Exhibit 10.4
Execution Copy
PERFORMANCE
GUARANTY
This Performance Guaranty (this
“Guaranty”), dated as of February 28, 2007, is
executed by American Home Mortgage Holdings, Inc., a Delaware
corporation, and American Home Mortgage Investment Corp., a
Maryland corporation (each, a “Performance Guarantor”
and together, the “Performance Guarantors”), in favor
of ABN AMRO Bank N.V. (“ABN AMRO”), as agent for the
Purchasers, Group Agents and other Indemnified Parties under the
Repurchase Agreement referred to below (the
“Agent”).
WHEREAS, American Home Mortgage
Corp., American Home Mortgage Acceptance, Inc., American Home
Mortgage Investment Corp., and American Home Mortgage Servicing,
Inc., (collectively, the “ Sellers ” and each a
“ Seller ”) have entered into a Master
Repurchase Agreement (the “ Repurchase Agreement
”) dated as of February 28, 2007 with the Agent, as
Buyer pursuant to which the Sellers, subject to the terms and
conditions therein and in the Letter Agreement, may sell certain
Mortgage Loans and related property to the Agent for the benefit of
the Purchasers and pursuant to the Letter Agreement American Home
Mortgage Servicing, Inc. (the “ Servicer ”) has
agreed to perform the duties and obligations as
“Servicer” thereunder.
WHEREAS, as an inducement for the
Purchasers to enter into the Letter Agreement and the Transactions
contemplated by the Repurchase Agreement, the Performance
Guarantors have agreed to guaranty the due and punctual performance
of the Sellers and the Servicer under the Repurchase Agreement, the
Letter Agreement and the other Transaction Documents;
WHEREAS, it is a condition precedent
to the Purchasers agreeing to enter into the Letter Agreement and
the Transactions contemplated by the Repurchase Agreement that the
Performance Guarantors execute and deliver to the Agent a
performance guaranty substantially in the form hereof;
and
WHEREAS, the Performance Guarantors
wish to guaranty the due and punctual performance of the
Sellers’ obligations as “Sellers” and of the
Servicer’s obligations as “Servicer” to the
Agent, the Group Agents and the Purchasers under or in respect of
the Repurchase Agreement as provided herein, and the Performance
Guarantors, as the owners, directly or indirectly, of all of the
outstanding shares of capital stock of the Sellers and of the
Servicer, will derive substantial benefit from the transactions
contemplated under the Repurchase Agreement and the other
Transaction Documents;
NOW, THEREFORE, each of the
Performance Guarantors hereby agrees with the Agent for the benefit
of itself, each Group Agent, each Purchaser and each Indemnified
Party as follows:
Section 1.
Definitions.
As used herein:
“ Bankruptcy Code
” means the United States Bankruptcy Code, 11 U.S.C. Sections
101 et seq., as amended.
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“ Obligations ”
means, collectively, all Seller Obligations of each Seller and all
Servicer Obligations.
“ Seller Obligations
” means collectively, all covenants, agreements, terms,
conditions and indemnities to be performed and observed by a Seller
solely in its capacity as a “Seller” under and pursuant
to the Repurchase Agreement, the Letter Agreement, each other
Transaction Document and each other document executed and delivered
by such Seller as a “Seller” pursuant to the Repurchase
Agreement or the Letter Agreement, including, without limitation,
the due and punctual payment of all sums which are or may become
due and owing by such Seller as a “Seller” under the
Repurchase Agreement, the Letter Agreement or any other Transaction
Document, whether for the payment of any Repurchase Price, the
deposit of collections received by it or for fees, expenses
(including counsel fees), indemnified amounts or otherwise, whether
upon any termination or for any other reason, including any
renewals, extensions and modifications thereof.
“ Servicer Obligations
” means collectively, all covenants, agreements, terms,
conditions and indemnities to be performed and observed by AHMS
solely in its capacity as “Servicer” under and pursuant
to the Repurchase Agreement, the Letter Agreement, each other
Transaction Document and each other document executed and delivered
by the Servicer as “Servicer” pursuant to the
Repurchase Agreement or the Letter Agreement, including, without
limitation, the due and punctual payment of all sums which are or
may become due and owing by the Servicer as “Servicer”
under the Repurchase Agreement, the Letter Agreement or any other
Transaction Document, whether for the deposit of collections
received by it or for fees, expenses (including counsel fees),
indemnified amounts or otherwise, whether upon any termination or
for any other reason, including any renewals, extensions and
modifications thereof.
All capitalized terms used herein,
and not otherwise herein defined shall have their respective
meanings as defined in the Repurchase Agreement or the Letter
Agreement, as applicable.
Section 2. Guaranty of
Performance of Obligations . Each of the Performance
Guarantors, jointly and severally, hereby unconditionally
guarantees to the Agent, the Group Agents, the Purchasers and each
other Indemnified Party, the full and punctual payment and
performance by each Seller of the Seller Obligations and by the
Servicer of the Servicer Obligations.
This Guaranty is an absolute,
unconditional and continuing guaranty of the full and punctual
performance of all of the Obligations and is in no way conditioned
upon any requirement that the Agent, the Group Agents or the
Purchasers first take any action against any Seller or the Servicer
with respect to the Obligations or attempt to collect any of the
amounts owing by any Seller or the Servicer to the Purchasers, the
Group Agents or the Agent from any Seller or the Servicer or resort
to any collateral security, any balance of any deposit account or
credit on the books of any Purchasers in favor of any Seller or the
Servicer, any guarantor of the Obligations or any other Person.
Should any Seller or the Servicer default in the payment or
performance of any of the Obligations, the Agent or the Required
Group Agents may cause the
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immediate performance by each of the Performance
Guarantors of the Obligations and cause any payment Obligations to
become forthwith due and payable to the Agent, the Group Agents and
the Purchasers, without demand or notice of any nature (other than
as expressly provided herein), all of which are expressly waived by
each of the Performance Guarantors.
Each of the Performance
Guarantor’s liability under this Guaranty shall be absolute
and unconditional irrespective of (i) any lack of validity or
enforceability of the Repurchase Agreement, the Letter Agreement or
any other document executed in connection therewith or delivered
thereunder, (ii) any change in the time, manner or place of
payment of, or in any other term of, all or any of the Obligations,
or any other amendment or waiver of or any consent to departure
from the Repurchase Agreement, the Letter Agreement or any other
document executed in connection therewith or delivered thereunder,
(iii) any taking, exchange, release or non-perfection of any
collateral, or any taking, release or amendment or waiver of or
consent to departure from any other guaranty, for all or any of the
Obligations, (iv) any law, regulation or order of any
jurisdiction affecting any term of all or any Obligations or the
rights of the Agent, any Group Agent, any of the Purchasers or any
other Indemnified Party, (v) any manner of application of
collateral, or proceeds thereof, to all or any of the Obligations,
or any manner of sale or other disposition of any collateral for
all or any of the Obligations or any other assets of any Seller or
the Servicer, (vi) any change, restructuring or termination of
the corporate structure or existence of any Seller or the Servicer,
or (vii) any other circumstance which might otherwise
constitute a defense available to, or a discharge of, any Seller,
the Servicer or a guarantor. In the event that performance of any
of the Obligations is stayed upon the insolvency, bankruptcy or
reorganization of any Seller or the Servicer, or for any other
reason, all such Obligations shall be immediately performed by the
Performance Guarantors.
Section 3. Performance
Guarantors’ Further Agreements to Pay . Each of the
Performance Guarantors further agrees, jointly and severally, in
the event the Performance Guarantors fail to perform their
obligations under this Guaranty, to pay to the Agent, the Group
Agents, the Purchasers and any other Indemnified Party, forthwith
upon demand all reasonable costs and expenses (including court
costs and legal expenses) incurred or expended by the Agent, the
Group Agents, the Purchasers or any Indemnified Party in connection
with the enforcement of this Guaranty.
Section 4. Waivers by
Performance Guarantors; Agent’s, Group Agents’ and
Purchasers’ Freedom to Act . Each of the Performance
Guarantors waives notice of (a) acceptance of this Guaranty,
(b) any action taken or omitted by the Agent, any Group Agent,
any Purchaser or any Indemnified Party in reliance on this
Guaranty, and (c) any requirement that the Agent, the Group
Agents, the Purchasers or any Indemnified Party be diligent or
prompt in making demands under this Guaranty, giving notice of any
Incipient Event of Default or Event of Default, default or omission
by any Seller or the Servicer or asserting any other rights of the
Agent, any Group Agent, any Purchaser or any Indemnified Party
under this Guaranty. To the maximum extent permitted by applicable
law, each of the Performance Guarantors also irrevocably waives all
defenses that at any time may be available in respect of the
Obligations by virtue of any statute of limitations, valuation,
stay, moratorium law or other similar law now or thereafter in
effect.
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The Agent shall be at liberty, upon
its own initiative or at the request of the Required Group Agents,
without giving notice to or obtaining the assent of the Performance
Guarantors and without relieving either of the Performance
Guarantors of any liability under this Guaranty, to deal with the
Sellers and the Servicer and with each other party who now is or
after the date hereof becomes liable in any manner for any of the
Obligations, in such manner as the Agent in its sole discretion
deems fit or the Required Group Agents in their sole discretion
deem fit, and to this end each of the Performance Guarantors agrees
that the validity and enforceability of this Guaranty, including
without limitation, the provisions of Section 8 hereof, shall
not be impaired or affected by any of the following: (a) any
extension, modification or renewal of, or indulgence with respect
to, or substitutions for, the Obligations or any part thereof or
any agreement relating thereto at any time; (b) any failure or
omission to enforce any right, power or remedy with respect to the
Obligations or any part thereof or any agreement relating thereto,
or any collateral securing the Obligations or any part thereof;
(c) any waiver of any right, power or remedy or of any
Incipient Event of Default or Event of Default or default with
respect to the Obligations or any part thereof or any agreement
relating thereto; (d) any release, surrender, compromise,
settlement, waiver, subordination or modification, with or without
consideration, of any other obligation of any person or entity with
respect to the Obligations or any part thereof; (e) the
enforceability or validity of the Obligations or any part thereof
or the genuineness, enforceability or validity of any agreement
relating thereto or with respect to the Obligations or any part
thereof; (f) the application of payments received from any
source to the payment of any payment Obligations of any Seller or
of the Servicer, any part thereof or amounts which are not covered
by this Guaranty even though the Agent, the Group Agents or the
Purchasers might lawfully have elected to apply such payments to
any part or all of the payment Obligations of any Seller or the
Servicer or to amounts which are not covered by this Guaranty;
(g) the existence of any claim, setoff or other rights which
either of the Performance Guarantors may have at any time against
any Seller or the Servicer in connection herewith or any unrelated
transaction; (h) any assignment or transfer of the Obligations
or any part thereof; or (i) any failure on the part of any
Seller or the Servicer to perform or comply with any term of the
Repurchase Agreement or any other document executed in connection
therewith or delivered thereunder, all whether or not the
Performance Guarantors shall have had notice or knowledge of any
act or omission referred to in the foregoing clauses
(a) through (i) of this Section.
Section 5. Unenforceability
of Obligations Against the Sellers or the Servicer .
Notwithstanding (a) any change of ownership of any Seller or
the Servicer or the insolvency, bankruptcy or any other change in
the legal status of any Seller or the Servicer; (b) the change
in or the imposition of any law, decree, regulation or other
governmental act which does or might impair, delay or in any way
affect the validity, enforceability or the payment when due of the
Obligations; (c) the failure of any Seller, the Servicer or
either of the Performance Guarantors to maintain in full force,
validity or effect or to obtain or renew when required all
governmental and other approvals, licenses or consents required in
connection with the Obligations or this Guaranty, or to take any
other action required in connection with the performance of all
obligations pursuant to the Obligations or this Guaranty; or
(d) if any of the moneys included in the Obligations have
become unrecoverable from any Seller or the Servicer for any reason
other than final payment in full of the payment Obligations in
accordance with their terms, this Guaranty shall nevertheless be
binding on each of the Per
