SERVICER RESIGNATION, APPOINTMENT, ASSUMPTION AND AMENDMENT AGREEMENT

 

                                                                       EXHIBIT 4

 

 

    SERVICER RESIGNATION, APPOINTMENT, ASSUMPTION AND AMENDMENT AGREEMENT

 

               MORGAN STANLEY ABS CAPITAL I INC. TRUST 2003-NC8

 

      THIS SERVICER RESIGNATION, APPOINTMENT, ASSUMPTION AND AMENDMENT

AGREEMENT, dated as of December 1, 2004 (the "Agreement"), is by and among

MORGAN STANLEY ABS CAPITAL I INC. ("Depositor"), THE PROVIDENT BANK ("Provident"

or "Servicer"), NC CAPITAL CORPORATION ("Responsible Party"), LITTON LOAN

SERVICING LP ("Litton" or "Successor Servicer"), and DEUTSCHE BANK NATIONAL

TRUST COMPANY, as trustee ("Trustee"):

 

                              W I T N E S S E T H:

 

      WHEREAS, the MORGAN STANLEY ABS CAPITAL I INC. TRUST 2003-NC8 (the

"Trust") was created pursuant to the Pooling and Servicing Agreement identified

on Schedule 1.1.A hereto (as amended from time to time, the "Servicing

Agreement") among Depositor, Servicer, Responsible Party and Trustee;

 

      WHEREAS, Provident is the Servicer under the Servicing Agreement;

 

      WHEREAS, Provident desires to resign as Servicer pursuant to Section 6.04

of the Servicing Agreement and have Litton appointed as a successor Servicer in

accordance with provisions of that Section;

 

      WHEREAS, Trustee and Depositor desire to accept the resignation of

Provident as Servicer, and acknowledge the succession of Litton to Provident as

Servicer pursuant to Sections 6.04 and 10.01 of the Servicing Agreement; and

 

      WHEREAS, the parties hereto desire to amend the Servicing Agreement

pursuant to Section 10.01 thereof to better effectuate the replacement of the

Servicer as provided herein.

 

      NOW THEREFORE, for and in consideration of good and valuable

consideration, the receipt and sufficiency of which are hereby acknowledged, and

of the mutual covenants herein contained, the parties hereto hereby agree as

follows:

 

      1. Resignation, Assignment and Appointment of Servicer. (a) Provident

hereby (i) proposes that Litton be appointed as successor Servicer to Provident

under the Servicing Agreement and the other Transaction Documents (if any), (ii)

resigns from its duties as Servicer under the Servicing Agreement and the other

Transaction Documents (if any), effective on the Closing Date, and (iii)

irrevocably assigns and otherwise conveys to Litton, effective on the Closing

Date, all of its right, title and interest in and to any and all of its rights

as Servicer under the Servicing Agreement and the other Transaction Documents

(if any).

 

     (b) The parties hereto, subject to the requirements of Section 5 hereof,

hereby consent to the resignation of Provident as Servicer and the appointment

of Litton as Servicer to replace Provident, find such appointment to be

acceptable and hereby acknowledge that pursuant to Sections 6.04 and 10.01 of

the Servicing Agreement, Litton has been designated as Servicer under the

Transaction Documents for all purposes from and after the Closing Date. Neither

Trustee nor Successor Servicer shall have any responsibility or obligation for

any act or omission of the predecessor Servicer. Subject to the terms of the

Servicing Agreement, as clarified below (including without limitation any

indemnification obligations contained in Sections 6.05 and 8.12 thereof and the

standards of care set forth in Section 3.01(a) thereof, as clarified below,

which the parties hereto expressly agree shall survive Provident's resignation

as Servicer with respect to any actions or omissions by Provident prior to the

Closing Date), from and after the Closing Date, Provident shall be released from

and shall have no further obligations as Servicer under the Transaction

Documents. For purposes of clarity, the language contained in Section 3.01(a) of

the Servicing Agreement to the effect that (a) the Servicer shall service and

administer the Mortgage Loans in accordance with the terms of the Servicing

Agreement and the respective Mortgage Loans, and, to the extent consistent with

such terms, in the same manner in which it services and administers similar

mortgage loans for its own portfolio, giving due consideration to customary and

usual standards of practice of mortgage lenders and loan servicers administering

similar mortgage loans and (b) the Servicer shall service and administer the

Mortgage Loans in accordance with applicable state and federal law, shall be

deemed to require that, in the context of the transfer of servicing effectuated

by this Agreement (and in order to be in strict compliance with the provisions

of the Servicing Agreement), each of Provident and Litton, severally, shall be

required (i) to take such actions in connection with such servicing transfer as

are required by applicable state and federal law and (ii) subject to clause (i),

to conduct itself in connection with such transfer in a manner consistent with

the standards and practices usually employed by it in effecting servicing

transfers of mortgage loans similar to the Mortgage Loans, giving due

consideration to the customary and usual standards of practice of mortgage

lenders and loan servicers engaged in servicing transfers of servicing

obligations related to mortgage loans similar to the Mortgage Loans.

Additionally, each of Provident and Litton shall: (A) reasonably cooperate with

Depositor and Trustee in connection with the Trust's satisfying the reporting

requirements under the Securities Exchange Act of 1934, as amended, and (B)

provide the information, letters, reports, and/or certifications required to be

provided by a Servicer pursuant to Sections 3.22, 3.23 and 8.12 of the Servicing

Agreement; in each case, with respect to the periods during which Provident or

Litton, as applicable, served or is serving as Servicer.

 

     (c) Litton hereby (i) accepts the assignment of rights as Servicer by

Provident, (ii) accepts the appointment as Servicer under the Servicing

Agreement and the other Transaction Documents (if any), and (iii) assumes and

agrees to discharge the due and punctual performance and observance of each

covenant and condition to be performed and observed by the Servicer under the

Servicing Agreement and the other Transaction Documents (if any), in each case,

from and after the Closing Date.

 

     (d) Promptly following the Closing Date, each account that, pursuant to the

terms of the Transaction Documents, is required to be established and maintained

by the Servicer shall thereafter be moved to and maintained by Successor

Servicer at Wachovia Bank National Association; provided, however, that such

accounts shall continue to be required to satisfy all requirements for such

accounts under the Transaction Documents. This Agreement shall be deemed to

satisfy any and all requirements contained in any Transaction Document for

notice of change in any such account.

 

      2. Amendments to Servicing Agreement. Effective as of the Closing Date,

the Servicing Agreement is hereby amended as follows:

 

     (a) Article I of the Servicing Agreement is hereby amended to add the

following definition:

 

            Successor Servicer: Litton Loan Servicing LP, as successor servicer

             pursuant to that certain Servicer Resignation, Appointment,

            Assumption and Amendment Agreement dated as of December 1, 2004,

            among The Provident Bank, Litton Loan Servicing LP, the Depositor,

            the Responsible Party, and the Trustee.

 

     (b) Subsection 3.02(b)(ii) of the Servicing Agreement shall be deleted in

its entirety and replaced with the following:

 

            "(ii) an institution approved as a Title II Nonsupervised Lender by

            the Federal Housing Administration or an institution that has

            deposit accounts insured by the FDIC."

 

      (c) Section 10.07 of the Servicing Agreement shall be deleted in its

entirety and replaced with the following:

 

                  "Section 10.07. Assignment; Sales; Advance Facilities.

 

                  Notwithstanding anything to the contrary contained herein,

            except as provided in Section 6.02, this Agreement may not be

            assigned by the Servicer without the prior written consent of the

            Trustee and Depositor; provided, however, that:

 

                  (a) The Servicer is hereby authorized to enter into a

            financing or other facility (any such arrangement, an "Advance

            Facility"), the documentation for which complies with Sections

            10.07(b), (c) and (e) below, under which (1) the Servicer assigns or

            pledges its rights under this Agreement to be reimbursed for any or

            all Advances and/or Servicing Advances to (i) a Person, which may be

            a special-purpose bankruptcy-remote entity (an "SPV"), (ii) a

            Person, which may simultaneously assign or pledge such rights to an

            SPV or (iii) a lender (a "Lender"), which, in the case of any Person

             or SPV of the type described in either of the preceding clauses (i)

            or (ii), may directly or through other assignees and/or pledgees,

            assign or pledge such rights to a Person, which may include a

            trustee acting on behalf of holders of debt instruments (any such

            Person or any such Lender, an "Advance Financing Person"), and/or

            (2) an Advance Financing Person agrees to fund all of the P&I

            Advances and/or Servicing Advances required to be made by the

            Servicer pursuant to this Agreement. No consent of the Trustee,

            Certificateholders or any other party shall be required before the

            Servicer may enter into an Advance Facility nor shall the Trustee or

            the Certificateholders be a third party beneficiary of any

            obligation of an Advance Financing Person to the Servicer.

            Notwithstanding the existence of any Advance Facility under which an

            Advance Financing Person agrees to fund P&I Advances and/or

            Servicing Advances, (A) the Servicer (i) shall remain obligated

            pursuant to this Agreement to make P&I Advances and/or Servicing

            Advances pursuant to and as required by this Agreement and (ii)

            shall not be relieved of such obligations by virtue of such Advance

            Facility and (B) neither the Advance Financing Person nor any

            Servicer's Assignee (as hereinafter defined) shall have (i) any

             right to proceed against or otherwise contact any Mortgagor for the

            purpose of collecting any payment that may be due with respect to

            any related Mortgage Loan or enforcing any covenant of such

            Mortgagor under the related Mortgage Loan documents or (ii) any

            rights under or in respect of this Agreement that are any greater

            than the rights of the Servicer hereunder.

 

                  (b) If the Servicer enters into an Advance Facility, the

             Servicer and the related Advance Financing Person shall deliver to

            the Trustee at the address set forth in Section 10.05 hereof a

            written notice (an "Advance Facility Notice"), stating (i) the

            identity of the Advance Financing Person, (ii) the identity of the

            Person (the "Servicer's Assignee") that will, subject to

            satisfaction of the requirements in Section 10.07(c) hereof, have

            the right to make withdrawals from the Collection Account pursuant

            to Section 3.11 hereof to reimburse previously unreimbursed P&I

            Advances and/or Servicing Advances ("Advance Reimbursement Amounts")

            and (iii) that the Advance Financing Person and Servicer's Assignee

             have each been provided with copies of this Agreement, including

            this Section 10.07 and agree to be bound by the provisions of this

            Section 10.07 and acknowledges that its rights may be exercised only

            as provided, and subject to the conditions, herein. The Advance

            Facility Notice shall be executed by the Advance Financing Person,

            the Servicer, and the Servicer's Assignee. Advance Reimbursement

            Amounts (i) shall consist solely of amounts in respect of P&I

            Advances and/or Servicing Advances for which the Servicer would be

            permitted to reimburse itself in accordance with Section 3.11

            hereof, assuming the Servicer had made the related P&I Advance(s)

            and/or Servicing Advance(s) and (ii) shall not consist of amounts

            payable to a successor Servicer in accordance with Section 3.11

            hereof to the extent permitted under Section 10.07(e) below.

 

                  (c) Notwithstanding the existence of an Advance Facility, the

            Servicer, on behalf of the Advance Financing Person, shall be

            entitled to continue to withdraw Advance Reimbursement Amounts in

            accordance with Section 3.11 hereof. The Servicer's entitlement to

            withdraw Advance Reimbursement Amounts may be terminated by the

            Advance Financing Person pursuant to a written notice to the Trustee

            delivered in the manner set forth in Section 10.05 hereof. Upon

            receipt of a written notice of termination that satisfies the

            requirements of this Section 10.07(c), the Servicer shall no longer

            be entitled to withdraw Advance Reimbursement Amounts from the

            Collection Account and the Servicer's Assignee shall thereafter have

            the right to withdraw from the Collection Account all Advance

            Reimbursement Amounts when and to the extent such amounts are

            payable to the Servicer pursuant to the terms of Section 3.11

            hereof. Notwithstanding the foregoing, and for the avoidance of

            doubt, (i) the Servicer and/or the Servicer's Assignee shall only be

            entitled to reimbursement of Advance Reimbursement Amounts hereunder

            pursuant to Section 3.11 of this Agreement and shall be required to

            return to the Trustee, for the benefit of the Certificateholders,

            all amounts, with interest, withdrawn by it in error or that are in

             excess of the Servicer's entitlement thereto under this Agreement,

            and shall not otherwise be entitled to make withdrawals of, or

            receive, Advance Reimbursement Amounts that shall be deposited in

            the Distribution Account pursuant to Section 3.11 or Section 3.07(d)

            hereof, and (ii) none of the Trustee or the Certificateholders shall

            have any right to, or otherwise be entitled to, receive any Advance

            Reimbursement Amounts to which the Servicer or Servicer's Assignee,

            as applicable, shall be entitled pursuant to Section 3.11 hereof. An

            Advance Facility may be terminated by the joint written direction of

            the Servicer and the related Advance Financing Person. Written

            notice of such termination shall be delivered to the Trustee in the

            manner set forth in Section 10.05 hereof. None of the Depositor or

            the Trustee shall, as a result of the existence of any Advance

             Facility, have any additional duty or liability with respect to the

            calculation or payment of any Advance Reimbursement Amount, nor, as

            a result of the existence of any Advance Facility, shall the

            Depositor or the Trustee have any additional responsibility,

            including without limitation, to track or monitor the administration

            of the Advance Facility or the payment of Advance Reimbursement

            Amounts to the Servicer's Assignee. The Servicer shall indemnify the

            Depositor, the Trustee, any successor Servicer and the Trust Fund

            for any claim, loss, liability or damage resulting from any claim by

            the related Advance Financing Person, except to the extent that such

            claim, loss, liability or damage resulted from or arose out of

            negligence, recklessness or willful misconduct on the part of the

            Depositor, the Trustee or any successor Servicer, as the case may

            be, or failure by the successor Servicer to remit funds as required

            by this Agreement or the commission of an act or omission to act by

            the successor Servicer and the passage of any applicable cure or

            grace period, such that an Event of Default under this Agreement

            occurs or such entity is subject to termination for cause under this

            Agreement. The Servicer shall maintain and provide to any successor

            Servicer and, upon request, the Trustee a detailed accounting on a

            loan-by-loan basis as to amounts advanced by, pledged or assigned

            to, and reimbursed to any Advance Financing Person. The successor

            Servicer shall be entitled to rely on any such information provided

            by the predecessor Servicer, and the successor Servicer shall not be

            liable for any errors in such information.

 

                  (d) An Advance Financing Person who receives an assignment or

            pledge of rights to receive Advance Reimbursement Amounts and/or

            whose obligations are limited to the funding of P&I Advances and/or

            Servicing Advances pursuant to an Advance Facility shall not be

            required to meet the criteria for qualificati