GMACM HOME EQUITY LOAN TRUST 2004-HE3,
Issuer,
and
XXXXX FARGO BANK, N.A.,
Indenture Trustee
------------------------
INDENTURE
------------------------
Dated as of June 30, 2004
GMACM HOME EQUITY LOAN-BACKED TERM NOTES
GMACM HOME EQUITY LOAN-BACKED VARIABLE PAY REVOLVING NOTES
TABLE OF CONTENTS
PAGE
ARTICLE I Definitions.......................................................................2
Section 1.01 Definitions....................................................................2
Section 1.02 Incorporation by Reference of Trust Indenture Act..............................2
Section 1.03 Rules of Construction..........................................................2
ARTICLE II Original Issuance of Notes.......................................................3
Section 2.01 Form...........................................................................3
Section 2.02 Execution, Authentication and Delivery.........................................3
Section 2.03 Advance or Additional Variable Pay Revolving Notes.............................4
ARTICLE III Covenants.......................................................................5
Section 3.01 Collection of Payments with Respect to the Mortgage Loans......................5
Section 3.02 Maintenance of Office or Agency................................................6
Section 3.03 Money for Payments to Be Held in Trust; Paying Agent...........................6
Section 3.04 Existence......................................................................7
Section 3.05 Priority of Distributions; Defaulted Interest..................................7
Section 3.06 Protection of Trust Estate....................................................11
Section 3.07 Opinions as to Trust Estate...................................................12
Section 3.08 Performance of Obligations; Servicing Agreement...............................12
Section 3.09 Negative Covenants............................................................13
Section 3.10 Annual Statement as to Compliance.............................................13
Section 3.11 Recordation of Assignments....................................................14
Section 3.12 Representations and Warranties Concerning the Mortgage Loans..................14
Section 3.13 Assignee of Record of the Mortgage Loans......................................14
Section 3.14 Servicer as Agent and Bailee of the Indenture Trustee.........................14
Section 3.15 Investment Company Act........................................................15
Section 3.16 Issuer May Consolidate, etc...................................................15
Section 3.17 Successor or Transferee.......................................................16
Section 3.18 No Other Business.............................................................17
Section 3.19 No Borrowing..................................................................17
Section 3.20 Guarantees, Loans, Advances and Other Liabilities.............................17
Section 3.21 Capital Expenditures..........................................................17
Section 3.22 Owner Trustee Not Liable for Certificates or Related Documents................17
Section 3.23 Restricted Payments...........................................................17
Section 3.24 Notice of Events of Default...................................................18
Section 3.25 Further Instruments and Acts..................................................18
Section 3.26 Statements to Noteholders.....................................................18
Section 3.27 Determination of Note Rate....................................................18
Section 3.28 Payments under the Policy.....................................................19
Section 3.29 Replacement/Additional Enhancement............................................20
Section 3.30 Additional Representations of Issuer..........................................20
ARTICLE IV The Notes; Satisfaction And Discharge Of Indenture..............................21
Section 4.01 The Notes; Variable Pay Revolving Notes.......................................21
Section 4.02 Registration of and Limitations on Transfer and Exchange of Notes;
Appointment of Certificate Registrar...............................................22
Section 4.03 Mutilated, Xxxxxxxxx, Lost or Stolen Notes....................................24
Section 4.04 Persons Deemed Owners.........................................................25
Section 4.05 Cancellation..................................................................25
Section 4.06 Book-Entry Notes..............................................................26
Section 4.07 Notices to Depository.........................................................26
Section 4.08 Definitive Notes..............................................................27
Section 4.09 Tax Treatment.................................................................27
Section 4.10 Satisfaction and Discharge of Indenture.......................................27
Section 4.11 Application of Trust Money....................................................28
Section 4.12 Subrogation and Cooperation...................................................29
Section 4.13 Repayment of Monies Held by Paying Agent......................................30
Section 4.14 Temporary Notes...............................................................30
ARTICLE V Default And Remedies.............................................................30
Section 5.01 Events of Default.............................................................30
Section 5.02 Acceleration of Maturity; Rescission and Annulment............................30
Section 5.03 Collection of Indebtedness and Suits for Enforcement by Indenture Trustee.....31
Section 5.04 Remedies; Priorities..........................................................33
Section 5.05 Optional Preservation of the Trust Estate.....................................35
Section 5.06 Limitation of Suits...........................................................36
Section 5.07 Unconditional Rights of Noteholders to Receive Principal and Interest.........36
Section 5.08 Restoration of Rights and Remedies............................................37
Section 5.09 Rights and Remedies Cumulative................................................37
Section 5.10 Delay or Omission Not a Waiver................................................37
Section 5.11 Control by Enhancer or Noteholders............................................37
Section 5.12 Waiver of Past Defaults.......................................................38
Section 5.13 Undertaking for Costs.........................................................38
Section 5.14 Waiver of Stay or Extension Laws..............................................39
Section 5.15 Sale of Trust Estate..........................................................39
Section 5.16 Action on Notes...............................................................41
Section 5.17 Performance and Enforcement of Certain Obligations............................41
ARTICLE VI The Indenture Trustee...........................................................42
Section 6.01 Duties of Indenture Trustee...................................................42
Section 6.02 Rights of Indenture Trustee...................................................43
Section 6.03 Individual Rights of Indenture Trustee........................................45
Section 6.04 Indenture Trustee's Disclaimer................................................45
Section 6.05 Notice of Event of Default....................................................45
Section 6.06 Reports by Indenture Trustee to Noteholders...................................45
Section 6.07 Compensation and Indemnity....................................................45
Section 6.08 Replacement of Indenture Trustee..............................................46
Section 6.09 Successor Indenture Trustee by Xxxxxx.........................................47
Section 6.10 Appointment of Co-Indenture Trustee or Separate Indenture Trustee.............47
Section 6.11 Eligibility; Disqualification.................................................48
Section 6.12 Preferential Collection of Claims Against Issuer..............................49
Section 6.13 Representations and Warranties................................................49
Section 6.14 Directions to Indenture Trustee...............................................49
Section 6.15 Indenture Trustee May Own Securities..........................................50
ARTICLE VII Noteholders' Lists and Reports.................................................50
Section 7.01 Issuer to Furnish Indenture Trustee Names and Addresses of Noteholders........50
Section 7.02 Preservation of Information; Communications to Noteholders....................50
Section 7.03 Reports by Issuer.............................................................50
Section 7.04 Reports by Indenture Trustee..................................................51
ARTICLE VIII Accounts, Disbursements and Releases..........................................51
Section 8.01 Collection of Money...........................................................51
Section 8.02 Trust Accounts................................................................51
Section 8.03 Officer's Certificate.........................................................52
Section 8.04 Termination Upon Distribution to Noteholders..................................52
Section 8.05 Release of Trust Estate.......................................................52
Section 8.06 Surrender of Notes Upon Final Payment.........................................53
ARTICLE IX Supplemental Indentures.........................................................53
Section 9.01 Supplemental Indentures Without Consent of Noteholders........................53
Section 9.02 Supplemental Indentures With Consent of Noteholders...........................55
Section 9.03 Execution of Supplemental Indentures..........................................56
Section 9.04 Effect of Supplemental Indenture..............................................56
Section 9.05 Conformity with Trust Indenture Act...........................................56
Section 9.06 Reference in Notes to Supplemental Indentures.................................56
ARTICLE X Miscellaneous....................................................................57
Section 10.01 Compliance Certificates and Opinions, etc....................................57
Section 10.02 Form of Documents Delivered to Indenture Trustee.............................59
Section 10.03 Acts of Noteholders..........................................................59
Section 10.04 Notices, etc., to Indenture Trustee, Issuer, Enhancer and Rating
Agencies...........................................................................60
Section 10.05 Notices to Noteholders; Waiver...............................................61
Section 10.06 Alternate Payment and Notice Provisions......................................61
Section 10.07 Conflict with Trust Indenture Act............................................61
Section 10.08 Effect of Headings...........................................................62
Section 10.09 Successors and Assigns.......................................................62
Section 10.10 Severability.................................................................62
Section 10.11 Benefits of Indenture........................................................62
Section 10.12 Legal Holidays...............................................................62
Section 10.13 GOVERNING LAW................................................................62
Section 10.14 Counterparts.................................................................62
Section 10.15 Recording of Indenture.......................................................62
Section 10.16 Issuer Obligation............................................................63
Section 10.17 No Petition..................................................................63
Section 10.18 Inspection...................................................................63
EXHIBITS
Exhibit A-1....- Form of Term Notes
Exhibit A-2....- Form of Variable Pay Revolving 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
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 Indenture, dated as of June 30, 2004, is between GMACM Home Equity
Loan Trust 2004-HE3, a Delaware statutory trust, as issuer (the "Issuer"), and
Xxxxx Fargo Bank, N.A., as indenture trustee (the "Indenture Trustee").
WITNESSETH:
Each party hereto agrees as follows for the benefit of the other party
and for the equal and ratable benefit of the Noteholders of the Issuer's Series
2004-HE3 GMACM Home Equity Loan-Backed Term Notes and GMACM Home Equity
Loan-Backed Variable Pay Revolving Notes (together, 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, Funding Account and Reserve Sub-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.
1
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";
2
(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 Term Notes and the Variable Pay Revolving Notes,
in each case together with the Indenture Trustee's certificate of
authentication, shall be in substantially the forms set forth in Exhibits A-1
and A-2, respectively, 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 Exhibits A-1 and A-2 are part of the
terms of this Indenture.
Any additional Variable Pay Revolving Notes issued by the Issuer (in
accordance with the instruction of the Depositor) after the Closing Date
pursuant to Section 2.03 shall be issued in accordance with the provisions of
this Indenture and shall be in substantially the form of Exhibit A-2 and shall
have the same Note Rate (which may be adjusted as described in Section 2.03),
Final Payment Date and priority for payment as the Variable Pay Revolving Notes
issued on the Closing Date.
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.
3
The Indenture Trustee shall upon Issuer Request authenticate and deliver
Term Notes for original issue in an aggregate initial principal amount of
$952,320,000 and Variable Pay Revolving Notes for original issue in an aggregate
initial principal amount of $24,960,000. The Class A-1 Notes, Class A-2 Notes,
Class A-3 Notes, Class A-1 Variable Pay Revolving Notes, Class A-2 Variable Pay
Revolving Notes and Class A-3 Variable Pay Revolving Notes, shall have an
initial principal amount of $430,000,000, $285,000,000, $237,320,000,
$24,960,000, $0 and $0, respectively.
Each Note shall be dated the date of its authentication. The Term Notes
shall be issuable as registered Book-Entry Notes in minimum denominations of
$25,000 and integral multiples of $1,000 in excess thereof and the Variable Pay
Revolving Notes shall be issued as Definitive Notes in minimum denominations of
$250,000 and integral multiples of $1,000 in excess thereof. Each Class of
Variable Pay Revolving Notes issued pursuant to Section 2.03 shall be issued
with an initial Note Balance equal to the outstanding Note Balance of the
related Class of Term Notes as of the related Targeted Final Payment Date, plus,
in the case of a substitute Variable Pay Revolving Note issued in connection
with an Advance by an existing Holder, the remaining Note Balance of the
Variable Pay Revolving Note being so substituted.
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.
Section 2.03..Advance or Additional Variable Pay Revolving Notes.
Not later than sixty (60) days prior to a Targeted Final Payment Date, the
Indenture Trustee, on behalf of the Issuer, will request an Advance (in
substantially the form attached hereto as Exhibit C) from the Holder(s) of the
related Class of Variable Pay Revolving Notes in an aggregate amount equal to
the outstanding Note Balance of the related Class of Term Notes, to be paid on
the Business Day prior to such Targeted Final Payment Date. Within thirty (30)
days thereafter, each Holder of that Class of Variable Pay Revolving Notes shall
notify the Indenture Trustee in writing (as set forth in Exhibit C) whether it
will make such Advance, subject to the continued satisfaction of the conditions
precedent specified in the Note Purchase Agreement.
If the Holder of such Class of Variable Pay Revolving Notes
indicates that it will make an Advance, the Issuer shall issue and, upon receipt
of an Issuer Order, the Indenture Trustee shall authenticate, a substitute
Variable Pay Revolving Note for such Holder in a principal amount equal to the
remaining Note Balance of such Holder's existing Variable Pay Revolving Note
plus the amount of the Advance to be made by such Holder. The Indenture Trustee
shall register such substitute Variable Pay Revolving Note to such Holder on or
prior to the date such Advance is to be made in exchange for the Advance and the
existing Variable Pay Revolving Note of such Holder.
If the Holders of such Class of Variable Pay Revolving Notes
indicate to the Indenture Trustee that they will not make an Advance in an
aggregate amount equal to the outstanding Note Balance of the related Class of
Term Notes, the Indenture Trustee will notify the Depositor by close of business
on the next Business Day. If insufficient Advances will be made, the Depositor
may direct the Issuer to issue additional Variable Pay Revolving Notes in an
4
aggregate amount equal to the related outstanding Class of Term Notes or such
insufficiency, if less. Upon receipt of such direction and the related Advance,
the Issuer shall issue and, upon receipt of an Issuer Order, the Indenture
Trustee shall authenticate, such additional Variable Pay Revolving Notes in
accordance with Sections 2.01 and 2.02 and Article IV. If such additional
Variable Pay Revolving Notes are issued, the Indenture Trustee shall register
such Variable Pay Revolving Notes in accordance with Article IV of this
Indenture and deliver such Variable Pay Revolving Notes in accordance with the
instructions of the Depositor. In addition, in connection with the issuance of
the additional Variable Pay Revolving Notes, at the direction of, and pursuant
to the procedures provided by, the Depositor, the Indenture Trustee shall
contact the broker-dealers identified by the Depositor in order to solicit bids
for the aggregate principal amount of Variable Pay Revolving Notes for which the
Indenture Trustee has received notice that Advances will not be made. Within a
reasonable time after receipt of the bids, the Indenture Trustee, in
consultation with the Depositor, shall determine the lowest margin over LIBOR at
which Variable Pay Revolving Notes in an aggregate amount equal to the amount of
requested Advances which the Indenture Trustee has received notice will not be
made, can be sold, and such margin shall become the new margin in effect for all
the Variable Pay Revolving Notes, as of the related Targeted Final Payment Date;
provided that such margin shall in no event exceed 0.50%; and provided further
that, if any Holder of a Variable Pay Revolving Note agrees to make an Advance
on the related Targeted Final Payment Date, such margin shall not be lower than
the margin on the Variable Pay Revolving Notes immediately prior to such
Targeted Final Payment Date. In addition, if there exists an unreimbursed Draw
on the Policy, or a Servicing Default has occurred and is continuing, the margin
on the Variable Pay Revolving Notes may not be increased without the consent of
the Enhancer. All further actions of the Indenture Trustee necessary to effect
the issuance and sale of such additional Variable Pay Revolving Notes shall be
at the direction of the Depositor and in conformity with this Indenture.
Notwithstanding the foregoing, if an Early Amortization Event has
occurred, an Insolvency Event with respect to the Enhancer has occurred and is
continuing or a Default has occurred and is continuing, the Indenture Trustee
will not request an Advance and the Issuer will not issue any additional
Variable Pay Revolving Notes.
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.
5
Section 3.02 Maintenance of Office or Agency. The Issuer will maintain
in the City of Minneapolis, Minnesota, 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.
6
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 Payment 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, Funding Account or Reserve
Sub-Account pursuant to Sections 3.16, 3.17, 3.18 and 3.19 of the Servicing
Agreement, is as follows:
7
(i) from Interest Collections, any Policy Payment pursuant
to Section 3.28(b)(ii)(A) and any Capitalized Interest Requirement
pursuant to Section 3.19(b) of the Servicing Agreement, to the Note
Payment Account, for payment by the Paying Agent to the Noteholders of
each Class of Term Notes and Variable Pay Revolving Notes, pari passu,
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;
(ii) from Net Principal Collections, to the extent not
paid pursuant to clause (i) above, to the Note Payment Account, for
payment by the Paying Agent to the Noteholders of each Class of Term
Notes and Variable Pay Revolving Notes, pari passu, 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) during the Revolving Period, to the Funding Account,
Principal Collections to the extent not previously applied to purchase
Additional Balances or Subsequent Mortgage Loans;
(iv) from Interest Collections, to the Enhancer, the
amount of the premium for the Policy and any unpaid premium for the
Policy, with interest thereon as provided in the Insurance Agreement;
(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) during the Revolving Period and the Amortization
Periods, to the Note Payment Account, the Principal Distribution Amount
for payment by the Paying Agent to the Noteholders for each Class of
Variable Pay Revolving Notes, pro rata, based on their respective Note
Balances, including any amount on deposit in the Note Payment Account on
such Payment Date pursuant to Section 3.28(b)(ii)(B); provided that any
Liquidation Loss Amounts for any Payment Date during the Revolving
Period shall be deposited in the Funding Account; provided further, that
any amounts transferred from the Pre-Funding Account pursuant to Section
3.18(b) of the Servicing Agreement after the aggregate Note Balance of
the Variable Pay Revolving Notes has been reduced to zero shall be
deposited into the Funding Account;
(vii) to the Enhancer, to reimburse it for prior draws
made on the Policy, with interest thereon as provided in the Insurance
Agreement;
(viii) from any remaining Excess Spread during the
Revolving Period, first, to the Note Payment Account for payment to each
Class of Variable Pay Revolving Notes, pro rata, based on their
respective Note Balances, until the Note Balance thereof has been
reduced to zero and then as a deposit to the Funding Account, the amount
necessary to be applied on that Payment Date so that the
Overcollateralization Amount, after giving effect to the application of
funds pursuant to clause (vi) above, is not less than the
Overcollateralization Target Amount;
8
(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, which amount will be paid to each Class of Variable Pay
Revolving Notes, pro rata, based on their respective Note Balances, so
that the Overcollateralization Amount, after giving effect to the
application of funds pursuant to clause (vi) 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 (vi),
(viii) or (ix) above on such Payment Date or prior Payment Dates, for
payment by the Paying Agent to the Noteholders of each Class of Variable
Pay Revolving Notes, pro rata, based on their respective Note Balances;
(xi) to the Enhancer, any amounts owed to the Enhancer
pursuant to the Insurance Agreement other than amounts specified in
clauses (iv) or (vii) 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, pro rata, in accordance with Interest
Shortfalls previously allocated thereto and remaining unpaid;
(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;
(xiv) to the Reserve Sub-Account, the amount (if any)
required pursuant to Section 3.05(c); and
(xv) 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(b)(ii).
For purposes of the foregoing, the Note Balance of each Class of Notes
on each Payment Date during the Amortization Periods for such Class of Notes
will be reduced (any such reduction, an "Unpaid Principal Amount") by the pro
rata portion allocable to such Notes of all Liquidation Loss Amounts for such
9
Payment Date, but only to the extent that such Liquidation Loss Amounts are not
otherwise covered by payments made pursuant to clauses (vi), (ix) or (x) above,
or by a draw on the Policy, and the Overcollateralization Amount is zero.
(b) Notwithstanding the allocation of payments described in Section 3.05(a),
unless an Early Amortization Event has occurred, all Collections on the Mortgage
Loans payable as principal distributions on the Variable Pay Revolving Notes
during the Amortization Periods will be so paid until the aggregate Note Balance
of the Variable Pay Revolving Notes has been reduced to zero and thereafter,
will be deposited into the Reserve Sub-Account. On the first Payment Date
following the next Targeted Final Payment Date, amounts in the Reserve
Sub-Account will be deposited into the Note Payment Account and applied as
principal payments, pro rata, on the Variable Pay Revolving Notes based on their
respective Note Balances.
Notwithstanding the allocation of payments described in clause
Section 3.05(a), if an Early Amortization Event has occurred, all amounts in the
Reserve Sub-Account and all Collections on the Mortgage Loans payable as
principal distributions on the Variable Pay Revolving Notes pursuant to Section
3.05(a) will be paid on each Payment Date to the Holders of the Variable Pay
Revolving Notes and the Term Notes, pro rata, based on their respective Note
Balances.
(c) Within sixty (60) Business Days of each Targeted Final Payment Date, the
Indenture Trustee, on behalf of the Issuer, will request an Advance (under the
circumstances and in the manner set forth in Section 2.03 hereof) from the
Holder of the related Class of Variable Pay Revolving Notes, the proceeds of
which shall be applied by the Indenture Trustee to make principal payments in an
amount equal to the outstanding Note Balance on the related Class of Term Notes
on such Targeted Final Payment Date or, if received within 10 days following
such Targeted Final Payment Date (but not later than 1:00 p.m. New York time on
the 10th day or, if such 10th day is not a Business Day, the immediately
preceding Business Day), not later than the 10th day following the related
Targeted Final Payment Date or, if such 10th day is not a Business Day, the
immediately preceding Business Day. If no Advance is received, the Issuer shall,
at the direction of the Depositor, issue additional Variable Pay Revolving
Notes. Neither the Advance, nor proceeds from the sale of additional Variable
Pay Revolving Notes issued with respect to a Targeted Final Payment Date, will
exceed or be less than the amount necessary to pay the outstanding Note Balance
on the related Class of Term Notes on such Targeted Final Payment Date. Advances
may be made and additional Variable Pay Revolving Notes may be issued only in
connection with a Targeted Final Payment Date and in accordance with this
Indenture and the Trust Agreement. If no Advance is received, and the Trust
fails to issue additional Variable Pay Revolving Notes on a Targeted Final
Payment Date, an amount equal to 10 days interest on the related Class of Term
Notes shall be deposited into the Reserve Sub-Account pursuant to Section
3.05(a)(xiv) from amounts otherwise payable to Certificateholders. Upon the
issuance and sale by the Trust of additional Variable Pay Revolving Notes within
10 days after the related Targeted Final Payment Date, the amount of interest
deposited into the Reserve Sub-Account pursuant to Section 3.05(a)(xiv) shall be
paid to the Holders of the related Class of Term Notes, together with the Note
Balance of such Class, in an amount equal to the interest accrued on such Class
of Term Notes through the date of payment.
10
(d) 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.
(e) 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-1 and
A-2. All principal payments on the Term Notes and Variable Pay Revolving Notes
of each Class 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 applicable Targeted Final Payment
Date, 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.
(f) 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;
11
(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 Loan Agreements 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 2004, 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.
12
(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 by the Indenture Trustee pursuant to Section 5.04 hereof;
(b) claim any credit on, or make any deduction from the principal
or interest payable in respect of, the Notes (other than amounts properly
withheld from such payments under the Code) or assert any claim against any
present or former Noteholder by reason of the payment of the taxes levied or
assessed upon any part of the Trust Estate;
(c) (i) permit the validity or effectiveness of this Indenture to
be impaired, or permit the lien of this Indenture to be amended, hypothecated,
subordinated, terminated or discharged, or permit any Person to be released from
any covenants or obligations with respect to the Notes under this Indenture
except as may be expressly permitted hereby, (ii) permit any lien, charge,
excise, claim, security interest, mortgage or other encumbrance (other than the
lien of this Indenture) to be created on or extend to or otherwise arise upon or
burden the Trust Estate or any part thereof or any interest therein or the
proceeds thereof or (iii) permit the lien of this Indenture not to constitute a
valid first priority security interest in the Trust Estate; or
(d) impair or cause to be impaired the Issuer's interest in the
Mortgage Loans, the Purchase Agreement or in any other Basic Document, if any
such action would materially and adversely affect the interests of the
Noteholders.
Section 3.10 Annual Statement as to Compliance. The Issuer shall deliver
to the Indenture Trustee, within 120 days after the end of each fiscal year of
the Issuer (commencing with the fiscal year ending on December 31, 2004), an
Officer's Certificate stating, as to the Authorized Officer signing such
Officer's Certificate, that:
13
(a) a review of the activities of the Issuer during such year and
of its performance under this Indenture and the Trust Agreement has been made
under such Authorized Officer's supervision; and
(b) to the best of such Authorized Officer's knowledge, based on
such review, the Issuer has complied with all conditions and covenants under
this Indenture and the provisions of the Trust Agreement throughout such year,
or, if there has been a default in its compliance with any such condition or
covenant, specifying each such default known to such Authorized Officer and the
nature and status thereof.
Section 3.11 Recordation of Assignments. The Issuer shall enforce the
obligation, if any, of the Sellers under the Purchase Agreement to submit or
cause to be submitted for recordation all Assignments of Mortgages within 60
days of receipt of recording information by the Servicer.
Section 3.12 Representations and Warranties Concerning the Mortgage
Loans. The Indenture Trustee, as pledgee of the Mortgage Loans, shall have the
benefit of (i) the representations and warranties made by GMACM in Section
3.1(a) and Section 3.1(b) of the Purchase Agreement and (ii) the benefit of the
representations and warranties made by WG Trust 2003 in Section 3.1(d) of the
Purchase Agreement, in each case, concerning the Mortgage Loans and the right to
enforce the remedies against GMACM or WG Trust 2003 provided in Section 3.1(e)
of the Purchase Agreement, as applicable, to the same extent as though such
representations and warranties were made directly to the Indenture Trustee.
Section 3.13 Assignee of Record of the Mortgage Loans. As pledgee of the
Mortgage Loans, the Indenture Trustee shall hold title to the Mortgage Loans by
being named as payee in the endorsements or assignments of the Loan Agreements
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
14
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).
15
(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.
16
(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
17
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.xxxxxxx.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. The Indenture Trustee may require
registration and acceptance of a disclaimer in connection with providing access
to its website.
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.
18
Section 3.28 Payments under the Policy.
(a)The Indenture Trustee shall establish a separate Eligible
Account for the benefit of Holders of the Notes and the Enhancer, referred to
herein as the "Policy Payments Account," over which the Indenture Trustee shall
have exclusive control and sole right of withdrawal. The Indenture Trustee shall
deposit upon receipt any amount paid under the Policy in the Policy Payments
Account and distribute such amount only for purposes of payment to the
Noteholders of any Policy Payment and such amount may not be applied to satisfy
any costs, expenses or liabilities of the Servicer, the Indenture Trustee or the
Trust Fund. Policy Payments on deposit in the Policy Payments Account shall be
transferred to the Note Payment Account on the related Payment Date and
disbursed by the Indenture Trustee to the Noteholders in accordance with Section
3.05. It shall not be necessary for such payments to be made by checks or wire
transfers separate from the checks or wire transfers used to pay other
distributions to the Noteholders with other funds available to make such
payment. However, the amount of any payment of principal or of interest on the
Notes to be paid from funds transferred from the Policy Payments Account shall
be noted in the Note Register and in the statement to be furnished to Holders of
such Notes pursuant to Section 3.26. Funds held in the Policy Payments Account
shall not be invested. Any funds remaining in the Policy Payments Account on the
first Business Day following a Payment Date shall be returned to the Enhancer
pursuant to the written instructions of the Enhancer by the end of such Business
Day.
(b) (i) If the Servicing Certificate specifies a Policy Payment
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
take the action specified in Section 3.28(c)(ii).
(ii) The Indenture Trustee shall deposit or cause to be
deposited such Policy Payment into the Policy Payments Account pursuant
to Section 3.28(a) upon receipt thereof. On each Payment Date, the
Indenture Trustee shall transfer amounts on deposit in the Policy
Payments Account, if any, (A) to the extent such amount relates to
clause (a) of the definition of "Deficiency Amount" or any Preference
Payment, to the Note Payment Account and (B) 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.
(c) (i) The Indenture Trustee shall submit (A) if a Scheduled
Payment is specified in any statement to Securityholders prepared
pursuant to Section 4.01 of the Servicing Agreement, the Notice of Claim
and Certificate (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 and (B) if a
Preference Payment has been requested by a Noteholder which has
previously paid a preference amount to a receiver, conservator,
debtor-in-possession or trustee in bankruptcy named in an Order, a
certified copy of the Order and any other applicable certificates or
documentation as required by paragraph 3 of the Policy.
19
(ii) If no Deficiency Amount is specified in the Servicing
Certificate, then on the Business Day preceding the Payment Date, the
Indenture Trustee shall check the amount on deposit in the Note Payment
Account after remittance by the Servicer, and shall determine whether
the amounts on deposit therein are sufficient to make all payments
required pursuant to the Servicing Certificate. If the Indenture Trustee
determines that such amounts are not sufficient to make all such
payments, the Indenture Trustee shall immediately notify the Servicer
and the Servicer shall recalculate the amounts indicated on the
Servicing Certificate and determine whether there is in fact a
Deficiency Amount for such Payment Date. The Servicer shall notify the
Indenture Trustee in writing of such recalculated amount, even if such
amount is zero, and if a Deficiency Amount exists, the Indenture Trustee
shall make a draw on the Policy for the amount of such Deficiency Amount
and shall remit such amounts to the Noteholders upon receipt thereof
from the Enhancer.
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:
(g) This Indenture creates a valid and continuing security interest (as defined
in the applicable UCC) in the Loan Agreements 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.
(h) The Loan Agreements constitute "instruments" within the meaning of the
applicable UCC.
20
(i) The Issuer owns and has good and marketable title to the Loan Agreements
free and clear of any Lien of any Person.
(j) The original executed copy of each Loan Agreement (except for any Loan
Agreement with respect to which a Lost Note Affidavit has been delivered to the
Custodian) has been delivered to the Custodian.
(k) 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.
(l) 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 Loan Agreements. 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 Loan Agreements 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.
(m) None of the Loan Agreements 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 Loan Agreement to the Indenture
Trustee, and (ii) any marks or notations pertaining to Liens that have been
terminated or released.
(n) 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; Variable Pay Revolving Notes
(a) The Term Notes shall be registered in the name of a nominee
designated by the Depository. Beneficial Owners will hold interests in the Term
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 Term Notes for the
purposes of exercising the rights of Noteholders of Term Notes hereunder. Except
as provided in the next succeeding paragraph of this Section 4.01, the rights of
Beneficial Owners with respect to the Term 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 Term
Notes as to which they are the Beneficial Owners. Requests and directions from,
21
and votes of, the Depository as Noteholder of the Term 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.
(b) The Variable Pay Revolving Notes issued on the Closing Date
shall be issued in definitive form and shall bear the designation "Class A-1
VPRN-1," "Class A-2 VPRN-1" and "Class A-3 VPRN-1," as applicable, and each new
Class of Variable Pay Revolving Notes will be issued in definitive form and
shall bear sequential numerical designations in the order of their issuance.
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.
No transfer, sale, pledge or other disposition of a Variable Pay
Revolving Note shall be made unless such transfer, sale, pledge or other
disposition is exempt from the registration requirements of the Securities Act,
and any applicable state securities laws or is made in accordance with said Act
and laws. In the event of any such transfer, the Indenture Trustee or the Issuer
shall require the transferee to either (i) execute an investment letter in
substantially the form attached hereto as Exhibit B (or in such form and
substance reasonably satisfactory to the Indenture Trustee and the Issuer) which
investment letters shall not be an expense of the Owner Trustee, the Indenture
Trustee, the Servicer, the Depositor or the Issuer and which investment letter
22
states that, among other things, such transferee (a) is a "qualified
institutional buyer" as defined under Rule 144A, acting for its own account or
the accounts of other "qualified institutional buyers" as defined under Rule
144A, and (b) is aware that the proposed transferor intends to rely on the
exemption from registration requirements under the Securities Act, provided by
Rule 144A or (ii) deliver to the Indenture Trustee and the Issuer (a) an
investment letter executed by the transferee in substantially the form of
Exhibit D, (b) a representation letter executed by the transferor in
substantially the form of Exhibit E and (c) an opinion of counsel to the effect
that such transfer is not required to be registered under the Securities Act and
the facts surrounding the transfer do not create a security that is required to
be registered under the Securities Act, in each case, acceptable to and in form
and substance reasonably satisfactory to the Issuer and the Indenture Trustee,
which opinion and letters shall not be an expense of the Owner Trustee, the
Indenture Trustee, the Servicer, the Depositor or the Issuer. The Noteholder of
a Variable Pay Revolving Note desiring to effect such transfer shall, and does
hereby agree to, indemnify the Indenture Trustee, the Enhancer and the Issuer
against any liability that may result if the transfer is not so exempt or is not
made in accordance with such federal and state laws. In addition, no transfer of
any Variable Pay Revolving Note or any interest therein shall be made to 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 (collectively, a "Plan"), any Person acting,
directly or indirectly, on behalf of any such Plan or any Person acquiring such
Variable Pay Revolving Note with "plan assets" of a Plan within the meaning of
the Department of Labor Regulations Section 2510.3-101 ("Plan Assets") unless
the Indenture Trustee and the Servicer are provided with an Opinion of Counsel
that establishes to the satisfaction of the Indenture Trustee and the Servicer
that the purchase of such Variable Pay Revolving Note is permissible under
applicable law, will not constitute or result in any prohibited transaction
under ERISA or Section 4975 of the Code and will not subject the Indenture
Trustee or the Servicer to any obligation or liability (including obligations or
liabilities under ERISA or Section 4975 of the Code) in addition to those
undertaken in this Indenture, which Opinion of Counsel shall not be an expense
of the Indenture Trustee or the Servicer. In lieu of such Opinion of Counsel,
any Person acquiring such Variable Pay Revolving Note shall provide a
certification in the form of Exhibit G to the Trust Agreement, which the
Indenture Trustee and the Servicer may rely upon without further inquiry or
investigation. Neither an Opinion of Counsel nor a certification will be
required in connection with the initial transfer of any such Variable Pay
Revolving Note by the Owner Trust to the Depositor or any transfer from the
Depositor to an Affiliate of the Depositor (in which case, the Depositor or any
such Affiliate shall be deemed to have represented that the Depositor or such
Affiliate, as applicable, is not a Plan or a Person investing Plan Assets of any
Plan) and the Indenture Trustee shall be entitled to conclusively rely upon a
representation (which shall be a written representation) from the Depositor of
the status of such transferee as an Affiliate of the Depositor.
Until the earlier of (i) 10 days after the Targeted Final Payment Date
for the related Class of Term Notes or (ii) the occurrence of an Early
Amortization Event, no Variable Pay Revolving Note issued after the Closing
Date, either at issuance or upon sale transfer, pledge or other disposition,
will be registered in the name of any Holder unless such Holder shall have
established, to the satisfaction of the Indenture Trustee and the Depositor,
that such Holder has the Required Ratings (or its obligations are guaranteed by
an entity that has the Required Ratings) or such Holder shall have been approved
23
by Noteholders representing 51% of the aggregate Note Balance of each Class of
Term Notes and the Enhancer (provided that no Enhancer Default or Insolvency
Event with respect to the Enhancer has occurred and is continuing), which
approval of the Enhancer shall not be unreasonably withheld; provided, that if
the Enhancer shall not have notified the Depositor or the Indenture Trustee
within five (5) days of receiving notice of a proposed transferee, that the
Enhancer does not approve such Holder, such approval shall be deemed to have
been made.
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 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
24
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
25
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. Each Class of Term 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 Term 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 Term Notes (such
Term Notes, together with the Variable Pay Revolving 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 Term 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 Term 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 Term Notes
evidencing a specified percentage of the Note Balances of the Term 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 Term 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 Term Notes is required under this
Indenture, unless and until Definitive Term 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 Term Notes to the Depository, and shall have no obligation to the Beneficial
Owners.
26
Section 4.08 Definitive Notes. Each Variable Pay Revolving Note shall be
issued as a Definitive Note. If (i) the Indenture Trustee determines that the
Depository is no longer willing or able to properly discharge its
responsibilities with respect to the Term Notes and the Indenture Trustee is
unable to locate a qualified successor, (ii) the Indenture Trustee elects to
terminate the book-entry system through the Depository, (iii) the Indenture
Trustee receives actual knowledge of a proposed transfer of a Term Note to an
"accredited investor" in accordance with Section 4.02 and Exhibit C hereof, or
(iv) after the occurrence of an Event of Default, Beneficial Owners of Term
Notes representing beneficial interests aggregating at least a majority of the
aggregate Term Note Balance of the Term 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 to the Indenture Trustee of the typewritten
Term 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 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:
27
(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 has irrevocably deposited or caused to be irrevocably
deposited with the Indenture Trustee cash or direct obligations of or
obligations guaranteed by the United States of America (which will
mature prior to the date such amounts are payable), in trust for such
purpose, in an amount sufficient to pay and discharge the entire
indebtedness on such Notes and Certificates then outstanding not
theretofore delivered to the Indenture Trustee for cancellation when due
on the Final Payment Date, as evidenced to the Indenture Trustee by an
accountant's letter or an Officer's Certificate of the Issuer;
(B) the Issuer has paid or caused to be paid all other
sums payable hereunder and under the Insurance Agreement by the
Issuer; and
(C) the Issuer has delivered to the Indenture Trustee 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.
28
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.
The Indenture Trustee shall promptly notify the Enhancer and Fiscal
Agent (as defined in the Policy) of any proceeding or the institution of any
action, of which an Authorized Officer of the Indenture Trustee has actual
knowledge, seeking the avoidance as a preferential transfer under applicable
bankruptcy, insolvency, receivership or similar law (a "Preference Claim") of
any distribution made with respect to the Notes. Each Noteholder, by its
purchase of such Note, the Servicer and the Indenture Trustee hereby agree that
the Enhancer (so long as no Enhancer Default exists) may at any time during the
continuation of any proceeding relating to a Preference Claim direct all matters
29
relating to such Preference Claim, including without limitation, (i) the
direction of any appeal of any order relating to such Preference Claim and (ii)
the posting of any surety, supersedeas or performance bond pending any such
appeal. In addition and without limitation of the foregoing, the Enhancer shall
be subrogated to the rights of the Servicer, the Indenture Trustee and each
Noteholder in the conduct of any such Preference Claim, including, without
limitation, all rights of any party to an adversary proceeding action with
respect to any court order issued in connection with any such Preference Claim.
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 (and if so directed by the Enhancer, shall) declare the Notes to be
30
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;
provided that no such waiver shall be effective following an Early Amortization
Event if the requisite consents of the Noteholders and the Enhancer have been
obtained with respect to a sale or other liquidation of the Trust Estate
pursuant to Section 5.04(a).
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.
31
(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 (and if so
directed by the Enhancer, shall) 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
(unless otherwise directed by the Enhancer), 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;
32
(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 Term Notes and the Variable Pay
Revolving Notes, as applicable.
(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:
33
(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, which consent will not be
unreasonably withheld, or the Noteholders of 100% of the aggregate Note Balance
of the Notes with the consent of the Enhancer (so long as no Enhancer Default
exists); provided that notwithstanding any other provision of this Indenture, if
the sale or liquidation of the Trust Estate has been triggered by an Event of
Default caused solely by the existence of an Early Amortization Event (other
than pursuant to clause (iii)(A) of the definition of Early Amortization Event),
the Indenture Trustee must obtain the consent of 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, which consent
will not be unreasonably withheld, 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.
34
(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 with the consent of the Enhancer (so long as
no Enhancer Default exists), but need not (but shall at the written direction of
the Enhancer (so long as no Enhancer Default exists)), elect to take and
maintain possession of the Trust Estate unless, if applicable, 100% of the
Noteholders have consented to the sale pursuant to the requirements of Section
5.04. 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,
35
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 the Enhancer consents thereto (so long as no Enhancer Default
exists) 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 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.
36
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
37
(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.
Except as specifically limited by Section 5.04 in connection with the
liquidation of the Trust Estate and Article IX in connection with any
Supplemental Indentures, by accepting its Note, each Owner of a Term Note agrees
that unless an Enhancer Default exists, the Enhancer shall have the right to
exercise all rights of the Owners of the Notes as specified under this Indenture
without any further consent of the Owners of the Term Notes and that the Owners
of the Term Notes may not exercise such rights except with the written consent
of the Enhancer.
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.
38
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 Noteholders of all Notes or the Enhancer direct
the Indenture Trustee 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 (which consent shall not be
unreasonably withheld), and the Noteholders of Notes representing at
least 66 2/3% of the aggregate Note Balance of the Notes consent 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).
39
(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.
40
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.
41
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.
42
(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,
during the Revolving Period, the amount of Principal Collections to be deposited
into the Funding Account (including the Reserve Sub-Account) in respect of such
Payment Date, and the amount on deposit in the Funding Account (including the
Reserve Sub-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.
43
(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.
44
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
45
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. 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.
46
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:
47
(i) all rights, powers, duties and obligations conferred
or imposed upon the Indenture Trustee shall be conferred or imposed upon
and exercised or performed by the Indenture Trustee and such separate
trustee or co-trustee jointly (it being understood that such separate
trustee or co-trustee is not authorized to act separately without the
Indenture Trustee joining in such act), except to the extent that under
any law of any jurisdiction in which any particular act or acts are to
be performed the Indenture Trustee shall be incompetent or unqualified
to perform such act or acts, in which event such rights, powers, duties
and obligations (including the holding of title to the Trust Estate or
any portion thereof in any such jurisdiction) shall be exercised and
performed singly by such separate trustee or co-trustee, but solely at
the direction of the Indenture Trustee;
(ii) no trustee hereunder shall be personally liable by
reason of any act or omission of any other trustee hereunder; and
(iii) the Indenture Trustee may at any time accept the
resignation of or remove any separate trustee or co-trustee.
(c)Any notice, request or other writing given to the Indenture
Trustee shall be deemed to have been given to each of the then separate trustees
and co-trustees, as effectively as if given to each of them. Every instrument
appointing any separate trustee or co-trustee shall refer to this Indenture and
the conditions of this Article VI. Each separate trustee and co-trustee, upon
its acceptance of the trusts conferred, shall be vested with the estates or
property specified in its instrument of appointment, either jointly with the
Indenture Trustee or separately, as may be provided therein, subject to all the
provisions of this Indenture, specifically including every provision of this
Indenture relating to the conduct of, affecting the liability of, or affording
protection to, the Indenture Trustee. Every such instrument shall be filed with
the Indenture Trustee.
(d)Any separate trustee or co-trustee may at any time constitute
the Indenture Trustee, its agent or attorney-in-fact with full power and
authority, to the extent not prohibited by law, to do any lawful act under or in
respect of this Indenture on its behalf and in its name. If any separate trustee
or co-trustee shall die, become incapable of acting, resign or be removed, all
of its estates, properties, rights, remedies and trusts shall vest in and be
exercised by the Indenture Trustee, to the extent permitted by law, without the
appointment of a new or successor trustee.
Section 6.11 Eligibility; Disqualification. The Indenture Trustee shall
at all times satisfy the requirements of TIA ss. 310(a). The Indenture Trustee
shall have a combined capital and surplus of at least $50,000,000 as set forth
in its most recent published annual report of condition and it or its parent
shall have a long-term debt rating of "A" or better by Xxxxx'x. The Indenture
Trustee shall comply with TIA ss. 310(b), including the optional provision
permitted by the second sentence of TIA ss. 310(b)(9); provided, however, that
there shall be excluded from the operation of TIA ss. 310(b)(1) any indenture or
indentures under which other securities of the Issuer are outstanding if the
requirements for such exclusion set forth in TIA ss. 310(b)(1) are met.
48
Section 6.12 Preferential Collection of Claims Against Issuer. The
Indenture Trustee shall comply with TIA ss. 311(a), excluding any creditor
relationship listed in TIA ss. 311(b). An Indenture Trustee that has resigned or
been removed shall be subject to TIA ss. 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.
49
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 TIA ss. 312(b) with
other Noteholders with respect to their rights under this Indenture or under the
Notes.
(c)The Issuer, the Indenture Trustee and the Note Registrar shall
have the protection of TIA ss. 312(c).
Section 7.03 Reports by Issuer.
(a)The Issuer shall:
(i) file with the Indenture Trustee, within 15 days after
the Issuer is required to file the same with the Commission, copies of
the annual reports and the information, documents and other reports (or
copies of such portions of any of the foregoing as the Commission may
from time to time by rules and regulations prescribe) that the Issuer
may be required to file with the Commission pursuant to Section 13 or
15(d) of the Exchange Act;
(ii) file with the Indenture Trustee and the Commission,
in accordance with rules and regulations prescribed from time to time by
the Commission, such additional information, documents and reports with
respect to compliance by the Issuer with the conditions and covenants of
this Indenture as may be required from time to time by such rules and
regulations; and
(iii) supply to the Indenture Trustee (and the Indenture
Trustee shall transmit by mail to all Noteholders described in TIA ss.
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.
50
(b)Unless the Issuer otherwise determines, the fiscal year of the
Issuer shall end on December 31 of each year.
Section 7.04 Reports by Indenture Trustee. If required by TIA ss.
313(a), within 60 days after each January 1, beginning with January 1, 2005, the
Indenture Trustee shall make available to each Noteholder as required by TIA ss.
313(c) and to the Enhancer a brief report dated as of such date that complies
with TIA ss. 313(a). The Indenture Trustee also shall comply with TIA ss.
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 Term Notes are listed. The Issuer
shall notify the Indenture Trustee if and when the Term Notes are listed on any
stock exchange.
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 and the Reserve Sub-Account.
51
(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 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.
All monies deposited from time to time in the Reserve Sub-Account
pursuant to this Indenture are for the benefit of the Noteholders and the
Enhancer, and all investments made with such monies, including all income or
other gain from such investments, are for the benefit of the Noteholders.
The Indenture Trustee shall invest any funds in the Note Payment Account
and the Reserve Sub-Account in Permitted Investments selected in writing by the
Servicer maturing no later than the Business Day preceding the next succeeding
Payment Date (except that any investment in the institution with which the Note
Payment Account is maintained may mature on such Payment Date) and shall not be
sold or disposed of prior to the maturity. In addition, such Permitted
Investments shall not be purchased at a price in excess of par. The Indenture
Trustee shall have no liability whatsoever for investment losses on Permitted
Investments, if such investments are made in accordance with the provisions of
this Indenture and the Indenture Trustee is not the obligor under the Permitted
Investment.
Section 8.03 Officer's Certificate. The Indenture Trustee shall receive
at least seven days' notice when requested by the Issuer to take any action
pursuant to Section 8.05(a), accompanied by copies of any instruments to be
executed, and the Indenture Trustee shall also require, as a condition to such
action, an Officer's Certificate, in form and substance satisfactory to the
Indenture Trustee, stating the legal effect of any such action, outlining the
steps required to complete the same, and concluding that all conditions
precedent to the taking of such action have been complied with.
Section 8.04 Termination Upon Distribution to Noteholders. This
Indenture and the respective obligations and responsibilities of the Issuer and
the Indenture Trustee created hereby shall terminate upon the distribution to
the Noteholders, the Certificate Paying Agent on behalf of the
Certificateholders and the Indenture Trustee of all amounts required to be
distributed pursuant to Article III; provided, however, that in no event shall
the trust created hereby continue beyond the expiration of 21 years from the
death of the survivor of the descendants of Xxxxxx X. Xxxxxxx, the late
ambassador of the United States to the Court of St. James's, living on the date
hereof.
Section 8.05 Release of Trust Estate.
52
(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,
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;
53
(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.
54
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 of each
Class of Notes 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 of any Class of
Notes, 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.
55
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,
56
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."
57
(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, 2004, 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.
58
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.
59
(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 Xxxxx Fargo Bank, N.A., 0000 Xxx Xxxxxxxxx Xxxx, Xxxxxxxx, Xxxxxxxx
00000-0000, Attention: Corporate Trust Services -- GMACM -- 2004-HE3. 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
2004-HE3, in care of the Owner Trustee, or at any other address previously
furnished in writing to the Indenture Trustee by the Issuer. The Issuer shall
promptly transmit any notice received by it from the Noteholders to the
Indenture Trustee, or
(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 Security Assurance Inc., 000 Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000,
Attention: Managing Director - Transaction Oversight, Re: GMACM Home Equity Loan
Trust 2004-HE3, Policy No. 51527-N, telecopier number (000) 000-0000,
confirmation telephone 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.
60
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.
61
The provisions of TIA xx.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 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 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.
62
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.
63
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 2004-HE3, as Issuer
By: WILMINGTON TRUST COMPANY, not in its
individual capacity but solely as Owner
Trustee
By:
--------------------------------------
Name:
Title:
XXXXX FARGO BANK, N.A., as Indenture Trustee
By:
--------------------------------------
Name:
Title:
XXXXX FARGO BANK, N.A.
xxxxxx 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
64
STATE OF _______________.....)
) ss.:
COUNTY OF _____________......)
On this ___ day of June, 2004, 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
65
STATE OF )
) ss.:
COUNTY OF )
On this ___ day of June, 2004, 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 Xxxxx Fargo Bank, N.A., as
Indenture Trustee, one of the corporations described in and which executed the
above instrument; that he/she knows the seal of said corporation; that the seal
affixed to said instrument is such corporate seal; that it was so affixed by
order of the Board of Directors of said corporation; and that he/she signed
his/her name thereto by like order.
Notary Public
NOTORIAL SEAL
--------
*Thisreconciliation and tie shall not, for any purpose, be deemed to be part of
the within indenture.
66
EXHIBIT A-1
FORM OF TERM 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 2004-HE3
GMACM Home Equity Loan-Backed Note, Class A-__
Registered Initial Note Balance: $---------
No. A-__-1 Note Rate: Variable
CUSIP NO. _________
GMACM Home Equity Loan Trust 2004-HE3, a statutory trust duly organized
and existing under the laws of the State of Delaware (herein referred to as the
"Issuer"), for value received, hereby promises to pay to Cede & Co. or its
registered assigns, the principal sum of __________________dollars ($_________),
payable on each Payment Date in an amount equal to the pro rata portion
allocable hereto (based on the Initial Note Balance specified above and the
Initial Note Balance of all Class A-__ Notes) of the aggregate amount, if any,
payable from the Note Payment Account in respect of principal of the Class A-__
Notes (the "Notes") pursuant to Section 3.05 of the indenture dated as of June
30, 2004 (the "Indenture"), between the Issuer and Xxxxx Fargo Bank, N.A., as
indenture trustee (the "Indenture Trustee"); provided, however, that 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, provided further that, the entire
unpaid principal amount of this Note shall be due and payable on the Payment
Date occurring in October 2034, 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). The Note Rate
for each Interest Period will be a floating rate equal to the least of (i) LIBOR
plus ___% per annum (or, for each Interest Period beginning after (a) any
Payment Date on which the aggregate Note Balance is less than 10% of the initial
aggregate Note Balance, LIBOR plus 0.50% per annum, or (b) the occurrence of an
Early Amortization Event, LIBOR plus ___%), (ii) the Net WAC Rate and (iii)
14.00% per annum. LIBOR for each applicable Interest Period will be determined
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 by the Indenture Trustee as set forth in the Indenture. "Net WAC
Rate" means 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 for each Class of Notes and the denominator of which is the Pool
Balance. "Net Loan Rate" means 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, 0.50% (50 basis points), adjusted to an effective rate
reflecting the methods by which interest is calculated on the related Classes of
Notes during such Interest Period. All determinations of LIBOR by the Indenture
Trustee shall, in the absence of manifest error, be conclusive for all purposes,
and each holder of this Note, by accepting this Note, agrees to be bound by such
determination. 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 2004-HE3 (the
"Series 2004-HE3 Notes"), all issued under the Indenture, to which Indenture and
all indentures supplemental thereto reference is hereby made for a statement of
the respective rights and obligations thereunder of the Issuer, the Indenture
Trustee and the Noteholders of the Series 2004-HE3 Notes. The Series 2004-HE3
Notes are subject to all terms of the Indenture.
The Series 2004-HE3 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 Security
Assurance Inc.
Principal of and interest on this Note will be payable on each Payment
Date, commencing on July 26, 2004, 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 October 2034 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
2004-HE3 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 2004-HE3 Notes, on behalf of the
Noteholders of all Series 2004-HE3 Notes, to waive compliance by the Issuer with
certain provisions of the Indenture and certain past defaults under the
Indenture and their consequences. Any such consent or waiver by the Noteholder
of this Note (or any one of more predecessor Notes) shall be conclusive and
binding upon such Noteholder and upon all future Noteholders of this Note and of
any Note issued upon the registration of transfer hereof or in exchange hereof
or in lieu hereof whether or not notation of such consent or waiver is made upon
this Note. The Indenture also permits the Issuer and the Indenture Trustee to
amend or waive certain terms and conditions set forth in the Indenture without
the consent of Noteholders of the Series 2004-HE3 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, Xxxxx Fargo Bank, N.A. in its individual capacity, any
owner of a beneficial interest in the Issuer, or any of their respective
partners, beneficiaries, agents, officers, directors, employees or successors or
assigns shall be personally liable for, nor shall recourse be had to any of them
for, the payment of principal of or interest on this Note or the performance of,
or the failure to perform, any of the covenants, obligations or indemnifications
contained in the Indenture. The Noteholder of this Note, by its acceptance
hereof, agrees that, except as expressly provided in the Basic Documents, in the
case of an Event of Default under the Indenture, such Noteholder shall have no
claim against any of the foregoing for any deficiency, loss or claim therefrom;
provided, however, that nothing contained herein shall be taken to prevent
recourse to, and enforcement against, the assets of the Issuer for any and all
liabilities, obligations and undertakings contained in the Indenture or in this
Note.
The Servicer shall have the right to purchase from the Issuer all of the
Mortgage Loans and related REO Property if the aggregate Note Balance of the
Notes as of any Payment Date is less than 10% of the aggregate Note Balance of
the Notes as of the Closing Date, (provided that 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 2004-HE3
By: WILMINGTON TRUST COMPANY, not in its
individual capacity but solely as Owner
Trustee
Dated: ___________________
By:
--------------------------------------
Authorized Signatory
CERTIFICATE OF AUTHENTICATION
This is one of the Notes referred to in the within-mentioned Indenture.
Xxxxx Fargo Bank, N.A.,
not in its individual capacity but solely as
Indenture Trustee
Dated: ___________________
By:
--------------------------------------
Authorized Signatory
ASSIGNMENT
Social Security or taxpayer I.D. or other identifying number of assignee:
_______________
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfer unto
_______________________________________
(name and address of assignee)
the within Note and all rights thereunder, and hereby irrevocably constitutes
and appoints ___________________________, attorney, to transfer said Note on the
books kept for registration thereof, with full power of substitution in the
premises.
Dated: */
--------------- -----------------------------------------
Signature Guaranteed:
____________________________________ */
--------
* NOTICE: The signature to this assignment must correspond with the name of the
registered owner as it appears on the face of the within Term Note in every
particular, without alteration, enlargement or any change whatever. Such
signature must be guaranteed by an "eligible guarantor institution" meeting the
requirements of the Note Registrar, which requirements include membership or
participation in STAMP or such other "signature guarantee program" as may be
determined by the Note Registrar in addition to, or in substitution for, STAMP,
all in accordance with the Securities Exchange Act of 1934, as amended.
EXHIBIT A-2
FORM OF VARIABLE PAY REVOLVING NOTES
THIS VARIABLE PAY REVOLVING NOTE HAS NOT BEEN AND WILL NOT BE REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED, OR THE SECURITIES LAWS OF ANY STATE AND
MAY NOT BE RESOLD OR TRANSFERRED UNLESS IT IS REGISTERED PURSUANT TO SUCH ACT
AND LAWS OR IS SOLD OR TRANSFERRED IN TRANSACTIONS THAT ARE EXEMPT FROM
REGISTRATION UNDER SUCH ACT AND UNDER APPLICABLE STATE LAW AND IS TRANSFERRED IN
ACCORDANCE WITH THE PROVISIONS OF SECTION 4.02 OF THE INDENTURE REFERRED TO
HEREIN.
THE PRINCIPAL OF THIS VARIABLE PAY REVOLVING NOTE IS PAYABLE IN INSTALLMENTS AS
SET FORTH HEREIN. ACCORDINGLY, THE OUTSTANDING PRINCIPAL AMOUNT OF THIS VARIABLE
PAY REVOLVING NOTE AT ANY TIME MAY BE LESS THAN THE AMOUNT SHOWN ON THE FACE
HEREOF.
THIS VARIABLE PAY REVOLVING 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.
THIS VARIABLE PAY REVOLVING NOTE MAY NOT BE SOLD OR TRANSFERRED TO ANY PLAN
SUBJECT TO ERISA OR SECTION 4975 OF THE CODE, TO ANY PERSON ACTING ON BEHALF OF
OR WITH "PLAN ASSETS" OF ANY SUCH PLAN, OR TO ANY OTHER BENEFIT PLAN INVESTOR
(AS DEFINED IN UNITED STATES DEPARTMENT OF LABOR REGULATION SECTION
2510.3-101(f)(2)) (A "BENEFIT PLAN INVESTOR"), INCLUDING AN INSURANCE COMPANY
GENERAL ACCOUNT, EXCEPT IN ACCORDANCE WITH THE RESTRICTIONS SET FORTH IN SECTION
4.02 of THE INDENTURE.
GMACM HOME EQUITY LOAN TRUST 2004-HE3
GMACM Home Equity Loan-Backed Variable Pay Revolving Note
Registered Initial Note Balance: $_________
No. Class A-__ VPRN-1 Maximum Note Balance: $_________
Note Rate: Floating
GMACM Home Equity Loan Trust 2004-HE3, a statutory trust duly organized
and existing under the laws of the State of Delaware (herein referred to as the
"Issuer"), for value received, hereby promises to pay to ____________ or its
registered assigns, the principal amount set forth on Schedule A attached hereto
from time to time (or otherwise owing hereunder as determined pursuant to the
Indenture as defined below), payable on each Payment Date in an amount equal to
the pro rata portion allocable hereto (based on the Note Balance of this
Variable Pay Revolving Note and the Note Balance of all Variable Pay Revolving
Notes) of the aggregate amount, if any, payable from the Note Payment Account in
respect of principal on the Variable Pay Revolving Notes (the "Variable Pay
Revolving Notes") pursuant to Section 3.05 of the indenture dated as of June 30,
2004 (the "Indenture"), between the Issuer and Xxxxx Fargo Bank, N.A., as
indenture trustee (the "Indenture Trustee"); provided, however, that the entire
unpaid principal amount of this Variable Pay Revolving Note shall be due and
payable on the Payment Date in October 2034, to the extent not previously paid
on a prior Payment Date. Capitalized terms used herein that are not otherwise
defined have the meanings ascribed thereto in Appendix A to the Indenture.
The Note Balance of this Variable Pay Revolving Note may be
increased or decrease from time to time in accordance with the Indenture, as the
same may be amended, restated, supplemented or otherwise modified from time to
time. The Holder of this Variable Pay Revolving Note may, in its discretion,
enter on Schedule A, a notation with respect to (i) each Advance made hereunder
and (ii) each payment and repayment of principal hereof. The failure of the
Holder to make any such notation on Schedule A shall not limit or otherwise
affect the obligation of the Issuer to repay the principal amount of this
Variable Pay Revolving Note in accordance with the terms of the Indenture.
Interest on this Variable Pay Revolving Note 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). The Note Rate for each Interest Period will be a floating rate
equal to the rate determined in accordance with the Indenture, which shall be
not more than the lesser of (i) LIBOR plus ___% per annum (or, for each Interest
Period beginning after any Payment Date on which the aggregate Note Balance is
less than 10% of the initial aggregate Note Balance, LIBOR plus 0.50% per annum)
and (ii) the Net WAC Rate. In addition, the margin on this Variable Pay
Revolving Note may be adjusted as set forth in Section 2.03 of the Indenture.
LIBOR for each applicable Interest Period will be determined 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 by the
Indenture Trustee as set forth in the Indenture. "Net WAC Rate" means 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
for each Class of Notes and the denominator of which is the Pool Balance. "Net
Loan Rate" means 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, 0.50% (50 basis points), adjusted to an effective rate
reflecting the methods by which interest is calculated on the related Classes of
Notes during such Interest Period. All determinations of LIBOR by the Indenture
Trustee shall, in the absence of manifest error, be conclusive for all purposes,
and each Noteholder of this Variable Pay Revolving Note, by accepting this
Variable Pay Revolving Note, agrees to be bound by such determination. Interest
on this Variable Pay Revolving Note will accrue for each Payment Date from the
most recent Payment Date on which interest has been paid (or, 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 Variable Pay Revolving 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 Variable Pay Revolving Note shall be
applied first to interest due and payable on this Variable Pay Revolving Note as
provided above and then to the unpaid principal of this Variable Pay Revolving
Note.
Unless the certificate of authentication hereon has been executed
by the Indenture Trustee whose name appears below by manual signature, this
Variable Pay Revolving Note shall not be entitled to any benefit under the
Indenture, or be valid or obligatory for any purpose.
This Variable Pay Revolving Note is one of a duly authorized
issue of Variable Pay Revolving Notes of the Issuer, designated as its GMACM
Home Equity Loan-Backed Variable Pay Revolving Notes, Series 2004-HE3 (herein
called the "Series 2004-HE3 Variable Pay Revolving 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 2004-HE3 Variable Pay Revolving Notes. The Series 2004-HE3 Variable Pay
Revolving Notes are subject to all terms of the Indenture.
The Series 2004-HE3 Variable Pay Revolving Notes and the Term
Notes (collectively, the "Notes") are and will be equally and ratably secured by
the collateral pledged as security therefor as provided in the Indenture.
This Variable Pay Revolving Note is entitled to the benefits of
an irrevocable and unconditional financial guaranty insurance policy issued by
Financial Security Assurance Inc.
Principal of and interest on this Variable Pay Revolving Note
will be payable on each Payment Date, commencing on July 26, 2004, as described
in the Indenture. "Payment Date" means the twenty-fifth day of each month, or,
if any such day is not a Business Day, then the next succeeding Business Day.
The entire unpaid principal amount of this Variable Pay Revolving
Note shall be due and payable in full on the Payment Date in October 2034
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 Variable Pay Revolving Notes shall be
made pro rata to the Noteholders of Variable Pay Revolving Notes entitled
thereto.
Payments of interest on this Variable Pay Revolving Note due and
payable on each Payment Date, together with the installment of principal, if
any, to the extent not in full payment of this Variable Pay Revolving Note,
shall be made by wire transfer to an account specified in writing by such
Noteholder reasonably satisfactory to the Indenture Trustee as of the preceding
record Date to the Person whose name appears as the registered Noteholder of
this Variable Pay Revolving Note (or one or more Predecessor Notes) on the Note
Register as of the close of business on each Record Date. Any reduction in the
principal amount of this Variable Pay Revolving Note (or any one or more
predecessor Variable Pay Revolving Notes) effected by any payments made on any
Payment Date shall be binding upon all future noteholders of this Variable Pay
Revolving Note and of any Variable Pay Revolving 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 Variable Pay Revolving 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 Variable Pay Revolving 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 Variable Pay Revolving Note may be
registered on the Note Register upon surrender of this Variable Pay Revolving
Note for registration of transfer at the Corporate Trust Office of the Indenture
Trustee, duly endorsed by, and 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 Securities Exchange Act of 1934, as amended, and thereupon one or more new
Variable Pay Revolving 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 Variable Pay Revolving 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 Variable Pay Revolving Note.
Each Noteholder of a Variable Pay Revolving Note, by its
acceptance of a Variable Pay Revolving 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 Variable Pay Revolving 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 of a Variable Pay Revolving Note, by its
acceptance of a Variable Pay Revolving Note, covenants and agrees by accepting
the benefits of the Indenture that such Noteholder 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 Variable Pay Revolving Notes, the Indenture or the other Basic
Documents.
No transfer, sale, pledge or other disposition of a Variable Pay
Revolving Note shall be made unless such transfer, sale, pledge or other
disposition is exempt from the registration requirements of the Securities Act,
and any applicable state securities laws or is made in accordance with said Act
and laws. In addition, any transfer, sale, pledge or other disposition of a
Variable Pay Revolving Note shall be made in accordance with the restrictions
contained in Article IV of the Indenture. In the event of any such transfer, the
Indenture Trustee or the Issuer shall require the transferee to execute either
(i) an investment letter in substantially the form attached to the Indenture as
Exhibit B (or in such form and substance reasonably satisfactory to the
Indenture Trustee and the Issuer) which investment letters shall not be an
expense of the Trust, the Owner Trustee, the Indenture Trustee, the Servicer,
the Depositor or the Issuer and which investment letter states that, among other
things, such transferee (a) is a "qualified institutional buyer" as defined
under Rule 144A, acting for its own account or the accounts of other "qualified
institutional buyers" as defined under Rule 144A, and (b) is aware that the
proposed transferor intends to rely on the exemption from registration
requirements under the Securities Act, provided by Rule 144A or (ii) the
Indenture Trustee shall require the transferee to execute an investment letter
in substantially the form of Exhibit D to the Indenture, acceptable to and in
form and substance reasonably satisfactory to the Issuer and the Indenture
Trustee certifying to the Issuer and the Indenture Trustee the facts surrounding
such transfer, which investment letter shall not be an expense of the Indenture
Trustee or the Issuer. Any Noteholder of a Variable Pay Revolving Note that does
not execute such a certificate or transfer letter shall be deemed to have made
the representations set forth therein. The Noteholder of a Variable Pay
Revolving Note desiring to effect such transfer shall, and does hereby agree to,
indemnify the Indenture Trustee, the Enhancer and the Issuer against any
liability that may result if the transfer is not so exempt or is not made in
accordance with such federal and state laws.
The Issuer has entered into the Indenture and this Variable Pay
Revolving Note is issued with the intention that, for federal, state and local
income, single business and franchise tax purposes, the Variable Pay Revolving
Notes will qualify as indebtedness of the Issuer. Each Noteholder of a Variable
Pay Revolving Note, by its acceptance of a Variable Pay Revolving Note, agrees
to treat the Variable Pay Revolving 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
Variable Pay Revolving Note, the Issuer, the Indenture Trustee and any agent of
the Issuer or the Indenture Trustee may treat the Person in whose name this
Variable Pay Revolving Note (as of the day of determination or as of such other
date as may be specified in the Indenture) is registered as the owner hereof for
all purposes, whether or not this Variable Pay Revolving 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 as 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 2004-HE3 Variable Pay Revolving 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 at the time Outstanding and with prior
notice to the Rating Agencies. The Indenture also contains provisions permitting
the Noteholders of Notes representing specified percentages of the aggregate
Note Balance of the Series 2004-HE3 Variable Pay Revolving Notes, on behalf of
the Noteholders of all Series 2004-HE3 Variable Pay Revolving 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 Variable Pay Revolving Note (or any one of more
predecessor Variable Pay Revolving Notes) shall be conclusive and binding upon
such Noteholder and upon all future Noteholders of this Variable Pay Revolving
Note and of any Variable Pay Revolving 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 Variable Pay Revolving Note. The
Indenture also permits the Indenture Trustee to amend or waive certain terms and
conditions set forth in the Indenture without the consent of Noteholders of the
Series 2004-HE3 Variable Pay Revolving Notes issued thereunder but with prior
notice to the Rating Agencies and the Enhancer.
The term "Issuer" as used in this Variable Pay Revolving Note
includes any successor to 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 Variable Pay Revolving Notes under the Indenture.
The Variable Pay Revolving Notes are issuable only in registered
form in denominations as provided in the Indenture, subject to certain
limitations therein set forth.
This Variable Pay Revolving 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
Variable Pay Revolving 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 Variable Pay Revolving 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, Xxxxx Fargo Bank, N.A., in its individual capacity, any
owner of a beneficial interest in the Issuer, or any of their respective
partners, beneficiaries, agents, officers, directors, employees or successors or
assigns shall be personally liable for, nor shall recourse be had to any of them
for, the payment of principal of or interest on this Variable Pay Revolving Note
or performance of, or omission to perform, any of the covenants, obligations or
indemnifications contained in the Indenture. The Noteholder of this Variable Pay
Revolving 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 Variable Pay Revolving 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 2004-HE3
By: WILMINGTON TRUST COMPANY, not in its
individual capacity but solely as Owner
Trustee
Dated: ________
By:
--------------------------------------
Authorized Signatory
CERTIFICATE OF AUTHENTICATION
This is one of the Variable Pay Revolving Notes referred to in the
within-mentioned Indenture.
Xxxxx Fargo Bank, N.A.,
not in its individual capacity but solely as
Indenture Trustee
Dated: ____________
By:
--------------------------------------
Authorized Signatory
ASSIGNMENT
Social Security or taxpayer I.D. or other identifying number of assignee:
_______________
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfer unto
_______________________________________
(name and address of assignee)
the within Note and all rights thereunder, and hereby irrevocably constitutes
and appoints ___________________________, attorney, to transfer said Note on the
books kept for registration thereof, with full power of substitution in the
premises.
Dated: */
--------------- -----------------------------------------
Signature Guaranteed:
____________________________________ */
--------
* NOTICE: The signature to this assignment must correspond with the name of the
registered owner as it appears on the face of the within Term Note in every
particular, without alteration, enlargement or any change whatever. Such
signature must be guaranteed by an "eligible guarantor institution" meeting the
requirements of the Note Registrar, which requirements include membership or
participation in STAMP or such other "signature guarantee program" as may be
determined by the Note Registrar in addition to, or in substitution for, STAMP,
all in accordance with the Securities Exchange Act of 1934, as amended.
SCHEDULE A
TO
GMACM HOME EQUITY LOAN TRUST 2004-HE3
GMACM HOME EQUITY LOAN-BACKED VARIABLE PAY REVOLVING NOTE
============ ====================== ================ =================== ========================
DATE ADVANCES PRINCIPAL NOTE BALANCE AUTHORIZED SIGNATURE
PAYMENTS OUTSTANDING OF HOLDER
------------ ---------------------- ---------------- ------------------- ------------------------
------------ ---------------------- ---------------- ------------------- ------------------------
------------ ---------------------- ---------------- ------------------- ------------------------
------------ ---------------------- ---------------- ------------------- ------------------------
------------ ---------------------- ---------------- ------------------- ------------------------
------------ ---------------------- ---------------- ------------------- ------------------------
------------ ---------------------- ---------------- ------------------- ------------------------
------------ ---------------------- ---------------- ------------------- ------------------------
------------ ---------------------- ---------------- ------------------- ------------------------
------------ ---------------------- ---------------- ------------------- ------------------------
------------ ---------------------- ---------------- ------------------- ------------------------
------------ ---------------------- ---------------- ------------------- ------------------------
------------ ---------------------- ---------------- ------------------- ------------------------
------------ ---------------------- ---------------- ------------------- ------------------------
------------ ---------------------- ---------------- ------------------- ------------------------
------------ ---------------------- ---------------- ------------------- ------------------------
------------ ---------------------- ---------------- ------------------- ------------------------
------------ ---------------------- ---------------- ------------------- ------------------------
------------ ---------------------- ---------------- ------------------- ------------------------
------------ ---------------------- ---------------- ------------------- ------------------------
------------ ---------------------- ---------------- ------------------- ------------------------
------------ ---------------------- ---------------- ------------------- ------------------------
------------ ---------------------- ---------------- ------------------- ------------------------
------------ ---------------------- ---------------- ------------------- ------------------------
------------ ---------------------- ---------------- ------------------- ------------------------
------------ ---------------------- ---------------- ------------------- ------------------------
------------ ---------------------- ---------------- ------------------- ------------------------
------------ ---------------------- ---------------- ------------------- ------------------------
------------ ---------------------- ---------------- ------------------- ------------------------
------------ ---------------------- ---------------- ------------------- ------------------------
------------ ---------------------- ---------------- ------------------- ------------------------
------------ ---------------------- ---------------- ------------------- ------------------------
------------ ---------------------- ---------------- ------------------- ------------------------
------------ ---------------------- ---------------- ------------------- ------------------------
------------ ---------------------- ---------------- ------------------- ------------------------
------------ ---------------------- ---------------- ------------------- ------------------------
------------ ---------------------- ---------------- ------------------- ------------------------
------------ ---------------------- ---------------- ------------------- ------------------------
------------ ---------------------- ---------------- ------------------- ------------------------
------------ ---------------------- ---------------- ------------------- ------------------------
------------ ---------------------- ---------------- ------------------- ------------------------
------------ ---------------------- ---------------- ------------------- ------------------------
------------ ---------------------- ---------------- ------------------- ------------------------
------------ ---------------------- ---------------- ------------------- ------------------------
------------ ---------------------- ---------------- ------------------- ------------------------
------------ ---------------------- ---------------- ------------------- ------------------------
============ ====================== ================ =================== ========================
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 June
30, 2004 (the "Indenture"), between GMACM Home Equity Loan Trust 2004-HE3, 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.
___ 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.
PPPPPPPPPPPPP
** 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.
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 ADVANCE REQUEST
To:
Holder of Variable Pay Revolving Note, Class A-__
[-------------------]
[-------------------]
[-------------------]
Re: Residential Asset Mortgage Products, Inc. GMACM Home Equity
Loan-Backed Certificates, Series 2004-HE3
Dear Sirs:
Reference is made to the Indenture, dated as of June 30, 2004
(the "Indenture") between GMACM Home Equity Loan Trust 2004-HE3, as Issuer, and
Xxxxx Fargo Bank, N.A., as Indenture Trustee. Capitalized terms used herein that
are not otherwise defined shall have the meanings ascribed thereto in Appendix A
to the Indenture. All other capitalized terms used herein shall have the
meanings specified herein.
Pursuant to Section 2.03 of the Indenture, you are hereby
requested to make an Advance as follows:
1. The amount of the requested Advance is $[_______].
2. Such Advance is requested to be made on or before
[__________].
3. The proceeds of such Advance will be used to pay the
outstanding Note Balance of the Class A-__ Notes on the related Targeted Final
Payment Date occurring on ________, 20__.
4. Such amount shall be wired to the following account:
Xxxxx Fargo Bank, N.A.
ABA # 121 000 248
Acct. # 3970771416 Acct. Name: Corporate Trust Clearing Ref:
GMACM 2004-HE3 - FFC to Acct.# [__]
Pursuant to the Indenture, you are required to notify the
undersigned, within thirty (30) Business Days of the date of this notice,
whether you will or will not make such Advance, subject to the terms and
conditions set forth in the Note Purchase Agreement. If you do not so notify the
undersigned, you will be deemed to have declined to make such Advance.
If you agree to make such Advance, you are required prior to the
close of business on the [date specified above in clause 2] to transfer to the
Indenture Trustee in immediately available funds the amount of such Advance.
Please acknowledge by signature below whether or not you will
make such Advance and return the same to the attention of Client Manager - GMACM
2004-HE3 at Xxxxx Fargo Bank, N.A. - Corporate Trust Services - GMACM --
2004-HE3, facsimile number (000) 000-0000.
Very truly yours,
XXXXX FARGO BANK, N.A., as Indenture Trustee
By:
---------------------------
Name:
-
Title:
-
I HEREBY ACKNOWLEDGE THAT [I][THE HOLDERS OF THE VARIABLE PAY
REVOLVING NOTES] WILL MAKE THE REQUESTED ADVANCE ON OR PRIOR TO
____________________, SUBJECT TO THE TERMS AND CONDITIONS SET FORTH IN THE NOTE
PURCHASE AGREEMENT.
[ ]
By:
------------------------------------
Name:
-
Title:
I HEREBY DECLINE THE REQUEST TO MAKE AN ADVANCE ON OR PRIOR TO
[-------------------].
[ ]
By:
------------------------------------
Name:
-
Title:
EXHIBIT D
FORM OF INVESTOR REPRESENTATION LETTER
_______________ , 20__
Re: GMACM HOME EQUITY LOAN TRUST 2004-HE3
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 2004-HE3 (the "Notes"), issued pursuant to
the Indenture (the "Indenture"), dated as of June 30, 2004 between GMACM
Home Equity Loan Trust 2004-HE3, as Issuer, and Xxxxx Fargo Bank, N.A.,
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 E
FORM OF TRANSFEROR CERTIFICATE
_______________ , 20__
Re: GMACM HOME EQUITY LOAN TRUST 2004-HE3
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 2004-HE3 (the "Notes"), issued pursuant to the Indenture (the
"Indenture"), dated as of June 30, 2004 between GMACM Home Equity Loan Trust
2004-HE3, as Issuer, and Xxxxx Fargo Bank, N.A., 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:
----------------------------
