EXECUTION COPY
GMACM HOME EQUITY LOAN TRUST 2007-HE1,
Issuer,
and
THE BANK OF NEW YORK TRUST COMPANY, N.A.,
Indenture Trustee
________________________
INDENTURE
________________________
Dated as of March 29, 2007
GMACM HOME EQUITY LOAN-BACKED TERM NOTES
TABLE OF CONTENTS
Page
ARTICLE I Definitions................................................................................2
Section 1.01 Definitions.......................................................................2
Section 1.02 Incorporation by Reference of Trust Indenture Act.................................2
Section 1.03 Rules of Construction.............................................................2
ARTICLE II Original Issuance of Notes.................................................................3
Section 2.01 Form..............................................................................3
Section 2.02 Execution, Authentication and Delivery............................................3
ARTICLE III Covenants..................................................................................4
Section 3.01 Collection of Payments with Respect to the Mortgage Loans.........................4
Section 3.02 Maintenance of Office or Agency...................................................4
Section 3.03 Money for Payments to Be Held in Trust; Paying Agent..............................4
Section 3.04 Existence.........................................................................6
Section 3.05 Priority of Distributions; Defaulted Interest.....................................6
Section 3.06 Protection of Trust Estate........................................................9
Section 3.07 Opinions as to Trust Estate......................................................10
Section 3.08 Performance of Obligations; Servicing Agreement..................................10
Section 3.09 Negative Covenants...............................................................11
Section 3.10 Annual Statement as to Compliance................................................11
Section 3.11 Recordation of Assignments.......................................................11
Section 3.12 Representations and Warranties Concerning the Mortgage Loans.....................12
Section 3.13 Assignee of Record of the Mortgage Loans.........................................12
Section 3.14 Servicer as Agent and Bailee of the Indenture Trustee............................12
Section 3.15 Investment Company Act...........................................................12
Section 3.16 Issuer May Consolidate, etc......................................................13
Section 3.17 Successor or Transferee..........................................................14
Section 3.18 No Other Business................................................................15
Section 3.19 No Borrowing.....................................................................15
Section 3.20 Guarantees, Loans, Advances and Other Liabilities................................15
Section 3.21 Capital Expenditures.............................................................15
Section 3.22 Owner Trustee Not Liable for Certificates or Related Documents...................15
Section 3.23 Restricted Payments..............................................................15
Section 3.24 Notice of Events of Default......................................................16
Section 3.25 Further Instruments and Acts.....................................................16
Section 3.26 Statements to Noteholders........................................................16
Section 3.27 Determination of Note Rate.......................................................16
Section 3.28 Payments under the Policy........................................................16
Section 3.29 Replacement/Additional Enhancement...............................................17
I
TABLE OF CONTENTS
(continued)
Page
Section 3.30 Additional Representations of Issuer.............................................17
Section 3.31 Yield Maintenance Agreement......................................................18
ARTICLE IV The Notes; Satisfaction And Discharge Of Indenture........................................19
Section 4.01 The Notes........................................................................19
Section 4.02 Registration of and Limitations on Transfer and Exchange of Notes;
Appointment of Certificate Registrar.............................................19
Section 4.03 Mutilated, Destroyed, Lost or Stolen Notes.......................................20
Section 4.04 Persons Deemed Owners............................................................21
Section 4.05 Cancellation.....................................................................21
Section 4.06 Book-Entry Notes.................................................................22
Section 4.07 Notices to Depository............................................................22
Section 4.08 Definitive Notes.................................................................23
Section 4.09 Tax Treatment....................................................................23
Section 4.10 Satisfaction and Discharge of Indenture..........................................23
Section 4.11 Application of Trust Money.......................................................24
Section 4.12 Subrogation and Cooperation......................................................25
Section 4.13 Repayment of Monies Held by Paying Agent.........................................25
Section 4.14 Temporary Notes..................................................................26
ARTICLE V Default And Remedies......................................................................26
Section 5.01 Events of Default................................................................26
Section 5.02 Acceleration of Maturity; Rescission and Annulment...............................26
Section 5.03 Collection of Indebtedness and Suits for Enforcement by Indenture Trustee........27
Section 5.04 Remedies; Priorities.............................................................29
Section 5.05 Optional Preservation of the Trust Estate........................................31
Section 5.06 Limitation of Suits..............................................................31
Section 5.07 Unconditional Rights of Noteholders to Receive Principal and Interest............32
Section 5.08 Restoration of Rights and Remedies...............................................32
Section 5.09 Rights and Remedies Cumulative...................................................32
Section 5.10 Delay or Omission Not a Waiver...................................................32
Section 5.11 Control by Enhancer or Noteholders...............................................33
Section 5.12 Waiver of Past Defaults..........................................................33
Section 5.13 Undertaking for Costs............................................................34
Section 5.14 Waiver of Stay or Extension Laws.................................................34
Section 5.15 Sale of Trust Estate.............................................................34
Section 5.16 Action on Notes..................................................................36
Section 5.17 Performance and Enforcement of Certain Obligations...............................36
II
TABLE OF CONTENTS
(continued)
Page
ARTICLE VI The Indenture Trustee.....................................................................37
Section 6.01 Duties of Indenture Trustee......................................................37
Section 6.02 Rights of Indenture Trustee......................................................39
Section 6.03 Individual Rights of Indenture Trustee...........................................40
Section 6.04 Indenture Trustee's Disclaimer...................................................40
Section 6.05 Notice of Event of Default.......................................................40
Section 6.06 Reports by Indenture Trustee to Noteholders......................................40
Section 6.07 Compensation and Indemnity.......................................................41
Section 6.08 Replacement of Indenture Trustee.................................................41
Section 6.09 Successor Indenture Trustee by Merger............................................42
Section 6.10 Appointment of Co-Indenture Trustee or Separate Indenture Trustee................43
Section 6.11 Eligibility; Disqualification....................................................44
Section 6.12 Preferential Collection of Claims Against Issuer.................................44
Section 6.13 Representations and Warranties...................................................44
Section 6.14 Directions to Indenture Trustee..................................................45
Section 6.15 Indenture Trustee May Own Securities.............................................45
ARTICLE VII Noteholders' Lists and Reports............................................................45
Section 7.01 Issuer to Furnish Indenture Trustee Names and Addresses of Noteholders...........45
Section 7.02 Preservation of Information; Communications to Noteholders.......................45
Section 7.03 Reports by Issuer................................................................46
Section 7.04 Reports by Indenture Trustee.....................................................46
Section 7.05 Exchange Act Reporting...........................................................47
ARTICLE VIII Accounts, Disbursements and Releases......................................................47
Section 8.01 Collection of Money..............................................................47
Section 8.02 Trust Accounts...................................................................47
Section 8.03 Officer's Certificate............................................................48
Section 8.04 Termination Upon Distribution to Noteholders.....................................48
Section 8.05 Release of Trust Estate..........................................................48
Section 8.06 Surrender of Notes Upon Final Payment............................................49
ARTICLE IX Supplemental Indentures...................................................................49
Section 9.01 Supplemental Indentures Without Consent of Noteholders...........................49
Section 9.02 Supplemental Indentures With Consent of Noteholders..............................50
Section 9.03 Execution of Supplemental Indentures.............................................52
Section 9.04 Effect of Supplemental Indenture.................................................52
Section 9.05 Conformity with Trust Indenture Act..............................................52
Section 9.06 Reference in Notes to Supplemental Indentures....................................52
III
TABLE OF CONTENTS
(continued)
Page
ARTICLE X Miscellaneous.............................................................................53
Section 10.01 Compliance Certificates and Opinions, etc........................................53
Section 10.02 Form of Documents Delivered to Indenture Trustee.................................55
Section 10.03 Acts of Noteholders..............................................................55
Section 10.04 Notices, etc., to Indenture Trustee, Issuer, Enhancer and Rating Agencies........56
Section 10.05 Notices to Noteholders; Waiver...................................................57
Section 10.06 Alternate Payment and Notice Provisions..........................................57
Section 10.07 Conflict with Trust Indenture Act................................................57
Section 10.08 Effect of Headings...............................................................58
Section 10.09 Successors and Assigns...........................................................58
Section 10.10 Severability.....................................................................58
Section 10.11 Benefits of Indenture............................................................58
Section 10.12 Legal Holidays...................................................................58
Section 10.13 GOVERNING LAW....................................................................58
Section 10.14 Counterparts.....................................................................58
Section 10.15 Recording of Indenture...........................................................58
Section 10.16 Issuer Obligation................................................................59
Section 10.17 No Petition......................................................................59
Section 10.18 Inspection.......................................................................59
ARTICLE XI REMIC Provisions..........................................................................60
Section 11.01 REMIC Administration.............................................................60
Section 11.02 Servicer, REMIC Administrator and Indenture Trustee Indemnification..............63
Section 11.03 Designation of REMIC(s)..........................................................64
EXHIBITS
Exhibit A - Form of Notes
Exhibit B - Form of 144A Investment Representation
Exhibit C - Form of Investor Representation Letter
Exhibit D - Form of Transferor Certificate
Appendix A - Definitions
IV
RECONCILIATION AND TIE BETWEEN TRUST INDENTURE
ACT OF 1939 AND INDENTURE PROVISIONS*
Trust Indenture
Act Section Indenture Section
____________________________________________________________________________________________
310(a)(1)...............................................................................6.11
(a)(2)..................................................................................6.11
(a)(3)..................................................................................6.10
(a)(4)........................................................................Not Applicable
(a)(5)..................................................................................6.11
(b)...............................................................................6.08, 6.11
(c)...........................................................................Not Applicable
311(a)..................................................................................6.12
(b).....................................................................................6.12
(c)...........................................................................Not Applicable
312(a).........................................................................7.01, 7.02(a)
(b)..................................................................................7.02(b)
(c)..................................................................................7.02(c)
313(a)..................................................................................7.04
(b).....................................................................................7.04
(c).......................................................................7.03(a)(iii), 7.04
(d).....................................................................................7.04
314(a).........................................................................3.10, 7.03(a)
(b).....................................................................................3.07
(c)(1).....................................................................8.05(c), 10.01(a)
(c)(2).....................................................................8.05(c), 10.01(a)
(c)(3)........................................................................Not Applicable
(d)(1).....................................................................8.05(c), 10.01(b)
(d)(2).....................................................................8.05(c), 10.01(b)
(d)(3).....................................................................8.05(c), 10.01(b)
(e).................................................................................10.01(a)
315(a)...............................................................................6.01(b)
(b).....................................................................................6.05
(c)..................................................................................6.01(a)
(d)..................................................................................6.01(c)
(d)(1)...............................................................................6.01(c)
(d)(2)...............................................................................6.01(c)
(d)(3)...............................................................................6.01(c)
(e).....................................................................................5.13
316(a)(1)(A)............................................................................5.11
316(a)(1)(B)............................................................................5.12
316(a)(2).....................................................................Not Applicable
316(b)..................................................................................5.07
317(a)(1)...............................................................................5.04
317(a)(2)............................................................................5.03(d)
317(b)...............................................................................3.03(a)
318(a).................................................................................10.07
___________________________
*This reconciliation and tie shall not, for any purpose, be deemed to be part of the within indenture.
This Indenture, dated as of March 29, 2007, is between GMACM Home Equity Loan Trust 2007-HE1, a Delaware
statutory trust, as issuer (the "Issuer"), and The Bank of New York Trust Company, N.A., as indenture trustee
(the "Indenture Trustee").
WITNESSETH:
Each party hereto agrees as follows for the benefit of the other party and for the equal and ratable
benefit of the Noteholders and the Enhancer of the Issuer's Series 2007-HE1 GMACM Home Equity Loan-Backed Term
Notes (the "Notes").
GRANTING CLAUSE:
The Issuer hereby Grants to the Indenture Trustee on the Closing Date, as trustee for the benefit of the
Noteholders and the Enhancer, all of the Issuer's right, title and interest in and to all accounts, chattel
paper, general intangibles, contract rights, payment intangibles, certificates of deposit, deposit accounts,
instruments, documents, letters of credit, money, advices of credit, investment property, goods and other
property consisting of, arising under or related to whether now existing or hereafter created in any of the
following: (a) the Initial Mortgage Loans and any Subsequent Mortgage Loans, and all monies due or to become due
thereunder; (b) the Custodial Account, Note Payment Account, Pre-Funding Account and Capitalized Interest
Account, and all funds on deposit or credited thereto from time to time; (c) the Policy and all hazard insurance
policies; (d) the Yield Maintenance Agreement; and (e) all present and future claims, demands, causes and choses
in action in respect of any or all of the foregoing and all payments on or under, and all proceeds of every kind
and nature whatsoever in respect of, any or all of the foregoing and all payments on or under, and all proceeds
of every kind and nature whatsoever in the conversion thereof, voluntary or involuntary, into cash or other
liquid property, all cash proceeds, accounts, accounts receivable, notes, drafts, acceptances, checks, deposit
accounts, rights to payment of any and every kind, and other forms of obligations and receivables, instruments
and other property which at any time constitute all or part of or are included in the proceeds of any of the
foregoing (collectively, the "Trust Estate" or the "Collateral").
The foregoing Grant is made in trust to secure the payment of principal of and interest on, and any
other amounts owing in respect of, the Notes, equally and ratably without prejudice, priority or distinction, and
to secure compliance with the provisions of this Indenture, all as provided in this Indenture.
The foregoing Grant shall inure to the benefit of the Enhancer in respect of draws made on the Policy
and amounts owing from time to time pursuant to the Insurance Agreement (regardless of whether such amounts
relate to the Notes or the Certificates), and such Grant shall continue in full force and effect for the benefit
of the Enhancer until all such amounts owing to it have been repaid in full.
The Indenture Trustee, as trustee on behalf of the Noteholders, acknowledges such Xxxxx, accepts the
trust under this Indenture in accordance with the provisions hereof and agrees to perform its duties as Indenture
Trustee as required herein.
1
ARTICLE I
Definitions
Section 1.01 Definitions. For all purposes of this Indenture, except as otherwise expressly
provided herein or unless the context otherwise requires, capitalized terms not otherwise defined herein shall
have the meanings assigned to such terms in the Definitions attached hereto as Appendix A, which is incorporated
by reference herein. All other capitalized terms used herein shall have the meanings specified herein.
Section 1.02 Incorporation by Reference of Trust Indenture Act. Whenever this Indenture refers to
a provision of the Trust Indenture Act (the "TIA"), such provision is incorporated by reference in and made a
part of this Indenture. The following TIA terms used in this Indenture have the following meanings:
"Commission" means the Securities and Exchange Commission.
"indenture securities" means the Notes.
"indenture security holder" means a Noteholder.
"indenture to be qualified" means this Indenture.
"indenture trustee" or "institutional trustee" means the Indenture Trustee.
"obligor" on the indenture securities means the Issuer and any other obligor on the indenture
securities.
All other TIA terms used in this Indenture that are defined by XXX, defined by TIA reference to
another statute or defined by Commission rule have the meaning assigned to them by such definitions.
Section 1.03 Rules of Construction. Unless the context otherwise requires:
(a) a term has the meaning assigned to it;
(b) an accounting term not otherwise defined has the meaning assigned to it in accordance
with generally accepted accounting principles as in effect from time to time;
(c) "or" includes "and/or";
(d) "including" means "including without limitation";
(e) words in the singular include the plural and words in the plural include the singular;
(f) the term "proceeds" has the meaning ascribed thereto in the UCC; and
2
(g) any agreement, instrument or statute defined or referred to herein or in any
instrument or certificate delivered in connection herewith means such agreement, instrument or statute as from
time to time amended, modified or supplemented and includes (in the case of agreements or instruments) references
to all attachments thereto and instruments incorporated therein; references to a Person are also to its permitted
successors and assigns.
ARTICLE II
Original Issuance of Notes
Section 2.01 Form. The Notes, together with the Indenture Trustee's certificate of authentication,
shall be in substantially the form set forth in Exhibit A, with such appropriate insertions, omissions,
substitutions and other variations as are required or permitted by this Indenture and may have such letters,
numbers or other marks of identification and such legends or endorsements placed thereon as may, consistently
herewith, be determined by the officers executing the Notes, as evidenced by their execution thereof. Any
portion of the text of any Note may be set forth on the reverse thereof, with an appropriate reference thereto on
the face of such Note.
The Notes shall be typewritten, printed, lithographed or engraved or produced by any combination of
these methods, all as determined by the Authorized Officers executing such Notes, as evidenced by their execution
of such Notes.
The terms of the Notes set forth in Exhibit A are part of the terms of this Indenture.
Section 2.02 Execution, Authentication and Delivery. The Notes shall be executed on behalf of the
Issuer by any of its Authorized Officers. The signature of any such Authorized Officer on the Notes may be
manual or facsimile.
Notes bearing the manual or facsimile signature of individuals who were at any time Authorized Officers
of the Issuer shall bind the Issuer, notwithstanding that such individuals or any of them have ceased to hold
such offices prior to the authentication and delivery of such Notes or did not hold such offices at the date of
such Notes.
The Indenture Trustee shall upon Issuer Request authenticate and deliver Notes for original issue in an
amount equal to the Initial Aggregate Note Balance. The Class A-1, Class A-2, Class A-3, Class A-4 and Class
A-5 Notes shall have initial principal amounts of the Initial Class A-1 Note Balance, Initial Class A-2 Note
Balance, Initial Class A-3 Note Balance, Initial Class A-4 Note Balance and Initial Class A-5 Note Balance,
respectively.
Each Note shall be dated the date of its authentication. The Notes shall be issuable as registered
Book-Entry Notes, and the Notes shall be issuable in minimum denominations of $25,000 and integral multiples of
$1,000 in excess thereof.
No Note shall be entitled to any benefit under this Indenture or be valid or obligatory for any purpose,
unless there appears on such Note a certificate of authentication substantially in the form provided for herein
executed by the Indenture Trustee by the manual signature of one of its authorized signatories, and such
certificate upon any Note shall be conclusive evidence, and the only evidence, that such Note has been duly
authenticated and delivered hereunder.
3
ARTICLE III
Covenants
Section 3.01 Collection of Payments with Respect to the Mortgage Loans. The Indenture Trustee
shall establish and maintain with itself the Note Payment Account in which the Indenture Trustee shall, subject
to the terms of this paragraph, deposit, on the same day as it is received from the Servicer, each remittance
received by the Indenture Trustee with respect to the Mortgage Loans. The Indenture Trustee shall make all
payments of principal of and interest on the Notes, subject to Section 3.03 as provided in Section 3.05 herein
from monies on deposit in the Note Payment Account.
Section 3.02 Maintenance of Office or Agency. The Issuer will maintain in the City of New York,
New York, an office or agency where, subject to satisfaction of conditions set forth herein, Notes may be
surrendered for registration of transfer or exchange, and where notices and demands to or upon the Issuer in
respect of the Notes and this Indenture may be served. The Issuer hereby initially appoints the Indenture
Trustee to serve as its agent for the foregoing purposes. If at any time the Issuer shall fail to maintain any
such office or agency or shall fail to furnish the Indenture Trustee with the address thereof, such surrenders,
notices and demands may be made or served at the Corporate Trust Office, and the Issuer hereby appoints the
Indenture Trustee as its agent to receive all such surrenders, notices and demands.
Section 3.03 Money for Payments to Be Held in Trust; Paying Agent. As provided in Section 3.01,
all payments of amounts due and payable with respect to any Notes that are to be made from amounts withdrawn from
the Note Payment Account pursuant to Section 3.01 shall be made on behalf of the Issuer by the Indenture Trustee
or by the Paying Agent, and no amounts so withdrawn from the Note Payment Account for payments of Notes shall be
paid over to the Issuer except as provided in this Section 3.03. The Issuer hereby appoints the Indenture
Trustee to act as initial Paying Agent hereunder. The Issuer will cause each Paying Agent other than the
Indenture Trustee to execute and deliver to the Indenture Trustee an instrument in which such Paying Agent shall
agree with the Indenture Trustee (and if the Indenture Trustee acts as Paying Agent, it hereby so agrees),
subject to the provisions of this Section 3.03, that such Paying Agent will:
(a) hold all sums held by it for the payment of amounts due with respect to the Notes in
trust for the benefit of the Persons entitled thereto until such sums shall be paid to such Persons or otherwise
disposed of as herein provided and pay such sums to such Persons as herein provided;
4
(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 (including reporting payments of interest on the Notes
in excess of interest at the Net WAC Rate and interest on any of the foregoing in the form of Interest Carry
Forward Amounts, as payments on an interest rate cap agreement); and
(f) deliver to the Indenture Trustee a copy of the statement to Noteholders prepared with
respect to each Payment Date by the Servicer pursuant to Section 4.01 of the Servicing Agreement.
The Issuer may at any time, for the purpose of obtaining the satisfaction and discharge of this
Indenture or for any other purpose, by Issuer Request direct any Paying Agent to pay to the Indenture Trustee all
sums held in trust by such Paying Agent, such sums to be held by the Indenture Trustee upon the same trusts as
those upon which the sums were held by such Paying Agent; and upon such payment by any Paying Agent to the
Indenture Trustee, such Paying Agent shall be released from all further liability with respect to such money.
Subject to applicable laws with respect to escheat of funds, any money held by the Indenture Trustee or
any Paying Agent in trust for the payment of any amount due with respect to any Note and remaining unclaimed for
one year after such amount has become due and payable shall be discharged from such trust and be paid to the
Issuer on Issuer Request; and the Noteholder of such Note shall thereafter, as an unsecured general creditor,
look only to the Issuer for payment thereof (but only to the extent of the amounts so paid to the Issuer), and
all liability of the Indenture Trustee or such Paying Agent with respect to such trust money shall thereupon
cease; provided, however, that the Indenture Trustee or such Paying Agent, before being required to make any such
repayment, shall at the expense and direction of the Issuer cause to be published once, in an Authorized
Newspaper, notice that such money remains unclaimed and that, after a date specified therein, which shall not be
less than 30 days from the date of such publication, any unclaimed balance of such money then remaining will be
repaid to the Issuer. The Indenture Trustee may also adopt and employ, at the expense and direction of the
Issuer, any other reasonable means of notification of such repayment (including, but not limited to, mailing
notice of such repayment to the Enhancer and Noteholders of the Notes which have been called but have not been
surrendered for redemption or whose right to or interest in monies due and payable but not claimed is
determinable from the records of the Indenture Trustee or of any Paying Agent, at the last address of record for
each such Noteholder).
5
Section 3.04 Existence. The Issuer will keep in full effect its existence, rights and franchises
as a statutory trust under the laws of the State of Delaware (unless it becomes, or any successor Issuer
hereunder is or becomes, organized under the laws of any other state or of the United States of America, in which
case the Issuer will keep in full effect its existence, rights and franchises under the laws of such other
jurisdiction) and will obtain and preserve its qualification to do business in each jurisdiction in which such
qualification is or shall be necessary to protect the validity and enforceability of this Indenture, the Notes,
the Mortgage Loans and each other instrument or agreement included in the Trust Estate.
Section 3.05 Priority of Distributions; Defaulted Interest.
(a) In accordance with Section 3.03(a) of the Servicing Agreement, the priority of
distributions on each Payment Date from Principal Collections and Interest Collections with respect to the
Mortgage Loans, any optional advance of delinquent principal or interest on the Mortgage Loans made by the
Servicer in respect of the related Collection Period, any Policy Draw Amount deposited into the Note Payment
Account (to be applied solely with respect to the payment of amounts described in clauses (i) and (vi) under this
Section 3.05(a)), and any amounts transferred to the Note Payment Account from the Pre-Funding Account and
Capitalized Interest Account pursuant to Sections 3.18 and 3.19 of the Servicing Agreement, is as follows:
(i) from Interest Collections, to the Enhancer, the amount of the premium for the
Policy and any unpaid premium for the Policy from prior Payment Dates, with interest thereon as provided
in the Insurance Agreement;
(ii) from Interest Collections, any Capitalized Interest Requirement pursuant to
Section 3.19(b) of the Servicing Agreement and any Policy Draw Amount with respect to the Notes
deposited into the Note Payment Account on such Payment Date pursuant to Section 3.28(a)(ii), to the
Note Payment Account, for payment by the Paying Agent to the Noteholders, pro rata, 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(d), plus
any such amount remaining unpaid from prior Payment Dates;
(iii) from Principal Collections, for payment by the Paying Agent to the
Noteholders, as a distribution of principal on the Notes, the Principal Distribution Amount for such
Payment Date to be allocated to each Class of Notes as described in Section 3.05(b) below, until the
Note Balances thereof have been reduced to zero;
(iv) from Excess Spread, for payment by the Paying Agent to each Class of Notes, as
a distribution of principal on the Notes, in the priority set forth in section 3.05(b), an amount equal
to the Liquidation Loss Distribution Amount (excluding Liquidation Loss Amounts that have been allocated
to the reduction of the Note Balance of the Notes pursuant to Section 3.05(c) hereof) until the Note
Balance of each Class of Notes has been reduced to zero;
6
(v) to the Enhancer, to reimburse it for prior draws made on the Policy, with
interest thereon as provided in the Insurance Agreement;
(vi) from Excess Spread, or payment by the Paying Agent to the Noteholders of the
Class of Notes in the priority set forth in Section 3.05(b), the Overcollateralization Increase Amount,
if any, until the Note Balance of each Class of Notes has been reduced to zero;
(vii) to the Enhancer, any amounts owed to the Enhancer pursuant to the Insurance
Agreement other than amounts specified in clauses (i) or (v) above, with interest thereon as provided in
the Insurance Agreement;
(viii) to the Indenture Trustee, any amounts owing to the Indenture Trustee pursuant
to Section 6.07 to the extent remaining unpaid;
(ix) after application of all Yield Maintenance Payments with respect to such
Payment Date, from Excess Spread remaining after the distributions pursuant to clauses (i) through
(viii), to pay each Class of Notes and for payment by the Paying Agent pursuant to the irrevocable
instruction of the holders of the Class SB Certificates (as the parties otherwise entitled to such
amounts as the owners of the REMIC III Regular Interests SB) as set forth in the Trust Agreement and
incorporated herein, pro rata in accordance with their respective amounts of Interest Carry Forward
Amounts
(x) 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 (iii) above
shall be equal to the Note Balance immediately prior to such Payment Date.
Amounts distributed to the Noteholders pursuant to the above clauses (ii), (iii), (iv) and (vi)
from Interest Collections, Principal Collections and the Policy Draw Amount shall be treated for tax purposes as
distributions with respect to the REMIC II Regular Interests A-1, A-2, A-3, A-4 and A-5, respectively. Amounts
distributed pursuant to clause (x) shall be treated as having been distributed to the REMIC II Regular Interest
SB-IO.
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).
7
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 Class A-1 Notes will be computed on the
basis of the actual number of days in each Interest Period and a 360 day year. Interest on the Class A-2, Class
A-3, Class A-4 and Class A-5 Notes will be computed on the basis of a 360-day year consisting of twelve 30-day
months. Any installment of interest or principal payable on any Note that is punctually paid or duly provided
for by the Issuer on the applicable Payment Date shall be paid to the Noteholder of record thereof on the
immediately preceding Record Date by wire transfer to an account specified in writing by such Noteholder
reasonably satisfactory to the Indenture Trustee, or by check or money order mailed to such Noteholder at such
Noteholder's address appearing in the Note Register, the amount required to be distributed to such Noteholder on
such Payment Date pursuant to such Noteholder's Notes; provided, that the Indenture Trustee shall not pay to any
such Noteholder any amounts required to be withheld from a payment to such Noteholder by the Code.
(b) The Principal Distribution Amount distributable pursuant to Section 3.05(a)(iii),
Liquidation Loss Distribution Amounts distributable to the holders of the Notes pursuant to Section 3.05(a)(iv)
and Overcollateralization Increase Amounts distributable to the holders of the Notes pursuant to Section
3.05(a)(vi) will be distributed as follows:
(i) first, to the Class A-5 Notes, an amount equal to the Class A-5 Lockout
Distribution Amount for that payment date, until the Note Balance thereof has been reduced to zero; and
(ii) second, to the Class A-1, Class A-2, Class A-3, Class A-4 and Class A-5 Notes
(without regard to the Class A-5 Lockout Distribution Amount), in that order, in each case until the
Note Balance thereof has been reduced to zero;
provided, however, that if an Enhancer Default has occurred and is continuing, payments of principal on
the Notes will be paid pro rata to the outstanding Classes of Notes.
(c) Principal of each Note shall be due and payable in full on the Final Payment Date as
provided in the applicable form of Note set forth in Exhibits A. All principal payments on the Notes shall be
made in accordance with the priorities set forth in Sections 3.05(a) and 3.05(b) to the Noteholders entitled
thereto in accordance with the related Percentage Interests represented thereby. Upon written notice to the
Indenture Trustee by the Issuer, the Indenture Trustee shall notify the Person in the name of which a Note is
registered at the close of business on the Record Date preceding the Final Payment Date or other final Payment
Date, as applicable. Such notice shall be mailed or faxed no later than five Business Days prior to the Final
Payment Date or such other final Payment Date and, unless such Note is then a Book-Entry Note, shall specify that
payment of the principal amount and any interest due with respect to such Note at the Final Payment Date or such
other final Payment Date will be payable only upon presentation and surrender of such Note, and shall specify the
place where such Note may be presented and surrendered for such final payment.
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On each Payment Date, the Overcollateralization Amount available to cover any Liquidation Loss
Amounts on such Payment Date shall be deemed to be reduced by an amount equal to such Liquidation Loss Amounts
(except to the extent that such Liquidation Loss Amounts were covered on such Payment Date by a payment in
respect of Liquidation Loss Amounts).
(d) With respect to any Payment Date, interest payments on the Notes will be reduced by
any Relief Act Shortfalls for the related Collection Period on a pro rata basis in accordance with the amount of
interest payable on the Notes on such Payment Date, absent such reduction.
(e) On each Payment Date, the Indenture Trustee shall apply any Yield Maintenance Payment
first as a payment to the Holders of the Class A-1 Notes in an amount not to exceed the Interest Carry Forward
Amount on the Class A-1 Notes as of such Payment Date, and the remainder to the Certificate Paying Agent for
payment to the Holders of the Class SB Certificates.
Section 3.06 Protection of Trust Estate.
(a) The Issuer shall from time to time execute and deliver all such supplements and
amendments hereto and all such financing statements, continuation statements, instruments of further assurance
and other instruments, and will take such other action necessary or advisable to:
(i) maintain or preserve the lien and security interest (and the priority thereof)
of this Indenture or carry out more effectively the purposes hereof;
(ii) perfect, publish notice of or protect the validity of any Grant made or to be
made by this Indenture;
(iii) cause the Trust to enforce any of the Mortgage Loans; or
(iv) preserve and defend title to the Trust Estate and the rights of the Indenture
Trustee and the Noteholders in such Trust Estate against the claims of all persons and parties.
(b) Except as otherwise provided in this Indenture, the Indenture Trustee shall not remove
any portion of the Trust Estate that consists of money or is evidenced by an instrument, certificate or other
writing from the jurisdiction in which it was held at the date of the most recent Opinion of Counsel delivered
pursuant to Section 3.07 (or from the jurisdiction in which it was held as described in the Opinion of Counsel
delivered at the Closing Date pursuant to Section 3.07, if no Opinion of Counsel has yet been delivered pursuant
to Section 3.07) unless the Indenture Trustee shall have first received an Opinion of Counsel to the effect that
the lien and security interest created by this Indenture with respect to such property will continue to be
maintained after giving effect to such action or actions.
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The Issuer hereby designates the Indenture Trustee its agent and attorney-in-fact to execute any
financing statement, continuation statement or other instrument required to be executed pursuant to this
Section 3.06.
Section 3.07 Opinions as to Trust Estate.
On the Closing Date, the Issuer shall furnish to the Indenture Trustee and the Owner Trustee an Opinion
of Counsel at the expense of the Issuer stating that, upon delivery of the Mortgage Notes relating to the Initial
Mortgage Loans to the Indenture Trustee or the Custodian in the State of Pennsylvania, the Indenture Trustee will
have a perfected, first priority security interest in such Mortgage Loans.
On or before December 31st in each calendar year, beginning in 2006, the Issuer shall furnish to the
Indenture Trustee an Opinion of Counsel at the expense of the Issuer either stating that, in the opinion of such
counsel, no further action is necessary to maintain a perfected, first priority security interest in the Mortgage
Loans until December 31 in the following calendar year or, if any such action is required to maintain such
security interest in the Mortgage Loans, such Opinion of Counsel shall also describe the recording, filing,
re-recording and refiling of this Indenture, any indentures supplemental hereto and any other requisite documents
and the execution and filing of any financing statements and continuation statements that will, in the opinion of
such counsel, be required to maintain the security interest in the Mortgage Loans until December 31 in the
following calendar year.
Section 3.08 Performance of Obligations; Servicing Agreement.
(a) The Issuer shall punctually perform and observe all of its obligations and agreements
contained in this Indenture, the Basic Documents and in the instruments and agreements included in the Trust
Estate.
(b) The Issuer may contract with other Persons to assist it in performing its duties under
this Indenture, and any performance of such duties by a Person identified to the Indenture Trustee in an
Officer's Certificate of the Issuer shall be deemed to be action taken by the Issuer.
(c) The Issuer shall not take any action or permit any action to be taken by others that
would release any Person from any of such Person's covenants or obligations under any of the documents relating
to the Mortgage Loans or under any instrument included in the Trust Estate, or that would result in the
amendment, hypothecation, subordination, termination or discharge of, or impair the validity or effectiveness of,
any of the documents relating to the Mortgage Loans or any such instrument, except such actions as the Servicer
is expressly permitted to take in the Servicing Agreement.
(d) The Issuer may retain an administrator and may enter into contracts with other Persons
for the performance of the Issuer's obligations hereunder, and performance of such obligations by such Persons
shall be deemed to be performance of such obligations by the Issuer.
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Section 3.09 Negative Covenants. So long as any Notes are Outstanding, the Issuer shall not:
(a) except as expressly permitted by this Indenture, sell, transfer, exchange or otherwise
dispose of the Trust Estate, unless directed to do so in writing by the Indenture Trustee pursuant to
Section 5.04 hereof;
(b) claim any credit on, or make any deduction from the principal or interest payable in
respect of, the Notes (other than amounts properly withheld from such payments under the Code) or assert any
claim against any present or former Noteholder by reason of the payment of the taxes levied or assessed upon any
part of the Trust Estate;
(c) (i) permit the validity or effectiveness of this Indenture to be impaired, or permit
the lien of this Indenture to be amended, hypothecated, subordinated, terminated or discharged, or permit any
Person to be released from any covenants or obligations with respect to the Notes under this Indenture except as
may be expressly permitted hereby, (ii) permit any lien, charge, excise, claim, security interest, mortgage or
other encumbrance (other than the lien of this Indenture) to be created on or extend to or otherwise arise upon
or burden the Trust Estate or any part thereof or any interest therein or the proceeds thereof or (iii) permit
the lien of this Indenture not to constitute a valid first priority security interest in the Trust Estate; or
(d) impair or cause to be impaired the Issuer's interest in the Mortgage Loans, the
Purchase Agreement or in any other Basic Document, if any such action would materially and adversely affect the
interests of the Noteholders or the Enhancer.
Section 3.10 Annual Statement as to Compliance. The Issuer shall deliver to the Indenture Trustee,
within 120 days after the end of each fiscal year of the Issuer (commencing with the fiscal year ending on
December 31, 2006), an Officer's Certificate stating, as to the Authorized Officer signing such Officer's
Certificate, that:
(a) a review of the activities of the Issuer during such year and of its performance under
this Indenture and the Trust Agreement has been made under such Authorized Officer's supervision; and
(b) to the best of such Authorized Officer's knowledge, based on such review, the Issuer
has complied with all conditions and covenants under this Indenture and the provisions of the Trust Agreement
throughout such year, or, if there has been a default in its compliance with any such condition or covenant,
specifying each such default known to such Authorized Officer and the nature and status thereof.
Section 3.11 Recordation of Assignments. The Issuer shall enforce the obligation, if any, of the
Sellers under the Purchase Agreement to submit or cause to be submitted for recordation all Assignments of
Mortgages within 60 days of receipt of recording information by the Servicer.
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Section 3.12 Representations and Warranties Concerning the Mortgage Loans.. The Indenture Trustee,
as pledgee of the Mortgage Loans, shall have the benefit of (i) the representations and warranties made by GMACM
in Section 3.1(a) and Section 3.1(b) of the Purchase Agreement, (ii) the benefit of the representations and
warranties made by WG Trust 2003 in Section 3.1(d) of the Purchase Agreement and (iii) the benefit of the
representations and warranties made by GMACM or WG Trust 2003, as applicable, in Section 2 of any Subsequent
Transfer Agreement, in each case, concerning the Mortgage Loans and the right to enforce the remedies against
GMACM or WG Trust 2003 provided in Section 3.1(e) of the Purchase Agreement, as applicable, to the same extent as
though such representations and warranties were made directly to the Indenture Trustee.
Section 3.13 Assignee of Record of the Mortgage Loans. As pledgee of the Mortgage Loans, the
Indenture Trustee shall hold title to the Mortgage Loans by being named as payee in the endorsements or
assignments of the Mortgage Notes and assignee in the Assignments of Mortgage to be delivered under Section 2.1
of the Purchase Agreement. Except as expressly provided in the Purchase Agreement or in the Servicing Agreement
with respect to any specific Mortgage Loan, the Indenture Trustee shall not execute any endorsement or assignment
or otherwise release or transfer such title to any of the Mortgage Loans until such time as the remaining Trust
Estate may be released pursuant to Section 8.05(b). The Indenture Trustee's holding of such title shall in all
respects be subject to its fiduciary obligations to the Noteholders hereunder.
Section 3.14 Servicer as Agent and Bailee of the Indenture Trustee. Solely for purposes of
perfection under Section 9-313 or 9-314 of the UCC or other similar applicable law, rule or regulation of the
state in which such property is held by the Servicer, the Issuer and the Indenture Trustee hereby acknowledge
that the Servicer is acting as agent and bailee of the Indenture Trustee in holding amounts on deposit in the
Custodial Account pursuant to Section 3.02 of the Servicing Agreement that are allocable to the Mortgage Loans,
as well as the agent and bailee of the Indenture Trustee in holding any Related Documents released to the
Servicer pursuant to Section 3.06(c) of the Servicing Agreement, and any other items constituting a part of the
Trust Estate which from time to time come into the possession of the Servicer. It is intended that, by the
Servicer's acceptance of such agency pursuant to Section 3.02 of the Servicing Agreement, the Indenture Trustee,
as a pledgee of the Mortgage Loans, will be deemed to have possession of such Related Documents, such monies and
such other items for purposes of Section 9-313 or 9-314 of the UCC of the state in which such property is held by
the Servicer.
Section 3.15 Investment Company Act. The Issuer shall not become an "investment company" or under
the "control" of an "investment company" as such terms are defined in the Investment Company Act of 1940, as
amended (or any successor or amendatory statute), and the rules and regulations thereunder (taking into account
not only the general definition of the term "investment company" but also any available exceptions to such
general definition); provided, however, that the Issuer shall be in compliance with this Section 3.15 if it shall
have obtained an order exempting it from regulation as an "investment company" so long as it is in compliance
with the conditions imposed in such order.
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Section 3.16 Issuer May Consolidate, etc.
(a) The Issuer shall not consolidate or merge with or into any other Person, unless:
(i) the Person (if other than the Issuer) formed by or surviving such
consolidation or merger shall be a Person organized and existing under the laws of the United States of
America or any state or the District of Columbia and shall expressly assume, by an indenture
supplemental hereto, executed and delivered to the Indenture Trustee, in form reasonably satisfactory to
the Indenture Trustee, the due and punctual payment of the principal of and interest on all Notes and to
the Certificate Paying Agent, on behalf of the Certificateholders and the performance or observance of
every agreement and covenant of this Indenture on the part of the Issuer to be performed or observed,
all as provided herein;
(ii) immediately after giving effect to such transaction, no Event of Default shall
have occurred and be continuing;
(iii) the Enhancer shall have consented thereto and each Rating Agency shall have
notified the Issuer that such transaction will not cause a Rating Event, without taking into account the
Policy;
(iv) the Issuer shall have received an Opinion of Counsel (and shall have delivered
copies thereof to the Indenture Trustee and the Enhancer) to the effect that such transaction will not
have any material adverse tax consequence to the Issuer, any Noteholder or any Certificateholder;
(v) any action that is necessary to maintain the lien and security interest
created by this Indenture shall have been taken; and
(vi) the Issuer shall have delivered to the Indenture Trustee an Officer's
Certificate and an Opinion of Counsel each stating that such consolidation or merger and such
supplemental indenture comply with this Article III and that all conditions precedent herein provided
for relating to such transaction have been complied with (including any filing required by the Exchange
Act).
(b) The Issuer shall not convey or transfer any of its properties or assets, including
those included in the Trust Estate, to any Person, unless:
(i) the Person that acquires by conveyance or transfer the properties and assets
of the Issuer the conveyance or transfer of which is hereby restricted shall (A) be a United States
citizen or a Person organized and existing under the laws of the United States of America or any state,
(B) expressly assumes, by an indenture supplemental hereto, executed and delivered to the Indenture
Trustee, in form satisfactory to the Indenture Trustee, the due and punctual payment of the principal of
and interest on all Notes and the performance or observance of every agreement and covenant of this
Indenture on the part of the Issuer to be performed or observed, all as provided herein, (C) expressly
agrees by means of such supplemental indenture that all right, title and interest so conveyed or
transferred shall be subject and subordinate to the rights of Noteholders of the Notes, (D) unless
otherwise provided in such supplemental indenture, expressly agrees to indemnify, defend and hold
harmless the Issuer against and from any loss, liability or expense arising under or related to this
Indenture and the Notes and (E) expressly agrees by means of such supplemental indenture that such
Person (or if a group of Persons, then one specified Person) shall make all filings with the Commission
(and any other appropriate Person) required by the Exchange Act in connection with the Notes;
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(ii) immediately after giving effect to such transaction, no Default or Event of
Default shall have occurred and be continuing;
(iii) the Enhancer shall have consented thereto, and each Rating Agency shall have
notified the Issuer that such transaction will not cause a Rating Event, if determined without regard to
the Policy;
(iv) the Issuer shall have received an Opinion of Counsel (and shall have delivered
copies thereof to the Indenture Trustee) to the effect that such transaction will not have any material
adverse tax consequence to the Issuer or any Noteholder;
(v) any action that is necessary to maintain the lien and security interest
created by this Indenture shall have been taken; and
(vi) the Issuer shall have delivered to the Indenture Trustee an Officer's
Certificate and an Opinion of Counsel each stating that such conveyance or transfer and such
supplemental indenture comply with this Article III and that all conditions precedent herein provided
for relating to such transaction have been complied with (including any filing required by the Exchange
Act).
Section 3.17 Successor or Transferee.
(a) Upon any consolidation or merger of the Issuer in accordance with Section 3.16(a), the
Person formed by or surviving such consolidation or merger (if other than the Issuer) shall succeed to, and be
substituted for, and may exercise every right and power of, the Issuer under this Indenture with the same effect
as if such Person had been named as the Issuer herein.
(b) Upon a conveyance or transfer of all the assets and properties of the Issuer pursuant
to Section 3.16(b), the Issuer shall be released from every covenant and agreement of this Indenture to be
observed or performed on the part of the Issuer with respect to the Notes immediately upon the delivery of
written notice to the Indenture Trustee of such conveyance or transfer.
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Section 3.18 No Other Business. The Issuer shall not engage in any business other than financing,
purchasing, owning and selling and managing the Mortgage Loans and the issuance of the Notes and Certificates in
the manner contemplated by this Indenture and the Basic Documents and all activities incidental thereto.
Section 3.19 No Borrowing. The Issuer shall not issue, incur, assume, guarantee or otherwise
become liable, directly or indirectly, for any indebtedness except for the Notes.
Section 3.20 Guarantees, Loans, Advances and Other Liabilities. Except as contemplated by this
Indenture or the other Basic Documents, the Issuer shall not make any loan or advance or credit to, or guarantee
(directly or indirectly or by an instrument having the effect of assuring another's payment or performance on any
obligation or capability of so doing or otherwise), endorse or otherwise become contingently liable, directly or
indirectly, in connection with the obligations, stocks or dividends of, or own, purchase, repurchase or acquire
(or agree contingently to do so) any stock, obligations, assets or securities of, or any other interest in, or
make any capital contribution to, any other Person.
Section 3.21 Capital Expenditures. The Issuer shall not make any expenditure (by long-term or
operating lease or otherwise) for capital assets (either realty or personalty).
Section 3.22 Owner Trustee Not Liable for Certificates or Related Documents. The recitals
contained herein shall be taken as the statements of the Issuer, and the Owner Trustee and the Indenture Trustee
assume no responsibility for the correctness of the recitals contained herein. The Owner Trustee and the
Indenture Trustee make no representations as to the validity or sufficiency of this Indenture or any other Basic
Document, of the Certificates (other than the signatures of the Owner Trustee or the Indenture Trustee on the
Certificates) or the Notes, or of any Related Documents. The Owner Trustee and the Indenture Trustee shall at no
time have any responsibility or liability with respect to the sufficiency of the Trust Estate or its ability to
generate the payments to be distributed to Certificateholders under the Trust Agreement or the Noteholders under
this Indenture, including, the compliance by the Depositor or the Sellers with any warranty or representation
made under any Basic Document or in any related document or the accuracy of any such warranty or representation,
or any action of the Certificate Paying Agent, the Certificate Registrar or any other person taken in the name of
the Owner Trustee or the Indenture Trustee.
Section 3.23 Restricted Payments. The Issuer shall not, directly or indirectly, (i) pay any
dividend or make any distribution (by reduction of capital or otherwise), whether in cash, property, securities
or a combination thereof, to the Owner Trustee or any owner of a beneficial interest in the Issuer or otherwise
with respect to any ownership or equity interest or security in or of the Issuer, (ii) redeem, purchase, retire
or otherwise acquire for value any such ownership or equity interest or security or (iii) set aside or otherwise
segregate any amounts for any such purpose; provided, however, that the Issuer may make, or cause to be made, (x)
distributions to the Owner Trustee and the Certificateholders as contemplated by, and to the extent funds are
available for such purpose under, the Trust Agreement and (y) payments to the Servicer pursuant to the terms of
the Servicing Agreement. The Issuer will not, directly or indirectly, make payments to or distributions from the
Custodial Account except in accordance with this Indenture and the other Basic Documents.
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Section 3.24 Notice of Events of Default. The Issuer shall give the Indenture Trustee, the
Enhancer and the Rating Agencies prompt written notice of each Event of Default hereunder and under the Trust
Agreement.
Section 3.25 Further Instruments and Acts. Upon request of the Indenture Trustee, the Issuer shall
execute and deliver such further instruments and do such further acts as may be reasonably necessary or proper to
carry out more effectively the purposes of this Indenture.
Section 3.26 Statements to Noteholders. On each Payment Date, each of the Indenture Trustee and
the Certificate Registrar shall make available to the Depositor, the Owner Trustee, each Rating Agency, each
Noteholder and each Certificateholder, with a copy to the Enhancer, the Servicing Certificate provided to the
Indenture Trustee by the Servicer relating to such Payment Date and delivered pursuant to Section 4.01 of the
Servicing Agreement.
The Indenture Trustee will make the Servicing Certificate (and, at its option, any additional files
containing the same information in an alternative format) available each month to Securityholders and the
Enhancer, and other parties to this Indenture via the Indenture Trustee's internet website. The Indenture
Trustee's internet website shall initially be located at "xxx.xxxxxxxx.xxx/xxx." Assistance in using the website
can be obtained by calling the Indenture Trustee's customer service desk at (000) 000-0000. Parties that are
unable to use the above distribution options are entitled to have a paper copy mailed to them via first class
mail by calling the customer service desk and indicating such. The Indenture Trustee shall have the right to
change the way the statement to Securityholders are distributed in order to make such distribution more
convenient or more accessible to the above parties and the Indenture Trustee shall provide timely and adequate
notification to all above parties regarding any such changes.
Section 3.27 Determination of Note Rate. The Indenture Trustee shall determine One-Month LIBOR and
the applicable Note Rate the Class A-1 Notes for each Interest Period as of the second LIBOR Business Day
immediately preceding (i) the Closing Date in the case of the first Interest Period for the Notes and (ii) the
first day of each succeeding Interest Period for the Class A-1 Notes, and shall inform the Issuer, the Servicer
and the Depositor by means of the Indenture Trustee's online service.
Section 3.28 Payments under the Policy.
(a) (i) If the Servicing Certificate specifies a Policy Draw Amount for any Payment
Date, the Indenture Trustee shall make a draw on the Policy in an amount specified in the Servicing Certificate
for such Payment Date or, if no amount is specified, the Indenture Trustee shall make a draw on the Policy in the
amount by which the amount on deposit in the Note Payment Account is less than interest due on the Notes on such
Payment Date.
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(ii) The Indenture Trustee shall deposit or cause to be deposited such Policy Draw
Amount into the Note Payment Account on such Payment Date to the extent such amount relates to a
Deficiency Amount or a Preference Amount.
(b) The Indenture Trustee shall submit, if a Policy Draw Amount is specified in any
statement to Securityholders prepared pursuant to Section 4.01 of the Servicing Agreement, the Notice (in the
form attached as Exhibit A to the Policy) to the Enhancer no later than 12:00 noon, New York City time, on the
third (3rd) Business Day prior to the applicable Payment Date.
Section 3.29 Replacement/Additional Enhancement. The Issuer (or the Servicer on its behalf) may,
at its expense, in accordance with and upon satisfaction of the conditions set forth herein, but shall not be
required to, obtain a surety bond, letter of credit, guaranty or reserve account as a Permitted Investment for
amounts on deposit in the Capitalized Interest Account, or may arrange for any other form of additional credit
enhancement; provided, that after prior notice thereto, no Rating Agency shall have informed the Issuer that a
Rating Event would occur as a result thereof (without taking the Policy into account); and provided further, that
the issuer of any such instrument or facility and the timing and mechanism for drawing on such additional
enhancement shall be acceptable to the Indenture Trustee and the Enhancer. It shall be a condition to
procurement of any such additional credit enhancement that there be delivered to the Indenture Trustee and the
Enhancer (a) an Opinion of Counsel, acceptable in form to the Indenture Trustee and the Enhancer, from counsel to
the provider of such additional credit enhancement with respect to the enforceability thereof and such other
matters as the Indenture Trustee or the Enhancer may require and (b) an Opinion of Counsel to the effect that the
procurement of such additional enhancement would not (i) adversely affect in any material respect the tax status
of the Notes or the Certificates or (ii) cause the Issuer to be taxable as an association (or a publicly traded
partnership) for federal income tax purposes or to be classified as a taxable mortgage pool within the meaning of
Section 7701(i) of the Code.
Section 3.30 Additional Representations of Issuer.
The Issuer hereby represents and warrants to the Indenture Trustee that as of the Closing Date (which
representations and warranties shall survive the execution of this Indenture):
(a) This Indenture creates a valid and continuing security interest (as defined in the
applicable UCC) in the Mortgage Notes in favor of the Indenture Trustee, which security interest is prior to all
other Liens (except as expressly permitted otherwise in this Indenture), and is enforceable as such as against
creditors of and purchasers from the Issuer.
(b) The Mortgage Notes constitute "instruments" within the meaning of the applicable UCC.
(c) The Issuer owns and has good and marketable title to the Mortgage Notes free and clear
of any Lien of any Person.
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(d) The original executed copy of each Mortgage Note (except for any Mortgage Note with
respect to which a Lost Note Affidavit has been delivered to the Custodian) has been delivered to the Custodian.
(e) The Issuer has received a written acknowledgment from the Custodian that the Custodian
is acting solely as agent of the Indenture Trustee for the benefit of the Noteholders and the Enhancer.
(f) Other than the security interest granted to the Indenture Trustee pursuant to this
Indenture, the Issuer has not pledged, assigned, sold, granted a security interest in, or otherwise conveyed any
of the Mortgage Notes. The Issuer has not authorized the filing of and is not aware of any financing statements
against the Issuer that include a description of collateral covering the Mortgage Notes other than any financing
statement relating to the security interest granted to the Indenture Trustee hereunder or any security interest
that has been terminated. The Issuer is not aware of any judgment or tax lien filings against the Issuer.
(g) None of the Mortgage Notes has any marks or notations indicating that they have been
pledged, assigned or otherwise conveyed to any Person other than the Indenture Trustee, except for (i) any
endorsements that are part of a complete chain of endorsements from the originator of the Mortgage Note to the
Indenture Trustee, and (ii) any marks or notations pertaining to Liens that have been terminated or released.
(h) None of the provisions of this Section 3.30 shall be waived without the prior written
confirmation from Standard & Poor's that such waiver shall not result in a reduction or withdrawal of the
then-current rating of the Notes.
Section 3.31 Yield Maintenance Agreement.
(a) In the event that the Indenture Trustee does not receive by the Business Day preceding
a Payment Date the amount as specified by the Servicer pursuant to Section 4.01(a)(xix) of the Servicing
Agreement as the amount to be paid with respect to such Payment Date by the YMA Provider under the Yield
Maintenance Agreement, the Indenture Trustee shall enforce the obligation of the YMA Provider thereunder. The
parties hereto acknowledge that the YMA Provider shall make all calculations, and shall determine the amounts to
be paid, under the Yield Maintenance Agreement. Absent manifest error, the Indenture Trustee may conclusively
rely on any servicing certificate received by it from the Servicer pursuant to Section 4.01 of the Servicing
Agreement.
(b) The Indenture Trustee shall deposit or cause to be deposited any amounts received
under the Yield Maintenance Agreement into the Note Payment Account on the date such amounts are received from
the YMA Provider under the Yield Maintenance Agreement (including termination payments, if any). All payments
received under the Yield Maintenance Agreement shall be distributed in accordance with the priorities set forth
in Section 3.05(e) hereof.
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ARTICLE IV
The Notes; Satisfaction And Discharge Of Indenture
Section 4.01 The Notes
(a) The Notes shall be registered in the name of a nominee designated by the Depository.
Beneficial Owners will hold interests in the Notes through the book-entry facilities of the Depository in minimum
initial Note Balances of $25,000 and integral multiples of $1,000 in excess thereof.
The Indenture Trustee may for all purposes (including the making of payments due on the Notes) deal with
the Depository as the authorized representative of the Beneficial Owners with respect to the Notes for the
purposes of exercising the rights of Noteholders hereunder. Except as provided in the next succeeding paragraph
of this Section 4.01, the rights of Beneficial Owners with respect to the Notes shall be limited to those
established by law and agreements between such Beneficial Owners and the Depository and Depository Participants.
Except as provided in Section 4.08, Beneficial Owners shall not be entitled to definitive certificates for the
Notes as to which they are the Beneficial Owners. Requests and directions from, and votes of, the Depository as
Noteholder of the Notes shall not be deemed inconsistent if they are made with respect to different Beneficial
Owners. The Indenture Trustee may establish a reasonable record date in connection with solicitations of
consents from or voting by Noteholders and give notice to the Depository of such record date. Without the
consent of the Issuer and the Indenture Trustee, no Term Note may be transferred by the Depository except to a
successor Depository that agrees to hold such Note for the account of the Beneficial Owners.
In the event the Depository Trust Company resigns or is removed as Depository, the Indenture Trustee, at
the request of the Servicer and with the approval of the Issuer may appoint a successor Depository. If no
successor Depository has been appointed within 30 days of the effective date of the Depository's resignation or
removal, each Beneficial Owner shall be entitled to certificates representing the Notes it beneficially owns in
the manner prescribed in Section 4.08.
The Notes shall, on original issue, be executed on behalf of the Issuer by the Owner Trustee, not in its
individual capacity but solely as Owner Trustee and upon Issuer Order, authenticated by the Note Registrar and
delivered by the Indenture Trustee to or upon the order of the Issuer.
Section 4.02 Registration of and Limitations on Transfer and Exchange of Notes; Appointment of
Certificate Registrar. The Issuer shall cause to be kept at the Indenture Trustee's Corporate Trust Office a
Note Register in which, subject to such reasonable regulations as it may prescribe, the Note Registrar shall
provide for the registration of Notes and of transfers and exchanges of Notes as herein provided. The Issuer
hereby appoints the Indenture Trustee as the initial Note Registrar.
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Subject to the restrictions and limitations set forth below, upon surrender for registration of transfer
of any Note at the Corporate Trust Office, the Issuer shall execute, and the Note Registrar shall authenticate
and deliver, in the name of the designated transferee or transferees, one or more new Notes in authorized initial
Note Balances evidencing the same aggregate Percentage Interests.
Subject to the foregoing, at the option of the Noteholders, Notes may be exchanged for other Notes of
like tenor, in each case in authorized initial Note Balances evidencing the same aggregate Percentage Interests,
upon surrender of the Notes to be exchanged at the Corporate Trust Office of the Note Registrar. Whenever any
Notes are so surrendered for exchange, the Issuer shall execute and the Note Registrar shall authenticate and
deliver the Notes which the Noteholder making the exchange is entitled to receive. Each Note presented or
surrendered for registration of transfer or exchange shall (if so required by the Note Registrar) be duly
endorsed by, or be accompanied by a written instrument of transfer in form reasonably satisfactory to the Note
Registrar duly executed by, the Noteholder thereof or his attorney duly authorized in writing with such signature
guaranteed by a commercial bank or trust company located or having a correspondent located in The City of New
York. Notes delivered upon any such transfer or exchange will evidence the same obligations, and will be
entitled to the same rights and privileges, as the Notes surrendered.
No service charge shall be imposed for any registration of transfer or exchange of Notes, but the Note
Registrar shall require payment of a sum sufficient to cover any tax or governmental charge that may be imposed
in connection with any registration of transfer or exchange of Notes.
All Notes surrendered for registration of transfer and exchange shall be cancelled by the Note Registrar
and delivered to the Indenture Trustee for subsequent destruction without liability on the part of either.
The Issuer hereby appoints the Indenture Trustee as Certificate Registrar to keep at its Corporate Trust
Office a Certificate Register pursuant to Section 3.09 of the Trust Agreement in which, subject to such
reasonable regulations as it may prescribe, the Certificate Registrar shall provide for the registration of
Certificates and of transfers and exchanges thereof pursuant to Section 3.05 of the Trust Agreement. The
Indenture Trustee hereby accepts such appointment.
Each purchaser of a Note, by its acceptance of the Note, shall be deemed to have represented that the
acquisition of such Note by the purchaser does not constitute or give rise to a prohibited transaction under
Section 406 of ERISA or Section 4975 of the Code, for which no statutory, regulatory or administrative exemption
is available.
Section 4.03 Mutilated, Destroyed, Lost or Stolen Notes. If (i) any mutilated Note is surrendered
to the Indenture Trustee, or the Indenture Trustee receives evidence to its satisfaction of the destruction, loss
or theft of any Note, and (ii) there is delivered to the Indenture Trustee such security or indemnity as may be
required by it and the Issuer to hold the Issuer and the Indenture Trustee harmless, then, in the absence of
notice to the Issuer, the Note Registrar or the Indenture Trustee that such Note has been acquired by a bona fide
purchaser, and provided that the requirements of Section 8 405 of the UCC are met, the Issuer shall execute, and
upon its request the Indenture Trustee shall authenticate and deliver, in exchange for or in lieu of any such
mutilated, destroyed, lost or stolen Note, a replacement Note of the same class; provided, however, that if any
such destroyed, lost or stolen Note, but not a mutilated Note, shall have become or within seven days shall be
due and payable, instead of issuing a replacement Note, the Issuer may pay such destroyed, lost or stolen Note
when so due or payable without surrender thereof. If, after the delivery of such replacement Note or payment of
a destroyed, lost or stolen Note pursuant to the proviso to the preceding sentence, a bona fide purchaser of the
original Note in lieu of which such replacement Note was issued presents for payment such original Note, the
Issuer and the Indenture Trustee shall be entitled to recover such replacement Note (or such payment) from the
Person to whom it was delivered or any Person taking such replacement Note from such Person to whom such
replacement Note was delivered or any assignee of such Person, except a bona fide purchaser, and shall be
entitled to recover upon the security or indemnity provided therefor to the extent of any loss, damage, cost or
expense incurred by the Issuer or the Indenture Trustee in connection therewith.
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Upon the issuance of any replacement Note under this Section 4.03, the Issuer may require the payment by
the Noteholder of such Note of a sum sufficient to cover any tax or other governmental charge that may be imposed
in relation thereto and any other reasonable expenses (including the fees and expenses of the Indenture Trustee)
connected therewith.
Every replacement Note issued pursuant to this Section 4.03 in replacement of any mutilated, destroyed,
lost or stolen Note shall constitute an original additional contractual obligation of the Issuer, whether or not
the mutilated, destroyed, lost or stolen Note shall be at any time enforceable by anyone, and shall be entitled
to all the benefits of this Indenture equally and proportionately with any and all other Notes duly issued
hereunder.
The provisions of this Section 4.03 are exclusive and shall preclude (to the extent lawful) all other
rights and remedies with respect to the replacement or payment of mutilated, destroyed, lost or stolen Notes.
Section 4.04 Persons Deemed Owners. Prior to due presentment for registration of transfer of any
Note, the Issuer, the Indenture Trustee and any agent of the Issuer or the Indenture Trustee may treat the Person
in whose name any Note is registered (as of the day of determination) as the owner of such Note for the purpose
of receiving payments of principal of and interest, if any, on such Note and for all other purposes whatsoever,
whether or not such Note be overdue, and none of the Issuer, the Indenture Trustee or any agent of the Issuer or
the Indenture Trustee shall be affected by notice to the contrary.
Section 4.05 Cancellation. All Notes surrendered for payment, registration of transfer, exchange
or redemption shall, if surrendered to any Person other than the Indenture Trustee, be delivered to the Indenture
Trustee and shall be promptly cancelled by the Indenture Trustee. The Issuer may at any time deliver to the
Indenture Trustee for cancellation any Notes previously authenticated and delivered hereunder which the Issuer
may have acquired in any manner whatsoever, and all Notes so delivered shall be promptly cancelled by the
Indenture Trustee. No Notes shall be authenticated in lieu of or in exchange for any Notes cancelled as provided
in this Section 4.05, except as expressly permitted by this Indenture. All cancelled Notes may be held or
disposed of by the Indenture Trustee in accordance with its standard retention or disposal policy as in effect at
the time unless the Issuer shall direct by an Issuer Request that they be destroyed or returned to it; provided,
however, that such Issuer Request is timely and the Notes have not been previously disposed of by the Indenture
Trustee.
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Section 4.06 Book-Entry Notes. The Notes, upon original issuance, shall be issued in the form of
typewritten Notes representing the Book-Entry Notes, to be delivered to The Depository Trust Company, the initial
Depository, by, or on behalf of, the Issuer. Such Notes shall initially be registered on the Note Register in
the name of Cede & Co., the nominee of the initial Depository, and no Beneficial Owner shall receive a Definitive
Note representing such Beneficial Owner's interest in such Note, except as provided in Section 4.08. Unless and
until definitive, fully registered Notes (the "Definitive Notes") have been issued to Beneficial Owners pursuant
to Section 4.08:
(a) the provisions of this Section 4.06 shall be in full force and effect;
(b) the Note Registrar and the Indenture Trustee shall be entitled to deal with the
Depository for all purposes of this Indenture (including the payment of principal of and interest on the Notes
and the giving of instructions or directions hereunder) as the sole holder of the Notes, and shall have no
obligation to the Beneficial Owners;
(c) to the extent that the provisions of this Section 4.06 conflict with any other
provisions of this Indenture, the provisions of this Section 4.06 shall control;
(d) the rights of Beneficial Owners shall be exercised only through the Depository and
shall be limited to those established by law and agreements between such Owners of Notes and the Depository or
the Depository Participants. Unless and until Definitive Notes are issued pursuant to Section 4.08, the initial
Depository will make book-entry transfers among the Depository Participants and receive and transmit payments of
principal of and interest on the Notes to such Depository Participants; and
(e) whenever this Indenture requires or permits actions to be taken based upon
instructions or directions of Noteholders of Notes evidencing a specified percentage of the Note Balances of the
Notes, the Depository shall be deemed to represent such percentage only to the extent that it has received
instructions to such effect from Beneficial Owners or Depository Participants owning or representing,
respectively, such required percentage of the beneficial interest in the Notes and has delivered such
instructions to the Indenture Trustee.
Section 4.07 Notices to Depository. Whenever a notice or other communication to the Noteholders of
the Notes is required under this Indenture, unless and until Definitive Notes shall have been issued to
Beneficial Owners pursuant to Section 4.08, the Indenture Trustee shall give all such notices and communications
specified herein to be given to Noteholders of the Notes to the Depository, and shall have no obligation to the
Beneficial Owners.
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Section 4.08 Definitive Notes. If (i) the Depositor determines that the Depository is no longer
willing or able to properly discharge its responsibilities with respect to the Notes and the Depositor is unable
to locate a qualified successor, (ii) the Depositor, with the prior consent of the Beneficial Owners, notifies
the Indenture Trustee and the Depository that it has elected to terminate the book-entry system through the
Depository, or (iii) after the occurrence of an Event of Default, Beneficial Owners of Notes representing
beneficial interests aggregating at least a majority of the aggregate Term Note Balance of the Notes advise the
Depository in writing that the continuation of a book-entry system through the Depository is no longer in the
best interests of the Beneficial Owners, then the Depository shall notify all Beneficial Owners and the Indenture
Trustee of the occurrence of any such event and of the availability of Definitive Notes to Beneficial Owners
requesting the same. Upon surrender by the Depository to the Indenture Trustee of the typewritten Notes
representing the Book-Entry Notes by the Depository (or Percentage Interest of the Book-Entry Notes being
transferred pursuant to clause (iii) above), accompanied by registration instructions, the Issuer shall execute
and the Indenture Trustee shall authenticate the Definitive Notes in accordance with the instructions of the
Depository. None of the Issuer, the Note Registrar or the Indenture Trustee shall be liable for any delay in
delivery of such instructions, and each may conclusively rely on, and shall be protected in relying on, such
instructions. Upon the issuance of Definitive Notes, the Indenture Trustee shall recognize the Noteholders of
the Definitive Notes as Noteholders.
Section 4.09 Tax Treatment. The Issuer has entered into this Indenture, and the Notes will be
issued, with the intention that, for federal, state and local income, single business and franchise tax purposes,
the Notes (exclusive of any payment pursuant to the Yield Maintenance Agreement or in respect of Interest Carry
Forward Amounts) will qualify as regular interests in a REMIC as defined in the Code, which will be treated as
indebtedness for purposes of such taxes. The Issuer, by entering into this Indenture, and each Noteholder, by
its acceptance of its Note (and each Beneficial Owner by its acceptance of an interest in the applicable
Book-Entry Note), agree to treat the Notes (exclusive of any payment pursuant to the Yield Maintenance Agreement
or in respect of Interest Carry Forward Amounts) for federal, state and local income, single business and
franchise tax purposes as (i) regular interests in a REMIC as defined in the Code, which will be treated as
indebtedness for purposes of such taxes and (ii) the right to receive payments from outside the REMIC under the
Yield Maintenance Agreement and in respect of Interest Carry Forward Amounts.
Section 4.10 Satisfaction and Discharge of Indenture. This Indenture shall cease to be of further
effect with respect to the Notes except as to (i) rights of registration of transfer and exchange, (ii)
substitution of mutilated, destroyed, lost or stolen Notes, (iii) rights of Noteholders to receive payments of
principal thereof and interest thereon, (iv) Sections 3.03, 3.04, 3.06, 3.09, 3.16, 3.18 and 3.19, (v) the
rights, obligations and immunities of the Indenture Trustee hereunder (including the rights of the Indenture
Trustee under Section 6.07 and the obligations of the Indenture Trustee under Section 4.11) and (vi) the rights
of Noteholders as beneficiaries hereof with respect to the property so deposited with the Indenture Trustee
payable to all or any of them, and the Indenture Trustee, on written demand of and at the expense of the Issuer,
shall execute proper instruments acknowledging satisfaction and discharge of this Indenture with respect to the
Notes, when:
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(A) either:
(1) all Notes theretofore authenticated and delivered (other than (i) Notes
that have been destroyed, lost or stolen and that have been replaced or paid as
provided in Section 4.03 and (ii) Notes for whose payment money has theretofore been
deposited in trust or segregated and held in trust by the Issuer and thereafter repaid
to the Issuer or discharged from such trust, as provided in Section 3.03) have been
delivered to the Indenture Trustee for cancellation; or
(2) all Notes not theretofore delivered to the Indenture Trustee for
cancellation:
a) have become due and payable;
b) will become due and payable at the Final Payment Date within one
year; or
c) have been declared immediately due and payable pursuant to
Section 5.02.
and the Issuer, in the case of (a) and (b) above, has irrevocably deposited or caused to be irrevocably
deposited with the Indenture Trustee cash or direct obligations of or obligations guaranteed by the
United States of America (which will mature prior to the date such amounts are payable), in trust for
such purpose, in an amount sufficient to pay and discharge the entire indebtedness on such Notes and
Certificates then Outstanding not theretofore delivered to the Indenture Trustee for cancellation when
due on the Final Payment Date, as evidenced to the Indenture Trustee by an accountant's letter or an
Officer's Certificate of the Issuer;
(B) the Issuer has paid or caused to be paid all other sums payable hereunder and
under the Insurance Agreement by the Issuer; and
(C) the Issuer has delivered to the Indenture Trustee 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.
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Section 4.12 Subrogation and Cooperation. The Issuer and the Indenture Trustee acknowledge that
(i) to the extent the Enhancer makes payments under the Policy on account of principal of or interest on the
Notes, the Enhancer will be fully subrogated to the rights the Noteholders to receive such principal and
interest, and (ii) the Enhancer shall be paid such principal and interest only from the sources and in the manner
provided herein and in the Insurance Agreement for the payment of such principal and interest.
The Indenture Trustee shall cooperate in all respects with any reasonable request by the Enhancer for
action to preserve or enforce the Enhancer's rights or interest under this Indenture or the Insurance Agreement,
consistent with this Indenture and without limiting the rights of the Noteholders as otherwise set forth in the
Indenture, including upon the occurrence and continuance of a default under the Insurance Agreement, a request
(which request shall be in writing) to take any one or more of the following actions:
(i) institute Proceedings for the collection of all amounts then payable on the
Notes or under this Indenture in respect to the Notes and all amounts payable under the Insurance
Agreement and to enforce any judgment obtained and collect from the Issuer monies adjudged due;
(ii) sell the Trust Estate or any portion thereof or rights or interest therein, at
one or more public or private Sales (as defined in Section 5.15 hereof) called and conducted in any
manner permitted by law;
(iii) file or record all assignments that have not previously been recorded;
(iv) institute Proceedings from time to time for the complete or partial
foreclosure of this Indenture; and
(v) exercise any remedies of a secured party under the UCC and take any other
appropriate action to protect and enforce the rights and remedies of the Enhancer hereunder.
Following the payment in full of the Notes, the Enhancer shall continue to have all rights and
privileges provided to it under this Section and in all other provisions of this Indenture, until all amounts
owing to the Enhancer have been paid in full.
Section 4.13 Repayment of Monies Held by Paying Agent. In connection with the satisfaction and
discharge of this Indenture with respect to the Notes, all monies then held by any Paying Agent (other than the
Indenture Trustee) under the provisions of this Indenture with respect to such Notes shall, upon demand of the
Issuer, be paid to the Indenture Trustee to be held and applied according to Section 3.05; and thereupon, such
Paying Agent shall be released from all further liability with respect to such monies.
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Section 4.14 Temporary Notes. Pending the preparation of any Definitive Notes, the Issuer may
execute and upon its written direction, the Indenture Trustee may authenticate and make available for delivery,
temporary Notes that are printed, lithographed, typewritten, photocopied or otherwise produced, in any
denomination, substantially of the tenor of the Definitive Notes in lieu of which they are issued and with such
appropriate insertions, omissions, substitutions and other variations as the officers executing such Notes may
determine, as evidenced by their execution of such Notes.
If temporary Notes are issued, the Issuer will cause Definitive Notes to be prepared without
unreasonable delay. After the preparation of the Definitive Notes, the temporary Notes shall be exchangeable for
Definitive Notes upon surrender of the temporary Notes at the office or agency of the Indenture Trustee, without
charge to the Noteholder. Upon surrender for cancellation of any one or more temporary Notes, the Issuer shall
execute and the Indenture Trustee shall authenticate and make available for delivery, in exchange therefor,
Definitive Notes of authorized denominations and of like tenor and aggregate principal amount. Until so
exchanged, such temporary Notes shall in all respects be entitled to the same benefits under this Indenture as
Definitive Notes.
ARTICLE V
Default And Remedies
Section 5.01 Events of Default. The Issuer shall deliver to the Indenture Trustee and the
Enhancer, within five days after learning of the occurrence of any event that with the giving of notice and the
lapse of time would become an Event of Default under clause (c) of the definition of "Event of Default" written
notice in the form of an Officer's Certificate of its status and what action the Issuer is taking or proposes to
take with respect thereto.
Section 5.02 Acceleration of Maturity; Rescission and Annulment. If an Event of Default shall
occur and be continuing, then and in every such case the Indenture Trustee, acting at the direction of the
Enhancer or the Noteholders of Notes representing not less than a majority of the aggregate Note Balance of the
Notes, with the written consent of the Enhancer (so long as no Enhancer Default exists), may declare the Notes to
be immediately due and payable by a notice in writing to the Issuer (and to the Indenture Trustee if given by
Noteholders); and upon any such declaration, the unpaid principal amount of the Notes, together with accrued and
unpaid interest thereon through the date of acceleration, shall become immediately due and payable.
At any time after such declaration of acceleration of maturity with respect to an Event of Default has
been made and before a judgment or decree for payment of the money due has been obtained by the Indenture Trustee
as hereinafter provided in this Article V, the Enhancer or the Noteholders of Notes representing a majority of
the aggregate Note Balance of the Notes, with the written consent of the Enhancer, by written notice to the
Issuer and the Indenture Trustee, may in writing waive the related Event of Default and rescind and annul such
declaration and its consequences if:
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(a) the Issuer has paid or deposited with the Indenture Trustee a sum sufficient to pay:
(i) all payments of principal of and interest on the Notes and all other amounts
that would then be due hereunder or upon the Notes if the Event of Default giving rise to such
acceleration had not occurred;
(ii) all sums paid or advanced by the Indenture Trustee hereunder and the
reasonable compensation, expenses, disbursements and advances of the Indenture Trustee and its agents
and counsel; and
(iii) all Events of Default, other than the nonpayment of the principal of the Notes
that has become due solely by such acceleration, have been cured or waived as provided in Section 5.12.
No such rescission shall affect any subsequent default or impair any right consequent thereto.
Section 5.03 Collection of Indebtedness and Suits for Enforcement by Indenture Trustee.
(a) The Issuer covenants that if default in the payment of (i) any interest on any Note
when the same becomes due and payable, and such default continues for a period of five days, or (ii) the
principal of or any installment of the principal of any Note when the same becomes due and payable, the Issuer
shall, upon demand of the Indenture Trustee, pay to it, for the benefit of the Noteholders, the entire amount
then due and payable on the Notes for principal and interest, with interest on the overdue principal, and in
addition thereto such further amount as shall be sufficient to cover the costs and expenses of collection,
including the reasonable compensation, expenses, disbursements and advances of the Indenture Trustee and its
agents and counsel.
(b) In case the Issuer shall fail forthwith to pay such amounts upon such demand, the
Indenture Trustee, in its own name and as trustee of an express trust, subject to the provisions of Section 10.17
hereof, may institute a Proceeding for the collection of the sums so due and unpaid, and may prosecute such
Proceeding to judgment or final decree, and may enforce the same against the Issuer or other obligor on the Notes
and collect in the manner provided by law out of the property of the Issuer or other obligor on the Notes,
wherever situated, the monies adjudged or decreed to be payable.
(c) If an Event of Default shall occur and be continuing, the Indenture Trustee, subject
to the provisions of Section 10.17 hereof, may, as more particularly provided in Section 5.04, in its discretion
proceed to protect and enforce its rights and the rights of the Noteholders by such appropriate Proceedings as
the Indenture Trustee shall deem most effective to protect and enforce any such rights, whether for the specific
enforcement of any covenant or agreement in this Indenture or in aid of the exercise of any power granted herein,
or to enforce any other proper remedy or legal or equitable right vested in the Indenture Trustee by this
Indenture or by law.
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(d) If there shall be pending, relative to the Issuer or any other obligor on the Notes or
any Person having or claiming an ownership interest in the Trust Estate, Proceedings under Title 11 of the United
States Code or any other applicable federal or state bankruptcy, insolvency or other similar law, or if a
receiver, assignee or trustee in bankruptcy or reorganization, liquidator, sequestrator or similar official shall
have been appointed for or taken possession of the Issuer or its property or such other obligor or Person, or if
there shall be any other comparable judicial Proceedings relative to the Issuer or other any other obligor on the
Notes, or relative to the creditors or property of the Issuer or such other obligor, then the Indenture Trustee,
irrespective of whether the principal of any Notes shall then be due and payable as therein expressed or by
declaration or otherwise, and irrespective of whether the Indenture Trustee shall have made any demand pursuant
to the provisions of this Section, shall be entitled and empowered, by intervention in such Proceedings or
otherwise:
(i) to file and prove a claim or claims for the entire amount of principal and
interest owing and unpaid in respect of the Notes and to file such other papers or documents as may be
necessary or advisable in order to have the claims of the Indenture Trustee (including any claim for
reasonable compensation to the Indenture Trustee and each predecessor Indenture Trustee, and their
respective agents, attorneys and counsel, and for reimbursement of all expenses and liabilities
incurred, and all advances made, by the Indenture Trustee and each predecessor Indenture Trustee, except
as a result of negligence, willful misconduct or bad faith) and of the Noteholders allowed in such
Proceedings;
(ii) unless prohibited by applicable law and regulations, to vote on behalf of the
Noteholders in any election of a trustee, a standby trustee or Person performing similar functions in
any such Proceedings;
(iii) to collect and receive any monies or other property payable or deliverable on
any such claims and to distribute all amounts received with respect to the claims of the Noteholders and
of the Indenture Trustee on their behalf; and
(iv) to file such proofs of claim and other papers or documents as may be necessary
or advisable in order to have the claims of the Indenture Trustee or the Noteholders allowed in any
judicial proceedings relative to the Issuer, its creditors and its property;
and any trustee, receiver, liquidator, custodian or other similar official in any such Proceeding is hereby
authorized by each of such Noteholders to make payments to the Indenture Trustee, and, in the event the Indenture
Trustee shall consent to the making of payments directly to such Noteholders, to pay to the Indenture Trustee
such amounts as shall be sufficient to cover reasonable compensation to the Indenture Trustee, each predecessor
Indenture Trustee and their respective agents, attorneys and counsel, and all other expenses and liabilities
incurred, and all advances made, by the Indenture Trustee and each predecessor Indenture Trustee, except as a
result of negligence, willful misconduct or bad faith.
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(e) Nothing herein contained shall be deemed to authorize the Indenture Trustee to
authorize or consent to or vote for or accept or adopt on behalf of any Noteholder any plan of reorganization,
arrangement, adjustment or composition affecting the Notes or the rights of any Noteholder thereof or to
authorize the Indenture Trustee to vote in respect of the claim of any Noteholder in any such proceeding except,
as aforesaid, to vote for the election of a trustee in bankruptcy or similar Person.
(f) All rights of action and of asserting claims under this Indenture, or under any of the
Notes, may be enforced by the Indenture Trustee without the possession of any of the Notes or the production
thereof in any trial or other Proceedings relative thereto, and any such action or proceedings instituted by the
Indenture Trustee shall be brought in its own name as trustee of an express trust, and any recovery of judgment,
subject to the payment of the expenses, disbursements and compensation of the Indenture Trustee, each predecessor
Indenture Trustee and their respective agents and attorneys, shall be for the ratable benefit of the Holders of
the Notes.
(g) In any Proceedings to which the Indenture Trustee shall be a party (including any
Proceedings involving the interpretation of any provision of this Indenture), the Indenture Trustee shall be held
to represent all Noteholders, and it shall not be necessary to make any Noteholder a party to any such
Proceedings.
Section 5.04 Remedies; Priorities.
(a) If an Event of Default shall have occurred and be continuing, then the Indenture
Trustee, subject to the provisions of Section 10.17 hereof, with the written consent of the Enhancer may, or, at
the written direction of the Enhancer, shall, do one or more of the following, in each case subject to
Section 5.05:
(i) institute Proceedings in its own name and as trustee of an express trust for
the collection of all amounts then payable on the Notes or under this Indenture with respect thereto,
whether by declaration or otherwise, and all amounts payable under the Insurance Agreement, enforce any
judgment obtained, and collect from the Issuer and any other obligor on the Notes monies adjudged due;
(ii) institute Proceedings from time to time for the complete or partial
foreclosure of this Indenture with respect to the Trust Estate;
(iii) exercise any remedies of a secured party under the UCC and take any other
appropriate action to protect and enforce the rights and remedies of the Indenture Trustee and the
Noteholders; and
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(iv) sell the Trust Estate or any portion thereof or rights or interest therein, at
one or more public or private sales called and conducted in any manner permitted by law;
provided, however, that the Indenture Trustee may not sell or otherwise liquidate the Trust Estate following an
Event of Default, unless (A) the Indenture Trustee obtains the consent of the Enhancer (or if an Enhancer Default
has occurred and is continuing, the Noteholders of 100% of the aggregate Note Balance of the Notes), (B) the
proceeds of such sale or liquidation distributable to Noteholders are sufficient to discharge in full all amounts
then due and unpaid upon the Notes for principal and interest and to reimburse the Enhancer for any amounts drawn
under the Policy and any other amounts due the Enhancer under the Insurance Agreement or (C) the Indenture
Trustee determines that the Mortgage Loans will not continue to provide sufficient funds for the payment of
principal of and interest on the Notes as they would have become due if the Notes had not been declared due and
payable, and the Indenture Trustee obtains the consent of the Enhancer (or if an Enhancer Default has occurred
and is continuing, and the Noteholders of 66 2/3% of the aggregate Note Balance of the Notes). In determining
such sufficiency or insufficiency with respect to clause (B) and (C) above, the Indenture Trustee may, but need
not, obtain and rely, and shall be protected in relying in good faith, upon an opinion of an Independent
investment banking or accounting firm of national reputation as to the feasibility of such proposed action and as
to the sufficiency of the Trust Estate for such purpose. Notwithstanding the foregoing, provided that a
Servicing Default shall not have occurred, any Sale (as defined in Section 5.15 hereof) of the Trust Estate shall
be made subject to the continued servicing of the Mortgage Loans by the Servicer as provided in the Servicing
Agreement. Notwithstanding any sale of the Mortgage Loans pursuant to this Section 5.04(a), the Indenture Trustee
shall, for so long as any principal or accrued interest on the Notes remains unpaid, continue to act as Indenture
Trustee hereunder and to draw amounts payable under the Policy in accordance with its terms.
(b) If the Indenture Trustee collects any money or property pursuant to this Article V, it
shall pay out such money or property in the following order:
FIRST: to the Indenture Trustee for amounts due under Section 6.07;
SECOND: to the Noteholders of each Class of Notes, pro rata, for amounts due and unpaid on the
related Notes for interest, including accrued and unpaid interest on the Notes for any prior
Payment Date, ratably, without preference or priority of any kind, according to the amounts due
and payable on such Notes for interest from amounts available in the Trust Estate for such
Noteholders, other than amounts in respect of Interest Carry Forward Amounts;
THIRD: to the Noteholders of each Class of Notes, pro rata, for amounts due and unpaid on the
related Notes for principal, ratably, without preference or priority of any kind, according to
the amounts due and payable on such Notes for principal, from amounts available in the Trust
Estate for such Noteholders, until the respective Note Balances of such Class have been reduced
to zero;
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FOURTH: to the payment of all amounts due and owing the Enhancer under the Insurance Agreement;
FIFTH: to the Certificate Paying Agent for amounts due under Article VIII of the Trust
Agreement; and
SEVENTH: to the payment of the remainder, if any, to the Issuer or any other person legally
entitled thereto.
The Indenture Trustee may fix a record date and payment date for any payment to Noteholders pursuant to
this Section 5.04. At least 15 days before such record date, the Indenture Trustee shall mail to each Noteholder
a notice that states the record date, the payment date and the amount to be paid.
Section 5.05 Optional Preservation of the Trust Estate. If the Notes have been declared due and
payable under Section 5.02 following an Event of Default and such declaration and its consequences have not been
rescinded and annulled, the Indenture Trustee may, but need not (but shall at the written direction of the
Enhancer so long as no Enhancer Default exists), elect to take and maintain possession of the Trust Estate. It
is the desire of the parties hereto and the Noteholders that there be at all times sufficient funds for the
payment of principal of and interest on the Notes and other obligations of the Issuer including payment to the
Enhancer, and the Indenture Trustee shall take such desire into account when determining whether or not to take
and maintain possession of the Trust Estate. In determining whether to take and maintain possession of the Trust
Estate, the Indenture Trustee may, but need not, obtain and rely, and shall be protected in relying in good
faith, upon an opinion of an Independent investment banking or accounting firm of national reputation as to the
feasibility of such proposed action and as to the sufficiency of the Trust Estate for such purpose.
Section 5.06 Limitation of Suits. No Noteholder shall have any right to institute any Proceeding,
judicial or otherwise, with respect to this Indenture, or for the appointment of a receiver or trustee, or for
any other remedy hereunder, unless and subject to the provisions of Section 10.17 hereof:
(a) such Noteholder shall have previously given written notice to the Indenture Trustee of
a continuing Event of Default;
(b) the Noteholders of not less than 25% of the aggregate Note Balance of the Notes shall
have made written request to the Indenture Trustee to institute such Proceeding in respect of such Event of
Default in its own name as Indenture Trustee hereunder;
(c) such Noteholder or Noteholders shall have offered the Indenture Trustee reasonable
indemnity against the costs, expenses and liabilities to be incurred by it in complying with such request;
(d) the Indenture Trustee for 60 days after its receipt of such notice, request and offer
of indemnity shall have failed to institute such Proceedings; and
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(e) no direction inconsistent with such written request shall have been given to the
Indenture Trustee during such 60-day period by the Noteholders of a majority of the aggregate Note Balance of the
Notes or by the Enhancer.
It is understood and intended that no Noteholder shall have any right in any manner whatever by virtue
of, or by availing itself of, any provision of this Indenture to affect, disturb or prejudice the rights of any
other Noteholders or to obtain or to seek to obtain priority or preference over any other Noteholders or to
enforce any right under this Indenture, except in the manner herein provided.
In the event the Indenture Trustee shall receive conflicting or inconsistent requests and indemnity from
two or more groups of Noteholders, each representing less than a majority of the aggregate Note Balance of the
Notes, the Indenture Trustee shall act at the direction of the group of Noteholders with the greater Note
Balance. In the event that the Indenture Trustee shall receive conflicting or inconsistent requests and
indemnity from two or more groups of Noteholders representing the same Note Balance, then the Indenture Trustee
in its sole discretion may determine what action, if any, shall be taken, notwithstanding any other provisions of
this Indenture.
Section 5.07 Unconditional Rights of Noteholders to Receive Principal and Interest. Subject to the
provisions of this Indenture, the Noteholder of any Note shall have the right, which is absolute and
unconditional, to receive payment of the principal of and interest, if any, on such Note on or after the
respective due dates thereof expressed in such Note or in this Indenture and to institute suit for the
enforcement of any such payment, and such right shall not be impaired without the consent of such Noteholder.
Section 5.08 Restoration of Rights and Remedies. If the Indenture Trustee or any Noteholder has
instituted any Proceeding to enforce any right or remedy under this Indenture and such Proceeding has been
discontinued or abandoned for any reason or has been determined adversely to the Indenture Trustee or to such
Noteholder, then and in every such case the Issuer, the Indenture Trustee and the Noteholders shall, subject to
any determination in such Proceeding, be restored severally and respectively to their former positions hereunder,
and thereafter all rights and remedies of the Indenture Trustee and the Noteholders shall continue as though no
such Proceeding had been instituted.
Section 5.09 Rights and Remedies Cumulative. No right or remedy herein conferred upon or reserved
to the Indenture Trustee, the Enhancer or the Noteholders is intended to be exclusive of any other right or
remedy, and every right and remedy shall, to the extent permitted by law, be cumulative and in addition to every
other right and remedy given hereunder or now or hereafter existing at law, in equity or otherwise. The
assertion or employment of any right or remedy hereunder, or otherwise, shall not prevent the concurrent
assertion or employment of any other appropriate right or remedy.
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Section 5.10 Delay or Omission Not a Waiver. No delay or omission of the Indenture Trustee, the
Enhancer or any Noteholder to exercise any right or remedy accruing upon any Event of Default shall impair any
such right or remedy or constitute a waiver of any such Event of Default or an acquiescence therein. Every right
and remedy given by this Article V or by law to the Indenture Trustee or to the Noteholders may be exercised from
time to time, and as often as may be deemed expedient, by the Indenture Trustee or by the Noteholders, as the
case may be.
Section 5.11 Control by Enhancer or Noteholders. The Enhancer (so long as no Enhancer Default
exists) or the Noteholders of a majority of the aggregate Note Balance of Notes with the consent of the Enhancer,
shall have the right to direct the time, method and place of conducting any Proceeding for any remedy available
to the Indenture Trustee with respect to the Notes or exercising any trust or power conferred on the Indenture
Trustee, provided that:
(a) such direction shall not be in conflict with any rule of law or with this Indenture;
(b) subject to the express terms of Section 5.04, any direction to the Indenture Trustee
to sell or liquidate the Trust Estate shall be by the Enhancer (so long as no Enhancer Default exists) or by the
Noteholders of Notes representing not less than 100% of the aggregate Note Balance of the Notes with the consent
of the Enhancer;
(c) if the conditions set forth in Section 5.05 shall have been satisfied and the
Indenture Trustee elects to retain the Trust Estate pursuant to such Section, then any direction to the Indenture
Trustee by Noteholders of Notes representing less than 100% of the aggregate Note Balance of the Notes to sell or
liquidate the Trust Estate shall be of no force and effect; and
(d) the Indenture Trustee may take any other action deemed proper by the Indenture Trustee
that is not inconsistent with such direction.
Notwithstanding the rights of Noteholders set forth in this Section, subject to Section 6.01, the Indenture
Trustee need not take any action that it determines (in its sole discretion) might involve it in liability or
might materially adversely affect the rights of any Noteholders not consenting to such action, unless the Trustee
has received satisfactory indemnity from the Enhancer or a Noteholder.
Section 5.12 Waiver of Past Defaults. Prior to the declaration of the acceleration of the maturity
of the Notes as provided in Section 5.02, the Enhancer (so long as no Enhancer Default exists) or the
Noteholders of not less than a majority of the aggregate Note Balance of the Notes, with the consent of the
Enhancer, may waive any past Event of Default and its consequences, except an Event of Default (a) with respect
to payment of principal of or interest on any of the Notes or (b) in respect of a covenant or provision hereof
that cannot be modified or amended without the consent of the Noteholder of each Note. In the case of any such
waiver, the Issuer, the Indenture Trustee and the Noteholders shall be restored to their respective former
positions and rights hereunder; but no such waiver shall extend to any subsequent or other Event of Default or
impair any right consequent thereto.
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Upon any such waiver, any Event of Default arising therefrom shall be deemed to have been cured and not
to have occurred, for every purpose of this Indenture; but no such waiver shall extend to any subsequent or other
Event of Default or impair any right consequent thereto.
Section 5.13 Undertaking for Costs. All parties to this Indenture agree, and each Noteholder by
such Noteholder's acceptance of the related Note shall be deemed to have agreed, that any court may in its
discretion require, in any Proceeding for the enforcement of any right or remedy under this Indenture, or in any
Proceeding against the Indenture Trustee for any action taken, suffered or omitted by it as Indenture Trustee,
the filing by any party litigant in such Proceeding of an undertaking to pay the costs of such Proceeding, and
that such court may in its discretion assess reasonable costs, including reasonable attorneys' fees, against any
party litigant in such Proceeding, having due regard to the merits and good faith of the claims or defenses made
by such party litigant; but the provisions of this Section 5.13 shall not apply to (a) any Proceeding instituted
by the Indenture Trustee, (b) any Proceeding instituted by any Noteholder, or group of Noteholders, in each case
holding in the aggregate more than 10% of the aggregate Note Balance of the Notes or (c) any Proceeding
instituted by any Noteholder for the enforcement of the payment of principal of or interest on any Note on or
after the respective due dates expressed in such Note and in this Indenture.
Section 5.14 Waiver of Stay or Extension Laws. The Issuer covenants (to the extent that it may
lawfully do so) that it will not at any time insist upon, or plead or in any manner whatsoever, claim or take the
benefit or advantage of, any stay or extension law wherever enacted, now or at any time hereafter in force, that
may affect the covenants or the performance of this Indenture; and the Issuer (to the extent that it may lawfully
do so) hereby expressly waives all benefit or advantage of any such law, and covenants that it shall not hinder,
delay or impede the execution of any power herein granted to the Indenture Trustee, but will suffer and permit
the execution of every such power as though no such law had been enacted.
Section 5.15 Sale of Trust Estate.
(a) The power to effect any sale or other disposition (a "Sale") of any portion of the
Trust Estate pursuant to Section 5.04 is expressly subject to the provisions of Section 5.05 and this
Section 5.15. The power to effect any such Sale shall not be exhausted by any one or more Sales as to any portion
of the Trust Estate remaining unsold, but shall continue unimpaired until the entire Trust Estate shall have been
sold or all amounts payable on the Notes and under this Indenture and under the Insurance Agreement shall have
been paid. The Indenture Trustee may from time to time postpone any public Sale by public announcement made at
the time and place of such Sale. The Indenture Trustee hereby expressly waives its right to any amount fixed by
law as compensation for any Sale.
(b) The Indenture Trustee shall not in any private Sale sell the Trust Estate, or any
portion thereof, unless:
(i) the Enhancer direct(s) the Indenture Trustee in writing to make such Sale in
accordance with the provisions of Section 5.04,
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(ii) the proceeds of such Sale would be not less than the entire amount that would
be payable to the Noteholders under the Notes, the Certificateholders under the Certificates and the
Enhancer in respect of amounts drawn under the Policy and any other amounts due the Enhancer under the
Insurance Agreement, in full payment thereof in accordance with Section 5.02, on the Payment Date next
succeeding the date of such Sale, or
(iii) the Indenture Trustee determines, in its sole discretion, that the conditions
for retention of the Trust Estate set forth in Section 5.05 cannot be satisfied (in making any such
determination, the Indenture Trustee may rely and shall be protected in relying in good faith upon an
opinion of an Independent investment banking firm obtained and delivered as provided in Section 5.05),
and the Enhancer consents to such Sale.
The purchase by the Indenture Trustee of all or any portion of the Trust Estate at a private Sale shall not be
deemed a Sale or other disposition thereof for purposes of this Section 5.15(b).
(c) Unless the Noteholders and the Enhancer shall have otherwise consented or directed the
Indenture Trustee, at any public Sale of all or any portion of the Trust Estate at which a minimum bid equal to
or greater than the amount described in paragraph (ii) of Section 5.15(b) has not been established by the
Indenture Trustee and no Person bids an amount equal to or greater than such amount, then the Indenture Trustee
shall bid an amount at least $1.00 more than the highest other bid, which bid shall be subject to the provisions
of Section 5.15(d)(ii) herein.
(d) In connection with a Sale of all or any portion of the Trust Estate:
(i) any Noteholder may bid for and, with the consent of the Enhancer, purchase the
property offered for sale, and upon compliance with the terms of sale may hold, retain and possess and
dispose of such property, without further accountability, and may, in paying the purchase money
therefor, deliver any Notes or claims for interest thereon in lieu of cash up to the amount which shall,
upon distribution of the net proceeds of such sale, be payable thereon, and such Notes, in case the
amounts so payable thereon shall be less than the amount due thereon, shall be returned to the
Noteholders thereof after being appropriately stamped to show such partial payment;
(ii) the Indenture Trustee may bid for and acquire the property offered for Sale in
connection with any Sale thereof and, subject to any requirements of, and to the extent permitted by,
applicable law in connection therewith, may purchase all or any portion of the Trust Estate in a private
sale. In lieu of paying cash therefor, the Indenture Trustee may make settlement for the purchase price
by crediting the gross Sale price against the sum of (A) the amount that would be distributable to the
Noteholders and the Certificateholders and amounts owing to the Enhancer as a result of such Sale in
accordance with Section 5.04(b) on the Payment Date next succeeding the date of such Sale and (B) the
expenses of the Sale and of any Proceedings in connection therewith that are reimbursable to it, without
being required to produce the Notes in order to complete any such Sale or in order for the net Sale
price to be credited against such Notes, and any property so acquired by the Indenture Trustee shall be
held and dealt with by it in accordance with the provisions of this Indenture;
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(iii) the Indenture Trustee shall execute and deliver an appropriate instrument of
conveyance transferring its interest in any portion of the Trust Estate in connection with a Sale
thereof;
(iv) the Indenture Trustee is hereby irrevocably appointed the agent and
attorney-in-fact of the Issuer to transfer and convey its interest in any portion of the Trust Estate in
connection with a Sale thereof, and to take all action necessary to effect such Sale; and
(v) no purchaser or transferee at such a Sale shall be bound to ascertain the
Indenture Trustee's authority, inquire into the satisfaction of any conditions precedent or see to the
application of any monies.
Section 5.16 Action on Notes. The Indenture Trustee's right to seek and recover judgment on the
Notes or under this Indenture shall not be affected by the seeking, obtaining or application of any other relief
under or with respect to this Indenture. Neither the lien of this Indenture nor any rights or remedies of the
Indenture Trustee or the Noteholders shall be impaired by the recovery of any judgment by the Indenture Trustee
against the Issuer or by the levy of any execution under such judgment upon any portion of the Trust Estate or
upon any of the assets of the Issuer. Any money or property collected by the Indenture Trustee shall be applied
in accordance with Section 5.04(b).
Section 5.17 Performance and Enforcement of Certain Obligations.
(a) Promptly following a written request from the Enhancer or the Indenture Trustee (with
the written consent of the Enhancer), the Issuer, in its capacity as owner of the Mortgage Loans, shall, with the
written consent of the Enhancer, take all such lawful action as the Indenture Trustee may request to cause the
Issuer to compel or secure the performance and observance by the Sellers and the Servicer, as applicable, of each
of their obligations to the Issuer under or in connection with the Purchase Agreement and the Servicing
Agreement, and to exercise any and all rights, remedies, powers and privileges lawfully available to the Issuer
under or in connection with the Purchase Agreement and the Servicing Agreement to the extent and in the manner
directed by the Indenture Trustee, as pledgee of the Mortgage Loans, including the transmission of notices of
default on the part of the Sellers or the Servicer thereunder and the institution of legal or administrative
actions or proceedings to compel or secure performance by the Sellers or the Servicer of each of their
obligations under the Purchase Agreement and the Servicing Agreement.
(b) If an Event of Default shall have occurred and be continuing, the Indenture Trustee,
as pledgee of the Mortgage Loans, subject to the rights of the Enhancer under the Servicing Agreement, may, and
at the direction (which direction shall be in writing or by telephone (confirmed in writing promptly thereafter))
of the Noteholders of 66 2/3% of the aggregate Note Balance of the Notes, shall, exercise all rights, remedies,
powers, privileges and claims of the Issuer against the Sellers or the Servicer under or in connection with the
Purchase Agreement and the Servicing Agreement, including the right or power to take any action to compel or
secure performance or observance by the Sellers or the Servicer, as the case may be, of each of their obligations
to the Issuer thereunder and to give any consent, request, notice, direction, approval, extension or waiver under
the Purchase Agreement and the Servicing Agreement, as the case may be, and any right of the Issuer to take such
action shall not be suspended. In connection therewith, as determined by the Indenture Trustee, the Issuer shall
take all actions necessary to effect the transfer of the Mortgage Loans to the Indenture Trustee.
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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
37
(iii) the Indenture Trustee shall not be liable with respect to any action it takes
or omits to take in good faith in accordance with a direction received by it pursuant to Section 5.11 or
any direction from the Enhancer that the Enhancer is entitled to give under any of the Basic Documents.
(d) The Indenture Trustee shall not be liable for interest on any money received by it
except as the Indenture Trustee may agree in writing with the Issuer.
(e) Money held in trust by the Indenture Trustee need not be segregated from other funds
except to the extent required by law or the terms of this Indenture or the Trust Agreement.
(f) No provision of this Indenture shall require the Indenture Trustee to expend or risk
its own funds or otherwise incur financial liability in the performance of any of its duties hereunder or in the
exercise of any of its rights or powers, if it shall have reasonable grounds to believe that repayment of such
funds or adequate indemnity against such risk or liability is not reasonably assured to it.
(g) Every provision of this Indenture relating to the conduct or affecting the liability
of or affording protection to the Indenture Trustee shall be subject to the provisions of this Section and to the
provisions of TIA.
(h) With respect to each Payment Date, on the Business Day following the related
Determination Date, the Indenture Trustee shall forward or cause to be forwarded by mail, or other mutually
agreed-upon method, to the Enhancer and the Servicer, a statement setting forth, to the extent applicable, during
the Pre-Funding Period, the Pre-Funded Amount as of such Determination Date and any transfers of funds in
connection therewith.
(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.
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Section 6.02 Rights of Indenture Trustee.
(a) The Indenture Trustee may rely and shall be protected in acting or refraining from
acting in good faith upon any resolution, Officer's Certificate, opinion of counsel, certificate of auditors, or
any other certificate, statement, instrument, report, notice, consent or other document believed by it to be
genuine and to have been signed or presented by the proper person. The Indenture Trustee need not investigate
any fact or matter stated in any such document.
(b) Before the Indenture Trustee acts or refrains from acting, it may require an Officer's
Certificate or an Opinion of Counsel. The Indenture Trustee shall not be liable for any action it takes or omits
to take in good faith in reliance on any such Officer's Certificate or Opinion of Counsel.
(c) The Indenture Trustee may execute any of the trusts or powers hereunder or perform any
duties hereunder either directly or by or through agents or attorneys or a custodian or nominee, and the
Indenture Trustee shall not be responsible for any misconduct or negligence on the part of, or for the
supervision of, any such agent, attorney, custodian or nominee appointed with due care by it hereunder.
(d) The Indenture Trustee shall not be liable for any action it takes or omits to take in
good faith which it believes to be authorized or within its rights or powers; provided, however, that the
Indenture Trustee's conduct does not constitute willful misconduct, negligence or bad faith.
(e) The Indenture Trustee may consult with counsel, and the advice or opinion of counsel
with respect to legal matters relating to this Indenture and the Notes shall be full and complete authorization
and protection from liability in respect to any action taken, omitted or suffered by it hereunder in good faith
and in accordance with the advice or opinion of such counsel.
(f) The Indenture Trustee shall not be personally liable for any action taken, suffered or
omitted by it in good faith and believed by it to be authorized or within the discretion or rights or powers
conferred upon it by this Indenture, unless it shall be proved that the Indenture Trustee was negligent in
ascertaining the pertinent facts.
(g) Prior to the occurrence of an Event of Default hereunder, and after the curing or
waiver of all Events of Default that may have occurred, the Indenture Trustee shall not be bound to make any
investigation into the facts or matters stated in any resolution, certificate, statement, instrument, opinion,
report, notice, request, consent, order, approval, bond or other paper or document, unless requested in writing
to do so by the Enhancer or the Noteholders representing a majority of the aggregate Note Balance; provided,
however, that if the payment within a reasonable time to the Indenture Trustee of the costs, expenses or
liabilities likely to be incurred by it in the making of such investigation is, in the opinion of the Indenture
Trustee, not assured to the Indenture Trustee by the security afforded to it by the terms of this Indenture, the
Indenture Trustee may require indemnity satisfactory to the Indenture Trustee against such cost, expense or
liability as a condition to taking any such action.
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(h) The Indenture Trustee shall be under no obligation to exercise any of the trusts or
powers vested in it by this Indenture or to institute, conduct or defend any litigation hereunder or in relation
hereto at the request, order or direction of any of the Enhancer or the Noteholders, pursuant to the provisions
of this Indenture, unless the Enhancer or the Noteholders shall have offered to the Indenture Trustee reasonable
security or indemnity against the costs, expenses and liabilities which may be incurred therein or thereby;
nothing contained herein shall, however, relieve the Indenture Trustee of the obligation, upon the occurrence of
an Event of Default (which has not been cured or waived), to exercise such of the rights and powers vested in it
by this Indenture, and to use the same degree of care and skill in their exercise as a prudent investor would
exercise or use under the circumstances in the conduct of such investor's own affairs.
Section 6.03 Individual Rights of Indenture Trustee. The Indenture Trustee in its individual or
any other capacity may become the owner or pledgee of Notes and may otherwise deal with the Issuer or its
Affiliates with the same rights it would have if it were not Indenture Trustee. Any Note Registrar, co-registrar
or co-paying agent may do the same with like rights. However, the Indenture Trustee must comply with Sections
6.11 and 6.12.
Section 6.04 Indenture Trustee's Disclaimer. The Indenture Trustee shall not be (i) responsible
for and makes no representation as to the validity or adequacy of this Indenture or the Notes, (ii) accountable
for the Issuer's use of the proceeds from the Notes or (iii) responsible for any statement of the Issuer in this
Indenture or in any document issued in connection with the sale of the Notes or in the Notes, other than the
Indenture Trustee's certificate of authentication thereon.
Section 6.05 Notice of Event of Default. If an Event of Default shall occur and be continuing, and
if such Event of Default is known to a Responsible Officer of the Indenture Trustee, then the Indenture Trustee
shall give prompt notice thereof to the Enhancer. The Indenture Trustee shall mail to each Noteholder notice of
such Event of Default within 90 days after it occurs. Except in the case of an Event of Default with respect to
the payment of principal of or interest on any Note, the Indenture Trustee may withhold such notice if and so
long as a committee of its Responsible Officers in good faith determines that withholding such notice is in the
interests of the Noteholders.
Section 6.06 Reports by Indenture Trustee to Noteholders. The Indenture Trustee shall deliver to
each Noteholder such information as may be required to enable such Noteholder to prepare its federal and state
income tax returns. In addition, upon Issuer Request, the Indenture Trustee shall promptly furnish such
information reasonably requested by the Issuer that is reasonably available to the Indenture Trustee to enable
the Issuer to perform its federal and state income tax reporting obligations.
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Section 6.07 Compensation and Indemnity. The Indenture Trustee shall be compensated and
indemnified by the Servicer in accordance with Section 6.06 of the Servicing Agreement. All amounts owing the
Indenture Trustee hereunder in excess of such amount, as well as any amount owed to the Indenture Trustee in
accordance with Section 6.06 of the Servicing Agreement, to the extent the Servicer has failed to pay such
amount, shall be paid solely as provided in Section 3.05 hereof (subject to the priorities set forth therein).
The Indenture Trustee's compensation shall not be limited by any law on compensation of a trustee of an express
trust. The Issuer shall reimburse the Indenture Trustee for all reasonable out-of-pocket expenses incurred or
made by it, including costs of collection, in addition to the compensation for its services. Such expenses shall
include the reasonable compensation, expenses, disbursements and advances of the Indenture Trustee's agents,
counsel, accountants and experts. The Issuer shall indemnify the Indenture Trustee against any and all loss,
liability or expense (including attorneys' fees) incurred by it in connection with the administration of this
trust and the performance of its duties hereunder. The Indenture Trustee shall notify the Issuer promptly of any
claim for which it may seek indemnity. Failure by the Indenture Trustee to so notify the Issuer shall not
relieve the Issuer of its obligations hereunder. The Issuer shall defend any such claim, and the Indenture
Trustee may have separate counsel and the Issuer shall pay the fees and expenses of such counsel. The Issuer is
not obligated to reimburse any expense or indemnify against any loss, liability or expense incurred by the
Indenture Trustee through the Indenture Trustee's own willful misconduct, negligence or bad faith.
The Issuer's payment obligations to the Indenture Trustee pursuant to this Section 6.07 shall survive
the discharge of this Indenture or the termination or resignation of the Indenture Trustee. When the Indenture
Trustee incurs expenses after the occurrence of an Event of Default specified in clause (c) or (d) of the
definition thereof with respect to the Issuer, such expenses are intended to constitute expenses of
administration under Title 11 of the United States Code or any other applicable federal or state bankruptcy,
insolvency or similar law.
Section 6.08 Replacement of Indenture Trustee. No resignation or removal of the Indenture Trustee
and no appointment of a successor Indenture Trustee shall become effective until the acceptance of appointment by
the successor Indenture Trustee pursuant to this Section 6.08. The Indenture Trustee may resign at any time by
so notifying the Issuer and the Enhancer. The Enhancer or the Noteholders of a majority of the aggregate Note
Balance of the Notes, with the consent of the Enhancer, 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
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(d) the Indenture Trustee otherwise becomes incapable of fulfilling its duties under the
Basic Documents.
If the Indenture Trustee resigns or is removed or if a vacancy exists in the office of the Indenture
Trustee for any reason (the Indenture Trustee in such event being referred to herein as the retiring Indenture
Trustee), the Issuer shall promptly appoint a successor Indenture Trustee with the consent of the Enhancer, which
consent shall not be unreasonably withheld. In addition, the Indenture Trustee shall resign to avoid being
directly or indirectly controlled by the Issuer.
A successor Indenture Trustee shall deliver a written acceptance of its appointment to the retiring
Indenture Trustee and to the Issuer. Thereupon, the resignation or removal of the retiring Indenture Trustee
shall become effective, and the successor Indenture Trustee shall have all the rights, powers and duties of the
Indenture Trustee under this Indenture. The successor Indenture Trustee shall mail a notice of its succession to
the Noteholders. The retiring Indenture Trustee shall promptly transfer all property held by it as Indenture
Trustee to the successor Indenture Trustee.
If a successor Indenture Trustee does not take office within 60 days after the retiring Indenture
Trustee resigns or is removed, then the retiring Indenture Trustee, the Issuer or the Noteholders of a majority
of aggregate Note Balance of the Notes may petition any court of competent jurisdiction for the appointment of a
successor Indenture Trustee.
If the Indenture Trustee fails to comply with Section 6.11, any Noteholder may petition any court of
competent jurisdiction for the removal of the Indenture Trustee and the appointment of a successor Indenture
Trustee.
Notwithstanding the replacement of the Indenture Trustee pursuant to this Section, the Issuer's
obligations under Section 6.07 shall continue for the benefit of the retiring Indenture Trustee.
Section 6.09 Successor Indenture Trustee by Xxxxxx. If the Indenture Trustee consolidates with,
merges or converts into, or transfers all or substantially all its corporate trust business or assets to, another
corporation or banking association, then the resulting, surviving or transferee corporation without any further
act shall be the successor Indenture Trustee; provided, that such corporation or banking association shall be
otherwise qualified and eligible under Section 6.11. The Indenture Trustee shall provide the Rating Agencies
with written notice of any such transaction occurring after the Closing Date.
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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 and
the Enhancer, such title to the Trust Estate, or any part thereof, and, subject to the other provisions of this
Section, such powers, duties, obligations, rights and trusts as the Indenture Trustee may consider necessary or
desirable. No co trustee or separate trustee hereunder shall be required to meet the terms of eligibility as a
successor trustee under Section 6.11, and no notice to Noteholders of the appointment of any co trustee or
separate trustee shall be required under Section 6.08 hereof.
(b) Every separate trustee and co-trustee shall, to the extent permitted by law, be
appointed and act subject to the following provisions and conditions:
(i) all rights, powers, duties and obligations conferred or imposed upon the
Indenture Trustee shall be conferred or imposed upon and exercised or performed by the Indenture Trustee
and such separate trustee or co-trustee jointly (it being understood that such separate trustee or
co-trustee is not authorized to act separately without the Indenture Trustee joining in such act),
except to the extent that under any law of any jurisdiction in which any particular act or acts are to
be performed the Indenture Trustee shall be incompetent or unqualified to perform such act or acts, in
which event such rights, powers, duties and obligations (including the holding of title to the Trust
Estate or any portion thereof in any such jurisdiction) shall be exercised and performed singly by such
separate trustee or co-trustee, but solely at the direction of the Indenture Trustee;
(ii) no trustee hereunder shall be personally liable by reason of any act or
omission of any other trustee hereunder; and
(iii) the Indenture Trustee may at any time accept the resignation of or remove any
separate trustee or co-trustee.
(c) Any notice, request or other writing given to the Indenture Trustee shall be deemed to
have been given to each of the then separate trustees and co-trustees, as effectively as if given to each of
them. Every instrument appointing any separate trustee or co-trustee shall refer to this Indenture and the
conditions of this Article VI. Each separate trustee and co-trustee, upon its acceptance of the trusts
conferred, shall be vested with the estates or property specified in its instrument of appointment, either
jointly with the Indenture Trustee or separately, as may be provided therein, subject to all the provisions of
this Indenture, specifically including every provision of this Indenture relating to the conduct of, affecting
the liability of, or affording protection to, the Indenture Trustee. Every such instrument shall be filed with
the Indenture Trustee.
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(d) Any separate trustee or co-trustee may at any time constitute the Indenture Trustee,
its agent or attorney-in-fact with full power and authority, to the extent not prohibited by law, to do any
lawful act under or in respect of this Indenture on its behalf and in its name. If any separate trustee or
co-trustee shall die, become incapable of acting, resign or be removed, all of its estates, properties, rights,
remedies and trusts shall vest in and be exercised by the Indenture Trustee, to the extent permitted by law,
without the appointment of a new or successor trustee.
Section 6.11 Eligibility; Disqualification. The Indenture Trustee shall at all times satisfy the
requirements of TIA § 310(a). The Indenture Trustee shall have a combined capital and surplus of at least
$50,000,000 as set forth in its most recent published annual report of condition and it or its parent shall have
a long-term debt rating of "A" or better by Xxxxx'x. The Indenture Trustee shall comply with TIA § 310(b);
provided, however, that there shall be excluded from the operation of TIA § 310(b)(1) any indenture or indentures
under which other securities of the Issuer are outstanding if the requirements for such exclusion set forth in
TIA § 310(b)(1) are met.
Section 6.12 Preferential Collection of Claims Against Issuer. The Indenture Trustee shall comply
with TIA § 311(a), excluding any creditor relationship listed in TIA § 311(b). An Indenture Trustee that has
resigned or been removed shall be subject to TIA § 311(a) to the extent indicated.
Section 6.13 Representations and Warranties. The Indenture Trustee hereby represents and warrants
that:
(a) The Indenture Trustee is duly organized, validly existing and in good standing as a
national banking association with power and authority to own its properties and to conduct its business as such
properties are currently owned and such business is currently conducted.
(b) The Indenture Trustee has the power and authority to execute and deliver this
Indenture and to carry out its terms; and the execution, delivery and performance of this Indenture have been
duly authorized by the Indenture Trustee by all necessary corporate action.
(c) The consummation of the transactions contemplated by this Indenture and the
fulfillment of the terms hereof do not conflict with, result in any breach of any of the terms and provisions of,
or constitute (with or without notice or lapse of time) a default under, the articles of organization or bylaws
of the Indenture Trustee or any agreement or other instrument to which the Indenture Trustee is a party or by
which it is bound.
(d) To the Indenture Trustee's best knowledge, there are no Proceedings or investigations
pending or threatened before any court, regulatory body, administrative agency or other governmental
instrumentality having jurisdiction over the Indenture Trustee or its properties (A) asserting the invalidity of
this Indenture, (B) seeking to prevent the consummation of any of the transactions contemplated by this Indenture
or (C) seeking any determination or ruling that might materially and adversely affect the performance by the
Indenture Trustee of its obligations under, or the validity or enforceability of, this Indenture.
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(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;
(c) to execute the Yield Maintenance Agreement and take all actions thereunder; and
(d) to take all other actions as shall be required to be taken by the terms of this
Indenture.
Section 6.15 Indenture Trustee May Own Securities. The Indenture Trustee, in its individual or any
other capacity, may become the owner or pledgee of Securities with the same rights it would have if it were not
Indenture Trustee.
ARTICLE VII
Noteholders' Lists and Reports
Section 7.01 Issuer to Furnish Indenture Trustee Names and Addresses of Noteholders. The Issuer
shall furnish or cause to be furnished to the Indenture Trustee (a) not more than five days after each Record
Date, a list, in such form as the Indenture Trustee may reasonably require, of the names and addresses of the
Noteholders as of such Record Date, and (b) at such other times as the Indenture Trustee and the Enhancer may
request in writing, within 30 days after receipt by the Issuer of any such request, a list of similar form and
content as of a date not more than 10 days prior to the time such list is furnished; provided, however, that for
so long as the Indenture Trustee is the Note Registrar, no such list need be furnished.
Section 7.02 Preservation of Information; Communications to Noteholders.
(a) The Indenture Trustee shall preserve, in as current a form as is reasonably
practicable, the names and addresses of the Noteholders contained in the most recent list furnished to the
Indenture Trustee as provided in Section 7.01 and the names and addresses of the Noteholders received by the
Indenture Trustee in its capacity as Note Registrar. The Indenture Trustee may destroy any list furnished to it
as provided in such Section 7.01 upon receipt of a new list so furnished.
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(b) Noteholders may communicate pursuant to TIA § 312(b) with other Noteholders and the
Enhancer with respect to their rights under this Indenture or under the Notes.
(c) The Issuer, the Indenture Trustee and the Note Registrar shall have the protection of
TIA § 312(c).
Section 7.03 Reports by Issuer.
(a) The Issuer shall:
(i) file with the Indenture Trustee, within 15 days after the Issuer is required
to file the same with the Commission, copies of the annual reports and the information, documents and
other reports (or copies of such portions of any of the foregoing as the Commission may from time to
time by rules and regulations prescribe) that the Issuer may be required to file with the Commission
pursuant to Section 13 or 15(d) of the Exchange Act;
(ii) file with the Indenture Trustee and the Commission, in accordance with rules
and regulations prescribed from time to time by the Commission, such additional information, documents
and reports with respect to compliance by the Issuer with the conditions and covenants of this Indenture
as may be required from time to time by such rules and regulations; and
(iii) supply to the Indenture Trustee (and the Indenture Trustee shall transmit by
mail to all Noteholders described in TIA § 313(c)) such summaries of any information, documents and
reports required to be filed by the Issuer pursuant to clauses (i) and (ii) of this Section 7.03(a) and
by rules and regulations prescribed from time to time by the Commission.
(b) Unless the Issuer otherwise determines, the fiscal year of the Issuer shall end on
December 31 of each year.
Section 7.04 Reports by Indenture Trustee. If required by TIA § 313(a), within 60 days after each
January 1, beginning with January 1, 2007, the Indenture Trustee shall make available to each Noteholder as
required by TIA § 313(c) and to the Enhancer a brief report dated as of such date that complies with TIA §
313(a). The Indenture Trustee also shall comply with TIA § 313(b).
A copy of each report at the time of its distribution to Noteholders shall be filed by the Indenture
Trustee with the Commission, if required, and each stock exchange, if any, on which the Notes are listed. The
Issuer shall notify the Indenture Trustee if and when the Notes are listed on any stock exchange.
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Section 7.05 Exchange Act Reporting. In connection with the preparation and filing of periodic
reports by the Servicer pursuant to Article IV of the Servicing Agreement, the Indenture Trustee shall timely
provide to the Servicer (I) a list of Holders as shown on the Note Register or Certificate Register as of the end
of each calendar year, (II) copies of all pleadings, other legal process and any other documents relating to any
claims, charges or complaints involving the Indenture Trustee, as indenture trustee hereunder, or the Trust
Estate that are received by the Indenture Trustee, (III) notice of all matters that, to the actual knowledge of a
Responsible Officer of the Indenture Trustee, have been submitted to a vote of the Holders, other than those
matters that have been submitted to a vote of the Holders at the request of the Depositor or the Servicer, and
(IV) notice of any failure of the Indenture Trustee to make any payment to the Holders as required pursuant to
this Indenture. The Indenture Trustee shall not have any liability with respect to the Servicer's failure to
properly prepare or file such periodic reports and the Servicer shall not have any liability with respect to such
failure resulting from or relating to the Servicer's inability or failure to obtain any information not resulting
from the Servicer's own negligence or willful misconduct.
ARTICLE VIII
Accounts, Disbursements and Releases
Section 8.01 Collection of Money. Except as otherwise expressly provided herein, the Indenture
Trustee may demand payment or delivery of, and shall receive and collect, directly and without intervention or
assistance of any fiscal agent or other intermediary, all money and other property payable to or receivable by
the Indenture Trustee pursuant to this Indenture. The Indenture Trustee shall apply all such money received by
it as provided in this Indenture. Except as otherwise expressly provided in this Indenture, if any default
occurs in the making of any payment or performance under any agreement or instrument that is part of the Trust
Estate, the Indenture Trustee may take such action as may be appropriate to enforce such payment or performance,
including the institution and prosecution of appropriate Proceedings. Any such action shall be without prejudice
to any right to claim a Default or Event of Default under this Indenture and any right to proceed thereafter as
provided in Article V.
Section 8.02 Trust Accounts.
(a) On or prior to the Closing Date, the Issuer shall cause the Indenture Trustee to
establish and maintain, in the name of the Indenture Trustee, for the benefit of the Noteholders, the Certificate
Paying Agent, on behalf of the Certificateholders, and the Enhancer, the Note Payment Account as provided in
Section 3.01 of this Indenture.
(b) All monies deposited from time to time in the Note Payment Account pursuant to the
Servicing Agreement and all deposits therein pursuant to this Indenture are for the benefit of the Noteholders,
the Enhancer and the Certificate Paying Agent, on behalf of the Certificateholders, and all investments made with
such monies, including all income or other gain from such investments, are for the benefit of the Servicer as
provided in Section 5.01 of the Servicing Agreement.
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On each Payment Date, the Indenture Trustee shall distribute all amounts on deposit in the Note Payment
Account to the Noteholders in respect of the Notes and, in its capacity as Certificate Paying Agent, to the
Certificateholders from the Distribution Account in the order of priority set forth in Section 3.05 (except as
otherwise provided in Section 5.04(b)) and in accordance with the Servicing Certificate.
The Indenture Trustee shall invest any funds in the Note Payment Account in Permitted Investments
selected in writing by the Servicer maturing no later than the Business Day preceding the next succeeding Payment
Date (except that any investment in the institution with which the Note Payment Account is maintained may mature
on such Payment Date) and shall not be sold or disposed of prior to the maturity. In addition, such Permitted
Investments shall not be purchased at a price in excess of par. The Indenture Trustee shall have no liability
whatsoever for investment losses on Permitted Investments, if such investments are made in accordance with the
provisions of this Indenture and the Indenture Trustee is not the obligor under the Permitted Investment.
Section 8.03 Officer's Certificate. The Indenture Trustee shall receive at least seven days'
notice when requested by the Issuer to take any action pursuant to Section 8.05(a), accompanied by copies of any
instruments to be executed, and the Indenture Trustee shall also require, as a condition to such action, an
Officer's Certificate, in form and substance satisfactory to the Indenture Trustee, stating the legal effect of
any such action, outlining the steps required to complete the same, and concluding that all conditions precedent
to the taking of such action have been complied with.
Section 8.04 Termination Upon Distribution to Noteholders. This Indenture and the respective
obligations and responsibilities of the Issuer and the Indenture Trustee created hereby shall terminate upon the
distribution to the Noteholders, the Certificate Paying Agent on behalf of the Certificateholders and the
Indenture Trustee of all amounts required to be distributed pursuant to Article III and the distribution to the
Credit Enhancer of all amounts owing to it; provided, however, that in no event shall the trust created hereby
continue beyond the expiration of 21 years from the death of the survivor of the descendants of Xxxxxx X.
Xxxxxxx, the late ambassador of the United States to the Court of St. James's, living on the date hereof.
Section 8.05 Release of Trust Estate.
(a) Subject to the payment of its fees, expenses and indemnification, the Indenture
Trustee may, and when required by the provisions of this Indenture or the Servicing Agreement, shall, execute
instruments to release property from the lien of this Indenture, or convey the Indenture Trustee's interest in
the same, in a manner and under circumstances that are not inconsistent with the provisions of this Indenture.
No Person relying upon an instrument executed by the Indenture Trustee as provided in Article VIII hereunder
shall be bound to ascertain the Indenture Trustee's authority, inquire into the satisfaction of any conditions
precedent, or see to the application of any monies.
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(b) The Indenture Trustee shall, at such time as (i) there are no Notes Outstanding,
(ii) all sums due the Indenture Trustee pursuant to this Indenture have been paid and (iii) all sums due the
Enhancer have been paid and the Policy has been returned to the Credit Enhancer, release any remaining portion of
the Trust Estate that secured the Notes from the lien of this Indenture.
(c) The Indenture Trustee shall release property from the lien of this Indenture pursuant
to this Section 8.05 only upon receipt of an Issuer Request accompanied by an Officers' Certificate and a letter
from the Enhancer stating that the Enhancer has no objection to such request from the Issuer.
(d) The Indenture Trustee shall, at the request of the Issuer or the Depositor, surrender
the Policy to the Enhancer for cancellation, upon final payment of principal of and interest on the Notes.
Section 8.06 Surrender of Notes Upon Final Payment. By acceptance of any Note, the Noteholder
thereof agrees to surrender such Note to the Indenture Trustee promptly, prior to such Noteholder's receipt of
the final payment thereon.
ARTICLE IX
Supplemental Indentures
Section 9.01 Supplemental Indentures Without Consent of Noteholders.
(a) Without the consent of the Noteholders of any Notes, but with prior notice to the
Rating Agencies and the prior written consent of the Enhancer (which consent shall not be unreasonably withheld
and so long as no Enhancer Default exists), the Issuer and the Indenture Trustee, when authorized by an Issuer
Request, at any time and from time to time, may enter into one or more indentures supplemental hereto (which
shall conform to the provisions of the Trust Indenture Act as in force at the date of the execution thereof), in
form satisfactory to the Indenture Trustee, for any of the following purposes:
(i) to correct or amplify the description of any property at any time subject to
the lien of this Indenture, or better to assure, convey and confirm unto the Indenture Trustee any
property subject or required to be subjected to the lien of this Indenture, or to subject to the lien of
this Indenture additional property;
(ii) to evidence the succession, in compliance with the applicable provisions
hereof, of another Person to the Issuer, and the assumption by any such successor of the covenants of
the Issuer herein and in the Notes contained;
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(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, including any Adverse REMIC Event.
The Indenture Trustee is hereby authorized to join in the execution of any such supplemental indenture
and to make any further appropriate agreements and stipulations that may be therein contained.
(b) The Issuer and the Indenture Trustee, when authorized by an Issuer Request, may,
without the consent of any Noteholder but with prior notice to the Rating Agencies and the Enhancer, enter into
an indenture or indentures supplemental hereto for the purpose of adding any provisions to, or changing in any
manner or eliminating any of the provisions of, this Indenture or of modifying in any manner the rights of the
Noteholders under this Indenture; provided, however, that such action shall not, as evidenced by an Opinion of
Counsel, (i) adversely affect in any material respect the interests of any Noteholder or the Enhancer or
(ii) cause the Issuer to be subject to an entity level tax.
Section 9.02 Supplemental Indentures With Consent of Noteholders. The Issuer and the Indenture
Trustee, when authorized by an Issuer Request, may, with prior notice to the Rating Agencies and with the consent
of the Enhancer and the Noteholders of not less than a majority of the Note Balances affected thereby, by Act (as
defined in Section 10.03 hereof) of such Noteholders delivered to the Issuer and the Indenture Trustee, enter
into an indenture or indentures supplemental hereto for the purpose of adding any provisions to, or changing in
any manner or eliminating any of the provisions of, this Indenture or of modifying in any manner the rights of
the Noteholders under this Indenture; provided, however, that no such supplemental indenture shall, without the
consent of the Noteholder of each Note affected thereby:
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(a) change the date of payment of any installment of principal of or interest on any Note,
or reduce the principal amount thereof or the Note Rate thereon, change the provisions of this Indenture relating
to the application of collections on, or the proceeds of the sale of, the Trust Estate to payment of principal of
or interest on the Notes, or change any place of payment where, or the coin or currency in which, any Note or the
interest thereon is payable, or impair the right to institute suit for the enforcement of the provisions of this
Indenture requiring the application of funds available therefor, as provided in Article V, to the payment of any
such amount due on the Notes on or after the respective due dates thereof;
(b) reduce the percentage of the Note Balances, the consent of the Noteholders of which is
required for any such supplemental indenture, or the consent of the Noteholders of which is required for any
waiver of compliance with certain provisions of this Indenture or certain defaults hereunder and their
consequences provided for in this Indenture;
(c) modify or alter the provisions of the proviso to the definition of the term
"Outstanding" or modify or alter the exception in the definition of the term "Noteholder";
(d) reduce the percentage of the aggregate Note Balance of the Notes required to direct
the Indenture Trustee to direct the Issuer to sell or liquidate the Trust Estate pursuant to Section 5.04;
(e) modify any provision of this Section 9.02 except to increase any percentage specified
herein or to provide that certain additional provisions of this Indenture or the other Basic Documents cannot be
modified or waived without the consent of the Noteholder of each Note affected thereby;
(f) modify any of the provisions of this Indenture in such manner as to affect the
calculation of the amount of any payment of interest or principal due on any Note on any Payment Date (including
the calculation of any of the individual components of such calculation); or
(g) permit the creation of any lien ranking prior to or on a parity with the lien of this
Indenture with respect to any part of the Trust Estate or, except as otherwise permitted or contemplated herein,
terminate the lien of this Indenture on any property at any time subject hereto or deprive the Noteholder of any
Note of the security provided by the lien of this Indenture; and provided further, that such action shall not, as
evidenced by an Opinion of Counsel, cause the Issuer to be subject to an entity level tax or cause any Adverse
REMIC Event.
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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, the Enhancer and the Noteholders shall thereafter be determined, exercised and enforced hereunder subject
in all respects to such modifications and amendments, and all the terms and conditions of any such supplemental
indenture shall be and be deemed to be part of the terms and conditions of this Indenture for any and all
purposes.
Section 9.05 Conformity with Trust Indenture Act. Every amendment of this Indenture and every
supplemental indenture executed pursuant to this Article IX shall conform to the requirements of TIA as in effect
at the time of such amendment or supplement so long as this Indenture shall then be qualified under TIA.
Section 9.06 Reference in Notes to Supplemental Indentures. Notes authenticated and delivered
after the execution of any supplemental indenture pursuant to this Article IX may, and if required by the
Indenture Trustee, shall, bear a notation in form approved by the Indenture Trustee as to any matter provided for
in such supplemental indenture. If the Issuer or the Indenture Trustee shall so determine, new Notes so modified
as to conform, in the opinion of the Indenture Trustee and the Issuer, to any such supplemental indenture may be
prepared and executed by the Issuer and authenticated and delivered by the Indenture Trustee in exchange for
Outstanding Notes.
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ARTICLE X
Miscellaneous
Section 10.01 Compliance Certificates and Opinions, etc.
(a) Upon any application or request by the Issuer to the Indenture Trustee to take any
action under any provision of this Indenture, the Issuer shall furnish to the Indenture Trustee and to the
Enhancer (i) an Officer's Certificate stating that all conditions precedent, if any, provided for in this
Indenture relating to the proposed action have been complied with and (ii) an Opinion of Counsel stating that in
the opinion of such counsel all such conditions precedent, if any, have been complied with, except that, in the
case of any such application or request as to which the furnishing of such documents is specifically required by
any provision of this Indenture, no additional certificate or opinion need be furnished.
Every certificate or opinion with respect to compliance with a condition or covenant provided for in
this Indenture shall include:
(i) a statement that each signatory of such certificate or opinion has read or has
caused to be read such covenant or condition and the definitions herein relating thereto;
(ii) a brief statement as to the nature and scope of the examination or
investigation upon which the statements or opinions contained in such certificate or opinion are based;
(iii) a statement that, in the opinion of each such signatory, such signatory has
made such examination or investigation as is necessary to enable such signatory to express an informed
opinion as to whether or not such covenant or condition has been complied with;
(iv) a statement as to whether, in the opinion of each such signatory, such
condition or covenant has been complied with; and
(v) if the signer of such certificate or opinion is required to be Independent,
the statement required by the definition of the term "Independent."
(b) (i) Prior to the deposit of any Collateral or other property or securities with
the Indenture Trustee that is to be made the basis for the release of any property or securities subject to the
lien of this Indenture, the Issuer shall, in addition to any obligation imposed in Section 10.01(a) or elsewhere
in this Indenture, furnish to the Indenture Trustee an Officer's Certificate certifying or stating the opinion of
each person signing such certificate as to the fair value (within 90 days of such deposit) to the Issuer of the
Collateral or other property or securities to be so deposited.
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(ii) Whenever the Issuer is required to furnish to the Indenture Trustee an
Officer's Certificate certifying or stating the opinion of any signer thereof as to the matters described
in clause (i) above, the Issuer shall also deliver to the Indenture Trustee an Independent Certificate
as to the same matters, if the fair value to the Issuer of the securities to be so deposited and of all
other such securities made the basis of any such withdrawal or release since the commencement of the
then-current fiscal year of the Issuer, as set forth in the certificates delivered pursuant to clause
(i) above and this clause (ii), is 10% or more of the aggregate Note Balance of the Notes, but such a
certificate need not be furnished with respect to any securities so deposited, if the fair value thereof
to the Issuer as set forth in the related Officer's Certificate is less than $25,000 or less than one
percent of the aggregate Note Balance of the Notes.
(iii) Whenever any property or securities are to be released from the lien of this
Indenture, the Issuer shall furnish to the Indenture Trustee an Officer's Certificate certifying or
stating the opinion of each person signing such certificate as to the fair value (within 90 days of such
release) of the property or securities proposed to be released and stating that in the opinion of such
person the proposed release will not impair the security under this Indenture in contravention of the
provisions hereof.
(iv) Whenever the Issuer is required to furnish to the Indenture Trustee an
Officer's Certificate certifying or stating the opinion of any signer thereof as to the matters described
in clause (iii) above, the Issuer shall also furnish to the Indenture Trustee an Independent Certificate
as to the same matters if the fair value of the property or securities and of all other property, other
than property as contemplated by clause (v) below or securities released from the lien of this Indenture
since the commencement of the then-current calendar year, as set forth in the certificates required by
clause (iii) above and this clause (iv), equals 10% or more of the aggregate Note Balance of the Notes,
but such certificate need not be furnished in the case of any release of property or securities if the
fair value thereof as set forth in the related Officer's Certificate is less than $25,000 or less than
one percent of the aggregate Note Balance of the Notes.
(v) Notwithstanding the foregoing, this Section 10.01(b) shall not apply to (A)
collection upon, sales or other dispositions of the Mortgage Loans as and to the extent permitted or
required by the Basic Documents or (B) the making of cash payments out of the Note Payment Account as
and to the extent permitted or required by the Basic Documents, so long as the Issuer shall deliver to
the Indenture Trustee every six months, commencing December 31, 2007, an Officer's Certificate of the
Issuer stating that all the dispositions of Collateral described in clauses (A) or (B) above that
occurred during the preceding six calendar months (or such longer period, in the case of the first such
Officer's Certificate) were permitted or required by the Basic Documents and that the proceeds thereof
were applied in accordance with the Basic Documents.
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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.
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(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 The Bank of New York Trust Company, N.A., 0 Xxxxx XxXxxxx Xxxxxx, Xxxxx 0000,
Xxxxxxx, Xxxxxxxx 00000, Attention: Structured Finance Services. The Indenture Trustee shall promptly transmit
any notice received by it from the Noteholders to the Issuer,
(b) the Issuer by the Indenture Trustee or by any Noteholder shall be sufficient for every
purpose hereunder if in writing and mailed first-class, postage prepaid to the Issuer addressed to: GMACM Home
Equity Loan Trust 2007-HE1, in care of the Owner Trustee, or at any other address previously furnished in writing
to the Indenture Trustee by the Issuer. The Issuer shall promptly transmit any notice received by it from the
Noteholders to the Indenture Trustee, or
(c) the Enhancer by the Issuer, the Indenture Trustee or by any Noteholders shall be
sufficient for every purpose hereunder to in writing and mailed, first-class postage pre-paid, or personally
delivered or telecopied to: MBIA Insurance Corporation, 000 Xxxx Xxxxxx, Xxxxxx, Xxx Xxxx 00000: Attention:
Insured Portfolio Management - Structured Finance (GMACM Home Equity Loan Trust 2007-HE1). 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.
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Section 10.05 Notices to Noteholders; Waiver. Where this Indenture provides for a Notice,
certificate, opinion, report or similar delivery to be given to any transaction party or to a Rating Agency, a
copy of such document shall be contemporaneously sent to the Enhancer. 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.
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The provisions of TIA §§ 310 through 317 that impose duties on any Person (including the provisions
automatically deemed included herein unless expressly excluded by this Indenture) are a part of and govern this
Indenture, whether or not physically contained herein.
Section 10.08 Effect of Headings. The Article and Section headings herein are for convenience only
and shall not affect the construction hereof.
Section 10.09 Successors and Assigns. All covenants and agreements in this Indenture and the Notes
by the Issuer shall bind its successors and assigns, whether so expressed or not. All agreements of the
Indenture Trustee in this Indenture shall bind its successors, co-trustees and agents.
Section 10.10 Severability. In case any provision in this Indenture or in the Notes shall be held
invalid, illegal or unenforceable, the validity, legality, and enforceability of the remaining provisions hereof
shall not in any way be affected or impaired thereby.
Section 10.11 Benefits of Indenture. Nothing in this Indenture or in the Notes, express or implied,
shall give to any Person, other than the parties hereto and their successors hereunder, and the Noteholders, the
Enhancer, and any other party secured hereunder, and any other Person with an ownership interest in any part of
the Trust Estate, any benefit or any legal or equitable right, remedy or claim under this Indenture. The Enhancer
shall be a third party beneficiary of this Indenture.
Section 10.12 Legal Holidays. In any case where the date on which any payment is due shall not be a
Business Day, then (notwithstanding any other provision of the Notes or this Indenture) payment need not be made
on such date, but may be made on the next succeeding Business Day with the same force and effect as if made on
the date on which nominally due, and no interest shall accrue for the period from and after any such nominal date.
Section 10.13 GOVERNING LAW. THIS AGREEMENT AND THE NOTES SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO THE CONFLICT OF LAW PRINCIPLES THEREOF,
OTHER THAN SECTIONS 5-1401 AND 5-1402 OF THE NEW YORK GENERAL OBLIGATIONS LAW, AND THE OBLIGATIONS, RIGHTS AND
REMEDIES OF THE PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.
Section 10.14 Counterparts. This Indenture may be executed in any number of counterparts, each of
which so executed shall be deemed to be an original, but all such counterparts shall together constitute but one
and the same instrument.
Section 10.15 Recording of Indenture. If this Indenture is subject to recording in any appropriate
public recording offices, such recording is to be effected by the Issuer and at its expense accompanied by an
Opinion of Counsel (which counsel shall be reasonably acceptable to the Indenture Trustee) to the effect that
such recording is necessary either for the protection of the Noteholders or any other Person secured hereunder or
for the enforcement of any right or remedy granted to the Indenture Trustee under this Indenture.
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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.
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ARTICLE XI
REMIC Provisions
Section 11.01 REMIC Administration.
(a) The REMIC Administrator shall make an election to treat the Trust Estate, as set forth
in Section 2.06 of the Trust Agreement, as two REMICs under the Code and, if necessary, under applicable state
law, in accordance with Section 2.06 of the Trust Agreement. Such election will be made on Form 1066 or other
appropriate federal tax or information return (including Form 8811) or any appropriate state return for the
taxable year ending on the last day of the calendar year in which the Securities are issued. For the purposes of
the REMIC elections in respect of the Trust Estate, Securities and interests to be designated as the "regular
interests" and the sole class of "residual interests" in each REMIC will be set forth in Section 11.03. The
REMIC Administrator and the Indenture Trustee shall not permit the creation of any "interests" (within the meaning
of Section 860G of the Code) in each REMIC elected in respect of the Trust other than the "regular interests" and
"residual interests" so designated.
(b) The Closing Date is hereby designated as the "startup day" of each of REMIC I and
REMIC II as designated in Section 11.03 below, and the Trust Estate within the meaning of Section 860G(a)(9) of
the Code.
(c) GMAC Mortgage, LLC shall hold a Class R Certificate representing at least a 0.01%
Percentage Interest in each Class of the Class R Certificates and shall be designated as "the tax matters person"
with respect to each REMIC in the manner provided under Treasury regulations §1.860F-4(d) and Treasury
regulations §301.6231(a)(7)-1. The REMIC Administrator, on behalf of the Tax Matters Partner, shall (i) act on
behalf of each REMIC in relation to any tax matter or controversy involving the Trust Estate and (ii) represent
the Trust Estate in any administrative or judicial proceeding relating to an examination or audit by any
governmental taxing authority with respect thereto. The legal expenses, including without limitation attorneys'
or accountants' fees, and costs of any such proceeding and any liability resulting therefrom shall be expenses of
the Trust Estate and the REMIC Administrator shall be entitled to reimbursement therefor out of amounts
attributable to the Mortgage Loans on deposit in the Custodial Account unless such legal expenses and costs are
incurred by reason of the REMIC Administrator's willful misfeasance, bad faith or gross negligence.
(d) The REMIC Administrator shall prepare or cause to be prepared all of the Tax Returns
that it determines are required with respect to each REMIC created hereunder and, if approval therefore is
received from the applicable District Director of the Internal Revenue Service, shall sign and file such returns
in a timely manner and, otherwise, shall, shall deliver such Tax Returns in a timely manner to the Owner Trustee,
if the Owner Trustee is required to sign such returns in accordance with Section 5.03 of the Trust Agreement, and
shall sign (if the Owner Trustee is not so required) and file such Tax Returns in a timely manner. The expenses
of preparing such returns shall be borne by the REMIC Administrator without any right of reimbursement therefor.
The REMIC Administrator agrees to indemnify and hold harmless the Owner Trustee with respect to any tax or
liability arising from the Owner Trustee's signing of Tax Returns that contain errors or omissions. The
Indenture Trustee and Servicer shall promptly provide the REMIC Administrator with such information as the
REMIC Administrator may from time to time request for the purpose of enabling the REMIC Administrator to prepare
Tax Returns.
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(e) The REMIC Administrator shall provide (i) to any Transferor of a Class R Certificate
such information as is necessary for the application of any tax relating to the transfer of a Class R Certificate
to any Person who is not a Permitted Transferee, (ii) to the Indenture Trustee, and the Indenture Trustee shall
forward to the Noteholders and the Certificateholders, such information or reports as are required by the Code or
the REMIC Provisions including reports relating to interest, original issue discount and market discount or
premium (using the Prepayment Assumption) and (iii) to the Internal Revenue Service the name, title, address and
telephone number of the person who will serve as the representative of each REMIC.
(f) The Servicer and the REMIC Administrator shall take such actions and shall cause each
REMIC created hereunder to take such actions as are reasonably within the Servicer's or the REMIC Administrator's
control and the scope of its duties more specifically set forth herein as shall be necessary or desirable to
maintain the status of each REMIC as a REMIC under the REMIC Provisions (and the Indenture Trustee shall assist
the Servicer and the REMIC Administrator, to the extent reasonably requested by the Servicer and the
REMIC Administrator to do so). The Servicer and the REMIC Administrator shall not knowingly or intentionally take
any action, cause the Trust Estate to take any action or fail to take (or fail to cause to be taken) any action
reasonably within their respective control that, under the REMIC Provisions, if taken or not taken, as the case
may be, could (i) endanger the status of any portion of any of the REMICs as a REMIC or (ii) result in the
imposition of a tax upon any of the REMICs (including but not limited to the tax on prohibited transactions as
defined in Section 860F(a)(2) of the Code and the tax on contributions to a REMIC set forth in Section 860G(d) of
the Code) (either such event, in the absence of an Opinion of Counsel or the indemnification referred to in this
sentence, an "Adverse REMIC Event") unless the Servicer or the REMIC Administrator, as applicable, has received
an Opinion of Counsel (at the expense of the party seeking to take such action or, if such party fails to pay
such expense, and the Servicer or the REMIC Administrator, as applicable, determines that taking such action is
in the best interest of the Trust Estate, the Enhancer and the Noteholders and the Certificateholders, at the
expense of the Trust Estate, but in no event at the expense of the Servicer, the REMIC Administrator, the Owner
Trustee or the Indenture Trustee) to the effect that the contemplated action will not, with respect to each
REMIC created hereunder, endanger such status or, unless the Servicer, the REMIC Administrator or both, as
applicable, determine in its or their sole discretion to indemnify the Trust Estate against the imposition of
such a tax, result in the imposition of such a tax. Wherever in this Agreement a contemplated action may not be
taken because the timing of such action might result in the imposition of a tax on the Trust Estate, or may only
be taken pursuant to an Opinion of Counsel that such action would not impose a tax on the Trust Estate, such
action may nonetheless be taken provided that the indemnity given in the preceding sentence with respect to any
taxes that might be imposed on the Trust Estate has been given and that all other preconditions to the taking of
such action have been satisfied. The Indenture Trustee shall not take or fail to take any action (whether or not
authorized hereunder) as to which the Servicer or the REMIC Administrator, as applicable, has advised it in
writing that it has received an Opinion of Counsel to the effect that an Adverse REMIC Event could occur with
respect to such action. In addition, prior to taking any action with respect to any of the REMICs created
hereunder or any related assets thereof, or causing any of the REMICs to take any action, which is not expressly
permitted under the terms of this Agreement, the Indenture Trustee will consult with the Servicer or the
REMIC Administrator, as applicable, or its designee, in writing, with respect to whether such action could cause
an Adverse REMIC Event to occur with respect to any of the REMICs, and the Indenture Trustee shall not take any
such action or cause either REMIC to take any such action as to which the Servicer or the REMIC Administrator, as
applicable, has advised it in writing that an Adverse REMIC Event could occur. The Servicer or the
REMIC Administrator, as applicable, may consult with counsel to make such written advice, and the cost of same
shall be borne by the party seeking to take the action not expressly permitted by this Agreement, but in no event
at the expense of the Servicer or the REMIC Administrator. At all times as may be required by the Code, the
Servicer will to the extent within its control and the scope of its duties more specifically set forth herein,
maintain substantially all of the assets of each REMIC created hereunder as "qualified mortgages" as defined in
Section 860G(a)(3) of the Code and "permitted investments" as defined in Section 860G(a)(5) of the Code.
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(g) In the event that any tax is imposed on "prohibited transactions" of any of the REMICs
created hereunder as defined in Section 860F(a)(2) of the Code, on "net income from foreclosure property" of any
of the REMICs as defined in Section 860G(c) of the Code, on any contributions to any of the REMICs after the
Startup Day therefor pursuant to Section 860G(d) of the Code, or any other tax is imposed by the Code or any
applicable provisions of state or local tax laws, such tax shall be charged (i) to the Servicer, if such tax
arises out of or results from a breach by the Servicer of any of its obligations under this Agreement or the
Servicer has in its sole discretion determined to indemnify the Trust Estate against such tax, (ii) to the
Indenture Trustee, if such tax arises out of or results from a breach by the Trustee of any of its obligations
under this Article XI, or (iii) otherwise against amounts on deposit in the Custodial Account and on the Payment
Date(s) following such reimbursement the aggregate of such taxes shall be allocated in reduction of the accrued
interest due on each Class entitled thereto on a pro rata basis.
(h) The Indenture Trustee and the Servicer shall, for federal income tax purposes,
maintain books and records with respect to each REMIC created hereunder on a calendar year and on an accrual
basis or as otherwise may be required by the REMIC Provisions.
(i) Following the Startup Day, neither the Servicer nor the Indenture Trustee shall accept
any contributions of assets to any of the REMICs created hereunder unless (subject to Section 11.01(f)) the
Servicer, the Enhancer and the Indenture Trustee shall have received an Opinion of Counsel (at the expense of the
party seeking to make such contribution) to the effect that the inclusion of such assets in such REMIC will not
cause any of the REMICs to fail to qualify as a REMIC at any time that any Notes or Certificates are outstanding
or subject any of the REMICs to any tax under the REMIC Provisions or other applicable provisions of federal,
state and local law or ordinances.
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(j) Neither the Servicer nor the Trustee shall (subject to Section 11.01(f)) enter into
any arrangement by which any of the REMICs created hereunder will receive a fee or other compensation for
services nor permit any of the REMICs to receive any income from assets other than "qualified mortgages" as
defined in Section 860G(a)(3) of the Code or "permitted investments" as defined in Section 860G(a)(5) of the Code.
(k) Solely for the purposes of Section 1.860G-1(a)(4)(iii) of the Treasury Regulations,
the "latest possible maturity date" by which the Certificate Principal Balance of each Class of Notes and
Certificates representing a regular interest in the applicable REMIC is the Final Payment Date.
(l) Within 30 days after the Closing Date, the REMIC Administrator shall prepare and file
with the Internal Revenue Service Form 8811, "Information Return for Real Estate Mortgage Investment Conduits
(REMIC) and Issuers of Collateralized Debt Obligations" for each REMIC created hereunder.
(m) Neither the Indenture Trustee nor the Servicer shall sell, dispose of or substitute
for any of the Mortgage Loans (except in connection with (i) the default, imminent default or foreclosure of a
Mortgage Loan, including but not limited to, the acquisition or sale of a Mortgaged Property acquired by deed in
lieu of foreclosure, (ii) the bankruptcy of any of the REMICs created hereunder, (iii) the termination of the
applicable REMIC pursuant to Section 8.02 of the Trust Agreement or (iv) a purchase of Mortgage Loans pursuant to
the Purchase Agreement) nor acquire any assets for any of the REMICs, nor sell or dispose of any investments in
the Custodial Account or the Payment Account for gain nor accept any contributions to any of the REMICs after the
Closing Date unless it has received an Opinion of Counsel that such sale, disposition, substitution or
acquisition will not (a) affect adversely the status of any of the REMICs as a REMIC or (b) unless the Servicer
has determined in its sole discretion to indemnify the Trust Estate against such tax, cause any REMIC to be
subject to a tax on "prohibited transactions" or "contributions" pursuant to the REMIC Provisions.
(n) The Indenture Trustee will apply for an employer identification number from the
Internal Revenue Service on a Form SS-4 or any other acceptable method for all tax entities.
Section 11.02 Servicer, REMIC Administrator and Indenture Trustee Indemnification.
(a) The Indenture Trustee agrees to indemnify the Trust Estate, the REMIC Administrator
and the Servicer for any taxes and costs including, without limitation, any reasonable attorneys fees imposed on
or incurred by the Trust Estate or the Servicer, as a result of a breach of the Indenture Trustee's covenants set
forth in Article VIII or this Article XI.
(b) The REMIC Administrator agrees to indemnify the Trust Estate, the Servicer, the
Depositor, the Owner Trustee and the Indenture Trustee for any taxes and costs (including, without limitation,
any reasonable attorneys' fees) imposed on or incurred by the Trust Estate, the Depositor, GMACM Mortgage, LLC,
the Servicer, the Owner Trustee or the Indenture Trustee, as a result of a breach of the REMIC Administrator's
covenants set forth in this Article XI with respect to compliance with the REMIC Provisions, including without
limitation, any penalties arising from the Owner Trustee's execution of Tax Returns prepared by the
REMIC Administrator that contain errors or omissions; provided, however, that such liability will not be imposed
to the extent such breach is a result of an error or omission in information provided to the REMIC Administrator
by the Servicer in which case Section 11.02(c) will apply.
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(c) The Servicer agrees to indemnify the Trust Estate, the REMIC Administrator, the Owner
Trustee and the Indenture Trustee for any taxes and costs (including, without limitation, any reasonable
attorneys' fees) imposed on or incurred by the Trust Estate, the REMIC Administrator, the Owner Trustee or the
Indenture Trustee, as a result of a breach of the Servicer's covenants set forth in this Article XI or in Article
III with respect to compliance with the REMIC Provisions, including without limitation, any penalties arising
from the Indenture Trustee's execution of Tax Returns prepared by the Servicer that contain errors or omissions.
Section 11.03 Designation of REMIC(s).
The REMIC Administrator will make an election to treat the entire segregated pool of assets described in
the definition of Trust Estate (but excluding the Pre-Funding Account and the Capitalized Interest Account), and
subject to this Agreement (including the Mortgage Loans, as set forth in Section 2.06 of the Trust Agreement ) as
a REMIC ("REMIC I") and will make an election to treat the pool of assets comprised of the REMIC I Regular
Interests as a REMIC ("REMIC II") for federal income tax purposes.
The REMIC I Regular Interests will be "regular interests" in REMIC I and the Class R-I Certificates will
be the sole class of "residual interests" in REMIC I for purposes of the REMIC Provisions under the federal
income tax law.
The REMIC II Regular Interests will be "regular interests" in REMIC II and the Class R-II Certificates
will be the sole class of "residual interests" therein for purposes of the REMIC Provisions (as defined herein)
under federal income tax law.
64
IN WITNESS WHEREOF, the Issuer and the Indenture Trustee have caused their names to be signed hereto by
their respective officers thereunto duly authorized, all as of the day and year first above written.
GMACM HOME EQUITY LOAN TRUST
2007-HE1, as Issuer
By: WILMINGTON TRUST COMPANY, not in
its individual capacity but solely as Owner
Trustee
By: _________________________________________
Name:
Title:
THE BANK OF NEW YORK TRUST
COMPANY, N.A., as Indenture Trustee
By: __________________________________________
Name:
Title:
THE BANK OF NEW YORK TRUST COMPANY, N.A.
xxxxxx accepts appointment as Paying
Agent pursuant to Section 3.03 hereof
and as Note Registrar pursuant to Section
4.02 hereof.
By: __________________________________
Name:
Title:
Signatures and Seals
65
STATE OF _______________ )
) ss.:
COUNTY OF _____________ )
On this ___ day of March 2007, before me personally appeared ____________, to me known, who being by me
duly sworn, did depose and say, that he/she resides at _____________, that he/she is the ____________ of
Wilmington Trust Company, the Owner Trustee, one of the corporations described in and which executed the above
instrument; that he/she knows the seal of said corporation; that the seal affixed to said instrument is such
corporate seal; that it was so affixed by order of the Board of Directors of said corporation; and that he/she
signed his/her name thereto by like order.
___________________________________________________
Notary Public
Acknowledgements
66
STATE OF _______________ )
) ss.:
COUNTY OF _____________ )
On this ___ day of March 2007, before me personally appeared __________, to me known, who being by me
duly sworn, did depose and say, that he/she resides at _____________; that he/she is the ___________ of The Bank
of New York Trust Company, N.A. as Indenture Trustee, one of the corporations described in and which executed the
above instrument; that he/she knows the seal of said corporation; that the seal affixed to said instrument is
such corporate seal; that it was so affixed by order of the Board of Directors of said corporation; and that
he/she signed his/her name thereto by like order.
________________________________________________
Notary Public
NOTORIAL SEAL
67
APPENDIX A
DEFINITIONS
Accrued Certificate Interest: With respect to the Class SB Certificates, interest accrued during the related Interest
Period at the Certificate Rate for such Certificate on its Notional Amount for such Payment Date.
Addition Notice: With respect to the transfer of Subsequent Mortgage Loans to the Issuer by a Seller pursuant to
Section 2.2 of the Purchase Agreement (in substantially the form set forth in Exhibit 3 to such agreement), a notice given by the
respective Seller to the Rating Agencies, the Indenture Trustee, the Enhancer and the Owner Trustee, which shall be given not later
than seven Business Days prior to the related Subsequent Transfer Date, of (i) the Seller's designation of Subsequent Mortgage Loans
to be sold to the Issuer and (ii) the aggregate principal balance as of the Subsequent Cut-Off Date of such Subsequent Mortgage Loans.
Adverse REMIC Event: As defined in Section 11.01(f) of the Indenture.
Affiliate: With respect to any Person, any other Person controlling, controlled by or under common control with such
Person. For purposes of this definition, "control" means the power to direct the management and policies of a Person, directly or
indirectly, whether through ownership of voting securities, by contract or otherwise and "controlling" and "controlled" shall have
meanings correlative to the foregoing.
Appraised Value: With respect to any Mortgaged Property, either (x) the value as generally set forth in an appraisal of
such Mortgaged Property used to establish compliance with the underwriting criteria then in effect in connection with the application
for the Mortgage Loan secured by such Mortgaged Property, or (y) if the sales price of such Mortgaged Property is considered in
accordance with the underwriting criteria applicable to the related Mortgage Loan, the lesser of (i) the appraised value referred to
in (x) above and (ii) the sales price of such Mortgaged Property.
Assignment of Mortgage: With respect to any Mortgage, an assignment, notice of transfer or equivalent instrument, in
recordable form, sufficient under the laws of the jurisdiction in which the related Mortgaged Property is located to reflect the
conveyance of such Mortgage, which assignment, notice of transfer or equivalent instrument may be in the form of one or more blanket
assignments covering Mortgages secured by Mortgaged Properties located in the same jurisdiction.
Authorized Newspaper: A newspaper of general circulation in the Borough of Manhattan, The City of New York, printed in the
English language and customarily published on each Business Day, whether or not published on Saturdays, Sundays or holidays.
Authorized Officer: With respect to the Issuer, any officer of the Owner Trustee who is authorized to act for the Owner
Trustee in matters relating to the Issuer and who is identified on the list of Authorized Officers delivered by the Owner Trustee to
the Indenture Trustee on the Closing Date (as such list may be modified or supplemented from time to time thereafter).
1
Bankruptcy Code: The Bankruptcy Code of 1978, as amended.
Basic Documents: The Trust Agreement, the Indenture, the Purchase Agreement, the Insurance Agreement, the Policy, the
Servicing Agreement, the Custodial Agreement, any Subsequent Transfer Agreement and the other documents and certificates delivered in
connection with any of the above.
Beneficial Owner: With respect to any Note, the Person who is the beneficial owner of such Note as reflected on the books
of the Depository or on the books of a Person maintaining an account with such Depository (directly as a Depository Participant or
indirectly through a Depository Participant, in accordance with the rules of such Depository).
Billing Cycle: With respect to any Mortgage Loan and Due Date, the calendar month preceding such Due Date.
Book-Entry Notes: Beneficial interests in the Notes, ownership and transfers of which shall be made through book entries by
the Depository as described in Section 4.06 of the Indenture.
Business Day: Any day other than (i) a Saturday or a Sunday or (ii) a day on which banking institutions in the States of
New York, Pennsylvania, Delaware or any State in which the Corporate Trust Office are required or authorized by law to be closed.
Capitalized Interest Account: The account established and maintained pursuant to Section 3.19 of the Servicing Agreement.
Capitalized Interest Requirement: With respect to each Payment Date during the Pre-Funding Period and on the Payment Date
immediately after the end of the Pre-Funding Period, the excess, if any of (i) the sum of (A) the amount of interest that would
accrue at the Net WAC Rate for the related Interest Period on the amount on deposit in the Pre-Funding Account as of the close of
business on the preceding Payment Date (or as of the Closing Date, in the case of the first Payment Date) and (B) the amount of any
fees paid to the Enhancer for the Policy, over (ii) the amount of reinvestment earnings since the preceding Payment Date (or the
Closing Date, in the case of the first Payment Date) in the Pre-Funding Account.
Certificate Balance: With respect to any Payment Date and the Class SB Certificates, an amount equal to the then applicable
Certificate Percentage Interest of such Certificate multiplied by the Overcollateralization Amount.
Certificate Distribution Amount: For any Payment Date, the amount, if any, distributable on the Certificates for such
Payment Date pursuant to Section 3.05(a)(xv) of the Indenture.
Certificate of Trust: The Certificate of Trust filed for the Trust pursuant to Section 3810(a) of the Statutory Trust
Statute.
2
Certificate Paying Agent: The Certificate Paying Agent appointed pursuant to Section 3.10 of the Trust Agreement.
Initially the Indenture Trustee has been appointed as the Certificate Paying Agent.
Certificate Percentage Interest: With respect to any Payment Date and any Certificate, the Percentage Interest for such
Certificate.
Certificate Rate: With respect to the Class SB Certificates and REMIC II Regular Interest SB-IO and any Payment Date, a rate
per annum equal to the percentage equivalent of a fraction, the numerator of which is the sum of the amounts calculated pursuant to
clauses (i) through (iii) below, and the denominator of which is the aggregate Uncertificated Principal Balance of the REMIC I
Regular Interests. For purposes of calculating the Certificate Rate for the Class SB Certificates and REMIC II Regular Interest
SB-IO, the numerator is equal to the sum of the following components:
(i) the REMIC I Remittance Rate for REMIC I Regular Interest LT1 minus the SB-IO Marker Rate, applied to a notional amount
equal to the Uncertificated Principal Balance of REMIC I Regular Interest LT1;
(ii) the REMIC I Remittance Rate for REMIC I Regular Interest LT2 minus the SB-IO Marker Rate, applied to a notional amount
equal to the Uncertificated Principal Balance of REMIC I Regular Interest LT2; and
(iii) the REMIC I Remittance Rate for REMIC I Regular Interest LT4 minus twice the SB-IO Marker Rate, applied to a notional
amount equal to the Uncertificated Principal Balance of REMIC I Regular Interest LT4.
Certificate Register: The register maintained by the Certificate Registrar in which the Certificate Registrar shall provide
for the registration of Certificates and of transfers and exchanges of Certificates.
Certificate Registrar: The Certificate Registrar appointed pursuant to Section 3.05 of the Trust Agreement. Initially the
Indenture Trustee has been appointed as the Certificate Registrar.
Certificateholder: The Person in whose name a Certificate is registered in the Certificate Register except that, any
Certificate registered in the name of the Issuer, the Owner Trustee or the Indenture Trustee or any Affiliate of the Owner Trustee or
the Indenture Trustee shall be deemed not to be outstanding and the registered holder will not be considered a Certificateholder for
purposes of giving any request, demand, authorization, direction, notice, consent or waiver under the Indenture or the Trust
Agreement; provided that, in determining whether the Indenture Trustee or the Owner Trustee shall be protected in relying upon any
such request, demand, authorization, direction, notice, consent or waiver, only Certificates that the Indenture Trustee or the Owner
Trustee knows to be so owned shall be so disregarded. Owners of Certificates that have been pledged in good faith may be regarded as
Certificateholders if the pledgee establishes to the satisfaction of the Indenture Trustee or the Owner Trustee, as the case may be,
the pledgee's right so to act with respect to such Certificates and that the pledgee is not the Issuer, any other obligor upon the
Certificates or any Affiliate of the Owner Trustee or the Indenture Trustee.
3
Certificates: Collectively, the Class R and the Class SB Certificates.
Class : With respect to any Note, all Notes that bear the same Class designation, (i.e., the Class A-1 Notes as a group,
Class A-2 Notes as a group, Class A-3 Notes as a group, Class A-4 Notes as a group and the Class A-5 Notes as a group). With respect
to any Certificate, all Certificates that bear the same Class designation, (i.e., the Class SB Certificates as a group, Class R-I
Certificates as a group and Class R-II Certificates as a group). With respect to any Regular Interest, all Regular Interests that
bear the same class designation.
Class A-1 Notes: The Class A-1 GMACM Home Equity Loan-Backed Term Notes, Series 2007-HE1, in substantially the form set
forth in Exhibit A-1 to the Indenture.
Class A-2 Notes: The Class A-2 GMACM Home Equity Loan-Backed Term Notes, Series 2007-HE1, in substantially the form set
forth in Exhibit A-1 to the Indenture.
Class A-3 Notes: The Class A-3 GMACM Home Equity Loan-Backed Term Notes, Series 2007-HE1, in substantially the form set
forth in Exhibit A-1 to the Indenture.
Class A-4 Notes: The Class A-4 GMACM Home Equity Loan-Backed Term Notes, Series 2007-HE1, in substantially the form set
forth in Exhibit A-1 to the Indenture.
Class A-5 Lockout Distribution Amount: With respect to any Payment Date, the product of (a) the Class A-5 Lockout
Percentage for such Payment Date and (b) the Class A-5 Pro Rata Distribution Amount for such Payment Date. In no event shall the
Class A-5 Lockout Distribution Amount for a Payment Date exceed the Principal Collection Distribution Amount or the Note Balance of
the Class A-5 Notes immediately prior to such Payment Date.
Class A-5 Lockout Percentage: With respect to each Payment Date, the applicable percentage set forth below:
Class A-5
Payment Dates Lockout Percentage
_________________________________________________________________ __________________
April 2007 through and including March 2010...................... 0%
April 2010 through and including March 2012...................... 45%
April 2012 through and including March 2013...................... 80%
April 2013 through and including March 2014...................... 100%
April 2014 and thereafter........................................ 300%
Class A-5 Notes: The Class A-5 GMACM Home Equity Loan-Backed Term Notes, Series 2007-HE1, in substantially the form set
forth in Exhibit A-1 to the Indenture.
Class A-5 Pro Rata Distribution Amount: With respect to any Payment Date, an amount equal to the product of (a) a fraction,
the numerator of which is the Note Balance of the Class A-5 Notes immediately prior to such Payment Date and the denominator of which
is the aggregate Note Balance of the Notes immediately prior to such Payment Date and (b) the Principal Distribution Amount.
4
Class Principal Balance: For each Class of Notes, the Initial Note Balance thereof as reduced on each successive Payment
Date by principal distributed in respect thereof on such Payment Date pursuant to Section 3.03 of the Servicing Agreement and Section
3.05 of the Indenture.
Class R Certificates: The Class R-I Certificates and Class R-II Certificates, each as substantially in the form of Exhibit
I to the Trust Agreement and entitled to distributions as provided in the Trust Agreement.
Class SB Certificates: The Class SB Certificates substantially in the form of Exhibit A to the Trust Agreement and entitled
to distributions as provided in the Trust Agreement.
Class SB Distribution Amount: On any Payment Date, the sum of (i) Accrued Certificate Interest for such Payment Date, (ii)
the amounts payable to the Certificates pursuant to Section 3.05(a)(x) of the Indenture and (iii) the Overcollateralization Release
Amount, if any, for the Determination Date related to such Payment Date, reduced, but not below zero, by the Liquidation Loss
Distribution Amount and Overcollateralization Increase Amount for such Payment Date, all of the foregoing done without double
counting either in addition or subtraction.
Closing Date: March 29, 2007.
Code: The Internal Revenue Code of 1986, as amended, and the rules and regulations promulgated thereunder.
Collateral: The meaning specified in the Granting Clause of the Indenture.
Collection Period: With respect to any Mortgage Loan and Payment Date, the calendar month preceding any such Payment Date.
Collections: With respect to any Collection Period, all Interest Collections and Principal Collections during such
Collection Period.
Combined Loan-to-Value Ratio or CLTV: With respect to each Mortgage Loan, the ratio, expressed as a percentage, of the sum
of (i) the initial principal balance of such Mortgage Loan, and (ii) any outstanding principal balance, at origination of such
Mortgage Loan, of all other mortgage loans, if any, secured by senior or subordinate liens on the related Mortgaged Property, to the
Appraised Value, or, when not available, the Stated Value.
Commission: The Securities and Exchange Commission.
Corporate Trust Office: With respect to the Indenture Trustee, Certificate Registrar, Certificate Paying Agent and Paying
Agent, the principal corporate trust office of the Indenture Trustee and Note Registrar at which at any particular time its corporate
trust business shall be administered, which office at the date of the execution of this instrument is located at 0 Xxxxx XxXxxxx
Xxxxxx, Xxxxx 0000, Xxxxxxx, Xxxxxxxx 00000, Attention: Structured Finance Services - GMACM Home Equity Loan Trust Series 2007 HE1.
With respect to the Owner Trustee, the principal corporate trust office of the Owner Trustee at which at any particular time its
corporate trust business shall be administered, which office at the date of the execution of this Trust Agreement is located at
Xxxxxx Square North, 0000 Xxxxx Xxxxxx Xxxxxx, Xxxxxxxxxx, Xxxxxxxx 00000, Attention: Corporate Trust Administration.
5
Custodial Account: The account or accounts created and maintained by the Servicer pursuant to Section 3.02(b) of the
Servicing Agreement, in which the Servicer shall deposit or cause to be deposited certain amounts in respect of the Mortgage Loans.
Custodial Agreement: The Custodial Agreement, dated the Closing Date, among the Custodian, the Indenture Trustee, the
Issuer and the Servicer relating to the custody of the Mortgage Loans and the Related Documents.
Custodian: GMAC Bank and its successors and assigns, as applicable pursuant to the Custodial Agreement, or any other
successor custodian of the Mortgage Files appointed by the Indenture Trustee and reasonably acceptable to the Enhancer and the
Servicer.
Cut-Off Date: March 1, 2007.
Cut-Off Date Principal Balance: With respect to any Initial Mortgage Loan or Subsequent Mortgage Loan, the unpaid principal
balance thereof as of the close of business on the last day of the Billing Cycle immediately prior to the Cut-Off Date or Subsequent
Cut-Off Date, as the case may be.
Default: Any occurrence which is or with notice or the lapse of time or both would become an Event of Default.
Deficiency Amount: As defined in the Policy.
Definitive Notes: Any definitive, fully registered Note, as described in Section 4.06 of the Indenture.
Deleted Loan: A Mortgage Loan replaced or to be replaced with an Eligible Substitute Loan.
Delinquent: As used herein, a Mortgage Loan is considered to be: "30 to 59 days" or "30 or more days" delinquent when a
payment due on any scheduled due date remains unpaid as of the close of business on the next following monthly due date. Since the
determination as to whether a Mortgage Loan falls into these categories is made as of the close of business on the last business day
of each month, a Mortgage Loan with a payment due on July 1 that remained unpaid as of the close of business on July 31 would still
be considered current as of July 31. If that payment remained unpaid as of the close of business on August 31, the Mortgage Loan
would then be considered 30-59 days delinquent. Delinquency information as of the Cut-off Date is determined and prepared as of the
close of business on the last business day immediately prior to the Cut-off Date.
6
Delinquency Percentages: With respect to any Payment Date, the percentage equivalent of a fraction (A) the numerator of
which is the Principal Balance that are Delinquent for 60 days or more as of such Payment Date and (B) the denominator of which is
the Pool Balance, in each case as of the beginning of the related Collection Period, expressed as a percentage.
Depositor: Residential Asset Mortgage Products, Inc., a Delaware corporation, or its successor in interest.
Depository: The Depository Trust Company or a successor appointed by the Indenture Trustee with the approval of the
Issuer. Any successor to the Depository shall be an organization registered as a "clearing agency" pursuant to Section 17A of the
Exchange Act and the regulations of the Commission thereunder.
Depository Participant: A Person for whom, from time to time, the Depository effects book-entry transfers and pledges of
securities deposited with the Depository.
Determination Date: With respect to any Payment Date, the 18th day of the month in which such Payment Date occurs or if
such day is not a Business Day, the next succeeding Business Day.
Disqualified Organization: Any organization defined as a "disqualified organization" under Section 860E(e)(5) of the Code,
and if not otherwise included, any of the following: (i) the United States, any State or political subdivision thereof, any
possession of the United States, or any agency or instrumentality of any of the foregoing (other than an instrumentality which is a
corporation if all of its activities are subject to tax and, except for Freddie Mac, a majority of its board of directors is not
selected by such governmental unit), (ii) a foreign government, any international organization, or any agency or instrumentality of
any of the foregoing, (iii) any organization (other than certain farmers' cooperatives described in Section 521 of the Code) which is
exempt from the tax imposed by Chapter 1 of the Code (including the tax imposed by Section 511 of the Code on unrelated business
taxable income), (iv) rural electric and telephone cooperatives described in Section 1381(a)(2)(C) of the Code, (v) any "electing
large partnership," as defined in Section 775(a) of the Code and (vi) any other Person so designated by the Trustee based upon an
Opinion of Counsel that the holding of an Ownership Interest in a Class R Certificate by such Person may cause the Trust Estate or
any Person having an Ownership Interest in any Class of Certificates (other than such Person) to incur a liability for any federal
tax imposed under the Code that would not otherwise be imposed but for the Transfer of an Ownership Interest in a Class R Certificate
to such Person. The terms "United States," "State" and "international organization" shall have the meanings set forth in Section
7701 of the Code or successor provisions.
Distribution Account: The account or accounts created and maintained by the Certificate Paying Agent pursuant to
Section 3.10(c) of the Trust Agreement. The Certificate Paying Agent will make all distributions on the Certificates from money on
deposit in the Distribution Account.
Due Date: With respect to each Mortgage Loan, the date on which monthly payments on such Mortgage Loan are due.
7
Eligible Account: An account that is any of the following: (i) maintained with a depository institution the short-term
debt obligations of which have been rated by each Rating Agency in its highest rating category available, or (ii) an account or
accounts in a depository institution in which such accounts are fully insured to the limits established by the FDIC, provided that
any deposits not so insured shall, to the extent acceptable to each Rating Agency, as evidenced in writing, be maintained such that
(as evidenced by an Opinion of Counsel delivered to the Indenture Trustee and each Rating Agency) the Indenture Trustee have a claim
with respect to the funds in such account or a perfected first security interest against any collateral (which shall be limited to
Permitted Investments) securing such funds that is superior to claims of any other depositors or creditors of the depository
institution with which such account is maintained, or (iii) an account or accounts maintained with a depository institution or trust
company, as long as its short-term debt obligations are rated P-1 by Xxxxx'x, and A-1+ by Standard & Poor's (or the equivalent) or
better by each Rating Agency, and its long term debt obligations are rated A2 by Xxxxx'x and AA- by Standard & Poor's (or the
equivalent) or better by each Rating Agency, or (iv) a segregated trust account or accounts maintained in the corporate trust
division of a depository institution or trust company, acting in its fiduciary capacity, or (v) an account or accounts of a
depository institution acceptable to each Rating Agency (as evidenced in writing by each Rating Agency that use of any such account
will not cause a Rating Event (if determined without regard to the Policy).
Eligible Substitute Loan: A Mortgage Loan substituted by either Seller for a Deleted Loan, which must, on the date of such
substitution, as confirmed in an Officers' Certificate delivered to the Indenture Trustee, (i) have an outstanding principal balance,
after deduction of the principal portion of the monthly payment due in the month of substitution (or in the case of a substitution of
more than one Mortgage Loan for a Deleted Mortgage Loan, an aggregate outstanding principal balance, after such deduction), not in
excess of the outstanding principal balance of the Deleted Loan (the amount of any shortfall to be deposited by the Seller in the
Custodial Account in the month of substitution); (ii) comply with each representation and warranty made by GMACM and set forth in
Section 3.1(b) of the Purchase Agreement, other than clauses (viii), (xiii), (xxiv), (xxv)(B), (xxvi) and (xxvii) thereof, and comply
with each of the representations and warranties made by WG Trust 2003 set forth in Section 3.1(d)(II) of the Purchase Agreement, as
of the date of substitution; (iii) have a Loan Rate and Net Loan Rate no lower than and not more than 1% per annum higher than the
Loan Rate and Net Loan Rate, respectively, of the Deleted Loan as of the date of substitution; (iv) have a CLTV at the time of
substitution no higher than that of the Deleted Loan at the time of substitution; (v) have a remaining term to stated maturity not
greater than (and not more than one year less than) that of the Deleted Loan; and (vi) not be 30 days or more delinquent.
Enhancer: MBIA Insurance Corporation, or any successor thereto.
Enhancer Default: Any failure by the Enhancer to make a payment required under the Policy in accordance with its terms.
Enhancer Optional Deposit: Amounts deposited by or on behalf of the Enhancer in the Note Payment Account, other than
Insured Amounts, to be applied to the Notes.
ERISA: The Employee Retirement Income Security Act of 1974, as amended.
8
Event of Default: With respect to the Indenture, any one of the following events (whatever the reason for such Event of
Default and whether it shall be voluntary or involuntary or be effected by operation of law or pursuant to any judgment, decree or
order of any court or any order, rule or regulation of any administrative or governmental body):
(a) a default in the payment of the principal of, any installment of the principal of or interest on any Note when the same
becomes due and payable, and such default shall continue for a period of five days;
(b) there occurs a default in the observance or performance in any material respect of any covenant or agreement of the
Issuer made in the Indenture, or any representation or warranty of the Issuer made in the Indenture or in any certificate delivered
pursuant hereto or in connection herewith proving to have been incorrect in any material respect as of the time when the same shall
have been made that has a material adverse effect on the Noteholders or the Enhancer, and such default shall continue or not be
cured, or the circumstance or condition in respect of which such representation or warranty was incorrect shall not have been
eliminated or otherwise cured, for a period of 30 days after there shall have been given, by registered or certified mail, to the
Issuer by the Indenture Trustee or to the Issuer and the Indenture Trustee by the Enhancer or the Noteholders of at least 25% of the
aggregate Note Balance of the Notes, a written notice specifying such default or incorrect representation or warranty and requiring
it to be remedied and stating that such notice is a notice of default hereunder;
(c) there occurs the filing of a decree or order for relief by a court having jurisdiction in the premises in respect of
the Issuer or any substantial part of the Trust Estate in an involuntary case under any applicable federal or state bankruptcy,
insolvency or other similar law now or hereafter in effect, or appointing a receiver, liquidator, assignee, custodian, trustee,
sequestrator or similar official of the Issuer or for any substantial part of the Trust Estate, or ordering the winding-up or
liquidation of the Issuer's affairs, and such decree or order shall remain unstayed and in effect for a period of 60 consecutive
days; or
(d) there occurs the commencement by the Issuer of a voluntary case under any applicable federal or state bankruptcy,
insolvency or other similar law now or hereafter in effect, or the consent by the Issuer to the entry of an order for relief in an
involuntary case under any such law, or the consent by the Issuer to the appointment or taking possession by a receiver, liquidator,
assignee, custodian, trustee, sequestrator or similar official of the Issuer or for any substantial part of the assets of the Trust
Estate, or the making by the Issuer of any general assignment for the benefit of creditors, or the failure by the Issuer generally to
pay its debts as such debts become due, or the taking of any action by the Issuer in furtherance of any of the foregoing.
Exchange Act: The Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder.
Excess Spread: With respect to any Payment Date and without taking into account any Insured Amount, if any, paid by the
Enhancer under the Policy for such Payment Date, the excess, if any, of (i) Interest Collections for the related Collection Period
over (ii) the sum of (x) the sum of (A) the premium allocable to such Payment Date and (B) any unpaid premium for the Policy, with
interest thereon as provided in the Insurance Agreement and (y) the aggregate amount distributed to the Noteholders as interest on
such Payment Date pursuant to Section 3.05(a)(i) of the Indenture.
9
Expenses: The meaning specified in Section 7.02 of the Trust Agreement.
Xxxxxx Xxx: Xxxxxx Xxx, formerly the Federal National Mortgage Association, or any successor thereto.
FDIC: The Federal Deposit Insurance Corporation or any successor thereto.
Final Payment Date: The Payment Date in August 2037.
Fiscal Year: The fiscal year of the Trust, which shall end on December 31 of each year.
Foreclosure Profit: With respect to a Liquidated Mortgage Loan, the amount, if any, by which (i) the aggregate of
Liquidation Proceeds net of Liquidation Expenses exceeds (ii) the Principal Balance of such Liquidated Mortgage Loan (plus accrued
and unpaid interest thereon at the applicable Loan Rate from the date interest was last paid through the date of receipt of the final
Liquidation Proceeds) immediately prior to the final recovery of the related Liquidation Proceeds.
Form 10-K Certification: As defined in Section 4.02(c) of the Servicing Agreement.
Freddie Mac: Freddie Mac, formerly the Federal Home Loan Mortgage Corporation, or any successor thereto.
GAAP: Generally accepted accounting principles.
Xxxxx: Pledge, bargain, sell, warrant, alienate, remise, release, convey, assign, transfer, create, and xxxxx x xxxx upon
and a security interest in and right of set-off against, deposit, set over and confirm pursuant to the Indenture. A Grant of the
Collateral or of any other agreement or instrument shall include all rights, powers and options (but none of the obligations) of the
granting party thereunder, including the immediate and continuing right to claim for, collect, receive and give receipt for principal
and interest payments in respect of such collateral or other agreement or instrument and all other moneys payable thereunder, to give
and receive notices and other communications, to make waivers or other agreements, to exercise all rights and options, to bring
proceedings in the name of the granting party or otherwise, and generally to do and receive anything that the granting party is or
may be entitled to do or receive thereunder or with respect thereto.
GMAC: GMAC LLC, and its successors and assigns.
GMACM: GMAC Mortgage, LLC, and its successors and assigns.
Indemnified Party: The meaning specified in Section 7.02 of the Trust Agreement.
10
Indenture: The indenture dated as of the Closing Date between the Issuer and the Indenture Trustee.
Indenture Trustee: The Bank of New York Trust Company, N.A., a national banking association, and its successors and assigns
or any successor indenture trustee appointed pursuant to the terms of the Indenture.
Independent: When used with respect to any specified Person, such Person (i) is in fact independent of the Issuer, any
other obligor on the Notes, the Sellers, the Depositor and any Affiliate of any of the foregoing Persons, (ii) does not have any
direct financial interest or any material indirect financial interest in the Issuer, any such other obligor, the Sellers, the
Depositor or any Affiliate of any of the foregoing Persons and (iii) is not connected with the Issuer, any such other obligor, the
Sellers, the Depositor or any Affiliate of any of the foregoing Persons as an officer, employee, promoter, underwriter, trustee,
partner, director or person performing similar functions.
Independent Certificate: A certificate or opinion to be delivered to the Indenture Trustee under the circumstances
described in, and otherwise complying with, the applicable requirements of Section 10.01 of the Indenture, made by an Independent
appraiser or other expert appointed by an Issuer Order and approved by the Indenture Trustee in the exercise of reasonable care, and
such opinion or certificate shall state that the signer has read the definition of "Independent" in this Indenture and that the
signer is Independent within the meaning thereof.
Initial Aggregate Note Balance: $1,185,871,000.
Initial Class A-1 Note Balance: $677,500,000.
Initial Class A-2 Note Balance: $136,300,000.
Initial Class A-3 Note Balance: $129,600,000.
Initial Class A-4 Note Balance: $123,871,000.
Initial Class A-5 Note Balance: $118,600,000.
Initial Certificate Balance: $169.47.
Initial Mortgage Loans: The mortgage loans initially transferred by the Depositor to the Issuer on the Closing Date, which
are listed on the Mortgage Loan Schedule on such date.
Initial Note Balance: The Initial Class A-1 Note Balance, Initial Class A-2 Note Balance, Initial Class A-3 Note Balance,
Initial Class A-4 Note Balance or Initial Class A-5 Note Balance as applicable.
Initial Pool Balance: The sum of (a) the aggregate Principal Balances of the Initial Mortgage Loans as of the Cut-off Date
and (b) the Original Pre-Funded Amount.
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Insolvency Event: With respect to a specified Person, (a) the filing of a decree or order for relief by a court having
jurisdiction in the premises in respect of such Person or any substantial part of its property in an involuntary case under any
applicable bankruptcy, insolvency or other similar law now or hereafter in effect, or appointing a receiver, liquidator, assignee,
custodian, trustee, sequestrator or similar official for such Person or for any substantial part of its property, or ordering the
winding-up or liquidation of such Person's affairs, and such decree or order shall remain unstayed and in effect for a period of 60
consecutive days; or (b) the commencement by such Person of a voluntary case under any applicable bankruptcy, insolvency or other
similar law now or hereafter in effect, or the consent by such Person to the entry of an order for relief in an involuntary case
under any such law, or the consent by such Person to the appointment of or taking possession by a receiver, liquidator, assignee,
custodian, trustee, sequestrator or similar official for such Person or for any substantial part of its property, or the making by
such Person of any general assignment for the benefit of creditors, or the failure by such Person generally to pay its debts as such
debts become due or the admission by such Person in writing (as to which the Indenture Trustee shall have notice) of its inability to
pay its debts generally, or the adoption by the Board of Directors or managing member of such Person of a resolution which authorizes
action by such Person in furtherance of any of the foregoing.
Insurance Agreement: The Insurance Agreement dated as of March 1, 2007, among the Servicer, the Sellers, the Depositor, the
Issuer, the Indenture Trustee, the Owner Trustee and the Enhancer, including any amendments and supplements thereto.
Insurance Proceeds: Proceeds paid by any insurer (other than the Enhancer) pursuant to any insurance policy covering a
Mortgage Loan which are required to be remitted to the Servicer, or amounts required to be paid by the Servicer pursuant to the next
to last sentence of Section 3.04 of the Servicing Agreement, net of any component thereof (i) covering any expenses incurred by or on
behalf of the Servicer in connection with obtaining such proceeds, (ii) that is applied to the restoration or repair of the related
Mortgaged Property, (iii) released to the related Mortgagor in accordance with the Servicer's normal servicing procedures or
(iv) required to be paid to any holder of a mortgage senior to such Mortgage Loan.
Insured Amount: As defined in the Policy.
Interest Carry Forward Amount: With respect to any Payment Date and any Class of Notes (other than the Class A-1 Notes) the
sum of:
(1) if on such Payment Date the Note Rate on any such Class is limited to the Net WAC Rate, the excess of (a) the amount of
interest such Class would have been entitled to receive without regard to the Net WAC Rate on such Payment Date, over (b) the amount
of interest that such Class was entitled to receive on such Payment Date because the applicable Note Rate was calculated at the Net
WAC Rate; and
(2) the Interest Carry Forward Amount for all previous Payment Dates for such Class not previously paid, together with
interest thereon at a rate equal to the Note Rate for such Payment Date.
With respect to any Payment Date and the Class A-1 Notes, the sum of: (1) the excess of:
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o if on such Payment Date the Note Rate for the Class A-1 Notes is limited to the Net WAC Rate,
the amount of interest that the Class A-1 Notes would have been entitled to receive on such
Payment Date had the applicable Note Rate been calculated as a per annum rate equal to the
lesser of (a) One-Month LIBOR plus the related Margin and (b) with respect to the Class A-1
Notes only, 10.00%, over
o the amount of interest that the Class A-1 Notes were entitled to receive on such Payment Date
because the applicable Note Rate was calculated at the Net WAC Rate; and
(2) the Interest Carry Forward Amount for the Class A-1 Notes for all previous Payment Dates not previously paid, together
with interest thereon at a rate equal to the applicable Note Rate for such Payment Date.
Interest Collections: With respect to any Payment Date, the sum of all payments by or on behalf of Mortgagors and any other
amounts constituting interest (including without limitation such portion of Insurance Proceeds, Net Liquidation Proceeds and
Repurchase Prices as is allocable to interest on the applicable Mortgage Loan) as is paid by the Sellers or the Servicer (including
any optional servicing advance) or is collected and applied by the Servicer under the Mortgage Loans during the related Collection
Period, and reduced by the Servicing Fee for the related Collection Period and by any fees (including annual fees) or late charges or
similar administrative fees paid by Mortgagors during the related Collection Period. The terms of the related Mortgage Note shall
determine the portion of each payment in respect of such Mortgage Loan that constitutes principal or interest.
Interest Coverage Amount: The amount to be paid from proceeds from the sale of the Notes for deposit into the Capitalized
Interest Account pursuant to Section 3.19 of the Servicing Agreement on the Closing Date, which amount initially shall be
$3,055,120.96 and thereafter, shall be the amount computed in accordance with Section 3.19 of the Servicing Agreement.
Interest Period: With respect to each Class of Notes (other than the Class A-1 Notes) and any Payment Date, the calendar
month preceding such Payment Date. With respect to any Payment Date and the Class A-1 Notes, other than the first Payment Date, the
period commencing on the Payment Date in the month immediately preceding the month in which such Payment Date occurs and ending on
the day preceding such Payment Date, and in the case of the first Payment Date, the period commencing on the Closing Date and ending
on the day preceding the first Payment Date.
Issuer or Trust: The GMACM Home Equity Loan Trust 2007-HE1, a Delaware statutory trust, or its successor in interest.
Issuer Order or Issuer Request: A written order or request signed in the name of the Issuer by any one of its Authorized
Officers and delivered to the Indenture Trustee.
LIBOR Business Day: Any day other than (i) a Saturday or a Sunday or (ii) a day on which banking institutions in the city
of London, England are required or authorized by law to be closed.
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Lien: Any mortgage, deed of trust, pledge, conveyance, hypothecation, assignment, participation, deposit arrangement,
encumbrance, lien (statutory or other), preference, priority right or interest or other security agreement or preferential
arrangement of any kind or nature whatsoever, including, without limitation, any conditional sale or other title retention agreement,
any financing lease having substantially the same economic effect as any of the foregoing and the filing of any financing statement
under the UCC (other than any such financing statement filed for informational purposes only) or comparable law of any jurisdiction
to evidence any of the foregoing; provided, however, that any assignment pursuant to Section 6.02 of the Servicing Agreement shall
not be deemed to constitute a Lien.
Liquidated Mortgage Loan: With respect to any Payment Date, any Mortgage Loan in respect of which the Servicer has
determined, in accordance with the servicing procedures specified in the Servicing Agreement, as of the end of the related Collection
Period that substantially all Liquidation Proceeds which it reasonably expects to recover, if any, with respect to the disposition of
the related REO Property have been recovered.
Liquidation Expenses: All out-of-pocket expenses (exclusive of overhead) incurred by or on behalf of the Servicer in
connection with the liquidation of any Mortgage Loan and not recovered under any insurance policy, including legal fees and expenses,
any unreimbursed amount expended (including, without limitation, amounts advanced to correct defaults on any mortgage loan which is
senior to such Mortgage Loan and amounts advanced to keep current or pay off a mortgage loan that is senior to such Mortgage Loan)
respecting such Mortgage Loan and any related and unreimbursed expenditures for real estate property taxes or for property
restoration, preservation or insurance against casualty loss or damage.
Liquidation Loss Amount: With respect to any Payment Date and any Mortgage Loan that became a Liquidated Mortgage Loan
during the related Collection Period, the unrecovered portion of the Principal Balance of such Mortgage Loan and any unpaid accrued
interest thereon at the end of such Collection Period, after giving effect to the Net Liquidation Proceeds applied in reduction of
such Principal Balance.
Liquidation Loss Distribution Amount: With respect to any Payment Date, an amount equal to the sum of (A) 100% of the
Liquidation Loss Amounts on such Payment Date, plus (B) any Liquidation Loss Amounts remaining undistributed from any preceding
Payment Date. Any Liquidation Loss Amount remaining undistributed from any preceding payment date shall not be required to be paid
as a Liquidation Loss Distribution Amount to the extent that a Liquidation Loss Amount was paid on the notes by means of excess
interest or a draw on the Policy or was reflected in the reduction of the Overcollateralization Amount.
Liquidation Proceeds: Proceeds (including Insurance Proceeds but not including amounts drawn under the Policy) if any
received in connection with the liquidation of any Mortgage Loan or related REO Property, whether through trustee's sale, foreclosure
sale or otherwise.
LT1 Principal Distribution Amount: For any Payment Date, the excess, if any, of the REMIC I Principal Reduction Amount for
REMIC I Regular Interest LT1 for such Payment Date over the principal Liquidation Loss Amounts allocated to REMIC I Regular Interest
LT1 on such Payment Date.
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LT2 Principal Distribution Amount: For any Payment Date, the excess, if any, of the REMIC I Principal Reduction Amount
REMIC I Regular Interest LT2 for such Payment Date over the principal Liquidation Loss Amounts allocated to REMIC I Regular Interest
LT2 on such Payment Date.
LT3 Principal Distribution Amount: For any Payment Date, the excess, if any, of the REMIC I Principal Reduction Amount
REMIC I Regular Interest LT3 for such Payment Date over the principal Liquidation Loss Amounts allocated to REMIC I Regular Interest
LT3 on such Payment Date.
LT4 Principal Distribution Amount: For any Payment Date, the excess, if any, of the REMIC I Principal Reduction Amount
REMIC I Regular Interest LT4 for such Payment Date over the principal Liquidation Loss Amounts allocated to REMIC I Regular Interest
LT4 on such Payment Date.
LT5 Principal Distribution Amount: For any Payment Date, the excess, if any, of the REMIC I Principal Reduction Amount
REMIC I Regular Interest LT5 for such Payment Date over the principal Liquidation Loss Amounts allocated to REMIC I Regular Interest
LT5 on such Payment Date.
Loan Rate: With respect to any Mortgage Loan and any day, the per annum rate of interest applicable under the related
Mortgage Note.
Lost Note Affidavit: With respect to any Mortgage Loan as to which the original Mortgage Note has been permanently lost or
destroyed and has not been replaced, an affidavit from the related Seller certifying that the original Mortgage Note has been lost,
misplaced or destroyed (together with a copy of the related Mortgage Note, if available).
Margin: With respect to the Class A-1 Notes, 0.140%.
MERS: Mortgage Electronic Registration Systems, Inc., a corporation organized and existing under the laws of the State of
Delaware, or any successor thereto.
MERS® System: The system of recording transfers of Mortgages electronically maintained by MERS.
MIN: The Mortgage Identification Number for Mortgage Loans registered with MERS on the MERS® System.
MOM Loan: With respect to any Mortgage Loan, MERS acting as the mortgagee of such Mortgage Loan, solely as nominee for the
originator of such Mortgage Loan and its successors and assigns, at the origination thereof.
Monthly Payment: With respect to any Mortgage Loan (including any REO Property) and any Due Date, the payment of principal
and interest due thereon in accordance with the terms of such Mortgage Loan.
Moody's: Xxxxx'x Investors Service, Inc., or its successor in interest.
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Mortgage: The mortgage, deed of trust or other instrument creating a first or second lien on an estate in fee simple
interest in real property securing a Mortgage Loan.
Mortgage File: With respect to each Mortgage Loan:
(i) the original Mortgage Note endorsed or assigned without recourse in blank (which endorsement shall
contain either an original signature or a facsimile signature of an authorized officer of GMACM) or, with respect to any Mortgage
Loan as to which the original Mortgage Note has been permanently lost or destroyed and has not been replaced, a Lost Note Affidavit;
(ii) the original Mortgage, noting the presence of the MIN of the Mortgage Loan, if the Mortgage is
registered on the MERS® System, and language indicating that the Mortgage Loan is a MOM Loan if the Mortgage Loan is a MOM Loan, with
evidence of recording thereon, or, if the original Mortgage has not yet been returned from the public recording office, a copy of the
original Mortgage certified by GMACM that such Mortgage has been sent for recording, or a county certified copy of such Mortgage in
the event the recording office keeps the original or if the original is lost;
(iii) unless the Mortgage Loan is registered on the MERS® System, original assignments (which may be
included in one or more blanket assignments if permitted by applicable law) of the Mortgage in recordable form from GMACM to "The
Bank of New York Trust Company, N.A., as Indenture Trustee under that certain Indenture dated as of March 29, 2007, for GMACM Home
Equity Loan Trust 2007-HE1, Home Equity Loan-Backed Term Notes" c/o the Servicer at an address specified by the Servicer;
(iv) originals of any intervening assignments of the Mortgage from the originator to GMACM (or to MERS, if
the Mortgage Loan is registered on the MERS® System, and which notes the presence of a MIN), with evidence of recording thereon, or,
if the original of any such intervening assignment has not yet been returned from the public recording office, a copy of such
original intervening assignment certified by GMACM that such original intervening assignment has been sent for recording; and
(v) a true and correct copy of each assumption, modification, consolidation or substitution agreement, if
any, relating to such Mortgage Loan; and
(vi) any documents required to be added to such documents pursuant to the Purchase Agreement, the Trust
Agreement or the Servicing Agreement.
It is understood that the Mortgage File (other than item (i) above) may be retained in microfilm, microfiche, optical
storage or magnetic media in lieu of hard copy; provided, that with respect to any Mortgage Loan not registered on the MERS® System,
the original assignment of Mortgage described in clause (iii) above shall be retained in the Mortgage File.
Mortgage Loan Schedule: The initial schedule of Initial Mortgage Loans as of the Cut-Off Date set forth in Exhibit A of the
Servicing Agreement, and as of each Subsequent Cut-Off Date, any Subsequent Mortgage Loans, which schedule sets forth as to each
Mortgage Loan (i) the Cut-Off Date Principal Balance, (ii) the loan number and (iii) the lien position of the related Mortgage.
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Mortgage Loans: At any time, all Initial Mortgage Loans and Subsequent Mortgage Loans that have been sold to the Issuer
pursuant to, in the case of Initial Mortgage Loans, the Trust Agreement, or, in the case of Subsequent Mortgage Loans, a Subsequent
Transfer Agreement, together with all monies due or become due thereunder or the Related Documents, and that remain subject to the
terms thereof.
Mortgage Note: With respect to a Mortgage Loan, the promissory note pursuant to which the related Xxxxxxxxx agrees to pay
the indebtedness evidenced thereby and secured by the related Mortgage as modified or amended.
Mortgaged Property: The underlying property, including real property and improvements thereon, securing a Mortgage Loan.
Mortgagor: The obligor or obligors under a Mortgage Note.
Net Liquidation Proceeds: With respect to any Liquidated Mortgage Loan, Liquidation Proceeds net of Liquidation Expenses
(but not including the portion, if any, of such amount that exceeds the Principal Balance of, plus accrued and unpaid interest on,
such Mortgage Loan at the end of the Collection Period immediately preceding the Collection Period in which such Mortgage Loan became
a Liquidated Mortgage Loan) and including any Recovery Amounts.
Net Loan Rate: With respect to any Payment Date and any Mortgage Loan, the Loan Rate of that Mortgage Loan applicable to the
Due Date in the related Collection Period, net of the Servicing Fee Rate.
Net WAC Rate: With respect to any Payment Date, (i) a per annum rate equal to the weighted average of the Net Loan Rates of
the Mortgage Loans as of the first day of the month preceding the month in which such Payment Date occurs, and weighted on the basis
of the respective Principal Balances of such Mortgage Loans as of the first day of the related Collection Period, minus (ii) the
premium rate on the Policy multiplied by a fraction, the numerator of which is the sum of the Note Balances and the denominator of
which is the Pool Balance.
Net Worth: As of any date of determination, the net worth of GMACM and its consolidated subsidiaries, as determined in
accordance with GAAP.
Non-United States Person: Any Person other than a United States Person.
Note Balance: With respect to any Payment Date and the Notes, the Initial Aggregate Note Balance reduced by all payments of
principal on the Notes prior to such Payment Date and any allocation of Liquidation Loss Amounts on the Notes prior to such Payment
Date.
Note Owner or Owner: The Beneficial Owner of a Note.
Note Payment Account: The account established by the Indenture Trustee pursuant to Sections 3.01 and 8.02 of the Indenture
and Section 5.01 of the Servicing Agreement. Amounts deposited in the Note Payment Account will be distributed by the Indenture
Trustee in accordance with Section 3.05 of the Indenture.
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Note Rate: With respect to each Interest Period and the related Payment Date, a per annum rate equal to with respect to:
(a) the Class A-1 Notes, the least of:
o One-Month LIBOR plus the Margin;
o the Net WAC Cap; and
o 10.00%;
(b) the Class A-2 Notes, the lesser of (i) 5.621% and (ii) the Net WAC Cap;
(c) the Class A-3 Notes, the lesser of (i) 5.773% and (ii) the Net WAC Cap;
(d) the Class A-4 Notes, the lesser of (i) 5.952% plus, with respect to each Payment Date occurring on or after the second
Payment Date following the first possible Optional Call Date, 1.00% and (ii) the Net WAC Rate; and
(e) the Class A-5 Notes, the lesser of (i) 5.705% plus, with respect to each Payment Date occurring on or after the second
Payment Date following the first possible Optional Call Date, 1.00% and (ii) the Net WAC Rate;
Note Register: The register maintained by the Note Registrar in which the Note Registrar shall provide for the registration
of Notes and of transfers and exchanges of Notes.
Note Registrar: The Indenture Trustee, in its capacity as Note Registrar.
Noteholder or Holder: The Person in whose name a Note is registered in the Note Register, except that, any Note registered
in the name of the Depositor, the Issuer or the Indenture Trustee or any Affiliate of any of them shall be deemed not to be
outstanding and the registered holder will not be considered a Noteholder for purposes of giving any request, demand, authorization,
direction, notice, consent or waiver under the Indenture or the Trust Agreement; provided, that in determining whether the Indenture
Trustee shall be protected in relying upon any such request, demand, authorization, direction, notice, consent or waiver, only Notes
that the Indenture Trustee or the Owner Trustee knows to be so owned shall be so disregarded. Owners of Notes that have been pledged
in good faith may be regarded as Noteholders if the pledgee thereof establishes to the satisfaction of the Indenture Trustee or the
Owner Trustee such pledgee's right so to act with respect to such Notes and that such pledgee is not the Issuer, any other obligor on
the Notes or any Affiliate of any of the foregoing Persons.
Notes: Any of the Class A-1 Notes, Class A-2 Notes, Class A-3 Notes, Class A-4 Notes or Class A-5 Notes, issued and
outstanding pursuant to the Indenture.
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Notional Amount: With respect to the Class SB Certificates and REMIC II Regular Interest SB-IO, immediately prior to any
Payment Date a notional amount equal to the aggregate of the Uncertificated Principal Balances of the REMIC I Regular Interests.
Officer's Certificate: With respect to the Servicer, a certificate signed by the President, Managing Director, a Director,
a Vice President or an Assistant Vice President, of the Servicer and delivered to the Indenture Trustee. With respect to the Issuer,
a certificate signed by any Authorized Officer of the Issuer, under the circumstances described in, and otherwise complying with, the
applicable requirements of Section 10.01 of the Indenture, and delivered to the Indenture Trustee. Unless otherwise specified, any
reference in the Indenture to an Officer's Certificate shall be to an Officer's Certificate of any Authorized Officer of the Issuer.
One-Month LIBOR: As to any Interest Period for the Class A-1 Notes, (a) for any Interest Period other than the first
Interest Period, the rate for United States dollar deposits for one month that appears on the Reuters Screen LIBOR01 Page as of 11:00
a.m., London, England time, on the second LIBOR Business Day prior to the first day of that Interest Period or (b) with respect to
the first Interest Period, the rate for United States dollar deposits for one month that appears on the Reuters Screen LIBOR01 Page
as of 11:00 a.m., London, England time, two LIBOR Business Days prior to the Closing Date. If such rate does not appear on such
page, LIBOR will be the Reference Bank Rate determined by the Indenture Trustee. If no such rate appears and the Indenture Trustee
is unable to determine a Reference Bank Rate, LIBOR will be LIBOR applicable to the preceding Interest Period.
Opinion of Counsel: A written opinion of counsel of a law firm reasonably acceptable to the recipient thereof. Any Opinion
of Counsel for the Servicer may be provided by in-house counsel for the Servicer if reasonably acceptable.
Optional Call Date: Any Payment Date on which the Note Balance is less than 10% of the Initial Aggregate Note Balance prior
to giving effect to any payments of principal on such Payment Date.
Original Pre-Funded Amount: The amount deposited from the proceeds of the sale of the Securities into the Pre-Funding
Account on the Closing Date, which amount is $296,467,792.37.
Outstanding: With respect to the Notes, as of the date of determination, all Notes theretofore executed, authenticated and
delivered under this Indenture except:
(i) Notes theretofore cancelled by the Note Registrar or delivered to the Indenture Trustee for cancellation; and
(ii) Notes in exchange for or in lieu of which other Notes have been executed, authenticated and delivered pursuant
to the Indenture unless proof satisfactory to the Indenture Trustee is presented that any such Notes are held by a holder in
due course;
provided, however, that for purposes of effectuating the Enhancer's right of subrogation as set forth in Section 4.12 of the
Indenture only, all Notes that have been paid with funds provided under the Policy shall be deemed to be Outstanding until the
Enhancer has been reimbursed with respect thereto.
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Overcollateralization Amount: With respect to any Payment Date, the amount (but not less than zero), if any, by which (a)
the aggregate outstanding Principal Balance of the Mortgage Loans as of the close of business on the last day of the related
Collection Period, plus amounts on deposit in the Pre-Funding Account (excluding any investment earnings thereon) exceeds (b) the
aggregate Note Balance of the Notes.
Overcollateralization Increase Amount: With respect to any Payment Date, an amount equal to the lesser of (1) the Excess
Spread remaining after the application thereof to the payment of any Liquidation Loss Distribution Amount on such payment date and
(2) the amount necessary to increase the Overcollateralization Amount to the Overcollateralization Target Amount.
Overcollateralization Release Amount: With respect to any Payment Date, the excess, if any, of the Overcollateralization
Amount over the Overcollateralization Target Amount, which, on such Payment Date, shall not exceed an amount equal to the total
Principal Collections for such Payment Date.
Overcollateralization Target Amount: With respect to any Payment Date prior to the Stepdown Date, an amount equal to the
sum of (i) 1.90% of the initial Pool Balance and (ii) 100% of the Principal Balance of the Mortgage Loans which are 180 days or more
delinquent as of the last day of the related Collection Period. With respect to any Payment Date on or after the Stepdown Date, an
amount equal to the greater of (i) the sum of (a) 3.80% of the Pool Balance as of the last day of the related Collection Period and
(b) 100% of the Principal Balance of the Mortgage Loans which are 180 days or more delinquent as of the last day of the related
Collection Period and (ii) the sum of (a) 0.60% of the initial Pool Balance and (b) 100% of the Principal Balance of the Mortgage
Loans which are 180 days or more delinquent as of the last day of the related Collection Period; provided, however, (a) upon the
occurrence of a Servicing Trigger Event, the Overcollateralization Target Amount shall be no less than the Overcollateralization
Target Amount as of the previous Payment Date and (b) if the aggregate amount of Liquidation Loss Amounts (reduced by the aggregate
Subsequent Net Recovery Amounts, if any, with respect to such Payment Date) exceed 3.50% of the Initial Pool Balance, the
Overcollateralization Target Amount will equal 2.05% of the Initial Pool Balance. The Overcollateralization Target Amount may be
reduced from time to time with the consent of the Enhancer and written notice from each Rating Agency that the rating will not be
reduced or withdrawn as a result of the change in the Overcollateralization Target Amount.
Owner Trust: GMACM Home Equity Loan Trust 2007-HE1, created by the Certificate of Trust pursuant to the Trust Agreement.
Owner Trustee: Wilmington Trust Company, not in its individual capacity but solely as owner trustee, and its successors and
assigns or any successor Owner Trustee appointed pursuant to the terms of the Trust Agreement.
Ownership Interest: As to any Certificate, any ownership or security interest in such Certificate, including any interest
in such Certificate as the Certificateholder thereof and any other interest therein, whether direct or indirect, legal or beneficial,
as owner or as pledgee.
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Paying Agent: Any paying agent or co-paying agent appointed pursuant to Section 3.03 of the Indenture, which initially
shall be the Indenture Trustee.
Payment Date: The 25th day of each month, or if such day is not a Business Day, then the next Business Day.
Percentage Interest: With respect to any Note and Payment Date, the percentage obtained by dividing the Note Balance of
such Note by the aggregate Note Balance of all Notes prior to such Payment Date. With respect to any Certificate and any Payment
Date, the Percentage Interest stated on the face of such Certificate.
Permitted Investments: One or more of the following:
(i) obligations of or guaranteed as to principal and interest by the United States or any agency or instrumentality thereof
when such obligations are backed by the full faith and credit of the United States;
(ii) repurchase agreements on obligations specified in clause (i) above maturing not more than one month from the date of
acquisition thereof; provided, that the unsecured short-term debt obligations of the party agreeing to repurchase such obligations
are at the time rated by each Rating Agency in its highest short-term rating category available;
(iii) federal funds, certificates of deposit, demand deposits, time deposits and bankers' acceptances (which shall each
have an original maturity of not more than 90 days and, in the case of bankers' acceptances, shall in no event have an original
maturity of more than 365 days or a remaining maturity of more than 30 days) denominated in United States dollars of any
U.S. depository institution or trust company incorporated under the laws of the United States or any state thereof or of any domestic
branch of a foreign depository institution or trust company; provided, that the short-term debt obligations of such depository
institution or trust company (or, if the only Rating Agency is Standard & Poor's, in the case of the principal depository institution
in a depository institution holding company, debt obligations of the depository institution holding company) at the date of
acquisition thereof have been rated by each Rating Agency in its highest short-term rating category available; and provided further,
that if the only Rating Agency is Standard & Poor's and if the depository or trust company is a principal subsidiary of a bank
holding company and the debt obligations of such subsidiary are not separately rated, the applicable rating shall be that of the bank
holding company; and provided further, that if the only Rating Agency is Standard & Poor's and the original maturity of such
short-term debt obligations of a domestic branch of a foreign depository institution or trust company shall exceed 30 days, the
short-term rating of such institution shall be A-1+;
(iv) commercial paper (having original maturities of not more than 365 days) of any corporation incorporated under the laws
of the United States or any state thereof which on the date of acquisition has been rated by each Rating Agency in its highest
short-term rating category available; provided, that such commercial paper shall have a remaining maturity of not more than 30 days;
(v) a money market fund or a qualified investment fund (including without limitation, any such fund for which the Indenture
Trustee or an Affiliate of the Indenture Trustee acts as an advisor or a manager) rated by each Rating Agency in one of its two
highest long-term rating categories available (if so rated by such Rating Agency); and
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(vi) other obligations or securities that are acceptable to each Rating Agency as a Permitted Investment hereunder and will
not cause a Rating Event, and which are acceptable to the Enhancer, as evidenced in writing;
provided, however, that no instrument shall be a Permitted Investment if it represents, either (1) the right to receive only interest
payments with respect to the underlying debt instrument or (2) the right to receive both principal and interest payments derived from
obligations underlying such instrument and the principal and interest payments with respect to such instrument provide a yield to
maturity greater than 120% of the yield to maturity at par of such underlying obligations. References herein to the highest
long-term debt rating category available shall mean AAA in the case of Standard & Poor's and Aaa in the case of Xxxxx'x, and
references herein to the highest short-term rating category available shall mean A-1 in the case of Standard & Poor's and P-1 in the
case of Xxxxx'x.
Permitted Transferee: Any Transferee of a Class R Certificate, other than a Disqualified Organization or Non-United States
Person.
Person: Any legal individual, corporation, partnership, joint venture, association, joint-stock company, limited liability
company, trust, unincorporated organization or government or any agency or political subdivision thereof.
Plan: Any employee benefit plan or certain other retirement plans and arrangements, including individual retirement
accounts and annuities, Xxxxx plans and bank collective investment funds and insurance company general or separate accounts in which
such plans, accounts or arrangements are invested, that are subject to ERISA or Section 4975 of the Code, as described in
Section 3.05 of the Trust Agreement.
Plan Assets: The meaning specified in Section 2510.3-101 of the Department of Labor Regulations and as described in
Section 3.05 of the Trust Agreement.
Policy: The Note Guaranty Insurance Policy No. 493870, dated as of the Closing Date, issued by the Enhancer.
Policy Draw Amount: With respect to any Payment Date, the Insured Amount.
Pool Balance: With respect to any date, the aggregate Principal Balance of all Mortgage Loans as of such date plus, during
the Pre-Funding Period, the Pre-Funded Amount.
Predecessor Note: With respect to any Note, every previous Note evidencing all or a portion of the same debt as that
evidenced by such Note; and, for the purpose of this definition, any Note authenticated and delivered under Section 4.03 of the
Indenture in lieu of a mutilated, lost, destroyed or stolen Note shall be deemed to evidence the same debt as such mutilated, lost,
destroyed or stolen Note.
Preference Amount: As defined in the Policy.
22
Pre-Funded Amount: With respect to any date of determination during the Pre-Funding Period, the amount on deposit in the
Pre-Funding Account.
Pre-Funding Account: The account established and maintained pursuant to Section 3.18 of the Servicing Agreement.
Pre-Funding Period: The period commencing on the Closing Date until the earliest of (i) the date on which the amount on
deposit in the Pre-Funding Account is less than $100,000, (ii) the Payment Date in June 2007 or (iii) the occurrence of a Servicing
Default.
Principal Balance: With respect to any Mortgage Loan, other than a Liquidated Mortgage Loan, and as of any day, the related
Cut-Off Date Principal Balance, minus all collections credited as principal in respect of any such Mortgage Loan in accordance with
the related Mortgage Note and applied in reduction of the Principal Balance thereof. For purposes of this definition, a Liquidated
Mortgage Loan shall be deemed to have a Principal Balance equal to the Principal Balance of the related Mortgage Loan immediately
prior to the final recovery of substantially all related Liquidation Proceeds and a Principal Balance of zero thereafter.
Principal Collections: With respect to any Payment Date, an amount equal to the sum of (i) the principal portion of all
scheduled Monthly Payments on the Mortgage Loans received during the related Collection Period, as reported by the Servicer or the
related Subservicer; (ii) the principal portion of all proceeds of the repurchase of any Mortgage Loans (or, in the case of a
substitution, any Substitution Adjustment Amounts) during the related Collection Period; (iii) the principal portion of all other
unscheduled collections received on the Mortgage Loans during the related Collection Period (or deemed to be received during the
related Collection Period), including, without limitation, full and partial Principal Prepayments made by the respective Mortgagors,
Insurance Proceeds, Net Liquidation Proceeds and Subsequent Net Recovery Amounts, to the extent not previously distributed; (iv) any
amounts deposited into the Note Payment Account in respect of principal in connection with the Servicer exercising its option to
terminate the Trust pursuant Section 8.08 of the Servicing Agreement; and (v) on the Payment Date immediately following the end of
the Pre-Funding Period, any amount transferred from the Pre Funding Account to the Note Payment Account in accordance with Section
3.18 of the Servicing Agreement.
Principal Distribution Amount: For any Payment Date, the total Principal Collections for such Payment Date less any
Overcollateralization Release Amount for such Payment Date; provided that the Principal Distribution Amount for any Payment Date
shall not be less than $0.
Proceeding: Any suit in equity, action at law or other judicial or administrative proceeding.
Program Guide: The GMACM Home Equity Servicing Guidelines, as in effect from time to time.
Purchase Agreement: The mortgage loan purchase agreement dated as of the Closing Date, among the Sellers, the Purchaser,
the Issuer and the Indenture Trustee.
Purchase Price: The amounts specified in Section 2.3(a) of the Purchase Agreement.
23
Purchaser: Residential Asset Mortgage Products, Inc., as purchaser under the Purchase Agreement.
Rating Agency: Each of Xxxxx'x and Standard & Poor's or, if any such organization or a successor thereto is no longer in
existence, such nationally recognized statistical rating organization, or other comparable Person, designated by the Depositor,
notice of which designation shall be given to the Indenture Trustee. References herein to the highest short term unsecured rating
category of a Rating Agency shall mean A-1 or better in the case of Standard & Poor's and P-1 or better in the case of Xxxxx'x; and
in the case of any other Rating Agency, shall mean such equivalent ratings. References herein to the highest long-term rating
category of a Rating Agency shall mean "AAA" in the case of Standard & Poor's and "Aaa" in the case of Xxxxx'x; and in the case of
any other Rating Agency, shall mean such equivalent rating.
Record Date: With respect to any Payment Date and the Class A-1 Notes, the close of business on the last Business Day
preceding such Payment Date. With respect to any Payment Date, other than the first Payment Date, and each Class of Notes, other
than the Class A-1 Notes, the last day of the calendar month preceding such Payment Date, and in the case of the first Payment Date,
the Closing Date.
Recovery Amount: Amounts collected on a Mortgage Loan after the Mortgage Loan becomes a Liquidated Mortgage Loan, net of
any Servicing Fee, Recovery Fee and any reimbursement for advances and expenses of the Servicer.
Recovery Fee: A customary fee calculated based on additional recovery amounts charged for the collection of such additional
recovery amounts on any Mortgage Loan after the date that such Mortgage Loan became a Liquidated Mortgage Loan.
Reference Bank Rate: With respect to any Interest Period, the arithmetic mean (rounded upwards, if necessary, to the
nearest one sixteenth of one percent) of the offered rates for United States dollar deposits for one month which are offered by the
Reference Banks as of 11:00 a.m., London, England time, on the second LIBOR Business Day prior to the first day of such Interest
Period to prime banks in the London interbank market in amounts approximately equal to the sum of the outstanding Note Balance of the
Class A-1 Notes; provided, that at least two Reference Banks provide such rate. If fewer than two such rates are provided, the
Reference Bank Rate will be the arithmetic mean of the rates quoted by one or more major banks in New York City, selected by the
Indenture Trustee after consultation with the Servicer and the Enhancer, as of 11:00 a.m., New York time, on such date for loans in
U.S. Dollars to leading European banks for a period of one month in amounts approximately equal to the aggregate Note Balance of the
Class A-1 Notes.
Reference Banks: Barclays Bank plc, National Westminster Bank and Deutsche Bank, A.G.
Regular Interest: Any of the REMIC I Regular Interests or REMIC II Regular Interests.
Related Class: A Class of REMIC II Regular Interests and a class of Notes are related if, and only if, they bear the same
Letter/number combination designating their Class, e.g. REMIC II Regular Interest A-2 is related to the Class A-2 Notes.
24
Regulation AB: Subpart 229.1100 - Asset Backed Securities (Regulation AB), 17 C.F.R. §§229.1100-229.1123, as such may be
amended from time to time, and subject to such clarification and interpretation as have been provided by the Commission in the
adopting release (Asset-Backed Securities, Securities Act Release No. 33-8518, 70 Fed. Reg. 1,506, 1,531 (January 7, 2005)) or by the
staff of the Commission, or as may be provided by the Commission or its staff from time to time.
Related Documents: With respect to each Mortgage Loan, the documents contained in the Mortgage File.
Relief Act Shortfalls: With respect to any Payment Date, for any Mortgage Loan as to which there has been a reduction in the
amount of interest collectible thereon for the related Collection Period as a result of the application of the Servicemembers Civil
Relief Act, formerly known as the Soldiers' and Sailors' Civil Relief Act of 1940, as amended, or any similar state legislation or
regulations, the shortfall, if any, equal to (i) one month's interest on the Principal Balance of such Mortgage Loan at the
applicable Loan Rate, over (ii) the interest collectible on such Mortgage Loan during such Collection Period.
REMIC: A "real estate mortgage investment conduit" within the meaning of Section 860D of the Code.
REMIC Administrator: The Bank of New York Trust Company, N.A.; provided that if the REMIC Administrator is found by a court
of competent jurisdiction to no longer be able to fulfill its obligations as REMIC Administrator under this Agreement the Servicer or
Indenture Trustee acting as Servicer shall appoint a successor REMIC Administrator, subject to assumption of the REMIC Administrator
obligations under this Agreement.
REMIC I: The segregated pool of assets in the Trust Estate with respect to which a REMIC election is to be made.
REMIC I Certificates: The Class R-I Certificates and the REMIC I Regular Interests.
REMIC I Liquidation Loss Amounts: For any Payment Date, Liquidation Loss Amounts on the Mortgage Loans for the related
Collection Period shall be allocated as follows: (i) the interest portion of Liquidation Loss Amounts, if any, shall be allocated
pro rata to accrued interest on the REMIC I Regular Interests to the extent of such accrued interest, and (ii) any remaining interest
portions of Liquidation Loss Amounts and any principal portions of Liquidation Loss Amounts shall be treated as principal portions of
Liquidation Loss Amounts and allocated (a) to REMIC I Regular Interest LT2, REMIC I Regular Interest LT3 and REMIC I Regular Interest
LT4, pro rata according to their respective REMIC I Principal Reduction Amounts, provided that such allocation to each of REMIC I
Regular Interest LT2, REMIC I Regular Interest LT3 and REMIC I Regular Interest LT4 shall not exceed their respective REMIC I
Principal Reduction Amounts for such Payment Date, and (b) any Liquidation Loss Amounts not allocated to any of REMIC I Regular
Interest LT2, REMIC I Regular Interest LT3, or REMIC I Regular Interest LT4 pursuant to the proviso of clause (a) above shall be
allocated to REMIC I Regular Interest LT1.
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REMIC I Principal Reduction Amounts: For any Payment Date, the amounts by which the Uncertificated Principal Balances of
the REMIC I Regular Interests will be reduced on such Payment Date by the allocation of REMIC I Liquidation Loss Amounts and the
distribution of principal, determined as follows:
For purposes of the succeeding formulas the following symbols shall have the meanings set forth below:
Y1 = the Uncertificated Principal Balance of REMIC I Regular Interest LT1 after distributions on the prior Payment Date.
Y2 = the Uncertificated Principal Balance of REMIC I Regular Interest LT2 after distributions on the prior Payment Date.
Y3 = the Uncertificated Principal Balance of REMIC I Regular Interest LT3 after distributions on the prior Payment Date.
Y4 = the Uncertificated Principal Balance of REMIC I Regular Interest LT4 after distributions on the prior Payment Date
(note: Y3 = Y4).
ΔY1 = the REMIC I Principal Reduction Amount for REMIC I Regular Interest LT1.
ΔY2 = the REMIC I Principal Reduction Amount for REMIC I Regular Interest LT2.
ΔY3 = the REMIC I Principal Reduction Amount for REMIC I Regular Interest LT3.
ΔY4 = the REMIC I Principal Reduction Amount for REMIC I Regular Interest LT4.
P0 = the aggregate Uncertificated Principal Balance of the REMIC I Regular Interests after distributions and the allocation
of REMIC I Liquidation Loss Amounts on the prior Payment Date.
P1 = the aggregate Uncertificated Principal Balance of the REMIC I Regular Interests after distributions and the allocation
of REMIC I Liquidation Loss Amounts to be made on such Payment Date.
ΔP = P0 - P1 = the aggregate of the REMIC I Principal Reduction Amounts.
=the aggregate of the principal portions of REMIC I Liquidation Loss Amounts to be allocated to, and the principal
distributions to be made on, the Notes and the Certificates on such Payment Date (including distributions of accrued and unpaid
interest on the Class SB Certificates for prior Payment Dates).
R0 = the Net WAC Rate (stated as a monthly rate) after giving effect to amounts distributed and Liquidation Loss Amounts
allocated on the prior Payment Date.
R1 = the Net WAC Rate (stated as a monthly rate) after giving effect to amounts to be distributed and Liquidation Loss
Amounts to be allocated on such Payment Date.
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α = (Y2 + Y3)/P0. The initial value of á on the Closing Date for use on the first Payment Date shall be 0.0001.
γ0 = the lesser of (A) the sum for all Classes of Notes, of the product for each Class of (i) the monthly interest rate (as
limited by the Net WAC Rate, if applicable) for such Class applicable for distributions to be made on such Payment Date and (ii) the
aggregate Note Balance for such Class after distributions and the allocation of Liquidation Loss Amounts on the prior Payment Date
and (B) R0*P0.
γ1 = the lesser of (A) the sum for all Classes Notes, of the product for each Class of (i) the monthly interest rate (as
limited by the Net WAC Rate, if applicable) for such Class applicable for distributions to be made on the next succeeding Payment
Date and (ii) the aggregate Note Balance for such Class after distributions and the allocation of Liquidation Loss Amounts to be made
on such Payment Date and (B) R1*P1.
Then, based on the foregoing definitions:
ΔY1 = ΔP - ΔY2 - ΔY3 - ΔY4;
ΔY2 = (α/2){( γ0R1 - γ1R0)/R0R1};
ΔY3 = αΔP - ΔY2; and
ΔY4 = ΔY3.
if both ΔY2 and ΔY3, as so determined, are non-negative numbers. Otherwise:
(1)If ΔY2, as so determined, is negative, then
ΔY2 = 0;
ΔY3 = α{γ1R0P0 - γ0R1P1}/{γ1R0};
ΔY4 = ΔY3; and
ΔY1 = ΔP - ΔY2 - ΔY3 - ΔY4.
(2)If ΔY3, as so determined, is negative, then
ΔY3 = 0;
ΔY2 = α{γ0R1P1 - γ1R0P0}/{2R1R0P1 - γ1R0};
ΔY4 = ΔY3; and
ΔY1 = ΔP - ΔY2 - ΔY3 - ΔY4.
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REMIC I Regular Interests: Each of the following separate non-certificated beneficial ownership interests in REMIC I having
the properties set forth in the following table and elsewhere herein:
______________________________________________________________________________________________________________________
Designation REMIC I Initial Uncertificated Latest
for each REMIC I Regular Remittance Principal Possible
Interest Rate Balance Maturity
______________________________________________________________________________________________________________________
LT1 Variable(1) $1,185,672,827.63 August 25, 2037
______________________________________________________________________________________________________________________
LT2 Variable(1) $38,832.39 August 25, 2037
______________________________________________________________________________________________________________________
LT3 Variable(1) $79,754.73 August 25, 2037
______________________________________________________________________________________________________________________
LT4 Variable(1) $79,754.73 August 25, 2037
______________________________________________________________________________________________________________________
(1) Calculated in accordance with the definition of "REMIC I Remittance Rate" herein.
REMIC I Remittance Rate: With respect to any Payment Date and (i) REMIC I Regular Interests LT1 and LT2, a per annum rate
equal to the weighted average of the Net Loan Rates of the Loans applicable for the Interest Period for such Payment Date, (ii)
REMIC I Regular Interest LT3, zero (0.00%), and (iii) REMIC I Regular Interest LT4, a per annum rate equal to twice the weighted
average of the Net Loan Rates of the Loans applicable for the Interest Period for such Payment Date.
REMIC II: The segregated pool of assets subject hereto, constituting a portion of the primary trust created hereby and to be
administered hereunder, with respect to which a separate REMIC election is to be made, consisting of the REMIC I Regular Interests.
REMIC II Liquidation Loss Amounts: On any Payment Date, Liquidation Loss Amounts for the related Collection Period shall be
allocated first to REMIC II Regular Interest SB-IO in reduction of the accrued and unpaid interest thereon until such accrued and
unpaid interest shall have been reduced to zero, second to REMIC II Regular Interest SB-PO in reduction of the
Uncertificated Principal Balance thereof until such Uncertificated Principal Balance shall have been reduced to zero and third to the
Notes to the same extent, if any, that (i) amounts interest accrued on such Notes since the prior Payment Date remain unpaid after
distributions on such Payment Date and (ii) the aggregate of the Class Principal Balances of the Notes following distributions on
such Payment Date exceed the aggregate principal balance of the Loans by more than such excess, if any, after distributions on the
immediately prior Payment Date.
REMIC II Regular Interest SB-IO: A regular interest in REMIC II with no entitlement to principal and entitled to (i)
interest at the Certificate Rate on its Notional Amount and (ii) payments of prepayment charges.
REMIC II Regular Interest SB-PO: A regular interest in REMIC II with no entitlement to interest and entitled to principal
in an amount equal to the Initial Certificate Balance and any amounts in the nature of prepayment charges received in connection with
Loans, provided that any payment of prepayment charges shall not be deemed to reduce the Uncertificated Principal Balance of REMIC II
Regular Interest SB-PO.
REMIC II Regular Interests: Each Class of the Notes and REMIC II Regular Interests SB-IO and SB-PO.
REMIC II Remittance Rate: With respect to each Class of Notes, the Note Rate for such Class. With respect to REMIC II
Regular Interest SB-PO, 0% per annum. With respect to REMIC II Regular Interest SB-IO the Certificate Rate therefor.
REMIC Provisions: Provisions of the federal income tax law relating to real estate mortgage investment conduits, which
appear at Sections 860A through 860G of Subchapter M of Chapter 1 of the Code, and related provisions, and temporary and final
regulations (or, to the extent not inconsistent with such temporary or final regulations, proposed regulations) and published
rulings, notices and announcements promulgated thereunder, as the foregoing may be in effect from time to time.
Remittance Rate: The REMIC I Remittance Rate or REMIC II Remittance Rate, as applicable.
Repurchase Event: With respect to any Mortgage Loan, either (i) a discovery that, as of the Closing Date with respect to an
Initial Mortgage Loan or the related Subsequent Transfer Date with respect to any Subsequent Mortgage Loan, the related Mortgage was
not a valid lien on the related Mortgaged Property subject only to (A) the lien of any prior mortgage indicated on the Mortgage Loan
Schedule, (B) the lien of real property taxes and assessments not yet due and payable, (C) covenants, conditions, and restrictions,
rights of way, easements and other matters of public record as of the date of recording of such Mortgage and such other permissible
title exceptions as are customarily accepted for similar loans and (D) other matters to which like properties are commonly subject
that do not materially adversely affect the value, use, enjoyment or marketability of the related Mortgaged Property or (ii) with
respect to any Mortgage Loan as to which either Seller delivers an affidavit certifying that the original Mortgage Note has been lost
or destroyed, a subsequent default on such Mortgage Loan if the enforcement thereof or of the related Mortgage is materially and
adversely affected by the absence of such original Mortgage Note.
Repurchase Price: With respect to any Mortgage Loan required to be repurchased on any date pursuant to the Purchase
Agreement or purchased by the Servicer pursuant to the Servicing Agreement, an amount equal to the sum of (i) 100% of the Principal
Balance thereof (without reduction for any amounts charged off), (ii) unpaid accrued interest at the Loan Rate (or with respect to
the last day of the month in the month of repurchase, the Loan Rate will be the Loan Rate in effect as of the second to last day in
such month) on the outstanding Principal Balance thereof from the Due Date to which interest was last paid by the related Mortgagor
to the first day of the month following the month of purchase and (iii) in connection with any Mortgage Loan required to be
repurchased pursuant to Sections 2.1 or 3.1 of the Purchase Agreement, any costs and damages incurred by the Trust with respect to
such Mortgage Loan in connection with a breach of Section 3.1(b)(x) of the Purchase Agreement.
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Required Insurance Policy: With respect to any Mortgage Loan, any insurance policy which is required to be maintained from
time to time under the Servicing Agreement or the related Subservicing Agreement in respect of such Mortgage Loan.
Responsible Officer: With respect to the Indenture Trustee, any officer of the Indenture Trustee with direct responsibility
for the administration of the Indenture and also, with respect to a particular matter, any other officer to whom such matter is
referred because of such officer's knowledge of and familiarity with the particular subject.
Reuters Screen LIBOR01 Page0: The display page so designated on the Reuters system (or such other page as may replace
Reuters Screen LIBOR01 Page on such service for the purpose of displaying London interbank offered rates of major banks, or, if such
service is no longer offered, such other service for displaying London interbank offered rates or comparable rates as may be selected
by the Indenture Trustee after consultation with the Servicer).
Rolling Six-Month Annualized Liquidation Loss Amounts: With respect to any Determination Date occurring after the fifth
Determination Date, the product (expressed as a percentage) of (i) the aggregate Liquidation Loss Amounts as of the end of each of
the six Collection Periods (reduced by the aggregate Subsequent Net Recovery Amounts for such Collection Periods) immediately
preceding such Determination Date divided by the Initial Pool Balance and (ii) two (2).
Rolling Three Month Delinquency Percentage: With respect to any Payment Date and the Mortgage Loans, the arithmetic average
of the Delinquency Percentages determined for such Payment Date and for each of the two preceding Payment Dates.
SB-IO Marker Rate: Two times the weighted average of the REMIC I Remittance Rates for REMIC I Regular Interests LT2 and
LT3, weighted by their respective Uncertificated Principal Balances.
Secretary of State: The Secretary of State of the State of Delaware.
Securities Act: The Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder.
Securitization Transaction: Any transaction involving a sale or other transfer of mortgage loans directly or indirectly to
an issuing entity in connection with an issuance of publicly offered or privately placed, rated or unrated mortgage-backed securities.
Securities Balance: The Note Balance or Certificate Balance, as the context may require.
Security: Any Certificate or a Note, as the context may require.
Securityholder: Any Noteholder or Certificateholder.
Seller or Sellers: GMAC Mortgage, LLC, a Delaware limited liability company, and its successors and assigns, and Walnut
Grove Mortgage Loan Trust 2003-A, a Delaware statutory trust, and its successors and assigns.
29
Servicer: GMAC Mortgage, LLC, a Delaware limited liability company, and its successors and assigns.
Servicer Advances: Any advances the Servicer may make with respect to the Mortgage Loans, whether or not required, in
respect of principal, interest, taxes, insurance or otherwise.
Servicing Agreement: The servicing agreement dated as of the Closing Date among the Servicer, the Issuer and the Indenture
Trustee.
Servicing Certificate: A certificate completed and executed by a Servicing Officer on behalf of the Servicer in accordance
with Section 4.01 of the Servicing Agreement.
Servicing Criteria: The "servicing criteria" set forth in Item 1122(d) of Regulation AB, as such may be amended from time
to time.
Servicing Default: Any one of the following events:
(i) any failure by the Servicer to deposit in the Custodial Account, , the Note Payment Account or the Distribution
Account any deposit required to be made under the terms of the Servicing Agreement that continues unremedied for a period of five
Business Days after the date upon which written notice of such failure shall have been given to the Servicer by the Issuer or the
Indenture Trustee, or to the Servicer, the Issuer and the Indenture Trustee by the Enhancer;
(ii) any failure on the part of the Servicer duly to observe or perform in any material respect any other covenants
or agreements of the Servicer set forth in the Securities or in the Servicing Agreement, which failure, in each case, materially and
adversely affects the interests of the Securityholders or the Enhancer, and which failure continues unremedied for a period of 45
days after the date on which written notice of such failure, requiring the same to be remedied, and stating that such notice is a
"Notice of Default" under the Servicing Agreement, shall have been given to the Servicer by the Issuer or the Indenture Trustee, or to
the Servicer, the Issuer and the Indenture Trustee by the Enhancer;
(iii) the entry against the Servicer of a decree or order by a court or agency or supervisory authority having
jurisdiction under Title 11 of the United States Code or any other applicable federal or state bankruptcy, insolvency or other
similar law, or if a receiver, assignee or trustee in bankruptcy or reorganization, liquidator, sequestrator or similar official
shall have been appointed for or taken possession of the Servicer or its property, and the continuance of any such decree or order
unstayed and in effect for a period of 60 consecutive days;
(iv) the Servicer shall voluntarily submit to Proceedings under Title 11 of the United States Code or any other
applicable federal or state bankruptcy, insolvency or other similar law relating to the Servicer or of or relating to all or
substantially all of its property; or the Servicer shall admit in writing its inability to pay its debts generally as they become
due, file a petition to take advantage of any applicable insolvency or reorganization statute, make an assignment for the benefit of
its creditors or voluntarily suspend payment of its obligations;
30
(v) the Servicer's Tangible Net Worth at any time is less than $100,000,000 and GMAC fails to own, directly or
indirectly, at least 51% of the common stock of the Servicer; or
(vi) the Rolling Six-Month Annualized Liquidation Loss Amount with respect to the Mortgage Loans exceeds 1.50%.
Servicing Fee: With respect to any Mortgage Loan and any Collection Period, the product of (i) the Servicing Fee Rate
divided by 12 and (ii) the related Principal Balance as of the first day of such Collection Period.
Servicing Fee Rate: 0.50% per annum.
Servicing Officer: Any officer of the Servicer involved in, or responsible for, the administration and servicing of the
Mortgage Loans whose name and specimen signature appear on a list of servicing officers furnished to the Indenture Trustee (with a
copy to the Enhancer) by the Servicer, as such list may be amended from time to time.
Servicing Termination Event: As of any Payment Date, the occurrence of any of the following scenarios:
(a) the Rolling Three Month Delinquency Percentage is greater than 3.75% for the then-current Payment Date; or
(b) on or after the Payment Date in October 2009, the aggregate amount of Liquidation Loss Amounts (reduced by the
aggregate Subsequent Net Recovery Amounts, if any, with respect to such Payment Date) on the Mortgage Loans as a percentage of the
Cut-Off Date Principal Balance exceeds the applicable amount set forth below:
October 2009 to March 2010: 1.50% with respect to October 2009, plus an additional
1/6th of 0.50% for each month thereafter;
April 2010 to March 2011: 2.00% with respect to April 2011, plus an additional
1/12th of 0.50% for each month thereafter;
April 2011 to March 2012: 2.50% with respect to April 2012, plus an additional
1/12th of 0.50% for each month thereafter;
April 2012 to March 2013: 3.00% with respect to April 2013, plus an additional
1/12th of 0.50% for each month thereafter; and
April 2013 and thereafter: 3.50%.
31
Servicing Trigger Event: As of any Payment Date, the occurrence of any of the following scenarios:
(a) the Rolling Three Month Delinquency Percentage is greater than 3.25% for the then-current Payment Date; or
(b) on or after the Payment Date in October 2009, the aggregate amount of Liquidation Loss Amounts (reduced by the
aggregate Subsequent Net Recovery Amounts, if any, with respect to such Payment Date) on the Mortgage Loans as a percentage of the
Cut-Off Date Principal Balance exceeds the applicable amount set forth below:
October 2009 to March 2010: 1.00% with respect to April 2010, plus an additional
1/6th of 0.50% for each month thereafter;
April 2010 to March 2011: 1.50% with respect to April 2011, plus an additional
1/12th of 0.50% for each month thereafter;
April 2011 to March 2012: 2.00% with respect to April 2012, plus an additional
1/12th of 0.50% for each month thereafter;
April 2012 to March 2013: 2.50% with respect to April 2013, plus an additional
1/12th of 0.50% for each month thereafter; and
April 2013 and thereafter: 3.00%.
Standard & Poor's: Standard & Poor's Ratings Services, a division of The XxXxxx-Xxxx Companies, Inc. or its successor in
interest.
Stated Value: With respect to any Mortgage Loan, the stated value of the related Mortgaged Property determined in
accordance with the Program Guide and given by the related Mortgagor in his or her application.
Statutory Trust Statute: Chapter 38 of Title 12 of the Delaware Code, 12 Del. Code §§3801 et seq., as the same may be
amended from time to time.
Stepdown Date: The later of (i) the Payment Date in October 2009 and (ii) the Payment Date on which the Pool Balance (after
applying payments received in the related Collection Period) as of such Payment Date is less than 50% of the Initial Pool Balance.
Subsequent Cut-Off Date: With respect to any Subsequent Mortgage Loan, the date specified in the related Subsequent
Transfer Agreement.
32
Subsequent Cut-Off Date Principal Balance: With respect to any Subsequent Mortgage Loan, the Principal Balance thereof as
of the close of business on the last day of the Collection Period immediately prior to the related Subsequent Cut-Off Date.
Subsequent Mortgage Loan: An mortgage loan sold by a Seller to the Issuer pursuant to Section 2.2 of the Purchase
Agreement, such Mortgage Loan being identified on the Mortgage Loan Schedule attached to the related Subsequent Transfer Agreement,
as set forth in such Subsequent Transfer Agreement.
Subsequent Net Recovery Amounts: Recovery Amounts collected on a Mortgage Loan after the Mortgage Loan becomes a Liquidated
Mortgage Loan, net of any Recovery Fee.
Subsequent Transfer Agreement: Each Subsequent Transfer Agreement dated as of a Subsequent Transfer Date executed by the
respective Seller and the Issuer substantially in the form of Exhibit 2 to the Purchase Agreement, by which the related Subsequent
Mortgage Loans are sold to the Issuer.
Subsequent Transfer Date: With respect to each Subsequent Transfer Agreement, the date on which the related Subsequent
Mortgage Loans are sold to the Issuer.
Subservicer: Each Person that enters into a Subservicing Agreement as a subservicer of Mortgage Loans.
Subservicing Agreement: The written contract between the Servicer and any Subservicer relating to servicing and
administration of certain Mortgage Loans as provided in Section 3.01(b) of the Servicing Agreement.
Substitution Adjustment Amount: With respect to any Eligible Substitute Loan and any Deleted Loan, the amount, if any, as
determined by the Servicer, by which the aggregate principal balance of all such Eligible Substitute Loans as of the date of
substitution is less than the aggregate Principal Balance of all such Deleted Loans (after application of the principal portion of
the Monthly Payments due in the month of substitution that are to be distributed to the Securityholders in the month of substitution).
Tangible Net Worth: Net Worth, less the sum of the following (without duplication): (a) any other assets of GMACM and its
consolidated subsidiaries that would be treated as intangibles under GAAP including, without limitation, any write-up of assets
(other than adjustments to market value to the extent required under GAAP with respect to excess servicing, residual interests in
offerings of asset-backed securities and asset-backed securities that are interest-only securities), good-will, research and
development costs, trade-marks, trade names, copyrights, patents and unamortized debt discount and expenses and (b) loans or other
extensions of credit to officers of GMACM or its consolidated subsidiaries other than mortgage loans made to such Persons in the
ordinary course of business.
Tax Matters Partner: GMACM, as the Servicer, for so long as the Servicer holds all or any portion of the Class R
Certificates; if any other Person holds 100% of the Certificates, such Person; and otherwise as provided in the Code.
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Tax Returns: The federal income tax return on Internal Revenue Service Form 1066, U.S. Real Estate Mortgage Investment
Conduit Income Tax Return, including Schedule Q thereto, Quarterly Notice to Residual Interest Holders of REMIC Taxable Income or Net
Loss Allocation, or any successor forms, to be filed on behalf of each REMIC due to their classification as a REMIC under the REMIC
Provisions, together with any and all other information, reports or returns that may be required to be furnished to the
Certificateholders or filed with the Internal Revenue Service or any other governmental taxing authority under any applicable
provisions of federal, state or local tax laws.
Transfer: Any direct or indirect transfer, sale, pledge, hypothecation or other form of assignment of any Ownership
Interest in a Certificate.
Transfer Date: The Payment Date on which the Servicer, upon receipt of written notice and direction from the Issuer, shall
cause the retransfer of Mortgage Loans from the Trust Estate to the Issuer, pursuant to Section 3.15(c) of the Servicing Agreement.
Transfer Notice Date: The fifth Business Day prior to the Transfer Date for which the Servicer shall give the Indenture
Trustee, the Rating Agencies and the Enhancer a notice of the proposed retransfer of Mortgage Loans, pursuant to Section 3.15(c) of
the Servicing Agreement.
Transferee: Any Person who is acquiring by Transfer any Ownership Interest in a Certificate.
Transferor: Any Person who is disposing by Transfer of any Ownership Interest in a Certificate.
Treasury Regulations: Regulations, including proposed or temporary Regulations, promulgated under the Code. References
herein to specific provisions of proposed or temporary regulations shall include analogous provisions of final Treasury Regulations
or other successor Treasury Regulations.
Trust Agreement: The trust agreement dated as of the Closing Date, between the Owner Trustee and the Depositor.
Trust Estate: The meaning specified in the Granting Clause of the Indenture.
Trust Indenture Act or TIA: The Trust Indenture Act of 1939, as amended from time to time, as in effect on any relevant
date.
UCC: The Uniform Commercial Code, as in effect from time to time, as in effect in any specified jurisdiction.
Unpaid Principal Amount: As defined in Section 3.05(a) of the Indenture.
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Uncertificated Accrued Interest: With respect to any REMIC I Regular Interest for any Payment Date, one month's interest at
the related REMIC I Remittance Rate for such Payment Date, accrued on the Uncertificated Principal Balance immediately prior to such
Payment Date. Uncertificated Accrued Interest for the REMIC I and REMIC II Regular Interests shall accrue on the basis of a 360-day
year consisting of twelve 30-day months. For purposes of calculating the amount of Uncertificated Accrued Interest for the REMIC I
Regular Interests for any Payment Date, any Prepayment Interest Shortfalls or Relief Act Shortfalls for such Payment Date shall be
allocated among the REMIC I Regular Interests pro rata based on, and to the extent of, the Uncertificated Accrued Interest thereon,
as calculated without the application of this sentence. With respect to any Payment Date and REMIC II Regular Interest SB-IO, one
month's interest at the related Certificate Rate on the Notional Amount thereof reduced by its pro-rata share of any Prepayment
Interest Shortfalls or Relief Act Shortfalls, but not reduced by amounts distributable pursuant to clauses (iv), (v) or (vi) of
Section 3.05(a)(I) of the Indenture.
Uncertificated Principal Balance: With respect to any Payment Date and any REMIC I Regular Interest, the initial
Uncertificated Principal Balance thereof as reduced on each successive Payment Date first by Liquidation Loss Amounts allocated to
the principal thereof by the definition of REMIC I Liquidation Loss Amounts and second by principal deemed distributed in respect
thereof on such Payment Date pursuant to Section 5.01(e) of the Trust Agreement. With respect to any Payment Date and REMIC II
Regular Interest SB-PO, the Initial Certificate Balance reduced by the allocation to the principal thereof on prior Payment Dates of
Liquidation Loss Amounts, to the extent such Liquidation Loss Amounts are allocated to the principal of the Class SB Certificates,
and amounts deemed distributed with respect to such REMIC II Regular Interest.
Uncertificated Regular Interests: The REMIC I Regular Interests, REMIC II Regular Interest SB-IO and REMIC II Regular
Interest SB-PO.
WG Trust 2003: Walnut Grove Mortgage Loan Trust 2003-A, a Delaware statutory trust.
Yield Maintenance Agreement: The confirmation, dated as of the Closing Date, between the Indenture Trustee, on behalf of
the Trust, and the YMA Provider, relating to the Class A-1 Notes and Class SB Certificates or any replacement, substitute, collateral
or other arrangement in lieu thereof.
Yield Maintenance Payment: For any Payment Date, the payment, if any, due under the Yield Maintenance Agreement in respect
of such Payment Date.
Yield Maintenance Shortfall Amount: For any Payment Date, the amount, if any, by which the payment on the Class A-1 Notes
pursuant to Section 3.05(e) of the Indenture is paid from the Yield Maintenance Payments for such Payment Date pursuant to the
provisions thereof or would have been so paid but for the failure of the YMA Provider to make a payment required under the Yield
Maintenance Agreement.
YMA Provider: JPMorgan Chase Bank, National Association, and its successors and assigns or any party to any replacement,
substitute, collateral or other arrangement in lieu thereof.
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