MANAGEMENT AGREEMENT
This Agreement (the "Agreement") is made as of April 1, 1999 by and
between American Residential Investment Trust, Inc., a Maryland corporation
("Manager"), and American Residential Eagle Bond Trust 1999-1, a Delaware
statutory business trust (the "Issuer"), pursuant to the Deposit Trust
Agreement, dated as of April 1, 1999 (the "Trust Agreement"), between Bear
Xxxxxxx Asset Backed Securities, Inc. (the "Company"), as depositor, and
Wilmington Trust Company, a Delaware banking corporation as Owner Trustee
("Owner Trustee").
WITNESSETH:
WHEREAS, the Issuer intends to issue its Mortgage-Backed LIBOR Notes,
Class A, Series 1999-1 (the "Notes"), collateralized by a pool of fixed and
adjustable rate mortgage loans owned by the Issuer ("Mortgage Loans"), as more
particularly set forth in the Indenture (the "Indenture"), dated as of April
1, 1999, between the Issuer and Norwest Bank Minnesota, N.A., a national
banking association, in its capacity as indenture trustee (the "Indenture
Trustee"); and
WHEREAS, the Issuer desires to retain Manager to provide certain
management services to the Issuer in connection with the Notes; and
WHEREAS, Manager is prepared to perform such services for the benefit of
the Issuer;
NOW, THEREFORE, in consideration of the mutual covenants contained
herein, and other good and valuable consideration, the receipt and sufficiency
of which is hereby acknowledged, the parties hereto agree as follows:
1. Definitions. Capitalized terms not otherwise defined in this Agreement
shall have the meanings set forth in the Indenture and in the Master Servicing
Agreement, dated as of April 1, 1999 (the "Master Servicing Agreement"), among
Advanta Mortgage Corp. USA, the Issuer and the Indenture Trustee.
2. Manager. Manager will serve as the manager of the Issuer.
3. Management Services. The Manager will:
(a) provide the following services to the Issuer without the Issuer's
further direction:
(i) cause the Notes executed by the Issuer to be delivered to the
Indenture Trustee for authentication;
(ii) cause definitive Notes to be prepared;
(iii) cause to be kept a Note Register and appoint successor Note
Registrars, if any;
(iv) in connection with the original issuance of the Notes, prepare
all Issuer Requests and Issuer Orders in connection with authentication and
delivery of the Notes; obtain Opinions of Counsel; prepare Officers'
Certificates and supply necessary supporting documents; supply insurance
policies, surety bonds, instructions, opinions and such other documents as may
be required by the terms of the Indenture or by the Indenture Trustee;
(v) appoint a Note Paying Agent, if different from the Indenture
Trustee, and direct the Indenture Trustee to deposit funds with such Note
Paying Agent, if required; cause the Note Paying Agent to execute and deliver
instruments to the Indenture Trustee, if required;
(vi) prepare for execution by the Issuer and file or record all
supplements, amendments, financing statements, continuation statements,
instruments of further assurance and other instruments necessary for the
protection of the Trust Estate;
(vii) supply Opinions of Counsel as to the Trust Estate;
(viii) monitor the Issuer's and other Persons' (including the Master
Servicer's) performance of obligations and notify the Issuer and the Indenture
Trustee of any event of default;
(ix) prepare and deliver on behalf of the Issuer annual statements as
to compliance with the Indenture and other documents to which the Issuer is a
party;
(x) affix the Indenture Trustee's name to each assignment of Mortgage
and, except to the extent otherwise provided in the Master Servicing
Agreement, record the Assignments of Mortgage and deliver the recorded
Assignments to the Custodian;
(xi) monitor the Issuer's obligations as to satisfaction and discharge
of the Indenture and report to the Issuer any failure in the satisfaction of
such obligations;
(xii) give notice to the Noteholders of the resignation of the
Indenture Trustee and the appointment of any successor Indenture Trustee;
(xiii) furnish the Indenture Trustee with names and addresses of the
Noteholders to the extent required;
(xiv) prepare for execution by the Issuer and file all documents
required to be filed on a periodic basis with the Securities and Exchange
Commission and file such documents with the Indenture Trustee and deliver
summaries of such documents to the Noteholders; monitor the Issuer's
compliance with provisions of TIA Section 314(a);
(xv) prepare and deliver to the Issuer for execution, as appropriate,
and then deliver to the Indenture Trustee all documents and opinions and take
all appropriate action with respect to the release of the Mortgage Loans;
(xvi) with the consent of the Issuer, appoint Independent accountants
and any successors and direct such Independent accountants or successors to
prepare and deliver reports or certificates to the extent required by the
Indenture;
(xvii) prepare for execution and deliver on behalf of the Issuer
certificates or Opinions of Counsel with respect to compliance with the
Indenture;
(xiii) record the Indenture, if required;
(xix) cause to be prepared for execution by the Issuer and delivered
or filed, all tax returns, financial statements and such annual or other
reports of the Issuer or the Owner Trustee, in its capacity as such, as may be
required pursuant to the Trust Agreement;
(xx) cause to be calculated the original issue discount with regard to
the Notes as requested from time to time;
(xxi) cause to be prepared for execution by the Issuer and filed,
recorded or delivered, such statements, instruments, notices, documents,
agreements and certificates or other papers required of the Issuer pursuant to
Section 5.01 of the Trust Agreement;
(xxii) deliver, on behalf of the Issuer, all documents and instruments
with respect to each Mortgage Loan as required by the Master Servicing
Agreement; and
(xxiii) deliver, on behalf of the Issuer, a notice of redemption to
the Indenture Trustee and any other notice of exercise of rights to remove
Mortgage Loans from the Indenture;
(b) provide the following services to the Issuer without the Issuer's
further direction:
(i) maintain (or cause to be maintained) the books of the Issuer on a
calendar year basis using the accrual method of accounting;
(ii) deliver (or cause to be delivered) to the Certificateholder as
may be required by the Code and applicable Treasury Regulations, such
information as may be required to enable the Certificateholder to prepare
federal and state income tax returns;
(iii) prepare and file or cause to be prepared and filed such tax
returns relating to the Issuer as may be required by the Code and applicable
Treasury Regulations (making such elections as may from time to time be
required or appropriate under any applicable state or federal statutes, rules
or regulations); and
(iv) collect or cause to be collected any withholding tax as described
in and in accordance with Section 5.01 of the Trust Agreement with respect to
income or distributions to the Certificateholder and prepare or cause to be
prepared the appropriate forms relating thereto;
(c) pursuant to the Indenture between American Residential Eagle Bond
Trust 1999-1, as Issuer, and Norwest Bank Minnesota, National Association, as
Indenture Trustee, dated as of April 1, 1999 (the "Indenture"), perform the
Issuer's obligations specified in sections 3.04(a), 3.05(a); 3.07(a), 3.07(c),
3.08, 6.09(f), 7.01(a), 7.04 and 11.01(a) of the Indenture for the Issuer
without the Issuer's further direction;
(d) pursuant to the Master Servicing Agreement, perform the Issuer's
obligations specified in Section 2 of the Master Servicing Agreement for the
Issuer without the Issuer's further direction; and amend from time to time the
Schedule of Mortgage Loans, as defined in the Master Servicing Agreement, to
reflect the addition of Replacement Mortgage Loans and the deletion of Deleted
Mortgage Loans, pursuant to the provisions of the Master Servicing Agreement
and the Indenture, for the Issuer without the Issuer's further direction;
(e) perform the Issuer's obligations under the Custodial Agreement,
including its obligation to pay the fees and expenses of the Custodian; and
(f) otherwise provide such consultation, services and assistance as
the Issuer may from time to time request in connection with the Owner
Trustee's obligations under the Trust Agreement and/or the Issuer's
obligations under the Indenture, the Trust Agreement, and the Master Servicing
Agreement, in respect of the Notes.
The Issuer shall cooperate with the Manager to facilitate the prompt
performance by the Manager of its obligations under this Paragraph 3. The
Manager may provide such services as required by this Paragraph 3 either
directly or may assign such duties to one or more submanagers pursuant to
submanagement agreements; provided, however, that any such submanager shall
have been approved by the Issuer; and provided further that notwithstanding
any such assignment the Manager shall remain liable for performing its duties
and obligations under this Agreement; and
(g) In performing its services hereunder, observe strictly the
following:
(i) the Issuer's operating expenses and liabilities will not be paid
by the Manager or any affiliate thereof (excluding the Issuer) (an "AmREIT
Person") except that certain organizational expenses of the Issuer and
expenses relating to creation and initial implementation of the Issuer have
been paid by the Manager;
(ii) the Manager will maintain for the Issuer records and books of
account separate from those of every AmREIT Person and telephone numbers,
mailing addresses, stationery and other business forms that are separate and
distinct from those of every AmREIT Person;
(iii) any financial statements of any AmREIT Person which are
consolidated to include the Issuer will contain detailed notes clearly stating
that (A) all of the Issuer's assets are owned by the Issuer, and (B) the
Issuer is a separate legal entity with its own separate creditors which will
be entitled to be satisfied out of the Issuer's assets prior to any value in
the Issuer becoming available to the Issuer's equity holders;
(iv) the Issuer's assets will be maintained in a manner that
facilitates their identification and segregation from those of any AmREIT
Person;
(v) the Manager will cause the Issuer to strictly observe formalities
in its dealings with each AmREIT Person (including, without limitation,
formalities in regard to the Issuer's status as a separate legal entity), and
funds or other assets of the Issuer will not be commingled with those of any
AmREIT Person. The Issuer will not be permitted to maintain joint bank
accounts or other depository accounts to which any AmREIT Person has
independent access;
(vi) the Manager will cause any transaction between the Issuer and an
AmREIT Person to be fair and equitable to the Issuer, to be the type of
transaction which would be entered into by a prudent Person to the position of
the Issuer with an AmREIT Person, and will be on terms which are at least as
favorable as may be obtained from a Person which is not an AmREIT Person;
(vii) any AmREIT Person that renders or otherwise furnishes services
to the Issuer will be compensated by the Issuer at market rates for such
services; and
(viii) the Manager will not permit the Issuer or any AmREIT Person to
be or to hold itself out to be responsible for the debts of the other.
4. Manager Compensation. The Manager shall be entitled to receive from
the Issuer a fee, payable monthly, at the rate and on the dates and in the
manner provided in the Indenture.
5. Limitation of Responsibility of the Manager.
(a) The Manager will have no responsibility under this Agreement other
than to render the services called for hereunder. The Manager, its affiliates,
shareholders, directors, officers and employees shall not be liable to the
Issuer, the Owner Trustee, the Indenture Trustee, the Noteholders or others,
except by reason of acts constituting bad faith, willful misfeasance, gross
negligence or reckless disregard of their duties. The Issuer will reimburse,
indemnify and hold harmless the Manager and its affiliates, shareholders,
directors, officers and employees with respect to all expenses, losses,
damages, liabilities, demands, charges and claims of any nature in respect of
any acts or omissions performed or omitted by the Manager and in accordance
with the procedure set forth below.
(b) Any amount due the Manager or its affiliates, shareholders,
directors, officers and employees under Section 5(a) shall be paid by the
Issuer, solely out of the assets of the Trust Estate that are free of the lien
of the Indenture, promptly after each Payment Date, provided that all interest
and principal due on the Notes on such Payment Date and all amounts then owing
to the Indenture Trustee and the Owner Trustee have been paid in full. Any
amount that cannot be paid to the Manager or its affiliates, shareholders,
directors, officers and employees consistent with the foregoing proviso shall
be paid promptly after each succeeding Payment Date until paid in full, in
each case subject to the foregoing proviso.
6. Term. This Agreement shall continue in effect until the termination of
the Trust Agreement. If the date of such termination is not a Distribution
Date, the Manager shall be paid the amount due it pursuant to Section 5(a) as
of such termination promptly after such date of termination.
7. Termination.
(a) The Manager, at its election, may resign as Manager hereunder and
be discharged of its duties hereunder upon not less than 30 days' notice to
the Issuer, the Owner Trustee and the Indenture Trustee; provided, however,
that no such resignation and discharge shall become effective until a Person
selected by the Manager, who is acceptable to the Issuer in its discretion,
shall have assumed and agreed to perform the duties of the Manager hereunder
as evidenced by a written instrument to such effect delivered to the Issuer.
Upon delivery of such written instrument to the Issuer, the Issuer shall
promptly deliver to the successor Manager a written instrument acknowledging
and accepting the assignment of the resigning Manager's rights hereunder to
the successor Manager. Each such successor Manager shall be deemed to be the
Manager for all purposes of this Agreement.
(b) If any of the following events shall occur and be continuing:
(i) the Manager shall violate any provision of this Agreement and such
default is not cured within ten days after written notice thereof is given to
the Manager by the Issuer or the Indenture Trustee;
(ii) a court of competent jurisdiction shall enter a decree or order
for relief in respect of the Manager in an involuntary case under any
applicable bankruptcy, insolvency or other similar law now or hereafter in
effect, or appoint a receiver, liquidator, assignee, custodian, trustee,
sequestrator (or other similar official) of the Manager or for any substantial
part of its property, or order the winding-up or liquidation of its affairs;
or
(iii) the Manager shall commence a voluntary case under any applicable
bankruptcy, insolvency or other similar law now or hereafter in effect, or
shall consent to the entry of an order for relief in an involuntary case under
any such law, or shall consent to the appointment of or taking possession by a
receiver, liquidator, assignee, trustee, custodian, sequestrator (or other
similar official) of the Manager or for any substantial part of its property,
or shall make any general assignment for the benefit of creditors, or shall
fail generally to pay its debts as they become due; then, in any such event
this Agreement may be terminated by the Issuer.
8. Indenture Trustee as Beneficiary. Each of the Owner Trustee, the Note
Insurer and the Indenture Trustee shall be an intended third-party beneficiary
of this Agreement and the Note Insurer or the Indenture Trustee shall be
entitled to enforce the rights of the Issuer hereunder for the benefit of the
Noteholders.
9. Assignment. The Manager may not assign this Agreement (other than (i)
the assignment of the duties under this Agreement to one or more submanagers
approved by the Issuer or (ii) to a corporation or other organization which is
a successor by merger, consolidation or purchase of substantially all of the
assets of the Manager) unless such assignment is consented to in writing by
both the Issuer and the Indenture Trustee. Such an assignment, if so consented
to, shall bind the assignee hereunder in the same manner as the Manager is
bound hereunder. This Agreement shall not be assignable by the Issuer without
the consent of the Manager, except for assignment to the Indenture Trustee
pursuant to the Indenture and in the case of assignment to a corporation or
other organization which is a successor by merger, consolidation or purchase
of substantially all of the assets to the Issuer, in which case such successor
organization shall be bound hereunder and by the terms of said assignment in
the same manner as the Issuer is bound hereunder.
10. Heading. The section headings hereof have been inserted for
convenience and reference only and shall not be construed to affect the
meaning, construction or effect of this Agreement.
11. Amendments. This Agreement may not be amended, changed, modified or
terminated except in writing signed by Manager and the Issuer and unless
approved by the Indenture Trustee, such approval not to be unreasonably
withheld.
12. Governing Law. This Agreement shall be governed by and construed
under the substantive laws of the State of New York applicable to agreements
made and to be performed in the State of New York and the obligations, rights
and remedies of the parties hereto shall be determined in accordance with such
laws.
13. Notices. All notices, requests and other communications permitted or
required hereunder shall be in writing and shall be deemed to have been duly
given when received.
If to Manager to:
American Residential Investment Trust, Inc.
000 Xxxxxx Xxxx Xxxxxx, Xxxxx 000
Xxx Xxx, XX 00000
Attention: Xxxx Xxxxx and/or Xxxxxx Xxxx
If to the Issuer to:
American Residential Eagle Bond Trust 1999-1
c/o Wilmington Trust Company as Owner Trustee
Xxxxxx Square North
0000 X. Xxxxxx Xxxxxx
Xxxxxxxxxx, Xxxxxxxx 00000-0000
Attention: Corporate Trust Administration
14. Counterparts. This Agreement may be executed in one or more
counterparts, any of which shall constitute an original as against any party
whose signature appears on it, and all of which shall together constitute a
single instrument. This Agreement shall become binding when one or more
counterparts, individually or taken together, bear the signatures of all
parties.
15. Limitation of Liability of Wilmington Trust Company. It is expressly
understood and agreed by the parties hereto that (a) this Agreement is
executed and delivered in the name and on behalf of the Issuer by Wilmington
Trust Company, not individually or personally but solely as owner trustee of
American Residential Eagle Bond Trust 1999-1, in the exercise of the powers
and authority conferred and vested in it under the Trust Agreement, (b) each
of the representations, undertakings and agreements herein made on the part of
the Issuer is made and intended not as a personal representation, undertaking
and agreement by Wilmington Trust Company but is made solely in the name and
on behalf of the Issuer and intended for the purpose of binding only the
Issuer, (c) nothing herein contained shall be construed as creating any
liability on the part of Wilmington Trust Company, other than any liability in
connection herewith arising out of its gross negligence, bad faith or willful
misconduct, and (d) under no circumstances shall Wilmington Trust Company be
personally liable for the payment of any indebtedness or expenses of the
Issuer or be liable for the breach or failure of any obligation,
representation, warranty or covenant made or undertaken by the Issuer under
this Agreement or the other Operative Documents or otherwise.
16. Nonpetition Covenants. Notwithstanding any prior termination of this
Agreement, the Manager shall not, prior to the date which is one year and one
day after the termination of this Agreement with respect to the Issuer,
acquiesce, petition or otherwise invoke or cause the Issuer (or any assignee)
to invoke the process of any court or government authority for the purpose of
commencing or sustaining a case against the Issuer under any federal or state
bankruptcy, insolvency or similar law, or appointing a receiver, liquidator,
assignee, trustee, custodian, sequestrator or other similar official of the
Issuer or any substantial part of its property, or ordering the winding up or
liquidation of the affairs of the Issuer.
IN WITNESS WHEREOF, the parties have caused this Agreement to be executed
as of the day first above written.
AMERICAN RESIDENTIAL
INVESTMENT TRUST, INC.
By: /s/ Xxx X. Xxxxxx
--------------------------------
Name: Xxx X. Xxxxxx
Title:
AMERICAN RESIDENTIAL EAGLE
BOND TRUST 1999-1
By: Wilmington Trust Company,
not in its individual capacity
but solely as Owner Trustee
By: /s/ Xxxxxx Xxxxxx
-----------------------------
Name: Xxxxxx Xxxxxx
Title: Vice President
