Execution Copy
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SERVICING AGREEMENT
_____________________________
Dated as of October 14, 2003
_____________________________
ABFS WAREHOUSE TRUST 2003-2
as Owner,
CHRYSALIS WAREHOUSE FUNDING, LLC
as Lender
AMERICAN BUSINESS CREDIT, INC.
as Servicer
and
COUNTRYWIDE HOME LOANS SERVICING LP,
as Backup Servicer
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THIS SERVICING AGREEMENT, dated as of October 14, 2003, is executed
among ABFS WAREHOUSE TRUST 2003-2, a Delaware statutory trust (the "Owner"),
CHRYSALIS WAREHOUSE FUNDING, LLC, a New York limited liability company (the
"Lender"), AMERICAN BUSINESS CREDIT, INC., a Pennsylvania corporation (the
"Servicer"), and COUNTRYWIDE HOME LOANS SERVICING LP, a Texas limited
partnership (the "Backup Servicer").
W I T N E S S E T H :
WHEREAS, the Owner is the owner of the Mortgage Loans;
WHEREAS, the Owner and the Servicer wish to prescribe the permanent
management, servicing and control of the Mortgage Loans;
NOW, THEREFORE, in consideration of the mutual agreements hereinafter
set forth, and for other good and valuable consideration, the receipt and
adequacy of which is hereby acknowledged, the Owner, the Servicer, the Lender
and the Backup Servicer agree as follows:
ARTICLE I
DEFINITIONS
Section 1.01 Defined Terms
Whenever used in this Agreement, the following words and phrases,
unless the context otherwise requires, shall have the following meaning
specified in this Article:
Accepted Servicing Practices: With respect to any Mortgage Loan, those
prudent mortgage servicing practices of prudent mortgage lending institutions
which service mortgage loans of the same type as such Mortgage Loans in the
jurisdiction where the related Mortgaged Property is located, taking into
account the Lender's reliance on the Servicer, and in a manner at least equal in
quality to the servicing practices that the Servicer uses for mortgage loans
which it owns.
Agreement: This Servicing Agreement including all exhibits hereto,
amendments hereof and supplements hereto.
APA Assignment: As defined in the Loan Agreement.
Backup Servicer: Countrywide Home Loan Servicing LP, or any of its
successors in interest or any successor under this Agreement appointed as herein
provided.
Backup Servicing Fee: The fee payable to the Backup Servicer on each
Payment Date for its services as Backup Servicer hereunder, in an amount equal
to the greater of (1) the Minimum Backup Servicing Fee and (2) the Backup
Servicing Fee Rate accrued for one month (on the basis of a 360-day year and
twelve 30-day months) on the Principal Balance of the Mortgage Loans as of the
close of business on the Determination Date immediately preceding such Payment
Date; provided, however, if the Servicer has been removed (with or without
cause) as Servicer or has resigned as Servicer or if the Servicer's term as
servicer has expired, and in any such case if a Backup Servicer is no longer
required hereunder, then the Minimum Backup Servicing Fee shall be $0 and the
Backup Servicing Fee Rate shall be 0.00% per annum.
Backup Servicing Fee Rate: 0.04% per annum.
Business Day: Any day other than (i) a Saturday or Sunday, (ii) a day
on which the New York Stock Exchange, the Federal Reserve Bank of New York, the
Custodian or banking and savings and loan institutions in the State of New York,
Connecticut or California or the City of New York or the city or state in which
the Custodian's offices are located are closed, or (iii) a day on which trading
in securities on the New York Stock Exchange or any other major securities
exchange in the United States is not conducted.
Code: The Internal Revenue Code of 1986, as amended from time to time.
Collection Account: The separate demand account or accounts created and
maintained pursuant to Section 4.04 which shall be entitled "[Servicer]
Collection Account in trust for [Owner], and various Mortgagors" and shall be
established at a Qualified Depository, each of which accounts shall in no event
contain funds in excess of the FDIC insurance limits.
Condemnation Proceeds: All awards or settlements in respect of a
Mortgaged Property, whether permanent or temporary, partial or entire, by
exercise of the power of eminent domain or condemnation, to the extent not
required to be released to a Mortgagor in accordance with the terms of the
related Mortgage Loan Documents.
Custodial Agreement: The Custodial Agreement, dated as of October 14,
2003, among Owner, Custodian, Servicer, and Lender, as the same may be amended,
supplemented or otherwise modified from time to time.
Custodial Loan Transmission: As defined in the Custodial Agreement.
Custodian: JPMorgan Chase Bank, its successors and permitted assigns,
or such other custodian as Owner shall designate.
Cut-off Date: With respect to each Mortgage Loan, the date designated
as such in the related ASA Assignment.
Determination Date: The last Business Day of the month immediately
preceding the month of the Payment Date.
Due Date: The day of the month on which the Monthly Payment is due on a
Mortgage Loan, exclusive of any days of grace.
Effective Date: October 14, 2003.
Escrow Account: The separate trust account or accounts created and
maintained pursuant to Section 4.06 which shall be entitled "[Servicer]Escrow
Account, in trust for [Owner] and various Mortgagors" and shall be established
at a Qualified Depository, each of which accounts shall in no event contain
funds in excess of the FDIC insurance limits.
Escrow Payments: With respect to any Mortgage Loan, the amounts
constituting ground rents, taxes, assessments, water rates, sewer rents,
municipal charges, mortgage insurance premiums, fire and hazard insurance
premiums, condominium charges, and any other payments required to be escrowed by
the Mortgagor with the mortgagee pursuant to the Mortgage or any other document.
Event of Default: Any one of the conditions or circumstances enumerated
in Section 9.01.
FDIC: The Federal Deposit Insurance Corporation, or any successor
thereto.
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Fidelity Bond: A fidelity bond to be maintained by the Servicer
pursuant to Section 4.12.
FIRREA: The Financial Institutions Reform, Recovery, and Enforcement
Act of 1989, as amended from time to time.
GAAP: Generally accepted accounting principles as in effect from time
to time in the United States of America.
HUD: The United States Department of Housing and Urban Development or
any successor.
Initial Set-Up Fee: The fee payable to the Backup Servicer on the
Effective Date of this Agreement for the initial cracking of the information
provided by the Servicer pursuant to Section 9.03 hereof, in an amount equal to
$15,000.
Insurance Proceeds: With respect to each Mortgage Loan, proceeds of
insurance policies insuring the Mortgage Loan or the related Mortgaged Property.
Lender: Chrysalis Warehouse Funding, LLC, and its successors and
assigns.
Liquidation Proceeds: Cash received in connection with the liquidation
of a defaulted Mortgage Loan, whether through the sale or assignment of such
Mortgage Loan, trustee's sale, foreclosure sale or otherwise, other than amounts
received following the acquisition of an REO Property pursuant to Section 4.13.
Loan Agreement: The Master Loan and Security Agreement dated as of
October 14, 2003, between the Owner and the Lender, as the same may be amended,
supplemented or otherwise modified from time to time.
Minimum Backup Servicing Fee: $5,500.
Monthly Payment: The scheduled monthly payment of principal and
interest on a Mortgage Loan as adjusted in accordance with changes in the
Mortgage Interest Rate pursuant to the provisions of the Mortgage Note for an
adjustable rate Mortgage Loan.
Mortgage: With respect to a Mortgage Loan, the mortgage, deed of trust
or other instrument, which creates a first lien or second lien (as indicated on
the Mortgage Loan Data Transmission) on the fee simple or a leasehold estate in
such real property.
Mortgage File: Shall have the meaning assigned thereto in the Custodial
Agreement.
Mortgage Interest Rate: The annual rate of interest borne on a Mortgage
Note, which shall be adjusted from time to time with respect to adjustable rate
Mortgage Loans.
Mortgage Loan: An individual Mortgage Loan described herein and as
further identified on the Custodial Loan Transmission, which Mortgage Loan
includes without limitation the Mortgage Loan Documents, the Monthly Payments,
Principal Prepayments, Liquidation Proceeds, Condemnation Proceeds, Insurance
Proceeds, REO Disposition Proceeds and all other rights, benefits, proceeds and
obligations arising from or in connection with such Mortgage Loan.
Mortgage Loan Documents: With respect to a Mortgage Loan, the documents
comprising the Mortgage File for such Mortgage Loan.
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Mortgage Note: The original executed promissory note or other evidence
of the indebtedness of a Mortgagor with respect to a Mortgage Loan.
Mortgaged Property: The real property (including all improvements,
buildings, fixtures, building equipment and personal property thereon and all
additions, alterations and replacements made at any time with respect to the
foregoing) and all other collateral securing repayment of the debt evidenced by
a Mortgage Note.
Mortgagor: The obligor on a Mortgage Note. The Mortgagor is a natural
person who is a party to the Mortgage Note and Mortgage in an individual
capacity.
Nonrecoverable Advance: Any expenses incurred pursuant to Section 4.08
which, in the good faith judgment of the Servicer, may not be ultimately
recoverable by the Servicer from Liquidation Proceeds. The determination by the
Servicer that is has made a Nonrecoverable Advance, shall be evidenced by an
Officer's Certificate of the Servicer delivered to the Owner and detailing the
reasons for such determination.
OCC: Office of the Comptroller of the Currency, its successors and
assigns.
Officers' Certificate: A certificate signed by the Chairman of the
Board, the Vice Chairman of the Board, the President, a Senior Vice President or
a Vice President or by the Treasurer or the Secretary or one of the Assistant
Treasurers or Assistant Secretaries of the Servicer, and delivered to the Owner
as required by this Agreement.
Opinion of Counsel: A written opinion of counsel, who may be an
employee of the party on behalf of whom the opinion is being given, reasonably
acceptable to the Owner.
OTS: Office of Thrift Supervision, its successors and assigns.
Owner: ABFS Warehouse Trust 2003-2, its successors in interest and
assigns.
Pass-Through Transfer: The sale or transfer of same or all of the
Mortgage Loans to a trust as part of a publicly issued or privately placed,
rated or unrated Mortgage pass-through transaction.
Payment Date: The 19th day of any month, or if such 19th day is not a
Business Day, the first Business Day immediately preceding such 19th day. The
first Payment Date shall occur on November 19, 2003.
Person: Any individual, corporation, company, voluntary association,
partnership, joint venture, limited liability company, trust, unincorporated
association or government (or any agency, instrumentality or political
subdivision thereof).
Pledgee Lender: Any lender of the Lender.
Primary Mortgage Insurance Policy: Each primary policy of mortgage
insurance, or any replacement policy therefor obtained by the Servicer pursuant
to Section 4.08.
Prime Rate: The prime rate of U.S. money center banks as published from
time to time in The Wall Street Journal.
Principal Prepayment: Any payment or other recovery of principal on a
Mortgage Loan, full or partial, which is received in advance of its scheduled
Due Date, including any prepayment penalty or premium thereon and which is not
accompanied by an amount of interest representing scheduled interest due on any
date or dates in any month or months subsequent to the month of prepayment.
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Qualified Appraiser: An appraiser, duly appointed by the Servicer, 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, which appraiser and the appraisal
made by such appraiser both satisfy the requirements of Title XI of FIRREA and
the regulations promulgated thereunder, all as in effect on the date the
Mortgage Loan was originated.
Qualified Depository: (a) The Custodian or (b) a depository, the
accounts of which are insured by the FDIC and the short term debt ratings and
the long term deposit ratings of which are rated in one of the two highest
rating categories by Standard & Poor's Ratings Services, a division of The
XxXxxx-Xxxx Companies Inc., Xxxxx'x Investors Service, Inc., and Fitch IBCA Inc.
Qualified Insurer: An insurance company duly qualified as such under
the laws of the states in which the Mortgaged Properties are located, duly
authorized and licensed in such states to transact the applicable insurance
business and to write the insurance provided in accordance with the Approved
Underwriting Guidelines, and approved as an insurer by Xxxxxx Xxx and Xxxxxxx
Mac and whose claims paying ability is rated in the two highest rating
categories by any of the rating agencies with respect to primary mortgage
insurance and in the two highest rating categories by Best's with respect to
hazard and flood insurance.
REMIC: A "real estate mortgage investment conduit" within the meaning
of Section 860D of the Code.
REMIC Provisions: The provisions of the Federal income tax law relating
to a REMIC, which appear at Section 860A through 860G of Subchapter M of Chapter
1, Subtitle A of the Code, and related provisions, and regulations, rulings or
pronouncements promulgated thereunder, as the foregoing may be in effect from
time to time.
REO Disposition: The final sale by the Servicer of any REO Property.
REO Disposition Proceeds: Amounts received by the Servicer in
connection with a related REO Disposition.
REO Property: A Mortgaged Property acquired by the Servicer on behalf
of the Owner as described in Section 4.13.
Servicer: American Business Credit, Inc., or any of its successors in
interest or any successor under this Agreement appointed as herein provided.
Servicing Advances: All customary, reasonable and necessary "out of
pocket" costs and expenses (including reasonable attorneys' fees and
disbursements) incurred prior to, on and subsequent to the Effective Date in the
performance by the Servicer of its servicing obligations relating to each
Mortgage Loan, including, but not limited to, the cost of (a) the preservation,
restoration and protection of the Mortgaged Property, (b) any enforcement,
administrative or judicial proceedings, or any legal work or advice specifically
related to servicing the Mortgage Loans, including but not limited to,
foreclosures, bankruptcies, condemnations, drug seizures, elections,
foreclosures by subordinate or superior lienholders, and other legal actions
incidental to the servicing of the Mortgage Loans (provided that such expenses
are reasonable and that the Servicer specifies the Mortgage Loan(s) to which
such expenses relate), (c) the management and liquidation of the Mortgaged
Property if the Mortgaged Property is acquired in full or partial satisfaction
of the Mortgage, (d) taxes, assessments, water rates, sewer rates and other
charges which are or may become a lien upon the Mortgaged Property, and Primary
Mortgage Insurance Policy premiums and fire and hazard insurance coverage and
(e) compliance with the obligations under Section 4.08.
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Servicing Fee: With respect to each Mortgage Loan, the amount of the
annual fee the Owner shall pay to the Servicer, which shall, for a period of one
full month, be equal to one-twelfth of the product of (a) the applicable
Servicing Fee Rate and (b) the outstanding principal balance of such Mortgage
Loan. Such fee shall be payable monthly, computed on the basis of the same
principal amount and period respecting which any related interest payment on a
Mortgage Loan is computed. The obligation of the Owner to pay the Servicing Fee
is limited to, and the Servicing Fee is payable solely from, the interest
portion (not including recoveries of interest from Liquidation Proceeds or
otherwise) of such Monthly Payment collected by the Servicer, or as otherwise
provided under Section 4.05.
Servicing Fee Rate: The Servicing Fee Rate shall be a rate per annum
equal to 0.35% with respect to any Mortgage Loan; provided, however, that if the
Backup Servicer has succeeded as the successor Servicer hereunder, the Servicing
Fee Rate shall be a rate per annum equal to 0.50% after the Servicing Transfer
Date, provided, however, in the event of an Event of Default under the Loan
Agreement, the Servicing Fee Rate shall be a commercially reasonable rate or per
loan fee (taking into consideration, among other factors, the fact that the Loan
Agreement is no longer a revolving facility) as agreed upon by the Backup
Servicer and the Lender, who agree to act in good faith based upon the then
Principal Balance of the Mortgage Loans outstanding at such time and anticipated
balances going forward; and provided further, that the 0.50% rate shall be
applicable for a minimum of three (3) months following such a Servicing Transfer
Date.
Servicing File: With respect to each Mortgage Loan, the file retained
by the Servicer consisting of originals of all material documents in the
Mortgage File which are not delivered to a Custodian and copies of the Mortgage
Loan Documents set forth in Section 2 of the Custodial Agreement.
Servicing Officer: Any officer of the Servicer involved in, or
responsible for, the administration and servicing of the Mortgage Loans whose
name appears on a list of servicing officers furnished by the Servicer to the
Owner upon request, as such list may from time to time be amended.
Servicing Transfer Costs: All reasonable costs and expenses incurred by
the Backup Servicer in connection with the transfer of servicing from a
predecessor Servicer, including, without limitation, any reasonable costs or
expenses associated with the complete transfer of all servicing data and the
completion, correction or manipulation of such servicing data as may be required
by the Backup Servicer to correct any errors or insufficiencies in the servicing
data or otherwise to enable the Backup Servicer to service the Mortgage Loans
properly and effectively and any fees of MERS, costs of preparing any
assignments of Mortgage, or fees and costs of filing any assignments of Mortgage
that may be required as a results of the transfer of servicing.
Servicing Transfer Date: The date on which the Backup Servicer receives
the written notice of the termination of Servicer pursuant to 9.01 hereof.
Whole Loan Transfer: The sale or transfer of some or all of the
ownership interest in the Mortgage Loans by the Owner to one or more third
parties in whole loan or participation format.
Capitalized terms which are not otherwise defined herein shall have the
meanings assigned to such terms in the Loan Agreement.
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ARTICLE II
SERVICING OF MORTGAGE LOANS; POSSESSION OF SERVICING FILES;
BOOKS AND RECORDS; DELIVERY OF MORTGAGE LOAN DOCUMENTS
Section 2.01 Servicing of Mortgage Loans.
From and after the Effective Date, the Servicer does hereby agree to
service the Mortgage Loans, but subject to the terms of this Agreement. The
rights of the Owner to receive payments with respect to the Mortgage Loans shall
be as set forth in this Agreement.
Section 2.02 Maintenance of Servicing Files.
The Servicer shall maintain a Servicing File consisting of all
documents necessary to service the Mortgage Loans. The possession of each
Servicing File by the Servicer is for the sole purpose of servicing the Mortgage
Loan, and such retention and possession by the Servicer is in a custodial
capacity only. The Servicer acknowledges that the ownership of each Mortgage
Loan, including the Mortgage Note, the Mortgage, all other Mortgage Loan
Documents and all rights, benefits, proceeds and obligations arising therefrom
or in connection therewith, has been vested in the Owner. All rights arising out
of the Mortgage Loans including, but not limited to, all funds received on or in
connection with the Mortgage Loans and all records or documents with respect to
the Mortgage Loans prepared by or which come into the possession of the Servicer
shall be received and held by the Servicer in trust for the exclusive benefit of
the Owner as the owner of the related Mortgage Loans. Any portion of the related
Servicing Files retained by the Servicer shall be appropriately identified in
the Servicer's computer system to clearly reflect the ownership of the related
Mortgage Loans by the Owner and the pledge thereof to the Lender. The Servicer
shall release its custody of the contents of the related Servicing Files only in
accordance with written instructions of the Owner, except when such release is
required as incidental to the Servicer's servicing of the Mortgage Loans, such
written instructions shall not be required.
Section 2.03 Books and Records.
The Servicer shall be responsible for maintaining, and shall maintain,
a complete set of books and records for the Mortgage Loans which shall be
appropriately identified in the Servicer's computer system to clearly reflect
the ownership of the Mortgage Loan by the Owner. In particular, the Servicer
shall maintain in its possession, available for inspection by the Owner, or its
designee and shall deliver to the Owner upon demand, evidence of compliance with
all federal, state and local laws, rules and regulations, as applicable,
including but not limited to documentation as to the method used in determining
the applicability of the provisions of the Flood Disaster Protection Act of
1973, as amended, to the Mortgaged Property, documentation evidencing insurance
coverage and eligibility of any condominium project and periodic inspection
reports as required by Section 4.13. To the extent that original documents are
not required for purposes of realization of Liquidation Proceeds or Insurance
Proceeds, documents maintained by the Servicer may be in the form of microfilm
or microfiche or such other reliable means of recreating original documents,
including but not limited to, optical imagery techniques so long as the Servicer
complies with Accepted Servicing Practices.
The Servicer shall maintain with respect to each Mortgage Loan and
shall make available for inspection by any Owner or its designee the related
Servicing File (or copies thereof) during the time the Owner retains ownership
of a Mortgage Loan and thereafter in accordance with applicable laws and
regulations.
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Section 2.04 Delivery of Mortgage Loan Documents.
The Servicer shall forward to the Custodian on behalf of the Owner and
for the benefit of Lender original documents evidencing an assumption,
modification, consolidation or extension of any Mortgage Loan entered into in
accordance with Section 4.01 or 6.01 promptly after their execution; provided,
however, that the Servicer shall provide the Custodian on behalf of the Owner
and for the benefit of Lender with a certified true copy of any such document
submitted for recordation promptly after its execution, and shall provide the
original of any document submitted for recordation or a copy of such document
certified by the appropriate public recording office to be a true and complete
copy of the original within 180 days of its execution. If delivery is not
completed within 180 days solely due to delays in making such delivery by reason
of the fact that such documents shall not have been returned by the appropriate
recording office, the Servicer shall continue to use its best efforts to effect
delivery as soon as possible thereafter.
From time to time the Servicer may have a need for Mortgage Loan
Documents to be released by the Custodian. If the Servicer shall require any of
the Mortgage Loan Documents, the Servicer shall notify the Custodian in writing
of such request in the form of the request for release provided for in the
Custodial Agreement. The Custodian shall deliver to the Servicer within five (5)
Business Days, any requested Mortgage Loan Document previously delivered to the
Custodian but only with the consent of the Lender, provided that such
documentation is promptly returned to the Custodian when the Servicer no longer
requires possession of the document, and provided that during the time that any
such documentation is held by the Servicer, such possession is in trust for the
benefit of the Owner and Lender.
Section 2.05 Quality Control Procedures.
The Servicer shall maintain at all times an internal quality control
program that verifies, on a regular basis, the existence and accuracy of the
legal documents, credit documents, property appraisals, and underwriting
decisions. The program must be capable of evaluating and monitoring the overall
quality of its servicing activities. The purpose of the program is to ensure
that the Mortgage Loans are serviced in accordance with prudent mortgage banking
practices and accounting principles; guard against dishonest, fraudulent, or
negligent acts; and guard against errors and omissions by officers, employees,
or other authorized persons.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE SERVICER
The Servicer represents, warrants and covenants to the Owner that as of
the Effective Date or as of such date specifically provided herein:
(a) The Servicer is a validly existing corporation in good standing
under the laws of the State of its organization and is qualified to transact
business in, is in good standing under the laws of, and possesses all licenses
necessary for the conduct of its business in, each state in which any Mortgaged
Property is located or is otherwise exempt or not required under applicable law
to effect such qualification or license and no demand for such qualification or
license has been made upon the Servicer by any such state, and in any event the
Servicer is in compliance with the laws of each such State to the extent
necessary to ensure the enforceability of each Mortgage Loan and the servicing
of the Mortgage Loans in accordance with the terms of this Agreement;
(b) The Servicer has full power and authority to execute, deliver and
perform, and to enter into and consummate all transactions contemplated by this
Agreement and to conduct its business as presently conducted, has duly
authorized the execution, delivery and performance of this Agreement, has duly
executed and delivered this Agreement, and this Agreement constitutes a legal,
valid and binding obligation of the Servicer, enforceable against it in
accordance with its terms subject to bankruptcy laws and other similar laws of
general application affecting rights of creditors and subject to the application
of the rules of equity, including those respecting the availability of specific
performance;
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(c) None of the execution and delivery of this Agreement, the
consummation of the transactions contemplated thereby and hereby, or the
fulfillment of or compliance with the terms and conditions of this Agreement
will conflict with any of the terms, conditions or provisions of the Servicer's
articles of incorporation or by-laws or materially conflict with or result in a
material breach of any of the terms, conditions or provisions of any legal
restriction or any agreement or instrument to which the Servicer is now a party
or by which it is bound, or constitute a default or result in an acceleration
under any of the foregoing, or result in the material violation of any law,
rule, regulation, order, judgment or decree to which the Servicer or its
property is subject;
(d) There is no litigation pending or threatened with respect to the
Servicer which is reasonably likely to have a material adverse effect on the
execution, delivery or enforceability of this Agreement, or which is reasonably
likely to have a material adverse effect on the financial condition of the
Servicer;
(e) No consent, approval, authorization or order of any court or
governmental agency or body is required for the execution, delivery and
performance by the Servicer of or compliance by the Servicer with this Agreement
or the consummation of the transactions contemplated by this Agreement except
for consents, approvals, authorizations and orders which have been obtained;
(f) The consummation of the transactions contemplated by this Agreement
is in the ordinary course of business of the Servicer;
(g) The collection and servicing practices used by the Servicer, with
respect to each Mortgage Note and Mortgage have been in all material respects
legal, proper and prudent in the mortgage servicing business. With respect to
escrow deposits and payments that the Servicer collects, all such payments are
in the possession of, or under the control of, the Servicer, and there exist no
deficiencies in connection therewith for which customary arrangements for
repayment thereof have not been made. No escrow deposits or other charges or
payments due under the Mortgage Note have been capitalized under any Mortgage or
the related Mortgage Note;
(h) [RESERVED];
(i) The Servicer does not believe, nor does it have any cause or reason
to believe, that it cannot perform each and every covenant contained in this
Agreement;
(j) No statement, report or other document furnished or to be furnished
pursuant to the Agreement contains or will contain any statement that is or will
be inaccurate or misleading in any material respect or omits to state a material
fact required to be stated therein or necessary to make the information and
statements therein not misleading;
(k) No fraud or misrepresentation or omission of a material fact with
respect to the servicing of a Mortgage Loan has taken place on the part of the
Servicer;
(l) At the time Servicer commenced servicing the Mortgage Loans, either
(i) each Mortgagor was properly notified with respect to Servicer's servicing of
the related Mortgage Loan in accordance with the Xxxxxxxx Xxxxxxxx National
Affordable Housing Act of 1990, as the same may be amended from time to time,
and the regulations provided in accordance with the Real Estate Settlement
Procedures Act or (ii) such notification was not required; and
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(m) At the time Servicer commenced servicing the Mortgage Loans, all
applicable taxing authorities and insurance companies (including primary
mortgage insurance policy insurers, if applicable) and/or agents were notified
of the transfer of the servicing of the Mortgage Loans to Servicer, or its
designee, and Servicer currently receives all related notices, tax bills and
insurance statements (either directly or indirectly through third party tax
services). Additionally, any and all costs, fees and expenses associated with
the Servicer's commencement of the servicing of the Mortgage Loans, including
the costs of any insurer notifications, the transfer or implementation of tax
service contracts, flood certification contracts, and any and all other
servicing transfer-related costs and expenses have been paid for by the Servicer
and will, in no event, be the responsibility of the Owner.
ARTICLE IV
ADMINISTRATION AND SERVICING OF MORTGAGE LOANS
Section 4.01 Servicer to Act as Servicer.
The Servicer, as independent contract servicer, shall service and
administer the Mortgage Loans in accordance with this Agreement and with
Accepted Servicing Practices, and shall have full power and authority, acting
alone, to do or cause to be done any and all things in connection with such
servicing and administration which the Servicer may deem necessary or desirable
and consistent with the terms of this Agreement and with Accepted Servicing
Practices and shall exercise the same care that it customarily employs for its
own account. Except as set forth in this Agreement, the Servicer shall service
the Mortgage Loans in accordance with Accepted Servicing Practices, which
include, but are not limited to, provisions regarding the liquidation of
Mortgage Loans, the collection of Mortgage Loan payments, the payment of taxes,
insurance and other charges, the maintenance of hazard insurance with a
Qualified Insurer, the maintenance of fidelity bond and errors and omissions
insurance, inspections, the restoration of Mortgaged Property, insurance claims,
and title insurance, management of REO Property, permitted withdrawals with
respect to REO Property, liquidation reports, and reports of foreclosures and
abandonments of Mortgaged Property, the transfer of Mortgaged Property, the
release of Mortgage Loan Documents, annual statements, and examination of
records and facilities. In the event of any conflict, inconsistency or
discrepancy between any of the servicing provisions of this Agreement and
Accepted Servicing Practices, the provisions of this Agreement shall control and
be binding upon the Owner and the Servicer. The Owner may, upon the written
consent of Lender, deliver powers-of-attorney to the Servicer sufficient to
allow the Servicer as servicer to execute all documentation requiring execution
on behalf of Owner with respect to the servicing of the Mortgage Loans,
including satisfactions, partial releases, modifications and foreclosure
documentation or, in the alternative, shall as promptly as reasonably possible,
execute and return such documentation to the Servicer.
Consistent with the terms of this Agreement and Accepted Servicing
Practices, the Servicer may waive, modify or vary any term of any Mortgage Loan
or consent to the postponement of any such term or in any manner grant
indulgence to any Mortgagor but only if (i) in the Servicer's reasonable and
prudent determination such waiver, modification, postponement or indulgence is
not materially adverse to the Owner and (ii) the Servicer has obtained the prior
written consent of the Owner and Lender. Without limiting the generality of the
foregoing, upon receipt of a Principal Prepayment in full and deposit of same in
the Collection Account, the Servicer shall continue, and is hereby authorized
and empowered, to prepare, execute and deliver, all instruments of satisfaction
or cancellation, or of partial or full release, discharge and all other
comparable instruments, with respect to the Mortgage Loans and with respect to
the Mortgaged Properties in accordance with the terms of this Agreement and
Accepted Servicing Practices.
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The Servicer shall perform all of its servicing responsibilities
hereunder or may, with the Owner's, the Backup Servicer's and Lender's prior
written approval, cause a subservicer to perform any such servicing
responsibilities on its behalf pursuant to a written subservicing agreement
approved in writing by, and assigned to, the Lender, but the use by the Servicer
of a subservicer shall not release the Servicer from any of its obligations
hereunder and the Servicer shall remain responsible hereunder for all acts and
omissions of each subservicer as fully as if such acts and omissions were those
of the Servicer. Any such subservicer that the Owner and Lender shall approve
shall agree in writing to conform to the Accepted Servicing Practices. The
Servicer shall pay all fees and expenses of each subservicer from its own funds,
and a subservicer's fee shall not exceed the Servicing Fee.
At the cost and expense of the Servicer, without any right of
reimbursement from the Collection Account, the Servicer shall be entitled to
terminate the rights and responsibilities of a subservicer and arrange, with the
Owner's, the Backup Servicer's and Lender's prior written approval, for any
servicing responsibilities to be performed by a successor subservicer meeting
the requirements in the preceding paragraph, provided, however, that nothing
contained herein shall be deemed to prevent or prohibit the Servicer, at the
Servicer's option, from electing to service the related Mortgage Loans itself.
In the event that the Servicer's responsibilities and duties under this
Agreement are terminated pursuant to Section 8.04, 9.01 or 10.02, and if
requested to do so in writing by the Owner, the Backup Servicer and the Lender,
the Servicer shall at its own cost and expense terminate the rights and
responsibilities of each subservicer effective as of the date of termination of
the Servicer. The Servicer shall pay all fees, expenses or penalties necessary
in order to terminate the rights and responsibilities of each subservicer from
the Servicer's own funds without reimbursement from the Owner or Lender.
Notwithstanding any of the provisions of this Agreement relating to
agreements or arrangements between the Servicer and a subservicer or any
reference herein to actions taken through a subservicer or otherwise, the
Servicer shall not be relieved of its obligations to the Owner and Lender, the
Backup Servicer's and shall be obligated to the same extent and under the same
terms and conditions as if it alone were servicing and administering the
Mortgage Loans. The Servicer shall be entitled to enter into an agreement with a
subservicer for indemnification of the Servicer by the subservicer and nothing
contained in this Agreement shall be deemed to limit or modify such
indemnification.
Any subservicing agreement and any other transactions or services
relating to the Mortgage Loans involving a subservicer shall be deemed to be
between such subservicer and Servicer alone, and the Owner shall have no
obligations, duties or liabilities with respect to such subservicer including no
obligation, duty or liability of Owner to pay such subservicer's fees and
expenses. For purposes of distributions by the Servicer pursuant to this
Agreement, the Servicer shall be deemed to have received a payment on a Mortgage
Loan when a subservicer has received such payment.
Section 4.02 Collection of Mortgage Loan Payments.
Continuously from the Effective Date until the date each Mortgage Loan
ceases to be subject to this Agreement, the Servicer will proceed with
reasonable diligence to collect all payments due under each Mortgage Loan when
the same shall become due and payable and shall, to the extent such procedures
shall be consistent with this Agreement and the terms and provisions of related
Primary Mortgage Insurance Policy, follow such collection procedures as it
follows with respect to mortgage loans comparable to the Mortgage Loans and held
for its own account and in accordance with Accepted Servicing Practices.
Further, the Servicer will take reasonable care in ascertaining and estimating
annual ground rents, taxes, assessments, water rates, fire and hazard insurance
premiums, mortgage insurance premiums, and all other charges that, as provided
in the Mortgage, will become due and payable to the end that the installments
payable by the Mortgagors will be sufficient to pay such charges as and when
they become due and payable.
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Section 4.03 Realization Upon Defaulted Mortgage Loans.
The Servicer shall use its reasonable efforts, consistent with Accepted
Servicing Practices, to foreclose upon or otherwise comparably convert the
ownership of properties securing such of the Mortgage Loans as come into and
continue in default and as to which no satisfactory arrangements can be made for
collection of delinquent payments pursuant to Section 4.01. The Servicer shall
use its reasonable efforts to realize upon defaulted Mortgage Loans in such
manner as will maximize the receipt of principal and interest by the Owner and
Lender, taking into account, among other things, the timing of foreclosure
proceedings. The foregoing is subject to the provisions that, in any case in
which Mortgaged Property shall have suffered damage, the Servicer shall not be
required to expend its own funds toward the restoration of such property unless
it shall determine in its discretion (i) that such restoration will increase the
proceeds of liquidation of the related Mortgage Loan to the Owner and Lender
after reimbursement to itself for such expenses, and (ii) that such expenses
will be recoverable by the Servicer through Insurance Proceeds or Liquidation
Proceeds from the related Mortgaged Property, as contemplated in Section 4.05.
The Servicer shall notify the Owner and Lender in writing of the commencement of
foreclosure proceedings. The Servicer shall be responsible for all costs and
expenses incurred by it in any such proceedings or functions as Servicing
Advances; provided, however, that it shall be entitled to reimbursement therefor
from the related Mortgaged Property, as contemplated in Section 4.05.
Notwithstanding anything to the contrary contained herein, in connection with a
foreclosure or acceptance of a deed in lieu of foreclosure, in the event the
Servicer has reasonable cause to believe that a Mortgaged Property is
contaminated by hazardous or toxic substances or wastes, or if the Owner or
Lender otherwise requests an environmental inspection or review of such
Mortgaged Property, such an inspection or review is to be conducted by a
qualified inspector. Upon completion of the inspection, the Servicer shall
promptly provide the Owner and Lender with a written report of the environmental
inspection. After reviewing the environmental inspection report, the Owner,
after receipt of written consent of the Lender, and Lender shall determine how
the Servicer shall proceed with respect to the Mortgaged Property.
Section 4.04 Establishment of Collection Accounts; Deposits in
Collection Accounts.
The Servicer shall segregate and hold all funds collected and received
pursuant to each Mortgage Loan separate and apart from any of its own funds and
general assets and shall establish and maintain one or more Collection Accounts.
Each Collection Account shall be established with a Qualified Depository. Funds
deposited in the Collection Account may be drawn on only by the Lender in
accordance with Section 4.05. The creation of any Collection Account shall be
evidenced by a Deposit Account Control Agreement in the form shown in Exhibit B
hereto. The original of such Deposit Account Control Agreement shall be
delivered to the Owner and Lender upon request.
The Servicer shall deposit in the Collection Account or Accounts no
later than one Business Day after receipt and retain therein the following
payments and collections:
(i) all payments on account of principal and interest, including
Principal Prepayments, on the Mortgage Loans received after the Cut-off Date;
(ii) all Liquidation Proceeds and REO Disposition Proceeds received
after the Cut-off Date;
(iii) any net amounts received by the Servicer after the Cut-off Date
in connection with any REO Property pursuant to Section 4.13;
(iv) all Insurance Proceeds received after the Cut-off Date including
amounts required to be deposited pursuant to Sections 4.08 and 4.10, other than
proceeds to be held in the Escrow Account and applied to the restoration or
repair of the Mortgaged Property or released to the Mortgagor in accordance with
the Servicer's normal servicing procedures, the loan documents or applicable
law;
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(v) all Condemnation Proceeds affecting any Mortgaged Property received
after the Cut-off Date other than proceeds to be held in the Escrow Account and
applied to the restoration or repair of the Mortgaged Property or released to
the Mortgagor in accordance with the Servicer's normal servicing procedures, the
loan documents or applicable law;
(vi) any amounts received after the Cut-off Date and required to be
deposited in the Collection Account pursuant to 6.02; and
(vii) funds resulting from the liquidation of any Permitted Investments
together with an amount equal to any losses related thereto which shall be
deposited into the Collection Account no later than one (1) Business Day prior
to the related Payment Date.
The foregoing requirements for deposit in the Collection Account shall
be exclusive, it being understood and agreed that, without limiting the
generality of the foregoing, payments in the nature of late payment charges and
assumption fees, to the extent permitted by Section 6.01, need not be deposited
by the Servicer in the Collection Account. Any interest paid on funds deposited
in the Collection Account by the Qualified Depository shall accrue to the
benefit of the Servicer and the Servicer shall be entitled to be paid the amount
of such interest from the Collection Account pursuant to Section 4.05(iv).
Section 4.05 Permitted Withdrawals From the Collection Account.
The Lender may, from time to time, cause to be made withdrawals from
the Collection Account for the following purposes:
(i) to make payments in the amounts and in the manner provided for in
Section 5.01;
[(ii) Reserved;]
(iii) to reimburse Servicer for unreimbursed Servicing Advances, the
Servicer's right to reimburse itself pursuant to this subclause (iii) with
respect to any Mortgage Loan being limited to excess Liquidation Proceeds,
Condemnation Proceeds and Insurance Proceeds (after application of all such
amounts to principal, interest on late fees on the related Mortgage Loan)
received after the Cut-off Date related to such Mortgage Loan. The Servicer will
provide the Owner and Lender with copies of invoices, bills and other
documentation relating to Servicing Advances that are to be reimbursed from the
Collection Account, in a form that would permit the Owner or Lender to fully
recover any amounts due pursuant to any insurance policies. In no instance shall
Servicing Advances related to a Mortgage Loan be reimbursed from payments or
proceeds of any other Mortgage Loan;
(iv) to pay interest earned on the balance in the Collection Account;
(v) only if the Servicer is the Back-up Servicer, to reimburse the
Servicer for any Nonrecoverable Advances made by it;
(vi) to transfer funds to another Qualified Depository in accordance
with Section 4.09 hereof;
(vii) to remove funds inadvertently placed in the Collection Account in
error by the Servicer; and
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(viii) to clear and terminate the Collection Account upon the
termination of this Agreement.
Section 4.06 Establishment of Escrow Accounts; Deposits in Escrow
Accounts.
The Servicer shall segregate and hold all funds collected and received
pursuant to each Mortgage Loan which constitute Escrow Payments separate and
apart from any of its own funds and general assets and shall establish and
maintain one or more Escrow Accounts. Each Escrow Account shall be established
with a Qualified Depository. Funds deposited in an Escrow Account may be drawn
on by the Servicer in accordance with Section 4.07. The creation of any Escrow
Account shall be evidenced by a letter agreement in the form shown in Exhibit C.
The original of such letter agreement shall be furnished to the Owner, the
Backup Servicer's and Lender upon request.
The Servicer shall deposit in the Escrow Account or Accounts on a daily
basis and retain therein:
(i) all Escrow Payments collected on account of the Mortgage Loans, for
the purpose of effecting timely payment of any items as are required under the
terms of this Agreement;
(ii) all Insurance Proceeds which are to be applied to the restoration
or repair of any Mortgaged Property; and
(iii) all Servicing Advances for Mortgagors whose Escrow Payments are
insufficient to cover escrow disbursements.
The Servicer shall make withdrawals from an Escrow Account only to
effect such payments as are required under this Agreement, and for such other
purposes as shall be as set forth in and in accordance with Section 4.07. The
Servicer shall be entitled to retain any interest paid on funds deposited in an
Escrow Account by the Qualified Depository other than interest on escrowed funds
required by law to be paid to the Mortgagor and, to the extent required by law,
the Servicer shall pay interest on escrowed funds to the Mortgagor
notwithstanding that the Escrow Account is non-interest bearing or that interest
paid thereon is insufficient for such purposes.
Section 4.07 Permitted Withdrawals From Escrow Account.
Withdrawals from the Escrow Account may be made by the Servicer only:
(i) to effect timely payments of ground rents, taxes, assessments,
water rates, fire and hazard insurance premiums, Primary Mortgage Insurance
Policy premiums, if applicable, and comparable items;
(ii) to reimburse Servicer for any Servicing Advance made by Servicer
with respect to a related Mortgage Loan but only from amounts received on the
related Mortgage Loan which represent late payments or collections of Escrow
Payments thereunder;
(iii) to refund to the Mortgagor any funds as may be determined to be
overages;
(iv) for transfer to the Collection Account in connection with an
acquisition of REO Property;
(v) for application to restoration or repair of the Mortgaged Property
securing a Mortgage Loan to the extent that the applicable Escrow Payments
relate to such Mortgage Loan;
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(vi) to pay to the Servicer, or to the Mortgagor to the extent required
by law, any interest paid on the funds deposited in the Escrow Account;
(vii) to pay to the Mortgagors or other parties Insurance Proceeds
deposited in accordance with Section 4.06;
(viii) to remove funds inadvertently placed in an Escrow Account in
error by the Servicer; and
(ix) to clear and terminate the Escrow Account on the termination of
this Agreement.
As part of its servicing duties, the Servicer shall pay to the
Mortgagors interest on funds in an Escrow Account, to the extent required by
law, and to the extent that interest earned on funds in the Escrow Account is
insufficient, shall pay such interest from its own funds, without any
reimbursement therefor.
Section 4.08 Payment of Taxes, Insurance and Other Charges; Maintenance
of Primary Mortgage Insurance Policies; Collections Thereunder.
With respect to each Mortgage Loan, the Servicer shall maintain
accurate records reflecting the status of ground rents, taxes, assessments,
water rates and other charges which are or may become a lien upon the Mortgaged
Property and the status of fire and hazard insurance coverage and shall obtain,
from time to time, all bills for the payment of such charges, including renewal
premiums and shall effect payment thereof prior to the applicable penalty or
termination date and at a time appropriate for securing maximum discounts
allowable, employing for such purpose deposits of the Mortgagor in the Escrow
Account which shall have been estimated and accumulated by the Servicer in
amounts sufficient for such purposes, as allowed under the terms of the Mortgage
or applicable law. To the extent that the Mortgage does not provide for Escrow
Payments, the Servicer shall determine that any such payments are made by the
Mortgagor at the time they first become due. The Servicer assumes full
responsibility for the timely payment of all such bills and shall effect timely
payments of all such bills irrespective of the Mortgagor's faithful performance
in the payment of same or the making of the Escrow Payments and shall make
advances from its own funds to effect such payments.
Section 4.09 Maintenance of Hazard Insurance.
The Servicer shall cause to be maintained for each Mortgage Loan fire
and hazard insurance with extended coverage as is customary in the area where
the Mortgaged Property is located in an amount which is equal to the lesser of
(i) the maximum insurable value of the improvements securing such Mortgage Loan
or (ii) the greater of (a) the outstanding principal balance of the Mortgage
Loan, and (b) the percentage such that the proceeds thereof shall be sufficient
to prevent the Mortgagor and/or the Mortgagee from becoming a co-insurer. If the
Mortgaged Property is in an area identified in the Federal Register by the
Federal Emergency Management Agency as being a special flood hazard area that
has federally-mandated flood insurance requirements, the Servicer will cause to
be maintained a flood insurance policy meeting the requirements of the current
guidelines of the Federal Insurance Administration with a generally acceptable
insurance carrier, in an amount representing coverage not less than the least of
(i) the outstanding principal balance of the Mortgage Loan, (ii) the maximum
insurable value of the improvements securing such Mortgage Loan or (iii) the
maximum amount of insurance which is available under the Flood Disaster
Protection Act of 1973, as amended. The Servicer shall also maintain on the REO
Property, fire and hazard insurance with extended coverage in an amount which is
at least equal to the maximum insurable value of the improvements which are a
part of such property, liability insurance and, to the extent required and
available under the Flood Disaster Protection Act of 1973, as amended, flood
insurance in an amount as provided above. Any amounts collected by the Servicer
under any such policies other than amounts to be deposited in the Escrow Account
and applied to the restoration or repair of the Mortgaged Property or REO
Property, or released to the Mortgagor in accordance with the Servicer's normal
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servicing procedures, shall be deposited in the Collection Account, subject to
withdrawal pursuant to Section 4.05. It is understood and agreed that no other
additional insurance need be required by the Servicer or the Mortgagor or
maintained on property acquired in respect of the Mortgage Loans, other than
pursuant to such applicable state or federal laws and regulations as shall at
any time be in force and as shall require such additional insurance. All such
policies shall be endorsed with standard mortgagee clauses with loss payable to
the Servicer and its successors and/or assigns and shall provide for at least
thirty days prior written notice of any cancellation, reduction in the amount or
material change in coverage to the Servicer. The Servicer shall not interfere
with the Mortgagor's freedom of choice in selecting either his insurance carrier
or agent, provided, however, that the Servicer shall not accept any such
insurance policies from insurance companies unless such companies currently
reflect a General Policy Rating in Best's Key Rating Guide currently acceptable
to Xxxxxx Xxx and are licensed to do business in the state wherein the property
subject to the policy is located.
Section 4.10 [RESERVED]
Section 4.11 Fidelity Bond, Errors and Omissions Insurance.
The Servicer shall maintain, at its own expense, a blanket fidelity
bond and an errors and omissions insurance policy, with broad coverage with
responsible companies on all officers, employees or other persons acting in any
capacity with regard to the Mortgage Loans and who handle funds, money,
documents and papers relating to the Mortgage Loans. The Fidelity Bond and
errors and omissions insurance shall be in the form of the Mortgage Banker's
Blanket Bond and shall protect and insure the Servicer against losses, including
forgery, theft, embezzlement, fraud, errors and omissions and negligent acts of
such persons. Such Fidelity Bond and errors and omissions insurance shall also
protect and insure the Servicer against losses in connection with the failure to
maintain any insurance policies required pursuant to this Agreement and the
release or satisfaction of a Mortgage Loan without having obtained payment in
full of the indebtedness secured thereby. No provision of this Section 4.12
requiring the Fidelity Bond and errors and omissions insurance shall diminish or
relieve the Servicer from its duties and obligations as set forth in this
Agreement. The minimum coverage under any such Fidelity Bond and insurance
policy shall be at least equal to the corresponding amounts required under
Accepted Servicing Practices. The Servicer shall, upon request of Lender,
deliver to the Lender a certificate from the surety and the insurer as to the
existence of the Fidelity Bond and errors and omissions insurance policy and
shall obtain a statement from the surety and the insurer that such Fidelity Bond
or insurance policy shall in no event be terminated or materially modified
without thirty days prior written notice to the Owner and Lender. The Servicer
shall notify the Owner and Lender within five Business Days of receipt of notice
that such Fidelity Bond or insurance policy will be, or has been, materially
modified or terminated. The Owner, Lender and their respective successors or
assigns as their interests may appear must be named as loss payees on the
Fidelity Bond and as additional insured on the errors and omissions policy.
Section 4.12 Title, Management and Disposition of REO Property.
In the event that title to any Mortgaged Property is acquired in
foreclosure or by deed in lieu of foreclosure, the deed or certificate of sale
shall be taken in the name of the Owner or its designee as designated in writing
by Lender. Any such Person or Persons holding such title other than the Owner
shall acknowledge in writing that such title is being held as nominee for the
benefit of the Owner and Lender.
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The Servicer shall notify the Owner and Lender in accordance with
Accepted Servicing Practices of each acquisition of REO Property upon such
acquisition, and thereafter assume the responsibility for marketing such REO
Property in accordance with Accepted Servicing Practices. Thereafter, the
Servicer shall continue to provide certain administrative services to the Owner
and Lender relating to such REO Property as set forth in this Section 4.13. The
REO Property must be sold within three years following the end of the calendar
year of the date of acquisition, unless a REMIC election has been made with
respect to the arrangement under which the Mortgage Loans and REO Property are
held and (i) the Owner and Lender shall have been supplied with an Opinion of
Counsel to the effect that the holding by the related trust of such Mortgaged
Property subsequent to such three-year period (and specifying the period beyond
such three-year period for which the Mortgaged Property may be held) will not
result in the imposition of taxes on "prohibited transactions" of the related
trust as defined in Section 860F of the Code, or cause the related REMIC to fail
to qualify as a REMIC, in which case the related trust may continue to hold such
Mortgaged Property (subject to any conditions contained in such Opinion of
Counsel), or (ii) the Owner (at the Servicer's expense) or the Servicer shall
have applied for, prior to the expiration of such three-year period, an
extension of such three-year period in the manner contemplated by Section
856(e)(3) of the Code, in which case the three-year period shall be extended by
the applicable period. If a period longer than three years is permitted under
the foregoing sentence and is necessary to sell any REO Property, (i) the
Servicer shall report monthly to the Owner and Lender as to progress being made
in selling such REO Property and (ii) if, with the written consent of the Owner
and Lender, a purchase money mortgage is taken in connection with such sale,
such purchase money mortgage shall name the Servicer as mortgagee, and such
purchase money mortgage shall not be held pursuant to this Agreement, but
instead a separate participation agreement between the Servicer and Owner shall
be entered into with respect to such purchase money mortgage.
Notwithstanding any other provision of this Agreement, if a REMIC
election has been made, no Mortgaged Property held by a REMIC shall be rented
(or allowed to continue to be rented) or otherwise used for the production of
income by or on behalf of the related trust or sold in such a manner or pursuant
to any terms that would (i) cause such Mortgaged Property to fail to qualify at
any time as "foreclosure property" within a meaning of Section 860G(a)(8) of the
Code, (ii) subject the related trust to the imposition of any federal or state
income taxes on "net income from foreclosure property" with respect to such
Mortgaged Property within the meaning of Section 860G(c) of the Code, or (iii)
cause the sale of such Mortgaged Property to result in the receipt by the
related trust or any income from non-permitted assets as described in Section
860F(a) (2)(B) of the Code, unless the Servicer has agreed to indemnify and hold
harmless the related trust with respect to the imposition of any such taxes.
The Servicer shall, either itself or through an agent selected by the
Servicer, and in accordance with the Accepted Servicing Practices, manage,
conserve, protect and operate each REO Property in the same manner that it
manages, conserves, protects and operates other foreclosed property for its own
account, and in the same manner that similar property in the same locality as
the REO Property is managed. Each REO Disposition shall be carried out by the
Servicer at such price and upon such terms and conditions as the Servicer deems
to be in the best interest of the Owner and Lender. The REO Disposition Proceeds
from the sale of the REO Property shall be promptly deposited in the Collection
Account. As soon as practical thereafter, the expenses of such sale shall be
paid and the Servicer shall reimburse itself for any related Servicing Advances.
The Servicer shall cause each REO Property to be inspected promptly
upon the acquisition of title thereto and shall cause each REO Property to be
inspected at least monthly thereafter or more frequently as may be required by
the circumstances. The Servicer shall make or cause the inspector to make a
written report of each such inspection. Such reports shall be retained in the
Servicing File and copies thereof shall be forwarded by the Servicer to the
Owner.
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Notwithstanding anything to the contrary set forth in this Section
4.13, the parties hereto hereby agree that the Owner, upon the written consent
of Lender, shall be entitled to manage, conserve, protect and operate each REO
Property for its own benefit (such option, an "REO Option"). In connection with
the exercise of an REO Option, the prior two paragraphs and the related
provisions of Section 4.03 and Section 4.04(iii) (such provisions, the "REO
Marketing Provisions") shall be revised as follows. Following the acquisition of
any Mortgaged Property, the Servicer shall submit to the Owner and Lender copies
of invoices, bills and other documentation relating to Servicing Advances in a
form that would permit the Owner or Lender to fully recover any amounts due
pursuant to any insurance policies and, upon exercising the REO Option, the
Owner shall promptly reimburse the Servicer for such amounts. In the event the
REO Option is exercised with respect to an REO Property, Section 4.04 (iii)
shall not be applicable thereto. References made in Section 4.03 with respect to
the reimbursement of Servicing Advances shall, for purposes of such REO
Property, be deemed to be covered by this paragraph. The Owner acknowledges
that, in the event it exercises an REO Option, with respect to the related REO
Property, there shall be no breach by the Servicer based upon or arising out of
the Servicer's failure to comply with the REO Marketing Provisions.
ARTICLE V
PAYMENTS
Section 5.01 Remittances.
On each Payment Date, the Lender shall cause to be remitted all amounts
credited to the Collection Account as of the close of business on the related
preceding Determination Date, net of charges against or withdrawals from the
Collection Account pursuant to Section 4.05. One Business Day prior to each
Payment Date, the Servicer shall deliver to the Lender a remittance report. The
Lender shall confirm the amounts contained in the report and authorize the
remittance of such amounts in the following order of priority:
(a) to pay the fees and expenses of the trustee of the Owner;
(b) to pay the fees and expenses of the Custodian;
(c) to pay any Servicing Fee then due;
(d) to pay the accrued Back-up Servicing Fee then due, including any
Servicing Transfer Costs payable pursuant to Section 9.03 hereof;
(e) to pay the accrued compensation then due to the "Administrator"
under the Administration Agreement dated as of October 14, 2003
between the Borrower and the Servicer;
(f) to pay to the Lender the unreimbursed Lender Expenses and
Indemnified Liabilities of the Lender-Related Parties;
(g) to pay the interest due to the Lender;
(h) to pay the principal due to the Lender to satisfy any Borrowing
Base Shortfall or otherwise;
(i) to pay the Backup Servicer for any Nonrecoverable Advances made by
it; and
(j) to pay the balance to the Owner.
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Section 5.02 Statements to the Owner and Lender.
The Servicer shall furnish to the Owner, the Backup Servicer and Lender
an individual Mortgage Loan accounting report (a "Report"), as of the last
Business Day of each month, in the Servicer's assigned loan number order to
document Mortgage Loan payment activity on an individual Mortgage Loan basis.
With respect to each month, such Report shall be received by the Owner, the
Backup Servicer and Lender (i) no later than the fifth Business Day of the
following month of the related Payment Date on a disk or tape or other
computer-readable format, in such format as may be mutually agreed upon by the
Owner, Lender and the Servicer, and (ii) no later than the tenth Business Day of
the following month of the related Payment Date in hard copy (provided, however,
that if the Backup Servicer has succeeded as the successor Servicer hereunder,
the duty to provide such Report in hard copy shall be at the option of the
successor Servicer), which Report shall contain the following:
(i) With respect to each Monthly Payment (on both an actual and
scheduled basis with respect to Mortgage Loan balances and on an actual basis
with respect to paid-through dates), the amount of such remittance allocable to
principal (including a separate breakdown of any Principal Prepayment, including
the date of such prepayment, and any prepayment penalties or premiums, along
with a detailed report of interest on Principal Prepayment amounts remitted in
accordance with Section 5.01);
(ii) with respect to each Monthly Payment, the amount of such
remittance allocable to interest;
(iii) the aggregate Stated Principal Balance of the Mortgage Loans;
(iv) the aggregate of any Servicing Advances reimbursed to the Servicer
during the prior distribution period pursuant to Section 4.05;
(v) the number and aggregate outstanding principal balances of Mortgage
Loans (a) delinquent (1) 30 to 59 days, (2) 60 to 89 days, (3) 90 days or more;
(b) as to which foreclosure has commenced; and (c) as to which REO Property has
been acquired; and
(vi) such other reports as may reasonably be required by the Owner or
Lender.
The Servicer shall also provide a trial balance, sorted in the Owner's
assigned loan number order, in such form as the Servicer, Lender and the Owner
shall agree, with each such Report.
The Servicer shall prepare and file any and all information statements
or other filings required to be delivered to any governmental taxing authority
or to Owner pursuant to any applicable law with respect to the Mortgage Loans
and the transactions contemplated hereby. In addition, the Servicer shall
provide the Owner with such information concerning the Mortgage Loans as is
necessary for the Owner to prepare its federal income tax return as the Owner
may reasonably request from time to time.
In addition, not more than 60 days after the end of each calendar year,
the Servicer shall furnish to each Person who was an Owner at any time during
such calendar year an annual statement in accordance with the requirements of
applicable federal income tax law together with a copy to Lender as to the
aggregate of remittances of principal and interest for the applicable portion of
such year.
Section 5.03 [Reserved].
Section 5.04 Liquidation Reports.
Upon the foreclosure sale of any Mortgaged Property or the acquisition
thereof by the Owner pursuant to a deed-in-lieu of foreclosure, the Servicer
shall submit to the Owner a liquidation report with respect to such Mortgaged
Property in such form as the Servicer and the Owner shall agree. The Servicer
shall also provide reports on the status of REO Property containing such
information as Owner may reasonably require.
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ARTICLE VI
GENERAL SERVICING PROCEDURES
Section 6.01 Assumption Agreements.
The Servicer will, to the extent it has knowledge of any conveyance or
prospective conveyance by any Mortgagor of a Mortgaged Property (whether by
absolute conveyance or by contract of, sale, and whether or not the Mortgagor
remains or is to remain liable under the Mortgage Note and/or the Mortgage),
exercise its rights to accelerate the maturity of such Mortgage Loan under any
"due-on-sale" clause to the extent permitted by law; provided, however, that the
Servicer shall not exercise any such rights if prohibited by law or the terms of
the Mortgage Note from doing so or if the exercise of such rights would impair
or threaten to impair any recovery under the related Primary Mortgage Insurance
Policy, if any. If the Servicer reasonably believes it is unable under
applicable law to enforce such "due-on-sale" clause, the Servicer, with the
approval of the Owner and Lender (such approval not to be unreasonably
withheld), will enter into an assumption agreement with the person to whom the
Mortgaged Property has been conveyed or is proposed to be conveyed, pursuant to
which such person becomes liable under the Mortgage Note and, to the extent
permitted by applicable state law, the Mortgagor remains liable thereon. Where
an assumption is allowed pursuant to this Section 6.01, the Servicer, with the
prior consent of the primary mortgage insurer, if any, is authorized to enter
into a substitution of liability agreement with the person to whom the Mortgaged
Property has been conveyed or is proposed to be conveyed pursuant to which the
original mortgagor is released from liability and such Person is substituted as
mortgagor and becomes liable under the related Mortgage Note. Any such
substitution of liability agreement shall be in lieu of an assumption agreement.
In connection with any such assumption or substitution of liability,
the Servicer shall follow the underwriting practices and procedures of the
Xxxxxx Xxx Guide. With respect to an assumption or substitution of liability,
the Mortgage Interest Rate borne by the related Mortgage Note and the amount of
the Monthly Payment may not be changed. The Servicer shall notify the Owner and
Lender that any such substitution of liability or assumption agreement has been
completed by forwarding to the Owner and Lender the original of any such
substitution of liability or assumption agreement, which document shall be added
to the related Mortgage Loan Documents and shall, for all purposes, be
considered a part of such related mortgage file to the same extent as all other
documents and instruments constituting a part thereof. All fees collected by the
Servicer for entering into an assumption or substitution of liability agreement
shall belong to the Servicer.
Notwithstanding the foregoing paragraphs of this section or any other
provision of this Agreement, the Servicer shall not be deemed to be in default,
breach or any other violation of its obligations hereunder by reason of any
assumption of a Mortgage Loan by operation of law or any assumption which the
Servicer may be restricted by law from preventing, for any reason whatsoever.
For purposes of this Section 6.01, the term "assumption" is deemed to also
include a sale of the Mortgaged Property subject to the Mortgage that is not
accompanied by an assumption or substitution of liability agreement.
Section 6.02 Satisfaction of Mortgages and Release of Mortgage Loan
Documents.
Upon the payment in full of any Mortgage Loan, the Servicer will
immediately notify the Custodian with a certification and request for release by
a Servicing Officer, which certification shall include a statement to the effect
that all amounts received in connection with such payment which are required to
be deposited in the Collection Account pursuant to Section 4.04 have been so
deposited, and a request for delivery to the Servicer of the portion of the
Mortgage Loan Documents held by the Custodian, and unless the related Mortgage
Loans are the subject of a Pass-Through Transfer, such request is to be
acknowledged by the Owner and Lender. Upon receipt of such certification and
request, the Owner and Lender shall promptly release or cause the Custodian to
promptly release the related Mortgage Loan Documents to the Servicer and the
Servicer shall prepare and deliver for execution by the Owner or at the Owner's
option execute under the authority of a power of attorney delivered to the
Servicer by the Owner any satisfaction or release. No expense incurred in
connection with any instrument of satisfaction or deed of reconveyance shall be
chargeable to the Collection Account.
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In the event the Servicer satisfies or releases a Mortgage without
having obtained payment in full of the indebtedness secured by the Mortgage or
should it otherwise prejudice any right the Owner or Lender may have under the
mortgage instruments, the Servicer, upon written demand, shall remit within two
Business Days to the Owner the then outstanding principal balance of the related
Mortgage Loan by deposit thereof in the Collection Account. The Servicer shall
maintain the Fidelity Bond insuring the Servicer against any loss it may sustain
with respect to any Mortgage Loan not satisfied in accordance with the
procedures set forth herein and in accordance with Accepted Servicing Practices.
From time to time and as appropriate for the servicing or foreclosure
of the Mortgage Loans, including for the purpose of collection under any Primary
Mortgage Insurance Policy, upon request of the Servicer and delivery to the
Custodian of a servicing receipt signed by a Servicing Officer (and unless the
related Mortgage Loans are the subject of a Pass-Through Transfer, acknowledged
by the Owner and Lender), the Custodian shall release the portion of the
Mortgage Loan Documents held by the Custodian to the Servicer. Such servicing
receipt shall obligate the Servicer to promptly return the related Mortgage Loan
Documents to the Custodian, when the need therefor by the Servicer no longer
exists, unless the Mortgage Loan has been liquidated and the Liquidation
Proceeds relating to the Mortgage Loan have been deposited in the Collection
Account or such documents have been delivered to an attorney, or to a public
trustee or other public official as required by law, for purposes of initiating
or pursuing legal action or other proceedings for the foreclosure of the
Mortgaged Property either judicially or non-judicially, and the Servicer has
promptly delivered to the Owner, Lender and the Custodian a certificate of a
Servicing Officer certifying as to the name and address of the Person to which
such documents were delivered and the purpose or purposes of such delivery. Upon
receipt of a certificate of a Servicing Officer stating that such Mortgage Loan
was liquidated, the servicing receipt shall be released by the Owner, Lender
and/or the Custodian, as applicable, to the Servicer.
Section 6.03 Servicing Compensation.
As compensation for its services hereunder, the Servicer shall be
entitled to remit from the Collection Account on the Mortgage Loans the amounts
provided for as the Servicer's Servicing Fee under Section 5.01. Additional
servicing compensation in the form of assumption fees, as provided in Section
6.01, late payment charges and other ancillary fees shall be retained by the
Servicer to the extent not required to be deposited in the Collection Account.
The Servicer shall be required to pay all expenses incurred by it in connection
with its servicing activities hereunder and shall not be entitled to
reimbursement therefor except as specifically provided for.
Section 6.04 Annual Statement as to Compliance.
The Servicer will deliver to the Owner, the Backup Servicer's and
Lender not later than 90 days following the end of each fiscal year of the
Servicer, an Officers' Certificate stating, as to each signatory thereof, that
(i) a review of the activities of the Servicer during the preceding calendar
year and of performance under this Agreement has been made under such officers'
supervision, and (ii) to the best of such officers' knowledge, based on such
review, the Servicer has fulfilled all of its obligations under this Agreement
throughout such year, or, if there has been a default in the fulfillment of any
such obligation, specifying each such default known to such officers and the
nature and status thereof except for such defaults as such Officers in their
good faith judgment believe to be immaterial.
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Section 6.05 Annual Independent Certified Public Accountants' Servicing
Report.
Not later than 90 days following the end of each fiscal year of the
Servicer, the Servicer at its expense shall cause a firm of independent public
accountants which is a member of the American Institute of Certified Public
Accountants to furnish a statement to the Owner and Lender to the effect that
such firm has examined certain documents and records relating to the Servicer's
servicing of mortgage loans of the same type as the Mortgage Loans pursuant to
servicing agreements substantially similar to this Agreement, which agreements
may include this Agreement, and that, on the basis of such an examination,
conducted substantially in accordance with the Uniform Single Attestation
Program for Mortgage Bankers, such firm is of the opinion that the Servicer's
servicing has been conducted in compliance with the agreements examined pursuant
to this Section 6.05, except for (i) such exceptions as such firm shall believe
to be immaterial, and (ii) such other exceptions as shall be set forth in such
statement.
Section 6.06 Owner's Right to Examine Servicer Records.
Each of the Owner, the Backup Servicer and Lender shall have the right
to examine and audit, at its respective expense, upon reasonable notice to the
Servicer, during business hours or at such other times as might be reasonable
under applicable circumstances, any and all of the books, records, documentation
or other information of the Servicer, or held by another for the Servicer or on
its behalf or otherwise, which relate to the performance or observance by the
Servicer of the terms, covenants or conditions of this Agreement.
The Servicer shall provide to the Owner, the Lender and any supervisory
agents or examiners representing a state or federal governmental agency having
jurisdiction over the Owner or the Lender, including but not limited to OTS,
FDIC and other similar entities, access to any documentation regarding the
Mortgage Loans in the possession of the Servicer which may be required by any
applicable regulations. Such access shall be afforded without charge, upon
reasonable request, during normal business hours and at the offices of the
Servicer, and in accordance with the applicable federal government agency, FDIC,
OTS, or any other similar regulations.
Section 6.07 Non-solicitation.
The Servicer or any agent or affiliate shall not knowingly conduct any
solicitation exclusively targeted to the Mortgagors for the purpose of inducing
or encouraging the early prepayment or refinancing of the related Mortgage
Loans. It is understood and agreed that promotions undertaken by the Servicer or
any agent or affiliate of the Servicer which are directed to the general public
at large, including, without limitation, mass mailings based on commercially
acquired mailing lists, newspaper, radio and television advertisements shall not
constitute solicitation under this section. Nothing contained herein shall
prohibit the Servicer from (i) distributing any general advertising including
information brochures, coupon books, or other similar documentation which
indicates services the Seller offers, including refinances to all Mortgagors in
Servicer's servicing portfolio or (ii) providing financing of home equity loans
to Mortgagors at the Mortgagor's request.
ARTICLE VII
REPORTS TO BE PREPARED BY SERVICER
Section 7.01 Servicer Shall Provide Information as Reasonably Required.
The Servicer shall furnish to Lender and the Owner upon request, during
the term of this Agreement, such periodic, special or other reports or
information, whether or not provided for herein, as shall be necessary,
reasonable or appropriate with respect to the purposes of this Agreement. The
Servicer may negotiate with the Owner or Lender for a reasonable fee for
providing such report or information, unless (i) the Servicer is required to
supply such report or information pursuant to any other section of this
Agreement, or (ii) the report or information has been requested in connection
with Internal Revenue Service, OTS, FDIC or other regulatory agency
requirements. All such reports or information shall be provided by and in
accordance with all reasonable instructions and directions given by the Owner or
Lender. The Servicer agrees to execute and deliver all such instruments and take
all such action as the Owner or Lender, from time to time, may reasonably
request in order to effectuate the purpose and to carry out the terms of this
Agreement.
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ARTICLE VIII
THE SERVICER
Section 8.01 Indemnification; Third Party Claims.
The Servicer agrees to indemnify the Owner, the Backup Servicer and
Lender and hold each harmless from and against any and all claims, losses,
damages, penalties, fines, forfeitures, legal fees and related costs, judgments,
and any other costs, fees and expenses that the Owner, the Backup Servicer or
Lender may sustain in any way related to the failure of the Servicer to perform
in any way its duties and service the Mortgage Loans in strict compliance with
the terms of this Agreement and for breach of any representation or warranty of
the Servicer contained herein. The Servicer shall immediately notify the Owner,
the Backup Servicer's and Lender if a claim is made by a third party with
respect to this Agreement or the Mortgage Loans, assume (with the consent of the
Owner and with counsel reasonably satisfactory to the Owner) the defense of any
such claim and pay all expenses in connection therewith, including counsel fees,
and promptly pay, discharge and satisfy any judgment or decree which may be
entered against it, the Owner, the Backup Servicer or Lender in respect of such
claim but failure to so notify the Owner, the Backup Servicer or Lender shall
not limit its obligations hereunder. The Servicer agrees that it will not enter
into any settlement of any such claim without the consent of the Owner, the
Backup Servicer and Lender unless such settlement includes an unconditional
release of the Owner from all liability that is the subject matter of such
claim. The provisions of this Section 8.01 shall survive termination of this
Agreement.
Section 8.02 Existence of the Servicer.
The Servicer will keep in full effect its existence, rights and
franchises as a corporation under the laws of the state of its incorporation
except as permitted herein, and will obtain and preserve its qualification to do
business as a foreign corporation in each jurisdiction in which such
qualification is or shall be necessary to protect the validity and
enforceability of this Agreement or any of the Mortgage Loans and to perform its
duties under this Agreement.
Section 8.03 Limitation on Liability of the Servicer and Others.
Neither the Servicer nor any of the officers, employees or agents of
the Servicer shall be under any liability to the Owner for any action taken or
for refraining from the taking of any action in good faith pursuant to this
Agreement, or for errors in judgment made in good faith; provided, however, that
this provision shall not protect the Servicer or any such person against any
breach of warranties or representations made herein, or failure to perform in
any way its obligations in compliance with any standard of care set forth in
this Agreement, or any liability which would otherwise be imposed by reason of
negligence or any breach of the terms and conditions of this Agreement. The
Servicer and any officer, employee or agent of the Servicer may rely in good
faith on any document of any kind prima facie properly executed and submitted by
the Owner respecting any matters arising hereunder. The Servicer shall not be
under any obligation to appear in, prosecute or defend any legal action which is
not incidental to its duties to service the Mortgage Loans in accordance with
this Agreement and which in its opinion may involve it in any expenses or
liability; provided, however, that the Servicer may, with the consent of the
Owner and Lender, which consent shall not be unreasonably withheld, undertake
any such action which it may deem necessary or desirable with respect to this
Agreement and the rights and duties of the parties hereto. In such event, the
reasonable legal expenses and costs of such action and any liability resulting
therefrom shall be expenses, costs and liabilities for which the Owner will be
liable, and the Servicer shall be entitled to be reimbursed therefor from the
Owner upon written demand.
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Section 8.04 Servicer Not to Resign.
The Servicer shall not resign from the obligations and duties hereby
imposed on it except by mutual consent of the Servicer, the Owner and Lender or
upon the determination that its duties hereunder are no longer permissible under
applicable law and such incapacity cannot be cured by the Servicer. Any such
determination permitting the resignation of the Servicer shall be evidenced by
an Opinion of Counsel to such effect delivered to the Owner and Lender which
Opinion of Counsel shall be in form and substance acceptable to the Owner. No
such resignation shall become effective until a successor shall have assumed the
Servicer's responsibilities and obligations hereunder in the manner provided in
Sections 9.01 and 9.03.
Section 8.05 No Transfer of Servicing.
With respect to the retention of the Servicer to service the Mortgage
Loans hereunder, the Servicer acknowledges that the Owner and Lender have acted
in reliance upon the Servicer's independent status, the adequacy of its
servicing facilities, plan, personnel, records and procedures, its integrity,
reputation and financial standing and the continuance thereof. Without in any
way limiting the generality of this section, the Servicer shall not either
assign this Agreement or the servicing hereunder or delegate its rights or
duties hereunder or any portion thereof, or sell or otherwise dispose of all or
substantially all of its property or assets, without the prior written approval
of the Owner and Lender.
ARTICLE IX
DEFAULT
Section 9.01 Events of Default.
In case one or more of the following Events of Default by the Servicer
shall occur and be continuing, that is to say:
(i) any failure by the Servicer to remit any payment required to be
made under the terms of this Agreement which continues unremedied for either one
(1) Business Day, if the Servicer is American Business Credit, Inc. or two (2)
Business Days, if the Backup Servicer has become the successor to the Servicer,
(it being understood that this subparagraph shall not affect Servicer's
obligation pursuant to Section 5.01 to pay default interest on any remittance
received after the Business Day on which such payment was due); or
(ii) any failure on the part of the Servicer duly to observe or perform
in any material respect any other of the covenants or agreements on the part of
the Servicer set forth in this Agreement, the breach of which has a material
adverse effect and which continue unremedied for a period of thirty days (except
that such number of days shall be fifteen in the case of a failure to pay any
premium for any insurance policy required to be maintained under this Agreement
and such failure shall be deemed to have a material adverse effect) after the
date on which written notice of such failure, requiring the same to be remedied,
shall have been given to the Servicer by the Owner or Lender; or
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(iii) a decree or order of a court or agency or supervisory authority
having jurisdiction for the appointment of a conservator or receiver or
liquidator in any insolvency, bankruptcy, readjustment of debt, marshaling of
assets and liabilities or similar proceedings, or for the winding-up or
liquidation of its affairs, shall have been entered against the Servicer and
such decree or order shall have remained in force undischarged or unstayed for a
period of sixty days; or
(iv) the Servicer shall consent to the appointment of a conservator or
receiver or liquidator in any insolvency, bankruptcy, readjustment of debt,
marshaling of assets and liabilities or similar proceedings of or relating to
the Servicer or of or relating to all or substantially all of its property; or
(v) the Servicer shall admit in writing its inability to pay its debts
generally as they become due, file a petition to take advantage of any
applicable insolvency or reorganization statute, make an assignment for the
benefit of its creditors, or voluntarily suspend payment of its obligations; or
(vi) only if American Business Credit, Inc. is the Servicer, there
occurs and "Event of Default" as defined in the Loan Agreement; or
(vii) only if American Business Credit, Inc. is the Servicer, the
Servicer attempts to assign its right to servicing compensation hereunder or the
Servicer attempts, without the consent of the Owner, to sell or otherwise
dispose of all or substantially all of its property or assets or to assign this
Agreement or the servicing responsibilities hereunder or to delegate its duties
hereunder or any portion thereof except as otherwise permitted herein; or
(viii) the Servicer ceases (either directly or indirectly through its
subservicers) to be qualified to transact business in any jurisdiction where it
is currently so qualified, but only to the extent such non-qualification
materially and adversely affects the Servicer's ability to perform its
obligations hereunder; or
(ix) only if American Business Credit, Inc. is the Servicer, the
Servicer shall cease to be a wholly-owned subsidiary of ABSFI;
then, and in each and every such case, so long as an Event of Default
shall not have been remedied, the Owner (with prior written consent of Lender)
or Lender, by notice in writing to the Servicer and a copy to Backup Servicer
may, in addition to whatever rights the Owner or Lender may have under Section
8.01 and at law or equity to damages, including injunctive relief and specific
performance, terminate all the rights and obligations of the Servicer under this
Agreement and in and to the Mortgage Loans and the proceeds thereof without
compensating the Servicer for the same. On or after the receipt by the Servicer
and Backup Servicer of such written notice of the termination of Servicer, all
authority and power of the Servicer under this Agreement, whether with respect
to the Mortgage Loans or otherwise, shall pass to and be vested in the Backup
Servicer pursuant to and under this Section, and, without limitation, the Backup
Servicer, is hereby authorized and empowered, as attorney-in-fact or otherwise,
to execute and deliver, on behalf of and at the expense of the Servicer, any and
all documents and other instruments and to do or accomplish all other acts or
things necessary or appropriate to effect the purposes of such notice of
termination, whether to complete the transfer and endorsement or assignment of
the Mortgage Loans and related documents, or otherwise. Upon written request
from the Owner and the Lender, the Servicer shall prepare, execute and deliver,
any and all documents and other instruments, and place in the Backup Servicer's
possession all Servicing Files, and do or accomplish all other acts or things
necessary or appropriate to effect the purposes of such notice of termination,
whether to complete the transfer and endorsement or assignment of the Mortgage
Loans and related documents, or otherwise, at the Servicer's sole expense. The
Servicer agrees to cooperate with the Owner, the Lender and the Backup Servicer
in effecting the termination of the Servicer's responsibilities and rights
hereunder, including, without limitation, the transfer to the Backup Servicer
for administration by it of all cash amounts which shall at the time be credited
by the Servicer to the Collection Account or Escrow Account or otherwise held by
the Servicer or thereafter received with respect to the Mortgage Loans or any
REO Property.
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In the event that the Backup Servicer becomes the successor Servicer,
the parties hereby agree that there shall no longer be the requirement to have a
Backup Servicer.
Section 9.02 Waiver of Defaults.
The Owner may waive only by written notice and only upon the written
consent of Lender any default by the Servicer in the performance of its
obligations hereunder and its consequences. Upon any such waiver of a past
default, such default shall cease to exist, and any Event of Default arising
therefrom shall be deemed to have been remedied for every purpose of this
Agreement. No such waiver shall extend to any subsequent or other default or
impair any right consequent thereon except to the extent expressly so waived in
writing.
Section 9.03 Backup Servicer.
(a)From and after the Effective Date hereof until the Servicing
Transfer Date, the Backup Servicer shall act as back-up servicer with respect to
the Mortgage Loans, and shall perform such functions, duties, obligations,
undertakings and responsibilities as set forth in Section 9.03(b) below. Prior
to the Servicing Transfer Date, the Backup Servicer shall have only those duties
and obligations imposed by it described in Section 9.03(b) below, and shall have
no obligations or duties under any agreement to which it is not a party,
including but not limited to the various agreements named herein. In its
capacity as Backup Servicer, it shall in no event be liable for any obligations
of the Owner or the Servicer to any party, whether hereunder or under any other
agreement, which are not related to servicing functions, including, without
limitation, any repurchase obligations.
(b) No later than the fifth (5th) Business Day of each calendar month,
the Servicer shall deliver to the Backup Servicer a complete set of servicing
records in computer-readable form with respect to the payment, collection and
other servicing activity of the Mortgage Loans during the preceding calendar
month, which records shall contain sufficient data to permit the Backup Servicer
to assume the duties of the Servicer hereunder without delay on account of the
absence of relevant servicing information. The information described in the
foregoing sentence and all other information provided by the Servicer to the
Backup Servicer pursuant to the Agreement shall be in form and substance
satisfactory to the Backup Servicer. On at least a monthly basis, the Backup
Servicer shall convert and "map" the data contained in such servicing records to
its own servicing system, and shall provide the Lender not later than the 15th
day of each month commencing November 15, 2003, with a certification by an
appropriate officer of the Backup Servicer to the effect that it has received
from the Servicer each monthly submission of servicing data, has completed such
conversion and mapping of the data delivered with respect to the immediately
preceding month, and is capable of assuming the duties of the Servicer if
required to do so hereunder upon at least 20 days' prior to written notice from
the Lender.
(c) The Backup Servicer, prior to assuming any of the Servicer's duties
hereunder may not resign hereunder unless it arranges for a successor Backup
Servicer reasonably acceptable to the Owner and the Lender with not less than 90
days' notice delivered to the Owner, the Lender and the Servicer.
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(d) From and after the Servicing Transfer Date, the Backup Servicer
shall perform all of the functions, duties, obligations, undertakings and
responsibilities of the Servicer hereunder and shall be the successor to the
Servicer hereunder, but only in its capacity as Servicer under this Agreement.
In the event the Backup Servicer becomes the successor Servicer, it shall not be
liable for any acts or omissions of the Servicer under this Agreement or any
other agreement and shall not be deemed to have made any representations and
warranties of the Servicer or any predecessor Servicer under this Agreement or
any other agreement. In the event the Backup Servicer becomes the successor
Servicer, it shall be not deemed to be in default thereunder by reason of any
failure to make, or any delay in making, any distribution hereunder or any
portion thereof caused by (a) the failure of the Servicer or any predecessor
Servicer to (i) deliver, or any delay in delivering, cash, documents or records
to it, (ii) cooperate as required by this Agreement, or (iii) deliver the
Mortgage Loans to the Custodian as required by this Agreement, or (b)
restrictions imposed by any regulatory authority having jurisdiction over the
Servicer.
(e) Upon the transfer of the servicing of the Mortgage Loans, prior to
the first Payment Date after the Servicing Transfer Date, the Lender shall cause
the Custodian to provide the Backup Servicer with an officer's certificate that
contains (i) a complete description of all material breaches by the Servicer
which have not been fully cured and (ii) a confirmation that all reports
required to be filed by the Custodian have been timely filed.
(f)The Backup Servicer agrees to indemnify the Owner, the Servicer and
the Lender, and any of their respective directors, officers, employees or agents
from, and hold them harmless against, any and all costs, expenses (including
reasonable attorney fees and disbursements), losses, claims, damages and
liabilities to the extent that such cost, expense, loss, claim, damage or
liability arose out of, or was imposed upon the Owner, the Servicer or the
Lender and their respective directors, officers, employees and agents through
the Backup Servicer's intentional misconduct or gross negligence, except to the
extent such indemnified party's own bad faith, willful misconduct or gross
negligence contributes to the costs, loss, claim, damage or liability. Each of
the Owner, the Servicer and the Lender agrees, severally and not jointly, to
indemnify the Backup Servicer, and any of its respective directors, officers,
employees or agents from, and hold them harmless against, any and all costs,
expenses (including reasonable attorney fees and disbursements), losses, claims,
damages and liabilities to the extent that such cost, expense, loss, claim,
damage or liability arose out of, or was imposed upon the Backup Servicer and
its respective directors, officers, employees and agents through the intentional
misconduct or gross negligence of the Owner, the Servicer or the Lender, except
to the extent such indemnified party's own bad faith, willful misconduct or
gross negligence contributes to the costs, loss, claim, damage or liability (for
the avoidance of doubt, in no event shall Owner or Lender indemnify the Backup
Servicer for the intentional misconduct or gross negligence of either (x) the
other or (y) the Servicer).
(g) The Backup Servicer will not be obligated to incur any expenses or
costs (including, without limitation, legal fees and the preparation and
recording of all intervening assignments of mortgage) in connection with the
transfer of servicing of the Mortgage Loans to the Backup Servicer, or to compel
the performance of any obligations by any party to the Agreement. Without
limiting any obligations of a terminated Servicer as provided above, if the
Servicer is no longer the Servicer hereunder for any reason, such predecessor
Servicer shall be responsible for paying any Servicing Transfer Costs incurred
by the Backup Servicer in connection with the transfer of servicing from the
predecessor Servicer; provided, that if the predecessor Servicer fails to pay
any such Servicing Transfer Costs, the Lender shall cause such Servicing
Transfer Costs to be paid out of the Collection Account. In addition, if the
Backup Servicer is the successor to the Servicer, and if the predecessor
Servicer fails to pay any Servicing Transfer Costs incurred by the Backup
Servicer, then the Backup Servicer may offset any such Servicing Transfer Costs
against amounts that are payable or reimbursable to the predecessor Servicer
with respect to unpaid Servicing Fees and unreimbursed Servicing Advances as set
forth below in the following paragraph below (and the Backup Servicer shall only
be paid such Servicing Transfer Costs from the Collection Account to the extent
it reasonably determines that such Servicing Transfer Costs will not be
recoverable pursuant to such offsets). To the extent such Servicing Transfer
Costs remain unpaid by the predecessor Servicer, from the Collection Account, or
from offset against amounts that are payable or reimbursable to the predecessor
Servicer with respect to unpaid Servicing Fees and unreimbursed Servicing
Advances, such unpaid Servicing Transfer Costs shall be paid by the Owner and
the predecessor Servicer, jointly and severally. The foregoing obligation of the
predecessor Servicer with respect to Servicing Transfer Costs shall not be
deemed to limit any other liability the predecessor Servicer may have to the
other parties hereto in respect of any breach of its obligations or duties
hereunder.
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(h) If the Backup Servicer is the successor to the Servicer, the Backup
Servicer in such capacity shall remit all unpaid Servicing Fees accrued during
the period prior to the Servicing Transfer and unreimbursed Servicing Advances
outstanding on the Servicing Transfer Date to the predecessor Servicer;
provided, however, there shall be no duty to so remit if the Servicing Transfer
is the result of an Event of Default under this Agreement with respect to the
predecessor Servicer; and provided further, that such duty to reimburse relates
only to all such unpaid Servicing Fees accrued during the period prior to the
Servicing Transfer and unreimbursed Servicing Advances made by the predecessor
Servicer prior to Servicing Transfer Date; and, further, provided, that the
Backup Servicer in its capacity as successor Servicer shall be obliged to make
such reimbursement only out of collections on the related Mortgage Loan,
(including monthly collections, Liquidation Proceeds, Released Mortgaged
Property Proceeds, Insurance Proceeds, or their equivalent under the Basic
Document) and such other amounts that the Servicer is permitted to collect from
the related Mortgagor or otherwise relating to the related Mortgage Loan before
the Backup Servicer in its capacity as successor Servicer reimburses itself for
any unreimbursed Servicing Advances which it makes with respect to such Mortgage
Loan. The Backup Servicer in its capacity as successor Servicer shall remit any
funds due to the predecessor Servicer under this paragraph on the Payment Date.
(i) The Backup Servicer, as compensation for its obligations and duties
as Backup Servicer hereunder, shall be paid the Backup Servicing Fee on each
Payment Date pursuant to Section 5.01. If the Backup Servicer shall succeed as
Servicer hereunder, the Backup Servicer shall no longer be entitled to be paid
the Backup Servicing Fee with respect to any period after the Servicing Transfer
Date.
(j) In addition, as compensation for its assumption of its duties as
Backup Servicer hereunder, the Lender shall deliver to the Backup Servicer on
the Effective Date hereof, from the Lender's own funds, the Initial Setup Fee.
(k) As compensation for its assumption of its duties as successor to
the Servicer hereunder, on and after the Servicing Transfer Date, the Backup
Servicer in its capacity as successor to the Servicer hereunder shall become
entitled to receive the Servicing Fee for three (3) months (regardless of the
actual number of months that the Backup Servicer has acted as the successor
Servicer) on each Mortgage Loan and such other compensation to the Servicer as
is provided in this Agreement (other than any such compensation due to the
predecessor Servicer for any period prior to the Servicing Transfer Date);
provided, however that the predecessor Servicer shall nonetheless be entitled to
payment or reimbursement for unpaid Servicing Fees accrued during the period
prior to the Servicing Transfer Date or Servicing Advances made by such
predecessor Servicer during the period prior to the Servicing Transfer Date
pursuant to Section 9.03(h) hereof. The parties agree that if the Backup
Servicer has succeeded as the successor Servicer hereunder, the Servicing Fee
Rate shall be equal to 0.50% after the Servicing Transfer Date, provided,
however, in the event of an Event of Default under the Loan Agreement, the
Servicing Fee Rate shall be a commercially reasonable rate or per loan fee
(taking into consideration, among other factors, the fact that the Loan
Agreement is no longer a revolving facility) as agreed upon by the Backup
Servicer and the Lender, who agree to act in good faith based upon the then
Principal Balance of the Mortgage Loans outstanding at such time and anticipated
balances going forward; and provided further, that the 0.50% rate shall be
applicable for a minimum of three (3) months following such a Servicing Transfer
Date. If the Lender and the Backup Servicer fail to set a mutually agreeable
Servicing Fee Rate in good faith negotiations after the Servicing Transfer Date
and the subsequent Event of Default, the Backup Servicer may in its sole
discretion resign as successor Servicer hereunder at no cost to the Backup
Servicer and the Lender shall reimburse the Backup Servicer for any unreimbursed
Servicing Advances made by the Backup Servicer with respect to the Mortgage
Loans and any unreimbursed Servicing Transfer Costs incurred by the Backup
Servicer prior to the date of such resignation.
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(l) If the Backup Servicer is terminated as Backup Servicer without
cause or, is required by the Owner (with the prior written consent of the
Lender) or the Lender to resign as Backup Servicer, the Backup Servicer shall be
paid from the Collection Account (or from the Lender if there are insufficient
funds in the Collection Account) a termination fee equal to the Backup Servicing
Fee Rate accrued for nine (9) months (on the basis of a 360-day year and twelve
30-day months) less the number of months that the Backup Servicer has already
received a payment as Backup Servicer on the aggregate principal balance of the
Mortgage Loans on the date of such termination, if such termination or forced
resignation occurs on or prior to the nine month anniversary of the Effective
Date. No termination fee shall be payable to the Backup Servicer if the Backup
Servicer is terminated as Backup Servicer without cause or, is required to
resign as Backup Servicer, after the 9-month anniversary of the Effective Date
or if the Backup Servicer resigns pursuant to Section 9.03(k).
ARTICLE X
TERMINATION
Section 10.01 Servicing Term
The Servicer hereby covenants and agrees to act as the Servicer under
this Agreement for an initial term, commencing on the Closing Date and ending on
the last Business Day of the succeeding month, which term shall be extendable by
the Lender for successive terms of one calendar month thereafter, until the
termination of the Servicer's obligations and responsibilities pursuant to this
Article X; provided that, if the Backup Servicer shall become the Servicer
hereunder the term of the Backup Servicer as Servicer shall not be subject to
termination under this Section 10.01. Each such notice of extension (a "Servicer
Extension Notice") shall be delivered by the Lender to the Servicer and the
Backup Servicer. The Servicer hereby agrees that, upon its receipt of any such
Servicer Extension Notice, the Servicer shall become bound for the duration of
the term covered by such Servicer Extension Notice to continue as the Servicer
subject to and in accordance with the other provisions of this Agreement.
On and after the time the Servicer receives a notice of termination,
the Backup Servicer shall be the successor in all respects to the Servicer in
its capacity as Servicer under this Agreement and the transactions set forth or
provided for herein and shall be subject to all the responsibilities, duties and
liabilities relating thereto and arising thereafter placed on the Servicer
(except for any representations or warranties of the Servicer under this
Agreement by the terms and provisions hereof).
Section 10.02 Termination.
The respective obligations and responsibilities of the Servicer shall
terminate upon: (i) the later of the final payment of the last Mortgage Loan and
the remittance of all funds due hereunder; or (ii) by mutual consent of the
Servicer, the Owner and the Lender in writing; or (iii) termination by the
Lender pursuant to Section 9.01.
Section 10.03 Termination Without Cause.
The Lender may, at its sole option, terminate any rights the Servicer
may have hereunder, without cause, upon 20 days prior written notice. Any such
notice of termination shall be in writing and delivered to the Servicer as
provided in Section 11.05 of this Agreement.
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Termination pursuant to this Section 10.04 shall be effective on the
date (the "Transfer Date") on which the Servicer transfers all responsibilities,
rights, duties and obligations under this Agreement to the successor appointed
pursuant to Sections 9.01 and 9.03. The Owner shall appoint such successor upon
written consent of Lender and such Transfer Date shall be no more than 20 days
following the date on which the Servicer receives notice of termination.
ARTICLE XI
MISCELLANEOUS PROVISIONS
Section 11.01 Amendment.
This Agreement may be amended from time to time by the Servicer, the
Owner, the Lender and the Backup Servicer by written agreement signed by the
Servicer, the Owner, the Lender and the Backup Servicer.
Section 11.02 Recordation of Agreement.
To the extent permitted by applicable law, this Agreement is subject to
recordation in all appropriate public offices for real property records in all
the counties or other comparable jurisdictions in which any of all the
properties subject to the Mortgages are situated, and in any other appropriate
public recording office or elsewhere, such recordation to be effected by the
Servicer at the Servicer's expense on direction of the Owner or Lender
accompanied by an opinion of counsel to the effect that such recordation
materially and beneficially affects the interest of the Owner or Lender or is
necessary for the administration or servicing the Mortgage Loans.
Section 11.03 Governing Law.
THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH
THE INTERNAL LAWS OF THE STATE OF NEW YORK WITHOUT GIVING EFFECT TO PRINCIPLES
OF CONFLICTS OF LAWS. THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES
HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.
Section 11.04 Notices.
Any demands, notices or other communications permitted or required
hereunder shall be in writing and shall be deemed conclusively to have been
given if personally, delivered, sent by overnight courier with proof of
delivery, mailed by certified mail, postage prepaid, and return receipt
requested or transmitted by telecopier and confirmed by a similar writing
delivered by overnight courier, as follows:
(i) if to the Servicer:
American Business Credit, Inc.
The Xxxxxxxxx Bldg.
000 Xxxx Xxxxxx Xxxx
Xxxxxxxxxxxx, XX 00000
Attention: Xxxxxxx X. Xxxxxx
Telecopier No.: (000) 000-0000
with a copy to:
Blank Rome LLP
Xxx Xxxxx Xxxxxx
Xxxxxxxxxxxx, XX 00000
Attention: Xxxxxxxx X. Xxxxx, XX
Telecopier No.: (000) 000-0000
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(ii) if to the Owner:
ABFS Warehouse Trust 2003-2
c/o Wilmington Trust Company
Xxxxxx Square North
0000 Xxxxxx Xxxxxx
Xxxxxxxxxx, Xxxxxxxx 00000
Attention: Corporate Trust Administration
Telecopier No.: (000) 000-0000
with a copy to:
American Business Credit, Inc.
The Xxxxxxxxx Bldg.
000 Xxxx Xxxxxx Xxxx
Xxxxxxxxxxxx, XX 00000
Attention: Xxxxxxx X. Xxxxxx
Telecopier No.: (000) 000-0000
(iii) if to the Lender:
Chrysalis Warehouse Funding, LLC
c/o Chrysalis Management Group LLC
The Belgravia Building
0000 Xxxxxxxx Xxxxxx, Xxxxx 000
Xxxxxxxxxxxx, XX 00000
Attention: Xxxx Xxxxxxx
Telecopier No.: (000) 000-0000
(iv) if to the Backup Servicer:
Countrywide Home Loans Servicing LP
000 Xxxxxxxx Xxxxxx, XX-XX0-X
Attention: Xxxx Xxxxxx, XX 00000
Telecopier No.: (000) 000-0000
Attention: Xxxxxx X. Xxx
or such other address as may hereafter be furnished to the other party by like
notice. Any such demand, notice, or communication hereunder shall be deemed to
have been received on the date delivered to or received at the premises of the
address (as evidenced, in the case of registered or certified mail, by the date
noted on the return receipt).
Section 11.05 Severability of Provisions.
Any part, provision, representation or warranty of this Agreement which
is prohibited or which is held to be void or unenforceable shall be ineffective
to the extent of such prohibition or unenforceability without invalidating the
remaining provisions hereof. Any part, provision, representation or warranty of
this Agreement which is prohibited or unenforceable or is held to be void or
unenforceable in any jurisdiction shall be ineffective, as to such jurisdiction,
to the extent of such prohibition or unenforceability without invalidating the
remaining provisions hereof, and any such prohibition or unenforceability in any
jurisdiction as to any Mortgage Loan shall not invalidate or render
unenforceable such provision in any other jurisdiction. To the extent permitted
by applicable law, the parties hereto waive any provision of law which prohibits
or renders void or unenforceable any provision hereof. If the invalidity of any
part, provision, representation or warranty of this Agreement shall deprive any
party of the economic benefit intended to be conferred by this Agreement, the
parties shall negotiate, in good faith, to develop a structure the economic
effect of which is nearly as possible the same as the economic effect of this
Agreement without regard to such invalidity.
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Section 11.06 Exhibits.
The exhibits to this Agreement are hereby incorporated and made a part
hereof and are an integral part of this Agreement.
Section 11.07 General Interpretive Principles.
For purposes of this Agreement, except as otherwise expressly provided
or unless the context otherwise requires:
(i) the terms defined in this Agreement have the meanings assigned to
them in this Agreement and include the plural as well as the singular, and the
use of any gender herein shall be deemed to include the other gender;
(ii) accounting terms not otherwise defined herein have the meanings
assigned to them in accordance with generally accepted accounting principles;
(iii) references herein to "Articles," "Sections," "Subsections,"
"Paragraphs," and other subdivisions without reference to a document are to
designated Articles, Sections, Subsections, Paragraphs and other subdivisions of
this Agreement;
(iv) a reference to a Subsection without further reference to a Section
is a reference to such Subsection as contained in the same Section in which the
reference appears, and this rule shall also apply to Paragraphs and other
subdivisions;
(v) the words "herein," "hereof," "hereunder" and other words of
similar import refer to this Agreement as a whole and not to any particular
provision; and
(vi) the term "include" or "including" shall mean without limitation by
reason of enumeration.
Section 11.08 Reproduction of Documents.
This Agreement and all documents relating hereto, including, without
limitation, (i) consents, waivers and modifications which may hereafter be
executed, (ii) documents received by any party at the closing, and (iii)
financial statements, certificates and other information previously or hereafter
furnished, may be reproduced by any photographic, photostatic, microfilm,
micro-card, miniature photographic or other similar process. The parties agree
that any such reproduction shall be admissible in evidence as the original
itself in any judicial or administrative proceeding, whether or not the original
is in existence and whether or not such reproduction was made by a party in the
regular course of business, and that any enlargement, facsimile or further
reproduction of such reproduction shall likewise be admissible in evidence.
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Section 11.09 Confidentiality of Information.
Each party recognizes that, in connection with this Agreement, it may
become privy to non-public information regarding the financial condition,
operations and prospects of the other party. Except as required to be disclosed
by law, each party agrees to keep all non-public information regarding the other
party strictly confidential, and to use all such information solely in order to
effectuate the purpose of this Agreement.
Section 11.10 Recordation of Assignments of Mortgage.
To the extent permitted by applicable law, each of the Assignments of
Mortgage is subject to recordation in all appropriate public offices for real
property records in all the counties or other comparable jurisdictions in which
any or all of the Mortgaged Properties are situated, and in any other
appropriate public recording office or elsewhere, such recordation to be
effected by the Servicer. The Servicer shall not be responsible for the cost or
preparation of such recordation.
Section 11.11 Assignment.
This Agreement is assignable by the Lender upon notice to the Owner,
the Servicer or the Backup Servicer (the "Notice Date") in whole or in part
without the consent of the Owner, the Servicer or the Backup Servicer, provided
that the rights with respect to this Agreement shall not be assigned without the
associated liabilities with respect to events occurring after the Notice Date
(Lender shall remain liable with respect to events occurring up to and including
the Notice Date). The Owner shall have the right, only upon prior written
consent of the Lender, but without the consent of the Servicer and the Backup
Servicer, to assign, in whole or in part, its interest under this Agreement with
respect to some or all of the Mortgage Loans, and designate any person to
exercise any rights of the Owner hereunder. In no event shall Owner sell a
partial interest in any Mortgage Loan. The Backup Servicer shall not assign this
Agreement without the prior written consent of the Lender, which consent shall
not be unreasonably withheld, delayed or conditioned. All references to the
Owner in this Agreement shall be deemed to include its assignees or designees.
Section 11.12 No Partnership.
Nothing herein contained shall be deemed or construed to create a
co-partnership or joint venture between the parties hereto and the services of
the Servicer shall be rendered as an independent contractor and not as agent for
Owner.
Section 11.13 Execution; Successors and Assigns.
This Agreement may be executed in one or more counterparts and by the
different parties hereto on separate counterparts, each of which, when so
executed, shall be deemed to be an original; such counterparts, together, shall
constitute one and the same agreement. Subject to Sections 8.04 and 9.03 and
11.11, this Agreement shall inure to the benefit of and be binding upon the
Servicer, the Backup Servicer and the Owner and their respective successors and
assigns.
Section 11.14 Entire Agreement.
Each of the Servicer, the Owner and the Backup Servicer acknowledges
that no representations, agreements or promises were made to it by the other
party or any of its employees other than those representations, agreements or
promises specifically contained herein. This Agreement sets forth the entire
understanding among the parties hereto and shall be binding upon all successors
of all of the parties.
Section 11.15 Third Party Beneficiary.
Each Pledgee Lender shall be a third party beneficiary of this
Agreement, entitled to all of the rights, but not the obligations, of the Lender
and the Owner hereunder.
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IN WITNESS WHEREOF, the Servicer, the Owner, the Lender and
the Backup Servicer have caused their names to be signed hereto by their
respective officers thereunto duly authorized as of the date and year first
above written.
SERVICER
AMERICAN BUSINESS CREDIT, INC.
By: /s/ Xxxxxxx Xxxxxxxx
-----------------------------------------
Name: Xxxxxxx Xxxxxxxx
----------------------------------
Title: President
----------------------------------
OWNER
ABFS WAREHOUSE TRUST 2003-2
By: /s/ Xxxxxxxx X. Xxxxxxxx
-----------------------------------------
Name: Xxxxxxxx X. Xxxxxxxx
----------------------------------
Title: Financial Services Officer
----------------------------------
LENDER
CHRYSALIS WAREHOUSE FUNDING, LLC
By: /s/ Xxxx Xxxxxxx
-----------------------------------------
Name: Xxxx Xxxxxxx
----------------------------------
Title: President
----------------------------------
BACKUP SERVICER
COUNTRYWIDE HOME LOANS SERVICING LP
By: COUNTRYWIDE GP, INC.
Its General Partner
By: /s/ Xxxxx Xxxxx
-----------------------------------------
Name: Xxxxx Xxxxx
----------------------------------
Title: Senior Vice President
----------------------------------
