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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) December 28, 1998
STRUCTURED ASSET MORTGAGE INVESTMENTS INC.
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(Exact name of registrant as specified in its charter)
Delaware 333-51279 13-3633241
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(State or Other Jurisdiction (Commission (I.R.S. Employer
of Incorporation) File Number) Identification No.)
245 Park Avenue
New York, New York 10167
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(Address of Principal (Zip Code)
Executive Offices)
Registrant's telephone number, including area code, is (212) 272-2000
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Item 7. Financial Statements, Pro Forma Financial Information And Exhibits.
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(a) Not applicable
(b) Not applicable
(c) Exhibits:
1. Pooling and Servicing Agreement, dated as of December 1, 1998 among
Structured Asset Mortgage Investments Inc. as seller, Norwest Bank Association,
N.A. as trustee and Cendant Mortgage Corporation as master servicer.
<PAGE>
-3-
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on behalf of the
Registrant by the undersigned thereunto duly
authorized.
STRUCTURED ASSET MORTGAGE
INVESTMENTS INC.
By: /s/ Mary Haggerty
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Name: Mary Haggerty
Title: Vice President
Dated: January 11, 1998
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EXHIBIT INDEX
Item 601 (a) of Sequentially
Exhibit Regulation S-K Numbered
Number Exhibit No. Description Page
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1 4 Pooling and Servicing 5
Agreement
EXHIBIT
<PAGE>
EXECUTION COPY
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STRUCTURED ASSET MORTGAGE INVESTMENTS INC.,
SELLER,
CENDANT MORTGAGE CORPORATION,
MASTER SERVICER,
and
NORWEST BANK MINNESOTA, NATIONAL ASSOCIATION,
TRUSTEE
---------------------------------
POOLING AND SERVICING AGREEMENT
Dated as of December 1, 1998
--------------------------------
Structured Asset Mortgage Investments Trust 1998-12
Mortgage Pass-Through Certificates
Series 1998-12
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<TABLE>
<CAPTION>
TABLE OF CONTENTS
Page
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ARTICLE I
<S> <C> <C>
Definitions.......................................................................................................2
Section 1.02. DETERMINATION OF LIBOR...................................................................31
ARTICLE II
Conveyance of Mortgage Loans;
Original Issuance of Certificates
Section 2.01. CONVEYANCE OF MORTGAGE LOANS TO TRUSTEE..................................................33
Section 2.02. ACCEPTANCE OF MORTGAGE LOANS BY TRUSTEE..................................................34
Section 2.03. REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE MASTER SERVICER.........................36
Section 2.04. ASSIGNMENT OF INTEREST IN THE MORTGAGE LOAN PURCHASE AGREEMENT...........................37
Section 2.05. SUBSTITUTION OF MORTGAGE LOANS...........................................................38
Section 2.06. REPRESENTATIONS AND WARRANTIES OF THE TRUSTEE............................................39
Section 2.07. ISSUANCE OF CERTIFICATES.................................................................40
Section 2.08. REPRESENTATIONS AND WARRANTIES CONCERNING THE SELLER.....................................40
ARTICLE III
Administration and Servicing of Mortgage Loans
Section 3.01. MASTER SERVICER TO ASSURE SERVICING......................................................43
Section 3.02. SUB-SERVICING AGREEMENTS BETWEEN THE MASTER SERVICER AND SUB-SERVICERS...................44
Section 3.03. SUCCESSOR SUB-SERVICERS..................................................................44
Section 3.04. LIABILITY OF THE MASTER SERVICER.........................................................45
Section 3.05. ASSUMPTION OF SUB-SERVICING AGREEMENTS BY TRUSTEE........................................45
Section 3.06. COLLECTION OF MORTGAGE LOAN PAYMENTS.....................................................46
Section 3.07. COLLECTION OF TAXES, ASSESSMENTS AND SIMILAR ITEMS; SERVICING ACCOUNTS...................46
Section 3.08. ACCESS TO CERTAIN DOCUMENTATION AND INFORMATION REGARDING THE MORTGAGE LOANS.............47
Section 3.09. MAINTENANCE OF PRIMARY MORTGAGE INSURANCE POLICIES; COLLECTION THEREUNDER................48
Section 3.10. MAINTENANCE OF HAZARD INSURANCE AND FIDELITY COVERAGE....................................48
Section 3.11. DUE-ON-SALE CLAUSES; ASSUMPTION AGREEMENTS...............................................50
<PAGE>
Section 3.12. REALIZATION UPON DEFAULTED MORTGAGE LOANS................................................50
Section 3.13. TRUSTEE TO COOPERATE; RELEASE OF MORTGAGE FILES..........................................51
Section 3.14. SERVICING AND MASTER SERVICING COMPENSATION..............................................53
Section 3.15. ANNUAL STATEMENT OF COMPLIANCE...........................................................53
Section 3.16. ANNUAL INDEPENDENT PUBLIC ACCOUNTANTS' SERVICING REPORT..................................54
Section 3.17. REMIC-RELATED COVENANTS..................................................................54
Section 3.18. ADDITIONAL INFORMATION...................................................................54
Section 3.19. PERIODIC FILINGS WITH THE SECURITIES AND EXCHANGE COMMISSION; ADDITIONAL INFORMATION.....54
ARTICLE IV
Accounts
Section 4.01. PROTECTED ACCOUNTS.......................................................................56
Section 4.02. CERTIFICATE ACCOUNT......................................................................57
Section 4.03. PERMITTED WITHDRAWALS AND TRANSFERS FROM THE CERTIFICATE ACCOUNT.........................59
ARTICLE V
Certificates
Section 5.01. CERTIFICATES.............................................................................62
Section 5.02. REGISTRATION OF TRANSFER AND EXCHANGE OF CERTIFICATES....................................66
Section 5.03. MUTILATED, DESTROYED, LOST OR STOLEN CERTIFICATES........................................70
Section 5.04. PERSONS DEEMED OWNERS....................................................................70
Section 5.05. TRANSFER RESTRICTIONS ON RESIDUAL CERTIFICATES..........................................71
Section 5.06. RESTRICTIONS ON TRANSFERABILITY OF PRIVATE CERTIFICATES..................................72
Section 5.07. ERISA RESTRICTIONS.......................................................................72
Section 5.08. RULE 144A INFORMATION....................................................................73
ARTICLE VI
Payments to Certificateholders
Section 6.01. DISTRIBUTIONS ON THE CERTIFICATES........................................................74
Section 6.02. ALLOCATION OF LOSSES.....................................................................78
Section 6.03. PAYMENTS.................................................................................80
Section 6.04. STATEMENTS TO CERTIFICATEHOLDERS.........................................................80
Section 6.05. REPORTS TO THE TRUSTEE AND THE MASTER SERVICER...........................................83
Section 6.06. MONTHLY ADVANCES.........................................................................84
Section 6.07. COMPENSATING INTEREST PAYMENTS...........................................................85
Section 6.08. REPORTS OF FORECLOSURES AND ABANDONMENT OF MORTGAGED PROPERTY............................85
ii
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ARTICLE VII
The Master Servicer
Section 7.01. LIABILITIES OF THE MASTER SERVICER.......................................................86
Section 7.02. MERGER OR CONSOLIDATION OF THE MASTER SERVICER...........................................86
Section 7.03. INDEMNIFICATION OF THE TRUSTEE...........................................................86
Section 7.04. LIMITATION ON LIABILITY OF THE MASTER SERVICER AND OTHERS................................86
Section 7.05. MASTER SERVICER NOT TO RESIGN............................................................87
Section 7.06. SUCCESSOR MASTER SERVICER................................................................88
Section 7.07. SALE AND ASSIGNMENT OF MASTER SERVICING..................................................88
ARTICLE VIII
Default
Section 8.01. EVENTS OF DEFAULT........................................................................89
Section 8.02. TRUSTEE TO ACT; APPOINTMENT OF SUCCESSOR.................................................90
Section 8.03. NOTIFICATION TO CERTIFICATEHOLDERS.......................................................91
Section 8.04. WAIVER OF DEFAULTS.......................................................................91
Section 8.05. LIST OF CERTIFICATEHOLDERS...............................................................92
ARTICLE IX
Concerning the Trustee
Section 9.01. DUTIES OF TRUSTEE........................................................................93
Section 9.02. CERTAIN MATTERS AFFECTING THE TRUSTEE....................................................94
Section 9.03. TRUSTEE NOT LIABLE FOR CERTIFICATES OR MORTGAGE LOANS....................................96
Section 9.04. TRUSTEE MAY OWN CERTIFICATES.............................................................96
Section 9.05. FEES AND EXPENSES........................................................................96
Section 9.06. ELIGIBILITY REQUIREMENTS FOR TRUSTEE.....................................................97
Section 9.07. INSURANCE................................................................................97
Section 9.08. RESIGNATION AND REMOVAL OF THE TRUSTEE...................................................98
Section 9.09. SUCCESSOR TRUSTEE........................................................................98
Section 9.10. MERGER OR CONSOLIDATION OF TRUSTEE.......................................................99
Section 9.11. APPOINTMENT OF CO-TRUSTEE OR SEPARATE TRUSTEE............................................99
Section 9.12. MASTER SERVICER SHALL PROVIDE INFORMATION AS REASONABLY REQUIRED........................100
Section 9.13. FEDERAL INFORMATION RETURNS AND REPORTS TO CERTIFICATEHOLDERS...........................100
iii
<PAGE>
ARTICLE X
Termination
Section 10.01. TERMINATION UPON REPURCHASE BY THE SELLER OR ITS DESIGNEE OR LIQUIDATION
OF THE MORTGAGE LOANS..................................................................102
Section 10.02. ADDITIONAL TERMINATION REQUIREMENTS....................................................104
ARTICLE XI
Miscellaneous Provisions
Section 11.01. INTENT OF PARTIES......................................................................106
Section 11.02. AMENDMENT..............................................................................106
Section 11.03. RECORDATION OF AGREEMENT...............................................................107
Section 11.04. LIMITATION ON RIGHTS OF CERTIFICATEHOLDERS.............................................107
Section 11.05. ACTS OF CERTIFICATEHOLDERS.............................................................108
Section 11.06. GOVERNING LAW..........................................................................109
Section 11.07. NOTICES................................................................................109
Section 11.08. SEVERABILITY OF PROVISIONS.............................................................109
Section 11.09. SUCCESSORS AND ASSIGNS.................................................................110
Section 11.10. ARTICLE AND SECTION HEADINGS...........................................................110
Section 11.11. COUNTERPARTS...........................................................................110
Section 11.12. NOTICE TO RATING AGENCIES..............................................................110
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</TABLE>
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EXHIBITS:
Exhibit A-1 - Form of Class A Certificates
Exhibit A-2 - Form of Class X Certificates
Exhibit A-3 - Form of Class R Certificates
Exhibit A-4 - Form of Class B Certificates
Exhibit B - Mortgage Loan Schedule
Exhibit C - Representations and Warranties of BSMCC Concerning
the Mortgage Loans
Exhibit D - Request for Release of Documents
Exhibit E - Form of Affidavit pursuant to Section 860E(e)(4)
Exhibit F-1 - Form of Investment Letter
Exhibit F-2 - Form of Rule 144A and Related Matters Certificate
Exhibit G - Form of Initial Certification
Exhibit H - Form of Final Certification
Exhibit I - Planned Principal Amounts and Targeted Principal Amounts
Exhibit J - List of Mortgage Loans for which Mortgage Notes are Lost
Exhibit K - Electronic Data File Information
v
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POOLING AND SERVICING AGREEMENT
Pooling and Servicing Agreement dated as of December 1, 1998, among
Structured Asset Mortgage Investments Inc., a Delaware corporation, as the
seller (the "Seller"), Cendant Mortgage Corporation ("CMC"), as Master Servicer
(in such capacity the "Master Servicer") and Norwest Bank Minnesota, National
Association, a national banking association, not in its individual capacity but
solely as trustee (the "Trustee").
PRELIMINARY STATEMENT
On or prior to the Closing Date, the Seller has acquired the Mortgage
Loans from Bear Stearns Mortgage Capital Corporation ("BSMCC"). On the Closing
Date, the Seller will sell the Mortgage Loans and certain other property to the
Trust Fund and receive in consideration therefor Certificates evidencing the
entire beneficial ownership interest in Structured Asset Mortgage Investments
Trust 1998-12, the Trust created hereby.
The Trustee on behalf of the Trust shall make an election for the
assets constituting REMIC I to be treated for federal income tax purposes as a
REMIC. On the Startup Day, all the Classes of REMIC I Regular Certificates will
be designated "regular interests" in such REMIC and the Class R-I Certificate
will be designated the "residual interests" in such REMIC.
The Trustee on behalf of the Trust shall make an election for the
assets constituting REMIC II to be treated for federal income tax purposes as a
REMIC. On the Startup Day, all the Classes of Certificates except for the
Residual Certificates will be designated "regular interests" in such REMIC and
the Class R-II Certificate will be designated the "residual interests" in such
REMIC.
The Mortgage Loans will have an Outstanding Principal Balance as of the
Cut-off Date, after deducting all Scheduled Principal due on or before the
Cut-off Date, of approximately $278,497,040.87. The initial principal amount of
the Certificates will not exceed such Outstanding Principal Balance.
In consideration of the mutual agreements herein contained, the Seller,
the Master Servicer and the Trustee agree as follows:
<PAGE>
ARTICLE I
Definitions
Whenever used in this Agreement, the following words and phrases,
unless otherwise expressly provided or unless the context otherwise requires,
shall have the meanings specified in this Article.
ACCOUNT: The Certificate Account, the Protected Accounts, or the
Servicing Accounts as the context may require.
ACCRUAL CERTIFICATES: The Class A-9 Certificates, the Class A-5
Certificates (to the extent of the Class A-5-II Component) and the Class A-6
Certificates (to the extent of the Class A-6-II Component).
ACCRUAL DISTRIBUTION AMOUNT: The Class A-9 Accrual Distribution Amount,
Class A-5-II Component Accrual Distribution Amount or Class A-6-II Component
Accrual Distribution Amount, as applicable.
ACCRUED CERTIFICATE INTEREST: For any Certificate (other than a
Principal Only Certificate or Component Certificate) for any Distribution Date,
the interest accrued during the related Interest Accrual Period at the
applicable Pass-Through Rate on the Current Principal Amount (or in the case of
a Notional Amount Certificate, the Notional Amount) of such Certificate
immediately prior to such Distribution Date. With respect to each Distribution
Date, as to the Class A-5 Certificates, (i) in the case of the Class A-5-I
Component, interest equal to the Class A-5-I Component Strip, (ii) in the case
of the Class A-5-II Component, interest accrued during the related Interest
Accrual Period on such Component at the related Pass-Through Rate on the related
principal amount thereof, and (iii) in the case of the Class A-5-IV Component,
interest accrued during the related Interest Accrual Period on such Component at
the related Pass-Through Rate on the related Notional Amount thereof. With
respect to each Distribution Date, as to the Class A-6 Certificates, (i) in the
case of the Class A-6-I Component, interest equal to the Class A-6-I Component
Strip, (ii) in the case of the Class A- 6-II Component, interest accrued during
the related Interest Accrual Period on such Component at the related
Pass-Through Rate on the related principal amount thereof, and (iii) in the case
of the Class A-6-IV Component, interest accrued during the related Interest
Accrual Period on such Component at the related Pass-Through Rate on the related
Notional Amount thereof. In each case, Accrued Certificate Interest on any Class
of Certificates or Components will be reduced by (i) in the case of an interest
bearing Senior Certificate, such Certificate's share of any Net Interest
Shortfall and (ii) in the case of a Subordinate Certificate, such Certificate's
share of any Net Interest Shortfall and the interest portion of any Realized
Losses allocated thereto pursuant to Section 6.02(g). With respect to the
Accrual Certificates on each Distribution Date, interest shortfalls allocable to
such Certificates on such Distribution Date will be so allocated by reducing the
amount that is added to
2
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the Current Principal Balances thereof, as applicable, in respect of Accrued
Certificate Interest pursuant to Sections 6.01(a)(iii), (iv) and (v), as
applicable. Accrued Certificate Interest for each Class or Component of the
Certificates shall be calculated on the basis of a 360-day year consisting of
twelve 30-day months.
ADVANCING DATE: The Business Day preceding the related Distribution
Date.
AFFILIATE: As to any Person, any other Person controlling, controlled
by or under common control with such Person. "Control" means the power to direct
the management and policies of a Person, directly or indirectly, whether through
ownership of voting securities, by contract or otherwise. "Controlled" and
"Controlling" have meanings correlative to the foregoing. The Trustee may
conclusively presume that a Person is not an Affiliate of another Person unless
a Responsible Officer of the Trustee has actual knowledge to the contrary.
AGREEMENT: This Pooling and Servicing Agreement and all amendments
hereof and supplements hereto.
ALLOCABLE SHARE: With respect to each Class of Subordinate
Certificates:
(a) as to any Distribution Date and amounts distributable
pursuant to clauses (i) and (iii) of the Subordinate Optimal Principal
Amount, the fraction, expressed as a percentage, the numerator of which
is the Current Principal Amount of such Class and the denominator of
which is the aggregate Current Principal Amount of all Classes of the
Subordinate Certificates; and
(b) as to any Distribution Date and amounts distributable
pursuant to clauses (ii), (iv) and (v) of the Subordinate Optimal
Principal Amount, and as to each Class of Subordinate Certificates
(other than the Class of Subordinate Certificates having the lowest
numerical designation as to which the Class Prepayment Distribution
Trigger shall not be applicable) for which (x) the related Class
Prepayment Distribution Trigger has been satisfied on such Distribution
Date, the fraction, expressed as a percentage, the numerator of which
is the Current Principal Amount of such Class and the denominator of
which is the aggregate Current Principal Amount of all Classes of
Subordinate Certificates and (y) the related Class Prepayment
Distribution Trigger has not been satisfied on such Distribution Date,
0%; provided that if on a Distribution Date, the Current Principal
Amount of any Class of Subordinate Certificates for which the related
Class Prepayment Distribution Trigger was satisfied on such
Distribution Date is reduced to zero, any amounts distributed pursuant
to this clause (b), to the extent of such Class's remaining Allocable
Share, shall be distributed to the remaining Classes of Subordinate
Certificates which satisfy the related Class Prepayment Distribution
Trigger and to the Subordinate Certificates having the lowest numerical
designation in reduction of their respective Current Principal Amounts
in the order of their numerical Class designations.
3
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APPLICABLE CREDIT RATING: A credit rating of Aaa, in the case of
Moody's or a rating of AAA, in the case of DCR, for any long-term deposit or
security or a rating of P-1, in the case of Moody's, or D-1 in the case of DCR,
for any short-term deposit or security.
APPLICABLE STATE LAW: For purposes of Section 9.13(d), the Applicable
State Law shall be (a) the law of the State of New York, (b) the law of the
State of Minnesota and (c) such other state law whose applicability shall have
been brought to the attention of the Trustee by either (i) an Opinion of Counsel
delivered to it, or (ii) written notice from the appropriate taxing authority as
to the applicability of such state law.
APPRAISED VALUE: For any Mortgaged Property, the amount set forth as
the appraised value of such Mortgaged Property in an appraisal made for the
mortgage originator in connection with its origination of the related Mortgage
Loan.
ASSUMED FINAL DISTRIBUTION DATE: With respect to each Class of
Certificates, February 25, 2029.
AVAILABLE FUNDS: With respect to any Distribution Date, an amount equal
to the aggregate of the following amounts with respect to the Mortgage Loans:
(a) all previously undistributed payments on account of principal (including the
principal portion of Scheduled Payments, Principal Prepayments and the principal
portion of Net Liquidation Proceeds) and all previously undistributed payments
on account of interest received after the Cut-off Date and on or prior to the
related Determination Date, and (b) any Monthly Advances (including Certificate
Account Advances) and Compensating Interest Payments by the Master Servicer or a
Sub-Servicer with respect to such Distribution Date, except:
(i) all payments that were due on or before the Cut-off Date;
(ii) all Principal Prepayments and Liquidation Proceeds
received after the applicable Prepayment Period;
(iii) all payments, other than Principal Prepayments, that
represent early receipt of Scheduled Payments due on a date or dates
subsequent to the related Due Date;
(iv) amounts received on particular Mortgage Loans as late
payments of principal or interest and respecting which, and to the
extent that, there are any unreimbursed Monthly Advances (including
Certificate Account Advances);
(v) amounts of Monthly Advances (including Certificate Account
Advances) determined to be Nonrecoverable Advances; and
(vi) amounts permitted to be withdrawn from the Certificate
Account pursuant to Subsection 4.03(a).
4
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BANKRUPTCY CODE: The United States Bankruptcy Code, as amended as
codified in 11 U.S.C. ss.ss. 101-1330.
BANKRUPTCY LOSS: With respect to any Mortgage Loan, a Deficient
Valuation or Debt Service Reduction, as reported by the Master Servicer.
BOOK-ENTRY CERTIFICATES: Initially, all Classes of Certificates other
than the Private Certificates and the Residual Certificates.
BSMCC: Bear Stearns Mortgage Capital Corporation.
BUSINESS DAY: Any day other than (i) a Saturday or a Sunday, or (ii) a
day on which the New York Stock Exchange is closed or on which banking
institutions in New York City, Maryland, Minnesota or New Jersey or in the
jurisdiction in which the Trustee or the Master Servicer is authorized or
obligated by law or executive order to be closed.
CERTIFICATE: Any mortgage pass-through certificate evidencing a
beneficial ownership interest in the Trust Fund signed and countersigned by the
Trustee in substantially the forms annexed hereto as Exhibit A-1, A-2, A-3 and
A-4, with the blanks therein appropriately completed.
CERTIFICATE ACCOUNT: The trust account or accounts created and
maintained pursuant to Section 4.02, which shall be denominated "Norwest Bank
Minnesota, National Association, as Trustee f/b/o holders of Structured Asset
Mortgage Investments Trust 1998-12 Mortgage Pass-Through Certificates, Series
1998-12 - Certificate Account".
CERTIFICATE ACCOUNT ADVANCE: As of any Determination Date, the amount
on deposit in a Protected Account which is not required to be transferred to the
Certificate Account for distribution during the calendar month in which such
Determination Date occurs but which is deposited in the Certificate Account and
used to make a distribution to Certificateholders during such calendar month on
account of Scheduled Payments on the Mortgage Loans due on the Due Date for such
month not being paid on or before such Determination Date except insofar as such
unpaid amounts are the result of application of the Relief Act.
CERTIFICATEHOLDER: A Holder of a Certificate.
CERTIFICATE OWNER: Any Person who is the beneficial owner of a
Certificate registered in the name of the Depository or its nominee.
CERTIFICATES: The Senior Certificates and the Subordinate Certificates.
CERTIFICATE REGISTER: The register maintained pursuant to Section 5.02.
5
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CLASS: With respect to the Certificates, A-1, A-2, A-3, A-4, A-5, A-6,
A-7, A-8, A-9, X, B-1, B-2, B-3, B-4, B-5, B-6, R-I and R-II.
CLASS A-5 INTEREST ONLY COMPONENT: The Class A-5-I or Class A-5-IV
Component.
CLASS A-6 INTEREST ONLY COMPONENT: The Class A-6-I or Class A-6-IV
Component.
CLASS A-5-I COMPONENT: With respect to the Class A-5 Certificates, a
Component thereof, being an uncertificated interest representing an interest
designated as a "regular interest" in REMIC II for purposes of the REMIC
provisions.
CLASS A-5-I COMPONENT STRIP: 96.1538461624% multiplied by the sum of:
(i) 0.750% multiplied by the sum of the Current Principal Amounts of the Class
A-1 Certificates and the Class A-4 Certificates, (ii) 0.700% multiplied by the
Current Principal Amount of the Class A-2 Certificates, and (iii) 0.550%
multiplied by the Current Principal Amount of the Class A-3 Certificates.
CLASS A-5-II COMPONENT: With respect to the Class A-5 Certificates, a
Component thereof, being an uncertificated interest representing an interest
designated as a "regular interest" in REMIC II for purposes of the REMIC
provisions.
CLASS A-5-III COMPONENT: With respect to the Class A-5 Certificates, a
Component thereof, being an uncertificated interest representing an interest
designated as a "regular interest" in REMIC II for purposes of the REMIC
provisions.
CLASS A-5-IV COMPONENT: With respect to the Class A-5 Certificates, a
Component thereof, being an uncertificated interest representing an interest
designated as a "regular interest" in REMIC II for purposes of the REMIC
provisions.
CLASS A-6-I COMPONENT: With respect to the Class A-6 Certificates, a
Component thereof, being an uncertificated interest representing an interest
designated as a "regular interest" in REMIC II for purposes of the REMIC
provisions.
CLASS A-6-I COMPONENT STRIP: 3.8461538376% multiplied by the sum of:
(i) 0.750% multiplied by the sum of the Current Principal Amounts of the Class
A-1 Certificates and the Class A-4 Certificates, (ii) 0.700% multiplied by the
Current Principal Amount of the Class A-2 Certificates, and (iii) 0.550%
multiplied by the Current Principal Amount of the Class A-3 Certificates.
CLASS A-6-II COMPONENT: With respect to the Class A-6 Certificates, a
Component thereof, being an uncertificated interest representing an interest
designated as a "regular interest" in REMIC II for purposes of the REMIC
provisions.
6
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CLASS A-6-III COMPONENT: With respect to the Class A-6 Certificates, a
Component thereof, being an uncertificated interest representing an interest
designated as a "regular interest" in REMIC II for purposes of the REMIC
provisions.
CLASS A-6-IV COMPONENT: With respect to the Class A-6 Certificates, a
Component thereof, being an uncertificated interest representing an interest
designated as a "regular interest" in REMIC II for purposes of the REMIC
provisions.
CLASS A-5-II COMPONENT ACCRUAL DISTRIBUTION AMOUNT: As defined in
Section 6.01(a)(v).
CLASS A-6-II COMPONENT ACCRUAL DISTRIBUTION AMOUNT: As defined in
Section 6.01(a)(vi).
CLASS A-9 ACCRUAL DISTRIBUTION AMOUNT: As defined in Section
6.01(a)(iv).
CLASS PREPAYMENT DISTRIBUTION TRIGGER: For a Class of Subordinate
Certificates for any Distribution Date, the Class Prepayment Distribution
Trigger is satisfied if the fraction (expressed as a percentage), the numerator
of which is the aggregate Current Principal Amount of such Class and each Class
of Subordinate Certificates subordinate thereto, if any, and the denominator of
which is the Scheduled Principal Balance of all of the Mortgage Loans as of the
related Due Date, equals or exceeds such percentage calculated as of the Closing
Date.
CLOSING DATE: December 31, 1998.
CMC: Cendant Mortgage Corporation, or its successors in interest, and
all Affiliates thereof.
CMC SALE AND SERVICING AGREEMENT: Collectively, (A) the Purchase,
Warranties and Servicing Agreement between CMC and BSMCC, dated as of May 1,
1998, as such agreement relates to the Mortgage Loans conveyed under those Term
Sheets dated November 25, 1998, December 10, 1998, and December 23, 1998, and
such Term Sheets and (B) the Purchase, Warranties and Servicing Agreement
between Bishop's Gate Residential Mortgage Trust (formerly known as Cendant
Residential Mortgage Trust) and BSMCC, dated as of June 1, 1998, as such
agreement relates to the Mortgage Loans conveyed under those Term Sheets dated
November 25, 1998, December 10, 1998, and December 23, 1998, and such Term
Sheets, and as each may be amended or supplemented from time to time.
CODE: The Internal Revenue Code of 1986.
COMPENSATING INTEREST PAYMENTS: As defined in Section 6.07.
COMPONENT: With respect to the Class A-5 Certificates: the Class A-5-I
Component, the Class A-5-II Component, the Class A-5-III Component and the Class
A-5-IV Component. With respect to the Class A-6 Certificates: the Class A-6-I
Component, the Class A-6-II Component, the Class A-6-III Component and the Class
A-6-IV Component.
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COMPONENT CERTIFICATES: Class A-5 and Class A-6 Certificates.
CORPORATE TRUST OFFICE: The office of the Trustee at which at any
particular time its corporate trust business is administered, which office, at
the date of the execution of this Agreement, is located at Sixth and Marquette,
Minneapolis, Minnesota 55479-1026, ref: SAMI 1998-12.
CORRESPONDING CLASS: As indicated on the table in Section 5.01(c).
CURRENT PRINCIPAL AMOUNT: With respect to any Certificate or Component
(other than a Notional Amount Certificate) as of any Distribution Date, the
initial principal amount of such Certificate or Component, as reduced by (i) all
amounts distributed on previous Distribution Dates on such Certificate or
Component with respect to principal, plus (ii)(a) in the case of each Class A-5-
II Component, an amount equal to the aggregate Accrued Certificate Interest
added to the Current Principal Balance of the Class A-5 Certificates (to the
extent of the Class A-5-II Component) on each Distribution Date pursuant to
Section 6.01(a)(v), (b) in the case of each Class A-6-II Component, an amount
equal to the aggregate Accrued Certificate Interest added to the Current
Principal Balance of the Class A-6 Certificates (to the extent of the Class
A-6-II Component) on each Distribution Date pursuant to Section 6.01(a)(vi), (c)
in the case of each Class A-9 Certificate, an amount equal to the aggregate
Accrued Certificate Interest added to the Current Principal Amount of the Class
A-9 Certificates on each Distribution Date pursuant to Section 6.01(a)(iv), less
(iii) the principal portion of all Realized Losses allocated prior to such
Distribution Date to such Certificate or Component, taking account of the
applicable Loss Allocation Limitation of such Certificate or Component and (iv)
in the case of a Subordinate Certificate, such Certificate's pro rata share, if
any, of the Subordinate Certificate Writedown Amount, the PO Component Deferred
Payment Writedown Amount, if applicable, and the applicable PO Component
Deferred Payment Writedown Amount, in each case for previous Distribution Dates
and as increased, in the case of the Accrual Certificates, by all interest
accrued and unpaid thereon. With respect to any Class of Certificates (other
than the Notional Amount Certificates) or Component of a Certificate (other than
a Component of a Notional Amount Certificate), the Current Principal Amount
thereof will equal the sum of the Current Principal Amounts of all Certificates
in such Class or such Components. Notwithstanding the foregoing, solely for
purposes of giving consents, directions, waivers, approvals, requests and
notices, the Class R-I and Class R-II Certificates after the Distribution Date
on which they receive the distribution of the last dollar of their original
principal amount shall be deemed to have a Current Principal Amount equal to
their Current Principal Amount on the day immediately preceding such
Distribution Date.
CUT-OFF DATE: December 1, 1998.
CUT-OFF DATE BALANCE: $278,497,040.87.
DCR: Duff & Phelps Credit Rating Co., or its successors in interest.
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DEBT SERVICE REDUCTION: Any reduction of the Scheduled Payments which a
Mortgagor is obligated to pay with respect to a Mortgage Loan as a result of any
proceeding under the Bankruptcy Code or any other similar state law or other
proceeding.
DEBTOR RELIEF LAWS: Any applicable liquidation, conservatorship,
receivership, bankruptcy, insolvency, rearrangement, moratorium, reorganization,
or similar debtor relief laws affecting the rights of creditors generally from
time to time in effect.
DEFAULTED MORTGAGE LOAN: Any Mortgage Loan as to which the Mortgagor
has failed to make unexcused payment in full of three or more consecutive
Scheduled Payments.
DEFICIENT VALUATION: With respect to any Mortgage Loan, a valuation of
the Mortgaged Property by a court of competent jurisdiction in an amount less
than the then outstanding indebtedness under the Mortgage Loan, which valuation
results from a proceeding initiated under the Bankruptcy Code or any other
similar state law or other proceeding.
DEPOSITORY: The Depository Trust Company, the nominee of which is Cede
& Co., or any successor thereto.
DEPOSITORY AGREEMENT: The meaning specified in Subsection 5.01(a)
hereof.
DEPOSITORY PARTICIPANT: A broker, dealer, bank or other financial
institution or other Person for whom from time to time the Depository effects
book-entry transfers and pledges of securities deposited with the Depository.
DESIGNATED DEPOSITORY INSTITUTION: A depository institution (commercial
bank, federal savings bank mutual savings bank or savings and loan association)
or trust company (which may include the Trustee), the deposits of which are
insured by the FDIC to the maximum extent provided by law.
DETERMINATION DATE: With respect to Mortgage Loans, the 18th day of the
month of the Distribution Date, or if such day is not a Business Day, the
preceding Business Day.
DISCOUNT MORTGAGE LOAN: Any Mortgage Loan with a Net Rate less than
6.75% per annum.
DISQUALIFIED ORGANIZATION: 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 Federal Home Loan Mortgage Corporation or any successor
thereto, a majority of its board of directors is not selected by such
governmental unit), (ii) any 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
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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 or (v) any other Person so designated by the Owner Trustee based upon
an Opinion of Counsel that the holding of an ownership interest in a Owner Trust
Certificate by such Person may cause the Trust or any Person having an ownership
interest in the Owner Trust Certificate (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 Owner Trust
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, beginning in the month
immediately following the month of the Closing Date, or, if such 25th day is not
a Business Day, the Business Day immediately following.
DTC CUSTODIAN: Norwest Bank Minnesota, National Association, or its
successors in interest as custodian for the Depository.
DUE DATE: With respect to each Mortgage Loan, the date in each month on
which its Scheduled Payment is due if such due date is the first day of a month
and otherwise is deemed to be the first day of the following month.
DUE PERIOD: With respect to any Distribution Date, the period
commencing on the second day of the month preceding the month in which the
Distribution Date occurs and ending at the close of business on the first day of
the month in which the Distribution Date occurs.
ERISA: The Employee Retirement Income Security Act of 1974, as amended.
EVENT OF DEFAULT: An event described in Section 8.01.
EXCESS LIQUIDATION PROCEEDS: To the extent that such amount is not
required by law to be paid to the related Mortgagor, the amount, if any, by
which Liquidation Proceeds with respect to a Liquidated Mortgage Loan exceed the
sum of (i) the Outstanding Principal Balance of such Mortgage Loan and accrued
but unpaid interest at the related Mortgage Interest Rate through the last day
of the month in which the related Liquidation Date occurs, plus (ii) related
Liquidation Expenses.
FANNIE MAE: Fannie Mae (formerly the Federal National Mortgage
Association) or any successor thereto.
FDIC: Federal Deposit Insurance Corporation or any successor thereto.
FRACTIONAL UNDIVIDED INTEREST: With respect to any Class of
Certificates (other than the Notional Amount Certificates) or any Component
(other than Components of Notional Amount
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Certificates), the fractional undivided interest evidenced by any Certificate of
such Class the numerator of which is the Current Principal Amount of such
Certificate or such Component and the denominator of which is the Current
Principal Amount of such Class or such Component. With respect to any Class of
Notional Amount Certificates or Components of Notional Amount Certificates, the
fractional undivided interest evidenced by such Certificate or Component, the
numerator of which is the Notional Amount of such Certificate or all such
Components and the denominator of which is the Notional Amount of such Class or
Component. With respect to the Certificates in the aggregate, the fractional
undivided interest evidenced by (i) each Notional Amount Certificate will be
deemed to equal 1% multiplied by a fraction, the numerator of which is the
Notional Amount of such Certificate and the denominator of which is the Notional
Amount of all of the Notional Amount Certificates of the same Class, (ii) a
Class R-I or Class R-II Certificate will be deemed to equal 1% multiplied by a
fraction the numerator of which is the Current Principal Amount of such
Certificate and the denominator of which is the aggregate Current Principal
Amount of such respective Class and (iii) a Certificate of any other Class will
be deemed to equal 95% (plus an additional 1% if and when each Class of Notional
Amount Certificates has been paid in full prior to the date of determination)
multiplied by a fraction, the numerator of which is the Current Principal Amount
of such Certificate and the denominator of which is the Current Principal Amount
of all the Certificates.
FREDDIE MAC: Freddie Mac (formerly the Federal Home Loan Mortgage
Corporation) or any successor thereto.
FUNDS TRANSFER DATE: In the case of the Master Servicer, the 18th day
in each month or if such day is not a Business Day, the preceding Business Day.
GLOBAL CERTIFICATE: Any Private Certificate registered in the name of
the Depository or its nominee, beneficial interests in which are reflected on
the books of the Depository or on the books of a Person maintaining an account
with such Depository (directly or as an indirect participant in accordance with
the rules of such depository). As of the Closing Date, there will be no Global
Certificate.
HOLDER: The Person in whose name a Certificate is registered in the
Certificate Register, except that, subject to Subsections 11.02(b) and 11.05(e),
solely for the purpose of giving any consent pursuant to this Agreement, any
Certificate registered in the name of the Seller, the Master Servicer, a
Sub-Servicer, if any, or the Trustee or any Affiliate thereof shall be deemed
not to be outstanding and the Fractional Undivided Interest evidenced thereby
shall not be taken into account in determining whether the requisite percentage
of Fractional Undivided Interests necessary to effect any such consent has been
obtained.
INDEMNIFIED PERSONS: The Trustee, its officers, directors, agents and
employees and any separate Co-trustee and its officers, directors, agents and
employees.
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INDEPENDENT: When used with respect to any specified Person, this term
means that such Person (a) is in fact independent of the Seller or the Master
Servicer and of any Affiliate of the Seller or the Master Servicer, (b) does not
have any direct financial interest or any material indirect financial interest
in the Seller or the Master Servicer, or any Affiliate of the Seller or the
Master Servicer, and (c) is not connected with the Seller or the Master
Servicer, or any Affiliate as an officer, employee, promoter, underwriter,
trustee, partner, director or person performing similar functions.
INDIVIDUAL CERTIFICATE: Any Private Certificate registered in the name
of the Holder other than the Depository or its nominee.
INSTITUTIONAL ACCREDITED INVESTOR: Any Person meeting the requirements
of Rule 501 (a)(1), (2), (3) or (7) of Regulation D under the Securities Act or
any entity all of the equity holders in which come within such paragraphs.
INSURANCE POLICY: With respect to any Mortgage Loan, any Primary
Mortgage Insurance Policy, standard hazard insurance policy, flood insurance
policy or title insurance policy.
INSURANCE PROCEEDS: Amounts paid by the insurer under any Insurance
Policy covering any Mortgage Loan or Mortgaged Property other than amounts
required to be paid over to the Mortgagor pursuant to law or the related
Mortgage Note or Security Instrument and other than amounts used to repair or
restore the Mortgaged Property or to reimburse Insured Expenses.
INSURED EXPENSES: Expenses covered by any Insurance Policy.
INSURER: Any issuer of an Insurance Policy.
INTEREST ACCRUAL PERIOD: With respect to each Distribution Date and
each Class of interest bearing Certificates, the calendar month preceding the
month in which the Distribution Date occurs, commencing in December 1998.
INTEREST SHORTFALL: With respect to any Distribution Date and each
Mortgage Loan that during the related Prepayment Period was the subject of a
Voluntary Principal Prepayment, or constitutes a Relief Act Mortgage Loan, an
amount determined as follows:
(a) partial principal prepayments: The difference between (i)
one month's interest at the applicable Net Rate on the amount of such
prepayment and (ii) the amount of interest for the calendar month of
such prepayment (adjusted to the applicable Net Rate)
received at the time of such prepayment;
(b) principal prepayments in full received during the relevant
Prepayment Period: The difference between (i) one month's interest at
the applicable Net Rate on the Scheduled Principal Balance of such
Mortgage Loan immediately prior to such prepayment and (ii) the
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amount of interest for the calendar month of such prepayment (adjusted
to the applicable Net Rate) received at the time of such prepayment;
(c) Relief Act Mortgage Loans: As to any Relief Act Mortgage
Loan, the excess of (i) 30 days' interest (or, in the case of a
principal prepayment in full, interest to the date of prepayment) on
the Scheduled Principal Balance thereof (or, in the case of a principal
prepayment in part, on the amount so prepaid) at the related Net Rate
over (ii) 30 days' interest (or, in the case of a principal prepayment
in full, interest to the date of prepayment) on such Scheduled
Principal Balance (or, in the case of a Principal Prepayment in part,
on the amount so prepaid) at the Net Rate required to be paid by the
Mortgagor as limited by application of the Relief Act.
INVESTMENT LETTER: The letter to be furnished by each Institutional
Accredited Investor which purchases any Class of Private Certificates in
connection with such purchase, substantially in the form set forth as Exhibit
F-1 hereto.
IO COMPONENT: The Class A-5-I, Class A-5-IV, Class A-6-I or Class
A-6-IV Component.
LIBOR: With respect to any Distribution Date and the Pass-Through Rates
on the Class A-7 and Class A-8 Certificates, the arithmetic mean of the London
interbank offered rate quotations of Reference Banks for one-month Eurodollar
deposits in the international Eurocurrency market, expressed on a per annum
basis, determined in accordance with Section 1.02.
LIBOR BUSINESS DAY: Any day other than (i) a Saturday or a Sunday or
(ii) a day on which banking institutions in the city of London, England are
required or authorized by law to be closed.
LIQUIDATED MORTGAGE LOAN: Any defaulted Mortgage Loan as to which the
Master Servicer has determined that all amounts it expects to recover from or on
account of such Mortgage Loan have been recovered.
LIQUIDATION DATE: With respect to any Liquidated Mortgage Loan, the
date on which the Master Servicer has certified that such Mortgage Loan has
become a Liquidated Mortgage Loan.
LIQUIDATION EXPENSES: With respect to a Mortgage Loan in liquidation,
unreimbursed expenses paid or incurred by or for the account of the Master
Servicer and not recovered by the Master Servicer under any Primary Mortgage
Insurance Policy for reasons other than the Master Servicer's failure to ensure
the maintenance of or compliance with a Primary Mortgage Insurance Policy, such
expenses including (a) property protection expenses, (b) property sales
expenses, (c) foreclosure and sale costs, including court costs and reasonable
attorneys' fees, and (d) similar expenses reasonably paid or incurred in
connection with liquidation.
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LIQUIDATION PROCEEDS: Cash received in connection with the liquidation
of a defaulted Mortgage Loan, whether through trustee's sale, foreclosure sale,
Insurance Proceeds, condemnation proceeds or otherwise.
LOAN SUMMARY AND REMITTANCE REPORT: The report to be submitted by the
Master Servicer to the Trustee pursuant to Subsection 6.05(b).
LOAN-TO-VALUE RATIO: The fraction, expressed as a percentage, the
numerator of which is the original principal balance of the related Mortgage
Loan and the denominator of which is the Original Value of the related Mortgaged
Property.
LOSS ALLOCATION LIMITATION: The meaning specified in Section 6.02(b)
hereof.
LOST NOTES: The original Mortgage Notes that have been lost, as
indicated on Exhibit J hereto.
MASTER SERVICER: CMC, or its successor in interest, and any successor
master servicer with respect to the Mortgage Loans appointed as herein provided.
MASTER SERVICING FEE: A fee of between 0.20% and 1.075% per annum, as
set forth in the Mortgage Loan Schedule, of the Outstanding Principal Balance of
each Mortgage Loan from full payments of accrued interest on each such Mortgage
Loans as compensation for its activities under this Agreement. Any Master
Servicing Fee in excess of 0.20% per annum will be set aside by the Master
Servicer to pay for lender funded mortgage insurance and will not be treated as
servicing compensation to the Master Servicer and will not be available to make
Compensating Interest Payments
MONTHLY ADVANCE: The advance (including a Certificate Account Advance)
required to be made by the Master Servicer on the related Advancing Date
pursuant to Section 6.06.
MOODY'S: Moody's Investors Service, Inc., or its successors in
interest.
MORTGAGE FILE: The mortgage documents listed in Section 2.01(b)
pertaining to a particular Mortgage Loan and any additional documents required
to be added to the Mortgage File pursuant to this Agreement.
MORTGAGE INTEREST RATE: The annual rate at which interest accrues from
time to time on any Mortgage Loan pursuant to the related Mortgage Note, which
rate is equal to the "Mortgage Interest Rate" set forth with respect thereto on
the Mortgage Loan Schedule.
MORTGAGE LOAN: A mortgage loan transferred and assigned to the Trustee
pursuant to Section 2.01 or Section 2.05 and held as a part of the Trust Fund,
as identified in the Mortgage Loan Schedule, including a mortgage loan the
property securing which has become an REO Property.
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MORTGAGE LOAN PURCHASE AGREEMENT: The Mortgage Loan Purchase Agreement
dated as of December 28, 1998, between BSMCC, as seller, and Structured Asset
Mortgage Investments Inc., as purchaser, and all amendments thereof and
supplements thereto.
MORTGAGE LOAN SCHEDULE: The schedule, attached hereto as Exhibit B with
respect to the Mortgage Loans and as amended from time to time to reflect the
repurchase or substitution of Mortgage Loans pursuant to this Agreement.
MORTGAGE NOTE: The originally executed note or other evidence of the
indebtedness of a Mortgagor under the related Mortgage Loan.
MORTGAGED PROPERTY: Land and improvements securing the indebtedness of
a Mortgagor under the related Mortgage Loan or, in the case of REO Property,
such REO Property.
MORTGAGOR: The obligor on a Mortgage Note.
NET INTEREST SHORTFALL: With respect to any Distribution Date, the
Interest Shortfall, if any, for such Distribution Date net of Compensating
Interest Payments made with respect to such Distribution Date.
NET LIQUIDATION PROCEEDS: As to any Liquidated Mortgage Loan,
Liquidation Proceeds net of (i) Liquidation Expenses which are payable therefrom
to the Master Servicer in accordance with this Agreement and (ii) unreimbursed
advances by the Master Servicer and Monthly Advances
including Certificate Account Advances.
NET RATE: With respect to each Mortgage Loan, the Mortgage Interest
Rate borne by such Mortgage Loan less the Master Servicing Fee Rate.
NON-DISCOUNT MORTGAGE LOAN: Any Mortgage Loan with a Net Rate equal to
or greater than 6.75% per annum.
NON-PO PERCENTAGE: With respect to any Discount Mortgage Loan, the Net
Rate thereof divided by 6.75%, and with respect to any Non-Discount Mortgage
Loan, 100%.
NONRECOVERABLE ADVANCE: Any advance (i) which was previously made or is
proposed to be made by the Master Servicer and (ii) which, in the good faith
judgment of the Master Servicer, as evidenced by an Officer's Certificate, will
not or, in the case of a proposed advance, would not, be ultimately recoverable
by the Master Servicer from Liquidation Proceeds, Insurance Proceeds or future
payments on the Mortgage Loan for which such advance was made.
NON-PO OPTIMAL PRINCIPAL AMOUNT: With respect to each Distribution
Date, an amount equal to the sum of the amounts included in clauses (i) through
and including (v) of the definition of
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"Senior P&I Optimal Principal Amount" for such Distribution Date prior to
application of the Senior Percentage or Senior Prepayment Percentage, as
applicable.
NOTIONAL AMOUNT: On any Distribution Date, with respect to the Class X
Certificates, the Class A-5-IV Component and the Class A-6-IV Component, an
amount equal to the aggregate Scheduled Principal Balances of the Non-Discount
Mortgage Loans in the Mortgage Pool immediately following the Due Date in the
month prior to the month of the Distribution Date. The initial Notional Amount
for such Certificates is $174,190,725.30.
NOTIONAL AMOUNT CERTIFICATES: The Class X Certificates and the IO
Components.
OFFERED CERTIFICATE: Any Class A-1, Class A-2, Class A-3, Class A-4,
Class A-5, Class A-6, Class A-7, Class A-8, Class A-9, Class X, Class B-1, Class
B-2, Class B-3, Class R-I and Class R-II Certificate.
OFFERED SUBORDINATE CERTIFICATES: The Class B-1, Class B-2 and Class
B-3 Certificates.
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 Master Servicer and
delivered to the Trustee, as required by this Agreement.
OPINION OF COUNSEL: A written opinion of counsel who is or are
acceptable to the Trustee and who, unless required to be Independent (an
"Opinion of Independent Counsel"), may be internal counsel for the Master
Servicer.
ORIGINAL SUBORDINATE PRINCIPAL BALANCE: The sum of the aggregate
Current Principal Amounts of each Class of Subordinate Certificates as of the
Cut-off Date.
ORIGINAL VALUE: The lesser of (i) the Appraised Value or (ii) sales
price of a Mortgaged Property at the time of origination of a Mortgage Loan,
except that in instances where either (i) or (ii) is unavailable, the other may
be used to determine Original Value, or if both (i) and (ii) are unavailable,
Original Value may be determined from other sources reasonably acceptable to the
Trustee.
OUTSTANDING MORTGAGE LOAN: With respect to any Due Date, a Mortgage
Loan which, prior to such Due Date, was not the subject of a Principal
Prepayment in full, did not become a Liquidated Mortgage Loan and was not
purchased pursuant to Sections 2.02 or 2.04 or replaced pursuant to Section
2.05.
OUTSTANDING PRINCIPAL BALANCE: As of the time of any determination, the
principal balance of a Mortgage Loan remaining to be paid by the Mortgagor, or,
in the case of an REO Property, the principal balance of the related Mortgage
Loan remaining to be paid by the Mortgagor at the time
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such property was acquired by the Trust Fund less any Net Insurance Proceeds
with respect thereto to the extent applied to principal.
PAC CERTIFICATES: The Class A-1, Class A-2 and Class A-3 Certificates.
PASS-THROUGH RATE: As to each Class of Certificates, other than the
Component, Class A-7 or Class A-8 Certificates, the rate of interest set forth,
or determined as provided with respect thereto, in Section 5.01(d). With respect
to the Class A-5-IV Component and the initial Interest Accrual Period,
0.197024000% per annum, and as to any Interest Accrual Period thereafter, a per
annum rate equal to 56.5961538512% of the Premium Strip. With respect to the
Class A-6-IV Component and the initial Interest Accrual Period, 0.007881000% per
annum, and as to any Interest Accrual Period thereafter, a per annum rate equal
to 2.2638461488% of the Premium Strip. With respect to the Class A-7
Certificates and the initial Interest Accrual Period, 6.13125% per annum, and as
to any Interest Accrual Period thereafter, a per annum rate equal to LIBOR plus
0.850%, subject to a maximum rate of 9.000% per annum and a minimum rate of
0.850% per annum. With respect to the Class A-8 Certificates and the initial
Interest Accrual Period, 8.60625% per annum, and as to any Interest Accrual
Period thereafter, a per annum rate equal to (x) 24.450% minus (y) LIBOR times
3, subject to a maximum rate of 24.450% per annum and a minimum rate of 0.000%
per annum. With respect to the Class X Certificates and the initial Interest
Accrual Period, 0.143217000% per annum, and as to any Interest Accrual Period
thereafter, a per annum rate equal to 41.1400000000% of the Premium Strip. Any
monthly calculation of interest at a stated rate shall be based upon annual
interest at such rate divided by twelve.
PERMITTED INVESTMENTS: Any one or more of the following obligations or
securities held in the name of the Trustee for the benefit of the
Certificateholders:
(i) direct obligations of, and obligations the timely payment
of which are 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;
(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 (including the Trustee acting in its commercial banking
capacity) and subject to supervision and examination by federal and/or
state banking authorities, provided that the commercial paper and/or
the short-term debt rating and/or the long-term unsecured debt
obligations of such depository institution or trust company at the time
of such investment or contractual commitment providing for such
investment have the Applicable Credit Rating or better from each Rating
Agency and (b) any other demand or time deposit or certificate of
deposit that is fully insured by the Federal Deposit Insurance
Corporation;
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(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 where the Trustee holds the security
therefor;
(iv) securities bearing interest or sold at a discount issued
by any corporation (including the Trustee) incorporated under the laws
of the United States of America or any state thereof that have the
Applicable Credit Rating or better from each Rating Agency 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 part of the Trust to
exceed 10% of the aggregate Outstanding Principal Balances and amounts
of all the Mortgage Loans and Permitted Investments held as part of the
Trust;
(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) having the Applicable Credit Rating or better from
each Rating Agency at the time of such investment;
(vi) a Reinvestment Agreement issued by any bank, insurance
company or other corporation or entity;
(vii) any other demand, money market or time deposit,
obligation, security or investment as may be acceptable to each Rating
Agency as evidenced in writing by each Rating Agency to the Trustee;
and
(viii) any money market or common trust fund having the
Applicable Credit Rating or better from each Rating Agency, including
any such fund for which the Trustee, the Master Servicer or any
affiliate of the Trustee or the Master Servicer acts as a manager or an
advisor;
PROVIDED, HOWEVER, that no instrument or security shall be a Permitted
Investment if such instrument or security evidences a right to receive only
interest payments with respect to the obligations underlying such instrument or
if such security provides for payment of both principal and interest with a
yield to maturity in excess of 120% of the yield to maturity at par or if such
instrument or security is purchased at a price greater than par.
PERMITTED TRANSFEREE: Any Person other than a Disqualified Organization
or an "electing large partnership" (as defined by Section 775 of the Code).
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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.
PHYSICAL CERTIFICATES: Initially, the Private Certificates and the
Residual Certificates.
PLANNED PRINCIPAL AMOUNT: With respect to each Class of PAC
Certificates and each Distribution Date, the amount set forth for such Class in
Exhibit I hereto for the respective Distribution Date.
PO COMPONENT: The Class A-5-III or Class A-6-III Component.
PO COMPONENT CASH SHORTFALL: As defined in Section 6.01(a)(i)(C).
PO COMPONENT DEFERRED AMOUNT: With respect to each Distribution Date,
the aggregate of all amounts allocable on such Distribution Date to the PO
Components in respect of the principal portion of applicable Realized Losses on
Discount Mortgage Loans and PO Component Cash Shortfall, and all amounts
previously allocated in respect of such losses and such shortfall to the PO
Components and not distributed on prior Distribution Dates. No interest shall
accrue on any PO Component Deferred Amount.
PO COMPONENT DEFERRED PAYMENT WRITEDOWN AMOUNT: With respect to any
Distribution Date, the amount if any, distributed on such date in respect of the
PO Component Deferred Amount pursuant to Sections 6.01(a)(i)(A) FOURTH.
PO COMPONENT PRINCIPAL DISTRIBUTION AMOUNT: With respect to the PO
Components on each Distribution Date, an amount, without duplication, equal to
the sum of:
(i) the applicable PO Percentage of all scheduled payments of
principal due on each Discount Mortgage Loan on the related Due Date as
specified in the amortization schedule at the time applicable thereto
(after adjustments for previous principal prepayments, but before any
adjustment to such amortization schedule by reason of any bankruptcy or
similar proceeding or any moratorium or similar waiver or grace
period);
(ii) the applicable PO Percentage of the Scheduled Principal
Balance of each Discount Mortgage Loan which was the subject of a
Voluntary Principal Prepayment in full received by the Master Servicer
during the applicable Prepayment Period;
(iii) the applicable PO Percentage of all Voluntary Principal
Prepayments in part for each Discount Mortgage Loan received during the
applicable Prepayment Period;
(iv) the lesser of (a) the applicable PO Percentage of the sum
of (A) all Net Liquidation Proceeds allocable to principal on each
Discount Mortgage Loan which became
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a Liquidated Mortgage Loan during the related Prepayment Period (other
than a Discount Mortgage Loan described in the immediately following
clause (B)) and (B) the Scheduled Principal Balance of each such
Discount Mortgage Loan purchased by an Insurer from the Trustee during
the related Prepayment Period pursuant to the related Primary Mortgage
Insurance Policy, if any, or otherwise; and (b) the applicable PO
Percentage of the sum of (A) the Scheduled Principal Balance of each
Discount Mortgage Loan which became a Liquidated Mortgage Loan during
the related Prepayment Period (other than a Discount Mortgage Loan
described in the immediately following clause (B)) and (B) the
Scheduled Principal Balance of each such Mortgage Loan that was
purchased by an Insurer from the Trustee during the related Prepayment
Period pursuant to the related Primary Mortgage Insurance Policy, if
any, or otherwise; and
(v) the applicable PO Percentage of the sum of (a) the Scheduled
Principal Balance of each Discount Mortgage Loan or REO Property which
was repurchased by BSMCC or the Master Servicer on such Distribution
Date pursuant to Section 2.02 or 2.03(A)(b) and (b) the excess, if any,
of the Scheduled Principal Balance of a Discount Mortgage Loan that has
been replaced by BSMCC with a Substitute Mortgage Loan pursuant to
Section 2.05 on such Distribution Date over the Scheduled Principal
Balance of such Substitute Mortgage Loan.
PO COMPONENTS: The Class A-5-IV Component and Class A-6-IV Component.
PO PERCENTAGE: With respect to any Discount Mortgage Loan, the
fraction, expressed as a percentage, equal to 6.75% minus the Net Rate thereof
divided by 6.75%; and with respect to any
Non-Discount Mortgage Loan, 0%.
POOL STRIP RATE: With respect to each Non-Discount Mortgage Loan, the
excess of the Net Rate over 6.75% per annum.
PREMIUM STRIP: The weighted average, as of the Due Date in the month
preceding the month in which such Distribution Date occurs, of the Pool Strip
Rates on the Non-Discount Mortgage Loans in the Mortgage Pool.
PREPAYMENT PERIOD: With respect to any Mortgage Loan and any
Distribution Date, the calendar month preceding the month of such Distribution
Date.
PRIMARY MORTGAGE INSURANCE POLICY: Any primary mortgage guaranty
insurance policy issued in connection with a Mortgage Loan which provides
compensation to a Mortgage Note holder in the event of default by the obligor
under such Mortgage Note or the related Security Instrument, or any replacement
policy therefor.
PRINCIPAL PREPAYMENT: Any payment (whether partial or full) or other
recovery of principal on a Mortgage Loan which is received in advance of its
scheduled Due Date to the extent that it is not accompanied by an amount as to
interest representing scheduled interest due on any date or dates
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in any month or months subsequent to the month of prepayment, including
Insurance Proceeds and the purchase price in connection with any purchase of a
Mortgage Loan, any cash deposit in connection with the substitution of a
Mortgage Loan, and the principal portion of Net Liquidation
Proceeds.
PRIVATE CERTIFICATES: Any Class B-4, Class B-5, or Class B-6
Certificate.
PROTECTED ACCOUNT: An account established and maintained in the name of
the Trustee for the benefit of Certificateholders by the Master Servicer or any
Sub-Servicer with respect to the Mortgage Loans and with respect to REO Property
in a Designated Depository Institution for receipt of principal and interest and
other amounts as described in Section 4.01.
QIB: A Qualified Institutional Buyer as defined in Rule 144A
promulgated under the Securities Act.
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 Master 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.
RATE ADJUSTMENT DATE: With respect to each Distribution Date and the
Class A-7 Certificates and Class A-8 Certificates, the LIBOR Business Day
immediately preceding the commencement of the related Interest Accrual Period on
which banks are open for dealing in foreign currency and
exchange in London, England.
RATING AGENCIES: Moody's and DCR.
RATING AGENCY ELIGIBLE ACCOUNT: An account, including one maintained
with the Trustee, which either (i) is a trust account maintained with the
corporate trust department of a depository institution or trust company
(including, without limitation, the Trustee) organized under the laws of the
United States of America or any one of the states thereof or the District of
Columbia which is not affiliated with the Master Servicer, any Sub-Servicer or
any other master servicer other than the Trustee, (ii) is maintained with an
entity which is an institution whose deposits are insured by the FDIC, the
unsecured and uncollateralized long-term debt obligations of which shall be
rated "A2" or higher by Moody's and "A" or higher by DCR, or one of the two
highest short-term ratings by each Rating Agency, and which is either (a) a
federal savings association duly organized, validly existing and in good
standing under the federal banking laws, (b) an institution duly organized,
validly existing and in good standing under the applicable banking laws of any
state, (c) a national banking association under the federal banking laws, or (d)
a principal subsidiary of a bank holding company, or (iii) otherwise meets the
requirements of each Rating Agency for the maintenance of the ratings on the
Certificates.
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REALIZED LOSS: Any (i) Deficient Valuation or (ii) as to any Liquidated
Mortgage Loan, (x) the Outstanding Principal Balance of such Liquidated Mortgage
Loan plus accrued and unpaid interest thereon at the Mortgage Interest Rate
through the last day of the month of such liquidation LESS (y) the related Net
Liquidation Proceeds with respect to such Mortgage Loan.
RECORD DATE: With respect to any Distribution Date, the close of
business on the last Business Day of the month immediately preceding the month
of such Distribution Date.
REFERENCE BANK RATE: With respect to any Interest Accrual Period, as
follows: the arithmetic mean (rounded upwards, if necessary, to the nearest one
sixteenth of a percent) of the offered rates for United States dollar deposits
for one month which are offered by the Reference Banks as of 11:00 A.M., London,
England time, two LIBOR Business Days prior to the first day of such Interest
Accrual Period to prime banks in the London interbank market for a period of one
month in amounts approximately equal to the sum of the outstanding Current
Principal Balance and the Certificates; PROVIDED that at least two such
Reference Banks provide such rate. If fewer than two offered rates appear, the
Reference Bank Rate will be the arithmetic mean (rounded upwards if necessary to
the nearest 1/16%) of the rates quoted by one or more major banks in New York
City, selected by the Master Servicer, as of 11:00 a.m., New York time, on such
date for loans in U.S. Dollars to leading European Banks for a period of one
month in amounts approximately equal to the aggregate Current Principal Balance.
If no such quotations can be obtained, the Reference Bank Rate shall be the
Reference Bank Rate applicable to the preceding Interest Accrual Period.
REINVESTMENT AGREEMENTS: One or more reinvestment agreements,
acceptable to the Rating Agencies, from a bank, insurance company or other
corporation or entity (including the Trustee).
RELIEF ACT: The Soldiers' and Sailors' Civil Relief Act of 1940, as
amended.
RELIEF ACT MORTGAGE LOAN: Any Mortgage Loan as to which the Scheduled
Payment thereof has been reduced due to the application of the Relief Act.
REMIC: A real estate mortgage investment conduit, as defined in the
Code.
REMIC I: That group of assets contained in the Trust Fund designated as
a REMIC consisting of (i) the Mortgage Loans, (ii) the Certificate Account,
(iii) any REO Property relating to the Mortgage Loans and (iv) any proceeds of
the foregoing.
REMIC I CERTIFICATES: The REMIC I Regular Certificates and the Class
R-I Certificates.
REMIC I REGULAR CERTIFICATES: As defined in Section 5.01(c).
REMIC II: That group of assets contained in the Trust Fund designated
as a REMIC consisting of the REMIC I Regular Certificates.
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REMIC II CERTIFICATES: The Certificates and the Class R-II
Certificates.
REMIC II REGULAR CERTIFICATES: The Certificates other than the Class
R-II Certificates.
REMIC OPINION: An Opinion of Independent Counsel, to the effect that
the proposed action described therein would not, under the REMIC Provisions, (i)
cause any Series REMIC to fail to qualify as a REMIC while any regular interest
in any Series REMIC is outstanding, (ii) result in a tax on prohibited
transactions with respect to any Series REMIC or (iii) constitute a taxable
contribution to any Series REMIC after the Startup Day.
REMIC PROVISIONS: The provisions of the federal income tax law relating
to REMICs, which appear at Sections 860A through 860G of the Code, and related
provisions and regulations promulgated thereunder, as the foregoing may be in
effect from time to time.
REO PROPERTY: A Mortgaged Property acquired in the name of the Trustee,
for the benefit of Certificateholders, by foreclosure or deed-in-lieu of
foreclosure in connection with a defaulted Mortgage Loan.
REPURCHASE PRICE: With respect to any Mortgage Loan (or any property
acquired with respect thereto) required to be repurchased pursuant to Section
2.02 or 2.04 an amount equal to the sum of (i) 100% of the Outstanding Principal
Balance of such Mortgage Loan as of the date of repurchase (or if the related
Mortgaged Property was acquired with respect thereto, 100% of the Outstanding
Principal Balance at the date of the acquisition) plus (ii) accrued but unpaid
interest on the Outstanding Principal Balance at the related Mortgage Interest
Rate, through and including the last day of the month of repurchase reduced by
(ii) any portion of the Master Servicing Fee or advances payable to the
purchaser of the Mortgage Loan.
REQUEST FOR RELEASE: A request for release in the form attached hereto
as Exhibit D.
REQUIRED INSURANCE POLICY: With respect to any Mortgage Loan, any
insurance policy which is required to be maintained from time to time under this
Agreement with respect to such Mortgage Loan.
RESIDUAL CERTIFICATES: The Class R-I and Class R-II 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 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.
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RULE 144A CERTIFICATE: The certificate to be furnished by each
purchaser of a Private Certificate (which is also a Physical Certificate) which
is a Qualified Institutional Buyer as defined under Rule 144A promulgated under
the Securities Act, substantially in the form set forth as Exhibit
F-2 hereto.
SAMI: Structured Asset Mortgage Investments Inc.
SCHEDULED PAYMENT: With respect to any Mortgage Loan and any month, the
scheduled payment or payments of principal and interest due during such month on
such Mortgage Loan which either is payable by a Mortgagor in such month under
the related Mortgage Note or, in the case of REO Property, would otherwise have
been payable under the related Mortgage Note.
SCHEDULED PRINCIPAL: The principal portion of any Scheduled Payment.
SCHEDULED PRINCIPAL BALANCE: With respect to any Mortgage Loan on any
Distribution Date, (i) the unpaid principal balance of such Mortgage Loan as of
the close of business on the related Due Date (i.e., taking account of the
principal payment to be made on such Due Date and irrespective of any
delinquency in its payment), as specified in the amortization schedule at the
time relating thereto (before any adjustment to such amortization schedule by
reason of any bankruptcy or similar proceeding occurring after the Cut-off Date
(other than a Deficient Valuation) or any moratorium or similar waiver or grace
period) less (ii) any Principal Prepayments (including the principal portion of
Net Liquidation Proceeds) received during or prior to the related Prepayment
Period; provided that the Scheduled Principal Balance of a Liquidated Mortgage
Loan is zero.
SECURITIES ACT: The Securities Act of 1933, as amended.
SECURITIES LEGEND: "THIS CERTIFICATE HAS NOT BEEN AND WILL NOT BE
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"),
OR UNDER ANY STATE SECURITIES LAWS. THE HOLDER HEREOF, BY PURCHASING THIS
CERTIFICATE, AGREES THAT THIS CERTIFICATE MAY BE REOFFERED, RESOLD, PLEDGED OR
OTHERWISE TRANSFERRED ONLY IN COMPLIANCE WITH THE SECURITIES ACT AND OTHER
APPLICABLE LAWS AND ONLY (1) PURSUANT TO RULE 144A UNDER THE SECURITIES ACT
("RULE 144A") TO A PERSON THAT THE HOLDER REASONABLY BELIEVES IS A QUALIFIED
INSTITUTIONAL BUYER WITHIN THE MEANING OF RULE 144A (A "QIB"), PURCHASING FOR
ITS OWN ACCOUNT OR A QIB PURCHASING FOR THE ACCOUNT OF A QIB, WHOM THE HOLDER
HAS INFORMED, IN EACH CASE, THAT THE REOFFER, RESALE, PLEDGE OR OTHER TRANSFER
IS BEING MADE IN RELIANCE ON RULE 144A, (2) PURSUANT TO AN EXEMPTION FROM
REGISTRATION PROVIDED BY RULE 144 UNDER THE SECURITIES ACT (IF AVAILABLE) OR (3)
IN CERTIFICATED FORM TO AN "INSTITUTIONAL ACCREDITED INVESTOR" WITHIN THE
MEANING THEREOF IN RULE 501(a)(1), (2), (3) or (7) OF REGULATION D UNDER THE ACT
OR ANY ENTITY IN WHICH ALL OF THE EQUITY OWNERS COME WITHIN SUCH PARAGRAPHS
PURCHASING NOT
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FOR DISTRIBUTION IN VIOLATION OF THE SECURITIES ACT, SUBJECT TO (A) THE RECEIPT
BY THE TRUSTEE OF A LETTER SUBSTANTIALLY IN THE FORM PROVIDED IN THE AGREEMENT
AND (B) THE RECEIPT BY THE TRUSTEE OF SUCH OTHER EVIDENCE ACCEPTABLE TO THE
TRUSTEE THAT SUCH REOFFER, RESALE, PLEDGE OR TRANSFER IS IN COMPLIANCE WITH THE
SECURITIES ACT AND OTHER APPLICABLE LAWS OR IN EACH CASE IN ACCORDANCE WITH ALL
APPLICABLE SECURITIES LAWS OF THE UNITED STATES AND ANY OTHER APPLICABLE
JURISDICTION. 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, PTE 91-38, PTE 90-1, PTE 95-60 OR PTE 96-23
AND (II) WILL NOT GIVE RISE TO ANY ADDITIONAL FIDUCIARY DUTIES ON THE PART OF
THE MASTER SERVICER OR THE TRUSTEE, WHICH WILL BE DEEMED REPRESENTED BY AN OWNER
OF A BOOK-ENTRY CERTIFICATE OR A GLOBAL CERTIFICATE AND WILL BE EVIDENCED BY A
REPRESENTATION TO SUCH EFFECT BY OR ON BEHALF OF A HOLDER OF A PRIVATE
CERTIFICATE."
SECURITY INSTRUMENT: A written instrument creating a valid first lien
on a Mortgaged Property securing a Mortgage Note, which may be any applicable
form of mortgage, deed of trust, deed to secure debt or security deed, including
any riders or addenda thereto.
SELLER: Structured Asset Mortgage Investments Inc. (formerly known as
Bear Stearns Mortgage Securities, Inc.), a Delaware corporation, or its
successors in interest.
SENIOR CERTIFICATES: The Class A-1, Class A-2, Class A-3, Class A-4,
Class A-5, Class A-6, Class A-7, Class A-8, Class A-9, Class X, Class R-I and
Class R-II Certificates.
SENIOR P&I CERTIFICATES: The Senior Certificates (other than the IO
Components and the PO Components).
SENIOR P&I OPTIMAL PRINCIPAL AMOUNT: As to any Distribution Date, an
amount equal to the sum, without duplication, of:
(i) the Senior Percentage of the Non-PO Percentage of all
scheduled payments of principal allocated to the Scheduled Principal
Balance due on each Outstanding Mortgage Loan on the related Due Date
as specified in the amortization schedule at the time applicable
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thereto (after adjustments for previous Principal Prepayments but
before any adjustment to such amortization schedule by reason of any
bankruptcy or similar proceeding or any moratorium or similar waiver or
grace period);
(ii) the Senior Prepayment Percentage of the Non-PO Percentage
of all Voluntary Principal Prepayments in part received during the
related Prepayment Period with respect to each Mortgage Loan, together
with the Senior Prepayment Percentage of the Non-PO Percentage of the
Scheduled Principal Balance of each Mortgage Loan which was the subject
of a Voluntary Principal Prepayment in full during the related
Prepayment Period;
(iii) the lesser of (a) the Senior Prepayment Percentage of
the Non-PO Percentage of the sum of (A) all Net Liquidation Proceeds
allocable to principal received in respect of each Mortgage Loan which
became a Liquidated Mortgage Loan during the related Prepayment Period
(other than Mortgage Loans described in the immediately following
clause (B)) and (B) the Scheduled Principal Balance of each such
Mortgage Loan purchased by an Insurer from the Trustee during the
related Prepayment Period, pursuant to the related Primary Mortgage
Insurance Policy, if any, or otherwise; and (b) the Senior Percentage
of the applicable Non-PO Percentage of the sum of (A) the Scheduled
Principal Balance of each Mortgage Loan which became a Liquidated
Mortgage Loan during the related Prepayment Period (other than the
Mortgage Loans described in the immediately following clause (B)) and
(B) the Scheduled Principal Balance of each such Mortgage Loan that was
purchased by an Insurer from the Trustee during the related Prepayment
Period pursuant to the related Primary Mortgage Insurance Policy, if
any, or otherwise;
(iv) the applicable Senior Prepayment Percentage of the
applicable Non-PO Percentage of the Scheduled Principal Balance of each
Mortgage Loan or REO Property which was purchased by BSMCC or the
Master Servicer on such Distribution Date pursuant to Section 2.02 or
2.04(b); and
(v) the applicable Senior Prepayment Percentage of the
applicable Non-PO Percentage of the excess, if any, of the Scheduled
Principal Balance of a Mortgage Loan that has been replaced by BSMCC or
the Master Servicer with a Substitute Mortgage Loan pursuant to Section
2.05 on such Distribution Date over the Scheduled Principal Balance of
such Substitute Mortgage Loan.
SENIOR PERCENTAGE: Initially, 95.95%. On any Distribution Date, the
lesser of (i) 100% and (ii) the percentage (carried to six places rounded up)
obtained by dividing the aggregate Current Principal Amounts of all the Senior
P&I Certificates immediately preceding such Distribution Date by the aggregate
Scheduled Principal Balance of the Mortgage Loans (other than the PO Percentage
thereof) as of the beginning of the related Due Period.
SENIOR PREPAYMENT PERCENTAGE: On any Distribution Date occurring during
the periods set forth below, as follows:
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<TABLE>
<CAPTION>
Period (dates inclusive) Senior Prepayment Percentage
- ------------------------------------------------------- ------------------------------------------------------------
<S> <C>
January 25, 1999 - December 25, 2003 100%
January 25, 2004 - December 25, 2004 Applicable Senior Percentage plus 70% of the
applicable Subordinate Percentage
January 25, 2005 - December 25, 2005 Applicable Senior Percentage plus 60% of the
applicable Subordinate Percentage
January 25, 2006 - December 25, 2006 Applicable Senior Percentage plus 40% of the
applicable Subordinate Percentage
January 25, 2007 - December 25, 2007 Applicable Senior Percentage plus 20% of the
applicable Subordinate Percentage
January 25, 2008 and thereafter Applicable Senior Percentage.
</TABLE>
Notwithstanding the foregoing, if on any Distribution Date the Senior Percentage
exceeds the Senior Percentage as of the Cut-Off Date, the Senior Prepayment
Percentage for such Distribution Date will equal 100%. On the Distribution Date
on which the Current Principal Amounts of the Senior Certificates are reduced to
zero, the Senior Prepayment Percentage shall be the minimum percentage
sufficient to effect such reduction and thereafter shall be zero.
In addition, no reduction of the applicable Senior Prepayment
Percentage shall occur on any Distribution Date unless, as of the last day of
the month preceding such Distribution Date, either (A) (i)(x) the aggregate
Scheduled Principal Balance of Mortgage Loans delinquent 60 days or more
(including for this purpose any such Mortgage Loans in foreclosure and such
Mortgage Loans with respect to which the related Mortgaged Property has been
acquired by the Trust), averaged over the last six months, as a percentage of
the sum of the aggregate Current Principal Amount of the Subordinate
Certificates does not exceed 50% or (y) the aggregate Scheduled Principal
Balance of the Mortgage Loans delinquent 60 days or more (including for this
purpose any such Mortgage loans in foreclosure and Mortgage Loans with respect
to which the related Mortgaged Property has been acquired by the Trust),
averaged over the last six months, as a percentage of the aggregate Scheduled
Principal Balances of the Mortgage Loans averaged over the last six months, does
not exceed 2.0%; and (ii) cumulative Realized Losses on such Mortgage Loans do
not exceed (a) 30% of the applicable Original Subordinate Principal Balance if
such Distribution Date occurs between and including January 2004 and December
2004, (b) 35% of the Original Subordinate Principal Balance if such Distribution
Date occurs between and including January 2005 and December 2005, (c) 40% of the
applicable Original Subordinate Principal Balance if such Distribution Date
occurs between and including January 2006 and December 2006, (d) 45% of the
applicable Original Subordinate Principal Balance if such Distribution Date
occurs between and including January 2007 and December 2007, and (e) 50% of the
applicable Original Subordinate Principal Balance if such Distribution Date
occurs during or after January 2008; or (B) (i) the aggregate Scheduled
Principal
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Balance of the Mortgage Loans delinquent 60 days or more (including for this
purpose any such Mortgage Loans in foreclosure and Mortgage Loans with respect
to which the related Mortgaged Property has been acquired by the Trust),
averaged over the last six months, does not exceed 4.0%; and (ii) cumulative
Realized Losses on such Mortgage Loans do not exceed (a) 10% of the aggregate
Current Principal Amounts of the applicable Original Subordinate Principal
Balance if such Distribution Date occurs between and including January 2004 and
December 2004, (b) 15% of the applicable Original Subordinate Principal Balance
if such Distribution Date occurs between and including January 2005 and December
2005, (c) 20% of the applicable Original Subordinate Principal Balance if such
Distribution Date occurs between and including January 2006 and December 2006,
(d) 25% of the applicable Original Subordinate Principal Balance if such
Distribution Date occurs between and including January 2007 and December 2007,
and (e) 30% of the applicable Original Subordinate Principal Balance if such
Distribution Date occurs during or after January 2008.
SERIES REMIC: Any of REMIC I or REMIC II.
SERVICING ADVANCES: All reasonable and customary "out of pocket" costs
and expenses incurred in the performance by the Master Servicer or any
Sub-Servicer of its servicing obligations, including, but not limited to, the
cost of (i) the preservation, restoration and protection of the Mortgaged
Property, (ii) any enforcement or judicial proceedings, including foreclosures,
(iii) the management and liquidation of the REO Property, including reasonable
fees paid to any independent contractor in connection therewith, (iv) compliance
with the obligations under Section 3.07 or 3.10, and (v) in connection with the
liquidation of a Mortgage Loan, expenditures relating to the purchase or
maintenance of the first lien on the Mortgaged Property pursuant to Section
3.12, all of which reasonable and customary out-of-pocket costs and expenses are
reimbursable to the Master Servicer or such Sub-Servicer to the extent provided
in Sections 4.02(b) and 4.03(b).
SERVICING OFFICER: Any officer of the Master Servicer or of an agent or
independent contractor through which all or part of the Master Servicer's
servicing responsibilities are carried out, 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
Master Servicer as such list may from time to time be amended in accordance with
the foregoing.
STARTUP DAY: December 31, 1998.
SUBORDINATE CERTIFICATES: The Class B-1, Class B-2, Class B-3, Class
B-4, Class B-5 and Class B-6 Certificates.
SUBORDINATE CERTIFICATE WRITEDOWN AMOUNT: As to any Distribution Date,
the amount by which (a) the sum of the Current Principal Amounts of all of the
Certificates (after giving effect to the distribution of principal and the
allocation of applicable Realized Losses and any applicable PO Component
Deferred Payment Writedown Amount in reduction of the Current Principal Amounts
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of such Certificates on such Distribution Date) exceeds (b) the aggregate
Scheduled Principal Balances of the Mortgage Loans on the Due Date related to
such Distribution Date.
SUBORDINATE OPTIMAL PRINCIPAL AMOUNT: As to any Distribution Date, an
amount equal to the sum, without duplication, of the following (but in no event
greater than the aggregate Current Principal Amounts of the Subordinate
Certificates immediately prior to such Distribution Date):
(i) the applicable Subordinate Percentage of the applicable
Non-PO Percentage of the principal portion of all Monthly Payments due
on each Outstanding Mortgage Loan on the related Due Date, as specified
in the amortization schedule at the time applicable thereto (after
adjustment for previous Principal Prepayments but before any adjustment
to such amortization schedule by reason of any bankruptcy or similar
proceeding or any moratorium or similar waiver or grace period);
(ii) the applicable Subordinate Prepayment Percentage of the
applicable Non-PO Percentage of each Voluntary Principal Payment in
part during the related Prepayment Period with respect to each Mortgage
Loan and the applicable Subordinate Prepayment Percentage of the
applicable Non-PO Percentage of the Scheduled Principal Balance of each
Mortgage Loan that was the subject of a Voluntary Principal Prepayment
in full during the related Prepayment Period;
(iii) the excess, if any, of (A) all Net Liquidation Proceeds
allocable to principal received during the related Prepayment Period
over (B) the sum of the amounts distributable pursuant to clause (iii)
of the definition of Senior P&I Optimal Principal Amount and clause
(iv) of the definition of the PO Component Principal Distribution
Amount, on such Distribution Date;
(iv) the applicable Subordinate Prepayment Percentage of the
applicable Non-PO Percentage of the sum of (a) the Scheduled Principal
Balance of each Mortgage Loan which was purchased by BSMCC or the
Master Servicer on such Distribution Date pursuant to Section 2.02 or
2.03(A)(b) and (b) the difference, if any, between the Scheduled
Principal Balance of a Mortgage Loan that has been replaced by BSMCC or
the Master Servicer with a substitute Mortgage Loan pursuant to Section
2.05 on such Distribution Date over the Scheduled Principal Balance of
such substitute Mortgage Loan; and
(v) on the Distribution Date on which the Current Principal
Amounts of the Senior P&I Certificates have all been reduced to zero,
100% of any applicable Senior P&I Optimal Principal Amount.
After the aggregate current Principal Amounts of the relevant Subordinate
Certificates have been reduced to zero, the Subordinate Optimal Principal Amount
shall be zero.
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SUBORDINATE PERCENTAGE: On any Distribution Date, 100% minus the
applicable Senior Percentage.
SUBORDINATE PREPAYMENT PERCENTAGE: On any Distribution Date, 100% minus
the applicable Senior Prepayment Percentage, except that on any Distribution
Date after the Current Principal Amounts of the Senior Certificates have each
been reduced to zero, the Subordinate Prepayment Percentage will equal 100.
SUB-SERVICER: Any Person with which either of the Master Servicer has
entered into a Sub- Servicing Agreement and which meets the qualifications of a
Sub-Servicer pursuant to Section 3.02.
SUB-SERVICING AGREEMENT: Any agreement entered into between the Master
Servicer and a Sub-Servicer pursuant to Section 3.02.
SUBSTITUTE MORTGAGE LOAN: A mortgage loan tendered to the Trustee
pursuant to Section 2.05, in each case, (i) which has an Outstanding Principal
Balance not materially greater nor materially less than the Mortgage Loan for
which it is to be substituted; (ii) which has a fixed Mortgage Interest Rate and
Net Rate not less than, and not materially greater than, such Mortgage Loan;
(iii) which has a maturity date not materially earlier or later than such
Mortgage Loan and not later than the latest maturity date of any Mortgage Loan;
(iv) which is of the same property type and occupancy type as such Mortgage
Loan; (v) which has a Loan-to-Value Ratio not greater than the Loan-to-Value
Ratio of such Mortgage Loan; (vi) which is current in payment of principal and
interest as of the date of substitution; and (vii) as to which the payment terms
do not vary in any material respect from the payment terms of the Mortgage Loan
for which it is to be substituted.
TAC CERTIFICATES: The Class A-4 Certificates.
TAC COMPONENTS: The Class A-5-II Component and the Class A-6-II
Component.
TARGETED PRINCIPAL AMOUNT: With respect to each Class of TAC
Certificates and each TAC Components and each Distribution Date, the amount set
forth for such Class in Exhibit I hereto for the respective Distribution Date.
TAX ADMINISTRATION AND TAX MATTERS PERSON: The Trustee or any successor
thereto or assignee thereof shall serve as tax administrator hereunder and as
agent for each Tax Matters Person. The Holder of each Class of Residual
Certificates shall be the Tax Matters Person for each of the related Series
REMICs, as more particularly set forth in Section 9.13 hereof.
TRUSTEE: Norwest Bank Minnesota, National Association, or its successor
in interest, or any successor trustee appointed as herein provided.
TRUSTEE'S FEES: With respect to any Distribution Date, the investment
earnings permitted to be paid to the Trustee pursuant to Section 4.02(c) hereof.
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TRUST FUND OR TRUST: The corpus of the trust created by this Agreement,
consisting of the Mortgage Loans and the other assets described in Section
2.01(a).
UNITED STATES PERSON: A citizen or resident of the United States, a
corporation or partnership (including an entity treated as a corporation or
partnership for 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.
UNINSURED CAUSE: Any cause of damage to a Mortgaged Property or REO
Property such that the complete restoration of such Mortgaged Property or REO
Property is not fully reimbursable by the hazard insurance policies required to
be maintained pursuant to Section 3.10, without regard to whether or not such
policy is maintained.
VOLUNTARY PRINCIPAL PREPAYMENT: With respect to any Distribution Date,
any Principal Prepayment received from the related Mortgagor on a Mortgage Loan.
Section 1.02. DETERMINATION OF LIBOR.
LIBOR applicable to the calculation of the Pass-Through Rates on the
Class A-7 and Class A-8 Certificates for any Interest Accrual Period (other than
the initial Interest Accrual Period) will be determined on each Rate Adjustment
Date as follows:
For any Interest Accrual Period other than the first Interest Accrual
Period, the rate for United States dollar deposits for one month which appears
on the Telerate Screen Page 3750 as of 11:00 A.M., London, England time, two
LIBOR Business Days prior to the first day of such Interest Accrual Period. For
the first Interest Accrual Period, LIBOR equals 5.281% per annum with respect to
the Class A-7 and Class A-8 Certificates. If such rate does not appear on such
page (or such other page as may replace that page on that service, or if such
service is no longer offered, such other service for displaying LIBOR or
comparable rates as may be reasonably selected by the Master Servicer), the rate
will be the Reference Bank Rate. If no such quotations can be obtained and no
Reference Bank Rate is available, LIBOR will be LIBOR applicable to the
preceding Distribution Date.
The establishment of LIBOR by the Trustee on any Rate Adjustment Date
and the Trustee's subsequent calculation of the Pass-Through Rates applicable to
the Class A-7 and Class A-8
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Certificates for the relevant Interest Accrual Period, in the absence of
manifest error, will be final and binding.
Promptly following each Rate Adjustment Date the Trustee shall supply
the Master Servicer with the results of its determination of LIBOR on such date.
Furthermore, the Trustee will supply to any Certificateholder so requesting by
telephone the Pass-Through Rates on the Class A-7 and Class A-8 Certificates for
the current and the immediately preceding Interest Accrual Periods.
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ARTICLE II
Conveyance of Mortgage Loans;
Original Issuance of Certificates
Section 2.01. CONVEYANCE OF MORTGAGE LOANS TO TRUSTEE. (a) The Seller
concurrently with the execution and delivery of this Agreement, sells, transfers
and assigns to the Trust without recourse all its right, title and interest in
and to (i) the Mortgage Loans identified in the Mortgage Loan Schedule,
including all interest and principal due with respect to the Mortgage Loans
after the Cut-off Date, but excluding any payments of principal and interest due
on or prior to the Cut-off Date; (ii) such assets as shall from time to time be
credited or are required by the terms of this Agreement to be credited to the
Certificate Account (subject to the right of the Trustee to retain all income
from Permitted Investments under Section 4.02(c)), (iii) such assets relating to
the Mortgage Loans as from time to time may be held by the Master Servicer or a
Sub-Servicer in the Protected Account (excluding any income to the Master
Servicer or any Sub-Servicer from Permitted Investments under Subsection
4.01(a)), (iv) any Servicing Accounts (to the extent the mortgagee has a claim
thereto and excluding any income to the Master Servicer or Sub-Servicer or
interest payable to Mortgagors pursuant to applicable law), (v) any REO
Property, (vi) the Required Insurance Policies and any amounts paid or payable
by the insurer under any Insurance Policy (to the extent the mortgagee has a
claim thereto), (vii) the Mortgage Loan Purchase Agreement to the extent
provided in Subsection 2.04(a), and (viii) any proceeds of the foregoing.
Although it is the intent of the parties to this Agreement that the conveyance
of the Seller's right, title and interest in and to the Mortgage Loans and other
assets in the Trust Fund pursuant to this Agreement shall constitute a purchase
and sale and not a loan, in the event that such conveyance is deemed to be a
loan, it is the intent of the parties to this Agreement that the Seller shall be
deemed to have granted to the Trustee a first priority perfected security
interest in all of the Seller's right, title and interest in, to and under the
Mortgage Loans and other assets in the Trust Fund, and that this Agreement shall
constitute a security agreement under applicable law.
(b) In connection with the above transfer and assignment, the Seller
hereby deposits with the Trustee, with respect to each 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 original payee thereof to
the Person endorsing it to the Trustee, (ii) the original Security Instrument,
which shall have been recorded, with evidence of such recording indicated
thereon, (iii) the assignment (which may be in the form of a blanket assignment
if permitted in the jurisdiction in which the Mortgaged Property is located) to
the Trustee of the Security Instrument, with evidence of recording with respect
to each Mortgage Loan in the name of the Trustee thereon (or if clause (x) in
the proviso below applies, shall be in recordable form), (iv) all intervening
assignments of the Security Instrument, if applicable, to the Seller with
evidence of recording thereon, (v) the original or a copy of the policy or
certificate of primary mortgage guaranty insurance, if any, (vi) the original
policy of title insurance or mortgagee's certificate of title insurance or
commitment or binder for title insurance and (vii) originals of all modification
agreements, if applicable;
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PROVIDED, HOWEVER, that in lieu of the foregoing, the Seller may deliver the
following documents, under the circumstances set forth below: (x) in lieu of the
original Security Instrument, assignments to the Trustee or intervening
assignments thereof which have been delivered, are being delivered or will, upon
receipt of recording information relating to the Security Instrument required to
be included thereon, be delivered to recording offices for recording and have
not been returned to the Seller in time to permit their delivery as specified
above, the Seller may deliver a true copy thereof with a certification by BSMCC
or the Master Servicer, on the face of such copy, substantially as follows:
"Certified to be a true and correct copy of the original, which has been
transmitted for recording"; (y) in lieu of the Security Instrument, assignment
to the Trustee or intervening assignments thereof, if the applicable
jurisdiction retains the originals of such documents (as evidenced by a
certification from BSMCC or the Master Servicer, to such effect) the Seller may
deliver photocopies of such documents containing an original certification by
the judicial or other governmental authority of the jurisdiction where such
documents were recorded; and (z) in lieu of the Mortgage Notes relating to 7
Mortgage Loans, with an aggregate Scheduled Principal Balance as of the Cut-off
Date of approximately $2,217,850, each as identified in the list delivered by
the Seller to the Trustee on the Closing Date and set forth in Exhibit J hereto,
the Seller may deliver a lost note affidavit and, if available, a copy of the
original Mortgage Note; and PROVIDED, FURTHER, 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 of a Servicing Officer to such effect and
shall deposit all amounts paid in respect of such Mortgage Loans in the
Certificate Account on the Closing Date. The Seller shall deliver such original
documents (including any original documents as to which certified copies had
previously been delivered) to the Trustee promptly after they are received. The
Master Servicer shall cause, at its expense, the Security Instrument and
intervening assignments, if any, and the assignment of the Security Instrument
to the Trustee to be recorded not later than 180 days after the Closing Date.
Section 2.02. ACCEPTANCE OF MORTGAGE LOANS BY TRUSTEE. (a) The Trustee
acknowledges receipt of, subject to further review and the exceptions which may
be noted pursuant to the procedures described below, the documents (or certified
copies thereof) delivered to it pursuant to Section 2.01 and declares that it
holds and will continue to hold those documents and any amendments, replacements
or supplements thereto and all other assets of the Trust Fund delivered to it as
Trustee in trust for the use and benefit of all present and future Holders of
the Certificates. On the Closing Date (or, with respect to any Substitute
Mortgage Loan, within 5 Business Days after the receipt by the Trustee thereof),
the Trustee agrees, for the benefit of the Certificateholders, to review each
Mortgage File delivered to it and to execute and deliver, or cause to be
executed and delivered, to the Seller and the Master Servicer an Initial
Certification substantially in the form annexed hereto as Exhibit G. 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, as identified in Exhibit B
to this Agreement, as supplemented (PROVIDED, HOWEVER, that with respect to
those documents described in subclauses (b)(iv), (b)(v) and (b)(vi) of Section
2.01, the Trustee's obligations shall extend only to documents actually
delivered
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pursuant to such subsections). In performing any such review, the Trustee may
conclusively rely on the purported due execution and genuineness of any such
document and on the purported genuineness of any signature thereon. If the
Trustee finds any document constituting part of the Mortgage File not to have
been executed or received, or to be unrelated to the Mortgage Loans identified
in Exhibit B or to appear to be defective on its face, the Trustee shall
promptly notify BSMCC. BSMCC shall correct or cure any such defect within 90
days from the date of notice from the Trustee of the defect and if BSMCC fails
to correct or cure the defect within such period, and such defect materially and
adversely affects the interests of the Certificateholders in the related
Mortgage Loan, BSMCC will, subject to Section 2.05, within 90 days from the
Trustee's notification purchase such Mortgage Loan at the Repurchase Price;
PROVIDED, HOWEVER, that if such defect relates solely to the inability of BSMCC
to deliver the original Security Instrument or intervening assignments thereof,
or a certified copy because the originals of such documents, or a certified copy
have not been returned by the applicable jurisdiction, BSMCC shall not be
required to purchase such Mortgage Loan if BSMCC delivers such original
documents or certified copy promptly upon receipt, but in no event later than
360 days after the Closing Date. The foregoing repurchase obligation shall not
apply in the event that BSMCC cannot deliver such original or copy of any
document submitted for recording to the appropriate recording office in the
applicable jurisdiction because such document has not been returned by such
office; provided that BSMCC shall instead deliver a recording receipt of such
recording office or, if such receipt is not available, a certificate of a
Servicing Officer confirming that such documents have been accepted for
recording, and delivery to the Trustee shall be effected by BSMCC within thirty
days of its receipt of the original recorded document.
(b) No later than 180 days after the Closing Date, the Trustee will
review, for the benefit of the Certificateholders, the Mortgage Files delivered
to it and will execute and deliver or cause to be executed and delivered to the
Seller and the Master Servicer, a Final Certification substantially in the form
annexed hereto as Exhibit H. 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 the Trustee finds
any document constituting part of the Mortgage File has not been received, or to
be unrelated, determined on the basis of the Mortgagor name, original principal
balance and loan number, to the Mortgage Loans identified in Exhibit B or to
appear defective on its face, the Trustee shall promptly notify BSMCC (PROVIDED,
HOWEVER, that with respect to those documents described in subsection (b)(iv),
(b)(v) and (b)(vi) of Section 2.01, the Trustee's obligations shall extend only
to the documents actually delivered pursuant to such subsections). BSMCC shall
correct or cure any such defect or shall deliver to the Trustee an Opinion of
Counsel to the effect that such defect does not materially or adversely affect
the interests of Certificateholders in such Mortgage Loan within 90 days from
the date of notice from the Trustee of the defect and if BSMCC is unable to cure
such defect within such period, and if such defect materially and adversely
affects the interests of the Certificateholders in the related Mortgage Loan,
BSMCC shall, subject to Section 2.05, within 90 days from the Trustee's
notification purchase such Mortgage Loan at the Repurchase Price; PROVIDED,
HOWEVER, that if such defect relates solely to the inability of BSMCC to deliver
the original Security Instrument or intervening assignments thereof, or a
certified copy, because the originals of such documents, or a certified copy,
have not been returned by the
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applicable jurisdiction, BSMCC shall not be required to purchase such Mortgage
Loan, if BSMCC delivers such original documents or certified copy promptly upon
receipt, but in no event later than 360 days after the Closing Date.
(c) In the event that a Mortgage Loan is purchased by BSMCC in
accordance with Subsections 2.02(a) or (b) above, BSMCC shall provide the
Repurchase Price to the Trustee for deposit in the Certificate Account and shall
provide to the Trustee written notification detailing the components of the
Repurchase Price. Upon deposit of the Repurchase Price in the Certificate
Account, the Trustee shall release to BSMCC the related Mortgage File and shall
execute and deliver all instruments of transfer or assignment, without recourse,
furnished to it by BSMCC as are necessary to vest in BSMCC title to and rights
under the Mortgage Loan. Such purchase shall be deemed to have occurred on the
date on which the Repurchase Price in available funds is received by the
Trustee. The Trustee shall amend the Mortgage Loan Schedule, which were
previously delivered to it by Seller in a form agreed to between the Seller and
the Trustee, to reflect such repurchase and shall promptly notify the Master
Servicer and the Rating Agencies of such amendment. The obligation of BSMCC to
repurchase any Mortgage Loan as to which such a defect in a constituent document
exists shall be the sole remedy respecting such defect available to the
Certificateholders or to the Trustee on their behalf.
Section 2.03. REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE MASTER
SERVICER. The Master Servicer hereby represents and warrants to the Trustee and,
solely for purposes of clauses (ix) and (x) of this Section 2.03, to BSMCC as of
the Closing Date that:
(i) It is a corporation duly organized, validly existing and
in good standing under the laws of the state of its incorporation and
is in good standing as a foreign corporation in each jurisdiction where
such qualification is necessary or is exempt from such qualification or
not required by applicable law to effect such qualification and, for so
long as it is the Master Servicer under this Agreement, will remain a
corporation duly organized, validly existing and in good standing under
the laws of the state of its incorporation, any state of
reincorporation or the laws of the United States of America and in good
standing as a foreign corporation in each jurisdiction where such
qualification is necessary (except, in the case of foreign corporation
qualification both on the date hereof and in the future, where the
failure so to qualify would not reasonably be expected to have a
material adverse effect on Master Servicer's ability to enter into this
Agreement or to perform its obligations hereunder), and has the
corporate power and authority to perform its obligations under this
Agreement;
(ii) The execution and delivery of this Agreement have been
duly authorized by all requisite corporate action;
(iii) This Agreement, assuming due authorization, execution,
and delivery by the other parties hereto, will constitute its legal,
valid and binding obligation, enforceable in accordance with its terms,
except only as such enforcement may be limited by applicable
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Debtor Relief Laws and that certain equitable remedies may not be
available regardless of whether enforcement is sought in equity or at
law;
(iv) Its execution and delivery of this Agreement and its
performance and compliance with the terms of this Agreement will not
(A) violate its certificate of incorporation or bylaws (B) to its
knowledge, violate any law or regulation, or any administrative or
judicial decree or order to which it is subject or (C) constitute a
default (or an event which, with notice or lapse of time, or both,
would constitute a default) under, or result in the breach of, any
material contract, agreement or other instrument to which it is a party
or which may be applicable to it or any of its assets;
(v) To its best knowledge, after reasonable investigation, it
is not in default with respect to any order or decree of any court or
any order, regulation or demand of any federal, state, municipal or
governmental agency, which default would reasonably be expected to have
consequences that would materially and adversely affect its financial
condition or operations or its performance hereunder;
(vi) The consummation of the transactions contemplated by this
Agreement are in the ordinary course of its business;
(vii) No litigation is pending or, to its best knowledge,
threatened against it, which could be reasonably expected to materially
and adversely affect its entering into this Agreement or performing its
obligations under this Agreement or which would have a
material adverse effect on its financial condition; and
(viii) Its computer programs, systems and applications used in
servicing the Mortgage Loans will be replaced or modified and
maintained to operate in such a manner that at all times, including on
and after January 1, 2000, it can service the Mortgage Loans
in accordance with the terms of this Agreement.
Section 2.04. ASSIGNMENT OF INTEREST IN THE MORTGAGE LOAN PURCHASE
AGREEMENT. (a) The Seller hereby assigns to the Trustee all of its right, title
and interest in the Mortgage Loan Purchase Agreement (but none of its
obligations) insofar as such contract relates to the representations and
warranties set forth in Exhibit C hereto regarding the Mortgage Loans (including
the substitution and repurchase obligations of BSMCC); provided that the
obligations of BSMCC to substitute or repurchase a Mortgage Loan shall be the
Trustee's and the Certificateholders' sole remedy for any breach thereof. At the
request of the Trustee, the Seller shall take such actions as may be necessary
to enforce the above right, title and interest on behalf of the Trustee and the
Certificateholders or shall execute such further documents as the Trustee may
reasonably require in order to enable the Trustee to carry out such enforcement.
(b) If the Seller, the Master Servicer or the Trustee discovers a
breach of any of the representations and warranties set forth in Exhibit C or
Section 7 of the Mortgage Loan Purchase
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Agreement and such breach existed on the date the representation and warranty
was made, which breach materially and adversely affects the value of the
interests of Certificateholders or the Trustee in the related Mortgage Loan, the
party discovering the breach shall give prompt written notice of the breach to
the other parties. BSMCC within 90 days of its discovery or receipt of notice
that such breach has occurred (whichever occurs earlier), shall cure the breach
in all material respects or, subject to Section 2.05, shall purchase the
Mortgage Loan or any property acquired with respect thereto from the Trustee at
the Repurchase Price; PROVIDED, HOWEVER, that if there is a breach of any
representation set forth in Exhibit C and the Mortgage Loan or the related
property acquired with respect thereto has been sold, then BSMCC shall pay, in
lieu of the Repurchase Price, any excess of the Repurchase Price over the Net
Liquidation Proceeds received upon such sale. (If the Net Liquidation Proceeds
exceed the Repurchase Price, any excess shall be paid to BSMCC to the extent not
required by law to be paid to the borrower.) Any such purchase by BSMCC shall be
made by providing an amount equal to the Repurchase Price to the Trustee for
deposit in the Certificate Account and the Trustee, upon deposit of the
Repurchase Price in the Certificate Account and of written notification
detailing the components of such Repurchase Price, shall release to BSMCC the
related Mortgage File and shall execute and deliver all instruments of transfer
or assignment furnished to it by BSMCC, without recourse, as are necessary to
vest in BSMCC title to and rights under the Mortgage Loan or any property
acquired with respect thereto. Such purchase shall be deemed to have occurred on
the date on which the Repurchase Price in available funds is received by the
Trustee. The Trustee shall amend the Mortgage Loan Schedule to reflect such
repurchase and shall promptly notify the Master Servicer, and the Rating
Agencies of such amendment. Enforcement of the obligation of BSMCC, to purchase
(or substitute a Substitute Mortgage Loan for) any Mortgage Loan or any property
acquired with respect thereto (or pay the Repurchase Price as set forth in the
above proviso) as to which a breach has occurred and is continuing shall
constitute the sole remedy respecting such breach available to the
Certificateholders or the Trustee on their behalf.
Section 2.05. SUBSTITUTION OF MORTGAGE LOANS. Notwithstanding anything
to the contrary in this Agreement, in lieu of purchasing a Mortgage Loan
pursuant to Sections 2.02 or 2.04, BSMCC may, no later than the date by which
such purchase by BSMCC would otherwise be required, tender to the Trustee a
Substitute Mortgage Loan accompanied by an Officer's Certificate of BSMCC that
such Substitute Mortgage Loan conforms to the requirements set forth in the
definition of "Substitute Mortgage Loan"; PROVIDED, HOWEVER, that substitution
pursuant to this Section 2.05 in lieu of purchase shall not be permitted after
the termination of the two-year period beginning on the Startup Day. The Trustee
shall examine the Mortgage File for any Substitute Mortgage Loan in the manner
set forth in Section 2.02(a) and shall notify the Master Servicer in writing,
within five Business Days after receipt, whether or not the documents relating
to the Substitute Mortgage Loan satisfy the requirements of the third sentence
of Subsection 2.02(a). Within two Business Days after such notification, BSMCC
shall provide to the Trustee for deposit in the Certificate Account the amount,
if any, by which the Outstanding Principal Balance as of the next preceding Due
Date of the Mortgage Loan for which substitution is being made, after giving
effect to Scheduled Principal due on such date, exceeds the Outstanding
Principal Balance as of such date of the Substitute Mortgage Loan, after giving
effect to Scheduled Principal due on such date, which amount shall be treated
for
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the purposes of this Agreement as if it were the payment by BSMCC of the
Repurchase Price for the purchase of a Mortgage Loan by BSMCC. After such
notification to BSMCC and, if any such excess exists, upon receipt of such
deposit, the Trustee shall accept such Substitute Mortgage Loan, which shall
thereafter be deemed to be a Mortgage Loan hereunder. In the event of such a
substitution, accrued interest on the Substitute Mortgage Loan for the month in
which the substitution occurs and any Principal Prepayments made thereon during
such month shall be the property of the Trust Fund and accrued interest for such
month on the Mortgage Loan for which the substitution is made and any Principal
Prepayments made thereon during such month shall be the property of BSMCC. The
Scheduled Principal on a Substitute Mortgage Loan due on the Due Date in the
month of substitution shall be the property of BSMCC and the Scheduled Principal
on the Mortgage Loan for which the substitution is made due on such Due Date
shall be the property of the Trust Fund. Upon acceptance of the Substitute
Mortgage Loan, the Trustee shall release to BSMCC the related Mortgage File
related to any Mortgage Loan released pursuant to this Section 2.05 and shall
execute and deliver all instruments of transfer or assignment, without recourse,
in form as provided to it as are necessary to vest in BSMCC title to and rights
under any Mortgage Loan released pursuant to this Section 2.05. BSMCC shall
deliver the documents related to the Substitute Mortgage Loan in accordance with
the provisions of Subsections 2.01(b) and 2.02(b), with the date of acceptance
of the Substitute Mortgage Loan deemed to be the Closing Date for purposes of
the time periods set forth in those Subsections. The representations and
warranties set forth in Exhibit C shall be deemed to have been made by BSMCC
with respect to each Substitute Mortgage Loan as of the date of acceptance of
such Mortgage Loan by the Trustee. The Trustee shall amend the Mortgage Loan
Schedule to reflect such substitution and shall provide a copy of such amended
Mortgage Loan Schedule to the Master Servicer, and the Rating Agencies.
Section 2.06. REPRESENTATIONS AND WARRANTIES OF THE TRUSTEE. The
Trustee hereby represents and warrants to the Seller and the Master Servicer as
of the Closing Date (and in the case of paragraphs (iv) and (v) below throughout
the term of the Agreement), that:
(i) The Trustee is a national bank duly organized, validly
existing and in good standing under the laws of the United States with
a principal place of business in Minneapolis, Minnesota;
(ii) Subject to the right of the Trustee to appoint a
co-trustee or separate trustee under Section 9.11 hereof in order to
meet the legal requirements of a particular jurisdiction, the Trustee
has full power, authority and legal right to execute and deliver this
Agreement and to perform its obligations under this Agreement and has
taken all necessary action to authorize the execution, delivery and
performance by it of this Agreement and the Certificates;
(iii) To the best of the Trustee's knowledge, after reasonable
investigation, the execution and delivery by the Trustee of this
Agreement and the Certificates and the performance by the Trustee of
its obligations under this Agreement and the Certificates will not
violate any provision of the Trustee's Articles of Incorporation or
By-Laws or any law
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or regulation governing the Trustee or any order, writ, judgment or
decree of any court, arbitrator or governmental authority or agency
applicable to the Trustee or any of its assets. To the best of the
Trustee's knowledge, after reasonable investigation, such execution,
delivery and performance will not require the authorization, consent or
approval of, the giving of notice to, the filing or registration with,
or the taking of any other action with respect to, any governmental
authority or agency regulating the fiduciary activities of a national
bank. To the best of the Trustee's knowledge, after reasonable
investigation, such execution, delivery and performance will not
conflict with, or result in a breach or violation of, any material
indenture, mortgage, deed of trust, lease or other agreement or
instrument to which the Trustee is a party or by which it or its
properties is bound;
(iv) This Agreement has been duly executed and delivered by
the Trustee. This Agreement, when executed and delivered by the other
parties hereto, will constitute the valid, legal and binding obligation
of the Trustee, enforceable against the Trustee in accordance with its
terms, except as the enforcement thereof may be limited by applicable
Debtor Relief Laws and that certain equitable remedies may not be
available regardless of whether enforcement is sought in equity or at
law;
(v) All funds received by the Trustee and required to be
deposited in the Certificate Account pursuant to this Agreement will be
promptly so deposited; and
(vi) The Trustee's computer programs, systems and applications
maintained used in connection with its duties as trustee under this
Agreement will be replaced or modified and maintained to operate in
such a manner that on and after January 1, 2000, it can perform its
obligations hereunder in accordance with the terms of this Agreement.
Section 2.07. ISSUANCE OF CERTIFICATES. The Trustee acknowledges the
assignment to it of the Mortgage Loans and the other assets comprising the Trust
Fund and, concurrently therewith, has signed, and countersigned and delivered to
the Seller, in exchange therefor, Certificates in such authorized denominations
representing such Fractional Undivided Interests as the Seller has requested.
The Trustee agrees that it will hold the Mortgage Loans and such other assets as
may from time to time be delivered to it segregated on the books of the Trustee
in trust for the benefit of the Certificateholders.
Section 2.08. REPRESENTATIONS AND WARRANTIES CONCERNING THE SELLER. The
Seller hereby represents and warrants to the Trustee and the Master Servicer as
follows:
(i) the Seller (a) is a corporation duly organized, validly
existing and in good standing under the laws of the State of Delaware
and (b) is qualified and in good standing as a foreign corporation to
do business in each jurisdiction where such qualification is necessary,
except where the failure so to qualify would not reasonably be expected
to have a material adverse effect on the Seller's business as presently
conducted or on the
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Purchaser's ability to enter into this Agreement and to consummate the
transactions contemplated hereby;
(ii) the Seller has full corporate power to own its property,
to carry on its business as presently conducted and to enter into and
perform its obligations under this
Agreement;
(iii) the execution and delivery by the Seller of this
Agreement have been duly authorized by all necessary corporate action
on the part of the Seller; and neither the execution and delivery of
this Agreement, nor the consummation of the transactions herein
contemplated, nor compliance with the provisions hereof, will conflict
with or result in a breach of, or constitute a default under, any of
the provisions of any law, governmental rule, regulation, judgment,
decree or order binding on the Seller or its properties or the articles
of incorporation or by-laws of the Seller, except those conflicts,
breaches or defaults which would not reasonably be expected to have a
material adverse effect on the Seller's ability to enter into this
Agreement and to consummate the transactions contemplated hereby;
(iv) the execution, delivery and performance by the Seller of
this Agreement and the consummation of the transactions contemplated
hereby do not require the consent or approval of, the giving of notice
to, the registration with, or the taking of any other action in respect
of, any state, federal or other governmental authority or agency,
except those consents, approvals, notices, registrations or other
actions as have already been obtained, given or made;
(v) this Agreement has been duly executed and delivered by the
Seller and, assuming due authorization, execution and delivery by the
other parties hereto, constitutes a valid and binding obligation of the
Seller enforceable against it in accordance with its terms (subject to
applicable bankruptcy and insolvency laws and other similar laws
affecting the enforcement of the rights of creditors generally);
(vi) there are no actions, suits or proceedings pending or, to
the knowledge of the Seller, threatened against the Seller, before or
by any court, administrative agency, arbitrator or governmental body
(i) with respect to any of the transactions contemplated by this
Agreement or (ii) with respect to any other matter which in the
judgment of the Seller will be determined adversely to the Seller and
will if determined adversely to the Seller materially and adversely
affect the Seller's ability to enter into this Agreement or perform its
obligations under this Agreement; and the Seller is not in default with
respect to any order of any court, administrative agency, arbitrator or
governmental body so as to materially and adversely affect the
transactions contemplated by this Agreement; and
(vii) immediately prior to the transfer and assignment to the
Trustee, each Mortgage Note and each Mortgage were not subject to an
assignment or pledge, and the Seller had good and marketable title to
and was the sole owner thereof and had full right to transfer and
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sell such Mortgage Loan to the Trustee free and clear of any
encumbrance, equity, lien, pledge, charge, claim or security interest.
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ARTICLE III
Administration and Servicing of Mortgage Loans
Section 3.01. MASTER SERVICER TO ASSURE SERVICING. (a) The Master
Servicer shall supervise, or take such actions as are necessary to ensure, the
servicing and administration of the Mortgage Loans and any related REO Property
in accordance with this Agreement and its normal servicing practices (including
making any Servicing Advances), which generally conform to the standards of an
institution prudently servicing mortgage loans for its own account and shall
have full authority to do anything it reasonably deems appropriate or desirable
in connection with such servicing and administration. The Master Servicer may
perform its responsibilities relating to servicing through other agents or
independent contractors, but shall not thereby be released from any of its
responsibilities as hereinafter set forth. The authority of the Master Servicer,
in its capacity as master servicer, shall include, without limitation, the power
to (i) consult with and advise any Sub-Servicer regarding administration of a
Mortgage Loan, (ii) approve any recommendation by a Sub-Servicer to foreclose on
a Mortgage Loan, (iii) supervise the filing and collection of insurance claims
and take or cause to be taken such actions on behalf of the insured person
thereunder as shall be reasonably necessary to prevent the denial of coverage
thereunder, and (iv) effectuate foreclosure or other conversion of the ownership
of the Mortgaged Property securing a Mortgage Loan, including the employment of
attorneys, the institution of legal proceedings, the collection of deficiency
judgments, the acceptance of compromise proposals, the filing of claims under
any Primary Mortgage Insurance Policy and any other matter pertaining to a
delinquent Mortgage Loan. The authority of the Master Servicer shall include, in
addition, the power on behalf of the Certificateholders, the Trustee or any of
them to (i) execute and deliver customary consents or waivers and other
instruments and documents, (ii) consent to transfers of any related Mortgaged
Property and assumptions of the related Mortgage Notes and Security Instruments
(in the manner provided in this Agreement) and (iii) collect any Insurance
Proceeds and Liquidation Proceeds. Without limiting the generality of the
foregoing, the Master Servicer may, and is hereby authorized, and empowered by
the Trustee to, execute and deliver, on behalf of itself, the
Certificateholders, the Trustee, or any of them, any instruments of
satisfaction, cancellation, partial or full release, discharge and all other
comparable instruments, with respect to the Mortgage Loans, the Insurance
Policies and the accounts related thereto, and the Mortgaged Properties. The
Master Servicer may exercise this power in its own name or in the name of a
Sub-Servicer.
(b) Notwithstanding the provisions of Subsection 3.01(a), the Master
Servicer shall not take any action inconsistent with generally accepted good
servicing procedures and practices and with the interest of the Trustee or the
Certificateholders in the Mortgage Loans or with the rights and interests of the
Trustee or the Certificateholders under this Agreement.
(c) The Trustee shall furnish the Master Servicer with any powers of
attorney and other documents in form as provided to it necessary or appropriate
to enable Master Servicer to service and administer the Mortgage Loans and REO
Property.
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Section 3.02. SUB-SERVICING AGREEMENTS BETWEEN THE MASTER SERVICER AND
Sub-Servicers. (a) The Master Servicer may enter into Sub-Servicing Agreements
with Sub-Servicers for the servicing and administration of the Mortgage Loans
and for the performance of any and all other activities of the Master Servicer
hereunder. Each Sub-Servicer shall be either (i) an institution the accounts of
which are insured by the FDIC or (ii) another entity that engages in the
business of originating or servicing mortgage loans, and in either case shall be
authorized to transact business in the state or states in which the related
Mortgaged Properties it is to service are situated, if and to the extent
required by applicable law to enable the Sub-Servicer to perform its obligations
hereunder and under the Sub-Servicing Agreement, and in either case shall be a
Freddie Mac or Fannie Mae approved mortgage servicer. Any Sub-Servicing
Agreement entered into by the Master Servicer shall include the provision that
such Agreement may be immediately terminated (x) with cause and without any
termination fee by any Master Servicer hereunder other than CMC or (y) without
cause in which case the Master Servicer shall be responsible for any termination
fee or penalty resulting therefrom. In addition, any Sub-Servicing Agreement
shall provide for servicing of the related Mortgage Loans consistent with the
terms of this Agreement. With the consent of the Trustee, which consent shall
not be unreasonably withheld, the Master Servicer and the Sub-Servicers may
enter into Sub-Servicing Agreements and make amendments to the Sub-Servicing
Agreements or enter into different forms of Sub-Servicing Agreements; provided,
however, that any such amendments or different forms shall be consistent with
and not violate the provisions of this Agreement, and that no such amendment or
different form shall be made or entered into which could be reasonably expected
to be materially adverse to the interests of the Certificateholders, without the
consent of the Holders of Certificates entitled to at least 51% of the
Fractional Undivided Interests of all the Certificates in the aggregate.
(b) As part of its servicing activities hereunder, the Master Servicer,
for the benefit of the Trustee and the Certificateholders, shall use its best
reasonable efforts to enforce the obligations of each Sub-Servicer under the
related Sub-Servicing Agreement. Such enforcement, including, without
limitation, the legal prosecution of claims, termination of Sub-Servicing
Agreements and the pursuit of other appropriate remedies, shall be in such form
and carried out to such an extent and at such time as Master Servicer, in its
good faith business judgment, would require were it the owner of the related
Mortgage Loans. The Master Servicer shall pay the costs of such enforcement at
its own expense, but shall be reimbursed therefor only (i) from a general
recovery resulting from such enforcement only to the extent, if any, that such
recovery exceeds all amounts due in respect of the related Mortgage Loans or
(ii) from a specific recovery of costs, expenses or attorneys' fees against the
party against whom such enforcement is directed.
Section 3.03. SUCCESSOR SUB-SERVICERS. The Master Servicer shall be
entitled to terminate any Sub-Servicing Agreement that may exist in accordance
with the terms and conditions of such Sub-Servicing Agreement and without any
limitation by virtue of this Agreement; PROVIDED, HOWEVER, that upon
termination, the Master Servicer shall either act as servicer of the related
Mortgage Loan or enter into an appropriate contract with a successor
Sub-Servicer pursuant to which such successor Sub-Servicer will be bound by all
relevant terms of the related Sub-Servicing Agreement pertaining to the
servicing of such Mortgage Loan.
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Section 3.04. LIABILITY OF THE MASTER SERVICER. (a) Notwithstanding any
Sub-Servicing Agreement, any of the provisions of this Agreement relating to
agreements or arrangements between the Master Servicer and a Sub-Servicer or
reference to actions taken through a Sub-Servicer or otherwise, the Master
Servicer shall under all circumstances remain obligated and primarily liable to
the Trustee and the Certificateholders for the servicing and administering of
the Mortgage Loans and any related REO Property in accordance with this
Agreement. The obligations and liability of the Master Servicer shall not be
diminished by virtue of Sub-Servicing Agreements or by virtue of indemnification
of the Master Servicer by any Sub-Servicer, or any other Person. The obligations
and liability of the Master Servicer shall remain of the same nature and under
the same terms and conditions as if the Master Servicer alone were servicing and
administering the related Mortgage Loans. The Master Servicer shall, however, be
entitled to enter into indemnification agreements with any Sub-Servicer or other
Person and nothing in this Agreement shall be deemed to limit or modify such
indemnification. For the purposes of this Agreement, the Master Servicer shall
be deemed to have received any payment on a Mortgage Loan on the date the
Sub-Servicer received such payment; PROVIDED, HOWEVER, that this sentence shall
not apply to the Trustee acting as the Master Servicer; PROVIDED, FURTHER,
HOWEVER, that the foregoing provision shall not affect the obligation of the
Master Servicer if it is also the Trustee to advance amounts which are not
Nonrecoverable Advances.
(b) Any Sub-Servicing Agreement that may be entered into and any
transactions or services relating to the Mortgage Loans involving a Sub-Servicer
in its capacity as such and not as an originator shall be deemed to be between
the Sub-Servicer and the Master Servicer alone, and the Trustee and
Certificateholders shall not be deemed parties thereto and shall have no claims,
rights, obligations, duties or liabilities with respect to the Sub-Servicer
except as set forth in Section 3.05.
Section 3.05. ASSUMPTION OF SUB-SERVICING AGREEMENTS BY TRUSTEE. (a) If
the Trustee or its designee shall assume the master servicing obligations of the
Master Servicer in accordance with Section 8.02, the Trustee, to the extent
necessary to permit the Trustee to carry out the provisions of Section 8.02 with
respect to the Mortgage Loans, shall succeed to all of the rights and
obligations of the Master Servicer under each of the Sub-Servicing Agreements.
In such event, the Trustee or its designee as the successor master servicer
shall be deemed to have assumed all of the Master Servicer's rights and
obligations therein and to have replaced the Master Servicer as a party to such
Sub-Servicing Agreements to the same extent as if such Sub-Servicing Agreements
had been assigned to the Trustee or its designee as a successor master servicer,
except that the Trustee or its designee as a successor master servicer shall not
be deemed to have assumed any obligations or liabilities of the Master Servicer
arising prior to such assumption and the Master Servicer shall not thereby be
relieved of any liability or obligations under such Sub-Servicing Agreements.
(b) In the event that the Trustee or its designee as successor master
servicer for the Trustee assumes the servicing obligations of the Master
Servicer under Section 8.02, upon the reasonable request of the Trustee or such
designee as successor master servicer, the Master Servicer shall at its own
expense deliver to the Trustee, or at its written request to such designee,
photocopies
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of all documents and records, electronic or otherwise, relating to the
Sub-Servicing Agreements and the related Mortgage Loans or REO Property then
being serviced and an accounting of amounts collected and held by it, if any,
and will otherwise cooperate and use its reasonable best efforts to effect the
orderly and efficient transfer of the Sub-Servicing Agreements, or
responsibilities hereunder to the Trustee, or at its written request to such
designee as successor master servicer.
Section 3.06. COLLECTION OF MORTGAGE LOAN PAYMENTS. (a) The Master
Servicer will make remittances itself or will coordinate and monitor remittances
by Sub-Servicers to the Trustee with respect to the related Mortgage Loans in
accordance with this Agreement.
(b) The Master Servicer shall make its reasonable best efforts to
collect or cause to be collected all payments required under the terms and
provisions of the related Mortgage Loans and shall follow, and use its best
efforts to cause Sub-Servicers to follow, collection procedures comparable to
the collection procedures of prudent mortgage lenders servicing mortgage loans
for their own account to the extent such procedures shall be consistent with
this Agreement. Consistent with the foregoing, the Master Servicer may in its
discretion (i) waive or permit to be waived any late payment charge, prepayment
charge, assumption fee, or any penalty interest in connection with the
prepayment of a related Mortgage Loan and (ii) suspend or temporarily reduce or
permit to be suspended or temporarily reduced regular monthly payments for a
period of up to six months, or arrange or permit an arrangement with a Mortgagor
for a scheduled liquidation of delinquencies. In the event the Master Servicer
shall consent to the deferment of the due dates for payments due on a related
Mortgage Note, the Master Servicer shall nonetheless make a Monthly Advance or
shall cause the related Sub-Servicer to make an advance to the same extent as if
such installment were due, owing and delinquent and had not been deferred
through liquidation of the Mortgaged Property; PROVIDED, HOWEVER, that the
obligation of the Master Servicer to make a Monthly Advance shall apply only to
the extent that the Master Servicer believes, in good faith, that such advances
are not Nonrecoverable Advances.
(c) Notwithstanding anything in this Agreement to the contrary, the
Master Servicer may not make any advances of amounts due in the future with
respect to a Mortgage Loan and the Master Servicer shall not permit (i) any
modification with respect to any Mortgage Loan that would change the Mortgage
Interest Rate, reduce or increase the principal balance (except for reductions
resulting from actual payments of principal) or change the final maturity date
on such Mortgage Loan or (ii) any modification, waiver or amendment of any term
of any Mortgage Loan that would both (A) effect an exchange or reissuance of
such Mortgage Loan under Section 1001 of the Code (or final, temporary or
proposed Treasury regulations promulgated thereunder) and (B) cause any Series
REMIC to fail to qualify as a REMIC under the Code or the imposition of any tax
on "prohibited transactions" or "contributions after the startup date" under the
REMIC Provisions.
Section 3.07. COLLECTION OF TAXES, ASSESSMENTS AND SIMILAR ITEMS;
SERVICING ACCOUNTS. (a) The Master Servicer shall establish and maintain or
cause the Sub-Servicers to establish and maintain, in addition to the Protected
Account, one or more Servicing Accounts. The Master Servicer or a Sub-Servicer
will deposit and retain therein all otherwise unapplied collections from
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the Mortgagors, including amounts collected for the payment of taxes,
assessments, insurance premiums, or comparable items as agent of the Mortgagors.
(b) The deposits in the Servicing Accounts shall be held in a
Designated Depository Institution in an account held in trust by the Master
Servicer or a Sub-Servicer as Trustee of Taxes and Insurance Custodial Account
for borrowers and for CMC (and its successors and assigns) acting on its own
behalf and for CMC, as agent for holders of various pass-through securities and
other interests in mortgage loans sold by it; and agent for various mortgagors,
as their interests may appear or under such other designation as may be
permitted by a Sub-Servicing Agreement. The amount at any time credited to a
Servicing Account must be fully insured by the FDIC, or, to the extent that such
deposits exceed the limits of such insurance, such excess must be (i)
transferred to another fully insured account in another Designated Depository
Institution or (ii) if permitted by applicable law, invested in Permitted
Investments held in trust by the Master Servicer or a Sub-Servicer as described
above and maturing, or be subject to redemption or withdrawal, no later than the
date on which such funds are required to be withdrawn, and in no event later
than 45 days after the date of investment. The Master Servicer may, or may
permit a Sub-Servicer to, establish Servicing Accounts not conforming to the
foregoing requirements to the extent that such Servicing Accounts are Rating
Agency Eligible Accounts. Withdrawals of amounts from the Servicing Accounts may
be made only to effect timely payment of taxes, assessments, insurance premiums,
or comparable items, to transfer previously unapplied collections to a Protected
Account, to reimburse the Master Servicer or a Sub-Servicer for any advances
made with respect to such items, to refund to any Mortgagors any sums as may be
determined to be overages, to pay interest, if required, to Mortgagors on
balances in the Servicing Accounts or to clear and terminate the Servicing
Accounts at or any time after the termination of this Agreement in accordance
with Section 10.01.
Section 3.08. ACCESS TO CERTAIN DOCUMENTATION AND INFORMATION REGARDING
THE MORTGAGE LOANS. The Master Servicer shall provide, and shall cause any
Sub-Servicer to provide, to the Trustee and the Seller access to the records and
documentation regarding the Mortgage Loans and REO Property and the servicing
thereof and to the FDIC, and the supervisory agents and examiners of the FDIC
(to which the Trustee shall also provide) access to the documentation regarding
the Mortgage Loans required by applicable regulations, such access being
afforded without charge but only upon reasonable prior written request and
during normal business hours at the offices of the Master Servicer, the
Sub-Servicers or the Trustee that are designated by these entities; PROVIDED,
HOWEVER, that, unless otherwise required by law, the Trustee, the Master
Servicer or the Sub-Servicer shall not be required to provide access to such
records and documentation if the provision thereof would violate the legal right
to privacy of any Mortgagor PROVIDED, FURTHER, HOWEVER, that the Trustee and the
Seller shall coordinate their requests for such access so as not to impose an
unreasonable burden on, or cause an interruption of, the business of the Master
Servicer or any Sub-Servicer. The Master Servicer, the Sub-Servicers and the
Trustee shall allow representatives of the above entities to photocopy any of
the records and documentation and shall provide equipment for that purpose at a
charge that covers their own actual out-of-pocket costs.
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Section 3.09. MAINTENANCE OF PRIMARY MORTGAGE INSURANCE POLICIES;
COLLECTION THEREUNDER. The Master Servicer shall, or shall cause the related
Sub-Servicer to, in accordance with applicable law, exercise its best reasonable
efforts to maintain and keep in full force and effect each Primary Mortgage
Insurance Policy by a Qualified Insurer, or other insurer satisfactory to the
Rating Agencies, with respect to each related conventional Mortgage Loan as to
which as of the Cut-off Date such a Primary Mortgage Insurance Policy was in
effect (or, in the case of a Substitute Mortgage Loan, the date of substitution)
and the original principal amount of the related Mortgage Note exceeded 80% of
the Original Value in an amount at least equal to the excess of such original
principal amount over 75% of such Original Value until the principal amount of
any such Mortgage Loan is reduced below 80% of the Original Value or, based upon
a new appraisal, the principal amount of such Mortgage Loan represents less than
80% of the new appraised value. The Master Servicer shall, or shall cause the
related Sub-Servicer to, effect the timely payment of the premium on each
Primary Mortgage Insurance Policy. The Master Servicer and the related
Sub-Servicer shall have the power to substitute for any Primary Mortgage
Insurance Policy another substantially equivalent policy issued by another
Qualified Insurer; PROVIDED THAT such substitution is subject to the condition,
to be evidenced by a writing from each Rating Agency, that it would not cause
the ratings on the Certificates to be downgraded or withdrawn.
Section 3.10. MAINTENANCE OF HAZARD INSURANCE AND FIDELITY COVERAGE.
(a) The Master Servicer shall maintain and keep, or cause each Sub-Servicer to
maintain and keep, with respect to each Mortgage Loan and each REO Property, in
full force and effect hazard insurance (fire insurance with extended coverage)
equal to at least the lesser of the Outstanding Principal Balance of the
Mortgage Loan or the current replacement cost of the Mortgaged Property, and
containing a standard mortgagee clause; PROVIDED, HOWEVER, that the amount of
hazard insurance may not be less than the amount necessary to prevent loss due
to the application of any co-insurance provision of the related policy. Unless
applicable state law requires a higher deductible, the deductible on such hazard
insurance policy may be no more than $1000 or 1% of the applicable amount of
coverage, whichever is less. In the case of a condominium unit, the required
hazard insurance shall take the form of a multiperil policy covering the entire
condominium project, in an amount equal to at least 100% of the insurable value
based on replacement cost.
(b) Any amounts collected by the Master Servicer or a
Sub-Servicer under any such hazard insurance policy (other than amounts to be
applied to the restoration or repair of the Mortgaged Property or amounts
released to the Mortgagor in accordance with the Master Servicer's or a
Sub-Servicer's normal servicing procedures, the terms of the Mortgage Note, the
Security Instrument or applicable law) shall be deposited initially in a
Protected Account, for transmittal to the Certificate Account, subject to
withdrawal pursuant to Section 4.03.
(c) Any cost incurred by the Master Servicer or a Sub-Servicer
in maintaining any such hazard insurance policy shall not be added to the amount
owing under the Mortgage Loan for the purpose of calculating monthly
distributions to Certificateholders, notwithstanding that the terms of the
Mortgage Loan so permit. Such costs shall be recoverable by the Master Servicer
or a Sub- Servicer out of related late payments by the Mortgagor or out of
Insurance Proceeds or Liquidation
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Proceeds or by the Master Servicer from the Repurchase Price, to the extent
permitted by Section 4.03.
(d) No earthquake or other additional insurance is to be
required of any Mortgagor or maintained on property acquired with respect to a
Security Instrument other than pursuant to such applicable laws and regulations
as shall at any time be in force and shall require such additional insurance.
The Master Servicer shall cause an ongoing review to be performed of the
Mortgage Loans to determine which, if any, of the Mortgaged Properties are
located in a federally designated special flood hazard area and for each
Mortgaged Property found to be located in a federally designated special flood
hazard area, the Master Servicer shall use its best reasonable efforts to cause
with respect to the Mortgage Loans and each REO Property, flood insurance (to
the extent available and in accordance with mortgage servicing industry
practice) to be maintained. Such flood insurance shall cover the Mortgaged
Property, including all items taken into account in arriving at the Appraised
Value on which the Mortgage Loan was based, and shall be in an amount equal to
the lesser of (i) the Outstanding Principal Balance of the related Mortgage Loan
and (ii) the minimum amount required under the terms of coverage to compensate
for any damage or loss on a replacement cost basis, but not more than the
maximum amount of such insurance available for the related Mortgaged Property
under either the regular or emergency programs of the National Flood Insurance
Program (assuming that the area in which such Mortgaged Property is located is
participating in such program). Unless applicable state law requires a higher
deductible, the deductible on such flood insurance may not exceed $1,000 or 1%
of the applicable amount of coverage, whichever is less.
(e) If insurance has not been maintained complying with
Subsections 3.10(a) and (d) and there shall have been a loss which would have
been covered by such insurance had it been maintained, the Master Servicer shall
pay, or cause the related Sub-Servicer to pay, for any necessary repairs.
(f) The Master Servicer shall present, or cause the related
Sub-Servicer to present, if it is a permitted claimant, claims under the related
hazard insurance or flood insurance policy.
(g) The Master Servicer shall obtain and maintain at its own
expense and for the duration of this Agreement a blanket fidelity bond and an
errors and omissions insurance policy and shall cause each Sub-Servicer to
obtain and maintain an errors and omissions insurance policy covering such
Sub-Servicer's officers, employees and other persons acting on its behalf in
connection with its activities under this Agreement. The amount of coverage
shall be at least equal to the coverage maintained by the Master Servicer
acceptable to Fannie Mae or Freddie Mac to service loans for it or otherwise in
an amount as is commercially available at a cost that is generally not regarded
as excessive by industry standards. The Master Servicer shall promptly notify
the Trustee of any material change in the terms of such bond or policy. The
Master Servicer shall provide annually to the Trustee a certificate of insurance
that such bond and policy are in effect. If any such bond or policy ceases to be
in effect, the Master Servicer shall, to the extent possible, give the Trustee
ten days' notice prior to any such cessation and shall use its best efforts to
obtain a
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comparable replacement bond or policy, as the case may be. Any amounts relating
to the Mortgage Loans collected under such bond or policy shall be remitted to
the Certificate Account to the extent that such amounts have not previously been
paid to such account.
Section 3.11. DUE-ON-SALE CLAUSES; ASSUMPTION AGREEMENTS. (a) In any
case in which the Master Servicer is notified by any Mortgagor or Sub-Servicer
that a Mortgaged Property relating to a Mortgage Loan has been or is about to be
conveyed by the Mortgagor, the Master Servicer shall enforce, or shall instruct
such Sub-Servicer to enforce, any due-on-sale clause contained in the related
Security Instrument to the extent permitted under the terms of the related
Mortgage Note and by applicable law unless the Master Servicer reasonably
believes such enforcement is likely to result in legal action by the Mortgagor.
If the Master Servicer reasonably believes that such due-on-sale clause cannot
be enforced under applicable law or if the related Mortgage Loan does not
contain a due-on-sale clause, the Master Servicer is authorized, and may
authorize any Sub-Servicer, to consent to a conveyance subject to the lien of
the Mortgage, and to take or enter into an assumption 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 related Mortgage Note and unless
prohibited by applicable state law, such Mortgagor remains liable thereon, on
condition, however, that the related Mortgage Loan shall continue to be covered
(if so covered before the Master Servicer or the related Sub-Servicer enters
into such agreement) by any Primary Mortgage Insurance Policy. The Master
Servicer shall notify the Trustee, whenever possible, before the completion of
such assumption agreement, and shall forward to the Trustee the original copy of
such assumption agreement, which copy shall be added by the Trustee to the
related Mortgage File and which 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. In connection with any such assumption agreement,
the interest rate on the related Mortgage Loan shall not be changed and no other
material alterations in the Mortgage Loan shall be made. Any fee or additional
interest collected by the Master Servicer or Sub-Servicer for consenting to any
such conveyance or entering into any such assumption agreement may be retained
by the Master Servicer or the related Sub-Servicer as additional servicing
compensation.
(b) Notwithstanding the foregoing paragraph or any other provision of
this Agreement, the Master Servicer shall not be deemed to be in default, breach
or any other violation of its obligations hereunder by reason of any assumption
of a Mortgage Loan by operation of law or any conveyance by the Mortgagor of the
related Mortgaged Property or assumption of a Mortgage Loan which the Master
Servicer reasonably believes, based on prudent servicing standards, it may be
restricted by law from preventing, for any reason whatsoever or if the exercise
of such right would impair or threaten to impair any recovery under any
applicable Insurance Policy, or, in the Master Servicer's judgment, be
reasonably, likely to result in legal action by the Mortgagor or would otherwise
adversely affect the Certificateholders.
Section 3.12. REALIZATION UPON DEFAULTED MORTGAGE LOANS. (a) The Master
Servicer shall, or shall direct the related Sub-Servicer to, foreclose upon or
otherwise comparably convert the ownership of properties securing any related
Mortgage Loans that come into and continue in default
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and as to which no satisfactory arrangements can be made for collection of
delinquent payments pursuant to Section 3.06 except that the Master Servicer
shall not, and shall not direct the related Sub-Servicer, if any, to, foreclose
upon or otherwise comparably convert a Mortgaged Property if there is evidence
of environmental hazards or toxic waste thereon and the Master Servicer
determines it would be imprudent to do so or not in accordance with appropriate
servicing standards. The Master Servicer can conclusively rely on results of
third party inspections from parties it reasonably believes are qualified to
conduct such inspections. In connection with such foreclosure or other
conversion, the Master Servicer in conjunction with the related Sub-Servicer, if
any, shall use its best reasonable efforts to preserve REO Property and to
realize upon related defaulted Mortgage Loans in such manner as to maximize the
receipt of principal and interest by the Certificateholders, taking into
account, among other things, the timing of foreclosure and the considerations
set forth in Subsection 3.12(b). The foregoing is subject to the proviso that
the Master Servicer shall not be required to expend its own funds in connection
with any foreclosure or towards the restoration of any property unless it
determines in good faith (i) that such restoration or foreclosure will increase
the proceeds of liquidation of the related Mortgage Loan to Certificateholders
after reimbursement to itself for such expenses and (ii) that such expenses will
be recoverable to it either through Liquidation Proceeds (respecting which it
shall have priority for purposes of reimbursements from the Certificate Account
pursuant to Section 4.03) or through Insurance Proceeds (respecting which it
shall have similar priority). The Master 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 (as well as its
normal servicing compensation), and in respect of the Master Servicer only, to
receive Excess Liquidation Proceeds as additional servicing compensation to the
extent that transfers or withdrawals from the Certificate Account with respect
thereto are permitted under Section 4.03. Any income from or other funds (net of
any income taxes) generated by REO Property shall be deemed for purposes of this
Agreement to be Insurance Proceeds.
(b) The Trust Fund shall not acquire any real property (or any personal
property incident to such real property) except in connection with a default or
reasonably foreseeable default of a Mortgage Loan. In the event that the Trust
Fund acquires any real property (or personal property incident to such real
property) in connection with a default or reasonably foreseeable default of a
Mortgage Loan, such property shall be disposed of by the Trust Fund before the
close of the third taxable year following the taxable year in which the Trust
Fund acquired such property (the "grace period") unless the Trustee shall have
received a REMIC Opinion with respect to such longer retention or the Master
Servicer applies for and receives an extension of the grace period under Section
856(e)(3) of the Code, in which case such grace period described above will be
extended by the period set forth in such REMIC Opinion or approved application,
as the case may be. The Trustee shall have no obligation to pay for such REMIC
Opinion.
Section 3.13. TRUSTEE TO COOPERATE; RELEASE OF MORTGAGE FILES. (a) Upon
payment in full of any Mortgage Loan or the receipt by the Master Servicer of a
notification that payment in full will be escrowed in a manner customary for
such purposes, the Master Servicer will immediately notify the Trustee by a
certification signed by a Servicing Officer in the Form of Exhibit D (which
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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 Certificate Account have been or will be so deposited therein)
and shall request delivery to the Master Servicer or a Sub-Servicer, as the case
may be, of the Mortgage File. Upon receipt of such certification and request,
the Trustee shall promptly, but in no event later than five Business Days,
release the related Mortgage File to the Master Servicer or a Sub-Servicer and
execute and deliver to the Master Servicer, without recourse, the request for
reconveyance, deed of reconveyance or release or satisfaction of mortgage or
such instrument releasing the lien of the Security Instrument (furnished by the
Master Servicer), together with the Mortgage Note with written evidence of
cancellation thereon. No expenses incurred in connection with any instrument of
satisfaction or deed of reconveyance shall be chargeable to the Certificate
Account.
(b) From time to time as is appropriate for the servicing or
foreclosure of any Mortgage Loan or collection under a Required Insurance
Policy, the Master Servicer shall deliver to the Trustee a Request for Release
signed by a Servicing Officer on behalf of the Master Servicer in substantially
the form attached as Exhibit D hereto. Upon receipt of the Request for Release,
the Trustee shall deliver the Mortgage File or any document therein to the
Master Servicer or Sub-Servicer, as the case may be.
(c) The Master Servicer shall cause each Mortgage File or any document
therein released pursuant to Subsection 3.13(b) to be returned to the Trustee
when the need therefor no longer exists, unless the related Mortgage Loan has
become a Liquidated Mortgage Loan and the Liquidation Proceeds relating to the
Mortgage Loan have been deposited in the Certificate Account or such Mortgage
File is being used to pursue foreclosure or other legal proceedings. Prior to
return of a Mortgage File or any document to the Trustee, the Master Servicer,
the related Insurer or Sub-Servicer to whom such file or document was delivered
shall retain such file or document in its respective control unless the Mortgage
File or such document has been delivered to an attorney, or to a public trustee
or other public official as required by law, to initiate or pursue legal action
or other proceedings for the foreclosure of the Mortgaged Property either
judicially or non-judicially, and the Master Servicer has delivered to the
Trustee a certificate of a Servicing Officer certifying as to the name and
address of the Person to which such Mortgage File or such document was delivered
and the purpose or purposes of such delivery. If a Mortgage Loan becomes a
Liquidated Mortgage Loan, the Master Servicer shall deliver the Request for
Release with respect thereto to the Trustee upon deposit of the related
Liquidation Proceeds in the Certificate Account.
(d) The Trustee shall execute and deliver to the Master Servicer any
court pleadings, requests for trustee's sale or other documents necessary or
desirable to (i) the foreclosure or trustee's sale with respect to a Mortgaged
Property; (ii) any legal action brought to obtain judgment against any Mortgagor
on the Mortgage Note or Security Instrument; (iii) obtain a deficiency judgment
against the Mortgagor; or (iv) enforce any other rights or remedies provided by
the Mortgage Note or Security Instrument or otherwise available at law or
equity. Together with such documents or pleadings the Master Servicer shall
deliver to the Trustee a certificate of a Servicing Officer in which it requests
the Trustee to execute the pleadings or documents. The certificate shall certify
and
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explain the reasons for which the pleadings or documents are required. It shall
further certify that the Trustee's execution and delivery of the pleadings or
documents will not invalidate any insurance coverage under the Required
Insurance Policies or invalidate or otherwise affect the lien of the Security
Instrument, except for the termination of such a lien upon completion of the
foreclosure or trustee's sale.
Section 3.14. SERVICING AND MASTER SERVICING COMPENSATION. (a) As
compensation for its activities hereunder, the Master Servicer shall be entitled
to receive the Master Servicing Fee from full payments of accrued interest on
each Mortgage Loan, subject to the Master Servicer's obligation to pay
Compensating Interest Payments pursuant to Section 6.07.
(b) The Master Servicer may retain additional servicing compensation in
the form of prepayment charges, if any, assumption fees, tax service fees, fees
for statement of account or payoff, late payment charges, interest on amounts
deposited in any Accounts or Permitted Investments of such amounts, or
otherwise. The Master Servicer is also entitled to receive Excess Liquidation
Proceeds as additional servicing compensation. The Master Servicer shall be
required to pay all expenses it incurs in connection with servicing activities
under this Agreement, including fees and expenses to Sub-Servicers, and shall
not be entitled to reimbursement except as provided in this Agreement. Expenses
to be paid by the Master Servicer under this Subsection 3.14(b) shall include
payment of the expenses of the accountants retained pursuant to Section 3.16.
Section 3.15. ANNUAL STATEMENT OF COMPLIANCE. Within 120 days after
December 31st of each year, commencing in December 1999, the Master Servicer at
its own expense, shall deliver to the Trustee, with a copy to the Rating
Agencies, an Officer's Certificate stating, as to the signer thereof, that (i) a
review of the activities of the Master Servicer during the preceding fiscal year
or applicable portion thereof and of performance under this Agreement has been
made under such officer's supervision, (ii) to the best of such officer's
knowledge, based on such review, the Master Servicer has fulfilled all its
obligations under this Agreement for 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 including the steps being taken
by the Master Servicer to remedy such default; (iii) a review of the activities
of each Sub-Servicer, if any, during the Sub-Servicer's most recently ended
fiscal year on or prior to such December 31st and its performance under its
Sub-Servicing Agreement has been made under such Officer's supervision; and (iv)
to the best of the Servicing Officer's knowledge, based on his review and the
certification of an officer of the Sub-Servicer (unless the Servicing Officer
has reason to believe that reliance on such certification is not justified),
either each Sub-Servicer has performed and fulfilled its duties,
responsibilities and obligations under this Agreement and its Sub-Servicing
Agreement in all material respects throughout the year, or, if there has been a
default in performance or fulfillment of any such duties, responsibilities or
obligations, specifying the nature and status of each such default known to the
Servicing Officer. Copies of such statements shall be provided by the Master
Servicer to the Certificateholders upon request or by the Trustee at the expense
of the Master Servicer should the Master Servicer fail to provide such copies.
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Section 3.16. ANNUAL INDEPENDENT PUBLIC ACCOUNTANTS' SERVICING REPORT.
(a) Within 120 days after December 31st of each year, commencing in December
1999, the Master Servicer, at its expense, shall cause a firm of Independent
public accountants who are members of the American Institute of Certified Public
Accountants to furnish a statement to the Master Servicer, which will be
provided to the Trustee and the Rating Agencies to the effect that, in
connection with the firm's examination of the Master Servicer's overall
servicing activities for such fiscal year conducted in accordance with the
requirements of the Uniform Single Attestation Program for Mortgage Bankers,
nothing came to their attention that indicated that the Master Servicer was not
in compliance with Sections 3.07, 3.15, 4.01, 4.02 and 4.03 except for (i) such
exceptions as such firm believes to be immaterial and (ii) such other exceptions
as are set forth in such statement. In connection with the engagement to deliver
any such report (or other accountants' report or certificate hereunder) the
Trustee is authorized and directed to enter into such agreed-upon-procedures or
engagement letter as such accountants may request and shall be indemnified by
the Trust hereunder in so doing.
(b) Within 120 days after the last day of the fiscal year of each
Sub-Servicer or any Master Servicer other than CMC or the Trustee, commencing in
1999, the Master Servicer, at its expense, shall furnish to the Trustee the most
recently available letter or letters from one or more firms of Independent
certified public accountants who are members of the American Institute of
Certified Public Accountants reporting the results of such firm's examination of
the servicing procedures of any Sub-Servicer and any Master Servicer (other than
CMC or the Trustee) in accordance with the requirements of the Uniform Single
Attestation Program for Mortgage Bankers, or such other program as may be
certified as being comparable by such accountant.
Section 3.17. REMIC-RELATED COVENANTS. For as long as any of the Series
REMICs shall exist, the Master Servicer and the Trustee shall act in accordance
herewith to assure continuing treatment of each of the Series REMICs as REMICs,
and the Trustee shall comply with any directions of the Master Servicer to
assure such continuing treatment. In particular, the Trustee shall not (a) sell
or permit the sale of all or any portion of the Mortgage Loans or of any
Permitted Investment unless such sale is as a result of a repurchase of the
Mortgage Loans pursuant to this Agreement or the Trustee has received a REMIC
Opinion prepared at the expense of the Trust Fund; and (b) other than with
respect to a substitution pursuant to Section 2.05, accept any contribution to
any of the Series REMICs after the Startup Day without receipt of a REMIC
Opinion.
Section 3.18. ADDITIONAL INFORMATION. The Master Servicer agrees to
furnish the Seller, at no expense to the Master Servicer, from time to time upon
reasonable request, such further information, reports and financial statements
as the Seller deems appropriate to prepare and file all
necessary reports with the Securities and Exchange Commission.
Section 3.19. PERIODIC FILINGS WITH THE SECURITIES AND EXCHANGE
COMMISSION; ADDITIONAL INFORMATION. The Trustee agrees to cooperate with the
Seller in connection with the filing by the Seller with the Securities and
Exchange Commission of any and all reports, statements and information
respecting the Trust Fund and/or the Certificates required to be filed with the
Securities and Exchange Commission pursuant to the Securities Exchange Act of
1934, as amended. Fees and
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expenses incurred by the Trustee in connection with this Section shall not be
reimbursable from the Trust Fund.
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ARTICLE IV
Accounts
Section 4.01. PROTECTED ACCOUNTS. (a) The Master Servicer shall
establish and maintain if it is servicing the Mortgage Loans and shall require
each Sub-Servicer to establish and maintain a Protected Account complying with
the requirements set forth in this Section 4.01, with records to be kept with
respect thereto on a Mortgage Loan by Mortgage Loan basis, into which accounts
shall be deposited within 48 hours of receipt all collections of principal and
interest on any Mortgage Loan and with respect to any REO Property received by
the Master Servicer, or a Sub-Servicer, including Principal Prepayments,
Insurance Proceeds, Liquidation Proceeds, and advances made from the
Sub-Servicer's own funds (less servicing compensation as permitted by Subsection
3.14(a)) and all other amounts to be deposited in the related Protected Account.
The Master Servicer is hereby authorized to make withdrawals from and deposits
to the related Protected Account for purposes required or permitted by this
Agreement. All Protected Accounts shall be held in a Designated Depository
Institution and segregated on the books of such institution. The amount at any
time credited to a Protected Account shall be fully insured by the FDIC or, to
the extent that such balance exceeds the lesser of $100,000 or the limits of
such insurance, such excess must be transferred to the Certificate Account or
invested in Permitted Investments or may be deposited in a Rating Agency
Eligible Account in the name of the Trustee for the benefit of
Certificateholders and not commingled with any other funds. The Master Servicer
may, and the Master Servicer may permit a Sub-Servicer to, transfer funds to
other accounts (which shall for purposes hereof be deemed to be Protected
Accounts), commingle accounts, or to establish Protected Accounts not conforming
to the foregoing requirements, to the extent that such other accounts or
Protected Accounts are Rating Agency Eligible Accounts.
Amounts on deposit in a Protected Account may be invested in Permitted
Investments in the name of the Trustee for the benefit of Certificateholders
and, except as provided in the preceding paragraph, not commingled with any
other funds, such Permitted Investments to mature, or to be subject to
redemption or withdrawal, no later than the date on which such funds are
required to be withdrawn for deposit in the Certificate Account, and shall be
held until required for such deposit. The income earned from Permitted
Investments made pursuant to this Section 4.01 shall be paid to the Master
Servicer or the related Sub-Servicer as additional compensation for its
obligations under this Agreement, and the risk of loss of moneys required to be
distributed to the Certificateholders resulting from such investments shall be
borne by and be the risk of the Master Servicer or the related Sub-Servicer. The
Master Servicer shall itself, or shall cause the related Sub-Servicer to,
deposit the amount of any such loss in the related Protected Account within two
Business Days of receipt of notification of such loss but not later than the
second Business Day prior to the Distribution Date on which the moneys so
invested are required to be distributed to the Certificateholders.
(b) On or before each Funds Transfer Date, the Master Servicer shall
withdraw or shall cause to be withdrawn from the Protected Accounts and shall
immediately deposit or cause to be
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deposited in the Certificate Account amounts representing the following
collections and payments (other than with respect to principal of or interest on
the Mortgage Loans due on or before the Cut-off Date):
(i) Scheduled Payments on the Mortgage Loans received or any
related portion thereof advanced by the Master Servicer or
Sub-Servicers which were due on or before the related Due Date, net of
the amount thereof comprising the Master Servicing Fee due the
Master Servicer;
(ii) Full Principal Prepayments and any Liquidation Proceeds
received by the Master Servicer or related Sub-Servicers with respect
to such Mortgage Loans in the related Prepayment Period, with interest
to the date of prepayment or liquidation, net of the amount thereof
comprising the Master Servicing Fee due the Master Servicer;
(iii) Partial prepayments of principal received by the Master
Servicer or related Sub-Servicers for such Mortgage Loans in the
related Prepayment Period; and
(iv) Any amount to be used as a Certificate Account Advance.
(c) Withdrawals may be made from a Protected Account only to make
remittances as provided in Subsections 4.01(b) or 4.03(c); to reimburse the
Master Servicer or a Sub-Servicer for advances of principal and interest which
have been recovered by subsequent collection from the related Mortgagor; to
remove amounts deposited in error; to remove fees, charges or other such amounts
deposited on a temporary basis; or to clear and terminate the account at the
termination of this Agreement in accordance with Section 10.01. As provided in
Section 4.02(b) certain amounts otherwise due to the Master Servicer may be
retained by it and need not be deposited in the Certificate Account.
(d) The Master Servicer shall promptly deliver to the Trustee, upon
request, a statement from the institution at which each Protected Account is
maintained showing deposits and withdrawals during the prior month.
Section 4.02. CERTIFICATE ACCOUNT. (a) The Trustee shall establish and
maintain in the name of the Trustee, for the benefit of the Certificateholders,
the Certificate Account as a segregated non-interest bearing trust account or
accounts. The Trustee will deposit in the Certificate Account, as received, the
following amounts:
(i) Any amounts withdrawn from a Protected Account pursuant to
Subsection 4.01(b);
(ii) Any Monthly Advance and any Compensating Interest
Payments;
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(iii) Any Insurance Proceeds or Liquidation Proceeds received
by the Master Servicer which were not deposited in a Protected Account;
(iv) The Repurchase Price with respect to any Mortgage Loans
purchased by BSMCC pursuant to Sections 2.02 or 2.03, any amounts which
are to be treated pursuant to Section 2.05 as the payment of such a
Repurchase Price, and all proceeds of any Mortgage Loans or property
acquired with respect thereto repurchased by the Seller or its designee
pursuant to Section 10.01; and
(v) Any other amounts received by the Master Servicer or the
Trustee and required to be deposited in the Certificate Account
pursuant to this Agreement.
(b) All amounts deposited to the Certificate Account shall be held by
the Trustee in the name of the Trustee in trust for the benefit of the
Certificateholders in accordance with the terms and provisions of this
Agreement, subject to the right of the Master Servicer to require the Trustee to
make withdrawals therefrom as provided herein. The foregoing requirements for
crediting the Certificate Account shall be exclusive, it being understood and
agreed that, without limiting the generality of the foregoing, payments in the
nature of (i) prepayment or late payment charges or assumption, tax service,
statement account or payoff, substitution, satisfaction, release and other like
fees and charges and (ii) the items enumerated in Subsections 4.03(a)(i), (ii),
(iii), (iv), (vi), (vii), (ix) and (xi) need not be credited by the Master
Servicer or the related Sub-Servicer to the Certificate Account and may be
retained by the Master Servicer or the related Sub-Servicer as servicing
compensation. In the event that the Master Servicer shall deposit or cause to be
deposited to the Certificate Account any amount not required to be credited
thereto, the Trustee, upon receipt of a written request therefor signed by a
Servicing Officer of the Master Servicer, shall promptly transfer such amount to
the Master Servicer, any provision herein to the contrary notwithstanding.
(c) The Certificate Account shall constitute a trust account of the
Trust Fund segregated on the books of the Trustee and held by the Trustee in
trust in its Corporate Trust Office and the Certificate Account and the funds
deposited therein shall not be subject to, and shall be protected from, all
claims, liens, and encumbrances of any creditors or depositors of the Trustee or
the Master Servicer (whether made directly, or indirectly through a liquidator
or receiver of the Trustee or the Master Servicer). The amount at any time
credited to the Certificate Account shall be (i) fully insured by the FDIC to
the maximum coverage provided thereby, (ii) invested, in the name of the
Trustee, or its nominee, for the benefit of the Certificateholders, in Permitted
Investments described in clause (viii) of the definition of Permitted
Investments to be held by the Trustee as the Trustee may select, or (iii) from
the maturity of any Permitted Investment on the Business Day prior to a
Distribution Date through the distribution of such funds on such Distribution
Date or at such other time and in such amount as, in the judgment of the
Trustee, cannot reasonably be invested in accordance with items (i) or (ii) of
this sentence, held by the Trustee uninvested in such Certificate Account. All
Permitted Investments shall mature or be subject to redemption or withdrawal on
or before, and shall be held until, the next succeeding Distribution Date if the
obligor for such Permitted Investment is the Trustee or, if such obligor is any
other Person, the Business Day
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preceding such Distribution Date. The Trustee shall be entitled to all
investment earnings on amounts in the Certificate Account. With respect to the
Certificate Account and the funds deposited therein, the Trustee shall take such
action as may be necessary to ensure that the Certificateholders shall be
entitled to the priorities afforded to such a trust account (in addition to a
claim against the estate of the Trustee) as provided by 12 U.S.C. ss. 92a(e), if
applicable, or any applicable comparable state statute applicable to state
chartered banking corporations.
Section 4.03. PERMITTED WITHDRAWALS AND TRANSFERS FROM THE CERTIFICATE
ACCOUNT. (a) The Trustee will, from time to time on demand of the Master
Servicer, make or cause to be made such withdrawals or transfers from the
Certificate Account as the Master Servicer has designated for such transfer or
withdrawal as specified in a certificate signed by a Servicing Officer (upon
which the Trustee may conclusively rely) for the following purposes (limited in
the case of amounts due the Master Servicer to those not withdrawn from the
Protected Account in accordance with the terms of this Agreement):
(i) to reimburse the Master Servicer or any Sub-Servicer for
any Monthly Advance of its own funds or any advance of such
Sub-Servicer's own funds, the right of the Master Servicer or a
Sub-Servicer to reimbursement pursuant to this subclause (i) being
limited to amounts received on a particular Mortgage Loan (including,
for this purpose, the Repurchase Price therefor, Insurance Proceeds and
Liquidation Proceeds) which represent late payments or recoveries of
the principal of or interest on such Mortgage Loan respecting which
such Monthly Advance or advance was made;
(ii) to reimburse the Master Servicer or any Sub-Servicer from
Insurance Proceeds or Liquidation Proceeds relating to a particular
Mortgage Loan for amounts expended by the Master Servicer or such
Sub-Servicer pursuant to Section 3.12 in good faith in connection with
the restoration of the related Mortgaged Property which was damaged by
an Uninsured Cause or in connection with the liquidation of such
Mortgage Loan;
(iii) to reimburse the Master Servicer or any Sub-Servicer
from Insurance Proceeds relating to a particular Mortgage Loan for
Insured Expenses incurred with respect to such Mortgage Loan and to
reimburse the Master Servicer or such Sub-Servicer from Liquidation
Proceeds from a particular Mortgage Loan for Liquidation Expenses
incurred with respect to such Mortgage Loan; PROVIDED THAT the Master
Servicer shall not be entitled to reimbursement for Liquidation
Expenses with respect to a Mortgage Loan to the extent that (i) any
amounts with respect to such Mortgage Loan were paid as Excess
Liquidation Proceeds pursuant to clause (xi) of this Subsection 4.03(a)
to the Master Servicer; and (ii) such Liquidation Expenses were not
included in the computation of such Excess Liquidation Proceeds;
(iv) to pay the Master Servicer or any Sub-Servicer (payment
to any Sub-Servicer to be subject to prior payment to the Master
Servicer of an amount equal to the Master Servicing Fee), as
appropriate, from Liquidation Proceeds or Insurance Proceeds received
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in connection with the liquidation of any Mortgage Loan, the amount
which it or such Sub-Servicer would have been entitled to receive under
subclause (ix) of this Subsection 4.03(a) as servicing compensation on
account of each defaulted scheduled payment on such Mortgage Loan if
paid in a timely manner by the related Mortgagor, but only to the
extent that the aggregate of Liquidation Proceeds and Insurance
Proceeds with respect to such Mortgage Loan, after any reimbursement to
the Master Servicer or any Sub-Servicer, pursuant to subclauses (i),
(ii), (iii) and (vi) of this Subsection 4.03(a), exceeds the
Outstanding Principal Balance of such Mortgage Loan plus accrued and
unpaid interest thereon at the related Mortgage Interest Rate less the
Master Servicing Fee Rate to but not including the date of payment;
(v) to pay the Master Servicer or any Sub-Servicer (payment to
any Sub-Servicer to be subject to prior payment to the Master Servicer
of the portion of the Master Servicing Fee which the Master Servicer is
entitled to retain as evidenced in writing to the Trustee by the Master
Servicer), as appropriate, from the Repurchase Price for any Mortgage
Loan, the amount which it or such Sub-Servicer would have been entitled
to receive under subclause (ix) of this Subsection 4.03(a) as servicing
compensation, but only to the extent that the Repurchase Price with
respect to such Mortgage Loan after any reimbursement to the Master
Servicer and Sub-Servicer pursuant to subclauses (i) and (vi) of this
Subsection 4.03(a) exceeds the Outstanding Principal Balance of such
Mortgage Loan plus accrued and unpaid interest thereon at the related
Mortgage Interest Rate less the Master Servicing Fee Rate through the
last day of the month of repurchase;
(vi) to reimburse the Master Servicer or any Sub-Servicer for
advances of funds pursuant to Sections 3.07, 3.09 and 3.10, the right
to reimbursement pursuant to this subclause being limited to amounts
received on the related Mortgage Loan (including, for this purpose, the
Repurchase Price therefor, Insurance Proceeds and Liquidation Proceeds)
which represent late recoveries of the payments for which such advances
were made;
(vii) to pay the Master Servicer or any Sub-Servicer, as the
case may be, with respect to each related Mortgage Loan that has been
purchased pursuant to Section 2.02, 2.04, 2.05 or 10.01, all amounts
received thereon, representing recoveries of principal that reduce the
Outstanding Principal Balance of such Mortgage Loan below the
Outstanding Principal Balance used in calculating the Repurchase Price
or representing interest included in the calculation of the Repurchase
Price or accrued after the end of the month during which such
repurchase occurs;
(viii) to reimburse the Master Servicer or any Sub-Servicer
for any Monthly Advance or advance, after a Realized Loss has been
allocated with respect to the related Mortgage Loan if the Monthly
Advance or advance has not been reimbursed pursuant to clauses (i) and
(vi);
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(ix) to pay the Master Servicer and any Sub-Servicer servicing
compensation as set forth in Section 3.14;
(x) to reimburse the Master Servicer for expenses, costs and
liabilities incurred by and reimbursable to it pursuant to Subsection
7.04(d);
(xi) to pay to the Master Servicer, as additional servicing
compensation, any Excess Liquidation Proceeds;
(xii) to clear and terminate the Certificate Account pursuant
to Section 10.01; and
(xiii) to remove amounts deposited in error.
The Master Servicer shall keep and maintain separate accounting, on a
Mortgage Loan by Mortgage Loan basis, for the purpose of accounting for any
reimbursement from the Certificate Account pursuant to subclauses (i) through
(vi), inclusive, and (viii) or with respect to any such amounts which would have
been covered by such subclauses had the amounts not been retained by the Master
Servicer without being deposited in the Certificate Account under Section
4.02(b).
(b) On each Distribution Date, the Trustee shall make the following
payments in the priority set forth from the funds in the Certificate Account:
(i) First, the Trustee's Fees shall be paid to the Trustee;
and
(ii) Second, the amount distributable to the Holders of the
Certificates shall be payable in accordance with Section 6.01.
(c) Notwithstanding the provisions of this Section 4.03, the Master
Servicer may, but is not required to, allow the Sub-Servicers to deduct from
amounts received by them or from the related Protected Account, prior to deposit
in the Certificate Account, any portion to which such Sub-Servicers are entitled
as servicing compensation (including income on Permitted Investments) or
reimbursement of any reimbursable advances made by such Sub-Servicers.
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ARTICLE V
Certificates
Section 5.01. CERTIFICATES. (a) The Depository, the Seller and the
Trustee have entered into a Depository Agreement dated as of December 31, 1998
(the "Depository Agreement"). Except for the Residual Certificates and the
Private Certificates and as provided in Subsection 5.01(b), the Certificates
shall at all times remain registered in the name of the Depository or its
nominee and at all times: (i) registration of such Certificates may not be
transferred by the Trustee except to a successor to the Depository; (ii)
ownership and transfers of registration of such Certificates on the books of the
Depository shall be governed by applicable rules established by the Depository;
(iii) the Depository may collect its usual and customary fees, charges and
expenses from its Depository Participants; (iv) the Trustee shall deal with the
Depository as representative of such Certificate Owners of the respective Class
of Certificates for purposes of exercising the rights of Certificateholders
under this Agreement, and requests and directions for and votes of such
representative shall not be deemed to be inconsistent if they are made with
respect to different Certificate Owners; and (v) the Trustee may rely and shall
be fully protected in relying upon information furnished by the Depository with
respect to its Depository Participants.
The Residual Certificates and the Private Certificates are initially
Physical Certificates. If at any time the Holders of all of the Certificates of
one or more such Classes request that the Trustee cause such Class to become
Global Certificates, the Trustee and the Seller will take such action as may be
reasonably required to cause the Depository to accept such Class or Classes for
trading if it may legally be so traded.
All transfers by Certificate Owners of such respective Classes of
Book-Entry Certificates and any Global Certificates shall be made in accordance
with the procedures established by the Depository Participant or brokerage firm
representing such Certificate Owners. Each Depository Participant shall only
transfer 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.
(b) 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 Trustee or the Seller is unable to
locate a qualified successor within 30 days 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 request that the Depository notify all
Certificate Owners of the occurrence of any such event and of the availability
of definitive, fully registered Certificates to Certificate Owners requesting
the same. Upon surrender to the Trustee of the Certificates by the Depository,
accompanied by registration instructions from the Depository for registration,
the Trustee shall issue the definitive Certificates. Neither the Seller, the
Master Servicer nor the Trustee shall be liable for any delay in delivery of
such instructions and may conclusively rely on, and shall be protected in
relying on, such instructions.
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(c) (i) REMIC I will be evidenced by (x) the REMIC I Regular
Certificates, described below, which will be uncertificated and non-transferable
and are hereby designated as the "regular interests" in REMIC I and (y) the
Class R-I Certificate, which is hereby designated as the single "residual
interest" in REMIC I. Except as discussed below, principal and interest shall be
payable to, and shortfalls, losses and prepayments are allocable to, the REMIC I
Regular Certificates in the same order and priority as payments are to be made
on, and shortfalls, losses and prepayments are allocable to, the Corresponding
Classes of Certificates. The REMIC I Regular Certificates and the Class R-I
Certificate will have the following designations and pass-through rates, and
distributions of principal and interest thereon shall be allocated to the
Corresponding Class of Certificates in the following manner:
<TABLE>
<CAPTION>
REMIC I Corresponding Classes or Pass-Through
Certificates Components Of Certificates Initial Balance Rate
------------ -------------------------- --------------- ----
<S> <C> <C> <C>
P A-1 and A-4 (1) $118,757,000.00 6.750%
Q A-2 (1) $20,107,000.00 6.750%
R A-3 (1) $55,214,000.00 6.750%
S Class A-5-II Component $48,337,500.00 6.750%
T Class A-6-II Component $1,933,500.00 6.750%
U Class A-5-III and A-6-III $3,599,252.00 0.000%
Components
V A-7 and A-8 $15,012,000.00 6.750%
W A-9 $4,396,800.00 6.750%
X X and Class A-5-IV and $ 0.00 (2)
A-6-IV Components
Y Subordinate Certificates $11,139,887.69 6.750%
Z R-II $50.00 6.750%
R-I - $50.00 6.750%
</TABLE>
- ----------------
(1) Of the interest accrued on the Class P REMIC I Certificate, the Class Q
REMIC I Certificate and the Class R REMIC I Certificate, an amount
equal to the Class A-5-I Component Strip will be paid to the Class
A-5-I Component and an amount equal to the Class A-6-I Component Strip
will be paid to the Class A-6-I Component.
(2) The Class X REMIC I Certificates will bear interest in an amount equal
to the sum of the Accrued Certificate Interest on the Class A-5-IV
Component, the Class A-6-IV Component and the Class X Certificate.
(d) The Classes of the Certificates (other than the Class R-I
Certificates) and the Components of the Component Certificates shall have the
following designations, initial principal amounts and Pass-Through Rates:
<TABLE>
<CAPTION>
Designation Initial Principal Amount Pass-through Rate
----------- ------------------------ -----------------
<S> <C> <C>
Class A-1 Certificates $ 11,195,000.00 6.000%
Class A-2 Certificates $ 20,107,000.00 6.050%
Class A-3 Certificates $ 55,214,000.00 6.200%
Class A-4 Certificates $ 107,562,000.00 6.000%
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Class A-5-I Component $ 0 (1)
Class A-5-II Component $ 48,337,500.00 6.750%
Class A-5-III Component $ 3,460,820.00 0.000%
Class A-5-IV Component $ 0 (1)
Class A-6-I Component $ 0 (1)
Class A-6-II Component $ 1,933,500.00 6.750%
Class A-6-III Component $ 138,432.00 0.000%
Class A-6-IV Component $ 0 (1)
Class A-7 Certificates $ 11,259,000.00 (1)
Class A-8 Certificates $ 3,753,000.00 (1)
Class A-9 Certificates $ 4,396,800.00 6.750%
Class X Certificates $ 0 (1)
Class B-1 Certificates $ 5,291,400.00 6.750%
Class B-2 Certificates $ 2,645,700.00 6.750%
Class B-3 Certificates $ 1,114,000.00 6.750%
Class B-4 Certificates $ 835,500.00 6.750%
Class B-5 Certificates $ 557,000.00 6.750%
Class B-6 Certificates $ 696,287.69 6.750%
Class R-II Certificates $ 50.00 6.750%
</TABLE>
------------------
(1) See the definition of Accrued Certificate Interest.
(e) With respect to each Distribution Date, each Class of Certificates
(other than the PO Components) shall accrue interest during the related Interest
Accrual Period. With respect to each Distribution Date and each such Class of
Certificates, interest shall be calculated, on the basis of a 360-day year
comprised of twelve 30-day months, as described under Accrued Certificate
Interest. Interest will accrue on the Accrual Certificates but will not be paid
as interest to such Class or Component prior to the Cross-Over Date. The Accrual
Distribution Amounts will be distributed as principal as provided in Section
6.01(a)(i).
(f) The Certificates shall be substantially in the forms set forth in
Exhibit A-1, A-2, A-3 and A-4. On original issuance, the Trustee shall sign,
countersign and shall deliver them at the direction of the Seller. Pending the
preparation of definitive Certificates of any Class, the Trustee may sign and
countersign temporary Certificates that are printed, lithographed or
typewritten, in authorized denominations for Certificates of such Class,
substantially of the tenor of the definitive Certificates in lieu of which they
are issued and with such appropriate insertions, omissions, substitutions and
other variations as the officers or authorized signatories executing such
Certificates may determine, as evidenced by their execution of such
Certificates. If temporary Certificates are issued, the Seller will cause
definitive Certificates to be prepared without unreasonable delay. After the
preparation of definitive Certificates, the temporary Certificates shall be
exchangeable for definitive Certificates upon surrender of the temporary
Certificates at the office of the Trustee, without charge to the Holder. Upon
surrender for cancellation of any one or more temporary Certificates, the
Trustee shall sign and countersign and deliver in exchange therefor a like
aggregate principal amount, in authorized denominations for such Class, of
definitive Certificates of the same Class. Until so exchanged, such temporary
Certificates shall in all respects be entitled to the same benefits as
definitive Certificates.
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(g) Each Class of Book-Entry Certificates will be registered as a
single Certificate of such Class held by a nominee of the Depository or the DTC
Custodian, and beneficial interests will be held by investors through the
book-entry facilities of the Depository in minimum denominations of (i) in the
case of the Senior Certificates which are Book-Entry Certificates, $1,000 and in
each case increments of $1.00 in excess thereof, and (ii) in the case of the
Offered Subordinate Certificates, $25,000 and increments of $1.00 in excess
thereof, except that one Certificate of each such Class may be issued in a
different amount so that the sum of the denominations of all outstanding
Certificates of such Class shall equal the Current Principal Amount or Notional
Amount of such Class on the Closing Date. On the Closing Date, the Trustee shall
execute and countersign Physical Certificates all in an aggregate principal
amount that shall equal the Current Principal Amount of such Class on the
Closing Date. The Class X Certificates will be issued in certificated
fully-registered form in minimum denominations of $1,000 and in each case
increments of $1.00 in excess thereof, except that one Certificate of each such
Class may be issued in a different amount so that the sum of the denominations
of each such Class shall equal the Current Principal Amount or Notional Amount
of such Class on the Closing Date. The Private Certificates will be issued in
certificated fully-registered form in minimum denominations of $50,000 and
increments of $1.00 in excess thereof, except that one Certificate of each such
Class may be issued in a different amount so that the sum of the denominations
of all outstanding Certificates of such Class shall equal the Current Principal
Amount of such Class on the Closing Date. Each Class of Residual Certificates
shall be issued in certificated fully-registered form in the denomination of $50
each with respect to the Class R-I and Class R-II Certificates. Each Class of
Global Certificates, if any, shall be issued in fully registered form in minimum
dollar denominations of $50,000 and integral multiples of $1.00 in excess
thereof, except that one Certificate of each Class may be in a different
denomination so that the sum of the denominations of all outstanding
Certificates of such Class shall equal the Current Principal Amount of such
Class on the Closing Date. On the Closing Date, the Trustee shall execute and
countersign (i) in the case of each Class of Offered Certificates (other than
the Class X Certificates), the Certificate in the entire Current Principal
Amount or Notional Amount of the respective Class and (ii) in the case of the
Class X Certificates and each Class of Private Certificates, all in an aggregate
principal amount that shall equal the Current Principal Amount of each such
respective Class on the Closing Date. The Certificates referred to in clause (i)
and if at any time there are to be Global Certificates, the Global Certificates
shall be delivered by the Seller to the Depository or pursuant to the
Depository's instructions, shall be delivered by the Seller on behalf of the
Depository to and deposited with the DTC Custodian. The Trustee shall sign the
Certificates by facsimile or manual signature and countersign them by manual
signature on behalf of the Trustee by one or more authorized signatories, each
of whom shall be a Responsible Officer of the Trustee or its agent. A
Certificate bearing the manual and facsimile signatures of individuals who were
the authorized signatories of the Trustee or its agent at the time of issuance
shall bind the Trustee, notwithstanding that such individuals or any of them
have ceased to hold such positions prior to the delivery of such Certificate.
(h) No Certificate shall be entitled to any benefit under this
Agreement, or be valid for any purpose, unless there appears on such Certificate
the manually executed countersignature of the
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Trustee or its agent, and such countersignature upon any Certificate shall be
conclusive evidence, and the only evidence, that such Certificate has been duly
executed and delivered hereunder. All Certificates issued on the Closing Date
shall be dated the Closing Date. All Certificates issued thereafter shall be
dated the date of their countersignature.
(i) The Closing Date is hereby designated as the "startup" day of each
Series REMIC within the meaning of Section 860G(a)(9) of the Code.
(j) For federal income tax purposes, each Series REMIC shall have a tax
year that is a calendar year and shall report income on an accrual basis.
(k) The Trustee on behalf of the Trust shall cause each Series REMIC to
elect to be treated as a REMIC under Section 860D of the Code. Any
inconsistencies or ambiguities in this Agreement or in the administration of any
Trust established hereby shall be resolved in a manner that preserves the
validity of such elections.
(l) The Assumed Final Distribution Date for distributions on the
Certificates is February 25, 2029; the latest possible maturity date of the
REMIC I Regular Certificates is February 25, 2029.
Section 5.02. REGISTRATION OF TRANSFER AND EXCHANGE OF CERTIFICATES.
(a) The Trustee shall maintain at its Corporate Trust Office 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) Subject to Subsection 5.01(a) and, in the case of any Global
Certificate or Physical Certificate upon the satisfaction of the conditions set
forth below, upon surrender for registration of transfer of any Certificate at
any office or agency of the Trustee maintained for such purpose, the Trustee
shall sign, countersign and shall deliver, in the name of the designated
transferee or transferees, a new Certificate of a like Class and aggregate
Fractional Undivided Interest, but bearing a different number.
(c) By acceptance of an Individual Certificate, whether upon original
issuance or subsequent transfer, each holder of such a Certificate acknowledges
the restrictions on the transfer of such Certificate set forth in the Securities
Legend and agrees that it will transfer such a Certificate only as provided
herein. In addition to the provisions of Subsection 5.02(h), the following
restrictions shall apply with respect to the transfer and registration of
transfer of an Individual Certificate to a transferee that takes delivery in the
form of an Individual Certificate:
(i) The Trustee shall register the transfer of an Individual
Certificate if the requested transfer is being made to a transferee who
has provided the Trustee with a Rule 144A Certificate or comparable
evidence as to its QIB status.
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(ii) The Trustee shall register the transfer of any Individual
Certificate if (x) the transferor has advised the Trustee in writing
that the Certificate is being transferred to an Institutional
Accredited Investor; and (y) prior to the transfer the transferee
furnishes to the Trustee an Investment Letter (and the Trustee shall be
fully protected in so doing), provided that, if based upon an Opinion
of Counsel to the effect that the delivery of (x) and (y) above are not
sufficient to confirm that the proposed transfer is being made pursuant
to an exemption from, or in a transaction not subject to, the
registration requirements of the Securities Act and other applicable
laws, the Trustee shall as a condition of the registration of any such
transfer require the transferor to furnish such other certifications,
legal opinions or other information prior to registering the transfer
of an Individual Certificate as shall be set forth in such Opinion of
Counsel.
(d) Subject to Subsection 5.02(h), so long as a Global Certificate of
such Class is outstanding and is held by or on behalf of the Depository,
transfers of beneficial interests in such Global Certificate, or transfers by
holders of Individual Certificates of such Class to transferees that take
delivery in the form of beneficial interests in the Global Certificate, may be
made only in accordance with this Subsection 5.02(d) and in accordance with the
rules of the Depository:
(i) In the case of a beneficial interest in the Global
Certificate being transferred to an Institutional Accredited Investor,
such transferee shall be required to take delivery in the form of an
Individual Certificate or Certificates and the Trustee shall register
such transfer only upon compliance with the provisions of Subsection
5.02(c)(ii).
(ii) In the case of a beneficial interest in a Class of Global
Certificates being transferred to a transferee that takes delivery in
the form of an Individual Certificate or Certificates of such Class,
except as set forth in clause (i) above, the Trustee shall register
such transfer only upon compliance with the provisions of Subsection
5.02(c)(i).
(iii) In the case of an Individual Certificate of a Class
being transferred to a transferee that takes delivery in the form of a
beneficial interest in a Global Certificate of such Class, the Trustee
shall register such transfer if the transferee has provided the Trustee
with a Rule 144A Certificate or comparable evidence as to its QIB
status.
(iv) No restrictions shall apply with respect to the transfer
or registration of transfer of a beneficial interest in the Global
Certificate of a Class to a transferee that takes delivery in the form
of a beneficial interest in the Global Certificate of such Class;
provided that each such transferee shall be deemed to have made such
representations and warranties contained in the Rule 144A Certificate
as are sufficient to establish that it is a QIB.
(e) Subject to Subsection 5.02(h), an exchange of a beneficial interest
in a Global Certificate of a Class for an Individual Certificate or Certificates
of such Class, an exchange of an Individual Certificate or Certificates of a
Class for a beneficial interest in the Global Certificate of such Class and an
exchange of an Individual Certificate or Certificates of a Class for another
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Individual Certificate or Certificates of such Class (in each case, whether or
not such exchange is made in anticipation of subsequent transfer, and, in the
case of the Global Certificate of such Class, so long as such Certificate is
outstanding and is held by or on behalf of the Depository) may be made only in
accordance with this Subsection 5.02(e) and in accordance with the rules of the
Depository:
(i) A holder of a beneficial interest in a Global Certificate
of a Class may at any time exchange such beneficial interest for an
Individual Certificate or Certificates of such Class.
(ii) A holder of an Individual Certificate or Certificates of
a Class may exchange such Certificate or Certificates for a beneficial
interest in the Global Certificate of such Class if such holder
furnishes to the Trustee a Rule 144A Certificate or comparable evidence
as to its QIB status.
(iii) A holder of an Individual Certificate of a Class may
exchange such Certificate for an equal aggregate principal amount of
Individual Certificates of such Class in different authorized
denominations without any certification.
(f) (i) Upon acceptance for exchange or transfer of an Individual
Certificate of a Class for a beneficial interest in a Global Certificate of such
Class as provided herein, the Trustee shall cancel such Individual Certificate
and shall (or shall request the Depository to) endorse on the schedule affixed
to the applicable Global Certificate (or on a continuation of such schedule
affixed to the Global Certificate and made a part thereof) or otherwise make in
its books and records an appropriate notation evidencing the date of such
exchange or transfer and an increase in the certificate balance of the Global
Certificate equal to the certificate balance of such Individual Certificate
exchanged or transferred therefor.
(ii) Upon acceptance for exchange or transfer of a beneficial
interest in a Global Certificate of a Class for an Individual
Certificate of such Class as provided herein, the Trustee
shall (or shall request the Depository to) endorse on the
schedule affixed to such Global Certificate (or on a
continuation of such schedule affixed to such Global
Certificate and made a part thereof) or otherwise make in its
books and records an appropriate notation evidencing the date
of such exchange or transfer and a decrease in the certificate
balance of such Global Certificate equal to the certificate
balance of such Individual Certificate issued in exchange
therefor or upon transfer thereof.
(g) The Securities Legend shall be placed on any Individual Certificate
issued in exchange for or upon transfer of another Individual Certificate or of
a beneficial interest in a Global Certificate.
(h) Subject to the restrictions on transfer and exchange set forth in
this Section 5.02, the holder of any Individual Certificate may transfer or
exchange the same in whole or in part (in an initial certificate balance equal
to the minimum authorized denomination set forth in Section 5.01(h)
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above or any integral multiple of $1.00 in excess thereof) by surrendering such
Certificate at the Corporate Trust Office, or at the office of any transfer
agent, together with an executed instrument of assignment and transfer
satisfactory in form and substance to the Trustee in the case of transfer and a
written request for exchange in the case of exchange. The holder of a beneficial
interest in a Global Certificate may, subject to the rules and procedures of the
Depository, cause the Depository (or its nominee) to notify the Trustee in
writing of a request for transfer or exchange of such beneficial interest for an
Individual Certificate or Certificates. Following a proper request for transfer
or exchange, the Trustee shall, within five Business Days of such request made
at such Corporate Trust Office, sign, countersign and deliver at such Corporate
Trust Office, to the transferee (in the case of transfer) or holder (in the case
of exchange) or send by first class mail at the risk of the transferee (in the
case of transfer) or holder (in the case of exchange) to such address as the
transferee or holder, as applicable, may request, an Individual Certificate or
Certificates, as the case may require, for a like aggregate Fractional Undivided
Interest and in such authorized denomination or denominations as may be
requested. The presentation for transfer or exchange of any Individual
Certificate shall not be valid unless made at the Corporate Trust Office by the
registered holder in person, or by a duly authorized attorney-in-fact.
(i) At the option of the Certificateholders, Certificates may be
exchanged for other Certificates of authorized denominations of a like Class and
aggregate Fractional Undivided Interest, upon surrender of the Certificates to
be exchanged at any such office or agency; PROVIDED, HOWEVER, that no
Certificate may be exchanged for new Certificates unless the original Fractional
Undivided Interest represented by each such new Certificate (i) is at least
equal to the minimum authorized denomination or (ii) is acceptable to the Seller
as indicated to the Trustee in writing. Whenever any Certificates are so
surrendered for exchange, the Trustee shall sign and countersign and the Trustee
shall deliver the Certificates which the Certificateholder making the exchange
is entitled to receive.
(j) If the Trustee so requires, every Certificate presented or
surrendered for transfer or exchange shall be duly endorsed by, or be
accompanied by a written instrument of transfer, with a signature guarantee, in
form satisfactory to the Trustee, duly executed by the holder thereof or his or
her attorney duly authorized in writing.
(k) No service charge shall be made 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.
(l) The Trustee shall cancel all Certificates surrendered for transfer
or exchange but shall retain such Certificates in accordance with its standard
retention policy or for such further time as is required by the record retention
requirements of the Securities Exchange Act of 1934, as amended, and thereafter
may destroy such Certificates.
(m) The following legend shall be placed on the Class A-6 Certificates
and each Class of Subordinate Certificates, whether upon original issuance or
upon issuance of any other Certificate of any such Class in exchange therefor or
upon transfer thereof:
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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, PTE 91-38, PTE 90-1, PTE 95-60 OR
PTE 96-23 AND (II) WILL NOT GIVE RISE TO ANY ADDITIONAL FIDUCIARY
DUTIES ON THE PART OF THE MASTER SERVICER OR THE TRUSTEE, WHICH WILL BE
DEEMED REPRESENTED BY AN OWNER OF A BOOK-ENTRY CERTIFICATE OR A GLOBAL
CERTIFICATE AND WILL BE EVIDENCED BY A REPRESENTATION TO SUCH EFFECT BY
OR ON BEHALF OF A HOLDER OF ANY CLASS [A-6][B-4][B-5][B-6] CERTIFICATE.
Section 5.03. MUTILATED, DESTROYED, LOST OR STOLEN CERTIFICATES. (a) If
(i) any mutilated Certificate is surrendered to the Trustee, or 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 it may require to save it harmless, and (iii) the Trustee has not
received notice that such Certificate has been acquired by a third Person, the
Trustee shall sign, countersign and deliver, in exchange for or in lieu of any
such mutilated, destroyed, lost or stolen Certificate, a new Certificate of like
tenor and Fractional Undivided Interest but in each case bearing a different
number. The mutilated, destroyed, lost or stolen Certificate shall thereupon be
canceled of record by the Trustee and shall be of no further effect and evidence
no rights.
(b) Upon the issuance of any new Certificate under this Section 5.03,
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 duplicate Certificate issued pursuant to this Section 5.03 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. Prior to due presentation of a
Certificate for registration of transfer, the Seller, the Master Servicer, the
Trustee and any agent of the Seller, the Master Servicer or the Trustee 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
6.01 and for all other purposes whatsoever. Neither the Seller, the Master
Servicer, the Trustee nor any agent of the Seller, the Master Servicer or the
Trustee shall be affected by notice to the contrary. No
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Certificate shall be deemed duly presented for a transfer effective on any
Record Date unless the Certificate to be transferred is presented no later than
the close of business on the third Business Day preceding such Record Date.
Section 5.05. TRANSFER RESTRICTIONS ON RESIDUAL CERTIFICATES. (a)
Residual Certificates, or interests therein, may not be transferred without the
prior express written consent of the Tax Matters Person and the Seller. As a
prerequisite to such consent, the proposed transferee must provide the Tax
Matters Person, the Seller and the Trustee with an affidavit that the proposed
transferee is not a Disqualified Organization (as defined in Subsection 5.05(b))
(and, unless the Tax Matters Person and the Seller consent to the transfer to a
person who is not a U.S. Person, an affidavit that it is a U.S. Person) as
provided in Subsection 5.05(b).
(b) No transfer, sale or other disposition of a Residual Certificate
(including a beneficial interest therein) may be made unless, prior to the
transfer, sale or other disposition of a Residual Certificate, the proposed
transferee (including the initial purchasers thereof) delivers to the Tax
Matters Person, the Trustee and the Seller an affidavit in the form attached
hereto as Exhibit E stating, among other things, that as of the date of such
transfer (i) such transferee is a Permitted Transferee and that (ii) such
transferee is not acquiring such Residual Certificate for the account of any
person who is not a Permitted Transferee. The Tax Matters Person shall not
consent to a transfer of a Residual Certificate if it has actual knowledge that
any statement made in the affidavit issued pursuant to the preceding sentence is
not true. Notwithstanding any transfer, sale or other disposition of a Residual
Certificate to any Person who is not a Permitted Transferee, such transfer, sale
or other disposition shall be deemed to be of no legal force or effect
whatsoever and such Person shall not be deemed to be a Holder of a Residual
Certificate for any purpose hereunder, including, but not limited to, the
receipt of distributions thereon. If any purported transfer shall be in
violation of the provisions of this Subsection 5.05(b), then the prior Holder
thereof shall, upon discovery that the transfer of such Residual Certificate was
not in fact permitted by this Subsection 5.05(b), be restored to all rights as a
Holder thereof retroactive to the date of the purported transfer. None of the
Trustee, the Tax Matters Person or the Seller shall be under any liability to
any Person for any registration or transfer of a Residual Certificate that is
not permitted by this Subsection 5.05(b) or for making payments due on such
Residual Certificate to the purported Holder thereof or taking any other action
with respect to such purported Holder under the provisions of this Agreement so
long as the written affidavit referred to above was received with respect to
such transfer, and the Tax Matters Person, the Trustee and the Seller, as
applicable, had no knowledge that it was untrue. The prior Holder shall be
entitled to recover from any purported Holder of a Residual Certificate that was
in fact not a permitted transferee under this Subsection 5.05(b) at the time it
became a Holder all payments made on such Residual Certificate. Each Holder of a
Residual Certificate, by acceptance thereof, shall be deemed for all purposes to
have consented to the provisions of this Subsection 5.05(b) and to any amendment
of this Agreement deemed necessary (whether as a result of new legislation or
otherwise) by counsel of the Tax Matters Person or the Seller to ensure that the
Residual Certificates are not transferred to any Person who is not a Permitted
Transferee and that any transfer of such Residual Certificates will not cause
the imposition of a tax upon the Trust or cause any Series REMIC to fail to
qualify as a REMIC.
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(c) Unless the Tax Matters Person shall have consented in writing
(which consent may be withheld in the Tax Matters Person's sole discretion), the
Residual Certificates (including a beneficial interest therein) may not be
purchased by or transferred to any person who is not a United States Person.
(d) By accepting a Residual Certificate, the purchaser thereof agrees
to be a Tax Matters Person, and appoints the Trustee to act as its agent with
respect to all matters concerning the tax obligations of the Trust, other than
those matters regarding transfer restrictions contained in this Section 5.05.
Section 5.06. RESTRICTIONS ON TRANSFERABILITY OF PRIVATE CERTIFICATES.
(a) No offer, sale, transfer or other disposition (including pledge) of a
Private Certificate shall be made by any Holder thereof unless registered under
the Securities Act, or an exemption from the registration requirements of the
Securities Act and any applicable state securities or "Blue Sky" laws is
available and the prospective transferee (other than the Seller) of such
Certificate signs and delivers to the Trustee an Investment Letter, if the
transferee is an Institutional Accredited Investor, in the form set forth as
Exhibit F-1 hereto, or a Rule 144A Certificate, if the transferee is a QIB, in
the form set forth as Exhibit F-2 hereto. Notwithstanding the provisions of the
immediately preceding sentence, no restrictions shall apply with respect to the
transfer or registration of transfer of a beneficial interest in a Physical
Certificate that is a Global Certificate of a Class to a transferee that takes
delivery in the form of a beneficial interest in the Global Certificate of such
Class provided that each such transferee shall be deemed to have made such
representations and warranties contained in the Rule 144A Certificate as are
sufficient to establish that it is a QIB. In the case of a proposed transfer of
a Private Certificate to a transferee other than a QIB, the Trustee may require
an Opinion of Counsel that such transaction is exempt from the registration
requirements of the Securities Act. The cost of such opinion shall not be an
expense of the Trustee or the Trust Fund.
(b) Each Class of Private Certificates shall bear a Securities Legend.
Section 5.07. ERISA RESTRICTIONS. (a) Subject to the provisions of
subsection (b), no Class of Class A-6, Subordinate or Residual Certificates 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 either (i) the
Trustee and the Master Servicer with an Opinion of Counsel satisfactory to the
Trustee and the Master Servicer, which opinion will not be at the expense of the
Trustee or the Master Servicer, that the purchase of such Certificates by or on
behalf of such Plan is permissible under applicable law, will not constitute or
result in a non-exempt prohibited transaction under ERISA or Section 4975 of the
Code and will not subject the Trustee or the Master Servicer to any obligation
in addition to those undertaken in the Pooling and Servicing Agreement or (ii) a
representation or certification to the Trustee (upon which the Trustee is
authorized to rely) to the effect that the proposed transfer and/or holding of
such a Certificate and the servicing, management and operation of the Trust: (I)
will not result in a prohibited transaction under Section 406 of ERISA or
Section 4975 of the Code which
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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), and PTCE 96-23 (Class Exemption
for Plan Asset Transactions Determined by In-House Asset Managers and (II) will
not subject the Master Servicer or the Trustee to any obligation in addition to
those undertaken in the Agreement.
(b) Any Person acquiring an interest in a Book-Entry Certificate or a
Global Certificate which is a Subordinate Certificate or Class A-6 Certificate,
by acquisition of such Certificate, shall be deemed to have represented to the
Trustee that either: (i) it is 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 (ii) the transfer and/or holding of an interest in such
Certificate to that Person and the subsequent 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, PTE 84-14, PTE 91-38, PTE
90-1, PTE 95-60 or PTE 96-23 and (II) will not subject the Master Servicer or
the Trustee to any obligation in addition to those undertaken in the Agreement.
(c) Any attempted or purported transfer of any Certificate in violation
of the provisions of Subsections (a) or (b) above shall be void AB INITIO and
such Certificate shall be considered to have been held continuously by the prior
permitted Certificateholder. Any transferor of any Certificate in violation of
such provisions, shall indemnify and hold harmless the Trustee from and against
any and all liabilities, claims, costs or expenses incurred by the Trustee as a
result of such attempted or purported transfer.
Section 5.08. RULE 144A INFORMATION. For so long as any Private
Certificates are outstanding and are "restricted securities" within the meaning
of Rule 144(a)(3) of the Securities Act, (1) the Seller will provide or cause to
be provided to any holder of such Certificates and any prospective purchaser
thereof designated by such a holder, upon the request of such holder or
prospective purchaser, the information required to be provided to such holder or
prospective purchaser by Rule 144A(d)(4) under the Securities Act; and (2) the
Seller shall update such information from time to time in order to prevent such
information from becoming false and misleading and will take such other actions
as are necessary to ensure that the safe harbor exemption from the registration
requirements of the Securities Act under Rule 144A is and will be available for
resales of such Certificates conducted in accordance with Rule 144A. The Master
Servicer shall cooperate with the Seller and furnish the Seller such information
in the Master Servicer's possession as the Seller may reasonably request.
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ARTICLE VI
Payments to Certificateholders
Section 6.01. DISTRIBUTIONS ON THE CERTIFICATES. (a) Interest and
principal on the Certificates will be distributed monthly on each Distribution
Date, commencing in January 1999, in an aggregate amount equal to the Available
Funds for such Distribution Date.
(i) On each Distribution Date, the Available Funds will be
distributed in the following order of priority among the Certificates
except as otherwise noted:
FIRST, to the Senior Certificates (other than the PO
Components), the Accrued Certificate Interest on each such Class
or Components for such Distribution Date; provided that Accrued
Certificate Interest shall be paid to the Accrual Certificates
only after the Cross-Over Date. As described below, Accrued
Certificate Interest on each such Class or Component is subject
to reduction in the event of certain Net Interest Shortfalls
allocable thereto. Any Net Interest Shortfalls shall be
allocated among such Senior Certificates as provided in Section
6.01(d);
SECOND, to the Senior Certificates (other than the PO
Components), any Accrued Certificate Interest thereon remaining
undistributed from previous Distribution Dates, to the extent of
remaining Available Funds, any shortfall in available amounts
being allocated among such Classes and Components in proportion
to the amount of such Accrued Certificate Interest remaining
undistributed for each such Class and Component for such
Distribution Date;
THIRD, to the Senior Certificates (other than the Class X
Certificates and the IO Components) in reduction of the Current
Principal Amounts thereof:
(A) an amount equal to the sum of the Senior P&I Optimal
Principal Amount and the Accrual Distribution Amounts
shall be distributed, in the following order of
priority:
FIRST, concurrently to the Class R-I and Class R-II
Certificates, pro rata, based upon their Current
Principal Amounts, until their respective Current
Principal Amounts have been reduced to zero;
SECOND, to the Class A-1, Class A-2 and Class A-3
Certificates, in that order, until the Current
Principal Amounts thereof have been reduced to their
respective Planned Principal Amounts;
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THIRD, to the Class A-4 Certificates, until the
Current Principal Amount thereof has been reduced to
its Targeted Principal Amount;
FOURTH, to the Class A-5-II Component of the Class
A-5 Certificates and the Class A-6-II Component of
the Class A-6 Certificates, pro rata, until the
Current Principal Amounts thereof have been reduced
to their respective Targeted Principal Amounts;
FIFTH, to the Class A-7 and Class A-8 Certificates,
pro rata, until the Current Principal Amounts thereof
have been reduced to their respective Targeted
Principal Amounts;
SIXTH, to the Class A-9 Certificates, until the
Current Principal Amount thereof has been reduced to
zero;
SEVENTH, to the Class A-7 and Class A-8 Certificates,
pro rata, without regard to the Targeted Principal
Amounts thereof, until the Current Principal Amounts
thereof have been reduced to zero;
EIGHTH, if the Class A-4 Certificates are still
outstanding, to the Class A-4 Certificates, the Class
A-5-II Component of the Class A-5 Certificates and
the Class A-6-II Component of the Class A-6
Certificates, pro rata, according to their
outstanding Current Principal Amounts after giving
effect to clauses THIRD and FOURTH above, without
regard to their respective Targeted Principal
Amounts, until the Current Principal Amounts thereof
have been reduced to zero; otherwise, to the Class
A-5-II Component of the Class A-5 Certificates and
the Class A-6-II Component of the Class A-6
Certificates, pro rata, without regard to their
respective Targeted Principal Amounts, until the
Current Principal Amounts thereof have been reduced
to zero;
NINTH, to the Class A-1, Class A-2 and Class A-3
Certificates, in that order, with regard to their
respective Planned Principal Amounts, until the
Current Principal Amounts thereof have been reduced
to zero; and
(B) the PO Component Principal Distribution Amount for
the PO Components for such Distribution Date, to the
PO Components, pro rata, until the Current Principal
Amounts thereof have been reduced to zero;
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FOURTH, concurrently, the PO Component Deferred Amount for
such Distribution Date, to the PO Components on a pro rata
basis; provided, that (i) on any Distribution Date,
distributions pursuant to this priority FOURTH shall not
exceed the excess, if any, of (x) the Available Funds
remaining after giving effect to distributions pursuant to
clauses FIRST through THIRD under Section 6.01(a)(i) above
over (y) the sum of the amount of Accrued Certificate Interest
for such Distribution Date and Accrued Certificate Interest
remaining undistributed from previous Distribution Dates on
all Classes of Subordinate Certificates then outstanding, (ii)
such distributions shall not reduce the Current Principal
Amount of the PO Components and (iii) no distribution will be
made in respect of the PO Component Deferred Amount after the
Cross-Over Date; and
FIFTH, sequentially, in the following order, to the Class B-1,
Class B-2, Class B-3, Class B-4, Class B-5 and Class B-6
Certificates, in each case up to an amount equal to and in the
following order: (a) the Accrued Certificate Interest thereon
for such Distribution Date, (b) any Accrued Certificate
Interest thereon remaining undistributed from previous
Distribution Dates and (c) such Class's Allocable Share for
such Distribution Date.
(ii) On or after the occurrence of the Credit Support
Depletion Date, all priorities relating to distributions as described
above in respect of principal among the Senior Certificates (other than
the PO Components) will 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
will be distributed to the PO Components, pro rata, and following
distributions of interest pursuant to priorities FIRST and SECOND of
Section 6.01(a)(i) above, the Senior P&I Optimal Principal Amount will
be distributed to the Senior P&I Certificates remaining pro rata,
regardless of the allocation, or sequential nature, of principal
payments described in priority THIRD of Section 6.01(a)(i) above, based
upon the then Current Principal Amounts of such Senior P&I
Certificates.
(iii) If, after distributions have been made pursuant to
priorities FIRST and SECOND under Section 6.01(a)(i)(A) above on any
Distribution Date, the remaining Available Funds are less than the sum
of the Senior P&I Optimal Principal Amount and the PO Component
Principal Distribution Amount for such Distribution Date, such amounts
shall be proportionately reduced, and such remaining Available Funds
will be distributed on the Senior Certificates (other than the Class X
Certificates and the IO Components) on the basis of such reduced
amounts. Notwithstanding any reduction in principal distributable to
the PO Components pursuant to this paragraph, the principal balance of
the PO Components shall be reduced not only by principal so distributed
but also by the difference between (i) principal distributable to the
PO Components in accordance with clause (b) of priority THIRD above and
(ii) principal actually distributed to the PO Components after giving
effect to this paragraph (such difference, the "PO Component Cash
Shortfall"). The PO Component Cash
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Shortfall with respect to any Distribution Date will be added to the PO
Component Deferred Amount.
(iv) The "Class A-9 Accrual Distribution Amount" with respect
to a Distribution Date prior to the Cross-Over Date is equal to the
Accrued Certificate Interest that would otherwise be payable in respect
of the Class A-9 Certificates on such Distribution Date. On each
Distribution Date prior to the Cross-Over Date, the Class A-9 Accrual
Distribution Amount will be added to the Current Principal Amount of
the Class A-9 Certificates (such amount thereafter to accrue interest
at the Pass-Through Rate for the Class A-9 Certificates).
(v) The "Class A-5-II Component Accrual Distribution Amount"
with respect to a Distribution Date prior to the Cross-Over Date is
equal to the Accrued Certificate Interest that would otherwise be
payable in respect of the Class A-5-II Component Certificates on such
Distribution Date. On each Distribution Date prior to the Cross-Over
Date, the Class A-5-II Component Accrual Distribution Amount will be
added to the Current Principal Amount of the Class A-5-II Component
(such amount thereafter to accrue interest at the Pass-Through Rate for
the Class A-5-II Component).
(vi) The "Class A-6-II Component Accrual Distribution Amount"
with respect to a Distribution Date prior to the Cross-Over Date is
equal to the Accrued Certificate Interest that would otherwise be
payable in respect of the Class A-6-II Component Certificates on such
Distribution Date. On each Distribution Date prior to the Cross-Over
Date, the Class A-6-II Component Accrual Distribution Amount will be
added to the Current Principal Amount of the Class A-6-II Component
(such amount thereafter to accrue interest at the Pass-Through Rate for
the Class A-6-II Component).
(b) "Pro rata" distributions among Classes and Components of
Certificates will be made in proportion to the then Current Principal Amount of
such Classes and Components.
(c) No Accrued Certificate Interest will be payable with respect to any
Class or Components of Certificates after the Distribution Date on which the
Current Principal Amount or Notional Amount of such Certificate or Component has
been reduced to zero.
(d) If on any Distribution Date the applicable Available Funds for the
Senior Certificates or Components is less than the Accrued Certificate Interest
on such Senior Certificates or Components for such Distribution Date prior to
reduction for Net Interest Shortfall and the interest portion of Realized
Losses, the shortfall will be allocated among the holders of each Class of
interest-bearing Senior Certificates or Components in proportion to the
respective amounts of Accrued Certificate Interest that would have been
allocated thereto in the absence of such Net Interest Shortfall and/or Realized
Losses for such Distribution Date. In addition, the amount of any interest
shortfalls that are covered by subordination will constitute unpaid Accrued
Certificate Interest and will be distributable to holders of the Certificates of
the related Classes or Components entitled to such amounts on subsequent
Distribution Dates, to the extent of the applicable Available
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Funds after current interest distributions as required herein. Any such amounts
so carried forward will not bear interest. Shortfalls in interest payments will
not be offset by a reduction in the servicing compensation of the Master
Servicer or otherwise, except to the extent of applicable Compensating Interest
Payments.
(e) On each Distribution Date, the funds available for distribution
shall be allocated to distributions on each of the Series REMIC Regular
Interests in an amount sufficient to make the distributions on the corresponding
Certificates on such Distribution Date in accordance with the provisions of
subsection (a) of this Section 6.01 and Section 5.01, unless specifically
provided otherwise in this Agreement.
(f) The expenses and fees of the Trust shall be paid by each of the
Series REMICs, to the extent that such expenses relate to the assets of each of
such respective Series REMICs, and all other expenses and fees of the Trust
shall be paid pro rata by each of the Series REMICs.
Section 6.02. ALLOCATION OF LOSSES. (a) On or prior to each
Determination Date, the Master Servicer shall determine the amount of any
Realized Loss in respect of each Mortgage Loan that occurred during the
immediately preceding calendar month. The Trustee shall then with respect to
each such Mortgage Loan allocate Realized Losses on a pro rata basis between the
PO Percentage of the Scheduled Principal Balance of a Mortgage Loan which
suffered a Realized Loss and the Non-PO Percentage of the Scheduled Principal
Balance of such Mortgage Loan.
(b) With respect to any Determination Date, with respect to the
Certificates, the principal portion of each Realized Loss on a Mortgage Loan
shall be allocated as follows:
(i) The applicable PO Percentage of any such Realized
Loss shall be allocated to the PO Components, pro rata; and
(ii) The applicable Non-PO Percentage of any such
Realized Loss shall be allocated as follows:
first, to the Class B-6 Certificates until
the current Principal Amount thereof has been reduced to zero;
second, to the Class B-5 Certificates until
the Current Principal Amount thereof has been reduced to zero;
third, to the Class B-4 Certificates until
the Current Principal Amount thereof has been reduced to zero;
fourth, to the Class B-3 Certificates until
the Current Principal Amount thereof has been reduced to zero;
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fifth, to the Class B-2 Certificates until
the Current Principal Amount thereof has been reduced to zero;
sixth, to the Class B-1 Certificates until
the Current Principal amount thereof has been reduced to zero;
seventh, to the Classes of Senior
Certificates (other than the Class X Certificates, the IO Components
and the PO Components), pro rata, in accordance with their Current
Principal Amounts, except that the Realized Losses otherwise allocable
to the Class A-6 Certificates will be allocated to the Class A-5
Certificates, until the Current Principal Balance of the Class A-5
Certificates has been reduced to zero;
Notwithstanding the foregoing, no such allocation of any Realized Loss
shall be made on a Distribution Date to (A) a Class of Certificates to the
extent that such allocation would result in the reduction of the aggregate
Current Principal Amounts of all the Certificates as of such Distribution Date,
after giving effect to all distributions and prior allocations of Realized
Losses on such date, to an amount less than the aggregate Scheduled Principal
Balance of the Mortgage Loans as of the first day of the month of such
Distribution Date (such limitation, the "Loss Allocation Limitation") and (B) a
Class of Certificates to the extent that such allocation would result in the
reduction of the aggregate Current Principal Amounts of all the Certificates as
of such Distribution Date, after giving effect to all distributions and prior
allocations of Realized Losses on such date, to an amount less than the
aggregate Scheduled Principal Balance of the Mortgage Loans as of the first day
of the month of such Distribution Date (such limitation, the "Loss Allocation
Limitation").
(c) Any Realized Losses allocated to a Class of Certificates pursuant
to Subsection 6.02(b) shall be allocated among the Certificates of such Class in
proportion to their respective Current Principal Amounts. Any allocation of
Realized Losses pursuant to this Subsection 6.02(c) shall be accomplished by
reducing the Current Principal Amount of the related Certificates on the related
Distribution Date in accordance with Subsection 6.02(d).
(d) Realized Losses allocated in accordance with this Section 6.02
shall be allocated on the Distribution Date in the month following the month in
which such loss was incurred and, in the case of the principal portion thereof,
after giving effect to distributions made on such Distribution Date, except that
the aggregate amount of Realized Losses to be allocated to the PO Components on
any Distribution Date through the related Cross-Over Date will be taken into
account in determining distributions in respect of the PO Component Deferred
Amount for such Distribution Date.
(e) On each Distribution Date, the Trustee shall determine the
Subordinate Certificate Writedown Amount, if any. Any such Subordinate
Certificate Writedown Amount shall effect a corresponding reduction in the
Current Principal Amount of (i) if, prior to the Cross-Over Date, the Current
Principal Amounts of the Subordinate Certificates, in the reverse order of their
numerical Class designations and (ii) from and after the Cross-Over Date, the
Senior Certificates, pro rata based
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on their respective Current Principal Amounts, which reduction shall occur on
such Distribution Date after giving effect to distributions made on such
Distribution Date.
(f) On each Distribution Date, on or prior to the Cross-Over Date, the
Trustee shall determine the PO Component Deferred Payment Writedown Amount, if
any. Any such PO Component Deferred Payment Writedown Amount shall effect a
corresponding reduction in the Current Principal Amount of the Subordinate
Certificates, in each case in the reverse order of their numerical Class
designations.
(g) The interest portion of any Realized Losses on Mortgage Loans
occurring on or prior to the Cross-Over Date will not be allocated among any
Certificates, but will reduce the amount of Available Funds on the related
Distribution Date. As a result of the subordination of the Subordinate
Certificates in right of distribution, such Realized Losses will be borne first
by the Subordinate Certificates, in inverse order of their numerical Class
designations.
Section 6.03. PAYMENTS. (a) On each Distribution Date, other than the
final Distribution Date, the Trustee shall distribute to each Certificateholder
of record on the directly preceding Record Date the Certificateholder's PRO RATA
share of its Class (based on the aggregate Fractional Undivided Interest
represented by such Holder's Certificates) of all amounts required to be
distributed on such Distribution Date to such Class. The Trustee shall calculate
the amount to be distributed to each Class and, based on such amounts, the
Trustee shall determine the amount to be distributed to each Certificateholder.
All of the Trustee's calculations of payments shall be based solely on
information provided to the Trustee by the Master Servicer. The Trustee shall
not be required to confirm or verify any such information provided to the
Trustee by the Master Servicer and shall be entitled conclusively to rely on
such information.
(b) Payment of the above amounts to each Certificateholder shall be
made (i) by check mailed to each Certificateholder entitled thereto at the
address appearing in the Certificate Register or (ii) upon receipt by the
Trustee on or before the fifth Business Day preceding the Record Date of written
instructions from a Certificateholder holding Certificates representing an
initial aggregate Current Principal Amount or Notional Amount of not less than
$1,000,000 by wire transfer to a United States dollar account maintained by the
payee at any United States depository institution with appropriate facilities
for receiving such a wire transfer; PROVIDED, HOWEVER, that the final payment in
respect of each Class of Certificates will be made only upon presentation and
surrender of such respective Certificates at the office or agency of the Trustee
specified in the notice to Certificateholders of such final payment.
Section 6.04. STATEMENTS TO CERTIFICATEHOLDERS. (a) Concurrently with
each distribution to Certificateholders, the Trustee shall prepare and forward
by first-class mail to each Certificateholder, with a copy to the Seller, the
Master Servicer and the Rating Agencies, a statement setting forth the following
information, expressed with respect to clauses (i) through (vi) in the aggregate
and as a Fractional Undivided Interest representing an initial Current Principal
Amount of $1,000, or in the
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case of each Class of Notional Amount Certificates, a Notional Amount of $1000,
or in the case of each Class of Residual Certificates, its initial Current
Principal Amount:
(i) the Current Principal Amount (or Notional Amount in the
case of Notional Amount Certificates) of each Class of Certificates
immediately prior to such Distribution Date;
(ii) the amount of the distribution allocable to principal on
each applicable Class of Certificates;
(iii) the aggregate amount of interest accrued at the related
Pass-Through Rate with respect to each Class of interest-bearing
Certificates during the related Interest Accrual Period;
(iv) the Net Interest Shortfall and any other adjustments to
interest at the related Pass-Through Rate necessary to account for any
difference between interest accrued and aggregate interest distributed
with respect to each Class of interest-bearing Certificates (other than
the Accrual Certificates);
(v) the amount of the distribution allocable to interest on
each Class of interest-bearing Certificates and the related Accrual
Distribution Amount added to the Current Principal Amount of each
Accrual Certificate;
(vi) the Pass-Through Rates for each Class of interest-bearing
Certificates with respect to such Distribution Date;
(vii) the Current Principal Amount (or Notional Amount in the
case of the Notional Amount Certificates) of each Class of Certificates
after such Distribution Date;
(viii) the amount of any Monthly Advances, Compensating
Interest Payments and outstanding unreimbursed advances by the Master
Servicer included in such distribution;
(ix) the amount of any Realized Losses during the related
Prepayment Period and cumulatively since the Cut-off Date and the
amount and source (separately identified) of any distribution in
respect thereof included in such distribution;
(x) the amount of Scheduled Principal and Principal
Prepayments, (including but separately identifying the principal amount
of principal prepayments, Insurance Proceeds, the purchase price in
connection with the purchase of Mortgage Loans, cash deposits in
connection with substitutions of Mortgage Loans and Net Liquidation
Proceeds) and the number and principal balance of Mortgage Loans
purchased or substituted for during the relevant period and
cumulatively since the Cut-off Date;
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(xi) the number of Mortgage Loans (excluding REO Property)
remaining in the Trust Fund as of the end of the related Due Period;
(xii) information regarding any Mortgage Loan delinquencies as
of the end of the related Due Period, including the aggregate number,
aggregate Outstanding Principal Balance and aggregate Scheduled
Principal Balance of Mortgage Loans delinquent one month, two months
and three months or more;
(xiii) the number of Mortgage Loans in the foreclosure process
as of the end of the related Due Period and the aggregate Outstanding
Principal Balance of such Mortgage Loans
(xiv) the number and aggregate Outstanding Principal Balance
of all Mortgage Loans as to which the Mortgaged Property was REO
Property as of the end of the related Due Period;
(xv) the book value (the sum of (A) the Outstanding Principal
Balance of the Mortgage Loan, (B) accrued interest through the date of
foreclosure and (C) foreclosure expenses) of any REO Property; PROVIDED
THAT, in the event that such information is not available to the Master
Servicer and the Trustee on the Distribution Date, such information
shall be furnished promptly after it becomes available;
(xvi) the amount of Realized Losses allocated to each Class of
Certificates since the prior Distribution Date and in the aggregate for
all prior Distribution Dates;
(xvii) the then applicable Senior Percentage, Senior
Prepayment Percentage, Subordinate Percentage and Subordinate
Prepayment Percentage; and
(xviii) the occurrence of the Credit Support Depletion Date.
The information set forth above shall be calculated, or reported, as
the case may be, by the Trustee based on data provided by the Master Servicer
pursuant to Section 6.05 upon which the Trustee may conclusively rely and which
the Trustee shall not be required to confirm or verify. The information
furnished by the Master Servicer shall be sufficient for the Trustee to
calculate any payments or statements it is required to make.
(b) By April 30 of each year beginning in 1999, the Trustee will
furnish a report to each Holder of the Certificates of record at any time during
the prior calendar year as to the aggregate of amounts reported pursuant to
subclauses (a)(ii) and (a)(v) above with respect to the Certificates, plus
information with respect to the amount of servicing compensation and such other
customary information as the Master Servicer determines and advises the Trustee
to be necessary and/or to be required by the Internal Revenue Service or by a
federal or state law or rules or regulations to enable such Holders to prepare
their tax returns for such calendar year. Such obligations shall be deemed
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to have been satisfied to the extent that substantially comparable information
shall be provided by the Trustee pursuant to the requirements of the Code.
The Master Servicer shall supply to the Trustee in a timely manner the
information required for the reports described above.
Section 6.05. REPORTS TO THE TRUSTEE AND THE MASTER SERVICER. (a) On or
before the seventh Business Day of each month, the Master Servicer shall provide
to the Trustee, with respect to the Mortgage Loans and the related REO Property,
an electronic data file containing the information included in Exhibit K.
(b) On or before 12:00pm on the Business Day following each
Determination Date, the Master Servicer shall provide to the Trustee (and with
respect to the information contained in subclause (xiv) hereof, the Seller),
with respect to the Mortgage Loans and the related REO Property, respectively, a
Loan Summary and Remittance Report in such electronic format as the Trustee may
reasonably request and in such hardcopy format as the Master Servicer and the
Trustee shall agree which, if there are Sub-Servicers, shall be based upon
reports from Sub-Servicers, if any, received by the Master Servicer on or before
the seventh Business Day of such month with respect to the Mortgage Loans and
related REO Property and containing the following information (in respect of the
REO Property, only such information which is applicable) (provided that the
information in clauses (i), (ii)(B)(x), (ii)(B)(y), (ii)(B)(z), (ii)(D),
(ii)(E), (ii)(G), (vi), (ix) and (x) may be provided by the Master Servicer
solely in a hardcopy format):
(i) Aggregate deposits to and withdrawals from each subaccount
of the Certificate Account since the date of the prior statement,
stated separately for each category of deposit specified in Section
4.02 and each category of withdrawal specified in Section 4.03,
indicating separately the aggregate of amounts withdrawn which are not
applicable to a particular Mortgage Loan;
(ii) Amount of each Available Funds expected for the related
Distribution Date and attributable to each of the following categories:
(A) regularly scheduled principal;
(B) Principal Prepayments (stated separately for (u)
partial prepayments, (v) full prepayments, (w) Net
Liquidation Proceeds, stating Liquidation Proceeds
and Liquidation Expenses separately), (x) Insurance
Proceeds, (y) the purchase price in connection with
the purchase of a Mortgage Loan, and (z) any cash
deposit in connection with the substitution of a
Mortgage Loan;
(C) Regularly scheduled interest on the Mortgage Loans;
`` (D) Monthly Advances made by the Master Servicer;
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(E) Certificate Account Advances;
(F) Compensating Interest Payments; and
(G) reimbursements in connection with losses on Permitted
Investments.
(iii) Aggregate Outstanding Principal Balances of the Mortgage
Loans as of the related Due Date, without giving effect to payments due
on such date;
(iv) Realized Losses for the prior month;
(v) Aggregate Scheduled Principal Balance of the Mortgage
Loans as of the related Due Date;
(vi) Book value of any collateral acquired by means of
foreclosure, grant of deed in lieu of foreclosure or otherwise in
respect of any Mortgage Loan;
(vii) Number and aggregate principal balance of Mortgage Loans
which are 30, 60, 90 and 120 days delinquent as calculated by the
Master Servicer, those which are in foreclosure, those with respect to
which the related Mortgagor is bankrupt, and those which are REO
Property;
(viii) Interest Shortfall with respect to the related
Distribution Date and portion thereof resulting from Voluntary
Principal Prepayments in full or the provisions of the Relief Act;
(ix) The amount, if any, by which the aggregate of payments of
scheduled principal and interest on the Mortgage Loans that were due on
the related Due Date and delinquent, other than as a result of the
Relief Act, as of the 18th day of such month exceeds the sum of the
Monthly Advances to be made by the Master Servicer and Certificate
Account Advances for such Distribution Date;
(x) Applicable aggregate Master Servicing Fee for the related
Due Period; and
(xi) Such other information regarding each Mortgage Loan,
including, but not limited to, an updated schedule of the Scheduled
Principal Balances of such Mortgage Loans as of the related Due Date,
in such electronic format, as may be reasonably requested by the
Trustee and, if requested, in such hardcopy format as the Master
Servicer and the Trustee shall agree.
Section 6.06. MONTHLY ADVANCES. If the Scheduled Payment (together with
any advances from any Sub-Servicers) on a Mortgage Loan that was due on a
related Due Date and is delinquent other than as a result of application of the
Relief Act exceeds the amount deposited in the Certificate
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Account which will be used for a Certificate Account Advance with respect to
such Mortgage Loan, the Master Servicer will deposit in the appropriate
subaccount of the Certificate Account not later than the Advancing Date
immediately preceding the related Distribution Date an amount equal to such
deficiency, net of the Master Servicing Fee for such Mortgage Loan except to the
extent the Master Servicer determines any such advance to be nonrecoverable from
Liquidation Proceeds, Insurance Proceeds or future payments on the Mortgage Loan
for which such Monthly Advance was made. Subject to the foregoing, the Master
Servicer shall continue to make such advances through the date that the related
Mortgaged Property has, in the judgment of the Master Servicer, been completely
liquidated. Any amount used as a Certificate Account Advance shall be replaced
by the Master Servicer by deposit in the appropriate subaccount of the
Certificate Account on or before any future date on which and to the extent that
funds in the appropriate subaccount of the Certificate Account on such date are
less than the amount required to be transferred by the Master Servicer to such
subaccount of the Certificate Account. If applicable, on the fifth Business Day
preceding each Distribution Date, the Master Servicer shall present an Officer's
Certificate to the Trustee (i) stating that the Master Servicer elects not to
make a Monthly Advance in a stated amount and (ii) detailing the reason it deems
the advance to be nonrecoverable.
Section 6.07. COMPENSATING INTEREST PAYMENTS. The Master Servicer shall
deposit in the Certificate Account not later than the Advancing Date immediately
preceding the related Distribution Date an amount equal to the lesser of (i) the
aggregate amounts determined pursuant to subclauses (a) and (b) of the
definition of Interest Shortfall as calculated with respect to Mortgage Loans
serviced by the Master Servicer for the related Distribution Date and (ii) the
Master Servicing Fee for such Distribution Date (except that any Master
Servicing Fee of CMC that is based on a Master Servicing Fee Rate in excess of
0.20% shall not be considered in calculating the amount of any Compensating
Interest Payment due from CMC) (such amount, the "Compensating Interest
Payment"). The Master Servicer shall not be entitled to any reimbursement of any
Compensating Interest Payment.
Section 6.08. REPORTS OF FORECLOSURES AND ABANDONMENT OF MORTGAGED
PROPERTY. Each year the Master Servicer shall report or cause to be reported to
the Internal Revenue Service foreclosures and abandonments of any Mortgaged
Property as required by Section 6050J of the Code and shall provide a copy of
such report to the Trustee.
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ARTICLE VII
The Master Servicer
Section 7.01. LIABILITIES OF THE MASTER SERVICER. The Master Servicer
shall be liable in accordance herewith only to the extent of the obligations
specifically imposed upon and undertaken by it herein.
Section 7.02. MERGER OR CONSOLIDATION OF THE MASTER SERVICER. (a) The
Master Servicer will keep in full force and effect its existence, rights and
franchises as a corporation under the laws of the state of its incorporation,
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.
(b) Any Person into which the Master Servicer may be merged or
consolidated, or any corporation resulting from any merger or consolidation to
which the Master Servicer shall be a party, or any Person succeeding to the
business of the Master Servicer, shall be the successor of the Master Servicer
hereunder, without the execution or filing of any paper or further act on the
part of any of the parties hereto, anything herein to the contrary
notwithstanding.
Section 7.03. INDEMNIFICATION OF THE TRUSTEE. (a) The Master Servicer
agrees to the extent described in Section 7.03(b) to indemnify the Indemnified
Persons for, and to hold them harmless against, any loss, liability or expense
incurred on their part, arising out of, or in connection with, this Agreement,
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 its failure to perform its 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 Person's willful misfeasance, bad faith or
gross negligence in the performance of duties hereunder or by reason of reckless
disregard of obligations and duties hereunder, provided that with respect to any
such claim, the Trustee shall have given the Master Servicer and the Seller
written notice thereof promptly after the Trustee shall have with respect to
such claim knowledge thereof.
(b) The Master Servicer will indemnify any Indemnified Person for any
loss, liability or expense which primarily relates to the servicing or
administration of the Mortgage Loans. The Seller will indemnify any Indemnified
Person for any other loss, liability or expense of any Indemnified Person not
otherwise referred to in this paragraph.
Section 7.04. LIMITATION ON LIABILITY OF THE MASTER SERVICER AND
OTHERS. Subject to the obligation of the Master Servicer to indemnify the
Indemnified Persons pursuant to Section 7.03:
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(a) Neither the Master Servicer nor any of the directors,
officers, employees or agents of the Master Servicer shall be under any
liability to the Indemnified Persons, the Seller, the Trust Fund or the
Certificateholders for taking any action or for refraining from taking any
action in good faith pursuant to this Agreement, or for errors in judgment;
PROVIDED, HOWEVER, that this provision shall not protect the Master Servicer or
any such Person against any breach of warranties or representations made herein
or any liability which would otherwise be imposed by reason of such Person's
willful misfeasance, bad faith or gross negligence in the performance of duties
or by reason of reckless disregard of obligations and duties hereunder.
(b) The Master Servicer and any director, officer, employee or
agent of the Master 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.
(c) The Master Servicer and any director, officer, employee or
agent of the Master Servicer shall be indemnified by the Trust and held harmless
thereby against any loss, liability or expense incurred in connection with any
legal proceedings relating to this Agreement or the Certificates (including
reasonable legal fees and disbursements of counsel), other than (i) any loss,
liability or expense related to its failure to perform its 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 Person's willful misfeasance, bad faith or
gross negligence in the performance of duties hereunder or by reason of reckless
disregard of obligations and duties hereunder.
(d) The Master Servicer shall not be under any obligation to
appear in, prosecute or defend any legal action that is not incidental to its
duties under this Agreement and that in its opinion may involve it in any
expense or liability; PROVIDED, HOWEVER, the Master Servicer may in its
discretion, with the consent of the Trustee, undertake any such action which it
may deem necessary or desirable with respect to this Agreement and the rights
and duties of the parties hereto and the interests of the Certificateholders
hereunder. In such event, the legal expenses and costs of such action and any
liability resulting therefrom shall be expenses, costs and liabilities of the
Trust Fund, and the Master Servicer shall be entitled to be reimbursed therefor
out of the Certificate Account as provided by Subsection 4.03(a). Nothing in
this Subsection 7.04(d) shall affect the Master Servicer's obligation to
supervise, or to take such actions as are necessary to ensure, the servicing and
administration of the Mortgage Loans pursuant to Subsection 3.01(a).
(e) In taking or recommending any course of action pursuant to
this Agreement, unless specifically required to do so pursuant to this
Agreement, the Master Servicer shall not be required to investigate or make
recommendations concerning potential liabilities which the Trust might incur as
a result of such course of action by reason of the condition of the Mortgaged
Properties but shall give notice to the Trustee if it has notice of such
potential liabilities.
Section 7.05. MASTER SERVICER NOT TO RESIGN. Except as provided in
Section 7.07, the Master Servicer shall not resign from the obligations and
duties hereby imposed on it except upon a
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determination that any such duties hereunder are no longer permissible under
applicable law and such impermissibility cannot be cured. Any such determination
permitting the resignation of the Master Servicer shall be evidenced by an
Opinion of Independent Counsel to such effect delivered to the Trustee. No such
resignation by the Master Servicer shall become effective until the Trustee or a
successor to the Master Servicer reasonably satisfactory to the Trustee shall
have assumed the responsibilities and obligations of the Master Servicer in
accordance with Section 8.02 hereof. The Trustee shall notify the Rating
Agencies of the resignation of the Master Servicer.
Section 7.06. SUCCESSOR MASTER SERVICER. In connection with the
appointment of any successor Master Servicer or the assumption of the duties of
the Master Servicer, the Trustee may make such arrangements for the compensation
of such successor master servicer out of payments on the Mortgage Loans as the
Trustee and such successor master servicer shall agree. If the successor master
servicer does not agree that such market value is a fair price, such successor
master servicer shall obtain two quotations of market value from third parties
actively engaged in the servicing of single-family mortgage loans.
Section 7.07. SALE AND ASSIGNMENT OF MASTER SERVICING. The Master
Servicer may sell and assign its rights and delegate its duties and obligations
in their entirety as Master Servicer under this Agreement; PROVIDED, HOWEVER,
that: (i) the purchaser or transferee accepting such assignment and delegation
(a) shall be a Person which shall be qualified to service mortgage loans for
Fannie Mae or Freddie Mac; (b) shall have a net worth of not less than
$10,000,000 (unless otherwise approved by each Rating Agency pursuant to clause
(ii) below); (c) shall be reasonably satisfactory to the Trustee (as evidenced
in a writing signed by the Trustee); (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 Person of the due and punctual
performance and observance of each covenant and condition to be performed or
observed by it as master servicer under this Agreement, any custodial 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 Master Servicer and each Rating Agency's rating of the Certificates in
effect immediately prior to such assignment, sale and delegation will not be
downgraded, qualified or withdrawn as a result of such assignment, sale and
delegation, as evidenced by a letter to such effect delivered to the Master
Servicer and the Trustee; and (iii) the Master Servicer assigning and selling
the master servicing shall deliver to the Trustee an Officer's Certificate and
an Opinion of Independent 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 Master Servicer arising prior to
the effective date thereof.
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ARTICLE VIII
Default
Section 8.01. EVENTS OF DEFAULT. "Event of Default," wherever used
herein, means any one of the following events (whatever the reason for such
Event of Default and whether it shall be voluntary or involuntary or be effected
by operation of law or pursuant to any judgment, decree or order of any court or
any order, rule or regulation of any administrative or governmental body) and
only with respect to the defaulting Master Servicer:
(i) The Master Servicer fails to cause to be deposited in the
Certificate Account any amount so required to be deposited pursuant to
this Agreement, and such failure continues unremedied for a period of
two Business Days after the date such deposit was required to be made;
or
(ii) The Master Servicer fails to observe or perform in any
material respect any other covenants and agreements set forth in the
Certificates or this Agreement to be performed by it, which covenants
and agreements materially affect the rights of Certificateholders, and
such failure continues unremedied for a period of 60 days after the
date on which written notice of such failure, properly requiring the
same to be remedied, shall have been given to the Master Servicer by
the Trustee or to the Master Servicer and the Trustee by the Holders of
Certificates evidencing Fractional Undivided Interests aggregating not
less than 25% of the Trust Fund; or
(iii) There is entered against the Master Servicer a decree or
order by a court or agency or supervisory authority having jurisdiction
in the premises for the appointment of a conservator, receiver or
liquidator in any insolvency, readjustment of debt, marshaling of
assets and liabilities or similar proceedings, or for the winding up or
liquidation of its affairs, and the continuance of any such decree or
order is unstayed and in effect for a period of 60 consecutive days, or
an involuntary case is commenced against the Master Servicer under any
applicable insolvency or reorganization statute and the petition is not
dismissed within 60 days after the commencement of the case; or
(iv) The Master Servicer consents to the appointment of a
conservator or receiver or liquidator in any insolvency, readjustment
of debt, marshaling of assets and liabilities or similar proceedings of
or relating to the Master Servicer or substantially all of its
property; or the Master Servicer admits in writing its inability to pay
its debts generally as they become due, files a petition to take
advantage of any applicable insolvency or reorganization statute, makes
an assignment for the benefit of its creditors, or voluntarily suspends
payment of its obligations; or
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(v) The Master Servicer assigns or delegates its duties or
rights under this Agreement in contravention of the provisions
permitting such assignment or delegation under Sections 7.05 or 7.07.
In each and every such case, so long as such Event of Default with respect to
the Master Servicer shall not have been remedied, either the Trustee or the
Holders of Certificates evidencing Fractional Undivided Interests aggregating
not less than 51% of the principal of the Trust Fund, by notice in writing to
the Master Servicer (and to the Trustee if given by such Certificateholders),
with a copy to the Rating Agencies, may terminate all of the rights and
obligations (but not the liabilities) of the Master Servicer under this
Agreement and in and to the Mortgage Loans and/or the REO Property serviced by
the Master Servicer and the proceeds thereof. Upon the receipt by the Master
Servicer of the written notice, all authority and power of the Master Servicer
under this Agreement, whether with respect to the Certificates, the Mortgage
Loans, REO Property or under any other related agreements (but only to the
extent that such other agreements relate to the Mortgage Loans or REO Property)
shall, subject to Section 8.02, automatically and without further action pass to
and be vested in the Trustee pursuant to this Section 8.01; and, without
limitation, the Trustee is hereby authorized and empowered to execute and
deliver, on behalf of the Master Servicer as attorney-in-fact or otherwise, any
and all documents and other instruments and to 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. The Master Servicer
agrees to cooperate with the Trustee in effecting the termination of the Master
Servicer's rights and obligations hereunder, including, without limitation, the
transfer to the Trustee of (i) the property and amounts which are then or should
be part of the Trust or which thereafter become part of the Trust; and (ii)
originals or copies of all documents of the Master Servicer reasonably requested
by the Trustee to enable it to assume the Master Servicer's duties thereunder.
In addition to any other amounts which are then, or, notwithstanding the
termination of its activities under this Agreement, may become payable to the
Master Servicer under this Agreement, the Master Servicer shall be entitled to
receive, out of any amount received on account of a Mortgage Loan or REO
Property, that portion of such payments which it would have received as
reimbursement pursuant to Section 3.14 if notice of termination had not been
given. The termination of the rights and obligations of the Master Servicer
shall not affect any obligations incurred by the Master Servicer prior to such
termination.
Section 8.02. TRUSTEE TO ACT; APPOINTMENT OF SUCCESSOR. (a) Upon the
receipt by the Master Servicer of a notice of termination pursuant to Section
8.01 or an Opinion of Independent Counsel pursuant to Section 7.05 to the effect
that the Master Servicer is legally unable to act or to delegate its duties to a
Person which is legally able to act, the Trustee shall automatically become the
successor in all respects to the Master Servicer in its capacity under this
Agreement and the transactions set forth or provided for herein and shall
thereafter be subject to all the responsibilities, duties, liabilities and
limitations on liabilities relating thereto placed on the Master Servicer by the
terms and provisions hereof; PROVIDED, HOWEVER, that the Trustee (i) shall be
under no obligation to purchase any Mortgage Loan pursuant to Section 10.01; and
(ii) shall have no obligation whatsoever with respect to any liability (other
than advances deemed recoverable and not previously made)
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incurred by the Master Servicer at or prior to the time of receipt by the Master
Servicer of such notice or by the Trustee of such Opinion of Independent
Counsel, including any liabilities associated with the Master Servicer's failure
to modify its computer and any other systems in a manner such that the Master
Servicer can service the Mortgage Loans in accordance with the terms of this
Agreement on and after January 1, 2000. As compensation therefor, but subject to
Section 7.06, the Trustee shall be entitled to all funds relating to the
Mortgage Loans which the Master Servicer would have been entitled to retain if
the Master Servicer had continued to act hereunder, except for those amounts due
the Master Servicer as reimbursement for advances previously made or expenses
previously incurred. Notwithstanding the above, the Trustee may, if it shall be
unwilling so to act, or shall, if it is legally unable so to act, appoint or
petition a court of competent jurisdiction to appoint, any established housing
and home finance institution which is a Fannie Mae- or Freddie Mac-approved
servicer, and with respect to a successor to the Master Servicer only, having a
net worth of not less than $10,000,000, as the successor to the Master Servicer
hereunder in the assumption of all or any part of the responsibilities, duties
or liabilities of the Master Servicer hereunder. Pending appointment of a
successor to the Master Servicer hereunder, the Trustee shall act in such
capacity as hereinabove provided. In connection with such appointment and
assumption, the Trustee may make such arrangements for the compensation of such
successor out of payments on the Mortgage Loans as it and such successor shall
agree; PROVIDED, HOWEVER, that the provisions of Section 7.06 shall apply, no
such compensation shall be in excess of that permitted the Trustee under this
Subsection 8.02(a), and that such successor shall undertake and assume the
obligations of the Trustee to pay compensation to any third Person acting as an
agent or independent contractor in the performance of master servicing
responsibilities hereunder. The Trustee and such successor shall take such
action, consistent with this Agreement, as shall be necessary to effectuate any
such succession.
(b) If the Trustee shall succeed to any duties of the Master Servicer
respecting 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 IX shall be inapplicable to the Trustee in its duties as the successor
to the Master 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 VII, however, shall apply to it in its capacity as
successor master servicer.
Section 8.03. NOTIFICATION TO CERTIFICATEHOLDERS. Upon any termination
or appointment of a successor to the Master Servicer, the Trustee shall give
prompt written notice thereof to Certificateholders at their respective
addresses appearing in the Certificate Register and to the Rating Agencies.
Section 8.04. WAIVER OF DEFAULTS. The Trustee shall transmit by mail to
all Certificateholders, within 60 days after the occurrence of any Event of
Default known to the Trustee, unless such Event of Default shall have been
cured, notice of each such Event of Default hereunder known to the Trustee. The
Holders of Certificates evidencing Fractional Undivided Interests aggregating
not less than 51% of the Trust Fund may, on behalf of all Certificateholders,
waive any default by the Master Servicer in the performance of its obligations
hereunder and the consequences
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thereof, except a default in the making of or the causing to be made any
required distribution on the Certificates. Upon any such waiver of a past
default, such default shall be deemed to cease to exist, and any Event of
Default arising therefrom shall be deemed to have been timely remedied for every
purpose of this Agreement. No such waiver shall extend to any subsequent or
other default or impair any right consequent thereon except to the extent
expressly so waived. The Master Servicer shall give notice of any such waiver to
the Rating Agencies.
Section 8.05. LIST OF CERTIFICATEHOLDERS. Upon written request of three
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.
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ARTICLE IX
Concerning the Trustee
Section 9.01. 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 Master
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
Master Servicer hereunder.
(c) The Trustee shall make monthly distributions and the final
distribution to the Certificateholders as provided in Sections 6.01 and 10.01
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
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Certificates evidencing Fractional Undivided 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 Master 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 Master 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 9.02. CERTAIN MATTERS AFFECTING THE TRUSTEE. Except as
otherwise provided in Section 9.01:
(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
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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 8.02(b), 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 Fractional Undivided 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 Master Servicer,
which consent will not be unreasonably withheld. The Trustee shall not
be liable or responsible for the misconduct or negligence of any of the
Trustee's agents or attorneys or a custodian or paying agent appointed
hereunder by the Trustee with due care and, when required, with the
consent of the Master Servicer;
(vii) Should the Trustee deem the nature of any action
required on its part, other than a payment or transfer under Subsection
4.02(b) or Section 4.03, to be unclear, the Trustee may require prior
to such action that it be provided by the Master Servicer with
reasonable further instructions;
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(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 BSMCC pursuant to this Agreement
and/or the Mortgage Loan Purchase Agreement or the eligibility
of any Mortgage Loan for purposes of this Agreement.
Section 9.03. 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 Sections 2.02 and 2.06 hereof. 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. Subject to the
provisions of Section 2.06, 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 9.04. 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 9.05. FEES AND EXPENSES. (a) The Trustee will be paid the
Trustee's Fees each calendar month from the Certificate Account, pursuant to
Subsection 4.03(b). The Trust Fund will be liable for the Trustee's expenses,
including all reasonable out-of-pocket expenses, disbursements
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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 intentional misconduct or which is the responsibility of the
Certificateholders or the Master Servicer hereunder, 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 Master
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 strict 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 9.06. 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 9.10, 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 Master Servicer, unless the Trustee
acts as successor Master 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 9.06 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 9.06, the Trustee shall resign immediately in the manner and with the
effect specified in Section 9.08.
Section 9.07. 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
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for investor-owned mortgage pools. A certificate of an officer of the Trustee as
to the Trustee's compliance with this Section 9.07 shall be furnished to the
Master Servicer or any Certificateholder upon reasonable written request.
Section 9.08. 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 Master Servicer, with a copy to the Rating
Agencies. Upon receiving such notice of resignation, the Master 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 Master 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
Master 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 Fractional Undivided
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, in quadruplicate, signed by such Holders or their attorneys-in-fact
duly authorized, one complete set of which instruments shall be delivered to
each of the Master 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
9.09.
Section 9.09. SUCCESSOR TRUSTEE. (a) Any successor Trustee appointed as
provided in Section 9.08 shall execute, acknowledge and deliver to the Master
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 Master Servicer
and the predecessor Trustee shall execute and deliver such instruments and do
such other things as may
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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 9.09 unless at the time of such acceptance such successor Trustee shall
be eligible under the provisions of
Section 9.06.
(c) Upon acceptance of appointment by a successor Trustee as provided
in this Section 9.09, 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 Master Servicer
shall pay its Applicable Percentage of the cost of any mailing by the successor
Trustee.
Section 9.10. 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
9.06. 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 9.11. 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 Master
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 Master 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 9.11, such powers, duties, obligations, rights and trusts as the
Master Servicer and the Trustee may consider necessary or desirable.
(b) If the Master 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 Master Servicer shall have occurred and
be continuing, the Trustee shall have the power to make such appointment without
the Master Servicer.
(c) No co-trustee or separate trustee hereunder shall be required to
meet the terms of eligibility as a successor Trustee under Section 9.06
hereunder and no notice to Certificateholders of the appointment of
co-trustee(s) or separate trustee(s) shall be required under Section 9.08
hereof.
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(d) In the case of any appointment of a co-trustee or separate trustee
pursuant to this Section 9.11, 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 Master
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 IX. 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
Master 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 9.12. MASTER SERVICER SHALL PROVIDE INFORMATION AS REASONABLY
REQUIRED. The Master 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 9.13. FEDERAL INFORMATION RETURNS AND REPORTS TO
CERTIFICATEHOLDERS. (a) For Federal income tax purposes, the taxable year of
each of the Series REMICs shall be a calendar year
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and the Trustee shall maintain or cause the maintenance of the books of each of
the Series REMICs 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 each of the Series REMICs
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 each of the Series REMICs (the "REMIC Reporting Agent") as
required by IRS Form 8811. The Trustee shall make the elections to treat each of
the Series REMICs as a REMIC (which election shall apply to the taxable period
ending December 31, 1998 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 Master Servicer. The Holder of the Class R-I
Certificate is hereby designated as the "Tax Matters Person" (within the meaning
of Treas. Reg. ss.ss. 1.860F-4(d)) for REMIC I and the Holder of the Class R-II
Certificate is hereby designated as "Tax Matters Person" for REMIC II. 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 each of the Series REMICs 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 by the Master Servicer) 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 5.05(b) (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 each of
the Series REMICs or the Trust Fund.
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ARTICLE X
Termination
Section 10.01. TERMINATION UPON REPURCHASE BY THE SELLER OR ITS
DESIGNEE OR LIQUIDATION OF THE MORTGAGE LOANS. (a) Subject to Section 10.02, the
respective obligations and responsibilities of the Seller, the Master Servicer
and the Trustee created hereby, other than the obligation of the Trustee or the
Master Servicer to make payments to Certificateholders as hereinafter set forth
and to the Trustee, shall terminate:
(i) upon the repurchase by or at the direction of the Seller
or its designee of all Mortgage Loans and all REO Property remaining in
the Trust at a price equal to (a) 100% of the Outstanding Principal
Balance of each Mortgage Loan (other than a Mortgage Loan related to
REO Property) as of the date of repurchase, net of the principal
portion of any unreimbursed Monthly Advances made by the purchaser,
together with interest at the applicable Mortgage Interest Rate accrued
but unpaid through and including the last day of the month of
repurchase, plus (b) the appraised value of any REO Property, less the
good faith estimate of the Seller of liquidation expenses to be
incurred in connection with its disposal thereof (but not more than the
Outstanding Principal Balance of the related Mortgage Loan, together
with interest at the applicable Mortgage Interest Rate accrued on that
balance but unpaid through and including the last day of the month of
repurchase), such appraisal to be calculated by an appraiser mutually
agreed upon by the Seller and the Trustee at the expense of the Seller;
or
(ii) upon the later of the making of the final payment or
other liquidation, or any advance with respect thereto, of the last
Mortgage Loan remaining in the Trust Fund or the disposition of all
property acquired with respect to any such Mortgage Loan; PROVIDED,
HOWEVER, that in the event that an advance has been made, but not yet
recovered, at the time of such termination, the Person having made such
advance shall be entitled to receive, notwithstanding such termination,
any payments received subsequent thereto with respect to which such
advance was made.
(b) In no event, however, shall the Trust created hereby continue
beyond the expiration of 21 years from the death of the last survivor of the
descendants of Joseph P. Kennedy, the late Ambassador of the United States to
the Court of St. James, living on the date of this Agreement.
(c) The right of the Seller or its designee to repurchase all Mortgage
Loans pursuant to Subsection 10.01(a)(i) above shall be exercisable only if (i)
the aggregate Scheduled Principal Balance of the Mortgage Loans at the time of
any such repurchase is less than 10% of the portion of the Cut-off Date Balance,
or (ii) the Seller, based upon an Opinion of Counsel, has determined that the
REMIC status of any Series REMIC has been lost or that a substantial risk exists
that such REMIC status will be lost for the then-current taxable year. At any
time thereafter, the Seller may
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elect to terminate the related REMIC at any time, and upon such election, the
Seller or its designee shall repurchase all the Mortgage Loans.
(d) The Trustee shall give notice of any termination to the applicable
Certificateholders, with a copy to the Rating Agencies, upon which such
Certificateholders shall surrender their Certificates to the Trustee for payment
of the final distribution and cancellation. Such notice shall be given by
letter, mailed not earlier than the 15th day and not later than the 25th day of
the month next preceding the month of such final distribution, and shall specify
(i) the Distribution Date upon which final payment of such Certificates will be
made upon presentation and surrender of such Certificates at the office of the
Trustee therein designated, (ii) the amount of any such final payment and (iii)
that the Record Date otherwise applicable to such Distribution Date is not
applicable, payments being made only upon presentation and surrender of such
Certificates at the office of the Trustee therein specified.
(e) If the option of the Seller to repurchase or cause the repurchase
of all Mortgage Loans under Subsection 10.01(a)(i) above is exercised, the
Seller and/or its designee shall deliver to the Trustee for deposit in the
Certificate Account, by the Business Day prior to the applicable Distribution
Date, an amount equal to the repurchase price for the Mortgage Loans being
purchased by it and all property acquired with respect to such Mortgage Loans
remaining in the applicable REMIC. Upon the presentation and surrender of the
Certificates, the Trustee shall distribute an amount equal to (i) the amount
otherwise distributable to the Certificateholders (other than the holder of the
Class or Classes of Residual Certificate) on such Distribution Date but for such
repurchase, (ii) the Current Principal Amount and any accrued but unpaid
interest at the Pass-Through Rate to the Certificateholders of each Class, and
(iii) the remainder to the applicable Residual Certificateholder. If the
Available Funds are not sufficient to pay all of the related Certificates in
full, any such deficiency will be allocated to the outstanding Class or Classes
of Subordinate Certificates having the highest numerical designation or, if
after the applicable Cross-Over Date, to the Senior Certificates pro rata. Upon
deposit of the required repurchase price and following such final Distribution
Date, the Trustee shall release promptly to the Seller and/or its designee, as
the case may be, the Mortgage Files for the remaining applicable Mortgage Loans,
and the Accounts with respect thereto shall terminate, subject to the Trustee's
obligation to hold any amounts payable to Certificateholders in trust without
interest pending final distributions pursuant to Subsection 10.01(g).
(f) In the event that this Agreement is terminated by reason of the
payment or liquidation of all Mortgage Loans or the disposition of all property
acquired with respect to all Mortgage Loans under Subsection 10.01(a)(ii) above,
the Master Servicer shall deliver to the Trustee for deposit in the Certificate
Account all distributable amounts remaining in the Protected Account, and shall
cause any Sub-Servicers to, deliver to the Trustee for deposit in the
Certificate Account all distributable amounts remaining in their Protected
Accounts. Upon the presentation and surrender of the Certificates, the Trustee
shall distribute to the Certificateholders, in accordance with their respective
interests, all distributable amounts remaining in the Certificate Account. Upon
deposit by any Sub-Servicers of such distributable amounts and delivery to the
Trustee of an Officer's Certificate
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from the Master Servicer certifying that such deposit has been made, and
following such final Distribution Date, the Trustee shall release promptly to
the Seller or its designee the Mortgage Files for the remaining Mortgage Loans,
and the Accounts shall terminate, subject to the Trustee's obligation to hold
any amounts payable to the Certificateholders in trust without interest pending
final distributions pursuant to Subsection 10.01(g).
(g) If not all of the Certificateholders shall surrender their
Certificates for cancellation within six months after the time specified in the
above-mentioned written notice, the Trustee shall give a second written 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, not all the Certificates shall have been
surrendered for cancellation, the Trustee may take appropriate steps, or appoint
any agent to take appropriate steps, to contact the remaining Certificateholders
concerning surrender of their Certificates, and the cost thereof shall be paid
out of the funds and other assets which remain subject to this Agreement.
Section 10.02. ADDITIONAL TERMINATION REQUIREMENTS. (a) If the option
of the Seller to repurchase all the Mortgage Loans under Subsection 10.01(a)(i)
above is exercised, the corresponding Series REMIC shall be terminated in
accordance with the following additional requirements, unless the Trustee has
been furnished with an Opinion of Counsel to the effect that the failure of the
Trust to comply with the requirements of this Section 10.02 will not (i) result
in the imposition of taxes on "prohibited transactions" as defined in Section
860F of the Code on any Series REMIC or (ii) cause any Series REMIC to fail to
qualify as a REMIC at any time that any Regular Certificates are outstanding:
(i) within 90 days prior to the final Distribution Date, at
the written direction of the Seller, the Trustee, as agent for the
respective Tax Matters Persons, shall adopt a plan of complete
liquidation of any Series REMIC provided to it by the Seller meeting
the requirements of a "Qualified Liquidation" under Section 860F of the
Code and any regulations thereunder.
(ii) at or after the time of adoption of such a plan of
complete liquidation of any of the Series REMICs and at or prior to the
final Distribution Date, the Trustee shall sell for cash all of the
assets of the Trust to or at the direction of the Seller; and
(iii) at the time of the making of the final payment on any
such Certificates, the Trustee shall distribute or credit from the
Certificate Account (or cause to be distributed or credited) (i) to the
Certificateholders, other than the Holder of the corresponding Residual
Certificates, the Current Principal Amount of the Certificates plus 30
days' interest thereon at the applicable Pass-Through Rate, and (ii) to
the corresponding Residual Certificateholder, all cash on hand from the
Certificate Account (other than cash retained to meet claims); and the
corresponding REMIC shall terminate at such time.
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(b) By their acceptance of the Residual Certificates, the Holders
thereof hereby (i) agree to adopt such a plan of complete liquidation of the
relevant REMIC upon the written request of the Seller and to take such action in
connection therewith as may be reasonably requested by the Seller and (ii)
appoint the Seller as their attorney-in-fact, with full power of substitution,
for purposes of adopting such a plan of complete liquidation. The Trustee shall
adopt such plan of liquidation by filing the appropriate statement on the final
tax return of such REMIC.
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ARTICLE XI
Miscellaneous Provisions
Section 11.01. INTENT OF PARTIES. The parties intend that each of the
Series REMICs shall be treated as a REMIC for federal income tax purposes and
that the provisions of this Agreement should be construed in furtherance of this
intent.
Section 11.02. AMENDMENT. (a) This Agreement may be amended from time
to time by the Seller, the Trustee and the Master Servicer, without notice to or
the consent of any of the Certificateholders, to cure any ambiguity, to correct
or supplement any provisions herein that may be defective or inconsistent with
any other provisions herein, to comply with any changes in the Code or to make
any other provisions with respect to matters or questions arising under this
Agreement which shall not be inconsistent with the provisions of this Agreement;
PROVIDED, HOWEVER, that such action shall not, as evidenced by an Opinion of
Independent Counsel, adversely affect in any material respect the interests of
any Certificateholder.
(b) This Agreement may also be amended from time to time by the Seller,
the Trustee and the Master Servicer, with the consent of the Holders of
Certificates evidencing Fractional Undivided Interests aggregating not less than
51% of the Trust Fund or of the applicable Class or Classes if such amendment
affects only such Class or Classes 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 Certificateholders; 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) 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, or (iii) cause any of the Series
REMICs to fail to qualify as a REMIC for federal income tax purposes, as
evidenced by an Opinion of Independent Counsel which shall be provided to the
Trustee other than at the Trustee's expense. Notwithstanding any other provision
of this Agreement, for purposes of the giving or withholding of consents
pursuant to Section 11.02(b), Certificates registered in the name of or held for
the benefit of the Seller, the Master Servicer, a Sub-Servicer or the Trustee or
any Affiliate thereof shall be entitled to vote their Undivided Fractional
Interests with respect to matters affecting such Certificates.
(c) Promptly after the execution of any such amendment, the Trustee
shall furnish a copy of such amendment or written notification of the substance
of such amendment to each Certificateholder, with a copy to the Rating Agencies.
(d) In the case of an amendment under Subsection 11.02(b) above, it
shall not be necessary for the Certificateholders to approve the particular form
of such an amendment. Rather, it shall be sufficient if the Certificateholders
approve the substance of the amendment. The manner
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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.
(e) Prior to the execution of any amendment to this Agreement, the
Trustee shall be entitled to receive and rely upon an Opinion of Counsel stating
that the execution of such amendment is authorized or permitted by this
Agreement. The Trustee may, but shall not be obligated to, enter into any such
amendment which affects the Trustee's own rights, duties or immunities under
this Agreement.
(f) Notwithstanding any provision of this Agreement to the contrary,
this Agreement may not be amended, modified or waived in any manner than would
be adverse to any interest of the Master Servicer, without the Master Servicer's
prior written consent.
Section 11.03. RECORDATION OF AGREEMENT. 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 Mortgaged Properties are situated, and
in any other appropriate public recording office or elsewhere. The Master
Servicer shall effect such recordation, at its expense upon the request in
writing of a Certificateholder, but only if such direction is accompanied by an
Opinion of Counsel (provided at the expense of the Certificateholder requesting
recordation) to the effect that such recordation would materially and
beneficially affect the interests of the Certificateholders or is required by
law.
Section 11.04. LIMITATION ON RIGHTS OF CERTIFICATEHOLDERS. (a) The
death or incapacity of any Certificateholder shall not terminate this Agreement
or the Trust, 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, nor otherwise affect the rights,
obligations and liabilities of the parties hereto or any of them.
(b) Except as expressly provided in this Agreement, no
Certificateholders shall have any right to vote or in any manner otherwise
control the operation and management of the Trust, 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 establish the Certificateholders from
time to time as partners or members of an association; nor shall any
Certificateholders be under any liability to any third Person by reason of any
action taken by the parties to this Agreement pursuant to any provision hereof.
(c) 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, under or with respect to this Agreement against the
Seller, the Master Servicer or any successor to any such parties unless (i) such
Certificateholder previously shall have given to the Trustee a written notice of
a continuing default, as herein provided, (ii) the Holders of Certificates
evidencing Fractional Undivided Interests aggregating not less than 51% of the
Trust Fund 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 and expenses
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and liabilities to be incurred therein or thereby, and (iii) 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.
(d) No one or more Certificateholders shall have any right by virtue of
any provision of this Agreement to affect the rights of any other
Certificateholders or to obtain or seek to obtain priority or preference over
any other such Certificateholder, 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 11.04, each and every Certificateholder and the
Trustee shall be entitled to such relief as can be given either at law or in
equity.
Section 11.05. ACTS OF CERTIFICATEHOLDERS. (a) Any request, demand,
authorization, direction, notice, consent, waiver or other action provided by
this Agreement to be given or taken by Certificateholders may be embodied in and
evidenced by one or more instruments of substantially similar tenor signed by
such Certificateholders in person or by an agent duly appointed in writing.
Except as herein otherwise expressly provided, such action shall become
effective when such instrument or instruments are delivered to the Trustee and,
where it is expressly required, to the Seller. Proof of execution of any such
instrument or of a writing appointing any such agent shall be sufficient for any
purpose of this Agreement and conclusive in favor of the Trustee and the Seller,
if made in the manner provided in this Section 11.05.
(b) The fact and date of the execution by any Person of any such
instrument or writing may be proved by the affidavit of a witness of such
execution or by a certificate of a notary public or other officer authorized by
law to take acknowledgments of deeds, certifying that the individual signing
such instrument or writing acknowledged to him the execution thereof. Where such
execution is by a signer acting in a capacity other than his or her individual
capacity, such certificate or affidavit shall also constitute sufficient proof
of his or her authority. The fact and date of the execution of any such
instrument or writing, or the authority of the individual executing the same,
may also be proved in any other manner which the Trustee deems sufficient.
(c) The ownership of Certificates (notwithstanding any notation of
ownership or other writing on such Certificates, except an endorsement in
accordance with Section 5.02 made on a Certificate presented in accordance with
Section 5.04) shall be proved by the Certificate Register, and neither the
Trustee, the Seller, the Master Servicer nor any successor to any such parties
shall be affected by any notice to the contrary.
(d) Any request, demand, authorization, direction, notice, consent,
waiver or other action of the holder of any Certificate shall bind every future
holder of the same Certificate and the holder of every Certificate issued upon
the registration of transfer or exchange thereof, if applicable, or in lieu
thereof with respect to anything done, omitted or suffered to be done by the
Trustee, the Seller, the Master Servicer or any successor to any such party in
reliance thereon, whether or not notation of such action is made upon such
Certificates.
108
<PAGE>
(e) In determining whether the Holders of the requisite percentage of
Certificates evidencing Fractional Undivided Interests have given any request,
demand, authorization, direction, notice, consent or waiver hereunder,
Certificates owned by the Trustee, the Seller, the Master Servicer or any
Sub-Servicer or any Affiliate thereof shall be disregarded, except as otherwise
provided in Section 11.02(b) and except that, in determining whether the Trustee
shall be protected in relying upon any such request, demand, authorization,
direction, notice, consent or waiver, only Certificates which the Trustee knows
to be so owned shall be so disregarded. Certificates which have been pledged in
good faith to the Trustee, the Seller, the Master Servicer or any Sub-Servicer
or any Affiliate thereof may be regarded as outstanding if the pledgor
establishes to the satisfaction of the Trustee the pledgor's right to act with
respect to such Certificates and that the pledgor is not an Affiliate of the
Trustee, the Seller, the Master Servicer or any Sub-Servicer, as the case may
be.
Section 11.06. GOVERNING LAW. THIS AGREEMENT AND THE CERTIFICATES SHALL
BE CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT
REFERENCE TO ITS CONFLICT OF LAWS RULES AND THE OBLIGATIONS, RIGHTS AND REMEDIES
OF THE PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.
Section 11.07. NOTICES. All demands and notices hereunder shall be in
writing and shall be deemed given when delivered at or mailed by registered
mail, return receipt requested, postage prepaid, or by recognized overnight
courier, to (i) in the case of the Seller, Structured Assets Mortgage
Investments Inc, 245 Park Avenue, New York, New York 10167, Attention: Vice
President-Servicing (but with respect to monthly reports sent pursuant to
Section 6.05(c), Attention: Lynn Lin), or to such other address as may hereafter
be furnished to the other parties hereto in writing; (ii) in the case of the
Master Servicer, Cendant Mortgage Corporation, 6000 Atrium Way, Mt. Laurel, New
Jersey 08054, Attention: Jeff Frezza, or such other address as may hereafter be
furnished to the other parties in writing; (iii) in the case of the Trustee, at
its Corporate Trust Office, with a copy to Norwest Bank Minnesota, National
Association, 11000 Broken Land Parkway, Columbia, Maryland 21044, ref: SAMI
1998-12, or such other address as may hereafter be furnished to the other
parties hereto in writing; or (iv) in the case of the Rating Agencies, (x) Duff
& Phelps Credit Rating Co., 17 State Street, New York, New York 10007,
Attention: RMBS Monitoring Group, and (y) Moody's Investors Service Inc., 99
Church Street, New York, New York, 10007. Any notice delivered to the Seller,
the Master Servicer or the Trustee under this Agreement shall be effective only
upon receipt. Any notice required or permitted to be mailed to a
Certificateholder, unless otherwise provided herein, shall be given by
first-class mail, postage prepaid, at the address of such Certificateholder 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 11.08. 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 severed from the remaining covenants,
109
<PAGE>
agreements, provisions or terms of this Agreement and shall in no way affect the
validity or enforceability of the other provisions of this Agreement or of the
Certificates or the rights of the holders thereof.
Section 11.09. SUCCESSORS AND ASSIGNS. The provisions of this Agreement
shall be binding upon and inure to the benefit of the respective successors and
assigns of the parties hereto.
Section 11.10. 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 11.11. COUNTERPARTS. This Agreement may be executed in two or
more counterparts each of which when so executed and delivered shall be an
original but all of which together shall constitute one and the same instrument.
Section 11.12. NOTICE TO RATING AGENCIES. The article and section
headings herein are for convenience of reference only, and shall not limited or
otherwise affect the meaning hereof. The Trustee shall use its best efforts to
promptly provide notice to each Rating Agency 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 Master Servicer or the
Trustee;
4. The repurchase or substitution of Mortgage Loans;
5. The final payment to Certificateholders; and
6. Any change in the location of the Certificate Account.
In addition, in accordance with Section 6.04 and Section 3.16, the
Trustee and the Master Servicer, respectively, shall promptly furnish to each
Rating Agency copies of the following:
1. Each report to Certificateholders described in Section 6.04;
and
2. Each annual independent public accountants' servicing report
received as described in Section 3.16.
110
<PAGE>
IN WITNESS WHEREOF, the Seller, the Master Servicer and the
Trustee have caused their names to be signed hereto by their respective officers
thereunto duly authorized as of the day and year first above written.
STRUCTURED ASSET MORTGAGE
INVESTMENTS INC., as Seller
By: /s/ Joseph Jurkowski
----------------------------
Name: Joseph Jurkowski
Title: Vice President
NORWEST BANK MINNESOTA,
NATIONAL ASSOCIATION, as Trustee
By: /s/ Randall S. Reider
----------------------------
Name: Randall S. Reider
Title: Assistant Vice President
CENDANT MORTGAGE CORPORATION, as a
Master Servicer
By: /s/ Peter A. Thomas
----------------------------
Name: Peter A. Thomas
Title: Vice President
Accepted and Agreed as to
Sections 2.02, 2.04 and 2.05
BEAR STEARNS MORTGAGE CAPITAL
CORPORATION
By: /s/ Mary Haggerty
- ----------------------------
Name: Mary Haggerty
Title: Vice President
<PAGE>
STATE OF NEW YORK )
) ss.:
COUNTY OF NEW YORK )
On the 31st day of December, 1998 before me, a notary public in and for
said State, personally appeared Joseph Jurkowski, known to me to be a 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.
--------------------------------
Notary Public
No.
Commission Expires:
[Notarial Seal]
<PAGE>
STATE OF NEW YORK )
) ss.:
COUNTY OF NEW YORK )
On the 31st day of December, 1998 before me, a notary public in and for
said State, personally appeared Mary Haggerty, known to me to be a Vice
President of Bear Stearns Mortgage Capital 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
No.
Commission Expires:
[Notarial Seal]
<PAGE>
STATE OF NEW YORK )
) ss.:
COUNTY OF NEW YORK )
On the 31st day of December, 1998 before me, a notary public in and for
said State, personally appeared Randall S. Reider, known to me to be an
Assistant Vice President of Norwest Bank Minnesota, National Association, 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
No.
Commission Expires:
[Notarial Seal]
<PAGE>
STATE OF NEW JERSEY )
) ss.:
COUNTY OF BURLINGTON )
On the 31st day of December, 1998 before me, a notary public in and for
said State, personally appeared Peter A. Thomas, known to me to be a Vice
President of Cendant 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
No.
Commission Expires:
[Notarial Seal]
<PAGE>
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").]
[THIS CERTIFICATE REPRESENTS FOUR SEPARATE COMPONENTS, AS
DESCRIBED IN THE POOLING AND SERVICING AGREEMENT. SOLELY FOR U.S. FEDERAL INCOME
TAX PURPOSES, EACH COMPONENT OF 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 CURRENT PRINCIPAL AMOUNT 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 CURRENT
PRINCIPAL AMOUNT OF THIS CERTIFICATE WILL BE DIFFERENT FROM THE DENOMINATION
SHOWN BELOW. ANYONE ACQUIRING THIS CERTIFICATE MAY ASCERTAIN ITS CURRENT
PRINCIPAL AMOUNT 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.
[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 DECEMBER 31, 1998.
ASSUMING THAT THE MORTGAGE LOANS PREPAY AT 250% OF THE STANDARD 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 CURRENT
PRINCIPAL AMOUNT, THE YIELD TO MATURITY IS [______]% AND THE AMOUNT OF OID
ATTRIBUTABLE TO THE INITIAL ACCRUAL
A-1-1
<PAGE>
PERIOD IS NO MORE THAN $[_____] PER $1,000 OF INITIAL CURRENT PRINCIPAL AMOUNT,
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.]
[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, PTE 91-38, PTE 90-1, PTE 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 THE MASTER SERVICER OR THE TRUSTEE, WHICH WILL BE DEEMED REPRESENTED BY
AN OWNER OF A BOOK-ENTRY CERTIFICATE OR A GLOBAL 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 CLASS A-6 CERTIFICATE.]
A-1-2
<PAGE>
Certificate No. __ _______% Pass-Through Rate
Class A-__ Senior
Date of Pooling and Servicing Aggregate Initial Current Principal
Agreement and Cut-off Date: Amount of this Certificate as of the
December 1, 1998 Cut-off Date: $____________
First Distribution Date: Initial Current Principal Amount of this
January 25, 1999 Certificate as of the Cut-off Date:
$_____________
Master Servicer: CUSIP 86358H __ __
Cendant Mortgage Corporation
Assumed Final Distribution Date:
February 25, 2029
MORTGAGE PASS-THROUGH CERTIFICATE
SERIES 1998-12
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 Master 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 Master Servicer or
the Trustee or any of their affiliates or any other person. None of Structured
Asset Mortgage Investments Inc., the Master 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, units in planned unit developments and
individual condominium units (collectively, the "Mortgage Loans") sold by
Structured Asset Mortgage Investments Inc. ("SAMI"). The Mortgage Loans were
sold by Bear Stearns Mortgage Capital Corporation ("BSMCC") to SAMI. Cendant
Mortgage Corporation ("Cendant") will act as master servicer of the Mortgage
Loans (the "Master 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 seller (the "Seller"), Norwest Bank
Minnesota, National Association, as trustee (the
A-1-3
<PAGE>
"Trustee") and Cendant, as master servicer (the "Master Servicer"), 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 Current Principal Amount 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 Current Principal Amount 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 Current Principal Amount of this Certificate is set forth above. The
Current Principal Amount 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, PTE 91-38, PTE 90-1, PTE 95-60,
PTE 96-23 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 Master Servicer or the Trustee, which will be deemed represented by an owner
of a Book-Entry Certificate or a global certificate and will be evidenced by a
representation to such effect by or on behalf of a Holder of a Class A-6
Certificate.]
This Certificate is one of a duly authorized issue of
Certificates designated as set forth on the face hereof (the "Certificates"),
issued in eighteen Classes. The Certificates, in the aggregate,
A-1-4
<PAGE>
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 Seller and the rights of the Certificateholders under the
Agreement from time to time by the Seller and the Trustee with the consent of
the Holders of Certificates evidencing Percentage Interests aggregating not less
than 66- 2/3% (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 Seller, the Master 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 Seller, the Master 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
A-1-5
<PAGE>
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 21
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.
A-1-6
<PAGE>
IN WITNESS WHEREOF, the Trustee has caused this Certificate to
be duly executed.
Dated: ___________________ 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
A-1-7
<PAGE>
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.
A-1-8
<PAGE>
EXHIBIT A-2
FORM OF CLASS X 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 NOTIONAL AMOUNT OF THIS CERTIFICATE WILL BE DECREASED TO
THE EXTENT OF PRINCIPAL DISTRIBUTIONS ON THE NON- DISCOUNT MORTGAGE LOANS AND
REALIZED LOSSES ALLOCATED HERETO. ACCORDINGLY, FOLLOWING THE INITIAL ISSUANCE OF
THE CERTIFICATES, THE NOTIONAL AMOUNT OF THIS CERTIFICATE WILL BE DIFFERENT FROM
THE DENOMINATION SHOWN BELOW. ANYONE ACQUIRING THIS CERTIFICATE MAY ASCERTAIN
ITS NOTIONAL AMOUNT BY INQUIRY OF THE TRUSTEE NAMED 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 DECEMBER 31, 1998.
ASSUMING THAT THE MORTGAGE LOANS PREPAY AT 250% OF THE STANDARD 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 CURRENT
PRINCIPAL AMOUNT, 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 CURRENT PRINCIPAL AMOUNT, 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.
A-2-1
<PAGE>
Certificate No. ____ Variable Pass-Through Rate
Class X Senior
Date of Pooling and Servicing Initial Notional Amount of this
Agreement and Cut-off Date: Certificate: $_______________
December 1, 1998
First Distribution Date:
January 25, 1999
Master Servicer: CUSIP 86358H GL 7
Cendant Mortgage Corporation
Assumed Final Distribution Date:
February 25, 2029
MORTGAGE PASS-THROUGH CERTIFICATE
SERIES 1998-12
evidencing a percentage interest in the distributions
allocable to the Class X 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 Master 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 Master Servicer or
the Trustee or any of their affiliates or any other person. None of Structured
Asset Mortgage Investments Inc., the Master 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, units in planned unit developments
and individual condominium units (collectively, the "Mortgage Loans") sold by
Structured Asset Mortgage Investments Inc. ("SAMI"). The Mortgage Loans were
sold by Bear Stearns Mortgage Capital Corporation ("BSMCC") to SAMI. Cendant
Mortgage Corporation ("Cendant") will act as master servicer of the Mortgage
Loans (the "Master 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 seller (the "Seller"), Norwest Bank
Minnesota, National Association, as trustee (the "Trustee") and Cendant, as
master servicer (the "Master Servicer"), a summary of certain of the
A-2-2
<PAGE>
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
Non-Discount Mortgage Loans) at a variable Pass-Through Rate equal to the Pool
Strip Rates of the Non-Discount 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, 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 Notional Amount of this Class
of Certificates will be reduced to zero. The Initial Notional Amount of this
Certificate is set forth above. The Notional Amount hereof will be reduced to
the extent of distributions allocable to principal on the Non-Discount 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 is one of a duly authorized issue of
Certificates designated as set forth on the face hereof (the "Certificates"),
issued in eighteen 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.
A-2-3
<PAGE>
The Agreement permits, with certain exceptions therein
provided, the amendment thereof and the modification of the rights and
obligations of the Seller and the rights of the Certificateholders under the
Agreement from time to time by the Seller and the Trustee with the consent of
the Holders of Certificates evidencing Percentage Interests aggregating not less
than 66- 2/3% (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 Seller, the Master 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 Seller, the Master 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 21 years
after the death of certain persons identified in the Agreement.
A-2-4
<PAGE>
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.
A-2-5
<PAGE>
IN WITNESS WHEREOF, the Trustee has caused this Certificate to
be duly executed.
Dated: ________________ 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 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
A-2-6
<PAGE>
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.
A-2-7
<PAGE>
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, PTE 91-38, PTE 90-1, PTE 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 THE MASTER 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 MASTER
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
<PAGE>
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.
A-3-2
<PAGE>
Certificate No. __ _____% Pass-Through Rate
Class R-__ Senior
Date of Pooling and Servicing Aggregate Initial Current Principal Amount
Agreement and Cut-off Date: of this Certificate as of the Cut-off
December 1, 1998 Date: $____
First Distribution Date: Initial Current Principal Amount of this
January 25, 1999 Certificate as of the Cut-off Date:
$_____
Master Servicer:
Cendant Mortgage Corporation
Assumed Final Distribution Date: CUSIP 86358H __ __
February 25, 2029
MORTGAGE PASS-THROUGH CERTIFICATE
SERIES 1998-12
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 Master 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 Master Servicer or
the Trustee or any of their affiliates or any other person. None of Structured
Asset Mortgage Investments Inc., the Master 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, units in planned unit
developments and individual condominium units (collectively, the "Mortgage
Loans") sold by Structured Asset Mortgage Investments Inc. ("SAMI"). The
Mortgage Loans were sold by Bear Stearns Mortgage Capital Corporation ("BSMCC")
to SAMI. Cendant Mortgage Corporation ("Cendant") will act as master servicer of
the Mortgage Loans (the "Master Servicer," which term includes any successors
thereto under the Agreement referred to below). The Trust Fund was created
pursuant to the Pooling
A-3-3
<PAGE>
and Servicing Agreement dated as of the Cut-off Date specified above (the
"Agreement"), between SAMI, as seller (the "Seller"), Norwest Bank Minnesota,
National Association, as trustee (the "Trustee") and Cendant, as master servicer
(the "Master Servicer"), 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 Current Principal Amount 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 Current Principal Amount 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 Current Principal
Amount of this Certificate is set forth above. The Current Principal Amount
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 Seller 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 Seller, or any affiliate of the Seller, on such terms and conditions as the
Seller may choose.
A-3-4
<PAGE>
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, PTE 91-38, PTE 90-1, PTE 95-60,
PTE 96-23 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 Master 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 eighteen 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 Seller and the rights of the Certificateholders under the
Agreement from time to time by the Seller and the Trustee with the consent of
the Holders of Certificates evidencing Percentage Interests aggregating not less
than 66- 2/3% (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.
A-3-5
<PAGE>
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 Seller, the Master 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 Seller, the Master 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 21 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.
A-3-6
<PAGE>
IN WITNESS WHEREOF, the Trustee has caused this Certificate to
be duly executed.
Dated: _________________ 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
A-3-7
<PAGE>
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.
A-3-8
<PAGE>
EXHIBIT A-4
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 CURRENT PRINCIPAL AMOUNT 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
CURRENT PRINCIPAL AMOUNT OF THIS CERTIFICATE WILL BE DIFFERENT FROM THE
DENOMINATION SHOWN BELOW. ANYONE ACQUIRING THIS CERTIFICATE MAY ASCERTAIN ITS
CURRENT PRINCIPAL AMOUNT 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 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, PTE 91-38, PTE 90-1, PTE 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 THE MASTER SERVICER OR THE TRUSTEE, WHICH WILL BE DEEMED REPRESENTED BY
AN OWNER OF A BOOK-ENTRY CERTIFICATE OR A GLOBAL CERTIFICATE AND WILL BE
EVIDENCED BY A REPRESENTATION TO SUCH EFFECT BY OR ON BEHALF OF A HOLDER OF A
CLASS B-__ CERTIFICATE.
<PAGE>
[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 DECEMBER 31, 1998. ASSUMING THAT THE MORTGAGE
LOANS
PREPAY AT 250% OF THE STANDARD 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 CURRENT PRINCIPAL AMOUNT, 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 CURRENT PRINCIPAL AMOUNT,
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.]
[THIS CERTIFICATE HAS NOT BEEN AND WILL NOT BE REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR UNDER
ANY STATE SECURITIES LAWS. THE HOLDER HEREOF, BY PURCHASING THIS CERTIFICATE,
AGREES THAT THIS CERTIFICATE MAY BE REOFFERED, RESOLD, PLEDGED OR OTHERWISE
TRANSFERRED ONLY IN COMPLIANCE WITH THE SECURITIES ACT AND OTHER APPLICABLE LAWS
AND ONLY (1) PURSUANT TO RULE 144A UNDER THE SECURITIES ACT ("RULE 144A") TO A
PERSON THAT THE HOLDER REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER
WITHIN THE MEANING OF RULE 144A (A "QIB"), PURCHASING FOR ITS OWN ACCOUNT OR A
QIB PURCHASING FOR THE ACCOUNT OF A QIB, WHOM THE HOLDER HAS INFORMED, IN EACH
CASE, THAT THE REOFFER, RESALE, PLEDGE OR OTHER TRANSFER IS BEING MADE IN
RELIANCE ON RULE 144A, (2) PURSUANT TO AN EXEMPTION FROM REGISTRATION PROVIDED
BY RULE 144 UNDER THE SECURITIES ACT (IF AVAILABLE) OR (3) IN CERTIFICATED FORM
TO AN "INSTITUTIONAL ACCREDITED INVESTOR" WITHIN THE MEANING THEREOF IN RULE
501(A)(1), (2), (3) OR (7) OF REGULATION D UNDER THE ACT OR ANY ENTITY IN WHICH
ALL OF THE EQUITY OWNERS COME WITHIN SUCH PARAGRAPHS PURCHASING NOT FOR
DISTRIBUTION IN VIOLATION OF THE SECURITIES ACT, SUBJECT TO (A) THE RECEIPT BY
THE TRUSTEE OF A LETTER SUBSTANTIALLY IN THE FORM PROVIDED IN THE AGREEMENT AND
(B) THE RECEIPT BY THE TRUSTEE OF SUCH OTHER EVIDENCE ACCEPTABLE TO THE TRUSTEE
THAT SUCH REOFFER, RESALE, PLEDGE OR TRANSFER IS IN COMPLIANCE WITH THE
SECURITIES ACT AND OTHER APPLICABLE LAWS OR IN EACH CASE IN ACCORDANCE WITH ALL
APPLICABLE SECURITIES LAWS OF THE UNITED STATES AND ANY OTHER APPLICABLE
JURISDICTION.]
A-4-2
<PAGE>
Certificate No. __ ________% Pass-Through Rate
Class B-__
Date of Pooling and Servicing Aggregate Initial Current Principal
Agreement and Cut-off Date: Amount of this Certificate as of the
December 1, 1998 Cut-off Date: $____________
First Distribution Date: Initial Current Principal Amount of this
January 25, 1999 Certificate as of the Cut-off Date:
$____________
Master Servicer: CUSIP 86358H __ __
Cendant Mortgage Corporation
Assumed Final Distribution Date:
February 25, 2029
MORTGAGE PASS-THROUGH CERTIFICATE
SERIES 1998-12
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 Master 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 Master Servicer or
the Trustee or any of their affiliates or any other person. None of Structured
Asset Mortgage Investments Inc., the Master 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, units in planned unit developments
and individual condominium units (collectively, the "Mortgage Loans") sold by
Structured Asset Mortgage Investments Inc. ("SAMI"). The Mortgage Loans were
sold by Bear Stearns Mortgage Capital Corporation ("BSMCC") to SAMI. Cendant
Mortgage Corporation ("Cendant") will act as master servicer of the Mortgage
Loans (the "Master 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 seller (the "Seller"), Norwest Bank
Minnesota, National Association, as trustee (the
A-4-3
<PAGE>
"Trustee") and Cendant, as master servicer (the "Master Servicer"), 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 Current Principal Amount 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 Current Principal Amount 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 Current Principal Amount of this Certificate is set forth above. The
Current Principal Amount 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 Seller may require an opinion of counsel acceptable
to and in form and substance satisfactory to the Trustee and the Seller 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 Seller, the Master 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
A-4-4
<PAGE>
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,
PTE 91-38, PTE 90-1, PTE 95-60, PTE 96-23 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 Master 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 eighteen 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 Seller and the rights of the Certificateholders under the
Agreement from time to time by the Seller and the Trustee with the consent of
the Holders of Certificates evidencing Percentage Interests aggregating not less
than 66- 2/3% (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
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<PAGE>
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 Seller, the Master 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 Seller, the Master 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 21 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.
A-4-6
<PAGE>
IN WITNESS WHEREOF, the Trustee has caused this Certificate to
be duly executed.
Dated: ________________ 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
A-4-7
<PAGE>
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.
A-4-8
<PAGE>
EXHIBIT B
MORTGAGE LOAN SCHEDULE
B-1
<PAGE>
EXHIBIT C
REPRESENTATIONS AND WARRANTIES OF BSMCC
CONCERNING THE MORTGAGE LOANS
(a) The information set forth in the Mortgage Loan Schedule is true,
complete and correct in all material respects as of the Cut-Off Date;
(b) The Mortgage Loan has not been delinquent thirty (30) days or more
on more than one occasion during the 12 months preceding the Cut-Off Date. As of
the Closing Date, the Mortgage Loan is not delinquent in payment more than 30
days and has not been dishonored; there are no defaults under the terms of the
Mortgage Loan; and the Seller has not advanced funds, or induced, solicited or
knowingly received any advance of funds from a party other than the owner of the
Mortgaged Property subject to the Mortgage, directly or indirectly, for the
payment of any amount required by the Mortgage Loan;
(c) There are no delinquent taxes, ground rents, assessments or other
outstanding charges affecting the related Mortgaged Property;
(d) The Mortgage Note and the Mortgage are not subject to any right of
rescission, set-off, counterclaim or defense, including the defense of usury,
nor will the operation of any of the terms of the Mortgage Note and the
Mortgage, or the exercise of any right thereunder, render the Mortgage Note or
Mortgage unenforceable, in whole or in part, or subject to any right of
rescission, set-off, counterclaim or defense, including the defense of usury,
and no such right of rescission, set-off, counterclaim or defense has been
asserted with respect thereto;
(e) The Mortgage has not been satisfied, canceled or subordinated, in
whole or in part, or rescinded, and the Mortgaged Property has not been released
from the lien of the Mortgage, in whole or in part, except with respect to
certain releases in part that do not materially affect the value of the
Mortgaged Property, nor has any instrument been executed that would effect any
such satisfaction, release, cancellation, subordination or rescission;
(f) Immediately prior to the transfer and assignment to the Purchaser,
the Mortgage Note and the Mortgage were not subject to an assignment or pledge,
and the Seller had good and marketable title to and was the sole owner thereof
and had full right to transfer and sell the Mortgage Loan to the Purchaser free
and clear of any encumbrance, equity, lien, pledge, charge, claim or security
interest;
(g) There is no default, breach, violation or event of acceleration
existing under the Mortgage or the related Mortgage Note and no event, which,
with the passage of time or with notice and the expiration of any grace or cure
period, would constitute a default, breach, violation or event permitting
acceleration; and neither the Seller nor any prior mortgagee has waived any
default, breach, violation or event permitting acceleration;
(h) There are no mechanics', or similar liens or claims which have been
filed for work, labor or material affecting the related Mortgaged Property which
are or may be liens prior to or equal to the lien of the related Mortgage;
<PAGE>
(i) All improvements subject to the Mortgage lie wholly within the
boundaries and building restriction lines of the Mortgaged Property (and wholly
within the project with respect to a condominium unit) except for DE MINIMUS
encroachments permitted by the Fannie Mae Guide (MBS Special Servicing Option)
and which has been noted on the appraisal, and no improvements on adjoining
properties encroach upon the Mortgaged Property except those which are insured
against by a title insurance policy and all improvements on the property comply
with all applicable zoning and subdivision laws and ordinances;
(j) At origination, the Mortgaged Property was free of damage and
waste, and currently is free of damage and waste, or any such damage and waste
is adequately covered by an insurance policy, and there was and currently is no
proceeding pending for the total or partial condemnation thereof;
(k) The original Loan-to-Value Ratio of each Mortgage Loan either was
not more than 95.00% or the excess over 80.00% is insured as to payments
defaults by a Primary Mortgage Insurance Policy issued by a primary mortgage
insurer acceptable to Fannie Mae and Freddie Mac until the Loan-to-Value Ratio
of such Mortgage Loan is reduced to 80.00%;
(l) With respect to each Mortgage Loan, the Mortgage creates a first
lien or a first priority ownership interest in an estate in fee simple in real
property securing the related Mortgage Note, free and clear of all adverse
claims, liens and encumbrances having priority over the first lien of the
Mortgage subject only to (1) the lien of non-delinquent current real property
taxes and assessments not yet due and payable, (2) covenants, conditions and
restrictions, rights of way, easements and other matters of public record as of
the date of recording which are acceptable to mortgage lending institutions
generally and either (A) which are referred to or otherwise considered in the
appraisal made for the originator of Mortgage Loan, or (B) which do not
adversely affect the appraised value of the Mortgaged Property as set forth in
such appraisal, and (3) other matters to which like properties are commonly
subject which do not materially interfere with the benefits of the security
intended to be provided by the Mortgage or the use, enjoyment, value or
marketability of the related Mortgaged Property;
(m) The terms of the Mortgage Note and the Mortgage have not been
impaired, waived, altered or modified in any respect, except by written
instruments which have been recorded to the extent any such recordation is
required by applicable law, and copies of which written instruments are included
in the Mortgage File. No other instrument of waiver, alteration or modification
has been executed, and no Mortgage has been released, in whole or in part, from
the terms thereof except in connection with an assumption agreement, which
assumption agreement is part of the Mortgage File and the terms of which are
reflected in the Mortgage Loan Schedule;
(n) All buildings upon the Mortgaged Property are insured by a
generally acceptable insurer pursuant to standard hazard policies conforming to
the requirements of the Pooling and Servicing Agreement. All such standard
hazard policies are in effect and on the date of origination contained a
standard mortgagee clause naming the originator and its successors in interest
as loss payee and such clause is still in effect and all premiums due thereon
have been paid. If the Mortgaged Property is located in an area identified by
the Federal Emergency Management Agency
C-2
<PAGE>
as having special flood hazards under the Flood Disaster Protection Act of 1973,
as amended, such Mortgaged Property is covered by flood insurance in an amount
not less than that set forth in the Pooling and Servicing Agreement. The
Mortgage obligates the Mortgagor thereunder to maintain all such insurance at
the Mortgagor's cost and expense, and on the Mortgagor's failure to do so,
authorizes the holder of the Mortgage to maintain such insurance at the
Mortgagor's cost and expense and to seek reimbursement therefor from the
Mortgagor;
(o) Any and all requirements of any federal, state or local law
including, without limitation, usury, truth-in-lending, real estate settlement
procedures, consumer credit protection, equal credit opportunity or disclosure
laws applicable to the Mortgage Loan have been complied with in all material
respects;
(p) The Mortgage is a valid, subsisting and enforceable (subject to the
exceptions set forth in clause (l) above) first lien on the Mortgaged Property,
including all buildings on the Mortgaged Property and all installations and
mechanical, electrical, plumbing, heating and air conditioning systems affixed
to such buildings, and all additions, alterations and replacements made at any
time with respect to the foregoing securing the Mortgage Note's original
principal balance. The Mortgage and the Mortgage Note do not contain any
evidence of any other security interest or other interest or right thereto. Such
lien is free and clear of all adverse claims, liens and encumbrances having
priority over the first lien of the Mortgage subject only to permitted
encumbrances set forth in clause (l)(1), (2) and (3) herein. Any security
agreement, chattel mortgage or equivalent document related to and delivered in
connection with the Mortgage Loan establishes and creates a valid, subsisting
and enforceable first lien and first priority security interest on the property
described therein;
(q) The Mortgage Note and the related Mortgage are original and genuine
and each is the legal, valid and binding obligation of the maker thereof,
enforceable in all respects in accordance with its terms subject to bankruptcy,
insolvency and other laws of general application affecting the rights of
creditors, and the Seller has taken all action necessary to transfer such rights
of enforceability to the Purchaser. All parties to the Mortgage Note and the
Mortgage had the legal capacity to enter into the Mortgage Loan and to execute
and deliver the Mortgage Note and the Mortgage. The Mortgage Note and the
Mortgage have been duly and properly executed by such parties. The proceeds of
the Mortgage Loan have been fully disbursed and there is no requirement for
future advances thereunder, and any and all requirements as to completion of any
on-site or off-site improvements and as to disbursements of any escrow funds
therefor have been complied with;
(r) The Mortgage Loan is covered by an ALTA lender's title insurance
policy or other generally acceptable form of policy of insurance, issued by a
title insurer qualified to do business in the jurisdiction where the Mortgaged
Property is located, insuring (subject to the exceptions contained in (l)(1),
(2) and (3) above) the originator or CMC, as applicable, and their respective
successors and assigns, as to the first priority lien of the Mortgage in the
original principal amount of the Mortgage Loan. The originator or CMC, as
applicable, is the sole insured of such lender's title insurance policy, such
lender's title insurance policy is in full force and effect and will be in full
force and effect upon the consummation of the transactions contemplated by the
Pooling and Servicing Agreement and this Agreement and will inure to the benefit
of the Purchaser and its
C-3
<PAGE>
assigns without any further act. No claims have been made under such lender's
title insurance policy, and no prior holder of the related Mortgage has done, by
act or omission, anything which would impair the coverage of such lender's title
insurance policy;
(s) Each Mortgage Loan was originated by or for CMC. Each Mortgage Loan
complies in all material respects with all the terms, conditions and
requirements of CMC's underwriting standards in effect at the time of
originations of such Mortgage Loan; provided, that certain Mortgage Loans may
have characteristics outside of such underwriting guidelines where compensating
factors are present acceptable to the mortgage banking industry. The Mortgage
Notes and Mortgages are on uniform Fannie Mae/Freddie Mac instruments or are on
forms acceptable to Fannie Mae or Freddie Mac. The Mortgage Loan bears interest
at a fixed rate as set forth in the Mortgage Loan Schedule, and Monthly Payments
under the Mortgage Note are due and payable on the first day of each month. The
Mortgage Loan contains the usual and enforceable provisions of the originator at
the time of origination for the acceleration of the payment of the unpaid
principal amount if the related Mortgaged Property is sold without the prior
consent of the mortgagee thereunder;
(t) The related Mortgage contains enforceable provisions such as to
render the rights and remedies of the holder thereof adequate for the
realization against the Mortgaged Property of the benefits of the security
provided thereby, including, (1) in the case of a Mortgage designated as a deed
of trust, by trustee's sale, and (2) otherwise by judicial foreclosure. There is
no homestead or other exemption available to the Mortgagor which would interfere
with the right to sell the Mortgaged Property at a trustee's sale or the right
to foreclose the Mortgage;
(u) If the Mortgage constitutes a deed of trust, a trustee, duly
qualified if required under applicable law to act as such, has been properly
designated and currently so serves and is named in the Mortgage, and no fees or
expenses are or will become payable by the Purchaser to the trustee under the
deed of trust, except in connection with a trustees sale or attempted sale after
default by the Mortgagor;
(v) The Mortgage File contains an appraisal of the related Mortgaged
Property made and signed prior to the final approval of the mortgage loan
application by a Qualified Appraiser, approved by CMC or the originator thereof,
as the case may be. The appraisal is in a form generally acceptable to Fannie
Mae or Freddie Mac;
(w) The related Mortgage Note is not and has not been secured by any
collateral except the lien of the corresponding Mortgage and the security
interest of any applicable security agreement or chattel mortgage referred to
above and such collateral does not serve as security for any other obligation;
(x) The Mortgagor has received all disclosure materials required by
applicable law with respect to the making of such mortgage loans;
(y) Each Mortgage Loan has an original term to stated maturity of not
less than 20 years and not more than 30 years and, in each case, with interest
payable in arrears on the first day of each
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<PAGE>
month. No Mortgage Loan contains terms or provisions which would result in
negative amortization;
(z) Each of the Mortgaged Properties consists of a single parcel of
real property with single-family residence erected thereon, or a two- to
four-family dwelling, or an individual condominium unit in a condominium project
or an individual unit in a planned unit development. Any condominium unit or
planned unit development either conforms with applicable Fannie Mae or Freddie
Mac requirements regarding such dwellings or is covering by a waiver confirming
that such condominium unit or planned unit development is acceptable to Fannie
Mae or Freddie Mac or is otherwise "warrantable" with respect thereto;
(aa) The Mortgage Loans were originated with full, alternative or
reduced documentation;
(bb) The Assignment of Mortgage is in recordable form and is acceptable
for recording under the laws of the jurisdiction in which the Mortgaged Property
is located; and
(cc) The originator is either, and each Mortgage Loan was originated
by, (i) a savings and loan association, savings bank, commercial bank, credit
union, insurance company or similar institution which is supervised and examined
by a federal or State authority, (ii) a mortgagee approved by the Secretary of
Housing and Urban Development pursuant to Section 203 and 211 of the National
Housing Act or (iii) a mortgage banker or broker licensed or authorized to do
business in the jurisdiction in which the related Mortgaged Property is located,
applying the same standards and procedures used by the applicable seller in
originating Mortgage Loans directly.
C-5
<PAGE>
EXHIBIT D
REQUEST FOR RELEASE OF DOCUMENTS
[DATE]
To: Norwest Bank Minnesota, National Association,
as Trustee
Norwest Center
Sixth and Marquette
Minneapolis, Minnesota 55479-1026
RE: Pooling and Servicing Agreement dated as of December 1, 1998,
among Structured Asset Mortgage Investments Inc., Cendant Mortgage
Corporation, as Master Servicer and Norwest Bank Minnesota, National
Association, as Trustee, regarding Structured Asset Mortgage Investments
Trust 1998-12, Mortgage Pass-through Certificates, Series 1998-12
------------------------------------------------------------------------
In connection with the administration of the Mortgage Loans held by
you, as Trustee, pursuant to the above-captioned Pooling and Servicing
Agreement, we request the release, and hereby acknowledge receipt, of the
Mortgage File for the Mortgage Loan described below, for the
reason indicated.
Mortgage Loan Number:
- --------------------
Mortgagor Name, Address & Zip Code:
- ----------------------------------
Reason For Requesting Documents (check one):
- -------------------------------
______ 1. Mortgage Paid in Full and proceeds have been
deposited into the Custodial Account
______ 2. Foreclosure
______ 3. Substitution
______ 4. Other Liquidation
______ 5. Nonliquidation
______ 6. Other Reason: ____________________
By:_______________________________
(authorized signer)
Issuer:___________________________
Address:__________________________
Date:_____________________________
D-1
<PAGE>
TRUSTEE
Norwest Bank Minnesota, National Association
Please acknowledge the execution of the above request by your signature and date
below:
______________________ __________________
Signature Date
Documents returned to Trustee:
______________________ __________________
Trustee Date
Date: ______________
___________________________________
[NAME OF MASTER SERVICER]
By: __________________________
Name:
Title:
D-2
<PAGE>
EXHIBIT E
FORM OF AFFIDAVIT PURSUANT TO SECTION 860E(E)(4) OF THE INTERNAL
REVENUE CODE OF 1986, AS AMENDED, AND FOR OTHER PURPOSES
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 Investor] (the
"Investor"), a [savings institution] [corporation] duly organized and existing
under the laws of [the State of__________] [the United States], on behalf of
which he makes this affidavit.
2. That (i) the Investor is not a "disqualified organization" as
defined in Section 860E(e)(5) of the Internal Revenue Code of 1986, as amended
(the "Code"), and will not be a disqualified organization as of [Closing Date]
[date of purchase]; (ii) it is not acquiring the Structured Asset Mortgage
Investments Trust 1998-12, Mortgage Pass-Through Certificates, Series 1998-12,
[Class R-I] [Class R-II] Certificates (the "Residual Certificates") for the
account of a disqualified organization; (iii) it consents to any amendment of
the Pooling and Servicing Agreement that shall be deemed necessary by Structured
Asset Mortgage Investments Inc. (upon advice of counsel) to constitute a
reasonable arrangement to ensure that the Residual Certificates will not be
owned directly or indirectly by a disqualified organization; and (iv) it will
not transfer such Residual Certificates unless (a) it has received from the
transferee an affidavit in substantially the same form as this affidavit
containing these same four representations and (b) as of the time of the
transfer, it does not have actual knowledge that such affidavit is false.
3. That the Investor is one of the following: (i) a citizen or resident
of the United States, (ii) a corporation, partnership or other entity taxable as
such created or organized in or under the laws of the United States or any
political subdivision thereof or (iii) an estate that is subject to U.S. federal
income tax regardless of the source of its income, or (iv) a trust other than a
"foreign trust," as defined in Section 7701(a)(31) of the Code.
4. That the Investor's taxpayer identification number is ___________.
5. That no purpose of the acquisition of the Residual Certificates is
to avoid or impede the assessment or collection of tax.
6. That the Investor understands that, as the holder of the Residual
Certificates, the Investor may incur tax liabilities in excess of any cash flows
generated by such Residual Certificates.
7. That the Investor intends to pay taxes associated with holding the
Residual Certificates as they become due.
E-1
<PAGE>
IN WITNESS WHEREOF, the Investor has caused this instrument to be
executed on its behalf, pursuant to authority of its Board of Directors, by its
[Title of Officer] this ____ day of _____________, 19__.
[NAME OF INVESTOR]
By:___________________________
[Name of Officer]
[Title of Officer]
[Address of Investor for receipt of distributions]
Address of Investor for receipt of tax information:
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 Investor, and acknowledged to me that he
executed the same as his/her free act and deed and the free act and deed of the
Investor.
Subscribed and sworn before me this ___ day of _______, 19__.
NOTARY PUBLIC
COUNTY OF
STATE OF
My commission expires the ___ day of _____________, 19__.
E-2
<PAGE>
EXHIBIT F-1
FORM OF INVESTMENT LETTER
[Date]
[SELLER]
Norwest Bank Minnesota, National Association, as Trustee
Norwest Center
Sixth and Marquette
Minneapolis, Minnesota 55479-1026
Structured Asset Mortgage Investments Inc.
245 Park Avenue
New York, New York 10167
Re: Structured Asset Mortgage Investments Trust 1998-12, Mortgage
Pass-Through Certificates, Series 1998-12 (the "Certificates"), including
the Class B-4, Class B-5 and Class B-6 Certificates (the "Privately
Offered Certificates")
-------------------------------------------------------------------------
Ladies and Gentlemen:
In connection with our purchase of Privately Offered Certificates, we
confirm that:
(i) we understand that the Privately Offered Certificates
are not being registered under the Securities Act of
1933, as amended (the "Act") or any applicable state
securities or "Blue Sky" laws, and are being sold to
us in a transaction that is exempt from the
registration requirements of such laws;
(ii) any information we desired concerning the
Certificates, including the Privately Offered
Certificates, the trust in which the Certificates
represent the entire beneficial ownership interest
(the "Trust") or any other matter we deemed relevant
to our decision to purchase Privately Offered
Certificates has been made available to us;
(iii) we are able to bear the economic risk of investment
in Privately Offered Certificates; we are an
institutional "accredited investor" as defined in
Section 501(a) of Regulation D promulgated under the
Act and a sophisticated institutional investor;
F-1-1
<PAGE>
(iv) we are acquiring Privately Offered Certificates for
our own account, not as nominee for any other person,
and not with a present view to any distribution or
other disposition of the Privately Offered
Certificates;
(v) we agree the Privately Offered Certificates must be
held indefinitely by us (and may not be sold,
pledged, hypothecated or in any way disposed of)
unless subsequently registered under the Act and any
applicable state securities or "Blue Sky" laws or an
exemption from the registration requirements of the
Act and any applicable state securities or "Blue Sky"
laws is available;
(vi) we agree that in the event that at some future time
we wish to dispose of or exchange any of the
Privately Offered Certificates (such disposition or
exchange not being currently foreseen or
contemplated), we will not transfer or exchange any
of the Privately Offered Certificates unless:
(A) (1) the sale is to an Eligible Purchaser
(as defined below), (2) if required by the Pooling
and Servicing Agreement (as defined below) a letter
to substantially the same effect as either this
letter or, if the Eligible Purchaser is a Qualified
Institutional Buyer as defined under Rule 144A of the
Act, the Rule 144A and Related Matters Certificate in
the form attached to the Pooling and Servicing
Agreement (as defined below) (or such other
documentation as may be acceptable to the Trustee) is
executed promptly by the purchaser and delivered to
the addressees hereof and (3) all offers or
solicitations in connection with the sale, whether
directly or through any agent acting on our behalf,
are limited only to Eligible Purchasers and are not
made by means of any form of general solicitation or
general advertising whatsoever; and
(B) if the Privately Offered Certificate is
not registered under the Act (as to which we
acknowledge you have no obligation), the Privately
Offered Certificate is sold in a transaction that
does not require registration under the Act and any
applicable state securities or "blue sky" laws and,
if Norwest Bank Minnesota, National Association (the
"Trustee") so requests, a satisfactory Opinion of
Counsel is furnished to such effect, which Opinion of
Counsel shall be an expense of the transferor or the
transferee;
(vii) we agree to be bound by all of the terms (including
those relating to restrictions on transfer) of the
Pooling and Servicing, pursuant to which the Trust
was formed; we have reviewed carefully and understand
the terms of the Pooling and Servicing Agreement;
(viii) we either: (i) are not acquiring the Privately
Offered Certificate 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 (ii) are
providing as such other
F-1-2
<PAGE>
evidence acceptable to the Trustee to the effect that
the proposed transfer and/or holding of a Privately
Offered 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, PTE 91-38, PTE 90-1, PTE 95-60 or PTE 96-23
and (II) will not give rise to any additional
fiduciary duties on the part of either Master
Servicer or the Trustee.
(ix) We understand that each of the Privately Offered
Certificates bears, and will continue to bear, a
legend to substantiate the following effect: "THIS
CERTIFICATE HAS NOT BEEN AND WILL NOT BE REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
"SECURITIES ACT"), OR UNDER ANY STATE SECURITIES
LAWS. THE HOLDER HEREOF, BY PURCHASING THIS
CERTIFICATE, AGREES THAT THIS CERTIFICATE MAY BE
REOFFERED, RESOLD, PLEDGED OR OTHERWISE TRANSFERRED
ONLY IN COMPLIANCE WITH THE SECURITIES ACT AND OTHER
APPLICABLE LAWS AND ONLY (1) PURSUANT TO RULE 144A
UNDER THE SECURITIES ACT ("RULE 144A") TO A PERSON
THAT THE HOLDER REASONABLY BELIEVES IS A QUALIFIED
INSTITUTIONAL BUYER WITHIN THE MEANING OF RULE 144A
(A "QIB"), PURCHASING FOR ITS OWN ACCOUNT OR A QIB
PURCHASING FOR THE ACCOUNT OF A QIB, WHOM THE HOLDER
HAS INFORMED, IN EACH CASE, THAT THE REOFFER, RESALE,
PLEDGE OR OTHER TRANSFER IS BEING MADE IN RELIANCE ON
RULE 144A, (2) PURSUANT TO AN EXEMPTION FROM
REGISTRATION PROVIDED BY RULE 144 UNDER THE
SECURITIES ACT (IF AVAILABLE) OR (3) IN CERTIFICATED
FORM TO AN "INSTITUTIONAL ACCREDITED INVESTOR" WITHIN
THE MEANING THEREOF IN RULE 501(a)(1), (2), (3) or
(7) OF REGULATION D UNDER THE ACT OR ANY ENTITY IN
WHICH ALL OF THE EQUITY OWNERS COME WITHIN SUCH
PARAGRAPHS PURCHASING NOT FOR DISTRIBUTION IN
VIOLATION OF THE SECURITIES ACT, SUBJECT TO (A) THE
RECEIPT BY THE TRUSTEE OF A LETTER SUBSTANTIALLY IN
THE FORM PROVIDED IN THE AGREEMENT AND (B) THE
RECEIPT BY THE TRUSTEE OF SUCH OTHER EVIDENCE
ACCEPTABLE TO THE TRUSTEE THAT SUCH REOFFER, RESALE,
PLEDGE OR TRANSFER IS IN COMPLIANCE WITH THE
SECURITIES ACT AND OTHER APPLICABLE LAWS OR IN EACH
CASE IN ACCORDANCE WITH ALL APPLICABLE SECURITIES
LAWS OF THE UNITED STATES AND ANY OTHER APPLICABLE
JURISDICTION. 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,
F-1-3
<PAGE>
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, PTE 91-38, PTE 90-1, PTE 95-60 OR PTE
96-23 AND (II) WILL NOT GIVE RISE TO ANY ADDITIONAL
FIDUCIARY DUTIES ON THE PART OF EITHER MASTER
SERVICER OR THE TRUSTEE," WHICH WILL BE DEEMED
REPRESENTED BY AN OWNER OF A BOOK-ENTRY CERTIFICATE
OR A GLOBAL CERTIFICATE AND WILL BE EVIDENCED BY A
REPRESENTATION TO SUCH EFFECT BY OR ON BEHALF OF A
HOLDER OF A PRIVATE CERTIFICATE."
"ELIGIBLE PURCHASER" means a corporation, partnership or other entity
which we have reasonable grounds to believe and do believe (i) can make
representations with respect to itself to substantially the same effect as the
representations set forth herein, and (ii) is either a Qualified Institutional
Buyer as defined under Rule 144A of the Act or an institutional "Accredited
Investor" as defined under Rule 501 of the Act.
Terms not otherwise defined herein shall have the meanings assigned to
them in the Pooling and Servicing Agreement dated as of December 1, 1998 among
Structured Asset Mortgage Investments Inc., Cendant Mortgage Corporation, as
Master Servicer and Norwest Bank Minnesota, National Association, as Trustee
(the "Pooling and Servicing Agreement").
If the Purchaser proposes that its Certificates be registered in the
name of a nominee on its behalf, the Purchaser has identified such nominee
below, and has caused such nominee to complete the Nominee Acknowledgment at the
end of this letter.
Name of Nominee (if any):___________________
F-1-4
<PAGE>
IN WITNESS WHEREOF, this document has been executed by the undersigned
who is duly authorized to do so on behalf of the undersigned Eligible Purchaser
on the ____ day of ________, 19__.
Very truly yours,
[PURCHASER]
By:______________________________
(Authorized Officer)
[By:_____________________________
Attorney-in-fact]
F-1-5
<PAGE>
Nominee Acknowledgment
The undersigned hereby acknowledges and agrees that as to the
Certificates being registered in its name, the sole beneficial owner thereof is
and shall be the Purchaser identified above, for
whom the undersigned is acting as nominee.
[NAME OF NOMINEE]
By:_________________________________
(Authorized Officer)
[By:________________________________
Attorney-in-fact]
F-1-6
<PAGE>
EXHIBIT F-2
FORM OF RULE 144A AND RELATED MATTERS CERTIFICATE
[SELLER]
Norwest Bank Minnesota, National Association, as Trustee
Norwest Center
Sixth and Marquette
Minneapolis, Minnesota 55479-1026
Structured Asset Mortgage Investments Inc.
245 Park Avenue
New York, New York 10167
Re: Structured Asset Mortgage Investments Trust 1998-12,
Mortgage Pass-Through Certificates, Series 1998-12, Class
B-4, Class B-5, Class B-6 Certificates (the "Privately Offered
Certificates")
--------------------------------------------------------------
Ladies and Gentlemen:
In connection with our purchase of Privately Offered Certificates, the
undersigned certifies to each of the parties to whom this letter is addressed
that it is a qualified institutional buyer (as defined in Rule 144A under the
Securities Act of 1933, as amended (the "Act")) as follows:
1. It owned and/or invested on a discretionary basis eligible securities
(excluding affiliate's securities, bank deposit notes and CD's, loan
participations, repurchase agreements, securities owned but subject to
a repurchase agreement and swaps), as described below:
Date: _____________, 19__ (must be on or after the close of its most
recent fiscal year)
Amount: $_________________; and
2. The dollar amount set forth above is:
a. greater than $100 million and the undersigned is one of the
following entities:
(1) |_| an insurance company as defined in Section 2(13) of the
Act; or1
(2) |_| an investment company registered under the Investment
Company Act or any business development company as
defined in Section 2(a)(48) of the Investment Company
Act of 1940; or -------- 1 A purchase by an insurance
company for one or more of its separate accounts, as
defined by Section 2(a)(37) of the Investment Company
Act of 1940, which are neither registered nor required
to be registered thereunder, shall be deemed to be a
purchase for the account of such insurance company.
F-2-1
<PAGE>
(3) |_| 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; or
(4) |_| a plan (i) established and maintained by a state, its
political subdivisions, or any agency or instrumentality
of a state or its political subdivisions, the laws of
which permit the purchase of securities of this type,
for the benefit of its employees and (ii) the governing
investment guidelines of which permit the purchase of
securities of this type; or
(5) |_| a business development company as defined in Section
202(a)(22) of the Investment Advisers Act of 1940; or
(6) |_| a corporation (other than a U.S. bank, savings and loan
association or equivalent foreign institution),
partnership, Massachusetts or similar business trust, or
an organization described in Section 501(c)(3) of the
Internal Revenue Code; or
(7) |_| a U.S. bank, savings and loan association or equivalent
foreign institution, which has an audited net worth of
at least $25 million as demonstrated in its latest
annual financial statements; or
(8) |_| an investment adviser registered under the Investment
Advisers Act; or
b. |_| greater than $10 million, and the undersigned is a
broker-dealer registered with the SEC; or
c. |_| less than $10 million, and the undersigned is a
broker-dealer registered with the SEC and will only purchase
Rule 144A securities in transactions in which it acts as a
riskless principal (as defined in Rule 144A); or
d. |_| less than $100 million, and the undersigned is an
investment company registered under the Investment Company Act
of 1940, which, together with one or more registered
investment companies having the same or an affiliated
investment adviser, owns at least $100 million of eligible
securities; or
e. |_| less than $100 million, and the undersigned is an
entity, all the equity owners of which are qualified
institutional buyers.
The undersigned further certifies that it is purchasing a Privately
Offered Certificate for its own account or for the account of others that
independently qualify as "Qualified Institutional Buyers" as defined in Rule
144A. It is aware that the sale of the Privately Offered Certificates is being
made in reliance on its continued compliance with Rule 144A. It is aware that
the transferor may rely on the exemption from the provisions of Section 5 of the
Act provided by Rule 144A. The undersigned understands that the Privately
Offered Certificates may be resold, pledged or transferred only to (i) 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 in Rule
144A, or (ii) an institutional "accredited
F-2-2
<PAGE>
investor," as such term is defined under Rule 501 of the Act in a transaction
that otherwise does not constitute a public offering.
The undersigned agrees that if at some future time it wishes to dispose
of or exchange any of the Privately Offered Certificates, it will not transfer
or exchange any of the Privately Offered Certificates to a Qualified
Institutional Buyer without first obtaining a Rule 144A and Related Matters
Certificate in the form hereof from the transferee and delivering such
certificate to the addressees hereof. Prior to making any transfer of Privately
Offered Certificates, if the proposed Transferee is an institutional "accredited
investor," the transferor shall obtain from the transferee and deliver to the
addressees hereof an Investment Letter in the form attached to the Pooling and
Servicing Agreement dated as of December 1, 1998 among Structured Asset Mortgage
Investments Inc., Cendant Mortgage Corporation as Master Servicer and Norwest
Bank Minnesota, National Association as Trustee, pursuant to which the
Certificates were issued.
The undersigned certifies that it either: (i) is not acquiring the
Privately Offered Certificate 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 (ii) is
providing such other evidence acceptable to the Trustee to the effect that the
proposed transfer and/or holding of a Privately Offered 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, PTE 91-38, PTE 90-1, PTE 95-60
or PTE 96-23 and (II) will not give rise to any additional fiduciary duties on
the part of either Master Servicer or the Trustee.
If the Purchaser proposes that its Certificates be registered
in the name of a nominee on its behalf, the Purchaser has identified such
nominee below, and has caused such nominee to complete the Nominee
Acknowledgment at the end of this letter.
F-2-3
<PAGE>
Name of Nominee (if any):___________________
IN WITNESS WHEREOF, this document has been executed by the undersigned
who is duly authorized to do so on behalf of the undersigned Eligible Purchaser
on the ____ day of ________, 19__.
Very truly yours,
[PURCHASER]
By:_________________________________
(Authorized Officer)
[By:________________________________
Attorney-in-fact]
F-2-4
<PAGE>
Nominee Acknowledgment
The undersigned hereby acknowledges and agrees that as to the
Certificates being registered in its name, the sole beneficial owner thereof is
and shall be the Purchaser identified above, for whom the undersigned is acting
as nominee.
[NAME OF NOMINEE]
By: _________________________
(Authorized Officer)
[By:__________________________
Attorney-in-fact]
F-2-5
<PAGE>
EXHIBIT G
FORM OF INITIAL CERTIFICATION
Date:_______________________
Cendant Mortgage Corporation, as Master Servicer
6000 Atrium Way
Mt. Laurel, New Jersey 08054
Structured Asset Mortgage Investments Inc.
245 Park Avenue
New York, New York 10167
Re: Pooling and Servicing Agreement dated as of December 1, 1998,
among Structured Asset Mortgage Investments Inc., as seller,
Cendant Mortgage Corporation, as master servicer and Norwest Bank
Minnesota, National Association, as trustee, regarding Structured
Asset Mortgage Investments Trust 1998-12, Mortgage Pass-Through
Certificates, Series 1998-12
-----------------------------------------------------------------
Ladies and Gentlemen:
In accordance with Section 2.02 of the above-captioned Pooling and
Servicing Agreement, the undersigned, as Trustee, hereby certifies that it has
received a Mortgage File (which contains an original Mortgage Note or Lost Note
Affidavit) to the extent required in Section 2.01 of the Pooling and Servicing
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 Pooling and Servicing
Agreement.
NORWEST BANK MINNESOTA, NATIONAL
ASSOCIATION, as Trustee
By:__________________________________
Name:
Title:
G-1
<PAGE>
EXHIBIT H
FORM OF FINAL CERTIFICATION
Date:________________________
Cendant Mortgage Corporation, as Master Servicer
6000 Atrium Way
Mt. Laurel, New Jersey 08054
Structured Asset Mortgage Investments Inc.
245 Park Avenue
New York, New York 10167
Re: Pooling and Servicing Agreement dated as of December 1, 1998, among
Structured Asset Mortgage Investments Inc., as seller, Cendant Mortgage
Corporation, as master servicer and Norwest Bank Minnesota, National
Association, as trustee, regarding Structured Asset Mortgage
Investments Trust 1998-12, Mortgage Pass-through Certificates, Series
1998-12
-----------------------------------------------------------------------
Ladies and Gentlemen:
In accordance with Section 2.02 of the above-captioned Pooling and Servicing
Agreement, the undersigned, hereby certifies that, except as noted on the
Schedule of Exceptions attached hereto, for each Mortgage Loan listed on the
Mortgage Loan Schedule (other than any Mortgage Loan paid in full or listed on
the attachment hereto), it has received a complete Mortgage File which includes
the documents required to be included in the Mortgage File as set forth in the
Pooling and Servicing Agreement.
The undersigned has made no independent examination of any documents contained
in each Mortgage File beyond the review specifically required in the
above-referenced Pooling and Servicing Agreement. The undersigned makes no
representation as to: (i) the validity, legality, sufficiency, enforceability or
genuineness of any documents contained in any Mortgage File for any of the
Mortgage Loans listed on the Mortgage Loan Schedule to the Pooling and Servicing
Agreement, (ii) the collectability, insurability, effectiveness or suitability
of any such Mortgage Loan or (iii) whether any Mortgage File should include any
flood insurance policy, any rider, addenda, surety or guaranty agreement, power
of attorney, buy down agreement, assumption agreement, modification agreement,
written assurance or substitution agreement.
H-2
<PAGE>
Capitalized words and phrases used herein shall have the respective meanings
assigned to them in the above-captioned Pooling and Servicing Agreement.
NORWEST BANK MINNESOTA, NATIONAL
ASSOCIATION, as Trustee
By:_________________________________
Name:
Title:
H-3
<PAGE>
EXHIBIT I
PLANNED PRINCIPAL AMOUNTS AND TARGETED PRINCIPAL AMOUNTS
PLANNED PRINCIPAL AMOUNTS
<TABLE>
<CAPTION>
Class A-1 Class A-2 Class A-3
--------- --------- ---------
<S> <C> <C> <C>
Initial Balance $ 11,195,000.00 $ 20,107,000.00 $ 55,214,000.00
January, 1999 11,195,000.00 20,107,000.00 55,214,000.00
February, 1999 11,195,000.00 20,107,000.00 55,214,000.00
March, 1999 11,195,000.00 20,107,000.00 55,214,000.00
April, 1999 11,195,000.00 20,107,000.00 55,214,000.00
May, 1999 11,195,000.00 20,107,000.00 55,214,000.00
June, 1999 11,195,000.00 20,107,000.00 55,214,000.00
July, 1999 11,195,000.00 20,107,000.00 55,214,000.00
August, 1999 11,195,000.00 20,107,000.00 55,214,000.00
September, 1999 11,195,000.00 20,107,000.00 55,214,000.00
October, 1999 11,195,000.00 20,107,000.00 55,214,000.00
November, 1999 11,195,000.00 20,107,000.00 55,214,000.00
December, 1999 11,195,000.00 20,107,000.00 55,214,000.00
January, 2000 11,195,000.00 20,107,000.00 55,214,000.00
February, 2000 11,195,000.00 20,107,000.00 55,214,000.00
March, 2000 11,195,000.00 20,107,000.00 55,214,000.00
April, 2000 11,195,000.00 20,107,000.00 55,214,000.00
May, 2000 11,195,000.00 20,107,000.00 55,214,000.00
June, 2000 11,195,000.00 20,107,000.00 55,214,000.00
July, 2000 11,195,000.00 20,107,000.00 55,214,000.00
August, 2000 11,195,000.00 20,107,000.00 55,214,000.00
September, 2000 11,195,000.00 20,107,000.00 55,214,000.00
October, 2000 11,195,000.00 20,107,000.00 55,214,000.00
November, 2000 11,195,000.00 20,107,000.00 55,214,000.00
December, 2000 11,195,000.00 20,107,000.00 55,214,000.00
January, 2001 9,596,362.16 20,107,000.00 55,214,000.00
February, 2001 7,914,027.38 20,107,000.00 55,214,000.00
March, 2001 6,186,533.70 20,107,000.00 55,214,000.00
April, 2001 4,414,837.10 20,107,000.00 55,214,000.00
May, 2001 2,599,919.88 20,107,000.00 55,214,000.00
June, 2001 797,042.17 20,107,000.00 55,214,000.00
July, 2001 0.00 19,113,126.70 55,214,000.00
August, 2001 0.00 17,334,096.72 55,214,000.00
September, 2001 0.00 15,566,875.95 55,214,000.00
October, 2001 0.00 13,811,388.62 55,214,000.00
November, 2001 0.00 12,067,559.46 55,214,000.00
December, 2001 0.00 10,335,313.70 55,214,000.00
January, 2002 0.00 8,614,577.02 55,214,000.00
February, 2002 0.00 6,905,275.65 55,214,000.00
March, 2002 0.00 5,207,336.24 55,214,000.00
I-1
<PAGE>
April, 2002 0.00 3,520,685.97 55,214,000.00
May, 2002 0.00 1,845,252.46 55,214,000.00
June, 2002 0.00 180,963.82 55,214,000.00
July, 2002 0.00 0.00 53,741,748.63
August, 2002 0.00 0.00 52,099,535.94
September, 2002 0.00 0.00 50,468,255.26
October, 2002 0.00 0.00 48,847,836.56
November, 2002 0.00 0.00 47,238,210.27
December, 2002 0.00 0.00 45,639,307.29
January, 2003 0.00 0.00 44,051,058.95
February, 2003 0.00 0.00 42,473,397.03
March, 2003 0.00 0.00 40,906,253.79
April, 2003 0.00 0.00 39,349,561.89
May, 2003 0.00 0.00 37,803,254.47
June, 2003 0.00 0.00 36,267,265.09
July, 2003 0.00 0.00 34,741,527.74
August, 2003 0.00 0.00 33,225,976.85
September, 2003 0.00 0.00 31,720,547.27
October, 2003 0.00 0.00 30,225,174.31
November, 2003 0.00 0.00 28,739,793.67
December, 2003 0.00 0.00 27,264,341.48
January, 2004 0.00 0.00 25,883,640.35
February, 2004 0.00 0.00 24,512,575.28
March, 2004 0.00 0.00 23,151,083.87
April, 2004 0.00 0.00 21,799,104.15
May, 2004 0.00 0.00 20,456,574.56
June, 2004 0.00 0.00 19,123,433.93
July, 2004 0.00 0.00 17,799,621.49
August, 2004 0.00 0.00 16,496,843.86
September, 2004 0.00 0.00 15,240,716.76
October, 2004 0.00 0.00 14,029,773.85
November, 2004 0.00 0.00 12,862,593.17
December, 2004 0.00 0.00 11,737,795.83
January, 2005 0.00 0.00 10,757,520.02
February, 2005 0.00 0.00 9,814,750.79
March, 2005 0.00 0.00 8,908,266.28
April, 2005 0.00 0.00 8,036,882.30
May, 2005 0.00 0.00 7,199,451.15
June, 2005 0.00 0.00 6,394,860.57
July, 2005 0.00 0.00 5,622,032.65
August, 2005 0.00 0.00 4,879,922.79
September, 2005 0.00 0.00 4,167,518.68
October, 2005 0.00 0.00 3,483,839.37
November, 2005 0.00 0.00 2,827,934.29
December, 2005 0.00 0.00 2,198,882.34
January, 2006 0.00 0.00 1,774,280.38
I-1
<PAGE>
February, 2006 0.00 0.00 1,369,261.82
March, 2006 0.00 0.00 983,114.92
April, 2006 0.00 0.00 615,151.44
May, 2006 0.00 0.00 264,705.90
June, 2006 and 0.00 0.00 0.00
thereafter
</TABLE>
TARGETED PRINCIPAL AMOUNTS
<TABLE>
<CAPTION>
Distribution Date Class A-4 Class A5-II Class A6-II
- ----------------- --------- ----------- -----------
<S> <C> <C> <C>
Initial Balance 107,562,000.00 48,337,500.00 1,933,500.00
January, 1999 106,829,768.75 48,609,398.44 1,944,375.94
February, 1999 105,979,551.61 48,882,826.30 1,955,313.05
March, 1999 105,011,576.82 49,157,792.20 1,966,311.69
April, 1999 103,926,119.93 49,434,304.78 1,977,372.19
May, 1999 102,723,604.44 49,712,372.75 1,988,494.91
June, 1999 101,404,602.16 49,992,004.84 1,999,680.19
July, 1999 99,969,833.24 50,273,209.87 2,010,928.39
August, 1999 98,420,165.89 50,555,996.68 2,022,239.86
September, 1999 96,756,615.78 50,840,374.16 2,033,614.96
October, 1999 94,980,345.13 51,126,351.26 2,045,054.05
November, 1999 93,092,661.50 51,413,936.99 2,056,557.48
December, 1999 91,095,016.24 51,703,140.38 2,068,125.61
January, 2000 88,989,002.62 51,993,970.55 2,079,758.82
February, 2000 86,776,353.67 52,286,436.63 2,091,457.46
March, 2000 84,458,939.69 52,580,547.84 2,103,221.91
April, 2000 82,038,765.45 52,876,313.42 2,115,052.53
May, 2000 79,517,967.06 53,173,742.68 2,126,949.70
June, 2000 76,898,808.63 53,472,844.99 2,138,913.80
July, 2000 74,183,678.55 53,773,629.74 2,150,945.19
August, 2000 71,375,085.49 54,076,106.41 2,163,044.25
September, 2000 68,475,654.18 54,380,284.51 2,175,211.38
October, 2000 65,488,120.89 54,686,173.61 2,187,446.94
November, 2000 62,415,328.60 54,993,783.33 2,199,751.33
December, 2000 59,260,222.08 55,303,123.36 2,212,124.93
January, 2001 57,624,480.34 55,614,203.43 2,224,568.13
February, 2001 55,996,294.71 55,927,033.33 2,237,081.33
March, 2001 54,340,344.64 56,241,622.89 2,249,664.91
April, 2001 52,658,971.09 56,557,982.02 2,262,319.28
May, 2001 50,954,562.05 56,876,120.67 2,275,044.82
June, 2001 49,281,035.22 57,196,048.85 2,287,841.95
July, 2001 47,637,843.42 57,517,776.62 2,300,711.06
August, 2001 46,024,447.21 57,841,314.11 2,313,652.56
September, 2001 44,440,314.89 58,166,671.51 2,326,666.86
October, 2001 42,884,922.33 58,493,859.03 2,339,754.36
November, 2001 41,357,752.87 58,822,886.99 2,352,915.48
I-1
<PAGE>
December, 2001 39,858,297.20 59,153,765.73 2,366,150.63
January, 2002 38,386,053.34 59,486,505.66 2,379,460.22
February, 2002 36,940,526.38 59,821,117.26 2,392,844.69
March, 2002 35,521,228.53 60,157,611.04 2,406,304.44
April, 2002 34,127,678.96 60,495,5997.6 2,419,839.90
May, 2002 32,759,403.67 60,836,287.59 2,433,451.50
June, 2002 31,415,935.45 61,178,491.71 2,447,139.66
July, 2002 30,096,813.74 61,522,620.72 2,460,904.82
August, 2002 28,801,584.56 61,868,685.46 2,474,747.41
September, 2002 27,529,800.41 62,216,696.82 2,488,667.87
October, 2002 26,281,020.18 62,566,665.74 2,502,666.63
November, 2002 25,054,809.06 62,918,603.23 2,516,744.13
December, 2002 23,850,738.40 63,272,520.38 2,530,900.81
January, 2003 22,668,385.73 63,628,428.30 2,545,137.13
February, 2003 21,507,334.58 63,986,338.21 2,559,453.52
March, 2003 20,367,174.41 64,346,261.37 2,573,850.45
April, 2003 19,247,500.59 64,708,209.09 2,588,328.36
May, 2003 18,147,914.20 65,072,192.76 2,602,887.71
June, 2003 17,068,022.04 65,438,223.85 2,617,528.95
July, 2003 16,007,436.54 65,806,313.86 2,632,252.55
August, 2003 14,965,775.63 66,176,474.37 2,647,058.97
September, 2003 13,942,662.74 66,548,717.04 2,661,948.68
October, 2003 12,937,726.61 66,923,053.57 2,676,922.14
November, 2003 11,950,601.31 67,299,495.75 2,691,979.83
December, 2003 10,980,926.12 67,678,055.41 2,707,122.21
January, 2004 9,985,677.24 68,058,744.47 2,722,349.77
February, 2004 9,007,061.01 68,441,574.91 2,737,662.99
March, 2004 8,044,732.11 68,826,558.77 2,753,062.35
April, 2004 7,098,350.11 69,213,708.16 2,768,548.32
May, 2004 6,167,579.44 69,603,035.27 2,784,121.41
June, 2004 5,252,089.29 69,994,552.35 2,799,782.09
July, 2004 4,351,553.60 70,388,271.70 2,815,530.86
August, 2004 3,453,883.94 70,784,205.73 2,831,368.22
September, 2004 2,533,087.76 71,182,366.89 2,847,294.67
October, 2004 1,590,259.48 71,582,767.70 2,863,310.70
November, 2004 626,453.96 71,985,420.77 2,879,416.83
December, 2004 0.00 72,046,769.31 2,881,870.77
January, 2005 0.00 71,402,976.97 2,856,119.08
February, 2005 0.00 70,746,133.65 2,829,845.35
March, 2005 0.00 70,077,093.14 2,803,083.73
April, 2005 0.00 69,396,677.38 2,775,867.10
May, 2005 0.00 68,705,677.59 2,748,227.11
June, 2005 0.00 68,004,855.17 2,720,194.21
July, 2005 0.00 67,294,942.74 2,691,797.71
August, 2005 0.00 66,576,645.05 2,663,065.80
September, 2005 0.00 65,850,639.89 2,634,025.59
I-1
<PAGE>
October, 2005 0.00 65,117,579.79 2,604,703.15
November, 2005 0.00 64,378,088.87 2,575,123.54
December, 2005 0.00 63,632,771.58 2,545,310.85
January, 2006 0.00 62,733,957.79 2,509,358.30
February, 2006 0.00 61,835,366.87 2,473,414.66
March, 2006 0.00 60,937,415.14 2,437,496.59
April, 2006 0.00 60,040,500.04 2,401,619.99
May, 2006 0.00 59,145,000.75 2,365,800.02
June, 2006 0.00 58,185,062.39 2,327,402.49
July, 2006 0.00 56,988,348.48 2,279,533.93
August, 2006 0.00 55,809,133.88 2,232,365.35
September, 2006 0.00 54,647,171.98 2,185,886.87
October, 2006 0.00 53,502,219.61 2,140,088.78
November, 2006 0.00 52,374,036.92 2,094,961.47
December, 2006 0.00 51,262,387.41 2,050,495.49
January, 2007 0.00 50,187,850.91 2,007,514.03
February, 2007 0.00 49,128,924.23 1,965,156.96
March, 2007 0.00 48,085,387.41 1,923,415.49
April, 2007 0.00 47,057,023.55 1,882,280.94
May, 2007 0.00 46,043,618.75 1,841,744.75
June, 2007 0.00 45,044,962.08 1,801,798.48
July, 2007 0.00 44,060,845.52 1,762,433.82
August, 2007 0.00 43,091,063.95 1,723,642.56
September, 2007 0.00 42,135,415.08 1,685,416.61
October, 2007 0.00 41,193,699.41 1,647,747.98
November, 2007 0.00 40,265,720.24 1,610,628.81
December, 2007 0.00 39,351,283.57 1,574,051.34
January, 2008 0.00 38,468,102.60 1,538,724.10
February, 2008 0.00 37,597,586.62 1,503,903.46
March, 2008 0.00 36,739,559.27 1,469,582.37
April, 2008 0.00 35,893,846.62 1,435,753.86
May, 2008 0.00 35,060,277.10 1,402,411.08
June, 2008 0.00 34,238,681.50 1,369,547.26
July, 2008 0.00 33,428,892.95 1,337,155.72
August, 2008 0.00 32,630,746.86 1,305,229.88
September, 2008 0.00 31,844,080.87 1,273,763.24
October, 2008 0.00 31,068,734.88 1,242,749.40
November, 2008 0.00 30,304,550.97 1,212,182.04
December, 2008 0.00 29,551,373.41 1,182,054.94
January, 2009 0.00 28,809,048.59 1,152,361.95
February, 2009 0.00 28,077,425.00 1,123,097.01
March, 2009 0.00 27,356,353.23 1,094,254.14
April, 2009 0.00 26,645,685.92 1,065,827.45
May, 2009 0.00 25,945,277.73 1,037,811.12
June, 2009 0.00 25,254,985.30 1,010,199.42
July, 2009 0.00 24,574,667.25 982,986.70
I-1
<PAGE>
August, 2009 0.00 23,904,184.16 956,167.38
September, 2009 0.00 23,243,398.51 929,735.95
October, 2009 0.00 22,592,174.65 903,687.00
November, 2009 0.00 21,950,378.84 878,015.17
December, 2009 0.00 21,317,879.13 852,715.18
January, 2010 0.00 20,694,545.44 827,781.83
February, 2010 0.00 20,080,249.42 803,209.99
March, 2010 0.00 19,474,864.52 778,994.59
April, 2010 0.00 18,878,265.91 755,130.65
May, 2010 0.00 18,290,330.50 731,613.23
June, 2010 0.00 17,710,936.88 708,437.48
July, 2010 0.00 17,139,965.31 685,598.62
August, 2010 0.00 16,577,297.70 663091.92
September, 2010 0.00 16,022,817.59 640,912.72
October, 2010 0.00 15,476,410.11 619,056.42
November, 2010 0.00 14,937,961.98 597,518.49
December, 2010 0.00 14,407,361.49 576,294.47
January, 2011 0.00 13,884,498.45 555,379.95
February, 2011 0.00 13,369,264.19 534,770.58
March, 2011 0.00 12,861,551.57 514,462.07
April, 2011 0.00 12,361,254.86 494,450.20
May, 2011 0.00 11,868,269.83 474,730.80
June, 2011 0.00 11,382,493.70 455,299.75
July, 2011 0.00 10,903,825.08 436,153.01
August, 2011 0.00 10,432,163.98 417,286.57
September, 2011 0.00 9,967,411.80 398,696.48
October, 2011 0.00 9,509,471.28 380,378.86
November, 2011 0.00 9,058,246.53 362,329.87
December, 2011 0.00 8,613,642.95 344,545.73
January, 2012 0.00 8,175,567.29 327,022.70
February, 2012 0.00 7,743,927.54 309,757.11
March, 2012 0.00 7,318,632.97 292,745.33
April, 2012 0.00 6,899,594.13 275,983.78
May, 2012 0.00 6,486,722.77 259,468.92
June, 2012 0.00 6,079,931.88 243,197.28
July, 2012 0.00 5,679,135.63 227,165.43
August, 2012 0.00 5,284,249.41 211,369.98
September, 2012 0.00 4,895,189.75 195,807.59
October, 2012 0.00 4,511,874.35 180,474.97
November, 2012 0.00 4,134,222.03 165,368.88
December, 2012 0.00 3,762,152.75 150,486.11
January, 2013 0.00 3,395,587.56 135,823.50
February, 2013 0.00 3,034,448.60 121,377.94
March, 2013 0.00 2,678,659.11 107,146.36
April, 2013 0.00 2,328,143.37 93,125.73
May, 2013 0.00 1,982,826.71 79,313.06
I-1
<PAGE>
June, 2013 0.00 1,642,635.51 65,705.41
July, 2013 0.00 1,307,497.14 52,299.88
August, 2013 0.00 977,340.00 39,093.60
September, 2013 0.00 652,093.47 26,083.74
October, 2013 0.00 331,687.91 13,267.52
November, 2013 0.00 16,054.64 642.19
December, 2013 0.00 0.00 0.00
January, 2014 0.00 0.00 0.00
February, 2014 0.00 0.00 0.00
March, 2014 0.00 0.00 0.00
April, 2014 0.00 0.00 0.00
May, 2014 0.00 0.00 0.00
June, 2014 0.00 0.00 0.00
July, 2014 0.00 0.00 0.00
August, 2014 0.00 0.00 0.00
September, 2014 0.00 0.00 0.00
October, 2014 0.00 0.00 0.00
November, 2014 0.00 0.00 0.00
December, 2014 0.00 0.00 0.00
January, 2015 0.00 0.00 0.00
February, 2015 0.00 0.00 0.00
March, 2015 0.00 0.00 0.00
April, 2015 0.00 0.00 0.00
May, 2015 0.00 0.00 0.00
June, 2015 0.00 0.00 0.00
July, 2015 0.00 0.00 0.00
August, 2015 0.00 0.00 0.00
September, 2015
and thereafter 0.00 0.00 0.00
</TABLE>
<TABLE>
<CAPTION>
Distribution Date Class A7 Class A8
- ----------------- -------- --------
<S> <C> <C>
Initial Balance 11,259,000.00 3,753,000.00
January, 1999 11,240,451.00 3,746,817.00
February, 1999 11,221,797.66 3,740,599.22
March, 1999 11,203,039.39 3,734,346.46
April, 1999 11,184,175.61 3,728,058.53
May, 1999 11,165,205.72 3,721,735.23
June, 1999 11,146,129.13 3,715,376.37
July, 1999 11,126,945.23 3,708,981.74
August, 1999 11,107,653.42 3,702,551.14
September, 1999 11,088,253.10 3,696,084.37
October, 1999 11,068,743.65 3,689,581.22
November, 1999 11,049,124.45 3,683,041.49
December, 1999 11,029,394.90 3,676,464.97
January, 2000 11,009,554.37 3,669,851.46
February, 2000 10,989,602.24 3,663,200.75
I-1
<PAGE>
March, 2000 10,969,537.87 3,656,512.63
April, 2000 10,949,360.64 3,649,786.89
May, 2000 10,929,069.92 3,643,023.32
June, 2000 10,908,665.06 3,636,221.70
July, 2000 10,888,145.42 3,629,381.82
August, 2000 10,867,510.36 3,622,503.47
September, 2000 10,846,759.23 3,615,586.43
October, 2000 10,825,891.37 3,608,630.48
November, 2000 10,804,906.14 3,601,635.40
December, 2000 10,783,802.86 3,594,600.97
January, 2001 10,762,580.88 3,587,526.98
February, 2001 10,741,239.52 3,580,413.19
March, 2001 10,719,778.11 3,573,259.39
April, 2001 10,698,195.98 3,566,065.35
May, 2001 10,676,492.45 3,558,830.84
June, 2001 10,654,666.85 3,551,555.64
July, 2001 10,632,718.48 3,544,239.52
August, 2001 10,610,646.64 3,536,882.24
September, 2001 10,588,450.65 3,529,483.58
October, 2001 10,566,129.81 3,522,043.30
November, 2001 10,543,683.42 3,514,561.17
December, 2001 10,521,110.77 3,507,036.95
January, 2002 10,498,411.14 3,499,470.41
February, 2002 10,475,583.83 3,491,861.31
March, 2002 10,452,628.12 3,484,209.41
April, 2002 10,429,543.28 3,476,514.46
May, 2002 10,406,328.59 3,468,776.23
June, 2002 10,382,983.31 3,460,994.47
July, 2002 10,359,506.72 3,453,168.94
August, 2002 10,335,898.07 3,445,299.39
September, 2002 10,312,156.62 3,437,385.57
October, 2002 10,288,281.63 3,429,427.24
November, 2002 10,264,272.34 3,421,424.14
December, 2002 10,240,128.00 3,413,376.03
January, 2003 10,215,847.84 3,405,282.64
February, 2003 10,191,431.11 3,397,143.73
March, 2003 10,166,877.04 3,388,959.04
April, 2003 10,142,184.85 3,380,728.31
May, 2003 10,117,353.76 3,372,451.28
June, 2003 10,092,383.00 3,364,127.69
July, 2003 10,067,271.78 3,355,757.28
August, 2003 10,042,019.31 3,347,339.79
September, 2003 10,016,624.80 3,338,874.95
October, 2003 9,991,087.44 3,330,362.50
November, 2003 9,965,406.43 3,321,802.16
December, 2003 9,939,580.97 3,313,193.67
I-1
<PAGE>
January, 2004 9,913,610.24 3,304,536.76
February, 2004 9,887,493.43 3,295,831.16
March, 2004 9,861,229.70 3,287,076.58
April, 2004 9,834,818.24 3,278,272.76
May, 2004 9,808,258.22 3,269,419.42
June, 2004 9,781,548.80 3,260,516.28
July, 2004 9,754,689.14 3,251,563.06
August, 2004 9,727,678.39 3,242,559.48
September, 2004 9,700,515.70 3,233,505.25
October, 2004 9,673,200.23 3,224,400.09
November, 2004 9,645,731.11 3,215,243.72
December, 2004 9,618,107.47 3,206,035.84
January, 2005 9,590,328.45 3,196,776.17
February, 2005 9,562,393.17 3,187,464.41
March, 2005 9,534,300.76 3,178,100.27
April, 2005 9,506,050.33 3,168,683.46
May, 2005 9,477,640.99 3,159,213.68
June, 2005 9,449,071.85 3,149,690.63
July, 2005 9,420,342.00 3,140,114.01
August, 2005 9,391,450.55 3,130,483.53
September, 2005 9,362,396.58 3,120,798.88
October, 2005 9,333,179.19 3,111,059.75
November, 2005 9,303,797.45 3,101,265.84
December, 2005 9,274,250.44 3,091,416.84
January, 2006 9,244,537.22 3,081,512.43
February, 2006 9,214,656.87 3,071,552.31
March, 2006 9,184,608.44 3,061,536.17
April, 2006 9,154,390.99 3,051,463.68
May, 2006 9,124,003.56 3,041,334.54
June, 2006 9,093,445.21 3,031,148.42
July, 2006 9,062,714.96 3,020,905.00
August, 2006 9,031,811.86 3,010,603.97
September, 2006 9,000,734.93 3,000,244.99
October, 2006 8,969,483.19 2,989,827.74
November, 2006 8,938,055.66 2,979,351.90
December, 2006 8,906,451.35 2,968,817.13
January, 2007 8,874,669.26 2,958,223.10
February, 2007 8,842,708.40 2,947,569.48
March, 2007 8,810,567.76 2,936,855.93
April, 2007 8,778,246.33 2,926,082.12
May, 2007 8,745,743.09 2,915,247.71
June, 2007 8,713,057.02 2,904,352.35
July, 2007 8,680,187.09 2,893,395.71
August, 2007 8,647,132.27 2,882,377.44
September, 2007 8,613,891.51 2,871,297.19
October, 2007 8,580,463.77 2,860,154.61
I-1
<PAGE>
November, 2007 8,546,848.00 2,848,949.35
December, 2007 8,513,043.15 2,837,681.06
January, 2008 8,479,048.14 2,826,349.39
February, 2008 8,444,861.91 2,814,953.98
March, 2008 8,410,483.38 2,803,494.47
April, 2008 8,375,911.47 2,791,970.50
May, 2008 8,341,145.10 2,780,381.71
June, 2008 8,306,183.17 2,768,727.73
July, 2008 8,271,024.58 2,757,008.20
August, 2008 8,235,668.22 2,745,222.74
September, 2008 8,200,112.98 2,733,370.99
October, 2008 8,164,357.74 2,721,452.58
November, 2008 8,128,401.38 2,709,467.13
December, 2008 8,092,242.76 2,697,414.26
January, 2009 8,055,880.75 2,685,293.59
February, 2009 8,019,314.20 2,673,104.74
March, 2009 7,982,541.97 2,660,847.33
April, 2009 7,945,562.89 2,648,520.97
May, 2009 7,908,375.81 2,636,125.27
June, 2009 7,870,979.55 2,623,659.85
July, 2009 7,833,372.94 2,611,124.31
August, 2009 7,795,554.79 2,598,518.26
September, 2009 7,757,523.91 2,585,841.30
October, 2009 7,719,279.11 2,573,093.03
November, 2009 7,680,819.18 2,560,273.05
December, 2009 7,642,142.91 2,547,380.96
January, 2010 7,603,249.09 2,534,416.35
February, 2010 7,564,136.49 2,521,378.82
March, 2010 7,524,803.88 2,508,267.95
April, 2010 7,485,250.03 2,495,083.33
May, 2010 7,445,473.69 2,481,824.55
June, 2010 7,405,473.60 2,468,491.19
July, 2010 7,365,248.51 2,455,082.83
August, 2010 7,324,797.16 2,441,599.05
September, 2010 7,284,118.27 2,428,039.42
October, 2010 7,243,210.56 2,414,403.52
November, 2010 7,202,072.74 2,400,690.92
December, 2010 7,160,703.52 2,386,901.18
January, 2011 7,119,101.60 2,373,033.87
February, 2011 7,077,265.67 2,359,088.56
March, 2011 7,035,194.41 2,345,064.81
April, 2011 6,992,886.50 2,330,962.17
May, 2011 6,950,340.61 2,316,780.21
June, 2011 6,907,555.40 2,302,518.48
July, 2011 6,864,529.52 2,288,176.52
August, 2011 6,821,261.62 2,273,753.89
I-1
<PAGE>
September, 2011 6,777,750.34 2,259,250.13
October, 2011 6,733,994.31 2,244,664.79
November, 2011 6,689,992.15 2,229,997.40
December, 2011 6,645,742.48 2,215,247.51
January, 2012 6,601,243.91 2,200,414.65
February, 2012 6,556,495.03 2,185,498.36
March, 2012 6,511,494.44 2,170,498.16
April, 2012 6,466,240.72 2,155,413.59
May, 2012 6,420,732.45 2,140,244.17
June, 2012 6,374,968.20 2,124,989.42
July, 2012 6,328,946.52 2,109,648.86
August, 2012 6,282,665.97 2,094,222.01
September, 2012 6,236,125.09 2,078,708.38
October, 2012 6,189,322.42 2,063,107.49
November, 2012 6,142,256.48 2,047,418.85
December, 2012 6,094,925.80 2,031,641.96
January, 2013 6,047,328.88 2,015,776.32
February, 2013 5,999,464.23 1,999,821.44
March, 2013 5,951,330.34 1,983,776.81
April, 2013 5,902,925.70 1,967,641.93
May, 2013 5,854,248.78 1,951,416.29
June, 2013 5,805,298.05 1,935,099.38
July, 2013 5,756,071.98 1,918,690.69
August, 2013 5,706,569.01 1,902,189.70
September, 2013 5,656,787.59 1,885,595.89
October, 2013 5,606,726.15 1,868,908.74
November, 2013 5,556,383.11 1,852,127.73
December, 2013 5,275,755.13 1,758,585.07
January, 2014 4,985,937.21 1,661,979.10
February, 2014 4,699,399.01 1,566,466.37
March, 2014 4,416,088.25 1,472,029.45
April, 2014 4,135,953.37 1,378,651.16
May, 2014 3,858,943.46 1,286,314.52
June, 2014 3,585,008.30 1,195,002.80
July, 2014 3,314,098.34 1,104,699.48
August, 2014 3,046,164.66 1,015,388.25
September, 2014 2,781,159.01 927,053.03
October, 2014 2,519,033.79 839,677.95
November, 2014 2,259,741.98 753,247.35
December, 2014 2,003,237.23 667,745.77
January, 2015 1,749,473.77 583,157.95
February, 2015 1,498,406.44 499,468.84
March, 2015 1,249,990.67 416,663.58
April, 2015 1,004,182.49 334,727.52
May, 2015 760,938.50 253,646.19
June, 2015 520,215.86 173,405.31
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<PAGE>
July, 2015 281,972.30 93,990.79
August, 2015 46,166.09 15,388.72
September, 2015 0 0
and thereafter
</TABLE>
I-1
<PAGE>
EXHIBIT J
LIST OF MORTGAGE LOANS FOR WHICH MORTGAGE NOTES ARE LOST
LOAN ID DOC EXCEPTION
- ------- --- ---------
580098874 NOTE 01-Missing-LNA AND COPY OF
NOTE RECVD
580098921 NOTE 01-Missing-RECEIVED/COPY OF
NOTE RECD
980098979 NOTE 01-Missing-LNA RECEIVED
980098991 NOTE 01-Missing-COPY OF NOTE AND
LNA RECEIVED
980099047 NOTE 01-Missing-LNA AND COPY OF
NOTE RECVD
980099094 NOTE 01-Missing-LNA RECEIVED
980099397 NOTE 01-Missing-LNA AND COPY OF
NOTE RCVD
REPORT TOTALS: 7 LOANS WITH 7 UNCLEARED EXCEPTIONS.
J-1
<PAGE>
EXHIBIT K
ELECTRONIC DATA FILE INFORMATION
FORMAT AGREED UPON BY MASTER SERVICER AND TRUSTEE
PROVIDED UPON REQUEST
K-1
