Promissory Note

30,532.00 June 13, 2002
San Diego, California


FOR VALUE RECEIVED, receipt of which is hereby acknowledged, the undersigned, Joseph J. Lydon ("Payor"), promises to pay to the order of Accredited Home Lenders, Inc., a California corporation ("Accredited"), at 15030 Avenue of Science, Suite 100, San Diego, CA 92128, or order ("Holder"), in lawful money of the United States of America, the principal sum of Thirty Thousand Five Hundred Thirty-Two and 00/100 Dollars ($30,532.00) on the earlier of (i) the fourth anniversary of the date of this Promissory Note (this "Note"), which fourth anniversary is June 13, 2006, and (ii) such date, if any, as Payor's employment with Accredited may terminate (such earlier date, the "Due Date"). In addition, principal shall be payable on each anniversary of the date hereof in an amount equal to the federal income tax credit available to Payor on his tax return for the preceding calendar year with respect to Payor's federal Alternative Minimum Tax liability for calendar year 2001. Principal shall bear interest from the date hereof at a rate of Ten Percent (10.0%) per annum (the "Note Rate") on the unpaid balance of this Note, compounded annually. Accrued but unpaid interest shall be payable on each anniversary of the date hereof and on the Due Date. The entire outstanding balance of principal and accrued but unpaid interest shall be due and payable on the Due Date.


1. Terms and Conditions of Payments. Each payment sh ...