Download:
pdf |
pdfGINNIE MAE MULTICLASS SECURITIES PROGRAM
Government National Mortgage Association
MULTICLASS SECURITIES GUIDE
Part VI:
Ginnie Mae Multiclass Securities Transactions:
Stripped Mortgage-Backed Securities Transaction
Documents (“SMBS”)
July 1, 2023
GOVERNMENT NATIONAL MORTGAGE ASSOCIATION
MULTICLASS SECURITIES GUIDE
(July 1, 2023 Edition)
Page
PART I: GINNIE MAE MULTICLASS SECURITIES TRANSACTIONS:
GUIDELINES AND SELECTED TRANSACTION DOCUMENTS
A.
INTRODUCTION TO THE GINNIE MAE MULTICLASS SECURITIES PROGRAM .......................... I-1
B.
TRANSACTION GUIDELINES FOR THE GINNIE MAE MULTICLASS SECURITIES PROGRAM
C.
1.
General Overview .......................................................................................................................... I-2
2.
Transaction Information Internet Posting - e-Access ..................................................................... I-3
3.
Ginnie Mae Multiclass Securities Program Conventions............................................................... I-4
4.
Ginnie Mae Multiclass Securities Transaction Participants ........................................................... I-5
5.
Trust Counsel’s Responsibilities .................................................................................................... I-6
6.
Post-Closing Matters ...................................................................................................................... I-7
GINNIE MAE REMIC AND MX TRANSACTION DOCUMENTS
1.
[Reserved] ...................................................................................................................................... I-8
2.
Sponsor Agreement for REMIC Transactions
a.
Form of Sponsor Agreement for REMIC Transactions ................................................... I-9
b.
Standard Sponsor Provisions for REMIC Transactions (including Supplemental
Statement) ...................................................................................................................... I-10
3.
Base Offering Circular for Single Family REMIC Transactions ................................................. I-11
4.
Form of Offering Circular Supplement for Single Family REMIC Transactions ........................ I-12
5.
Form of Transfer Affidavit for REMIC Transactions .................................................................. I-13
6.
Form of Guaranty Agreement for Single Family REMIC Transactions ...................................... I-14
(i)
7.
8.
E.
Accountants’ Agreed-Upon Procedures Letters for Single Family REMIC Transactions
a.
Accountants’ Agreed-Upon Procedures Letter concerning the
Offering Circular ........................................................................................................... I-15
b.
Accountants’ Agreed-Upon Procedures Letter as of Closing Date
Date................................ I-16
Transactions.............................. I-17
Form of Closing Flow of Funds Instruction Letter for REMIC Transactions
GLOSSARY............................................................................................................................................... I-18
GLOSSARY
PART II: GINNIE MAE MULTICLASS SECURITIES TRANSACTIONS:
ADDITIONAL SELECTED REMIC TRANSACTION DOCUMENTS
A.
INTRODUCTION.......................................................................................................................................II-1
INTRODUCTION
II-1
B.
CLOSING CHECKLIST AND TABLE OF CONTENTS FOR REMIC TRANSACTIONS ....................II-2
II-2
C.
TRUST AGREEMENTS FOR REMIC TRANSACTIONS
D.
E.
1.
Form of Trust Agreement for REMIC Trusts (including Form of Waiver Agreement)................II-3
Agreement)
II-3
2.
II-4
REMIC Standard Trust Provisions
Provisions................................................................................................II-4
3.
Form of MX Trust Agreement ......................................................................................................II-5
II-5
4.
MX Standard Trust Provisions
Provisions......................................................................................................II-6
II-6
TRANSFER OF GINNIE MAE CERTIFICATES AND CREATION OF REMIC SECURITIES
1.
II-7
Forms of Trustee’s Receipt and Safekeeping Agreement for REMIC Transactions
Transactions.....................II-7
2.
Form of Issuance Statement for REMIC Transactions..................................................................II-8
Transactions
II-8
LEGAL OPINIONS for REMIC Transactions
1.
Form of Transaction Opinion of Trust Counsel for REMIC Transactions
Transactions....................................II-9
II-9
2.
Form of Opinion of Sponsor for REMIC Transactions...............................................................II-10
Transactions
II-10
3.
Form of Tax Opinions of Trust Counsel for REMIC Transactions
a.
Single REMIC ..............................................................................................................II-11
II-11
b.
II-12
Double REMIC: One Residual Security .......................................................................II-12
c.
Double REMIC: Two Residual Securities ....................................................................II-13
II-13
d.
MX (Grantor) Trust ......................................................................................................II-14
II-14
4.
Form of Opinion of Trustee’s Counsel for REMIC Transactions ...............................................II-15
II-15
5.
Opinion of HUD General Counsel ..............................................................................................II-16
II-16
(ii)
F.
GINNIE MAE REMIC TRUST ADMINISTRATION AND TAX REPORTING
REPORTING...................................II-17
II-17
PART III: GINNIE MAE PLATINUM SECURITIES TRANSACTIONS
PART IV: GINNIE MAE REMIC AND MX TRANSACTIONS:
MULTIFAMILY TRANSACTION DOCUMENTS*
A.
GENERAL OVERVIEW: MULTIFAMILY TRANSACTIONS ............................................................. IV-1
B.
DOCUMENTS........................................................ IV-2
GINNIE MAE MULTIFAMILY TRANSACTION DOCUMENTS
1.
Form of Offering Circular Supplement for Multifamily Transactions
Transactions........................................ IV-3
2.
Circular............................................................................................ IV-4
Multifamily Base Offering Circular
3.
Form of Guaranty Agreement for Multifamily Transactions ...................................................... IV-5
4.
Accountants’ Agreed-Upon Procedures Letters for Multifamily REMIC Transactions
a.
Agreed-Upon Procedures Letter concerning the Offering Circular .............................. IV-6
b.
Date..................................................... IV-7
Agreed-Upon Procedures Letter as of Closing Date
* For multifamily transactions, additional transaction documents found in Parts I and II of the Multiclass
Securities Guide must be delivered, including the Sponsor Agreement, Transfer Affidavit, Closing Flow of Funds
Instruction Letter, Supplemental Statement, if applicable, REMIC Trust Agreement, MX Trust Agreement, if
applicable, Trustee’s Receipt and Safekeeping Agreement and the Issuance Statement. In addition, opinions of
counsel found in Part II of the Multiclass Securities Guide must be delivered, including the Transaction Opinion,
Sponsor Opinion, relevant Tax Opinions, Trustee’s Opinion and Opinion of HUD General Counsel.
PART V: GINNIE MAE MULTICLASS SECURITIES TRANSACTIONS:
CALLABLE SECURITIES
A.
GENERAL OVERVIEW: CALLABLE TRANSACTIONS .....................................................................V-1
V-1
B.
GINNIE MAE CALLABLE TRANSACTION DOCUMENTS
1.
Form of Offering Circular for Callable Securities ........................................................................V-2
V-2
2.
Form of Trust Agreement for Callable Trusts
Trusts...............................................................................V-3
V-3
3.
Standard Trust Provisions for Callable Trusts ..............................................................................V-4
V-4
4.
Form of Sponsor Agreement for Callable Trusts ..........................................................................V-5
V-5
5.
Standard Sponsor Provisions for Callable Trusts
Trusts..........................................................................V-6
V-6
6.
Form of Ginnie Mae Callable Securities Guaranty Agreement ....................................................V-7
V-7
7.
[Reserved] .....................................................................................................................................V-8
V-8
(iii)
8.
Form of Accountant’s Agreed-Upon Procedures Letter Concerning the Offering Circular
Securities...................................................................................................................V-9
for Callable Securities
V-9
9.
Securities.......................V-10
Forms of Trustee’s Receipt and Safekeeping Agreement for Callable Securities
V-10
10.
V-11
Form of Issuance Statement for Callable Securities ...................................................................V-11
11.
Securities......................................V-12
Form of Transaction Opinion of Trust Counsel for Callable Securities
V-12
12.
Form of Tax Opinion of Trust Counsel for Callable Securities ..................................................V-13
V-13
13.
Form of Opinion of Sponsor for Callable Securities
Securities...................................................................V-14
V-14
14.
Form of Opinion of Trustee’s Counsel for Callable Securities ...................................................V-15
V-15
15.
Form of Accountants’ Agreed-Upon Procedures Letter as of the Closing Date for
V-16
Callable Securities
Securities.......................................................................................................................V-16
16.
Form of Closing Flow of Funds Instruction Letter for Callable Securities
Securities.................................V-17
V-17
17.
Form of Closing Checklist and Table of Contents for Callable Securities
Securities..................................V-18
V-18
PART VI: GINNIE MAE MULTICLASS SECURITIES TRANSACTIONS:
STRIPPED MORTGAGE-BACKED SECURITIES (“SMBS”)
A.
GENERAL OVERVIEW: SMBS TRANSACTIONS ............................................................................. VI-1
B.
GINNIE MAE SMBS TRANSACTION DOCUMENTS
1.
[Reserved] ................................................................................................................................... VI-2
2.
Standard Sponsor Provisions for SMBS Securities.....................................................................
VI-3
Securities
3.
Form of Sponsor Agreement for SMBS Transactions ................................................................ VI-4
4.
Base Offering Circular for SMBS Transactions..........................................................................
VI-5
Transactions
5.
Form of Offering Circular Supplement for SMBS Transactions ................................................ VI-6
6.
Form of Accountants’ Agreed-Upon Procedures Letter concerning the Offering Circular
for SMBS Transactions............................................................................................................................
VI-7
Transactions
7.
Form of Guaranty Agreement for SMBS Transactions...............................................................
VI-8
Transactions
8.
Form of Issuance Statement for SMBS Transactions ................................................................. VI-9
9.
Forms of Trustee’s Receipt and Safekeeping Agreement for SMBS Transactions...................
VI-10
Transactions
10.
Form of Closing Flow of Funds Letter for SMBS Transactions ............................................... VI-11
11.
Form of Trust Agreement for SMBS Transactions (including Form of Waiver Agreement) ... VI-12
12.
Standard Trust Provisions for SMBS Trusts ............................................................................. VI-13
(iv)
13.
Form of Transaction Opinion of Trust Counsel for SMBS Transactions
Transactions.................................. VI-14
14.
Transactions............................................................... VI-15
Form of Opinion of Sponsor for SMBS Transactions
15.
Form of Tax Opinion of Trust Counsel for SMBS Transactions .............................................. VI-16
16.
Form of Opinion of Trustee’s Counsel for SMBS Transactions ............................................... VI-17
17.
Form of Accountants’ Agreed-Upon Procedures Letter as of Closing Date
Transactions............................................................................................................. VI-18
for SMBS Transactions
PART VII: GINNIE MAE HREMIC TRANSACTIONS:
HREMIC TRANSACTION DOCUMENTS*
A.
GENERAL OVERVIEW: HREMIC TRANSACTIONS ....................................................................... VII-1
B.
GINNIE MAE HREMIC TRANSACTION DOCUMENTS
1.
Form of Offering Circular Supplement for HREMIC Transactions
Transactions.......................................... VII -2
2.
Accountants’ Agreed-Upon Procedures Reports for HREMIC Transactions
a.
Form of Accountants’ Agreed-Upon Procedures Report concerning the
Offering Circular for HREMIC Transactions ............................................................. VII -3
b.
Agreed-Upon Procedures Report as of Closing Date for HREMIC Transactions ...... VII -4
* For HREMIC transactions, additional transaction documents found in Parts I and II of the Multiclass
Securities Guide must be delivered, including the Sponsor Agreement, Transfer Affidavit, Closing Flow of Funds
Instruction Letter, Supplemental Statement, if applicable, REMIC Trust Agreement, MX Trust Agreement, if
applicable, Trustee’s Receipt and Safekeeping Agreement and the Issuance Statement. In addition, opinions of
counsel found in Part II of the Multiclass Securities Guide must be delivered, including the Transaction Opinion,
Sponsor Opinion, relevant Tax Opinions, Trustee’s Opinion and Opinion of HUD General Counsel.
(v)
GENERAL OVERVIEW: SMBS TRANSACTIONS
INTRODUCTORY STATEMENT
Ginnie Mae provides for the guarantee of Ginnie Mae Guaranteed Stripped MortgageBacked Securities under the Ginnie Mae Multiclass Securities Program. The requirements of the
Ginnie Mae Multiclass Securities Program are set forth in the Ginnie Mae Multiclass Securities
Guide (the “Guide”), which consists of seven parts. Refer to Part I of the Guide for an introduction
to, and transaction guidelines for, the Ginnie Mae Multiclass Securities Program generally. This Part
VI of the Guide relates to the issuance of Ginnie Mae Guaranteed Stripped Mortgage-Backed
Securities (“SMBS Securities”) and provides for modifications of the transaction guidelines for such
issuance. Capitalized terms that are used but not defined herein have the meanings ascribed thereto
in the Glossary contained in Part I of the Guide.
The Standard Trust Provisions for Ginnie Mae SMBS Trusts and Standard Sponsor
Provisions for Ginnie Mae SMBS Securities are contained in this Part VI. For issuances of SMBS
Securities, the related transaction parties are required to use the forms of documents specifically
related to SMBS Securities transactions contained in this Part VI. Trust counsel should contact
Ginnie Mae’s Legal Advisor for the Base Offering Circular and the form of Offering Circular
Supplement for SMBS Securities and Ginnie Mae’s Financial Advisor for the forms of the
Accountants’ Agreed-Upon Procedures Letters for SMBS Securities transactions. Any changes to
any transaction documents will require prior approval by Ginnie Mae and Ginnie Mae’s Legal
Advisor.
This Part VI of the Guide also provides information regarding associated fees and important
Ginnie Mae policy regarding SMBS Trusts.
SMBS TRUSTS
SMBS Securities, which will be sold from time to time in one or more series, represent
interests in separate Ginnie Mae SMBS Trusts established from time to time. Ginnie Mae guarantees
the timely payment of principal and interest on each Class of SMBS Securities.
Each Trust will be comprised primarily of (i) “fully modified pass-through” mortgage-backed
certificates as to which Ginnie Mae has guaranteed the timely payment of principal and interest
pursuant to the Ginnie Mae I Program or the Ginnie Mae II Program, (ii) certificates backed by
Ginnie Mae MBS Certificates as to which Ginnie Mae has guaranteed the timely payment of
principal and interest pursuant to the Ginnie Mae Platinum Program, (iii) previously issued REMIC
or comparable mortgage certificates, or (iv) previously issued SMBS Securities, in each case,
evidencing interests in trusts consisting primarily of direct or indirect interests in Ginnie Mae
Certificates, as further described in the related Offering Circular Supplement.
Each Series will be issued in two or more Classes. Each Class of Securities of a Series will
evidence an interest in future principal payments and/or an interest in future interest payments on the
Trust Assets included in the related SMBS Trust. The SMBS Trust created for each issue of SMBS
Securities will be classified as a grantor trust.
VI-1-1
Ginnie Mae will be entitled to a Guaranty Fee payable at the settlement (i.e., the Closing
Date) of each SMBS Trust. The Ginnie Mae Guaranty Fee is an amount that equals the product of
0.03125% and the aggregate Class Principal Balance of the Securities as of the Closing Date. ∗
∗
The Ginnie Mae Guaranty Fee is subject to change by Ginnie Mae.
VI-1-2
[RESERVED]
VI-2-0
______________________________________________________________________________
STANDARD SPONSOR PROVISIONS
______________________________
GOVERNMENT NATIONAL MORTGAGE ASSOCIATION
GUARANTEED STRIPPED MORTGAGE-BACKED SECURITIES
____________
July 1, 2023 Edition
______________________________________________________________________________
VI-3-1
STANDARD SPONSOR PROVISIONS
FOR GINNIE MAE SMBS SECURITIES
THESE STANDARD SPONSOR PROVISIONS FOR GINNIE MAE SMBS
SECURITIES are to be incorporated by reference in each Sponsor Agreement relating to the
issuance of Ginnie Mae Guaranteed Stripped Mortgage-Backed Securities entered into by and
between the GOVERNMENT NATIONAL MORTGAGE ASSOCIATION and each Sponsor.
SECTION 1. Definitions. Capitalized terms used and not defined herein shall have the
meanings assigned to them in the Glossary included in the Ginnie Mae Multiclass Securities Guide in
effect as of the date of the related Sponsor Agreement.
Class: As to any Series of Ginnie Mae Guaranteed SMBS Securities, all of the Securities
sharing the same designation. As to each SMBS Trust, the designations, Original Class Principal
Balances (if any), original Class Notional Balances (if any), Interest Rates (if any) and other specific
characteristics of each Class of Securities shall be as set forth in the related SMBS Trust Agreement.
eCommerce Laws: ESIGN, UETA, any applicable state or local equivalent or similar laws
and regulations, and any rules, regulations and guidelines promulgated under any of the foregoing.
ESIGN: The Electronic Signature In Global and National Commerce Act, Pub. L. No. 106229, 114 Stat. 464 (codified at 15 U.S.C. §§ 7001-31), as the same may be supplemented, amended,
recodified or replaced from time to time.
UETA: The Uniform Electronic Transactions Act, as adopted in the relevant jurisdiction,
and as may be supplemented, modified or replaced from time to time.
SECTION 2. Commitment to Sell and Purchase. Subject to satisfaction of the conditions
to Sponsor’s obligations set forth in these Standard Sponsor Provisions, on the Closing Date the
Sponsor will establish an SMBS Trust by executing an SMBS Trust Agreement in form and
substance substantially similar to the form included in Part VI of the Ginnie Mae Multiclass
Securities Guide, with only such changes as are necessary to reflect the Securities Structure or as are
approved by Ginnie Mae. Pursuant to an SMBS Trust Agreement, the Sponsor (or its Participating
Affiliates) will transfer all of Sponsor’s and the Participating Affiliates’ interest in identified Trust
Assets to the SMBS Trust in consideration of specified Securities, representing undivided beneficial
ownership interests in the SMBS Trust.
SECTION 3. Commitment to Issue Ginnie Mae Guaranty. Subject to satisfaction of the
conditions to Ginnie Mae’s obligations set forth in the Sponsor Agreement, including these Standard
Sponsor Provisions, Ginnie Mae will guarantee the timely payment of principal of and interest on
each Security (in accordance with its terms) issued by an SMBS Trust pursuant to an SMBS Trust
Agreement. To effect the Ginnie Mae Guaranty, on the Closing Date, Ginnie Mae will execute a
Guaranty Agreement authorizing the Trustee to issue the related Series of Securities entitled to the
benefits of the Ginnie Mae Guaranty. The Securities shall only be issued in book-entry form. Each
Security issued by the Trustee pursuant to the authority of the Ginnie Mae Guaranty shall be entitled
VI-3-2
to the benefits of the Ginnie Mae Guaranty and shall be valid and obligatory for any purpose. Ginnie
Mae will have no obligation to issue the Ginnie Mae Guaranty except upon full satisfaction of all
conditions to closing. The obligations of Ginnie Mae on any Security or pursuant to the related
Guaranty Agreement will terminate upon the retirement of that Security pursuant to the terms of the
related SMBS Trust Agreement.
SECTION 4. Representations and Warranties of the Sponsor. The Sponsor hereby
represents and warrants, as of the date of the Sponsor Agreement, as follows:
(a)
The Sponsor and its Participating Affiliates have acquired, or by the Closing Date
will acquire, the Trust Assets in the ordinary course of its business, in good faith,
for value and without notice of any claim against or claim to any of the Trust
Assets on the part of any person.
(b)
Neither the Sponsor nor its Participating Affiliates have any actual or constructive
knowledge or notice of any interest in the Trust Assets contrary to the interest of
the Trustee under any SMBS Trust Agreement.
(c)
The Sponsor and its Participating Affiliates, as applicable, have the full power,
authority and legal right to transfer and convey the Trust Assets to the Trustee and
have the full power, authority and legal right to execute and deliver the Sponsor
Agreement, to engage in the transactions contemplated therein and to fully
perform and observe the terms and conditions thereof.
(d)
The execution and delivery by the Sponsor of the Sponsor Agreement are within
the legal power of, and have been duly authorized by all necessary actions on the
part of, the Sponsor. Neither the execution and delivery of the Sponsor Agreement
by the Sponsor, nor the consummation by the Sponsor of the transactions
contemplated in the Sponsor Agreement, nor compliance by the Sponsor with the
provisions thereof, will (i) conflict with or result in a breach of, or constitute a
default under, any of the provisions of the certificate of incorporation or bylaws of,
or any law, governmental rule or regulation, or any judgment, decree or order
binding on, the Sponsor, its Participating Affiliates or its properties, or any of the
provisions of any indenture, mortgage, deed of trust, contract or other instrument
to which it or its Participating Affiliates are a party or by which they are bound, or
(ii) result in the creation or imposition of any lien, charge or encumbrance upon
any of its or its Participating Affiliates’ properties pursuant to the terms of any
such indenture, mortgage, deed of trust, contract or other instrument.
(e)
The Sponsor Agreement has been duly executed and delivered by the Sponsor and
constitutes a legal, valid and binding agreement of the Sponsor, enforceable in
accordance with its terms subject, as to enforcement of remedies, to applicable
bankruptcy, reorganization, insolvency or other similar laws affecting creditors’
rights and to general principles of equity.
(f)
No consent, approval, authorization or order of or registration or filing with, or
notice to, any governmental authority or court is required for the execution,
VI-3-3
delivery and performance of, or compliance by the Sponsor with, the Sponsor
Agreement or the consummation by the Sponsor of any other transaction
contemplated thereby.
(g)
No certificate of an officer of the Sponsor or Participating Affiliate, statement
furnished pursuant hereto in writing, or report delivered pursuant to the terms
hereof to Ginnie Mae, any Affiliate or designee of Ginnie Mae, or the Trustee by
the Sponsor contains any untrue statement of a material fact, or omits a material
fact necessary to make the certificate, statement, or report not misleading in light
of the circumstances under which such certificate, statement or report is given.
(h)
Neither the Sponsor nor any of its Participating Affiliates has dealt with any
broker, investment banker, or agent or other person that may be entitled to any
commission or compensation in connection with the sale of Trust Assets to the
related SMBS Trust, or any such commission or compensation has been paid in
full.
(i)
There is no litigation pending or, to the Sponsor’s knowledge, threatened against
the Sponsor or any of its Participating Affiliates that could reasonably be expected
to affect adversely the transfer of the Trust Assets, the issuance of the Securities or
the execution, delivery, performance or enforceability of the Sponsor Agreement,
including the Sponsor’s performance under any indemnification provisions.
(j)
At the time of the issuance of the Securities, the Trust Assets will be assets of the
related SMBS Trust and not assets of the Sponsor or any other person.
(k)
Immediately prior to the transfer of Trust Assets to the related SMBS Trust, the
Sponsor or its Participating Affiliates will be the sole owners of, and will have
good and marketable title to, the Trust Assets, subject to no prior lien, mortgage,
security interest, pledge, charge or other encumbrance or any such encumbrance
will be discharged, and on the Closing Date, all right, title and interest in the Trust
Assets shall be transferred to the related SMBS Trust and the Trust Assets shall be
duly and validly delivered to such SMBS Trust, together with any other documents
or certificates required by the Sponsor Agreement. Following the transfer of Trust
Assets to an SMBS Trust, the SMBS Trust will own such Trust Assets, free and
clear of any lien, mortgage, security interest, pledge, charge or other encumbrance.
(l)
The transfer, assignment and conveyance of the Trust Assets by the Sponsor and
its Participating Affiliates pursuant to the Sponsor Agreement are not subject to
bulk transfer laws or any similar statutory provisions in effect in any applicable
jurisdiction.
(m)
The Trust Assets are of the type and with the payment characteristics identified in
the Offering Circular Supplement. Each of the Trust Assets satisfies the
characteristics specified in the Terms Sheet under the heading “Actual
Characteristics of the Mortgage Loans Underlying the Trust Asset(s).”
VI-3-4
(n)
The Trust Assets consist solely of Trust MBS, Underlying Certificates or
Underlying SMBS Securities that evidence, directly or indirectly, interests in
Ginnie Mae Certificates.
(o)
The consideration received by each of the Sponsor and any of its Participating
Affiliates upon the transfer of Trust Assets under an SMBS Trust Agreement
constitutes fair consideration and reasonably equivalent value for the Trust Assets
transferred by it.
(p)
The Sponsor is solvent, and the transfer of the Trust Assets will not cause the
Sponsor or any of its Participating Affiliates to become insolvent; the transfer of
the Trust Assets is not undertaken with the intent to hinder, delay or defraud any of
the creditors of the Sponsor or its Participating Affiliates.
(q)
The Sponsor relinquishes and will cause its Participating Affiliates to relinquish all
rights to possess, control and monitor the Trust Assets transferred to an SMBS
Trust except such rights as any may have as a Holder of the related Securities.
(r)
The description of the plan for distribution of the Securities contained under the
heading “Plan of Distribution” in the Offering Circular Supplement related to the
Securities does not contain any untrue statement of a material fact or omit to state
a material fact required to be stated therein or necessary in order to make the
statements contained therein, in light of the circumstances under which they are
made, not misleading.
(s)
The Sponsor has delivered to Ginnie Mae financial statements (including the notes
attached thereto) of the Sponsor for its two most recently completed fiscal years,
certified by independent certified public accountants. Such financial statements
have been prepared in accordance with generally accepted accounting principles
consistently applied. These financial statements fairly reflect the financial
condition of the Sponsor and the results of its operations as of the dates and for the
periods presented. Since the dates of such statements, no materially adverse
changes in the financial condition, business or operations of the Sponsor have
occurred that could reasonably be expected to affect adversely the transfer of the
Trust Assets, the issuance of the Securities or the execution, delivery, performance
or enforceability of the Sponsor Agreement, including the Sponsor’s performance
under any indemnification provisions.
(t)
The Offering Circular Supplement includes an accurate description of the
Securities Structure.
(u)
Assuming the full and timely payment of principal and interest on the Trust Assets
(as those Trust Assets are identified in the Offering Circular Supplement),
payments on the Trust Assets in all possible prepayment scenarios will be
adequate to make full and timely payments of principal and interest on the
Securities in accordance with the terms of the Securities as described in the
Offering Circular Supplement when combined with other Securities with
VI-3-5
appropriate Class Principal or Class Notional Balances (giving effect, in each case,
to all possible re-combinations of SMBS Securities and/or Trust Assets) and will
pay in full each Class of Securities by its Final Distribution Date regardless of the
rate of prepayment of the Mortgage Loans underlying the Trust Assets or level of
any index upon which the Interest Rate of any Class may be based.
(v)
Assuming the full and timely payment of principal and interest on the Trust
Assets, payments on the Trust Assets in all possible prepayment scenarios will be
adequate to make full and timely payments of principal and interest on the
Securities in accordance with the terms of the related SMBS Trust Agreement
when combined with other Securities with appropriate Class Principal or Class
Notional Balances (giving effect, in each case, to all possible re-combinations of
SMBS Securities and/or Trust Assets) and will pay in full each Class of Securities
by its Final Distribution Date regardless of the rate of prepayment of the Mortgage
Loans underlying the Trust Assets or level of any index upon which the Interest
Rate of any Class may be based.
(w)
The Sponsor has obtained CUSIP Numbers for each Class of Securities.
(x)
To the extent a Co-Sponsor has been engaged by the Sponsor, the Sponsor has
engaged the Co-Sponsor identified in the Sponsor Agreement under an agreement
separate from the Sponsor Agreement to assist in the distribution of the Securities.
(y)
The Sponsor has been duly incorporated, organized or formed, as applicable, and
is validly existing as a corporation, limited liability company or limited
partnership, as applicable, in good standing under the laws of the jurisdiction of its
incorporation, organization or formation, as applicable.
(z)
If the Sponsor executes the Sponsor Agreement via electronic signature, (i) the
Sponsor’s creation and maintenance of the Sponsor’s electronic signature to the
Sponsor Agreement and the Sponsor’s storage of its copy of the fully executed
Sponsor Agreement will be in compliance with applicable eCommerce Laws to
ensure admissibility of such electronic signature and related electronic records in a
legal proceeding, (ii) the Sponsor has controls in place to ensure compliance with
applicable eCommerce Laws, including, without limitation, §201 of ESIGN and
§16 of UETA, regarding the Sponsor’s electronic signature to the Sponsor
Agreement, and the records, including electronic records, retained by the Sponsor
will be stored to prevent unauthorized access to or unauthorized alteration of the
electronic signature and associated records, and (iii) the Sponsor has controls and
systems in place to provide necessary information, including, but not limited to,
the Sponsor’s business practices and methods, for record keeping and audit trails,
including audit trails regarding Sponsor’s electronic signature to the Sponsor
Agreement and associated records.
(aa)
With respect to any Series backed by one or more Ginnie Mae Multifamily
Certificates, neither the Sponsor nor any of its Participating Affiliates has any
actual or constructive knowledge or notice that any of the Mortgage Loans
VI-3-6
underlying any of the Trust MBS is 30 days or more delinquent as of the Final
Structure Date for the related Series.
(bb)
With respect to any Series backed by one or more Ginnie Mae Construction Loan
Certificates, and each Deposited Ginnie Mae Construction Loan Certificate and
each Undeposited Ginnie Mae Construction Loan Certificate, the related
Contracted Security Purchaser has duly executed and delivered a Waiver
Agreement.
(cc)
With respect to any Series backed by one or more Ginnie Mae Construction Loan
Certificates, on the date as of which the related Contracted Security Purchaser duly
executed and delivered the Waiver Agreement referred to in clause (bb), the
Sponsor owned each Deposited Ginnie Mae Construction Loan Certificate.
SECTION 5. Covenants of the Sponsor. Subject to the conditions set forth in Section 8,
the Sponsor hereby covenants and agrees as follows:
(a)
The Sponsor shall create, no later than the Pool Information Date, the Final Data
Statement, the final version of which will be attached to the SMBS Trust
Agreement related to a Ginnie Mae SMBS Trust.
(b)
[Reserved.]
(c)
On or before the Pool Wire Date, the Sponsor shall transfer (or cause to be
transferred) the Trust Assets of a Ginnie Mae SMBS Trust and the assets
consisting of the Trustee Fee to the Trustee Limited Purpose Account and/or Trust
Asset Depository Account, where they will be held on behalf of the Sponsor and
its Participating Affiliates, as applicable, until closing. The Sponsor and its
Participating Affiliates, as applicable, shall release the foregoing assets to the
Trustee on the Closing Date.
(d)
The Sponsor shall calculate the original issue discount, if any, for each Class. In
addition, the Sponsor shall deliver a list showing the initial offering price to the
public at which the first substantial amount of Securities of each Class will have
been sold, assuming that preliminary indications of interest are confirmed upon
delivery of the Offering Circular Supplement and that such sales are
consummated, or an estimate of the sales price to Trust Counsel and Tax
Administrator on or before the date on which the Offering Circular Supplement is
printed. Within ten Business Days after the Closing Date, the Sponsor shall
provide the Tax Administrator with any additional information concerning the
Securities that the Tax Administrator reasonably may require.
(e)
On or before the Closing Date, the Sponsor shall transfer to a special purpose
account of the Trustee sufficient funds to pay the Ginnie Mae Guaranty Fee and
the fees and expenses of any Participant who is to be paid from the proceeds of the
transaction.
VI-3-7
(f)
The Sponsor shall use its best efforts to satisfy each of the conditions to Ginnie
Mae’s obligations under the Sponsor Agreement.
(g)
The Sponsor shall provide or cause to be provided or shall make available in
electronic form a copy of the Offering Circular Supplement to each and every
Person who purchases or otherwise acquires a Security from the Sponsor
(including any underwriter of the Securities) prior to or simultaneously with the
confirmation of sale of such Security to such Person and shall comply with the
guidelines issued from time to time by The Securities Industry and Financial
Markets Association relating to the distribution by “Government Sponsored
Enterprises” of offering materials related to securities exempt from registration
under the Securities Act of 1933 (the “GSE Guidelines”) and shall comply with
any applicable federal or state laws relating to the distribution, offer or sale of any
Security. In connection with its compliance with the GSE Guidelines, the Sponsor
shall amend its master agreement with each of its dealers in a letter substantially in
the form attached as Exhibit 1.
(h)
No Security shall be offered, sold or otherwise transferred by the Sponsor (or any
other underwriter of any such Class) to any investor, unless such investor is an
institutional “accredited investor,” as defined in Rule 501(a)(1), (2), (3) or (7) of
Regulation D of the Securities Act of 1933, as amended (an “Institutional
Accredited Investor”), that has substantial experience in mortgage-backed
securities and is capable of understanding and is able to bear the risks associated
with an investment in such a Security. In addition, the Sponsor shall inform all
other broker/dealers to whom it has agreed to sell a Security at the Closing Date
that such Security is not intended to be distributed to any investor other than an
Institutional Accredited Investor.
(i)
The information concerning Trust Assets to be (i) included in the Final Data
Statement and (ii) set forth in Exhibit A to the Offering Circular Supplement, with
respect to any Series backed in whole or in part by any Ginnie Mae Multifamily
Certificates, including, but not by way of limitation, the outstanding principal
balance of each Trust Asset as of the Closing Date and the Certificate Rate of each
Trust Asset, will be true and correct in all material respects as of the Closing Date.
(j)
The Sponsor shall transfer or cause to be transferred to the SMBS Trust, Trust
Assets with the characteristics identified in the Offering Circular Supplement. If
the characteristics of the Trust Assets transferred to the SMBS Trust are such that
there is a material change in the investment characteristics of any Class as
described in the Offering Circular Supplement, or if there are other material
changes to the disclosure in the Offering Circular Supplement, the Sponsor shall:
(1)
deliver or cause to be delivered to Ginnie Mae and the Financial Advisor,
for posting on e-Access, a Supplemental Statement, in substantially the
form attached as Exhibit 2,
VI-3-8
(2)
deliver or cause to be delivered to the Financial Advisor promptly after the
closing an electronic file of the Supplemental Statement described in
Section 5(j)(1) hereof, and
(3)
notify each person with whom the Sponsor has entered into an agreement
for the purchase of any Securities of any applicable Class (a “Purchaser”)
of the material change in the investment characteristics of the related Class
and confirm to Ginnie Mae, in a letter substantially in the form attached as
Exhibit 3, that either (A) the Purchaser’s decision to purchase the
Securities of an applicable Class was not affected by such variance or (B)
the terms of the sale to the Purchaser were revised to the Purchaser’s
satisfaction.
(k)
In connection with any sale of a Security to a customer, the Sponsor shall have
reasonable grounds for believing that the proposed investment is suitable, in
accordance with the NASD Conduct Rules, for such customer.
(l)
The Sponsor shall deliver or cause to be delivered to the Information Agent, no
later than the Pool Information Date, one copy of each Underlying Certificate
Disclosure Document if one or more Underlying Certificates are held in the Ginnie
Mae SMBS Trust and one copy of each Underlying SMBS Security Disclosure
Document if one or more Underlying SMBS Securities are held in the Ginnie Mae
SMBS Trust.
(m)
To the extent that the Trustee’s Receipt and Safekeeping Agreement refers to an
Intermediary Bank, the Sponsor acknowledges the agreements of the Sponsor set
forth in the Trustee’s Receipt and Safekeeping Agreement relating to the issuance
of the Securities and agrees to be bound thereby to the same extent as though such
agreements were set forth in full in the Sponsor Agreement.
(n)
For the Sponsor’s next completed fiscal year and each completed fiscal year
thereafter for so long as the Sponsor Agreement remains in effect, the Sponsor will
deliver to Ginnie Mae, annually, as requested by Ginnie Mae, the Sponsor’s
financial statements (including the notes thereto), certified by independent
certified public accountants and prepared in accordance with generally accepted
accounting principles consistently applied, together with a representation that such
financial statements fairly reflect the financial condition of the Sponsor and the
results of its operations as of the dates and for the periods presented. In the event
such financial statements reflect that the Sponsor has less than the minimum
required amount, as set forth in the Guide, in shareholders’ equity or partners’
capital, the Sponsor will cause, within 90 calendar days of delivering financial
statements to Ginnie Mae, all of its rights and obligations under the Sponsor
Agreement to be assigned to, and assumed by, another approved Sponsor under the
Ginnie Mae Multiclass Securities Program with at least the minimum required
amount, as set forth in the Guide, in shareholders’ equity or partners’ capital and
who otherwise meets the eligibility requirements then in effect to become a
VI-3-9
Sponsor under the Ginnie Mae Multiclass Securities Program. Such assignment
and assumption will be in a form acceptable to Ginnie Mae.
(o)
If the Sponsor executes the Sponsor Agreement via electronic signature, the
Sponsor will produce, upon request by Ginnie Mae, such affidavits, certifications,
records and information regarding the creation or maintenance of the Sponsor’s
electronic signature to the Sponsor Agreement to ensure admissibility of such
electronic signature and related electronic records in a legal proceeding.
(p)
With respect to any Series backed by Ginnie Mae Construction Loan Certificates,
all Deposited Ginnie Mae Construction Loan Certificates and any related
Undeposited Ginnie Mae Construction Loan Certificates were issued on or after
January 1, 2003.
SECTION 6. Representations and Warranties of Ginnie Mae. Ginnie Mae hereby
represents and warrants to the Sponsor as follows:
(a)
Ginnie Mae is a wholly-owned corporate instrumentality of the United States
within the Department of Housing and Urban Development.
(b)
Pursuant to Section 308 of the National Housing Act, 12 U.S.C. § 1723, the
Secretary of HUD has adopted the bylaws of Ginnie Mae. The bylaws provide
that the President, each Vice President and each Assistant Vice President of Ginnie
Mae are severally expressly empowered in the name of Ginnie Mae to sign all
contracts and other documents, instruments, and writings that are required to be
executed by Ginnie Mae in the conduct of its business and affairs.
(c)
Ginnie Mae has the power and authority to make, execute, deliver and perform the
Sponsor Agreement and all the transactions contemplated hereby, including, but
not limited to, the authority to guarantee the timely payment of principal and
interest on the Securities in accordance with the Sponsor Agreement. Ginnie Mae
has taken all necessary action to authorize its execution, delivery and performance
of the Sponsor Agreement. The Sponsor Agreement constitutes the legal, valid
and binding obligation of Ginnie Mae enforceable in accordance with its terms.
(d)
The Ginnie Mae Multiclass Securities Guide contains an opinion of the General
Counsel to HUD to the effect that Ginnie Mae has the authority to guarantee
stripped mortgage-backed securities and that such guaranties will represent general
obligations of the United States backed by the full faith and credit of the United
States. The Sponsor, the Trustee, the SMBS Trust, the Trust Counsel and Holders
of the Securities are entitled to rely on that opinion.
(e)
The execution, delivery and performance of the Sponsor Agreement by Ginnie
Mae do not violate any provision of any existing federal law, regulation or
executive order applicable to Ginnie Mae or any order or decree of any court, or
any mortgage, indenture, contract or other agreement to which Ginnie Mae is a
party or by which it or any significant portion of its properties is bound.
VI-3-10
(f)
All payment obligations of Ginnie Mae under the Sponsor Agreement, including
specifically the Ginnie Mae Guaranty, are obligations of the United States backed
by the full faith and credit of the United States.
(g)
With respect to each Deposited Ginnie Mae Construction Loan Certificate and
each Undeposited Ginnie Mae Construction Loan Certificate, Ginnie Mae (i)
acknowledges that the right of the related Contracted Security Purchaser with
respect to such Ginnie Mae Construction Loan Certificate to withhold consent to
one or more extensions of the applicable Maturity Date for a period that, in the
aggregate, may not exceed the term of the underlying project loan insured by FHA,
has been irrevocably waived by the Contracted Security Purchaser pursuant to the
applicable Waiver Agreement, (ii) agrees that, if the Ginnie Mae Issuer of any
such Ginnie Mae Construction Loan Certificate requests an extension of the
applicable Maturity Date, such Ginnie Mae Issuer may submit the applicable
Waiver Agreement in lieu of any document evidencing the consent to such
extension by the holders or the Contracted Security Purchaser, as applicable, of
such Ginnie Mae Construction Loan Certificates (provided, that such extension,
together with all extensions previously granted in respect of such Ginnie Mae
Construction Loan Certificates, does not exceed the term of the underlying project
loan insured by FHA), and (iii) agrees that if the applicable Waiver Agreement is
submitted by any such Ginnie Mae Issuer in accordance with clause (g)(ii) above,
Ginnie Mae will not require, or condition the approval of such extension request
upon, the submission of any document evidencing the consent of the Contracted
Security Purchaser of such Ginnie Mae Construction Loan Certificates to such
extension (provided, that notwithstanding the submission of the applicable Waiver
Agreement by any Ginnie Mae Issuer in accordance with clause (g)(ii) above,
Ginnie Mae may, in its sole discretion, reject any extension request for any reason
other than the failure of the Ginnie Mae Issuer to obtain the consent of the
Contracted Security Purchaser of such Ginnie Mae Construction Loan
Certificates).
SECTION 7. Conditions to Obligation of Ginnie Mae. The obligation of Ginnie Mae
hereunder to guarantee the Securities is subject to the following conditions:
(a)
All of the representations and warranties of the Sponsor under this Sponsor
Agreement shall be accurate as of the Closing Date, and the Sponsor shall have
complied with all of its covenants and obligations under this Sponsor Agreement
as of the Closing Date.
(b)
Ginnie Mae, its Legal Advisor or another authorized agent shall have received the
following documents (collectively, the “Closing Documents”) in such forms as are
agreed upon and acceptable to Ginnie Mae, duly executed and delivered by all
signatories thereto:
(1)
The related SMBS Trust Agreement, substantially in the form provided by
Ginnie Mae, with only such changes to the form as have been approved by Ginnie
Mae.
VI-3-11
(2)
A Base Offering Circular and Offering Circular Supplement, in form and
substance acceptable to Ginnie Mae.
(3)
Applicable opinions of Trust Counsel, and, if applicable, an opinion of the
Sponsor, substantially in the form provided by Ginnie Mae, with only such
changes as have been approved by Ginnie Mae and the Sponsor.
(4)
An opinion of counsel to the Trustee, substantially in the form provided by
Ginnie Mae, with only such changes as have been approved by Ginnie Mae and
the Sponsor.
(5)
A letter from the Accountants, dated the date of the Offering Circular
Supplement, confirming the accuracy of the numerical information related to the
Trust Assets and the numerical information related to the Securities contained in
the Offering Circular Supplement, substantially in the form provided by Ginnie
Mae and in form and substance satisfactory to Ginnie Mae and the Sponsor.
(6)
A letter from the Accountants, dated the Closing Date, confirming the
numerical information in the Final Data Statement, substantially in the form
provided by Ginnie Mae in form and substance satisfactory to Ginnie Mae and the
Sponsor.
(7)
A Trustee’s Receipt and Safekeeping Agreement for SMBS in one of the
forms included in Part VI of the Ginnie Mae Multiclass Securities Guide
acknowledging acceptance of Trust Assets on behalf of a Ginnie Mae SMBS
Trust.
(8)
A Closing Flow of Funds Instruction Letter from the Sponsor to the
Trustee regarding amounts to be remitted to Ginnie Mae in payment of the Ginnie
Mae Guaranty Fee and amounts to be remitted in payment of fees to any
Participant who is to be paid from the proceeds of the transaction.
(9)
An Issuance Statement from the Sponsor to the Trustee directing the
Trustee to issue the Securities in the identified amounts.
(c)
The transaction and transaction documents shall be in form and substance
reasonably acceptable to the Legal Advisor and the Financial Advisor, and Ginnie
Mae shall have received written advice to that effect.
(d)
There shall be no pending or threatened action, suit or proceeding before any court
or governmental agency, authority or body involving the Sponsor, the SMBS
Trust, Ginnie Mae or any other party to the transactions contemplated hereby,
adversely affecting any such transaction, or challenging the validity of or seeking
to enjoin such transaction.
(e)
Ginnie Mae shall have received the Ginnie Mae Guaranty Fee, and any Participant
who is to be paid from the proceeds of the transaction shall have been paid.
VI-3-12
(f)
The Sponsor shall have executed a certification and agreement relating to the
absence of fraud on the part of the Sponsor as requested by Ginnie Mae.
(g)
Following the execution of the Sponsor Agreement, (i) nothing shall have occurred
or first come to Ginnie Mae’s knowledge that has caused Ginnie Mae, in its sole
discretion, to determine that completion of the transaction would jeopardize the
integrity of, or otherwise materially and adversely affect, the Ginnie Mae
Multiclass Securities Program and (ii) no Participant shall have been suspended
from participation in the Ginnie Mae Multiclass Securities Program.
(h)
All other terms and conditions of the Sponsor Agreement shall have been fulfilled.
SECTION 8. Conditions to Obligation of Sponsor. The obligation of the Sponsor to
perform its obligations under the Sponsor Agreement is subject to the following conditions:
(a)
Receipt by the Sponsor of the Guaranty Agreement, substantially in the form
provided by Ginnie Mae, duly executed by Ginnie Mae.
(b)
Receipt of the Closing Documents listed in paragraph (b) of Section 7, duly
executed by the parties thereto.
(c)
The satisfaction of all rule-making and notice requirements related to the
transactions contemplated hereunder that are required to be completed prior to the
Closing Date.
(d)
There shall be no pending or threatened action, suit or proceeding before any court
or governmental agency, authority or body involving the Sponsor, an SMBS Trust,
Ginnie Mae or any other party to the transactions contemplated hereby, adversely
affecting any such transaction, or challenging the validity of or seeking to enjoin
such transaction.
(e)
All of the representations and warranties of Ginnie Mae under the Sponsor
Agreement shall be accurate as of the Closing Date.
SECTION 9. Fees and Deposits.
(a)
On the Closing Date, after receiving confirmation from the Accountants and the
Legal Advisor, Trust Counsel will notify the Trustee that the transaction may
close. The Sponsor shall cause funds for payment of the Ginnie Mae Guaranty Fee
to be made available in accordance with the Closing Flow of Funds Instruction
Letter such that, upon notification by Trust Counsel that the transaction may close
and the Trustee’s wiring of the Security identified in the Closing Flow of Funds
Instruction Letter, the Ginnie Mae Guaranty Fee will be released to the Trustee
and submitted to Ginnie Mae via pay.gov.
(b)
The Sponsor shall pay (i) the fees and expenses of the Trust Counsel and the
Accountants and (ii) the expense of circulating an electronic version of the Base
Offering Circular, if required, and the Offering Circular Supplement for the
VI-3-13
transaction, and neither Ginnie Mae nor the Trustee shall have any responsibility
for paying any such fee or expense.
SECTION 10. Indemnification.
(a)
In the event that Ginnie Mae must make any payment pursuant to the Ginnie Mae
Guaranty as a result of the Sponsor’s breach of any of its representations,
warranties, covenants or obligations set forth herein or in an SMBS Trust
Agreement, the Sponsor shall promptly reimburse Ginnie Mae for any payments
made, together with interest thereon for the period from the date of such Ginnie
Mae Guaranty payment through the date of reimbursement at a rate equal to the
rate of interest on three-month United States Treasury securities as of the date of
that Ginnie Mae Guaranty payment.
(b)
In the event that the Sponsor breaches its representations, warranties, covenants or
obligations set forth herein or in an SMBS Trust Agreement, the Sponsor shall
indemnify and hold harmless Ginnie Mae from and against any loss, damages,
penalties, fines, forfeiture, legal fees and related costs, judgements, and other costs
and expenses resulting from any claim, demand, defense or assertion based on or
grounded upon, or resulting from, such breach. Promptly after receipt by Ginnie
Mae of notice of the commencement of any such action, Ginnie Mae will, if a
claim in respect thereof is to be made against the Sponsor, notify the Sponsor in
writing of the commencement thereof, but the omission to so notify the Sponsor
will not relieve the Sponsor from any liability hereunder unless such omission
materially prejudices the rights of the Sponsor. In case any such action is brought
against Ginnie Mae, and Ginnie Mae notifies the Sponsor of the commencement
thereof, the Sponsor will be entitled to participate therein, and to assume the
defense thereof, with counsel satisfactory to Ginnie Mae, and after notice from the
Sponsor to Ginnie Mae of its election so to assume the defense thereof, the
Sponsor will not be liable to Ginnie Mae under this Section for any legal or other
expenses subsequently incurred by Ginnie Mae in connection with the defense
thereof other than reasonable costs of investigation.
(c)
If an indemnification payment is made by the Sponsor to Ginnie Mae as the result
of a breach by the Sponsor of its representation made in paragraph (v) of Section
4, Ginnie Mae will reimburse the Sponsor up to the amount of the payment and
interest thereon at the applicable Certificate Rate, as and only to the extent that
Ginnie Mae is entitled to distributions from an SMBS Trust as a result of a
payment on the Ginnie Mae Guaranty occasioned by the breach of the
representation included in paragraph (v) of Section 4.
SECTION 11. Notices. All demands, notices, approvals and communications hereunder
shall be in writing and shall be deemed to have been duly given if personally delivered to or mailed
by registered mail, postage prepaid, or transmitted by any standard form of written
telecommunications and confirmed by a similar mailed writing, as follows:
(a)
If to Ginnie Mae:
VI-3-14
Government National Mortgage Association
Office of Capital Markets
425 3rd Street S.W., 4th Floor
Washington, D.C. 20024
Attention: Senior Vice President
Telephone: (202) 475-8855
Facsimile: (202) 485-9585
With copies to:
Department of Housing and Urban Development
Office of General Counsel
451 7th Street, S.W., Room 9250
Washington, D.C. 20410
Attention: Assistant General Counsel Ginnie Mae/Finance
Telephone: (202) 402-5196
Facsimile: (202) 708-1999
and the Legal Advisor as of the date of the demand, notice,
approval or communication.
(b)
If to the Sponsor or any other Participant, to the address indicated in the Sponsor
Agreement.
Any party may alter the address to which communications or copies are to be sent by giving
notice of such change of address in conformity with the provisions of this Section for the giving of
notice.
SECTION 12. Severability of Provisions. Any part, provision, representation or warranty
of the Sponsor Agreement that is prohibited or that is held to be void or unenforceable shall be
ineffective to the extent of such prohibition or unenforceability without invalidating the remaining
parts, provisions, representations or warranties hereof. Any part, provision, representation or
warranty of the Sponsor Agreement that is prohibited or unenforceable or is held to be void or
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such
prohibition or unenforceability without invalidating the remaining parts, provisions, representations
or warranties hereof, and any such prohibition or unenforceability in any jurisdiction shall not
invalidate or render unenforceable such provision in any other jurisdiction. To the extent permitted
by applicable law, the parties hereto waive any provision of law that prohibits or renders void or
unenforceable any provision hereof.
SECTION 13. GOVERNING LAW. THE SPONSOR AGREEMENT AND THE
RIGHTS AND OBLIGATIONS OF GINNIE MAE AND THE SPONSOR UNDER THE
SPONSOR AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE UNITED STATES OF AMERICA. INSOFAR AS
THERE MAY BE NO APPLICABLE LAW OF THE UNITED STATES, THE INTERNAL
LAWS OF THE STATE OF NEW YORK (WITHOUT GIVING REGARD TO CONFLICTS OF
LAWS PRINCIPLES OTHER THAN SECTIONS 5-1401 AND 5-1402 OF THE NEW YORK
VI-3-15
GENERAL OBLIGATIONS LAW) SHALL BE DEEMED REFLECTIVE OF THE LAWS OF
THE UNITED STATES OF AMERICA, INSOFAR AS TO DO SO WOULD NOT FRUSTRATE
THE PURPOSES OF ANY PROVISION OF THE SPONSOR AGREEMENT OR THE
TRANSACTIONS GOVERNED THEREBY.
SECTION 14. Survival. Each party agrees that its representations, warranties and
covenants herein, and in any certificate or other instrument delivered pursuant hereto, shall be
deemed to be relied upon by the other party, notwithstanding any investigation heretofore or
hereafter made by the other party or on the other party’s behalf, and that the representations,
warranties and covenants made herein or in any such certificate or other instrument shall survive
the Closing Date.
SECTION 15. Miscellaneous.
(a)
The Sponsor Agreement may be executed in two or more counterparts, each of
which when so executed and delivered shall be an original, and all of which
together shall constitute one and the same instrument. The Sponsor Agreement
shall inure to the benefit of and be binding upon the parties thereto and their
respective successors and assigns.
(b)
Any person into which the Sponsor may be merged or consolidated or any person
resulting from a merger or consolidation involving the Sponsor or any person
succeeding to the business of the Sponsor shall be considered the successor of the
Sponsor under the Sponsor Agreement, without the further act or consent of either
party. The Sponsor Agreement cannot be assigned, pledged or hypothecated by
any party without the written consent of the other party to the Sponsor Agreement.
(c)
The Sponsor Agreement supersedes all prior agreements and understandings
relating to the subject matter thereof. Neither the Sponsor Agreement nor any
term thereof may be changed, waived, discharged or terminated orally, but only by
an instrument in writing signed by the party against whom enforcement of the
change, waiver, discharge or termination is sought. The headings in the Sponsor
Agreement and these Standard Sponsor Provisions are for purposes of reference
only and shall not limit or otherwise affect the meaning thereof.
(d)
Documents executed, scanned and transmitted electronically, and electronic
signatures, shall be deemed original signatures for purposes of the Sponsor
Agreement and all matters related thereto, with such scanned and electronic
signatures having the same legal effect as original signatures. The parties agree
that the Sponsor Agreement, any addendum thereto and the Guaranty Agreement
may be accepted, executed or agreed to through use of an electronic signature in
accordance with applicable eCommerce Laws. Any document accepted, executed
or agreed to in conformity with such eCommerce Laws, by one or both parties,
will be binding on both parties the same as if it were physically executed. The
Sponsor consents to the use of any third party electronic signature capture service
providers and record storage providers as may be chosen by Ginnie Mae.
VI-3-16
SECTION 16. Request for Opinion. The Sponsor hereby requests and authorizes the Trust
Counsel to issue such legal opinions to Ginnie Mae, each SMBS Trust, the Trustee, the Financial
Advisor or the Legal Advisor as may be required by any and all documents, certificates or
agreements executed in connection with the Sponsor Agreement.
SECTION 17. Adjustment to Size of Offering. The Sponsor may increase or decrease the
size of the offering by 10% of the aggregate principal amount of securities identified in the Sponsor
Agreement upon delivery of a written notice to Ginnie Mae no later than one Business Day prior to
the Pool Wire Date. The Ginnie Mae Guaranty Fee will be adjusted to reflect the increase or
decrease in the size of the transaction.
VI-3-17
Exhibit 1
[Sponsor’s Letterhead]
_________ __, 20___
[Dealer Name]
[Dealer Address]
Dear Dealer:
Our records show that your firm has previously executed a Master Agreement with us
concerning the distribution of securities issued by the Federal Home Loan Mortgage Corporation
(“Freddie Mac”) or the Federal National Mortgage Association (“Fannie Mae”). This Agreement
requires compliance with the guidelines on Delivery of Offering Materials relating to Securities of
Government-Sponsored Enterprises (“GSE Guidelines”).
[Name of Sponsor] recently has entered into agreements with the Government National
Mortgage Association (“Ginnie Mae”) to distribute its securities. As a result of certification
requested in these agreements, we would like to amend our Master Agreement with you to include
Ginnie Mae in the definition of the term “issuer”.
This letter will serve as the required amendment. By your signature below, you agree to
comply with the GSE Guidelines with respect to securities guaranteed by Ginnie Mae. Please have
an authorized person sign both copies of this letter in the spaces indicated below and return one letter
to me in the enclosed envelope. Retain the other executed letter for your files.
Thank you for your prompt attention to this matter.
Sincerely,
___________________________________________
(Sponsor Name)
By:________________________________________
VI-3-18
Seen and Agreed:
___________________________________________
(Firm Name)
By:________________________________________
By:_
(Authorized Signatory)
___________________________________________
(Printed Name of Signatory)
___________________________________________
(Title)
VI-3-19
Exhibit 2
Government National Mortgage Association
Supplemental Statement
Guaranteed Stripped Mortgage-Backed Securities,
Ginnie Mae SMBS Trust ___
Reference is made to the Offering Circular Supplement, dated _________ __, 20___, for the
Ginnie Mae SMBS Trust ___ (the “Offering Circular Supplement”) and the related Base Offering
Circular, dated _________ __, 20___ (the “Base Offering Circular” and, together with the Offering
Circular Supplement, the “Offering Circular”). Capitalized terms used herein and not otherwise
defined herein shall have the respective meanings assigned to them in Appendix II to the Base
Offering Circular.
[Note to Trust Counsel: Insert disclosure regarding any material changes in investment
characteristics of the applicable Classes or material changes to the disclosure.]
_________ __, 20___
VI-3-20
Exhibit 3
____________ __, 2___
Government National Mortgage Association
Office of Capital Markets
425 3rd Street SW, 4th Floor
Washington, D.C. 20024
Re:
Ginnie Mae Guaranteed Stripped Mortgage-Backed Securities,
Ginnie Mae SMBS Trust ___
Ladies and Gentlemen:
We confirm that we have informed or will inform the purchasers from us of the Class __
Securities that [ ] [Note to Trust Counsel: Insert additional material changes in investment
characteristics of applicable Classes.] [We also have informed or will inform such purchasers that a
Supplemental Statement reflecting such material changes in investment characteristics will be posted
to ginniemae.gov.] Capitalized terms used and not otherwise defined herein shall have the meanings
assigned to them in the Base Offering Circular for Ginnie Mae Guaranteed Stripped MortgageBacked Securities, dated _________ __, 20___.
[The persons at each of the purchasers with whom we ordinarily negotiate trades have each
informed us that either (A) the purchaser’s decision to purchase the Class __ Securities has not been
affected by [
] [Note to Trust Counsel: Insert additional material changes in investment
characteristics of applicable Classes.] or (B) the terms of the sale to the purchaser have been revised
to the purchaser’s satisfaction.] [Note to Trust Counsel: Use following bracketed language when
the affected securities have not been sold.] [As of today, no part of the Class ___ Securities has been
sold.] For the initial distribution period, if we buy or sell any of the Class ___ Securities, we will be
responsible for disclosing to our customers the [see Note to Trust Counsel in (A) above].
We acknowledge that you are agreeing to proceed with the closing of Ginnie Mae SMBS
Trust ___ upon reliance upon the representations in this certificate.
[SPONSOR]
By: _____________________________________
[Title of Signatory]
VI-3-21
FORM OF SPONSOR AGREEMENT FOR SMBS TRANSACTIONS
SPONSOR AGREEMENT
GINNIE MAE SMBS TRUST ___
THIS SPONSOR AGREEMENT is entered into as of _________
_ __, 20___, by and between
the GOVERNMENT NATIONAL MORTGAGE ASSOCIATION (“Ginnie Mae”) and
___________, a(n) ___________ corporation (the “Sponsor”) in connection with the issuance by the
$__________ aggregate principal amount of
Ginnie Mae SMBS Trust ___ of approximately $___
Securities.
SECTION 1. Standard Sponsor Provisions.
The parties acknowledge and agree that the terms of the Standard Sponsor Provisions for
Ginnie Mae SMBS Securities, _________ __, 20___ Edition, are herein incorporated by reference
and constitute part of this Sponsor Agreement as if set forth herein in full.
SECTION 2. Dates.
The Pool Information Date shall be _________ __, 20___; the Pool Wire Date shall be
_________ __, 20___; and the Closing Date shall be _________
_ __, 20___. These dates may not be
changed without the written approval of Ginnie Mae.
SECTION 3. Fees.
Based upon the information regarding the Securities set forth in the Offering Circular
$____________ but will be adjusted if the size of
Supplement, the Ginnie Mae Guaranty Fee will be $_
the transaction increases or increases. [Note to Trust Counsel: The Ginnie Mae Guaranty Fee is an
amount that equals the product of 0.03125% and the aggregate Class Principal Balance of the
Securities as of the Closing Date.∗
SECTION 4. Notices.
Sponsor:
∗
The Ginnie Mae Guaranty Fee is subject to change by Ginnie Mae.
VI-4-1
Attention:
Telephone:
Telecopy:
Participating Affiliate(s)
of the Sponsor:
Attention:
Telephone:
Telecopy:
Trust Counsel:
Attention:
Telephone:
Telecopy:
VI-4-2
Accountants:
Attention:
Telephone:
Telecopy:
Trustee:
Attention:
Telephone:
Telecopy:
Trustee’s Counsel:
Attention:
Telephone:
Telecopy:
VI-4-3
SECTION 5. Modifications to Standard Sponsor Provisions.
The parties acknowledge and agree that the following modifications of the Standard Sponsor
Provisions shall apply to the Securities: [NONE.]
VI-4-4
IN WITNESS WHEREOF, the parties have caused this Sponsor Agreement to be executed and
delivered by their duly authorized representatives as of the day and year first above written.
GOVERNMENT NATIONAL MORTGAGE ASSOCIATION
By:
Its:
[SPONSOR], as Sponsor
By:
Its:
VI-4-5
BASE OFFERING CIRCULAR FOR SMBS TRANSACTIONS
[available upon request from Ginnie Mae’s Legal Advisor]
VI-5-0
FORM OF OFFERING CIRCULAR SUPPLEMENT
FOR SMBS TRANSACTIONS
[available upon request from Ginnie Mae’s Legal Advisor]
VI-6-0
FORM OF ACCOUNTANTS’ AGREED-UPON PROCEDURES
LETTER CONCERNING THE OFFERING CIRCULAR FOR SMBS TRANSACTIONS
[available upon request from Ginnie Mae’s Financial Advisor]
VI-7-0
FORM OF GUARANTY AGREEMENT FOR SMBS TRANSACTIONS
GINNIE MAE SMBS SECURITIES GUARANTY AGREEMENT
Pursuant to Section 306(g) of the National Housing Act, the Government National Mortgage
Association (“Ginnie Mae”) hereby guarantees the timely payment of principal and interest on the
Ginnie Mae SMBS Securities in accordance with the terms as established by the Trust Agreement,
dated as of _________ __, 20___ relating to Ginnie Mae SMBS Trust ___ (the “SMBS Trust
Agreement”).
Ginnie Mae hereby authorizes the Trustee under the SMBS Trust Agreement to issue the Securities
provided for issuance thereunder, each of which Security shall be entitled to the benefits of the
guaranty set forth below:
GUARANTY: THE GOVERNMENT NATIONAL MORTGAGE ASSOCIATION,
PURSUANT TO SECTION 306(g) OF THE NATIONAL HOUSING ACT,
GUARANTEES THE TIMELY PAYMENT OF PRINCIPAL AND INTEREST ON
THIS SECURITY IN ACCORDANCE WITH THE TERMS AND CONDITIONS SET
FORTH HEREIN AND IN THE SMBS TRUST AGREEMENT. THE FULL FAITH
AND CREDIT OF THE UNITED STATES OF AMERICA IS PLEDGED TO THE
PAYMENT OF ALL AMOUNTS THAT MAY BE REQUIRED TO BE PAID UNDER
THIS GUARANTY.
[THE GOVERNMENT NATIONAL MORTGAGE
ASSOCIATION DOES NOT GUARANTEE PAYMENTS OF PREPAYMENT
PENALTES ON THIS SECURITY.]
Capitalized terms used and not otherwise defined herein shall have the meanings assigned to them in
the SMBS Trust Agreement.
IN WITNESS WHEREOF, Ginnie Mae has executed and delivered this Guaranty Agreement as of
the date set forth below.
GOVERNMENT NATIONAL MORTGAGE ASSOCIATION
By:_________________________________________________
Dated: [closing date], 20___
VI-8-1
FORM OF ISSUANCE STATEMENT FOR SMBS TRANSACTIONS
ISSUANCE STATEMENT
[Trustee]
Ginnie Mae SMBS Trust ___
The Sponsor hereby instructs the Trustee, on behalf of the Ginnie Mae SMBS Trust ___,
to authorize the issuance of the Securities identified in Schedule A (the “Schedule”) in bookentry form through the facilities of the Book-Entry Depository for the account of [the
Sponsor][insert name of Sponsor’s repo lender] on the Closing Date. The Securities shall be
issued in the denominations specified in the Schedule under the column designated as
“Denomination (or “Par Amount”) to be issued at Closing”. Capitalized terms used herein and
not otherwise defined shall be given the meanings assigned to them in the Trust Agreement,
dated as of _________ __, 20___, by and between the Sponsor and the Trustee.
The undersigned acknowledges that the Schedule accurately describes the Securities to be
issued in book-entry form at closing.
[Sponsor]
By:
Its:
[Note to Trust Counsel: The Issuance Statement must be provided to the Trustee no later than
the Pool Wire Date, which is generally two Business Days prior to closing.]
VI-9-1
SCHEDULE A: SMBS CLASSES
DENOMINATION (OR
“PAR AMOUNT”)
TO BE ISSUED
AT CLOSING
CLASS
†
MAXIMUM
CLASS PRINCIPAL (OR
NOTIONAL) BALANCE
CUSIP
†
________________________________
[†
Notional balance.]
VI-9-2
FORMS OF TRUSTEE’S RECEIPT AND SAFEKEEPING AGREEMENT
FOR SMBS TRANSACTIONS
TRUSTEE’S RECEIPT AND SAFEKEEPING AGREEMENT
[INSERT POOL WIRE DATE] _________ __, 20___
Government National Mortgage Association
Office of Capital Markets
425 3rd Street SW, 4th Floor
Washington, D.C. 20024
[Sponsor’s Name] (the “Sponsor”)
[Sponsor’s Address]
Ginnie Mae SMBS Trust [___]
Ladies and Gentlemen:
___________________________, as trustee (the “Trustee”) under a trust agreement (the
“SMBS Trust Agreement”), dated as of _________ __, 20____, between the Trustee and
______________ (the “Sponsor”), acknowledges receipt of the Trust Assets listed on Schedule A
attached to this letter (the “Trust Assets”). Capitalized terms not otherwise defined herein shall have
the meanings assigned to them in the glossary contained in the Ginnie Mae Multiclass Securities
Guide currently in effect.
The Trustee has received the Trust Assets through the facilities of [
] (the
“Trust Asset Depository”), which has credited the Trust Assets to a limited purpose account at the
Trust Asset Depository. [NOTE TO TRUST COUNSEL: If the Trust Assets include any Trust
MBS, Underlying SMBS Securities or Underlying Certificates that are held in the book-entry
facilities of more than one depository, identify such other depositories].
The Trustee confirms that it is holding, and at all times prior to settlement on _________ __,
20___ (the “Closing Date”) will hold, the Trust Assets in one or more segregated accounts in the
name of and solely for the benefit of [the Sponsor] [the Sponsor’s Participating Affiliates]. The
Trustee has made appropriate entries on its books and records to show that it is so holding the Trust
Assets, and the Trust Assets are not subject to any right, charge, security interest, lien or claim of any
kind in favor of the Trustee or any Person claiming through it.
All of the Trust Assets, described in the attached list and having an aggregate current face
value of $________________, are held by the Trustee as the Sponsor’s agent and subject to the
Sponsor’s further instructions. In the event that there is no settlement on the Closing Date, the
Trustee will release the Trust Assets in accordance with the instructions of the [Sponsor or its
Participating Affiliates].
VI-10-1
Upon settlement (if any) on the Closing Date, the Trustee will deliver in accordance with the
instructions of the [Sponsor] the securities representing the Ginnie Mae SMBS Trust ___ Guaranteed
Stripped Mortgage-Backed Securities, and the Trustee thereupon will hold the Trust Assets in the
name of and solely on behalf of the Ginnie Mae SMBS Trust ___.
*
*
*
*
*
Unless otherwise instructed by the Sponsor, if any distributions on the Trust Assets are
received by the Trustee prior to settlement on the Closing Date, the Trustee will remit such
distributions to the Sponsor.
Very Truly Yours,
[TRUSTEE], as Trustee
By: ________________
Its: _______________
cc:
[Accountants’ Name]
[Accountants’ Address]
VI-10-2
TRUSTEE’S RECEIPT AND
SAFEKEEPING AGREEMENT (FOR USE WITH REPO LENDERS)
[INSERT POOL WIRE DATE] _________ __, 20___
Government National Mortgage Association
Office of Capital Markets
425 3rd Street SW, 4th Floor
Washington, D.C. 20024
[Sponsor’s Name] (the “Sponsor”)
[Sponsor’s Address]
[Intermediary Bank (the “Intermediary Bank”)
Intermediary Bank’s Address]
Ginnie Mae SMBS Trust [__]
Ladies and Gentlemen:
___________________________, as trustee (the “Trustee”) under a trust agreement to be
dated as of _________ __, 20___, acknowledges receipt of the Trust Assets listed on Schedule A
attached to this letter (the “Trust Assets”). Capitalized terms not otherwise defined herein shall have
the meanings assigned to them in the glossary contained in the Ginnie Mae Multiclass Securities
Guide currently in effect.
The Trustee confirms that it is holding, and at all times prior to settlement on
_____________________ ___, 20___ (the “Closing Date”) will hold, the Trust Assets in one or
more segregated accounts in the name of and solely for the benefit of the Intermediary Bank. The
Trustee has made appropriate entries on its books and records to show that it is so holding the Trust
Assets, and the Trust Assets are not subject to any right, charge, security interest, lien or claim of any
kind in favor of the Trustee or any Person claiming through the Trustee.
All of the Trust Assets, described in the attached list and having an aggregate current face
value of $________________, are held by the Trustee solely as the Intermediary Bank’s agent and
subject to the instructions described herein. In the event that there is no settlement on the Closing
Date, the Trustee will release the Trust Assets solely in accordance with the instructions of the
Intermediary Bank.
Upon settlement (if any) on the Closing Date, the Trustee will deliver in accordance with the
delivery instructions of the Intermediary Bank, which delivery instructions may be standing
instructions (that the Sponsor irrevocably authorizes the Trustee to follow) the securities representing
the Ginnie Mae SMBS Trust ___ Guaranteed Stripped Mortgage-Backed Securities (the “SMBS ___
Securities”), and the Trustee thereupon will hold the Trust Assets in the name of and solely on behalf
of the Ginnie Mae SMBS Trust ___. On the Closing Date, concurrent with the settlement and
VI-10-3
delivery of the SMBS ___ Securities to the Intermediary Bank, the Trustee’s obligations to hold the
Trust Assets on behalf of the Intermediary Bank will automatically terminate.
If the Intermediary Bank fails to provide delivery instructions to the Trustee, the Trustee shall
continue to hold the SMBS ___ Securities for the Intermediary Bank until its delivery instructions are
received.
The Trustee shall have no liability to the Sponsor, the Intermediary Bank or any other entity
related to any transaction involving the SMBS ___ Securities, provided that the Trustee has made at
least one attempt to deliver the SMBS ___ Securities on the Closing Date in accordance with the
instructions provided to it by the Intermediary Bank.
The Sponsor agrees to indemnify and hold each of Ginnie Mae and the Trustee harmless
from and against any and all losses, claims, damages, liabilities and expenses arising out of or in
connection with the Trustee’s holding of the Trust Assets and its delivery of the Trust Assets in
accordance with the Intermediary Bank’s instructions.
* * * * *
Unless otherwise instructed by the Intermediary Bank, if any distributions on the Trust Assets
are received by the Trustee prior to settlement on the Closing Date, the Trustee will remit such
distributions to the Sponsor.
Unless otherwise notified by the Sponsor or the Intermediary Bank after receipt of this
Trustee’s Receipt and Safekeeping Agreement (the “Trustee’s Receipt”) that the terms hereof are
unacceptable, the terms of this Trustee’s Receipt shall be deemed conclusively to be acceptable to the
Sponsor and the Intermediary Bank; provided, however, that in the event of any such notification, no
change shall be made hereto without the consent of Ginnie Mae and the Intermediary Bank.
Very Truly Yours,
[TRUSTEE], as Trustee
By: ________________
Its: _______________
cc:
[Accountants’ Name]
[Accountants’ Address]
VI-10-4
FORM OF CLOSING FLOW OF FUNDS LETTER
FOR SMBS TRANSACTIONS
CLOSING FLOW OF FUNDS INSTRUCTION LETTER
REGARDING THE TRANSFER OF FUNDS
BY THE SPONSOR TO THE TRUSTEE
AND THE SUBSEQUENT DISBURSEMENT OF FUNDS
BY THE TRUSTEE TO GINNIE MAE
_________ __, 20___
[Trustee]
Ginnie Mae SMBS Trust [___]
Ladies and Gentlemen:
Reference is hereby made to the above-referenced transaction which is scheduled to close on the date
hereof (the “Closing Date”). Capitalized terms used but not defined herein have the meaning
ascribed to them in the Sponsor Agreement related to the above-referenced transaction. On the
Closing Date, using a delivery versus payment function, simultaneously upon transfer to us (or our
designee) of the Class ____ Securities [NOTE TO TRUST COUNSEL: Insert the name of an
SMBS Security to be issued as of the Closing Date] of the above-referenced trust, we shall transfer to
you $__________ representing the Ginnie Mae Guaranty Fee, which shall be disbursed to Ginnie
Mae to cover the fees and expenses of those persons who are to be paid from the proceeds of the
transaction. We hereby instruct you to disburse such amount to Ginnie Mae via pay.gov.
*
*
*
*
*
*
VI-11-1
If you have any questions, please call Ginnie Mae’s Office of Capital Market division at
(202) 475-7820.
Very truly yours,
[Sponsor]
By:______________________________
Its:______________________________
Its:
cc:
Ginnie Mae Office of Capital Markets
[NOTE: THE EXECUTED VERSION OF THIS DOCUMENT SHOULD BE SCANNED AND
E-MAILED TO THE FOLLOWING PERSON AT GINNIE MAE’S OFFICE OF CAPITAL
MARKET DIVISION: [email protected]]
VI-11-2
FORM OF TRUST AGREEMENT FOR SMBS TRANSACTIONS
GOVERNMENT NATIONAL MORTGAGE ASSOCIATION
GUARANTEED STRIPPED MORTGAGE-BACKED SECURITIES
GINNIE MAE SMBS TRUST [
]
TRUST AGREEMENT
between
______________________________,
as Sponsor,
and
_____________________________,
as Trustee
DATED AS OF
_________ __, 20___
VI-12-1
TRUST AGREEMENT
THIS TRUST AGREEMENT, dated as of _________
____ __, 20___, is entered into by and
_____________________________________,, [a][an] ___
________________ [corporation]
between ___
[limited liability company][limited partnership][general partnership] (the “Sponsor”), and
_____________________________________,, [a][an] ___
________________ banking [corporation]
[association], as trustee (the “Trustee”).
Section 1. Standard Trust Provisions. The Standard Trust Provisions for Ginnie Mae
SMBS Trusts dated as of _________ __, 20___[, as amended through _________ __, 20___]
(the “SMBS Standard Trust Provisions”) are herein incorporated by reference and shall be
considered a part of this Trust Agreement as if set forth herein in full.
Section 2. Defined Terms. Capitalized terms used in this Trust Agreement shall have
the meanings set forth below and in Article I of the SMBS Standard Trust Provisions, provided
that the meanings below shall be controlling in the case of any conflict with the SMBS Standard
Trust Provisions. Capitalized terms used and not otherwise defined in this Trust Agreement shall
have the meanings assigned to them in the Glossary contained in the Ginnie Mae Multiclass
Securities Guide, _________ __, 20___ Edition as supplemented by the glossary in the Base
Offering Circular for Guaranteed Stripped Mortgage-Backed Securities dated _________ __,
20___, and the Terms Sheet in the Ginnie Mae SMBS Trust ___ Offering Circular Supplement
attached hereto as Schedule A; provided that the definitions in such Glossary which themselves
use capitalized terms defined in this Trust Agreement will be interpreted using the meaning for
such capitalized terms set forth in this Trust Agreement.
“Closing Date”: _________ __, 20___.
“Corporate Trust Office”: _____________________.
“Co-Trust Counsel”: _____________________.
“Distribution Date”: [The 16th day of each month or if the 16th day is not a Business Day, the
first Business Day, commencing in _________ __, 20___.] [The 20th day of each month or if the
20th day is not a Business Day, the first Business Day thereafter, commencing in _________ __,
20___.]
“Final Data Statement”: The statement attached to the Accountants’ Agreed-Upon
Procedures Letter as of the Closing Date as Schedule B, a copy of which is attached hereto. [The
Final Data Statement separately identifies the Trust Assets in each Trust Asset Group and the Group
T Trust Assets.]
[“Group T Trust Assets”: The assets underlying Group T, as identified on Schedule B.]
“Offering Circular Supplement”: The Offering Circular Supplement for Ginnie Mae SMBS
Trust ___, dated _________ __, 20___.
“Registrar”: The Trustee.
VI-12-2
“Sponsor”: The entity identified as such on the cover page hereof.
“Sponsor Agreement”: The Sponsor Agreement relating to the Ginnie Mae SMBS Trust
___, by and between the Sponsor and Ginnie Mae, dated _________ __, 20__.
“Tax Administrator”: The Trustee.
“Trust Assets”: Collectively, the certificates listed in the Final Data Statement.
“Trust Counsel”: ______________________________.
“Trustee”: The entity identified as such on the cover page hereof, or its successor in interest,
or any successor trustee appointed as herein provided.
“Trustee Fee”: [All principal and interest distributions on the Group T Trust Assets.]
[__________ of all principal and interest distributions received on the Trust Assets.]
“Trust Fund”: The corpus of the trust established hereby, consisting of: (a) the Trust Assets
and all distributions thereon on or after the first day of the month following the month in which the
Closing Date occurs, (b) all of the Sponsor’s right, title and interest in, but none of the Sponsor’s
obligations under, the Sponsor Agreement, (c) the Trust Accounts, and (d) any proceeds of the
foregoing.
[“Waiver Agreement”: The agreement executed by the [related] Contracted Security
Purchaser, dated not later than [PRINT DATE], 20__, that is substantially in the form attached hereto
as Exhibit 2.]
Section 3. Conveyance to the Trustee. In consideration of all of the Securities issued
hereunder, the receipt of which is hereby acknowledged by the Sponsor, the Sponsor does hereby
sell, assign, transfer and convey to the Trustee, in trust for the benefit of the Holders, all of the
Sponsor’s right, title and interest in and to the Trust Fund.
Section 4. Acceptance by the Trustee. By its execution of this Trust Agreement, the
Trustee acknowledges receipt of the Trust Fund and declares that it holds and will hold the Trust
Fund in trust for the exclusive use and benefit of all present and future Holders pursuant to the
terms of this Trust Agreement. The Trustee represents and warrants that (a) the Trustee holds
the Trust Assets through the facilities of the applicable Depository, [each of] which has credited
the Trust Assets to the related Depository Account, (b) the information relating to the Trust
Assets set forth on the Trustee’s Receipt Schedule A conforms to information provided to the
Trustee by the applicable Depository, (c) the Trustee acquired the Trust Assets on behalf of the
Trust from the Sponsor in good faith, for value, and without notice or knowledge of any adverse
claim, lien, charge, encumbrance or security interest (including, without limitation, federal tax
liens or liens arising under ERISA), (d) except as permitted in this Trust Agreement, the Trustee
has not and will not, in any capacity, assert any claim or interest in the Trust Assets, [and] (e) the
Trustee has not encumbered or transferred its right, title or interest in the Trust Assets[.][, (f)
with respect to each Deposited Ginnie Mae Construction Loan Certificate, the right of the
Trustee and each future holder of any such Ginnie Mae Construction Loan Certificate to
withhold its consent to one or more extensions of the applicable Maturity Date for a period that,
VI-12-3
in the aggregate, may not exceed the term of the underlying Mortgage Loan insured by FHA, has
been irrevocably waived by the Contracted Security Purchaser pursuant to the applicable Waiver
Agreement and (g) with respect to each Deposited Ginnie Mae Construction Loan Certificate, the
Trustee will not consent to any extension of the Maturity Date for a period in excess of the term
of the underlying Mortgage Loan insured by FHA.]
Section 5. The Securities. The Securities will be designated generally as Ginnie Mae
Guaranteed Stripped Mortgage-Backed Securities, Ginnie Mae SMBS Trust ___. The aggregate
principal amount of Securities that may be executed and delivered under this Trust Agreement is
limited to $__________________, except for Securities executed and delivered upon registration
of, or transfer of, or in exchange for, or in lieu of, other Securities. The (i) designation, (ii)
Original Class Principal Balance [(or original Class Notional Balance)], (iii) Interest Rate, (iv)
Interest Type, (v) Principal Type, (vi) CUSIP Number and (vii) Final Distribution Date for the
Securities are set forth on the cover page and page S-__ of the Offering Circular Supplement
attached hereto as Schedule A.
The Securities shall be issued in book-entry form in the denominations specified in the
Issuance Statement attached hereto as Exhibit 1.
Section 6. Distributions to Holders. On each Distribution Date, the Trustee (or the
Paying Agent on behalf of the Trustee) shall withdraw the Distribution Amount for each Class
from the Trust Accounts in accordance with Section 4.04 and Section 4.06 of the SMBS
Standard Trust Provisions and shall distribute such amount on a pro rata basis among the
Outstanding Securities of such Class.
Section 7. Modification of the SMBS Standard Trust Provisions. The following
modifications of the SMBS Standard Trust Provisions shall apply to the Securities:
[NONE]
[Insert other modifications, if necessary]
Section 8. Schedules and Exhibits. Each of the Schedules and Exhibits attached hereto
or referenced herein is incorporated herein by reference.
* * * * *
VI-12-4
IN WITNESS WHEREOF, the Sponsor and the Trustee have caused this Trust Agreement to be duly
executed by their respective officers thereunto duly authorized as of the day and year first above
written.
[SPONSOR], as Sponsor
By: ____________________________________
Its: _____________________________________
[TRUSTEE], as Trustee
By: ____________________________________
Its: _____________________________________
VI-12-5
STATE OF [NEW YORK]
)
) ss.:
__________
COUNTY OF ________
)
The foregoing instrument was acknowledged before me in the County of _________,
____________,
__, this ____ day of _________ __, 20___, by _______________________,,
_____________ of _______________________,, a __
__________________ [corporation] [limited
liability company][limited partnership][general partnership], on behalf of the [corporation] [limited
liability company][limited partnership][general partnership].
_______________________________
Notary Public
My Commission expires: _________________
VI-12-6
________________
STATE OF __________
)
) ss.:
______________
COUNTY OF ________
)
The foregoing instrument was acknowledged before me in the County of __________,
_______________,
________________,
__, this ____ day of _________ __, 20___, by __
__, _____________
of _____________________________________,, [a][an] ________________ banking [corporation]
[association], on behalf of the [corporation] [association].
_______________________________
Notary Public
My Commission expires: _________________
VI-12-7
LIST OF SCHEDULES AND EXHIBITS
Schedule A:
Front Cover, Page S-__ and Terms Sheet of Offering Circular Supplement
Schedule B:
Final Data Statement
Exhibit 1:
Issuance Statement
[NOTE: FOR MULTIFAMILY DEALS WITH CLCS:
Exhibit 2:
Form of Waiver Agreement]
VI-12-8
Exhibit 1
Issuance Statement
See Section 9 of this Part VI of the Guide for the Form of Issuance Statement for SMBS
Transactions.
Exhibit 1
VI-12-9
Exhibit 2
FORM OF WAIVER AGREEMENT
FOR SMBS WITH TRUST ASSETS
THAT INCLUDE CONSTRUCTION LOAN CERTIFICATES
[Contracted Security Purchaser Letterhead]
_________ __, 20___
To the Ginnie Mae Issuer identified on
Schedule I hereto (the “Ginnie Mae CLC Issuer”)
Chapter 32 of the Ginnie Mae Mortgage-Backed Securities Guide 5500.3, as amended (the
“MBS Guide”) requires that the contracted security purchaser, the entity bound under contract
with the related Ginnie Mae Issuer to purchase all of the Ginnie Mae Construction Loan
Certificates related to a specific property, consent to any request of the related Ginnie Mae Issuer
to extend the applicable Maturity Date (subject to certain restrictions as specified below). The
consent requirement restricts the use of Ginnie Mae Construction Loan Certificates as Trust
Assets in Government National Mortgage Association (“Ginnie Mae”) multiclass securities
transactions. For the purpose of ensuring the efficient commencement and continued operation
of the Ginnie Mae Multiclass Securities Program as it relates to Ginnie Mae Construction Loan
Certificates and in consideration of Ginnie Mae’s guaranty of the Ginnie Mae Guaranteed
Stripped Mortgage-Backed Securities to be issued pursuant to the trust agreement relating to the
Ginnie Mae SMBS Trust ____ dated as of _________
_____ __, 20___ (such trust, the “Trust” and
such trust agreement, the “Trust Agreement”), __________ (“_____”), in its capacity as
contracted security purchaser of (x) the Ginnie Mae Construction Loan Certificates identified on
Schedule I hereto and each related Ginnie Mae Construction Loan Certificate, if any, outstanding
as of the date hereof (the "Outstanding CLCs") and (y) any Ginnie Mae Construction Loan
Certificate related to any Outstanding CLC that may be issued in the future (the “Future CLCs,”
together with the Outstanding CLCs, the “Ginnie Mae CLCs”), waives its right and the right of
all future holders of each Ginnie Mae CLC, including __________ as Trustee, (the “Trustee”)
and the assignee of __________’s
’s right in certain of the Outstanding CLCs, to withhold consent
to any request that may be made by the Ginnie Mae CLC Issuer, in its capacity as the issuer of
the related Ginnie Mae CLCs, to extend the applicable Maturity Date of any such Ginnie Mae
CLCs (provided that the length of any such extension, together with all previously granted
extensions in respect of the applicable Ginnie Mae CLCs, may not exceed the term of the
underlying Mortgage Loan insured by the Federal Housing Administration). The waiver and the
agreements contained herein shall bind and inure to the benefit of __________ and its successors
and assigns, and shall inure to the benefit of Ginnie Mae and the Trust.
__________ hereby agrees to notify the Trustee of the foregoing waiver and to take any further
action as may be reasonably requested by the Ginnie Mae CLC Issuer or Ginnie Mae to give
effect to the foregoing waiver.
Exhibit 2 - 1
VI-12-10
Nothing contained herein shall be deemed or construed to constrain or otherwise limit any rights
Ginnie Mae may have to deny a request for the extension of the Maturity Date of any Ginnie
Mae CLC for any reason (other than the failure of the Ginnie Mae CLC Issuer to obtain the
consent of the contracted security purchaser of the applicable Ginnie Mae CLCs for any
extension within the scope of this waiver).
Nothing contained herein shall be deemed or construed to relieve the Ginnie Mae CLC Issuer of
its obligation to pay __________ any extension fee that may become payable under the Trade
Confirmation between the Ginnie Mae CLC Issuer and __________ with respect to the related
Outstanding CLCs (and any Future CLCs) set forth on Schedule I.
In the event the Ginnie Mae CLC Issuer requests an extension of the Maturity Date of any
related Ginnie Mae CLCs, the Ginnie Mae CLC Issuer may submit this waiver to Ginnie Mae in
lieu of any document evidencing the consent of the contracted security purchaser of the Ginnie
Mae CLCs to any such extension request.
This agreement shall be governed by and construed in accordance with the laws of the United
States of America. Insofar as there may be no applicable law of the United States, the internal
laws of the State of New York (without giving regard to conflict of laws principles) shall be
deemed reflective of the laws of the United States of America, insofar as to do so would not
frustrate the purposes of any provision of the Trust Agreement or the transactions governed
thereby.
Capitalized terms used herein and not otherwise defined shall have the meaning assigned thereto
in Appendix II to the Ginnie Mae Multifamily Base Offering Circular dated as of __________..
Please do not hesitate to contact __________ at __________ at __________ if you have any
questions regarding this matter.
Respectfully yours,
____________________
By:
Its:
Exhibit 2 - 2
VI-12-11
cc:
Government National Mortgage Association
Office of Capital Markets
425 3rd Street, S.W., 4th Floor
Washington, D.C. 20024
__________,, as Trustee
[Trustee Address]
Attention: [ ]
Ginnie Mae SMBS Trust ___
c/o __________,, as Trustee
[Trustee Address]
Attention: [ ]
Exhibit 2 - 3
VI-12-12
Schedule I
OUTSTANDING CLCs
Each Ginnie Mae Construction Loan Certificate having any of the following Pool
Numbers, as described in greater detail on Exhibit A to the Ginnie Mae SMBS Trust ____
Offering Circular Supplement, a copy of which is attached hereto:
Ginnie Mae Issuer
Outstanding CLCs
Acknowledged
By:_____________________
Its:______________________
Exhibit 2 - 3
VI-12-13
______________________________________________________________________________
STANDARD TRUST PROVISIONS
FOR GINNIE MAE SMBS TRUSTS
______________________________
GOVERNMENT NATIONAL MORTGAGE ASSOCIATION
GUARANTEED STRIPPED MORTGAGE-BACKED SECURITIES
____________
July 1, 2023 Edition
______________________________________________________________________________
VI-13-1
TABLE OF CONTENTS
ARTICLE I
DEFINITIONS....................................................................................................44
DEFINITIONS
ARTICLE II
ESTABLISHMENT OF TRUST ........................................................................55
Section 2.01.
Section 2.02.
Section 2.03.
Section 2.04.
Section 2.05.
Section 2.06.
ARTICLE III
Section 3.01.
Section 3.02.
Section 3.03.
Section 3.04.
Section 3.05.
ARTICLE IV
Section 4.01.
Section 4.02.
Section 4.03.
Section 4.04.
Section 4.05.
Section 4.06.
Section 4.07.
Section 4.08.
ARTICLE V
Section 5.01.
Section 5.02.
Section 5.03.
ARTICLE VI
Section 6.01.
Section 6.02.
Section 6.03.
Section 6.04.
Section 6.05.
Establishment of Trust. ...................................................................................55
Conveyance of Trust Assets
Assets............................................................................55
Assets............................................................................55
Registration of Trust Assets.
Securities......................................................................................66
Delivery of Securities
Board Approval of Trust Agreement. .............................................................66
Separate Grantor Trusts. .................................................................................66
THE SECURITIES .............................................................................................66
Forms and Denominations of Securities. ........................................................66
Method of Distribution
Distribution....................................................................................66
Authorization, Issuance and Delivery of Securities........................................7
Securities
7
Registration of Securities. ...............................................................................77
Exchange of Securities for Other Securities or Trust MBS. ...........................77
DISTRIBUTIONS ON THE SECURITIES .......................................................99
Accounts..............................................................................99
Establishment of Accounts
Certificate Factors and Series Factors...........................................................10
Factors
10
Payments...............................................................................12
Application of Payments.
12
Distributions on the Securities. .....................................................................13
13
Conversion of Deposited Ginnie Mae Construction Loan Certificates. .......15
15
Reconciliation Process. .................................................................................15
15
Appointment of Information Agent. .............................................................15
15
Annual Reports. ............................................................................................15
15
REPRESENTATIONS, WARRANTIES AND COVENANTS ......................16
16
Representations and Warranties of the Sponsor. ..........................................16
16
Representations and Warranties of the Trustee.............................................17
Trustee
17
Substitution.................................17
Sponsor Breach; Repurchase Obligation; Substitution
17
CONCERNING THE TRUSTEE .....................................................................18
18
Duties of Trustee...........................................................................................18
Trustee.
18
Certain Matters Affecting the Trustee. .........................................................18
18
Trustee Not Liable for Securities. .................................................................20
20
Trustee May Own Securities.........................................................................20
Securities
20
Payment of Trustee’s Fees and Expenses. ....................................................20
20
2
VI-13-2
Section 6.06.
Section 6.07.
Section 6.08.
Section 6.09.
Section 6.10.
Section 6.11.
Section 6.12.
Section 6.13.
Eligibility Requirements for Trustee
Trustee.............................................................20
20
Resignation and Removal of the Trustee. .....................................................21
21
Successor Trustee..........................................................................................22
Trustee.
22
Appointment of Co-Trustee. .........................................................................23
23
Trustee..............................................................23
Merger or Consolidation of Trustee
23
Indemnification of HUD and Ginnie Mae. ...................................................23
23
Performance Reviews by Ginnie Mae. .........................................................24
24
Securities.24
Voting of the Underlying Certificates or the Underlying SMBS Securities.
24
ARTICLE VII
TERMINATION ...............................................................................................24
24
ARTICLE VIII
MISCELLANEOUS PROVISIONS.................................................................25
PROVISIONS
25
Section 8.01.
Section 8.02.
Section 8.03.
Section 8.04.
Section 8.05.
Section 8.06.
Section 8.07.
Section 8.08.
Section 8.09.
Section 8.10.
Section 8.11.
Section 8.12.
Limitation of Rights of Holders. ...................................................................25
25
Control by Holders
25
Holders........................................................................................25
Amendment of Trust Agreements.................................................................25
Agreements
25
Persons Deemed Owners. .............................................................................26
26
Third-Party Beneficiary; Ginnie Mae Subrogation.......................................26
Subrogation.
26
Preemption. ...................................................................................................26
26
Governing Law. ............................................................................................26
26
Successors. ....................................................................................................27
27
Headings........................................................................................................27
Headings
27
Notice and Demand.......................................................................................27
Demand
27
Severability of Provisions. ............................................................................28
28
Counterparts. .................................................................................................28
28
ARTICLE IX
Section 9.01.
Section 9.02.
TAX ADMINISTRATOR ................................................................................28
28
Tax Administration. ......................................................................................28
28
Resignation and Removal of the Tax Administrator. ...................................30
30
3
VI-13-3
STANDARD TRUST PROVISIONS
FOR GINNIE MAE SMBS TRUSTS
THESE STANDARD TRUST PROVISIONS FOR GINNIE MAE SMBS TRUSTS are
to be incorporated by reference in each Trust Agreement entered into by and between a Sponsor
and a Trustee in connection with each Series of Ginnie Mae’s Guaranteed Stripped MortgageBacked Securities and shall apply to each such Series except as otherwise provided in the related
Trust Agreement.
ARTICLE I
DEFINITIONS
Whenever used herein, the following words and phrases shall have the meanings set forth
in this Article I. Capitalized terms used and not otherwise defined herein shall have the
meanings set forth in the related Trust Agreement and the Glossary of the Ginnie Mae Multiclass
Securities Guide currently in effect.
“Book-Entry Depository Account”: An Eligible Account that is a limited purpose account
maintained by the Trustee at the Book-Entry Depository, which account shall, among other
things, be credited with all distributions in respect of the Trust Assets, and from which amounts
distributable to Securities shall be payable.
“Certificate Factor”: As to any Trust Asset and date of determination, the factor (truncated to
eight decimal places) determined by dividing (i) the aggregate current principal (or notional)
amount of such Certificate, calculated on the assumption that the maximum possible amount
thereof is then outstanding, regardless of any exchanges (taking into account, without
duplication, any increases in such aggregate current principal (or notional) amount as a result of
the excess, if any, of the related Interest Accrual Amounts accrued prior to such date of
determination over the Certificate Interest Distribution Amounts payable in respect of such
Certificate prior to such date of determination), by (ii) the Original Class Principal Balance (or
original Class Notional Balance) of such Certificate.
“Class”: As to any Series, all Securities sharing the same designation.
“Distribution Shortfall Amount”: As defined in Section 4.04(b).
“Notional Balance”: As to any Outstanding Security that constitutes an interest only security, (i)
prior to the initial Distribution Date, the notional denomination thereof; and (ii) subsequent to its
initial Distribution Date, the notional denomination thereof multiplied by the then current Series
Factor.
“Outstanding Security”: Each Security; provided, however, that upon the exchange of any
Security pursuant to Section 3.05 hereof, the Security so exchanged shall be deemed no longer to
be an Outstanding Security and each Security issued in exchange therefor shall be deemed to be
an Outstanding Security.
4
VI-13-4
“Security”: A Ginnie Mae Guaranteed Stripped Mortgage-Backed Security.
“Security Principal Balance”: As to any Outstanding Security (other than an Interest Only
Security) prior to the initial Distribution Date, the denomination thereof; and as to any such
Outstanding Security subsequent to such initial Distribution Date, the denomination thereof
multiplied by the then applicable Series Factor.
“Tax Administrator”: With respect to a Trust, the Person designated in the Trust Agreement to
perform certain tax administrative functions for the Trust.
“Trust”: As to each Series, the related Ginnie Mae SMBS Trust.
“Trust Agreement”: With respect to each Trust, the agreement between the Sponsor and the
Trustee that identifies and establishes the Trust and the particular Securities issued in respect of
that Trust. Each Trust Agreement shall incorporate these Standard Trust Provisions by reference
and may modify, amend or supplement the terms hereof in any respect.
“Trust Asset”: As to any Trust, each Ginnie Mae Certificate conveyed thereto by the related
Sponsor.
ARTICLE II
ESTABLISHMENT OF TRUST
Section 2.01. Establishment of Trust.
As of the Closing Date, the Sponsor will establish the Trust by depositing the Trust
Assets identified in the related Trust Agreement with the Trust, and the Trust will issue the
Securities, representing the entire Beneficial Ownership interest in the Trust, to the Sponsor as
consideration for the Trust Assets.
Section 2.02. Conveyance of Trust Assets.
The deposit of Trust Assets by a Sponsor to a Trust pursuant to the related Trust
Agreement shall occur upon the Closing Date for such Series and shall constitute a sale,
assignment, transfer and conveyance by the Sponsor to the Trust of all right, title and interest in
such Trust Assets as of the first day of the month of the Closing Date, notwithstanding any
provision of federal or state law to the contrary. Each of the Sponsor, the Trustee and, by
accepting an interest in a Security, each Holder agrees that the terms of the Trust Assets shall
remain subject to modification, waiver or partial release of collateral pursuant to the terms of the
MBS Guide and related policies and regulations.
Section 2.03. Registration of Trust Assets.
Each Trust Asset included in each Trust will be registered in the name of the Book-Entry
Depository or the applicable Trust Asset Depository, as the case may be, or the applicable
Depository’s nominee(s), for the benefit of the Trustee. The books and records of each
Depository will reflect the Trustee as registered holder of the related Trust Assets, and the books
5
VI-13-5
and records of the Trustee will reflect that it holds the Trust Assets as Trustee of the related Trust
for the benefit of the Holders of the Securities of that Trust.
Section 2.04. Delivery of Securities.
Simultaneously with the execution and delivery of the Trust Agreement, the Trustee shall
deliver to the Sponsor the Securities in an amount equal to the aggregate principal balance of the
underlying Trust Assets.
Section 2.05. Board Approval of Trust Agreement.
Prior to the execution of the Trust Agreement and the establishment of the Trust, the
Trustee’s board of directors, its duly appointed loan committee, duly appointed trust committee
or duly authorized officers, as the case may be, shall approve the Trust Agreement in accordance
with the Trustee’s organizational documents and any applicable state or federal regulation,
including, to the extent applicable, and without limitation 12 C.F.R. §§ 9.7 and 550.5, each as
amended from time to time, and such approval shall be reflected in the minutes of the Trustee’s
board or committee, as applicable. The Trustee shall maintain the Trust Agreement as an official
record of the Trustee from the time the Trust Agreement is executed.
Section 2.06. Separate Grantor Trusts.
The arrangement pursuant to which each Trust is created pursuant to the related Trust
Agreement, and pursuant to which the related Trust Assets will be administered, shall be treated
as a separate grantor trust under subpart E, part I of subchapter J of the United States Internal
Revenue Code of 1986, as amended (the “Code”). The provisions of the related Trust
Agreement shall be interpreted in a manner consistent with such treatment.
ARTICLE III
THE SECURITIES
Section 3.01. Forms and Denominations of Securities.
The Securities shall be designated in the related Trust Agreement. The Securities, in the
aggregate, represent the entire Beneficial Ownership in the Trust. The Classes of Securities shall
be maintained, transferred and exchanged as Securities on the book-entry records of the BookEntry Depository in minimum denominations of $100,000 and integral multiples of $1 in excess
thereof, except that the minimum denomination will not be greater than the then authorized Class
Principal Balance or Class Notional Balance. No person acquiring a beneficial ownership
interest in the Securities (a “Beneficial Owner”) shall be entitled to receive a physical certificate
representing such ownership interest.
Section 3.02. Method of Distribution.
Distributions on the Securities shall be made by the Trustee on each Distribution Date to
each Holder as of the related Record Date. Distributions on the Securities shall be made through
the facilities of the Book-Entry Depository pursuant to instructions provided by the Trustee
6
VI-13-6
and/or the Information Agent. In the event of a principal or interest payment error, the Trustee
shall, pursuant to Ginnie Mae’s instructions, effect corrections by the adjustment of payments to
be made on future Distribution Dates.
Section 3.03. Authorization, Issuance and Delivery of Securities.
The manual execution of the related Trust Agreement by an authorized officer of each of
the Trustee and the Sponsor shall be conclusive evidence that the Securities have been duly and
validly authorized and validly issued by the Trustee and are entitled to the benefits of the related
Trust Agreement.
Delivery of the Securities occurs when the Registrar registers the transferee as the
registered owner of such Securities. The Securities to be issued at closing shall be identified on
an Issuance Statement attached as Exhibit 1 to the Trust Agreement prepared by the Sponsor and
delivered to the Trustee. On the Closing Date, the Registrar shall register the Book-Entry
Depository as the registered owner of the Securities.
Upon execution and delivery of the Guaranty Agreement with respect to each Trust,
Ginnie Mae authorizes the issuance of the Securities, each of which is entitled to the benefits of
the following Ginnie Mae Guaranty:
THE GOVERNMENT NATIONAL MORTGAGE ASSOCIATION, PURSUANT TO
SECTION 306(g) OF THE NATIONAL HOUSING ACT, GUARANTEES THE TIMELY
PAYMENT OF PRINCIPAL AND INTEREST ON THIS SECURITY IN ACCORDANCE
WITH THE TERMS AND CONDITIONS SET FORTH HEREIN AND IN THE RELATED
TRUST AGREEMENT. THE FULL FAITH AND CREDIT OF THE UNITED STATES OF
AMERICA IS PLEDGED TO THE PAYMENT OF ALL AMOUNTS THAT MAY BE
REQUIRED TO BE PAID UNDER THIS GUARANTY.
If the Trust Assets related to a Security consist of Ginnie Mae Multifamily Certificates,
the Ginnie Mae Guaranty will be subject to the following exclusion:
THE GOVERNMENT NATIONAL MORTGAGE ASSOCIATION DOES NOT
GUARANTEE PAYMENTS OF PREPAYMENT PENALTIES ON THIS SECURITY.
Section 3.04. Registration of Securities.
The Trustee shall keep one or more offices or agencies at which, subject to such
reasonable regulations as it may prescribe, the Trustee or another Person designated by the
Trustee and approved by Ginnie Mae shall be the Registrar and shall maintain a Register and
provide for the registration of Securities as herein provided.
Section 3.05. Exchange of Securities for Other Securities or Trust MBS.
Securities shall be exchangeable on the books of the Book-Entry Depository for (i) other
Securities within the same Series or (ii) a pro rata percentage ownership interest in the
underlying Trust Assets, on and after the Closing Date under the terms and conditions hereinafter
7
VI-13-7
set forth and otherwise in accordance with the procedures specified in the related Offering
Circular.
Holders of Securities of each Class of any Series may exchange any such Securities or a
portion thereof for a proportionate interest in one or more other Securities within the same
Series, so long as the aggregate interests of the Securities surrendered for exchange represent
identical percentage interests in the related Interest Distribution Amount and Principal
Distribution Amount of the Securities to be exchanged (except for de minimis differences due to
rounding). The aggregate Class Principal Balances of the Securities delivered in any such
exchange shall equal the aggregate Class Principal Balances of the Securities surrendered for
exchange.
For any Series of Securities evidencing an interest in Ginnie Mae Certificates, holders of
Securities of each Class of the related Series may exchange any such Securities for a
corresponding portion of the Ginnie Mae Certificates, so long as the aggregate interests of the
Securities surrendered for exchange represent identical percentage interests in the principal and
interest entitlements of the Ginnie Mae Certificates to be exchanged (except for de minimis
differences due to rounding). The aggregate principal balances of the Ginnie Mae Certificates
delivered in any such exchange shall equal the aggregate outstanding Class Principal Balances of
the Securities surrendered for exchange. The Ginnie Mae Certificates surrendered in the
exchange may be exchanged back into a proportionate interest in one or more Classes of
Securities in the same Series.
There shall be no limitation (other than with respect to minimum denomination
requirements) on any exchanges authorized pursuant to this Section 3.05, and, except as provided
in the following paragraph, no fee or other charge shall be payable in connection therewith.
Unless otherwise specified in the related Offering Circular or Trust Agreement, as a
condition to each exchange, a fee shall be payable to the Trustee equal to 1/32 of 1% of the
outstanding principal balance (or notional balance, to the extent provided in the following
proviso) of the Securities or the Trust Assets to be submitted for exchange (but not less than
$2,000 or greater than $25,000).
Unless otherwise specified in the related Offering Circular or Trust Agreement, any
Beneficial Owner proposing to effect an exchange as contemplated by this Section 3.05 shall
notify the Trustee (through the facilities of the Book-Entry Depository) no later than two
Business Days before the proposed date of exchange; provided however, that no such exchange
can occur on the last business day of any month. Any such notice as provided hereunder shall
become irrevocable by the Beneficial Owner on the second Business Day preceding the proposed
date of exchange, provided that the exchange fee has been paid. The contents of any notice of
exchange shall be specified in the related Offering Circular.
In connection with any exchange of Securities or Ginnie Mae Certificates, the Trustee
shall verify that such exchange has been effected in the appropriate proportions. The Trustee
shall promptly notify the Book-Entry Depository (or its participant, as applicable) in the event of
8
VI-13-8
error. The initial distribution in respect of a Security delivered for exchange shall occur on the
Distribution Date in the month following the month of exchange.
ARTICLE IV
DISTRIBUTIONS ON THE SECURITIES
Section 4.01. Establishment of Accounts.
(a)
Book-Entry Depository Account. The Trustee shall maintain a Book-Entry
Depository Account with the Book-Entry Depository and, if any Underlying Certificates are held
through book-entry facilities other than the Book-Entry Depository, a Trust Asset Depository
Account at each applicable Trust Asset Depository. With respect to each Trust, the Trustee shall
account for all funds in, all deposits to and all withdrawals from the Book-Entry Depository
Account separately and on a Trust-by-Trust basis, clearly identifying the Segregated Portions
thereof. The Depository Accounts shall be credited with amounts as provided in Sections 4.03
and 4.04 hereof.
(b)
Trustee ABA Account. The Trustee shall maintain a Trustee ABA Account,
which account shall include subaccounts consisting of the Trustee Limited Purpose Account and
the Trustee Issuer’s Account. With respect to each Trust, the Trustee shall account for all funds
in, all deposits to and all withdrawals from the Trustee ABA Account separately and on a Trustby-Trust basis, clearly identifying the Segregated Portions thereof. The Trustee ABA Account
shall be credited with amounts as provided in Section 4.03 hereof.
(c)
Variance Account. With respect to each Trust, the Trustee shall establish and
maintain a separate Variance Account, which will be an Eligible Account. Amounts will be
credited to the Variance Account and withdrawals will be made from the Variance Account as
specified herein. The Variance Account shall be an Outside Reserve Fund, the owner of which
solely for United States federal income tax purposes (and not for any other purpose) will be
Ginnie Mae. The depository records of the Trustee, or, as the case may be, the depository
institution or trust company at which the Variance Account is to be established, shall reflect in
respect of the Variance Account (i) that the Trustee, as depositor, is acting in a fiduciary capacity
on behalf of the Holders of Securities in respect of the Trust, (ii) the names and respective
interests of such Holders, and (iii) that such Holders may be acting in a fiduciary capacity for
others. If the amounts on deposit in the Variance Account exceed $100, the Trustee shall invest
amounts held in the Variance Account in Eligible Investments approved by Ginnie Mae; any
investment earnings shall be for the account of and distributable to Ginnie Mae, unless otherwise
allocated to make up for shortfalls as provided in Section 4.04(b) hereof. If no investment
direction is provided to the Trustee, then the Trustee shall hold such funds uninvested.
(d)
Col
lection Account. The Trustee will maintain an Eligible Account (the
“Collection Account”) for the purposes provided in Section 4.03. With respect to each Trust, the
Trustee shall account for all funds in, all deposits to and all withdrawals from the Collection
Account separately and on a Trust-by-Trust basis clearly identifying the Segregated Portions
thereof. Amounts on deposit from time to time in the Collection Account may be invested in
Eligible Investments, provided that (i) such Eligible Investments consist solely of investments
9
VI-13-9
described in clause (a) or (b) of the definition of Eligible Investments and (ii) such Eligible
Investments are held to their maturity, if any, and are not sold except to facilitate a distribution
from the Collection Account. Any investment earnings on the Collection Account shall be
retained by, and be for the account of, the Trustee as part of the Trustee Fee. Regardless whether
the amounts deposited in the Collection Account are invested, to the extent amounts required to
be deposited into the Trustee ABA Account pursuant to Section 4.03 are so deposited on each
Ginnie Mae Certificate Payment Date, the Trustee shall pay to Ginnie Mae from its own funds
the Ginnie Mae Interest Amount as of each Distribution Date. The depository records of the
Trustee, or, as the case may be, the depository institution or trust company at which the
Collection Account is to be established, shall reflect in respect of the Collection Account (i) that
the Trustee, as depositor, is acting as a fiduciary on behalf of the Holders of Securities in respect
of the Trust and Ginnie Mae, (ii) the names and respective interests of such Holders and Ginnie
Mae, and (iii) that such Holders may be acting in a fiduciary capacity for others.
(e)
Board Approval. Prior to the establishment of any Trust Account, the Trustee’s
board of directors, a duly appointed loan committee, duly appointed trust committee or duly
authorized officers, as the case may be, of the Trustee, or, as the case may be, the Trustee’s
board of directors, a duly appointed loan committee, duly appointed trust committee or duly
authorized officers of the depository institution or trust company at which such Trust Account is
to be established, shall approve the establishment of such Trust Account and the Trust
Agreement in accordance with the organizational documents of such institution and any
applicable state or federal regulation, including, to the extent applicable, and without limitation
12 C.F.R. §§ 9.7 and 550.5, each as amended from time to time, and such approval shall be
reflected in the minutes of such board or committee, as applicable. The Trustee, or, as the case
may be, the depository institution or trust company at which any Trust Account is to be
established, shall maintain the Trust Agreement as an official record from the time of its
execution.
(f)
Segregated Portions. With respect to each Trust, the Book-Entry Depository
Account shall include, and where applicable a reference to such account herein or in the related
Trust Agreement shall be understood to be a reference to, a Segregated Portion of such account
corresponding to such Trust.
Section 4.02. Certificate Factors and Series Factors.
(a)
Certificate Factors for Trust Assets other than Ginnie Mae Multifamily
Certificates. The Trustee shall use its reasonable best efforts to obtain the Certificate Factors for
Trust MBS (other than any Ginnie Mae Multifamily Certificates) (and the Underlying Certificate
Factors for Underlying Certificates and Underlying SMBS Securities) on or before 11:00 a.m.
Eastern time on the second Business Day preceding a Distribution Date (or, in the case of Ginnie
Mae II Certificates, the third preceding Business Day), or such other date set forth in the related
Trust Agreement. In the event any Underlying Certificate Factors for Underlying Certificates or
Underlying SMBS Securities or Certificate Factors for Ginnie Mae Platinum Certificates are not
published or otherwise available as specified in the preceding sentence, the Trustee shall
immediately notify the Information Agent and Ginnie Mae and follow the procedures set forth in
Section 4.02(d).
10
VI-13-10
(b)
Calculated Certificate Factors for Trust Assets other than Ginnie Mae Multifamily
and Ginnie Mae Platinum Certificates. With respect to any Trust MBS (other than Ginnie Mae
Multifamily Certificates and Ginnie Mae Platinum Certificates) for which a Certificate Factor is
not available by 1:00 p.m. Eastern time on the Certificate Factor Date, the Trustee shall
determine the Calculated Certificate Factor for such Trust MBS.
(c)
Certificate Factors, Calculated Certificate Factors and Corrected Certificate
Factors for Ginnie Mae Multifamily Certificates. With respect to each Ginnie Mae Multifamily
Certificate:
(i)
The Trustee, in accordance with operational guidelines established by
Ginnie Mae, will use its reasonable best efforts to do the following on or before 12:00
noon Eastern time on the second Business Day preceding a Distribution Date: determine
the related Certificate Factor, determine whether the Certificate Factor is correct in the
case where the Certificate Factor indicates a significant payoff, determine the Corrected
Certificate Factor if the Certificate Factor is incorrect and advise the Book-Entry
Depository if the Trustee plans to use the Corrected Certificate Factor in following the
procedures set forth in Section 4.02(e). If the Certificate Factor is correct, it will use the
Certificate Factor in following the procedures for determining Class Factors set forth in
Section 4.02(e).
(ii)
If the Trustee cannot determine by 12:00 noon Eastern time on the second
Business Day preceding a Distribution Date whether the related Certificate Factor is
correct, the Trustee shall determine the Calculated Certificate Factor for such Ginnie Mae
Multifamily Certificate and use the Calculated Certificate Factor in following the
procedures for determining Class Factors set forth in Section 4.02(e).
(d)
Unavailability of Certificate Factors for Underlying Certificate Factors. In the
event that the Underlying Certificate Factor for any Underlying Certificate or Underlying SMBS
Security (or Certificate Factor for any Ginnie Mae Platinum Certificate) has not been made
available to the Trustee by 11:00 a.m. Eastern time on the second Business Day preceding a
Distribution Date (or in the case of Ginnie Mae Platinum Certificates backed by Ginnie Mae II
MBS Certificates, the third preceding Business Day), the Trustee shall assume for purposes
hereof that such factors have not changed from the preceding Underlying Certificate Payment
Date or Underlying SMBS Security Payment Date (or Certificate Factor Date). As a result, the
Principal Distribution Amount in respect of any Underlying Certificate or Underlying SMBS
Security (or Trust Asset constituting a Ginnie Mae Platinum Certificate) described in the
preceding sentence shall be calculated on the basis of such assumed (i.e., unchanged) factors,
with the effect that no amounts in respect of principal attributable to such Underlying Certificate
or Underlying SMBS Security (or Ginnie Mae Platinum Certificate) shall be distributable on the
related Securities on the related Distribution Date.
(e)
Class Factors. Unless otherwise provided in the related Trust Agreement, based
on, as appropriate, Certificate Factors, Corrected Certificate Factors, if any, and Calculated
Certificate Factors, if any, determined in accordance with Sections 4.02(a), (b), (c) and (d)
above, the Trustee shall calculate the Class Factors, the Principal Distribution Amount and the
11
VI-13-11
Interest Distribution Amount for the Distribution Date. In addition, based on the provisions of
the Trust Agreement, the Trustee shall calculate the Interest Rate for each Class and the amount
of principal and interest to be distributed to each Class on that Distribution Date. The Trustee
shall report the Interest Rate and the Class Factor for each Class and any Calculated Certificate
Factors and Corrected Certificate Factors (and other information as requested by Ginnie Mae
from time to time) to the Information Agent no later than 6:00 p.m. Eastern time on the second
Business Day preceding the Distribution Date; except that, in the case of Security Groups for
which the related Trust Assets consist of Ginnie Mae II Certificates, the information described
above shall be reported no later than 6:00 p.m. Eastern time on the third Business Day preceding
the Distribution Date.
Section 4.03. Application of Payments.
(a)
On each Ginnie Mae Certificate Payment Date and Underlying Certificate
Payment Date or Underlying SMBS Security Payment Date, as applicable, (i) the Book-Entry
Depository shall be entitled to all payments in respect of Trust Assets held through the facilities
of the Book-Entry Depository and shall credit the Trustee ABA Account with all such amounts;
and (ii) each Trust Asset Depository shall be entitled to all payments in respect of the remaining
Trust Assets held through the facilities of such Trust Asset Depository and shall credit the related
Trust Asset Depository Account with all such amounts. In each case, such amounts shall be held
by the applicable depository in trust for the exclusive benefit of the Trustee as the holder of the
Trust Assets. All amounts received in respect of the Trust Assets and credited to the Trustee
ABA Account and the Trust Asset Depository Account, if applicable, shall be withdrawn
therefrom by the close of business on the date of receipt in such account and deposited into the
Collection Account for retention until the next Distribution Date for the related Securities;
provided, however, if the Ginnie Mae Certificate Payment Date, Underlying Certificate Payment
Date or Underlying SMBS Security Payment Date coincides with the Distribution Date for the
related Securities (i.e., such amounts will be received and distributed on the same day), then such
amounts shall be immediately deposited into the Collection Account from the Trustee ABA
Account and the Trust Asset Depository Account, if applicable, upon the receipt of such funds
by the Trustee ABA Account and the Trust Asset Depository Account, if applicable, and the
Trustee shall immediately wire transfer such amounts to the Book-Entry Depository Account for
distribution pursuant to Sections 4.04(c) and (d) hereof. Except as otherwise provided in the
proviso to the immediately preceding sentence, by no later than 9:00 a.m. Eastern time (or such
other time that may be approved by Ginnie Mae) on such next Distribution Date for the related
Securities, all amounts on deposit in the Collection Account that are identified as distributable as
principal, interest and related Prepayment Penalties, if any, in respect of the Securities in respect
of such Distribution Date shall be withdrawn therefrom and deposited into the Book-Entry
Depository Account for distribution pursuant to Sections 4.04(c) and (d). All remaining amounts
on deposit in the Collection Account distributable as Trustee Fee amounts and investment
earnings, shall be withdrawn therefrom for application pursuant to Sections 4.04(g) and (j)
hereof. In addition, no later than 10:00 a.m. Eastern time on such Distribution Date, amounts on
deposit in the Collection Account in excess of the amounts set forth in the preceding sentence
(“Collection Excess Amounts”) shall be withdrawn therefrom and shall be deposited in the
Variance Account.
12
VI-13-12
Section 4.04. Distributions on the Securities.
(a)
Distribution Date Statement. No later than 2:00 p.m. Eastern time on the first
Business Day following each Distribution Date, the Trustee shall provide to the Information
Agent a Distribution Date Statement in such form as is approved by the Trustee and Ginnie Mae.
Each Distribution Date Statement will specify (i) the Trustee Fee paid to the Trustee and the
amounts of investment earnings or amounts held in the Collection Account, (ii) amounts
distributed on such Distribution Date as principal and interest on the Securities from amounts on
deposit in the Book-Entry Depository Account, (iii) amounts distributed on such Distribution
Date as Prepayment Penalties on the Securities from the Book-Entry Depository Account, such
amounts to be determined pursuant to the receipt of a notice from the Ginnie Mae Issuer as to the
Mortgagor’s payment of any Prepayment Penalties and (iv) the Ginnie Mae Interest Amount for
the Distribution Date from the immediately preceding calendar month.
(b)
Distribution Shortfall. No later than 10:00 a.m. Eastern Standard Time on the
Distribution Date, the Book-Entry Depository shall determine the amount, if any, by which (A)
the amounts distributable as principal and interest on the Securities on such Distribution Date,
exceed (B) the amounts on deposit in the Book-Entry Depository Account (the “Distribution
Shortfall Amount”). The Book-Entry Depository immediately shall notify Ginnie Mae of the
amount of such deficiency, and the account or accounts to which Ginnie Mae should transfer
such amounts. In the event that there are sufficient amounts in the Variance Account, to cover
the Distribution Shortfall Amount, the Trustee shall withdraw the Distribution Shortfall Amount
from the Variance Account and wire transfer such amount to the Book-Entry Depository
Account no later than 10:01 a.m., and shall immediately inform Ginnie Mae of any such transfer.
(c)
BookEntry Securities. The Trustee hereby directs the
-Entry
Book
Depository to
withdraw from the Book-Entry Depository Account on each Distribution Date all amounts held
in such account, to the extent distributable as principal and interest and related Prepayment
Penalties, if any, on the Securities on that Distribution Date. On each Distribution Date, the
Book-Entry Depository will credit the accounts of its record owners of the Securities in
accordance with the standard procedures of the Book-Entry Depository.
(d)
Distributions. On each Distribution Date, the Trustee (and/or the Book-Entry
Depository on behalf of and pursuant to the instructions of the Trustee) shall make such
distributions on the Securities issued in respect of any Trust as shall be provided in the related
Trust Agreement. The Trustee hereby directs the Book-Entry Depository to withdraw from the
Book-Entry Depository Account on each Distribution Date amounts distributable as principal,
interest and Prepayment Penalties on the Securities as instructed by the Trustee. Any
distributions or accruals of interest made on a Distribution Date on the Securities issued in
respect of a particular Trust shall be at the Interest Rate set forth in or as otherwise described in
the related Trust Agreement and in respect of the related Accrual Period.
(e)
Allocations of Distributions. The Holders of any Class entitled to receive
distributions on any Distribution Date shall receive such distributions on a pro rata basis among
the Outstanding Securities of such Class based on the principal balance, notional balance or
percentage interest of such Securities. All distributions of principal on the Securities issued in
13
VI-13-13
respect of a particular Trust shall be made as provided in the related Trust Agreement. Unless
otherwise indicated in the Trust Agreement, all distributions made on any Security on any
Distribution Date (other than distributions in respect of Prepayment Penalties) shall be applied
first to any interest payable thereon on such Distribution Date and then to any principal thereof.
(f)
Interest Accrual. Unless otherwise provided in the related Trust Agreement, the
amount of interest accrued on each Class during an Accrual Period and to be distributed thereon
(or, to the extent applicable in the case of an Accrual Security, added to the principal amount
thereof) on the related Distribution Date shall be 1/12th of the applicable Interest Rate multiplied
by the Class Principal Balance (or Class Notional Balance) of such Class prior to the distribution
of principal (or, in the case of an Accrual Security, the addition of accrued interest to principal)
on such Distribution Date. Interest on the Securities will be computed on the basis of a 360-day
year consisting of twelve 30-day months.
(g)
Ginnie Mae Interest Amounts. The Trustee shall distribute to Ginnie Mae the
Ginnie Mae Interest Amount with respect to that Distribution Date as soon as practicable but no
later than the first Business Day of the next succeeding calendar month following such
Distribution Date, as instructed by Ginnie Mae.
(h)
Ginnie Mae Guaranty. With respect to each Series, pursuant to the Guaranty
Agreement, Ginnie Mae, in exchange for the Ginnie Mae Guaranty Fee, has guaranteed to each
Holder of a Security the timely payment of principal and interest on the Holder’s Security in
accordance with the terms of the applicable Trust Agreement.
(i)
Ginnie Mae Guaranty Payments. If the Book-Entry Depository and/or the
Trustee, as the case may be, discovers that payments on the Trust Assets underlying a Series
together with any funds available in the Variance Account will be inadequate to distribute
principal and interest to the Securities of such Series on any Distribution Date in accordance with
the terms of the Trust Agreement, the Book-Entry Depository and/or the Trustee, as the case may
be, promptly shall inform Ginnie Mae that a Ginnie Mae Guaranty Payment must be made. In
that event, Ginnie Mae (or its agent) will transfer the amount of the shortfall to the Book-Entry
Depository Account or the Collection Account, as applicable, in immediately available funds in
accordance with Section 4.04(b) hereof. At Ginnie Mae’s option, Ginnie Mae may instruct the
Person designated by the Trustee and acceptable to Ginnie Mae as the Person to hold funds on
behalf of the Trustee (which Person initially shall be The Bank of New York) to transfer such
amount. In addition, if on the Final Distribution Date of any Class, the funds available to be
distributed on such Class are insufficient to reduce the Class Principal Balance of such Class to
zero, Ginnie Mae shall make a Ginnie Mae Guaranty Payment in the amount of such
insufficiency. In the event that Ginnie Mae makes any Ginnie Mae Guaranty Payment to reduce
the Class Principal Balance of any Class to zero on its Final Distribution Date, such Class shall
continue to be treated as outstanding for all purposes, and Ginnie Mae shall be deemed to have
purchased the related Class and will be entitled to all subsequent distributions on such Class. To
the extent that Ginnie Mae fails to make any required payment pursuant to the Ginnie Mae
Guaranty, the related Trustee on behalf of the Holders shall be obligated to take all necessary and
appropriate actions to enforce the Ginnie Mae Guaranty in accordance with the terms hereof.
14
VI-13-14
(j)
Trustee Fee. On the Business Day following each Distribution Date, the Trustee
shall withdraw for its own account from the Collection Account, the Trustee Fee and any
investment earnings payable with respect to such Distribution Date.
(k)
Separate Application of Payments. The application of payments pursuant to
Section 4.03 and this Section 4.04 shall be made separately in respect of each Trust, and each
reference to a Trust Account shall be understood to refer to the Segregated Portion of such
account corresponding to each Trust created hereunder.
Section 4.05. Conversion of Deposited Ginnie Mae Construction Loan Certificates.
Each Deposited Ginnie Mae Construction Loan Certificate may be redeemed prior to its
stated maturity date by the issuance of a pro rata interest in a Ginnie Mae Project Loan
Certificate. Upon issuance thereof, each pro rata interest in a Ginnie Mae Project Loan
Certificate will constitute a Trust Asset and shall be registered in accordance with Section 2.03
hereof. The Trustee shall take all actions that it deems necessary or advisable to facilitate the
conversion of each Deposited Ginnie Mae Construction Loan Certificate into a Ginnie Mae
Project Loan Certificate (provided, that the conversion of a Deposited Ginnie Mae Construction
Loan Certificate into a Ginnie Mae Project Loan Certificate shall not itself constitute or be
considered to be a modification of the Trust MBS).
Section 4.06. Reconciliation Process.
After a Distribution Date, at the request of Ginnie Mae, the Trustee shall reconcile
payments in accordance with the applicable Ginnie Mae guidelines. Such reconciliation may
involve credits and charges to one or more Trust Accounts.
Section 4.07. Appointment of Information Agent.
Except as otherwise provided in the Trust Agreement, at the direction of Ginnie Mae, the
Trustee of each Trust has appointed The Bank of New York to be the Information Agent. Ginnie
Mae has reserved the right to substitute at any time another Person as the Information Agent.
Section 4.08. Annual Reports.
Within a reasonable period of time after the end of each calendar year (but in no event
later than sixty days after the end of such calendar year), the Trustee shall furnish or cause to be
furnished to Ginnie Mae and to each Person who at any time during the calendar year was the
Holder of a Security a statement containing the amount of distributions allocable to principal, the
amount allocable to interest and the amount allocable to Prepayment Penalties. Such obligation
of the Trustee shall be deemed to have been satisfied to the extent that substantially comparable
information shall be provided by the Tax Administrator pursuant to any requirements of the
Code and Treasury Regulations.
15
VI-13-15
ARTICLE V
REPRESENTATIONS, WARRANTIES AND COVENANTS
Section 5.01. Representations and Warranties of the Sponsor.
The Sponsor hereby represents and warrants as follows:
(a)
The Trust Agreement constitutes the legal, valid and binding agreement of the
Sponsor, enforceable against it in accordance with its terms, subject to bankruptcy, insolvency,
reorganization, moratorium or other similar laws affecting creditors’ rights generally and to
general principles of equity regardless whether enforcement is sought in a proceeding in equity
or at law;
(b)
Neither the execution and delivery by the Sponsor of the Trust Agreement, nor the
consummation by the Sponsor of the transactions therein contemplated, nor compliance by the
Sponsor with the provisions thereof, will (i) conflict with or result in a breach of, or constitute a
default under, any of the provisions of the articles of incorporation or by-laws of the Sponsor or
any law, governmental rule or regulation or any judgment, decree or order binding on the
Sponsor or any of its properties, or any of the provisions of any indenture, mortgage, deed of
trust, contract or other instrument to which the Sponsor is a party or by which it is bound, or (ii)
result in the creation of any lien, charge, or encumbrance upon any of its properties pursuant to
the terms of any such indenture, mortgage, deed of trust, contract or other instrument;
(c)
The information set forth (i) in the Final Data Statement for such Series and (ii)
with respect to any Series backed in whole or in part by any Ginnie Mae Multifamily
Certificates, in Exhibit A to the Offering Circular Supplement, including, but not by way of
limitation, the outstanding principal balance of each Trust Asset as of the Closing Date and the
Certificate Rate of each Trust Asset, is true and correct in all material respects as of the Closing
Date;
(d)
The representations and warranties made by the Sponsor in the Sponsor
Agreement are true and correct in all material respects at and as of the Closing Date with the
same effect as if made on the Closing Date; and
(e)
The Sponsor has complied with all the agreements (including, without limitation,
the covenants in the Sponsor Agreement) and satisfied all the conditions on its part to be
performed or satisfied at or prior to the Closing Date.
It is understood and agreed that the representations and warranties set forth in this Section
5.01 shall survive delivery of the Trust Assets to the Trustee and shall inure to the benefit of the
Trustee and Ginnie Mae notwithstanding any restrictive or qualified endorsement or assignment.
Upon the discovery by the Sponsor or upon the Trustee’s actual knowledge or receipt of notice
of a breach of the foregoing representations and warranties, the Sponsor or the Trustee, as
applicable, shall promptly notify the other party to the Trust Agreement and Ginnie Mae, and in
no event later than two Business Days from the date of such discovery, actual knowledge or
receipt of notice as applicable. In no event, however, will any failure to notify the other party to
16
VI-13-16
the Trust Agreement and Ginnie Mae of such breach of representation and warranty absolve or
limit the Sponsor’s requirement to cure any such breach.
Section 5.02. Representations and Warranties of the Trustee.
The Trustee hereby represents and warrants as follows:
(a)
The Trustee acknowledges and declares that it holds and will hold the Trust
Assets identified in the case of any Series (other than any Series backed by Ginnie Mae
Multifamily Certificates), in the Final Data Statement, or, in the case of any Series backed by
Ginnie Mae Multifamily Certificates, in the Trustee’s Receipt Schedule A, and that it has agreed
to hold all documents delivered to it with respect to such Trust Assets and all assets of the Trust
in trust for the exclusive use and benefit of all present and future Holders and, to the extent
provided herein, Ginnie Mae.
(b)
The Trustee (i) acquired the Trust Assets on behalf of the Trust from the Sponsor
in good faith, for value, and without notice or knowledge of any adverse claim, lien, charge,
encumbrance or security interest (including, without limitation, any federal tax liens or liens
arising under ERISA), (ii) except as permitted in the Trust Agreement, has not and will not, in
any capacity, assert any claim or interest in the Trust Assets and will hold (or its agent will hold)
such Trust Assets and the proceeds thereof in trust pursuant to the terms of the Trust Agreement,
and (iii) has not encumbered or transferred its right, title or interest in the Trust Assets.
(c)
On the Closing Date, the Trustee shall deliver to the Sponsor and Ginnie Mae a
certificate certifying that the Trustee (or an agent thereof) is in possession of the Trust Assets for
such Series.
Section 5.03. Sponsor Breach; Repurchase Obligation; Substitution.
Within 90 days of the earlier of Sponsor’s discovery or notice to the Sponsor of any
breach by the Sponsor of any of its representations, warranties or covenants under a Sponsor
Agreement or the related Trust Agreement which breach, in the judgment of Ginnie Mae,
materially and adversely affects the value of any Trust Asset or the interest of the Trust therein,
the Sponsor shall (i) cure such breach or (ii) in the case of Trust MBS, remove such affected
Trust MBS from the Trust and substitute one or more Ginnie Mae Certificates (A) with a
Certificate Rate equal to the Certificate Rate of the replaced Trust MBS as reflected in the
records of the Trust and (B) with an aggregate outstanding principal balance equal to the
outstanding principal balance of the replaced Trust MBS, as reflected in the records of the Trust,
(C) with a Maturity Date no later than the Maturity Date of the replaced Trust MBS and no
earlier than six months prior to the Maturity Date of the replaced Trust MBS, (D) that are entitled
to payments on the following Ginnie Mae Certificate Payment Date (which shall be the same
Ginnie Mae Certificate Payment Date on which the replaced Trust MBS was payable) and (E)
that otherwise conform to the requirements of the Trust Agreement. The Sponsor shall effect
any substitution of a Trust MBS by depositing with the Trust each Ginnie Mae Certificate to be
substituted. However, no substitution for a Trust MBS may be made 90 days or more after the
Closing Date.
17
VI-13-17
ARTICLE VI
CONCERNING THE TRUSTEE
Section 6.01. Duties of Trustee.
(a)
The Trustee undertakes to perform such duties and only such duties as are
specifically set forth in the related Trust Agreement. The Trustee, upon receipt of any and all
resolutions, certificates, statements, opinions, reports, documents, orders or other instruments
furnished to the Trustee that are specifically required to be furnished pursuant to any provision of
such Trust Agreement, or that may be furnished to the Trustee at its request, shall examine them
to determine whether they conform to the requirements of such Trust Agreement.
(b)
No provision of any Trust Agreement shall be construed to relieve the Trustee of
such Trust from liability for its own negligent action, its own negligent failure to act or its own
misconduct; provided, however, that:
(i)
The duties and obligations of the Trustee shall be determined solely by the
express provisions of the related Trust Agreement, the Trustee shall not be liable except
for the performance of such duties and obligations as are specifically set forth in the
related Trust Agreement, and no implied covenants or obligations shall be read into the
related Trust Agreement against the Trustee;
(ii)
The Trustee shall not be personally liable for an error of judgment made in
good faith by a Responsible Officer or Responsible Officers of the Trustee, unless it is
proved that the Trustee was negligent in ascertaining the pertinent facts;
(iii) The Trustee shall not be personally liable with respect to any action taken
or suffered or omitted to be taken by it in good faith in accordance with the direction of
Ginnie Mae as to the time, method and place of conducting any proceeding for any
remedy available to the Trustee, or exercising any trust or power conferred upon the
Trustee, under a Trust Agreement; and
(iv)
The Trustee with respect to any Trust shall not be personally liable with
respect to any action taken or suffered or omitted to be taken by it in good faith as to the
enforcement by the Trustee of the Ginnie Mae Guaranty.
(c)
The Information Agent shall not be deemed to be the agent of the Trustee, but
rather the agent of Ginnie Mae. The Trustee shall not be liable for any loss, liability or damage
to any Trust attributable to the acts or omissions of the Information Agent.
Section 6.02. Certain Matters Affecting the Trustee.
Except as otherwise provided in Section 6.01, with respect to any Series:
(a)
The Trustee may request (at its sole expense, except as otherwise provided herein)
and rely conclusively upon and shall be protected in acting or refraining from acting upon any
resolution, officers’ certificate, certificate of auditors or any other certificate, statement,
18
VI-13-18
instrument, opinion, report, notice, request, consent, order, appraisal, bond or other paper,
communication or document prima facie in proper form and believed by it to be genuine and to
have been signed or presented by the proper party or parties;
(b)
The Trustee may consult with counsel, and any Opinion of Counsel shall be full
and complete authorization and protection from liability in respect of any action taken or
suffered or omitted by it hereunder in good faith and in accordance with such Opinion of
Counsel;
(c)
The Trustee shall be under no obligation to exercise any of the trusts or powers
vested in it by the related Trust Agreement or to institute, conduct or defend any litigation
thereunder or in relation thereto at the request, order or direction of Ginnie Mae or any of the
Holders of such Series, pursuant to the provisions of the Trust Agreement, unless (i) such
directing party has offered to the Trustee reasonable security or indemnity against the costs,
expenses (including the fees and disbursements of Trustee’s counsel), and liabilities that may be
incurred by the Trustee with respect thereto or (ii) the need for or desirability of such institution,
conduct or defense results from the negligence of the Trustee;
(d)
The Trustee shall not be personally liable for any action taken or suffered or
omitted to be taken by it in good faith and believed by it to be authorized or within the discretion
or rights or powers conferred upon it by a Trust Agreement;
(e)
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, communications or document, unless requested in
writing so to do by Ginnie Mae or the Holders of a Series evidencing Percentage Interests
aggregating not less than 50% of all Securities in such Series; provided, however, that the
reasonable expense of such investigation shall be paid by the party requesting the investigation,
and the Trustee may require indemnity reasonably acceptable to it against the costs, expenses or
liabilities likely to be incurred by it in the making of such investigation as a condition to
proceeding;
(f)
The Trustee may execute any of the trusts or powers under any Trust Agreement
or perform any duties thereunder either directly or by or through agents or attorneys;
(g)
The Trustee may rely conclusively on all calculations and other information
provided to it by Ginnie Mae, the Information Agent or any other agent of Ginnie Mae;
(h)
The Trustee shall not be obligated to post a bond or other form of surety in
connection with its service or status as Trustee under a Trust Agreement;
(i)
If the Trustee determines that an action the Trustee is required to take under a
Trust Agreement is not in accordance with applicable law, then the Trustee shall provide a copy
of an Opinion of Counsel supporting such determination to Ginnie Mae and consult with Ginnie
Mae as to ways in which such action can be taken in accordance with applicable law or
alternative courses of action; provided, that if the Trustee and Ginnie Mae cannot determine a
19
VI-13-19
way in which the Trustee can take such action or alternative action in accordance with applicable
law, the Trustee shall not be required to take such action; and
(j)
The Trustee will not be required to expend or risk its own funds or otherwise
incur financial liability in the performance of its duties under the Trust Agreement (excluding its
duties explicitly set forth herein) or in the exercise of any of its rights or powers if, there shall be
reasonable ground for believing that the repayment of those funds or indemnity reasonably
acceptable to it against that risk or liability is not reasonably assured to it.
Section 6.03. Trustee Not Liable for Securities.
(a)
The Trustee makes no representations as to the validity or sufficiency of any Trust
Agreement or of any Securities (except that each Trust Agreement has been duly executed and is
binding on the Trustee and the Securities of each Series shall be duly and validly issued,
authorized and delivered by the Trustee) or of any Trust Asset or any document related to any of
the foregoing.
(b)
The Trustee shall have no responsibility or accountability with respect to the
sufficiency or adequacy of the following: (i) the Trust Assets and Ginnie Mae Guaranty to
generate funds necessary to make required payments on the Securities or (ii) any Offering
Circular or other securities filings or reports required to be filed by any federal, state or local
securities regulatory authority, including but not limited to the United States Securities and
Exchange Commission.
Section 6.04. Trustee May Own Securities.
The Trustee in its individual or any other capacity may become the owner or pledgee of
Securities, and may transact banking or trust business with Ginnie Mae, any Sponsor, the BookEntry Depository, any Trust Asset Depository, any Beneficial Owner or any other Trustee or any
Tax Administrator with the same rights it would have if it were not Trustee.
Section 6.05. Payment of Trustee’s Fees and Expenses.
With respect to the Distribution Date in each month, the Trustee shall be paid
compensation for all services rendered by it in the execution of the trusts created by the Trust
Agreement and in the exercise and performance of any of its powers and duties under the Trust
Agreement (which compensation shall not be limited by any provision of law in regard to the
compensation of a trustee of an express trust) in an amount equal to the Trustee Fee.
Section 6.06. Eligibility Requirements for Trustee.
(a)
The Trustee under any Trust Agreement must have been approved in writing by
Ginnie Mae to serve as Trustee under such Trust Agreement and at all times (a) must be
organized and doing business under the laws of the state of its incorporation or the United States
of America, (b) must be authorized under such laws to exercise corporate trust powers, (c) must
have (or must be a member of a consolidated bank or financial holding company that has) a
minimum combined capital and surplus that meets the requirements prescribed by Ginnie Mae
20
VI-13-20
from time to time pursuant to written notice to the Trustee provided by Ginnie Mae, (d) must be
a member depository institution of the FRS, (e) must be an entity subject to supervision or
examination by federal or state authority and (f) unless otherwise approved by Ginnie Mae, must
have a long term unsecured debt obligation rating from Moody’s Investors, Inc. of at least Aa3
and a short term debt or commercial paper rating from S&P Global Ratings of at least A-1. In
addition, neither the Trustee nor any officer or professional working on the subject matter of the
Trust may be currently suspended or debarred by any governmental agency, nor may such
Persons have been convicted of, or found liable in a civil action for, fraud, forgery, bribery,
falsification or destruction of records, making false statements or any other offense indicating a
lack of business integrity that seriously and directly could affect the responsibility of the Trustee,
or such officer or professional.
(b)
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 6.06 the combined capital and surplus of the Trustee shall be deemed to be its
combined capital and surplus as set forth in its most recent report of condition so published. If at
any time the Trustee ceases to be eligible in accordance with the provisions of this Section 6.06,
the Trustee shall notify Ginnie Mae in writing immediately and, if Ginnie Mae requests, shall
resign immediately in the manner and with the effect specified in Section 6.07 hereof.
Section 6.07. Resignation and Removal of the Trustee.
(a)
The Trustee may resign as Trustee of any Trust at any time and be discharged
from the trusts created under the related Trust Agreement by giving written notice thereof to
Ginnie Mae and upon appointment of a successor trustee pursuant to Section 6.08. Upon
receiving such notice of resignation, Ginnie Mae may appoint a successor trustee. If no
successor trustee shall have been so appointed and have accepted appointment within 90 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 acceptable to Ginnie Mae.
(b)
Ginnie Mae may remove the Trustee for cause at any time. For the purposes of
this Section 6.07 “cause” shall mean one of the following:
(i)
The Trustee’s ceasing to be eligible in accordance with the provisions of
Section 6.06 hereof and failing to resign after written request therefor by Ginnie Mae or
its agent;
(ii)
Agreement;
The Trustee’s inability or failure to take any actions required under a Trust
(iii) The Trustee’s failure to observe or perform any of its covenants set forth
in the related Trust Agreement;
(iv)
A court or regulatory authority having jurisdiction in the premises,
including without limitation the FDIC and any similar state authority, entering a decree or
order for relief in respect of the Trustee in an involuntary case under any bankruptcy,
21
VI-13-21
insolvency, receivership, conservatorship or other similar law or regulation, state or
federal, now or hereafter in effect, or appointing a receiver, conservator, assignee, trustee,
custodian, sequestrator or other similar official for the Trustee or for all or any substantial
part of its property, or order the winding up or liquidation of its affairs;
(v)
The Trustee’s commencing a voluntary case under any applicable
bankruptcy, insolvency, receivership, conservatorship or other similar law or regulation,
state or federal, now or hereafter in effect, or consenting to or acquiescing in the entry of
an order for relief in an involuntary case under any such law, or consenting to or
acquiescing in the appointment of or taking of possession by a receiver, conservator,
liquidator, assignee, trustee, custodian, sequestrator or other similar official for the
Trustee or for all or any substantial part of its property, or making a general assignment
for the benefit of creditors, or the Trustee’s generally failing to pay its debts as they
become due;
(vi)
The discovery that any Location-Based Tax, other tax or other charge
levied or threatened to be levied against a Trust on account of the situs of the Trustee
could be avoided by the appointment of a successor trustee, to the extent that Ginnie Mae
determines that such tax or other change may not be adequately covered by the Trustee;
or
(vii) The removal for cause of the Trustee as the trustee of any trust that has
issued securities guaranteed by Ginnie Mae.
(c)
Any resignation or removal of the Trustee and appointment of a successor trustee
pursuant to any of the provisions of this Section 6.07 shall become effective upon acceptance of
appointment by the successor trustee as provided in Section 6.08 hereof but in no event shall
become effective until a successor has been appointed and has accepted the duties of the Trustee.
Any liability of the Trustee under a Trust Agreement arising prior to such termination shall
survive such termination.
(d)
To the extent that a successor trustee is entitled to receive reasonable
compensation in excess of compensation payable to the Trustee under the related Trust
Agreement, the Trustee shall indemnify Ginnie Mae and the Trust for the amount of such excess
and shall provide such security for such indemnity as Ginnie Mae may require.
Section 6.08. Successor Trustee.
(a)
Any successor trustee appointed to serve as Trustee of a Trust shall execute,
acknowledge and deliver to Ginnie Mae and its predecessor trustee an instrument accepting such
appointment under the related Trust Agreement, and thereupon the resignation or removal of the
predecessor trustee shall 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 under the Trust Agreement, with the same effect as if originally named as
trustee therein. The predecessor trustee shall immediately deliver to the successor trustee all
documents and statements held by it under the applicable Trust Agreement, and the predecessor
22
VI-13-22
trustee shall execute and deliver such instruments and do such other things as may reasonably be
required for more fully and certainly vesting and confirming in the successor trustee all such
rights, powers, duties and obligations. The predecessor trustee shall perform the duties and
obligations imposed on it in this Section 6.08 irrespective of any stay arising from, any
injunction or other process issued pursuant to, and any restriction or limitation imposed by any
bankruptcy, insolvency, receivership, conservatorship or other similar law or regulation, state or
federal, now or hereafter in effect, including without limitation 11 U.S.C. §§ 105, 362 and 18
U.S.C. §§ 1821, 1823, each as amended from time to time. In the event the predecessor trustee
fails to perform the duties and obligations imposed on it in this Section 6.08, Ginnie Mae may
take any action it deems necessary or advisable to cause the performance of such duties and
obligations.
(b)
No successor trustee shall accept appointment as provided in this Section 6.08
unless at the time of such acceptance such successor trustee is eligible under the provisions of
Section 6.06 hereof.
(c)
Upon acceptance of appointment by a successor trustee as provided in this Section
6.08, the successor trustee shall mail notice of the succession of such trustee hereunder to all
Holders at their addresses as shown in the Register.
Section 6.09. Appointment of Co-Trustee.
The Trustee shall be permitted to appoint a Person that either meets the eligibility
requirements to act as a Trustee hereunder or otherwise has been approved in writing by Ginnie
Mae to act as co-trustee with respect to the Trust. Any such co-trustee may perform any of the
duties and obligations of the Trustee hereunder, provided, however, that any such appointment of
any co-trustee shall not relieve the Trustee of any of its obligations and duties hereunder. The
Trustee shall continue to remain liable for the performance of all such duties and obligations
hereunder (including the obligation to indemnify Ginnie Mae pursuant to Section 6.11 hereof),
irrespective of the appointment of any co-trustee to perform such duties or obligations on behalf
of the Trustee.
Section 6.10. Merger or Consolidation of Trustee.
Any corporation into which a Trustee may be merged or converted or with which it may
be consolidated or any corporation resulting from any merger, conversion or consolidation to
which such Trustee may be a party, or any corporation succeeding to all or substantially all of the
corporate trust business of such Trustee, shall be the successor of such Trustee under the related
Trust Agreement without the execution or filing of any paper or any further act on the part of any
of the parties to the Trust Agreement, provided such corporation is eligible under the provisions
of Section 6.06 hereof.
Section 6.11. Indemnification of HUD and Ginnie Mae.
The Trustee for each Trust shall indemnify and hold harmless HUD and Ginnie Mae
(including each official, officer, employee and agent of HUD and Ginnie Mae) from and against
23
VI-13-23
any and all losses, claims, demands, liabilities, or expenses (including, without limitation, all
attorneys’ fees and related charges and expenses) resulting, directly or indirectly, from any
Trustee default or other failure to perform under the related Trust Agreement. Without limiting
the foregoing, Ginnie Mae’s right to indemnification hereunder shall include the right to
reimbursement of any and all amounts paid by Ginnie Mae to any Holder of such Series as a
result of any failure of the Trustee properly to calculate the amount of any required distribution
to any such Holder or to cause the proper distributions to be made to any such Holder, together
with interest thereon at a rate equal to the yield on three-month U.S. Treasury securities.
Notwithstanding the foregoing, the Trustee will not be liable for any action reasonably taken,
suffered or omitted by it in good faith and believed by it to be authorized by the Trust
Agreement.
Section 6.12. Performance Reviews by Ginnie Mae.
At its sole discretion, and from time to time, Ginnie Mae shall have the right to undertake
a full performance review of the Trustee and any subcontractors retained by the Trustee. Any
such review may involve the on-site inspection of the Trustee’s (or any subcontractor’s) facilities
and the review of any books, records or documents of the Trustee (or any subcontractor) which
relate to the performance by the Trustee (or any subcontractor) of its duties hereunder. In
connection with any such review and inspection, the Trustee agrees to make available to Ginnie
Mae appropriate officers of the Trustee (or any subcontractor) and to otherwise cooperate with
such an undertaking by Ginnie Mae.
Section 6.13. Voting of the Underlying Certificates or the Underlying SMBS
Securities.
In the event that a vote of the holders of Underlying Certificates or Underlying SMBS
Securities is required pursuant to the trust agreement governing any Underlying Trust or
Underlying SMBS Trust, the Trustee shall vote in respect of the Underlying Certificate or
Underlying SMBS Trust in a manner that, in its sole judgment, is consistent with the best
interests of the holders of the Securities. Notwithstanding the preceding sentence, the Trustee
shall not have a right to vote, under this Section 6.13, in any case where the existence of such
right would cause the Trust not to be treated as a grantor trust for United States federal income
tax purposes.
ARTICLE VII
TERMINATION
The respective obligations and responsibilities of the Sponsor and the Trustee created by
the related Trust Agreement shall terminate upon the payment of all principal and accrued
interest on the Securities and all other amounts due and owing by the Trustee under such Trust
Agreement; provided, however, that in no event shall the Trust created hereby continue beyond
the expiration of 21 years less one day 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’s, living
on the date hereof.
24
VI-13-24
ARTICLE VIII
MISCELLANEOUS PROVISIONS
Section 8.01. Limitation of Rights of Holders.
The death or incapacity of any person having an interest, beneficial or otherwise, in a
Security shall not operate to terminate any Trust Agreement, nor entitle the legal representatives
or heirs of such person or any Holder for such person to claim an accounting, take any action or
bring any proceeding in any court for a partition or winding up of any Trust, nor otherwise affect
the rights, obligations and liabilities of the parties hereto or any of them.
Section 8.02. Control by Holders.
Except as otherwise provided in the Trust Agreement, no Holder in any Series shall have
any right to vote or in any manner otherwise control the administration, operation and
management of any Trust, or the obligations of the parties hereto, nor shall anything herein set
forth, or contained in the terms of the Securities, be construed so as to constitute the Holders
from time to time as partners or members of an association; nor shall a Holder be under any
liability to any third person by reason of any action taken by the parties to this Trust Agreement
pursuant to any provision hereof.
Section 8.03. Amendment of Trust Agreements.
(a)
Any Trust Agreement may, with the consent of Ginnie Mae, and shall, at the
request of Ginnie Mae, be amended from time to time by the Trustee without the consent of the
Sponsor or any Holder or Holders (i) to cure any ambiguity, to correct or supplement any
provision herein which may be inconsistent with any other provision herein, or to make any other
provisions with respect to this Trust Agreement, provided that any such amendment shall not
effect a change in interest rates, the Distribution Dates, Record Dates, Accounting Dates, the
Ginnie Mae Guaranty or other payment terms established by the Trust Agreement for the Series
which adversely affects in any material respect the interests of any Holder and shall not impose
an additional obligation on any party who has not consented to such amendment; or (ii) except as
provided in Section 8.03(b) below, to make any other changes that Ginnie Mae requests.
(b)
Notwithstanding any other provision herein, without the consent of each Holder
who may be adversely affected, the related Trust Agreement may not be amended to impair or
affect the right of such Holder to receive payment of principal and interest (including any
payment under the Ginnie Mae Guaranty in respect thereof) or to institute suit for the
enforcement of any such payment, all as herein provided, on or after the respective due date of
such payment. Notwithstanding the foregoing, the Trustee shall not allow any amendment to the
related Trust Agreement that would cause the Trust not to be treated as a grantor trust for United
States federal income tax purposes.
(c)
In connection with any amendment to a Trust Agreement made pursuant to this
Section 8.03, the Sponsor shall deliver to Ginnie Mae and the Trustee an Opinion of Counsel
(who, if the amendment is at the request of the Sponsor, may be Trust Counsel), addressed to
25
VI-13-25
Ginnie Mae and the Trustee, to the effect that (i) such counsel has examined the amendment and
the relevant portion of the related Trust Agreement, (ii) the amendment is permitted by the
related Trust Agreement and (iii) the proposed amendment will not cause any related SMBS
Trust not to be treated as a grantor trust for United States federal income tax purposes.
Section 8.04. Persons Deemed Owners.
(a)
The Trustee, Ginnie Mae and the Registrar, or any agent of the Trustee, Ginnie
Mae or the Registrar, may deem and treat the Holder of the Securities (which, with respect to the
Securities, will be the Book-Entry Depository (or its nominee)), as the absolute owner of such
Securities for the purpose of receiving distributions of principal or interest and for all other
purposes, and neither the Trustee, Ginnie Mae nor the Registrar, nor any agent of the Trustee,
Ginnie Mae or the Registrar, shall be affected by any notice to the contrary. All such
distributions so made to the Holder or upon such Holder’s order shall be valid and, to the extent
of the sum or sums so distributed, effectual to satisfy and discharge the duty for monies
distributable by the Trustee upon such Securities.
(b)
The Holder of a Security is not the Beneficial Owner of such Security. The rights
of a Beneficial Owner of a Security with respect to the Trustee, Ginnie Mae and the Registrar
may be exercised only through the Holder, which is the Book-Entry Depository or its nominee.
The Trustee, Ginnie Mae and the Registrar will have no obligation to a Beneficial Owner of a
Security because such obligations are satisfied directly to the Book-Entry Depository.
Section 8.05. Third-Party Beneficiary; Ginnie Mae Subrogation.
The Trustee and the Sponsor hereby acknowledge and agree that Ginnie Mae is a thirdparty beneficiary of each Trust Agreement and entitled to enforce all obligations of any party to a
Trust Agreement. Ginnie Mae shall be subrogated to all the rights, interests, remedies, powers
and privileges of the Holders in respect of any Ginnie Mae Guaranty Payments, to the extent of
such payments.
Section 8.06. Preemption.
Pursuant to Section 306(g)(3)(E)(iv) of the National Housing Act (12 U.S.C.
§ 1721(g)(3)(E)(iv)), Ginnie Mae may exercise any right or power granted to it in or recognized
under the Trust Agreement irrespective of any stay arising from, any injunction or other process
issued pursuant to, and any restriction or limitation imposed by any bankruptcy, insolvency,
receivership, conservatorship or other similar law or regulation, state or federal, now or hereafter
in effect, including without limitation 11 U.S.C. §§ 105, 362 and 18 U.S.C. §§ 1821, 1823, each
as amended from time to time.
Section 8.07. Governing Law.
THE TRUST AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE UNITED STATES OF AMERICA. INSOFAR
AS THERE MAY BE NO APPLICABLE LAW OF THE UNITED STATES, THE INTERNAL
LAWS OF THE STATE OF NEW YORK (WITHOUT GIVING REGARD TO CONFLICT OF
26
VI-13-26
LAWS PRINCIPLES OTHER THAN SECTIONS 5-1401 AND 5-1402 OF THE NEW YORK
GENERAL OBLIGATIONS LAW) SHALL BE DEEMED REFLECTIVE OF THE LAWS OF
THE UNITED STATES OF AMERICA, INSOFAR AS TO DO SO WOULD NOT
FRUSTRATE THE PURPOSES OF ANY PROVISION OF THE TRUST AGREEMENT OR
THE TRANSACTIONS GOVERNED THEREBY.
Section 8.08. Successors.
The Trust Agreement shall be binding upon and shall inure to the benefit of any
successor to the Trustee, the Sponsor, or Ginnie Mae, including any successor by operation of
law.
Section 8.09. Headings.
The Article and Section headings are for convenience only and shall not affect the
construction of the Trust Agreement.
Section 8.10. Notice and Demand.
Any notice, demand or other communication which by any provision of a Trust
Agreement is required or permitted to be given or served to or upon any Holder may be given or
served in writing by deposit thereof, postage prepaid, in the United States mail addressed to such
Holder as such Holder’s name and address may appear in the records of the Trustee or the
Registrar. Such notice, demand or other communication to or upon a Holder shall be deemed to
have been sufficiently given or made, for all purposes, upon mailing or transmission.
RECEIPT AND ACCEPTANCE OF A SECURITY BY OR ON BEHALF OF A
HOLDER, WITHOUT ANY SIGNATURE OR FURTHER MANIFESTATION OF ASSENT,
SHALL CONSTITUTE THE UNCONDITIONAL ACCEPTANCE BY THE HOLDER AND
ALL OTHERS HAVING A BENEFICIAL INTEREST IN SUCH SECURITY OF ALL THE
TERMS AND PROVISIONS OF THE RELATED TRUST AGREEMENT.
All demands, notices, approvals and communications under the Trust Agreement shall be
in writing and shall be deemed to have been duly given if personally delivered (including
overnight receipted delivery by a recognized courier service) to or mailed by registered mail,
postage prepaid, or transmitted by any standard form of written telecommunications and
confirmed by a similar mailed writing, to the address provided in the Trust Agreement. The
address for Ginnie Mae shall be as follows:
Government National Mortgage Association
Office of Capital Markets
425 3rd Street S.W., 4th Floor
Washington, D.C. 20024
Attention: Senior Vice President, Capital Markets Division
Telephone: (202) 475-8855
Facsimile: (202) 485-9585
27
VI-13-27
With copies to:
Department of Housing and Urban Development
Office of General Counsel
451 7th Street S.W., Room 9250
Washington, D.C. 20410
Attention: Assistant General Counsel Ginnie Mae/Finance
Telephone: (202) 402-5196
and the Legal Advisor as of the date of the demand, notice, approval or communication.
The addresses of all other parties are set forth in the related Sponsor Agreement.
Section 8.11. Severability of Provisions.
Any part, provision, representation or warranty of any Trust Agreement that is prohibited
or that is held to be void or unenforceable shall be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining parts, provisions, representations or
warranties of that Trust Agreement. Any part, provision, representation or warranty of a Trust
Agreement that is prohibited or unenforceable or is held to be void or unenforceable in any
jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining parts, provisions, representations or
warranties of that Trust Agreement, and any such prohibition or unenforceability in any
jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction.
To the extent permitted by applicable law, the parties to each Trust Agreement waive any
provision of law which prohibits or renders void or unenforceable any provision of that Trust
Agreement.
Section 8.12. Counterparts.
The Trust Agreement may be executed in two or more counterparts, each of which when
so executed and delivered shall be an original, and all of which together shall constitute one and
the same instrument. The Trust Agreement shall inure to the benefit of and be binding upon the
parties thereto and their respective successors and assigns.
ARTICLE IX
TAX ADMINISTRATOR
Section 9.01. Tax Administration.
(a)
Each Holder of a Security hereby designates the Tax Administrator, as its agent,
to perform certain tax administration functions of the related SMBS Trust.
(b)
With respect to each Trust, the Tax Administrator shall pay in a timely manner:
(i)
the amount of any United States federal, state and local taxes imposed on
the Trust out of amounts in the Trust Accounts (except for Location-Based Taxes
28
VI-13-28
attributable to the Tax Administrator, which shall be paid by the Tax Administrator out of
its own funds); provided, however, that the Tax Administrator may decide, provided it
has received the written permission of Ginnie Mae, to pay or deposit such tax but
subsequently to contest such tax, or, if permitted by law, to refrain from paying such tax
pending the outcome of the contest of such tax, and
(ii)
out of its own funds, any and all tax related expenses (not including taxes)
of the Trust, including but not limited to any professional fees or expenses related to
audits or any administrative or judicial proceedings with respect to each such Trust that
involves the Internal Revenue Service or state or local tax authorities; provided, however,
that the Tax Administrator may pay out of amounts in the Trust Accounts the reasonable
cost of contesting a tax imposed on the Trust, provided that the Tax Administrator has
received Ginnie Mae’s written permission to engage in the contest.
(c)
With respect to each Trust, the Tax Administrator shall maintain all books,
records, and supporting documents that are necessary to comply with any and all aspects of the
Tax Administrator’s duties under the Trust Agreement and other closing documents.
(d)
For each Trust, the related Tax Administrator shall timely prepare, sign (or, as
appropriate, submit to the Trustee for signature) and file all of the United States federal, state,
and local tax and information returns of the Trust in a manner consistent with the Offering
Circular. The expenses of preparing and filing such returns shall be borne by the Tax
Administrator without any right to reimbursement by the Trustee or from amounts on deposit in
the Trust Accounts.
(e)
The Tax Administrator for each Trust shall assist the Trustee in performing in a
timely manner all reporting and other tax compliance duties that are the responsibility of the
Trust under United States federal, state or local tax law. Upon the Tax Administrator’s request,
the Trustee shall provide the Tax Administrator with a list of Security holders of record and any
other information reasonably necessary to the Tax Administrator in the performance of its duties.
(f)
With respect to each Trust, the Tax Administrator and the Trustee shall take any
action or cause any Trust to take any action necessary to create or maintain the status of such
Trust as a grantor trust pursuant to Section 2.06 hereof.
(g)
With respect to each Trust, neither the Tax Administrator nor the Trustee shall
take any action or fail to take any action, or cause any Trust to take any action or fail to take any
action that, if taken or not taken, could endanger the status of any such Trust as a grantor trust
pursuant to Section 2.06 hereof.
(h)
With respect to each Trust, unless otherwise provided in the related Trust
Agreement, the fiscal year of such Trust shall run from January 1 (or from the Closing Date, in
the case of the first fiscal year) through December 31.
(i)
The Trustee shall reimburse the Trust for any Location-Based Taxes.
29
VI-13-29
Section 9.02. Resignation and Removal of the Tax Administrator.
(a)
Unless otherwise provided in the Trust Agreement, the Trustee shall act as Tax
Administrator. The Trustee may subcontract with another Person acceptable to Ginnie Mae to
undertake these obligations. In addition, Ginnie Mae reserves the right to require the Trustee to
subcontract with a Person designated by Ginnie Mae to perform these duties. Execution of a
subcontract shall not relieve the Trustee, however, of any responsibility for the tax
administration of the Trust or of liability for breaches of the obligations of the Tax Administrator
under the Trust Agreement.
(b)
If the Tax Administrator for a Trust is unable for any reason to fulfill its duties as
Tax Administrator, the Tax Administrator shall immediately notify Ginnie Mae and the Trustee.
Upon notification, the Trustee may appoint another Person acceptable to Ginnie Mae to act as
Tax Administrator or Ginnie Mae may direct the Trustee to appoint another Person to act in such
capacity.
(c)
Except as provided in a Trust Agreement, Ginnie Mae has reserved the right to
remove the Tax Administrator for cause at any time. For the purposes of this Section 9.02
“cause” shall mean one of the following:
(i)
The Tax Administrator’s inability or failure to take any actions required
under the related Trust Agreement;
(ii)
Failure on the part of the Tax Administrator to observe or perform any
other of its covenants set forth in the related Trust Agreement;
(iii) A court having jurisdiction entering a decree or order for relief in respect
of the Tax Administrator in an involuntary case under any applicable bankruptcy,
insolvency or other similar law now or hereafter in effect, or appointing a receiver,
liquidator, assignee, custodian, sequestrator (or other similar official) of the Tax
Administrator or for all or substantially all of its property, or order the winding up or
liquidation of its affairs; or
(iv)
The Tax Administrator commencing a voluntary case under any applicable
bankruptcy, insolvency or other similar law now or hereafter in effect, or consenting to
the entry of an order for relief in an involuntary case under any such law, or consenting to
the appointment of or taking of possession by a receiver, liquidator, assignee, trustee,
custodian, sequestrator (or other similar official) of the Tax Administrator or for any
substantial part of its property, or making any general assignment for the benefit of
creditors, or the Tax Administrator failing generally to pay its debts as they become due.
(d)
Any resignation or removal of the Tax Administrator and appointment of a
successor Tax Administrator pursuant to any of the provisions of this Section 9.02 shall become
effective upon acceptance of appointment by the successor Tax Administrator as provided in
Section 9.02(e) below. Any liability of the Tax Administrator under a Trust Agreement arising
prior to such termination shall survive such termination.
30
VI-13-30
(e)
The successor Tax Administrator appointed to serve as Tax Administrator of a
Trust as provided in this Section 9.02 shall execute, acknowledge and deliver to Ginnie Mae and
its predecessor Tax Administrator a written acceptance of such appointment under the related
Trust Agreement, and thereupon the resignation or removal of the predecessor Tax Administrator
shall become effective and such successor Tax Administrator, without any further act, deed or
conveyance, shall become fully vested with all the rights, powers, duties and obligations of its
predecessor under such Trust Agreement, with the same effect as if originally named as Tax
Administrator therein.
* * *
31
VI-13-31
Exhibit 1
See Form of Issuance Statement for SMBS Transactions
at page VI-9 in this Part VI of the Guide.
VI-13-32
FORM OF TRANSACTION OPINION OF
TRUST COUNSEL FOR SMBS TRANSACTIONS
Pursuant to the SMBS Sponsor Agreement, Trust Counsel must deliver an opinion substantially in
the form that follows as a condition to closing. In general, this condition must be met by the delivery
of an opinion in the form that follows, including the materials marked with square brackets “[].” If
an opinion includes the bracketed language, it need not include the language marked with braces
“{}.”
VI-14-0
FORM OF TRANSACTION OPINION OF
TRUST COUNSEL FOR SMBS TRANSACTIONS
_________ __, 20___
Government National Mortgage Association
Office of Capital Markets
425 3rd Street SW, 4th Floor
Washington, D.C. 20024
[Trustee]
[Sponsor]
Ginnie Mae Stripped Mortgage-Backed Securities Trust [ ]
Ladies and Gentlemen:
We have acted as trust counsel in connection with the issuance by the Ginnie Mae
Stripped Mortgage-Backed Securities Trust ___ (the “SMBS Trust”), established pursuant to a
trust agreement (the “SMBS Trust Agreement”), dated as of _________ __, 20___, by and
between ___________________, as trustee of the SMBS Trust (the “Trustee”), and
_____________________, [a][an] ________________ [corporation][limited liability
company][limited partnership][general partnership] (the “Sponsor”), and incorporating by
reference the Standard Trust Provisions for Ginnie Mae SMBS Trusts, _________ __, 20___
Edition (the “SMBS Standard Trust Provisions”), of approximately $_________ aggregate
principal amount of securities (the “Securities”) guaranteed by the Government National
Mortgage Association (“Ginnie Mae”). The Securities are being sold to the Sponsor pursuant to
the SMBS Trust Agreement. Capitalized terms used but not otherwise defined herein shall have
the meanings assigned to them in the glossary contained in the Ginnie Mae Multiclass Securities
Guide currently in effect (the “Glossary”).
The SMBS Base Offering Circular, dated _________ __, 20___, and the related Offering
Circular Supplement, dated _________ __, 20___ (collectively, the “Offering Circular”), were
prepared in connection with the offering of the Securities.
VI-14-1
The assets of the SMBS Trust consists primarily of [Trust MBS] [and] [Underlying
SMBS Securities] ([collectively,] the “Trust Assets”) sold to the SMBS Trust by the Sponsor. In
connection with the issuance of the Securities, Ginnie Mae is guaranteeing the payment of the
full amount of principal and interest on each Security pursuant to the Guaranty Agreement and
Section 3 of the Standard Sponsor Provisions for Ginnie Mae SMBS Securities, _________ __,
20___ Edition (the “SMBS Standard Sponsor Provisions”).
In connection with the foregoing, we have examined the following documents:
(a)
A copy of the SMBS Standard Trust Provisions;
(b)
A signed copy of the SMBS Trust Agreement, which incorporates by reference
the SMBS Standard Trust Provisions;
(c)
A copy of the Standard SMBS Sponsor Provisions;
(d)
A signed copy of the Sponsor Agreement, dated _________
________ __, 20___, between
Ginnie Mae and the Sponsor, which incorporates by reference the SMBS Standard
Sponsor Provisions;
(e)
A copy of the Offering Circular;
(f)
A copy of the Glossary;
(g)
The Issuance Statement[;][.] [and]
{(h) the opinion[s] of counsel of the Sponsor, delivered in connection with this
transaction (the “Sponsor’s Opinion[s]”)[;][.] [and]}
[(i)
the disclosure documents relating to the [Underlying SMBS Securit[y][ies]]
([each] as defined in the Offering Circular, and referred to herein [collectively,] as the
“Underlying Securit[y][ies] Disclosure Documents”)[;][.] [and]]
[(j)
the Articles of Incorporation and Bylaws (collectively, the “Constituent
Documents”) of the Sponsor, together with good standing certificates with respect to the
Sponsor; and
(k)
the resolutions of the Sponsor pertaining to the subject transactions, certified by
the Secretary or Assistant Secretary of the Sponsor.]
The SMBS Trust Agreement and the Sponsor Agreement are collectively referred to
herein as the “Agreements.”
For purposes of the opinions expressed below, we have assumed (a) the authenticity of all
documents submitted to us as originals, (b) the conformity to the originals of all documents
VI-14-2
submitted as certified or photostatic copies and the authenticity of the originals of such copies,
(c) the genuineness of signatures not witnessed by us, (d) the legal capacity of natural persons
and (e) the due authorization, execution and delivery of all documents by all parties and the
validity and binding effect thereof (other than [the due authorization, execution and delivery of
documents by the Sponsor and] the validity and binding effect of documents upon the Sponsor).
As to factual matters, we have relied upon representations included in the aforementioned
documents and in other documents delivered at the closing, upon certificates of officers of the
Sponsor and upon certificates of public officials. In addition, we have obtained from officers
and employees of the parties described above such other certificates and assurances, and we have
examined such records, other documents and questions of law, as we have considered necessary
or appropriate for purposes of rendering this opinion letter. [Whenever the phrase “to our
knowledge” is used herein, it refers to the actual knowledge of the attorneys of this firm involved
in the representation for this transaction.]
The enforceability of the Agreements against the parties thereto is subject to the
provisions of bankruptcy, insolvency, reorganization, moratorium and similar laws relating to or
affecting the rights of creditors generally and to principles of equity, whether considered at law
or in equity, except that Ginnie Mae may enforce the Agreements against the parties thereto
notwithstanding any bankruptcy, insolvency, reorganization or moratorium law, or any law
relating to or affecting the rights of creditors generally, to the extent that such law is preempted
by the authorizing law for the Ginnie Mae Multiclass Securities Program set forth at 12 U.S.C.
§ 1721(g)(3)(E)(iv).
We do not purport to express an opinion as to the laws of any jurisdiction other than
[NOTE: INCLUDE WHEN INCLUDING BRACKETED OPINIONS 1. THROUGH 5. IN
THIS OPINION: the State[s] of [INSERT STATE[S] OF ORGANIZATION AND, IF
DIFFERENT, PRINCIPAL PLACE OF BUSINESS OF THE SPONSOR,]] [the State of ][and]
New York and the United States of America.
I.
Based upon, and subject to, the foregoing and such other documents and information as
we have considered necessary for the purposes hereof, we are of the opinion that:
[1.
The Sponsor has been duly incorporated and is validly existing as a corporation in good
standing under the laws of the jurisdiction of its incorporation.
2.
The Sponsor has the corporate power and authority to enter into the transactions
contemplated by the Agreements.
3.
The Sponsor is duly qualified to do business as a foreign corporation and is in good
standing under the laws of each jurisdiction that requires such qualification wherein it owns or
leases material properties, except where the failure so to qualify would not have a material
adverse effect on such company’s ability to perform its obligations under the Agreements.
VI-14-3
4.
To our knowledge, there is no action, suit, proceeding or investigation pending or
threatened against the Sponsor that reasonably could be expected to affect adversely (a) the
Sponsor’s ability to carry on its business substantially as now conducted; (b) the transfer of the
Trust Assets; (c) the issuance of the Securities or (d) the execution, delivery, performance or
enforceability of the Agreements, including the Sponsor’s performance under any
indemnification provisions.]
5.
To our knowledge, no consent, approval, authorization or order of (a) any [INSERT
BOTH PRINCIPAL PLACE OF BUSINESS STATE AND, IF DIFFERENT, STATE OF
ORGANIZATION OF SPONSOR] state or federal court or (b) any [INSERT BOTH
PRINCIPAL PLACE OF BUSINESS STATE AND, IF DIFFERENT, STATE OF
ORGANIZATION OF SPONSOR] state or federal governmental agency or body is required for
the consummation by the Sponsor of the transactions contemplated by the Agreements, except
for those that have been obtained by the Sponsor and are in full force and effect; provided,
however, that we express no opinion with respect to requirements under federal or state securities
or blue sky laws, of any jurisdiction in connection with the distribution of the Securities.]
{1.
The Sponsor’s Opinion[s] [is] [are] satisfactory in form and scope to us, and we believe
that you may properly rely on [it] [them].}
{2}
[6.]
Assuming the due authorization, execution and delivery of the SMBS Trust
Agreement by the [Trustee] {parties thereto}, the provisions of the SMBS Trust Agreement are
sufficient to establish a trust under and pursuant to the governing laws of the SMBS Trust
Agreement.
{3}
[7.]
[Each of the Agreements has been duly executed and delivered by an authorized
signatory of the Sponsor, and] {Assuming the due authorization, execution and delivery of the
Agreements by the parties thereto,} each constitutes a valid, legal and binding agreement of the
Sponsor, enforceable against the Sponsor in accordance with its respective terms.
{4}
[8.]
The Securities conform in all material respects to the descriptions thereof
contained in the Offering Circular. The Securities have been duly and validly authorized and
delivered by the Trustee in accordance with the SMBS Trust Agreement and are duly and validly
issued and entitled to the benefits of such SMBS Trust Agreement.
{5}
[9.]
The Securities are exempt from the registration requirements of the Securities Act
of 1933, as amended, and the rules and regulations of the Securities and Exchange Commission
(the “Commission”) promulgated thereunder, and the Securities constitute “exempted securities”
under the Securities Exchange Act of 1934, as amended, and the rules and regulations of the
Commission promulgated thereunder.
{6}
[10.] The SMBS Trust Agreement is not required to be qualified under the Trust
Indenture Act of 1939, as amended, and the trust fund created thereby is not required to be
registered under the Investment Company Act of 1940, as amended.
VI-14-4
{7}
[11.] No consent, approval, authorization or order of (a) any _____________ state or
federal court or (b) any _________________ state or federal governmental agency or body is
required for the consummation by the SMBS Trust of the transactions contemplated by the
Agreements; provided, however, that we express no opinion with respect to requirements under
local and state securities laws, including but not limited to such as may be required under the
state securities or blue sky laws, of any jurisdiction in connection with the distribution of the
Securities.
{8}
[12.] The statements set forth under the headings “Terms Sheet” and “Description of
the Securities” in the Offering Circular Supplement, and under the headings “Description of the
Securities” and “The Trusts” in the SMBS Base Offering Circular, insofar as such statements
together purport to summarize certain provisions of the Agreements, provide a fair summary of
such provisions.
{9}
[13.] The statements in the Offering Circular Supplement under the headings “ERISA
Matters” and “Legal Investment Considerations,” and in the SMBS Base Offering Circular under
the headings “ERISA Considerations” and “Legal Investment Considerations,” insofar as they
describe federal statutes and regulations or constitute legal conclusions with respect thereto, have
been prepared or reviewed by us, and such statements provide a fair summary of such statutes
and regulations.
{10} [14.] The Securities qualify as “guaranteed governmental mortgage pool certificates”
within the meaning of 29 C.F.R. § 2510.3-101(i)(2).
II.
We have participated in various conferences with [officers and directors of] [appropriate
representatives of] the Sponsor, representatives of Ginnie Mae, representatives of
[Hunton Andrews Kurth LLP] [and] [Harrell & Chambliss LLP] [BurgherGray LLP], counsel to
Ginnie Mae, and [appropriate representatives of] the Accountants. At those conferences, the
contents of the Offering Circular were discussed and revised. [Since the dates of those
conferences, we have inquired of appropriate representatives whether there has been any material
change in the affairs of the Sponsor.]
Because of the inherent limitations in the independent verification of factual matters, we
are not passing upon, and do not assume any responsibility for, and make no representation that
we have independently verified, the accuracy, completeness or fairness of the statements
contained in the Offering Circular, except as specifically set forth in paragraphs [12 and 13]
{8 and 9} of Part I of our opinion above. Also, we do not express any opinion or belief as to the
financial statements or other numerical, financial or statistical information contained in the
Offering Circular. However, subject to the foregoing, we advise you that nothing has come to
our attention that would lead us to believe that the Offering Circular, as of the date thereof and at
the date hereof, contained or contains any untrue statement of a material fact or omitted or omits
to state any material fact necessary in order to make the statements made therein, in the light of
VI-14-5
the circumstances under which they were made, not misleading (except that we express no
opinion with respect to the numerical, financial and statistical data contained in the Offering
Circular).
We express no opinion as to any matter other than as expressly set forth herein, and no
other opinion is to be, or may be, inferred or implied herefrom. This opinion is given as of the
date hereof and is based on facts and conditions presently known to us and laws and regulations
currently in effect, and we do not undertake, and hereby disclaim, any obligation to advise you of
any change in any matters set forth herein.
This opinion letter is being furnished to you solely for your benefit and may not be relied upon
by, nor may copies be delivered to, any person without our prior written consent.
Very truly yours,
VI-14-6
FORM OF OPINION OF SPONSOR FOR SMBS TRANSACTIONS
_________ __, 20___
Government National Mortgage Association
Office of Capital Markets
425 3rd Street SW, 4th Floor
Washington, D.C. 20024
[Trustee]
[Sponsor]
Re:
Guaranteed Stripped Mortgage-Backed Securities
Ginnie Mae Stripped Mortgage-Backed Securities Trust ___
Ladies & Gentlemen:
I am [employed as] [the] [Internal] [Associate General] [General] counsel [by] [of]
_____________________________ (“Sponsor”) and, in such capacity, have acted as counsel to
Sponsor, [a][an] __________ [corporation][limited liability company][limited
partnership][general partnership], in connection with the issuance, by the Ginnie Mae Stripped
Mortgage-Backed Securities Trust ___ (the “SMBS Trust”), established pursuant to a trust
agreement (the “SMBS Trust Agreement”) dated as of _________ __, 20___, by and between
______________________________, as trustee of the SMBS Trust (the “Trustee”), and the
Sponsor, and incorporating by reference the Standard Trust Provisions for Ginnie Mae SMBS
Trusts, _________
______ __, 20___ Edition, of approximately $_________ aggregate principal amount
of securities (the “Securities”) guaranteed by the Government National Mortgage Association
(“Ginnie Mae”). The Securities are being sold to the Sponsor pursuant to the SMBS Trust
Agreement. Capitalized terms not otherwise defined herein shall have the meanings assigned to
them in the glossary contained in the Ginnie Mae Multiclass Securities Guide currently in effect.
In connection with this opinion, I [or others under my supervision] have examined the
SMBS Trust Agreement and a sponsor agreement (the “Sponsor Agreement” and, together with
the Trust Agreement, the “Agreements”) dated as of _________ __, 20___, by and between
Ginnie Mae and the Sponsor and incorporating by reference the Standard SMBS Sponsor
Provisions, [_____] Edition. I [or others under my supervision] have also examined and am
familiar with originals or copies, certified or otherwise identified to my satisfaction, of such
documents as I have deemed necessary or appropriate as a basis for the opinion set forth below.
In my examination, I have assumed the genuineness of all signatures, the legal capacity
of natural persons, the conformity to original documents of all documents submitted to me as
certified or photostatic copies, the authenticity of the originals of such copies, and the due
VI-15-1
authorization, execution and delivery of all documents by all parties and the validity and binding
effect thereof (other than the due authorization, execution and delivery of documents by the
Sponsor as to which I express an opinion herein). As to any fact material to this opinion that I
did not independently establish or verify, I have relied upon statements and representations of
officers and other representatives of the Sponsor. Whenever the phrase “to my knowledge” is
used herein, it refers to the actual knowledge of the attorneys employed by the Sponsor who are
involved in the representation for this transaction.
I am admitted to the Bar of the State of ________, and I express no opinion as to the laws
of any jurisdiction other than the laws of the State of [INSERT STATE OF PRINCIPAL PLACE
OF BUSINESS OF SPONSOR], [INSERT, IF STATE IS DIFFERENT: [the [corporate] [limited
liability company] laws of the State of [INSERT STATE OF ORGANIZATION OF
SPONSOR]] and, to the extent specifically referred to herein, the laws of the United States of
America. Based upon and subject to the foregoing, I am of the opinion that:
1. The Sponsor has been duly [incorporated] [organized] [formed as] and is validly
existing as a [corporation] [limited liability company] [limited partnership] [general
partnership] in good standing under the laws of the jurisdiction of its [incorporation]
[organization] [formation].
2. The Sponsor has the [corporate] power and authority to enter into the transactions and
perform the obligations contemplated by the Agreements.
3. The Sponsor is duly qualified to do business as a foreign [corporation] [limited
liability company] [limited partnership] [general partnership] and is in good standing
under the laws of each jurisdiction that requires such qualification wherein it owns or
leases material properties, except where the failure so to qualify would not have a
material adverse effect on the Sponsor’s ability to perform its obligations under the
Agreements.
4. There is no action, suit, proceeding or investigation pending or, to my knowledge,
threatened against the Sponsor that reasonably could be expected to affect adversely
(a) the Sponsor’s ability to carry on its business substantially as now conducted, (b)
the transfer of the Trust Assets, (c) the transfer of the Securities or (d) the execution,
delivery, performance or enforceability of the Agreements, including the Sponsor’s
performance under any indemnification provisions.
5. The Agreements have been duly executed and delivered by the Sponsor.
6. No consent, approval, authorization or order of (a) any [INSERT BOTH PRINCIPAL
PLACE OF BUSINESS AND, IF DIFFERENT, STATE OF ORGANIZATION OF
SPONSOR] state or federal court or (b) any [INSERT BOTH PRINCIPAL PLACE
OF BUSINESS AND, IF DIFFERENT, STATE OF ORGANIZATION OF
SPONSOR] state or federal governmental agency or body is required for the
consummation by the Sponsor of the transactions contemplated by the Agreements,
except for those that have been obtained by the Sponsor and are in full force and
effect; provided, however, that I express no opinion with respect to requirements
VI-15-2
under federal or state securities or blue sky laws, of any jurisdiction in connection
with the distribution of the Securities.
I express no opinion as to any matter other than as expressly set forth herein, and no other
opinion is to be, or may be, inferred or implied herefrom. This opinion is given as of the date
hereof and is based on facts and conditions presently known to me and laws and regulations
currently in effect, and I do not undertake, and hereby disclaim, any obligation to advise you of
any change in any matters set forth herein.
I consent to reliance upon this opinion letter by Ginnie Mae for the purpose of complying with
its requirements in connection with the Sponsor Agreement and by [INSERT TRUST
COUNSEL] in connection with the delivery of its opinion related to the Agreements. Except as
provided in the preceding sentence, this opinion letter may not be relied upon by, nor may copies
be delivered to, any person without my prior written consent.
Very truly yours,
VI-15-3
FORM OF TAX OPINION OF
TRUST COUNSEL FOR SMBS TRANSACTIONS
_________ __, 20___
Government National Mortgage Association
Office of Capital Markets
425 3rd Street SW, 4th Floor
Washington, D.C. 20024
Ginnie Mae Stripped Mortgage-Backed Securities Trust __
c/o [Trustee]
[Trustee]
[Sponsor]
Ginnie Mae Stripped Mortgage-Backed Securities Trust [__]
Certain Tax Matters
Ladies and Gentlemen:
We have acted as trust counsel in connection with the formation of the Ginnie Mae
Stripped Mortgage-Backed Securities Trust ___ (the “SMBS Trust”), established pursuant to a
trust agreement (the “SMBS Trust Agreement”), dated as of _________ __, 20___, by and
between___________________, as trustee of the SMBS Trust (the “Trustee”), and
__________________, [a][an] ________________ [corporation] [limited liability
company][limited partnership][general partnership] (the “Sponsor”), and incorporating by
reference the Standard Trust Provisions for Ginnie Mae SMBS Trusts, _________ __, 20___
Edition (the “SMBS Standard Trust Provisions”), and the issuance of approximately
$____________ aggregate principal amount of its Guaranteed Stripped Mortgage-Backed
Securities (the “Securities”). The Securities consist of the Classes of Securities listed on the
front cover of the Offering Circular Supplement dated _________ __, 20___ (the “Offering
Circular Supplement”). The Securities are being offered pursuant to the SMBS Base Offering
Circular dated _________ __, 20___ and the Offering Circular Supplement (together, the
“Offering Circular”). Capitalized terms used but not defined herein shall have the meanings
assigned to them in the glossary contained in the SMBS Trust Agreement.
VI-16-1
We have reviewed the originals or copies of: (i) the SMBS Trust Agreement, including
the SMBS Standard Trust Provisions; (ii) the Sponsor Agreement dated as of _________ __,
20___, by and between the Sponsor and Ginnie Mae, including the Standard Sponsor Provisions
for Ginnie Mae SMBS Securities, _________ __, 20___ Edition[, as amended through
_________ __, 20___]; (iii) the Guaranty Agreement dated as of _________
_ __, 20___; and (iv)
the Offering Circular. We also have reviewed such other documents relating to the transaction
and made such other factual and legal inquiries as we have considered necessary for purposes of
the opinions given below.
Based on the foregoing, we are of the opinion that, with respect to this transaction, the
statements and legal conclusions contained in the Offering Circular under the caption “Certain
United States Federal Income Tax Consequences,” insofar as they constitute matters of United
States federal law or legal conclusions with respect thereto, are correct in all material respects
and the discussion thereunder does not omit any material provision with respect to the matters
covered. Also based on the foregoing and subject to the qualifications stated herein, we are of
the further opinion that, if the Trustee, the Sponsor, Ginnie Mae and the other parties to the
documents referenced in the foregoing paragraph comply (without waiver) with all of the
provisions of such documents, SMBS Trust ___ will constitute a grantor trust within the meaning
of Sections 671 through 679 of the Code, and not a partnership or an association taxable as a
corporation.
You should be aware that the above opinions and the discussion contained in the Offering
Circular under the caption “Certain United States Federal Income Tax Consequences” represent
conclusions as to the application of existing law to the transaction described herein. There can
be no assurance that existing law will not change or that contrary positions will not be taken by
the Internal Revenue Service.
No opinion has been sought and none has been given concerning the tax consequences of
the transaction described herein or of the acquisition, ownership, or disposition of the Securities
under the laws of any state or locality.
The opinions expressed herein are solely for the information and use of the addressees
and may not be relied upon or otherwise used for any purpose by any other person without our
express written consent.
Very truly yours,
VI-16-2
FORM OF OPINION OF TRUSTEE’S COUNSEL FOR SMBS TRANSACTIONS
_________ __, 20___
Government National Mortgage Association
Office of Capital Markets
425 3rd Street SW, 4th Floor
Washington, D.C. 20024
Ginnie Mae Stripped Mortgage-Backed Securities Trust ___
c/o [Trustee]
[Sponsor]
Ginnie Mae Stripped Mortgage-Backed Securities Trust [___]
Ladies and Gentlemen:
We have acted as special counsel to ________________________ in its capacity as trustee
(the “Trustee”) in connection with the issuance by the Ginnie Mae Stripped Mortgage-Backed
Securities Trust ___ (the “SMBS Trust”), established pursuant to a trust agreement (the “SMBS
Trust Agreement”), dated as of _________ __, 20___, by and between the Trustee and
_____________________, [a][an] ________________ [corporation] [limited liability
company][limited partnership][general partnership] (the “Sponsor”), and incorporating by reference
the SMBS Standard Trust Provisions, _________ __, 20___ Edition (the “SMBS Standard Trust
Provisions”), of $________________ aggregate principal amount of securities (the “Securities”)
guaranteed by the Government National Mortgage Association (“Ginnie Mae”). The Securities are
being sold to the Sponsor pursuant to the SMBS Trust Agreement. Capitalized terms not otherwise
defined herein shall have the meanings assigned to them in the glossary contained in the Ginnie Mae
Multiclass Securities Guide currently in effect.
In connection with the foregoing, we have examined the following documents:
(a)
A copy of the SMBS Standard Trust Provisions;
(b)
A signed copy of the SMBS Trust Agreement, which incorporates by reference
the SMBS Standard Trust Provisions;
VI-17-1
(c)
the Issuance Statement;
(d)
the [Amended and Restated] Articles of [Incorporation] [Association] [Restated
Organization Certificate] and [the Amended and Restated] Bylaws of the Trustee,
together with [Certificates of Corporate Existence and Fiduciary Powers with
respect to the Trustee] [good standing certificates with respect to the Trustee]; and
(e)
the resolutions [and other corporate action] of the Trustee pertaining to the subject
transactions, certified by [the Secretary or an Assistant Secretary] [an officer] of
the Trustee.
We also have reviewed originals or copies, certified or otherwise identified to our
satisfaction, of such other documents as we deemed necessary or appropriate as a basis for the
opinions set forth below.
For purposes of the opinions expressed below, we have assumed (a) the authenticity of all
documents submitted to us as originals, (b) the conformity to the originals of all documents
submitted as certified or photostatic copies and the authenticity of the originals of such copies, (c) the
genuineness of signatures not witnessed by us, (d) the legal capacity of natural persons, and (e) the
due authorization, execution and delivery of all documents by all parties and the validity and binding
effect thereof (other than the due authorization, execution and delivery of documents by the Trustee
and the validity and binding effect of documents upon the Trustee as to which we express an opinion
herein).
As to factual matters, we have relied upon representations included in the aforementioned
documents and in other documents delivered at the closing, upon certificates of officers of the
Trustee and upon certificates of public officials. In addition, we have obtained from officers and
employees of the parties described above such other certificates and assurances, and we have
examined such records, other documents and questions of law, as we have considered necessary or
appropriate for purposes of rendering this opinion letter. Whenever the phrase “to our knowledge” is
used herein, it refers to the actual knowledge of the attorneys of this firm involved in the
representation of the Trustee in this transaction.
The enforceability of the SMBS Trust Agreement against the parties thereto is subject to the
provisions of bankruptcy, insolvency, reorganization, moratorium and similar laws relating to or
affecting the rights of creditors generally and principles of equity, whether considered at law or in
equity, except that Ginnie Mae may enforce the SMBS Trust Agreement against the parties thereto
notwithstanding any bankruptcy, insolvency, reorganization or moratorium law, or any law relating
to or affecting the rights of creditors generally, to the extent that such law is preempted by the
authorizing law for the Ginnie Mae Multiclass Securities Program set forth at 12 U.S.C.
§ 1721(g)(3)(E)(iv).
We do not purport to express an opinion as to the laws of any jurisdiction other than the
[State of ____________________,
__, the] State of New York and the United States of America.
Based upon, and subject to, the foregoing and such other documents and information as we
have considered necessary for the purposes hereof, we are of the opinion that:
VI-17-2
1.
The Trustee is a(n) [[______________________ corporation] [national banking
association], duly organized and validly existing in good standing under the laws
of [____________] [the United States of America], and has all requisite power
and authority to enter into the SMBS Trust Agreement and to perform its
obligations thereunder.
2.
To our knowledge, there is no action, suit, proceeding or investigation pending or
threatened against the Trustee that could materially adversely affect the Trustee’s
ability to perform its obligations under the SMBS Trust Agreement.
3.
The SMBS Trust Agreement has been duly authorized, executed and delivered by
the Trustee, and constitutes the legal, valid and binding obligation of the Trustee,
enforceable against the Trustee in accordance with its terms, subject to the
limitations noted above.
4.
The Securities have been duly and validly authorized and delivered by the Trustee
in accordance with the SMBS Trust Agreement and are duly and validly issued
and entitled to the benefits of the SMBS Trust Agreement.
5.
The performance by the Trustee of its duties pursuant to the SMBS Trust
Agreement does not conflict with or result in a breach or violation of any term or
provision of, or constitute a default under, any statute or regulation currently
governing the Trustee.
6.
Assuming that, and for so long as, the SMBS Trust qualifies as a grantor trust
(within the meaning of Sections 671 through 679 of the Code) for United States
federal income tax purposes, it will not be subject to any tax imposed by the
[State][Commonwealth] of [Trustee’s principal place of business and, if different,
the place where the principal trustee functions with respect to the Trust will take
place] or any political subdivision thereof on its assets or income, except to the
extent it is subject to United States federal income tax.
We express no opinion as to any matter other than as expressly set forth herein, and no other
opinion is to be, or may be, inferred or implied herefrom. This opinion is given as of the date hereof
and is based on facts and conditions presently known to us and laws and regulations currently in
effect, and we do not undertake, and hereby disclaim, any obligation to advise you of any change in
any matters set forth herein.
We consent to reliance upon this opinion letter by addressees hereto for the purpose of
complying with your requirements in connection with this transaction only as it relates to the specific
legal issues identified herein. Except as provided in the preceding sentence, this opinion letter may
not be relied upon by, nor may copies be delivered to, any person without our prior written consent.
Very truly yours,
VI-17-3
FORM OF ACCOUNTANTS’ AGREED-UPON PROCEDURES LETTER
AS OF THE CLOSING DATE FOR SMBS TRANSACTIONS
[available upon request from Ginnie Mae’s Financial Advisor]
VI-18-0
Office of Management & Budget publication number 2503-0030
| File Type | application/pdf |
| Author | Hunton & Williams LLP |
| File Modified | 2023-07-26 |
| File Created | 2023-07-17 |