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Exhibit
10.16
GUARANTEE
OF
ALESCO FINANCIAL
INC.
THIS GUARANTEE (the “
Guarantee ”), dated as of June 29, 2007, is made
and entered into upon the terms hereinafter set forth, by ALESCO
FINANCIAL INC., a Maryland corporation (the “
Guarantor ”), for the benefit of Citibank, N.A. as
indenture trustee (on behalf of the Noteholders) (the “
Indenture Trustee ”) pursuant to that certain Sale and
Servicing Agreement, dated as of July 29, 2007, among
Structured Asset Mortgage Investments II. Inc., as depositor, Bear
Stearns ARM Trust 2007-2, as issuing entity, Wells Fargo Bank,
N.A., as master servicer and securities administrator, and Alesco
Loan Holdings Trust, as mortgage loan seller.
RECITALS:
1.
Pursuant to the Mortgage Loan Purchase
Agreement, dated as of June 29, 2007, by and between
Structured Asset Mortgage Investments II Inc., as depositor (the
“ Depositor ”) and Alesco Loan Holdings Trust,
as mortgage loan seller (the “ Mortgage Loan Seller
”) (the “ MLPA ”), the Mortgage Loan
Seller has sold certain mortgage loans (the “ Mortgage
Loans ”) and related assets to the Depositor, which has
in turn sold them to the Issuing Entity.
In addition, the Mortgage
Loan Seller has made certain representations and warranties with
respect to the Mortgage Loans, and has agreed to cure, repurchase
or substitute each Mortgage Loan that is determined to have
breached a representation or warranty made by it with respect
thereto in accordance with Section 7 of the MLPA. Pursuant to
Section 13 of the MLPA, the Mortgage Loan Seller has agreed to
indemnify and hold harmless the Depositor and its directors,
officers and controlling persons from and against any loss, claim,
damage or liability or action arises out of, or is based upon any
untrue statement of a material fact contained in the Mortgage Loan
Seller’s Information (as defined therein). Pursuant to
Section 7.02 of the Amended and Restated Trust Agreement,
dated as of June 29, 2007, among the Depositor, the Owner
Trustee and the Securities Administrator (the “ Trust
Agreement ”), the Mortgage Loan Seller has agreed to
indemnify the Indemnified Parties (as defined therein) for Expenses
(as defined therein) for which the Depositor is required to
indemnify the Indemnified Parties (as defined therein) pursuant to
Section 7.02 of the Amended and Restated Trust Agreement,
other than (1) any Expenses required to be covered by the
Master Servicer pursuant to Section 5.03 of the Sale and
Servicing Agreement or (2) and any Expenses actually paid by
the Depositor in accordance with Section 7.02 of the Amended
and Restated Trust Agreement, (each of the obligations in this
paragraph, collectively, the “ Guaranteed Obligations
”).
2.
The Guarantor is the indirect parent
company of the Mortgage Loan Seller and desires to guarantee the
Guaranteed Obligations as provided herein.
NOW, THEREFORE, in
consideration of the foregoing and other good and valuable
consideration, the receipt and sufficiency of which hereby are
acknowledged by the Guarantor, the Guarantor hereby agrees as
follows:
1
AGREEMENT
1.
Guaranty . Guarantor hereby absolutely, unconditionally and
irrevocably guarantees to the Indenture Trustee and the Owner
Trustee the prompt, faithful and full payment of the Guaranteed
Obligations. This Guarantee is a present and continuing guaranty of
payment of the Guaranteed Obligations and not of collectability and
is in no way conditioned upon any attempt of Indenture Trustee or
the Owner Trustee, as the case may be, to enforce any action
against or to collect any of the Guaranteed Obligations from the
Mortgage Loan Seller.
2.
Continuing Guaranty . This Guarantee is intended to be and
shall be construed to be a continuing, absolute and unconditional
guaranty. Guarantor guarantees that the Guaranteed Obligations will
be paid promptly and strictly in accordance with the terms of this
Guarantee. Without limiting the generality of the foregoing,
Guarantor agrees that its obligations hereunder shall not be
released, diminished or impaired by, and waives any rights which it
might otherwise have which relate to any of the following (whether
or not Guarantor has consented thereto or received any notice
thereof):
(a) any extension,
settlement, modification, amendment, compromise, waiver or release
in respect of any Guaranteed Obligations;
(b) any lack of
enforceability of the Guaranteed Obligations or any other agreement
or instrument relating thereto;
(c) any change in the
corporate existence, structure or ownership of the Mortgage Loan
Seller or Guarantor or any insolvency, bankruptcy, reorganization
or other similar proceeding affecting the Mortgage Loan Seller,
Guarantor or Indenture Trustee;
(d) the existence of any
claim, defense, set-off or other rights or remedies which Guarantor
at any time may have against the Mortgage Loan Seller whether in
connection with this Guarantee, the transactions contemplated
hereby or any other transaction;
(e) any grant of any security
or support for the Guaranteed Obligations whenever occurring,
including any pledge of collateral for the Guaranteed Obligations
or any person guaranteeing or otherwise becoming liable for the
payment or performance of the Guaranteed Obligations; or
(f) any impairment of any
security or support for the Guaranteed Obligations, including any
full or partial release, failure to perfect, exchange,
subordination, or waste of any collateral for the Guaranteed
Obligations or any full or partial release of the Mortgage Loan
Seller, any guarantor, or any other person liable for the payment
of the Guaranteed Obligations.
This Guarantee shall continue
to be effective or be reinstated, as the case may be, if any
payment on the Guaranteed Obligations must be refunded for any
reason, including any bankruptcy proceeding. In the event that the
Securities Administrator must refund any payment received on or
against the Guaranteed Obligations, any prior release of or from
this Guarantee shall be without effect, and this Guarantee shall be
reinstated in full force and effect. It is the intention of
Guarantor that the Guarantor’s obligations hereunder shall
not be discharged until all payment of the Guaranteed Obligations
have been finally and irrevocably paid or performed in full and are
no longer subject to being set aside or returned under any law,
rule or regulation.
2
3.
Payment . Whenever any of the Guaranteed Obligations shall
be payable or shall with the passage of time, become payable and at
all times then and thereafter that any such amounts remain unpaid
(for any durat
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