TERM-TO-TERM SERVICING AGREEMENT, WAIVER AND CONSENT
This Term-To-Term Servicing Agreement, Waiver and Consent, dated as of
September 30, 2003 (this "Term Servicing Agreement"), is executed between
American Business Credit, Inc. (the "Servicer"), as original servicer and as
successor servicer, MBIA Insurance Corporation (the "Note Insurer") as Note
Insurer and JPMorgan Chase Bank, as trustee (the "Trustee").
WHEREAS, pursuant to the Sale and Servicing Agreement dated as of March
1, 2001 (the "2001-1 Servicing Agreement"), the Sale and Servicing Agreement
dated as of June 1, 2001 (the "2001-2 Servicing Agreement"), the Sale and
Servicing Agreement dated as of September 1, 2001 (the "2001-3 Servicing
Agreement"), and the Sale and Servicing Agreement dated as of December 1, 2001
(the "2001-4 Servicing Agreement" and, collectively with the 2001-1 Servicing
Agreement, the 2001-2 Servicing Agreement and the 2001-3 Servicing Agreement,
the "2001 Servicing Agreements"), each by and among Bear Xxxxxxx Asset Backed
Securities, Inc. as Depositor, the respective ABFS Mortgage Loan Trust (2001, -1
through -4) as Issuer, the Servicer as the original servicer, and the Trustee as
Indenture Trustee and Collateral Agent, the Servicer agreed to service and
administer certain specified mortgage loans (collectively, the "Mortgage Loans")
in accordance with accepted servicing practices as provided therein;
WHEREAS, a Servicer Event of Default under Section 7.01(a)(xi) of each
of the 2001 Servicing Agreements based upon the Net Worth of American Business
Financial Services, Inc. ("ABFS") on a consolidated basis either has occurred
(although confirmation of such occurrence may require further information), or
is anticipated to occur in the future;
WHEREAS, upon the occurrence of a Servicer Event of Default, MBIA
Insurance Corporation, as Note Insurer (the "Note Insurer") has the right under
Section 7.01(b) of each of the 2001 Servicing Agreements (in addition to
whatever other rights may exist at law or equity to damages, including
injunctive relief and specific performance) to direct the Trustee to terminate
all the rights and obligations of the Servicer under each of the 2001 Servicing
Agreements (except for the Servicer's indemnification obligations under Section
5.19 of each of the 2001 Servicing Agreements) and in and to the Mortgage Loans
and the proceeds thereof, as servicer and to cause all authority and power of
the Servicer under the 2001 Servicing Agreements to pass to and be vested in
such other person as may be specified by the Note Insurer;
WHEREAS, ABFS is currently the Holder of trust certificates issued
under the Trust Agreements listed on Schedule A hereto (collectively, the
"Certificates") and under Sections 3.04 and 3.09 of the Trust Agreement, the
consent of the Note Insurer is required as a condition to transfer of the
Certificates;
WHEREAS, ABFS through certain of its subsidiaries, is currently
negotiating a warehouse credit facility of up to $400 million, and has been
requested to transfer the Certificates to a Delaware business trust (the
"Trust") established by ABFS in connection with the warehouse credit facility
and for the Trust to then simultaneously pledge the Certificates to the holder
of a preferred equity certificate in the Trust as credit support for certain
aspects of this new financing and therefore ABFS has requested that the Note
Insurer consent to the transfer of the Certificates to the Trust and to the
simultaneous pledge of such Certificates by the Trust to its preferred
certificate holder as described above;
WHEREAS, the Note Insurer and American Business Credit, Inc. as the
Servicer have agreed and have notified the Trustee that they mutually desire to
remove American Business Credit, Inc. as servicer and simultaneously appoint
American Business Credit, Inc. as Servicer pursuant to the terms of this Term
Servicing Agreement and that the Note Insurer is willing to provide the waiver
of the Servicer Event of Default described above and to consent to the transfer
and pledge of the Certificates, as requested;
WHEREAS, American Business Credit, Inc. is willing to accept its
removal and simultaneous appointment as Servicer on the terms provided for
herein;
NOW, THEREFORE, in consideration of the promises and mutual covenants
contained herein, the Trustee, the Note Insurer and the Servicer agree as
follows:
1. Defined Terms. Any capitalized term used herein and not defined
herein shall have the meanings assigned to such term in the 2001 Servicing
Agreements and the Trust Agreements described below.
2. Termination of American Business Credit, Inc. as Original Servicer;
Appointment of American Business Credit, Inc. as Servicer. The undersigned
hereby acknowledge the (i) termination of the rights and responsibilities of
American Business Credit, Inc. as original Servicer pursuant to Section
7.01(a)(xi) of each of the 2001 Servicing Agreements including the occurrence,
satisfaction or waiver by the undersigned of all notices and other actions in
connection therewith and (ii) at the direction of the Note Insurer, the
simultaneous transfer of all authority and power of the Servicer under the 2001
Servicing Agreements to pass to and be vested in and assumed by American
Business Credit, Inc., as successor Servicer pursuant to this Term Servicing
Agreement.
3. Waiver of Net Worth Servicer Event of Default. At the request of
ABFS and in consideration for the promises and mutual covenants contained
herein, MBIA hereby waives each Servicer Event of Default under Section
7.01(a)(xi) of each of the 2001 Servicing Agreements based upon the Net Worth of
ABFS, whether such Servicer Event of Default has now occurred or occurs at any
time in the future.
4. Consent to Transfer and Pledge of Residual Cerficates. At the
request of ABFS and in consideration for the promises and mutual covenants
contained herein, MBIA hereby consents to the transfer and pledge of the
Certificates as described herein. This Term Servicing Agreement may be forwarded
to the Owner Trustee under the Trust Agreement in order to satisfy the
requirements of the Trust Agreement, or, at the request of ABFS, MBIA agrees to
execute and deliver a separate document for such purpose evidencing the consent
hereby granted.
5. Term Servicing. (a) At the direction of the Note Insurer, the
Trustee hereby designates the Servicer as the initial Servicer of the Mortgage
Loans under this Term Servicing Agreement for an initial term of one hundred and
twenty days, commencing on October 1, 2003. The Trustee hereby retains the
Servicer to perform all duties and obligations of the Servicer with respect to
the Mortgage Loans under each of the 2001 Servicing Agreements, in accordance
with the terms thereof and the terms of this Term Servicing Agreement, all
applicable laws and regulations and the terms of all related documents pursuant
to which the Servicer acted prior to this Term Servicing Agreement. The Servicer
hereby assumes the due and punctual performance and observance of each covenant
and condition to be performed or observed by the Servicer with respect to the
Mortgage Loans under each of the 2001 Servicing Agreements and as described
herein.
(b) The Note Insurer may, in its sole discretion, send or direct the
Trustee in writing, to send a written notice (a "Servicer Extension Notice"), in
the form of Exhibit A hereto, to the Servicer and the Note Insurer or the
Trustee, as the case may be, extending any such 120-day term for one or more
additional 120-day terms, or such longer terms as may be specified therein by
the Note Insurer (each, a "Servicing Period"). Any Servicer Extension Notice
shall be delivered to such parties no later than ten (10) Business Days prior to
the expiration of the existing Servicing Period; provided, further, that any
such Servicer Extension Notice that extends the terms under this Servicing
Agreement for more than one 120-day period is revocable by the Note Insurer, in
its sole discretion, upon the occurrence of a Servicer Event of Default. The
Servicer hereby agrees that, as of the date hereof and upon its receipt of any
such Servicer Extension Notice prior to the expiration of the existing Servicing
Period, the Servicer shall be bound for the duration of the initial term and
each successive 120 day term covered by such Servicer Extension Notice to act as
the Servicer of the Mortgage Loans hereunder, unless the Servicer is otherwise
terminated in accordance with Section 8 hereof. If a Servicer Extension Notice
is delivered after the expiration of the existing Servicing Period, the Trustee,
the Note Insurer and the Servicer may agree that the Servicer shall be bound for
the Servicing Period covered by such Servicer Extension Notice to act as the
Servicer of the Mortgage Loans hereunder, unless the Servicer is otherwise
terminated in accordance with Section 8 hereof. Unless a Servicer Extension
Notice is sent, this Term Servicing Agreement and all of the Servicer's rights
and obligations hereunder and with respect to the Mortgage Loans shall expire.
(c) In the event the Trustee has not received a Servicer Extension
Notice from the Note Insurer on or before the ten (10) Business Days prior to
the expiration of the existing Servicing Period, then the Trustee may notify the
Note Insurer to that effect and inquire as to whether the Note Insurer will send
or direct the Trustee to send a Servicer Extension Notice.
6. Servicing Compensation. In consideration of the performance by the
Servicer of the servicing obligations pursuant to this Servicing Agreement, the
Servicer shall be entitled to a monthly servicing fee (the "Servicing Fee") from
the Mortgage Loans in the manner provided for in each of the 2001 Servicing
Agreements, together with such additional servicing compensation as provided in
each of the 2001 Servicing Agreements.
7. Representations and Warranties of the Servicer. The representations
and warranties made by the Servicer in each of the 2001 Servicing Agreements are
incorporated herein, and, for the purposes of this Term Servicing Agreement,
where such representations and warranties reference "this Agreement," such
reference shall be deemed to refer to each of the 2001 Servicing Agreements and
this Term Servicing Agreement.
It is understood and agreed that the representations and warranties of
the Servicer set forth in this Section shall be true and correct as of the date
of this Term Servicing Agreement.
8. Expiration. This Term Servicing Agreement shall expire upon the
earliest to occur of (i) the termination of each of the 2001 Servicing
Agreements (with respect to the Mortgage Loans with respect thereto), (ii) the
receipt of notice by the Servicer that the Trustee has terminated the rights of
the Servicer under this Term Servicing Agreement due to a breach of this Term
Servicing Agreement by the Servicer, (iii) the termination of the rights and
obligations of the Servicer under each of the 2001 Servicing Agreements (with
respect to the Mortgage Loans with respect thereto), and (iv) without further
action or notice, automatically by its terms. In preparation for the expiration
of this Servicing Agreement, the Servicer shall maintain all systems, files and
other documentation related to, and cooperate with the Trustee to effect the
orderly transfer of the servicing and administration rights granted pursuant to
this Term Servicing Agreement. Such cooperation by the Servicer shall include,
but is not limited to, notifying all Mortgagors of the transfer of servicing
rights pursuant to each of the 2001 Servicing Agreements.
9. Successors and Assigns; Servicer Not to Assign Without Consent. This
Term Servicing Agreement shall inure to the benefit of and be binding upon the
successors and assigns of the Trustee and the Servicer; provided, however, that
the Servicer shall not sell, transfer or assign any of its rights or obligations
hereunder without the written consent of the Trustee and the Note Insurer.
10. Counterparts. This Term Servicing Agreement may be executed
simultaneously in any number of counterparts, each of which counterparts shall
be deemed to be an original, and such counterparts shall constitute but one and
the same instrument.
11. Governing Law. This Term Servicing Agreement shall be construed in
accordance with the laws of the State of New York and the obligations, rights
and remedies of the parties hereunder shall be determined in accordance with
such laws.
12. Entire Agreement. This Term Servicing Agreement sets forth the
entire understanding of the parties and supersedes any and all prior agreements,
arrangements, and understanding relating to the subject matter hereof. No
representation, promise, inducement or statement of intent has been made by any
party which is not embodied in this Term Servicing Agreement, and no party shall
be bound by or liable for any alleged representation, promise, inducement or
statement of intention not expressly set forth herein. This Term Servicing
Agreement may not be amended, changed, modified or altered except by an
agreement in writing signed by the Trustee and the Servicer (or their permitted
successors or assigns). Any amendment of this Term Servicing Agreement shall
require the prior written consent of the Note Insurer.
13. Reservation of Rights. Except as specifically provided herein, this
Term Servicing Agreement does not waive, and MBIA and the Trustee hereby
reserve, all of our rights under each 2001 Servicing Agreement and all other
documents as Trustee, as Note Insurer and in whatsoever capacity, at law or
equity to damages, including injunctive relief and specific performance,
indefinitely and from this time forward for however long this process will last.
Any delay or failure in the past, at this time, or at any future time in our
exercising any right, remedy, power or privilege shall not constitute a waiver
of any provision of any document or diminish in any way any of the rights,
remedies powers or privileges provided therein or by law or equity and we shall
not be precluded from exercising any such right, remedy, power or privilege with
respect to this or any Servicer Event of Default, any state of facts currently
existing or arising in the future, or otherwise.
14. Notices. All notices, requests, demands, instructions and other
communications which are required or permitted to be given under this Term
Servicing Agreement shall be in writing and shall be deemed to have been duly
given when received, whether sent by certified mail, return receipt requested,
telex, telegram, telecopy or overnight express mail:
If to the Servicer, to:
American Business Financial Services, Inc.
Xxxxxxxxxx Xxxxxx Xxxxxx
000 Xxxxxxxxxxxx Xxxxxxxxx, Xxxxx 000
Bala Cynwyd, Pennsylvania 19004
Attention: General Counsel
Telecopy No.: (000) 000-0000
If to the Trustee, to:
JPMorgan Chase Bank
4 New York Plaza, 6'th Floor
New York, New York, 10004
Attention: Institutional Trust Services,
ABFS Mortgage Loan Trusts 2001
telephone (000) 000-0000
telecopy (000) 000-0000
If to the Note Insurer, to:
MBIA Insurance Corporation
000 Xxxx Xxxxxx
Xxxxxx, XX 00000
Telecopy: (000)000-0000
Attention: (IPM-SF)(ABFS Mortgage Loan Trusts 2001)
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SIGNATURE PAGE FOLLOWS]
IN WITNESS WHEREOF, the parties hereto have caused this Term Servicing
Agreement to be executed on their behalf by their duly authorized officers as of
the day and year first above written.
AMERICAN BUSINESS CREDIT, INC., as Servicer
By: /s/ Xxxxxxx X. Xxxxx
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Name: Xxxxxxx X. Xxxxx
Title: Executive Vice President
JPMORGAN CHASE BANK, not in its individual
capacity, but solely as Trustee
By: /s/ Xxxxx X. Xxxxxx
--------------------------------------------
Name: Xxxxx X. Xxxxxx
Title: Vice President
MBIA INSURANCE CORPORATION, as Note Insurer
By: /s/ Art Xxxxxxxxx
---------------------------------------------
Name: Art Xxxxxxxxx
Title: Vice President
