Exhibit 4.3
GMACM HOME EQUITY LOAN TRUST 2007-HE3,
Issuer,
and
THE BANK OF NEW YORK TRUST COMPANY, N.A.,
Indenture Trustee
________________________
INDENTURE
________________________
Dated as of October 26, 2007
GMACM HOME EQUITY LOAN-BACKED TERM NOTES
TABLE OF CONTENTS
Page
ARTICLE I Definitions 2
Section 1.01 Definitions.......................................................................2
Section 1.02 Incorporation by Reference of Trust Indenture Act.................................2
Section 1.03 Rules of Construction.............................................................2
ARTICLE II Original Issuance of Notes............................................................................8
Section 2.01 Form..............................................................................8
Section 2.02 Execution, Authentication and Delivery............................................8
ARTICLE III Covenants 8
Section 3.01 Collection of Payments with Respect to the Mortgage Loans.........................8
Section 3.02 Maintenance of Office or Agency...................................................8
Section 3.03 Money for Payments to Be Held in Trust; Paying Agent..............................8
Section 3.04 Existence.........................................................................8
Section 3.05 Priority of Distributions; Defaulted Interest.....................................8
Section 3.06 Protection of Trust Estate.......................................................11
Section 3.07 Opinions as to Trust Estate......................................................11
Section 3.08 Performance of Obligations; Servicing Agreement..................................11
Section 3.09 Negative Covenants...............................................................11
Section 3.10 Annual Statement as to Compliance................................................12
Section 3.11 Recordation of Assignments.......................................................12
Section 3.12 Representations and Warranties Concerning the Mortgage Loans.....................12
Section 3.13 Assignee of Record of the Mortgage Loans.........................................12
Section 3.14 Servicer as Agent and Bailee of the Indenture Trustee............................14
Section 3.15 Investment Company Act...........................................................14
Section 3.16 Issuer May Consolidate, etc......................................................14
Section 3.17 Successor or Transferee..........................................................16
Section 3.18 No Other Business................................................................16
Section 3.19 No Borrowing.....................................................................16
Section 3.20 Guarantees, Loans, Advances and Other Liabilities................................16
Section 3.21 Capital Expenditures.............................................................16
Section 3.22 Owner Trustee Not Liable for Certificates or Related Documents...................16
Section 3.23 Restricted Payments..............................................................16
Section 3.24 Notice of Events of Default......................................................16
Section 3.25 Further Instruments and Acts.....................................................17
Section 3.26 Statements to Noteholders........................................................17
Section 3.27 [Reserved].......................................................................17
Section 3.28 [Reserved].......................................................................17
Section 3.29 [Reserved].......................................................................17
Section 3.30 Additional Representations of Issuer.............................................17
Section 3.31 Allocation of Losses.............................................................19
ARTICLE IV The Notes; Satisfaction And Discharge Of Indenture...................................................19
Section 4.01 The Notes........................................................................19
Section 4.02 Registration of and Limitations on Transfer and Exchange of
Notes; Appointment of Certificate Registrar......................................19
Section 4.03 Mutilated, Destroyed, Lost or Stolen Notes.......................................20
Section 4.04 Persons Deemed Owners............................................................21
Section 4.05 Cancellation.....................................................................23
Section 4.06 Book-Entry Notes.................................................................23
Section 4.07 Notices to Depository............................................................23
Section 4.08 Definitive Notes.................................................................23
Section 4.09 Tax Treatment....................................................................23
Section 4.10 Satisfaction and Discharge of Indenture..........................................23
Section 4.11 Application of Trust Money.......................................................25
Section 4.12 [Reserved].......................................................................25
Section 4.13 Repayment of Monies Held by Paying Agent.........................................25
Section 4.14 Temporary Notes..................................................................25
ARTICLE V Default And Remedies..................................................................................26
Section 5.01 Events of Default................................................................26
Section 5.02 Acceleration of Maturity; Rescission and Annulment...............................26
Section 5.03 Collection of Indebtedness and Suits for Enforcement by
Indenture Trustee................................................................28
Section 5.04 Remedies; Priorities.............................................................30
Section 5.05 Optional Preservation of the Trust Estate........................................30
Section 5.06 Limitation of Suits..............................................................30
Section 5.07 Unconditional Rights of Noteholders to Receive Principal and
Interest.........................................................................31
Section 5.08 Restoration of Rights and Remedies...............................................31
Section 5.09 Rights and Remedies Cumulative...................................................32
Section 5.10 Delay or Omission Not a Waiver...................................................32
Section 5.11 Control by Noteholders...........................................................32
Section 5.12 Waiver of Past Defaults..........................................................35
Section 5.13 Undertaking for Costs............................................................35
Section 5.14 Waiver of Stay or Extension Laws.................................................35
Section 5.15 Sale of Trust Estate.............................................................35
Section 5.16 Action on Notes..................................................................35
Section 5.17 Performance and Enforcement of Certain Obligations...............................35
ARTICLE VI The Indenture Trustee................................................................................36
Section 6.01 Duties of Indenture Trustee......................................................36
Section 6.02 Rights of Indenture Trustee......................................................39
Section 6.03 Individual Rights of Indenture Trustee...........................................39
Section 6.04 Indenture Trustee's Disclaimer...................................................39
Section 6.05 Notice of Event of Default.......................................................39
Section 6.06 Reports by Indenture Trustee to Noteholders......................................39
Section 6.07 Compensation and Indemnity.......................................................42
Section 6.08 Replacement of Indenture Trustee.................................................42
Section 6.09 Successor Indenture Trustee by Merger............................................42
Section 6.10 Appointment of Co-Indenture Trustee or Separate Indenture
Trustee..........................................................................42
Section 6.11 Eligibility; Disqualification....................................................43
Section 6.12 Preferential Collection of Claims Against Issuer.................................43
Section 6.13 Representations and Warranties...................................................43
Section 6.14 Directions to Indenture Trustee..................................................44
Section 6.15 Indenture Trustee May Own Securities.............................................44
ARTICLE VII Noteholders' Lists and Reports......................................................................44
Section 7.01 Issuer to Furnish Indenture Trustee Names and Addresses of
Noteholders......................................................................44
Section 7.02 Preservation of Information; Communications to Noteholders.......................45
Section 7.03 Reports by Issuer................................................................45
Section 7.04 Reports by Indenture Trustee.....................................................47
Section 7.05 Exchange Act Reporting...........................................................47
ARTICLE VIII Accounts, Disbursements and Releases...............................................................47
Section 8.01 Collection of Money..............................................................47
Section 8.02 Trust Accounts...................................................................47
Section 8.03 Officer's Certificate............................................................47
Section 8.04 Termination Upon Distribution to Noteholders.....................................47
Section 8.05 Release of Trust Estate..........................................................48
Section 8.06 Surrender of Notes Upon Final Payment............................................48
ARTICLE IX Supplemental Indentures..............................................................................48
Section 9.01 Supplemental Indentures Without Consent of Noteholders...........................48
Section 9.02 Supplemental Indentures With Consent of Noteholders..............................52
Section 9.03 Execution of Supplemental Indentures.............................................52
Section 9.04 Effect of Supplemental Indenture.................................................52
Section 9.05 Conformity with Trust Indenture Act..............................................52
Section 9.06 Reference in Notes to Supplemental Indentures....................................52
ARTICLE X Miscellaneous.........................................................................................52
Section 10.01 Compliance Certificates and Opinions, etc........................................52
Section 10.02 Form of Documents Delivered to Indenture Trustee.................................57
Section 10.03 Acts of Noteholders..............................................................57
Section 10.04 Notices, etc., to Indenture Trustee, Issuer and Rating Agencies..................57
Section 10.05 Notices to Noteholders; Waiver...................................................57
Section 10.06 Alternate Payment and Notice Provisions..........................................57
Section 10.07 Conflict with Trust Indenture Act................................................57
Section 10.08 Effect of Headings...............................................................57
Section 10.09 Successors and Assigns...........................................................57
Section 10.10 Severability.....................................................................57
Section 10.11 Benefits of Indenture............................................................57
Section 10.12 Legal Holidays...................................................................57
Section 10.13 GOVERNING LAW....................................................................58
Section 10.14 Counterparts.....................................................................58
Section 10.15 Recording of Indenture...........................................................58
Section 10.16 Issuer Obligation................................................................58
Section 10.17 No Petition......................................................................58
Section 10.18 Inspection.......................................................................67
ARTICLE XI REMIC Provisions.....................................................................................67
Section 11.01 REMIC Administration.............................................................67
Section 11.02 Servicer, REMIC Administrator and Indenture Trustee
Indemnification..................................................................67
Section 11.03 Designation of REMIC(s)..........................................................67
EXHIBITS
Exhibit A - Form of Class A Notes
Exhibit B - Form of Class M Notes
Appendix A - Definitions
RECONCILIATION AND TIE BETWEEN TRUST INDENTURE
ACT OF 1939 AND INDENTURE PROVISIONS*
Trust Indenture
Act Section Indenture Section
310(a)(1)...............................................................................6.11
(a)(2)..................................................................................6.11
(a)(3)..................................................................................6.10
(a)(4)........................................................................Not Applicable
(a)(5)..................................................................................6.11
(b)...............................................................................6.08, 6.11
(c)...........................................................................Not Applicable
311(a)..................................................................................6.12
(b).....................................................................................6.12
(c)...........................................................................Not Applicable
312(a).........................................................................7.01, 7.02(a)
(b)..................................................................................7.02(b)
(c)..................................................................................7.02(c)
313(a)..................................................................................7.04
(b).....................................................................................7.04
(c).......................................................................7.03(a)(iii), 7.04
(d).....................................................................................7.04
314(a).........................................................................3.10, 7.03(a)
(b).....................................................................................3.07
(c)(1).....................................................................8.05(c), 10.01(a)
(c)(2).....................................................................8.05(c), 10.01(a)
(c)(3).......................................................................Not Applicable
(d)(1).....................................................................8.05(c), 10.01(b)
(d)(2).....................................................................8.05(c), 10.01(b)
(d)(3).....................................................................8.05(c), 10.01(b)
(e).................................................................................10.01(a)
315(a)...............................................................................6.01(b)
(b).....................................................................................6.05
(c)..................................................................................6.01(a)
(d)..................................................................................6.01(c)
(d)(1)...............................................................................6.01(c)
(d)(2)...............................................................................6.01(c)
(d)(3)...............................................................................6.01(c)
(e).....................................................................................5.13
316(a)(1)(A)............................................................................5.11
316(a)(1)(B)............................................................................5.12
316(a)(2).....................................................................Not Applicable
316(b)..................................................................................5.07
317(a)(1)...............................................................................5.04
317(a)(2)............................................................................5.03(d)
317(b)...............................................................................3.03(a)
318(a).................................................................................10.07
____________________________
*This reconciliation and tie shall not, for any purpose, be deemed to be part of the within indenture.
This Indenture, dated as of October 26, 2007, is between GMACM Home Equity Loan Trust
2007-HE3, a Delaware statutory trust, as issuer (the "Issuer"), and The Bank of New York Trust
Company, N.A., as indenture trustee (the "Indenture Trustee").
WITNESSETH:
Each party hereto agrees as follows for the benefit of the other party and for the equal and
ratable benefit of the Noteholders of the Issuer's Series 2007-HE3 GMACM Home Equity Loan-Backed Term
Notes (the "Notes").
GRANTING CLAUSE:
The Issuer hereby Grants to the Indenture Trustee on the Closing Date, as trustee for the
benefit of the Noteholders, all of the Issuer's right, title and interest in and to all accounts,
chattel paper, general intangibles, contract rights, payment intangibles, certificates of deposit,
deposit accounts, instruments, documents, letters of credit, money, advices of credit, investment
property, goods and other property consisting of, arising under or related to whether now existing or
hereafter created in any of the following: (a) the Mortgage Loans, and all monies due or to become
due thereunder; (b) the Custodial Account and Note Payment Account, , and all funds on deposit or
credited thereto from time to time; (c) all hazard insurance policies; (d) all present and future
claims, demands, causes and choses in action in respect of any or all of the foregoing and all
payments on or under, and all proceeds of every kind and nature whatsoever in respect of, any or all
of the foregoing and all payments on or under, and all proceeds of every kind and nature whatsoever
in the conversion thereof, voluntary or involuntary, into cash or other liquid property, all cash
proceeds, accounts, accounts receivable, notes, drafts, acceptances, checks, deposit accounts, rights
to payment of any and every kind, and other forms of obligations and receivables, instruments and
other property which at any time constitute all or part of or are included in the proceeds of any of
the foregoing (collectively, the "Trust Estate" or the "Collateral").
The foregoing Grant is made in trust to secure the payment of principal of and interest on,
and any other amounts owing in respect of, the Notes, equally and ratably without prejudice, priority
or distinction, and to secure compliance with the provisions of this Indenture, all as provided in
this Indenture.
The Indenture Trustee, as trustee on behalf of the Noteholders, acknowledges such Xxxxx,
accepts the trust under this Indenture in accordance with the provisions hereof and agrees to perform
its duties as Indenture Trustee as required herein.
ARTICLE I
Definitions
Section 1.01 Definitions. For all purposes of this Indenture, except as otherwise
expressly provided herein or unless the context otherwise requires, capitalized terms not otherwise
defined herein shall have the meanings assigned to such terms in the Definitions attached hereto as
Appendix A, which is incorporated by reference herein. All other capitalized terms used herein shall
have the meanings specified herein.
Section 1.02 Incorporation by Reference of Trust Indenture Act. Whenever this Indenture
refers to a provision of the Trust Indenture Act (the "TIA"), such provision is incorporated by
reference in and made a part of this Indenture. The following TIA terms used in this Indenture have
the following meanings:
"Commission" means the Securities and Exchange Commission.
"indenture securities" means the Notes.
"indenture security holder" means a Noteholder.
"indenture to be qualified" means this Indenture.
"indenture trustee" or "institutional trustee" means the Indenture Trustee.
"obligor" on the indenture securities means the Issuer and any other obligor on the
indenture securities.
All other TIA terms used in this Indenture that are defined by XXX, defined by TIA
reference to another statute or defined by Commission rule have the meaning assigned to them by such
definitions.
Section 1.03 Rules of Construction. Unless the context otherwise requires:
(a) a term has the meaning assigned to it;
(b) an accounting term not otherwise defined has the meaning assigned to it in
accordance with generally accepted accounting principles as in effect from time to time;
(c) "or" includes "and/or";
(d) "including" means "including without limitation";
(e) words in the singular include the plural and words in the plural include
the singular;
(f) the term "proceeds" has the meaning ascribed thereto in the UCC; and
(g) any agreement, instrument or statute defined or referred to herein or in
any instrument or certificate delivered in connection herewith means such agreement, instrument or
statute as from time to time amended, modified or supplemented and includes (in the case of
agreements or instruments) references to all attachments thereto and instruments incorporated
therein; references to a Person are also to its permitted successors and assigns.
ARTICLE II
Original Issuance of Notes
Section 2.01 Form. The Class A Notes, together with the Indenture Trustee's certificate
of authentication, shall be in substantially the form set forth in Exhibit A, and the Class M Notes,
together with the Indenture Trustee's certificate of authentication, shall be in substantially the
form set forth in Exhibit B, and with such appropriate insertions, omissions, substitutions and other
variations as are required or permitted by this Indenture and may have such letters, numbers or other
marks of identification and such legends or endorsements placed thereon as may, consistently
herewith, be determined by the officers executing the Notes, as evidenced by their execution
thereof. Any portion of the text of any Note may be set forth on the reverse thereof, with an
appropriate reference thereto on the face of such Note.
The Notes shall be typewritten, printed, lithographed or engraved or produced by any
combination of these methods, all as determined by the Authorized Officers executing such Notes, as
evidenced by their execution of such Notes.
The terms of the Class A Notes and Class M Notes set forth in Exhibit A and Exhibit B,
respectively, are part of the terms of this Indenture.
Section 2.02 Execution, Authentication and Delivery. The Notes shall be executed on
behalf of the Issuer by any of its Authorized Officers. The signature of any such Authorized Officer
on the Notes may be manual or facsimile.
Notes bearing the manual or facsimile signature of individuals who were at any time
Authorized Officers of the Issuer shall bind the Issuer, notwithstanding that such individuals or any
of them have ceased to hold such offices prior to the authentication and delivery of such Notes or
did not hold such offices at the date of such Notes.
The Indenture Trustee shall upon Issuer Request authenticate and deliver Notes for original
issue in an amount equal to the Initial Aggregate Note Balance. The Class I-A-1, Class I-A-2,
Class II-A-1, Class II-A-2, Class M-1 and Class M-2 Notes shall have initial principal amounts of the
Initial Class I-A-1 Note Balance, Initial Class I-A-2 Note Balance, Initial Class II-A-1 Note
Balance, Initial Class II-A-2 Note Balance, Initial Class M-1 Note Balance and Initial Class M-2 Note
Balance, respectively.
Each Note shall be dated the date of its authentication. The Notes shall be issuable as
registered Book-Entry Notes, and the Notes shall be issuable in minimum denominations of $25,000 and
integral multiples of $1,000 in excess thereof.
No Note shall be entitled to any benefit under this Indenture or be valid or obligatory for
any purpose, unless there appears on such Note a certificate of authentication substantially in the
form provided for herein executed by the Indenture Trustee by the manual signature of one of its
authorized signatories, and such certificate upon any Note shall be conclusive evidence, and the only
evidence, that such Note has been duly authenticated and delivered hereunder.
ARTICLE III
Covenants
Section 3.01 Collection of Payments with Respect to the Mortgage Loans. The Indenture
Trustee shall establish and maintain with itself the Note Payment Account in which the Indenture
Trustee shall, subject to the terms of this paragraph, deposit, on the same day as it is received
from the Servicer, each remittance received by the Indenture Trustee with respect to the Mortgage
Loans. The Indenture Trustee shall make all payments of principal of and interest on the Notes,
subject to Section 3.03 as provided in Section 3.05 herein from monies on deposit in the Note Payment
Account.
Section 3.02 Maintenance of Office or Agency. The Issuer will maintain in the City of
New York, New York, an office or agency where, subject to satisfaction of conditions set forth
herein, Notes may be surrendered for registration of transfer or exchange, and where notices and
demands to or upon the Issuer in respect of the Notes and this Indenture may be served. The Issuer
hereby initially appoints the Indenture Trustee to serve as its agent for the foregoing purposes. If
at any time the Issuer shall fail to maintain any such office or agency or shall fail to furnish the
Indenture Trustee with the address thereof, such surrenders, notices and demands may be made or
served at the Corporate Trust Office, and the Issuer hereby appoints the Indenture Trustee as its
agent to receive all such surrenders, notices and demands.
Section 3.03 Money for Payments to Be Held in Trust; Paying Agent. As provided in
Section 3.01, all payments of amounts due and payable with respect to any Notes that are to be made
from amounts withdrawn from the Note Payment Account pursuant to Section 3.01 shall be made on behalf
of the Issuer by the Indenture Trustee or by the Paying Agent, and no amounts so withdrawn from the
Note Payment Account for payments of Notes shall be paid over to the Issuer except as provided in
this Section 3.03. The Issuer hereby appoints the Indenture Trustee to act as initial Paying Agent
hereunder. The Issuer will cause each Paying Agent other than the Indenture Trustee to execute and
deliver to the Indenture Trustee an instrument in which such Paying Agent shall agree with the
Indenture Trustee (and if the Indenture Trustee acts as Paying Agent, it hereby so agrees), subject
to the provisions of this Section 3.03, that such Paying Agent will:
(a) hold all sums held by it for the payment of amounts due with respect to the
Notes in trust for the benefit of the Persons entitled thereto until such sums shall be paid to such
Persons or otherwise disposed of as herein provided and pay such sums to such Persons as herein
provided;
(b) give the Indenture Trustee written notice of any default by the Issuer of
which it has actual knowledge in the making of any payment required to be made with respect to the
Notes;
(c) at any time during the continuance of any such default, upon the written
request of the Indenture Trustee, forthwith pay to the Indenture Trustee all sums so held in trust by
such Paying Agent;
(d) immediately resign as Paying Agent and forthwith pay to the Indenture
Trustee all sums held by it in trust for the payment of Notes, if at any time it ceases to meet the
standards required to be met by a Paying Agent at the time of its appointment;
(e) comply with all requirements of the Code with respect to the withholding
from any payments made by it on any Notes of any applicable withholding taxes imposed thereon and
with respect to any applicable reporting requirements in connection therewith; and
(f) deliver to the Indenture Trustee a copy of the statement to Noteholders
prepared with respect to each Payment Date by the Servicer pursuant to Section 4.01 of the Servicing
Agreement.
The Issuer may at any time, for the purpose of obtaining the satisfaction and discharge of
this Indenture or for any other purpose, by Issuer Request direct any Paying Agent to pay to the
Indenture Trustee all sums held in trust by such Paying Agent, such sums to be held by the Indenture
Trustee upon the same trusts as those upon which the sums were held by such Paying Agent; and upon
such payment by any Paying Agent to the Indenture Trustee, such Paying Agent shall be released from
all further liability with respect to such money.
Subject to applicable laws with respect to escheat of funds, any money held by the Indenture
Trustee or any Paying Agent in trust for the payment of any amount due with respect to any Note and
remaining unclaimed for one year after such amount has become due and payable shall be discharged
from such trust and be paid to the Issuer on Issuer Request; and the Noteholder of such Note shall
thereafter, as an unsecured general creditor, look only to the Issuer for payment thereof (but only
to the extent of the amounts so paid to the Issuer), and all liability of the Indenture Trustee or
such Paying Agent with respect to such trust money shall thereupon cease; provided, however, that the
Indenture Trustee or such Paying Agent, before being required to make any such repayment, shall at
the expense and direction of the Issuer cause to be published once, in an Authorized Newspaper,
notice that such money remains unclaimed and that, after a date specified therein, which shall not be
less than 30 days from the date of such publication, any unclaimed balance of such money then
remaining will be repaid to the Issuer. The Indenture Trustee may also adopt and employ, at the
expense and direction of the Issuer, any other reasonable means of notification of such repayment
(including, but not limited to, mailing notice of such repayment to Noteholders of the Notes which
have been called but have not been surrendered for redemption or whose right to or interest in monies
due and payable but not claimed is determinable from the records of the Indenture Trustee or of any
Paying Agent, at the last address of record for each such Noteholder).
Section 3.04 Existence. The Issuer will keep in full effect its existence, rights and
franchises as a statutory trust under the laws of the State of Delaware (unless it becomes, or any
successor Issuer hereunder is or becomes, organized under the laws of any other state or of the
United States of America, in which case the Issuer will keep in full effect its existence, rights and
franchises under the laws of such other jurisdiction) and will obtain and preserve its qualification
to do business in each jurisdiction in which such qualification is or shall be necessary to protect
the validity and enforceability of this Indenture, the Notes, the Mortgage Loans and each other
instrument or agreement included in the Trust Estate.
Section 3.05 Priority of Distributions; Defaulted Interest.
(a) In accordance with Section 3.03(a) of the Servicing Agreement, the priority
of distributions on each Payment Date from Principal Collections and Interest Collections with
respect to the Mortgage Loans and any optional advance of delinquent principal or interest on the
Mortgage Loans made by the Servicer in respect of the related Collection Period, is as follows:
(i) from Interest Collections related to Loan Group I, to pay accrued
and unpaid interest, pro rata, due on the Note Balances of the Class I-A-1 and Class I-A-2
Notes and from Interest Collections related to Loan Group II, to pay accrued and unpaid
interest, pro rata, due on the Note Balances of the Class II-A-1 and Class II-A-2 Notes;
(ii) from Interest Collections related to Loan Group II, to pay accrued
and unpaid interest, pro rata, due on the Note Balances of the Class I-A-1 and Class I-A-2
Notes to the extent not paid pursuant to clause (i) above and from Interest Collections
related to Loan Group I, to pay accrued and unpaid interest, pro rata, due on the Note
Balances of the Class II-A-1 and Class II-A-2 Notes to the extent not paid pursuant to
clause (i) above;
(iii) from Principal Collections for Loan Group I, to pay accrued and
unpaid interest, pro rata, due on the Note Balances of the Class I-A-1 and Class I-A-2 Notes
and from Principal Collections related to Loan Group II, to pay accrued and unpaid interest,
pro rata, due on the Note Balances of the Class II-A-1 and Class II-A-2 Notes;
(iv) from Principal Collections for Loan Group II, to pay accrued and
unpaid interest, pro rata, due on the Note Balances of the Class I-A-1 and Class I-A-2 Notes
and from Principal Collections related to Loan Group I, to pay accrued and unpaid interest,
pro rata, due on the Note Balances of the Class II-A-1 and Class II-A-2 Notes;
(v) from Interest Collections related to the Mortgage Loans, to pay
accrued and unpaid interest due, sequentially, to the Class M-1 Notes and then to the Class
M-2 Notes;
(vi) from Principal Collections for Loan Group I, to pay as principal
on the Class I-A-1 and Class I-A-2 Notes (pro rata) in an amount equal to the Group I
Principal Distribution Amount for that payment date, in each case until the related Note
Balance thereof has been reduced to zero, and then to the Class II-A-1 and Class II-A-2
Notes (pro rata), in an amount equal to the Group I Principal Distribution Amount for that
payment date, in each case until the related Note Balance thereof has been reduced to zero;
(vii) from Principal Collections for Loan Group II, to pay as principal
on the Class II-A-1 Notes and Class II-A-2 Notes (pro rata) in an amount equal to the Group
II Principal Distribution Amount for that payment date, in each case until the related Note
Balance thereof has been reduced to zero, and then to the Class I-A-1 and Class I-A-2 Notes
(pro rata), in an amount equal to the Group II Principal Distribution Amount for that
payment date, in each case until the related Note Balance thereof has been reduced to zero;
(viii) from the Class M-1 Principal Distribution Amount, to pay as
principal on the Class M-1 Notes, until the Note Balance thereof has been reduced to zero;
(ix) from the Class M-2 Principal Distribution Amount, to pay as
principal on the Class M-2 Notes, until the Note Balance thereof has been reduced to zero;
(x) from Excess Spread, to pay as principal on the Class I-A-1 Notes
and Class I-A-2 Notes (pro rata) any Group I Liquidation Loss Distribution Amount for that
payment date, in each case until the related Note Balance thereof has been reduced to zero,
and to pay as principal on the Class II-A-1 Notes and Class II-A-2 Notes (pro rata) any
Group II Liquidation Loss Distribution Amount for that payment date, in each case until the
related Note Balance thereof has been reduced to zero;
(xi) from remaining Excess Spread, to pay as principal on the Class M-1
Notes any Group I Liquidation Loss Distribution Amount and the Group II Liquidation Loss
Distribution Amount for that payment date to the extent not paid to the related holders of
the Class A Notes, until the Note Balance thereof has been reduced to zero;
(xii) from remaining Excess Spread, to pay as principal on the Class M-2
Notes any Group I Liquidation Loss Distribution Amount and the Group II Liquidation Loss
Distribution Amount for that payment date to the extent not paid to the related holders of
the Class A Notes and Class M-1 Notes, until the Note Balance thereof has been reduced to
zero;
(xiii) from remaining Excess Spread, to pay as principal on the Class
I-A-1 Notes and Class I-A-2 Notes (pro rata) any Group I Overcollateralization Increase
Amount for that payment date, in each case until the related Note Balance thereof has been
reduced to zero, and to pay as principal on the Class II-A-1 Notes and Class II-A-2 Notes
(pro rata) any Group II Overcollateralization Increase Amount for that payment date, in each
case until the related Note Balance thereof has been reduced to zero;
(xiv) from remaining Excess Spread, to pay as principal on the Class M-1
Notes any Overcollateralization Increase Amount for that payment date after application of
amounts paid pursuant to clause (xiii) above, until the Note Balance thereof has been
reduced to zero;
(xv) from remaining Excess Spread, to pay as principal on the Class M-2
Notes any Overcollateralization Increase Amount for that payment date after application of
amounts paid pursuant to clauses (xiii) and (xiv) above, until the Note Balance thereof has
been reduced to zero;
(xvi) from remaining Excess Spread, to pay as reimbursement to the Class
I-A-1 Notes and Class II-A-1 Notes, pro rata, any Liquidation Loss Amounts previously
allocated thereto that remains unreimbursed;
(xvii) from remaining Excess Spread, to pay as reimbursement to the Class
I-A-2 Notes and Class II-A-2 Notes, pro rata, any Liquidation Loss Amounts previously
allocated thereto that remains unreimbursed;
(xviii) to pay as reimbursement to the Class M-1 Notes any Liquidation
Loss Amounts previously allocated thereto that remains unreimbursed;
(xix) to pay as reimbursement to the Class M-2 Notes any Liquidation
Loss Amounts previously allocated thereto that remains unreimbursed;
(xx) to the Indenture Trustee, any amounts owing to the Indenture
Trustee pursuant to Section 6.07 to the extent remaining unpaid; and
(xxi) any remaining amount, to the Distribution Account, for
distribution to the holders of the Certificates by the Certificate Paying Agent in
accordance with the Trust Agreement.
Amounts distributed to the Noteholders pursuant to the above clauses (i) through
(xix) from Interest Collections and Principal Collections shall be treated for tax purposes as
distributions with respect to the REMIC III Regular Interests bearing the same designation. Amounts
distributed pursuant to clause (xxi) shall be treated as having been distributed to the REMIC III
Regular Interests SB-IO and SB-PO.
On each Payment Date, the Paying Agent shall apply, from amounts on deposit in the
Note Payment Account, and in accordance with the Servicing Certificate, the amounts set forth above
in the order of priority set forth in Section 3.05(a).
Amounts paid to Noteholders shall be paid in respect of the Notes in accordance with
the applicable percentage as set forth in Section 3.05(e). Interest on the Notes will be computed on
the basis of a 360-day year consisting of twelve 30-day months. Any installment of interest or
principal payable on any Note that is punctually paid or duly provided for by the Issuer on the
applicable Payment Date shall be paid to the Noteholder of record thereof on the immediately
preceding Record Date by wire transfer to an account specified in writing by such Noteholder
reasonably satisfactory to the Indenture Trustee, or by check or money order mailed to such
Noteholder at such Noteholder's address appearing in the Note Register, the amount required to be
distributed to such Noteholder on such Payment Date pursuant to such Noteholder's Notes; provided,
that the Indenture Trustee shall not pay to any such Noteholder any amounts required to be withheld
from a payment to such Noteholder by the Code.
(b) Principal of each Note shall be due and payable in full on the Final
Payment Date as provided in the applicable form of Note set forth in Exhibit A and Exhibit B, as
applicable. All principal payments on the Notes shall be made in accordance with the priorities set
forth in Sections 3.05(a) to the Noteholders entitled thereto in accordance with the related
Percentage Interests represented thereby. Upon written notice to the Indenture Trustee by the
Issuer, the Indenture Trustee shall notify the Person in the name of which a Note is registered at
the close of business on the Record Date preceding the Final Payment Date or other final Payment
Date, as applicable. Such notice shall be mailed or faxed no later than five Business Days prior to
the Final Payment Date or such other final Payment Date and, unless such Note is then a Book-Entry
Note, shall specify that payment of the principal amount and any interest due with respect to such
Note at the Final Payment Date or such other final Payment Date will be payable only upon
presentation and surrender of such Note, and shall specify the place where such Note may be presented
and surrendered for such final payment.
On each Payment Date, the Overcollateralization Amount available to cover any
Liquidation Loss Amounts on such Payment Date shall be deemed to be reduced by an amount equal to
such Liquidation Loss Amounts (except to the extent that such Liquidation Loss Amounts were covered
on such Payment Date by a payment in respect of Liquidation Loss Amounts).
(c) With respect to any Payment Date, interest payments on the Notes will be
reduced by any Relief Act Shortfalls for the related Collection Period on a pro rata basis in
accordance with the amount of interest payable on the Notes on such Payment Date, absent such
reduction.
Section 3.06 Protection of Trust Estate.
(a) The Issuer shall from time to time execute and deliver all such supplements
and amendments hereto and all such financing statements, continuation statements, instruments of
further assurance and other instruments, and will take such other action necessary or advisable to:
(i) maintain or preserve the lien and security interest (and the
priority thereof) of this Indenture or carry out more effectively the purposes hereof;
(ii) perfect, publish notice of or protect the validity of any Grant
made or to be made by this Indenture;
(iii) cause the Trust to enforce any of the Mortgage Loans; or
(iv) preserve and defend title to the Trust Estate and the rights of
the Indenture Trustee and the Noteholders in such Trust Estate against the claims of all
persons and parties.
(b) Except as otherwise provided in this Indenture, the Indenture Trustee shall
not remove any portion of the Trust Estate that consists of money or is evidenced by an instrument,
certificate or other writing from the jurisdiction in which it was held at the date of the most
recent Opinion of Counsel delivered pursuant to Section 3.07 (or from the jurisdiction in which it
was held as described in the Opinion of Counsel delivered at the Closing Date pursuant to
Section 3.07, if no Opinion of Counsel has yet been delivered pursuant to Section 3.07) unless the
Indenture Trustee shall have first received an Opinion of Counsel to the effect that the lien and
security interest created by this Indenture with respect to such property will continue to be
maintained after giving effect to such action or actions.
The Issuer hereby designates the Indenture Trustee its agent and attorney-in-fact to execute
any financing statement, continuation statement or other instrument required to be executed pursuant
to this Section 3.06.
Section 3.07 Opinions as to Trust Estate.
On the Closing Date, the Issuer shall furnish to the Indenture Trustee and the Owner Trustee
an Opinion of Counsel at the expense of the Issuer stating that, upon delivery of the Mortgage Notes
relating to the Mortgage Loans to the Indenture Trustee or the Custodian in the State of
Pennsylvania, the Indenture Trustee will have a perfected, first priority security interest in such
Mortgage Loans.
On or before December 31st in each calendar year, beginning in 2006, the Issuer shall
furnish to the Indenture Trustee an Opinion of Counsel at the expense of the Issuer either stating
that, in the opinion of such counsel, no further action is necessary to maintain a perfected, first
priority security interest in the Mortgage Loans until December 31 in the following calendar year or,
if any such action is required to maintain such security interest in the Mortgage Loans, such Opinion
of Counsel shall also describe the recording, filing, re-recording and refiling of this Indenture,
any indentures supplemental hereto and any other requisite documents and the execution and filing of
any financing statements and continuation statements that will, in the opinion of such counsel, be
required to maintain the security interest in the Mortgage Loans until December 31 in the following
calendar year.
Section 3.08 Performance of Obligations; Servicing Agreement.
(a) The Issuer shall punctually perform and observe all of its obligations and
agreements contained in this Indenture, the Basic Documents and in the instruments and agreements
included in the Trust Estate.
(b) The Issuer may contract with other Persons to assist it in performing its
duties under this Indenture, and any performance of such duties by a Person identified to the
Indenture Trustee in an Officer's Certificate of the Issuer shall be deemed to be action taken by the
Issuer.
(c) The Issuer shall not take any action or permit any action to be taken by
others that would release any Person from any of such Person's covenants or obligations under any of
the documents relating to the Mortgage Loans or under any instrument included in the Trust Estate, or
that would result in the amendment, hypothecation, subordination, termination or discharge of, or
impair the validity or effectiveness of, any of the documents relating to the Mortgage Loans or any
such instrument, except such actions as the Servicer is expressly permitted to take in the Servicing
Agreement.
(d) The Issuer may retain an administrator and may enter into contracts with
other Persons for the performance of the Issuer's obligations hereunder, and performance of such
obligations by such Persons shall be deemed to be performance of such obligations by the Issuer.
Section 3.09 Negative Covenants. So long as any Notes are Outstanding, the Issuer shall
not:
(a) except as expressly permitted by this Indenture, sell, transfer, exchange
or otherwise dispose of the Trust Estate, unless directed to do so in writing by the Indenture
Trustee pursuant to Section 5.04 hereof;
(b) claim any credit on, or make any deduction from the principal or interest
payable in respect of, the Notes (other than amounts properly withheld from such payments under the
Code) or assert any claim against any present or former Noteholder by reason of the payment of the
taxes levied or assessed upon any part of the Trust Estate;
(c) (i) permit the validity or effectiveness of this Indenture to be impaired,
or permit the lien of this Indenture to be amended, hypothecated, subordinated, terminated or
discharged, or permit any Person to be released from any covenants or obligations with respect to the
Notes under this Indenture except as may be expressly permitted hereby, (ii) permit any lien, charge,
excise, claim, security interest, mortgage or other encumbrance (other than the lien of this
Indenture) to be created on or extend to or otherwise arise upon or burden the Trust Estate or any
part thereof or any interest therein or the proceeds thereof or (iii) permit the lien of this
Indenture not to constitute a valid first priority security interest in the Trust Estate; or
(d) impair or cause to be impaired the Issuer's interest in the Mortgage Loans,
the Purchase Agreement or in any other Basic Document, if any such action would materially and
adversely affect the interests of the Noteholders.
Section 3.10 Annual Statement as to Compliance. The Issuer shall deliver to the
Indenture Trustee, within 120 days after the end of each fiscal year of the Issuer (commencing with
the fiscal year ending on December 31, 2006), an Officer's Certificate stating, as to the Authorized
Officer signing such Officer's Certificate, that:
(a) a review of the activities of the Issuer during such year and of its
performance under this Indenture and the Trust Agreement has been made under such Authorized
Officer's supervision; and
(b) to the best of such Authorized Officer's knowledge, based on such review,
the Issuer has complied with all conditions and covenants under this Indenture and the provisions of
the Trust Agreement throughout such year, or, if there has been a default in its compliance with any
such condition or covenant, specifying each such default known to such Authorized Officer and the
nature and status thereof.
Section 3.11 Recordation of Assignments. The Issuer shall enforce the obligation, if
any, of the Sellers under the Purchase Agreement to submit or cause to be submitted for recordation
all Assignments of Mortgages within 60 days of receipt of recording information by the Servicer.
Section 3.12 Representations and Warranties Concerning the Mortgage Loans. The
Indenture Trustee, as pledgee of the Mortgage Loans, shall have the benefit of (i) the
representations and warranties made by GMACM in Section 3.1(a) and Section 3.1(b) of the Purchase
Agreement and (ii) the benefit of the representations and warranties made by WG Trust 2003 in
Section 3.1(d) of the Purchase Agreement in each case, concerning the Mortgage Loans and the right to
enforce the remedies against GMACM or WG Trust 2003 provided in Section 3.1(e) of the Purchase
Agreement, as applicable, to the same extent as though such representations and warranties were made
directly to the Indenture Trustee.
Section 3.13 Assignee of Record of the Mortgage Loans. As pledgee of the Mortgage
Loans, the Indenture Trustee shall hold title to the Mortgage Loans by being named as payee in the
endorsements or assignments of the Mortgage Notes and assignee in the Assignments of Mortgage to be
delivered under Section 2.1 of the Purchase Agreement. Except as expressly provided in the Purchase
Agreement or in the Servicing Agreement with respect to any specific Mortgage Loan, the Indenture
Trustee shall not execute any endorsement or assignment or otherwise release or transfer such title
to any of the Mortgage Loans until such time as the remaining Trust Estate may be released pursuant
to Section 8.05(b). The Indenture Trustee's holding of such title shall in all respects be subject
to its fiduciary obligations to the Noteholders hereunder.
Section 3.14 Servicer as Agent and Bailee of the Indenture Trustee. Solely for purposes
of perfection under Section 9-313 or 9-314 of the UCC or other similar applicable law, rule or
regulation of the state in which such property is held by the Servicer, the Issuer and the Indenture
Trustee hereby acknowledge that the Servicer is acting as agent and bailee of the Indenture Trustee
in holding amounts on deposit in the Custodial Account pursuant to Section 3.02 of the Servicing
Agreement that are allocable to the Mortgage Loans, as well as the agent and bailee of the Indenture
Trustee in holding any Related Documents released to the Servicer pursuant to Section 3.06(c) of the
Servicing Agreement, and any other items constituting a part of the Trust Estate which from time to
time come into the possession of the Servicer. It is intended that, by the Servicer's acceptance of
such agency pursuant to Section 3.02 of the Servicing Agreement, the Indenture Trustee, as a pledgee
of the Mortgage Loans, will be deemed to have possession of such Related Documents, such monies and
such other items for purposes of Section 9-313 or 9-314 of the UCC of the state in which such
property is held by the Servicer.
Section 3.15 Investment Company Act. The Issuer shall not become an "investment
company" or under the "control" of an "investment company" as such terms are defined in the Investment
Company Act of 1940, as amended (or any successor or amendatory statute), and the rules and
regulations thereunder (taking into account not only the general definition of the term "investment
company" but also any available exceptions to such general definition); provided, however, that the
Issuer shall be in compliance with this Section 3.15 if it shall have obtained an order exempting it
from regulation as an "investment company" so long as it is in compliance with the conditions imposed
in such order.
Section 3.16 Issuer May Consolidate, etc.
(a) The Issuer shall not consolidate or merge with or into any other Person,
unless:
(i) the Person (if other than the Issuer) formed by or surviving such
consolidation or merger shall be a Person organized and existing under the laws of the
United States of America or any state or the District of Columbia and shall expressly
assume, by an indenture supplemental hereto, executed and delivered to the Indenture
Trustee, in form reasonably satisfactory to the Indenture Trustee, the due and punctual
payment of the principal of and interest on all Notes and to the Certificate Paying Agent,
on behalf of the Certificateholders and the performance or observance of every agreement and
covenant of this Indenture on the part of the Issuer to be performed or observed, all as
provided herein;
(ii) immediately after giving effect to such transaction, no Event of
Default shall have occurred and be continuing;
(iii) the Issuer shall have received an Opinion of Counsel (and shall
have delivered copies thereof to the Indenture Trustee) to the effect that such transaction
will not have any material adverse tax consequence to the Issuer, any Noteholder or any
Certificateholder;
(iv) any action that is necessary to maintain the lien and security
interest created by this Indenture shall have been taken; and
(v) the Issuer shall have delivered to the Indenture Trustee an
Officer's Certificate and an Opinion of Counsel each stating that such consolidation or
merger and such supplemental indenture comply with this Article III and that all conditions
precedent herein provided for relating to such transaction have been complied with
(including any filing required by the Exchange Act).
(b) The Issuer shall not convey or transfer any of its properties or assets,
including those included in the Trust Estate, to any Person, unless:
(i) the Person that acquires by conveyance or transfer the properties
and assets of the Issuer the conveyance or transfer of which is hereby restricted shall
(A) be a United States citizen or a Person organized and existing under the laws of the
United States of America or any state, (B) expressly assumes, by an indenture supplemental
hereto, executed and delivered to the Indenture Trustee, in form satisfactory to the
Indenture Trustee, the due and punctual payment of the principal of and interest on all
Notes and the performance or observance of every agreement and covenant of this Indenture on
the part of the Issuer to be performed or observed, all as provided herein, (C) expressly
agrees by means of such supplemental indenture that all right, title and interest so
conveyed or transferred shall be subject and subordinate to the rights of Noteholders of the
Notes, (D) unless otherwise provided in such supplemental indenture, expressly agrees to
indemnify, defend and hold harmless the Issuer against and from any loss, liability or
expense arising under or related to this Indenture and the Notes and (E) expressly agrees by
means of such supplemental indenture that such Person (or if a group of Persons, then one
specified Person) shall make all filings with the Commission (and any other appropriate
Person) required by the Exchange Act in connection with the Notes;
(ii) immediately after giving effect to such transaction, no Default or
Event of Default shall have occurred and be continuing;
(iii) the Issuer shall have received an Opinion of Counsel (and shall
have delivered copies thereof to the Indenture Trustee) to the effect that such transaction
will not have any material adverse tax consequence to the Issuer or any Noteholder;
(iv) any action that is necessary to maintain the lien and security
interest created by this Indenture shall have been taken; and
(v) the Issuer shall have delivered to the Indenture Trustee an
Officer's Certificate and an Opinion of Counsel each stating that such conveyance or transfer
and such supplemental indenture comply with this Article III and that all conditions
precedent herein provided for relating to such transaction have been complied with
(including any filing required by the Exchange Act).
Section 3.17 Successor or Transferee.
(a) Upon any consolidation or merger of the Issuer in accordance with
Section 3.16(a), the Person formed by or surviving such consolidation or merger (if other than the
Issuer) shall succeed to, and be substituted for, and may exercise every right and power of, the
Issuer under this Indenture with the same effect as if such Person had been named as the Issuer
herein.
(b) Upon a conveyance or transfer of all the assets and properties of the
Issuer pursuant to Section 3.16(b), the Issuer shall be released from every covenant and agreement of
this Indenture to be observed or performed on the part of the Issuer with respect to the Notes
immediately upon the delivery of written notice to the Indenture Trustee of such conveyance or
transfer.
Section 3.18 No Other Business. The Issuer shall not engage in any business other than
financing, purchasing, owning and selling and managing the Mortgage Loans and the issuance of the
Notes and Certificates in the manner contemplated by this Indenture and the Basic Documents and all
activities incidental thereto.
Section 3.19 No Borrowing. The Issuer shall not issue, incur, assume, guarantee or
otherwise become liable, directly or indirectly, for any indebtedness except for the Notes.
Section 3.20 Guarantees, Loans, Advances and Other Liabilities. Except as contemplated
by this Indenture or the other Basic Documents, the Issuer shall not make any loan or advance or
credit to, or guarantee (directly or indirectly or by an instrument having the effect of assuring
another's payment or performance on any obligation or capability of so doing or otherwise), endorse
or otherwise become contingently liable, directly or indirectly, in connection with the obligations,
stocks or dividends of, or own, purchase, repurchase or acquire (or agree contingently to do so) any
stock, obligations, assets or securities of, or any other interest in, or make any capital
contribution to, any other Person.
Section 3.21 Capital Expenditures. The Issuer shall not make any expenditure (by
long-term or operating lease or otherwise) for capital assets (either realty or personalty).
Section 3.22 Owner Trustee Not Liable for Certificates or Related Documents. The
recitals contained herein shall be taken as the statements of the Issuer, and the Owner Trustee and
the Indenture Trustee assume no responsibility for the correctness of the recitals contained herein.
The Owner Trustee and the Indenture Trustee make no representations as to the validity or sufficiency
of this Indenture or any other Basic Document, of the Certificates (other than the signatures of the
Owner Trustee or the Indenture Trustee on the Certificates) or the Notes, or of any Related
Documents. The Owner Trustee and the Indenture Trustee shall at no time have any responsibility or
liability with respect to the sufficiency of the Trust Estate or its ability to generate the payments
to be distributed to Certificateholders under the Trust Agreement or the Noteholders under this
Indenture, including, the compliance by the Depositor or the Sellers with any warranty or
representation made under any Basic Document or in any related document or the accuracy of any such
warranty or representation, or any action of the Certificate Paying Agent, the Certificate Registrar
or any other person taken in the name of the Owner Trustee or the Indenture Trustee.
Section 3.23 Restricted Payments. The Issuer shall not, directly or indirectly, (i) pay
any dividend or make any distribution (by reduction of capital or otherwise), whether in cash,
property, securities or a combination thereof, to the Owner Trustee or any owner of a beneficial
interest in the Issuer or otherwise with respect to any ownership or equity interest or security in
or of the Issuer, (ii) redeem, purchase, retire or otherwise acquire for value any such ownership or
equity interest or security or (iii) set aside or otherwise segregate any amounts for any such
purpose; provided, however, that the Issuer may make, or cause to be made, (x) distributions to the
Owner Trustee and the Certificateholders as contemplated by, and to the extent funds are available
for such purpose under, the Trust Agreement and (y) payments to the Servicer pursuant to the terms of
the Servicing Agreement. The Issuer will not, directly or indirectly, make payments to or
distributions from the Custodial Account except in accordance with this Indenture and the other Basic
Documents.
Section 3.24 Notice of Events of Default. The Issuer shall give the Indenture Trustee
and the Rating Agencies prompt written notice of each Event of Default hereunder and under the Trust
Agreement.
Section 3.25 Further Instruments and Acts. Upon request of the Indenture Trustee, the
Issuer shall execute and deliver such further instruments and do such further acts as may be
reasonably necessary or proper to carry out more effectively the purposes of this Indenture.
Section 3.26 Statements to Noteholders. On each Payment Date, each of the Indenture
Trustee and the Certificate Registrar shall make available to the Depositor, the Owner Trustee, each
Rating Agency, each Noteholder and each Certificateholder, the Servicing Certificate provided to the
Indenture Trustee by the Servicer relating to such Payment Date and delivered pursuant to Section
4.01 of the Servicing Agreement.
The Indenture Trustee will make the Servicing Certificate (and, at its option, any
additional files containing the same information in an alternative format) available each month to
Securityholders, and other parties to this Indenture via the Indenture Trustee's internet website.
The Indenture Trustee's internet website shall initially be located at "xxx.xxx.xxxxxxxx.xxx."
Assistance in using the website can be obtained by calling the Indenture Trustee's customer service
desk at (000) 000-0000. Parties that are unable to use the above distribution options are entitled
to have a paper copy mailed to them via first class mail by calling the customer service desk and
indicating such. The Indenture Trustee shall have the right to change the way the statement to
Securityholders are distributed in order to make such distribution more convenient or more accessible
to the above parties and the Indenture Trustee shall provide timely and adequate notification to all
above parties regarding any such changes.
Section 3.27 [Reserved].
Section 3.28 [Reserved].
Section 3.29 [Reserved].
Section 3.30 Additional Representations of Issuer.
The Issuer hereby represents and warrants to the Indenture Trustee that as of the Closing
Date (which representations and warranties shall survive the execution of this Indenture):
(a) This Indenture creates a valid and continuing security interest (as defined
in the applicable UCC) in the Mortgage Notes in favor of the Indenture Trustee, which security
interest is prior to all other Liens (except as expressly permitted otherwise in this Indenture), and
is enforceable as such as against creditors of and purchasers from the Issuer.
(b) The Mortgage Notes constitute "instruments" within the meaning of the
applicable UCC.
(c) The Issuer owns and has good and marketable title to the Mortgage Notes
free and clear of any Lien of any Person.
(d) The original executed copy of each Mortgage Note (except for any Mortgage
Note with respect to which a Lost Note Affidavit has been delivered to the Custodian) has been
delivered to the Custodian.
(e) The Issuer has received a written acknowledgment from the Custodian that
the Custodian is acting solely as agent of the Indenture Trustee for the benefit of the Noteholders.
(f) Other than the security interest granted to the Indenture Trustee pursuant
to this Indenture, the Issuer has not pledged, assigned, sold, granted a security interest in, or
otherwise conveyed any of the Mortgage Notes. The Issuer has not authorized the filing of and is not
aware of any financing statements against the Issuer that include a description of collateral
covering the Mortgage Notes other than any financing statement relating to the security interest
granted to the Indenture Trustee hereunder or any security interest that has been terminated. The
Issuer is not aware of any judgment or tax lien filings against the Issuer.
(g) None of the Mortgage Notes has any marks or notations indicating that they
have been pledged, assigned or otherwise conveyed to any Person other than the Indenture Trustee,
except for (i) any endorsements that are part of a complete chain of endorsements from the originator
of the Mortgage Note to the Indenture Trustee, and (ii) any marks or notations pertaining to Liens
that have been terminated or released.
(h) None of the provisions of this Section 3.30 shall be waived without the
prior written confirmation from Standard & Poor's that such waiver shall not result in a reduction or
withdrawal of the then-current rating of the Notes.
Section 3.31 Allocation of Losses.
(a) On each Payment Date, Group I Liquidation Loss Amounts during the prior
calendar month, to the extent not covered by (i) Excess Spread in the form of a payment of Group I
Overcollateralization Increase Amount or Group I Liquidation Loss Distribution Amount or (ii) a
reduction in the Overcollateralization Amount for the Group I Loans on such Payment Date, will be
allocated first to reduce the Note Balance of the Class M-2 Notes, until the outstanding Note Balance
thereof has been reduced to zero, second to the Class M-1 Notes, until the outstanding Note Balance
thereof has been reduced to zero, third to the Class I-A-2 Notes until the outstanding Note Balance
thereof has been reduced to zero, and last to reduce the Class I-A-1 Notes until the outstanding Note
Balance thereof has been reduced to zero.
(b) On each Payment Date, Group II Liquidation Loss Amounts during the prior
calendar month, to the extent not covered by (i) Excess Spread in the form of a payment of Group II
Overcollateralization Increase Amount or Group II Liquidation Loss Distribution Amount or (ii) a
reduction in the Overcollateralization Amount for the Group II Loans on such Payment Date, will be
allocated first to reduce the Note Balance of the Class M-2 Notes, until the outstanding Note Balance
thereof has been reduced to zero, second to the Class M-1 Notes, until the outstanding Note Balance
thereof has been reduced to zero, third to the Class II-A-2 Notes until the outstanding Note Balance
thereof has been reduced to zero, and last to reduce the Class II-A-1 Notes until the outstanding
Note Balance thereof has been reduced to zero.
ARTICLE IV
The Notes; Satisfaction And Discharge Of Indenture
Section 4.01 The Notes
(a) The Notes shall be registered in the name of a nominee designated by the
Depository. Beneficial Owners will hold interests in the Notes through the book-entry facilities of
the Depository in minimum initial Note Balances of $25,000 and integral multiples of $1,000 in excess
thereof.
The Indenture Trustee may for all purposes (including the making of payments due on the
Notes) deal with the Depository as the authorized representative of the Beneficial Owners with
respect to the Notes for the purposes of exercising the rights of Noteholders hereunder. Except as
provided in the next succeeding paragraph of this Section 4.01, the rights of Beneficial Owners with
respect to the Notes shall be limited to those established by law and agreements between such
Beneficial Owners and the Depository and Depository Participants. Except as provided in
Section 4.08, Beneficial Owners shall not be entitled to definitive certificates for the Notes as to
which they are the Beneficial Owners. Requests and directions from, and votes of, the Depository as
Noteholder of the Notes shall not be deemed inconsistent if they are made with respect to different
Beneficial Owners. The Indenture Trustee may establish a reasonable record date in connection with
solicitations of consents from or voting by Noteholders and give notice to the Depository of such
record date. Without the consent of the Issuer and the Indenture Trustee, no Term Note may be
transferred by the Depository except to a successor Depository that agrees to hold such Note for the
account of the Beneficial Owners.
In the event the Depository Trust Company resigns or is removed as Depository, the Indenture
Trustee, at the request of the Servicer and with the approval of the Issuer may appoint a successor
Depository. If no successor Depository has been appointed within 30 days of the effective date of
the Depository's resignation or removal, each Beneficial Owner shall be entitled to certificates
representing the Notes it beneficially owns in the manner prescribed in Section 4.08.
The Notes shall, on original issue, be executed on behalf of the Issuer by the Owner
Trustee, not in its individual capacity but solely as Owner Trustee and upon Issuer Order,
authenticated by the Note Registrar and delivered by the Indenture Trustee to or upon the order of
the Issuer.
Section 4.02 Registration of and Limitations on Transfer and Exchange of Notes;
Appointment of Certificate Registrar. The Issuer shall cause to be kept at the Indenture Trustee's
Corporate Trust Office a Note Register in which, subject to such reasonable regulations as it may
prescribe, the Note Registrar shall provide for the registration of Notes and of transfers and
exchanges of Notes as herein provided. The Issuer hereby appoints the Indenture Trustee as the
initial Note Registrar.
Subject to the restrictions and limitations set forth below, upon surrender for registration
of transfer of any Note at the Corporate Trust Office, the Issuer shall execute, and the Note
Registrar shall authenticate and deliver, in the name of the designated transferee or transferees,
one or more new Notes in authorized initial Note Balances evidencing the same aggregate Percentage
Interests.
Subject to the foregoing, at the option of the Noteholders, Notes may be exchanged for other
Notes of like tenor, in each case in authorized initial Note Balances evidencing the same aggregate
Percentage Interests, upon surrender of the Notes to be exchanged at the Corporate Trust Office of
the Note Registrar. Whenever any Notes are so surrendered for exchange, the Issuer shall execute and
the Note Registrar shall authenticate and deliver the Notes which the Noteholder making the exchange
is entitled to receive. Each Note presented or surrendered for registration of transfer or exchange
shall (if so required by the Note Registrar) be duly endorsed by, or be accompanied by a written
instrument of transfer in form reasonably satisfactory to the Note Registrar duly executed by, the
Noteholder thereof or his attorney duly authorized in writing with such signature guaranteed by a
commercial bank or trust company located or having a correspondent located in The City of New York.
Notes delivered upon any such transfer or exchange will evidence the same obligations, and will be
entitled to the same rights and privileges, as the Notes surrendered.
No service charge shall be imposed for any registration of transfer or exchange of Notes,
but the Note Registrar shall require payment of a sum sufficient to cover any tax or governmental
charge that may be imposed in connection with any registration of transfer or exchange of Notes.
All Notes surrendered for registration of transfer and exchange shall be cancelled by the
Note Registrar and delivered to the Indenture Trustee for subsequent destruction without liability on
the part of either.
The Issuer hereby appoints the Indenture Trustee as Certificate Registrar to keep at its
Corporate Trust Office a Certificate Register pursuant to Section 3.09 of the Trust Agreement in
which, subject to such reasonable regulations as it may prescribe, the Certificate Registrar shall
provide for the registration of Certificates and of transfers and exchanges thereof pursuant to
Section 3.05 of the Trust Agreement. The Indenture Trustee hereby accepts such appointment.
Each purchaser of a Note, by its acceptance of the Note, shall be deemed to have represented
that the acquisition of such Note by the purchaser does not constitute or give rise to a prohibited
transaction under Section 406 of ERISA or Section 4975 of the Code, for which no statutory,
regulatory or administrative exemption is available.
Section 4.03 Mutilated, Destroyed, Lost or Stolen Notes. If (i) any mutilated Note is
surrendered to the Indenture Trustee, or the Indenture Trustee receives evidence to its satisfaction
of the destruction, loss or theft of any Note, and (ii) there is delivered to the Indenture Trustee
such security or indemnity as may be required by it and the Issuer to hold the Issuer and the
Indenture Trustee harmless, then, in the absence of notice to the Issuer, the Note Registrar or the
Indenture Trustee that such Note has been acquired by a bona fide purchaser, and provided that the
requirements of Section 8 405 of the UCC are met, the Issuer shall execute, and upon its request the
Indenture Trustee shall authenticate and deliver, in exchange for or in lieu of any such mutilated,
destroyed, lost or stolen Note, a replacement Note of the same class; provided, however, that if any
such destroyed, lost or stolen Note, but not a mutilated Note, shall have become or within seven days
shall be due and payable, instead of issuing a replacement Note, the Issuer may pay such destroyed,
lost or stolen Note when so due or payable without surrender thereof. If, after the delivery of such
replacement Note or payment of a destroyed, lost or stolen Note pursuant to the proviso to the
preceding sentence, a bona fide purchaser of the original Note in lieu of which such replacement Note
was issued presents for payment such original Note, the Issuer and the Indenture Trustee shall be
entitled to recover such replacement Note (or such payment) from the Person to whom it was delivered
or any Person taking such replacement Note from such Person to whom such replacement Note was
delivered or any assignee of such Person, except a bona fide purchaser, and shall be entitled to
recover upon the security or indemnity provided therefor to the extent of any loss, damage, cost or
expense incurred by the Issuer or the Indenture Trustee in connection therewith.
Upon the issuance of any replacement Note under this Section 4.03, the Issuer may require
the payment by the Noteholder of such Note of a sum sufficient to cover any tax or other governmental
charge that may be imposed in relation thereto and any other reasonable expenses (including the fees
and expenses of the Indenture Trustee) connected therewith.
Every replacement Note issued pursuant to this Section 4.03 in replacement of any mutilated,
destroyed, lost or stolen Note shall constitute an original additional contractual obligation of the
Issuer, whether or not the mutilated, destroyed, lost or stolen Note shall be at any time enforceable
by anyone, and shall be entitled to all the benefits of this Indenture equally and proportionately
with any and all other Notes duly issued hereunder.
The provisions of this Section 4.03 are exclusive and shall preclude (to the extent lawful)
all other rights and remedies with respect to the replacement or payment of mutilated, destroyed,
lost or stolen Notes.
Section 4.04 Persons Deemed Owners. Prior to due presentment for registration of
transfer of any Note, the Issuer, the Indenture Trustee and any agent of the Issuer or the Indenture
Trustee may treat the Person in whose name any Note is registered (as of the day of determination) as
the owner of such Note for the purpose of receiving payments of principal of and interest, if any, on
such Note and for all other purposes whatsoever, whether or not such Note be overdue, and none of the
Issuer, the Indenture Trustee or any agent of the Issuer or the Indenture Trustee shall be affected
by notice to the contrary.
Section 4.05 Cancellation. All Notes surrendered for payment, registration of transfer,
exchange or redemption shall, if surrendered to any Person other than the Indenture Trustee, be
delivered to the Indenture Trustee and shall be promptly cancelled by the Indenture Trustee. The
Issuer may at any time deliver to the Indenture Trustee for cancellation any Notes previously
authenticated and delivered hereunder which the Issuer may have acquired in any manner whatsoever,
and all Notes so delivered shall be promptly cancelled by the Indenture Trustee. No Notes shall be
authenticated in lieu of or in exchange for any Notes cancelled as provided in this Section 4.05,
except as expressly permitted by this Indenture. All cancelled Notes may be held or disposed of by
the Indenture Trustee in accordance with its standard retention or disposal policy as in effect at
the time unless the Issuer shall direct by an Issuer Request that they be destroyed or returned to
it; provided, however, that such Issuer Request is timely and the Notes have not been previously
disposed of by the Indenture Trustee.
Section 4.06 Book-Entry Notes. The Notes, upon original issuance, shall be issued in
the form of typewritten Notes representing the Book-Entry Notes, to be delivered to The Depository
Trust Company, the initial Depository, by, or on behalf of, the Issuer. Such Notes shall initially
be registered on the Note Register in the name of Cede & Co., the nominee of the initial Depository,
and no Beneficial Owner shall receive a Definitive Note representing such Beneficial Owner's interest
in such Note, except as provided in Section 4.08. Unless and until definitive, fully registered
Notes (the "Definitive Notes") have been issued to Beneficial Owners pursuant to Section 4.08:
(a) the provisions of this Section 4.06 shall be in full force and effect;
(b) the Note Registrar and the Indenture Trustee shall be entitled to deal with
the Depository for all purposes of this Indenture (including the payment of principal of and interest
on the Notes and the giving of instructions or directions hereunder) as the sole holder of the Notes,
and shall have no obligation to the Beneficial Owners;
(c) to the extent that the provisions of this Section 4.06 conflict with any
other provisions of this Indenture, the provisions of this Section 4.06 shall control;
(d) the rights of Beneficial Owners shall be exercised only through the
Depository and shall be limited to those established by law and agreements between such Owners of
Notes and the Depository or the Depository Participants. Unless and until Definitive Notes are
issued pursuant to Section 4.08, the initial Depository will make book-entry transfers among the
Depository Participants and receive and transmit payments of principal of and interest on the Notes
to such Depository Participants; and
(e) whenever this Indenture requires or permits actions to be taken based upon
instructions or directions of Noteholders of Notes evidencing a specified percentage of the Note
Balances of the Notes, the Depository shall be deemed to represent such percentage only to the extent
that it has received instructions to such effect from Beneficial Owners or Depository Participants
owning or representing, respectively, such required percentage of the beneficial interest in the
Notes and has delivered such instructions to the Indenture Trustee.
Section 4.07 Notices to Depository. Whenever a notice or other communication to the
Noteholders of the Notes is required under this Indenture, unless and until Definitive Notes shall
have been issued to Beneficial Owners pursuant to Section 4.08, the Indenture Trustee shall give all
such notices and communications specified herein to be given to Noteholders of the Notes to the
Depository, and shall have no obligation to the Beneficial Owners.
Section 4.08 Definitive Notes. If (i) the Depositor determines that the Depository is
no longer willing or able to properly discharge its responsibilities with respect to the Notes and
the Depositor is unable to locate a qualified successor, (ii) the Depositor, with the prior consent
of the Beneficial Owners, notifies the Indenture Trustee and the Depository that it has elected to
terminate the book-entry system through the Depository, or (iii) after the occurrence of an Event of
Default, Beneficial Owners of Notes representing beneficial interests aggregating at least a majority
of the aggregate Term Note Balance of the Notes advise the Depository in writing that the
continuation of a book-entry system through the Depository is no longer in the best interests of the
Beneficial Owners, then the Depository shall notify all Beneficial Owners and the Indenture Trustee
of the occurrence of any such event and of the availability of Definitive Notes to Beneficial Owners
requesting the same. Upon surrender by the Depository to the Indenture Trustee of the typewritten
Notes representing the Book-Entry Notes by the Depository (or Percentage Interest of the Book-Entry
Notes being transferred pursuant to clause (iii) above), accompanied by registration instructions,
the Issuer shall execute and the Indenture Trustee shall authenticate the Definitive Notes in
accordance with the instructions of the Depository. None of the Issuer, the Note Registrar or the
Indenture Trustee shall be liable for any delay in delivery of such instructions, and each may
conclusively rely on, and shall be protected in relying on, such instructions. Upon the issuance of
Definitive Notes, the Indenture Trustee shall recognize the Noteholders of the Definitive Notes as
Noteholders.
Section 4.09 Tax Treatment. The Issuer has entered into this Indenture, and the Notes
will be issued, with the intention that, for federal, state and local income, single business and
franchise tax purposes, the Notes will qualify as regular interests in a REMIC as defined in the
Code, which will be treated as indebtedness for purposes of such taxes. The Issuer, by entering into
this Indenture, and each Noteholder, by its acceptance of its Note (and each Beneficial Owner by its
acceptance of an interest in the applicable Book-Entry Note), agree to treat the Notes for federal,
state and local income, single business and franchise tax purposes as regular interests in a REMIC as
defined in the Code, which will be treated as indebtedness for purposes of such taxes.
Section 4.10 Satisfaction and Discharge of Indenture. This Indenture shall cease to be
of further effect with respect to the Notes except as to (i) rights of registration of transfer and
exchange, (ii) substitution of mutilated, destroyed, lost or stolen Notes, (iii) rights of
Noteholders to receive payments of principal thereof and interest thereon, (iv) Sections 3.03, 3.04,
3.06, 3.09, 3.16, 3.18 and 3.19, (v) the rights, obligations and immunities of the Indenture Trustee
hereunder (including the rights of the Indenture Trustee under Section 6.07 and the obligations of
the Indenture Trustee under Section 4.11) and (vi) the rights of Noteholders as beneficiaries hereof
with respect to the property so deposited with the Indenture Trustee payable to all or any of them,
and the Indenture Trustee, on written demand of and at the expense of the Issuer, shall execute
proper instruments acknowledging satisfaction and discharge of this Indenture with respect to the
Notes, when:
(A) either:
(1) all Notes theretofore authenticated and delivered (other than
(i) Notes that have been destroyed, lost or stolen and that have been
replaced or paid as provided in Section 4.03 and (ii) Notes for whose
payment money has theretofore been deposited in trust or segregated and
held in trust by the Issuer and thereafter repaid to the Issuer or
discharged from such trust, as provided in Section 3.03) have been
delivered to the Indenture Trustee for cancellation; or
(2) all Notes not theretofore delivered to the Indenture Trustee
for cancellation:
a) have become due and payable;
b) will become due and payable at the Final Payment Date
within one year; or
c) have been declared immediately due and payable
pursuant to Section 5.02.
and the Issuer, in the case of (a) and (b) above, has irrevocably deposited or caused to be
irrevocably deposited with the Indenture Trustee cash or direct obligations of or
obligations guaranteed by the United States of America (which will mature prior to the date
such amounts are payable), in trust for such purpose, in an amount sufficient to pay and
discharge the entire indebtedness on such Notes and Certificates then Outstanding not
theretofore delivered to the Indenture Trustee for cancellation when due on the Final
Payment Date, as evidenced to the Indenture Trustee by an accountant's letter or an
Officer's Certificate of the Issuer;
(B) the Issuer has paid or caused to be paid all other sums payable
hereunder and under the Insurance Agreement by the Issuer; and
(C) the Issuer has delivered to the Indenture Trustee an Officer's
Certificate and an Opinion of Counsel, each meeting the applicable requirements of
Section 10.01 and each stating that all conditions precedent herein provided for
relating to the satisfaction and discharge of this Indenture have been complied with
and, if the Opinion of Counsel relates to a deposit made in connection with
Section 4.10(A)(2)b. above, such opinion shall further be to the effect that such
deposit will not have any material adverse tax consequences to the Issuer, any
Noteholders or any Certificateholders.
Section 4.11 Application of Trust Money. All monies deposited with the Indenture
Trustee pursuant to Section 4.10 hereof shall be held in trust and applied by it, in accordance with
the provisions of the Notes and this Indenture, to the payment, either directly or through any Paying
Agent or Certificate Paying Agent, as the Indenture Trustee may determine, to the Securityholders of
Securities, of all sums due and to become due thereon for principal and interest; but such monies
need not be segregated from other funds except to the extent required herein or required by law.
Section 4.12 [Reserved].
Section 4.13 Repayment of Monies Held by Paying Agent. In connection with the
satisfaction and discharge of this Indenture with respect to the Notes, all monies then held by any
Paying Agent (other than the Indenture Trustee) under the provisions of this Indenture with respect to
such Notes shall, upon demand of the Issuer, be paid to the Indenture Trustee to be held and applied
according to Section 3.05; and thereupon, such Paying Agent shall be released from all further
liability with respect to such monies.
Section 4.14 Temporary Notes. Pending the preparation of any Definitive Notes, the
Issuer may execute and upon its written direction, the Indenture Trustee may authenticate and make
available for delivery, temporary Notes that are printed, lithographed, typewritten, photocopied or
otherwise produced, in any denomination, substantially of the tenor of the Definitive Notes in lieu
of which they are issued and with such appropriate insertions, omissions, substitutions and other
variations as the officers executing such Notes may determine, as evidenced by their execution of
such Notes.
If temporary Notes are issued, the Issuer will cause Definitive Notes to be prepared without
unreasonable delay. After the preparation of the Definitive Notes, the temporary Notes shall be
exchangeable for Definitive Notes upon surrender of the temporary Notes at the office or agency of
the Indenture Trustee, without charge to the Noteholder. Upon surrender for cancellation of any one
or more temporary Notes, the Issuer shall execute and the Indenture Trustee shall authenticate and
make available for delivery, in exchange therefor, Definitive Notes of authorized denominations and
of like tenor and aggregate principal amount. Until so exchanged, such temporary Notes shall in all
respects be entitled to the same benefits under this Indenture as Definitive Notes.
ARTICLE V
Default And Remedies
Section 5.01 Events of Default. The Issuer shall deliver to the Indenture Trustee
within five days after learning of the occurrence of any event that with the giving of notice and the
lapse of time would become an Event of Default under clause (c) of the definition of "Event of
Default" written notice in the form of an Officer's Certificate of its status and what action the
Issuer is taking or proposes to take with respect thereto.
Section 5.02 Acceleration of Maturity; Rescission and Annulment. If an Event of Default
shall occur and be continuing, then and in every such case the Indenture Trustee, acting at the
direction of the Noteholders of Notes representing not less than a majority of the aggregate Note
Balance of the Notes, may declare the Notes to be immediately due and payable by a notice in writing
to the Issuer (and to the Indenture Trustee if given by Noteholders); and upon any such declaration,
the unpaid principal amount of the Notes, together with accrued and unpaid interest thereon through
the date of acceleration, shall become immediately due and payable.
At any time after such declaration of acceleration of maturity with respect to an Event of
Default has been made and before a judgment or decree for payment of the money due has been obtained
by the Indenture Trustee as hereinafter provided in this Article V, the Noteholders of Notes
representing a majority of the aggregate Note Balance of the Notes, by written notice to the Issuer
and the Indenture Trustee, may in writing waive the related Event of Default and rescind and annul
such declaration and its consequences if:
(a) the Issuer has paid or deposited with the Indenture Trustee a sum
sufficient to pay:
(i) all payments of principal of and interest on the Notes and all
other amounts that would then be due hereunder or upon the Notes if the Event of Default
giving rise to such acceleration had not occurred;
(ii) all sums paid or advanced by the Indenture Trustee hereunder and
the reasonable compensation, expenses, disbursements and advances of the Indenture Trustee
and its agents and counsel; and
(iii) all Events of Default, other than the nonpayment of the principal
of the Notes that has become due solely by such acceleration, have been cured or waived as
provided in Section 5.12.
No such rescission shall affect any subsequent default or impair any right consequent
thereto.
Section 5.03 Collection of Indebtedness and Suits for Enforcement by Indenture Trustee.
(a) The Issuer covenants that if default in the payment of (i) any interest on
any Note when the same becomes due and payable, and such default continues for a period of five days,
or (ii) the principal of or any installment of the principal of any Note when the same becomes due
and payable, the Issuer shall, upon demand of the Indenture Trustee, pay to it, for the benefit of
the Noteholders, the entire amount then due and payable on the Notes for principal and interest, with
interest on the overdue principal, and in addition thereto such further amount as shall be sufficient
to cover the costs and expenses of collection, including the reasonable compensation, expenses,
disbursements and advances of the Indenture Trustee and its agents and counsel.
(b) In case the Issuer shall fail forthwith to pay such amounts upon such
demand, the Indenture Trustee, in its own name and as trustee of an express trust, subject to the
provisions of Section 10.17 hereof, may institute a Proceeding for the collection of the sums so due
and unpaid, and may prosecute such Proceeding to judgment or final decree, and may enforce the same
against the Issuer or other obligor on the Notes and collect in the manner provided by law out of the
property of the Issuer or other obligor on the Notes, wherever situated, the monies adjudged or
decreed to be payable.
(c) If an Event of Default shall occur and be continuing, the Indenture
Trustee, subject to the provisions of Section 10.17 hereof, may, as more particularly provided in
Section 5.04, in its discretion proceed to protect and enforce its rights and the rights of the
Noteholders by such appropriate Proceedings as the Indenture Trustee shall deem most effective to
protect and enforce any such rights, whether for the specific enforcement of any covenant or
agreement in this Indenture or in aid of the exercise of any power granted herein, or to enforce any
other proper remedy or legal or equitable right vested in the Indenture Trustee by this Indenture or
by law.
(d) If there shall be pending, relative to the Issuer or any other obligor on
the Notes or any Person having or claiming an ownership interest in the Trust Estate, Proceedings
under Title 11 of the United States Code or any other applicable federal or state bankruptcy,
insolvency or other similar law, or if a receiver, assignee or trustee in bankruptcy or
reorganization, liquidator, sequestrator or similar official shall have been appointed for or taken
possession of the Issuer or its property or such other obligor or Person, or if there shall be any
other comparable judicial Proceedings relative to the Issuer or other any other obligor on the Notes,
or relative to the creditors or property of the Issuer or such other obligor, then the Indenture
Trustee, irrespective of whether the principal of any Notes shall then be due and payable as therein
expressed or by declaration or otherwise, and irrespective of whether the Indenture Trustee shall
have made any demand pursuant to the provisions of this Section, shall be entitled and empowered, by
intervention in such Proceedings or otherwise:
(i) to file and prove a claim or claims for the entire amount of
principal and interest owing and unpaid in respect of the Notes and to file such other
papers or documents as may be necessary or advisable in order to have the claims of the
Indenture Trustee (including any claim for reasonable compensation to the Indenture Trustee
and each predecessor Indenture Trustee, and their respective agents, attorneys and counsel,
and for reimbursement of all expenses and liabilities incurred, and all advances made, by
the Indenture Trustee and each predecessor Indenture Trustee, except as a result of
negligence, willful misconduct or bad faith) and of the Noteholders allowed in such
Proceedings;
(ii) unless prohibited by applicable law and regulations, to vote on
behalf of the Noteholders in any election of a trustee, a standby trustee or Person
performing similar functions in any such Proceedings;
(iii) to collect and receive any monies or other property payable or
deliverable on any such claims and to distribute all amounts received with respect to the
claims of the Noteholders and of the Indenture Trustee on their behalf; and
(iv) to file such proofs of claim and other papers or documents as may
be necessary or advisable in order to have the claims of the Indenture Trustee or the
Noteholders allowed in any judicial proceedings relative to the Issuer, its creditors and
its property;
and any trustee, receiver, liquidator, custodian or other similar official in any such Proceeding is
hereby authorized by each of such Noteholders to make payments to the Indenture Trustee, and, in the
event the Indenture Trustee shall consent to the making of payments directly to such Noteholders, to
pay to the Indenture Trustee such amounts as shall be sufficient to cover reasonable compensation to
the Indenture Trustee, each predecessor Indenture Trustee and their respective agents, attorneys and
counsel, and all other expenses and liabilities incurred, and all advances made, by the Indenture
Trustee and each predecessor Indenture Trustee, except as a result of negligence, willful misconduct
or bad faith.
(e) Nothing herein contained shall be deemed to authorize the Indenture Trustee
to authorize or consent to or vote for or accept or adopt on behalf of any Noteholder any plan of
reorganization, arrangement, adjustment or composition affecting the Notes or the rights of any
Noteholder thereof or to authorize the Indenture Trustee to vote in respect of the claim of any
Noteholder in any such proceeding except, as aforesaid, to vote for the election of a trustee in
bankruptcy or similar Person.
(f) All rights of action and of asserting claims under this Indenture, or under
any of the Notes, may be enforced by the Indenture Trustee without the possession of any of the Notes
or the production thereof in any trial or other Proceedings relative thereto, and any such action or
proceedings instituted by the Indenture Trustee shall be brought in its own name as trustee of an
express trust, and any recovery of judgment, subject to the payment of the expenses, disbursements
and compensation of the Indenture Trustee, each predecessor Indenture Trustee and their respective
agents and attorneys, shall be for the ratable benefit of the Holders of the Notes.
(g) In any Proceedings to which the Indenture Trustee shall be a party
(including any Proceedings involving the interpretation of any provision of this Indenture), the
Indenture Trustee shall be held to represent all Noteholders, and it shall not be necessary to make
any Noteholder a party to any such Proceedings.
Section 5.04 Remedies; Priorities.
(a) If an Event of Default shall have occurred and be continuing, then the
Indenture Trustee, subject to the provisions of Section 10.17 hereof, shall do one or more of the
following, in each case subject to Section 5.05:
(i) institute Proceedings in its own name and as trustee of an express
trust for the collection of all amounts then payable on the Notes or under this Indenture
with respect thereto, whether by declaration or otherwise, and all amounts payable under the
Insurance Agreement, enforce any judgment obtained, and collect from the Issuer and any
other obligor on the Notes monies adjudged due;
(ii) institute Proceedings from time to time for the complete or
partial foreclosure of this Indenture with respect to the Trust Estate;
(iii) exercise any remedies of a secured party under the UCC and take
any other appropriate action to protect and enforce the rights and remedies of the Indenture
Trustee and the Noteholders; and
(iv) sell the Trust Estate or any portion thereof or rights or interest
therein, at one or more public or private sales called and conducted in any manner permitted
by law;
provided, however, that the Indenture Trustee may not sell or otherwise liquidate the Trust Estate
following an Event of Default, unless (A) the Indenture Trustee obtains the consent of the
Noteholders of 100% of the aggregate Note Balance of the Notes), (B) the proceeds of such sale or
liquidation distributable to Noteholders are sufficient to discharge in full all amounts then due and
unpaid upon the Notes for principal and interest or (C) the Indenture Trustee determines that the
Mortgage Loans will not continue to provide sufficient funds for the payment of principal of and
interest on the Notes as they would have become due if the Notes had not been declared due and
payable, and the Indenture Trustee obtains the consent the Noteholders of 66 2/3% of the aggregate
Note Balance of the Notes). In determining such sufficiency or insufficiency with respect to clause
(B) and (C) above, the Indenture Trustee may, but need not, obtain and rely, and shall be protected
in relying in good faith, upon an opinion of an Independent investment banking or accounting firm of
national reputation as to the feasibility of such proposed action and as to the sufficiency of the
Trust Estate for such purpose. Notwithstanding the foregoing, provided that a Servicing Default
shall not have occurred, any Sale (as defined in Section 5.15 hereof) of the Trust Estate shall be
made subject to the continued servicing of the Mortgage Loans by the Servicer as provided in the
Servicing Agreement. Notwithstanding any sale of the Mortgage Loans pursuant to this Section 5.04(a),
the Indenture Trustee shall, for so long as any principal or accrued interest on the Notes remains
unpaid, continue to act as Indenture Trustee hereunder.
(b) If the Indenture Trustee collects any money or property pursuant to this
Article V, it shall pay out such money or property in the following order:
FIRST: to the Indenture Trustee for amounts due under Section 6.07;
SECOND: to the Noteholders of each Class of Notes, pro rata, for amounts due and
unpaid on the related Notes for interest, including accrued and unpaid interest on
the Notes for any prior Payment Date, ratably, without preference or priority of any
kind, according to the amounts due and payable on such Notes for interest from
amounts available in the Trust Estate for such Noteholders;
THIRD: to the Noteholders of each Class of Notes, pro rata, for amounts due and
unpaid on the related Notes for principal, ratably, without preference or priority
of any kind, according to the amounts due and payable on such Notes for principal,
from amounts available in the Trust Estate for such Noteholders, until the
respective Note Balances of such Class have been reduced to zero;
FOURTH: to the Certificate Paying Agent for amounts due under Article VIII of the
Trust Agreement; and
SEVENTH: to the payment of the remainder, if any, to the Issuer or any other person
legally entitled thereto.
The Indenture Trustee may fix a record date and payment date for any payment to Noteholders
pursuant to this Section 5.04. At least 15 days before such record date, the Indenture Trustee shall
mail to each Noteholder a notice that states the record date, the payment date and the amount to be
paid.
Section 5.05 Optional Preservation of the Trust Estate. If the Notes have been declared
due and payable under Section 5.02 following an Event of Default and such declaration and its
consequences have not been rescinded and annulled, the Indenture Trustee may, but need not, elect to
take and maintain possession of the Trust Estate. It is the desire of the parties hereto and the
Noteholders that there be at all times sufficient funds for the payment of principal of and interest
on the Notes and other obligations of the Issuer, and the Indenture Trustee shall take such desire
into account when determining whether or not to take and maintain possession of the Trust Estate. In
determining whether to take and maintain possession of the Trust Estate, the Indenture Trustee may,
but need not, obtain and rely, and shall be protected in relying in good faith, upon an opinion of an
Independent investment banking or accounting firm of national reputation as to the feasibility of
such proposed action and as to the sufficiency of the Trust Estate for such purpose.
Section 5.06 Limitation of Suits. No Noteholder shall have any right to institute any
Proceeding, judicial or otherwise, with respect to this Indenture, or for the appointment of a
receiver or trustee, or for any other remedy hereunder, unless and subject to the provisions of
Section 10.17 hereof:
(a) such Noteholder shall have previously given written notice to the Indenture
Trustee of a continuing Event of Default;
(b) the Noteholders of not less than 25% of the aggregate Note Balance of the
Notes shall have made written request to the Indenture Trustee to institute such Proceeding in
respect of such Event of Default in its own name as Indenture Trustee hereunder;
(c) such Noteholder or Noteholders shall have offered the Indenture Trustee
reasonable indemnity against the costs, expenses and liabilities to be incurred by it in complying
with such request;
(d) the Indenture Trustee for 60 days after its receipt of such notice, request
and offer of indemnity shall have failed to institute such Proceedings; and
(e) no direction inconsistent with such written request shall have been given
to the Indenture Trustee during such 60-day period by the Noteholders of a majority of the aggregate
Note Balance of the Notes.
It is understood and intended that no Noteholder shall have any right in any manner whatever
by virtue of, or by availing itself of, any provision of this Indenture to affect, disturb or
prejudice the rights of any other Noteholders or to obtain or to seek to obtain priority or
preference over any other Noteholders or to enforce any right under this Indenture, except in the
manner herein provided.
In the event the Indenture Trustee shall receive conflicting or inconsistent requests and
indemnity from two or more groups of Noteholders, each representing less than a majority of the
aggregate Note Balance of the Notes, the Indenture Trustee shall act at the direction of the group of
Noteholders with the greater Note Balance. In the event that the Indenture Trustee shall receive
conflicting or inconsistent requests and indemnity from two or more groups of Noteholders
representing the same Note Balance, then the Indenture Trustee in its sole discretion may determine
what action, if any, shall be taken, notwithstanding any other provisions of this Indenture.
Section 5.07 Unconditional Rights of Noteholders to Receive Principal and Interest.
Subject to the provisions of this Indenture, the Noteholder of any Note shall have the right, which
is absolute and unconditional, to receive payment of the principal of and interest, if any, on such
Note on or after the respective due dates thereof expressed in such Note or in this Indenture and to
institute suit for the enforcement of any such payment, and such right shall not be impaired without
the consent of such Noteholder.
Section 5.08 Restoration of Rights and Remedies. If the Indenture Trustee or any
Noteholder has instituted any Proceeding to enforce any right or remedy under this Indenture and such
Proceeding has been discontinued or abandoned for any reason or has been determined adversely to the
Indenture Trustee or to such Noteholder, then and in every such case the Issuer, the Indenture
Trustee and the Noteholders shall, subject to any determination in such Proceeding, be restored
severally and respectively to their former positions hereunder, and thereafter all rights and
remedies of the Indenture Trustee and the Noteholders shall continue as though no such Proceeding had
been instituted.
Section 5.09 Rights and Remedies Cumulative. No right or remedy herein conferred upon
or reserved to the Indenture Trustee or the Noteholders is intended to be exclusive of any other
right or remedy, and every right and remedy shall, to the extent permitted by law, be cumulative and
in addition to every other right and remedy given hereunder or now or hereafter existing at law, in
equity or otherwise. The assertion or employment of any right or remedy hereunder, or otherwise,
shall not prevent the concurrent assertion or employment of any other appropriate right or remedy.
Section 5.10 Delay or Omission Not a Waiver. No delay or omission of the Indenture
Trustee or any Noteholder to exercise any right or remedy accruing upon any Event of Default shall
impair any such right or remedy or constitute a waiver of any such Event of Default or an
acquiescence therein. Every right and remedy given by this Article V or by law to the Indenture
Trustee or to the Noteholders may be exercised from time to time, and as often as may be deemed
expedient, by the Indenture Trustee or by the Noteholders, as the case may be.
Section 5.11 Control by Noteholders. The Noteholders of a majority of the aggregate
Note Balance of Notes shall have the right to direct the time, method and place of conducting any
Proceeding for any remedy available to the Indenture Trustee with respect to the Notes or exercising
any trust or power conferred on the Indenture Trustee, provided that:
(a) such direction shall not be in conflict with any rule of law or with this
Indenture;
(b) subject to the express terms of Section 5.04, any direction to the
Indenture Trustee to sell or liquidate the Trust Estate shall be by the Noteholders of Notes
representing not less than 100% of the aggregate Note Balance of the Notes;
(c) if the conditions set forth in Section 5.05 shall have been satisfied and
the Indenture Trustee elects to retain the Trust Estate pursuant to such Section, then any direction
to the Indenture Trustee by Noteholders of Notes representing less than 100% of the aggregate Note
Balance of the Notes to sell or liquidate the Trust Estate shall be of no force and effect; and
(d) the Indenture Trustee may take any other action deemed proper by the
Indenture Trustee that is not inconsistent with such direction.
Notwithstanding the rights of Noteholders set forth in this Section, subject to Section 6.01, the
Indenture Trustee need not take any action that it determines (in its sole discretion) might involve
it in liability or might materially adversely affect the rights of any Noteholders not consenting to
such action, unless the Trustee has received satisfactory indemnity from a Noteholder.
Section 5.12 Waiver of Past Defaults. Prior to the declaration of the acceleration of
the maturity of the Notes as provided in Section 5.02, the Noteholders of not less than a majority
of the aggregate Note Balance of the Notes, may waive any past Event of Default and its consequences,
except an Event of Default (a) with respect to payment of principal of or interest on any of the
Notes or (b) in respect of a covenant or provision hereof that cannot be modified or amended without
the consent of the Noteholder of each Note. In the case of any such waiver, the Issuer, the
Indenture Trustee and the Noteholders shall be restored to their respective former positions and
rights hereunder; but no such waiver shall extend to any subsequent or other Event of Default or
impair any right consequent thereto.
Upon any such waiver, any Event of Default arising therefrom shall be deemed to have been
cured and not to have occurred, for every purpose of this Indenture; but no such waiver shall extend
to any subsequent or other Event of Default or impair any right consequent thereto.
Section 5.13 Undertaking for Costs. All parties to this Indenture agree, and each
Noteholder by such Noteholder's acceptance of the related Note shall be deemed to have agreed, that
any court may in its discretion require, in any Proceeding for the enforcement of any right or remedy
under this Indenture, or in any Proceeding against the Indenture Trustee for any action taken,
suffered or omitted by it as Indenture Trustee, the filing by any party litigant in such Proceeding
of an undertaking to pay the costs of such Proceeding, and that such court may in its discretion
assess reasonable costs, including reasonable attorneys' fees, against any party litigant in such
Proceeding, having due regard to the merits and good faith of the claims or defenses made by such
party litigant; but the provisions of this Section 5.13 shall not apply to (a) any Proceeding
instituted by the Indenture Trustee, (b) any Proceeding instituted by any Noteholder, or group of
Noteholders, in each case holding in the aggregate more than 10% of the aggregate Note Balance of the
Notes or (c) any Proceeding instituted by any Noteholder for the enforcement of the payment of
principal of or interest on any Note on or after the respective due dates expressed in such Note and
in this Indenture.
Section 5.14 Waiver of Stay or Extension Laws. The Issuer covenants (to the extent that
it may lawfully do so) that it will not at any time insist upon, or plead or in any manner
whatsoever, claim or take the benefit or advantage of, any stay or extension law wherever enacted,
now or at any time hereafter in force, that may affect the covenants or the performance of this
Indenture; and the Issuer (to the extent that it may lawfully do so) hereby expressly waives all
benefit or advantage of any such law, and covenants that it shall not hinder, delay or impede the
execution of any power herein granted to the Indenture Trustee, but will suffer and permit the
execution of every such power as though no such law had been enacted.
Section 5.15 Sale of Trust Estate.
(a) The power to effect any sale or other disposition (a "Sale") of any portion
of the Trust Estate pursuant to Section 5.04 is expressly subject to the provisions of Section 5.05
and this Section 5.15. The power to effect any such Sale shall not be exhausted by any one or more
Sales as to any portion of the Trust Estate remaining unsold, but shall continue unimpaired until the
entire Trust Estate shall have been sold or all amounts payable on the Notes and under this Indenture
and under the Insurance Agreement shall have been paid. The Indenture Trustee may from time to time
postpone any public Sale by public announcement made at the time and place of such Sale. The
Indenture Trustee hereby expressly waives its right to any amount fixed by law as compensation for
any Sale.
(b) The Indenture Trustee shall not in any private Sale sell the Trust Estate,
or any portion thereof, unless:
(i) the proceeds of such Sale would be not less than the entire amount
that would be payable to the Noteholders under the Notes and the Certificateholders under
the Certificates, in full payment thereof in accordance with Section 5.02, on the Payment
Date next succeeding the date of such Sale, or
(ii) the Indenture Trustee determines, in its sole discretion, that the
conditions for retention of the Trust Estate set forth in Section 5.05 cannot be satisfied
(in making any such determination, the Indenture Trustee may rely and shall be protected in
relying in good faith upon an opinion of an Independent investment banking firm obtained and
delivered as provided in Section 5.05).
The purchase by the Indenture Trustee of all or any portion of the Trust Estate at a private Sale
shall not be deemed a Sale or other disposition thereof for purposes of this Section 5.15(b).
(c) Unless the Noteholders shall have otherwise consented or directed the
Indenture Trustee, at any public Sale of all or any portion of the Trust Estate at which a minimum
bid equal to or greater than the amount described in paragraph (ii) of Section 5.15(b) has not been
established by the Indenture Trustee and no Person bids an amount equal to or greater than such
amount, then the Indenture Trustee shall bid an amount at least $1.00 more than the highest other
bid, which bid shall be subject to the provisions of Section 5.15(d)(ii) herein.
(d) In connection with a Sale of all or any portion of the Trust Estate:
(i) any Noteholder may bid for purchase the property offered for sale,
and upon compliance with the terms of sale may hold, retain and possess and dispose of such
property, without further accountability, and may, in paying the purchase money therefor,
deliver any Notes or claims for interest thereon in lieu of cash up to the amount which
shall, upon distribution of the net proceeds of such sale, be payable thereon, and such
Notes, in case the amounts so payable thereon shall be less than the amount due thereon,
shall be returned to the Noteholders thereof after being appropriately stamped to show such
partial payment;
(ii) the Indenture Trustee may bid for and acquire the property offered
for Sale in connection with any Sale thereof and, subject to any requirements of, and to the
extent permitted by, applicable law in connection therewith, may purchase all or any portion
of the Trust Estate in a private sale. In lieu of paying cash therefor, the Indenture
Trustee may make settlement for the purchase price by crediting the gross Sale price against
the sum of (A) the amount that would be distributable to the Noteholders and the
Certificateholders as a result of such Sale in accordance with Section 5.04(b) on the
Payment Date next succeeding the date of such Sale and (B) the expenses of the Sale and of
any Proceedings in connection therewith that are reimbursable to it, without being required
to produce the Notes in order to complete any such Sale or in order for the net Sale price
to be credited against such Notes, and any property so acquired by the Indenture Trustee
shall be held and dealt with by it in accordance with the provisions of this Indenture;
(iii) the Indenture Trustee shall execute and deliver an appropriate
instrument of conveyance transferring its interest in any portion of the Trust Estate in
connection with a Sale thereof;
(iv) the Indenture Trustee is hereby irrevocably appointed the agent
and attorney-in-fact of the Issuer to transfer and convey its interest in any portion of the
Trust Estate in connection with a Sale thereof, and to take all action necessary to effect
such Sale; and
(v) no purchaser or transferee at such a Sale shall be bound to
ascertain the Indenture Trustee's authority, inquire into the satisfaction of any conditions
precedent or see to the application of any monies.
Section 5.16 Action on Notes. The Indenture Trustee's right to seek and recover
judgment on the Notes or under this Indenture shall not be affected by the seeking, obtaining or
application of any other relief under or with respect to this Indenture. Neither the lien of this
Indenture nor any rights or remedies of the Indenture Trustee or the Noteholders shall be impaired by
the recovery of any judgment by the Indenture Trustee against the Issuer or by the levy of any
execution under such judgment upon any portion of the Trust Estate or upon any of the assets of the
Issuer. Any money or property collected by the Indenture Trustee shall be applied in accordance with
Section 5.04(b).
Section 5.17 Performance and Enforcement of Certain Obligations.
(a) Promptly following a written request from the Indenture Trustee, the
Issuer, in its capacity as owner of the Mortgage Loans, shall take all such lawful action as the
Indenture Trustee may request to cause the Issuer to compel or secure the performance and observance
by the Sellers and the Servicer, as applicable, of each of their obligations to the Issuer under or
in connection with the Purchase Agreement and the Servicing Agreement, and to exercise any and all
rights, remedies, powers and privileges lawfully available to the Issuer under or in connection with
the Purchase Agreement and the Servicing Agreement to the extent and in the manner directed by the
Indenture Trustee, as pledgee of the Mortgage Loans, including the transmission of notices of default
on the part of the Sellers or the Servicer thereunder and the institution of legal or administrative
actions or proceedings to compel or secure performance by the Sellers or the Servicer of each of
their obligations under the Purchase Agreement and the Servicing Agreement.
(b) If an Event of Default shall have occurred and be continuing, the Indenture
Trustee, as pledgee of the Mortgage Loans may, and at the direction (which direction shall be in
writing or by telephone (confirmed in writing promptly thereafter)) of the Noteholders of 66 2/3% of
the aggregate Note Balance of the Notes, shall, exercise all rights, remedies, powers, privileges and
claims of the Issuer against the Sellers or the Servicer under or in connection with the Purchase
Agreement and the Servicing Agreement, including the right or power to take any action to compel or
secure performance or observance by the Sellers or the Servicer, as the case may be, of each of their
obligations to the Issuer thereunder and to give any consent, request, notice, direction, approval,
extension or waiver under the Purchase Agreement and the Servicing Agreement, as the case may be, and
any right of the Issuer to take such action shall not be suspended. In connection therewith, as
determined by the Indenture Trustee, the Issuer shall take all actions necessary to effect the
transfer of the Mortgage Loans to the Indenture Trustee.
ARTICLE VI
The Indenture Trustee
Section 6.01 Duties of Indenture Trustee.
(a) If an Event of Default shall have occurred and be continuing, the Indenture
Trustee shall exercise the rights and powers vested in it by this Indenture and use the same degree
of care and skill in their exercise as a prudent Person would exercise or use under the circumstances
in the conduct of such Person's own affairs.
(b) Except during the continuance of an Event of Default:
(i) the Indenture Trustee undertakes to perform such duties and only
such duties as are specifically set forth in this Indenture and no implied covenants or
obligations shall be read into this Indenture against the Indenture Trustee; and
(ii) in the absence of bad faith on its part, the Indenture Trustee may
conclusively rely, as to the truth of the statements and the correctness of the opinions
expressed therein, upon certificates, reports or opinions furnished to the Indenture Trustee
and conforming to the requirements of this Indenture; provided, however, that the Indenture
Trustee shall examine the certificates, reports and opinions to determine whether or not
they conform to the requirements of this Indenture.
(c) The Indenture Trustee may not be relieved from liability for its own
negligent action, its own negligent failure to act or its own willful misconduct, except that:
(i) this paragraph does not limit the effect of Section 6.01(a);
(ii) the Indenture Trustee shall not be liable for any error of
judgment made in good faith by a Responsible Officer unless it is proved that the Indenture
Trustee was negligent in ascertaining the pertinent facts; and
(iii) the Indenture Trustee shall not be liable with respect to any
action it takes or omits to take in good faith in accordance with a direction received by it
pursuant to Section 5.11.
(d) The Indenture Trustee shall not be liable for interest on any money
received by it except as the Indenture Trustee may agree in writing with the Issuer.
(e) Money held in trust by the Indenture Trustee need not be segregated from
other funds except to the extent required by law or the terms of this Indenture or the Trust
Agreement.
(f) No provision of this Indenture shall require the Indenture Trustee to
expend or risk its own funds or otherwise incur financial liability in the performance of any of its
duties hereunder or in the exercise of any of its rights or powers, if it shall have reasonable
grounds to believe that repayment of such funds or adequate indemnity against such risk or liability
is not reasonably assured to it.
(g) Every provision of this Indenture relating to the conduct or affecting the
liability of or affording protection to the Indenture Trustee shall be subject to the provisions of
this Section and to the provisions of TIA.
(h) The Indenture Trustee hereby accepts appointment as Certificate Paying
Agent under the Trust Agreement and agrees to be bound by the provisions of the Trust Agreement
relating to the Certificate Paying Agent. The Indenture Trustee hereby agrees to be bound by the
provisions of Article IX of the Trust Agreement.
(i) The Indenture Trustee shall not be required to take notice or be deemed to
have notice or knowledge of any Event of Default (except for an Event of Default specified in
clause (a) of the definition thereof) unless a Responsible Officer of the Indenture Trustee shall have
received written notice or have actual knowledge thereof. In the absence of receipt of such notice
or such knowledge, the Indenture Trustee may conclusively assume that there is no default or Event of
Default.
(j) The Indenture Trustee shall have no duty to see to any recording or filing
of any financing statement or continuation statement evidencing a security interest or to see to the
maintenance of any such recording or filing or to any rerecording or refiling of any thereof.
Section 6.02 Rights of Indenture Trustee.
(a) The Indenture Trustee may rely and shall be protected in acting or
refraining from acting in good faith upon any resolution, Officer's Certificate, opinion of counsel,
certificate of auditors, or any other certificate, statement, instrument, report, notice, consent or
other document believed by it to be genuine and to have been signed or presented by the proper
person. The Indenture Trustee need not investigate any fact or matter stated in any such document.
(b) Before the Indenture Trustee acts or refrains from acting, it may require
an Officer's Certificate or an Opinion of Counsel. The Indenture Trustee shall not be liable for any
action it takes or omits to take in good faith in reliance on any such Officer's Certificate or
Opinion of Counsel.
(c) The Indenture Trustee may execute any of the trusts or powers hereunder or
perform any duties hereunder either directly or by or through agents or attorneys or a custodian or
nominee, and the Indenture Trustee shall not be responsible for any misconduct or negligence on the
part of, or for the supervision of, any such agent, attorney, custodian or nominee appointed with due
care by it hereunder.
(d) The Indenture Trustee shall not be liable for any action it takes or omits
to take in good faith which it believes to be authorized or within its rights or powers; provided,
however, that the Indenture Trustee's conduct does not constitute willful misconduct, negligence or
bad faith.
(e) The Indenture Trustee may consult with counsel, and the advice or opinion
of counsel with respect to legal matters relating to this Indenture and the Notes shall be full and
complete authorization and protection from liability in respect to any action taken, omitted or
suffered by it hereunder in good faith and in accordance with the advice or opinion of such counsel.
(f) The Indenture Trustee shall not be personally liable for any action taken,
suffered or omitted by it in good faith and believed by it to be authorized or within the discretion
or rights or powers conferred upon it by this Indenture, unless it shall be proved that the Indenture
Trustee was negligent in ascertaining the pertinent facts.
(g) Prior to the occurrence of an Event of Default hereunder, and after the
curing or waiver of all Events of Default that may have occurred, the Indenture Trustee shall not be
bound to make any investigation into the facts or matters stated in any resolution, certificate,
statement, instrument, opinion, report, notice, request, consent, order, approval, bond or other
paper or document, unless requested in writing to do so by the Noteholders representing a majority of
the aggregate Note Balance; provided, however, that if the payment within a reasonable time to the
Indenture Trustee of the costs, expenses or liabilities likely to be incurred by it in the making of
such investigation is, in the opinion of the Indenture Trustee, not assured to the Indenture Trustee
by the security afforded to it by the terms of this Indenture, the Indenture Trustee may require
indemnity satisfactory to the Indenture Trustee against such cost, expense or liability as a
condition to taking any such action.
(h) The Indenture Trustee shall be under no obligation to exercise any of the
trusts or powers vested in it by this Indenture or to institute, conduct or defend any litigation
hereunder or in relation hereto at the request, order or direction of any of the Noteholders,
pursuant to the provisions of this Indenture, unless the Noteholders shall have offered to the
Indenture Trustee reasonable security or indemnity against the costs, expenses and liabilities which
may be incurred therein or thereby; nothing contained herein shall, however, relieve the Indenture
Trustee of the obligation, upon the occurrence of an Event of Default (which has not been cured or
waived), to exercise such of the rights and powers vested in it by this Indenture, and to use the
same degree of care and skill in their exercise as a prudent investor would exercise or use under the
circumstances in the conduct of such investor's own affairs.
Section 6.03 Individual Rights of Indenture Trustee. The Indenture Trustee in its
individual or any other capacity may become the owner or pledgee of Notes and may otherwise deal with
the Issuer or its Affiliates with the same rights it would have if it were not Indenture Trustee.
Any Note Registrar, co-registrar or co-paying agent may do the same with like rights. However, the
Indenture Trustee must comply with Sections 6.11 and 6.12.
Section 6.04 Indenture Trustee's Disclaimer. The Indenture Trustee shall not be
(i) responsible for and makes no representation as to the validity or adequacy of this Indenture or
the Notes, (ii) accountable for the Issuer's use of the proceeds from the Notes or (iii) responsible
for any statement of the Issuer in this Indenture or in any document issued in connection with the
sale of the Notes or in the Notes, other than the Indenture Trustee's certificate of authentication
thereon.
Section 6.05 Notice of Event of Default. If an Event of Default shall occur and be
continuing, and if such Event of Default is known to a Responsible Officer of the Indenture Trustee,
the Indenture Trustee shall mail to each Noteholder notice of such Event of Default within 90 days
after it occurs. Except in the case of an Event of Default with respect to the payment of principal
of or interest on any Note, the Indenture Trustee may withhold such notice if and so long as a
committee of its Responsible Officers in good faith determines that withholding such notice is in the
interests of the Noteholders.
Section 6.06 Reports by Indenture Trustee to Noteholders. The Indenture Trustee shall
deliver to each Noteholder such information as may be required to enable such Noteholder to prepare
its federal and state income tax returns. In addition, upon Issuer Request, the Indenture Trustee
shall promptly furnish such information reasonably requested by the Issuer that is reasonably
available to the Indenture Trustee to enable the Issuer to perform its federal and state income tax
reporting obligations.
Section 6.07 Compensation and Indemnity. The Indenture Trustee shall be compensated and
indemnified by the Servicer in accordance with Section 6.06 of the Servicing Agreement. All amounts
owing the Indenture Trustee hereunder in excess of such amount, as well as any amount owed to the
Indenture Trustee in accordance with Section 6.06 of the Servicing Agreement, to the extent the
Servicer has failed to pay such amount, shall be paid solely as provided in Section 3.05 hereof
(subject to the priorities set forth therein). The Indenture Trustee's compensation shall not be
limited by any law on compensation of a trustee of an express trust. The Issuer shall reimburse the
Indenture Trustee for all reasonable out-of-pocket expenses incurred or made by it, including costs
of collection, in addition to the compensation for its services. Such expenses shall include the
reasonable compensation, expenses, disbursements and advances of the Indenture Trustee's agents,
counsel, accountants and experts. The Issuer shall indemnify the Indenture Trustee against any and
all loss, liability or expense (including attorneys' fees) incurred by it in connection with the
administration of this trust and the performance of its duties hereunder. The Indenture Trustee
shall notify the Issuer promptly of any claim for which it may seek indemnity. Failure by the
Indenture Trustee to so notify the Issuer shall not relieve the Issuer of its obligations hereunder.
The Issuer shall defend any such claim, and the Indenture Trustee may have separate counsel and the
Issuer shall pay the fees and expenses of such counsel. The Issuer is not obligated to reimburse any
expense or indemnify against any loss, liability or expense incurred by the Indenture Trustee through
the Indenture Trustee's own willful misconduct, negligence or bad faith.
The Issuer's payment obligations to the Indenture Trustee pursuant to this Section 6.07
shall survive the discharge of this Indenture or the termination or resignation of the Indenture
Trustee. When the Indenture Trustee incurs expenses after the occurrence of an Event of Default
specified in clause (c) or (d) of the definition thereof with respect to the Issuer, such expenses
are intended to constitute expenses of administration under Title 11 of the United States Code or any
other applicable federal or state bankruptcy, insolvency or similar law.
Section 6.08 Replacement of Indenture Trustee. No resignation or removal of the
Indenture Trustee and no appointment of a successor Indenture Trustee shall become effective until
the acceptance of appointment by the successor Indenture Trustee pursuant to this Section 6.08. The
Indenture Trustee may resign at any time by so notifying the Issuer. The Noteholders of a majority
of the aggregate Note Balance of the Notes may remove the Indenture Trustee by so notifying the
Indenture Trustee (if given by such Noteholders) and may appoint a successor Indenture Trustee.
Unless a Servicer Default has occurred and is continuing, the appointment of any successor Indenture
Trustee shall be subject to the prior written approval of the Servicer. The Issuer shall remove the
Indenture Trustee if:
(a) the Indenture Trustee fails to comply with Section 6.11;
(b) the Indenture Trustee is adjudged a bankrupt or insolvent;
(c) a receiver or other public officer takes charge of the Indenture Trustee or
its property; or
(d) the Indenture Trustee otherwise becomes incapable of fulfilling its duties
under the Basic Documents.
If the Indenture Trustee resigns or is removed or if a vacancy exists in the office of the
Indenture Trustee for any reason (the Indenture Trustee in such event being referred to herein as the
retiring Indenture Trustee), the Issuer shall promptly appoint a successor Indenture Trustee, which
consent shall not be unreasonably withheld. In addition, the Indenture Trustee shall resign to avoid
being directly or indirectly controlled by the Issuer.
A successor Indenture Trustee shall deliver a written acceptance of its appointment to the
retiring Indenture Trustee and to the Issuer. Thereupon, the resignation or removal of the retiring
Indenture Trustee shall become effective, and the successor Indenture Trustee shall have all the
rights, powers and duties of the Indenture Trustee under this Indenture. The successor Indenture
Trustee shall mail a notice of its succession to the Noteholders. The retiring Indenture Trustee
shall promptly transfer all property held by it as Indenture Trustee to the successor Indenture
Trustee.
If a successor Indenture Trustee does not take office within 60 days after the retiring
Indenture Trustee resigns or is removed, then the retiring Indenture Trustee, the Issuer or the
Noteholders of a majority of aggregate Note Balance of the Notes may petition any court of competent
jurisdiction for the appointment of a successor Indenture Trustee.
If the Indenture Trustee fails to comply with Section 6.11, any Noteholder may petition any
court of competent jurisdiction for the removal of the Indenture Trustee and the appointment of a
successor Indenture Trustee.
Notwithstanding the replacement of the Indenture Trustee pursuant to this Section, the
Issuer's obligations under Section 6.07 shall continue for the benefit of the retiring Indenture
Trustee.
Section 6.09 Successor Indenture Trustee by Xxxxxx. If the Indenture Trustee
consolidates with, merges or converts into, or transfers all or substantially all its corporate trust
business or assets to, another corporation or banking association, then the resulting, surviving or
transferee corporation without any further act shall be the successor Indenture Trustee; provided,
that such corporation or banking association shall be otherwise qualified and eligible under Section
6.11. The Indenture Trustee shall provide the Rating Agencies with written notice of any such
transaction occurring after the Closing Date.
If at the time of any such succession by merger, conversion or consolidation, any of the
Notes shall have been authenticated but not delivered, then any such successor to the Indenture
Trustee may adopt the certificate of authentication of any predecessor trustee, and deliver such
Notes so authenticated. If at such time any of the Notes shall not have been authenticated, any
successor to the Indenture Trustee may authenticate such Notes either in the name of any predecessor
hereunder or in the name of the successor to the Indenture Trustee; and in all such cases, such
certificates shall have the full force that it is anywhere in the Notes or in this Indenture provided
that the certificate of the Indenture Trustee shall have.
Section 6.10 Appointment of Co-Indenture Trustee or Separate Indenture Trustee.
(a) Notwithstanding any other provisions of this Indenture, at any time, for
the purpose of meeting any legal requirement of any jurisdiction in which any part of the Trust
Estate may at such time be located, the Indenture Trustee shall have the power and may execute and
deliver all instruments to appoint one or more Persons to act as a co-trustee or co-trustees, or
separate trustee or separate trustees, of all or any part of the Issuer, and to vest in such Person
or Persons, in such capacity and for the benefit of the Noteholders, such title to the Trust Estate,
or any part thereof, and, subject to the other provisions of this Section, such powers, duties,
obligations, rights and trusts as the Indenture Trustee may consider necessary or desirable. No co
trustee or separate trustee hereunder shall be required to meet the terms of eligibility as a
successor trustee under Section 6.11, and no notice to Noteholders of the appointment of any co
trustee or separate trustee shall be required under Section 6.08 hereof.
(b) Every separate trustee and co-trustee shall, to the extent permitted by
law, be appointed and act subject to the following provisions and conditions:
(i) all rights, powers, duties and obligations conferred or imposed
upon the Indenture Trustee shall be conferred or imposed upon and exercised or performed by
the Indenture Trustee and such separate trustee or co-trustee jointly (it being understood
that such separate trustee or co-trustee is not authorized to act separately without the
Indenture Trustee joining in such act), except to the extent that under any law of any
jurisdiction in which any particular act or acts are to be performed the Indenture Trustee
shall be incompetent or unqualified to perform such act or acts, in which event such rights,
powers, duties and obligations (including the holding of title to the Trust Estate or any
portion thereof in any such jurisdiction) shall be exercised and performed singly by such
separate trustee or co-trustee, but solely at the direction of the Indenture Trustee;
(ii) no trustee hereunder shall be personally liable by reason of any
act or omission of any other trustee hereunder; and
(iii) the Indenture Trustee may at any time accept the resignation of or
remove any separate trustee or co-trustee.
(c) Any notice, request or other writing given to the Indenture Trustee shall
be deemed to have been given to each of the then separate trustees and co-trustees, as effectively as
if given to each of them. Every instrument appointing any separate trustee or co-trustee shall refer
to this Indenture and the conditions of this Article VI. Each separate trustee and co-trustee, upon
its acceptance of the trusts conferred, shall be vested with the estates or property specified in its
instrument of appointment, either jointly with the Indenture Trustee or separately, as may be
provided therein, subject to all the provisions of this Indenture, specifically including every
provision of this Indenture relating to the conduct of, affecting the liability of, or affording
protection to, the Indenture Trustee. Every such instrument shall be filed with the Indenture
Trustee.
(d) Any separate trustee or co-trustee may at any time constitute the Indenture
Trustee, its agent or attorney-in-fact with full power and authority, to the extent not prohibited by
law, to do any lawful act under or in respect of this Indenture on its behalf and in its name. If
any separate trustee or co-trustee shall die, become incapable of acting, resign or be removed, all
of its estates, properties, rights, remedies and trusts shall vest in and be exercised by the
Indenture Trustee, to the extent permitted by law, without the appointment of a new or successor
trustee.
Section 6.11 Eligibility; Disqualification. The Indenture Trustee shall at all times
satisfy the requirements of TIA § 310(a). The Indenture Trustee shall have a combined capital and
surplus of at least $50,000,000 as set forth in its most recent published annual report of condition
and it or its parent shall have a long-term debt rating of "A" or better by Xxxxx'x. The Indenture
Trustee shall comply with TIA § 310(b); provided, however, that there shall be excluded from the
operation of TIA § 310(b)(1) any indenture or indentures under which other securities of the Issuer
are outstanding if the requirements for such exclusion set forth in TIA § 310(b)(1) are met.
Section 6.12 Preferential Collection of Claims Against Issuer. The Indenture Trustee
shall comply with TIA § 311(a), excluding any creditor relationship listed in TIA § 311(b). An
Indenture Trustee that has resigned or been removed shall be subject to TIA § 311(a) to the extent
indicated.
Section 6.13 Representations and Warranties. The Indenture Trustee hereby represents
and warrants that:
(a) The Indenture Trustee is duly organized, validly existing and in good
standing as a national banking association with power and authority to own its properties and to
conduct its business as such properties are currently owned and such business is currently conducted.
(b) The Indenture Trustee has the power and authority to execute and deliver
this Indenture and to carry out its terms; and the execution, delivery and performance of this
Indenture have been duly authorized by the Indenture Trustee by all necessary corporate action.
(c) The consummation of the transactions contemplated by this Indenture and the
fulfillment of the terms hereof do not conflict with, result in any breach of any of the terms and
provisions of, or constitute (with or without notice or lapse of time) a default under, the articles
of organization or bylaws of the Indenture Trustee or any agreement or other instrument to which the
Indenture Trustee is a party or by which it is bound.
(d) To the Indenture Trustee's best knowledge, there are no Proceedings or
investigations pending or threatened before any court, regulatory body, administrative agency or
other governmental instrumentality having jurisdiction over the Indenture Trustee or its properties
(A) asserting the invalidity of this Indenture, (B) seeking to prevent the consummation of any of the
transactions contemplated by this Indenture or (C) seeking any determination or ruling that might
materially and adversely affect the performance by the Indenture Trustee of its obligations under, or
the validity or enforceability of, this Indenture.
(e) The Indenture Trustee does not have notice of any adverse claim (as such
terms are used in Section 8-302 of the UCC in effect in the State of Delaware) with respect to the
Mortgage Loans.
Section 6.14 Directions to Indenture Trustee. The Indenture Trustee is hereby directed:
(a) to accept the pledge of the Mortgage Loans and hold the assets of the Trust
in trust for the Noteholders;
(b) to authenticate and deliver the Class A Notes and Class M Notes
substantially in the forms prescribed by Exhibit A and Exhibit B, respectively, in accordance with
the terms of this Indenture; and
(c) to take all other actions as shall be required to be taken by the terms of
this Indenture.
Section 6.15 Indenture Trustee May Own Securities. The Indenture Trustee, in its
individual or any other capacity, may become the owner or pledgee of Securities with the same rights
it would have if it were not Indenture Trustee.
ARTICLE VII
Noteholders' Lists and Reports
Section 7.01 Issuer to Furnish Indenture Trustee Names and Addresses of Noteholders.
The Issuer shall furnish or cause to be furnished to the Indenture Trustee (a) not more than five
days after each Record Date, a list, in such form as the Indenture Trustee may reasonably require, of
the names and addresses of the Noteholders as of such Record Date, and (b) at such other times as the
Indenture Trustee may request in writing, within 30 days after receipt by the Issuer of any such
request, a list of similar form and content as of a date not more than 10 days prior to the time such
list is furnished; provided, however, that for so long as the Indenture Trustee is the Note
Registrar, no such list need be furnished.
Section 7.02 Preservation of Information; Communications to Noteholders.
(a) The Indenture Trustee shall preserve, in as current a form as is reasonably
practicable, the names and addresses of the Noteholders contained in the most recent list furnished
to the Indenture Trustee as provided in Section 7.01 and the names and addresses of the Noteholders
received by the Indenture Trustee in its capacity as Note Registrar. The Indenture Trustee may
destroy any list furnished to it as provided in such Section 7.01 upon receipt of a new list so
furnished.
(b) Noteholders may communicate pursuant to TIA § 312(b) with other Noteholders
with respect to their rights under this Indenture or under the Notes.
(c) The Issuer, the Indenture Trustee and the Note Registrar shall have the
protection of TIA § 312(c).
Section 7.03 Reports by Issuer.
(a) The Issuer shall:
(i) file with the Indenture Trustee, within 15 days after the Issuer
is required to file the same with the Commission, copies of the annual reports and the
information, documents and other reports (or copies of such portions of any of the foregoing
as the Commission may from time to time by rules and regulations prescribe) that the Issuer
may be required to file with the Commission pursuant to Section 13 or 15(d) of the Exchange
Act;
(ii) file with the Indenture Trustee and the Commission, in accordance
with rules and regulations prescribed from time to time by the Commission, such additional
information, documents and reports with respect to compliance by the Issuer with the
conditions and covenants of this Indenture as may be required from time to time by such
rules and regulations; and
(iii) supply to the Indenture Trustee (and the Indenture Trustee shall
transmit by mail to all Noteholders described in TIA § 313(c)) such summaries of any
information, documents and reports required to be filed by the Issuer pursuant to
clauses (i) and (ii) of this Section 7.03(a) and by rules and regulations prescribed from
time to time by the Commission.
(b) Unless the Issuer otherwise determines, the fiscal year of the Issuer shall
end on December 31 of each year.
Section 7.04 Reports by Indenture Trustee. If required by TIA § 313(a), within 60 days
after each January 1, beginning with January 1, 2007, the Indenture Trustee shall make available to
each Noteholder as required by TIA § 313(c) a brief report dated as of such date that complies with
TIA § 313(a). The Indenture Trustee also shall comply with TIA § 313(b).
A copy of each report at the time of its distribution to Noteholders shall be filed by the
Indenture Trustee with the Commission, if required, and each stock exchange, if any, on which the
Notes are listed. The Issuer shall notify the Indenture Trustee if and when the Notes are listed on
any stock exchange.
Section 7.05 Exchange Act Reporting. In connection with the preparation and filing of
periodic reports by the Servicer pursuant to Article IV of the Servicing Agreement, the Indenture
Trustee shall timely provide to the Servicer (I) a list of Holders as shown on the Note Register or
Certificate Register as of the end of each calendar year, (II) copies of all pleadings, other legal
process and any other documents relating to any claims, charges or complaints involving the Indenture
Trustee, as indenture trustee hereunder, or the Trust Estate that are received by the Indenture
Trustee, (III) notice of all matters that, to the actual knowledge of a Responsible Officer of the
Indenture Trustee, have been submitted to a vote of the Holders, other than those matters that have
been submitted to a vote of the Holders at the request of the Depositor or the Servicer, and (IV)
notice of any failure of the Indenture Trustee to make any payment to the Holders as required
pursuant to this Indenture. The Indenture Trustee shall not have any liability with respect to the
Servicer's failure to properly prepare or file such periodic reports and the Servicer shall not have
any liability with respect to such failure resulting from or relating to the Servicer's inability or
failure to obtain any information not resulting from the Servicer's own negligence or willful
misconduct.
ARTICLE VIII
Accounts, Disbursements and Releases
Section 8.01 Collection of Money. Except as otherwise expressly provided herein, the
Indenture Trustee may demand payment or delivery of, and shall receive and collect, directly and
without intervention or assistance of any fiscal agent or other intermediary, all money and other
property payable to or receivable by the Indenture Trustee pursuant to this Indenture. The Indenture
Trustee shall apply all such money received by it as provided in this Indenture. Except as otherwise
expressly provided in this Indenture, if any default occurs in the making of any payment or
performance under any agreement or instrument that is part of the Trust Estate, the Indenture Trustee
may take such action as may be appropriate to enforce such payment or performance, including the
institution and prosecution of appropriate Proceedings. Any such action shall be without prejudice
to any right to claim a Default or Event of Default under this Indenture and any right to proceed
thereafter as provided in Article V.
Section 8.02 Trust Accounts.
(a) On or prior to the Closing Date, the Issuer shall cause the Indenture
Trustee to establish and maintain, in the name of the Indenture Trustee, for the benefit of the
Noteholders, the Certificate Paying Agent, on behalf of the Certificateholders, the Note Payment
Account as provided in Section 3.01 of this Indenture.
(b) All monies deposited from time to time in the Note Payment Account pursuant
to the Servicing Agreement and all deposits therein pursuant to this Indenture are for the benefit of
the Noteholders, the Certificate Paying Agent, on behalf of the Certificateholders, and all
investments made with such monies, including all income or other gain from such investments, are for
the benefit of the Servicer as provided in Section 5.01 of the Servicing Agreement.
On each Payment Date, the Indenture Trustee shall distribute all amounts on deposit in the
Note Payment Account to the Noteholders in respect of the Notes and, in its capacity as Certificate
Paying Agent, to the Certificateholders from the Distribution Account in the order of priority set
forth in Section 3.05 (except as otherwise provided in Section 5.04(b)) and in accordance with the
Servicing Certificate.
The Indenture Trustee shall invest any funds in the Note Payment Account in Permitted
Investments selected in writing by the Servicer maturing no later than the Business Day preceding the
next succeeding Payment Date (except that any investment in the institution with which the Note
Payment Account is maintained may mature on such Payment Date) and shall not be sold or disposed of
prior to the maturity. In addition, such Permitted Investments shall not be purchased at a price in
excess of par. The Indenture Trustee shall have no liability whatsoever for investment losses on
Permitted Investments, if such investments are made in accordance with the provisions of this
Indenture and the Indenture Trustee is not the obligor under the Permitted Investment.
Section 8.03 Officer's Certificate. The Indenture Trustee shall receive at least seven
days' notice when requested by the Issuer to take any action pursuant to Section 8.05(a), accompanied
by copies of any instruments to be executed, and the Indenture Trustee shall also require, as a
condition to such action, an Officer's Certificate, in form and substance satisfactory to the
Indenture Trustee, stating the legal effect of any such action, outlining the steps required to
complete the same, and concluding that all conditions precedent to the taking of such action have
been complied with.
Section 8.04 Termination Upon Distribution to Noteholders. This Indenture and the
respective obligations and responsibilities of the Issuer and the Indenture Trustee created hereby
shall terminate upon the distribution to the Noteholders, the Certificate Paying Agent on behalf of
the Certificateholders and the Indenture Trustee of all amounts required to be distributed pursuant
to Article III; provided, however, that in no event shall the trust created hereby continue beyond
the expiration of 21 years from the death of the survivor of the descendants of Xxxxxx X. Xxxxxxx,
the late ambassador of the United States to the Court of St. James's, living on the date hereof.
Section 8.05 Release of Trust Estate.
(a) Subject to the payment of its fees, expenses and indemnification, the
Indenture Trustee may, and when required by the provisions of this Indenture or the Servicing
Agreement, shall, execute instruments to release property from the lien of this Indenture, or convey
the Indenture Trustee's interest in the same, in a manner and under circumstances that are not
inconsistent with the provisions of this Indenture. No Person relying upon an instrument executed by
the Indenture Trustee as provided in Article VIII hereunder shall be bound to ascertain the Indenture
Trustee's authority, inquire into the satisfaction of any conditions precedent, or see to the
application of any monies.
(b) The Indenture Trustee shall, at such time as (i) there are no Notes
Outstanding and (ii) all sums due the Indenture Trustee pursuant to this Indenture have been paid,
release any remaining portion of the Trust Estate that secured the Notes from the lien of this
Indenture.
(c) The Indenture Trustee shall release property from the lien of this
Indenture pursuant to this Section 8.05 only upon receipt of an Issuer Request accompanied by an
Officers' Certificate.
Section 8.06 Surrender of Notes Upon Final Payment. By acceptance of any Note, the
Noteholder thereof agrees to surrender such Note to the Indenture Trustee promptly, prior to such
Noteholder's receipt of the final payment thereon.
ARTICLE IX
Supplemental Indentures
Section 9.01 Supplemental Indentures Without Consent of Noteholders.
(a) Without the consent of the Noteholders of any Notes, but with prior notice
to the Rating Agencies, the Issuer and the Indenture Trustee, when authorized by an Issuer Request,
at any time and from time to time, may enter into one or more indentures supplemental hereto (which
shall conform to the provisions of the Trust Indenture Act as in force at the date of the execution
thereof), in form satisfactory to the Indenture Trustee, for any of the following purposes:
(i) to correct or amplify the description of any property at any time
subject to the lien of this Indenture, or better to assure, convey and confirm unto the
Indenture Trustee any property subject or required to be subjected to the lien of this
Indenture, or to subject to the lien of this Indenture additional property;
(ii) to evidence the succession, in compliance with the applicable
provisions hereof, of another Person to the Issuer, and the assumption by any such successor
of the covenants of the Issuer herein and in the Notes contained;
(iii) to add to the covenants of the Issuer, for the benefit of the
Noteholders, or to surrender any right or power herein conferred upon the Issuer;
(iv) to convey, transfer, assign, mortgage or pledge any property to or
with the Indenture Trustee;
(v) to cure any ambiguity, to correct any error or to correct or
supplement any provision herein or in any supplemental indenture that may be inconsistent
with any other provision herein or in any supplemental indenture;
(vi) to make any other provisions with respect to matters or questions
arising under this Indenture or in any supplemental indenture; provided, that such action
shall not materially and adversely affect the interests of the Noteholders (as evidenced by
an Opinion of Counsel);
(vii) to evidence and provide for the acceptance of the appointment
hereunder by a successor trustee with respect to the Notes and to add to or change any of
the provisions of this Indenture as shall be necessary to facilitate the administration of
the trusts hereunder by more than one trustee, pursuant to the requirements of Article VI; or
(viii) to modify, eliminate or add to the provisions of this Indenture to
such extent as shall be necessary to effect the qualification of this Indenture under TIA or
under any similar federal statute hereafter enacted and to add to this Indenture such other
provisions as may be expressly required by TIA;
provided, however, that no such supplemental indenture shall be entered into unless the Indenture
Trustee shall have received an Opinion of Counsel to the effect that the execution of such
supplemental indenture will not give rise to any material adverse tax consequence to the Noteholders,
including any Adverse REMIC Event.
The Indenture Trustee is hereby authorized to join in the execution of any such supplemental
indenture and to make any further appropriate agreements and stipulations that may be therein
contained.
(b) The Issuer and the Indenture Trustee, when authorized by an Issuer Request,
may, without the consent of any Noteholder but with prior notice to the Rating Agencies, enter into
an indenture or indentures supplemental hereto for the purpose of adding any provisions to, or
changing in any manner or eliminating any of the provisions of, this Indenture or of modifying in any
manner the rights of the Noteholders under this Indenture; provided, however, that such action shall
not, as evidenced by an Opinion of Counsel, (i) adversely affect in any material respect the
interests of any Noteholder or (ii) cause the Issuer to be subject to an entity level tax.
Section 9.02 Supplemental Indentures With Consent of Noteholders. The Issuer and the
Indenture Trustee, when authorized by an Issuer Request, may, with prior notice to the Rating
Agencies and with the consent of the Noteholders of not less than a majority of the Note Balances
affected thereby, by Act (as defined in Section 10.03 hereof) of such Noteholders delivered to the
Issuer and the Indenture Trustee, enter into an indenture or indentures supplemental hereto for the
purpose of adding any provisions to, or changing in any manner or eliminating any of the provisions
of, this Indenture or of modifying in any manner the rights of the Noteholders under this Indenture;
provided, however, that no such supplemental indenture shall, without the consent of the Noteholder
of each Note affected thereby:
(a) change the date of payment of any installment of principal of or interest
on any Note, or reduce the principal amount thereof or the Note Rate thereon, change the provisions
of this Indenture relating to the application of collections on, or the proceeds of the sale of, the
Trust Estate to payment of principal of or interest on the Notes, or change any place of payment
where, or the coin or currency in which, any Note or the interest thereon is payable, or impair the
right to institute suit for the enforcement of the provisions of this Indenture requiring the
application of funds available therefor, as provided in Article V, to the payment of any such amount
due on the Notes on or after the respective due dates thereof;
(b) reduce the percentage of the Note Balances, the consent of the Noteholders
of which is required for any such supplemental indenture, or the consent of the Noteholders of which
is required for any waiver of compliance with certain provisions of this Indenture or certain
defaults hereunder and their consequences provided for in this Indenture;
(c) modify or alter the provisions of the proviso to the definition of the term
"Outstanding" or modify or alter the exception in the definition of the term "Noteholder";
(d) reduce the percentage of the aggregate Note Balance of the Notes required
to direct the Indenture Trustee to direct the Issuer to sell or liquidate the Trust Estate pursuant
to Section 5.04;
(e) modify any provision of this Section 9.02 except to increase any percentage
specified herein or to provide that certain additional provisions of this Indenture or the other
Basic Documents cannot be modified or waived without the consent of the Noteholder of each Note
affected thereby;
(f) modify any of the provisions of this Indenture in such manner as to affect
the calculation of the amount of any payment of interest or principal due on any Note on any Payment
Date (including the calculation of any of the individual components of such calculation); or
(g) permit the creation of any lien ranking prior to or on a parity with the
lien of this Indenture with respect to any part of the Trust Estate or, except as otherwise permitted
or contemplated herein, terminate the lien of this Indenture on any property at any time subject
hereto or deprive the Noteholder of any Note of the security provided by the lien of this Indenture;
and provided further, that such action shall not, as evidenced by an Opinion of Counsel, cause the
Issuer to be subject to an entity level tax or cause any Adverse REMIC Event.
The Indenture Trustee may in its discretion determine whether or not any Notes would be
affected by any supplemental indenture and any such determination shall be conclusive upon the
Noteholders of all Notes, whether theretofore or thereafter authenticated and delivered hereunder.
The Indenture Trustee shall not be liable for any such determination made in good faith.
It shall not be necessary for any Act (as defined in Section 10.03 hereof) of Noteholders
under this Section 9.02 to approve the particular form of any proposed supplemental indenture, but it
shall be sufficient if such Act shall approve the substance thereof.
Promptly after the execution by the Issuer and the Indenture Trustee of any supplemental
indenture pursuant to this Section 9.02, the Indenture Trustee shall mail to the Noteholders of the
Notes to which such amendment or supplemental indenture relates a notice setting forth in general
terms the substance of such supplemental indenture. Any failure of the Indenture Trustee to mail
such notice, or any defect therein, shall not, however, in any way impair or affect the validity of
any such supplemental indenture.
Section 9.03 Execution of Supplemental Indentures. In executing, or permitting the
additional trusts created by, any supplemental indenture permitted by this Article IX or the
modification thereby of the trusts created by this Indenture, the Indenture Trustee shall be entitled
to receive and, subject to Sections 6.01 and 6.02, shall be fully protected in relying upon, an
Opinion of Counsel stating that the execution of such supplemental indenture is authorized or
permitted by this Indenture. The Indenture Trustee may, but shall not be obligated to, enter into
any such supplemental indenture that affects the Indenture Trustee's own rights, duties, liabilities
or immunities under this Indenture or otherwise.
Section 9.04 Effect of Supplemental Indenture. Upon the execution of any supplemental
indenture pursuant to the provisions hereof, this Indenture shall be and shall be deemed to be
modified and amended in accordance therewith with respect to the Notes affected thereby, and the
respective rights, limitations of rights, obligations, duties, liabilities and immunities under this
Indenture of the Indenture Trustee, the Issuer and the Noteholders shall thereafter be determined,
exercised and enforced hereunder subject in all respects to such modifications and amendments, and
all the terms and conditions of any such supplemental indenture shall be and be deemed to be part of
the terms and conditions of this Indenture for any and all purposes.
Section 9.05 Conformity with Trust Indenture Act. Every amendment of this Indenture and
every supplemental indenture executed pursuant to this Article IX shall conform to the requirements
of TIA as in effect at the time of such amendment or supplement so long as this Indenture shall then
be qualified under TIA.
Section 9.06 Reference in Notes to Supplemental Indentures. Notes authenticated and
delivered after the execution of any supplemental indenture pursuant to this Article IX may, and if
required by the Indenture Trustee, shall, bear a notation in form approved by the Indenture Trustee
as to any matter provided for in such supplemental indenture. If the Issuer or the Indenture Trustee
shall so determine, new Notes so modified as to conform, in the opinion of the Indenture Trustee and
the Issuer, to any such supplemental indenture may be prepared and executed by the Issuer and
authenticated and delivered by the Indenture Trustee in exchange for Outstanding Notes.
ARTICLE X
Miscellaneous
Section 10.01 Compliance Certificates and Opinions, etc.
(a) Upon any application or request by the Issuer to the Indenture Trustee to
take any action under any provision of this Indenture, the Issuer shall furnish to the Indenture
Trustee (i) an Officer's Certificate stating that all conditions precedent, if any, provided for in
this Indenture relating to the proposed action have been complied with and (ii) an Opinion of Counsel
stating that in the opinion of such counsel all such conditions precedent, if any, have been complied
with, except that, in the case of any such application or request as to which the furnishing of such
documents is specifically required by any provision of this Indenture, no additional certificate or
opinion need be furnished.
Every certificate or opinion with respect to compliance with a condition or covenant
provided for in this Indenture shall include:
(i) a statement that each signatory of such certificate or opinion has
read or has caused to be read such covenant or condition and the definitions herein relating
thereto;
(ii) a brief statement as to the nature and scope of the examination or
investigation upon which the statements or opinions contained in such certificate or opinion
are based;
(iii) a statement that, in the opinion of each such signatory, such
signatory has made such examination or investigation as is necessary to enable such
signatory to express an informed opinion as to whether or not such covenant or condition has
been complied with;
(iv) a statement as to whether, in the opinion of each such signatory,
such condition or covenant has been complied with; and
(v) if the signer of such certificate or opinion is required to be
Independent, the statement required by the definition of the term "Independent."
(b) (i) Prior to the deposit of any Collateral or other property or
securities with the Indenture Trustee that is to be made the basis for the release of any property or
securities subject to the lien of this Indenture, the Issuer shall, in addition to any obligation
imposed in Section 10.01(a) or elsewhere in this Indenture, furnish to the Indenture Trustee an
Officer's Certificate certifying or stating the opinion of each person signing such certificate as to
the fair value (within 90 days of such deposit) to the Issuer of the Collateral or other property or
securities to be so deposited.
(ii) Whenever the Issuer is required to furnish to the Indenture
Trustee an Officer's Certificate certifying or stating the opinion of any signer thereof as
to the matters described in clause (i) above, the Issuer shall also deliver to the Indenture
Trustee an Independent Certificate as to the same matters, if the fair value to the Issuer
of the securities to be so deposited and of all other such securities made the basis of any
such withdrawal or release since the commencement of the then-current fiscal year of the
Issuer, as set forth in the certificates delivered pursuant to clause (i) above and this
clause (ii), is 10% or more of the aggregate Note Balance of the Notes, but such a
certificate need not be furnished with respect to any securities so deposited, if the fair
value thereof to the Issuer as set forth in the related Officer's Certificate is less than
$25,000 or less than one percent of the aggregate Note Balance of the Notes.
(iii) Whenever any property or securities are to be released from the
lien of this Indenture, the Issuer shall furnish to the Indenture Trustee an Officer's
Certificate certifying or stating the opinion of each person signing such certificate as to
the fair value (within 90 days of such release) of the property or securities proposed to be
released and stating that in the opinion of such person the proposed release will not impair
the security under this Indenture in contravention of the provisions hereof.
(iv) Whenever the Issuer is required to furnish to the Indenture
Trustee an Officer's Certificate certifying or stating the opinion of any signer thereof as
to the matters described in clause (iii) above, the Issuer shall also furnish to the
Indenture Trustee an Independent Certificate as to the same matters if the fair value of the
property or securities and of all other property, other than property as contemplated by
clause (v) below or securities released from the lien of this Indenture since the
commencement of the then-current calendar year, as set forth in the certificates required by
clause (iii) above and this clause (iv), equals 10% or more of the aggregate Note Balance of
the Notes, but such certificate need not be furnished in the case of any release of property
or securities if the fair value thereof as set forth in the related Officer's Certificate is
less than $25,000 or less than one percent of the aggregate Note Balance of the Notes.
(v) Notwithstanding the foregoing, this Section 10.01(b) shall not
apply to (A) collection upon, sales or other dispositions of the Mortgage Loans as and to
the extent permitted or required by the Basic Documents or (B) the making of cash payments
out of the Note Payment Account as and to the extent permitted or required by the Basic
Documents, so long as the Issuer shall deliver to the Indenture Trustee every six months,
commencing December 31, 2007, an Officer's Certificate of the Issuer stating that all the
dispositions of Collateral described in clauses (A) or (B) above that occurred during the
preceding six calendar months (or such longer period, in the case of the first such
Officer's Certificate) were permitted or required by the Basic Documents and that the
proceeds thereof were applied in accordance with the Basic Documents.
Section 10.02 Form of Documents Delivered to Indenture Trustee.
In any case where several matters are required to be certified by, or covered by an opinion
of, any specified Person, it is not necessary that all such matters be certified by, or covered by
the opinion of, only one such Person, or that they be so certified or covered by only one document,
but one such Person may certify or give an opinion with respect to some matters and one or more other
such Persons as to other matters, and any such Person may certify or give an opinion as to such
matters in one or several documents.
Any certificate or opinion of an Authorized Officer of the Issuer may be based, insofar as
it relates to legal matters, upon a certificate or opinion of, or representations by, counsel, unless
such officer knows, or in the exercise of reasonable care should know, that the certificate or
opinion or representations with respect to the matters upon which his certificate or opinion is based
are erroneous. Any such certificate of an Authorized Officer or Opinion of Counsel may be based,
insofar as it relates to factual matters, upon a certificate or opinion of, or representations by, an
officer or officers of any Seller or the Issuer, stating that the information with respect to such
factual matters is in the possession of any Seller or the Issuer, unless such counsel knows, or in
the exercise of reasonable care should know, that the certificate or opinion or representations with
respect to such matters are erroneous.
Where any Person is required to make, give or execute two or more applications, requests,
consents, certificates, statements, opinions or other instruments under this Indenture, they may, but
need not, be consolidated and form one instrument.
Whenever in this Indenture, in connection with any application or certificate or report to
the Indenture Trustee, it is provided that the Issuer shall deliver any document as a condition of
the granting of such application, or as evidence of the Issuer's compliance with any term hereof, it
is intended that the truth and accuracy, at the time of the granting of such application or at the
effective date of such certificate or report (as the case may be), of the facts and opinions stated
in such document shall in such case be conditions precedent to the right of the Issuer to have such
application granted or to the sufficiency of such certificate or report. The foregoing shall not,
however, be construed to affect the Indenture Trustee's right to rely upon the truth and accuracy of
any statement or opinion contained in any such document as provided in Article VI.
Section 10.03 Acts of Noteholders.
(a) Any request, demand, authorization, direction, notice, consent, waiver or
other action provided by this Indenture to be given or taken by Noteholders may be embodied in and
evidenced by one or more instruments of substantially similar tenor signed by such Noteholders in
person or by agents duly appointed in writing; and except as herein otherwise expressly provided such
action shall become effective when such instrument or instruments are delivered to the Indenture
Trustee, and, where it is hereby expressly required, to the Issuer. Such instrument or instruments
(and the action embodied therein and evidenced thereby) are herein sometimes referred to as the "Act"
of the Noteholders signing such instrument or instruments. Proof of execution of any such instrument
or of a writing appointing any such agent shall be sufficient for any purpose of this Indenture and
(subject to Section 6.01) conclusive in favor of the Indenture Trustee and the Issuer, if made in the
manner provided in this Section 10.03.
(b) The fact and date of the execution by any person of any such instrument or
writing may be proved in any manner that the Indenture Trustee deems sufficient.
(c) The ownership of Notes shall be proved by the Note Register.
(d) Any request, demand, authorization, direction, notice, consent, waiver or
other action by the Noteholder of any Note shall bind the Noteholder of every Note issued upon the
registration thereof or in exchange therefor or in lieu thereof, in respect of anything done, omitted
or suffered to be done by the Indenture Trustee or the Issuer in reliance thereon, whether or not
notation of such action is made upon such Note.
Section 10.04 Notices, etc., to Indenture Trustee, Issuer and Rating Agencies. Any
request, demand, authorization, direction, notice, consent, waiver or Act of Noteholders or other
documents provided or permitted by this Indenture shall be in writing and if such request, demand,
authorization, direction, notice, consent, waiver or Act of Noteholders is to be made upon, given or
furnished to or filed with:
(a) the Indenture Trustee by any Noteholder or by the Issuer shall be
sufficient for every purpose hereunder if made, given, furnished or filed in writing to or with the
Indenture Trustee at its Corporate Trust Office with a copy to The Bank of New York Trust Company,
N.A., 0 Xxxxx XxXxxxx Xxxxxx, Xxxxx 0000, Xxxxxxx, Xxxxxxxx 00000, Attention: Structured Finance
Services. The Indenture Trustee shall promptly transmit any notice received by it from the
Noteholders to the Issuer,
(b) the Issuer by the Indenture Trustee or by any Noteholder shall be
sufficient for every purpose hereunder if in writing and mailed first-class, postage prepaid to the
Issuer addressed to: GMACM Home Equity Loan Trust 2007-HE3, in care of the Owner Trustee, or at any
other address previously furnished in writing to the Indenture Trustee by the Issuer. The Issuer
shall promptly transmit any notice received by it from the Noteholders to the Indenture Trustee, or
Notices required to be given to the Rating Agencies by the Issuer, the Indenture Trustee or
the Owner Trustee shall be in writing, personally delivered or mailed by certified mail, return
receipt requested, to (i) in the case of Moody's, at the following address: Xxxxx'x Investors
Service, Inc., ABS Monitoring Department, 00 Xxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000 and (ii) in the
case of Standard & Poor's, at the following address: Standard & Poor's, 00 Xxxxx Xxxxxx, Xxx Xxxx,
Xxx Xxxx 00000-0003, Attention: Asset Backed Surveillance Department; or, as to each of the
foregoing Persons, at such other address as shall be designated by written notice to the other
foregoing Persons.
Section 10.05 Notices to Noteholders; Waiver. Where this Indenture provides for notice
to Noteholders of any event, such notice shall be sufficiently given (unless otherwise herein
expressly provided) if in writing and mailed, first-class, postage prepaid to each Noteholder
affected by such event, at such Person's address as it appears on the Note Register, not later than
the latest date, and not earlier than the earliest date, prescribed for the giving of such notice.
In any case where notice to Noteholders is given by mail, neither the failure to mail such notice nor
any defect in any notice so mailed to any particular Noteholder shall affect the sufficiency of such
notice with respect to other Noteholders, and any notice that is mailed in the manner herein provided
shall conclusively be presumed to have been duly given regardless of whether such notice is in fact
actually received.
Where this Indenture provides for notice in any manner, such notice may be waived in writing
by any Person entitled to receive such notice, either before or after the event, and such waiver
shall be the equivalent of such notice. Waivers of notice by Noteholders shall be filed with the
Indenture Trustee, but such filing shall not be a condition precedent to the validity of any action
taken in reliance upon such a waiver.
In case, by reason of the suspension of regular mail service as a result of a strike, work
stoppage or similar activity, it shall be impractical to mail notice of any event to Noteholders when
such notice is required to be given pursuant to any provision of this Indenture, then any manner of
giving such notice as shall be satisfactory to the Indenture Trustee shall be deemed to be a
sufficient giving of such notice.
Where this Indenture provides for notice to the Rating Agencies, failure to give such notice
shall not affect any other rights or obligations created hereunder, and shall not under any
circumstance constitute an Event of Default.
Section 10.06 Alternate Payment and Notice Provisions. Notwithstanding any provision of
this Indenture or any of the Notes to the contrary, the Issuer may enter into any agreement with any
Noteholder providing for a method of payment, or notice by the Indenture Trustee to such Noteholder,
that is different from the methods provided for in this Indenture for such payments or notices. The
Issuer shall furnish to the Indenture Trustee a copy of each such agreement and the Indenture Trustee
shall cause payments to be made and notices to be given in accordance with such agreements.
Section 10.07 Conflict with Trust Indenture Act. If any provision hereof limits,
qualifies or conflicts with another provision hereof that is required to be included in this
Indenture by any of the provisions of TIA, such required provision shall control.
The provisions of TIA §§ 310 through 317 that impose duties on any Person (including the
provisions automatically deemed included herein unless expressly excluded by this Indenture) are a
part of and govern this Indenture, whether or not physically contained herein.
Section 10.08 Effect of Headings. The Article and Section headings herein are for
convenience only and shall not affect the construction hereof.
Section 10.09 Successors and Assigns. All covenants and agreements in this Indenture and
the Notes by the Issuer shall bind its successors and assigns, whether so expressed or not. All
agreements of the Indenture Trustee in this Indenture shall bind its successors, co-trustees and
agents.
Section 10.10 Severability. In case any provision in this Indenture or in the Notes
shall be held invalid, illegal or unenforceable, the validity, legality, and enforceability of the
remaining provisions hereof shall not in any way be affected or impaired thereby.
Section 10.11 Benefits of Indenture. Nothing in this Indenture or in the Notes, express
or implied, shall give to any Person, other than the parties hereto and their successors hereunder,
and the Noteholders and any other party secured hereunder, and any other Person with an ownership
interest in any part of the Trust Estate, any benefit or any legal or equitable right, remedy or
claim under this Indenture.
Section 10.12 Legal Holidays. In any case where the date on which any payment is due
shall not be a Business Day, then (notwithstanding any other provision of the Notes or this
Indenture) payment need not be made on such date, but may be made on the next succeeding Business Day
with the same force and effect as if made on the date on which nominally due, and no interest shall
accrue for the period from and after any such nominal date.
Section 10.13 GOVERNING LAW. THIS AGREEMENT AND THE NOTES SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO THE CONFLICT OF LAW
PRINCIPLES THEREOF, OTHER THAN SECTIONS 5-1401 AND 5-1402 OF THE NEW YORK GENERAL OBLIGATIONS LAW,
AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE
WITH SUCH LAWS.
Section 10.14 Counterparts. This Indenture may be executed in any number of
counterparts, each of which so executed shall be deemed to be an original, but all such counterparts
shall together constitute but one and the same instrument.
Section 10.15 Recording of Indenture. If this Indenture is subject to recording in any
appropriate public recording offices, such recording is to be effected by the Issuer and at its
expense accompanied by an Opinion of Counsel (which counsel shall be reasonably acceptable to the
Indenture Trustee) to the effect that such recording is necessary either for the protection of the
Noteholders or any other Person secured hereunder or for the enforcement of any right or remedy
granted to the Indenture Trustee under this Indenture.
Section 10.16 Issuer Obligation. No recourse may be taken, directly or indirectly, with
respect to the obligations of the Issuer, the Owner Trustee or the Indenture Trustee on the Notes or
under this Indenture or any certificate or other writing delivered in connection herewith or
therewith, against (i) the Indenture Trustee or the Owner Trustee in its individual capacity,
(ii) any owner of a beneficial interest in the Issuer or (iii) any partner, owner, beneficiary, agent,
officer, director, employee or agent of the Indenture Trustee or the Owner Trustee in its individual
capacity, any holder of a beneficial interest in the Issuer, the Owner Trustee or the Indenture
Trustee or of any successor or assign of the Indenture Trustee or the Owner Trustee in its individual
capacity, except as any such Person may have expressly agreed (it being understood that the Indenture
Trustee and the Owner Trustee have no such obligations in their respective individual capacities),
and except that any such partner, owner or beneficiary shall be fully liable, to the extent provided
by applicable law, for any unpaid consideration for stock, unpaid capital contribution or failure to
pay any installment or call owing to such entity. For all purposes of this Indenture, in the
performance of any duties or obligations of the Issuer hereunder, the Owner Trustee shall be subject
to, and entitled to the benefits of, the terms and provisions of Articles VI, VII and VIII of the
Trust Agreement.
Section 10.17 No Petition. The Indenture Trustee, by entering into this Indenture, and
each Noteholder, by its acceptance of a Note, hereby covenant and agree that they will not at any
time institute against the Depositor or the Issuer, or join in any institution against the Depositor
or the Issuer of, any bankruptcy, reorganization, arrangement, insolvency or liquidation proceedings,
or other proceedings under any United States federal or state bankruptcy or similar law in connection
with any obligations relating to the Notes, this Indenture or any of the other Basic Documents.
Section 10.18 Inspection. The Issuer agrees that, on reasonable prior notice, it shall
permit any representative of the Indenture Trustee, during the Issuer's normal business hours, to
examine all the books of account, records, reports and other papers of the Issuer, to make copies and
extracts therefrom, to cause such books to be audited by Independent certified public accountants,
and to discuss the Issuer's affairs, finances and accounts with the Issuer's officers, employees, and
Independent certified public accountants, all at such reasonable times and as often as may be
reasonably requested. The Indenture Trustee shall and shall cause its representatives to hold in
confidence all such information except to the extent disclosure may be required by law (and all
reasonable applications for confidential treatment are unavailing) and except to the extent that the
Indenture Trustee may reasonably determine that such disclosure is consistent with its obligations
hereunder.
ARTICLE XI
REMIC Provisions
Section 11.01 REMIC Administration.
(a) The REMIC Administrator shall make elections to treat the Trust Estate, as
set forth in Section 2.06 of the Trust Agreement, as three REMICs under the Code and, if necessary,
under applicable state law, in accordance with Section 2.06 of the Trust Agreement. Such election
will be made on Form 1066 or other appropriate federal tax or information return (including Form
8811) or any appropriate state return for the taxable year ending on the last day of the calendar
year in which the Securities are issued. For the purposes of the REMIC elections in respect of the
Trust Estate, Securities and interests to be designated as the "regular interests" and the sole class
of "residual interests" in each REMIC will be set forth in Section 11.03. The REMIC Administrator
and the Indenture Trustee shall not permit the creation of any "interests" (within the meaning of
Section 860G of the Code) in each REMIC elected in respect of the Trust other than the "regular
interests" and "residual interests" so designated.
(b) The Closing Date is hereby designated as the "startup day" of each of
REMIC I, REMIC II, and REMIC III as designated in Section 11.03 below, and the Trust Estate within the
meaning of Section 860G(a)(9) of the Code.
(c) GMAC Mortgage, LLC shall hold a Class R Certificate representing at least a
0.01% Percentage Interest in each Class of the Class R Certificates and shall be designated as "the
tax matters person" with respect to each REMIC in the manner provided under Treasury regulations
§1.860F-4(d) and Treasury regulations §301.6231(a)(7)-1. The REMIC Administrator, on behalf of the Tax
Matters Partner, shall (i) act on behalf of each REMIC in relation to any tax matter or controversy
involving the Trust Estate and (ii) represent the Trust Estate in any administrative or judicial
proceeding relating to an examination or audit by any governmental taxing authority with respect
thereto. The legal expenses, including without limitation attorneys' or accountants' fees, and costs
of any such proceeding and any liability resulting therefrom shall be expenses of the Trust Estate
and the REMIC Administrator shall be entitled to reimbursement therefor out of amounts attributable
to the Mortgage Loans on deposit in the Custodial Account unless such legal expenses and costs are
incurred by reason of the REMIC Administrator's willful misfeasance, bad faith or gross negligence.
(d) The REMIC Administrator shall prepare or cause to be prepared all of the
Tax Returns that it determines are required with respect to each REMIC created hereunder and, if
approval therefore is received from the applicable District Director of the Internal Revenue Service,
shall sign and file such returns in a timely manner and, otherwise, shall, shall deliver such Tax
Returns in a timely manner to the Owner Trustee, if the Owner Trustee is required to sign such
returns in accordance with Section 5.03 of the Trust Agreement, and shall sign (if the Owner Trustee
is not so required) and file such Tax Returns in a timely manner. The expenses of preparing such
returns shall be borne by the REMIC Administrator without any right of reimbursement therefor. The
REMIC Administrator agrees to indemnify and hold harmless the Owner Trustee with respect to any tax
or liability arising from the Owner Trustee's signing of Tax Returns that contain errors or
omissions. The Indenture Trustee and Servicer shall promptly provide the REMIC Administrator with
such information as the REMIC Administrator may from time to time request for the purpose of enabling
the REMIC Administrator to prepare Tax Returns.
(e) The REMIC Administrator shall provide (i) to any Transferor of a Class R
Certificate such information as is necessary for the application of any tax relating to the transfer
of a Class R Certificate to any Person who is not a Permitted Transferee, (ii) to the Indenture
Trustee, and the Indenture Trustee shall forward to the Noteholders and the Certificateholders, such
information or reports as are required by the Code or the REMIC Provisions including reports relating
to interest, original issue discount and market discount or premium (using the Prepayment Assumption)
and (iii) to the Internal Revenue Service the name, title, address and telephone number of the person
who will serve as the representative of each REMIC.
(f) The Servicer and the REMIC Administrator shall take such actions and shall
cause each REMIC created hereunder to take such actions as are reasonably within the Servicer's or
the REMIC Administrator's control and the scope of its duties more specifically set forth herein as
shall be necessary or desirable to maintain the status of each REMIC as a REMIC under the
REMIC Provisions (and the Indenture Trustee shall assist the Servicer and the REMIC Administrator, to
the extent reasonably requested by the Servicer and the REMIC Administrator to do so). The Servicer
and the REMIC Administrator shall not knowingly or intentionally take any action, cause the Trust
Estate to take any action or fail to take (or fail to cause to be taken) any action reasonably within
their respective control that, under the REMIC Provisions, if taken or not taken, as the case may be,
could (i) endanger the status of any portion of any of the REMICs as a REMIC or (ii) result in the
imposition of a tax upon any of the REMICs (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) (either such event, in the absence of an Opinion of Counsel or
the indemnification referred to in this sentence, an "Adverse REMIC Event") unless the Servicer or
the REMIC Administrator, as applicable, has received an Opinion of Counsel (at the expense of the
party seeking to take such action or, if such party fails to pay such expense, and the Servicer or
the REMIC Administrator, as applicable, determines that taking such action is in the best interest of
the Trust Estate and the Noteholders and the Certificateholders, at the expense of the Trust Estate,
but in no event at the expense of the Servicer, the REMIC Administrator, the Owner Trustee or the
Indenture Trustee) to the effect that the contemplated action will not, with respect to each
REMIC created hereunder, endanger such status or, unless the Servicer, the REMIC Administrator or
both, as applicable, determine in its or their sole discretion to indemnify the Trust Estate against
the imposition of such a tax, result in the imposition of such a tax. Wherever in this Agreement a
contemplated action may not be taken because the timing of such action might result in the imposition
of a tax on the Trust Estate, or may only be taken pursuant to an Opinion of Counsel that such action
would not impose a tax on the Trust Estate, such action may nonetheless be taken provided that the
indemnity given in the preceding sentence with respect to any taxes that might be imposed on the
Trust Estate has been given and that all other preconditions to the taking of such action have been
satisfied. The Indenture Trustee shall not take or fail to take any action (whether or not
authorized hereunder) as to which the Servicer or the REMIC Administrator, as applicable, has advised
it in writing that it has received an Opinion of Counsel to the effect that an Adverse REMIC Event
could occur with respect to such action. In addition, prior to taking any action with respect to any
of the REMICs created hereunder or any related assets thereof, or causing any of the REMICs to take
any action, which is not expressly permitted under the terms of this Agreement, the Indenture Trustee
will consult with the Servicer or the REMIC Administrator, as applicable, or its designee, in
writing, with respect to whether such action could cause an Adverse REMIC Event to occur with respect
to any of the REMICs, and the Indenture Trustee shall not take any such action or cause either
REMIC to take any such action as to which the Servicer or the REMIC Administrator, as applicable, has
advised it in writing that an Adverse REMIC Event could occur. The Servicer or the
REMIC Administrator, as applicable, may consult with counsel to make such written advice, and the cost
of same shall be borne by the party seeking to take the action not expressly permitted by this
Agreement, but in no event at the expense of the Servicer or the REMIC Administrator. At all times
as may be required by the Code, the Servicer will to the extent within its control and the scope of
its duties more specifically set forth herein, maintain substantially all of the assets of each
REMIC created hereunder as "qualified mortgages" as defined in Section 860G(a)(3) of the Code and
"permitted investments" as defined in Section 860G(a)(5) of the Code.
(g) In the event that any tax is imposed on "prohibited transactions" of any of
the REMICs created hereunder as defined in Section 860F(a)(2) of the Code, on "net income from
foreclosure property" of any of the REMICs as defined in Section 860G(c) of the Code, on any
contributions to any of the REMICs after the Startup Day therefor pursuant to Section 860G(d) of the
Code, or any other tax is imposed by the Code or any applicable provisions of state or local tax
laws, such tax shall be charged (i) to the Servicer, if such tax arises out of or results from a
breach by the Servicer of any of its obligations under this Agreement or the Servicer has in its sole
discretion determined to indemnify the Trust Estate against such tax, (ii) to the Indenture Trustee,
if such tax arises out of or results from a breach by the Trustee of any of its obligations under
this Article XI, or (iii) otherwise against amounts on deposit in the Custodial Account and on the
Payment Date(s) following such reimbursement the aggregate of such taxes shall be allocated in
reduction of the accrued interest due on each Class entitled thereto on a pro rata basis.
(h) The Indenture Trustee and the Servicer shall, for federal income tax
purposes, maintain books and records with respect to each REMIC created hereunder on a calendar year
and on an accrual basis or as otherwise may be required by the REMIC Provisions.
(i) Following the Startup Day, neither the Servicer nor the Indenture Trustee
shall accept any contributions of assets to any of the REMICs created hereunder unless (subject to
Section 11.01(f)) the Servicer and the Indenture Trustee shall have received an Opinion of Counsel
(at the expense of the party seeking to make such contribution) to the effect that the inclusion of
such assets in such REMIC will not cause any of the REMICs to fail to qualify as a REMIC at any time
that any Notes or Certificates are outstanding or subject any of the REMICs to any tax under the
REMIC Provisions or other applicable provisions of federal, state and local law or ordinances.
(j) Neither the Servicer nor the Trustee shall (subject to Section 11.01(f))
enter into any arrangement by which any of the REMICs created hereunder will receive a fee or other
compensation for services nor permit any of the REMICs to receive any income from assets other than
"qualified mortgages" as defined in Section 860G(a)(3) of the Code or "permitted investments" as
defined in Section 860G(a)(5) of the Code.
(k) Solely for the purposes of Section 1.860G-1(a)(4)(iii) of the Treasury
Regulations, the "latest possible maturity date" by which the Certificate Principal Balance of each
Class of Notes and Certificates representing a regular interest in the applicable REMIC is the Final
Payment Date.
(l) Within 30 days after the Closing Date, the REMIC Administrator shall
prepare and file with the Internal Revenue Service Form 8811, "Information Return for Real Estate
Mortgage Investment Conduits (REMIC) and Issuers of Collateralized Debt Obligations" for each
REMIC created hereunder.
(m) Neither the Indenture Trustee nor the Servicer shall sell, dispose of or
substitute for any of the Mortgage Loans (except in connection with (i) the default, imminent default
or foreclosure of a Mortgage Loan, including but not limited to, the acquisition or sale of a
Mortgaged Property acquired by deed in lieu of foreclosure, (ii) the bankruptcy of any of the REMICs
created hereunder, (iii) the termination of the applicable REMIC pursuant to Section 8.02 of the
Trust Agreement or (iv) a purchase of Mortgage Loans pursuant to the Purchase Agreement) nor acquire
any assets for any of the REMICs, nor sell or dispose of any investments in the Custodial Account or
the Payment Account for gain nor accept any contributions to any of the REMICs after the Closing Date
unless it has received an Opinion of Counsel that such sale, disposition, substitution or acquisition
will not (a) affect adversely the status of any of the REMICs as a REMIC or (b) unless the Servicer
has determined in its sole discretion to indemnify the Trust Estate against such tax, cause any
REMIC to be subject to a tax on "prohibited transactions" or "contributions" pursuant to the
REMIC Provisions.
(n) The Indenture Trustee will apply for employer identification numbers from
the Internal Revenue Service on a Form SS-4 or any other acceptable method for all tax entities.
Section 11.02 Servicer, REMIC Administrator and Indenture Trustee Indemnification.
(a) The Indenture Trustee agrees to indemnify the Trust Estate, the
REMIC Administrator and the Servicer for any taxes and costs including, without limitation, any
reasonable attorneys fees imposed on or incurred by the Trust Estate or the Servicer, as a result of
a breach of the Indenture Trustee's covenants set forth in Article VIII or this Article XI.
(b) The REMIC Administrator agrees to indemnify the Trust Estate, the Servicer,
the Depositor, the Owner Trustee and the Indenture Trustee for any taxes and costs (including,
without limitation, any reasonable attorneys' fees) imposed on or incurred by the Trust Estate, the
Depositor, GMACM Mortgage, LLC, the Servicer, the Owner Trustee or the Indenture Trustee, as a result
of a breach of the REMIC Administrator's covenants set forth in this Article XI with respect to
compliance with the REMIC Provisions, including without limitation, any penalties arising from the
Owner Trustee's execution of Tax Returns prepared by the REMIC Administrator that contain errors or
omissions; provided, however, that such liability will not be imposed to the extent such breach is a
result of an error or omission in information provided to the REMIC Administrator by the Servicer in
which case Section 11.02(c) will apply.
(c) The Servicer agrees to indemnify the Trust Estate, the REMIC Administrator,
the Owner Trustee and the Indenture Trustee for any taxes and costs (including, without limitation,
any reasonable attorneys' fees) imposed on or incurred by the Trust Estate, the REMIC Administrator,
the Owner Trustee or the Indenture Trustee, as a result of a breach of the Servicer's covenants set
forth in this Article XI or in Article III with respect to compliance with the REMIC Provisions,
including without limitation, any penalties arising from the Indenture Trustee's execution of Tax
Returns prepared by the Servicer that contain errors or omissions.
Section 11.03 Designation of REMIC(s).
The REMIC Administrator will make an election to treat the entire segregated pool of assets
described in the definition of Trust Estate, and subject to this Agreement (including the Mortgage
Loans, as set forth in Section 2.06 of the Trust Agreement ) as a REMIC ("REMIC I"), will make an
election to treat the pool of assets comprised of the REMIC I Regular Interests as a
REMIC ("REMIC II"), and will make an election to treat the pool of assets comprised of the REMIC II
Regular Interests as a REMIC ("REMIC III"), for federal income tax purposes.
The REMIC I Regular Interests will be "regular interests" in REMIC I and the Class R-I
Certificates will be the sole class of "residual interests" in REMIC I for purposes of the
REMIC Provisions under the federal income tax law.
The REMIC II Regular Interests will be "regular interests" in REMIC II and the Class R-II
Certificates will be the sole class of "residual interests" therein for purposes of the
REMIC Provisions under federal income tax law.
The REMIC III Regular Interests will be "regular interests" in REMIC III and the Class R-III
Certificates will be the sole class of "residual interests" therein for purposes of the
REMIC Provisions under federal income tax law.
IN WITNESS WHEREOF, the Issuer and the Indenture Trustee have caused their names to be
signed hereto by their respective officers thereunto duly authorized, all as of the day and year
first above written.
GMACM HOME EQUITY LOAN TRUST 2007-HE3, as Issuer
By: WILMINGTON TRUST COMPANY, not in its
individual capacity but solely as Owner
Trustee
By:___________________________________________
Name:
Title:
THE BANK OF NEW YORK TRUST COMPANY, N.A., as
Indenture Trustee
By:__________________________________________
Name:
Title:
THE BANK OF NEW YORK TRUST COMPANY, N.A.
xxxxxx accepts appointment as Paying
Agent pursuant to Section 3.03 hereof
and as Note Registrar pursuant to Section
4.02 hereof.
By:______________________________________
Name:
Title:
Signatures and Seals
STATE OF _______________ )
) ss.:
COUNTY OF _____________ )
On this ___ day of October 2007, before me personally appeared ____________, to me known,
who being by me duly sworn, did depose and say, that he/she resides at _____________, that he/she is
the ____________ of Wilmington Trust Company, the Owner Trustee, one of the corporations described in
and which executed the above instrument; that he/she knows the seal of said corporation; that the
seal affixed to said instrument is such corporate seal; that it was so affixed by order of the Board
of Directors of said corporation; and that he/she signed his/her name thereto by like order.
____________________________________________________
Notary Public
Acknowledgements
STATE OF _______________ )
) ss.:
COUNTY OF _____________ )
On this ___ day of October 2007, before me personally appeared __________, to me known, who
being by me duly sworn, did depose and say, that he/she resides at _____________; that he/she is the
___________ of The Bank of New York Trust Company, N.A. as Indenture Trustee, one of the corporations
described in and which executed the above instrument; that he/she knows the seal of said corporation;
that the seal affixed to said instrument is such corporate seal; that it was so affixed by order of
the Board of Directors of said corporation; and that he/she signed his/her name thereto by like order.
____________________________________________________
Notary Public
NOTORIAL SEAL
EXHIBIT A
FORM OF CLASS A NOTES
UNLESS THIS NOTE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK
CORPORATION ("DTC"), TO THE ISSUER OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY NOTE
ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN
AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY
PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
THE PRINCIPAL OF THIS NOTE IS PAYABLE IN INSTALLMENTS AS SET FORTH HEREIN. ACCORDINGLY, THE OUTSTANDING
PRINCIPAL AMOUNT OF THIS NOTE AT ANY TIME MAY BE LESS THAN THE AMOUNT SHOWN ON THE FACE HEREOF.
THIS NOTE DOES NOT REPRESENT AN INTEREST IN OR OBLIGATION OF THE SELLER, THE DEPOSITOR, THE SERVICER, THE
INDENTURE TRUSTEE, THE OWNER TRUSTEE OR GMAC MORTGAGE GROUP, LLC OR ANY OF THEIR RESPECTIVE AFFILIATES, EXCEPT AS
EXPRESSLY PROVIDED IN THE INDENTURE OR THE OTHER BASIC DOCUMENTS.
THE HOLDER OF THIS NOTE IS DEEMED TO HAVE REPRESENTED THAT THE ACQUISITION OF THIS NOTE BY THE HOLDER DOES NOT
CONSTITUTE OR GIVE RISE TO A PROHIBITED TRANSACTION UNDER SECTION 406 OF ERISA OR SECTION 4975 OF THE CODE, FOR
WHICH NO STATUTORY, REGULATORY OR ADMINISTRATIVE EXEMPTION IS AVAILABLE.
GMACM HOME EQUITY LOAN TRUST 2007-HE3
GMACM Home Equity Loan-Backed Note, Class A
Registered Initial Note Balance:
$_________
No. A-__ Note Rate: Fixed
CUSIP NO. _________
GMACM Home Equity Loan Trust 2007-HE3, a statutory trust duly organized and existing under the laws of
the State of Delaware (herein referred to as the "Issuer"), for value received, hereby promises to pay to Cede &
Co. or its registered assigns, the principal sum of __________________dollars ($_________), payable on each
Payment Date in an amount equal to the pro rata portion allocable hereto (based on the Initial Note Balance
specified above and the Initial Note Balance of all Class A-__ Notes) of the aggregate amount, if any, payable
from the Note Payment Account in respect of principal of the Class A Notes (the "Notes") pursuant to Section 3.05
of the indenture dated as of October 26, 2007 (the "Indenture"), between the Issuer and The Bank of New York
Trust Company, National Association, as indenture trustee (the "Indenture Trustee"); provided, however, the
entire unpaid principal amount of this Note shall be due and payable on the Payment Date occurring in September
2037, in each case, to the extent not previously paid on a prior Payment Date. Capitalized terms used herein
that are not otherwise defined shall have the meanings ascribed thereto in Appendix A to the Indenture.
Interest on the Notes will be paid monthly on each Payment Date at the Note Rate for the related class
of Notes for the Interest Period. Interest on this Note will accrue for each Payment Date from the most recent
Payment Date on which interest has been paid (in the case of the first Payment Date, from the Closing Date) to
but excluding such Payment Date. Interest will be computed on the basis of a thirty day month in each Interest
Period and a year assumed to consist of 360 days.
Principal of and interest on this Note are payable in such coin or currency of the United States of
America as at the time of payment is legal tender for payment of public and private debts. All payments made by
the Issuer with respect to this Note shall be applied first to interest due and payable on this Note as provided
above and then to the unpaid principal of this Note.
Reference is made to the further provisions of this Note set forth on the reverse hereof, which shall
have the same effect as though fully set forth on the face of this Note.
Unless the certificate of authentication hereon has been executed by the Indenture Trustee whose name
appears below by manual signature, this Note shall not be entitled to any benefit under the Indenture, or be
valid or obligatory for any purpose.
This Note is one of a duly authorized issue of Notes of the Issuer, designated as its GMACM Home Equity
Loan-Backed Term Notes, Series 2007-HE3 (the "Series 2007-HE3 Notes"), all issued under the Indenture, to which
Indenture and all indentures supplemental thereto reference is hereby made for a statement of the respective
rights and obligations thereunder of the Issuer, the Indenture Trustee and the Noteholders of the Series 2007-HE3
Notes. The Series 2007-HE3 Notes are subject to all terms of the Indenture.
The Series 2007-HE3 Notes (the "Notes") are and will be equally and ratably secured by the collateral
pledged as security therefor as provided in the Indenture.
Principal of and interest on this Note will be payable on each Payment Date, commencing on November 26,
2007, as described in the Indenture. "Payment Date" means the twenty-fifth day of each month, or, if any such
date is not a Business Day, then the next succeeding Business Day.
The entire unpaid principal amount of this Note shall be due and payable in full on the Payment Date in
September 2037 pursuant to the Indenture, to the extent not previously paid on a prior Payment Date.
Notwithstanding the foregoing, if an Event of Default shall have occurred and be continuing, then the Indenture
Trustee or the Noteholders of Notes representing not less than a majority of the aggregate Note Balance of the
Notes, may declare the Notes to be immediately due and payable in the manner provided in Section 5.02 of the
Indenture. All principal payments on the Notes shall be made pro rata to the Noteholders of Notes entitled
thereto.
Any installment of interest or principal, if any, payable on any Note that is punctually paid or duly
provided for by the Issuer on the applicable Payment Date shall be paid to the related Noteholder on the
preceding Record Date, by wire transfer to an account specified in writing by such Noteholder reasonably
satisfactory to the Indenture Trustee as of the preceding Record Date or, if no such instructions have been
delivered to the Indenture Trustee, by check or money order to such Noteholder mailed to such Noteholder's
address as it appears in the Note Register, the amount required to be distributed to such Noteholder on such
Payment Date pursuant to such Noteholder's Notes; provided, however, that the Indenture Trustee shall not pay to
such Noteholder any amount required to be withheld from a payment to such Noteholder by the Code. Any reduction
in the principal amount of this Note (or any one or more predecessor Notes) effected by any payments made on any
Payment Date shall be binding upon all future Noteholders of this Note and of any Note issued upon the
registration of transfer hereof or in exchange hereof or in lieu hereof, whether or not noted hereon. If funds
are expected to be available, as provided in the Indenture, for payment in full of the then remaining unpaid
principal amount of this Note on a Payment Date, then the Indenture Trustee, in the name of and on behalf of the
Issuer, will notify the Person who was the registered Noteholder hereof as of the Record Date preceding such
Payment Date by notice mailed or transmitted by facsimile prior to such Payment Date, and the amount then due and
payable shall be payable only upon presentation and surrender of this Note at the address specified in such
notice of final payment.
As provided in the Indenture and subject to certain limitations set forth therein, the transfer of this
Note may be registered on the Note Register upon surrender of this Note for registration of transfer at the
Corporate Trust Office of the Indenture Trustee, duly endorsed by, or accompanied by a written instrument of
transfer in form satisfactory to the Indenture Trustee duly executed by, the Noteholder hereof or such
Noteholder's attorney duly authorized in writing, with such signature guaranteed by an "eligible guarantor
institution" meeting the requirements of the Note Registrar, which requirements include membership or
participation in the Securities Transfer Agent's Medallion Program ("STAMP") or such other "signature guarantee
program" as may be determined by the Note Registrar in addition to, or in substitution for, STAMP, all in
accordance with the Exchange Act, and thereupon one or more new Notes in authorized denominations and in the same
aggregate principal amount will be issued to the designated transferee or transferees. No service charge will be
charged for any registration of transfer or exchange of this Note, but the Note Registrar shall require payment
of a sum sufficient to cover any tax or governmental charge that may be imposed in connection with any
registration of transfer or exchange of this Note.
Each Noteholder or Beneficial Owner of a Note, by its acceptance of a Note, or, in the case of a
Beneficial Owner of a Note, a beneficial interest in a Note, covenants and agrees that no recourse may be taken,
directly or indirectly, with respect to the obligations of the Issuer, the Owner Trustee, the Seller, the
Servicer, the Depositor or the Indenture Trustee on the Notes or under the Indenture or any certificate or other
writing delivered in connection therewith, against (i) the Indenture Trustee or the Owner Trustee in its
individual capacity, (ii) any owner of a beneficial interest in the Issuer or (iii) any partner, owner,
beneficiary, agent, officer, director or employee of the Indenture Trustee or the Owner Trustee in its individual
capacity, any holder of a beneficial interest in the Issuer, the Owner Trustee or the Indenture Trustee or of any
successor or assign of the Indenture Trustee or the Owner Trustee in its individual capacity, except as any such
Person may have expressly agreed and except that any such partner, owner or beneficiary shall be fully liable, to
the extent provided by applicable law for any unpaid consideration for stock, unpaid capital contribution or
failure to pay any installment or call owing to such entity.
Each Noteholder or Beneficial Owner of a Note, by its acceptance of a Note or, in the case of a
Beneficial Owner of a Note, a beneficial interest in a Note, covenants and agrees by accepting the benefits of
the Indenture that such Noteholder or Beneficial Owner will not at any time institute against the Depositor or
the Issuer, or join in any institution against the Depositor or the Issuer of, any bankruptcy, reorganization,
arrangement, insolvency or liquidation proceedings under any United States federal or state bankruptcy or similar
law in connection with any obligations relating to the Notes, the Indenture or the other Basic Documents.
The Issuer has entered into the Indenture and this Note is issued with the intention that, for federal,
state and local income, single business and franchise tax purposes, the Notes will qualify as indebtedness of the
Issuer. Each Noteholder by its acceptance of a Note (and each Beneficial Owner of a Note by its acceptance of a
beneficial interest in a Note), agrees to treat the Notes for federal, state and local income, single business
and franchise tax purposes as indebtedness of the Issuer.
Prior to the due presentment for registration of transfer of this Note, the Issuer, the Indenture
Trustee and any agent of the Issuer or the Indenture Trustee may treat the Person in the name of which this Note
is registered (as of the day of determination or as of such other date as may be specified in the Indenture) as
the owner hereof for all purposes, whether or not this Note be overdue, and none of the Issuer, the Indenture
Trustee or any such agent shall be affected by notice to the contrary.
The Indenture permits, with certain exceptions therein provided, the amendment thereof and the
modification of the rights and obligations of the Issuer and the Indenture Trustee and the rights of the
Noteholders of the Series 2007-HE3 Notes under the Indenture at any time by the Issuer and the Indenture Trustee
with the consent of the Noteholders of Notes representing a majority of the aggregate Note Balance of the Notes
then Outstanding and with prior notice to the Rating Agencies. The Indenture also contains provisions permitting
the Noteholders of Notes representing specified percentages of the Note Balances of the Series 2007-HE3 Notes, on
behalf of the Noteholders of all Series 2007-HE3 Notes, to waive compliance by the Issuer with certain provisions
of the Indenture and certain past defaults under the Indenture and their consequences. Any such consent or
waiver by the Noteholder of this Note (or any one of more predecessor Notes) shall be conclusive and binding upon
such Noteholder and upon all future Noteholders of this Note and of any Note issued upon the registration of
transfer hereof or in exchange hereof or in lieu hereof whether or not notation of such consent or waiver is made
upon this Note. The Indenture also permits the Issuer and the Indenture Trustee to amend or waive certain terms
and conditions set forth in the Indenture without the consent of Noteholders of the Series 2007-HE3 Notes issued
thereunder but with prior notice to the Rating Agencies.
The term "Issuer" as used in this Note includes any successor or the Issuer under the Indenture.
The Issuer is permitted by the Indenture, under certain circumstances, to merge or consolidate, subject
to the rights of the Indenture Trustee and the Noteholders of Notes under the Indenture.
The Notes are issuable only in registered form in denominations as provided in the Indenture, subject to
certain limitations therein set forth.
This Note and the Indenture shall be construed in accordance with the laws of the State of New York,
without reference to its conflicts of law provisions, and the obligations, rights and remedies of the parties
hereunder and thereunder shall be determined in accordance with such laws.
No reference herein to the Indenture and no provision of this Note or of the Indenture shall alter or
impair the obligation of the Issuer, which is absolute and unconditional, to pay the principal of and interest on
this Note at the times, place and rate, and in the coin or currency herein prescribed.
Anything herein to the contrary notwithstanding, except as expressly provided in the Basic Documents,
none of Wilmington Trust Company in its individual capacity, The Bank of New York Trust Company, N.A. in its
individual capacity, any owner of a beneficial interest in the Issuer, or any of their respective partners,
beneficiaries, agents, officers, directors, employees or successors or assigns shall be personally liable for,
nor shall recourse be had to any of them for, the payment of principal of or interest on this Note or the
performance of, or the failure to perform, any of the covenants, obligations or indemnifications contained in the
Indenture. The Noteholder of this Note, by its acceptance hereof, agrees that, except as expressly provided in
the Basic Documents, in the case of an Event of Default under the Indenture, such Noteholder shall have no claim
against any of the foregoing for any deficiency, loss or claim therefrom; provided, however, that nothing
contained herein shall be taken to prevent recourse to, and enforcement against, the assets of the Issuer for any
and all liabilities, obligations and undertakings contained in the Indenture or in this Note.
The Servicer shall have the right to purchase from the Issuer all of the Mortgage Loans and related REO
Property if the aggregate Note Balance of the Notes as of any Payment Date is less than 10% of the aggregate Note
Balance of the Notes as of the Closing Date, (provided that the purchase price will provide sufficient funds to
pay the outstanding Note Balance and accrued and unpaid interest on the Notes to the Payment Date on which such
amounts are to be distributed to the Securityholders), at a price equal to 100% of the aggregate unpaid Principal
Balance of all such remaining Mortgage Loans, plus accrued and unpaid interest thereon at the weighted average of
the Loan Rates thereon up to the date preceding the Payment Date on which such amounts are to be distributed to
the Securityholders (and in the case of REO Property, the fair market value of the REO Property), (and any unpaid
Servicing Fee relating to the Mortgage Loans shall be deemed to have been paid at such time), plus any Interest
Shortfall and interest owed thereon to the Noteholders.
IN WITNESS WHEREOF, the Owner Trustee, on behalf of the Issuer and not in its individual capacity, has
caused this Note to be duly executed.
GMACM HOME EQUITY LOAN TRUST 2007-HE3
By: WILMINGTON TRUST COMPANY, not in its individual
capacity but solely as Owner Trustee
Dated: ___________________
By:__________________________________________________
Authorized Signatory
CERTIFICATE OF AUTHENTICATION
This is one of the Notes referred to in the within-mentioned Indenture.
THE BANK OF NEW YORK TRUST COMPANY, N.A.,
not in its individual capacity but solely as
Indenture Trustee
Dated: ___________________
By:__________________________________________________
Authorized Signatory
ASSIGNMENT
Social Security or taxpayer I.D. or other identifying number of assignee: _______________
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfer unto
________________________________
(name and address of assignee)
the within Note and all rights thereunder, and hereby irrevocably constitutes and appoints
___________________________________________________________________________________________________________________
___________________________, attorney, to transfer said Note on the books kept for registration thereof, with
full power of substitution in the premises.
Dated:____________________________________ ______________________________________________________ */
Signature Guaranteed:
______________________________________________________ */
_____________________________
* NOTICE: The signature to this assignment must correspond with the name of the registered owner as it
appears on the face of the within Term Note in every particular, without alteration, enlargement or any change
whatever. Such signature must be guaranteed by an "eligible guarantor institution" meeting the requirements of
the Note Registrar, which requirements include membership or participation in STAMP or such other "signature
guarantee program" as may be determined by the Note Registrar in addition to, or in substitution for, STAMP, all
in accordance with the Securities Exchange Act of 1934, as amended.
EXHIBIT B
FORM OF CLASS M NOTES
THIS NOTE IS SUBORDINATED IN RIGHT OF PAYMENT TO THE CLASS A NOTES AS DESCRIBED IN THE INDENTURE.
UNLESS THIS NOTE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK
CORPORATION ("DTC"), TO THE ISSUER OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY NOTE
ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN
AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY
PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
THE PRINCIPAL OF THIS NOTE IS PAYABLE IN INSTALLMENTS AS SET FORTH HEREIN. ACCORDINGLY, THE OUTSTANDING
PRINCIPAL AMOUNT OF THIS NOTE AT ANY TIME MAY BE LESS THAN THE AMOUNT SHOWN ON THE FACE HEREOF.
THIS NOTE DOES NOT REPRESENT AN INTEREST IN OR OBLIGATION OF THE SELLER, THE DEPOSITOR, THE SERVICER, THE
INDENTURE TRUSTEE, THE OWNER TRUSTEE OR GMAC MORTGAGE GROUP, LLC OR ANY OF THEIR RESPECTIVE AFFILIATES, EXCEPT AS
EXPRESSLY PROVIDED IN THE INDENTURE OR THE OTHER BASIC DOCUMENTS.
THE HOLDER OF THIS NOTE IS DEEMED TO HAVE REPRESENTED THAT THE ACQUISITION OF THIS NOTE BY THE HOLDER DOES NOT
CONSTITUTE OR GIVE RISE TO A PROHIBITED TRANSACTION UNDER SECTION 406 OF ERISA OR SECTION 4975 OF THE CODE, FOR
WHICH NO STATUTORY, REGULATORY OR ADMINISTRATIVE EXEMPTION IS AVAILABLE.
GMACM Home Equity Loan-Backed Term Note, Class M-[ ]
Registered
Initial Note Balance: $_____________.00
No. M-__
Note Rate: Fixed
CUSIP NO. __________
GMACM HOME EQUITY LOAN TRUST 2007-HE3
GMACM Home Equity Loan Trust 2007-HE3, a statutory trust duly organized and existing under the laws of
the State of Delaware (herein referred to as the "Issuer"), for value received, hereby promises to pay to Cede &
Co. or its registered assigns, the principal sum of _______________________________________________ Dollars
($__________), payable on each Payment Date in an amount equal to the pro rata portion allocable hereto (based on
the Initial Note Balance specified above and the Initial Note Balance of all Class M-__ Notes) of the aggregate
amount, if any, payable from the Note Payment Account in respect of principal of the Class M Notes (the "Notes")
pursuant to Section 3.05 of the indenture dated as of October 26, 2007 (the "Indenture"), between the Issuer and
The Bank of New York Trust Company, National Association, as indenture trustee (the "Indenture Trustee");
provided, however, that the entire unpaid principal amount of this Note shall be due and payable on the Payment
Date in September 2037, to the extent not previously paid on a prior Payment Date. Capitalized terms used herein
that are not otherwise defined shall have the meanings ascribed thereto in Appendix A to the Indenture.
Interest on the Notes will be paid monthly on each Payment Date at the Note Rate for the related Class
of Notes for the Interest Period. The Note Rate for each Interest Period will be a fixed rate equal to the
lesser of a per annum rate equal to (i) 7.500% and (ii) the Class M Net WAC Cap Rate. Interest on this Note will
accrue for each Payment Date from the most recent Payment Date on which interest has been paid (in the case of
the first Payment Date, from the Closing Date) to but excluding such Payment Date. Interest will be computed on
the basis of a thirty day month in each Interest Period and a year assumed to consist of 360 days. Principal of
and interest on this Note shall be paid in the manner specified on the reverse hereof.
Principal of and interest on this Note are payable in such coin or currency of the United States of
America as at the time of payment is legal tender for payment of public and private debts. All payments made by
the Issuer with respect to this Note shall be applied first to interest due and payable on this Note as provided
above and then to the unpaid principal of this Note.
Reference is made to the further provisions of this Note set forth on the reverse hereof, which shall
have the same effect as though fully set forth on the face of this Note.
Unless the certificate of authentication hereon has been executed by the Indenture Trustee whose name
appears below by manual signature, this Note shall not be entitled to any benefit under the Indenture referred to
on the reverse hereof, or be valid or obligatory for any purpose.
This Note is one of a duly authorized issue of Notes of the Issuer, designated as its GMACM Home Equity
Loan-Backed Term Notes, Series 2007-HE3 (the "Series 2007-HE3 Notes"), all issued under the Indenture, to which
Indenture and all indentures supplemental thereto reference is hereby made for a statement of the respective
rights and obligations thereunder of the Issuer, the Indenture Trustee and the Noteholders of the Series 2007-HE3
Notes. The Series 2007-HE3 Notes are subject to all terms of the Indenture.
The Series 2007-HE3 Notes are and will be equally and ratably secured by the collateral pledged as
security therefor as provided in the Indenture.
Principal of and interest on this Note will be payable on each Payment Date, commencing on November 26,
2007, as described in the Indenture. "Payment Date" means the twenty-fifth day of each month, or, if any such
date is not a Business Day, then the next succeeding Business Day.
The entire unpaid principal amount of this Note shall be due and payable in full on the Payment Date in
September 2037 pursuant to the Indenture, to the extent not previously paid on a prior Payment Date.
Notwithstanding the foregoing, if an Event of Default shall have occurred and be continuing, then the Indenture
Trustee or the Noteholders of Notes representing not less than a majority of the aggregate Note Balance of the
Notes may declare the Notes to be immediately due and payable in the manner provided in Section 5.02 of the
Indenture. All principal payments on the Notes shall be made pro rata to the Noteholders of Notes entitled
thereto.
Any installment of interest or principal, if any, payable on any Note that is punctually paid or duly
provided for by the Issuer on the applicable Payment Date shall be paid to the related Noteholder on the
preceding Record Date, by wire transfer to an account specified in writing by such Noteholder reasonably
satisfactory to the Indenture Trustee as of the preceding Record Date or, if no such instructions have been
delivered to the Indenture Trustee, by check or money order to such Noteholder mailed to such Noteholder's
address as it appears in the Note Register, the amount required to be distributed to such Noteholder on such
Payment Date pursuant to such Noteholder's Notes; provided, however, that the Indenture Trustee shall not pay to
such Noteholder any amount required to be withheld from a payment to such Noteholder by the Code. Any reduction
in the principal amount of this Note (or any one or more predecessor Notes) effected by any payments made on any
Payment Date shall be binding upon all future Noteholders of this Note and of any Note issued upon the
registration of transfer hereof or in exchange hereof or in lieu hereof, whether or not noted hereon. If funds
are expected to be available, as provided in the Indenture, for payment in full of the then remaining unpaid
principal amount of this Note on a Payment Date, then the Indenture Trustee, in the name of and on behalf of the
Issuer, will notify the Person who was the registered Noteholder hereof as of the Record Date preceding such
Payment Date by notice mailed or transmitted by facsimile prior to such Payment Date, and the amount then due and
payable shall be payable only upon presentation and surrender of this Note at the address specified in such
notice of final payment.
As provided in the Indenture and subject to certain limitations set forth therein, the transfer of this
Note may be registered on the Note Register upon surrender of this Note for registration of transfer at the
Corporate Trust Office of the Indenture Trustee, duly endorsed by, or accompanied by a written instrument of
transfer in form satisfactory to the Indenture Trustee duly executed by, the Noteholder hereof or such
Noteholder's attorney duly authorized in writing, with such signature guaranteed by an "eligible guarantor
institution" meeting the requirements of the Note Registrar, which requirements include membership or
participation in the Securities Transfer Agent's Medallion Program ("STAMP") or such other "signature guarantee
program" as may be determined by the Note Registrar in addition to, or in substitution for, STAMP, all in
accordance with the Exchange Act, and thereupon one or more new Notes in authorized denominations and in the same
aggregate principal amount will be issued to the designated transferee or transferees. No service charge will be
charged for any registration of transfer or exchange of this Note, but the Note Registrar shall require payment
of a sum sufficient to cover any tax or governmental charge that may be imposed in connection with any
registration of transfer or exchange of this Note.
Each Noteholder or Beneficial Owner of a Note, by its acceptance of a Note, or, in the case of a
Beneficial Owner of a Note, a beneficial interest in a Note, covenants and agrees that no recourse may be taken,
directly or indirectly, with respect to the obligations of the Issuer, the Owner Trustee, the Seller, the
Servicer, the Depositor or the Indenture Trustee on the Notes or under the Indenture or any certificate or other
writing delivered in connection therewith, against (i) the Indenture Trustee or the Owner Trustee in its
individual capacity, (ii) any owner of a beneficial interest in the Issuer or (iii) any partner, owner,
beneficiary, agent, officer, director or employee of the Indenture Trustee or the Owner Trustee in its individual
capacity, any holder of a beneficial interest in the Issuer, the Owner Trustee or the Indenture Trustee or of any
successor or assign of the Indenture Trustee or the Owner Trustee in its individual capacity, except as any such
Person may have expressly agreed and except that any such partner, owner or beneficiary shall be fully liable, to
the extent provided by applicable law for any unpaid consideration for stock, unpaid capital contribution or
failure to pay any installment or call owing to such entity.
Each Noteholder or Beneficial Owner of a Note, by its acceptance of a Note or, in the case of a
Beneficial Owner of a Note, a beneficial interest in a Note, covenants and agrees by accepting the benefits of
the Indenture that such Noteholder or Beneficial Owner will not at any time institute against the Depositor, the
Seller, the Servicer, GMAC Mortgage GROUP, LLC or the Issuer, or join in any institution against the Depositor,
the Seller, the Servicer, GMAC Mortgage Group, LLC or the Issuer of, any bankruptcy, reorganization, arrangement,
insolvency or liquidation proceedings under any United States federal or state bankruptcy or similar law in
connection with any obligations relating to the Notes, the Indenture or the other Basic Documents.
The Issuer has entered into the Indenture and this Note is issued with the intention that, for federal,
state and local income, single business and franchise tax purposes, the Notes will qualify as indebtedness of the
Issuer. Each Noteholder, by its acceptance of a Note (and each Beneficial Owner of a Note by its acceptance of a
beneficial interest in a Note), agrees to treat the Notes for federal, state and local income, single business
and franchise tax purposes as indebtedness of the Issuer.
Prior to the due presentment for registration of transfer of this Note, the Issuer, the Indenture
Trustee and any agent of the Issuer or the Indenture Trustee may treat the Person in the name of which this Note
is registered (as of the day of determination or as of such other date as may be specified in the Indenture) as
the owner hereof for all purposes, whether or not this Note be overdue, and none of the Issuer, the Indenture
Trustee or any such agent shall be affected by notice to the contrary.
The Indenture permits, with certain exceptions therein provided, the amendment thereof and the
modification of the rights and obligations of the Issuer and the Indenture Trustee and the rights of the
Noteholders of the Series 2007-HE3 Notes under the Indenture at any time by the Issuer and the Indenture Trustee
and the Noteholders of Notes representing a majority of the aggregate Note Balance of the Notes then Outstanding
and with prior notice to the Rating Agencies. The Indenture also contains provisions permitting the Noteholders
of Notes representing specified percentages of the Note Balances of the Series 2007-HE3 Notes, on behalf of the
Noteholders of all Series 2007-HE3 Notes, to waive compliance by the Issuer with certain provisions of the
Indenture and certain past defaults under the Indenture and their consequences. Any such consent or waiver by
the Noteholder of this Note (or any one of more predecessor Notes) shall be conclusive and binding upon such
Noteholder and upon all future Noteholders of this Note and of any Note issued upon the registration of transfer
hereof or in exchange hereof or in lieu hereof whether or not notation of such consent or waiver is made upon
this Note. The Indenture also permits the Issuer and the Indenture Trustee to amend or waive certain terms and
conditions set forth in the Indenture without the consent of Noteholders of the Series 2007-HE3 Notes issued
thereunder but with prior notice to the Rating Agencies.
The term "Issuer" as used in this Note includes any successor or the Issuer under the Indenture.
The Issuer is permitted by the Indenture, under certain circumstances, to merge or consolidate, subject
to the rights of the Indenture Trustee and the Noteholders of Notes under the Indenture.
The Notes are issuable only in registered form in denominations as provided in the Indenture, subject to
certain limitations therein set forth.
This Note and the Indenture shall be construed in accordance with the laws of the State of New York,
without reference to its conflicts of law provisions, and the obligations, rights and remedies of the parties
hereunder and thereunder shall be determined in accordance with such laws.
No reference herein to the Indenture and no provision of this Note or of the Indenture shall alter or
impair the obligation of the Issuer, which is absolute and unconditional, to pay the principal of and interest on
this Note at the times, place and rate, and in the coin or currency herein prescribed.
Anything herein to the contrary notwithstanding, except as expressly provided in the Basic Documents,
none of Wilmington Trust Company in its individual capacity, The Bank of New York Trust Company, N.A. in its
individual capacity, any owner of a beneficial interest in the Issuer, or any of their respective partners,
beneficiaries, agents, officers, directors, employees or successors or assigns shall be personally liable for,
nor shall recourse be had to any of them for, the payment of principal of or interest on this Note or the
performance of, or the failure to perform, any of the covenants, obligations or indemnifications contained in the
Indenture. The Noteholder of this Note, by its acceptance hereof, agrees that, except as expressly provided in
the Basic Documents, in the case of an Event of Default under the Indenture, such Noteholder shall have no claim
against any of the foregoing for any deficiency, loss or claim therefrom; provided, however, that nothing
contained herein shall be taken to prevent recourse to, and enforcement against, the assets of the Issuer for any
and all liabilities, obligations and undertakings contained in the Indenture or in this Note.
The Servicer shall have the right to purchase from the Issuer all of the Mortgage Loans and related REO
Property if the aggregate Note Balance of the Notes as of any Payment Date is less than 10% of the aggregate Note
Balance of the Notes as of the Closing Date, (provided that the purchase price will provide sufficient funds to
pay the outstanding Note Balance and accrued and unpaid interest on the Notes to the Payment Date on which such
amounts are to be distributed to the Securityholders), at a price equal to 100% of the aggregate unpaid Principal
Balance of all such remaining Mortgage Loans, plus accrued and unpaid interest thereon at the weighted average of
the Loan Rates thereon up to the date preceding the Payment Date on which such amounts are to be distributed to
the Securityholders (and in the case of REO Property, the fair market value of the REO Property), (and any unpaid
Servicing Fee relating to the Mortgage Loans shall be deemed to have been paid at such time), plus any Interest
Shortfall and interest owed thereon to the Noteholders.
[Signature Page Follows]
IN WITNESS WHEREOF, the Owner Trustee, on behalf of the Issuer and not in its individual capacity, has
caused this Note to be duly executed.
GMACM HOME EQUITY LOAN TRUST 2007-HE3
By: WILMINGTON TRUST COMPANY, not in its individual
capacity but solely as Owner Trustee
Dated: __________________
By:____________________________________________________
Authorized Signatory
CERTIFICATE OF AUTHENTICATION
This is one of the Notes referred to in the within-mentioned Indenture.
THE BANK OF NEW YORK TRUST COMPANY, N.A.,
not in its individual capacity but solely as
Indenture Trustee
By:__________________________________________________
Authorized Signatory
Dated: __________________
ASSIGNMENT
Social Security or taxpayer I.D. or other identifying number of assignee: _______________
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfer unto
______________________________________________________________________________________________________________________
(name and address of assignee)
the within Note and all rights thereunder, and hereby irrevocably constitutes and appoints
______________________________________________________________________________________________________________________
______________________________________________________________________________________________________________________,
attorney, to transfer said Note on the books kept for registration thereof, with full power of substitution in
the premises.
Dated:___________________________________ ______________________________________________________ */
Signature Guaranteed:
______________________________________________________ */
* NOTICE: The signature to this assignment must correspond with the name of the registered owner as it
appears on the face of the within Note in every particular, without alteration, enlargement or any change
whatever. Such signature must be guaranteed by an "eligible guarantor institution" meeting the requirements of
the Note Registrar, which requirements include membership or participation in STAMP or such other "signature
guarantee program" as may be determined by the Note Registrar in addition to, or in substitution for, STAMP, all
in accordance with the Securities Exchange Act of 1934, as amended.
APPENDIX A
DEFINITIONS
Accrued Certificate Interest: With respect to the Class SB Certificates, interest accrued during the
related Interest Period at the Certificate Rate for such Certificate on its Notional Amount for such Payment Date.
Adverse REMIC Event: As defined in Section 11.01(f) of the Indenture.
Affiliate: With respect to any Person, any other Person controlling, controlled by or under common
control with such Person. For purposes of this definition, "control" means the power to direct the management
and policies of a Person, directly or indirectly, whether through ownership of voting securities, by contract or
otherwise and "controlling" and "controlled" shall have meanings correlative to the foregoing.
Appraised Value: With respect to any Mortgaged Property, either (x) the value as generally set forth in
an appraisal of such Mortgaged Property used to establish compliance with the underwriting criteria then in
effect in connection with the application for the Mortgage Loan secured by such Mortgaged Property, or (y) if the
sales price of such Mortgaged Property is considered in accordance with the underwriting criteria applicable to
the related Mortgage Loan, the lesser of (i) the appraised value referred to in (x) above and (ii) the sales
price of such Mortgaged Property.
Assignment of Mortgage: With respect to any Mortgage, an assignment, notice of transfer or equivalent
instrument, in recordable form, sufficient under the laws of the jurisdiction in which the related Mortgaged
Property is located to reflect the conveyance of such Mortgage, which assignment, notice of transfer or
equivalent instrument may be in the form of one or more blanket assignments covering Mortgages secured by
Mortgaged Properties located in the same jurisdiction.
Authorized Newspaper: A newspaper of general circulation in the Borough of Manhattan, The City of New
York, printed in the English language and customarily published on each Business Day, whether or not published on
Saturdays, Sundays or holidays.
Authorized Officer: With respect to the Issuer, any officer of the Owner Trustee who is authorized to
act for the Owner Trustee in matters relating to the Issuer and who is identified on the list of Authorized
Officers delivered by the Owner Trustee to the Indenture Trustee on the Closing Date (as such list may be
modified or supplemented from time to time thereafter).
Bankruptcy Code: The Bankruptcy Code of 1978, as amended.
Basic Documents: The Trust Agreement, the Indenture, the Purchase Agreement, the Servicing Agreement,
the Custodial Agreement and the other documents and certificates delivered in connection with any of the above.
Beneficial Owner: With respect to any Note, the Person who is the beneficial owner of such Note as
reflected on the books of the Depository or on the books of a Person maintaining an account with such Depository
(directly as a Depository Participant or indirectly through a Depository Participant, in accordance with the
rules of such Depository).
Billing Cycle: With respect to any Mortgage Loan and Due Date, the calendar month preceding such Due
Date.
Book-Entry Notes: Beneficial interests in the Notes, ownership and transfers of which shall be made
through book entries by the Depository as described in Section 4.06 of the Indenture.
Business Day: Any day other than (i) a Saturday or a Sunday or (ii) a day on which banking institutions
in the States of New York, Pennsylvania, Delaware or any State in which the Corporate Trust Office are required
or authorized by law to be closed.
Certificate Balance: With respect to any Payment Date and the Class SB Certificates, an amount equal to
the then applicable Certificate Percentage Interest of such Certificate multiplied by the Overcollateralization
Amount.
Certificate Distribution Amount: For any Payment Date, the amount, if any, distributable on the
Certificates for such Payment Date pursuant to Section 3.05(a)(xv) of the Indenture.
Certificate of Trust: The Certificate of Trust filed for the Trust pursuant to Section 3810(a) of the
Statutory Trust Statute.
Certificate Paying Agent: The Certificate Paying Agent appointed pursuant to Section 3.10 of the Trust
Agreement. Initially the Indenture Trustee has been appointed as the Certificate Paying Agent.
Certificate Percentage Interest: With respect to any Payment Date and any Certificate, the Percentage
Interest for such Certificate.
Certificate Rate: With respect to the Class SB Certificates and REMIC III Regular Interest SB-IO and any
Payment Date, a rate per annum equal to the percentage equivalent of a fraction, the numerator of which is the
sum of the amounts calculated pursuant to clauses (i) through (viii) below, and the denominator of which is the
aggregate Uncertificated Principal Balance of the REMIC II Regular Interests. For purposes of calculating the
Certificate Rate for the Class SB Certificates and REMIC III Regular Interest SB-IO, the numerator is equal to
the sum of the following components:
(i) the REMIC II Remittance Rate for REMIC II Regular Interest LT1 minus the SB-IO Marker Rate,
applied to a notional amount equal to the Uncertificated Principal Balance of REMIC II Regular Interest LT1;
(ii) the REMIC II Remittance Rate for REMIC II Regular Interest LT2 minus the SB-IO Marker Rate,
applied to a notional amount equal to the Uncertificated Principal Balance of REMIC II Regular Interest LT2;
(iii) the REMIC II Remittance Rate for REMIC II Regular Interest LT4 minus twice the SB-IO Marker
Rate, applied to a notional amount equal to the Uncertificated Principal Balance of REMIC II Regular Interest LT4;
(iv) the REMIC II Remittance Rate for REMIC II Regular Interest LTY-1 minus the SB-IO Marker Rate,
applied to a notional amount equal to the Uncertificated Principal Balance of REMIC II Regular Interest LTY-1;
(v) the REMIC II Remittance Rate for REMIC II Regular Interest LT5 minus the SB-IO Marker Rate,
applied to a notional amount equal to the Uncertificated Principal Balance of REMIC II Regular Interest LT5;
(vi) the REMIC II Remittance Rate for REMIC II Regular Interest LT6 minus the SB-IO Marker Rate,
applied to a notional amount equal to the Uncertificated Principal Balance of REMIC II Regular Interest LT6;
(vii) the REMIC II Remittance Rate for REMIC II Regular Interest LT8 minus twice the SB-IO Marker
Rate, applied to a notional amount equal to the Uncertificated Principal Balance of REMIC II Regular Interest
LT8; and
(viii) the REMIC II Remittance Rate for REMIC II Regular Interest LTY-2 minus the SB-IO Marker Rate,
applied to a notional amount equal to the Uncertificated Principal Balance of REMIC II Regular Interest LTY-2.
Certificate Register: The register maintained by the Certificate Registrar in which the Certificate
Registrar shall provide for the registration of Certificates and of transfers and exchanges of Certificates.
Certificate Registrar: The Certificate Registrar appointed pursuant to Section 3.05 of the Trust
Agreement. Initially the Indenture Trustee has been appointed as the Certificate Registrar.
Certificateholder: The Person in whose name a Certificate is registered in the Certificate Register
except that, any Certificate registered in the name of the Issuer, the Owner Trustee or the Indenture Trustee or
any Affiliate of the Owner Trustee or the Indenture Trustee shall be deemed not to be outstanding and the
registered holder will not be considered a Certificateholder for purposes of giving any request, demand,
authorization, direction, notice, consent or waiver under the Indenture or the Trust Agreement; provided that, in
determining whether the Indenture Trustee or the Owner Trustee shall be protected in relying upon any such
request, demand, authorization, direction, notice, consent or waiver, only Certificates that the Indenture
Trustee or the Owner Trustee knows to be so owned shall be so disregarded. Owners of Certificates that have been
pledged in good faith may be regarded as Certificateholders if the pledgee establishes to the satisfaction of the
Indenture Trustee or the Owner Trustee, as the case may be, the pledgee's right so to act with respect to such
Certificates and that the pledgee is not the Issuer, any other obligor upon the Certificates or any Affiliate of
the Owner Trustee or the Indenture Trustee.
Certificates: Collectively, the Class R and the Class SB Certificates.
Class: With respect to any Note, all Notes that bear the same Class designation, (i.e., the Class I-A-1
Notes as a group, Class I-A-2 Notes as a group, Class II-A-1 Notes as a group, Class II-A-2 Notes as a group,
Class M-1 Notes as a group and Class M-2 Notes as a group). With respect to any Certificate, all Certificates
that bear the same Class designation, (i.e., the Class SB Certificates as a group, Class R-I Certificates as a
group, Class R-II Certificates as a group and Class R-III Certificates as a group). With respect to any Regular
Interest, all Regular Interests that bear the same class designation.
Class I-A-1 Notes: The Class I-A-1 GMACM Home Equity Loan-Backed Term Notes, Series 2007-HE3, in
substantially the form set forth in Exhibit A-1 to the Indenture.
Class I-A-2 Notes: The Class I-A-2 GMACM Home Equity Loan-Backed Term Notes, Series 2007-HE3, in
substantially the form set forth in Exhibit A-1 to the Indenture.
Class II-A-1 Notes: The Class II-A-1 GMACM Home Equity Loan-Backed Term Notes, Series 2007-HE3, in
substantially the form set forth in Exhibit A-1 to the Indenture.
Class II-A-2 Notes: The Class II-A-2 GMACM Home Equity Loan-Backed Term Notes, Series 2007-HE3, in
substantially the form set forth in Exhibit A-1 to the Indenture.
Class A Notes: Collectively, the Class I-A-1 Notes, Class I-A-2 Notes, Class II-A-1 Notes and Class
II-A-2 Notes.
Class A Principal Distribution Amount: With respect to any Payment Date that is prior to the Stepdown
Date or on or after the Stepdown Date if a Trigger Event is in effect, the Principal Collection Distribution
Amount for such Payment Date. With respect to any Payment Date on or after the Stepdown Date if a Trigger Event
is not in effect as of such Payment Date, the lesser of (a) the Principal Collection Distribution Amount for such
Payment Date and (b) the excess of (i) the aggregate Note Balance of the Class A Notes as of such Payment Date
prior to any distributions thereon over (ii) the lesser of (x) the product of (1) the applicable Subordination
Percentage and (2) the Pool Balance after giving effect to distributions to be made on such Payment Date and (y)
the Pool Balance after to giving effect to distributions to be made on such Payment Date less the
Overcollateralization Floor.
Class M Net WAC Cap Rate: With respect to any Payment Date and the Class M Notes, a per annum rate
equal to the weighted average of (i) the Group I Net WAC Rate and (ii) Group II Net WAC Rate, weighted on the
basis of the related Subordinate Component.
Class M Notes: Together, the Class M-1 Notes and Class M-2 Notes.
Class M-1 Notes: The Class M-1 GMACM Home Equity Loan-Backed Term Notes, Series 2007-HE3, in
substantially the form set forth in Exhibit A-1 to the Indenture.
Class M-1 Principal Distribution Amount: With respect to any Payment Date that is prior to the Stepdown
Date or on or after the Stepdown Date if a Trigger Event is in effect, the remaining Principal Collection
Distribution Amount for such Payment Date after the distribution of the Class A Principal Distribution Amount.
With respect to any Payment Date on or after the Stepdown Date if a Trigger Event is not in effect as of such
Payment Date, the lesser of (a) the remaining Principal Collection Distribution Amount for such Payment Date
after the distribution of the Class A Principal Distribution Amount and (b) the excess of (i) the aggregate Note
Balance of the Class A Notes as of such Payment Date after any distributions on such Notes and (ii) the Note
Balance of the Class M 1 Notes as of such Payment Date prior to any distributions thereon over (A) the lesser of
(x) the product of (1) the applicable Subordination Percentage and (2) the Pool Balance after giving effect to
distributions to be made on such Payment Date and (y) the Pool Balance after to giving effect to distributions to
be made on such Payment Date less the Overcollateralization Floor.
Class M-2 Notes: The Class M-2 GMACM Home Equity Loan-Backed Term Notes, Series 2007-HE3, in
substantially the form set forth in Exhibit A-1 to the Indenture.
Class M-2 Principal Distribution Amount: With respect to any Payment Date that is prior to the Stepdown
Date or on or after the Stepdown Date if a Trigger Event is in effect, the remaining Principal Collection
Distribution Amount for such Payment Date after the distribution of the Class A Principal Distribution Amount and
the Class M 1 Principal Distribution Amount. With respect to any Payment Date on or after the Stepdown Date if a
Trigger Event is not in effect as of such Payment Date, the lesser of (a) the remaining Principal Collection
Distribution Amount for such Payment Date after the distribution of the Class A Principal Distribution Amount and
the Class M-1 Principal Distribution Amount and (b) the excess of (i) the aggregate Note Balance of the Class A
Notes and the Class M-1 Notes as of such Payment Date after any distributions on such Notes and (ii) the Note
Balance of the Class M-2 Notes as of such Payment Date prior to any distributions thereon over (A) the lesser of
(x) the product of (1) the applicable Subordination Percentage and (2) the Pool Balance after giving effect to
distributions to be made on such Payment Date and (y) the Pool Balance after to giving effect to distributions to
be made on such Payment Date less the Overcollateralization Floor.
Class Principal Balance: For each Class of Notes, the Initial Note Balance thereof as reduced on each
successive Payment Date by principal distributed in respect thereof on such Payment Date pursuant to Section 3.03
of the Servicing Agreement and Section 3.05 of the Indenture.
Class R Certificates: The Class R-I Certificates, Class R-II Certificates and Class R-III Certificates,
each as substantially in the form of Exhibit I to the Trust Agreement and entitled to distributions as provided
in the Trust Agreement.
Class SB Certificates: The Class SB Certificates substantially in the form of Exhibit A to the Trust
Agreement and entitled to distributions as provided in the Trust Agreement.
Class SB Distribution Amount: On any Payment Date, the sum of (i) Accrued Certificate Interest for such
Payment Date, (ii) the amounts payable to the Certificates pursuant to Section 3.05(a)(ix) of the Indenture and
(iii) the Overcollateralization Release Amount, if any, for the Determination Date related to such Payment Date,
reduced, but not below zero, by the Liquidation Loss Distribution Amount and Overcollateralization Increase
Amount for such Payment Date, all of the foregoing done without double counting either in addition or subtraction.
Closing Date: October 26, 2007.
Code: The Internal Revenue Code of 1986, as amended, and the rules and regulations promulgated
thereunder.
Collateral: The meaning specified in the Granting Clause of the Indenture.
Collection Period: With respect to any Mortgage Loan and Payment Date, the calendar month preceding any
such Payment Date.
Collections: With respect to any Collection Period, all Interest Collections and Principal Collections
during such Collection Period.
Combined Loan-to-Value Ratio or CLTV: With respect to each Mortgage Loan, the ratio, expressed as a
percentage, of the sum of (i) the initial principal balance of such Mortgage Loan, and (ii) any outstanding
principal balance, at origination of such Mortgage Loan, of all other mortgage loans, if any, secured by senior
liens on the related Mortgaged Property, to the Appraised Value, or, when not available, the Stated Value.
Commission: The Securities and Exchange Commission.
Corporate Trust Office: With respect to the Indenture Trustee, Certificate Registrar, Certificate
Paying Agent and Paying Agent, the principal corporate trust office of the Indenture Trustee and Note Registrar
at which at any particular time its corporate trust business shall be administered, which office at the date of
the execution of this instrument is located at 0 Xxx Xxxx Xxxxx, 0xx Xxxxx, Xxx Xxxx, Xxx Xxxx 10004, Attention:
Worldwide Securities Services/Structured Finance Services—GMACM Series 2007-HE3. With respect to the Owner
Trustee, the principal corporate trust office of the Owner Trustee at which at any particular time its corporate
trust business shall be administered, which office at the date of the execution of this Trust Agreement is
located at Xxxxxx Square North, 0000 Xxxxx Xxxxxx Xxxxxx, Xxxxxxxxxx, Xxxxxxxx 00000, Attention: Corporate Trust
Administration.
Custodial Account: The account or accounts created and maintained by the Servicer pursuant to
Section 3.02(b) of the Servicing Agreement, in which the Servicer shall deposit or cause to be deposited certain
amounts in respect of the Mortgage Loans.
Custodial Agreement: The Custodial Agreement, dated the Closing Date, among the Custodian, the
Indenture Trustee, the Issuer and the Servicer relating to the custody of the Mortgage Loans and the Related
Documents.
Custodian: GMAC Bank and its successors and assigns, as applicable pursuant to the Custodial Agreement,
or any other successor custodian of the Mortgage Files appointed by the Indenture Trustee and reasonably
acceptable to the Servicer.
Cut-Off Date: October 1, 2007.
Cut-Off Date Principal Balance: With respect to any Mortgage Loan, the unpaid principal balance thereof
as of the close of business on the last day of the Billing Cycle immediately prior to the Cut-Off Date.
Default: Any occurrence which is or with notice or the lapse of time or both would become an Event of
Default.
Definitive Notes: Any definitive, fully registered Note, as described in Section 4.06 of the Indenture.
Deleted Loan: A Mortgage Loan replaced or to be replaced with an Eligible Substitute Loan.
Delinquent: As used herein, a Mortgage Loan is considered to be: "30 to 59 days" or "30 or more days"
delinquent when a payment due on any scheduled due date remains unpaid as of the close of business on the next
following monthly due date. Since the determination as to whether a Mortgage Loan falls into these categories is
made as of the close of business on the last business day of each month, a Mortgage Loan with a payment due on
July 1 that remained unpaid as of the close of business on July 31 would still be considered current as of July
31. If that payment remained unpaid as of the close of business on August 31, the Mortgage Loan would then be
considered 30-59 days delinquent. Delinquency information as of the Cut-off Date is determined and prepared as
of the close of business on the last business day immediately prior to the Cut-off Date.
Delinquency Percentages: With respect to any Payment Date, the percentage equivalent of a fraction
(A) the numerator of which is the Principal Balance that are Delinquent for 60 days or more as of such Payment
Date and (B) the denominator of which is the Pool Balance, in each case as of the beginning of the related
Collection Period, expressed as a percentage.
Depositor: Residential Asset Mortgage Products, Inc., a Delaware corporation, or its successor in
interest.
Depository: The Depository Trust Company or a successor appointed by the Indenture Trustee with the
approval of the Issuer. Any successor to the Depository shall be an organization registered as a "clearing
agency" pursuant to Section 17A of the Exchange Act and the regulations of the Commission thereunder.
Depository Participant: A Person for whom, from time to time, the Depository effects book-entry
transfers and pledges of securities deposited with the Depository.
Determination Date: With respect to any Payment Date, the 18th day of the month in which such Payment
Date occurs or if such day is not a Business Day, the next succeeding Business Day.
Disqualified Organization: Any organization defined as a "disqualified organization" under Section
860E(e)(5) of the Code, and if not otherwise included, any of the following: (i) the United States, any State or
political subdivision thereof, any possession of the United States, or any agency or instrumentality of any of
the foregoing (other than an instrumentality which is a corporation if all of its activities are subject to tax
and, except for Freddie Mac, a majority of its board of directors is not selected by such governmental unit),
(ii) a foreign government, any international organization, or any agency or instrumentality of any of the
foregoing, (iii) any organization (other than certain farmers' cooperatives described in Section 521 of the Code)
which is exempt from the tax imposed by Chapter 1 of the Code (including the tax imposed by Section 511 of the
Code on unrelated business taxable income), (iv) rural electric and telephone cooperatives described in Section
1381(a)(2)(C) of the Code, (v) any "electing large partnership," as defined in Section 775(a) of the Code and
(vi) any other Person so designated by the Trustee based upon an Opinion of Counsel that the holding of an
Ownership Interest in a Class R Certificate by such Person may cause the Trust Estate or any Person having an
Ownership Interest in any Class of Certificates (other than such Person) to incur a liability for any federal tax
imposed under the Code that would not otherwise be imposed but for the Transfer of an Ownership Interest in a
Class R Certificate to such Person. The terms "United States," "State" and "international organization" shall
have the meanings set forth in Section 7701 of the Code or successor provisions.
Distribution Account: The account or accounts created and maintained by the Certificate Paying Agent
pursuant to Section 3.10(c) of the Trust Agreement. The Certificate Paying Agent will make all distributions on
the Certificates from money on deposit in the Distribution Account.
Due Date: With respect to each Mortgage Loan, the date on which monthly payments on such Mortgage Loan
are due.
Eligible Account: An account that is any of the following: (i) maintained with a depository
institution the short-term debt obligations of which have been rated by each Rating Agency in its highest rating
category available, or (ii) an account or accounts maintained with a depository institution or trust company, as
long as its short-term debt obligations are rated P-1 by Xxxxx'x, and A-2 by Standard & Poor's (or the
equivalent) or better by each Rating Agency, and its long term debt obligations are rated A2 by Xxxxx'x and AA-
by Standard & Poor's (or the equivalent) or better by each Rating Agency; provided that if on any day the rating
of such depository institution falls below Standard & Poor's rating of A-2, such depository institution will be
replaced within 30 days of such day, or (iii) a segregated trust account or accounts maintained in the corporate
trust division of a depository institution or trust company, acting in its fiduciary capacity, or (iv) an account
or accounts of a depository institution acceptable to each Rating Agency (as evidenced in writing by each Rating
Agency that use of any such account will not cause a Rating Event.
Eligible Substitute Loan: A Mortgage Loan substituted by the Seller for a Deleted Loan, which must, on
the date of such substitution, as confirmed in an Officers' Certificate delivered to the Indenture Trustee, (i)
have an outstanding principal balance, after deduction of the principal portion of the monthly payment due in the
month of substitution (or in the case of a substitution of more than one Mortgage Loan for a Deleted Mortgage
Loan, an aggregate outstanding principal balance, after such deduction), not in excess of the outstanding
principal balance of the Deleted Loan (the amount of any shortfall to be deposited by the Seller in the Custodial
Account in the month of substitution); (ii) comply with each representation and warranty made by GMACM and set
forth in Section 3.1(b) of the Purchase Agreement, other than clauses (viii), (xiii), (xxiv), (xxv)(B), (xxvi)
and (xxvii) thereof, and comply with each of the representations and warranties made by WG Trust 2003 set forth
in Section 3.1(d)(II) of the Purchase Agreement, as of the date of substitution; (iii) have a Loan Rate and Net
Loan Rate no lower than and not more than 1% per annum higher than the Loan Rate and Net Loan Rate, respectively,
of the Deleted Loan as of the date of substitution; (iv) have a CLTV at the time of substitution no higher than
that of the Deleted Loan at the time of substitution; (v) have a remaining term to stated maturity not greater
than (and not more than one year less than) that of the Deleted Loan; and (vi) not be 30 days or more delinquent.
ERISA: The Employee Retirement Income Security Act of 1974, as amended.
Event of Default: With respect to the Indenture, any one of the following events (whatever the reason
for such Event of Default and whether it shall be voluntary or involuntary or be effected by operation of law or
pursuant to any judgment, decree or order of any court or any order, rule or regulation of any administrative or
governmental body):
(a) a default in the payment of the principal of, any installment of the principal of or interest on
any Note when the same becomes due and payable, and such default shall continue for a period of five days;
(b) there occurs a default in the observance or performance in any material respect of any covenant or
agreement of the Issuer made in the Indenture, or any representation or warranty of the Issuer made in the
Indenture or in any certificate delivered pursuant hereto or in connection herewith proving to have been
incorrect in any material respect as of the time when the same shall have been made that has a material adverse
effect on the Noteholders, and such default shall continue or not be cured, or the circumstance or condition in
respect of which such representation or warranty was incorrect shall not have been eliminated or otherwise cured,
for a period of 30 days after there shall have been given, by registered or certified mail, to the Issuer by the
Indenture Trustee or to the Issuer and the Indenture Trustee by the Noteholders of at least 25% of the aggregate
Note Balance of the Notes, a written notice specifying such default or incorrect representation or warranty and
requiring it to be remedied and stating that such notice is a notice of default hereunder;
(c) there occurs the filing of a decree or order for relief by a court having jurisdiction in the
premises in respect of the Issuer or any substantial part of the Trust Estate in an involuntary case under any
applicable federal or state bankruptcy, insolvency or other similar law now or hereafter in effect, or appointing
a receiver, liquidator, assignee, custodian, trustee, sequestrator or similar official of the Issuer or for any
substantial part of the Trust Estate, or ordering the winding-up or liquidation of the Issuer's affairs, and such
decree or order shall remain unstayed and in effect for a period of 60 consecutive days; or
(d) there occurs the commencement by the Issuer of a voluntary case under any applicable federal or
state bankruptcy, insolvency or other similar law now or hereafter in effect, or the consent by the Issuer to the
entry of an order for relief in an involuntary case under any such law, or the consent by the Issuer to the
appointment or taking possession by a receiver, liquidator, assignee, custodian, trustee, sequestrator or similar
official of the Issuer or for any substantial part of the assets of the Trust Estate, or the making by the Issuer
of any general assignment for the benefit of creditors, or the failure by the Issuer generally to pay its debts
as such debts become due, or the taking of any action by the Issuer in furtherance of any of the foregoing.
Exchange Act: The Securities Exchange Act of 1934, as amended, and the rules and regulations
promulgated thereunder.
Excess Spread: With respect to any Payment Date, the excess, if any, of (i) Interest Collections for
the related Collection Period over (ii) the sum of (x) the sum of the premium allocable to such Payment Date and
(y) the aggregate amount distributed to the Noteholders as interest on such Payment Date pursuant to
Section 3.05(a)(i) of the Indenture.
Expenses: The meaning specified in Section 7.02 of the Trust Agreement.
Xxxxxx Xxx: Xxxxxx Xxx, formerly the Federal National Mortgage Association, or any successor thereto.
FDIC: The Federal Deposit Insurance Corporation or any successor thereto.
Final Payment Date: The Payment Date in September 2037.
Fiscal Year: The fiscal year of the Trust, which shall end on December 31 of each year.
Foreclosure Profit: With respect to a Liquidated Mortgage Loan, the amount, if any, by which (i) the
aggregate of Liquidation Proceeds net of Liquidation Expenses exceeds (ii) the Principal Balance of such
Liquidated Mortgage Loan (plus accrued and unpaid interest thereon at the applicable Loan Rate from the date
interest was last paid through the date of receipt of the final Liquidation Proceeds) immediately prior to the
final recovery of the related Liquidation Proceeds.
Form 10-K Certification: As defined in Section 4.02(c) of the Servicing Agreement.
Freddie Mac: Freddie Mac, formerly the Federal Home Loan Mortgage Corporation, or any successor thereto.
GAAP: Generally accepted accounting principles.
Xxxxx: Pledge, bargain, sell, warrant, alienate, remise, release, convey, assign, transfer, create, and
xxxxx x xxxx upon and a security interest in and right of set-off against, deposit, set over and confirm pursuant
to the Indenture. A Grant of the Collateral or of any other agreement or instrument shall include all rights,
powers and options (but none of the obligations) of the granting party thereunder, including the immediate and
continuing right to claim for, collect, receive and give receipt for principal and interest payments in respect
of such collateral or other agreement or instrument and all other moneys payable thereunder, to give and receive
notices and other communications, to make waivers or other agreements, to exercise all rights and options, to
bring proceedings in the name of the granting party or otherwise, and generally to do and receive anything that
the granting party is or may be entitled to do or receive thereunder or with respect thereto.
GMAC: GMAC LLC, and its successors and assigns.
GMACM: GMAC Mortgage, LLC, and its successors and assigns.
Group I Liquidation Loss Amount: With respect to any Payment Date, Liquidation Loss Amounts related to
the Group I Loans.
Group I Liquidation Loss Distribution Amount: With respect to any Payment Date, an amount equal to the
product of the Group I Liquidation Loss Percentage for such Payment Date and the Excess Spread available for
distribution on such Payment Date in respect of Liquidation Loss Amounts, but not more than the Group I
Liquidation Loss Distribution Entitlement for such Payment Date.
Group I Liquidation Loss Distribution Entitlement: With respect to any Payment Date, an amount equal to
the sum of (A) 100% of the Group I Liquidation Loss Amounts on such Payment Date, plus (B) any Group I
Liquidation Loss Amounts remaining undistributed from any preceding Payment Date. Any Group I Liquidation Loss
Amount remaining undistributed from any preceding Payment Date shall not be required to be paid as a Group I
Liquidation Loss Distribution Amount to the extent that a Group I Liquidation Loss Amount was paid on the Class
I-A-1 Notes by means of excess interest or was reflected in the reduction of the Overcollateralization Amount
related to the Group I Loans.
Group I Liquidation Loss Percentage: With respect to any Payment Date, a fraction, expressed as a
percentage, the numerator of which is the Group I Liquidation Loss Distribution Entitlement for such Payment Date
and the denominator of which is the sum of the Group I Liquidation Loss Distribution Entitlement and the Group II
Liquidation Loss Distribution Entitlement, in each case, for such Payment Date.
Group I Loans: The Mortgage Loans designated on the Mortgage Loan Schedule attached hereto as Annex A-1
to the Mortgage Loan Schedule. The Group I Loans relate to the Class I-A-1 Notes and the Certificates.
Group I Net WAC Rate: For each Payment Date, a per annum rate equal to the weighted average of the Net
Loan Rates of the Group I Loans.
Group I Overcollateralization Increase Amount: With respect to any Payment Date, an amount equal to the
product of the Group I Overcollateralization Increase Amount Percentage and the Overcollateralization Increase
Amount for such Payment Date.
Group I Overcollateralization Increase Amount Percentage: With respect to any Payment Date, a fraction,
expressed as a percentage, the numerator of which is equal to the sum of the Class I-A-1 Note Balance and the
Class I-A-2 Note Balance on such Payment Date after payments of the Group I Principal Distribution Amount and
Group I Liquidation Loss Distribution Amount thereon, and the denominator of which is the aggregate Note Balance
of the Class A Notes on such Payment Date after all payments thereon.
Group I Principal Distribution Amount: On any Payment Date, the Class A Principal Distribution Amount
for such Payment Date multiplied by a fraction, the numerator of which is the portion of the Principal
Collections related to the Group I Loans for such Payment Date and the denominator of which is the Principal
Collections for all of the Mortgage Loans for such Payment Date.
Group II Liquidation Loss Amount: With respect to any Payment Date, Liquidation Loss Amounts related to
the Group II Loans.
Group II Liquidation Loss Distribution Amount: With respect to any Payment Date, an amount equal to the
product of the Group II Liquidation Loss Percentage for such Payment Date and the Excess Spread available for
distribution on such Payment Date in respect of Liquidation Loss Amounts, but not more than the Group II
Liquidation Loss Distribution Entitlement for such Payment Date.
Group II Liquidation Loss Distribution Entitlement: With respect to any Payment Date, an amount equal to
the sum of (A) 100% of the Group II Liquidation Loss Amounts on such Payment Date, plus (B) any Group II
Liquidation Loss Amounts remaining undistributed from any preceding Payment Date. Any Group II Liquidation Loss
Amount remaining undistributed from any preceding Payment Date shall not be required to be paid as a Group II
Liquidation Loss Distribution Amount to the extent that a Group II Liquidation Loss Amount was paid on the Class
II-A-1 and Class II-A-2 Notes by means of excess interest or was reflected in the reduction of the
Overcollateralization Amount related to the Group II Loans.
Group II Liquidation Loss Percentage: With respect to each Payment Date, a fraction, expressed as a
percentage, the numerator of which is the Group II Liquidation Loss Distribution Entitlement for such Payment
Date and the denominator of which is the sum of the Group I Liquidation Loss Distribution Entitlement and the
Group II Liquidation Loss Distribution Entitlement, in each case, for such Payment Date.
Group II Loans: The Mortgage Loans designated on the Mortgage Loan Schedule attached hereto as Annex
A-2 to the Mortgage Loan Schedule. The Group II Loans relate to the Class II-A-1 Notes, Class II-A-2 Notes and
the Certificates.
Group II Net WAC Rate: For each Payment Date, a per annum rate equal to the weighted average of the Net
Loan Rates of the Group II Loans.
Group II Overcollateralization Increase Amount: With respect to any Payment Date, an amount equal to the
product of the Group II Overcollateralization Increase Amount Percentage and the Overcollateralization Increase
Amount for such Payment Date.
Group II Overcollateralization Increase Amount Percentage: With respect to any Payment Date, a fraction,
expressed as a percentage, the numerator of which is equal to the sum of the sum of the Class II-A-1 Note Balance
and the Class II-A-2 Note Balance on such Payment Date after payments of the Group II Principal Distribution
Amount and Group II Liquidation Loss Distribution Amount thereon, and the denominator of which is the aggregate
Note Balance of the Class A Notes on such Payment Date after all payments thereon.
Group II Principal Distribution Amount: On any Payment Date, the Class A Principal Distribution Amount
for that Payment Date multiplied by a fraction, the numerator of which is the portion of the Principal
Collections related to the Group II Loans for that Payment Date and the denominator of which is the Principal
Collections for all of the Mortgage Loans for that Payment Date.
Indemnified Party: The meaning specified in Section 7.02 of the Trust Agreement.
Indenture: The Indenture, dated as of the Closing Date, between the Issuer and the Indenture Trustee.
Indenture Trustee: The Bank of New York Trust Company, N.A., a national banking association, and its
successors and assigns or any successor indenture trustee appointed pursuant to the terms of the Indenture.
Independent: When used with respect to any specified Person, such Person (i) is in fact independent of
the Issuer, any other obligor on the Notes, the Seller, the Depositor and any Affiliate of any of the foregoing
Persons, (ii) does not have any direct financial interest or any material indirect financial interest in the
Issuer, any such other obligor, the Seller, the Depositor or any Affiliate of any of the foregoing Persons and
(iii) is not connected with the Issuer, any such other obligor, the Seller, the Depositor or any Affiliate of any
of the foregoing Persons as an officer, employee, promoter, underwriter, trustee, partner, director or person
performing similar functions.
Independent Certificate: A certificate or opinion to be delivered to the Indenture Trustee under the
circumstances described in, and otherwise complying with, the applicable requirements of Section 10.01 of the
Indenture, made by an Independent appraiser or other expert appointed by an Issuer Order and approved by the
Indenture Trustee in the exercise of reasonable care, and such opinion or certificate shall state that the signer
has read the definition of "Independent" in this Indenture and that the signer is Independent within the meaning
thereof.
Initial Aggregate Note Balance: $350,580,000.
Initial Class I-A-1 Note Balance: $113,850,000.
Initial Class I-A-2 Note Balance: $15,477,000.
Initial Class II-A-1 Note Balance: $143,014,000.
Initial Class II-A-2 Note Balance: $19,441,000.
Initial Class M-1 Note Balance: $31,707,000.
Initial Class M-2 Note Balance: $27,091,000.
Initial Certificate Balance: $50,771,762. 00.
Initial Note Balance: The Initial Class I-A-1 Note Balance, Initial Class I-A-2 Note Balance, Initial
Class II-A-1 Note Balance, Initial Class II-A-2 Note Balance, Initial Class M-1 Note Balance or Initial Class M-2
Note Balance as applicable.
Initial Pool Balance: The aggregate Principal Balances of the Mortgage Loans as of the Cut-off Date.
Insolvency Event: With respect to a specified Person, (a) the filing of a decree or order for relief by
a court having jurisdiction in the premises in respect of such Person or any substantial part of its property in
an involuntary case under any applicable bankruptcy, insolvency or other similar law now or hereafter in effect,
or appointing a receiver, liquidator, assignee, custodian, trustee, sequestrator or similar official for such
Person or for any substantial part of its property, or ordering the winding-up or liquidation of such Person's
affairs, and such decree or order shall remain unstayed and in effect for a period of 60 consecutive days; or (b)
the commencement by such Person of a voluntary case under any applicable bankruptcy, insolvency or other similar
law now or hereafter in effect, or the consent by such Person to the entry of an order for relief in an
involuntary case under any such law, or the consent by such Person to the appointment of or taking possession by
a receiver, liquidator, assignee, custodian, trustee, sequestrator or similar official for such Person or for any
substantial part of its property, or the making by such Person of any general assignment for the benefit of
creditors, or the failure by such Person generally to pay its debts as such debts become due or the admission by
such Person in writing (as to which the Indenture Trustee shall have notice) of its inability to pay its debts
generally, or the adoption by the Board of Directors or managing member of such Person of a resolution which
authorizes action by such Person in furtherance of any of the foregoing.
Insurance Proceeds: Proceeds paid by any insurer pursuant to any insurance policy covering a Mortgage
Loan which are required to be remitted to the Servicer, or amounts required to be paid by the Servicer pursuant
to the next to last sentence of Section 3.04 of the Servicing Agreement, net of any component thereof (i)
covering any expenses incurred by or on behalf of the Servicer in connection with obtaining such proceeds, (ii)
that is applied to the restoration or repair of the related Mortgaged Property, (iii) released to the related
Mortgagor in accordance with the Servicer's normal servicing procedures or (iv) required to be paid to any holder
of a mortgage senior to such Mortgage Loan.
Interest Collections: With respect to any Payment Date, the sum of all payments by or on behalf of
Mortgagors and any other amounts constituting interest (including without limitation such portion of Net
Liquidation Proceeds and Repurchase Prices as is allocable to interest on the applicable Mortgage Loan) as is
paid by the Seller or the Servicer (including any optional servicing advance) or is collected and applied by the
Servicer under the Mortgage Loans during the related Collection Period, and reduced by the Servicing Fee for the
related Collection Period and by any fees (including annual fees) or late charges or similar administrative fees
paid by Mortgagors during the related Collection Period. The terms of the related Mortgage Note shall determine
the portion of each payment in respect of such Mortgage Loan that constitutes principal or interest.
Interest Period: With respect to each Class of Notes, other than the first Payment Date, the period
commencing on the Payment Date in the month immediately preceding the month in which such Payment Date occurs and
ending on the day preceding such Payment Date, and in the case of the first Payment Date, the period commencing
on the Closing Date and ending on the day preceding the first Payment Date.
Issuer or Trust: The GMACM Home Equity Loan Trust 2007-HE3, a Delaware statutory trust, or its
successor in interest.
Issuer Order or Issuer Request: A written order or request signed in the name of the Issuer by any one
of its Authorized Officers and delivered to the Indenture Trustee.
Lien: Any mortgage, deed of trust, pledge, conveyance, hypothecation, assignment, participation,
deposit arrangement, encumbrance, lien (statutory or other), preference, priority right or interest or other
security agreement or preferential arrangement of any kind or nature whatsoever, including, without limitation,
any conditional sale or other title retention agreement, any financing lease having substantially the same
economic effect as any of the foregoing and the filing of any financing statement under the UCC (other than any
such financing statement filed for informational purposes only) or comparable law of any jurisdiction to evidence
any of the foregoing; provided, however, that any assignment pursuant to Section 6.02 of the Servicing Agreement
shall not be deemed to constitute a Lien.
Liquidated Mortgage Loan: With respect to any Payment Date, any Mortgage Loan in respect of which the
Servicer has determined, in accordance with the servicing procedures specified in the Servicing Agreement, as of
the end of the related Collection Period that substantially all Liquidation Proceeds which it reasonably expects
to recover, if any, with respect to the disposition of the related REO Property have been recovered.
Liquidation Expenses: All out-of-pocket expenses (exclusive of overhead) incurred by or on behalf of
the Servicer in connection with the liquidation of any Mortgage Loan and not recovered under any insurance
policy, including legal fees and expenses, any unreimbursed amount expended (including, without limitation,
amounts advanced to correct defaults on any mortgage loan which is senior to such Mortgage Loan and amounts
advanced to keep current or pay off a mortgage loan that is senior to such Mortgage Loan) respecting such
Mortgage Loan and any related and unreimbursed expenditures for real estate property taxes or for property
restoration, preservation or insurance against casualty loss or damage.
Liquidation Loss Amount: With respect to any Payment Date and any Mortgage Loan that became a
Liquidated Mortgage Loan during the related Collection Period, the unrecovered portion of the Principal Balance
of such Mortgage Loan and any unpaid accrued interest thereon at the end of such Collection Period, after giving
effect to the Net Liquidation Proceeds applied in reduction of such Principal Balance.
Liquidation Loss Distribution Amount: With respect to any Payment Date, the Group I Liquidation Loss
Distribution Amount or the Group II Liquidation Loss Distribution Amount, as applicable.
Liquidation Proceeds: Proceeds if any received in connection with the liquidation of any Mortgage Loan
or related REO Property, whether through trustee's sale, foreclosure sale or otherwise.
LT1 Principal Distribution Amount: For any Payment Date, the excess, if any, of the REMIC II Principal
Reduction Amount for REMIC II Regular Interest LT1 for such Payment Date over the principal Liquidation Loss
Amounts allocated to REMIC II Regular Interest LT1 on such Payment Date.
LT2 Principal Distribution Amount: For any Payment Date, the excess, if any, of the REMIC II Principal
Reduction Amount for REMIC II Regular Interest LT2 for such Payment Date over the principal Liquidation Loss
Amounts allocated to REMIC II Regular Interest LT2 on such Payment Date.
LT3 Principal Distribution Amount: For any Payment Date, the excess, if any, of the REMIC II Principal
Reduction Amount for REMIC II Regular Interest LT3 for such Payment Date over the principal Liquidation Loss
Amounts allocated to REMIC II Regular Interest LT3 on such Payment Date.
LT4 Principal Distribution Amount: For any Payment Date, the excess, if any, of the REMIC II Principal
Reduction Amount for REMIC II Regular Interest LT4 for such Payment Date over the principal Liquidation Loss
Amounts allocated to REMIC II Regular Interest LT4 on such Payment Date.
LT5 Principal Distribution Amount: For any Payment Date, the excess, if any, of the REMIC II Principal
Reduction Amount for REMIC II Regular Interest LT5 for such Payment Date over the principal Liquidation Loss
Amounts allocated to REMIC II Regular Interest LT5 on such Payment Date.
LT6 Principal Distribution Amount: For any Payment Date, the excess, if any, of the REMIC II Principal
Reduction Amount for REMIC II Regular Interest LT6 for such Payment Date over the principal Liquidation Loss
Amounts allocated to REMIC II Regular Interest LT6 on such Payment Date.
LT7 Principal Distribution Amount: For any Payment Date, the excess, if any, of the REMIC II Principal
Reduction Amount for REMIC II Regular Interest LT7 for such Payment Date over the principal Liquidation Loss
Amounts allocated to REMIC II Regular Interest LT7 on such Payment Date.
LT8 Principal Distribution Amount: For any Payment Date, the excess, if any, of the REMIC II Principal
Reduction Amount for REMIC II Regular Interest LT8 for such Payment Date over the principal Liquidation Loss
Amounts allocated to REMIC II Regular Interest LT8 on such Payment Date.
LTY-1 Principal Distribution Amount: For any Payment Date, the excess, if any, of the REMIC II
Principal Reduction Amount for REMIC II Regular Interest LTY-1 for such Payment Date over the principal
Liquidation Loss Amounts allocated to REMIC II Regular Interest LTY-1 on such Payment Date.
LTY-2 Principal Distribution Amount: For any Payment Date, the excess, if any, of the REMIC II
Principal Reduction Amount for REMIC II Regular Interest LTY-2 for such Payment Date over the principal
Liquidation Loss Amounts allocated to REMIC II Regular Interest LTY-2 on such Payment Date.
Loan Group: Loan Group I or Loan Group II, as applicable.
Loan Group I: The Mortgage Loans designated on the Mortgage Loan Schedule.
Loan Group II: The Mortgage Loans designated on the Mortgage Loan Schedule.
Loan Rate: With respect to any Mortgage Loan and any day, the per annum rate of interest applicable
under the related Mortgage Note.
Lost Note Affidavit: With respect to any Mortgage Loan as to which the original Mortgage Note has been
permanently lost or destroyed and has not been replaced, an affidavit from the related Seller certifying that the
original Mortgage Note has been lost, misplaced or destroyed (together with a copy of the related Mortgage Note,
if available).
MERS: Mortgage Electronic Registration Systems, Inc., a corporation organized and existing under the
laws of the State of Delaware, or any successor thereto.
MERS® System: The system of recording transfers of Mortgages electronically maintained by MERS.
MIN: The Mortgage Identification Number for Mortgage Loans registered with MERS on the MERS® System.
MOM Loan: With respect to any Mortgage Loan, MERS acting as the mortgagee of such Mortgage Loan, solely
as nominee for the originator of such Mortgage Loan and its successors and assigns, at the origination thereof.
Monthly Payment: With respect to any Mortgage Loan (including any REO Property) and any Due Date, the
payment of principal and interest due thereon in accordance with the terms of such Mortgage Loan.
Moody's: Xxxxx'x Investors Service, Inc., or its successor in interest.
Mortgage: The mortgage, deed of trust or other instrument creating a first or second lien on an estate
in fee simple interest in real property securing a Mortgage Loan.
Mortgage File: With respect to each Mortgage Loan:
(i) the original Mortgage Note endorsed or assigned without recourse in blank (which endorsement
shall contain either an original signature or a facsimile signature of an authorized officer of GMACM) or, with
respect to any Mortgage Loan as to which the original Mortgage Note has been permanently lost or destroyed and
has not been replaced, a Lost Note Affidavit;
(ii) the original Mortgage, noting the presence of the MIN of the Mortgage Loan, if the Mortgage is
registered on the MERS® System, and language indicating that the Mortgage Loan is a MOM Loan if the Mortgage Loan
is a MOM Loan, with evidence of recording thereon, or, if the original Mortgage has not yet been returned from
the public recording office, a copy of the original Mortgage certified by GMACM that such Mortgage has been sent
for recording, or a county certified copy of such Mortgage in the event the recording office keeps the original
or if the original is lost;
(iii) unless the Mortgage Loan is registered on the MERS® System, original assignments (which may be
included in one or more blanket assignments if permitted by applicable law) of the Mortgage in recordable form
from GMACM to "The Bank of New York Trust Company, N.A., as Indenture Trustee under that certain Indenture dated
as of October 26, 2007, for GMACM Home Equity Loan Trust 2007-HE3, Home Equity Loan-Backed Term Notes" c/o the
Servicer at an address specified by the Servicer;
(iv) originals of any intervening assignments of the Mortgage from the originator to GMACM (or to
MERS, if the Mortgage Loan is registered on the MERS® System, and which notes the presence of a MIN), with
evidence of recording thereon, or, if the original of any such intervening assignment has not yet been returned
from the public recording office, a copy of such original intervening assignment certified by GMACM that such
original intervening assignment has been sent for recording; and
(v) a true and correct copy of each assumption, modification, consolidation or substitution
agreement, if any, relating to such Mortgage Loan; and
(vi) any documents required to be added to such documents pursuant to the Purchase Agreement, the
Trust Agreement or the Servicing Agreement.
It is understood that the Mortgage File (other than item (i) above) may be retained in microfilm,
microfiche, optical storage or magnetic media in lieu of hard copy; provided, that with respect to any Mortgage
Loan not registered on the MERS® System, the original assignment of Mortgage described in clause (iii) above
shall be retained in the Mortgage File.
Mortgage Loan Schedule: The initial schedule of Mortgage Loans as of the Cut-Off Date set forth in
Exhibit A of the Servicing Agreement, which schedule sets forth as to each Mortgage Loan and the related Loan
Group (i) the Cut-Off Date Principal Balance, (ii) the loan number and (iii) the lien position of the related
Mortgage.
Mortgage Loans: At any time, all mortgage loans that have been sold to the Issuer pursuant to the Trust
Agreement, which are listed on the Mortgage Loan Schedule attached to the Servicing Agreement, together with all
monies due or become due thereunder or the Related Documents, and that remain subject to the terms thereof.
Mortgage Note: With respect to a Mortgage Loan, the promissory note pursuant to which the related
Xxxxxxxxx agrees to pay the indebtedness evidenced thereby and secured by the related Mortgage as modified or
amended.
Mortgaged Property: The underlying property, including real property and improvements thereon, securing
a Mortgage Loan.
Mortgagor: The obligor or obligors under a Mortgage Note.
Net Liquidation Proceeds: With respect to any Liquidated Mortgage Loan, Liquidation Proceeds,
Liquidation Expenses (but not including the portion, if any, of such amount that exceeds the Principal Balance
of, plus accrued and unpaid interest on, such Mortgage Loan at the end of the Collection Period immediately
preceding the Collection Period in which such Mortgage Loan became a Liquidated Mortgage Loan) and including any
Recovery Amounts.
Net Loan Rate: With respect to any Payment Date and any Mortgage Loan, the Loan Rate of that Mortgage
Loan applicable to the Due Date in the related Collection Period, net of the Servicing Fee Rate.
Net WAC Rate: The Group I Net WAC Rate, Group II Net WAC Rate or Class M Net WAC Cap Rate, as
applicable.
Net Worth: As of any date of determination, the net worth of GMACM and its consolidated subsidiaries,
as determined in accordance with GAAP.
Non-United States Person: Any Person other than a United States Person.
Note Balance: With respect to any Payment Date and the Notes, the Initial Aggregate Note Balance
reduced by all payments of principal on the Notes prior to such Payment Date and any allocation of Liquidation
Loss Amounts on the Notes prior to such Payment Date.
Note Owner or Owner: The Beneficial Owner of a Note.
Note Payment Account: The account established by the Indenture Trustee pursuant to Sections 3.01
and 8.02 of the Indenture and Section 5.01 of the Servicing Agreement. Amounts deposited in the Note Payment
Account will be distributed by the Indenture Trustee in accordance with Section 3.05 of the Indenture.
Note Rate: With respect to each Class of Notes, each Interest Period and the related Payment Date, a per
annum rate equal to the least of:
(i) for the Class I-A-1 Notes, the lesser of (a) 7.000% and (b) the related Net WAC Rate;
(ii) for the Class I-A-2 Notes, the lesser of (a) 7.500% and (b) the related Net WAC Rate;
(iii) for the Class II-A-1 Notes, the lesser of (a) 7.000% and (b) the related Net WAC Rate; and
(iv) for each Class of the Class II-A-2, Class M-1 and Class M-2 Notes, the lesser of (a) 7.500%
and (b) the related Net WAC Rate.
Note Register: The register maintained by the Note Registrar in which the Note Registrar shall provide
for the registration of Notes and of transfers and exchanges of Notes.
Note Registrar: The Indenture Trustee, in its capacity as Note Registrar.
Noteholder or Holder: The Person in whose name a Note is registered in the Note Register, except that,
any Note registered in the name of the Depositor, the Issuer or the Indenture Trustee or any Affiliate of any of
them shall be deemed not to be outstanding and the registered holder will not be considered a Noteholder for
purposes of giving any request, demand, authorization, direction, notice, consent or waiver under the Indenture
or the Trust Agreement; provided, that in determining whether the Indenture Trustee shall be protected in relying
upon any such request, demand, authorization, direction, notice, consent or waiver, only Notes that the Indenture
Trustee or the Owner Trustee knows to be so owned shall be so disregarded. Owners of Notes that have been
pledged in good faith may be regarded as Noteholders if the pledgee thereof establishes to the satisfaction of
the Indenture Trustee or the Owner Trustee such pledgee's right so to act with respect to such Notes and that
such pledgee is not the Issuer, any other obligor on the Notes or any Affiliate of any of the foregoing Persons.
Notes: Any of the Class I-A-1 Notes, Class I-A-2 Notes, Class II-A-1 Notes, Class II-A-2 Notes, Class
M-1 Notes or Class M-2 Notes issued and outstanding pursuant to the Indenture.
Notional Amount: With respect to the Class SB Certificates and REMIC III Regular Interest SB-IO,
immediately prior to any Payment Date a notional amount equal to the aggregate of the Uncertificated Principal
Balances of the REMIC II Regular Interests.
Officer's Certificate: With respect to the Servicer, a certificate signed by the President, Managing
Director, a Director, a Vice President or an Assistant Vice President, of the Servicer and delivered to the
Indenture Trustee. With respect to the Issuer, a certificate signed by any Authorized Officer of the Issuer,
under the circumstances described in, and otherwise complying with, the applicable requirements of Section 10.01
of the Indenture, and delivered to the Indenture Trustee. Unless otherwise specified, any reference in the
Indenture to an Officer's Certificate shall be to an Officer's Certificate of any Authorized Officer of the
Issuer.
Opinion of Counsel: A written opinion of counsel of a law firm reasonably acceptable to the recipient
thereof. Any Opinion of Counsel for the Servicer may be provided by in-house counsel for the Servicer if
reasonably acceptable.
Optional Call Date: Any Payment Date on which the Note Balance is less than 10% of the Initial
Aggregate Note Balance prior to giving effect to any payments of principal on such Payment Date.
Outstanding: With respect to the Notes, as of the date of determination, all Notes theretofore
executed, authenticated and delivered under this Indenture except:
(i) Notes theretofore cancelled by the Note Registrar or delivered to the Indenture Trustee for
cancellation; and
(ii) Notes in exchange for or in lieu of which other Notes have been executed, authenticated and
delivered pursuant to the Indenture unless proof satisfactory to the Indenture Trustee is presented that any such
Notes are held by a holder in due course;
Overcollateralization Amount: With respect to any Payment Date, the amount (but not less than zero), if
any, by which (a) the aggregate outstanding Principal Balance of the Mortgage Loans as of the close of business
on the last day of the related Collection Period exceeds (b) the aggregate Note Balance of the Notes.
Overcollateralization Floor: An amount equal to 2.70% of the Initial Pool Balance.
Overcollateralization Increase Amount: With respect to any Payment Date, the amount necessary to
increase the Overcollateralization Amount to the Overcollateralization Target Amount.
Overcollateralization Release Amount: With respect to any Payment Date, the excess, if any, of the
Overcollateralization Amount over the Overcollateralization Target Amount, which, on such Payment Date, shall not
exceed an amount equal to the total Principal Collections for such Payment Date.
Overcollateralization Target Amount: With respect to any Payment Date prior to the Stepdown Date, the
Required Overcollateralization Amount will be 12.65% of the Initial Pool Balance. With respect to any Payment
Date on or after the Stepdown Date, an amount equal to the greater of (i) 25.30% of the Pool Balance as of the
last day of the related Collection Period and (ii) 2.70% of the Initial Pool Balance. The Overcollateralization
Target Amount may be reduced from time to time written notice from each Rating Agency that the rating will not be
reduced or withdrawn as a result of the change in the Overcollateralization Target Amount.
Owner Trust: GMACM Home Equity Loan Trust 2007-HE3, created by the Certificate of Trust pursuant to the
Trust Agreement.
Owner Trustee: Wilmington Trust Company, not in its individual capacity but solely as owner trustee,
and its successors and assigns or any successor Owner Trustee appointed pursuant to the terms of the Trust
Agreement.
Ownership Interest: As to any Certificate, any ownership or security interest in such Certificate,
including any interest in such Certificate as the Certificateholder thereof and any other interest therein,
whether direct or indirect, legal or beneficial, as owner or as pledgee.
Paying Agent: Any paying agent or co-paying agent appointed pursuant to Section 3.03 of the Indenture,
which initially shall be the Indenture Trustee.
Payment Date: The 25th day of each month, or if such day is not a Business Day, then the next Business
Day.
Percentage Interest: With respect to any Note and Payment Date, the percentage obtained by dividing the
Note Balance of such Note by the aggregate Note Balance of all Notes prior to such Payment Date. With respect to
any Certificate and any Payment Date, the Percentage Interest stated on the face of such Certificate.
Permitted Investments: One or more of the following:
(i) obligations of or guaranteed as to principal and interest by the United States or any agency or
instrumentality thereof when such obligations are backed by the full faith and credit of the United States;
(ii) repurchase agreements on obligations specified in clause (i) above maturing not more than one
month from the date of acquisition thereof; provided, that the unsecured short-term debt obligations of the party
agreeing to repurchase such obligations are at the time rated by each Rating Agency in its highest short-term
rating category available;
(iii) federal funds, certificates of deposit, demand deposits, time deposits and bankers' acceptances
(which shall each have an original maturity of not more than 90 days and, in the case of bankers' acceptances,
shall in no event have an original maturity of more than 365 days or a remaining maturity of more than 30 days)
denominated in United States dollars of any U.S. depository institution or trust company incorporated under the
laws of the United States or any state thereof or of any domestic branch of a foreign depository institution or
trust company; provided, that the short-term debt obligations of such depository institution or trust company
(or, if the only Rating Agency is Standard & Poor's, in the case of the principal depository institution in a
depository institution holding company, debt obligations of the depository institution holding company) at the
date of acquisition thereof have been rated by each Rating Agency in its highest short-term rating category
available; and provided further, that if the only Rating Agency is Standard & Poor's and if the depository or
trust company is a principal subsidiary of a bank holding company and the debt obligations of such subsidiary are
not separately rated, the applicable rating shall be that of the bank holding company; and provided further, that
if the only Rating Agency is Standard & Poor's and the original maturity of such short-term debt obligations of a
domestic branch of a foreign depository institution or trust company shall exceed 30 days, the short-term rating
of such institution shall be A-1+;
(iv) commercial paper (having original maturities of not more than 365 days) of any corporation
incorporated under the laws of the United States or any state thereof which on the date of acquisition has been
rated by each Rating Agency in its highest short-term rating category available; provided, that such commercial
paper shall have a remaining maturity of not more than 30 days;
(v) a money market fund or a qualified investment fund (including without limitation, any such fund
for which the Indenture Trustee or an Affiliate of the Indenture Trustee acts as an advisor or a manager) rated
by each Rating Agency in one of its two highest long-term rating categories available (if so rated by such Rating
Agency); and
(vi) other obligations or securities that are acceptable to each Rating Agency as a Permitted
Investment hereunder and will not cause a Rating Event, as evidenced in writing;
provided, however, that no instrument shall be a Permitted Investment if it represents, either (1) the right to
receive only interest payments with respect to the underlying debt instrument or (2) the right to receive both
principal and interest payments derived from obligations underlying such instrument and the principal and
interest payments with respect to such instrument provide a yield to maturity greater than 120% of the yield to
maturity at par of such underlying obligations. References herein to the highest long-term debt rating category
available shall mean AAA in the case of Standard & Poor's and Aaa in the case of Xxxxx'x, and references herein
to the highest short-term rating category available shall mean A-1 in the case of Standard & Poor's and P-1 in
the case of Xxxxx'x.
Permitted Transferee: Any Transferee of a Class R Certificate, other than a Disqualified Organization
or Non-United States Person.
Person: Any legal individual, corporation, partnership, joint venture, association, joint-stock
company, limited liability company, trust, unincorporated organization or government or any agency or political
subdivision thereof.
Plan: Any employee benefit plan or certain other retirement plans and arrangements, including
individual retirement accounts and annuities, Xxxxx plans and bank collective investment funds and insurance
company general or separate accounts in which such plans, accounts or arrangements are invested, that are subject
to ERISA or Section 4975 of the Code, as described in Section 3.05 of the Trust Agreement.
Plan Assets: The meaning specified in Section 2510.3-101 of the Department of Labor Regulations and as
described in Section 3.05 of the Trust Agreement.
Pool Balance: With respect to any date, the aggregate Principal Balance of all Mortgage Loans as of
such date.
Predecessor Note: With respect to any Note, every previous Note evidencing all or a portion of the same
debt as that evidenced by such Note; and, for the purpose of this definition, any Note authenticated and
delivered under Section 4.03 of the Indenture in lieu of a mutilated, lost, destroyed or stolen Note shall be
deemed to evidence the same debt as such mutilated, lost, destroyed or stolen Note.
Principal Balance: With respect to any Mortgage Loan, other than a Liquidated Mortgage Loan, and as of
any day, the related Cut-Off Date Principal Balance, minus all collections credited as principal in respect of
any such Mortgage Loan in accordance with the related Mortgage Note and applied in reduction of the Principal
Balance thereof. For purposes of this definition, a Liquidated Mortgage Loan shall be deemed to have a Principal
Balance equal to the Principal Balance of the related Mortgage Loan immediately prior to the final recovery of
substantially all related Liquidation Proceeds and a Principal Balance of zero thereafter.
Principal Collections: With respect to any Payment Date, an amount equal to the sum of (i) the
principal portion of all scheduled Monthly Payments on the Mortgage Loans received during the related Collection
Period, as reported by the Servicer or the related Subservicer; (ii) the principal portion of all proceeds of the
repurchase of any Mortgage Loans (or, in the case of a substitution, any Substitution Adjustment Amounts) during
the related Collection Period; and (iii) the principal portion of all other unscheduled collections received on
the Mortgage Loans during the related Collection Period (or deemed to be received during the related Collection
Period), including, without limitation, full and partial Principal Prepayments made by the respective Mortgagors,
Net Liquidation Proceeds and Subsequent Net Recovery Amounts, to the extent not previously distributed.
Principal Collection Distribution Amount: For any Payment Date, the total Principal Collections for
such Payment Date less any Overcollateralization Release Amount for such Payment Date.
Proceeding: Any suit in equity, action at law or other judicial or administrative proceeding.
Program Guide: The GMACM Home Equity Servicing Guidelines, as in effect from time to time.
Purchase Agreement: The mortgage loan purchase agreement dated as of the Closing Date, among the
Seller, the Purchaser, the Issuer and the Indenture Trustee.
Purchase Price: The amounts specified in Section 2.3(a) of the Purchase Agreement.
Purchaser: Residential Asset Mortgage Products, Inc., as purchaser under the Purchase Agreement.
Rating Agency: Each of Xxxxx'x and Standard & Poor's or, if any such organization or a successor
thereto is no longer in existence, such nationally recognized statistical rating organization, or other
comparable Person, designated by the Depositor, notice of which designation shall be given to the Indenture
Trustee. References herein to the highest short term unsecured rating category of a Rating Agency shall mean A-1
or better in the case of Standard & Poor's and P-1 or better in the case of Xxxxx'x; and in the case of any other
Rating Agency, shall mean such equivalent ratings. References herein to the highest long-term rating category of
a Rating Agency shall mean "AAA" in the case of Standard & Poor's and "Aaa" in the case of Xxxxx'x; and in the
case of any other Rating Agency, shall mean such equivalent rating.
Record Date: With respect to any Payment Date, the close of business on the last Business Day preceding
such Payment Date, and in the case of the first Payment Date, the Closing Date.
Recovery Amount: Amounts collected on a Mortgage Loan after the Mortgage Loan becomes a Liquidated
Mortgage Loan, net of any Servicing Fee, Recovery Fee and any reimbursement for advances and expenses of the
Servicer.
Recovery Fee: A customary fee calculated based on additional recovery amounts charged for the
collection of such additional recovery amounts on any Mortgage Loan after the date that such Mortgage Loan became
a Liquidated Mortgage Loan.
Regular Interest: Any of the REMIC I Regular Interests, REMIC II Regular Interests or REMIC III Regular
Interests.
Regulation AB: Subpart 229.1100 - Asset Backed Securities (Regulation AB), 17 C.F.R.
§§229.1100-229.1123, as such may be amended from time to time, and subject to such clarification and
interpretation as have been provided by the Commission in the adopting release (Asset-Backed Securities,
Securities Act Release No. 33-8518, 70 Fed. Reg. 1,506, 1,531 (January 7, 2005)) or by the staff of the
Commission, or as may be provided by the Commission or its staff from time to time.
Related Documents: With respect to each Mortgage Loan, the documents contained in the Mortgage File.
Relief Act Shortfalls: With respect to any Payment Date, for any Mortgage Loan as to which there has
been a reduction in the amount of interest collectible thereon for the related Collection Period as a result of
the application of the Servicemembers Civil Relief Act, as amended, or any similar state legislation or
regulations, the shortfall, if any, equal to (i) one month's interest on the Principal Balance of such Mortgage
Loan at the applicable Loan Rate, over (ii) the interest collectible on such Mortgage Loan during such Collection
Period.
REMIC: A "real estate mortgage investment conduit" within the meaning of Section 860D of the Code.
REMIC Administrator: The Bank of New York Trust Company, N.A.; provided that if the REMIC Administrator
is found by a court of competent jurisdiction to no longer be able to fulfill its obligations as REMIC
Administrator under this Agreement the Servicer or Indenture Trustee acting as Servicer shall appoint a successor
REMIC Administrator, subject to assumption of the REMIC Administrator obligations under this Agreement.
REMIC I: The segregated pool of assets in the Trust Estate with respect to which a REMIC election is to
be made.
REMIC I Available Distribution Amount: For any Payment Date, the Interest Collections and Principal
Collections for such Payment Date.
REMIC I Distribution Amount: For any Payment Date, the REMIC I Available Distribution Amount shall
be distributed by REMIC I to REMIC II on account of the REMIC I Regular Interests and to the Class R-I
Certificateholders, in the following order of priority:
(a) To the extent of the REMIC I Available Distribution Amount for Loan Group I:
(i) first, to the REMIC I Regular Interests Y-1 and Z-1, concurrently, the Uncertificated
Accrued Interest for such Classes remaining unpaid from previous Payment Dates, pro rata
according to their respective shares of such unpaid amounts;
(ii) second, to the REMIC I Regular Interests Y-1 and Z-1, concurrently, the Uncertificated
Accrued Interest for such Classes for the current Payment Date, pro rata according to their
respective Uncertificated Accrued Interest;
(iii) third, to the REMIC I Regular Interests Y-1 and Z-1, the REMIC I Y-1 Principal
Distribution Amount and the REMIC I Z-1 Principal Distribution Amount, respectively.
(b) To the extent of the REMIC I Available Distribution Amount for Loan Group II:
(i) first, to the REMIC I Regular Interests Y-2 and Z-2, concurrently, the Uncertificated
Accrued Interest for such Classes remaining unpaid from previous Payment Dates, pro rata
according to their respective shares of such unpaid amounts;
(ii) second, to the REMIC I Regular Interests Y-2 and Z-2, concurrently, the Uncertificated
Accrued Interest for such Classes for the current Payment Date, pro rata according to their
respective Uncertificated Accrued Interest; and
(iii) third, to the REMIC I Regular Interests Y-2 and Z-2, the REMIC I Y-2 Principal
Distribution Amount and the REMIC I Z-2 Principal Distribution Amount, respectively.
(c) To the extent of the REMIC I Available Distribution Amounts for Loan Group I and Loan Group II
for such Payment Date remaining after payment of the amounts pursuant to paragraphs (a), and (b) of this
definition of "REMIC I Distribution Amount":
(i) first, to each Class of REMIC I Regular Interests Y-1 and Z-1, pro rata according to
the amount of unreimbursed Liquidation Loss Amounts allocable to principal previously allocated
to each such Class, the aggregate amount of any distributions to the Notes or Certificates as
reimbursement of Liquidation Loss Amounts on such Payment Date pursuant to Section 3.05 of the
Indenture; provided, however, that any amounts distributed pursuant to this paragraph (c)(i) of
this definition of "REMIC I Distribution Amount" shall not cause a reduction in the
Uncertificated Principal Balances of any of the REMIC I Regular Interests Y-1 and Z-1; and
(ii) second, to the Class R-I Certificates, all remaining amounts.
REMIC I Interests: The REMIC I Regular Interests and the Class R-I Certificates.
REMIC I Liquidation Loss Amounts: For any Payment Date, Liquidation Loss Amounts on the Mortgage Loans
for the related Collection Period shall be allocated to the REMIC I Regular Interests as follows: (1) the
interest portion of Liquidation Loss Amounts on the Group I Loans, if any, shall be allocated between the REMIC I
Regular Interests Y-1 and Z-1 pro rata according to the amount of interest accrued but unpaid thereon, in
reduction thereof and (2) the interest portion of Liquidation Loss Amounts on the Group II Loans, if any, shall
be allocated between the REMIC I Regular Interests Y-2 and Z-2 pro rata according to the amount of interest
accrued but unpaid thereon, in reduction thereof. Any interest portion of such Liquidation Loss Amounts in
excess of the amount allocated pursuant to the preceding sentence shall be treated as a principal portion of
Liquidation Loss Amounts not attributable to any specific Mortgage Loan in such Group and allocated pursuant to
the succeeding sentences. The principal portion of Liquidation Loss Amounts with respect to the Mortgage Loans
shall be allocated to the REMIC I Regular Interests as follows: (1) the principal portion of Liquidation Loss
Amounts on the Group I Loans shall be allocated, first, to the REMIC I Regular Interest Y-1 to the extent of the
REMIC I Y-1 Principal Reduction Amount in reduction of the Uncertificated Principal Balance of such Regular
Interest and, second, the remainder, if any, of such principal portion of such Liquidation Loss Amounts shall be
allocated to the REMIC I Regular Interest Z-1 in reduction of the Uncertificated Principal Balance thereof and
(2) the principal portion of Liquidation Loss Amounts on the Group II Loans shall be allocated, first, to the
REMIC I Regular Interest Y-2 to the extent of the REMIC I Y-2 Principal Reduction Amount in reduction of the
Uncertificated Principal Balance of such Regular Interest and, second, the remainder, if any, of such principal
portion of such Liquidation Loss Amount shall be allocated to the REMIC I Regular Interest Z-2 in reduction of
the Uncertificated Principal Balance thereof. For any Payment Date, reductions in the Uncertificated Principal
Balances of the REMIC I Regular Interests Y-1 and Z-1 pursuant to this definition of REMIC I Liquidation Loss
Amounts shall be determined, and shall be deemed to occur, prior to any reductions of such Uncertificated
Principal Balances by distributions on such Payment Date.
REMIC I Regular Interests: Each of the following separate non-certificated beneficial ownership
interests in REMIC I having the properties set forth in the following table and elsewhere herein:
______________________________________________________________________________________________________________________
REMIC I Latest
Designation Remittance Initial Uncertificated Possible
for each REMIC I Regular Rate Principal Maturity
Interest Balance
______________________________________________________________________________________________________________________
$88,945.93
Y-1 Variable(1) September 25, 2037
______________________________________________________________________________________________________________________
Y-2 Variable(2) $111,729.72 September 25, 2037
______________________________________________________________________________________________________________________
Z-1 Variable(1) $177,802,911.08 September 25, 2037
______________________________________________________________________________________________________________________
Z-2 Variable(2) $223,348,175.11 September 25, 2037
______________________________________________________________________________________________________________________
(1) REMIC I Regular Interests Y-1 and Z-1 will bear interest at the Group I Net WAC Rate.
(2) REMIC I Regular Interests Y-2 and Z-2 will bear interest at the Group II Net WAC Rate.
REMIC I Regular Interest Y-1: The uncertificated undivided beneficial interest in REMIC I which
constitutes a REMIC I Regular Interest and is entitled to distributions as set forth herein.
REMIC I Regular Interest Y-2: The uncertificated undivided beneficial interest in REMIC I which
constitutes a REMIC I Regular Interest and is entitled to distributions as set forth herein.
REMIC I Regular Interest Z-1: The uncertificated undivided beneficial interest in REMIC I which
constitutes a REMIC I Regular Interest and is entitled to distributions as set forth herein.
REMIC I Regular Interest Z-2: The uncertificated undivided beneficial interest in REMIC I which
constitutes a REMIC I Regular Interest and is entitled to distributions as set forth herein.
REMIC I Remittance Rate: With respect to any Payment Date and any REMIC I Regular Interest, the per
annum rate described for such REMIC I Regular Interest in the definition of REMIC I Regular Interests.
REMIC I Y Principal Reduction Amounts: For any Payment Date the amounts by which the Uncertificated
Principal Balances of REMIC I Regular Interests Y-1 and Y-2, respectively, will be reduced on such Payment Date
by the allocation of Liquidation Loss Amounts and the distribution of principal, determined as follows:
First, for each of Loan Group I and Loan Group II, determine the weighted average of the Net Loan Rates
of the Mortgage Loans in that Loan Group for distributions of interest that will be made on the next succeeding
Payment Date (the "Group Interest Rate" for that Loan Group). The REMIC I Y Principal Reduction Amounts for
REMIC I Regular Interests Y-1 and Y-2 will be determined pursuant to the "Generic solution for the REMIC I Y
Regular Interests" set forth below (the "Generic Solution") by making the following identifications among the
Loan Groups and their related REMIC I Regular Interests:
A. Determine which Loan Group has the lower Group Interest Rate. That Loan Group will be
identified with Loan Group AA and the REMIC I Regular Interests related to that Loan Group will be respectively
identified with the REMIC I Regular Interests YAA and ZAA. The Group Interest Rate for that Loan Group will be
identified with J%. If the two Loan Groups have the same Group Interest Rate pick one for this purpose, subject
to the restriction that each Loan Group may be picked only once in the course of any such selections pursuant to
paragraphs A and B of this definition.
B. Determine which Loan Group has the higher Group Interest Rate. That Loan Group will
be identified with Loan Group BB and the REMIC I Regular Interests related to that Loan Group will be
respectively identified with the REMIC I Regular Interests YBB and ZBB. The Group Interest Rate for that Loan
Group will be identified with K%. If the two Loan Groups have the same Group Interest Rate the Loan Group not
selected pursuant to paragraph A, above, will be selected for purposes of this paragraph B.
Second, apply the Generic Solution set forth below to determine the REMIC I Y-1 Principal Reduction
Amounts for the Payment Date using the identifications made above.
Generic Solution for the REMIC I Y Principal Reduction Amounts: For any Payment Date, the amounts by
which the Uncertificated Principal Balances of REMIC I Regular Interests YAA and ZAA, respectively, will be
reduced on such Payment Date by the allocation of Liquidation Loss Amounts and the distribution of principal,
determined as follows:
J% and K% represent the interest rates on Loan Group AA and Loan Group BB respectively. J%<K%.
For purposes of the succeeding formulas the following symbols shall have the meanings set forth below:
PJB = the aggregate outstanding principal balance of the Group AA Mortgage Loans minus the
aggregate Note Balance of the related Notes after the allocation of Liquidation Loss Amounts and distributions of
principal on such Payment Date.
PKB = the aggregate outstanding principal balance of the Group BB Mortgage Loans minus the
aggregate Note Balance of the related Notes after the allocation of Liquidation Loss Amounts and distributions of
principal on such Payment Date.
R = the Class CB Pass-Through Rate = (J%PJB + K%PKB)/(PJB + PKB)
Yj = the REMIC I Regular Interest YAA Uncertificated Principal Balance after distributions
on the prior Payment Date.
Yk = the REMIC I Regular Interest YBB Uncertificated Principal Balance after distributions
on the prior Payment Date.
ΔYj = the REMIC I Regular Interest YAA Principal Reduction Amount.
ΔYk = the REMIC I Regular Interest YBB Principal Reduction Amount.
Zj = the REMIC I Regular Interest ZAA Uncertificated Principal Balance after distributions
on the prior Payment Date.
Zk = the REMIC I Regular Interest ZBB Uncertificated Principal Balance after distributions
on the prior Payment Date.
ΔZj = the REMIC I Regular Interest ZAA Principal Reduction Amount.
= ΔPj - ΔYj
ΔZk = the REMIC I Regular Interest ZBB Principal Reduction Amount.
= ΔPk - ΔYk
Pj = the aggregate Uncertificated Principal Balance of REMIC I Regular Interests YAA and
ZAA after distributions on the prior Payment Date, which is equal to the aggregate principal balance of the Group
AA Mortgage Loans.
Pk = the aggregate Uncertificated Principal Balance of REMIC I Regular Interests YBB and
ZBB after distributions on the prior Payment Date, which is equal to the aggregate principal balance of the Group
BB Mortgage Loans.
ΔPj = the aggregate principal reduction resulting on such Payment Date on the Group
AA Mortgage Loans as a result of principal distributions (exclusive of any amounts distributed pursuant to
clauses (c)(i) or (c)(ii) of the definition of REMIC I Distribution Amount) to be made and Liquidation Loss
Amounts to be allocated on such Payment Date, if applicable, which is equal to the aggregate of the REMIC I
Regular Interest YAA Principal Reduction Amount and the REMIC I Regular Interest ZAA Principal Reduction Amount.
ΔPk= the aggregate principal reduction resulting on such Payment Date on the Group
BB Mortgage Loans as a result of principal distributions (exclusive of any amounts distributed pursuant to
clauses (c)(i) or (c)(ii) of the definition of REMIC I Distribution Amount) to be made and Liquidation Loss
Amounts to be allocated on such Payment Date, which is equal to the aggregate of the REMIC I Regular Interest YBB
Principal Reduction Amount and the REMIC I Regular Interest ZBB Principal Reduction Amount.
α = .0005
γ = (R - J%)/(K% - R). γ is a non-negative number unless its denominator is
zero, in which event it is undefined.
If γ is zero, ΔYk = Yk and ΔYj = (Yj/Pj)ΔPj.
If γ is undefined, ΔYj = Yj, ΔYk = (Yk/Pk)ΔPk if denominator
In the remaining situations, ΔYk and ΔYj shall be defined as follows:
1. If Yk - α(Pk - ΔPk) => 0, Yj- α(Pj - ΔPj) => 0, and γ
(Pj - ΔPj) < (Pk - ΔPk), ΔYk = Yk - αγ (Pj - ΔPj) and
ΔYj = Yj - α(Pj - ΔPj).
2. If Yk - α(Pk - ΔPk) => 0, Yj - α(Pj - ΔPj) => 0, and γ
(Pj - ΔPj) => (Pk - ΔPk), ΔYk = Yk - α(Pk - ΔPk) and
ΔYj = Yj - (α/γ)(Pk - ΔPk).
3. If Yk - α(Pk - ΔPk) < 0, Yj - α(Pj - ΔPj) => 0, and
Yj - α(Pj - ΔPj) => Yj - (Yk/γ), ΔYk = Yk - αγ (Pj - ΔPj) and
ΔYj = Yj - α(Pj - ΔPj).
4. If Yk - α(Pk - ΔPk) < 0, Yj - (Yk/γ) => 0, and
Yj - α(Pj - ΔPj) <= Yj - (Yk/γ), ΔYk = 0 and ΔYj = Yj - (Yk/γ).
5. If Yj - α(Pj - ΔPj) < 0, Yj - (Yk/γ) < 0, and
Yk - α(Pk - ΔPk) <= Yk - (γYj), ΔYk = Yk - (γYj) and ΔYj = 0.
6. If Yj - α(Pj - ΔPj) < 0, Yk - α(Pk - ΔPk) => 0, and
Yk - α(Pk - ΔPk) => Yk - (γYj), ΔYk = Yk - α(Pk - ΔPk) and
ΔYj = Yj - (α/γ)(Pk - ΔPk).
The purpose of the foregoing definitional provisions together with the related provisions allocating
Liquidation Loss Amounts and defining the REMIC I Regular Interest Y-1 and Y-2 and REMIC I Regular Interest Z-1
and Z-2 Principal Distribution Amounts is to accomplish the following goals in the following order of priority:
1. Making the ratio of Yk to Yj equal to γ after taking account of the allocation
Liquidation Loss Amounts and the distributions that will be made through end of the Payment Date to which
such provisions relate and assuring that the Principal Reduction Amounts for each of the REMIC I Regular
Interests is greater than or equal to zero for such Payment Date;
2. Making (i) the REMIC I Regular Interest YAA Uncertificated Principal Balance less than
or equal to 0.0005 of the sum of the Uncertificated Principal Balances for REMIC I Regular Interest YAA and
REMIC I Regular Interest ZAA and (ii) the REMIC I Regular Interest YBB Uncertificated Principal Balances
less than or equal to 0.0005 of the sum of the Uncertificated Principal Balances for REMIC I Regular
Interest YBB and REMIC I Regular Interest ZBB in each case after giving effect to allocations of Liquidation
Loss Amounts and distributions to be made through the end of the Payment Date to which such provisions
relate; and
3. Making the larger of (a) the fraction whose numerator is Yk and whose denominator is
the sum of Yk and Zk and (b) the fraction whose numerator is Yj and whose denominator is the sum of Yj, and
Zj as large as possible while remaining less than or equal to 0.0005.
In the event of a failure of the foregoing portion of the definition of REMIC I Y-1 Principal Reduction Amount to
accomplish both of goals 1 and 2 above, the amounts thereof should be adjusted to so as to accomplish such goals
within the requirement that each REMIC I Y-1 Principal Reduction Amount must be less than or equal to the sum of
(a) the principal Liquidation Loss Amounts to be allocated on the related Payment Date for the related Loan Group
and (b) the remainder of the REMIC I Available Distribution Amount for the related Loan Group or after reduction
thereof by the distributions to be made on such Distribution in respect of interest on the related REMIC I
Regular Interests, or, if both of such goals cannot be accomplished within such requirement, such adjustment as
is necessary shall be made to accomplish goal 1 within such requirement. In the event of any conflict among the
provisions of the definition of the REMIC I Y-1 Principal Reduction Amounts, such conflict shall be resolved on
the basis of the goals and their priorities set forth above within the requirement set forth in the preceding
sentence.
REMIC I Y Regular Interests: REMIC I Regular Interests Y-1 and Y-2.
REMIC I Y-1 Principal Distribution Amount: For any Payment Date, the excess, if any, of the REMIC I Y-1
Principal Reduction Amount for such Payment Date over the principal portion of Liquidation Loss Amounts allocated
to REMIC I Regular Interest Y-1 on such Payment Date.
REMIC I Y-2 Principal Distribution Amount: For any Payment Date, the excess, if any, of the REMIC I Y-2
Principal Reduction Amount for such Payment Date over the principal portion of Liquidation Loss Amounts allocated
to REMIC I Regular Interest Y-2 on such Payment Date.
REMIC I Z Principal Reduction Amounts: For any Payment Date, the amounts by which the Uncertificated
Principal Balances of the REMIC I Z Regular Interests will be reduced on such Payment Date by the allocation of
Liquidation Loss Amounts and the distribution of principal, which shall be in each case the excess of (A) the sum
of (x) the excess of the REMIC I Available Distribution Amount for the related Group (i.e. the "related Group"
for REMIC I Regular Interest Z-1 is the Group I Loans and the "related Group" for REMIC I Regular Interest Z-2 is
the Group II Loans) over the sum of the amounts thereof distributable (i) in respect of interest on such REMIC I
Z Regular Interest and the related REMIC I Y Regular Interest and (ii) to such REMIC I Z Regular Interest and the
related REMIC I Y Regular Interest pursuant to clause (c)(i) of the definition of "REMIC I Distribution Amount"
and (y) the amount of Liquidation Loss Amounts allocable to principal for the related Group over (B) the REMIC I
Y Principal Reduction Amount for the related Group.
REMIC I Z Regular Interests: REMIC I Regular Interests Z-1 and Z-2.
REMIC I Z-1 Principal Distribution Amount: For any Payment Date, the excess, if any, of the REMIC I Z-1
Principal Reduction Amount for such Payment Date over the principal portion of Liquidation Loss Amounts allocated
to REMIC I Regular Interest Z-1 on such Payment Date.
REMIC I Z-2 Principal Distribution Amount: For any Payment Date, the excess, if any, of the REMIC I Z-2
Principal Reduction Amount for such Payment Date over the principal portion of Liquidation Loss Amounts allocated
to REMIC I Regular Interest Z-2 on such Payment Date.
REMIC II: The segregated pool of assets subject hereto, constituting a portion of the primary trust
created hereby and to be administered hereunder, with respect to which a separate REMIC election is to be made,
consisting of the REMIC I Regular Interests.
REMIC II Available Distribution Amount: For any Payment Date, the amounts deemed distributed with
respect to the REMIC I Regular Interests pursuant to Section 5.01(e) of the Trust Agreement.
REMIC II Distribution Amount: For any Payment Date, the REMIC II Available Distribution Amount shall be
distributed by REMIC II to REMIC III on account of the REMIC II Regular Interests and to the Class R-II
Certificateholders, as follows:
(a) From the portion thereof attributable to the Group I Loans, to REMIC III as the holder of REMIC II
Regular Interest LT1, REMIC II Regular Interest LT2, REMIC II Regular Interest LT3, REMIC II Regular
Interest LT4 and REMIC II Regular Interest LTY-1,
(I) pro rata, in an amount equal to (A) their Uncertificated Accrued Interest for such Payment
Date, plus (B) any amounts in respect thereof remaining unpaid from previous Payment Dates;
and
(II)in an amount equal to the remainder of such portion of the REMIC II Available Distribution
Amount after the distributions made pursuant to clause (I) above, allocated as follows:
(A) in respect of the REMIC II Regular Interest LT2, REMIC II Regular Interest
LT3, REMIC II Regular Interest LT4 and REMIC II Regular Interest LTY-1, their
respective Principal Distribution Amounts;
(B) in respect of the REMIC II Regular Interest LT1 any remainder until the
Uncertificated Principal Balance thereof is reduced to zero; and
(C) any remainder in respect of the REMIC II Regular Interest LT2, REMIC II
Regular Interest LT3, REMIC II Regular Interest LT4 and REMIC II Regular Interest
LTY-1, pro rata according to their respective Uncertificated Principal Balances as
reduced by the distributions deemed made pursuant to (A) above, until their respective
Uncertificated Principal Balances are reduced to zero.
(b) From the portion thereof attributable to the Group II Loans, to REMIC III as the holder of REMIC II
Regular Interest LT5, REMIC II Regular Interest LT6, REMIC II Regular Interest LT7, REMIC II Regular
Interest LT8 and REMIC II Regular Interest LTY-2,
(I) pro rata, in an amount equal to (A) their Uncertificated Accrued Interest for such Payment
Date, plus (B) any amounts in respect thereof remaining unpaid from previous Payment Dates; and
(II) in an amount equal to the remainder of such portion the REMIC II Available Distribution
Amount after the distributions made pursuant to clause (I) above, allocated as follows:
(A) in respect of the REMIC II Regular Interest LT6, REMIC II Regular Interest
LT7, REMIC II Regular Interest LT8 and REMIC II Regular Interest LTY-2, their
respective Principal Distribution Amounts;
(B) in respect of the REMIC II Regular Interest LT5 any remainder until the
Uncertificated Principal Balance thereof is reduced to zero; and
(C) any remainder in respect of the REMIC II Regular Interest LT6, REMIC III
Regular Interest LT7, REMIC II Regular Interest LT8 and REMIC II Regular Interest
LTY-2, pro rata according to their respective Uncertificated Principal Balances as
reduced by the distributions deemed made pursuant to (A) above, until their respective
Uncertificated Principal Balances are reduced to zero.
(c) To the extent of the REMIC II Available Distribution Amount for such Payment Date remaining after
payment of the amounts pursuant to paragraphs (a), and (b) of this definition of "REMIC II Distribution
Amount",
(I) first, to each of the REMIC II Regular Interests, pro rata according to the amount of
unreimbursed Liquidation Loss Amounts allocable to principal previously allocated to each such
Class, the aggregate amount of any distributions to the Notes or Certificates as reimbursement of
Liquidation Loss Amounts on such Payment Date pursuant to Section 3.05 of the Indenture; provided,
however, that any amounts distributed pursuant to this paragraph (c)(I) of this definition of
"REMIC II Distribution Amount" shall not cause a reduction in the Uncertificated Principal Balances
of any REMIC II Regular Interest; and
(II) second, to the Class R-II Certificates, all remaining amounts.
REMIC II Interests: The Class R-II Certificates and the REMIC II Regular Interests.
REMIC II Liquidation Loss Amounts: For any Payment Date, Liquidation Loss Amounts on the Group I Loans
for the related Collection Period shall be allocated, as follows: (i) the interest portion of Liquidation Loss
Amounts, if any, shall be allocated pro rata to accrued interest on the REMIC II Regular Interests LT1, LT2, LT4
and LTY-1 to the extent of such accrued interest, and (ii) any remaining interest portions of Liquidation Loss
Amounts and any principal portions of Liquidation Loss Amounts shall be treated as principal portions of
Liquidation Loss Amounts and allocated (i) first to the REMIC II Regular Interest LTY-1 in the amount that such
Liquidation Loss Amounts were allocated to the REMIC I Regular Interest Y-1, (ii) second to the REMIC II Regular
Interest LT2, REMIC II Regular Interest LT3 and REMIC II Regular Interest LT4, pro rata according to their
respective Principal Reduction Amounts, provided that such allocation to each of the REMIC II Regular Interest
LT2, REMIC II Regular Interest LT3 and REMIC II Regular Interest LT4 shall not exceed their respective Principal
Reduction Amounts for such Payment Date, and (iii) third the remainder to the REMIC II Regular Interest LT1.
For any Payment Date, Liquidation Loss Amounts on the Group II Loans for the related Collection Period
shall be allocated, as follows: (i) the interest portion of Liquidation Loss Amounts, if any, shall be allocated
pro rata to accrued interest on the REMIC II Regular Interests LT5, LT6, LT8 and LTY-2 to the extent of such
accrued interest, and (ii) any remaining interest portions of Liquidation Loss Amounts and any principal portions
of Liquidation Loss Amounts shall be treated as principal portions of Liquidation Loss Amounts and allocated (i)
first to the REMIC II Regular Interest LTY-2 in the amount that such Liquidation Loss Amounts were allocated to
the REMIC I Regular Interest Y-2, (ii) second to the REMIC II Regular Interest LT6, REMIC II Regular Interest LT7
and REMIC II Regular Interest LT8, pro rata according to their respective Principal Reduction Amounts, provided
that such allocation to each of the REMIC II Regular Interest LT6, REMIC II Regular Interest LT7 and REMIC II
Regular Interest LT8 shall not exceed their respective Principal Reduction Amounts for such Payment Date, and
(iii) third the remainder to the REMIC II Regular Interest LT5.
REMIC II Principal Reduction Amounts: For any Payment Date, the amounts by which the Uncertificated
Principal Balances of the REMIC II Regular Interests LT1, LT2, LT3, LT4, LT5, LT6, LT7, LT8, LTY-1 and LTY-2,
respectively, will be reduced on such Payment Date by the allocation of Liquidation Loss Amounts and the
distribution of principal, determined as follows:
For purposes of the succeeding formulas the following symbols shall have the meanings set forth below:
Y1 = the aggregate principal balance of the REMIC II Regular Interests LT1 and LTY-1 after
distributions on the prior Payment Date
Y2 = the principal balance of the REMIC II Regular Interest LT2 after distributions on the prior
Payment Date.
Y3 = the principal balance of the REMIC II Regular Interest LT3 after distributions on the prior
Payment Date.
Y4 = the principal balance of the REMIC II Regular Interest LT4 after distributions on the prior
Payment Date (note: Y3 = Y4).
ΔY1 = the aggregate of the REMIC II Regular Interest LT1 and LTY-1 Principal Reduction Amounts. Such
amount shall be allocated first to REMIC II Regular Interest LTY-1 up to the REMIC I Y-1 Principal Reduction
Amount and thereafter the remainder shall be allocated to REMIC II Regular Interest LTY-1.
ΔY2 = the REMIC II Regular Interest LT2 Principal Reduction Amount.
ΔY3 = the REMIC II Regular Interest LT3 Principal Reduction Amount.
ΔY4 = the REMIC II Regular Interest LT4 Principal Reduction Amount.
P0 = the aggregate principal balance of the REMIC II Regular Interests LT1, LT2, LT3, LT4 and LTY-1
after distributions and the allocation of Liquidation Loss Amounts on the prior Payment Date.
P1 = the aggregate principal balance of the REMIC II Regular Interests LT1, LT2, LT3, LT4 and LTY-1
after distributions and the allocation of Liquidation Loss Amounts to be made on such Payment Date.
ΔP = P0 - P1 = the aggregate of the REMIC II Regular Interests LT1, LT2, LT3, LT4 and LTY-1
Principal Reduction Amounts.
= the aggregate of the principal portions of Liquidation Loss Amounts to be allocated and
Principal Collections to be distributed with respect to the Class I-A Notes and the Class M Notes on such Payment
Date (including distributions of accrued and unpaid interest on the Class SB Certificates for prior Payment
Dates).
R0 = the Group I Net WAC Rate (stated as a monthly rate) after giving effect to amounts distributed
and Liquidation Loss Amounts allocated on the prior Payment Date.
R1 = the Group I Net WAC Rate (stated as a monthly rate) after giving effect to amounts to be
distributed and Liquidation Loss Amounts to be allocated on such Payment Date.
α = (Y2 + Y3)/P0. The initial value of α on the Closing Date for use on the first Payment Date
shall be 0.0001.
γ0 = the lesser of (A) the sum of (1) the sum, for all Classes of Class I-A Notes, of the product
for each Class of (i) the monthly interest rate (as limited by the Group I Net WAC Rate, if applicable) for such
Class applicable for distributions to be made on such Payment Date and (ii) the aggregate Note Balance for such
Class after distributions and the allocation of Liquidation Loss Amounts on the prior Payment Date, (2) the sum,
for all Classes of Class M Notes, of the product for each Class of (i) the monthly interest rate (as limited by
the Class M Net WAC Cap Rate, if applicable) for such Class applicable for distributions to be made on such
Payment Date and (ii) the aggregate Note Balance for such Class multiplied by a fraction whose numerator is the
principal balance of the REMIC I Regular Interest Y-1 and whose denominator is the sum of the principal balances
of the REMIC I Regular Interests Y-1 and Y-2 after distributions and the allocation of Liquidation Loss Amounts
on the prior Payment Date and (3) the amount, if any, by which the sum of the amounts in clauses (A)(1), (2) and
(3) of the definition of (GAMMA)0 exceeds S0 * Q0 and (B) R0*P0.
γ1 = the lesser of (A) the sum of (1) the sum, for all Classes of Class I-A Notes of the product for
each Class of (i) the monthly interest rate (as limited by the related Group I Net WAC Rate, if applicable) for
such Class applicable for distributions to be made on the next succeeding Payment Date and (ii) the aggregate
Note Balance for such Class after distributions and the allocation of Liquidation Loss Amounts to be made on such
Payment Date, (2) the sum, for all Classes of Class M Notes, of the product for each Class of (i) the monthly
interest rate (as limited by the Class M Net WAC Cap Rate, if applicable) for such Class applicable for
distributions to be made on the next succeeding Payment Date and (ii) the aggregate Note Balance for such Class
multiplied by a fraction whose numerator is the principal balance of the REMIC I Regular Interest Y-1 and whose
denominator is the sum of the principal balances of the REMIC I Regular Interests Y-1 and Y-2 after distributions
and the allocation of Liquidation Loss Amounts to be made on such Payment Date and (3) the amount, if any, by
which the sum of the amounts in clauses (A)(1), (2) and (3) of the definition of (GAMMA)1 exceeds S1 * Q1 and (B)
R1*P1.
Then, based on the foregoing definitions:
ΔY1 = ΔP - ΔY2 - ΔY3 - ΔY4;
ΔY2 = (α/2){( γ0R1 - γ1R0)/R0R1};
ΔY3 = αΔP - ΔY2; and
ΔY4 = ΔY3.
if both ΔY2 and ΔY3, as so determined, are non-negative numbers. Otherwise:
(1) If ΔY2, as so determined, is negative, then
ΔY2 = 0;
ΔY3 = α{γ1R0P0 - γ0R1P1}/{γ1R0};
ΔY4 = ΔY3; and
ΔY1 = ΔP - ΔY2 - ΔY3 - ΔY4.
(2) If ΔY3, as so determined, is negative, then
ΔY3 = 0;
ΔY2 = α{γ0R1P1 - γ1R0P0}/{2R1R0P1 - γ1R0};
ΔY4 = ΔY3; and
ΔY1 = ΔP - ΔY2 - ΔY3 - ΔY4.
For purposes of the succeeding formulas the following symbols shall have the meanings set forth below:
Y5 = the aggregate principal balance of the REMIC II Regular Interests LT5 and LTY-2 after
distributions on the prior Payment Date.
Y6 = the principal balance of the REMIC II Regular Interest LT6 after distributions on the prior
Payment Date.
Y7 = the principal balance of the REMIC II Regular Interest LT7 after distributions on the prior
Payment Date.
Y8 = the principal balance of the REMIC II Regular Interest LT8 after distributions on the prior
Payment Date (note: Y7 = Y8).
ΔY5 = the aggregate of the REMIC II Regular Interest LT5 and LTY-2 Principal Reduction Amounts. Such
amount shall be allocated first to REMIC II Regular Interest LTY-2 up to the REMIC II LTY-2 Principal Reduction
Amount and thereafter the remainder shall be allocated to REMIC II Regular Interest LT5.
ΔY6 = the REMIC II Regular Interest LT6 Principal Reduction Amount.
ΔY7 = the REMIC II Regular Interest LT7 Principal Reduction Amount.
ΔY8 = the REMIC II Regular Interest LT8 Principal Reduction Amount.
Q0 = the aggregate principal balance of the REMIC II Regular Interests LT5, LT6, LT7, LT8 and LTY-2
after distributions and the allocation of Liquidation Loss Amounts on the prior Payment Date.
Q1 = the aggregate principal balance of the REMIC II Regular Interests LT5, LT6, LT7, LT8, LT-Y1 and
LTY-2 after distributions and the allocation of Liquidation Loss Amounts to be made on such Payment Date.
ΔQ = Q0 - Q1 = the aggregate of the REMIC II Regular Interests LT5, LT6, LT7, LT8 and LTY-2
Principal Reduction Amounts.
= the aggregate of the principal portions of Liquidation Loss Amounts to be allocated, and the
Principal Funds to be distributed with respect to the Class II-A-1 Notes and the Class M Notes on such Payment
Date (including distributions in respect of accrued and unpaid interest on the Class SB Certificates for prior
Payment Dates).
S0 = the Group II Net WAC Rate (stated as a monthly rate) after giving effect to amounts distributed
and Liquidation Loss Amounts allocated on the prior Payment Date.
S1 = the Group II Net WAC Rate (stated as a monthly rate) after giving effect to amounts to be
distributed and Liquidation Loss Amounts to be allocated on such Payment Date.
β = (Y6 + Y7)/Q0. The initial value of β on the Closing Date for use on the first Payment Date
shall be 0.0001.
Γ0 = the lesser of (A) the sum of (1) the product of (i) the monthly interest rate (as limited by
the Group II Net WAC Rate, if applicable) for the Class II-A Notes applicable for distributions to be made on
such Payment Date and (ii) the aggregate Note Balance for such Class after distributions and the allocation of
Liquidation Loss Amounts on the prior Payment Date, (2) for all Classes of Class M Notes of the product for each
Class of (i) the monthly interest rate (as limited by the Class M Net WAC Cap Rate, if applicable) for such Class
applicable for distributions to be made on such Payment Date and (ii) the aggregate Note Balance for such Class
multiplied by a fraction whose numerator is the principal balance of the REMIC I Regular Interest Y-2 and whose
denominator is the sum of the principal balances of the REMIC I Regular Interests Y-1 and Y-2 after distributions
and the allocation of Liquidation Loss Amounts on the prior Payment Date and (3) the amount, if any, by which the
sum of the amounts in clauses (A)(1), (2) and (3) of the definition of γ0 exceeds R0 * P0 and (B) S0*Q0.
Γ1 = the lesser of (A) the sum of (1) the product of (i) the monthly interest rate (as limited by
the Group II Net WAC Rate, if applicable) for the Class II-A Notes applicable for distributions to be made on the
next succeeding Payment Date and (ii) the aggregate Note Balance for such Class after distributions and the
allocation of Liquidation Loss Amounts to be made on such Payment Date, (2) for all Classes of Class M Notes of
the product for each Class of (i) the monthly interest rate (as limited by the Class M Net WAC Cap Rate, if
applicable) for such Class applicable for distributions to be made on the next succeeding Payment Date and (ii)
the aggregate Note Balance for such Class multiplied by a fraction whose numerator is the principal balance of
the REMIC I Regular Interest Y-2 and whose denominator is the sum of the principal balances of the REMIC I
Regular Interests Y-1 and Y-2 after distributions and the allocation of Liquidation Loss Amounts to be made on
such Payment Date and (3) the amount, if any, by which the sum of the amounts in clauses (A)(1), (2) and (3) of
the definition of γ1 exceeds R1 * P1 and (B) S1*Q1.
Then, based on the foregoing definitions:
ΔY5 = ΔQ - ΔY6 - ΔY7 - ΔY8;
ΔY6 = (β/2){(Γ0S1 - Γ1S0)/S0S1};
ΔY7 = βΔQ - ΔY6; and
ΔY8 = ΔY7.
if both ΔY6 and ΔY7, as so determined, are non-negative numbers. Otherwise:
(1) If ΔY6, as so determined, is negative, then
ΔY6 = 0;
ΔY7 = β{Γ1S0Q0 - Γ0S1Q1}/{Γ1S0};
ΔY8 = ΔY7; and
ΔY5 = ΔQ - ΔY6 - ΔY7 - ΔY8.
(2) If ΔY7, as so determined, is negative, then
ΔY7 = 0;
ΔY6 = β{Γ1S0Q0 - Γ0S1Q1}/{2S1S0Q1 - Γ1S0};
ΔY8 = ΔY7; and
ΔY5 = ΔQ - ΔY6 - ΔY7 - ΔY8.
REMIC II Regular Interests: Each of the following separate non-certificated beneficial ownership
interests in REMIC II having the properties set forth in the following table and elsewhere herein:
______________________________________________________________________________________________________________________
REMIC II Latest
Designation Remittance Initial Uncertificated Possible
for each REMIC II Regular Rate Principal Maturity
Interest Balance
______________________________________________________________________________________________________________________
$177,774,022.26
LT1 (1) September 25, 2037
______________________________________________________________________________________________________________________
LT2 (1) $6,689.56 September 25, 2037
______________________________________________________________________________________________________________________
LT3 0.00% $11,099.63 September 25, 2037
______________________________________________________________________________________________________________________
LT4 (2) $11,099.63 September 25, 2037
______________________________________________________________________________________________________________________
LTY-1 (1) $88,945.93 September 25, 2037
______________________________________________________________________________________________________________________
LT5 (3) $223,311,470.41 September 25, 2037
______________________________________________________________________________________________________________________
LT6 (3) $7,987.28 September 25, 2037
______________________________________________________________________________________________________________________
LT7 0.00% $14,358.71 September 25, 2037
______________________________________________________________________________________________________________________
LT8 (4) $14,358.71 September 25, 2037
______________________________________________________________________________________________________________________
LTY-2 (3) $111,729.72 September 25, 2037
______________________________________________________________________________________________________________________
(1) REMIC II Regular Interests LT1, LT2 and LTY-1 will bear interest at a variable rate equal to the Group I Net
WAC Rate.
(2) REMIC II Regular Interest LT4 will bear interest at a variable rate equal to twice the Group I Net WAC Rate.
(3) REMIC II Regular Interests LT5, LT6 and LTY-2 will bear interest at a variable rate equal to the Group II
Net WAC Rate.
(4) REMIC II Regular Interest LT8 will bear interest at a variable rate equal to twice the Group II Net WAC Rate.
REMIC II Remittance Rate: With respect to any Payment Date and any REMIC II Regular Interest, the per
annum rate described for such REMIC II Regular Interest in the definition of REMIC II Regular Interests.
REMIC III: The segregated pool of assets subject hereto, constituting a portion of the primary trust
created hereby and to be administered hereunder, with respect to which a separate REMIC election is to be made,
consisting of the REMIC II Regular Interests.
REMIC III Available Distribution Amount: For any Payment Date, the amounts deemed distributed with
respect to the REMIC II Regular Interests pursuant to Section 5.01(e) of the Trust Agreement.
REMIC III Distribution Amount: For any Distribution Date, the REMIC III Available Distribution Amount
shall be deemed distributed by REMIC III to the Holders of the Notes and the Certificates (other than the Class R
Certificates) on account of the REMIC III Regular Interests, and to the Class R-III Certificateholders, as
follows: to each REMIC III Regular Interest, the amount distributed in respect of interest and principal on the
Class or Classes of Notes or Certificates bearing the same designation with such amounts having the same
character as interest or principal with respect to the REMIC III Regular Interest as they have with respect to
such Notes or Certificates. Any remaining amount of the REMIC III Available Distribution Amount shall be
distributed to the Class R-III Certificateholders.
REMIC III Liquidation Loss Amounts: On any Payment Date, Liquidation Loss Amounts for the related
Collection Period shall be allocated first to REMIC III Regular Interest SB-IO in reduction of the accrued and
unpaid interest thereon until such accrued and unpaid interest shall have been reduced to zero, second to
REMIC III Regular Interest SB-PO in reduction of the Uncertificated Principal Balance thereof until such
Uncertificated Principal Balance shall have been reduced to zero and third to the Notes to the same extent, if
any, that (i) amounts interest accrued on such Notes since the prior Payment Date remain unpaid after
distributions on such Payment Date and (ii) the aggregate of the Class Principal Balances of the Notes following
distributions on such Payment Date exceed the aggregate principal balance of the Loans by more than such excess,
if any, after distributions on the immediately prior Payment Date.
REMIC III Regular Interest SB-IO: A regular interest in REMIC III with no entitlement to principal and
entitled to (i) interest at the Certificate Rate on its Notional Amount and (ii) payments of prepayment charges.
REMIC III Regular Interest SB-PO: A regular interest in REMIC III with no entitlement to interest and
entitled to principal in an amount equal to the Initial Certificate Balance and any amounts in the nature of
prepayment charges received in connection with Loans, provided that any payment of prepayment charges shall not
be deemed to reduce the Uncertificated Principal Balance of REMIC III Regular Interest SB-PO.
REMIC III Regular Interests: Each Class of the Notes and REMIC III Regular Interests SB-IO and SB-PO.
REMIC III Remittance Rate: With respect to each Class of Notes, the Note Rate for such Class. With
respect to REMIC III Regular Interest SB-PO, 0% per annum. With respect to REMIC III Regular Interest SB-IO the
Certificate Rate therefor.
REMIC Provisions: Provisions of the federal income tax law relating to real estate mortgage investment
conduits, which appear at Sections 860A through 860G of Subchapter M of Chapter 1 of the Code, and related
provisions, and temporary and final regulations (or, to the extent not inconsistent with such temporary or final
regulations, proposed regulations) and published rulings, notices and announcements promulgated thereunder, as
the foregoing may be in effect from time to time.
Remittance Rate: The REMIC I Remittance Rate, REMIC II Remittance Rate or REMIC III Remittance Rate, as
applicable.
Repurchase Event: With respect to any Mortgage Loan, either (i) a discovery that, as of the Closing
Date, the related Mortgage was not a valid lien on the related Mortgaged Property subject only to (A) the lien of
any prior mortgage indicated on the Mortgage Loan Schedule, (B) the lien of real property taxes and assessments
not yet due and payable, (C) covenants, conditions, and restrictions, rights of way, easements and other matters
of public record as of the date of recording of such Mortgage and such other permissible title exceptions as are
customarily accepted for similar loans and (D) other matters to which like properties are commonly subject that
do not materially adversely affect the value, use, enjoyment or marketability of the related Mortgaged Property
or (ii) with respect to any Mortgage Loan as to which the Seller delivers an affidavit certifying that the
original Mortgage Note has been lost or destroyed, a subsequent default on such Mortgage Loan if the enforcement
thereof or of the related Mortgage is materially and adversely affected by the absence of such original Mortgage
Note.
Repurchase Price: With respect to any Mortgage Loan required to be repurchased on any date pursuant to
the Purchase Agreement or purchased by the Servicer pursuant to the Servicing Agreement, an amount equal to the
sum of (i) 100% of the Principal Balance thereof (without reduction for any amounts charged off), (ii) unpaid
accrued interest at the Loan Rate (or with respect to the last day of the month in the month of repurchase, the
Loan Rate will be the Loan Rate in effect as of the second to last day in such month) on the outstanding
Principal Balance thereof from the Due Date to which interest was last paid by the related Mortgagor to the first
day of the month following the month of purchase and (iii) in connection with any Mortgage Loan required to be
repurchased pursuant to Sections 2.1 or 3.1 of the Purchase Agreement, any costs and damages incurred by the
Trust with respect to such Mortgage Loan in connection with a breach of Section 3.1(b)(x) of the Purchase
Agreement.
Required Insurance Policy: With respect to any Mortgage Loan, any insurance policy which is required to
be maintained from time to time under the Servicing Agreement or the related Subservicing Agreement in respect of
such Mortgage Loan.
Responsible Officer: With respect to the Indenture Trustee, any officer of the Indenture Trustee with
direct responsibility for the administration of the Indenture and also, with respect to a particular matter, any
other officer to whom such matter is referred because of such officer's knowledge of and familiarity with the
particular subject.
Rolling Six-Month Annualized Liquidation Loss Amounts: With respect to any Determination Date occurring
after the fifth Determination Date, the product (expressed as a percentage) of (i) the aggregate Liquidation Loss
Amounts as of the end of each of the six Collection Periods (reduced by the aggregate Subsequent Net Recovery
Amounts for such Collection Periods) immediately preceding such Determination Date divided by the Initial Pool
Balance and (ii) two (2).
Rolling Three-Month Delinquency Percentage: With respect to any Payment Date and the Mortgage Loans,
the arithmetic average of the Delinquency Percentages determined for such Payment Date and for each of the two
preceding Payment Dates.
SB-IO Marker Rate: With respect to the Class SB Certificates or the REMIC III Regular Interest SB-IO
and any Payment Date, in relation to the REMIC II Regular Interests LT1, LT2, LT3, LT4 and LTY-1, a per annum
rate equal to two (2) times the weighted average of the REMIC II Remittance Rates for REMIC II Regular Interest
LT2 and REMIC II Regular Interest LT3 and, in relation to the REMIC II Regular Interests LT5, LT6, LT7, LT8 and
LTY-2, a per annum rate equal to two (2) times the weighted average of the REMIC II Remittance Rates for REMIC II
Regular Interest LT6 and REMIC II Regular Interest LT7.
Secretary of State: The Secretary of State of the State of Delaware.
Securities Act: The Securities Act of 1933, as amended, and the rules and regulations promulgated
thereunder.
Securitization Transaction: Any transaction involving a sale or other transfer of mortgage loans
directly or indirectly to an issuing entity in connection with an issuance of publicly offered or privately
placed, rated or unrated mortgage-backed securities.
Securities Balance: The Note Balance or Certificate Balance, as the context may require.
Security: Any Certificate or a Note, as the context may require.
Securityholder: Any Noteholder or Certificateholder.
Seller: Walnut Grove Mortgage Loan Trust 2003-A, a Delaware statutory trust, and its successors and
assigns.
Senior Enhancement Percentage: For any Payment Date, the percentage obtained by dividing (i) the sum of
(a) the aggregate Note Balances of the Class M Notes immediately prior to such Payment Date and (b) the
Overcollateralization Amount, in each case prior to the distribution of the Principal Collection Distribution
Amount on such Payment Date, by (ii) the Pool Balance as of the last day of the related Collection Period.
Servicer: GMAC Mortgage, LLC, a Delaware limited liability company, and its successors and assigns.
Servicer Advances: Any advances the Servicer may make with respect to the Mortgage Loans, whether or
not required, in respect of principal, interest, taxes, insurance or otherwise.
Servicing Agreement: The servicing agreement dated as of the Closing Date among the Servicer, the
Issuer and the Indenture Trustee.
Servicing Certificate: A certificate completed and executed by a Servicing Officer on behalf of the
Servicer in accordance with Section 4.01 of the Servicing Agreement.
Servicing Criteria: The "servicing criteria" set forth in Item 1122(d) of Regulation AB, as such may be
amended from time to time.
Servicing Default: Any one of the following events:
(i) any failure by the Servicer to deposit in the Custodial Account, the Note Payment Account or
the Distribution Account any deposit required to be made under the terms of the Servicing Agreement that
continues unremedied for a period of five Business Days after the date upon which written notice of such failure
shall have been given to the Servicer by the Issuer or the Indenture Trustee;
(ii) any failure on the part of the Servicer duly to observe or perform in any material respect any
other covenants or agreements of the Servicer set forth in the Securities or in the Servicing Agreement, which
failure, in each case, materially and adversely affects the interests of the Securityholders, and which failure
continues unremedied for a period of 45 days after the date on which written notice of such failure, requiring
the same to be remedied, and stating that such notice is a "Notice of Default" under the Servicing Agreement,
shall have been given to the Servicer by the Issuer or the Indenture Trustee;
(iii) the entry against the Servicer of a decree or order by a court or agency or supervisory
authority having jurisdiction under Title 11 of the United States Code or any other applicable federal or state
bankruptcy, insolvency or other similar law, or if a receiver, assignee or trustee in bankruptcy or
reorganization, liquidator, sequestrator or similar official shall have been appointed for or taken possession of
the Servicer or its property, and the continuance of any such decree or order unstayed and in effect for a period
of 60 consecutive days;
(iv) the Servicer shall voluntarily submit to Proceedings under Title 11 of the United States Code
or any other applicable federal or state bankruptcy, insolvency or other similar law relating to the Servicer or
of or relating to all or substantially all of its property; or the Servicer shall admit in writing its inability
to pay its debts generally as they become due, file a petition to take advantage of any applicable insolvency or
reorganization statute, make an assignment for the benefit of its creditors or voluntarily suspend payment of its
obligations;
(v) the Servicer's Tangible Net Worth at any time is less than $100,000,000 and GMAC fails to own,
directly or indirectly, at least 51% of the common stock of the Servicer; or
(vi) the Rolling Six-Month Annualized Liquidation Loss Amount with respect to the Mortgage Loans
exceeds 1.50%.
Servicing Fee: With respect to any Mortgage Loan and any Collection Period, the product of (i) the
Servicing Fee Rate divided by 12 and (ii) the related Principal Balance as of the first day of such Collection
Period.
Servicing Fee Rate: 0.50% per annum.
Servicing Officer: Any officer of the Servicer involved in, or responsible for, the administration and
servicing of the Mortgage Loans whose name and specimen signature appear on a list of servicing officers
furnished to the Indenture Trustee by the Servicer, as such list may be amended from time to time.
Standard & Poor's: Standard & Poor's Ratings Services, a division of The XxXxxx-Xxxx Companies, Inc. or
its successor in interest.
Stated Value: With respect to any Mortgage Loan, the stated value of the related Mortgaged Property
determined in accordance with the Program Guide and given by the related Mortgagor in his or her application.
Statutory Trust Statute: Chapter 38 of Title 12 of the Delaware Code, 12 Del. Code §§3801 et seq., as
the same may be amended from time to time.
Stepdown Date: The earlier to occur of (i) the Payment Date immediately succeeding the Payment Date on
which the aggregate Note Balances of the Class A Notes have been reduced to zero or (ii) the later to occur of
(i) the Payment Date in November 2010 and (ii) the Payment Date on which the Senior Enhancement Percentage
(calculated for this purpose only after taking into account Principal Collections on the Mortgage Loans due on
the related Due Date or received during the related prepayment period but prior to distribution of the Principal
Collection Distribution Amount in respect of the Notes then entitled to distributions of principal on such
Payment Date) is greater than or equal to approximately 54.60%.
Subordinate Component: With respect to each Loan Group and any Payment Date, the positive excess, if
any, of the aggregate Pool Balance in that Loan Group, over the aggregate Note Balance of the related Class A
Notes, in each case immediately prior to that Payment Date.
Subordination Percentage: With respect to the Class A Notes, 45.40%; with respect to the Class M-1
Notes, 61.20%; and with respect to the Class M-2 Notes, 74.70%.
Subsequent Net Recovery Amounts: Recovery Amounts collected on a Mortgage Loan after the Mortgage Loan
becomes a Liquidated Mortgage Loan, net of any Recovery Fee.
Subservicer: Each Person that enters into a Subservicing Agreement as a subservicer of Mortgage Loans.
Subservicing Agreement: The written contract between the Servicer and any Subservicer relating to
servicing and administration of certain Mortgage Loans as provided in Section 3.01(b) of the Servicing Agreement.
Substitution Adjustment Amount: With respect to any Eligible Substitute Loan and any Deleted Loan, the
amount, if any, as determined by the Servicer, by which the aggregate principal balance of all such Eligible
Substitute Loans as of the date of substitution is less than the aggregate Principal Balance of all such Deleted
Loans (after application of the principal portion of the Monthly Payments due in the month of substitution that
are to be distributed to the Securityholders in the month of substitution).
Tangible Net Worth: Net Worth, less the sum of the following (without duplication): (a) any other
assets of GMACM and its consolidated subsidiaries that would be treated as intangibles under GAAP including,
without limitation, any write-up of assets (other than adjustments to market value to the extent required under
GAAP with respect to excess servicing, residual interests in offerings of asset-backed securities and
asset-backed securities that are interest-only securities), good-will, research and development costs,
trade-marks, trade names, copyrights, patents and unamortized debt discount and expenses and (b) loans or other
extensions of credit to officers of GMACM or its consolidated subsidiaries other than mortgage loans made to such
Persons in the ordinary course of business.
Tax Matters Partner: GMACM, as the Servicer, for so long as the Servicer holds all or any portion of
the Class R Certificates; if any other Person holds 100% of the Certificates, such Person; and otherwise as
provided in the Code.
Tax Returns: The federal income tax return on Internal Revenue Service Form 1066, U.S. Real Estate
Mortgage Investment Conduit Income Tax Return, including Schedule Q thereto, Quarterly Notice to Residual
Interest Holders of REMIC Taxable Income or Net Loss Allocation, or any successor forms, to be filed on behalf of
each REMIC due to their classification as a REMIC under the REMIC Provisions, together with any and all other
information, reports or returns that may be required to be furnished to the Certificateholders or filed with the
Internal Revenue Service or any other governmental taxing authority under any applicable provisions of federal,
state or local tax laws.
Transfer: Any direct or indirect transfer, sale, pledge, hypothecation or other form of assignment of
any Ownership Interest in a Certificate.
Transfer Date: The Payment Date on which the Servicer, upon receipt of written notice and direction from
the Issuer, shall cause the retransfer of Mortgage Loans from the Trust Estate to the Issuer, pursuant to
Section 3.15(c) of the Servicing Agreement.
Transfer Notice Date: The fifth Business Day prior to the Transfer Date for which the Servicer shall
give the Indenture Trustee and the Rating Agencies a notice of the proposed retransfer of Mortgage Loans,
pursuant to Section 3.15(c) of the Servicing Agreement.
Transferee: Any Person who is acquiring by Transfer any Ownership Interest in a Certificate.
Transferor: Any Person who is disposing by Transfer of any Ownership Interest in a Certificate.
Treasury Regulations: Regulations, including proposed or temporary Regulations, promulgated under the
Code. References herein to specific provisions of proposed or temporary regulations shall include analogous
provisions of final Treasury Regulations or other successor Treasury Regulations.
Trigger Event: With respect to any Payment Date on or after the Stepdown Date if either (a) the Rolling
Three-Month Delinquency Percentage as determined on that Payment Date, exceeds 7.10% of the Senior Enhancement
Percentage for that Payment Date or (b) the aggregate amount of Liquidation Loss Amounts on the mortgage loans as
a percentage of the initial aggregate Pool Balance as of the cut-off date exceeds the applicable amount set forth
below:
o November 2009 to October 2010: 3.00%.
o November 2010 to October 2011: 3.00% with respect to November 2010, plus an additional 1/12th of
1.00% for each month through October 2011.
o November 2011 to October 2012: 4.00% with respect to November 2011, plus an additional 1/12th of
1.00% for each month through October 2012.
o November 2012 to October 2013: 5.00% with respect to November 2012, plus an additional 1/12th of
0.25% for each month through October 2013.
o November 2013 and thereafter: 5.25%.
Trust Agreement: The trust agreement dated as of the Closing Date, between the Owner Trustee and the
Depositor.
Trust Estate: The meaning specified in the Granting Clause of the Indenture.
Trust Indenture Act or TIA: The Trust Indenture Act of 1939, as amended from time to time, as in effect
on any relevant date.
UCC: The Uniform Commercial Code, as in effect from time to time, as in effect in any specified
jurisdiction.
Unpaid Principal Amount: As defined in Section 3.05(a) of the Indenture.
Uncertificated Accrued Interest: With respect to any REMIC I Regular Interest for any Payment Date, one
month's interest at the related REMIC I Remittance Rate for such Payment Date, accrued on the Uncertificated
Principal Balance immediately prior to such Payment Date. With respect to any REMIC II Regular Interest for any
Payment Date, one month's interest at the related REMIC II Remittance Rate for such Payment Date, accrued on the
Uncertificated Principal Balance immediately prior to such Payment Date. Uncertificated Accrued Interest for the
REMIC I and REMIC II Regular Interests shall accrue on the basis of a 360-day year consisting of twelve 30-day
months. For purposes of calculating the amount of Uncertificated Accrued Interest for the REMIC I Regular
Interests for any Payment Date, any Prepayment Interest Shortfalls or Relief Act Shortfalls for such Payment Date
shall be allocated among the REMIC I Regular Interests pro rata based on, and to the extent of, the
Uncertificated Accrued Interest thereon, as calculated without the application of this sentence. For purposes of
calculating the amount of Uncertificated Accrued Interest for the REMIC II Regular Interests for any Payment
Date, any Prepayment Interest Shortfalls or Relief Act Shortfalls for such Payment Date shall be allocated among
the REMIC II Regular Interests pro rata based on, and to the extent of, the Uncertificated Accrued Interest
thereon, as calculated without the application of this sentence. With respect to any Payment Date and REMIC III
Regular Interest SB-IO, one month's interest at the related Certificate Rate on the Notional Amount thereof
reduced by its pro-rata share of any Prepayment Interest Shortfalls or Relief Act Shortfalls, but not reduced by
amounts distributable pursuant to clauses (x) through (xvii) of Section 3.05(a) of the Indenture.
Uncertificated Principal Balance: With respect to any Payment Date and any REMIC I Regular Interest,
the initial Uncertificated Principal Balance thereof as reduced on each successive Payment Date first by
Liquidation Loss Amounts allocated to the principal thereof by the definition of REMIC I Liquidation Loss Amounts
and second by principal deemed distributed in respect thereof on such Payment Date pursuant to Section 5.01(e) of
the Trust Agreement. With respect to any Payment Date and any REMIC II Regular Interest, the initial
Uncertificated Principal Balance thereof as reduced on each successive Payment Date first by Liquidation Loss
Amounts allocated to the principal thereof by the definition of REMIC II Liquidation Loss Amounts and second by
principal deemed distributed in respect thereof on such Payment Date pursuant to Section 5.01(e) of the Trust
Agreement. With respect to any Payment Date and REMIC III Regular Interest SB-PO, the Initial Certificate
Balance reduced by the allocation to the principal thereof on prior Payment Dates of Liquidation Loss Amounts, to
the extent such Liquidation Loss Amounts are allocated to the principal of the Class SB Certificates, and amounts
deemed distributed with respect to such REMIC III Regular Interest.
WG Trust 2003: Walnut Grove Mortgage Loan Trust 2003-A, a Delaware statutory trust.
