AMERICAN RESIDENTIAL EAGLE BOND TRUST 1998-1
COLLATERALIZED CALLABLE MORTGAGE BONDS
MORTGAGE LOAN PURCHASE AGREEMENT
Among
AMERICAN RESIDENTIAL INVESTMENT TRUST, INC.,
AMERICAN RESIDENTIAL EAGLE, INC.
and
AMERICAN RESIDENTIAL EAGLE BOND TRUST 1998-1
dated as of June 1, 1998
TABLE OF CONTENTS
PAGE
Section 1. Representations and Warranties of all Parties............ 1
(a) Authorization................................... 1
(b) No Conflict..................................... 1
(c) Binding Obligation.............................. 1
Section 2. Additional Representations, Warranties and Agreements of
AmREIT and the Company................................... 1
Section 3. Conveyance of Mortgage Loans............................. 2
Section 4. Intention of Parties..................................... 3
Section 5. Payment of Purchase Price................................ 3
(a) The Purchaser Note.............................. 3
(b) Pledge Permitted................................ 4
Section 6. Miscellaneous............................................ 4
(a) Amendments Etc. ................................ 4
(b) Binding Upon Successors, Etc. .................. 4
(c) Counterparts.................................... 4
(d) Governing Law................................... 4
(e) Headings........................................ 4
(f) Authorization................................... 4
(g) Nonpetition Covenant............................ 5
EXHIBIT A -- Form of Non-negotiable American Residential Eagle, Inc.
Promissory Note
MORTGAGE LOAN PURCHASE AGREEMENT
This Mortgage Loan Purchase Agreement (the "Agreement") is made as of
June 1, 1998, by and among American Residential Investment Trust, Inc., a
Maryland corporation ("AmREIT"), American Residential Eagle, Inc., a Delaware
corporation (the "Company"), and American Residential Eagle Bond Trust 1998-1
(the "Issuer"), a Delaware statutory business trust. Capitalized terms not
otherwise defined herein have the meanings ascribed to such terms in the
Indenture dated as of June 1, 1998 (the "Indenture") between the Issuer and
First Union National Bank, as indenture trustee (the "Trustee") or in the Master
Servicing Agreement referred to therein.
Section 1. Representations and Warranties of all Parties.
The Company, AmREIT and the Issuer, each as to itself and not the
other, hereby represents, warrants and agrees that:
(a) Authorization. The execution, delivery and performance of this
Agreement by it are within its respective powers and have been duly authorized
by all necessary action on its part.
(b) No Conflict. The execution, delivery and performance of this
Agreement will not violate or conflict with (i) its charter, bylaws or trust
agreement, (ii) any resolution or other corporate action by it, (iii) any
decisions, statutes, ordinances, rulings, directions, rules, regulations,
orders, writs, decrees, injunctions, permits, certificates or other requirements
of any court or other governmental or public authority in any way applicable to
or binding upon it, and (iv) will not result in or require the creation, except
as provided in or contemplated by this Agreement, of any lien, mortgage, pledge,
security interest, charge or encumbrance of any kind upon the Mortgage Loans (as
defined in Section 2(a)).
(c) Binding Obligation. This Agreement has been duly executed by it and
is its legally valid and binding obligation, enforceable against it in
accordance with this Agreement's terms, except as enforceability may be limited
by bankruptcy, insolvency, reorganization, moratorium or similar laws affecting
creditors' rights generally, and by general principles of equity.
Section 2. Additional Representations, Warranties and
Agreements of AmREIT and the Company.
(a) AmREIT represents and warrants to, and agrees with, the Company and
the Issuer that (i) AmREIT has good and valid title to the mortgage loans
identified in Schedule A to the Indenture (the "Mortgage Loans") free and clear
of all liens, mortgages, deeds of trust, pledges, security interests, charges,
encumbrances or other claims; and (ii) upon transfer to the Company, the Company
will receive good, valid and marketable title to all of the Mortgage Loans, free
and clear of any liens, mortgages, deeds of trust, pledges, security interests,
charges, encumbrances or other claims.
(b) The Company represents and warrants to, and agrees with, the Issuer
that upon transfer of the Mortgage Loans from AmREIT to the Company, it will
have good and valid title to the Mortgage Loans free and clear of all liens,
mortgages, deeds of trust, pledges, security interests, charges, encumbrances or
other claims, and, upon transfer to the Issuer, the Issuer will receive good,
valid and marketable title to all of the Mortgage Loans, free and clear of any
liens, mortgages, deeds of trust, pledges, security interests, charges,
encumbrances or other claims.
(c) AmREIT hereby makes the representations and warranties as to the
Mortgage Loans as set forth on Schedule III to the Master Servicing Agreement,
for the benefit of the Company, the Issuer and the Trustee.
(d) AmREIT hereby agrees to comply with the provisions of Section
2(c)(iv) of the Master Servicing Agreement in respect of a breach of any of the
representations and warranties set forth in this Section 2.
Section 3. Conveyance of Mortgage Loans.
AmREIT, concurrently with the execution and delivery hereof, hereby
sells, transfers, assigns, sets over and otherwise conveys to the Company,
without recourse, all of AmREIT's right, title and interest in and to (a) the
Mortgage Loans, including the related Mortgage Documents and all interest and
principal received or receivable by AmREIT on or with respect to the Mortgage
Loans after the Cut-off Date and all interest and principal payments on the
Mortgage Loans received prior to the Cut-off Date in respect of installments of
interest and principal due thereafter, but not including payments of interest
and principal due and payable on the Mortgage Loans on or before the Cut-off
Date, and all other proceeds received in respect of such Mortgage Loans, (b)
AmREIT's rights under the Master Servicing Agreement, the Management Agreement,
the Servicing Agreements and the Purchase and Sale Agreements, (c) the Insurance
Policies, (d) all cash, instruments or other property held or required to be
deposited in the Bond Account or the Distribution Account, (e) property that
secured a Mortgage Loan that has become an REO property, and (f) all proceeds of
the conversion, voluntary or involuntary, of any of the foregoing into cash or
other liquid assets, including, without limitation, all Insurance Proceeds,
Liquidation Proceeds and condemnation awards. On or prior to the Closing Date,
AmREIT shall deliver to the Company or, at the Company's direction, to the
Trustee or other designee of the Company, the Trustee Mortgage File for each
Mortgage Loan in the manner set forth in Section 2 of the Master Servicing
Agreement. Such delivery of the Trustee Mortgage Files shall be made against
payment by the Company of the purchase price for the Mortgage Loans and related
assets (the "Company Purchase Price") which shall be comprised of the types and
amounts of property set forth on Schedule 1 hereto.
The Company, concurrently with the execution and delivery hereof,
hereby sells, transfers, assigns, sets over and otherwise conveys to the Issuer,
without recourse, all of the Company's right, title and interest in and to (a)
the Mortgage Loans, including the related Mortgage Documents and all interest
and principal received or receivable by the Company on or with respect to the
Mortgage Loans after the Cut-off Date and all interest and principal payments on
the Mortgage Loans received prior to the Cut-off Date in respect of installments
of interest and principal due thereafter, but not including payments of interest
and principal due and payable on the Mortgage Loans on or before the Cut-off
Date, and all other proceeds received in respect of such Mortgage Loans, (b) the
Company's rights under the Master Servicing Agreement, the Management Agreement,
the Servicing Agreements, the Purchase and Sale Agreements and this Agreement,
(c) the Insurance Policies, (d) all cash, instruments or other property held or
required to be deposited in the Bond Account or the Distribution Account, (e)
property that secured a Mortgage Loan that has become an REO property, and (f)
all proceeds of the conversion, voluntary or involuntary, of any of the
foregoing into cash or other liquid assets, including, without limitation, all
Insurance Proceeds, Liquidation Proceeds and condemnation awards. On or prior to
the Closing Date, the Company shall deliver, or cause to be delivered, to the
Indenture Trustee or its designee the Trustee Mortgage File for each Mortgage
Loan. Such delivery of the Trustee Mortgage Files shall be made against delivery
by the Issuer of the purchase price for the Mortgage Loan and related assets
(the "Issuer Purchase Price"), which shall be comprised of the types and amounts
of the property set forth on Schedule II hereto.
Section 4. Intention of Parties.
It is the express intent of the parties hereto that the conveyance (i)
of the Mortgage Loans by AmREIT to the Company and (ii) of the Mortgage Loans by
the Company to the Issuer each be, and be construed as, an absolute sale
thereof. It is, further, not the intention of the parties that such conveyances
be deemed a pledge thereof. However, in the event that, notwithstanding the
intent of the parties, such assets are held to be the property of the granting
party, or if for any other reason this Agreement is held or deemed to create a
security interest in the Mortgage Loans, then (i) this Agreement shall be deemed
to be a security agreement within the meaning of the Uniform Commercial Code of
the State of New York and (ii) the conveyances provided for in this Agreement
shall be deemed to be an assignment and a grant (i) by AmREIT to the Company or
(ii) by the Company to the Issuer, of a security interest in all of the assets
transferred, whether now owned or hereafter acquired.
AmREIT, the Company and the Issuer shall, to the extent consistent with
this Agreement, take such actions as may be necessary to ensure that, if this
Agreement were deemed to create a security interest in the Mortgage Loans, such
security interest would be deemed to be a perfected security interest of first
priority under applicable law and will be maintained as such throughout the term
of this Agreement. AmREIT and the Company shall arrange for filing any Uniform
Commercial Code continuation statements in connection with any security interest
granted or assigned hereunder.
Section 5. Payment of Purchase Price.
(a) The Purchaser Note. On the Closing Date, the Company shall deliver
to AmREIT as part of the Purchase Price a promissory note, substantially in the
form of Exhibit A, payable to the order of AmREIT (such promissory note, as the
same has been or hereafter may be amended, supplemented, endorsed or otherwise
modified from time to time, together with any promissory note issued from time
to time in substitution therefor or renewal thereof in accordance with this
Agreement, being hereinafter called the "Purchaser Note"), which Purchaser Note
shall, in accordance with its terms, be subordinated to all interests of the
Trust Estate, all claims to the cash flows from Trust Estate assets and all
obligations of the Company for the benefit of Bondholders, of any nature, now or
hereafter arising under or in connection with this Agreement.
AmREIT shall hold the Purchaser Note and shall make all appropriate
recordkeeping entries with respect to the Purchaser Note or otherwise to reflect
the payments on an adjustment of the Purchaser Note. AmREIT's books and records
shall constitute rebuttable presumptive evidence of the principal amount of and
accrued interest on the Purchaser Note at any time. AmREIT hereby agrees to xxxx
the Purchaser Note "CANCELLED" and to return the Purchaser Note to the Company
upon the full and final payment thereof after the Termination Date.
(b) Pledge Permitted. AmREIT hereby agrees not to transfer, assign,
exchange or otherwise convey or pledge, hypothecate or otherwise grant a
security interest in the Purchaser Note or any interest represented thereby, and
any attempt to transfer, assign, exchange, convey, pledge, hypothecate or grant
a security interest in the Purchaser Note or any interest represented thereby
shall be void and of no effect. Notwithstanding anything to the contrary herein,
AmREIT may pledge the Purchaser Note to secure its obligations under any
repurchase or other credit facility.
Section 6. Miscellaneous.
(a) Amendments, Etc. No rescission, modification, amendment, supplement
or change of this Agreement shall be valid or effective unless in writing and
signed by all of the parties to this Agreement.
(b) Binding Upon Successors, Etc. This Agreement shall bind and inure
to the benefit of and be enforceable by AmREIT, the Company, the Issuer and the
respective successors and assigns thereof. The parties hereto acknowledge that
the Issuer is acquiring the Mortgage Loans for the purpose of pledging them
under the Indenture for the benefit of the Bondholders. As an inducement to the
Issuer to purchase the Mortgage Loans, AmREIT and the Company acknowledge and
consent to the assignment to the Trustee by the Issuer of all of the Issuer's
rights against AmREIT and the Company hereunder in respect of the Mortgage Loans
sold to the Issuer and that the enforcement or exercise of any right or remedy
against AmREIT and the Company hereunder by the Trustee or to the extent
permitted under the Indenture or the Master Servicing Agreement shall have the
same force and effect as if enforced and exercised by the Issuer directly.
(c) Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original but all of which
together shall constitute one and the same instrument.
(d) Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of New York.
(e) Headings. The headings of the several parts of this Agreement are
inserted for convenience of reference and are not intended to be a part of or
affect the meaning or interpretation of this Agreement.
(f) Authorization. The Company, pursuant to Section 6.03 of the Deposit
Trust Agreement, dated as of June 1, 1998, between the Owner Trustee and the
Company, as Depositor, hereby authorizes and directs the Owner Trustee to
execute and deliver, in the name and on behalf of the Issuer, this Agreement.
(g) Nonpetition Covenant. Until one year plus one day shall have
elapsed since the termination of the Indenture in accordance with its terms,
neither AmREIT nor any assignee of AmREIT or the Company or the Issuer shall
petition or otherwise invoke the process of any court or government authority
for the purpose of commencing or sustaining a case against the Company or 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 Company or the Issuer or any substantial part of
its property, or ordering the winding up or liquidation of the affairs of the
Company or the Issuer.
IN WITNESS WHEREOF, each party has caused this Mortgage Loan Purchase
Agreement to be executed by its duly authorized officer or officers as of the
day and year first above written.
AMERICAN RESIDENTIAL INVESTMENT
TRUST, INC.
By:____________________________
Name:__________________________
Title:_________________________
AMERICAN RESIDENTIAL EAGLE, INC.
By:____________________________
Name:__________________________
Title:_________________________
AMERICAN RESIDENTIAL EAGLE
BOND TRUST 1998-1
By: Wilmington Trust Company,
not in its individual capacity
but solely as
Owner Trustee
By:____________________________
Name:__________________________
Title:_________________________
EXHIBIT A
FORM OF NON-NEGOTIABLE AMERICAN RESIDENTIAL EAGLE, INC.
PROMISSORY NOTE
June 17, 1998
EXCEPT TO THE EXTENT PROVIDED IN THE PURCHASE AGREEMENT REFERRED TO
BELOW, THIS PROMISSORY NOTE AND ANY INTEREST REPRESENTED HEREBY SHALL
NOT BE TRANSFERRED, ASSIGNED, EXCHANGED, CONVEYED, PLEDGED,
HYPOTHECATED OR OTHERWISE THE SUBJECT OF THE GRANT OF A SECURITY
INTEREST AND ANY ATTEMPT TO TRANSFER, ASSIGN, EXCHANGE, CONVEY, PLEDGE,
HYPOTHECATE OR GRANT A SECURITY INTEREST IN THIS PROMISSORY NOTE OR ANY
INTEREST REPRESENTED HEREBY SHALL BE VOID AND OF NO EFFECT.
For VALUE RECEIVED, the undersigned, AMERICAN RESIDENTIAL EAGLE, INC.,
a Delaware corporation (the "Purchaser"), promises to pay to AMERICAN
RESIDENTIAL INVESTMENT TRUST, INC., a Maryland corporation (the "Seller"), on
the terms and subject to the conditions set forth herein and in the Purchase
Agreement referred to below, the aggregate unpaid Purchase Price of all assets
purchased by the Purchaser pursuant to the Purchase Agreement. Such amount as
shown in the records of the Seller will be rebuttable presumptive evidence of
the principal amount owing under this Note.
1. Purchase and Sale Agreement. This Note is the Purchaser Note
described in, and is subject to the terms and conditions set forth in, that
certain Mortgage Loan Purchase Agreement dated as of June 1, 1998 (as the same
may be amended, supplemented, restated or otherwise modified in accordance with
its terms, the "Purchase Agreement"), between the Seller and the Purchaser.
Reference is hereby made to the Purchase Agreement for a statement of certain
other rights and obligations of the Purchaser and the Seller.
2. Definitions. Capitalized terms used (but not defined) herein have
the meanings ascribed thereto in the Purchase Agreement. In addition, as used
herein, the following terms have the following meanings:
"Agreements" means, collectively, the Purchase Agreement, the
Indenture and the Master Servicing Agreement.
"Bankruptcy Proceedings" has the meaning set forth in clause (a) of
paragraph 7 hereof.
"Final Maturity Date" means the date that falls one year and one day
after the Stated Maturity Date.
"Junior Liabilities" means all obligations of the Purchaser to the
Seller under this Note.
"Indenture Trustee" means the Trustee under the Indenture and its
successors and assigns.
"Senior Liabilities" means all obligations of the Purchaser to the
Trust Estate and any other obligations of the Purchaser for the benefit of
Bondholders arising under or in connection with the Agreements, howsoever
created, arising or evidenced, whether direct or indirect, absolute or
contingent, now or thereafter existing, or due or to become due on or before the
Final Maturity Date.
"Subordination Provisions" means, collectively, clauses (a) through
(i) of paragraph 7 hereof.
3. Interest. Subject to the Subordination Provisions and paragraph 10
hereof, the Purchaser promises to pay interest on the aggregate unpaid principal
amount of this Note outstanding on each day, at a variable rate equal to the
"prime rate" determined as provided in Section 5 of the Purchase Agreement.
4. Interest Payment Dates. Subject to the Subordination Provisions,
paragraph 10 hereof and Section 5(a) of the Purchase Agreement, the Purchaser
shall pay accrued interest on this Note on each Distribution Date and on the
Final Maturity Date. The Purchaser also shall pay accrued interest on the
principal amount of each prepayment hereof on the date of each such prepayment.
5. Basis of Computation. Interest accrued hereunder shall be computed
for the actual number of days elapsed on the basis of a 360-day year.
6. Principal Payment Dates. Subject to the Subordination Provisions,
any unpaid principal of this Note shall be paid on the Final Maturity Date (or,
if such date is not a Business Day, the next succeeding Business Day). Subject
to the Subordination Provisions, paragraph 10 hereof and Section 5(a) of the
Purchase Agreement, the principal amount of and accrued interest on this Note
may be prepaid on any Business Day without premium or penalty.
7. Subordination Provisions. The Purchaser covenants and agrees, and
the Seller, by its acceptance of this Note, likewise covenants and agrees, that
the payment of all Junior Liabilities is hereby expressly subordinated in right
of payment to the payment and performance of the Senior Liabilities to the
extent and in the manner set forth in the following clauses of this paragraph 7:
(a) (i) In the event of any dissolution, winding up,
liquidation, readjustment, reorganization or other similar event relating to the
Purchaser, whether voluntary or involuntary, partial or complete, and whether in
bankruptcy, insolvency, receivership or other similar proceedings, or upon an
assignment for the benefit of creditors, or any other marshalling of the assets
and liabilities of the Purchaser or any sale of all or substantially all of the
assets of the Purchaser (such proceedings being herein collectively called
"Bankruptcy Proceedings"), and (ii) on and after the occurrence and continuation
of Event of Default under the Indenture, the Senior Liabilities shall first be
paid and performed in full and in cash before the Seller shall be entitled to
receive and to retain any payment or distribution in respect of the Junior
Liabilities. In order to implement the foregoing: (x) all payments and
distributions of any kind or character in respect of the Junior Liabilities to
which the Seller would be entitled except for this clause (a) shall be made
directly to the Indenture Trustee (for the benefit of the Bondholders); and (y)
the Seller hereby irrevocably agrees that the Indenture Trustee (on behalf of
the Bondholders), in the name of the Seller or otherwise, may demand, xxx for,
collect, receive and receipt for any and all such payments or distributions, and
file, prove and vote or consent in any such Bankruptcy Proceedings with respect
to any and all claims of the Seller relating to the Junior Liabilities, in each
case until the Senior Liabilities shall have been paid and performed in full and
in cash.
(b) Following the occurrence of any of the events described in
clause (a)(i) or (ii), in the event that the Seller receives any payment or
other distribution of any kind or character from the Purchaser or from any other
source whatsoever, in respect of the Junior Liabilities, such payment or other
distribution shall be received in trust for the Indenture Trustee and shall be
turned over by the Seller to the Indenture Trustee (for the benefit of the
Bondholders) forthwith. All payments and distributions received by the Indenture
Trustee in respect of this Note, to the extent received in or converted into
cash, may be applied by the Indenture Trustee (for the benefit of the
Bondholders) first to the payment of any and all reasonable expenses (including
reasonable attorneys' fees and legal expenses) paid or incurred by the Indenture
Trustee or the Bondholders in enforcing these Subordination Provisions, or in
endeavoring to collect or realize upon the Junior Liabilities, and any balance
thereof shall, solely as between the Seller and the Bondholders, be applied by
the Indenture Trustee toward the payment of the Senior Liabilities in a manner
determined by the Indenture Trustee to be in accordance with the Indenture; but
as between the Purchaser and its creditors, no such payments or distributions of
any kind or character shall be deemed to be payments or distributions in respect
of the Senior Liabilities.
(c) Upon the final payment in full and in cash of all Senior
Liabilities, the Seller shall be subrogated to the rights of the Indenture
Trustee to receive payments or distributions from the Purchaser that are
applicable to the Senior Liabilities until the Junior Liabilities are paid in
full.
(d) These Subordination Provisions are intended solely for the
purpose of defining the relative rights of the Seller, on the one hand, and the
Indenture Trustee (on behalf of Bondholders), on the other hand. Nothing
contained in these Subordination Provisions or elsewhere in this Note (subject
to paragraph 10 hereof) is intended to or shall impair, as between the
Purchaser, its creditors (other than the Bondholders) and the Seller, the
Purchaser's obligation, which is unconditional and absolute, to pay the Junior
Liabilities as and when the same shall become due and payable in accordance with
the terms hereof (subject to paragraph 10 hereof) and of the Purchase Agreement
or to affect the relative rights of the Seller and creditors of the Purchaser
(other than the Bondholders).
(e) The Seller shall not, until the Senior Liabilities have
been finally paid and performed in full and in cash, (i) cancel, waive, forgive,
transfer or assign, or commence legal proceedings to enforce or collect, or
subordinate to any obligation of the Purchaser, howsoever created, arising or
evidenced, whether direct or indirect, absolute or contingent, or now or
thereafter existing, or due or to become due (other than the Senior
Liabilities), the Junior Liabilities or any rights in respect hereof or (ii)
convert the Junior Liabilities into an equity interest in the Purchaser, unless,
in the case of each of clauses (i) and (ii) above, the Seller shall have
received the prior written consent of the Indenture Trustee in each case.
(f) The Seller shall not, except without the advance written
consent of the Indenture Trustee, commence, or join with any other Person in
commencing, any Bankruptcy Proceedings with respect to the Purchaser until at
least one year and one day have passed since the Stated Maturity.
(g) If, at any time, any of the payment (in whole or in part)
made with respect to any Senior Liabilities is rescinded or must be restored or
returned by the Indenture Trustee or Bondholders (whether in connection with any
Bankruptcy Proceedings or otherwise), these Subordination Provisions shall
continue to be effective or shall be reinstated, as the case may be, as though
such payment had not been made.
(h) The Indenture Trustee (on behalf of Bondholders) may, from
time to time, without notice to the Seller, and without waiving any of its
rights under these Subordination Provisions, take any or all of the following
actions: retain or obtain an interest in any property to secure any of the
Senior Liabilities; (ii) retain or obtain the primary or secondary obligations
of any other obligor or obligors with respect to any of the Senior Liabilities;
(iii) extend or renew for one or more periods (whether or not longer than the
original period), alter or exchange any of the Senior Liabilities, or release or
compromise any obligation of any nature with respect to any of the Senior
Liabilities; (iv) amend, supplement, amend and restate, or otherwise modify the
Agreements or any related document; and (v) release its security interest in or
surrender, release or permit any substitution or exchange for all or any part of
any rights or property securing any of the Senior Liabilities, or extend or
renew for one or more periods (whether or not longer than the original period)
or release, compromise, alter or exchange any obligations of any nature of any
obligor with respect to any such rights or property.
(i) The Seller hereby waives: (i) notice of acceptance of
these Subordination Provisions by any of the Bondholders, (ii) notice of the
existence, creation, non-payment or non-performance of all or any of the Senior
Liabilities; and (iii) all diligence in enforcement, collection or protection
of, or realization upon, the Senior Liabilities, or any thereof, or any security
therefor.
(j) These Subordination Provisions constitute a continuing
offer from the Purchaser to all Persons who become the holders of, or who
continue to hold, Senior Liabilities; and these Subordination Provisions are
made for the benefit of the Bondholders, and the Indenture Trustee may proceed
to enforce such provisions on behalf of each of such Persons.
8. General. No failure or delay on the part of the Seller in exercising
any power or right hereunder shall operate as a waiver thereof, nor shall any
single or partial exercise of any such power or right preclude any other or
further exercise thereof or the exercise of any other power or right. No
amendment, modification or waiver of, or consent with respect to, any provision
of this Note shall in any event be effective unless (a) the same shall be in
writing and signed and delivered by the Purchaser and the Seller, and (b) all
consents required for such actions under the Agreements shall have been received
by the appropriate Persons. The rights and remedies granted hereunder to the
Indenture Trustee and the Bondholders are subject to exercise as provided in the
Agreements.
9. Limitation on Interest. Notwithstanding anything in this Note to the
contrary, the Purchaser shall never be required to pay unearned interest on any
amount outstanding hereunder, and shall never be required to pay interest on the
principal amount outstanding hereunder at a rate in excess of the maximum
interest rate that may be contracted for, charged or received without violation
of applicable federal or state law.
10. Acknowledgment. The Seller acknowledges and agrees that it has no
rights to payment under this Note, and will not make any claim for payment
hereunder, unless funds are available for payment by the Purchaser in excess of
amounts due and payable by it at the time under the Agreements. The Purchaser
agrees to apply all amounts received in respect of the Investor Certificates
held by the Purchaser to amounts due or outstanding under this Note. The Seller
further acknowledges and agrees that its sole right to payment of principal and
interest on this Note shall be limited to amounts received by the Purchaser from
the Investor Certificates held by the Purchaser.
11. No Negotiation. This Note is not negotiable.
12. GOVERNING LAW. THIS NOTE SHALL BE DEEMED TO BE A CONTRACT MADE
UNDER AND GOVERNED BY THE INTERNAL LAWS OF THE STATE OF NEW YORK WITHOUT REGARD
TO CONFLICT OF LAWS PRINCIPLES.
13. Captions. Paragraph captions used in this Note are provided solely
for convenience of reference only and shall not affect the meaning or
interpretation of any provision of this Note
AMERICAN RESIDENTIAL EAGLE, INC.
By:____________________________
Name:__________________________
Title:_________________________
