EXHIBIT 10.17.2
CUSTODIAL AGREEMENT
CUSTODIAL AGREEMENT (as amended, restated, supplemented or otherwise
modified and in effect from time to time, this "Custodial Agreement"), dated as
of January 27, 2006, made by and among:
(i) AMERICAN HOME MORTGAGE CORP., a New York corporation, AMERICAN HOME
MORTGAGE INVESTMENT CORP., a Maryland corporation, AMERICAN HOME MORTGAGE
HOLDINGS, INC., a Delaware corporation, AMERICAN HOME MORTGAGE ACCEPTANCE, INC.,
a Maryland corporation, and AMERICAN HOME MORTGAGE SERVICING, INC., a Maryland
corporation, (each a "Seller", collectively the "Sellers");
(ii) MORGAN STANLEY BANK (the "Buyer Agent"); and
(iii) DEUTSCHE BANK NATIONAL TRUST COMPANY, as custodian for the Buyer
Agent pursuant to this Custodial Agreement (in such capacity, the "Custodian").
RECITALS
The Buyer Agent, the Custodian and the Sellers are parties to that certain
Amended and Restated Custodial Agreement, dated as of November 26, 2003 (as
amended, supplemented or otherwise modified prior to the date hereof, the
"Existing Custodial Agreement").
The Sellers and the Buyer Agent are parties to that certain Master
Repurchase Agreement, dated as of the date hereof (as amended, restated,
supplemented or otherwise modified and in effect from time to time, the
"Repurchase Agreement"), pursuant to which the Buyers have agreed, subject to
the terms and conditions of the Repurchase Agreement, to purchase Eligible
Mortgage Loans (as defined therein) from the Sellers. The Repurchase Agreement
is being entered into in substitution for that certain Amended and Restated
Master Loan and Security Agreement, dated as of November 26, 2003, among the
parties thereto.
It is a condition precedent to the effectiveness of the Repurchase
Agreement, and the Sellers, the Custodian and the Buyer Agent have agreed, that
this Custodial Agreement shall be substituted for the Existing Custodial
Agreement.
Accordingly, the Sellers, the Custodian and the Buyer Agent hereby agree,
in consideration of the mutual premises and mutual obligations set forth herein,
that this Custodial Agreement is entered into in substitution for the Existing
Custodial Agreement, and in furtherance of the foregoing agree as follows:
Section 1. Definitions.
Unless otherwise defined herein, terms defined in the Repurchase Agreement
shall have their respective assigned meanings when used herein, and the
following terms shall have the following meanings:
"Affiliate" shall mean (i) with respect to the Buyer Agent, MS & Co. and
Morgan Stanley Dean Witter & Co., and (ii) with respect to any other Person, any
"affiliate" of such Person as such term is defined in the United States
Bankruptcy Code in effect from time to time.
"Agency" shall mean Fannie Mae or Freddie Mac.
"Agency Guide" shall mean, with respect to Fannie Mae securities, the
Fannie Mae Selling Guide and the Fannie Mae Servicing Guide, with respect to
Freddie Mac securities, the Freddie Mac Sellers' and Servicers' Guide, and with
respect to California Program securities, the applicable program manual and the
servicer's guide, in each case including all exhibits thereto, as such Agency
Guide may be amended, supplemented or otherwise modified from time to time."
"Agency Program" shall mean a specific mortgage backed securities swap or
purchase program under the relevant Agency Guide or as otherwise approved by the
Agency with respect to Mortgage Loans originated pursuant to the Agency Guide.
"Assignment of Mortgage" means, with respect to any mortgage, an
assignment of the mortgage, notice of transfer or equivalent instrument in
recordable form, sufficient under the laws of the jurisdiction wherein the
related mortgaged property is located to reflect the assignment and pledge of
the mortgage.
"Authorized Representative" shall have the meaning specified in Section 18
hereof.
"Business Day" shall mean any day other than (i) a Saturday or Sunday or
(ii) a day on which the New York Stock Exchange, the Federal Reserve Bank of New
York or the Custodian is authorized or obligated by law or executive order to be
closed.
"Cooperative Corporation" shall mean the cooperative apartment corporation
that holds legal title to a Cooperative Project and grants occupancy rights to
units therein to stockholders through Proprietary Leases or similar
arrangements.
"Cooperative Mortgage Loan" shall mean a Mortgage Loan that is secured by
a first lien on a perfected security interest in Cooperative Shares and the
related Proprietary Lease granting exclusive rights to occupy the related
Cooperative Unit in the building owned by the related Cooperative Corporation.
"Cooperative Project" shall mean all real property owned by a Cooperative
Corporation including the land, separate dwelling units and all common elements.
"Cooperative Shares" shall mean the shares of stock issued by a
Cooperative Corporation and allocated to a Cooperative Unit and represented by a
stock certificate.
"Cooperative Unit" shall mean a specific unit in a Cooperative Project.
"Custodial Agreement" shall mean this Custodial Agreement, as the same
shall be amended, restated, supplemented or otherwise modified and in effect
from time to time in accordance with the terms hereof.
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"Custodial Delivery Failure" shall have the meaning assigned to such term
in Section 13(c).
"Custodial Identification Certificate" shall mean the certificate executed
by the Sellers in connection with the sale of Eligible Mortgage Loans to the
Buyers to be held by the Custodian pursuant to this Custodial Agreement, a form
of which is attached as Annex 3 hereto.
"Electronic Agent" shall have the meaning assigned to such term in Section
2 of the Electronic Tracking Agreement.
"Electronic Tracking Agreement" shall mean the Electronic Tracking
Agreement, dated as of the date hereof, among the Sellers, the Buyer Agent, the
Electronic Agent and MERS, as the same shall be amended, restated, supplemented
or otherwise modified and in effect from time to time.
"Eligible Cooperative Mortgage Loan" shall mean a Cooperative Mortgage
Loan as to which the representations and warranties in Section 6.11 of the
Repurchase Agreement and the eligibility criteria set forth in Part I of
Schedule 1 of the Repurchase Agreement are correct.
"Eligible Mortgage Loan" shall mean a Mortgage Loan secured by a first
mortgage lien on a one-to-four family residential property (a) as to which the
representations and warranties in Section 6.10 and Part I of Schedule 1 of the
Repurchase Agreement are correct and (b) which is either an Agency Eligible
Mortgage Loan, an Alternate `A' Mortgage Loan, a California Program Mortgage
Loan, an Eligible Cooperative Mortgage Loan, a Jumbo Mortgage Loan, a MERS
Designated Mortgage Loan or a Conduit Eligible Mortgage Loan; provided, that in
no event shall any Eligible Mortgage Loan be a security for purposes of any
securities or blue sky laws.
"Exception" shall mean, with respect to any Mortgage Loan, any of the
following: the variances from the requirements of Section 2 hereof with respect
to the Mortgage Files (giving effect to the Sellers' right to deliver certified
copies in lieu of original documents in certain circumstances).
"MERS Designated Mortgage Loan" shall have the meaning assigned to such
term in Section 3 of the Electronic Tracking Agreement.
"MERS Identification Number" shall mean the eighteen digit number
permanently assigned to each MERS Designated Mortgage Loan.
"MERS Procedures Manual" shall mean the MERS Procedures Manual attached as
Exhibit B to the Electronic Tracking Agreement, as it may be amended,
supplemented or modified from time to time.
"MERS Report" shall mean the schedule listing MERS Designated Mortgage
Loans and other information prepared by the Electronic Agent pursuant to the
Electronic Tracking Agreement.
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"MERS(R) System" shall mean the Electronic Agent's mortgage electronic
registry system, as more particularly described in the MERS Procedures Manual."
"Mortgage File" shall mean, as to each Mortgage Loan, those documents
listed in Section 2 of this Custodial Agreement that are delivered to the
Custodian or which at any time come into the possession of the Custodian.
"Mortgage Loan" shall mean a mortgage loan which the Custodian has been
instructed to hold for the Buyer Agent pursuant to this Custodial Agreement.
"Mortgage Loan Schedule" shall mean a list (in computer readable form) of
Eligible Mortgage Loans to be sold pursuant to the Repurchase Agreement,
attached to a Custodial Identification Certificate, setting forth, as to each
Eligible Mortgage Loan, the applicable information specified on Annex 1 to this
Custodial Agreement.
"Mortgage Loan Schedule and Exception Report" shall mean a list of
Eligible Mortgage Loans delivered by the Custodian to the Buyer Agent on each
Business Day, reflecting the Mortgage Loans held by the Custodian for the
benefit of the Buyer Agent on behalf of the Buyers, which includes codes
indicating any Exceptions with respect to each Mortgage Loan listed thereon.
Each Mortgage Loan Schedule and Exception Report shall set forth (a) the
Mortgage Loans being sold to the Buyers on any applicable Purchase Date as well
as the Mortgage Loans previously sold to the Buyers and held by the Custodian
hereunder, (b) any Mortgage Loan that has been released to a Seller pursuant to
Section 5 hereof and the date such Mortgage Loan was released and (c) all
Exceptions with respect thereto, with any updates thereto from the time last
delivered.
"Officer's Certificate" shall mean a certificate signed by a Responsible
Officer of the Person delivering such certificate and delivered as required by
this Custodial Agreement.
"Opinion of Counsel" shall mean a written opinion letter of counsel in
form and substance reasonably acceptable to the party receiving such opinion
letter.
"Pledgee" shall have the meaning specified in Section 25 hereof.
"Proceeds" shall mean whatever is receivable or received when Purchased
Items or proceeds are sold, collected, exchanged or otherwise disposed of,
whether such disposition is voluntary or involuntary, and includes, without
limitation, all rights to payment, including return premiums, with respect to
any insurance relating thereto.
"Proprietary Lease" shall mean a lease on (or occupancy agreement with
respect to) a Cooperative Unit evidencing the possessory interest of the owner
of the Cooperative Shares or the Seller in such Cooperative Unit.
"Recognition Agreement" shall mean, with respect to a Cooperative Mortgage
Loan, an agreement executed by a Cooperative Corporation which, among other
things, acknowledges the lien of the Mortgage on the Mortgaged Property in
question.
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"Report" shall mean a report in computer readable form prepared by the
Custodian, which shall be in a form acceptable to the Buyer Agent and the
Custodian detailing, with respect to any Mortgage Loan that has been released by
the Custodian, the following: (i) the Mortgage Loan identification number and
borrower name, (ii) the location to which such Mortgage File was delivered by
the Custodian and (iii) the date on which such Mortgage File was released by the
Custodian.
"Review Procedures" shall have the meaning specified in Section 3(c)
hereof.
"Security Agreement" the specific security agreement creating a security
interest on and pledge of the Cooperative Shares and the appurtenant Proprietary
Lease securing a Cooperative Mortgage Loan.
"Trust Receipt" shall mean a Trust Receipt in the form annexed hereto as
Annex 2 delivered to the Buyer Agent by the Custodian covering all of the
Mortgage Loans subject to this Custodial Agreement from time to time, as
reflected on the Mortgage Loan Schedule and Exception Report attached thereto in
accordance with Section 3(e).
Section 2. Delivery of Mortgage Files.
No later than 11:00 p.m., New York City time, one (1) Business Day prior
to any Purchase Date (in the case of the first 150 Eligible Mortgage Loans
delivered in connection with any Purchase Date) plus one additional Business Day
prior to any Purchase Date (for each additional 100 Eligible Mortgage Loans in
excess thereof delivered in connection with any Purchase Date) (provided, that,
such timing requirements shall be inapplicable in the case of Mortgage Loans
already held by the Custodian for any other reason), the applicable Seller shall
release to the Custodian the following original documents pertaining to each
Eligible Mortgage Loan to be sold to the Buyers and included in the Margin Base
on such Purchase Date, each of which Mortgage Loans shall be identified in a
Mortgage Loan Schedule delivered therewith, in a computer readable format
acceptable to the Sellers and the Custodian, with a copy of such Mortgage Loan
Schedule delivered to the Buyer Agent (or, if another time is specified below
for such release or delivery, at such other time):
(A) With respect to each Eligible Mortgage Loan:
(a) The original Mortgage Note bearing all intervening
endorsements, endorsed "Pay to the order of _________ without
recourse" and signed in the name of the last endorsee (the
"Last Endorsee") (in the event that the Mortgage Loan was
acquired by the Last Endorsee in a merger, the signature must
be in the following form: "[Last Endorsee], successor by
merger to [name of predecessor]"; in the event that the
Mortgage Loan was acquired or originated by the Last Endorsee
while doing business under another name, the signature must be
in the following form: "[Last Endorsee], formerly known as
[previous name]").
(b) The original of the guarantee executed in connection with the
Mortgage Note (if any).
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(c) The original Mortgage with evidence of recording thereon, or a
copy thereof together with an Officer's Certificate of the
applicable Seller, title company, escrow agent or closing
attorney certifying that such represents a true and correct
copy of the original and that such original has been submitted
for recordation in the appropriate governmental recording
office of the jurisdiction where the Mortgaged Property is
located.
(d) The originals of all assumption, modification, consolidation
or extension agreements (if any) with evidence of recording
thereon, or copies thereof together with an Officer's
Certificate of the applicable Seller, title company, escrow
agent or closing attorney certifying that such represent true
and correct copies of the originals and that such originals
have each been submitted for recordation in the appropriate
governmental recording office of the jurisdiction where the
Mortgaged Property is located (provided, that the Custodian
shall have no duty to verify whether any such documents
exist).
(e) Except in the case of a MERS Designated Mortgage Loan, the
original Assignment of Mortgage in blank for each Mortgage
Loan, in form and substance acceptable for recording and
signed in the name of the Last Endorsee (in the event that the
Mortgage Loan was acquired by the Last Endorsee in a merger,
the signature must be in the following form: "[Last Endorsee],
successor by merger to [name of predecessor]"; in the event
that the Mortgage Loan was acquired or originated while doing
business under another name, the signature must be in the
following form: "[Last Endorsee], formerly known as [previous
name]").
(f) Except in the case of a MERS Designated Mortgage Loan, the
originals of all intervening assignments of mortgage (if any)
with evidence of recording thereon, showing an unbroken chain
of title from the originator thereof to the Last Endorsee or
copies thereof together with an Officer's Certificate of the
applicable Seller, title company, escrow agent or closing
attorney certifying that such represent true and correct
copies of the originals and that such originals have each been
submitted for recordation in the appropriate governmental
recording office of the jurisdiction where the Mortgaged
Property is located.
(g) [intentionally omitted.]
(h) The original of any security agreement, chattel mortgage or
equivalent document executed in connection with the Mortgage
Loan; provided, that the Custodian shall have no duty to
verify whether any such documents exist.
(i) Solely with respect to each MERS Designated Mortgage Loan, a
MERS Report.
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(B) With respect to each Eligible Cooperative Mortgage Loan:
(a) the original Security Agreement;
(b) the original Cooperative Shares;
(c) a stock power executed in blank by the Person in whose name
the Cooperative Shares are issued;
(d) the Proprietary Lease or occupancy agreement, accompanied by
an assignment in blank of such proprietary lease;
(e) a Recognition Agreement executed by the Cooperative
Corporation, which requires the Cooperative Corporation to
recognize the rights of the lender and its successors in
interest and assigns, under the Cooperative Mortgage Loan,
accompanied by an assignment of such recognition agreement in
blank;
(f) UCC-1 financing statements with recording information thereon
from the appropriate governmental recording offices if
necessary to perfect the security interest of the Cooperative
Mortgage Loan under the Uniform Commercial Code in the
jurisdiction in which the Cooperative Project is located,
accompanied by UCC-3 financing statements executed in blank
for recordation of the change in the secured party thereunder;
and
(g) any guarantees, if applicable.
From time to time, the Sellers shall forward to the Custodian additional
original documents or additional documents evidencing any assumption,
modification, consolidation or extension of a Mortgage Loan approved by the
applicable Seller, in accordance with the terms of the Repurchase Agreement, and
upon receipt of any such other documents. Subject to the inclusion of these
documents within the Custodial Identification Certificate and Mortgage Loan
Schedule delivered by the Sellers, upon receipt, the Custodian shall hold such
additional documents.
With respect to any documents which have been delivered or are being
delivered to recording offices for recording and have not been returned to the
applicable Seller in time to permit their delivery hereunder at the time
required, in lieu of delivering such original documents, such Seller shall
deliver to the Custodian a true copy thereof with an Officer's Certificate of
the applicable Seller, title company, escrow agent or closing attorney
certifying that such copy is a true, correct and complete copy of the original,
which has been transmitted for recordation. Each Seller shall deliver such
original documents to the Custodian promptly when they are received.
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Section 3. Custodial Identification Certificate; Mortgage Loan Schedule and
Exception Report; Trust Receipt.
(a) No later than 12:00 p.m., New York City time, two (2) Business Days
prior to each Purchase Date, the applicable Seller shall provide the Custodian
with a Custodial Identification Certificate and a related Mortgage Loan Schedule
(such information contained on the Mortgage Loan Schedule shall be delivered to
the Custodian in computer-readable form) with respect to the Eligible Mortgage
Loans to be sold to the Buyers on such Purchase Date. If the Custodian has
received such Custodial Identification Certificate by the time set forth above,
and has received a Mortgage File for a Mortgage Loan identified on the Mortgage
Loan Schedule attached thereto by the time set forth in Section 2 hereof, then
on such Purchase Date, the Custodian will deliver, via electronic transmission
acceptable to the Buyer Agent and the Custodian (or via facsimile in the event
of a delivery failure via such electronic transmission), no later than 11:00
a.m., New York City time, to the Buyer Agent a Mortgage Loan Schedule and
Exception Report for each Mortgage Loan sold on such date, with Exceptions
identified by the Custodian as current as of the date and time of delivery of
such Mortgage Loan Schedule and Exception Report.
(b) Notwithstanding and in addition to the foregoing, on each Business
Day, as of the opening of business on such Business Day, the Custodian shall
deliver to the applicable Seller and the Buyer Agent, via electronic
transmission acceptable to the Buyer Agent and the Custodian (or via facsimile
in the event of a delivery failure via such electronic transmission), a
superceding Mortgage Loan Schedule and Exception Report, in each case no later
than 12:00 noon, New York City time, which shall supercede and replace any and
all previously delivered Mortgage Loan Schedule and Exception Reports and which
shall reflect the Exceptions identified by the Custodian as of the Business Day
prior to the date of delivery of the applicable Mortgage Loan Schedule and
Exception Report.
(c) Each Mortgage Loan Schedule and Exception Report shall list all
Exceptions using such codes as shall be in form and substance agreed to by the
Custodian and the Buyer Agent. Each Mortgage Loan Schedule and Exception Report
shall be superseded by a subsequently issued Mortgage Loan Schedule and
Exception Report. The delivery of each Mortgage Loan Schedule and Exception
Report to the Buyer Agent shall be the Custodian's representation that, other
than the Exceptions listed as part of the Exception Report: (i) all documents
required to be delivered in respect of such Mortgage Loan pursuant to Section 2
of this Custodial Agreement have been delivered and are in the possession of the
Custodian as part of the Mortgage File for such Mortgage Loan, (ii) all such
documents have been reviewed by the Custodian in accordance with the review
procedures attached hereto as Annex 4 (the "Review Procedures") and appear on
their face to be regular and to relate to such Mortgage Loan and to satisfy
(except in the case of a MERS Designated Mortgage Loan) the requirements set
forth in Section 2 of this Custodial Agreement, (iii) each Mortgage Loan (except
in the case of a MERS Designated Mortgage Loan) identified on such Mortgage Loan
Schedule and Exception Report is being held by the Custodian as the bailee for
the Buyer Agent and/or its designees pursuant to this Custodial Agreement and
(iv) each MERS Designated Mortgage Loan is being held by MERS as the bailee for
the Buyer Agent and/or its designees pursuant to the Repurchase Agreement.
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(d) In connection with a Mortgage Loan Schedule and Exception Report
delivered hereunder by the Custodian, the Custodian shall make no
representations as to and shall not be responsible to verify (A) the validity,
legality, enforceability, due authorization, recordability, sufficiency, or
genuineness of any of the documents contained in each Mortgage File, (B) the
collectability, insurability, effectiveness or suitability of any such Mortgage
Loan or (C) whether such Mortgage Loan is an "Eligible Mortgage Loan" pursuant
to the Repurchase Agreement. Subject to the following sentence, each of the
Sellers and the Buyer Agent hereby give the Custodian notice that from and after
the Purchase Date, the Buyers shall own (or in the event the Transactions are
characterized as loans, the Buyer Agent, for the ratable benefit of the Buyers,
shall have a security interest in) each Mortgage Loan identified on a Mortgage
Loan Schedule and Exception Report until such time that the Custodian receives
written notice from the Buyer Agent that the Buyers no longer own such Mortgage
Loan. In the event that the Buyers do not enter into a Transaction with the
applicable Seller prior to 5:00 p.m., New York City time, on such Purchase Date,
upon written notice thereof from the applicable Seller, acknowledged by the
Buyer Agent, the Custodian shall hold or release to such Seller, pursuant to
such Seller's written instructions, the Mortgage Loans in respect of the
Mortgage Loan Schedule and Exception Report delivered by the Custodian on such
Purchase Date. Each Mortgage Loan Schedule and Exception Report delivered to the
Buyer Agent by the Custodian, via electronic transmission acceptable to the
Buyer Agent and the Custodian (or via facsimile in the event of a delivery
failure via such electronic transmission), shall be deemed superseded and
canceled upon the delivery of a subsequent Mortgage Loan Schedule and Exception
Report.
(e) In addition to the foregoing, on the initial Purchase Date, the
Custodian shall deliver to the Buyer Agent, no later than 11:00 a.m., New York
City time, a Trust Receipt with a Mortgage Loan Schedule and Exception Report
attached thereto via electronic transmission acceptable to the Buyer Agent and
the Custodian (or via facsimile in the event of a delivery failure via such
electronic transmission) (with the original to follow on the next Business Day).
Each Mortgage Loan Schedule and Exception Report delivered by the Custodian to
the Buyer Agent shall supersede and cancel the Mortgage Loan Schedule and
Exception Report previously delivered by the Custodian to the Buyer Agent
hereunder, and shall replace the then existing Mortgage Loan Schedule and
Exception Report to be attached to the Trust Receipt. Notwithstanding anything
to the contrary set forth herein, in the event that the Mortgage Loan Schedule
and Exception Report attached to the Trust Receipt is different from the most
recently delivered Mortgage Loan Schedule and Exception Report, then the most
recently delivered Mortgage Loan Schedule and Exception Report shall control and
be binding upon the parties hereto.
Section 4. Obligations of the Custodian.
(a) The Custodian shall maintain continuous custody of all items
constituting the Mortgage Files in secure facilities in accordance with
customary standards for such custody and shall reflect in its records the
interest of the Buyers therein. Each Mortgage Note (and Assignment of Mortgage)
shall be maintained in fire resistant facilities.
(b) With respect to the documents constituting each Mortgage File relating
to a Mortgage Loan listed on the related Mortgage Loan Schedule and Exception
report, the Custodian shall (i) act exclusively as the bailee of, and custodian
for, the Buyer Agent, (ii) hold
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all documents constituting such Mortgage File received by it for the exclusive
use and benefit of the Buyer Agent, and (iii) make disposition thereof only in
accordance with the terms of this Custodial Agreement or with written
instructions furnished by the Buyer Agent; provided, however, that in the event
of a conflict between the terms of this Custodial Agreement and the written
instructions of the Buyer Agent, the Buyer Agent's written instructions shall
control.
(c) In the event that (i) the Buyer Agent, any Seller or the Custodian
shall be served by a third party with any type of levy, attachment, writ or
court order with respect to any Mortgage File or any document included within a
Mortgage File or (ii) a third party shall institute any court proceeding by
which any Mortgage File or a document included within a Mortgage File shall be
required to be delivered otherwise than in accordance with the provisions of
this Custodial Agreement, the party receiving such service shall promptly
deliver or cause to be delivered to the other parties to this Custodial
Agreement copies of all court papers, orders, documents and other materials
concerning such proceedings. The Custodian shall, to the extent permitted by
law, continue to hold and maintain all the Mortgage Files that are the subject
of such proceedings pending a final, nonappealable order of a court of competent
jurisdiction permitting or directing disposition thereof. Upon final
determination of such court, the Custodian shall dispose of such Mortgage File
or any document included within such Mortgage File as directed by the Buyer
Agent, which shall give a direction consistent with such court determination.
Expenses and fees (including, without limitation, attorney's fees) of the
Custodian incurred as a result of such proceedings shall be borne by the
Sellers, jointly and severally.
(d) The Buyer Agent hereby acknowledges that the Custodian shall not be
responsible for the validity and perfection of the Buyer Agent's security
interest in the Purchased Items hereunder, other than the Custodian's obligation
to take possession of Purchased Items as set forth in Section 2 hereof.
(e) The Custodian shall have no duties or responsibilities except those
that are specifically set forth herein, shall not be liable except for the
performance of such duties and obligations and no implied covenants or
obligations shall be read into this Custodial Agreement against the Custodian.
(f) The Custodian shall have no responsibility nor duty with respect to
any Mortgage Files while not in its possession.
(g) The Custodian shall be under no obligation to make any investigation
into the facts or matters stated in any resolution, certificate, statement,
acknowledgement, consent, order, document in the Mortgage File, or any other
document.
(h) The Custodian shall not be liable with respect to any action taken or
omitted to be taken in accordance with the written direction, instruction,
acknowledgment, consent or any other communication from the Buyer Agent.
(i) The provisions of this Section 4 shall survive the resignation or
removal of the Custodian and the termination of this Custodial Agreement.
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Section 5. Release of Purchased Items.
(a) From time to time until the Custodian is otherwise notified in writing
by the Buyer Agent, which notice shall be given by the Buyer Agent only
following the occurrence of an Event of Default, the Custodian shall, upon
receipt of written request of the applicable Seller and written authorization of
the Buyer Agent, to release documentation relating to Mortgage Loans in the
possession of the Custodian to such Seller, or its designee, for the purpose of
correcting documentary deficiencies relating thereto against a Request for
Release and Receipt executed by the applicable Seller in the form of Annex 5-A
hereto. The applicable Seller or its designee shall return to the Custodian each
document previously released from the Custodian's Mortgage File within thirty
(30) calendar days of receipt thereof. Each Seller hereby further represents and
warrants to the Buyer Agent that any such request by a Seller for release of
Purchased Items shall be solely for the purposes of correcting clerical or other
non-substantial documentation problems in preparation for returning such
Purchased Items to the Custodian for ultimate sale or exchange and that the
applicable Seller has requested such release in compliance with all terms and
conditions of such release set forth in the Repurchase Agreement.
(b) From time to time until the Custodian is otherwise notified in writing
by the Buyer Agent, which notice shall be given by the Buyer Agent only
following the occurrence of an Event of Default, the Custodian shall, upon
written receipt from the applicable Seller or its designee of a Request for
Release of Documents and Receipt in the form of Annex 5-B hereto and written
authorization of the Buyer Agent, release to such Seller or its designee the
related Custodian's Mortgage File or the documents set forth in such request and
receipt. The applicable Seller or its designee shall hold each Mortgage File
delivered to it pursuant to this Section 5(b) as bailee for the Buyer Agent.
Such Seller or its designee shall return to the Custodian each document
previously released from the Custodian's Mortgage File within thirty (30)
calendar days of receipt thereof. Each Seller hereby further represents and
warrants to the Buyer Agent that any such request by any Seller or its designee
for release of Purchased Items shall be solely for the purposes of foreclosure
or servicing of any of the Mortgage Loans.
(c) (i) Upon receipt of a Request for Release of Documents executed by the
applicable Seller in the form of Annex 5-C hereto, with an electronic copy to
the Buyer Agent, the Custodian shall release Mortgage Files in its possession to
approved third-party purchasers listed on Annex 12 attached hereto (each an
"Approved Purchaser") for the purpose of resale thereof. The applicable Seller
or such Approved Purchaser shall return to the Custodian each document
previously released from the Custodian's Mortgage File within forty-five (45)
calendar days of receipt thereof.
(ii) Any transmittal of documentation for Mortgage Loans in the
possession of the Custodian in connection with the sale thereof to an
Approved Purchaser will be under cover of a transmittal letter
substantially in the form attached hereto as Annex 10 duly completed by
the Custodian and executed by the Custodian.
(iii) Any transmittal of documentation for Mortgage Loans in the
possession of the Custodian in connection with the shipment to a custodian
or trustee in connection with the formation of a mortgage pool supporting
a mortgage-backed security (an "MBS") will be under cover of a transmittal
letter substantially in the form attached
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hereto as Annex 11. Promptly upon (x) the remittance by such Approved
Purchaser of the full purchase price of the Mortgage Loan or (y) the
issuance of such MBS, the Buyer Agent shall notify the Custodian thereof.
In connection with any request to deliver Mortgage Files pursuant to this
Section 5(c), the applicable Seller shall provide the Custodian with a
Mortgage Loan Schedule in computer readable form and shall provide no less
than one Business Day's notice for each 150 Mortgage Files requested for
release; provided, that such prior notice shall not be required if the
Custodian is to be the recipient of such files on behalf of such
third-party purchaser or is the custodian or trustee in respect of such
MBS.
(d) From time to time until the Custodian is otherwise notified in writing
by the Buyer Agent, and with the prior written consent of the Buyer Agent, the
Sellers may substitute for one or more Eligible Mortgage Loans constituting the
Purchased Items one or more substitute Eligible Mortgage Loans having aggregate
Purchased Items Value equal to or greater than the Purchased Items Value of the
Mortgage Loans being substituted for, or obtain the release of one or more
Mortgage Loans constituting Purchased Items hereunder; provided that, after
giving effect to such substitution or release, the Repurchase Obligations then
outstanding shall not exceed the Margin Base, which determination shall be made
solely by the Buyer Agent. In connection with any such requested substitution or
release, the applicable Seller will provide notice to the Custodian and the
Buyer Agent in the form of Annex 5-D attached hereto no later than 3:00 p.m.,
New York City time, on the date of such request, specifying the Mortgage Loans
to be substituted for or released and the substitute Mortgage Loans to be sold
hereunder in substitution therefor, if any, and shall deliver with such notice a
Custodial Identification Certificate and a revised Mortgage Loan Schedule
indicating any substitute Mortgage Loans. The Custodian will effect the
requested substitution or release no later than 8:00 p.m., New York City time,
two Business Days following the day on which such request was timely made for
the first 150 such substitute Mortgage Loans (with one additional Business Day
for each 100 additional substitute Mortgage Loans) (provided, that, such timing
requirements shall be inapplicable in the case of Mortgage Loans already held by
the Custodian for any other reason) after the Custodian has certified to the
Buyer Agent on such Business Day that the matters set forth in Section 3(c)
hereof with respect to any substitute Mortgage Loans are true and correct. Each
such substitution or release shall be deemed to be a representation and warranty
by the Sellers that any substitute Mortgage Loans are Eligible Mortgage Loans
and that after giving effect to such substitution or release, the Repurchase
Obligations then outstanding shall not exceed the Margin Base.
(e) So long as the Custodian has not received written notice that any
Event of Default has occurred and is continuing, the Custodian and the Buyer
Agent shall take such steps as they may reasonably be directed from time to time
by the applicable Seller in writing, which the applicable Seller deems necessary
and appropriate, to transfer promptly and deliver to the applicable Seller any
Mortgage File in the possession of the Custodian relating to any Mortgage Loan
previously included in the Margin Base as an Eligible Mortgage Loan but which
the Sellers or the applicable Seller, with the written consent of the Buyer
Agent, have notified the Custodian has ceased to be an Eligible Mortgage Loan.
In furtherance of the foregoing, upon receipt of written request from the
applicable Seller in the form of Annex 5-D hereto, which must be acknowledged by
the Buyer Agent, and provided that no Event of Default has occurred and is
12
continuing of which the Custodian shall have received written notice, the
Custodian shall release to the applicable Seller the requested Mortgage Files.
(f) Following the Buyer Agent's written instructions to the Custodian not
to release any item of Purchased Items, the Custodian shall not release, or
incur any liability to any Seller or any other Person for refusing to release,
any item of Purchased Items to any Seller or any other Person without the
express prior written consent and at the direction of the Buyer Agent.
(g) The Custodian shall at all times monitor any release of Purchased
Items under this Section 5 and shall track the period of time which has elapsed
for any such release of Purchased Items.
(h) Notwithstanding the foregoing, any Request for Release of Documents
may be delivered to the Buyer Agent via electronic mail which attaches the
appropriate form referenced in clauses (a) and (b) above, and the Buyer Agent's
affirmative response via return electronic mail with an electronic copy to the
Custodian shall constitute written consent for the purpose of this Section 5.
Section 6. Fees and Expenses of Custodian.
The Custodian shall charge such fees for its services under this Custodial
Agreement as are set forth in a separate agreement between the Custodian and
American Home Mortgage Corp., the payment of which fees, together with the
Custodian's expenses (including, without, limitation, attorney's fees) in
connection herewith, shall be solely the joint and several obligation of the
Sellers. The obligations of the Sellers under this Section 6 shall survive the
termination of this Custodial Agreement and any prior resignation or removal of
the Custodian or prior termination or assignment of this Custodial Agreement.
Section 7. Removal or Resignation of Custodian.
(a) The Custodian may at any time resign and terminate its obligations
under this Custodial Agreement upon at least 60 days' prior written notice to
the Sellers and the Buyer Agent. Promptly after receipt of notice of the
Custodian's resignation, the Buyer Agent shall appoint, by written instrument, a
successor custodian, subject to written approval by the Sellers (which approval
shall not be unreasonably withheld). One original counterpart of such instrument
of appointment shall be delivered to each of the Sellers, the Custodian and the
successor custodian.
(b) The Buyer Agent, with the consent of the Sellers, upon at least sixty
(60) days' prior written notice to the Custodian and the Buyer Agent, may remove
and discharge the Custodian (or any successor custodian thereafter appointed)
from the performance of its obligations under this Custodial Agreement. Promptly
after the giving of notice of removal of the Custodian, the Buyer Agent shall
appoint, by written instrument, a successor custodian, with the consent of the
Sellers. One original counterpart of such instrument of appointment shall be
delivered to each of the Sellers, the Buyer Agent, the Custodian and the
successor custodian.
(c) In the event of any such resignation or removal, upon the surrender of
any outstanding Trust Receipts, the Custodian shall promptly transfer to the
successor custodian, as
13
directed in writing, all the Mortgage Files being administered under this
Custodial Agreement and, if the endorsements on the Mortgage Notes and the
Assignments of Mortgage have been completed in the name of the Custodian, assign
the Mortgages and endorse without recourse the Mortgage Notes to the successor
Custodian or as otherwise directed in writing by the Buyer Agent. The cost of
the shipment of Mortgage Files arising out of the resignation of the Custodian,
if such resignation occurs within one year from the date of this Custodial
Agreement, shall be at the expense of the Custodian; provided, however, that if
the reason for the Custodian's resignation is due to the non-payment of the fees
and expenses due it hereunder, then such shipment costs shall not be an expense
of the Custodian, but shall be at the expense of the Sellers. Any cost of
shipment arising out of the removal of the Custodian or the resignation of the
Custodian after one year from the date of this Custodial Agreement shall be at
the expense of the Sellers. The Sellers shall be responsible for the fees and
expenses of the successor custodian and the fees and expenses for endorsing the
Mortgage Notes and assigning the Mortgages to the successor custodian if
required pursuant to this paragraph.
(d) In the event that no successor Custodian shall have been appointed
within the 60 day notice period described in Section 7(a) or 7(b) hereof, the
Custodian may either (i) deliver the Mortgage Files to the Buyer Agent or its
designee upon surrender of all outstanding Trust Receipts or (ii) in the event
that the Buyer Agent or its designee fails to accept the Mortgage Files,
petition any court of competent jurisdiction to appoint a successor custodian.
Section 8. Examination of Mortgage Files.
Upon reasonable prior notice to the Custodian and at the Sellers' expense,
the Buyer Agent, the Sellers and each of their respective agents, accountants,
attorneys and auditors will be permitted during normal business hours at its
offices to examine the Mortgage Files, documents, records and other papers in
the possession of or under the control of the Custodian relating to any or all
of the Mortgage Loans.
Section 9. Insurance of Custodian.
At its own expense, the Custodian shall maintain at all times during the
existence of this Custodial Agreement and keep in full force and effect fidelity
insurance, theft of documents insurance, forgery insurance and errors and
omissions insurance. All such insurance shall be in amounts, with standard
coverage and subject to deductibles, all as is customary for insurance typically
maintained by banks which act as custodian of collateral substantially similar
to the Purchased Items. Upon written request, the Buyer Agent shall be entitled
to receive a certificate of the respective insurer that such insurance is in
full force and effect.
Section 10. Representations and Warranties.
(a) Each party represents and warrants to each other party that:
(i) such party has the requisite power and authority and the legal
right to execute and deliver, and to perform its obligations under, this
Custodial Agreement, and has taken all necessary corporate action to
authorize its execution, delivery and performance of this Custodial
Agreement;
14
(ii) no consent or authorization of, filing with, or other act by or
in respect of, any arbitrator or Governmental Authority and no consent of
any other Person (including, without limitation, any stockholder or
creditor of such party) is required with respect to such party in
connection with the execution, delivery, performance, validity or
enforceability of this Custodial Agreement; and
(iii) this Custodial Agreement has been duly executed and delivered
on behalf of such party and constitutes a legal, valid and binding
obligation of such party, enforceable in accordance with its terms, except
as enforceability may be limited by bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting the enforcement of
creditors' rights generally and by general principles of equity (whether
enforcement is sought in a proceeding in equity or at law).
(b) The Custodian and each of the Sellers represents to the Buyer Agent
that the Custodian is not an Affiliate of any Seller.
Section 11. Statements.
(a) Upon the reasonable written request of the Buyer Agent or the Sellers,
the Custodian shall provide the Buyer Agent or the Sellers, as applicable, with
a list of all the Mortgage Loans for which the Custodian holds a Mortgage File
pursuant to this Custodial Agreement. Such list shall be in the form of a
Mortgage Loan Schedule and Exception Report.
(b) No later than 12:00 noon, New York City time, on each Business Day,
and otherwise upon the reasonable request of the Buyer Agent, the Custodian
shall deliver to the Buyer Agent and the Sellers a Report with respect to all
Mortgage Loans currently held by the Custodian pursuant to this Custodial
Agreement.
Section 12. No Adverse Interest of Custodian.
By execution of this Custodial Agreement, the Custodian represents and
warrants that it currently holds, and during the existence of this Custodial
Agreement shall hold, no adverse interest, by way of security or otherwise, in
any Mortgage Loan, and hereby waives and releases any such interest which it may
have in any Mortgage Loan as of the date hereof. The Mortgage Loans shall not be
subject to any security interest, lien or right to set-off by Custodian or any
third party claiming through Custodian, and Custodian shall not pledge,
encumber, hypothecate, transfer, dispose of, or otherwise grant any third party
interest in, the Mortgage Loans.
Section 13. Indemnification of Custodian.
(a) Except as set forth in this Section 13, neither the Custodian nor any
of its directors, officers, agents or employees shall be liable to the Buyer
Agent or the Sellers for any action taken or not taken by it or them hereunder
other than as a result of the breach by the Custodian of its obligations
hereunder, which breach was caused by negligence, lack of good faith or willful
misconduct on the part of the Custodian or any of its directors, officers,
agents or employees, provided that in no event shall the Custodian or any of its
directors, officers, agents or employees have any liability with respect to any
special, indirect, punitive or consequential damages suffered by the Buyer Agent
or the Sellers.
15
(b) Each Seller, jointly and severally, agrees to indemnify and hold the
Custodian and its directors, officers, agents and employees harmless against any
and all liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements of any kind or nature
whatsoever, including reasonable attorney's fees, that may be imposed on,
incurred by, or asserted against it or them in any way relating to or arising
out of this Custodial Agreement or any action taken or not taken by it or them
hereunder unless such liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, expenses or disbursements were imposed on,
incurred by or asserted against the Custodian because of the breach by the
Custodian of its obligations hereunder, which breach was caused by negligence,
lack of good faith or willful misconduct on the part of the Custodian or any of
its directors, officers, agents or employees. The foregoing indemnification
shall survive any resignation or removal of the Custodian or the termination or
assignment of this Custodial Agreement.
(c) In the event that the Custodian fails to produce a Mortgage Note,
Assignment of Mortgage or any other document related to a Mortgage Loan that was
in its possession pursuant to Section 2 within two (2) Business Days after
required or requested by the Sellers or Buyer Agent, and provided that (i)
Custodian previously delivered to the Buyer Agent a Mortgage Loan Schedule and
Exception Report which did not list such document as an Exception on the related
Purchase Date; (ii) such document is not outstanding pursuant to a Request for
Release and Receipt in the form annexed hereto as Annex 5-A; and (iii) such
document was held by the Custodian on behalf of a Seller or the Buyer Agent, as
applicable, (a "Custodial Delivery Failure"), then the Custodian shall (a) with
respect to any missing Mortgage Note, with respect to which a Custodial Delivery
Failure has occurred and has continued in excess of three (3) Business Days,
promptly deliver to the Buyer Agent or Sellers upon request, a Lost Note
Affidavit in the form of Annex 9 hereto unless the original Mortgage Note shall
have been delivered prior to such time and (b) with respect to any missing
document related to such Mortgage Loan, including but not limited to a missing
Mortgage Note, (1) indemnify the applicable Seller or the Buyer Agent in
accordance with the succeeding paragraph of this Section 13 and, (2) at the
Buyer Agent's option, at any time the long term obligations of the Custodian are
rated below the second highest rating category of Moody's Investors Service,
Inc. or Standard & Poor's Ratings Services, a division of The McGraw-Hill
Companies, Inc., obtain and maintain an insurance bond in the name of the Buyer
Agent, and its successors in interest and assigns, insuring against any losses
associated with the loss of such document, in an amount equal to the then
outstanding principal balance of the related Mortgage Loan or such lesser amount
requested by the Buyer Agent in the Buyer Agent's sole discretion.
(d) The Custodian agrees to indemnify and hold the Buyer Agent and each
Seller, and their respective designees harmless against any and all liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements of any kind or nature whatsoever, including reasonable
attorney's fees, that may be imposed on, incurred by, or asserted against it or
them in any way relating to or arising out of a Custodial Delivery Failure or
the Custodian's negligence, lack of good faith or willful misconduct. The
foregoing indemnification shall survive any termination or assignment of this
Custodial Agreement.
16
Section 14. Reliance of Custodian.
(a) In the absence of bad faith on the part of the Custodian, the
Custodian may conclusively rely, as to the truth of the statements and the
correctness of the opinions expressed therein, upon any request, instruction
certificate, opinion or other document furnished to the Custodian, reasonably
believed by the Custodian to have been signed or presented by an Authorized
Representative and conforming in form only to the requirements of this Custodial
Agreement; but in the case of any certificate or opinion which by any provision
hereof is specifically required to be furnished to the Custodian, the Custodian
shall be under a duty to examine the same in accordance with the requirements of
this Custodial Agreement.
(b) In the absence of bad faith on the part of the Custodian, the
Custodian may conclusively rely upon any resolution, certificate, statement,
instrument, opinion, report, notice, request, direction, consent, order, bond,
debenture, coupon or other paper or document reasonably believed by the
Custodian to be genuine and to have been signed or presented by an Authorized
Representative.
(c) In the absence of bad faith on the part of the Custodian, the
Custodian shall be entitled to conclusively rely in good faith upon the written
direction, order, instruction or other communication from the Buyer Agent or a
Seller reasonably believed by the Custodian to be genuine and to have been
signed or presented by an Authorized Representative.
(d) This Section shall not be construed to limit the effect of any
provision of this Custodial Agreement respecting the rights or remedies of the
Custodian or any other right of the Custodian.
(e) If the Custodian requests instructions from the Buyer Agent with
respect to any act, action or failure to act in connection with this Custodial
Agreement, Custodian shall be entitled (without incurring any liability therefor
to Buyer Agent, the Sellers or any other person) to refrain from taking such
action and continue to refrain from acting unless and until the Custodian shall
have received written instructions from the Buyer Agent with respect to a
Mortgage File.
(f) The Custodian may consult with counsel and the advice or any opinion
of counsel shall be full and complete authorization and protection in respect of
any action taken or omitted by it hereunder in good faith and in accordance with
such advice or opinion of counsel.
(g) None of the provisions of this Custodial Agreement shall require the
Custodian to expend or risk its own funds or otherwise to incur any liability,
financial or otherwise, in the performance of any of its duties hereunder, or in
the exercise of any of its rights or powers if it shall have reasonable grounds
for believing that repayment of such funds or indemnity satisfactory to it
against such risk or liability is not assured to it.
(h) Any corporation into which the Custodian may be merged or converted or
with which it may be consolidated, or any corporation resulting from any merger,
conversion or consolidation to which the Custodian shall be a party, or any
corporation succeeding to the business of the Custodian shall be the successor
of the Custodian hereunder without the execution or filing of any paper with any
party hereto or any further act on the part of any of the
17
parties hereto except where an instrument of transfer or assignment is required
by law to effect such succession, anything herein to the contrary
notwithstanding.
Section 15. Term of Custodial Agreement.
Promptly after written notice from the Buyer Agent of the termination of
the Repurchase Agreement and payment in full of all amounts owing to the Buyer
Agent thereunder and under the Note, the Custodian shall deliver all documents
remaining in the Mortgage Files to the applicable Seller, and this Custodial
Agreement shall thereupon terminate.
Section 16. Notices.
All demands, notices and communications hereunder shall be in writing and
shall be deemed to have been duly given when received by the recipient party at
the address shown on its signature page hereto, or at such other addresses as
may hereafter be furnished to each of the other parties 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 addressee. The
Custodian's office is located at the address set forth on its signature page
hereto, and the Custodian shall notify the Buyer Agent and the Sellers if such
address should change.
Section 17. Governing Law.
This Custodial 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 without regard to the
conflict of laws doctrine applied in such state (other than Section 5-1401 of
the New York General Obligations Law). Section 18. Authorized Representatives.
Each individual designated as an authorized representative of the Buyer
Agent or its successors or assigns, the Sellers and the Custodian, respectively
(an "Authorized Representative"), is authorized to give and receive notices,
requests and instructions and to deliver certificates and documents in
connection with this Custodial Agreement on behalf of the Buyer Agent, the
Sellers and the Custodian, as the case may be, and the specimen signature for
each such Authorized Representative, initially authorized hereunder, is set
forth on Annexes 6, 7 and 8 hereof, respectively. From time to time, the Buyer
Agent, the Sellers and the Custodian or their respective successors or permitted
assigns may, by delivering to the others a revised annex, change the information
previously given pursuant to this Section 18, but each of the parties hereto
shall be entitled to rely conclusively on the then current annex until receipt
of a superseding annex.
Section 19. Amendment.
This Custodial Agreement may be amended from time to time by written
agreement signed by the Sellers, the Buyer Agent and the Custodian.
18
Section 20. Cumulative Rights.
The rights, powers and remedies of the Custodian and the Buyer Agent under
this Custodial Agreement shall be in addition to all rights, powers and remedies
given to the Custodian and the Buyer Agent by virtue of any statute or rule of
law, the Repurchase Agreement or any other agreement, all of which rights,
powers and remedies shall be cumulative and may be exercised successively or
concurrently without impairing the Buyer Agent's security interest in the
Purchased Items.
Section 21. Binding Upon Successors.
All rights of the Custodian and the Buyer Agent under this Custodial
Agreement shall inure to the benefit of the Custodian and the Buyer Agent and
their successors and permitted assigns, and all obligations of each Seller shall
bind its successors and assigns.
Section 22. Entire Agreement; Severability.
This Custodial Agreement contains the entire agreement with respect to the
Purchased Items among the Custodian, the Buyer Agent and the Sellers; provided,
however, that this Custodial Agreement, together with the other Repurchase
Documents, contains the entire agreement with respect to the Purchased Items
among the Buyer Agent and the Sellers. If any of the provisions of this
Custodial Agreement shall be held invalid or unenforceable, this Custodial
Agreement shall be construed as if not containing such provisions, and the
rights and obligations of the parties hereto shall be construed and enforced
accordingly between the Buyer Agent and the Sellers, and this Custodial
Agreement contains the entire Agreement with respect to the rights and
obligations of the Custodian.
Section 23. Execution In Counterparts.
This Custodial Agreement may be executed in counterparts, each of which
when so executed shall be deemed to be an original and all of which when taken
together shall constitute one and the same agreement.
Section 24. Tax Reports.
The Custodian shall not be responsible for the preparation or filing of
any reports or returns relating to federal, state or local income taxes with
respect to this Custodial Agreement, other than in respect of the Custodian's
compensation or for reimbursement of expenses.
Section 25. Pledging of the Mortgage Loans by the Buyer Agent.
In connection with a pledge of the Mortgage Loans as collateral for an
obligation of the Buyer Agent, the Buyer Agent may pledge its interest in the
Mortgage Files held by the Custodian for the benefit of the Buyer Agent from
time to time by delivering written notice to the Custodian stating that the
buyer Agent has pledged its interest in the identified Mortgage Loans and
Mortgage Files, and the identity of the party to whom the Mortgage Loans have
been pledged (such party, the "Pledgee"). Upon receipt of such notice from the
Buyer Agent, the Custodian shall mark its records to reflect the pledge of the
Mortgage Loans by the Buyer Agent
19
to the Pledgee. The Custodian's records shall reflect the pledge of the Mortgage
Loans by the Buyer Agent to the Pledgee until such time as the Custodian
receives written instructions from the Buyer Agent and acknowledged by the
Pledgee that the Mortgage Loans are no longer pledged by the Buyer Agent to the
Pledgee, at which time the Custodian shall change its records to reflect the
release of the pledge of the Mortgage Loans and that the Custodian is holding
the Mortgage Loans as custodian for, and for the benefit of, the Buyer Agent;
provided, however that such pledge shall not affect the right of the Custodian
to rely on instructions from the Buyer Agent hereunder.
Section 26. Transmission of Mortgage Files.
Prior to any shipment of any Mortgage Files hereunder, the applicable
Seller shall deliver to the Custodian written instructions as to the method of
shipment and the shipper that the Custodian is to utilize in connection with the
transmission of such Mortgage Files or other loan documents in the performance
of the Custodian's duties hereunder. Such Seller shall arrange for the provision
of such services at its sole cost and expense (or, at the Custodian's option,
reimburse the Custodian for all costs and expenses incurred by the Custodian
consistent with such instructions) and will maintain such insurance against loss
or damage to the Mortgage Files or other loan documents as such Seller may deem
appropriate. It is expressly agreed that in no event shall the Custodian have
any liability for any losses or damages to any person, including without
limitation, any Seller, arising out of actions of the Custodian consistent with
the instructions of a Seller. In the event that the Custodian does not receive
such written instructions, the Custodian shall be authorized and shall be
indemnified as provided herein to utilize a nationally recognized courier
service.
Section 27. Submission To Jurisdiction; Waivers.
Each Seller, the Buyer Agent and the Custodian hereby irrevocably and
unconditionally:
(a) SUBMITS FOR ITSELF AND ITS PROPERTY IN ANY LEGAL ACTION OR PROCEEDING
RELATING TO THIS CUSTODIAL AGREEMENT, THE REPURCHASE AGREEMENT AND THE OTHER
REPURCHASE DOCUMENTS, OR FOR RECOGNITION AND ENFORCEMENT OF ANY JUDGMENT IN
RESPECT THEREOF, TO THE NON-EXCLUSIVE GENERAL JURISDICTION OF THE COURTS OF THE
STATE OF NEW YORK, THE FEDERAL COURTS OF THE UNITED STATES OF AMERICA FOR THE
SOUTHERN DISTRICT OF NEW YORK, AND APPELLATE COURTS FROM ANY THEREOF;
(b) CONSENTS THAT ANY SUCH ACTION OR PROCEEDING MAY BE BROUGHT IN SUCH
COURTS AND, TO THE EXTENT PERMITTED BY LAW, WAIVES ANY OBJECTION THAT IT MAY NOW
OR HEREAFTER HAVE TO THE VENUE OF ANY SUCH ACTION OR PROCEEDING IN ANY SUCH
COURT OR THAT SUCH ACTION OR PROCEEDING WAS BROUGHT IN AN INCONVENIENT COURT AND
AGREES NOT TO PLEAD OR CLAIM THE SAME;
(c) AGREES THAT SERVICE OF PROCESS IN ANY SUCH ACTION OR PROCEEDING MAY BE
EFFECTED BY MAILING A COPY THEREOF BY REGISTERED
20
OR CERTIFIED MAIL (OR ANY SUBSTANTIALLY SIMILAR FORM OF MAIL), POSTAGE PREPAID,
TO ITS ADDRESS SET FORTH UNDER ITS SIGNATURE BELOW OR AT SUCH OTHER ADDRESS OF
WHICH THE BUYER AGENT SHALL HAVE BEEN NOTIFIED; AND
(d) AGREES THAT NOTHING HEREIN SHALL AFFECT THE RIGHT TO EFFECT SERVICE OF
PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR SHALL LIMIT THE RIGHT TO SUE IN
ANY OTHER JURISDICTION.
Section 28. Waiver of Jury Trial.
Each Seller, the Buyer Agent and the Custodian hereby waive trial by jury
in any judicial proceeding involving, directly or indirectly, any matter
(whether sounding in tort, contract or otherwise) in any way arising out of,
related to, or connected with this Custodial Agreement or the relationships
established hereunder.
Section 29. Substitution.
This Custodial Agreement substitutes and replaces in its entirety the
Existing Custodial Agreement. All Mortgage Files that are held by the Custodian
pursuant to the Existing Custodial Agreement immediately prior to the execution
and delivery of this Custodial Agreement shall, as of the execution and delivery
hereof, be deemed, mutatis mutandis, to be held under this Custodial Agreement.
[SIGNATURES FOLLOW]
21
IN WITNESS WHEREOF, this Custodial Agreement was duly executed by the
parties hereto as of the day and year first above written.
SELLERS
AMERICAN HOME MORTGAGE CORP.
By: /s/ Alan B. Horn
-----------------
Name: Alan B. Horn
Title: Executive Vice President,
General Counsel and Secretary
Address for Notices:
-------------------
538 Broadhollow Road
Melville, New York 11747
Attention: Alan B. Horn, General
Counsel
Facsimile: (800) 209-7276
Telephone: (516) 396-7703
AMERICAN HOME MORTGAGE
INVESTMENT CORP.
By: /s/ Alan B. Horn
----------------
Name: Alan B. Horn
Title: Executive Vice President,
General Counsel and Secretary
Address for Notices:
-------------------
538 Broadhollow Road
Melville, New York 11747
Attention: Alan B. Horn, General Counsel
Facsimile: (800) 209-7276
Telephone: (516) 396-7703
AMERICAN HOME MORTGAGE
HOLDINGS, INC.
By: /s/ Alan B. Horn
------------------
Name: Alan B. Horn
Title: Executive Vice President,
General Counsel and Secretary
Address for Notices:
-------------------
538 Broadhollow Road
Melville, New York 11747
Attention: Alan B. Horn, General Counsel
Facsimile: (800) 209-7276
Telephone: (516) 396-7703
AMERICAN HOME MORTGAGE
ACCEPTANCE, INC.
By: /s/ Alan B. Horn
------------------
Name: Alan B. Horn
Title: Executive Vice President,
General Counsel and Secretary
Address for Notices:
-------------------
538 Broadhollow Road
Melville, New York 11747
Attention: Alan B. Horn, General Counsel
Facsimile: (800) 209-7276
Telephone: (516) 396-7703
AMERICAN HOME MORTGAGE
SERVICING, INC.
By: /s/ Alan B. Horn
------------------
Name: Alan B. Horn
Title: Executive Vice President,
General Counsel and Secretary
Address for Notices:
-------------------
538 Broadhollow Road
Melville, New York 11747
Attention: Alan B. Horn, General Counsel
Facsimile: (800) 209-7276
Telephone: (516) 396-7703
With a copy to:
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4600 Regent Blvd.
Suite 200
Irving, Texas 75063
Attention: David Friedman
BUYER AGENT
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MORGAN STANLEY BANK
By: /s/ Andrew B. Neuberger
------------------------
Name: Andrew B. Neuberger
Title: Vice President
Address for Notices:
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2500 Lake Park Boulevard
West Valley City, Utah 84120
Attention: Richard Felix
with a copy to:
1221 Avenue of the Americas, 27th Floor
New York, New York 10020
Attention: Paul Najarian
Telecopier No.: (212) 507-4780
Telephone No.: (212) 762-6397
CUSTODIAN
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DEUTSCHE BANK NATIONAL TRUST
COMPANY
By: /s/ Norma L. Catone
-------------------
Name: Norma L. Catone
Title: Vice President
By: /s/ Andrew Hays
---------------
Name: Andrew Hays
Title: Associate
Address for Notices:
-------------------
1761 East St. Andrew Place
Santa Ana, California 92705
Attention: Mortgage Custody - AH05BC
Telecopier No.: (714) 247-6035
Telephone No.: (714) 247-6000