GMACM HOME LOAN TRUST 2006-HLTV1,
Issuer,
and
JPMORGAN CHASE BANK, NATIONAL ASSOCIATION,
Indenture Trustee
________________________
INDENTURE
________________________
Dated as of March 30, 2006
GMACM HOME LOAN-BACKED TERM NOTES
TABLE OF CONTENTS
PAGE
ARTICLE I Definitions...............................................................2
Section 1.01 Definitions.......................................................2
Section 1.02 Incorporation by Reference of Trust Indenture Act.................2
Section 1.03 Rules of Construction.............................................2
ARTICLE II Original Issuance of Notes................................................3
Section 2.01 Form..............................................................3
Section 2.02 Execution, Authentication and Delivery............................3
ARTICLE III Covenants.................................................................4
Section 3.01 Collection of Payments with Respect to the Home 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.........................................6
Section 3.06 Protection of Trust Estate........................................8
Section 3.07 Opinions as to Trust Estate.......................................9
Section 3.08 Performance of Obligations; Servicing Agreement...................9
Section 3.09 Negative Covenants...............................................10
Section 3.10 Annual Statement as to Compliance................................10
Section 3.11 Recordation of Assignments.......................................11
Section 3.12 Representations and Warranties ..................................11
Section 3.13 Assignee of Record of the Home Loans.............................11
Section 3.14 Servicer as Agent and Bailee of the Indenture Trustee............11
Section 3.15 Investment Company Act...........................................11
Section 3.16 Issuer May Consolidate, etc......................................12
Section 3.17 Successor or Transferee..........................................13
Section 3.18 No Other Business................................................14
Section 3.19 No Borrowing.....................................................14
Section 3.20 Guarantees, Loans, Advances and Other Liabilities................14
Section 3.21 Capital Expenditures.............................................14
Section 3.22 Owner Trustee Not Liable for Certificates or Related
Documents........................................................14
Section 3.23 Restricted Payments..............................................14
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.......................................15
Section 3.28 Payments under the Policy........................................15
Section 3.29 Replacement Enhancement..........................................16
Section 3.30 Reserved.........................................................16
Section 3.31 Additional Representations of the Issuer.........................16
ARTICLE IV The Notes; Satisfaction and Discharge of Indenture.......................17
Section 4.01 The Notes........................................................17
Section 4.02 Registration of and Limitations on Transfer and Exchange of
Notes; Appointment of Certificate Registrar......................18
Section 4.03 Mutilated, Destroyed, Lost or Stolen Notes.......................19
Section 4.04 Persons Deemed Owners............................................20
Section 4.05 Cancellation.....................................................20
Section 4.06 Book-Entry Notes.................................................20
Section 4.07 Notices to Depository............................................21
Section 4.08 Definitive Notes.................................................21
Section 4.09 Tax Treatment....................................................22
Section 4.10 Satisfaction and Discharge of Indenture..........................22
Section 4.11 Application of Trust Money.......................................23
Section 4.12 Subrogation and Cooperation......................................23
Section 4.13 Repayment of Monies Held by Paying Agent.........................24
Section 4.14 Temporary Notes..................................................24
ARTICLE V Default And Remedies.....................................................25
Section 5.01 Events of Default................................................25
Section 5.02 Acceleration of Maturity; Rescission and Annulment...............25
Section 5.03 Collection of Indebtedness and Suits for Enforcement by
Indenture Trustee................................................26
Section 5.04 Remedies; Priorities.............................................28
Section 5.05 Optional Preservation of the Trust Estate........................29
Section 5.06 Limitation of Suits..............................................30
Section 5.07 Unconditional Rights of Noteholders to Receive Principal and
Interest.........................................................31
Section 5.08 Restoration of Rights and Remedies...............................31
Section 5.09 Rights and Remedies Cumulative...................................31
Section 5.10 Delay or Omission Not a Waiver...................................31
Section 5.11 Control by Credit Enhancer or Noteholders........................31
Section 5.12 Waiver of Past Defaults..........................................32
Section 5.13 Undertaking for Costs............................................32
Section 5.14 Waiver of Stay or Extension Laws.................................33
Section 5.15 Sale of Trust Estate.............................................33
Section 5.16 Action on Notes..................................................35
Section 5.17 Performance and Enforcement of Certain Obligations...............35
ARTICLE VI The Indenture Trustee....................................................36
Section 6.01 Duties of Indenture Trustee......................................36
Section 6.02 Rights of Indenture Trustee......................................37
Section 6.03 Individual Rights of Indenture Trustee...........................39
Section 6.04 Indenture Trustee's Disclaimer...................................39
Section 6.05 Notice of Event of Default.......................................39
Section 6.06 Reports by Indenture Trustee to Noteholders......................39
Section 6.07 Compensation and Indemnity.......................................39
Section 6.08 Replacement of Indenture Trustee.................................40
Section 6.09 Successor Indenture Trustee by Xxxxxx............................41
Section 6.10 Appointment of Co-Indenture Trustee or Separate Indenture
Trustee..........................................................41
Section 6.11 Eligibility; Disqualification....................................42
Section 6.12 Preferential Collection of Claims Against Issuer.................43
Section 6.13 Representations and Warranties...................................43
Section 6.14 Directions to Indenture Trustee..................................43
Section 6.15 Indenture Trustee May Own Securities.............................44
ARTICLE VII Noteholders' Lists and Reports...........................................44
Section 7.01 Issuer to Furnish Indenture Trustee Names and Addresses of
Noteholders......................................................44
Section 7.02 Preservation of Information; Communications to Noteholders.......44
Section 7.03 Reports by Issuer................................................44
Section 7.04 Reports by Indenture Trustee.....................................45
ARTICLE VIII Accounts, Disbursements and Releases.....................................45
Section 8.01 Collection of Money..............................................45
Section 8.02 Trust Accounts...................................................46
Section 8.03 Officer's Certificate............................................46
Section 8.04 Termination Upon Distribution to Noteholders.....................46
Section 8.05 Release of Trust Estate..........................................47
Section 8.06 Surrender of Notes Upon Final Payment............................47
ARTICLE IX Supplemental Indentures..................................................47
Section 9.01 Supplemental Indentures Without Consent of Noteholders...........47
Section 9.02 Supplemental Indentures With Consent of Noteholders..............49
Section 9.03 Execution of Supplemental Indentures.............................50
Section 9.04 Effect of Supplemental Indenture.................................50
Section 9.05 Conformity with Trust Indenture Act..............................51
Section 9.06 Reference in Notes to Supplemental Indentures....................51
ARTICLE X Miscellaneous............................................................51
Section 10.01 Compliance Certificates and Opinions, etc........................51
Section 10.02 Form of Documents Delivered to Indenture Trustee.................53
Section 10.03 Acts of Noteholders..............................................54
Section 10.04 Notices, etc., to Indenture Trustee, Issuer, Credit Enhancer
and Rating Agencies..............................................54
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............................................56
Section 10.12 Legal Holidays...................................................56
Section 10.13 GOVERNING LAW....................................................56
Section 10.14 Counterparts.....................................................57
Section 10.15 Recording of Indenture...........................................57
Section 10.16 Issuer Obligation................................................57
Section 10.17 No Petition......................................................57
Section 10.18 Inspection.......................................................57
EXHIBITS
Exhibit A......- Form of Notes
Appendix A.....- Definitions
This Indenture, dated as of March 30, 2006, is between GMACM Home Loan Trust
2006-HLTV1, a Delaware statutory trust, as issuer (the "Issuer"), and JPMorgan Chase Bank,
National Association, a national banking association, as indenture trustee (the "Indenture
Trustee").
WITNESSETH:
Each party hereto agrees as follows for the benefit of the other party and for the
equal and ratable benefit of the Noteholders of the Issuer's Series 2006-HLTV1 GMACM Home
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 Credit 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 Home Loans, and all monies due or to become due thereunder;
(b) the Note Payment Account, and all funds or investment property on deposit or credited
thereto from time to time and all proceeds thereof; (c) all hazard insurance policies,
(d) the Policy; 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 Credit 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 Credit 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 aggregate initial principal amount of $229,865,170. The Class A-1
Notes, Class A-2 Notes, Class A-3 Notes, Class A-4 Notes and Class A-5 Notes shall have
initial principal amounts equal to 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 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 Home 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 Home 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 Credit Enhancer written notice of any default by
the Issuer of which it has actual knowledge in the making of any payment required to be made
with respect to the Notes;
(c) at any time during the continuance of any such default, upon the written request of
the Indenture Trustee, forthwith pay to the Indenture Trustee all sums so held in trust by
such Paying Agent;
(d) immediately resign as Paying Agent and forthwith pay to the Indenture Trustee all
sums held by it in trust for the payment of Notes, if at any time it ceases to meet the
standards required to be met by a Paying Agent at the time of its appointment;
(e) comply with all requirements of the Code with respect to the withholding from any
payments made by it on any Notes of any applicable withholding taxes imposed thereon and
with respect to any applicable reporting requirements in connection therewith; and
(f) deliver to the Indenture Trustee a copy of the statement to Noteholders prepared with
respect to each Payment Date by the Servicer pursuant to Section 4.01 of the Servicing
Agreement.
The Issuer may at any time, for the purpose of obtaining the satisfaction and
discharge of this Indenture or for any other purpose, by Issuer Request direct any Paying
Agent to pay to the Indenture Trustee all sums held in trust by such Paying Agent, such sums
to be held by the Indenture Trustee upon the same trusts as those upon which the sums were
held by such Paying Agent; and upon such payment by any Paying Agent to the Indenture
Trustee, such Paying Agent shall be released from all further liability with respect to such
money.
Subject to applicable laws with respect to escheat of funds, any money held by the
Indenture Trustee or any Paying Agent in trust for the payment of any amount due with
respect to any Note and remaining unclaimed for one year after such amount has become due
and payable shall be discharged from such trust and be paid to the Issuer on Issuer Request;
and the Noteholder of such Note shall thereafter, as an unsecured general creditor, look
only to the Issuer for payment thereof (but only to the extent of the amounts so paid to the
Issuer), and all liability of the Indenture Trustee or such Paying Agent with respect to
such trust money shall thereupon cease; provided, however, that the Indenture Trustee or
such Paying Agent, before being required to make any such repayment, shall at the expense
and direction of the Issuer cause to be published once, in an Authorized Newspaper, notice
that such money remains unclaimed and that, after a date specified therein, which shall not
be less than 30 days from the date of such publication, any unclaimed balance of such money
then remaining will be repaid to the Issuer. The Indenture Trustee may also adopt and
employ, at the expense and direction of the Issuer, any other reasonable means of
notification of such repayment (including, but not limited to, mailing notice of such
repayment to Noteholders the Notes which have been called but have not been surrendered for
redemption or whose right to or interest in monies due and payable but not claimed is
determinable from the records of the Indenture Trustee or of any Paying Agent, at the last
address of record for each such Noteholder).
Section 3.04...Existence. The Issuer will keep in full effect its existence, rights and
franchises as a statutory trust under the laws of the State of Delaware (unless it becomes,
or any successor Issuer hereunder is or becomes, organized under the laws of any other state
or of the United States of America, in which case the Issuer will keep in full effect its
existence, rights and franchises under the laws of such other jurisdiction) and will obtain
and preserve its qualification to do business in each jurisdiction in which such
qualification is or shall be necessary to protect the validity and enforceability of this
Indenture, the Notes, the Home Loans and each other instrument or agreement included in the
Trust Estate.
Section 3.05...Priority of Distributions.
(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 in
the Note Payment Account, any optional advances of delinquent principal and/or interest on
the Home Loans made by the Servicer in respect of the related Collection Period and any
Insured Amount deposited into the Note Payment Account pursuant to Section 3.28(a), is as
follows:
(i) to pay to the Credit Enhancer, the Premium for the Policy for such Payment Date and
any previously unpaid Premiums, with interest thereon as provided in the Insurance
Agreement;
(ii) for payment by the Paying Agent to the Noteholders of each Class of Notes, interest
for the related Interest Period at the related Note Rate on the related Note Balance
immediately prior to such Payment Date and interest due and unpaid on any Class of
Notes for any prior Payment Date; provided that Principal Collections will not be
used to make payments pursuant to this clause (ii);
(iii) for payment by the Paying Agent to the Noteholders, as a distribution of principal on
the Notes, the Principal Collection Distribution Amount for such Payment Date, to be
allocated to the Notes of each Class as described in Section 3.05(b) below, until the
Note Balances thereof have been reduced to zero;
(iv) for payment by the Paying Agent to the Noteholders, as a distribution of principal on
the Notes, the Liquidation Loss Distribution Amount for such Payment Date, to be
allocated to the Notes of each Class as described in Section 3.05(b) below, until the
Note Balances thereof have been reduced to zero;
(v) to the Credit Enhancer, to reimburse it for prior draws made on the Policy, with
interest thereon as provided in the Insurance Agreement;
(vi) for payment by the Paying Agent to the Noteholders, as a distribution of principal on
the Notes, the Overcollateralization Increase Amount for such Payment Date, to be
allocated to the Notes of each Class as described in Section 3.05(b) below, until the
Note Balances thereof have been reduced to zero;
(vii) to pay to the Credit Enhancer, any other amounts owed to the Credit Enhancer pursuant
to the Insurance Agreement;
(viii) to the Indenture Trustee, any amounts owing to the Indenture Trustee pursuant to
Section 6.07 to the extent remaining unpaid; and
(ix) any remaining amount, to the Distribution Account, for distribution to the
Certificateholders by the Certificate Paying Agent;
provided, that in the event that on a Payment Date a Credit Enhancer Default shall have
occurred and be continuing, then the priorities of distributions described above will be
adjusted such that payments of any amounts to be paid to the Credit Enhancer will not be
paid until the full amount of interest and principal in accordance with clauses (ii) through
(iv) above that are due and required to be paid by the Credit Enhancer on the Notes on such
Payment Date have been paid and provided, further, that on the Final Payment Date, the
amount to be paid pursuant to clause (iii) above shall be equal to the Note Balance
immediately prior to such Payment Date. For purposes of the foregoing, required payments of
principal on the Notes on each Payment Date will include the portion allocable to the Notes
of all Liquidation Loss Amounts for such Payment Date and for all previous Collection
Periods until paid or covered in full, to the extent not otherwise covered by a Liquidation
Loss Distribution Amount or a draw on the Policy (up to the outstanding Note Balance).
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 above.
Amounts paid to Noteholders shall be paid in respect of the Notes in accordance with
the applicable percentage as set forth in paragraph (c) below. Interest on the Notes, other
than the Class A-1 Notes, will be computed on the basis of a 360-day year consisting of
twelve 30-day months. 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. 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.
On each Payment Date, distributions of principal to the Noteholders pursuant to
clauses 3.05(a)(iii), (iv) and (vi) above, shall be allocated sequentially to the Class A-1
Notes, Class A-2 Notes, Class A-3 Notes, Class A-4 Notes and Class A-5 Notes, in that order,
until the related Note Balance thereof has reduced to zero.
Principal of each Note shall be due and payable in full on the Final Payment Date as
provided in the applicable form of Note set forth in Exhibit A. All principal payments on
the Notes of each Class shall be made in accordance with the priorities set forth in
paragraphs (a) and (b) above 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 Liquidation Loss Distribution Amount).
Section 3.06 Protection of Trust Estate.
(a) The Issuer shall from time to time execute or authenticate 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 Home 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 Home 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 Home 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 Home Loans until December 31 in the
following calendar year or, if any such action is required to maintain such security
interest in the Home 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 Home 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 Home 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 Home 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 Home 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 Credit 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 Home Loans. The Indenture
Trustee, as pledgee of the Home Loans, shall have the benefit of the representations and
warranties made by GMACM in Section 3.1(a) and Section 3.1(b) of the Purchase Agreement and
the benefit of the representations and warranties made by WG Trust in Section 3.1(c) and
Section 3.1(d) of the Purchase Agreement, concerning the Home Loans and the right to enforce
the remedies against GMACM or WG Trust provided in such Section 3.1(e) 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 Home Loans. As pledgee of the Home Loans, the
Indenture Trustee shall hold title to the Home Loans by being named as payee in the
endorsements 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 Home Loan, the
Indenture Trustee shall not execute any endorsement or assignment or otherwise release or
transfer such title to any of the Home Loans until such time as the remaining Trust Estate
may be released pursuant to Section 8.05. 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 Home 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 Home
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 Credit 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 Credit 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 Credit 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 Home 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
Credit 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 Credit Enhancer, the
Depositor, the Owner Trustee and each Rating Agency, and shall make available to each
Noteholder and each Certificateholder, respectively, 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 monthly statement to Securityholders (and, at its
option, any additional files containing the same information in an alternative format)
available each month to Securityholders and the Credit Enhancer, and other parties to this
Indenture via first class mail or via the Indenture Trustee's internet website and may be
obtained by any Noteholder by telephoning the Trustee at (000) 000-0000. 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 and/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 . As long as the Class A-1 Notes are Outstanding,
on the second LIBOR Business Day immediately preceding (i) the Closing Date in the case of
the first Interest Period and (ii) the first day of each succeeding Interest Period, the
Indenture Trustee shall determine One-Month LIBOR and the applicable Note Rate for the
Class A-1 Notes for such Interest Period and shall inform the Issuer, the Servicer and the
Depositor by means of the Indenture Trustee's online service.
Section 3.28 Payments under the Policy.
(a) If the Servicing Certificate specifies an Insured Amount for any Payment Date, the
Indenture Trustee shall make a draw on the Policy in an amount, if any, equal to the Insured
Amount for such Payment Date. The Indenture Trustee shall deposit or cause to be deposited
such Insured Amount into the Note Payment Account on such Payment Date. For purposes of the
foregoing, the amount on deposit in the Note Payment Account and available to be distributed
as interest on any Payment Date shall include all amounts on deposit in such account with
respect to such Payment Date, other than the Principal Collection Distribution Amount and
the Liquidation Loss Distribution Amount (if any) to be distributed on such Payment Date.
(b) The Indenture Trustee shall submit, if an Insured Amount is specified in any
statement to Securityholders prepared pursuant to Section 4.01 of the Servicing Agreement,
the Notice of Nonpayment and Demand for Payment of Insured Amounts (in the form attached as
Exhibit A to the Policy) to the Credit 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 Reserved..
Section 3.30 Reserved.
Section 3.31 Additional Representations of the Issuer.
The Issuer hereby represents and warrants to the Indenture Trustee that as of the
Closing Date (which representations and warranties shall survive the execution of this
Indenture):
(a) This Indenture creates a valid and continuing security interest (as defined in the
applicable UCC) in the Mortgage Notes in favor of the Indenture Trustee, which security
interest is prior to all other Liens (except as expressly permitted otherwise in this
Indenture), and is enforceable as such as against creditors of and purchasers from the
Issuer.
(b) The Mortgage Notes constitute "instruments" within the meaning of the applicable UCC.
(c) The Issuer owns and has good and marketable title to the Mortgage Notes free and
clear of any Lien of any Person.
(d) The original executed copy of each Mortgage Note (except for any Mortgage Note with
respect to which a Lost Note Affidavit has been delivered to the Custodian) has been
delivered to the Custodian.
(e) The Issuer has received a written acknowledgment from the Custodian that the
Custodian is acting solely as agent of the Indenture Trustee for the benefit of the
Noteholders.
(f) Other than the security interest granted to the Indenture Trustee pursuant to this
Indenture, the Issuer has not pledged, assigned, sold, granted a security interest in, or
otherwise conveyed any of the Mortgage Notes. The Issuer has not authorized the filing of
and is not aware of any financing statements against the Issuer that include a description
of collateral covering the Mortgage Notes other than any financing statement relating to the
security interest granted to the Indenture Trustee hereunder or any security interest that
has been terminated. The Issuer is not aware of any judgment or tax lien filings against the
Issuer.
(g) None of the Mortgage Notes has any marks or notations indicating that they have been
pledged, assigned or otherwise conveyed to any Person other than the Indenture Trustee,
except for (i) any endorsements that are part of a complete chain of endorsements from the
originator of the Mortgage Note to the Indenture Trustee, and (ii) any marks or notations
pertaining to Liens that have been terminated or released.
(h) None of the provisions of this Section 3.31 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 any Class of Notes.
ARTICLE IV
The Notes; Satisfaction and Discharge of Indenture
Section 4.01 The Notes. 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 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 Note 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. Each Class of 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 and/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 and/or
Depository Participants owning or representing, respectively, such required percentage of
the beneficial interest in the Notes and has delivered such instructions to the Indenture
Trustee.
Section 4.07 Notices to Depository. Whenever a notice or other communication to the
Noteholders of the Notes is required under this Indenture, unless and until Definitive Notes
shall have been issued to Beneficial Owners pursuant to Section 4.08, the Indenture Trustee
shall give all such notices and communications specified herein to be given to Noteholders
of the Notes to the Depository, and shall have no obligation to the Beneficial Owners.
Section 4.08 Definitive Notes. If (i) the Depositor determines that the Depository is no
longer willing or able to properly discharge its responsibilities with respect to the Notes
and the Depositor is unable to locate a qualified successor, (ii) the Depositor, with the
prior consent of the Beneficial Owners, notifies the Indenture Trustee and the Depository
that it has elected to terminate the book-entry system through the Depository, or
(iii) after the occurrence of an Event of Default, Beneficial Owners of Notes representing
beneficial interests aggregating at least a majority of the aggregate Term Note Balance of
the Notes advise the Depository in writing that the continuation of a book-entry system
through the Depository is no longer in the best interests of the Beneficial Owners, then the
Depository shall notify all Beneficial Owners and the Indenture Trustee of the occurrence of
any such event and of the availability of Definitive Notes to Beneficial Owners requesting
the same. Upon surrender by the Depository to the Indenture Trustee of the typewritten
Notes representing the Book-Entry Notes by the Depository (or Percentage Interest of the
Book-Entry Notes being transferred pursuant to clause (iii) above), accompanied by
registration instructions, the Issuer shall execute and the Indenture Trustee shall
authenticate the Definitive Notes in accordance with the instructions of the Depository.
None of the Issuer, the Note Registrar or the Indenture Trustee shall be liable for any
delay in delivery of such instructions, and each may conclusively rely on, and shall be
protected in relying on, such instructions. Upon the issuance of Definitive Notes, the
Indenture Trustee shall recognize the Noteholders of the Definitive Notes as Noteholders.
Section 4.09 Tax Treatment. The Issuer has entered into this Indenture, and the Notes will
be issued, with the intention that, for federal, state and local income, single business and
franchise tax purposes, the Notes will be treated as indebtedness for purposes of such
taxes. The Issuer, by entering into this Indenture, and each Noteholder, by its acceptance
of its Note (and each Beneficial Owner by its acceptance of an interest in the applicable
Book-Entry Note), agree to treat the Notes for federal, state and local income, single
business and franchise tax purposes as indebtedness.
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. or 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;
(3) the Issuer has paid or caused to be paid all other sums payable hereunder and under
the Insurance Agreement by the Issuer; and
(4) the Issuer has delivered to the Indenture Trustee and the Credit 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.
(a) The Issuer and the Indenture Trustee acknowledge that (i) to the extent the Credit
Enhancer makes payments under the Policy on account of principal of or interest on the Home
Loans, the Credit Enhancer will be fully subrogated to the rights the Noteholders to receive
such principal of and interest on the Home Loans, and (ii) the Credit 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 Credit Enhancer for action to preserve or enforce the Credit 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 Credit Enhancer
hereunder.
Following the payment in full of the Notes, the Credit 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 Credit 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 written 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
Credit 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 written direction of the Credit 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 Credit Enhancer (unless a Credit Enhancer Default has occurred and is continuing), 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
Credit Enhancer or the Noteholders of Notes representing a majority of the aggregate Note
Balance of the Notes, with the written consent of the Credit 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 Noteholders.
(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
Credit Enhancer may, or, at the written direction of the Credit 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 Credit Enhancer (or, if a Credit Enhancer Defaults 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 Credit Enhancer for any amounts drawn under the Policy and any other amounts due the
Credit Enhancer under the Insurance Agreement or (C) the Indenture Trustee determines that
the Home 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 Credit Enhancer (or,
if a Credit Enhancer Defaults has occurred and is continuing, 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 Home Loans by the Servicer as provided in the Servicing
Agreement. Notwithstanding any sale of the Home 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 the terms of the Policy.
(b) If the Indenture Trustee collects any money or property pursuant to this Article V,
it shall pay out such money or property in the following order:
FIRST: to the Indenture Trustee for amounts due under Section 6.07;
SECOND:to the Noteholders for amounts due and unpaid on the related Notes for
interest, including accrued and unpaid interest on the Notes for any prior
Payment Date, ratably, without preference or priority of any kind, according
to the amounts due and payable on such Notes for interest from amounts
available in the Trust Estate for such Noteholders, but excluding any Interest
Shortfalls;
THIRD: to the Noteholders for amounts due and unpaid on the related Notes for
principal, ratably, without preference or priority of any kind, according to
the amounts due and payable on such Notes for principal, from amounts
available in the Trust Estate for such Noteholders, until the respective Note
Balances of such Notes have been reduced to zero;
FOURTH:to the payment of all amounts due and owing the Credit Enhancer under
the Insurance Agreement;
FIFTH: to the Noteholders for amounts due and unpaid on the related Notes for
Interest Shortfalls, if any, including any unpaid Interest Shortfalls on the
Notes for any prior Payment Date, ratably, without preference or priority of
any kind, according to such amounts due and payable from amounts available in
the Trust Estate for such Noteholders;
SIXTH: to the Certificate Paying Agent for amounts due under Article VIII of
the Trust Agreement; and
SEVENTH: to the payment of the remainder, if any, to the Issuer or any
other person legally entitled thereto.
The Indenture Trustee may fix a record date and payment date for any payment to
Noteholders pursuant to this Section 5.04. At least 15 days before such record date, the
Indenture Trustee shall mail to each Noteholder a notice that states the record date, the
payment date and the amount to be paid.
Section 5.05 Optional Preservation of the Trust Estate. If the Notes have been declared
due and payable under Section 5.02 following an Event of Default and such declaration and
its consequences have not been rescinded and annulled, the Indenture Trustee may, but need
not (but shall at the written direction of the Credit Enhancer so long as no Credit 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 Credit 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 Credit Enhancer.
It is understood and intended that no Noteholder shall have any right in any manner
whatever by virtue of, or by availing of, any provision of this Indenture to affect, disturb
or prejudice the rights of any other Noteholders or to obtain or to seek to obtain priority
or preference over any other Noteholders or to enforce any right under this Indenture,
except in the manner herein provided.
In the event the Indenture Trustee shall receive conflicting or inconsistent requests
and indemnity from two or more groups of Noteholders, each representing less than a majority
of the aggregate Note Balance of the Notes, the Indenture Trustee shall act at the direction
of the group of Noteholders with the greater Note Balance. In the event that the Indenture
Trustee shall receive conflicting or inconsistent requests and indemnity from two or more
groups of Noteholders representing the same Note Balance, then the Indenture Trustee in its
sole discretion may determine what action, if any, shall be taken, notwithstanding any other
provisions of this Indenture.
Section 5.07 Unconditional Rights of Noteholders to Receive Principal and Interest.
Subject to the provisions of this Indenture, the Noteholder of any Note shall have the
right, which is absolute and unconditional, to receive payment of the principal of and
interest, if any, on such Note on or after the respective due dates thereof expressed in
such Note or in this Indenture and to institute suit for the enforcement of any such
payment, and such right shall not be impaired without the consent of such Noteholder.
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 Credit 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 Credit 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 Credit Enhancer or Noteholders. The Credit Enhancer (so long as no
Credit Enhancer Default exists) or the Noteholders of a majority of the aggregate Note
Balance of Notes with the consent of the Credit 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 written direction to the Indenture
Trustee to sell or liquidate the Trust Estate shall be by the Credit Enhancer (so long as no
Credit 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 Credit 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 Indenture Trustee has received
satisfactory indemnity from the Credit 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 Credit Enhancer (so long as no Credit
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 Credit Enhancer, may waive any past Event
of Default and its consequences, except an Event of Default (a) with respect to payment of
principal of or interest on any of the Notes or (b) in respect of a covenant or provision
hereof that cannot be modified or amended without the consent of the Noteholder of each
Note. In the case of any such waiver, the Issuer, the Indenture Trustee and the Noteholders
shall be restored to their respective former positions and rights hereunder; but no such
waiver shall extend to any subsequent or other Event of Default or impair any right
consequent thereto.
Upon any such waiver, any Event of Default arising therefrom shall be deemed to have
been cured and not to have occurred, for every purpose of this Indenture; but no such waiver
shall extend to any subsequent or other Event of Default or impair any right consequent
thereto.
Section 5.13 Undertaking for Costs. All parties to this Indenture agree, and each
Noteholder by such Noteholder's acceptance of the related Note shall be deemed to have
agreed, that any court may in its discretion require, in any Proceeding for the enforcement
of any right or remedy under this Indenture, or in any Proceeding against the Indenture
Trustee for any action taken, suffered or omitted by it as Indenture Trustee, the filing by
any party litigant in such Proceeding of an undertaking to pay the costs of such Proceeding,
and that such court may in its discretion assess reasonable costs, including reasonable
attorneys' fees, against any party litigant in such Proceeding, having due regard to the
merits and good faith of the claims or defenses made by such party litigant; but the
provisions of this Section 5.13 shall not apply to (a) any Proceeding instituted by the
Indenture Trustee, (b) any Proceeding instituted by any Noteholder, or group of Noteholders,
in each case holding in the aggregate more than 10% of the aggregate Note Balance of the
Notes or (c) any Proceeding instituted by any Noteholder for the enforcement of the payment
of principal of or interest on any Note on or after the respective due dates expressed in
such Note and in this Indenture.
Section 5.14 Waiver of Stay or Extension Laws. The Issuer covenants (to the extent that it
may lawfully do so) that it will not at any time insist upon, or plead or in any manner
whatsoever, claim or take the benefit or advantage of, any stay or extension law wherever
enacted, now or at any time hereafter in force, that may affect the covenants or the
performance of this Indenture; and the Issuer (to the extent that it may lawfully do so)
hereby expressly waives all benefit or advantage of any such law, and covenants that it
shall not hinder, delay or impede the execution of any power herein granted to the Indenture
Trustee, but will suffer and permit the execution of every such power as though no such law
had been enacted.
Section 5.15 Sale of Trust Estate.
(a) The power to effect any sale or other disposition (a "Sale") of any portion of the
Trust Estate pursuant to Section 5.04 is expressly subject to the provisions of Section 5.05
and this Section 5.15. The power to effect any such Sale shall not be exhausted by any one
or more Sales as to any portion of the Trust Estate remaining unsold, but shall continue
unimpaired until the entire Trust Estate shall have been sold or all amounts payable on the
Notes and under this Indenture and under the Insurance Agreement shall have been paid. The
Indenture Trustee may from time to time postpone any public Sale by public announcement made
at the time and place of such Sale. The Indenture Trustee hereby expressly waives its right
to any amount fixed by law as compensation for any Sale.
(b) The Indenture Trustee shall not in any private Sale sell the Trust Estate, or any
portion thereof, unless:
(i) the Credit Enhancer directs the Indenture Trustee in writing to make, such Sale,
(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 Credit Enhancer in respect of amounts drawn under the Policy and
any other amounts due the Credit 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 Credit Enhancer consents
in writing 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 Credit 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
subsection (b) of this Section 5.15 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 Credit Enhancer, purchase the
property offered for sale, and upon compliance with the terms of sale may hold,
retain and possess and dispose of such property, without further accountability, and
may, in paying the purchase money therefor, deliver any Notes or claims for interest
thereon in lieu of cash up to the amount which shall, upon distribution of the net
proceeds of such sale, be payable thereon, and such Notes, in case the amounts so
payable thereon shall be less than the amount due thereon, shall be returned to the
Noteholders thereof after being appropriately stamped to show such partial payment;
(ii) the Indenture Trustee may bid for and acquire the property offered for Sale in
connection with any Sale thereof and, subject to any requirements of, and to the
extent permitted by, applicable law in connection therewith, may purchase all or any
portion of the Trust Estate in a private sale. In lieu of paying cash therefor, the
Indenture Trustee may make settlement for the purchase price by crediting the gross
Sale price against the sum of (A) the amount that would be distributable to the
Noteholders and the Certificateholders and amounts owing to the Credit Enhancer as a
result of such Sale in accordance with Section 5.04(b) on the Payment Date next
succeeding the date of such Sale and (B) the expenses of the Sale and of any
Proceedings in connection therewith that are reimbursable to it, without being
required to produce the Notes in order to complete any such Sale or in order for the
net Sale price to be credited against such Notes, and any property so acquired by the
Indenture Trustee shall be held and dealt with by it in accordance with the
provisions of this Indenture;
(iii) the Indenture Trustee shall execute and deliver an appropriate instrument of
conveyance transferring its interest in any portion of the Trust Estate in connection
with a Sale thereof;
(iv) the Indenture Trustee is hereby irrevocably appointed the agent and attorney-in-fact
of the Issuer to transfer and convey its interest in any portion of the Trust Estate
in connection with a Sale thereof, and to take all action necessary to effect such
Sale; and
(v) no purchaser or transferee at such a Sale shall be bound to ascertain the Indenture
Trustee's authority, inquire into the satisfaction of any conditions precedent or see
to the application of any monies.
Section 5.16 Action on Notes. The Indenture Trustee's right to seek and recover judgment
on the Notes or under this Indenture shall not be affected by the seeking, obtaining or
application of any other relief under or with respect to this Indenture. Neither the lien
of this Indenture nor any rights or remedies of the Indenture Trustee or the Noteholders
shall be impaired by the recovery of any judgment by the Indenture Trustee against the
Issuer or by the levy of any execution under such judgment upon any portion of the Trust
Estate or upon any of the assets of the Issuer. Any money or property collected by the
Indenture Trustee shall be applied in accordance with Section 5.04(b).
Section 5.17 Performance and Enforcement of Certain Obligations.
(a) Promptly following a written request from the Credit Enhancer or the Indenture
Trustee (with the written consent of the Credit Enhancer), the Issuer, in its capacity as
owner of the Home Loans, shall, with the written consent of the Credit 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 Home 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 Home Loans, subject to the rights of the Credit 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 Home 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 paragraph (a) of this Section 6.01;
(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 Credit Enhancer that the Credit 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) [Reserved].
(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 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 Agreement, 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
Credit Enhancer or 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 Agreement or to institute, conduct or defend any litigation
hereunder or in relation hereto at the request, order or direction of any of the Noteholders
or the Credit Enhancer, pursuant to the provisions of this Agreement, unless the Noteholders
or the Credit Enhancer 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 Agreement, 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 notice thereof to the Credit 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 the 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 Credit
Enhancer. The Credit Enhancer or the Noteholders of a majority of the aggregate Note
Balance of the Notes may remove the Indenture Trustee by so notifying the Indenture Trustee
and the Credit 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 Credit Enhancer, which consent shall not be
unreasonably withheld. In addition, the Indenture Trustee shall resign to avoid being
directly or indirectly controlled by the Issuer.
A successor Indenture Trustee shall deliver a written acceptance of its appointment
to the retiring Indenture Trustee and to the Issuer. Thereupon, the resignation or removal
of the retiring Indenture Trustee shall become effective, and the successor Indenture
Trustee shall have all the rights, powers and duties of the Indenture Trustee under this
Indenture. The successor Indenture Trustee shall mail a notice of its succession to the
Noteholders. The retiring Indenture Trustee shall promptly transfer all property held by it
as Indenture Trustee to the successor Indenture Trustee.
If a successor Indenture Trustee does not take office within 60 days after the
retiring Indenture Trustee resigns or is removed, then the retiring Indenture Trustee, the
Issuer or the Noteholders of a majority of aggregate Note Balance of the Notes may petition
any court of competent jurisdiction for the appointment of a successor Indenture Trustee.
If the Indenture Trustee fails to comply with Section 6.11, any Noteholder may
petition any court of competent jurisdiction for the removal of the Indenture Trustee and
the appointment of a successor Indenture Trustee.
Notwithstanding the replacement of the Indenture Trustee pursuant to this Section,
the Issuer's obligations under Section 6.07 shall continue for the benefit of the retiring
Indenture Trustee.
Section 6.09 Successor Indenture Trustee by Xxxxxx. If the Indenture Trustee consolidates
with, merges or converts into, or transfers all or substantially all its corporate trust
business or assets to, another corporation or banking association, then the resulting,
surviving or transferee corporation without any further act shall be the successor Indenture
Trustee; provided, that such corporation or banking association shall be otherwise qualified
and eligible under Section 6.11. The Indenture Trustee shall provide the Rating Agencies
with written notice of any such transaction occurring after the Closing Date.
If at the time of any such succession by merger, conversion or consolidation, any of
the Notes shall have been authenticated but not delivered, then any such successor to the
Indenture Trustee may adopt the certificate of authentication of any predecessor trustee,
and deliver such Notes so authenticated. If at such time any of the Notes shall not have
been authenticated, any successor to the Indenture Trustee may authenticate such Notes
either in the name of any predecessor hereunder or in the name of the successor to the
Indenture Trustee; and in all such cases, such certificates shall have the full force that
it is anywhere in the Notes or in this Indenture provided that the certificate of the
Indenture Trustee shall have.
Section 6.10 Appointment of Co-Indenture Trustee or Separate Indenture Trustee.
(a) Notwithstanding any other provisions of this Indenture, at any time, for the purpose
of meeting any legal requirement of any jurisdiction in which any part of the Trust Estate
may at such time be located, the Indenture Trustee shall have the power and may execute and
deliver all instruments to appoint one or more Persons to act as a co-trustee or
co-trustees, or separate trustee or separate trustees, of all or any part of the Issuer, and
to vest in such Person or Persons, in such capacity and for the benefit of the Noteholders,
such title to the Trust Estate, or any part thereof, and, subject to the other provisions of
this Section, such powers, duties, obligations, rights and trusts as the Indenture Trustee
may consider necessary or desirable. No co-trustee or separate trustee hereunder shall be
required to meet the terms of eligibility as a successor trustee under Section 6.11, and no
notice to Noteholders of the appointment of any co-trustee or separate trustee shall be
required under Section 6.08 hereof.
(b) Every separate trustee and co-trustee shall, to the extent permitted by law, be
appointed and act subject to the following provisions and conditions:
(i) all rights, powers, duties and obligations conferred or imposed upon the Indenture
Trustee shall be conferred or imposed upon and exercised or performed by the
Indenture Trustee and such separate trustee or co-trustee jointly (it being
understood that such separate trustee or co-trustee is not authorized to act
separately without the Indenture Trustee joining in such act), except to the extent
that under any law of any jurisdiction in which any particular act or acts are to be
performed the Indenture Trustee shall be incompetent or unqualified to perform such
act or acts, in which event such rights, powers, duties and obligations (including
the holding of title to the Trust Estate or any portion thereof in any such
jurisdiction) shall be exercised and performed singly by such separate trustee or
co-trustee, but solely at the direction of the Indenture Trustee;
(ii) no trustee hereunder shall be personally liable by reason of any act or omission of
any other trustee hereunder; and
(iii) the Indenture Trustee may at any time accept the resignation of or remove any
separate trustee or co-trustee.
(c) Any notice, request or other writing given to the Indenture Trustee shall be deemed
to have been given to each of the then separate trustees and co-trustees, as effectively as
if given to each of them. Every instrument appointing any separate trustee or co-trustee
shall refer to this Agreement 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 and a long-term debt rating of A-1 or better by Standard & Poor's. 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 TIA
ss. 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
Home Loans.
Section 6.14 Directions to Indenture Trustee. The Indenture Trustee is hereby directed:
(a) to accept the pledge of the Home Loans and hold the assets of the Trust in trust for
the Noteholders and the Credit Enhancer;
(b) to authenticate and deliver the Notes substantially in the form prescribed by Exhibit
A in accordance with the terms of this Indenture; and
(c) to take all other actions as shall be required to be taken by the terms of this
Indenture.
Section 6.15 Indenture Trustee May Own Securities. The Indenture Trustee, in its
individual or any other capacity, may become the owner or pledgee of Securities with the
same rights it would have if it were not Indenture Trustee.
ARTICLE VII
Noteholders' Lists and Reports
Section 7.01 Issuer to Furnish Indenture Trustee Names and Addresses of Noteholders. The
Issuer shall furnish or cause to be furnished to the Indenture Trustee (a) not more than
five days after each Record Date, a list, in such form as the Indenture Trustee may
reasonably require, of the names and addresses of the Noteholders as of such Record Date,
and (b) at such other times as the Indenture Trustee and the Credit Enhancer may request in
writing, within 30 days after receipt by the Issuer of any such request, a list of similar
form and content as of a date not more than 10 days prior to the time such list is
furnished; provided, however, that for so long as the Indenture Trustee is the Note
Registrar, no such list need be furnished.
Section 7.02 Preservation of Information; Communications to Noteholders.
(a) The Indenture Trustee shall preserve, in as current a form as is reasonably
practicable, the names and addresses of the Noteholders contained in the most recent list
furnished to the Indenture Trustee as provided in Section 7.01 and the names and addresses
of the Noteholders received by the Indenture Trustee in its capacity as Note Registrar. The
Indenture Trustee may destroy any list furnished to it as provided in such Section 7.01 upon
receipt of a new list so furnished.
(b) Noteholders may communicate pursuant to TIAss. 312(b) with other Noteholders with
respect to their rights under this Indenture or under the Notes.
(c) The Issuer, the Indenture Trustee and the Note Registrar shall have the protection of
TIAss. 312(c).
Section 7.03 Reports by Issuer.
(a) The Issuer shall:
(i) file with the Indenture Trustee, within 15 days after the Issuer is required to file
the same with the Commission, copies of the annual reports and the information,
documents and other reports (or copies of such portions of any of the foregoing as
the Commission may from time to time by rules and regulations prescribe) that the
Issuer may be required to file with the Commission pursuant to Section 13 or 15(d) of
the Exchange Act;
(ii) file with the Indenture Trustee and the Commission, in accordance with rules and
regulations prescribed from time to time by the Commission, such additional
information, documents and reports with respect to compliance by the Issuer with the
conditions and covenants of this Indenture as may be required from time to time by
such rules and regulations; and
(iii) supply to the Indenture Trustee (and the Indenture Trustee shall transmit by mail to
all Noteholders described in TIAss. 313(c)) such summaries of any information,
documents and reports required to be filed by the Issuer pursuant to clauses (i) and
(ii) of this Section 7.03(a) and by rules and regulations prescribed from time to
time by the Commission.
(b) Unless the Issuer otherwise determines, the fiscal year of the Issuer shall end on
December 31 of each year.
Section 7.04 Reports by Indenture Trustee. If required by TIAss. 313(a), within 60 days
after each January 1, beginning with January 1, 2007, the Indenture Trustee shall make
available to each Noteholder as required by TIAss. 313(c) and to the Credit 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
Credit 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 Credit 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 Credit 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 Officer's
Certificate and a letter from the Credit Enhancer stating that the Credit 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 Credit 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 Credit Enhancer (which consent shall
not be unreasonably withheld and so long as no Credit 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
Credit 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 Credit
Enhancer (as evidenced by an Opinion of Counsel);
(vii) to evidence and provide for the acceptance of the appointment hereunder by a
successor trustee with respect to the Notes and to add to or change any of the
provisions of this Indenture as shall be necessary to facilitate the administration
of the trusts hereunder by more than one trustee, pursuant to the requirements of
Article VI; or
(viii) to modify, eliminate or add to the provisions of this Indenture to such extent as
shall be necessary to effect the qualification of this Indenture under TIA or under
any similar federal statute hereafter enacted and to add to this Indenture such other
provisions as may be expressly required by TIA;
provided, however, that no such supplemental indenture shall be entered into unless the
Indenture Trustee shall have received an Opinion of Counsel to the effect that the execution
of such supplemental indenture will not give rise to any material adverse tax consequence to
the Noteholders.
The Indenture Trustee is hereby authorized to join in the execution of any such
supplemental indenture and to make any further appropriate agreements and stipulations that
may be therein contained.
(b) The Issuer and the Indenture Trustee, when authorized by an Issuer Request, may,
without the consent of any Noteholder but with prior notice to the Rating Agencies and the
Credit 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
Credit 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 Credit Enhancer and the Noteholders of not less
than a majority of the Note Balances of each Class of Notes affected thereby, by Act (as
defined in Section 10.03 hereof) of such Noteholders delivered to the Issuer and the
Indenture Trustee, enter into an indenture or indentures supplemental hereto for the purpose
of adding any provisions to, or changing in any manner or eliminating any of the provisions
of, this Indenture or of modifying in any manner the rights of the Noteholders under this
Indenture; provided, however, that no such supplemental indenture shall, without the consent
of the Noteholder of each Note affected thereby:
(a) change the date of payment of any installment of principal of or interest on any
Note, or reduce the principal amount thereof or the Note Rate thereon, change the provisions
of this Indenture relating to the application of collections on, or the proceeds of the sale
of, the Trust Estate to payment of principal of or interest on the Notes, or change any
place of payment where, or the coin or currency in which, any Note or the interest thereon
is payable, or impair the right to institute suit for the enforcement of the provisions of
this Indenture requiring the application of funds available therefor, as provided in
Article V, to the payment of any such amount due on the Notes on or after the respective due
dates thereof;
(b) reduce the percentage of the Note Balances of any Class of Notes, the consent of the
Noteholders of which is required for any such supplemental indenture, or the consent of the
Noteholders of which is required for any waiver of compliance with certain provisions of
this Indenture or certain defaults hereunder and their consequences provided for in this
Indenture;
(c) modify or alter the provisions of the proviso to the definition of the term
"Outstanding" or modify or alter the exception in the definition of the term "Noteholder";
(d) reduce the percentage of the aggregate Note Balance of the Notes required to direct
the Indenture Trustee to direct the Issuer to sell or liquidate the Trust Estate pursuant to
Section 5.04;
(e) modify any provision of this Section 9.02 except to increase any percentage specified
herein or to provide that certain additional provisions of this Indenture or the other Basic
Documents cannot be modified or waived without the consent of the Noteholder of each Note
affected thereby;
(f) modify any of the provisions of this Indenture in such manner as to affect the
calculation of the amount of any payment of interest or principal due on any Note on any
Payment Date (including the calculation of any of the individual components of such
calculation); or
(g) permit the creation of any lien ranking prior to or on a parity with the lien of this
Indenture with respect to any part of the Trust Estate or, except as otherwise permitted or
contemplated herein, terminate the lien of this Indenture on any property at any time
subject hereto or deprive the Noteholder of any Note of the security provided by the lien of
this Indenture; and provided further, that such action shall not, as evidenced by an Opinion
of Counsel, cause the Issuer to be subject to an entity level tax.
The Indenture Trustee may in its discretion determine whether or not any Notes would
be affected by any supplemental indenture and any such determination shall be conclusive
upon the Noteholders of all Notes, whether theretofore or thereafter authenticated and
delivered hereunder. The Indenture Trustee shall not be liable for any such determination
made in good faith.
It shall not be necessary for any Act (as defined in Section 10.03 hereof) of
Noteholders under this Section 9.02 to approve the particular form of any proposed
supplemental indenture, but it shall be sufficient if such Act shall approve the substance
thereof.
Promptly after the execution by the Issuer and the Indenture Trustee of any
supplemental indenture pursuant to this Section 9.02, the Indenture Trustee shall mail to
the Noteholders of the Notes to which such amendment or supplemental indenture relates a
notice setting forth in general terms the substance of such supplemental indenture. Any
failure of the Indenture Trustee to mail such notice, or any defect therein, shall not,
however, in any way impair or affect the validity of any such supplemental indenture.
Section 9.03 Execution of Supplemental Indentures. In executing, or permitting the
additional trusts created by, any supplemental indenture permitted by this Article IX or the
modification thereby of the trusts created by this Indenture, the Indenture Trustee shall be
entitled to receive and, subject to Sections 6.01 and 6.02, shall be fully protected in
relying upon, an Opinion of Counsel stating that the execution of such supplemental
indenture is authorized or permitted by this Indenture. The Indenture Trustee may, but
shall not be obligated to, enter into any such supplemental indenture that affects the
Indenture Trustee's own rights, duties, liabilities or immunities under this Indenture or
otherwise.
Section 9.04 Effect of Supplemental Indenture. Upon the execution of any supplemental
indenture pursuant to the provisions hereof, this Indenture shall be and shall be deemed to
be modified and amended in accordance therewith with respect to the Notes affected thereby,
and the respective rights, limitations of rights, obligations, duties, liabilities and
immunities under this Indenture of the Indenture Trustee, the Issuer and the Noteholders
shall thereafter be determined, exercised and enforced hereunder subject in all respects to
such modifications and amendments, and all the terms and conditions of any such supplemental
indenture shall be and be deemed to be part of the terms and conditions of this Indenture
for any and all purposes.
Section 9.05 Conformity with Trust Indenture Act. Every amendment of this Indenture and
every supplemental indenture executed pursuant to this Article IX shall conform to the
requirements of TIA as in effect at the time of such amendment or supplement so long as this
Indenture shall then be qualified under TIA.
Section 9.06 Reference in Notes to Supplemental Indentures. Notes authenticated and
delivered after the execution of any supplemental indenture pursuant to this Article IX may,
and if required by the Indenture Trustee, shall, bear a notation in form approved by the
Indenture Trustee as to any matter provided for in such supplemental indenture. If the
Issuer or the Indenture Trustee shall so determine, new Notes so modified as to conform, in
the opinion of the Indenture Trustee and the Issuer, to any such supplemental indenture may
be prepared and executed by the Issuer and authenticated and delivered by the Indenture
Trustee in exchange for Outstanding Notes.
ARTICLE X
Miscellaneous
Section 10.01 Compliance Certificates and Opinions, etc.
(a) Upon any application or request by the Issuer to the Indenture Trustee to take any
action under any provision of this Indenture, the Issuer shall furnish to the Indenture
Trustee and to the Credit 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 Home 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 either Seller or
the Issuer, stating that the information with respect to such factual matters is in the
possession of either 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, Credit 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 XX Xxxxxx Xxxxx Bank, N.A.,
000 X. Xxxxxx Xxxxxx, 00xx Xxxxx, Xxxxxxx, Xxxxxxxx 00000 - GMACM 2006-HLTV1. 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 Loan Trust 2006-HLTV1, 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 Credit 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, 0xx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: Structured Finance
Surveillance (GMACM Home Loan Trust 2006-HLTV1), telecopier number (000) 000-0000. The
Credit 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 Xxxxxxxx 00xx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: Asset
Backed Surveillance; or, as to each of the foregoing Persons, at such other address as shall
be designated by written notice to the other foregoing Persons.
Section 10.05 Notices to Noteholders; Waiver. Where this Indenture provides for notice to
Noteholders of any event, such notice shall be sufficiently given (unless otherwise herein
expressly provided) if in writing and mailed, first-class, postage prepaid to each
Noteholder affected by such event, at such Person's address as it appears on the Note
Register, not later than the latest date, and not earlier than the earliest date, prescribed
for the giving of such notice. In any case where notice to Noteholders is given by mail,
neither the failure to mail such notice nor any defect in any notice so mailed to any
particular Noteholder shall affect the sufficiency of such notice with respect to other
Noteholders, and any notice that is mailed in the manner herein provided shall conclusively
be presumed to have been duly given regardless of whether such notice is in fact actually
received.
Where this Indenture provides for notice in any manner, such notice may be waived in
writing by any Person entitled to receive such notice, either before or after the event, and
such waiver shall be the equivalent of such notice. Waivers of notice by Noteholders shall
be filed with the Indenture Trustee, but such filing shall not be a condition precedent to
the validity of any action taken in reliance upon such a waiver.
In case, by reason of the suspension of regular mail service as a result of a strike,
work stoppage or similar activity, it shall be impractical to mail notice of any event to
Noteholders when such notice is required to be given pursuant to any provision of this
Indenture, then any manner of giving such notice as shall be satisfactory to the Indenture
Trustee shall be deemed to be a sufficient giving of such notice.
Where this Indenture provides for notice to the Rating Agencies, failure to give such
notice shall not affect any other rights or obligations created hereunder, and shall not
under any circumstance constitute an Event of Default.
Section 10.06 Alternate Payment and Notice Provisions. Notwithstanding any provision of
this Indenture or any of the Notes to the contrary, the Issuer may enter into any agreement
with any Noteholder providing for a method of payment, or notice by the Indenture Trustee to
such Noteholder, that is different from the methods provided for in this Indenture for such
payments or notices. The Issuer shall furnish to the Indenture Trustee a copy of each such
agreement and the Indenture Trustee shall cause payments to be made and notices to be given
in accordance with such agreements.
Section 10.07 Conflict with Trust Indenture Act. If any provision hereof limits, qualifies
or conflicts with another provision hereof that is required to be included in this Indenture
by any of the provisions of TIA, such required provision shall control.
The provisions of XXXxx.xx. 310 through 317 that impose duties on any Person (including
the provisions automatically deemed included herein unless expressly excluded by this
Indenture) are a part of and govern this Indenture, whether or not physically contained
herein.
Section 10.08 Effect of Headings. The Article and Section headings herein are for
convenience only and shall not affect the construction hereof.
Section 10.09 Successors and Assigns. All covenants and agreements in this Indenture and
the Notes by the Issuer shall bind its successors and assigns, whether so expressed or not.
All agreements of the Indenture Trustee in this Indenture shall bind its successors,
co-trustees and agents.
Section 10.10 Severability. In case any provision in this Indenture or in the Notes shall
be held invalid, illegal or unenforceable, the validity, legality, and enforceability of the
remaining provisions hereof shall not in any way be affected or impaired thereby.
Section 10.11 Benefits of Indenture. Nothing in this Indenture or in the Notes, express or
implied, shall give to any Person, other than the parties hereto and their successors
hereunder, and the Noteholders, the Credit 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 Credit Enhancer
shall be a third party beneficiary of this Agreement.
Section 10.12 Legal Holidays. In any case where the date on which any payment is due shall
not be a Business Day, then (notwithstanding any other provision of the Notes or this
Indenture) payment need not be made on such date, but may be made on the next succeeding
Business Day with the same force and effect as if made on the date on which nominally due,
and no interest shall accrue for the period from and after any such nominal date.
Section 10.13 GOVERNING LAW. THIS INDENTURE SHALL BE CONSTRUED IN ACCORDANCE WITH THE LAWS
OF THE STATE OF NEW YORK, WITHOUT REFERENCE TO ITS CONFLICTS OF LAW PROVISIONS (EXCEPT
SECTIONS 5-1401 and 5-102 OF THE NEW YORK GENERAL OBLIGATION LAW), AND THE OBLIGATIONS,
RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH
LAWS.
Section 10.14 Counterparts. This Indenture may be executed in any number of counterparts,
each of which so executed shall be deemed to be an original, but all such counterparts shall
together constitute but one and the same instrument.
Section 10.15 Recording of Indenture. If this Indenture is subject to recording in any
appropriate public recording offices, such recording is to be effected by the Issuer and at
its expense accompanied by an Opinion of Counsel (which counsel shall be reasonably
acceptable to the Indenture Trustee) to the effect that such recording is necessary either
for the protection of the Noteholders or any other Person secured hereunder or for the
enforcement of any right or remedy granted to the Indenture Trustee under this Indenture.
Section 10.16 Issuer Obligation. No recourse may be taken, directly or indirectly, with
respect to the obligations of the Issuer, the Owner Trustee or the Indenture Trustee on the
Notes or under this Indenture or any certificate or other writing delivered in connection
herewith or therewith, against (i) the Indenture Trustee or the Owner Trustee in its
individual capacity, (ii) any owner of a beneficial interest in the Issuer or (iii) any
partner, owner, beneficiary, agent, officer, director, employee or agent of the Indenture
Trustee or the Owner Trustee in its individual capacity, any holder of a beneficial interest
in the Issuer, the Owner Trustee or the Indenture Trustee or of any successor or assign of
the Indenture Trustee or the Owner Trustee in its individual capacity, except as any such
Person may have expressly agreed (it being understood that the Indenture Trustee and the
Owner Trustee have no such obligations in their respective individual capacities), and
except that any such partner, owner or beneficiary shall be fully liable, to the extent
provided by applicable law, for any unpaid consideration for stock, unpaid capital
contribution or failure to pay any installment or call owing to such entity. For all
purposes of this Indenture, in the performance of any duties or obligations of the Issuer
hereunder, the Owner Trustee shall be subject to, and entitled to the benefits of, the terms
and provisions of Articles VI, VII and VIII of the Trust Agreement.
Section 10.17 No Petition. The Indenture Trustee, by entering into this Indenture, and each
Noteholder, by its acceptance of a Note, hereby covenant and agree that they will not at any
time institute against the Depositor or the Issuer, or join in any institution against the
Depositor or the Issuer of, any bankruptcy, reorganization, arrangement, insolvency or
liquidation proceedings, or other proceedings under any United States federal or state
bankruptcy or similar law in connection with any obligations relating to the Notes, this
Indenture or any of the other Basic Documents.
Section 10.18 Inspection. The Issuer agrees that, on reasonable prior notice, it shall
permit any representative of the Indenture Trustee, during the Issuer's normal business
hours, to examine all the books of account, records, reports and other papers of the Issuer,
to make copies and extracts therefrom, to cause such books to be audited by Independent
certified public accountants, and to discuss the Issuer's affairs, finances and accounts
with the Issuer's officers, employees, and Independent certified public accountants, all at
such reasonable times and as often as may be reasonably requested. The Indenture Trustee
shall and shall cause its representatives to hold in confidence all such information except
to the extent disclosure may be required by law (and all reasonable applications for
confidential treatment are unavailing) and except to the extent that the Indenture Trustee
may reasonably determine that such disclosure is consistent with its obligations hereunder.
IN WITNESS WHEREOF, the Issuer and the Indenture Trustee have caused their names to
be signed hereto by their respective officers thereunto duly authorized, all as of the day
and year first above written.
GMACM HOME LOAN TRUST 2006-HLTV1,
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,
xxxxxx accepts the appointment as Paying
Agent pursuant to Section 3.03 hereof
and as Note Registrar pursuant to Section
4.02 hereof.
By: ______________________________________
Name:
Title:
STATE OF )
) ss.:
COUNTY OF )
On this ___ day of March 2006, before me personally appeared ____________, to me
known, who being by me duly sworn, did depose and say, that he/she resides at _____________,
that he/she is the ____________ of Wilmington Trust Company, the Owner Trustee, one of the
corporations described in and which executed the above instrument; that he/she knows the
seal of said corporation; that the seal affixed to said instrument is such corporate seal;
that it was so affixed by order of the Board of Directors of said corporation; and that
he/she signed his/her name thereto by like order.
Notary Public
Acknowledgements
STATE OF _______________ )
) ss.:
COUNTY OF _____________ )
On this ___ day of March 2006, before me personally appeared __________, to me known,
who being by me duly sworn, did depose and say, that he/she resides at _____________; that
he is the ___________ of JPMorgan Chase Bank, National Association, as Indenture Trustee,
one of the corporations described in and which executed the above instrument; that he/she
knows the seal of said corporation; that the seal affixed to said instrument is such
corporate seal; that it was so affixed by order of the Board of Directors of said
corporation; and that he/she signed his/her name thereto by like order.
Notary Public
NOTORIAL SEAL
EXHIBIT A
FORM OF NOTES
UNLESS THIS NOTE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST
COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE ISSUER OR ITS AGENT FOR REGISTRATION OF
TRANSFER, EXCHANGE OR PAYMENT, AND ANY NOTE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO.
OR IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY
PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY
OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN
INTEREST HEREIN.
THE PRINCIPAL OF THIS NOTE IS PAYABLE IN INSTALLMENTS AS SET FORTH HEREIN. ACCORDINGLY, THE
OUTSTANDING PRINCIPAL AMOUNT OF THIS NOTE AT ANY TIME MAY BE LESS THAN THE AMOUNT SHOWN ON
THE FACE HEREOF.
THIS NOTE DOES NOT REPRESENT AN INTEREST IN OR OBLIGATION OF THE SELLERS, THE DEPOSITOR, THE
SERVICER, THE INDENTURE TRUSTEE, THE OWNER TRUSTEE OR GMAC MORTGAGE GROUP, INC. OR ANY OF
THEIR RESPECTIVE AFFILIATES, EXCEPT AS EXPRESSLY PROVIDED IN THE INDENTURE OR THE OTHER
BASIC DOCUMENTS.
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 LOAN TRUST 2006-HLTV1
GMACM Home Loan-Backed Term Note, Class A-[ ]
Registered Initial Note Balance:
$[ ]
No. [ ] Note Rate:[ ]%
CUSIP NO. [ ]
GMACM Home Loan Trust 2006-HLTV1, a statutory trust duly organized and existing under
the laws of the State of Delaware (herein referred to as the "Issuer"), for value received,
hereby promises to pay to Cede & Co. or its registered assigns, the principal sum of [ ]
($[ ]), payable on each Payment Date in an amount equal to the pro rata portion allocable
hereto (based on the Initial Note Balance specified above and the Initial Note Balance of
all Class A-[ ] Notes) of the aggregate amount, if any, payable from the Note Payment
Account in respect of principal of the Class A-[ ] Notes (the "Notes") pursuant to Section
3.05 of the indenture dated as of March 30, 2006 (the "Indenture"), between the Issuer and
JPMorgan Chase Bank, National Association, as indenture trustee (the "Indenture Trustee");
provided, however, that the entire unpaid principal amount of this Note shall be due and
payable on the Payment Date in [December 2029], 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. The Note Rate for this Note will be [an adjustable rate] [a
fixed rate equal to [ ]% per annum. [Notwithstanding the foregoing, the Note Rate on this
Note will increase by 0.50% to [ ]% per annum beginning with the second Interest Period for
the Class A-5 Notes commencing after the first Payment Date on which the Principal Balance
of the Home Loans is less than 10% of the initial Pool Balance.] Interest on this Note will
accrue for each Payment Date during the calendar month preceding the month in which such
Payment Date occurs. [Interest will be computed on the basis of a 360-day year consisting
of twelve 30 day months.] [Interest will be computed on the basis of a year of 360 days and
the actual number of days elapsed in the related interest period.] Principal of and interest
on this Note shall be paid in the manner specified on the reverse hereof.
Principal of and interest on this Note are payable in such coin or currency of the
United States of America as at the time of payment is legal tender for payment of public and
private debts. All payments made by the Issuer with respect to this Note shall be applied
first to interest due and payable on this Note as provided above and then to the unpaid
principal of this Note.
Unless the certificate of authentication hereon has been executed by the Indenture
Trustee whose name appears below by manual signature, this Note shall not be entitled to any
benefit under the Indenture referred to on the reverse hereof, or be valid or obligatory for
any purpose.
This Note is one of a duly authorized issue of Notes of the Issuer, designated as its
GMACM Home Loan-Backed Term Notes, Series 2006-HLTV1 (the "Series 2006-HLTV1 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-HLTV1 Notes.
The Series 2006-HLTV1 Notes are subject to all terms of the Indenture.
The Series 2006-HLTV1 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 (the "Credit
Enhancer").
Principal of and interest on this Note will be payable on each Payment Date,
commencing on April 25, 2006, as described in the Indenture. "Payment Date" means the
twenty-fifth day of each month, or, if any such date is not a Business Day, then the next
succeeding Business Day.
The entire unpaid principal amount of this Note shall be due and payable in full on
the Payment Date in [December 2029] 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 Credit 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 Credit 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 of a Note, 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-HLTV1 Notes under the Indenture
at any time by the Issuer and the Indenture Trustee with the consent of the Credit 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-HLTV1 Notes, on behalf of the Noteholders of all
Series 2006-HLTV1 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-HLTV1 Notes issued thereunder but with prior notice to the Rating Agencies and
the Credit Enhancer.
The term "Issuer" as used in this Note includes any successor to the Issuer under the
Indenture.
The Issuer is permitted by the Indenture, under certain circumstances, to merge or
consolidate, subject to the rights of the Indenture Trustee and the Noteholders of 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.
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 LOAN TRUST 2006-HLTV1
By: WILMINGTON TRUST COMPANY, not in its
individual capacity but solely as Owner
Trustee
Dated: March 30, 2006
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: March 30, 2006
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 Note in every particular, without
alteration, enlargement or any change whatever. Such signature must be guaranteed by an
"eligible guarantor institution" meeting the requirements of the Note Registrar, which
requirements include membership or participation in STAMP or such other "signature guarantee
program" as may be determined by the Note Registrar in addition to, or in substitution for,
STAMP, all in accordance with the Securities Exchange Act of 1934, as amended.
APPENDIX A
DEFINITIONS
Affiliate: With respect to any Person, any other Person controlling, controlled by
or under common control with such Person. For purposes of this definition, "control" means
the power to direct the management and policies of a Person, directly or indirectly, whether
through ownership of voting securities, by contract or otherwise and "controlling" and
"controlled" shall have meanings correlative to the foregoing.
Appraised Value: With respect to any Mortgaged Property, either (x) the value as
generally set forth in an appraisal of such Mortgaged Property used to establish compliance
with the underwriting criteria then in effect in connection with the application for the
Home Loan secured by such Mortgaged Property, or (y) if the sales price of such Mortgaged
Property was considered in accordance with the underwriting criteria applicable to the
related Home Loan, the lesser of (i) the appraised value referred to in (x) above and (ii)
the sales price of such Mortgaged Property.
Assignment of Mortgage: With respect to any Mortgage, an assignment, notice of
transfer or equivalent instrument, in recordable form, sufficient under the laws of the
jurisdiction in which the related Mortgaged Property is located to reflect the conveyance of
such Mortgage, which assignment, notice of transfer or equivalent instrument may be in the
form of one or more blanket assignments covering Mortgages secured by Mortgaged Properties
located in the same jurisdiction.
Authorized Newspaper: A newspaper of general circulation in the Borough of
Manhattan, The City of New York, printed in the English language and customarily published
on each Business Day, whether or not published on Saturdays, Sundays or holidays.
Authorized Officer: With respect to the Issuer, any officer of the Owner Trustee who
is authorized to act for the Owner Trustee in matters relating to the Issuer and who is
identified on the list of Authorized Officers delivered by the Owner Trustee to the
Indenture Trustee on the Closing Date (as such list may be modified or supplemented from
time to time thereafter).
Bankruptcy Code: The Bankruptcy Code of 1978, as amended.
Basic Documents: The Trust Agreement, the Indenture, the Purchase Agreement, the
Insurance Agreement, the Policy, the Servicing Agreement, the Custodial Agreement and the
other documents and certificates delivered in connection with any of the above.
Beneficial Owner: With respect to any Note, the Person who is the beneficial owner
of such Note as reflected on the books of the Depository or on the books of a Person
maintaining an account with such Depository (directly as a Depository Participant or
indirectly through a Depository Participant, in accordance with the rules of such
Depository).
Billing Cycle: With respect to any Home Loan and Due Date, the calendar month
preceding such Due Date.
Book-Entry Notes: Beneficial interests in the Notes, ownership and transfers of
which shall be made through book entries by the Depository as described in Section 4.06 of
the Indenture.
Business Day: Any day other than (i) a Saturday or a Sunday or (ii) a day on which
banking institutions in the States of New York, Pennsylvania, Delaware or the State in which
the Corporate Trust Office is located are required or authorized by law to be closed.
Certificate Balance: With respect to any Payment Date and any Certificate, an amount
equal to the then applicable Certificate Percentage Interest of such Certificate multiplied
by the Overcollateralization Amount.
Certificate Distribution Amount: For any Payment Date, the amount, if any,
distributable on the Certificates for such Payment Date pursuant to Section 3.05(a)(ix) of
the Indenture.
Certificate of Trust: The Certificate of Trust filed for the Trust pursuant to
Section 3810(a) of the Statutory Trust Statute.
Certificate Paying Agent: The Indenture Trustee, as further described in Section
3.10 of the Trust Agreement.
Certificate Percentage Interest: With respect to any Payment Date and any
Certificate, the Percentage Interest for such Certificate.
Certificate Register: The register maintained by the Certificate Registrar in which
the Certificate Registrar shall provide for the registration of Certificates and of
transfers and exchanges of Certificates.
Certificate Registrar: Initially, the Indenture Trustee, in its capacity as
Certificate Registrar.
Certificateholder: The Person in whose name a Certificate is registered in the
Certificate Register except that, any Certificate registered in the name of the Issuer, the
Owner Trustee or the Indenture Trustee or any Affiliate of the Owner Trustee or the
Indenture Trustee shall be deemed not to be outstanding and the registered holder will not
be considered a Certificateholder for purposes of giving any request, demand, authorization,
direction, notice, consent or waiver under the Indenture or the Trust Agreement; provided
that, in determining whether the Indenture Trustee or the Owner Trustee shall be protected
in relying upon any such request, demand, authorization, direction, notice, consent or
waiver, only Certificates that the Indenture Trustee or the Owner Trustee knows to be so
owned shall be so disregarded. Owners of Certificates that have been pledged in good faith
may be regarded as Certificateholders if the pledgee establishes to the satisfaction of the
Indenture Trustee or the Owner Trustee, as the case may be, the pledgee's right so to act
with respect to such Certificates and that the pledgee is not the Issuer, any other obligor
upon the Certificates or any Affiliate of the Owner Trustee or the Indenture Trustee.
Certificates: The certificates in substantially the form set forth in Exhibit A to
the Trust Agreement.
Class: With respect to any Note, all Notes that bear the same class designation,
(i.e., the Class A-1 Notes as a group, the Class A-2 Notes as a group, the Class A-3 Notes
as a group or the Class A-4 Notes as a group).
Class A-1 Notes: The GMACM Home Loan-Backed Term Notes, Series 2006-HLTV1, Class
A-1, in substantially the form set forth in Exhibit A-1 to the Indenture.
Class A-2 Notes: The GMACM Home Loan-Backed Term Notes, Series 2006-HLTV1, Class
A-2, in substantially the form set forth in Exhibit A-1 to the Indenture.
Class A-3 Notes: The GMACM Home Loan-Backed Term Notes, Series 2006-HLTV1, Class
A-3, in substantially the form set forth in Exhibit A-1 to the Indenture.
Class A-4 Notes: The GMACM Home Loan-Backed Term Notes, Series 2006-HLTV1, Class
A-4, in substantially the form set forth in Exhibit A-1 to the Indenture.
Class A-5 Notes: The GMACM Home Loan-Backed Term Notes, Series 2006-HLTV1, Class
A-5, in substantially the form set forth in Exhibit A-1 to the Indenture.
Closing Date: March 30, 2006.
Code: The Internal Revenue Code of 1986, as amended, and the rules and regulations
promulgated thereunder.
Collateral: The meaning specified in the Granting Clause of the Indenture.
Collection Period: With respect to any Home Loan and Payment Date, the calendar
month preceding the month of any such Payment Date.
Collections: With respect to any Collection Period, all Interest Collections and
Principal Collections during such Collection Period.
Combined Loan-to-Value Ratio or CLTV: With respect to each Home Loan, the ratio,
expressed as a percentage, of the sum of (i) the initial principal balance of such Home Loan
and (ii) any outstanding principal balance, at origination of such Home Loan, of all other
mortgage loans, if any, secured by senior or subordinate liens on the related Mortgaged
Property, to the Appraised Value, or, when not available, the Stated Value.
Commission: The Securities and Exchange Commission.
Corporate Trust Office: With respect to the Indenture Trustee, Certificate
Registrar, Certificate Paying Agent and Paying Agent, the principal corporate trust office
of the Indenture Trustee and Note Registrar at which at any particular time its corporate
trust business shall be administered, which office at the date of the execution of this
instrument is located at 0 Xxx Xxxx Xxxxx, 0xx Xxxxx, Xxx Xxxx, Xxx Xxxx 10004, Attention:
Worldwide Securities Services/Structure Finance Services GMACM, Series 2006-HLTV1. With
respect to the Owner Trustee, the principal corporate trust office of the Owner Trustee at
which at any particular time its corporate trust business shall be administered, which
office at the date of the execution of this Trust Agreement is located at Xxxxxx Square
North, 0000 Xxxxx Xxxxxx Xxxxxx, Xxxxxxxxxx, Xxxxxxxx 00000, Attention: Corporate Trust
Administration.
Credit Enhancer: Financial Guaranty Insurance Corporation, any successor thereto or
any replacement Credit Enhancer substituted pursuant to the Indenture.
Credit Enhancer Default: Any failure by the Credit Enhancer to make a payment
required under the Policy in accordance with its terms.
Custodial Account: The account or accounts created and maintained by the Servicer
pursuant to Section 3.02(b) of the Servicing Agreement, in which the Servicer shall deposit
or cause to be deposited certain amounts in respect of the Home Loans.
Custodial Agreement: Any Custodial Agreement among the Custodian, the Indenture
Trustee, the Issuer and the Servicer relating to the custody of the Home Loans and the
Related Documents.
Custodian: GMAC Bank, and its successors and assigns, or any successor custodian for
the Mortgage Files appointed by the Indenture Trustee and reasonably acceptable to the
Credit Enhancer and the Servicer.
Cut-Off Date: March 1, 2006.
Cut-Off Date Principal Balance: With respect to any Home Loan, the unpaid principal
balance thereof as of the close of business on the last day of the Billing Cycle immediately
prior to the Cut-Off Date.
Default: Any occurrence which is or with notice or the lapse of time or both would
become an Event of Default.
Deficiency Amount: With respect to the Notes and any Payment Date, an amount, if
any, equal to the sum of (i) the excess, if any, of (A)(1) the aggregate amount of accrued
interest on the Notes on that Payment Date less (2) any Relief Act Shortfalls and any
prepayment interest shortfalls on the Home Loans during the related Collection Period, over
(B) the amount on deposit in the Note Payment Account available for interest payments on the
notes on that payment date, (ii) the principal portion of any Liquidation Loss Amount, to
the extent not distributed as part of the Liquidation Loss Distribution Amount or covered by
a reduction of the Overcollateralization Amount and (iii) on the Final Payment Date the
aggregate outstanding Note Balance of each class of Notes after giving effect to all other
payments of principal on the Notes on the Final Payment Date from all sources other than the
Policy.
Deficient Valuation: With respect to any Home Loan, a valuation by a court of
competent jurisdiction of the related Mortgaged Property in an amount less than the then
outstanding indebtedness under such Home Loan, or any reduction in the amount of principal
to be paid in connection with any scheduled payment that constitutes a permanent forgiveness
of principal, which valuation or reduction results from a proceeding under the Bankruptcy
Code.
Definitive Notes: Any definitive, fully registered Note, as described in Section
4.06 of the Indenture.
Deleted Loan: A Home Loan replaced or to be replaced with an Eligible Substitute
Loan.
Depositor: Residential Asset Mortgage Products, Inc., a Delaware corporation, or its
successor in interest.
Depository: The Depository Trust Company or a successor appointed by the Indenture
Trustee with the approval of the Issuer. Any successor to the Depository shall be an
organization registered as a "clearing agency" pursuant to Section 17A of the Exchange Act
and the regulations of the Commission thereunder.
Depository Participant: A Person for whom, from time to time, the Depository effects
book-entry transfers and pledges of securities deposited with the Depository.
Determination Date: With respect to any Payment Date, the 20th day of the month in
which such Payment Date occurs or if such day is not a Business Day, the next succeeding
Business Day.
Distribution Account: The account or accounts created and maintained by the
Certificate Paying Agent pursuant to Section 3.10(c) of the Trust Agreement. The
Certificate Paying Agent will make all distributions on the Certificates from money on
deposit in the Distribution Account.
Due Date: With respect to the Home Loans, the date on which the Monthly Payment
thereon is due in accordance with the terms of the related Mortgage Note.
Eligible Account: An account that is any of the following: (i) maintained with a
depository institution the short-term debt obligations of which have been rated by each
Rating Agency in its highest rating category available, or (ii) an account or accounts in a
depository institution in which such accounts are fully insured to the limits established by
the FDIC, provided that any deposits not so insured shall, to the extent acceptable to each
Rating Agency, as evidenced in writing, be maintained such that (as evidenced by an Opinion
of Counsel delivered to the Indenture Trustee and each Rating Agency) the Indenture Trustee
have a claim with respect to the funds in such account or a perfected first security
interest against any collateral (which shall be limited to Permitted Investments) securing
such funds that is superior to claims of any other depositors or creditors of the depository
institution with which such account is maintained, or (iii) an account or accounts
maintained with a depository institution or trust company, as long as its short-term debt
obligations are rated P-1 by Xxxxx'x and A-1+ by Standard & Poor's (or the equivalent) or
better by each Rating Agency, and its long term debt obligations are rated A2 by Moody's and
AA- by Standard & Poor's (or the equivalent) or better by each Rating Agency, or (iv) a
segregated trust account or accounts maintained in the corporate trust division of a
depository institution or trust company, acting in its fiduciary capacity, or (v) an account
or accounts of a depository institution acceptable to each Rating Agency (as evidenced in
writing by each Rating Agency that use of any such account will not cause a Rating Event (if
determined without regard to the Policy)).
Eligible Substitute Loan: A Home Loan substituted by either Seller or GMACM for a
Deleted Loan, which must, on the date of such substitution, as confirmed in an Officer's
Certificate delivered to the Indenture Trustee, (i) have an outstanding principal balance,
after deduction of the principal portion of the monthly payment due in the month of
substitution (or in the case of a substitution of more than one Home Loan for a Deleted
Loan, an aggregate outstanding principal balance, after such deduction), not in excess of
the outstanding principal balance of the Deleted Loan (the amount of any shortfall to be
deposited by such Seller in the Custodial Account in the month of substitution); (ii) comply
with each representation and warranty made by GMACM set forth in Section 3.1(b) of the
Purchase Agreement, other than clauses (viii), (xiii), (xiv), (xxiv), (xxi), (xxiv),
(xxv)(B), (xxvi) and (xxvii), in the case of an Eligible Substitute Loan substituted by
GMACM, and comply with the representations and warranties made by WG Trust set forth in
Section 3.1(d) of the Purchase Agreement, in the case of an Eligible Substitute Loan
substituted by WG Trust, as of the date of substitution; (iii) have a Loan Rate and Net Loan
Rate no lower than and not more than 1% per annum higher than the Loan Rate and Net Loan
Rate, respectively, of the Deleted Loan as of the date of substitution; (iv) have a CLTV at
the time of substitution no higher than that of the Deleted Loan at the time of
substitution; (v) have a remaining term to stated maturity not greater than (and not more
than one year less than) that of the Deleted Loan; (vi) not cause the percentage of Home
Loans that are REMIC Ineligible Loans (calculated by Cut-off Date Loan Balance) to be less
than 65%; and (vii) not be 30 days or more delinquent.
ERISA: The Employee Retirement Income Security Act of 1974, as amended.
Event of Default: With respect to the Indenture, any one of the following events
(whatever the reason for such Event of Default and whether it shall be voluntary or
involuntary or be effected by operation of law or pursuant to any judgment, decree or order
of any court or any order, rule or regulation of any administrative or governmental body):
(a) a default in the payment of the principal of, any installment of the principal of or
interest on any Note when the same becomes due and payable, and such default shall
continue for a period of five (5) days;
(b) there occurs a default in the observance or performance in any material respect of
any covenant or agreement of the Issuer made in the Indenture, or any representation
or warranty of the Issuer made in the Indenture or in any certificate delivered
pursuant hereto or in connection herewith proving to have been incorrect in any
material respect as of the time when the same shall have been made that has a
material adverse effect on the Noteholders or the Credit Enhancer, and such default
shall continue or not be cured, or the circumstance or condition in respect of which
such representation or warranty was incorrect shall not have been eliminated or
otherwise cured, for a period of 30 days after there shall have been given, by
registered or certified mail, to the Issuer by the Indenture Trustee or to the Issuer
and the Indenture Trustee by the Credit Enhancer or the Noteholders of at least 25%
of the aggregate Note Balance of the Notes, a written notice specifying such default
or incorrect representation or warranty and requiring it to be remedied and stating
that such notice is a notice of default hereunder;
(c) there occurs the filing of a decree or order for relief by a court having
jurisdiction in the premises in respect of the Issuer or any substantial part of the
Trust Estate in an involuntary case under any applicable federal or state bankruptcy,
insolvency or other similar law now or hereafter in effect, or appointing a receiver,
liquidator, assignee, custodian, trustee, sequestrator or similar official of the
Issuer or for any substantial part of the Trust Estate, or ordering the winding-up or
liquidation of the Issuer's affairs, and such decree or order shall remain unstayed
and in effect for a period of 60 consecutive days; or
(d) there occurs the commencement by the Issuer of a voluntary case under any applicable
federal or state bankruptcy, insolvency or other similar law now or hereafter in
effect, or the consent by the Issuer to the entry of an order for relief in an
involuntary case under any such law, or the consent by the Issuer to the appointment
or taking possession by a receiver, liquidator, assignee, custodian, trustee,
sequestrator or similar official of the Issuer or for any substantial part of the
assets of the Trust Estate, or the making by the Issuer of any general assignment for
the benefit of creditors, or the failure by the Issuer generally to pay its debts as
such debts become due, or the taking of any action by the Issuer in furtherance of
any of the foregoing.
Exchange Act: The Securities Exchange Act of 1934, as amended, and the rules and
regulations promulgated thereunder.
Existing Lien: The meaning specified in Section 3.05 of the Servicing Agreement.
Expenses: The meaning specified in Section 7.02 of the Trust Agreement.
Xxxxxx Xxx: Xxxxxx Xxx, formerly the Federal National Mortgage Association, or any
successor thereto.
FDIC: The Federal Deposit Insurance Corporation or any successor thereto.
Final Payment Date: The Payment Date in October 2029.
Fiscal Year: The fiscal year of the Trust, which shall end on December 31 of each
year.
Foreclosure Profit: With respect to a Liquidated Home Loan, the amount, if any, by
which (i) the aggregate of Liquidation Proceeds net of Liquidation Expenses exceeds (ii) the
Principal Balance of such Liquidated Home Loan (plus accrued and unpaid interest thereon at
the applicable Loan Rate from the date interest was last paid through the date of receipt of
the final Liquidation Proceeds) immediately prior to the final recovery of the related
Liquidation Proceeds.
Freddie Mac: Freddie Mac, formerly the Federal Home Loan Mortgage Corporation, or
any successor thereto.
Form 10-K Certification: As defined in Section 4.04(b) of the Servicing Agreement.
GAAP: Generally accepted accounting principles.
Xxxxx: Pledge, bargain, sell, warrant, alienate, remise, release, convey, assign,
transfer, create, and xxxxx x xxxx upon and a security interest in and right of set-off
against, deposit, set over and confirm pursuant to the Indenture. A Grant of the Collateral
or of any other agreement or instrument shall include all rights, powers and options (but
none of the obligations) of the granting party thereunder, including the immediate and
continuing right to claim for, collect, receive and give receipt for principal and interest
payments in respect of such collateral or other agreement or instrument and all other moneys
payable thereunder, to give and receive notices and other communications, to make waivers or
other agreements, to exercise all rights and options, to bring proceedings in the name of
the granting party or otherwise, and generally to do and receive anything that the granting
party is or may be entitled to do or receive thereunder or with respect thereto.
GMAC: General Motors Acceptance Corporation, and its successors and assigns.
GMACM: GMAC Mortgage Corporation, and its successors and assigns.
Home Loan Schedule: The schedule of Home Loans as of the Cut-Off Date set forth in
Exhibit A of the Servicing Agreement, which schedule sets forth as to each Home Loan the
(i) Cut-Off Date Principal Balance, (ii) loan number, (iii) lien position of the related
Mortgage, (iv) original term to maturity of the related Mortgage Note, (v) date of the
related Mortgage Note, (vi) maturity date of the related Mortgage Note, (vii) Appraised
Value of the related Mortgaged Property, (viii) unpaid principal balance of a mortgage loan
secured by a lien senior to the Home Loan, (ix) CLTV, (x) debt-to-income ratio of the
related Mortgagor, and (xi) number of residential units on the related Mortgaged Property.
Home Loans: The mortgage loans sold by GMACM and WG Trust to the Depositor on the
Closing Date, pursuant to the Purchase Agreement, and listed on the Home Loan Schedule
attached to the Purchase Agreement, together with all monies due or to become due thereunder
or the Related Documents, and that remain subject to the terms thereof.
Indemnified Party: The meaning specified in Section 7.02 of the Trust Agreement.
Indenture: The indenture dated as of March 30, 2006 between the Issuer and the
Indenture Trustee.
Indenture Trustee: JPMorgan Chase Bank, a New York banking corporation, and its
successors and assigns or any successor indenture trustee appointed pursuant to the terms of
the Indenture.
Indenture Trustee Information: As specified in Section 9.05(a)(i)(A) of the
Servicing Agreement.
Independent: When used with respect to any specified Person, such Person (i) is in
fact independent of the Issuer, any other obligor on the Notes, the Sellers, the Depositor
and any Affiliate of any of the foregoing Persons, (ii) does not have any direct financial
interest or any material indirect financial interest in the Issuer, any such other obligor,
the Sellers, the Depositor or any Affiliate of any of the foregoing Persons and (iii) is not
connected with the Issuer, any such other obligor, the Sellers, the Depositor or any
Affiliate of any of the foregoing Persons as an officer, employee, promoter, underwriter,
trustee, partner, director or person performing similar functions.
Independent Certificate: A certificate or opinion to be delivered to the Indenture
Trustee under the circumstances described in, and otherwise complying with, the applicable
requirements of Section 10.01 of the Indenture, made by an Independent appraiser or other
expert appointed by an Issuer Order and approved by the Indenture Trustee in the exercise of
reasonable care, and such opinion or certificate shall state that the signer has read the
definition of "Independent" in this Indenture and that the signer is Independent within the
meaning thereof.
Initial Aggregate Note Balance: $229,865,170.
Initial Class A-1 Note Balance: $94,023,000.
Initial Class A-2 Note Balance: $28,687,000.
Initial Class A-3 Note Balance: $36,622,000.
Initial Class A-4 Note Balance: $41,632,000.
Initial Class A-5 Note Balance: $28,901,170.
Insolvency Event: With respect to a specified Person, (a) the filing of a decree or
order for relief by a court having jurisdiction in the premises in respect of such Person or
any substantial part of its property in an involuntary case under any applicable bankruptcy,
insolvency or other similar law now or hereafter in effect, or appointing a receiver,
liquidator, assignee, custodian, trustee, sequestrator or similar official for such Person
or for any substantial part of its property, or ordering the winding-up or liquidation of
such Person's affairs, and such decree or order shall remain unstayed and in effect for a
period of 60 consecutive days; or (b) the commencement by such Person of a voluntary case
under any applicable bankruptcy, insolvency or other similar law now or hereafter in effect,
or the consent by such Person to the entry of an order for relief in an involuntary case
under any such law, or the consent by such Person to the appointment of or taking possession
by a receiver, liquidator, assignee, custodian, trustee, sequestrator or similar official
for such Person or for any substantial part of its property, or the making by such Person of
any general assignment for the benefit of creditors, or the failure by such Person generally
to pay its debts as such debts become due or the admission by such Person in writing (as to
which the Indenture Trustee shall have notice) of its inability to pay its debts generally,
or the adoption by the Board of Directors or managing member of such Person of a resolution
which authorizes action by such Person in furtherance of any of the foregoing.
Insurance Agreement: The Insurance and Indemnity Agreement dated as of March 30,
2006, among the Servicer, the Sellers, the Depositor, the Issuer, the Indenture Trustee and
the Credit Enhancer, including any amendments and supplements thereto.
Insurance Proceeds: Proceeds paid by any insurer (other than the Credit Enhancer)
pursuant to any insurance policy covering a Home Loan which are required to be remitted to
the Servicer, or amounts required to be paid by the Servicer pursuant to the next to last
sentence of Section 3.04 of the Servicing Agreement, net of any component thereof
(i) covering any expenses incurred by or on behalf of the Servicer in connection with
obtaining such proceeds, (ii) that is applied to the restoration or repair of the related
Mortgaged Property, (iii) released to the related Mortgagor in accordance with the
Servicer's normal servicing procedures or (iv) required to be paid to any holder of a
mortgage senior to such Home Loan.
Insured Amount: As defined in the Policy.
Interest Collections: With respect to any Payment Date, the sum of (i) the portion
allocable to interest of all scheduled monthly payments on the Home Loans received during
the related Collection Period, minus the Servicing Fee for the related Collection Period,
(ii) the portion of all Net Liquidation Proceeds allocable to interest pursuant to the terms
of the Mortgage Notes, reduced by the Servicing Fee for the related Collection Period and
(iii) the interest portion of the Repurchase Price for any Deleted Loans paid by the Seller
or GMACM during the related Collection Period and the cash purchase price paid in connection
with any optional purchase of the Home Loans by the Servicer. The terms of the related
Mortgage Note shall determine the portion of each payment in respect of each Home Loan that
constitutes principal or interest.
Interest Period: With respect to any Payment Date and each Class of Notes, other
than the Class A-1 Notes, the calendar month preceding the month in which such Payment Date
occurs. With respect to the Class A-1 Notes and any Payment Date (other than the first
Payment Date), the period beginning on the preceding Payment Date and ending on the day
preceding such Payment Date, and in the case of the first Payment Date, the period beginning
on the Closing Date and ending on the day preceding the first Payment Date.
Interim Certification: The meaning specified in Section 2.1(c) of the Purchase
Agreement.
Issuer or Trust: The GMACM Home Loan Trust 2006-HLTV1, a Delaware statutory trust,
or its successor in interest.
Issuer Order or Issuer Request: A written order or request signed in the name of the
Issuer by any one of its Authorized Officers and delivered to the Indenture Trustee.
Lien: Any mortgage, deed of trust, security interest, pledge, conveyance,
hypothecation, assignment, participation, deposit arrangement, encumbrance, lien (statutory
or other), preference, priority right or interest or other security agreement or
preferential arrangement of any kind or nature whatsoever, including, without limitation,
any conditional sale or other title retention agreement, any financing lease having
substantially the same economic effect as any of the foregoing and the filing of any
financing statement under the UCC (other than any such financing statement filed for
informational purposes only) or comparable law of any jurisdiction to evidence any of the
foregoing; provided, however, that any assignment pursuant to Section 6.02 of the Servicing
Agreement shall not be deemed to constitute a Lien.
LIBOR Business Day: Any day other than (i) a Saturday or a Sunday or (ii) a day on
which banking institutions in the city of London, England are required or authorized by law
to be closed.
Liquidated Home Loan: With respect to any Payment Date, any Home Loan in respect of
which the Servicer has determined, in accordance with the servicing procedures specified in
the Servicing Agreement, as of the end of the related Collection Period that substantially
all Liquidation Proceeds which it reasonably expects to recover, if any, with respect to the
disposition of the related REO Property have been recovered.
Liquidation Expenses: All out-of-pocket expenses (exclusive of overhead) incurred by
or on behalf of the Servicer in connection with the liquidation of any Home Loan and not
recovered under any insurance policy, including legal fees and expenses, any unreimbursed
amount expended (including, without limitation, amounts advanced to correct defaults on any
mortgage loan which is senior to such Home Loan and amounts advanced to keep current or pay
off a mortgage loan that is senior to such Home Loan) respecting such Home Loan and any
related and unreimbursed expenditures for real estate property taxes or for property
restoration, preservation or insurance against casualty loss or damage.
Liquidation Loss Amount: With respect to any Payment Date and any Home Loan that
became a Liquidated Home Loan during the related Collection Period, the unrecovered portion
of the Principal Balance of such Home Loan and any unpaid accrued interest thereon at the
end of such Collection Period, after giving effect to the Net Liquidation Proceeds applied
in reduction of such Principal Balance.
Liquidation Loss Distribution Amount: With respect to any Payment Date, the
aggregate of (A) 100% of the Liquidation Loss Amounts on such Payment Date, plus (B) any
such Liquidation Loss Amounts remaining undistributed from any preceding Payment Date,
provided that any such Liquidation Loss Distribution Amount remaining undistributed from any
preceding Payment Date shall not be distributed to the extent that it was paid by means of a
draw on the Policy or was reflected in the reduction of the Overcollateralization Amount.
Liquidation Proceeds: Proceeds (including Insurance Proceeds but not including
amounts drawn under the Policy) if any received in connection with the liquidation of any
Home Loan or related REO Property, whether through trustee's sale, foreclosure sale or
otherwise.
Loan Rate: With respect to any Home Loan and any day, the per annum rate of interest
applicable under the related Mortgage Note.
Lost Note Affidavit: With respect to any Home Loan as to which the original Mortgage
Note has been permanently lost or destroyed and has not been replaced, an affidavit from the
related Seller certifying that the original Mortgage Note has been lost, misplaced or
destroyed (together with a copy of the related Mortgage Note, if available).
MERS: Mortgage Electronic Registration Systems, Inc., a corporation organized and
existing under the laws of the State of Delaware, or any successor thereto.
MERS(R)System: The system of recording transfers of Mortgages electronically
maintained by MERS.
MIN: The Mortgage Identification Number for Home Loans registered with MERS on the
MERS(R)System.
MOM Loan: With respect to any Home Loan, MERS acting as the mortgagee of such Home
Loan, solely as nominee for the originator of such Home Loan and its successors and assigns,
at the origination thereof.
Monthly Payment: With respect to any Home Loan (including any REO Property) and any
Due Date, the payment of principal and interest due thereon in accordance with the
amortization schedule at the time applicable thereto (after adjustment, if any, for any
partial Principal Prepayments thereon and for Deficient Valuations occurring prior to such
Due Date but before any adjustment to such amortization schedule by reason of any
bankruptcy, other than a Deficient Valuation, or similar proceeding or any moratorium or
similar waiver or grace period).
Moody's: Xxxxx'x Investors Service, Inc., or its successor in interest.
Mortgage: The mortgage, deed of trust or other instrument creating a first or second
lien on an estate in fee simple interest in real property securing a Home Loan.
Mortgage File: With respect to each Home Loan:
(i) the original Mortgage Note endorsed or assigned without recourse in blank
(which endorsement shall contain either an original signature or a facsimile signature of an
authorized officer of GMACM) or, with respect to any Home Loan as to which the original
Mortgage Note has been permanently lost or destroyed and has not been replaced, a Lost Note
Affidavit;
(ii) the original Mortgage, noting the presence of the MIN of the Home Loan, if the
Mortgage is registered on the MERS(R)System, and language indicating that the Home Loan is a
MOM Loan if the Home Loan is a MOM Loan, with evidence of recording thereon, or, if the
original Mortgage has not yet been returned from the public recording office, a copy of the
original Mortgage certified by GMACM that such Mortgage has been sent for recording, or a
county certified copy of such Mortgage in the event the recording office keeps the original
or if the original is lost;
(iii) unless the Home Loan is registered on the MERS(R)System, original assignments
(which may be included in one or more blanket assignments if permitted by applicable law) of
the Mortgage in recordable form from GMACM to "JPMorgan Chase Bank, as Indenture Trustee
under that certain Indenture dated as of March 30, 2006, for GMACM Home Loan Trust
2006-HLTV1, Home Loan-Backed Term Notes" c/o the Servicer at an address specified by the
Servicer;
(iv) originals of any intervening assignments of the Mortgage from the originator
to GMACM (or to MERS, if the Home Loan is registered on the MERS(R)System, and which notes
the presence of a MIN), with evidence of recording thereon, or, if the original of any such
intervening assignment has not yet been returned from the public recording office, a copy of
such original intervening assignment certified by GMACM that such original intervening
assignment has been sent for recording; and
(v) a true and correct copy of each assumption, modification, consolidation or
substitution agreement, if any, relating to such Home Loan; and
(vi) any documents required to be added to such documents pursuant to the Purchase
Agreement, the Trust Agreement or the Servicing Agreement.
It is understood that the Mortgage File (other than item (i) above) may be retained
in microfilm, microfiche, optical storage or magnetic media in lieu of hard copy; provided,
that with respect to any Home Loan not registered on the MERS(R)System, the original
Assignment of Mortgage described in clause (iii) above shall be retained in the Mortgage
File.
Mortgage Note: With respect to a Home Loan, the promissory note pursuant to which
the related Xxxxxxxxx agrees to pay the indebtedness evidenced thereby and secured by the
related Mortgage as modified or amended.
Mortgaged Property: The underlying property, including real property and
improvements thereon, securing a Home Loan.
Mortgagor: The obligor or obligors under a Mortgage Note.
Net Liquidation Proceeds: With respect to any Liquidated Home Loan, Liquidation
Proceeds net of Liquidation Expenses (but not including the portion, if any, of such amount
that exceeds the Principal Balance of, plus accrued and unpaid interest on, such Home Loan
at the end of the Collection Period immediately preceding the Collection Period in which
such Home Loan became a Liquidated Home Loan).
Net Loan Rate: With respect to any Home Loan, the Loan Rate of the Home Loan as of
the first day of the calendar month in which the related Interest Period begins, net of the
Servicing Fee Rate.
Net Worth: As of any date of determination, the net worth of GMACM and its
consolidated subsidiaries, as determined in accordance with GAAP.
Note Balance: With respect to any Payment Date and any Class of Notes, the Initial
Note Balance thereof reduced by all payments of principal thereon prior to such Payment Date.
Note Owner or Owner: The Beneficial Owner of a Note.
Note Payment Account: The account established by the Indenture Trustee pursuant to
Section 8.02 of the Indenture and Section 5.01 of the Servicing Agreement. Amounts
deposited in the Note Payment Account will be distributed by the Indenture Trustee in
accordance with Section 3.05 of the Indenture.
Note Rate: As to the Notes, the following rates:
Class A-1 Notes: a floating rate equal to the lesser of (i) LIBOR plus 0.10%
per annum and (ii) 8.00% per annum;
Class A-2 Notes: a fixed rate equal to 5.57% per annum;
Class A-3 Notes: a fixed rate equal to 5.59% per annum;
Class A-4 Notes: a fixed rate equal to 5.81% per annum; and
Class A-5 Notes: a fixed rate equal to 6.01% per annum (or, for any Interest
Period for the Class A-5 Notes beginning with the second Interest Period commencing
after the first Payment Date on which the aggregate Principal Balance of the Home
Loans is less than 10% of the initial Pool Balance, a fixed rate equal to 6.51% per
annum).
Note Register: The register maintained by the Note Registrar in which the Note
Registrar shall provide for the registration of Notes and of transfers and exchanges of
Notes.
Note Registrar: The Indenture Trustee, in its capacity as Note Registrar.
Noteholder: The Person in whose name a Note is registered in the Note Register,
except that, any Note registered in the name of the Depositor, the Issuer or the Indenture
Trustee or any Affiliate of any of them shall be deemed not to be outstanding and the
registered holder will not be considered a Noteholder for purposes of giving any request,
demand, authorization, direction, notice, consent or waiver under the Indenture or the Trust
Agreement; provided, that in determining whether the Indenture Trustee shall be protected in
relying upon any such request, demand, authorization, direction, notice, consent or waiver,
only Notes that the Indenture Trustee knows to be so owned shall be so disregarded. Owners
of Notes that have been pledged in good faith may be regarded as Noteholders if the pledgee
thereof establishes to the satisfaction of the Indenture Trustee such pledgee's right so to
act with respect to such Notes and that such pledgee is not the Issuer, any other obligor on
the Notes or any Affiliate of any of the foregoing Persons.
Notes: Any one of the Class A-1 Notes, Class A-2 Notes, Class A-3 Notes, Class A-4
Notes and Class A-5 Notes issued and outstanding at any time pursuant to the Indenture.
Officer's Certificate: With respect to the Servicer, a certificate signed by the
President, Managing Director, a Director, a Vice President or an Assistant Vice President,
of the Servicer and delivered to the Indenture Trustee. With respect to the Issuer, a
certificate signed by any Authorized Officer of the Issuer, under the circumstances
described in, and otherwise complying with, the applicable requirements of Section 10.01 of
the Indenture, and delivered to the Indenture Trustee. Unless otherwise specified, any
reference in the Indenture to an Officer's Certificate shall be to an Officer's Certificate
of any Authorized Officer of the Issuer.
One-Month LIBOR: As to the Class A-1 Notes and any Interest Period, (a) for any
Interest Period other than the first Interest Period, the rate for United States dollar
deposits for one month that appears on the Telerate Screen Page 3750 as of 11:00 a.m.,
London, England time, on the second LIBOR Business Day prior to the first day of that
Interest Period or (b) with respect to the first Interest Period, the rate for United States
dollar deposits for one month that appears on the Telerate Screen Page 3750 as of 11:00
a.m., London, England time, two LIBOR Business Days prior to the Closing Date. If such rate
does not appear on such page (or other page as may replace that page on that service, or if
such service is no longer offered, such other service for displaying LIBOR or comparable
rates as may be reasonably selected by the Indenture Trustee after consultation with the
Servicer), the rate will be the Reference Bank Rate. If no Reference Bank Rate is
available, LIBOR will be LIBOR applicable to the preceding Payment Date.
Opinion of Counsel: A written opinion of counsel of a law firm reasonably acceptable
to the recipient thereof. Any Opinion of Counsel for the Servicer may be provided by
in-house counsel for the Servicer if reasonably acceptable.
Outstanding: With respect to the Notes, as of the date of determination, all Notes
theretofore executed, authenticated and delivered under this Indenture except:
(i) Notes theretofore cancelled by the Note Registrar or delivered to the
Indenture Trustee for cancellation; and
(ii) Notes in exchange for or in lieu of which other Notes have been
executed, authenticated and delivered pursuant to the Indenture unless proof
satisfactory to the Indenture Trustee is presented that any such Notes are held by a
holder in due course;
provided, however, that for purposes of effectuating the Credit Enhancer's right of
subrogation as set forth in Section 4.12 of the Indenture only, all Notes that have been
paid with funds provided under the Policy shall be deemed to be Outstanding until the Credit
Enhancer has been reimbursed with respect thereto.
Overcollateralization Amount: With respect to any Payment Date, the amount (but not
less than zero), if any, by which (a) the Pool Balance after applying payments received in
the related Collection Period (but without further reduction due to any Home Loan becoming a
Liquidated Home Loan during such Collection Period), exceeds (b) the aggregate Note Balance
of the Notes on such Payment Date (after application of the Principal Collections and
Liquidation Loss Amounts for such date). The Overcollateralization Amount is subject to
reduction on any Payment Date as described in Section 3.05(d) of the Indenture.
Overcollateralization Increase Amount: With respect to any Payment Date, an amount
equal to the lesser of (i) the amount remaining in the Note Payment Account following
distributions pursuant to Section 3.05(a)(vi) of the Indenture and (ii) the difference
between the Required Overcollateralization Amount and the Overcollateralization Amount.
Overcollateralization Release Amount: With respect to any Payment Date, the excess,
if any, of the Overcollateralization Amount over the Required Overcollateralization Amount,
which, on such Payment Date, shall not exceed an amount equal to the total Principal
Collections for such Payment Date.
Owner Trust: GMACM Home Loan Trust 2006-HLTV1, created by the Certificate of Trust
pursuant to the Trust Agreement.
Owner Trustee: Wilmington Trust Company, not in its individual capacity but solely
as owner trustee, and its successors and assigns or any successor Owner Trustee appointed
pursuant to the terms of the Trust Agreement.
Paying Agent: Any paying agent or co-paying agent appointed pursuant to Section 3.03
of the Indenture, which initially shall be the Indenture Trustee.
Payment Date: The 25th day of each month, or if such day is not a Business Day, then
the next Business Day.
Percentage Interest: With respect to any Note and Payment Date, the percentage
obtained by dividing the Note Balance of such Note by the aggregate Note Balance of all
Notes prior to such Payment Date. With respect to any Certificate and any Payment Date, the
Percentage Interest stated on the face of such Certificate.
Permitted Investments: One or more of the following:
(i) obligations of or guaranteed as to principal and interest by the United
States or any agency or instrumentality thereof when such obligations are backed by
the full faith and credit of the United States;
(ii) repurchase agreements on obligations specified in clause (i) above
maturing not more than one month from the date of acquisition thereof; provided, that
the unsecured short-term debt obligations of the party agreeing to repurchase such
obligations are at the time rated by each Rating Agency in its highest short-term
rating category available;
(iii) federal funds, certificates of deposit, demand deposits, time deposits
and bankers' acceptances (which shall each have an original maturity of not more than
90 days and, in the case of bankers' acceptances, shall in no event have an original
maturity of more than 365 days or a remaining maturity of more than 30 days)
denominated in United States dollars of any U.S. depository institution or trust
company incorporated under the laws of the United States or any state thereof or of
any domestic branch of a foreign depository institution or trust company; provided,
that the short-term debt obligations of such depository institution or trust company
(or, if the only Rating Agency is Standard & Poor's, in the case of the principal
depository institution in a depository institution holding company, debt obligations
of the depository institution holding company) at the date of acquisition thereof
have been rated by each Rating Agency in its highest short-term rating category
available; and provided further, that if the only Rating Agency is Standard & Poor's
and if the depository or trust company is a principal subsidiary of a bank holding
company and the debt obligations of such subsidiary are not separately rated, the
applicable rating shall be that of the bank holding company; and provided further,
that if the only Rating Agency is Standard & Poor's and the original maturity of such
short-term debt obligations of a domestic branch of a foreign depository institution
or trust company shall exceed 30 days, the short-term rating of such institution
shall be A-1+;
(iv) commercial paper (having original maturities of not more than 365 days)
of any corporation incorporated under the laws of the United States or any state
thereof which on the date of acquisition has been rated by each Rating Agency in its
highest short-term rating category available; provided, that such commercial paper
shall have a remaining maturity of not more than 30 days;
(v) a money market fund or a qualified investment fund rated by each Rating
Agency in one of its two highest long-term rating categories available including any
fund advised by the Indenture Trustee or an Affiliate thereof; and
(vi) other obligations or securities that are acceptable to each Rating
Agency as a Permitted Investment hereunder and will not cause a Rating Event, and
which are acceptable to the Credit Enhancer, as evidenced in writing;
provided, however, that no instrument shall be a Permitted Investment if it represents,
either (1) the right to receive only interest payments with respect to the underlying debt
instrument or (2) the right to receive both principal and interest payments derived from
obligations underlying such instrument and the principal and interest payments with respect
to such instrument provide a yield to maturity greater than 120% of the yield to maturity at
par of such underlying obligations. References herein to the highest long-term rating
category available shall mean AAA in the case of Standard & Poor's and Aaa in the case of
Xxxxx'x, and references herein to the highest short-term rating category available shall
mean A-1+ in the case of Standard & Poor's and P-1 in the case of Xxxxx'x.
Person: Any legal individual, corporation, partnership, joint venture, association,
joint-stock company, limited liability company, trust, unincorporated organization or
government or any agency or political subdivision thereof.
Plan: Any employee benefit plan or certain other retirement plans and arrangements,
including individual retirement accounts and annuities, Xxxxx plans and bank collective
investment funds and insurance company general or separate accounts in which such plans,
accounts or arrangements are invested, that are subject to ERISA or Section 4975 of the
Code, as described in Section 3.05 of the Trust Agreement.
Plan Assets: The meaning specified in Section 2510.3-101 of the Department of Labor
Regulations and as described in Section 3.05 of the Trust Agreement.
Policy: The Surety Bond dated as of the Closing Date, Policy No. 04030036, issued by
the Credit Enhancer.
Pool Balance: With respect to any date, the aggregate Principal Balance of all Home
Loans as of such date.
Predecessor Note: With respect to any Note, every previous Note evidencing all or a
portion of the same debt as that evidenced by such Note; and, for the purpose of this
definition, any Note authenticated and delivered under Section 4.03 of the Indenture in lieu
of a mutilated, lost, destroyed or stolen Note shall be deemed to evidence the same debt as
such mutilated, lost, destroyed or stolen Note.
Premium: The amount of premium calculated at the Premium Percentage due to the
Credit Enhancer in accordance with the terms of the Insurance Agreement.
Premium Percentage: As set forth in the Insurance Agreement.
Principal Balance: With respect to any Home Loan, other than a Liquidated Home Loan,
and as of any day, the related Cut-Off Date Principal Balance, minus all collections
credited as principal in respect of any such Home Loan in accordance with the related
Mortgage Note and applied in reduction of the Principal Balance thereof. For purposes of
this definition, a Liquidated Home Loan shall be deemed to have a Principal Balance equal to
the Principal Balance of the related Home Loan immediately prior to the final recovery of
substantially all related Liquidation Proceeds and a Principal Balance of zero thereafter.
Principal Collection Distribution Amount: For any Payment Date, the total Principal
Collections for such Payment Date less any Overcollateralization Release Amount for such
Payment Date.
Principal Collections: With respect to any Payment Date, an amount equal to the sum
of (i) the principal portion of all scheduled Monthly Payments on the Home Loans received
during the related Collection Period, as reported by the Servicer or the related
Subservicer; (ii) the principal portion of all proceeds of the repurchase of any Home Loans
(or, in the case of a substitution, any Substitution Adjustment Amounts) during the related
Collection Period; and (iii) the principal portion of all other unscheduled collections
received on the Home Loans during the related Collection Period (or deemed to be received
during the related Collection Period, including, without limitation, full and partial
Principal Prepayments made by the respective Mortgagors, Insurance Proceeds and Net
Liquidation Proceeds), to the extent not previously distributed.
Principal Prepayment: Any payment of principal made by the Mortgagor on a Home Loan
which is received in advance of its scheduled Due Date and which is not accompanied by an
amount of interest representing scheduled interest due on any date or dates in any month or
months subsequent to the month of prepayment.
Proceeding: Any suit in equity, action at law or other judicial or administrative
proceeding.
Program Guide: The GMACM Home Equity Servicing Guidelines, as in effect from time to
time.
Prospectus Supplement: The prospectus supplement dated March 27, 2006, relating to
the Notes.
Purchase Agreement: The home loan purchase agreement dated as of March 30, 2006,
among the Sellers, the Purchaser, the Issuer and the Indenture Trustee.
Purchase Price: The amounts specified in Section 2.3(a) of the Purchase Agreement.
Purchaser: Residential Asset Mortgage Products, Inc., as purchaser under the
Purchase Agreement.
Rating Agency: Each of Xxxxx'x and Standard & Poor's, or, if any such organization or
a successor thereto is no longer in existence, such nationally recognized statistical rating
organization, or other comparable Person, designated by the Depositor, notice of which
designation shall be given to the Indenture Trustee. References herein to the highest short
term rating category of a Rating Agency shall mean A-1+ in the case of Standard & Poor's and
P-1 in the case of Xxxxx'x; and in the case of any other Rating Agency, shall mean such
equivalent ratings. References herein to the highest long-term rating category of a Rating
Agency shall mean "AAA" in the case of Standard & Poor's and "Aaa" in the case of Xxxxx'x;
and in the case of any other Rating Agency, shall mean such equivalent rating.
Rating Event: The qualification, reduction or withdrawal by a Rating Agency of its
then-current rating of the Notes.
Record Date: With respect to the Notes and any Payment Date, unless Notes are no
longer held in book-entry form, the close of business on the Business Day immediately
preceding such Payment Date and if the Notes are no longer held in book-entry form, the last
Business Day of the calendar month preceding the month of such Payment Date
Recovery Amount: Amounts collected on a Home Loan after the Home Loan becomes a
Liquidated Home Loan, net of any Servicing Fee, Recovery Fee and any reimbursement for
advances and expenses of the Servicer.
Recovery Fee: A customary fee calculated based on additional recovery amounts
charged for the collection of such additional recovery amounts on any Home Loan after the
date that such Home Loan became a Liquidated Home Loan.
Reference Bank Rate: With respect to any Interest Period, as follows: the arithmetic
mean (rounded upwards, if necessary, to the nearest one sixteenth of one percent) of the
offered rates for United States dollar deposits for one month which are offered by the
Reference Banks as of 11:00 a.m., London, England time, on the second LIBOR Business Day
prior to the first day of such Interest Period to prime banks in the London interbank market
in amounts approximately equal to the sum of the outstanding Note Balance of the Class A-1
Notes; provided, that at least two Reference Banks provide such rate. If fewer than two
such rates are provided, the Reference Bank Rate will be the arithmetic mean of the rates
quoted by one or more major banks in New York City, selected by the Indenture Trustee after
consultation with the Servicer and the Credit Enhancer, as of 11:00 a.m., New York time, on
such date for loans in U.S. Dollars to leading European banks for a period of one month in
amounts approximately equal to the aggregate Note Balance of the Class A-1 Notes. If no
quotations can be obtained, the Reference Bank Rate will be the Reference Bank Rate
applicable to the preceding Interest Period.
Reference Banks: Shall mean three major banks in the London interbank market
selected by the Indenture Trustee after consultation with the Servicer.
Regulation AB: Subpart 229.1100 - Asset Backed Securities (Regulation AB), 17 C.F.R.
ss.ss.229.1100-229.1123, as such may be amended from time to time, and subject to such
clarification and interpretation as have been provided by the Commission in the adopting
release (Asset-Backed Securities, Securities Act Release No. 33-8518, 70 Fed. Reg. 1,506,
1,531 (January 7, 2005)) or by the staff of the Commission, or as may be provided by the
Commission or its staff from time to time.
Related Documents: With respect to each Home Loan, the documents contained in the
related Mortgage File.
Relief Act Shortfalls: With respect to any Payment Date, for any Home Loan as to
which there has been a reduction in the amount of interest collectible thereon for the
related Collection Period as a result of the application of the Servicemembers Civil Relief
Act or any similar state legislation or regulations, the shortfall, if any, equal to (i) one
month's interest on the Principal Balance of such Home Loan at the applicable Loan Rate,
over (ii) the interest collectible on such Home Loan during such Collection Period.
REMIC Ineligible Loan: A Home Loan will be a REMIC Ineligible Loan, if (a) the value
of the real property securing the Home Loan was not at least equal to 80% of the original
principal balance of the Home Loan, calculated by subtracting the principal balance of any
mortgage loans that are secured by liens that are senior to the Home Loan and a
proportionate amount of any mortgage loans that are secured by a lien of equal priority as
the Home Loan from the Appraised Value of the property when the Home Loan was originated and
(b) substantially all of the proceeds of the Home Loans were not used to acquire, improve or
protect an interest in the real property securing the Home Loan.
REO Property: A Mortgaged Property that is acquired by the Trust in foreclosure or
by deed in lieu of foreclosure.
Representative: Bear, Xxxxxxx & Co. Inc., as representative of the Underwriters.
Repurchase Event: With respect to any Home Loan, either (i) a discovery that, as of
the Closing Date with respect to an Home Loan, the related Mortgage was not a valid lien on
the related Mortgaged Property subject only to (A) the lien of any prior mortgage indicated
on the Home Loan Schedule, (B) the lien of real property taxes and assessments not yet due
and payable, (C) covenants, conditions, and restrictions, rights of way, easements and other
matters of public record as of the date of recording of such Mortgage and such other
permissible title exceptions as are customarily accepted for similar loans and (D) other
matters to which like properties are commonly subject that do not materially adversely
affect the value, use, enjoyment or marketability of the related Mortgaged Property or (ii)
with respect to any Home Loan as to which either Seller delivers an affidavit certifying
that the original Mortgage Note has been lost or destroyed, a subsequent default on such
Home Loan if the enforcement thereof or of the related Mortgage is materially and adversely
affected by the absence of such original Mortgage Note.
Repurchase Price: With respect to any Home Loan required to be repurchased on any
date pursuant to the Purchase Agreement or purchased by the Servicer pursuant to the
Servicing Agreement, an amount equal to the sum of (i) 100% of the Principal Balance thereof
(without reduction for any amounts charged off), (ii) unpaid accrued interest at the Loan
Rate (or with respect to the last day of the month in the month of repurchase, the Loan Rate
will be the Loan Rate in effect as of the second to last day in such month) on the
outstanding Principal Balance thereof from the Due Date to which interest was last paid by
the related Mortgagor to the first day of the month following the month of purchase and
(iii) in connection with any Mortgage Loan required to be repurchased pursuant to Sections
2.1 or 3.1 of the Purchase Agreement, any costs and damages incurred by the Trust Fund with
respect to such Mortgage Loan in connection with a breach of Section 3.1(b)(xv) of the
Purchase Agreement.
Required Insurance Policy: With respect to any Home Loan, any insurance policy which
is required to be maintained from time to time under the Servicing Agreement or the related
Subservicing Agreement in respect of such Home Loan.
Required Overcollateralization Amount: As to any Payment Date prior to the Stepdown
Date, the Required Overcollateralization Amount will be 6.00% of the initial Pool Balance.
On or after the Stepdown Date, the Required Overcollateralization Amount will be equal to
the lesser of (a) the Required Overcollateralization Amount as of the initial Payment Date
and (b) 12.00% of the current Pool Balance after applying payments received in the related
Collection Period (but not lower than 0.50% of the initial Pool Balance); provided, however,
that any scheduled reduction to the Required Overcollateralization Amount described above
shall not be made as of any Payment Date unless (i)(a) the aggregate cumulative Liquidation
Loss Amounts on the Home Loans prior to any such Payment Date occurring during the fourth
year, the fifth year or the sixth year (or any year thereafter) after the initial Payment
Date are less than 7.50%, 8.50% and 10.50%, respectively, of the Pool Balance as of the
Cut-Off Date or (b) the average Liquidation Loss Amount on the Home Loans for the current
and five previous Payment Dates is less than 60.00% of the amount remaining in the Note
Payment Account on such Payment Date following distributions pursuant to clauses (i)-(v) of
Section 3.05(a) of the Indenture (other than clause (iv)) and (ii) there has been no draw on
the Policy on such Payment Date that remains unreimbursed. In addition, the Required
Overcollateralization Amount may be reduced with the prior written consent of the Credit
Enhancer and the Rating Agencies.
Responsible Officer: With respect to the Indenture Trustee, any officer of the
Indenture Trustee with direct responsibility for the administration of the Indenture and
also, with respect to a particular matter, any other officer to whom such matter is referred
because of such officer's knowledge of and familiarity with the particular subject.
Rolling Six-Month Annualized Liquidation Loss Amounts: With respect to any
Determination Date occurring after the fifth Determination Date, the product (expressed as a
percentage) of (i) the aggregate Liquidation Loss Amounts as of the end of each of the six
Collection Periods (reduced by the aggregate Recovery Amounts for such Collection Periods)
immediately preceding such Determination Date divided by the Initial Pool Balance and
(ii) two (2).
Secretary of State: The Secretary of State of the State of Delaware.
Securities Act: The Securities Act of 1933, as amended, and the rules and
regulations promulgated thereunder.
Securitization Transaction: Any transaction involving a sale or other transfer of
mortgage loans directly or indirectly to an issuing entity in connection with an issuance of
publicly offered or privately placed, rated or unrated mortgage-backed securities.
Securities Balance: The Note Balance or Certificate Balance, as the context may
require.
Security: Any Certificate or a Note, as the context may require.
Securityholder: Any Noteholder or Certificateholder.
Seller or Sellers: GMAC Mortgage Corporation, a Pennsylvania corporation, and its
successors and assigns and Walnut Grove Mortgage Loan Trust 2003-A, a Delaware statutory
trust, and its successors and assigns.
Servicer: GMAC Mortgage Corporation, a Pennsylvania corporation, and its successors
and assigns.
Servicing Agreement: The servicing agreement dated as of March 30, 2006 among the
Servicer, the Issuer and the Indenture Trustee.
Servicing Certificate: A certificate completed and executed by a Servicing Officer
on behalf of the Servicer in accordance with Article IV of the Servicing Agreement.
Servicing Criteria: The "servicing criteria" set forth in Item 1122(d) of Regulation
AB, as such may be amended from time to time.
Servicing Default: Any one of the following events:
(i) any failure by the Servicer to deposit in the Custodial Account, the Note Payment
Account or the Distribution Account any deposit required to be made under the terms of this
Agreement that continues unremedied for a period of five Business Days after the date upon
which written notice of such failure shall have been given to the Servicer by the Issuer or
the Indenture Trustee, or to the Servicer, the Issuer and the Indenture Trustee by the
Credit Enhancer;
(ii) any failure on the part of the Servicer duly to observe or perform in any material
respect any other covenants or agreements of the Servicer set forth in the Securities or in
this Agreement, which failure, in each case, materially and adversely affects the interests
of the Securityholders or the Credit Enhancer, and which failure continues unremedied for a
period of 45 days after the date on which written notice of such failure, requiring the same
to be remedied, and stating that such notice is a "Notice of Default" under the Servicing
Agreement, shall have been given to the Servicer by the Issuer or the Indenture Trustee, or
to the Servicer, the Issuer and the Indenture Trustee by the Credit Enhancer;
(iii) the entry against the Servicer of a decree or order by a court or agency or
supervisory authority having jurisdiction under Title 11 of the United States Code or any
other applicable federal or state bankruptcy, insolvency or other similar law, or if a
receiver, assignee or trustee in bankruptcy or reorganization, liquidator, sequestrator or
similar official shall have been appointed for or taken possession of the Servicer or its
property, and the continuance of any such decree or order unstayed and in effect for a
period of 60 consecutive days;
(iv) the Servicer shall voluntarily submit to Proceedings under Title 11 of the United
States Code or any other applicable federal or state bankruptcy, insolvency or other similar
law relating to the Servicer or of or relating to all or substantially all of its property;
or the Servicer shall admit in writing its inability to pay its debts generally as they
become due, file a petition to take advantage of any applicable insolvency or reorganization
statute, make an assignment for the benefit of its creditors or voluntarily suspend payment
of its obligations;
(v) the Servicer's Tangible Net Worth at any time is less than $100,000,000 and GMAC
fails to own, directly or indirectly, at least 51% of the common stock of the Servicer; or
(vi) the Rolling Six-Month Annualized Liquidation Loss Amount with respect to the Mortgage
Loans exceeds 1.50%.
Servicing Fee: With respect to any Home Loan and any Collection Period, the product
of (i) the Servicing Fee Rate divided by 12 and (ii) the aggregate Principal Balance of all
Home Loans as of the first day of such Collection Period.
Servicing Fee Rate: 0.50% per annum.
Servicing Officer: Any officer of the Servicer involved in, or responsible for, the
administration and servicing of the Home Loans whose name and specimen signature appear on a
list of servicing officers furnished to the Indenture Trustee (with a copy to the Credit
Enhancer) by the Servicer, as such list may be amended from time to time.
Standard & Poor's: Standard & Poor's Ratings Services, a division of The XxXxxx-Xxxx
Companies, Inc. or its successor in interest.
Stated Value: With respect to any Home Loan, the stated value of the related
Mortgaged Property determined in accordance with the Program Guide and given by the related
Mortgagor in his or her application.
Statutory Trust Statute: Chapter 38 of Title 12 of the Delaware Code, 12 Del. Code
ss.ss.3801 et seq., as the same may be amended from time to time.
Stepdown Date: The later of (i) the Payment Date in October 2008 and (ii) the
Payment Date on which the Pool Balance (after applying payments received in the related
Collection Period) as of such Payment Date is less than 50% of the initial Pool Balance.
Subservicer: Each Person that enters into a Subservicing Agreement as a subservicer
of Home Loans.
Subservicing Agreement: The written contract between the Servicer and any
Subservicer relating to servicing and administration of certain Home Loans as provided in
Section 3.01 of the Servicing Agreement.
Substitution Adjustment Amount: With respect to any Eligible Substitute Loan and any
Deleted Loan, the amount, if any, as determined by the Servicer, by which the aggregate
principal balance of all such Eligible Substitute Loans as of the date of substitution is
less than the aggregate Principal Balance of all such Deleted Loans (after application of
the principal portion of the Monthly Payments due in the month of substitution that are to
be distributed to the Securityholders in the month of substitution).
Tangible Net Worth: Net Worth, less the sum of the following (without duplication):
(a) any other assets of GMACM and its consolidated subsidiaries that would be treated as
intangibles under GAAP including, without limitation, any write-up of assets (other than
adjustments to market value to the extent required under GAAP with respect to excess
servicing, residual interests in offerings of asset-backed securities and asset-backed
securities that are interest-only securities), good-will, research and development costs,
trade-marks, trade names, copyrights, patents and unamortized debt discount and expenses and
(b) loans or other extensions of credit to officers of GMACM or its consolidated
subsidiaries other than mortgage loans made to such Persons in the ordinary course of
business.
Tax Matters Partner: GMACM, as initial Certificateholder.
Transfer Date: The Payment Date on which the Servicer, upon receipt of written
notice and direction from the Issuer, shall cause the retransfer of Mortgage Loans from the
Trust Estate to the Issuer, pursuant to Section 3.15(c) of the Servicing Agreement.
Transfer Notice Date: The fifth Business Day prior to the Transfer Date for which
the Servicer shall give the Indenture Trustee, the Rating Agencies and the Credit Enhancer a
written notice of the proposed retransfer of Mortgage Loans, pursuant to Section 3.15(c) of
the Servicing Agreement.
Treasury Regulations: Regulations, including proposed or temporary Regulations,
promulgated under the Code. References herein to specific provisions of proposed or
temporary regulations shall include analogous provisions of final Treasury Regulations or
other successor Treasury Regulations.
Trust Agreement: The trust agreement dated as of March 30, 2006, between the Owner
Trustee and the Depositor.
Trust Estate: The meaning specified in the Granting Clause of the Indenture.
Trust Indenture Act or TIA: The Trust Indenture Act of 1939, as amended from time to
time, as in effect on any relevant date.
UCC: The Uniform Commercial Code, as amended from time to time, as in effect in any
specified jurisdiction.
WG Trust: Walnut Grove Mortgage Loan Trust 2003-A, a Delaware statutory trust.
