EXECUTION COPY
GMACM HOME EQUITY LOAN TRUST 2006-HE3,
Issuer,
and
JPMORGAN CHASE BANK, NATIONAL ASSOCIATION,
Indenture Trustee
________________________
INDENTURE
________________________
Dated as of August 30, 2006
GMACM HOME EQUITY LOAN-BACKED TERM NOTES
RECONCILIATION AND TIE BETWEEN TRUST INDENTURE
ACT OF 1939 AND INDENTURE PROVISIONS*
Trust Indenture
Act Section Indenture Section
310(a)(1)..............................................................6.11
(a)(2).................................................................6.11
(a)(3).................................................................6.10
(a)(4).......................................................Not Applicable
(a)(5).................................................................6.11
(b)..............................................................6.08, 6.11
(c)..........................................................Not Applicable
311(a).................................................................6.12
(b)....................................................................6.12
(c)..........................................................Not Applicable
312(a)........................................................7.01, 7.02(a)
(b).................................................................7.02(b)
(c).................................................................7.02(c)
313(a).................................................................7.04
(b)....................................................................7.04
(c)......................................................7.03(a)(iii), 7.04
(d)....................................................................7.04
314(a)........................................................3.10, 7.03(a)
(b)....................................................................3.07
(c)(1)....................................................8.05(c), 10.01(a)
(c)(2)....................................................8.05(c), 10.01(a)
(c)(3)......................................................Not Applicable
(d)(1)....................................................8.05(c), 10.01(b)
(d)(2)....................................................8.05(c), 10.01(b)
(d)(3)....................................................8.05(c), 10.01(b)
(e)................................................................10.01(a)
315(a)..............................................................6.01(b)
(b)....................................................................6.05
(c).................................................................6.01(a)
(d).................................................................6.01(c)
(d)(1)..............................................................6.01(c)
(d)(2)..............................................................6.01(c)
(d)(3)..............................................................6.01(c)
(e)....................................................................5.13
316(a)(1)(A)...........................................................5.11
316(a)(1)(B)...........................................................5.12
316(a)(2)....................................................Not Applicable
316(b).................................................................5.07
317(a)(1)..............................................................5.04
317(a)(2)...........................................................5.03(d)
317(b)..............................................................3.03(a)
318(a)................................................................10.07
*This reconciliation and tie shall not, for any purpose, be deemed to be part of the
within indenture.
TABLE OF CONTENTS
PAGE
ARTICLE I Definitions...............................................................2
Section 1.01 Definitions.......................................................2
Section 1.02 Incorporation by Reference of Trust Indenture Act.................2
Section 1.03 Rules of Construction.............................................2
ARTICLE II Original Issuance of Notes................................................3
Section 2.01 Form..............................................................3
Section 2.02 Execution, Authentication and Delivery............................3
ARTICLE III Covenants.................................................................4
Section 3.01 Collection of Payments with Respect to the Mortgage
Loans.............................................................4
Section 3.02 Maintenance of Office or Agency...................................4
Section 3.03 Money for Payments to Be Held in Trust; Paying Agent..............4
Section 3.04 Existence.........................................................6
Section 3.05 Priority of Distributions; Defaulted Interest.....................6
Section 3.06 Protection of Trust Estate........................................9
Section 3.07 Opinions as to Trust Estate.......................................9
Section 3.08 Performance of Obligations; Servicing Agreement..................10
Section 3.09 Negative Covenants...............................................10
Section 3.10 Annual Statement as to Compliance................................11
Section 3.11 Recordation of Assignments.......................................11
Section 3.12 Representations and Warranties Concerning the
Mortgage Loans...................................................11
Section 3.13 Assignee of Record of the Mortgage Loans.........................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......................................12
Section 3.17 Successor or Transferee..........................................14
Section 3.18 No Other Business................................................14
Section 3.19 No Borrowing.....................................................14
Section 3.20 Guarantees, Loans, Advances and Other Liabilities................14
Section 3.21 Capital Expenditures.............................................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......................................15
Section 3.25 Further Instruments and Acts.....................................15
Section 3.26 Statements to Noteholders........................................15
Section 3.27 Determination of Note Rate.......................................16
Section 3.28 Payments under the Policy........................................16
Section 3.29 Replacement/Additional Enhancement...............................16
Section 3.30 Additional Representations of Issuer.............................17
Section 3.31 Hedge Agreement..................................................18
ARTICLE IV The Notes; Satisfaction And Discharge Of Indenture.......................18
Section 4.01 The Notes........................................................18
Section 4.02 Registration of and Limitations on Transfer and
Exchange of Notes; Appointment of Certificate
Registrar........................................................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.................................................21
Section 4.07 Notices to Depository............................................22
Section 4.08 Definitive Notes.................................................22
Section 4.09 Tax Treatment....................................................22
Section 4.10 Satisfaction and Discharge of Indenture..........................23
Section 4.11 Application of Trust Money.......................................24
Section 4.12 Subrogation and Cooperation......................................24
Section 4.13 Repayment of Monies Held by Paying Agent.........................25
Section 4.14 Temporary Notes..................................................25
ARTICLE V Default And Remedies.....................................................25
Section 5.01 Events of Default................................................25
Section 5.02 Acceleration of Maturity; Rescission and Annulment...............26
Section 5.03 Collection of Indebtedness and Suits for Enforcement
by Indenture Trustee.............................................26
Section 5.04 Remedies; Priorities.............................................28
Section 5.05 Optional Preservation of the Trust Estate........................30
Section 5.06 Limitation of Suits..............................................30
Section 5.07 Unconditional Rights of Noteholders to Receive
Principal and Interest...........................................31
Section 5.08 Restoration of Rights and Remedies...............................31
Section 5.09 Rights and Remedies Cumulative...................................32
Section 5.10 Delay or Omission Not a Waiver...................................32
Section 5.11 Control by Enhancer or Noteholders...............................32
Section 5.12 Waiver of Past Defaults..........................................33
Section 5.13 Undertaking for Costs............................................33
Section 5.14 Waiver of Stay or Extension Laws.................................33
Section 5.15 Sale of Trust Estate.............................................33
Section 5.16 Action on Notes..................................................35
Section 5.17 Performance and Enforcement of Certain Obligations...............35
ARTICLE VI The Indenture Trustee....................................................36
Section 6.01 Duties of Indenture Trustee......................................36
Section 6.02 Rights of Indenture Trustee......................................38
Section 6.03 Individual Rights of Indenture Trustee...........................39
Section 6.04 Indenture Trustee's Disclaimer...................................39
Section 6.05 Notice of Event of Default.......................................39
Section 6.06 Reports by Indenture Trustee to Noteholders......................39
Section 6.07 Compensation and Indemnity.......................................40
Section 6.08 Replacement of Indenture Trustee.................................40
Section 6.09 Successor Indenture Trustee by Xxxxxx............................41
Section 6.10 Appointment of Co-Indenture Trustee or Separate
Indenture Trustee................................................42
Section 6.11 Eligibility; Disqualification....................................43
Section 6.12 Preferential Collection of Claims Against Issuer.................43
Section 6.13 Representations and Warranties...................................43
Section 6.14 Directions to Indenture Trustee..................................44
Section 6.15 Indenture Trustee May Own Securities.............................44
ARTICLE VII Noteholders' Lists and Reports...........................................44
Section 7.01 Issuer to Furnish Indenture Trustee Names and
Addresses of Noteholders.........................................44
Section 7.02 Preservation of Information; Communications to
Noteholders......................................................44
Section 7.03 Reports by Issuer................................................45
Section 7.04 Reports by Indenture Trustee.....................................45
Section 7.05 Exchange Act Reporting...........................................45
ARTICLE VIII Accounts, Disbursements and Releases.....................................46
Section 8.01 Collection of Money..............................................46
Section 8.02 Trust Accounts...................................................46
Section 8.03 Officer's Certificate............................................47
Section 8.04 Termination Upon Distribution to Noteholders.....................47
Section 8.05 Release of Trust Estate..........................................47
Section 8.06 Surrender of Notes Upon Final Payment............................48
ARTICLE IX Supplemental Indentures..................................................48
Section 9.01 Supplemental Indentures Without Consent of Noteholders...........48
Section 9.02 Supplemental Indentures With Consent of Noteholders..............49
Section 9.03 Execution of Supplemental Indentures.............................51
Section 9.04 Effect of Supplemental Indenture.................................51
Section 9.05 Conformity with Trust Indenture Act..............................51
Section 9.06 Reference in Notes to Supplemental Indentures....................51
ARTICLE X Miscellaneous............................................................51
Section 10.01 Compliance Certificates and Opinions, etc........................51
Section 10.02 Form of Documents Delivered to Indenture Trustee.................53
Section 10.03 Acts of Noteholders..............................................54
Section 10.04 Notices, etc., to Indenture Trustee, Issuer, Enhancer
and Rating Agencies..............................................55
Section 10.05 Notices to Noteholders; Waiver...................................55
Section 10.06 Alternate Payment and Notice Provisions..........................56
Section 10.07 Conflict with Trust Indenture Act................................56
Section 10.08 Effect of Headings...............................................56
Section 10.09 Successors and Assigns...........................................56
Section 10.10 Severability.....................................................56
Section 10.11 Benefits of Indenture............................................57
Section 10.12 Legal Holidays...................................................57
Section 10.13 GOVERNING LAW....................................................57
Section 10.14 Counterparts.....................................................57
Section 10.15 Recording of Indenture...........................................57
Section 10.16 Issuer Obligation................................................57
Section 10.17 No Petition......................................................58
Section 10.18 Inspection.......................................................58
ARTICLE XI REMIC Provisions.........................................................58
Section 11.01 REMIC Administration.............................................58
Section 11.02 Servicer, REMIC Administrator and Indenture Trustee
Indemnification..................................................62
Section 11.03 Designation of REMIC(s)..........................................62
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
This Indenture, dated as of August 30, 2006, is between GMACM Home Equity Loan
Trust 2006-HE3, a Delaware statutory trust, as issuer (the "Issuer"), and JPMorgan
Chase Bank, National Association, as indenture trustee (the "Indenture Trustee").
WITNESSETH:
Each party hereto agrees as follows for the benefit of the other party and for
the equal and ratable benefit of the Noteholders and the Enhancer of the Issuer's
Series 2006-HE3 GMACM Home Equity Loan-Backed Term Notes (the "Notes").
GRANTING CLAUSE:
The Issuer hereby Grants to the Indenture Trustee on the Closing Date, as
trustee for the benefit of the Noteholders 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) all hazard insurance policies; (d) the Hedge 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.
ARTICLE I
Definitions
Section 1.01...Definitions. For all purposes of this Indenture, except as otherwise
expressly provided herein or unless the context otherwise requires, capitalized terms
not otherwise defined herein shall have the meanings assigned to such terms in the
Definitions attached hereto as Appendix A, which is incorporated by reference
herein. All other capitalized terms used herein shall have the meanings specified
herein.
Section 1.02...Incorporation by Reference of Trust Indenture Act. Whenever this
Indenture refers to a provision of the Trust Indenture Act (the "TIA"), such
provision is incorporated by reference in and made a part of this Indenture. The
following TIA terms used in this Indenture have the following meanings:
"Commission" means the Securities and Exchange Commission.
"indenture securities" means the Notes.
"indenture security holder" means a Noteholder.
"indenture to be qualified" means this Indenture.
"indenture trustee" or "institutional trustee" means the Indenture
Trustee.
"obligor" on the indenture securities means the Issuer and any other
obligor on the indenture securities.
All other TIA terms used in this Indenture that are defined by XXX,
defined by TIA reference to another statute or defined by Commission rule have the
meaning assigned to them by such definitions.
Section 1.03...Rules of Construction. Unless the context otherwise requires:
(a) a term has the meaning assigned to it;
(b) an accounting term not otherwise defined has the meaning assigned to it in
accordance with generally accepted accounting principles as in effect from time to
time;
(c) "or" includes "and/or";
(d) "including" means "including without limitation";
(e) words in the singular include the plural and words in the plural include the
singular;
(f) the term "proceeds" has the meaning ascribed thereto in the UCC; and
(g) any agreement, instrument or statute defined or referred to herein or in any
instrument or certificate delivered in connection herewith means such agreement,
instrument or statute as from time to time amended, modified or supplemented and
includes (in the case of agreements or instruments) references to all attachments
thereto and instruments incorporated therein; references to a Person are also to its
permitted successors and assigns.
ARTICLE II
Original Issuance of Notes
Section 2.01...Form. The Notes, together with the Indenture Trustee's certificate of
authentication, shall be in substantially the form set forth in Exhibit A, with such
appropriate insertions, omissions, substitutions and other variations as are required
or permitted by this Indenture and may have such letters, numbers or other marks of
identification and such legends or endorsements placed thereon as may, consistently
herewith, be determined by the officers executing the Notes, as evidenced by their
execution thereof. Any portion of the text of any Note may be set forth on the
reverse thereof, with an appropriate reference thereto on the face of such Note.
The Notes shall be typewritten, printed, lithographed or engraved or produced
by any combination of these methods, all as determined by the Authorized Officers
executing such Notes, as evidenced by their execution of such Notes.
The terms of the Notes set forth in Exhibit A are part of the terms of this
Indenture.
Section 2.02...Execution, Authentication and Delivery. The Notes shall be executed on
behalf of the Issuer by any of its Authorized Officers. The signature of any such
Authorized Officer on the Notes may be manual or facsimile.
Notes bearing the manual or facsimile signature of individuals who were at any
time Authorized Officers of the Issuer shall bind the Issuer, notwithstanding that
such individuals or any of them have ceased to hold such offices prior to the
authentication and delivery of such Notes or did not hold such offices at the date of
such Notes.
The Indenture Trustee shall upon Issuer Request authenticate and deliver Notes
for original issue in an amount equal to the Initial 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 or notional 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.
ARTICLE III
Covenants
Section 3.01...Collection of Payments with Respect to the Mortgage Loans. The
Indenture Trustee shall establish and maintain with itself the Note Payment Account
in which the Indenture Trustee shall, subject to the terms of this paragraph,
deposit, on the same day as it is received from the Servicer, each remittance
received by the Indenture Trustee with respect to the Mortgage Loans. The Indenture
Trustee shall make all payments of principal of and interest on the Notes, subject to
Section 3.03 as provided in Section 3.05 herein from monies on deposit in the Note
Payment Account.
Section 3.02...Maintenance of Office or Agency. The Issuer will maintain in the City
of New York, New York, an office or agency where, subject to satisfaction of
conditions set forth herein, Notes may be surrendered for registration of transfer or
exchange, and where notices and demands to or upon the Issuer in respect of the Notes
and this Indenture may be served. The Issuer hereby initially appoints the Indenture
Trustee to serve as its agent for the foregoing purposes. If at any time the Issuer
shall fail to maintain any such office or agency or shall fail to furnish the
Indenture Trustee with the address thereof, such surrenders, notices and demands may
be made or served at the Corporate Trust Office, and the Issuer hereby appoints the
Indenture Trustee as its agent to receive all such surrenders, notices and demands.
Section 3.03...Money for Payments to Be Held in Trust; Paying Agent. As provided in
Section 3.01, all payments of amounts due and payable with respect to any Notes that
are to be made from amounts withdrawn from the Note Payment Account pursuant to
Section 3.01 shall be made on behalf of the Issuer by the Indenture Trustee or by the
Paying Agent, and no amounts so withdrawn from the Note Payment Account for payments
of Notes shall be paid over to the Issuer except as provided in this Section 3.03.
The Issuer hereby appoints the Indenture Trustee to act as initial Paying Agent
hereunder. The Issuer will cause each Paying Agent other than the Indenture Trustee
to execute and deliver to the Indenture Trustee an instrument in which such Paying
Agent shall agree with the Indenture Trustee (and if the Indenture Trustee acts as
Paying Agent, it hereby so agrees), subject to the provisions of this Section 3.03,
that such Paying Agent will:
(a) hold all sums held by it for the payment of amounts due with respect to the
Notes in trust for the benefit of the Persons entitled thereto until such sums shall
be paid to such Persons or otherwise disposed of as herein provided and pay such sums
to such Persons as herein provided;
(b) give the Indenture Trustee and the Enhancer written notice of any default by
the Issuer of which it has actual knowledge in the making of any payment required to
be made with respect to the Notes;
(c) at any time during the continuance of any such default, upon the written
request of the Indenture Trustee, forthwith pay to the Indenture Trustee all sums so
held in trust by such Paying Agent;
(d) immediately resign as Paying Agent and forthwith pay to the Indenture Trustee
all sums held by it in trust for the payment of Notes, if at any time it ceases to
meet the standards required to be met by a Paying Agent at the time of its
appointment;
(e) comply with all requirements of the Code with respect to the withholding from
any payments made by it on any Notes of any applicable withholding taxes imposed
thereon and with respect to any applicable reporting requirements in connection
therewith (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).
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;
(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 (vi) above;
(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 Hedge 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).
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.
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 Hedge Payment
first as a payment to the Holders of the Class A-1 Notes in an amount not to exceed
the Interest Carryforward 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.
The Issuer hereby designates the Indenture Trustee its agent and
attorney-in-fact to execute any financing statement, continuation statement or other
instrument required to be executed pursuant to this Section 3.06.
Section 3.07 Opinions as to Trust Estate.
On the Closing Date, the Issuer shall furnish to the Indenture Trustee and the
Owner Trustee an Opinion of Counsel at the expense of the Issuer stating that, upon
delivery of the Mortgage Notes relating to the Initial Mortgage Loans to the
Indenture Trustee or the Custodian in the State of Pennsylvania, the Indenture
Trustee will have a perfected, first priority security interest in such Mortgage
Loans.
On or before December 31st in each calendar year, beginning in 2006, the
Issuer shall furnish to the Indenture Trustee an Opinion of Counsel at the expense of
the Issuer either stating that, in the opinion of such counsel, no further action is
necessary to maintain a perfected, first priority security interest in the Mortgage
Loans until December 31 in the following calendar year or, if any such action is
required to maintain such security interest in the Mortgage Loans, such Opinion of
Counsel shall also describe the recording, filing, re-recording and refiling of this
Indenture, any indentures supplemental hereto and any other requisite documents and
the execution and filing of any financing statements and continuation statements that
will, in the opinion of such counsel, be required to maintain the security interest
in the Mortgage Loans until December 31 in the following calendar year.
Section 3.08 Performance of Obligations; Servicing Agreement.
(a) The Issuer shall punctually perform and observe all of its obligations and
agreements contained in this Indenture, the Basic Documents and in the instruments
and agreements included in the Trust Estate.
(b) The Issuer may contract with other Persons to assist it in performing its
duties under this Indenture, and any performance of such duties by a Person
identified to the Indenture Trustee in an Officer's Certificate of the Issuer shall
be deemed to be action taken by the Issuer.
(c) The Issuer shall not take any action or permit any action to be taken by
others that would release any Person from any of such Person's covenants or
obligations under any of the documents relating to the Mortgage Loans or under any
instrument included in the Trust Estate, or that would result in the amendment,
hypothecation, subordination, termination or discharge of, or impair the validity or
effectiveness of, any of the documents relating to the Mortgage Loans or any such
instrument, except such actions as the Servicer is expressly permitted to take in the
Servicing Agreement.
(d) The Issuer may retain an administrator and may enter into contracts with other
Persons for the performance of the Issuer's obligations hereunder, and performance of
such obligations by such Persons shall be deemed to be performance of such
obligations by the Issuer.
Section 3.09 Negative Covenants. So long as any Notes are Outstanding, the Issuer
shall not:
(a) except as expressly permitted by this Indenture, sell, transfer, exchange or
otherwise dispose of the Trust Estate, unless directed to do so in writing by the
Indenture Trustee pursuant to Section 5.04 hereof;
(b) claim any credit on, or make any deduction from the principal or interest
payable in respect of, the Notes (other than amounts properly withheld from such
payments under the Code) or assert any claim against any present or former Noteholder
by reason of the payment of the taxes levied or assessed upon any part of the Trust
Estate;
(c) (i) permit the validity or effectiveness of this Indenture to be impaired, or
permit the lien of this Indenture to be amended, hypothecated, subordinated,
terminated or discharged, or permit any Person to be released from any covenants or
obligations with respect to the Notes under this Indenture except as may be expressly
permitted hereby, (ii) permit any lien, charge, excise, claim, security interest,
mortgage or other encumbrance (other than the lien of this Indenture) to be created
on or extend to or otherwise arise upon or burden the Trust Estate or any part
thereof or any interest therein or the proceeds thereof or (iii) permit the lien of
this Indenture not to constitute a valid first priority security interest in the
Trust Estate; or
(d) impair or cause to be impaired the Issuer's interest in the Mortgage Loans,
the Purchase Agreement or in any other Basic Document, if any such action would
materially and adversely affect the interests of the Noteholders or the Enhancer.
Section 3.10 Annual Statement as to Compliance. The Issuer shall deliver to the
Indenture Trustee, within 120 days after the end of each fiscal year of the Issuer
(commencing with the fiscal year ending on December 31, 2006), an Officer's
Certificate stating, as to the Authorized Officer signing such Officer's Certificate,
that:
(a) a review of the activities of the Issuer during such year and of its
performance under this Indenture and the Trust Agreement has been made under such
Authorized Officer's supervision; and
(b) to the best of such Authorized Officer's knowledge, based on such review, the
Issuer has complied with all conditions and covenants under this Indenture and the
provisions of the Trust Agreement throughout such year, or, if there has been a
default in its compliance with any such condition or covenant, specifying each such
default known to such Authorized Officer and the nature and status thereof.
Section 3.11 Recordation of Assignments. The Issuer shall enforce the obligation,
if any, of the Sellers under the Purchase Agreement to submit or cause to be
submitted for recordation all Assignments of Mortgages within 60 days of receipt of
recording information by the Servicer.
Section 3.12 Representations and Warranties Concerning the Mortgage Loans. The
Indenture Trustee, as pledgee of the Mortgage Loans, shall have the benefit of
(i) the representations and warranties made by GMACM in Section 3.1(a) and
Section 3.1(b) of the Purchase Agreement, (ii) the benefit of the representations and
warranties made by WG Trust 2003 in Section 3.1(d) of the Purchase Agreement and
(iii) the benefit of the representations and warranties made by GMACM or WG Trust
2003, as applicable, in Section 2 of any Subsequent Transfer Agreement, in each case,
concerning the Mortgage Loans and the right to enforce the remedies against GMACM or
WG Trust 2003 provided in Section 3.1(e) of the Purchase Agreement, as applicable, to
the same extent as though such representations and warranties were made directly to
the Indenture Trustee.
Section 3.13 Assignee of Record of the Mortgage Loans. As pledgee of the Mortgage
Loans, the Indenture Trustee shall hold title to the Mortgage Loans by being named as
payee in the endorsements or assignments of the Mortgage Notes and assignee in the
Assignments of Mortgage to be delivered under Section 2.1 of the Purchase Agreement.
Except as expressly provided in the Purchase Agreement or in the Servicing Agreement
with respect to any specific Mortgage Loan, the Indenture Trustee shall not execute
any endorsement or assignment or otherwise release or transfer such title to any of
the Mortgage Loans until such time as the remaining Trust Estate may be released
pursuant to Section 8.05(b). The Indenture Trustee's holding of such title shall in
all respects be subject to its fiduciary obligations to the Noteholders hereunder.
Section 3.14 Servicer as Agent and Bailee of the Indenture Trustee. Solely for
purposes of perfection under Section 9-313 or 9-314 of the UCC or other similar
applicable law, rule or regulation of the state in which such property is held by the
Servicer, the Issuer and the Indenture Trustee hereby acknowledge that the Servicer
is acting as agent and bailee of the Indenture Trustee in holding amounts on deposit
in the Custodial Account pursuant to Section 3.02 of the Servicing Agreement that are
allocable to the Mortgage Loans, as well as the agent and bailee of the Indenture
Trustee in holding any Related Documents released to the Servicer pursuant to Section
3.06(c) of the Servicing Agreement, and any other items constituting a part of the
Trust Estate which from time to time come into the possession of the Servicer. It is
intended that, by the Servicer's acceptance of such agency pursuant to Section 3.02
of the Servicing Agreement, the Indenture Trustee, as a pledgee of the Mortgage
Loans, will be deemed to have possession of such Related Documents, such monies and
such other items for purposes of Section 9-313 or 9-314 of the UCC of the state in
which such property is held by the Servicer.
Section 3.15 Investment Company Act. The Issuer shall not become an "investment
company" or under the "control" of an "investment company" as such terms are defined
in the Investment Company Act of 1940, as amended (or any successor or amendatory
statute), and the rules and regulations thereunder (taking into account not only the
general definition of the term "investment company" but also any available exceptions
to such general definition); provided, however, that the Issuer shall be in
compliance with this Section 3.15 if it shall have obtained an order exempting it
from regulation as an "investment company" so long as it is in compliance with the
conditions imposed in such order.
Section 3.16 Issuer May Consolidate, etc.
(a) The Issuer shall not consolidate or merge with or into any other Person,
unless:
(i) the Person (if other than the Issuer) formed by or surviving such
consolidation or merger shall be a Person organized and existing under the
laws of the United States of America or any state or the District of Columbia
and shall expressly assume, by an indenture supplemental hereto, executed and
delivered to the Indenture Trustee, in form reasonably satisfactory to the
Indenture Trustee, the due and punctual payment of the principal of and
interest on all Notes and to the Certificate Paying Agent, on behalf of the
Certificateholders and the performance or observance of every agreement and
covenant of this Indenture on the part of the Issuer to be performed or
observed, all as provided herein;
(ii) immediately after giving effect to such transaction, no Event of Default shall
have occurred and be continuing;
(iii) the Enhancer shall have consented thereto and each Rating Agency shall have
notified the Issuer that such transaction will not cause a Rating Event,
without taking into account the Policy;
(iv) the Issuer shall have received an Opinion of Counsel (and shall have delivered
copies thereof to the Indenture Trustee and the Enhancer) to the effect that
such transaction will not have any material adverse tax consequence to the
Issuer, any Noteholder or any Certificateholder;
(v) any action that is necessary to maintain the lien and security interest
created by this Indenture shall have been taken; and
(vi) the Issuer shall have delivered to the Indenture Trustee an Officer's
Certificate and an Opinion of Counsel each stating that such consolidation or
merger and such supplemental indenture comply with this Article III and that
all conditions precedent herein provided for relating to such transaction have
been complied with (including any filing required by the Exchange Act).
(b) The Issuer shall not convey or transfer any of its properties or assets,
including those included in the Trust Estate, to any Person, unless:
(i) the Person that acquires by conveyance or transfer the properties and assets
of the Issuer the conveyance or transfer of which is hereby restricted shall
(A) be a United States citizen or a Person organized and existing under the
laws of the United States of America or any state, (B) expressly assumes, by
an indenture supplemental hereto, executed and delivered to the Indenture
Trustee, in form satisfactory to the Indenture Trustee, the due and punctual
payment of the principal of and interest on all Notes and the performance or
observance of every agreement and covenant of this Indenture on the part of
the Issuer to be performed or observed, all as provided herein, (C) expressly
agrees by means of such supplemental indenture that all right, title and
interest so conveyed or transferred shall be subject and subordinate to the
rights of Noteholders of the Notes, (D) unless otherwise provided in such
supplemental indenture, expressly agrees to indemnify, defend and hold
harmless the Issuer against and from any loss, liability or expense arising
under or related to this Indenture and the Notes and (E) expressly agrees by
means of such supplemental indenture that such Person (or if a group of
Persons, then one specified Person) shall make all filings with the Commission
(and any other appropriate Person) required by the Exchange Act in connection
with the Notes;
(ii) immediately after giving effect to such transaction, no Default or Event of
Default shall have occurred and be continuing;
(iii) the Enhancer shall have consented thereto, and each Rating Agency shall have
notified the Issuer that such transaction will not cause a Rating Event, if
determined without regard to the Policy;
(iv) the Issuer shall have received an Opinion of Counsel (and shall have delivered
copies thereof to the Indenture Trustee) to the effect that such transaction
will not have any material adverse tax consequence to the Issuer or any
Noteholder;
(v) any action that is necessary to maintain the lien and security interest
created by this Indenture shall have been taken; and
(vi) the Issuer shall have delivered to the Indenture Trustee an Officer's
Certificate and an Opinion of Counsel each stating that such conveyance or
transfer and such supplemental indenture comply with this Article III and that
all conditions precedent herein provided for relating to such transaction have
been complied with (including any filing required by the Exchange Act).
Section 3.17 Successor or Transferee.
(a) Upon any consolidation or merger of the Issuer in accordance with
Section 3.16(a), the Person formed by or surviving such consolidation or merger (if
other than the Issuer) shall succeed to, and be substituted for, and may exercise
every right and power of, the Issuer under this Indenture with the same effect as if
such Person had been named as the Issuer herein.
(b) Upon a conveyance or transfer of all the assets and properties of the Issuer
pursuant to Section 3.16(b), the Issuer shall be released from every covenant and
agreement of this Indenture to be observed or performed on the part of the Issuer
with respect to the Notes immediately upon the delivery of written notice to the
Indenture Trustee of such conveyance or transfer.
Section 3.18 No Other Business. The Issuer shall not engage in any business other
than financing, purchasing, owning and selling and managing the Mortgage Loans and
the issuance of the Notes and Certificates in the manner contemplated by this
Indenture and the Basic Documents and all activities incidental thereto.
Section 3.19 No Borrowing. The Issuer shall not issue, incur, assume, guarantee or
otherwise become liable, directly or indirectly, for any indebtedness except for the
Notes.
Section 3.20 Guarantees, Loans, Advances and Other Liabilities. Except as
contemplated by this Indenture or the other Basic Documents, the Issuer shall not
make any loan or advance or credit to, or guarantee (directly or indirectly or by an
instrument having the effect of assuring another's payment or performance on any
obligation or capability of so doing or otherwise), endorse or otherwise become
contingently liable, directly or indirectly, in connection with the obligations,
stocks or dividends of, or own, purchase, repurchase or acquire (or agree
contingently to do so) any stock, obligations, assets or securities of, or any other
interest in, or make any capital contribution to, any other Person.
Section 3.21 Capital Expenditures. The Issuer shall not make any expenditure (by
long-term or operating lease or otherwise) for capital assets (either realty or
personalty).
Section 3.22 Owner Trustee Not Liable for Certificates or Related Documents. The
recitals contained herein shall be taken as the statements of the Issuer, and the
Owner Trustee and the Indenture Trustee assume no responsibility for the correctness
of the recitals contained herein. The Owner Trustee and the Indenture Trustee make
no representations as to the validity or sufficiency of this Indenture or any other
Basic Document, of the Certificates (other than the signatures of the Owner Trustee
or the Indenture Trustee on the Certificates) or the Notes, or of any Related
Documents. The Owner Trustee and the Indenture Trustee shall at no time have any
responsibility or liability with respect to the sufficiency of the Trust Estate or
its ability to generate the payments to be distributed to Certificateholders under
the Trust Agreement or the Noteholders under this Indenture, including, the
compliance by the Depositor or the Sellers with any warranty or representation made
under any Basic Document or in any related document or the accuracy of any such
warranty or representation, or any action of the Certificate Paying Agent, the
Certificate Registrar or any other person taken in the name of the Owner Trustee or
the Indenture Trustee.
Section 3.23 Restricted Payments. The Issuer shall not, directly or indirectly, (i)
pay any dividend or make any distribution (by reduction of capital or otherwise),
whether in cash, property, securities or a combination thereof, to the Owner Trustee
or any owner of a beneficial interest in the Issuer or otherwise with respect to any
ownership or equity interest or security in or of the Issuer, (ii) redeem, purchase,
retire or otherwise acquire for value any such ownership or equity interest or
security or (iii) set aside or otherwise segregate any amounts for any such purpose;
provided, however, that the Issuer may make, or cause to be made, (x) distributions
to the Owner Trustee and the Certificateholders as contemplated by, and to the extent
funds are available for such purpose under, the Trust Agreement and (y) payments to
the Servicer pursuant to the terms of the Servicing Agreement. The Issuer will not,
directly or indirectly, make payments to or distributions from the Custodial Account
except in accordance with this Indenture and the other Basic Documents.
Section 3.24 Notice of Events of Default. The Issuer shall give the Indenture
Trustee, the Enhancer and the Rating Agencies prompt written notice of each Event of
Default hereunder and under the Trust Agreement.
Section 3.25 Further Instruments and Acts. Upon request of the Indenture Trustee,
the Issuer shall execute and deliver such further instruments and do such further
acts as may be reasonably necessary or proper to carry out more effectively the
purposes of this Indenture.
Section 3.26 Statements to Noteholders. On each Payment Date, each of the Indenture
Trustee and the Certificate Registrar shall make available to the Depositor, the
Owner Trustee, each Rating Agency, each Noteholder and each Certificateholder, with a
copy to the Enhancer, the Servicing Certificate provided to the Indenture Trustee by
the Servicer relating to such Payment Date and delivered pursuant to Section 4.01 of
the Servicing Agreement.
The Indenture Trustee will make the Servicing Certificate (and, at its option,
any additional files containing the same information in an alternative format)
available each month to Securityholders and the Enhancer, and other parties to this
Indenture via the Indenture Trustee's internet website. The Indenture Trustee's
internet website shall initially be located at "xxx.xxxxxxxx.xxx/xxx." Assistance in
using the website can be obtained by calling the Indenture Trustee's customer service
desk at (000) 000-0000. Parties that are unable to use the above distribution
options are entitled to have a paper copy mailed to them via first class mail by
calling the customer service desk and indicating such. The Indenture Trustee shall
have the right to change the way the statement to Securityholders are distributed in
order to make such distribution more convenient or more accessible to the above
parties and the Indenture Trustee shall provide timely and adequate notification to
all above parties regarding any such changes.
Section 3.27 Determination of Note Rate. 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.
(ii) The Indenture Trustee shall deposit or cause to be deposited such Policy Draw
Amount into the Note Payment Account on such Payment Date to the extent such
amount relates to clause (a) of the definition of "Deficiency Amount" or
clause (b) of the definition of "Insured Payment".
(b) The Indenture Trustee shall submit, if a Policy Draw Amount is specified in
any statement to Securityholders prepared pursuant to Section 4.01 of the Servicing
Agreement, the Notice (in the form attached as Exhibit A to the Policy) to the
Enhancer no later than 12:00 noon, New York City time, on the second (2nd) Business
Day prior to the applicable Payment Date.
Section 3.29 Replacement/Additional Enhancement. The Issuer (or the Servicer on its
behalf) may, at its expense, in accordance with and upon satisfaction of the
conditions set forth herein, but shall not be required to, obtain a surety bond,
letter of credit, guaranty or reserve account as a Permitted Investment for amounts
on deposit in the Capitalized Interest Account, or may arrange for any other form of
additional credit enhancement; provided, that after prior notice thereto, no Rating
Agency shall have informed the Issuer that a Rating Event would occur as a result
thereof (without taking the Policy into account); and provided further, that the
issuer of any such instrument or facility and the timing and mechanism for drawing on
such additional enhancement shall be acceptable to the Indenture Trustee and the
Enhancer. It shall be a condition to procurement of any such additional credit
enhancement that there be delivered to the Indenture Trustee and the Enhancer (a) an
Opinion of Counsel, acceptable in form to the Indenture Trustee and the Enhancer,
from counsel to the provider of such additional credit enhancement with respect to
the enforceability thereof and such other matters as the Indenture Trustee or the
Enhancer may require and (b) an Opinion of Counsel to the effect that the procurement
of such additional enhancement would not (i) adversely affect in any material respect
the tax status of the Notes or the Certificates or (ii) cause the Issuer to be
taxable as an association (or a publicly traded partnership) for federal income tax
purposes or to be classified as a taxable mortgage pool within the meaning of Section
7701(i) of the Code.
Section 3.30 Additional Representations of Issuer.
The Issuer hereby represents and warrants to the Indenture Trustee that as of
the Closing Date (which representations and warranties shall survive the execution of
this Indenture):
(a) This Indenture creates a valid and continuing security interest (as defined in
the applicable UCC) in the Mortgage Notes in favor of the Indenture Trustee, which
security interest is prior to all other Liens (except as expressly permitted
otherwise in this Indenture), and is enforceable as such as against creditors of and
purchasers from the Issuer.
(b) The Mortgage Notes constitute "instruments" within the meaning of the
applicable UCC.
(c) The Issuer owns and has good and marketable title to the Mortgage Notes free
and clear of any Lien of any Person.
(d) The original executed copy of each Mortgage Note (except for any Mortgage Note
with respect to which a Lost Note Affidavit has been delivered to the Custodian) has
been delivered to the Custodian.
(e) The Issuer has received a written acknowledgment from the Custodian that the
Custodian is acting solely as agent of the Indenture Trustee for the benefit of the
Noteholders 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 Hedge 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 Hedge Agreement Provider under the Hedge Agreement, the Indenture
Trustee shall enforce the obligation of the Hedge Agreement Provider thereunder. The
parties hereto acknowledge that the Hedge Agreement Provider shall make all
calculations, and shall determine the amounts to be paid, under the Hedge 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 Hedge Agreement into the Note Payment Account on the date such
amounts are received from the Hedge Agreement Provider under the Hedge Agreement
(including termination payments, if any). All payments received under the Hedge
Agreement shall be distributed in accordance with the priorities set forth in Section
3.05(e) hereof.
ARTICLE IV
The Notes; Satisfaction And Discharge Of Indenture
Section 4.01 The Notes
(a) The Notes shall be registered in the name of a nominee designated by the
Depository. Beneficial Owners will hold interests in the Notes through the
book-entry facilities of the Depository in minimum initial Note Balances of $25,000
and integral multiples of $1,000 in excess thereof.
The Indenture Trustee may for all purposes (including the making of payments
due on the Notes) deal with the Depository as the authorized representative of the
Beneficial Owners with respect to the Notes for the purposes of exercising the rights
of Noteholders hereunder. Except as provided in the next succeeding paragraph of
this Section 4.01, the rights of Beneficial Owners with respect to the Notes shall be
limited to those established by law and agreements between such Beneficial Owners and
the Depository and Depository Participants. Except as provided in Section 4.08,
Beneficial Owners shall not be entitled to definitive certificates for the Notes as
to which they are the Beneficial Owners. Requests and directions from, and votes of,
the Depository as Noteholder of the Notes shall not be deemed inconsistent if they
are made with respect to different Beneficial Owners. The Indenture Trustee may
establish a reasonable record date in connection with solicitations of consents from
or voting by Noteholders and give notice to the Depository of such record date.
Without the consent of the Issuer and the Indenture Trustee, no Term Note may be
transferred by the Depository except to a successor Depository that agrees to hold
such Note for the account of the Beneficial Owners.
In the event the Depository Trust Company resigns or is removed as Depository,
the Indenture Trustee, at the request of the Servicer and with the approval of the
Issuer may appoint a successor Depository. If no successor Depository has been
appointed within 30 days of the effective date of the Depository's resignation or
removal, each Beneficial Owner shall be entitled to certificates representing the
Notes it beneficially owns in the manner prescribed in Section 4.08.
The Notes shall, on original issue, be executed on behalf of the Issuer by the
Owner Trustee, not in its individual capacity but solely as Owner Trustee and upon
Issuer Order, authenticated by the Note Registrar and delivered by the Indenture
Trustee to or upon the order of the Issuer.
Section 4.02 Registration of and Limitations on Transfer and Exchange of Notes;
Appointment of Certificate Registrar. The Issuer shall cause to be kept at the
Indenture Trustee's Corporate Trust Office a Note Register in which, subject to such
reasonable regulations as it may prescribe, the Note Registrar shall provide for the
registration of Notes and of transfers and exchanges of Notes as herein provided.
The Issuer hereby appoints the Indenture Trustee as the initial Note Registrar.
Subject to the restrictions and limitations set forth below, upon surrender
for registration of transfer of any Note at the Corporate Trust Office, the Issuer
shall execute, and the Note Registrar shall authenticate and deliver, in the name of
the designated transferee or transferees, one or more new Notes in authorized initial
Note Balances evidencing the same aggregate Percentage Interests.
Subject to the foregoing, at the option of the Noteholders, Notes may be
exchanged for other Notes of like tenor, in each case in authorized initial Note
Balances evidencing the same aggregate Percentage Interests, upon surrender of the
Notes to be exchanged at the Corporate Trust Office of the Note Registrar. Whenever
any Notes are so surrendered for exchange, the Issuer shall execute and the Note
Registrar shall authenticate and deliver the Notes which the Noteholder making the
exchange is entitled to receive. Each Note presented or surrendered for registration
of transfer or exchange shall (if so required by the Note Registrar) be duly endorsed
by, or be accompanied by a written instrument of transfer in form reasonably
satisfactory to the Note Registrar duly executed by, the Noteholder thereof or his
attorney duly authorized in writing with such signature guaranteed by a commercial
bank or trust company located or having a correspondent located in The City of New
York. Notes delivered upon any such transfer or exchange will evidence the same
obligations, and will be entitled to the same rights and privileges, as the Notes
surrendered.
No service charge shall be imposed for any registration of transfer or
exchange of Notes, but the Note Registrar shall require payment of a sum sufficient
to cover any tax or governmental charge that may be imposed in connection with any
registration of transfer or exchange of Notes.
All Notes surrendered for registration of transfer and exchange shall be
cancelled by the Note Registrar and delivered to the Indenture Trustee for subsequent
destruction without liability on the part of either.
The Issuer hereby appoints the Indenture Trustee as Certificate Registrar to
keep at its Corporate Trust Office a Certificate Register pursuant to Section 3.09 of
the Trust Agreement in which, subject to such reasonable regulations as it may
prescribe, the Certificate Registrar shall provide for the registration of
Certificates and of transfers and exchanges thereof pursuant to Section 3.05 of the
Trust Agreement. The Indenture Trustee hereby accepts such appointment.
Each purchaser of a Note, by its acceptance of the Note, shall be deemed to
have represented that the acquisition of such Note by the purchaser does not
constitute or give rise to a prohibited transaction under Section 406 of ERISA or
Section 4975 of the Code, for which no statutory, regulatory or administrative
exemption is available.
Section 4.03 Mutilated, Destroyed, Lost or Stolen Notes. If (i) any mutilated Note
is surrendered to the Indenture Trustee, or the Indenture Trustee receives evidence
to its satisfaction of the destruction, loss or theft of any Note, and (ii) there is
delivered to the Indenture Trustee such security or indemnity as may be required by
it and the Issuer to hold the Issuer and the Indenture Trustee harmless, then, in the
absence of notice to the Issuer, the Note Registrar or the Indenture Trustee that
such Note has been acquired by a bona fide purchaser, and provided that the
requirements of Section 8 405 of the UCC are met, the Issuer shall execute, and upon
its request the Indenture Trustee shall authenticate and deliver, in exchange for or
in lieu of any such mutilated, destroyed, lost or stolen Note, a replacement Note of
the same class; provided, however, that if any such destroyed, lost or stolen Note,
but not a mutilated Note, shall have become or within seven days shall be due and
payable, instead of issuing a replacement Note, the Issuer may pay such destroyed,
lost or stolen Note when so due or payable without surrender thereof. If, after the
delivery of such replacement Note or payment of a destroyed, lost or stolen Note
pursuant to the proviso to the preceding sentence, a bona fide purchaser of the
original Note in lieu of which such replacement Note was issued presents for payment
such original Note, the Issuer and the Indenture Trustee shall be entitled to recover
such replacement Note (or such payment) from the Person to whom it was delivered or
any Person taking such replacement Note from such Person to whom such replacement
Note was delivered or any assignee of such Person, except a bona fide purchaser, and
shall be entitled to recover upon the security or indemnity provided therefor to the
extent of any loss, damage, cost or expense incurred by the Issuer or the Indenture
Trustee in connection therewith.
Upon the issuance of any replacement Note under this Section 4.03, the Issuer
may require the payment by the Noteholder of such Note of a sum sufficient to cover
any tax or other governmental charge that may be imposed in relation thereto and any
other reasonable expenses (including the fees and expenses of the Indenture Trustee)
connected therewith.
Every replacement Note issued pursuant to this Section 4.03 in replacement of
any mutilated, destroyed, lost or stolen Note shall constitute an original additional
contractual obligation of the Issuer, whether or not the mutilated, destroyed, lost
or stolen Note shall be at any time enforceable by anyone, and shall be entitled to
all the benefits of this Indenture equally and proportionately with any and all other
Notes duly issued hereunder.
The provisions of this Section 4.03 are exclusive and shall preclude (to the
extent lawful) all other rights and remedies with respect to the replacement or
payment of mutilated, destroyed, lost or stolen Notes.
Section 4.04 Persons Deemed Owners. Prior to due presentment for registration of
transfer of any Note, the Issuer, the Indenture Trustee and any agent of the Issuer
or the Indenture Trustee may treat the Person in whose name any Note is registered
(as of the day of determination) as the owner of such Note for the purpose of
receiving payments of principal of and interest, if any, on such Note and for all
other purposes whatsoever, whether or not such Note be overdue, and none of the
Issuer, the Indenture Trustee or any agent of the Issuer or the Indenture Trustee
shall be affected by notice to the contrary.
Section 4.05 Cancellation. All Notes surrendered for payment, registration of
transfer, exchange or redemption shall, if surrendered to any Person other than the
Indenture Trustee, be delivered to the Indenture Trustee and shall be promptly
cancelled by the Indenture Trustee. The Issuer may at any time deliver to the
Indenture Trustee for cancellation any Notes previously authenticated and delivered
hereunder which the Issuer may have acquired in any manner whatsoever, and all Notes
so delivered shall be promptly cancelled by the Indenture Trustee. No Notes shall be
authenticated in lieu of or in exchange for any Notes cancelled as provided in this
Section 4.05, except as expressly permitted by this Indenture. All cancelled Notes
may be held or disposed of by the Indenture Trustee in accordance with its standard
retention or disposal policy as in effect at the time unless the Issuer shall direct
by an Issuer Request that they be destroyed or returned to it; provided, however,
that such Issuer Request is timely and the Notes have not been previously disposed of
by the Indenture Trustee.
Section 4.06 Book-Entry Notes. The Notes, upon original issuance, shall be issued
in the form of typewritten Notes representing the Book-Entry Notes, to be delivered
to The Depository Trust Company, the initial Depository, by, or on behalf of, the
Issuer. Such Notes shall initially be registered on the Note Register in the name of
Cede & Co., the nominee of the initial Depository, and no Beneficial Owner shall
receive a Definitive Note representing such Beneficial Owner's interest in such Note,
except as provided in Section 4.08. Unless and until definitive, fully registered
Notes (the "Definitive Notes") have been issued to Beneficial Owners pursuant to
Section 4.08:
(a) the provisions of this Section 4.06 shall be in full force and effect;
(b) the Note Registrar and the Indenture Trustee shall be entitled to deal with
the Depository for all purposes of this Indenture (including the payment of principal
of and interest on the Notes and the giving of instructions or directions hereunder)
as the sole holder of the Notes, and shall have no obligation to the Beneficial
Owners;
(c) to the extent that the provisions of this Section 4.06 conflict with any other
provisions of this Indenture, the provisions of this Section 4.06 shall control;
(d) the rights of Beneficial Owners shall be exercised only through the Depository
and shall be limited to those established by law and agreements between such Owners
of Notes and the Depository or the Depository Participants. Unless and until
Definitive Notes are issued pursuant to Section 4.08, the initial Depository will
make book-entry transfers among the Depository Participants and receive and transmit
payments of principal of and interest on the Notes to such Depository Participants;
and
(e) whenever this Indenture requires or permits actions to be taken based upon
instructions or directions of Noteholders of Notes evidencing a specified percentage
of the Note Balances of the Notes, the Depository shall be deemed to represent such
percentage only to the extent that it has received instructions to such effect from
Beneficial Owners or Depository Participants owning or representing, respectively,
such required percentage of the beneficial interest in the Notes and has delivered
such instructions to the Indenture Trustee.
Section 4.07 Notices to Depository. Whenever a notice or other communication to the
Noteholders of the Notes is required under this Indenture, unless and until
Definitive Notes shall have been issued to Beneficial Owners pursuant to Section
4.08, the Indenture Trustee shall give all such notices and communications specified
herein to be given to Noteholders of the Notes to the Depository, and shall have no
obligation to the Beneficial Owners.
Section 4.08 Definitive Notes. If (i) the Depositor determines that the Depository
is no longer willing or able to properly discharge its responsibilities with respect
to the Notes and the Depositor is unable to locate a qualified successor, (ii) the
Depositor, with the prior consent of the Beneficial Owners, notifies the Indenture
Trustee and the Depository that it has elected to terminate the book-entry system
through the Depository, or (iii) after the occurrence of an Event of Default,
Beneficial Owners of Notes representing beneficial interests aggregating at least a
majority of the aggregate Term Note Balance of the Notes advise the Depository in
writing that the continuation of a book-entry system through the Depository is no
longer in the best interests of the Beneficial Owners, then the Depository shall
notify all Beneficial Owners and the Indenture Trustee of the occurrence of any such
event and of the availability of Definitive Notes to Beneficial Owners requesting the
same. Upon surrender by the Depository to the Indenture Trustee of the typewritten
Notes representing the Book-Entry Notes by the Depository (or Percentage Interest of
the Book-Entry Notes being transferred pursuant to clause (iii) above), accompanied
by registration instructions, the Issuer shall execute and the Indenture Trustee
shall authenticate the Definitive Notes in accordance with the instructions of the
Depository. None of the Issuer, the Note Registrar or the Indenture Trustee shall be
liable for any delay in delivery of such instructions, and each may conclusively rely
on, and shall be protected in relying on, such instructions. Upon the issuance of
Definitive Notes, the Indenture Trustee shall recognize the Noteholders of the
Definitive Notes as Noteholders.
Section 4.09 Tax Treatment. The Issuer has entered into this Indenture, and the
Notes will be issued, with the intention that, for federal, state and local income,
single business and franchise tax purposes, the Notes (exclusive of any payment
pursuant to the Hedge Agreement) 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 Hedge Agreement) 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.
Section 4.10 Satisfaction and Discharge of Indenture. This Indenture shall cease to
be of further effect with respect to the Notes except as to (i) rights of
registration of transfer and exchange, (ii) substitution of mutilated, destroyed,
lost or stolen Notes, (iii) rights of Noteholders to receive payments of principal
thereof and interest thereon, (iv) Sections 3.03, 3.04, 3.06, 3.09, 3.16, 3.18 and
3.19, (v) the rights, obligations and immunities of the Indenture Trustee hereunder
(including the rights of the Indenture Trustee under Section 6.07 and the obligations
of the Indenture Trustee under Section 4.11) and (vi) the rights of Noteholders as
beneficiaries hereof with respect to the property so deposited with the Indenture
Trustee payable to all or any of them, and the Indenture Trustee, on written demand
of and at the expense of the Issuer, shall execute proper instruments acknowledging
satisfaction and discharge of this Indenture with respect to the Notes, when:
(A) either:
(1) all Notes theretofore authenticated and delivered (other than (i) Notes that
have been destroyed, lost or stolen and that have been replaced
or paid as provided in Section 4.03 and (ii) Notes for whose
payment money has theretofore been deposited in trust or
segregated and held in trust by the Issuer and thereafter
repaid to the Issuer or discharged from such trust, as provided
in Section 3.03) have been delivered to the Indenture Trustee
for cancellation; or
(2) all Notes not theretofore delivered to the Indenture Trustee for cancellation:
a) have become due and payable;
b) will become due and payable at the Final
Payment Date within one year; or
c) have been declared immediately due and
payable pursuant to Section 5.02.
and the Issuer, in the case of (a) and (b) above, has irrevocably deposited or
caused to be irrevocably deposited with the Indenture Trustee cash or direct
obligations of or obligations guaranteed by the United States of America
(which will mature prior to the date such amounts are payable), in trust for
such purpose, in an amount sufficient to pay and discharge the entire
indebtedness on such Notes and Certificates then Outstanding not theretofore
delivered to the Indenture Trustee for cancellation when due on the Final
Payment Date;
(B) the Issuer has paid or caused to be paid all other sums
payable hereunder and under the Insurance Agreement by the Issuer; and
(C) the Issuer has delivered to the Indenture Trustee and
the Enhancer an Officer's Certificate and an Opinion of Counsel, each
meeting the applicable requirements of Section 10.01 and each stating
that all conditions precedent herein provided for relating to the
satisfaction and discharge of this Indenture have been complied with
and, if the Opinion of Counsel relates to a deposit made in connection
with Section 4.10(A)(2)b. above, such opinion shall further be to the
effect that such deposit will not have any material adverse tax
consequences to the Issuer, any Noteholders or any Certificateholders.
Section 4.11 Application of Trust Money. All monies deposited with the Indenture
Trustee pursuant to Section 4.10 hereof shall be held in trust and applied by it, in
accordance with the provisions of the Notes and this Indenture, to the payment,
either directly or through any Paying Agent or Certificate Paying Agent, as the
Indenture Trustee may determine, to the Securityholders of Securities, of all sums
due and to become due thereon for principal and interest; but such monies need not be
segregated from other funds except to the extent required herein or required by law.
Section 4.12 Subrogation and Cooperation. The Issuer and the Indenture Trustee
acknowledge that (i) to the extent the Enhancer makes payments under the Policy on
account of principal of or interest on the Notes, the Enhancer will be fully
subrogated to the rights the Noteholders to receive such principal and interest, and
(ii) the Enhancer shall be paid such principal and interest only from the sources and
in the manner provided herein and in the Insurance Agreement for the payment of such
principal and interest.
The Indenture Trustee shall cooperate in all respects with any reasonable
request by the Enhancer for action to preserve or enforce the Enhancer's rights or
interest under this Indenture or the Insurance Agreement, consistent with this
Indenture and without limiting the rights of the Noteholders as otherwise set forth
in the Indenture, including upon the occurrence and continuance of a default under
the Insurance Agreement, a request (which request shall be in writing) to take any
one or more of the following actions:
(i) institute Proceedings for the collection of all amounts then payable on the
Notes or under this Indenture in respect to the Notes and all amounts payable
under the Insurance Agreement and to enforce any judgment obtained and collect
from the Issuer monies adjudged due;
(ii) sell the Trust Estate or any portion thereof or rights or interest therein, at
one or more public or private Sales (as defined in Section 5.15 hereof) called
and conducted in any manner permitted by law;
(iii) file or record all assignments that have not previously been recorded;
(iv) institute Proceedings from time to time for the complete or partial
foreclosure of this Indenture; and
(v) exercise any remedies of a secured party under the UCC and take any other
appropriate action to protect and enforce the rights and remedies of the
Enhancer hereunder.
Following the payment in full of the Notes, the Enhancer shall continue to
have all rights and privileges provided to it under this Section and in all other
provisions of this Indenture, until all amounts owing to the Enhancer have been paid
in full.
Section 4.13 Repayment of Monies Held by Paying Agent. In connection with the
satisfaction and discharge of this Indenture with respect to the Notes, all monies
then held by any Paying Agent (other than the Indenture Trustee) under the provisions
of this Indenture with respect to such Notes shall, upon demand of the Issuer, be
paid to the Indenture Trustee to be held and applied according to Section 3.05; and
thereupon, such Paying Agent shall be released from all further liability with
respect to such monies.
Section 4.14 Temporary Notes. Pending the preparation of any Definitive Notes, the
Issuer may execute and upon its written direction, the Indenture Trustee may
authenticate and make available for delivery, temporary Notes that are printed,
lithographed, typewritten, photocopied or otherwise produced, in any denomination,
substantially of the tenor of the Definitive Notes in lieu of which they are issued
and with such appropriate insertions, omissions, substitutions and other variations
as the officers executing such Notes may determine, as evidenced by their execution
of such Notes.
If temporary Notes are issued, the Issuer will cause Definitive Notes to be
prepared without unreasonable delay. After the preparation of the Definitive Notes,
the temporary Notes shall be exchangeable for Definitive Notes upon surrender of the
temporary Notes at the office or agency of the Indenture Trustee, without charge to
the Noteholder. Upon surrender for cancellation of any one or more temporary Notes,
the Issuer shall execute and the Indenture Trustee shall authenticate and make
available for delivery, in exchange therefor, Definitive Notes of authorized
denominations and of like tenor and aggregate principal amount. Until so exchanged,
such temporary Notes shall in all respects be entitled to the same benefits under
this Indenture as Definitive Notes.
ARTICLE V
Default And Remedies
Section 5.01 Events of Default. The Issuer shall deliver to the Indenture Trustee
and the Enhancer, within five days after learning of the occurrence of any event that
with the giving of notice and the lapse of time would become an Event of Default
under clause (c) of the definition of "Event of Default" written notice in the form
of an Officer's Certificate of its status and what action the Issuer is taking or
proposes to take with respect thereto.
Section 5.02 Acceleration of Maturity; Rescission and Annulment. If an Event of
Default shall occur and be continuing, then and in every such case the Indenture
Trustee, acting at the direction of the Enhancer or the Noteholders of Notes
representing not less than a majority of the aggregate Note Balance of the Notes,
with the written consent of the Enhancer (so long as no Enhancer Default exists), may
declare the Notes to be immediately due and payable by a notice in writing to the
Issuer (and to the Indenture Trustee if given by Noteholders); and upon any such
declaration, the unpaid principal amount of the Notes, together with accrued and
unpaid interest thereon through the date of acceleration, shall become immediately
due and payable.
At any time after such declaration of acceleration of maturity with respect to
an Event of Default has been made and before a judgment or decree for payment of the
money due has been obtained by the Indenture Trustee as hereinafter provided in this
Article V, the Enhancer or the Noteholders of Notes representing a majority of the
aggregate Note Balance of the Notes, with the written consent of the Enhancer, by
written notice to the Issuer and the Indenture Trustee, may in writing waive the
related Event of Default and rescind and annul such declaration and its consequences
if:
(a) the Issuer has paid or deposited with the Indenture Trustee a sum sufficient
to pay:
(i) all payments of principal of and interest on the Notes and all other amounts
that would then be due hereunder or upon the Notes if the Event of Default
giving rise to such acceleration had not occurred;
(ii) all sums paid or advanced by the Indenture Trustee hereunder and the
reasonable compensation, expenses, disbursements and advances of the Indenture
Trustee and its agents and counsel; and
(iii) all Events of Default, other than the nonpayment of the principal of the Notes
that has become due solely by such acceleration, have been cured or waived as
provided in Section 5.12.
No such rescission shall affect any subsequent default or impair any right
consequent thereto.
Section 5.03 Collection of Indebtedness and Suits for Enforcement by Indenture
Trustee.
(a) The Issuer covenants that if default in the payment of (i) any interest on any
Note when the same becomes due and payable, and such default continues for a period
of five days, or (ii) the principal of or any installment of the principal of any
Note when the same becomes due and payable, the Issuer shall, upon demand of the
Indenture Trustee, pay to it, for the benefit of the Noteholders, the entire amount
then due and payable on the Notes for principal and interest, with interest on the
overdue principal, and in addition thereto such further amount as shall be sufficient
to cover the costs and expenses of collection, including the reasonable compensation,
expenses, disbursements and advances of the Indenture Trustee and its agents and
counsel.
(b) In case the Issuer shall fail forthwith to pay such amounts upon such demand,
the Indenture Trustee, in its own name and as trustee of an express trust, subject to
the provisions of Section 10.17 hereof, may institute a Proceeding for the collection
of the sums so due and unpaid, and may prosecute such Proceeding to judgment or final
decree, and may enforce the same against the Issuer or other obligor on the Notes and
collect in the manner provided by law out of the property of the Issuer or other
obligor on the Notes, wherever situated, the monies adjudged or decreed to be payable.
(c) If an Event of Default shall occur and be continuing, the Indenture Trustee,
subject to the provisions of Section 10.17 hereof, may, as more particularly provided
in Section 5.04, in its discretion proceed to protect and enforce its rights and the
rights of the Noteholders by such appropriate Proceedings as the Indenture Trustee
shall deem most effective to protect and enforce any such rights, whether for the
specific enforcement of any covenant or agreement in this Indenture or in aid of the
exercise of any power granted herein, or to enforce any other proper remedy or legal
or equitable right vested in the Indenture Trustee by this Indenture or by law.
(d) If there shall be pending, relative to the Issuer or any other obligor on the
Notes or any Person having or claiming an ownership interest in the Trust Estate,
Proceedings under Title 11 of the United States Code or any other applicable federal
or state bankruptcy, insolvency or other similar law, or if a receiver, assignee or
trustee in bankruptcy or reorganization, liquidator, sequestrator or similar official
shall have been appointed for or taken possession of the Issuer or its property or
such other obligor or Person, or if there shall be any other comparable judicial
Proceedings relative to the Issuer or other any other obligor on the Notes, or
relative to the creditors or property of the Issuer or such other obligor, then the
Indenture Trustee, irrespective of whether the principal of any Notes shall then be
due and payable as therein expressed or by declaration or otherwise, and irrespective
of whether the Indenture Trustee shall have made any demand pursuant to the
provisions of this Section, shall be entitled and empowered, by intervention in such
Proceedings or otherwise:
(i) to file and prove a claim or claims for the entire amount of principal and
interest owing and unpaid in respect of the Notes and to file such other
papers or documents as may be necessary or advisable in order to have the
claims of the Indenture Trustee (including any claim for reasonable
compensation to the Indenture Trustee and each predecessor Indenture Trustee,
and their respective agents, attorneys and counsel, and for reimbursement of
all expenses and liabilities incurred, and all advances made, by the Indenture
Trustee and each predecessor Indenture Trustee, except as a result of
negligence, willful misconduct or bad faith) and of the Noteholders allowed in
such Proceedings;
(ii) unless prohibited by applicable law and regulations, to vote on behalf of the
Noteholders in any election of a trustee, a standby trustee or Person
performing similar functions in any such Proceedings;
(iii) to collect and receive any monies or other property payable or deliverable on
any such claims and to distribute all amounts received with respect to the
claims of the Noteholders and of the Indenture Trustee on their behalf; and
(iv) to file such proofs of claim and other papers or documents as may be necessary
or advisable in order to have the claims of the Indenture Trustee or the
Noteholders allowed in any judicial proceedings relative to the Issuer, its
creditors and its property;
and any trustee, receiver, liquidator, custodian or other similar official in any
such Proceeding is hereby authorized by each of such Noteholders to make payments to
the Indenture Trustee, and, in the event the Indenture Trustee shall consent to the
making of payments directly to such Noteholders, to pay to the Indenture Trustee such
amounts as shall be sufficient to cover reasonable compensation to the Indenture
Trustee, each predecessor Indenture Trustee and their respective agents, attorneys
and counsel, and all other expenses and liabilities incurred, and all advances made,
by the Indenture Trustee and each predecessor Indenture Trustee, except as a result
of negligence, willful misconduct or bad faith.
(e) Nothing herein contained shall be deemed to authorize the Indenture Trustee to
authorize or consent to or vote for or accept or adopt on behalf of any Noteholder
any plan of reorganization, arrangement, adjustment or composition affecting the
Notes or the rights of any Noteholder thereof or to authorize the Indenture Trustee
to vote in respect of the claim of any Noteholder in any such proceeding except, as
aforesaid, to vote for the election of a trustee in bankruptcy or similar Person.
(f) All rights of action and of asserting claims under this Indenture, or under
any of the Notes, may be enforced by the Indenture Trustee without the possession of
any of the Notes or the production thereof in any trial or other Proceedings relative
thereto, and any such action or proceedings instituted by the Indenture Trustee shall
be brought in its own name as trustee of an express trust, and any recovery of
judgment, subject to the payment of the expenses, disbursements and compensation of
the Indenture Trustee, each predecessor Indenture Trustee and their respective agents
and attorneys, shall be for the ratable benefit of the Holders of the Notes.
(g) In any Proceedings to which the Indenture Trustee shall be a party (including
any Proceedings involving the interpretation of any provision of this Indenture), the
Indenture Trustee shall be held to represent all Noteholders, and it shall not be
necessary to make any Noteholder a party to any such Proceedings.
Section 5.04 Remedies; Priorities.
(a) If an Event of Default shall have occurred and be continuing, then the
Indenture Trustee, subject to the provisions of Section 10.17 hereof, with the
written consent of the Enhancer may, or, at the written direction of the Enhancer,
shall, do one or more of the following, in each case subject to Section 5.05:
(i) institute Proceedings in its own name and as trustee of an express trust for
the collection of all amounts then payable on the Notes or under this
Indenture with respect thereto, whether by declaration or otherwise, and all
amounts payable under the Insurance Agreement, enforce any judgment obtained,
and collect from the Issuer and any other obligor on the Notes monies adjudged
due;
(ii) institute Proceedings from time to time for the complete or partial
foreclosure of this Indenture with respect to the Trust Estate;
(iii) exercise any remedies of a secured party under the UCC and take any other
appropriate action to protect and enforce the rights and remedies of the
Indenture Trustee and the Noteholders; and
(iv) sell the Trust Estate or any portion thereof or rights or interest therein, at
one or more public or private sales called and conducted in any manner
permitted by law;
provided, however, that the Indenture Trustee may not sell or otherwise liquidate the
Trust Estate following an Event of Default, unless (A) the Indenture Trustee obtains
the consent of the Enhancer (or if an Enhancer Default has occurred and is
continuing, the Noteholders of 100% of the aggregate Note Balance of the Notes), (B)
the proceeds of such sale or liquidation distributable to Noteholders are sufficient
to discharge in full all amounts then due and unpaid upon the Notes for principal and
interest and to reimburse the Enhancer for any amounts drawn under the Policy and any
other amounts due the Enhancer under the Insurance Agreement or (C) the Indenture
Trustee determines that the Mortgage Loans will not continue to provide sufficient
funds for the payment of principal of and interest on the Notes as they would have
become due if the Notes had not been declared due and payable, and the Indenture
Trustee obtains the consent of the Enhancer (or if an Enhancer Default has occurred
and is continuing, and the Noteholders of 66 2/3% of the aggregate Note Balance of
the Notes). In determining such sufficiency or insufficiency with respect to clause
(B) and (C) above, the Indenture Trustee may, but need not, obtain and rely, and
shall be protected in relying in good faith, upon an opinion of an Independent
investment banking or accounting firm of national reputation as to the feasibility of
such proposed action and as to the sufficiency of the Trust Estate for such purpose.
Notwithstanding the foregoing, provided that a Servicing Default shall not have
occurred, any Sale (as defined in Section 5.15 hereof) of the Trust Estate shall be
made subject to the continued servicing of the Mortgage Loans by the Servicer as
provided in the Servicing Agreement. Notwithstanding any sale of the Mortgage Loans
pursuant to this Section 5.04(a), the Indenture Trustee shall, for so long as any
principal or accrued interest on the Notes remains unpaid, continue to act as
Indenture Trustee hereunder and to draw amounts payable under the Policy in
accordance with its terms.
(b) If the Indenture Trustee collects any money or property pursuant to this
Article V, it shall pay out such money or property in the following order:
FIRST: to the Indenture Trustee for amounts due under Section 6.07;
SECOND:to the Noteholders 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 Carryforward 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;
FOURTH:to the payment of all amounts due and owing the Enhancer under
the Insurance Agreement; and
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
(e) no direction inconsistent with such written request shall have been given to
the Indenture Trustee during such 60-day period by the Noteholders of a majority of
the aggregate Note Balance of the Notes or by the Enhancer.
It is understood and intended that no Noteholder shall have any right in any
manner whatever by virtue of, or by availing itself of, any provision of this
Indenture to affect, disturb or prejudice the rights of any other Noteholders or to
obtain or to seek to obtain priority or preference over any other Noteholders or to
enforce any right under this Indenture, except in the manner herein provided.
In the event the Indenture Trustee shall receive conflicting or inconsistent
requests and indemnity from two or more groups of Noteholders, each representing less
than a majority of the aggregate Note Balance of the Notes, the Indenture Trustee
shall act at the direction of the group of Noteholders with the greater Note
Balance. In the event that the Indenture Trustee shall receive conflicting or
inconsistent requests and indemnity from two or more groups of Noteholders
representing the same Note Balance, then the Indenture Trustee in its sole discretion
may determine what action, if any, shall be taken, notwithstanding any other
provisions of this Indenture.
Section 5.07 Unconditional Rights of Noteholders to Receive Principal and Interest.
Subject to the provisions of this Indenture, the Noteholder of any Note shall have
the right, which is absolute and unconditional, to receive payment of the principal
of and interest, if any, on such Note on or after the respective due dates thereof
expressed in such Note or in this Indenture and to institute suit for the enforcement
of any such payment, and such right shall not be impaired without the consent of such
Noteholder.
Section 5.08 Restoration of Rights and Remedies. If the Indenture Trustee or any
Noteholder has instituted any Proceeding to enforce any right or remedy under this
Indenture and such Proceeding has been discontinued or abandoned for any reason or
has been determined adversely to the Indenture Trustee or to such Noteholder, then
and in every such case the Issuer, the Indenture Trustee and the Noteholders shall,
subject to any determination in such Proceeding, be restored severally and
respectively to their former positions hereunder, and thereafter all rights and
remedies of the Indenture Trustee and the Noteholders shall continue as though no
such Proceeding had been instituted.
Section 5.09 Rights and Remedies Cumulative. No right or remedy herein conferred
upon or reserved to the Indenture Trustee, the Enhancer or the Noteholders is
intended to be exclusive of any other right or remedy, and every right and remedy
shall, to the extent permitted by law, be cumulative and in addition to every other
right and remedy given hereunder or now or hereafter existing at law, in equity or
otherwise. The assertion or employment of any right or remedy hereunder, or
otherwise, shall not prevent the concurrent assertion or employment of any other
appropriate right or remedy.
Section 5.10 Delay or Omission Not a Waiver. No delay or omission of the Indenture
Trustee, the Enhancer or any Noteholder to exercise any right or remedy accruing upon
any Event of Default shall impair any such right or remedy or constitute a waiver of
any such Event of Default or an acquiescence therein. Every right and remedy given
by this Article V or by law to the Indenture Trustee or to the Noteholders may be
exercised from time to time, and as often as may be deemed expedient, by the
Indenture Trustee or by the Noteholders, as the case may be.
Section 5.11 Control by Enhancer or Noteholders. The Enhancer (so long as no
Enhancer Default exists) or the Noteholders of a majority of the aggregate Note
Balance of Notes with the consent of the Enhancer, shall have the right to direct the
time, method and place of conducting any Proceeding for any remedy available to the
Indenture Trustee with respect to the Notes or exercising any trust or power
conferred on the Indenture Trustee, provided that:
(a) such direction shall not be in conflict with any rule of law or with this
Indenture;
(b) subject to the express terms of Section 5.04, any direction to the Indenture
Trustee to sell or liquidate the Trust Estate shall be by the Enhancer (so long as no
Enhancer Default exists) or by the Noteholders of Notes representing not less than
100% of the aggregate Note Balance of the Notes with the consent of the Enhancer;
(c) if the conditions set forth in Section 5.05 shall have been satisfied and the
Indenture Trustee elects to retain the Trust Estate pursuant to such Section, then
any direction to the Indenture Trustee by Noteholders of Notes representing less than
100% of the aggregate Note Balance of the Notes to sell or liquidate the Trust Estate
shall be of no force and effect; and
(d) the Indenture Trustee may take any other action deemed proper by the Indenture
Trustee that is not inconsistent with such direction.
Notwithstanding the rights of Noteholders set forth in this Section, subject to
Section 6.01, the Indenture Trustee need not take any action that it determines (in
its sole discretion) might involve it in liability or might materially adversely
affect the rights of any Noteholders not consenting to such action, unless the
Trustee has received satisfactory indemnity from the Enhancer or a Noteholder.
Section 5.12 Waiver of Past Defaults. Prior to the declaration of the acceleration
of the maturity of the Notes as provided in Section 5.02, the Enhancer (so long as no
Enhancer Default exists) or the Noteholders of not less than a majority of the
aggregate Note Balance of the Notes, with the consent of the Enhancer, may waive any
past Event of Default and its consequences, except an Event of Default (a) with
respect to payment of principal of or interest on any of the Notes or (b) in respect
of a covenant or provision hereof that cannot be modified or amended without the
consent of the Noteholder of each Note. In the case of any such waiver, the Issuer,
the Indenture Trustee and the Noteholders shall be restored to their respective
former positions and rights hereunder; but no such waiver shall extend to any
subsequent or other Event of Default or impair any right consequent thereto.
Upon any such waiver, any Event of Default arising therefrom shall be deemed
to have been cured and not to have occurred, for every purpose of this Indenture; but
no such waiver shall extend to any subsequent or other Event of Default or impair any
right consequent thereto.
Section 5.13 Undertaking for Costs. All parties to this Indenture agree, and each
Noteholder by such Noteholder's acceptance of the related Note shall be deemed to
have agreed, that any court may in its discretion require, in any Proceeding for the
enforcement of any right or remedy under this Indenture, or in any Proceeding against
the Indenture Trustee for any action taken, suffered or omitted by it as Indenture
Trustee, the filing by any party litigant in such Proceeding of an undertaking to pay
the costs of such Proceeding, and that such court may in its discretion assess
reasonable costs, including reasonable attorneys' fees, against any party litigant in
such Proceeding, having due regard to the merits and good faith of the claims or
defenses made by such party litigant; but the provisions of this Section 5.13 shall
not apply to (a) any Proceeding instituted by the Indenture Trustee, (b) any
Proceeding instituted by any Noteholder, or group of Noteholders, in each case
holding in the aggregate more than 10% of the aggregate Note Balance of the Notes or
(c) any Proceeding instituted by any Noteholder for the enforcement of the payment of
principal of or interest on any Note on or after the respective due dates expressed
in such Note and in this Indenture.
Section 5.14 Waiver of Stay or Extension Laws. The Issuer covenants (to the extent
that it may lawfully do so) that it will not at any time insist upon, or plead or in
any manner whatsoever, claim or take the benefit or advantage of, any stay or
extension law wherever enacted, now or at any time hereafter in force, that may
affect the covenants or the performance of this Indenture; and the Issuer (to the
extent that it may lawfully do so) hereby expressly waives all benefit or advantage
of any such law, and covenants that it shall not hinder, delay or impede the
execution of any power herein granted to the Indenture Trustee, but will suffer and
permit the execution of every such power as though no such law had been enacted.
Section 5.15 Sale of Trust Estate.
(a) The power to effect any sale or other disposition (a "placeCitySale") of any
portion of the Trust Estate pursuant to Section 5.04 is expressly subject to the
provisions of Section 5.05 and this Section 5.15. The power to effect any such Sale
shall not be exhausted by any one or more Sales as to any portion of the Trust Estate
remaining unsold, but shall continue unimpaired until the entire Trust Estate shall
have been sold or all amounts payable on the Notes and under this Indenture and under
the Insurance Agreement shall have been paid. The Indenture Trustee may from time to
time postpone any public Sale by public announcement made at the time and place of
such Sale. The Indenture Trustee hereby expressly waives its right to any amount
fixed by law as compensation for any Sale.
(b) The Indenture Trustee shall not in any private Sale sell the Trust Estate, or
any portion thereof, unless:
(i) the Enhancer direct(s) the Indenture Trustee in writing to make such Sale in
accordance with the provisions of Section 5.04,
(ii) the proceeds of such Sale would be not less than the entire amount that would
be payable to the Noteholders under the Notes, the Certificateholders under
the Certificates and the Enhancer in respect of amounts drawn under the Policy
and any other amounts due the Enhancer under the Insurance Agreement, in full
payment thereof in accordance with Section 5.02, on the Payment Date next
succeeding the date of such Sale, or
(iii) the Indenture Trustee determines, in its sole discretion, that the conditions
for retention of the Trust Estate set forth in Section 5.05 cannot be
satisfied (in making any such determination, the Indenture Trustee may rely
and shall be protected in relying in good faith upon an opinion of an
Independent investment banking firm obtained and delivered as provided in
Section 5.05), and the Enhancer consents to such Sale.
The purchase by the Indenture Trustee of all or any portion of the Trust Estate at a
private Sale shall not be deemed a Sale or other disposition thereof for purposes of
this Section 5.15(b).
(c) Unless the Noteholders and the Enhancer shall have otherwise consented or
directed the Indenture Trustee, at any public Sale of all or any portion of the Trust
Estate at which a minimum bid equal to or greater than the amount described in
paragraph (ii) of Section 5.15(b) has not been established by the Indenture Trustee
and no Person bids an amount equal to or greater than such amount, then the Indenture
Trustee shall bid an amount at least $1.00 more than the highest other bid, which bid
shall be subject to the provisions of Section 5.15(d)(ii) herein.
(d) In connection with a Sale of all or any portion of the Trust Estate:
(i) any Noteholder may bid for and, with the consent of the Enhancer, purchase the
property offered for sale, and upon compliance with the terms of sale may
hold, retain and possess and dispose of such property, without further
accountability, and may, in paying the purchase money therefor, deliver any
Notes or claims for interest thereon in lieu of cash up to the amount which
shall, upon distribution of the net proceeds of such sale, be payable thereon,
and such Notes, in case the amounts so payable thereon shall be less than the
amount due thereon, shall be returned to the Noteholders thereof after being
appropriately stamped to show such partial payment;
(ii) the Indenture Trustee may bid for and acquire the property offered for
CitySale in connection with any placeCitySale thereof and, subject to any
requirements of, and to the extent permitted by, applicable law in connection
therewith, may purchase all or any portion of the Trust Estate in a private
sale. In lieu of paying cash therefor, the Indenture Trustee may make
settlement for the purchase price by crediting the gross Sale price against
the sum of (A) the amount that would be distributable to the Noteholders and
the Certificateholders and amounts owing to the Enhancer as a result of such
Sale in accordance with Section 5.04(b) on the Payment Date next succeeding
the date of such Sale and (B) the expenses of the Sale and of any Proceedings
in connection therewith that are reimbursable to it, without being required to
produce the Notes in order to complete any such Sale or in order for the net
Sale price to be credited against such Notes, and any property so acquired by
the Indenture Trustee shall be held and dealt with by it in accordance with
the provisions of this Indenture;
(iii) the Indenture Trustee shall execute and deliver an appropriate instrument of
conveyance transferring its interest in any portion of the Trust Estate in
connection with a Sale thereof;
(iv) the Indenture Trustee is hereby irrevocably appointed the agent and
attorney-in-fact of the Issuer to transfer and convey its interest in any
portion of the Trust Estate in connection with a Sale thereof, and to take all
action necessary to effect such Sale; and
(v) no purchaser or transferee at such a placeCitySale shall be bound to ascertain
the Indenture Trustee's authority, inquire into the satisfaction of any
conditions precedent or see to the application of any monies.
Section 5.16 Action on Notes. The Indenture Trustee's right to seek and recover
judgment on the Notes or under this Indenture shall not be affected by the seeking,
obtaining or application of any other relief under or with respect to this
Indenture. Neither the lien of this Indenture nor any rights or remedies of the
Indenture Trustee or the Noteholders shall be impaired by the recovery of any
judgment by the Indenture Trustee against the Issuer or by the levy of any execution
under such judgment upon any portion of the Trust Estate or upon any of the assets of
the Issuer. Any money or property collected by the Indenture Trustee shall be
applied in accordance with Section 5.04(b).
Section 5.17 Performance and Enforcement of Certain Obligations.
(a) Promptly following a written request from the Enhancer or the Indenture
Trustee (with the written consent of the Enhancer), the Issuer, in its capacity as
owner of the Mortgage Loans, shall, with the written consent of the Enhancer, take
all such lawful action as the Indenture Trustee may request to cause the Issuer to
compel or secure the performance and observance by the Sellers and the Servicer, as
applicable, of each of their obligations to the Issuer under or in connection with
the Purchase Agreement and the Servicing Agreement, and to exercise any and all
rights, remedies, powers and privileges lawfully available to the Issuer under or in
connection with the Purchase Agreement and the Servicing Agreement to the extent and
in the manner directed by the Indenture Trustee, as pledgee of the Mortgage Loans,
including the transmission of notices of default on the part of the Sellers or the
Servicer thereunder and the institution of legal or administrative actions or
proceedings to compel or secure performance by the Sellers or the Servicer of each of
their obligations under the Purchase Agreement and the Servicing Agreement.
(b) If an Event of Default shall have occurred and be continuing, the Indenture
Trustee, as pledgee of the Mortgage Loans, subject to the rights of the Enhancer
under the Servicing Agreement, may, and at the direction (which direction shall be in
writing or by telephone (confirmed in writing promptly thereafter)) of the
Noteholders of 66 2/3% of the aggregate Note Balance of the Notes, shall, exercise
all rights, remedies, powers, privileges and claims of the Issuer against the Sellers
or the Servicer under or in connection with the Purchase Agreement and the Servicing
Agreement, including the right or power to take any action to compel or secure
performance or observance by the Sellers or the Servicer, as the case may be, of each
of their obligations to the Issuer thereunder and to give any consent, request,
notice, direction, approval, extension or waiver under the Purchase Agreement and the
Servicing Agreement, as the case may be, and any right of the Issuer to take such
action shall not be suspended. In connection therewith, as determined by the
Indenture Trustee, the Issuer shall take all actions necessary to effect the transfer
of the Mortgage Loans to the Indenture Trustee.
ARTICLE VI
The Indenture Trustee
Section 6.01 Duties of Indenture Trustee.
(a) If an Event of Default shall have occurred and be continuing, the Indenture
Trustee shall exercise the rights and powers vested in it by this Indenture and use
the same degree of care and skill in their exercise as a prudent Person would
exercise or use under the circumstances in the conduct of such Person's own affairs.
(b) Except during the continuance of an Event of Default:
(i) the Indenture Trustee undertakes to perform such duties and only such duties
as are specifically set forth in this Indenture and no implied covenants or
obligations shall be read into this Indenture against the Indenture Trustee;
and
(ii) in the absence of bad faith on its part, the Indenture Trustee may
conclusively rely, as to the truth of the statements and the correctness of
the opinions expressed therein, upon certificates, reports or opinions
furnished to the Indenture Trustee and conforming to the requirements of this
Indenture; provided, however, that the Indenture Trustee shall examine the
certificates, reports and opinions to determine whether or not they conform to
the requirements of this Indenture.
(c) The Indenture Trustee may not be relieved from liability for its own negligent
action, its own negligent failure to act or its own willful misconduct, except that:
(i) this paragraph does not limit the effect of Section 6.01(a);
(ii) the Indenture Trustee shall not be liable for any error of judgment made in
good faith by a Responsible Officer unless it is proved that the Indenture
Trustee was negligent in ascertaining the pertinent facts; and
(iii) the Indenture Trustee shall not be liable with respect to any action it takes
or omits to take in good faith in accordance with a direction received by it
pursuant to Section 5.11 or any direction from the Enhancer that the Enhancer
is entitled to give under any of the Basic Documents.
(d) The Indenture Trustee shall not be liable for interest on any money received
by it except as the Indenture Trustee may agree in writing with the Issuer.
(e) Money held in trust by the Indenture Trustee need not be segregated from other
funds except to the extent required by law or the terms of this Indenture or the
Trust Agreement.
(f) No provision of this Indenture shall require the Indenture Trustee to expend
or risk its own funds or otherwise incur financial liability in the performance of
any of its duties hereunder or in the exercise of any of its rights or powers, if it
shall have reasonable grounds to believe that repayment of such funds or adequate
indemnity against such risk or liability is not reasonably assured to it.
(g) Every provision of this Indenture relating to the conduct or affecting the
liability of or affording protection to the Indenture Trustee shall be subject to the
provisions of this Section and to the provisions of TIA.
(h) With respect to each Payment Date, on the Business Day following the related
Determination Date, the Indenture Trustee shall forward or cause to be forwarded by
mail, or other mutually agreed-upon method, to the Enhancer and the Servicer, a
statement setting forth, to the extent applicable, 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.
Section 6.02 Rights of Indenture Trustee.
(a) The Indenture Trustee may rely and shall be protected in acting or refraining
from acting in good faith upon any resolution, Officer's Certificate, opinion of
counsel, certificate of auditors, or any other certificate, statement, instrument,
report, notice, consent or other document believed by it to be genuine and to have
been signed or presented by the proper person. The Indenture Trustee need not
investigate any fact or matter stated in any such document.
(b) Before the Indenture Trustee acts or refrains from acting, it may require an
Officer's Certificate or an Opinion of Counsel. The Indenture Trustee shall not be
liable for any action it takes or omits to take in good faith in reliance on any such
Officer's Certificate or Opinion of Counsel.
(c) The Indenture Trustee may execute any of the trusts or powers hereunder or
perform any duties hereunder either directly or by or through agents or attorneys or
a custodian or nominee, and the Indenture Trustee shall not be responsible for any
misconduct or negligence on the part of, or for the supervision of, any such agent,
attorney, custodian or nominee appointed with due care by it hereunder.
(d) The Indenture Trustee shall not be liable for any action it takes or omits to
take in good faith which it believes to be authorized or within its rights or powers;
provided, however, that the Indenture Trustee's conduct does not constitute willful
misconduct, negligence or bad faith.
(e) The Indenture Trustee may consult with counsel, and the advice or opinion of
counsel with respect to legal matters relating to this Indenture and the Notes shall
be full and complete authorization and protection from liability in respect to any
action taken, omitted or suffered by it hereunder in good faith and in accordance
with the advice or opinion of such counsel.
(f) The Indenture Trustee shall not be personally liable for any action taken,
suffered or omitted by it in good faith and believed by it to be authorized or within
the discretion or rights or powers conferred upon it by this Indenture, unless it
shall be proved that the Indenture Trustee was negligent in ascertaining the
pertinent facts.
(g) Prior to the occurrence of an Event of Default hereunder, and after the curing
or waiver of all Events of Default that may have occurred, the Indenture Trustee
shall not be bound to make any investigation into the facts or matters stated in any
resolution, certificate, statement, instrument, opinion, report, notice, request,
consent, order, approval, bond or other paper or document, unless requested in
writing to do so by the Enhancer or the Noteholders representing a majority of the
aggregate Note Balance; provided, however, that if the payment within a reasonable
time to the Indenture Trustee of the costs, expenses or liabilities likely to be
incurred by it in the making of such investigation is, in the opinion of the
Indenture Trustee, not assured to the Indenture Trustee by the security afforded to
it by the terms of this Indenture, the Indenture Trustee may require indemnity
satisfactory to the Indenture Trustee against such cost, expense or liability as a
condition to taking any such action.
(h) The Indenture Trustee shall be under no obligation to exercise any of the
trusts or powers vested in it by this Indenture or to institute, conduct or defend
any litigation hereunder or in relation hereto at the request, order or direction of
any of the Enhancer or the Noteholders, pursuant to the provisions of this Indenture,
unless the Enhancer or the Noteholders shall have offered to the Indenture Trustee
reasonable security or indemnity against the costs, expenses and liabilities which
may be incurred therein or thereby; nothing contained herein shall, however, relieve
the Indenture Trustee of the obligation, upon the occurrence of an Event of Default
(which has not been cured or waived), to exercise such of the rights and powers
vested in it by this Indenture, and to use the same degree of care and skill in their
exercise as a prudent investor would exercise or use under the circumstances in the
conduct of such investor's own affairs.
Section 6.03 Individual Rights of Indenture Trustee. The Indenture Trustee in its
individual or any other capacity may become the owner or pledgee of Notes and may
otherwise deal with the Issuer or its Affiliates with the same rights it would have
if it were not Indenture Trustee. Any Note Registrar, co-registrar or co-paying
agent may do the same with like rights. However, the Indenture Trustee must comply
with Sections 6.11 and 6.12.
Section 6.04 Indenture Trustee's Disclaimer. The Indenture Trustee shall not be
(i) responsible for and makes no representation as to the validity or adequacy of this
Indenture or the Notes, (ii) accountable for the Issuer's use of the proceeds from
the Notes or (iii) responsible for any statement of the Issuer in this Indenture or
in any document issued in connection with the sale of the Notes or in the Notes,
other than the Indenture Trustee's certificate of authentication thereon.
Section 6.05 Notice of Event of Default. If an Event of Default shall occur and be
continuing, and if such Event of Default is known to a Responsible Officer of the
Indenture Trustee, then the Indenture Trustee shall give prompt notice thereof to the
Enhancer. The Indenture Trustee shall mail to each Noteholder notice of such Event
of Default within 90 days after it occurs. Except in the case of an Event of Default
with respect to the payment of principal of or interest on any Note, the Indenture
Trustee may withhold such notice if and so long as a committee of its Responsible
Officers in good faith determines that withholding such notice is in the interests of
the Noteholders.
Section 6.06 Reports by Indenture Trustee to Noteholders. The Indenture Trustee
shall deliver to each Noteholder such information as may be required to enable such
Noteholder to prepare its federal and state income tax returns. In addition, upon
Issuer Request, the Indenture Trustee shall promptly furnish such information
reasonably requested by the Issuer that is reasonably available to the Indenture
Trustee to enable the Issuer to perform its federal and state income tax reporting
obligations.
Section 6.07 Compensation and Indemnity. The Indenture Trustee shall be compensated
and indemnified by the Servicer in accordance with Section 6.06 of the Servicing
Agreement. All amounts owing the Indenture Trustee hereunder in excess of such
amount, as well as any amount owed to the Indenture Trustee in accordance with
Section 6.06 of the Servicing Agreement, to the extent the Servicer has failed to pay
such amount, shall be paid solely as provided in Section 3.05 hereof (subject to the
priorities set forth therein). The Indenture Trustee's compensation shall not be
limited by any law on compensation of a trustee of an express trust. The Issuer
shall reimburse the Indenture Trustee for all reasonable out-of-pocket expenses
incurred or made by it, including costs of collection, in addition to the
compensation for its services. Such expenses shall include the reasonable
compensation, expenses, disbursements and advances of the Indenture Trustee's agents,
counsel, accountants and experts. The Issuer shall indemnify the Indenture Trustee
against any and all loss, liability or expense (including attorneys' fees) incurred
by it in connection with the administration of this trust and the performance of its
duties hereunder. The Indenture Trustee shall notify the Issuer promptly of any
claim for which it may seek indemnity. Failure by the Indenture Trustee to so notify
the Issuer shall not relieve the Issuer of its obligations hereunder. The Issuer
shall defend any such claim, and the Indenture Trustee may have separate counsel and
the Issuer shall pay the fees and expenses of such counsel. The Issuer is not
obligated to reimburse any expense or indemnify against any loss, liability or
expense incurred by the Indenture Trustee through the Indenture Trustee's own willful
misconduct, negligence or bad faith.
The Issuer's payment obligations to the Indenture Trustee pursuant to this
Section 6.07 shall survive the discharge of this Indenture or the termination or
resignation of the Indenture Trustee. When the Indenture Trustee incurs expenses
after the occurrence of an Event of Default specified in clause (c) or (d) of the
definition thereof with respect to the Issuer, such expenses are intended to
constitute expenses of administration under Title 11 of the United States Code or any
other applicable federal or state bankruptcy, insolvency or similar law.
Section 6.08 Replacement of Indenture Trustee. No resignation or removal of the
Indenture Trustee and no appointment of a successor Indenture Trustee shall become
effective until the acceptance of appointment by the successor Indenture Trustee
pursuant to this Section 6.08. The Indenture Trustee may resign at any time by so
notifying the Issuer and the Enhancer. The Enhancer or the Noteholders of a majority
of the aggregate Note Balance of the Notes, 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
(d) the Indenture Trustee otherwise becomes incapable of fulfilling its duties
under the Basic Documents.
If the Indenture Trustee resigns or is removed or if a vacancy exists in the
office of the Indenture Trustee for any reason (the Indenture Trustee in such event
being referred to herein as the retiring Indenture Trustee), the Issuer shall
promptly appoint a successor Indenture Trustee with the consent of the Enhancer,
which consent shall not be unreasonably withheld. In addition, the Indenture Trustee
shall resign to avoid being directly or indirectly controlled by the Issuer.
A successor Indenture Trustee shall deliver a written acceptance of its
appointment to the retiring Indenture Trustee and to the Issuer. Thereupon, the
resignation or removal of the retiring Indenture Trustee shall become effective, and
the successor Indenture Trustee shall have all the rights, powers and duties of the
Indenture Trustee under this Indenture. The successor Indenture Trustee shall mail a
notice of its succession to the Noteholders. The retiring Indenture Trustee shall
promptly transfer all property held by it as Indenture Trustee to the successor
Indenture Trustee.
If a successor Indenture Trustee does not take office within 60 days after the
retiring Indenture Trustee resigns or is removed, then the retiring Indenture
Trustee, the Issuer or the Noteholders of a majority of aggregate Note Balance of the
Notes may petition any court of competent jurisdiction for the appointment of a
successor Indenture Trustee.
If the Indenture Trustee fails to comply with Section 6.11, any Noteholder may
petition any court of competent jurisdiction for the removal of the Indenture Trustee
and the appointment of a successor Indenture Trustee.
Notwithstanding the replacement of the Indenture Trustee pursuant to this
Section, the Issuer's obligations under Section 6.07 shall continue for the benefit
of the retiring Indenture Trustee.
Section 6.09 Successor Indenture Trustee by Xxxxxx. If the Indenture Trustee
consolidates with, merges or converts into, or transfers all or substantially all its
corporate trust business or assets to, another corporation or banking association,
then the resulting, surviving or transferee corporation without any further act shall
be the successor Indenture Trustee; provided, that such corporation or banking
association shall be otherwise qualified and eligible under Section 6.11. The
Indenture Trustee shall provide the Rating Agencies with written notice of any such
transaction occurring after the Closing Date.
If at the time of any such succession by merger, conversion or consolidation,
any of the Notes shall have been authenticated but not delivered, then any such
successor to the Indenture Trustee may adopt the certificate of authentication of any
predecessor trustee, and deliver such Notes so authenticated. If at such time any of
the Notes shall not have been authenticated, any successor to the Indenture Trustee
may authenticate such Notes either in the name of any predecessor hereunder or in the
name of the successor to the Indenture Trustee; and in all such cases, such
certificates shall have the full force that it is anywhere in the Notes or in this
Indenture provided that the certificate of the Indenture Trustee shall have.
Section 6.10 Appointment of Co-Indenture Trustee or Separate Indenture Trustee.
(a) Notwithstanding any other provisions of this Indenture, at any time, for the
purpose of meeting any legal requirement of any jurisdiction in which any part of the
Trust Estate may at such time be located, the Indenture Trustee shall have the power
and may execute and deliver all instruments to appoint one or more Persons to act as
a co-trustee or co-trustees, or separate trustee or separate trustees, of all or any
part of the Issuer, and to vest in such Person or Persons, in such capacity and for
the benefit of the Noteholders 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.
(d) Any separate trustee or co-trustee may at any time constitute the Indenture
Trustee, its agent or attorney-in-fact with full power and authority, to the extent
not prohibited by law, to do any lawful act under or in respect of this Indenture on
its behalf and in its name. If any separate trustee or co-trustee shall die, become
incapable of acting, resign or be removed, all of its estates, properties, rights,
remedies and trusts shall vest in and be exercised by the Indenture Trustee, to the
extent permitted by law, without the appointment of a new or successor trustee.
Section 6.11 Eligibility; Disqualification. The Indenture Trustee shall at all
times satisfy the requirements of TIAss.310(a). The Indenture Trustee shall have a
combined capital and surplus of at least $50,000,000 as set forth in its most recent
published annual report of condition and it or its parent shall have a long-term debt
rating of "A" or better by Xxxxx'x. The Indenture Trustee shall comply with TIAss.
310(b); provided, however, that there shall be excluded from the operation of TIAss.
310(b)(1) any indenture or indentures under which other securities of the Issuer are
outstanding if the requirements for such exclusion set forth in TIAss.310(b)(1) are
met.
Section 6.12 Preferential Collection of Claims Against Issuer. The Indenture
Trustee shall comply with TIAss.311(a), excluding any creditor relationship listed in
TIAss. 311(b). An Indenture Trustee that has resigned or been removed shall be
subject to TIAss.311(a) to the extent indicated.
Section 6.13 Representations and Warranties. The Indenture Trustee hereby
represents and warrants that:
(a) The Indenture Trustee is duly organized, validly existing and in good standing
as a national banking association with power and authority to own its properties and
to conduct its business as such properties are currently owned and such business is
currently conducted.
(b) The Indenture Trustee has the power and authority to execute and deliver this
Indenture and to carry out its terms; and the execution, delivery and performance of
this Indenture have been duly authorized by the Indenture Trustee by all necessary
corporate action.
(c) The consummation of the transactions contemplated by this Indenture and the
fulfillment of the terms hereof do not conflict with, result in any breach of any of
the terms and provisions of, or constitute (with or without notice or lapse of time)
a default under, the articles of organization or bylaws of the Indenture Trustee or
any agreement or other instrument to which the Indenture Trustee is a party or by
which it is bound.
(d) To the Indenture Trustee's best knowledge, there are no Proceedings or
investigations pending or threatened before any court, regulatory body,
administrative agency or other governmental instrumentality having jurisdiction over
the Indenture Trustee or its properties (A) asserting the invalidity of this
Indenture, (B) seeking to prevent the consummation of any of the transactions
contemplated by this Indenture or (C) seeking any determination or ruling that might
materially and adversely affect the performance by the Indenture Trustee of its
obligations under, or the validity or enforceability of, this Indenture.
(e) The Indenture Trustee does not have notice of any adverse claim (as such terms
are used in Section 8-302 of the UCC in effect in the State of Delaware) with respect
to the Mortgage Loans.
Section 6.14 Directions to Indenture Trustee. The Indenture Trustee is hereby
directed:
(a) to accept the pledge of the Mortgage Loans and hold the assets of the Trust in
trust for the Noteholders and the Enhancer;
(b) to authenticate and deliver the Notes substantially in the form prescribed by
Exhibit A in accordance with the terms of this Indenture;
(c) to execute the Hedge 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.
(b) Noteholders may communicate pursuant to TIAss. 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 TIAss. 312(c).
Section 7.03 Reports by Issuer.
(a) The Issuer shall:
(i) file with the Indenture Trustee, within 15 days after the Issuer is required
to file the same with the Commission, copies of the annual reports and the
information, documents and other reports (or copies of such portions of any of
the foregoing as the Commission may from time to time by rules and regulations
prescribe) that the Issuer may be required to file with the Commission
pursuant to Section 13 or 15(d) of the Exchange Act;
(ii) file with the Indenture Trustee and the Commission, in accordance with rules
and regulations prescribed from time to time by the Commission, such
additional information, documents and reports with respect to compliance by
the Issuer with the conditions and covenants of this Indenture as may be
required from time to time by such rules and regulations; and
(iii) supply to the Indenture Trustee (and the Indenture Trustee shall transmit by
mail to all Noteholders described in TIAss. 313(c)) such summaries of any
information, documents and reports required to be filed by the Issuer pursuant
to clauses (i) and (ii) of this Section 7.03(a) and by rules and regulations
prescribed from time to time by the Commission.
(b) Unless the Issuer otherwise determines, the fiscal year of the Issuer shall
end on December 31 of each year.
Section 7.04 Reports by Indenture Trustee. If required by TIAss.313(a), within 60
days after each January 1, beginning with January 1, 2007, the Indenture Trustee
shall make available to each Noteholder as required by TIAss. 313(c) and to the
Enhancer a brief report dated as of such date that complies with TIAss.313(a). The
Indenture Trustee also shall comply with TIAss. 313(b).
A copy of each report at the time of its distribution to Noteholders shall be
filed by the Indenture Trustee with the Commission, if required, and each stock
exchange, if any, on which the Notes are listed. The Issuer shall notify the
Indenture Trustee if and when the Notes are listed on any stock exchange.
Section 7.05 Exchange Act Reporting. In connection with the preparation and filing
of periodic reports by the Servicer pursuant to Article IV of the Servicing
Agreement, the Indenture Trustee shall timely provide to the Servicer (I) a list of
Holders as shown on the Note Register or Certificate Register as of the end of each
calendar year, (II) copies of all pleadings, other legal process and any other
documents relating to any claims, charges or complaints involving the Indenture
Trustee, as indenture trustee hereunder, or the Trust Estate that are received by the
Indenture Trustee, (III) notice of all matters that, to the actual knowledge of a
Responsible Officer of the Indenture Trustee, have been submitted to a vote of the
Holders, other than those matters that have been submitted to a vote of the Holders
at the request of the Depositor or the Servicer, and (IV) notice of any failure of
the Indenture Trustee to make any payment to the Holders as required pursuant to this
Indenture. The Indenture Trustee shall not have any liability with respect to the
Servicer's failure to properly prepare or file such periodic reports and the Servicer
shall not have any liability with respect to such failure resulting from or relating
to the Servicer's inability or failure to obtain any information not resulting from
the Servicer's own negligence or willful misconduct.
ARTICLE VIII
Accounts, Disbursements and Releases
Section 8.01 Collection of Money. Except as otherwise expressly provided herein,
the Indenture Trustee may demand payment or delivery of, and shall receive and
collect, directly and without intervention or assistance of any fiscal agent or other
intermediary, all money and other property payable to or receivable by the Indenture
Trustee pursuant to this Indenture. The Indenture Trustee shall apply all such money
received by it as provided in this Indenture. Except as otherwise expressly provided
in this Indenture, if any default occurs in the making of any payment or performance
under any agreement or instrument that is part of the Trust Estate, the Indenture
Trustee may take such action as may be appropriate to enforce such payment or
performance, including the institution and prosecution of appropriate Proceedings.
Any such action shall be without prejudice to any right to claim a Default or Event
of Default under this Indenture and any right to proceed thereafter as provided in
Article V.
Section 8.02 Trust Accounts.
(a) On or prior to the Closing Date, the Issuer shall cause the Indenture Trustee
to establish and maintain, in the name of the Indenture Trustee, for the benefit of
the Noteholders, the Certificate Paying Agent, on behalf of the Certificateholders,
and the Enhancer, the Note Payment Account as provided in Section 3.01 of this
Indenture.
(b) All monies deposited from time to time in the Note Payment Account pursuant to
the Servicing Agreement and all deposits therein pursuant to this Indenture are for
the benefit of the Noteholders, the Enhancer and the Certificate Paying Agent, on
behalf of the Certificateholders, and all investments made with such monies,
including all income or other gain from such investments, are for the benefit of the
Servicer as provided in Section 5.01 of the Servicing Agreement.
On each Payment Date, the Indenture Trustee shall distribute all amounts on
deposit in the Note Payment Account to the Noteholders in respect of the Notes and,
in its capacity as Certificate Paying Agent, to the Certificateholders from the
Distribution Account in the order of priority set forth in Section 3.05 (except as
otherwise provided in Section 5.04(b)) and in accordance with the Servicing
Certificate.
The Indenture Trustee shall invest any funds in the Note Payment Account in
Permitted Investments selected in writing by the Servicer maturing no later than the
Business Day preceding the next succeeding Payment Date (except that any investment
in the institution with which the Note Payment Account is maintained may mature on
such Payment Date) and shall not be sold or disposed of prior to the maturity. In
addition, such Permitted Investments shall not be purchased at a price in excess of
par. The Indenture Trustee shall have no liability whatsoever for investment losses
on Permitted Investments, if such investments are made in accordance with the
provisions of this Indenture and the Indenture Trustee is not the obligor under the
Permitted Investment.
Section 8.03 Officer's Certificate. The Indenture Trustee shall receive at least
seven days' notice when requested by the Issuer to take any action pursuant to
Section 8.05(a), accompanied by copies of any instruments to be executed, and the
Indenture Trustee shall also require, as a condition to such action, an Officer's
Certificate, in form and substance satisfactory to the Indenture Trustee, stating the
legal effect of any such action, outlining the steps required to complete the same,
and concluding that all conditions precedent to the taking of such action have been
complied with.
Section 8.04 Termination Upon Distribution to Noteholders. This Indenture and the
respective obligations and responsibilities of the Issuer and the Indenture Trustee
created hereby shall terminate upon the distribution to the Noteholders, the
Certificate Paying Agent on behalf of the Certificateholders and the Indenture
Trustee of all amounts required to be distributed pursuant to Article III and the
distribution to the Credit Enhancer of all amounts owing to it; provided, however,
that in no event shall the trust created hereby continue beyond the expiration of 21
years from the death of the survivor of the descendants of Xxxxxx X. Xxxxxxx, the
late ambassador of the United States to the Court of St. James's, living on the date
hereof.
Section 8.05 Release of Trust Estate.
(a) Subject to the payment of its fees, expenses and indemnification, the
Indenture Trustee may, and when required by the provisions of this Indenture or the
Servicing Agreement, shall, execute instruments to release property from the lien of
this Indenture, or convey the Indenture Trustee's interest in the same, in a manner
and under circumstances that are not inconsistent with the provisions of this
Indenture. No Person relying upon an instrument executed by the Indenture Trustee as
provided in Article VIII hereunder shall be bound to ascertain the Indenture
Trustee's authority, inquire into the satisfaction of any conditions precedent, or see
to the application of any monies.
(b) The Indenture Trustee shall, at such time as (i) there are no Notes
Outstanding, (ii) all sums due the Indenture Trustee pursuant to this Indenture have
been paid and (iii) all sums due the Enhancer have been paid and the Policy has been
returned to the Credit Enhancer, release any remaining portion of the Trust Estate
that secured the Notes from the lien of this Indenture.
(c) The Indenture Trustee shall release property from the lien of this Indenture
pursuant to this Section 8.05 only upon receipt of an Issuer Request accompanied by
an Officers' Certificate and a letter from the Enhancer stating that the Enhancer has
no objection to such request from the Issuer.
(d) The Indenture Trustee shall, at the request of the Issuer or the Depositor,
surrender the Policy to the Enhancer for cancellation, upon final payment of
principal of and interest on the Notes.
Section 8.06 Surrender of Notes Upon Final Payment. By acceptance of any Note, the
Noteholder thereof agrees to surrender such Note to the Indenture Trustee promptly,
prior to such Noteholder's receipt of the final payment thereon.
ARTICLE IX
Supplemental Indentures
Section 9.01 Supplemental Indentures Without Consent of Noteholders.
(a) Without the consent of the Noteholders of any Notes, but with prior notice to
the Rating Agencies and the prior written consent of the Enhancer (which consent
shall not be unreasonably withheld and so long as no Enhancer Default exists), the
Issuer and the Indenture Trustee, when authorized by an Issuer Request, at any time
and from time to time, may enter into one or more indentures supplemental hereto
(which shall conform to the provisions of the Trust Indenture Act as in force at the
date of the execution thereof), in form satisfactory to the Indenture Trustee, for
any of the following purposes:
(i) to correct or amplify the description of any property at any time subject to
the lien of this Indenture, or better to assure, convey and confirm unto the
Indenture Trustee any property subject or required to be subjected to the lien
of this Indenture, or to subject to the lien of this Indenture additional
property;
(ii) to evidence the succession, in compliance with the applicable provisions
hereof, of another Person to the Issuer, and the assumption by any such
successor of the covenants of the Issuer herein and in the Notes contained;
(iii) to add to the covenants of the Issuer, for the benefit of the Noteholders or
the Enhancer, or to surrender any right or power herein conferred upon the
Issuer;
(iv) to convey, transfer, assign, mortgage or pledge any property to or with the
Indenture Trustee;
(v) to cure any ambiguity, to correct any error or to correct or supplement any
provision herein or in any supplemental indenture that may be inconsistent
with any other provision herein or in any supplemental indenture;
(vi) to make any other provisions with respect to matters or questions arising
under this Indenture or in any supplemental indenture; provided, that such
action shall not materially and adversely affect the interests of the
Noteholders or the Enhancer (as evidenced by an Opinion of Counsel);
(vii) to evidence and provide for the acceptance of the appointment hereunder by a
successor trustee with respect to the Notes and to add to or change any of the
provisions of this Indenture as shall be necessary to facilitate the
administration of the trusts hereunder by more than one trustee, pursuant to
the requirements of Article VI; or
(viii) to modify, eliminate or add to the provisions of this Indenture to such extent
as shall be necessary to effect the qualification of this Indenture under TIA
or under any similar federal statute hereafter enacted and to add to this
Indenture such other provisions as may be expressly required by TIA;
provided, however, that no such supplemental indenture shall be entered into unless
the Indenture Trustee shall have received an Opinion of Counsel to the effect that
the execution of such supplemental indenture will not give rise to any material
adverse tax consequence to the Noteholders, 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:
(a) change the date of payment of any installment of principal of or interest on
any Note, or reduce the principal amount thereof or the Note Rate thereon, change the
provisions of this Indenture relating to the application of collections on, or the
proceeds of the sale of, the Trust Estate to payment of principal of or interest on
the Notes, or change any place of payment where, or the coin or currency in which,
any Note or the interest thereon is payable, or impair the right to institute suit
for the enforcement of the provisions of this Indenture requiring the application of
funds available therefor, as provided in Article V, to the payment of any such amount
due on the Notes on or after the respective due dates thereof;
(b) reduce the percentage of the Note Balances, the consent of the Noteholders of
which is required for any such supplemental indenture, or the consent of the
Noteholders of which is required for any waiver of compliance with certain provisions
of this Indenture or certain defaults hereunder and their consequences provided for
in this Indenture;
(c) modify or alter the provisions of the proviso to the definition of the term
"Outstanding" or modify or alter the exception in the definition of the term
"Noteholder";
(d) reduce the percentage of the aggregate Note Balance of the Notes required to
direct the Indenture Trustee to direct the Issuer to sell or liquidate the Trust
Estate pursuant to Section 5.04;
(e) modify any provision of this Section 9.02 except to increase any percentage
specified herein or to provide that certain additional provisions of this Indenture
or the other Basic Documents cannot be modified or waived without the consent of the
Noteholder of each Note affected thereby;
(f) modify any of the provisions of this Indenture in such manner as to affect the
calculation of the amount of any payment of interest or principal due on any Note on
any Payment Date (including the calculation of any of the individual components of
such calculation); or
(g) permit the creation of any lien ranking prior to or on a parity with the lien
of this Indenture with respect to any part of the Trust Estate or, except as
otherwise permitted or contemplated herein, terminate the lien of this Indenture on
any property at any time subject hereto or deprive the Noteholder of any Note of the
security provided by the lien of this Indenture; and provided further, that such
action shall not, as evidenced by an Opinion of Counsel, cause the Issuer to be
subject to an entity level tax or cause any Adverse REMIC Event.
The Indenture Trustee may in its discretion determine whether or not any Notes
would be affected by any supplemental indenture and any such determination shall be
conclusive upon the Noteholders of all Notes, whether theretofore or thereafter
authenticated and delivered hereunder. The Indenture Trustee shall not be liable for
any such determination made in good faith.
It shall not be necessary for any Act (as defined in Section 10.03 hereof) of
Noteholders under this Section 9.02 to approve the particular form of any proposed
supplemental indenture, but it shall be sufficient if such Act shall approve the
substance thereof.
Promptly after the execution by the Issuer and the Indenture Trustee of any
supplemental indenture pursuant to this Section 9.02, the Indenture Trustee shall
mail to the Noteholders of the Notes to which such amendment or supplemental
indenture relates a notice setting forth in general terms the substance of such
supplemental indenture. Any failure of the Indenture Trustee to mail such notice, or
any defect therein, shall not, however, in any way impair or affect the validity of
any such supplemental indenture.
Section 9.03 Execution of Supplemental Indentures. In executing, or permitting the
additional trusts created by, any supplemental indenture permitted by this Article IX
or the modification thereby of the trusts created by this Indenture, the Indenture
Trustee shall be entitled to receive and, subject to Sections 6.01 and 6.02, shall be
fully protected in relying upon, an Opinion of Counsel stating that the execution of
such supplemental indenture is authorized or permitted by this Indenture. The
Indenture Trustee may, but shall not be obligated to, enter into any such
supplemental indenture that affects the Indenture Trustee's own rights, duties,
liabilities or immunities under this Indenture or otherwise.
Section 9.04 Effect of Supplemental Indenture. Upon the execution of any
supplemental indenture pursuant to the provisions hereof, this Indenture shall be and
shall be deemed to be modified and amended in accordance therewith with respect to
the Notes affected thereby, and the respective rights, limitations of rights,
obligations, duties, liabilities and immunities under this Indenture of the Indenture
Trustee, the Issuer, 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.
ARTICLE X
Miscellaneous
Section 10.01 Compliance Certificates and Opinions, etc.
(a) Upon any application or request by the Issuer to the Indenture Trustee to take
any action under any provision of this Indenture, the Issuer shall furnish to the
Indenture Trustee and to the Enhancer (i) an Officer's Certificate stating that all
conditions precedent, if any, provided for in this Indenture relating to the proposed
action have been complied with and (ii) an Opinion of Counsel stating that in the
opinion of such counsel all such conditions precedent, if any, have been complied
with, except that, in the case of any such application or request as to which the
furnishing of such documents is specifically required by any provision of this
Indenture, no additional certificate or opinion need be furnished.
Every certificate or opinion with respect to compliance with a condition or
covenant provided for in this Indenture shall include:
(i) a statement that each signatory of such certificate or opinion has read or has
caused to be read such covenant or condition and the definitions herein
relating thereto;
(ii) a brief statement as to the nature and scope of the examination or
investigation upon which the statements or opinions contained in such
certificate or opinion are based;
(iii) a statement that, in the opinion of each such signatory, such signatory has
made such examination or investigation as is necessary to enable such
signatory to express an informed opinion as to whether or not such covenant or
condition has been complied with;
(iv) a statement as to whether, in the opinion of each such signatory, such
condition or covenant has been complied with; and
(v) if the signer of such certificate or opinion is required to be Independent,
the statement required by the definition of the term "Independent."
(b) (i) Prior to the deposit of any Collateral or other property or
securities with the Indenture Trustee that is to be made the basis for the release of
any property or securities subject to the lien of this Indenture, the Issuer shall,
in addition to any obligation imposed in Section 10.01(a) or elsewhere in this
Indenture, furnish to the Indenture Trustee an Officer's Certificate certifying or
stating the opinion of each person signing such certificate as to the fair value
(within 90 days of such deposit) to the Issuer of the Collateral or other property or
securities to be so deposited.
(ii) Whenever the Issuer is required to furnish to the Indenture Trustee an
Officer's Certificate certifying or stating the opinion of any signer thereof
as to the matters described in clause (i) above, the Issuer shall also deliver
to the Indenture Trustee an Independent Certificate as to the same matters, if
the fair value to the Issuer of the securities to be so deposited and of all
other such securities made the basis of any such withdrawal or release since
the commencement of the then-current fiscal year of the Issuer, as set forth
in the certificates delivered pursuant to clause (i) above and this clause
(ii), is 10% or more of the aggregate Note Balance of the Notes, but such a
certificate need not be furnished with respect to any securities so deposited,
if the fair value thereof to the Issuer as set forth in the related Officer's
Certificate is less than $25,000 or less than one percent of the aggregate
Note Balance of the Notes.
(iii) Whenever any property or securities are to be released from the lien of this
Indenture, the Issuer shall furnish to the Indenture Trustee an Officer's
Certificate certifying or stating the opinion of each person signing such
certificate as to the fair value (within 90 days of such release) of the
property or securities proposed to be released and stating that in the opinion
of such person the proposed release will not impair the security under this
Indenture in contravention of the provisions hereof.
(iv) Whenever the Issuer is required to furnish to the Indenture Trustee an
Officer's Certificate certifying or stating the opinion of any signer thereof
as to the matters described in clause (iii) above, the Issuer shall also
furnish to the Indenture Trustee an Independent Certificate as to the same
matters if the fair value of the property or securities and of all other
property, other than property as contemplated by clause (v) below or
securities released from the lien of this Indenture since the commencement of
the then-current calendar year, as set forth in the certificates required by
clause (iii) above and this clause (iv), equals 10% or more of the aggregate
Note Balance of the Notes, but such certificate need not be furnished in the
case of any release of property or securities if the fair value thereof as set
forth in the related Officer's Certificate is less than $25,000 or less than
one percent of the aggregate Note Balance of the Notes.
(v) Notwithstanding the foregoing, this Section 10.01(b) shall not apply to (A)
collection upon, sales or other dispositions of the Mortgage Loans as and to
the extent permitted or required by the Basic Documents or (B) the making of
cash payments out of the Note Payment Account as and to the extent permitted
or required by the Basic Documents, so long as the Issuer shall deliver to the
Indenture Trustee every six months, commencing December 31, 2006, an Officer's
Certificate of the Issuer stating that all the dispositions of Collateral
described in clauses (A) or (B) above that occurred during the preceding six
calendar months (or such longer period, in the case of the first such
Officer's Certificate) were permitted or required by the Basic Documents and
that the proceeds thereof were applied in accordance with the Basic Documents.
Section 10.02 Form of Documents Delivered to Indenture Trustee.
In any case where several matters are required to be certified by, or covered
by an opinion of, any specified Person, it is not necessary that all such matters be
certified by, or covered by the opinion of, only one such Person, or that they be so
certified or covered by only one document, but one such Person may certify or give an
opinion with respect to some matters and one or more other such Persons as to other
matters, and any such Person may certify or give an opinion as to such matters in one
or several documents.
Any certificate or opinion of an Authorized Officer of the Issuer may be
based, insofar as it relates to legal matters, upon a certificate or opinion of, or
representations by, counsel, unless such officer knows, or in the exercise of
reasonable care should know, that the certificate or opinion or representations with
respect to the matters upon which his certificate or opinion is based are erroneous.
Any such certificate of an Authorized Officer or Opinion of Counsel may be based,
insofar as it relates to factual matters, upon a certificate or opinion of, or
representations by, an officer or officers of any Seller or the Issuer, stating that
the information with respect to such factual matters is in the possession of any
Seller or the Issuer, unless such counsel knows, or in the exercise of reasonable
care should know, that the certificate or opinion or representations with respect to
such matters are erroneous.
Where any Person is required to make, give or execute two or more
applications, requests, consents, certificates, statements, opinions or other
instruments under this Indenture, they may, but need not, be consolidated and form
one instrument.
Whenever in this Indenture, in connection with any application or certificate
or report to the Indenture Trustee, it is provided that the Issuer shall deliver any
document as a condition of the granting of such application, or as evidence of the
Issuer's compliance with any term hereof, it is intended that the truth and accuracy,
at the time of the granting of such application or at the effective date of such
certificate or report (as the case may be), of the facts and opinions stated in such
document shall in such case be conditions precedent to the right of the Issuer to
have such application granted or to the sufficiency of such certificate or report.
The foregoing shall not, however, be construed to affect the Indenture Trustee's
right to rely upon the truth and accuracy of any statement or opinion contained in
any such document as provided in Article VI.
Section 10.03 Acts of Noteholders.
(a) Any request, demand, authorization, direction, notice, consent, waiver or
other action provided by this Indenture to be given or taken by Noteholders may be
embodied in and evidenced by one or more instruments of substantially similar tenor
signed by such Noteholders in person or by agents duly appointed in writing; and
except as herein otherwise expressly provided such action shall become effective when
such instrument or instruments are delivered to the Indenture Trustee, and, where it
is hereby expressly required, to the Issuer. Such instrument or instruments (and the
action embodied therein and evidenced thereby) are herein sometimes referred to as
the "Act" of the Noteholders signing such instrument or instruments. Proof of
execution of any such instrument or of a writing appointing any such agent shall be
sufficient for any purpose of this Indenture and (subject to Section 6.01) conclusive
in favor of the Indenture Trustee and the Issuer, if made in the manner provided in
this Section 10.03.
(b) The fact and date of the execution by any person of any such instrument or
writing may be proved in any manner that the Indenture Trustee deems sufficient.
(c) The ownership of Notes shall be proved by the Note Register.
(d) Any request, demand, authorization, direction, notice, consent, waiver or
other action by the Noteholder of any Note shall bind the Noteholder of every Note
issued upon the registration thereof or in exchange therefor or in lieu thereof, in
respect of anything done, omitted or suffered to be done by the Indenture Trustee or
the Issuer in reliance thereon, whether or not notation of such action is made upon
such Note.
Section 10.04 Notices, etc., to Indenture Trustee, Issuer, Enhancer and Rating
Agencies. Any request, demand, authorization, direction, notice, consent, waiver or
Act of Noteholders or other documents provided or permitted by this Indenture shall
be in writing and if such request, demand, authorization, direction, notice, consent,
waiver or Act of Noteholders is to be made upon, given or furnished to or filed with:
(a) the Indenture Trustee by any Noteholder or by the Issuer shall be sufficient
for every purpose hereunder if made, given, furnished or filed in writing to or with
the Indenture Trustee at its Corporate Trust Office with a copy to JPMorgan Chase
Bank, National Association, PostalCodeStreet227 X. Xxxxxx Street, PostalCodeChicago,
PostalCodeIllinois PostalCode60606. The Indenture Trustee shall promptly transmit any
notice received by it from the Noteholders to the Issuer,
(b) the Issuer by the Indenture Trustee or by any Noteholder shall be sufficient
for every purpose hereunder if in writing and mailed first-class, postage prepaid to
the Issuer addressed to: GMACM Home Equity Loan Trust 2006-HE3, in care of the Owner
Trustee, or at any other address previously furnished in writing to the Indenture
Trustee by the Issuer. The Issuer shall promptly transmit any notice received by it
from the Noteholders to the Indenture Trustee, or
(c) the Enhancer by the Issuer, the Indenture Trustee or by any Noteholders shall
be sufficient for every purpose hereunder to in writing and mailed, first-class
postage pre-paid, or personally delivered or telecopied to: Financial Guaranty
Insurance Company, 000 Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: Structured
Finance Surveillance (GMACM Home Equity Loan Trust 2006-HE3), telecopier number (212)
312-3220. The Enhancer shall promptly transmit any notice received by it from the
Issuer, the Indenture Trustee or the Noteholders to the Issuer or Indenture Trustee,
as the case may be.
Notices required to be given to the Rating Agencies by the Issuer, the
Indenture Trustee or the Owner Trustee shall be in writing, personally delivered or
mailed by certified mail, return receipt requested, to (i) in the case of Moody's, at
the following address: Xxxxx'x Investors Service, Inc., ABS Monitoring Department,
00 Xxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000 and (ii) in the case of Standard & Poor's,
at the following address: Standard & Poor's, 00 Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx
00000-0003, Attention: Asset Backed Surveillance Department; or, as to each of the
foregoing Persons, at such other address as shall be designated by written notice to
the other foregoing Persons.
Section 10.05 Notices to Noteholders; Waiver. Where this Indenture provides for 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.
The provisions of XXXxx.xx. 310 through 317 that impose duties on any Person
(including the provisions automatically deemed included herein unless expressly
excluded by this Indenture) are a part of and govern this Indenture, whether or not
physically contained herein.
Section 10.08 Effect of Headings. The Article and Section headings herein are for
convenience only and shall not affect the construction hereof.
Section 10.09 Successors and Assigns. All covenants and agreements in this Indenture
and the Notes by the Issuer shall bind its successors and assigns, whether so
expressed or not. All agreements of the Indenture Trustee in this Indenture shall
bind its successors, co-trustees and agents.
Section 10.10 Severability. In case any provision in this Indenture or in the Notes
shall be held invalid, illegal or unenforceable, the validity, legality, and
enforceability of the remaining provisions hereof shall not in any way be affected or
impaired thereby.
Section 10.11 Benefits of Indenture. Nothing in this Indenture or in the Notes,
express or implied, shall give to any Person, other than the parties hereto and their
successors hereunder, and the Noteholders, the Enhancer, and any other party secured
hereunder, and any other Person with an ownership interest in any part of the Trust
Estate, any benefit or any legal or equitable right, remedy or claim under this
Indenture. The Enhancer shall be a third party beneficiary of this Indenture.
Section 10.12 Legal Holidays. In any case where the date on which any payment is due
shall not be a Business Day, then (notwithstanding any other provision of the Notes
or this Indenture) payment need not be made on such date, but may be made on the next
succeeding Business Day with the same force and effect as if made on the date on
which nominally due, and no interest shall accrue for the period from and after any
such nominal date.
Section 10.13 GOVERNING LAW. THIS AGREEMENT AND THE NOTES SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO THE
CONFLICT OF LAW PRINCIPLES THEREOF, OTHER THAN SECTIONS 5-1401 AND 5-1402 OF THE NEW
YORK GENERAL OBLIGATIONS LAW, AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES
HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.
Section 10.14 Counterparts. This Indenture may be executed in any number of
counterparts, each of which so executed shall be deemed to be an original, but all
such counterparts shall together constitute but one and the same instrument.
Section 10.15 Recording of Indenture. If this Indenture is subject to recording in
any appropriate public recording offices, such recording is to be effected by the
Issuer and at its expense accompanied by an Opinion of Counsel (which counsel shall
be reasonably acceptable to the Indenture Trustee) to the effect that such recording
is necessary either for the protection of the Noteholders or any other Person secured
hereunder or for the enforcement of any right or remedy granted to the Indenture
Trustee under this Indenture.
Section 10.16 Issuer Obligation. No recourse may be taken, directly or indirectly,
with respect to the obligations of the Issuer, the Owner Trustee or the Indenture
Trustee on the Notes or under this Indenture or any certificate or other writing
delivered in connection herewith or therewith, against (i) the Indenture Trustee or
the Owner Trustee in its individual capacity, (ii) any owner of a beneficial interest
in the Issuer or (iii) any partner, owner, beneficiary, agent, officer, director,
employee or agent of the Indenture Trustee or the Owner Trustee in its individual
capacity, any holder of a beneficial interest in the Issuer, the Owner Trustee or the
Indenture Trustee or of any successor or assign of the Indenture Trustee or the Owner
Trustee in its individual capacity, except as any such Person may have expressly
agreed (it being understood that the Indenture Trustee and the Owner Trustee have no
such obligations in their respective individual capacities), and except that any such
partner, owner or beneficiary shall be fully liable, to the extent provided by
applicable law, for any unpaid consideration for stock, unpaid capital contribution
or failure to pay any installment or call owing to such entity. For all purposes of
this Indenture, in the performance of any duties or obligations of the Issuer
hereunder, the Owner Trustee shall be subject to, and entitled to the benefits of,
the terms and provisions of Articles VI, VII and VIII of the Trust Agreement.
Section 10.17 No Petition. The Indenture Trustee, by entering into this Indenture,
and each Noteholder, by its acceptance of a Note, hereby covenant and agree that they
will not at any time institute against the Depositor or the Issuer, or join in any
institution against the Depositor or the Issuer of, any bankruptcy, reorganization,
arrangement, insolvency or liquidation proceedings, or other proceedings under any
United States federal or state bankruptcy or similar law in connection with any
obligations relating to the Notes, this Indenture or any of the other Basic Documents.
Section 10.18 Inspection. The Issuer agrees that, on reasonable prior notice, it
shall permit any representative of the Indenture Trustee, during the Issuer's normal
business hours, to examine all the books of account, records, reports and other
papers of the Issuer, to make copies and extracts therefrom, to cause such books to
be audited by Independent certified public accountants, and to discuss the Issuer's
affairs, finances and accounts with the Issuer's officers, employees, and Independent
certified public accountants, all at such reasonable times and as often as may be
reasonably requested. The Indenture Trustee shall and shall cause its
representatives to hold in confidence all such information except to the extent
disclosure may be required by law (and all reasonable applications for confidential
treatment are unavailing) and except to the extent that the Indenture Trustee may
reasonably determine that such disclosure is consistent with its obligations
hereunder.
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 Corporation 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 ss.1.860F-4(d) and Treasury regulations
ss.301.6231(a)(7)-1. The REMIC Administrator, on behalf of the Tax Matters Partner,
shall (i) act on behalf of each REMIC in relation to any tax matter or controversy
involving the Trust Estate and (ii) represent the Trust Estate in any administrative
or judicial proceeding relating to an examination or audit by any governmental taxing
authority with respect thereto. The legal expenses, including without limitation
attorneys' or accountants' fees, and costs of any such proceeding and any liability
resulting therefrom shall be expenses of the Trust Estate and the REMIC Administrator
shall be entitled to reimbursement therefor out of amounts attributable to the
Mortgage Loans on deposit in the Custodial Account unless such legal expenses and
costs are incurred by reason of the REMIC Administrator's willful misfeasance, bad
faith or gross negligence.
(d) The REMIC Administrator shall prepare or cause to be prepared all of the Tax
Returns that it determines are required with respect to each REMIC created hereunder
and, if approval therefore is received from the applicable District Director of the
Internal Revenue Service, shall sign and file such returns in a timely manner and,
otherwise, shall, shall deliver such Tax Returns in a timely manner to the Owner
Trustee, if the Owner Trustee is required to sign such returns in accordance with
Section 5.03 of the Trust Agreement, and shall sign (if the Owner Trustee is not so
required) and file such Tax Returns in a timely manner. The expenses of preparing
such returns shall be borne by the REMIC Administrator without any right of
reimbursement therefor. The REMIC Administrator agrees to indemnify and hold
harmless the Owner Trustee with respect to any tax or liability arising from the
Owner Trustee's signing of Tax Returns that contain errors or omissions. The
Indenture Trustee and Servicer shall promptly provide the REMIC Administrator with
such information as the REMIC Administrator may from time to time request for the
purpose of enabling the REMIC Administrator to prepare Tax Returns.
(e) The REMIC Administrator shall provide (i) to any Transferor of a Class R
Certificate such information as is necessary for the application of any tax relating
to the transfer of a Class R Certificate to any Person who is not a Permitted
Transferee, (ii) to the Indenture Trustee, and the Indenture Trustee shall forward to
the Noteholders and the Certificateholders, such information or reports as are
required by the Code or the REMIC Provisions including reports relating to interest,
original issue discount and market discount or premium (using the Prepayment
Assumption) and (iii) to the Internal Revenue Service the name, title, address and
telephone number of the person who will serve as the representative of each REMIC.
(f) The Servicer and the REMIC Administrator shall take such actions and shall
cause each REMIC created hereunder to take such actions as are reasonably within the
Servicer's or the REMIC Administrator's control and the scope of its duties more
specifically set forth herein as shall be necessary or desirable to maintain the
status of each REMIC as a REMIC under the REMIC Provisions (and the Indenture Trustee
shall assist the Servicer and the REMIC Administrator, to the extent reasonably
requested by the Servicer and the REMIC Administrator to do so). The Servicer and
the REMIC Administrator shall not knowingly or intentionally take any action, cause
the Trust Estate to take any action or fail to take (or fail to cause to be taken)
any action reasonably within their respective control that, under the
REMIC Provisions, if taken or not taken, as the case may be, could (i) endanger the
status of any portion of any of the REMICs as a REMIC or (ii) result in the
imposition of a tax upon any of the REMICs (including but not limited to the tax on
prohibited transactions as defined in Section 860F(a)(2) of the Code and the tax on
contributions to a REMIC set forth in Section 860G(d) of the Code) (either such
event, in the absence of an Opinion of Counsel or the indemnification referred to in
this sentence, an "Adverse REMIC Event") unless the Servicer or the
REMIC Administrator, as applicable, has received an Opinion of Counsel (at the expense
of the party seeking to take such action or, if such party fails to pay such expense,
and the Servicer or the REMIC Administrator, as applicable, determines that taking
such action is in the best interest of the Trust Estate and the Noteholders and the
Certificateholders, at the expense of the Trust Estate, but in no event at the
expense of the Servicer, the REMIC Administrator, the Owner Trustee or the Indenture
Trustee) to the effect that the contemplated action will not, with respect to each
REMIC created hereunder, endanger such status or, unless the Servicer, the
REMIC Administrator or both, as applicable, determine in its or their sole discretion
to indemnify the Trust Estate against the imposition of such a tax, result in the
imposition of such a tax. Wherever in this Agreement a contemplated action may not be
taken because the timing of such action might result in the imposition of a tax on
the Trust Estate, or may only be taken pursuant to an Opinion of Counsel that such
action would not impose a tax on the Trust Estate, such action may nonetheless be
taken provided that the indemnity given in the preceding sentence with respect to any
taxes that might be imposed on the Trust Estate has been given and that all other
preconditions to the taking of such action have been satisfied. The Indenture
Trustee shall not take or fail to take any action (whether or not authorized
hereunder) as to which the Servicer or the REMIC Administrator, as applicable, has
advised it in writing that it has received an Opinion of Counsel to the effect that
an Adverse REMIC Event could occur with respect to such action. In addition, prior
to taking any action with respect to any of the REMICs created hereunder or any
related assets thereof, or causing any of the REMICs to take any action, which is not
expressly permitted under the terms of this Agreement, the Indenture Trustee will
consult with the Servicer or the REMIC Administrator, as applicable, or its designee,
in writing, with respect to whether such action could cause an Adverse REMIC Event to
occur with respect to any of the REMICs, and the Indenture Trustee shall not take any
such action or cause either REMIC to take any such action as to which the Servicer or
the REMIC Administrator, as applicable, has advised it in writing that an Adverse
REMIC Event could occur. The Servicer or the REMIC Administrator, as applicable, may
consult with counsel to make such written advice, and the cost of same shall be borne
by the party seeking to take the action not expressly permitted by this Agreement,
but in no event at the expense of the Servicer or the REMIC Administrator. At all
times as may be required by the Code, the Servicer will to the extent within its
control and the scope of its duties more specifically set forth herein, maintain
substantially all of the assets of each REMIC created hereunder as "qualified
mortgages" as defined in Section 860G(a)(3) of the Code and "permitted investments"
as defined in Section 860G(a)(5) of the Code.
(g) In the event that any tax is imposed on "prohibited transactions" of any of
the REMICs created hereunder as defined in Section 860F(a)(2) of the Code, on "net
income from foreclosure property" of any of the REMICs as defined in Section 860G(c)
of the Code, on any contributions to any of the REMICs after the Startup Day therefor
pursuant to Section 860G(d) of the Code, or any other tax is imposed by the Code or
any applicable provisions of state or local tax laws, such tax shall be charged (i)
to the Servicer, if such tax arises out of or results from a breach by the Servicer
of any of its obligations under this Agreement or the Servicer has in its sole
discretion determined to indemnify the Trust Estate against such tax, (ii) to the
Indenture Trustee, if such tax arises out of or results from a breach by the Trustee
of any of its obligations under this Article XI, or (iii) otherwise against amounts
on deposit in the Custodial Account and on the Payment Date(s) following such
reimbursement the aggregate of such taxes shall be allocated in reduction of the
accrued interest due on each Class entitled thereto on a pro rata basis.
(h) The Indenture Trustee and the Servicer shall, for federal income tax purposes,
maintain books and records with respect to each REMIC created hereunder on a calendar
year and on an accrual basis or as otherwise may be required by the REMIC Provisions.
(i) Following the Startup Day, neither the Servicer nor the Indenture Trustee
shall accept any contributions of assets to any of the REMICs created hereunder
unless (subject to Section 11.01(f)) the Servicer and the Indenture Trustee shall
have received an Opinion of Counsel (at the expense of the party seeking to make such
contribution) to the effect that the inclusion of such assets in such REMIC will not
cause any of the REMICs to fail to qualify as a REMIC at any time that any Notes or
Certificates are outstanding or subject any of the REMICs to any tax under the
REMIC Provisions or other applicable provisions of federal, state and local law or
ordinances.
(j) Neither the Servicer nor the Trustee shall (subject to Section 11.01(f)) enter
into any arrangement by which any of the REMICs created hereunder will receive a fee
or other compensation for services nor permit any of the REMICs to receive any income
from assets other than "qualified mortgages" as defined in Section 860G(a)(3) of the
Code or "permitted investments" as defined in Section 860G(a)(5) of the Code.
(k) Solely for the purposes of Section 1.860G-1(a)(4)(iii) of the Treasury
Regulations, the "latest possible maturity date" by which the Certificate Principal
Balance of each Class of Notes and Certificates representing a regular interest in
the applicable REMIC is the Final Payment Date.
(l) Within 30 days after the Closing Date, the REMIC Administrator shall prepare
and file with the Internal Revenue Service Form 8811, "Information Return for Real
Estate Mortgage Investment Conduits (REMIC) and Issuers of Collateralized Debt
Obligations" for each REMIC created hereunder.
(m) Neither the Indenture Trustee nor the Servicer shall sell, dispose of or
substitute for any of the Mortgage Loans (except in connection with (i) the default,
imminent default or foreclosure of a Mortgage Loan, including but not limited to, the
acquisition or sale of a Mortgaged Property acquired by deed in lieu of foreclosure,
(ii) the bankruptcy of any of the REMICs created hereunder, (iii) the termination of
the applicable REMIC pursuant to Section 8.02 of the Trust Agreement or (iv) a
purchase of Mortgage Loans pursuant to the Purchase Agreement) nor acquire any assets
for any of the REMICs, nor sell or dispose of any investments in the Custodial
Account or the Payment Account for gain nor accept any contributions to any of the
REMICs after the Closing Date unless it has received an Opinion of Counsel that such
sale, disposition, substitution or acquisition will not (a) affect adversely the
status of any of the REMICs as a REMIC or (b) unless the Servicer has determined in
its sole discretion to indemnify the Trust Estate against such tax, cause any
REMIC to be subject to a tax on "prohibited transactions" or "contributions" pursuant
to the REMIC Provisions.
(n) The Indenture Trustee will apply for 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.
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.
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 Corporation, 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.
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.
IN WITNESS WHEREOF, the Issuer and the Indenture Trustee have caused their
names to be signed hereto by their respective officers thereunto duly authorized, all
as of the day and year first above written.
GMACM HOME EQUITY LOAN TRUST 2006-HE3, as
Issuer
By: WILMINGTON TRUST COMPANY, not in its
individual capacity but solely as
Owner Trustee
By: _______________________________
Name:
Title:
JPMORGAN CHASE BANK, NATIONAL ASSOCIATION,
as Indenture Trustee
By:_______________________________
Name:
Title:
JPMORGAN CHASE BANK, NATIONAL
ASSOCIATION
hereby accepts appointment as Paying
Agent pursuant to Section 3.03
hereof
and as Note Registrar pursuant to
Section
4.02 hereof.
By: ___________________________________
Name:
Title:
Signatures and Seals
STATE OF _______________ )
) ss.:
COUNTY OF _____________ )
On this ___ day of August 2006, before me personally appeared ____________, to
me known, who being by me duly sworn, did depose and say, that he/she resides at
_____________, that he/she is the ____________ of Wilmington Trust Company, the Owner
Trustee, one of the corporations described in and which executed the above
instrument; that he/she knows the seal of said corporation; that the seal affixed to
said instrument is such corporate seal; that it was so affixed by order of the Board
of Directors of said corporation; and that he/she signed his/her name thereto by like
order.
____________________________________
Notary Public
Acknowledgements
STATE OF _______________ )
) ss.:
COUNTY OF _____________ )
On this ___ day of August 2006, before me personally appeared __________, to
me known, who being by me duly sworn, did depose and say, that he/she resides at
_____________; that he/she is the ___________ of JPMorgan Chase Bank, National
Association as Indenture Trustee, one of the corporations described in and which
executed the above instrument; that he/she knows the seal of said corporation; that
the seal affixed to said instrument is such corporate seal; that it was so affixed by
order of the Board of Directors of said corporation; and that he/she signed his/her
name thereto by like order.
_______________________________
Notary Public
NOTORIAL SEAL
EXHIBIT A
FORM OF NOTES
UNLESS THIS NOTE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST
COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE ISSUER OR ITS AGENT FOR REGISTRATION OF
TRANSFER, EXCHANGE OR PAYMENT, AND ANY NOTE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO.
OR IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY
PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY
OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN
INTEREST HEREIN.
THE PRINCIPAL OF THIS NOTE IS PAYABLE IN INSTALLMENTS AS SET FORTH HEREIN. ACCORDINGLY, THE
OUTSTANDING PRINCIPAL AMOUNT OF THIS NOTE AT ANY TIME MAY BE LESS THAN THE AMOUNT SHOWN ON
THE FACE HEREOF.
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS NOTE IS A "REGULAR INTEREST" IN A "REAL
ESTATE MORTGAGE INVESTMENT CONDUIT" AS THOSE TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS
860G AND 860D OF THE INTERNAL REVENUE CODE OF 1986 (THE "CODE").
THIS NOTE DOES NOT REPRESENT AN INTEREST IN OR OBLIGATION OF THE SELLERS, THE DEPOSITOR, THE
SERVICER, THE INDENTURE TRUSTEE, THE OWNER TRUSTEE OR GMAC MORTGAGE GROUP, INC. OR ANY OF
THEIR RESPECTIVE AFFILIATES, EXCEPT AS EXPRESSLY PROVIDED IN THE INDENTURE OR THE OTHER
BASIC DOCUMENTS.
THE HOLDER OF THIS NOTE IS DEEMED TO HAVE REPRESENTED THAT THE ACQUISITION OF THIS NOTE BY
THE HOLDER DOES NOT CONSTITUTE OR GIVE RISE TO A PROHIBITED TRANSACTION UNDER SECTION 406 OF
ERISA OR SECTION 4975 OF THE CODE, FOR WHICH NO STATUTORY, REGULATORY OR ADMINISTRATIVE
EXEMPTION IS AVAILABLE.
GMACM HOME EQUITY LOAN TRUST 2006-HE3
GMACM Home Equity Loan-Backed Note, Class A-[ ]
Registered Initial Note Balance:
$_________
No. A-[ ]-__ Note Rate:
[Variable][Fixed]
CUSIP NO. _________
GMACM Home Equity Loan Trust 2006-HE3, a statutory trust duly organized and existing
under the laws of the State of Delaware (herein referred to as the "Issuer"), for value
received, hereby promises to pay to Cede & Co. or its registered assigns, the principal sum
of __________________dollars ($_________), payable on each Payment Date in an amount equal
to the pro rata portion allocable hereto (based on the Initial Note Balance specified above
and the Initial Note Balance of all Class A-__ Notes) of the aggregate amount, if any,
payable from the Note Payment Account in respect of principal of the Class A Notes (the
"Notes") pursuant to Section 3.05 of the indenture dated as of August 30, 2006 (the
"Indenture"), between the Issuer and JPMorgan Chase Bank, National Association, as indenture
trustee (the "Indenture Trustee"); provided, however, provided however, the entire unpaid
principal amount of this Note shall be due and payable on the Payment Date occurring in
October 2036, in each case, to the extent not previously paid on a prior Payment Date.
Capitalized terms used herein that are not otherwise defined shall have the meanings
ascribed thereto in Appendix A to the Indenture.
Interest on the Notes will be paid monthly on each Payment Date at the Note Rate for
the related Interest Period subject to limitations that may result in Interest Shortfalls
(as further described in the Indenture). Interest on this Note will accrue for each Payment
Date from the most recent Payment Date on which interest has been paid (in the case of the
first Payment Date, from the Closing Date) to but excluding such Payment Date. Interest
will be computed on the basis of the actual number of days in each Interest Period and a
year assumed to consist of 360 days.
Principal of and interest on this Note are payable in such coin or currency of the
United States of America as at the time of payment is legal tender for payment of public and
private debts. All payments made by the Issuer with respect to this Note shall be applied
first to interest due and payable on this Note as provided above and then to the unpaid
principal of this Note.
Unless the certificate of authentication hereon has been executed by the Indenture
Trustee whose name appears below by manual signature, this Note shall not be entitled to any
benefit under the Indenture, or be valid or obligatory for any purpose.
This Note is one of a duly authorized issue of Notes of the Issuer, designated as its
GMACM Home Equity Loan-Backed Notes, Series 2006-HE3 (the "Series 2006-HE3 Notes"), all
issued under the Indenture, to which Indenture and all indentures supplemental thereto
reference is hereby made for a statement of the respective rights and obligations thereunder
of the Issuer, the Indenture Trustee and the Noteholders of the Series 2006-HE3 Notes. The
Series 2006-HE3 Notes are subject to all terms of the Indenture.
The Series 2006-HE3 Notes (the "Notes") are and will be equally and ratably secured
by the collateral pledged as security therefor as provided in the Indenture.
This Note is entitled to the benefits of an irrevocable and unconditional financial
guaranty insurance policy issued by Financial Guaranty Insurance Company.
Principal of and interest on this Note will be payable on each Payment Date,
commencing on September 25, 2006, as described in the Indenture. "Payment Date" means the
twenty-fifth day of each month, or, if any such date is not a Business Day, then the next
succeeding Business Day.
Unless an Early Amortization Event (as defined in the Indenture) shall have occurred
and be continuing, it is expected that the entire unpaid principal amount of this Note shall
be due and payable on the related Targeted Final Payment Date in accordance with the terms
of the Indenture, to the extent not previously paid on a prior Payment Date.
Notwithstanding the foregoing, the entire unpaid principal amount of this Note shall be due
and payable in full on the Payment Date in October 2036 pursuant to the Indenture, to the
extent not previously paid on a prior Payment Date. Notwithstanding the foregoing, if an
Event of Default shall have occurred and be continuing, then the Indenture Trustee, the
Enhancer or the Noteholders of Notes representing not less than a majority of the aggregate
Note Balance of the Notes, with the consent of the Enhancer, may declare the Notes to be
immediately due and payable in the manner provided in Section 5.02 of the Indenture. All
principal payments on the Notes shall be made pro rata to the Noteholders of Notes entitled
thereto.
Any installment of interest or principal, if any, payable on any Note that is
punctually paid or duly provided for by the Issuer on the applicable Payment Date shall be
paid to the related Noteholder on the preceding Record Date, by wire transfer to an account
specified in writing by such Noteholder reasonably satisfactory to the Indenture Trustee as
of the preceding Record Date or, if no such instructions have been delivered to the
Indenture Trustee, by check or money order to such Noteholder mailed to such Noteholder's
address as it appears in the Note Register, the amount required to be distributed to such
Noteholder on such Payment Date pursuant to such Noteholder's Notes; provided, however, that
the Indenture Trustee shall not pay to such Noteholder any amount required to be withheld
from a payment to such Noteholder by the Code. Any reduction in the principal amount of
this Note (or any one or more predecessor Notes) effected by any payments made on any
Payment Date shall be binding upon all future Noteholders of this Note and of any Note
issued upon the registration of transfer hereof or in exchange hereof or in lieu hereof,
whether or not noted hereon. If funds are expected to be available, as provided in the
Indenture, for payment in full of the then remaining unpaid principal amount of this Note on
a Payment Date, then the Indenture Trustee, in the name of and on behalf of the Issuer, will
notify the Person who was the registered Noteholder hereof as of the Record Date preceding
such Payment Date by notice mailed or transmitted by facsimile prior to such Payment Date,
and the amount then due and payable shall be payable only upon presentation and surrender of
this Note at the address specified in such notice of final payment.
As provided in the Indenture and subject to certain limitations set forth therein,
the transfer of this Note may be registered on the Note Register upon surrender of this Note
for registration of transfer at the Corporate Trust Office of the Indenture Trustee, duly
endorsed by, or accompanied by a written instrument of transfer in form satisfactory to the
Indenture Trustee duly executed by, the Noteholder hereof or such Noteholder's attorney duly
authorized in writing, with such signature guaranteed by an "eligible guarantor institution"
meeting the requirements of the Note Registrar, which requirements include membership or
participation in the Securities Transfer Agent's Medallion Program ("STAMP") or such other
"signature guarantee program" as may be determined by the Note Registrar in addition to, or
in substitution for, STAMP, all in accordance with the Exchange Act, and thereupon one or
more new Notes in authorized denominations and in the same aggregate principal amount will
be issued to the designated transferee or transferees. No service charge will be charged
for any registration of transfer or exchange of this Note, but the Note Registrar shall
require payment of a sum sufficient to cover any tax or governmental charge that may be
imposed in connection with any registration of transfer or exchange of this Note.
Each Noteholder or Beneficial Owner of a Note, by its acceptance of a Note, or, in
the case of a Beneficial Owner of a Note, a beneficial interest in a Note, covenants and
agrees that no recourse may be taken, directly or indirectly, with respect to the
obligations of the Issuer, the Owner Trustee, the Sellers, the Servicer, the Depositor or
the Indenture Trustee on the Notes or under the Indenture or any certificate or other
writing delivered in connection therewith, against (i) the Indenture Trustee or the Owner
Trustee in its individual capacity, (ii) any owner of a beneficial interest in the Issuer or
(iii) any partner, owner, beneficiary, agent, officer, director or employee of the Indenture
Trustee or the Owner Trustee in its individual capacity, any holder of a beneficial interest
in the Issuer, the Owner Trustee or the Indenture Trustee or of any successor or assign of
the Indenture Trustee or the Owner Trustee in its individual capacity, except as any such
Person may have expressly agreed and except that any such partner, owner or beneficiary
shall be fully liable, to the extent provided by applicable law for any unpaid consideration
for stock, unpaid capital contribution or failure to pay any installment or call owing to
such entity.
Each Noteholder or Beneficial Owner of a Note, by its acceptance of a Note or, in the
case of a Beneficial Owner of a Note, a beneficial interest in a Note, covenants and agrees
by accepting the benefits of the Indenture that such Noteholder or Beneficial Owner will not
at any time institute against the Depositor or the Issuer, or join in any institution
against the Depositor or the Issuer of, any bankruptcy, reorganization, arrangement,
insolvency or liquidation proceedings under any United States federal or state bankruptcy or
similar law in connection with any obligations relating to the Notes, the Indenture or the
other Basic Documents.
The Issuer has entered into the Indenture and this Note is issued with the intention
that, for federal, state and local income, single business and franchise tax purposes, the
Notes will qualify as indebtedness of the Issuer. Each Noteholder by its acceptance of a
Note (and each Beneficial Owner of a Note by its acceptance of a beneficial interest in a
Note), agrees to treat the Notes for federal, state and local income, single business and
franchise tax purposes as indebtedness of the Issuer.
Prior to the due presentment for registration of transfer of this Note, the Issuer,
the Indenture Trustee and any agent of the Issuer or the Indenture Trustee may treat the
Person in the name of which this Note is registered (as of the day of determination or as of
such other date as may be specified in the Indenture) as the owner hereof for all purposes,
whether or not this Note be overdue, and none of the Issuer, the Indenture Trustee or any
such agent shall be affected by notice to the contrary.
The Indenture permits, with certain exceptions therein provided, the amendment
thereof and the modification of the rights and obligations of the Issuer and the Indenture
Trustee and the rights of the Noteholders of the Series 2006-HE3 Notes under the Indenture
at any time by the Issuer and the Indenture Trustee with the consent of the Enhancer and the
Noteholders of Notes representing a majority of the aggregate Note Balance of the Notes then
Outstanding and with prior notice to the Rating Agencies. The Indenture also contains
provisions permitting the Noteholders of Notes representing specified percentages of the
Note Balances of the Series 2006-HE3 Notes, on behalf of the Noteholders of all Series
2006-HE3 Notes, to waive compliance by the Issuer with certain provisions of the Indenture
and certain past defaults under the Indenture and their consequences. Any such consent or
waiver by the Noteholder of this Note (or any one of more predecessor Notes) shall be
conclusive and binding upon such Noteholder and upon all future Noteholders of this Note and
of any Note issued upon the registration of transfer hereof or in exchange hereof or in lieu
hereof whether or not notation of such consent or waiver is made upon this Note. The
Indenture also permits the Issuer and the Indenture Trustee to amend or waive certain terms
and conditions set forth in the Indenture without the consent of Noteholders of the Series
2006-HE3 Notes issued thereunder but with prior notice to the Rating Agencies and the
Enhancer.
The term "Issuer" as used in this Note includes any successor or the Issuer under the
Indenture.
The Issuer is permitted by the Indenture, under certain circumstances, to merge or
consolidate, subject to the rights of the Indenture Trustee and the Noteholders of Notes
under the Indenture.
The Notes are issuable only in registered form in denominations as provided in the
Indenture, subject to certain limitations therein set forth.
This Note and the Indenture shall be construed in accordance with the laws of the
State of New York, without reference to its conflicts of law provisions, and the
obligations, rights and remedies of the parties hereunder and thereunder shall be determined
in accordance with such laws.
No reference herein to the Indenture and no provision of this Note or of the
Indenture shall alter or impair the obligation of the Issuer, which is absolute and
unconditional, to pay the principal of and interest on this Note at the times, place and
rate, and in the coin or currency herein prescribed.
Anything herein to the contrary notwithstanding, except as expressly provided in the
Basic Documents, none of Wilmington Trust Company in its individual capacity, JPMorgan Chase
Bank, National Association. in its individual capacity, any owner of a beneficial interest
in the Issuer, or any of their respective partners, beneficiaries, agents, officers,
directors, employees or successors or assigns shall be personally liable for, nor shall
recourse be had to any of them for, the payment of principal of or interest on this Note or
the performance of, or the failure to perform, any of the covenants, obligations or
indemnifications contained in the Indenture. The Noteholder of this Note, by its acceptance
hereof, agrees that, except as expressly provided in the Basic Documents, in the case of an
Event of Default under the Indenture, such Noteholder shall have no claim against any of the
foregoing for any deficiency, loss or claim therefrom; provided, however, that nothing
contained herein shall be taken to prevent recourse to, and enforcement against, the assets
of the Issuer for any and all liabilities, obligations and undertakings contained in the
Indenture or in this Note.
The Servicer shall have the right to purchase from the Issuer all of the Mortgage
Loans and related REO Property if the aggregate Note Balance of the Notes as of any Payment
Date is less than 10% of the aggregate Note Balance of the Notes as of the Closing Date,
(provided that a draw on the Policy would not occur as a result of such purchase and
provided further that the purchase price will provide sufficient funds to pay the
outstanding Note Balance and accrued and unpaid interest on the Notes to the Payment Date on
which such amounts are to be distributed to the Securityholders), at a price equal to 100%
of the aggregate unpaid Principal Balance of all such remaining Mortgage Loans, plus accrued
and unpaid interest thereon at the weighted average of the Loan Rates thereon up to the date
preceding the Payment Date on which such amounts are to be distributed to the
Securityholders (and in the case of REO Property, the fair market value of the REO
Property), plus any amounts due and owing to the Enhancer under the Insurance Agreement
related to the Mortgage Loans or the Notes (and any unpaid Servicing Fee relating to the
Mortgage Loans shall be deemed to have been paid at such time), plus any Interest Shortfall
and interest owed thereon to the Noteholders.
IN WITNESS WHEREOF, the Owner Trustee, on behalf of the Issuer and not in its
individual capacity, has caused this Note to be duly executed.
GMACM HOME EQUITY LOAN TRUST 2006-HE3
By: WILMINGTON TRUST COMPANY, not in its
individual capacity but solely as Owner
Trustee
Dated: ___________________
By: ________________________________________________
Authorized Signatory
CERTIFICATE OF AUTHENTICATION
This is one of the Notes referred to in the within-mentioned Indenture.
JPMorgan Chase Bank, National Association.,
not in its individual capacity but solely as
Indenture Trustee
Dated: ___________________
By:__________________________________________________
Authorized Signatory
ASSIGNMENT
Social Security or taxpayer I.D. or other identifying number of assignee: _______________
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfer unto
__________________________________________________________________________________________
(name and address of assignee)
the within Note and all rights thereunder, and hereby irrevocably constitutes and appoints
___________________________, attorney, to transfer said Note on the books kept for
registration thereof, with full power of substitution in the premises.
Dated: _______________ ____________________________________ */
Signature Guaranteed:
____________________________________ */
_________________
* NOTICE: The signature to this assignment must correspond with the name of the
registered owner as it appears on the face of the within Term Note in every particular,
without alteration, enlargement or any change whatever. Such signature must be guaranteed by
an "eligible guarantor institution" meeting the requirements of the Note Registrar, which
requirements include membership or participation in STAMP or such other "signature guarantee
program" as may be determined by the Note Registrar in addition to, or in substitution for,
STAMP, all in accordance with the Securities Exchange Act of 1934, as amended.
EXHIBIT B
FORM OF RULE 144A INVESTMENT REPRESENTATION
Description of Rule 144A Securities, including numbers:
_______________________________________________
_______________________________________________
_______________________________________________
_______________________________________________
The undersigned buyer (the "Buyer"), intends to acquire the Rule 144A Securities
described above from the seller (the "Seller").
1. In connection with such transfer and in accordance with the agreements
pursuant to which the Rule 144A Securities were issued, the Seller hereby certifies the
following facts: Neither the Seller nor anyone acting on its behalf has offered,
transferred, pledged, sold or otherwise disposed of the Rule 144A Securities, any interest
in the Rule 144A Securities or any other similar security to, or solicited any offer to buy
or accept a transfer, pledge or other disposition of the Rule 144A Securities, any interest
in the Rule 144A Securities or any other similar security form, or otherwise approached or
negotiated with respect to the Rule 144A Securities, any interest in the Rule 144A
Securities or any other similar security with, any person in any manner, or made any general
solicitation by means of general advertising or in any other manner, or taken any other
action, that would constitute a public offering of the Rule 144A Securities under the
Securities Act of 1933, as amended (the "1933 Act"), or that would render the disposition of
the Rule 144A Securities a violation of Section 5 of the 1933 Act or require registration
pursuant thereto, and that the Seller has not offered the Rule 144A Securities to any person
other than the Buyer or another "qualified institutional buyer" as defined in Rule 144A
under the 1933 Act.
2. The Buyer warrants and represents to, and covenants with, the Indenture
Trustee and the Issuer (as defined in the indenture dated as of August 30, 2006 (the
"Indenture"), between GMACM Home Equity Loan Trust 2006-HE3, as Issuer, and JPMorgan Chase
Bank, National Association, as Indenture Trustee, pursuant to Section 4.02 of the Indenture,
as follows:
a. The Buyer understands that the Rule 144A Securities have not been
registered under the 1933 Act or the securities laws of any state.
b. The Buyer considers itself a substantial, sophisticated institutional
investor having such knowledge and experience in financial and business matters that
it is capable of evaluating the merits and risks of investment in the Rule 144A
Securities.
c. The Buyer has been furnished with all information regarding the Rule
144A Securities that it has requested from the Seller, the Indenture Trustee, the
Owner Trustee or the Servicer.
d. Neither the Buyer nor anyone acting on its behalf has offered,
transferred, pledged, sold or otherwise disposed of the Rule 144A Securities, any
interest in the Rule 144A Securities or any other similar security to, or solicited
any offer to buy or accept a transfer, pledge or other disposition of the Rule 144A
Securities, any interest in the Rule 144A Securities or any other similar security
from, or otherwise approached or negotiated with respect to the Rule 144A Securities,
any interest in the Rule 144A Securities or any other similar security with, any
person in any manner, or made any general solicitation by means of general
advertising or in any other manner, or taken any other action, that would constitute
a public offering of the Rule 144A Securities under the 1933 Act or that would render
the disposition of the Rule 144A Securities a violation of Section 5 of the 1933 Act
or require registration pursuant thereto, nor will it act, nor has it authorized or
will it authorize any person to act, in such manner with respect to the Rule 144A
Securities.
e. The Buyer is a "qualified institutional buyer" as that term is defined
in Rule 144A under the 1933 Act and has completed either of the forms of
certification to that effect attached hereto as Annex 1 or Annex 2. The Buyer is
aware that the sale to it is being made in reliance on Rule 144A. The Buyer is
acquiring the Rule 144A Securities for its own account or the accounts of other
qualified institutional buyers, understands that such Rule 144A Securities may be
resold, pledged or transferred only (i) to a person reasonably believed to be a
qualified institutional buyer that purchases for its own account or for the account
of a qualified institutional buyer to whom notice is given that the resale, pledge or
transfer is being made in reliance on Rule 144A, or (ii) pursuant to another
exemption from registration under the 1933 Act.
3. This document may be executed in one or more counterparts and by the different
parties hereto on separate counterparts, each of which, when so executed, shall be deemed to
be an original; such counterparts, together, shall constitute one and the same document.
IN WITNESS WHEREOF, the Buyer has executed this document as of the date set forth
below.
Print Name of Buyer
By:______________________________________
Name:
Title:
Taxpayer Identification:
No. _____________________________________
Date:
ANNEX 1 TO EXHIBIT B
QUALIFIED INSTITUTIONAL BUYER STATUS UNDER SEC RULE 144A
[For Buyers Other Than Registered Investment Companies]
The undersigned hereby certifies as follows in connection with the Rule 144A
Investment Representation to which this Certification is attached:
1. As indicated below, the undersigned is the President, Chief Financial Officer,
Senior Vice President or other executive officer of the Buyer.
2. In connection with purchases by the Buyer, the Buyer is a "qualified
institutional buyer" as that term is defined in Rule 144A under the Securities Act of 1933,
as amended ("Rule 144A") because (i) the Buyer owned and/or invested on a discretionary
basis $______________________** in securities (except for the excluded securities referred
to below) as of the end of the Buyer's most recent fiscal year (such amount being calculated
in accordance with Rule 144A) and (ii) the Buyer satisfies the criteria in the category
marked below.
___ Corporation, etc. The Buyer is a corporation (other than a bank, savings and
loan association or similar institution), placeStateMassachusetts or similar
statutory trust, partnership, or charitable organization described in Section
501(c)(3) of the Internal Revenue Code.
___ Bank. The Buyer (a) is a national bank or banking institution organized under
the laws of any State, territory or the District of Columbia, the business of
which is substantially confined to banking and is supervised by the State or
territorial banking commission or similar official or is a foreign bank or
equivalent institution, and (b) has an audited net worth of at least
$25,000,000 as demonstrated in its latest annual financial statements, a copy
of which is attached hereto.
_________________
** Buyer must own and/or invest on a discretionary basis at least $100,000,000 in
securities unless Buyer is a dealer, and, in that case, Buyer must own and/or invest on a
discretionary basis at least $10,000,000 in securities.
___ Savings and Loan. The Buyer (a) is a savings and loan association, building
and loan association, cooperative bank, homestead association or similar
institution, which is supervised and examined by a State or Federal authority
having supervision over any such institutions or is a foreign savings and loan
association or equivalent institution and (b) has an audited net worth of at
least $25,000,000 as demonstrated in its latest annual financial statements.
___ Broker-Dealer. The Buyer is a dealer registered pursuant to Section 15 of the
Securities Exchange Act of 1934, as amended.
___ Insurance Company. The Buyer is an insurance company whose primary and
predominant business activity is the writing of insurance or the reinsuring of
risks underwritten by insurance companies and which is subject to supervision
by the insurance commissioner or a similar official or agency of a state or
territory or the District of Columbia.
___ State or Local Plan. The Buyer is a plan established and maintained by a
state, its political subdivisions, or any agency or instrumentality of the
state or its political subdivisions, for the benefit of its employees.
___ ERISA Plan. The Buyer is an employee benefit plan within the meaning of Title
I of the Employee Retirement Income Security Act of 1974, as amended.
___ Investment Adviser. The Buyer is an investment adviser registered under the
Investment Advisers Act of 1940, as amended.
___ SBIC. The Buyer is a Small Business Investment Company licensed by the U.S.
Small Business Administration under Section 301(c) or (d) of the Small
Business Investment Act of 1958, as amended.
___ Business Development Company. The Buyer is a business development company as
defined in Section 202(a)(22) of the Investment Advisers Act of 1940, as
amended.
___ Trust Fund. The Buyer is a trust fund whose trustee is a bank or trust
company and whose participants are exclusively (a) plans established and
maintained by a State, its political subdivisions, or any agency or
instrumentality of the State or its political subdivisions, for the benefit of
its employees, or (b) employee benefit plans within the meaning of Title I of
the Employee Retirement Income Security Act of 1974, but is not a trust fund
that includes as participants individual retirement accounts or H.R. 10 plans.
3. The term "securities" as used herein does not include (i) securities of
issuers that are Affiliated with the Buyer, (ii) securities that are part of an unsold
allotment to or subscription by the Buyer, if the Buyer is a dealer, (iii) bank deposit
notes and certificates of deposit, (iv) loan participations, (v) repurchase agreements, (vi)
securities owned but subject to a repurchase agreement and (vii) currency, interest rate and
commodity swaps.
4. For purposes of determining the aggregate amount of securities owned and/or
invested on a discretionary basis by the Buyer, the Buyer used the cost of such securities
to the Buyer and did not include any of the securities referred to in the preceding
paragraph. Further, in determining such aggregate amount, the Buyer may have included
securities owned by subsidiaries of the Buyer, but only if such subsidiaries are
consolidated with the Buyer in its financial statements prepared in accordance with
generally accepted accounting principles and if the investments of such subsidiaries are
managed under the Buyer's direction. However, such securities were not included if the
Buyer is a majority-owned, consolidated subsidiary of another enterprise and the Buyer is
not itself a reporting company under the Securities Exchange Act of 1934, as amended.
5. The Buyer acknowledges that it is familiar with Rule 144A and understands that
the seller to it and other parties related to the Rule 144A Securities are relying and will
continue to rely on the statements made herein because one or more sales to the Buyer may be
in reliance on Rule 144A.
___ ___ Will the Buyer be purchasing the Rule 144A
Yes No Securities only for the Buyer's own account?
6. If the answer to the foregoing question is "no", the Buyer agrees that, in
connection with any purchase of securities sold to the Buyer for the account of a third
party (including any separate account) in reliance on Rule 144A, the Buyer will only
purchase for the account of a third party that at the time is a "qualified institutional
buyer" within the meaning of Rule 144A. In addition, the Buyer agrees that the Buyer will
not purchase securities for a third party unless the Buyer has obtained a current
representation letter from such third party or taken other appropriate steps contemplated by
Rule 144A to conclude that such third party independently meets the definition of "qualified
institutional buyer" set forth in Rule 144A.
7. The Buyer will notify each of the parties to which this certification is made
of any changes in the information and conclusions herein. Until such notice is given, the
Buyer's purchase of Rule 144A Securities will constitute a reaffirmation of this
certification as of the date of such purchase.
Print Name of Buyer
By: ___________________________________________
Name:
Title:
Date:
ANNEX 2 TO EXHIBIT B
QUALIFIED INSTITUTIONAL BUYER STATUS UNDER SEC RULE 144A
[For Buyers That Are Registered Investment Companies]
The undersigned hereby certifies as follows in connection with the Rule 144A
Investment Representation to which this certification is attached:
1. As indicated below, the undersigned is the President, Chief Financial
Officer or Senior Vice President of the Buyer or, if the Buyer is a "qualified institutional
buyer" as that term is defined in Rule 144A under the Securities Act of 1933 ("Rule 144A")
because Buyer is part of a Family of Investment Companies (as defined below), is such an
officer of the Adviser (as defined below).
2. In connection with purchases by Buyer, the Buyer is a "qualified
institutional buyer" as defined in SEC Rule 144A because (i) the Buyer is an investment
company registered under the Investment Company Act of 1940, and (ii) as marked below, the
Buyer alone, or the Buyer's Family of Investment Companies, owned at least $100,000,000 in
securities (other than the excluded securities referred to below) as of the end of the
Buyer's most recent fiscal year. For purposes of determining the amount of securities owned
by the Buyer or the Buyer's Family of Investment Companies, the cost of such securities was
used.
____ The Buyer owned $________________ in securities (other than the excluded securities
referred to below) as of the end of the Buyer's most recent fiscal year (such amount
being calculated in accordance with Rule 144A).
____ The Buyer is part of a Family of Investment Companies which owned in the aggregate
$______________ in securities (other than the excluded securities referred to below)
as of the end of the Buyer's most recent fiscal year (such amount being calculated in
accordance with Rule 144A).
3. The term "Family of Investment Companies" as used herein means two or
more registered investment companies (or series thereof) that have the same investment
adviser or investment advisers (each, an "Adviser") that are affiliated (by virtue of being
majority owned subsidiaries of the same parent or because one investment adviser is a
majority owned subsidiary of the other).
4. The term "securities" as used herein does not include (i) securities of
issuers that are affiliated with the Buyer or are part of the Buyer's Family of Investment
Companies, (ii) bank deposit notes and certificates of deposit, (iii) loan participations,
(iv) repurchase agreements, (v) securities owned but subject to a repurchase agreement and
(vi) currency, interest rate and commodity swaps.
5. The Buyer is familiar with Rule 144A and understands that each of the
parties to which this certification is made are relying and will continue to rely on the
statements made herein because one or more sales to the Buyer will be in reliance on
Rule 144A. In addition, the Buyer will only purchase for the Buyer's own account.
6. The undersigned will notify each of the parties to which this
certification is made of any changes in the information and conclusions herein. Until such
notice, the Buyer's purchase of Rule 144A Securities will constitute a reaffirmation of this
certification by the undersigned as of the date of such purchase.
Print Name of Buyer
By: ____________________________________
Name:
Title:
IF AN ADVISER:
Print Name of Buyer
Date: ___________________________________
EXHIBIT C
FORM OF INVESTOR REPRESENTATION LETTER
_______________ , 20__
Re: GMACM HOME EQUITY LOAN TRUST 2006-HE3
GMACM Home Equity Loan-Backed Term Notes
Ladies and Gentlemen:
[__________________] (the "Purchaser") intends to purchase from [_________]
(the "Seller") $[__________] Term Notes, GMACM Home Equity Loan Trust 2006-HE3 (the
"Notes"), issued pursuant to the Indenture (the "Indenture"), dated as of August 30, 2006
between GMACM Home Equity Loan Trust 2006-HE3, as Issuer, and JPMorgan Chase Bank, National
Association, as Indenture Trustee (the "Indenture Trustee"). All terms used herein and not
otherwise defined shall have the meanings set forth in the Indenture. The Purchaser hereby
certifies, represents and warrants to, and covenants with, the Issuer and the Indenture
Trustee that:
1. The Purchaser understands that (a) the Notes have not been and will not
be registered or qualified under the Securities Act of 1933, as amended (the "Act")
or any state securities law, (b) the Depositor is not required to so register or
qualify the Notes, (c) the Notes may be resold only if registered and qualified
pursuant to the provisions of the Act or any state securities law, or if an exemption
from such registration and qualification is available, (d) the Indenture contains
restrictions regarding the transfer of the Notes and (e) the Notes will bear a legend
to the foregoing effect.
2. The Purchaser is acquiring the Notes for its own account for investment
only and not with a view to or for sale in connection with any distribution thereof
in any manner that would violate the Act or any applicable state securities laws.
3. The Purchaser is (a) a substantial, sophisticated institutional
investor having such knowledge and experience in financial and business matters, and,
in particular, in such matters related to securities similar to the Notes, such that
it is capable of evaluating the merits and risks of investment in the Notes, (b) able
to bear the economic risks of such an investment and (c) an "accredited investor"
within the meaning of Rule 501(a) promulgated pursuant to the Act.
4. The Purchaser has been furnished with, and has had an opportunity to
review (a) a copy of the Indenture and (b) such other information concerning the
Notes, the Mortgage Loans and the Depositor as has been requested by the Purchaser
from the Depositor or the Seller and is relevant to the Purchaser's decision to
purchase the Notes. The Purchaser has had any questions arising from such review
answered by the Depositor or the Seller to the satisfaction of the Purchaser.
5. The Purchaser has not and will not nor has it authorized or will it
authorize any person to (a) offer, pledge, sell, dispose of or otherwise transfer any
Note, any interest in any Note or any other similar security to any person in any
manner, (b) solicit any offer to buy or to accept a pledge, disposition of other
transfer of any Note, any interest in any Note or any other similar security from any
person in any manner, (c) otherwise approach or negotiate with respect to any Note,
any interest in any Note or any other similar security with any person in any manner,
(d) make any general solicitation by means of general advertising or in any other
manner or (e) take any other action, that (as to any of (a) through (e) above) would
constitute a public offering of any Note under the Act, that would render the
disposition of any Note a violation of Section 5 of the Act or any state securities
law, or that would require registration or qualification pursuant thereto. The
Purchaser will not sell or otherwise transfer any of the Notes, except in compliance
with the provisions of the Indenture.
6. The Purchaser will comply with all applicable federal and state
securities laws, and with the terms of the Indenture, in connection with any
subsequent resale of the Notes by the Purchaser.
Very truly yours,
By: ___________________
Name:
Title:
EXHIBIT D
FORM OF TRANSFEROR CERTIFICATE
_______________ , 20__
Re: GMACM HOME EQUITY LOAN TRUST 2006-HE3
GMACM Home Equity Loan-Backed Term Notes
Ladies and Gentlemen:
This letter is delivered to you in connection with the transfer by
[___________________________] (the "Seller") to [___________________] (the "Purchaser") of
$[_______] Term Notes, GMACM Home Equity Loan Trust 2006-HE3 (the "Notes"), issued pursuant
to the Indenture (the "Indenture"), dated as of August 30, 2006 between GMACM Home Equity
Loan Trust 2006-HE3, as Issuer, and JPMorgan Chase Bank, National Association, as Indenture
Trustee (the "Indenture Trustee"). All terms used herein and not otherwise defined shall
have the meanings set forth in the Indenture. The Seller hereby certifies, represents and
warrants to, and covenants with, the Issuer and the Indenture Trustee that:
Neither the Seller nor anyone acting on its behalf has (a) offered, pledged,
sold, disposed of or otherwise transferred any Note, any interest in any Note or any other
similar security to any person in any manner, (b) has solicited any offer to buy or to
accept a pledge, disposition or other transfer of any Note, any interest in any Note or any
other similar security from any person in any manner, (c) has otherwise approached or
negotiated with respect to any Note, any interest in any Note or any other similar security
with any person in any manner, (d) has made any general solicitation by means of general
advertising or in any other manner, or (e) has taken any other action, that (as to any of
(a) through (e) above) would constitute a distribution of the Notes under the Securities Act
of 1933 (the "Act"), that would render the disposition of any Note a violation of Section 5
of the Act or any state securities law, or that would require registration or qualification
pursuant thereto. The Seller will not act, in any manner set forth in the foregoing
sentence with respect to any Note. The Seller has not and will not sell or otherwise
transfer any of the Notes, except in compliance with the provisions of the Indenture.
Very truly yours,
(Seller)
By: _________________________________________
Name:
Title:
