AMERICAN BUSINESS FINANCIAL SERVICES INC /DE/
EXHIBIT 10.4
<DOCUMENT>
<TYPE>EX-10
<SEQUENCE>5
<FILENAME>ex10-4.txt
<DESCRIPTION>EXHIBIT 10.4
<TEXT>
<PAGE>
                                                                      APPENDIX I
                                                                        [1998-4]

                                  DEFINED TERMS

         "Accepted Servicing Practices": The Servicer's normal servicing
practices, which in general will conform to the mortgage servicing practices of
prudent mortgage lending institutions which service for their own account
mortgage loans of the same type as the Mortgage Loans in the jurisdictions in
which the related Mortgaged Properties are located.

         "Account": Any of the Collection Account, the Distribution Accounts,
the Cross-collateralization Reserve Accounts, the Note Insurance Payment Account
or the Pre-Funding Account or the Capitalized Interest Account.

         "Accountant": A Person engaged in the practice of accounting who
(except when the Indenture provides that an Accountant must be Independent) may
be employed by or affiliated with the Trust or an Affiliate of the Trust.

         "Accrual Period": With respect to the Class A-1 Notes and any
Distribution Date, the prior calendar month; with respect to the Class A-2 Notes
and any Distribution Date, the period from and including the prior Distribution
Date (or, in the case of the first Distribution Date, from and including the
Startup Day) to and including the day immediately preceding such Distribution
Date.

         "Act": With respect to any Noteholder, as defined in Section 11.03 of
the Indenture.

         "Addition Notice": A written notice from the Unaffiliated Seller to the
Depositor, the Trust, the Indenture Trustee, the Collateral Agent, the Rating
Agencies and the Note Insurer that the Unaffiliated Seller desires to make a
Subsequent Transfer.

         "Adjusted Note Rate": With respect to any Distribution Date, the
percentage equal to (i) the Class A-1 Note Rate plus (ii) the Premium
Percentage.

         "Administrative Costs": With respect to each Class of Notes and any
Distribution Date, the sum of the Indenture Trustee Fee, the Collateral Agent
Fee, the Premium Amount and the Servicing Fee for such Distribution Date and
such Class of Notes.

         "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.


<PAGE>




         "Agent": Any Note Registrar, Collateral Agent, or Authenticating Agent.

         "Aggregate Principal Balance": With respect to any Mortgage Loans and
any date of determination, the aggregate of the Principal Balances of such
Mortgage Loans as of such date of determination.

         "Appraised Value": As to any Mortgaged Property, 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 in the related Basic Documents 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
Indenture Trustee, for the benefit of the Noteholders and the Note Insurer.

         "Authenticating Agent": The Person, if any, appointed as Authenticating
Agent by the Trust pursuant to Section 6.14 of the Indenture, until any
successor Authenticating Agent for the Notes is named, and thereafter
"Authenticating Agent" shall mean such successor. The initial Authenticating
Agent shall be the Indenture Trustee. Any Authenticating Agent other than the
Indenture Trustee shall sign an instrument under which it agrees to be bound by
all of the terms of this Indenture applicable to the Authenticating Agent.

         "Authorized Denominations": Each Class of the Notes 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; provided, however,
that one Note of each Class is issuable in a denomination equal to any such
multiple plus an additional amount such that the aggregate denomination of all
Notes of such Class shall be equal to the Original Note Principal Balance of
such Class.

         "Authorized Officer": With respect to (i) the Indenture Trustee, any
Responsible Officer, (ii) the Owner Trustee or the Collateral Agent, the
president, any vice president, any assistant vice president, the secretary, any
assistant secretary, the treasurer, any assistant treasurer, any trust officer,
any financial services officer or any other officer of the Owner Trustee or the
Collateral Agent customarily performing functions similar to those performed by
the above officers and (iii) any other Person, the chairman, chief operating
officer, president or any vice president of such Person.

         "Available Funds": With respect to any Distribution Date and any
Distribution Account, the amount to be on deposit in such Distribution Account
on such Distribution Date (excluding the amount of any Insured Payment and prior
to the application of such amounts as described in Section 8.02 of the Indenture
for such Distribution Date) as a result of (a) the Servicer's remittance of the
Servicer Remittance Amount on the related Servicer Distribution Date, (b) any
transfers to such Distribution Account made from the Capitalized Interest



                                       2
<PAGE>


Account and/or the Pre-Funding Account and relating to such Distribution Date
pursuant to Section 8.01 of the Indenture, and (c) any transfers to such
Distribution Account in respect of the Shortfall Amount for such Class and such
Distribution Date pursuant to Section 8.01 of the Indenture, until such
Shortfall Amount is paid in full, made first, to the extent of the Net Monthly
Excess Cashflow for the other Pool of Mortgage Loans, from the Distribution
Account relating to such other Pool, second, from the Cross-collateralization
Reserve Account relating to this Pool, and third, from the
Cross-collateralization Reserve Account relating to the other Pool. For purposes
of calculating the Available Funds, any Loan Repurchase Price or Substitution
Adjustment that is paid shall be deemed deposited in the Distribution Account in
the Due Period preceding such Servicer Distribution Date.

         "Available Funds Shortfall": With respect to any Distribution Date and
any Class, an amount equal to the excess of the Insured Distribution Amount for
such Distribution Date and for such Class over the Available Funds for such
Distribution Date and such Class available for distribution in respect of such
Insured Distribution Amount.

         "Back-up Servicer": Wilshire Credit Corporation, a Nevada corporation,
its successors and assigns or any successor appointed herein.

         "Back-up Servicing Fee": With respect to any Distribution Date prior to
termination of the services of the Back-up Servicer, $1,500.

         "Back-up Servicing Fee Deficiency": With respect to any Distribution
Date, the amount, if any, by which the Back-up Servicing Fee exceeds the amount
available to be paid to the Back-up Servicer under Section 5.07 or 8.02 of the
Indenture, without giving effect to the proviso contained in the first sentence
of the definition of "Servicing Fee."

         "Bankruptcy Code": The Bankruptcy Reform Act of 1978 (Title 11 of the
United States Code), as amended.

         "Basic Documents": The Indenture, the Trust Agreement, the Sale and
Servicing Agreement, the Unaffiliated Seller's Agreement, the Insurance
Agreement and the Indemnification Agreement.

         "Beneficial Owner": With respect to a Book-Entry Note, the Person who
is the beneficial owner of such Note as reflected on the books of the Clearing
Agency for the Notes or on the books of a Person maintaining an account with
such Clearing Agency (as either a Direct Participant or an Indirect Participant,
in accordance with the rules of such Clearing Agency).

         "Best Efforts": Efforts determined to be in good faith and reasonably
diligent by the Person performing such efforts, specifically the Trust or the
Servicer, as the case may be, in its reasonable discretion. Such efforts do not
require the Trust or the Servicer, as the case may be, to enter into any
litigation, arbitration or other legal or quasi-legal proceeding, nor do they
require the Trust or the Servicer, as the case may be, to advance or expend fees
or sums of money in addition to those specifically set forth in this Indenture
and the Sale and Servicing Agreement.


                                       3
<PAGE>


         "Book-Entry Notes": Any Notes registered in the name of the Clearing
Agency or its nominee, ownership of which is reflected on the books of the
Clearing Agency or on the books of a person maintaining an account with such
Clearing Agency (as either a Direct Participant or an Indirect Participant in
accordance with the rules of such Clearing Agency).

         "Book-Entry Termination": The time at which the book-entry registration
of the Book-Entry Notes shall terminate, as specified in Section 2.13 of the
Indenture.

         "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,
Oregon 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
established in accordance with Section 8.01(c) of the Indenture and maintained
by the Indenture Trustee.

         "Capitalized Interest Requirement": With respect to the Distribution
Dates occurring in December 1998, January 1999 and February 1999, (A) the
product of (i) one-twelfth of the Adjusted Note Rate as calculated as of such
Distribution Date and (ii) the Pre-Funded Amount as of the first day of the
related Due Period, minus (B) thirty (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 December 1998 Distribution Date). In no event will the
Capitalized Interest Requirement be less than zero.

         "CERCLA": The Comprehensive Environmental Response, Compensation and
Liability Act of 1980.

         "Civil Relief Act": The Soldiers' and Sailors' Civil Relief Act of
1940, as amended.

         "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 related
Mortgage Interest Rate.


                                       4
<PAGE>


         "Class": Each class of Notes designated as the Class A-1 Notes and the
Class A-2 Notes.

         "Class A-1 Current Interest": With respect to the Class A-1 Notes for
any Distribution Date, the interest accrued during the related Accrual Period at
the Class A-1 Note Rate applicable to such Distribution Date on the Class A-1
Note Principal Balance as of such Distribution Date (and prior to making any
distributions on such Distribution Date).

         "Class A-1 Distribution Amount": With respect to the Class A-1 Notes
for any Distribution Date, the amount to be distributed to the Holders of the
Class A-1 Notes on such Distribution Date, applied first to interest and then to
principal, which amount shall be the sum of (i) any moneys released from the
Pre-Funding Account as a prepayment of principal on the Class A-1 Notes pursuant
to Section 8.01(b) of the Indenture, and (ii) the lesser of (x) the Class A-1
Formula Distribution Amount for such Distribution Date and (y) the amount
(including any applicable portion of any Insured Payment) available for
distribution on account of the Class A-1 Notes for such Distribution Date.

         "Class A-1 Formula Distribution Amount": With respect to the Class A-1
Notes for any Distribution Date, the sum of the Class A-1 Interest Distribution
Amount and the Class A-1 Principal Distribution Amount.

         "Class A-1 Interest Distribution Amount": With respect to the Class A-1
Notes for any Distribution Date, an amount equal to the Class A-1 Current
Interest less the Class A-1 Mortgage Loan Interest Shortfall Amount.

         "Class A-1 Mortgage Loan Interest Shortfall Amount": With respect to
the Mortgage Loans in Pool I and any Distribution Date, the sum of (x) the
excess, if any, of the aggregate Prepayment Interest Shortfalls for the related
Due Period over the aggregate amount of Compensating Interest paid by the
Servicer in respect thereto and (y) the aggregate amount of Civil Relief Act
Interest Shortfalls in respect of which the Servicer did not make a Servicer
Advance.

         "Class A-1 Note": Any Note designated as a "Class A-1 Note" on the face
thereof, in the form of Exhibit A to the Indenture. The Class A-1 Notes shall be
issued with an initial aggregate Note Principal Balance equal to the Original
Note Principal Balance therefor.

         "Class A-1 Note Principal Balance": As of any date of determination,
the Original Note Principal Balance of the Class A-1 Notes less any amounts
actually distributed with respect to principal thereon on all prior Distribution
Dates.

         "Class A-1 Note Rate": With respect to any Distribution Date, the per
annum rate equal to 6.505%; provided, that, on any Distribution Date after the
Clean-Up Call Date, the Class A-1 Note Rate will be 7.005%.


                                       5
<PAGE>


         "Class A-1 Principal Distribution Amount": With respect to the Class
A-1 Notes for any Distribution Date, the lesser of (x) the Principal
Distribution Amount for Pool I for such Distribution Date, and (y) the Class A-1
Note Principal Balance as of such Distribution Date.

         "Class A-2 Available Funds Cap Carry-Forward Amount": With respect to
the Class A-2 Notes and any Distribution Date, the excess of (x) the Class A-2
Current Interest calculated at the Class A-2 Formula Note Rate over (y) the
Class A-2 Current Interest calculated at the Class A-2 Available Funds Cap Rate,
in each case as of such Distribution Date.

         "Class A-2 Available Funds Cap Rate": A per annum rate equal to the Net
Weighted Average Mortgage Interest Rate with respect to the Mortgage Loans in
Pool II, less the Premium Percentage, less the rate at which the Indenture
Trustee Fee is then calculated, less the rate at which the Collateral Agent Fee
is then calculated, less 0.75%.

         "Class A-2 Carry-Forward Amount": As of any Distribution Date, the sum
of (a) the amount, if any, by which (i) the Class A-2 Interest Distribution
Amount as of the immediately preceding Distribution Date exceeded (ii) the
amount of interest actually distributed to the Holders of the Class A-2 Notes on
such immediately preceding Distribution Date and (b) thirty (30) days' interest
on the amount described in clause (a), calculated at an interest rate equal to
the Class A-2 Formula Note Rate.

         "Class A-2 Clean-Up Call Date": The first Distribution Date after the
Class A-2 Note Principal Balance is less than or equal to 10% of the Original
Note Principal Balance of the Class A-2 Notes.

         "Class A-2 Current Interest": With respect to the Class A-2 Notes for
any Distribution Date, the interest accrued during the related Accrual Period at
the Class A-2 Note Rate applicable to such Distribution Date on the Class A-2
Note Principal Balance as of such Distribution Date (and prior to making any
distributions on such Distribution Date).

         "Class A-2 Distribution Amount": With respect to the Class A-2 Notes
for any Distribution Date, the amount to be distributed to the Holders of the
Class A-2 Notes on such Distribution Date, applied first to interest and then to
principal, which amount shall be the lesser of (x) the Class A-2 Formula
Distribution Amount for such Distribution Date and (y) the amount (including any
applicable portion of any Insured Payment) available for distribution on account
of the Class A-2 Notes for such Distribution Date.

         "Class A-2 Formula Distribution Amount": With respect to the Class A-2
Notes for any Distribution Date, the sum of the Class A-2 Interest Distribution
Amount and the Class A-2 Principal Distribution Amount.

         "Class A-2 Formula Note Rate": A per annum rate equal to LIBOR plus
0.95%; provided, that, on any Distribution Date after the Clean-Up Call Date,
the Class A-2 Formula Note Rate will be equal to LIBOR plus 1.90% per annum.


                                       6
<PAGE>

         "Class A-2 Interest Distribution Amount": With respect to the Class A-2
Notes for any Distribution Date, an amount equal to (a) the related Class A-2
Current Interest, minus (b) any Mortgage Loan Interest Shortfalls relating to
the Mortgage Loans in Pool II, to the extent such Mortgage Loan Interest
Shortfalls are not paid by the Servicer as Compensating Interest, plus (c) any
Class A-2 Carry-Forward Amount, minus (d) any amounts paid by the Note Insurer
in respect of such Class A-2 Carry-Forward Amount, in each case as of such
Distribution Date.

         "Class A-2 Note": Any Note designated as a "Class A-2 Note" on the face
thereof, in the form of Exhibit A to the Indenture. The Class A-2 Notes shall be
issued with an initial aggregate Note Principal Balance equal to the Original
Note Principal Balance therefor.

         "Class A-2 Note Principal Balance": As of any date of determination,
the Original Note Principal Balance of the Class A-2 Notes less any amounts
actually distributed with respect to principal thereon on all prior Distribution
Dates.

         "Class A-2 Note Rate": With respect to any Distribution Date, the per
annum rate equal to the lesser of (i) Class A-2 Formula Note Rate and (ii) the
Class A-2 Available Funds Cap Rate for such Distribution Date.

         "Class A-2 Principal Distribution Amount": With respect to the Class
A-2 Notes for any Distribution Date, the lesser of (x) the Principal
Distribution Amount for Pool II for such Distribution Date and (y) the Class A-2
Note Principal Balance as of such Distribution Date.

         "Class A-2 Termination Price": An amount equal to (i) 100% of the Class
A-2 Note Principal Balance, plus accrued and unpaid interest thereon (including
any Class A-2 Available Funds Carry-Forward Amount) and (ii) any unreimbursed
amounts due to the Note Insurer under the Basic Documents and any I&I Payments.

         "Clean-Up Call Date": The first Distribution Date after the sum of the
Aggregate Principal Balances of the Mortgage Loans in Pool I and Pool II is less
than 10% of the sum of the Maximum Collateral Amount for Pool I and Pool II.

         "Clearing Agency": An organization registered as a "clearing agency"
pursuant to Section 17A of the Securities and Exchange Act of 1934, as amended,
and the regulations of the Commission thereunder and shall initially be The
Depository Trust Company of New York, the nominee for which is Cede & Co.

         "Clearing Agency Participants": The entities for whom the Clearing
Agency will maintain book-entry records of ownership and transfer of Book-Entry
Notes, which may include securities brokers and dealers, banks and trust
companies and clearing corporations and certain other organizations.

         "Closing Date": December 7, 1998.

         "Code": The Internal Revenue Code of 1986, as amended.



                                       7
<PAGE>


         "Collateral Agent": JPMorgan Chase Bank (f/k/a Chase Bank of Texas,
N.A.), a New York banking corporation, or its successor-in-interest, or any
successor Collateral Agent appointed as provided in Section 9.08 of the Sale and
Servicing Agreement.

         "Collateral Agent Fee": As to any Distribution Date, the fee payable to
the Collateral Agent in respect of its services as Collateral Agent pursuant to
Section 9.05 of the Sale and Servicing Agreement that accrues at a monthly rate
equal to one-twelfth of 0.0% on the Principal Balance of each Mortgage Loan, as
of the immediately preceding Due Date. The Servicer shall pay the Collateral
Agent any other fees as separately agreed between the Servicer and the
Collateral Agent.

         "Collection Account": The Eligible Account established and maintained
by the Servicer pursuant to Section 5.02(b) of the Sale and Servicing Agreement.

         "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 United States Securities and Exchange Commission.

         "Compensating Interest": As defined in Section 6.05 of the Sale and
Servicing Agreement.

         "Corporate Trust Office": With respect to (x) the Indenture Trustee,
the principal office of the Indenture Trustee at which at any particular time
its corporate trust business shall be principally administered, which office at
the date of the execution of the Basic Documents is located at 101 Barclay
Street, New York, New York, 10286, Attention: ABFS Mortgage Loan Trust 1998-4;
(y) the Owner Trustee, the principal office of the Owner Trustee at which at any
particular time its corporate trust business shall be principally administered,
which office at the date of the execution of the Basic Documents is located at
One Rodney Square, 920 King Street, Suite 102, Wilmington, Delaware 19801,
Attention: Corporate Trust Administration; and (z) the Collateral Agent, the
principal office of the Collateral Agent at which at any particular time its
corporate trust business shall be principally administered, which office at the
date of the execution of the Basic Documents is located at 801 West Greens Road,
Houston, Texas 77067, Attention: Custody Manager.

         "Cross-collateralization Reserve Accounts": With respect to each Class
of Notes, the segregated trust account, which shall be an Eligible Account,
established and maintained pursuant to Section 8.01(d) of the Indenture and
entitled "The Bank of New York, as Indenture Trustee for ABFS Mortgage Loan
Trust 1998-4 Mortgage Backed Notes, Series 1998-4, Class A-[1][2],
Cross-collateralization Reserve Account," as the case may be, on behalf of the



                                       8
<PAGE>



related Noteholders and the Note Insurer. The Cross-collateralization Reserve
Account relating to the Class A-2 Notes will qualify as an "inside reserve fund"
pursuant to Section 860G(a)(7) of the Code.

         "Cumulative Loan Loss": With respect to any period, the sum of all
Liquidated Loan Losses which occurred during such period.

         "Cumulative Loss Percentage": As of any date of determination thereof,
the aggregate of all Liquidated Loan Losses since the Closing Date as a
percentage of the sum of (i) the aggregate Principal Balance of the Initial
Mortgage Loans as of the Initial Cut-Off Date and (ii) the aggregate Principal
Balance of any Subsequent Mortgage Loans transferred to the Trust as of the
related Subsequent Cut-Off Date.

         "Cumulative Loss Test": The Cumulative Loss Test for each period
indicated below is satisfied if the Cumulative Loss Percentage for such period
does not exceed the percentage set out for such period below:
<TABLE>
<CAPTION>
                        Period                                  Cumulative Loss Percentage
           ----------------------------------------             --------------------------
           <S>         <C>                                                 <C>
            1st  -  24th Distribution Date                                1.00%
           25th  -  36th Distribution Date                                1.50%
           37th  -  48th Distribution Date                                1.75%
           49th  -  60th Distribution Date
                                     and thereafter                       2.00%
</TABLE>

         "Curtailment": With respect to a Mortgage Loan, any payment of
principal received during a Due Period as part of a payment that is in excess of
the amount of the Monthly Payment due for such Due Period and which is not
intended to satisfy the Mortgage Loan in full, nor is intended to cure a
Delinquency.

         "Cut-Off Date": With respect to the Initial Mortgage Loans, the Initial
Cut-Off Date, and with respect to the Subsequent Mortgage Loans, the Subsequent
Cut-Off Date.

         "Cut-Off Date Aggregate Principal Balance": Means the aggregate unpaid
principal balance of the Initial Mortgage Loans as of the Initial Cut-Off Date
(or, with respect to Initial Mortgage Loans which were originated after the
Initial Cut-Off Date, as of the date of origination). The Cut-Off Date Aggregate
Principal Balance is $66,903,112.77.

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

         "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 Bankruptcy Code, except such a
reduction that constitutes a Deficient Valuation or a permanent forgiveness of
principal.

                                       9
<PAGE>

         "Default": Any occurrence that is, or with notice or the lapse of time
or both would become, an Event of Default.

         "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 Bankruptcy Code.

         "Definitive Notes": Notes other than Book-Entry Notes.

         "Deleted Mortgage Loan": A Mortgage Loan replaced 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 sixty (60) or more
days Delinquent, in foreclosure or converted to REO Property as of the last day
of such Due Period and (b) the denominator of which is the aggregate Principal
Balance of the Mortgage Loans as of the last day of such Due Period.

         "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": Prudential Securities Secured Financing Corporation, a
Delaware corporation.

         "Direct Participant": Any broker-dealer, bank or other financial
institution for which the Clearing Agency holds Notes from time to time as a
securities depositary.

         "Distribution Account": With respect to each Class of Notes, the
segregated trust account, which shall be an Eligible Account, established and
maintained pursuant to Section 8.01(a) of the Indenture and entitled "The Bank
of New York, as Indenture Trustee for ABFS Mortgage Loan Trust 1998-4 Mortgage
Backed Notes, Series 1998-4, Class A-[1][2], Distribution Account," as the case
may be, on behalf of the related Noteholders and the Note Insurer.

         "Distribution Amount": The Class A-1 Distribution Amount or the Class
A-2 Distribution Amount, as applicable.

                                       10
<PAGE>


         "Distribution Date": The 25th day of any month or if such 25th day is
not a Business Day, the first Business Day immediately following, commencing on
December 28, 1998.

         "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 Indenture Trustee; provided, that the
Indenture Trustee 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 Indenture 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 Note 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
Indenture Trustee; provided, that the Indenture Trustee otherwise meets these
requirements), having capital and surplus of not less than $50,000,000, acting
in its fiduciary capacity.

         "ERISA": The Employee Retirement Income Security Act of 1974, as
amended.

         "Excess Over-collateralized Amount": With respect to a Pool of Mortgage
Loans and any Distribution Date, the excess, if any, of (x) the
Over-collateralized Amount for such Pool that would apply on such Distribution
Date after taking into account the payment of the Class A-1 Distribution Amount
or the Class A-2 Distribution Amount, as applicable, on such Distribution Date
(except for any distributions of Over-collateralization Reduction Amounts for
such Pool on such Distribution Date) over (y) the related Specified
Over-collateralized Amount for such Pool for such Distribution Date; provided,
however, that the Excess Over-collateralized Amount for the period beginning
with the Distribution Date as to which clause (b)(i)(y)(A) of "Specified
Over-collateralized Amount" applies (the "Trigger Date") and ending on the
Distribution Date occurring in the month six months subsequent to the Trigger
Date (inclusive) shall be limited to the amount obtained using the following
formula.

                                       n
                                   ---------
                                   6 x E.S.A.




                                       11
<PAGE>


         Where "n" is equal to the number of Distribution Dates that have
occurred since the Trigger Date and "E.S.A." is equal to the amount of Excess
Over-collateralized Amount that would otherwise be obtained for such
Distribution Date without regard to the provisions of this proviso.

         "Exchange Act": Means the Securities Exchange Act of 1934, as amended.

         "Event of Default": As defined in Section 5.01 of the Indenture.

         "Fannie Mae": The Federal National Mortgage Association, and any
successor thereto.

         "FDIC": The Federal Deposit Insurance Corporation, and any successor
thereto.

         "Final Certification": A certification as to the completeness of each
Indenture Trustee's Mortgage File prepared by the Collateral Agent, on behalf of
the Indenture Trustee, and provided by the Collateral Agent within ninety (90)
of the Closing Date pursuant to Section 2.06(a)(iii) of the Sale and Servicing
Agreement.

         "Final Stated Maturity Date": With respect to both the Class A-1 Notes
and the Class A-2 Notes, the January 2030 Distribution Date.

         "Foreclosure Profits": As to any Distribution 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 of the Sale and Servicing Agreement to the first
day of the month following the month in which such Mortgage Loan became a
Liquidated Mortgage Loan).

         "Freddie Mac": The Federal Home Loan Mortgage Corporation, and any
successor thereto.

         "GAAP": Generally accepted accounting principles, consistently applied.

         "Grant": To assign, transfer, mortgage, pledge, create and grant a
security interest in, deposit, set-over and confirm. A Grant of a Mortgage Loan
and the related Mortgage Files, a Permitted Investment, the Sale and Servicing
Agreement, the Unaffiliated Seller's Agreement, or any other instrument shall
include all rights, powers and options (but none of the obligations) of the
Granting party thereunder, including without limitation the immediate and
continuing right to claim for, collect, receive and give receipts for principal
and interest payments thereunder, Insurance Proceeds, Loan Purchase Prices and
all other moneys payable thereunder and all proceeds thereof, to give and
receive notices and other communications, to make waivers or other agreements,

                                       12

<PAGE>

to exercise all rights and options, to bring Proceedings in the name of the
Granting party or otherwise, and generally to do and receive anything that the
Granting party is or may be entitled to do or receive thereunder or with respect
thereto.

         "Highest Lawful Rate": As defined in Section 11.19 of the Indenture.

         "I&I Payments": Payments due and owing under the Insurance Agreement
other than pursuant to Section 3.02(b) of such Insurance Agreement.

         "Indemnification Agreement": As defined in the Insurance Agreement.

         "Indenture": The Indenture, dated as of November 1, 1998, between the
Trust and the Indenture Trustee, relating to the issuance of the Notes.

         "Indenture Trustee": The Bank of New York, a New York banking
corporation, or its successor-in-interest, or any successor Indenture Trustee
appointed as provided for in Section 6.09 of the Indenture.

         "Indenture Trustee Fee": As to any Distribution Date, the fee payable
to the Indenture Trustee in respect of its services as Indenture Trustee
pursuant to Section 6.16 of the Indenture that accrues at a monthly rate equal
to one-twelfth of 0.025% on the Principal Balance of each Mortgage Loan, as of
the immediately preceding Due Date.

         "Indenture Trustee's Mortgage File": The documents delivered to the
Collateral Agent, on behalf of the Indenture Trustee, pursuant to Section 2.05
of the Sale and Servicing Agreement.

         "Indenture Trustee's Remittance Report": The statement prepared
pursuant to Section 2.08(d) of the Indenture, containing the following
information with respect to each Class:

         (a) the amount of the distribution with respect to the each Class of
     Notes and the Trust Certificates;

         (b) the amount of such distributions allocable to principal, separately
     identifying the aggregate amount of any Prepayments or other unscheduled
     recoveries of principal included therein and separately identifying any
     Over-collateralization Increase Amounts for each Pool;

         (c) the amount of such distributions allocable to interest and the
     calculation thereof;

         (d) the Note Principal Balance of each Class of Notes as of such
     Distribution Date, together with the Note Principal Balance of each Class
     of Notes (based on a Note in an original Note Principal Balance of $1,000)
     then outstanding, in each case after giving effect to any payment of
     principal on such Distribution Date;

                                       13

<PAGE>

         (e) the amount of any Insured Payment included in the amounts
     distributed to the Noteholders on such Distribution Date;

         (f) the total of any Substitution Adjustments and any Loan Repurchase
     Price amounts included in such distribution;

         (g) 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 Closing Date for consumer
     purpose loans and for business purpose loans;

         (h) with respect to the Class A-1 Notes, the Pre-Funding Amount for
     such Distribution Date; and

         (i) LIBOR for such Distribution Date.

         Items (a), (b) and (c) above shall, with respect to each Class of
Notes, be presented on the basis of a Note having a $1,000 denomination. In
addition, by January 31 of each calendar year following any year during which
the Notes are outstanding, the Indenture 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 (a), (b) and (c) with
respect to the Notes for such calendar year.

         "Independent": When used with respect to any specified Person, means
such a Person who (i) is in fact independent of the Trust and any other obligor
upon the Notes, (ii) does not have any direct financial interest or any material
indirect financial interest in the Trust or in any such other obligor or in an
Affiliate of the Trust or such other obligor, and (iii) is not connected with
the Trust or any such other obligor as an officer, employee, promoter,
underwriter, trustee, partner, director or person performing similar functions.
Whenever it is herein provided that any Independent Person's opinion or
certificate shall be furnished to the Indenture Trustee, such Person shall be
appointed by an Trust Order and such opinion or certificate shall state that the
signer has read this definition and that the signer is Independent within the
meaning hereof.

         "Indirect Participant": Any financial institution for whom any Direct
Participant holds an interest in a Note.

         "Individual Note": A Note of an Original Note Principal Balance of
$1,000; provided, however, that one Note may be less than that amount; a Note of
an Original Note Principal Balance in excess of $1,000 shall be deemed to be a
number of Individual Notes equal to the quotient obtained by dividing such
Original Note Principal Balance amount by $1,000.

         "Initial Certification": A certification as to the completeness of each
Mortgage File prepared by the Collateral Agent, on behalf of the Indenture
Trustee, and provided by the Collateral Agent within thirty (30) of the Closing
Date pursuant to Section 2.06(a)(ii) of the Sale and Servicing Agreement.

                                       14

<PAGE>

         "Initial Cut-Off Date": The close of business on October 31, 1998 (or
with respect to any Initial Mortgage Loan originated or otherwise acquired by an
Originator after October 31, 1998, the date of origination or acquisition of
such Initial Mortgage Loan).

         "Initial Mortgage Loans": The Mortgage Loans delivered by the Trust on
the Closing Date.

         "Initial Over-collateralized Amount": With respect to any Pool, an
amount equal to 1.00% of the Maximum Collateral Amount for such Pool.

         "Insurance Agreement": The Insurance and Indemnity Agreement dated as
of November 1, 1998 among the Note Insurer, the Depositor, the Trust, the
Servicer, the Unaffiliated Seller, and the Originators as such agreement may be
amended or supplemented in accordance with the provisions thereof.

         "Insurance Policies": All insurance policies insuring any Mortgage Loan
or Mortgaged Property, to the extent the Trust or the Indenture 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 "Insured Payments."

         "Insured Distribution Amount": With respect to any Distribution Date
and for any Pool, is the sum of (i) the Interest Distribution Amount for such
Pool, (ii) the amount of the Over-collateralization Deficit applicable to such
Pool, if any, with respect to such Distribution Date, and (iii) with respect to
the Distribution Date which is a Final Stated Maturity Date, the outstanding
Note Principal Balance for the related Class of Notes.

         "Insured Payment": With respect to any Distribution Date and any Class
of Notes, the Available Funds Shortfall for such Class.

         "Interest Determination Date": With respect to any Accrual Period for
the Class A-2 Notes, the second London Business Day preceding the first day of
such Accrual Period; provided, however, that with respect to the December 1998
Distribution Date, the Interest Determination Date shall be the second London
Business Day preceding the Closing Date.

         "Interest Distribution Amount": The Class A-1 Interest Distribution
Amount or the Class A-2 Interest Distribution Amount, as applicable.

         "Late Payment Rate": Has the meaning ascribed thereto in the Insurance
Agreement.

                                       15

<PAGE>

         "Letter Agreement": The Letter of Representations to the Clearing
Agency from the Indenture Trustee and the Trust dated December 7, 1998.

         "LIBOR": With respect to any Accrual Period for the Class A-2 Notes,
the rate determined by the Indenture Trustee on the related Interest
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 Interest Determination Date. On each
Interest Determination Date, LIBOR for the related Accrual Period will be
established by the Indenture Trustee as follows:

         (a) If on such Interest Determination Date two or more Reference Banks
     provide such offered quotations, LIBOR for the related Accrual Period for
     the Class A-2 Notes shall be the arithmetic mean of such offered quotations
     (rounded upwards if necessary to the nearest whole multiple of 1/16%).

         (b) If on such Interest Determination Date fewer than two Reference
     Banks provide such offered quotations, LIBOR for the related Accrual Period
     Class A-2 Notes shall be the higher of (i) LIBOR as determined on the
     previous Interest Determination Date and (ii) the Reserve Interest Rate.

         "Liquidated Loan Loss": With respect to any Distribution Date, the
aggregate of the amount of losses with respect to each Mortgage Loan which
became a Liquidated Mortgage Loan prior to the Due Date preceding such
Distribution Date, equal to the excess of (i) the unpaid Principal Balance of
each such 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.

         "Liquidated Mortgage Loan": A Mortgage Loan with respect to which the
related Mortgaged Property has been acquired, liquidated or foreclosed and with
respect to which the Servicer determines that all Liquidation Proceeds which it
expects to recover have been recovered.

         "Liquidation Expenses": Expenses incurred by the Servicer in connection
with the liquidation of any defaulted 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 of the Sale and Servicing Agreement respecting 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.

                                       16

<PAGE>

         "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 Indenture 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": With respect to any Mortgage Loan, 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 any of its
Affiliates 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 Distribution 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.

         "Loan-to-Value Ratio" or "LTV": With respect to any Mortgage Loan as of
its date of origination, the ratio on such date borne by the outstanding
Principal Balance of the Mortgage Loan to the Appraised Value of the related
Mortgaged Property.

         "London Business Day": A day on which banks are open for dealing in
foreign currency and exchange in London and New York City.

         "Majority Noteholders": The Holder or Holders of Notes evidencing
Percentage Interests in excess of 51% in the aggregate.

         "Maximum Collateral Amount": The sum of the Original Pool Principal
Balance and the Original Pre-Funded Amount.

         "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 Curtailments and Deficient
Valuations occurring prior to such Due Date but before any adjustment to such
amortization schedule by reason of any bankruptcy, other than Deficient
Valuations or similar proceeding or any moratorium or similar waiver or grace
period).

         "Monthly Servicing Fee": As defined in Section 5.08 of the Sale and
Servicing Agreement.

         "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 Note Insurer.

                                       17

<PAGE>

         "Mortgage": The mortgage, deed of trust or other instrument creating a
first or second lien on the Mortgaged Property.

         "Mortgage File": As described in Exhibit A to the Sale and Servicing
Agreement.

         "Mortgage Interest Rate": As to any Mortgage Loan, the per annum fixed
rate at which interest accrues on the unpaid Principal Balance thereof.

         "Mortgage Loan Interest Shortfall": With respect to any Distribution
date, as to any Mortgage Loan, the sum of (a) an 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 Schedule": The schedule of Initial Mortgage Loans as of
the Initial Cut-Off Date as attached as Schedule I to the Indenture, which will
be deemed to be modified automatically to reflect 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) its Principal Balance as of the applicable Cut-Off Date; (viii) the
Mortgage Interest Rate; (ix) the scheduled monthly payment of principal and
interest and (x) a Pool designation.

         "Mortgage Loans": The Initial Mortgage Loans and the Subsequent
Mortgage Loans, together with any Qualified Substitute Mortgage Loans
substituted therefor in accordance with the Basic Documents, as from time to
time are held as a part of the Trust, the Initial Mortgage Loans originally so
held being identified in the initial Mortgage Loan Schedule. When used in
respect of any Distribution Date, the term Mortgage Loans shall mean all
Mortgage Loans (including those in respect of which the Indenture 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 Note": The original, executed note or other evidence of
indebtedness evidencing the indebtedness of a Mortgagor under a Mortgage Loan.

         "Mortgage Portfolio Performance Test": The Mortgage Portfolio
Performance Test is satisfied for any date of determination thereof if either
(a) (i) the Rolling Six Month Delinquency Rate is less than or equal to 11.00%,
(ii) the Over-collateralization Loss Test is satisfied and (iii) if the Twelve
Month Loss Amount is not greater than or equal to 1.25% of the Principal Balance
of the Mortgage Loans in each Pool as of the first day of the twelfth preceding

                                       18

<PAGE>

calendar month or (b) the Note Insurer, by notice to the Trust, the Servicer,
the Indenture Trustee and the Collateral Agent, expressly waives in writing
compliance with the foregoing tests for such Distribution Date.

         "Mortgaged Property": The underlying property or properties securing a
Mortgage Loan, consisting of a fee simple estate in one or more parcels of land.

         "Mortgagor": The obligor on a Mortgage Note.

         "Net Foreclosure Profits": As to any Distribution Date, the excess, if
any, of (i) the aggregate Foreclosure Profits with respect to such Distribution
Date over (ii) Liquidated Loan Losses with respect to such Distribution 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. For all purposes of the Basic Documents,
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 Monthly Excess Cashflow": With respect to any Distribution Date
and any Pool, the excess of (x) the Available Funds for such Pool then on
deposit in the related Distribution Account over (y) the sum of (i) the Interest
Distribution Amount and the Principal Distribution Amount for such Pool and such
Distribution Date, calculated for this purpose without regard to any
Over-collateralization Increase Amount for such Pool or portion thereof included
therein, (ii) the amounts due to the Note Insurer for such Pool on such
Distribution Date pursuant to Section 8.02(ii) of the Indenture, (iii) the
Indenture Trustee Fees and Collateral Agent Fees allocable to such Pool for such
Distribution Date, (iv) with respect to the Class A-1 Notes, the Class A-1
Mortgage Loan Interest Shortfall Amount for such Distribution Date, and (v) the
Back-up Servicing Fee Deficiency.

         "Net REO Proceeds": As to any REO Mortgage Loan, REO Proceeds net of
any related expenses of the Servicer.

         "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 Indenture Trustee Fee is then calculated,
less the rate at which the Collateral Agent Fee is then calculated and less the
Premium Percentage.

         "Nonrecoverable Advances": With respect to any Mortgage Loan, (a) any
Periodic Advance previously made and not reimbursed from late collections
pursuant to Section 5.04 of the Sale and Servicing Agreement, 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 Note Insurer and the Indenture Trustee
no later than the Business Day following such determination, would not
ultimately be recoverable pursuant to Section 5.04 of the Sale and Servicing
Agreement.

                                       19

<PAGE>

         "Note": Any Class A-1 Note or Class A-2 Note executed by the Owner
Trustee on behalf of the Trust and authenticated by the Indenture Trustee.

         "Noteholder" or "Holder": Each Person in whose name a Note is
registered in the Note Register, except that, solely for the purposes of giving
any consent, waiver, request or demand pursuant to the Indenture, any Note
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 Notes necessary to
effect any such consent, waiver, request or demand has been obtained. For
purposes of any consent, waiver, request or demand of Noteholders pursuant to
the Indenture, upon the Indenture Trustee's request, the Servicer and the
Unaffiliated Seller shall provide to the Indenture Trustee a notice identifying
any of their respective Affiliates or the Affiliates of any Subservicer that is
a Noteholder as of the date(s) specified by the Indenture Trustee in such
request. Any Notes on which payments are made under the Note Insurance Policy
shall be deemed to be Outstanding and held by the Note Insurer to the extent of
such payment.

         "Note Insurance Payment Account": The Note Insurance Payment Account
established in accordance with Section 8.03(c) of the Indenture and maintained
by the Indenture Trustee.

         "Note Insurance Policy": The Financial Guaranty Insurance Policy No.
50750-N, all endorsements thereto dated the Closing Date, issued by the Note
Insurer for the benefit of the Noteholders.

         "Note Insurer": Financial Security Assurance Inc., a monoline stock
insurance company organized and created under the laws of the State of New York,
and any successors thereto.

         "Note Insurer Default": The existence and continuance of any of the
following:

         (a) the Note Insurer shall have failed to make a required payment when
     due under the Note Insurance Policy;

         (b) the Note Insurer shall have (i) filed a petition or commenced any
     case or proceeding under any provision or chapter of the Bankruptcy Code,
     the New York State Insurance Law 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
     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

                                       20

<PAGE>

         (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, indenture trustee, agent, or receiver for the Note Insurer or
     for all or any material portion of its property or (ii) authorizing the
     taking of possession by a custodian, indenture trustee, agent, or receiver
     of the Note Insurer or of all or any material portion of its property.

         "Note Principal Balance": As to any particular Note and date of
determination, the product of the Percentage Interest evidenced thereby and the
aggregate Note Principal Balance of all Notes of the same Class as of such date
of determination. The Trust Certificates do not have a "Note Principal Balance".

         "Note Rate": The Class A-1 Note Rate or the Class A-2 Note Rate, as
applicable.

         "Note Register": As defined in Section 2.06 of the Indenture.

         "Note Registrar": As defined in Section 2.06 of the Indenture.

         "Notes": The Class A-1 Notes and the Class A-2 Notes.

         "Officer's Certificate": A certificate signed by the chairman of the
board, the president or a vice president and the treasurer, the secretary or one
of the assistant treasurers or assistant secretaries of the Unaffiliated Seller,
the Servicer, the Back-up Servicer or the Depositor, as required by any Basic
Document.

         "Opinion of Counsel": A written opinion of counsel, who may, without
limitation, be counsel for the Unaffiliated Seller, the Servicer, the Back-up
Servicer, the Depositor, the Indenture Trustee, a Noteholder or a Noteholder's
prospective transferee or the Note 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 the
REMIC Trust 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, the Depositor and the Indenture Trustee, (ii) does not have any
direct financial interest or any material indirect financial interest in the
Unaffiliated Seller, the Servicer, the Depositor or the Indenture Trustee or in
an Affiliate thereof, (iii) is not connected with the Unaffiliated Seller, the
Servicer, the Depositor or the Indenture Trustee as an officer, employee,
director or person performing similar functions and (iv) is reasonably
acceptable to the Note Insurer.

         "Original Note Principal Balance": As of the Closing Date and as to the
Class A-1 Notes, $64,350,000 and as to the Class A-2 Notes, $14,850,000. The
Trust Certificates do not have an "Original Note Principal Balance."

                                       21

<PAGE>

         "Original Pool Principal Balance": The aggregate Principal Balance of
the Mortgage Loans in each Pool, as of the Initial Cut-Off Date, which amount is
equal to $66,903,112.77.

         "Original Capitalized Interest Amount": $137,683.80.

         "Original Pre-Funded Amount": $13,097,151.43.

         "Originators": American Business Credit, Inc., HomeAmerican Credit,
Inc., d/b/a Upland Mortgage and New Jersey Mortgage and Investment Corp.

         "Outstanding": As of the date of determination, all Notes theretofore
authenticated and delivered under the Indenture except:

         (a) Definitive Notes theretofore canceled by the Note Registrar or
     delivered to the Note Registrar for cancellation;

         (b) Notes or portions thereof for whose payment or redemption money in
     the necessary amount has been theretofore deposited with the Indenture
     Trustee in trust for the Holders of such Notes; provided, however, that if
     such Notes are to be redeemed, notice of such redemption has been duly
     given pursuant to this Indenture or provision therefor, satisfactory to the
     Indenture Trustee, has been made;

         (c) Notes in exchange for or in lieu of which other Notes have been
     authenticated and delivered pursuant to this Indenture unless proof
     satisfactory to the Indenture Trustee is presented that any such Notes are
     held by a bona fide purchaser (as defined by the Uniform Commercial Code of
     the applicable jurisdiction); and

         (d) Notes alleged to have been destroyed, lost or stolen that have been
     paid as provided for in Section 2.07 of the Indenture;

provided, however, that in determining whether the Holders of the requisite
percentage of the Note Principal Balance of the Outstanding Notes have given any
request, demand, authorization, direction, notice, consent or waiver hereunder,
Notes owned by the Trust, any other obligor upon the Notes or any Affiliate of
the Trust, the Unaffiliated Seller, the Servicer or the Depositor or such other
obligor shall be disregarded and deemed not to be Outstanding, except that, in
determining whether the Indenture Trustee shall be protected in relying upon any
such request, demand, authorization, direction, notice, consent or waiver, only
Notes that the Indenture Trustee knows to be so owned shall be so disregarded.
Notes so owned that have been pledged in good faith may be regarded as
Outstanding if the pledgee establishes to the satisfaction of the Indenture
Trustee the pledgee's right so to act with respect to such Notes and that the
pledgee is not the Trust, any other obligor upon the Notes or any Affiliate of
the Trust, the Unaffiliated Seller, the Servicer or the Depositor or such other
obligor; provided, further, however, that Notes that have been paid with the
proceeds of the Note Insurance Policy shall be deemed to be Outstanding for the
purposes of this Indenture, such payment to be evidenced by written notice from
the Note Insurer to the Indenture Trustee, and the Note Insurer shall be deemed
to the Holder thereof to the extent of any payments thereon made by the Note
Insurer.

                                       22

<PAGE>

         "Over-collateralization Deficit": As of any Distribution Date, the
amount, if any, by which (a) the aggregate Note Principal Balance of the Notes,
after taking into account the payment of the Principal Distribution Amount for
each Pool (except for any amount in respect of the Over-collateralization
Deficit) on such date exceeds (b) the sum of (i) the Aggregate Principal
Balances of the Mortgage Loans in each Pool determined as of the end of the
immediately preceding Due Period, (ii) the amount, if any, on deposit in the
Pre-Funding Account as of the close of business on the last day of the
immediately preceding Due Period, and (iii) the amount on deposit in the
Cross-collateralization Reserve Account on such Distribution Date, after
application of all amounts due on such Distribution Date.

         "Over-collateralization Deficiency Amount": With respect to any
Distribution Date and any Pool, the difference, if greater than zero, between
(a) the Specified Over-collateralized Amount for such Pool applicable to such
Distribution Date and (b) the Over-collateralized Amount for such Pool
applicable to such Distribution Date prior to taking into account the payment of
any related Over-collateralization Increase Amount for such Pool on such
Distribution Date.

         "Over-collateralization Increase Amount": With respect to any
Distribution Date and any Pool, the lesser of:

         (a) the Over-collateralization Deficiency Amount for such Pool as of
     such Distribution Date (after taking into account the payment of the
     Principal Distribution Amount for such Pool on such Distribution Date
     (except for any Over-collateralization Increase Amount for such Pool)); and

             (b) (i) with respect to the first Distribution Date, zero, and

             (ii) with respect to any other Distribution Date, the sum of 100%
         of the amount of Net Monthly Excess Cashflow on such Distribution Date.

         "Over-collateralization Loss Test": The Over-collateralization Loss
Test for any period set out below is satisfied if the Cumulative Loss Percentage
for such period does not exceed the percentage set out for such period below:

                     Period                       Cumulative Loss Percentage
     --------------------------------             --------------------------
      1st  -   12th Distribution Date                        0.75%
     13th  -   24th Distribution Date                        1.25%
     25th  -   36th Distribution Date                        1.75%
     37th  -   48th Distribution Date                        2.00%
     49th  -   60th Distribution Date
                             and thereafter                  2.50%

                                       23

<PAGE>

         "Over-collateralization Reduction Amount": with respect to any Pool and
Distribution Date, is the difference, if any, between (a) the
Over-collateralized Amount for such pool that would apply on such Distribution
Date after taking into account all distributions to be made on such Distribution
Date (except for any distributions of related Over-collateralization Reduction
Amounts as described in this sentence) and (b) the Specified Over-collateralized
Amount for such Pool to the extent of principal available for distribution.

         "Over-collateralized Amount": As of any Distribution Date and any Pool,
the difference, if any, between (a) the sum of (i) the aggregate Principal
Balances of the Mortgage Loans in such Pool as of the close of business on the
last day of the related Due Period and (ii) with respect to Pool I only, the
amount on deposit in the Pre-Funding Account as of the close of business on the
last day of the immediately preceding Due Period and (b) the aggregate Note
Principal Balance of the related Class as of such Distribution Date (after
taking into account the payment of the Principal Distribution Amount for such
Pool on such Distribution Date, except for any portion thereof related to an
Insured Payment); provided, however, that such amount shall not be less than
zero.

         "Overfunded Interest Amount": With respect to each Subsequent Transfer
Date occurring in December 1998, the excess of (i) the amount on deposit in the
Capitalized Interest Account, over (ii) three-months' interest calculated at the
Adjusted Note Rate on the amount on deposit in the Pre-Funding Account (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 December 1998).

         With respect to each Subsequent Transfer Date occurring in January
1999, the excess of (i) the amount on deposit in the Capitalized Interest
Account, over (ii) two-month's interest calculated at the Adjusted Note Rate on
the amount on deposit in the Pre-Funding Account (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 January 1999).

         "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.

         "Owner Trustee": Wachovia Trust Company, National Association (as
successor to First Union Trust Company, National Association), a national
banking association, not in its individual capacity, but solely as owner trustee
under the Trust Agreement, and any successor owner trustee thereunder.

         "Owner Trustee Fee": As defined in Section 8.01 of the Trust Agreement.

                                       24

<PAGE>

         "Ownership Interest": As to any Note, any ownership or security
interest in such Note, including any interest in such Note as the Holder thereof
and any other interest therein, whether direct or indirect, legal or beneficial,
as owner or as pledgee.

         "Paying Agent": The Indenture Trustee or any other depository
institution or trust company that is authorized by the Trust pursuant to Section
3.03 of the Indenture to pay the principal of, or interest on, any Notes on
behalf of the Trust, which agent, if not the Indenture Trustee, shall have
signed an instrument agreeing to be bound by the terms of the Indenture
applicable to such Paying Agent.

         "Percentage Interest": With respect to a Note of any Class, the portion
evidenced by such Note, expressed as a percentage rounded to four decimal
places, equal to a fraction the numerator of which is the denomination
represented by such Note and the denominator of which is the Original Note
Principal Balance of such Class. With respect to a Trust Certificate, the
portion evidenced thereby as stated on the face of such Trust Certificate.

         "Periodic Advance": The aggregate of the advances required to be made
by the Servicer on any Servicer Distribution Date pursuant to Section 5.18 of
the Sale and Servicing Agreement, 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 Distribution 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:

         (a) 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;

         (b) 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;

                                       25

<PAGE>

         (c) 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;

         (d) 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;

         (e) the VISTA U.S. Government Money Market Fund, the VISTA Prime Money
     Market Fund and the VISTA 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; and provided, further, that no instrument described
hereunder may 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.

         "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 I 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 Trust Certificate, (d) rural electric and telephone cooperatives described
in Section 1381(a)(2)(C) of the Code and (e) any other Person so designated by
the Indenture Trustee based upon an Opinion of Counsel to the Indenture Trustee
and the Note Insurer that the transfer of an Ownership Interest in a Trust
Certificate to such Person may cause either (i) the REMIC Trust to fail to

                                       26

<PAGE>

qualify as a REMIC at any time that the Class A-2 Notes are outstanding or (ii)
the Trust or any Person having an Ownership Interest in any Class of Notes,
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 Trust 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": A pension or benefit plan or individual retirement arrangement
that is subject to ERISA or Section 4975 of the Code.

         "Pool": Pool I or Pool II, as the case may be.

         "Pool I": The pool of Mortgage Loans held by the Trust, as a separate
sub-trust, which secure the obligations of the Trust with respect to the Class
A-1 Notes, as reflected on the Mortgage Loan Schedule.

         "Pool I Trust Certificate": A certificate evidencing the beneficial
interest of a Trust Certificateholder in the sub-trust of the Trust consisting
of the Mortgage Loans in Pool I, substantially in the form of Exhibit A to the
Trust Agreement.

         "Pool II": The pool of Mortgage Loans held by the Trust, as a separate
sub-trust, which secure the obligations of the Trust with respect to the Class
A-2 Notes, as reflected on the Mortgage Loan Schedule.

         "Pool II Trust Certificate": A certificate evidencing the beneficial
interest of a Trust Certificateholder in the sub-trust of the Trust consisting
of the Mortgage Loans in Pool II, substantially in the form of Exhibit A to the
Trust Agreement.

         "Predecessor Notes": With respect to any particular Note, every
previous Note evidencing all or a portion of the same debt as that evidenced by
such particular Note; and, for the purpose of this definition, any Note
authenticated and delivered under Section 2.07 of the Indenture in lieu of a
lost, destroyed or stolen Note shall be deemed to evidence the same debt as the
lost, destroyed or stolen Note.

         "Preference Amount": Any amounts distributed in respect of the Notes
which are recovered from any Holder of a Note as a voidable preference by a
Indenture Trustee in bankruptcy pursuant to the Bankruptcy Code or other similar
law in accordance with a final, nonappealable order of a court having competent
jurisdiction and which have not theretofore been repaid to such Holder.

         "Preference Claim": As defined in Section 8.03(f) of the Indenture.

                                       27

<PAGE>

         "Pre-Funding Account": The Pre-Funding Account established in
accordance with Section 8.01(b) of the Indenture and maintained by the Indenture
Trustee.

         "Pre-Funding Amount": With respect to any date, the amount on deposit
in the Pre-Funding Account.

         "Pre-Funding Earnings": The actual investment earnings realized on
amounts deposited in the Pre-Funding Account.

         "Pre-Funding Period": The period commencing on the Closing Date and
ending on the earliest to occur of (i) the date on which the amount on deposit
in the Pre-Funding Account (exclusive of any investment earnings) is less than
$100,000, (ii) the date on which any Event of Default or Servicer Event Default
occurs and (iii) the close of business on January 31, 1999.

         "Premium Amount": The product of the Premium Percentage and the
aggregate outstanding Note Principal Balance for the related Class for the
related Distribution Date.

         "Premium Percentage": The rate at which the "Premium" is determined, as
described in the letter dated December 7, 1998 between the Servicer and the Note
Insurer.

         "Premium Supplement Event": Means any Event of Default, Servicer Event
of Default or an "Event of Default" as defined in the Insurance Agreement.

         "Prepayment Assumption": A constant prepayment rate of 25% HEP, used
solely for determining the accrual of original issue discount and market
discount on the Notes 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, an amount equal to the excess, if any, of (a) 30 days'
interest on the Principal Balance 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 prepayments received prior to
the end of the related Due Period and Deficient Valuations incurred prior to
such Due Date. The Principal Balance of a Mortgage Loan which becomes a
Liquidated Mortgage Loan on or prior to such Due Date shall be zero.

                                       28

<PAGE>

         "Principal Distribution Amount": For any Distribution Date and any Pool
of Mortgage Loans will be the lesser of:

         (a) the excess of (i) the sum, as of such Distribution Date, of (A) the
     Available Funds for such Pool and (B) any Insured Payment with respect to
     the related Class of Notes plus, if the Note Insurer shall so elect in its
     sole discretion, an amount of principal (including Liquidated Loan Losses)
     that would have been payable pursuant to clauses (b)(i) through (ix) below
     if sufficient funds were made available to the Indenture Trustee, in
     accordance with the terms of the Note Insurance Policy, over (ii) the sum
     of (w) the Interest Distribution Amount for such Pool, (x) the Indenture
     Trustee Fee allocable to such Pool, (y) the Collateral Agent Fee allocable
     to such Pool and (z) the amount due the Note Insurer on such Distribution
     Date pursuant to Section 8.02(ii) of the Indenture in respect to the
     related Class of Notes; and

         (b) the sum, without duplication, of:

             (i) all principal in respect of the Mortgage Loans in such Pool
         actually collected during the related Due Period;

             (ii) the principal balance of each Mortgage Loan that either was
         repurchased by the Unaffiliated Seller or purchased by the Servicer on
         the related Servicer Distribution Date from such Pool, to the extent
         such principal balance is actually received by the Indenture Trustee;

             (iii) any Substitution Adjustments delivered by the Unaffiliated
         Seller on the related Servicer Distribution Date in connection with a
         substitution of a Mortgage Loan in such Pool, to the extent such
         Substitution Adjustments are actually received by the Indenture
         Trustee;

             (iv) the Net Liquidation Proceeds actually collected by the
         Servicer of all Mortgage Loans in such Pool during the related Due
         Period (to the extent such Net Liquidation Proceeds relate to
         principal);

             (v) with respect to Pool I and the December 1998, January 1999 or
         February 1999 Distribution Dates, moneys released from the Pre-Funding
         Account, if any;

             (vi) with respect to Pool II, the proceeds received by the
         Indenture Trustee upon the exercise by the Servicer of the optional
         redemption of the Class A-2 Notes pursuant to Section 10.01 of the
         Indenture (to the extent such proceeds relate to principal);

             (vii) the amount of any Over-collateralization Deficit with respect
         to such Pool for such Distribution Date;

                                       29

<PAGE>

             (viii) the proceeds received by the Indenture Trustee on any
         termination of the Trust (to the extent such proceeds relate to
         principal) allocable to such Pool;

             (ix) the amount of any Over-collateralization Increase Amount with
         respect to such Pool for such Distribution Date, to the extent of any
         Remaining Excess Cashflow for such Pool available for such purpose;

             (x) if the Note Insurer shall so elect in its sole discretion, an
         amount of principal (including Liquidated Loan Losses) that would have
         been payable pursuant to clauses (i) through (ix) above if sufficient
         funds were made available to the Indenture Trustee in accordance with
         the terms of the Note Insurance Policy;

                                      minus
                                      -----

             (xi) the amount of any Over-collateralization Reduction Amount for
         such Pool for such Distribution Date.

         In no event will the Principal Distribution Amount for a Pool with
respect to any Distribution Date be (x) less than zero or (y) greater than the
then aggregate outstanding Note Principal Balance of the related Class of Notes.

         "Principal Prepayment": Any payment of principal made by the Mortgagor
on a Mortgage Loan which is received in advance of its scheduled Due Date.

         "Proceeding": Any suit in equity, action at law or other judicial or
administrative proceeding.

         "Prospectus Supplement": The Prospectus Supplement dated December 4,
1998 relating to the Notes 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).

                                       30

<PAGE>

         "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 of
the Sale and Servicing Agreement, which (a) has or have an interest rate at
least equal to those 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
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, (e) 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, (f) 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 (g)
complies or comply as of the date of substitution with each representation and
warranty set forth in Sections 3.01 and 3.02 of the Unaffiliated Seller's
Agreement.

         "Rating Agency": S&P or Moody's.

         "Rating Agency Condition": Means, with respect to any action to which a
Rating Agency Condition applies, that each Rating Agency shall have been given
ten (10) days (or such shorter period as is acceptable to each Rating Agency)
prior notice thereof and that each of the Rating Agencies shall have notified
the Indenture Trustee, the Servicer, the Depositor, the Note Insurer and the
Trust in writing that such action will not result in a reduction or withdrawal
of the then current "implied" rating of the Notes that it maintains without
taking into account the Note Insurance Policy.

         "Record Date": With respect to the Class A-1 Notes, the last Business
Day of the month immediately preceding a month in which a Distribution Date
occurs, and with respect to the Class A-2 Notes, the Business Day immediately
preceding the related Distribution Date.

         "Redemption Date": The Distribution Date, if any, on which (i) the
Indenture is terminated and all of the Notes are redeemed pursuant to Article X
of the Indenture, which date may occur on or after the Clean-Up Call Date, or
(ii) the Class A-2 Notes are redeemed pursuant to Article X of the Indenture,
which date may occur on or after the Class A-2 Clean-Up Call Date.

         "Redemption Price": The Termination Price or the Class A-2 Termination
Price, as applicable.

         "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 selected by the Unaffiliated Seller which are engaged in transactions in
Eurodollar deposits in the international Eurocurrency market (i) with an
established place of business in London, (ii) not controlling, under the control

                                       31

<PAGE>

of or under common control with the Unaffiliated Seller or any affiliate
thereof, (iii) whose quotations appear on the Telerate Page 3750 on the relevant
Interest Determination Date and (iv) which have been designated as such by the
Indenture Trustee.

         "Reimbursement Amount": With respect to any Distribution Date and any
Pool of Mortgage Loans, equals the sum of (a)(i) all Insured Payments previously
received by the Indenture Trustee and all Preference Amounts previously paid by
the Note Insurer and in each case not previously repaid to the Note Insurer
pursuant to Section 8.02(a)(ii) of the Indenture, plus (ii) interest accrued on
each such Insured Payment and Preference Amounts not previously repaid
calculated at the Late Payment Rate from the date the Indenture Trustee received
the related Insured Payment or Preference Amounts were paid by the Note Insurer,
and (b)(i) any amounts then due and owing to the Note Insurer under the
Insurance Agreement (excluding the Premium Amount due on such Distribution
Date), as certified to the Indenture Trustee by the Note Insurer plus (ii)
interest on such amounts at the rate specified in the Insurance Agreement. The
Note Insurer shall notify the Indenture Trustee and the Servicer of the amount
of any Reimbursement Amount.

         "Remaining Excess Cashflow": For a Distribution Date and a Pool of
Mortgage Loans, the Net Monthly Excess Cashflow with respect to such Pool
remaining, if any, after payment of the Shortfall Amount with respect to the
other Pool of Mortgage Loans.

         "REMIC": A "real estate mortgage investment conduit" within the meaning
of Section 860D of the Code.

         "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 I 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 sub-trust of the Trust consisting of the Mortgage
Loans in Pool II. The Cross-collateralization Reserve Account relating to Pool
II shall be part of the REMIC Trust and constitute a "qualified reserve asset"
(as defined in the REMIC Provisions) 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.

         "REO Proceeds": Proceeds received in respect of any REO Mortgage Loan
(including, without limitation, proceeds from the rental of the related
Mortgaged Property).

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<PAGE>

         "REO Property": A Mortgaged Property acquired by the Servicer in the
name of the Indenture Trustee on behalf of the Noteholders through foreclosure
or deed-in-lieu of foreclosure.

         "Request for Release": A request for release in substantially the form
attached as Exhibit F of the Sale and Servicing Agreement.

         "Reserve Interest Rate": With respect to any Interest Determination
Date, the rate per annum that the Indenture Trustee determines to be either (i)
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 three New York City
banks selected by the Indenture Trustee are quoting on the relevant Interest
Determination Date to the principal London offices of leading banks in the
London interbank market or (ii) in the event that the Indenture Trustee can
determine no such arithmetic mean, the lowest one-month U.S. dollar lending rate
which three New York City banks selected by the Indenture Trustee are quoting on
such Interest Determination Date to leading European banks.

         "Reserve Payment Amount": With respect to any Distribution Date and any
Class of Notes, the amount necessary for the funds on deposit in the related
Cross-collateralization Reserve Account to equal the Specified Reserve Amount.

         "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 Indenture Trustee,
any officer assigned to the Corporate Trust Division (or any successor thereto),
including any Vice President, Second Vice President, Senior Trust Officer, Trust
Officer, Assistant Trust Officer, any Assistant Secretary, any trust officer or
any other officer of the Indenture 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. 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.

         "Rolling Six Month Delinquency Rate": For any Distribution Date, the
fraction, expressed as a percentage, equal to the average of the Delinquency
Ratio for each of the six (1, 2, 3, 4 or 5 in the case of the first six (6)
Distribution Dates, as the case may be) immediately preceding Due Periods.

         "Sale": The meaning specified in Section 5.17 of the Indenture.

         "Sale and Servicing Agreement": The Amended and Restated Sale and
Servicing Agreement, dated as of March __, 2004, among the Trust, the Servicer,
the Back-up Servicer, the Depositor, the Collateral Agent and the Indenture
Trustee, providing for, among other things, the sale of the Mortgage Loans from
the Depositor to the Trust and the servicing of the Mortgage Loans.

                                       33

<PAGE>

         "Securities Act": Means the Securities Act of 1933, as amended.

         "Servicer": American Business Credit, Inc., a Pennsylvania corporation,
or any successor appointed as herein provided.

         "Servicer Distribution Date": With respect to any Distribution Date,
the 20th day of the month in which such Distribution Date occurs, or if such
20th day is not a Business Day, the Business Day preceding such 20th day.

         "Servicer Event of Default": As defined in Section 7.01 of the Sale and
Servicing Agreement.

         "Servicer Extension Notice": Has the meaning set forth in Section 8.04
of the Sale and Servicing Agreement.

         "Servicer Remittance Amount": With respect to any Servicer Distribution
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 the Sale and Servicing Agreement
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;

         (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 Sale and Servicing Agreement; and

         (g) Net Foreclosure Profits.

         "Servicer Remittance Report": The monthly report prepared by the
Servicer and delivered to the parties specified in Section 5.16(b) of the Sale
and Servicing Agreement.

                                       34

<PAGE>

         "Servicing Advances": All reasonable and customary "out-of-pocket"
costs and expenses incurred in the performance by the Servicer of its servicing
obligations, including, but not limited to, the cost of (a) the preservation,
restoration 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 of the Sale and Servicing Agreement, 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 of the Sale and Servicing Agreement and
5.22 of the Sale and Servicing Agreement.

         "Servicing Compensation": The Servicing Fee and other amounts to which
the Servicer is entitled pursuant to Section 5.08 of the Sale and Servicing
Agreement.

         "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; provided, however, that prior
to the termination of the Back-up Servicer, the Servicing Fee shall be reduced
on each Payment Date by the amount, if any, of the Back-up Servicing Fee
Deficiency on such Payment Date. The Servicing 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 Balance
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 Fee Rate": 0.50% per annum

         "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 Indenture Trustee, the Collateral Agent and the Note Insurer by the
Servicer, as such list may from time to time be amended.

         "Shortfall Amount": With respect to any Distribution Date and any Class
of Notes, an amount, not less than zero, equal to the excess, if any, of (A) the
sum of (x) the amounts specified in clause (a)(ii) of the definition of the
Principal Distribution Amount for such Class and (y) the amount specified in
clause (b)(vii) of the definition of the Principal Distribution Amount for such
Class and (z) with respect to the Class A-1 Notes, the Class A-1 Mortgage Loan
Interest Shortfall Amount for such Distribution Date over (B) the Available
Funds for such Class and such Distribution Date, without taking into effect any
Insured Payment or Shortfall Amount and prior to the application of the amounts
described in Section 8.02 of the Indenture.

         "Special Advance": As defined in Section 5.18(b) of the Sale and
Servicing Agreement.

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<PAGE>

         "Specified Over-collateralized Amount": Means with respect to any
Distribution Date and any Pool:

         (a) With respect to a Distribution Date occurring on or prior to the
     Stepdown Date and after the Stepdown Date, if the Unaffiliated Seller has
     given five days written notice of its election not to "step down" as in
     described in clause (b) below to the Indenture Trustee and the Note
     Insurer, the amount which is equal to 5.00% of the Maximum Collateral
     Amount for such Pool;

         (b) With respect to a Distribution Date after the Stepdown Date unless
     the Unaffiliated Seller has given five (5) days written notice of its
     election not to "step down" as in described in this clause to the Indenture
     Trustee and the Note Insurer, (i) if the Stepdown Requirement is satisfied,
     the lesser of (x) the amount equal to 5.00% of the Maximum Collateral
     Amount for such Pool and (y) the greater of (A) the amount equal to 10.00%
     of the then outstanding aggregate Principal Balance of the Mortgage Loans
     in the related Pool of Mortgage Loans or (B) 0.50% of the Maximum
     Collateral Amount for such Pool or (ii) if the Stepdown Requirement is not
     satisfied, the amount which is equal to 5.00% of the Maximum Collateral
     Amount for such Pool;

provided, however, that if on any Distribution Date, the Mortgage Portfolio
Performance Test is not satisfied, then the Specified Over-collateralized Amount
will be unlimited during the period that such Mortgage Portfolio Performance
Test is not satisfied.

         "Specified Reserve Amount": Means, with respect to any Pool and any
Distribution Date, the excess, if any, of (x) the Specified Over-collateralized
Amount for such Pool and such Distribution Date, over (y) the
Over-collateralized Amount for such Pool and such Distribution Date.

         "Standard & Poor's" or "S&P": Standard & Poor's Ratings Serivices, 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 Note Insurer.

         "Startup Day": The day designated as such pursuant to Section 2.07(a)
of the Trust Agreement.

         "Step Down Date": The Distribution Date occurring in June 2001.

         "Step Down Requirement": The Stepdown Requirement is satisfied for any
date of determination thereof if as of such date of determination either (i) (x)
the Rolling Six Month Delinquency Rate is less than 9.75%, (y) the Cumulative
Loss Test is satisfied and (z) the Twelve Month Loss Amount is not greater than
or equal to 0.75% of the Pool Principal Balance as of the first day of the
twelfth preceding calendar month or (ii) the Note Insurer, by notice to each of
the parties hereto in accordance with Section 10.06 of the Sale and Servicing
Agreement, expressly waives in writing compliance with the foregoing tests for
such Distribution Date.

                                       36

<PAGE>

         "Subsequent Cut-Off Date": With respect to any Subsequent Mortgage
Loans, the close of business on the last day of the calendar month preceding the
month in which the Subsequent Transfer Date for such Subsequent Mortgage Loans
occurred.

         "Subsequent Contribution Agreement": Any Subsequent Contribution
Agreement, between the Depositor and the Trust, in the form of Exhibit G to the
Sale and Servicing Agreement, relating to the contribution to the Trust of
Subsequent Mortgage Loans.

         "Subsequent Mortgage Loans": The Mortgage Loans hereafter purchased by
the Trust and pledged to the Indenture Trustee with funds on deposit in the
Pre-Funding Account pursuant to Section 2.14 of the Indenture.

         "Subsequent Pledge Agreement": Any Subsequent Pledge Agreement, between
the Trust and the Indenture Trustee, in the form of Exhibit B to the Indenture,
relating to the pledge to the Indenture Trustee, on behalf of the Noteholders
and the Note Insurer, of Subsequent Mortgage Loans.

         "Subsequent Transfer": The purchase by the Trust and pledge to the
Indenture Trustee of the Subsequent Mortgage Loans.

         "Subsequent Transfer Agreement": Any Subsequent Transfer Agreement,
among the Originators, the Unaffiliated Seller and the Depositor, in the form of
the Exhibit A to the Unaffiliated Seller's Agreement, relating to the transfer
to the Depositor of any Subsequent Mortgage Loans.

         "Subsequent Transfer Date": The date on which Subsequent Mortgage Loans
are purchased by the Trust with funds in the Pre-Funding Account, such date
occurring before the end of the Pre-Funding Period.

         "Subservicers": HomeAmerican Credit, Inc., d/b/a Upland Mortgage, a
Pennsylvania corporation, or its successor in interest and New Jersey Mortgage
and Investment Corp., a New Jersey corporation, or its successor in interest.

         "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 of the Sale and Servicing Agreement, a copy of
which shall be delivered, along with any modifications thereto, to the Indenture
Trustee and the Note Insurer.

         "Substitution Adjustment": As to any date on which a substitution
occurs pursuant to Sections 2.06 or 3.03 of the Sale and Servicing Agreement,
the amount (if any) by which the aggregate principal balances (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.

                                       37

<PAGE>

         "Tax Matters Person": The Person or Persons appointed pursuant to
Section 2.07(c) of the Trust Agreement from time to time to act as the "tax
matters person" (within the meaning of the REMIC Provisions) of the REMIC Trust.

         "Tax Return": The federal income tax return on Internal Revenue Service
Form 1066, "U.S. Real Estate Mortgage Investment Conduit 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 the Trust 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 Noteholders 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 Telerate Page 3750 on
the Telerate Service (or such other page as may replace the Telerate page on
that service for the purpose of displaying London interbank offered rates of
major banks).

         "Termination Price": The sum of (i) 100% of the Aggregate Principal
Balance of each outstanding Mortgage Loan and (ii) the greater of (A) the
aggregate amount of accrued and unpaid interest on the Mortgage Loans through
the related Due Period and (B) thirty (30) days' interest thereon, computed at a
rate equal to the related Mortgage Interest Rate, in each case net of the
Servicing Fee, and (iii) any unpaid amount due the Note Insurer.

         "Trust": ABFS Mortgage Loan Trust 1998-4, a Delaware business trust.

         "Trust Agreement": The Trust Agreement, dated as of November 1, 1998,
among the Unaffiliated Seller, the Depositor and the Owner Trustee, relating to
the establishment of the Trust.

         "Trust Certificate": Any one of the Pool I Trust Certificates or the
Pool II Trust Certificates.

         "Trust Certificateholder" or "Holder": A Person in whose name a Trust
Certificate is registered.

         "Trust Estate": All money, instruments and other property subject or
intended to be subject to the lien of the Indenture, for the benefit of the
Noteholders and the Note Insurer, as of any particular time, including, without
limitation, all property and interests, including all proceeds thereof, Granted
to the Indenture Trustee, for the benefit of the Noteholders and the Note
Insurer, pursuant to the Granting Clauses of the Indenture. The Trust Estate
shall consist of two separate sub-trusts comprised of Pool I and Pool II.

         "Trust Indenture Act" or "TIA": The Trust Indenture Act of 1939, as it
may be amended from time to time.

                                       38

<PAGE>

         "Trust Order" and "Trust Request": A written order or request of the
Trust signed on behalf of the Trust by an Authorized Officer of the Owner
Trustee and delivered to the Indenture Trustee or the Authenticating Agent, as
applicable.

         "Twelve Month Loss Amount": With respect to any Distribution Date, an
amount equal to the aggregate of all Liquidated Loan Losses on the Mortgage
Loans which became Liquidated Mortgage Loans during the twelve (12) preceding
Due Periods.

         "Unaffiliated Seller": ABFS 1998-4, Inc., a Delaware corporation.

         "Unaffiliated Seller's Agreement": The Unaffiliated Seller's Agreement,
dated as of November 1, 1998, 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.

         "Underwriter": Prudential Securities Incorporated.

         "Underwriting Guidelines": The underwriting guidelines of the
Originators, a copy of which is attached as an exhibit to the Unaffiliated
Seller's Agreement.

         "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 or any political subdivision thereof, or an estate or
trust 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.








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</TEXT>
</DOCUMENT>
