unaffiliated Seller, on or prior to the Closing Date or any Subsequent Transfer Date an acknowledgement of receipt of, with respect to each Mortgage Loan transferred on such date, the original Mortgage Note (with any exceptions noted), and the Trustee 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 Fund and delivered to the Trustee or the Collateral Agent on its behalf, as Trustee in trust upon and subject to the conditions set forth herein for the benefit of the Certificateholders and the Certificate Insurer. The Collateral Agent agrees, for the benefit of the Certificateholders and the Certificate Insurer, to review (or cause to be reviewed) each Trustee's Mortgage File within thirty (30) days after the Closing Date (with respect to the Initial Mortgage Loans), within thirty (30) days after receipt by the Collateral Agent, on behalf of the Trustee, thereof (with respect to Qualified Substitute Mortgage Loans) or any Subsequent Transfer Date (with respect to the Subsequent Mortgage Loans), as applicable, and to deliver to the Unaffiliated Seller, the Servicer, the Back-up Servicer, the Certificate Insurer and the Depositor a certification in the form attached hereto as Exhibit I (the "Initial Certification") certifying 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), and unless otherwise noted, (i) all documents required to be delivered to it pursuant to Section 2.05 hereof (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 Trustee's Mortgage File delivered on such date. The Collateral Agent, on behalf of the Trustee shall be under no duty or obligation to inspect, review or examine any such documents, instruments, certificates or other papers to determine that they are genuine, enforceable, or appropriate for the represented purpose or that they are other than what they purport to be on their face. 46

(b) Within ninety (90) days of the Closing Date, with respect to the Initial Mortgage Loans, and within ninety (90) days of any Subsequent Transfer Date, with respect to the Subsequent Mortgage Loans transferred on such date, the Collateral Agent shall deliver (or cause to be delivered) to the Servicer, the Back-up Servicer, the Unaffiliated Seller, the Depositor, the Rating Agencies and the Certificate Insurer a final certification in the form attached hereto as Exhibit J (the "Final Certification") certifying 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), and unless otherwise noted, (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 Trustee's Mortgage File delivered on such date. (c) If the Collateral Agent on behalf of the Trustee during the process of reviewing the Trustee's Mortgage Files finds any document constituting a part of a Trustee's Mortgage File which is not executed, has not been received, is unrelated to the Mortgage Loan identified in the 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 Trustee or the Collateral Agent, as applicable, shall promptly so notify the Servicer, the Back-up Servicer, the Certificate Insurer and the Unaffiliated Seller. In performing any such review, the Collateral Agent on behalf of the

(b) Within ninety (90) days of the Closing Date, with respect to the Initial Mortgage Loans, and within ninety (90) days of any Subsequent Transfer Date, with respect to the Subsequent Mortgage Loans transferred on such date, the Collateral Agent shall deliver (or cause to be delivered) to the Servicer, the Back-up Servicer, the Unaffiliated Seller, the Depositor, the Rating Agencies and the Certificate Insurer a final certification in the form attached hereto as Exhibit J (the "Final Certification") certifying 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), and unless otherwise noted, (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 Trustee's Mortgage File delivered on such date. (c) If the Collateral Agent on behalf of the Trustee during the process of reviewing the Trustee's Mortgage Files finds any document constituting a part of a Trustee's Mortgage File which is not executed, has not been received, is unrelated to the Mortgage Loan identified in the 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 Trustee or the Collateral Agent, as applicable, shall promptly so notify the Servicer, the Back-up Servicer, the Certificate Insurer and the Unaffiliated Seller. In performing any such review, the Collateral Agent on behalf of the 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 or the Trustee'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 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 Trustee. If, however, within sixty (60) days after the Collateral Agent or the Trustee's notice to it respecting such defect the Unaffiliated Seller has not caused to be remedied the defect and the defect materially and adversely affects the value of, or the interest of the Certificateholders in the related Mortgage Loan or the interest of the Certificate 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 Section 3.03 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 Interest Remittance Amount and the Principal Remittance Amount, 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. 47

(d) Upon receipt by the 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 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 M hereto), the Trustee shall release to the Servicer for release or cause the Collateral Agent to release to the Unaffiliated Seller the related 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.

(d) Upon receipt by the 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 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 M hereto), the Trustee shall release to the Servicer for release or cause the Collateral Agent to release to the Unaffiliated Seller the related 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 Trustee shall notify the Certificate Insurer if the Unaffiliated Seller fails to repurchase or substitute for a Mortgage Loan in accordance with the foregoing. Section 2.07 Designations under REMIC Provisions; Designation of Startup Day. (a) REMIC I will consist of all of the assets of the Trust Fund (other than the Pre-Funding Account, if any, the Capitalized Interest Account, if any, the Net WAC Cap Carryover Fund, the Special Reserve Account and the Interest Rate Hedge Payment Fund) and will be evidenced by the Class I-1 Interest and the Class Q-1 Interest (collectively, the "REMIC I Regular Interests") which will be uncertificated and will represent the "regular interests" in REMIC I. REMIC II will consist of the REMIC I Regular Interests and will be evidenced by the Class I-2 Interest, the Class AIO-2i, AIO-2ii, AIO-2iii, AIO-2iv, AIO-2v, AIO-2vi, AIO-2vii, AIO-2viii, AIO-2ix and AIO-2x Interests (collectively, the Class AIO-2 Interests) and the Class Q-2 Interest (collectively, the "REMIC II Regular Interests") which will be uncertificated and will represent the "regular interests" in REMIC II. REMIC III will consist of the REMIC II Regular Interests and will be evidenced by the Class I-3 Interest, the Class A-3 Interest, the Class AIO-3 Interest, the Class M1-3 Interest, the Class M2-3 Interest, the Class M3-3 Interest and the Class Q-3 Interest (collectively, the "REMIC III Regular Interests") which will be uncertificated and will represent the "regular interests" in REMIC III. The Class R-1 Interest, the Class R-2 Interest and the Class R-3 Interest will represent the sole class of "residual interest" in each of REMIC I, REMIC II and REMIC III, respectively. The Trustee will hold the REMIC I Regular Interests, the REMIC II Regular Interests and the REMIC III Regular Interests. The Master REMIC will consist of the REMIC III Regular Interests and will be evidenced by Class A (other than the Net WAC Cap Carryover Right of the Class A Certificates), Class A-IO, Class I, Class M-1, Class M-2, Class M-3 (for each of Class M-1, M-2 and M-3, other than the Net WAC Cap Carryover Right and the Interest Rate Hedge Payment Right of the Class M Certificates) and Class X Certificates (collectively, the "Master REMIC Regular Interests") which will represent the "regular interests" in the Master REMIC (also known as REMIC IV). The Class R-4 Interest will represent the sole class of "residual interest" in the Master REMIC. The Class R Certificates will represent the beneficial ownership of the Class R-1, R-2, R-3 and R-4 Interests. The Final Scheduled Maturity Date for each of the REMIC I Regular Interests, the REMIC II Regular Interests (other than Class I-2), the REMIC III Regular Interests (other than Class AIO-3 and Class I-3) and the Master REMIC Regular Interests (other than the Class A-IO Certificate and the Class I Certificate) shall be the Distribution Date in August, 2033. The Final Scheduled Maturity Date for the Class I, Class I-2 and Class I-3 Interests shall be the Distribution Date in September, 2005 and the Final Scheduled Maturity Date for the Class A-IO Certificate and Class AIO-3 Interest shall be the Distribution Date in September, 2005. 48

(b) The Master REMIC Regular Interests and the Class R-4 Interest shall have the initial principal balances and Pass-Through Rates set forth in the following table:
Class ---------------------Class A (1) Class A-IO Class M-1 (2) Class M-2 (2) Class M-3 (2) Class X Class I Class R/R-4 Initial Principal Balance ------------------------$387,000,000 (3) 25,875,000 23,625,000 13,500,000 $0(6) (3) (8) Pass-Through Rate ----------------(4) (9) (5) (5) (5) (7) (9) (8)

(1) The Class A Certificates represent two separate investments: (i) a regular interest in a REMIC (a "Regular Interest") represented by the Class A Certificates, without the Net WAC Cap Carryover Rights and (ii) the Net WAC Cap Carryover Rights. Only the Regular Interests will be treated as regular interests in the Master

(b) The Master REMIC Regular Interests and the Class R-4 Interest shall have the initial principal balances and Pass-Through Rates set forth in the following table:
Class ---------------------Class A (1) Class A-IO Class M-1 (2) Class M-2 (2) Class M-3 (2) Class X Class I Class R/R-4 Initial Principal Balance ------------------------$387,000,000 (3) 25,875,000 23,625,000 13,500,000 $0(6) (3) (8) Pass-Through Rate ----------------(4) (9) (5) (5) (5) (7) (9) (8)

(1) The Class A Certificates represent two separate investments: (i) a regular interest in a REMIC (a "Regular Interest") represented by the Class A Certificates, without the Net WAC Cap Carryover Rights and (ii) the Net WAC Cap Carryover Rights. Only the Regular Interests will be treated as regular interests in the Master REMIC. (2) The Class M Certificates represent five separate investments: (i) three Regular Interests represented by the Class M-1, Class M-2 and Class M-3 Components, without the Net WAC Cap Carryover Rights or Interest Rate Hedge Payment Rights, (ii) the Net WAC Cap Carryover Rights and (iii) the Interest Rate Hedge Payment Rights. In the event that separate Class M-1, Class M-2 and Class M-3 Certificates are issued, each such Class will represent three separate investments: (i) a Regular Interest represented by such Class, without the Net WAC Cap Carryover Rights or Interest Rate Hedge Payment Rights, (ii) the Net WAC Cap Carryover Rights and (iii) the Interest Rate Hedge Payment Rights. In each case, only the Regular Interests will be treated as regular interests in the Master REMIC. (3) On the first Distribution Date through the Distribution Date in September, 2005, the Class A-IO Certificates will have a notional balance equal to the notional balance of Class AIO-3, and for each Distribution Date thereafter, $0. On the first Distribution Date through the Distribution Date in September, 2005, the Class I Certificates will have a notional balance equal to the notational balance of Class I-3, and for each Distribution Date thereafter, $0. 49

(4) With respect to any Distribution Date prior to the Clean-up Call Date, the lesser of (1) 3.78% per annum and (2) the REMIC III Net WAC Cap for such Distribution Date. With respect to any Distribution Date after the Clean-up Call Date, the lesser of (1) 4.28% per annum and (2) the REMIC III Net WAC Cap for such Distribution Date. (5) With respect to any Distribution Date prior to the Clean-up Call Date, the lesser of (1) LIBOR plus 1.50 per annum, (2) the REMIC III Net WAC Cap for such Distribution Date and (3) prior to the termination of the Interest Rate Hedge Agreement, 5.50%. With respect to any Distribution Date after the Clean-up Call Date, the lesser of (1) LIBOR plus 2.25% per annum, (2) the REMIC III Net WAC Cap for such Distribution Date and (3) prior to the termination of the Interest Rate Hedge Agreement, 6.25%. (6) The Class X has an initial principal balance of $68, but will not earn interest on its principal balance. Any principal on the Class X Certificates will be paid after all other regular interests have been paid in full. The Class X Certificates have a notional balance, on which the Class X Certificates will earn interest, equal to the Aggregate Principal Balance of the Mortgage Loans. (7) The Pass-Through Rate of the Class X Certificates will be the excess of: (i) the REMIC III Net WAC Cap over (ii) the product of: (A) 10,000 and (B) the weighted average of the Pass-Through Rates on the REMIC III Regular Interests (other than the Class AIO-3 and I-3), where the Class Q-3 is subject to a cap equal to zero and the Class A-3, Class M1-3, Class M2-3 and Class M3-3 are each subject to a cap equal to the PassThrough Rate on its Corresponding Class. With respect to any Distribution Date, interest that so accrues on the

(4) With respect to any Distribution Date prior to the Clean-up Call Date, the lesser of (1) 3.78% per annum and (2) the REMIC III Net WAC Cap for such Distribution Date. With respect to any Distribution Date after the Clean-up Call Date, the lesser of (1) 4.28% per annum and (2) the REMIC III Net WAC Cap for such Distribution Date. (5) With respect to any Distribution Date prior to the Clean-up Call Date, the lesser of (1) LIBOR plus 1.50 per annum, (2) the REMIC III Net WAC Cap for such Distribution Date and (3) prior to the termination of the Interest Rate Hedge Agreement, 5.50%. With respect to any Distribution Date after the Clean-up Call Date, the lesser of (1) LIBOR plus 2.25% per annum, (2) the REMIC III Net WAC Cap for such Distribution Date and (3) prior to the termination of the Interest Rate Hedge Agreement, 6.25%. (6) The Class X has an initial principal balance of $68, but will not earn interest on its principal balance. Any principal on the Class X Certificates will be paid after all other regular interests have been paid in full. The Class X Certificates have a notional balance, on which the Class X Certificates will earn interest, equal to the Aggregate Principal Balance of the Mortgage Loans. (7) The Pass-Through Rate of the Class X Certificates will be the excess of: (i) the REMIC III Net WAC Cap over (ii) the product of: (A) 10,000 and (B) the weighted average of the Pass-Through Rates on the REMIC III Regular Interests (other than the Class AIO-3 and I-3), where the Class Q-3 is subject to a cap equal to zero and the Class A-3, Class M1-3, Class M2-3 and Class M3-3 are each subject to a cap equal to the PassThrough Rate on its Corresponding Class. With respect to any Distribution Date, interest that so accrues on the notional principal balance of the Class X Certificates shall be deferred in an amount equal to the Overcollateralization Increase Amount on such Distribution Date. Such deferred interest shall not itself bear interest. (8) The Class R Certificates will represent the beneficial ownership of the Class R-1, R-2, R-3 and R-4 Interests. The Class R-4 Interest does not have a principal balance or a Pass-Through Rate but is entitled to any remaining distributions of principal and interest after the Master REMIC Regular Interests have been paid in full. (9) On each Distribution Date up to and including the Distribution Date in September, 2005, a per annum rate equal to 4.00% and (ii) thereafter, a Pass-Through Rate equal to 0%. 50

(c) The REMIC III Regular Interests and the Class R-3 Interest shall have the initial principal balances, PassThrough Rates and Corresponding Classes of Certificates set forth in the following table:
REMIC Interests ----------Q-3 A-3 AIO-3 M1-3 M2-3 M3-3 I-3 R-3 Initial Principal Balance -----------------------$449,955,068 $38,700 (2) $2,587.50 $2,362.50 $1,350 $37,655,100 notional (5) (4) Corresponding Class of Master REMIC Interest -----------------N/A A A-IO M1 M2 M3 I N/A

Pass-Through Rate ------------------(1) (1) (3) (1) (1) (1) (3) (4)

(1) On any Distribution Date, a Pass-Through Rate equal to the REMIC III Net WAC Cap. (2) The Class AIO-3 will have a notional balance equal to (a) on the first Distribution Date through the Distribution Date in June 2003, the sum of the principal balances of Class AIO-2i, AIO-2ii, AIO-2iii, AIO-2iv, AIO-2v, AIO-2vi, AIO-2vii, AIO-2viii, AIO-2ix and AIO-2x; (b) from the Distribution Date in July 2003 through the Distribution Date in September 2003, the sum of the principal balances of AIO-2ii, AIO-2iii, AIO2iv, AIO-2v, AIO-2vi, AIO-2vii, AIO-2viii, AIO-2ix and AIO-2x; (c) from the Distribution Date in October 2003 through the Distribution Date in December 2003, the sum of the principal balances of AIO-2iii, AIO-2iv, AIO-2v, AIO-2vi, AIO-2vii, AIO-2viii, AIO-2ix and AIO-2x; (d) from the Distribution Date in January 2004

(c) The REMIC III Regular Interests and the Class R-3 Interest shall have the initial principal balances, PassThrough Rates and Corresponding Classes of Certificates set forth in the following table:
REMIC Interests ----------Q-3 A-3 AIO-3 M1-3 M2-3 M3-3 I-3 R-3 Initial Principal Balance -----------------------$449,955,068 $38,700 (2) $2,587.50 $2,362.50 $1,350 $37,655,100 notional (5) (4) Corresponding Class of Master REMIC Interest -----------------N/A A A-IO M1 M2 M3 I N/A

Pass-Through Rate ------------------(1) (1) (3) (1) (1) (1) (3) (4)

(1) On any Distribution Date, a Pass-Through Rate equal to the REMIC III Net WAC Cap. (2) The Class AIO-3 will have a notional balance equal to (a) on the first Distribution Date through the Distribution Date in June 2003, the sum of the principal balances of Class AIO-2i, AIO-2ii, AIO-2iii, AIO-2iv, AIO-2v, AIO-2vi, AIO-2vii, AIO-2viii, AIO-2ix and AIO-2x; (b) from the Distribution Date in July 2003 through the Distribution Date in September 2003, the sum of the principal balances of AIO-2ii, AIO-2iii, AIO2iv, AIO-2v, AIO-2vi, AIO-2vii, AIO-2viii, AIO-2ix and AIO-2x; (c) from the Distribution Date in October 2003 through the Distribution Date in December 2003, the sum of the principal balances of AIO-2iii, AIO-2iv, AIO-2v, AIO-2vi, AIO-2vii, AIO-2viii, AIO-2ix and AIO-2x; (d) from the Distribution Date in January 2004 through the Distribution Date in March 2004, the sum of the principal balances of AIO-2iv, AIO-2v, AIO-2vi, AIO-2vii, AIO-2viii, AIO-2ix and AIO-2x; (e) from the Distribution Date in April 2004 through the Distribution Date in June 2004, the sum of the principal balances of Class AIO-2v, AIO-2vi, AIO-2vii, AIO-2viii, AIO-2ix and AIO-2x; (f) from the Distribution Date in July 2004 through the Distribution Date in September 2004, the sum of the principal balances of AIO-2vi, AIO-2vii, AIO-2viii, AIO-2ix and AIO-2x; (g) from the Distribution Date in October 2004 through the Distribution Date in December 2004, the sum of the principal balances of AIO-2vii, AIO-2viii, AIO-2ix and AIO-2x; (h) from the Distribution Date in January 2005 through the Distribution Date in March 2005, the sum of the principal balances of AIO-2viii, AIO-2ix and AIO-2x; (i) from the Distribution Date in April 2005 through the Distribution Date in June 2005, the sum of the principal balances of AIO-2ix and AIO-2x; (j) from the Distribution Date in July 2005 through the Distribution Date in September 2005, the principal balance of Class AIO-2x; and (k) on each Distribution Date thereafter, $0. 51

(3) On each Distribution Date up to and including the Distribution Date in September 2005, a per annum rate equal to 4.0% and (ii) thereafter, a Pass Through Rate equal to 0%. (4) The Class R-3 Interest does not have a principal balance or a Pass-Through Rate but is entitled to any remaining distributions of principal and interest after the REMIC II Regular Interests have been paid in full. (5) The Class I-3 notional balance is equal to the notional balance of Class I-2. On each Distribution Date, 0.01% of the increase in the Overcollateralized Amount will be payable as a reduction of the principal balances of Class A-3, Class M1-3, Class M2-3 and Class M3-3 (in the order and amount of such reduction to the principal balance of each classes' Corresponding Class) and will be accrued and added to the principal balance of the Class Q-3. The remaining 99.99% increase in the Overcollateralized Amount will be allocable to Class Q-3. On each Distribution Date, the Principal Remittance Amount shall be allocated 99.99% to Class Q-3 and 0.01% to Class A-3, Class M1-3, Class M2-3 and Class M3-3 (in the order and amount of reductions to the principal balances of each classes' Corresponding Class) until paid in full. Notwithstanding the above, payments allocated to the Class X Certificates that result in the reduction of the Overcollateralized Amount shall be allocated to the Class Q-3 Interest (until paid in full). Liquidated Loan Losses shall be applied so that after all distributions have been made on each Distribution Date the principal balances of the Class A-3, Class M1-3, M2-3 and M3-3

(3) On each Distribution Date up to and including the Distribution Date in September 2005, a per annum rate equal to 4.0% and (ii) thereafter, a Pass Through Rate equal to 0%. (4) The Class R-3 Interest does not have a principal balance or a Pass-Through Rate but is entitled to any remaining distributions of principal and interest after the REMIC II Regular Interests have been paid in full. (5) The Class I-3 notional balance is equal to the notional balance of Class I-2. On each Distribution Date, 0.01% of the increase in the Overcollateralized Amount will be payable as a reduction of the principal balances of Class A-3, Class M1-3, Class M2-3 and Class M3-3 (in the order and amount of such reduction to the principal balance of each classes' Corresponding Class) and will be accrued and added to the principal balance of the Class Q-3. The remaining 99.99% increase in the Overcollateralized Amount will be allocable to Class Q-3. On each Distribution Date, the Principal Remittance Amount shall be allocated 99.99% to Class Q-3 and 0.01% to Class A-3, Class M1-3, Class M2-3 and Class M3-3 (in the order and amount of reductions to the principal balances of each classes' Corresponding Class) until paid in full. Notwithstanding the above, payments allocated to the Class X Certificates that result in the reduction of the Overcollateralized Amount shall be allocated to the Class Q-3 Interest (until paid in full). Liquidated Loan Losses shall be applied so that after all distributions have been made on each Distribution Date the principal balances of the Class A-3, Class M1-3, M2-3 and M3-3 Interests are each equal to 0.01% of the principal balance of its Corresponding Class and the remainder shall be allocated to Class Q-3. (d) The REMIC II Regular Interests and the Class R-2 Interest shall have the initial principal balances, PassThrough Rates and Corresponding Classes of Certificates set forth in the following table: 52
Corresponding Class of Master REMIC Interest -----------------------N/A A-IO A-IO A-IO A-IO A-IO A-IO A-IO A-IO A-IO A-IO I N/A

REMIC Interests -------------Q-2 AIO-2i AIO-2ii AIO-2iii AIO-2iv AIO-2v AIO-2vi AIO-2vii AIO-2viii AIO-2ix AIO-2x I-2 R-2

Initial Principal Balance -------------------------$331,875,068 $562,500 $5,456,250 $6,131,250 $7,256,250 $6,356,250 $1,012,500 $19,012,500 $14,962,500 $8,437,500 $48,937,500 $37,655,100 notional (4) (2)

Pass-Through Rate -----------------(1) (1) (1) (1) (1) (1) (1) (1) (1) (1) (1) (3) (2)

(1) On any Distribution Date, a Pass-Through Rate equal to the REMIC II Net WAC Cap. (2) The Class R-2 Interest does not have a principal balance or a Pass-Through Rate but is entitled to any remaining distributions of principal and interest after the REMIC II Regular Interests have been paid in full. (3) On each Distribution Date up to and including the Distribution Date in September, 2005, a per annum rate equal to 4.00% and (ii) thereafter, a Pass-Through Rate equal to 0%. (4) The Class I-2 notional amount is equal to the Class I-1 principal balance. On each Distribution Date, the Principal Remittance Amount and losses will be allocated to Class Q-2 until the Class Q-2 is paid in full or eliminated by such losses; and thereafter, such amounts will be allocated to the Class AIO-2i, AIO-2ii, AIO-2iii, AIO-2iv, AIO-2v, AIO-2vi, AIO-2vii, AIO-2viii, AIO-2ix and AIO-2x in such order until each is paid in full or eliminated.

REMIC Interests -------------Q-2 AIO-2i AIO-2ii AIO-2iii AIO-2iv AIO-2v AIO-2vi AIO-2vii AIO-2viii AIO-2ix AIO-2x I-2 R-2

Initial Principal Balance -------------------------$331,875,068 $562,500 $5,456,250 $6,131,250 $7,256,250 $6,356,250 $1,012,500 $19,012,500 $14,962,500 $8,437,500 $48,937,500 $37,655,100 notional (4) (2)

Pass-Through Rate -----------------(1) (1) (1) (1) (1) (1) (1) (1) (1) (1) (1) (3) (2)

Corresponding Class of Master REMIC Interest -----------------------N/A A-IO A-IO A-IO A-IO A-IO A-IO A-IO A-IO A-IO A-IO I N/A

(1) On any Distribution Date, a Pass-Through Rate equal to the REMIC II Net WAC Cap. (2) The Class R-2 Interest does not have a principal balance or a Pass-Through Rate but is entitled to any remaining distributions of principal and interest after the REMIC II Regular Interests have been paid in full. (3) On each Distribution Date up to and including the Distribution Date in September, 2005, a per annum rate equal to 4.00% and (ii) thereafter, a Pass-Through Rate equal to 0%. (4) The Class I-2 notional amount is equal to the Class I-1 principal balance. On each Distribution Date, the Principal Remittance Amount and losses will be allocated to Class Q-2 until the Class Q-2 is paid in full or eliminated by such losses; and thereafter, such amounts will be allocated to the Class AIO-2i, AIO-2ii, AIO-2iii, AIO-2iv, AIO-2v, AIO-2vi, AIO-2vii, AIO-2viii, AIO-2ix and AIO-2x in such order until each is paid in full or eliminated. (e) The REMIC I Regular Interests and the Class R-1 Interest shall have the Initial Principal Balances and PassThrough Rates set forth in the following table: 53
REMIC Interests -----------I-1 Q-1 R-1 Initial Principal Balance ------------------$ 37,655,100 $412,344,968 (2) Pass-Through Rate ---------------(1) (1) (2)

(1) On any Distribution Date, a Pass-Through Rate equal to the Net Weighted Average Mortgage Interest Rate. (2) The Class R-1 Interest does not have a principal balance or a Pass-Through Rate but is entitled to any remaining distributions of principal and interest after the REMIC I Regular Interests have been paid in full. (f) The REMIC II Net WAC Cap equals the weighted average of Q-1 and I-1, where I-1 is first reduced by 4% through the Distribution Date in September, 2005. The REMIC III Net WAC Cap is the weighted average of the Q-2 and AIO-2 Interests where each of the AIO-2 Interests is reduced by 4% for the following periods: REMIC
Interests ----------------AIO-2x AIO-2ix AIO-2viii AIO-2vii AIO-2vi AIO-2v Period -------------------------through September, 2005 through June, 2005 through March, 2005 through December, 2004 through September, 2004 through June, 2004

REMIC Interests -----------I-1 Q-1 R-1

Initial Principal Balance ------------------$ 37,655,100 $412,344,968 (2)

Pass-Through Rate ---------------(1) (1) (2)

(1) On any Distribution Date, a Pass-Through Rate equal to the Net Weighted Average Mortgage Interest Rate. (2) The Class R-1 Interest does not have a principal balance or a Pass-Through Rate but is entitled to any remaining distributions of principal and interest after the REMIC I Regular Interests have been paid in full. (f) The REMIC II Net WAC Cap equals the weighted average of Q-1 and I-1, where I-1 is first reduced by 4% through the Distribution Date in September, 2005. The REMIC III Net WAC Cap is the weighted average of the Q-2 and AIO-2 Interests where each of the AIO-2 Interests is reduced by 4% for the following periods: REMIC
Interests ----------------AIO-2x AIO-2ix AIO-2viii AIO-2vii AIO-2vi AIO-2v AIO-2iv AIO-2iii AIO-2ii AIO-2i Period -------------------------through September, 2005 through June, 2005 through March, 2005 through December, 2004 through September, 2004 through June, 2004 through March, 2004 through December, 2003 through September, 2003 through June, 2003

(g) The Closing Date will be the "startup day" of each REMIC created hereunder within the meaning of Section 860G(a)(9) of the Code. Section 2.08 Execution of Certificates. The Trustee acknowledges the assignment to it of the Mortgage Loans and the delivery of the Trustee's Mortgage Files relating thereto to it and, concurrently with such delivery, has executed, authenticated and delivered to or upon the order of the Depositor, in exchange for the Mortgage Loans, the Trustee's Mortgage Files and the other assets included in the definition of Trust Fund, Certificates duly authenticated by the Trustee in Authorized Denominations evidencing the entire ownership of the Trust Fund. Section 2.09 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 as provided in the related Mortgage Note, and if not so provided, first to interest accrued at the Mortgage Interest Rate and then to principal. 54

Section 2.10 Grant of Security Interest. (a) Except with respect to the REMIC Provisions, it is the intention of the parties hereto that the conveyance by the Depositor of the Trust Fund to the Trustee on behalf of the Trust shall constitute a purchase and sale of such Trust Fund and not a loan. In the event, however, that a court of competent jurisdiction were to hold that the transaction evidenced hereby constitutes a loan and not a purchase and sale, it is the intention of the parties hereto that this Agreement shall constitute a security agreement under applicable law, and that the Depositor shall be deemed to have granted to the Trustee, on behalf of the Trust, a first priority perfected security interest in all of the Depositor's right, title and interest in, to and under the Trust Fund. The conveyance by the Depositor of the Trust Fund to the Trustee on behalf of the Trust shall not constitute and is not intended to result in an assumption by the Trustee or any Certificateholder of any obligation of the Unaffiliated Seller or any other Person in connection with the Trust Fund.

Section 2.10 Grant of Security Interest. (a) Except with respect to the REMIC Provisions, it is the intention of the parties hereto that the conveyance by the Depositor of the Trust Fund to the Trustee on behalf of the Trust shall constitute a purchase and sale of such Trust Fund and not a loan. In the event, however, that a court of competent jurisdiction were to hold that the transaction evidenced hereby constitutes a loan and not a purchase and sale, it is the intention of the parties hereto that this Agreement shall constitute a security agreement under applicable law, and that the Depositor shall be deemed to have granted to the Trustee, on behalf of the Trust, a first priority perfected security interest in all of the Depositor's right, title and interest in, to and under the Trust Fund. The conveyance by the Depositor of the Trust Fund to the Trustee on behalf of the Trust shall not constitute and is not intended to result in an assumption by the Trustee or any Certificateholder of any obligation of the Unaffiliated Seller or any other Person in connection with the Trust Fund. (b) The Depositor and the Servicer shall take no action inconsistent with the Trust's ownership of the Trust Fund 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 assets in the Trust Fund are held by the Trustee on behalf of the Trust. In addition, 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 Fund by stating that it is not the owner of such asset and that ownership of such Mortgage Loan or other Trust Fund asset is held by the Trustee on behalf of the Trust. Section 2.11 Further Action Evidencing Assignments. (a) The Servicer agrees that, from time to time, at its expense, it shall cause the Unaffiliated Seller (and the Depositor on behalf of itself also agrees that it shall), promptly to execute and deliver all further instruments and documents, and take all further action, that may be necessary or appropriate, or that the Servicer, the Certificate Insurer, the Collateral Agent or the Trustee may reasonably request, in order to perfect, protect or more fully evidence the transfer of ownership of the Trust Fund or to enable the 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 Certificate Insurer, the Collateral Agent or the Trustee, 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 and the Trustee 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. ARTICLE III REPRESENTATIONS, WARRANTIES AND COVENANTS Section 3.01 Representations of the Servicer and the Unaffiliated Seller. The Servicer and the Unaffiliated Seller hereby represent and warrant to the Collateral Agent, the Trustee, the Depositor, the Back-up Servicer, the Certificate Insurer and the Certificateholders as of the Closing Date and during the term of this Agreement that: 55

(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 or under the Unaffiliated Seller's Agreement; (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

(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 or under the Unaffiliated Seller's Agreement; (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 Articles 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 Certificates, 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; 56

(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 and Indemnity Agreement or in connection with the transactions contemplated hereby, including, without limitation, the sale or placement of the Certificates, 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 the Unaffiliated Seller's Agreement is not subject to the bulk transfer or any similar statutory provisions in effect in any applicable jurisdiction;

(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 and Indemnity Agreement or in connection with the transactions contemplated hereby, including, without limitation, the sale or placement of the Certificates, 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 the Unaffiliated Seller's 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; (k) Immediately prior to the transfer and assignment by the Depositor to the Trustee, 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 Trustee. 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 Trustee, for the benefit of the Certificateholders and the Certificate Insurer, all right, title, and interest of the Depositor thereto as note holder and mortgagee or (ii) to grant to the Trustee, for the benefit of the Certificateholders and the Certificate Insurer, the security interest referred to in Section 2.10 hereof. The Mortgage has been duly assigned and the Mortgage Note has been duly endorsed. The Assignment of Mortgage delivered to the 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 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 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; 57

(l) Neither this Agreement nor any information, certificate of an officer, statement furnished in writing or report delivered to the Trustee by the Servicer in connection with the transactions contemplated hereby contains any untrue statement of a material fact; and (m) The Servicer covenants that its computer and other systems used in servicing the Mortgage Loans operate in a manner such that the Servicer can service the Mortgage Loans in accordance with the terms of this Agreement. 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 Trustee or to a custodian, as the case may be, and inure to the benefit of the Trustee and the Certificate Insurer. Upon discovery by the Unaffiliated Seller, the Depositor, the Servicer, the Back-up Servicer, any Subservicer, the Certificate Insurer or the Trustee of a breach of any of the representations and warranties contained in this Section which materially and adversely affects the value of the Mortgage Loans or the interest of the Trustee, the Certificate Insurer or the Certificateholders, 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. Section 3.02 Representations, Warranties and Covenants of the Depositor. The Depositor hereby represents,

(l) Neither this Agreement nor any information, certificate of an officer, statement furnished in writing or report delivered to the Trustee by the Servicer in connection with the transactions contemplated hereby contains any untrue statement of a material fact; and (m) The Servicer covenants that its computer and other systems used in servicing the Mortgage Loans operate in a manner such that the Servicer can service the Mortgage Loans in accordance with the terms of this Agreement. 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 Trustee or to a custodian, as the case may be, and inure to the benefit of the Trustee and the Certificate Insurer. Upon discovery by the Unaffiliated Seller, the Depositor, the Servicer, the Back-up Servicer, any Subservicer, the Certificate Insurer or the Trustee of a breach of any of the representations and warranties contained in this Section which materially and adversely affects the value of the Mortgage Loans or the interest of the Trustee, the Certificate Insurer or the Certificateholders, 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. Section 3.02 Representations, Warranties and Covenants of the Depositor. The Depositor hereby represents, warrants and covenants to the Collateral Agent, the Servicer, the Back-up Servicer, the Trustee, the Unaffiliated Seller, the Certificate Insurer and the Certificateholders 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, upon the due authorization, execution and delivery hereof by the other parties hereto, 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); 58

(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; (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

(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; (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; (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) The transfer, assignment, and conveyance of the Mortgage Loans by the Depositor pursuant to this Agreement is not subject to the bulk transfer or any similar statutory provisions in effect in any applicable jurisdiction; and (i) Immediately prior to the transfer and assignment by the Depositor to the Trustee, 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 Trustee. 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 Trustee, for the benefit of the Certificateholders and the Certificate Insurer, all right, title, and interest of the Depositor thereto as note holder and mortgagee or (ii) to grant to the Trustee, for the benefit of the Certificateholders and the Certificate Insurer, the security interest referred to in Section 2.10 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 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 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 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. The Depositor has not transferred the Mortgage Loans to the Trustee, for the benefit of the Certificateholders and the Certificate Insurer, with any intent to hinder, delay or defraud any of its creditors. 59

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 Trustee or to a custodian, as the case may be, and shall inure to the benefit of the Trustee and the Certificate Insurer. Upon discovery by the Unaffiliated Seller, the Depositor, the Servicer, the Back-up Servicer, any Subservicer, the Certificate Insurer or the Trustee of a breach of any of the representations and warranties contained in this

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 Trustee or to a custodian, as the case may be, and shall inure to the benefit of the Trustee and the Certificate Insurer. Upon discovery by the Unaffiliated Seller, the Depositor, the Servicer, the Back-up Servicer, any Subservicer, the Certificate Insurer or the Trustee of a breach of any of the representations and warranties contained in this Section which materially and adversely affects the value of the Mortgage Loans or the interest of the Trustee, the Certificate Insurer or the Certificateholders, 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. Section 3.03 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 delivery of the Certificates to the Certificateholders. 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, the Back-up Servicer, any Subservicer, the Trustee, the Certificate Insurer or any Certificateholder that the substance of such representation and warranty was inaccurate as of the Closing Date and such inaccuracy materially and adversely affects the value of the related Mortgage Loan or the interests of the Trustee or the Certificate 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, the Back-up Servicer, any Subservicer, the Certificate Insurer or the Trustee 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 Trustee, the Certificate Insurer or the Certificateholders, or which materially and adversely affects the interests of the Trustee, the Certificate Insurer or the Certificateholders in the related Mortgage Loan in the case of a representation and warranty relating to a particular Mortgage Loan (notwithstanding that such representation and warranty was made to the 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. Subject to the last paragraph of this Section 3.03, 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 60

Trust Fund (in which case it shall become a Deleted Mortgage Loan) and substitute one or more Qualified Substitute Mortgage Loans; provided, that such substitution is effected not later than the date which is two years after the Startup Day or at such later date, if the Trustee and the Certificate Insurer receive an Opinion of Counsel, by and at the cost of the Servicer, to the effect that such substitution will not cause (a) any federal tax to be imposed on the Trust Fund, including without limitation, any federal tax imposed on "prohibited transactions" under Section 860F(a)(1) of the Code or on "contributions after the startup date" under Section 860G(d)(1) of the code or (b) any REMIC to fail to qualify as a REMIC at any time that any Certificate is outstanding. If such Opinion of Counsel can not be delivered, then such substitution may only be effected at such time as the required Opinion of Counsel can be given. In addition, pursuant to the Unaffiliated Seller's Agreement, the Unaffiliated Seller and the related Originator shall be obligated to indemnify the Trustee, the Certificate Insurer and the Certificateholders 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. (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 Trustee a certification in the form attached hereto as Exhibit M, 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) through

Trust Fund (in which case it shall become a Deleted Mortgage Loan) and substitute one or more Qualified Substitute Mortgage Loans; provided, that such substitution is effected not later than the date which is two years after the Startup Day or at such later date, if the Trustee and the Certificate Insurer receive an Opinion of Counsel, by and at the cost of the Servicer, to the effect that such substitution will not cause (a) any federal tax to be imposed on the Trust Fund, including without limitation, any federal tax imposed on "prohibited transactions" under Section 860F(a)(1) of the Code or on "contributions after the startup date" under Section 860G(d)(1) of the code or (b) any REMIC to fail to qualify as a REMIC at any time that any Certificate is outstanding. If such Opinion of Counsel can not be delivered, then such substitution may only be effected at such time as the required Opinion of Counsel can be given. In addition, pursuant to the Unaffiliated Seller's Agreement, the Unaffiliated Seller and the related Originator shall be obligated to indemnify the Trustee, the Certificate Insurer and the Certificateholders 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. (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 Trustee a certification in the form attached hereto as Exhibit M, 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) through (vi) for such Qualified Substitute Mortgage Loan or Loans to the Collateral Agent on behalf of the 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 Fund 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 Trustee, the Certificate Insurer and the Back-up Servicer 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) 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 Trustee, the Certificate Insurer and the Certificateholders 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 Trustee shall give prompt written notice to the Certificate Insurer and the Rating Agencies of any repurchase or substitution made pursuant to this Section 3.03 or Section 2.06(b). 61

(e) Upon discovery by the Servicer, the Back-up Servicer, the Trustee, the Certificate Insurer or any Certificateholder that any Mortgage Loan does not constitute a Qualified Mortgage, the party discovering such fact shall promptly (and in any event within 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 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 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. (f) Pursuant to Section 3.05(k) of the Unaffiliated Seller's Agreement, the Unaffiliated Seller and each of the

(e) Upon discovery by the Servicer, the Back-up Servicer, the Trustee, the Certificate Insurer or any Certificateholder that any Mortgage Loan does not constitute a Qualified Mortgage, the party discovering such fact shall promptly (and in any event within 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 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 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. (f) Pursuant to Section 3.05(k) of 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 or the Unaffiliated Seller's Agreement. Section 3.04 Representations, Warranties and Covenants of the Trustee, the Collateral Agent and the Back-up Servicer. Each of the Trustee, the Collateral Agent and the Back-up Servicer hereby represents, warrants and covenants to the Servicer, the Certificate Insurer, the Certificateholders, the Unaffiliated Seller and the Depositor that as of the date of this Agreement or as of such date specifically provided herein: (a) It is a banking corporation duly organized, validly existing and in good standing under the laws of the State of New York; (b) It 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 it, 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 it, enforceable against it 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). 62

It is understood and agreed that the representations, warranties and covenants set forth in this Section 3.04 shall survive delivery of the respective Trustee's Mortgage Files to the Collateral Agent, on behalf of the Trustee or to another custodian, as the case may be, and shall inure to the benefit of the Certificateholders and the Certificate Insurer. Upon discovery by the Unaffiliated Seller, the Depositor, the Servicer, the Back-up Servicer, any Subservicer, the Certificate Insurer or the Trustee of a breach of any of the representations and warranties contained in this Section which materially and adversely affects the value of the Mortgage Loans or the interest of the Trustee, the Certificate Insurer or the Certificateholders, 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. Section 3.05 Negative Covenants of the Trustee and the Servicer. Except as otherwise expressly permitted by this Agreement, neither the Trustee nor the Servicer shall cause the Trust to: (i) sell, transfer, exchange or otherwise dispose of any of the assets of the Trust Fund; (ii) dissolve or liquidate the Trust Fund in whole or in part; (iii) engage, directly or indirectly, in any business other than that arising out of the issue of the Certificates, and the actions contemplated or required to be performed under this Agreement; (iv) incur, create or assume any indebtedness for borrowed money;

It is understood and agreed that the representations, warranties and covenants set forth in this Section 3.04 shall survive delivery of the respective Trustee's Mortgage Files to the Collateral Agent, on behalf of the Trustee or to another custodian, as the case may be, and shall inure to the benefit of the Certificateholders and the Certificate Insurer. Upon discovery by the Unaffiliated Seller, the Depositor, the Servicer, the Back-up Servicer, any Subservicer, the Certificate Insurer or the Trustee of a breach of any of the representations and warranties contained in this Section which materially and adversely affects the value of the Mortgage Loans or the interest of the Trustee, the Certificate Insurer or the Certificateholders, 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. Section 3.05 Negative Covenants of the Trustee and the Servicer. Except as otherwise expressly permitted by this Agreement, neither the Trustee nor the Servicer shall cause the Trust to: (i) sell, transfer, exchange or otherwise dispose of any of the assets of the Trust Fund; (ii) dissolve or liquidate the Trust Fund in whole or in part; (iii) engage, directly or indirectly, in any business other than that arising out of the issue of the Certificates, and the actions contemplated or required to be performed under this Agreement; (iv) incur, create or assume any indebtedness for borrowed money; (v) voluntarily file a petition for bankruptcy, reorganization, assignment for the benefit of creditors or similar proceeding; or (vi) merge, convert or consolidate with any other Person. ARTICLE IV THE CERTIFICATES Section 4.01 The Certificates. (a) The Class A Certificates shall be substantially in the form annexed hereto of Exhibit A, the Class A-IO Certificates shall be substantially in the form annexed hereto as Exhibit B, the Class M Certificates (including any Class M-1, Class M-2 or Class M-3 Certificates) shall be substantially in the form annexed hereto of Exhibit C and the Class R, Class X and Class I Certificates shall be substantially in the forms annexed hereto as Exhibits D, E and F, respectively. All Certificates shall be executed by manual or facsimile signature on behalf of the Trustee by an authorized officer and authenticated by the manual or facsimile signature of an authorized officer. Certificates bearing the signatures of individuals who were at the time of the execution of the Certificates the authorized officers of the Trustee shall bind the Trustee, notwithstanding that such individuals or any of them have ceased to hold such offices prior to the delivery of such Certificates or did not hold such offices at the date of such Certificates. All Certificates issued hereunder shall be dated the date of their authentication. 63

(b) Solely for purposes of calculating distributions and allocating losses, the Class M Certificates will be made up of the Class M-1, Class M-2 and Class M-3 Components. The Pass-Through Rate on each of the components will be the same as the Pass-Through Rate on the Class M Certificates. The Component Principal Balance with respect to any component as of any Distribution Date is the initial Component Principal Balance thereof on the Closing Date, reduced by all amounts applied, and losses allocated in reduction of, the Component Principal Balance of such component on previous Distribution Dates. The Certificate Principal Balance of the Class M Certificates will be equal to the aggregate of the Component Principal Balances of the Class M-1, Class M-2 and Class M-3 Components. Until the occurrence of a Separation Event, the components comprising the Class M Certificates will not be separately transferable. With respect to each Distribution Date, the Servicer Remittance Report will include an accounting of the Certificate Principal Balance of the Class M Certificates and the Component Principal Balance of each of the components after giving effect to the distribution of the Class M Principal Distribution Amount on such Distribution Date.

(b) Solely for purposes of calculating distributions and allocating losses, the Class M Certificates will be made up of the Class M-1, Class M-2 and Class M-3 Components. The Pass-Through Rate on each of the components will be the same as the Pass-Through Rate on the Class M Certificates. The Component Principal Balance with respect to any component as of any Distribution Date is the initial Component Principal Balance thereof on the Closing Date, reduced by all amounts applied, and losses allocated in reduction of, the Component Principal Balance of such component on previous Distribution Dates. The Certificate Principal Balance of the Class M Certificates will be equal to the aggregate of the Component Principal Balances of the Class M-1, Class M-2 and Class M-3 Components. Until the occurrence of a Separation Event, the components comprising the Class M Certificates will not be separately transferable. With respect to each Distribution Date, the Servicer Remittance Report will include an accounting of the Certificate Principal Balance of the Class M Certificates and the Component Principal Balance of each of the components after giving effect to the distribution of the Class M Principal Distribution Amount on such Distribution Date. Upon the occurrence of a Separation Event, the Trustee will notify the holders of the Class M Certificates of the separation of their Class M Certificates into its component parts. Following the separation, the Class M Certificates will no longer be outstanding, and each holder of a Class M Certificate prior to separation will become the holder of Class M-1, Class M-2 and Class M-3 Certificates (which will be separately transferable and fully registered securities) in Percentage Interests equal to such holder's Percentage Interest in the Class M Certificates immediately prior to the separation. The Trustee may require payment from the holders of the Class M Certificates of a sum sufficient to cover any tax or other governmental charge payable in connection with such separation. The costs, if any, associated with the separation of the Class M Certificates will be borne by the holders thereof in proportion to their Percentage Interests. The Class M-1, Class M-2 and Class M-3 Certificates shall continue to be registered in the same manner as the Class M Certificates so as to participate a global book-entry system with the Depository as provided in Section 4.02(e). Section 4.02 Registration of Transfer and Exchange of Certificates. (a) The Trustee, as registrar, shall cause to be kept a register (the "Certificate Register") in which, subject to such reasonable regulations as it may prescribe, the Trustee shall provide for the registration of Certificates and the registration of transfer of Certificates. The Trustee is hereby appointed registrar (the "Certificate Registrar") for the purpose of registering Certificates and transfers of Certificates as herein provided. The Certificate Insurer shall be entitled to inspect and copy the Certificate Register and the records of the Trustee relating to the Certificates during normal business hours upon reasonable notice. (b) All Certificates issued upon any registration of transfer or exchange of Certificates shall be valid evidence of the same ownership interests in the Trust and entitled to the same benefits under this Agreement as the Certificates surrendered upon such registration of transfer or exchange. 64

(c) Every Certificate presented or surrendered for registration of transfer or exchange shall be duly endorsed, or be accompanied by a written instrument of transfer in form satisfactory to the Trustee duly executed by the Holder thereof or his attorney duly authorized in writing. (d) No service charge shall be made to a Holder for any registration of transfer or exchange of Certificates, but the Trustee may require payment of a sum sufficient to cover any tax or other governmental charge that may be imposed in connection with any registration of transfer or exchange of Certificates; any other expenses in connection with such transfer or exchange shall be an expense of the Trust. (e) It is intended that the Offered Certificates be registered so as to participate in a global book-entry system with the Depository, as set forth herein. The Offered Certificates shall, except as otherwise provided in the next paragraph, be initially issued in the form of a single fully registered Certificate with a denomination equal to the Original Certificate Principal Balance or Class A-IO Notional Balance, respectively. Upon initial issuance, the ownership of each such Offered Certificate shall be registered in the Certificate Register in the name of Cede & Co., or any successor thereto, as nominee for the Depository. The Depositor and the Trustee are hereby authorized to execute and deliver the Representation Letter with the Depository. With respect to the Offered Certificates registered in the Certificate Register in the name of Cede & Co., as nominee of the Depository, the Depositor, the Unaffiliated Seller, the Servicer, the Back-up Servicer, the Certificate Insurer and the Trustee shall

(c) Every Certificate presented or surrendered for registration of transfer or exchange shall be duly endorsed, or be accompanied by a written instrument of transfer in form satisfactory to the Trustee duly executed by the Holder thereof or his attorney duly authorized in writing. (d) No service charge shall be made to a Holder for any registration of transfer or exchange of Certificates, but the Trustee may require payment of a sum sufficient to cover any tax or other governmental charge that may be imposed in connection with any registration of transfer or exchange of Certificates; any other expenses in connection with such transfer or exchange shall be an expense of the Trust. (e) It is intended that the Offered Certificates be registered so as to participate in a global book-entry system with the Depository, as set forth herein. The Offered Certificates shall, except as otherwise provided in the next paragraph, be initially issued in the form of a single fully registered Certificate with a denomination equal to the Original Certificate Principal Balance or Class A-IO Notional Balance, respectively. Upon initial issuance, the ownership of each such Offered Certificate shall be registered in the Certificate Register in the name of Cede & Co., or any successor thereto, as nominee for the Depository. The Depositor and the Trustee are hereby authorized to execute and deliver the Representation Letter with the Depository. With respect to the Offered Certificates registered in the Certificate Register in the name of Cede & Co., as nominee of the Depository, the Depositor, the Unaffiliated Seller, the Servicer, the Back-up Servicer, the Certificate Insurer and the Trustee shall have no responsibility or obligation to Direct or Indirect Participants or beneficial owners for which the Depository holds Offered Certificates from time to time as a Depository. Without limiting the immediately preceding sentence, the Depositor, the Unaffiliated Seller, the Servicer, the Back-up Servicer, the Certificate Insurer and the Trustee shall have no responsibility or obligation with respect to (i) the accuracy of the records of the Depository, Cede & Co., or any Direct or Indirect Participant with respect to any Ownership Interest, (ii) the delivery to any Direct or Indirect Participant or any other Person, other than a Certificateholder, of any notice with respect to the Offered Certificates or (iii) the payment to any Direct or Indirect Participant or any other Person, other than a Certificateholder, of any amount with respect to any distribution of principal or interest on the Offered Certificates. No Person other than a Certificateholder shall receive a certificate evidencing such Offered Certificate. Upon delivery by the Depository to the Trustee of written notice to the effect that the Depository has determined to substitute a new nominee in place of Cede & Co., and subject to the provisions hereof with respect to the payment of interest by the mailing of checks or drafts to the Certificateholders appearing as Certificateholders at the close of business on a Record Date, the name "Cede & Co." in this Agreement shall refer to such new nominee of the Depository. (f) In the event that (i) the Depository or the Servicer advises the Trustee in writing that the Depository is no longer willing or able to discharge properly its responsibilities as nominee and depository with respect to the Offered Certificates and the Servicer or the Depository is unable to locate a qualified successor or (ii) the Trustee at its sole option elects to terminate the book-entry system through the Depository, the Offered Certificates shall no longer be restricted to being registered in the Certificate Register in the name of Cede & Co. (or a successor nominee) as nominee of the Depository. At that time, the Servicer may determine that the Offered Certificates shall be registered in the name of and deposited with a successor depository operating a global book-entry system, as may be acceptable to the Servicer, or such depository's agent or designee but, if the Servicer does not select such alternative global book-entry system, then the Offered Certificates may be registered in whatever name or names Certificateholders transferring Offered Certificates shall designate, in accordance with the provisions hereof; provided, however, that any such reregistration shall be at the expense of the Servicer. 65

(g) Notwithstanding any other provision of this Agreement to the contrary, so long as any Offered Certificate is registered in the name of Cede & Co., as nominee of the Depository, all distributions of principal or interest on such Offered Certificates, as the case may be, and all notices with respect to such Offered Certificates, as the case may be, shall be made and given, respectively, in the manner provided in the Representation Letter. (h) No transfer, sale, pledge or other disposition of any Class R, Class I or Class X Certificate shall be made unless such disposition is made pursuant to an effective registration statement under the Securities Act of 1933, as amended (the "1933 Act") and effective registration or qualification under applicable state securities laws or "Blue Sky" laws, or is made in a transaction that does not require such registration or qualification. In the event that a transfer of a Certificate is to be made in reliance upon an exemption from the 1933 Act, the Trustee or the

(g) Notwithstanding any other provision of this Agreement to the contrary, so long as any Offered Certificate is registered in the name of Cede & Co., as nominee of the Depository, all distributions of principal or interest on such Offered Certificates, as the case may be, and all notices with respect to such Offered Certificates, as the case may be, shall be made and given, respectively, in the manner provided in the Representation Letter. (h) No transfer, sale, pledge or other disposition of any Class R, Class I or Class X Certificate shall be made unless such disposition is made pursuant to an effective registration statement under the Securities Act of 1933, as amended (the "1933 Act") and effective registration or qualification under applicable state securities laws or "Blue Sky" laws, or is made in a transaction that does not require such registration or qualification. In the event that a transfer of a Certificate is to be made in reliance upon an exemption from the 1933 Act, the Trustee or the Certificate Registrar shall require, in order to assure compliance with the 1933 Act, that the Certificateholder desiring to effect such disposition and such Certificateholder's prospective transferee each certify to the Trustee or the Certificate Registrar in writing the facts surrounding such disposition substantially in the form of Exhibit L hereto (with respect to a transfer made pursuant to Rule 144A promulgated under the 1933 Act) and may, unless such transfer occurs more than three years after the Closing Date or is made pursuant to Rule 144A promulgated under the 1933 Act, require an Opinion of Counsel satisfactory to the Trustee or Certificate Registrar as the case may be, that such transfer may be made pursuant to an exemption from the 1933 Act, which Opinion of Counsel shall be at the expense of the Certificateholder. None of the Servicer, the Back-up Servicer, the Depositor, the Unaffiliated Seller or the Trustee is obligated under this Agreement to register Certificates under the 1933 Act, as amended or any other securities law or to take any action not otherwise required under this Agreement to permit the transfer of the Class R, Class I or Class X Certificates without such registration or qualification. Every Certificate presented or surrendered for registration of transfer or exchange shall be accompanied by a written instrument of transfer substantially in the form of Exhibit M hereto, or such other endorsement or written instrument of transfer as is satisfactory to the Trustee, duly executed by the Holder thereof or his attorney duly authorized in writing, together with wiring instructions, if applicable, in the form of Exhibit Q. (i) Any such Certificateholder desiring to effect such transfer shall, and does hereby agree to, indemnify the Trustee, the Depositor, the Unaffiliated Seller, the Certificate Insurer, the Back-up Servicer and the Servicer against any liability that may result if the transfer is not exempt or is not made in accordance with such applicable federal and state laws. Promptly after receipt by an indemnified party under this paragraph of notice of the commencement of any action, such indemnified party will, if a claim in respect thereof is to be made against the indemnifying party under this paragraph, notify the indemnifying party in writing of the commencement thereof; but the omission so to notify the indemnifying party will not relieve it from any liability which it may have to any indemnified party otherwise than under this paragraph. In case any such action is brought against any indemnified party, and it notifies the indemnifying party of the commencement thereof, the indemnifying party will be entitled to appoint counsel reasonably satisfactory to such indemnified party to represent the indemnified party in such action; provided, however, that if the defendants in any such action include both the indemnified party and the indemnifying party and the indemnified party shall have reasonably concluded that there may be legal defenses available to it and/or other indemnified parties which are different from or additional to those available to 66

the indemnifying party, the indemnified party or parties shall have the right to select separate counsel to defend such action on behalf of such indemnified party or parties. Upon receipt of notice from the indemnifying party to such indemnified party of its election so to appoint counsel to defend such action and approval by the indemnified party of such counsel, the indemnifying party will not be liable to such indemnified party under this paragraph for any legal or other expenses subsequently incurred by such indemnified party in connection with the defense thereof unless (i) the indemnified party shall have employed separate counsel in accordance with the proviso of the next preceding sentence (it being understood, however, that the indemnifying party shall not be liable for the expenses of more than one separate counsel for any indemnified party), (ii) the indemnifying party shall not have employed counsel satisfactory to the indemnified party to represent the indemnified party within a reasonable time after notice of commencement of the action or (iii) the indemnifying party has authorized the employment of counsel for the indemnified party at the expense of the indemnifying party. Under no circumstances shall the indemnified party enter into a settlement agreement with respect to any lawsuit, claim or other proceeding without the prior written consent of the indemnifying party. (j) Subject to the restrictions set forth in this Agreement, upon surrender for registration of transfer of any

the indemnifying party, the indemnified party or parties shall have the right to select separate counsel to defend such action on behalf of such indemnified party or parties. Upon receipt of notice from the indemnifying party to such indemnified party of its election so to appoint counsel to defend such action and approval by the indemnified party of such counsel, the indemnifying party will not be liable to such indemnified party under this paragraph for any legal or other expenses subsequently incurred by such indemnified party in connection with the defense thereof unless (i) the indemnified party shall have employed separate counsel in accordance with the proviso of the next preceding sentence (it being understood, however, that the indemnifying party shall not be liable for the expenses of more than one separate counsel for any indemnified party), (ii) the indemnifying party shall not have employed counsel satisfactory to the indemnified party to represent the indemnified party within a reasonable time after notice of commencement of the action or (iii) the indemnifying party has authorized the employment of counsel for the indemnified party at the expense of the indemnifying party. Under no circumstances shall the indemnified party enter into a settlement agreement with respect to any lawsuit, claim or other proceeding without the prior written consent of the indemnifying party. (j) Subject to the restrictions set forth in this Agreement, upon surrender for registration of transfer of any Certificate at the office or agency of the Trustee located in New York, New York, the Trustee shall execute, authenticate and deliver in the name of the designated transferee or transferees, a new Certificate of the same Class and Percentage Interest and dated the date of authentication by the Trustee. At the option of the Certificateholders, Certificates may be exchanged for other Certificates of Authorized Denominations of a like aggregate Percentage Interest, upon surrender of the Certificates to be exchanged at such office. Whenever any Certificates are so surrendered for exchange, the Trustee shall execute, authenticate and deliver the Certificates which the Certificateholder making the exchange is entitled to receive. No service charge shall be made for any transfer or exchange of Certificates, but the Trustee may require payment of a sum sufficient to cover any tax or governmental charge that may be imposed in connection with any transfer or exchange of Certificates. All Certificates surrendered for transfer and exchange shall be cancelled and destroyed by the Trustee in accordance with the Trustee's standard procedures. (k) No transfer of an Offered Certificate shall be made to the Unaffiliated Seller or, to the actual knowledge of a Responsible Officer of the Trustee, to any of the Unaffiliated Seller's Affiliates, successors or assigns. (l) Each Person who has or who acquires any Ownership Interest in a Class R Certificate shall be deemed by the acceptance or acquisition of such Ownership Interest to have agreed to be bound by the following provisions and to have irrevocably appointed the Servicer or its designee as its attorney-in-fact to negotiate the terms of any mandatory sale under clause (viii) below and to execute all instruments of transfer and to do all other things necessary in connection with any such sale, and the rights of each Person acquiring any Ownership Interest in a Class R Certificate are expressly subject to the following provisions: 67

(i) Each Person holding or acquiring any Ownership Interest in a Class R Certificate shall be a Permitted Transferee and a United States Person and shall promptly notify the Trustee of any change or impending change in its status as either a United States Person or a Permitted Transferee. (ii) In connection with any proposed Transfer of any Ownership Interest in a Class R Certificate, the Trustee shall require delivery to it of, and shall not register the Transfer of any Class R Certificate until its receipt of, an affidavit and agreement (a "Transfer Affidavit and Agreement") attached hereto as Exhibit L from the proposed Transferee, in form and substance satisfactory to the Trustee. (iii) The Trustee will register the Transfer of any Class R Certificate only if it shall have received the Transfer Affidavit and Agreement and all of such other documents as shall have been reasonably required by the Trustee as a condition to such registration. In addition, no Transfer of a Class R Certificate shall be made unless the Trustee shall have received a representation letter from the Transferee of such Certificate to the effect that such Transferee is a United States Person and is not a "disqualified organization" (as defined in Section 860E(e)(5) of the Code). (iv) Notwithstanding the delivery of a Transfer Affidavit and Agreement by a proposed Transferee under clause

(i) Each Person holding or acquiring any Ownership Interest in a Class R Certificate shall be a Permitted Transferee and a United States Person and shall promptly notify the Trustee of any change or impending change in its status as either a United States Person or a Permitted Transferee. (ii) In connection with any proposed Transfer of any Ownership Interest in a Class R Certificate, the Trustee shall require delivery to it of, and shall not register the Transfer of any Class R Certificate until its receipt of, an affidavit and agreement (a "Transfer Affidavit and Agreement") attached hereto as Exhibit L from the proposed Transferee, in form and substance satisfactory to the Trustee. (iii) The Trustee will register the Transfer of any Class R Certificate only if it shall have received the Transfer Affidavit and Agreement and all of such other documents as shall have been reasonably required by the Trustee as a condition to such registration. In addition, no Transfer of a Class R Certificate shall be made unless the Trustee shall have received a representation letter from the Transferee of such Certificate to the effect that such Transferee is a United States Person and is not a "disqualified organization" (as defined in Section 860E(e)(5) of the Code). (iv) Notwithstanding the delivery of a Transfer Affidavit and Agreement by a proposed Transferee under clause (ii) above, if a Responsible Officer of the Trustee has actual knowledge that the proposed Transferee is not a Permitted Transferee, no Transfer of an Ownership Interest in a Class R Certificate to such proposed Transferee shall be effected. (v) Each Person holding or acquiring any Ownership Interest in a Class R Certificate shall agree (A) to require a Transfer Affidavit and Agreement from any other Person to whom such Person attempts to transfer its Ownership Interest in a Class R Certificate (B) to require a Transfer Affidavit and Agreement from any Person for whom such Person is acting as nominee, trustee or agent in connection with any transfer of its Ownership Interest in a Class R Certificate, (C) not to transfer any Ownership Interest in a Class R Certificate to any other Person (1) if it has actual knowledge that such Person is not a Permitted Transferee or that such Transfer Affidavit and Agreement is false, (2) if such transfer is for the purpose of impeding the assessment or collection of tax, (3) if it has actual knowledge or reason to know that the proposed transferee would be unwilling or unable to pay taxes attributed to the Class R Certificate, or (4) if it has actual knowledge or reason to know that the proposed transferee will not honor the restrictions on subsequent transfers of the Class R Certificate set forth in this section 4.02(l) and in the Transfer Affidavit and Agreement, (D) to conduct a reasonable investigation of the financial condition of the proposed transferee and transfer its Ownership Interest in the Class R Certificate only if, as a result of such investigation, it concludes that the proposed transferee has historically paid its debts as they came due and will continue to pay its debts as they come due in the future, and (E) to provide a certificate attached hereto as Exhibit M to the Trustee in connection with any transfer of its Ownership Interest in a Class R Certificate. 68

(vi) Each Person holding or acquiring an Ownership Interest in a Class R Certificate, by purchasing an Ownership Interest in such Certificate, agrees to give the Trustee written notice that it is a "pass-through interest holder" within the meaning of temporary Treasury regulation Section 1.67-3T(a)(2)(i)(A) immediately upon acquiring an Ownership Interest in a Class R Certificate, if it is, or is holding an Ownership Interest in a Class R Certificate on behalf of, a "pass-through interest holder". (vii) Any attempted or purported transfer of any Ownership Interest in a Class R Certificate in violation of the provisions of this Section 4.02 shall be absolutely null and void and shall vest no rights in the purported transferee. If any purported transferee shall become a Holder of a Class R Certificate in violation of the provisions of this Section 4.02, then the last preceding Permitted Transferee shall be restored to all rights as Holder thereof retroactive to the date of registration of transfer of such Class R Certificate. The Trustee shall notify the Servicer upon receipt of written notice or discovery by a Responsible Officer that the registration of transfer of a Class R Certificate was not in fact permitted by this Section 4.02. Knowledge shall not be imputed to the Trustee with respect to an impermissible transfer in the absence of such a written notice or discovery by a Responsible Officer. The Trustee shall be under no liability to any Person for any registration of transfer of a Class R Certificate that is in fact not permitted by this Section 4.02 or for making any payments due on such Certificate to the Holder thereof or taking any other action with respect to such Holder under the provisions of

(vi) Each Person holding or acquiring an Ownership Interest in a Class R Certificate, by purchasing an Ownership Interest in such Certificate, agrees to give the Trustee written notice that it is a "pass-through interest holder" within the meaning of temporary Treasury regulation Section 1.67-3T(a)(2)(i)(A) immediately upon acquiring an Ownership Interest in a Class R Certificate, if it is, or is holding an Ownership Interest in a Class R Certificate on behalf of, a "pass-through interest holder". (vii) Any attempted or purported transfer of any Ownership Interest in a Class R Certificate in violation of the provisions of this Section 4.02 shall be absolutely null and void and shall vest no rights in the purported transferee. If any purported transferee shall become a Holder of a Class R Certificate in violation of the provisions of this Section 4.02, then the last preceding Permitted Transferee shall be restored to all rights as Holder thereof retroactive to the date of registration of transfer of such Class R Certificate. The Trustee shall notify the Servicer upon receipt of written notice or discovery by a Responsible Officer that the registration of transfer of a Class R Certificate was not in fact permitted by this Section 4.02. Knowledge shall not be imputed to the Trustee with respect to an impermissible transfer in the absence of such a written notice or discovery by a Responsible Officer. The Trustee shall be under no liability to any Person for any registration of transfer of a Class R Certificate that is in fact not permitted by this Section 4.02 or for making any payments due on such Certificate to the Holder thereof or taking any other action with respect to such Holder under the provisions of this Agreement so long as the transfer was registered after receipt of the related Transfer Affidavit and Agreement. The Trustee shall be entitled, but not obligated to, recover from any Holder of a Class R Certificate that was in fact not a Permitted Transferee at the time it became a Holder or, at such subsequent time as it became other than a Permitted Transferee, all payments made on such Class R Certificate at and after either such time and any and all costs incurred by the Trustee in reversing the non-permitted transfer. Any such payments so recovered by the Trustee shall be paid and delivered by the Trustee to the last preceding Holder of such Certificate. (viii) If any purported transferee shall become a Holder of a Class R Certificate in violation of the restrictions in this Section 4.02, then the Servicer or its designee shall have the right, without notice to the Holder or any prior Holder of such Class R Certificate, to sell such Class R Certificate to a purchaser selected by the Servicer or its designee on such reasonable terms as the Servicer or its designee may choose. Such purchaser may be the Servicer itself or any Affiliate of the Servicer. The proceeds of such sale, net of commissions, expenses and taxes due, if any, will be remitted by the Servicer to the last preceding purported transferee of such Class R Certificate, except that in the event that the Servicer determines that the Holder or any prior Holder of such Class R Certificate may be liable for any amount due under this Section 4.02 or any other provision of this Agreement, the Servicer may withhold a corresponding amount from such remittance as security for such claim. The terms and conditions of any sale under this clause (viii) shall be determined in the sole discretion of the Servicer or its designee, and it shall not be liable to any Person having an Ownership Interest in a Class R Certificate as a result of its exercise of such discretion. 69

(m) The provisions of Section 4.02(l) may be modified, added to or eliminated, provided that there shall have been delivered to the Trustee and the Certificate Insurer an Opinion of Counsel to the effect that such modification of, addition to or elimination of such provisions will not cause the transfer to be disregarded under Treasury Regulation ss.1.860E-1(c), will not cause any of the REMICs included in the Trust Fund to cease to qualify as a REMIC and will not cause (x) any of the REMICs included in the Trust Fund to be subject to an entity-level tax caused by the Transfer of any Ownership Interest in a Class R Certificate to a Person that is not a Permitted Transferee or (y) a Person other than the prospective transferee to be subject to a REMIC-related tax caused by the Transfer of an Ownership Interest in a Class R Certificate to a Person that is not a Permitted Transferee. (n) The Trustee and the Servicer shall require the prospective transferee of any Class R, Class I or Class X Certificate to certify (in the form of Exhibit N hereto) that it is not a pension or benefit plan or individual retirement arrangement that is subject to the Employee Retirement Income Security Act of 1974, as amended ("ERISA"), or to Section 4975 of the Code (a "Plan") or an entity whose underlying assets are deemed to be assets of a Plan by reason of such plan's or arrangement's investment in the entity, as determined under U.S. Department of Labor Regulations 29 C.F.R. ss. 2510.3-101 or otherwise.

(m) The provisions of Section 4.02(l) may be modified, added to or eliminated, provided that there shall have been delivered to the Trustee and the Certificate Insurer an Opinion of Counsel to the effect that such modification of, addition to or elimination of such provisions will not cause the transfer to be disregarded under Treasury Regulation ss.1.860E-1(c), will not cause any of the REMICs included in the Trust Fund to cease to qualify as a REMIC and will not cause (x) any of the REMICs included in the Trust Fund to be subject to an entity-level tax caused by the Transfer of any Ownership Interest in a Class R Certificate to a Person that is not a Permitted Transferee or (y) a Person other than the prospective transferee to be subject to a REMIC-related tax caused by the Transfer of an Ownership Interest in a Class R Certificate to a Person that is not a Permitted Transferee. (n) The Trustee and the Servicer shall require the prospective transferee of any Class R, Class I or Class X Certificate to certify (in the form of Exhibit N hereto) that it is not a pension or benefit plan or individual retirement arrangement that is subject to the Employee Retirement Income Security Act of 1974, as amended ("ERISA"), or to Section 4975 of the Code (a "Plan") or an entity whose underlying assets are deemed to be assets of a Plan by reason of such plan's or arrangement's investment in the entity, as determined under U.S. Department of Labor Regulations 29 C.F.R. ss. 2510.3-101 or otherwise. Section 4.03 Mutilated, Destroyed, Lost or Stolen Certificates. If (a) any mutilated Certificate is surrendered to the Trustee, or the Trustee receives evidence to its satisfaction of the destruction, loss or theft of any Certificate, and (b) there is delivered to the Servicer, the Certificate Insurer and the Trustee such security or indemnity as may reasonably be required by each of them to save each of them harmless, then, in the absence of notice to the Servicer and the Trustee that such Certificate has been acquired by a bona fide purchaser, the Trustee shall execute, authenticate and deliver, in exchange for or in lieu of any such mutilated, destroyed, lost or stolen Certificate, a new Certificate of like tenor and Percentage Interest, but bearing a number not contemporaneously outstanding. Upon the issuance of any new Certificate under this Section 4.03, the Servicer and the Trustee may require the payment of a sum sufficient to cover any tax or other governmental charge that may be imposed in relation thereto and their fees and expenses connected therewith. Any duplicate Certificate issued pursuant to this Section 4.03 shall constitute complete and indefeasible evidence of ownership in the Trust Fund, as if originally issued, whether or not the mutilated, destroyed, lost or stolen Certificate shall be found at any time. Section 4.04 Persons Deemed Owners. Prior to due presentation of a Certificate for registration of transfer and subject to the provisions of Section 4.02 and Article X, the Servicer, the Back-up Servicer, the Depositor, the Unaffiliated Seller, the Certificate Insurer and the Trustee may treat the Person in whose name any Certificate is registered as the owner of such Certificate for the purpose of receiving remittances pursuant to Section 6.05 and for all other purposes whatsoever, and the Servicer, the Back-up Servicer, the Depositor, the Unaffiliated Seller, the Certificate Insurer and the Trustee shall not be affected by notice to the contrary. 70

ARTICLE V ADMINISTRATION AND SERVICING OF THE MORTGAGE LOANS Section 5.01 REMIC Matters; The Servicer. (a) The parties intend that the Trust Fund formed hereunder shall, except for the Pre-Funding Account, if any, the Capitalized Interest Account, if any, the Net WAC Cap Carryover Fund, the Special Reserve Account, the Interest Rate Hedge Agreement and the Interest Rate Hedge Payment Fund, constitute, and that the affairs of the Trust Fund shall be conducted and this Agreement shall be construed so as to qualify the Trust Fund as, four separate "real estate mortgage investment conduits" as defined in and in accordance with the REMIC Provisions. In furtherance of such intention, the Servicer covenants and agrees that it shall, to the extent permitted by applicable law, act as agent (and the Servicer is hereby appointed to act as agent) on behalf of the Trust Fund and that in such capacity it shall: (a) prepare and file, or cause to be prepared and filed, all required federal, state and local tax returns for each REMIC using a calendar year as the taxable year for the Trust Fund when and as required by the REMIC Provisions and other applicable federal, state and local income tax laws; (b) maintain or cause the maintenance of the books of each REMIC on the accrual method of accounting; (c) make elections, on behalf of each REMIC, to be treated as a REMIC on the federal tax return of the Trust Fund for its first taxable year, in accordance with the REMIC Provisions; provided,

ARTICLE V ADMINISTRATION AND SERVICING OF THE MORTGAGE LOANS Section 5.01 REMIC Matters; The Servicer. (a) The parties intend that the Trust Fund formed hereunder shall, except for the Pre-Funding Account, if any, the Capitalized Interest Account, if any, the Net WAC Cap Carryover Fund, the Special Reserve Account, the Interest Rate Hedge Agreement and the Interest Rate Hedge Payment Fund, constitute, and that the affairs of the Trust Fund shall be conducted and this Agreement shall be construed so as to qualify the Trust Fund as, four separate "real estate mortgage investment conduits" as defined in and in accordance with the REMIC Provisions. In furtherance of such intention, the Servicer covenants and agrees that it shall, to the extent permitted by applicable law, act as agent (and the Servicer is hereby appointed to act as agent) on behalf of the Trust Fund and that in such capacity it shall: (a) prepare and file, or cause to be prepared and filed, all required federal, state and local tax returns for each REMIC using a calendar year as the taxable year for the Trust Fund when and as required by the REMIC Provisions and other applicable federal, state and local income tax laws; (b) maintain or cause the maintenance of the books of each REMIC on the accrual method of accounting; (c) make elections, on behalf of each REMIC, to be treated as a REMIC on the federal tax return of the Trust Fund for its first taxable year, in accordance with the REMIC Provisions; provided, however, that such election shall not be made with respect to the Pre-Funding Account, if any, the Capitalized Interest Account, if any, the Net WAC Cap Carryover Fund, the Special Reserve Account, the Interest Rate Hedge Payment Fund and the Interest Rate Hedge Agreement and shall specifically exclude the Pre-Funding Account, if any, the Capitalized Interest Account, if any, the Net WAC Cap Carryover Fund, the Special Reserve Account, the Interest Rate Hedge Payment Fund and the Interest Rate Hedge Payment Agreement from the assets for which a REMIC election is made; (d) prepare and forward, or cause to be prepared and forwarded, to the Certificateholders all information reports as and when required to be provided to them in accordance with the REMIC Provisions; (e) conduct the affairs of each REMIC at all times that any Certificates are outstanding so as to maintain the status thereof as a REMIC under the REMIC Provisions; and (f) not knowingly or intentionally take any action or omit to take any action that would cause the termination of the REMIC status of any REMIC created hereunder. (b) The Capitalized Interest Account, if any, the Net WAC Cap Carryover Fund and the Interest Rate Hedge Payment Fund are each an "outside reserve" fund within the meaning of Treasury Regulations Section 1.860G-2 (h) and is not an asset of any REMIC created hereunder. The Unaffiliated Seller is the owner of the Capitalized Interest Account, if any, the Holder of the Class X Certificates is the owner of the Net WAC Cap Carryover Fund and the Holder of the Class I Certificates is the owner of the Interest Rate Hedge Payment Fund for purposes of Treasury Regulations Section 1.860G-2(h). For all federal income tax purposes, amounts transferred by the Capitalized Interest Account, if any, to REMIC III, if any, will be treated as amounts contributed by the Unaffiliated Seller to REMIC III. (c) In the event that any income tax (including any tax with regard to "prohibited transactions" of any REMIC created hereunder as defined in Section 860F of the Code) is imposed on the Trust Fund, such tax shall be charged against amounts otherwise distributable to the Holders of the Class R or Class X Certificates on a pro rata basis to the extent hereinafter provided. In the event that any such tax shall be due and owing at a time when amounts otherwise distributable to the Holders of the Class R or Class X Certificates are not available, the Servicer shall pay such tax from its own funds. In such event, and upon receipt of written instruction from the Servicer, signed by a Responsible Officer, the Trustee is hereby authorized to retain from amounts otherwise distributable to the Holders of the Class R and Class X Certificates on any Distribution Date sufficient funds to reimburse the Servicer for the payment of such tax (but such obligation shall not prevent the Trustee or any other appropriate Person from contesting any such tax in appropriate proceedings and shall prevent the Trustee from withholding payment of such tax, if permitted by law, pending the outcome of such proceedings). 71

(d) The Servicer shall service and administer the Mortgage Loans in the best interests of and for the benefit of the Certificateholders 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

(d) The Servicer shall service and administer the Mortgage Loans in the best interests of and for the benefit of the Certificateholders 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 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 Trustee, to execute and deliver, on behalf of itself, the Certificateholders, the Certificate Insurer and the 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 Trustee of any such waiver, release, discharge, modification, indulgence or other such matter by delivering to the Trustee an Officer's Certificate certifying that such agreement is in compliance with this Section 5.01(d) 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 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 (i) 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 CLTV or change the final maturity date on or of such Mortgage Loan unless (A) the Mortgagor is in default with respect to the Mortgage Loan or such default is, in the judgment of the Servicer, imminent and (B) the Certificate Insurer consents to such modifications in writing; provided, however, that the Servicer shall be permitted to extend the final maturity date of any Mortgage Loan by 180 days or less without the consent of the Certificate Insurer, so long as such final maturity date (as so extended) is not later than the latest Final Scheduled Maturity Date for any outstanding Class of Offered Certificates or (ii) permit any modification, waiver or amendment of any term of any Mortgage Loan that would both (A) effect an exchange or reissuance of such Mortgage Loan under Section 1001 of the Code (or Treasury regulations promulgated thereunder) and (B) cause any REMIC created hereunder to fail to qualify as a REMIC under the Code or the imposition of any tax on "prohibited transactions" or "contributions after the startup date" under the REMIC Provisions. 72

(e) The relationship of the Servicer (and of any successor to the Servicer as servicer under this Agreement) to the 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. 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 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 Trustee the Collection Account, in trust for the benefit of the Certificateholders and the Certificate Insurer. The Collection Account shall be established and maintained as an Eligible Account. (c) The Servicer shall deposit 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 respective 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 respective Cut-Off Date): (i) Payments of interest on the Mortgage Loans; (ii) Payments of principal of the Mortgage Loans;

(e) The relationship of the Servicer (and of any successor to the Servicer as servicer under this Agreement) to the 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. 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 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 Trustee the Collection Account, in trust for the benefit of the Certificateholders and the Certificate Insurer. The Collection Account shall be established and maintained as an Eligible Account. (c) The Servicer shall deposit 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 respective 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 respective Cut-Off Date): (i) Payments of interest on the Mortgage Loans; (ii) Payments of principal of the Mortgage Loans; (iii) The Loan Repurchase Price of Mortgage Loans repurchased pursuant to Sections 2.06, 3.03, 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 3.03; (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 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 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. In the event that the Servicer fails to provide written investment instructions, the Trustee shall invest such funds pursuant to clause (v) of the definition of Permitted Investments. 73

Section 5.03 Permitted Withdrawals from the Collection Account. The 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

Section 5.03 Permitted Withdrawals from the Collection Account. The 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 Certificateholders of any such amounts on the Distribution Date upon which the proceeds of such purchase are distributed to the Certificateholders 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; (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 funds deposited in the Collection Account that were not required to be deposited therein; 74

(h) to pay the Servicer Servicing Compensation pursuant to Section 5.08 hereof to the extent not retained or paid; and (i) to remit funds to the Distribution Account pursuant to Section 6.01(c) hereof. 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-

(h) to pay the Servicer Servicing Compensation pursuant to Section 5.08 hereof to the extent not retained or paid; and (i) to remit funds to the Distribution Account pursuant to Section 6.01(c) hereof. 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 goodfaith 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 mortgage 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. (b) If the Servicer shall obtain and maintain a blanket policy issued by an insurer acceptable to the Rating Agencies and the Certificate 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). Upon the written request of the Trustee or the Certificate Insurer, the Servicer shall provide copies of such policies to the Trustee or the Certificate Insurer, as applicable. 75

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 Certificate 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

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 Certificate 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 Trustee, the Certificate Insurer and the Collateral Agent that any assumption and modification agreement has been completed by delivering to the Trustee and the Certificate 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 Fund 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. 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. 76

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 recording 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. 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. If the Servicer determines, as described above, that it is in the best economic interest of the Trust Fund to take such actions as are necessary to bring any such Mortgaged Property into compliance with applicable environmental laws, or to take such action with respect to the containment, clean-up or remediation of hazardous substances, hazardous materials, hazardous wastes or petroleum-based materials affecting any such Mortgaged Property, then the Servicer shall take such action as it deems to be in the best economic interest of the Trust Fund. 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. Notwithstanding the foregoing, if such environmental audit reveals, or if the Servicer has actual knowledge or notice, that such Mortgaged Property contains such wastes or substances, the Servicer shall not foreclose or accept a deed in lieu of foreclosure without the prior written consent of the Certificate Insurer. (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 Trustee, or to its nominee on behalf of Certificateholders and

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 recording 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. 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. If the Servicer determines, as described above, that it is in the best economic interest of the Trust Fund to take such actions as are necessary to bring any such Mortgaged Property into compliance with applicable environmental laws, or to take such action with respect to the containment, clean-up or remediation of hazardous substances, hazardous materials, hazardous wastes or petroleum-based materials affecting any such Mortgaged Property, then the Servicer shall take such action as it deems to be in the best economic interest of the Trust Fund. 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. Notwithstanding the foregoing, if such environmental audit reveals, or if the Servicer has actual knowledge or notice, that such Mortgaged Property contains such wastes or substances, the Servicer shall not foreclose or accept a deed in lieu of foreclosure without the prior written consent of the Certificate Insurer. (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 Trustee, or to its nominee on behalf of Certificateholders and the Certificate 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. In the event that the Trust Fund acquires any Mortgaged Property as aforesaid or otherwise in connection with a default or imminent default on a Mortgage Loan, the Servicer shall (i) with respect to any REO Property held for a period of one year or more, the Servicer, at the written direction of the Certificate Insurer, will write-off the balance of the related Mortgage Loan and treat it as a Liquidated Mortgage Loan and (ii) either (x) dispose of such Mortgaged Property prior to the end of the third taxable year after its acquisition by the Trust Fund or (y) in its capacity as Tax Matters Person, request more than 60 days prior to the date on which such 3 year period would otherwise expire, an extension of the 3 year period; provided, however, that in the event the Servicer shall have furnished the Trustee and the Certificate Insurer with an Opinion of Counsel to the effect that the holding by the Trust Fund of such Mortgaged Property subsequent to the third taxable year after its acquisition will not result in the imposition of taxes on "prohibited transactions" of the Trust Fund as defined in Section 860F of the Code or cause the Trust Fund to fail to qualify as a REMIC at any time that any Certificates are outstanding, such disposition or extension shall not be required. 77

(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 Fund pursuant to Section 8.01(b)) 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 Civil 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

(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 Fund pursuant to Section 8.01(b)) 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 Civil 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. (d) The Servicer shall manage, conserve, protect and operate each REO Property for the Certificateholders solely for the purpose of its prompt disposition and sale in a manner which does not cause such REO Property to fail to qualify as "foreclosure property" within the meaning of Section 860G(a)(8) of the Code or result in the receipt by any of the REMICs created hereunder of any "income from non-permitted assets" within the meaning of Section 860F(a)(2)(B) of the Code, or any "net income from foreclosure property" which is subject to taxation under the REMIC Provisions. Section 5.07 Trustee to Cooperate. Upon the payment in full of the Principal Balance of any Mortgage Loan, the Servicer will notify the Trustee 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 Trustee shall, upon request of the Servicer and delivery to the Trustee of a trust receipt 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 trust receipt shall obligate the Servicer to return the Mortgage File to the Collateral Agent on behalf of the 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 trust receipt shall be released by the Collateral Agent on behalf of the Trustee to the Servicer. 78

Section 5.08 Servicing Compensation; Payment of Certain Expenses by Servicer. On each Distribution Date, the Servicer shall be entitled to receive, and the Trustee shall pay in the event such servicing compensation is not retained by the Servicer, 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 Trustee Fee to the extent that monies in the Collection Account are

Section 5.08 Servicing Compensation; Payment of Certain Expenses by Servicer. On each Distribution Date, the Servicer shall be entitled to receive, and the Trustee shall pay in the event such servicing compensation is not retained by the Servicer, 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 Trustee Fee to the extent that monies in the Collection Account are insufficient therefor, 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. Section 5.09 Annual Statement as to Compliance. The Servicer will deliver to the Depositor, the Trustee, the Rating Agencies, the Certificate Insurer and each Certificateholder, on or before April 30 of each year, beginning April 30, 2004, 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 Responsible 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, 2004, 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 Depositor, the Trustee, the Rating Agencies, the Certificate Insurer and each Certificateholder to the effect that such firm has examined certain documents and records relating to the servicing of mortgage loans under pooling and 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 Certificateholder, the Certificate Insurer and the 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 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 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 Certificateholder or the Trustee. 79

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 FNMA 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

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 FNMA 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 Trustee; Collection Account Statements. Not later than fifteen (15) days after each Distribution Date, the Servicer shall provide to the Trustee and the Certificate 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 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 Trustee to any Certificateholder upon request. 80

Section 5.15 Optional Purchase of Defaulted Mortgage Loans. (a) The Unaffiliated Seller, in its sole discretion, shall have the right, after the aggregate Principal Balance of defaulted Mortgage Loans exceeds 1.50% of the Maximum Pool Principal Balance, to elect (by written notice sent to the Trustee and the Certificate Insurer), but shall not be obligated, to purchase for its own account from the Trust Fund any Mortgage Loan which is one hundred and eighty (180) days or more Delinquent in the manner and at the price specified in Section 2.06(c). The purchase price for any Mortgage Loan purchased hereunder shall be deposited in the Collection Account and the Trustee, upon receipt of such deposit, shall release or cause to be released to the Unaffiliated Seller the related 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, 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 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 Trustee, the Certificate Insurer or the Certificateholders with respect thereto. (b) If the Unaffiliated Seller shall have repurchased Mortgage Loans under this Section 5.15 in an aggregate Principal Balance equal to 2.00% of the Maximum Pool 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 Certificate Insurer. Any request by the Unaffiliated Seller to the Certificate 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 Certificate 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 Certificate Insurer shall be delivered in accordance with the terms of the Insurance and Indemnity Agreement. Notwithstanding the foregoing, the Unaffiliated Seller shall in no event repurchase Mortgage Loans pursuant to this Section 5.15 in an

Section 5.15 Optional Purchase of Defaulted Mortgage Loans. (a) The Unaffiliated Seller, in its sole discretion, shall have the right, after the aggregate Principal Balance of defaulted Mortgage Loans exceeds 1.50% of the Maximum Pool Principal Balance, to elect (by written notice sent to the Trustee and the Certificate Insurer), but shall not be obligated, to purchase for its own account from the Trust Fund any Mortgage Loan which is one hundred and eighty (180) days or more Delinquent in the manner and at the price specified in Section 2.06(c). The purchase price for any Mortgage Loan purchased hereunder shall be deposited in the Collection Account and the Trustee, upon receipt of such deposit, shall release or cause to be released to the Unaffiliated Seller the related 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, 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 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 Trustee, the Certificate Insurer or the Certificateholders with respect thereto. (b) If the Unaffiliated Seller shall have repurchased Mortgage Loans under this Section 5.15 in an aggregate Principal Balance equal to 2.00% of the Maximum Pool 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 Certificate Insurer. Any request by the Unaffiliated Seller to the Certificate 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 Certificate 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 Certificate Insurer shall be delivered in accordance with the terms of the Insurance and Indemnity Agreement. Notwithstanding the foregoing, the Unaffiliated Seller shall in no event repurchase Mortgage Loans pursuant to this Section 5.15 in an aggregate Principal Balance in excess of 10.00% of the Maximum Pool Principal Balance. Section 5.16 Reports to be Provided by the Servicer(a). (a) In connection with the transfer of the Certificates, the Trustee on behalf of any Certificateholder may request that the Servicer make available to any prospective Certificateholder annual financial statements of the Servicer for one or more of the most recently completed five fiscal years for which such statements are available, which request shall not be unreasonably denied or unreasonably delayed. Such annual financial statements also shall be made available to the Certificate Insurer upon request. (b) The Servicer also agrees to make available on a reasonable basis to the Certificate Insurer or any prospective Certificateholder 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 Certificate Insurer or such prospective Certificateholder to inspect the Servicer's servicing facilities during normal business hours for the purpose of satisfying such prospective Certificateholder that the Servicer has the ability to service the Mortgage Loans in accordance with this Agreement. 81

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 Certificateholders 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

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 Certificateholders 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 Certificateholders 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 distributions required to 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 Closing Date as set forth in Section 6.01, with respect to interest on Mortgage Loans not having their first payment due until after March 2003. The Special Advance will be deposited into the Interest Reserve Account and, on the immediately succeeding Distribution Date, an amount equal to the lesser of (1) the difference of (i) the aggregate Class Monthly Interest for each Class of Offered Certificates for such Distribution Date over (ii) 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 and (2) an amount equal to the amount of interest that would have accrued on all such Mortgage Loans from the applicable Cut-Off Date to its corresponding scheduled payment date, assuming it had a payment date in March 2003, will be transferred by the Trustee from the Interest Reserve Account to the Distribution Account and treated as a portion of the Interest Remittance Amount. Any funds remaining in the Interest Reserve Account after the immediately succeeding Distribution Date shall be remitted to the Servicer on such Distribution Date. The Servicer shall also make the Special Advance required by Section 2.03(f) in respect of each Subsequent Transfer 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 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. 82

Section 5.19 Indemnification; Third Party Claims. (a) The Servicer agrees to indemnify and to hold each of the Depositor, the Trustee, the Back-up Servicer, the Collateral Agent, the Unaffiliated Seller, the Certificate Insurer and each Certificateholder harmless against any and all claims, losses, penalties, fines, forfeitures, legal fees and related costs, judgments, and any other costs, fees and expenses that the Depositor, the Trustee, the Back-up Servicer, the Collateral Agent, the Unaffiliated Seller, the Certificate Insurer and any Certificateholder 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. 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 Servicer shall assume the defense of any such claim and pay all expenses in connection therewith, including reasonable counsel

Section 5.19 Indemnification; Third Party Claims. (a) The Servicer agrees to indemnify and to hold each of the Depositor, the Trustee, the Back-up Servicer, the Collateral Agent, the Unaffiliated Seller, the Certificate Insurer and each Certificateholder harmless against any and all claims, losses, penalties, fines, forfeitures, legal fees and related costs, judgments, and any other costs, fees and expenses that the Depositor, the Trustee, the Back-up Servicer, the Collateral Agent, the Unaffiliated Seller, the Certificate Insurer and any Certificateholder 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. 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 Servicer shall assume the defense of any such claim and pay all expenses in connection therewith, including reasonable counsel fees, and promptly pay, discharge and satisfy any judgment or decree which may be entered against the Depositor, the Servicer, the Back-up Servicer, the Trustee, the Unaffiliated Seller, the Certificate Insurer and/or a Certificateholder 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) Upon receipt of written instruction from the Servicer, signed by a Servicing Officer, the Trustee may, if necessary, reimburse the Servicer from amounts otherwise distributable on the Class X and R 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) Upon receipt of written instruction from the Servicer, signed by a Servicing Officer, the Trustee shall reimburse the Unaffiliated Seller from amounts otherwise distributable on the Class X and R Certificates for all amounts advanced by the Unaffiliated Seller pursuant to the second sentence of Section 4.04(a) 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. 83

(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 Trustee and the Certificate 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 Servicer, the Back-up Servicer, the Unaffiliated Seller, the Certificate Insurer and the Trustee; provided, however, that in the event the Servicer is terminated pursuant to Section 7.01 hereof, the consent of the Unaffiliated Seller shall no longer be required, 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 Certificate 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 Trustee, the Back-up Servicer, the Unaffiliated Seller, the Depositor and the Certificate Insurer. No such resignation shall become effective until the Trustee or a successor appointed in

(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 Trustee and the Certificate 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 Servicer, the Back-up Servicer, the Unaffiliated Seller, the Certificate Insurer and the Trustee; provided, however, that in the event the Servicer is terminated pursuant to Section 7.01 hereof, the consent of the Unaffiliated Seller shall no longer be required, 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 Certificate 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 Trustee, the Back-up Servicer, the Unaffiliated Seller, the Depositor and the Certificate Insurer. No such resignation shall become effective until the 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 Trustee, the Back-up Servicer, the Certificate Insurer and the Rating Agencies 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 Trustee shall prepare or cause to be prepared, and shall execute as trustee on behalf of the Trust (other than any Form 10-K, which shall be executed by the Servicer, on behalf of the Trust), 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 Certificates) any and all reports, statements and information respecting the Trust and/or the Certificates required to be filed, and shall solicit any and all proxies of the Certificateholders whenever such proxies are required to be solicited, pursuant to the Securities Exchange Act of 1934, as amended. Unless otherwise advised by the Servicer (with the consent of the Depositor), the reports to be filed shall consist only of the following: 8-K reports attaching the related Servicer Remittance Report, to be filed in April of 2003 through December of 2003, a Form 10-K to be filed no later than March 31 of 2004, including any accountant's report referred to in Section 5.10, and a Form 15 to be filed in January 2004 and to be executed by the Servicer. The Servicer shall prepare, execute and deliver to the Trustee for filing with the Commission no later than March 15 of each year in which a Form 10-K is filed with the Commission the certification required under Section 302(a) of the Sarbanes-Oxley Act of 2002 (as such may be amended from time to time) and any rules or regulations promulgated with respect thereto (which certification shall be executed by the Servicer). Fees and expenses incurred by the Trustee in connection with the foregoing shall be reimbursed pursuant to Section 9.05 and shall not be paid by the Trust. 84

The Servicer agrees to promptly furnish to the Trustee, from time to time upon request, such further information, reports and financial statements as the Trustee deems appropriate to prepare and file all necessary reports with the Securities and Exchange Commission. ARTICLE VI DISTRIBUTIONS AND PAYMENTS Section 6.01 Establishment of Accounts; Withdrawals from Accounts; Deposits to the Distribution Account. (a) The Trustee shall establish and maintain a Distribution Account which shall be titled "Distribution Account, JPMorgan Chase Bank, as trustee for the registered holders of ABFS Mortgage Loan Trust 2003-1, Mortgage Pass-Through Certificates, Series 2003-1", which account shall be an Eligible Account held by the Trustee on behalf of the Certificateholders and the Certificate Insurer. The Trustee shall establish and maintain on behalf of the Certificateholders and the Certificate Insurer the Interest Reserve Account which shall be titled "Interest

The Servicer agrees to promptly furnish to the Trustee, from time to time upon request, such further information, reports and financial statements as the Trustee deems appropriate to prepare and file all necessary reports with the Securities and Exchange Commission. ARTICLE VI DISTRIBUTIONS AND PAYMENTS Section 6.01 Establishment of Accounts; Withdrawals from Accounts; Deposits to the Distribution Account. (a) The Trustee shall establish and maintain a Distribution Account which shall be titled "Distribution Account, JPMorgan Chase Bank, as trustee for the registered holders of ABFS Mortgage Loan Trust 2003-1, Mortgage Pass-Through Certificates, Series 2003-1", which account shall be an Eligible Account held by the Trustee on behalf of the Certificateholders and the Certificate Insurer. The Trustee shall establish and maintain on behalf of the Certificateholders and the Certificate Insurer the Interest Reserve Account which shall be titled "Interest Reserve Account, JPMorgan Chase Bank, as trustee for the registered holders of ABFS Mortgage Loan Trust 2003-1, Mortgage Pass-Through Certificates, Series 2003-1" which account shall be an Eligible Account. If the Original Pre-Funded Amount is greater than zero, the Trustee shall establish and maintain on behalf of the Certificateholders and the Certificate Insurer the Pre-Funding Account which shall be titled "Pre-Funding Account, JPMorgan Chase Bank, as trustee for the registered holders of ABFS Mortgage Loan Trust 2003-1, Mortgage Pass-Through Certificates, Series 2003-1", which account shall be an Eligible Account, and the Capitalized Interest Account which shall be titled "Capitalized Interest Account, JPMorgan Chase Bank, as trustee for the registered holders of ABFS Mortgage Loan Trust 2003-1, Mortgage Pass-Through Certificates, Series 2003-1", which account shall be an Eligible Account. Upon receipt of the proceeds of the sale of the Certificates, on the Closing Date, the Trustee shall, upon the Unaffiliated Seller's direction, from the proceeds of the sale of the Certificates, deposit, on behalf of the Certificateholders and the Certificate Insurer in the Interest Reserve Account, an amount equal to $1,585,444.20. If the Original Pre-Funded Amount is greater than zero, upon receipt of the proceeds of the sale of the Certificates, on the Closing Date, the Trustee shall, upon the Unaffiliated Seller's direction, from the proceeds of the sale of the Certificates, deposit, on behalf of the Certificateholders and the Certificate Insurer (i) in the Pre-Funding Account, the Original Pre-Funded Amount, and (ii) in the Capitalized Interest Account, an amount equal to three months' interest calculated at the Adjusted Pass-Through Rate on the Pre-Funding Amount (net of any Pre-Funding Earnings). Amounts on deposit in the Interest Reserve Account shall be invested by the Trustee, at the direction of the Servicer in Permitted Investments. In the event that the Servicer fails to provide written investment instructions, the Trustee shall invest such funds pursuant to clause (v) of the definition of Permitted Investments. Any such Permitted Investment shall mature no later than the Servicer Remittance Date. All income realized from any such Permitted Investment shall be for the benefit of the Servicer as additional servicing compensation. The amount of any losses incurred in respect of any such Permitted Investment shall be deposited in the Interest Reserve Account by the Servicer out if its own funds immediately as realized. 85

(b) The Servicer shall direct the Trustee in writing to invest the funds in the Distribution Account only in Permitted Investments. Any such Permitted Investment shall mature no later than one Business Day prior to the Distribution Date. No Permitted Investment shall be sold or disposed of prior to maturity. All income realized from any such Permitted Investment shall be for the benefit of the Servicer as additional servicing compensation. The amount of any losses incurred in respect of any such investments shall be deposited in the Distribution Account by the Servicer out of its own funds immediately as realized. (c) 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 and any amounts required to be deposited in connection with a Subsequent Mortgage Loan pursuant to Section 2.03 (f); on the Servicer Remittance Dates relating to the Pre-Funding Distribution Dates, if any, the Servicer also will deposit the Special Advance, if any.

(b) The Servicer shall direct the Trustee in writing to invest the funds in the Distribution Account only in Permitted Investments. Any such Permitted Investment shall mature no later than one Business Day prior to the Distribution Date. No Permitted Investment shall be sold or disposed of prior to maturity. All income realized from any such Permitted Investment shall be for the benefit of the Servicer as additional servicing compensation. The amount of any losses incurred in respect of any such investments shall be deposited in the Distribution Account by the Servicer out of its own funds immediately as realized. (c) 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 and any amounts required to be deposited in connection with a Subsequent Mortgage Loan pursuant to Section 2.03 (f); on the Servicer Remittance Dates relating to the Pre-Funding Distribution Dates, if any, the Servicer also will deposit the Special Advance, if any. (d) On the Pre-Funding Distribution Dates, if any, the Trustee shall transfer from the Capitalized Interest Account to the Distribution Account the Capitalized Interest Requirement, if any, for such Distribution Date. (e) On the Distribution Date following either the final Subsequent Transfer Date or the Final Pre-Funding Distribution Date, whichever date is earlier, any amounts remaining in the Capitalized Interest Account, if any, after taking into account the transfers in respect of the Distribution Date described in clause (d) above, shall be paid to the Unaffiliated Seller, and the Capitalized Interest Account shall be terminated. (f) On any Subsequent Transfer Date, the Unaffiliated Seller shall instruct the Trustee in writing to withdraw from the Pre-Funding Account an amount equal to 100% of the aggregate Principal Balances as of the related Subsequent Cut-Off Date of the Subsequent Mortgage Loans sold to the Trust on such Subsequent Transfer Date and pay such amount to or upon the order of the Unaffiliated Seller upon satisfaction of the conditions set forth in Section 2.03(b) and (c) hereof with respect to such transfer. The Trustee may conclusively rely on such written instructions from the Unaffiliated Seller. (g) If the Pre-Funding Amount (exclusive of Pre-Funding Earnings), if any, has been reduced to $100,000 or less by the last day of any calendar month during the Pre-Funding Period, then, on the related Pre-Funding Distribution Date, after giving effect to any reductions in the Pre-Funding Amount on such date, the Trustee shall withdraw from the Pre-Funding Account on such date and deposit in the Distribution Account the amount on deposit in the Pre-Funding Account other than any Pre-Funding Earnings and distribute such amount to the Holders of the Certificates in respect of the Principal Distribution Amount. 86

(h) On the Pre-Funding Distribution Dates, if any, the Trustee shall transfer from the Pre-Funding Account to the Distribution Account the Pre-Funding Earnings, if any, applicable as of each such Distribution Date. Section 6.02 Permitted Withdrawals From the Distribution Account. The Trustee shall withdraw or cause to be withdrawn funds from the Distribution Account for the following purposes: (a) to effect the distributions described in Section 6.05; (b) to pay to the Unaffiliated Seller with respect to each Mortgage Loan or property acquired in respect thereof that has been repurchased or replaced pursuant to Section 2.05 or 3.03 or to pay to the Servicer with respect to each Mortgage Loan or property acquired in respect thereof that has been purchased, all amounts received thereon and not required to be distributed as of the date on which the related repurchase or purchase price or Principal Balance was determined; (c) to pay the Servicer any interest earned on or investment income earned with respect to funds in the Distribution Account;

(h) On the Pre-Funding Distribution Dates, if any, the Trustee shall transfer from the Pre-Funding Account to the Distribution Account the Pre-Funding Earnings, if any, applicable as of each such Distribution Date. Section 6.02 Permitted Withdrawals From the Distribution Account. The Trustee shall withdraw or cause to be withdrawn funds from the Distribution Account for the following purposes: (a) to effect the distributions described in Section 6.05; (b) to pay to the Unaffiliated Seller with respect to each Mortgage Loan or property acquired in respect thereof that has been repurchased or replaced pursuant to Section 2.05 or 3.03 or to pay to the Servicer with respect to each Mortgage Loan or property acquired in respect thereof that has been purchased, all amounts received thereon and not required to be distributed as of the date on which the related repurchase or purchase price or Principal Balance was determined; (c) to pay the Servicer any interest earned on or investment income earned with respect to funds in the Distribution Account; (d) to return to the Collection Account any amount deposited in the Distribution Account that was not required to be deposited therein; and (e) to clear and terminate the Distribution Account upon termination of the Trust Fund pursuant to Article VIII. The Trustee shall keep and maintain a separate accounting for withdrawals from the Distribution Account pursuant to each of subclauses (a) through (e) listed above. Section 6.03 Collection of Money. Except as otherwise expressly provided herein, the Trustee may demand payment or delivery of all money and other property payable to or receivable by the 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 Trustee by the Servicer or by any SubServicer and (b) Class M Insured Payments. The Trustee shall hold all such money and property received by it, as part of the Trust Fund and shall apply it as provided in this Agreement. Section 6.04 The Certificate Insurance Policy. (a) Within two (2) days of each Servicer Remittance Date and based solely on the Servicer's Remittance Report delivered to the Trustee, the Trustee shall determine with respect to the immediately following Distribution Date, the Net Available Amount. (b) If on any Distribution Date there is a Class M Deficiency Amount, the Trustee shall complete a notice and certificate in the form of Exhibit A to the Certificate Insurance Policy and submit such notice to the Certificate Insurer no later than 10:00 a.m. New York, New York City time on the second Business Day preceding such Distribution Date as a claim for an Class M Insured Payment in an amount equal to such Class M Deficiency Amount. 87

(c) The Trustee shall establish a separate Eligible Account for the benefit of Holders of the Certificates and the Certificate Insurer referred to herein as the "Certificate Insurance Payment Account" over which the Trustee shall have exclusive control and sole right of withdrawal. The Trustee shall deposit upon receipt any amount paid under the Certificate Insurance Policy in the Certificate Insurance Payment Account and distribute such amount only for purposes of payment to the Class M Certificateholders of the Class M Insured Payment for which a claim was made and such amount may not be applied to satisfy any costs, expenses or liabilities of the Servicer, the Trustee or the Trust Fund. Amounts paid under the Certificate Insurance Policy, to the extent needed to pay the Class M Deficiency Amount shall be transferred to the Distribution Account on the related Distribution Date and disbursed by the Trustee to the Class M Certificateholders in accordance with Section 6.05. It shall not be necessary for such payments to be made by checks or wire transfers separate from the checks or wire transfers used to pay the Class M Deficiency Amount with other funds available to make such payment. However, the amount of any payment of principal or of interest on the Class M Certificates to be paid from funds transferred from the

(c) The Trustee shall establish a separate Eligible Account for the benefit of Holders of the Certificates and the Certificate Insurer referred to herein as the "Certificate Insurance Payment Account" over which the Trustee shall have exclusive control and sole right of withdrawal. The Trustee shall deposit upon receipt any amount paid under the Certificate Insurance Policy in the Certificate Insurance Payment Account and distribute such amount only for purposes of payment to the Class M Certificateholders of the Class M Insured Payment for which a claim was made and such amount may not be applied to satisfy any costs, expenses or liabilities of the Servicer, the Trustee or the Trust Fund. Amounts paid under the Certificate Insurance Policy, to the extent needed to pay the Class M Deficiency Amount shall be transferred to the Distribution Account on the related Distribution Date and disbursed by the Trustee to the Class M Certificateholders in accordance with Section 6.05. It shall not be necessary for such payments to be made by checks or wire transfers separate from the checks or wire transfers used to pay the Class M Deficiency Amount with other funds available to make such payment. However, the amount of any payment of principal or of interest on the Class M Certificates to be paid from funds transferred from the Certificate Insurance Payment Account shall be noted as provided in paragraph (d) below in the Certificate Register and in the statement to be furnished to Holders of the Class M Certificates pursuant to Section 6.07. Funds held in the Certificate Insurance Payment Account shall not be invested. Any funds remaining in the Certificate Insurance Payment Account on the first Business Day following a Distribution Date shall be returned to the Certificate Insurer pursuant to the written instructions of the Certificate Insurer by the end of such Business Day. (d) The Trustee shall keep a complete and accurate record of the amount of interest and principal paid in respect of any Class M Certificate from moneys received under the Certificate Insurance Policy. The Certificate Insurer shall have the right to inspect such records at reasonable times during normal business hours upon one Business Day's prior notice to the Trustee. (e) In the event that the Trustee has received a certified copy of an order of the appropriate court that any Class M Insured Payment has been voided in whole or in part as a preference payment under applicable bankruptcy law, the Trustee shall so notify the Certificate Insurer, shall comply with the provisions of the Certificate Insurance Policy to obtain payment by the Certificate Insurer of such voided Class M Insured Payment, and shall, at the time it provides notice to the Certificate Insurer, notify, by mail to the Certificateholders of the affected Class M Certificates that, in the event any Certificateholder's Class M Insured Payment is so voided, such Certificateholder will be entitled to payment pursuant to the Certificate Insurance Policy, a copy of which shall be made available through the Trustee, the Certificate Insurer or the Certificate Insurer's fiscal agent, if any, and the Trustee shall furnish to the Certificate Insurer or its fiscal agent, if any, its records evidencing the payments which have been made by the Trustee and subsequently recovered from the Certificateholders, and dates on which such payments were made. (f) The Trustee shall promptly notify the Certificate Insurer of any proceeding or the institution of any action, of which a Responsible Officer of the Trustee has actual knowledge, seeking the avoidance as a preferential transfer under applicable bankruptcy, insolvency, receivership or similar law (a "Class M Preference Claim") of any distribution made with respect to the Class M Certificates. Each Class M Certificateholder, by its purchase of a Class M Certificate, the Servicer and the Trustee agree that, the Certificate Insurer may at any time during the continuation of any proceeding relating to a Class M Preference Claim direct all matters relating to such Class M Preference Claim, including, without limitation, (i) the direction of any appeal of any order relating to such Class M Preference Claim and (ii) the posting of any surety, supersedeas or performance bond pending any such appeal. In addition and without limitation of the foregoing, the Certificate Insurer shall be subrogated to, and each Class M Certificateholder, the Servicer and the Trustee hereby delegate and assign to the Certificate Insurer, to the fullest extent permitted by law, the rights of the Servicer, the Trustee and each Class M Certificateholder in the conduct of any such Class M Preference Claim, including, without limitation, all rights of any party to any adversary proceeding or action with respect to any court order issued in connection with any such Class M Preference Claim. 88

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

(g) The Trustee shall, upon retirement of the Class M Certificates, furnish to the Certificate Insurer a notice of such retirement, and, upon retirement of the Class M Certificates and the expiration of the term of the Certificate Insurance Policy, surrender the Certificate Insurance Policy to the Certificate Insurer for cancellation. Section 6.05 Distributions. No later than 12:00 noon, New York, New York time on the Servicer Remittance Date, the Servicer shall deliver to the Trustee and the Back-up Servicer a report in computer-readable form containing such information as to enable the Trustee to make the distributions pursuant to clauses (a) through (d) below, and such other information as the Trustee shall reasonably require. With respect to amounts held in the Distribution Account, on each Distribution Date, the Trustee shall make the following allocations, disbursements and transfers in the following order of priority, and each such allocation, transfer and disbursement shall be treated as having occurred only after all preceding allocations, transfers and disbursements have occurred: (a) Allocations of Available Amount. On each Distribution Date, the Trustee, as paying agent, or any other paying agent appointed by the Trustee (the "Paying Agent"), based solely on the information received from the Servicer in the Servicer Remittance Report prior to such Distribution Date shall make the following disbursements and transfers from the Available Amount then on deposit in the Distribution Account and, with respect to the Class M Certificate only, any Class M Insured Payment for such Distribution Date, in the following order of priority until such amounts have been fully distributed: (i) first, to the Servicer, the Servicing Fee, to the extent such amounts were not retained by the Servicer from collections; (ii) second, to the Trustee, the Trustee Fee; (iii) third, to the Back-up Servicer, the Back-up Servicing Fee and any amounts owing to the Back-up Servicer in connection with the transfer of servicing after the resignation or removal of the Servicer, in an amount not to exceed $200,000 in the aggregate for any servicing transfer that has been effected; 89

(iv) fourth, concurrently, (i) to the Certificate Insurer, the Premium Amount then due to it, and (ii) to the Interest Rate Hedge Payment Fund (as a distribution to the Holders of the Class I Certificates), the Class I Distribution Amount; (v) fifth, concurrently, to the Class A and Class A-IO Certificates and then to the Class M Certificates, in that order, the Class Monthly Interest and any Class Interest Carryover Shortfall for each such Class (or, following a Separation Event, concurrently, to the Class A and Class A-IO Certificates, and then to the Class M-1, Class M-2 and Class M-3 Certificates, in that order); (vi) sixth, to the Class A Certificates, the Class A Principal Distribution Amount; (vii) seventh, to the Certificate Insurer, the Reimbursement Amount, if any; (viii) eighth, to the Class M Certificates, the Class M Principal Distribution Amount (or, following a Separation Event, to the Class M-1, Class M-2 and Class M-3 Certificates, the Class M-1, Class M-2 and Class M-3 Principal Distribution Amounts, respectively, in that order); (ix) ninth, to the Net WAC Cap Carryover Fund (as a distribution to the Holders of the Class X Certificates), the lesser of (x) the Class X Distribution Amount and (y) the WAC Excess; (x) tenth, to the Trustee, to the extent not previously paid, an amount equal to the sum of all reimbursable expenses incurred in connection with its duties and obligations under this Agreement and for any indemnity amounts payable to the Trustee under this Agreement; (xi) eleventh, to the Back-up Servicer, to the extent not paid pursuant to clause (iii) above, any amounts owing to the Back-up Servicer in connection with the transfer of servicing after the resignation or removal of the Servicer;

(iv) fourth, concurrently, (i) to the Certificate Insurer, the Premium Amount then due to it, and (ii) to the Interest Rate Hedge Payment Fund (as a distribution to the Holders of the Class I Certificates), the Class I Distribution Amount; (v) fifth, concurrently, to the Class A and Class A-IO Certificates and then to the Class M Certificates, in that order, the Class Monthly Interest and any Class Interest Carryover Shortfall for each such Class (or, following a Separation Event, concurrently, to the Class A and Class A-IO Certificates, and then to the Class M-1, Class M-2 and Class M-3 Certificates, in that order); (vi) sixth, to the Class A Certificates, the Class A Principal Distribution Amount; (vii) seventh, to the Certificate Insurer, the Reimbursement Amount, if any; (viii) eighth, to the Class M Certificates, the Class M Principal Distribution Amount (or, following a Separation Event, to the Class M-1, Class M-2 and Class M-3 Certificates, the Class M-1, Class M-2 and Class M-3 Principal Distribution Amounts, respectively, in that order); (ix) ninth, to the Net WAC Cap Carryover Fund (as a distribution to the Holders of the Class X Certificates), the lesser of (x) the Class X Distribution Amount and (y) the WAC Excess; (x) tenth, to the Trustee, to the extent not previously paid, an amount equal to the sum of all reimbursable expenses incurred in connection with its duties and obligations under this Agreement and for any indemnity amounts payable to the Trustee under this Agreement; (xi) eleventh, to the Back-up Servicer, to the extent not paid pursuant to clause (iii) above, any amounts owing to the Back-up Servicer in connection with the transfer of servicing after the resignation or removal of the Servicer; (xii) twelfth, to the Servicer to the extent of any unreimbursed Periodic Advances and Servicing Advances; (xiii) thirteenth, subject to the provisions of Section 6.13, to the Class X Certificates, the Class X Distribution Amount less any amounts thereof applied pursuant to clauses (ix) through (xii); and (xiv) fourteenth, to the Class R Certificates, any remaining amount. (b) Allocation of Pre-Funding Amounts. In addition to the foregoing, if any Pre-Funding Amount remains on deposit in the Pre-Funding Account, if any, at the end of the Pre-Funding Period, such remaining amount will be included in the Principal Distribution Amount and applied to the mandatory payment of the Class A and Class M Certificates, in accordance with paragraph (a) above, on the first Distribution Date following the end of the PreFunding Period. 90

(c) Allocation of Mortgage Loan Interest Shortfalls. On any Distribution Date, any Mortgage Loan Interest Shortfalls for such Distribution Date will be allocated as a reduction of the following amounts in the following order of priority: (i) to the amount payable to or in respect of the Class X Certificates; and (ii) pro rata, as a reduction of the Class Monthly Interest for the Class A, Class A-IO and Class M Certificates, based on the amount of interest to which such Classes would otherwise be entitled. (d) Allocation of Applied Realized Loss Amounts. If, on any Distribution Date, after giving effect to all distributions of principal as described above (excluding any Class M Insured Principal Payment for such Distribution Date), the aggregate Certificate Principal Balance of the Offered Certificates exceeds the Current Pool Principal Balance for that Distribution Date, the Certificate Principal Balance of the Class M Certificates will be reduced by an amount equal to that excess, until the Certificate Principal Balance of the Class M Certificates

(c) Allocation of Mortgage Loan Interest Shortfalls. On any Distribution Date, any Mortgage Loan Interest Shortfalls for such Distribution Date will be allocated as a reduction of the following amounts in the following order of priority: (i) to the amount payable to or in respect of the Class X Certificates; and (ii) pro rata, as a reduction of the Class Monthly Interest for the Class A, Class A-IO and Class M Certificates, based on the amount of interest to which such Classes would otherwise be entitled. (d) Allocation of Applied Realized Loss Amounts. If, on any Distribution Date, after giving effect to all distributions of principal as described above (excluding any Class M Insured Principal Payment for such Distribution Date), the aggregate Certificate Principal Balance of the Offered Certificates exceeds the Current Pool Principal Balance for that Distribution Date, the Certificate Principal Balance of the Class M Certificates will be reduced by an amount equal to that excess, until the Certificate Principal Balance of the Class M Certificates is reduced to zero. Any Applied Realized Loss Amounts allocated to the Class M Certificates shall be allocated to the Class M-3 Component, the Class M-2 Component and the Class M-1 Component, in that order, until the Component Principal Balance of each component is reduced to zero. The Certificate Insurer will be obligated to pay to the Holders of the Class M Certificates pursuant to the Certificate Insurance Policy an amount equal to the Applied Realized Loss Amount for such Distribution Date (after taking into account any funds in the Interest Rate Hedge Payment Fund to be applied on such Distribution Date towards the payment of such Applied Realized Loss Amount pursuant to Section 6.10(d)), but in no event will such payment by the Certificate Insurer be more than the Class M Collateralization Deficit. Section 6.06 Investment of Accounts. (a) So long as no Event of Default shall have occurred and be continuing, and consistent with any requirements of the Code, all or a portion of any Account (other than the Certificate Insurance Payment Account) held by the Trustee shall be invested and reinvested by the Trustee, as directed in writing by the Servicer, in one or more Permitted Investments bearing interest or sold at a discount. If an Event of Default shall have occurred and be continuing or if the Servicer does not provide investment directions, the Trustee shall invest all Accounts in Permitted Investments described in paragraph (v) of the definition of Permitted Investments. No such investment in any Account shall mature later than the Business Day immediately preceding the next Distribution Date. (b) Subject to Section 6.01(b), if any amounts are needed for disbursement from any Account held by the Trustee and sufficient uninvested funds are not available to make such disbursement, the Trustee shall cause to be sold or otherwise converted to cash a sufficient amount of the investments in such Account. The Trustee shall not be, and the Servicer shall be, liable for any investment loss or other charge resulting therefrom unless the Trustee's failure to perform in accordance with this Section 6.06 is the cause of such loss or charge. (c) Subject to Section 9.01 hereof, the Trustee shall not in any way be held liable by reason of any insufficiency in any Account held by the Trustee resulting from any investment loss on any Permitted Investment included therein (except to the extent that the Trustee is the obligor and has defaulted thereon or as provided in subsection (b) of this Section 6.06). 91

(d) So long as no Event of Default shall have occurred and be continuing, all net income and gain realized from investment of, and all earnings on, funds deposited in any Account (other than the Certificate Insurance Payment Account) shall be for the benefit of the Servicer as servicing compensation (in addition to the Servicing Fee). The Servicer shall deposit in the related Account the amount of any loss incurred in respect of any Permitted Investment held therein which is in excess of the income and gain thereon immediately upon realization of such loss, without any right to reimbursement therefor from its own funds. Section 6.07 Reports. (a) On each Distribution Date the Trustee shall forward to each Holder, the Underwriters, the Depositor, the Back-up Servicer, the Certificate Insurer and the Rating Agencies the report provided by the Servicer pursuant to Section 6.05 (the "Servicer Remittance Report"), setting forth information including, without limitation, the following:

(d) So long as no Event of Default shall have occurred and be continuing, all net income and gain realized from investment of, and all earnings on, funds deposited in any Account (other than the Certificate Insurance Payment Account) shall be for the benefit of the Servicer as servicing compensation (in addition to the Servicing Fee). The Servicer shall deposit in the related Account the amount of any loss incurred in respect of any Permitted Investment held therein which is in excess of the income and gain thereon immediately upon realization of such loss, without any right to reimbursement therefor from its own funds. Section 6.07 Reports. (a) On each Distribution Date the Trustee shall forward to each Holder, the Underwriters, the Depositor, the Back-up Servicer, the Certificate Insurer and the Rating Agencies the report provided by the Servicer pursuant to Section 6.05 (the "Servicer Remittance Report"), setting forth information including, without limitation, the following: (i) the amount of the distribution with respect to each Class of Certificates; (ii) the amount of such distributions allocable to principal, separately identifying the aggregate amount of any Principal Prepayments or other unscheduled recoveries of principal included therein and separately identifying any Overcollateralization Increase Amounts; (iii) the amount of such distributions allocable to interest and the calculation thereof; (iv) the Certificate Principal Balance of each Class of Offered Certificates, other than the Class A-IO Certificates, as of such Distribution Date, together with the principal amount of each such Class (based on a Certificate in an original principal amount of $1,000) then outstanding, in each case after giving effect to any payment of principal on such Distribution Date; (v) the Class A-IO Notional Balance then outstanding as of such Distribution Date, after giving effect to any payment of interest on such Distribution Date; (vi) the amount of any Class M Insured Payment included in the amounts distributed to the Class M Certificateholders on such Distribution Date; (vii) the total of any Substitution Adjustments and any Loan Repurchase Price amounts included in such distribution; and (viii) the amounts, if any, of any Liquidated Loan Losses for consumer purpose loans and for business purpose loans for the related Due Period and cumulative Liquidated Loan Losses since the Startup Day for consumer purpose loans and for business purpose loans. Items (i), (ii) and (iii) above shall, with respect to the Offered Certificates (other than the Class A-IO Certificates), be presented on the basis of a Certificate having a $1,000 denomination. In addition, by January 31 of each calendar year following any year during which the Certificates are outstanding, the Trustee shall furnish a report to each Holder of record if so requested in writing at any time during each calendar year as to the aggregate of amounts reported pursuant to (i), (ii) and (iii) with respect to the Certificates for such calendar year. 92

(b) All distributions made to the Certificateholders of each Class as a Class on each Distribution Date will be made on a pro rata basis among the Certificateholders of each Class on the next preceding Record Date based on the Percentage Interest represented by their respective Certificates, and shall be made by wire transfer of immediately available funds to the account of such Certificateholder at a bank or other entity having appropriate facilities therefor, if, in the case of a Holder of an Offered Certificate, such Certificateholder shall own of record Certificates of the same Class which have denominations aggregating at least $5,000,000 appearing in the Certificate Register and shall have provided complete wiring instructions at least five Business Days prior to the Record Date, and otherwise by check mailed to the address of such Certificateholder appearing in the Certificate Register. (c) In addition, the Servicer Remittance Report described in subsection (a) above forwarded by the Trustee to

(b) All distributions made to the Certificateholders of each Class as a Class on each Distribution Date will be made on a pro rata basis among the Certificateholders of each Class on the next preceding Record Date based on the Percentage Interest represented by their respective Certificates, and shall be made by wire transfer of immediately available funds to the account of such Certificateholder at a bank or other entity having appropriate facilities therefor, if, in the case of a Holder of an Offered Certificate, such Certificateholder shall own of record Certificates of the same Class which have denominations aggregating at least $5,000,000 appearing in the Certificate Register and shall have provided complete wiring instructions at least five Business Days prior to the Record Date, and otherwise by check mailed to the address of such Certificateholder appearing in the Certificate Register. (c) In addition, the Servicer Remittance Report described in subsection (a) above forwarded by the Trustee to each Holder, to the Underwriters, to the Servicer, to the Back-up Servicer, to the Depositor, to the Certificate Insurer and to the Rating Agencies on each Distribution Date, shall include the following information with respect to all Mortgage Loans 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 Trustee for such purpose and to the Certificate 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); (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); 93

(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;

(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 and the Rolling Three Month Delinquency Rate; (x) the aggregate Principal Balance of the three largest Mortgage Loans; and (xi) the total number of Mortgage Loans and the Aggregate Principal Balance. (d) No later than 12:00 noon, New York, New York time on the Servicer Remittance Date, the Servicer shall deliver to the Back-up Servicer an electronic transmission acceptable to the Back-up Servicer containing the Servicer Remittance Report and the Required Information with respect to such Servicer Remittance Date. No later than three (3) Business Days after each Servicer Remittance Date, the Back-up Servicer shall use such electronic transmission acceptable to the Back-up Servicer to (i) confirm that such electronic transmission is in readable form and (ii) compare the following information contained in the Servicer Remittance Report with that contained in the Required Information: (A) the total number of Mortgage Loans, (B) the aggregate Principal Balance of the Mortgage Loans and (C) the weighted average Mortgage Interest Rate. The Back-up Servicer shall report any inconsistencies to the Servicer and the Trustee (unless the Back-up Servicer and the Trustee are the same party). The Back-up Servicer shall only review the information provided by the Servicer in the Servicer Remittance Report and in the Required Information and its obligation to report any inconsistencies shall be limited to those apparent from the Back-up Servicer's review thereof and those relating to the total number of Mortgage Loans, the aggregate Principal Balance of the Mortgage Loans or the weighted average Mortgage Interest Rate. In the event that the Back-up Servicer reports any discrepancies, the Servicer and the Back-up Servicer shall attempt to reconcile such discrepancies prior to the next succeeding Distribution Date, but in the absence of a reconciliation, the Servicer's Remittance Report shall control for the purpose of calculations and distributions with respect to the next succeeding Distribution Date. In the event that the Back-up Servicer and the Servicer are unable to reconcile discrepancies with respect to a Servicer's Remittance Report by the next succeeding Distribution Date, the Servicer shall cause a firm of independent certified public accountants, at the Servicer's expense, to audit the Servicer's Remittance Report and, prior to the last day of the month after the month in which such Servicer's Remittance Report was delivered, reconcile the discrepancies. The effect, if any, of such reconciliation shall be reflected in the Servicer's Remittance Report for the next succeeding Distribution Date. Other than the duties specifically set forth in this Agreement, the Back-up Servicer shall have no obligations hereunder, including, without limitation, to supervise, verify, monitor or administer the performance of the Servicer. The Back-up Servicer shall have no liability for any actions taken or omitted by the Servicer. 94

Section 6.08 Additional Reports by Trustee. (a) The Trustee shall report to the Depositor, the Certificate Insurer and the Servicer with respect to the amount then held in each Account (including investment earnings accrued or scheduled to accrue) held by the Trustee and the identity of the investments included therein, as the Depositor, the Certificate Insurer or the Servicer may from time to time request in writing. (b) From time to time, at the request of the Certificate Insurer, the Trustee shall report to the Certificate Insurer

Section 6.08 Additional Reports by Trustee. (a) The Trustee shall report to the Depositor, the Certificate Insurer and the Servicer with respect to the amount then held in each Account (including investment earnings accrued or scheduled to accrue) held by the Trustee and the identity of the investments included therein, as the Depositor, the Certificate Insurer or the Servicer may from time to time request in writing. (b) From time to time, at the request of the Certificate Insurer, the Trustee shall report to the Certificate Insurer with respect to its actual knowledge, without independent investigation, of any breach of any of the representations or warranties relating to individual Mortgage Loans set forth in any Unaffiliated Seller's Agreement or in Section 3.01 or 3.02 hereof. The Trustee shall also provide the Certificate Insurer such other information as may be reasonably requested by them. Section 6.09 Compensating Interest. Not later than the Servicer Remittance Date, the Servicer shall remit to the Trustee (without right of reimbursement therefor) for deposit into the Distribution Account an amount equal to the lesser of (a) the aggregate of the Prepayment Interest Shortfalls for the related Distribution Date resulting from Principal Prepayments during the related Due Period and (b) its aggregate Monthly Servicing Fees received in the related Due Period and shall not have the right to reimbursement therefor (the "Compensating Interest"); provided, however, that Compensating Interest with respect to any Mortgage Loan and any Distribution Date shall not exceed the Servicing Fees due in respect of such Mortgage Loan on such Distribution Date. Section 6.10 Supplemental Interest Trust; Net WAC Cap Carryover Fund; Interest Rate Hedge Payment Fund. (a) The parties hereto do hereby create and establish a trust, the "ABFS Mortgage Loan Supplemental Interest Trust 2003-1" (the "Supplemental Interest Trust"). The Supplemental Interest Trust shall hold (i) a trust account at the corporate trust office of the Trustee (the "Net WAC Cap Carryover Fund"), to be held by the Trustee in its name on behalf of the Supplemental Interest Trust, (ii) a trust account at the corporate trust office of the Trustee (the "Interest Rate Hedge Payment Fund"), to be held by the Trustee in its name on behalf of the Supplemental Interest Trust and (iii) the Interest Rate Hedge Agreement. None of the assets of the Supplemental Interest Trust shall be considered assets of the REMIC Trust, and (x) any amounts transferred from the REMIC Trust to the Net WAC Cap Carryover Fund shall be treated as distributions with respect to the Class X Certificates and (y) any amounts transferred from the REMIC Trust to the Interest Rate Hedge Payment Fund shall be treated as distributions with respect to the Class I Certificates. The Trustee shall deposit all Hedge Payments and Hedge Termination Payments received from the Hedge Counterparty under the Interest Payment Hedge Agreement into the Interest Rate Hedge Payment Fund. 95

(b) On each Distribution Date, the Paying Agent shall, based on the distribution information provided by the Servicer, withdraw all amounts on deposit in the Net WAC Cap Carryover Fund on such Distribution Date and pay to the applicable owners of each Net WAC Cap Carryover Right (which owners shall, in the absence of contrary instructions received by the Trustee from the applicable Holders of the Capped Certificates, be the Holders of the related Capped Certificates) or the owners of the Class X Certificates, as applicable, the following amounts in the following priority: (i) to the Class A Certificates, the Net WAC Cap Carryover Amount for such Class; (ii) to the Class M Certificates (or, following a Separation Event, to the Class M-1, Class M-2 and Class M-3 Certificates, in that order), the Net WAC Cap Carryover Amount; and (iii) to the owners of the Class X Certificates pro rata in accordance with their Percentage Interests, any remaining amounts. (c) On each Distribution Date, the Paying Agent shall, based on the distribution information provided by the Servicer, withdraw all amounts on deposit in the Interest Rate Hedge Payment Fund representing the Class I Distribution Amount for such Distribution Date, and distribute such amount, first, to the to Hedge Counterparty, an amount equal to the Hedge Premium for such Distribution Date and, second, for distribution in accordance with Section 6.10(d) below, any remaining amounts. (d) On each Distribution Date, the Paying Agent shall, based on the distribution information provided by the

(b) On each Distribution Date, the Paying Agent shall, based on the distribution information provided by the Servicer, withdraw all amounts on deposit in the Net WAC Cap Carryover Fund on such Distribution Date and pay to the applicable owners of each Net WAC Cap Carryover Right (which owners shall, in the absence of contrary instructions received by the Trustee from the applicable Holders of the Capped Certificates, be the Holders of the related Capped Certificates) or the owners of the Class X Certificates, as applicable, the following amounts in the following priority: (i) to the Class A Certificates, the Net WAC Cap Carryover Amount for such Class; (ii) to the Class M Certificates (or, following a Separation Event, to the Class M-1, Class M-2 and Class M-3 Certificates, in that order), the Net WAC Cap Carryover Amount; and (iii) to the owners of the Class X Certificates pro rata in accordance with their Percentage Interests, any remaining amounts. (c) On each Distribution Date, the Paying Agent shall, based on the distribution information provided by the Servicer, withdraw all amounts on deposit in the Interest Rate Hedge Payment Fund representing the Class I Distribution Amount for such Distribution Date, and distribute such amount, first, to the to Hedge Counterparty, an amount equal to the Hedge Premium for such Distribution Date and, second, for distribution in accordance with Section 6.10(d) below, any remaining amounts. (d) On each Distribution Date, the Paying Agent shall, based on the distribution information provided by the Servicer, withdraw all amounts on deposit in the Interest Rate Hedge Payment Fund representing Hedge Payments and any Hedge Termination Payments for such Distribution Date and any Retained Hedge Amounts (as defined below) from any previous Distribution Dates and distribute such amounts to the applicable owners of each Interest Rate Hedge Payment Right, pro rata (which owners shall, in the absence of contrary instructions received by the Trustee from the applicable Holders of the Class M Certificates, be the Holders of the related Class M Certificates), in an amount not greater than the sum of the Class Monthly Interest, any Class Interest Carryover Shortfall and any Applied Realized Loss Amounts, in each case, for the Class M Certificates for such Distribution Date. If, on any Distribution Date, the sum of the Hedge Payments and any Hedge Termination Payments for such Distribution Date are greater than the sum of the Class Monthly Interest, any Class Interest Shortfall and any Applied Realized Loss Amounts for the Class M Certificates for such Distribution Date, 50% of such excess amount shall be distributed by the Paying Agent to the Holders of the Class I Certificates and the remaining 50% of such excess amount shall be retained in the Interest Rate Hedge Payment Fund for distribution on future Distribution Dates (such retained amount being the "Retained Hedge Amount"). On each Distribution Date on or after the Stepdown Date, if the aggregate Retained Hedge Amount remaining on deposit in the Interest Rate Hedge Payment Fund following distributions to the Holders of the Class M Certificates on such Distribution Date is greater than 0.50% of the Certificate Principal Balance of the Class M Certificates on such Distribution Date (after all distributions pursuant to Section 6.05 and this Section 6.10), such excess amount shall be distributed by the Paying Agent to the Holders of the Class I Certificates. 96

(e) The Paying Agent, on behalf of the Supplemental Interest Trust, shall comply with all requirements of the Code and applicable state and local law with respect to the withholding from any distributions made by it to any Person entitled thereto of any applicable withholding taxes imposed thereon and with respect to any applicable reporting requirements in connection therewith. (f) Notwithstanding any other provision of this Section 6.10, the Net WAC Cap Carryover Rights shall be separately transferable from the related Capped Certificates, and the Interest Rate Hedge Payment Rights shall be separately transferable from the related Class M Certificates, in each case, subject to the restrictions on transfer set forth in Article IV hereof. Section 6.11 Effect of Payments by the Certificate Insurer; Subrogation. Anything herein to the contrary notwithstanding, any payment with respect to principal of or interest on the Class M Certificates which is made with moneys received pursuant to the terms of the Certificate Insurance Policy shall not be considered payment of

(e) The Paying Agent, on behalf of the Supplemental Interest Trust, shall comply with all requirements of the Code and applicable state and local law with respect to the withholding from any distributions made by it to any Person entitled thereto of any applicable withholding taxes imposed thereon and with respect to any applicable reporting requirements in connection therewith. (f) Notwithstanding any other provision of this Section 6.10, the Net WAC Cap Carryover Rights shall be separately transferable from the related Capped Certificates, and the Interest Rate Hedge Payment Rights shall be separately transferable from the related Class M Certificates, in each case, subject to the restrictions on transfer set forth in Article IV hereof. Section 6.11 Effect of Payments by the Certificate Insurer; Subrogation. Anything herein to the contrary notwithstanding, any payment with respect to principal of or interest on the Class M Certificates which is made with moneys received pursuant to the terms of the Certificate Insurance Policy shall not be considered payment of the Class M Certificates from the Trust Fund. The Depositor, the Servicer and the Trustee acknowledge, and each Holder by its acceptance of a Class M Certificate agrees, that without the need for any further action on the part of the Certificate Insurer, the Depositor, the Servicer, the Trustee or the Certificate Registrar (a) to the extent the Certificate Insurer makes payments, directly or indirectly, on account of principal of or interest on the Class M Certificates to the Holders of such Class M Certificates, the Certificate Insurer will be fully subrogated to, and each Class M Certificateholder, the Servicer and the Trustee hereby delegate and assign to the Certificate Insurer, to the fullest extent permitted by law, the rights of such Holders to receive such principal and interest from the Trust Fund, including, without limitation, any amounts due to the Class M Certificateholders in respect of securities law violations arising from the offer and sale of the Class M Certificates, and (b) the Certificate 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 and Indemnity Agreement. The Trustee and the Servicer shall cooperate in all respects with any reasonable request by the Certificate Insurer for action to preserve or enforce the Certificate Insurer's rights or interests under this Agreement without limiting the rights or affecting the interests of the Holders as otherwise set forth herein. Section 6.12 Additional Rights of Certificate Insurer. (a) The Trustee, the Depositor and the Servicer shall cooperate in all respects with any reasonable request by the Certificate Insurer for action to preserve or enforce the Certificate Insurer's rights or interests hereunder without limiting the rights or affecting the interests of the Certificateholders as otherwise set forth herein. 97

(b) The Certificate Insurer will have the right to exercise all rights, including voting rights, which the Holders of the Class M Certificates are entitled to exercise under this Agreement, under the Unaffiliated Seller Agreement or any other instrument, document or agreement relating to the foregoing. In addition, the Certificate Insurer shall have the right to participate in, to direct the enforcement or defense of, and, at the Certificate Insurer's sole option, to institute or assume the defense of, any action, proceeding or investigation for any remedy available to the Trustee with respect to any matter that could adversely affect the Trust, the Trust Fund or the rights or obligations of the Certificate Insurer hereunder, under the Unaffiliated Seller Agreement, under the Insurance and Indemnity Agreement or under the Certificate Insurance Policy or any other instrument, document or agreement relating to the foregoing (collectively, the "Transaction Documents") or under the other Transaction Documents, including (without limitation) any insolvency or bankruptcy proceeding in respect of any Originator, the Unaffiliated Seller, the Servicer, the Depositor or any Affiliate thereof provided, that such participation or direction shall not be in conflict with any rule of law or with the terms of this Agreement. Following written notice to the Trustee, the Certificate Insurer shall have exclusive right to determine, in its sole discretion, the actions necessary to preserve and protect the Trust and the Trust Fund. The Certificate Insurer shall be entitled to reimbursement from the Distribution Account as provided for in Section 6.05 for all out-of-pocket costs and expenses of the Certificate Insurer in connection with such action, proceeding or investigation, including (without limitation) reasonable attorneys' fees and any judgment or settlement entered into affecting the Certificate Insurer or the Certificate Insurer's interests, all of which shall be included in the Reimbursement Amount. (c) In connection with any such action, proceeding or investigation for any remedy available to the Trustee with respect to any matter that could adversely affect the Trust, the Trust Fund or the rights or obligations of the Certificate Insurer hereunder or under the Certificate Insurance Policy or the Transaction Documents, including

(b) The Certificate Insurer will have the right to exercise all rights, including voting rights, which the Holders of the Class M Certificates are entitled to exercise under this Agreement, under the Unaffiliated Seller Agreement or any other instrument, document or agreement relating to the foregoing. In addition, the Certificate Insurer shall have the right to participate in, to direct the enforcement or defense of, and, at the Certificate Insurer's sole option, to institute or assume the defense of, any action, proceeding or investigation for any remedy available to the Trustee with respect to any matter that could adversely affect the Trust, the Trust Fund or the rights or obligations of the Certificate Insurer hereunder, under the Unaffiliated Seller Agreement, under the Insurance and Indemnity Agreement or under the Certificate Insurance Policy or any other instrument, document or agreement relating to the foregoing (collectively, the "Transaction Documents") or under the other Transaction Documents, including (without limitation) any insolvency or bankruptcy proceeding in respect of any Originator, the Unaffiliated Seller, the Servicer, the Depositor or any Affiliate thereof provided, that such participation or direction shall not be in conflict with any rule of law or with the terms of this Agreement. Following written notice to the Trustee, the Certificate Insurer shall have exclusive right to determine, in its sole discretion, the actions necessary to preserve and protect the Trust and the Trust Fund. The Certificate Insurer shall be entitled to reimbursement from the Distribution Account as provided for in Section 6.05 for all out-of-pocket costs and expenses of the Certificate Insurer in connection with such action, proceeding or investigation, including (without limitation) reasonable attorneys' fees and any judgment or settlement entered into affecting the Certificate Insurer or the Certificate Insurer's interests, all of which shall be included in the Reimbursement Amount. (c) In connection with any such action, proceeding or investigation for any remedy available to the Trustee with respect to any matter that could adversely affect the Trust, the Trust Fund or the rights or obligations of the Certificate Insurer hereunder or under the Certificate Insurance Policy or the Transaction Documents, including (without limitation) any insolvency or bankruptcy proceeding in respect of any Originator, the Unaffiliated Seller, the Servicer, the Depositor, the Trust or any Affiliate thereof, the Trustee hereby agrees to cooperate with, and to take such action as reasonably directed in writing by, the Certificate Insurer, including (without limitation) entering into such agreements and settlements as the Certificate Insurer shall direct, in its sole discretion, without the consent of any Certificateholder. Notwithstanding any other provision herein or in any of the other Transaction Documents, the Trustee shall not be liable to the Certificate Insurer or any Certificateholder for any such action that conforms to the direction of the Certificate Insurer. (d) Any judgment or settlement entered against or affecting the Trust or the Trust Fund in connection with any action, proceeding or investigation shall be paid by the Trustee from the Trust Fund out of funds that would otherwise be distributed to the Holders of the Class X or R Certificates. (e) The Trustee hereby agrees to provide to the Certificate Insurer prompt written notice of any action, proceeding or investigation that names the Trust or the Trustee as a party or that could adversely affect the Trust, the Trust Fund or the rights or obligations of the Certificate Insurer hereunder or under the Certificate Insurance Policy or the Transaction Documents, including (without limitation) any insolvency or bankruptcy proceeding in respect of any Originator, the Unaffiliated Seller, the Servicer, the Depositor, the Trust or any Affiliate thereof. (f) Notwithstanding anything contained herein or in any of the other Transaction Documents to the contrary, the Trustee shall not, without the Certificate Insurer's prior written consent or unless directed in writing by the Certificate Insurer, undertake or join any litigation or agree to any settlement of any action, proceeding or investigation affecting the Trust, the Trust Fund or the rights or obligations of the Certificate Insurer hereunder or under the Certificate Insurance Policy or the Transaction Documents. 98

(g) Each Holder of a Certificate, by acceptance of its Certificate, and the Trustee agree that Certificate Insurer shall have such rights as set forth in this Section, which are in addition to any rights of the Certificate Insurer pursuant to the other provisions of the Transaction Documents, that the rights set forth in this Section may be exercised by the Certificate Insurer, in its sole discretion, without the need for the consent or approval of any Certificateholder or the Trustee, notwithstanding any other provision contained herein or in any of the other Transaction Documents, and that nothing contained in this Section shall be deemed to be an obligation of the Certificate Insurer to exercise any of the rights provided for herein. (h) The Trustee shall, upon reasonable prior written request, permit any representative of the Certificate Insurer,

(g) Each Holder of a Certificate, by acceptance of its Certificate, and the Trustee agree that Certificate Insurer shall have such rights as set forth in this Section, which are in addition to any rights of the Certificate Insurer pursuant to the other provisions of the Transaction Documents, that the rights set forth in this Section may be exercised by the Certificate Insurer, in its sole discretion, without the need for the consent or approval of any Certificateholder or the Trustee, notwithstanding any other provision contained herein or in any of the other Transaction Documents, and that nothing contained in this Section shall be deemed to be an obligation of the Certificate Insurer to exercise any of the rights provided for herein. (h) The Trustee shall, upon reasonable prior written request, permit any representative of the Certificate Insurer, during the Trustee's normal business hours, to examine all books of accounts, records, reports and other information of the Trustee relating to the Certificates and the Trust Fund (including, without limitation, the Mortgage Files), to make copies and extracts therefrom and to discuss the Trustee's performance of its duties with respect to the Transaction Documents with the Responsible Officers of the Trustee. Section 6.13 Special Reserve Account. On or prior to the Distribution Date occurring in October 2005, the Trustee shall establish and maintain a Special Reserve Account which shall be titled "Special Reserve Account, JPMorgan Chase Bank, as trustee for the registered holders of the ABFS Mortgage Loan Trust 2003-1, Mortgage Pass-Through Certificates, Series 2003-1, Class M", which account shall be an Eligible Account held by the Trustee on behalf of the Class M Certificateholders and the Certificate Insurer. If, on any Distribution Date occurring from October 2005 through March 2006, the Current Pool Principal Balance (after giving effect to distributions on such Distribution Date) has been reduced to less than 50.0% of the Maximum Pool Principal Balance, the Paying Agent shall deposit into the Special Reserve Account, from the amount otherwise distributable to the Holders of the Class X Certificates pursuant to Section 6.05(a)(xiii) hereof on such Distribution Date, an amount equal to 28% of the Principal Distribution Amount for such Distribution Date, or such lesser amount as would have been distributable to the Holders of the Class X Certificates. Any amounts on deposit in the Special Reserve Account on any Distribution Date shall be available for the payment of, and deposited by the Paying Agent into the Distribution Account in satisfaction of, any Class M Insured Payment that would otherwise be required to be made by the Certificate Insurer on such Distribution Date. Provided that no Trigger Event is then in effect, all amounts on deposit in the Special Reserve Account on the April 2006 Distribution Date (after giving effect to distributions on such Distribution Date) will be distributed by the Paying Agent to the Holders of the Class X Certificates. In the event that any amounts remain on deposit in the Special Reserve Account on the date of termination of this Agreement pursuant to Article VIII (after the making of all payments to the Certificateholders, the Trustee and the Certificate Insurer), any remaining amounts on deposit in the Special Reserve Account shall be distributed to the Holders of the Class X Certificates. 99

ARTICLE VII DEFAULT Section 7.01 Events of Default. (a) In case one or more of the following events (each an "Event of Default") shall occur and be continuing: (i) any failure by the Servicer to remit to the 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 Certificate Insurer by the Trustee or to the Servicer and the Trustee by the Certificate Insurer or the Certificateholders of Offered Certificates 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 Trustee or to the Servicer and the Trustee by any Certificateholder or the Certificate Insurer; (iii) any failure on the part of the Servicer duly to observe or perform in any material respect any other of the

ARTICLE VII DEFAULT Section 7.01 Events of Default. (a) In case one or more of the following events (each an "Event of Default") shall occur and be continuing: (i) any failure by the Servicer to remit to the 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 Certificate Insurer by the Trustee or to the Servicer and the Trustee by the Certificate Insurer or the Certificateholders of Offered Certificates 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 Trustee or to the Servicer and the Trustee by any Certificateholder or the Certificate 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 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, as the case may be, by the Depositor or the Trustee or to the Servicer and the Trustee by any Certificateholder or the Certificate Insurer; (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 liquidator 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 fortyfive (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 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; 100

(vii) if on any Distribution Date a Servicer Termination Loss Trigger Event occurs; (viii) the Certificate Insurer shall notify the Trustee and the Servicer in writing of any "event of default" on the part of the Servicer under the Insurance and Indemnity Agreement; or (ix) any Change of Control shall occur; then, and in each and every such case, so long as such Event of Default shall not have been remedied: (x) with respect solely to clause (i) above, 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 time on the fourth Business Day prior to the applicable Distribution Date, the Trustee, upon receipt of written notice or discovery by a Responsible Officer of such failure, shall give immediate telephonic notice of such failure to a Servicing Officer of the Servicer and to the Certificate Insurer and the Trustee may, at the written direction of the Majority Certificateholders, with the written consent of the Certificate Insurer, and shall, at the written direction of the

(vii) if on any Distribution Date a Servicer Termination Loss Trigger Event occurs; (viii) the Certificate Insurer shall notify the Trustee and the Servicer in writing of any "event of default" on the part of the Servicer under the Insurance and Indemnity Agreement; or (ix) any Change of Control shall occur; then, and in each and every such case, so long as such Event of Default shall not have been remedied: (x) with respect solely to clause (i) above, 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 time on the fourth Business Day prior to the applicable Distribution Date, the Trustee, upon receipt of written notice or discovery by a Responsible Officer of such failure, shall give immediate telephonic notice of such failure to a Servicing Officer of the Servicer and to the Certificate Insurer and the Trustee may, at the written direction of the Majority Certificateholders, with the written consent of the Certificate Insurer, and shall, at the written direction of the Certificate Insurer, terminate all of the rights and obligations of the Servicer under this Agreement and the Backup Servicer, 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; (y) with respect to clause (ix) above, such Event of Default shall be waived in the event the Servicer receives the written consent of the Certificate Insurer, such consent not to be unreasonably withheld; and (z) with respect to any other Event of Default, the Trustee may, at the written direction of the Majority Certificateholders, with the written consent of the Certificate Insurer, and shall, at the written direction of the Certificate Insurer, by notice in writing to the Servicer and a Responsible Officer of the Trustee, terminate all the rights and obligations of the Servicer under this Agreement 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 Back-up Servicer or such other Person as may be specified by the Certificate Insurer and the Back-up Servicer 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 Trustee and the Back-up Servicer 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 Back-up Servicer 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 Trustee shall promptly notify the Certificate Insurer and the Rating Agencies of the occurrence of an Event of Default. 101

Section 7.02 Back-up Servicer to Act; Appointment of Successor. (a) On and after the time the Servicer receives a notice of termination pursuant to Section 7.01, or the Trustee receives the resignation of the Servicer evidenced by an Opinion of Counsel pursuant to Section 5.21, the Trustee shall promptly notify the Rating Agencies and the Certificate Insurer and, except as otherwise provided in Section 7.01, the Back-up Servicer or such other Person as may be specified by the Certificate 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 Back-up Servicer 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 3.03. The Back-up Servicer, as successor servicer, shall be obligated to pay Compensating Interest pursuant to Section 6.09 in any event and to make advances pursuant to Section 5.18 unless, and only to the extent the Back-up Servicer 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 Back-up Servicer delivered to the Certificate Insurer. (b) Notwithstanding the above, the Trustee may, if the Back-up Servicer shall be unwilling to so act, or shall, if

Section 7.02 Back-up Servicer to Act; Appointment of Successor. (a) On and after the time the Servicer receives a notice of termination pursuant to Section 7.01, or the Trustee receives the resignation of the Servicer evidenced by an Opinion of Counsel pursuant to Section 5.21, the Trustee shall promptly notify the Rating Agencies and the Certificate Insurer and, except as otherwise provided in Section 7.01, the Back-up Servicer or such other Person as may be specified by the Certificate 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 Back-up Servicer 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 3.03. The Back-up Servicer, as successor servicer, shall be obligated to pay Compensating Interest pursuant to Section 6.09 in any event and to make advances pursuant to Section 5.18 unless, and only to the extent the Back-up Servicer 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 Back-up Servicer delivered to the Certificate Insurer. (b) Notwithstanding the above, the Trustee may, if the Back-up Servicer shall be unwilling to so act, or shall, if the Back-up Servicer is unable to so act or if the Certificate Insurer so requests in writing to the Trustee, appoint, pursuant to such direction of the Certificate Insurer, or if no such direction is provided to the Trustee, pursuant to the provisions set forth in paragraph (c) below, or petition a court of competent jurisdiction to appoint, any established mortgage loan servicing institution acceptable to the Certificate 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 Back-up Servicer 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; it being understood that, in such event, the Back-up Servicer would no longer be entitled to the Back-up Servicing Fee. In the event the Back-up Servicer is unable or unwilling to act as successor servicer, the 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 days after any such public announcement, the 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 Trustee shall deduct from any sum received by the 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 Backup Servicer. After such deductions, the remainder of such sum shall be paid by the Trustee to the Servicer at the time of such sale, transfer and assignment to the Servicer's successor. 102

(d) The Trustee and such successor servicer (including, without limitation, the Back-up Servicer) shall take such action, consistent with this Agreement, as shall be necessary to effectuate any such succession. The Servicer agrees to cooperate with the Trustee and any successor servicer in effecting the termination of the Servicer's servicing responsibilities and rights hereunder and shall promptly provide the 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 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 Trustee and remitted directly to the Trustee or, at the direction of the Trustee, to the successor servicer. In connection with any failure by the Servicer to make any remittance required to be made by the Servicer to the Collection Account pursuant to this Section 7.01 on the day and by the time such remittance is required to be made under the terms of this Section 7.01 (without giving effect to any grace or cure period), the Servicer shall pay to the Trustee for the account of the Trustee interest at the Late Payment Rate on any amount not timely remitted from and including the day such

(d) The Trustee and such successor servicer (including, without limitation, the Back-up Servicer) shall take such action, consistent with this Agreement, as shall be necessary to effectuate any such succession. The Servicer agrees to cooperate with the Trustee and any successor servicer in effecting the termination of the Servicer's servicing responsibilities and rights hereunder and shall promptly provide the 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 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 Trustee and remitted directly to the Trustee or, at the direction of the Trustee, to the successor servicer. In connection with any failure by the Servicer to make any remittance required to be made by the Servicer to the Collection Account pursuant to this Section 7.01 on the day and by the time such remittance is required to be made under the terms of this Section 7.01 (without giving effect to any grace or cure period), the Servicer shall pay to the Trustee for the account of the Trustee interest at the Late Payment Rate on any amount not timely remitted from and including the day such remittance was required to be made to, but not including, the day on which such remittance was actually made. Neither the Trustee nor any successor servicer shall be held liable by reason of any failure to make, or any delay in making, any distribution 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 to the Servicer under this Agreement shall be effective until the Certificate Insurer shall have consented in writing thereto, and written notice of such proposed appointment shall have been provided by the Trustee to each Certificateholder and to the Certificate Insurer. The Back-up Servicer shall not resign as servicer until a successor servicer has been appointed or until a successor servicer reasonably acceptable to the Certificate Insurer has been appointed in accordance with paragraph (c) above. The Certificate Insurer shall have the right to remove the Back-up Servicer (or any successor Servicer) as successor Servicer under this Section 7.02 without cause, and the Trustee shall appoint such other successor Servicer as directed in writing by the Certificate Insurer. (e) Pending appointment of a successor to the Servicer hereunder, the Back-up Servicer shall act in such capacity as hereinabove provided. In connection with such appointment and assumption, the Trustee may make such arrangements for the compensation of such successor out of payments on Mortgage Loans as the Certificate Insurer and such successor shall agree; provided, however, that unless otherwise agreed by the Certificate 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 Back-up Servicer, the Trustee and such successor 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 Certificateholders may, on behalf of all Certificateholders, and subject to the written consent of the Certificate Insurer, waive any events permitting removal of the Servicer as servicer pursuant to this Article VII; provided, however, that the Majority Certificateholders may not waive a default in making a required distribution on a Certificate without the consent of the holder of such Certificate. Upon any waiver of a past default, such default shall cease to exist, and any 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 Trustee to the Rating Agencies and the Certificate Insurer. 103

Section 7.04 Rights of the Certificate Insurer to Exercise Rights of Certificateholders. By accepting its Certificate, each Certificateholder agrees that the Certificate Insurer shall be deemed to be the Certificateholders for all purposes (other than with respect to the receipt of payment on the Certificates) and shall have the right to exercise all rights of the Certificateholders under this Agreement and under the Certificates without any further consent of the Certificateholders, including, without limitation: (a) the right to require the Unaffiliated Seller to repurchase Mortgage Loans pursuant to Section 2.06 or 3.03 hereof to the extent set forth in such Sections;

Section 7.04 Rights of the Certificate Insurer to Exercise Rights of Certificateholders. By accepting its Certificate, each Certificateholder agrees that the Certificate Insurer shall be deemed to be the Certificateholders for all purposes (other than with respect to the receipt of payment on the Certificates) and shall have the right to exercise all rights of the Certificateholders under this Agreement and under the Certificates without any further consent of the Certificateholders, including, without limitation: (a) the right to require the Unaffiliated Seller to repurchase Mortgage Loans pursuant to Section 2.06 or 3.03 hereof to the extent set forth in such Sections; (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 in writing waivers of Servicer defaults pursuant to Section 7.03 hereof; (c) the right to direct in writing the actions of the Trustee during the continuance of an 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 direct in writing the Trustee to investigate certain matters pursuant to Section 9.02(a)(v) hereof; (f) the right to direct in writing the removal of the Trustee pursuant to Section 9.07 hereof; (g) 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 (h) any rights or remedies expressly given the Majority Certificateholders. In addition, each Certificateholder agrees that, subject to Section 10.02, the rights specifically enumerated above may only be exercised by the Certificateholders with the prior written consent of the Certificate Insurer. Section 7.05 Trustee To Act Solely with Consent of the Certificate Insurer. The Trustee shall not, without the Certificate Insurer's written consent or unless directed in writing by the Certificate 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 104

(c) undertake any litigation. The Certificate 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 Certificate Insurer's consent for any period of time. Section 7.06 Mortgage Loans, Trust Fund and Accounts Held for Benefit of the Certificate Insurer. (a) The Trustee shall hold the Trust Fund and shall cause the Collateral Agent on its behalf to hold the Mortgage Files for the benefit of the Certificateholders and the Certificate Insurer and all references in this Agreement and in the Certificates to the benefit of Holders of the Certificates shall be deemed to include the Certificate Insurer. The Trustee shall cooperate in all reasonable respects with any reasonable request by the Certificate Insurer for action to preserve or enforce the Certificate Insurer's rights or interests under this Agreement and the Certificates unless, as stated in an Opinion of Counsel addressed to the Trustee and the Certificate Insurer, such action is adverse to the interests of the Certificateholders or diminishes the rights of the Certificateholders or imposes additional burdens or restrictions on the Certificateholders. (b) The Servicer hereby acknowledges and agrees that it shall service the Mortgage Loans for the benefit of the Certificateholders and for the benefit of the Certificate Insurer, and all references in this Agreement to the benefit

(c) undertake any litigation. The Certificate 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 Certificate Insurer's consent for any period of time. Section 7.06 Mortgage Loans, Trust Fund and Accounts Held for Benefit of the Certificate Insurer. (a) The Trustee shall hold the Trust Fund and shall cause the Collateral Agent on its behalf to hold the Mortgage Files for the benefit of the Certificateholders and the Certificate Insurer and all references in this Agreement and in the Certificates to the benefit of Holders of the Certificates shall be deemed to include the Certificate Insurer. The Trustee shall cooperate in all reasonable respects with any reasonable request by the Certificate Insurer for action to preserve or enforce the Certificate Insurer's rights or interests under this Agreement and the Certificates unless, as stated in an Opinion of Counsel addressed to the Trustee and the Certificate Insurer, such action is adverse to the interests of the Certificateholders or diminishes the rights of the Certificateholders or imposes additional burdens or restrictions on the Certificateholders. (b) The Servicer hereby acknowledges and agrees that it shall service the Mortgage Loans for the benefit of the Certificateholders and for the benefit of the Certificate Insurer, and all references in this Agreement to the benefit of or actions on behalf of the Certificateholders shall be deemed to include the Certificate Insurer. Section 7.07 Certificate Insurer Default. (a) Except as specifically set forth in Section 7.07(b) and notwithstanding anything elsewhere in this Agreement or in the Certificates to the contrary, if a Certificate Insurer Default exists and is continuing, or if and to the extent the Certificate 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 Certificate Insurer to exercise rights of the Certificateholders, (b) restrict the ability of the Certificateholders, the Servicer or the Trustee to act without the consent or approval of the Certificate Insurer, (c) provide that a particular act or thing must be acceptable to the Certificate Insurer, (d) permit the Certificate Insurer to direct (or otherwise to require) the actions of the Trustee, the Servicer or the Certificateholders, (e) provide that any action or omission taken with the consent, approval or authorization of the Certificate 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 suspended and shall be of no further force and effect and the Trustee shall administer the Trust Fund and perform its obligations hereunder solely for the benefit of the Holders of the Certificates. Nothing in the foregoing sentence, nor any action taken pursuant thereto or in compliance therewith, shall be deemed to have released the Certificate Insurer from any obligation or liability it may have to any party or to the Certificateholders hereunder, under any other agreement, instrument or document (including, without limitation, the Certificate Insurance Policy) or under applicable law. Notwithstanding anything elsewhere in this Agreement to the contrary, at such time as the Class M Certificates are no longer outstanding hereunder, the Certificate Insurance Policy has terminated in accordance with its terms and no amounts owed to the Certificate Insurer hereunder and under the Insurance and Indemnity Agreement and no Reimbursement Amounts remain unpaid, the Certificate Insurer's rights hereunder shall terminate. 105

(b) Notwithstanding anything elsewhere in this Agreement to the contrary, none of the following rights of the Certificate Insurer shall be suspended even if a Certificate Insurer Default shall have occurred and be continuing: (i) the right to receive any Premium Amount, any Reimbursement Amounts and any and all other amounts due under this Agreement and the Insurance and Indemnity Agreement; (ii) any subrogation right with respect to payments made by the Certificate Insurer under the Certificate Insurance Policy; (iii) the right to receive notices, reports, opinions and certifications; (iv) the right to give notice of any Event of Default under this Agreement and any "event of default" under the Insurance and Indemnity Agreement; (v) the right to consent to any amendment pursuant to Section 11.03; and

(b) Notwithstanding anything elsewhere in this Agreement to the contrary, none of the following rights of the Certificate Insurer shall be suspended even if a Certificate Insurer Default shall have occurred and be continuing: (i) the right to receive any Premium Amount, any Reimbursement Amounts and any and all other amounts due under this Agreement and the Insurance and Indemnity Agreement; (ii) any subrogation right with respect to payments made by the Certificate Insurer under the Certificate Insurance Policy; (iii) the right to receive notices, reports, opinions and certifications; (iv) the right to give notice of any Event of Default under this Agreement and any "event of default" under the Insurance and Indemnity Agreement; (v) the right to consent to any amendment pursuant to Section 11.03; and (vi) the right to consent to termination of this Agreement under Section 8.01(a) if such termination would result in a draw under the Certificate Insurance Policy or failure to pay all amounts owed to the Certificate Insurer under this Agreement and the Insurance and Indemnity Agreement. ARTICLE VIII TERMINATION Section 8.01 Termination. (a) Subject to Section 8.02, this Agreement shall terminate upon notice to the Trustee of the later of the distribution to Certificateholders of the final payment with respect to the Certificates and the full and final payment of all Reimbursement Amounts, Premium Amounts, Trustee Fees and other amounts due and payable to the Certificate Insurer and Trustee, or the disposition of all funds with respect to the last Mortgage Loan and the remittance of all funds due hereunder; provided, however, that in no event shall the Trust established by this Agreement terminate later than: (i) twenty-one years after the death of the last surviving lineal descendant of Joseph P. Kennedy, late Ambassador of the United States to the Court of St. James, alive as of the date hereof or (ii) the Distribution Date in December 2034. (b) In addition, subject to Section 8.02, Servicer may, at its option and at its sole cost and expense, elect to cause this Agreement to be terminated and all the Offered Certificates to be redeemed in whole, but not in part, on the first Distribution Date after any Distribution Date on which the Aggregate Principal Balance is equal to or less than 10% of the Maximum Pool Principal Balance (the "Clean-Up Call Date") by purchasing, on such succeeding Distribution Date, all of the outstanding Mortgage Loans and REO Properties at a price equal to the sum of (i) 100% of the aggregate Principal Balance of each outstanding Mortgage Loan and each REO Property, (ii) the greater of (1) the aggregate amount of accrued and unpaid interest on the Mortgage Loans through the related Due Period and (2) 30 days' accrued interest thereon computed at a rate equal to the related Mortgage Interest Rate, in each case net of the Servicing Fee, (iii) any Back-up Servicer Fees or other amounts due to the Back-up Servicer hereunder, (iv) any and all Reimbursement Amounts and Premium Amounts and any other amounts due to the Certificate Insurer under this Agreement and the Insurance and Indemnity Agreement and (v) any Trustee Fees or other amounts due to the Trustee hereunder (the "Termination Price"); provided, that in no event will the Termination Price be less than the sum of the aggregate Certificate Principal Balance of the Offered Certificates, plus all accrued and unpaid Premium Amounts, Reimbursement Amounts and all accrued and unpaid interest on the Offered Certificates plus all amounts due the Trustee and the Back-up Servicer hereunder plus all unreimbursed Periodic Advances and Servicing Advances. Any such purchase shall be accomplished by deposit of the Termination Price into the Distribution Account. No such termination is permitted without the prior written consent of the Certificate Insurer if it would result in a draw on the Certificate Insurance Policy or the failure to pay any and all amounts owed to the Certificate Insurer under this Agreement or the Insurance and Indemnity Agreement. 106

(c) If on any Distribution Date, the Servicer determines that there are no outstanding Mortgage Loans and no

(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 Fund other than funds in the Distribution Account, the Servicer shall send a final distribution notice promptly to each such Certificateholder and the Certificate Insurer in accordance with paragraph (d) below. (d) Notice of any termination, specifying the Distribution Date upon which the Trust Fund will terminate and the Certificateholders shall surrender their Certificates to the Trustee for payment of the final distribution and cancellation, shall be given promptly by the Servicer by letter to the Certificateholders and the Certificate Insurer mailed during the month of such final distribution before the Servicer Remittance Date in such month, specifying (i) the Distribution Date upon which final payment of the Certificates will be made upon presentation and surrender of Certificates at the office of the 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 Certificates at the office of the Trustee therein specified. The Servicer shall give such notice to the Trustee therein specified. The Servicer shall give such notice to the Trustee at the time such notice is given to Certificateholders. The obligations of the Certificate Insurer hereunder shall terminate upon the deposit by the Servicer with the Trustee of a sum sufficient to purchase all of the Mortgage Loans and REO Properties as set forth above or when the Certificate Principal Balance of the Class M Certificates falls to zero. (e) In the event that all of the Certificateholders shall not surrender their Certificates for cancellation within six months after the time specified in the above-mentioned written notice, the Servicer shall give a second written notice to the remaining Certificateholders to surrender their Certificates for cancellation and receive the final distribution with respect thereto. If within six months after the second notice, all of the Certificates shall not have been surrendered for cancellation, the Trustee may take appropriate steps, or may appoint an agent to take appropriate steps, to contact the remaining Certificateholders concerning surrender of their Certificates and the cost thereof shall be paid out of the funds and other assets which remain subject hereto. If within nine months after the second notice all the Certificates shall not have been surrendered for cancellation, the Class R Certificateholders shall be entitled to all unclaimed funds and other assets which remain subject hereto and the Trustee upon transfer of such funds shall be discharged of any responsibility for such funds and the Certificateholders shall look only to the Class R Certificateholders for payment and not to the Certificate Insurer or the Trustee. Such funds shall remain uninvested. 107

Section 8.02 Additional Termination Requirements. (a) In the event that the Servicer exercises its purchase option as provided in Section 8.01, the Trust Fund shall be terminated in accordance with the following additional requirements, unless the Trustee and the Certificate Insurer have been furnished with an Opinion of Counsel to the effect that the failure of the Trust Fund to comply with the requirements of this Section 8.02 will not (i) result in the imposition of taxes on "prohibited transactions" of any REMIC created hereunder as defined in Section 860F of the Code or (ii) cause any REMIC created hereunder to fail to qualify as a REMIC at any time that any Offered Certificates or Class X or Class I Certificates are outstanding: (i) Within 90 days prior to the final Distribution Date the Servicer shall adopt and the Trustee shall sign, a plan of complete liquidation of each REMIC created hereunder meeting the requirements of a "Qualified Liquidation" under Section 860F of the Code and any regulations thereunder; (ii) At or after the time of adoption of such a plan of complete liquidation and at or prior to the final Distribution Date, the Trustee shall sell all of the assets of the REMIC I to the Servicer for cash; and (iii) At the time of the making of the final payment on the Certificates, the Trustee shall distribute or credit, or cause to be distributed or credited (A) to the Class A Certificateholders, the Class A Certificate Principal Balance, plus one month's interest thereon at the Class A Pass-Through Rate, (B) to the Class A-IO Certificateholders, one month's interest on the Class A-IO Notional Amount, if any, at the Class A-IO PassThrough Rate, (C) to the Class M Certificateholders, the Class M Certificate Principal Balance, plus one month's interest thereon at the Class M Pass-Through Rate, (D) to the Certificate Insurer any and all amounts due the Certificate Insurer under this Agreement or the Insurance and Indemnity Agreement and unpaid, including all Reimbursement Amounts, (E) to the Class X Certificateholders, all cash on hand after such payment to the Class

Section 8.02 Additional Termination Requirements. (a) In the event that the Servicer exercises its purchase option as provided in Section 8.01, the Trust Fund shall be terminated in accordance with the following additional requirements, unless the Trustee and the Certificate Insurer have been furnished with an Opinion of Counsel to the effect that the failure of the Trust Fund to comply with the requirements of this Section 8.02 will not (i) result in the imposition of taxes on "prohibited transactions" of any REMIC created hereunder as defined in Section 860F of the Code or (ii) cause any REMIC created hereunder to fail to qualify as a REMIC at any time that any Offered Certificates or Class X or Class I Certificates are outstanding: (i) Within 90 days prior to the final Distribution Date the Servicer shall adopt and the Trustee shall sign, a plan of complete liquidation of each REMIC created hereunder meeting the requirements of a "Qualified Liquidation" under Section 860F of the Code and any regulations thereunder; (ii) At or after the time of adoption of such a plan of complete liquidation and at or prior to the final Distribution Date, the Trustee shall sell all of the assets of the REMIC I to the Servicer for cash; and (iii) At the time of the making of the final payment on the Certificates, the Trustee shall distribute or credit, or cause to be distributed or credited (A) to the Class A Certificateholders, the Class A Certificate Principal Balance, plus one month's interest thereon at the Class A Pass-Through Rate, (B) to the Class A-IO Certificateholders, one month's interest on the Class A-IO Notional Amount, if any, at the Class A-IO PassThrough Rate, (C) to the Class M Certificateholders, the Class M Certificate Principal Balance, plus one month's interest thereon at the Class M Pass-Through Rate, (D) to the Certificate Insurer any and all amounts due the Certificate Insurer under this Agreement or the Insurance and Indemnity Agreement and unpaid, including all Reimbursement Amounts, (E) to the Class X Certificateholders, all cash on hand after such payment to the Class A, Class A-IO and Class M Certificateholders and to the Certificate Insurer (but in no event in excess of the Class X Distribution Amount), and (F) to the Class R Certificates in respect of the Class R-I Interest, any remaining amounts (other than cash retained to meet claims) and the Trust Fund shall terminate at such time; provided, however, that any such payment will be made after all outstanding fees, costs and expenses of the Trustee have been paid in full. (b) By their acceptance of the Certificates, 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 Certificateholders hereby appoint the Trustee as their attorney in fact to sign such plan) as appropriate or upon the written request of the Certificate 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. 108

Section 8.03 Accounting Upon Termination of Servicer. Upon termination of the Servicer, the Servicer shall, at its expense: (a) deliver to its successor or, if none shall yet have been appointed, to the Trustee, the funds in any Account; (b) deliver to its successor or, if none shall yet have been appointed, to the Collateral Agent on behalf of the Trustee all Mortgage Files and related documents and statements held by it hereunder and a Mortgage Loan portfolio computer tape; (c) deliver to its successor or, if none shall yet have been appointed, to the Trustee and, upon request, to the Certificateholders 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 (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 its successor 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

Section 8.03 Accounting Upon Termination of Servicer. Upon termination of the Servicer, the Servicer shall, at its expense: (a) deliver to its successor or, if none shall yet have been appointed, to the Trustee, the funds in any Account; (b) deliver to its successor or, if none shall yet have been appointed, to the Collateral Agent on behalf of the Trustee all Mortgage Files and related documents and statements held by it hereunder and a Mortgage Loan portfolio computer tape; (c) deliver to its successor or, if none shall yet have been appointed, to the Trustee and, upon request, to the Certificateholders 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 (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 its successor 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 TRUSTEE Section 9.01 Duties of Trustee. (a) The Trustee, prior to the occurrence of an Event of Default of which a Responsible Officer of the Trustee 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 of the Trustee shall have actual knowledge has occurred and has not been cured or waived, the Trustee 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 Trustee, upon receipt of all resolutions, certificates, statements, opinions, reports, documents, orders or other instruments furnished to the Trustee 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 Trustee shall not be responsible for the accuracy or content of any resolution, certificate, statement, opinion, report, document, order or other instrument furnished by the Servicer, the Back-up Servicer (if not the Trustee) or the Unaffiliated Seller hereunder. If any such instrument is found not to conform on its face to the requirements of this Agreement, the Trustee will, at the expense of the Servicer, notify the Certificate Insurer of such instrument in the event the Trustee, after so requesting, does not receive a satisfactorily corrected instrument. 109

(c) No provision of this Agreement shall be construed to relieve the Trustee 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 of the Trustee shall have actual knowledge, and after the curing of all such Events of Default which may have occurred, the duties and obligations of the Trustee shall be determined solely by the express provisions of this Agreement, the Trustee 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 Trustee and, in the absence of bad faith on the part of the Trustee, the Trustee 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 Trustee and conforming to the requirements of this Agreement; (ii) the Trustee shall not be personally liable for an error of judgment made in good faith by a Responsible Officer or other officers of the Trustee, unless it shall be proved that the Trustee was negligent in ascertaining the

(c) No provision of this Agreement shall be construed to relieve the Trustee 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 of the Trustee shall have actual knowledge, and after the curing of all such Events of Default which may have occurred, the duties and obligations of the Trustee shall be determined solely by the express provisions of this Agreement, the Trustee 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 Trustee and, in the absence of bad faith on the part of the Trustee, the Trustee 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 Trustee and conforming to the requirements of this Agreement; (ii) the Trustee shall not be personally liable for an error of judgment made in good faith by a Responsible Officer or other officers of the Trustee, unless it shall be proved that the Trustee was negligent in ascertaining the pertinent facts; (iii) the Trustee 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 written direction of the Certificate Insurer or, with the written consent of the Certificate Insurer, at the written direction of the Majority Certificateholders, relating to the time, method and place of conducting any proceeding for any remedy available to the Trustee, or exercising any trust or power conferred upon the Trustee, under this Agreement; (iv) the Trustee shall not be required to take notice or be deemed to have notice or knowledge of any default, Event of Default (except an Event of Default with respect to the nonpayment of any amount described in Section 7.01(a)) or Certificate Insurer Default, unless a Responsible Officer of the Trustee shall have received written notice thereof. In the absence of receipt of such notice, the Trustee may conclusively assume that there is no default, Event of Default or Certificate Insurer Default; (v) the Trustee 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 Trustee to perform, or be responsible for the manner of performance of, any of the obligations of the Servicer under this Agreement except during such time, if any, as the Trustee shall be the successor to, and be vested with the rights, duties, powers and privileges of, the Servicer in accordance with the terms of this Agreement; and 110

(vi) subject to the other provisions of this Agreement (and except in its capacity as successor Servicer) and without limiting the generality of this Section, the Trustee 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 Fund, the Certificateholders or the Mortgage Loans, (D) to confirm or verify the contents of any reports or certificates of the Servicer delivered to the Trustee pursuant to this Agreement believed by the Trustee to be genuine and to have been signed or presented by the proper party or parties or (E) execute the certification required by the Sarbanes Oxley Act of 2002. Section 9.02 Certain Matters Affecting the Trustee. (a) Except as otherwise provided in Section 9.01: (i) the Trustee may rely and shall be protected in acting or refraining from acting upon any resolution, Officer's Certificate, Opinion of Counsel, advice 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;

(vi) subject to the other provisions of this Agreement (and except in its capacity as successor Servicer) and without limiting the generality of this Section, the Trustee 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 Fund, the Certificateholders or the Mortgage Loans, (D) to confirm or verify the contents of any reports or certificates of the Servicer delivered to the Trustee pursuant to this Agreement believed by the Trustee to be genuine and to have been signed or presented by the proper party or parties or (E) execute the certification required by the Sarbanes Oxley Act of 2002. Section 9.02 Certain Matters Affecting the Trustee. (a) Except as otherwise provided in Section 9.01: (i) the Trustee may rely and shall be protected in acting or refraining from acting upon any resolution, Officer's Certificate, Opinion of Counsel, advice 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; (ii) the Trustee may consult with counsel and any Opinion of Counsel or written advice of 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 advice of counsel; (iii) the Trustee shall be under no obligation to exercise any of the trusts or 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 Certificate Insurer or any of the Certificateholders, pursuant to the provisions of this Agreement, unless such Certificateholders or the Certificate Insurer, as applicable, shall have offered to the Trustee reasonable security or indemnity reasonably satisfactory to it against the costs, expenses and liabilities which may be incurred therein by the Trustee or thereby; nothing contained herein shall, however, relieve the Trustee of the obligation, upon the occurrence of an Event of Default of which a Responsible Officer of the Trustee 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; (iv) the Trustee 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; 111

(v) the Trustee 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 Certificate Insurer or the Majority Certificateholders; provided, however, that if the payment within a reasonable time to the Trustee of the costs, expenses or liabilities likely to be incurred by it in the making of such investigation is, in the opinion of the Trustee, not reasonably assured to the Trustee by the security afforded to it by the terms of this Agreement, the Trustee may require reasonable indemnity satisfactory to the Trustee 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 Trustee, shall be repaid by the Servicer upon demand from the Servicer's own funds; (vi) the right of the Trustee to perform any discretionary act enumerated in this Agreement shall not be construed as a duty, and the Trustee shall not be answerable for other than its negligence or willful misconduct in the performance of such act; (vii) the Trustee shall not be required to give any bond or surety in respect of the execution of the Trust created hereby or the powers granted hereunder; and (viii) the Trustee may execute any of the trusts or powers hereunder or perform any duties hereunder either

(v) the Trustee 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 Certificate Insurer or the Majority Certificateholders; provided, however, that if the payment within a reasonable time to the Trustee of the costs, expenses or liabilities likely to be incurred by it in the making of such investigation is, in the opinion of the Trustee, not reasonably assured to the Trustee by the security afforded to it by the terms of this Agreement, the Trustee may require reasonable indemnity satisfactory to the Trustee 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 Trustee, shall be repaid by the Servicer upon demand from the Servicer's own funds; (vi) the right of the Trustee to perform any discretionary act enumerated in this Agreement shall not be construed as a duty, and the Trustee shall not be answerable for other than its negligence or willful misconduct in the performance of such act; (vii) the Trustee shall not be required to give any bond or surety in respect of the execution of the Trust created hereby or the powers granted hereunder; and (viii) the Trustee may execute any of the trusts or powers hereunder or perform any duties hereunder either directly or by or through agents, attorneys or custodians and the Trustee shall not be responsible for any misconduct or negligence on the part of any such agent, attorney or custodian appointed by the Trustee with due care. (b) Following the Startup Day, the Trustee shall not knowingly accept any contribution of assets to the Trust Fund, unless the Trustee and the Certificate Insurer shall have received an Opinion of Counsel (at the expense of the Servicer) to the effect that the inclusion of such assets in the Trust Fund will not cause any REMIC created hereunder to fail to qualify as a REMIC at any time that any Certificates are outstanding or subject any REMIC created hereunder to any tax under the REMIC Provisions or other applicable provisions of federal, state and local law or ordinances. The Trustee agrees to indemnify the Trust Fund, the Certificate Insurer and the Servicer for any taxes and costs, including any attorney's fees, imposed or incurred by the Trust Fund or the Servicer as a result of the breach of the Trustee's covenants set forth within this subsection (b). Section 9.03 Trustee Not Liable for Certificates or Mortgage Loans. The recitals, representations, warranties and covenants contained herein or in the Certificates (other than the certificate of authentication on the Certificates) shall be taken as the statements, representations, warranties and covenants of the Unaffiliated Seller or the Servicer as the case may be, and the Trustee assumes no responsibility for their correctness. The Trustee makes no representations as to the validity or sufficiency of this Agreement or of any Mortgage Loan or related document. The Trustee shall not be accountable for the use or application by the Depositor of any of the Certificates or the proceeds of the Certificates, or 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 Trustee shall not be responsible for the legality or validity of the Agreement or the validity, priority, perfection or sufficiency of the security for the Certificates issued or intended to be issued hereunder. The Trustee shall have no responsibility for filing any financing or continuation statement in any public office at any time or to otherwise perfect or maintain the perfection of any security interest or lien granted to it hereunder or to record this Agreement. 112

Section 9.04 Trustee May Own Certificates. The Trustee in its individual or any other capacity may become the owner or pledgor of Certificates with the same rights it would have if it were not Trustee, and may otherwise deal with the parties hereto. Section 9.05 Trustee's Fees and Expenses; Indemnity. (a) The Trustee acknowledges that in consideration of the services rendered by the Trustee in the execution of the trust hereby created and in the exercise and performance of any of the powers and duties hereunder it is entitled to receive the Trustee's Fee in accordance with the provision of Section 6.05(a) (which shall not be limited by any provision of law in regard to the compensation of a trustee of any express trust). Additionally, the Trustee hereby covenants, for the benefit of the Depositor and the Certificate Insurer, that the Trustee has arranged separately with the Servicer for the payment or

Section 9.04 Trustee May Own Certificates. The Trustee in its individual or any other capacity may become the owner or pledgor of Certificates with the same rights it would have if it were not Trustee, and may otherwise deal with the parties hereto. Section 9.05 Trustee's Fees and Expenses; Indemnity. (a) The Trustee acknowledges that in consideration of the services rendered by the Trustee in the execution of the trust hereby created and in the exercise and performance of any of the powers and duties hereunder it is entitled to receive the Trustee's Fee in accordance with the provision of Section 6.05(a) (which shall not be limited by any provision of law in regard to the compensation of a trustee of any express trust). Additionally, the Trustee hereby covenants, for the benefit of the Depositor and the Certificate Insurer, that the Trustee has arranged separately with the Servicer for the payment or reimbursement to the Trustee of all of the Trustee's expenses in connection with this Agreement, including, without limitation, all reasonable out of pocket expenses, disbursements and advances incurred or made by the Trustee in accordance with any of the provisions of this Agreement (including the reasonable compensation and the expenses and disbursements of its counsel and of all persons not regularly in its employ). Notwithstanding any other provision of this Agreement to the contrary, the Servicer covenants and agrees to indemnify the Trustee and its officers, directors, employees and agents from, and hold it harmless against, any and all losses, liabilities, damages, claims or expenses incurred in connection with any legal action relating to this Agreement, the Certificates or incurred in connection with the administration of the Trust, other than any loss, liability or expense incurred by reason of willful misfeasance, bad faith or negligence of the Trustee in the performance of its duties hereunder or by reason of the Trustee's reckless disregard of obligations and duties hereunder. For the avoidance of doubt, the parties hereto acknowledge that it is the intent of the parties that the Depositor and the Certificate Insurer shall not pay any of the Trustee's fees and expenses in connection with this transaction. (b) The Trust Fund, the Trustee and any director, officer, employee or agent of the Trustee shall be indemnified by the Servicer and held harmless against any loss, liability, claim, damage or expense arising out of, or imposed upon the Trust or the Trustee through the Servicer's acts or omissions in violation of this Agreement, other than any loss, liability or expense incurred by reason of willful misfeasance, bad faith or negligence of the Trustee in the performance of its duties hereunder or by reason of the Trustee's reckless disregard of obligations and duties hereunder. The Servicer shall immediately notify the Trustee, the Back-up Servicer, the Custodian, the Depositor, the Certificate Insurer and all Certificateholders if a claim is made by a third party with respect to this Agreement, and the Servicer shall assume (with the consent of the Certificate Insurer) the defense of any such claim and advance all expenses in connection therewith, including reasonable counsel fees, and promptly advance funds to pay, discharge and satisfy any judgment or decree which may be entered against the Servicer, the Back-up Servicer, the Custodian, the Depositor, the Trustee, the Certificate Insurer and/or any Certificateholder in respect of such claim. The obligations of the Servicer under this Section 9.05 arising prior to any resignation or termination of the Servicer hereunder shall survive the resignation or removal of the Trustee, termination of the Servicer and payment of the Certificates, and shall extend to any co-trustee or separate trustee appointed pursuant to this Article IX. Anything in this Agreement to the contrary notwithstanding, in no event shall the Trustee be liable for special, indirect or consequential loss or damage of any kind whatsoever (including but not limited to lost profits), even if the Trustee has been advised of the likelihood of such loss or damage and regardless of the form of action. 113

Section 9.06 Eligibility Requirements for Trustee. The Trustee 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 Fund assets on behalf of the Certificateholders, (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 Certificate Insurer, and (e) reasonably acceptable to the Certificate 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, 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 Trustee shall cease to be eligible in accordance with the provisions of this Section, the Trustee shall resign immediately in the manner and with the effect specified in

Section 9.06 Eligibility Requirements for Trustee. The Trustee 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 Fund assets on behalf of the Certificateholders, (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 Certificate Insurer, and (e) reasonably acceptable to the Certificate 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, 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 Trustee shall cease to be eligible in accordance with the provisions of this Section, the Trustee shall resign immediately in the manner and with the effect specified in Section 9.07. Section 9.07 Resignation and Removal of the Trustee. (a) The Trustee may at any time resign and be discharged from the trusts hereby created by giving written notice thereof to the Servicer, the Back-up Servicer, the Rating Agencies, the Certificate Insurer and the Depositor. Upon receiving such notice of resignation, the Depositor shall, with the consent of the Certificate Insurer, promptly appoint a successor trustee by written instrument, in duplicate, which instrument shall be delivered to the resigning Trustee and to the successor trustee. A copy of such instrument shall be delivered to the Depositor, the Back-up Servicer, the Certificateholders, the Certificate Insurer and the Unaffiliated Seller by the Servicer. Unless a successor trustee shall have been so appointed and shall have accepted appointment within 30 days after the giving of such notice of resignation, the resigning Trustee may petition any court of competent jurisdiction for the appointment of a successor trustee. (b) If at any time the Trustee 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 Servicer or the Certificate Insurer, or if at any time the Trustee shall become incapable of acting, or shall be adjudged bankrupt or insolvent, or a receiver of the Trustee or of its property shall be appointed, or any public officer shall take charge or control of the Trustee or of its property or affairs for the purpose of rehabilitation, conservation or liquidation, or the Trustee shall breach any of its obligations hereunder in any material respect, then the Servicer (with the consent of the Certificate Insurer) or the Certificate Insurer may remove the Trustee and the Servicer shall, at the direction of the Certificate Insurer, within thirty (30) days after such removal, appoint a successor trustee by written instrument, in duplicate, which instrument shall be delivered to the Trustee so removed and to the successor trustee. A copy of such instrument shall be delivered to the Depositor, the Back-up Servicer, the Certificateholders, the Certificate Insurer and the Unaffiliated Seller by the Servicer. 114

(c) If the Trustee fails to perform in accordance with the terms of this Agreement, the Majority Certificateholders (with the consent of the Certificate Insurer) or the Certificate Insurer may remove the Trustee and the Depositor shall appoint a successor trustee acceptable to the Certificate Insurer, by written instrument or instruments, in triplicate, signed by such Holders or their attorneys-in-fact duly authorized, one complete set of which instruments shall be delivered to the Servicer, one complete set to the Trustee so removed and one complete set to the successor Trustee so appointed. (d) Any resignation or removal of the Trustee and appointment of a successor trustee pursuant to any of the provisions of this Section shall not become effective until acceptance of appointment by the successor trustee as provided in Section 9.08 and the satisfaction of the Rating Agency Condition. Section 9.08 Successor Trustee. Any successor trustee appointed as provided in Section 9.07 shall execute, acknowledge and deliver to the Depositor, the Certificate Insurer, the Unaffiliated Seller, the Servicer, the Backup Servicer and to its predecessor trustee an instrument accepting such appointment hereunder, and thereupon the resignation or removal of the predecessor trustee shall become effective and such successor trustee, 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 trustee herein. The predecessor trustee shall deliver to the successor trustee all Mortgage Files and related documents and statements held by it

(c) If the Trustee fails to perform in accordance with the terms of this Agreement, the Majority Certificateholders (with the consent of the Certificate Insurer) or the Certificate Insurer may remove the Trustee and the Depositor shall appoint a successor trustee acceptable to the Certificate Insurer, by written instrument or instruments, in triplicate, signed by such Holders or their attorneys-in-fact duly authorized, one complete set of which instruments shall be delivered to the Servicer, one complete set to the Trustee so removed and one complete set to the successor Trustee so appointed. (d) Any resignation or removal of the Trustee and appointment of a successor trustee pursuant to any of the provisions of this Section shall not become effective until acceptance of appointment by the successor trustee as provided in Section 9.08 and the satisfaction of the Rating Agency Condition. Section 9.08 Successor Trustee. Any successor trustee appointed as provided in Section 9.07 shall execute, acknowledge and deliver to the Depositor, the Certificate Insurer, the Unaffiliated Seller, the Servicer, the Backup Servicer and to its predecessor trustee an instrument accepting such appointment hereunder, and thereupon the resignation or removal of the predecessor trustee shall become effective and such successor trustee, 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 trustee herein. The predecessor trustee shall deliver to the successor trustee all Mortgage Files and related documents and statements held by it hereunder, and the Servicer and the predecessor trustee 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 trustee all such rights, powers, duties and obligations. No successor trustee shall accept appointment as provided in this Section unless at the time of such acceptance such successor trustee shall be eligible under the provisions of Section 9.06. Upon acceptance of appointment by a successor trustee as provided in this Section, the Servicer shall mail notice of the succession of such trustee hereunder to all Holders of Certificates at their addresses as shown in the Certificate Register and to the Rating Agencies. If the Servicer fails to mail such notice within 10 days after acceptance of appointment by the successor trustee, the successor trustee shall cause such notice to be mailed at the expense of the Servicer. Section 9.09 Merger or Consolidation of Trustee. Any Person into which the Trustee 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 Trustee shall be a party, or any corporation or national banking association succeeding to the business of the trustee, shall be the successor of the Trustee hereunder, provided 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. 115

Section 9.10 Appointment of Co-Trustee or Separate Trustee. (a) Notwithstanding any other provisions hereof, at any time, for the purpose of meeting any legal requirements of any jurisdiction in which any part of the Trust Fund or property securing the same may at the time be located, the Servicer and the Trustee acting jointly, with the consent of the Certificate Insurer, shall have the power and shall execute and deliver all instruments to appoint one or more Persons approved by the Trustee to act as co-trustee or co-trustees, jointly with the Trustee, or separate trustee or separate trustees, of all or any part of the Trust Fund, and to vest in such Person or Persons, in such capacity, such title to the Trust Fund, or any part thereof, and, subject to the other provisions of this Section 9.10 and the consent of the Certificate Insurer, such powers, duties, obligations, rights and trusts as the Servicer and the Trustee may consider necessary or desirable. If the Servicer shall not have joined in such appointment within 15 days after the receipt by it of a request so to do, or in case an Event of Default shall have occurred and be continuing, the Trustee alone, with the consent of the Certificate Insurer, shall have the power to make such appointment. No co-trustee or separate trustee hereunder shall be required to meet the terms of eligibility as a successor trustee under Section 9.06 hereunder and no notice to Holders of Certificates of the appointment of co-trustee(s) or separate trustee(s) shall be required under Section 9.08 hereof. (b) In the case of any appointment of a co-trustee or separate trustee pursuant to this Section 9.10, all rights, powers, duties and obligations conferred or imposed upon the Trustee shall be conferred or imposed upon and

Section 9.10 Appointment of Co-Trustee or Separate Trustee. (a) Notwithstanding any other provisions hereof, at any time, for the purpose of meeting any legal requirements of any jurisdiction in which any part of the Trust Fund or property securing the same may at the time be located, the Servicer and the Trustee acting jointly, with the consent of the Certificate Insurer, shall have the power and shall execute and deliver all instruments to appoint one or more Persons approved by the Trustee to act as co-trustee or co-trustees, jointly with the Trustee, or separate trustee or separate trustees, of all or any part of the Trust Fund, and to vest in such Person or Persons, in such capacity, such title to the Trust Fund, or any part thereof, and, subject to the other provisions of this Section 9.10 and the consent of the Certificate Insurer, such powers, duties, obligations, rights and trusts as the Servicer and the Trustee may consider necessary or desirable. If the Servicer shall not have joined in such appointment within 15 days after the receipt by it of a request so to do, or in case an Event of Default shall have occurred and be continuing, the Trustee alone, with the consent of the Certificate Insurer, shall have the power to make such appointment. No co-trustee or separate trustee hereunder shall be required to meet the terms of eligibility as a successor trustee under Section 9.06 hereunder and no notice to Holders of Certificates of the appointment of co-trustee(s) or separate trustee(s) shall be required under Section 9.08 hereof. (b) In the case of any appointment of a co-trustee or separate trustee pursuant to this Section 9.10, all rights, powers, duties and obligations conferred or imposed upon the Trustee shall be conferred or imposed upon and exercised or performed by the Trustee and such separate trustee or co-trustee jointly, except to the extent that under any law of any jurisdiction in which any particular act or acts are to be performed (whether as Trustee hereunder or as successor to the Servicer hereunder), the Trustee shall be incompetent or unqualified to perform such act or acts, in which event such rights, powers, duties and obligations (including the holding of title to the Trust Fund or any portion thereof in any such jurisdiction) shall be exercised and performed by such separate trustee or co-trustee at the direction of the Trustee. (c) Any notice, request or other writing given to the Trustee shall be deemed to have been given to each of the then separate trustees and co-trustees, as effectively as if given to each of them. Every instrument appointing any separate trustee or co-trustee shall refer to this Agreement and the conditions of this Article IX. Each separate trustee and co-trustee, upon its acceptance of the trusts conferred, shall be vested with the estates or property specified in its instrument of appointment, either jointly with the Trustee or separately, as may be provided therein, subject to all the provisions of this Agreement, specifically including every provision of this Agreement relating to the conduct of, affecting the liability of, or affording protection to, the Trustee. Every such instrument shall be filed with the Trustee. (d) Any separate trustee or co-trustee may, at any time, constitute the Trustee, its agent or attorney-in-fact, with full power and authority, to the extent not prohibited by law, to do any lawful act under or in respect of this Agreement on its behalf and in its name. The Trustee shall not be responsible for any action or inaction of any such separate trustee or co-trustee, provided that the Trustee appointed such separate trustee or co-trustee with due care. If any separate trustee or co-trustee shall die, become incapable of acting, resign or be removed, all of its estates, properties, rights, remedies and trusts shall vest in and be exercised by the Trustee, to the extent permitted by law, without the appointment of a new or successor trustee. Section 9.11 Tax Returns. The Tax Matters Person will prepare, sign and file all Tax Returns required to be filed by the Trust Fund in accordance with Section 11.13(a)(i). The Servicer, upon request, will promptly furnish the Trustee with all such information as may be reasonably required by the Trustee for the purpose of the Trustee responding to reasonable requests for information made by Certificateholders in connection with tax matters. 116

Section 9.12 Retirement of Certificates. The Trustee shall, upon the retirement of the Certificates pursuant hereto or otherwise, furnish to the Depositor, the Back-up Servicer, the Servicer and the Certificate Insurer a notice of such retirement, and, upon retirement of the Certificates and the expiration of the term of the Certificate Insurance Policy, shall surrender the Certificate Insurance Policy to the Certificate Insurer for cancellation. Section 9.13 Trustee May Enforce Claims Without Possession of Certificates. All rights of action and claims under this Agreement or the Certificates may be prosecuted and enforced by the Trustee without the possession

Section 9.12 Retirement of Certificates. The Trustee shall, upon the retirement of the Certificates pursuant hereto or otherwise, furnish to the Depositor, the Back-up Servicer, the Servicer and the Certificate Insurer a notice of such retirement, and, upon retirement of the Certificates and the expiration of the term of the Certificate Insurance Policy, shall surrender the Certificate Insurance Policy to the Certificate Insurer for cancellation. Section 9.13 Trustee May Enforce Claims Without Possession of Certificates. All rights of action and claims under this Agreement or the Certificates may be prosecuted and enforced by the Trustee without the possession of any of the Certificates or the production thereof in any proceeding relating thereto, any such proceeding instituted by the Trustee shall be brought in its own name or in its capacity as Trustee. Any recovery of judgment shall, after provision for the payment of the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and counsel, be for the ratable benefit of the Certificateholders in respect of which such judgment has been recovered. Section 9.14 Suits for Enforcement. In case an Event of Default or other default by the Servicer hereunder shall occur and be continuing, the Trustee shall, at the direction of the Certificate Insurer, or may, in its discretion, but subject to Section 9.01 and Section 7.01, as applicable, proceed to protect and enforce its rights and the rights of the Certificateholders and the Certificate Insurer under this Agreement by a suit, action or proceeding in equity or at law or otherwise, whether for the specific performance of any covenant or agreement contained in this Agreement or in aid of the execution of any power granted in this Agreement or for the enforcement of any other legal, equitable or other remedy, as the Trustee, being advised by counsel, shall deem most effectual to protect and enforce any of the rights of the Trustee or the Certificateholders. ARTICLE X THE COLLATERAL AGENT Section 10.01 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 applicable certification delivered pursuant to Section 2.06. 117

(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;

(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; (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 Certificate Insurer or the Trustee or with the consent of the Certificate Insurer or the 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 Trustee under this Agreement; and (v) subject to the other provisions of this Agreement and without limiting the generality of this Section 10.01, 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 Fund, the Certificateholders 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. 118

Section 10.02 Certain Matters Affecting the Collateral Agent. Except as otherwise provided in Section 10.01 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 written 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 advice of such counsel; (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 Certificate Insurer or any of the Certificateholders, pursuant to the provisions of this Agreement, unless such Certificateholders or the Certificate Insurer, as applicable, shall have offered to the Trustee reasonable security or indemnity reasonably satisfactory to it against the costs, expenses and liabilities which may be incurred therein by

Section 10.02 Certain Matters Affecting the Collateral Agent. Except as otherwise provided in Section 10.01 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 written 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 advice of such counsel; (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 Certificate Insurer or any of the Certificateholders, pursuant to the provisions of this Agreement, unless such Certificateholders or the Certificate Insurer, as applicable, shall have offered to the Trustee 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 Certificate Insurer or the Majority Certificateholders; 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; 119

(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; and (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 10.03 Collateral Agent Not Liable for Certificates 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 Certificates issued or intended to be issued under this Agreement. Section 10.04 Collateral Agent May Own Certificates. The Collateral Agent in its individual or any other capacity

(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; and (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 10.03 Collateral Agent Not Liable for Certificates 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 Certificates issued or intended to be issued under this Agreement. Section 10.04 Collateral Agent May Own Certificates. The Collateral Agent in its individual or any other capacity may become the owner or pledgor of Certificates with the same rights it would have if it were not Collateral Agent, and may otherwise deal with the parties hereto. Section 10.05 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 Certificate Insurer and the Trustee 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 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 10.05 arising prior to any resignation or termination of the Servicer hereunder shall survive termination of the Servicer and payment of the Certificates. 120

Section 10.06 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 Fund on behalf of the Trustee, for the benefit of the Certificateholders and the Certificate 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 Certificate Insurer, and (e) reasonably acceptable to the Certificate 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 10.06, 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 10.06, the Collateral Agent shall resign immediately in the manner and with the effect specified in Section 10.07. Section 10.07 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 Trustee, the Certificate Insurer and the Servicer.

Section 10.06 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 Fund on behalf of the Trustee, for the benefit of the Certificateholders and the Certificate 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 Certificate Insurer, and (e) reasonably acceptable to the Certificate 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 10.06, 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 10.06, the Collateral Agent shall resign immediately in the manner and with the effect specified in Section 10.07. Section 10.07 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 Trustee, the Certificate Insurer and the Servicer. (b) If at any time the Collateral Agent shall cease to be eligible in accordance with the provisions of Section 10.06 and shall fail to resign after written request therefor by the Trustee, the Certificate Insurer or the Servicer, 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 Trustee or the Servicer, with the consent of the Certificate Insurer, may remove the Collateral Agent. (c) If the Collateral Agent fails to perform in accordance with the terms of this Agreement, the Trustee, the Servicer or the or the Majority Certificateholders, with the consent of the Certificate Insurer, or the Certificate Insurer may remove the Collateral Agent. (d) Upon removal or receipt of notice of resignation of the Collateral Agent, the Trustee shall either (i) take possession of the 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 Trustee shall assume the duties of the Collateral Agent hereunder, it shall notify the Trust, the Depositor, the Servicer and Certificate Insurer in writing. 121

Section 10.08 Successor Collateral Agent. Upon the resignation or removal of the Collateral Agent, the Trustee may appoint a successor Collateral Agent, with the written approval of the Certificate Insurer; provided, however, that the successor Collateral Agent so appointed shall satisfy the eligibility criteria set forth in Section 10.06 hereof, shall in no event be the Unaffiliated Seller, the Depositor or the Servicer or any Person known to a Responsible Officer of the Trustee to be an Affiliate of the Unaffiliated Seller, the Depositor or the Servicer and shall be approved by the Certificate Insurer. The 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 10.08 shall execute, acknowledge and deliver to the Trust, the Depositor, the Servicer, the Back-up Servicer, the Trustee, the Certificate Insurer 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 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

Section 10.08 Successor Collateral Agent. Upon the resignation or removal of the Collateral Agent, the Trustee may appoint a successor Collateral Agent, with the written approval of the Certificate Insurer; provided, however, that the successor Collateral Agent so appointed shall satisfy the eligibility criteria set forth in Section 10.06 hereof, shall in no event be the Unaffiliated Seller, the Depositor or the Servicer or any Person known to a Responsible Officer of the Trustee to be an Affiliate of the Unaffiliated Seller, the Depositor or the Servicer and shall be approved by the Certificate Insurer. The 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 10.08 shall execute, acknowledge and deliver to the Trust, the Depositor, the Servicer, the Back-up Servicer, the Trustee, the Certificate Insurer 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 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 10.08 unless at the time of such acceptance such successor Collateral Agent shall be eligible under the provisions of Section 10.06. Upon acceptance of appointment by a successor Collateral Agent as provided in this Section 10.08, the Servicer shall mail notice of the succession of such Collateral Agent hereunder to all Certificateholders at their addresses as shown in the Certificate 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. Section 10.09 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 10.06, 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 XI MISCELLANEOUS PROVISIONS Section 11.01 Limitation on Liability of the Depositor, the Back-up Servicer and the Servicer. None of the Depositor, the Servicer, the Back-up Servicer or any of the directors, officers, employees or agents of the Depositor, the Servicer or the Back-up Servicer shall be under any liability to the Trust, the Certificateholders or the Certificate 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 Depositor, the Back-up Servicer or the Servicer or any such Person against any breach of warranties, representations, covenants or agreements made herein, or against any specific liability imposed on each such party pursuant to this Agreement or against any liability which would otherwise be imposed 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 Depositor, the Back-up Servicer or the Servicer and any director, officer, employee or agent of the Depositor, the Back-up Servicer or the Servicer 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. 122

Section 11.02 Acts of Certificateholders. (a) Except as otherwise specifically provided herein, whenever Certificateholder action, consent or approval is required under this Agreement, such action, consent or approval

Section 11.02 Acts of Certificateholders. (a) Except as otherwise specifically provided herein, whenever Certificateholder 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 Certificateholders if the Majority Certificateholders or the Certificate Insurer agrees to take such action or give such consent or approval. (b) The death or incapacity of any Certificateholder shall not operate to terminate this Agreement or the Trust Fund, nor entitle such Certificateholder'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 Fund, nor otherwise affect the rights, obligations and liabilities of the parties hereto or any of them. (c) No Certificateholder 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 Fund, or the obligations of the parties hereto, nor shall anything herein set forth, or contained in the terms of the Certificates, be construed so as to constitute the Certificateholders from time to time as partners or members of an association; nor shall any Certificateholder 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. (d) Prior to the execution of any amendment to this Agreement, the Trustee shall be entitled to receive and rely upon an Opinion of Counsel (which shall be an expense of the Trust) stating that the execution of such amendment is authorized and permitted by this Agreement. The Trustee may, but shall not be obligated to, enter into any such amendment which affects the Trustee's own rights, duties or immunities under this Agreement. Section 11.03 Amendment. (a) This Agreement may be amended from time to time by the Servicer, the Depositor and the Trustee, by written agreement, upon the prior written consent of the Certificate Insurer (which consent shall not be unreasonably withheld, delayed or conditioned if a Certificate Insurer Default shall have occurred and be continuing), without notice to or consent of the Certificateholders to cure any ambiguity, to correct or supplement any provisions herein, to comply with any changes in the Code, or to make any other provisions with respect to matters or questions arising under this Agreement which shall not be inconsistent with the provisions of this Agreement or effect a significant change in the permitted activities of the Trust; provided, however, that such change, as evidenced by an Opinion of Counsel, at the expense of the party requesting the change, delivered to the Trustee and the Certificate Insurer, (i) will not adversely affect in any material respect the interests of any Certificateholder and (ii) (x) will not adversely affect the status of any REMIC created hereunder as a REMIC, (y) will not cause a tax to be imposed on any REMIC created hereunder and (z) such change will not effect a significant change in the permitted activities of the Trust; provided, further, that no such amendment shall (x) reduce in any manner the amount of, or delay the timing of, payments received on Mortgage Loans which are required to be distributed on any Certificate without the consent of the Holder of such Certificate, or change the rights or obligations of any other party hereto without the consent of such party, or (y) amend or alter Section 2.01(b) hereof. The Trustee shall give prompt written notice to the Rating Agencies of any amendment made pursuant to this Section 11.03 or pursuant to Section 6.09 of the Unaffiliated Seller's Agreement. 123

(b) This Agreement may be amended from time to time by the Servicer, the Depositor and the Trustee, with the consent of the Certificate Insurer and the Majority Certificateholders, for the purpose of adding any provisions to or changing in any manner or eliminating any of the provisions of this Agreement or of modifying in any manner the rights of the Holders; provided, however, that no such amendment shall be made unless the Trustee and the Certificate Insurer receive an Opinion of Counsel, at the expense of the party requesting the change, that such change (x) will not adversely affect the status of any REMIC created hereunder as a REMIC, (y) will not cause a tax to be imposed on any REMIC created hereunder and (z) such change will not effect a significant change in the permitted activities of the Trust; provided, further, that no such amendment shall reduce in any manner the amount of, or delay the timing of, payments received on Mortgage Loans which are required to be distributed on any Class of Certificates without the consent of the Holders of such Class of Certificates 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 such Class of Certificates affected thereby. (c) It shall not be necessary for the consent of Holders under this Section to approve the particular form of any proposed amendment, but it shall be sufficient if such consent shall approve the substance thereof.

(b) This Agreement may be amended from time to time by the Servicer, the Depositor and the Trustee, with the consent of the Certificate Insurer and the Majority Certificateholders, for the purpose of adding any provisions to or changing in any manner or eliminating any of the provisions of this Agreement or of modifying in any manner the rights of the Holders; provided, however, that no such amendment shall be made unless the Trustee and the Certificate Insurer receive an Opinion of Counsel, at the expense of the party requesting the change, that such change (x) will not adversely affect the status of any REMIC created hereunder as a REMIC, (y) will not cause a tax to be imposed on any REMIC created hereunder and (z) such change will not effect a significant change in the permitted activities of the Trust; provided, further, that no such amendment shall reduce in any manner the amount of, or delay the timing of, payments received on Mortgage Loans which are required to be distributed on any Class of Certificates without the consent of the Holders of such Class of Certificates 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 such Class of Certificates affected thereby. (c) It shall not be necessary for the consent of Holders under this Section to approve the particular form of any proposed amendment, but it shall be sufficient if such consent shall approve the substance thereof. Section 11.04 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 the Majority Certificateholders or the Certificate Insurer. Section 11.05 Duration of Agreement. This Agreement shall continue in existence and effect until terminated as herein provided. Section 11.06 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, American Business Credit, Inc., Balapointe Office Centre, 111 Presidential Boulevard, Suite 127, Bala Cynwyd, Pennsylvania 19004, Attention: Mr. Jeffrey M. Ruben, (ii) in the case of the Unaffiliated Seller, ABFS 2003-1, Inc., Balapointe Office Centre, 111 Presidential Boulevard, Suite 127, Bala Cynwyd, Pennsylvania 19004, Attention: Mr. Jeffrey M. Ruben, (iii) in the case of the Trustee, the Collateral Agent and the Back-up Servicer, JPMorgan Chase Bank, Institutional Trust Services, 4 New York Plaza, 6th Floor, New York, New York 10004-2413, Attention: Structured Finance Services, ABFS 2003-1, (iv) in the case of the Certificateholders, as set forth in the Certificate Register, (v) in the case of Moody's Investors Service, Inc., 99 Church Street, New York, New York 10007, Attention: Home Equity Monitoring Group, (vi) in the case of Standard & Poor's, 55 Water Street, New York, New York 10041-0003, Attention: Residential Mortgage Surveillance Group, (vii) in the case of Fitch Ratings, One State Street Plaza, New York, New York 10004, Attention: Mortgage Surveillance Group, (viii) in the case of the Depositor or the Underwriter, Bear Stearns Asset Backed Securities, Inc. or Bear Stearns & Co. Inc., 383 Madison Avenue, 10th Floor, New York, New York 10179, Attention: Chief Counsel, or (ix) in the case of the Certificate Insurer, Radian Asset Assurance Inc., 335 Madison Avenue, New York, New York 10017, Attention: Chief Risk Officer and Chief Legal Officer, Re: ABFS Mortgage Loan Trust, Series 2003-1, Class M. 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 Certificateholders shall be effective upon mailing or personal delivery. 124

Section 11.07 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. Section 11.08 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 Certificateholders.

Section 11.07 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. Section 11.08 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 Certificateholders. Section 11.09 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 11.10 Successors and Assigns. This Agreement shall inure to the benefit of and be binding upon the Servicer, the Back-up Servicer, the Depositor, the Trustee, the Collateral Agent and the Certificateholders and their respective successors and permitted assigns. Section 11.11 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 11.12 Third Party Beneficiary. The parties agree that each of the Unaffiliated Seller and the Certificate Insurer is intended and shall have all rights of a third-party beneficiary of this Agreement to the same extent as if it were a party hereto, and shall have the right to enforce the provisions of this Agreement. Section 11.13 Appointment of Tax Matters Person; Certain Taxes(a). (a) The Holders of the Class R Certificates as the Tax Matters Person hereby appoint the Servicer to act, as their agent in such capacity, for each REMIC created hereunder for all purposes of the Code. The Tax Matters Person will perform, or cause to be performed, such duties and take, or cause to be taken, such actions as are required to be performed or taken by the Tax Matters Person under the code. The Holders of the Class R Certificates may hereafter appoint a different entity as their agent, or may appoint one of the Class R Certificateholders to be the Tax Matters Person. The Tax Matters Person shall: 125

(i) prepare, sign and file, or cause to be prepared and filed, in a timely manner, a U.S. Real Estate Mortgage Investment Conduit (REMIC) Income Tax Return (Form 1066) and any other Tax Return required to be filed by each REMIC created hereunder, using a calendar year as the taxable year for each REMIC created hereunder; (ii) make, or cause to be made, an election, on behalf of each REMIC created hereunder, to be treated as a REMIC on the federal tax return of each REMIC created hereunder for its first taxable year; (iii) prepare and forward, or cause to be prepared and forwarded, to the Trustee, the Certificateholders and to the Internal Revenue Service and any other relevant governmental taxing authority all information returns or reports as and when required to be provided to them in accordance with the REMIC Provisions; (iv) to the extent that the affairs of the Trust Fund are within its control, conduct such affairs of the Trust Fund at all times that any Certificates are outstanding so as to maintain the status of each REMIC created hereunder as a REMIC under the REMIC Provisions and any other applicable federal, state and local laws, including, without limitation, information reports relating to "original issue discount," as defined in the Code, based upon the Prepayment Assumption and calculated by using the issue price of the Certificates; (v) not knowingly or intentionally take any action or omit to take any action that would cause the termination of the REMIC status of any REMIC created hereunder; (vi) pay the amount of any and all federal, state, and local taxes collected from the parties provided for in Section 11.13(b), including, without limitation, upon the Trustee or the Certificateholders in connection with the Trust, the

(i) prepare, sign and file, or cause to be prepared and filed, in a timely manner, a U.S. Real Estate Mortgage Investment Conduit (REMIC) Income Tax Return (Form 1066) and any other Tax Return required to be filed by each REMIC created hereunder, using a calendar year as the taxable year for each REMIC created hereunder; (ii) make, or cause to be made, an election, on behalf of each REMIC created hereunder, to be treated as a REMIC on the federal tax return of each REMIC created hereunder for its first taxable year; (iii) prepare and forward, or cause to be prepared and forwarded, to the Trustee, the Certificateholders and to the Internal Revenue Service and any other relevant governmental taxing authority all information returns or reports as and when required to be provided to them in accordance with the REMIC Provisions; (iv) to the extent that the affairs of the Trust Fund are within its control, conduct such affairs of the Trust Fund at all times that any Certificates are outstanding so as to maintain the status of each REMIC created hereunder as a REMIC under the REMIC Provisions and any other applicable federal, state and local laws, including, without limitation, information reports relating to "original issue discount," as defined in the Code, based upon the Prepayment Assumption and calculated by using the issue price of the Certificates; (v) not knowingly or intentionally take any action or omit to take any action that would cause the termination of the REMIC status of any REMIC created hereunder; (vi) pay the amount of any and all federal, state, and local taxes collected from the parties provided for in Section 11.13(b), including, without limitation, upon the Trustee or the Certificateholders in connection with the Trust, the Trust Fund or the Mortgage Loans, prohibited transaction taxes as defined in Section 860F of the Code, other than any amount due as a result of a transfer or attempted or purported transfer in violation of Section 4.02, imposed on any REMIC created hereunder when and as the same shall be due and payable (but such obligation shall not prevent the Unaffiliated Seller or any other appropriate Person from contesting any such tax in appropriate proceedings and shall not prevent the Unaffiliated Seller from withholding payment of such tax, if permitted by law, pending the outcome of such proceedings); (vii) ensure that any such returns or reports filed on behalf of any REMIC created hereunder by the Trustee are properly executed by the appropriate person and submitted in a timely manner; 126

(viii) represent any REMIC created hereunder in any administrative or judicial proceedings relating to an examination or audit by any governmental taxing authority, request an administrative adjustment as to any taxable year of any REMIC created hereunder, enter into settlement agreements with any governmental taxing agency, extend any statute of limitations relating to any item of any REMIC created hereunder and otherwise act on behalf of each REMIC created hereunder in relation to any tax matter involving any REMIC created hereunder; (ix) as provided in Section 5.11 hereof, make available information necessary for the computation of any tax imposed (1) on transferors of residual interests to transferees that are not Permitted Transferees or (2) on passthrough entities, any interest in which is held by an entity which is not a Permitted Transferee. The Trustee covenants and agrees that it will cooperate with the Servicer in the foregoing matters and that it will sign, as Trustee, any and all Tax Returns required to be filed by each REMIC created hereunder. Notwithstanding the foregoing, at such time as the Trustee becomes the successor Servicer, the holder of the largest percentage of the Class R Certificates shall serve as Tax Matters Person until such time as an entity is appointed to succeed the Trustee as Servicer; (x) make available to the Internal Revenue Service and those Persons specified by the REMIC Provisions all information necessary to compute any tax imposed (A) as a result of the Transfer of an Ownership Interest in a Class R Certificate to any Person who is not a Permitted Transferee, including the information described in Treasury regulations sections 1.860D-1(b)(5) and 1.860E-2(a)(5) with respect to the "excess inclusions" of such Class R Certificate and (B) as a result of any regulated investment company, real estate investment trust, common trust fund, partnership, trust, estate or organization described in Section 1381 of the Code that holds an Ownership Interest in a Class R Certificate having as among its record holders at any time any Person that is not a Permitted Transferee;

(viii) represent any REMIC created hereunder in any administrative or judicial proceedings relating to an examination or audit by any governmental taxing authority, request an administrative adjustment as to any taxable year of any REMIC created hereunder, enter into settlement agreements with any governmental taxing agency, extend any statute of limitations relating to any item of any REMIC created hereunder and otherwise act on behalf of each REMIC created hereunder in relation to any tax matter involving any REMIC created hereunder; (ix) as provided in Section 5.11 hereof, make available information necessary for the computation of any tax imposed (1) on transferors of residual interests to transferees that are not Permitted Transferees or (2) on passthrough entities, any interest in which is held by an entity which is not a Permitted Transferee. The Trustee covenants and agrees that it will cooperate with the Servicer in the foregoing matters and that it will sign, as Trustee, any and all Tax Returns required to be filed by each REMIC created hereunder. Notwithstanding the foregoing, at such time as the Trustee becomes the successor Servicer, the holder of the largest percentage of the Class R Certificates shall serve as Tax Matters Person until such time as an entity is appointed to succeed the Trustee as Servicer; (x) make available to the Internal Revenue Service and those Persons specified by the REMIC Provisions all information necessary to compute any tax imposed (A) as a result of the Transfer of an Ownership Interest in a Class R Certificate to any Person who is not a Permitted Transferee, including the information described in Treasury regulations sections 1.860D-1(b)(5) and 1.860E-2(a)(5) with respect to the "excess inclusions" of such Class R Certificate and (B) as a result of any regulated investment company, real estate investment trust, common trust fund, partnership, trust, estate or organization described in Section 1381 of the Code that holds an Ownership Interest in a Class R Certificate having as among its record holders at any time any Person that is not a Permitted Transferee; (xi) pay out of its own funds, without any right of reimbursement, any and all tax related expenses of each REMIC created hereunder (including, but not limited to, tax return preparation and filing expenses and any professional fees or expenses related to audits or any administrative or judicial proceedings with respect to each REMIC created hereunder that involve the Internal Revenue Service or state tax authorities), other than the expense of obtaining any Opinion of Counsel required pursuant to Sections 3.03, 5.06(b), 5.10, 8.02, 9.02(b) and 11.03 and other than taxes except as specified herein; (xii) upon filing with the Internal Revenue Service, the Tax Matters Person shall furnish to the Holders of the Class R Certificates the Form 1066 and each Form 1066Q and the Unaffiliated Seller shall respond promptly to written requests made not more frequently than quarterly by any Holder of Class R Certificates with respect to the following matters: (A) the original projected principal and interest cash flows on the Closing Date on the regular and residual interests created hereunder and on the Mortgage Loans, based on the Prepayment Assumption; 127

(B) the projected remaining principal and interest cash flows as of the end of any calendar quarter with respect to the regular and residual interests created hereunder and the Mortgage Loans, based on the Prepayment Assumption; (C) the Prepayment Assumption and any interest rate assumptions used in determining the projected principal and interest cash flows described above; (D) the original issue discount (or, in the case of the Mortgage Loans, market discount) or premium accrued or amortized through the end of such calendar quarter with respect to the regular or residual interests created hereunder and with respect to the Mortgage Loans, together with each constant yield to maturity used in computing the same; (E) the treatment of losses realized with respect to the Mortgage Loans or the regular interests created hereunder, including the timing and amount of any cancellation of indebtedness income of any REMIC created hereunder with respect to such regular interests or bad debt deductions claimed with respect to the Mortgage Loans;

(B) the projected remaining principal and interest cash flows as of the end of any calendar quarter with respect to the regular and residual interests created hereunder and the Mortgage Loans, based on the Prepayment Assumption; (C) the Prepayment Assumption and any interest rate assumptions used in determining the projected principal and interest cash flows described above; (D) the original issue discount (or, in the case of the Mortgage Loans, market discount) or premium accrued or amortized through the end of such calendar quarter with respect to the regular or residual interests created hereunder and with respect to the Mortgage Loans, together with each constant yield to maturity used in computing the same; (E) the treatment of losses realized with respect to the Mortgage Loans or the regular interests created hereunder, including the timing and amount of any cancellation of indebtedness income of any REMIC created hereunder with respect to such regular interests or bad debt deductions claimed with respect to the Mortgage Loans; (F) the amount and timing of any non-interest expenses of any REMIC created hereunder; and (G) any taxes (including penalties and interest) imposed on any REMIC created hereunder, including, without limitation, taxes on "prohibited transactions," "contributions" or "net income from foreclosure property" or state or local income or franchise taxes; and (xiii) make any other required reports in respect of interest payments in respect of the Mortgage Loans and acquisitions and abandonments of Mortgaged Property to the Internal Revenue Service and/or the borrowers, as applicable. (b) In the event that any tax is imposed on "prohibited transactions" of any REMIC created hereunder as defined in Section 860F(a)(2) of the Code, on the "net income from foreclosure property" of any REMIC created hereunder as defined in Section 860G(c) of the Code, on any contribution to any REMIC created hereunder after the Startup Day pursuant to Section 860G(d) of the Code, or any other tax is imposed, such tax shall be paid by (i) the Trustee, if such tax arises out of or results from a breach by the Trustee of any of its obligations under this Agreement, (ii) the Servicer, if such tax arises out of or results from a breach by the Servicer of any of its obligations under this Agreement, or otherwise (iii) the holders of the Class R Certificates in proportion to their Percentage Interests. To the extent such tax is chargeable against the holders of the Class R Certificates, notwithstanding anything to the contrary contained herein, the Trustee is hereby authorized to retain from amounts otherwise distributable to the Holders of the Class R Certificates on any Distribution Date sufficient funds for the payment of such tax. 128

Section 11.14 GOVERNING LAW; CONSENT TO JURISDICTION; WAIVER OF JURY TRIAL. (a) THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE INTERNAL LAWS (AS OPPOSED TO CONFLICT OF LAWS PROVISIONS) OF THE STATE OF NEW YORK. (b) THE DEPOSITOR, THE SERVICER, THE BACK-UP SERVICER, THE COLLATERAL AGENT AND THE 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 DAYS

Section 11.14 GOVERNING LAW; CONSENT TO JURISDICTION; WAIVER OF JURY TRIAL. (a) THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE INTERNAL LAWS (AS OPPOSED TO CONFLICT OF LAWS PROVISIONS) OF THE STATE OF NEW YORK. (b) THE DEPOSITOR, THE SERVICER, THE BACK-UP SERVICER, THE COLLATERAL AGENT AND THE 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 DAYS AFTER THE SAME SHALL HAVE BEEN DEPOSITED IN THE U.S. MAILS, POSTAGE PREPAID. THE DEPOSITOR, THE SERVICER, THE BACK-UP SERVICER, THE COLLATERAL AGENT AND THE 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 SHALL AFFECT THE RIGHT OF THE DEPOSITOR, THE SERVICER, THE BACK-UP SERVICER THE COLLATERAL AGENT OR THE 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 DEPOSITOR, THE SERVICER, THE BACK-UP SERVICER, THE COLLATERAL AGENT AND THE 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] 129

IN WITNESS WHEREOF, the Depositor, the Servicer, the Trustee, the Collateral Agent and the Back-up Servicer 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 BACK SECURITIES, INC., as Depositor By: Jonathan Lieberman Name: Jonathan Lieberman Title: Senior Managing Director AMERICAN BUSINESS CREDIT, INC., as Servicer By: Beverly Santilli Name: Beverly Santilli Title: President JPMORGAN CHASE BANK, as Trustee, Collateral Agent and Back-up Servicer By: Joseph M. Constantino Name: Joseph M. Constantino Title: Trust Officer

IN WITNESS WHEREOF, the Depositor, the Servicer, the Trustee, the Collateral Agent and the Back-up Servicer 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 BACK SECURITIES, INC., as Depositor By: Jonathan Lieberman Name: Jonathan Lieberman Title: Senior Managing Director AMERICAN BUSINESS CREDIT, INC., as Servicer By: Beverly Santilli Name: Beverly Santilli Title: President JPMORGAN CHASE BANK, as Trustee, Collateral Agent and Back-up Servicer By: Joseph M. Constantino Name: Joseph M. Constantino Title: Trust Officer

Exhibit 10.101 RADIAN ASSET ASSURANCE INC., as Certificate Insurer, HOMEAMERICAN CREDIT, INC. D/B/A UPLAND MORTGAGE, as an Original Mortgage Loan Seller, AMERICAN BUSINESS MORTGAGE SERVICES, INC., as an Original Mortgage Loan Seller, AMERICAN BUSINESS CREDIT, INC., as an Original Mortgage Loan Seller and as Servicer, ABFS 2003-1, INC., as Secondary Mortgage Loan Seller, BEAR STEARNS ASSET BACKED SECURITIES, INC., as Depositor, and JPMORGAN CHASE BANK, as Trustee, as Back-up Servicer and as Collateral Agent INSURANCE AND INDEMNITY AGREEMENT ABFS MORTGAGE LOAN TRUST 2003-1, MORTGAGE PASS-THROUGH CERTIFICATES, SERIES 2003-1, CLASS M Dated as of March 31, 2003

Exhibit 10.101 RADIAN ASSET ASSURANCE INC., as Certificate Insurer, HOMEAMERICAN CREDIT, INC. D/B/A UPLAND MORTGAGE, as an Original Mortgage Loan Seller, AMERICAN BUSINESS MORTGAGE SERVICES, INC., as an Original Mortgage Loan Seller, AMERICAN BUSINESS CREDIT, INC., as an Original Mortgage Loan Seller and as Servicer, ABFS 2003-1, INC., as Secondary Mortgage Loan Seller, BEAR STEARNS ASSET BACKED SECURITIES, INC., as Depositor, and JPMORGAN CHASE BANK, as Trustee, as Back-up Servicer and as Collateral Agent INSURANCE AND INDEMNITY AGREEMENT ABFS MORTGAGE LOAN TRUST 2003-1, MORTGAGE PASS-THROUGH CERTIFICATES, SERIES 2003-1, CLASS M Dated as of March 31, 2003

TABLE OF CONTENTS (This Table of Contents is for convenience of reference only and shall not be deemed to be part of this Agreement. All capitalized terms used in this Agreement and not otherwise defined shall have the meanings set forth in Article I of this Agreement.)
Page ---ARTICLE I DEFINITIONS.......................................................2

Section 1.01 Defined Terms...............................................2 Section 1.02. Other Definitional Provisions...............................6 ARTICLE II Section Section Section Section REPRESENTATIONS, WARRANTIES AND COVENANTS........................6 2.01. 2.02. 2.03. 2.04. Representations and Warranties..............................6 Affirmative Covenants......................................11 Negative Covenants.........................................17 Representations, Warranties and Covenants of the Certificate Insurer..................................18

ARTICLE III

THE POLICY; REIMBURSEMENT......................................20

Section 3.01. Issuance of the Policy.....................................20 Section 3.02. Payment of Fees and Premium................................22 Section 3.03. Reimbursement Obligation...................................23

TABLE OF CONTENTS (This Table of Contents is for convenience of reference only and shall not be deemed to be part of this Agreement. All capitalized terms used in this Agreement and not otherwise defined shall have the meanings set forth in Article I of this Agreement.)
Page ---ARTICLE I DEFINITIONS.......................................................2

Section 1.01 Defined Terms...............................................2 Section 1.02. Other Definitional Provisions...............................6 ARTICLE II Section Section Section Section REPRESENTATIONS, WARRANTIES AND COVENANTS........................6 2.01. 2.02. 2.03. 2.04. Representations and Warranties..............................6 Affirmative Covenants......................................11 Negative Covenants.........................................17 Representations, Warranties and Covenants of the Certificate Insurer..................................18

ARTICLE III Section Section Section Section Section Section Section ARTICLE IV Section Section Section Section Section Section ARTICLE V

THE POLICY; REIMBURSEMENT......................................20 Issuance of the Policy.....................................20 Payment of Fees and Premium................................22 Reimbursement Obligation...................................23 Indemnification............................................25 Payment Procedure..........................................28 Subrogation................................................28 Assignment and Other Rights................................29

3.01. 3.02. 3.03. 3.04. 3.05. 3.06. 3.07.

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

DEFAULTS AND REMEDIES............................................33

Section 5.01. Defaults...................................................33 Section 5.02. Remedies; No Remedy Exclusive..............................34 Section 5.03. Waivers....................................................35 ARTICLE VI Section Section Section Section Section MISCELLANEOUS...................................................36 6.01. 6.02. 6.03. 6.04. 6.05. Amendments, Etc............................................36 Notices....................................................36 Severability...............................................36 GOVERNING LAW..............................................37 Payments...................................................37

i

Section Section Section Section Section Section Section Section

6.06. 6.07. 6.08. 6.09. 6.10. 6.11. 6.12. 6.13.

Consent to Jurisdiction....................................37 Consent of the Certificate Insurer.........................38 Counterparts...............................................38 Headings...................................................38 Trial by Jury Waived.......................................38 Limited Liability..........................................38 Entire Agreement...........................................39 Joint and Several Liability................................39

Section Section Section Section Section Section Section Section

6.06. 6.07. 6.08. 6.09. 6.10. 6.11. 6.12. 6.13.

Consent to Jurisdiction....................................37 Consent of the Certificate Insurer.........................38 Counterparts...............................................38 Headings...................................................38 Trial by Jury Waived.......................................38 Limited Liability..........................................38 Entire Agreement...........................................39 Joint and Several Liability................................39

ii

INSURANCE AND INDEMNITY AGREEMENT (as may be amended, modified or supplemented from time to time, this "Insurance Agreement"), dated as of March 31, 2003, by and among RADIAN ASSET ASSURANCE INC., a New York stock insurance company, regulated by the Insurance Department of the State of New York, as Certificate Insurer, AMERICAN BUSINESS CREDIT, INC., a Pennsylvania corporation ("ABC Inc."), in its capacity as an Original Mortgage Loan Seller and as Servicer, HOMEAMERICAN CREDIT, INC. d/b/a UPLAND MORTGAGE, as an Original Mortgage Loan Seller, AMERICAN BUSINESS MORTGAGE SERVICES, INC., as an Original Mortgage Loan Seller, ABFS 2003-1, INC., as Secondary Mortgage Loan Seller, BEAR STEARNS ASSET BACKED SECURITIES, INC., a Delaware corporation, in its capacity as depositor (the "Depositor"), and JPMORGAN CHASE BANK, a New York banking corporation, as Trustee, Back-up Servicer and Collateral Agent (the "Trustee"). W I T N E S S E T H: WHEREAS, (i) the Original Mortgage Loan Sellers have sold and assigned their entire interest to the Secondary Mortgage Loan Seller and (ii) the Secondary Mortgage Loan Seller has sold and assigned its entire interest to the Depositor, and the Depositor has accepted from the Secondary Mortgage Loan Seller the sale and assignment of such interest, in the Mortgage Loans pursuant to an Unaffiliated Seller's Agreement, dated as of March 1, 2003, by and among the Original Mortgage Loan Sellers, the Secondary Mortgage Loan Seller and the Depositor (the "Purchase Agreement"); WHEREAS, each of the Original Mortgage Loan Sellers and the Secondary Mortgage Loan Seller has made certain representations and warranties with respect to the related Mortgage Loans subject to the Purchase Agreement; WHEREAS, a Pooling and Servicing Agreement, dated as of March 1, 2003, by and among the Depositor, the Servicer, the Back-up Servicer, the Collateral Agent and the Trustee (as may be amended, modified or supplemented from time to time as set forth therein, the "P&S Agreement") provides for, among other things, the assignment of the Mortgage Loans by the Depositor to the Trustee for the benefit of the Certificateholders and the Certificate Insurer, the issuance of the ABFS Mortgage Loan Trust 2003-1 Mortgage Pass-Through Certificates, Series 2003-1 evidencing the entire beneficial ownership interest in the Trust Fund and the servicing of the Mortgage Loans; WHEREAS, the Certificate Insurer intends to issue the Policy, pursuant to which it will agree to pay in favor of the Trustee for the benefit of the Holders of the Class M Certificates, amounts in respect of certain payments on the Class M Certificates; WHEREAS, the Certificate Insurer shall be paid a Premium as set forth herein; and WHEREAS, each of the Sellers and the Depositor has undertaken certain obligations under the Purchase Agreement and the P&S Agreement for the benefit of the Certificate Insurer and in consideration for the Certificate Insurer's issuance of its Policy. NOW, THEREFORE, in consideration of the premises and the mutual agreements herein contained, the parties hereto agree as follows:

INSURANCE AND INDEMNITY AGREEMENT (as may be amended, modified or supplemented from time to time, this "Insurance Agreement"), dated as of March 31, 2003, by and among RADIAN ASSET ASSURANCE INC., a New York stock insurance company, regulated by the Insurance Department of the State of New York, as Certificate Insurer, AMERICAN BUSINESS CREDIT, INC., a Pennsylvania corporation ("ABC Inc."), in its capacity as an Original Mortgage Loan Seller and as Servicer, HOMEAMERICAN CREDIT, INC. d/b/a UPLAND MORTGAGE, as an Original Mortgage Loan Seller, AMERICAN BUSINESS MORTGAGE SERVICES, INC., as an Original Mortgage Loan Seller, ABFS 2003-1, INC., as Secondary Mortgage Loan Seller, BEAR STEARNS ASSET BACKED SECURITIES, INC., a Delaware corporation, in its capacity as depositor (the "Depositor"), and JPMORGAN CHASE BANK, a New York banking corporation, as Trustee, Back-up Servicer and Collateral Agent (the "Trustee"). W I T N E S S E T H: WHEREAS, (i) the Original Mortgage Loan Sellers have sold and assigned their entire interest to the Secondary Mortgage Loan Seller and (ii) the Secondary Mortgage Loan Seller has sold and assigned its entire interest to the Depositor, and the Depositor has accepted from the Secondary Mortgage Loan Seller the sale and assignment of such interest, in the Mortgage Loans pursuant to an Unaffiliated Seller's Agreement, dated as of March 1, 2003, by and among the Original Mortgage Loan Sellers, the Secondary Mortgage Loan Seller and the Depositor (the "Purchase Agreement"); WHEREAS, each of the Original Mortgage Loan Sellers and the Secondary Mortgage Loan Seller has made certain representations and warranties with respect to the related Mortgage Loans subject to the Purchase Agreement; WHEREAS, a Pooling and Servicing Agreement, dated as of March 1, 2003, by and among the Depositor, the Servicer, the Back-up Servicer, the Collateral Agent and the Trustee (as may be amended, modified or supplemented from time to time as set forth therein, the "P&S Agreement") provides for, among other things, the assignment of the Mortgage Loans by the Depositor to the Trustee for the benefit of the Certificateholders and the Certificate Insurer, the issuance of the ABFS Mortgage Loan Trust 2003-1 Mortgage Pass-Through Certificates, Series 2003-1 evidencing the entire beneficial ownership interest in the Trust Fund and the servicing of the Mortgage Loans; WHEREAS, the Certificate Insurer intends to issue the Policy, pursuant to which it will agree to pay in favor of the Trustee for the benefit of the Holders of the Class M Certificates, amounts in respect of certain payments on the Class M Certificates; WHEREAS, the Certificate Insurer shall be paid a Premium as set forth herein; and WHEREAS, each of the Sellers and the Depositor has undertaken certain obligations under the Purchase Agreement and the P&S Agreement for the benefit of the Certificate Insurer and in consideration for the Certificate Insurer's issuance of its Policy. NOW, THEREFORE, in consideration of the premises and the mutual agreements herein contained, the parties hereto agree as follows:

ARTICLE I DEFINITIONS Section 1.01. Defined Terms. Unless the context clearly requires otherwise, capitalized terms used and not defined herein shall have the respective meanings given to them in the P&S Agreement or, if not defined therein, the Policy specified below. References herein to the Servicer shall also be deemed to refer to ABC Inc. in its capacity as Servicer under the P&S Agreement. For purposes of this Insurance Agreement, the terms set forth below shall have the following meanings: "ABC Inc." means American Business Credit, Inc., a Pennsylvania corporation, as seller and/or originator under the Purchase Agreement and as Servicer under the P&S Agreement.

ARTICLE I DEFINITIONS Section 1.01. Defined Terms. Unless the context clearly requires otherwise, capitalized terms used and not defined herein shall have the respective meanings given to them in the P&S Agreement or, if not defined therein, the Policy specified below. References herein to the Servicer shall also be deemed to refer to ABC Inc. in its capacity as Servicer under the P&S Agreement. For purposes of this Insurance Agreement, the terms set forth below shall have the following meanings: "ABC Inc." means American Business Credit, Inc., a Pennsylvania corporation, as seller and/or originator under the Purchase Agreement and as Servicer under the P&S Agreement. "ABFS" means American Business Financial Services, Inc., a Delaware corporation. "Affiliate" means, as to any specified Person, any other Person controlling or controlled by or under common control with such specified Person. For the purposes of this definition, "control" when used with respect to any specified Person means the power to direct the management and policies of such Person, directly or indirectly, whether through the ownership of voting securities, by contract or otherwise; and the terms "controlling" or "controlled" have meanings correlative to the foregoing. "Benefit Plan" means any "employee benefit plan," as defined in Section 3(3) of ERISA, and any other employee benefit arrangement or payroll practice, including, without limitation, any bonus plan, consulting, employment or other compensation agreement, incentive, equity or equity-based compensation, or deferred compensation arrangement, stock purchase, severance pay, sick leave, vacation pay, salary continuation for disability, hospitalization, medical insurance, life insurance, scholarship program. "Certificate Insurer" means Radian Asset Assurance Inc., or any successor thereto, as issuer of the Policy. "Certificates" means the ABFS Mortgage Loan Trust 2003-1 Mortgage Pass-Through Certificates, Series 20031, issued pursuant to the P&S Agreement. "Class M Certificates" means those of the Certificates designated as belonging to Class M pursuant to the P&S Agreement. "Closing Date" means the date hereof. "Code" means the Internal Revenue Code of 1986, as amended. "Commonly Controlled Entity" means, with respect to any Person, each entity, whether or not incorporated, which is affiliated with such Person pursuant to Section 414(b), (c), (m) or (o) of the Code. "Default" means any event which results, or which with the giving of notice or the lapse of time or both would result, in an Event of Default. 2

"Depositor" means Bear Stearns Asset Backed Securities, Inc., a Delaware corporation, or any successor thereto as Depositor under the P&S Agreement. "Documents" has the meaning given to such term in Section 2.01(k) herein. "ERISA" means the Employee Retirement Income Security Act of 1974, including the rules and regulations thereunder, as amended from time to time. "ERISA Affiliate" means any entity or trade or business (whether or not incorporated) which, together with the subject Person, would be treated as a single employer or under common control under Section 414 of the Code or Section 4001 of ERISA and any general partnership of which any such entity is or has been a general partner.

"Depositor" means Bear Stearns Asset Backed Securities, Inc., a Delaware corporation, or any successor thereto as Depositor under the P&S Agreement. "Documents" has the meaning given to such term in Section 2.01(k) herein. "ERISA" means the Employee Retirement Income Security Act of 1974, including the rules and regulations thereunder, as amended from time to time. "ERISA Affiliate" means any entity or trade or business (whether or not incorporated) which, together with the subject Person, would be treated as a single employer or under common control under Section 414 of the Code or Section 4001 of ERISA and any general partnership of which any such entity is or has been a general partner. "Event of Default" means any event of default specified in Section 5.01 of this Insurance Agreement. "Financial Statements" means, with respect to each of the Sellers, the consolidated statements of financial condition of ABFS as of June 30, 2002 and June 30, 2001, and the statements of operations, stockholders' equity and cash flows for each of the years in the three-year period ended June 30, 2001 and for the interim period ended December 31, 2002. "Fitch" means Fitch Ratings, and any successor thereto. "Indemnification Agreement" means the Indemnification Agreement dated the Closing Date among the Certificate Insurer and Bear, Stearns & Co. Inc., as representative of the Underwriters. "Insurance Agreement" has the meaning given to such term in the initial paragraph hereof. "Insurer Information" means the information with respect to the Certificate Insurer set forth in the Offering Document under the caption "THE CERTIFICATE INSURER." "Investment Company Act" means the Investment Company Act of 1940, including, unless the context otherwise requires, the rules and regulations thereunder, as in effect from time to time. "Late Payment Rate" means the lesser of (A) the greater of (1) the "prime rate" of interest, which is published in the "Money Rates" section of The Wall Street Journal (any change in such rate of interest to be effective on the date such change is so announced), plus 3%, and (2) the then applicable highest rate of interest on the Class M Certificates and (B) the maximum rate permissible under applicable usury or similar laws limiting interest rates. Interest at the Late Payment Rate shall be computed on the basis of a 360-day year and the actual number of days elapsed in the related accrual period. "Material Adverse Change" means, in respect of any Person, a material adverse change in (i) the ability of such Person to perform its obligations under any of the Operative Documents or (ii) the business, financial condition, 3

results of operations or properties of such Person. References to a "Material Adverse Change" herein which do not refer to a particular Person mean a Material Adverse Change with regard to the Sellers, the Depositor or the Trust Fund. "Mortgage Loan Information" means the information in the Offering Document regarding the Mortgage Loans set forth under the heading "THE MORTGAGE LOAN POOL" and the related Sellers' underwriting standards set forth under the headings "THE ORIGINATORS, THE SELLER AND THE SERVICER--Origination of Mortgage Loans" and "--Underwriting Procedures and Practices" and "RISK FACTORS" (to the extent of information concerning the Mortgage Loans thereunder). "Multiemployer Plan" means a multiemployer plan (within the meaning of Section 400(1)(a)(3) of ERISA) in respect of which a Commonly Controlled Entity makes contributions, is obligated to contribute or has liability.

results of operations or properties of such Person. References to a "Material Adverse Change" herein which do not refer to a particular Person mean a Material Adverse Change with regard to the Sellers, the Depositor or the Trust Fund. "Mortgage Loan Information" means the information in the Offering Document regarding the Mortgage Loans set forth under the heading "THE MORTGAGE LOAN POOL" and the related Sellers' underwriting standards set forth under the headings "THE ORIGINATORS, THE SELLER AND THE SERVICER--Origination of Mortgage Loans" and "--Underwriting Procedures and Practices" and "RISK FACTORS" (to the extent of information concerning the Mortgage Loans thereunder). "Multiemployer Plan" means a multiemployer plan (within the meaning of Section 400(1)(a)(3) of ERISA) in respect of which a Commonly Controlled Entity makes contributions, is obligated to contribute or has liability. "Offering Document" means the Prospectus Supplement, dated March 26, 2003 in respect of the Class A, Class A-IO and Class M Certificates and any amendment or supplement thereto. "Operative Documents" means this Insurance Agreement, the Policy, the Indemnification Agreement, the Certificates, the Optional Termination Side Letter, the Support Agreement, the Interest Rate Hedge Agreement, the Underwriting Agreement, the P&S Agreement and the Purchase Agreement. "Optional Termination Side Letter" means the optional termination side letter dated as of the date hereof from the Servicer to the Certificate Insurer and the Trustee. "Original Mortgage Loan Seller" means each of ABC Inc., HomeAmerican Credit, Inc. d/b/a Upland Mortgage and American Business Mortgage Services, Inc. or any successor thereto, as originator/purchaser of the Mortgage Loans and seller thereof to the Secondary Mortgage Loan Seller. "P&S Agreement" has the meaning given to such term in the recitals. "PBGC" means the Pension Benefit Guaranty Corporation or any successor agency, corporation or instrumentality of the United States to which the duties and powers of the Pension Benefit Guaranty Corporation are transferred. "Person" means an individual, joint stock company, trust, unincorporated association, joint venture, corporation, business or other trust, limited liability company, partnership or other organization or entity (whether governmental or private). "Plan" means any Benefit Plan (other than a Multiemployer Plan) covered by Title IV of ERISA, which is maintained by a Commonly Controlled Entity or in respect of which a Commonly Controlled Entity has liability. "Policy" means the Financial Guaranty Insurance Policy, designated as policy number FANI-0509-03090-NY, together with all endorsements thereto, issued 4

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

by the Certificate Insurer in favor of the Trustee and for the benefit of the Class M Certificateholders in respect of certain payments on the Class M Certificates. "Premium" means the non-refundable premium payable in respect of the Policy, which shall be payable (a) on the Closing Date in an amount equal to $75,000.00 and (b) on each Distribution Date in an amount equal to the product of (i) the Premium Percentage, (ii) the aggregate Certificate Principal Balance of the Class A Certificates and the Class M Certificates that are Outstanding on the immediately preceding Distribution Date (or on the Closing Date, in the case of the first Distribution Date), after giving effect to any payments of principal made on such immediately preceding Distribution Date other than any such payment related to an unreimbursed Insured Payment and (iii) 1/12 (or, on the first Distribution Date, a fraction, the numerator of which is the actual number of days from and including the Closing Date to but excluding the first Distribution Date, and the denominator of which is 360). "Premium Percentage" shall mean 0.20%. "Purchase Agreement" has the meaning given to such term in the recitals. "S&P" means Standard & Poor's Ratings Services, a division of The McGraw-Hill Companies, Inc., and any successor thereto. "Securities Act" means the Securities Act of 1933, including, unless the context otherwise requires, the rules and regulations thereunder, as amended from time to time. "Securities Exchange Act" means the Securities Exchange Act of 1934, including, unless the context otherwise requires, the rules and regulations thereunder, as amended from time to time. "Secondary Mortgage Loan Seller" means ABFS 2003-1, Inc. or any successor thereto, as seller of the Mortgage Loans to the Depositor. "Seller" means each of the Original Mortgage Loan Sellers and the Secondary Mortgage Loan Seller. "Servicing Information" means the information in the Offering Document regarding the Servicer and certain of its servicing practices and set forth under the heading "THE ORIGINATORS, THE SELLER AND THE SERVICER--The Servicer" and "SERVICING OF THE MORTGAGE LOANS" (to the extent of information concerning the Servicer) therein. "Transaction" means the transactions contemplated by the Operative Documents, including the transactions described in the Offering Document. "Trustee" means JPMorgan Chase Bank, as the Trustee under the P&S Agreement, and any successor thereto under the P&S Agreement. "Underwriter Information" has the meaning provided in section 3(c) of the Indemnification Agreement. 5

"Underwriters" means Bear Stearns & Co. Inc. and Credit Suisse First Boston LLC. "Underwriting Agreement" means the Underwriting Agreement between Bear, Stearns & Co. Inc., as representative of the Underwriters and the Depositor, dated March 26, 2003, with respect to the offer and sale of certain of the Certificates, as such may be amended, modified or supplemented from time to time. Section 1.02. Other Definitional Provisions. The words "hereof," "herein" and "hereunder" and words of similar import when used in this Insurance Agreement shall refer to this Insurance Agreement as a whole and not to any particular provision of this Insurance Agreement, and Section, subsection, Schedule and Exhibit references are to this Insurance Agreement unless otherwise specified. The meanings given to terms defined herein shall be equally applicable to both the singular and plural forms of such terms. The words "include" and "including" and words of

"Underwriters" means Bear Stearns & Co. Inc. and Credit Suisse First Boston LLC. "Underwriting Agreement" means the Underwriting Agreement between Bear, Stearns & Co. Inc., as representative of the Underwriters and the Depositor, dated March 26, 2003, with respect to the offer and sale of certain of the Certificates, as such may be amended, modified or supplemented from time to time. Section 1.02. Other Definitional Provisions. The words "hereof," "herein" and "hereunder" and words of similar import when used in this Insurance Agreement shall refer to this Insurance Agreement as a whole and not to any particular provision of this Insurance Agreement, and Section, subsection, Schedule and Exhibit references are to this Insurance Agreement unless otherwise specified. The meanings given to terms defined herein shall be equally applicable to both the singular and plural forms of such terms. The words "include" and "including" and words of similar import shall be deemed to be followed by the phrase "without limitation." ARTICLE II REPRESENTATIONS, WARRANTIES AND COVENANTS Section 2.01. Representations and Warranties. Each of the Sellers, the Depositor and the Servicer represents and warrants with respect to itself (subject to Section 6.13), in each case, as of the Closing Date and as of the date of each transfer of the Mortgage Loans (other than any Qualified Substitute Mortgage Loan) to the Trust pursuant to the P&S Agreement, as follows: (a) Due Organization and Qualification. It is a corporation, duly organized, validly existing and in good standing under the laws of the jurisdiction of its incorporation or formation. It is duly qualified to do business, is in good standing and has obtained all necessary licenses, permits, charters, registrations and approvals (together, "approvals") necessary for the conduct of its business as currently conducted and as described in the Offering Document and the performance of its obligations under the Operative Documents to which it is a party in each jurisdiction in which the failure to be so qualified or to obtain such approvals would render any Operative Document unenforceable in any material respect or would have a material adverse effect upon the Transaction. (b) Power and Authority. It has all necessary power and authority to conduct its business as currently conducted and as described in the Offering Document, to execute and deliver, and to perform its obligations under, the Operative Documents to which it is a party and to consummate the Transaction. (c) Due Authorization. The execution, delivery and performance by it of the Operative Documents to which it is a party have been duly authorized by all necessary action on its part and does not require any additional approvals or consents from, or other action by or any notice to or filing with, any Person, including any governmental entity or any of its stockholders, members or other owners which have not previously been obtained or given by it. 6

(d) Noncontravention. The execution and delivery by it of the Operative Documents to which it is a party, the consummation of the Transaction and the satisfaction of the terms and conditions of the Operative Documents do not and will not: (i) conflict with or result in any breach or violation of any provision of its organizational documents or any law, rule, regulation, order, writ, judgment, injunction, decree, determination or award currently in effect having applicability to it or any of their respective material properties, including regulations issued by any administrative agency or other governmental authority having supervisory powers over it; (ii) constitute a default by it or result in the acceleration of any obligation under, or breach any provision of, any loan agreement, mortgage, indenture or other agreement or instrument to which it is a party or by which any of their respective properties is or may be bound or affected; or (iii) result in or require the creation of any lien upon or in respect of any of its assets, except as otherwise contemplated by the Operative Documents. (e) Legal Proceedings. There is no action, proceeding or investigation by or before any court, governmental or

(d) Noncontravention. The execution and delivery by it of the Operative Documents to which it is a party, the consummation of the Transaction and the satisfaction of the terms and conditions of the Operative Documents do not and will not: (i) conflict with or result in any breach or violation of any provision of its organizational documents or any law, rule, regulation, order, writ, judgment, injunction, decree, determination or award currently in effect having applicability to it or any of their respective material properties, including regulations issued by any administrative agency or other governmental authority having supervisory powers over it; (ii) constitute a default by it or result in the acceleration of any obligation under, or breach any provision of, any loan agreement, mortgage, indenture or other agreement or instrument to which it is a party or by which any of their respective properties is or may be bound or affected; or (iii) result in or require the creation of any lien upon or in respect of any of its assets, except as otherwise contemplated by the Operative Documents. (e) Legal Proceedings. There is no action, proceeding or investigation by or before any court, governmental or administrative agency or arbitrator against or affecting it or any of its respective subsidiaries, any of its properties or rights or any of its subsidiaries or any of the Mortgage Loans, pending or, to its knowledge after reasonable inquiry, threatened, which, in any case, could result in a Material Adverse Change. (f) Valid and Binding Obligations. The Operative Documents (other than the Certificates) to which it is a party have been duly executed and delivered by such party and constitute its legal, valid and binding obligations, as applicable, enforceable against it in accordance with their respective terms, except as such enforceability may be limited by bankruptcy, insolvency, reorganization, moratorium or other similar laws affecting creditors' rights generally and general equitable principles and public policy considerations as to rights of indemnification for violations of federal securities laws. Without attributing the representations and warranties in this sentence to the Servicer or the Sellers, the Certificates when executed, authenticated and delivered by the Trustee in accordance with the P&S Agreement, will be validly issued and outstanding and entitled to the benefits of the P&S Agreement. It will not at any time in the future deny that the Operative Documents to which it is a party constitute its legal, valid and binding obligations. (g) Financial Statements. Without attributing the representations and warranties in this Section 2.01(g) to the Depositor, such of ABFS's Financial Statements as have been furnished to the Certificate Insurer, (i) are, as of the dates and for the periods referred to therein, complete and correct in all material respects, (ii) present fairly its financial condition and results of operations as of the dates and for the periods indicated and (iii) have been prepared in accordance with generally accepted accounting principles consistently applied, except as certified therein (subject as to interim statements to normal year-end adjustments). Since the respective dates of the most recent of such Financial Statements, there has been no Material Adverse Change with respect to it. Except as disclosed in the Financial Statements, it 7

is not subject to any contingent liabilities or commitments that, individually or in the aggregate, have a material possibility of causing a Material Adverse Change. (h) ERISA. (i) No accumulated funding deficiency (as defined in Section 302 of ERISA or Section 412 of the Code), whether or not waived, has occurred with respect to any Plan. No Plan has been terminated, and no Commonly Controlled Entity has withdrawn from any Multiemployer Plan under circumstances that could result in a Commonly Controlled Entity incurring liability under ERISA that has not been satisfied. No Commonly Controlled Entity has withdrawn from a Plan that is or was subject to Section 4063 of ERISA during a plan year in which such Commonly Controlled Entity was a substantial employer (as defined in Section 4001(a)(2) of ERISA) and no Commonly Controlled Entity has had a cessation of operations that could be treated as a withdrawal under Section 4062(e) of ERISA in either case which could result in material liability to it. No reportable event (as defined in Section 4043 of ERISA) or other event or condition has occurred which could

is not subject to any contingent liabilities or commitments that, individually or in the aggregate, have a material possibility of causing a Material Adverse Change. (h) ERISA. (i) No accumulated funding deficiency (as defined in Section 302 of ERISA or Section 412 of the Code), whether or not waived, has occurred with respect to any Plan. No Plan has been terminated, and no Commonly Controlled Entity has withdrawn from any Multiemployer Plan under circumstances that could result in a Commonly Controlled Entity incurring liability under ERISA that has not been satisfied. No Commonly Controlled Entity has withdrawn from a Plan that is or was subject to Section 4063 of ERISA during a plan year in which such Commonly Controlled Entity was a substantial employer (as defined in Section 4001(a)(2) of ERISA) and no Commonly Controlled Entity has had a cessation of operations that could be treated as a withdrawal under Section 4062(e) of ERISA in either case which could result in material liability to it. No reportable event (as defined in Section 4043 of ERISA) or other event or condition has occurred which could result in the termination of any Plan by the PBGC. As of the last day of the Plan's most recently ended plan year, no Plan has liabilities (determined using the actuarial and interest factors used by such Plan for purposes of the actuarial report used for such plan year, the interest and actuarial factors being reasonable at the time used,) that exceed the Plan's assets by more than $100,000. As of the last day of the Plan's most recently ended plan year, the aggregate liabilities for all Plans (determined using the actuarial and interest factors used by such Plan for purposes of the actuarial report used for such plan year, the interest and actuarial factors being reasonable at the time used,) do not exceed the aggregate assets of the Plans by more than $100,000. The liability to which the Commonly Controlled Entities would become subject under ERISA if they withdrew completely from all Multiemployer Plans (determined as of the most recent valuation date for each Multiemployer Plan) does not exceed $100,000. No Multiemployer Plan is in reorganization (as defined in Section 4241 of ERISA) or insolvent (as defined in Section 4245 of ERISA). (ii) Each Commonly Controlled Entity is in compliance in all material respects with ERISA and has not incurred and does not reasonably expect to incur any liabilities to the PBGC under ERISA in connection with any Plan or Multiemployer Plan in any capacity other than as a Commonly Controlled Entity with respect to it, or to contribute now or in the future in respect of any Plan or Multiemployer Plan. (i) Compliance With Law, Etc. No practice, procedure or policy employed, or proposed to be employed, by it in the conduct of its business violates any law, regulation, judgment, agreement, order or decree applicable to either of them that, if enforced, could reasonably be expected to result in a Material Adverse Change with respect to it. (j) Taxes. It has filed or has participated in the filing of a consolidated filing with its parent company or companies prior to the date hereof all United States federal, state and local tax returns that are required to be filed and paid all taxes, including any assessments received by it or its parent company or companies that are not being contested in good faith, to the extent that such taxes have become due. Any taxes, fees and other governmental charges payable by it or any of its respective parent companies in connection with the Transaction, the execution and delivery of the Operative Documents to which it is a party and the issuance of the Certificates have been paid or shall 8

have been paid at or prior to the Closing Date if such taxes, fees or other governmental changes were due on or prior to the Closing Date. (k) Accuracy of Information. (i) Without attributing the representations and warranties in this Section 2.01(k)(i) to the Servicer or the Sellers, neither the Operative Documents nor any other information furnished by it to the Certificate Insurer and relating to the Operative Documents, the Mortgage Loans, the Trust Fund, the Certificates, or the operations or financial condition of the Trustee, any Seller, the Depositor, or the Servicer (as amended, supplemented or superseded, collectively, the "Documents") contain any statement of a material fact which was untrue or misleading in any material respect when made.

have been paid at or prior to the Closing Date if such taxes, fees or other governmental changes were due on or prior to the Closing Date. (k) Accuracy of Information. (i) Without attributing the representations and warranties in this Section 2.01(k)(i) to the Servicer or the Sellers, neither the Operative Documents nor any other information furnished by it to the Certificate Insurer and relating to the Operative Documents, the Mortgage Loans, the Trust Fund, the Certificates, or the operations or financial condition of the Trustee, any Seller, the Depositor, or the Servicer (as amended, supplemented or superseded, collectively, the "Documents") contain any statement of a material fact which was untrue or misleading in any material respect when made. (ii) Without attributing the representations and warranties in this Section 2.01(k)(ii) other than to the Servicer and the Sellers, no information furnished by it to the Certificate Insurer and relating to the Operative Documents, the Mortgage Loans, the Trust Fund or its operations or financial condition (as amended, supplement or superseded, collectively, the "Limited Documents") contain any statement of a material fact which was untrue or misleading in any material respect when made. (iii) It does not have any knowledge of any circumstances that could reasonably be expected to cause a Material Adverse Change or, to the extent that the representations and warranties in this sentence are attributable to the Servicer or the Sellers, a Material Adverse Change with respect to it or the Trust Fund. (iv) Since the furnishing by it of such Documents or, in the case of the Servicer and the Sellers, such Limited Documents, there has been no change, nor any development or event involving a prospective change known to it, that would render any of such Documents or, in the case of the Servicer and the Sellers, such Limited Documents untrue or misleading in any material respect. (l) Compliance With Securities Laws. (i) Without attributing the representations and warranties in this Section 2.01(l)(i) to the Servicer or the Sellers, the offer and sale of the Certificates comply in all material respects with all requirements of law, including all registration requirements of applicable federal securities laws and the representations and warranties made in the Underwriting Agreement are true and correct as of the date of the Offering Document and the date of this Insurance Agreement. Without limiting the foregoing, the Offering Document does not contain any untrue statement of a material fact and does not omit to state a material fact necessary to make the statements made therein, in light of the circumstances under which they were made, not misleading; provided, however, that no representation is made with respect to the Insurer Information, the Servicing Information or the Mortgage Loan Information. The offer and sale of the Certificates have not been and will not be in violation of the Securities Act, any other federal, state or local securities laws. The P&S Agreement is not required to be qualified under the Trust Indenture Act, and none of the Trustee, the Depositor or the Trust Fund is required to be registered as an "investment company" under the Investment Company Act. Each of the Trust Fund and the 9

Depositor will satisfy in all material respects any of the information reporting requirements of the Securities Exchange Act arising out of the Transaction to which it or the Depositor is subject. (ii) Without attributing the representations and warranties in this Section 2.01 (l)(ii) other than to the Servicer, the Servicing Information does not contain any untrue statement of a material fact and does not omit to state a material fact necessary to make the statements made therein, in light of the circumstances under which they were made, not misleading. The Servicer has not participated in the offer and sale of the Certificates. (iii) Without attributing the representations and warranties in this Section 2.01(l)(iii) other than to the Sellers, the Mortgage Loan Information does not contain any untrue statement of a material fact and does not omit to state a material fact necessary to make the statements made therein, in light of the circumstances under which they were

Depositor will satisfy in all material respects any of the information reporting requirements of the Securities Exchange Act arising out of the Transaction to which it or the Depositor is subject. (ii) Without attributing the representations and warranties in this Section 2.01 (l)(ii) other than to the Servicer, the Servicing Information does not contain any untrue statement of a material fact and does not omit to state a material fact necessary to make the statements made therein, in light of the circumstances under which they were made, not misleading. The Servicer has not participated in the offer and sale of the Certificates. (iii) Without attributing the representations and warranties in this Section 2.01(l)(iii) other than to the Sellers, the Mortgage Loan Information does not contain any untrue statement of a material fact and does not omit to state a material fact necessary to make the statements made therein, in light of the circumstances under which they were made, not misleading. None of the Sellers have participated in the offer and sale of the Certificates. (m) Operative Documents. Each of the representations and warranties made by it in the Operative Documents (other than this Insurance Agreement) to which it is a party is true and correct in all material respects and it hereby makes each such representation and warranty to, and for the benefit of, the Certificate Insurer as if the same were set forth in full herein; provided, however, that, except as provided in Section 3.04 and subject to Article V hereto, the remedies for a breach of any such representation or warranty shall be limited to the remedies therefor provided in the related Operative Document. (n) No Consents. No consent, license, approval or authorization from, or registration, filing or declaration with, any regulatory body, administrative agency, or other governmental instrumentality, nor any consent, approval, waiver or notification of any creditor, lessor or other nongovernmental person, is required in connection with the execution, delivery and performance by it of this Insurance Agreement or of any other Operative Document to which such Person is a party, except (in each case) as have been obtained and are in full force and effect. (o) Solvency; Fraudulent Conveyance. It is solvent and will not be rendered insolvent by the Transaction and, after giving effect to the Transaction, it will not be left with an unreasonably small amount of capital with which to engage in its business, and it does not intend to incur, nor does it believe that it has incurred debts beyond its ability to pay as they mature. None of the Sellers, the Servicer, the Depositor or the Trustee contemplates the commencement of insolvency, bankruptcy, liquidation or consolidation proceedings or the appointment of a receiver, liquidator, conservator, trustee or similar official in respect of the Sellers, the Servicer, the Depositor or the Trustee, or any of their respective assets. The amount of consideration being received by the Original Mortgage Loan Sellers upon the sale of Mortgage Loans to the Secondary Mortgage Loan Seller and by the Secondary Mortgage Loan Seller upon the sale of the Mortgage Loans to the Depositor constitutes reasonably equivalent value and fair consideration therefor. The amount of consideration being received by the Depositor upon the sale of the Certificates to the Underwriters constitutes reasonably equivalent value and fair consideration for the Certificates. None of the Original Mortgage Loan Sellers are transferring the Mortgage Loans to the Secondary Mortgage Loan Seller and the Secondary 10

Mortgage Loan Seller is not transferring the Mortgage Loans to the Depositor and the Depositor is not transferring Mortgage Loans to the Trust Fund, nor is the Depositor transferring the Certificates to the Underwriters, with any intent to hinder, delay or defraud any of the Sellers or the Depositor, or any of their respective creditors. (p) Good Title; Absence of Liens. Without attributing the representations. and warranties in this subsection 2.01 (p) to the Servicer or the Sellers, immediately prior to the conveyance of the Mortgage Loans to the Trust Fund pursuant to the P&S Agreement, the Depositor had good title to, and was the sole owner of each Mortgage Loan, free of any interest of any other Person. (q) Rating Agency. The information supplied by each of the Sellers, the Servicer and the Depositor to S&P and Fitch in connection with obtaining a rating for the Class M Certificates did not contain any untrue statement of a material fact or omit to state any material fact required to be stated in order to make such information not misleading.

Mortgage Loan Seller is not transferring the Mortgage Loans to the Depositor and the Depositor is not transferring Mortgage Loans to the Trust Fund, nor is the Depositor transferring the Certificates to the Underwriters, with any intent to hinder, delay or defraud any of the Sellers or the Depositor, or any of their respective creditors. (p) Good Title; Absence of Liens. Without attributing the representations. and warranties in this subsection 2.01 (p) to the Servicer or the Sellers, immediately prior to the conveyance of the Mortgage Loans to the Trust Fund pursuant to the P&S Agreement, the Depositor had good title to, and was the sole owner of each Mortgage Loan, free of any interest of any other Person. (q) Rating Agency. The information supplied by each of the Sellers, the Servicer and the Depositor to S&P and Fitch in connection with obtaining a rating for the Class M Certificates did not contain any untrue statement of a material fact or omit to state any material fact required to be stated in order to make such information not misleading. (r) No Violation of Securities Exchange Act or Regulations T, U or X. Without attributing the representations and warranties in this subsection 2.01(r) to the Servicer or the Sellers, none of the transactions contemplated in the Operative Documents (including the use of the proceeds from the sale of any Class of Certificates) will result in a violation of Section 7 of the Securities Exchange Act, or any regulations issued pursuant thereto, or will result in a violation of any of Regulations T, U or X of the Board of Governors of the Federal Reserve System. Section 2.02. Affirmative Covenants. Each of the Sellers, the Depositor and the Servicer hereby agrees, with respect to itself (subject to Section 6.13), in each case, that during the term of this Insurance Agreement, unless the Certificate Insurer shall otherwise expressly consent in writing: (a) Compliance With Agreements and Applicable Laws. It shall comply in all material respects with the terms and conditions of, and shall perform its obligations under, and shall not be in default under, any of the Operative Documents to which it is a party, and shall comply with all material requirements of any law, rule or regulation applicable to it. (b) Existence. It and its successors and permitted assigns shall maintain its existence and shall at all times continue to be duly organized under the laws of its jurisdiction of incorporation or formation and duly qualified and duly authorized (as described in subsections 2.01(a), (b) and (c) hereof) and shall conduct its business in accordance with the terms of its organizational documents. (c) Financial Statements; Accountants' Reports; Other information. It shall keep or cause to be kept in reasonable detail books and records of account of its assets and business, including books and records relating to the Transaction. Each of the Sellers, the Depositor and the Servicer shall furnish or cause to be furnished to the Certificate Insurer in respect of itself: 11

(i) Annual Financial Statements. As soon as available, and in any event within 90 days after the close of ABFS's fiscal year, ABC Inc. shall furnish the audited consolidated statement of financial condition of ABFS and its subsidiaries as of the end of such fiscal year and the related audited consolidated statements of operations, stockholders' equity and cash flows for such fiscal year, all in reasonable detail and stating in comparative form the respective figures for the corresponding date and period in the preceding fiscal year, prepared in accordance with generally accepted accounting principles, consistently applied, and accompanied by the audit opinion of its independent accountants (which shall be a nationally recognized independent public accounting firm or otherwise acceptable to the Certificate Insurer) and by the certificate specified in Section 2.02(d). (ii) Quarterly Financial Statements. As soon as available and in any event within 45 days after the close of each of the first three quarters of each fiscal year, ABC Inc. shall furnish the unaudited consolidated statement of financial condition of ABFS and its subsidiaries as of the end of such quarter and the related unaudited consolidated statements of operations, stockholders' equity and cash flows for the portion of the fiscal year then ended, all in reasonable detail and stating in comparative form the respective figures for the corresponding date and period in the preceding fiscal year, prepared in accordance with generally accepted accounting principles consistently

(i) Annual Financial Statements. As soon as available, and in any event within 90 days after the close of ABFS's fiscal year, ABC Inc. shall furnish the audited consolidated statement of financial condition of ABFS and its subsidiaries as of the end of such fiscal year and the related audited consolidated statements of operations, stockholders' equity and cash flows for such fiscal year, all in reasonable detail and stating in comparative form the respective figures for the corresponding date and period in the preceding fiscal year, prepared in accordance with generally accepted accounting principles, consistently applied, and accompanied by the audit opinion of its independent accountants (which shall be a nationally recognized independent public accounting firm or otherwise acceptable to the Certificate Insurer) and by the certificate specified in Section 2.02(d). (ii) Quarterly Financial Statements. As soon as available and in any event within 45 days after the close of each of the first three quarters of each fiscal year, ABC Inc. shall furnish the unaudited consolidated statement of financial condition of ABFS and its subsidiaries as of the end of such quarter and the related unaudited consolidated statements of operations, stockholders' equity and cash flows for the portion of the fiscal year then ended, all in reasonable detail and stating in comparative form the respective figures for the corresponding date and period in the preceding fiscal year, prepared in accordance with generally accepted accounting principles consistently applied (subject to normal year-end adjustments) and accompanied by the certificate specified in Section 2.02 (d). (iii) Initial Report. On or before the Closing Date, the Depositor shall furnish or cause to be furnished to the Certificate Insurer a copy of a magnetic tape setting forth, as to each Mortgage Loan to be included in the Trust on the Closing Date, the information required under the definition of "Mortgage Loan Schedule" in the P&S Agreement. (iv) Certain Information. Upon the written request of the Certificate Insurer, copies of any proxy statements, financial statements, reports and other documents that it or any of its affiliates files with the United States Securities and Exchange Commission or any national securities exchange. (v) Other Information. (A) Promptly upon receipt or delivery thereof, copies of all schedules, financial statements or other similar reports delivered to or by it pursuant to the terms of any of the Operative Documents, including all reports and other information provided by or to the Trustee or any holder of Certificates pursuant to the P&S and (B) promptly upon the written request of the Certificate Insurer, such other information as the Certificate Insurer may reasonably request. (d) Compliance Certificate. ABC Inc. shall, with respect to itself and the Original Mortgage Loan Sellers, deliver or cause to be delivered to the Certificate Insurer, concurrently with the delivery of the financial statements required pursuant to subsection 2.02(c)(i) and (ii) hereof, one or more certificates signed by an officer authorized to execute such certificates on its behalf stating that: (i) a review of its performance under the Operative Documents to which it is a party during such period has been made under such officer's supervision; 12

(ii) to the best of such individual's knowledge and belief following reasonable inquiry, no Default or Event of Default has occurred, or if a Default or Event of Default has occurred, specifying the nature thereof and, if there is a right to cure such Default or Event of Default, stating in reasonable detail (including, if applicable, any supporting calculations) the steps, if any, being taken by it to cure such Default or Event of Default or to otherwise comply with the terms of the agreement to which such Default or Event of Default relates; (iii) the financial statements submitted in accordance with subsection 2.02(c)(i) or (ii) hereof are complete and correct in all material respects and present fairly the financial condition and the results of its, operations or the operations of its parent company and consolidated subsidiaries as of the dates and for the periods indicated, in accordance with generally accepted accounting principles consistently applied; and (iv) the Servicer has in full force and effect a blanket fidelity bond (or direct surety bond) and an errors and omissions insurance policy in accordance with the terms and requirements of the P&S Agreement.

(ii) to the best of such individual's knowledge and belief following reasonable inquiry, no Default or Event of Default has occurred, or if a Default or Event of Default has occurred, specifying the nature thereof and, if there is a right to cure such Default or Event of Default, stating in reasonable detail (including, if applicable, any supporting calculations) the steps, if any, being taken by it to cure such Default or Event of Default or to otherwise comply with the terms of the agreement to which such Default or Event of Default relates; (iii) the financial statements submitted in accordance with subsection 2.02(c)(i) or (ii) hereof are complete and correct in all material respects and present fairly the financial condition and the results of its, operations or the operations of its parent company and consolidated subsidiaries as of the dates and for the periods indicated, in accordance with generally accepted accounting principles consistently applied; and (iv) the Servicer has in full force and effect a blanket fidelity bond (or direct surety bond) and an errors and omissions insurance policy in accordance with the terms and requirements of the P&S Agreement. (e) Access to Records; Discussions with Officers and Accountants. Upon the prior written request of the Certificate Insurer, each of the Sellers, the Servicer and the Depositor shall permit, at the Certificate Insurer's sole expense, the Certificate Insurer or its authorized agents: (i) to inspect the books and records as they may relate to the Certificates, the Mortgage Loans, the obligations of any such Person under the Operative Documents to which it is a party, and the Transaction; (ii) to discuss the affairs, finances and accounts of such Person (with respect to the Servicer or the Sellers, to the extent relating to its capacity to perform its obligations under the Operative Documents to which it is a party) with its chief operating officer and chief financial officer; and (iii) with its consent, which shall not be unreasonably withheld, to discuss the affairs, finances and accounts of such Person (with respect to the Servicer or the Sellers, to the extent relating to its capacity to perform its obligations under the Operative Documents to which it is a party) with its independent accountants; provided, however, that its officers shall have the right to be present during such discussions. Such inspections and discussions shall be conducted during normal business hours and shall not unreasonably disrupt the business of the Sellers, the Servicer or the Depositor. The books and records of each of the Sellers, the Servicer and the Depositor shall be maintained at its address as designated herein for receipt of notices, unless it shall otherwise advise the parties hereto in writing. (f) Notice of Material Events. It shall be obligated promptly to inform the Certificate Insurer in writing of the occurrence of any of the following: 13

(i) the submission of any claim or the initiation or threat of any legal process, litigation or administrative or judicial investigation, or rule making or disciplinary proceeding by or against it that (A) would be required to be disclosed to its shareholders or to the United States Securities and Exchange Commission if any Class of Certificates were publicly registered or (B) could result in a Material Adverse Change, or the initiation of any proceeding or the promulgation of any proposed or final rule which would likely result in a Material Adverse Change; (ii) any change in the location of its principal office or any change in the location of its books and records, other than the date of the relocation by the Sellers and the Servicer to 100 East Penn Square, Philadelphia, PA 19103 in July 2003; provided, that, if such relocation does not occur in July 2003, it shall so inform the Certificate Insurer; (iii) the occurrence of any Default or Event of Default or any Material Adverse Change; (iv) the commencement of any proceedings by or against it under any applicable bankruptcy, reorganization, liquidation, rehabilitation, insolvency or other similar law now or hereafter in effect or of any proceeding in which a receiver, liquidator, conservator, trustee or similar official shall have been, or may be, appointed or requested for it or any of its assets, or any actual, proposed or anticipated assignment for the benefit of its creditors;

(i) the submission of any claim or the initiation or threat of any legal process, litigation or administrative or judicial investigation, or rule making or disciplinary proceeding by or against it that (A) would be required to be disclosed to its shareholders or to the United States Securities and Exchange Commission if any Class of Certificates were publicly registered or (B) could result in a Material Adverse Change, or the initiation of any proceeding or the promulgation of any proposed or final rule which would likely result in a Material Adverse Change; (ii) any change in the location of its principal office or any change in the location of its books and records, other than the date of the relocation by the Sellers and the Servicer to 100 East Penn Square, Philadelphia, PA 19103 in July 2003; provided, that, if such relocation does not occur in July 2003, it shall so inform the Certificate Insurer; (iii) the occurrence of any Default or Event of Default or any Material Adverse Change; (iv) the commencement of any proceedings by or against it under any applicable bankruptcy, reorganization, liquidation, rehabilitation, insolvency or other similar law now or hereafter in effect or of any proceeding in which a receiver, liquidator, conservator, trustee or similar official shall have been, or may be, appointed or requested for it or any of its assets, or any actual, proposed or anticipated assignment for the benefit of its creditors; (v) the receipt of notice that (A) it is being placed under regulatory supervision, (B) any license, permit, charter, registration or approval materially necessary for the conduct of its business is to be, or may be, suspended or revoked or (C) it is to cease and desist any practice, procedure or policy employed by it in the conduct of its business, and such suspension, revocation or cessation may result in a Material Adverse Change; or (vi) the imposition of any tax, assessment or other government charge upon the Trust Fund other than any such charge payable out of collections on the Mortgage Loans pursuant to the P&S Agreement. (g) Further Assurances. It agrees to cooperate with S&P and Fitch in connection with any review of the Transaction that may be undertaken by S&P or Fitch after the date hereof. (h) Maintenance of Licenses. It has and shall maintain all licenses, permits, charters and registrations which are material to the conduct of its business. (i) Retirement of Class M Certificates. Without attributing the covenants in this sentence to the Servicer or the Sellers, it shall instruct the Trustee upon a retirement or other payment of all of the Class M Certificates to surrender the Policy to the Certificate Insurer for cancellation. (j) Third-Party Beneficiary. It agrees that the Certificate Insurer shall have all rights of a third-party beneficiary in respect of the Operative Documents (other than this Insurance Agreement, the Underwriting Agreement, the Certificates and any other Operative Document to which the Certificate Insurer is a party) and hereby incorporates and restates its representations, 14

warranties, covenants and agreements as set forth therein or in any certificate or other document delivered in connection with the Transaction for the benefit of the Certificate Insurer. (k) Transaction Documents. It shall comply with each of the covenants and other agreements made by it in any of the Operative Documents. (l) [Reserved] (m) Closing Documents. The Depositor shall provide or cause to be provided to the Certificate Insurer (i) a photostatic or facsimile copy of each of the Operative Documents and any other documents executed and/or delivered in connection with the Transaction as requested by the Certificate Insurer concurrently with the closing on the Closing Date, and (ii) an executed original copy of each document executed in connection with the Transaction within 60 days after the Closing Date.

warranties, covenants and agreements as set forth therein or in any certificate or other document delivered in connection with the Transaction for the benefit of the Certificate Insurer. (k) Transaction Documents. It shall comply with each of the covenants and other agreements made by it in any of the Operative Documents. (l) [Reserved] (m) Closing Documents. The Depositor shall provide or cause to be provided to the Certificate Insurer (i) a photostatic or facsimile copy of each of the Operative Documents and any other documents executed and/or delivered in connection with the Transaction as requested by the Certificate Insurer concurrently with the closing on the Closing Date, and (ii) an executed original copy of each document executed in connection with the Transaction within 60 days after the Closing Date. (n) Due Diligence. The Certificate Insurer shall have the right, so long as any Class M Certificates remain outstanding, to conduct reviews of the Servicer's practices through reviews of the Mortgage Loans and the servicing practices of the Servicer and through reappraisals of Mortgaged Properties. Such due diligence shall be conducted in a reasonable manner convenient to both the Servicer and the Certificate Insurer and at the Certificate Insurer's sole expense. (o) Disclosure Document. Each Offering Document delivered with respect to the Class M Certificates shall clearly disclose that the Policy is not covered by the property/casualty insurance security fund specified in Article 76 of the New York Insurance Law. In addition, each Offering Document delivered with respect to the Class M Certificates which includes financial information of the Certificate Insurer prepared in accordance with GAAP shall include the following statement immediately preceding such financial information: The New York State Insurance Department recognizes only statutory accounting practices for determining and reporting the financial condition and results of operations of an insurance company, for determining its solvency under the New York Insurance Law, and for determining where its financial condition warrants the payment of a dividend to its stockholders. No consideration is given by the New York State Insurance Department to financial statements prepared in accordance with generally accepted accounting principles in making any such determinations. (p) Special Purpose Entities. (i) Each of the Depositor and the Secondary Mortgage Loan Seller shall conduct its business solely in its own name through its duly authorized officers or agents so as not to mislead others as to the identity of the entity with which those others are concerned. (ii) Each of the Depositor and the Secondary Mortgage Loan Seller shall keep its assets and liabilities wholly separate from those of all other entities. Neither the Depositor nor the Secondary Mortgage Loan Seller shall commingle its funds or other assets with those of any of its Affiliates (other than in respect of items of payment or funds which may be commingled until 15

deposit into the Collection Account in accordance with the P&S Agreement) and shall not hold its assets in any manner that would create an appearance that such assets belong to any such Affiliate, not maintain bank accounts or other depository accounts to which any such Affiliate is an account party, into which such Affiliate makes deposits or from which any such Affiliate has the power to make withdrawals and not act as an agent or representative of any of its Affiliates in any capacity. (iii) Neither the Depositor nor the Secondary Mortgage Loan Seller shall guarantee any obligation of any of its Affiliates, or otherwise hold itself out as responsible for the debts of any Affiliate. (iv) Each of the Depositor and the Secondary Mortgage Loan Seller shall pay its own incidental administrative costs and expenses from its own funds and allocate all other shared overhead expenses (including, without

deposit into the Collection Account in accordance with the P&S Agreement) and shall not hold its assets in any manner that would create an appearance that such assets belong to any such Affiliate, not maintain bank accounts or other depository accounts to which any such Affiliate is an account party, into which such Affiliate makes deposits or from which any such Affiliate has the power to make withdrawals and not act as an agent or representative of any of its Affiliates in any capacity. (iii) Neither the Depositor nor the Secondary Mortgage Loan Seller shall guarantee any obligation of any of its Affiliates, or otherwise hold itself out as responsible for the debts of any Affiliate. (iv) Each of the Depositor and the Secondary Mortgage Loan Seller shall pay its own incidental administrative costs and expenses from its own funds and allocate all other shared overhead expenses (including, without limitation, telephone and other utility charges, the services of shared employees, consultants and agent, and reasonable legal auditing expenses), and other items of cost and expense shared between the Depositor or the Secondary Mortgage Loan Seller and any respective Affiliate thereof, on the basis of actual use to the extent practicable. (v) The financial statements, of the Secondary Mortgage Loan Seller and the Depositor and their respective affiliates shall disclose the effects of the Transactions in accordance with GAAP and shall disclose that the assets of the Depositor are not available to pay creditors of the Sellers or their respective Affiliates. (vi) The resolutions, agreements and other instruments of each of the Depositor and the Secondary Mortgage Loan Seller underlying the transactions described in this Insurance Agreement and in the other Documents shall, be continuously maintained by it as its official records, separately identified and held apart from the records of their respective Affiliates. (vii) Each of the Depositor and the Secondary Mortgage Loan Seller shall take such actions as are necessary on its part to ensure that the facts and assumptions set forth in the opinions delivered by its counsel remain true and correct at all times. (q) Benefit Plan. (i) It shall comply in all material respects with the provisions of ERISA, the Code and all other applicable laws, and the Plan and Multi-Employer Plan regulations and interpretations thereunder to the extent applicable, with respect to each Benefit Plan. Without limiting the foregoing, it shall not, and shall cause each ERISA Affiliate not to: (A) permit to exist any material accumulated funding deficiency as defined in Section 302 of ERISA or Section 412 of the Code with respect to any Plan or amend any Plan if, as a result of such amendment, it or an ERISA Affiliate would be required to provide material security under Section 401 or 412 of the Code or Section 306 or 307 of ERISA; or 16

(B) terminate any Benefit Plan of either it or any ERISA Affiliate if such termination would result in any material liability to it or an ERISA Affiliate or withdraw from any Multiemployer Plan if such withdrawal would result in any material liability to it or an ERISA Affiliate. (ii) It and its subsidiaries shall not engage in any non-exempt prohibited transaction (within the meaning of Code Section 4975 or ERISA Section 406) with respect to any Benefit Plan which would result in a material liability to it or any such subsidiary. Section 2.03. Negative Covenants. Each of the Sellers, the Servicer, the Depositor and the Trustee hereby agrees, with respect to itself (subject to Section 6.13), that during the term of this Insurance Agreement, unless the Certificate Insurer shall otherwise expressly consent in writing: (a) Impairment of Rights. It shall not take any action, or fail to take any action, if such action or failure to take action may result in a Material Adverse Change (within the meaning of the second sentence of the definition of

(B) terminate any Benefit Plan of either it or any ERISA Affiliate if such termination would result in any material liability to it or an ERISA Affiliate or withdraw from any Multiemployer Plan if such withdrawal would result in any material liability to it or an ERISA Affiliate. (ii) It and its subsidiaries shall not engage in any non-exempt prohibited transaction (within the meaning of Code Section 4975 or ERISA Section 406) with respect to any Benefit Plan which would result in a material liability to it or any such subsidiary. Section 2.03. Negative Covenants. Each of the Sellers, the Servicer, the Depositor and the Trustee hereby agrees, with respect to itself (subject to Section 6.13), that during the term of this Insurance Agreement, unless the Certificate Insurer shall otherwise expressly consent in writing: (a) Impairment of Rights. It shall not take any action, or fail to take any action, if such action or failure to take action may result in a Material Adverse Change (within the meaning of the second sentence of the definition of such term, for the avoidance of doubt), nor shall it interfere (or, with respect to the Trustee, intentionally interfere or fail to remove or otherwise withdraw any unintentional interference by it brought to the attention of a Responsible Officer, as defined in the P&S Agreement) with the enforcement of any rights of the Certificate Insurer under or with respect to any of the Operative Documents or with respect to the Trust Fund. It shall give the Certificate Insurer written notice of any such event, action or failure to act on the earlier of: (i) the date upon which any publicly available filing or release is made with respect to such event, action or failure to act and (ii) promptly prior to the date of occurrence of such event, action or failure to act. It shall furnish to the Certificate Insurer all information reasonably requested by it that is necessary to determine compliance with this paragraph. (b) Waiver, Amendments, Etc. It shall not modify, waive or amend, or consent to any modification, waiver or amendment of, any of the terms, provisions or conditions of the Operative Documents to which it is a party without the prior written consent of the Certificate Insurer except as permitted by the P&S Agreement. (c) Clean-up Calls. The Servicer shall not exercise its right to terminate the Trust Fund by purchasing the Mortgage Loans and other assets at the applicable Termination Price, or otherwise, without the consent of the Certificate Insurer unless, as a result of the termination, all interest, principal and other amounts due or otherwise owed in respect of the Class M Certificates would be or otherwise are paid in full and, following such termination, all amounts reimbursable or otherwise payable to the Certificate Insurer under any Operative Document would be or otherwise are reimbursed or otherwise paid in full of the applicable Termination Price or other consideration payable in respect thereof. None of the Servicer, the Depositor or the Trustee shall appoint, consent to or otherwise suffer the appointment of any successor to the Servicer under the P&S Agreement without the consent of the Certificate Insurer unless such successor shall have agreed to be bound by the provisions of this Insurance Agreement and the Optional Termination Side Letter, and upon becoming the successor to the Servicer under the P&S Agreement, the Trustee shall be so bound. 17

(d) Creation of Indebtedness; Guarantees. Except as contemplated by the Documents, the Depositor shall not create, incur, assume or suffer to exist any indebtedness other than indebtedness guaranteed or approved in writing by the Certificate Insurer except debt for which there is no recourse to the Depositor excluding recourse to the assets pledged to secure such indebtedness. The Depositor shall not assume, guarantee, endorse or otherwise be or become directly or contingently liable for the obligations of any Person by, among other things, agreeing to purchase any obligation of another Person, agreeing to advance funds to such Person or causing or assisting such Person to maintain any amount of capital. (e) Retirement of Certificates. The Trustee shall, upon retirement of the Class M Certificates, furnish to the Certificate Insurer a notice of such retirement and, upon such retirement, shall surrender the Policy to the Certificate Insurer for cancellation. (f) No Change in Name, Etc. The Depositor shall not change its name (including using any trade names, fictitious names, assumed names or "doing business as" names), identity or organizational structure in any manner that would, could or might make any financing statement or continuation statement filed in connection with the closing of the Transactions, or otherwise in accordance herewith, seriously misleading unless it shall have given the

(d) Creation of Indebtedness; Guarantees. Except as contemplated by the Documents, the Depositor shall not create, incur, assume or suffer to exist any indebtedness other than indebtedness guaranteed or approved in writing by the Certificate Insurer except debt for which there is no recourse to the Depositor excluding recourse to the assets pledged to secure such indebtedness. The Depositor shall not assume, guarantee, endorse or otherwise be or become directly or contingently liable for the obligations of any Person by, among other things, agreeing to purchase any obligation of another Person, agreeing to advance funds to such Person or causing or assisting such Person to maintain any amount of capital. (e) Retirement of Certificates. The Trustee shall, upon retirement of the Class M Certificates, furnish to the Certificate Insurer a notice of such retirement and, upon such retirement, shall surrender the Policy to the Certificate Insurer for cancellation. (f) No Change in Name, Etc. The Depositor shall not change its name (including using any trade names, fictitious names, assumed names or "doing business as" names), identity or organizational structure in any manner that would, could or might make any financing statement or continuation statement filed in connection with the closing of the Transactions, or otherwise in accordance herewith, seriously misleading unless it shall have given the Certificate Insurer at least 60 days' prior written notice thereof and shall have filed before the date of such change appropriate amendments to all such previously filed financing statements or continuation statements. (g) Limitation on Mergers, Etc. The Depositor shall not consolidate with or merge with or into any Person or transfer all or substantially all of its assets to any Person or liquidate or dissolve except as provided in the Operative Documents to which it is a party or as permitted hereby. The Depositor shall furnish to the Certificate Insurer all information requested by the Certificate Insurer that is reasonably necessary to determine compliance with this paragraph. (h) Successors. No successor Servicer, Paying Agent, Collateral Agent or Trustee shall be terminated or designated without the prior written approval of the Certificate Insurer, which consent shall not be unreasonably withheld or delayed. Section 2.04. Representations, Warranties and Covenants of the Certificate Insurer. The Certificate Insurer represents and warrants to and covenants with the other parties hereto as follows: (a) Organization and Licensing. The Certificate Insurer is duly authorized and validly existing stock insurance company organized under the Insurance Laws of the State of New York, duly qualified and licensed to issue financial guaranty insurance policies under the laws of the State of New York and is in good standing under the laws of that State. (b) Corporate Power. The Certificate Insurer has the corporate power and authority to issue the Policy and execute and deliver this Insurance Agreement and to perform all of its obligations hereunder and thereunder. 18

(c) Authorization; Approvals. Proceedings legally required for the issuance and execution of the Policy and the execution, delivery and performance of this Insurance Agreement have been taken and licenses, orders, consents or other authorizations or approvals of any governmental boards or bodies legally required for the enforceability of the Policy and the conduct by the Certificate Insurer of the business and activities contemplated by the Transaction have been obtained; any proceedings not taken and any licenses, authorizations or approvals not obtained are not material to the enforceability of the Policy. (d) Enforceability. The Policy, when issued, and this Insurance Agreement will each constitute a legal, valid and binding obligation of the Certificate Insurer, enforceable against the Certificate Insurer in accordance with its terms, subject to bankruptcy, insolvency, reorganization, moratorium, receivership and other similar laws affecting creditors' rights generally and to general principles of equity and subject to principles of public policy limiting the right to enforce the indemnification provisions contained therein and herein, insofar as such provisions relate to indemnification for liabilities arising under federal securities laws. (e) Insurer Information. The Insurer Information is limited. With due regard for the limitations of the Insurer

(c) Authorization; Approvals. Proceedings legally required for the issuance and execution of the Policy and the execution, delivery and performance of this Insurance Agreement have been taken and licenses, orders, consents or other authorizations or approvals of any governmental boards or bodies legally required for the enforceability of the Policy and the conduct by the Certificate Insurer of the business and activities contemplated by the Transaction have been obtained; any proceedings not taken and any licenses, authorizations or approvals not obtained are not material to the enforceability of the Policy. (d) Enforceability. The Policy, when issued, and this Insurance Agreement will each constitute a legal, valid and binding obligation of the Certificate Insurer, enforceable against the Certificate Insurer in accordance with its terms, subject to bankruptcy, insolvency, reorganization, moratorium, receivership and other similar laws affecting creditors' rights generally and to general principles of equity and subject to principles of public policy limiting the right to enforce the indemnification provisions contained therein and herein, insofar as such provisions relate to indemnification for liabilities arising under federal securities laws. (e) Insurer Information. The Insurer Information is limited. With due regard for the limitations of the Insurer Information, however, as of the date of the Offering Document and as of the date hereof, the Insurer Information does not contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements contained therein, in the light of the circumstances under which they were made, not misleading. Copies of the Certificate Insurer's quarterly and annual statutory financial statements prepared on the basis of statutory accounting principles as filed with the New York State Insurance Department and annual financial statements prepared in accordance with generally accepted accounting principles are available upon written request to the Certificate Insurer. (f) No Litigation. There are no actions, suits, proceedings or investigations pending or, to the best of the Certificate Insurer's knowledge, threatened against it at law or in equity or before or by any court, governmental agency, board or commission or any arbitrator which, if decided adversely, would materially and adversely affect its ability to perform its obligations under the Policy or this Insurance Agreement. (g) The execution by the Certificate Insurer of this Insurance Agreement will not, and the satisfaction of the terms hereof will not, conflict with or result in a breach of any of the terms, conditions or provisions of the organizational documents of the Certificate Insurer, or any restriction contained in any contract, agreement or instrument to which the Certificate Insurer is a party or by which it is bound or constitute a default under any of the foregoing. (h) Confidential Information. The Certificate Insurer agrees that it and its shareholders, directors, agents, accountants and attorneys shall keep confidential any information or matter of which it becomes aware (i) as a result of financial statements, reports or other information furnished pursuant to Section 2.02(c) or (ii) during the inspections conducted or discussions had pursuant to Section 2.02(e), unless such information is readily available from public sources or is disclosed to the Certificate Insurer on a nonconfidential basis from any Person or source, which Person or source is not actually known to the Certificate Insurer to be subject to a confidentiality obligation to the Sellers, the Servicer or the Depositor, or except as may be otherwise required by regulation, law or court order or requested by appropriate governmental 19

authorities or as necessary or expedient to preserve its rights or security under or to enforce any of the Operative Documents or any other agreement executed in connection with the transactions related to the Operative Documents to which the Certificate Insurer is a party or of which the Certificate Insurer is a third party beneficiary, or in connection with the defense of any legal proceeding in which the Certificate Insurer is a party; provided, however, that the foregoing shall not limit the right of the Certificate Insurer to make such information available to its regulators, rating agencies, reinsurers, participants, credit and liquidity providers, any government sponsored entities, counsel and accountants. If the Certificate Insurer is requested or required (by oral questions, interrogatories, requests for information or documents subpoena, civil investigative demand or similar process) to disclose any information of which it becomes aware through such inspections or discussions, the Certificate Insurer will promptly notify the Sellers, the Servicer and the Depositor of such request(s) so that the Sellers, the Servicer and the Depositor may seek an appropriate protective order and/or waive the Certificate Insurer's compliance with the provisions of this Insurance Agreement, unless the Certificate Insurer, in the opinion of its counsel, is prohibited from providing such notice by any tribunal, court or governmental agency or other

authorities or as necessary or expedient to preserve its rights or security under or to enforce any of the Operative Documents or any other agreement executed in connection with the transactions related to the Operative Documents to which the Certificate Insurer is a party or of which the Certificate Insurer is a third party beneficiary, or in connection with the defense of any legal proceeding in which the Certificate Insurer is a party; provided, however, that the foregoing shall not limit the right of the Certificate Insurer to make such information available to its regulators, rating agencies, reinsurers, participants, credit and liquidity providers, any government sponsored entities, counsel and accountants. If the Certificate Insurer is requested or required (by oral questions, interrogatories, requests for information or documents subpoena, civil investigative demand or similar process) to disclose any information of which it becomes aware through such inspections or discussions, the Certificate Insurer will promptly notify the Sellers, the Servicer and the Depositor of such request(s) so that the Sellers, the Servicer and the Depositor may seek an appropriate protective order and/or waive the Certificate Insurer's compliance with the provisions of this Insurance Agreement, unless the Certificate Insurer, in the opinion of its counsel, is prohibited from providing such notice by any tribunal, court or governmental agency or other governmental or quasi-governmental authority. If, in the absence of a protective order or the receipt of a waiver hereunder, the Certificate Insurer is, nonetheless, in the opinion of its counsel, compelled to disclose such information to any tribunal or else suffer a penalty or liability, the Certificate Insurer may disclose such information to such tribunal that the Certificate Insurer is compelled to disclose; provided, however, that a copy of all information disclosed is provided to the Sellers, the Servicer and the Depositor promptly upon such disclosure; provided, further, however, that no such copy must be delivered or supplied if the Certificate Insurer, in the opinion of its counsel, is prohibited from providing such a copy by any tribunal, court or governmental agency or other governmental or quasi-governmental authority. (i) Compliance with Law, Etc. No practice, procedure or policy employed, or proposed to be employed, by the Certificate Insurer in the conduct of its business violates any law, regulation, judgment, agreement, order or decree applicable to the Certificate Insurer that, if enforced, could result in a Material Adverse Change with respect to the Certificate Insurer. (j) Rating. The Certificate Insurer is not aware of any facts with regard to itself which, if disclosed to S&P or Fitch, would be reasonably expected to result in a downgrade of the rating of the claims paying ability of the Certificate Insurer by S&P or Fitch. (k) Securities Act Registration. To the extent that the Policy constitutes a security within the meaning of Section 2 (1) of the Securities Act, the Policy is a security that is exempt from registration under the Securities Act pursuant to the exemption provided by Section 3(a)(8) thereof. ARTICLE III THE POLICY; REIMBURSEMENT Section 3.01. Issuance of the Policy. The Certificate Insurer agrees to issue the Policy on the Closing Date subject to satisfaction of the conditions precedent set forth below on or prior to the Closing Date: 20

(a) Payment of Fees, Premium and Expenses. The Certificate Insurer shall have been paid or reimbursed for, or payment shall have been made on behalf of the Certificate Insurer of, that portion of the Premium and those fees and expenses that are payable on the Closing Date; (b) Operative Documents. The Certificate Insurer shall have received a copy of each of the Operative Documents, in form and substance reasonably satisfactory to the Certificate Insurer, duly authorized, executed and delivered by each party thereto (other than the Certificate Insurer); (c) Certified Documents and Resolutions. The Certificate Insurer shall have received copies of (i) the organizational documents for each of the Sellers, the Servicer, the Depositor and the other parties to the Operative Documents and (ii) the resolutions of the Board of Directors of each such Person authorizing the issuance of the Certificates and the execution, delivery and performance by such Person of the Operative Documents to which it is a party and the transactions contemplated thereby, certified by the Secretary or an Assistant Secretary of such Person (which certificate shall state that such organizational documents are in full

(a) Payment of Fees, Premium and Expenses. The Certificate Insurer shall have been paid or reimbursed for, or payment shall have been made on behalf of the Certificate Insurer of, that portion of the Premium and those fees and expenses that are payable on the Closing Date; (b) Operative Documents. The Certificate Insurer shall have received a copy of each of the Operative Documents, in form and substance reasonably satisfactory to the Certificate Insurer, duly authorized, executed and delivered by each party thereto (other than the Certificate Insurer); (c) Certified Documents and Resolutions. The Certificate Insurer shall have received copies of (i) the organizational documents for each of the Sellers, the Servicer, the Depositor and the other parties to the Operative Documents and (ii) the resolutions of the Board of Directors of each such Person authorizing the issuance of the Certificates and the execution, delivery and performance by such Person of the Operative Documents to which it is a party and the transactions contemplated thereby, certified by the Secretary or an Assistant Secretary of such Person (which certificate shall state that such organizational documents are in full force and effect without modification on the Closing Date); (d) Incumbency Certificate. The Certificate Insurer shall have received a certificate of the Secretary or an Assistant Secretary of each of the Sellers, the Servicer, the Depositor and the other parties to the Operative Documents certifying the names and signatures of the officers of each such Person authorized to execute and deliver the Operative Documents to which such Person is a party and that shareholder consent to the execution and delivery of such documents is not necessary or has been obtained; (e) Representations and Warranties. The representations and warranties of the Sellers, the Servicer, and the Depositor set forth or incorporated by reference in this Insurance Agreement shall be true and correct on and as of the Closing Date as if made on the Closing Date and the Certificate Insurer shall have received a certificate of appropriate officers of each such Person to that effect; (f) Opinions of Counsel. The Certificate Insurer shall have received opinions of counsel addressed to the Certificate Insurer in respect of the Sellers, the Servicer and the Depositor, and the other parties to the Operative Documents and the Transaction, in form and substance satisfactory to the Certificate Insurer and addressing such matters as the Certificate Insurer may reasonably request; (g) Approvals, Etc. The Certificate Insurer shall have received true and correct copies of all approvals and consents, if any (including any required approval of the shareholders or other owners of equity interests in each of the Sellers, the Servicer and the Depositor), required in connection with the Transaction; (h) No Litigation, Etc. No suit, action or other proceeding, investigation or injunction, or final judgment relating thereto, shall be pending or threatened before any court, governmental or administrative agency or 21

arbitrator in which it is sought to restrain or prohibit or to obtain damages or other relief in connection with any of the Operative Documents or the consummation of the Transaction; (i) Legality. No statute, rule, regulation or order shall have been enacted, entered or deemed applicable by any government or governmental or administrative agency or court that would make the Transaction illegal or otherwise prevent the consummation thereof; (j) Satisfaction of Conditions of the Underwriting Agreement. All conditions in the Underwriting Agreement relating to the Underwriters' obligation to purchase the Certificates shall have been satisfied. The Certificate Insurer shall have received copies of each of the documents, and shall be entitled to rely on each of the documents (other than the opinion of counsel to the Underwriter), required to be delivered to the Underwriter pursuant to the Underwriting Agreement; (k) Issuance of Ratings. The Certificate Insurer shall have received confirmation that the Class M Certificates insured by the Policy are rated at least "BBB" by S&P and Fitch, without regard to the Policy, and that the Class M Certificates, when issued, will be rated at least "AA" by S&P and Fitch;

arbitrator in which it is sought to restrain or prohibit or to obtain damages or other relief in connection with any of the Operative Documents or the consummation of the Transaction; (i) Legality. No statute, rule, regulation or order shall have been enacted, entered or deemed applicable by any government or governmental or administrative agency or court that would make the Transaction illegal or otherwise prevent the consummation thereof; (j) Satisfaction of Conditions of the Underwriting Agreement. All conditions in the Underwriting Agreement relating to the Underwriters' obligation to purchase the Certificates shall have been satisfied. The Certificate Insurer shall have received copies of each of the documents, and shall be entitled to rely on each of the documents (other than the opinion of counsel to the Underwriter), required to be delivered to the Underwriter pursuant to the Underwriting Agreement; (k) Issuance of Ratings. The Certificate Insurer shall have received confirmation that the Class M Certificates insured by the Policy are rated at least "BBB" by S&P and Fitch, without regard to the Policy, and that the Class M Certificates, when issued, will be rated at least "AA" by S&P and Fitch; (l) No Default. No Default or Event of Default shall have occurred; (m) Additional Items. The Certificate Insurer shall have received such other documents, instruments, approvals or opinions reasonably requested by the Certificate Insurer, including evidence satisfactory to the Certificate Insurer that the conditions precedent, if any, in the other Operative Documents have been satisfied; and (n) Satisfactory Documentation. The Certificate Insurer and its counsel shall have reasonably determined that all agreements, instruments, certificates, opinions and other documents to be delivered in connection with the issuance of the Class M Certificates conform to the terms of the Operative Documents and the Offering Document. Section 3.02. Payment of Fees and Premium. (a) Legal, Accounting and Due Diligence Fees. ABC Inc. shall pay or cause to be paid to the Certificate Insurer, on the Closing Date, the legal, accounting and due diligence fees of the Certificate Insurer, as well as disbursements of counsel to the Certificate Insurer. (b) Rating Agency Fees. ABC Inc. will promptly pay or cause to be paid the initial fees of S&P and Fitch with respect to the Class M Certificates and the transactions contemplated hereby following, receipt of a statement with respect thereto. All periodic and subsequent fees of S&P or Fitch with respect to, and directly allocable to, the Class M Certificates shall be for the account of, and shall be billed to, ABC Inc.. The fees for any other rating agency shall be paid by the party requesting such other agency's rating, unless such other agency is a substitute for S&P or Fitch in the event that S&P or Fitch is no longer rating the Class M Certificates, in which case the fees for such agency shall be paid by ABC Inc. 22

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

(c) Premium. In consideration of the issuance by the Certificate Insurer of the Policy, the Certificate Insurer shall be entitled to receive pursuant to this Insurance Agreement and the P&S Agreement, in the State of New York, the Premium as and when due in accordance with the terms of this Insurance Agreement (i) in the case of the Premium due on the Closing Date, directly from the net proceeds of the issuance of the Class M Certificates or from ABC Inc. to the extent that such proceeds are insufficient to pay such Premium, and (ii) on each Distribution Date, pursuant to Section 6.05 of the P&S Agreement until the Class M Certificates have been indefeasibly paid in full. The Premium paid under this Insurance Agreement or under the P&S Agreement shall be nonrefundable and the right of the Certificate Insurer to receive any Premium payable hereunder or thereunder shall be absolute and unconditional, in each case without regard to whether the Certificate Insurer makes any payment under the Policy or any other circumstances relating to the Class M Certificates or the Policy (including any provision being made for payment of the Class' M Certificates prior to maturity). All payments of the Premium shall be made to the Certificate Insurer by wire transfer to an account designated by the Certificate Insurer in a written notice to ABC Inc. and the Trustee. Section 3.03. Reimbursement Obligation. (a) As and when due in accordance with and from the funds specified in Section 6.05 of the P&S Agreement, the Certificate Insurer shall be entitled to reimbursement for any payment made by the Certificate Insurer under the Policy and any other amount reimbursable or otherwise payable to the Certificate Insurer under this Agreement, to the extent not previously reimbursed or otherwise paid. Such right of reimbursement shall be absolute and unconditional, in each case without regard to whether the Certificate Insurer makes any payment under the Policy or any other circumstances relating to the Class M Certificates or the Policy (including any provision) being made for payment of the Class M Certificates prior to maturity). Reimbursement shall be due and payable on the date that any such amount is paid, in an amount equal to the amount so paid and all such amounts previously paid that remain unreimbursed, together with interest on any and all such amounts remaining unreimbursed (to the extent permitted by law, if in respect of any unreimbursed amounts representing interest) from the date such amounts became due until paid in full (after as well as before judgment), at a rate of interest equal to the Late Payment Rate. (b) Each of the Depositor, the Sellers and the Servicer agrees to pay, anything herein or in any of the other Operative Documents to the contrary notwithstanding, and the Certificate Insurer shall be entitled to full reimbursement from it for: (i) in the case of the Servicer, (A) any payment made under the Policy' arising as a result of any failure by the Servicer to repurchase, substitute for or otherwise deposit any amount required to be deposited in respect of any Mortgage Loan as mandated by any Operative Document (whether because defective or otherwise), together with interest on any and all such amounts remaining unreimbursed (to the extent permitted by law, if in respect of any such unreimbursed amounts representing interest) from the date such amounts became due until paid in full (after as well as before judgment), at a rate of interest equal to the Late Payment Rate, and (B) any payment made under the Policy arising as a result of the failure by the Servicer to otherwise pay or deposit any amount required to be paid or deposited pursuant to the Operative Documents (other than the Certificates), together with interest on any and all 23

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

such amounts remaining unreimbursed (to the extent permitted by law, if in respect of any such unreimbursed amounts representing interest) from the date such amounts became due until paid in full (after as well as before judgment), at a rate of interest equal to the Late Payment Rate; (ii) in case of the Sellers, (A) any payment made under the Policy arising as a result of its failure to repurchase, substitute for or otherwise deposit any amount required to be deposited in respect of any Mortgage Loan as mandated by the Purchase Agreement (whether because defective or otherwise), together with interest on any and alt such amounts remaining unreimbursed (to the extent permitted by law, if in respect of any such unreimbursed amounts representing interest) from the date such amounts became due until paid in full (after as well as before judgment), at a rate of interest equal to the Late Payment Rate; and (iii) in the case of the Depositor, any payment made under the Policy arising as a result of a breach by the Depositor of any of its representations, warranties, covenants or agreements in any of the Operative Documents (including any failure to make any payment, remittance or deposit required to be made by it pursuant to the Operative Documents (other than the Certificates)), together with interest on any and all such amounts remaining unreimbursed (to the extent permitted by law, if in respect of any such unreimbursed amounts representing interest) from the date such amounts became due until paid in full (after as well as before judgment), at a rate of interest equal to the Late Payment Rate. (c) Each of the Sellers, the Depositor and the Servicer agrees to pay to the Certificate Insurer any and all reasonable charges, fees, costs and expenses that the Certificate Insurer may reasonably pay or incur, including reasonable attorneys' and accountants' fees and expenses, in connection with: (i) in the case of the Depositor, the enforcement, defense or preservation of any rights in respect of any of the Operative Documents as against or otherwise relating to it, including defending, monitoring or participating in any litigation or proceeding (including any bankruptcy or other insolvency proceeding in respect of any Transaction participant or any affiliate thereof) relating to any of the Operative Documents or any party to any of the Operative Documents (in its capacity as such a party) or the Transaction; and (ii) in the case of the Sellers and the Servicer, (i) any accounts established to facilitate payments under the Policy to the extent that the Certificate Insurer has not been immediately reimbursed on the date that any amount is paid by the Certificate Insurer under the Policy, (ii) the enforcement, defense or preservation of any rights in respect of any of the Operative Documents as against or otherwise relating to it, including defending, monitoring or participating in any litigation or proceeding (including any bankruptcy or other insolvency proceeding in respect of any Transaction participant or any affiliate thereof) relating to any of the Operative Documents, any party to any of the Operative Documents (in its capacity as such a party) or the Transaction or (iii) any amendment, waiver, consent or other action with respect to, or related to, any Operative Document, whether or not executed or completed. 24

Costs and expenses shall include a reasonable allocation of compensation and overhead (up to a limit of $30,000 in the aggregate) attributable to the time of employees of the Certificate Insurer spent in connection with the actions described above (other than surveillance and monitoring), and the Certificate Insurer reserves the right to charge a reasonable fee as a condition to executing any waiver or consent proposed in respect of any of the Operative Documents. Payments under this subsection 3.03(c) shall be made as the related charges, fees, costs or expenses are paid or incurred by the Certificate Insurer. All amounts payable under this Section 3.03 are to be immediately due and payable without demand, in full, without any requirement on the part of the Certificate Insurer or any other Person to seek reimbursement of such amounts from any source of reimbursement or indemnity, or to allocate such amounts to any other transaction that may have benefited from the expenditure of such amounts. (d) Each of the Sellers, the Servicer and the Depositor agrees to pay to the Certificate Insurer interest on any and all amounts specified in subsection 3.03(b) or 3.03(c) from the date payable until payment thereof in full and to pay to the Certificate Insurer interest on any and all amounts specified in Section 3.02 or 3.04 from the date such amounts become due or, in the case of Section 3.04, are incurred or paid by the Certificate Insurer until payment thereof in full (after as well as before judgment), in each case at the Late Payment Rate.

Costs and expenses shall include a reasonable allocation of compensation and overhead (up to a limit of $30,000 in the aggregate) attributable to the time of employees of the Certificate Insurer spent in connection with the actions described above (other than surveillance and monitoring), and the Certificate Insurer reserves the right to charge a reasonable fee as a condition to executing any waiver or consent proposed in respect of any of the Operative Documents. Payments under this subsection 3.03(c) shall be made as the related charges, fees, costs or expenses are paid or incurred by the Certificate Insurer. All amounts payable under this Section 3.03 are to be immediately due and payable without demand, in full, without any requirement on the part of the Certificate Insurer or any other Person to seek reimbursement of such amounts from any source of reimbursement or indemnity, or to allocate such amounts to any other transaction that may have benefited from the expenditure of such amounts. (d) Each of the Sellers, the Servicer and the Depositor agrees to pay to the Certificate Insurer interest on any and all amounts specified in subsection 3.03(b) or 3.03(c) from the date payable until payment thereof in full and to pay to the Certificate Insurer interest on any and all amounts specified in Section 3.02 or 3.04 from the date such amounts become due or, in the case of Section 3.04, are incurred or paid by the Certificate Insurer until payment thereof in full (after as well as before judgment), in each case at the Late Payment Rate. Section 3.04. Indemnification. (a) In addition to any and all of the Certificate Insurer's rights of reimbursement, indemnification, subrogation and to any other rights of the Certificate Insurer pursuant hereto or under law or in equity, each of the Depositor, the Sellers and the Servicer agrees to pay, and to protect, indemnify and save harmless, the Certificate Insurer and its officers, directors, shareholders, employees, agents and each Person, if any, who controls the Certificate Insurer within the meaning of either Section 15 of the Securities Act or Section 20 of the Securities Exchange Act from and against, any and all claims, losses, liabilities (including penalties), actions, suits, judgments, demands, damages, costs or expenses (including reasonable fees and expenses of attorneys, consultants and auditors and reasonable costs of investigations actually incurred) of any nature (including payments made under the Policy): (i) in the case of the Depositor and the Servicer (subject to the proviso that, to the extent not required to be paid by the Certificate Insurer to any other Person, the Servicer shall not be required to pay to the Certificate Insurer or to protect, indemnify or hold the Certificate Insurer harmless against punitive or other exemplary damages or loss of profits), arising out of or relating to the breach by the Depositor or, with respect to the Servicer, its breach of any of the representations, warranties or covenants contained herein or arising out of or relating to the transactions contemplated by the Operative Documents by reason of: (A) with, respect to the Depositor only, any omission or action in connection with the offering, sale, issuance or delivery of the Certificates by the Depositor, other than those covered by subparagraph (F) below; (B) the misfeasance or malfeasance of, or gross negligence or theft committed by, the Depositor or, with respect to the Servicer, itself, or any director, officer, employee, agent, independent contractor or other 25

representative of any such Person, in connection with the Transaction or arising from or relating to any Operative Document; (C) the violation by the Depositor or, with respect to the Servicer, itself of (a) any United States federal, state or local law, rule or regulation or (b) any judgment, order or decree that is applicable to any such Person; (D) the breach by the Depositor or, with respect to the Servicer, itself of any representation, warranty, or covenant under any of the other Operative Documents or the occurrence, in respect of any such Person under any of the other Operative Documents, of any "incipient default" or "event of default"; (E) shortfalls, if any (but in the case of the Servicer, only to the extent caused by it), attributable to the (A) liability of any Person for taxes payable in respect of the Certificates or any interest or interests represented thereby, (B) failure to qualify or loss of status by, or termination of, any REMIC as such or (C) imposition of income or other taxes on or with respect to the Trust or the Trust Fund; or

representative of any such Person, in connection with the Transaction or arising from or relating to any Operative Document; (C) the violation by the Depositor or, with respect to the Servicer, itself of (a) any United States federal, state or local law, rule or regulation or (b) any judgment, order or decree that is applicable to any such Person; (D) the breach by the Depositor or, with respect to the Servicer, itself of any representation, warranty, or covenant under any of the other Operative Documents or the occurrence, in respect of any such Person under any of the other Operative Documents, of any "incipient default" or "event of default"; (E) shortfalls, if any (but in the case of the Servicer, only to the extent caused by it), attributable to the (A) liability of any Person for taxes payable in respect of the Certificates or any interest or interests represented thereby, (B) failure to qualify or loss of status by, or termination of, any REMIC as such or (C) imposition of income or other taxes on or with respect to the Trust or the Trust Fund; or (F) subject to the proviso that the Servicer shall be liable under this subparagraph (F) only in respect of the Servicing Information and that the Depositor shall not have liability in respect of the Servicing Information, any untrue statement or alleged untrue statement of a material fact contained in the Offering Document (or any preliminary version thereof or information provided in addition thereto, to the extent not corrected in the Offering Document as delivered or any subsequently provided additional information consistent therewith), or any omission or alleged omission to state in the Offering Document (or any preliminary version thereof or information provided in addition thereto, to the extent not corrected in the Offering Document as delivered or any subsequently provided additional information consistent therewith) a material fact required to be stated in the Offering Document (or any preliminary version thereof or information provided in addition thereto, to the extent not corrected in the Offering Document as delivered or any subsequently provided additional information consistent therewith) or necessary to make the statements in the Offering Document (or any preliminary version thereof or information provided in addition thereto, to the extent not corrected in the Offering Document as delivered or any subsequently provided additional information consistent therewith), in the light of the circumstances under which they were made, not misleading; and provided, further, that this subparagraph (F) does not cover the Insurer Information, the Underwriters Information and the Mortgage Loan Information; and (ii) in the case of each of the Sellers, arising out of or relating to its breach of any of the representations, warranties or covenants contained herein or arising out of or relating to the transactions contemplated by the Operative Documents by reason of: (A) the misfeasance or malfeasance of, or gross negligence or theft committed by, it or any of its directors, officers, employees, agents, independent contractors or other representatives in connection with the Transaction or arising from or relating to any Operative Document; 26

(B) the occurrence under any of the other Operative Documents, of any "incipient default" or "event of default"; or (C) any (1) untrue statement or alleged untrue statement of any material fact contained in the Mortgage Loan Information, or the omission or the alleged omission to state therein a material fact required to be stated therein or necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading or (2) representation, warranty or covenant made by any of the Sellers in the Purchase Agreement, the P&S Agreement or any of the other Operative Documents, being or alleged to be untrue or incorrect. (b) The Certificate Insurer agrees to pay, and to protect, indemnify and save harmless, the Sellers, the Servicer, the Trustee and the Depositor, and their respective officers, directors, shareholders, employees, agents and each Person, if any, who controls any of them, within the meaning of either Section 15 of the Securities Act or Section 20 of the Securities Exchange Act from and against, any and all claims, losses, liabilities (including penalties), actions, suits, judgments, demands, damages, costs or expenses (including reasonable fees and expenses of attorneys, consultants and auditors and reasonable costs of investigations) of any nature arising out of or by

(B) the occurrence under any of the other Operative Documents, of any "incipient default" or "event of default"; or (C) any (1) untrue statement or alleged untrue statement of any material fact contained in the Mortgage Loan Information, or the omission or the alleged omission to state therein a material fact required to be stated therein or necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading or (2) representation, warranty or covenant made by any of the Sellers in the Purchase Agreement, the P&S Agreement or any of the other Operative Documents, being or alleged to be untrue or incorrect. (b) The Certificate Insurer agrees to pay, and to protect, indemnify and save harmless, the Sellers, the Servicer, the Trustee and the Depositor, and their respective officers, directors, shareholders, employees, agents and each Person, if any, who controls any of them, within the meaning of either Section 15 of the Securities Act or Section 20 of the Securities Exchange Act from and against, any and all claims, losses, liabilities (including penalties), actions, suits, judgments, demands, damages, costs or expenses (including reasonable fees and expenses of attorneys, consultants and auditors and reasonable costs of investigations) of any nature arising out of or by reason of (i) any untrue statement or alleged untrue statement of a material fact contained in the Insurer Information or any omission or. alleged omission to state in the Insurer Information a material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading, (ii) any failure of the Certificate Insurer to make a payment required to be made under the Policy or (iii) a breach of any of the representations and warranties of the Certificate Insurer contained in Section 2.04. (c) If any action or proceeding (including any governmental investigation) shall be brought or asserted against any Person (individually, an "Indemnified Party" and, collectively, the "Indemnified Parties") in respect of which the indemnity provided, in Section 3.04(a) or (b) may be sought from any party under Section 3.04(a), on the one hand, or the Certificate Insurer, on the other (each, an "Indemnifying Party") hereunder, each such Indemnified Party shall promptly notify the Indemnifying Party in writing, and the Indemnifying Party shall assume the defense thereof, including the employment of counsel reasonably satisfactory to the Indemnified Party and the payment of all expenses thereof. The omission so to notify the Indemnifying Party will not relieve it from any liability which it may have to any Indemnified Party except to the extent the Indemnifying Party is prejudiced thereby. The Indemnified Party shall have the right to employ separate counsel in any such action and to participate in the defense thereof at the expense of the Indemnified Party, but the fees and expenses of such separate counsel shall be at the expense of the Indemnifying Party if (i) the Indemnifying Party has agreed in writing to pay such fees and expenses, (ii) the Indemnifying Party shall have failed within a reasonable period of time to assume, the defense of such action or proceeding and employ counsel reasonably satisfactory to the Indemnified Party in any such action or proceeding or (iii) the named parties to any such action or proceeding (including any impleaded parties) include both the Indemnified Party and the Indemnifying Party, and the Indemnified Party shall have been advised by counsel that there may be one or more legal defenses available to it which are different from or additional to those available to the Indemnifying Party (in which case, if the Indemnified Party notifies the Indemnifying Party in writing that it 27

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

elects to employ separate counsel at the expense of the Indemnifying Party, the Indemnifying Party shall not have the right to assume the defense of such action or proceeding on behalf of such Indemnified Party, it being understood, however, that the Indemnifying Party shall not, in connection with any one such action or proceeding or separate but substantially similar or related actions or proceedings in the same jurisdiction arising out of the same general allegations or circumstances, be liable at any time for the reasonable fees and expenses of more than one separate firm of attorneys acting as general counsel and one separate firm of attorneys acting as local counsel for the Indemnified Parties, which firm or firms shall be designated in writing by the Indemnified Party and shall be reasonably satisfactory to the Indemnifying Party). The Indemnifying Party shall not be liable for any settlement of any such action or proceeding effected without its written consent, which consent shall not be unreasonably withheld, conditioned or delayed, but, if settled with its written consent, or if there is a final judgment for the plaintiff in any such action or proceeding with respect to which ,the Indemnifying Party shall have received notice in accordance with this subsection (c), the Indemnifying Party agrees to indemnify and hold the Indemnified Parties harmless from and against any loss or liability by reason of such settlement or judgment. Notwithstanding anything in this paragraph to the contrary, the consent of such Indemnified Party shall not be required if such settlement fully discharges, with prejudice against the plaintiff, the claim or action against such Indemnified Party. (d) To provide for just and equitable contribution if the indemnification provided by the Indemnifying Party is determined to be unavailable or insufficient to hold harmless any Indemnified Party (other than due to application of this Section), each Indemnifying Party shall contribute to the losses incurred by the Indemnified Parties on the basis of the relative fault of the Indemnifying Party, on the one hand, and the Indemnified Parties, on the other hand. Section 3.05. Payment Procedure. In the event of any payment by the Certificate Insurer, each other party hereto agrees to accept the voucher or other evidence of payment as prima facie evidence of the propriety thereof and the liability, if any, described in Section 3.03 therefor to the Certificate Insurer. All payments to be made to the Certificate Insurer under this Insurance Agreement shall be made to the Certificate Insurer in lawful currency of the United States of America in immediately available funds at the notice address for the Certificate Insurer as specified herein on the date when due or as the Certificate Insurer shall otherwise direct by written notice to the other parties hereto. In the event that the date of any payment to the Certificate Insurer or the expiration of any time period hereunder occurs on a day that is not a Business Day, then such payment or expiration of time period shall be made or occur on the next succeeding Business Day with the same force and effect as if such payment was made or time period expired on the scheduled date of payment or expiration date except as provided in Section 6.05. Payments to be made to the Certificate Insurer hereunder shall bear interest at the Late Payment Rate from and including the date when payable to but excluding the date when paid. Section 3.06. Subrogation. (a) The parties hereto acknowledge that, to the extent of any payment made by the Certificate Insurer pursuant to the Policy, the Certificate Insurer 28

shall be subrogated to the rights of each Class M Certificateholder to receive payments in respect of the Class M Certificates, all in accordance with the P&S Agreement and in accordance with the priorities set forth therein for reimbursement of the Certificate Insurer as provided herein and therein. The Depositor agrees to take, or cause to be taken, all actions deemed desirable by the Certificate Insurer to preserve, enforce, perfect or maintain the perfection in the Certificate Insurer's favor of such rights and of all equitable rights of subrogation. (b) Each of the parties hereto agrees to promptly and duly take, execute, acknowledge and deliver such further acts, documents, instruments and assurances as the Certificate Insurer may from time to time reasonably request to more effectively evidence any rights to assignment or subrogation under this Article III, and to protect and perfect all of the Certificate Insurer's other rights. Section 3.07. Assignment and Other Rights. (a) In consideration of the issuance of the Policy by the Certificate Insurer, in the case of any payment made by

shall be subrogated to the rights of each Class M Certificateholder to receive payments in respect of the Class M Certificates, all in accordance with the P&S Agreement and in accordance with the priorities set forth therein for reimbursement of the Certificate Insurer as provided herein and therein. The Depositor agrees to take, or cause to be taken, all actions deemed desirable by the Certificate Insurer to preserve, enforce, perfect or maintain the perfection in the Certificate Insurer's favor of such rights and of all equitable rights of subrogation. (b) Each of the parties hereto agrees to promptly and duly take, execute, acknowledge and deliver such further acts, documents, instruments and assurances as the Certificate Insurer may from time to time reasonably request to more effectively evidence any rights to assignment or subrogation under this Article III, and to protect and perfect all of the Certificate Insurer's other rights. Section 3.07. Assignment and Other Rights. (a) In consideration of the issuance of the Policy by the Certificate Insurer, in the case of any payment made by or on behalf of the Certificate Insurer under the Policy, in addition to and not by way of limitation of any of the rights and remedies of the Certificate Insurer hereunder, under the Policy or under the P&S Agreement with respect to such payment, each of the Depositor, the Sellers and the Servicer hereby acknowledges and consents to the assignment by the Trustee, on behalf of the Class M Certificateholders, to the Certificate Insurer in accordance with the terms of the relevant notice and certificate (in the case of any payment made by or on behalf of the Certificate Insurer under the Policy) the rights of the Class M Certificateholders with respect to the Class M Certificates to the extent of any such payment made on the Class M Certificates under the Policy. (b) The rights and remedies of the Certificate Insurer described in clause (a) above are in addition to, and not in limitation of, the rights of subrogation and other rights and remedies otherwise available to the Certificate Insurer in respect of payments under the Policy made by the Certificate Insurer. The Trustee shall take such action and deliver such instruments as may be reasonably requested or required by the Certificate Insurer to effectuate the purpose or provisions of this Section 3.07. ARTICLE IV FURTHER AGREEMENTS Section 4.01. Effective Date; Term of the Insurance Agreement. This Insurance Agreement shall take effect on the Closing Date and shall remain in effect until the later of such time as (a) the Certificate Insurer is no longer subject to a claim under the Policy and the Policy shall have been surrendered to the Certificate Insurer for cancellation and (b) all amounts payable to the Certificate Insurer by any party hereunder or from any other source hereunder or under any or the other Operative Documents, and all amounts payable under the Class M Certificates, have been indefeasibly paid in full; provided, that the provisions of Sections 3.02, 3.03 and 3.04 hereof shall survive any termination of this Insurance Agreement. Section 4.02. Further Assurances and Corrective Instruments. 29

(a) Except at such times as a default in payment under the Policy shall exist or shall have occurred, none of the parties hereto shall grant any waiver of rights under any of the Operative Documents to which it is a party without the prior written consent of the Certificate Insurer, which shall not be unreasonably withheld, conditioned or delayed and any such waiver without prior written consent of the Certificate Insurer shall be null and void and of no force or effect. (b) To the extent permitted by law, each party hereto agrees that it will promptly and from time to time execute, acknowledge and deliver, or cause to be executed, acknowledged and delivered, such supplements hereto and such further instruments as the Certificate Insurer may reasonably request and as may be required in the Certificate Insurer's judgment to effectuate the intention of or facilitate the performance of this Insurance Agreement. Section 4.03. Obligations Absolute.

(a) Except at such times as a default in payment under the Policy shall exist or shall have occurred, none of the parties hereto shall grant any waiver of rights under any of the Operative Documents to which it is a party without the prior written consent of the Certificate Insurer, which shall not be unreasonably withheld, conditioned or delayed and any such waiver without prior written consent of the Certificate Insurer shall be null and void and of no force or effect. (b) To the extent permitted by law, each party hereto agrees that it will promptly and from time to time execute, acknowledge and deliver, or cause to be executed, acknowledged and delivered, such supplements hereto and such further instruments as the Certificate Insurer may reasonably request and as may be required in the Certificate Insurer's judgment to effectuate the intention of or facilitate the performance of this Insurance Agreement. Section 4.03. Obligations Absolute. (a) The obligations of the parties hereto shall be absolute and unconditional and shall be paid or performed strictly in accordance with this Insurance Agreement under all circumstances irrespective of: (i) any lack of validity or enforceability of any of the Operative Documents or any amendment or other modification of, or waiver with respect to, any of the Operative Documents; (ii) any exchange or release of any other obligations hereunder or under any other Operative Document, or of any guarantee of or security for any obligations hereunder or thereunder; (iii) the existence of any claim, counterclaim, setoff, defense, reduction, abatement or other right that any Person may have at any time against the Certificate Insurer or any other Person, including with respect to the liability of any other Person for the payment of any such obligation; (iv) any document presented in connection with the Policy proving to be forged, fraudulent, invalid or insufficient in any respect or any statement therein being untrue or inaccurate in any respect; (v) any payment by the Certificate Insurer under the Policy against presentation of a certificate or other document that does not strictly comply with terms of the Policy; (vi) any failure of the Depositor or ABC Inc. to receive the proceeds from the sale of the Certificates; and (vii) the inaccuracy or alleged inaccuracy of any Servicer Remittance Report or any notice and certificate upon which any drawing under the Policy is based; (viii) the bankruptcy or insolvency of the Certificate Insurer or any other party or any default or alleged default of the Certificate Insurer under the Policy; 30

(ix) any nonapplication or misapplication of the proceeds of any drawing upon the Policy; and (x) any other circumstances, other than payment in full, that might otherwise constitute a defense available to, or discharge of, any party to any Operative Document. (b) The Sellers, the Servicer and the Depositor and any and all others who are now or may become liable for all or part of their respective obligations under this Insurance Agreement, agree to be bound by this Insurance Agreement or any other Operative Document and, to the extent permitted by applicable law, waive and renounce the right to assert as a defense to the performance of their respective obligations each of the following: (i) any and all redemption and exemption rights and the benefit of all valuation and appraisement privileges against the indebtedness and obligations evidenced by any Operative Document or by any extension or renewal thereof; (ii) diligence, presentment and demand for payment, notices of nonpayment and of dishonor, protest of dishonor and notice of protest; (iii) all notices in connection with the delivery and acceptance hereof and all other notices in connection with the performance, default or enforcement of any payment hereunder, except as required by the

(ix) any nonapplication or misapplication of the proceeds of any drawing upon the Policy; and (x) any other circumstances, other than payment in full, that might otherwise constitute a defense available to, or discharge of, any party to any Operative Document. (b) The Sellers, the Servicer and the Depositor and any and all others who are now or may become liable for all or part of their respective obligations under this Insurance Agreement, agree to be bound by this Insurance Agreement or any other Operative Document and, to the extent permitted by applicable law, waive and renounce the right to assert as a defense to the performance of their respective obligations each of the following: (i) any and all redemption and exemption rights and the benefit of all valuation and appraisement privileges against the indebtedness and obligations evidenced by any Operative Document or by any extension or renewal thereof; (ii) diligence, presentment and demand for payment, notices of nonpayment and of dishonor, protest of dishonor and notice of protest; (iii) all notices in connection with the delivery and acceptance hereof and all other notices in connection with the performance, default or enforcement of any payment hereunder, except as required by the Operative Documents; (iv) all rights of abatement, diminution, postponement or deduction, and to any defense other than payment, and to any right of setoff or recoupment arising out of any breach under any of the Operative Documents, by any party thereto or any beneficiary thereof, or out of any obligation at any time owing to any of them; and (v) any requirement that any Person exhaust any right, power or remedy or proceed against any other Person under this Insurance Agreement or any other Operative document, or against any other Person or any collateral under any other obligation to pay, guarantee or security arrangement. (c) The Sellers, the Servicer, the Depositor and any and all others who are now or may become liable for all or part of their respective obligations under this Insurance Agreement, to the extent permitted by law, agree to be bound by this Insurance Agreement and (i) agree that its liabilities hereunder shall, except as otherwise expressly provided herein, be absolute and unconditional and without regard to any setoff or counterclaim or the liability of any other Person for the payment thereof; (ii) agree that any consent, waiver or forbearance hereunder with respect to an event shall operate only for such event and not for any subsequent event; (iii) consent to any and all extensions of time that may be granted by the Certificate Insurer with respect to any payment hereunder or other provisions hereof and to the release of any security at any time given for any payment hereunder, or any part thereof, with or without substitution, and to the release of any Person or entity liable for any such payment; and (iv) consent to the addition of any and all other makers, endorsers, guarantors and other obligors for any payment hereunder, and to the acceptance of any and all other security for any payment hereunder, and agree that the addition of any such obligors or security shall not affect the liability of the parties hereto for any payment hereunder. (d) The obligations of ABC Inc. under Sections 3.03 and 3.04 shall be automatically restored and reinstated if and to the extent that for any reason any payment by or on behalf of any Seller is rescinded or must be otherwise restored by any Person, whether as a result of any proceedings in bankruptcy or reorganization or otherwise, and ABC Inc. agrees to indemnify each such Person on demand for all reasonable costs and expenses (including fees and 31

disbursements of counsel) incurred by such Person in connection with such rescission or restoration. (e) The obligations of ABC Inc. under Sections 3.03 and 3.04 are continuing obligations and shall apply to all related amounts and other obligations whenever arising. (f) Except as otherwise provided in this Insurance Agreement, nothing herein shall be construed as prohibiting any party hereto from pursuing any rights or remedies it may have against any Person in a separate legal proceeding. Section 4.04. Assignments; Reinsurance; Third-Party Rights. (a) This Insurance Agreement shall be a continuing obligation of the parties hereto and shall be binding upon and inure to the benefit of the parties hereto and their respective successors and permitted assigns. None of the Sellers, the Servicer, the Depositor or the Trustee may assign any of their respective rights under this Insurance Agreement or any other Operative Document, or delegate any of their respective duties hereunder or thereunder,

disbursements of counsel) incurred by such Person in connection with such rescission or restoration. (e) The obligations of ABC Inc. under Sections 3.03 and 3.04 are continuing obligations and shall apply to all related amounts and other obligations whenever arising. (f) Except as otherwise provided in this Insurance Agreement, nothing herein shall be construed as prohibiting any party hereto from pursuing any rights or remedies it may have against any Person in a separate legal proceeding. Section 4.04. Assignments; Reinsurance; Third-Party Rights. (a) This Insurance Agreement shall be a continuing obligation of the parties hereto and shall be binding upon and inure to the benefit of the parties hereto and their respective successors and permitted assigns. None of the Sellers, the Servicer, the Depositor or the Trustee may assign any of their respective rights under this Insurance Agreement or any other Operative Document, or delegate any of their respective duties hereunder or thereunder, without the prior written consent of the Certificate Insurer. Any assignments made in violation of this Insurance Agreement shall be null and void. (b) The Certificate Insurer shall have the right to give participations in its rights under this Insurance Agreement and to enter into contracts of reinsurance with respect to the Policy upon such terms and conditions as the Certificate Insurer may in its discretion determine; provided, however, that no such participation or reinsurance agreement or arrangement shall relieve the Certificate Insurer of any of its obligations hereunder or under the Policy. The Certificate Insurer shall be entitled to assign or pledge to any bank or other investor providing liquidity or credit with respect to the Transaction or the obligations of the Certificate Insurer in connection therewith any rights of the Certificate Insurer under the Operative Documents or with respect to any real or personal property or other interests pledged to the Certificate Insurer, or in which the Certificate Insurer has a security interest, in connection with the Transaction. (c) Except as provided herein with respect to participants and reinsurers, nothing in this Insurance Agreement shall confer any right, remedy or claim, express or implied, upon any Person, including, particularly, any Certificateholder or Certificate Owner, other than the Certificate Insurer against the Sellers, the Servicer or the Depositor, and all the terms, covenants, conditions, promises and agreements contained herein shall be for the sole and exclusive benefit of the parties hereto and their successors and permitted assigns. None of the Trustee or any Certificateholder or Certificate Owner shall have any right to payment from any Premiums paid or payable under the P&S Agreement pursuant hereto or from any amounts paid pursuant to Sections 3.02, 3.03 or 3.04. Section 4.05. Liability of the Certificate Insurer. Neither the Certificate Insurer nor any of its officers, directors or employees shall be liable or responsible for: (a) the use that may be made of the Policy by the Trustee or for any acts or omissions of the Trustee in connection therewith; or (b) the validity, sufficiency, accuracy or genuineness of documents delivered to 32

the Certificate Insurer in connection with any claim under the Policy, or of any signatures thereon, even if such documents or signatures should in fact prove to be in any or all respects invalid, insufficient, fraudulent or forged (unless the Certificate Insurer shall have actual knowledge thereof). In furtherance and not in limitation of the foregoing, the Certificate Insurer may accept documents that appear on their face to be in order, without responsibility for further investigation. Section 4.06. Annual Servicing Audit and Certification. The annual servicing audit required pursuant to Section 5.10 of the P&S Agreement shall be performed by an independent third party reasonably acceptable to the Certificate Insurer. Any one of the five major nationally recognized firms of independent public accountants is deemed to be acceptable. ARTICLE V DEFAULTS AND REMEDIES Section 5.01. Defaults. The occurrence of any of the following shall constitute an Event of Default hereunder:

the Certificate Insurer in connection with any claim under the Policy, or of any signatures thereon, even if such documents or signatures should in fact prove to be in any or all respects invalid, insufficient, fraudulent or forged (unless the Certificate Insurer shall have actual knowledge thereof). In furtherance and not in limitation of the foregoing, the Certificate Insurer may accept documents that appear on their face to be in order, without responsibility for further investigation. Section 4.06. Annual Servicing Audit and Certification. The annual servicing audit required pursuant to Section 5.10 of the P&S Agreement shall be performed by an independent third party reasonably acceptable to the Certificate Insurer. Any one of the five major nationally recognized firms of independent public accountants is deemed to be acceptable. ARTICLE V DEFAULTS AND REMEDIES Section 5.01. Defaults. The occurrence of any of the following shall constitute an Event of Default hereunder: (a) Any representation or warranty made by any party hereto (other than the Certificate Insurer) under this Insurance Agreement or any such party, a counterparty under the Interest Rate Hedge Agreement, or any other Person under any other Operative Document, or in any certificate furnished hereunder or thereunder by any such party or Person, shall prove to be untrue or incorrect in any material respect; provided, however, that if such party effectively cures any such defects in any representation or warranty with respect to the Mortgage Loans under any Operative Document or certificate or report furnished under any Operative Document, within the time period specified in the related document as the cure period thereof, such defect shall not in and of itself constitute an Event of Default; (b) (i) Any party hereto (other than the Certificate Insurer), a counterparty under any Interest Rate Hedge Agreement, or any other Person shall fail to pay when due any amount payable by it hereunder or under any other Operative Document or (ii) a legislative body has enacted any law that declares or a court of competent jurisdiction shall find or rule, or any Seller, the Servicer or the Depositor shall assert, that this Insurance Agreement or any other Operative Document is not valid and binding on any party hereto or thereto; (c) The occurrence and continuance of an "event of default," "Event of Default," or "Servicer Event of Default," or any similar occurrence, in each case under any Operative Document, or any termination of or loss of status or failure to qualify by any REMIC as such; (d) Any failure on the part of any party hereto (other than the Certificate Insurer), a counterparty under any Interest Rate Hedge Agreements, or any other Person to duly observe or perform in any material respect any other of the covenants or agreements on its part contained in this Insurance Agreement or in any other Operative Document which continues unremedied, with respect to this Insurance Agreement, for a period of 30 days after the date on which written notice of such failure requiring the same to be remedied shall have been given to it by the Certificate Insurer (with a copy to the Trustee) or, with respect to any other Operative Document, beyond any cure period provided therein 33

commencing on the date at which written notice of such failure requiring the same to be remedied shall have been given to it by the Certificate Insurer (with a copy to the Trustee); (e) A decree or order of a court or agency or supervisory authority having jurisdiction in the premises in an involuntary case under any present or future federal or state bankruptcy, insolvency or similar law or the appointment of a conservator or receiver or liquidator or other similar official in any bankruptcy, insolvency, readjustment of debt, marshaling of assets and liabilities or similar proceedings, or for the winding-up or liquidation of its affairs, shall have been entered against any Seller, the Servicer or the Depositor, a counterparty under any Interest Rate Hedge Agreements and such decree or order shall have remained in force undischarged or unstayed for a period of 60 consecutive days; (f) Any Seller, the Servicer or the Depositor, the counterparty under the Interest Rate Hedge Agreements shall

commencing on the date at which written notice of such failure requiring the same to be remedied shall have been given to it by the Certificate Insurer (with a copy to the Trustee); (e) A decree or order of a court or agency or supervisory authority having jurisdiction in the premises in an involuntary case under any present or future federal or state bankruptcy, insolvency or similar law or the appointment of a conservator or receiver or liquidator or other similar official in any bankruptcy, insolvency, readjustment of debt, marshaling of assets and liabilities or similar proceedings, or for the winding-up or liquidation of its affairs, shall have been entered against any Seller, the Servicer or the Depositor, a counterparty under any Interest Rate Hedge Agreements and such decree or order shall have remained in force undischarged or unstayed for a period of 60 consecutive days; (f) Any Seller, the Servicer or the Depositor, the counterparty under the Interest Rate Hedge Agreements shall consent to the appointment of a trustee, conservator or receiver or liquidator or other similar official in any bankruptcy, insolvency, readjustment of debt, marshaling of assets and liabilities or similar proceedings of or relating to it or of or relating to all or substantially all of its property; (g) Any Seller, the Servicer or the Depositor, a counterparty under any Interest Rate Hedge Agreement shall admit in writing its inability to pay its debts generally as they become due, file a petition to take advantage of or otherwise voluntarily commence a case or proceeding under any applicable bankruptcy, insolvency, reorganization or other similar statute, make an assignment for the benefit of its creditors or voluntarily suspend payment of its obligations; or (h) The Trust Fund or the Depositor shall become subject to registration as an investment company under the Investment Company Act, or for United States federal, state or local income and tax purposes, (i) the Trust Fund shall not qualify as one or more separate REMICs or (ii) the Class A Certificates, the Class M Certificates or the Class A-IO Certificates shall not be treated as one or more regular interests in a REMIC. Section 5.02. Remedies; No Remedy Exclusive. (a) Upon the occurrence of an Event of Default, the Certificate Insurer may exercise any one or more of the rights and remedies set forth below: (i) declare all indebtedness under this Insurance Agreement of every type or description then owed by any Seller, the Servicer or the Depositor to be immediately due and payable, and the same shall thereupon be immediately due and payable; (ii) exercise any rights and remedies under this Insurance Agreement or any other Operative Document in accordance with the terms hereof or thereof or direct the Trustee, the Depositor or the Servicer to exercise its rights and remedies in accordance with any Operative Document to which it is a party; 34

(iii) exercise any rights and remedies under the Purchase Agreement in accordance with the terms thereof or direct the Depositor to exercise such rights and remedies in accordance with the terms of the Purchase Agreement; or (iv) take whatever action at law or in equity as may appear necessary or desirable in its judgment to collect the amounts, if any, then due under this Insurance Agreement or any other Operative Document or to enforce performance and observance of any obligation, agreement or covenant on the part of any party (other than the Certificate Insurer) under this Insurance Agreement or under any other Operative Document. (b) Unless otherwise expressly provided, no remedy herein conferred or reserved is intended to be exclusive of any other available remedy, but each remedy shall be cumulative and shall be in addition to other remedies given under this Insurance Agreement or any other Operative Document or existing at law or in equity. No delay or omission to exercise any right or power accruing under this Insurance Agreement or any other Operative Document upon the happening of any event set forth in Section 5.01 shall impair any such right or power or shall be construed to be a waiver thereof, but any such right and power may be exercised from time to time and as

(iii) exercise any rights and remedies under the Purchase Agreement in accordance with the terms thereof or direct the Depositor to exercise such rights and remedies in accordance with the terms of the Purchase Agreement; or (iv) take whatever action at law or in equity as may appear necessary or desirable in its judgment to collect the amounts, if any, then due under this Insurance Agreement or any other Operative Document or to enforce performance and observance of any obligation, agreement or covenant on the part of any party (other than the Certificate Insurer) under this Insurance Agreement or under any other Operative Document. (b) Unless otherwise expressly provided, no remedy herein conferred or reserved is intended to be exclusive of any other available remedy, but each remedy shall be cumulative and shall be in addition to other remedies given under this Insurance Agreement or any other Operative Document or existing at law or in equity. No delay or omission to exercise any right or power accruing under this Insurance Agreement or any other Operative Document upon the happening of any event set forth in Section 5.01 shall impair any such right or power or shall be construed to be a waiver thereof, but any such right and power may be exercised from time to time and as often as may be deemed expedient. In order to entitle the Certificate Insurer to exercise any remedy reserved to the Certificate Insurer in this Article, it shall not be necessary to give any notice, other than such notice as may be required by this Article. Section 5.03. Waivers. (a) No failure by the Certificate Insurer to exercise, and no delay by the Certificate Insurer in exercising, any right hereunder shall operate as a waiver thereof. The exercise by the Certificate Insurer of any right hereunder shall not preclude the exercise of any other right, and the remedies provided herein to the Certificate Insurer are declared in every case to be cumulative and not exclusive of any remedies provided by law or equity. Any waiver, consent or forbearance hereunder with respect to an event or other occurrence shall operate only with respect to such event or occurrence and not with respect to any subsequent or other event or occurrence, whether or not similar. (b) The Certificate Insurer shall have the right, to be exercised in its complete discretion, to waive any Event of Default hereunder, by a writing setting forth the terms, conditions and extent of such waiver signed by the Certificate Insurer and delivered to the Depositor (with a copy to the Trustee). Unless such writing expressly provides to the contrary, any waiver so granted shall extend only to the specific event or occurrence which gave rise to the Event of Default so waived and not to any other similar event or occurrence which occurs subsequent to the date of such waiver. (c) If any proceeding has been commenced to enforce any right or remedy under this Insurance Agreement and such proceeding has been discontinued or abandoned for any reason, or has been determined adversely to the Certificate Insurer, then and in every such case the parties hereto shall, subject to any determination in such proceeding, be restored to their respective former positions hereunder and, thereafter, all rights and remedies of the Certificate Insurer shall continue as though no such proceeding had been instituted. 35

ARTICLE VI MISCELLANEOUS Section 6.01. Amendments, Etc. This Insurance Agreement may be amended, modified, supplemented or terminated only by written instrument or written instruments signed by the parties hereto. The Depositor agrees to provide a copy of any amendment to this Insurance Agreement promptly to the rating agencies maintaining a rating on the Certificates. No act or course of dealing shall be deemed to constitute an amendment, modification, supplement or termination hereof. Section 6.02. Notices. All demands, notices and other communications to be given hereunder shall be in writing (except as otherwise specifically provided herein) and shall be mailed by registered mail, reliable overnight courier or personally delivered and telecopied to the recipient as follows:

ARTICLE VI MISCELLANEOUS Section 6.01. Amendments, Etc. This Insurance Agreement may be amended, modified, supplemented or terminated only by written instrument or written instruments signed by the parties hereto. The Depositor agrees to provide a copy of any amendment to this Insurance Agreement promptly to the rating agencies maintaining a rating on the Certificates. No act or course of dealing shall be deemed to constitute an amendment, modification, supplement or termination hereof. Section 6.02. Notices. All demands, notices and other communications to be given hereunder shall be in writing (except as otherwise specifically provided herein) and shall be mailed by registered mail, reliable overnight courier or personally delivered and telecopied to the recipient as follows: (a) To the Certificate Insurer: Radian Asset Assurance Inc. 335 Madison Avenue New York, New York 10017
Chief Risk Officer and Chief Legal Officer Re: ABFS Mortgage Loan Trust, Series 2003-1, Class M Facsimile: (212) 682-5377 Confirmation: (212) 983-5859 Attention:

(in each case in which notice or other communication to the Certificate Insurer refers to an Event of Default, a claim on the Policy or with respect to which failure on the part of the Certificate Insurer to respond shall be deemed to constitute consent or acceptance, then a copy of such notice or other communication should also be sent to the attention of the general counsel of the Certificate Insurer and shall be marked to indicate "URGENT MATERIAL ENCLOSED.") (b) To any other party hereto, at the address for such party provided in the Operative Documents (other than this Insurance Agreement) to which it is a party. A party may specify an additional or different address or addresses by writing mailed or delivered to the other parties as aforesaid. All such notices and other communications shall be effective upon receipt. Section 6.03. Severability. In the event that any provision of this Insurance Agreement shall be held invalid or unenforceable by any court of competent jurisdiction, the parties hereto agree that such holding shall not invalidate or render unenforceable any other provision hereof. The parties hereto further agree that the holding by any court of competent jurisdiction that any remedy pursued by any party hereto is unavailable or unenforceable shall not affect in any way the ability of such party to pursue any other remedy available to it. 36

Section 6.04. GOVERNING LAW. THIS INSURANCE AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK (WITHOUT GIVING EFFECT TO THE CONFLICT OF LAWS PROVISIONS THEREOF). Section 6.05. Payments. (a) All payments to the Certificate Insurer hereunder shall be made in lawful currency of the United States and in immediately available funds, shall be made prior to 12:00 p.m. noon (New York City time) on the date such payment is due by wire transfer pursuant to wire transfer instructions and bank account information provided by the Certificate Insurer, or to such other office or account as the Certificate Insurer may direct. Payments received by the Certificate Insurer after 12:00 p.m. noon (New York City time) shall be deemed to have been received on the next succeeding Business Day, and such extension of time shall be included in computing interest, commissions or fees, if any, in connection with such payment.

Section 6.04. GOVERNING LAW. THIS INSURANCE AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK (WITHOUT GIVING EFFECT TO THE CONFLICT OF LAWS PROVISIONS THEREOF). Section 6.05. Payments. (a) All payments to the Certificate Insurer hereunder shall be made in lawful currency of the United States and in immediately available funds, shall be made prior to 12:00 p.m. noon (New York City time) on the date such payment is due by wire transfer pursuant to wire transfer instructions and bank account information provided by the Certificate Insurer, or to such other office or account as the Certificate Insurer may direct. Payments received by the Certificate Insurer after 12:00 p.m. noon (New York City time) shall be deemed to have been received on the next succeeding Business Day, and such extension of time shall be included in computing interest, commissions or fees, if any, in connection with such payment. (b) Whenever any payment under this Insurance Agreement stated to be due on a day which is not a Business Day is to be made on the next succeeding Business Day pursuant to Section 3.05, such extension of time shall in such cases be included in computing interest, commissions or fees, if any, in connection with such payment. (c) To the extent permitted by law, the Certificate Insurer shall be entitled to interest on all amounts owed to the Certificate Insurer under this Agreement in respect of interest from the date such amounts become due until paid in full (after as well as before judgment), at a rate of interest equal to the Late Payment Rate. Section 6.06. Consent to Jurisdiction. (a) The parties hereto hereby irrevocably submit to the non-exclusive jurisdiction of the United States District Court for the Southern District of New York and any court in the State of New York located in the Borough of Manhattan, and any appellate court from any thereof, in any action, suit or proceeding brought against it and to or in connection with this Insurance Agreement, the Policy or any of the other Operative Documents or the Transaction or for recognition or enforcement of any judgment, and the parties hereto hereby irrevocably and unconditionally agree that all claims in respect of any such action or proceeding may be heard or determined in such New York court or, to the extent permitted by law, in such federal court. The parties hereto agree that a final unappealable judgment in any such action, suit or proceeding shall be conclusive and may be enforced in other jurisdictions by suit on the judgment or in any other manner provided by law. To the extent permitted by applicable law, the parties hereto hereby waive and agree not to assert by way of motion, as a defense or otherwise in any such suit, action or proceeding, any claim that it is not personally subject to the jurisdiction of such courts, that the suit, action or proceeding is brought in an inconvenient forum, that the venue of the suit, action or proceeding is improper or that the related documents or the subject matter thereof may not be litigated in or by such courts. 37

(b) To the extent permitted by applicable law, the parties hereto shall not seek and hereby waive the right to any review of the judgment of any such court by any court of any other nation or jurisdiction which may be called upon to grant an enforcement of such judgment. (c) Service on the Depositor may be made by mailing or delivering copies of the summons and complaint and other process which may be served in any suit, action or proceeding to the Depositor addressed as follows: Bear Stearns Asset Backed Securities, Inc., 383 Madison Avenue, New York, New York 10179, Attention: General Counsel. Such address may be changed by the applicable party or parties by written notice to the other parties hereto. The provision of notice to change the address set forth in Section 6.02 shall constitute notice for purposes of the preceding sentence, unless such notice shall expressly state to the contrary. (d) Nothing contained in this Insurance Agreement shall limit or affect any party's right to serve process in any other manner permitted by law or to start legal proceedings relating to this Insurance Agreement, the Policy or any of the other Operative Documents against any other party or its properties in the courts of any jurisdiction. Section 6.07. Consent of the Certificate Insurer. In the event that the consent of the Certificate Insurer is required

(b) To the extent permitted by applicable law, the parties hereto shall not seek and hereby waive the right to any review of the judgment of any such court by any court of any other nation or jurisdiction which may be called upon to grant an enforcement of such judgment. (c) Service on the Depositor may be made by mailing or delivering copies of the summons and complaint and other process which may be served in any suit, action or proceeding to the Depositor addressed as follows: Bear Stearns Asset Backed Securities, Inc., 383 Madison Avenue, New York, New York 10179, Attention: General Counsel. Such address may be changed by the applicable party or parties by written notice to the other parties hereto. The provision of notice to change the address set forth in Section 6.02 shall constitute notice for purposes of the preceding sentence, unless such notice shall expressly state to the contrary. (d) Nothing contained in this Insurance Agreement shall limit or affect any party's right to serve process in any other manner permitted by law or to start legal proceedings relating to this Insurance Agreement, the Policy or any of the other Operative Documents against any other party or its properties in the courts of any jurisdiction. Section 6.07. Consent of the Certificate Insurer. In the event that the consent of the Certificate Insurer is required under this Insurance Agreement, the Policy or any of the other Operative Documents, the determination whether to grant or withhold such consent shall be made by the Certificate Insurer in its sole discretion without any implied duty towards any other Person, except as otherwise expressly provided therein, and such consent shall be effective only when and if given by the Certificate Insurer in writing. Section 6.08. Counterparts. This Insurance Agreement may be executed in counterparts by the parties hereto, and all such counterparts shall constitute one and the same instrument. Section 6.09. Headings. The headings of Articles and Sections and the Table of Contents contained in this Insurance Agreement are provided for convenience only. They form no part of this Insurance Agreement and shall not affect its construction or interpretation. Unless otherwise indicated, all references to Articles and Sections in this Insurance Agreement refer to the corresponding Articles and Sections of this Insurance Agreement. Section 6.10. Trial by Jury Waived. Each party hereby waives, to the fullest extent permitted by law, any right to a trial by jury in respect of any litigation arising directly or indirectly out of, under or in connection with this Insurance Agreement, the Policy or any of the other Operative Documents or any of the transactions contemplated thereunder. Each party hereto (A) certifies that no representative, agent or attorney of any party hereto has represented, expressly or otherwise, that it would not, in the event of litigation, seek to enforce the foregoing waiver and (B) acknowledges that it has been induced to enter into this Insurance Agreement, the Policy (in the case of the Certificate Insurer) and the other Operative Documents to which it is a party by, among other things, this waiver. Section 6.11. Limited Liability. No recourse under this Insurance Agreement, the Policy or any other Operative Document shall be had against, and no personal liability shall attach to, any officer, employee, director, 38

affiliate or shareholder of any party hereto, as such, by the enforcement of any assessment or by any legal or equitable proceeding, by virtue of any statute or otherwise in respect of any of the Operative Documents, it being expressly agreed and understood that this Insurance Agreement and each other Operative Document is solely a corporate obligation of each party thereto and hereto, and that any and all personal liability, either at common law or in equity, or by statute or constitution, of every such officer, employee, director, affiliate or shareholder for breaches of any party hereto of any obligations under any Operative Document is hereby expressly waived as a condition of and in consideration for the execution and delivery of this Insurance Agreement and the issuance of the Policy hereunder. Section 6.12. Entire Agreement. This Insurance Agreement, the Policy and the other Operative Documents set forth the entire agreement between the parties with respect to the subject matter hereof and thereof and supersede and replace any agreement or understanding that may have existed between the parties prior to the date hereof in respect of such subject matter.

affiliate or shareholder of any party hereto, as such, by the enforcement of any assessment or by any legal or equitable proceeding, by virtue of any statute or otherwise in respect of any of the Operative Documents, it being expressly agreed and understood that this Insurance Agreement and each other Operative Document is solely a corporate obligation of each party thereto and hereto, and that any and all personal liability, either at common law or in equity, or by statute or constitution, of every such officer, employee, director, affiliate or shareholder for breaches of any party hereto of any obligations under any Operative Document is hereby expressly waived as a condition of and in consideration for the execution and delivery of this Insurance Agreement and the issuance of the Policy hereunder. Section 6.12. Entire Agreement. This Insurance Agreement, the Policy and the other Operative Documents set forth the entire agreement between the parties with respect to the subject matter hereof and thereof and supersede and replace any agreement or understanding that may have existed between the parties prior to the date hereof in respect of such subject matter. Section 6.13. Joint and Several Liability. Each of the representations, warranties, covenants and other agreements made by any of the Sellers in this Insurance Agreement are made by such party for it and on its own behalf. However, such agreements and all other obligations and other duties of HomeAmerican Credit, Inc. d/b/a Upland Mortgage, American Business Mortgage Services, Inc. and ABFS 2003-1, Inc. (collectively, the "ABFS Entities"), separately or together with ABC Inc., under this Insurance Agreement shall be joint and several obligations and duties of the ABFS Entities and ABC Inc., irrespective of any allocation of proceeds, rights or obligations between them and of any other matter. Without limiting the generality of the foregoing, each representation, warranty, covenant or other agreement designated in this Insurance Agreement as a representation, warranty, covenant or other agreement of the ABFS Entities, separately or together with ABC Inc., shall be a representation, warranty, covenant or other agreement of ABC Inc., jointly and severally with the ABFS Entities. ABC Inc. shall not exercise any right of subrogation as against the ABFS Entities until one year and one day after the Class M Certificates are no longer Outstanding, the Class M Certificateholders and the Certificate Insurer have indefeasibly been paid in full all amounts owing to them under the Class M Certificates, this Insurance Agreement and all other Operative Documents, have been fully satisfied, discharged and otherwise terminated and the security interest Granted under the P&S Agreement with respect to the collateral in the Trust Fund has been released in accordance therewith. If, prior to such time, any amount is paid by the ABFS Entities to ABC Inc., or is otherwise received by ABC Inc. on account of any such right of subrogation, such amount shall be held by it in trust for and shall be promptly be paid by it to the Trustee. 39

IN WITNESS WHEREOF, the parties hereto have executed this Agreement, all as of the day and year first above mentioned. RADIAN ASSET ASSURANCE INC., as Certificate Insurer By: Myer R. Strauss Name: Myer R. Strauss Title: Vice President HOMEAMERICAN CREDIT, INC., d/b/a UPLAND MORTGAGE, as an Original Mortgage, as an Original Mortgage Loan Seller By: Jeffrey M. Ruben Name: Jeffrey M. Ruben Title: EVP AMERICAN BUSINESS MORTGAGE SERVICES, INC., as an Original Mortgage Loan By: Jeffrey M. Ruben

IN WITNESS WHEREOF, the parties hereto have executed this Agreement, all as of the day and year first above mentioned. RADIAN ASSET ASSURANCE INC., as Certificate Insurer By: Myer R. Strauss Name: Myer R. Strauss Title: Vice President HOMEAMERICAN CREDIT, INC., d/b/a UPLAND MORTGAGE, as an Original Mortgage, as an Original Mortgage Loan Seller By: Jeffrey M. Ruben Name: Jeffrey M. Ruben Title: EVP AMERICAN BUSINESS MORTGAGE SERVICES, INC., as an Original Mortgage Loan By: Jeffrey M. Ruben Name: Jeffrey M. Ruben Title: EVP AMERICAN BUSINESS CREDIT, INC., as an Original Mortgage Loan Seller and as Servicer By: Beverly Santilli Name: Beverly Santilli Title: President ABFS 2003-1, as Secondary Mortgage Loan Seller By: Jeffrey M. Ruben Name: Jeffrey M. Ruben Title: EVP 40

BEAR STEARNS ASSET BACKED SECURITIES, INC., as Depositor By: Jonathan Lieberman Name: Jonathan Lieberman Title: Senior Managing Director JPMORGAN CHASE BANK, not in its individual capacity but solely as Trustee, as Back-up Servicer and as Collateral Agent By: Joseph M. Costantino Name: Joseph M. Costantino Title: Trust Officer 41

BEAR STEARNS ASSET BACKED SECURITIES, INC., as Depositor By: Jonathan Lieberman Name: Jonathan Lieberman Title: Senior Managing Director JPMORGAN CHASE BANK, not in its individual capacity but solely as Trustee, as Back-up Servicer and as Collateral Agent By: Joseph M. Costantino Name: Joseph M. Costantino Title: Trust Officer 41

AMENDED AND RESTATED COMMITTED LINE OF CREDIT NOTE $5,000,000 June 2, 2003 FOR VALUE RECEIVED, AMERICAN BUSINESS FINANCIAL SERVICES, INC. (the "Borrower"), with an address at 111 Presidential Boulevard, Bala Cynwyd, PA 19004, promises to pay to the order of FIRSTRUST SAVINGS BANK (the "Bank"), in lawful money of the United States of America in immediately available funds at its offices located at 4612 Street Road, Trevose, PA 19053, or at such other location as the Bank may designate from time to time, the principal sum of FIVE MILLION DOLLARS ($5,000,000) or such lesser amount as may be advanced to or for the benefit of the Borrower hereunder, together with interest accruing on the outstanding principal balance from the date hereof, as provided below: 1. Rate of Interest. Amounts outstanding under this Note will accrue interest at a per annum rate (the "Note Rate") equal to the LIBOR Rate (as hereinafter defined) plus the Applicable Margin, calculated on the basis of a year of 360 days for the actual number of days elapsed. As used herein: (i) "Applicable Margin" means: (A) 3.25 percentage points with respect to loan advances supported by the X Note and the R Note, and (B) 2.50 percentage points with respect to loan advances supported by the B Note, as each of those terms are defined in the Amendment No. 2 referred to in Section 7 hereof, provided that the interest rate hereon shall in no event be less than (A) 5.25% with respect to loan advances supported by the X Note and the R Note and (B) 4.50% with respect to loan advances supported by the B Note. (ii) "LIBOR Rate" means, for each calendar month on and after the date hereof and with respect to the principal outstanding hereunder during such calendar month, the interest rate per annum determined by the Bank by dividing (the resulting quotient rounded upwards, if necessary, to the nearest 1/100th of 1%) (a) the rate of interest determined by the Bank in accordance with its usual procedures (which determination shall be conclusive absent manifest error) to be the average of the one (1) month London inter-bank offered rates for U.S. Dollars quoted by the British Bankers' Association, or appropriate successor, as set forth on Dow Jones Markets Service (formerly known as Telerate) display page 3750 (or such other display page on the Dow Jones Markets Service system as may replace display page 3750), or if British Bankers' Association or its successor ceases to provide such quote, a comparable replacement rate determined by the Bank (which determination shall be conclusive absent manifest error), on the first day of such month by (b) a number equal to 1.00 minus the LIBOR Reserve Percentage; (iii) "Business Day" means a day on which commercial banks settle payments in U.S. dollars in New York City and London other than a Saturday or Sunday or a legal holiday on which commercial banks are authorized or required to be closed for business in New York, New York; and (iv) "LIBOR Reserve Percentage" shall mean the maximum effective percentage in effect on any day as prescribed by the Board of Governors of the Federal Reserve System (or any successor) for determining the

AMENDED AND RESTATED COMMITTED LINE OF CREDIT NOTE $5,000,000 June 2, 2003 FOR VALUE RECEIVED, AMERICAN BUSINESS FINANCIAL SERVICES, INC. (the "Borrower"), with an address at 111 Presidential Boulevard, Bala Cynwyd, PA 19004, promises to pay to the order of FIRSTRUST SAVINGS BANK (the "Bank"), in lawful money of the United States of America in immediately available funds at its offices located at 4612 Street Road, Trevose, PA 19053, or at such other location as the Bank may designate from time to time, the principal sum of FIVE MILLION DOLLARS ($5,000,000) or such lesser amount as may be advanced to or for the benefit of the Borrower hereunder, together with interest accruing on the outstanding principal balance from the date hereof, as provided below: 1. Rate of Interest. Amounts outstanding under this Note will accrue interest at a per annum rate (the "Note Rate") equal to the LIBOR Rate (as hereinafter defined) plus the Applicable Margin, calculated on the basis of a year of 360 days for the actual number of days elapsed. As used herein: (i) "Applicable Margin" means: (A) 3.25 percentage points with respect to loan advances supported by the X Note and the R Note, and (B) 2.50 percentage points with respect to loan advances supported by the B Note, as each of those terms are defined in the Amendment No. 2 referred to in Section 7 hereof, provided that the interest rate hereon shall in no event be less than (A) 5.25% with respect to loan advances supported by the X Note and the R Note and (B) 4.50% with respect to loan advances supported by the B Note. (ii) "LIBOR Rate" means, for each calendar month on and after the date hereof and with respect to the principal outstanding hereunder during such calendar month, the interest rate per annum determined by the Bank by dividing (the resulting quotient rounded upwards, if necessary, to the nearest 1/100th of 1%) (a) the rate of interest determined by the Bank in accordance with its usual procedures (which determination shall be conclusive absent manifest error) to be the average of the one (1) month London inter-bank offered rates for U.S. Dollars quoted by the British Bankers' Association, or appropriate successor, as set forth on Dow Jones Markets Service (formerly known as Telerate) display page 3750 (or such other display page on the Dow Jones Markets Service system as may replace display page 3750), or if British Bankers' Association or its successor ceases to provide such quote, a comparable replacement rate determined by the Bank (which determination shall be conclusive absent manifest error), on the first day of such month by (b) a number equal to 1.00 minus the LIBOR Reserve Percentage; (iii) "Business Day" means a day on which commercial banks settle payments in U.S. dollars in New York City and London other than a Saturday or Sunday or a legal holiday on which commercial banks are authorized or required to be closed for business in New York, New York; and (iv) "LIBOR Reserve Percentage" shall mean the maximum effective percentage in effect on any day as prescribed by the Board of Governors of the Federal Reserve System (or any successor) for determining the reserve requirements (including, without limitation, supplemental, marginal and emergency reserve requirements) with respect to eurocurrency funding (currently referred to as "Eurocurrency liabilities").

Upon maturity, whether by acceleration, demand or otherwise, and at the Bank's option upon the occurrence of any Event of Default (as hereinafter defined) and during the continuance thereof, this Note shall bear interest at a rate per which shall be 2.5 percentage points in excess of the interest rate in effect from time to time under this Note but not more than the maximum rate allowed by law (the "Default Rate"). The Default Rate shall continue to apply whether or not judgment shall be entered on this Note. The Default Rate is imposed as liquidated damages for the purpose of defraying the Bank's expenses incident to the handling of delinquent payments, but is in addition to, and not in lieu of, the Bank's exercise of any rights and remedies hereunder, under other loan documents or under applicable law, and any fees and expenses of any agents or attorneys which the Bank may employ. In addition, the Default Rate reflects the increased credit risk to the Bank of carrying a loan that is in default. The Borrower agrees that the Default Rate is a reasonable forecast of just compensation for anticipated and actual harm incurred by the Bank, and that the actual harm incurred by the Bank cannot be estimated with

Upon maturity, whether by acceleration, demand or otherwise, and at the Bank's option upon the occurrence of any Event of Default (as hereinafter defined) and during the continuance thereof, this Note shall bear interest at a rate per which shall be 2.5 percentage points in excess of the interest rate in effect from time to time under this Note but not more than the maximum rate allowed by law (the "Default Rate"). The Default Rate shall continue to apply whether or not judgment shall be entered on this Note. The Default Rate is imposed as liquidated damages for the purpose of defraying the Bank's expenses incident to the handling of delinquent payments, but is in addition to, and not in lieu of, the Bank's exercise of any rights and remedies hereunder, under other loan documents or under applicable law, and any fees and expenses of any agents or attorneys which the Bank may employ. In addition, the Default Rate reflects the increased credit risk to the Bank of carrying a loan that is in default. The Borrower agrees that the Default Rate is a reasonable forecast of just compensation for anticipated and actual harm incurred by the Bank, and that the actual harm incurred by the Bank cannot be estimated with certainty and without difficulty. If the Bank determines (which determination shall be final and conclusive) that, by reason of circumstances affecting the eurodollar market generally, deposits in dollars (in the applicable amounts) are not being offered to banks in the eurodollar market for the selected term, or adequate means do not exist for ascertaining LIBOR, then the Bank shall give notice thereof to the Borrower. Thereafter, until the Bank notifies the Borrower that the circumstances giving rise to such suspension no longer exist, (a) the availability of LIBOR shall be suspended, and (b) the interest rate for all amounts outstanding under this Note shall be immediately converted to a rate of interest per annum equal to the Bank's variable prime rate ("Prime Rate") as in effect from time to time at Bank as its prime rate, which rate is not necessarily the best or lowest rate which Bank makes available to its commercial customers. In addition, if, after the date of this Note, the Bank shall determine (which determination shall be final and conclusive) that any enactment, promulgation or adoption of or any change in any applicable law, rule or regulation, or any change in the interpretation or administration thereof by a governmental authority, central bank or comparable agency charged with the interpretation or administration thereof, or compliance by the Bank with any guideline, request or directive (whether or not having the force of law) of any such authority, central bank or comparable agency shall make it unlawful or impossible for the Bank to make or maintain or fund loans bearing interest based on LIBOR, the Bank shall notify the Borrower in writing. Ten Business Days after receipt of such notice, until the Bank notifies the Borrower that the circumstances giving rise to such determination no longer apply, (a) the availability of LIBOR shall be suspended, and (b) the interest rate on all amounts outstanding under this Note shall be converted to the Prime Rate either (i) as of the first day of the immediately preceding month if the Bank may lawfully continue to maintain amounts outstanding hereunder to such day at a rate of interest based on LIBOR, or (ii) immediately if the Bank may not lawfully continue to maintain amounts outstanding hereunder at a rate of interest based on LIBOR. -2-

2. Advances. The Borrower may borrow, repay and reborrow hereunder until the Expiration Date, subject to the terms and conditions of this Note and the Loan Documents (as defined herein). The "Expiration Date" shall mean January 14, 2004, or such later date as may be designated by the Bank by written notice from the Bank to the Borrower. The Borrower acknowledges and agrees that in no event will the Bank be under any obligation to extend or renew the Facility or this Note beyond the Expiration Date. In no event shall the aggregate unpaid principal amount of advances under this Note exceed the Facility Limit as set forth in the Loan Agreement referred to in Section 7 hereof. 3. Advance Procedures. A request for advance made by telephone or electronically must be promptly confirmed in writing by such method as the Bank may reasonably require. The Borrower authorizes the Bank to accept telephonic requests for advances, and the Bank shall be entitled to rely upon the authority of any person providing such instructions. The Borrower hereby indemnifies and holds the Bank harmless from and against any and all damages, losses, liabilities, costs and expenses (including reasonable attorneys' fees and expenses) which may arise or be created by the acceptance of such telephone requests or making such advances. The Bank will enter on its books and records, which entry when made will be presumed correct, the date and amount of each advance, as well as the date and amount of each payment made by the Borrower. 4. Payment Terms. Accrued interest will be due and payable on the first day of each month, beginning with the

2. Advances. The Borrower may borrow, repay and reborrow hereunder until the Expiration Date, subject to the terms and conditions of this Note and the Loan Documents (as defined herein). The "Expiration Date" shall mean January 14, 2004, or such later date as may be designated by the Bank by written notice from the Bank to the Borrower. The Borrower acknowledges and agrees that in no event will the Bank be under any obligation to extend or renew the Facility or this Note beyond the Expiration Date. In no event shall the aggregate unpaid principal amount of advances under this Note exceed the Facility Limit as set forth in the Loan Agreement referred to in Section 7 hereof. 3. Advance Procedures. A request for advance made by telephone or electronically must be promptly confirmed in writing by such method as the Bank may reasonably require. The Borrower authorizes the Bank to accept telephonic requests for advances, and the Bank shall be entitled to rely upon the authority of any person providing such instructions. The Borrower hereby indemnifies and holds the Bank harmless from and against any and all damages, losses, liabilities, costs and expenses (including reasonable attorneys' fees and expenses) which may arise or be created by the acceptance of such telephone requests or making such advances. The Bank will enter on its books and records, which entry when made will be presumed correct, the date and amount of each advance, as well as the date and amount of each payment made by the Borrower. 4. Payment Terms. Accrued interest will be due and payable on the first day of each month, beginning with the payment due on June 1, 2003. The outstanding principal balance and any accrued but unpaid interest shall be due and payable on the Expiration Date. If any payment under this Note shall become due on a Saturday, Sunday or public holiday under the laws of the State where the Bank's office indicated above is located, such payment shall be made on the next succeeding business day and such extension of time shall be included in computing interest in connection with such payment. Payments received will be applied to charges, fees and expenses (including reasonable attorneys' fees), accrued interest and principal in any order the Bank may choose, in its sole discretion. 5. Late Payments. If the Borrower fails to make any payment of principal, interest or other amount coming due pursuant to the provisions of this Note within 15 calendar days of the date due and payable, the Borrower also shall pay to the Bank a late charge equal to the lesser of two percent (2%) of the amount of such payment or $100.00 (the "Late Charge"). Such 15 day period shall not be construed in any way to extend the due date of any such payment. 6. Prepayment. The indebtedness evidenced by this Note may be prepaid in whole or in part at any time without penalty or notice. 7. Other Loan Documents. This Note is issued in connection with a loan agreement between the Borrower and the Bank dated January 18, 2002 (as amended from time to time, including by Amendment No. 2 of even date herewith, being herein called the "Loan Agreement"), and the other agreements and documents executed in connection therewith or referred to therein, the terms of which are incorporated herein by reference (as amended, modified or renewed from time to time, collectively the "Loan Documents"), and is secured by the property described in the Loan Documents (if any) and by such other collateral as previously may have been or may in the future be granted to the Bank to secure this Note. -3-

8. Events of Default. The occurrence of any of the following events will be deemed to be an "Event of Default" under this Note: (i) the nonpayment of any principal, interest or other indebtedness under this Note within two (2) Business Days when due; (ii) the occurrence of any event of default or default and the lapse of any notice or cure period under any Loan Document or any other debt, liability or obligation to the Bank of any Obligor; (iii) the filing by or against any Obligor of any proceeding in bankruptcy, receivership, insolvency, reorganization, liquidation, conservatorship or similar proceeding (and, in the case of any such proceeding instituted against any Obligor, such proceeding is not dismissed or stayed within 60 days of the commencement thereof, provided that the Bank shall not be obligated to advance additional funds during such period); (iv) any assignment by any Obligor for the benefit of creditors, or any levy, garnishment, attachment or similar proceeding is instituted against any property of any Obligor held by or deposited with the Bank; (v) a default with respect to any other indebtedness of any Obligor for borrowed money in excess of $1,000,000 in the aggregate, if the effect of such

8. Events of Default. The occurrence of any of the following events will be deemed to be an "Event of Default" under this Note: (i) the nonpayment of any principal, interest or other indebtedness under this Note within two (2) Business Days when due; (ii) the occurrence of any event of default or default and the lapse of any notice or cure period under any Loan Document or any other debt, liability or obligation to the Bank of any Obligor; (iii) the filing by or against any Obligor of any proceeding in bankruptcy, receivership, insolvency, reorganization, liquidation, conservatorship or similar proceeding (and, in the case of any such proceeding instituted against any Obligor, such proceeding is not dismissed or stayed within 60 days of the commencement thereof, provided that the Bank shall not be obligated to advance additional funds during such period); (iv) any assignment by any Obligor for the benefit of creditors, or any levy, garnishment, attachment or similar proceeding is instituted against any property of any Obligor held by or deposited with the Bank; (v) a default with respect to any other indebtedness of any Obligor for borrowed money in excess of $1,000,000 in the aggregate, if the effect of such default is to cause or permit the acceleration of such debt; (vi) the commencement of any foreclosure or forfeiture proceeding, execution or attachment against any collateral securing the obligations of any Obligor to the Bank; (vii) the entry of a final judgment or judgements in excess of $1,000,000 in the aggregate against any Obligor and the failure of such Obligor to discharge the judgment within ten days of the entry thereof; (viii) [intentionally omitted]; (ix) any material adverse change in any Obligor's business, assets, operations, financial condition or results of operations; (x) any Obligor ceases doing business as a going concern; (xi) the revocation or attempted revocation, in whole or in part, of any guarantee by any Guarantor; (xii) the death, incarceration, indictment or legal incompetency of any individual Obligor or, if any Obligor is a partnership or limited liability company, the death, incarceration, indictment or legal incompetency of any individual general partner or member; (xiii) any representation or warranty made by any Obligor to the Bank in any Loan Document, or any other documents now or in the future evidencing or securing the obligations of any Obligor to the Bank, is false, erroneous or misleading in any material respect; or (xiv) any Obligor's failure to observe or perform any covenant or other agreement with the Bank contained in any Loan Document or any other documents now or in the future evidencing or securing the obligations of any Obligor to the Bank. As used herein, the term "Obligor" means any Borrower and any Guarantor, and the term "Guarantor" means any guarantor of the Borrower's obligations to the Bank existing on the date of this Note or arising in the future. Upon the occurrence of an Event of Default: (a) the Bank shall be under no further obligation to make advances hereunder; (b) if an Event of Default specified in clause (iii) or (iv) above shall occur, the outstanding principal balance and accrued interest hereunder together with any additional amounts payable hereunder shall be immediately due and payable without demand or notice of any kind; (c) if any other Event of Default shall occur, the outstanding principal balance and accrued interest hereunder together with any additional amounts payable hereunder, at the Bank's option and without demand or notice of any kind, may be accelerated and become immediately due and payable; (d) at the Bank's option, this Note will bear interest at the Default Rate from the date of the occurrence of the Event of Default; and (e) the Bank may exercise from time to time any of the rights and remedies available under the Loan Documents or under applicable law. -4-

9. Right of Setoff. In addition to all liens upon and rights of setoff against the Borrower's money, securities or other property given to the Bank by law, the Bank shall have, with respect to the Borrower's obligations to the Bank under this Note and to the extent permitted by law, a contractual possessory security interest in and a contractual right of setoff against, and the Borrower hereby assigns, conveys, delivers, pledges and transfers to the Bank all of the Borrower's right, title and interest in and to, all of the Borrower's deposits, moneys, securities and other property now or hereafter in the possession of or on deposit with, or in transit to, the Bank, whether held in a general or special account or deposit, whether held jointly with someone else, or whether held for safekeeping or otherwise, excluding, however, all IRA, Keogh, and trust accounts. Every such security interest and right of setoff may be exercised without demand upon or notice to the Borrower. Every such right of setoff shall be deemed to have been exercised immediately upon the occurrence of an Event of Default hereunder without any action of the Bank, although the Bank may enter such setoff on its books and records at a later time. 10. Miscellaneous. All notices, demands, requests, consents, approvals and other communications required or permitted hereunder must be in writing (except as may be agreed otherwise above with respect to borrowing requests) and will be effective upon receipt. Such notices and other communications may be hand-delivered, sent by facsimile transmission with confirmation of delivery and a copy sent by first-class mail, or sent by nationally recognized overnight courier service, to the addresses for the Bank and the Borrower set forth above or to such

9. Right of Setoff. In addition to all liens upon and rights of setoff against the Borrower's money, securities or other property given to the Bank by law, the Bank shall have, with respect to the Borrower's obligations to the Bank under this Note and to the extent permitted by law, a contractual possessory security interest in and a contractual right of setoff against, and the Borrower hereby assigns, conveys, delivers, pledges and transfers to the Bank all of the Borrower's right, title and interest in and to, all of the Borrower's deposits, moneys, securities and other property now or hereafter in the possession of or on deposit with, or in transit to, the Bank, whether held in a general or special account or deposit, whether held jointly with someone else, or whether held for safekeeping or otherwise, excluding, however, all IRA, Keogh, and trust accounts. Every such security interest and right of setoff may be exercised without demand upon or notice to the Borrower. Every such right of setoff shall be deemed to have been exercised immediately upon the occurrence of an Event of Default hereunder without any action of the Bank, although the Bank may enter such setoff on its books and records at a later time. 10. Miscellaneous. All notices, demands, requests, consents, approvals and other communications required or permitted hereunder must be in writing (except as may be agreed otherwise above with respect to borrowing requests) and will be effective upon receipt. Such notices and other communications may be hand-delivered, sent by facsimile transmission with confirmation of delivery and a copy sent by first-class mail, or sent by nationally recognized overnight courier service, to the addresses for the Bank and the Borrower set forth above or to such other address as either may give to the other in writing for such purpose. No delay or omission on the Bank's part to exercise any right or power arising hereunder will impair any such right or power or be considered a waiver of any such right or power, nor will the Bank's action or inaction impair any such right or power. No modification, amendment or waiver of any provision of this Note nor consent to any departure by the Borrower therefrom will be effective unless made in a writing signed by the Bank. The Borrower agrees to pay on demand, to the extent permitted by law, all costs and expenses incurred by the Bank in the enforcement of its rights in this Note and in any security therefor, including without limitation reasonable fees and expenses of the Bank's counsel. If any provision of this Note is found to be invalid by a court, all the other provisions of this Note will remain in full force and effect. The Borrower and all other Borrowers and indorsers of this Note hereby forever waive presentment, protest, notice of dishonor and notice of non-payment. The Borrower also waives all defenses based on suretyship or impairment of collateral. If this Note is executed by more than one Borrower, the obligations of such persons or entities hereunder will be joint and several. This Note shall bind the Borrower and its heirs, executors, administrators, successors and assigns, and the benefits hereof shall inure to the benefit of the Bank and its successors and assigns; provided, however, that the Borrower may not assign this Note in whole or in part without the Bank's written consent and the Bank at any time may assign this Note in whole or in part except that Bank may not assign it to any entity or person which it knows or reasonably should know is a competitor or Borrower. -5-

This Note has been delivered to and accepted by the Bank and will be deemed to be made in the State where the Bank's office indicated above is located. THIS NOTE WILL BE INTERPRETED AND THE RIGHTS AND LIABILITIES OF THE BANK AND THE BORROWER DETERMINED IN ACCORDANCE WITH THE LAWS OF THE STATE WHERE THE BANK'S OFFICE INDICATED ABOVE IS LOCATED, EXCLUDING ITS CONFLICT OF LAWS RULES. The Borrower hereby irrevocably consents to the exclusive jurisdiction of any state or federal court in the county or judicial district where the Bank's office indicated above is located; provided that nothing contained in this Note will prevent the Bank from bringing any action, enforcing any award or judgment or exercising any rights against the Borrower individually, against any security or against any property of the Borrower within any other county, state or other foreign or domestic jurisdiction. The Borrower acknowledges and agrees that the venue provided above is the most convenient forum for both the Bank and the Borrower. The Borrower waives any objection to venue and any objection based on a more convenient forum in any action instituted under this Note. 11. WAIVER OF JURY TRIAL. THE BORROWER IRREVOCABLY WAIVES ANY AND ALL RIGHTS THE BORROWER MAY HAVE TO A TRIAL BY JURY IN ANY ACTION, PROCEEDING OR CLAIM OF ANY NATURE RELATING TO THIS NOTE, ANY DOCUMENTS EXECUTED IN CONNECTION WITH THIS NOTE OR ANY TRANSACTION CONTEMPLATED IN ANY OF SUCH DOCUMENTS. THE BORROWER ACKNOWLEDGES THAT THE FOREGOING WAIVER IS KNOWING AND VOLUNTARY.

This Note has been delivered to and accepted by the Bank and will be deemed to be made in the State where the Bank's office indicated above is located. THIS NOTE WILL BE INTERPRETED AND THE RIGHTS AND LIABILITIES OF THE BANK AND THE BORROWER DETERMINED IN ACCORDANCE WITH THE LAWS OF THE STATE WHERE THE BANK'S OFFICE INDICATED ABOVE IS LOCATED, EXCLUDING ITS CONFLICT OF LAWS RULES. The Borrower hereby irrevocably consents to the exclusive jurisdiction of any state or federal court in the county or judicial district where the Bank's office indicated above is located; provided that nothing contained in this Note will prevent the Bank from bringing any action, enforcing any award or judgment or exercising any rights against the Borrower individually, against any security or against any property of the Borrower within any other county, state or other foreign or domestic jurisdiction. The Borrower acknowledges and agrees that the venue provided above is the most convenient forum for both the Bank and the Borrower. The Borrower waives any objection to venue and any objection based on a more convenient forum in any action instituted under this Note. 11. WAIVER OF JURY TRIAL. THE BORROWER IRREVOCABLY WAIVES ANY AND ALL RIGHTS THE BORROWER MAY HAVE TO A TRIAL BY JURY IN ANY ACTION, PROCEEDING OR CLAIM OF ANY NATURE RELATING TO THIS NOTE, ANY DOCUMENTS EXECUTED IN CONNECTION WITH THIS NOTE OR ANY TRANSACTION CONTEMPLATED IN ANY OF SUCH DOCUMENTS. THE BORROWER ACKNOWLEDGES THAT THE FOREGOING WAIVER IS KNOWING AND VOLUNTARY. The Borrower acknowledges that it has read and understood all the provisions of this Note, including the waiver of jury trial, and has been advised by counsel as necessary or appropriate. WITNESS the due execution hereof as a document under seal, as of the date first written above, with the intent to be legally bound hereby.
WITNESS / ATTEST: AMERICAN BUSINESS FINANCIAL SERVICES, INC.

____________________________________ Print Name:___________________________ Title:________________________________

By:_________________________________ (SEAL) Print Name:_________________________ Title:______________________________

-6-

Exhibit 10.103 AMENDMENT NUMBER ONE TO THE MASTER REPURCHASE AGREEMENT Dated as of November 13, 2002 Reference is made to the Master Repurchase Agreement dated as of November 16, 2001 (the "Master Repurchase Agreement") between Credit Suisse First Boston Mortgage Capital LLC (the "Buyer") and ABFS REPO 2001, Inc. (the "Seller"). Capitalized terms used herein but not defined herein shall have the meanings ascribed thereto in the Master Repurchase Agreement. Section 1. Amendment of the Master Repurchase Agreement. As of November 13, 2002, the Master Repurchase Agreement is hereby amended as follows: (a) Section 18(q) is hereby deleted in its entirety and replaced with the following: As of the end of any fiscal quarter, ABFS on a consolidated basis fails to maintain at all times a minimum Consolidated Stockholders' Equity in excess of the sum of (1) $50,000,000, plus (2) the aggregate amount equal to 50% of the aggregate net cash proceeds received by ABFS or any of its subsidiaries from the issuance of capital stock after June 30, 2002, plus (3) for each fiscal quarter ending after June 30, 2002, the aggregate

Exhibit 10.103 AMENDMENT NUMBER ONE TO THE MASTER REPURCHASE AGREEMENT Dated as of November 13, 2002 Reference is made to the Master Repurchase Agreement dated as of November 16, 2001 (the "Master Repurchase Agreement") between Credit Suisse First Boston Mortgage Capital LLC (the "Buyer") and ABFS REPO 2001, Inc. (the "Seller"). Capitalized terms used herein but not defined herein shall have the meanings ascribed thereto in the Master Repurchase Agreement. Section 1. Amendment of the Master Repurchase Agreement. As of November 13, 2002, the Master Repurchase Agreement is hereby amended as follows: (a) Section 18(q) is hereby deleted in its entirety and replaced with the following: As of the end of any fiscal quarter, ABFS on a consolidated basis fails to maintain at all times a minimum Consolidated Stockholders' Equity in excess of the sum of (1) $50,000,000, plus (2) the aggregate amount equal to 50% of the aggregate net cash proceeds received by ABFS or any of its subsidiaries from the issuance of capital stock after June 30, 2002, plus (3) for each fiscal quarter ending after June 30, 2002, the aggregate amount equal to 60% of positive consolidated Net Income for such fiscal quarters, provided that if ABFS should incur a net loss for any fiscal quarter, the Consolidated Stockholders' Equity requirement hereunder will not be reduced from the amount required at the previous fiscal quarter end; and (b) Section 18(r) is hereby deleted in its entirety and replaced with the following: The ratio of ABFS's Total Liabilities to Consolidated Stockholders' Equity is greater than 16:1 as of the end of any fiscal quarter. ABFS shall fail to maintain at the end of any fiscal quarter at least $225,000,000 in Subordinated Debt with maturities of at least one year or greater and at least $350,000,000 of total Subordinated Debt. (c) Section 27 is hereby amended by deleting the reference to "November 14, 2002" and replacing it with "November 13, 2003". Section 2. Reference to and Effect on the Master Repurchase Agreement.

2.1 Upon the effectiveness of this Amendment Number One, each reference in the Master Repurchase Agreement to "this Agreement," "hereunder," "hereof," "herein," "hereby" or words of like import shall mean and be a reference to the Master Repurchase Agreement as amended hereby, and each reference to the Master Repurchase Agreement in other document, instrument and agreement executed and/or delivered in connection with Master Repurchase Agreement shall mean and be a reference to the Master Agreement as amended hereby. 2.2 Except as specifically amended hereby, the Master Repurchase Agreement and all other documents, instruments and agreements executed and/or delivered in connection therewith shall remain in full force and effect and are hereby ratified and confirmed. 2.3 The execution, delivery and effectiveness of this Amendment Number One shall not operate as a waiver of any right, power or remedy of any of the parties to the Master Repurchase Agreement or any other document, instrument, or agreement executed in connection therewith, nor constitute a waiver of any provision contained therein. 2.4 By execution of this Amendment Number One, both of the parties hereto hereby acknowledges that it has been notified of this Amendment Number One and consent to the execution thereof. Section 3. Representations. In order to induce the Buyer to execute and deliver this Amendment, the Seller hereby represents to the Buyer that as of the date hereof, after giving effect to this Amendment, the Seller is in full

2.1 Upon the effectiveness of this Amendment Number One, each reference in the Master Repurchase Agreement to "this Agreement," "hereunder," "hereof," "herein," "hereby" or words of like import shall mean and be a reference to the Master Repurchase Agreement as amended hereby, and each reference to the Master Repurchase Agreement in other document, instrument and agreement executed and/or delivered in connection with Master Repurchase Agreement shall mean and be a reference to the Master Agreement as amended hereby. 2.2 Except as specifically amended hereby, the Master Repurchase Agreement and all other documents, instruments and agreements executed and/or delivered in connection therewith shall remain in full force and effect and are hereby ratified and confirmed. 2.3 The execution, delivery and effectiveness of this Amendment Number One shall not operate as a waiver of any right, power or remedy of any of the parties to the Master Repurchase Agreement or any other document, instrument, or agreement executed in connection therewith, nor constitute a waiver of any provision contained therein. 2.4 By execution of this Amendment Number One, both of the parties hereto hereby acknowledges that it has been notified of this Amendment Number One and consent to the execution thereof. Section 3. Representations. In order to induce the Buyer to execute and deliver this Amendment, the Seller hereby represents to the Buyer that as of the date hereof, after giving effect to this Amendment, the Seller is in full compliance with all of the terms and conditions of the Master Repurchase Agreement. Section 4. Governing Law. THIS AMENDMENT NUMBER ONE SHALL BE GOVERNED AND CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS (AS OPPOSED TO THE CONFLICT OF LAW PROVISIONS) AND DECISIONS OF THE STATE OF NEW YORK. Section 5. Execution in Counterparts, This Amendment Number One may be executed in any number of Counterparts and by different parties hereto in separate counterparts, each of which when so executed and delivered shall be deemed to be an original and all of which taken together shall constitute but one and the same instrument. Section 6. Headings. Section headings in this Amendment Number One are included herein for convenience of reference only and shall not constitute apart of this Amendment Number One for any other purpose. [Remainder of Page Intentionally Left Blank] 2

IN WITNESS WHEREOF, the parties have executed this Amendment Number One as of the date first above written. ABFS REPO 2001, INC., as Seller
By: /s/ Jeffrey M. Ruben --------------------------------Name: Jeffrey M. Ruben Title: Executive Vice President

CREDIT SUISSE FIRST BOSTON MORTGAGE CAPITAL LLC, as Buyer
By: /s/ Anthony Giordano -------------------------------Name: Anthony Giordano Title: Director

IN WITNESS WHEREOF, the parties have executed this Amendment Number One as of the date first above written. ABFS REPO 2001, INC., as Seller
By: /s/ Jeffrey M. Ruben --------------------------------Name: Jeffrey M. Ruben Title: Executive Vice President

CREDIT SUISSE FIRST BOSTON MORTGAGE CAPITAL LLC, as Buyer
By: /s/ Anthony Giordano -------------------------------Name: Anthony Giordano Title: Director

Acknowledged and Agreed: AMERICAN BUSINESS CREDIT, INC. as Guarantor AMERICAN BUSINESS MORTGAGE SERVICES, INC., as Guarantor

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

By:

By: Name: Title:

/s/ Jeffrey M. Ruben -----------------------------Jeffrey M. Ruben Executive Vice President

HOMEAMERICAN CREDIT, INC., d/b/a UPLAND MORTGAGE, as Guarantor

AMERICAN BUSINESS FINANCIAL SERVICES, INC., as Guarantor

By: Name: Title:

/s/ Jeffrey M. Ruben ------------------------Jeffrey M. Ruben Executive Vice President

By:

/s/ Beverly Santilli -----------------------------Name: Beverly Santilli Title: First Executive Vice President

[Signature Page to the Amendment Number One] 3

Exhibit 10.104

3/31/03 AMENDMENT TO SENIOR SECURED CREDIT AGREEMENT dated as of March 31, 2003 by and among AMERICAN BUSINESS CREDIT, INC. and certain affiliates and

Exhibit 10.104

3/31/03 AMENDMENT TO SENIOR SECURED CREDIT AGREEMENT dated as of March 31, 2003 by and among AMERICAN BUSINESS CREDIT, INC. and certain affiliates and JPMORGAN CHASE BANK, as Agent and as a Lender, and the other Lender(s) parties hereto amending (for the third time) the 3/02 Senior Secured Credit Agreement dated as of March 15, 2002, as supplemented by the 10/02 Letter of Credit Supplement to Senior Secured Credit Agreement, and as previously amended by the 12/02 Amendment and the 3/03 Amendment, all among such parties

TABLE OF CONTENTS
1. 7. 8. 9. 10. 11. 12. 16. DEFINITIONS...............................................................2 COLLATERAL................................................................3 CONDITIONS PRECEDENT......................................................3 REPRESENTATIONS...........................................................3 AFFIRMATIVE COVENANTS.....................................................3 NEGATIVE COVENANTS........................................................4 DEFAULTS AND REMEDIES.....................................................5 MISCELLANEOUS.............................................................6

i

INDEX OF DEFINED TERMS
3/02 Credit Agreement..........................................................1 3/31/03 Amendment..............................................................1 3/31/03 Amendment Effective Date...............................................2 ABC............................................................................1 ABFRS2002......................................................................1 ABMS...........................................................................1 Acceleration Date..............................................................3 Agent..........................................................................1

TABLE OF CONTENTS
1. 7. 8. 9. 10. 11. 12. 16. DEFINITIONS...............................................................2 COLLATERAL................................................................3 CONDITIONS PRECEDENT......................................................3 REPRESENTATIONS...........................................................3 AFFIRMATIVE COVENANTS.....................................................3 NEGATIVE COVENANTS........................................................4 DEFAULTS AND REMEDIES.....................................................5 MISCELLANEOUS.............................................................6

i

INDEX OF DEFINED TERMS
3/02 Credit Agreement..........................................................1 3/31/03 Amendment..............................................................1 3/31/03 Amendment Effective Date...............................................2 ABC............................................................................1 ABFRS2002......................................................................1 ABMS...........................................................................1 Acceleration Date..............................................................3 Agent..........................................................................1 Agreement......................................................................1 Amended Credit Agreement.......................................................1 Chase..........................................................................1 Companies......................................................................1 Company........................................................................1 Current Credit Agreement.......................................................1 HAC............................................................................1 Lease..........................................................................2 Maturity Date..................................................................3 Parent.........................................................................1 Serviced Leases................................................................2 Servicing Agreement............................................................2 Total Delinquency Rate.........................................................2 TRC............................................................................1

ii

3/31/03 AMENDMENT TO SENIOR SECURED CREDIT AGREEMENT Preamble This 3/31/03 Amendment to the Senior Secured Credit Agreement dated as of March 31, 2003 (the "3/31/03 Amendment") amending the 3/02 Amended and Restated Senior Secured Credit Agreement dated March 15, 2002 (the "3/02 Credit Agreement", as supplemented by the 10/02 Supplement, as amended by the 12/02 Amendment and the 3/03 Amendment, as amended hereby and as it may be further supplemented, further amended or restated from time to time, the "Current Credit Agreement" or, within itself, this "Agreement"), among: AMERICAN BUSINESS CREDIT, INC. ("ABC"), a Pennsylvania corporation, HOMEAMERICAN CREDIT, INC. ("HAC"), a Pennsylvania corporation doing business under the assumed or fictitious name

INDEX OF DEFINED TERMS
3/02 Credit Agreement..........................................................1 3/31/03 Amendment..............................................................1 3/31/03 Amendment Effective Date...............................................2 ABC............................................................................1 ABFRS2002......................................................................1 ABMS...........................................................................1 Acceleration Date..............................................................3 Agent..........................................................................1 Agreement......................................................................1 Amended Credit Agreement.......................................................1 Chase..........................................................................1 Companies......................................................................1 Company........................................................................1 Current Credit Agreement.......................................................1 HAC............................................................................1 Lease..........................................................................2 Maturity Date..................................................................3 Parent.........................................................................1 Serviced Leases................................................................2 Servicing Agreement............................................................2 Total Delinquency Rate.........................................................2 TRC............................................................................1

ii

3/31/03 AMENDMENT TO SENIOR SECURED CREDIT AGREEMENT Preamble This 3/31/03 Amendment to the Senior Secured Credit Agreement dated as of March 31, 2003 (the "3/31/03 Amendment") amending the 3/02 Amended and Restated Senior Secured Credit Agreement dated March 15, 2002 (the "3/02 Credit Agreement", as supplemented by the 10/02 Supplement, as amended by the 12/02 Amendment and the 3/03 Amendment, as amended hereby and as it may be further supplemented, further amended or restated from time to time, the "Current Credit Agreement" or, within itself, this "Agreement"), among: AMERICAN BUSINESS CREDIT, INC. ("ABC"), a Pennsylvania corporation, HOMEAMERICAN CREDIT, INC. ("HAC"), a Pennsylvania corporation doing business under the assumed or fictitious name Upland Mortgage, and AMERICAN BUSINESS MORTGAGE SERVICES ("ABMS"), a New Jersey corporation formerly named New Jersey Mortgage & Investment Corp., Inc., TIGER RELOCATION COMPANY ("TRC"), a Pennsylvania corporation formerly named ABC Holdings Corporation, and ABFS Residual 2002, Inc. ("ABFSR2002"), each with its principal office at BalaPointe Office Centre, 111 Presidential Boulevard, Suite 215, Bala Cynwyd, Pennsylvania 19004 (ABC, HAC, ABMS, TRC, and ABFSR2002 are herein collectively the "Companies" and are sometimes individually referred to as a "Company"); AMERICAN BUSINESS FINANCIAL SERVICES, INC. (the "Parent"), a Delaware corporation and owner of all of the capital stock of ABFSR2002, and all of the capital stock of ABC which owns all of the capital stock of each of the other Companies; JPMORGAN CHASE BANK ("Chase"), a New York banking corporation, acting herein as a Lender and as agent and representative of the Lenders and Eligible Assignees (in that capacity, Chase is called the "Agent"); and such other Lender(s) as may from time to time be party to the Current Credit Agreement; recites and provides as follows: Recitals

3/31/03 AMENDMENT TO SENIOR SECURED CREDIT AGREEMENT Preamble This 3/31/03 Amendment to the Senior Secured Credit Agreement dated as of March 31, 2003 (the "3/31/03 Amendment") amending the 3/02 Amended and Restated Senior Secured Credit Agreement dated March 15, 2002 (the "3/02 Credit Agreement", as supplemented by the 10/02 Supplement, as amended by the 12/02 Amendment and the 3/03 Amendment, as amended hereby and as it may be further supplemented, further amended or restated from time to time, the "Current Credit Agreement" or, within itself, this "Agreement"), among: AMERICAN BUSINESS CREDIT, INC. ("ABC"), a Pennsylvania corporation, HOMEAMERICAN CREDIT, INC. ("HAC"), a Pennsylvania corporation doing business under the assumed or fictitious name Upland Mortgage, and AMERICAN BUSINESS MORTGAGE SERVICES ("ABMS"), a New Jersey corporation formerly named New Jersey Mortgage & Investment Corp., Inc., TIGER RELOCATION COMPANY ("TRC"), a Pennsylvania corporation formerly named ABC Holdings Corporation, and ABFS Residual 2002, Inc. ("ABFSR2002"), each with its principal office at BalaPointe Office Centre, 111 Presidential Boulevard, Suite 215, Bala Cynwyd, Pennsylvania 19004 (ABC, HAC, ABMS, TRC, and ABFSR2002 are herein collectively the "Companies" and are sometimes individually referred to as a "Company"); AMERICAN BUSINESS FINANCIAL SERVICES, INC. (the "Parent"), a Delaware corporation and owner of all of the capital stock of ABFSR2002, and all of the capital stock of ABC which owns all of the capital stock of each of the other Companies; JPMORGAN CHASE BANK ("Chase"), a New York banking corporation, acting herein as a Lender and as agent and representative of the Lenders and Eligible Assignees (in that capacity, Chase is called the "Agent"); and such other Lender(s) as may from time to time be party to the Current Credit Agreement; recites and provides as follows: Recitals The parties wish to amend the 3/02 Credit Agreement, as supplemented by the 10/02 Supplement and amended by the 12/02 Amendment and the 3/03 Amendment (as so supplemented and amended, the "Amended Credit Agreement") to extend the maturity of the facility to December 22, 2003 and to revise and expand its covenants and its defaults and remedies provisions. 1

All capitalized terms defined in the Amended Credit Agreement and used but not defined differently in this Amendment have the same meanings here as there. The Sections of this 3/31/03 Amendment are numbered to correspond with the numbers of the Sections of the 3/02 Credit Agreement and are consequently nonsequential. Agreements In consideration of the premises, the mutual agreements stated below and other good and valuable consideration paid by each party to each other party to this Agreement, the receipt and sufficiency of which each party hereby acknowledges, the parties hereby agree as follows: 1. DEFINITIONS 1.2 Definitions of General Application. This Section is hereby amended as follows:

All capitalized terms defined in the Amended Credit Agreement and used but not defined differently in this Amendment have the same meanings here as there. The Sections of this 3/31/03 Amendment are numbered to correspond with the numbers of the Sections of the 3/02 Credit Agreement and are consequently nonsequential. Agreements In consideration of the premises, the mutual agreements stated below and other good and valuable consideration paid by each party to each other party to this Agreement, the receipt and sufficiency of which each party hereby acknowledges, the parties hereby agree as follows: 1. DEFINITIONS 1.2 Definitions of General Application. This Section is hereby amended as follows: A. The following definitions are hereby added to Section 1.2, in alphabetical order: "3/31/03 Amendment" means the 3/31/03 Amendment to Senior Secured Credit Agreement dated as of March 31, 2003. "3/31/03 Amendment Effective Date" is defined in the 3/31/03 Amendment (to mean March 31, 2003.) "Lease" means an equipment lease agreement between a lessor and a lessee for a commercial purpose only, whether or not a true lease. "Serviced Leases" means all Leases serviced or required to be serviced by a Company under any Servicing Agreement, irrespective of whether the actual servicing is done by another Person (a subservicer) retained by the Company for that purpose. "Total Delinquency Rate" means (x) the total delinquencies (Mortgage Loans and Leases with at least one payment past due for thirty (30) days or more, excluding REO) in the Companies' total (managed and owned) portfolio of Serviced Loans and Serviced Leases, expressed as a percentage of (y) the aggregate amount of such total portfolio. B. The definition of "Servicing Agreement set forth in Section 1.2 is hereby amended in its entirety to henceforth read as follows: "Servicing Agreement" means, with respect to any Person, the arrangement--whether or not in writing--pursuant to which that Person acts as servicer of Mortgage Loans or Leases, whether owned by that Person or by others. 2

C. The definition of "Maturity Date" set forth in Section 1.2 (as amended) is hereby reamended in its entirety to henceforth read as follows: "Maturity Date" means December 22, 2003, or the earlier date (the "Acceleration Date"), if any, to which maturity of the Senior Credit Notes is accelerated pursuant to this Agreement, by order of any Governmental Authority or by operation of law. 7. COLLATERAL 7.1 Grant of Security Interest. The provisions of Section 7 of the 3/02 Credit Agreement are not amended hereby. Cumulative of such existing provisions, as security for the payment of the Loan and for the payment and performance of all of the Obligations, each Companies hereby GRANTS to the Agent, as agent and representative of the Lenders, a first priority security interest in all of such Company's present and future estate, right, title and interest in and to the Collateral, in addition to and cumulative of the security interest in the Collateral

C. The definition of "Maturity Date" set forth in Section 1.2 (as amended) is hereby reamended in its entirety to henceforth read as follows: "Maturity Date" means December 22, 2003, or the earlier date (the "Acceleration Date"), if any, to which maturity of the Senior Credit Notes is accelerated pursuant to this Agreement, by order of any Governmental Authority or by operation of law. 7. COLLATERAL 7.1 Grant of Security Interest. The provisions of Section 7 of the 3/02 Credit Agreement are not amended hereby. Cumulative of such existing provisions, as security for the payment of the Loan and for the payment and performance of all of the Obligations, each Companies hereby GRANTS to the Agent, as agent and representative of the Lenders, a first priority security interest in all of such Company's present and future estate, right, title and interest in and to the Collateral, in addition to and cumulative of the security interest in the Collateral granted in the 3/02 Credit Agreement, the 12/02 Amendment and the 3/03 Amendment, and the security interest in the Collateral granted in the Security Agreement-Class R Certificate, as amended, and the parties hereby declare and confirm that all such security interests were and are granted to and held by the Agent as agent and representative of the Lenders, including Chase. 8. CONDITIONS PRECEDENT Section 8 of the 3/02 Credit Agreement is hereby amended by adding the following new Section 8.6: 8.6 Each Advance on or after the 3/31/03 Amendment Effective Date. The obligations of the Lenders to fund their respective Funding Shares of each Advance requested on or after the 3/31/03 Amendment Effective Date are also subject to the condition precedent that the Agent shall have received the following, all of which must be satisfactory in form and content to the Agent in its sole discretion: (a) The 3/31/03 Amendment duly executed by all parties; and (b) such other documents, if any, as shall be specified by the Agent. 9. REPRESENTATIONS The Companies and the Parent hereby republish all of their representations and warranties made in the 3/02 Credit Agreement. 10. AFFIRMATIVE COVENANTS Section 10.2(b) of the 3/02 Credit Agreement is hereby amended to read as follows: (b)As soon as available and in any event within sixty (60) days after the close of each of the first three (3) fiscal quarters in each of its fiscal years, statements of income, statements of cash flow, and 3

statements of changes in its stockholders' equity and cash flows of the Parent and its Subsidiaries on a consolidating and consolidated basis for the period from the beginning of such fiscal year to the end of such fiscal quarter, and the related balance sheet as at the end of such fiscal quarter, all in reasonable detail, with all notes and certified by its chief financial officer that, to the best of his or her knowledge, such financial statements were prepared in accordance with GAAP and present fairly the financial condition and the results of operations and cash flows for the period covered, subject, however, to year-end audit adjustments and the omission of footnotes. New Sections 10.4(l) and 10.4(m) reading, respectively, as follows are hereby added to the end of Section 10.4: (l) Monthly, a repurchase activity report detailing activity related to Repurchased Defaulted Mortgage Loans, in a

statements of changes in its stockholders' equity and cash flows of the Parent and its Subsidiaries on a consolidating and consolidated basis for the period from the beginning of such fiscal year to the end of such fiscal quarter, and the related balance sheet as at the end of such fiscal quarter, all in reasonable detail, with all notes and certified by its chief financial officer that, to the best of his or her knowledge, such financial statements were prepared in accordance with GAAP and present fairly the financial condition and the results of operations and cash flows for the period covered, subject, however, to year-end audit adjustments and the omission of footnotes. New Sections 10.4(l) and 10.4(m) reading, respectively, as follows are hereby added to the end of Section 10.4: (l) Monthly, a repurchase activity report detailing activity related to Repurchased Defaulted Mortgage Loans, in a form acceptable to the Agent. (m) Monthly, a residual interest summary report listing, by securitization trust, the cash flows from the Companies' residual interests in Mortgage Loan pools that have been securitized, in a form acceptable to the Agent. 11. NEGATIVE COVENANTS Sections 11.4, 11.5, 11.7, 11.8, and 11.10 of the 3/02 Credit Agreement are hereby amended to read as follows: 11.4. The Parent's Debt to Adjusted Net Worth Ratio. The Parent will not permit the ratio of Debt (excluding nonrecourse Debt whether under repurchase agreements or otherwise) to the sum of (x) GAAP Net Worth plus (y) that portion of Subordinated Debt not due before the Maturity Date, of the Parent and its Subsidiaries, on a consolidated basis, to exceed 4.00:1.00 as at the end of any of the Company's fiscal quarters or fiscal years. 11.5. The Parent's Minimum Liquidity. The Parent will at all times maintain at least Thirty-five Million Dollars ($35,000,000) in (x) unrestricted cash and Cash Equivalents that is owned and held free and clear of Liens other than bankers' liens or setoff rights against cash on deposit with the Agent or another depositary institution and the Agent's or another warehouse lender's Lien and (y) Eligible Single-family Collateral owned by the Parent or one of the Companies and that is either unpledged or, if Pledged to the Agent or pledged to another warehouse lender (or that has been delivered to a warehousing repurchase agreement counterparty) against which no borrowing is outstanding (or that has not been purchased by such repurchase agreement counterparty). 11.7. The Parent's Minimum Adjusted Tangible Net Worth. As of the end of any fiscal quarter, permit the Adjusted Tangible Net Worth of the Parent (on a consolidated basis with its Subsidiaries) to be less than Three Hundred Million Dollars ($300,000,000). 4

11.8. The Parent's Minimum Subordinated Debt and Limit on Current Subordinated Debt. The Parent will maintain Subordinated Debt of at least Five Hundred Million Dollars ($500,000,000) at all times, but the Parent will not on any day permit Subordinated Debt principal that will become due (whether as scheduled installment payments, calls, mandatory prepayments, as a result of acceleration or by any other means or for any other reason) within one (1) year of that day to exceed sixty-five percent (65%) of the aggregate principal amount of all of the Parent's Subordinated Debt on that day. 11.10. The Parent's Minimum GAAP Net Worth. As of the end of any fiscal quarter, permit the GAAP Net Worth of the Parent (on a consolidated basis with its Subsidiaries) to be less than Sixty-five Million Dollars ($65,000,000). Section 11.12, as added by the 12/02 Amendment (the numbering of the new Section added to Section 11 by the 12/02 Amendment is hereby corrected to be 11.12 instead of 11.11 as stated in the 12/02 Amendment) is hereby amended to read as follows: 11 .12. Repurchased Mortgage Loans Limitation. The Companies will not own on any day Repurchased

11.8. The Parent's Minimum Subordinated Debt and Limit on Current Subordinated Debt. The Parent will maintain Subordinated Debt of at least Five Hundred Million Dollars ($500,000,000) at all times, but the Parent will not on any day permit Subordinated Debt principal that will become due (whether as scheduled installment payments, calls, mandatory prepayments, as a result of acceleration or by any other means or for any other reason) within one (1) year of that day to exceed sixty-five percent (65%) of the aggregate principal amount of all of the Parent's Subordinated Debt on that day. 11.10. The Parent's Minimum GAAP Net Worth. As of the end of any fiscal quarter, permit the GAAP Net Worth of the Parent (on a consolidated basis with its Subsidiaries) to be less than Sixty-five Million Dollars ($65,000,000). Section 11.12, as added by the 12/02 Amendment (the numbering of the new Section added to Section 11 by the 12/02 Amendment is hereby corrected to be 11.12 instead of 11.11 as stated in the 12/02 Amendment) is hereby amended to read as follows: 11 .12. Repurchased Mortgage Loans Limitation. The Companies will not own on any day Repurchased Defaulted Mortgage Loans (including both those Pledged to the Agent and those not Pledged to the Agent) having aggregate outstanding principal balances of more than one and one-half percent (1.5%) of the sum of the aggregate outstanding principal balances of the Companies' managed and owned portfolio of Serviced Loans and Serviced Leases. New Sections 11.13 and 11.14 reading, respectively, as follows are hereby added to the end of Section 11: 11.13. Total Delinquency Rate Limitation. The Companies will not permit the Total Delinquency Rate as of the end of any calendar quarter to exceed nine and three-fourths percent (9.75%). 11.14. Minimum Cash Flows from Securitization Trusts. The Parent and the Companies will not permit the actual aggregate cash flows received in any calendar quarter from all of the Parent's and the Companies' residual interests in Mortgage Loan pools that have been securitized (described in the Parent's SEC Form 10-K as the excess or residual cash flows and cash flows from overcollateralization received by the Companies as holders of interest-only strips) to be less than the sum of (x) the average of the cash flows from all such residual interests for the immediately preceding four (4) quarters plus (y) $1. 12. DEFAULTS AND REMEDIES Section 12 of the 3/02 Credit Agreement is hereby amended by adding the following new Section 1.1(p) to the end of such Section: 5

(p) Any occurrence or event (a "trigger event") occurs under the relevant Pooling and Servicing Agreement after which the cash flow to the Parent or any Company (whichever is the owner of such residual interest) from any residual interest in Mortgage Loan pools that have been securitized is interrupted, and such trigger event remains uncured for ninety (90) days. 16. MISCELLANEOUS The parties hereby ratify and confirm the Current Credit Agreement (being the 3/02 Credit Agreement, as supplemented by the 10/02 Supplement, as amended by the 12/02 Amendment and the 3/03 Amendment and as amended hereby). The Parent hereby ratifies the Guaranty and confirms that (i) the Guaranty is and remains in full force and effect and (ii) the Parent, as primary obligor and not as a surety, unconditionally guarantees to the Lenders and the Agent the full, prompt and punctual payment of the Loan when due (whether at its stated maturity, by acceleration or otherwise) in accordance with the terms and provisions of the Current Credit Agreement, the Notes and the other Credit Papers, and that such guaranty obligation is not and shall not be impaired, diminished or otherwise affected in any way adverse to the Agent or the Lenders by this Amendment or any act or transaction contemplated hereby, and the Parent hereby irrevocably consents to this Amendment.

(p) Any occurrence or event (a "trigger event") occurs under the relevant Pooling and Servicing Agreement after which the cash flow to the Parent or any Company (whichever is the owner of such residual interest) from any residual interest in Mortgage Loan pools that have been securitized is interrupted, and such trigger event remains uncured for ninety (90) days. 16. MISCELLANEOUS The parties hereby ratify and confirm the Current Credit Agreement (being the 3/02 Credit Agreement, as supplemented by the 10/02 Supplement, as amended by the 12/02 Amendment and the 3/03 Amendment and as amended hereby). The Parent hereby ratifies the Guaranty and confirms that (i) the Guaranty is and remains in full force and effect and (ii) the Parent, as primary obligor and not as a surety, unconditionally guarantees to the Lenders and the Agent the full, prompt and punctual payment of the Loan when due (whether at its stated maturity, by acceleration or otherwise) in accordance with the terms and provisions of the Current Credit Agreement, the Notes and the other Credit Papers, and that such guaranty obligation is not and shall not be impaired, diminished or otherwise affected in any way adverse to the Agent or the Lenders by this Amendment or any act or transaction contemplated hereby, and the Parent hereby irrevocably consents to this Amendment. 16.10 Notice Pursuant to Tex. Bus. & Comm. Codess.26.02. This Section is hereby amended to read as follows: THE 3/02 CREDIT AGREEMENT, AS SUPPLEMENTED BY THE 10/02 SUPPLEMENT, AS AMENDED BY THE 12/02 AMENDMENT AND THE 3/03 AMENDMENT AND AS AMENDED HEREBY, AND THE OTHER FACILITIES PAPERS TOGETHER CONSTITUTE A WRITTEN LOAN AGREEMENT WHICH REPRESENTS THE FINAL AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES. THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES. (The remainder of this page is blank; unnumbered counterpart signature pages follow.) 6

EXECUTED as of March 31, 2003.
By the Companies: AMERICAN BUSINESS CREDIT, INC. By: Beverly Santilli --------------------------------------

Name: Beverly Santilli Title: President HOMEAMERICAN CREDIT, INC., doing business as UPLAND MORTGAGE By: Jeffrey M. Ruben Name: Jeffrey M. Ruben Title: EVP AMERICAN BUSINESS MORTGAGE SERVICES, INC. By: Jeffrey M. Ruben Name: Jeffrey M. Ruben Title: EVP TIGER RELOCATION COMPANY

EXECUTED as of March 31, 2003.
By the Companies: AMERICAN BUSINESS CREDIT, INC. By: Beverly Santilli --------------------------------------

Name: Beverly Santilli Title: President HOMEAMERICAN CREDIT, INC., doing business as UPLAND MORTGAGE By: Jeffrey M. Ruben Name: Jeffrey M. Ruben Title: EVP AMERICAN BUSINESS MORTGAGE SERVICES, INC. By: Jeffrey M. Ruben Name: Jeffrey M. Ruben Title: EVP TIGER RELOCATION COMPANY By: Jeffrey M. Ruben Name: Jeffrey R. Ruben Title: EVP ABFS RESIDUAL 2002, INC.
By: Jeffrey M. Ruben -------------------------------------Name: Jeffrey M. Ruben Title: EVP By the Parent/Guarantor: AMERICAN BUSINESS FINANCIAL SERVICES, INC. By: Jeffrey M. Ruben -------------------------------------Name: Jeffrey M. Ruben Title: EVP By the Agent and a Lender: JPMORGAN CHASE BANK, as the Agent and as a Lender By: Michael W. Nicholson --------------------------------------

Name: Michael W. Nicholson Title: Senior Vice President Unnumbered counterpart signature page to 3/31/03 Amendment to Senior Secured Credit Agreement among American Business Credit Inc. and certain affiliates and JPMorgan Chase Bank, as Agent and as a Lender.

Exhibit 10.105 12/02 AMENDMENT TO 3/02 SECURITY AGREEMENT - RESIDUAL INTEREST CERTIFICATES

Exhibit 10.105 12/02 AMENDMENT TO 3/02 SECURITY AGREEMENT - RESIDUAL INTEREST CERTIFICATES This 12/02 Amendment to the Security Agreement dated as of December 18, 2002 (the "12/02 Security Agreement Amendment") amending the 3/02 Security Agreement - Residual Interest Certificates ("3/02 Security Agreement") dated March 15, 2002, as amended hereby and as it may be further amended, supplemented or restated from time to time, the "Current Security Agreement", or within itself this "Agreement"), made by ABFS RESIDUAL 2002, INC. ("ABFSR2002" or "Debtor"), a Delaware corporation, in favor of JPMORGAN CHASE BANK ("Chase" or "Secured Party"), as secured party, recites and provides as follows. Recitals ABFSR2002, AMERICAN BUSINESS CREDIT, INC. ("ABC"), a Pennsylvania corporation, HOMEAMERICAN CREDIT, INC. ("HAC"), a Pennsylvania corporation doing business as UPLAND MORTGAGE, AMERICAN BUSINESS MORTGAGE SERVICES, INC., a New Jersey corporation, and TIGER RELOCATION COMPANY ("TRC"), a Pennsylvania corporation ("TRC" and collectively with ABFSR2002, ABC, HAC and ABMS, "Borrowers") wish to amend the 3/02 Security Agreement and as it may be supplemented, amended or restated from time to time, to provide for an additional Class R Certificate to be Pledged to the Agent as collateral. It is a condition precedent to the obligation of the Lenders to extend credit to the Borrowers under the Current Credit Agreement that Debtor shall have entered into this Agreement. All capitalized terms defined in the 3/02 Security Agreement and used but not defined differently in this 12/02 Security Agreement Amendment have the same meanings here as there. The Sections of this 12/02 Security Agreement Amendment are numbered to correspond with the numbers of the Sections of the 3/02 Security Agreement and are consequently nonsequential. Agreements In consideration of the premises, the mutual agreements stated below and other good and valuable consideration paid by each party to each other party to this Agreement, the receipt and sufficiency of which each party hereby acknowledges, the parties hereby agree as follows, Section 3. Grant of Security interest Section 3(a) of the 3/02 Security Agreement is hereby amended to read as follows:

(a) The ABFS Mortgage Loan Trust 1997-2 Mortgage Pass-Through Certificate dated September 29, 1997, Certificate No. R-1 (the "1997-2 Residual Interest Certificate"), issued in respect of the Pooling and Servicing Agreement dated as of September 1, 1997 by and among American Business Credit, Inc., as servicer, Prudential Securities Secured Financing Corporation, a Delaware corporation, as depositor, and Chase (which was then named The Chase Manhattan Bank), as trustee, issued by such trustee to ABFS 1997-2, Inc., representing a one hundred percent (100%) Percentage Interest (as defined in such Pooling and Servicing Agreement) of the related interest in ABFS Mortgage Loan Trust 1997-2 existing under the laws of the State of New York and created pursuant to said Pooling and Servicing Agreement, and (ii) the ABFS Mortgage Loan Trust 1998-3 Mortgage Pass-Through Certificate dated September 29, 1998, Certificate No. R-1 (the "1998-3 Residual Interest Certificate") issued in respect of the Pooling and Servicing Agreement dated as of September 1, 1998 by and among American Business Credit, Inc., as servicer, Prudential Securities Secured Financing Corporation, a Delaware corporation, as depositor, and Chase (which was then named The Chase Manhattan Bank), as trustee, issued by such trustee to ABFS 1998-3, Inc., representing a one hundred percent (100%) Percentage Interest (as defined in such Pooling and Servicing Agreement) of the related interest in ABFS Mortgage Loan Trust

(a) The ABFS Mortgage Loan Trust 1997-2 Mortgage Pass-Through Certificate dated September 29, 1997, Certificate No. R-1 (the "1997-2 Residual Interest Certificate"), issued in respect of the Pooling and Servicing Agreement dated as of September 1, 1997 by and among American Business Credit, Inc., as servicer, Prudential Securities Secured Financing Corporation, a Delaware corporation, as depositor, and Chase (which was then named The Chase Manhattan Bank), as trustee, issued by such trustee to ABFS 1997-2, Inc., representing a one hundred percent (100%) Percentage Interest (as defined in such Pooling and Servicing Agreement) of the related interest in ABFS Mortgage Loan Trust 1997-2 existing under the laws of the State of New York and created pursuant to said Pooling and Servicing Agreement, and (ii) the ABFS Mortgage Loan Trust 1998-3 Mortgage Pass-Through Certificate dated September 29, 1998, Certificate No. R-1 (the "1998-3 Residual Interest Certificate") issued in respect of the Pooling and Servicing Agreement dated as of September 1, 1998 by and among American Business Credit, Inc., as servicer, Prudential Securities Secured Financing Corporation, a Delaware corporation, as depositor, and Chase (which was then named The Chase Manhattan Bank), as trustee, issued by such trustee to ABFS 1998-3, Inc., representing a one hundred percent (100%) Percentage Interest (as defined in such Pooling and Servicing Agreement) of the related interest in ABFS Mortgage Loan Trust 1998-3 existing under the laws of the State of New York and created pursuant to said Pooling and Servicing Agreement, and (iii) the ABFS Mortgage Loan Trust 1998-1 Mortgage Pass-Through Certificate dated March 12, 1998, Certificate No. R-1 (the "1998-1 Residual Interest Certificate" and, collectively with the 1997-2 Residual interest Certificate and the 1998-3 Residual Interest Certificate, the "Residual Interest Certificates"), issued in respect of the Pooling and Servicing Agreement dated February 1, 1998 by and among American Business Credit, Inc., as servicer, Prudential Securities Secured Financing Corporation, a Delaware corporation, as depositor, and The Chase Manhattan Bank (Chase's merger predecessor), as trustee, issued by such trustee to ABFS 1998-1, Inc., representing a one hundred percent (100%) Percentage Interest (as defined in such Pooling and Servicing Agreement) of the related interest in ABFS Mortgage Loan Trust 1998-1 existing under the laws of the State of New York and created pursuant to said Pooling and Servicing Agreement, a copy of such certificates being attached as Exhibit A to this Security Agreement and hereby incorporated herein, and all existing and future ownership interests evidenced thereby or described therein in first and second lien closed-end mortgage loans (the "Mortgage Loans") serviced by American Business Credit, Inc. in its capacity as servicer (the "Servicer") under such Pooling and Servicing Agreements dated as of September 1, 1997, February 1, 1998, and September 1, 1998 (the "Pooling and Servicing Agreements"), whether such ownership interests (1) are now or hereafter in the form of, or represented by, one of the Residual Interest Certificates or other securities (whether definitive certificated securities, certificated securities traded in book-entry form or bookentry securities), (2) are now or hereafter in another form of investment property (as defined In Section 9.102(a) (49) of the UCC) or (3) simply constitute an account, a payment intangible, a general intangible or a contract right, and including, without limitation, all securities, investment property, accounts, payment intangibles, general intangibles and contract rights that (x) from time to time have, been or are delivered or intended to be delivered or negotiated to Secured Party or to a bailee, financial intermediary of securities intermediary for Secured Party by or on behalf of a Debtor, or over which Secured Party from time to time obtains control, whether or not the item is described, designated or referred to in a written notice from a Debtor to Secured Party identifying it as part of the Collateral of this Security Agreement and (y) comprise all or part 2

of the equity class or tranche of Mortgage Securities created in whole or in part from a pool or pools of mortgage loans, however the same may be designated (i.e., whether as a "Class R Certificate" or otherwise), and all interest on, all rights to receive distributions of or in respect of, renewals and extensions of, all substitutions for and all general intangibles arising in respect of such securities, other types of investment securities, general intangibles or contract rights, irrespective of whether they are in uncertificated or certificated form; Section 5. Representations and Warranties The Companies hereby republish all of their representations and warranties made in the 3/02 Security Agreement. The remainder of this page is intentionally blank; unnumbered counterpart signature pages follow. 3

of the equity class or tranche of Mortgage Securities created in whole or in part from a pool or pools of mortgage loans, however the same may be designated (i.e., whether as a "Class R Certificate" or otherwise), and all interest on, all rights to receive distributions of or in respect of, renewals and extensions of, all substitutions for and all general intangibles arising in respect of such securities, other types of investment securities, general intangibles or contract rights, irrespective of whether they are in uncertificated or certificated form; Section 5. Representations and Warranties The Companies hereby republish all of their representations and warranties made in the 3/02 Security Agreement. The remainder of this page is intentionally blank; unnumbered counterpart signature pages follow. 3

IN WITNESS WHEREOF, Debtor and Secured Party have caused this Agreement to be executed by their duly authorized offices on the date first set forth above. ABFS RESIDUAL 2002, INC. By: Jeffrey M. Ruben Name: Jeffrey M. Ruben Title: Executive Vice President ABC joins in execution hereof to make the agreement set forth in Section 6(k) of the 3/02 Security Agreement. AMERICAN BUSINESS CREDIT, INC. By: Jeffrey M. Ruben Name: Jeffrey M. Ruben Title: Executive Vice President Unnumbered counterpart signature page to 12/02 Security Agreement Amendment dated December 19, 2002 from ABFS Residual 2002, Inc. to JPMorgan Chase Bank, as agent and representative of certain lenders

Exhibit 10.106 JPMORGAN CHASE BANK 707 Travis, 6th Floor North Houston, Texas 11002 August 14, 2003 American Business Financial Services, Inc. The Wanamaker Building 100 Penn Square East Philadelphia, PA 19107 Attention: Mr. Jeffrey Ruben Gentlemen and Ladies: This Commitment Letter is intended to set forth the results of discussions between JPMorgan Chase Bank ("JPM") and American Business Financial Services, Inc. ("ABFS") relating to the proposed secured mortgage warehouse facility (the "Facility") provided by JPM. Subject to the satisfaction of the conditions set forth in this

IN WITNESS WHEREOF, Debtor and Secured Party have caused this Agreement to be executed by their duly authorized offices on the date first set forth above. ABFS RESIDUAL 2002, INC. By: Jeffrey M. Ruben Name: Jeffrey M. Ruben Title: Executive Vice President ABC joins in execution hereof to make the agreement set forth in Section 6(k) of the 3/02 Security Agreement. AMERICAN BUSINESS CREDIT, INC. By: Jeffrey M. Ruben Name: Jeffrey M. Ruben Title: Executive Vice President Unnumbered counterpart signature page to 12/02 Security Agreement Amendment dated December 19, 2002 from ABFS Residual 2002, Inc. to JPMorgan Chase Bank, as agent and representative of certain lenders

Exhibit 10.106 JPMORGAN CHASE BANK 707 Travis, 6th Floor North Houston, Texas 11002 August 14, 2003 American Business Financial Services, Inc. The Wanamaker Building 100 Penn Square East Philadelphia, PA 19107 Attention: Mr. Jeffrey Ruben Gentlemen and Ladies: This Commitment Letter is intended to set forth the results of discussions between JPMorgan Chase Bank ("JPM") and American Business Financial Services, Inc. ("ABFS") relating to the proposed secured mortgage warehouse facility (the "Facility") provided by JPM. Subject to the satisfaction of the conditions set forth in this Commitment Letter, JPM commits to make the loan (the "Loan") and provide the Facility contemplated hereby to ABFS and ABFS, commits to have a bankruptcy remote business trust, wholly owned by ABFS, borrow such Loan. Capitalized terms used herein and not otherwise defined herein have the meaning assigned to them in the "Summary of Terms and Conditions" attached hereto. 1. Principal Terms and Standard Conditions. The principal terms of the Facility are set forth in the Summary of Terms and Conditions. The Summary of Terms and Conditions are incorporated by reference herein for all purposes and deemed part of this Commitment Letter. 2. General Understanding. ABFS and JPM each covenants to act in good faith to do all things reasonably required to consummate the closing of the Facility. ABFS will cooperate and use best efforts to promptly supply JPM with all due diligence materials requested by JPM and prepare or cause to be prepared documents relating to the Facility. ABFS acknowledges that JPM has set forth in this Commitment Letter the terms and conditions upon which it is willing to provide the Facility based upon ABFS oral or written representations regarding itself and the Eligible Collateral and prior to its own due diligence investigation. If, as a result of JPM's own due

Exhibit 10.106 JPMORGAN CHASE BANK 707 Travis, 6th Floor North Houston, Texas 11002 August 14, 2003 American Business Financial Services, Inc. The Wanamaker Building 100 Penn Square East Philadelphia, PA 19107 Attention: Mr. Jeffrey Ruben Gentlemen and Ladies: This Commitment Letter is intended to set forth the results of discussions between JPMorgan Chase Bank ("JPM") and American Business Financial Services, Inc. ("ABFS") relating to the proposed secured mortgage warehouse facility (the "Facility") provided by JPM. Subject to the satisfaction of the conditions set forth in this Commitment Letter, JPM commits to make the loan (the "Loan") and provide the Facility contemplated hereby to ABFS and ABFS, commits to have a bankruptcy remote business trust, wholly owned by ABFS, borrow such Loan. Capitalized terms used herein and not otherwise defined herein have the meaning assigned to them in the "Summary of Terms and Conditions" attached hereto. 1. Principal Terms and Standard Conditions. The principal terms of the Facility are set forth in the Summary of Terms and Conditions. The Summary of Terms and Conditions are incorporated by reference herein for all purposes and deemed part of this Commitment Letter. 2. General Understanding. ABFS and JPM each covenants to act in good faith to do all things reasonably required to consummate the closing of the Facility. ABFS will cooperate and use best efforts to promptly supply JPM with all due diligence materials requested by JPM and prepare or cause to be prepared documents relating to the Facility. ABFS acknowledges that JPM has set forth in this Commitment Letter the terms and conditions upon which it is willing to provide the Facility based upon ABFS oral or written representations regarding itself and the Eligible Collateral and prior to its own due diligence investigation. If, as a result of JPM's own due diligence investigation, JPM's findings are inconsistent with ABFS's oral or written representations, JPM may terminate its obligations under this Commitment Letter. On the closing date, (a) the value and condition of the Eligible Collateral, the financial statements of ABFS and all other features of the transaction shall be as represented in the documents and communications presented to JPM in order to induce JPM to enter into the Commitment Letter; (b) the condition of the Eligible Collateral, the economy and the capital markets shall be without material adverse change, in all cases, JPM shall have no obligation to close the Facility under this Commitment Letter. 1

3. Expiration Date. If the Facility does not close on or prior to September 15, 2003 (as such date may be extended, the "Commitment Expiration Date"), this Commitment Letter will be deemed terminated and JPM shall have no further obligations hereunder unless JPM otherwise elects in writing to extend the Commitment Expiration Date. 4. Confidentiality. Except to the extent required by law, ABFS agrees not to disclose, and to cause its officers, directors, employees and agents not to disclose, this Commitment Letter, any of the terms, conditions, or other facts relating to the Facility, including the status thereof, or the fact that discussions or negotiations are taking place concerning the Facility, to any person other than its attorneys and other advisors who need to know such

3. Expiration Date. If the Facility does not close on or prior to September 15, 2003 (as such date may be extended, the "Commitment Expiration Date"), this Commitment Letter will be deemed terminated and JPM shall have no further obligations hereunder unless JPM otherwise elects in writing to extend the Commitment Expiration Date. 4. Confidentiality. Except to the extent required by law, ABFS agrees not to disclose, and to cause its officers, directors, employees and agents not to disclose, this Commitment Letter, any of the terms, conditions, or other facts relating to the Facility, including the status thereof, or the fact that discussions or negotiations are taking place concerning the Facility, to any person other than its attorneys and other advisors who need to know such information for the purpose of causing the consummation of the Facility. Notwithstanding anything to the contrary contained herein or in the Summary of Terms and Conditions, all persons may disclose to any and all persons, without limitation of any kind, the federal income tax treatment of the Facility, any fact relevant to understanding the federal tax treatment of the Facility, and all materials of any kind (including opinions or other tax analyses) relating to such federal income tax treatment; provided, that no person may disclose the name of or identifying information with respect to any party identified herein or in the Summary of Terms and Conditions or any pricing terms or other nonpublic business or financial information (including Wet Sublimits and Financial Covenants) that is unrelated to the purported or claimed federal income tax treatment of the transaction without the prior consent of JPM. The terms set forth herein are proprietary to JPM and are made available to ABFS solely for the evaluation of the Facility. Oral or written disclosure of this Commitment Letter to any competitor of JPM shall be detrimental to JPM and shall be an explicit violation of this paragraph. The obligations of ABFS under this paragraph shall survive the Commitment Expiration Date. 5. Expenses. ABFS hereby agrees to pay or to reimburse JPM, upon demand, whether or not the Facility is consummated, the out-of-pocket expenses (collectively, the "Expenses") incurred by JPM in connection with the preparation of the Facility, as more particularly described in the Summary of Terms and Conditions. 6. Indemnification. ABFS agrees to indemnify and hold harmless JPM and each director, officer, employee, affiliate and agent thereof (each, an "indemnified person") against, and to reimburse each indemnified person, upon its demand, for, any losses, claims, damages, liabilities or other expenses ("Losses") to which such indemnified person may become subject insofar as such Losses arise out of or in any way relate to or result from this Commitment Letter or the Facility contemplated hereby, including, without limitation, Losses consisting of legal or other expenses incurred in connection with investigating, defending or participating in any legal proceeding relating to any of the foregoing (whether or not such indemnified person is a party thereto); provided that the foregoing will not apply to any Losses to the extent they result are found by a final decision of a court of competent jurisdiction to have resulted from the gross negligence or willful misconduct of such indemnified person. ABFS's obligations under this paragraph shall remain effective whether or not definitive facility documentation is executed and notwithstanding any termination of this Commitment Letter. Neither JPM nor any other indemnified personal shall be responsible or liable to any other person for consequential damages, which may be alleged as a result of this Commitment Letter or the Facility contemplated hereby. 2

7. Miscellaneous. (a) By ABFS's execution and delivery below, ABFS hereby represents, warrants, covenants and agrees that: (i) it has the power and authority to enter into this Commitment Letter; (ii) no other party has a right of refusal or other option which could cause the Facility not to be consummated; and (iii) neither ABFS nor any of their affiliates or principals have been a party to any bankruptcy, insolvency or similar proceedings. (b) ABFS will have no right to assign this Commitment Letter or any of its rights or obligations hereunder. (c) This Commitment Letter shall be governed by and construed and interpreted in accordance with the internal laws of the State of New York. Each party hereto hereby submits to the exclusive jurisdiction of the courts of the State of New York for any legal action or proceeding resulting from the transaction contemplated herein. (d) EACH PARTY HERETO HEREBY WAIVES ITS RIGHT TO A TRIAL BY JURY.

7. Miscellaneous. (a) By ABFS's execution and delivery below, ABFS hereby represents, warrants, covenants and agrees that: (i) it has the power and authority to enter into this Commitment Letter; (ii) no other party has a right of refusal or other option which could cause the Facility not to be consummated; and (iii) neither ABFS nor any of their affiliates or principals have been a party to any bankruptcy, insolvency or similar proceedings. (b) ABFS will have no right to assign this Commitment Letter or any of its rights or obligations hereunder. (c) This Commitment Letter shall be governed by and construed and interpreted in accordance with the internal laws of the State of New York. Each party hereto hereby submits to the exclusive jurisdiction of the courts of the State of New York for any legal action or proceeding resulting from the transaction contemplated herein. (d) EACH PARTY HERETO HEREBY WAIVES ITS RIGHT TO A TRIAL BY JURY. (e) This Commitment Letter is intended for the benefit of the parties hereto and their respective affiliates and not for the benefit of any third parties. (f) No amendment or modification to this Commitment Letter will be effective unless evidenced by a writing executed by all the parties hereto. (g) This Commitment Letter contains the entire agreement of the parties hereto in respect of the transactions contemplated hereby and all prior agreements, understandings and negotiations among or between such parties, whether oral or written, are superseded by the terms of this Commitment Letter. [SIGNATURES COMMENCE ON FOLLOWING PAGE] 3

Please indicate your agreement to the above by executing a copy of this Commitment Letter in the place provided below and returning a fully executed copy to the undersigned. This Commitment Letter shall not be effective unless executed by both JPM and ABFS on or prior to September 15, 2003 unless extended in writing by JPM in its sole discretion. Very truly yours, JP MORGAN CHASE BANK
By: /s/ Michael W. Nicholson ----------------------------------------Name: Michael W. Nicholson Title Senior Vice President

Agreed and Accepted as of this 14th day of August, 2003: AMERICAN BUSINESS FINANCIAL SERVICES, INC.
By: /s/ Stephen Giroux -----------------------------------------------Name: Stephen Giroux Title: Vice President and General Counsel

4

Please indicate your agreement to the above by executing a copy of this Commitment Letter in the place provided below and returning a fully executed copy to the undersigned. This Commitment Letter shall not be effective unless executed by both JPM and ABFS on or prior to September 15, 2003 unless extended in writing by JPM in its sole discretion. Very truly yours, JP MORGAN CHASE BANK
By: /s/ Michael W. Nicholson ----------------------------------------Name: Michael W. Nicholson Title Senior Vice President

Agreed and Accepted as of this 14th day of August, 2003: AMERICAN BUSINESS FINANCIAL SERVICES, INC.
By: /s/ Stephen Giroux -----------------------------------------------Name: Stephen Giroux Title: Vice President and General Counsel

4

Confidential [a Delaware business trust to be determined]. SUMMARY OF TERMS AND CONDITIONS This is a summary of indicative terms and conditions (the "Term Sheet") solely for discussion purposes. The Term Sheet is not a commitment by JPM to provide the Facility (as defined below). Any commitment will be in the form of a commitment letter, which may contain further or different terms from those set forth below, depending on the outcome of due diligence, the credit review process and negotiations with Borrower and Guarantor (as defined below). Borrower and Guarantor are advised to make an independent review and reach their own conclusions regarding the legal, tax and accounting aspects of the terms outlined herein. Subject to, among other things, satisfactory due diligence, credit approval, documents, filings and opinions acceptable to counsel, JPM would be prepared to consider providing the Facility on the indicative terms set forth herein.
BORROWER: SERVICER: A bankruptcy-remote Delaware business trust wholly owned by ABFS American Business Financial Services ("ABFS"). The Servicer is subject to renewal every 60 days by the Agent with a minimum of 30 days notice of termination.

PARTIAL GUARANTOR:

American Business Financial Services ("ABFS"). The Guarantor shall unconditionally guarantee 10% of the aggregate outstanding amount due under the Facility. JPMorgan Chase Bank

LENDER: COLLATERAL AGENT: FACILITY:

JPMorgan Chase Bank ("JPM") or ("Agent") $200,000,000 Secured, Mortgage Warehouse Facility (the "Facility" or "Total Facility Amount"). 364 days from closing.

MATURITY:

Confidential [a Delaware business trust to be determined]. SUMMARY OF TERMS AND CONDITIONS This is a summary of indicative terms and conditions (the "Term Sheet") solely for discussion purposes. The Term Sheet is not a commitment by JPM to provide the Facility (as defined below). Any commitment will be in the form of a commitment letter, which may contain further or different terms from those set forth below, depending on the outcome of due diligence, the credit review process and negotiations with Borrower and Guarantor (as defined below). Borrower and Guarantor are advised to make an independent review and reach their own conclusions regarding the legal, tax and accounting aspects of the terms outlined herein. Subject to, among other things, satisfactory due diligence, credit approval, documents, filings and opinions acceptable to counsel, JPM would be prepared to consider providing the Facility on the indicative terms set forth herein.
BORROWER: SERVICER: A bankruptcy-remote Delaware business trust wholly owned by ABFS American Business Financial Services ("ABFS"). The Servicer is subject to renewal every 60 days by the Agent with a minimum of 30 days notice of termination.

PARTIAL GUARANTOR:

American Business Financial Services ("ABFS"). The Guarantor shall unconditionally guarantee 10% of the aggregate outstanding amount due under the Facility. JPMorgan Chase Bank

LENDER: COLLATERAL AGENT: FACILITY:

JPMorgan Chase Bank ("JPM") or ("Agent") $200,000,000 Secured, Mortgage Warehouse Facility (the "Facility" or "Total Facility Amount"). 364 days from closing. To warehouse conforming and nonconforming first and second lien mortgage loans secured primarily by residential mortgages, for which the Collateral Agent has received documents until they are sold into the secondary market (whether through securitization or through direct cash sales to Investors). The amount available for Wet Sublimit is available to finance those mortgage loans which have closed and funded at or by title companies and whose documents are in transit to the Collateral Agent. Loan documents are to be delivered to the Collateral Agent within five business days. Once the loans have been received by the Collateral Agent, they will be moved from the Wet Sublimit to the regular warehouse line.

MATURITY: PURPOSE:

ELIGIBLE COLLATERAL:

GENERAL COLLATERAL RESTRICTIONS o o o No mortgage loan that is delinquent 60 days or more at any time will be included No mortgage loan that is delinquent 30 days or more, at the Original Pledge Date under this Facility, shall be included Each first lien mortgage loan has been pledged for 90 days or less from the Original Pledge Date, except for an aggregate amount not to exceed 10% of the Facility for up to 120 days from the Original Pledge Date Each second lien mortgage loan has been pledged for 60 days or less from the Original Pledge Date Each mortgage loan is covered by a forward loan purchase agreement. Notes or other material documents sent out for correction have been returned to the custody of the Collateral Agent within 10 Calendar days

o o o

[LOGO] JPMORGAN 1

Confidential

[a Delaware business trust to be determined].

-------------------------------------------------------------------------------o The Wet Sublimit will be limited to no more than 20% of the Facility Amount, with documents to be delivered to the Agent within five business days Total second lien mortgage loans will be limited to no more than 10% of the Facility Mobile Home loans shall be excluded Residential mortgage loans to affiliates, or to corporations, partnerships or any entity (other than natural persons) are not permitted No Mortgage Loan (a) is subject to Section 226.32 of Regulation Z or any similar state or local law (relating to high interest rate credit/lending transactions), or (b) contains any term or condition, or involves any loan origination practice, that has been defined as "predatory", "covered" or "threshold" under applicable federal, state or local law, or which has been expressly categorized as an "unfair" or "deceptive" term, condition, or practice in any applicable federal, state or local law (or the regulations promulgated thereunder). No mortgage loan will have a CLTV greater than 90%, except for an amount up to 5% of the Facility with a CLTV up to 95% CLTV for B credit grade loans cannot exceed 85% CLTV for C credit grade loans cannot exceed 80% Loans with a credit grade of less than C shall not be considered eligible collateral o Loans with a FICO score of less than 525 shall not be considered eligible collateral

o o o

o

o o o o

SPECIFIC COLLATERAL RESTRICTIONS Residential mortgage loans, subject to the following: o The minimum weighted average FICO score of 610 must be maintained o The maximum weighted average LTV is 83% for fixed rate mortgages and 85% for adjustable rate mortgages
Maximum Utilization % --------------------o Mortgage Loans delinquent in payment more than 30 days and less than 60 days are limited to Manufactured Housing loans (Agency eligible) up to $150,000 in principal C grade mortgage loans Jumbo mortgage loans (>$300,000 but not More than $500,000 principal balance) Super Jumbo mortgage loans (>$500,000 but not more than $1.5 million principal balance) Jumbo mortgage loans and Super Jumbo mortgage loans together in aggregate Mortgage loans with LTV >80%

5%

o

3% 15%

o o

15%

o

5%

o

15% 50%

o

Confidential

[a Delaware business trust to be determined].

-------------------------------------------------------------------------------o The Wet Sublimit will be limited to no more than 20% of the Facility Amount, with documents to be delivered to the Agent within five business days Total second lien mortgage loans will be limited to no more than 10% of the Facility Mobile Home loans shall be excluded Residential mortgage loans to affiliates, or to corporations, partnerships or any entity (other than natural persons) are not permitted No Mortgage Loan (a) is subject to Section 226.32 of Regulation Z or any similar state or local law (relating to high interest rate credit/lending transactions), or (b) contains any term or condition, or involves any loan origination practice, that has been defined as "predatory", "covered" or "threshold" under applicable federal, state or local law, or which has been expressly categorized as an "unfair" or "deceptive" term, condition, or practice in any applicable federal, state or local law (or the regulations promulgated thereunder). No mortgage loan will have a CLTV greater than 90%, except for an amount up to 5% of the Facility with a CLTV up to 95% CLTV for B credit grade loans cannot exceed 85% CLTV for C credit grade loans cannot exceed 80% Loans with a credit grade of less than C shall not be considered eligible collateral o Loans with a FICO score of less than 525 shall not be considered eligible collateral

o o o

o

o o o o

SPECIFIC COLLATERAL RESTRICTIONS Residential mortgage loans, subject to the following: o The minimum weighted average FICO score of 610 must be maintained o The maximum weighted average LTV is 83% for fixed rate mortgages and 85% for adjustable rate mortgages
Maximum Utilization % --------------------o Mortgage Loans delinquent in payment more than 30 days and less than 60 days are limited to Manufactured Housing loans (Agency eligible) up to $150,000 in principal C grade mortgage loans Jumbo mortgage loans (>$300,000 but not More than $500,000 principal balance) Super Jumbo mortgage loans (>$500,000 but not more than $1.5 million principal balance) Jumbo mortgage loans and Super Jumbo mortgage loans together in aggregate Mortgage loans with LTV >80%

5%

o

3% 15%

o o

15%

o

5%

o

15% 50%

o

ADVANCE
RATE: For all Fixed-Rate Eligible Assets other than second lien mortgage loans, 90% of the lesser of: (1) the net cash amount paid for the asset, (2) the unpaid principal amount

amount paid for the asset, (2) the unpaid principal amount of the underlying loan, or (3) market value.

[LOGO] JPMORGAN 2

Confidential

[a Delaware business trust to be determined].

-------------------------------------------------------------------------------For all Adjustable-Rate Eligible Assets other than second lien mortgage loans, 88% of the lesser of: (1) the net cash amount paid for the asset, (2) the unpaid principal amount of the underlying loan, or (3) market value. For all second lien mortgage loans, 75% of the lesser of: (1) the net cash amount paid for the loan, (2) the unpaid principal amount of the underlying loan, or (3) market value. FACILITY FEE: 0.75% per annum on the amount of the Commitment, payable in two equal installments (at closing and six months thereafter).

INTEREST RATES:

The pricing rate with respect to each transaction will be 30-day reserve-adjusted LIBOR, floating daily, plus 2.00%; Perfected first lien on all residential mortgage loans funded under the facility (including "Wet" loans), all rights and takeout commitments (including hedge instruments related to collateral securing this Facility), all sale proceeds related thereto, including an assignment of takeout commitments as well as a priority lien on all second lien loans, and all receivables related to servicing advances. Collateral may be released to an investor by the Agent (in its capacity as documents custodian) on a bailee letter or pursuant to a bailee agreement. All loans will be shipped directly to the permanent investors by the custodian. Collateral released on a bailee letter or pursuant to a bailee agreement shall not be outstanding beyond 45 days. All payments from investors must come directly to the Agent. Borrower will provide the Agent with a list of Investors for approval.

SECURITY:

CASH COLLATERAL ACCOUNT: All principal & interest received by ABFS as servicer will be segregated and kept in a separate account at JPMorgan Chase Bank. DOCUMENTATION: For each mortgage loan purchased: o ABFS will deliver to the Collateral Agent a Banking

Package comprised of: - The original executed note; - Recorded original (or if in the process of recordation a certified copy of the) Deed of Trust; - Originally executed and notarized assignment in blank, in recordable form, plus originals or recording-officer certified copies of any intervening assignments, if applicable; - Title Policy Commitment (or Title Insurance policy, if issued); - Power of Attorney, if applicable. o ABFS will hold, in trust for JPM: - Original casualty insurance policy; - Original appraisal; - Original assumption agreement, if any; - Buy-Down Agreement, if any; and - All other original documents.

Confidential

[a Delaware business trust to be determined].

-------------------------------------------------------------------------------For all Adjustable-Rate Eligible Assets other than second lien mortgage loans, 88% of the lesser of: (1) the net cash amount paid for the asset, (2) the unpaid principal amount of the underlying loan, or (3) market value. For all second lien mortgage loans, 75% of the lesser of: (1) the net cash amount paid for the loan, (2) the unpaid principal amount of the underlying loan, or (3) market value. FACILITY FEE: 0.75% per annum on the amount of the Commitment, payable in two equal installments (at closing and six months thereafter).

INTEREST RATES:

The pricing rate with respect to each transaction will be 30-day reserve-adjusted LIBOR, floating daily, plus 2.00%; Perfected first lien on all residential mortgage loans funded under the facility (including "Wet" loans), all rights and takeout commitments (including hedge instruments related to collateral securing this Facility), all sale proceeds related thereto, including an assignment of takeout commitments as well as a priority lien on all second lien loans, and all receivables related to servicing advances. Collateral may be released to an investor by the Agent (in its capacity as documents custodian) on a bailee letter or pursuant to a bailee agreement. All loans will be shipped directly to the permanent investors by the custodian. Collateral released on a bailee letter or pursuant to a bailee agreement shall not be outstanding beyond 45 days. All payments from investors must come directly to the Agent. Borrower will provide the Agent with a list of Investors for approval.

SECURITY:

CASH COLLATERAL ACCOUNT: All principal & interest received by ABFS as servicer will be segregated and kept in a separate account at JPMorgan Chase Bank. DOCUMENTATION: For each mortgage loan purchased: o ABFS will deliver to the Collateral Agent a Banking

Package comprised of: - The original executed note; - Recorded original (or if in the process of recordation a certified copy of the) Deed of Trust; - Originally executed and notarized assignment in blank, in recordable form, plus originals or recording-officer certified copies of any intervening assignments, if applicable; - Title Policy Commitment (or Title Insurance policy, if issued); - Power of Attorney, if applicable. o ABFS will hold, in trust for JPM: - Original casualty insurance policy; - Original appraisal; - Original assumption agreement, if any; - Buy-Down Agreement, if any; and - All other original documents. MANDATORY
PREPAYMENTS: Mandatory repurchases or the conveyance of additional appropriate Eligible Assets will be required in the amounts by which the amount outstanding under this facility exceeds 90% of the Market Value. Market value shall mean the value, determined in good faith by JPM in its sole good faith discretion, taking into account customary factors, such as market conditions and potential default of the Borrower or Guarantor. The Borrower or

Guarantor will repurchase eligible Assets that become ineligible for any reason upon request by the Purchaser or Agent. Representations and warranties from ABFS and Subsidiaries customary to the sale of mortgage loans will be assigned to Purchaser.

[LOGO] JPMORGAN 3

Confidential

[a Delaware business trust to be determined].

-------------------------------------------------------------------------------CONDITIONS PRECEDENT TO INITIAL BORROWING:

Usual for facilities and transactions of this nature, including but not limited to: 1) Execution and delivery of all documentation satisfactory to JPM and its counsel;

2) Absence of Default; 3) Accuracy of Representations and Warranties; 4) Legal opinion from counsel for ABFS satisfactory to JPM and its counsel; 5) Guarantor will have received additional warehouse line commitments of at least $200,000,000 for a 364 day period or more. CONDITIONS PRECEDENT TO ALL BORROWINGS: Customary, including, but not limited to: 1) All Representations and Warranties are true on and as of the date of the borrowing as though made on and as of such date; 2) No Event of Default, or event which with the giving of notice or lapse of time or both would be an Event of Default, has occurred and is continuing, or would result from such borrowing 3) A true sale opinion with respect to the sale of the Mortgage Loans by the Guarantor to the Borrower and a non-consolidation opinion with respect to the Guarantor on the one hand and the Borrower on the other hand, each in form and substance acceptable to JPM; 4) A favorable opinion of counsel from ABFS's counsel; and 5) This facility will not contravene any applicable law. REPRESENTATIONS
AND WARRANTIES: ABFS will make the customary Representations and Warranties at closing, including with respect to financial statements and other information furnished, no material adverse changes, litigation, compliance with laws (including ERISA and government agencies), insurance, taxes, properties and licenses.

EVENTS OF DEFAULT:

The credit agreement will contain customary default provisions appropriate in the context of the proposed

transaction, including but not limited to the following: o Failure to pay principal, interest or fees when due; o Failure to comply with any covenant of the credit agreement, the security agreement or any other loan document (subject to permitted grace period);

Confidential

[a Delaware business trust to be determined].

-------------------------------------------------------------------------------CONDITIONS PRECEDENT TO INITIAL BORROWING:

Usual for facilities and transactions of this nature, including but not limited to: 1) Execution and delivery of all documentation satisfactory to JPM and its counsel;

2) Absence of Default; 3) Accuracy of Representations and Warranties; 4) Legal opinion from counsel for ABFS satisfactory to JPM and its counsel; 5) Guarantor will have received additional warehouse line commitments of at least $200,000,000 for a 364 day period or more. CONDITIONS PRECEDENT TO ALL BORROWINGS: Customary, including, but not limited to: 1) All Representations and Warranties are true on and as of the date of the borrowing as though made on and as of such date; 2) No Event of Default, or event which with the giving of notice or lapse of time or both would be an Event of Default, has occurred and is continuing, or would result from such borrowing 3) A true sale opinion with respect to the sale of the Mortgage Loans by the Guarantor to the Borrower and a non-consolidation opinion with respect to the Guarantor on the one hand and the Borrower on the other hand, each in form and substance acceptable to JPM; 4) A favorable opinion of counsel from ABFS's counsel; and 5) This facility will not contravene any applicable law. REPRESENTATIONS
AND WARRANTIES: ABFS will make the customary Representations and Warranties at closing, including with respect to financial statements and other information furnished, no material adverse changes, litigation, compliance with laws (including ERISA and government agencies), insurance, taxes, properties and licenses.

EVENTS OF DEFAULT:

The credit agreement will contain customary default provisions appropriate in the context of the proposed

transaction, including but not limited to the following: o Failure to pay principal, interest or fees when due; o Failure to comply with any covenant of the credit agreement, the security agreement or any other loan document (subject to permitted grace period); o Material breach of any Representation or Warranty in the credit agreement or any other loan document delivered to the Agent or any Lender; o Bankruptcy or insolvency of the Borrower or Guarantor; o Material change in the executive management of the Guarantor; o Failure of the Borrower or Guarantor to pay any debt when due, or upon the acceleration of such indebtedness, or upon a default under or in respect of such indebtedness which would, with or without the giving of notice or lapse of time or both, permit its acceleration;

o Guarantor shall have closed the credit facilities described as a Condition Precedent To Initial Borrowing within 60 days from the closing of this Facility.

[LOGO] JPMORGAN 4

COVENANTS APPLICABLE TO THE SERVICER AND

PARTIAL GUARANTOR: General: o Provision of Financial Statements, including monthly company prepared financial statements and an annual audited consolidated statement on ABFS and subsidiaries. This provision will include monthly, quarterly, and annual financial statements on the Borrower, [Delaware business trust to be named]. Annual audited consolidated statements will include an unaudited consolidating balance sheet and income statement audited by an independent public accounting firm. o Provision of supplementary financial disclosures acceptable to JPMorgan, including a quarterly company prepared cash flow statement, monthly detailed repurchase activity report, and a monthly residual interest summary report. o Provision of residual evaluation information quarterly in a format acceptable to the Agent; o No mergers or acquisitions in which the corporate structure of the Borrower or Guarantor or Servicer does not remain intact or the Borrower is not the surviving entity; o No additional debt except as permitted by the Credit Agreement. Financial: (As measured on a consolidated basis) 1) ABFS will maintain a Minimum GAAP Net Worth of $36MM. GAAP Net Worth will be defined as Total Assets minus Total Liabilities. 2) ABFS will maintain a Minimum Adjusted Tangible Net Worth of $300MM. Adjusted Tangible Net Worth will be defined as GAAP Net Worth minus advances to affiliates and intangibles, plus Subordinated Debt with a maturity greater than one year and (plus or minus) net unrealized holding losses or gains, if any, on available-forsale debt securities as required by FASB 115. 3) Total Liabilities to GAAP Net Worth plus subordinated debt with a maturity date beyond the maturity of this Facility will not exceed 4.0 to 1.0. 4) ABFS will maintain, at all times, minimum liquidity of $25MM in the form of unrestricted cash or cash equivalents; 5) ABFS will maintain a minimum subordinated debt level of $500MM and at no time will the amount of subordinated debt maturing within one year exceed 65% of the total outstanding subordinated debt amount; 6) The book value of repurchased assets shall not exceed 1.5% of ABFS' owned and managed servicing portfolio at any time. 7) ABFS must maintain a Total Delinquency Rate of less than 9.75% of the Company's owned and managed portfolio. 8) Any trigger event that ABFS elects not to cure that interrupts cash flow from any securitization trust and that continues for 90 days shall constitute an event of default.

COVENANTS APPLICABLE TO THE SERVICER AND

PARTIAL GUARANTOR: General: o Provision of Financial Statements, including monthly company prepared financial statements and an annual audited consolidated statement on ABFS and subsidiaries. This provision will include monthly, quarterly, and annual financial statements on the Borrower, [Delaware business trust to be named]. Annual audited consolidated statements will include an unaudited consolidating balance sheet and income statement audited by an independent public accounting firm. o Provision of supplementary financial disclosures acceptable to JPMorgan, including a quarterly company prepared cash flow statement, monthly detailed repurchase activity report, and a monthly residual interest summary report. o Provision of residual evaluation information quarterly in a format acceptable to the Agent; o No mergers or acquisitions in which the corporate structure of the Borrower or Guarantor or Servicer does not remain intact or the Borrower is not the surviving entity; o No additional debt except as permitted by the Credit Agreement. Financial: (As measured on a consolidated basis) 1) ABFS will maintain a Minimum GAAP Net Worth of $36MM. GAAP Net Worth will be defined as Total Assets minus Total Liabilities. 2) ABFS will maintain a Minimum Adjusted Tangible Net Worth of $300MM. Adjusted Tangible Net Worth will be defined as GAAP Net Worth minus advances to affiliates and intangibles, plus Subordinated Debt with a maturity greater than one year and (plus or minus) net unrealized holding losses or gains, if any, on available-forsale debt securities as required by FASB 115. 3) Total Liabilities to GAAP Net Worth plus subordinated debt with a maturity date beyond the maturity of this Facility will not exceed 4.0 to 1.0. 4) ABFS will maintain, at all times, minimum liquidity of $25MM in the form of unrestricted cash or cash equivalents; 5) ABFS will maintain a minimum subordinated debt level of $500MM and at no time will the amount of subordinated debt maturing within one year exceed 65% of the total outstanding subordinated debt amount; 6) The book value of repurchased assets shall not exceed 1.5% of ABFS' owned and managed servicing portfolio at any time. 7) ABFS must maintain a Total Delinquency Rate of less than 9.75% of the Company's owned and managed portfolio. 8) Any trigger event that ABFS elects not to cure that interrupts cash flow from any securitization trust and that continues for 90 days shall constitute an event of default. 9) Aggregate cash flow from all securitization trusts shall be greater than the average of the actual cash flow from the immediately preceding four quarters.

[LOGO] JPMORGAN 5

10)

Dividends will be permitted to the extent that no event of default exists or the payment of the dividend will not create an event of default.

INDEMNIFICATION:

ABFS will indemnify JPM against all losses, liabilities, claims, damages or expenses relating to their loans, the commitments and the credit agreement due to willful misconduct or gross negligence by ABFS or subsidiaries. All payments to be free of all deductions, set-offs, counterclaims and withholding taxes.

LEGAL EXPENSES:

ABFS shall be responsible for any and all legal fees, due diligence and other out-of pocket costs incurred by JPM in setting up and administering the Facility (whether or not the Facility is consummated). State of New York

GOVERNING LAW:

[LOGO] JPMORGAN 6

EXECUTION COPY MORTGAGE LOAN PURCHASE AND INTERIM SERVICING AGREEMENT DLJ MORTGAGE CAPITAL, INC. Initial Purchaser AMERICAN BUSINESS CREDIT, INC. Seller and Servicer HOMEAMERICAN CREDIT, INC. D/B/A UPLAND MORTGAGE Seller AMERICAN BUSINESS MORTGAGE SERVICES, INC. Seller Dated as of July 22, 2003 Fixed Rate Mortgage Loans

MORTGAGE LOAN PURCHASE AND INTERIM SERVICING AGREEMENT This is a MORTGAGE LOAN PURCHASE AND INTERIM SERVICING AGREEMENT (the "Agreement"), dated as of July 22, 2003, by and among DLJ Mortgage Capital, Inc., as initial purchaser (in such capacity, the "Initial Purchaser," and the Initial Purchaser or the Person, if any, to which the Initial Purchaser assigns its rights and obligations hereunder as Purchaser with respect to a Mortgage Loan, and each of their respective successors and assigns, the "Purchaser"), American Business Credit, Inc. ("ABC"), as a seller (in such capacity, a "Seller") and as servicer (in such capacity, the "Servicer"), HomeAmerican Credit, Inc., doing business as Upland Mortgage ("Upland"), as a seller (in such capacity, a "Seller") and American Business Mortgage Services, Inc. ("ABMS"), as a seller (in such capacity, a "Seller" and, together with ABC and Upland, the "Sellers").

10)

Dividends will be permitted to the extent that no event of default exists or the payment of the dividend will not create an event of default.

INDEMNIFICATION:

ABFS will indemnify JPM against all losses, liabilities, claims, damages or expenses relating to their loans, the commitments and the credit agreement due to willful misconduct or gross negligence by ABFS or subsidiaries. All payments to be free of all deductions, set-offs, counterclaims and withholding taxes.

LEGAL EXPENSES:

ABFS shall be responsible for any and all legal fees, due diligence and other out-of pocket costs incurred by JPM in setting up and administering the Facility (whether or not the Facility is consummated). State of New York

GOVERNING LAW:

[LOGO] JPMORGAN 6

EXECUTION COPY MORTGAGE LOAN PURCHASE AND INTERIM SERVICING AGREEMENT DLJ MORTGAGE CAPITAL, INC. Initial Purchaser AMERICAN BUSINESS CREDIT, INC. Seller and Servicer HOMEAMERICAN CREDIT, INC. D/B/A UPLAND MORTGAGE Seller AMERICAN BUSINESS MORTGAGE SERVICES, INC. Seller Dated as of July 22, 2003 Fixed Rate Mortgage Loans

MORTGAGE LOAN PURCHASE AND INTERIM SERVICING AGREEMENT This is a MORTGAGE LOAN PURCHASE AND INTERIM SERVICING AGREEMENT (the "Agreement"), dated as of July 22, 2003, by and among DLJ Mortgage Capital, Inc., as initial purchaser (in such capacity, the "Initial Purchaser," and the Initial Purchaser or the Person, if any, to which the Initial Purchaser assigns its rights and obligations hereunder as Purchaser with respect to a Mortgage Loan, and each of their respective successors and assigns, the "Purchaser"), American Business Credit, Inc. ("ABC"), as a seller (in such capacity, a "Seller") and as servicer (in such capacity, the "Servicer"), HomeAmerican Credit, Inc., doing business as Upland Mortgage ("Upland"), as a seller (in such capacity, a "Seller") and American Business Mortgage Services, Inc. ("ABMS"), as a seller (in such capacity, a "Seller" and, together with ABC and Upland, the "Sellers").

EXECUTION COPY MORTGAGE LOAN PURCHASE AND INTERIM SERVICING AGREEMENT DLJ MORTGAGE CAPITAL, INC. Initial Purchaser AMERICAN BUSINESS CREDIT, INC. Seller and Servicer HOMEAMERICAN CREDIT, INC. D/B/A UPLAND MORTGAGE Seller AMERICAN BUSINESS MORTGAGE SERVICES, INC. Seller Dated as of July 22, 2003 Fixed Rate Mortgage Loans

MORTGAGE LOAN PURCHASE AND INTERIM SERVICING AGREEMENT This is a MORTGAGE LOAN PURCHASE AND INTERIM SERVICING AGREEMENT (the "Agreement"), dated as of July 22, 2003, by and among DLJ Mortgage Capital, Inc., as initial purchaser (in such capacity, the "Initial Purchaser," and the Initial Purchaser or the Person, if any, to which the Initial Purchaser assigns its rights and obligations hereunder as Purchaser with respect to a Mortgage Loan, and each of their respective successors and assigns, the "Purchaser"), American Business Credit, Inc. ("ABC"), as a seller (in such capacity, a "Seller") and as servicer (in such capacity, the "Servicer"), HomeAmerican Credit, Inc., doing business as Upland Mortgage ("Upland"), as a seller (in such capacity, a "Seller") and American Business Mortgage Services, Inc. ("ABMS"), as a seller (in such capacity, a "Seller" and, together with ABC and Upland, the "Sellers"). WITNESSETH: WHEREAS, the Sellers desire to sell to the Purchaser, and the Purchaser desires to purchase from the Sellers, certain fixed rate residential first lien and second lien mortgage loans (the "Mortgage Loans"), including the right to any Prepayment Charges payable by the related mortgagors in connection with any principal prepayments on the Mortgage Loans, which are serviced by the Servicer as described herein on a servicing-released basis, and which shall be delivered as whole loans as provided herein (with respect to the Mortgage Loans purchased on any such date, the related "Closing Date"); WHEREAS, each Mortgage Loan is secured by a mortgage, deed of trust or other security instrument creating a first or second lien on a residential dwelling located in the jurisdiction indicated on the Mortgage Loan Schedule, which is to be annexed hereto on the related Closing Date as Schedule I; WHEREAS, the Purchaser, the Sellers and the Servicer wish to prescribe the manner of the conveyance, servicing and control of the Mortgage Loans; and WHEREAS, following its purchase of the Mortgage Loans from the Sellers, the Purchaser desires to sell some or all of the Mortgage Loans to one or more purchasers in one or more whole loan transfers or in one or more public or private mortgage-backed securities transactions; NOW, THEREFORE, in consideration of the premises and mutual agreements set forth herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Purchaser,

MORTGAGE LOAN PURCHASE AND INTERIM SERVICING AGREEMENT This is a MORTGAGE LOAN PURCHASE AND INTERIM SERVICING AGREEMENT (the "Agreement"), dated as of July 22, 2003, by and among DLJ Mortgage Capital, Inc., as initial purchaser (in such capacity, the "Initial Purchaser," and the Initial Purchaser or the Person, if any, to which the Initial Purchaser assigns its rights and obligations hereunder as Purchaser with respect to a Mortgage Loan, and each of their respective successors and assigns, the "Purchaser"), American Business Credit, Inc. ("ABC"), as a seller (in such capacity, a "Seller") and as servicer (in such capacity, the "Servicer"), HomeAmerican Credit, Inc., doing business as Upland Mortgage ("Upland"), as a seller (in such capacity, a "Seller") and American Business Mortgage Services, Inc. ("ABMS"), as a seller (in such capacity, a "Seller" and, together with ABC and Upland, the "Sellers"). WITNESSETH: WHEREAS, the Sellers desire to sell to the Purchaser, and the Purchaser desires to purchase from the Sellers, certain fixed rate residential first lien and second lien mortgage loans (the "Mortgage Loans"), including the right to any Prepayment Charges payable by the related mortgagors in connection with any principal prepayments on the Mortgage Loans, which are serviced by the Servicer as described herein on a servicing-released basis, and which shall be delivered as whole loans as provided herein (with respect to the Mortgage Loans purchased on any such date, the related "Closing Date"); WHEREAS, each Mortgage Loan is secured by a mortgage, deed of trust or other security instrument creating a first or second lien on a residential dwelling located in the jurisdiction indicated on the Mortgage Loan Schedule, which is to be annexed hereto on the related Closing Date as Schedule I; WHEREAS, the Purchaser, the Sellers and the Servicer wish to prescribe the manner of the conveyance, servicing and control of the Mortgage Loans; and WHEREAS, following its purchase of the Mortgage Loans from the Sellers, the Purchaser desires to sell some or all of the Mortgage Loans to one or more purchasers in one or more whole loan transfers or in one or more public or private mortgage-backed securities transactions; NOW, THEREFORE, in consideration of the premises and mutual agreements set forth herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Purchaser, the Sellers and the Servicer agree as follows: 1. Definitions. For purposes of this Agreement the following capitalized terms shall have the respective meanings set forth below. Accepted Servicing Practices: As defined in the Servicing Addendum. Agreement: This Mortgage Loan Purchase and Interim Servicing Agreement including all exhibits, schedules, amendments and supplements hereto.

Ancillary Income: All income derived from the Mortgage Loans, other than interest, principal, and Prepayment Charges collected, including but not limited to, fees received with respect to late charges, checks or bank drafts returned by the related bank for non-sufficient funds, assumption fees (subject to Subsection 11.19 hereof), and all other incidental fees and charges. The Servicer shall retain all Ancillary Income. Appraised Value: With respect to any Mortgaged Property, the lesser of (i) the lesser of (a) the value thereof as determined by an appraisal made for the originator of the Mortgage Loan at the time of origination of the Mortgage Loan by a licensed appraiser and (b) the value thereof as determined by a review appraisal conducted by the Servicer in the event any such review appraisal determines an appraised value ten percent or more lower than the value thereof as determined by the appraisal referred to in clause (i)(a) above, and (ii) the purchase price paid for the related Mortgaged Property by the Mortgagor with the proceeds of the Mortgage Loan, provided, however, (1) in the case of a Refinanced Mortgage Loan, such value of the

Ancillary Income: All income derived from the Mortgage Loans, other than interest, principal, and Prepayment Charges collected, including but not limited to, fees received with respect to late charges, checks or bank drafts returned by the related bank for non-sufficient funds, assumption fees (subject to Subsection 11.19 hereof), and all other incidental fees and charges. The Servicer shall retain all Ancillary Income. Appraised Value: With respect to any Mortgaged Property, the lesser of (i) the lesser of (a) the value thereof as determined by an appraisal made for the originator of the Mortgage Loan at the time of origination of the Mortgage Loan by a licensed appraiser and (b) the value thereof as determined by a review appraisal conducted by the Servicer in the event any such review appraisal determines an appraised value ten percent or more lower than the value thereof as determined by the appraisal referred to in clause (i)(a) above, and (ii) the purchase price paid for the related Mortgaged Property by the Mortgagor with the proceeds of the Mortgage Loan, provided, however, (1) in the case of a Refinanced Mortgage Loan, such value of the Mortgaged Property is based solely upon the lesser of (i) the value determined by an appraisal made for the originator of such Refinanced Mortgage Loan at the time of origination of such Refinanced Mortgage Loan by a licensed appraiser and (ii) the value thereof as determined by a review appraisal conducted by the Servicer in the event any such review appraisal determines an appraised value ten percent or more lower than the value thereof as determined by the appraisal referred to in clause (ii)(a)(i) above and (2) in the case of a Mortgage Loan originated in connection with a "lease-option purchase," such value of the Mortgaged Property is based on the lower of the value determined by an appraisal made for the originator of such Mortgage Loan at the time of origination or the sale price of such Mortgaged Property if the "lease option purchase price" was set less than 12 months prior to origination, and is based on the value determined by an appraisal made for the originator of such Mortgage Loan at the time of origination if the "lease option purchase price" was set 12 months or more prior to origination. Assignment of Mortgage: An individual assignment of the Mortgage, notice of transfer or equivalent instrument in recordable form, sufficient under the laws of the jurisdiction wherein the related Mortgaged Property is located to give record notice of the sale of the Mortgage to the Purchaser. Bankruptcy Act: The Bankruptcy Reform Act of 1978, as amended (Title 11 of the United States Code). BIF: The Bank Insurance Fund, or any successor thereto. Business Day: Any day other than a Saturday or Sunday, or a day on which banking and savings and loan institutions in the State of California or the State of New York are authorized or obligated by law or executive order to be closed. Cash-Out Refinancing: A Refinanced Mortgage Loan, the proceeds of which were more than $1,000 in excess of the principal balance of an existing first mortgage on the related Mortgaged Property, the principal balance of any existing subordinate mortgages on the related Mortgaged Property and related closing costs, and were used to satisfy such existing first mortgage, any such subordinate mortgages, to pay related closing costs and to provide to the mortgagor more than $1,000 in addition thereto. 2

Certificate Insurer: The certificate insurer as shall be designated by the Purchaser in connection with any Reconstitution Agreement. Certificates: The certificates issued in connection with any Reconstitution Agreement on the related Reconstitution Date as provided in Section 12 hereof. Closing Date: With respect to each Mortgage Loan, the date on which the Purchaser shall purchase and the related Seller shall sell to the Purchaser such Mortgage Loan together with such other Mortgage Loans as shall be listed on the related Mortgage Loan Schedule. The Closing Date for any Mortgage Loan shall in no event be later than August 10, 2003. Closing Documents: The documents required pursuant to Section 9.

Certificate Insurer: The certificate insurer as shall be designated by the Purchaser in connection with any Reconstitution Agreement. Certificates: The certificates issued in connection with any Reconstitution Agreement on the related Reconstitution Date as provided in Section 12 hereof. Closing Date: With respect to each Mortgage Loan, the date on which the Purchaser shall purchase and the related Seller shall sell to the Purchaser such Mortgage Loan together with such other Mortgage Loans as shall be listed on the related Mortgage Loan Schedule. The Closing Date for any Mortgage Loan shall in no event be later than August 10, 2003. Closing Documents: The documents required pursuant to Section 9. Code: The Internal Revenue Code of 1986, or any successor statute thereto. Combined Loan-to-Value Ratio or CLTV: As of any date and Mortgage Loan which is secured by a Mortgaged Property which also secures the repayment of a subordinated second mortgage loan, the fraction, expressed as a percentage, the numerator of which is the sum of (a) the original principal balance of the Mortgage Loan, plus (b) the unpaid principal balance of any second mortgage loan secured by the Mortgaged Property as of such date, and the denominator of which is the Appraised Value of the related Mortgaged Property; as of any date and Mortgage Loan which is secured by a Mortgaged Property which does not also secure the repayment of a subordinated second mortgage loan, the Loan-to-Value Ratio. Commitment Letter: With respect to each Mortgage Loan, the related letter agreement dated July 1, 2003 between the Purchaser and the Sellers (including any exhibits, schedules and attachments thereto) and attached hereto as Exhibit 9. Condemnation Proceeds: All awards, compensation and settlements in respect of a taking of all or part of a Mortgaged Property by exercise of the power of condemnation or the right of eminent domain. Custodial Account: The separate account or accounts, each of which shall be an Eligible Account, created and maintained pursuant to this Agreement, which shall be entitled "American Business Credit, Inc., as custodian for the Purchaser, First and Second Lien Fixed Rate Mortgage Loans" or such other title as shall be acceptable to the Purchaser. Custodial Agreement: The custodial agreement dated as of July 1, 2003 among the Initial Purchaser, the Sellers and the Custodian, governing the retention of the originals of each Mortgage Note, Mortgage, Assignment of Mortgage and other Mortgage Loan Documents, a form of which agreement is annexed hereto as Exhibit 6 or any other custodial agreement among a custodian, the Sellers and the Initial Purchaser pursuant to which such custodian is to hold any of the documents or instruments referred to above as agent for the Initial Purchaser. Custodian: A custodian that is appointed pursuant to a Custodial Agreement or its successor in interest or assigns, any successor to the Custodian under the Custodial Agreement, as therein provided. The initial Custodian shall be JPMorgan Chase Bank. 3

Cut-off Date: With respect to each Mortgage Loan (other than a Qualified Substitute Mortgage Loan), the later of (i) the last day of the month immediately preceding the month in which the related Closing Date with respect to such Mortgage Loan occurs and (ii) the origination date of the related Mortgage Loan, and with respect to each Qualified Substitute Mortgage Loan, its date of substitution. Deleted Mortgage Loan: A Mortgage Loan rejected by the Purchaser or a Mortgage Loan replaced or to be replaced by a Qualified Substitute Mortgage Loan. Determination Date: With respect to each Distribution Date, the tenth

Cut-off Date: With respect to each Mortgage Loan (other than a Qualified Substitute Mortgage Loan), the later of (i) the last day of the month immediately preceding the month in which the related Closing Date with respect to such Mortgage Loan occurs and (ii) the origination date of the related Mortgage Loan, and with respect to each Qualified Substitute Mortgage Loan, its date of substitution. Deleted Mortgage Loan: A Mortgage Loan rejected by the Purchaser or a Mortgage Loan replaced or to be replaced by a Qualified Substitute Mortgage Loan. Determination Date: With respect to each Distribution Date, the tenth (10th) day of the calendar month in which such Distribution Date occurs or, if such tenth (10th) day is not a Business Day, the Business Day immediately preceding such tenth (10th) day. Distribution Date: The fifteenth (15th) day of each month, commencing on the fifteenth (15th) day of the month next following the month in which the related Cut-off Date occurs, or if such fifteenth (15th) day is not a Business Day, the first Business Day immediately following such fifteenth (15th) day. Due Date: With respect to each Mortgage Loan and any Distribution Date, the date on which Monthly Payments on such Mortgage Loan are due which is either the first day of the month of such Distribution Date, or if Monthly Payments on such Mortgage Loan are due on a day other than the first day of the month, the date in the calendar month immediately preceding the Distribution Date on which such Monthly Payments are due, exclusive of any days of grace. Due Period: With respect to each Distribution Date, the period commencing on the first day of the month preceding the month of the Distribution Date and ending on the last day of the month of the preceding the month of the Distribution Date. Eligible Account: Either (i) an account or accounts maintained with a federal or state chartered depository institution or trust company the short-term unsecured debt obligations of which (or, in the case of a depository institution or trust company that is the principal subsidiary of a holding company, the short-term unsecured debt obligations of such holding company) are rated A-1 by S&P or Prime-1 by Moody's (or a comparable rating if another rating agency is specified by the Initial Purchaser by written notice to each Seller) at the time any amounts are held on deposit therein, (ii) an account or accounts the deposits in which are fully insured by the FDIC to the full extent permitted or (iii) a trust account or accounts maintained with a federal or state chartered depository institution or trust company acting in its fiduciary capacity. Eligible Accounts may bear interest. Escrow Account: The separate trust account or accounts created and maintained pursuant to this Agreement which shall be entitled "American Business Credit, Inc., as Servicer, in trust for the Purchaser and various Mortgagors, Fixed Rate Mortgage Loans" or such other title as shall be acceptable to the Purchaser. Escrow Payments: The amounts constituting ground rents, taxes, assessments, water charges, sewer rents, Primary Insurance Policy premiums (if any), fire and hazard insurance premiums and other payments required to be escrowed by the Mortgagor with the Mortgagee pursuant to the terms of any Mortgage Note or Mortgage. 4

Event of Default: Any one of the events enumerated in Subsection 14.01. Fair Credit Reporting Act: 15 U.S.C.ss.ss.1681 et seq. Fannie Mae: Fannie Mae, formerly known as Federal National Mortgage Association ("FNMA") or any successor thereto. FDIC: The Federal Deposit Insurance Corporation or any successor thereto. Final Recovery Determination: With respect to any defaulted Mortgage Loan or any REO Property (other than a Mortgage Loan or REO Property purchased by the Servicer), a determination made by the Servicer that all Condemnation Proceeds, Insurance Proceeds, Liquidation Proceeds and other payments or recoveries which the

Event of Default: Any one of the events enumerated in Subsection 14.01. Fair Credit Reporting Act: 15 U.S.C.ss.ss.1681 et seq. Fannie Mae: Fannie Mae, formerly known as Federal National Mortgage Association ("FNMA") or any successor thereto. FDIC: The Federal Deposit Insurance Corporation or any successor thereto. Final Recovery Determination: With respect to any defaulted Mortgage Loan or any REO Property (other than a Mortgage Loan or REO Property purchased by the Servicer), a determination made by the Servicer that all Condemnation Proceeds, Insurance Proceeds, Liquidation Proceeds and other payments or recoveries which the Servicer, in its reasonable good faith judgment, expects to be finally recoverable in respect thereof have been so recovered. The Servicer shall maintain records, prepared by a servicing officer of the Servicer, of each Final Recovery Determination. First Lien: With respect to any second lien Mortgage Loan, the mortgage loan relating to the corresponding Mortgaged Property having a first priority lien. First Payment Default Loan: Any Mortgage Loan for which the related Mortgagor does not make the contractual first payment within 30 days of its due date or the related Mortgagor does not make the first contractual payment after such Mortgage Loan is owned by the Initial Purchaser within 30 days of its due date. For example, if a Mortgagor of a Mortgage Loan fails to make the June 2003 payment, July 2003 payment or the August 2003 payment within 30 days of its due date, that Mortgage Loan qualifies as a First Payment Default Loan. Fitch: Fitch Ratings, or its successor in interest. Fixed Rate Mortgage Loan: A Mortgage Loan with respect to which the Mortgage Interest Rate is fixed for the life of such Mortgage Loan. Freddie Mac: Freddie Mac, formerly known as Federal Home Loan Mortgage Corporation ("FHLMC") or any successor thereto. Holdback Amount: The amount due to be paid by the Purchaser to the related Seller pursuant to the Commitment Letter upon delivery to the Seller or its Custodian Assignments of Mortgage in blank in recordable form for each of the Mortgage Loans sold by such Seller to the Purchaser. HUD: The United States Department of Housing and Urban Development or any successor thereto. Initial Purchaser: DLJ Mortgage Capital, Inc., or its successor thereto. Insurance Proceeds: With respect to each Mortgage Loan, proceeds of insurance policies insuring the Mortgage Loan or the related Mortgaged Property to the extent such proceeds are not applied to the restoration of the related Mortgaged Property or released to the related Mortgagor. 5

Interim Servicing Period: With respect to any Mortgage Loan, the period commencing on the related Closing Date and ending not later than the close of business on October 1, 2003, or such other date, earlier or later, as specified in a written notice from the Purchaser to each Seller and the Servicer. Liquidation Event: With respect to any Mortgage Loan or REO Property, any of the following events: (i) a Final Recovery Determination is made as to such Mortgage Loan or REO Property; (ii) such Mortgage Loan or REO Property is removed from this Agreement by reason of its being repurchased, sold or replaced pursuant to or as contemplated by any provision of this Agreement; or (iii) such Mortgage Loan is paid in full. Liquidation Proceeds: Amounts, other than Insurance Proceeds and Condemnation Proceeds, received in

Interim Servicing Period: With respect to any Mortgage Loan, the period commencing on the related Closing Date and ending not later than the close of business on October 1, 2003, or such other date, earlier or later, as specified in a written notice from the Purchaser to each Seller and the Servicer. Liquidation Event: With respect to any Mortgage Loan or REO Property, any of the following events: (i) a Final Recovery Determination is made as to such Mortgage Loan or REO Property; (ii) such Mortgage Loan or REO Property is removed from this Agreement by reason of its being repurchased, sold or replaced pursuant to or as contemplated by any provision of this Agreement; or (iii) such Mortgage Loan is paid in full. Liquidation Proceeds: Amounts, other than Insurance Proceeds and Condemnation Proceeds, received in connection with the liquidation of a defaulted Mortgage Loan through trustee's sale, foreclosure sale or otherwise, other than amounts received following the acquisition of REO Property. Loan-to-Value Ratio or LTV: With respect to any Mortgage Loan as of any date of determination, the ratio on such date of the outstanding principal amount of such Mortgage Loan, to the Appraised Value of the related Mortgaged Property. Monthly Payment: With respect to any Mortgage Loan, the scheduled combined payment of principal and interest payable by a Mortgagor under the related Mortgage Note on each Due Date. Moody's: Moody's Investors Service, Inc. or its successor in interest. Mortgage: The mortgage, deed of trust or other instrument creating a first or second lien on Mortgaged Property securing the Mortgage Note. Mortgage File: The items pertaining to a particular Mortgage Loan referred to in Exhibit 5 annexed hereto, and any additional documents required to be added to the Mortgage File pursuant to this Agreement or the Commitment Letter. Mortgage Interest Rate: The annual rate of interest borne on a Mortgage Note with respect to each Mortgage Loan as set forth in the related Mortgage Loan and the Mortgage Loan Schedule. Mortgage Loan: Each Mortgage Loan sold, assigned and transferred to the Purchaser pursuant to this Agreement and the Commitment Letter and identified on the Mortgage Loan Schedule annexed to this Agreement on the related Closing Date, which Mortgage Loan includes without limitation the related Mortgage File, the Monthly Payments, Principal Prepayments, Prepayment Charges, Liquidation Proceeds, Condemnation Proceeds, Insurance Proceeds, REO Disposition proceeds, and all other rights, benefits, proceeds and obligations arising from or in connection with such Mortgage Loan. 6

Mortgage Loan Documents: The documents listed in Section 2 of the Custodial Agreement pertaining to the related Mortgage Loan. Mortgage Loan Remittance Rate: With respect to each Mortgage Loan, the annual rate of interest remitted to the Purchaser, which shall be equal to the related Mortgage Interest Rate. Mortgage Loan Schedule: The schedule of Mortgage Loans to be annexed hereto as Schedule I on the related Closing Date for the Mortgage Loans delivered on that Closing Date, in both hard copy and "read only" electronic format, such schedule setting forth the following information with respect to each such Mortgage Loan: (1) the related Seller's Mortgage Loan identifying number; (2) the Mortgagor's name; (3) the street address of the Mortgaged Property including the state and zip code; (4) a code indicating whether the Mortgaged Property is owner-occupied; (5) the type of Residential Dwelling constituting the Mortgaged Property; (6) the Loan-toValue Ratio or Combined Loan-to-Value Ratio, as applicable, at origination; (7) the Mortgage Interest Rate in effect as of the related Cut-off Date; (8) the stated maturity date of the Mortgage Loan and, if such Mortgage Loan is a second lien Mortgage Loan, the stated maturity date of the related First Lien; (9) the amount of the Monthly Payment at origination; (10) the amount of the Monthly Payment as of the related Cut-off Date; (11) the

Mortgage Loan Documents: The documents listed in Section 2 of the Custodial Agreement pertaining to the related Mortgage Loan. Mortgage Loan Remittance Rate: With respect to each Mortgage Loan, the annual rate of interest remitted to the Purchaser, which shall be equal to the related Mortgage Interest Rate. Mortgage Loan Schedule: The schedule of Mortgage Loans to be annexed hereto as Schedule I on the related Closing Date for the Mortgage Loans delivered on that Closing Date, in both hard copy and "read only" electronic format, such schedule setting forth the following information with respect to each such Mortgage Loan: (1) the related Seller's Mortgage Loan identifying number; (2) the Mortgagor's name; (3) the street address of the Mortgaged Property including the state and zip code; (4) a code indicating whether the Mortgaged Property is owner-occupied; (5) the type of Residential Dwelling constituting the Mortgaged Property; (6) the Loan-toValue Ratio or Combined Loan-to-Value Ratio, as applicable, at origination; (7) the Mortgage Interest Rate in effect as of the related Cut-off Date; (8) the stated maturity date of the Mortgage Loan and, if such Mortgage Loan is a second lien Mortgage Loan, the stated maturity date of the related First Lien; (9) the amount of the Monthly Payment at origination; (10) the amount of the Monthly Payment as of the related Cut-off Date; (11) the last Due Date on which a Monthly Payment was actually applied to the unpaid stated principal balance; (12) the original principal balance of the Mortgage Loan and, if such Mortgage Loan is a second lien Mortgage Loan, the original principal balance of the related First Lien, as of the date of origination; (13) the Stated Principal Balance of the Mortgage Loan and, if such Mortgage Loan is a second lien Mortgage Loan, the Stated Principal Balance of the related First Lien, as of the close of business on the related origination date; (14) a code indicating the purpose of the loan (i.e., purchase financing, Rate/Term Refinancing, Cash-Out Refinancing); (15) the Mortgage Interest Rate at origination; (16) a code indicating the documentation style (i.e., full, limited or stated); (17) the related Seller's risk grade; (18) the Appraised Value of the Mortgaged Property; (19) the sale price of the Mortgaged Property, if applicable; (20) on the Mortgage Loan Schedule in "read only" electronic format, the actual unpaid principal balance of the Mortgage Loan as of the related Cut-off Date; (21) the actual paid to date; (22) the number of years any prepayment penalty is in effect; (23) the loan type (e.g., fixed); (24) a code indicating whether the Mortgage Loan is a second lien Mortgage Loan. With respect to the Mortgage Loans in the aggregate, the Mortgage Loan Schedule shall set forth the following information, as of the related Cut-off Date: (1) the number of Mortgage Loans; (2) the Stated Principal Balance of the Mortgage Loans; (3) the weighted average Mortgage Interest Rate of the Mortgage Loans; and (4) the weighted average maturity of the Mortgage Loans. Mortgage Note: The original executed note or other evidence of the Mortgage Loan indebtedness of a Mortgagor. Mortgaged Property: The Mortgagor's real property securing repayment of a related Mortgage Note, consisting of a fee simple interest in a single parcel of real property improved by a Residential Dwelling. Mortgagee: The mortgagee or beneficiary named in the Mortgage and the successors and assigns of such mortgagee or beneficiary. 7

Mortgagor: The obligor on a Mortgage Note, the owner of the Mortgaged Property and the grantor or mortgagor named in the related Mortgage and such grantor's or mortgagor's successors in title to the Mortgaged Property. Nonrecoverable Servicing Advance: Any Servicing Advance previously made or proposed to be made in respect of a Mortgage Loan or REO Property that, in the good faith business judgment of the Servicer, will not, or, in the case of a proposed Servicing Advance, would not, be ultimately recoverable from related late payments, Condemnation Proceeds, Insurance Proceeds or Liquidation Proceeds on such Mortgage Loan or REO Property as provided herein. Officer's Certificate: A certificate signed by the Chairman of the Board or the Vice Chairman of the Board or a President or a Vice President and by the Treasurer or the Secretary or one of the Assistant Treasurers or Assistant Secretaries of the Person on behalf of whom such certificate is being delivered.

Mortgagor: The obligor on a Mortgage Note, the owner of the Mortgaged Property and the grantor or mortgagor named in the related Mortgage and such grantor's or mortgagor's successors in title to the Mortgaged Property. Nonrecoverable Servicing Advance: Any Servicing Advance previously made or proposed to be made in respect of a Mortgage Loan or REO Property that, in the good faith business judgment of the Servicer, will not, or, in the case of a proposed Servicing Advance, would not, be ultimately recoverable from related late payments, Condemnation Proceeds, Insurance Proceeds or Liquidation Proceeds on such Mortgage Loan or REO Property as provided herein. Officer's Certificate: A certificate signed by the Chairman of the Board or the Vice Chairman of the Board or a President or a Vice President and by the Treasurer or the Secretary or one of the Assistant Treasurers or Assistant Secretaries of the Person on behalf of whom such certificate is being delivered. Pass-Through Transfer: The sale or transfer of some or all of the Mortgage Loans by the Purchaser to a trust to be formed as part of a publicly issued or privately placed mortgage-backed securities transaction. Person: An individual, corporation, partnership, limited liability company, joint venture, association, joint stock company, trust, unincorporated organization or government or any agency or political subdivision thereof. Prepayment Charge: With respect to each Mortgage Loan, any prepayment penalty payable in connection with a Principal Prepayment on such Mortgage Loan made on or after the related Cut-off Date, transferred and assigned to the Purchaser pursuant to the terms of this Agreement and identified in the Mortgage Loan Schedule. Principal Prepayment: Any payment or other recovery of principal on a Mortgage Loan received in advance of its scheduled Due Date, including any prepayment penalty or premium thereon, which is not accompanied by an amount of interest representing scheduled interest due on any date or dates in any month or months subsequent to the month of prepayment. Prospectus and Prospectus Supplement: The prospectus and the prospectus supplement relating to the Certificates, if any. Purchase Price: The price paid on the related Closing Date by the Purchaser to the related Seller pursuant to the Commitment Letter in exchange for the Mortgage Loans purchased on such Closing Date as calculated as provided in Section 4. Qualified Substitute Mortgage Loan: A mortgage loan eligible to be substituted by a Seller for a Deleted Mortgage Loan, which must have the following qualities on the date of substitution: (i) have an outstanding principal balance, after deduction of all scheduled payments due in the month of substitution, not in excess of the outstanding principal balance of the Deleted Mortgage Loan (the amount of any shortfall shall be deposited in the Custodial Account by the related Seller out of its own funds without right of reimbursement as provided in Subsection 7.04 herein), (ii) have a current Mortgage Interest Rate not less than and not more than 1% greater than the current Mortgage Interest Rate of the Deleted Mortgage Loan, (iii) have a remaining term to maturity not greater than, and not more than three (3) months less than, that of the Deleted Mortgage Loan, (iv) be of the same type as the Deleted Mortgage Loan (i.e., if the Deleted Mortgage Loan is a Fixed Rate Mortgage Loan, the substituted loan shall be a Fixed Rate Mortgage Loan), (v) comply with each representation and warranty respecting individual Mortgage Loans set forth in Subsection 7.03 herein, provided, that for purposes of applying such representations and warranties to each such Qualified Substitute Mortgage Loan, references in such Subsection to the related Closing Date shall be deemed to be references to the date of substitution of such Qualified Substitute Mortgage Loan and (vi) be contractually current as of the date of substitution. If one or more Mortgage Loans are substituted for one or more Deleted Mortgage Loans pursuant to Subsection 7.04 herein, the amounts described in clause (i) hereof shall be determined on the basis of the aggregate principal balances; the Mortgage Interest Rate and the term to maturity described in clauses (ii) and (iii) hereof shall be determined on the basis of weighted average Mortgage Interest Rates and original terms to maturity respectively. 8

Rate/Term Refinancing: A Refinanced Mortgage Loan, the proceeds of which were not more than $1,000 in excess of the principal balance of an existing first mortgage on the related Mortgaged Property, the principal balance of any existing subordinate mortgages on the related Mortgaged Property and related closing costs, and were used to satisfy such existing first mortgage or any such subordinate mortgages, to pay related closing costs and to provide to the Mortgagor not more than $1,000 in addition thereto. Rating Agency: Each of S&P, Moody's and Fitch. Reconstitution: Either a Pass-Through Transfer or Whole Loan Transfer. Reconstitution Agreement: In connection with a Reconstitution, an agreement pursuant to which each Seller makes representations and warranties with respect to the Mortgage Loans subject to the Reconstitution as of the date of the Reconstitution and undertakes certain other obligations, as set forth in such Reconstitution Agreement. Reconstitution Date: As to any Mortgage Loan, the date on which this Agreement, as it relates to such Mortgage Loan, is reconstituted as part of a transaction described in Section 12 hereof. Reconstitution Period: With respect to any Mortgage Loan, the period beginning from the related Closing Date to no later than September 30, 2003. Record Date: With respect to each Distribution Date, the last Business Day of the month immediately preceding the month in which such Distribution Date occurs. Refinanced Mortgage Loan: A Mortgage Loan the proceeds of which were not used to purchase the related Mortgaged Property. REMIC: A "real estate mortgage investment conduit" within the meaning of Section 860D of the Code. REO Disposition: The final sale by the Servicer of any REO Property. 9

REO Property: A Mortgaged Property acquired as a result of the liquidation of a Mortgage Loan. Repurchase Price: The Repurchase Price for any Mortgage Loan as to which a First Payment Default has occurred or such Mortgage Loan is to be repurchased pursuant to Subsection 7.04 shall be equal to the sum of (i) the product of the Purchase Price Percentage (as stated in the Commitment Letter) and the Stated Principal Balance of such Mortgage Loan as of the date of repurchase, plus accrued interest thereon until the date in which such repurchase occurs and (ii) any costs and damages incurred by the Purchaser in connection with a breach of the representation made in Subsection 7.03(h). All amounts owed to the Purchaser shall be delivered via wire transfer of immediately available funds within two Business Days of such event. Residential Dwelling: Any one of the following: (i) an attached or detached one-family dwelling, (ii) an attached or detached two- to four-family dwelling, (iii) an attached or detached one-family dwelling unit in a condominium project, (iv) an attached or detached one-family dwelling in a planned unit development, none of which is a cooperative, or mobile home (as defined in 42 United States Code, Section 5402(6)) or (v) a manufactured home. SAIF: The Savings Association Insurance Fund or any successor thereto. Sellers: American Business Credit, Inc., HomeAmerican Credit, Inc. doing business as Upland Mortgage and American Business Mortgage Services, Inc. or any of their respective successor in interest thereto. Servicer: American Business Credit, Inc., or its successor in interest thereto. Servicing Addendum: The terms and conditions attached hereto as Exhibit 11 which will govern the servicing of the Mortgage Loans by the Servicer during the Interim Servicing Period.

REO Property: A Mortgaged Property acquired as a result of the liquidation of a Mortgage Loan. Repurchase Price: The Repurchase Price for any Mortgage Loan as to which a First Payment Default has occurred or such Mortgage Loan is to be repurchased pursuant to Subsection 7.04 shall be equal to the sum of (i) the product of the Purchase Price Percentage (as stated in the Commitment Letter) and the Stated Principal Balance of such Mortgage Loan as of the date of repurchase, plus accrued interest thereon until the date in which such repurchase occurs and (ii) any costs and damages incurred by the Purchaser in connection with a breach of the representation made in Subsection 7.03(h). All amounts owed to the Purchaser shall be delivered via wire transfer of immediately available funds within two Business Days of such event. Residential Dwelling: Any one of the following: (i) an attached or detached one-family dwelling, (ii) an attached or detached two- to four-family dwelling, (iii) an attached or detached one-family dwelling unit in a condominium project, (iv) an attached or detached one-family dwelling in a planned unit development, none of which is a cooperative, or mobile home (as defined in 42 United States Code, Section 5402(6)) or (v) a manufactured home. SAIF: The Savings Association Insurance Fund or any successor thereto. Sellers: American Business Credit, Inc., HomeAmerican Credit, Inc. doing business as Upland Mortgage and American Business Mortgage Services, Inc. or any of their respective successor in interest thereto. Servicer: American Business Credit, Inc., or its successor in interest thereto. Servicing Addendum: The terms and conditions attached hereto as Exhibit 11 which will govern the servicing of the Mortgage Loans by the Servicer during the Interim Servicing Period. Servicing Advances: All customary, reasonable and necessary "out-of-pocket" costs and expenses incurred by the Servicer in the performance of its servicing obligations, including, but not limited to, the cost of (i) preservation, restoration and repair of a Mortgaged Property, (ii) any enforcement or judicial proceedings with respect to a Mortgage Loan, including foreclosure actions and (iii) the management and liquidation of REO Property. Servicing Fee: With respect to each Mortgage Loan, the amount of the fee the Purchaser shall pay to the Servicer, which shall, for each month, be equal to 0.50% per annum per Mortgage Loan, payable monthly, in arrears. If the Interim Servicing Period includes any partial month, the Servicing Fee for such month shall be pro rated at a per diem rate based upon a 30-day month. Servicing File: With respect to each Mortgage Loan, the file retained by the Servicer consisting of originals of all documents in the Mortgage File that are not delivered to the Purchaser or the Custodian and copies of the Mortgage Loan Documents set forth in Section 2 of the Custodial Agreement. 10

Servicing Rights: All of the Purchaser's right, title and interest in and to the servicing of the Mortgage Loans, together with all Custodial Accounts, Escrow Accounts, contract rights, incidental income and benefits, and exclusive rights to possession and use of servicing files and records directly or indirectly related thereto, including, without limitation, borrower lists, insurance policies and tax service agreements. Servicing Transfer Date: With respect to a Mortgage Loan, the date on which the physical servicing of such Mortgage Loan and the related Servicing Rights and servicer responsibilities are transferred to the Purchaser or its designee, pursuant to Subsection 13.05 herein, which date shall not be later than the end of the Interim Servicing Period, or such other date as may be mutually agreed to in writing by the Sellers and Initial Purchaser; provided, however, if the Purchaser exercises its option to terminate the Servicer pursuant to this Agreement, the Servicing Transfer Date will be deemed to have occurred upon such termination. S&P: Standard & Poor's Ratings Services, a division of The McGraw-Hill Companies, Inc. or its successor in interest thereto.

Servicing Rights: All of the Purchaser's right, title and interest in and to the servicing of the Mortgage Loans, together with all Custodial Accounts, Escrow Accounts, contract rights, incidental income and benefits, and exclusive rights to possession and use of servicing files and records directly or indirectly related thereto, including, without limitation, borrower lists, insurance policies and tax service agreements. Servicing Transfer Date: With respect to a Mortgage Loan, the date on which the physical servicing of such Mortgage Loan and the related Servicing Rights and servicer responsibilities are transferred to the Purchaser or its designee, pursuant to Subsection 13.05 herein, which date shall not be later than the end of the Interim Servicing Period, or such other date as may be mutually agreed to in writing by the Sellers and Initial Purchaser; provided, however, if the Purchaser exercises its option to terminate the Servicer pursuant to this Agreement, the Servicing Transfer Date will be deemed to have occurred upon such termination. S&P: Standard & Poor's Ratings Services, a division of The McGraw-Hill Companies, Inc. or its successor in interest thereto. Stated Principal Balance: As to each Mortgage Loan as of any date of determination, (i) the unpaid principal balance of the Mortgage Loan as of the related Cut-off Date, minus (ii) all amounts previously distributed to the Purchaser with respect to such Mortgage Loan representing payments or recoveries of principal. Whole Loan Transfer: Any sale or transfer of some or all of the Mortgage Loans by the Purchaser to a third party, which sale or transfer is not a Pass-Through Transfer. 2. Agreement to Purchase. On the related Closing Date, the Sellers agree to sell, and the Purchaser agrees to purchase, without recourse but subject to the representations, warranties, terms and provisions of this Agreement, Mortgage Loans having an aggregate principal balance on the related Cut-off Date in an amount as set forth in the Commitment Letter, or in such other amount as agreed by the Purchaser and the Sellers as evidenced by the actual aggregate principal balance of the Mortgage Loans accepted by the Purchaser on such Closing Date. 3. Mortgage Loan Schedule. The Sellers shall deliver a Mortgage Loan Schedule for the Mortgage Loans, or each Seller shall deliver a Mortgage Loan Schedule for the related Mortgage Loans, to be purchased on the related Closing Date to the Purchaser at least two (2) Business Days prior to such Closing Date. 4. Purchase Price. The Purchase Price for each Mortgage Loan listed on the related Mortgage Loan Schedule shall be the amount determined pursuant to the terms of the Commitment Letter (subject to adjustment as provided therein). If so provided in the Commitment Letter, portions of the Mortgage Loans shall be priced separately. The Purchase Price shall be remitted by the Initial Purchaser to the related Seller on the related Closing Date by wire transfer of immediately available funds to the bank account designated by such Seller. At such time as the Sellers deliver to the Purchaser or its Custodian Assignments of Mortgage in blank in recordable form for each Mortgage Loan purchased by the Purchaser on a Closing Date, the Purchaser shall pay the applicable Holdback Amount to the related Seller; provided, that, no Seller shall be entitled to payment of the Holdback Amount if the Assignments of Mortgage relating to all the purchased Mortgage Loans are not delivered to the Purchaser or its Custodian on or prior to August 11, 2003. 11

In addition to the Purchase Price as described above, the Initial Purchaser shall pay to related Seller, on the related Closing Date, accrued interest on the Stated Principal Balance of each Mortgage Loan at its Mortgage Interest Rate from the last interest paid-through date to but not including related Closing Date. The Purchaser shall own and be entitled to receive with respect to each Mortgage Loan purchased, (1) all scheduled principal received after the related Cut-off Date, (2) all other recoveries of principal collected after the related Cut-off Date, (3) all payments of interest on the Mortgage Loans at the Mortgage Interest Rate from the last interest paid-through date and (4) all Prepayment Charges on the Mortgage Loans collected on or after the related Cut-off Date. The Stated Principal Balance of each Mortgage Loan as of the related Cut-off Date is determined after application to the reduction of principal of payments of principal received on or before the related Cut-off Date. All payments of

In addition to the Purchase Price as described above, the Initial Purchaser shall pay to related Seller, on the related Closing Date, accrued interest on the Stated Principal Balance of each Mortgage Loan at its Mortgage Interest Rate from the last interest paid-through date to but not including related Closing Date. The Purchaser shall own and be entitled to receive with respect to each Mortgage Loan purchased, (1) all scheduled principal received after the related Cut-off Date, (2) all other recoveries of principal collected after the related Cut-off Date, (3) all payments of interest on the Mortgage Loans at the Mortgage Interest Rate from the last interest paid-through date and (4) all Prepayment Charges on the Mortgage Loans collected on or after the related Cut-off Date. The Stated Principal Balance of each Mortgage Loan as of the related Cut-off Date is determined after application to the reduction of principal of payments of principal received on or before the related Cut-off Date. All payments of principal and interest, less the applicable Servicing Fee, received on a Due Date following the related Cut-off Date shall belong to the Purchaser. 5. Examination of Mortgage Files. In addition to the rights granted to the Initial Purchaser under the Commitment Letter to underwrite the Mortgage Loans and review the Mortgage Files, the Sellers, at least two (2) days prior to the related Closing Date, shall (a) deliver to the Custodian in escrow, for examination with respect to each Mortgage Loan to be purchased on such Closing Date, the related Mortgage File, including the Assignment of Mortgage, pertaining to each Mortgage Loan, or (b) at the option of the Initial Purchaser, make the related Mortgage File available to the Initial Purchaser for examination at the related Seller's offices or such other location as shall otherwise be agreed upon by the Purchaser and such Seller. Such examination may be made by the Purchaser or its designee at any reasonable time before or after the related Closing Date. If the Initial Purchaser identifies any Mortgage Loans that do not conform to the terms of the Commitment Letter or this Agreement, such Mortgage Loans may, at the Initial Purchaser's option, be rejected for purchase by the Initial Purchaser prior to the related Closing Date. If not purchased by the Initial Purchaser, such Mortgage Loans shall be deleted from the Mortgage Loan Schedule. The Initial Purchaser may, at its option and without notice to any Seller, purchase all or less than all of the Mortgage Loans without conducting any partial or complete examination. The fact that the Purchaser has conducted or has determined not to conduct any partial or complete examination of the Mortgage Files shall not affect the Purchaser's (or any of its successors') rights to demand repurchase or other relief or remedy provided for in this Agreement. 6. Conveyance from the Sellers to the Initial Purchaser. 6.01. Conveyance of Mortgage Loans; Possession of Servicing Files. The Sellers, simultaneously with the payment of the Purchase Price, shall execute and deliver to the Initial Purchaser an Assignment and Conveyance with respect to the related Mortgage Loans in the form attached hereto as Exhibit 4. The Servicing File retained by the Servicer with respect to each Mortgage Loan pursuant to this Agreement shall be appropriately identified in the Servicer's computer system to reflect clearly the sale of such related Mortgage Loan to the Purchaser. The Servicer shall release from its custody the contents of any Servicing File retained by it only in accordance with this Agreement, except when such release is (i) required in connection with a repurchase of any such Mortgage Loan pursuant to Subsection 7.04 or 7.06 or (ii) to a document imaging or reproduction contractor engaged by the Servicer at its own expense and identified to the Purchaser. 12

6.02. Books and Records. Upon the purchase of the Mortgage Loans hereunder, record title to each Mortgage and the related Mortgage Note as of the related Closing Date shall be in the name of the related Seller, the related Seller's predecessor in interest, the Purchaser, the Custodian or one or more designees of the Purchaser, as the Purchaser shall designate. Notwithstanding the foregoing, beneficial ownership of each Mortgage and the related Mortgage Note shall be vested solely in the Purchaser or the appropriate designee of the Purchaser, as the case may be. Upon the purchase of the Mortgage Loans hereunder, all rights arising out of the Mortgage Loans including, but not limited to, all funds received by the Sellers or the Servicer after the related Cut-off Date on or in connection with a Mortgage Loan as provided in and subject to Section 4 shall be vested in the Purchaser or one or more designees of the Purchaser; provided, however, that all such funds received on or in connection with a Mortgage Loan as provided in and subject to Section 4 shall be received and held by the Servicer as custodian for the benefit of the Purchaser or the assignee of the Purchaser, as the case may be, as the owner of the Mortgage Loans pursuant to the terms of this Agreement.

6.02. Books and Records. Upon the purchase of the Mortgage Loans hereunder, record title to each Mortgage and the related Mortgage Note as of the related Closing Date shall be in the name of the related Seller, the related Seller's predecessor in interest, the Purchaser, the Custodian or one or more designees of the Purchaser, as the Purchaser shall designate. Notwithstanding the foregoing, beneficial ownership of each Mortgage and the related Mortgage Note shall be vested solely in the Purchaser or the appropriate designee of the Purchaser, as the case may be. Upon the purchase of the Mortgage Loans hereunder, all rights arising out of the Mortgage Loans including, but not limited to, all funds received by the Sellers or the Servicer after the related Cut-off Date on or in connection with a Mortgage Loan as provided in and subject to Section 4 shall be vested in the Purchaser or one or more designees of the Purchaser; provided, however, that all such funds received on or in connection with a Mortgage Loan as provided in and subject to Section 4 shall be received and held by the Servicer as custodian for the benefit of the Purchaser or the assignee of the Purchaser, as the case may be, as the owner of the Mortgage Loans pursuant to the terms of this Agreement. It is the express intention of the parties that the transactions contemplated by this Agreement be, and be construed as, a sale of the Mortgage Loans by the Sellers and not a pledge of the Mortgage Loans by any Seller to the Purchaser to secure a debt or other obligation of such Seller. Consequently, the sale of each Mortgage Loan shall be reflected as a sale on the related Seller's business records, tax returns and financial statements. 6.03. Delivery of Mortgage Loan Documents. Pursuant to the Custodial Agreement to be executed among and delivered by the Initial Purchaser, the Custodian, the Servicer and the Sellers prior to the related Closing Date, each Seller shall in connection with such Closing Date, at least two (2) Business Days prior to such Closing Date, deliver and release to the Custodian those Mortgage Loan Documents as required by the Custodial Agreement with respect to each Mortgage Loan to be purchased and sold on the such Closing Date and set forth on the Mortgage Loan Schedule delivered with such Mortgage Loan Documents. The Custodian shall certify its receipt of all such Mortgage Loan Documents required to be delivered pursuant to the Custodial Agreement for the related Closing Date, as evidenced by the Trust Receipt and Initial Certification of the Custodian in the form annexed to the Custodial Agreement. The Sellers shall be responsible for maintaining in effect the Custodial Agreement during the Interim Servicing Period. The fees and expenses of the Custodian during such period and thereafter shall be paid by the Sellers. Each Seller shall forward to the Custodian original documents evidencing an assumption, modification, consolidation or extension of any Mortgage Loan entered into in accordance with this Agreement within two weeks of their execution, provided, however, that each Seller shall provide the Custodian with a certified true copy of any such document submitted for recordation within two weeks of its execution, and shall provide the original of any document submitted for recordation or a copy of such document certified by the appropriate public recording office (unless the recording office does not routinely return originals or provide certifications) to be a true and complete copy of the original within five days after its return from the recording office. 13

7. Representations, Warranties and Covenants of each Seller and the Servicer: Remedies for Breach. 7.01. Representations and Warranties Respecting each Seller. Each Seller represents, warrants and covenants to the Purchaser as of the date hereof, the related Closing Date and the Reconstitution Date, or as of such other date specifically provided herein or in the applicable Assignment and Conveyance: (a) Each Seller is duly organized, validly existing and in good standing as a corporation under the laws of its state of incorporation and is and will remain in compliance with the laws of each state in which any Mortgaged Property is located to the extent necessary to ensure the enforceability of each Mortgage Loan in accordance with the terms of this Agreement; (b) Each Seller has the full power and authority to hold each Mortgage Loan, to sell each Mortgage Loan, and to execute, deliver and perform, and to enter into and consummate, all transactions contemplated by this Agreement. Each Seller has duly authorized the execution, delivery and performance of this Agreement, has duly executed and delivered this Agreement, and this Agreement, assuming due authorization, execution and delivery by the Initial Purchaser and the Servicer, constitutes a legal, valid and binding obligation of each Seller,

7. Representations, Warranties and Covenants of each Seller and the Servicer: Remedies for Breach. 7.01. Representations and Warranties Respecting each Seller. Each Seller represents, warrants and covenants to the Purchaser as of the date hereof, the related Closing Date and the Reconstitution Date, or as of such other date specifically provided herein or in the applicable Assignment and Conveyance: (a) Each Seller is duly organized, validly existing and in good standing as a corporation under the laws of its state of incorporation and is and will remain in compliance with the laws of each state in which any Mortgaged Property is located to the extent necessary to ensure the enforceability of each Mortgage Loan in accordance with the terms of this Agreement; (b) Each Seller has the full power and authority to hold each Mortgage Loan, to sell each Mortgage Loan, and to execute, deliver and perform, and to enter into and consummate, all transactions contemplated by this Agreement. Each Seller has duly authorized the execution, delivery and performance of this Agreement, has duly executed and delivered this Agreement, and this Agreement, assuming due authorization, execution and delivery by the Initial Purchaser and the Servicer, constitutes a legal, valid and binding obligation of each Seller, enforceable against it in accordance with its terms except as the enforceability thereof may be limited by bankruptcy, insolvency or reorganization; (c) The execution and delivery of this Agreement by each Seller and the performance of and compliance with the terms of this Agreement will not violate such Seller's articles of incorporation or by-laws or constitute a default under or result in a breach or acceleration of, any material contract, agreement or other instrument to which such Seller is a party or which may be applicable to such Seller or its assets; (d) Each Seller is not in violation of, and the execution and delivery of this Agreement by each Seller and its performance and compliance with the terms of this Agreement will not constitute a violation with respect to, any order or decree of any court or any order or regulation of any federal, state, municipal or governmental agency having jurisdiction over such Seller or its assets, which violation might have consequences that would materially and adversely affect the condition (financial or otherwise) or the operation of such Seller or its assets or might have consequences that would materially and adversely affect the performance of its obligations and duties hereunder; (e) Each Seller does not believe, nor does it have any reason or cause to believe, that it cannot perform each and every covenant contained in this Agreement; (f) Immediately prior to the payment of the Purchase Price for a Mortgage Loan, the related Seller was the sole owner of the related Mortgage and the indebtedness evidenced by the related Mortgage Note and upon the payment of the Purchase Price by the Purchaser, the Purchaser will own such Mortgage Loan free and clear of any lien. In the event that the related Seller retains record title, such Seller shall retain such record title to each Mortgage, each related Mortgage Note and the related Mortgage Files with respect thereto for the sole benefit of the Purchaser as the owner thereof; 14

(g) There are no actions or proceedings against, investigations known to it of, a Seller before any court, administrative or other tribunal (A) that might prohibit its entering into this Agreement, (B) seeking to prevent the sale of the Mortgage Loans or the consummation of the transactions contemplated by this Agreement or (C) that might prohibit or materially and adversely affect the performance by such Seller of its obligations under, or validity or enforceability of, this Agreement or the Mortgage Loans; (h) No consent, approval, authorization or order of any court or governmental agency or body is required for the execution, delivery and performance by a Seller of, or compliance by such Seller with, this Agreement or the consummation of the transactions contemplated by this Agreement, except for such consents, approvals, authorizations or orders, if any, that have been obtained; (i) The consummation of the transactions contemplated by this Agreement are in the ordinary course of business of each Seller, and the transfer, assignment and conveyance of the Mortgage Notes and the Mortgages by each

(g) There are no actions or proceedings against, investigations known to it of, a Seller before any court, administrative or other tribunal (A) that might prohibit its entering into this Agreement, (B) seeking to prevent the sale of the Mortgage Loans or the consummation of the transactions contemplated by this Agreement or (C) that might prohibit or materially and adversely affect the performance by such Seller of its obligations under, or validity or enforceability of, this Agreement or the Mortgage Loans; (h) No consent, approval, authorization or order of any court or governmental agency or body is required for the execution, delivery and performance by a Seller of, or compliance by such Seller with, this Agreement or the consummation of the transactions contemplated by this Agreement, except for such consents, approvals, authorizations or orders, if any, that have been obtained; (i) The consummation of the transactions contemplated by this Agreement are in the ordinary course of business of each Seller, and the transfer, assignment and conveyance of the Mortgage Notes and the Mortgages by each Seller pursuant to this Agreement are not subject to the bulk transfer or any similar statutory provisions; (j) With respect to each Mortgage Loan, each Seller is in possession of a complete Mortgage File in compliance with Exhibit 5, except for such documents as have been delivered to the Custodian; and (k) Neither this Agreement nor any written statement report or other document prepared and furnished or to be prepared and furnished by each Seller pursuant to this Agreement or in connection with the transaction contemplated hereby contains any untrue statement of material fact or omits to state a material fact necessary to make the statements contained herein or therein not misleading in light of the circumstances in which they were made. 7.02. Representations and Warranties Respecting the Servicer. The Servicer represents warrants and covenants to the Purchaser as of the related Closing Date and as of each Reconstitution Date, or as of such other date specifically provided herein: (a) The Servicer is duly organized, validly existing and in good standing as a corporation under the laws of the Commonwealth of Pennsylvania and is and will remain duly licensed and in compliance with the laws of each state in which any Mortgaged Property is located to the extent necessary to ensure the enforceability of each Mortgage Loan in accordance with the terms of this Agreement; (b) The Servicer has the full power and authority to (1) on behalf of the Purchaser, (i) hold each Mortgage Loan and (ii) sell each Mortgage Loan, and (2) execute, deliver and perform, and to enter into and consummate, all transactions contemplated by this Agreement. The Servicer has duly authorized the execution, delivery and performance of this Agreement, has duly executed and delivered this Agreement, and this Agreement, assuming due authorization, execution and delivery by the Purchaser and the Seller, constitutes a legal, valid and binding obligation of the Servicer, enforceable against it in accordance with its terms except as the enforceability thereof may be limited by bankruptcy, insolvency or reorganization; 15

(c) The execution and delivery of this Agreement by the Servicer and the performance of and compliance with the terms of this Agreement will not violate the Servicer's articles of incorporation or by-laws or constitute a default under or result in a breach or acceleration of, any material contract, agreement or other instrument to which the Servicer is a party or which may be applicable to the Servicer or its assets; (d) The Servicer is not in violation of, and the execution and delivery of this Agreement by the Servicer and its performance and compliance with the terms of this Agreement will not constitute a violation with respect to, any order or decree of any court or any order or regulation of any federal, state, municipal or governmental agency having jurisdiction over the Seller or its assets, which violation might have consequences that would materially and adversely affect the condition (financial or otherwise) or the operation of the Servicer or its assets or might have consequences that would materially and adversely affect the performance of its obligations and duties hereunder; (e) The Servicer does not believe, nor does it have any reason or cause to believe, that it cannot perform each and every covenant contained in this Agreement;

(c) The execution and delivery of this Agreement by the Servicer and the performance of and compliance with the terms of this Agreement will not violate the Servicer's articles of incorporation or by-laws or constitute a default under or result in a breach or acceleration of, any material contract, agreement or other instrument to which the Servicer is a party or which may be applicable to the Servicer or its assets; (d) The Servicer is not in violation of, and the execution and delivery of this Agreement by the Servicer and its performance and compliance with the terms of this Agreement will not constitute a violation with respect to, any order or decree of any court or any order or regulation of any federal, state, municipal or governmental agency having jurisdiction over the Seller or its assets, which violation might have consequences that would materially and adversely affect the condition (financial or otherwise) or the operation of the Servicer or its assets or might have consequences that would materially and adversely affect the performance of its obligations and duties hereunder; (e) The Servicer does not believe, nor does it have any reason or cause to believe, that it cannot perform each and every covenant contained in this Agreement; (f) There are no actions or proceedings against, investigations known to it of, the Servicer before any court, administrative or other tribunal (i) that might prohibit its entering into this Agreement, (ii) seeking to prevent the sale of the Mortgage Loans or the consummation of the transactions contemplated by this Agreement or (iii) other than the subpoena from the United States Attorney for the Eastern District of Pennsylvania dated May 14, 2003, that might prohibit or materially and adversely affect the performance by the Servicer of its obligations under, or validity or enforceability of, this Agreement or to the Mortgage Loans; (g) No consent, approval, authorization or order of any court or governmental agency or body is required for the execution, delivery and performance by the Servicer of, or compliance by the Servicer with, this Agreement or the consummation of the transactions contemplated by this Agreement, except for such consents, approvals, authorizations or orders, if any, that have been obtained; (h) The consummation of the transactions contemplated by this Agreement are in the ordinary course of business of the Servicer; (i) The information delivered by the Servicer to the Purchaser with respect to the Servicer's loan loss, foreclosure and delinquency experience on mortgage loans underwritten to the same standards as the Mortgage Loans and covering mortgaged properties similar to the Mortgaged Properties, is true and correct in all material respects and includes adjustments for payments which are timely received but which are not honored, due to insufficient funds or for any other reason; and (j) The Servicer will not waive any Prepayment Charge unless it is waived in accordance with Accepted Servicing Practices or the Servicing Addendum. 16

7.03. Representations and Warranties Regarding Individual Mortgage Loans. The Sellers and the Servicer hereby represent and warrant to the Purchaser that, as to each Mortgage Loan, as of the related Closing Date and as of each Reconstitution Date, or as of such date specifically provided herein; provided that the application and interpretation of the following representation and warranties with respect to second lien Mortgage Loans shall be deemed to be modified only to the extent that a specific requirement or guideline addressed in the related Seller's underwriting guidelines for the origination of second lien mortgage loans differs from the comparable requirement or guideline addressed in such Seller's underwriting guidelines for the origination of first lien mortgage loans: (a) The information set forth in the Mortgage Loan Schedule is complete, true and correct as of the related Cutoff Date; (b) The Mortgage Loan is in compliance with all requirements set forth in the Commitment Letter; (c) No Seller has advanced funds, or induced, solicited or knowingly received any advance of funds from a party

7.03. Representations and Warranties Regarding Individual Mortgage Loans. The Sellers and the Servicer hereby represent and warrant to the Purchaser that, as to each Mortgage Loan, as of the related Closing Date and as of each Reconstitution Date, or as of such date specifically provided herein; provided that the application and interpretation of the following representation and warranties with respect to second lien Mortgage Loans shall be deemed to be modified only to the extent that a specific requirement or guideline addressed in the related Seller's underwriting guidelines for the origination of second lien mortgage loans differs from the comparable requirement or guideline addressed in such Seller's underwriting guidelines for the origination of first lien mortgage loans: (a) The information set forth in the Mortgage Loan Schedule is complete, true and correct as of the related Cutoff Date; (b) The Mortgage Loan is in compliance with all requirements set forth in the Commitment Letter; (c) No Seller has advanced funds, or induced, solicited or knowingly received any advance of funds from a party other than the owner of the related Mortgaged Property, directly or indirectly, for the payment of any amount required by the Mortgage Note or Mortgage, and no Mortgage Loan has been delinquent for more than 30 days (as of any month end) in the prior 12 months as of the related Closing Date; (d) There are no delinquent taxes, ground rents, water charges, sewer rents, assessments, insurance premiums, leasehold payments, including assessments payable in future installments or other outstanding charges affecting the related Mortgaged Property; (e) The terms of the Mortgage Note and the Mortgage have not been impaired, waived, altered or modified in any respect, except by written instruments, recorded in the applicable public recording office if necessary to maintain the lien priority of the Mortgage, and which have been delivered to the Custodian; the substance of any such waiver, alteration or modification has been approved by the title insurer, to the extent required by the related policy, and is reflected on the Mortgage Loan Schedule. No instrument of waiver, alteration or modification has been executed, and no Mortgagor has been released, in whole or in part, except in connection with an assumption agreement approved by the title insurer, to the extent required by the policy, and which assumption agreement has been delivered to the Custodian and the terms of which are reflected in the Mortgage Loan Schedule; (f) The Mortgage Note and the Mortgage are not subject to any right of rescission, set-off, counterclaim or defense, including the defense of usury, nor will the operation of any of the terms of the Mortgage Note and the Mortgage, or the exercise of any right thereunder, render the Mortgage unenforceable, in whole or in part, or subject to any right of rescission, set-off, counterclaim or defense, including the defense of usury and no such right of rescission, set-off, counterclaim or defense has been asserted with respect thereto; 17

(g) All buildings upon the Mortgaged Property are insured by a generally acceptable insurer against loss by fire, hazards of extended coverage and such other hazards as are customary in the area where the Mortgaged Property is located, pursuant to insurance policies conforming to the requirements of the Servicing Addendum. All such insurance policies contain a standard mortgagee clause naming the Servicer, its successors and assigns as mortgagee and all premiums thereon have been paid. If upon origination of the Mortgage Loan, the Mortgaged Property was in an area identified on a Flood Hazard Map or Flood Insurance Rate Map issued by the Federal Emergency Management Agency as having special flood hazards (and such flood insurance has been made available) a flood insurance policy meeting the requirements of the current guidelines of the Federal Insurance Administration is in effect. The Mortgage obligates the Mortgagor thereunder to maintain all such insurance at the Mortgagor's cost and expense, and on the Mortgagor's failure to do so, authorizes the holder of the Mortgage to maintain such insurance at Mortgagor's cost and expense and to seek reimbursement therefor from the Mortgagor; (h) Each Mortgage Loan at the time it was made complied in all material respects with all applicable local, state and federal laws, including, without limitation, usury, equal credit opportunity, disclosure, recording and all applicable predatory and abusive lending laws;

(g) All buildings upon the Mortgaged Property are insured by a generally acceptable insurer against loss by fire, hazards of extended coverage and such other hazards as are customary in the area where the Mortgaged Property is located, pursuant to insurance policies conforming to the requirements of the Servicing Addendum. All such insurance policies contain a standard mortgagee clause naming the Servicer, its successors and assigns as mortgagee and all premiums thereon have been paid. If upon origination of the Mortgage Loan, the Mortgaged Property was in an area identified on a Flood Hazard Map or Flood Insurance Rate Map issued by the Federal Emergency Management Agency as having special flood hazards (and such flood insurance has been made available) a flood insurance policy meeting the requirements of the current guidelines of the Federal Insurance Administration is in effect. The Mortgage obligates the Mortgagor thereunder to maintain all such insurance at the Mortgagor's cost and expense, and on the Mortgagor's failure to do so, authorizes the holder of the Mortgage to maintain such insurance at Mortgagor's cost and expense and to seek reimbursement therefor from the Mortgagor; (h) Each Mortgage Loan at the time it was made complied in all material respects with all applicable local, state and federal laws, including, without limitation, usury, equal credit opportunity, disclosure, recording and all applicable predatory and abusive lending laws; (i) The Mortgage has not been satisfied, canceled, subordinated or rescinded, in whole or in part, and the Mortgaged Property has not been released from the lien of the Mortgage, in whole or in part, nor has any instrument been executed that would effect any such satisfaction, cancellation, subordination, rescission or release; (j) With respect to a first lien Mortgage Loan, the Mortgage creates a first lien or a first priority ownership interest in the related Mortgaged Property. With respect to a second lien Mortgage Loan, the Mortgage creates a second lien or a second priority ownership interest in the related Mortgaged Property; (k) With respect to any first lien Mortgage Loan, the related Mortgage is a valid, existing and enforceable first lien on the related Mortgaged Property and, with respect to any second lien Mortgage Loan, the related Mortgage is a valid, existing and enforceable second lien on the related Mortgaged Property, including all improvements on the related Mortgaged Property subject only to (i) with respect to any second lien Mortgage Loan, the related First Lien, (ii) the lien of current real property taxes and assessments not yet due and payable, (iii) covenants, conditions and restrictions, rights of way, easements, mineral right reservations and other matters of the public record as of the date of recording of such Mortgage being acceptable to mortgage lending institutions generally and specifically referred to in the lender's title insurance policy delivered to the originator of the related Mortgage Loan and which do not adversely affect the Appraised Value of the related Mortgaged Property and (iv) other matters to which like properties are commonly subject which do not materially interfere with the benefits of the security intended to be provided by the related Mortgage or the use, enjoyment, value (as determined by Appraised Value) or marketability of the related Mortgaged Property. Any security agreement, chattel mortgage or equivalent document related to and delivered in connection with the Mortgage Loan establishes and creates (1) with respect to any first lien Mortgage Loan, a valid, subsisting, enforceable and perfected first lien and first priority security interest and (2) with respect to any second lien Mortgage Loan, a valid, subsisting, enforceable and perfected second lien and second priority security interest, in each case, on the property described therein, and the Seller has the full right to sell and assign the same to the Purchaser; 18

(l) The Mortgage Note and the related Mortgage are genuine and each is the legal, valid and binding obligation of the maker thereof, enforceable in accordance with its terms; (m) All parties to the Mortgage Note and the Mortgage had legal capacity to enter into the Mortgage Loan and to execute and deliver the Mortgage Note and the Mortgage, and the Mortgage Note and the Mortgage have been duly and properly executed by such parties. The Mortgagor is a natural person who is a party to the Mortgage Note and the Mortgage is in an individual capacity or family trust that is guaranteed by a natural person; (n) The proceeds of the Mortgage Loan have been fully disbursed to or for the account of the Mortgagor and there is no obligation for the Mortgagee to advance additional funds thereunder and any and all requirements as

(l) The Mortgage Note and the related Mortgage are genuine and each is the legal, valid and binding obligation of the maker thereof, enforceable in accordance with its terms; (m) All parties to the Mortgage Note and the Mortgage had legal capacity to enter into the Mortgage Loan and to execute and deliver the Mortgage Note and the Mortgage, and the Mortgage Note and the Mortgage have been duly and properly executed by such parties. The Mortgagor is a natural person who is a party to the Mortgage Note and the Mortgage is in an individual capacity or family trust that is guaranteed by a natural person; (n) The proceeds of the Mortgage Loan have been fully disbursed to or for the account of the Mortgagor and there is no obligation for the Mortgagee to advance additional funds thereunder and any and all requirements as to completion of any on-site or off-site improvement and as to disbursements of any escrow funds therefor have been complied with. All costs, fees and expenses incurred in making or closing the Mortgage Loan and the recording of the Mortgage have been paid, and the Mortgagor is not entitled to any refund of any amounts paid or due to the Mortgagee pursuant to the Mortgage Note or Mortgage; (o) As of the related Closing Date and immediately prior to the sale of the Mortgage Loan hereunder, each Seller is the sole legal, beneficial and equitable owner of the related Mortgage Note and the related Mortgage and has full right to transfer and sell the Mortgage Loan to the Purchaser free and clear of any encumbrance, equity, lien, pledge, charge, claim or security interest; (p) All parties which have had any interest in the Mortgage Loan, whether as mortgagee, assignee, pledgee or otherwise, are (or, during the period in which they held and disposed of such interest, were) in compliance with any and all applicable "doing business" and licensing requirements of the laws of the state wherein the Mortgaged Property is located; (q) The Mortgage Loan is covered by an ALTA lender's title insurance policy issued by a title insurer indicated in the Mortgage File and qualified to do business in the jurisdiction where the Mortgaged Property is located, insuring (subject to the exceptions contained in (j)(ii) and (iii) above) the related Seller or Servicer, its successors and assigns as to the first or second, as applicable, priority lien of the Mortgage in the original principal amount of the Mortgage Loan. Additionally, such lender's title insurance policy affirmatively insures ingress and egress to and from the Mortgaged Property, and against encroachments by or upon the Mortgaged Property or any interest therein. The related Seller or Servicer is the sole insured of such lender's title insurance policy, and such lender's title insurance policy is in full force and effect and will be in full force and effect upon the consummation of the transactions contemplated by this Agreement. Such lender's title insurance policy has been duly and validly endorsed to the Purchaser or the assignment to the Purchaser of the Servicer's interest therein does not require the consent of or notification to the related insurer. No claims have been made under such lender's title insurance policy, and no prior holder of the related Mortgage, including the related Seller, has done, by act or omission, anything which would impair the coverage of such lender's title insurance policy; 19

(r) As of the related Closing Date, there is no default, breach, violation or event of acceleration existing under the Mortgage or the Mortgage Note and no event which, with the passage of time or with notice and the expiration of any grace or cure period, would constitute a default, breach, violation or event of acceleration; and as of the related Closing Date and Reconstitution Date, the Sellers or the Servicer has not waived any default, breach, violation or event of acceleration. With respect to each second lien Mortgage Loan, (i) the First Lien is in full force and effect, (ii) to the related Seller's knowledge, there is no default, breach, violation or event of acceleration existing under such prior mortgage or the related mortgage note, (iii) no event which, with the passage of time or with notice and the expiration of any grace or cure period, has occurred that would constitute a default, breach, violation or event of acceleration thereunder, and (iv) either (A) the prior mortgage contains a provision which allows or (B) applicable law requires, the mortgagee under the second lien Mortgage Loan to receive notice of, and affords such mortgagee an opportunity to cure any default by payment in full or otherwise under the prior mortgage. For purposes of the foregoing, a delinquent payment of less than 30 days on a Mortgage Loan in and of itself does not constitute a default, breach, violation or event of acceleration with respect to such Mortgage Loan.

(r) As of the related Closing Date, there is no default, breach, violation or event of acceleration existing under the Mortgage or the Mortgage Note and no event which, with the passage of time or with notice and the expiration of any grace or cure period, would constitute a default, breach, violation or event of acceleration; and as of the related Closing Date and Reconstitution Date, the Sellers or the Servicer has not waived any default, breach, violation or event of acceleration. With respect to each second lien Mortgage Loan, (i) the First Lien is in full force and effect, (ii) to the related Seller's knowledge, there is no default, breach, violation or event of acceleration existing under such prior mortgage or the related mortgage note, (iii) no event which, with the passage of time or with notice and the expiration of any grace or cure period, has occurred that would constitute a default, breach, violation or event of acceleration thereunder, and (iv) either (A) the prior mortgage contains a provision which allows or (B) applicable law requires, the mortgagee under the second lien Mortgage Loan to receive notice of, and affords such mortgagee an opportunity to cure any default by payment in full or otherwise under the prior mortgage. For purposes of the foregoing, a delinquent payment of less than 30 days on a Mortgage Loan in and of itself does not constitute a default, breach, violation or event of acceleration with respect to such Mortgage Loan. (s) There are no mechanics' or similar liens or claims which have been filed for work, labor or material (and no rights are outstanding that under law could give rise to such lien) affecting the related Mortgaged Property which are or may be liens prior to, or equal or coordinate with, the lien of the related Mortgage; (t) All improvements which were considered in determining the Appraised Value of the related Mortgaged Property lay wholly within the boundaries and building restriction lines of the Mortgaged Property, and no improvements on adjoining properties encroach upon the Mortgaged Property. Each appraisal has been performed in accordance with the provisions of the Financial Institutions Reform, Recovery and Enforcement Act of 1989; (u) The Mortgage Loan was (i) originated by a Seller or by a savings and loan association, a savings bank, a commercial bank or similar banking institution which is supervised and examined by a federal or state authority, or by a mortgagee approved as such by the Secretary of HUD or (ii) acquired by a Seller directly through loan brokers or correspondents such that (a) the Mortgage Loan was originated in conformity with such Seller's underwriting guidelines, (b) such Seller approved the Mortgage Loan prior to funding and (c) such Seller provided, or caused one of its lenders to provide, the funds used to originate the Mortgage Loan and acquired the Mortgage Loan on the date of origination thereof; (v) Principal payments on the Mortgage Loan are scheduled to commence no more than sixty days after the proceeds of the Mortgage Loan are disbursed. The Mortgage Loan bears interest at the Mortgage Interest Rate. Interest on the Mortgage Loan is calculated on the basis of a 360-day year consisting of twelve 30-day months. The Mortgage Note does not permit negative amortization; (w) The origination and collection practices used by the Sellers and the Servicer, as applicable, with respect to each Mortgage Note and Mortgage have been in all respects legal, proper, prudent and customary in the mortgage origination and servicing industry. The Mortgage Loan has been serviced by the Servicer and any predecessor servicer in accordance with the terms of the Mortgage Note and applicable law. With respect to escrow deposits and Escrow Payments, if any, all such payments are in the possession of, or under the control with, the Servicer, and there exist no deficiencies in connection therewith for which customary arrangements for repayment thereof have not been made. No escrow deposits or Escrow Payments or other charges or payments due the Servicer have been capitalized under any Mortgage or the related Mortgage Note; 20

(x) The Mortgaged Property is free of damage and waste and there is no proceeding pending for the total or partial condemnation thereof; (y) The Mortgage and related Mortgage Note contain customary and enforceable provisions such as to render the rights and remedies of the holder thereof adequate for the realization against the Mortgaged Property of the benefits of the security provided thereby, including, (i) in the case of a Mortgage designated as a deed of trust, by trustee's sale, and (ii) otherwise by judicial foreclosure. Since the date of origination of the Mortgage Loan, the Mortgaged Property has not been subject to any bankruptcy proceeding or foreclosure proceeding and the

(x) The Mortgaged Property is free of damage and waste and there is no proceeding pending for the total or partial condemnation thereof; (y) The Mortgage and related Mortgage Note contain customary and enforceable provisions such as to render the rights and remedies of the holder thereof adequate for the realization against the Mortgaged Property of the benefits of the security provided thereby, including, (i) in the case of a Mortgage designated as a deed of trust, by trustee's sale, and (ii) otherwise by judicial foreclosure. Since the date of origination of the Mortgage Loan, the Mortgaged Property has not been subject to any bankruptcy proceeding or foreclosure proceeding and the Mortgagor has not filed for protection under applicable bankruptcy laws. There is no homestead or other exemption available to the Mortgagor, which would interfere with the right to sell the Mortgaged Property at a trustee's sale or the right to foreclose the Mortgage. The Mortgagor has not notified the Servicer or any Seller and neither the Sellers nor the Servicer has any knowledge of any relief requested or allowed to the Mortgagor under the Soldiers and Sailors Civil Relief Act of 1940; (z) The related Mortgaged Property is not a leasehold estate or, if such Mortgaged Property is a leasehold estate, the remaining term of such lease is at least ten (10) years greater than the remaining term of the related Mortgage Note; (aa) The Mortgage Note is not and has not been secured by any collateral except the lien of the corresponding Mortgage on the Mortgaged Property, any commercial mortgage granted for a business purpose and the security interest of any applicable security agreement or chattel mortgage referred to above; (bb) The Mortgage File contains an appraisal of the related Mortgaged Property made and signed, prior to the approval of the Mortgage Loan application, by a qualified appraiser who had no interest, direct or indirect in the Mortgaged Property or in any loan made on the security thereof, whose compensation is not affected by the approval or disapproval of the Mortgage Loan; (cc) In the event the Mortgage constitutes a deed of trust, a trustee, duly qualified under applicable law to serve as such, has been properly designated and currently so serves and is named in the Mortgage, and no fees or expenses are or will become payable by the Purchaser to the trustee under the deed of trust, except in connection with a trustee's sale after default by the Mortgagor; (dd) No Mortgage Loan contains provisions pursuant to which Monthly Payments are (i) paid or partially paid with funds deposited in any separate account established by the related Seller, the Mortgagor, or anyone on behalf of the Mortgagor, (ii) paid by any source other than the Mortgagor or (ii) contains any other similar provisions which may constitute a "buydown" provision. The Mortgage Loan is not a graduated payment mortgage loan and the Mortgage Loan does not have a shared appreciation or other contingent interest feature; 21

(ee) The Mortgagor has executed a statement to the effect that the Mortgagor has received the specified disclosure materials required by applicable law with respect to the making of a Refinanced Mortgage Loan, and evidence of such receipt is and will remain in the Mortgage File; (ff) The Mortgage Note, the Mortgage, the Assignment of Mortgage and any other documents required to be delivered with respect to each Mortgage Loan pursuant to the Custodial Agreement, have been delivered to the Custodian all in compliance with the specific requirements of the Custodial Agreement; (gg) The Mortgaged Property is lawfully occupied under applicable law; all inspections, licenses and certificates required to be made or issued with respect to all occupied portions of the Mortgaged Property and, with respect to the use and occupancy of the same, including but not limited to certificates of occupancy, have been made or obtained from the appropriate authorities; (hh) No error, omission, misrepresentation, negligence, fraud or similar occurrence with respect to a Mortgage Loan has taken place on the part of any person, including, without limitation, the Mortgagor, any appraiser, any builder or developer, or any other party involved in the origination of the Mortgage Loan or in the application of any insurance in relation to such Mortgage Loan;

(ee) The Mortgagor has executed a statement to the effect that the Mortgagor has received the specified disclosure materials required by applicable law with respect to the making of a Refinanced Mortgage Loan, and evidence of such receipt is and will remain in the Mortgage File; (ff) The Mortgage Note, the Mortgage, the Assignment of Mortgage and any other documents required to be delivered with respect to each Mortgage Loan pursuant to the Custodial Agreement, have been delivered to the Custodian all in compliance with the specific requirements of the Custodial Agreement; (gg) The Mortgaged Property is lawfully occupied under applicable law; all inspections, licenses and certificates required to be made or issued with respect to all occupied portions of the Mortgaged Property and, with respect to the use and occupancy of the same, including but not limited to certificates of occupancy, have been made or obtained from the appropriate authorities; (hh) No error, omission, misrepresentation, negligence, fraud or similar occurrence with respect to a Mortgage Loan has taken place on the part of any person, including, without limitation, the Mortgagor, any appraiser, any builder or developer, or any other party involved in the origination of the Mortgage Loan or in the application of any insurance in relation to such Mortgage Loan; (ii) The Assignment of Mortgage, is in recordable form and (other than with respect to the blank assignee) is acceptable for recording under the laws of the jurisdiction in which the Mortgaged Property is located. When endorsed as provided for in this Agreement, the Mortgage Notes will be duly endorsed under applicable law; (jj) Any principal advances made to the Mortgagor prior to the related Cut-off Date have been consolidated with the outstanding principal amount secured by the Mortgage, and the secured principal amount, as consolidated, bears a single interest rate and single repayment term. The lien of the Mortgage securing the consolidated principal amount is expressly insured as having first lien priority by a title insurance policy, an endorsement to the policy insuring the mortgagee's consolidated interest or by other title evidence. The consolidated principal amount does not exceed the original principal amount of the Mortgage Loan; (kk) Reserved; (ll) No statement, report or other document constituting a part of the Mortgage File contains any material untrue statement of fact or omits to state a fact necessary to make the statements contained therein not misleading which would, either individually or in the aggregate, have a material adverse effect on the value of the Mortgage Loans; no error or omission, misrepresentations, negligence, fraud or similar occurrence with respect to any Mortgage Loan has taken place on the part of any person, including without limitation, the Mortgagor, any appraiser, any builder or developer, or any other party involved in the origination of the Mortgage Loan or in the application for any insurance in relation to the Mortgage Loan; 22

(mm) Assuming a REMIC election were made with respect to a trust of which the Mortgage Loans are a part, each Mortgage Loan constitutes a "qualified mortgage" within the meaning of Section 860G(a)(3) of the Code; (nn) No Mortgage Loan has an LTV or CLTV, as applicable, of more than 100%; (oo) With respect to any second lien Mortgage Loan, either (a) no consent for the second lien Mortgage Loan is required by the holder of the related First Lien or (b) such consent has been obtained and is contained in the Mortgage File; (pp) With respect to any second lien Mortgage Loan, neither the Sellers nor the Servicer has received notice of (1) any proceeding for the total or partial condemnation of any Mortgaged Property or (2) any default under any mortgage, lien or other encumbrance senior to the related Mortgage; (qq) With respect to any second lien Mortgage Loan, where required by law in the jurisdiction in which the Mortgaged Property is located, the original lender has filed for record a request for notice of any action by the senior lienholder under the related First Lien, and the original lender has notified any senior lienholder in writing of

(mm) Assuming a REMIC election were made with respect to a trust of which the Mortgage Loans are a part, each Mortgage Loan constitutes a "qualified mortgage" within the meaning of Section 860G(a)(3) of the Code; (nn) No Mortgage Loan has an LTV or CLTV, as applicable, of more than 100%; (oo) With respect to any second lien Mortgage Loan, either (a) no consent for the second lien Mortgage Loan is required by the holder of the related First Lien or (b) such consent has been obtained and is contained in the Mortgage File; (pp) With respect to any second lien Mortgage Loan, neither the Sellers nor the Servicer has received notice of (1) any proceeding for the total or partial condemnation of any Mortgaged Property or (2) any default under any mortgage, lien or other encumbrance senior to the related Mortgage; (qq) With respect to any second lien Mortgage Loan, where required by law in the jurisdiction in which the Mortgaged Property is located, the original lender has filed for record a request for notice of any action by the senior lienholder under the related First Lien, and the original lender has notified any senior lienholder in writing of the existence of the second lien Mortgage Loan and requested notification of any action to be taken against the Mortgagor by the senior lienholder; (rr) No second lien Mortgage Loan is a "home equity line of credit"; (ss) As of the related Closing Date and with respect to any second lien Mortgage Loan, neither the Seller nor the Servicer has received a notice of default of a First Lien that has not been cured. For purposes of the foregoing, a delinquent payment of less than 30 days on a Mortgage Loan in and of itself does not constitute a default, breach, violation or event of acceleration with respect to such Mortgage Loan; (tt) No Mortgage Loan is a "high cost" mortgage loan, as defined in the applicable predatory and abusive lending laws, including, but not limited to, the Georgia Fair Lending Act and Section 6-L of the New York State Banking Law; and (uu) No Mortgage Loan is subject to the Home Ownership and Equity Protection Act of 1994 ("HOEPA") or in violation of any comparable federal, state or local law; (vv) No Mortgage Loan originated on or after October 1, 2002 and before March 7, 2003 is secured by a Mortgaged Property located in the State of Georgia; (ww) No proceeds from any Mortgage Loan were used to finance single-premium credit insurance policies; 23

(xx) No Mortgage Loan will impose a Prepayment Charge for a term in excess of five years; (yy) The Servicer has fully furnished, in accordance with the Fair Credit Reporting Act and its implementing regulations, accurate and complete information (i.e., favorable and unfavorable) on its borrower credit files to Equifax, Experian and Trans Union Credit Information Seller, on a monthly basis; (zz) With respect to any Mortgage Loan secured by a manufactured home, each such contract is secured by a "single family residence" within the meaning of Section 25(e)(10) of the Internal Revenue Code of 1986, as amended (the "Code"). The fair market value of the manufactured home securing each such contract was at least equal to 80% of the adjusted issue price of the contract at either (i) the time the contract was originated (determined pursuant to REMIC Provisions) or (ii) the time the contract is transferred to the Initial Purchaser. Assuming a REMIC election were made with respect to a trust of which the Mortgage Loans secured by a manufactured home are a part, each such contract is a "qualified mortgage" under Section 860(a)(3) of the Code. (aaa) With respect to each Mortgage Loan subject to a Prepayment Charge, such Prepayment Charge, at the time of the origination of the related Mortgage Loan, is enforceable and in compliance with all applicable local, state and federal law.

(xx) No Mortgage Loan will impose a Prepayment Charge for a term in excess of five years; (yy) The Servicer has fully furnished, in accordance with the Fair Credit Reporting Act and its implementing regulations, accurate and complete information (i.e., favorable and unfavorable) on its borrower credit files to Equifax, Experian and Trans Union Credit Information Seller, on a monthly basis; (zz) With respect to any Mortgage Loan secured by a manufactured home, each such contract is secured by a "single family residence" within the meaning of Section 25(e)(10) of the Internal Revenue Code of 1986, as amended (the "Code"). The fair market value of the manufactured home securing each such contract was at least equal to 80% of the adjusted issue price of the contract at either (i) the time the contract was originated (determined pursuant to REMIC Provisions) or (ii) the time the contract is transferred to the Initial Purchaser. Assuming a REMIC election were made with respect to a trust of which the Mortgage Loans secured by a manufactured home are a part, each such contract is a "qualified mortgage" under Section 860(a)(3) of the Code. (aaa) With respect to each Mortgage Loan subject to a Prepayment Charge, such Prepayment Charge, at the time of the origination of the related Mortgage Loan, is enforceable and in compliance with all applicable local, state and federal law. 7.04. Remedies for Breach of Representations and Warranties. It is understood and agreed that the representations and warranties set forth in Subsections 7.01, 7.02 and 7.03 shall survive the sale of the Mortgage Loans to the Purchaser and shall inure to the benefit of the Purchaser, notwithstanding any restrictive or qualified endorsement on any Mortgage Note or Assignment of Mortgage or the examination or lack of examination of any Mortgage File. Upon discovery by the Purchaser of a breach of any of the foregoing representations and warranties which materially and adversely affects the value of the Mortgage Loans or the interest of the Purchaser (or which materially and adversely affects the interests of the Purchaser in the related Mortgage Loan in the case of a representation and warranty relating to a particular Mortgage Loan), the party discovering such breach shall give prompt written notice to the others. Any breach of the representations and warranties set forth in Subsections 7.03(uu) through 7.03(aaa) shall be deemed to materially and adversely affect the value of the related Mortgage Loan. With respect to any representation and warranties described in this Subsections 7.01, 7.02 and 7.03 which are made to a Seller's knowledge if it is discovered that the substance of such representation and warranty is inaccurate and such inaccuracy materially and adversely affects the value of the related Mortgage Loan or the interests of the Purchaser therein, notwithstanding such Seller's lack of knowledge with respect to the substance of such representation or warranty, such inaccuracy shall be deemed a breach of the applicable representation or warranty. With respect to the representation and warranty described in Subsection 7.02(f)(iii), if it is discovered that the substance of such representation and warranty is inaccurate and such inaccuracy materially and adversely affects the value of the Mortgage Loans or the interests of the Purchaser therein, notwithstanding the disclosure of the existence of the subpoena by the Sellers, such inaccuracy shall be deemed a breach of that representation and warranty. 24

Within 60 days of the earlier of either discovery by or notice to a Seller of any breach of a representation or warranty which materially and adversely affects the value of a Mortgage Loan or the Mortgage Loans, such Seller shall use its best efforts promptly to cure such breach in all material respects and, if such breach cannot be cured, such Seller shall, at the Purchaser's option, repurchase such Mortgage Loan at the Repurchase Price. In the event that a breach shall involve any representation or warranty set forth in Subsection 7.01 which materially and adversely affects the value of the Mortgage Loans and such breach cannot be cured within 60 days of the earlier of either discovery by or notice to such Seller of such breach, all of the Mortgage Loans shall, at the Purchaser's option, be repurchased by the Sellers at the Repurchase Price. Any repurchase of a Mortgage Loan (s) pursuant to the foregoing provisions of this Subsection 7.04 shall occur on a date designated by the Purchaser and shall be accomplished (i) during the Interim Servicing Period by deposit in the Custodial Account of the amount of the Repurchase Price for distribution to the Purchaser on the next scheduled Distribution Date and (ii) following the Interim Servicing Period, by wire transfer of immediately available funds on the repurchase date to an account designated by the Purchaser. Notwithstanding the foregoing, if a Seller discovers or receives notice of any such breach or defect, such Seller may remove any such Deleted Mortgage Loan, rather than repurchase any such Mortgage Loan as provided

Within 60 days of the earlier of either discovery by or notice to a Seller of any breach of a representation or warranty which materially and adversely affects the value of a Mortgage Loan or the Mortgage Loans, such Seller shall use its best efforts promptly to cure such breach in all material respects and, if such breach cannot be cured, such Seller shall, at the Purchaser's option, repurchase such Mortgage Loan at the Repurchase Price. In the event that a breach shall involve any representation or warranty set forth in Subsection 7.01 which materially and adversely affects the value of the Mortgage Loans and such breach cannot be cured within 60 days of the earlier of either discovery by or notice to such Seller of such breach, all of the Mortgage Loans shall, at the Purchaser's option, be repurchased by the Sellers at the Repurchase Price. Any repurchase of a Mortgage Loan (s) pursuant to the foregoing provisions of this Subsection 7.04 shall occur on a date designated by the Purchaser and shall be accomplished (i) during the Interim Servicing Period by deposit in the Custodial Account of the amount of the Repurchase Price for distribution to the Purchaser on the next scheduled Distribution Date and (ii) following the Interim Servicing Period, by wire transfer of immediately available funds on the repurchase date to an account designated by the Purchaser. Notwithstanding the foregoing, if a Seller discovers or receives notice of any such breach or defect, such Seller may remove any such Deleted Mortgage Loan, rather than repurchase any such Mortgage Loan as provided above, and substitute in its place a Qualified Substitute Mortgage Loan(s). For each Qualified Substitute Mortgage Loan(s) substituted for a Deleted Mortgage Loan, the related Seller shall deliver to the Custodian the documents specified in Subsection 6.03, with the Mortgage Note endorsed as required by Subsection 6.03 and, where applicable, original documents having evidence of recording thereon. Such Seller shall also take such actions with respect to the documents pertaining to each such Qualified Substitute Mortgage Loan as are required to be taken pursuant to Subsection 6.03 with respect to the Mortgage Loans originally subject to this Agreement. For purposes of applying the requirements of Subsection 6.03 to any Qualified Substitute Mortgage Loan, references in such Subsection to the related Closing Date shall be deemed to be references to the applicable date of substitution of such Qualified Substitute Mortgage Loan. Each Seller shall deposit in the Custodial Account the Monthly Payment due on each Qualified Substitute Mortgage Loan in the month following the date of such substitution (with the interest portion thereof adjusted to the applicable Mortgage Loan Remittance Rate), and the Monthly Payment due with respect to such Qualified Substitute Mortgage Loan in the month of substitution shall be retained by such Seller. For the month of substitution, distributions to the Purchaser shall include the Monthly Payment due on such Deleted Mortgage Loan in the month of substitution, including all interest due up to, but not including, the date of substitution, and each Seller shall thereafter be entitled to retain all amounts subsequently received by such Seller in respect of such Deleted Mortgage Loan. Each Seller shall amend the related 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(s) and shall give written notice to the Purchaser that such substitution has taken place, which notice shall have attached thereto a copy of such amended Mortgage Loan Schedule in hard copy or "read-only" electronic format (as reasonably acceptable to the Sellers and the Purchaser). Upon such substitution, each such Qualified Substitute Mortgage Loan shall be subject to the terms of this Agreement in all respects, and each Seller shall make and shall be deemed to have made, with respect to such Qualified Substitute Mortgage Loan(s), as of the date of substitution or of any reconstitution, the representations and warranties set forth in Subsections 7.01 and 7.03 (and, for purposes of applying such representations and warranties to each such Qualified Substitute Mortgage Loan, references in such Subsections to the related Closing Date shall be deemed to be references to such date of substitution of such Qualified Substitute Mortgage Loan). 25

For any month in which a Seller substitutes one or more Qualified Substitute Mortgage Loans for one or more Deleted Mortgage Loans, the Servicer shall determine and notify such Seller and the Purchaser of the amount, if any, by which the aggregate Stated Principal Balance of all such Qualified Substitute Mortgage Loans as of the date of substitution is less than the aggregate Stated Principal Balance of all such Deleted Mortgage Loans (after application of scheduled principal payments due in the month of substitution). Each Seller shall deposit from its own funds (and without any right of reimbursement therefor) into the Custodial Account an amount equal to the amount of such shortfall. Prior to the repurchase or substitution of any deficient Mortgage Loan, the Purchaser and each Seller shall arrange for (1) the reassignment of the repurchased Mortgage Loan or Deleted Mortgage Loan to each Seller,

For any month in which a Seller substitutes one or more Qualified Substitute Mortgage Loans for one or more Deleted Mortgage Loans, the Servicer shall determine and notify such Seller and the Purchaser of the amount, if any, by which the aggregate Stated Principal Balance of all such Qualified Substitute Mortgage Loans as of the date of substitution is less than the aggregate Stated Principal Balance o