EXECUTION COPY
GMACM HOME EQUITY LOAN TRUST 2006-HE1,
Issuer,
and
JPMORGAN CHASE BANK, NATIONAL ASSOCIATION,
Indenture Trustee
________________________
INDENTURE
________________________
Dated as of March 30, 2006
GMACM HOME EQUITY LOAN-BACKED TERM NOTES
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.
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................................................3
Section 2.01 Form..............................................................3
Section 2.02 Execution, Authentication and Delivery............................3
ARTICLE III Covenants.................................................................4
Section 3.01 Collection of Payments with Respect to the Mortgage Loans.........4
Section 3.02 Maintenance of Office or Agency...................................4
Section 3.03 Money for Payments to Be Held in Trust; Paying Agent..............4
Section 3.04 Existence.........................................................6
Section 3.05 Priority of Distributions; Defaulted Interest.....................6
Section 3.06 Protection of Trust Estate........................................9
Section 3.07 Opinions as to Trust Estate.......................................9
Section 3.08 Performance of Obligations; Servicing Agreement..................10
Section 3.09 Negative Covenants...............................................10
Section 3.10 Annual Statement as to Compliance................................11
Section 3.11 Recordation of Assignments.......................................11
Section 3.12 Representations and Warranties Concerning the Mortgage Loans.....11
Section 3.13 Assignee of Record of the Mortgage Loans.........................11
Section 3.14 Servicer as Agent and Bailee of the Indenture Trustee............12
Section 3.15 Investment Company Act...........................................12
Section 3.16 Issuer May Consolidate, etc......................................12
Section 3.17 Successor or Transferee..........................................14
Section 3.18 No Other Business................................................14
Section 3.19 No Borrowing.....................................................14
Section 3.20 Guarantees, Loans, Advances and Other Liabilities................14
Section 3.21 Capital Expenditures.............................................14
Section 3.22 Owner Trustee Not Liable for Certificates or Related
Documents........................................................14
Section 3.23 Restricted Payments..............................................15
Section 3.24 Notice of Events of Default......................................15
Section 3.25 Further Instruments and Acts.....................................15
Section 3.26 Statements to Noteholders........................................15
Section 3.27 Determination of Note Rate.......................................16
Section 3.28 Payments under the Policy........................................16
Section 3.29 Replacement/Additional Enhancement...............................16
Section 3.30 Additional Representations of Issuer.............................17
ARTICLE IV The Notes; Satisfaction And Discharge Of Indenture.......................18
Section 4.01 The Notes........................................................18
Section 4.02 Registration of and Limitations on Transfer and Exchange of
Notes; Appointment of Certificate Registrar......................18
Section 4.03 Mutilated, Destroyed, Lost or Stolen Notes.......................19
Section 4.04 Persons Deemed Owners............................................20
Section 4.05 Cancellation.....................................................20
Section 4.06 Book-Entry Notes.................................................21
Section 4.07 Notices to Depository............................................21
Section 4.08 Definitive Notes.................................................22
Section 4.09 Tax Treatment....................................................22
Section 4.10 Satisfaction and Discharge of Indenture..........................22
Section 4.11 Application of Trust Money.......................................23
Section 4.12 Subrogation and Cooperation......................................23
Section 4.13 Repayment of Monies Held by Paying Agent.........................24
Section 4.14 Temporary Notes..................................................24
ARTICLE V Default And Remedies.....................................................25
Section 5.01 Events of Default................................................25
Section 5.02 Acceleration of Maturity; Rescission and Annulment...............25
Section 5.03 Collection of Indebtedness and Suits for Enforcement by
Indenture Trustee................................................26
Section 5.04 Remedies; Priorities.............................................28
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...................................31
Section 5.10 Delay or Omission Not a Waiver...................................31
Section 5.11 Control by Enhancer or Noteholders...............................31
Section 5.12 Waiver of Past Defaults..........................................32
Section 5.13 Undertaking for Costs............................................32
Section 5.14 Waiver of Stay or Extension Laws.................................33
Section 5.15 Sale of Trust Estate.............................................33
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......................................37
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.......................................39
Section 6.08 Replacement of Indenture Trustee.................................40
Section 6.09 Successor Indenture Trustee by Xxxxxx............................41
Section 6.10 Appointment of Co-Indenture Trustee or Separate Indenture
Trustee..........................................................41
Section 6.11 Eligibility; Disqualification....................................42
Section 6.12 Preferential Collection of Claims Against Issuer.................43
Section 6.13 Representations and Warranties...................................43
Section 6.14 Directions to Indenture Trustee..................................43
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.......44
Section 7.03 Reports by Issuer................................................44
Section 7.04 Reports by Indenture Trustee.....................................45
Section 7.05 Exchange Act Reporting...........................................45
ARTICLE VIII Accounts, Disbursements and Releases.....................................45
Section 8.01 Collection of Money..............................................45
Section 8.02 Trust Accounts...................................................46
Section 8.03 Officer's Certificate............................................46
Section 8.04 Termination Upon Distribution to Noteholders.....................47
Section 8.05 Release of Trust Estate..........................................47
Section 8.06 Surrender of Notes Upon Final Payment............................47
ARTICLE IX Supplemental Indentures..................................................47
Section 9.01 Supplemental Indentures Without Consent of Noteholders...........47
Section 9.02 Supplemental Indentures With Consent of Noteholders..............49
Section 9.03 Execution of Supplemental Indentures.............................50
Section 9.04 Effect of Supplemental Indenture.................................50
Section 9.05 Conformity with Trust Indenture Act..............................51
Section 9.06 Reference in Notes to Supplemental Indentures....................51
ARTICLE X Miscellaneous............................................................51
Section 10.01 Compliance Certificates and Opinions, etc........................51
Section 10.02 Form of Documents Delivered to Indenture Trustee.................53
Section 10.03 Acts of Noteholders..............................................54
Section 10.04 Notices, etc., to Indenture Trustee, Issuer, Enhancer and
Rating Agencies..................................................54
Section 10.05 Notices to Noteholders; Waiver...................................55
Section 10.06 Alternate Payment and Notice Provisions..........................55
Section 10.07 Conflict with Trust Indenture Act................................56
Section 10.08 Effect of Headings...............................................56
Section 10.09 Successors and Assigns...........................................56
Section 10.10 Severability.....................................................56
Section 10.11 Benefits of Indenture............................................56
Section 10.12 Legal Holidays...................................................56
Section 10.13 GOVERNING LAW....................................................56
Section 10.14 Counterparts.....................................................57
Section 10.15 Recording of Indenture...........................................57
Section 10.16 Issuer Obligation................................................57
Section 10.17 No Petition......................................................57
Section 10.18 Inspection.......................................................57
EXHIBITS
Exhibit A......-......Form of Notes
Exhibit B......-......Form of 144A Investment Representation
Exhibit C......-......Form of Advance Request
Exhibit D......-......Form of Investor Representation Letter
Exhibit E......-......Form of Transferor Letter
Appendix A.....-......Definitions
This Indenture, dated as of March 30, 2006, is between GMACM Home Equity Loan Trust
2006-HE1, a Delaware statutory trust, as issuer (the "Issuer"), and JPMorgan Chase Bank,
National Association., 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 2006-HE1 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 and the Enhancer, 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 Initial Mortgage Loans and any Subsequent Mortgage Loans (together
with the Cut-Off Date Principal Balances and any Additional Balances arising thereafter to
and including the date immediately preceding the commencement of the Rapid Amortization
Period), and all monies due or to become due thereunder; (b) the Custodial Account, Note
Payment Account, Pre-Funding Account, Capitalized Interest Account and Funding Account, and
all funds on deposit or credited thereto from time to time; (c) the Policy and all hazard
insurance policies; and (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 foregoing Grant shall inure to the benefit of the Enhancer in respect of draws
made on the Policy and amounts owing from time to time pursuant to the Insurance Agreement
(regardless of whether such amounts relate to the Notes or the Certificates), and such Grant
shall continue in full force and effect for the benefit of the Enhancer until all such
amounts owing to it have been repaid in full.
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 Notes, together with the Indenture Trustee's certificate of
authentication, shall be in substantially the form set forth in Exhibit A, 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 Notes set forth in Exhibit A 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 Note Balance.
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 and the Enhancer 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 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, any optional advance of delinquent principal or interest on
the Mortgage Loans made by the Servicer in respect of the related Collection Period, any
Policy Draw Amount deposited into the Note Payment Account (to be applied solely with
respect to the payment of amounts described in clauses (i) and (vi) under this
Section 3.05(a)), and any amounts transferred to the Note Payment Account or Funding Account
from the Pre-Funding Account, Capitalized Interest Account or Funding Account pursuant to
Sections 3.16, 3.17, 3.18 and 3.19 of the Servicing Agreement, is as follows:
(i) from Interest Collections, to the Enhancer, the amount of the
premium for the Policy and any unpaid premium for the Policy from prior Payment
Dates, with interest thereon as provided in the Insurance Agreement;
(ii) from Interest Collections, any Capitalized Interest Requirement
pursuant to Section 3.19(b) of the Servicing Agreement and any Policy Draw Amount
with respect to the Notes deposited into the Note Payment Account on such Payment
Date pursuant to Section 3.28(a)(ii), to the Note Payment Account, for payment by the
Paying Agent to the Noteholders, interest for the related Interest Period at the
related Note Rate on the related Note Balance immediately prior to such Payment Date,
excluding any Relief Act Shortfalls allocated thereto pursuant to Section 3.05(f),
plus any such amount remaining unpaid from prior Payment Dates;
(iii) from Net Principal Collections, to the extent not paid pursuant
to clause (ii) above, to the Note Payment Account, for payment by the Paying Agent to
the Noteholders, interest for the related Interest Period at the related Note Rate on
the related Note Balance immediately prior to such Payment Date, excluding any Relief
Act Shortfalls allocated thereto pursuant to Section 3.05(f), plus any such amount
remaining unpaid from prior Payment Dates;
(iv) during the Revolving Period, to the Funding Account, Principal
Collections to the extent not previously applied to purchase Additional Balances or
Subsequent Mortgage Loans that are HELOCs;
(v) at the request of the holders of the Certificates, from Excess
Spread, to the Distribution Account, for distribution to the holders of the
Certificates, an amount equal to the Additional Balance Increase Amount;
(vi) to the Enhancer, to reimburse it for prior draws made on the
Policy, with interest thereon as provided in the Insurance Agreement;
(vii) during the Amortization Periods, to the Note Payment Account,
the Principal Distribution Amount for payment to the holders of the notes;
(viii) from Excess Spread during the Revolving Period, as a deposit to
the Funding Account, the amount necessary to be applied on that payment date so that
the Overcollateralization Amount is not less than the Overcollateralization Target
Amount;
(ix) from any remaining Excess Spread during the Amortization
Periods, to the Note Payment Account, the amount necessary to be applied on such
Payment Date for payment by the Paying Agent to the Noteholders, so that the
Overcollateralization Amount, after giving effect to the application of funds
pursuant to clause (viii) above, is not less than the Overcollateralization Target
Amount;
(x) from any remaining Excess Spread during the Amortization
Periods, to the Note Payment Account, any Liquidation Loss Amounts not otherwise
covered by payments pursuant to clauses (viii) or (ix) above on such Payment Date or
prior Payment Dates, for payment by the Paying Agent to the Noteholders;
(xi) to the Enhancer, any amounts owed to the Enhancer pursuant to
the Insurance Agreement other than amounts specified in clauses (i) or (vi) above;
(xii) to the Note Payment Account from the remaining Excess Spread,
for payment by the Paying Agent to the Noteholders, any Interest Shortfalls on the
Notes for such Payment Date and for any Payment Date not previously paid;
(xiii) during the Amortization Periods, to the Indenture Trustee, any
amounts owing to the Indenture Trustee pursuant to Section 6.07 to the extent
remaining unpaid; and
(xiv) 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;
provided, that on the Final Payment Date, the amount that is required to be paid pursuant to
clause (vi) above shall be equal to the Note Balance immediately prior to such Payment Date
and shall include any amount on deposit in the Note Payment Account on such Payment Date in
accordance with Section 3.28(a)(iii).
For purposes of the foregoing, the Note Balance on each Payment Date during the
Amortization Periods will be reduced (any such reduction, an "Unpaid Principal Amount") by
all Liquidation Loss Amounts for such Payment Date, but only to the extent that such
Liquidation Loss Amounts are not otherwise covered by payments made pursuant to clauses
(viii), (ix) or (x) above, or by a draw on the Policy, and the Overcollateralization Amount
is zero.
(b) 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 the actual number of days in each Interest Period and
a 360-day year. 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.
(c) 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 Exhibits A. All principal payments on
the Notes shall be made in accordance with the priorities set forth in Sections 3.05(a),
3.05(b) and 3.05(c) 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 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).
(d) 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 Initial 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 or the Enhancer.
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, (ii) the benefit of the representations and warranties made by WG Trust
2003 in Section 3.1(d) of the Purchase Agreement and (iii) the benefit of the
representations and warranties made by GMACM or WG Trust 2003, as applicable, in Section 2
of any Subsequent Transfer 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 Enhancer shall have consented thereto and each Rating
Agency shall have notified the Issuer that such transaction will not cause a Rating
Event, without taking into account the Policy;
(iv) the Issuer shall have received an Opinion of Counsel (and shall
have delivered copies thereof to the Indenture Trustee and the Enhancer) to the
effect that such transaction will not have any material adverse tax consequence to
the Issuer, any Noteholder or any Certificateholder;
(v) any action that is necessary to maintain the lien and security
interest created by this Indenture shall have been taken; and
(vi) 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 Enhancer shall have consented thereto, and each Rating
Agency shall have notified the Issuer that such transaction will not cause a Rating
Event, if determined without regard to the Policy;
(iv) 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;
(v) any action that is necessary to maintain the lien and security
interest created by this Indenture shall have been taken; and
(vi) 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, the Enhancer 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, with a copy to the
Enhancer, 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 the Enhancer, 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.xxxxxxxx.xxx/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 Determination of Note Rate. On the second LIBOR Business Day
immediately preceding (i) the Closing Date in the case of the first Interest Period and (ii)
the first day of each succeeding Interest Period, the Indenture Trustee shall determine
LIBOR and the applicable Note Rate for such Interest Period and shall inform the Issuer, the
Servicer and the Depositor by means of the Indenture Trustee's online service.
Section 3.28 Payments under the Policy.
(a)(i) If the Servicing Certificate specifies a Policy Draw Amount for any
Payment Date, the Indenture Trustee shall make a draw on the Policy in an amount specified
in the Servicing Certificate for such Payment Date or, if no amount is specified, the
Indenture Trustee shall make a draw on the Policy in the amount by which the amount on
deposit in the Note Payment Account is less than interest due on the Notes on such Payment
Date.
(ii) The Indenture Trustee shall deposit or cause to be deposited such Policy
Draw Amount into the Note Payment Account on such Payment Date to the extent such amount
relates to clause (a) of the definition of "Deficiency Amount" or clause (b) of the
definition of "Insured Amount".
(iii) To the extent such amount relates to clause (b) of the definition of
"Deficiency Amount", the Indenture Trustee shall (i) during the Revolving Period, deposit
such amount into the Funding Account as Principal Collections and (ii) during the
Amortization Periods, deposit such amount into the Note Payment Account.
(b)The Indenture Trustee shall submit, if a Policy Draw Amount is specified
in any statement to Securityholders prepared pursuant to Section 4.01 of the Servicing
Agreement, the Notice (in the form attached as Exhibit A to the Policy) to the Enhancer no
later than 12:00 noon, New York City time, on the second (2nd) Business Day prior to the
applicable Payment Date.
Section 3.29 Replacement/Additional Enhancement. The Issuer (or the Servicer on its
behalf) may, at its expense, in accordance with and upon satisfaction of the conditions set
forth herein, but shall not be required to, obtain a surety bond, letter of credit, guaranty
or reserve account as a Permitted Investment for amounts on deposit in the Capitalized
Interest Account, or may arrange for any other form of additional credit enhancement;
provided, that after prior notice thereto, no Rating Agency shall have informed the Issuer
that a Rating Event would occur as a result thereof (without taking the Policy into
account); and provided further, that the issuer of any such instrument or facility and the
timing and mechanism for drawing on such additional enhancement shall be acceptable to the
Indenture Trustee and the Enhancer. It shall be a condition to procurement of any such
additional credit enhancement that there be delivered to the Indenture Trustee and the
Enhancer (a) an Opinion of Counsel, acceptable in form to the Indenture Trustee and the
Enhancer, from counsel to the provider of such additional credit enhancement with respect to
the enforceability thereof and such other matters as the Indenture Trustee or the Enhancer
may require and (b) an Opinion of Counsel to the effect that the procurement of such
additional enhancement would not (i) adversely affect in any material respect the tax status
of the Notes or the Certificates or (ii) cause the Issuer to be taxable as an association
(or a publicly traded partnership) for federal income tax purposes or to be classified as a
taxable mortgage pool within the meaning of Section 7701(i) of the Code.
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.
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 Term 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 of
Notes 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 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 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;
(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 and the
Enhancer 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 Subrogation and Cooperation. The Issuer and the Indenture Trustee
acknowledge that (i) to the extent the Enhancer makes payments under the Policy on account
of principal of or interest on the Notes, the Enhancer will be fully subrogated to the
rights the Noteholders to receive such principal and interest, and (ii) the Enhancer shall
be paid such principal and interest only from the sources and in the manner provided herein
and in the Insurance Agreement for the payment of such principal and interest.
The Indenture Trustee shall cooperate in all respects with any reasonable request by
the Enhancer for action to preserve or enforce the Enhancer's rights or interest under this
Indenture or the Insurance Agreement, consistent with this Indenture and without limiting
the rights of the Noteholders as otherwise set forth in the Indenture, including upon the
occurrence and continuance of a default under the Insurance Agreement, a request (which
request shall be in writing) to take any one or more of the following actions:
(i) institute Proceedings for the collection of all amounts then
payable on the Notes or under this Indenture in respect to the Notes and all amounts
payable under the Insurance Agreement and to enforce any judgment obtained and
collect from the Issuer monies adjudged due;
(ii) sell the Trust Estate or any portion thereof or rights or
interest therein, at one or more public or private Sales (as defined in Section 5.15
hereof) called and conducted in any manner permitted by law;
(iii) file or record all assignments that have not previously been
recorded;
(iv) institute Proceedings from time to time for the complete or
partial foreclosure of this Indenture; and
(v) 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
Enhancer hereunder.
Following the payment in full of the Notes, the Enhancer shall continue to have all
rights and privileges provided to it under this Section and in all other provisions of this
Indenture, until all amounts owing to the Enhancer have been paid in full.
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
and the Enhancer, 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 Enhancer or the Noteholders of Notes representing not less
than a majority of the aggregate Note Balance of the Notes, with the written consent of the
Enhancer (so long as no Enhancer Default exists), 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
Enhancer or the Noteholders of Notes representing a majority of the aggregate Note Balance
of the Notes, with the written consent of the Enhancer, 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, with the written
consent of the Enhancer may, or, at the written direction of the Enhancer, 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 Enhancer (or if an Enhancer Default has occurred and is continuing, 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 and to reimburse the Enhancer
for any amounts drawn under the Policy and any other amounts due the Enhancer under the
Insurance Agreement 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 of the Enhancer (or if an Enhancer Default has
occurred and is continuing, and 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 and to draw amounts payable under the Policy in accordance with
its terms.
(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 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, but excluding any Interest
Shortfalls;
THIRD: to the Noteholders 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 Notes have been reduced to zero;
FOURTH:to the payment of all amounts due and owing the Enhancer under the
Insurance Agreement;
FIFTH: to the Noteholders for amounts due and unpaid on the related Notes for
Interest Shortfalls, if any, including any unpaid Interest Shortfalls on the
Notes for any prior Payment Date, ratably, without preference or priority of
any kind, according to such amounts due and payable from amounts available in
the Trust Estate for such Noteholders;
SIXTH: 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 (but shall at the written direction of the Enhancer), 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 including payment to the Enhancer,
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 or by the Enhancer.
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, the Enhancer 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, the Enhancer 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 Enhancer or Noteholders. The Enhancer (so long as no
Enhancer Default exists) or the Noteholders of a majority of the aggregate Note Balance of
Notes with the consent of the Enhancer, 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 Enhancer (so long as
no Enhancer Default exists) or by the Noteholders of Notes representing not less than 100%
of the aggregate Note Balance of the Notes with the consent of the Enhancer;
(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 the Enhancer or 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 Enhancer (so long as no
Enhancer Default exists) or the Noteholders of not less than a majority of the aggregate
Note Balance of the Notes, with the consent of the Enhancer, 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 Enhancer direct(s) the Indenture Trustee in writing to make
such Sale in accordance with the provisions of Section 5.04,
(ii) the proceeds of such Sale would be not less than the entire
amount that would be payable to the Noteholders under the Notes, the
Certificateholders under the Certificates and the Enhancer in respect of amounts
drawn under the Policy and any other amounts due the Enhancer under the Insurance
Agreement, in full payment thereof in accordance with Section 5.02, on the Payment
Date next succeeding the date of such Sale, or
(iii) 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), and the Enhancer
consents to such Sale.
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 and the Enhancer 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 and, with the consent of the
Enhancer, 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 and amounts owing to the
Enhancer 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 Enhancer or the Indenture
Trustee (with the written consent of the Enhancer), the Issuer, in its capacity as owner of
the Mortgage Loans, shall, with the written consent of the Enhancer, 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, subject to the rights of the Enhancer
under the Servicing Agreement, 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 or any direction from the Enhancer that the
Enhancer is entitled to give under any of the Basic Documents.
(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)With respect to each Payment Date, on the Business Day following the
related Determination Date, the Indenture Trustee shall forward or cause to be forwarded by
mail, or other mutually agreed-upon method, to the Enhancer and the Servicer, a statement
setting forth, to the extent applicable, (i) during the Pre-Funding Period, the Pre-Funded
Amount as of such Determination Date and any transfers of funds in connection therewith, and (ii)
during the Revolving Period, the amount of Principal Collections to be deposited into the
Funding Account in respect of such Determination Date, and the amount anticipated to be on
deposit in the Funding Account as of such Payment Date, after giving effect to any amounts
so deposited therein.
(i)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.
(j)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.
(k)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 Enhancer or 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
Enhancer or the Noteholders, pursuant to the provisions of this Indenture, unless the
Enhancer or 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, then the Indenture Trustee shall give prompt notice thereof to the Enhancer. 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 and
the Enhancer. The Enhancer or the Noteholders of a majority of the aggregate Note Balance
of the Notes may remove the Indenture Trustee by so notifying the Indenture Trustee and the
Enhancer (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 with the consent of the Enhancer, 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 TIAss.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 TIAss.310(b); provided, however, that
there shall be excluded from the operation of TIAss.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 TIAss.310(b)(1) are met.
Section 6.12 Preferential Collection of Claims Against Issuer. The Indenture
Trustee shall comply with TIAss.311(a), excluding any creditor relationship listed in TIAss.
311(b). An Indenture Trustee that has resigned or been removed shall be subject to TIAss.
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 and the Enhancer;
(b)to authenticate and deliver the Notes substantially in the form prescribed
by Exhibit A 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 and the Enhancer 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 TIAss. 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 TIAss. 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 TIAss. 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 TIAss.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 TIAss.313(c) and to the Enhancer a brief report
dated as of such date that complies with TIAss.313(a). The Indenture Trustee also shall
comply with TIAss.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, and the
Enhancer, 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 Enhancer and 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 and the distribution to the Credit Enhancer of all
amounts owing to it; 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, (ii) all sums due the Indenture Trustee pursuant to this Indenture have been
paid and (iii) all sums due the Enhancer have been paid and the Policy has been returned to
the Credit Enhancer, 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 and a letter from the Enhancer stating that the Enhancer has no
objection to such request from the Issuer.
(d)The Indenture Trustee shall, at the request of the Issuer or the
Depositor, surrender the Policy to the Enhancer for cancellation, upon final payment of
principal of and interest on the Notes.
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 and the prior written consent of the Enhancer (which consent shall
not be unreasonably withheld and so long as no Enhancer Default exists), 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 the Enhancer, 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 or the Enhancer (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.
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 and the Enhancer, 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 the Enhancer 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 Enhancer and 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.
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 and to the Enhancer (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, 2006, 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, Enhancer 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 JPMorgan Chase Bank,
National Association, 000 X. Xxxxxx Xxxxxx, Xxxxxxx, Xxxxxxxx 00000. 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 2006-HE1, 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
(c)the Enhancer by the Issuer, the Indenture Trustee or by any Noteholders
shall be sufficient for every purpose hereunder to in writing and mailed, first-class
postage pre-paid, or personally delivered or telecopied to: Financial Guaranty Insurance
Company, 000 Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: Structured Finance
Surveillance (GMACM Home Equity Loan Trust 2006-HE1), telecopier number (000) 000-0000. The
Enhancer shall promptly transmit any notice received by it from the Issuer, the Indenture
Trustee or the Noteholders to the Issuer or Indenture Trustee, as the case may be.
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 XXXxx.xx. 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, the Enhancer, 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. The
Enhancer shall be a third party beneficiary of 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.
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 2006-HE1, as Issuer
By: WILMINGTON TRUST COMPANY, not in its
individual capacity but solely as Owner
Trustee
By:
Name:
Title:
JPMORGAN CHASE BANK, NATIONAL ASSOCIATION., as
Indenture Trustee
By:
Name:
Title:
JPMORGAN CHASE BANK, NATIONAL ASSOCIATION
hereby accepts the 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 March, 2006, 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 March, 2006, 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 JPMorgan Chase Bank, National Association, 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 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 SELLERS, THE DEPOSITOR, THE SERVICER, THE
INDENTURE TRUSTEE, THE OWNER TRUSTEE OR GMAC MORTGAGE GROUP, INC. OR ANY OF THEIR RESPECTIVE AFFILIATES,
EXCEPT AS EXPRESSLY PROVIDED IN THE INDENTURE OR THE OTHER BASIC DOCUMENTS.
GMACM HOME EQUITY LOAN TRUST 2006-HE1
GMACM Home Equity Loan-Backed Note, Class A
Registered Initial Note Balance:
$_________
No. A-__ Note Rate: Variable
CUSIP NO. _________
GMACM Home Equity Loan Trust 2006-HE1, a statutory trust duly organized and existing under the laws of
the State of Delaware (herein referred to as the "Issuer"), for value received, hereby promises to pay to
Cede & Co. or its registered assigns, the principal sum of __________________dollars ($_________), 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 March 30, 2006 (the "Indenture"), between the Issuer
and Xxxxx Fargo Bank, N.A., as indenture trustee (the "Indenture Trustee"); provided, however, provided
however, the entire unpaid principal amount of this Note shall be due and payable on the Payment Date
occurring in November 2036, 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
Interest Period subject to limitations that may result in Interest Shortfalls (as further described in the
Indenture). 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 the actual number of days 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.
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 Notes, Series 2006-HE1 (the "Series 2006-HE1 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 2006-HE1 Notes. The Series 2006-HE1 Notes are subject to all terms of the Indenture.
The Series 2006-HE1 Notes (the "Notes") are and will be equally and ratably secured by the collateral
pledged as security therefor as provided in the Indenture.
This Note is entitled to the benefits of an irrevocable and unconditional financial guaranty insurance
policy issued by Financial Guaranty Insurance Company.
Principal of and interest on this Note will be payable on each Payment Date, commencing on April 25,
2006, 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.
Unless an Early Amortization Event (as defined in the Indenture) shall have occurred and be
continuing, it is expected that the entire unpaid principal amount of this Note shall be due and payable on
the related Targeted Final Payment Date in accordance with the terms of the Indenture, to the extent not
previously paid on a prior Payment Date. Notwithstanding the foregoing, the entire unpaid principal amount
of this Note shall be due and payable in full on the Payment Date in August 2035 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, the Enhancer or the Noteholders of
Notes representing not less than a majority of the aggregate Note Balance of the Notes, with the consent of
the Enhancer, 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 Sellers,
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 2006-HE1 Notes under the Indenture at any time by the Issuer and the Indenture
Trustee with the consent of the Enhancer 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 2006-HE1 Notes, on behalf of the Noteholders of all Series 2006-HE1 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 2006-HE1 Notes issued thereunder but with prior
notice to the Rating Agencies and the Enhancer.
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, JPMorgan Chase Bank, National Association. 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 a draw on the Policy would not
occur as a result of such purchase and provided further 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), plus any amounts due and owing to the Enhancer under the Insurance Agreement related to the
Mortgage Loans or the Notes (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 2006-HE1
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.
JPMorgan Chase Bank, National Association.,
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 RULE 144A INVESTMENT REPRESENTATION
Description of Rule 144A Securities, including numbers:
_______________________________________________
_______________________________________________
_______________________________________________
_______________________________________________
The undersigned buyer (the "Buyer"), intends to acquire the Rule 144A Securities described above from
the seller (the "Seller").
1. In connection with such transfer and in accordance with the agreements pursuant to which the
Rule 144A Securities were issued, the Seller hereby certifies the following facts: Neither the Seller nor
anyone acting on its behalf has offered, transferred, pledged, sold or otherwise disposed of the Rule 144A
Securities, any interest in the Rule 144A Securities or any other similar security to, or solicited any offer
to buy or accept a transfer, pledge or other disposition of the Rule 144A Securities, any interest in the
Rule 144A Securities or any other similar security form, or otherwise approached or negotiated with respect
to the Rule 144A Securities, any interest in the Rule 144A Securities or any other similar security with, any
person in any manner, or made any general solicitation by means of general advertising or in any other
manner, or taken any other action, that would constitute a public offering of the Rule 144A Securities under
the Securities Act of 1933, as amended (the "1933 Act"), or that would render the disposition of the Rule
144A Securities a violation of Section 5 of the 1933 Act or require registration pursuant thereto, and that
the Seller has not offered the Rule 144A Securities to any person other than the Buyer or another "qualified
institutional buyer" as defined in Rule 144A under the 1933 Act.
2. The Buyer warrants and represents to, and covenants with, the Indenture Trustee and the Issuer
(as defined in the indenture dated as of March 30, 2006 (the "Indenture"), between GMACM Home Equity Loan
Trust 2006-HE1, as Issuer, and Xxxxx Fargo Bank, N.A., as Indenture Trustee, pursuant to Section 4.02 of the
Indenture, as follows:
a. The Buyer understands that the Rule 144A Securities have not been registered under the
1933 Act or the securities laws of any state.
b. The Buyer considers itself a substantial, sophisticated institutional investor having
such knowledge and experience in financial and business matters that it is capable of evaluating the
merits and risks of investment in the Rule 144A Securities.
c. The Buyer has been furnished with all information regarding the Rule 144A Securities
that it has requested from the Seller, the Indenture Trustee, the Owner Trustee or the Servicer.
d. Neither the Buyer nor anyone acting on its behalf has offered, transferred, pledged,
sold or otherwise disposed of the Rule 144A Securities, any interest in the Rule 144A Securities or
any other similar security to, or solicited any offer to buy or accept a transfer, pledge or other
disposition of the Rule 144A Securities, any interest in the Rule 144A Securities or any other similar
security from, or otherwise approached or negotiated with respect to the Rule 144A Securities, any
interest in the Rule 144A Securities or any other similar security with, any person in any manner, or
made any general solicitation by means of general advertising or in any other manner, or taken any
other action, that would constitute a public offering of the Rule 144A Securities under the 1933 Act
or that would render the disposition of the Rule 144A Securities a violation of Section 5 of the 1933
Act or require registration pursuant thereto, nor will it act, nor has it authorized or will it
authorize any person to act, in such manner with respect to the Rule 144A Securities.
e. The Buyer is a "qualified institutional buyer" as that term is defined in Rule 144A
under the 1933 Act and has completed either of the forms of certification to that effect attached
hereto as Annex 1 or Annex 2. The Buyer is aware that the sale to it is being made in reliance on
Rule 144A. The Buyer is acquiring the Rule 144A Securities for its own account or the accounts of
other qualified institutional buyers, understands that such Rule 144A Securities may be resold,
pledged or transferred only (i) to a person reasonably believed to be a qualified institutional buyer
that purchases for its own account or for the account of a qualified institutional buyer to whom
notice is given that the resale, pledge or transfer is being made in reliance on Rule 144A, or (ii)
pursuant to another exemption from registration under the 1933 Act.
3. This document may be executed in one or more counterparts and by the different parties hereto
on separate counterparts, each of which, when so executed, shall be deemed to be an original; such
counterparts, together, shall constitute one and the same document.
IN WITNESS WHEREOF, the Buyer has executed this document as of the date set forth below.
Print Name of Buyer
By:
Name:
Title:
Taxpayer Identification:
No.
Date:
ANNEX 1 TO EXHIBIT B
QUALIFIED INSTITUTIONAL BUYER STATUS UNDER SEC RULE 144A
[For Buyers Other Than Registered Investment Companies]
The undersigned hereby certifies as follows in connection with the Rule 144A Investment Representation
to which this Certification is attached:
1. As indicated below, the undersigned is the President, Chief Financial Officer, Senior Vice
President or other executive officer of the Buyer.
2. In connection with purchases by the Buyer, the Buyer is a "qualified institutional buyer" as
that term is defined in Rule 144A under the Securities Act of 1933, as amended ("Rule 144A") because (i) the
Buyer owned and/or invested on a discretionary basis $______________________** in securities (except for the
excluded securities referred to below) as of the end of the Buyer's most recent fiscal year (such amount
being calculated in accordance with Rule 144A) and (ii) the Buyer satisfies the criteria in the category
marked below.
___ Corporation, etc. The Buyer is a corporation (other than a bank, savings and loan association
or similar institution), Massachusetts or similar statutory trust, partnership, or charitable
organization described in Section 501(c)(3) of the Internal Revenue Code.
___ Bank. The Buyer (a) is a national bank or banking institution organized under the laws of any
State, territory or the District of Columbia, the business of which is substantially confined
to banking and is supervised by the State or territorial banking commission or similar official
or is a foreign bank or equivalent institution, and (b) has an audited net worth of at least
$25,000,000 as demonstrated in its latest annual financial statements, a copy of which is
attached hereto.
_____________
** Buyer must own and/or invest on a discretionary basis at least $100,000,000 in securities unless Buyer is
a dealer, and, in that case, Buyer must own and/or invest on a discretionary basis at least $10,000,000 in
securities.
___ Savings and Loan. The Buyer (a) is a savings and loan association, building and loan
association, cooperative bank, homestead association or similar institution, which is
supervised and examined by a State or Federal authority having supervision over any such
institutions or is a foreign savings and loan association or equivalent institution and (b) has
an audited net worth of at least $25,000,000 as demonstrated in its latest annual financial
statements.
___ Broker-Dealer. The Buyer is a dealer registered pursuant to Section 15 of the Securities
Exchange Act of 1934, as amended.
___ Insurance Company. The Buyer is an insurance company whose primary and predominant business
activity is the writing of insurance or the reinsuring of risks underwritten by insurance
companies and which is subject to supervision by the insurance commissioner or a similar
official or agency of a state or territory or the District of Columbia.
___ State or Local Plan. The Buyer is a plan established and maintained by a state, its political
subdivisions, or any agency or instrumentality of the state or its political subdivisions, for
the benefit of its employees.
___ ERISA Plan. The Buyer is an employee benefit plan within the meaning of Title I of the
Employee Retirement Income Security Act of 1974, as amended.
___ Investment Adviser. The Buyer is an investment adviser registered under the Investment
Advisers Act of 1940, as amended.
___ SBIC. The Buyer is a Small Business Investment Company licensed by the U.S. Small Business
Administration under Section 301(c) or (d) of the Small Business Investment Act of 1958, as
amended.
___ Business Development Company. The Buyer is a business development company as defined in
Section 202(a)(22) of the Investment Advisers Act of 1940, as amended.
___ Trust Fund. The Buyer is a trust fund whose trustee is a bank or trust company and whose
participants are exclusively (a) plans established and maintained by a State, its political
subdivisions, or any agency or instrumentality of the State or its political subdivisions, for
the benefit of its employees, or (b) employee benefit plans within the meaning of Title I of
the Employee Retirement Income Security Act of 1974, but is not a trust fund that includes as
participants individual retirement accounts or H.R. 10 plans.
3. The term "securities" as used herein does not include (i) securities of issuers that are
Affiliated with the Buyer, (ii) securities that are part of an unsold allotment to or subscription by the
Buyer, if the Buyer is a dealer, (iii) bank deposit notes and certificates of deposit, (iv) loan
participations, (v) repurchase agreements, (vi) securities owned but subject to a repurchase agreement and
(vii) currency, interest rate and commodity swaps.
4. For purposes of determining the aggregate amount of securities owned and/or invested on a
discretionary basis by the Buyer, the Buyer used the cost of such securities to the Buyer and did not include
any of the securities referred to in the preceding paragraph. Further, in determining such aggregate amount,
the Buyer may have included securities owned by subsidiaries of the Buyer, but only if such subsidiaries are
consolidated with the Buyer in its financial statements prepared in accordance with generally accepted
accounting principles and if the investments of such subsidiaries are managed under the Buyer's direction.
However, such securities were not included if the Buyer is a majority-owned, consolidated subsidiary of
another enterprise and the Buyer is not itself a reporting company under the Securities Exchange Act of 1934,
as amended.
5. The Buyer acknowledges that it is familiar with Rule 144A and understands that the seller to it
and other parties related to the Rule 144A Securities are relying and will continue to rely on the
statements made herein because one or more sales to the Buyer may be in reliance on Rule 144A.
___ ___ Will the Buyer be purchasing the Rule 144A
Yes No Securities only for the Buyer's own account?
6. If the answer to the foregoing question is "no", the Buyer agrees that, in connection with any
purchase of securities sold to the Buyer for the account of a third party (including any separate account) in
reliance on Rule 144A, the Buyer will only purchase for the account of a third party that at the time is a
"qualified institutional buyer" within the meaning of Rule 144A. In addition, the Buyer agrees that the Buyer
will not purchase securities for a third party unless the Buyer has obtained a current representation letter
from such third party or taken other appropriate steps contemplated by Rule 144A to conclude that such third
party independently meets the definition of "qualified institutional buyer" set forth in Rule 144A.
7. The Buyer will notify each of the parties to which this certification is made of any changes in
the information and conclusions herein. Until such notice is given, the Buyer's purchase of Rule 144A
Securities will constitute a reaffirmation of this certification as of the date of such purchase.
Print Name of Buyer
By:
Name:
Title:
Date:
ANNEX 2 TO EXHIBIT B
QUALIFIED INSTITUTIONAL BUYER STATUS UNDER SEC RULE 144A
[For Buyers That Are Registered Investment Companies]
The undersigned hereby certifies as follows in connection with the Rule 144A Investment Representation
to which this certification is attached:
1. As indicated below, the undersigned is the President, Chief Financial Officer or Senior
Vice President of the Buyer or, if the Buyer is a "qualified institutional buyer" as that term is defined in
Rule 144A under the Securities Act of 1933 ("Rule 144A") because Buyer is part of a Family of Investment
Companies (as defined below), is such an officer of the Adviser (as defined below).
2. In connection with purchases by Buyer, the Buyer is a "qualified institutional buyer"
as defined in SEC Rule 144A because (i) the Buyer is an investment company registered under the Investment
Company Act of 1940, and (ii) as marked below, the Buyer alone, or the Buyer's Family of Investment
Companies, owned at least $100,000,000 in securities (other than the excluded securities referred to below)
as of the end of the Buyer's most recent fiscal year. For purposes of determining the amount of securities
owned by the Buyer or the Buyer's Family of Investment Companies, the cost of such securities was used.
____ The Buyer owned $________________ in securities (other than the excluded securities referred to below)
as of the end of the Buyer's most recent fiscal year (such amount being calculated in accordance with
Rule 144A).
____ The Buyer is part of a Family of Investment Companies which owned in the aggregate $______________ in
securities (other than the excluded securities referred to below) as of the end of the Buyer's most
recent fiscal year (such amount being calculated in accordance with Rule 144A).
3. The term "Family of Investment Companies" as used herein means two or more registered
investment companies (or series thereof) that have the same investment adviser or investment advisers (each,
an "Adviser") that are affiliated (by virtue of being majority owned subsidiaries of the same parent or
because one investment adviser is a majority owned subsidiary of the other).
4. The term "securities" as used herein does not include (i) securities of issuers that
are affiliated with the Buyer or are part of the Buyer's Family of Investment Companies, (ii) bank deposit
notes and certificates of deposit, (iii) loan participations, (iv) repurchase agreements, (v) securities
owned but subject to a repurchase agreement and (vi) currency, interest rate and commodity swaps.
5. The Buyer is familiar with Rule 144A and understands that each of the parties to which
this certification is made are relying and will continue to rely on the statements made herein because one or
more sales to the Buyer will be in reliance on Rule 144A. In addition, the Buyer will only purchase for the
Buyer's own account.
6. The undersigned will notify each of the parties to which this certification is made of
any changes in the information and conclusions herein. Until such notice, the Buyer's purchase of Rule 144A
Securities will constitute a reaffirmation of this certification by the undersigned as of the date of such
purchase.
Print Name of Buyer
By:
Name:
Title:
IF AN ADVISER:
Print Name of Buyer
Date:
EXHIBIT C
FORM OF INVESTOR REPRESENTATION LETTER
_______________ , 20__
Re: GMACM HOME EQUITY LOAN TRUST 2006-HE1
GMACM Home Equity Loan-Backed Variable Pay Revolving Note
Ladies and Gentlemen:
[__________________] (the "Purchaser") intends to purchase from [_________] (the "Seller")
$[_______] Variable Pay Revolving Notes, GMACM Home Equity Loan Trust 2006-HE1 (the "Notes"), issued pursuant
to the Indenture (the "Indenture"), dated as of March 30, 2006 between GMACM Home Equity Loan Trust
2006-HE1, as Issuer, and JPMorgan Chase Bank, National Association, as Indenture Trustee (the "Indenture
Trustee"). All terms used herein and not otherwise defined shall have the meanings set forth in the
Indenture. The Purchaser hereby certifies, represents and warrants to, and covenants with, the Issuer and
the Indenture Trustee that:
1. The Purchaser understands that (a) the Notes have not been and will not be registered
or qualified under the Securities Act of 1933, as amended (the "Act") or any state securities law, (b)
the Depositor is not required to so register or qualify the Notes, (c) the Notes may be resold only if
registered and qualified pursuant to the provisions of the Act or any state securities law, or if an
exemption from such registration and qualification is available, (d) the Indenture contains
restrictions regarding the transfer of the Notes and (e) the Notes will bear a legend to the foregoing
effect.
2. The Purchaser is acquiring the Notes for its own account for investment only and not
with a view to or for sale in connection with any distribution thereof in any manner that would
violate the Act or any applicable state securities laws.
3. The Purchaser is (a) a substantial, sophisticated institutional investor having such
knowledge and experience in financial and business matters, and, in particular, in such matters
related to securities similar to the Notes, such that it is capable of evaluating the merits and risks
of investment in the Notes, (b) able to bear the economic risks of such an investment and (c) an
"accredited investor" within the meaning of Rule 501(a) promulgated pursuant to the Act.
4. The Purchaser has been furnished with, and has had an opportunity to review (a) a copy
of the Indenture and (b) such other information concerning the Notes, the Mortgage Loans and the
Depositor as has been requested by the Purchaser from the Depositor or the Seller and is relevant to
the Purchaser's decision to purchase the Notes. The Purchaser has had any questions arising from such
review answered by the Depositor or the Seller to the satisfaction of the Purchaser.
5. The Purchaser has not and will not nor has it authorized or will it authorize any
person to (a) offer, pledge, sell, dispose of or otherwise transfer any Note, any interest in any Note
or any other similar security to any person in any manner, (b) solicit any offer to buy or to accept a
pledge, disposition of other transfer of any Note, any interest in any Note or any other similar
security from any person in any manner, (c) otherwise approach or negotiate with respect to any Note,
any interest in any Note or any other similar security with any person in any manner, (d) make any
general solicitation by means of general advertising or in any other manner or (e) take any other
action, that (as to any of (a) through (e) above) would constitute a public offering of any Note under
the Act, that would render the disposition of any Note a violation of Section 5 of the Act or any
state securities law, or that would require registration or qualification pursuant thereto. The
Purchaser will not sell or otherwise transfer any of the Notes, except in compliance with the
provisions of the Indenture.
6. The Purchaser will comply with all applicable federal and state securities laws, and
with the terms of the Indenture, in connection with any subsequent resale of the Notes by the
Purchaser.
Very truly yours,
By: _______________
Name:
Title:
EXHIBIT D
FORM OF TRANSFEROR CERTIFICATE
_______________ , 20__
Re: GMACM HOME EQUITY LOAN TRUST 2006-HE1
GMACM Home Equity Loan-Backed Variable Pay Revolving Note
Ladies and Gentlemen:
This letter is delivered to you in connection with the transfer by
[___________________________] (the "Seller") to [___________________] (the "Purchaser") of $[_______]
Variable Pay Revolving Notes, GMACM Home Equity Loan Trust 2006-HE1 (the "Notes"), issued pursuant to the
Indenture (the "Indenture"), dated as of March 30, 2006 between GMACM Home Equity Loan Trust 2006-HE1, as
Issuer, and JPMorgan Chase Bank, National Association, as Indenture Trustee (the "Indenture Trustee"). All
terms used herein and not otherwise defined shall have the meanings set forth in the Indenture. The Seller
hereby certifies, represents and warrants to, and covenants with, the Issuer and the Indenture Trustee that:
Neither the Seller nor anyone acting on its behalf has (a) offered, pledged, sold, disposed of
or otherwise transferred any Note, any interest in any Note or any other similar security to any person in
any manner, (b) has solicited any offer to buy or to accept a pledge, disposition or other transfer of any
Note, any interest in any Note or any other similar security from any person in any manner, (c) has otherwise
approached or negotiated with respect to any Note, any interest in any Note or any other similar security
with any person in any manner, (d) has made any general solicitation by means of general advertising or in
any other manner, or (e) has taken any other action, that (as to any of (a) through (e) above) would
constitute a distribution of the Notes under the Securities Act of 1933 (the "Act"), that would render the
disposition of any Note a violation of Section 5 of the Act or any state securities law, or that would
require registration or qualification pursuant thereto. The Seller will not act, in any manner set forth in
the foregoing sentence with respect to any Note. The Seller has not and will not sell or otherwise transfer
any of the Notes, except in compliance with the provisions of the Indenture.
Very truly yours,
(Seller)
By: ___________________________
Name:
Title:
APPENDIX A
DEFINITIONS
Addition Notice: With respect to the transfer of Subsequent Mortgage Loans to the
Issuer by a Seller pursuant to Section 2.2 of the Purchase Agreement (in substantially the
form set forth in Exhibit 3 to such agreement), a notice given by the respective Seller to
the Rating Agencies, the Indenture Trustee, the Enhancer and the Owner Trustee, which shall
be given not later than seven Business Days prior to the related Subsequent Transfer Date,
of (i) the Seller's designation of Subsequent Mortgage Loans to be sold to the Issuer and
(ii) the aggregate principal balance as of the Subsequent Cut-Off Date of such Subsequent
Mortgage Loans.
Additional Balance: With respect to any Mortgage Loan, any future Draw made by the
related Mortgagor pursuant to the related Mortgage Note after the Cut-Off Date or Subsequent
Cut-Off Date, together with all money due or to become due in respect of such Draw;
provided, however, that any Draw during the Rapid Amortization Period shall be an Excluded
Amount, shall not be acquired by the Trust and shall not be an Additional Balance.
Additional Balance Increase Amount: Shall mean (a) the excess, if any, of (i) the
aggregate principal amount of Additional Balances conveyed to the Trust Estate, over
(ii) Principal Collections and Excess Spread applied to purchase those Additional Balances
from the Funding Account and/or the Custodial Account minus (b) amounts paid on previous
Payment Dates to the holders of the Certificates as an Additional Balance Increase Amount.
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.
Amortization Periods: Collectively, the Managed Amortization Period and the Rapid
Amortization Period.
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 later of the
application for the Mortgage Loan secured by such Mortgaged Property or any subsequent
increase or decrease in the related Credit Limit, or to reduce or eliminate the amount of
any primary mortgage insurance, 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
Insurance Agreement, the Policy, the Servicing Agreement, the Custodial Agreement, any
Subsequent Transfer 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.
Capitalized Interest Account: The account established and maintained pursuant to
Section 3.19 of the Servicing Agreement.
Capitalized Interest Requirement: With respect to each Payment Date during the
Pre-Funding Period and on the Payment Date immediately after the end of the Pre-Funding
Period, the excess, if any of (i) the sum of (A) the amount of interest that would accrue at
the Net WAC Rate for the related Interest Period on the amount on deposit in the Pre-Funding
Account as of the close of business on the preceding Payment Date (or as of the Closing
Date, in the case of the first Payment Date) and (B) the amount of any fees paid to the
Enhancer for the Policy, over (ii) the amount of reinvestment earnings since the preceding
Payment Date (or the Closing Date, in the case of the first Payment Date) in the Pre-Funding
Account.
Certificate Balance: The excess, if any, of the Principal Balance of the Mortgage
Loans over the aggregate outstanding principal balance of the Notes.
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 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: The Certificates issued pursuant to the Trust Agreement.
Closing Date: March 30, 2006.
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) with respect to each HELOC, the Credit Limit,
and with respect to each HEL, 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 or subordinate 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 2006-HE1. 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.
Credit Limit: With respect to any HELOC, the maximum Principal Balance permitted
under the terms of the related Mortgage Note.
Credit Limit Increase: As defined in Section 3.01 of the Servicing Agreement.
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 Enhancer and the Servicer.
Cut-Off Date: March 1, 2006.
Cut-Off Date Principal Balance: With respect to any Initial Mortgage Loan or
Subsequent 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 or Subsequent
Cut-Off Date, as the case may be.
Default: Any occurrence which is or with notice or the lapse of time or both would
become an Event of Default.
Deficiency Amount: As defined in the Policy.
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.
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.
Draw: With respect to any HELOC, a borrowing by the related Mortgagor under the
related Mortgage Note.
Draw Period: With respect to each HELOC, the period consisting of either the first
five, ten or fifteen years after the date of origination of such HELOC, during which the
related Mortgagor is permitted to make Draws.
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 in a
depository institution in which such accounts are fully insured to the limits established by
the FDIC, provided that any deposits not so insured shall, to the extent acceptable to each
Rating Agency, as evidenced in writing, be maintained such that (as evidenced by an Opinion
of Counsel delivered to the Indenture Trustee and each Rating Agency) the Indenture Trustee
have a claim with respect to the funds in such account or a perfected first security
interest against any collateral (which shall be limited to Permitted Investments) securing
such funds that is superior to claims of any other depositors or creditors of the depository
institution with which such account is maintained, or (iii) 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-1+ 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, or (iv) 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 (v) 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 (if
determined without regard to the Policy).
Eligible Substitute Loan: A Mortgage Loan substituted by either 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) and, with
respect to each HELOC, a Credit Limit not in excess of $900,000; (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, Net Loan Rate and Gross Margin no lower than and not more than 1% per annum
higher than the Loan Rate, Net Loan Rate and Gross Margin, 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.
Enhancer: Financial Guaranty Insurance Company, or any successor thereto.
Enhancer Default: Any failure by the Enhancer to make a payment required under the
Policy in accordance with its terms.
Enhancer Optional Deposit: Amounts deposited by or on behalf of the Enhancer in the
Note Payment Account, other than Insured Amounts, to be applied to the Notes.
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 or the Enhancer, 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 Enhancer or 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 and without taking into account any
Insured Amount, if any, paid by the Enhancer under the Policy for such Payment Date, the
excess, if any, of (i) Interest Collections for the related Collection Period over (ii) the
sum of (x) the sum of (A) the premium allocable to such Payment Date and (B) any unpaid
premium for the Policy, with interest thereon as provided in the Insurance Agreement 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.
Excess Spread Test: As to any Payment Date, a test that will be satisfied if the
product of (x) (i) the amount of Excess Spread (reduced by the aggregate Liquidation Loss
Amounts with respect to such Payment Date) on such Payment Date divided by (ii) the Pool
Balance as of the beginning of the related Collection Period and (y) 12, expressed as a
percentage, is greater than or equal to 2.00%.
Excluded Amount: For any Payment Date during the Rapid Amortization Period, all
Draws made to an obligor under any Mortgage Loan during the Rapid Amortization Period which
shall not be transferred to the Trust Estate, and the portion of the Principal Collections
and Interest Collections for each Collection Period allocated to such Excluded Amount based
on a pro rata allocation between the related Excluded Amount and the Principal Balance of
such Mortgage Loan in proportion to the respective amounts outstanding as of the end of the
calendar month preceding such Collection Period.
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 November 2036.
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 4.04(b) of the Servicing Agreement.
Freddie Mac: Freddie Mac, formerly the Federal Home Loan Mortgage Corporation, or
any successor thereto.
Funding Account: The account established and maintained pursuant to Section 3.16 of
the Servicing Agreement.
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.
Gross Margin: With respect to any Mortgage Loan, the percentage set forth as the
"Margin" for such Mortgage Loan on the Mortgage Loan Schedule.
GMAC: General Motors Acceptance Corporation, and its successors and assigns.
GMACM: GMAC Mortgage Corporation, and its successors and assigns.
HELOCs: Any adjustable rate home equity revolving lines of credit initially
transferred by the Depositor to the Issuer on the Closing Date or any Subsequent Transfer
Date, which are listed on the Mortgage Loan Schedule on such date.
HELs: Any closed-end, fixed-rate, first or second lien home equity loans initially
transferred by the Depositor to the Issuer on the Closing Date or any Subsequent Transfer
Date, which are listed on the Mortgage Loan Schedule on such 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: JPMorgan Chase Bank, National Association, 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 Sellers, 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 Sellers, the Depositor or any Affiliate of any of the foregoing Persons and (iii) is not
connected with the Issuer, any such other obligor, the Sellers, 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.
Index: With respect to any Mortgage Loan, the prime rate from time to time for the
adjustment of the Loan Rate set forth as such on the related Mortgage Note.
Initial Note Balance: $1,274,156,000.
Initial Certificate Balance: $7,690,716.53.
Initial HELOCs: The HELOCs initially transferred by the Depositor to the Issuer on
the Closing Date, which are listed on the Mortgage Loan Schedule on such date.
Initial HELs: The HELs initially transferred by the Depositor to the Issuer on the
Closing Date, which are listed on the Mortgage Loan Schedule on such date.
Initial Mortgage Loans: Collectively, the Initial HELOCs and the Initial HELs.
Initial Pool Balance: The sum of (a) the aggregate Principal Balances of the Initial
Mortgage Loans as of the Cut-off Date and (b) the Original Pre-Funded Amount.
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 Agreement: The Insurance and Indemnity Agreement dated as of the Closing
Date, among the Servicer, the Sellers, the Depositor, the Issuer, the Indenture Trustee and
the Enhancer, including any amendments and supplements thereto.
Insurance Proceeds: Proceeds paid by any insurer (other than the Enhancer) 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.
Insured Amount: As defined in the Policy.
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 Insurance Proceeds, Net Liquidation Proceeds and Repurchase
Prices as is allocable to interest on the applicable Mortgage Loan) as is paid by the
Sellers 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,
exclusive of the pro rata portion thereof attributable to any Excluded Amounts, 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 Coverage Amount: The amount to be paid from proceeds from the sale of the
Notes for deposit into the Capitalized Interest Account pursuant to Section 3.19 of the
Servicing Agreement on the Closing Date, which amount initially shall be $2,386,852.00, and
thereafter, shall be the amount computed in accordance with Section 3.19 of the Servicing
Agreement.
Interest Period: With respect to the Notes and any Payment Date (other than the first
Payment Date), the period beginning on the preceding Payment Date and ending on the day
preceding such Payment Date, and in the case of the first Payment Date, the period beginning
on the Closing Date and ending on the day preceding the first Payment Date.
Interest Rate Adjustment Date: With respect to each Mortgage Loan, the date or dates
on which the Loan Rate is adjusted in accordance with the related Mortgage Note.
Interest Shortfall: (I) With respect to the Notes and any Payment Date, the sum of:
(A) an amount of interest on the Notes calculated at a rate equal to the excess of
(i) LIBOR plus the related margin over (ii) the Net WAC Rate, plus
(B) interest on such amount calculated at a rate equal to the related Note Rate.
Interest Shortfalls will not be included as interest payments on the Notes for such
Payment Date and such amount will accrue interest at the related Note Rate (as adjusted from
time to time) and will be paid on future Payment Dates only to the extent funds are
available therefor as set forth in Section 3.05(a) of the Indenture.
Issuer or Trust: The GMACM Home Equity Loan Trust 2006-HE1, 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.
LIBOR: As to any Interest Period, (a) for any Interest Period other than the first
Interest Period, the rate for United States dollar deposits for one month that appears on
the Telerate Screen Page 3750 as of 11:00 a.m., London, England time, on the second LIBOR
Business Day prior to the first day of that Interest Period or (b) with respect to the first
Interest Period, the rate for United States dollar deposits for one month that appears on
the Telerate Screen Page 3750 as of 11:00 a.m., London, England time, two LIBOR Business
Days prior to the Closing Date. If such rate does not appear on such page (or other page as
may replace that page on that service, or if such service is no longer offered, such other
service for displaying LIBOR or comparable rates as may be reasonably selected by the
Indenture Trustee after consultation with the Servicer), the rate will be the Reference Bank
Rate. If no Reference Bank Rate is available, LIBOR will be LIBOR applicable to the
preceding Payment Date.
LIBOR Business Day: Any day other than (i) a Saturday or a Sunday or (ii) a day on
which banking institutions in the city of London, England are required or authorized by law
to be closed.
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 Proceeds: Proceeds (including Insurance Proceeds but not including
amounts drawn under the Policy) 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.
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).
Managed Amortization Event: The event deemed to occur on any date on which the
amount on deposit in the Funding Account equals or exceeds $10,000,000.
Managed Amortization Period: The period beginning on the first day following the end
of the related Revolving Period and ending on the earlier of (i) the Payment Date occurring
in March 2011 and (ii) the occurrence of a Rapid Amortization Event.
Maximum Loan Rate: With respect to each HELOC, the maximum loan rate thereon
specified in the related Mortgage Note.
MERS: Mortgage Electronic Registration Systems, Inc., a corporation organized and
existing under the laws of the State of Delaware, or any successor thereto.
MERS(R)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(R)System.
Minimum Monthly Payment: With respect to any HELOC and any month, the minimum amount
required to be paid by the related Mortgagor in such month.
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.
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(R)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(R)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 "JPMorgan Chase Bank, as Indenture Trustee
under that certain Indenture dated as of March 30, 2006, for GMACM Home Equity Loan Trust
2006-HE1, 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(R)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(R)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 Initial Mortgage Loans as of the
Cut-Off Date set forth in Exhibit A of the Servicing Agreement, and as of each Subsequent
Cut-Off Date, any Subsequent Mortgage Loans, which schedule sets forth as to each Mortgage
Loan (i) the Cut-Off Date Principal Balance, (ii) with respect to each HELOC, the Credit
Limit and Gross Margin, (iii) with respect to each HELOC, the Maximum Loan Rate, if any,
(iv) the loan number and (v) the lien position of the related Mortgage.
Mortgage Loans: At any time, all Initial Mortgage Loans and Subsequent Mortgage
Loans, including, with respect to the HELOCS, Additional Balances, if any, that have been
sold to the Issuer pursuant to, in the case of Initial Mortgage Loans, the Trust Agreement,
or, in the case of Subsequent Mortgage Loans, a Subsequent Transfer 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 each HEL, 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 and with respect to each HELOC, the credit line
agreement, pursuant to which the related Mortgagor 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 net of Liquidation Expenses minus the pro rata portion of such amount that is
attributable to any Excluded Amount (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 and, beginning on the thirteenth Payment Date and thereafter, 0.50%
(50 basis points), adjusted to an effective rate reflecting the methods by which interest is
calculated on the Notes during such Interest Period.
Net Principal Collections: With respect to any Payment Date, the excess, if any, of
Principal Collections for such Payment Date over the aggregate amount of Additional Balances
created during the related Collection Period, conveyed to the Issuer.
Net WAC Rate: With respect to any Payment Date, (i) a per annum rate equal to the
weighted average of the Net Loan Rates of the Mortgage Loans as of the first day of the
month preceding the month in which such Payment Date occurs, and weighted on the basis of
the respective Principal Balances of such Mortgage Loans as of the first day of the related
Collection Period, minus (ii) the premium rate on the Policy multiplied by a fraction, the
numerator of which is the sum of the Note Balances and the denominator of which is the Pool
Balance.
Net Worth: As of any date of determination, the net worth of GMACM and its
consolidated subsidiaries, as determined in accordance with GAAP.
Note Balance: With respect to any Payment Date and the Notes, the Initial Note
Balance reduced by all payments of principal 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 the Notes, a floating rate equal to the lesser of
(i) LIBOR plus 0.21% per annum (or, for any Interest Period commencing after the second
Payment Date on which the aggregate Note Balance of the Notes is less than 10% of the Note
Balance as of the Closing Date, LIBOR plus 0.315% per annum) and (ii) 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: The Class A GMACM Home Equity Loan-Backed Term Notes, Series 2006-HE1, in
substantially the form set forth in Exhibit A to the Indenture.
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.
Original Pre-Funded Amount: The amount deposited from the proceeds of the sale of
the Securities into the Pre-Funding Account on the Closing Date, which amount is
$320,461,679.
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;
provided, however, that for purposes of effectuating the Enhancer's right of subrogation as
set forth in Section 4.12 of the Indenture only, all Notes that have been paid with funds
provided under the Policy shall be deemed to be Outstanding until the Enhancer has been
reimbursed with respect thereto.
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,
plus amounts on deposit in the Pre-Funding Account and the Funding Account (excluding any
investment earnings thereon) exceeds (b) the aggregate Note Balance of the Notes.
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 2.70% 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) 5.40% of the Pool Balance as of the last day of the related Collection
Period and (ii) 0.50% of the initial Pool Balance; provided, however, upon the occurrence
of a Servicing Trigger Event, the Overcollateralization Target Amount shall be no less than
the Overcollateralization Target Amount as of the previous Payment Date. The
Overcollateralization Target Amount may be reduced from time to time with the consent of the
Enhancer and 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 2006-HE1, 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, and which are acceptable
to the Enhancer, 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.
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.
Policy: The Financial Guaranty Insurance Policy 06030037, dated as of the Closing
Date, issued by the Enhancer.
Policy Draw Amount: With respect to any Payment Date, the Insured Amount.
Pool Balance: With respect to any date, the aggregate Principal Balance of all
Mortgage Loans as of such date plus, during the Pre-Funding Period, the Pre-Funded Amount.
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.
Pre-Funded Amount: With respect to any date of determination during the Pre-Funding
Period, the amount on deposit in the Pre-Funding Account.
Pre-Funding Account: The account established and maintained pursuant to Section 3.18
of the Servicing Agreement.
Pre-Funding Period: The period commencing on the Closing Date until the earliest of
(i) the date on which the amount on deposit in the Pre-Funding Account is less than
$100,000, (ii) June 26, 2006 or (iii) the occurrence of a Servicing Default.
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, plus (i) any
Additional Balances in respect of such Mortgage Loan conveyed to the Trust, minus (ii) all
collections credited as principal in respect of any such Mortgage Loan in accordance with
the related Mortgage Note (except any such collections that are allocable to any Excluded
Amount) 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, the aggregate of the
following amounts:
(i) the total amount of payments made by or on behalf of the related Mortgagor,
received and applied as payments of principal on such Mortgage Loan during the related
Collection Period, as reported by the Servicer or the related Subservicer;
(ii) any Liquidation Proceeds allocable as a recovery of principal received in
connection with such Mortgage Loan during the related Collection Period and any Recovery
Amounts;
(iii) if such Mortgage Loan was repurchased by a Seller pursuant to the Purchase
Agreement during the related Collection Period, 100% of the Principal Balance thereof as of
the date of such purchase and if any Eligible Substitute Loan is substituted for a Deleted
Loan, the Substitution Adjustment Amount;
(iv) any other amounts received as payments on or proceeds of such Mortgage Loan
during the Collection Period, to the extent applied in reduction of the Principal Balance
thereof; and
(v) on the Payment Date immediately following the end of the Pre-Funding Period,
any amount transferred from the Pre-Funding Account to the Note Payment Account in
accordance with Section 3.18 of the Servicing Agreement;
provided, that Principal Collections shall be reduced by any amounts withdrawn from the
Custodial Account pursuant to clauses (c), (g), (h), (j) and (k) of Section 3.03 of the
Servicing Agreement, and shall not include any portion of such amounts attributable to any
Excluded Amount in respect of any Mortgage Loan that are allocable to principal of such
Mortgage Loan and not otherwise excluded from the amounts specified in (i) through (iv)
above.
Principal Distribution Amount: For any Payment Date (i) during the Revolving Period,
the amount, if any, transferred from the Pre-Funding Account to the Note Payment Account
pursuant to Section 3.18(b) of the Servicing Agreement, and the amount, if any, transferred
from the Funding Account to the Note Payment Amount pursuant to Section 3.16(c)(ii) of the
Servicing Agreement, (ii) during the Managed Amortization Period, Net Principal Collections
for the Mortgage Loans, (iii) during the Rapid Amortization Period, Principal Collections
for the Mortgage Loans, and (iv) on any Payment Date, from the Excess Spread, to the extent
available or, to the extent not available, from a draw on the Policy (but only to the extent
the Overcollateralization Amount is zero), an amount equal to the aggregate of the
Liquidation Loss Amounts, if any, for such Payment Date less, in each case, an amount equal
to the 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 Sellers, 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.
Rapid Amortization Event: Any one of the following events:
(a) the failure on the part of a Seller (i) to make any payment or deposit required to be
made under the Purchase Agreement within five Business Days after the date such payment or
deposit is required to be made; or (ii) to observe or perform in any material respect any
other covenants or agreements of the Seller set forth in the Purchase Agreement, which
failure continues unremedied for a period of 60 days after written notice and such failure
materially and adversely affects the interests of the Securityholders or the Enhancer;
provided, however, that a Rapid Amortization Event shall not be deemed to have occurred if
such Seller has repurchased or caused to be repurchased or substituted for the affected
Mortgage Loan during such period (or within an additional 60 days with the consent of the
Indenture Trustee and the Enhancer) in accordance with the provisions of the Indenture;
(b) if any representation or warranty made by a Seller in the Purchase Agreement proves
to have been incorrect in any material respect when made and which continues to be incorrect
in any material respect for a period of 45 days with respect to any representation or
warranty of the Seller made in Section 3.1(a) or 3.1(d)(I), as applicable, of the Purchase
Agreement or 90 days with respect to any representation or warranty made in Section 3.1(b)
or 3.1(d)(II), as applicable, of the Purchase Agreement after written notice and as a result
of which the interests of the Securityholders or the Enhancer are materially and adversely
affected; provided, however, that a Rapid Amortization Event shall not be deemed to have
occurred if the Seller has repurchased or caused to be repurchased or substituted for the
affected Mortgage Loan during such period (or within an additional 60 days with the consent
of the Indenture Trustee and the Enhancer) in accordance with the provisions of the
Indenture;
(c) the entry against a Seller 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;
(d) either Seller 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 Seller or the Issuer or of or relating to all or substantially all of
its property; or the Seller or the Issuer 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;
(e) the Issuer shall become subject to regulation by the Commission as an investment
company within the meaning of the Investment Company Act of 1940, as amended;
(f) a Servicing Default shall occur and be unremedied under the Servicing Agreement and a
qualified successor Servicer shall not have been appointed;
(g) the occurrence of a draw on the Policy and the failure by the Servicer to reimburse
the Enhancer for any amount owed to the Enhancer pursuant to the Insurance Agreement on
account of the draw, which failure continues unremedied for a period of 90 days after
written notice to the Servicer;
(h) the Issuer (or a portion thereof) is determined to be a taxable mortgage pool or an
association (or a publicly-traded partnership) taxable as a corporation or a taxable
mortgage pool for federal income tax purposes; or
(i) an event of default under the Insurance Agreement (except for a default by the
Enhancer, unless such Enhancer cannot be replaced without additional expense).
In the case of any event described in (a), (b), (f), (g) or (i), a Rapid Amortization
Event shall be deemed to have occurred only if, after any applicable grace period described
in such clauses, any of the Indenture Trustee, the Enhancer or, with the consent of the
Enhancer (so long as no Enhancer Default exists), Securityholders evidencing not less than
51% of the aggregate Securities Balance, by written notice to the Sellers, the Servicer, the
Depositor and the Owner Trustee (and to the Indenture Trustee, if given by the Enhancer or
the Securityholders), declare that a Rapid Amortization Event has occurred as of the date of
such notice. In the case of any event described in clauses (c), (d), (e) or (h), a Rapid
Amortization Event shall be deemed to have occurred without any notice or other action on
the part of the Indenture Trustee, the Securityholders or the Enhancer immediately upon the
occurrence of such event; provided, that any Rapid Amortization Event may be waived and
deemed of no effect with the written consent of the Enhancer and each Rating Agency, subject
to the satisfaction of any conditions to such waiver.
Rapid Amortization Period: The period beginning on the earlier of (i) the first day
following the end of the Managed Amortization Period and (ii) the occurrence of a Rapid
Amortization Event, and ending upon the termination of the Issuer.
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 the Notes and any Payment Date, unless Notes are no
longer held in book-entry form, the close of business on the Business Day immediately
preceding such Payment Date and if the Notes are no longer held in book-entry form, the last
Business Day of the calendar month preceding the month of such Payment 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.
Reference Bank Rate: With respect to any Interest Period, as follows: the arithmetic
mean (rounded upwards, if necessary, to the nearest one sixteenth of one percent) of the
offered rates for United States dollar deposits for one month which are offered by the
Reference Banks as of 11:00 a.m., London, England time, on the second LIBOR Business Day
prior to the first day of such Interest Period to prime banks in the London interbank market
in amounts approximately equal to the sum of the outstanding Note Balance of the Notes;
provided, that at least two Reference Banks provide such rate. If fewer than two such rates
are provided, the Reference Bank Rate will be the arithmetic mean of the rates quoted by one
or more major banks in New York City, selected by the Indenture Trustee after consultation
with the Servicer and the Enhancer, as of 11:00 a.m., New York time, on such date for loans
in U.S. Dollars to leading European banks for a period of one month in amounts approximately
equal to the aggregate Note Balance of the Notes. If no quotations can be obtained, the
Reference Bank Rate will be the Reference Bank Rate applicable to the preceding Interest
Period.
Reference Banks: Shall mean three major banks in the London interbank market
selected by the Indenture Trustee after consultation with the Servicer.
Regulation AB: Subpart 229.1100 - Asset Backed Securities (Regulation AB), 17 C.F.R.
ss.ss.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, formerly known as the Soldiers' and Sailors' Civil Relief Act of 1940, 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.
Repurchase Event: With respect to any Mortgage Loan, either (i) a discovery that, as
of the Closing Date with respect to an Initial Mortgage Loan or the related Subsequent
Transfer Date with respect to any Subsequent Mortgage Loan, 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 either 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 Fund with
respect to such Mortgage Loan in connection with a breach of Section 3.1(b)(x) of the
Purchase Agreement. No portion of any Repurchase Price shall be included in any Excluded
Amount for any Payment Date during the Rapid Amortization Period.
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.
Revolving Period: The period beginning on the Closing Date and ending on the earliest
of (i) the Payment Date occurring in September 2007, (ii) the occurrence of a Managed
Amortization Event and (iii) the occurrence of a Rapid Amortization Event.
Rolling Six-Month Annualized Liquidation Loss Amounts: With respect to any
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.
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 or Sellers: GMAC Mortgage Corporation, a Pennsylvania corporation, and its
successors and assigns, and Walnut Grove Mortgage Loan Trust 2003-A, a Delaware statutory
trust, and its successors and assigns.
Servicer: GMAC Mortgage Corporation, a Pennsylvania corporation, 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 Funding 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, or to the Servicer, the Issuer and the
Indenture Trustee by the Enhancer;
(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 or the Enhancer, 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, or to the Servicer, the Issuer and the Indenture Trustee by the Enhancer;
(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) a Rapid Amortization Event occurs on account of the circumstances specified in clause
(g) of the definition of Rapid Amortization Event, which event continues beyond the 90 day
grace period set forth in such clause (g);
(vi) 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
(vii) 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 (with a copy to the
Enhancer) by the Servicer, as such list may be amended from time to time.
Servicing Termination Event: As of any Payment Date, the occurrence of any of the
following scenarios:
(a) the Rolling Three Month Delinquency Percentage is greater than 4.00% for the
then-current Payment Date; or
(b) on or after the Payment Date in October 2008, the aggregate amount of
Liquidation Loss Amounts on the Mortgage Loans as a percentage of the Cut-Off Date Prinicpal
Balance exceeds the applicable amount set forth below:
October 2008 to March 2009: 2.00% with respect to October 2008, plus
an additional 1/6th of 0.50% for each
month thereafter.
April 2009 to March 2010: 2.50% with respect to April 2009, plus an
additional 1/12th of 0.60% for each
month thereafter.
April 2010 to March 2011: 3.10% with respect to April 2010, plus an
additional 1/12th of 1.00% for each
month thereafter.
April 2011 and thereafter: 4.10%.
Servicing Trigger Event: As of any Payment Date, the occurrence of any of the
following scenarios:
(a) the Rolling Three Month Delinquency Percentage is greater than 3.50% for the
then-current Payment Date;
(b) on or after the Payment Date in October 2008, the aggregate amount of
Liquidation Loss Amounts on the Mortgage Loans as a percentage of the Cut-Off Date Principal
Balance exceeds the applicable amount set forth below:
October 2008 to March 2009: 1.50% with respect to October 2008, plus
an additional 1/6th of 0.50% for each
month thereafter;
April 2009 to March 2010: 2.00% with respect to April 2009, plus an
additional 1/12th of 0.60% for each
month thereafter;
April 2010 to March 2011: 2.60% with respect to April 2010, plus an
additional 1/12th of 1.00% for each
month thereafter; and
April 2011 and thereafter: 3.60%; or
(c) on any Payment Date, the Excess Spread Test is not met.
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
ss.ss.3801 et seq., as the same may be amended from time to time.
Stepdown Date: The later of (i) the Payment Date in October 2008 and (ii) the
Payment Date on which the Pool Balance plus amounts on deposit in the Funding Account (after
applying payments received in the related Collection Period) as of such Payment Date is less
than 50% of the Initial Pool Balance.
Subsequent Cut-Off Date: With respect to any Subsequent Mortgage Loan, the date
specified in the related Subsequent Transfer Agreement.
Subsequent Cut-Off Date Principal Balance: With respect to any Subsequent Mortgage
Loan, the Principal Balance thereof as of the close of business on the last day of the
Collection Period immediately prior to the related Subsequent Cut-Off Date.
Subsequent Mortgage Loan: An adjustable rate home equity revolving line of credit
sold by a Seller to the Issuer pursuant to Section 2.2 of the Purchase Agreement, such
Mortgage Loan being identified on the Mortgage Loan Schedule attached to the related
Subsequent Transfer Agreement, as set forth in such Subsequent Transfer Agreement.
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.
Subsequent Transfer Agreement: Each Subsequent Transfer Agreement dated as of a
Subsequent Transfer Date executed by the respective Seller and the Issuer substantially in
the form of Exhibit 2 to the Purchase Agreement, by which the related Subsequent Mortgage
Loans are sold to the Issuer.
Subsequent Transfer Date: With respect to each Subsequent Transfer Agreement, the
date on which the related Subsequent Mortgage Loans are sold to the Issuer.
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 Certificates; if any other Person holds 100% of the Certificates, such
Person; and otherwise as provided in the Code.
Telerate Screen Page 3750: The display page so designated on the Telerate Capital
Markets Report (or such other page as may replace page 3750 on such service for the purpose
of displaying London interbank offered rates of major banks, or, if such service is no
longer offered, such other service for displaying London interbank offered rates or
comparable rates as may be selected by the Indenture Trustee after consultation with the
Servicer.
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, the Rating Agencies and the Enhancer 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.
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.
WG Trust 2003: Walnut Grove Mortgage Loan Trust 2003-A, a Delaware statutory trust.
