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Custodial Agreement - Barclays Bank PLC, American Home Mortgage Acceptance Inc., American Home Mortgage Corp., American Home Mortgage Investment Corp., American Home Mortgage Servicing, Inc. and Deutsche Bank National Trust Co.

EXECUTION VERSION

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Barclays Bank PLC, as Administrative Agent

and

American Home Mortgage Acceptance, Inc., as a Seller

and

American Home Mortgage Corp., as a Seller

and

American Home Mortgage Investment Corp., as a Seller

and

American Home Mortgage Servicing, Inc., as a Seller

and

Deutsche Bank National Trust Company, as Custodian

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CUSTODIAL AGREEMENT

As of November 14, 2006

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TABLE OF CONTENTS

				Page
Section 1.		Definitions.		1
Section 2.		Deposit of Mortgage Loans; Effecting a Transaction; Funding Account.		6
Section 3.		Repurchase Date.		7
Section 4.		Trust Receipt.		8
Section 5.		Wet Funded Mortgage Loans.		9
Section 6.		Reserved.		10
Section 7.		Obligations of the Custodian; Certain Representations and Warranties.		10
Section 8.		Substitution.		11
Section 9.		Additional Purchased Assets.		12
Section 10.		Future Defects.		12
Section 11.		Release for Servicing.		12
Section 12.		Limitation on Release.		13
Section 13.		Release for Payment.		14
Section 14.		Fees of Custodian.		14
Section 15.		Removal or Resignation of Custodian With Respect to Some or All of the Purchased Assets.		14
Section 16.		Examination and Copies of Mortgage Loan Files.		15
Section 17.		Insurance of Custodian.		16
Section 18.		Covenants of Sellers.		16
Section 19.		Periodic Statements.		16
Section 20.		Governing Law; Counterparts.		17
Section 21.		No Adverse Interest of Custodian.		17
Section 22.		Custodian Representations.		17
Section 23.		Cumulative Rights.		17
Section 24.		Notices.		17
Section 25.		Successors and Assigns; Benefits of Custodial Agreement.		19
Section 26.		Reliance of Custodian.		20
Section 27.		Indemnification.		20
Section 28.		Obligations of the Custodian With Respect to the Trust Receipts.		21
Section 29.		Authorized Representatives.		22
Section 30.		Reproduction of Documents.		23
Section 31.		Amendment; Waiver; Entire Agreement; Severability.		23
Section 32.		Consent to Jurisdiction.		23
Section 33.		Confidentiality.		24

 

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APPENDIXES

APPENDIX A		ADDITIONAL DEFINITIONS

EXHIBITS

EXHIBIT 1		FORM OF TRUST RECEIPT
EXHIBIT 2		FORM OF REQUEST FOR RELEASE OF DOCUMENTS AND RECEIPTS
EXHIBIT 3		AUTHORIZED REPRESENTATIVES OF THE CUSTODIAN
EXHIBIT 4		AUTHORIZED REPRESENTATIVES OF SELLER
EXHIBIT 5		AUTHORIZED REPRESENTATIVES OF SELLER's DESIGNEE
EXHIBIT 6		AUTHORIZED REPRESENTATIVES OF THE ADMINISTRATIVE AGENT
EXHIBIT 7		FORM OF LOAN SCHEDULE
EXHIBIT 8		FORM OF CUSTODIAL DELIVERY
EXHIBIT 9		FORM OF NOTICE TO CUSTODIAN
EXHIBIT 10		FORM OF REPURCHASE RELEASE
EXHIBIT 11		FORM OF LOST NOTE AFFIDAVIT
EXHIBIT 12		RESERVED
EXHIBIT 13		FORM OF TRANSMITTAL LETTER
EXHIBIT 14		RESERVED
EXHIBIT 15		FORM OF TRANSACTION NOTICE
EXHIBIT 16		FORM OF WET FUNDED TRUST RECEIPT

 

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THIS CUSTODIAL AGREEMENT, dated as of November 14, 2006, is made by and among Barclays Bank PLC, as buyer ("Buyer"), a public limited company organized under the laws of England and Wales, American Home Mortgage Acceptance, Inc., as seller ("AHMA" and a "Seller"), a Maryland corporation, American Home Mortgage Corp., as seller ("AHMC" and a "Seller"), a New York corporation, American Home Mortgage Investment Corp., as seller ("AHMIC" and a "Seller"), a Maryland corporation, and American Home Mortgage Servicing, Inc., as seller ("AHMS", a "Seller" and, together with AHMA, AHMC and AHMIC, the "Sellers"), a Maryland corporation, and Deutsche Bank National Trust Company, a national banking association ("DBNTC"), as custodian (in such capacity, together with each successor custodian, the "Custodian").

W I T N E S S E T H:

WHEREAS, the Administrative Agent, for the benefit of the Buyers, and the Sellers may, from time to time, enter into transactions (each, a "Transaction") in which a Seller sells to the Buyers certain Purchased Assets against payment by such Buyer of a purchase price therefor, with a simultaneous agreement by Sellers to repurchase from such Buyer that same Purchased Asset and to pay to such Buyer a repurchase price, all as provided in that certain Master Repurchase Agreement, dated as of November 14, 2006, between Sellers and Barclays Bank PLC as buyer (the "Buyer") and as Administrative Agent (as amended, restated, supplemented or otherwise modified from time to time, the "Master Repurchase Agreement"). Sellers shall deliver to the Custodian, upon execution of this Agreement, a true and correct copy of the Master Repurchase Agreement.

WHEREAS, the Administrative Agent has requested DBNTC to act as Custodian on behalf of the Registered Holder(s) for purposes of holding the Purchased Assets pursuant to the Repurchase Agreement;

WHEREAS, DBNTC is a national banking association, and a bank (as defined in Section 9-102(a) of the Uniform Commercial Code), is otherwise authorized to act as Custodian pursuant to this Agreement, and has agreed to act as Custodian/bailee for hire for the Registered Holder(s), all as more particularly set forth herein; and

WHEREAS, Sellers shall from time to time deliver to the Custodian Purchased Assets that are subject to each Transaction and have agreed to deliver or cause to be delivered to the Custodian certain documents with respect to such Purchased Assets in accordance with the terms and conditions hereof;

NOW, THEREFORE, in consideration of the mutual undertakings herein expressed, the parties hereto hereby agree as follows:

Section 1. Definitions. Capitalized terms (including those contained in the preamble hereof) used but not defined herein shall have the meanings assigned to them in the Master Repurchase Agreement. All references to times in this Agreement shall be references to New York City time unless otherwise stated herein.

In addition, the following terms shall have the respective meanings set forth below:

"Additional Purchased Assets": has the meaning set forth in Section 9 hereof.

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"Affiliate": has the meaning set forth in the Master Repurchase Agreement.

"Agreement" (or "this Agreement"): means this Custodial Agreement and all exhibits, attachments and supplements hereto, as amended from time to time.

"Appraised Value": has the meaning set forth in the Master Repurchase Agreement.

"Asset Schedule": means the list of Purchased Assets delivered by Sellers to the Administrative Agent and the Custodian in the form set forth in Exhibit 7 hereto. Each Asset Schedule shall set forth, as to each Purchased Asset, the related Mortgagor's name, the address of the related Mortgaged Property and the outstanding principal balance of the Purchased Asset as of the initial Purchase Date, together with any other information specified by the Administrative Agent from time to time in good faith.

"Assignment of Mortgage": means an assignment of the Mortgage, notice of transfer or equivalent instrument in recordable form (excluding only the name of the assignee, if delivered in blank), sufficient under the laws of the jurisdiction where the related Mortgaged Property is located to reflect the transfer of the Mortgage to the party indicated therein.

"Authorized Representative": has the meaning set forth in Section 29 hereof.

"Business Day": means any day other than (i) a Saturday or Sunday or (ii) a day upon 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.

"Buyer": means each of Barclays Bank PLC and Sheffield Receivables Corp., and their respective successors in interest and assigns.

"Collateral": has the meaning set forth in Section 7 of the Master Repurchase Agreement.

"Computer Medium": means a computer tape or other electronic medium generated by or on behalf of Sellers and delivered or transmitted to Administrative Agent and Custodian which provides information relating to the Purchased Assets, including the identity of the related servicer with respect to each Mortgage Loan and the information set forth in the Asset Schedule, in a format reasonably acceptable to Administrative Agent.

"Confidential Information": has the meaning set forth in Section 33 hereof.

"Confirmation": has the meaning set forth in the Master Repurchase Agreement.

"Custodial Delivery": means the letter executed by the applicable Seller in order to deliver the Mortgage Loan Files to the Custodian pursuant to this Agreement on the related Purchase Date, a form of which is attached as Exhibit 8 hereto.

 

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"Custodial Delivery Failure": has the meaning set forth in Section 27(b) hereof.

"Custodian": means Deutsche Bank National Trust Company, or any successor in interest, assigns, or any successor to the Custodian under this Agreement as herein provided.

"Dry Mortgage Loan" means a Mortgage Loan for which the Mortgage Loan File has been delivered to the Custodian.

"Electronic Agent": shall mean MERSCORP, INC, and its successors in interest or assigns.

"Electronic Tracking Agreement": has the meaning set forth in the Master Repurchase Agreement.

"Event of Default": has the meaning set forth in the Master Repurchase Agreement.

"Exception Report": means the exception report prepared by the Custodian pursuant to this Agreement, which report shall contain a loan schedule identifying each Mortgage Loan delivered pursuant hereto, and any items of noncompliance with the review criteria set forth in Section 4(a) hereof (except with respect to Wet Funded Mortgage Loans, only a loan schedule).

"Fannie Mae": means Fannie Mae, the government sponsored enterprise formerly known as the Federal National Mortgage Association.

"Freddie Mac": means Freddie Mac, the government sponsored enterprise formerly known as the Federal Home Loan Mortgage Corporation, or any successor thereto.

"Income": has the meaning set forth in the Master Repurchase Agreement.

"Interim Funder": means with respect to each MERS Mortgage Loan, the Person named on the MERS System as the interim funder pursuant to the MERS Procedures Manual.

"Margin Call": has the meaning set forth in the Master Repurchase Agreement to satisfy a Margin Deficit.

"Master Repurchase Agreement": has the meaning set forth in the preamble hereof.

"MERS": means Mortgage Electronic Registration Systems, Inc., a corporation organized and existing under the laws of the State of Delaware or any successor thereto.

"MERS Designated Mortgage Loan": has the meaning assigned to such term in Section 3 of the Electronic Tracking Agreement.

"MERS Identification Number": means the eighteen digit number permanently assigned to each MERS Mortgage Loan.

 

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"MERS Procedures Manual": means 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": means the schedule listing MERS Designated Mortgage Loans and other information prepared by an electronic agent pursuant to the Electronic Tracking Agreement.

"MERS^¨ System": means an Electronic Agent's mortgage electronic registry system, as more particularly described in the MERS Procedures Manual.

"Mortgage": means the mortgage, deed of trust, or other instrument that creates a Lien on the related Mortgaged Property and secures a Note.

"Mortgage Interest Rate": means the rate of interest borne on a Mortgage Loan from time to time in accordance with the terms of the related Mortgage Note.

"Mortgage Loan": has the meaning set forth in the Master Repurchase Agreement.

"Mortgage Loan File": has the meaning set forth in Appendix A attached hereto.

"Mortgage Note": means the promissory note or other evidence of the indebtedness of a Mortgagor secured by a Mortgage.

"Mortgaged Property": has the meaning set forth in the Master Repurchase Agreement.

"Mortgagor": means the obligor or obligors on a Mortgage Note, including any Person who has assumed or guaranteed the obligations of the obligor thereunder.

"Notice to the Custodian": has the meaning set forth in Section 28(b) hereof.

"Person": means any legal person, including any individual, corporation, partnership, association, joint-stock company, trust, limited liability company, unincorporated organization, governmental entity or other entity of similar nature.

"Price Differential": has the meaning set forth in the Master Repurchase Agreement.

"Program Documents": has the meaning set forth in the Master Repurchase Agreement.

"Property": means any right or interest in or to property of any kind whatsoever, whether real, personal or mixed and whether tangible or intangible.

 

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"Purchase Date": means the date on which Purchased Assets are to be transferred by Sellers to the Administrative Agent. The Purchase Date shall be specified in the Confirmation.

"Purchase Price": has the meaning set forth in the Master Repurchase Agreement.

"Registered Holder": has the meaning set forth in Section 28(a) hereof.

"Repurchase Agreement": has the meaning set forth in the preamble hereof.

"Repurchase Date": has the meaning set forth in the Master Repurchase Agreement.

"Repurchase Price": has the meaning set forth in the Master Repurchase Agreement.

"Request for Release": has the meaning set forth in Section 11 hereof.

"Responsible Officer": means, when used with respect to the Custodian, any officer assigned to the corporate trust office located at 1761 East St. Andrew Place, Santa Ana, California 92705, Attention: Mortgage Custody AH06BC (or any successor thereto), including any Vice President, Assistant Vice President, Trust Officer, any Assistant Secretary, any trust officer or any other officer of the Custodian customarily performing functions similar to those performed by any of the above designated officers and having direct responsibility for the administration of this Agreement and designated on Exhibit 3 attached hereto (which will be updated from time to time by the Custodian and provided to the Administrative Agent and Sellers); when used with respect to Sellers or an Administrative Agent, its Chief Executive Officer, President, Chief Financial Officer, any Vice President or Treasurer; and, when used with respect to any Person (including the foregoing), any other officer authorized by such Person.

"Sellers": has the meaning set forth in the preamble hereto.

"Sellers' Authorized Representatives": means each Authorized Representative of each Seller set forth on Exhibit 4 hereto (as the same may modified from time to time) and each Authorized Representative of each Seller's Designee set forth on Exhibit 5 hereto (as the same may modified from time to time) as described in Section 29.

"Sellers' Designee": has the meaning set forth in Section 29 hereof.

"Servicer": means any Person approved by Administrative Agent in its sole discretion exercised in good faith.

"Substitute Assets": has the meaning set forth in the Master Repurchase Agreement.

"Transaction": has the meaning set forth in the preamble hereof.

 

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"Transaction Notice": means a written request of Sellers to enter into a Transaction, which is delivered to the Administrative Agent, in the form attached as Exhibit 15 hereto.

"Transferee": has the meaning set forth in Section 28(b) hereof.

"Trust Receipt": means a trust receipt issued by the Custodian evidencing the Purchased Assets it holds, in the form attached hereto as Exhibit 1, and delivered to the Administrative Agent by the Custodian in accordance with Section 4 hereof.

"Uniform Commercial Code": has the meaning set forth in the Master Repurchase Agreement.

"Wet Funded Mortgage Loan" means a closed fully funded Mortgage Loan which the Sellers are selling to the Administrative Agent for the benefit of the Buyers and for which the Mortgage Loan File has not been delivered to the Custodian.

"Wet Funded Delivery Date" means with respect to each Wet Funded Mortgage Loan, the date of delivery of the Mortgage Loan File to the Custodian, which shall not be later than the seventh (7^th) Business Day following the Purchase Date.

"Wet Funded Trust Receipt" means a trust receipt issued by the Custodian evidencing Purchased Assets which are Wet Funded Mortgage Loans, substantially in the form attached hereto as Exhibit 16, and delivered to the Administrative Agent by the Custodian in accordance with Section 5 hereof.

"Written Instructions": means written communications received by a Responsible Officer of the Custodian from an Authorized Representative of the Administrative Agent or the related Seller, including communications received by any means permitted by Section 24 hereof.

Section 2. Deposit of Mortgage Loans; Effecting a Transaction; Funding Account.

(a) With respect to any Mortgage Loan that a Seller desires to sell on a Purchase Date, the applicable Seller, the Custodian and the Administrative Agent agree to follow the process set forth below with respect to such Mortgage Loan:

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The applicable Seller will deliver to the Administrative Agent the related Transaction Notice, and to the Custodian the Custodial Delivery, the Mortgage Loan File and the related Asset Schedule on a Computer Medium via electronic transmission no later than 4:00 p.m. (New York City time) on the Business Day immediately preceding the proposed Purchase Date;

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The Administrative Agent will notify the Custodian and the related Seller, no later than 11:00 a.m. (New York City time) on the Purchase Date, of any Mortgage Loan not accepted by the Buyers, and thereupon the Custodian shall remove such Mortgage Loan from the related Asset Schedule;

 

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Together with such notification, the Administrative Agent will also deliver to the applicable Seller such additional information in respect of the accepted Mortgage Loans as required under the Master Repurchase Agreement;

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With respect to Mortgage Loans other than Wet Funded Mortgage Loans, the Custodian shall deliver to the Administrative Agent a copy of the Exception Report for the new Mortgage Loans being purchased by Buyers, along with a cumulative Exception Report for all Purchased Assets, and a Trust Receipt relating cumulatively to all Purchased Assets. Such schedules and reports shall be provided on a Computer Medium via electronic transmission no later than 2:00 p.m., (New York City time) on the proposed Purchase Date;

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With respect to Mortgage Loans other than Wet Funded Mortgage Loans, the Custodian shall deliver to the Administrative Agent a copy of the Exception Report for the new Mortgage Loans purchased on such Purchase Date along with a cumulative Exception Report for all Mortgage Loans purchased and a cumulative Trust Receipt (together with the cumulative Exception Report) relating to all Mortgage Loans purchased, in each case, via overnight courier for delivery on the Business Day immediately following the related Purchase Date; and

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By 5:00 p.m. (New York City time) of each Business Day other than a Purchase Date, the Custodian shall deliver to the Administrative Agent a cumulative Exception Report on a Computer Medium via electronic transmission.

(b) Upon the issuance of any new cumulative Exception Report, the prior Exception Reports attached to the Trust Receipts for such Purchased Assets shall be deemed amended and restated in their entirety by such new cumulative Exception Report. It is understood and agreed that the Custodian shall not be required to review more than 500 Mortgage Loan Files subject to this Agreement on any one Business Day.

(c) The Custodian shall hold the Mortgage Loan Files as Custodian and bailee for hire for the exclusive benefit of the Registered Holder and shall not act upon written instructions of the Administrative Agent or Sellers to deliver the Purchased Assets other than as expressly provided in this Agreement.

Section 3. Repurchase Date.

The Sellers shall pay to the Administrative Agent, by no later than 4:00 p.m. (New York City time) on such Repurchase Date, in immediately available funds, the Repurchase Price for such Purchased Asset, including the unpaid Price Differential related thereto and together with all other payments due and payable by Sellers to Administrative Agent under the Program Documents in relation to such Purchased Asset. Upon receipt by the Custodian of written notice from the Registered Holder in the form of Exhibit 10 hereto (or via facsimile or e-mail confirmation from an Authorized Representative of the Administrative Agent) stating that the Registered Holder has received the Repurchase Price for the Purchased Assets subject to, and in accordance with the terms of, such Transactions, the Custodian shall release to the related Seller or its designee the Mortgage Loan Files with respect to such repurchased Purchased Assets and shall deliver to the related Registered Holder an amended Trust Receipt with an Exception Report

 

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attached thereto, listing all of the Purchased Assets still subject to one or more Transactions. So long as the notice to the Custodian from the Registered Holder or Authorized Representative of the Administrative Agent is received by 5:00 p.m. (New York City time), the delivery of the related Mortgage Loan Files at the direction of Sellers shall occur as soon as reasonably possible, but no later than five Business Days following receipt of such direction from Sellers; provided, however, if the Sellers direct the Custodian to transfer such Mortgage Loan Files to another custodianship with the Custodian, the Custodian shall immediately effectuate such transfer.

Section 4. Trust Receipt.

(a) No later than the time set forth in Section 2 and provided that the Custodian has timely received the items required pursuant to Section 2 herein for up to 500 Mortgage Loan Files subject to this Agreement (with one additional Business Day to review up to an additional 500 Mortgage Loan Files subject to this Agreement in excess of such limit), the Custodian shall issue and deliver to the Administrative Agent an original Trust Receipt relating to the Purchased Assets (other than Wet Funded Mortgage Loans) (with an Exception Report attached thereto) delivered hereunder and shall deliver to the related Seller an original of such Trust Receipt via overnight courier, to evidence its possession of the Purchased Assets and the Mortgage Loan Files and its certification that each such document in the Mortgage Loan Files is complete and appears regular on its face and each such document in the Mortgage Loans Files purporting to be an original appears on its face to be so.

(b) The Exception Report attached to any Trust Receipt shall be amended on each Business Day via electronic transmission to the Administrative Agent and each subsequently transmitted Exception Report shall automatically supersede each prior Exception Report with respect to such Trust Receipt, and shall render all previously transmitted Exception Reports relating to such Trust Receipt null and void. Each Registered Holder may request the Custodian to provide such Registered Holder with a paper copy of the most recent Exception Report transmitted by the Custodian via electronic transmission with respect to a related Trust Receipt. The Custodian shall be under no duty to review, inspect or examine such documents to determine that any of them are enforceable or appropriate for their prescribed purpose, conform to their stated definitions or that they are other than what they purport to be on their face; provided, however, that nothing in this sentence shall limit the obligations of the Custodian set forth in clause (a) above. The Custodian shall not be required to determine whether any Mortgage Loan File is required to include documents or instruments identified in paragraphs (b), (d), and (h) of the definition of Mortgage Loan File and delivery of any Trust Receipt shall be deemed to acknowledge receipt of such documents or instruments only to the extent of Custodian's actual possession of such items, if any. It is specifically agreed that the Custodian shall have no responsibility for determining whether any document is valid and binding, whether the text of any assignment or endorsement is in proper or recordable form or whether any document has been recorded in accordance with the requirements of any applicable jurisdiction.

(c) The Sellers shall be solely responsible for providing each and every document required for each Mortgage Loan File to the Custodian in a timely manner and for completing or correcting any missing, incomplete or inconsistent documents, and the Custodian shall not be responsible or liable for taking any such action, causing any Seller or any other Person to do so or notifying any

 

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Person (other than the Administrative Agent to the extent specifically required in this Agreement) that any such action has or has not been taken. The Custodian makes no representations as to and shall not be responsible to verify (i) the validity, legality, enforceability, sufficiency, due authorization, recordability, or genuineness of any document in any Mortgage Loan File or any of the Purchased Assets identified on the Asset Schedule or the Exception Report or (ii) the collectability, insurability, effectiveness, perfection, priority or suitability of any such Purchased Asset. Except as expressly set forth herein, the Custodian shall not be required to review the content (except as necessary to certify its review in accordance with Section 4(a)) of any document described in this Section 4 in order to deliver the Trust Receipt.

Section 5. Wet Funded Mortgage Loans.

(a) With respect to each Wet Funded Mortgage Loan, on or prior to 2:00 p.m. (New York City time) on the related Purchase Date, the Custodian shall issue to the Administrative Agent a Wet Funded Trust Receipt certifying that the Custodian has received the Asset Schedule identifying such Wet Funded Mortgage Loans as Purchased Assets.

(b) With respect to Wet Funded Mortgage Loans, upon receipt of the Wet Funded Trust Receipt and Asset Schedule from the Custodian, in form and substance acceptable to the Administrative Agent, the Administrative Agent shall transfer to the Sellers immediately available funds in an amount equal to the related Purchase Price in accordance with the terms of the Master Repurchase Agreement.

(c) No later than 9:00 a.m. (New York City time) on the Wet Funded Delivery Date, the related Seller shall deliver or cause to be delivered to the Custodian the Mortgage Loan Files with respect to the related Wet Funded Mortgage Loans. On or prior to 5:00 p.m. (New York City time) on such Wet Funded Delivery Date, the Custodian shall issue a Trust Receipt in accordance with Section 2 hereof which shall identify such Wet Funded Mortgage Loan as a Dry Purchased Asset.

(d) The Custodian shall notify the Administrative Agent in writing by 5:00 p.m. (New York City time) on the Wet Funded Delivery Date in the event that either the Custodian does not receive a Mortgage Loan File relating to a Wet Funded Mortgage Loan or such Mortgage Loan File has been received but does not include the documents necessary for the Custodian to include such Wet Funded Mortgage Loan on an Asset Schedule to a Trust Receipt on such Wet Funded Delivery Date. If such Wet Funded Mortgage Loan is not included on an Asset Schedule to a Trust Receipt by 5:00 p.m. (New York City time) on the Wet Funded Delivery Date, the Custodian shall continue to hold the Mortgage Loan File relating to such Wet Funded Mortgage Loan as agent and bailee for the Administrative Agent until the receipt of instructions to the Custodian in writing to release the related Mortgage Loan File as provided therein.

 

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Section 6. Reserved.

Section 7. Obligations of the Custodian; Certain Representations and Warranties.

(a) Without prejudice to DBNTC's or the Custodian's functions and obligations under Sections 2 and 5 hereof, with respect to the Mortgage Loan Files delivered to the Custodian or which come into the possession of the Custodian, the Custodian is, following the related transfer pursuant to Sections 2 and 5 above, the custodian, bailee, and agent for the Buyer, and if different from the Buyer, the Registered Holder, as well. The Custodian shall, following the related transfer pursuant to Sections 2 and 5 above, hold all documents received by it for the exclusive use and benefit of the Administrative Agent, and, if different from the Administrative Agent, the Registered Holder, as well, and shall make disposition thereof only in accordance with this Agreement and written instructions furnished by such Registered Holder. The Custodian shall segregate and maintain continuous custody of the Mortgage Loan Files in secure and fire-resistant facilities in accordance with customary standards for such custody.

(b) The Custodian shall promptly notify the Administrative Agent (and, if different, the Registered Holder) if (i) Sellers fail to pay any amount due to the Custodian under this Agreement or any separate fee agreement related hereto; (ii) a Responsible Officer of the Custodian has written notice that any mortgage, pledge, lien, security interest or other charge or encumbrance has been placed on the Mortgage Loan Files other than in the ordinary course of business; or (iii) any representation, warranty and covenant contained in Section 22 were to become untrue or incorrect at any time during the term of this Agreement.

(c) No provision of this Agreement shall require Custodian to expend or risk its own funds or otherwise incur financial liability (other than expenses or liabilities otherwise required to be incurred by the express terms of Section 15 (c), Section 17 or Section 27(c) of this Agreement) in the performance of its duties under this Agreement if it shall have reasonable grounds for believing that repayment of such funds or indemnity satisfactory to it is not reasonably assured to it.

(d) Other than as provided herein, the Custodian shall not be liable for any action or omission to act hereunder except for its own negligence or lack of good faith or willful misconduct and for the actions or omissions of its officers, directors and employees in connection with this Agreement. In no event shall Custodian have any responsibility to ascertain or take action except as expressly provided herein. None of the Custodian's officers, directors or employees shall have any personal or individual liability hereunder.

(e) Custodian shall have no duties or responsibilities except those that are specifically set forth in this Agreement. Custodian shall have no responsibility for duty with respect to any Mortgage Loan File while not in its possession. No representation, warranty, covenant, agreement, obligation or duty of the Custodian shall be implied with respect to this Agreement or the Custodian's services hereunder other than those specifically set forth in this Agreement.

 

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(f) The Custodian, the Administrative Agent and each Seller each hereby represents and warrants to each other party that this Agreement has been duly authorized, executed and delivered by such party and constitutes the legal, valid, and binding obligation of such party enforceable in accordance with its terms except as the enforceability thereof may be limited by (a) bankruptcy, insolvency, liquidation, receivership, moratorium, reorganization or other similar laws affecting the enforcement of the rights of creditors and (b) general principles of equity, whether enforcement is sought in a proceeding in equity or at law.

(g) In the event that (i) the Administrative Agent, a 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 Loan File or any document included within a Mortgage Loan File or (ii) a third party shall institute any court proceeding by which any Mortgage Loan File or a document included within a Mortgage Loan File shall be required to be delivered otherwise than in accordance with the provisions of this Agreement, the party receiving such service shall promptly deliver or cause to be delivered to the other parties to this Agreement copies of all court papers, orders, documents and other materials concerning such proceedings. The Custodian shall, to the extent permitted by law or court order continue to hold and maintain all the Mortgage Loan 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 Loan File or any document included within such Mortgage Loan File as directed by the Administrative Agent which shall give a direction consistent with such determination. Expenses of the Custodian (including reasonable attorneys' fees and related expenses) incurred as a result of such proceedings shall be borne by Seller.

Section 8. Substitution.

(a) On the Business Day of Custodian's receipt of a Request for Release executed by a Seller and Registered Holder, as applicable, in the form of Exhibit 2 attached hereto (with box 4 checked), and provided that the Custodian has delivered to the Administrative Agent a Trust Receipt with respect to the Substitute Assets, the Custodian will transfer, or cause to be transferred, the Mortgage Loan Files or portions thereof then held by Custodian related to the Purchased Assets specified in such Request to the related Seller or its designee in exchange for the simultaneous transfer by such Seller to the Custodian of Mortgage Loans. The related Seller must deliver or cause to be delivered to Custodian, the Mortgage Loan Files for the Substitute Assets together with a Custodial Delivery and Asset Schedule in accordance with the provisions of Section 2 hereof. It is expressly understood and agreed that the Custodian shall have no duty to perform any valuation of collateral and shall have no responsibility to ascertain the adequacy of any Substitute Assets or their conformity to the definition of "Substitute Assets".

(b) The Custodian shall deliver to the related Registered Holder and the Administrative Agent, if the Administrative Agent is not the Registered Holder, an amended Exception Report and cumulative Trust Receipt that reflects the release of the applicable Purchased Assets and the delivery of the Substitute Assets in accordance with the provisions of Section 2 hereof and Section 4 hereof.

 

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Section 9. Additional Purchased Assets.

(a) In satisfaction of its obligations with respect to a Margin Call pursuant to Section 6(a) of the Master Repurchase Agreement, Sellers, with the prior written consent of the Administrative Agent, may, from time to time, deliver to the Custodian, additional Purchased Assets (the "Additional Purchased Assets") as an addition to the Purchased Assets already held by the Custodian in accordance with the provisions of this Custodial Agreement. In such event, Sellers shall deliver to the Custodian the Mortgage Loan Files for the Additional Purchased Assets together with a Custodial Delivery, with a copy to the Registered Holder(s) and, if the Administrative Agent is not the applicable Registered Holder at such time, the Administrative Agent, stating that the Additional Purchased Assets are being delivered pursuant to Section 6 of the Master Repurchase Agreement and delivery of the related Asset Schedule to the Custodian shall occur no later than 2:00 p.m. (New York City time) on the proposed day of substitution. If such Additional Purchased Assets are already in the Custodian's possession or if such Additional Purchased Assets are Wet Funded Mortgage Loans, the Custodian shall in turn deliver by electronic transmission to the Administrative Agent the related Exception Report on a Computer Medium no later than 3:00 p.m. (New York City time) on the proposed day of substitution. If new Additional Purchased Assets are delivered to the Custodian with the Asset Schedules, such delivery must occur by 12:00 p.m. (New York City time) and the Custodian shall in turn deliver such related Exception Report no later than 4:00 p.m. (New York City Time) of that day. The Administrative Agent shall notify the Custodian no later than 4:30 p.m. (New York City time) on the proposed day of substitution of any Mortgage Loans not accepted by Administrative Agent as Additional Purchased Assets.

(b) The Custodian shall deliver to the related Registered Holder and the Administrative Agent, if the Administrative Agent is not the Registered Holder, a cumulative Trust Receipt and amended Exception Report that reflects the delivery of the Additional Purchased Assets in accordance with the provisions of Section 2 hereof, Section 4 hereof and this Section 9.

Section 10. Future Defects. During the term of this Agreement, if the Custodian discovers any defect with respect to any Mortgage Loan File, the Custodian shall give written specification via the Exception Report of such defect to the related Seller, the Registered Holder(s) and, if the Administrative Agent is not a Registered Holder, the Administrative Agent. For purposes of this Section, "defect" means a failure of a document to conform to the review requirements set forth in Section 4(a). Sellers shall be solely responsible for completing or correcting any missing, incomplete or inconsistent documents, and the Custodian shall not be responsible or liable for taking or failing to take any such action, causing any Seller or any other person or entity to do so or notifying any Person that any such action has or has not been taken.

Section 11. Release for Servicing.

(a) From time to time and as appropriate for the foreclosure or servicing of any of the Purchased Assets or in connection with a sale of a group of Mortgage Loans by Sellers to a third party investor, the Custodian is hereby authorized, upon receipt in written form of a Request for Release from the related Seller in the form of Exhibit 2 attached hereto ("Request for Release"), with respect to releases of files relating to fifteen (15) or more Purchased Assets on any one date, with the written acknowledgement of the

 

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applicable Registered Holder and, if the Administrative Agent is not the applicable Registered Holder at such time, the Administrative Agent, release or cause to be released to such Seller or such Seller's Authorized Representative the related Mortgage Loan File or the documents of the related Mortgage Loan File set forth in such Request for Release; provided, that if the Mortgage Loan File is released to such Seller or its designee for any purpose other than one of the reasons set forth for boxes 1-5 of Exhibit 2 attached hereto, such Seller shall ensure that any document released to it or its Authorized Representative pursuant to a Request for Release shall be returned to Custodian no later than ten (10) days from the date of such Request for Release.

(b) All Mortgage Loan Files or documents of Mortgage Loan Files released by the Custodian to Sellers or, at Sellers' written direction, Sellers' Authorized Representative pursuant to this Section 11 shall be held by Sellers or Sellers' Authorized Representative, as applicable, in trust for the benefit of the related Registered Holder unless and until either such Mortgage Loan Files or documents of Mortgage Loan Files are returned by Sellers or Sellers' Authorized Representative to the Custodian or the related Mortgage Loan is liquidated, sold or repurchased and all related proceeds have been paid to the Registered Holder, or following and during the continuance of an Event of Default under the Repurchase Agreement, deposited into the Collection Account. Sellers or Sellers' Authorized Representative or the Servicer, as applicable, shall return to the Custodian, the Mortgage Loan File or other such documents of Mortgage Loan Files when the need therefor in connection with servicing or such other purpose specified in box 6 of Exhibit 2 attached hereto no longer exists (but in any event no later than ten (10) days from the date of such Request for Release), unless the Mortgage Loan shall be liquidated, repurchased or sold as provided above. If the Custodian has previously released a Mortgage Loan File as documents for servicing under Section 11(a), and such Mortgage Loan is liquidated or required to be sold, transferred or repurchased, Sellers or, if the Mortgage Loan File or documents were released to Sellers' Authorized Representative, Sellers' Authorized Representative shall deliver to Custodian an additional Request for Release that has been acknowledged and agreed by the Administrative Agent Registered Holder, certifying such liquidation, sale or transfer.

(c) The Custodian shall keep a record of the release and return, if any, of any Mortgage Loan Files. Upon confirmation of the liquidation, sale or transfer of any Mortgage Loan, the Custodian shall amend the related mortgage loan schedule included in the Exception Report to remove reference to such Mortgage Loan and deliver promptly such amended Mortgage Loan Schedule to the Registered Holder and, if the Administrative Agent is not the Registered Holder at such time, the Administrative Agent.

Section 12. Limitation on Release. Upon notice from the Administrative Agent to the Custodian that the Mortgage Loan Files relating to twenty-five (25) Purchased Assets in the aggregate have been released and are outstanding at one time (other than in connection with a sale of a group of Purchased Assets by Seller to a third party investor), the procedure for release of Mortgage Loan Files relating to a total of more than twenty-five (25) Purchased Assets at any one time shall be determined by the Registered Holder and, if the Administrative Agent is not the Registered Holder, the Administrative Agent and the Custodian at the time of such request. Any document a part of, or relating to, a Mortgage Loan File requested to be released by Sellers or Sellers' Authorized Representative may be released only upon the written acknowledgment of the Request for Release by the Registered Holder(s). The limitations of this

 

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paragraph shall not apply to the release of Mortgage Loan Files to Sellers or, at Sellers' written direction, Sellers' Authorized Representative under Section 13 below or to the release of Mortgage Loan Files to third party purchasers in connection with sales of Purchased Assets to third party purchasers in accordance with Section 11.

Section 13. Release for Payment. Upon the payment in full of any Mortgage Loan, and upon receipt by the Custodian of a Request for Release from Sellers (with the written approval of the Administrative Agent) certifying that such payment in full has been received or delivered to the Administrative Agent in immediately available funds (with Sellers to provide a copy to the applicable Registered Holder and, if the Administrative Agent is not the applicable Registered Holder at such time, the Administrative Agent), the Custodian shall promptly release the related Mortgage Loan File to Sellers or, at Sellers' written direction, Sellers' Authorized Representative and amend the related mortgage loan schedule included in the Exception Report to remove reference to such Purchased Asset.

Section 14. Fees of Custodian. The Custodian shall charge such fees for its services under this Agreement as are set forth in a separate agreement between the Custodian and Sellers, the payment of which fees, together with the Custodian's expenses in connection herewith (including reasonable attorneys' fees and costs), shall be solely the obligation of Sellers. In the event of the resignation or termination or discharge of the Custodian from its duties hereunder, all then accrued unpaid fees due the Custodian shall be paid by Sellers.

Section 15. Removal or Resignation of Custodian With Respect to Some or All of the Purchased Assets.

(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 Administrative Agent. Promptly after receipt of notice of the Custodian's resignation, the Administrative Agent shall appoint, in its sole discretion, after notice to Sellers, a successor Custodian to act on behalf of the Administrative Agent; provided, however, if no Event of Default has occurred and is continuing, the Administrative Agent's appointment of a successor Custodian shall be subject to written approval by Sellers (which consent shall not be unreasonably withheld). One original counterpart of such instrument of appointment shall be delivered to each of the Administrative Agent, Sellers, the Custodian and the successor custodian. If the successor Custodian shall not have been appointed within 60 days of the Custodian's providing such notice, the Custodian may petition any court of competent jurisdiction to appoint a successor Custodian; provided that the Custodian may not terminate its obligations until a successor custodian is appointed.

(b) The Administrative Agent may require the Custodian to complete the endorsements on the Mortgage Notes in the name of the applicable Registered Holder at the expense of Sellers. In the event the Custodian breaches any of its representations or warranties hereunder, or otherwise fails to satisfy its obligations hereunder, the Administrative Agent may remove and discharge, the Custodian from the performance of its duties under this Agreement with respect to some or all of the Mortgage Loans by at least 30 days' written notice from the Administrative Agent to the Custodian, with a copy to each other party to this Agreement. In the event

 

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that the Administrative agent removes the Custodian from the performance of its duties under this Agreement with respect to all of the Mortgage Loans, the Administrative Agent may, in its sole discretion, after notice to Sellers, appoint a successor Custodian to act on behalf of the Administrative Agent by written instrument; provided, however, if no Event of Default has occurred and is continuing, the Administrative Agent's appointment of a successor Custodian shall be subject to written approval by Sellers (which consent shall not be unreasonably withheld).

(c) In the event of any such new appointment as contemplated in subsections (a) and (b) above, the Custodian shall promptly, upon the simultaneous surrender of any outstanding Trust Receipts held by the Administrative Agent, transfer to the successor Custodian or the applicable Registered Holder, as directed by the Administrative Agent, the applicable Mortgage Loan Files being held by the Custodian under this Agreement. The cost of the shipment of Mortgage Loan Files arising out of the resignation of Custodian shall be at the expense of Custodian; provided, however, that if a reason for Custodian's resignation is due to the non-payment of fees and expenses due to it hereunder by the Sellers, then the shipment cost of such shipment of the Mortgage Loan Files shall be at the expense of Sellers. Sellers shall be responsible for the cost of shipment in all other circumstances and shall be responsible in all cases for the fees and expenses of the successor custodian and for endorsing the Mortgage Notes and assigning the Mortgages to the successor custodian, if required.

(d) In the event of termination of this Agreement, the Custodian shall follow the reasonable instructions of the Registered Holder(s) with respect to the disposition of the respective Mortgage Loan Files. Concurrently with the transfer and release of all of the Mortgage Loan Files by the Custodian, the Registered Holder(s) shall submit the related Trust Receipts to the Custodian for cancellation. Notwithstanding the foregoing, in the event that the Administrative Agent terminates this Agreement with respect to some, but not all, of the Mortgage Loans, this Agreement shall remain in full force and effect with respect to any Mortgage Loans for which this Agreement is not terminated. In addition, the Administrative Agent and the Custodian may, at the sole option of the Administrative Agent, enter into a separate Custodial Agreement which shall be mutually acceptable to the parties with respect to any or all of the Mortgage Loans with respect to which this Agreement is terminated.

Section 16. Examination and Copies of Mortgage Loan Files.

(a) Upon two Business Days written request to the Custodian by a Registered Holder, Seller or the Administrative Agent, such Registered Holder, Sellers or the Administrative Agent, as applicable, and its respective agents, accountants, attorneys, auditors and prospective purchasers will be permitted, during normal business hours to examine the related Mortgage Loan Files and any other documents, records and papers in the possession of or under the control of the Custodian relating to any or all of the Mortgage Loans. The Sellers shall be responsible for any reasonable expenses in connection with its examinations and the Buyer and Sellers shall be responsible for any reasonable expenses in connection with any other such examinations to be shared among them in accordance with Section 32 of the Master Repurchase Agreement.

 

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(b) Upon the written request of the Administrative Agent, a Registered Holder, or a Seller, the Custodian shall provide the Sellers, the Administrative Agent or such Registered Holder, as the case may be, at such requesting party's expense, with copies of the Mortgage Notes, Mortgages, Assignment of Mortgages and other documents relating to one or more of the Mortgage Loans.

Section 17. Insurance of Custodian. At its own expense, the Custodian shall maintain at all times during the existence of this Agreement and keep in full force and effect fidelity insurance, theft of document insurance, forgery insurance, and errors and omissions insurance. All such insurance shall be in amounts, with standard coverage and subject to standard deductibles, as is customary for insurance typically maintained by institutions which act as custodian of collateral substantially similar to the Purchased Assets or the Collateral and act in a custodial capacity. The minimum coverage under any such bond and insurance policies shall be at least equal to the corresponding amounts required by Fannie Mae in the Fannie Mae Mortgage-Backed Securities Selling and Servicing Guide or by Freddie Mac in the Freddie Mac Seller’s & Servicer's Guide. A certificate of the Custodian as to such coverage shall be furnished to the Administrative Agent or Sellers upon request stating that it is in full force and effect.

Section 18. Covenants of Sellers. Each Seller covenants to the Administrative Agent as of the date that any Mortgage Loan File documents are released to Sellers or Sellers' subservicer pursuant to a Request for Release that:

(a) if the Request for Release has been submitted for the release of a Purchased Asset that has been paid in full, all amounts representing principal and interest received in connection with the payment in full of the Purchased Asset have been paid to the Administrative Agent in immediately available funds as provided in the Repurchase Agreement prior to or simultaneously with the release of such files; provided, however, that if such prepayment in full occurs on any date on which an Event of Default has occurred and is continuing, all amounts received in connection with the payment in full of the Purchased Asset shall be paid to the Administrative Agent in immediately available funds as provided in the Repurchase Agreement prior to or simultaneously with the release of the related files;

(b) if item No. 3 has been checked on the Request for Release, the Repurchase Price for the applicable Purchased Asset has been paid to the Administrative Agent in immediately available funds;

(c) if item No. 4 has been checked on the Request for Release, a Custodial Delivery has been delivered simultaneously therewith listing the Substitute Assets; and

(d) if item No. 5 has been checked on the Request for Release, all proceeds of foreclosure, insurance, condemnation or other liquidation have been finally received by the Administrative Agent and credited to the Sellers pursuant to the Repurchase Agreement and this Agreement.

Section 19. Periodic Statements. Upon the reasonable written request of the Administrative Agent, Sellers, or a Registered Holder, the Custodian shall provide to the Administrative Agent, Sellers or Registered Holder, as the case may be, a list, on a Computer Medium, of all the Purchased Assets for which the Custodian holds a Mortgage Loan File pursuant to this Agreement.

 

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Section 20. Governing Law; Counterparts. This Agreement shall be governed by the internal laws of the State of New York, without giving effect to the conflict of laws principles thereof (except for Sections 5-1401 and 5-1402 of the New York General Obligations Law). For the purpose of facilitating the execution of this Agreement as herein provided and for other purposes, this 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 and be one and the same instrument.

Section 21. No Adverse Interest of Custodian. By execution of this Agreement, the Custodian represents and warrants that it currently holds, and during the existence of this Agreement shall hold, no adverse interest, by way of security or otherwise, in any Purchased Asset, and hereby waives and releases any such interest which it may have in any Purchased Asset as of the date hereof. The Purchased Assets shall not be subject to any security interest, lien or right of set-off by Custodian, or its Affiliates, 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 Purchased Assets.

Section 22. Custodian Representations. The Custodian (and any successor custodian as of the appointment of such custodian) hereby represents and warrants as of the date hereof and as of each date it delivers an executed Trust Receipt (and as of the date of appointment with respect to any successor custodian) that:

(a) it is duly organized, validly existing and in good standing as a national banking association and has all licenses necessary to carry on its business as it is now being conducted;

(b) it has proper authority to perform its duties hereunder;

(c) it is not controlled by, under common control with or otherwise affiliated with or related to any Seller and covenants and agrees with the Administrative Agent that prior to any such affiliation in the future, it shall obtain the prior written approval of the Administrative Agent;

Section 23. Cumulative Rights. The rights, powers and remedies of the Administrative Agent under this Agreement shall be in addition to all rights, powers and remedies given to the Administrative Agent by virtue of any statute or rule of law, the Master 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 Administrative Agent's ownership interest and security interest of the Administrative Agent, in the Purchased Assets and the Collateral.

Section 24. Notices. All demands, notices and communications hereunder (including, without limitation, Trust Receipts) shall be in writing and shall be deemed to have been duly given if mailed, by registered or certified mail, return receipt requested, or, if by other means, including electronic mail, facsimile or similar electronic telecommunication device capable of transmitting or

 

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creating a written record directly to the office of the recipient, when received by the recipient party at the address shown below, or at such other addresses as may hereafter be furnished to 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 (as evidenced, in the case of registered or certified mail, by the date noted on the return receipt, or in the case of electronic mail, facsimile or similar electronic telecommunication, the date noted on the confirmation of such transmission).

if to Administrative Agent:
Barclays Bank PLC
c/o Barclays Capital Services LLC
200 Cedar Knolls Road
Whippany, NJ 07981
Facsimile: (973) 576-3059
Attn:		Glenn Pearson
		Hansel Nieves
Email:		Glenn.Pearson@barclayscapital.com
		hansel.nieves@barcap.com
		asgoperations@barcap.com
with a copy to:
Barclays Capital Inc.
200 Park Avenue
New York, NY 10166
Facsimile: (212) 412-6846
Attn:		Jay Kim
		David Lister
		Michael Dryden
Email:		jay.kim@barcap.com
		david.lister@barcap.com
		michael.dryden@barcap.com

 

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if to Sellers:
American Home Mortgage Acceptance, Inc.
538 Broadhollow Road
Melville, New York 11747
Attn:		Craig S. Pino
Email:		cpino@americanhm.com
American Home Mortgage Corp.
538 Broadhollow Road
Melville, New York 11747
Attn:		Craig S. Pino
Email:		cpino@americanhm.com
American Home Mortgage Investment Corp.
538 Broadhollow Road
Melville, New York 11747
Attn:		Craig S. Pino
Email:		cpino@americanhm.com
American Home Mortgage Servicing, Inc.
538 Broadhollow Road
Melville, New York 11747
Attn:		Craig S. Pino
Email:		cpino@americanhm.com
with a copy to:
American Home Mortgage Acceptance, Inc.
538 Broadhollow Road
Melville, New York 11747
Attention: Alan B. Horn
if to Custodian:
Deutsche Bank National Trust Company
1761 East St. Andrew Place
Santa Ana, CA 92705
Attention: Mortgage Custody—AH06BC
Facsimile: (714) 247-6035
Telephone: (714) 247-6000

or as such other address or number may be changed by like notice.

Section 25. Successors and Assigns; Benefits of Custodial Agreement. This Agreement shall inure to the benefit of the successors and assigns of the parties hereto. No other Person, including any Mortgagor shall be entitled to any benefit or equitable

 

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right, remedy or claim under this Agreement. Administrative Agent may assign its rights hereunder as provided in the Master Repurchase Agreement to the extent permitted by, and on the terms and conditions of, Section 15 of the Master Repurchase Agreement (which section is incorporated herein by reference). The Custodian may not assign its rights or obligations hereunder without the prior written consent of the Administrative Agent and Sellers; provided that if an Event of Default has occurred and is continuing, the consent of Sellers shall not be required. Notwithstanding the foregoing, any Person into which the Custodian may be merged or consolidated, or any national association resulting from any merger, conversion or consolidation to which the Custodian is a party, or any Person succeeding to all or substantially all of the business of the Custodian, shall be the successor to the Custodian hereunder. Seller may not assign its rights or obligations hereunder without the prior written consent of the Administrative Agent.

Section 26. 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 be genuine and to have been signed or presented by the proper party or parties and conforming on its face to the requirements of this Custodial Agreement; but in the case of any request, instruction, document or certificate 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) If the Custodian requests instructions from the Administrative Agent with respect to any act, action or failure to act in connection with this Agreement, the Custodian shall be entitled to refrain from taking such action and continue to refrain from acting unless and until Custodian shall have received Written Instructions from the Administrative Agent with respect to a Mortgage Loan File without incurring any liability therefor to the Administrative Agent, Seller or any other Person.

(c) To help fight the funding of terrorism and money laundering activities, the Custodian will obtain, verify, and record information that identifies individuals or entities that establish a relationship or open an account with the Custodian. The Custodian will ask for the name, address, tax identification number and other information that will allow the Custodian to identify the individual or entity who is establishing the relationship or opening the account. The Custodian may also ask for formation documents such as articles of incorporation, an offering memorandum, and other identifying documents to be provided.

Section 27. Indemnification.

(a) The Sellers, jointly and severally, agree to reimburse, indemnify, defend 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, or out-of-pocket expenses of any kind or nature whatsoever, including reasonable attorneys' fees, that may be imposed on, incurred by, or asserted against it or them in any way relating to or arising out of this Agreement or any action taken or not taken by it

 

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or them hereunder unless such liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, or out-of-pocket expenses were imposed on, incurred by or asserted against the Custodian due to the breach, 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 Agreement.

(b) 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 five (5) Business Days after written request therefor by the Administrative Agent or Sellers in accordance with the terms and conditions of this Custodial Agreement; and provided that (i) the Custodian previously delivered to the Administrative Agent a Trust Receipt and Custodial Delivery which did not list such document as an exception on the related date of pledge; (ii) such document is not outstanding pursuant to a Request for Release in the form annexed hereto as Exhibit 2; and (iii) such document was held by the Custodian on behalf of the Sellers or the Administrative Agent, as applicable (a "Custodial Delivery Failure"), then the Custodian shall (a) with respect to any missing Mortgage Note, promptly deliver to the Administrative Agent or the Sellers upon request, a Lost Note Affidavit in the form of Exhibit 11 hereto and (b) with respect to any missing document related to such Mortgage Loan, including but not limited to a missing Mortgage Note, indemnify Sellers and the Administrative Agent in accordance with the succeeding paragraph of this Section 27.

(c) The Custodian agrees to indemnify and hold the Administrative Agent, Sellers, and their respective officers, designees, successors and assigns harmless against any and all liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, or out-of-pocket expenses, including reasonable attorney's fees, that may be imposed on, reasonably incurred by, or asserted against it or them solely and directly relating to or arising out of such Custodial Delivery Failure or the Custodian's negligence, willful misconduct, lack of good faith, or any breach of the conditions, representations or warranties contained herein. The foregoing indemnification shall survive any termination or assignment of this Agreement.

Section 28. Obligations of the Custodian With Respect to the Trust Receipts.

(a) The Custodian shall keep a register in which the Custodian shall provide for the registration of transfers of Trust Receipts as provided herein and in which it shall record the name and address of the Person to whom such Trust Receipt is issued (the "Registered Holder"). The Administrative Agent, shall be the initial Registered Holder for all Purchased Assets. Each Trust Receipt, upon initial issuance or reissuance, shall be dated the date of such issuance or reissuance and shall evidence the receipt and possession by the Custodian on behalf of the Registered Holder of the Trust Receipt of the related Mortgage Loan Files and the Registered Holder's right to possess those Mortgage Loan Files. The Custodian shall treat the person or entity in whose name the Trust Receipt is registered as the person or entity entitled to possession of the Mortgage Loan Files evidenced by such Trust Receipt for all purposes whatsoever, subject to the terms of this Agreement, and the Custodian shall not be affected by notice of any facts to the contrary. No Trust Receipt shall be valid for any purpose unless substantially in the form set forth in Exhibit 1 to this Agreement and executed by manual signature of an Authorized Representative of the Custodian. Such signature upon any Trust Receipt shall be conclusive

 

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evidence, and the only evidence, that such Trust Receipt has been duly delivered under this Agreement. Trust Receipts bearing the manual signatures of individuals who were, at the time when such signatures were affixed, Authorized Representatives of the Custodian shall bind the Custodian, notwithstanding that such individuals have ceased to be so authorized prior to the delivery of those Trust Receipts. Each Trust Receipt shall have attached thereto an Exception Report with respect to the applicable Purchased Assets and shall otherwise comply with the second paragraph of Section 4 of this Agreement. Any transferee or assignee of the Trust Receipt shall succeed to all the rights of the transferring Registered Holder under this Agreement with respect to such Trust Receipt and the related Purchased Assets upon notice to the Custodian and delivery to the Custodian of the appropriate evidence of such transfer and assignment.

(b) The Registered Holder may transfer its interest in the Mortgage Loan Files covered by any Trust Receipt by delivering to the transferee (the "Transferee") such Trust Receipt, together with an appropriate notice to the Custodian in the form of Exhibit 9 hereto (the "Notice to the Custodian"). Within three (3) Business Days of receipt of the Notice to the Custodian and receipt by the Custodian of the Trust Receipt from the Transferee, the Custodian shall deliver, in accordance with the written instructions of the Transferee, a Trust Receipt issued in the name of the Transferee and to the place indicated in any such written direction from the Transferee; provided that the Custodian shall not be required to issue a Trust Receipt to such Transferee until the date which is three (3) Business Days following the date that the Custodian has received all information necessary to allow the Custodian to complete its internal "Know Your Customer" procedures with respect to such Transferee. Upon receipt of the Notice to the Custodian from the Registered Holder, the Custodian shall change its records to reflect that such Transferee is the Registered Holder of the Mortgage Loan Files.

(c) In the event that (i) any mutilated Trust Receipt is surrendered to the Custodian, or the Custodian receives evidence to its satisfaction of the destruction, loss or theft of any Trust Receipt and (ii) there is delivered to the Custodian such security or indemnity as may be required by it to save it harmless, then, in the absence of notice to the Custodian that such Trust Receipt has been acquired by a bona fide purchaser, the Custodian shall execute and deliver a new Trust Receipt to such Registered Holder in exchange for or in lieu of any such mutilated, lost or stolen Trust Receipt.

(d) Simultaneously with the relinquishment of a Trust Receipt to the Custodian by the Registered Holder thereof and the delivery by the Custodian of the related Mortgage Loan Files to Sellers or their designee pursuant to Section 3 above or to such Registered Holder or a designee of the Registered Holder, the Trust Receipt shall be canceled and the related Mortgage Loan Files will no longer be subject to this Agreement.

Section 29. Authorized Representatives. Each individual designated as an authorized representative of the Custodian, Sellers and the Administrative Agent (each, an "Authorized Representative"), is authorized to give and receive notices, requests and instructions and to deliver certificates and documents in connection with this Agreement on behalf of the Custodian, Sellers, Sellers' Designee or the Administrative Agent, respectively, and the specimen signature for each such Authorized Representative of the Custodian, Sellers, Sellers' Designee or the Administrative Agent initially authorized hereunder is set forth on Exhibits 3, 4,

 

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5, and 6, respectively. From time to time, the Custodian, Sellers and the Administrative Agent may, by delivering to the others a revised exhibit, change the information previously given pursuant to this Section, but each of the parties hereto shall be entitled to rely conclusively on the then current exhibit until receipt of a superseding exhibit. Sellers shall deliver or cause to be delivered to Custodian an Authorized Representatives exhibit for each subservicer designated by Sellers in connection with Sections 9, 10, and 11 of this Agreement (each, a "Sellers' Designee"); provided, that the Custodian shall not recognize any request from Sellers' subservicer unless and until Sellers have given the Custodian written notice identifying such subservicer and such Authorized Representatives exhibit is received by the Custodian. The Custodian shall be entitled to rely conclusively upon (i) written notice from Sellers identifying a subservicer authorized to give instructions under Sections 9, 10 and 11 of this Agreement until receipt of written notice from Sellers revoking such authority and (ii) the most recent Authorized Representatives exhibit delivered to it by a subservicer of Sellers until receipt of a superseding exhibit. If the Custodian shall at any time receive conflicting instructions from Sellers and a subservicer of Sellers, the Custodian shall be entitled to rely on the instructions of Sellers.

Section 30. Reproduction of Documents. This Agreement and all documents relating thereto, including, without limitation, (i) consents, waivers and modifications which may hereafter be executed, and (ii) certificates and other information previously or hereafter furnished, may be reproduced by any photographic, photostatic, microfilm, microcard, miniature photographic or other similar process. The parties agree that any such reproduction shall be admissible in evidence as the original itself in any judicial or administrative proceeding, whether or not the original is in existence and whether or not such reproduction was made by a party in the regular course of business, and that any enlargement, facsimile or further reproduction of such reproduction shall likewise be admissible in evidence.

Section 31. Amendment; Waiver; Entire Agreement; Severability. No amendment or waiver of any provision of this Agreement nor consent to any departure herefrom shall in any event be effective unless the same shall be in writing and signed by all the parties hereto, and then such amendment, waiver or consent shall be effective only in the specific instance and for the specific purpose for which given. This Agreement, together with the Exhibits, Appendixes, Annexes and other writings referred to herein or delivered pursuant hereto, constitute the entire contract among the parties relating to the subject matter hereof and supersede any and all previous agreements and understandings, oral or written, relating to the subject matter hereof. If any provisions of this Agreement shall be held invalid or unenforceable, this 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.

Section 32. Consent to Jurisdiction. EACH PARTY HERETO HEREBY WAIVES TRIAL BY JURY. EACH HEREBY IRREVOCABLY CONSENTS TO THE NON-EXCLUSIVE PERSONAL JURISDICTION OF ANY COURT OF THE STATE OF NEW YORK, OR IN THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK, ARISING OUT OF OR RELATING TO THE PROGRAM DOCUMENTS IN ANY ACTION OR PROCEEDING. EACH HEREBY SUBMITS TO, AND IRREVOCABLY WAIVES ANY OBJECTION SUCH SELLER MAY HAVE TO, NON-EXCLUSIVE PERSONAL JURISDICTION AND VENUE IN THE COURTS OF THE STATE OF NEW YORK AND THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK, WITH RESPECT TO ANY DISPUTES ARISING OUT OF OR RELATING TO THE PROGRAM DOCUMENTS.

 

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Section 33. Confidentiality. Custodian hereby acknowledges and agrees that (i) all written or computer-readable information provided by Administrative Agent or Sellers regarding (a) Administrative Agent or Sellers, or (b) the Purchased Assets, as set forth on the related Asset Schedule, and (ii) the terms of this Agreement and the Repurchase Agreement (the "Confidential Information"), shall be kept confidential and shall not be divulged to any Person other than the parties hereto without Administrative Agent's and Sellers' prior written consent except to the extent that (i) Custodian reasonably deems necessary to do so in working with legal counsel, auditors, taxing authorities or other governmental agencies or regulatory bodies or in order to comply with any applicable federal or state laws, (ii) any portion of the Confidential Information is in the public domain other than due to a breach of this covenant by Custodian or any disclosure authorized by this Agreement or (iii) to the extent that Custodian is required to disclose Confidential Information pursuant to the requirements of any legal proceeding, Custodian shall notify the Administrative Agent and the related Seller within one Business Day of its knowledge of such legally required disclosure (unless such legally required disclosure is pursuant to a grand jury subpoena or disclosure of such request is otherwise prohibited by law) so that the Administrative Agent or Sellers may seek an appropriate protective order and/or waive Custodian's compliance with this Agreement. Notice shall be both by telephone and in writing. In the absence of a protective order or waiver, Custodian may disclose the relevant Confidential Information if (i) in the written opinion of its counsel, failure to disclose such Confidential Information would subject Custodian to liability for contempt, censure or other legal penalty or liability or (ii) Custodian has not received such protective order or waiver by the time that it is obligated to comply with such legal proceeding requirement.

 

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IN WITNESS WHEREOF, the Sellers, Administrative Agent and the Custodian have caused their names to be duly signed hereto by their respective officers thereunto duly authorized, all as of the date first above written.

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APPENDIX A

ADDITIONAL DEFINITIONS

In addition to the Definitions set forth in Section 1, the following words and phrases, unless the context otherwise requires, shall have the following meanings:

Mortgage Loan File: With respect to each Mortgage Loan, the following original documents constituting an original Mortgage Loan File:

(a) the original Mortgage Note bearing all intervening endorsements (or allonges), endorsed "Pay to the order of                     , without recourse" and signed in the name of the last endorsee (the "Last Endorsee") by an authorized officer (in the event that the Mortgage Loan was acquired by the Last Endorsee in a merger, the signature must be in the following form: "[the 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: "[the Last Endorsee], formerly known as [previous name]");

(b) the original of any guarantee executed in connection with the Mortgage Note (if any);

(c) the original Mortgage with evidence of recording thereon or a copy certified by Sellers, its agent or the title company on behalf of Sellers that have been sent for recording;

(d) the originals of all assumption, modification, consolidation or extension agreements, with evidence of recording thereon or copies certified by Sellers, its agent or the title company on behalf of Sellers to have been sent for recording, if any;

(e) Except with respect to Mortgage Loans registered on MERS, 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 thereof (in the event that the Mortgage Loan was acquired by the last endorsee in a merger, the signature must be in the following form: "[the 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: "[the last endorsee], formerly known as [previous name]");

(f) the originals of all intervening assignments of mortgage with evidence of recording thereon or copies certified by Sellers to have been sent for recording (intervening assignments shall not be required for any Mortgage that has been originated in the name of MERS and registered under the MERS System), if any;

(g) the original of any security agreement, chattel mortgage or equivalent document executed in connection with the Mortgage (if any);

 

Appendix A-1

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(h) the original or copy of mortgagee policy of title insurance, to the extent delivered; and

(i) the original power of attorney, if any, or a copy thereof certified by Sellers to have been sent for recording, for any document described above.

 

Appendix A-2