EXHIBIT 99.1
EXECUTION COPY
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STRUCTURED ASSET MORTGAGE INVESTMENTS INC.,
as Seller,
GMAC MORTGAGE CORPORATION,
as Servicer,
and
NORWEST BANK MINNESOTA, NATIONAL ASSOCIATION,
as Trustee
---------------------------------
POOLING AND SERVICING AGREEMENT
Dated as of November 1, 1999
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Mortgage Pass-Through Certificates
Series 1999-J2
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Table of Contents
Page
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ARTICLE I
DEFINITIONS
Section 1.01. Defined Terms....................................3
ARTICLE II
CONVEYANCE OF MORTGAGE LOANS; ORIGINAL ISSUANCE OF CERTIFICATES
Section 2.01. Conveyance of Mortgage Loans....................28
Section 2.02. Acceptance of the Trust Fund by the Trustee.....31
Section 2.03. Representations, Warranties and Covenants of
the Servicer....................................32
Section 2.04. Representations and Warranties of the
Originator and Seller...........................33
Section 2.05. Issuance of Certificates Evidencing Interests
in the Trust Fund...............................35
ARTICLE III
ADMINISTRATION AND SERVICING OF THE TRUST FUND
Section 3.01. Servicer to Service Mortgage Loans..............36
Section 3.02. Subservicing; Enforcement of the Obligations
of Subservicers.................................37
Section 3.03. Collection of Certain Mortgage Loan Payments....37
Section 3.04. Establishment of Custodial Accounts.............37
Section 3.05. Deposits in the Custodial Account...............38
Section 3.06. Permitted Withdrawals From the Custodial
Account.........................................39
Section 3.07. Investment of Funds in the Custodial Account....40
Section 3.08. Transfer of Accounts............................40
Section 3.09. Collection of Taxes, Assessments and Similar
Items; Escrow Accounts..........................40
Section 3.10. Maintenance of Hazard Insurance; Maintenance
of Primary Insurance Policies...................41
Section 3.11. Enforcement of Due-on-Sale Clauses; Assumption
Agreements......................................42
Section 3.12. Realization Upon Defaulted Mortgage Loans.......43
Section 3.13. Trustee to Cooperate; Release of Mortgage
Files...........................................45
Section 3.14. Documents, Records and Funds in Possession
of the Servicer to be Held for the Trustee......46
Section 3.15. Servicing Compensation..........................47
Section 3.16. Access to Certain Documentation.................47
Section 3.17. Annual Statement as to Compliance...............48
Section 3.18. Annual Independent Public Accountants' Servicing
Statement; Financial Statements.................48
Section 3.19. Errors and Omissions Insurance; Fidelity Bonds..48
Section 3.20. [Reserved]......................................48
Section 3.21. Additional Obligations of the Seller............48
Section 3.22. Periodic Filings with the Securities and
Exchange Commission; Additional Information.....49
Section 3.23. Rights of the Seller and the Trustee in
Respect of the Servicer.........................49
Section 3.24. Trustee to Act as Servicer......................49
Section 3.25. Certificate Account.............................50
Section 3.26. Permitted Withdrawals from the Certificate
Account.........................................50
Section 3.27. Investment of Funds in the Certificate Account..51
ARTICLE IV
PAYMENTS TO CERTIFICATEHOLDERS
Section 4.01. Certificate Account; Distributions..............52
Section 4.02. Statements to Certificateholders................58
Section 4.03. Remittance Reports; Monthly Advances by the
Servicer; Liquidation Reports...................60
Section 4.04. Allocation of Realized Losses...................61
Section 4.05. Information Reports to Be Filed by the Servicer.62
Section 4.06. Compliance with Withholding Requirements........62
ARTICLE V
THE CERTIFICATES
Section 5.01. The Certificates................................63
Section 5.02. Registration of Transfer and Exchange of
Certificates....................................64
Section 5.03. Mutilated, Destroyed, Lost or Stolen
Certificates....................................68
Section 5.04. Persons Deemed Owners...........................68
ARTICLE VI
THE SERVICER
Section 6.01. Liability of the Servicer.......................69
Section 6.02. Merger, Consolidation or Conversion of the
Servicer........................................69
Section 6.03. Limitation on Liability of the Servicer and
Others..........................................69
Section 6.04. Limitation on Resignation of the Servicer.......70
Section 6.05. Sale and Assignment of Servicing................70
ARTICLE VII
DEFAULT
Section 7.01. Events of Default...............................71
Section 7.02. Trustee to Act; Appointment of Successor........72
Section 7.03. Notification to Certificateholders..............73
Section 7.04. List of Certificateholders......................73
ARTICLE VIII
CONCERNING THE TRUSTEE
Section 8.01. Duties of Trustee...............................74
Section 8.02. Certain Matters Affecting The Trustee...........75
Section 8.03. Trustee Not Liable for Certificates Or
Mortgage Loans..................................76
Section 8.04. Trustee May Own Certificates....................77
Section 8.05. Fees And Expenses...............................77
Section 8.06. Eligibility Requirements For Trustee............77
Section 8.07. Insurance.......................................78
Section 8.08. Resignation And Removal Of The Trustee..........78
Section 8.09. Successor Trustee...............................78
Section 8.10. Merger Or Consolidation Of Trustee..............79
Section 8.11. Appointment Of Co-Trustee Or Separate Trustee...79
Section 8.12. Servicer Shall Provide Information As
Reasonably Required.............................80
Section 8.13. Federal Information Returns and Reports to
Certificateholders..............................80
ARTICLE IX
TERMINATION
Section 9.01. Termination Upon Repurchase or Liquidation
of All Mortgage Loans or upon Purchase of
Certificates....................................82
Section 9.02. Additional Termination Requirements.............83
ARTICLE X
REMIC PROVISIONS
Section 10.01. REMIC Administration...........................85
Section 10.02. Prohibited Transactions and Activities.........87
Section 10.03. Tax Indemnification............................87
ARTICLE XI
MISCELLANEOUS PROVISIONS
Section 11.01. Amendment......................................88
Section 11.02. Recordation of Agreement; Counterparts.........89
Section 11.03. Limitation on Rights of Certificateholders.....89
Section 11.04. Governing Law..................................90
Section 11.05. Notices........................................90
Section 11.06. Severability of Provisions.....................90
Section 11.07. Successors and Assigns; Third Party
Beneficiary....................................90
Section 11.08. Article and Section Headings...................90
Section 11.09. Notice to Rating Agencies......................91
EXHIBIT A-1 -Form of Class A Certificate................A-1-1
EXHIBIT A-2 -Form of Class X Certificate and Class PO
Certificate................................A-2-1
EXHIBIT A-3 -Form of Class R Certificate................A-3-1
EXHIBIT B -Form of Class B Certificate..................B-1
EXHIBIT C -[Reserved] .............................C-1
EXHIBIT D -Form of Remittance Report....................D-1
EXHIBIT E -Request for Release..........................E-1
EXHIBIT F-1 -Form of Investor Representation Letter.....F-1-1
EXHIBIT F-2 -Form of Transferor Representation Letter...F-2-1
EXHIBIT F-3 -Form of Rule 144A Investment
Representation.............................F-3-1
EXHIBIT F-4 -Transferor Certificate for Transfers of
Residual Certificates......................F-4-1
EXHIBIT F-5 -Transfer Affidavit and Agreement for
Transfers of Residual Certificates.........F-5-1
EXHIBIT F-6 -Form of ERISA Representation Letter........F-6-1
EXHIBIT G -Mortgage Loan Schedule.......................G-1
EXHIBIT H -Pricing and Prepayment Certificate...........H-1
EXHIBIT I -Schedule of Discount Fractions...............I-1
EXHIBIT J -Custodial Account Letter Agreement...........J-1
EXHIBIT K -Escrow Account Letter Agreement..............K-1
EXHIBIT L -Targeted Balance Schedules...................L-1
EXHIBIT M -Form of Trustee Initial Certification........M-1
EXHIBIT N -Form of Trustee Final Certification..........N-1
This Pooling and Servicing Agreement (the "Agreement"), dated as of
November 1, 1999, among STRUCTURED ASSET MORTGAGE INVESTMENTS INC., as Seller
(the "Seller"), GMAC MORTGAGE CORPORATION, as Servicer (the "Servicer") and
NORWEST BANK MINNESOTA, NATIONAL ASSOCIATION, as Trustee (the "Trustee").
PRELIMINARY STATEMENT:
The Seller intends to sell mortgage pass-through certificates
(collectively, the "Certificates"), to be issued hereunder in multiple classes,
which in the aggregate will evidence the entire beneficial ownership interest
in the Mortgage Loans (as defined herein). The Trust Fund for federal income
tax purposes will consist of a single REMIC. The Regular Interests will
represent the "regular interests" in the Trust Fund and the Residual
Certificates will represent the single "residual interest" in the Trust Fund.
Solely for purposes of Section 1.860G-1(a)(4)(iii) of the Treasury regulations,
the Distribution Date immediately following the maturity date for the Mortgage
Loan with the latest maturity date in the Mortgage Pool has been designated as
the "latest possible maturity date" for the Certificates.
As of the Cut-off Date, the Mortgage Loans have an aggregate Stated
Principal Balance equal to $302,326,338.
The following table sets forth characteristics of the Certificates,
together with the minimum denominations and integral multiples in excess
thereof in which such Classes shall be issuable (except that one Certificate of
each Class of Certificates may be issued in a different amount):
Initial Certificate Integral Multiples
Principal Pass-Through Minimum in Excess of
Balance Rate Denomination Minimum
------------------- ------------------- ------------- ------------- ------------------
Class A-1 $153,595,000 7.00% $1,000 $1
Class A-2 36,100,000 7.00% $1,000 $1
Class A-3 20,000,001 7.00% $1,000 $1
Class A-4 30,232,365 7.00% $1,000 $1
Class A-5 29,722,634 7.00% $1,000 $1
Class A-6 510,000 7.00% $1,000 $1
Class A-7 13,588,146 7.00% $1,000 $1
Class X (1) (2) $1,000 $1
Class PO 4,973,406 (3) $1,000 $1
Class R 100 7.00% $100(4) N/A
Class B-1(5) 7,255,800 7.00% $25,000 $1
Class B-2(5) 2,569,800 7.00% $25,000 $1
Class B-3(5) 1,360,400 7.00% $25,000 $1
Class B-4(5) 1,209,300 7.00% $100,000 $1,000
Class B-5(5) 453,500 7.00% $100,000 $1,000
Class B-6(5) 755,886 7.00% $100,000 $1,000
-------------------
(1) Notional amount (initially $199,344,359.53). This class pays only
interest, calculated on a notional amount which is not paid, at a rate
equal to the weighted average of the excess of (a) the Net Mortgage
Rates on each Non-Discount Mortgage Loan over (b) 7.00% per annum.
(2) The pass-through rate for the initial interest accrual period is
approximately 0.5491% per annum.
(3) This class pays only principal.
(4) The Class R Certificates will be issued as a single certificate
with a $100 Certificate Principal Balance.
(5) This class is a subordinate certificate.
Set forth below are designations of Classes of Certificates to the
categories used herein:
Book-Entry Certificates.................All Classes of Certificates other than the Physical Certificates.
Class A Certificates....................The Class A-1, Class A-2, Class A-3, Class A-4, Class A-5, Class A-6 and
Class A-7 Certificates.
ERISA-Restricted
Certificates............................The Residual Certificates, the Class A-6 Certificates and the Subordinate
Certificates.
Interest Only Certificates..............The Class X Certificates.
Lockout Certificates....................The Class A-5 and Class A-6 Certificates.
Offered Certificates....................The Senior Certificates and the Offered Subordinate Certificates.
Offered Subordinate Certificates........The Class B-1, Class B-2, and Class B-3 Certificates.
Physical Certificates...................The Residual and the Private Certificates.
Principal Only
Certificates............................The Class PO Certificates.
Private Certificates....................The Class B-4, Class B-5 and Class B-6 Certificates.
Rating Agencies.........................▇▇▇▇▇'▇ and Fitch.
Regular Certificates....................All Classes of Certificates, other than the Residual Certificates.
Residual Certificates...................The Class R Certificates.
Senior Certificates.....................The Class A, Class X, Class PO and Residual Certificates.
Senior Support
Lockout Certificates....................The Class A-6 Certificates.
Subordinate Certificates................The Class B-1, Class B-2, Class B-3, Class B-4, Class B-5 and Class B-6
Certificates.
Super Senior Certificates...............The Class A-4 Certificates.
Support Certificates....................The Class A-3 Certificates.
Targeted Principal
Classes.................................The Class A-1, Class A-2 and Class A-7 Certificates.
WITNESSETH
In consideration of the mutual agreements herein contained, the
Seller, the Servicer and the Trustee agree as follows:
ARTICLE I
DEFINITIONS
Section 1.01. Defined Terms.
Whenever used in this Agreement, the following words and phrases,
unless the context otherwise requires, shall have the meanings specified in
this Article.
Accrued Certificate Interest: With respect to each Distribution Date,
(a) in the case of each class of Offered Certificates (other than the Interest
Only Certificates and Principal Only Certificates), interest accrued for the
preceding Interest Accrual Period on the Certificate Principal Balance of the
Certificates of such class immediately prior to such Distribution Date at the
related Pass-Through Rate and (b) in the case of the Interest Only
Certificates, interest accrued for the preceding Interest Accrual Period on the
Notional Amount at the then-applicable Pass-Through Rate. Accrued Certificate
Interest will be calculated on the basis of a 360-day year consisting of twelve
30-day months. In each case, Accrued Certificate Interest on any Class of
Certificates will be reduced by the amount of (i) Prepayment Interest
Shortfalls, if any, which are not covered by the Servicer with a payment of
Compensating Interest pursuant to Section 3.25 with respect to such
Distribution Date, (ii) the interest portion (adjusted to the related Net
Mortgage Rate) of Realized Losses (including Excess Special Hazard Losses,
Excess Fraud Losses, Excess Bankruptcy Losses and Extraordinary Losses) not
allocated solely to one or more Classes of Certificates pursuant to Section
4.04 and (iii) any other interest shortfalls not covered by the subordination
provided by the Class B Certificates and, with respect to the Super Senior
Certificates, by the subordination provided by the Senior Support Lockout
Certificates, including interest that is not collectible from the Mortgagor
pursuant to the Relief Act or similar legislation or regulations as in effect
from time to time with all such reductions allocated among all of the
Certificates in proportion to their respective amounts of Accrued Certificate
Interest payable on such Distribution Date which would have resulted absent
such reductions. In addition to that portion of the reductions described in the
preceding sentence that are allocated to any Class of Class B Certificates,
Accrued Certificate Interest on any Class of the Class B Certificates, as
applicable, will be reduced by the interest portion (adjusted to the related
Net Mortgage Rate) of the portion of Realized Losses that are allocated solely
to the Class B Certificates, as applicable, pursuant to Section 4.04. The
Principal Only Certificates do not have a Pass-Through Rate and are not
entitled to Accrued Certificate Interest.
Agreement: This Pooling and Servicing Agreement and all amendments
hereof.
Amount Held for Future Distribution: As to any Distribution Date, the
total of the amounts held in the Custodial Account at the close of business on
the preceding Determination Date which were received after the Cut-off Date on
account of (i) Liquidation Proceeds, Insurance Proceeds, and Partial Principal
Prepayments received or made in the month of such Distribution Date, (ii) Full
Principal Prepayments received after the 15th day of the month in which such
Distribution Date occurs, and (iii) payments which represent early receipt of
Scheduled Monthly Payments due on a date or dates subsequent to the related Due
Date.
Anniversary: Each anniversary of November 1.
Assignment: An assignment of Mortgage, notice of transfer or
equivalent instrument, in recordable form, which is sufficient under the laws
of the jurisdiction wherein the related Mortgaged Property is located to
reflect of record the sale of the Mortgage.
Available Distribution Amount: With respect to any Distribution Date,
an amount equal to (a) the sum of (i) the balance on deposit in the Custodial
Account as of the close of business on the related Determination Date and (ii)
the aggregate amount of any Monthly Advances made and all amounts required to
be paid by the Servicer pursuant to Sections 3.10, 3.25 and 4.03 by deposits
into the Custodial Account or the Certificate Account, reduced by (b) the sum,
as of the close of business on the related Determination Date, of (i) Scheduled
Monthly Payments collected but due during a Due Period subsequent to the Due
Period ending on the first day of the month in which such Distribution Date
occurs, (ii) Partial Principal Prepayment received on or after the first day of
the month in which such Distribution Date occurs, (iii) Full Principal
Prepayment received after the 15th day of the month in which such Distribution
Date occurs, (iv) any other amounts reimbursable or payable to the Servicer
pursuant to Section 3.06, (v) the Servicing Fee payable on such Distribution
Date, (vi) the Trustee Fee payable to the Trustee on such Distribution Date,
(vii) certain expenses incurred by the Trustee related to the termination of
the Servicer or the appointment of a successor Servicer to the extent such
expenses are not reimbursed by the Servicer and (viii) Insurance Proceeds,
Liquidation Proceeds, Principal Prepayments, REO Proceeds and the proceeds of
Mortgage Loan purchases made pursuant to Section 2.02, 2.04, 3.11 or 3.12, in
each case received or made in the month in which such Distribution Date occurs.
Bankruptcy Amount: As of any date of determination prior to the first
Anniversary, an amount equal to the excess, if any, of (A) $100,000 over (B)
the aggregate amount of Bankruptcy Losses allocated solely to one or more
specific Classes of Certificates in accordance with Section 4.04. As of any
date of determination on or after the first Anniversary, an amount equal to the
excess, if any, of the lesser of (a) the Bankruptcy Amount calculated as of the
close of business on the Business Day immediately preceding the most recent
Anniversary coinciding with or preceding such date of determination (or, if
such date of determination is an Anniversary, the Business Day immediately
preceding such date of determination) (for purposes of this definition, the
"Relevant Anniversary") and (b) the greater of (i) $100,000 and (ii) 0.0006
times the aggregate principal balance of all the Mortgage Loans in the Mortgage
Pool as of the Relevant Anniversary having a Loan-to-Value Ratio at origination
which exceeds 75%.
The Bankruptcy Amount may be further reduced by the Servicer
(including accelerating the manner in which such coverage is reduced) provided
that prior to any such reduction, the Servicer shall (i) obtain written
confirmation from each Rating Agency that such reduction shall not reduce the
rating assigned to any Class of Certificates by such Rating Agency below the
lower of the then-current rating or the rating assigned to such Certificates as
of the Closing Date by such Rating Agency and (ii) provide a copy of such
written confirmation to the Trustee.
Bankruptcy Code: The Bankruptcy Code of 1978, as amended.
Bankruptcy Loss: With respect to any Mortgage Loan, a Deficient
Valuation or Debt Service Reduction as reported by the Servicer or by any other
party hereto.
Book-Entry Certificate: Any Certificate registered in the name of the
Depository or its nominee, and initially, all Classes of Certificates other
than the Physical Certificates.
Business Day: Any day other than a Saturday, a Sunday or a day on
which banking institutions in Minnesota, Pennsylvania or New York (and such
other state or states in which the Custodial Account or the Certificate Account
are at the time located) or in the city in which the Corporate Trust Office of
the Trustee is located are authorized or obligated by law or executive order to
close.
Cash Liquidation: As to any Defaulted Mortgage Loan (other than a
Mortgage Loan as to which an REO Acquisition occurred), a determination by the
Servicer that it has received all Insurance Proceeds, Liquidation Proceeds and
other payments or cash recoveries which the Servicer reasonably and in good
faith expects to be finally recoverable with respect to such Mortgage Loan.
Certificate: Any Class A-1, Class A-2, Class A-3, Class A-4, Class
A-5, Class A-6, Class A-7, Class X, Class PO, Class B-1, Class B-2, Class B-3,
Class B-4, Class B-5, Class B-6 or Class R Certificate.
Certificate Account: The trust account or accounts created and
maintained pursuant to Section 3.25, which shall be entitled "Norwest Bank
Minnesota, National Association, in trust for registered holders of Structured
Asset Mortgage Investments Inc., Mortgage Pass-Through Certificates, Series
1999-J2", and which account or accounts must each be an Eligible Account.
Certificateholder or Holder: The Person in whose name a Certificate is
registered in the Certificate Register, except that, only a Permitted
Transferee shall be a holder of a Residual Certificate for any purposes hereof
and, solely for the purposes of giving any consent pursuant to this Agreement,
any Certificate registered in the name of the Seller or the Servicer or any
affiliate thereof shall be deemed not to be outstanding and the Voting Rights
to which such Certificate is entitled shall not be taken into account in
determining whether the requisite percentage of Voting Rights necessary to
effect any such consent has been obtained, except as otherwise provided in
Section 11.01. The Trustee shall be entitled to rely upon a certification of
the Seller or the Servicer in determining if any Certificates are registered in
the name of the respective affiliate. All references herein to "Holders" or
"Certificateholders" shall reflect the rights of Certificate Owners as they may
indirectly exercise such rights through the Depository and participating
members thereof, except as otherwise specified herein; provided, however, that
the Trustee shall be required to recognize as a "Holder" or "Certificateholder"
only the Person in whose name a Certificate is registered in the Certificate
Register.
Certificate Owner: With respect to a Book-Entry Certificate, the
Person who is the beneficial owner of such Certificate, as reflected on the
books of an indirect participating brokerage firm for which a Depository
Participant acts as agent, if any, and otherwise on the books of a Depository
Participant, if any, and otherwise on the books of the Depository.
Certificate Principal Balance: With respect to any Certificate other
than Interest Only Certificates on any date of determination, an amount equal
to (i) the Initial Certificate Principal Balance of such Certificate as
specified on the face thereof, minus (ii) the sum of (a) the aggregate of all
amounts previously distributed with respect to such Certificates (or any
predecessor Certificate) and applied to reduce the Certificate Principal
Balance thereof pursuant to Section 4.01, and (b) the aggregate of all
reductions in Certificate Principal Balance deemed to have occurred in
connection with Realized Losses which were previously allocated to such
Certificate (or any predecessor Certificate) pursuant to Section 4.04. With
respect to each Class B Certificate, on any date of determination, an amount
equal to (i) the Initial Certificate Principal Balance of such Class B
Certificate as specified on the face thereof, minus (ii) the sum of (x) the
aggregate of all amounts previously distributed with respect to such
Certificate (or any predecessor Certificate) and applied to reduce the
Certificate Principal Balance thereof pursuant to Section 4.01 and (y) the
aggregate of all reductions in Certificate Principal Balance deemed to have
occurred in connection with Realized Losses which were previously allocated to
such Certificate (or any predecessor Certificate) pursuant to Section 4.04;
provided, that the Certificate Principal Balance of each Class B Certificate of
those Class B Certificates outstanding with the highest numerical designation
at any given time shall be calculated to equal the Percentage Interest
evidenced by such Certificate times the excess, if any, of (A) the then
aggregate Stated Principal Balance of the Mortgage Loans over (B) the then
aggregate Certificate Principal Balance of all other Classes of Certificates
then outstanding. The Interest Only Certificates have no Certificate Principal
Balance.
Certificate Register: The register maintained pursuant to Section
5.02.
Class: Collectively, all of the Certificates bearing the same
designation.
Class A Certificate: Any one of the Class ▇-▇, ▇▇▇▇▇ ▇-▇, Class A-3,
Class A-4, Class A-5, Class A-6 or Class A-7 Certificates, each executed,
authenticated and delivered by the Trustee substantially in the form annexed
hereto as Exhibit A-1 and each evidencing an interest designated as a "regular
interest" in the Trust Fund for purposes of the REMIC Provisions.
Class B Certificate: Any of the Class B-1 Certificates, Class B-2
Certificates, Class B-3 Certificates, Class B-4 Certificates, Class B-5
Certificates or Class B-6 Certificates.
Class B Percentage: The Class B-1 Percentage, Class B-2 Percentage,
Class B-3 Percentage, Class B-4 Percentage, Class B-5 Percentage or Class B-6
Percentage.
Class B-1 Certificate: Any one of the Class B-1 Certificates executed,
authenticated and delivered by the Trustee substantially in the form annexed
hereto as Exhibit B, subordinate to the Senior Certificates with respect to
distributions and the allocation of Realized Losses as set forth in Section
4.04 and evidencing an interest designated as a "regular interest" in the Trust
Fund for purposes of the REMIC Provisions.
Class B-1 Percentage: With respect to any Distribution Date, the
lesser of 100% and a fraction, expressed as a percentage, the numerator of
which is the aggregate Certificate Principal Balance of the Class B-1
Certificates immediately prior to such Distribution Date and the denominator of
which is the aggregate Stated Principal Balance of all of the Mortgage Loans
(or related REO Properties) (other than the related Discount Fraction of each
Discount Mortgage Loan) immediately prior to such Distribution Date).
Class B-2 Certificate: Any one of the Class B-2 Certificates executed,
authenticated and delivered by the Trustee substantially in the form annexed
hereto as Exhibit B, subordinate to the Senior Certificates and Class B-1
Certificates with respect to distributions and the allocation of Realized
Losses as set forth in Section 4.04 and evidencing an interest designated as a
"regular interest" in the Trust Fund for purposes of the REMIC Provisions.
Class B-2 Percentage: With respect to any Distribution Date, the
lesser of 100% and a fraction, expressed as a percentage, the numerator of
which is the aggregate Certificate Principal Balance of the Class B-2
Certificates immediately prior to such Distribution Date and the denominator of
which is the aggregate Stated Principal Balance of all of the Mortgage Loans
(and related REO Properties) (other than the related Discount Fraction of each
Discount Mortgage Loan) immediately prior to such Distribution Date.
Class B-2 Prepayment Distribution Trigger: With respect to any
Distribution Date, a test that shall be satisfied if the fraction (expressed as
a percentage) equal to the sum of the Certificate Principal Balances of the
Class B-2 Certificates, Class B-3 Certificates, Class B-4 Certificates, Class
B-5 Certificates and Class B-6 Certificates immediately prior to such
Distribution Date divided by the aggregate Stated Principal Balance of all of
the Mortgage Loans (and related REO Properties) immediately prior to such
Distribution Date is greater than or equal to 2.10%.
Class B-3 Certificate: Any one of the Class B-3 Certificates executed,
authenticated and delivered by the Trustee substantially in the form annexed
hereto as Exhibit B, subordinate to the Senior Certificates, Class B-1
Certificates and Class B-2 Certificates with respect to distributions and the
allocation of Realized Losses as set forth in Section 4.04 and evidencing an
interest designated as a "regular interest" in the Trust Fund for purposes of
the REMIC Provisions.
Class B-3 Percentage: With respect to any Distribution Date, the
lesser of 100% and a fraction, expressed as a percentage, the numerator of
which is the aggregate Certificate Principal Balance of the Class B-3
Certificates immediately prior to such Distribution Date and the denominator of
which is the aggregate Stated Principal Balance of all of the Mortgage Loans
(and related REO Properties) (other than the related Discount Fraction of each
Discount Mortgage Loan) immediately prior to such Distribution Date.
Class B-3 Prepayment Distribution Trigger: With respect to any
Distribution Date, a test that shall be satisfied if the fraction (expressed as
a percentage) equal to the aggregate Certificate Principal Balance of the Class
B-3 Certificates, Class B-4 Certificates, Class B-5 Certificates and Class B-6
Certificates immediately prior to such Distribution Date divided by the
aggregate Stated Principal Balance of all of the Mortgage Loans (or related REO
Properties) immediately prior to such Distribution Date is greater than or
equal to 1.25%.
Class B-4 Certificate: Any one of the Class B-4 Certificates executed,
authenticated and delivered by the Trustee substantially in the form annexed
hereto as Exhibit B, subordinate to the Senior Certificates, Class B-1
Certificates, Class B-2 Certificates and Class B-3 Certificates with respect to
distributions and allocation of Realized Losses as set forth in Section 4.04
and evidencing an interest designated as a "regular interest" in the Trust Fund
for purposes of the REMIC Provisions.
Class B-4 Percentage: With respect to any Distribution Date, the
lesser of 100% and a fraction, expressed as a percentage, the numerator of
which is the aggregate Certificate Principal Balance of the Class B-4
Certificates immediately prior to such date and the denominator of which is the
aggregate Stated Principal Balance of all of the Mortgage Loans (or related REO
Properties) (other than the related Discount Fraction of each Discount Mortgage
Loan) immediately prior to such Distribution Date.
Class B-4 Prepayment Distribution Trigger: With respect to any
Distribution Date, a test that shall be satisfied if the fraction (expressed as
a percentage) equal to the sum of the Certificate Principal Balances of the
Class B-4 Certificates, Class B-5 Certificates and Class B-6 Certificates
immediately prior to such Distribution Date divided by the aggregate Stated
Principal Balance of all of the Mortgage Loans (or related REO Properties)
immediately prior to such Distribution Date is greater than or equal to 0.80%.
Class B-5 Certificate: Any one of the Class B-5 Certificates executed,
authenticated and delivered by the Trustee substantially in the form annexed
hereto as Exhibit B, subordinate to the Senior Certificates, Class B-1
Certificates, Class B-2 Certificates, Class B-3 Certificates and Class B-4
Certificates with respect to distributions and the allocation of Realized
Losses as set forth in Section 4.04 and evidencing an interest designated as a
"regular interest" in the Trust Fund for purposes of the REMIC Provisions.
Class B-5 Percentage: With respect to any Distribution Date, the
lesser of 100% and a fraction, expressed as a percentage, the numerator of
which is the aggregate Certificate Principal Balance of the Class B-5
Certificates immediately prior to such date and the denominator of which is the
aggregate Stated Principal Balance of all of the Mortgage Loans (or related REO
Properties) (other than the related Discount Fraction of each Discount Mortgage
Loan) immediately prior to such Distribution Date.
Class B-5 Prepayment Distribution Trigger: With respect to any
Distribution Date, a test that shall be satisfied if the fraction (expressed as
a percentage) equal to the sum of the Certificate Principal Balances of the
Class B-5 Certificates and Class B-6 Certificates immediately prior to such
Distribution Date divided by the aggregate Stated Principal Balance of all of
the Mortgage Loans (and related REO Properties) immediately prior to such
Distribution Date is greater than or equal to 0.40%.
Class B-6 Certificate: Any one of the Class B-6 Certificates executed,
authenticated and delivered by the Trustee substantially in the form annexed
hereto as Exhibit B, subordinate to the Senior Certificates, Class B-1
Certificates Class B-2 Certificates, Class B-3 Certificates, Class B-4
Certificates and Class B-5 Certificates with respect to distributions and the
allocation of Realized Losses as set forth in Section 4.04 and evidencing an
interest designated as a "regular interest" in the Trust Fund for purposes of
the REMIC Provisions.
Class B-6 Percentage: With respect to any Distribution Date, the
lesser of 100% and a fraction, expressed as a percentage, the numerator of
which is the aggregate Certificate Principal Balance of the Class B-6
Certificates immediately prior to such date and the denominator of which is the
aggregate Stated Principal Balance of all of the Mortgage Loans (or related REO
Properties) (other than the related Discount Fraction of each Discount Mortgage
Loan) immediately prior to such Distribution Date.
Class B-6 Prepayment Distribution Trigger: With respect to any
Distribution Date, a test that shall be satisfied if the fraction (expressed as
a percentage) equal to the sum of the Certificate Principal Balances of the
Class B-6 Certificates immediately prior to such Distribution Date divided by
the aggregate Stated Principal Balance of all of the Mortgage Loans (and
related REO Properties) immediately prior to such Distribution Date is greater
than or equal to 0.25%.
Class PO Certificate: Any one of the Class PO Certificates executed by
the Trustee and authenticated by the Certificate Registrar substantially in the
form annexed hereto as Exhibit A-2 and evidencing an interest designated as a
"regular interest" in the Trust Fund for purposes of the REMIC Provisions.
Class PO Collection Shortfalls: With respect to the Cash Liquidation
or REO Disposition of a Discount Mortgage Loan and any Distribution Date, the
excess of the amount described in Section 4.01(c)(first)(C)(1) over the amount
described in Section 4.01(c)(first)(C)(2).
Class PO Principal Distribution Amount: As defined in Section
4.01(c)(first).
Class R Certificate: Any one of the Class R Certificates executed by
the Trustee and authenticated by the Certificate Registrar substantially in the
form annexed hereto as Exhibit A-3 and evidencing an interest designated as a
"residual interest" in the Trust Fund for purposes of the REMIC Provisions.
Class X Certificate: Any one of the Class X Certificates executed by
the Trustee and authenticated by the Certificate Registrar substantially in the
form annexed hereto as Exhibit A-2 and evidencing an interest designated as a
"regular interest" in the Trust Fund for purposes of the REMIC Provisions.
Closing Date: November 30, 1999.
Code: The Internal Revenue Code of 1986, as amended.
Collateral Value: The appraised value of a Mortgaged Property based
upon the lesser of (i) the appraisal (as reviewed and approved by the Seller)
made at the time of the origination of the related Mortgage Loan, or (ii) the
sales price of such Mortgaged Property at such time of origination. With
respect to a Mortgage Loan the proceeds of which were used to refinance an
existing mortgage loan, the appraised value of the Mortgaged Property based
upon the appraisal (as reviewed and approved by the Seller) obtained at the
time of refinancing.
Commission: The Securities and Exchange Commission.
Compensating Interest: With respect to any Distribution Date, an
amount (but not in excess of the Servicing Fee for such Distribution Date)
equal to Prepayment Interest Shortfalls resulting from Principal Prepayments
during the related Prepayment Period.
Corporate Trust Office: The principal corporate trust office of the
Trustee at which at any particular time its corporate trust business related to
this Agreement shall be administered, which office at the date of the execution
of this Agreement is located at Sixth and Marquette, ▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇-▇▇▇▇, ref: SAMI 1999-J2.
Credit Support Depletion Date: The first Distribution Date on which
the Senior Percentage equals 100%.
Custodial Account: The account or accounts created and maintained
pursuant to Section 3.04 in the name of a depository institution, as custodian
for the holders of the Certificates, into which the amounts set forth in
Section 3.05 shall be deposited directly. Any such account or accounts shall be
an Eligible Account.
Custodian: Norwest Bank Minnesota, National Association.
Cut-off Date: November 1, 1999.
Debt Service Reduction: With respect to any Mortgage Loan, a reduction
in the Scheduled Monthly Payment for such Mortgage Loan by a court of competent
jurisdiction in a proceeding under the Bankruptcy Code, except such a reduction
constituting a Deficient Valuation or any reduction that results in a permanent
forgiveness of principal.
Defaulted Mortgage Loan: means any Mortgage Loan as to which the
Mortgagor has failed to make unexcused three (3) or more consecutive Scheduled
Monthly Payments.
Deficient Valuation: With respect to any Mortgage Loan, a valuation by
a court of competent jurisdiction of the Mortgaged Property in an amount less
than the then outstanding indebtedness under the Mortgage Loan, or any
reduction in the amount of principal to be paid in connection with any
Scheduled Monthly Payment that constitutes a permanent forgiveness of
principal, which valuation or reduction results from a proceeding under the
Bankruptcy Code.
Definitive Certificate: Any definitive, fully registered Certificate.
Deleted Mortgage Loan: A Mortgage Loan replaced or to be replaced with
a Qualified Substitute Mortgage Loan.
Depository: The Depository Trust Company, or any successor Depository
hereafter named. The nominee of the initial Depository for purposes of
registering those Certificates that are to be Book-Entry Certificates is Cede &
Co. The Depository shall at all times be a "clearing corporation" as defined in
Section 8-102(5) of the Uniform Commercial Code of the State of New York and a
"clearing agency" registered pursuant to the provisions of Section 17A of the
Securities Exchange Act of 1934, as amended.
Depository Participant: A broker, dealer, bank or other financial
institutions or other Person for whom from time to time a Depository effects
book-entry transfers and pledges of securities deposited with the Depository.
Determination Date: The 15th day (or if such 15th day is not a
Business Day, the Business Day immediately preceding such 15th day) of the
month of the related Distribution Date.
Discount Fraction: With respect to each Discount Mortgage Loan, the
fraction expressed as a percentage, the numerator of which is 7.00% minus the
Net Mortgage Rate (or the initial Net Mortgage Rate with respect to any
Discount Mortgage Loans as to which the Mortgage Rate is modified pursuant to
Section 3.03) for such Mortgage Loan and the denominator of which is 7.00%. The
Discount Fraction with respect to each Discount Mortgage Loan is set forth on
Exhibit I attached hereto.
Discount Mortgage Loan: Any Mortgage Loan having a Net Mortgage Rate
(or initial Net Mortgage Rate) of less than 7.00% per annum and any Mortgage
Loan deemed to be a Discount Mortgage Loan pursuant to the definition of
Qualified Substitute Mortgage Loan.
Disqualified Organization: Any organization defined as a "disqualified
organization" under Section 860E(e)(5) of the Code, which includes any of the
following: (i) the United States, any State or political subdivision thereof,
any possession of the United States, or any agency or instrumentality of any of
the foregoing (other than an instrumentality which is a corporation if all of
its activities are subject to tax and, except for the ▇▇▇▇▇▇▇ Mac, a majority
of its board of directors is not selected by such governmental unit), (ii) a
foreign government, any international organization, or any agency or
instrumentality of any of the foregoing, (iii) any organization (other than
certain farmers' cooperatives described in Section 521 of the Code) which is
exempt from the tax imposed by Chapter 1 of the Code (including the tax imposed
by Section 511 of the Code on unrelated business taxable income), (iv) rural
electric and telephone cooperatives described in Section 1381(a)(2)(C) of the
Code, (v) an "electing large partnership" within the meaning of Section 775 of
the Code and (vi) any other Person so designated by the Trustee based upon an
Opinion of Counsel that the holding of an Ownership Interest in a Class R
Certificate by such Person may cause any REMIC or any Person having an
Ownership Interest in any Class of Certificates (other than such Person) to
incur a liability for any federal tax imposed under the Code that would not
otherwise be imposed but for the Transfer of an Ownership Interest in a Class R
Certificate to such Person. The terms "United States", "State" and
"international organization" shall have the meanings set forth in Section 7701
of the Code or successor provisions.
Distribution Date: The 25th day of any month, or if such 25th day is
not a Business Day, the Business Day immediately following such 25th day,
commencing in December 1999.
Due Date: The first day of the month of the related Distribution Date.
Due Period: With respect to any Distribution Date, the period
commencing on the second day of the month preceding the month of such
Distribution Date (or, with respect to the first Due Period, the day following
the Cut-off Date) and ending on the related Due Date.
Eligible Account: Either (i) an account or accounts maintained with a
federal or state chartered depository institution the accounts of which are
insured by the FDIC (to the limits established by the FDIC) and the short-term
debt ratings and the long-term deposit ratings of which are rated in one of the
two highest rating categories by the Rating Agencies or (ii) a trust account or
accounts maintained with a federal or state chartered depository institution or
trust company with trust powers acting in its fiduciary capacity or (iii) an
account or accounts of a depository institution acceptable to the Rating
Agencies (as evidenced in writing by the Rating Agencies that use of any such
account as the Custodial Account or the Certificate Account will not have an
adverse effect on the then-current ratings assigned to the Classes of the
Certificates then rated by the Rating Agencies). Eligible Accounts may bear
interest.
Eligible Funds: On any Distribution Date, the portion, if any, of the
Available Distribution Amount remaining after reduction by the sum of (i) the
aggregate amount of Accrued Certificate Interest on the Senior Certificates,
(ii) the Senior Principal Distribution Amount, (iii) the Class PO Principal
Distribution Amount (determined without regard to Section 4.01(c)(first)(E)
hereof) and (iv) the aggregate amount of Accrued Certificate Interest on the
Subordinate Certificates.
Escrow Account: The account or accounts created and maintained
pursuant to Section 3.09.
Event of Default: One or more of the events described in Section 7.01.
Excess Bankruptcy Loss: Any Bankruptcy Loss, or portion thereof, which
exceeds the then applicable Bankruptcy Amount.
Excess Fraud Loss: Any Fraud Loss, or portion thereof, which exceeds
the then applicable Fraud Loss Amount.
Excess Liquidation Proceeds: With respect to any Liquidated Mortgage
Loan, any Liquidation Proceeds in excess of the sum of (1) the Stated Principal
Balance of such Mortgage Loan and accrued but unpaid interest at the related
Mortgage Rate through the related Liquidation Date, and (2) related liquidation
expenses, to the extent that such amount is not required by law to be paid to
the related Mortgagor.
Excess Special Hazard Loss: Any Special Hazard Loss, or portion
thereof, that exceeds the then applicable Special Hazard Amount.
Extraordinary Events: Any of the following conditions with respect to
a Mortgaged Property or Mortgage Loan causing or resulting in a loss which
causes the liquidation of such Mortgage Loan:
(a) losses which are otherwise covered by the fidelity bond
and the errors and omissions insurance policy maintained pursuant to
Section 3.19, but are in excess of the coverage maintained thereunder;
(b) nuclear reaction or nuclear radiation or radioactive
contamination, all whether controlled or uncontrolled, or remote or be
in whole or in part caused by, contributed to or aggravated by a peril
covered by the definition of the term "Special Hazard Loss";
(c) hostile or warlike action in time of peace or war,
including action in hindering, combating or defending against an
actual, impending or expected attack;
1. by any government or sovereign power,
de jure or de facto, or by any authority maintaining or
using military, naval or air forces; or
2. by military, naval or air forces; or
3. by an agent of any such government, power,
authority or forces;
(d) any weapon of war employing atomic fission or radioactive
force whether in time of peace or war; or
(e) insurrection, rebellion, revolution, civil war, usurped
power or action taken by governmental authority in hindering,
combating or defending against such an occurrence, seizure or
destruction under quarantine or customs regulations, confiscation by
order of any government or public authority; or risks of contraband or
illegal transportation or trade.
Extraordinary Losses: Any loss incurred on a Mortgage Loan caused by
or resulting from an Extraordinary Event.
FDIC: Federal Deposit Insurance Corporation or any successor.
Final Disposition: With respect to a Defaulted Mortgage Loan is deemed
to have occurred upon a determination by the Servicer that it has received all
Insurance Proceeds, Liquidation Proceeds and other payments or cash recoveries
which the Servicer reasonably and in good faith expects to be finally
recoverable with respect to such Mortgage Loan.
Fitch: Fitch IBCA, Inc., or its successor in interest.
▇▇▇▇▇▇▇ Mac: ▇▇▇▇▇▇▇ Mac (formerly the Federal Home Loan Mortgage
Corporation) or any successor.
Fraud Loss Amount: As of any date of determination after the Cut-off
Date, an amount equal to: (Y) prior to the third Anniversary, an amount equal
to 1.00% of the aggregate outstanding principal balance of all of the Mortgage
Loans as of the Cut-off Date minus the aggregate amount of Fraud Losses
allocated solely to one or more specific Classes of Certificates in accordance
with Section 4.04 since the Cut-off Date up to such date of determination and
(Z) from the third to the fifth Anniversary, an amount equal to (1) the lesser
of (a) the Fraud Loss Amount as of the most recent anniversary of the Cut-off
Date and (b) 0.50% of the aggregate outstanding principal balance of all of the
Mortgage Loans as of the most recent Anniversary minus (2) the Fraud Losses
allocated solely to one or more specific Classes of Certificates in accordance
with Section 4.04 since the most recent Anniversary up to such date of
determination. On and after the fifth Anniversary, the Fraud Loss Amount shall
be zero.
The Fraud Loss Amount may be further reduced by the Servicer
(including accelerating the manner in which such coverage is reduced) provided
that prior to any such reduction, the Servicer shall (i) obtain written
confirmation from each Rating Agency that such reduction shall not reduce the
rating assigned to any Class of Certificates by such Rating Agency below the
lower of the then-current rating or the rating assigned to such Certificates as
of the Closing Date by such Rating Agency and (ii) provide a copy of such
written confirmation to the Trustee.
Fraud Losses: Losses on Mortgage Loans as to which there was fraud in
the origination of such Mortgage Loan as reported by the Servicer or by any
other party hereto.
Full Principal Prepayment: Any Principal Prepayment made by a
Mortgagor of the entire principal balance of the Mortgage Loan.
Hazard Insurance Policy: Each hazard insurance policy required to be
maintained pursuant to Section 3.10.
Indemnified Persons: The Trustee, its officers, directors, agents and
employee and any separate co-trustee and its officers, directors, agents and
employees.
Initial Certificate Principal Balance: With respect to each Class of
Regular Certificates, the Certificate Principal Balance of such Class of
Certificates as of the Cut-off Date as set forth in the Preliminary Statement
hereto.
Initial Notional Amount: With respect to the Interest Only
Certificates, the Notional Amount thereof as of the Cut-off Date.
Insurance Policy: With respect to any Mortgage Loan, any insurance
policy (including a Primary Insurance Policy) which is required to be
maintained from time to time under this Agreement in respect of such Mortgage
Loan.
Insurance Proceeds: Proceeds paid in respect of the Mortgage Loans
pursuant to any Hazard Insurance Policy, any title insurance policy or any
other insurance policy covering a Mortgage Loan, to the extent such proceeds
are not applied to the restoration of the related Mortgaged Property or
released to the Mortgagor in accordance with the procedures that the Servicer
would follow in servicing mortgage loans held for its own account.
Interest Accrual Period: With respect to each Distribution Date and
each Class of Certificates, the calendar month preceding the month in which
such Distribution Date occurs, beginning in November 1999.
Interest Shortfall: With respect to any Distribution Date, an amount
equal to the aggregate shortfall, if any, in collections of interest (adjusted
to the related Net Mortgage Rates) on Mortgage Loans resulting from (a) Full
Principal Prepayments received after the 15th day of the month in which such
Distribution Date occurs, (b) Partial Principal Prepayments received on or
after the first day of the month in which such Distribution Date occurs to the
extent applied after the first day of the month in which such Distribution Date
occurs and (c) interest payments on certain of the Mortgage Loans being limited
pursuant to the provisions of the Relief Act.
Late Collections: With respect to any Mortgage Loan, all amounts
received during any Due Period, whether as late payments of Scheduled Monthly
Payments or as Insurance Proceeds, Liquidation Proceeds or otherwise, which
represent late payments or collections of Scheduled Monthly Payments due but
delinquent for a previous Due Period and not previously recovered.
Liquidation Proceeds: Amounts (other than Insurance Proceeds) received
by the Servicer in connection with the taking of an entire Mortgaged Property
by exercise of the power of eminent domain or condemnation or in connection
with the liquidation of a Defaulted Mortgage Loan through trustee's sale,
foreclosure sale or otherwise, other than amounts received in respect of any
REO Property.
Loan-to-Value Ratio: As of any date, the fraction, expressed as a
percentage, the numerator of which is the current principal balance of the
related Mortgage Loan at the date of determination and the denominator of which
is the Collateral Value of the related Mortgaged Property.
Lockout Distribution Percentage: With respect to any Distribution
Date, the percentage indicated below:
Distribution Date Lockout Distribution Percentage
------------------------------------- -------------------------------
December 1999 through November 2004 0%
December 2004 through November 2005 30%
December 2005 through November 2006 40%
December 2006 through November 2007 60%
December 2007 through November 2008 80%
November 2008 and thereafter 100%
Lost Note Affidavit: With respect to any Mortgage Note, an original
lost note affidavit from the Seller stating that the original Mortgage Note was
lost, misplaced or destroyed, together with a copy of the related Mortgage
Note.
Maturity Date: The latest possible maturity date, solely for purposes
of Section 1.860G-1(a)(4)(iii) of the Treasury regulations, by which (i) the
Certificate Principal Balance of each Class of Certificates (other than the
Interest Only Certificates) or (ii) the Notional Amount of the Interest Only
Certificate would be reduced to zero, which is January 25, 2030, the
Distribution Date immediately following the latest scheduled maturity date of
any Mortgage Loan.
Monthly Advance: As to any Mortgage Loan, any advance or principal and
interest made by the Servicer on any Distribution Date pursuant to Section
4.03.
Moody's: ▇▇▇▇▇'▇ Investors Service, Inc., or its successor in
interest.
Mortgage: The mortgage, deed of trust or any other instrument securing
the Mortgage Loan.
Mortgage File: The mortgage documents listed in Section 2.01
pertaining to a particular Mortgage Loan and any additional documents required
to be added to the Mortgage File pursuant to this Agreement; provided, that
whenever the term "Mortgage File" is used to refer to documents actually
received by the Trustee, such term shall not be deemed to include such
additional documents required to be added unless they are actually so added.
Mortgage Loan: Each of the mortgage loans, transferred and assigned to
the Trustee pursuant to Section 2.01 or Section 2.04 and from time to time held
in the Trust Fund (including any Qualified Substitute Mortgage Loans), the
Mortgage Loans so transferred, assigned and held being identified in the
Mortgage Loan Schedule. As used herein, the term "Mortgage Loan" includes the
related Mortgage Note and Mortgage.
Mortgage Loan Accrued Interest: With respect to each Mortgage Loan and
each Due Date, the aggregate amount of interest accrued at the Mortgage Rate in
respect of such Mortgage Loan since the preceding Due Date (or in the case of
the initial Due Date, since the Cut-off Date) to but not including such Due
Date with respect to which the Mortgage Loan Accrued Interest is being
calculated in accordance with the terms of such Mortgage Loan, after giving
effect to any previous Principal Prepayments, Deficient Valuation or Debt
Service Reduction in respect of such Mortgage Loan.
Mortgage Loan Purchase Agreement: The Mortgage Loan Purchase Agreement
dated as of November 23, 1999 between GMAC Mortgage Corporation, as seller, and
EMC Mortgage Corporation, as purchaser, and all amendments thereof and
supplements thereto.
Mortgage Loan Schedule: As of any date of determination, the schedule
of Mortgage Loans included in the Trust Fund. The initial schedule of Mortgage
Loans with accompanying information transferred on the Closing Date to the
Trustee as part of the Trust Fund for the Certificates, attached hereto as
Exhibit G (as amended from time to time to reflect the addition of Qualified
Substitute Mortgage Loans) (and, for purposes of the Trustee pursuant to
Section 2.02, in computer-readable form as delivered to the Trustee), which
list shall set forth the following information with respect to each Mortgage
Loan:
(i) the loan number and name of the Mortgagor;
(ii) ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇, ▇▇▇▇▇ and zip code of the
Mortgaged Property;
(iii) the original term to maturity;
(iv) the original principal balance and the original
Mortgage Rate;
(v) the first payment date;
(vi) the type of Mortgaged Property;
(vii) the Scheduled Monthly Payment in effect as of the
Cut-off Date;
(viii) the principal balance as of the Cut-off Date;
(ix) the Mortgage Rate as of the Cut-off Date and the Pool
Strip Rate;
(x) the occupancy status;
(xi) the purpose of the Mortgage Loan;
(xii) the Collateral Value of the Mortgaged Property;
(xiii) [Reserved];
(xiv) the paid-through date of the Mortgage Loan;
(xv) the Servicing Fee Rate;
(xvi) the Net Mortgage Rate for such Mortgage Loan;
(xvii) the documentation type.
The Mortgage Loan Schedule may be in the form of more than one
schedule, collectively setting forth all of the information required.
Mortgage Note: The note or other evidence of the indebtedness of a
Mortgagor under a Mortgage Loan.
Mortgage Rate: With respect to any Mortgage Loan, the annual rate at
which interest accrues on such Mortgage Loan.
Mortgaged Property: The underlying property securing a Mortgage Loan.
Mortgagor: The obligor or obligors on a Mortgage Note.
Net Mortgage Rate: With respect to each Mortgage Loan Due Date, a per
annum rate of interest equal to the Mortgage Rate on such Mortgage Loan less
the sum of the Servicing Fee Rate and the Trustee Fee Rate.
Non-Discount Mortgage Loan: Any Mortgage Loan having a Net Mortgage
Rate greater than or equal to 7.00% per annum.
Nonrecoverable Advance: Any Monthly Advance or Servicing Advance
previously made or proposed to be made in respect of a Mortgage Loan which, in
the good faith judgment of the Servicer will not or, in the case of a proposed
Monthly Advance or Servicing Advance, would not be ultimately recoverable from
related Late Collections, Insurance Proceeds, Liquidation Proceeds or REO
Proceeds. The determination by the Servicer that it has made a Nonrecoverable
Advance or that any proposed Monthly Advance or Servicing Advance would
constitute a Nonrecoverable Advance, shall be evidenced by a certificate of a
Servicing Officer delivered to the Seller and the Trustee.
Non-United States Person: Any Person other than a United States
Person.
Notional Amount: The Notional Amount of the Class X Certificates as of
any Distribution Date is equal to the aggregate Stated Principal Balance of the
Non-Discount Mortgage Loans immediately prior to such date.
Officer's Certificate: A certificate signed by the Chairman of the
Board, the Vice Chairman of the Board, the President or a vice president or
assistant vice president or other authorized officer of the Seller or the
Servicer and delivered to the Seller and Trustee.
Opinion of Counsel: A written opinion of counsel, who may be counsel
for the Seller or the Servicer, reasonably acceptable to the Trustee; except
that any opinion of counsel relating to (a) the qualification of any account
required to be maintained pursuant to this Agreement as an Eligible Account,
(b) the qualification of the Trust Fund as a REMIC, (c) compliance with the
REMIC Provisions or (d) resignation of the Servicer pursuant to Section 6.04
must be an opinion of counsel who (i) is in fact independent of the Seller and
the Servicer, (ii) does not have any direct financial interest or any material
indirect financial interest in the Seller or the Servicer or in an affiliate of
either and (iii) is not connected with the Seller or the Servicer as an
officer, employee, director or person performing similar functions.
Original Senior Percentage: The fraction, expressed as a percentage,
the numerator of which is the aggregate Initial Certificate Principal Balance
of the Senior Certificates (other than the Class PO Certificates) and the
denominator of which is the aggregate Stated Principal Balance of the Mortgage
Loans (other than the Discount Fraction of the Discount Mortgage Loans), which
is approximately 95.42% as of the Cut-off Date.
Originator: GMAC Mortgage Corporation, or any successor thereto.
OTS: The Office of Thrift Supervision, or any successor thereto.
Outstanding Mortgage Loan: As to any Due Date, a Mortgage Loan
(including an REO Property) which was not the subject of a Full Principal
Prepayment, Cash Liquidation or REO Disposition and which was not purchased
prior to such Due Date pursuant to Sections 2.02, 2.04 or 3.11.
Ownership Interest: As to any Certificate, any ownership or security
interest in such Certificate, including any interest in such Certificate as the
Holder thereof and any other interest therein, whether direct or indirect,
legal or beneficial, as owner or as pledgee.
Partial Principal Prepayment: Any Principal Prepayment made by a
Mortgagor which is not a Full Principal Prepayment.
Pass-Through Rate: With respect to each related class of Certificates,
a rate equal to the rate set forth in the Preliminary Statement hereto. The
Principal Only Certificates do not have a Pass-Through Rate.
Percentage Interest: With respect to any Certificate (other than a
Class R Certificate), the undivided percentage ownership interest in the
related Class evidenced by such Certificate, which percentage ownership
interest shall be equal to the Initial Certificate Principal Balance thereof or
Initial Notional Amount (in the case of the Interest Only Certificates) divided
by the aggregate Initial Certificate Principal Balance or Initial Notional
Amount, as applicable, of all of the Certificates of the same Class. With
respect to a Class R Certificate, the interest in distributions to be made with
respect to such Class evidenced thereby, expressed as a percentage, as stated
on the face of each such Certificate.
Permitted Investment: One or more of the following:
(i) direct obligations of, and obligations fully guaranteed
by the United States of America or any agency or instrumentality
of the United States of America the obligations of which are backed by
the full faith and credit of the United States of America; provided
that obligations of ▇▇▇▇▇▇▇ Mac or ▇▇▇▇▇▇ Mae shall be Permitted
Investments only if, at the time of investment, they are rated in one
of the two highest rating categories by the Rating Agencies;
(ii) (a) demand or time deposits, federal funds or bankers'
acceptances issued by any depository institution or trust company
incorporated under the laws of the United States of America or any
state thereof and subject to supervision and examination by federal
and/or state banking authorities, provided that the commercial paper
and/or the short-term deposit rating and/or the long-term unsecured
debt obligations or deposits of such depository institution or trust
company at the time of such investment or contractual commitment
providing for such investment are rated in one of the two highest
rating categories by the Rating Agencies and (b) any other demand or
time deposit or certificate of deposit that is fully insured by the
FDIC;
(iii) repurchase obligations with respect to (a) any security
described in clause (i) above or (b) any other security issued or
guaranteed by an agency or instrumentality of the United States of
America, the obligations of which are backed by the full faith and
credit of the United States of America, in either case entered into
with a depository institution or trust company (acting as principal)
described in clause (ii)(a) above;
(iv) securities bearing interest or sold at a discount issued by
any corporation incorporated under the laws of the United States of
America or any state thereof that are rated in one of the two highest
rating categories by the Rating Agencies at the time of such
investment or contractual commitment providing for such investment;
provided, however, that securities issued by any particular
corporation will not be Permitted Investments to the extent that
investments therein will cause the then outstanding principal amount
of securities issued by such corporation and held as Permitted
Investments to exceed 10% of the aggregate outstanding principal
balances and amounts of all the Permitted Investments;
(v) commercial paper (including both non-interest-bearing
discount obligations and interest-bearing obligations payable on
demand or on a specified date not more than one year after the date of
issuance thereof) which are rated in one of the two highest rating
categories by the Rating Agencies;
(vi) any other demand, money market or time deposit, obligation,
security or investment as may be acceptable to each of the Rating
Agencies;
(vii) any money market funds the collateral of which consists of
obligations fully guaranteed by the United States of America or any
agency or instrumentality of the United States of America the
obligations of which are backed by the full faith and credit of the
United States of America (which may include repurchase obligations
secured by collateral described in clause (i)) and other securities
and which money market funds are rated in one of the two highest
rating categories by the Rating Agencies; and
(viii) GMAC Variable Denomination Adjustable Rate Demand Notes
constituting unsecured, senior debt obligations of General Motors
Acceptance Corporation as outlined in the prospectus dated June 17,
1998 and rated by ▇▇▇▇▇'▇ in its highest short-term rating category
available and rated at least "D-1" by Fitch;
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.
Permitted Transferee: Any transferee of a Residual Certificate other
than a Disqualified Organization, a Non-United States Person or an "electing
large partnership" (as defined in Section 775 of the Code).
Person: Any individual, corporation, partnership, joint venture,
association, limited liability company, joint-stock company, trust,
unincorporated organization or government or any agency or political
subdivision thereof.
Pool Strip Rate: With respect to any Distribution Date and any
Non-Discount Mortgage Loan, the Net Mortgage Rate thereon minus 7.00%, but not
less than 0.00%.
Prepayment Assumption: represents an assumed rate of prepayment each
month relative to the then outstanding principal balance of a pool of new
mortgage loans. A 100% Prepayment Assumption assumes a constant prepayment rate
of 0.2% per annum of the then outstanding principal balance of such mortgage
loans in the first month of the life of the mortgage and an additional 0.2% per
annum in each month thereafter (for example, 0.4% per annum in the second
month) until the thirtieth month. Beginning in the thirtieth month and in each
month thereafter during the life of the mortgage loans, a 100% Prepayment
Assumption assumes a constant prepayment rate of 6% per annum.
Prepayment Distribution Percentage: With respect to any Distribution
Date and each Class of Class B Certificates, under the applicable circumstances
set forth below, the respective percentages set forth below:
(i) For any Distribution Date on which any Class B Certificates
are outstanding:
(a) in the case of the Class of Class B Certificates
then outstanding with the lowest numerical designation and
each other Class of Class B Certificates for which the
related Prepayment Distribution Trigger has been satisfied, a
fraction, expressed as a percentage, the numerator of which
is the Certificate Principal Balance of such Class
immediately prior to such date and the denominator of which
is the sum of the Certificate Principal Balances immediately
prior to such date of (1) the Class of Class B Certificates
then outstanding with the lowest numerical designation and
(2) all other Classes of Class B Certificates for which the
respective Prepayment Distribution Triggers have been
satisfied; and
(b) in the case of each other Class of Class B
Certificates for which the Prepayment Distribution Triggers
have not been satisfied, 0%; and
(ii) Notwithstanding the foregoing, if the application of the
foregoing percentages on any Distribution Date as provided in Section
4.01 (determined without regard to the proviso to the definition of
"Subordinate Principal Distribution Amount") would result in a
distribution in respect of principal of any Class or Classes of Class
B Certificates in an amount greater than the remaining Certificate
Principal Balance thereof (any such class, a "Maturing Class"), then:
(a) the Prepayment Distribution Percentage of each Maturing Class
shall be reduced to a level that, when applied as described above,
would exactly reduce the Certificate Principal Balance of such Class
to zero; (b) the Prepayment Distribution Percentage of each other
Class of Class B Certificates (any such Class, a "Non-Maturing Class")
shall be recalculated in accordance with the provisions in paragraph
(i) above, as if the Certificate Principal Balance of each Maturing
Class had been reduced to zero (such percentage as recalculated, the
"Recalculated Percentage"); (c) the total amount of the reductions in
the Prepayment Distribution Percentages of the Maturing Class or
Classes pursuant to clause (a) of this sentence, expressed as an
aggregate percentage, shall be allocated among the Non-Maturing
Classes in proportion to their respective Recalculated Percentages
(the portion of such aggregate reduction so allocated to any
Non-Maturing Class, the "Adjustment Percentage"); and (d) for purposes
of such Distribution Date, the Prepayment Distribution Percentage of
each Non-Maturing Class shall be equal to the sum of (1) the
Prepayment Distribution Percentage thereof, calculated in accordance
with the provisions in paragraph (i) above as if the Certificate
Principal Balance of each Maturing Class had not been reduced to zero,
plus (2) the related Adjustment Percentage.
Prepayment Distribution Trigger: The Class B-2 Prepayment Distribution
Trigger, Class B-3 Prepayment Distribution Trigger, Class B-4 Prepayment
Distribution Trigger, Class B-5 Prepayment Distribution Trigger or Class B-6
Prepayment Distribution Trigger.
Prepayment Interest Shortfall: As to any Distribution Date and any
Mortgage Loan (other than a Mortgage Loan relating to an REO Property) that was
the subject of (a) a Full Principal Prepayment during the related Prepayment
Period, an amount equal to the excess of one month's interest at the Net
Mortgage Rate on the Stated Principal Balance of such Mortgage Loan over the
amount of interest (adjusted to the Net Mortgage Rate) actually paid by the
Mortgagor in the related Due Period to the date of such Full Principal
Prepayment or (b) a Partial Principal Prepayment during the related Prepayment
Period, an amount equal to one month's interest at the Net Mortgage Rate on the
amount of such Partial Principal Prepayment; provided, however, that
notwithstanding any provision above to the contrary, no Prepayment Interest
Shortfall shall arise with respect to a Full Principal Prepayment received by
the Servicer on or before the 15th day of the month in which such Distribution
Date occurs and remitted to the Trustee on the related Remittance Date.
Prepayment Period: As to any Distribution Date, (i) in the case of a
Full Principal Prepayment, the one month period ending on the 15th day of the
month in which such Distribution Date occurs and (ii) in the case of a Partial
Principal Prepayment, the calendar month preceding the month in which such
Distribution Date occurs.
Primary Insurance Policy: Any primary policy of mortgage guaranty
insurance, or any replacement policy therefor providing coverage for certain
Mortgage Loans included in the Trust Fund with Loan-to-Value Ratios in excess
of 80.00%.
Principal Only Certificates: Any one of the Class PO Certificates.
Principal Prepayment: Any payment of principal made by the Mortgagor
on a Mortgage 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.
Purchase Price: With respect to any Mortgage Loan (or REO Property)
required to be purchased pursuant to Section 2.02, 2.04 or 3.11, an amount
equal to 100% of the Stated Principal Balance of such Mortgage Loan as of the
date of repurchase, plus accrued interest thereon at the related Net Mortgage
Rate through and including the end of the month of repurchase, plus any
unreimbursed Monthly Advances or Servicing Advances with respect to such
Mortgage Loan.
Qualified Insurer: Any insurance company duly qualified as such under
the laws of the state or states in which the related Mortgaged Property or
Mortgaged Properties is or are located, duly authorized and licensed in such
state or states to transact the type of insurance business in which it is
engaged and approved as an insurer by the Servicer, so long as the claims
paying ability of which is acceptable to the Rating Agencies for pass-through
certificates having the same rating as the Certificates rated by the Rating
Agencies as of the Closing Date.
Qualified Substitute Mortgage Loan: A Mortgage Loan substituted by the
Seller for a Deleted Mortgage Loan which must, on the date of such
substitution, as confirmed in an Officer's Certificate delivered to the
Trustee, (i) have an outstanding principal balance, after deduction of the
principal portion of the monthly payment due in the month of substitution (or
in the case of a substitution of more than one Mortgage Loan for a Deleted
Mortgage Loan, an aggregate outstanding principal balance, after such
deduction), not in excess of the Stated Principal Balance of the Deleted
Mortgage Loan (the amount of any shortfall to be paid to the Servicer for
deposit in the Custodial Account in the month of substitution); (ii) have a
Mortgage Rate and a Net Mortgage Rate no lower than and not more than 1% per
annum higher than the Mortgage Rate and Net Mortgage Rate, respectively, of the
Deleted Mortgage Loan as of the date of substitution; (iii) have a
Loan-to-Value Ratio at the time of substitution no higher than that of the
Deleted Mortgage Loan at the time of substitution; (iv) have a remaining term
to stated maturity not greater than (and not more than one year less than) that
of the Deleted Mortgage Loan; (v) comply with each representation and warranty
set forth in Section 2.04 hereof; and (vi) have a Pool Strip Rate equal to or
greater than that of the Deleted Mortgage Loan. Notwithstanding any other
provisions herein, (x) with respect to any Qualified Substitute Mortgage Loan
substituted for a Deleted Mortgage Loan which was a Discount Mortgage Loan,
such Qualified Substitute Mortgage Loan shall be deemed to be a Discount
Mortgage Loan and to have a Discount Fraction equal to the Discount Fraction of
the Deleted Mortgage Loan and (y) in the event that the "Pool Strip Rate" of
any Qualified Substitute Mortgage Loan as calculated pursuant to the definition
of "Pool Strip Rate" is greater than the Pool Strip Rate of the related Deleted
Mortgage Loan (i) the Pool Strip Rate of such Qualified Substitute Mortgage
Loan shall be equal to the Pool Strip Rate of the related Deleted Mortgage Loan
for purposes of calculating the Pass-Through Rate for the Interest Only
Certificates and (ii) the excess of the Pool Strip Rate on such Qualified
Substitute Mortgage Loan as calculated pursuant to the definition of "Pool
Strip Rate" over the Pool Strip Rate on the related Deleted Mortgage Loan shall
be payable to the Class R Certificates pursuant to Section 4.01 hereof.
Rating Agency: ▇▇▇▇▇'▇ and Fitch or each of their successors. If such
agencies and their successors are no longer in existence, "Rating Agency" shall
be such nationally recognized statistical rating agency, or other comparable
Person, designated by the Seller, notice of which designation shall be given to
the Trustee and Servicer. References herein to the two highest long term debt
rating categories of a Rating Agency shall mean "AA" or better in the case of
Fitch, and "Aa" or better in the case of ▇▇▇▇▇'▇ and references herein to the
highest short-term debt rating of a Rating Agency shall mean "A-1+" in the case
of ▇▇▇▇▇'▇, and "F1+" in the case of Fitch, and in the case of any other Rating
Agency such references shall mean such rating categories without regard to any
plus or minus.
Realized Loss: With respect to each Mortgage Loan or REO Property as
to which a Cash Liquidation or REO Disposition has occurred, an amount (not
less than zero) equal to (i) the Stated Principal Balance of the Mortgage Loan
as of the date of Cash Liquidation or REO Disposition, plus (ii) interest (and
REO Imputed Interest, if any) at the Net Mortgage Rate from the Due Date as to
which interest was last paid or advanced to Certificateholders up to the date
of the Cash Liquidation or REO Disposition on the Stated Principal Balance of
such Mortgage Loan outstanding during each Due Period that such interest was
not paid or advanced, minus (iii) the proceeds, if any, received during the
month in which such Cash Liquidation or REO Disposition occurred, to the extent
applied as recoveries of interest at the Net Mortgage Rate and to principal of
the Mortgage Loan, net of the portion thereof reimbursable to the Servicer with
respect to related Monthly Advances and Servicing Advances not previously
reimbursed. With respect to each Mortgage Loan which has become the subject of
a Deficient Valuation, the difference between the principal balance of the
Mortgage Loan outstanding immediately prior to such Deficient Valuation and the
principal balance of the Mortgage Loan as reduced by the Deficient Valuation.
Record Date: The last Business Day of the month immediately preceding
the month of the related Distribution Date.
Regular Certificate: Any of the Certificates other than a Residual
Certificate.
Relief Act: The Soldiers' and Sailors' Civil Relief Act of 1940, as
amended.
REMIC: A "real estate mortgage investment conduit" within the meaning
of Section 860D of the Code.
REMIC Provisions: Provisions of the federal income tax law relating to
real estate mortgage investment conduits, which appear at Sections 860A through
860G of Subchapter M of Chapter 1 of the Code, and related provisions, and
proposed, temporary and final regulations and published rulings, notices and
announcements promulgated thereunder, as the foregoing may be in effect from
time to time.
Remittance Date: The 24th day of the related month, or if such day is
not a Business Day, the Business Day immediately preceding such 24th day.
Remittance Report: A report prepared by the Servicer pursuant to
Section 4.03 providing the information set forth in Exhibit D attached hereto.
REO Acquisition: The acquisition by the Servicer on behalf of the
Trustee for the benefit of the Certificateholders of any REO Property pursuant
to Section 3.12.
REO Disposition: The receipt by the Servicer of Insurance Proceeds,
Liquidation Proceeds and other payments and recoveries (including proceeds of a
final sale) which the Servicer expects to be finally recoverable from the sale
or other disposition of the REO Property.
REO Imputed Interest: As to any REO Property, for any period, an
amount equivalent to interest (at the Mortgage Rate that would have been
applicable to the related Mortgage Loan had it been outstanding) on the unpaid
principal balance of the Mortgage Loan as of the date of acquisition thereof
(as such balance is reduced pursuant to Section 3.12 by any income from the REO
Property treated as a recovery of principal).
REO Proceeds: Proceeds, net of directly related expenses, received in
respect of any REO Property (including, without limitation, proceeds from the
rental of the related Mortgaged Property and of any REO Disposition), which
proceeds are required to be deposited into the Custodial Account as and when
received.
REO Property: A Mortgaged Property acquired by the Servicer on behalf
of the Trust Fund through foreclosure or deed-in-lieu of foreclosure in
connection with a Defaulted Mortgage Loan.
Request for Release: A release signed by a Servicing Officer, in the
form of Exhibit E attached hereto.
Residual Certificate: The Class R Certificates.
Responsible Officer: Any officer assigned to the Corporate Trust
Division (or any successor thereto), including any Vice President, Assistant
Vice President, Trust Officer, any Assistant Secretary, any trust officer or
any other officer of the Trustee customarily performing functions similar to
those performed by any one of the above designated officers and having direct
responsibility for the administration of this Agreement or any other officer of
the Trustee to whom matters under this Agreement may be referred.
Scheduled Monthly Payment: With respect to any Mortgage Loan, the
scheduled monthly payment of principal and interest on such Mortgage Loan which
is payable by a Mortgagor from time to time under the related Mortgage Note as
originally executed (after adjustment, if any, for Principal Prepayments and
for Deficient Valuations occurring prior to such Due Date, and after any
adjustment by reason of any bankruptcy or similar proceeding or any moratorium
or similar waiver or grace period).
Seller: Structured Asset Mortgage Investments Inc., or its successor
in interest.
Senior Accelerated Distribution Percentage: With respect to any
Distribution Date, the percentage indicated below:
Senior Accelerated Distribution Date Distribution Percentage
------------------------------------ -----------------------
December 1999 through November 2004 100%
December 2004 through November 2005 Senior Percentage, plus 70% of the Subordinate Percentage
December 2005 through November 2006 Senior Percentage, plus 60% of the Subordinate Percentage
December 2006 through November 2007 Senior Percentage, plus 40% of the Subordinate Percentage
December 2007 through November 2008 Senior Percentage, plus 20% of the Subordinate Percentage
December 2008 and thereafter Senior Percentage,
provided, however, (i) that any scheduled reduction to the Senior Accelerated
Distribution Percentage described above shall not occur as of any Distribution
Date unless either (a)(1)(x) the outstanding principal balance of Mortgage
Loans delinquent 60 days or more (including foreclosure and REO Property)
averaged over the last six months as a percentage of the aggregate outstanding
Certificate Principal Balance of the Class B Certificates, is less than 50%, or
(y) the outstanding principal balance of Mortgage Loans delinquent 60 days or
more (including foreclosure and REO Property) averaged over the last six
months, as a percentage of the aggregate outstanding principal balance of all
Mortgage Loans averaged over the last six months, does not exceed 2% and (2)
Realized Losses on the Mortgage Loans to date for such Distribution Date if
occurring during the sixth, seventh, eighth, ninth or tenth year (or any year
thereafter) after the Closing Date are less than 30%, 35%, 40%, 45% or 50%,
respectively, of the sum of the Initial Certificate Principal Balances of the
Class B Certificates or (b) (1) the aggregate outstanding principal balance of
the Mortgage Loans delinquent 60 days or more (including foreclosure and REO
Property) averaged over the last six months, as a percentage of the aggregate
outstanding principal balance of all Mortgage Loans averaged over the last six
months, does not exceed 4% and (2) Realized Losses on the Mortgage Loans on or
prior to such Distribution Date, if occurring during the sixth, seventh,
eighth, ninth or tenth year (or any year thereafter) after the Closing Date,
are less than 10%, 15%, 20%, 25% or 30%, respectively of the sum of the Initial
Certificate Principal Balances of the Class B Certificates and (ii) that for
any Distribution Date on which the Senior Percentage is greater than the
Original Senior Percentage, the Senior Accelerated Distribution Percentage for
such Distribution Date shall be 100%. Notwithstanding the foregoing, upon the
reduction of the aggregate Certificate Principal Balance of the Senior
Certificates other than the Class PO Certificates to zero, the Senior
Accelerated Distribution Percentage will equal 0%.
Senior Certificate: Any of the Class A, Class PO, Class X or Class R
Certificates.
Senior Interest Distribution Amount: As defined in Section 4.01(b)(i).
Senior Percentage: As of any Distribution Date, the lesser of 100% and
a fraction, expressed as a percentage, the numerator of which is the aggregate
Certificate Principal Balance of the Senior Certificates (other than the Class
PO Certificates) immediately prior to such Distribution Date and the
denominator of which is the aggregate Stated Principal Balance of all of the
Mortgage Loans or related REO Properties (other than the Discount Fraction of
the Discount Mortgage Loans) immediately prior to such Distribution Date.
Senior Principal Distribution Amount: As to any Distribution Date, the
lesser of (a) the balance of the Available Distribution Amount remaining after
the distribution of all amounts required to be distributed pursuant to Section
4.01(b)(i) and 4.01(b)(ii)(x) and (b) the sum of the amounts required to be
distributed to the Class A Certificates and Class R Certificates on such
Distribution Date pursuant to Section 4.01(b)(ii)(y), (xv) and (xvi).
Servicer: GMAC Mortgage Corporation, or any successor servicer
appointed as herein provided.
Servicing Advances: All customary, reasonable and necessary "out of
pocket" costs and expenses incurred in connection with a default, delinquency
or other unanticipated event in the performance by the Servicer of its
servicing obligations, including, but not limited to, the cost of (i) the
preservation, restoration and protection of a Mortgaged Property, (ii) any
enforcement or judicial proceedings, including foreclosures, (iii) the
management and liquidation of any REO Property and (iv) compliance with the
obligations under Section 3.09 and Section 3.10.
Servicing Fee: As to each Mortgage Loan, an amount, payable out of any
payment of interest on the Mortgage Loan, equal to the product of (a) the
Servicing Fee Rate and (b) the Stated Principal Balance of such Mortgage Loan
for the calendar month preceding the month in which the payment is due
(alternatively, in the event such payment of interest accompanies a Full
Principal Prepayment made by the Mortgagor, interest at the Servicing Fee Rate
for the number of days covered by such payment of interest).
Servicing Fee Rate: 0.25% per annum.
Servicing Officer: Any officer of the Servicer involved in, or
responsible for, the administration and servicing of the Mortgage Loans, whose
name and specimen signature appear on a list of servicing officers furnished to
the Trustee by the Servicer, as such list may from time to time be amended.
Special Hazard Amount: As of any Distribution Date, an amount equal to
$3,023,263.38 (the initial "Special Hazard Amount") minus the sum of (i) the
aggregate amount of Special Hazard Losses allocated solely to one or more
Classes of Certificates in accordance with Section 4.04 and (ii) the Adjustment
Amount (as defined below) as most recently calculated. For each Anniversary,
the Adjustment Amount shall be calculated and shall be equal to the amount, if
any, by which the amount calculated in accordance with the preceding sentence
(without giving effect to the deduction of the Adjustment Amount for such
Anniversary) exceeds the greater of (A) the greatest of (i) twice the
outstanding principal balance of the Mortgage Loan in the Trust Fund which has
the largest outstanding principal balance on the Distribution Date immediately
preceding such anniversary, (ii) the product of 1.00% multiplied by the
outstanding principal balance of all Mortgage Loans on the Distribution Date
immediately preceding such anniversary and (iii) the aggregate outstanding
principal balance (as of the immediately preceding Distribution Date) of the
Mortgage Loans in any single five-digit California zip code area with the
largest amount of Mortgage Loans by aggregate principal balance as of such
Anniversary and (B) the greater of (i) the product of 0.50% multiplied by the
outstanding principal balance of all Mortgage Loans on the Distribution Date
immediately preceding such Anniversary multiplied by a fraction, the numerator
of which is equal to the aggregate outstanding principal balance (as of the
immediately preceding Distribution Date) of all of the Mortgage Loans secured
by Mortgaged Properties located in the State of California divided by the
aggregate outstanding principal balance (as of the immediately preceding
Distribution Date) of all of the Mortgage Loans, expressed as a percentage, and
the denominator of which is equal to 48.12% (which percentage is equal to the
percentage of Mortgage Loans initially secured by Mortgaged Properties located
in the State of California) and (ii) the aggregate outstanding principal
balance (as of the immediately preceding Distribution Date) of the largest
Mortgage Loan secured by a Mortgaged Property located in the State of
California.
The Special Hazard Amount may be further reduced by the Servicer
(including accelerating the manner in which coverage is reduced) provided that
prior to any such reduction, the Servicer shall (i) obtain written confirmation
from each Rating Agency that such reduction shall not reduce the rating
assigned to any Class of Certificates by such Rating Agency below the lower of
the then-current rating or the rating assigned to such Certificates as of the
Closing Date by such Rating Agency and (ii) provide a copy of such written
confirmation to the Trustee.
Special Hazard Loss: Any Realized Loss not in excess of the cost of
the lesser of repair or replacement of a Mortgaged Property suffered by such
Mortgaged Property on account of direct physical loss as reported by the
Servicer or by any other party hereto, exclusive of (i) any loss of a type
covered by a Hazard Insurance Policy or a flood insurance policy required to be
maintained in respect of such Mortgaged Property pursuant to Section 3.10,
except to the extent of the portion of such loss not covered as a result of any
coinsurance provision and (ii) any Extraordinary Loss.
Special Hazard Percentage: As of each Anniversary, the greater of (i)
1.00% and (ii) the largest percentage obtained by dividing the aggregate
outstanding principal balance (as of the immediately preceding Distribution
Date) of the Mortgage Loans secured by Mortgaged Properties located in a
single, five-digit zip code area in the State of California by the outstanding
principal balance of all the Mortgage Loans as of such immediately preceding
Distribution Date.
Startup Day: The day designated as such pursuant to Article X hereof.
Stated Principal Balance: With respect to any Mortgage Loan or related
REO Property at any given time, (i) the principal balance of the Mortgage Loan
outstanding as of the Cut-off Date, after application of principal payments due
on or before such date, whether or not received, minus (ii) the sum of (a) the
principal portion of the Scheduled Monthly Payments due with respect to such
Mortgage Loan or REO Property during each Due Period ending prior to the most
recent Distribution Date which were received or with respect to which a Monthly
Advance was made, and (b) all Principal Prepayments with respect to such
Mortgage Loan or REO Property, and all Insurance Proceeds, Liquidation Proceeds
and net income from a REO Property to the extent applied by the Servicer as
recoveries of principal in accordance with Section 3.12 with respect to such
Mortgage Loan or REO Property, which were distributed pursuant to Section 4.01
on any previous Distribution Date, and (c) any Realized Loss with respect
thereto allocated pursuant to Section 4.04 for any previous Distribution Date.
Subordinate Certificate: Any of the Class B-1, Class B-2, Class B-3,
Class B-4, Class B-5 or Class B-6 Certificates.
Subordinate Percentage: As of any date of determination, a percentage
equal to 100% minus Senior Percentage as of such date.
Subordinate Principal Distribution Amount: With respect to any
Distribution Date and each Class of Class B Certificates, the sum of (i) the
product of (x) the related Class B Percentage for such Class and (y) the
aggregate of the amounts calculated for such Distribution Date under clauses
(1), (2) and (3) of Section 4.01(b)(ii)(Y)(A); (ii) such Class's pro rata
share, based on the Certificate Principal Balance of each Class of Class B
Certificates then outstanding, of the principal collections described in
Section 4.01(b)(ii)(Y)(B)(b) (without giving effect to the Senior Accelerated
Distribution Percentage), to the extent such collections are not otherwise
distributed to the Senior Certificates; (iii) the product of (x) the related
Prepayment Distribution Percentage and (y) the aggregate of all Full Principal
Prepayments and Partial Principal Prepayments received in the related
Prepayment Period (other than the related Discount Fraction of such Full
Principal Prepayments and Partial Principal Prepayments with respect to a
Discount Mortgage Loan) to the extent not payable to the Senior Certificates;
and (iv) any amounts described in clauses (i), (ii) and (iii) as determined for
any previous Distribution Date, that remain undistributed to the extent that
such amounts are not attributable to Realized Losses which have been allocated
to a subordinate Class of Class B Certificates; provided, however, that such
amount shall in no event exceed the outstanding Certificate Principal Balance
of such Class of Certificates immediately prior to such date.
Super Senior Optimal Percentage: For any Distribution Date on and
after the occurrence of the Credit Support Depletion Date, a fraction,
expressed as a percentage, the numerator of which is the aggregate Certificate
Principal Balance of the Super Senior Certificates immediately prior to such
Distribution Date and the denominator of which is the Certificate Principal
Balance of each class of Senior Certificates (other than the Class PO
Certificates) immediately prior to such Distribution Date.
Super Senior Optimal Principal Distribution Amount: As of any
Distribution Date on and after the occurrence of the Credit Support Depletion
Date, an amount equal to the product of (a) the Super Senior Optimal Percentage
for such Distribution Date and (b) the sum of the amounts described in Section
4.01(b)(ii)(Y)(A), (B), (C) and (D).
Targeted Principal Balance: With respect to each Class of Targeted
Principal Certificates, the amount set forth for such Class in Schedule L
hereto for the respective Distribution Date.
Tax Returns: The federal income tax return on Internal Revenue Service
Form 1066, U.S. Real Estate Mortgage Investment Conduit Income Tax Return,
including Schedule Q thereto, Quarterly Notice to Residual Interest Holders of
REMIC Taxable Income or Net Loss Allocation, or any successor forms, to be
filed on behalf of any REMIC due to their classification as REMICs under the
REMIC Provisions, together with any and all other information, reports or
returns that may be required to be furnished to the Certificateholders or filed
with the Internal Revenue Service or any other governmental taxing authority
under any applicable provisions of federal, state or local tax laws.
Transfer: Any direct or indirect transfer, sale, pledge, hypothecation
or other form of assignment of any Ownership Interest in a Certificate.
Transferor: Any Person who is disposing by Transfer of any Ownership
Interest in a Certificate.
Trustee: Norwest Bank Minnesota, National Association, or its
successor in interest, or any successor trustee appointed as herein provided.
Trustee Fee: As to each Mortgage Loan, an amount, payable monthly out
of any payment of interest on the Mortgage Loan, equal to the product of (a)
the Trustee Fee Rate and (b) the Stated Principal Balance of such Mortgage Loan
for the calendar month preceding the month in which the payment is due.
Trustee Fee Rate: A per annum rate equal to 0.01%.
Trust Fund: The segregated pool of assets, with respect to which a
REMIC election is to be made, consisting of: (i) each Mortgage Loan (exclusive
of payments of principal and interest due on or before the Cut-off Date, if
any, received by the Servicer which shall not constitute an asset of the Trust
Fund) as from time to time are subject to this Agreement and all payments under
and proceeds of such Mortgage Loans (exclusive of any prepayment fees and late
payment charges received on the Mortgage Loans), together with all documents
included in the related Mortgage File, subject to Section 2.01; (ii) such funds
or assets as from time to time are deposited in the Custodial Account or the
Certificate Account and belonging to the Trust Fund; (iii) any REO Property;
(iv) the Hazard Insurance Policies, if any, the Primary Insurance Policies, if
any, and all other Insurance Policies with respect to the Mortgage Loans; and
(v) the Seller's interest in respect of the representations and warranties made
by the Originator in the Mortgage Loan Purchase Agreement as assigned to the
Trustee pursuant to Section 2.04 hereof.
Uninsured Cause: Any cause of damage to property subject to a Mortgage
such that the complete restoration of such property is not fully reimbursable
by the Hazard Insurance Policies or flood insurance policies required to be
maintained pursuant to ▇▇▇▇▇▇▇ ▇.▇▇.
▇▇▇▇▇▇ ▇▇▇▇▇▇ Person: A citizen or resident of the United States, a
corporation or a partnership (including an entity treated as a corporation or
partnership for United States federal income tax purposes) created or organized
in, or under the laws of, the United States or any State thereof or the
District of Columbia (except, in the case of a partnership, to the extent
provided in regulations) or an estate whose income is subject to United States
federal income tax regardless of its source, or a trust if a court within the
United States is able to exercise primary supervision over the administration
of the trust and one or more such United States Persons have the authority to
control all substantial decisions of the trust. To the extent prescribed in
regulations by the Secretary of the Treasury, which have not yet been issued, a
trust which was in existence on August 20, 1996 (other than a trust treated as
owned by the grantor under subpart E of part I of subchapter J of chapter 1 of
the Code), and which was treated as a United States person on August 20, 1996
may elect to continue to be treated as a United States person notwithstanding
the previous sentence.
Voting Rights: The portion of the voting rights of all of the
Certificates which is allocated to any Certificate. At all times during the
term of this Agreement, 98% of all of the Voting Rights shall be allocated
among Holders of the Regular Certificates (other than the Interest Only
Certificates) on the basis of the Certificate Principal Balances thereof, 1% of
all Voting Rights shall be allocated to the Holders of the Interest Only
Certificates, and the Holders of the Residual Certificates shall be entitled to
1% of all of the Voting Rights, allocated among the Certificates of each such
Class in accordance with their respective Percentage Interests.
ARTICLE II
CONVEYANCE OF MORTGAGE LOANS; ORIGINAL ISSUANCE OF CERTIFICATES
Section 2.01. Conveyance of Mortgage Loans.
The Seller, as of the Closing Date, and concurrently with the
execution and delivery hereof, does hereby assign, transfer, sell, set over and
otherwise convey to the Trustee without recourse all the right, title and
interest of the Seller in and to the Mortgage Loans identified on the Mortgage
Loan Schedule (exclusive of any prepayment fees and late payment charges
received thereon) and all other assets included or to be included in the Trust
Fund for the benefit of the Certificateholders. Such assignment includes all
principal and interest received by the Seller on or with respect to the
Mortgage Loans (other than payment of principal and interest due on or before
the Cut-off Date).
In connection with such transfer and assignment, the Seller has caused
the Originator to deliver to, and deposit with the Trustee, as Custodian, the
following documents or instruments:
(i) the original Mortgage Note endorsed without recourse in
blank or in the name of Trustee or its designee, and signed by an
authorized officer, with all intervening endorsements showing a
complete chain of title from the originator to the Person endorsing it
to the Trustee. If the Mortgage Loan was acquired by the endorser in a
merger, the endorsement must be by "______________, successor by
merger to [name of predecessor]". If the Mortgage Loan was acquired or
originated by the endorser while doing business under another name,
the endorsement must be by "_______________ formerly known as
[previous name]".
(ii) the original of any guarantee executed in connection with
the Mortgage Note;
(iii) the Mortgage with evidence of recording thereon or
evidence that the Mortgage has been sent for recording;
(iv) any rider executed in connection with the related Mortgage
Note or Mortgage;
(v) an original Assignment or Assignments of Mortgage (which may
be included in a blanket assignment or assignments) in blank or in the
name of Trustee or its designee, and signed by an authorized officer,
which assignment shall be in form and substance acceptable for
recording. If the Mortgage Loan was acquired by the assignor in a
merger, the assignment must be by "____________, successor by merger
to [name of predecessor]". If the Mortgage Loan was acquired or
originated by the assignor while doing business under another name,
the assignment must be by "________________ formerly known as
[previous name]";
(vi) originals of all intervening assignments of mortgage, which
together with the Assignment of Mortgage, shows a complete chain of
title from the originator to the Person assigning it to the Trustee,
with evidence of recording thereon;
(vii) [Reserved];
(viii) the original mortgagee policy of title insurance,
including riders and endorsements thereto, or if the policy has not
yet been issued, (i) a written commitment or interim binder for title
issued by the title insurance or escrow company dated as of the date
the Mortgage Loan was funded, with a statement by the title insurance
company, or closing attorney that the priority of the lien of the
related Mortgage during the period between the date of the funding of
the related Mortgage Loan and the date of the related title policy
(which title policy shall be dated the date of recording of the
related Mortgage) is insured or (ii) a preliminary title report issued
by a title insurer in anticipation of issuing a title insurance policy
which evidences existing liens and gives a preliminary opinion as to
the absence of any encumbrance on title to the Mortgaged Property,
except liens to be removed on or before purchase by the Mortgagor or
which constitute customary exceptions acceptable to lenders generally;
(ix) [Reserved];
(x) a certified true copy of any power of attorney, if
applicable; and
(xi) originals of any security agreement, chattel mortgage or
equivalent executed in connection with the Mortgage.
In the event that in connection with any Mortgage Loan the Originator
cannot deliver (a) the original recorded Mortgage (or evidence of submission to
the recording office), (b) all interim recorded assignments or (c) the original
lender's title insurance policy (together with all riders thereto) satisfying
the requirements of clause (iii), (vi) or (viii) above, respectively,
concurrently with the execution and delivery hereof because such document or
documents have not been returned from the applicable public recording office in
the case of clause (iii) or (vi) above, or because the title policy has not
been delivered to either the Originator or the Seller by the title insurer in
the case of clause (viii) above, the Seller shall cause the Originator to use
its best efforts to deliver to the Trustee, in the case of clause (iii) or (vi)
above, such original Mortgage, such interim assignment, with evidence of
recording indicated thereon upon receipt thereof from the public recording
office, or a copy thereof, certified, if appropriate, by the relevant recording
office, but in no event shall any such delivery of the original Mortgage and
each such interim assignment or a copy thereof, certified, if appropriate, by
the relevant recording office, or the original lender's title policy be made
later than one (1) year following the closing date under the Mortgage Loan
Purchase Agreement; provided, however, in the event the Originator is unable to
deliver by such dates each Mortgage and each such interim assignment by reason
of the fact that any such documents have not been returned by the appropriate
recording office, or, in the case of each such interim assignment, because the
related Mortgage has not been returned by the appropriate recording office, the
Seller shall cause the Originator to deliver such documents to the Trustee as
promptly as possible upon receipt thereof and, in any event, within 540 days
following the closing date under the Mortgage Loan Purchase Agreement. In lieu
of the Mortgage Notes relating to the Mortgage Loans, each as identified in the
list delivered by the Seller to the Trustee or Custodian on the Closing Date,
the Seller may deliver a Lost Note Affidavit and, if available, a copy of each
original Mortgage Note; provided, however, that in the case of Mortgage Loans
which have been prepaid in full after the Cut-off Date and prior to the Closing
Date, the Seller, in lieu of delivering the above documents, may deliver to the
Trustee a certification to such effect and shall deposit all amounts paid in
respect of such Mortgage Loan in the Certificate Account on the Closing Date.
The Seller shall cause the Originator to forward or cause to be
forwarded to the Trustee (a) from time to time additional original documents
evidencing an assumption or modification of a Mortgage Loan and (b) any other
documents required to be delivered by the Seller or the Originator to the
Trustee. In the event that the original Mortgage is not delivered and in
connection with the payment in full of the related Mortgage Loan and the public
recording office requires the presentation of a "lost instruments affidavit and
indemnity" or any equivalent document, because only a copy of the Mortgage can
be delivered with the instrument of satisfaction or reconveyance, the Servicer
shall execute and deliver or cause to be executed and delivered such a document
to the public recording office. In the case where a public recording office
retains the original recorded Mortgage or in the case where a Mortgage is lost
after recordation in a public recording office, the Seller shall cause the
Originator to deliver to the Trustee a copy of such Mortgage certified by such
public recording office to be a true and complete copy of the original recorded
Mortgage.
As promptly as practicable subsequent to such transfer and assignment,
and in any event, within one hundred eighty (180) days thereafter, (i) the
Trustee shall affix the Trustee's name to each Assignment, as the assignee
thereof, (ii) the Servicer shall cause such Assignment to be in proper form for
recording in the appropriate public office for real property records and (iii)
the Servicer shall cause to be delivered for recording in the appropriate
public office for real property records such Assignments to the Trustee,
provided that with respect to any Assignment as to which the Servicer has not
received the information required to prepare such Assignment in recordable
form, the Servicer's obligation to do so and to deliver the same for such
recording shall be as soon as practicable after receipt of such information and
in any event within thirty (30) days after receipt thereof and provided,
further, that the Servicer need not cause to be recorded any Assignment which
relates to a Mortgage Loan in any jurisdiction for which the Trustee has
received an Opinion of Counsel satisfactory to the Rating Agencies to the
effect that under the laws of such jurisdiction the recordation of such
Assignment is not necessary to protect the Trustee's and the
Certificateholders' interest in the related Mortgage Loan.
If any assignment is lost or returned unrecorded to the Trustee or
Custodian because of any defect therein, the Originator is required, as
described in the Mortgage Loan Purchase Agreement, to prepare a substitute
assignment or cure such defect, as the case may be, and the Seller shall
instruct the Originator to cause such assignment to be recorded in accordance
with this Section.
All original documents relating to the Mortgage Loans which are not
delivered to the Trustee or Custodian are and shall be held by the Servicer in
trust for the benefit of the Trustee on behalf of the Certificateholders.
Except as may otherwise expressly be provided herein, none of the
Seller, the Servicer or the Trustee shall assign, sell, dispose of or transfer
any interest in the Trust Fund or any portion thereof, or permit the Trust Fund
or any portion thereof to be subject to any lien, claim, mortgage, security
interest, pledge or other encumbrance of, any other Person.
It is intended that the conveyance of the Mortgage Loans by the Seller
to the Trustee as provided in this Section be, and be construed as, a sale of
the Mortgage Loans as provided for in this Section by the Seller to the Trustee
for the benefit of the Certificateholders. It is, further, not intended that
such conveyance be deemed a pledge of the Mortgage Loans by the Seller to the
Trustee to secure a debt or other obligation of the Seller. However, in the
event that the Mortgage Loans are held to be property of the Seller, or if for
any reason this Agreement is held or deemed to create a security interest in
the Mortgage Loans, then it is intended that, (i) this Agreement shall also be
deemed to be a security agreement within the meaning of Articles 8 and 9 of the
New York Uniform Commercial Code and the Uniform Commercial Code of any other
applicable jurisdiction; (ii) the conveyance provided for in this Section shall
be deemed to be (1) a grant by the Seller to the Trustee of a security interest
in all of the Seller's right (including the power to convey title thereto),
title and interest, whether now owned or hereafter acquired, in and to (A) the
Mortgage Loans, including the Mortgage Notes, the Mortgages, any related
Insurance Policies and all other documents in the related Mortgage Files, (B)
all amounts payable to the holders of the Mortgage Loans in accordance with the
terms thereof, and (C) all proceeds of the conversion, voluntary or
involuntary, of the foregoing into cash, instruments, securities or other
property, including without limitation all amounts from time to time held or
invested in the Certificate Account or the Custodial Account, whether in the
form of cash, instruments, securities or other property and (2) an assignment
by the Seller to the Trustee of any security interest in any and all of the
Seller's right (including the power to convey title thereto), title and
interest, whether now owned or hereafter acquired, in and to the property
described in the foregoing clauses (1)(A) through (C); (iii) the possession by
the Trustee or its agent of Mortgage Notes and such other items of property as
constitute instruments, money, negotiable documents or chattel paper shall be
deemed to be "possession by the secured party" or possession by a purchaser or
a person designated by such secured party, for purposes of perfecting the
security interest pursuant to the New York Uniform Commercial Code and the
Uniform Commercial Code of any other applicable jurisdiction (including,
without limitation, Sections 9-115, 9-305, 8-102, 8-301, 8-501 and 8-503
thereof); and (iv) notifications to persons holding such property, and
acknowledgments, receipts or confirmations from persons holding such property,
shall be deemed notifications to, or acknowledgments, receipts or confirmations
from, financial intermediaries, bailees or agents (as applicable) of the
Trustee for the purpose of perfecting such security interest under applicable
law. The Seller and, at the Seller's direction, the Trustee shall, to the
extent consistent with this Agreement, take such actions as may be necessary to
ensure that, if this Agreement were deemed to create a security interest in the
Mortgage Loans, such security interest would be deemed to be a perfected
security interest of first priority under applicable law and will be maintained
as such throughout the term of this Agreement.
Section 2.02. Acceptance of the Trust Fund by the Trustee.
The Trustee acknowledges receipt (subject to any exceptions noted in
the Initial Certification described below), of the documents referred to in
Section 2.01 and all other assets included in the definition of "Trust Fund"
and declares that it holds and will hold such documents and the other documents
delivered to it constituting the Mortgage Files, and that it holds or will hold
such other assets included in the definition of "Trust Fund" (to the extent
delivered or assigned to the Trustee), in trust for the exclusive use and
benefit of all present and future Certificateholders.
The Trustee agrees, for the benefit of the Certificateholders, to
review each Mortgage File on or before the Closing Date to verify that such
Mortgage File includes a Mortgage Note and to execute and deliver, or cause to
be executed and delivered, to the Seller and the Servicer an initial
certification substantially in the form annexed hereto as Exhibit M. In
conducting such review, the Trustee will ascertain whether all required
documents have been executed and received, and whether those documents relate,
determined on the basis of the Mortgagor name, original principal balance and
loan number, to the Mortgage loans it has received. The Trustee shall not be
under any duty or obligation to inspect, review or examine said documents,
instruments, certificates or other papers to determine that the same are
genuine, enforceable or appropriate for the represented purpose or that they
have actually been recorded, or they are in recordable form or that they are
other than what they purport to be on their face.
Within 180 days of the Closing Date the Trustee will review, for the
benefit of the Certificateholders, the Mortgage Files delivered to it and will
execute and deliver to the Seller and the Servicer a final certification
substantially in the form annexed hereto as Exhibit N. In conducting such
review, the Trustee will ascertain whether an original of each document
required to be recorded has been returned from the recording office with
evidence of recording thereon or a certified copy has been obtained from the
recording office.
If, in the process of reviewing the Mortgage Files and preparing the
certifications referred to above, the Trustee finds any document or documents
constituting a part of a Mortgage File to be missing or defective in any
material respect, the Trustee shall promptly notify the Originator, the
Servicer and the Seller of such defect and request that the Originator cure any
such defect within 90 days from the date on which the Originator was notified
of such defect, and if the Originator does not cure such defect in all material
respects during such period, the Trustee shall request on behalf of the
Certificateholders that the Originator either (i) substitute for such Mortgage
Loan a Qualified Substitute Mortgage Loan, which substitution shall be
accomplished in the manner and subject to the conditions set forth in Section
2.04, or (ii) purchase such Mortgage Loan from the Trust Fund at the Purchase
Price within 90 days after the date on which the Originator was notified of
such defect; provided that if such defect would cause the Mortgage Loan to be
other than a "qualified mortgage" as defined in Section 860G(a)(3) of the Code,
any such cure, substitution or repurchase must occur within 90 days from the
date such breach was discovered. It is understood and agreed that the
obligation of the Originator to cure a material defect in, or substitute for,
or purchase any Mortgage Loan as to which a material defect in a constituent
document exists shall constitute the sole remedy respecting such defect
available to Certificateholders or the Trustee on behalf of Certificateholders.
The Purchase Price for the purchased Mortgage Loan shall be deposited or caused
to be deposited upon receipt by the Servicer in the Custodial Account and, upon
receipt by the Trustee of written notification of such deposit signed by a
Servicing Officer, the Trustee shall release or cause to be released to the
Originator the related Mortgage File and shall execute and deliver such
instruments of transfer or assignment, in each case without recourse, as the
Originator shall require as necessary to vest in the Originator ownership of
any Mortgage Loan released pursuant hereto and at such time the Trustee shall
have no further responsibility with respect to the related Mortgage File.
Section 2.03. Representations, Warranties and Covenants of the
Servicer.
The Servicer hereby represents and warrants to and covenants with the
Seller and the Trustee for the benefit of Certificateholders that:
(i) The Servicer is a validly existing corporation in good
standing under the laws of the state of its organization and is
qualified to transact business in, is in good standing under the laws
of, and possesses all licenses necessary for the conduct of its
business in, each state in which any Mortgaged Property is located or
is otherwise exempt or not required under applicable law to effect
such qualification or license and no demand for such qualification or
license has been made upon the Servicer by any such state, and in any
event the Servicer is in compliance with the laws of each such State
to the extent necessary to ensure the enforceability of each Mortgage
Loan and the servicing of the Mortgage Loans in accordance with the
terms of this Agreement;
(ii) The Servicer has full power and authority to execute,
deliver and perform, and to enter into and consummate all transactions
contemplated by this Agreement and to conduct its business as
presently conducted, has duly authorized the execution, delivery and
performance of this Agreement, has duly executed and delivered this
Agreement, and this Agreement constitutes a legal, valid and binding
obligation of the Servicer, enforceable against it in accordance with
its terms subject to bankruptcy laws and other similar laws of general
application affecting rights of creditors and subject to the
application of the rules of equity, including those respecting the
availability of specific performance;
(iii) None of the execution and delivery of this Agreement, the
consummation of the transactions contemplated thereby and hereby, or
the fulfillment of or compliance with the terms and conditions of this
Agreement will conflict with any of the terms, conditions or
provisions of the Servicer's articles of incorporation or by-laws or
materially conflict with or result in a material breach of any of the
terms, conditions or provisions of any legal restriction or any
agreement or instrument to which the Servicer is now a party or by
which it is bound, or constitute a default or result in an
acceleration under any of the foregoing, or result in the material
violation of any law, rule, regulation, order, judgment or decree to
which the Servicer or its property is subject;
(iv) There is no litigation pending or threatened with respect
to the Servicer which, in the Servicer's reasonable opinion, is
reasonably likely to have a material adverse effect on the execution,
delivery or enforceability of this Agreement;
(v) No consent, approval, authorization or order of any court or
governmental agency or body is required for the execution, delivery
and performance by the Servicer of or compliance by the Servicer with
this Agreement or the consummation of the transactions contemplated by
this Agreement except for consents, approvals, authorizations and
orders which have been obtained;
(vi) [Reserved];
(vii) The collection and servicing practices used by the
Servicer, with respect to each Mortgage Note and Mortgage have been in
all material respects legal in the mortgage servicing business. With
respect to escrow deposits and payments that the Servicer collects,
all such payments are in the possession of, or under the control of,
the Servicer, and there exist no deficiencies in connection therewith
for which customary arrangements for repayment thereof have not been
made. No escrow deposits or other charges or payments due under the
Mortgage Note have been capitalized under any Mortgage or the related
Mortgage Note;
(viii) The Servicer is an approved seller/servicer of
residential mortgage loans for ▇▇▇▇▇▇ ▇▇▇ and ▇▇▇▇▇▇▇ Mac. The
Servicer is in good standing to service mortgage loans for ▇▇▇▇▇▇ Mae
and ▇▇▇▇▇▇▇ Mac and no event has occurred which would make the
Servicer unable to comply with eligibility requirements or which would
require notification to either ▇▇▇▇▇▇ Mae or ▇▇▇▇▇▇▇ Mac;
(ix) No statement, report or Officer's Certificate furnished in
writing by the Servicer pursuant to the Agreement contains any
statement that is inaccurate or misleading in any material respect or
omits to state a material fact required to be stated therein or
necessary to make the information and statements therein not
misleading; and;
(x) No fraud or misrepresentation of a material fact with
respect to the servicing of a Mortgage Loan has taken place on the
part of the Servicer.
It is understood and agreed that the representations, warranties and
covenants set forth in this Section 2.03 shall survive the execution and
delivery of this Agreement, and shall inure to the benefit of the Seller, the
Trustee and the Certificateholders. Upon discovery by the Seller, the Trustee
or the Servicer of a breach of any of the foregoing representations, warranties
and covenants that materially and adversely affects the interests of the
Seller, the Trustee or the Certificateholders, the party discovering such
breach shall give prompt written notice to the other parties.
Section 2.04. Representations and Warranties of the Originator
and Seller.
The Seller hereby assigns to the Trustee for the benefit of
Certificateholders its interest in respect of the representations and
warranties made by the Originator in the Mortgage Loan Purchase Agreement and
the exhibits thereto, and the rights of the Seller to any remedies provided
thereunder for any breach of such representations and warranties. Insofar as
the Mortgage Loan Purchase Agreement and the exhibits thereto relate to such
representations and warranties and such remedies, such right, title and
interest may be enforced by the Trustee on behalf of the Certificateholders.
Upon the discovery by the Originator, the Servicer or the Trustee of a breach
of any of the representations and warranties made in the Mortgage Loan Purchase
Agreement in respect of any Mortgage Loan which materially and adversely
affects the interests of the Certificateholders in such Mortgage Loan, the
party discovering such breach shall give prompt written notice to the other
parties. The Trustee or the Servicer, as the case may be, shall promptly notify
the Originator of such breach and request that the Originator shall, within 60
days from the date that the Originator was notified or otherwise obtained
knowledge of such breach, cure such breach in all material respects; if such
breach cannot be cured within such 60 day period, the Originator shall, within
90 days from the date the Originator was notified or otherwise obtained
knowledge of such breach, purchase such Mortgage Loan from the Trust Fund at
the Purchase Price and in the manner set forth in Section 2.02; provided that
if such breach would cause the Mortgage Loan to be other than a "qualified
mortgage" as defined in Section 860G(a)(3) of the Code, any such cure or
repurchase must occur within 90 days from the date such breach was discovered;
and provided further, that in the event that a breach of any of the
representations and warranties made with respect to the Mortgage Loans in the
Mortgage Loan Purchase Agreement occurs which materially and adversely affects
the value of the Mortgage Loans after the date that EMC Mortgage Corporation
acquired the Mortgage Loans and on or prior to the date the Mortgage Loans are
assigned to the Trustee, the Seller shall cause EMC Mortgage Corporation to
cure any such breach, or to repurchase the affected Mortgage Loan at the
Purchase Price. However, in the case of a breach under the Mortgage Loan
Purchase Agreement, subject to the approval of the Seller, the Originator shall
have the option to substitute a Qualified Substitute Mortgage Loan or Loans for
such Mortgage Loan if such substitution occurs within two (2) years following
the Closing Date, except that if the breach would cause the Mortgage Loan to be
other than a "qualified mortgage" as defined in Section 860G(a)(3) of the Code,
any such substitution must occur within 90 days from the date the breach was
discovered if such 90 day period expires before two (2) years following the
Closing Date. In the event that the Originator elects to substitute a Qualified
Substitute Mortgage Loan or Loans for a Deleted Mortgage Loan pursuant to this
Section, the Originator shall deliver to the Trustee, for the benefit of the
parties hereto and the Certificateholders with respect to such Qualified
Substitute Mortgage Loan or Loans, the original Mortgage Note, the Mortgage, an
Assignment in recordable form, and such other documents and agreements as are
required by Section 2.01, with the Mortgage Note endorsed as required by
Section 2.01. No substitution will be made in any calendar month after the
Determination Date for such month. Scheduled Monthly Payments due with respect
to Qualified Substitute Mortgage Loans in the month of substitution shall not
be part of the Trust Fund and will be retained by the Servicer and remitted by
the Servicer to the Originator on the next succeeding Distribution Date. For
the month of substitution, distributions to Certificateholders will include the
Scheduled Monthly Payment due on a Deleted Mortgage Loan for such month and
thereafter the Originator shall be entitled to retain all amounts received in
respect of such Deleted Mortgage Loan. The Servicer shall amend or cause to be
amended the Mortgage Loan Schedule for the benefit of the Certificateholders to
reflect the removal of such Deleted Mortgage Loan and the substitution of the
Qualified Substitute Mortgage Loan or Loans and the Servicer shall deliver the
amended Mortgage Loan Schedule to the Trustee. Upon such substitution, the
Qualified Substitute Mortgage Loan or Loans shall be subject to the terms of
this Agreement in all respects, the Originator shall be deemed to have made the
representations and warranties with respect to the Qualified Substitute
Mortgage Loan contained in each Mortgage Loan Purchase Agreement as of the date
of substitution, and the Seller shall be deemed to have made with respect to
any Qualified Substitute Mortgage Loan or Loans, as of the date of
substitution, the representations and warranties set forth in this Section.
In connection with the substitution of one or more Qualified
Substitute Mortgage Loans for one or more Deleted Mortgage Loans, the Servicer
will determine the amount (if any) by which the aggregate principal balance of
all such Qualified Substitute Mortgage Loans as of the date of substitution is
less than the aggregate Stated Principal Balance of all such Deleted Mortgage
Loans (in each case after application of the principal portion of the Scheduled
Monthly Payments due in the month of substitution that are to be distributed to
Certificateholders in the month of substitution). The Seller shall cause the
Originator to provide the Servicer on the day of substitution for immediate
deposit into the Custodial Account the amount of such shortfall, without any
reimbursement therefor. The Seller shall cause the Originator to give notice in
writing to the Trustee of such event, which notice shall be accompanied by an
Officer's Certificate as to the calculation of such shortfall and by an Opinion
of Counsel to the effect that such substitution will not cause (a) any federal
tax to be imposed on any REMIC, including without limitation, any federal tax
imposed on "prohibited transactions" under Section 860F(a)(1) of the Code or on
"contributions after the startup date" under Section 860G(d)(1) of the Code or
(b) any portion of any REMIC to fail to qualify as a REMIC at any time that any
Certificate is outstanding. The costs of any substitution as described above,
including any related assignments, opinions or other documentation in
connection therewith shall be borne by the Originator.
Except as expressly set forth herein, the Trustee is under no
obligation to discover any breach of the above mentioned representations and
warranties. It is understood and agreed that the obligation of the Originator
to cure such breach, purchase or to substitute for such Mortgage Loan as to
which such a breach has occurred and is continuing shall constitute the sole
remedy respecting such breach available to Certificateholders or the Trustee on
behalf of Certificateholders.
Section 2.05. Issuance of Certificates Evidencing Interests in the
Trust Fund.
The Trustee acknowledges the assignment to it of the Mortgage Loans
and the delivery of the Mortgage Files to it, subject to any exceptions noted
pursuant to Section 2.02, together with the assignment to it of all other
assets included in the Trust Fund, receipt of which is hereby acknowledged.
Concurrently with such delivery and in exchange therefor, the Trustee, pursuant
to the written request of the Seller, executed by an officer of the Seller, has
executed and caused to be authenticated and delivered to, or upon the order of,
the Seller the Certificates in authorized denominations which evidence
ownership of the Trust Fund.
ARTICLE III
ADMINISTRATION AND SERVICING OF THE TRUST FUND
Section 3.01. Servicer to Service Mortgage Loans.
For and on behalf of the Certificateholders, the Servicer shall
service and administer the Mortgage Loans in accordance with the terms of this
Agreement and shall follow such practices and procedures as it shall deem
necessary or advisable and as shall be normal and usual in its general mortgage
servicing activities. In connection with such servicing and administration, the
Servicer shall have full power and authority, acting alone and/or through
subservicers as provided in Section 3.02 hereof, to do or cause to be done any
and all things that it may deem necessary or desirable in connection with such
servicing and administration, including but not limited to, the power and
authority, subject to the terms hereof (i) to execute and deliver, on behalf of
the Certificateholders and the Trustee, customary consents or waivers and other
instruments and documents, (ii) to consent to transfers of any Mortgaged
Property and assumptions of the Mortgage Notes and related Mortgages (but only
in the manner provided in this Agreement), (iii) to collect any Insurance
Proceeds and other Liquidation Proceeds, and (iv) to effectuate foreclosure or
other conversion of the ownership of the Mortgaged Property securing any
Mortgage Loan; provided that the Servicer shall not take any action that is
inconsistent with or prejudices the interests of the Trust Fund or the
Certificateholders in any Mortgage Loan or the rights and interests of the
Seller, the Trustee and the Certificateholders under this Agreement. The
Servicer shall represent and protect the interests of the Trust Fund in the
same manner as it protects its own interests in mortgage loans in its own
portfolio in any claim, proceeding or litigation regarding a Mortgage Loan, and
shall not make or permit any modification, waiver or amendment of any Mortgage
Loan which would cause the Trust Fund to fail to qualify as a REMIC or result
in the imposition of any tax under Section 860F(a) or Section 860G(d) of the
Code. Without limiting the generality of the foregoing, the Servicer, in its
own name or in the name of the Seller and the Trustee, is hereby authorized and
empowered by the Seller and the Trustee, when the Servicer believes it
appropriate in its reasonable judgment, to execute and deliver, on behalf of
the Trustee, the Seller, the Certificateholders or any of them, any and all
instruments of satisfaction or cancellation, or of partial or full release or
discharge and all other comparable instruments, with respect to the Mortgage
Loans, and with respect to the Mortgaged Properties held for the benefit of the
Certificateholders. The Servicer shall prepare and deliver to the Seller and/or
the Trustee such documents requiring execution and delivery by either or both
of them as are necessary or appropriate to enable the Servicer to service and
administer the Mortgage Loans to the extent that the Servicer is not permitted
to execute and deliver such documents pursuant to the preceding sentence. Upon
receipt of such documents, the Seller and/or the Trustee shall execute such
documents and deliver them to the Servicer.
In accordance with the standards of the preceding paragraph, the
Servicer shall advance or cause to be advanced funds as necessary for the
purpose of effecting the payment of taxes and assessments on the related
Mortgaged Properties, which advances shall be reimbursable in the first
instance from related collections from the related Mortgagors pursuant to
Section 3.09, and further as provided in Section 3.06. The costs incurred by
the Servicer, if any, in effecting the timely payments of taxes and assessments
on related Mortgaged Properties and related insurance premiums shall not, for
the purpose of calculating monthly distributions to the Certificateholders, be
added to the Stated Principal Balances of the related Mortgage Loans,
notwithstanding that the terms of such Mortgage Loans so permit.
Section 3.02. Subservicing; Enforcement of the Obligations
of Subservicers.
(a) The Servicer may arrange for the subservicing of any Mortgage Loan
by a subservicer pursuant to a subservicing agreement; provided, however, that
such subservicing arrangement and the terms of the related subservicing
agreement must provide for the servicing of such Mortgage Loans in a manner
consistent with the servicing arrangements contemplated hereunder. Unless the
context otherwise requires, references in this Agreement to actions taken or to
be taken by the Servicer in servicing the Mortgage Loans include actions taken
or to be taken by a subservicer on behalf of the Servicer. Notwithstanding the
provisions of any subservicing agreement, any of the provisions of this
Agreement relating to agreements or arrangements between the Servicer and a
subservicer or reference to actions taken through a subservicer or otherwise,
the Servicer shall remain obligated and liable to the Seller, the Trustee and
the Certificateholders for the servicing and administration of the Mortgage
Loans in accordance with the provisions of this Agreement without diminution of
such obligation or liability by virtue of such subservicing agreements or
arrangements or by virtue of indemnification from the subservicer and to the
same extent and under the same terms and conditions as if the Servicer alone
were servicing and administering the Mortgage Loans. All actions of each
subservicer performed pursuant to the related subservicing agreement shall be
performed as an agent of the Servicer with the same force and effect as if
performed directly by the Servicer.
(b) For purposes of this Agreement, the Servicer shall be deemed to
have received any collections, recoveries or payments with respect to the
Mortgage Loans that are received by a related subservicer regardless of whether
such payments are remitted by the subservicer to the Servicer.
Section 3.03. Collection of Certain Mortgage Loan Payments.
The Servicer shall follow such practices and procedures as it shall
deem necessary or advisable and as shall be normal and usual in its general
mortgage servicing activities to collect all payments called for under the
terms and provisions of the related Mortgage Loans to the extent such
procedures shall be consistent with this Agreement and the terms and provisions
of any related Insurance Policy. Consistent with the foregoing, the Servicer
may in its discretion (i) waive any late payment charge or any prepayment
charge or penalty interest in connection with the prepayment of a related
Mortgage Loan and (ii) extend the due dates for payments due on a Mortgage Note
for a period not greater than 180 days; provided, however, that the Servicer
cannot extend the maturity of any such Mortgage Loan past the date on which the
final payment is due on the latest maturing Mortgage Loan as of the Cut-off
Date. In the event of any such arrangement, the Servicer shall make Monthly
Advances on the related Mortgage Loan in accordance with the provisions of
Section 4.03 during the scheduled period in accordance with the amortization
schedule of such Mortgage Loan without modification thereof by reason of such
arrangements. The Servicer shall not be required to institute or join in
litigation with respect to collection of any payment (whether under a Mortgage,
Mortgage Note or otherwise or against any public or governmental authority with
respect to a taking or condemnation) if it reasonably believes that enforcing
the provision of the Mortgage or other instrument pursuant to which such
payment is required is prohibited by applicable law.
Section 3.04. Establishment of Custodial Accounts.
The Servicer shall segregate and hold all funds collected and received
pursuant to each Mortgage Loan separate and apart from any of its own funds and
general assets and shall establish and maintain one or more Custodial Accounts
held in trust, entitled "GMAC Mortgage Corporation Custodial Account in trust
for the benefit of the Holders of SAMI 1999-J2." Each Custodial Account shall
be an Eligible Account. The Custodial Account shall be maintained as a
segregated account, separate and apart from trust funds created for mortgage
pass-through certificates of other series, and the other accounts of the
Servicer.
Section 3.05. Deposits in the Custodial Account.
Within two Business Days of receipt, except as otherwise specifically
provided herein, the Servicer shall deposit or cause to be deposited the
following payments and collections remitted by subservicers or received by it
in respect of the Mortgage Loans subsequent to the Cut-off Date (other than in
respect of principal and interest due on such Mortgage Loans on or before the
Cut-off Date) and the following amounts required to be deposited hereunder:
(i) all payments on account of principal on the related Mortgage
Loans, including Principal Prepayments;
(ii) all payments on account of interest on the related Mortgage
Loans, net of the related Servicing Fee;
(iii) all Insurance Proceeds, Condemnation Proceeds, Liquidation
Proceeds and REO Disposition Proceeds, other than proceeds to be
applied to the restoration or repair of the related Mortgaged Property
or released to the Mortgagor in accordance with each Servicer's normal
servicing procedures;
(iv) any amount required to be deposited by such Servicer
pursuant to Section 3.07 in connection with any losses on Permitted
Investments;
(v) any amounts required to be deposited by such Servicer
pursuant to Section 3.10(b), 3.10(d), and in respect of net monthly
rental income from REO Property pursuant to Section 3.12 hereof;
(vi) [Reserved];
(vii) with respect to each Full Principal Prepayment or Partial
Principal Prepayment received after the Cut-off Date, any Prepayment
Interest Shortfalls, if applicable (but not in excess of the
Servicer's aggregate Servicing Fee received with respect to the
related Due Period);
(viii) all Monthly Advances made by such Servicer pursuant to
Section 4.03; and
(ix) any other amounts required to be deposited hereunder.
In addition, with respect to any Mortgage Loan that is subject to a
buydown agreement, on each Due Date for such Mortgage Loan, in addition to the
monthly payment remitted by the Mortgagor, the Servicer shall cause funds to be
deposited into the Custodial Account in an amount required to cause an amount
of interest to be paid with respect to such Mortgage Loan equal to the amount
of interest that has accrued on such Mortgage Loan from the preceding Due Date
at the Mortgage Rate net of the related Servicing Fee on such date.
The foregoing requirements for remittance by the Servicer shall be
exclusive, it being understood and agreed that, without limiting the generality
of the foregoing, payments in the nature of prepayment penalties, late payment
charges or assumption fees, if collected, need not be remitted by the Servicer.
In the event that the Servicer shall remit any amount not required to be
remitted, it may at any time withdraw or direct the institution maintaining the
Custodial Account to withdraw such amount from the Custodial Account, any
provision herein to the contrary notwithstanding. Such withdrawal or direction
may be accomplished by delivering written notice thereof to the Trustee or such
other institution maintaining such Custodial Account which describes the
amounts deposited in error in such Custodial Account. The Servicer shall
maintain adequate records with respect to all deposits made pursuant to this
Section. All funds deposited in the Custodial Account shall be held in trust
for the Certificateholders until withdrawn in accordance with Section 3.06.
Section 3.06. Permitted Withdrawals From the Custodial Account.
The Servicer may from time to time make withdrawals from the Custodial
Account for the following purposes:
(i) to pay to itself (to the extent not previously retained by
it) the servicing compensation to which it is entitled pursuant to
Section 3.15, and to pay to itself, as additional servicing
compensation, (A) earnings on or investment income with respect to
funds in or credited to the Custodial Account and (B) any Excess
Liquidation Proceeds;
(ii) to reimburse itself for unreimbursed Monthly Advances made
by it, such right of reimbursement pursuant to this subclause (ii)
being limited to amounts received on the related Mortgage Loan(s) in
respect of which any such Monthly Advance was made;
(iii) to reimburse itself for any Nonrecoverable Advance
previously made by it;
(iv) to reimburse itself for (a) unreimbursed Servicing
Advances, such right to reimbursement pursuant to this clause (a) with
respect to any Mortgage Loan being limited to amounts received on such
Mortgage Loan(s) which represent late recoveries of the payments for
which such advances were made pursuant to Section 3.01 or Section 3.09
and (b) for unpaid Servicing Fees as provided in Section 3.12 hereof;
(v) to pay to the purchaser, with respect to each related
Mortgage Loan or property acquired in respect thereof that has been
purchased pursuant to Section 2.02, 2.04 or 3.12, all amounts received
thereon after the date of such purchase;
(vi) to reimburse itself or the Seller for expenses incurred by
any of them and reimbursable pursuant to Section 6.03 hereof;
(vii) to withdraw any amount deposited in such Custodial Account
and not required to be deposited therein;
(viii) on or prior to the Remittance Date, to withdraw an amount
equal to the portion of the related Available Distribution Amount on
deposit therein and the Trustee Fee with respect to the Mortgage Loans
for such Distribution Date and remit such amount to the Trustee for
deposit in the Certificate Account; and
(ix) to clear and terminate such Custodial Account upon
termination of this Agreement pursuant to Section 9.01 hereof.
The Servicer shall keep and maintain separate accounting, on a
Mortgage Loan by Mortgage Loan basis, for the purpose of justifying any
withdrawal from the related Custodial Account pursuant to such subclauses (i),
(ii), (iv) and (v). Prior to making any withdrawal from a Custodial Account
pursuant to subclause (iii), the Servicer shall deliver to the Trustee an
Officer's Certificate of a Servicing Officer indicating the amount of any
previous Monthly Advance determined by the Servicer to be a Nonrecoverable
Advance and identifying the related Mortgage Loans(s), and their respective
portions of such Nonrecoverable Advance.
Section 3.07. Investment of Funds in the Custodial Account.
Each institution at which a Custodial Account is maintained shall
invest the funds therein as directed in writing by the Servicer in Permitted
Investments, which shall mature not later than the second Business Day next
preceding the related Remittance Date (except that if such Permitted Investment
is an obligation of the institution that maintains such account, then such
Permitted Investment shall mature not later than the Business Day next
preceding such Remittance Date) and shall not be sold or disposed of prior to
its maturity. All such Permitted Investments shall be made in the name of the
Trustee, for the benefit of the Certificateholders. All income and gain net of
any losses realized from any such investment of funds on deposit in a Custodial
Account shall be for the benefit of the Servicer as servicing compensation and
shall be remitted to such entity monthly as provided herein. The amount of any
realized losses in a Custodial Account incurred in respect of any such
investments shall promptly be deposited by the Servicer in the such Custodial
Account. The Trustee in its fiduciary capacity shall not be liable for the
amount of any loss incurred in respect of any investment or lack of investment
of funds held in a Custodial Account and made in accordance with this section.
Section 3.08. Transfer of Accounts.
The Servicer may transfer the Custodial Account(s) or Escrow
Account(s) to a different depository institution from time to time so long as
each new account is an Eligible Account. The Servicer shall notify the Trustee
of any such transfer within fifteen (15) Business Days of transfer.
Section 3.09. Collection of Taxes, Assessments and Similar Items;
Escrow Accounts.
(a) To the extent required by the related Mortgage Note and not
violative of current law, the Servicer shall establish and maintain one or more
accounts held in trust, entitled "GMAC Mortgage Corporation Escrow Account in
trust for the benefit of the Holders of SAMI 1999-J2" (each, an "Escrow
Account") and deposit and retain therein all collections from the related
Mortgagors (or advances by the Servicer) for the payment of taxes, assessments,
hazard insurance premiums or comparable items for the account of the related
Mortgagors. Each Escrow Account shall be an Eligible Account. The Servicer or
applicable subservicer shall be entitled to retain any interest paid on funds
in an Escrow Account by the depository institution other than interest on
escrowed funds required by law or the terms of the related Mortgage or Mortgage
Note to be paid to the Mortgagor. Nothing herein shall require the Servicer to
compel a Mortgagor to establish an Escrow Account in violation of applicable
law.
(b) Withdrawals of amounts so collected from the Escrow Accounts may
be made only to effect timely payment of taxes, assessments, hazard insurance
premiums, condominium or PUD association dues, or comparable items, to
reimburse the Servicer out of related collections for any payments made
pursuant to Sections 3.01 hereof (with respect to taxes and assessments and
insurance premiums) and 3.10 hereof (with respect to hazard insurance), to
refund to any Mortgagors any sums determined to be overages, to pay interest to
the Servicer, or to the Mortgagors to the extent required by law or the terms
of the related Mortgage or Mortgage Note, on balances in the Escrow Account or
to clear and terminate the Escrow Account(s) at the termination of this
Agreement in accordance with Section 9.01 hereof. The Escrow Accounts shall not
be a part of the Trust Fund.
(c) The Servicer shall advance any payments referred to in Section
3.09(a) that are not timely paid by the Mortgagors on the date when the tax,
premium or other cost for which such payment is intended is due, but the
Servicer shall be required so to advance only to the extent that such advances,
in the good faith judgment of the Servicer, will be recoverable by the Servicer
out of Insurance Proceeds, Liquidation Proceeds or otherwise.
Section 3.10. Maintenance of Hazard Insurance; Maintenance of
Primary Insurance Policies.
(a) The Servicer shall cause to be maintained for each Mortgage Loan
fire and hazard insurance with extended coverage as is customary in the area
where the Mortgaged Property is located in an amount which is equal to the
lesser of (i) the maximum insurable value of the improvements securing such
Mortgage Loan or (ii) the greater of (a) the outstanding principal balance of
the Mortgage Loan, and (b) the percentage such that the proceeds thereof shall
be sufficient to prevent the Mortgagor and/or the Mortgagee from becoming a
co-insurer. If the Mortgaged Property is in an area identified in the Federal
Register by the Federal Emergency Management Agency as being a special flood
hazard area that has federally-mandated flood insurance requirements, the
Servicer will cause to be maintained a flood insurance policy meeting the
requirements of the current guidelines of the Federal Insurance Administration
with a generally acceptable insurance carrier, in an amount representing
coverage not less than the least of (i) the outstanding principal balance of
the Mortgage Loan, (ii) the maximum insurable value of the improvements
securing such Mortgage Loan or (iii) the maximum amount of insurance which is
available under the Flood Disaster Protection Act of 1973, as amended. The
Servicer shall also maintain on the REO Property, fire and hazard insurance
with extended coverage in an amount which is at least equal to the maximum
insurable value of the improvements which are a part of such property,
liability insurance and, to the extent required and available under the Flood
Disaster Protection Act of 1973, as amended, flood insurance in an amount as
provided above. Any amounts collected by the Servicer under any such policies
other than amounts to be deposited in the Escrow Account and applied to the
restoration or repair of the Mortgaged Property or REO Property, or released to
the Mortgagor in accordance with the Servicer's normal servicing procedures,
shall be deposited in the Custodial Account, subject to withdrawal pursuant to
Section 3.05. It is understood and agreed that no other additional insurance
need be required by the Servicer or the Mortgagor or maintained on property
acquired in respect of the Mortgage Loans, other than pursuant to the ▇▇▇▇▇▇
▇▇▇ Guide or such applicable state or federal laws and regulations as shall at
any time be in force and as shall require such additional insurance. All such
policies shall be endorsed with standard mortgagee clauses with loss payable to
the Servicer and its successors and/or assigns and shall provide for at least
thirty days prior written notice of any cancellation, reduction in the amount
or material change in coverage to the Servicer. The Servicer shall not
interfere with the Mortgagor's freedom of choice in selecting either his
insurance carrier or agent, provided, however, that the Servicer shall not
accept any such insurance policies from insurance companies unless such
companies currently reflect a General Policy Rating in Best's Key Rating Guide
currently acceptable to ▇▇▇▇▇▇ Mae and are licensed to do business in the state
wherein the property subject to the policy is located.
(b) In the event that the Servicer shall obtain and maintain a blanket
policy insuring against hazard losses on all of the related Mortgage Loans, it
shall conclusively be deemed to have satisfied its obligations as set forth in
the first sentence of this Section, it being understood and agreed that such
policy may contain a deductible clause on terms substantially equivalent to
those commercially available and maintained by comparable servicers. If such
policy contains a deductible clause, the Servicer shall, in the event that
there shall not have been maintained on the related Mortgaged Property a policy
complying with the first sentence of this Section, and there shall have been a
loss that would have been covered by such policy, deposit in the Custodial
Account the amount not otherwise payable under the blanket policy because of
such deductible clause. In connection with its activities as Servicer of the
Mortgage Loans, the Servicer agrees to present, on behalf of itself, the
Seller, and the Trustee for the benefit of the Certificateholders, claims under
any such blanket policy.
(c) The Servicer will maintain in full force and effect Primary
Insurance Policies issued by a Qualified Insurer with respect to each Mortgage
Loan for which such coverage is herein required. Such coverage will be
maintained until the ratio of the current outstanding principal balance of the
related Mortgage Loan to the appraised value of the related Mortgaged Property,
based on the most recent appraisal of the Mortgaged Property performed by a
qualified appraiser, such appraisal to be included in the related servicing
file, is reduced to 80.00% or less. The Servicer will not cancel or refuse to
renew any Primary Insurance Policy that is required to be kept in force under
this Agreement unless a replacement Primary Insurance Policy for such canceled
or nonrenewed policy is obtained from and maintained with a Qualified Insurer.
The Servicer shall not take any action which would result in noncoverage under
any applicable Primary Insurance Policy of any loss which, but for the actions
of the Servicer would have been covered thereunder. In connection with any
assumption or substitution agreement entered into or to be entered into
pursuant to Section 3.11, the Servicer shall promptly notify the insurer under
the related Primary Insurance Policy, if any, of such assumption or
substitution of liability in accordance with the terms of such policy and shall
take all actions which may be required by such insurer as a condition to the
continuation of coverage under the Primary Insurance Policy. If such Primary
Insurance Policy is terminated as a result of such assumption or substitution
of liability, the Servicer shall obtain a replacement Primary Insurance Policy
as provided above.
The Servicer agrees to effect the timely payment of the premiums on
each Primary Insurance Policy, and such costs not otherwise recoverable shall
be recoverable by the Servicer from the related Liquidation Proceeds.
(d) In connection with its activities as the Servicer of the Mortgage
Loans, the Servicer agrees to present on behalf of itself, the Trustee and
Certificateholders, claims to the insurer under any Primary Insurance Policies
and, in this regard, to take such reasonable action as shall be necessary to
permit recovery under any Primary Insurance Policies respecting related
defaulted Mortgage Loans. Any amounts collected by the Servicer under any
Primary Insurance Policies shall be deposited in the Custodial Account.
Section 3.11. Enforcement of Due-on-Sale Clauses; Assumption
Agreements.
(a) Except as otherwise provided in this Section, when any property
subject to a Mortgage has been conveyed by the Mortgagor, the Servicer shall to
the extent that it has knowledge of such conveyance, enforce any due-on-sale
clause contained in the related Mortgage Note or Mortgage, to the extent
permitted under applicable law and governmental regulations, but only to the
extent that such enforcement will not adversely affect or jeopardize coverage
under any required Primary Insurance Policy. Notwithstanding the foregoing, the
Servicer is not required to exercise such rights with respect to a Mortgage
Loan if the Person to whom the related Mortgaged Property has been conveyed or
is proposed to be conveyed satisfies the terms and conditions contained in the
Mortgage Note and Mortgage related thereto and the consent of the mortgagee
under such Mortgage Note or Mortgage is not otherwise so required under such
Mortgage Note or Mortgage as a condition to such transfer. In the event that
the Servicer is prohibited by law from enforcing any such due-on-sale clause,
or if coverage under any required Insurance Policy would be adversely affected,
or if nonenforcement is otherwise permitted hereunder, the Servicer is
authorized, subject to Section 3.11(b), to take or enter into an assumption and
modification agreement from or with the person to whom such property has been
or is about to be conveyed, pursuant to which such person becomes liable under
the Mortgage Note and, unless prohibited by applicable state law, the Mortgagor
remains liable thereon, provided that the Mortgage Loan shall continue to be
covered (if so covered before the Servicer enters such agreement) by the
applicable required Insurance Policies. The Servicer, subject to Section
3.11(b), is also authorized with the prior approval of the insurers under any
required Insurance Policies to enter into a substitution of liability agreement
with such Person, pursuant to which the original Mortgagor is released from
liability and such Person is substituted as Mortgagor and becomes liable under
the Mortgage Note. Notwithstanding the foregoing, the Servicer shall not be
deemed to be in default under this Section by reason of any transfer or
assumption which the Servicer reasonably believes it is restricted by law from
preventing, for any reason whatsoever.
(b) Subject to the Servicer's duty to enforce any due-on-sale clause
to the extent set forth in Section 3.11(a) hereof, in any case in which a
Mortgaged Property has been conveyed to a Person by a Mortgagor, and such
Person is to enter into an assumption agreement or modification agreement or
supplement to the Mortgage Note or Mortgage that requires the signature of the
Trustee, or if an instrument of release signed by the Trustee is required
releasing the Mortgagor from liability on the Mortgage Loan, the Servicer shall
prepare and deliver or cause to be prepared and delivered to the Trustee for
signature and shall direct, in writing, the Trustee to execute the assumption
agreement with the Person to whom the Mortgaged Property is to be conveyed and
such modification agreement or supplement to the Mortgage Note or Mortgage or
other instruments as are reasonable or necessary to carry out the terms of the
Mortgage Note or Mortgage or otherwise to comply with any applicable laws
regarding assumptions or the transfer of the Mortgaged Property to such Person.
In connection with any such assumption, no material term of the Mortgage Note
may be changed. In addition, the substitute Mortgagor and the Mortgaged
Property must be acceptable to the Servicer in accordance with its underwriting
standards as then in effect. Together with each such substitution, assumption
or other agreement or instrument delivered to the Trustee for execution by it,
the Servicer shall deliver an Officer's Certificate signed by a Servicing
Officer stating that the requirements of this subsection have been met in
connection therewith. The Servicer shall notify the Trustee that any such
substitution or assumption agreement has been completed by forwarding to the
Trustee the original of such substitution or assumption agreement, which in the
case of the original shall be added to the related Mortgage File and shall, for
all purposes, be considered a part of such Mortgage File to the same extent as
all other documents and instruments constituting a part thereof. Any fee
collected by the Servicer for entering into an assumption or substitution of
liability agreement will be retained by the Servicer as additional servicing
compensation.
Section 3.12. Realization Upon Defaulted Mortgage Loans.
With respect to any REO Property, the deed or certificate of sale
shall be taken in the name of the Trustee for the benefit of the
Certificateholders, or its nominee, on behalf of the Certificateholders. The
Trustee's name shall be placed on the title to such REO Property solely as the
Trustee hereunder and not in its individual capacity. The Servicer shall ensure
that the title to such REO Property references this Agreement and the Trustee's
capacity thereunder.
The Servicer shall use reasonable efforts to foreclose upon or
otherwise comparably convert the ownership of properties securing such of the
related Mortgage Loans as come into and continue in default and as to which no
satisfactory arrangements can be made for collection of delinquent payments. In
connection with such foreclosure or other conversion, the Servicer shall follow
such practices and procedures as it shall deem necessary or advisable and as
shall be normal and usual in its general mortgage servicing activities and meet
the requirements of the insurer under any required Insurance Policy; provided,
however, that the Servicer shall not be required to expend its own funds in
connection with any foreclosure or towards the restoration of any property
unless it shall determine (i) that such restoration and/or foreclosure will
increase the proceeds of liquidation of the Mortgage Loan after reimbursement
to itself of such expenses and (ii) that such expenses will be recoverable to
it through Liquidation Proceeds (respecting which it shall have priority for
purposes of withdrawals from the Custodial Account). The Servicer shall be
responsible for all other costs and expenses incurred by it in any such
proceedings; provided, however, that it shall be entitled to reimbursement
thereof from the liquidation proceeds with respect to the related Mortgaged
Property, as provided in the definition of Liquidation Proceeds. If the
Servicer has knowledge that a Mortgaged Property which the Servicer is
contemplating acquiring in foreclosure or by deed in lieu of foreclosure is
located within a one (1) mile radius of any site listed in the Expenditure Plan
for the Hazardous Substance Clean Up Bond Act of 1984 or other site with
environmental or hazardous waste risks known to the Servicer, the Servicer
will, prior to acquiring the Mortgaged Property, consider such risks and only
take action in accordance with its established environmental review procedures.
The Servicer shall, either itself or through an agent selected by the
Servicer, and in accordance with the ▇▇▇▇▇▇ ▇▇▇ guidelines, manage, conserve,
protect and operate each REO Property in the same manner that it manages,
conserves, protects and operates other foreclosed property for its own account,
and in the same manner that similar property in the same locality as the REO
Property is managed. Each disposition of REO Property shall be carried out by
the Servicer at such price and upon such terms and conditions as the Servicer
deems to be in the best interest of the Certificateholders. Each Disposition of
REO Property shall be carried out by the Servicer at such price and upon such
terms and conditions as the Servicer deems to be in the best interest of the
Owner. The proceeds from the sale of the REO Property shall be promptly
deposited in the Custodial Account. As soon as practical thereafter, the
expenses of such sale shall be paid and the Servicer shall reimburse itself for
any related Servicing Advances, or Monthly Advances made pursuant to Section
4.03. The Servicer shall cause each REO Property to be inspected promptly upon
the acquisition of title thereto and shall cause each REO Property to be
inspected at least monthly thereafter or more frequently as may be required by
the circumstances. The Servicer shall make or cause the inspector to make a
written report of each such inspection.
The Servicer shall prepare for and deliver to the Trustee a statement
with respect to each related REO Property that has been rented showing the
aggregate rental income received and all expenses incurred in connection with
the management and maintenance of such REO Property at such times as is
necessary to enable the Trustee to comply with the reporting requirements of
the REMIC Provisions. The net monthly rental income, if any, from such REO
Property shall be deposited in the Custodial Account no later than the close of
business on each Determination Date. The Servicer shall perform the tax
reporting and withholding required by Sections 1445 and 6050J of the Code with
respect to foreclosures and abandonments, the tax reporting required by Section
6050H of the Code with respect to the receipt of mortgage interest from
individuals and any tax reporting required by Section 6050P of the Code with
respect to the cancellation of indebtedness by certain financial entities, by
preparing such tax and information returns as may be required.
In the event that the Trust Fund acquires any Mortgaged Property as
aforesaid or otherwise in connection with a default or imminent default on a
Mortgage Loan, the Servicer shall dispose of such Mortgaged Property prior to
the end of the calendar year, three (3) years after its acquisition by the
Trust Fund unless the Trustee shall have been supplied with an Opinion of
Counsel to the effect that the holding by the Trust Fund of such Mortgaged
Property subsequent to such three-year period will not result in the imposition
of taxes on "prohibited transactions" of the REMIC hereunder as defined in
section 860F of the Code or cause the REMIC hereunder to fail to qualify as a
REMIC at any time that any Certificates are outstanding, in which case the
Trust Fund may continue to hold such Mortgaged Property (subject to any
conditions contained in such Opinion of Counsel). Notwithstanding any other
provision of this Agreement, no Mortgaged Property acquired by the Trust Fund
shall be rented (or allowed to continue to be rented) or otherwise used for the
production of income by or on behalf of the Trust Fund in such a manner or
pursuant to any terms that would (i) cause such Mortgaged Property to fail to
qualify as "foreclosure property" within the meaning of section 860G(a)(8) of
the Code or (ii) subject the REMIC hereunder to the imposition of any federal,
state or local income taxes on the income earned from such Mortgaged Property
under Section 860G(c) of the Code or otherwise, unless the Servicer has agreed
to indemnify and hold harmless the Trust Fund with respect to the imposition of
any such taxes.
In the event of default on a Mortgage Loan one or more obligors of
which are not United States Persons, as that term is defined in Section
7701(a)(30) of the Code, in connection with any foreclosure or acquisition of a
deed in lieu of foreclosure (together, "foreclosure") in respect of such
Mortgage Loan, the Servicer will cause compliance with the provisions of
Treasury Regulation Section 1.1445-2(d)(3) (or any successor thereto) necessary
to assure that no withholding tax obligation arises with respect to the
proceeds of such foreclosure except to the extent, if any, that proceeds of
such foreclosure are required to be remitted to the obligors on such Mortgage
Loan.
The decision of the Servicer to foreclose on a defaulted Mortgage Loan
shall be subject to a determination by the Servicer that the proceeds of such
foreclosure would exceed the costs and expenses of bringing such a proceeding.
The income earned from the management of any REO Properties, net of
reimbursement to the Servicer for expenses incurred (including any property or
other taxes) in connection with such management and net of applicable
unreimbursed Servicing Fees, Monthly Advances and Servicing Advances, shall be
applied to the payment of principal of and interest on the related defaulted
Mortgage Loans (with interest accruing as though such Mortgage Loans were still
current) and all such income shall be deemed, for all purposes in this
Agreement, to be payments on account of principal and interest on the related
Mortgage Notes and shall be deposited into the Custodial Account. To the extent
the net income received during any calendar month is in excess of the amount
attributable to amortizing principal and accrued interest at the related
Mortgage Rate on the related Mortgage Loan for such calendar month, such excess
shall be considered to be a Partial Principal Prepayment of the related
Mortgage Loan.
The proceeds from any liquidation of a Mortgage Loan, as well as any
income from an REO Property, will be applied in the following order of
priority: first, to reimburse the Servicer for any related unreimbursed
Servicing Advances and Servicing Fees; second, to reimburse the Servicer for
any unreimbursed Monthly Advances; third, to reimburse the Custodial Account
for any Nonrecoverable Advances (or portions thereof) that were previously
withdrawn by the Servicer pursuant to Section 3.06(iii) that related to such
Mortgage Loan; fourth, to accrued and unpaid interest (to the extent no Monthly
Advance has been made for such amount or any such Monthly Advance has been
reimbursed) on the Mortgage Loan or related REO Property, at the Net Mortgage
Rate to the Due Date occurring in the month in which such amounts are required
to be distributed; and fifth, as a recovery of principal of the Mortgage Loan.
Section 3.13. Trustee to Cooperate; Release of Mortgage Files.
Upon the payment in full of any Mortgage Loan, or the receipt by the
Servicer of a notification that payment in full shall be escrowed in a manner
customary for such purposes, the Servicer will immediately notify the Trustee
by a certification (which certification shall include a statement to the effect
that all amounts received or to be received in connection with such payment
which are required to be deposited in the Custodial Account pursuant to Section
3.09 have been or will be so deposited) of a Servicing Officer and shall
request delivery to it of the Mortgage File by means of two copies of a written
request in the form of the Request for Release attached hereto as Exhibit E,
which shall be signed by an Authorized Officer, or in a mutually agreeable
electronic format which will, in lieu of a signature on its face, originate
from an Authorized Officer.
From time to time and as appropriate for the servicing or foreclosure
of any Mortgage Loan, including, for this purpose, collection under any
Insurance Policy relating to the Mortgage Loan, the Trustee shall, upon request
of the Servicer and delivery to the Trustee of two copies of a Request for
Release in the form attached hereto as Exhibit E, which shall be signed by an
Authorized Officer, or in a mutually agreeable electronic format which will, in
lieu of a signature on its face, originate from an Authorized Officer, release
the related Mortgage File to the Servicer, and the Trustee shall execute such
documents as the Servicer shall prepare and request as being necessary to the
prosecution of any such proceedings.
Upon the payment in full of any Mortgage Loan, or the receipt by the
Servicer of a notification that payment in full will be escrowed in a manner
customary for such purposes, the Servicer will immediately notify the Trustee
by delivering, or causing to be delivered two copies of a "Request for Release"
substantially in the form of Exhibit E. Upon receipt of such request, the
Trustee shall promptly release the related Mortgage File to the Servicer, and
the Trustee shall at the Servicer's direction execute and deliver to the
Servicer the request for reconveyance, deed of reconveyance or release or
satisfaction of mortgage or such instrument releasing the lien of the Mortgage
in each case provided by the Servicer, together with the Mortgage Note with
written evidence of cancellation thereon. Expenses incurred in connection with
any instrument of satisfaction or deed of reconveyance shall be chargeable to
the related Mortgagor. From time to time and as shall be appropriate for the
servicing or foreclosure of any Mortgage Loan, including for such purpose,
collection under any policy of flood insurance, any fidelity bond or errors or
omissions policy, or for the purposes of effecting a partial release of any
Mortgaged Property from the lien of the Mortgage or the making of any
corrections to the Mortgage Note or the Mortgage or any of the other documents
included in the Mortgage File, the Trustee shall, upon delivery to the Trustee
of a Request for Release in the form of Exhibit N signed by a Servicing
Officer, release the Mortgage File to the Servicer. Subject to the further
limitations set forth below, the Servicer shall cause the Mortgage File or
documents so released to be returned to the Trustee when the need therefor by
the Servicer no longer exists, unless the Mortgage Loan is liquidated and the
proceeds thereof are deposited in the Custodial Account, in which case the
Servicer shall deliver to the Trustee a Request for Release in the form of
Exhibit N, signed by a Servicing Officer.
If the Servicer at any time seeks to initiate a foreclosure proceeding
in respect of any Mortgaged Property as authorized by this Agreement, the
Servicer shall deliver or cause to be delivered to the Trustee, for signature,
as appropriate, any court pleadings, requests for trustee's sale or other
documents necessary to effectuate such foreclosure or any legal action brought
to obtain judgment against the Mortgagor on the Mortgage Note or the Mortgage
or to obtain a deficiency judgment or to enforce any other remedies or rights
provided by the Mortgage Note or the Mortgage or otherwise available at law or
in equity.
Section 3.14. Documents, Records and Funds in Possession of the
Servicer to be Held for the Trustee.
Notwithstanding any other provisions of this Agreement, the Servicer
shall transmit to the Trustee as required by this Agreement all documents and
instruments in respect of a Mortgage Loan coming into the possession of the
Servicer from time to time and shall account fully to the Trustee for any funds
received by the Servicer or which otherwise are collected by the Servicer as
Liquidation Proceeds or Insurance Proceeds in respect of any related Mortgage
Loan. All Mortgage Files and funds collected or held by, or under the control
of, the Servicer in respect of any Mortgage Loans, whether from the collection
of principal and interest payments or from Liquidation Proceeds, including but
not limited to, any funds on deposit in the Custodial Account(s), shall be held
by the Servicer for and on behalf of the Trustee and shall be and remain the
sole and exclusive property of the Trustee, subject to the applicable
provisions of this Agreement. The Servicer also agrees that it shall not
create, incur or subject any Mortgage File or any funds that are deposited in
the Custodial Account, Certificate Account or any related Escrow Account, or
any funds that otherwise are or may become due or payable to the Trustee for
the benefit of the Certificateholders, to any claim, lien, security interest,
judgment, levy, writ of attachment or other encumbrance, or assert by legal
action or otherwise any claim or right of setoff against any Mortgage File or
any funds collected on, or in connection with, a Mortgage Loan, except,
however, that the Servicer shall be entitled to set off against and deduct from
any such funds any amounts that are properly due and payable to the Servicer
under this Agreement.
Section 3.15. Servicing Compensation.
As compensation for its activities hereunder, the Servicer shall be
entitled to retain or withdraw from the Custodial Account an amount equal to
the Servicing Fee for each Mortgage Loan, provided that the aggregate Servicing
Fee with respect to any Distribution Date shall be reduced by an amount equal
to the aggregate of the Prepayment Interest Shortfalls, if any, on the Mortgage
Loans with respect to such Distribution Date (but not below an amount equal to
the aggregate Servicing Fee for such Distribution Date before reduction thereof
in respect of such Prepayment Interest Shortfalls).
Additional servicing compensation in the form of prepayment penalties,
assumption fees, late payment charges, all income and gain net of any losses
realized from Permitted Investments on amounts on deposit in the Custodial
Account and all excess Liquidation Proceeds shall be retained by the Servicer
to the extent not required to be deposited in the Custodial Account pursuant to
Section 3.05 hereof. The Servicer shall be required to pay all expenses
incurred by it in connection with its servicing activities hereunder (including
payment of any premiums for hazard insurance and any Primary Insurance Policy
and maintenance of the other forms of insurance coverage required by this
Agreement) and shall not be entitled to reimbursement therefor except as
specifically provided in this Agreement.
Section 3.16. Access to Certain Documentation.
(a) The Servicer shall afford the Seller and the Trustee reasonable
access to all records and documentation regarding the Mortgage Loans and all
accounts, insurance information and other matters relating to this Agreement,
such access being afforded without charge, but only upon reasonable request and
during normal business hours at the office designated by the Servicer.
(b) Upon reasonable advance notice in writing, the Servicer will
provide to each Certificateholder which is a savings and loan association, bank
or insurance company certain reports and reasonable access to information and
documentation regarding the Mortgage Loans sufficient to permit such
Certificateholder to comply with applicable regulations of the OTS or other
regulatory authorities with respect to investment in the Certificates; provided
that the Servicer shall be entitled to be reimbursed by each such
Certificateholder for actual expenses incurred by the Servicer in providing
such reports and access.
(c) The Servicer shall provide to the OTS and the FDIC and to
comparable regulatory authorities supervising Holders of Subordinate
Certificates and the examiners and supervisory agents of the OTS, the FDIC and
such other authorities, access to the documentation regarding the related
Mortgage Loans required by applicable regulations of the OTS and the FDIC. Such
access shall be afforded only upon reasonable and prior written request, during
normal business hours at the offices designated by the Servicer, and upon the
payment of a mutually agreed upon fee for time and effort. Nothing in this
Section shall limit the obligation of the Servicer to observe any applicable
law prohibiting disclosure of information regarding the related Mortgagors and
the failure of the Servicer to provide access as provided in this Section as a
result of such obligation shall not constitute a breach of this Section.
Section 3.17. Annual Statement as to Compliance.
The Servicer shall deliver to the Seller and the Trustee on or before
90 days after the end of the Servicer's fiscal year, commencing in its 2000
fiscal year, an Officer's Certificate stating, as to the signer thereof, that
(i) a review of the activities of the Servicer during the preceding calendar
year and of the performance of the Servicer under this Agreement has been made
under such officer's supervision and (ii) to the best of such officer's
knowledge, based on such review, the Servicer has fulfilled all its obligations
under this Agreement throughout such year, or, if there has been a default in
the fulfillment of any such obligation, specifying each such default known to
such officer and the nature and status thereof except for such defaults as such
officer in his or her good faith judgment believes to be immaterial. The
Trustee shall forward a copy of each such statement to each Rating Agency.
Section 3.18. Annual Independent Public Accountants' Servicing
Statement; Financial Statements.
On or before 90 days after the end of the Servicer's fiscal year,
commencing in its 2000 fiscal year, the Servicer at its expense shall cause a
firm of independent public accountants (who may also render other services to
the Servicer, the Seller or any affiliate thereof) which is a member of the
American Institute of Certified Public Accountants to furnish a statement to
the Trustee and the Seller to the effect that such firm has examined certain
documents and records relating to the Servicer's servicing of mortgage loans of
the same type as the Mortgage Loans pursuant to servicing agreements
substantially similar to this Agreement, which agreements may include this
Agreement, and that, on the basis of such an examination, conducted
substantially in compliance with the Uniform Single Attestation Program for
Mortgage Bankers, such firm is of the opinion that the Servicer's servicing has
been conducted in compliance with the agreements examined pursuant to this
Section, except for (i) such exceptions as such firm shall believe to be
immaterial, and (ii) such other exceptions as shall be set forth in such
statement. Copies of such statement shall be provided by the Trustee to any
Certificateholder upon request at the Servicer's expense, provided such
statement is delivered by the Servicer to the Trustee.
Section 3.19. Errors and Omissions Insurance; Fidelity Bonds.
The Servicer shall for so long as it acts as a servicer under this
Agreement, obtain and maintain in force (a) a policy or policies of insurance
covering errors and omissions in the performance of its obligations as the
Servicer hereunder and (b) a fidelity bond in respect of its officers,
employees and agents. Each such policy or policies and bond shall, together,
comply with the requirements from time to time of ▇▇▇▇▇▇ ▇▇▇ or ▇▇▇▇▇▇▇ Mac for
persons performing servicing for mortgage loans purchased by ▇▇▇▇▇▇ Mae or
▇▇▇▇▇▇▇ Mac. In the event that any such policy or bond ceases to be in effect,
the Servicer shall obtain a comparable replacement policy or bond from an
insurer or issuer, meeting the requirements set forth above as of the date of
such replacement.
Section 3.20. [Reserved].
Section 3.21. Additional Obligations of the Seller.
The Seller agrees that on or prior to the tenth day after the Closing
Date, the Seller shall provide the Trustee and the Servicer with a written
notification, substantially in the form of Exhibit H attached hereto, relating
to each Class of Certificates, setting forth (i) in the case of each Class of
such Certificates, (a) if less than 10% of the aggregate Certificate Principal
Balance of such Class of Certificates has been sold as of such date, the value
calculated pursuant to clause (b)(iii) of Exhibit H hereto, or, (b) if 10% or
more of such Class of Certificates has been sold as of such date but no single
price is paid for at least 10% of the aggregate Certificate Principal Balance
of such Class of Certificates, then the weighted average price at which the
Certificates of such Class were sold and the aggregate percentage of
Certificates of such Class sold, (c) the first single price at which at least
10% of the aggregate Certificate Principal Balance of such class of
Certificates was sold, or (d) if any Certificates of each Class of Certificates
are retained by the Seller or an affiliate corporation, or are delivered to the
Seller, the fair market value of such Certificates as of the Closing Date, (ii)
the Prepayment Assumption used in pricing the Certificates, and (iii) such
other information as to matters of fact as the Trustee or the Servicer may
reasonably request to enable either of them to comply with its reporting
requirements with respect to each Class of such Certificates to the extent such
information can in the good faith judgment of the Seller be determined by it.
Section 3.22. Periodic Filings with the Securities and Exchange
Commission; Additional Information.
The Seller shall prepare or cause to be prepared for filing with the
Commission any and all reports, statements and information respecting the Trust
Fund and/or the Certificates required to be filed with the Commission pursuant
to the Securities Exchange Act of 1934, as amended, and shall solicit any and
all proxies of the Certificateholders whenever such proxies are required to be
solicited, pursuant to the Securities Exchange Act of 1934, as amended. Fees
and expenses incurred by the Seller in connection with this Section shall not
be reimbursable from the Trust Fund.
The Servicer and the Trustee each agree promptly to furnish to the
Seller, from time to time upon request, such further information, reports and
financial statements within their respective control related to this Agreement,
the Certificates and the Mortgage Loans as is reasonable to prepare and file
all necessary reports with the Commission.
Section 3.23. Rights of the Seller and the Trustee in Respect
of the Servicer.
The Seller may, but is not obligated to, enforce the obligations of
the Servicer hereunder and may, but is not obligated to, perform, or cause a
designee to perform, any defaulted obligation of the Servicer hereunder and in
connection with any such defaulted obligation to exercise the related rights of
the Servicer hereunder; provided that the Servicer shall not be relieved of any
of its obligations hereunder by virtue of such performance by the Seller or its
designee. Neither the Trustee nor the Seller shall have any responsibility or
liability for any action or failure to act by the Servicer nor shall the
Trustee or the Seller be obligated to supervise the performance of the Servicer
or otherwise.
Section 3.24. Trustee to Act as Servicer.
(a) In the event that the Servicer shall for any reason no longer be a
servicer hereunder (including by reason of an Event of Default), the Trustee or
its successor shall thereupon assume all of the rights and obligations of the
Servicer hereunder arising thereafter (except that the Trustee shall not be (i)
liable for losses of the Servicer pursuant to Section 3.10 hereof or any acts
or omissions of the Servicer hereunder, (ii) obligated to make Monthly Advances
if it is prohibited from doing so by applicable law, (iii) obligated to
effectuate repurchases or substitutions of Mortgage Loans hereunder including,
but not limited to, repurchases or substitutions of Mortgage Loans pursuant to
Section 2.02 or 2.04 hereof or (iv) deemed to have made any representations and
warranties of the Servicer hereunder). Any such assumption shall be subject to
Section 7.02 hereof. If the Servicer shall for any reason no longer be a
servicer hereunder (including by reason of any Event of Default), the Trustee
or its successor shall succeed to any rights and obligations of the Servicer
under any subservicing agreement.
(b) The Servicer shall, upon request of the Trustee, but at the
expense of the Servicer, deliver to the assuming party all documents and
records relating to each subservicing agreement or substitute subservicing
agreement and the related Mortgage Loans then being serviced thereunder and an
accounting of amounts collected or held by it and otherwise use its best
efforts to effect the orderly and efficient transfer of the substitute
subservicing agreement to the assuming party
Section 3.25. Certificate Account.
The Trustee shall establish and maintain, on behalf of the
Certificateholders, the Certificate Account. The Trustee shall, promptly upon
receipt, deposit in the Certificate Account and retain therein the following:
(i) the aggregate amount remitted by the Servicer to the Trustee
pursuant to Section 3.06(viii);
(ii) any amount deposited by the Trustee pursuant to Section
3.26 in connection with any losses on Permitted Investments; and
(iii) any other amounts deposited hereunder which are required
to be deposited in the Certificate Account.
In addition, on each Remittance Date, the Servicer shall remit to the
Trustee for deposit in the Certificate Account from its own funds and without
any right of reimbursement therefor, a total amount equal to the Compensating
Interest for the related Distribution Date to the extent not in excess of the
Servicing Fee for such Distribution Date.
In the event that the Servicer shall remit any amount not required to
be remitted, it may at any time direct the Trustee to withdraw such amount from
the Certificate Account, any provision herein to the contrary notwithstanding.
Such direction may be accomplished by delivering an Officer's Certificate to
the Trustee which describes the amounts deposited in error in the Certificate
Account. All funds deposited in the Certificate Account shall be held by the
Trustee in trust for the Certificateholders until disbursed in accordance with
this Agreement or withdrawn in accordance with Section 3.08. In no event shall
the Trustee incur liability for withdrawals from the Certificate Account at the
direction of the Servicer.
Section 3.26. Permitted Withdrawals from the Certificate Account.
The Trustee shall withdraw funds from the Certificate Account for
distributions to Certificateholders, in the manner specified in this Agreement
(and to withhold from the amounts so withdrawn, the amount of any taxes that it
is authorized to withhold pursuant to the last paragraph of Section 10.01(g)).
In addition, the Trustee may from time to time make withdrawals from the
Certificate Account for the following purposes:
(i) to pay to itself the Trustee Fee for the related
Distribution Date;
(ii) to pay to itself as additional compensation earnings on or
investment income with respect to funds in the Certificate Account;
(iii) to withdraw and return to the Servicer any amount
deposited in the Certificate Account and not required to be deposited
therein; and
(iv) to clear and terminate the Certificate Account upon
termination of the Agreement pursuant to Section 9.01 hereof.
Section 3.27. Investment of Funds in the Certificate Account.
Each institution at which the Certificate Account is maintained shall
invest the funds therein as directed in writing by the Trustee in Permitted
Investments, which shall mature not later than the Business Day next preceding
the Distribution Date (except that if such Permitted Investment is an
obligation of the institution that maintains such fund or account, then such
Permitted Investment shall mature not later than such Distribution Date) and
shall not be sold or disposed of prior to its maturity. All such Permitted
Investments shall be made in the name of the Trustee, for the benefit of the
Certificateholders. All income and gain net of any losses realized from any
such investment of funds on deposit in the Certificate Account shall be for the
benefit of the Trustee as trustee compensation and shall be remitted to such
entity monthly as provided herein. The amount of any realized losses in the
Certificate Account incurred in respect of any such investments shall promptly
be deposited by the Trustee into the Certificate Account.
ARTICLE IV
PAYMENTS TO CERTIFICATEHOLDERS
Section 4.01. Certificate Account; Distributions.
(a) The Servicer shall cause to be deposited on behalf of the Trustee
in the Certificate Account on or before 1:00 P.M. New York time on each
Remittance Date by wire transfer of immediately available funds an amount,
without duplication, equal to the sum of (i) any Monthly Advance for the
immediately succeeding Distribution Date, (ii) any amount required to be
deposited in the Certificate Account pursuant to Sections 3.06 or 3.25 and
(iii) all other amounts constituting the Available Distribution Amount for the
immediately succeeding Distribution Date.
With respect to any payment received by the Trustee after the
Remittance Date on which such payment was due, the Servicer shall pay to the
Trust Fund interest on any such late payment at an annual rate equal to the
prime rate, adjusted as of the date of each change, plus two percentage points,
but in no event greater than the maximum amount permitted by applicable law.
Such interest shall be deposited in the Custodial Account by the Servicer on
the date such late payment is made and shall cover the period commencing with
the day following such Remittance Date and ending with the Business Day on
which such payment is made, both inclusive. Such interest shall be remitted
along with the distribution payable on the next succeeding related Remittance
Date. The payment by the Servicer of any such interest shall not be deemed an
extension of time for payment or a waiver of any Event of Default by the
Servicer.
(b) On each Distribution Date the Trustee shall distribute to each
Certificateholder of record as of the next preceding Record Date (other than as
provided in Section 9.01 respecting the final distribution) either in
immediately available funds (by wire transfer or otherwise) to the account of
such Certificateholder at a bank or other entity having appropriate facilities
therefor, if such Certificateholder has so notified the Trustee at least five
(5) Business Days prior to the related Record Date and such Certificateholder
is the registered owner of Certificates the aggregate Initial Certificate
Principal Balance or Initial Notional Amount of which is not less than
$1,000,000, or otherwise by check mailed to such Certificateholder at the
address of such Holder appearing in the Certificate Register, such
Certificateholder's share (based on the aggregate of the Percentage Interests
represented by Certificates of the applicable Class held by such Holder) of the
following amounts, in the following order of priority, in each case to the
extent of the remaining Available Distribution Amount and in accordance with
the information provided by the Servicer pursuant to Section 4.02:
(i) to the Senior Certificateholders (other than the Class PO
Certificateholders), on a pro rata basis based on Accrued Certificate
Interest payable on such Certificates with respect to such
Distribution Date, Accrued Certificate Interest on such Classes of
Certificates, for such Distribution Date, plus any Accrued Certificate
Interest thereon remaining unpaid from any previous Distribution Date
(the "Senior Interest Distribution Amount");
(ii) (X) to the Class PO Certificateholders, the Class PO
Principal Distribution Amount; and
(Y) to the Senior Certificateholders (other than the
Class PO Certificateholders), in the priorities and amounts set forth
in Section 4.01(c) (other than clause first thereof), Section 4.01(d)
and Section 4.01(e), the sum of the following (applied to reduce the
Certificate Principal Balances of such Senior Certificates, as
applicable):
(A) the Senior Percentage for such Distribution Date times the
sum of the following:
(1) the principal portion of each Scheduled Monthly Payment
due during the related Due Period on each Outstanding Mortgage
Loan (other than the related Discount Fraction of the principal
portion of such payment with respect to a Discount Mortgage
Loan), whether or not received on or prior to the related
Determination Date;
(2) the Stated Principal Balance of any Mortgage Loan
repurchased during the related Prepayment Period pursuant to
Section 2.02, 2.04 or 3.11 and the amount of any shortfall
deposited in the Custodial Account in connection with the
substitution of a Deleted Mortgage Loan pursuant to Section 2.04
during the related Prepayment Period (other than the related
Discount Fraction of such Stated Principal Balance or shortfall
with respect to a Discount Mortgage Loan); and
(3) the principal portion of all other unscheduled
collections (other than Full Principal Prepayments and Partial
Principal Prepayments and amounts received in connection with a
Cash Liquidation or REO Disposition of a Mortgage Loan described
in Section 4.01(b)(ii)(Y)(B), including without limitation
Insurance Proceeds, Liquidation Proceeds and REO Proceeds)
received during the related Prepayment Period to the extent
applied by the Servicer as recoveries of principal of the related
Mortgage Loan pursuant to Section 3.12 (other than the related
Discount Fraction of the principal portion of such unscheduled
collections with respect to a Discount Mortgage Loan);
(B) with respect to each Mortgage Loan for which a Cash
Liquidation or a REO Disposition occurred during the related
Prepayment Period and did not result in any Excess Special Hazard
Losses, Excess Fraud Losses, Excess Bankruptcy Losses or Extraordinary
Losses, an amount equal to the lesser of (a) the Senior Percentage for
such Distribution Date times the Stated Principal Balance of such
Mortgage Loan (other than the related Discount Fraction of such Stated
Principal Balance, with respect to a Discount Mortgage Loan) and (b)
the Senior Accelerated Distribution Percentage for such Distribution
Date times the related unscheduled collections (including without
limitation Insurance Proceeds, Liquidation Proceeds and REO Proceeds)
to the extent applied by the Servicer as recoveries of principal of
the related Mortgage Loan pursuant to Section 3.12 (in each case other
than the Discount Fraction of such unscheduled collections, with
respect to a Discount Mortgage Loan);
(C) the Senior Accelerated Distribution Percentage for such
Distribution Date times the aggregate of all Full Principal
Prepayments and Partial Principal Prepayments received in the related
Prepayment Period (other than the related Discount Fraction of such
Full Principal Prepayments and Partial Principal Prepayments with
respect to a Discount Mortgage Loan); and
(D) any amounts described in subsection (ii)(Y), clauses (A),
(B) or (C) of this Section 4.01(b), as determined for any previous
Distribution Date, which remain unpaid after application of amounts
previously distributed pursuant to this clause (D) to the extent that
such amounts are not attributable to Realized Losses which have been
allocated to the Class B Certificates;
(iii) to the Holders of the Class B-1 Certificates, the Accrued
Certificate Interest thereon for such Distribution Date, plus any Accrued
Certificate Interest thereon remaining unpaid from any previous Distribution
Date, except as provided below;
(iv) to the Holders of the Class B-1 Certificates, an amount equal to
(x) the Subordinate Principal Distribution Amount for such Class of
Certificates for such Distribution Date, minus (y) the amount of any Class PO
Collection Shortfalls for such Distribution Date or remaining unpaid for all
previous Distribution Dates, to the extent the amounts available pursuant to
clause (x) of Sections 4.01(b)(vi), (viii), (x), (xii), (xiii) and (xiv) are
insufficient therefor, applied in reduction of the Certificate Principal
Balance of the Class B-1 Certificates;
(v) to the Holders of the Class B-2 Certificates, the Accrued
Certificate Interest thereon for such Distribution Date, plus any Accrued
Certificate Interest thereon remaining unpaid from any previous Distribution
Date, except as provided below;
(vi) to the Holders of the Class B-2 Certificates, an amount equal to
(x) the Subordinate Principal Distribution Amount for such Class of
Certificates for such Distribution Date, minus (y) the amount of any Class PO
Collection Shortfalls for such Distribution Date or remaining unpaid for all
previous Distribution Dates, to the extent the amounts available pursuant to
clause (x) of Sections 4.01(b)(viii), (x), (xii), (xiii) and (xiv) are
insufficient therefor, applied in reduction of the Certificate Principal
Balance of the Class B-2 Certificates;
(vii) to the Holders of the Class B-3 Certificates, the Accrued
Certificate Interest thereon for such Distribution Date, plus any Accrued
Certificate Interest thereon remaining unpaid from any previous Distribution
Date, except as provided below;
(viii) to the Holders of the Class B-3 Certificates, an amount equal
to (x) the Subordinate Principal Distribution Amount for such Class of
Certificates for such Distribution Date minus (y) the amount of any Class PO
Collection Shortfalls for such Distribution Date or remaining unpaid for all
previous Distribution Dates, to the extent the amounts available pursuant to
clause (x) of Sections 4.01(b)(x), (xii), (xiii) and (xiv) are insufficient
therefor, applied in reduction of the Certificate Principal Balance of the
Class B-3 Certificates;
(ix) to the Holders of the Class B-4 Certificates, the Accrued
Certificate Interest thereon for such Distribution Date, plus any Accrued
Certificate Interest thereon remaining unpaid from any previous Distribution
Date, except as provided below;
(x) to the Holders of the Class B-4 Certificates, an amount equal to
(x) the Subordinate Principal Distribution Amount for such Class of
Certificates for such Distribution Date minus (y) the amount of any Class PO
Collection Shortfalls for such Distribution Date or remaining unpaid for all
previous Distribution Dates, to the extent the amounts available pursuant to
clause (x) of Sections 4.01(b)(xii), (xiii) and (xiv) are insufficient
therefor, applied in reduction of the Certificate Principal Balance of the
Class B-4 Certificates;
(xi) to the Holders of the Class B-5 Certificates, the Accrued
Certificate Interest thereon for such Distribution Date, plus any Accrued
Certificate Interest thereon remaining unpaid from any previous Distribution
Date, except as provided below;
(xii) to the Holders of the Class B-5 Certificates, an amount equal to
(x) the Subordinate Principal Distribution Amount for such Class of
Certificates for such Distribution Date minus (y) the amount of any Class PO
Collection Shortfalls for such Distribution Date or remaining unpaid for all
previous Distribution Dates, to the extent the amounts available pursuant to
clause (x) of Sections 4.01(b)(xiii) and (xiv) are insufficient therefor,
applied in reduction of the Certificate Principal Balance of the Class B-5
Certificates;
(xiii) to the Holders of the Class B-6 Certificates, an amount equal
to (x) the Accrued Certificate Interest thereon for such Distribution Date,
plus any Accrued Certificate Interest thereon remaining unpaid from any
previous Distribution Date, except as provided below;
(xiv) to the Holders of the Class B-6 Certificates, an amount equal to
(x) the Subordinate Principal Distribution Amount for such Class of
Certificates for such Distribution Date minus (y) the amount of any Class PO
Collection Shortfalls for such Distribution Date or remaining unpaid for all
previous Distribution Dates applied in reduction of the Certificate Principal
Balance of the Class B-6 Certificates;
(xv) to the Senior Certificateholders in the priority set forth in
Section 4.01(c), the portion, if any, of the Available Distribution Amount
remaining after the foregoing distributions, applied to reduce the Certificate
Principal Balances of such Senior Certificates, but in no event more than the
aggregate of the outstanding Certificate Principal Balances of each such Senior
Certificates, and thereafter, to each Class of Class B Certificates then
outstanding beginning with such Class with the lowest numerical designation,
any portion of the Available Distribution Amount remaining after the Senior
Certificates have been retired, applied to reduce the Certificate Principal
Balance of each such Class of Class B Certificates, but in no event more than
the outstanding Certificate Principal Balance of each such Class of Class B
Certificates; and
(xvi) to the Class R Certificateholders, the balance, if any, of the
Available Distribution Amount.
(c) Distributions of principal on the Senior Certificates on each
Distribution Date occurring prior to the occurrence of the Credit Support
Depletion Date will be made as follows:
first, to the Class PO Certificates, until the Certificate
Principal Balance thereof is reduced to zero, an amount (the "Class PO
Principal Distribution Amount") equal to the aggregate of:
(A) the related Discount Fraction of the principal portion of
each Scheduled Monthly Payment on each Discount Mortgage Loan due
during the related Due Period, whether or not received on or prior to
the related Determination Date;
(B) the related Discount Fraction of the principal portion of
all unscheduled collections on each Discount Mortgage Loan received
during the preceding calendar month (other than amounts received in
connection with a Cash Liquidation or REO Disposition of a Discount
Mortgage Loan described in clause (C) below), including Full Principal
Prepayments, Partial Principal Prepayments and repurchases of Discount
Mortgage Loans (or, in the case of a substitution of a Deleted
Mortgage Loan, the Discount Fraction of the amount of any shortfall
deposited in the Custodial Account in connection with such
substitution);
(C) in connection with the Final Disposition of a Discount
Mortgage Loan that did not result in any Excess Special Hazard Losses,
Excess Fraud Losses, Excess Bankruptcy Losses or Extraordinary Losses,
an amount equal to the lesser of (1) the applicable Discount Fraction
of the Stated Principal Balance of such Discount Mortgage Loan
immediately prior to such Distribution Date and (2) the Discount
Fraction of the aggregate amount of the collections on such Discount
Mortgage Loan to the extent applied as recoveries of principal;
(D) any amounts allocable to principal for any previous
Distribution Date (calculated pursuant to clauses (A) through (C)
above) that remain undistributed; and
(E) the amount of any Class PO Collection Shortfalls for such
Distribution Date and the amount of any Class PO Collection Shortfalls
remaining unpaid for all previous Distribution Dates, but only to the
extent of the Eligible Funds for such Distribution Date;
second, the Senior Principal Distribution Amount shall be
distributed to the Class R Certificates, until the Certificate
Principal Balance thereof has been reduced to zero;
third, from the balance of the Senior Principal Distribution
Amount remaining after the distribution described in clause second
above, there shall be distributed, concurrently to the Lockout
Certificates, pro rata, the Lockout Distribution Percentage of the
Lockout Certificates' pro rata share (based on the Certificate
Principal Balance thereof relative to the aggregate Certificate
Principal Balance of all of the Certificates (other than the Class PO
Certificates)) of the aggregate of the amounts described in Section
4.01(b)(ii)(Y)(A), (B), (C) and (D) without any application of the
Senior Percentage or Senior Accelerated Distribution Percentage;
provided that, if the aggregate of the amounts described in Section
4.01(b)(ii)(Y)(A), (B), (C) and (D) is more than the balance of the
Available Distribution Amount remaining after the Senior Interest
Distribution Amount and the Class PO Distribution Amount have been
distributed, the amount paid to the Lockout Certificates pursuant to
this clause third shall be reduced by an amount equal to the Lockout
Certificates' pro rata share (based on the Certificate Principal
Balance thereof relative to the aggregate Certificate Principal
Balance of all classes of Senior Certificates (other than the Class PO
Certificates)) of such difference;
fourth, the Senior Principal Distribution Amount remaining
after the distributions described in clauses second and third above
shall be distributed, sequentially, to the Class A-1, Class A-2 and
Class A-7 Certificates, in that order, up to their respective Targeted
Principal Balances for such Distribution Date;
fifth, the Senior Principal Distribution Amount remaining
after the distributions described in clauses second through fourth
above shall be distributed to the Class A-3 Certificates, until the
Certificate Principal Balance thereof has been reduced to zero;
sixth, the Senior Principal Distribution Amount remaining
after the distributions described in clauses second through fifth
above shall be distributed, sequentially, to the Class A-1, Class A-2
and Class A-7 Certificates, in that order, without regard to their
Targeted Principal Balances, until the Certificate Principal Balances
thereof have been reduced to zero;
seventh, the Senior Principal Distribution Amount remaining
after the distributions described in clauses second through sixth
above shall be distributed to the Class A-4 Certificates, until the
Certificate Principal Balance thereof has been reduced to zero; and
eighth, the balance of the Senior Principal Distribution
Amount remaining after the distributions, if any, described in clauses
second through seventh above shall be distributed, concurrently to the
Lockout Certificates, pro rata, until the Certificate Principal
Balances thereof have been reduced to zero.
(d) On or after the occurrence of the Credit Support Depletion Date
but prior to the reduction of the Certificate Principal Balance of the Senior
Support Lockout Certificates to zero, all priorities relating to distributions
as described above in respect of principal among the Senior Certificates (other
than the Class PO Certificates) shall be disregarded and an amount equal to the
Discount Fraction of the principal portion of scheduled or unscheduled payments
received or advanced in respect of Discount Mortgage Loans shall be distributed
to the Class PO Certificates, and the Senior Principal Distribution Amount
shall be distributed to the Senior Certificates (other than the Class PO
Certificates) pro rata in accordance with their respective outstanding
Certificate Principal Balances and the Senior Interest Distribution Amount
shall be distributed as interest pursuant to Section 4.01(b)(i); provided that
the aggregate amount distributable to the Super Senior Certificates and Senior
Support Lockout Certificates in respect of the aggregate Accrued Certificate
Interest thereon and in respect of their aggregate pro rata portion of the
Senior Principal Distribution Amount will be distributed among those
Certificates in the following priority: first, to the Super Senior
Certificates, up to an amount equal to the Accrued Certificate Interest on the
Super Senior Certificates; second, to the Super Senior Certificates, up to an
amount equal to the Super Senior Optimal Principal Distribution Amount, in
reduction of the Certificate Principal Balance thereof; third, to the Senior
Support Lockout Certificates, up to an amount equal to the Accrued Certificate
Interest thereon; and fourth, to the Senior Support Lockout Certificates, the
remainder, until the Certificate Principal Balance thereof has been reduced to
zero.
(e) On or after the occurrence of the Credit Support Depletion Date
and upon reduction of the Certificate Principal Balance of the Senior Support
Lockout Certificates to zero, all priorities relating to distributions as
described above in respect of principal among the Senior Certificates (other
than the Class PO Certificates) shall be disregarded and an amount equal to the
Discount Fraction of the principal portion of scheduled or unscheduled payments
received or advanced in respect of Discount Mortgage Loans shall be distributed
to the Class PO Certificates, and the Senior Principal Distribution Amount
shall be distributed to the Senior Certificates (other than the Class PO
Certificates) pro rata in accordance with their respective outstanding
Certificate Principal Balances and the Senior Interest Distribution Amount,
shall be distributed as interest pursuant to Section 4.01(b)(i).
(f) After reduction of the Certificate Principal Balances of the
Senior Certificates (other than the Class PO Certificates) to zero but prior to
the Credit Support Depletion Date, the Senior Certificates (other than the
Class PO Certificates) will be entitled to no further distributions of
principal thereon and the Available Distribution Amount will be paid solely to
the holders of the Class PO Certificates and the Subordinate Certificates in
each case as described herein.
(g) Each distribution with respect to a Book-Entry Certificate shall
be paid to the Depository, as Holder thereof, and the Depository shall be
responsible for crediting the amount of such distribution to the accounts of
its Depository Participants in accordance with its normal procedures. Each
Depository Participant shall be responsible for disbursing such distribution to
the Certificate Owners that it represents and to each indirect participating
brokerage firm (a "brokerage firm" or "indirect participating firm") for which
it acts as agent. Each brokerage firm shall be responsible for disbursing funds
to the Certificate Owners that it represents. None of the Trustee, the Seller
or the Servicer shall have any responsibility therefor except as otherwise
provided by this Agreement or applicable law.
(h) Except as otherwise provided in Section 9.01, if the Servicer
anticipates that a final distribution with respect to any Class of Certificates
will be made on the next Distribution Date, the Servicer shall, no later than
the Determination Date in the month of such final distribution, notify the
Trustee and the Trustee shall, no later than two (2) Business Days after
receipt of such notice, mail on such date to each Holder of such Class of
Certificates a notice to the effect that: (i) the Trustee anticipates that the
final distribution with respect to such Class of Certificates will be made on
such Distribution Date but only upon presentation and surrender of such
Certificates at the office of the Trustee or as otherwise specified therein,
and (ii) no interest shall accrue on such Certificates from and after the end
of the prior calendar month.
(i) Any funds not distributed to any Holder or Holders of Certificates
of such Class on such Distribution Date because of the failure of such Holder
or Holders to tender their Certificates shall, on such date, be set aside and
held in trust and credited to the account of the appropriate non-tendering
Holder or Holders. If any Certificates as to which notice has been given
pursuant to this Section 4.01(i) shall not have been surrendered for
cancellation within six months after the time specified in such notice, the
Trustee shall mail a second notice to the remaining non-tendering
Certificateholders to surrender their Certificates for cancellation in order to
receive the final distribution with respect thereto. If within six months after
the second notice all such Certificates shall not have been surrendered for
cancellation, the Trustee shall take reasonable steps as directed by the
Seller, or appoint an agent to take reasonable steps, to contact the remaining
non-tendering Certificateholders concerning surrender of their Certificates.
The costs and expenses of maintaining the funds in trust and of contacting such
Certificateholders shall be paid out of the assets remaining in the Trust Fund.
If within nine months after the second notice any such Certificates shall not
have been surrendered for cancellation, the Class R Certificateholders shall be
entitled to all unclaimed funds and other assets which remain subject hereto.
No interest shall accrue or be payable to any Certificateholder on any amount
held in trust as a result of such Certificateholder's failure to surrender its
Certificate(s) for final payment thereof in accordance with this Section
4.01(i).
Section 4.02. Statements to Certificateholders.
On each Distribution Date, the Trustee shall forward or cause to be
forwarded by mail to each Holder of a Certificate and to the Seller, the
Servicer and the Rating Agencies, a statement based on information provided by
the Servicer two Business Days prior to such Distribution Date in a mutually
agreeable format setting forth:
(i) (a) the amount of such distribution to the
Certificateholders of each Class applied to reduce the Certificate
Principal Balance thereof, and (b) the aggregate amount included
therein representing Principal Prepayments;
(ii) the amount of such distribution to Holders of each Class of
Certificates allocable to interest;
(iii) if the distribution to the Holders of any Class of
Certificates is less than the full amount that would be distributable
to such Holders if there were sufficient funds available therefor, the
amount of the shortfall;
(iv) the aggregate amount of Monthly Advances included in such
distribution as of the close of business on such Distribution Date and
outstanding thereafter;
(v) the number and aggregate Stated Principal Balance of the
Mortgage Loans at the close of business on such Distribution Date;
(vi) the aggregate Certificate Principal Balance of each Class
of Certificates, and each of the Senior Percentages and Class B
Percentages, after giving effect to the amounts distributed on such
Distribution Date, separately identifying any reduction thereof due to
Realized Losses other than pursuant to an actual distribution of
principal;
(vii) the related Subordinate Principal Distribution Amount;
(viii) the number and aggregate Stated Principal Balance of
Mortgage Loans (a) delinquent 31 to 60 days, (b) delinquent 61 to 90
days, (c) delinquent 91 days or more;
(ix) the number, aggregate principal balance and book value of
any REO Properties;
(x) the aggregate Accrued Certificate Interest remaining unpaid,
if any, for each Class of Certificates, after giving effect to the
distribution made on such Distribution Date;
(xi) the Special Hazard Amount, Fraud Loss Amount and Bankruptcy
Amount as of the close of business on such Distribution Date and a
description of any change in the calculation of such amounts;
(xii) the weighted average Pool Strip Rate for such Distribution
Date and the Pass-Through Rate on the Class X Certificates;
(xiii) the occurrence of the Credit Support Depletion Date;
(xiv) the Senior Accelerated Distribution Percentage applicable
to such distribution;
(xv) the Senior Percentage for such Distribution Date; and
(xvi) the aggregate amount of Realized Losses for such
Distribution Date.
In the case of information furnished pursuant to subclauses (i)-(iii)
above, the amounts shall also be expressed as a dollar amount per Certificate
of any Class evidencing an Initial Certificate Principal Balance of $1,000.
The Trustee shall make such statement (and, at its option, any
additional files containing the same information in an alternative format)
available each month to Certificateholders and other parties hereto via the
Trustee's internet website and its fax-on demand service. Parties that are
unable to use the above distribution options shall be entitled to have a paper
copy mailed to them upon request via first class mail by calling the Trustee's
customer service desk. The Trustee shall have the right to change the way
Distribution Date statements are distributed in order to make such distribution
more convenient and/or more accessible to the above parties, and the Trustee
shall provide timely and adequate notification to all above parties regarding
any such changes.
Within a reasonable period of time after the end of each calendar
year, the Trustee shall prepare and forward, upon request, to each Person who
at any time during the calendar year was a Holder of a Senior or Subordinate
Certificate, a statement containing the information set forth in subclauses (i)
- (iii) above, aggregated for such calendar year or applicable portion thereof
during which such person was a Certificateholder. Such obligation of the
Trustee shall be deemed to have been satisfied to the extent that substantially
comparable information shall be provided by the Servicer pursuant to any
requirements of the Code and regulations thereunder as from time to time are in
force.
On each Distribution Date the Trustee shall prepare and forward, to
each Holder of a Residual Certificate a copy of the reports forwarded to the
other Certificateholders on such Distribution Date.
Within a reasonable period of time after the end of each calendar
year, the Trustee shall prepare and forward, upon request, to each Person who
at any time during the calendar year was a Holder of a Residual Certificate a
statement containing the information provided pursuant to the previous
paragraph aggregated for such calendar year or applicable portion thereof
during which such Person was a Certificateholder. Such obligation of the
Trustee shall be deemed to have been satisfied to the extent that substantially
comparable information shall be provided by the Servicer pursuant to any
requirements of the Code as from time to time are in force.
The Trustee will make the Distribution Date statement (and, at its
option, any additional files containing the same information in an alternative
format) available each month to Certificateholders and other parties to this
Agreement via the Trustee's internet website and its fax-on-demand servicer.
The Trustee's fax-on-demand service may be accessed by calling (▇▇▇) ▇▇▇-▇▇▇▇.
The Trustee's internet website shall initially be located at "▇▇▇.▇▇▇▇▇▇▇.▇▇▇."
Assistance in using the website or the fax-on-demand service can be obtained by
calling the Trustee's customer service desk at (▇▇▇) ▇▇▇-▇▇▇▇. Parties that are
unable to use the above distribution options are entitled to have a paper copy
mailed to them via first call mail by calling the customer service desk and
indicating such. The Trustee shall have the right to change the way
Distribution Date statements are distributed in order to make such distribution
more convenient and/or more accessible to the above parties and the Trustee
shall provide timely and adequate notification to all above parties regarding
any such changes.
Section 4.03. Remittance Reports; Monthly Advances by the Servicer;
Liquidation Reports.
(a) No later than the seventeenth (17th) calendar day of each month,
the Servicer shall deliver to the Seller and the Trustee a report (the
"Remittance Report"), in a mutually agreed upon form of an electromagnetic tape
or disk and hard copy. The Remittance Report and any written information
supplemental thereto shall include such information with respect to the
Mortgage Loans that is required by the Trustee for purposes of making the
calculations and preparing the statement described in Sections 4.01 and 4.02,
as set forth in written specifications or guidelines issued by the Seller or
the Trustee from time to time.
(b) Not later than the close of business on the Business Day preceding
each Remittance Date, the Servicer shall either (i) deposit in the Custodial
Account from its own funds an amount equal to the Monthly Advances to be made
by the Servicer in respect of the related Distribution Date, which shall be in
an aggregate amount equal to the aggregate amount of Scheduled Monthly Payments
(with each interest portion thereof adjusted to the Net Mortgage Rate), less
the amount of any related reductions in the amount of interest collectable from
the Mortgagor pursuant to the Relief Act or similar legislation or regulations
then in effect, on the Outstanding Mortgage Loans as of the related Due Date,
which Scheduled Monthly Payments were delinquent as of the close of business as
of the related Determination Date; provided that no Monthly Advance shall be
made if it would be a Nonrecoverable Advance, (ii) withdraw from amounts on
deposit in the Custodial Account all or a portion of the Amount Held for Future
Distribution in discharge of any such Monthly Advance, or (iii) make advances
in the form of any combination of (i) and (ii) aggregating the amount of such
Monthly Advance. Any portion of the Amount Held for Future Distribution so used
shall be replaced by the Servicer by deposit in the Custodial Account on or
before the close of business on the Business Day preceding any future
Remittance Date to the extent that funds attributable to the Mortgage Loans
that are available in the Custodial Account on such date shall be less than
payments to Certificateholders required to be made on the following
Distribution Date. The determination by the Servicer that it has made a
Nonrecoverable Advance or that any proposed Monthly Advance, if made, would
constitute a Nonrecoverable Advance, shall be evidenced by a certificate of a
Servicing Officer delivered to the Seller and the Trustee with the Remittance
Report.
(c) In the event that the Servicer fails for any reason to make an
Advance required to be made pursuant to Section 4.03(b) on or before the
Business Day preceding the Remittance Date, the Trustee shall, on or before the
related Distribution Date, deposit into the Certificate Account an amount equal
to the excess of (i) Monthly Advances required to be made by the Servicer that
would have been deposited in the Certificate Account over (ii) the amount of
any Monthly Advance made by the Servicer with respect to such Distribution
Date; provided, however, that the Trustee shall be required to make such
Advance only if it is not prohibited by law from doing so and the Trustee has
determined that such Advance would not be a Nonrecoverable Advance. The Trustee
shall be entitled to be reimbursed from the Custodial Account for Advances made
by it pursuant to this paragraph as if it were the Servicer hereunder.
(d) The Servicer's obligation to make such Monthly Advances as to any
Mortgage Loan will continue through the final disposition or liquidation of the
Mortgaged Property, unless the Servicer deems such advance to be nonrecoverable
from Liquidation Proceeds, REO Proceeds or Insurance Proceeds with respect to
the applicable Mortgage Loan. In such latter event, the Servicer shall deliver
to the Trustee an Officer's Certificate to the effect that an officer of the
Servicer has reviewed the servicing file related to such Mortgage Loan and has
obtained a recent appraisal and has made the reasonable determination that any
additional Monthly Advances are nonrecoverable from Liquidation or Insurance
Proceeds with respect to the applicable Mortgage Loan
(e) Upon the foreclosure sale of any Mortgaged Property or the
acquisition thereof by the Trustee pursuant to a deed-in-lieu of foreclosure,
the Servicer shall submit to the Trustee a liquidation report with respect to
such Mortgaged Property in such form as the Servicer, the Seller and the
Trustee shall agree. The Servicer shall also provide reports on the status of
REO Property containing such information as the Seller and the Trustee may
reasonably require.
Section 4.04. Allocation of Realized Losses.
Prior to each Distribution Date, the Servicer shall determine the
total amount of Realized Losses, if any, that resulted from any Cash
Liquidation, Debt Service Reduction, Deficient Valuation or REO Disposition
that occurred during the related Prepayment Period. The amount of each Realized
Loss shall be evidenced by an Officer's Certificate and shall be based solely
upon information provided by the Servicer. All Realized Losses, other than
Excess Special Hazard Losses, Extraordinary Losses, Excess Bankruptcy Losses or
Excess Fraud Losses, shall be allocated as follows: first, to the Class B-6
Certificates until the Certificate Principal Balance thereof has been reduced
to zero; second, to the Class B-5 Certificates until the Certificate Principal
Balance thereof has been reduced to zero; third, to the Class B-4 Certificates
until the Certificate Principal Balance thereof has been reduced to zero;
fourth, to the Class B-3 Certificates until the Certificate Principal Balance
thereof has been reduced to zero; fifth, to the Class B-2 Certificates until
the Certificate Principal Balance thereof has been reduced to zero; sixth, to
the Class B-1 Certificates until the Certificate Principal Balance thereof has
been reduced to zero; and, thereafter, if such Realized Losses are on a
Discount Mortgage Loan, to the Class PO Certificates, in an amount equal to the
Discount Fraction of the principal portion thereof, and the remainder of such
Realized Losses and the entire amount of such Realized Losses on Non-Discount
Mortgage Loans shall be allocated among all the Class A Certificates and Class
R Certificates, on a pro rata basis, as described below; provided, however,
that Realized Losses otherwise allocable to the Super Senior Certificates will
be allocated to the Senior Support Lockout Certificates until the Certificate
Principal Balance of the Senior Support Lockout Certificates is reduced to
zero. Any Excess Special Hazard Losses, Excess Bankruptcy Losses, Excess Fraud
Losses and Extraordinary Losses on Non-Discount Mortgage Loans will be
allocated among the Class A, Class X, Class B and Class R Certificates, on a
pro rata basis, as described below. The principal portion of such losses on
Discount Mortgage Loans will be allocated to the Class PO Certificates in an
amount equal to the related Discount Fraction thereof, and the remainder of
such losses on Discount Mortgage Loans will be allocated among the Class A,
Class X, Class B and Class R Certificates.
As used herein, an allocation of a Realized Loss on a "pro rata basis"
among two or more specified Classes of Certificates means an allocation on a
pro rata basis, among the various Classes so specified, to each such Class of
Certificates on the basis of their then outstanding Certificate Principal
Balances prior to giving effect to distributions to be made on such
Distribution Date in the case of the principal portion of a Realized Loss or
among the various Classes so specified based on the Accrued Certificate
Interest thereon payable on such Distribution Date (without regard to any
Compensating Interest for such Distribution Date) in the case of an interest
portion of a Realized Loss. Any allocation of the principal portion of Realized
Losses to the Class B Certificates then outstanding with the highest numerical
designation shall be made by operation of the definition of "Certificate
Principal Balance" and by operation of the provisions of Section 4.01.
Allocations of the interest portions of Realized Losses shall be made by
operation of the definition of "Accrued Certificate Interest" and by operation
of the provisions of Section 4.01. All Realized Losses and all other losses
allocated to a Class of Certificates hereunder will be allocated among the
Certificates of such Class in proportion to the Percentage Interests evidenced
thereby.
Section 4.05. Information Reports to Be Filed by the Servicer.
The Servicer shall file information reports with respect to the
receipt of mortgage interest received in a trade or business, foreclosures and
abandonments of any Mortgaged Property and the information returns relating to
cancellation of indebtedness income with respect to any Mortgaged Property
required by Sections 6050H, 6050J and 6050P of the Code, respectively. Such
reports shall be in form and substance sufficient to meet the reporting
requirements imposed by such Sections 6050H, 6050J and 6050P of the Code.
Section 4.06. Compliance with Withholding Requirements.
Notwithstanding any other provision of this Agreement, the Trustee
shall comply with all federal withholding requirements respecting payments to
Certificateholders of interest or original issue discount on the Mortgage
Loans, that the Trustee reasonably believes are applicable under the Code. The
consent of Certificateholders shall not be required for such withholding. In
the event the Trustee withholds any amount from interest or original issue
discount payments or advances thereof to any Certificateholder pursuant to
federal withholding requirements, the Trustee shall, together with its monthly
report to such Certificateholders pursuant to Section 4.02 hereof, indicate
such amount withheld.
ARTICLE V
THE CERTIFICATES
Section 5.01. The Certificates.
The Certificates will be substantially in the respective forms annexed
hereto as Exhibits ▇-▇, ▇-▇, ▇-▇ and B. The Certificates will be issuable in
registered form only. The Class A, Class PO and Class X Certificates will be
issued in minimum denominations of $1,000 and integral multiples of $1 in
excess thereof; the Class B-1, Class B-2 and Class B-3 Certificates will be
issued in minimum denominations of $25,000 and integral multiples of $1 in
excess thereof; and the Class B-4, Class B-5 and Class B-6 will be issued in
minimum denominations of $100,000 and integral multiples of $1 in excess
thereof. The Residual Certificates will be issued in certificated
fully-registered form in a single certificate of $100.
Upon original issuance, the Certificates shall, upon the written
request of the Seller executed by an officer of the Seller, be executed and
delivered by the Trustee, authenticated by the Trustee and delivered to or upon
the order of the Seller upon receipt by the Trustee of the documents specified
in Section 2.01. The Certificates shall be executed by manual or facsimile
signature on behalf of the Trustee in its capacity as trustee hereunder by a
Responsible Officer. Certificates bearing the manual or facsimile signatures of
individuals who were at the time they signed the proper officers of the Trustee
shall bind the Trustee, notwithstanding that such individuals or any of them
have ceased to hold such offices prior to the authentication and delivery of
such Certificates or did not hold such offices at the date of such
Certificates. No Certificate shall be entitled to any benefit under this
Agreement, or be valid for any purpose, unless there appears on such
Certificate a certificate of authentication substantially in the form provided
for herein executed by the Trustee by manual signature, and such certificate
upon any Certificate shall be conclusive evidence, and the only evidence, that
such Certificate has been duly authenticated and delivered hereunder. All
Certificates issued on the Closing Date shall be dated the Closing Date and any
Certificates delivered thereafter shall be dated the date of their
authentication.
(b) The Book-Entry Certificates shall initially be issued as one or
more Certificates registered in the name of the Depository or its nominee and,
except as provided below, registration of such Certificates may not be
transferred by the Trustee except to another Depository that agrees to hold
such Certificates for the respective Certificate Owners with Ownership
Interests therein. The Certificate Owners shall hold their respective Ownership
Interests in and to each of such Book-Entry Certificates through the book-entry
facilities of the Depository and, except as provided below, shall not be
entitled to Definitive Certificates in respect of such Ownership Interests. All
transfers by Certificate Owners of their respective Ownership Interests in the
Book-Entry Certificates shall be made in accordance with the procedures
established by the Depository Participant or brokerage firm representing such
Certificate Owner. Each Depository Participant shall transfer the Ownership
Interests only in the Book-Entry Certificates of Certificate Owners it
represents or of brokerage firms for which it acts as agent in accordance with
the Depository's normal procedures.
The Trustee, the Servicer and the Seller may for all purposes
(including the making of payments due on the respective Classes of Book-Entry
Certificates) deal with the Depository as the authorized representative of the
Certificate Owners with respect to the respective Classes of Book-Entry
Certificates for the purposes of exercising the rights of Certificateholders
hereunder. The rights of Certificate Owners with respect to the respective
Classes of Book-Entry Certificates shall be limited to those established by law
and agreements between such Certificate Owners and the Depository Participants
and brokerage firms representing such Certificate Owners. Multiple requests and
directions from, and votes of, the Depository as Holder of any Class of
Book-Entry Certificates with respect to any particular matter shall not be
deemed inconsistent if they are made with respect to different Certificate
Owners. The Seller may establish a reasonable record date in connection with
solicitations of consents from or voting by Certificateholders and shall give
notice to the Depository of such record date.
If (i)(A) the Seller advises the Trustee in writing that the
Depository is no longer willing or able to properly discharge its
responsibilities as Depository and (B) the Seller is unable to locate a
qualified successor or (ii) the Seller at its option advises the Trustee in
writing that it elects to terminate the book-entry system through the
Depository, the Trustee shall notify all Certificate Owners, through the
Depository, of the occurrence of any such event and of the availability of
Definitive Certificates to Certificate Owners requesting the same. Upon
surrender to the Trustee of the Book-Entry Certificates by the Depository,
accompanied by registration instructions from the Depository for registration
of transfer, the Trustee shall, at the expense of the Seller, issue the
Definitive Certificates. Neither the Seller, the Servicer nor the Trustee shall
be liable for any actions taken by the Depository or its nominee, including,
without limitation, any delay in delivery of such instructions and may
conclusively rely on, and shall be protected in relying on, such instructions.
Upon the issuance of Definitive Certificates the Trustee and the Servicer shall
recognize the Holders of the Definitive Certificates as Certificateholders
hereunder.
Section 5.02. Registration of Transfer and Exchange of Certificates.
(a) The Trustee shall maintain a Certificate Register in which,
subject to such reasonable regulations as it may prescribe, the Trustee shall
provide for the registration of Certificates and of transfers and exchanges of
Certificates as herein provided.
(b) Except as provided in Section 5.02(c), no transfer, sale, pledge
or other disposition of a Private Certificate shall be made unless such
transfer, sale, pledge or other disposition is exempt from the registration
requirements of the Securities Act of 1933, as amended (the "Act"), and any
applicable state securities laws or is made in accordance with said Act and
laws. In the event that a transfer of a Private Certificate is to be made under
this Section 5.02(b), (i) the Trustee shall require an Opinion of Counsel
addressed to the Seller, the Servicer and the Trustee acceptable to and in form
and substance satisfactory to the Trustee that such transfer shall be made
pursuant to an exemption, describing the applicable exemption and the basis
therefor, from said Act and laws or is being made pursuant to said Act and
laws, which Opinion of Counsel shall not be an expense of the Trustee, the
Seller or the Servicer, provided that such Opinion of Counsel will not be
required in connection with the initial transfer of any such Private
Certificate by the Seller or any affiliate thereof, to a non-affiliate of the
Seller and (ii) the Trustee shall require the transferee to execute a
representation letter, substantially in the form of Exhibit F-1 hereto, and the
Trustee shall require the transferor to execute a representation letter,
substantially in the form of Exhibit F-2 hereto, each acceptable to and in form
and substance satisfactory to the Trustee certifying to the Seller and the
Trustee the facts surrounding such transfer, which representation letters shall
not be an expense of the Trustee, the Seller or the Servicer; provided however
that such representation letters will not be required in connection with any
transfer of any such Private Certificate by the Seller to an affiliate of the
Seller and the Trustee shall be entitled to conclusively rely upon a
representation (which, upon the request of the Trustee, shall be a written
representation) from the Seller of the status of such transferee as an
affiliate of the Seller. Any such Certificateholder desiring to effect such
transfer shall, and does hereby agree to, indemnify the Trustee, the Seller and
the Servicer against any liability that may result if the transfer is not so
exempt or is not made in accordance with such applicable federal and state
laws.
(c) Notwithstanding the requirements of Section 5.02(b), transfers of
Private Certificates may be made in accordance with this Section 5.02(c) if the
prospective transferee of a Private Certificate provides the Trustee and the
Seller with an investment letter substantially in the form of Exhibit F-3
attached hereto, which investment letter shall not be an expense of the
Trustee, the Seller or the Servicer, and which investment letter states that,
among other things, such transferee is a "qualified institutional buyer" as
defined under Rule 144A. Such transfers shall be deemed to have complied with
the requirements of Section 5.02(b) hereof; provided, however, that no transfer
of any of the Private Certificates may be made pursuant to this Section 5.02(c)
by the Seller. Any such Certificateholder desiring to effect such transfer
shall, and does hereby agree to, indemnify the Trustee, the Seller and the
Servicer against any liability that may result if the transfer is not so exempt
or is not made in accordance with such applicable federal and state laws.
(d) Subject to the provisions of subsection (ii), no Senior Support
Lockout Certificate, Subordinate Certificate or Residual Certificate may be
acquired directly or indirectly by, or on behalf of, an employee benefit plan
or other retirement arrangement which is subject to Title I of ERISA and/or
Section 4975 of the Code, unless the proposed transferee provides an opinion of
counsel to the Trustee (upon which the Trustee is authorized to rely) to the
effect that the proposed transfer and/or holding of such Certificate and the
servicing, management and operation of the Trust: (A) will not result in a
prohibited transaction under Section 406 of ERISA or Section 4975 of the Code
which is not covered under an individual or class prohibited transaction
exemption including but not limited to Department of Labor Prohibited
Transaction Exemption ("PTE") 84-14 (Class Exemption for Plan Asset
Transactions Determined by Independent Qualified Professional Asset Managers);
PTE 91-38 (Class Exemption for Certain Transactions Involving Bank Collective
Investment Funds); PTE 90-1 (Class Exemption for Certain Transactions Involving
Insurance Company Pooled Separate Accounts); PTE 95-60 (Class Exemption for
Certain Transactions Involving Insurance Company General Accounts); PTE 96-23
(Class Exemption for Plan Asset Transactions Determined by In-House Asset
Managers); and Section 401(c) of ERISA and the regulations to be promulgated
thereunder (relating to insurance company general accounts) and (B) will not
give rise to any additional fiduciary duties under ERISA on the part of either
the Seller, the Servicer or the Trustee.
(i) In lieu of such opinion of counsel, any Person acquiring an
interest in a Senior Support Lockout Certificate or a Subordinate
Certificate may represent to the Trustee (or, in the case of a Person
acquiring an interest in a Book-Entry Certificate which is a Senior
Support Lockout Certificate or a Subordinate Certificate, shall be
deemed to have represented to the Trustee) that it is either: (A) not
acquiring an interest in such Certificate directly or indirectly by,
or on behalf of, an employee benefit plan or other retirement
arrangement which is subject to Title I of ERISA and/or Section 4975
of the Code, or (B) providing a representation or certification in the
form of Exhibit F-6 attached hereto to the Trustee to the effect that
the transfer and/or holding of an interest in such Certificate and the
servicing, management and/or operation of the Trust and its assets:
(I) will not result in any prohibited transaction which is not covered
under an individual or class prohibited transaction exemption,
including, but not limited to, ▇▇▇ ▇▇-▇▇, ▇▇▇ ▇▇-▇▇, ▇▇▇ ▇▇-▇, ▇▇▇
95-60, PTE 96-23 or Section 401(c) of ERISA and the regulations to be
promulgated thereunder and (II) will not give rise to any additional
fiduciary duties on the part of either the Seller, the Servicer or the
Trustee.
(e) (i) Each Person who has or who acquires any Ownership Interest in
a Residual Certificate shall be deemed by the acceptance or acquisition of such
Ownership Interest to have agreed to be bound by the following provisions and
to have irrevocably authorized the Trustee or its designee under clause
(iii)(A) below to deliver payments to a Person other than such Person and to
negotiate the terms of any mandatory sale under clause (iii)(B) below and to
execute all instruments of transfer and to do all other things necessary in
connection with any such sale. The rights of each Person acquiring any
Ownership Interest in a Residual Certificate are expressly subject to the
following provisions:
(A) Each Person holding or acquiring any Ownership Interest in a
Residual Certificate shall be a Permitted Transferee and shall
promptly notify the Trustee of any change or impending change in its
status as a Permitted Transferee.
(B) In connection with any proposed Transfer of any Ownership
Interest in a Residual Certificate, the Trustee shall require delivery
to it, and shall not register the Transfer of any Residual Certificate
until its receipt of (I) an affidavit and agreement (a "Transfer
Affidavit and Agreement" in the form attached hereto as Exhibit F-5)
from the proposed Transferee, in form and substance satisfactory to
the Trustee representing and warranting, among other things, that it
is a Permitted Transferee, that it is not acquiring its Ownership
Interest in the Residual Certificate that is the subject of the
proposed Transfer as a nominee, trustee or agent for any Person who is
not a Permitted Transferee, that for so long as it retains its
Ownership Interest in a Residual Certificate, it will endeavor to
remain a Permitted Transferee, and that it has reviewed the provisions
of this Section 5.02 and agrees to be bound by them, and (II) a
certificate, in the form attached hereto as Exhibit F-4, from the
Holder wishing to transfer the Residual Certificate, in form and
substance satisfactory to the Trustee representing and warranting,
among other things, that no purpose of the proposed Transfer is to
impede the assessment or collection of tax.
(C) Notwithstanding the delivery of a Transfer Affidavit and
Agreement by a proposed Transferee under clause (B) above, if a
Responsible Officer of the Trustee assigned to this transaction has
actual knowledge that the proposed Transferee is not a Permitted
Transferee, no Transfer of an Ownership Interest in a Residual
Certificate to such proposed Transferee shall be effected.
(D) Each Person holding or acquiring any Ownership Interest in a
Residual Certificate shall agree (x) to require a Transfer Affidavit
and Agreement from any other Person to whom such Person attempts to
transfer its Ownership Interest in a Residual Certificate and (y) not
to transfer its Ownership Interest unless it provides a certificate to
the Trustee in the form attached hereto as Exhibit F-4.
(E) Each Person holding or acquiring an Ownership Interest in a
Residual Certificate, by purchasing an Ownership Interest in such
Certificate, agrees to give the Trustee written notice that it is a
"pass-through interest holder" within the meaning of Temporary
Treasury Regulations Section 1.67-3T(a)(2)(i)(A) immediately upon
acquiring an Ownership Interest in a Residual Certificate, if it is "a
pass-through interest holder", or is holding an Ownership Interest in
a Residual Certificate on behalf of a "pass-through interest holder."
(ii) The Trustee will register the Transfer of any Residual
Certificate only if it shall have received the Transfer Affidavit and Agreement
in the form attached hereto as Exhibit F-5, a certificate of the Holder
requesting such transfer in the form attached hereto as Exhibit F-4 and all of
such other documents as shall have been reasonably required by the Trustee as a
condition to such registration. Transfers of the Residual Certificates other
than to Permitted Transferees are prohibited.
(iii) (A) If any Person other than a Permitted Transferee shall become
a Holder of a Residual Certificate, then the last preceding Permitted
Transferee shall be restored, to the extent permitted by law, to all rights and
obligations as Holder thereof retroactive to the date of registration of such
Transfer of such Residual Certificate. If a transfer of a Residual Certificate
is disregarded pursuant to the provisions of Treasury Regulations Section
1.860E-1 or Section 1.860G-3, then the last preceding Permitted Transferee
shall be restored, to the extent permitted by law, to all rights and
obligations as Holder thereof retroactive to the date of registration of such
Transfer of such Residual Certificate. The Trustee shall be under no liability
to any Person for any registration of Transfer of a Residual Certificate that
is in fact not permitted by this Section 5.02 or for making any payments due on
such Certificate to the holder thereof or for taking any other action with
respect to such holder under the provisions of this Agreement.
(B) If any purported Transferee shall become a Holder of a
Residual Certificate in violation of the restrictions in this Section
5.02 and to the extent that the retroactive restoration of the rights
of the Holder of such Residual Certificate as described in clause
(iii)(A) above shall be invalid, illegal or unenforceable, then the
Trustee shall have the right, without notice to the holder or any
prior holder of such Residual Certificate, to sell such Residual
Certificate to a purchaser selected by the Trustee on such terms as
the Trustee may choose. Such purported Transferee shall promptly
endorse and deliver each Residual Certificate in accordance with the
instructions of the Trustee. Such purchaser may be the Trustee itself.
The proceeds of such sale, net of the commissions (which may include
commissions payable to the Trustee), expenses and taxes due, if any,
will be remitted by the Trustee to such purported Transferee. The
terms and conditions of any sale under this clause (iii)(B) shall be
determined in the sole discretion of the Trustee, and the Trustee
shall not be liable to any Person having an Ownership Interest in a
Residual Certificate as a result of its exercise of such discretion.
(iv) The Trustee shall make available to the Internal Revenue
Service and those Persons specified by the REMIC Provisions, all
information necessary to compute any tax imposed (A) as a result of
the transfer of an ownership interest in a Residual Certificate to any
Person who is a Disqualified Organization, including the information
regarding "excess inclusions" of such Residual Certificates required
to be provided to the Internal Revenue Service and certain Persons as
described in Treasury Regulations Sections 1.860D-1(b)(5) and
1.860E-2(a)(5), and (B) as a result of any regulated investment
company, real estate investment trust, common trust fund, partnership,
trust, estate or organization described in Section 1381 of the Code
that holds an Ownership Interest in a Residual Certificate having as
among its record holders at any time any Person who is a Disqualified
Organization. The Trustee may charge and shall be entitled to
reasonable compensation for providing such information as may be
required from those Persons which may have had a tax imposed upon them
as specified in clauses (A) and (B) of this paragraph for providing
such information.
(f) Subject to the preceding paragraphs, upon surrender for
registration of transfer of any Certificate at the office of the Trustee
maintained for such purpose, the Trustee shall execute and the Trustee shall
authenticate and deliver, in the name of the designated transferee or
transferees, one or more new Certificates of the same Class of a like aggregate
Percentage Interest. Every Certificate surrendered for transfer shall be
accompanied by notification of the account of the designated transferee or
transferees for the purpose of receiving distributions pursuant to Section 4.01
by wire transfer, if any such transferee desires and is eligible for
distribution by wire transfer.
(g) At the option of the Certificateholders, Certificates may be
exchanged for other Certificates of authorized denominations of the same Class
of a like aggregate Percentage Interest, upon surrender of the Certificates to
be exchanged at the office of the Trustee. Whenever any Certificates are so
surrendered for exchange the Trustee shall execute, authenticate and deliver
the Certificates which the Certificateholder making the exchange is entitled to
receive. Every Certificate presented or surrendered for transfer or exchange
shall (if so required by the Trustee) be duly endorsed by, or be accompanied by
a written instrument of transfer in the form satisfactory to the Trustee duly
executed by, the Holder thereof or his attorney duly authorized in writing.
(h) No service charge shall be made to the Certificateholders for any
transfer or exchange of Certificates, but the Trustee may require payment of a
sum sufficient to cover any tax or governmental charge that may be imposed in
connection with any transfer or exchange of Certificates.
(i) All Certificates surrendered for transfer and exchange shall be
cancelled and retained by the Trustee in accordance with the Trustee's standard
procedures.
Section 5.03. Mutilated, Destroyed, Lost or Stolen Certificates.
If (i) any mutilated Certificate is surrendered to the Trustee and the
Trustee receives evidence to its satisfaction of the destruction, loss or theft
of any Certificate, and (ii) there is delivered to the Trustee such security or
indemnity as may be required by it to save it harmless, then, in the absence of
notice to the Trustee that such Certificate has been acquired by a bona fide
purchaser, the Trustee shall execute, authenticate and deliver, in exchange for
or in lieu of any such mutilated, destroyed, lost or stolen Certificate, a new
Certificate of the same Class and Percentage Interest. Upon the issuance of any
new Certificate under this Section, the Trustee may require the payment of a
sum sufficient to cover any tax or other governmental charge that may be
imposed in relation thereto and any other expenses (including the fees and
expenses of the Trustee) connected therewith. Any replacement Certificate
issued pursuant to this Section shall constitute complete and indefeasible
evidence of ownership in the Trust Fund, as if originally issued, whether or
not the lost, stolen or destroyed Certificate shall be found at any time.
Section 5.04. Persons Deemed Owners.
The Seller, the Servicer, the Trustee and any agent of any of them may
treat the person in whose name any Certificate is registered as the owner of
such Certificate for the purpose of receiving distributions pursuant to Section
4.01 and for all other purposes whatsoever, and neither the Seller, the
Servicer, the Trustee nor any agent of any of them shall be affected by notice
to the contrary.
ARTICLE VI
THE SERVICER
Section 6.01. Liability of the Servicer.
The Servicer shall be liable in accordance herewith only to the extent
of the obligations specifically imposed upon and undertaken by the Servicer
herein.
Section 6.02. Merger, Consolidation or Conversion of the Servicer.
The Servicer will keep in full effect its existence, rights and
franchises as a corporation under the laws of the state of its incorporation
except as permitted herein, and will obtain and preserve its qualification to
do business as a foreign corporation in each jurisdiction in which such
qualification is or shall be necessary to protect the validity and
enforceability of this Agreement, the Certificates or any of the Mortgage Loans
and to perform its duties under this Agreement.
Any Person into which the Servicer may be merged or consolidated, or
any corporation resulting from any merger, conversion or consolidation to which
the Servicer shall be a party, or any Person succeeding to the business of the
Servicer whether or not related to loan servicing, shall be the successor of
the Servicer hereunder, without the execution or filing of any paper or any
further act on the part of any of the parties hereto, anything herein to the
contrary notwithstanding; provided, however, that the successor or surviving
Person shall be an institution which is a ▇▇▇▇▇▇ ▇▇▇ or ▇▇▇▇▇▇▇ Mac approved
seller/servicer in good standing.
Section 6.03. Limitation on Liability of the Servicer and Others.
Neither the Servicer nor any of the officers, employees or agents of
the Servicer shall be under any liability to the Trust Fund or the
Certificateholders for any action taken or for refraining from the taking of
any action in good faith pursuant to this Agreement, or for errors in judgment
made in good faith; provided, however, that this provision shall not protect
the Servicer or any such person against any breach of warranties or
representations made herein, or failure to perform in any way its obligations
in compliance with any standard of care set forth in this Agreement; or any
liability which would otherwise be imposed by reason of negligence or any
breach of the terms and conditions of this Agreement. The Servicer and any
officer, employee or agent of the Servicer may rely in good faith on any
document of any kind prima facie properly executed and submitted by any Person
respecting any matters arising hereunder. The Servicer and any director, or
officer, employee or agent of the Servicer shall be indemnified and held
harmless by the Trust Fund against any loss, liability or expense incurred in
connection with any legal action relating to this Agreement or the Certificates
(including reasonable legal fees and disbursements of counsel), other than (a)
any loss, liability or expense related to Servicer's servicing obligations with
respect to any specific Mortgage Loan or Mortgage Loans (except as any such
loss, liability or expense shall be otherwise reimbursable pursuant to this
Agreement), or (b) any loss, liability or expense incurred by reason of
negligence in the performance of duties hereunder or by reason of reckless
disregard of obligations and duties hereunder. The Servicer shall not be under
any obligation to appear in, prosecute or defend any legal action which is not
incidental to its duties to service the Mortgage Loans in accordance with this
Agreement and which in its opinion may involve it in any expenses or liability;
provided, however, that the Servicer may, in its sole discretion, undertake any
such action which it may deem necessary or desirable with respect to this
Agreement and the rights and duties of the Certificateholders hereunder. In
such event, the reasonable legal expenses and costs of such action and any
liability resulting therefrom shall be expenses, costs and liabilities of the
Trust Fund, and the Servicer shall be entitled to be reimbursed therefor from
the Custodial Account as provided in Section 3.06.
Section 6.04. Limitation on Resignation of the Servicer.
The Servicer shall not resign from the obligations and duties hereby
imposed on it except upon a determination that its duties hereunder are no
longer permissible under applicable law. Any such determination permitting the
resignation of the Servicer shall be evidenced by an Opinion of Counsel (at the
expense of the resigning Servicer) to such effect delivered to the Trustee. No
such resignation shall become effective until the Trustee or a successor
servicer shall have assumed the Servicer's responsibilities, duties,
liabilities and obligations hereunder.
Section 6.05. Sale and Assignment of Servicing.
The Servicer may sell and assign its rights and delegate its duties
and obligations in their entirety as Servicer under this Agreement to an
affiliate of the Servicer to which all servicing of the Servicer is assigned so
long as such affiliate (a) shall be qualified to service mortgage loans for
▇▇▇▇▇▇ ▇▇▇ or ▇▇▇▇▇▇▇ Mac; (b) if it is intended that such affiliate be spun
off to the shareholders of the Servicer, shall have a net worth of not less
than $10,000,000; (c) shall be reasonably satisfactory to the Trustee (as
evidenced in writing signed by the Trustee); and (d) shall execute and deliver
to the Trustee an agreement, in form and substance reasonably satisfactory to
the Trustee, which contains an assumption by such affiliate of the due and
punctual performance and observance of each covenant and condition to be
performed or observed by it as servicer under this Agreement, from and after
the effective date of such agreement; (ii) each Rating Agency shall be given
prior written notice of the identity of the proposed successor to the Servicer
and each Rating Agency's rating of the Certificates in effect immediately prior
to such assignment, sale and delegation will not be downgraded or withdrawn as
a result of such assignment, sale and delegation, as evidenced by a letter to
such effect delivered to the Trustee; and (iii) the Servicer assigning and
selling the servicing shall deliver to the Trustee an Officer's Certificate and
an Opinion of Counsel, each stating that all conditions precedent to such
action under this Agreement have been completed and such action is permitted by
and complies with the terms of this Agreement. No such assignment or delegation
shall affect any liability of the Servicer arising prior to the effective date
thereof.
ARTICLE VII
DEFAULT
Section 7.01. Events of Default.
"Event of Default", wherever used herein, means any one of the
following events:
(i) any failure by the Servicer to deposit in the Certificate Account
or remit to the Trustee any payment (including Monthly Advances) required to be
made under the terms of this Agreement, which failure shall continue unremedied
for two (2) Business Days after the date upon which written notice of such
failure shall have been given to the Servicer by the Trustee or the Seller, or
to the Servicer and the Trustee by the Holders of Certificates entitled to at
least 25% of the Voting Rights; or
(ii) any failure on the part of the Servicer duly to observe or
perform in any material respect any other of the covenants or agreements on the
part of the Servicer contained in the Certificates or in this Agreement
(including any breach of the Servicer's representations and warranties pursuant
to Section 2.03 which materially and adversely affects the interests of the
Certificateholders) which continues unremedied for a period of 60 days after
the date on which written notice of such failure shall have been given to the
Servicer by the Trustee or the Seller, or to the Servicer and the Trustee by
the Holders of Certificates entitled to at least 25% of the Voting Rights; or
(iii) a decree or order of a court or agency or supervisory authority
having jurisdiction in an involuntary case under any present or future federal
or state bankruptcy, insolvency or similar law for the appointment of a
conservator or receiver or liquidator in any insolvency, bankruptcy,
readjustment of debt, marshaling of assets and liabilities or similar
proceedings, or for the winding-up or liquidation of its affairs, shall have
been entered against the Servicer and such decree or order shall have remained
in force undischarged or unstayed for a period of 60 consecutive days; or
(iv) the Servicer shall consent to the appointment of a conservator or
receiver or liquidator in any insolvency, bankruptcy, readjustment of debt,
marshaling of assets and liabilities or similar proceedings of or relating to
the Servicer or of or relating to all or substantially all of its property; or
(v) the Servicer shall admit in writing its inability to pay its debts
generally as they become due, file a petition to take advantage of or otherwise
voluntarily commence a case or proceeding under any applicable bankruptcy,
insolvency, reorganization or other similar statute, make an assignment for the
benefit of its creditors, or voluntarily suspend payment of its obligations; or
(vi) the Servicer attempts to assign its right to servicing
compensation hereunder or the Servicer attempts, without the consent of the
Trustee, to sell or otherwise dispose of all or substantially all of its
property or assets or to assign this Agreement or the servicing
responsibilities hereunder or to delegate its duties hereunder or any portion
thereof except as otherwise permitted herein; or
(vii) the Servicer ceases to be qualified to transact business in any
jurisdiction where it is currently so qualified, but only to the extent such
non-qualification materially and adversely affects the Servicer's ability to
perform its obligations hereunder;
then, and in each and every such case, so long as an Event of Default shall not
have been remedied, the Trustee may or, at the direction of Holders of
Certificates evidencing not less than 66 2/3% of the Voting Rights, the Trustee
shall by notice in writing to the Servicer (and to the Trustee if given by
Holders of Certificates), with a copy to the Rating Agencies, terminate all the
rights and obligations of the Servicer under this Agreement and in and to the
Mortgage Loans and the proceeds thereof without compensating the Servicer for
the same. On or after the receipt by the Servicer of such written notice, all
authority and power of the Servicer under this Agreement, whether with respect
to the Mortgage Loans or otherwise, shall pass to and be vested in the
successor appointed pursuant to Section 7.02. Upon written request from the
Trustee, the Servicer shall prepare, execute and deliver, any and all documents
and other instruments, place in such successor's possession all servicing files
related to the Mortgage Loans, and do or accomplish all other acts or things
necessary or appropriate to effect the purposes of such notice of termination,
whether to complete the transfer and endorsement or assignment of the Mortgage
Loans and related documents, or otherwise, at the Servicer's sole expense. The
Servicer agrees to cooperate with the Trustee and such successor in effecting
the termination of the Servicer's responsibilities and rights hereunder,
including, without limitation, the transfer to such successor for
administration by it of all cash amounts which shall at the time be credited by
the Servicer to the Custodial Account or Escrow Account or thereafter received
with respect to the Mortgage Loans or any REO Property. The Trustee shall not
be deemed to have breached any obligation hereunder as a result of a failure to
make or delay in making any distribution as and when required hereunder caused
by the failure of the Servicer to remit any amounts received on it or to
deliver any documents held by it with respect to the Mortgage Loans. For
purposes of this Section 7.01, the Trustee shall not be deemed to have
knowledge of an Event of Default unless a Responsible Officer of the Trustee
assigned to and working in the Trustee's corporate trust division has actual
knowledge thereof or unless notice of any event which is in fact such an Event
of Default is received by the Trustee and such notice references the
Certificates, the Trust Fund or this Agreement.
Section 7.02. Trustee to Act; Appointment of Successor.
Within 90 days of the time the Servicer receives a notice of
termination, the Trustee or its appointed agent shall be the successor in all
respects to the Servicer in its capacity as Servicer under this Agreement and
the transactions set forth or provided for herein and shall be subject
thereafter to all the responsibilities, duties, liabilities and limitations on
liabilities relating thereto placed on the Servicer including the obligation to
make Monthly Advances which have been or will be required to be made (except
for the responsibilities, duties and liabilities contained in Section 2.03) by
the terms and provisions hereof; and provided further, that any failure to
perform such duties or responsibilities caused by the Servicer's failure to
provide information required by Section 4.02 or 4.03 shall not be considered a
default by the Trustee hereunder; and provided further, that the Trustee shall
have no obligation whatsoever with respect to any liability (other than
advances deemed recoverable and not previously made) incurred by the Servicer
at or prior to the time of receipt by the Servicer of the notice or of the
Opinion of Counsel referred to in Section 7.01. As compensation therefor, the
Trustee shall be entitled to the Servicing Fee and all funds relating to the
Mortgage Loans which the Servicer would have been entitled to charge to the
Custodial Account and the Certificate Account if the Servicer had continued to
act hereunder. If the Trustee has become the successor to the Servicer in
accordance with Section 6.04 or this Section 7.02, then notwithstanding the
above, if the Trustee shall be unwilling to so act, or shall be unable to so
act, the Trustee may appoint, or petition a court of competent jurisdiction or
appoint, any established housing and home finance institution, which is also a
▇▇▇▇▇▇ Mae- or ▇▇▇▇▇▇▇ Mac-approved mortgage servicing institution, having a
net worth of not less than $10,000,000 as the successor to the Servicer
hereunder in the assumption of all or any part of the responsibilities, duties
or liabilities of the Servicer hereunder. Pending appointment of a successor to
the Servicer hereunder, the Trustee shall act in such capacity as herein above
provided. In connection with such appointment and assumption, the Trustee may
make such arrangements for the compensation of such successor out of payments
on Mortgage Loans as it and such successor shall agree; provided, however, that
no such compensation shall be in excess of that permitted the Servicer
hereunder. Each of the Seller, the Trustee and such successor shall take such
action, consistent with this Agreement, as shall be necessary to effectuate any
such succession.
The Trustee shall be entitled to be reimbursed by the Servicer for all
costs associated with the transfer of servicing, including any costs or
expenses associated with the complete transfer of all servicing data and the
completion, correction or manipulation of such servicing data as may be
required by the Trustee to correct any errors or insufficiencies in the
servicing data or otherwise to enable the Trustee to service the Mortgage Loans
properly and effectively. To the extent that the costs and expenses of the
Servicer related to any termination of the Servicer or appointment of a
successor Servicer are not fully and timely reimbursed by the Servicer, or the
terminated Servicer, the Trustee shall be entitled to reimbursement of such
costs and expenses from the Certificate Account.
Any successor, including the Trustee, to the Servicer shall maintain
in force during its term as servicer hereunder policies and fidelity bonds to
the same extent as the Servicer is so required pursuant to Section 3.19.
If the Trustee shall succeed to any duties of the Servicer with
respect to the Mortgage Loans as provided herein, it shall do so in a separate
capacity and not in its capacity as Trustee and, accordingly, the provisions of
Article X shall be inapplicable to the Trustee in its duties as successor
Servicer in the servicing of the Mortgage Loans (although such provisions shall
continue to apply to the Trustee in its capacity as Trustee), the provisions of
Article VI, however, shall apply to the Trustee in its capacity as successor
Servicer.
Section 7.03. Notification to Certificateholders.
(a) Upon any such termination or appointment of a successor to the
Servicer, the Trustee shall give prompt notice thereof to Certificateholders,
the Seller and to the Rating Agencies.
(b) Within 60 days after the occurrence of any Event of Default, the
Trustee shall transmit by mail to all Holders of Certificates notice of each
such Event of Default hereunder known to the Trustee, unless such Event of
Default shall have been cured or waived.
Section 7.04. List of Certificateholders.
Upon written request of three (3) or more Certificateholders of
record, for purposes of communicating with other Certificateholders with
respect to their rights under this Agreement, the Trustee will afford such
Certificateholders access during business hours to the most recent list of
Certificateholders held by the Trustee.
ARTICLE VIII
CONCERNING THE TRUSTEE
Section 8.01. Duties of Trustee
(a) The Trustee, prior to the occurrence of an Event of Default and
after the curing or waiver of all Events of Default which may have occurred,
undertakes to perform such duties and only such duties as are specifically set
forth in this Agreement as duties of the Trustee. If an Event of Default has
occurred and has not been cured or waived, the Trustee shall exercise such of
the rights and powers vested in it by this Agreement, and subject to Section
8.02(b) use the same degree of care and skill in their exercise, as a prudent
person would exercise under the circumstances in the conduct of his own
affairs, but only with respect to the defaulting Servicer.
(b) Upon receipt of all resolutions, certificates, statements,
opinions, reports, documents, orders or other instruments which are
specifically required to be furnished to the Trustee pursuant to any provision
of this Agreement, the Trustee shall examine them to determine whether they are
in the form required by this Agreement; provided, however, that the Trustee
shall not be responsible for the accuracy or content of any resolution,
certificate, statement, opinion, report, document, order or other instrument
furnished by the Servicer hereunder.
(c) The Trustee shall make monthly distributions and the final
distribution to the Certificateholders as provided in Sections 4.01 and 9.01
herein.
(d) No provision of this Agreement shall be construed to relieve the
Trustee from liability for its own negligent action, its own negligent failure
to act or its own willful misconduct; provided, however, that:
(i) Prior to the occurrence of an Event of Default, and after
the curing or waiver of all such Events of Default which may have
occurred, the duties and obligations of the Trustee shall be
determined solely by the express provisions of this Agreement, the
Trustee shall not be liable except for the performance of such duties
and obligations as are specifically set forth in this Agreement, no
implied covenants or obligations shall be read into this Agreement
against the Trustee and, in the absence of bad faith on the part of
the Trustee, the Trustee may conclusively rely, as to the truth of the
statements and the correctness of the opinions expressed therein, upon
any certificates or opinions furnished to the Trustee and conforming
to the requirements of this Agreement;
(ii) The Trustee shall not be liable in its individual capacity
for an error of judgment made in good faith by a Responsible Officer
or Responsible Officers of the Trustee, unless it shall be proved that
the Trustee was negligent in ascertaining the pertinent facts;
(iii) The Trustee shall not be liable with respect to any action
taken, suffered or omitted to be taken by it in good faith in
accordance with the directions of the Holders of Certificates
evidencing Voting Interests aggregating not less than 25% of the Trust
Fund, if such action or non-action relates to the time, method and
place of conducting any proceeding for any remedy available to the
Trustee, or exercising any trust or other power conferred upon the
Trustee, under this Agreement; and
(iv) The Trustee shall not be required to take notice or be
deemed to have notice or knowledge of any default or Event of Default
unless a Responsible Officer of the Trustee's Corporate Trust Office
shall have actual knowledge thereof. In the absence of such notice,
the Trustee may conclusively assume there is no such default or Event
of Default.
The Trustee shall not be required 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 there is
reasonable ground for believing that the repayment of such funds or adequate
indemnity against such risk or liability is not reasonably assured to it, and
none of the provisions contained in this Agreement shall in any event require
the Trustee to perform, or be responsible for the manner of performance of, any
of the obligations of the Servicer under this Agreement, except during such
time, if any, as the Trustee shall be the successor to, and be vested with the
rights, duties, powers and privileges of, the Servicer in accordance with the
terms of this Agreement.
(e) All funds received by the Trustee and required to be deposited in
the Certificate Account pursuant to this Agreement will be promptly so
deposited by the Trustee. The Trustee shall not be liable for interest or other
compensation on uninvested funds held under this Agreement.
(f) Except for those actions that the Trustee is required to take
hereunder, the Trustee shall have no obligation or liability to take any action
or to refrain from taking any action hereunder in the absence of written
direction as provided hereunder.
Section 8.02. Certain Matters Affecting The Trustee.
Except as otherwise provided in Section 8.01:
(i) The Trustee may rely and shall be protected in acting or
refraining from acting in reliance on any resolution, Officer's
Certificate, certificate of a Servicing Officer, certificate of
auditors or any other certificate, statement, instrument, opinion,
report, notice, request, consent, order, appraisal, bond or other
paper or document believed by it to be genuine and to have been signed
or presented by the proper party or parties;
(ii) The Trustee may consult with counsel and any advice of such
counsel or any Opinion of Counsel shall be full and complete
authorization and protection with respect to any action taken or
suffered or omitted by it hereunder in good faith and in accordance
with such advice or Opinion of Counsel;
(iii) The Trustee shall be under no obligation to exercise any
of the trusts or powers vested in it by this Agreement, other than its
obligation to give notices pursuant to 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
Certificateholders pursuant to the provisions of this Agreement,
unless such Certificateholders shall have offered to the 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 Trustee of the
obligation, upon the occurrence of an Event of Default of which a
Responsible Officer of the Trustee's Corporate Trust Office has actual
knowledge (which has not been cured or waived), subject to Section
7.02(c), 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 person would exercise under the circumstances
in the conduct of his own affairs;
(iv) The Trustee shall not be liable in its individual capacity
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;
(v) Prior to the occurrence of an Event of Default hereunder and
after the curing or waiver of all Events of Default which may have
occurred, the 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 Holders of Certificates evidencing Voting
Interests aggregating not less than 25% of the Trust Fund and provided
that the payment within a reasonable time to the 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 Trustee, reasonably
assured to the Trustee by the security afforded to it by the terms of
this Agreement. The Trustee may require reasonable indemnity against
such expense or liability as a condition to taking any such action.
The reasonable expense of every such examination shall be paid by the
Certificateholders requesting the investigation;
(vi) The Trustee may execute any of the trusts or powers
hereunder or perform any duties hereunder either directly or through
Affiliates, agents or attorneys; provided, however, that the Trustee
may not appoint any agent to perform its custodial functions with
respect to the Mortgage Files or paying agent functions under this
Agreement without the express written consent of the Servicer, which
consent will not be unreasonably withheld. The Trustee shall not be
liable or responsible for the misconduct or negligence of the
Trustee's agents and attorneys or a custodian or paying agent
appointed hereunder by the Trustee with due care and, when required,
wit the consent of the Servicer;
(vii) Should the Trustee deem the nature of any action required
on its part (other than a payment or transfer pursuant to Section
3.25) to be unclear, the Trustee may require prior to such action that
it be provided by the Servicer with reasonable further instructions;
(viii) The right of the Trustee to perform any discretionary act
enumerated in this Agreement shall not be construed as a duty, and the
Trustee shall not be accountable for other than its negligence or
willful misconduct in the performance of any such act;
(ix) The Trustee shall not be required to give any bond or
surety with respect to the execution of the trust created hereby or
the powers granted hereunder; and
(x) The Trustee shall have no duty to conduct any affirmative
investigation as to the occurrence of any condition requiring the
repurchase of any Mortgage Loan by EMC Mortgage Corporation pursuant
to this Agreement and/or the Mortgage Loan Purchase Agreement or the
eligibility of any Mortgage Loan for purposes of this Agreement.
Section 8.03. Trustee Not Liable for Certificates Or Mortgage Loans.
The recitals contained herein and in the Certificates (other than the
signature and countersignature of the Trustee on the Certificates) shall be
taken as the statements of the Seller, and the Trustee shall have no
responsibility for their correctness. The Trustee makes no representation as to
the validity or sufficiency of the Certificates (other than the signature and
countersignature of the Trustee on the Certificates) or of any Mortgage Loan
except as expressly provided in Section 2.02. The Trustee's signature and
countersignature (or countersignature of its agent) on the Certificates shall
be solely in its capacity as Trustee and shall not constitute the Certificates
an obligation of the Trustee in any other capacity. The Trustee shall not be
accountable for the use or application by the Seller of any of the Certificates
or of the proceeds of such Certificates, or for the use or application of any
funds paid to the Seller with respect to the Mortgage Loans. The Trustee shall
not be responsible for the legality or validity of this Agreement or any
document or instrument relating to this Agreement, the validity of the
execution of this Agreement or of any supplement hereto or instrument of
further assurance, or the validity, priority, perfection or sufficiency of the
security for the Certificates issued hereunder or intended to be issued
hereunder. The Trustee shall at no time have any responsibility or liability
for or with respect to the legality, validity and enforceability of any
Mortgage or any Mortgage Loan, or the perfection and priority of any Mortgage
or the maintenance of any such perfection and priority, or for or with respect
to the sufficiency of the Trust Fund or its ability to generate the payments to
be distributed to Certificateholders, under this Agreement. The Trustee shall
have no responsibility for filing any financing or continuation statement in
any public office at any time or to otherwise perfect or maintain the
perfection of any security interest or lien granted to it hereunder or to
record this Agreement.
Section 8.04. Trustee May Own Certificates.
The Trustee in its individual capacity or in any capacity other than
as Trustee hereunder may become the owner or pledgee of any Certificates with
the same rights it would have if it were not Trustee, and may otherwise deal
with the parties hereto.
Section 8.05. Fees And Expenses.
(a) The Trustee will be paid the Trustee's Fees each calendar month
from the Certificate Account, pursuant to Section 3.26. The Trust Fund will be
liable for the Trustee's expenses, including all reasonable out-of-pocket
expenses, disbursements and advances incurred or made by the Trustee in the
administration of the trusts hereunder as set forth in a fee letter sent by the
Trustee to the Seller (including the reasonable compensation, expenses and
disbursements of its counsel) except any such expense, disbursement or advance
as may arise from its negligence or willful misconduct or which is the
responsibility of the Certificateholders or the Servicer, and to the extent
that the funds in the Certificate Account are not sufficient to pay the
Trustee's Fees. Such compensation and reimbursement obligation shall not be
limited by any provision of law in regard to the compensation of a trustee of
an express trust.
(b) To the extent not otherwise indemnified against by the Servicer
hereunder, the Trust shall indemnify the Indemnified Persons for, and will hold
them harmless against, any loss, liability or expense incurred on their part,
arising out of, or in connection with, this Agreement and the Certificates,
including the costs and expenses (including reasonable legal fees and expenses)
of defending themselves against any such claim other than (i) any loss,
liability or expense related to such Indemnified Person's failure to perform
such Indemnified Person's duties in compliance with this Agreement (except as
any such loss, liability or expense shall be otherwise reimbursable pursuant to
this Agreement) and (ii) any loss, liability or expense incurred by reason of
such Indemnified Person's willful misfeasance, bad faith or negligence in the
performance of duties hereunder or by reason of reckless disregard of
obligations and duties hereunder. This indemnity shall survive the resignation
or removal of the Trustee and the termination of this Agreement.
Section 8.06. Eligibility Requirements For Trustee.
The Trustee and any successor Trustee shall during the entire duration
of this Agreement be a state bank or trust company or a national banking
association organized and doing business under the laws of such state or the
United States of America, authorized under such laws to exercise corporate
trust powers, having a combined capital and surplus and undivided profits of at
least $40,000,000 or, in the case of a successor Trustee, $50,000,000, subject
to supervision or examination by federal or state authority and, in the case of
a successor Trustee other than pursuant to Section 8.10, rated in one of the
two highest long-term debt categories of, or otherwise acceptable to, each of
the Rating Agencies. The Trustee shall not be an Affiliate of the Servicer,
unless the Trustee acts as successor Servicer hereunder. If the Trustee
publishes reports of condition at least annually, pursuant to law or to the
requirements of the aforesaid supervising or examining authority, then for the
purposes of this Section 8.06 the combined capital and surplus of such
corporation shall be deemed to be its total equity capital (combined capital
and surplus) as set forth in its most recent report of condition so published.
In case at any time the Trustee shall cease to be eligible in accordance with
the provisions of this Section 8.06, the Trustee shall resign immediately in
the manner and with the effect specified in Section 8.08.
Section 8.07. Insurance.
The Trustee, at its own expense, shall at all times maintain and keep
in full force and effect: (i) fidelity insurance, (ii) theft of documents
insurance and (iii) forgery insurance (which may be collectively satisfied by a
"Financial Institution Bond" and/or a "Bankers' Blanket Bond"). All such
insurance shall be in amounts, with standard coverage and subject to
deductibles, as are customary for insurance typically maintained by banks which
act as custodians for investor-owned mortgage pools. A certificate of an
officer of the Trustee as to the Trustee's compliance with this Section 8.07
shall be furnished to the Servicer or any Certificateholder upon reasonable
written request.
Section 8.08. Resignation And Removal Of The Trustee.
(a) The Trustee may at any time resign and be discharged from the
Trust hereby created by giving written notice thereof to the Servicer, with a
copy to the Rating Agencies. Upon receiving such notice of resignation, the
Servicer shall promptly appoint a successor Trustee by written instrument, in
triplicate, one copy of which instrument shall be delivered to each of the
resigning Trustee and the successor Trustee. If no successor Trustee shall have
been so appointed and have accepted appointment within 30 days after the giving
of such notice of resignation, the resigning Trustee may petition any court of
competent jurisdiction for the appointment of a successor Trustee.
(b) If at any time the Trustee shall cease to be eligible in
accordance with the provisions of Section 9.06 and shall fail to resign after
written request therefor by the Servicer or if at any time the Trustee shall
become incapable of acting, or shall be adjudged a bankrupt or insolvent, or a
receiver of the Trustee or of its property shall be appointed, or any public
officer shall take charge or control of the Trustee or of its property or
affairs for the purpose of rehabilitation, conservation or liquidation, then
the Servicer shall be entitled to remove the Trustee and appoint a successor
Trustee by written instrument, in triplicate, one copy of which instrument
shall be delivered to each of the Trustee so removed and the successor Trustee.
(c) The Holders of Certificates evidencing Voting Interests
aggregating not less than 51% of the Trust Fund may at any time remove the
Trustee and appoint a successor Trustee by written instrument or instruments
signed by such Holders or their attorneys-in-fact duly authorized, one complete
set of which instruments shall be delivered to the Servicer, the Trustee so
removed and the successor so appointed.
(d) No resignation or removal of the Trustee and appointment of a
successor Trustee pursuant to any of the provisions of this Section 9.08 shall
become effective except upon appointment of and acceptance of such appointment
by the successor Trustee as provided in Section 8.09.
Section 8.09. Successor Trustee.
(a) Any successor Trustee appointed as provided in Section 8.08 shall
execute, acknowledge and deliver to the Servicer and to its predecessor Trustee
an instrument accepting such appointment hereunder. The resignation or removal
of the predecessor Trustee shall then become effective and such successor
Trustee, without any further act, deed or conveyance, shall become fully vested
with all the rights, powers, duties and obligations of its predecessor
hereunder, with like effect as if originally named as Trustee herein. The
predecessor Trustee shall after payment of its outstanding fees and expenses
promptly deliver to the successor Trustee all assets and records of the Trust
held by it hereunder, and the Servicer and the predecessor Trustee shall
execute and deliver such instruments and do such other things as may reasonably
be required for more fully and certainly vesting and confirming in the
successor Trustee all such rights, powers, duties and obligations.
(b) No successor Trustee shall accept appointment as provided in this
Section 8.09 unless at the time of such acceptance such successor Trustee shall
be eligible under the provisions of Section 8.06.
(c) Upon acceptance of appointment by a successor Trustee as provided
in this Section 8.09, the successor Trustee shall mail notice of the succession
of such Trustee hereunder to all Certificateholders at their addresses as shown
in the Certificate Register and to the Rating Agencies. The Servicer shall pay
its Applicable Percentage of the cost of any mailing by the successor Trustee.
Section 8.10. Merger Or Consolidation Of Trustee.
Any state bank or trust company or national banking association into
which the Trustee may be merged or converted or with which it may be
consolidated or any state bank or trust company or national banking association
resulting from any merger, conversion or consolidation to which the Trustee
shall be a party, or any state bank or trust company or national banking
association succeeding to all or substantially all of the corporate trust
business of the Trustee, shall be the successor of the Trustee hereunder,
provided such state bank or trust company or national banking association shall
be eligible under the provisions of Section 8.06. Such succession shall be
valid without the execution or filing of any paper or any further act on the
part of any of the parties hereto, anything herein to the contrary
notwithstanding.
Section 8.11. Appointment Of Co-Trustee Or Separate Trustee.
(a) Notwithstanding any other provisions hereof, at any time, for the
purpose of meeting any legal requirements of any jurisdiction in which any part
of the Trust or property constituting the same may at the time be located, the
Servicer and the Trustee acting jointly shall have the power and shall execute
and deliver all instruments to appoint one or more Persons approved by the
Trustee and the Servicer to act as co-trustee or co-trustees, jointly with the
Trustee, or separate trustee or separate trustees, of all or any part of the
Trust, and to vest in such Person or Persons, in such capacity, such title to
the Trust, or any part thereof, and, subject to the other provisions of this
Section 8.11, such powers, duties, obligations, rights and trusts as the
Servicer and the Trustee may consider necessary or desirable.
(b) If the Servicer shall not have joined in such appointment within
15 days after the receipt by it of a written request so to do, or in case an
Event of Default with respect to the Servicer shall have occurred and be
continuing, the Trustee shall have the power to make such appointment without
the Servicer.
(c) No co-trustee or separate trustee hereunder shall be required to
meet the terms of eligibility as a successor Trustee under Section 8.06
hereunder and no notice to Certificateholders of the appointment of
co-trustee(s) or separate trustee(s) shall be required under Section 8.08
hereof.
(d) In the case of any appointment of a co-trustee or separate trustee
pursuant to this Section 8.11, all rights, powers, duties and obligations
conferred or imposed upon the Trustee and required to be conferred on such
co-trustee shall be conferred or imposed upon and exercised or performed by the
Trustee and such separate trustee or co-trustee jointly, except to the extent
that under any law of any jurisdiction in which any particular act or acts are
to be performed (whether as Trustee hereunder or as successor to the Servicer
hereunder), the 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 or any portion thereof in any such
jurisdiction) shall be exercised and performed by such separate trustee or
co-trustee at the direction of the Trustee.
(e) Any notice, request or other writing given to the 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 VIII. 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
Trustee or separately, as may be provided therein, subject to all the
provisions of this Agreement, specifically including every provision of this
Agreement relating to the conduct of, affecting the liability of, or affording
protection to, the Trustee. Every such instrument shall be filed with the
Trustee.
(f) To the extent not prohibited by law, any separate trustee or
co-trustee may, at any time, request the Trustee, its agent or
attorney-in-fact, with full power and authority, to do any lawful act under or
with respect to this Agreement 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 Trustee, to the extent permitted by law, without the
appointment of a new or successor Trustee.
(g) No trustee under this Agreement shall be personally liable by
reason of any act or omission of another trustee under this Agreement. The
Servicer and the Trustee acting jointly may at any time accept the resignation
of or remove any separate trustee or co-trustee, except that following the
occurrence of any Event of Default which has not been cured, the Trustee acting
alone may accept the resignation of or remove any separate trustee or
co-trustee.
Section 8.12. Servicer Shall Provide Information As Reasonably
Required.
The Servicer shall furnish to the Trustee, during the term of this
Agreement, such periodic, special, or other reports or information (and in such
electronic format or other means acceptable to the Trustee) as may reasonably
be requested by the Trustee in order to fulfill its duties and obligations
under this Agreement.
Section 8.13. Federal Information Returns and Reports to
Certificateholders.
(a) For Federal income tax purposes, the taxable year of the REMIC
shall be a calendar year and the Trustee shall maintain or cause the
maintenance of the books of each REMIC on the accrual method of accounting.
(b) The Trustee shall prepare and file or cause to be filed with the
Internal Revenue Service Federal tax information returns or elections required
to be made by the Trustee hereunder with respect to any REMIC and the
Certificates containing such information and at the times and in the manner as
may be required by the Code or applicable Treasury regulations, and shall
furnish to each Holder of Certificates at any time during the calendar year for
which such returns or reports are made such statements or information at the
times and in the manner as may be required thereby. In connection with the
foregoing, the Trustee shall provide the name and address of the person who can
be contacted to obtain information required to be reported to the holders of
regular interests in the REMIC (the "REMIC Reporting Agent") as required by IRS
Form 8811. The Trustee shall make the elections to treat the Trust Fund as a
REMIC (which election shall apply to the taxable period ending December 31,
1999 and each calendar year thereafter) in such manner as the Code or
applicable Treasury regulations may prescribe. The Trustee shall sign all tax
information returns filed pursuant to this Section and any other returns as may
be required by the Code, and in doing so shall rely entirely upon, and shall
have no liability for information provided by, or calculations provided by, the
Seller or the Servicer. The Holder of the Residual Certificate is hereby
designated as the "Tax Matters Person" (within the meaning of Treas. Reg.
▇▇.▇▇.. 1.860F-4(d)) for the REMIC. The Trustee is hereby designated and
appointed as the agent of each such Tax Matters Person. Any Holder of a
Residual Certificate will by acceptance thereof appoint the Trustee as agent
and attorney-in-fact for the purpose of acting as Tax Matters Person for the
REMIC during such time as the Trustee does not own any such Residual
Certificate. In the event that the Code or applicable Treasury regulations
prohibit the Trustee from signing tax or information returns or other
statements, or the Trustee from acting as Tax Matters Person (as an agent or
otherwise), the Trustee shall take whatever action that in its sole good faith
judgment is necessary for the proper filing of such information returns or for
the provision of a tax matters person, including designation of the Holder of a
Residual Certificate to sign such returns or act as tax matters person. Each
Holder of a Residual Certificate shall be bound by this Section.
(c) The Trustee shall provide upon request such information (which
shall be provided upon reasonable compensation to the Trustee) as required in
Section 860D(a)(6)(B) of the Code to the Internal Revenue Service, to any
Person purporting to transfer a Residual Certificate to a Person other than a
transferee permitted by Section 5.05(b), and to any regulated investment
company, real estate investment trust, common trust fund, partnership, trust,
estate, organization described in Section 1381 of the Code, or nominee holding
an interest in a pass-through entity described in Section 860E(e)(6) of the
Code, any record holder of which is not a transferee permitted by Section
5.02(e) (or which is deemed by statute to be an entity with a disqualified
member).
(d) The Trustee shall prepare and file or cause to be filed any state
income tax returns required under Applicable State Law with respect to the
REMIC or the Trust Fund.
ARTICLE IX
TERMINATION
Section 9.01. Termination Upon Repurchase or Liquidation of
All Mortgage Loans or upon Purchase of
Certificates.
(a) Subject to Section 9.02, the respective obligations and
responsibilities of the Seller, the Servicer and the Trustee created hereby
(other than the obligations of the Servicer to provide for and the Trustee to
make payments to Certificateholders as hereafter set forth) shall terminate
upon payment to the Certificateholders of all amounts held by or on behalf of
the Trustee and required to be paid to them hereunder following the earlier to
occur of (i) the repurchase by the Seller or its designee (or if the Seller or
its designee does not exercise such option, the Servicer or its designee) of
all Mortgage Loans and each REO Property in respect thereof remaining in the
Trust Fund at a price equal to the greater of (a) 100% of the unpaid principal
balance of each Mortgage Loan (other than one as to which a REO Property was
acquired) on the day of repurchase together with accrued interest on such
unpaid principal balance at the Net Mortgage Rate to the first day of the month
in which the proceeds of such repurchase are to be distributed, plus the
appraised value of any REO Property (but not more than the unpaid principal
balance of the related Mortgage Loan, together with accrued interest on that
balance at the Net Mortgage Rate to the first day of the month such repurchase
price is distributed), less the good faith estimate of the Servicer of
liquidation expenses to be incurred in connection with its disposal thereof,
such appraisal to be conducted by an appraiser mutually agreed upon by the
Servicer and the Trustee at the expense of the entity terminating the Trust
Fund, and (b) the aggregate fair market value of all of the assets of the Trust
Fund (as determined by the Servicer and the Trustee, as of the close of
business on the third Business Day next preceding the date upon which notice of
any such termination is furnished to Certificateholders pursuant to Section
9.01(b)), and (ii) the final payment or other liquidation (or any Monthly
Advance with respect thereto) of the last Mortgage Loan remaining in the Trust
Fund (or the disposition of all REO Property in respect thereof); provided,
however, that clauses (i) and (ii) of this paragraph will be paid only to the
extent that there is enough cash to make such payments; provided, further, that
in no event shall the trust created hereby continue beyond the expiration of 21
years from the death of the last survivor of the descendants of ▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇▇, the late ambassador of the United States to the Court of St. ▇▇▇▇▇,
living on the date hereof. In the case of any repurchase by the Servicer
pursuant to clause (i), the Servicer shall include in such repurchase price the
amount of any Monthly Advances that will be reimbursed to the Servicer pursuant
to Section 3.06(ii) and the Servicer shall exercise reasonable efforts to
cooperate fully with the Trustee in effecting such repurchase and the transfer
of the Mortgage Loans and related Mortgage Files and related records to the
Servicer.
The right of the Seller or its designee or the Servicer or its
designee to repurchase all Mortgage Loans pursuant to (i) above shall be
conditioned upon the aggregate Stated Principal Balance of such Mortgage Loans
at the time of any such repurchase aggregating an amount equal to or less than
10% in the case of the Seller or its designee, or 5%, in the case of the
Servicer or its designee, of the aggregate Stated Principal Balance of the
Mortgage Loans at the Cut-off Date. The right of the Servicer or its designee
to repurchase all Mortgage Loans is subject to the Servicer or its designee
receiving the consent of the Seller. If such right is exercised, the Seller or
the Servicer or their respective designee upon such repurchase shall provide to
the Trustee, notice of such exercise prior to the Determination Date in the
month preceding the month of purchase and the certification required by Section
3.13.
(b) Notice of any termination, specifying the Distribution Date upon
which the Certificateholders may surrender their Certificates to the Trustee
for payment of the final distribution and cancellation, shall be given promptly
by the Trustee by letter to the Certificateholders mailed (a) in the event such
notice is given in connection with the Seller or Servicer's election to
repurchase, not earlier than the 15th day and not later than the 25th day of
the month next preceding the month of such final distribution or (b) otherwise
during the month of such final distribution on or before the Determination Date
in such month, in each case specifying (i) the Distribution Date upon which
final payment of the Certificates will be made upon presentation and surrender
of Certificates at the office of the Trustee therein designated, (ii) the
amount of any such final payment, (iii) that no interest shall accrue in
respect of the Certificates from and after the Interest Accrual Period relating
to the final Distribution Date therefor and (iv) that the Record Date otherwise
applicable to such Distribution Date is not applicable, payments being made
only upon presentation and surrender of the Certificates at the office of the
Trustee therein specified. In the event such notice is given in connection with
the Seller, Servicer or their respective designee's election to repurchase, the
Seller, Servicer or their respective designee shall deliver to the Trustee for
deposit in the Certificate Account on the Business Day immediately preceding
the Distribution Date specified in such notice an amount equal to the
above-described repurchase price payable out of its own funds. Upon
certification to the Trustee by a Servicing Officer, following such final
deposit, the Trustee shall promptly release the Mortgage Files as directed by
the Seller or Servicer for the remaining Mortgage Loans, and the Trustee shall
execute all assignments, endorsements and other instruments required by the
Seller or Servicer as being necessary to effectuate such transfer. Immediately
following the deposit of funds in trust hereunder in respect of the
Certificates, the Trust Fund shall terminate.
Upon presentation and surrender of the Certificates by the
Certificateholders, the Trustee shall distribute to the Certificateholders to
each Certificateholder so presenting and surrendering its Certificates the
amount otherwise distributable on such Distribution Date in accordance with
Section 4.01 in respect of the Certificates so presented and surrendered.. Any
funds not distributed to any Holder or Holders of Certificates being retired on
such Distribution Date because of the failure of such Holder or Holders to
tender their Certificates shall, on such date, be set aside and held in trust
and credited to the account of the appropriate non-tendering Holder or Holders.
In the event that all of the Certificateholders shall not surrender
their Certificates for cancellation within six months after the time specified
in the above-mentioned notice, the Trustee shall give a second notice to the
remaining Certificateholders to surrender their Certificates for cancellation
and receive the final distribution with respect thereto. If within six months
after the second notice all of the Certificates shall not have been surrendered
for cancellation, the Trustee shall take reasonable steps as directed by the
Seller, or appoint an agent to take reasonable steps, to contact the remaining
Certificateholders concerning surrender of their Certificates. The costs and
expenses of maintaining the funds in trust and of contacting such
Certificateholders shall be paid out of the assets remaining in trust for such
Certificateholders. If within nine months after the second notice all the
Certificates shall not have been surrendered for cancellation, the Residual
Certificateholders shall be entitled to all unclaimed funds and other assets
which remain subject hereto.
Section 9.02. Additional Termination Requirements.
(a) In the event the Seller or the Servicer repurchases all the
Mortgage Loans and each REO Property as provided in Section 9.01, the Trust
Fund shall be terminated in accordance with the following additional
requirements:
(i) The Seller or the Servicer shall specify the first day in
the 90-day liquidation period in a statement attached to the final Tax
Return of the REMIC created hereunder pursuant to Treasury regulation
Section 1.860F-1 and shall satisfy all requirements of a qualified
liquidation under Section 860F of the Code and any regulations
thereunder, as evidenced by an Opinion of Counsel obtained at the
expense of the Seller or the Servicer;
(ii) During such 90-day liquidation period, and at or prior to
the time of making of the final payment on the Certificates, the
Trustee shall sell all of the assets of the Trust Fund to the Seller
or the Servicer for cash; and
(iii) At the time of the making of the final payment on the
Certificates, the Trustee shall distribute or credit, or cause to be
distributed or credited, to the Holders of the Residual Certificates
all cash on hand in the Trust Fund (other than cash retained to meet
claims), and the Trust Fund shall terminate at that time.
(b) Each Holder of a Certificate and the Trustee hereby irrevocably
approves and appoints the Servicer as its attorney-in-fact to adopt a plan of
complete liquidation for the Trust Fund at the expense of the Trust Fund in
accordance with the terms and conditions of this Agreement.
ARTICLE X
REMIC PROVISIONS
Section 10.01. REMIC Administration.
(a) The Trustee shall make REMIC elections as set forth in the
Preliminary Statement under the Code and, if necessary, under applicable state
law. Such elections will be made on Form 1066 or other appropriate federal tax
or information return or any appropriate state return for the taxable year
ending on the last day of the calendar year in which the Certificates are
issued. The regular interests and the residual interest in each REMIC shall be
as designated in the Preliminary Statement. The Trustee shall not permit the
creation of any "interests" in the Trust Fund (within the meaning of Section
860G of the Code) other than the interests designated in the Preliminary
Statement. The Trustee will apply for an Employee Identification Number from
the Internal Revenue Service via Form SS-4 or any other method for all tax
entities.
(b) The Closing Date is hereby designated as the "Startup Day" of the
Trust Fund within the meaning of Section 860G(a)(9) of the Code.
(c) The Trustee shall be reimbursed for any and all expenses relating
to any tax audit of any REMIC created hereunder (including, but not limited to,
any professional fees or any administrative or judicial proceedings with
respect to any REMIC created hereunder that involve the Internal Revenue
Service or state tax authorities) including the expense of obtaining any
tax-related Opinion of Counsel, except as specified herein. The Trustee's right
of reimbursement shall not apply to expenses incurred as a result of the
Trustee's gross negligence in performing its duties pursuant to this Article X.
The Trustee, as agent for the tax matters person of each REMIC created
hereunder, shall (i) act on behalf of each REMIC created hereunder in relation
to any tax matter or controversy involving each REMIC created hereunder and
(ii) represent each REMIC in any administrative or judicial proceeding relating
to an examination or audit by any governmental taxing authority with respect
thereto. The holder of the largest Percentage Interest of the Residual
Certificate shall be designated, in the manner provided under Treasury
regulations section 1.860F-4(d) and Treasury regulations section
301.6231(a)(7)-I, as the tax matters person of each REMIC created hereunder. By
their acceptance thereof, the holder of the largest Percentage Interest of the
Residual Certificate hereby agrees to irrevocably appoint the Trustee or an
affiliate as its agent to perform all of the duties of the tax matters person
for each REMIC created hereunder.
(d) The Trustee shall prepare, sign and file all of the Tax Returns in
respect of each REMIC created hereunder. The expenses of preparing and filing
such returns shall be borne by the Trustee without any right of reimbursement
therefor.
(e) The Trustee shall perform on behalf of each REMIC created
hereunder all reporting and other tax compliance duties that are the
responsibility of each REMIC under the Code, the REMIC Provisions or other
compliance guidance issued by the Internal Revenue Service or any state or
local taxing authority. Among its other duties, as required by the Code, the
REMIC Provisions or other such compliance guidance, the Trustee shall provide
(i) to any Transferor of a Residual Certificate such information as is
necessary for the application of any tax relating to the transfer of a Residual
Certificate to any Person who is not a Permitted Transferee, (ii) to the
Certificateholders such information or reports as are required by the Code or
the REMIC Provisions including reports relating to interest, original issue
discount and market discount or premium (using the Prepayment Assumption as
required) and (iii) to the Internal Revenue Service the name, title, address
and telephone number of the person who will serve as the representative of each
REMIC created hereunder. The Servicer shall provide on a timely basis to the
Trustee such information with respect to the assets of each REMIC created
hereunder, including, without limitation, the Mortgage Loans, as is in its
possession and reasonably required by the Trustee to enable it to perform its
obligations under this subsection. In addition, the Seller shall provide or
cause to be provided to the Trustee, within ten (10) days after the Closing
Date, all information or data that the Trustee reasonably determines to be
relevant for tax purposes as to the valuations and issue prices of the
Certificates, including, without limitation, the price, yield, prepayment
assumption and projected cash flow of the Certificates.
(f) The Trustee shall take such action and shall cause each REMIC
created hereunder to take such action as shall be necessary to create or
maintain the status thereof as a REMIC under the REMIC Provisions (and the
Servicer shall assist it, to the extent reasonably requested by it). The
Trustee shall not take any action, cause any REMIC created hereunder to take
any action or fail to take (or fail to cause to be taken) any action that,
under the REMIC Provisions, if taken or not taken, as the case may be, could
(i) endanger the status of the Trust Fund as a REMIC or (ii) result in the
imposition of a tax upon any REMIC created hereunder (including but not limited
to the tax on prohibited transactions as defined in Section 860F(a)(2) of the
Code and the tax on contributions to a REMIC set forth in Section 860G(d) of
the Code) (either such event, an "Adverse REMIC Event") unless the Trustee has
received an Opinion of Counsel, addressed to the Trustee (at the expense of the
party seeking to take such action but in no event at the expense of the
Trustee) to the effect that the contemplated action will not, with respect to
each REMIC created hereunder, endanger such status or result in the imposition
of such a tax, nor shall the Servicer take or fail to take any action (whether
or not authorized hereunder) as to which the Trustee has advised it in writing
that it has received an Opinion of Counsel to the effect that an Adverse REMIC
Event could occur with respect to such action. In addition, prior to taking any
action with respect to any REMIC or the assets of any REMIC, or causing any
REMIC to take any action, which is not expressly permitted under the terms of
this Agreement, the Servicer will consult with the Trustee or its designee, in
writing, with respect to whether such action could cause an Adverse REMIC Event
to occur with respect to any REMIC created hereunder, and the Servicer shall
not take any such action or cause any REMIC to take any such action as to which
the Trustee has advised it in writing that an Adverse REMIC Event could occur.
The Trustee may consult with counsel to make such written advice, and the cost
of same shall be borne by the party seeking to take the action not permitted by
this Agreement, but in no event shall such cost be an expense of the Trustee.
At all times as may be required by the Code, the Trustee will ensure that
substantially all of the assets of each REMIC created hereunder will consist of
"qualified mortgages" as defined in Section 860G(a)(3) of the Code and
"permitted investments" as defined in Section 860G(a)(5) of the Code.
(g) In the event that any tax is imposed on "prohibited transactions"
of any REMIC created hereunder created hereunder as defined in Section
860F(a)(2) of the Code, on the "net income from foreclosure property" of any
REMIC created hereunder as defined in Section 860G(c) of the Code, on any
contributions to any REMIC created hereunder after the Startup Day therefor
pursuant to Section 860G(d) of the Code, or any other tax is imposed by the
Code or any applicable provisions of state or local tax laws, such tax shall be
charged (i) to the Trustee pursuant to Tax Indemnification provisions hereof,
if such tax arises out of or results from a breach by the Trustee of any of its
obligations under this Article, (ii) to the Servicer pursuant to Section Tax
Indemnification Provisions hereof, if such tax arises out of or results from a
breach by the Servicer of any of its obligations under Article III or this
Article X, or otherwise, and (iii) if clauses (i) and (ii) do not apply,
against amounts on deposit in the Distribution Account and shall be paid by
withdrawal therefrom.
(h) The Trustee and the Servicer shall, for federal income tax
purposes, maintain books and records with respect to each REMIC created
hereunder on a calendar year and on an accrual basis.
(i) Following the Startup Day, the Trustee shall not accept any
contributions of assets to any REMIC created hereunder other than in connection
with any Qualified Substitute Mortgage Loan delivered in accordance with
Section 2.02 unless it shall have received an Opinion of Counsel to the effect
that the inclusion of such assets in any such REMIC will not cause any REMIC
created hereunder to fail to qualify as a REMIC at any time that any
Certificates are outstanding or subject any REMIC created hereunder to any tax
under the REMIC Provisions or other applicable provisions of federal, state and
local law or ordinances.
(j) Neither the Trustee nor the Servicer shall enter into any
arrangement by which any REMIC created hereunder will receive a fee or other
compensation for services nor permit any REMIC created hereunder to receive any
income from assets other than "qualified mortgages" as defined in Section
860G(a)(3) of the Code or "permitted investments" as defined in Section
860G(a)(5) of the Code.
Section 10.02. Prohibited Transactions and Activities.
None of the Seller, the Servicer or the Trustee shall sell, dispose of
or substitute for any of the Mortgage Loans (except in connection with (i) the
foreclosure of a Mortgage Loan, including but not limited to, the acquisition
or sale of a Mortgaged Property acquired by deed in lieu of foreclosure, (ii)
the bankruptcy of the Trust Fund (iii) the termination of the Trust Fund
pursuant to Article IX of this Agreement, (iv) a substitution pursuant to
Article II of this Agreement or (v) a purchase of Mortgage Loans pursuant to
Article II or III of this Agreement), nor acquire any assets for the Trust Fund
(other than a REO Property acquired in respect of a defaulted Mortgage Loan),
nor sell or dispose of any investments in the Custodial Account for gain, nor
accept any contributions to the Trust Fund after the Closing Date (other than a
Qualified Substitute Mortgage Loan delivered in accordance with Section 2.02 or
2.04), unless it has received an Opinion of Counsel, addressed to the Trustee
(at the expense of the party seeking to cause such sale, disposition,
substitution, acquisition or contribution but in no event at the expense of the
Trustee) that such sale, disposition, substitution, acquisition or contribution
will not (a) affect adversely the status of any REMIC created hereunder as a
REMIC or (b) cause any REMIC created hereunder to be subject to a tax on
"prohibited transactions" or "contributions" pursuant to the REMIC Provisions.
Section 10.03. Tax Indemnification.
(a) The Trustee agrees to indemnify the Trust Fund, the Seller and the
Servicer for any taxes and costs including, without limitation, any reasonable
attorneys fees imposed on or incurred by the Trust Fund, the Seller or the
Servicer, as a result of a breach of the Trustee's covenants set forth in this
Article X.
(b) The Servicer agrees to indemnify the Trust Fund, the Seller and
the Trustee for any taxes and costs, including without limitation, any
reasonable attorneys fees imposed on or incurred by the Trust Fund, the Seller
or the Trustee, as a result of the breach of the Servicer's covenants set forth
in Article III or this Article X.
ARTICLE XI
MISCELLANEOUS PROVISIONS
Section 11.01. Amendment.
This Agreement may be amended from time to time by the Seller, the
Servicer and the Trustee, without the consent of any of the Certificateholders,
(i) to cure any ambiguity, (ii) to correct or supplement any provisions herein
which may be defective or inconsistent with any other provisions herein or to
correct any error, (iii) to amend this Agreement in any respect subject to the
provisions in clauses (A) and (B) below, or (iv) if such amendment, as
evidenced by an Opinion of Counsel (provided by the Person requesting such
amendment) delivered to the Trustee, is reasonably necessary to comply with any
requirements imposed by the Code or any successor or amendatory statute or any
temporary or final regulation, revenue ruling, revenue procedure or other
written official announcement or interpretation relating to federal income tax
laws or any proposed such action which, if made effective, would apply
retroactively to the Trust Fund at least from the effective date of such
amendment; provided that such action (except any amendment described in (iv)
above) shall not adversely affect in any material respect the interests of any
Certificateholder (other than Certificateholders who shall consent to such
amendment), as evidenced by (A) an Opinion of Counsel (provided by the Person
requesting such amendment) delivered to the Trustee, and (B) a letter from each
Rating Agency, confirming that such amendment shall not cause it to lower its
rating on any of the Certificates.
This Agreement may also be amended from time to time by the Seller,
the Servicer and the Trustee and Holders of Certificates entitled to at least
66-2/3% of the Voting Rights for the purpose of adding any provisions to or
changing in any manner or eliminating any of the provisions of this Agreement
or of modifying in any manner the rights of the Holders of Certificates;
provided, however, that no such amendment shall (i) reduce in any manner the
amount of, or delay the timing of, payments received on Mortgage Loans which
are required to be distributed on any Certificate without the consent of the
Holder of such Certificate, (ii) adversely affect in any material respect the
interests of the Holders of any Class of Certificates in a manner other than as
described in (i), without the consent of the Holders of Certificates of such
Class evidencing at least 66-2/3% of the Voting Rights of such Class, or (iii)
reduce the aforesaid percentage of Certificates the Holders of which are
required to consent to any such amendment, without the consent of the Holders
of all Certificates then outstanding. Notwithstanding any other provision of
this Agreement, for purposes of the giving or withholding of consents pursuant
to this Section 11.01, Certificates registered in the name of the Seller or the
Servicer or any affiliate thereof shall be entitled to Voting Rights with
respect to matters described in (i), (ii) and (iii) of this paragraph.
Notwithstanding any contrary provision of this Agreement, the Trustee
shall not consent to any amendment to this Agreement unless it shall have first
received an Opinion of Counsel (provided by the Person requesting such
amendment) to the effect that such amendment will not result in the imposition
of any tax on the Trust Fund pursuant to the REMIC Provisions or cause any
REMIC to fail to qualify as a REMIC at any time that any Certificates are
outstanding.
Promptly after the execution of any such amendment the Trustee shall
furnish a copy of such amendment or a written statement describing the
amendment to each Certificateholder, with a copy to the Rating Agencies.
It shall not be necessary for the consent of Certificateholders under
this Section 11.01 to approve the particular form of any proposed amendment,
but it shall be sufficient if such consent shall approve the substance thereof.
The manner of obtaining such consents and of evidencing the authorization of
the execution thereof by Certificateholders shall be subject to such reasonable
regulations as the Trustee may prescribe.
Prior to executing any amendment pursuant to this Section, the Trustee
shall be entitled to receive an Opinion of Counsel (provided by the Person
requesting such amendment) to the effect that such amendment is authorized or
permitted by this Agreement. The cost of an Opinion of Counsel delivered
pursuant to this Section 11.01 shall be an expense of the party requesting such
amendment, but in any case shall not be an expense of the Trustee.
The Trustee may, but shall not be obligated to enter into any
amendment pursuant to this Section that affects its rights, duties and
immunities under this Agreement or otherwise.
Section 11.02. Recordation of Agreement; Counterparts.
To the extent permitted by applicable law, this Agreement is subject
to recordation in all appropriate public offices for real property records in
all the counties or other comparable jurisdictions in which any or all of the
properties subject to the Mortgages are situated, and in any other appropriate
public recording office or elsewhere, such recordation to be effected by the
Servicer at the expense of the Certificateholders, but only upon direction of
the Trustee accompanied by an Opinion of Counsel to the effect that such
recordation materially and beneficially affects the interests of the
Certificateholders.
For the purpose of facilitating the recordation of this Agreement as
herein provided and for other purposes, this Agreement may be executed
simultaneously in any number of counterparts, each of which counterparts shall
be deemed to be an original, and such counterparts shall constitute but one and
the same instrument.
Section 11.03. Limitation on Rights of Certificateholders.
The death or incapacity of any Certificateholder shall not operate to
terminate this Agreement or the Trust Fund, nor entitle such
Certificateholder's legal representatives or heirs to claim an accounting or to
take any action or proceeding in any court for a partition or winding up of the
Trust Fund, nor otherwise affect the rights, obligations and liabilities of the
parties hereto or any of them.
No Certificateholder shall have any right to vote (except as expressly
provided for herein) or in any manner otherwise control the operation and
management of the Trust Fund, or the obligations of the parties hereto, nor
shall anything herein set forth, or contained in the terms of the Certificates,
be construed so as to constitute the Certificateholders from time to time as
partners or members of an association; nor shall any Certificateholder be under
any liability to any third party by reason of any action taken by the parties
to this Agreement pursuant to any provision hereof.
No Certificateholder shall have any right by virtue of any provision
of this Agreement to institute any suit, action or proceeding in equity or at
law upon or under or with respect to this Agreement, unless such Holder
previously shall have given to the Trustee a notice of an Event of Default, or
of a default by the Seller or the Trustee in the performance of any obligation
hereunder, and of the continuance thereof, as hereinbefore provided, and unless
also the Holders of Certificates entitled to at least 51% of the Voting Rights
shall have made written request upon the Trustee to institute such action, suit
or proceeding in its own name as Trustee hereunder and shall have offered to
the Trustee such reasonable indemnity as it may require against the costs,
expenses and liabilities to be incurred therein or thereby, and the Trustee,
for 60 days after its receipt of such notice, request and offer of indemnity,
shall have neglected or refused to institute any such action, suit or
proceeding. It is understood and intended, and expressly covenanted by each
Certificateholder with every other Certificateholder and the Trustee, that no
one or more Holders of Certificates shall have any right in any manner whatever
by virtue of any provision of this Agreement to affect, disturb or prejudice
the rights of the Holders of any other of such Certificates, or to obtain or
seek to obtain priority over or preference to any other such Holder, or to
enforce any right under this Agreement, except in the manner herein provided
and for the equal, ratable and common benefit of all Certificateholders. For
the protection and enforcement of the provisions of this Section, each and
every Certificateholder and the Trustee shall be entitled to such relief as can
be given either at law or in equity.
Section 11.04. Governing Law.
This Agreement and the Certificates shall be construed in accordance
with the laws of the State of New York and the obligations, rights and remedies
of the parties hereunder shall be determined in accordance with such laws.
Section 11.05. Notices.
All demands, notices and direction hereunder shall be in writing and
shall be deemed effective upon receipt when delivered to (a) in the case of the
Seller, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇▇▇, Attention: Vice
President-Servicing with a copy to ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, Esq. at the same
address, or such other address as may hereafter be furnished to the other
parties hereto in writing; (b) in the case of the Servicer, GMAC Mortgage
Corporation, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention:
President, or such other address as may hereafter be furnished to other parties
in writing); (c) in the case of the Trustee, ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇ with a copy to at its Corporate Trust Office, or such
other address as may hereafter be furnished to the other parties hereto in
writing; or (d) in the case of the Rating Agencies, ▇▇▇▇▇'▇ Investors Service,
Inc., ▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention: Residential
Pass-Through Monitoring, or such other address as may hereafter be furnished to
the other parties hereto; and Fitch IBCA, Inc., ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇
▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention: Residential Mortgage Department, or such other
address as may hereafter be furnished to the other parties hereto;. Any notice
required or permitted to be mailed to a Certificateholder shall be given by
first class mail, postage prepaid, at the address of such Holder as shown in
the Certificate Register. Any notice so mailed within the time prescribed in
this Agreement shall be conclusively presumed to have been duly given, whether
or not the Certificateholder receives such notice.
Section 11.06. Severability of Provisions.
If any one or more of the covenants, agreements, provisions or terms
of this Agreement shall be for any reason whatsoever held invalid, then such
covenants, agreements, provisions or terms shall be deemed severable from the
remaining covenants, agreements, provisions or terms of this Agreement and
shall in no way affect the validity or enforceability of the other provisions
of this Agreement, of the Certificates.
Section 11.07. Successors and Assigns; Third Party Beneficiary.
The provisions of this Agreement shall be binding upon and inure to
the benefit of the respective successors and assigns of the parties hereto, and
all such provisions shall inure to the benefit of the Trustee and the
Certificateholders.
Section 11.08. Article and Section Headings.
The article and section headings herein are for convenience of
reference only, and shall not limit or otherwise affect the meaning hereof.
Section 11.09. Notice to Rating Agencies.
The Trustee shall use its best efforts to promptly provide notice to
each Rating Agency referred to below with respect to each of the following of
which it has actual knowledge:
1. Any material change or amendment to this Agreement;
2. The occurrence of any Event of Default that has not
been cured;
3. The resignation or termination of the Servicer or the
Trustee;
4. The repurchase or substitution of Mortgage Loans
pursuant to Sections 2.02 or 2.04; 5. The final payment to
Certificateholders; and 6. Any change in the location of
theccc Custodial Account or the Certificate Account.
In addition, the Trustee and the Servicer shall promptly furnish to
the Rating Agency copies of the following:
1. Each report to Certificateholders described in Section
4.02; and
2. Each annual independent public accountants' servicing
report received as described in Section 3.18.
Any such notice pursuant to this Section 11.09 shall be in writing and
shall be deemed to have been duly given if personally delivered or mailed by
first class mail, postage prepaid, or by express delivery service to (i) in the
case of ▇▇▇▇▇'▇, Attention of Asset Backed Surveillance Department, (ii) in the
case of Fitch, Attention of ▇▇▇▇▇ ▇▇▇ or, in each case, such other address as
either such Rating Agency may designate in writing to the parties thereto.
IN WITNESS WHEREOF, the Seller, the Servicer and the 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.
STRUCTURED ASSET MORTGAGE
INVESTMENTS INC.,
as Seller
By: /s/▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
------------------------------------
GMAC MORTGAGE CORPORATION,
as Servicer
By: /s/▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
------------------------------------
NORWEST BANK MINNESOTA, NATIONAL
ASSOCIATION,
as Trustee
By: /s/▇▇▇▇▇ ▇. ▇▇▇▇▇▇
------------------------------------
STATE OF NEW YORK )
) ss.:
COUNTY OF NEW YORK )
On the 30th day of November, 1999 before me, a notary public in and
for said State, personally appeared ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, known to me to be
the Vice President of STRUCTURED ASSET MORTGAGE INVESTMENTS INC., the
corporation that executed the within instrument, and also known to me to be the
person who executed it on behalf of said corporation, and acknowledged to me
that such corporation executed the within instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my
official seal the day and year in this certificate first above written.
/s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
_____________________________
Notary Public
[Notarial Seal]
STATE OF )
) ss.:
COUNTY OF )
On the 30th day of November, 1999 before me, a notary public in and
for said State, personally appeared ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, known to me to be
the Vice President of GMAC MORTGAGE CORPORATION, the corporation that
executed the within instrument, and also known to me to be the person who
executed it on behalf of said corporation, and acknowledged to me that such
corporation executed the within instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my
official seal the day and year in this certificate first above written.
_______________________________
Notary Public
[Notarial Seal]
STATE OF NEW YORK )
) ss.:
COUNTY OF NEW YORK )
On the 30th day of November, 1999 before me, a notary public in and for said
State, personally appeared ▇▇▇▇▇ ▇. ▇▇▇▇▇▇, known to me to be the Assistant
Vice President of NORWEST BANK MINNESOTA, NATIONAL ASSOCIATION, and also known
to me to be the person who executed the within instrument as a duly authorized
officer of said corporation on behalf of said corporation, and acknowledged to
me that such corporation executed the within instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my
official seal the day and year in this certificate first above written.
/s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
------------------------
Notary Public
[Notarial Seal]
EXHIBIT A-1
FORM OF CLASS A CERTIFICATE
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE
IS A "REGULAR INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT," AS
THOSE TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE
INTERNAL REVENUE CODE OF 1986 (THE "CODE").
THE CERTIFICATE PRINCIPAL BALANCE OF THIS CERTIFICATE WILL BE
DECREASED BY THE PRINCIPAL PAYMENTS HEREON AND REALIZED LOSSES ALLOCABLE
HERETO. ACCORDINGLY, FOLLOWING THE INITIAL ISSUANCE OF THE CERTIFICATES, THE
CERTIFICATE PRINCIPAL BALANCE OF THIS CERTIFICATE WILL BE DIFFERENT FROM THE
DENOMINATION SHOWN BELOW. ANYONE ACQUIRING THIS CERTIFICATE MAY ASCERTAIN ITS
CERTIFICATE PRINCIPAL BALANCE BY INQUIRY OF THE TRUSTEE NAMED HEREIN.
[THIS CERTIFICATE MAY NOT BE ACQUIRED DIRECTLY OR INDIRECTLY
BY, OR ON BEHALF OF, AN EMPLOYEE BENEFIT PLAN OR OTHER RETIREMENT ARRANGEMENT
WHICH IS SUBJECT TO TITLE I OF THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF
1974, AS AMENDED, AND/OR SECTION 4975 OF THE INTERNAL REVENUE CODE OF 1986, AS
AMENDED, UNLESS THE PROPOSED TRANSFER AND/OR HOLDING OF A CERTIFICATE AND THE
SERVICING, MANAGEMENT AND/OR OPERATION OF THE TRUST AND ITS ASSETS: (I) WILL
NOT RESULT IN ANY PROHIBITED TRANSACTION WHICH IS NOT COVERED UNDER AN
INDIVIDUAL OR CLASS PROHIBITED TRANSACTION EXEMPTION, INCLUDING, BUT NOT
LIMITED TO, PROHIBITED TRANSACTION EXEMPTION ("PTE") 84-14, ▇▇▇ ▇▇-▇▇, ▇▇▇
▇▇-▇, ▇▇▇ ▇▇-▇▇, ▇▇▇ 96-23 OR SECTION 401(C) OF ERISA AND THE REGULATIONS TO BE
PROMULGATED THEREUNDER AND (II) WILL NOT GIVE RISE TO ANY ADDITIONAL FIDUCIARY
DUTIES ON THE PART OF THE DEPOSITOR, THE SERVICER OR THE TRUSTEE, WHICH WILL BE
DEEMED REPRESENTED BY AN OWNER OF A BOOK-ENTRY CERTIFICATE AND WILL BE
EVIDENCED BY A REPRESENTATION OR AN OPINION OF COUNSEL TO SUCH EFFECT BY OR ON
BEHALF OF A HOLDER OF A DEFINITIVE CERTIFICATE.]
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY TO THE ISSUER OR ITS AGENT FOR
REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS
REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER NAME AS REQUESTED BY AN
AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY AND ANY PAYMENT IS
MADE TO CEDE & CO., ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL SINCE THE REGISTERED OWNER HEREOF,
CEDE & CO., HAS AN INTEREST HEREIN.
[THE FOLLOWING INFORMATION IS PROVIDED SOLELY FOR THE
PURPOSES OF APPLYING THE U.S. FEDERAL INCOME TAX ORIGINAL ISSUE DISCOUNT
("OID") RULES TO THIS CERTIFICATE. THE ISSUE DATE OF THIS CERTIFICATE IS
NOVEMBER ___, 1999. ASSUMING THAT THE MORTGAGE LOANS PREPAY AT [175]% OF THE
PREPAYMENT ASSUMPTION (AS DESCRIBED IN THE PROSPECTUS SUPPLEMENT), [AND
ASSUMING A CONSTANT PASS-THROUGH RATE EQUAL TO THE INITIAL PASS-THROUGH RATE,]
THIS CERTIFICATE HAS BEEN ISSUED WITH NO MORE THAN $_____ OF OID PER [$1,000]
OF INITIAL CERTIFICATE PRINCIPAL BALANCE, THE YIELD TO MATURITY IS ___% AND THE
AMOUNT OF OID ATTRIBUTABLE TO THE INITIAL ACCRUAL PERIOD IS NO MORE THAN
$_______ PER [$1,000] OF INITIAL CERTIFICATE PRINCIPAL BALANCE, COMPUTED USING
THE APPROXIMATE METHOD. NO REPRESENTATION IS MADE THAT THE MORTGAGE LOANS WILL
PREPAY AT A RATE BASED ON THE STANDARD PREPAYMENT ASSUMPTION OR AT ANY OTHER
RATE OR AS TO THE CONSTANCY OF THE PASS-THROUGH RATE.]
Certificate No. 1 ___% Pass-Through Rate
Class A-__ Senior
Date of Pooling and Servicing
Agreement and Cut-off Date:
November 1, 1999
First Distribution Date: Aggregate Initial Certificate Principal Balance
__________________ of this Certificate as of the Cut-off Date: $_____________
Servicer: Initial Certificate Principal Balance of this Certificate
GMAC Mortgage Corporation as of the Cut-off Date: $_________________
CUSIP _____
Assumed Final
Distribution Date:
---------------
MORTGAGE PASS-THROUGH CERTIFICATE
SERIES 1999-J2
evidencing a percentage interest in the distributions allocable to the
Class A-__ Certificates with respect to a Trust Fund consisting
primarily of a pool of [conventional one- to four-family fixed
interest rate] mortgage loans sold by STRUCTURED ASSET MORTGAGE
INVESTMENTS INC.
This Certificate is payable solely from the assets of the
Trust Fund, and does not represent an obligation of or interest in Structured
Asset Mortgage Investments Inc., the Servicer or the Trustee referred to below
or any of their affiliates or any other person. Neither this Certificate nor
the underlying Mortgage Loans are guaranteed or insured by any governmental
entity or by Structured Asset Mortgage Investments Inc., the Servicer or the
Trustee or any of their affiliates or any other person. None of Structured
Asset Mortgage Investments Inc., the Servicer or any of their affiliates will
have any obligation with respect to any certificate or other obligation secured
by or payable from payments on the Certificates.
This certifies that _______________ is the registered owner
of the Percentage Interest evidenced hereby in the beneficial ownership
interest of Certificates of the same Class as this Certificate in a trust (the
"Trust Fund") generally consisting of [thirty year, first lien, fixed rate]
mortgages secured by [one- to four- family residences and individual
condominium units] (collectively, the "Mortgage Loans") sold by Structured
Asset Mortgage Investments Inc. ("SAMI"). The Mortgage Loans were sold by EMC
Mortgage Corporation ("EMC") to SAMI. GMAC Mortgage Corporation ("GMACM") will
act as servicer of the Mortgage Loans (the "Servicer," which term includes any
successors thereto under the Agreement referred to below). The Trust Fund was
created pursuant to the Pooling and Servicing Agreement dated as of the Cut-off
Date specified above (the "Agreement"), between SAMI, as depositor (the
"Depositor"), GMACM, as servicer, and Norwest Bank Minnesota, National
Association as trustee (the "Trustee"), a summary of certain of the pertinent
provisions of which is set forth hereafter. To the extent not defined herein,
capitalized terms used herein shall have the meaning ascribed to them in the
Agreement. This Certificate is issued under and is subject to the terms,
provisions and conditions of the Agreement, to which Agreement the Holder of
this Certificate by virtue of its acceptance hereof assents and by which such
Holder is bound.
[Interest on this Certificate will accrue during the month
prior to the month in which a Distribution Date (as hereinafter defined) occurs
on the Certificate Principal Balance hereof at a per annum rate equal to the
Pass-Through Rate set forth above.] The Trustee will distribute on the 25th day
of each month, or, if such 25th day is not a Business Day, the immediately
following Business Day (each, a "Distribution Date"), commencing on the First
Distribution Date specified above, to the Person in whose name this Certificate
is registered at the close of business on the last Business Day (or if such
last day is not a Business Day, the Business Day immediately preceding such
last day) of the calendar month preceding the month of such Distribution Date,
an amount equal to the product of the Percentage Interest evidenced by this
Certificate and the amount (of [interest and] [principal], if any) required to
be distributed to the Holders of Certificates of the same Class as this
Certificate. The Assumed Final Distribution Date is the first anniversary of
the Distribution Date immediately following the latest scheduled maturity date
of any Mortgage Loan and is not likely to be the date on which the Certificate
Principal Balance of this Class of Certificates will be reduced to zero.
Distributions on this Certificate will be made by the Trustee
by check mailed to the address of the Person entitled thereto as such name and
address shall appear on the Certificate Register or, if such Person so requests
by notifying the Trustee in writing as specified in the Agreement.
Notwithstanding the above, the final distribution on this Certificate will be
made after due notice by the Trustee of the pendency of such distribution and
only upon presentation and surrender of this Certificate at the office or
agency appointed by the Trustee for that purpose and designated in such notice.
The Initial Certificate Principal Balance of this Certificate is set forth
above. The Certificate Principal Balance hereof will be reduced to the extent
of distributions allocable to principal hereon and any Realized Losses
allocable hereto.
[This Certificate may not be acquired directly or indirectly
by, or on behalf of, an employee benefit plan or other retirement arrangement
which is subject to Title I of the Employee Retirement Income Security Act of
1974, as amended, and/or section 4975 of the Internal Revenue Code of 1986, as
amended, unless the proposed transfer and/or holding of a Certificate and the
servicing, management and/or operation of the trust and its assets: (i) will
not result in any prohibited transaction which is not covered under an
individual or class prohibited transaction exemption, including, but not
limited to, Prohibited Transaction Exemption ("PTE") 84-14, ▇▇▇ ▇▇-▇▇, ▇▇▇
▇▇-▇, ▇▇▇ ▇▇-▇▇, ▇▇▇ ▇▇-▇▇ or Section 401(c) of ERISA and the regulations
promulgated thereunder and (ii) will not give rise to any additional fiduciary
duties on the part of the Depositor, the Servicer or the Trustee, which will be
deemed represented by an owner of a Book-Entry Certificate and will be
evidenced by a representation or an Opinion of Counsel to such effect by or on
behalf of a Holder of a Definitive Certificate.]
This Certificate is one of a duly authorized issue of
Certificates designated as set forth on the face hereof (the "Certificates"),
issued in _______________ Classes. The Certificates, in the aggregate, evidence
the entire beneficial ownership interest in the Trust Fund formed pursuant to
the Agreement.
The Certificateholder, by its acceptance of this Certificate,
agrees that it will look solely to the Trust Fund for payment hereunder and
that the Trustee is not liable to the Certificateholders for any amount payable
under this Certificate or the Agreement or, except as expressly provided in the
Agreement, subject to any liability under the Agreement.
This Certificate does not purport to summarize the Agreement
and reference is made to the Agreement for the interests, rights and
limitations of rights, benefits, obligations and duties evidenced hereby, and
the rights, duties and immunities of the Trustee.
The Agreement permits, with certain exceptions therein
provided, the amendment thereof and the modification of the rights and
obligations of the Depositor and the rights of the Certificateholders under the
Agreement from time to time by the Depositor and the Trustee with the consent
of the Holders of Certificates evidencing Percentage Interests aggregating not
less than ______% (or in certain cases, Holders of Certificates of affected
Classes evidencing such percentage of the Percentage Interests thereof). Any
such consent by the Holder of this Certificate shall be conclusive and binding
on such Holder and upon all future Holders of this Certificate and of any
Certificate issued upon the transfer hereof or in lieu hereof whether or not
notation of such consent is made upon this Certificate. The Agreement also
permits the amendment thereof, in certain limited circumstances, without the
consent of the Holders of any of the Certificates.
As provided in the Agreement and subject to certain
limitations therein set forth, the transfer of this Certificate is registrable
with the Trustee upon surrender of this Certificate for registration of
transfer at the offices or agencies maintained by the Trustee for such
purposes, duly endorsed by, or accompanied by a written instrument of transfer
in form satisfactory to the Trustee duly executed by the Holder hereof or such
Holder's attorney duly authorized in writing, and thereupon one or more new
Certificates in authorized denominations representing a like aggregate
Percentage Interest will be issued to the designated transferee.
The Certificates are issuable only as registered Certificates
without coupons in the Classes and denominations specified in the Agreement. As
provided in the Agreement and subject to certain limitations therein set forth,
this Certificate is exchangeable for one or more new Certificates evidencing
the same Class and in the same aggregate Percentage Interest, as requested by
the Holder surrendering the same.
No service charge will be made to the Certificateholders for
any such registration of transfer, but the Trustee may require payment of a sum
sufficient to cover any tax or other governmental charge payable in connection
therewith. The Depositor, the Servicer, the Trustee and any agent of any of
them may treat the Person in whose name this Certificate is registered as the
owner hereof for all purposes, and none of Depositor, the Servicer, the Trustee
or any such agent shall be affected by notice to the contrary.
The obligations created by the Agreement and the Trust Fund
created thereby (other than the obligations to make payments to
Certificateholders with respect to the termination of the Agreement) shall
terminate upon the earlier of (i) the later of the (A) final payment or other
liquidation (or Advance with respect thereto) of the last Mortgage Loan
remaining in the Trust Fund and (B) disposition of all property acquired upon
foreclosure or deed in lieu of foreclosure of any Mortgage Loan and the
remittance of all funds due under the Agreement, or (ii) the optional
repurchase by the party named in the Agreement of all the Mortgage Loans and
other assets of the Trust Fund in accordance with the terms of the Agreement.
Such optional repurchase may be made only on or after the Distribution Date on
which the aggregate unpaid principal balance of the Mortgage Loans is less than
the percentage of the aggregate Stated Principal Balance specified in the
Agreement of the Mortgage Loans at the Cut-off Date. The exercise of such right
will effect the early retirement of the Certificates. In no event, however,
will the Trust Fund created by the Agreement continue beyond the expiration of
___ years after the death of certain persons identified in the Agreement.
Unless this Certificate has been countersigned by an
authorized signatory of the Trustee by manual signature, this Certificate shall
not be entitled to any benefit under the Agreement, or be valid for any
purpose.
IN WITNESS WHEREOF, the Trustee has caused this Certificate
to be duly executed.
Dated: November ___, 1999 NORWEST BANK MINNESOTA,
NATIONAL ASSOCIATION
Not in its individual
capacity but solely as Trustee
By:____________________________________
Authorized Signatory
CERTIFICATE OF AUTHENTICATION
This is one of the Class A-__ Certificates referred to in the
within-mentioned Agreement.
NORWEST BANK MINNESOTA,
NATIONAL ASSOCIATION
Authorized signatory of Norwest
Bank Minnesota, National
Association, not in its individual
capacity but solely as Trustee
By:____________________________________
Authorized Signatory
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto ______________________________(Please print or typewrite name
and address including postal zip code of assignee) a Percentage Interest
evidenced by the within Mortgage Pass-Through Certificate and hereby authorizes
the transfer of registration of such interest to assignee on the Certificate
Register of the Trust Fund.
I (We) further direct the Certificate Registrar to issue a
new Certificate of a like denomination and Class, to the above named assignee
and deliver such Certificate to the following address: _____________________
------------------------------------------------------------------------------
------------------------------------------------------------------------------
Dated: ____________________________________________________________
Signature by or on behalf of assignor
------------------------------------
Signature Guaranteed
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of
distribution:
Distributions shall be made, by wire transfer or otherwise,
in immediately available funds to____________________________________________
__________________________________ for the account of________________________
_______________________________ account number __________, or, if mailed by
check, to _________________________________________. Applicable statements
should be mailed to________________________________________________________.
This information is provided by ______________________, the
assignee named above, or ____________________________, as its agent.
EXHIBIT A-2
FORM OF CLASS X AND CLASS PO CERTIFICATE
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE
IS A "REGULAR INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT," AS
THOSE TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE
INTERNAL REVENUE CODE OF 1986 (THE "CODE").
THE [CERTIFICATE PRINCIPAL BALANCE] [NOTIONAL AMOUNT] OF THIS
CERTIFICATE WILL BE DECREASED BY [THE PRINCIPAL PAYMENTS HEREON] [TO THE EXTENT
OF PRINCIPAL DISTRIBUTIONS ON THE PREMIUM MORTGAGE LOANS] AND REALIZED LOSSES
ALLOCATED HERETO. ACCORDINGLY, FOLLOWING THE INITIAL ISSUANCE OF THE
CERTIFICATES, THE [CERTIFICATE PRINCIPAL BALANCE] [NOTIONAL AMOUNT] OF THIS
CERTIFICATE WILL BE DIFFERENT FROM THE DENOMINATION SHOWN BELOW. ANYONE
ACQUIRING THIS CERTIFICATE MAY ASCERTAIN ITS [CERTIFICATE PRINCIPAL BALANCE]
[NOTIONAL AMOUNT] BY INQUIRY OF THE TRUSTEE NAMED HEREIN.
[THIS CERTIFICATE HAS NO PRINCIPAL BALANCE AND IS NOT
ENTITLED TO ANY DISTRIBUTIONS IN RESPECT OF PRINCIPAL.]
THIS CERTIFICATE MAY NOT BE ACQUIRED DIRECTLY OR INDIRECTLY
BY, OR ON BEHALF OF, AN EMPLOYEE BENEFIT PLAN OR OTHER RETIREMENT ARRANGEMENT
WHICH IS SUBJECT TO TITLE I OF THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF
1974, AS AMENDED, AND/OR SECTION 4975 OF THE INTERNAL REVENUE CODE OF 1986, AS
AMENDED, UNLESS THE PROPOSED TRANSFER AND/OR HOLDING OF A CERTIFICATE AND THE
SERVICING, MANAGEMENT AND/OR OPERATION OF THE TRUST AND ITS ASSETS: (I) WILL
NOT RESULT IN ANY PROHIBITED TRANSACTION WHICH IS NOT COVERED UNDER AN
INDIVIDUAL OR CLASS PROHIBITED TRANSACTION EXEMPTION, INCLUDING, BUT NOT
LIMITED TO, PROHIBITED TRANSACTION EXEMPTION ("PTE") 84-14, ▇▇▇ ▇▇-▇▇, ▇▇▇
▇▇-▇, ▇▇▇ ▇▇-▇▇, ▇▇▇ 96-23 OR SECTION 401(C) OF ERISA AND THE REGULATIONS TO BE
PROMULGATED THEREUNDER AND (II) WILL NOT GIVE RISE TO ANY ADDITIONAL FIDUCIARY
DUTIES ON THE PART OF THE DEPOSITOR, THE SERVICER OR THE TRUSTEE, WHICH WILL BE
DEEMED REPRESENTED BY AN OWNER OF A BOOK-ENTRY CERTIFICATE AND WILL BE
EVIDENCED BY A REPRESENTATION OR AN OPINION OF COUNSEL TO SUCH EFFECT BY OR ON
BEHALF OF A HOLDER OF A DEFINITIVE CERTIFICATE.
THE FOLLOWING INFORMATION IS PROVIDED SOLELY FOR THE PURPOSES
OF APPLYING THE U.S. FEDERAL INCOME TAX ORIGINAL ISSUE DISCOUNT ("OID") RULES
TO THIS CERTIFICATE. THE ISSUE DATE OF THIS CERTIFICATE IS NOVEMBER ___, 1999.
ASSUMING THAT THE MORTGAGE LOANS PREPAY AT [175]% OF THE PREPAYMENT ASSUMPTION
(AS DESCRIBED IN THE PROSPECTUS SUPPLEMENT), [AND ASSUMING A CONSTANT
PASS-THROUGH RATE EQUAL TO THE INITIAL PASS-THROUGH RATE,] THIS CERTIFICATE HAS
BEEN ISSUED WITH NO MORE THAN $_____ OF OID PER [$1,000] OF INITIAL CERTIFICATE
PRINCIPAL BALANCE, THE YIELD TO MATURITY IS ___% AND THE AMOUNT OF OID
ATTRIBUTABLE TO THE INITIAL ACCRUAL PERIOD IS NO MORE THAN $_______ PER
[$1,000] OF INITIAL CERTIFICATE PRINCIPAL BALANCE, COMPUTED USING THE
APPROXIMATE METHOD. NO REPRESENTATION IS MADE THAT THE MORTGAGE LOANS WILL
PREPAY AT A RATE BASED ON THE STANDARD PREPAYMENT ASSUMPTION OR AT ANY OTHER
RATE OR AS TO THE CONSTANCY OF THE PASS-THROUGH RATE.
Certificate No. 1
[0.00%][Variable] Pass-Through Rate
Class [X][PO] Senior
Date of Pooling and Servicing
Agreement and Cut-off Date:
November 1, 1999
First Distribution Date: Aggregate Initial [Certificate Principal Balance]
___________________ [Notional Amount] of this Certificate as of the
Cut-off Date: $_________________
Initial [Certificate Principal Balance]
[Notional Amount] of this Certificate as of the
Cut-off Date: $_____________
Servicer:
GMAC Mortgage Corporation
CUSIP _____
Assumed Final
Distribution Date:
---------------
MORTGAGE PASS-THROUGH CERTIFICATE
SERIES 1999-J2
evidencing a percentage interest in the distributions allocable to the
Class [X][PO] Certificates with respect to a Trust Fund consisting
primarily of a pool of [conventional one- to four-family fixed
interest rate] mortgage loans sold by STRUCTURED ASSET MORTGAGE
INVESTMENTS INC.
This Certificate is payable solely from the assets of the
Trust Fund, and does not represent an obligation of or interest in Structured
Asset Mortgage Investments Inc., the Servicer or the Trustee referred to below
or any of their affiliates or any other person. Neither this Certificate nor
the underlying Mortgage Loans are guaranteed or insured by any governmental
entity or by Structured Asset Mortgage Investments Inc., the Servicer or the
Trustee or any of their affiliates or any other person. None of Structured
Asset Mortgage Investments Inc., the Servicer or any of their affiliates will
have any obligation with respect to any certificate or other obligation secured
by or payable from payments on the Certificates.
This certifies that ____________________ is the registered
owner of the Percentage Interest evidenced hereby in the beneficial ownership
interest of Certificates of the same Class as this Certificate in a trust (the
"Trust Fund") generally consisting of [thirty year, first lien, fixed rate]
mortgages secured by [one- to four- family residences and individual
condominium units] (collectively, the "Mortgage Loans") sold by Structured
Asset Mortgage Investments Inc. ("SAMI"). The Mortgage Loans were sold by EMC
Mortgage Corporation ("EMC") to SAMI. GMAC Mortgage Corporation ("GMACM") will
act as servicer of the Mortgage Loans (the "Servicer," which term includes any
successors thereto under the Agreement referred to below). The Trust Fund was
created pursuant to the Pooling and Servicing Agreement dated as of the Cut-off
Date specified above (the "Agreement"), between SAMI, as depositor (the
"Depositor"), GMACM, as servicer, and Norwest Bank Minnesota, National
Association, as trustee (the "Trustee"), a summary of certain of the pertinent
provisions of which is set forth hereafter. To the extent not defined herein,
capitalized terms used herein shall have the meaning ascribed to them in the
Agreement. This Certificate is issued under and is subject to the terms,
provisions and conditions of the Agreement, to which Agreement the Holder of
this Certificate by virtue of its acceptance hereof assents and by which such
Holder is bound.
[Interest on this Certificate will accrue during the month
prior to the month in which a Distribution Date (as hereinafter defined) occurs
on the Notional Amount (equal to the aggregate Stated Principal Balance of the
Premium Mortgage Loans) at a variable Pass-Through Rate equal to the Pool Strip
Rates of the Premium Mortgage Loans. The Trustee will distribute on the 25th
day of each month, or, if such 25th day is not a Business Day, the immediately
following Business Day (each, a "Distribution Date"), commencing on the First
Distribution Date specified above, to the Person in whose name this Certificate
is registered at the close of business on the last Business Day (or if such
last day is not a Business Day, the Business Day immediately preceding such
last day) of the calendar month preceding the month of such Distribution Date,
an amount equal to the product of the Percentage Interest evidenced by this
Certificate and the amount (of [interest and] [principal], if any) required to
be distributed to the Holders of Certificates of the same Class as this
Certificate. The Assumed Final Distribution Date is the first anniversary of
the Distribution Date immediately following the latest scheduled maturity date
of any Mortgage Loan and is not likely to be the date on which the [Certificate
Principal Balance][Notional Amount] of this Class of Certificates will be
reduced to zero. The Initial [Certificate Principal Balance] [Notional Amount]
of this Certificate is set forth above. The [Certificate Principal Balance]
[Notional Amount] hereof will be reduced to the extent of distributions
allocable to principal hereon [on the Premium Mortgage Loans] and any Realized
Losses allocable hereto.
Distributions on this Certificate will be made by the Trustee
by check mailed to the address of the Person entitled thereto as such name and
address shall appear on the Certificate Register or, if such Person so requests
by notifying the Trustee in writing as specified in the Agreement.
Notwithstanding the above, the final distribution on this Certificate will be
made after due notice by the Trustee of the pendency of such distribution and
only upon presentation and surrender of this Certificate at the office or
agency appointed by the Trustee for that purpose and designated in such notice.
This Certificate may not be acquired directly or indirectly
by, or on behalf of, an employee benefit plan or other retirement arrangement
which is subject to Title I of the Employee Retirement Income Security Act of
1974, as amended, and/or section 4975 of the Internal Revenue Code of 1986, as
amended, unless the proposed transfer and/or holding of a Certificate and the
servicing, management and/or operation of the trust and its assets: (i) will
not result in any prohibited transaction which is not covered under an
individual or class prohibited transaction exemption, including, but not
limited to, Prohibited Transaction Exemption ("PTE") 84-14, ▇▇▇ ▇▇-▇▇, ▇▇▇
▇▇-▇, ▇▇▇ ▇▇-▇▇, ▇▇▇ ▇▇-▇▇ or Section 401(c) of ERISA and the regulations
promulgated thereunder and (ii) will not give rise to any additional fiduciary
duties on the part of the Depositor, the Servicer or the Trustee, which will be
deemed represented by an owner of a Book-Entry Certificate and will be
evidenced by a representation or an Opinion of Counsel to such effect by or on
behalf of a Holder of a Definitive Certificate.
This Certificate is one of a duly authorized issue of
Certificates designated as set forth on the face hereof (the "Certificates"),
issued in _____________ Classes. The Certificates, in the aggregate, evidence
the entire beneficial ownership interest in the Trust Fund formed pursuant to
the Agreement.
The Certificateholder, by its acceptance of this Certificate,
agrees that it will look solely to the Trust Fund for payment hereunder and
that the Trustee is not liable to the Certificateholders for any amount payable
under this Certificate or the Agreement or, except as expressly provided in the
Agreement, subject to any liability under the Agreement.
This Certificate does not purport to summarize the Agreement
and reference is made to the Agreement for the interests, rights and
limitations of rights, benefits, obligations and duties evidenced hereby, and
the rights, duties and immunities of the Trustee.
The Agreement permits, with certain exceptions therein
provided, the amendment thereof and the modification of the rights and
obligations of the Depositor and the rights of the Certificateholders under the
Agreement from time to time by the Depositor and the Trustee with the consent
of the Holders of Certificates evidencing Percentage Interests aggregating not
less than ______% (or in certain cases, Holders of Certificates of affected
Classes evidencing such percentage of the Percentage Interests thereof). Any
such consent by the Holder of this Certificate shall be conclusive and binding
on such Holder and upon all future Holders of this Certificate and of any
Certificate issued upon the transfer hereof or in lieu hereof whether or not
notation of such consent is made upon this Certificate. The Agreement also
permits the amendment thereof, in certain limited circumstances, without the
consent of the Holders of any of the Certificates.
As provided in the Agreement and subject to certain
limitations therein set forth, the transfer of this Certificate is registrable
with the Trustee upon surrender of this Certificate for registration of
transfer at the offices or agencies maintained by the Trustee for such
purposes, duly endorsed by, or accompanied by a written instrument of transfer
in form satisfactory to the Trustee duly executed by the Holder hereof or such
Holder's attorney duly authorized in writing, and thereupon one or more new
Certificates in authorized denominations representing a like aggregate
Percentage Interest will be issued to the designated transferee.
The Certificates are issuable only as registered Certificates
without coupons in the Classes and denominations specified in the Agreement. As
provided in the Agreement and subject to certain limitations therein set forth,
this Certificate is exchangeable for one or more new Certificates evidencing
the same Class and in the same aggregate Percentage Interest, as requested by
the Holder surrendering the same.
No service charge will be made to the Certificateholders for
any such registration of transfer, but the Trustee may require payment of a sum
sufficient to cover any tax or other governmental charge payable in connection
therewith. The Depositor, the Servicer, the Trustee and any agent of any of
them may treat the Person in whose name this Certificate is registered as the
owner hereof for all purposes, and none of Depositor, the Servicer, the Trustee
or any such agent shall be affected by notice to the contrary.
The obligations created by the Agreement and the Trust Fund
created thereby (other than the obligations to make payments to
Certificateholders with respect to the termination of the Agreement) shall
terminate upon the earlier of (i) the later of the (A) final payment or other
liquidation (or Advance with respect thereto) of the last Mortgage Loan
remaining in the Trust Fund and (B) disposition of all property acquired upon
foreclosure or deed in lieu of foreclosure of any Mortgage Loan and the
remittance of all funds due under the Agreement, or (ii) the optional
repurchase by the party named in the Agreement of all the Mortgage Loans and
other assets of the Trust Fund in accordance with the terms of the Agreement.
Such optional repurchase may be made only on or after the Distribution Date on
which the aggregate unpaid principal balance of the Mortgage Loans is less than
the percentage of the aggregate Stated Principal Balance specified in the
Agreement of the Mortgage Loans at the Cut-off Date. The exercise of such right
will effect the early retirement of the Certificates. In no event, however,
will the Trust Fund created by the Agreement continue beyond the expiration of
__ years after the death of certain persons identified in the Agreement.
Unless this Certificate has been countersigned by an
authorized signatory of the Trustee by manual signature, this Certificate shall
not be entitled to any benefit under the Agreement, or be valid for any
purpose.
IN WITNESS WHEREOF, the Trustee has caused this Certificate
to be duly executed.
Dated: November __, 1999 NORWEST BANK MINNESOTA,
NATIONAL ASSOCIATION
Not in its individual capacity
but solely as Trustee
By:_______________________________________
Authorized Signatory
CERTIFICATE OF AUTHENTICATION
This is one of the Class [X][PO] Certificates referred to in
the within-mentioned Agreement.
NORWEST BANK MINNESOTA,
NATIONAL ASSOCIATION
Authorized signatory of Norwest
Bank Minnesota, National Association,
not in its individual capacity but
solely as Trustee
By:___________________________________
Authorized Signatory
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto ______________________________________(Please print or
typewrite name and address including postal zip code of assignee) a Percentage
Interest evidenced by the within Mortgage Pass-Through Certificate and hereby
authorizes the transfer of registration of such interest to assignee on the
Certificate Register of the Trust Fund.
I (We) further direct the Certificate Registrar to issue a
new Certificate of a like denomination and Class, to the above named assignee
and deliver such Certificate to the following
address:_______________________________________________________________________
__________________________________________________________________________
Dated: ____________________________________________________________
Signature by or on behalf of assignor
------------------------------------------
Signature Guaranteed
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of
distribution:
Distributions shall be made, by wire transfer or otherwise,
in immediately available funds to____________________________________________
_________________________________________________ for the account of
_______________________________ account number __________, or, if mailed by
check, to _________________________________________. Applicable statements
should be mailed to_________________________________________________________.
This information is provided by ______________________, the
assignee named above, or ____________________________, as its agent.
EXHIBIT A-3
FORM OF CLASS R CERTIFICATE
THIS CERTIFICATE MAY NOT BE HELD BY OR TRANSFERRED TO A
NON-UNITED STATES PERSON, A PUBLICLY TRADED PARTNERSHIP OR A DISQUALIFIED
ORGANIZATION (AS DEFINED BELOW).
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE
IS A "RESIDUAL INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT" AS
THOSE TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE
INTERNAL REVENUE CODE OF 1986 (THE "CODE").
THIS CERTIFICATE MAY NOT BE ACQUIRED DIRECTLY OR INDIRECTLY
BY, OR ON BEHALF OF, AN EMPLOYEE BENEFIT PLAN OR OTHER RETIREMENT ARRANGEMENT
WHICH IS SUBJECT TO TITLE I OF THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF
1974, AS AMENDED, AND/OR SECTION 4975 OF THE INTERNAL REVENUE CODE OF 1986, AS
AMENDED, UNLESS THE PROPOSED TRANSFER AND/OR HOLDING OF A CERTIFICATE AND THE
SERVICING, MANAGEMENT AND/OR OPERATION OF THE TRUST AND ITS ASSETS: (I) WILL
NOT RESULT IN ANY PROHIBITED TRANSACTION WHICH IS NOT COVERED UNDER AN
INDIVIDUAL OR CLASS PROHIBITED TRANSACTION EXEMPTION, INCLUDING, BUT NOT
LIMITED TO, PROHIBITED TRANSACTION EXEMPTION ("PTE") 84-14, ▇▇▇ ▇▇-▇▇, ▇▇▇
▇▇-▇, ▇▇▇ ▇▇-▇▇, ▇▇▇ 96-23 OR SECTION 401(C) OF ERISA AND THE REGULATIONS TO BE
PROMULGATED THEREUNDER AND (II) WILL NOT GIVE RISE TO ANY ADDITIONAL FIDUCIARY
DUTIES ON THE PART OF THE DEPOSITOR, THE SERVICER OR THE TRUSTEE, WHICH WILL BE
DEEMED REPRESENTED BY AN OWNER OF A BOOK-ENTRY CERTIFICATE AND WILL BE
EVIDENCED BY A REPRESENTATION OR AN OPINION OF COUNSEL TO SUCH EFFECT BY OR ON
BEHALF OF A HOLDER OF A DEFINITIVE CERTIFICATE.
ANY RESALE, TRANSFER OR OTHER DISPOSITION OF THIS CERTIFICATE MAY BE
MADE ONLY IF THE PROPOSED TRANSFEREE PROVIDES A TRANSFER AFFIDAVIT TO THE
SERVICER AND THE TRUSTEE THAT (1) SUCH TRANSFEREE IS NOT (A) THE UNITED STATES,
ANY STATE OR POLITICAL SUBDIVISION THEREOF, ANY FOREIGN GOVERNMENT, ANY
INTERNATIONAL ORGANIZATION, OR ANY AGENCY OR INSTRUMENTALITY OF ANY OF THE
FOREGOING, (B) ANY ORGANIZATION (OTHER THAN A COOPERATIVE DESCRIBED IN SECTION
521 OF THE CODE) WHICH IS EXEMPT FROM THE TAX IMPOSED BY CHAPTER 1 OF THE CODE
UNLESS SUCH ORGANIZATION IS SUBJECT TO THE TAX IMPOSED BY SECTION 511 OF THE
CODE, (C) ANY ORGANIZATION DESCRIBED IN SECTION 1381(a)(2)(C) OF THE CODE, (ANY
SUCH PERSON DESCRIBED IN THE FOREGOING CLAUSES (A), (B) OR (C) BEING HEREIN
REFERRED TO AS A "DISQUALIFIED ORGANIZATION") OR (D) AN AGENT OF A DISQUALIFIED
ORGANIZATION, (2) NO PURPOSE OF SUCH TRANSFER IS TO IMPEDE THE ASSESSMENT OR
COLLECTION OF TAX AND (3) SUCH TRANSFEREE SATISFIES CERTAIN ADDITIONAL
CONDITIONS RELATING TO THE FINANCIAL CONDITION OF THE PROPOSED TRANSFEREE.
NOTWITHSTANDING THE REGISTRATION IN THE CERTIFICATE REGISTER OR ANY TRANSFER,
SALE OR OTHER DISPOSITION OF THIS CERTIFICATE TO A DISQUALIFIED ORGANIZATION OR
AN AGENT OF A DISQUALIFIED ORGANIZATION, SUCH REGISTRATION SHALL BE DEEMED TO
BE OF NO LEGAL FORCE OR EFFECT WHATSOEVER AND SUCH PERSON SHALL NOT BE DEEMED
TO BE A CERTIFICATEHOLDER FOR ANY PURPOSE HEREUNDER, INCLUDING, BUT NOT LIMITED
TO, THE RECEIPT OF DISTRIBUTIONS ON THIS CERTIFICATE. EACH HOLDER OF THIS
CERTIFICATE BY ACCEPTANCE OF THIS CERTIFICATE SHALL BE DEEMED TO HAVE CONSENTED
TO THE PROVISIONS OF THIS PARAGRAPH.
Certificate No. 1 ___% Pass-Through Rate
Class R Senior
Date of Pooling and Servicing
Agreement and Cut-off Date:
November 1, 1999
First Distribution Date:
___________________ Aggregate Initial Certificate Principal
Balance of this Certificate as of the
Cut-off Date: $_________________
Servicer: Initial Certificate Principal Balance
GMAC Mortgage Corporation of this Certificate as of the
Cut-off Date: $_______
CUSIP _____
Assumed Final Distribution Date:
---------------------------
MORTGAGE PASS-THROUGH CERTIFICATE
SERIES 1999-J2
evidencing a percentage interest in the distributions allocable to the
Class R-__ Certificates with respect to a Trust Fund consisting
primarily of a pool of [conventional one- to four-family fixed
interest rate] mortgage loans sold by STRUCTURED ASSET MORTGAGE
INVESTMENTS INC.
This Certificate is payable solely from the assets of the
Trust Fund, and does not represent an obligation of or interest in Structured
Asset Mortgage Investments Inc., the Servicer, or the Trustee referred to below
or any of their affiliates or any other person. Neither this Certificate nor
the underlying Mortgage Loans are guaranteed or insured by any governmental
entity or by Structured Asset Mortgage Investments Inc., the Servicer or the
Trustee or any of their affiliates or any other person. None of Structured
Asset Mortgage Investments Inc., the Servicer or any of their affiliates will
have any obligation with respect to any certificate or other obligation secured
by or payable from payments on the Certificates.
This certifies that _________________ is the registered owner
of the Percentage Interest evidenced hereby in the beneficial ownership
interest of Certificates of the same Class as this Certificate in a trust (the
"Trust Fund") generally consisting of [thirty year, first lien, fixed rate]
mortgages secured by [one- to four- family residences and individual
condominium units] (collectively, the "Mortgage Loans") sold by Structured
Asset Mortgage Investments Inc. ("SAMI"). The Mortgage Loans were sold by EMC
Mortgage Corporation ("EMC") to SAMI. GMAC Mortgage Corporation ("GMACM") will
act as servicer of the Mortgage Loans (the "Servicer," which term includes any
successors thereto under the Agreement referred to below). The Trust Fund was
created pursuant to the Pooling and Servicing Agreement dated as of the Cut-off
Date specified above (the "Agreement"), between SAMI, as depositor (the
"Depositor"), GMACM, as servicer and Norwest Bank Minnesota, National
Association, as trustee (the "Trustee"), a summary of certain of the pertinent
provisions of which is set forth hereafter. To the extent not defined herein,
capitalized terms used herein shall have the meaning ascribed to them in the
Agreement. This Certificate is issued under and is subject to the terms,
provisions and conditions of the Agreement, to which Agreement the Holder of
this Certificate by virtue of its acceptance hereof assents and by which such
Holder is bound.
Interest on this Certificate will accrue during the month
prior to the month in which a Distribution Date (as hereinafter defined) occurs
on the Certificate Principal Balance hereof at a per annum rate equal to the
Pass-Through Rate set forth above. The Trustee will distribute on the 25th day
of each month, or, if such 25th day is not a Business Day, the immediately
following Business Day (each, a "Distribution Date"), commencing on the First
Distribution Date specified above, to the Person in whose name this Certificate
is registered at the close of business on the last Business Day (or if such
last day is not a Business Day, the Business Day immediately preceding such
last day) of the calendar month preceding the month of such Distribution Date,
an amount equal to the product of the Percentage Interest evidenced by this
Certificate and the amount (interest and principal, if any) required to be
distributed to the Holders of Certificates of the same Class as this
Certificate. The Assumed Final Distribution Date is the first anniversary of
the Distribution Date immediately following the latest scheduled maturity date
of any Mortgage Loan and is not likely to be the date on which the Certificate
Principal Balance of this Class of Certificates will be reduced to zero.
Distributions on this Certificate will be made by the Trustee
by check mailed to the address of the Person entitled thereto as such name and
address shall appear on the Certificate Register. Notwithstanding the above,
the final distribution on this Certificate will be made after due notice by the
Trustee of the pendency of such distribution and only upon presentation and
surrender of this Certificate at the office or agency appointed by the Trustee
for that purpose and designated in such notice. The Initial Certificate
Principal Balance of this Certificate is set forth above. The Certificate
Principal Balance hereof will be reduced to the extent of distributions
allocable to principal hereon and any Realized Losses allocable hereto.
Each Holder of this Certificate will be deemed to have agreed
to be bound by the restrictions set forth in the Agreement to the effect that
(i) each person holding or acquiring any Ownership Interest in this Certificate
must be a United States Person and a Permitted Transferee, (ii) the transfer of
any Ownership Interest in this Certificate will be conditioned upon the
delivery to the Trustee of, among other things, an affidavit to the effect that
it is a United States Person and Permitted Transferee, (iii) any attempted or
purported transfer of any Ownership Interest in this Certificate in violation
of such restrictions will be absolutely null and void and will vest no rights
in the purported transferee, and (iv) if any person other than a United States
Person and a Permitted Transferee acquires any Ownership Interest in this
Certificate in violation of such restrictions, then the Depositor will have the
right, in its sole discretion and without notice to the Holder of this
Certificate, to sell this Certificate to a purchaser selected by the Company,
which purchaser may be the Depositor, or any affiliate of the Depositor, on
such terms and conditions as the Depositor may choose.
This Certificate may not be acquired directly or indirectly
by, or on behalf of, an employee benefit plan or other retirement arrangement
which is subject to Title I of the Employee Retirement Income Security Act of
1974, as amended, and/or section 4975 of the Internal Revenue Code of 1986, as
amended, unless the proposed transfer and/or holding of a Certificate and the
servicing, management and/or operation of the trust and its assets: (i) will
not result in any prohibited transaction which is not covered under an
individual or class prohibited transaction exemption, including, but not
limited to, Prohibited Transaction Exemption ("PTE") 84-14, ▇▇▇ ▇▇-▇▇, ▇▇▇
▇▇-▇, ▇▇▇ ▇▇-▇▇, ▇▇▇ ▇▇-▇▇ or Section 401(c) of ERISA and the regulations
promulgated thereunder and (ii) will not give rise to any additional fiduciary
duties on the part of the Depositor, the Servicer or the Trustee, which will be
deemed represented by an owner of a Book-Entry Certificate and will be
evidenced by a representation or an Opinion of Counsel to such effect by or on
behalf of a Holder of a Definitive Certificate.
This Certificate is one of a duly authorized issue of
Certificates designated as set forth on the face hereof (the "Certificates"),
issued in ___________ Classes. The Certificates, in the aggregate, evidence the
entire beneficial ownership interest in the Trust Fund formed pursuant to the
Agreement.
The Certificateholder, by its acceptance of this Certificate,
agrees that it will look solely to the Trust Fund for payment hereunder and
that the Trustee is not liable to the Certificateholders for any amount payable
under this Certificate or the Agreement or, except as expressly provided in the
Agreement, subject to any liability under the Agreement.
This Certificate does not purport to summarize the Agreement
and reference is made to the Agreement for the interests, rights and
limitations of rights, benefits, obligations and duties evidenced hereby, and
the rights, duties and immunities of the Trustee.
The Agreement permits, with certain exceptions therein
provided, the amendment thereof and the modification of the rights and
obligations of the Depositor and the rights of the Certificateholders under the
Agreement from time to time by the Depositor and the Trustee with the consent
of the Holders of Certificates evidencing Percentage Interests aggregating not
less than _____% (or in certain cases, Holders of Certificates of affected
Classes evidencing such percentage of the Percentage Interests thereof). Any
such consent by the Holder of this Certificate shall be conclusive and binding
on such Holder and upon all future Holders of this Certificate and of any
Certificate issued upon the transfer hereof or in lieu hereof whether or not
notation of such consent is made upon this Certificate. The Agreement also
permits the amendment thereof, in certain limited circumstances, without the
consent of the Holders of any of the Certificates.
As provided in the Agreement and subject to certain
limitations therein set forth, the transfer of this Certificate is registrable
with the Trustee upon surrender of this Certificate for registration of
transfer at the offices or agencies maintained by the Trustee for such
purposes, duly endorsed by, or accompanied by a written instrument of transfer
in form satisfactory to the Trustee duly executed by the Holder hereof or such
Holder's attorney duly authorized in writing, and thereupon one or more new
Certificates in authorized denominations representing a like aggregate
Percentage Interest will be issued to the designated transferee.
The Certificates are issuable only as registered Certificates
without coupons in the Classes and denominations specified in the Agreement. As
provided in the Agreement and subject to certain limitations therein set forth,
this Certificate is exchangeable for one or more new Certificates evidencing
the same Class and in the same aggregate Percentage Interest, as requested by
the Holder surrendering the same.
No service charge will be made to the Certificateholders for
any such registration of transfer, but the Trustee may require payment of a sum
sufficient to cover any tax or other governmental charge payable in connection
therewith. The Depositor, the Servicer, the Trustee and any agent of any of
them may treat the Person in whose name this Certificate is registered as the
owner hereof for all purposes, and none of the Depositor, the Servicer, the
Trustee or any such agent shall be affected by notice to the contrary.
The obligations created by the Agreement and the Trust Fund
created thereby (other than the obligations to make payments to
Certificateholders with respect to the termination of the Agreement) shall
terminate upon the earlier of (i) the later of the (A) final payment or other
liquidation (or Advance with respect thereto) of the last Mortgage Loan
remaining in the Trust Fund and (B) disposition of all property acquired upon
foreclosure or deed in lieu of foreclosure of any Mortgage Loan and the
remittance of all funds due under the Agreement, or (ii) the optional
repurchase by the party named in the Agreement of all the Mortgage Loans and
other assets of the Trust Fund in accordance with the terms of the Agreement.
Such optional repurchase may be made only on or after the Distribution Date on
which the aggregate unpaid principal balance of the Mortgage Loans is less than
the percentage of the aggregate Stated Principal Balance specified in the
Agreement of the Mortgage Loans at the Cut-off Date. The exercise of such right
will effect the early retirement of the Certificates. In no event, however,
will the Trust Fund created by the Agreement continue beyond the expiration of
__ years after the death of certain persons identified in the Agreement.
Unless this Certificate has been countersigned by an
authorized signatory of the Trustee by manual signature, this Certificate shall
not be entitled to any benefit under the Agreement, or be valid for any
purpose.
IN WITNESS WHEREOF, the Trustee has caused this Certificate
to be duly executed.
Dated: November __, 1999 NORWEST BANK MINNESOTA,
NATIONAL ASSOCIATION
Not in its individual capacity but
solely as Trustee
By:_________________________________
Authorized Signatory
CERTIFICATE OF AUTHENTICATION
This is one of the Class R Certificates referred to in the
within-mentioned Agreement.
NORWEST BANK MINNESOTA,
NATIONAL ASSOCIATION
Authorized signatory of Norwest Bank
Minnesota, National Association not
in its individual capacity but
solely as Trustee
By:_________________________________
Authorized Signatory
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto ________________________________(Please print or typewrite
name and address including postal zip code of assignee) a Percentage Interest
evidenced by the within Mortgage Pass-Through Certificate and hereby authorizes
the transfer of registration of such interest to assignee on the Certificate
Register of the Trust Fund.
I (We) further direct the Certificate Registrar to issue a
new Certificate of a like denomination and Class, to the above named assignee
and deliver such Certificate to the following address:
-----------------------------------------------------------------------------
-----------------------------------------------------------------------------
Dated: ____________________________________________________________
Signature by or on behalf of assignor
------------------------------------------
Signature Guaranteed
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of
distribution:
Distributions shall be made, by wire transfer or otherwise,
in immediately available funds to____________________________________________
_________________________________________________ for the account of
_______________________________ account number __________, or, if mailed by
check, to _________________________________________. Applicable statements
should be mailed to
___________________________________________________________.
This information is provided by ______________________, the
assignee named above, or ____________________________, as its agent.
EXHIBIT B
FORM OF CLASS B CERTIFICATE
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE
IS A "REGULAR INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT," AS
THOSE TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE
INTERNAL REVENUE CODE OF 1986 (THE "CODE").
THE CERTIFICATE PRINCIPAL BALANCE OF THIS CERTIFICATE WILL BE
DECREASED BY THE PRINCIPAL PAYMENTS HEREON AND ANY REALIZED LOSSES ALLOCABLE
HERETO. ACCORDINGLY, FOLLOWING THE INITIAL ISSUANCE OF THE CERTIFICATES, THE
CERTIFICATE PRINCIPAL BALANCE OF THIS CERTIFICATE WILL BE DIFFERENT FROM THE
DENOMINATION SHOWN BELOW. ANYONE ACQUIRING THIS CERTIFICATE MAY ASCERTAIN ITS
CERTIFICATE PRINCIPAL BALANCE BY INQUIRY OF THE TRUSTEE NAMED HEREIN.
[UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY TO THE ISSUER OR ITS AGENT FOR
REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS
REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER NAME AS REQUESTED BY AN
AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY AND ANY PAYMENT IS
MADE TO CEDE & CO., ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL SINCE THE REGISTERED OWNER HEREOF,
CEDE & CO., HAS AN INTEREST HEREIN.]
[THIS CERTIFICATE HAS NOT BEEN AND WILL NOT BE REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR THE SECURITIES LAWS OF ANY
STATE AND MAY NOT BE RESOLD OR TRANSFERRED UNLESS IT IS REGISTERED PURSUANT TO
SUCH ACT AND LAWS OR IS SOLD OR TRANSFERRED IN TRANSACTIONS WHICH ARE EXEMPT
FROM REGISTRATION UNDER SUCH ACT AND UNDER APPLICABLE STATE LAW AND IS
TRANSFERRED IN ACCORDANCE WITH THE PROVISIONS OF SECTION 5.02 OF THE
AGREEMENT.]
THIS CERTIFICATE MAY NOT BE ACQUIRED DIRECTLY OR INDIRECTLY
BY, OR ON BEHALF OF, AN EMPLOYEE BENEFIT PLAN OR OTHER RETIREMENT ARRANGEMENT
WHICH IS SUBJECT TO TITLE I OF THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF
1974, AS AMENDED, AND/OR SECTION 4975 OF THE INTERNAL REVENUE CODE OF 1986, AS
AMENDED, UNLESS THE PROPOSED TRANSFER AND/OR HOLDING OF A CERTIFICATE AND THE
SERVICING, MANAGEMENT AND/OR OPERATION OF THE TRUST AND ITS ASSETS: (I) WILL
NOT RESULT IN ANY PROHIBITED TRANSACTION WHICH IS NOT COVERED UNDER AN
INDIVIDUAL OR CLASS PROHIBITED TRANSACTION EXEMPTION, INCLUDING, BUT NOT
LIMITED TO, PROHIBITED TRANSACTION EXEMPTION ("PTE") 84-14, ▇▇▇ ▇▇-▇▇, ▇▇▇
▇▇-▇, ▇▇▇ ▇▇-▇▇, ▇▇▇ 96-23 OR SECTION 401(C) OF ERISA AND THE REGULATIONS TO BE
PROMULGATED THEREUNDER AND (II) WILL NOT GIVE RISE TO ANY ADDITIONAL FIDUCIARY
DUTIES ON THE PART OF THE DEPOSITOR, THE SERVICER OR THE TRUSTEE, WHICH WILL BE
DEEMED REPRESENTED BY AN OWNER OF A BOOK-ENTRY CERTIFICATE AND WILL BE
EVIDENCED BY A REPRESENTATION OR AN OPINION OF COUNSEL TO SUCH EFFECT BY OR ON
BEHALF OF A HOLDER OF A DEFINITIVE CERTIFICATE.
[THE FOLLOWING INFORMATION IS PROVIDED SOLELY FOR THE
PURPOSES OF APPLYING THE U.S. FEDERAL INCOME TAX ORIGINAL ISSUE DISCOUNT
("OID") RULES TO THIS CERTIFICATE. THE ISSUE DATE OF THIS CERTIFICATE IS
NOVEMBER __, 1999. ASSUMING THAT THE MORTGAGE LOANS PREPAY AT [175]% OF THE
PREPAYMENT ASSUMPTION (AS DESCRIBED IN THE PROSPECTUS SUPPLEMENT), [AND
ASSUMING A CONSTANT PASS-THROUGH RATE EQUAL TO THE INITIAL PASS-THROUGH RATE,]
THIS CERTIFICATE HAS BEEN ISSUED WITH NO MORE THAN $_____ OF OID PER [$1,000]
OF INITIAL CERTIFICATE PRINCIPAL BALANCE, THE YIELD TO MATURITY IS ___% AND THE
AMOUNT OF OID ATTRIBUTABLE TO THE INITIAL ACCRUAL PERIOD IS NO MORE THAN
$_______ PER [$1,000] OF INITIAL CERTIFICATE PRINCIPAL BALANCE, COMPUTED USING
THE APPROXIMATE METHOD. NO REPRESENTATION IS MADE THAT THE MORTGAGE LOANS WILL
PREPAY AT A RATE BASED ON THE STANDARD PREPAYMENT ASSUMPTION OR AT ANY OTHER
RATE OR AS TO THE CONSTANCY OF THE PASS-THROUGH RATE.]
Certificate No. 1 ___% Pass-Through Rate
Class B-__
Date of Pooling and Servicing
Agreement and Cut-off Date:
November 1, 1999
First Distribution Date: Aggregate Initial Certificate Principal Balance
__________________ of this Certificate as of the
Cut-off Date: $_________
Servicer: Initial Certificate Principal Balance of this
GMAC Mortgage Corporation Certificate as of the Cut-off Date: $__________
CUSIP _____
Assumed Final
Distribution Date:
---------------
MORTGAGE PASS-THROUGH CERTIFICATE
SERIES 1999-J2
evidencing a percentage interest in the distributions allocable to the
Class B-__ Certificates with respect to a Trust Fund consisting
primarily of a pool of [conventional one- to four-family fixed
interest rate] mortgage loans sold by STRUCTURED ASSET MORTGAGE
INVESTMENTS INC.
This Certificate is payable solely from the assets of the
Trust Fund, and does not represent an obligation of or interest in Structured
Asset Mortgage Investments Inc., the Servicer or the Trustee referred to below
or any of their affiliates or any other person. Neither this Certificate nor
the underlying Mortgage Loans are guaranteed or insured by any governmental
entity or by Structured Asset Mortgage Investments Inc., the Servicer or the
Trustee or any of their affiliates or any other person. None of Structured
Asset Mortgage Investments Inc., the Servicer or any of their affiliates will
have any obligation with respect to any certificate or other obligation secured
by or payable from payments on the Certificates.
This certifies that _________________ is the registered owner
of the Percentage Interest evidenced hereby in the beneficial ownership
interest of Certificates of the same Class as this Certificate in a trust (the
"Trust Fund") generally consisting of [thirty year, first lien, fixed rate]
mortgages secured by [one- to four- family residences and individual
condominium units] (collectively, the "Mortgage Loans") sold by Structured
Asset Mortgage Investments Inc. ("SAMI"). The Mortgage Loans were sold by EMC
Mortgage Corporation ("EMC") to SAMI. GMAC Mortgage Corporation ("GMACM") will
act as servicer of the Mortgage Loans (the "Servicer," which term includes any
successors thereto under the Agreement referred to below). The Trust Fund was
created pursuant to the Pooling and Servicing Agreement dated as of the Cut-off
Date specified above (the "Agreement"), between SAMI, as depositor (the
"Depositor"), GMACM, as servicer, and Norwest Bank Minnesota, National
Association, as trustee (the "Trustee"), a summary of certain of the pertinent
provisions of which is set forth hereafter. To the extent not defined herein,
capitalized terms used herein shall have the meaning ascribed to them in the
Agreement. This Certificate is issued under and is subject to the terms,
provisions and conditions of the Agreement, to which Agreement the Holder of
this Certificate by virtue of its acceptance hereof assents and by which such
Holder is bound.
Interest on this Certificate will accrue during the month
prior to the month in which a Distribution Date (as hereinafter defined) occurs
on the Certificate Principal Balance hereof at a per annum rate equal to the
Pass-Through Rate set forth above. The Trustee will distribute on the 25th day
of each month, or, if such 25th day is not a Business Day, the immediately
following Business Day (each, a "Distribution Date"), commencing on the First
Distribution Date specified above, to the Person in whose name this Certificate
is registered at the close of business on the last Business Day (or if such
last day is not a Business Day, the Business Day immediately preceding such
last day) of the calendar month preceding the month of such Distribution Date,
an amount equal to the product of the Percentage Interest evidenced by this
Certificate and the amount (of interest and principal, if any) required to be
distributed to the Holders of Certificates of the same Class as this
Certificate. The Assumed Final Distribution Date is the first anniversary of
the Distribution Date immediately following the latest scheduled maturity date
of any Mortgage Loan and is not likely to be the date on which the Certificate
Principal Balance of this Class of Certificates will be reduced to zero.
Distributions on this Certificate will be made by the Trustee
by check mailed to the address of the Person entitled thereto as such name and
address shall appear on the Certificate Register or, if such Person so requests
by notifying the Trustee in writing as specified in the Agreement.
Notwithstanding the above, the final distribution on this Certificate will be
made after due notice by the Trustee of the pendency of such distribution and
only upon presentation and surrender of this Certificate at the office or
agency appointed by the Trustee for that purpose and designated in such notice.
The Initial Certificate Principal Balance of this Certificate is set forth
above. The Certificate Principal Balance hereof will be reduced to the extent
of distributions allocable to principal hereon and any Realized Losses
allocable hereto.
[No transfer of this Certificate will be made unless such
transfer is exempt from the registration requirements of the Securities Act of
1933, as amended, and any applicable state securities laws or is made in
accordance with said Act and laws. In the event that such a transfer is to be
made, (i) the Trustee or the Depositor may require an opinion of counsel
acceptable to and in form and substance satisfactory to the Trustee and the
Depositor that such transfer is exempt (describing the applicable exemption and
the basis therefor) from or is being made pursuant to the registration
requirements of the Securities Act of 1933, as amended, and of any applicable
statute of any state and (ii) the transferee shall execute an investment letter
in the form described by the Agreement. The Holder hereof desiring to effect
such transfer shall, and does hereby agree to, indemnify the Trustee, the
Depositor, the Servicer and the Certificate Registrar acting on behalf of the
Trustee against any liability that may result if the transfer is not so exempt
or is not made in accordance with such Federal and state laws.]
This Certificate may not be acquired directly or indirectly
by, or on behalf of, an employee benefit plan or other retirement arrangement
which is subject to Title I of the Employee Retirement Income Security Act of
1974, as amended, and/or section 4975 of the Internal Revenue Code of 1986, as
amended, unless the proposed transfer and/or holding of a Certificate and the
servicing, management and/or operation of the trust and its assets: (i) will
not result in any prohibited transaction which is not covered under an
individual or class prohibited transaction exemption, including, but not
limited to, Prohibited Transaction Exemption ("PTE") 84-14, ▇▇▇ ▇▇-▇▇, ▇▇▇
▇▇-▇, ▇▇▇ ▇▇-▇▇, ▇▇▇ ▇▇-▇▇ or Section 401(c) of ERISA and the regulations
promulgated thereunder and (ii) will not give rise to any additional fiduciary
duties on the part of the Depositor, the Servicer or the Trustee, which will be
deemed represented by an owner of a Book-Entry Certificate and will be
evidenced by a representation or an Opinion of Counsel to such effect by or on
behalf of a Holder of a Definitive Certificate.
This Certificate is one of a duly authorized issue of
Certificates designated as set forth on the face hereof (the "Certificates"),
issued in __________ Classes. The Certificates, in the aggregate, evidence the
entire beneficial ownership interest in the Trust Fund formed pursuant to the
Agreement.
The Certificateholder, by its acceptance of this Certificate,
agrees that it will look solely to the Trust Fund for payment hereunder and
that the Trustee is not liable to the Certificateholders for any amount payable
under this Certificate or the Agreement or, except as expressly provided in the
Agreement, subject to any liability under the Agreement.
This Certificate does not purport to summarize the Agreement
and reference is made to the Agreement for the interests, rights and
limitations of rights, benefits, obligations and duties evidenced hereby, and
the rights, duties and immunities of the Trustee.
The Agreement permits, with certain exceptions therein
provided, the amendment thereof and the modification of the rights and
obligations of the Depositor and the rights of the Certificateholders under the
Agreement from time to time by the Depositor and the Trustee with the consent
of the Holders of Certificates evidencing Percentage Interests aggregating not
less than ____% (or in certain cases, Holders of Certificates of affected
Classes evidencing such percentage of the Percentage Interests thereof). Any
such consent by the Holder of this Certificate shall be conclusive and binding
on such Holder and upon all future Holders of this Certificate and of any
Certificate issued upon the transfer hereof or in lieu hereof whether or not
notation of such consent is made upon this Certificate. The Agreement also
permits the amendment thereof, in certain limited circumstances, without the
consent of the Holders of any of the Certificates.
As provided in the Agreement and subject to certain
limitations therein set forth, the transfer of this Certificate is registrable
with the Trustee upon surrender of this Certificate for registration of
transfer at the offices or agencies maintained by the Trustee for such
purposes, duly endorsed by, or accompanied by a written instrument of transfer
in form satisfactory to the Trustee duly executed by the Holder hereof or such
Holder's attorney duly authorized in writing, and thereupon one or more new
Certificates in authorized denominations representing a like aggregate
Percentage Interest will be issued to the designated transferee.
The Certificates are issuable only as registered Certificates
without coupons in the Classes and denominations specified in the Agreement. As
provided in the Agreement and subject to certain limitations therein set forth,
this Certificate is exchangeable for one or more new Certificates evidencing
the same Class and in the same aggregate Percentage Interest, as requested by
the Holder surrendering the same.
No service charge will be made to the Certificateholders for
any such registration of transfer, but the Trustee may require payment of a sum
sufficient to cover any tax or other governmental charge payable in connection
therewith. The Depositor, the Servicer, the Trustee and any agent of any of
them may treat the Person in whose name this Certificate is registered as the
owner hereof for all purposes, and none of the Depositor, the Servicer, the
Trustee or any such agent shall be affected by notice to the contrary.
The obligations created by the Agreement and the Trust Fund
created thereby (other than the obligations to make payments to
Certificateholders with respect to the termination of the Agreement) shall
terminate upon the earlier of (i) the later of the (A) final payment or other
liquidation (or Advance with respect thereto) of the last Mortgage Loan
remaining in the Trust Fund and (B) disposition of all property acquired upon
foreclosure or deed in lieu of foreclosure of any Mortgage Loan and the
remittance of all funds due under the Agreement, or (ii) the optional
repurchase by the party named in the Agreement of all the Mortgage Loans and
other assets of the Trust Fund in accordance with the terms of the Agreement.
Such optional repurchase may be made only on or after the Distribution Date on
which the aggregate unpaid principal balance of the Mortgage Loans is less than
the percentage of the aggregate Stated Principal Balance specified in the
Agreement of the Mortgage Loans at the Cut-off Date. The exercise of such right
will effect the early retirement of the Certificates. In no event, however,
will the Trust Fund created by the Agreement continue beyond the expiration of
___ years after the death of certain persons identified in the Agreement.
Unless this Certificate has been countersigned by an
authorized signatory of the Trustee by manual signature, this Certificate shall
not be entitled to any benefit under the Agreement, or be valid for any
purpose.
IN WITNESS WHEREOF, the Trustee has caused this Certificate
to be duly executed.
Dated: November ___, 1999 NORWEST BANK MINNESOTA,
NATIONAL ASSOCIATION
Not in its individual capacity but
solely as Trustee
By:______________________________________
Authorized Signatory
CERTIFICATE OF AUTHENTICATION
This is one of the Class B-__ Certificates referred to in the
within-mentioned Agreement.
NORWEST BANK MINNESOTA,
NATIONAL ASSOCIATION
Authorized signatory of Norwest Bank
Minnesota, National Association, not
in its individual capacity
but solely as Trustee
By:______________________________________
Authorized Signatory
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto _______________________________(Please print or typewrite name
and address including postal zip code of assignee) a Percentage Interest
evidenced by the within Mortgage Pass-Through Certificate and hereby authorizes
the transfer of registration of such interest to assignee on the Certificate
Register of the Trust Fund.
I (We) further direct the Certificate Registrar to issue a
new Certificate of a like denomination and Class, to the above named assignee
and deliver such Certificate to the following address:
-----------------------------------------------------------------------------
-----------------------------------------------------------------------------
Dated: ____________________________________________________________
Signature by or on behalf of assignor
------------------------------------------
Signature Guaranteed
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of
distribution:
Distributions shall be made, by wire transfer or otherwise,
in immediately available funds to____________________________________________
_________________________________________________ for the account of
_______________________________ account number __________, or, if mailed by
check, to _________________________________________. Applicable statements
should be mailed to___________________________________________________________.
This information is provided by ______________________, the
assignee named above, or ____________________________, as its agent.
EXHIBIT C
[RESERVED]
EXHIBIT D
Remittance Report
EXHIBIT E
REQUEST FOR RELEASE OF DOCUMENTS
To: Norwest Bank Minnesota, National Association
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇.▇.
▇▇▇▇., ▇▇ ▇▇▇▇▇-▇▇▇▇
Attn: Inventory Central
Re: Pooling and Servicing Agreement dated as of November 1, 1999
among Structured Asset Mortgage Investments Inc., as Seller,
GMAC Mortgage Corporation, as Servicer and Norwest Bank
Minnesota, National Association, as Trustee
In connection with the administration of the Mortgage Loans
held by you, as Custodian, pursuant to the above-captioned Pooling and
Servicing Agreement, we request the release, and hereby acknowledge receipt, of
the Custodian's Mortgage File for the Mortgage Loan described below, for the
reason indicated.
Mortgage Loan Number:
Mortgagor Name, Address & Zip Code:
Reasons for Requesting Documents (check one):
_____________ 1. Mortgage Paid in Full
------------- 2. Foreclosure
------------- 3. Substitution
------------- 4. Other Liquidtion
------------- 5. Non-liquidation
Reason: ________________________
By: _____________________________
(authorized signer)
Issuer: __________________________
Address: ____________________________
----------------------------
Date: _______________________________
Custodian
Norwest Bank Minnesota, National Association
Please acknowledge the execution of the above request by your signature and
date below:
--------------------------------------- -----------------
Signature Date
Documents returned to Custodian:
--------------------------------------- -----------------
Custodian Date
EXHIBIT F-1
FORM OF INVESTOR REPRESENTATION LETTER
______________, 19__
Structured Asset Mortgage Investments Inc.
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▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Norwest Bank Minnesota, National Association
▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
GMAC Mortgage Corporation
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Structured Asset Mortgage Investments Inc. Series 1999-J2
Re: Mortgage Pass-Through Certificates,
Series 1999-J2, Class B-__
Ladies and Gentlemen:
_________________________ (the "Purchaser") intends to
purchase from ___________________________ (the "Seller") $_____________ Initial
Certificate Principal Balance of Mortgage Pass-Through Certificates, Series
1999-J2, Class B-__ (the "Certificates"), issued pursuant to the Pooling and
Servicing Agreement (the "Pooling and Servicing Agreement"), dated as of
November 1, 1999 among Structured Asset Mortgage Investments Inc., as depositor
(the "Depositor"), GMAC Mortgage Corporation, as servicer (the "Servicer"), and
Norwest Bank Minnesota, National Association, as trustee (the "Trustee"). All
terms used herein and not otherwise defined shall have the meanings set forth
in the Pooling and Servicing Agreement. The Purchaser hereby certifies,
represents and warrants to, and covenants with, the Depositor, the Trustee and
the Servicer that:
1. The Purchaser understands that (a) the
Certificates have not been and will not be registered or
qualified under the Securities Act of 1933, as amended (the
"Act") or any state securities law, (b) the Depositor is not
required to so register or qualify the Certificates, (c) the
Certificates may be resold only if registered and qualified
pursuant to the provisions of the Act or any state securities
law, or if an exemption from such registration and
qualification is available, (d) the Pooling and Servicing
Agreement contains restrictions regarding the transfer of the
Certificates and (e) the Certificates will bear a legend to
the foregoing effect.
2. The Purchaser is acquiring the Certificates for
its own account for investment only and not with a view to or
for sale in connection with any distribution thereof in any
manner that would violate the Act or any applicable state
securities laws.
3. The Purchaser is (a) a substantial, sophisticated
institutional investor having such knowledge and experience
in financial and business matters, and, in particular, in
such matters related to securities similar to the
Certificates, such that it is capable of evaluating the
merits and risks of investment in the Certificates, (b) able
to bear the economic risks of such an investment and (c) an
"accredited investor" within the meaning of Rule 501(a)
promulgated pursuant to the Act.
4. The Purchaser has been furnished with, and has
had an opportunity to review (a) [a copy of the Private
Placement Memorandum, dated ___________________, 19__,
relating to the Certificates (b)] a copy of the Pooling and
Servicing Agreement and [b] [c] such other information
concerning the Certificates, the Mortgage Loans and the
Depositor as has been requested by the Purchaser from the
Depositor or the Seller and is relevant to the Purchaser's
decision to purchase the Certificates. The Purchaser has had
any questions arising from such review answered by the
Depositor or the Seller to the satisfaction of the Purchaser.
[If the Purchaser did not purchase the Certificates from the
Seller in connection with the initial distribution of the
Certificates and was provided with a copy of the Private
Placement Memorandum (the "Memorandum") relating to the
original sale (the "Original Sale") of the Certificates by
the Depositor, the Purchaser acknowledges that such
Memorandum was provided to it by the Seller, that the
Memorandum was prepared by the Depositor solely for use in
connection with the Original Sale and the Depositor did not
participate in or facilitate in any way the purchase of the
Certificates by the Purchaser from the Seller, and the
Purchaser agrees that it will look solely to the Seller and
not to the Depositor with respect to any damage, liability,
claim or expense arising out of, resulting from or in
connection with (a) error or omission, or alleged error or
omission, contained in the Memorandum, or (b) any
information, development or event arising after the date of
the Memorandum.]
5. The Purchaser has not and will not nor has it
authorized or will it authorize any person to (a) offer,
pledge, sell, dispose of or otherwise transfer any
Certificate, any interest in any Certificate or any other
similar security to any person in any manner, (b) solicit any
offer to buy or to accept a pledge, disposition of other
transfer of any Certificate, any interest in any Certificate
or any other similar security from any person in any manner,
(c) otherwise approach or negotiate with respect to any
Certificate, any interest in any Certificate or any other
similar security with any person in any manner, (d) make any
general solicitation by means of general advertising or in
any other manner or (e) take any other action, that (as to
any of (a) through (e) above) would constitute a distribution
of any Certificate under the Act, that would render the
disposition of any Certificate a violation of Section 5 of
the Act or any state securities law, or that would require
registration or qualification pursuant thereto. The Purchaser
will not sell or otherwise transfer any of the Certificates,
except in compliance with the provisions of the Pooling and
Servicing Agreement.
6. The Purchaser hereby certifies, represents and
warrants to, and covenants with the Depositor, the Trustee
and the Servicer that the following statements in (a), (b) or
(c) are correct:
(a) it is not acquiring the Certificates
directly or indirectly by, or on behalf of, an
employee benefit plan or other retirement
arrangement which is subject to Title I of the
Employee Retirement Income Security Act of 1974, as
amended, and/or section 4975 of the Internal Revenue
Code of 1986, as amended,
(b) it is an insurance company and (x) such
purchase and holding are permissible under
applicable law, will not constitute or result in a
non-exempt prohibited transaction under ERISA or
Section 4975 of the Code, will not subject the
Depositor, the Trustee or the Servicer to any
obligation in addition to those undertaken in the
Pooling and Servicing Agreement and (y) the
purchaser is an insurance company which is
purchasing such Certificate with funds contained in
an "insurance company general account" (as such term
is defined in Section V(e) of the Prohibited
Transaction Class Exemption 95-60 ("PTCE 95-60")),
the purchase and holding of such Certificate are
covered under Sections I and III of PTCE 95-60; and
there is no Plan with respect to which the amount of
such general account's reserves and liabilities for
contracts held by or on behalf of such Plan and all
other Plans maintained by the same employer (or any
"affiliate" thereof, as defined in PTCE 95-60) or by
the same employee organization, exceeds 10% of the
total of all reserves and liabilities of such
general account (as determined under PTCE 95-60) as
of the date of the acquisition of such Certificate,
or
(c) it is providing an opinion of counsel
satisfactory to the Depositor, the Trustee and the
Servicer that the purchase and holding of such
Certificate by a Plan or a person acting on behalf
of a Plan or using a Plan's assets are permissible
under applicable law, will not constitute or result
in a non-exempt prohibited transaction under ERISA
or Section 4975 of the Code, will not result in the
assets of the Trust Fund being deemed to be "plan
assets" and subject to the prohibited transaction
requirements of ERISA and the Code, and will not
subject the Depositor, the Trustee or the Servicer
to any obligation in addition to those undertaken in
the Pooling and Servicing Agreement.
In addition, the Purchaser hereby certifies, represents and
warrants to, and covenants with, the Depositor, the Trustee and the Servicer
that the Purchaser will not transfer such Certificates to any Plan or person
unless either such Plan or person meets the requirements set forth in either
(a) or (b) above.
Very truly yours,
------------------------------
(Purchaser)
By:___________________________
Name: ________________________
Title: _______________________
EXHIBIT F-2
FORM OF TRANSFEROR REPRESENTATION LETTER
_____, 19__
Structured Asset Mortgage Investments Inc.
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▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Norwest Bank Minnesota, National Association
▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Structured Asset Mortgage Investments Inc. 1999-J2
Re: Mortgage Pass-Through Certificates,
Series 1999-J2, Class B-__
Ladies and Gentlemen:
In connection with the sale by (the "Seller") to (the
"Purchaser") of $ Initial Certificate Principal Balance of Mortgage
Pass-Through Certificates, Series 1999-J2, Class B-__ (the "Certificates"),
issued pursuant to the Pooling and Servicing Agreement (the "Pooling and
Servicing Agreement"), dated as of November 1, 1999 among Structured Asset
Mortgage Investments Inc., as depositor (the "Depositor"), GMAC Mortgage
Corporation, as servicer, and Norwest Bank Minnesota, National Association, as
trustee (the "Trustee"). The Seller hereby certifies, represents and warrants
to, and covenants with, the Depositor and the Trustee that:
Neither the Seller nor anyone acting on its behalf has (a)
offered, pledged, sold, disposed of or otherwise transferred any Certificate,
any interest in any Certificate or any other similar security to any person in
any manner, (b) has solicited any offer to buy or to accept a pledge,
disposition or other transfer of any Certificate, any interest in any
Certificate or any other similar security from any person in any manner, (c)
has otherwise approached or negotiated with respect to any Certificate, any
interest in any Certificate or any other similar security with any person in
any manner, (d) has made any general solicitation by means of general
advertising or in any other manner, or (e) has taken any other action, that (as
to any of (a) through (e) above) would constitute a distribution of the
Certificates under the Securities Act of 1933 (the "Act"), that would render
the disposition of any Certificate a violation of Section 5 of the Act or any
state securities law, or that would require registration or qualification
pursuant thereto.
The Seller will not act, in any manner set forth in the foregoing sentence with
respect to any Certificate. The Seller has not and will not sell or otherwise
transfer any of the Certificates, except in compliance with the provisions of
the Pooling and Servicing Agreement.
Very truly yours,
------------------------
(Seller)
By:__________________________
Name:_________________________
Title:________________________
EXHIBIT F-3
[FORM OF RULE 144A INVESTMENT REPRESENTATION]
Description of Rule 144A Securities, including numbers:
--------------------------------------------------------------
--------------------------------------------------------------
--------------------------------------------------------------
--------------------------------------------------------------
The undersigned seller, as registered holder (the "Seller"),
intends to transfer the Rule 144A Securities described above to the undersigned
buyer (the "Buyer").
1. In connection with such transfer and in accordance with
the agreements pursuant to which the Rule 144A Securities were issued, the
Seller hereby certifies the following facts: Neither the Seller nor anyone
acting on its behalf has offered, transferred, pledged, sold or otherwise
disposed of the Rule 144A Securities, any interest in the Rule 144A Securities
or any other similar security to, or solicited any offer to buy or accept a
transfer, pledge or other disposition of the Rule 144A Securities, any interest
in the Rule 144A Securities or any other similar security from, or otherwise
approached or negotiated with respect to the Rule 144A Securities, any interest
in the Rule 144A Securities or any other similar security with, any person in
any manner, or made any general solicitation by means of general advertising or
in any other manner, or taken any other action, that would constitute a
distribution of the Rule 144A Securities under the Securities Act of 1933, as
amended (the "1933 Act"), or that would render the disposition of the Rule 144A
Securities a violation of Section 5 of the 1933 Act or require registration
pursuant thereto, and that the Seller has not offered the Rule 144A Securities
to any person other than the Buyer or another "qualified institutional buyer"
as defined in Rule 144A under the ▇▇▇▇ ▇▇▇.
2. The Buyer warrants and represents to, and covenants with,
the Seller, the Depositor, the Trustee and the Servicer (as defined in the
Pooling and Servicing Agreement (the "Agreement"), dated as of November 1, 1999
among GMAC Mortgage Corporation as Servicer, Structured Asset Mortgage
Investments Inc. as Depositor, and Norwest Bank Minnesota, National Association
as trustee, pursuant to Section 5.02 of the Agreement as follows:
a. The Buyer understands that the Rule 144A
Securities have not been registered under the 1933 Act or the
securities laws of any state.
b. The Buyer considers itself a substantial,
sophisticated institutional investor having such knowledge and
experience in financial and business matters that it is capable of
evaluating the merits and risks of investment in the Rule 144A
Securities.
c. The Buyer has been furnished with all information
regarding the Rule 144A Securities that it has requested from the
Seller, the Trustee or the Servicer.
d. Neither the Buyer nor anyone acting on its behalf
has offered, transferred, pledged, sold or otherwise disposed of the
Rule 144A Securities, any interest in the Rule 144A Securities or any
other similar security to, or solicited any offer to buy or accept a
transfer, pledge or other disposition of the Rule 144A Securities, any
interest in the Rule 144A Securities or any other similar security
from, or otherwise approached or negotiated with respect to the Rule
144A Securities, any interest in the Rule 144A Securities or any other
similar security with, any person in any manner, or made any general
solicitation by means of general advertising or in any other manner,
or taken any other action, that would constitute a distribution of the
Rule 144A Securities under the 1933 Act or that would render the
disposition of the Rule 144A Securities a violation of Section 5 of
the 1933 Act or require registration pursuant thereto, nor will it
act, nor has it authorized or will it authorize any person to act, in
such manner with respect to the Rule 144A Securities.
e. The Buyer is a "qualified institutional buyer" as
that term is defined in Rule 144A under the 1933 Act and has completed
either of the forms of certification to that effect attached hereto as
Annex 1 or Annex 2. The Buyer is aware that the sale to it is being
made in reliance on Rule 144A. The Buyer is acquiring the Rule 144A
Securities for its own account or the accounts of other qualified
institutional buyers, understands that such Rule 144A Securities may
be resold, pledged or transferred only (i) to a person reasonably
believed to be a qualified institutional buyer that purchases for its
own account or for the account of a qualified institutional buyer to
whom notice is given that the resale, pledge or transfer is being made
in reliance on Rule 144A, or (ii) pursuant to another exemption from
registration under the 1933 Act.
3. The Buyer
a. is not acquiring the Certificates directly or
indirectly by, or on behalf of, an employee benefit plan or other
retirement arrangement which is subject to Title I of the Employee
Retirement Income Security Act of 1974, as amended, and/or section
4975 of the Internal Revenue Code of 1986, as amended, or
b. is providing a representation or an opinion of
counsel to the effect that the proposed transfer and/or holding of the
Certificates and the servicing, management and/or operation of the
Trust and its assets: (I) will not result in any prohibited
transaction which is not covered under an individual or class
prohibited transaction exemption, including, but not limited to,
Prohibited Transaction Exemption ("PTE") 84-14, ▇▇▇ ▇▇-▇▇, ▇▇▇ ▇▇-▇,
▇▇▇ ▇▇-▇▇, ▇▇▇ ▇▇-▇▇ or Section 401(c) of ERISA and the regulations
promulgated thereunder and (II) will not give rise to any additional
fiduciary duties on the part of the Seller, the Depositor, the
Servicer or the Trustee.
4. This document may be executed in one or more counterparts
and by the different parties hereto on separate counterparts, each of which,
when so executed, shall be deemed to be an original; such counterparts,
together, shall constitute one and the same document.
IN WITNESS WHEREOF, each of the parties has executed this
document as of the date set forth below.
--------------------------------- -------------------------------
Print Name of Seller Print Name of Buyer
By:______________________________ By:____________________________
Name: Name:
Title: Title:
Taxpayer Identification: Taxpayer Identification:
No.______________________________ No. _____________________________
Date:____________________________ Date: ___________________________
ANNEX 1 TO EXHIBIT F-3
QUALIFIED INSTITUTIONAL BUYER STATUS UNDER SEC RULE 144A
[For Buyers Other Than Registered Investment Companies]
The undersigned hereby certifies as follows in connection with the
Rule 144A Investment Representation to which this Certification is attached:
1. As indicated below, the undersigned is the President,
Chief Financial Officer, Senior Vice President or other executive officer of
the Buyer.
2. In connection with purchases by the Buyer, the Buyer is a
"qualified institutional buyer" as that term is defined in Rule 144A under the
Securities Act of 1933 ("Rule 144A") because (i) the Buyer owned and/or
invested on a discretionary basis $______________________ in securities (except
for the excluded securities referred to below) as of the end of the Buyer's
most recent fiscal year (such amount being calculated in accordance with Rule
144A) and (ii) the Buyer satisfies the criteria in the category marked below.
___ Corporation, etc. The Buyer is a [Massachusetts] corporation
(other than a bank, savings and loan association or similar
institution) or similar business trust, partnership, or charitable
organization described in Section 501(c)(3) of the Internal Revenue
Code.
___ Bank. The Buyer (a) is a national bank or banking institution
organized under the laws of any State, territory or the District of
Columbia, the business of which is substantially confined to banking
and is supervised by the State or territorial banking commission or
similar official or is a foreign bank or equivalent institution, and
(b) has an audited net worth of at least $25,000,000 as demonstrated
in its latest annual financial statements, a copy of which is attached
hereto.
___ Savings and Loan. The Buyer (a) is a savings and loan association,
building and loan association, cooperative bank, homestead association
or similar institution, which is supervised and examined by a State or
Federal authority having supervision over any such institutions or is
a foreign savings and loan association or equivalent institution and
(b) has an audited net worth of at least $25,000,000 as demonstrated
in its latest annual financial statements.
___ Broker-Dealer. The Buyer is a dealer registered pursuant
to Section 15 of the Securities Exchange Act of 1934.
___ Insurance Company. The Buyer is an insurance company whose primary
and predominant business activity is the writing of insurance or the
reinsuring of risks underwritten by insurance companies and which is
subject to supervision by the insurance commissioner or a similar
official or agency of a State or territory or the District of
Columbia.
___ State or Local Plan. The Buyer is a plan established and
maintained by a State, its political subdivisions, or any agency or
instrumentality of the State or its political subdivisions, for the
benefit of its employees.
___ ERISA Plan. The Buyer is an employee benefit plan within the
meaning of Title I of the Employee Retirement Income Security Act of
1974.
___ Investment Adviser. The Buyer is an investment adviser
registered under the Investment Advisers Act of 1940.
___ SBIC. The Buyer is a Small Business Investment Company
licensed by the U.S. Small Business Administration under Section
301(c) or (d) of the Small Business Investment Act of 1958.
___ Business Development Company. The Buyer is a business
development company as defined in Section 202(a)(22) of the
Investment Advisers Act of 1940.
___ Trust Fund. The Buyer is a trust fund whose trustee is a bank or
trust company and whose participants are exclusively (a) plans
established and maintained by a State, its political subdivisions, or
any agency or instrumentality of the State or its political
subdivisions, for the benefit of its employees, or (b) employee
benefit plans within the meaning of Title I of the Employee Retirement
Income Security Act of 1974, but is not a trust fund that includes as
participants individual retirement accounts or H.R. 10 plans.
3. The term "securities" as used herein does not include (i)
securities of issuers that are affiliated with the Buyer, (ii) securities that
are part of an unsold allotment to or subscription by the Buyer, if the Buyer
is a dealer, (iii) bank deposit notes and certificates of deposit, (iv) loan
participations, (v) repurchase agreements, (vi) securities owned but subject to
a repurchase agreement and (vii) currency, interest rate and commodity swaps.
4. For purposes of determining the aggregate amount of
securities owned and/or invested on a discretionary basis by the Buyer, the
Buyer used the cost of such securities to the Buyer and did not include any of
the securities referred to in the preceding paragraph. Further, in determining
such aggregate amount, the Buyer may have included securities owned by
subsidiaries of the Buyer, but only if such subsidiaries are consolidated with
the Buyer in its financial statements prepared in accordance with generally
accepted accounting principles and if the investments of such subsidiaries are
managed under the Buyer's direction. However, such securities were not included
if the Buyer is a majority-owned, consolidated subsidiary of another enterprise
and the Buyer is not itself a reporting company under the Securities Exchange
Act of 1934.
5. The Buyer acknowledges that it is familiar with Rule 144A
and understands that the seller to it and other parties related to the
Certificates are relying and will continue to rely on the statements made
herein because one or more sales to the Buyer may be in reliance on Rule 144A.
___ ___ Will the Buyer be purchasing the Rule 144A
Yes No Securities only for the Buyer's own account?
6. If the answer to the foregoing question is "no", the Buyer
agrees that, in connection with any purchase of securities sold to the Buyer
for the account of a third party (including any separate account) in reliance
on Rule 144A, the Buyer will only purchase for the account of a third party
that at the time is a "qualified institutional buyer" within the meaning of
Rule 144A. In addition, the Buyer agrees that the Buyer will not purchase
securities for a third party unless the Buyer has obtained a current
representation letter from such third party or taken other appropriate steps
contemplated by Rule 144A to conclude that such third party independently meets
the definition of "qualified institutional buyer" set forth in Rule 144A.
7. The Buyer will notify each of the parties to which this
certification is made of any changes in the information and conclusions herein.
Until such notice is given, the Buyer's purchase of Rule 144A Securities will
constitute a reaffirmation of this certification as of the date of such
purchase.
---------------------------------
Print Name of Buyer
By: _________________________
Name:
Title:
Date:____________________
ANNEX 2 TO EXHIBIT F-3
QUALIFIED INSTITUTIONAL BUYER STATUS UNDER SEC RULE 144A
[For Buyers That Are Registered Investment Companies]
The undersigned hereby certifies as follows in connection
with the Rule 144A Investment Representation to which this Certification is
attached:
1. As indicated below, the undersigned is the President,
Chief Financial Officer or Senior Vice President of the Buyer or, if the Buyer
is a "qualified institutional buyer" as that term is defined in Rule 144A under
the Securities Act of 1933 ("Rule 144A") because Buyer is part of a Family of
Investment Companies (as defined below), is such an officer of the Adviser.
2. In connection with purchases by Buyer, the Buyer is a
"qualified institutional buyer" as defined in SEC Rule 144A because (i) the
Buyer is an investment company registered under the Investment Company Act of
1940, and (ii) as marked below, the Buyer alone, or the Buyer's Family of
Investment Companies, owned at least $100,000,000 in securities (other than the
excluded securities referred to below) as of the end of the Buyer's most recent
fiscal year. For purposes of determining the amount of securities owned by the
Buyer or the Buyer's Family of Investment Companies, the cost of such
securities was used.
____ The Buyer owned $___________________ in securities
(other than the excluded securities referred
to below) as of the end of the Buyer's most recent fiscal
year (such amount being calculated in accordance with
Rule 144A).
____ The Buyer is part of a Family of Investment Companies which
owned in the aggregate $______________ in securities (other
than the excluded securities referred to below) as of the end
of the Buyer's most recent fiscal year (such amount being
calculated in accordance with Rule 144A).
3. The term "Family of Investment Companies" as used herein
means two or more registered investment companies (or series thereof) that have
the same investment adviser or investment advisers that are affiliated (by
virtue of being majority owned subsidiaries of the same parent or because one
investment adviser is a majority owned subsidiary of the other).
4. The term "securities" as used herein does not include (i)
securities of issuers that are affiliated with the Buyer or are part of the
Buyer's Family of Investment Companies, (ii) bank deposit notes and
certificates of deposit, (iii) loan participations, (iv) repurchase agreements,
(v) securities owned but subject to a repurchase agreement and (vi) currency,
interest rate and commodity swaps.
5. The Buyer is familiar with Rule 144A and understands that
each of the parties to which this certification is made are relying and will
continue to rely on the statements made herein because one or more sales to the
Buyer will be in reliance on Rule 144A. In addition, the Buyer will only
purchase for the Buyer's own account.
6. The undersigned will notify each of the parties to which
this certification is made of any changes in the information and conclusions
herein. Until such notice, the Buyer's purchase of Rule 144A Securities will
constitute a reaffirmation of this certification by the undersigned as of the
date of such purchase.
-----------------------------
Print Name of Buyer
By:_____________________________
Name: _______________________
Title:_______________________
IF AN ADVISER:
----------------------------------
Print Name of Buyer
Date:_____________________________
EXHIBIT F-4
FORM OF TRANSFEROR CERTIFICATE
__________________, 19__
Structured Asset Mortgage Investments Inc.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Norwest Bank Minnesota, National Association
▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Structured Asset Mortgage Investments Inc. Series 1999-J2
Re: Mortgage Pass-Through Certificates,
Series 1999-J2, Class R
Ladies and Gentlemen:
This letter is delivered to you in connection with the
transfer by _______________________________ (the "Seller") to
_______________________________ (the "Purchaser") of $_____________ Initial
Certificate Principal Balance of Mortgage Pass-Through Certificates, Series
1999-J2, Class R (the "Certificates"), pursuant to Section 5.02 of the Pooling
and Servicing Agreement (the "Pooling and Servicing Agreement"), dated as of
November 1, 1999 among Structured Asset Mortgage Investments Inc., as depositor
(the "Depositor"), GMAC Mortgage Corporation, as servicer and Norwest Bank
Minnesota, National Association, as trustee (the "Trustee"). All terms used
herein and not otherwise defined shall have the meanings set forth in the
Pooling and Servicing Agreement. The Seller hereby certifies, represents and
warrants to, and covenants with, the Depositor and the Trustee that:
1. No purpose of the Seller relating to the transfer of the
Certificate by the Seller to the Purchaser is or will be to impede the
assessment or collection of any tax.
2. The Seller understands that the Purchaser has delivered to
the Trustee and the Servicer a transfer affidavit and agreement in the form
attached to the Pooling and Servicing Agreement as Exhibit F-5. The Seller does
not know or believe that any representation contained therein is false.
3. The Seller has at the time of the transfer conducted a
reasonable investigation of the financial condition of the Purchaser as
contemplated by Treasury Regulations Section 1.860E-1(c)(4)(i) and, as a result
of that investigation, the Seller has determined that the Purchaser has
historically paid its debts as they become due and has found no significant
evidence to indicate that the Purchaser will not continue to pay its debts as
they become due in the future. The Seller understands that the transfer of a
Class R Certificate may not be respected for United States income tax purposes
(and the Seller may continue to be liable for United States income taxes
associated therewith) unless the Seller has conducted such an investigation.
4. The Seller has no actual knowledge that the proposed
Transferee is not both a United States Person and a Permitted Transferee.
Very truly yours,
__________________________
(Seller)
By:_______________________
Name:___________________
Title:__________________
EXHIBIT F-5
FORM OF TRANSFER AFFIDAVIT AND AGREEMENT
STATE OF )
: ss.:
COUNTY OF )
[NAME OF OFFICER], being first duly sworn, deposes and says:
1. That he/she is [Title of Officer] of [Name of Owner]
(record or beneficial owner of the Mortgage Pass-Through Certificates, Series
1999-J2, Class R (the "Class R Certificates") (the "Owner")), a [savings
institution] [corporation] duly organized and existing under the laws of [the
State of __________________] [the United States], on behalf of which he/she
makes this affidavit and agreement.
2. That the Owner (i) is not and will not be as of [date of
transfer] a "disqualified organization" within the meaning of Section
860E(e)(5) of the Internal Revenue Code of 1986, as amended (the "Code") or an
"electing large partnership' within the meaning of Section 775 of the Code,
(ii) will endeavor to remain other than a disqualified organization and an
electing large partnership for so long as it retains its ownership interest in
the Class R Certificates, and (iii) is acquiring the Class R Certificates for
its own account or for the account of another Owner from which it has received
an affidavit and agreement in substantially the same form as this affidavit and
agreement. (For this purpose, a "disqualified organization" means the United
States, any state or political subdivision thereof, any agency or
instrumentality of any of the foregoing (other than an instrumentality all of
the activities of which are subject to tax and, except for the Federal Home
Loan Mortgage Corporation, a majority of whose board of directors is not
selected by any such governmental entity) or any foreign government,
international organization or any agency or instrumentality of such foreign
government or organization, any rural electric or telephone cooperative, or any
organization (other than certain farmers' cooperatives) that is generally
exempt from federal income tax unless such organization is subject to the tax
on unrelated business taxable income).
3. That the Owner is aware (i) of the tax that would be
imposed on transfers of Class R Certificates to disqualified organizations
under the Code, that applies to all transfers of Class R Certificates after
________, _____; (ii) that such tax would be on the transferor, or, if such
transfer is through an agent (which person includes a broker, nominee or
middleman) for a disqualified organization, on the agent; (iii) that the person
otherwise liable for the tax shall be relieved of liability for the tax if the
transferee furnishes to such person an affidavit that the transferee is not a
disqualified organization and, at the time of transfer, such person does not
have actual knowledge that the affidavit is false; and (iv) that the Class R
Certificates may be "noneconomic residual interests" within the meaning of
Treasury regulations promulgated pursuant to the Code and that the transferor
of a noneconomic residual interest will remain liable for any taxes due with
respect to the income on such residual interest, unless no significant purpose
of the transfer was to impede the assessment or collection of tax.
4. That the Owner is aware of the tax imposed on a
"pass-through entity" holding Class R Certificates if at any time during the
taxable year of the pass-through entity a disqualified organization is the
record holder of an interest in such entity. (For this purpose, a "pass through
entity" includes a regulated investment company, a real estate investment trust
or common trust fund, a partnership, trust or estate, and certain
cooperatives.)
5. That the Owner is aware that the Trustee will not register
the transfer of any Class R Certificates unless the transferee, or the
transferee's agent, delivers to it an affidavit and agreement, among other
things, in substantially the same form as this affidavit and agreement. The
Owner expressly agrees that it will not consummate any such transfer if it
knows or believes that any of the representations contained in such affidavit
and agreement are false.
6. That the Owner has reviewed the restrictions set forth on
the face of the Class R Certificates and the provisions of Section 5.02(e) of
the Pooling and Servicing Agreement under which the Class R Certificates were
issued (in particular, clause (iii)(A) and (iii)(B) of Section 5.02(e) which
authorize the Trustee to deliver payments to a person other than the Owner and
negotiate a mandatory sale by the Trustee in the event the Owner holds such
Certificates in violation of Section 5.02(e)). The Owner expressly agrees to be
bound by and to comply with such restrictions and provisions.
7. That the Owner consents to any additional restrictions or
arrangements that shall be deemed necessary upon advice of counsel to
constitute a reasonable arrangement to ensure that the Class R Certificates
will only be owned, directly or indirectly, by an Owner that is not a
disqualified organization.
8. The Owner's Taxpayer Identification Number is
______________.
9. This affidavit and agreement relates only to the Class R
Certificates held by the Owner and not to any other holder of the Class R
Certificates. The Owner understands that the liabilities described herein
relate only to the Class R Certificates.
10. That no purpose of the Owner relating to the transfer of
any of the Class R Certificates by the Owner is or will be to impede the
assessment or collection of any tax.
11. That the Owner has no present knowledge or expectation
that it will be unable to pay any United States taxes owed by it so long as any
of the Certificates remain outstanding. In this regard, the Owner hereby
represents to and for the benefit of the person from whom it acquired the Class
R Certificate that the Owner intends to pay taxes associated with holding such
Class R Certificate as they become due, fully understanding that it may incur
tax liabilities in excess of any cash flows generated by the Class R
Certificate.
12. That the Owner has no present knowledge or expectation
that it will become insolvent or subject to a bankruptcy proceeding for so long
as any of the Class R Certificates remain outstanding.
13. The Owner is a citizen or resident of the United States,
a corporation, partnership (including an entity treated as a corporation or
partnership for federal income tax purposes) other entity created or organized
in, or under the laws of, the United States, any state thereof or the District
of Columbia (except, in the case of a partnership, to the extent provided in
regulations), an estate whose income from sources without the United States is
includible in gross income for United States federal income tax purposes
regardless of its connection with the conduct of a trade or business within the
United States, or a trust other than a "foreign trust" as defined in Section
7701(a)(31) of the Code.
14. The Owner hereby certifies, represents and warrants to,
and covenants with the Depositor, the Trustee and the Servicer that the
following statements in (a) or (b) are accurate: the Owner (a) is not acquiring
the Certificates directly or indirectly by, or on behalf of, an employee
benefit plan or other retirement arrangement which is subject to Title I of the
Employee Retirement Income Security Act of 1974, as amended, and/or section
4975 of the Internal Revenue Code of 1986, as amended, or
(a) is providing a representation or an opinion of counsel to the
effect that the proposed transfer and/or holding of the Certificates and the
servicing, management and/or operation of the Trust and its assets: (I) will
not result in any prohibited transaction which is not covered under an
individual or class prohibited transaction exemption, including, but not
limited to, Prohibited Transaction Exemption ("PTE") 84-14, ▇▇▇ ▇▇-▇▇, ▇▇▇
▇▇-▇, ▇▇▇ ▇▇-▇▇, ▇▇▇ ▇▇-▇▇ or Section 401(c) of ERISA and the regulations
promulgated thereunder and (II) will not give rise to any additional fiduciary
duties on the part of the Depositor, the Servicer or the Trustee.
In addition, the Owner hereby certifies, represents and
warrants to, and covenants with, the Depositor, the Trustee and the Servicer
that the Owner will not transfer such Certificates to any Plan or person unless
either such Plan or person meets the requirements set forth in either (a) or
(b) above.
Capitalized terms used but not defined herein shall have the
meanings assigned in the Pooling and Servicing Agreement.
IN WITNESS WHEREOF, the Owner has caused this instrument to
be executed on its behalf, pursuant to the authority of its Board of Directors,
by its [Title of Officer] and its corporate seal to be hereunto attached,
attested by its [Assistant] Secretary, this ____ day of _______________, 199__.
[NAME OF OWNER]
By:____________________________________
[Name of Officer]
[Title of Officer]
[Corporate Seal]
ATTEST:
--------------------------
[Assistant] Secretary
Personally appeared before me the above-named [Name of
Officer], known or proved to me to be the same person who executed the
foregoing instrument and to be the [Title of Officer] of the Owner, and
acknowledged to me that he/she executed the same as his/her free act and deed
and the free act and deed of the Owner.
Subscribed and sworn before me this ____ day of
________________, 199__.
----------------------------------
NOTARY PUBLIC
COUNTY OF __________________
STATE OF _________________________
My Commission expires the ____ day of _______________, 19__.
EXHIBIT F-6
FORM OF ERISA REPRESENTATION LETTER
______________, 19__
Structured Asset Mortgage Investments Inc.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Norwest Bank Minnesota, National Association
▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
GMAC Mortgage Corporation
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Structured Asset Mortgage Investments Inc. Series 1999-J2
Re: Mortgage Pass-Through Certificates,
Series 1999-J2, Class [A-6][X][PO][B-__]
Ladies and Gentlemen:
_________________________ (the "Purchaser") intends to
purchase from ___________________________ (the "Seller") $_____________ Initial
Certificate Principal Balance of Mortgage Pass-Through Certificates, Series
1999-J2, Class [A-6][X][PO][B-__] (the "Certificates"), issued pursuant to the
Pooling and Servicing Agreement (the "Pooling and Servicing Agreement"), dated
as of November 1, 1999 among Structured Asset Mortgage Investments Inc., as
depositor (the "Depositor"), GMAC Mortgage Corporation, as servicer (the
"Servicer") and Norwest Bank Minnesota, National Association, as trustee (the
"Trustee"). All terms used herein and not otherwise defined shall have the
meanings set forth in the Pooling and Servicing Agreement. The Purchaser hereby
certifies, represents and warrants to, and covenants with, the Depositor, the
Trustee and the Servicer that:
(a) it is not acquiring the Certificates directly or
indirectly by, or on behalf of, an employee benefit plan or other retirement
arrangement which is subject to Title I of the Employee Retirement Income
Security Act of 1974, as amended, and/or section 4975 of the Internal Revenue
Code of 1986, as amended,
(b) it is an insurance company and (x) such purchase and
holding are permissible under applicable law, will not constitute or result in
a non-exempt prohibited transaction under ERISA or Section 4975 of the Code,
will not subject the Depositor, the Trustee or the Servicer to any obligation
in addition to those undertaken in the Pooling and Servicing Agreement and (y)
the purchaser is an insurance company which is purchasing such Certificate with
funds contained in an "insurance company general account" (as such term is
defined in Section V(e) of the Prohibited Transaction Class Exemption 95-60
("PTCE 95-60")), the purchase and holding of such Certificate are covered under
Sections I and III of PTCE 95-60; and there is no Plan with respect to which
the amount of such general account's reserves and liabilities for contracts
held by or on behalf of such Plan and all other Plans maintained by the same
employer (or any "affiliate" thereof, as defined in PTCE 95-60) or by the same
employee organization, exceeds 10% of the total of all reserves and liabilities
of such general account (as determined under PTCE 95-60) as of the date of the
acquisition of such Certificate, or
(c) it is providing an opinion of counsel satisfactory to the
Depositor, the Trustee and the Servicer that the purchase and holding of such
Certificate by a Plan or a person acting on behalf of a Plan or using a Plan's
assets are permissible under applicable law, will not constitute or result in a
non-exempt prohibited transaction under ERISA or Section 4975 of the Code, will
not result in the assets of the Trust Fund being deemed to be "plan assets" and
subject to the prohibited transaction requirements of ERISA and the Code, and
will not subject the Depositor, the Trustee or the Servicer to any obligation
in addition to those undertaken in the Pooling and Servicing Agreement.
In addition, the Purchaser hereby certifies, represents and warrants
to, and covenants with, the Depositor, the Trustee and the Servicer that the
Purchaser will not transfer such Certificates to any Plan or person unless such
Plan or person meets the requirements set forth in either (a), (b) or (c)
above.
Very truly yours,
--------------------------
(Purchaser)
By:_______________________________
Name: _________________________
Title:__________________________
EXHIBIT G
MORTGAGE LOAN SCHEDULE
[On file with ▇▇▇▇▇ & Wood LLP]
EXHIBIT H
Pricing and Prepayment Certificates
November 30, 1999
Norwest Bank Minnesota, National Association
▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Re: Structured Asset Mortgage Investments Inc.
Mortgage Pass-Through Certificates, Series 1999-J2
Pursuant to Section 3.23 of the Pooling and Servicing
Agreement dated November 1, 1999 among Structured Asset Mortgage Investments
Inc. (the "Depositor"), GMAC Mortgage Corporation (the "Servicer") and Norwest
Bank Minnesota, National Association (the "Trustee") relating to the issuance
of Structured Asset Mortgage Investments Inc. Mortgage Pass-Through
Certificates (the "Pooling and Servicing Agreement"), the undersigned does
hereby certify that:
(a) The prepayment assumption used in pricing the Certificates was
175% PSA.
(b) Set forth below is (i), the first price, as a percentage of the
principal balance of each class of Certificates, at which 10% of the aggregate
principal balance of each such class of Certificates was sold to the public at
single price, if applicable, or (ii) if more than 10% of a class of
Certificates have been sold to the public but no single price is paid for at
least 10% of the aggregate principal balance of such class of Certificates,
then the weighted average price at which the Certificates of such class were
sold expressed as a percentage of the principal balance of such class of
Certificates, or (iii) if less than 10% of the aggregate principal balance of a
class of Certificates has been sold to the public, the purchase price for each
such class of Certificates paid expressed as a percentage of the principal
balance of such class of Certificates calculated by: (1) estimating the fair
market value of each such class of Certificates as of November 30, 1999; (2)
adding such estimated fair market value to the aggregate purchase price of each
class of Certificates described in clause (i) or (ii) above; (3) dividing each
of the fair market values determined in clause (1) by the sum obtained in
clause (2); (4) multiplying the quotient obtained for each class of
Certificates in clause (3) by the purchase price paid for all the Certificates;
and (5) for each class of Certificates, dividing the product obtained from such
class of Certificates in clause (4) by the original principal balance of such
class of Certificates.
Class A-1:
Class A-2:
Class A-3:
Class A-4:
Class A-5:
Class A-6:
Class X:
Class PO:
Class R:
Class B-1:
Class B-2:
Class B-3:
Class B-4:
Class B-5:
Class B-6:
The prices set forth above do not include accrued interest with respect to
periods before closing.
STRUCTURED ASSET MORTGAGE
INVESTMENTS INC.
By:____________________________________
Name:_________________________________
Title:__________________________________
EXHIBIT I
Schedule of Discount Fractions
[On file with the Underwriter]
EXHIBIT J
Custodial Account Letter Agreement
EXHIBIT K
Escrow Account Letter Agreement
EXHIBIT L
Targeted Balance Schedules
[On file]
EXHIBIT M
FORM OF TRUSTEE
INITIAL CERTIFICATION
November __, 1999
Norwest Bank Minnesota, National Association
▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Structured Asset Mortgage Investments Inc.,
Series 1999-J2
Re: Pooling and Servicing Agreement, dated as of
November 1, 1999, by and among Norwest Bank Minnesota,
National Association, Structured Asset
Mortgage Investments Inc. and GMAC Mortgage Corporation
Mortgage Pass-Through Certificates, Series 1999-J2
Ladies and Gentlemen:
In accordance with Section 2.02 of the above-captioned
Pooling Agreement, the undersigned, as Trustee, hereby certifies that it has
received a Mortgage File (which contains an original Mortgage Note) to the
extent required in Section 2.01 of the Pooling Agreement with respect to each
Mortgage Loan listed in the Mortgage Loan Schedule.
Capitalized words and phrases used herein shall have the
respective meanings assigned to them in the above-captioned Custodial
Agreement.
NORWEST BANK MINNESOTA,
NATIONAL ASSOCIATION
By:________________________________
Name:______________________________
Title:______________________________
EXHIBIT N
FORM OF TRUSTEE FINAL CERTIFICATION
November __, 1999
Norwest Bank Minnesota, National Association
▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Structured Asset Mortgage Investments Inc.,
Series 1999-J2
Re: Pooling and Servicing Agreement, dated as of November 1,
1999, by and among Norwest Bank Minnesota, National
Association, Structured Asset Mortgage Investments Inc.
and GMAC Mortgage Corporation Mortgage Pass-Through
Certificates, Series 1999-J2
Ladies and Gentlemen:
In accordance with the above-captioned Pooling and Servicing
Agreement, the undersigned, as Trustee, hereby certifies that it has received a
Mortgage File with respect to each Mortgage Loan listed in the Mortgage Loan
Schedule containing with respect to each such Mortgage Loan:
(i) The original Mortgage Note, endorsed without recourse to the order of
the Trustee and showing an unbroken chain of endorsements from the
originator thereof to the Person endorsing it to the Trustee or an
original lost note affidavit from the related Seller stating that the
original Mortgage Note was lost, misplaced or destroyed, together with
a copy of the related Mortgage Note;
(ii) The original Mortgage with evidence of recording indicated thereon or
a copy of the Mortgage certified by the public recording office in
which such mortgage has been recorded;
(iii) An original Assignment of the Mortgage to the Trustee with evidence of
recording indicated thereon or a copy of such assignment certified by
the public recording office in which such assignment has been
recorded;
(iv) With respect to each Mortgage Loan, the original recorded assignment
or assignments of the Mortgage showing an unbroken chain of title from
the originator thereof to the Person assigning it to the Trustee or a
copy of such assignment or assignments of the Mortgage certified by
the public recording office in which such assignment or assignments
have been recorded; and
(v) The original of each modification, assumption, extension or guaranty
agreement, if any, relating to such Mortgage Loan or a copy of each
modification, assumption, extension or guaranty agreement certified by
the public recording office in which such document has been recorded.
Capitalized words and phrases used herein shall have the
respective meanings assigned to them in the above-captioned Custodial
Agreement.
NORWEST BANK MINNESOTA, NATIONAL
ASSOCIATION
By:________________________________________
Name:______________________________________
Title:_____________________________________