ASSIGNMENT, ASSUMPTION AND RECOGNITION AGREEMENT
This
Assignment, Assumption and
Recognition Agreement (the “AAR Agreement”) is made and entered into as of March
30, 2007 (the “Closing Date”), among Structured Asset Mortgage Investments II
Inc. (the “Assignor”), U.S. Bank National Association, not individually but
solely as trustee
for the holders of Prime Mortgage Trust, Mortgage Pass-Through Certificates,
Series 2007-1 (the
“Assignee”) and EMC Mortgage Corporation
(the “Company”).
Whereas,
the Assignor and the Company
entered into that certain Servicing Agreement, dated as of March 1, 2007 (the
“Servicing Agreement”), pursuant to which the Company agreed to service certain
mortgage loans (the “Mortgage Loans”) on behalf of the
Assignor.
In
consideration of the mutual promises
and agreements contained herein, and for other good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, the parties hereto
agree that the Mortgage Loans listed on Attachment 1
annexed hereto (the “Assigned Loans”)
shall be subject to the terms of this AAR Agreement. Any capitalized
term used and not otherwise defined herein shall have the meaning assigned
to
such term in the Servicing Agreement.
Assignment
and Assumption
1. Except
as
expressly provided for herein, the Assignor hereby grants, transfers and assigns
to the Assignee all of its right, title and interest as in, to and under the
Assigned Loans, and as they relate to the Assigned Loans, the Servicing
Agreement. Notwithstanding anything to the contrary contained herein,
the Assignor is not assigning to the Assignee any of its right, title and
interest in, to and under the Servicing Agreement with respect to any other
mortgage loan other than the Assigned Loans. Except as is otherwise
expressly provided herein, the Assignor makes no representations, warranties
or
covenants to the Assignee and the Assignee acknowledges that the Assignor has
no
obligations to the Assignee under the terms of the Servicing Agreement or
otherwise relating to the transaction contemplated herein (including, but not
limited to, any obligation to indemnify the Assignee).
The
Assignor acknowledges and agrees
that upon execution of this AAR Agreement, with respect to the Assigned Loans,
the Assignee shall become the “Owner” under the Servicing Agreement, and all
representations, warranties and covenants by the “Servicer” to the “Owner” under
the Servicing Agreement including, but not limited to, the rights to receive
indemnification, shall accrue to the Assignee by virtue of this AAR
Agreement.
Representations,
Warranties and Covenants
2. The
Assignor warrants and represents to, and covenants with, the Assignee and the
Company as of the date hereof that:
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a.
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Attached
hereto as Attachment 2 is a true and correct copy of the Servicing
Agreement, which Servicing Agreement is in full force and effect
as of the
date hereof and the provisions of which have not been waived, amended
or
modified in any respect, nor has any notice of termination been given
thereunder;
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b.
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The
Assignor was the lawful owner of the Assigned Loans with full right
to
transfer the Assigned Loans and any and all of its interests, rights
and
obligations under the Servicing Agreement they relate to the Assigned
Loans, free and clear from any and all claims and encumbrances; and
upon
the transfer of the Assigned Loans to the Assignee as contemplated
herein,
the Assignee shall have good title to each and every Assigned Loan,
as
well as any and all of the Assignee’s interests, rights and obligations
under the Servicing Agreement as they relate to the Assigned Loans,
free
and clear of any and all liens, claims and
encumbrances;
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c.
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There
are no offsets, counterclaims or other defenses available to the
Company
with respect to the Servicing
Agreement;
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d.
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The
Assignor has no knowledge of, and has not received notice of, any
waivers
under, or any modification of, any Assigned
Loan;
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e.
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The
Assignor is duly organized, validly existing and in good standing
under
the laws of the jurisdiction of its incorporation, and has all requisite
power and authority to acquire, own and sell the Assigned
Loans;
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f.
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The
Assignor has full corporate power and authority to execute, deliver
and
perform its obligations under this AAR Agreement, and to consummate
the
transactions set forth herein. The consummation of the transactions
contemplated by this AAR Agreement is in the ordinary course of the
Assignor’s business and will not conflict with, or result in a breach of,
any of the terms, conditions or provisions of the Assignor’s charter or
by-laws or any legal restriction, or any material agreement or instrument
to which the Assignor is now a party or by which it is bound, or
result in
the violation of any law, rule, regulation, order, judgment or decree
to
which the Assignor or its property is subject. The execution, delivery
and
performance by the Assignor of this AAR Agreement and the consummation
by
it of the transactions contemplated hereby, have been duly authorized
by
all necessary corporate action on part of the Assignor. This AAR
Agreement
has been duly executed and delivered by the Assignor and, upon the
due
authorization, execution and delivery by the Assignee and the parties
hereto, will constitute the valid and legally binding obligation
of the
Assignor enforceable against the Assignor in accordance with its
terms
except as enforceability may be limited by bankruptcy, reorganization,
insolvency, moratorium or other similar laws now or hereafter in
effect
relating to creditors’ rights generally, and by general principles of
equity regardless of whether enforceability is considered in a proceeding
in equity or at law;
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g.
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No
consent, approval, order or authorization of, or declaration, filing
or
registration with, any governmental entity is required to be obtained
or
made by the Assignor in connection with the execution, delivery or
performance by the Assignor of this AAR Agreement, or the consummation
by
it of the transactions contemplated hereby. Neither the Assignor
nor
anyone acting on its behalf has offered, transferred, pledged, sold
or
otherwise disposed of the Assigned Loans or any interest in the Assigned
Loans, or solicited any offer to buy or accept a transfer, pledge
or other
disposition of the Assigned Loans, or any interest in the Assigned
Loans
or otherwise approached or negotiated with respect to the Assigned
Loans,
or any interest in the Assigned Loans with any Person in any manner,
or
made any general solicitation by means of general advertising or
in any
other manner, or taken any other action which would constitute a
distribution of the Assigned Loans under the Securities Act of 1933,
as
amended (the “1933 Act”) or which would render the disposition of the
Assigned Loans a violation of Section 5 of the 1933 Act or require
registration pursuant thereto; and
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h.
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There
is no action, suit, proceeding, investigation or litigation pending
or, to
the Assignor's knowledge, threatened, which either in any instance
or in
the aggregate, if determined adversely to the Assignor, would adversely
affect the Assignor's execution or delivery of, or the enforceability
of,
this AAR Agreement, or the Assignor's ability to perform its obligations
under this AAR Agreement.
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3. The
Assignee warrants and represents to, and covenants with, the Assignor and the
Company as of the date hereof that:
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a.
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The
Assignee is duly organized, validly existing and in good standing
under
the laws of the jurisdiction of its organization and has all requisite
power and authority to hold the Assigned Loans as trustee on behalf
of the
holders of Prime Mortgage Trust, Mortgage Pass-Through Certificates,
Series 2007-1;
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b.
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The
Assignee has full corporate power and authority to execute, deliver
and
perform its obligations under this AAR Agreement, and to consummate
the
transactions set forth herein. The consummation of the transactions
contemplated by this AAR Agreement is in the ordinary course of the
Assignee’s business and will not conflict with, or result in a breach of,
any of the terms, conditions or provisions of the Assignee’s charter or
by-laws or any legal restriction, or any material agreement or instrument
to which the Assignee is now a party or by which it is bound, or
result in
the violation of any law, rule, regulation, order, judgment or decree
to
which the Assignee or its property is subject. The execution, delivery
and
performance by the Assignee of this AAR Agreement and the consummation
by
it of the transactions contemplated hereby, have been duly authorized
by
all necessary corporate action on part of the Assignee. This AAR
Agreement
has been duly executed and delivered by the Assignee and, upon the
due
authorization, execution and delivery by the Assignor and the parties
hereto, will constitute the valid and legally binding obligation
of the
Assignee enforceable against the Assignee in accordance with its
terms
except as enforceability may be limited by bankruptcy, reorganization,
insolvency, moratorium or other similar laws now or hereafter in
effect
relating to creditors’ rights generally, and by general principles of
equity regardless of whether enforceability is considered in a proceeding
in equity or at law;
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c.
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No
consent, approval, order or authorization of, or declaration, filing
or
registration with, any governmental entity is required to be obtained
or
made by the Assignee in connection with the execution, delivery or
performance by the Assignee of this AAR Agreement, or the consummation
by
it of the transactions contemplated
hereby;
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d.
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There
is no action, suit, proceeding, investigation or litigation pending
or, to
the Assignee's knowledge, threatened, which either in any instance
or in
the aggregate, if determined adversely to the Assignee, would adversely
affect the Assignee's execution or delivery of, or the enforceability
of,
this AAR Agreement, or the Assignee's ability to perform its obligations
under this AAR Agreement; and
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e.
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The
Assignee assumes for the benefit of each of Assignor and Company
all of
the Assignor’s rights as “Owner” under the Servicing Agreement but solely
with respect to the Assigned Loans.
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4. Company
warrants and represents to, and covenants with, the Assignee and the Assignor,
as of the date hereof, that:
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a.
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Attached
hereto as Attachment 2 is a true and accurate copy of the Servicing
Agreement, which agreement is in full force and effect as of the
date
hereof and the provisions of which have not been waived, amended
or
modified in any respect, nor has any notice of termination been given
thereunder;
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b.
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The
Company is duly organized, validly existing and in good standing
under the
laws of the jurisdiction of its incorporation, and has all requisite
power
and authority to service the Assigned Loans and otherwise to perform
its
obligations under the Servicing
Agreement;
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c.
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The
Company has full corporate power and authority to execute, deliver
and
perform its obligations under this AAR Agreement, and to consummate
the
transactions set forth herein. The consummation of the transactions
contemplated by this AAR Agreement is in the ordinary course of the
Company’s business and will not conflict with, or result in a breach of,
any of the terms, conditions or provisions of the Company’s charter or
by-laws or any legal restriction, or any material agreement or instrument
to which the Company is now a party or by which it is bound, or result
in
the violation of any law, rule, regulation, order, judgment or decree
to
which the Company or its property is subject. The execution, delivery
and
performance by the Company of this AAR Agreement and the consummation
by
it of the transactions contemplated hereby, have been duly authorized
by
all necessary corporate action on part of the Company. This AAR Agreement
has been duly executed and delivered by the Company, and, upon the
due
authorization, execution and delivery by the Assignor and the Assignee,
will constitute the valid and legally binding obligation of the Company,
enforceable against the Company in accordance with its terms except
as
enforceability may be limited by bankruptcy, reorganization, insolvency,
moratorium or other similar laws now or hereafter in effect relating
to
creditors’ rights generally, and by general principles of equity
regardless of whether enforceability is considered in a proceeding
in
equity or at law;
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d.
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No
consent, approval, order or authorization of, or declaration, filing
or
registration with, any governmental entity is required to be obtained
or
made by the Company in connection with the execution, delivery or
performance by the Company of this AAR Agreement, or the consummation
by
it of the transactions contemplated
hereby;
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e.
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The
Company shall establish a Custodial Account and an Escrow Account
under
the Servicing Agreement in favor of the Assignee with respect to
the
Assigned Loans separate from the Custodial Account and Escrow Account
previously established under the Servicing Agreement in favor of
the
Assignor;
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f.
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Pursuant
to Section 10.02 of the Servicing Agreement, the Company hereby restates
the representations and warranties set forth in Article III of the
Servicing Agreement with respect to the Company and/or the Assigned
Loans;
and
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g.
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Neither
this AAR Agreement nor any certification, statement, report or other
agreement, document or instrument furnished or to be furnished by
the
Company pursuant to this AAR Agreement contains or will contain any
materially untrue statement of fact or omits or will omit to state
a fact
necessary to make the statements contained therein not
misleading.
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5. The
Company warrants and represents to, and covenants with the Assignor as of the
date hereof:
(a) The
Company is not aware and has not received notice that any default, early
amortization or other performance triggering event has occurred as to any other
securitization due to any act or failure to act of the Company;
(b) No
material noncompliance with the applicable servicing criteria with respect
to
other securitizations of residential mortgage loans involving the Company as
servicer has been disclosed or reported by the Company;
(c) The
Company has not been terminated as servicer in a residential mortgage loan
securitization, either due to a servicing default or to application of a
servicing performance test or trigger;
(d) No
material changes to the Company’s policies or procedures with respect to the
servicing function it will perform under the Servicing Agreement and this AAR
Agreement for mortgage loans of a type similar to the Assigned Loans have
occurred during the three-year period immediately preceding the date
hereof;
(e) There
are
no aspects of the Company’s financial condition that could have a material
adverse effect on the performance by the Company of its servicing obligations
under the Servicing Agreement and this AAR Agreement;
(f) There
are
no material legal or governmental proceedings pending (or known to be
contemplated) against the Company, any Subservicer or any third-party
originator; and
(g) There
are
no affiliations, relationships or transactions relating to the Company or any
Subservicer with respect to this Securitization Transaction and any party
thereto of a type described in Item 1119 of Regulation AB.
Notwithstanding
anything to the
contrary in the Agreement, the Company shall (or shall cause any Third-Party
Originator to) (i) immediately notify the Assignor and XXXX XX in writing of
(A)
legal proceedings pending against the Company, or proceedings known to be
contemplated by governmental authorities against the Company which in the
judgment of the Company would be, in each case, material to purchasers of
securities backed by the Assigned Loans, (B) any affiliations or relationships
of the type described in Item 1119(b) of Regulation AB that develop following
the date hereof between the Company and any of the above listed parties or
other
parties identified in writing by the Assignor or XXXX XX with respect to the
Securitization Transaction and (ii) provide to the Assignor and XXXX XX a
description of such proceedings, affiliations or relationships
6. The
Assignor hereby agrees to indemnify and hold the Assignee (and its successors
and assigns) harmless against any and all claims, losses, penalties, fines,
forfeitures, legal fees and related costs, judgments, and any other costs,
fees
and expenses that the Assignee (and its successors and assigns) may sustain
in
any way related to any breach of the representations or warranties of the
Assignor set forth in this AAR Agreement or the breach of any covenant or
condition contained herein.
Recognition
of Assignee
7. From
and after the date hereof, the
Company shall recognize the Assignee as owner of the Assigned Loans, and
acknowledges that the Assigned Loans will be part of a REMIC, and will service
the Assigned Loans in accordance with the Servicing Agreement but in no event
in
a manner that would (i) cause any REMIC to fail to qualify as a REMIC or (ii)
result in the imposition of a tax upon any REMIC (including but not limited
to
the tax on prohibited transactions as defined in Section 860F(a)(2) of the
Code
and the tax on contributions to a REMIC set forth in Section 860G(d) of the
Code). It is the intention of the Assignor, the Company and the Assignee that
this AAR Agreement shall be binding upon and for the benefit of the respective
successors and assigns of the parties hereto. Neither the Company nor the
Assignor shall amend or agree to amend, modify, waiver, or otherwise alter
any
of the terms or provisions of the Servicing Agreement which amendment,
modification, waiver or other alteration would in any way affect the Assigned
Loans without the prior written consent of the Assignee.
8. The
Company shall prepare for and
deliver to the Assignee and EMC Mortgage Corporation, as master servicer (in
such capacity, the “Master Servicer”) a statement with respect to each mortgaged
property acquired through foreclosure or deed-in-lieu of foreclosure in
connection with a defaulted Assigned Loan (“REO Property”) that has been rented
showing the aggregate rental income received and all expenses incurred in
connection with the management and maintenance of such REO Property at such
times as is necessary to enable the Assignee to comply with the reporting
requirements of the REMIC provisions of the Code. The net monthly
rental income, if any, from such REO Property shall be deposited in the related
collection account no later than the close of business on each determination
date. The Company shall perform, or cause to be performed, the tax
reporting and withholding related to foreclosures, abandonments and cancellation
of indebtedness income as specified by Sections 1445, 6050J and 6050P of the
Code by preparing and filing such tax and information returns, as may be
required. In the event that Prime Mortgage Trust, Mortgage
Pass-Through Certificates, Series 2007-1 acquires any REO Property as aforesaid
or otherwise in connection with a default or default becoming reasonably
foreseeable on an Assigned Loan, the Company shall cause such REO Property
to be
disposed prior to three years after its acquisition by Prime Mortgage Trust,
Mortgage Pass-Through Certificates, Series 2007-1 or, at the expense of Prime
Mortgage Trust, Mortgage Pass-Through Certificates, Series 2007-1, request
more
than 60 days prior to the day on which such three-year period would otherwise
expire, an extension of the three-year grace period unless the Assignee shall
have been supplied with an opinion of counsel addressed to the Assignee rendered
by nationally recognized tax counsel specializing in such matters (such opinion
not to be an expense of the Assignee) to the effect that the holding by Prime
Mortgage Trust, Mortgage Pass-Through Certificates, Series 2007-1 of such REO
Property subsequent to such three-year period will not result in the imposition
of taxes on “prohibited transactions” of any REMIC as defined in Section 860F of
the Code or cause any REMIC to fail to qualify as a REMIC, in which case Prime
Mortgage Trust, Mortgage Pass-Through Certificates, Series 2007-1 may continue
to hold such REO Property (subject to any conditions contained in such opinion
of counsel). Notwithstanding any other provision of the Servicing Agreement,
no
REO Property acquired by Prime Mortgage Trust, Mortgage Pass-Through
Certificates, Series 2007-1 shall be rented (or allowed to continue to be
rented) or otherwise used for the production of income by or on behalf of Prime
Mortgage Trust, Mortgage Pass-Through Certificates, Series 2007-1 in such a
manner or pursuant to any terms that would (i) cause such REO Property to fail
to qualify as “foreclosure property” within the meaning of Section 860G(a)(8) of
the Code or (ii) subject any REMIC to the imposition of any federal, state
or
local income taxes on the income earned from such REO Property under Section
860G(c) of the Code or otherwise, unless the Company has agreed to indemnify
and
hold harmless Prime Mortgage Trust, Mortgage Pass-Through Certificates, Series
2007-1 with respect to the imposition of any such taxes.
9. Notwithstanding
any term hereof to the contrary, the execution and delivery of this AAR
Agreement by the Assignee is solely in its capacity as trustee for Prime
Mortgage Trust, Mortgage Pass-Through Certificates, Series 2007-1 and not
individually, and any recourse against the Assignee in respect of any
obligations it may have under or pursuant to the terms of this AAR Agreement
shall be limited solely to the assets it may hold as trustee of Prime Mortgage
Trust, Mortgage Pass-Through Certificates, Series 2007-1.
Miscellaneous
10. All
demands, notices and communications related to the Assigned Loans, the Servicing
Agreement and this AAR Agreement shall be in writing and shall be deemed to
have
been duly given if personally delivered at or mailed by registered mail, postage
prepaid, as follows:
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a.
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In
the case of the Company,
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EMC
Mortgage Corporation
0000
Xxxx Xxxxx Xxxxx
Xxxxxxxxxx,
XX 00000-0000
Attention:
Xxxxxxxx
Xxxxx
Facsimile:
(000) 000-0000
Email:
xxxxxx@xxxx.xxx
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b.
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In
the case of the Assignor,
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Structured
Asset Mortgage Investments
II Inc.
000
Xxxxxxx Xxxxxx,
Xxx
Xxxx, Xxx Xxxx 00000
Attention: Xxxxx
XxXxxxxx
Telecopier
No.: (000)
000-0000
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c.
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In
the case of the Assignee,
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U.S.
Bank
National Association,
as
Trustee
Xxx
Xxxxxxx Xxxxxx, 0xx Xxxxx
Xxxxxx,
Xxxxxxxxxxxxx 00000
Attention:
Corporate Trust Services, PRIME 2007-1
Telecopier
No.: (000) 000-0000
11. The
Company hereby acknowledges that EMC Mortgage Corporation has been appointed
as
the master servicer of the Assigned Loans pursuant to the Pooling and Servicing
Agreement, dated as of March 1, 2007, among the Assignor, the Assignee and
the
Company, as seller and master servicer, and therefor has the right to enforce
all obligations of the Company, as they relate to the Assigned Loans, under
the
Servicing Agreement. Such right will include, without limitation, the
right to terminate the Company under the Servicing Agreement upon the occurrence
of an event of default thereunder, the right to receive all remittances required
to be made by the Company under the Servicing Agreement, the right to receive
all monthly reports and other data required to be delivered by the Company
under
the Servicing Agreement, the right to examine the books and records of the
Company, indemnification rights, and the right to exercise certain rights of
consent and approval relating to actions taken by the Company. The
Company shall make all distributions under the Servicing Agreement, as they
relate to the Assigned Loans, to the Master Servicer by wire transfer of
immediately available funds to:
EMC
Master Servicing Remittances
Bank: Chase
Bank of Texas
Branch: Irving,
Texas
Account
Name: EMC Mortgage Corporation
ABA
#
000000000
ACCOUNT
#
000000709377717
Reference:
M/S Remittance March 1, 2007 Remit for EMC Mortgage Corporation
Attention: LSBO
Group-MS
and
the
Company shall deliver all reports required to be delivered under the Servicing
Agreement, as they relate to the Assigned Loans, to the Assignee at the address
set forth in Section 10 herein and to the Master Servicer at:
EMC Mortgage Corporation
0000
Xxxx Xxxxx Xxxxx
Xxxxxxxxxx,
XX 00000-0000
Attention:
Xxxxxxxx Xxxxx
Facsimile:
(000) 000-0000
Email:
xxxxxx@xxxx.xxx
12. THIS
AAR
AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW
YORK, WITHOUT REGARD TO CONFLICTS OF LAW PRINCIPLES, AND THE OBLIGATIONS, RIGHTS
AND REMEDIES OF THE PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH
SUCH LAWS.
13. No
term
or provision of this AAR Agreement may be waived or modified unless such waiver
or modification is in writing and signed by the party against whom such waiver
or modification is sought to be enforced.
14. This
AAR
Agreement shall inure to the benefit of the successors and assigns of the
parties hereto. Any entity into which the Assignor, the Assignee or the Company
may be merged or consolidated shall, without the requirement for any further
writing, be deemed the Assignor, the Assignee or the Company, respectively,
hereunder.
15. This
AAR
Agreement shall survive the conveyance of the Assigned Loans, the assignments
of
the Servicing Agreement to the extent of the Assigned Loans by the Assignor
to
the Assignee and the termination of the Servicing Agreement.
16. This
AAR
Agreement may be executed simultaneously in any number of counterparts. Each
counterpart shall be deemed to be an original and all such counterparts shall
constitute one and the same instrument.
17. In
the
event that any provision of this AAR Agreement conflicts with any provision
of
the Servicing Agreement with respect to the Assigned Loans, the terms of this
AAR Agreement shall control.
IN
WITNESS WHEREOF, the parties hereto have executed this AAR Agreement on the
date
first above written.
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STRUCTURED
ASSET MORTGAGE INVESTMENTS
II INC.,
the
Assignor
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U.S.
BANK NATIONAL ASSOCIATION, not individually but solely as trustee
for the
holders of Prime Mortgage Trust, Mortgage Pass-Through Certificates,
Series 2007-1,
the
Assignee
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By:
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By:
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||||||||||||
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Name:
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Xxxxx Xxxxxxxxxxx |
Name:
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||||||||||||
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Title:
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Vice President |
Title:
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||||||||||||
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EMC
MORTGAGE CORPORATION,
the
Company
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By:
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|||||||||||||
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Name:
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||||||||||||||
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Title:
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||||||||||||||
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Acknowledged
and Agreed:
EMC
MORTGAGE CORPORATION,
the
Master Servicer
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||||||||||||||
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By:
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||||||||||||
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Name:
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||||||||||||||
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Title:
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||||||||||||||
Attachment
I
Assigned
Loans
Attachment
II
Servicing
Agreement
