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EXHIBIT 4.1
EXECUTION COPY
MELLON RESIDENTIAL FUNDING CORPORATION,
Depositor
MELLON BANK, N.A.,
Seller and Master Servicer
and
BANKERS TRUST COMPANY OF CALIFORNIA, N.A.,
Trustee
-----------------------------------
POOLING AND SERVICING AGREEMENT
Dated as of September 30, 1997
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HOME EQUITY INSTALLMENT LOAN TRUST 1997-1
MORTGAGE PASS-THROUGH CERTIFICATES, SERIES 1997-1
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TABLE OF CONTENTS
Page
ARTICLE I.........................................................................................................4
SECTION 1.01. Definitions........................................................................4
SECTION 1.02. Calculations......................................................................21
ARTICLE II.......................................................................................................22
SECTION 2.01. Conveyance of Mortgage Loans......................................................22
SECTION 2.02. Acceptance by Trustee of the Mortgage Loans.......................................24
SECTION 2.03. Representations, Warranties and Covenants of the Seller and Master
Servicer..........................................................................25
SECTION 2.04. Representations and Warranties of the Depositor as to the Mortgage Loans..........27
SECTION 2.05. Delivery of Opinion of Counsel in Connection with Substitutions...................27
SECTION 2.06. Execution and Delivery of Certificates............................................28
SECTION 2.07. REMIC Matters.....................................................................28
ARTICLE III......................................................................................................29
SECTION 3.01. Master Servicer to Service Mortgage Loans.........................................29
SECTION 3.02. Subservicing; Enforcement of the Obligations of Servicers.........................30
SECTION 3.03. Rights of the Depositor and the Trustee in Respect of the Master Servicer.........30
SECTION 3.04. Trustee to Act as Master Servicer.................................................30
SECTION 3.05. Collection of Mortgage Loan Payments; Certificate Account; Distribution
Account...........................................................................31
SECTION 3.06. Collection of Taxes, Assessments and Similar Items; Escrow Accounts...............34
SECTION 3.07. Access to Certain Documentation and Information Regarding the Mortgage
Loans.............................................................................34
SECTION 3.08. Permitted Withdrawals from the Certificate Account and Distribution
Account...........................................................................34
SECTION 3.09. [Reserved]........................................................................36
SECTION 3.10. Enforcement of Due-on-Sale Clauses; Assumption Agreements.........................36
SECTION 3.11. Realization Upon Defaulted Mortgage Loans; Repurchase of Certain Mortgage
Loans.............................................................................37
SECTION 3.12. Superior Liens....................................................................39
SECTION 3.13. Trustee to Cooperate; Release of Mortgage Files...................................40
SECTION 3.14. Documents Records and Funds in Possession of Master Servicer to be Held
for the Trustee...................................................................41
SECTION 3.15. Servicing Compensation............................................................41
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SECTION 3.16. Access to Certain Documentation...................................................41
SECTION 3.17. Annual Statement as to Compliance.................................................42
SECTION 3.18. Annual Independent Public Accountants' Servicing Statement; Financial
Statements........................................................................42
SECTION 3.19. Errors and Omissions Insurance; Fidelity Bonds....................................42
ARTICLE IV.......................................................................................................44
SECTION 4.01. Advances..........................................................................44
SECTION 4.02. Priorities of Distribution........................................................44
SECTION 4.03. Allocation of Losses..............................................................46
SECTION 4.04. Monthly Statements to Certificateholders..........................................46
SECTION 4.05. Determination of Pass-Through Rates for LIBOR Certificates........................48
ARTICLE V........................................................................................................50
SECTION 5.01. The Certificates..................................................................50
SECTION 5.02. Certificate Register; Registration of Transfer and Exchange of
Certificates......................................................................50
SECTION 5.03. Mutilated, Destroyed, Lost or Stolen Certificates.................................55
SECTION 5.04. Persons Deemed Owners.............................................................55
SECTION 5.05. Access to List of Certificateholders' Names and Addresses.........................55
SECTION 5.06. Maintenance of Office or Agency...................................................55
ARTICLE VI.......................................................................................................56
SECTION 6.01. Respective Liabilities of the Depositor and the Master Servicer...................56
SECTION 6.02. Merger or Consolidation of the Depositor or the Master Servicer...................56
SECTION 6.03. Limitation on Liability of the Depositor, the Seller, the Master Servicer
and Others........................................................................56
SECTION 6.04. Limitation on Resignation of Master Servicer......................................57
ARTICLE VII......................................................................................................58
SECTION 7.01. Events of Default.................................................................58
SECTION 7.02. Trustee to Act; Appointment of Successor..........................................59
SECTION 7.03. Notification to Certificateholders................................................60
ARTICLE VIII.....................................................................................................61
SECTION 8.01. Duties of Trustee.................................................................61
SECTION 8.02. Certain Matters Affecting the Trustee.............................................62
SECTION 8.03. Trustee Not Liable for Certificates or Mortgage Loans.............................63
SECTION 8.04. Trustee May Own Certificates......................................................63
SECTION 8.05. Trustee's Fees and Expenses.......................................................63
SECTION 8.06. Eligibility Requirements for Trustee..............................................64
SECTION 8.07. Resignation and Removal of Trustee................................................64
SECTION 8.08. Successor Trustee.................................................................65
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SECTION 8.09. Merger or Consolidation of Trustee................................................65
SECTION 8.10. Appointment of Co-Trustee or Separate Trustee.....................................65
SECTION 8.11. Tax Matters.......................................................................67
SECTION 8.12. Periodic Filings..................................................................68
ARTICLE IX.......................................................................................................70
SECTION 9.01. Termination upon Liquidation or Purchase of all Mortgage Loans....................70
SECTION 9.02. Special Termination...............................................................70
SECTION 9.03. Final Distribution on the Certificates............................................71
SECTION 9.04. Additional Termination Requirements...............................................72
ARTICLE X........................................................................................................73
SECTION 10.01. Amendment.........................................................................73
SECTION 10.02. Recordation of Agreement; Counterparts............................................74
SECTION 10.03. Governing Law.....................................................................74
SECTION 10.04. Intention of Parties..............................................................74
SECTION 10.05. Notices...........................................................................75
SECTION 10.06. Severability of Provisions........................................................76
SECTION 10.07. Assignment........................................................................76
SECTION 10.08. Limitation on Rights of Certificateholders........................................76
SECTION 10.09. Inspection and Audit..............................................................77
SECTION 10.10. Certificates Nonassessable and Fully Paid.........................................77
EXHIBITS
Exhibit A: Form of Senior Certificate................................................................A-1
Exhibit B: Form of Subordinated Certificate..........................................................B-1
Exhibit C: Form of Class R Certificate...............................................................C-1
Exhibit D: [Reserved]................................................................................D-1
Exhibit E: Form of Reverse of Certificates...........................................................E-1
Exhibit F: [Reserved]................................................................................F-1
Exhibit G: Form of Initial Certificates..............................................................G-1
Exhibit H: Form of Final Certification of Trustee....................................................H-1
Exhibit I: Transfer Affidavit........................................................................I-1
Exhibit J: Form of Transferor Certificate............................................................J-1
Exhibit K: Form of Investment Letter [Non-Rule 144A].................................................K-1
Exhibit L: Form of Rule 144A Letter..................................................................L-1
Exhibit M: Request for Release (for Trustee).........................................................M-1
Exhibit N: Request for Release (Mortgage Loan) Paid in Full, Repurchased and Replaced)...............N-1
Exhibit O: [Reserved]................................................................................O-1
Exhibit P: Auction Solicitation Procedures...........................................................P-1
SCHEDULES
Schedule I: Mortgage Loan Schedule.............................................................S-I-1
Schedule II: Representations and Warranties of the Seller/Master Servicer......................S-II-1
Schedule III: Representations and Warranties as to the Mortgage Loans..........................S-III-1
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Schedule IV: [Reserved]........................................................................S-IV-1
Schedule V: Form of Monthly Master Servicer Report.............................................S-V-1
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THIS POOLING AND SERVICING AGREEMENT, dated as of September 30, 1997,
among MELLON RESIDENTIAL FUNDING CORPORATION, a Delaware corporation, as
depositor (the "Depositor"), MELLON BANK, N.A., a national banking association
organized under the laws of the United States, as seller (in such capacity, the
"Seller") and as master servicer (in such capacity, the "Master Servicer"), and
BANKERS TRUST COMPANY OF CALIFORNIA, N.A., a national banking association
organized under the laws of the United States, as trustee (the "Trustee").
WITNESSETH THAT
In consideration of the mutual agreements herein contained, the parties
hereto agree as follows:
PRELIMINARY STATEMENT
The Depositor is the owner of the Trust Fund that is hereby conveyed to
the Trustee in return for the Certificates. The Trust Fund for federal income
tax purposes will consist of a single REMIC. The Certificates will represent the
entire beneficial ownership interest in the Trust Fund. The Regular Certificates
will represent the "regular interests" in the Trust Fund and the Residual
Certificates will represent the single "residual interest" in the Trust Fund.
The "latest possible maturity date" for federal income tax purposes of all
interests created hereby will be the Latest Possible Maturity Date.
The following table sets forth characteristics of the Certificates,
together with the minimum denominations and integral multiples in excess thereof
in which such Classes shall be issuable (except that one Certificate of each
Class of Certificates may be issued in a different amount and, in addition, one
Residual Certificate representing the Tax Matters Person Certificate may be
issued in a different amount):
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------------------------ ---------------------- ---------------------- ---------------------- ----------------------
Integral
Initial Class Multiples
Certificate Pass-Through Minimum in Excess of
Balance Rate Denomination Minimum
------------------------ ---------------------- ---------------------- ---------------------- ----------------------
Class A-1 $ 49,865,000 (1) $25,000 $1,000
------------------------ ---------------------- ---------------------- ---------------------- ----------------------
Class A-2 $ 9,196,000 6.48% $25,000 $1,000
------------------------ ---------------------- ---------------------- ---------------------- ----------------------
Class A-3 $ 24,270,000 6.52% $25,000 $1,000
------------------------ ---------------------- ---------------------- ---------------------- ----------------------
Class A-4 $ 22,689,000 6.84% $25,000 $1,000
------------------------ ---------------------- ---------------------- ---------------------- ----------------------
Class A-5 $ 12,518,000 6.69% $25,000 $1,000
------------------------ ---------------------- ---------------------- ---------------------- ----------------------
Class B $ 6,635,000 6.98% $25,000 $1,000
------------------------ ---------------------- ---------------------- ---------------------- ----------------------
Class R (2) (2) (2) (2)
------------------------ ---------------------- ---------------------- ---------------------- ----------------------
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1. The Pass-Through Rate for the Class A-1 Certificates for any
Distribution Date will be equal to the lesser of (i) the sum of LIBOR
plus 0.10% and (ii) the Net WAC Cap. The Pass-Through Rate of the Class
A-1 Certificates for the first Distribution Date is 5.725%.
2. The Class R Certificates will have no principal balance and will not
bear interest.
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Set forth below are designations of Classes of Certificates to the
categories used herein:
Book-Entry Certificates................ All Classes of Certificates other than the Physical Certificates.
ERISA-Restricted
Certificates........................... Subordinated Certificates and Residual Certificates.
Fixed Rate Certificates................ Class A-2, Class A-3, Class A-4 and Class A-5 Certificates.
Floating Rate Certificates............. Class A-1 Certificates.
LIBOR Certificates..................... Class A-1 Certificates.
Offered Certificates................... All Classes of Certificates other than the Residual Certificates.
Physical Certificates.................. Residual Certificates.
Rating Agencies........................ S&P and Xxxxx'x.
Regular Certificates................... All Classes of Certificates, other than the Residual Certificates.
Residual Certificates.................. Class R Certificates.
Senior Certificates. .................. Class A-1, Class A-2, Class A-3, Class A-4 and Class A-5 Certificates.
Subordinated Certificates.............. Class B Certificates.
Defined terms and provisions herein relating to statistical rating
agencies not designated above as Rating Agencies shall be of no force or effect.
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ARTICLE I
SECTION 1.01. Definitions.
Whenever used in this Agreement, the following words and phrases,
unless the context otherwise requires, shall have the following meanings:
Advance: The payment required to be made by the Master Servicer with
respect to any Distribution Date pursuant to Section 4.01, the amount of any
such payment being equal to the aggregate of payments of interest (net of the
Master Servicing Fee and net of any net income in the case of any REO Property)
on the Mortgage Loans that were due but not received during the related Due
Period less the aggregate amount of any such delinquent payments that the Master
Servicer has determined would constitute a Nonrecoverable Advance if advanced
and the amounts previously advanced and not reimbursed.
Agreement: This Pooling and Servicing Agreement and all amendments or
supplements hereto.
Amount Held for Future Distribution: As to any Distribution Date, the
aggregate amount held in the Certificate Account at the close of business on the
related Determination Date on account of (i) Principal Prepayments and
Liquidation Proceeds received in the month of such Distribution Date and (ii)
all Scheduled Payments due after the related Due Period.
Applied Realized Loss Amount: As to any Distribution Date, an amount
equal to the excess, if any of (i) the aggregate of the Class Certificate
Balances of the Offered Certificates, after giving effect to all distributions
on such Distribution Date over (ii) the Pool Principal Balance as of the last
day of the immediately preceding Due Period.
Appraised Value: With respect to any Mortgage Loan, the Appraised Value
of the related Mortgaged Property shall be: (i) with respect to a Mortgage Loan
other than a Refinancing Mortgage Loan, the lesser of (a) the value of the
Mortgaged Property based upon the appraisal made at the time of the origination
of such Mortgage Loan and (b) the sales price of the Mortgaged Property at the
time of the origination of such Mortgage Loan; and (ii) with respect to a
Refinancing Mortgage Loan, the value of the Mortgaged Property based upon the
appraisal made at the time of the origination of such Refinancing Mortgage Loan.
Available Funds: As to any Distribution Date, the sum of (a) the
aggregate amount held in the Certificate Account at the close of business on the
related Determination Date net of the Amount Held for Future Distribution and
net of amounts permitted to be withdrawn from the Certificate Account pursuant
to clauses (i)-(viii), inclusive, of Section 3.08(a) and amounts permitted to be
withdrawn from the Distribution Account pursuant to clauses (i)-(iii) inclusive
of Section 3.08(b), (b) the amount of the related Advance and (c) in connection
with Defective Mortgage Loans, as applicable, the aggregate of the Purchase
Prices and Substitution Adjustment Amounts deposited on the related Distribution
Account Deposit Date.
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Basic Principal Distribution Amount: With respect to any Distribution
Date, the excess of (i) the Principal Remittance Amount for such Distribution
Date over (ii) the Overcollateralization Release Amount, if any, for such
Distribution Date.
Book-Entry Certificates: As specified in the Preliminary Statement.
Business Day: Any day other than (i) a Saturday or a Sunday, or (ii) a
day on which banking institutions in the City of New York, New York or the city
in which the Corporate Trust Office of the Trustee is located are authorized or
obligated by law or executive order to be closed.
Certificate: Any one of the Certificates executed by the Trustee in
substantially the forms attached hereto as exhibits.
Certificate Account: The separate Eligible Account or Accounts created
and maintained by the Master Servicer pursuant to Section 3.05 with a depository
institution in the name of the Master Servicer for the benefit of the Trustee on
behalf of Certificateholders and designated "Mellon Bank, N.A. in trust for the
registered holders of Mellon Bank Home Equity Installment Loan Trust 1997-1,
Mortgage Pass-Through Certificates Series 1997-1."
Certificate Balance: With respect to any Certificate at any date, the
maximum dollar amount of principal to which the Holder thereof is then entitled
hereunder, such amount being equal to the Denomination thereof (A) minus the sum
of (i) all distributions of principal previously made with respect thereto and
(ii) in the case of any Subordinated Certificates, any Applied Realized Loss
Amounts.
Certificate Owner: With respect to a Book-Entry Certificate, the Person
who is the beneficial owner of such Book-Entry Certificate.
Certificate Register: The register maintained pursuant to Section 5.02
hereof.
Certificateholder or Holder: The person in whose name a Certificate is
registered in the Certificate Register, except that, solely for the purpose of
giving any consent pursuant to this Agreement, any Certificate registered in the
name of the Depositor or any affiliate of the Depositor shall be deemed not to
be Outstanding and the Percentage Interest evidenced thereby shall not be taken
into account in determining whether the requisite amount of Percentage Interests
necessary to effect such consent has been obtained; provided, however, that if
any such Person (including the Depositor) owns 100% of the Percentage Interests
evidenced by a Class of Certificates, such Certificates shall be deemed to be
Outstanding for purposes of any provision hereof that requires the consent of
the Holders of Certificates of a particular Class as a condition to the taking
of any action hereunder. The Trustee is entitled to rely conclusively on a
certification of the Depositor or any affiliate of the Depositor in determining
which Certificates are registered in the name of an affiliate of the Depositor.
Class: All Certificates bearing the same alpha-numeric designation as
set forth in the Preliminary Statement.
Class A-5 Principal Distribution Amount: As to any Distribution Date,
the product of (i) the applicable Class A-5 Principal Payment Percentage for
such Distribution Date and (ii) the Class A-5 Pro Rata Principal Distribution
Amount for such Distribution Date.
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Class A-5 Principal Payment Percentage: As to any Distribution Date,
the applicable percentage is set forth below.
Principal Payment
Distribution Dates Percentage
November 1997 - October 2000.................................... 0%
November 2000 - October 2002.................................... 45%
November 2002 - October 2003.................................... 80%
November 2003 - October 2004.................................... 100%
November 2004 - and thereafter.................................. 300%
Class A-5 Pro Rata Principal Distribution Amount: As to any
Distribution Date, an amount equal to the product of (x) a fraction, the
numerator of which is the Class Certificate Balance of the Class A-5
Certificates immediately prior to such Distribution Date and the denominator of
which is the aggregate Class Certificate Balance of all Classes of Senior
Certificates immediately prior to such Distribution Date and (y) the Senior
Principal Distribution Amount for such Distribution Date.
Class B Principal Distribution Amount: As to any Distribution Date on
or after the Stepdown Date and as long as a Trigger Event is not in effect, the
positive difference, if any, of the excess of (x) the sum of (i) the aggregate
Class Certificate Balance of the Senior Certificates (after taking into account
the payment of the Senior Principal Distribution Amount on such Distribution
Date) and (ii) the Class Certificate Balance of the Class B Certificates
immediately prior to such Distribution Date over (y) the lesser of (A) the
product of (i) 98% and (ii) the Pool Principal Balance as of the last day of the
related Due Period and (B) the Pool Principal Balance as of the last day of the
related Due Period minus $625,940.
Class Certificate Balance: With respect to any Class of Certificates
and any Distribution Date, the initial Class Certificate Balance thereof reduced
by the sum of (i) all amounts previously distributed to holders of Certificates
of such Class as payments of principal and (ii) in the case of any Class of
Subordinated Certificates, any Applied Realized Loss Amounts allocated to such
Class.
Closing Date: October 28, 1997.
Code: The Internal Revenue Code of 1986, including any successor or
amendatory provisions.
Combined Loan-to-Value Ratio: With respect to any Mortgage Loan, the
fraction (expressed as a percentage) the numerator of which is the sum of (i)
the principal balance of the related Mortgage Loan at the date of origination
and (ii) the unpaid principal balance of any senior mortgage at the date of
origination of the Mortgage Loan and the denominator of which is the Appraised
Value of the related Mortgaged Property.
Corporate Trust Office: The designated office of the Trustee at which
at any particular time its corporate trust business with respect to this
Agreement shall be administered, which office at the date of the execution of
this Agreement is located at 0 Xxxx Xxxxx, 00xx Xxxxx, Xxxxxx, Xxxxxxxxxx 00000
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(Attn: Mellon Home Equity Installment Loan Trust 1997-1, facsimile no. (714)
253-7577, and which is the address to which notices to and correspondence with
the Trustee should be directed.
Current Interest: With respect to each Class of Certificates, the
amount of interest accrued during the related Interest Accrual Period at the
applicable Pass-Through Rate on the related Class Certificate Balance.
Cut-off Date: September 30, 1997, except that the Cut-off Date with
respect to any Mortgage Note for a Mortgage Loan originated after September 30,
1997, shall be the date of such Mortgage Note.
Cut-off Date Pool Principal Balance: $125,173,642.63.
Cut-off Date Principal Balance: As to any Mortgage Loan, the Stated
Principal Balance thereof as of the close of business on the Cut-off Date.
Defective Mortgage Loan: Any Mortgage Loan which is required to be
repurchased pursuant to Section 2.02 or 2.03.
Definitive Certificates: Any Certificate evidenced by a Physical
Certificate and any Certificate issued in lieu of a Book-Entry Certificate
pursuant to Section 5.02(e).
Deleted Mortgage Loan: As defined in Section 2.03(c) hereof.
Denomination: With respect to each Certificate, the amount set forth on
the face thereof as the "Initial Certificate Balance of this Certificate" or,
with respect to a Class R Certificate, the Percentage Interest appearing on the
face thereof.
Depositor: Mellon Residential Funding Corporation, a Delaware
corporation, or its successor in interest.
Depository: The initial Depository shall be The Depository Trust
Company, the nominee of which is CEDE & Co., as the registered Holder of the
Book-Entry Certificates. The Depository shall at all times be a "clearing
corporation" as defined in Section 8-102(5) of the Uniform Commercial Code of
the State of New York.
Depository Participant: A broker, dealer, bank or other financial
institution or other Person for whom from time to time a Depository effects
book-entry transfers and pledges of securities deposited with the Depository.
Determination Date: As to any Distribution Date, the 15th day of each
month or if such 15th day is not a Business Day the next preceding Business Day.
Distribution Account: The separate Eligible Account created and
maintained by the Trustee pursuant to Section 3.05 in the name of the Trustee
for the benefit of the Certificateholders and designated "Banker Trust Company
of California, N.A. in trust for registered holders of Mellon Bank Home Equity
Installment Loan Trust 1997-1, Mortgage Pass-Through Certificates, Series
1997-1."
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Funds in the Distribution Account shall be held in trust for the
Certificateholders for the uses and purposes set forth in this Agreement.
Distribution Account Deposit Date: As to any Distribution Date, 12:30
p.m. Pacific time on the Business Day immediately preceding such Distribution
Date.
Distribution Date: The 25th day of each calendar month after the
initial issuance of the Certificates, or if such 25th day is not a Business Day,
the next succeeding Business Day, commencing in November, 1997.
Due Date: With respect to any Mortgage Loan and any Due Period, the day
of the month on which Scheduled Payments are due.
Due Period: With respect to any Determination Date or Distribution
Date, the calendar month immediately preceding such Determination Date or
Distribution Date, as the case may be.
Eligible Account: Any of (i) an account or accounts maintained with a
federal or state chartered depository institution or trust company the
short-term unsecured debt obligations of which (or, in the case of a depository
institution or trust company that is the principal subsidiary of a holding
company, the debt obligations of such holding company) have the highest
short-term ratings of each Rating Agency at the time any amounts are held on
deposit therein, or (ii) an account or accounts in a depository institution or
trust company in which such accounts are insured by the FDIC (to the limits
established by the FDIC) and the uninsured deposits in which accounts are
otherwise secured such that, as evidenced by an Opinion of Counsel delivered to
the Trustee and to each Rating Agency, the Certificateholders have a claim with
respect to the funds in such account or a perfected first priority security
interest against any collateral (which shall be limited to Permitted
Investments) securing such funds that is superior to claims of any other
depositors or creditors of the depository institution or trust company in which
such account is maintained, or (iii) a trust account or accounts maintained with
(a) the trust department of a federal or state chartered depository institution
or (b) a trust company, acting in its fiduciary capacity or (iv) any other
account acceptable to each Rating Agency. Eligible Accounts may bear interest,
and may include, if otherwise qualified under this definition, accounts
maintained with the Trustee.
ERISA: The Employee Retirement Income Security Act of 1974, as amended.
ERISA-Restricted Certificate: As specified in the Preliminary
Statement.
Escrow Account: The Eligible Account or Accounts established and
maintained pursuant to Section 3.06(a) hereof.
Event of Default: As defined in Section 7.01 hereof.
Excess Proceeds: With respect to any Liquidated Mortgage Loan, the
amount, if any, by which the sum of any Liquidation Proceeds of such Mortgage
Loan received in the calendar month in which such Mortgage Loan became a
Liquidated Mortgage Loan, net of any amounts previously reimbursed to the Master
Servicer as Nonrecoverable Advance(s) with respect to such Mortgage Loan
pursuant to Section 3.08(a)(iii), exceeds (i) the unpaid principal balance of
such Liquidated Mortgage
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Loan as of the Due Date for such Mortgage Loan in the Due Period in which such
Mortgage Loan became a Liquidated Mortgage Loan plus (ii) accrued interest at
the Mortgage Rate from the Due Date for such Mortgage Loan as to which interest
was last paid or advanced (and not reimbursed) to Certificateholders up to the
Due Date for such Mortgage Loan occurring in the Due Period applicable to the
Distribution Date immediately following the calendar month during which such
liquidation occurred.
Expense Rate: As to each Mortgage Loan, the Master Servicing Fee Rate.
Extra Principal Distribution Amount: As to any Distribution Date, the
lesser of (x) the Monthly Excess Interest Amount for such Distribution Date and
(y) the Overcollateralization Deficiency for such Distribution Date.
FDIC: The Federal Deposit Insurance Corporation, or any successor
thereto.
FHLMC: The Federal Home Loan Mortgage Corporation, a corporate
instrumentality of the United States created and existing under Title III of the
Emergency Home Finance Act of 1970, as amended, or any successor thereto.
FIRREA: The Financial Institutions Reform, Recovery, and Enforcement
Act of 1989.
Fiscal Year: The calendar year or such other 12 month period as the
Master Servicer shall designate by notice to the Trustee.
First Lien: With respect to any Mortgage Loan which is a second
priority lien, the mortgage loan relating to the corresponding Mortgaged
Property having a first priority lien.
Fixed Rate Certificates: As specified in the Preliminary Statement.
Floating Rate Certificates: As specified in the Preliminary Statement.
FNMA: The Federal National Mortgage Association, a federally chartered
and privately owned corporation organized and existing under the Federal
National Mortgage Association Charter Act, or any successor thereto.
Indirect Participant: A broker, dealer, bank or other financial
institution or other Person that clears through or maintains a custodial
relationship with a Depository Participant.
Initial LIBOR Rate: 5.625%.
Insurance Policy: With respect to any Mortgage Loan included in the
Trust Fund, any insurance policy, including all riders and endorsements thereto
in effect, including any replacement policy or policies for any Insurance
Policies.
Insurance Proceeds: Proceeds paid by an insurer pursuant to any
Insurance Policy, in each case other than any amount included in such Insurance
Proceeds in respect of Insured Expenses.
Insured Expenses: Expenses covered by an Insurance Policy or any other
insurance policy with respect to the Mortgage Loans.
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Interest Accrual Period: With respect to each Class of Fixed Rate
Certificates and any Distribution Date, the calendar month prior to the month of
such Distribution Date. With respect to the Floating Rate Certificates and any
Distribution Date, the period beginning on the Distribution Date in the month
preceding the month of such Distribution Date (or in the case of the first
Distribution Date, beginning on the Closing Date) and ending on the day
preceding such Distribution Date.
Interest Carryover Amount: With respect to any Distribution Date and
any Class of Certificates, the sum of (i) the excess, if any, of the Current
Interest and any Interest Carryover Amount from the prior Distribution Date,
over the amount of interest actually distributed on such Class on such prior
Distribution Date and (ii) 30 days' interest on such excess at the applicable
Pass-Through Rate.
Interest Determination Date: With respect to any Interest Accrual
Period for any LIBOR Certificates, the second LIBOR Business Day prior to the
first day of such Interest Accrual Period.
Interest Distribution Amount: With respect to any Distribution Date and
any Class of Certificates, the sum of (a) the Current Interest and (b) the
Interest Carryover Amount, if any, for such Class.
Latest Possible Maturity Date: The Distribution Date following the
third anniversary of the scheduled maturity date of the Mortgage Loan having the
latest scheduled maturity date as of the Cut-off Date.
LIBOR: The London interbank offered rate for one-month United States
dollar deposits calculated in the manner described in Section 4.05.
LIBOR Business Day: Any day other than (i) a Saturday or Sunday or (ii)
a day on which banking institutions in the State of New York or in the City of
London, England are required by law to be closed.
LIBOR Certificates: As specified in the Preliminary Statement.
Liquidated Mortgage Loan: With respect to any Distribution Date, a
defaulted Mortgage Loan (including any REO Property) which was liquidated in the
calendar month preceding the month of such Distribution Date and as to which the
Master Servicer has determined (in accordance with this Agreement) that it has
received all amounts it expects to receive in connection with the liquidation of
such Mortgage Loan, including the final disposition of an REO Property.
Liquidation Proceeds: Amounts, including Insurance Proceeds, received
in connection with the partial or complete liquidation of defaulted Mortgage
Loans, whether through trustee's sale, foreclosure sale or otherwise or amounts
received in connection with any condemnation or partial release of a Mortgaged
Property and any other proceeds received in connection with an REO Property,
less the sum of related unreimbursed Master Servicing Fees, Servicing Advances
and Advances.
Majority in Interest: As to any Class of Regular Certificates, the
Holders of Certificates of such Class evidencing, in the aggregate, at least 51%
of the Percentage Interests evidenced by all Certificates of such Class.
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Master Servicer: Mellon Bank, N.A., a national banking association, and
its successors and assigns, in its capacity as master servicer hereunder.
Master Servicer Advance Date: As to any Distribution Date, 12:30 p.m.
Pacific time on the Business Day immediately preceding such Distribution Date.
Master Servicing Fee: As to each Mortgage Loan and any Distribution
Date, an amount payable out of each full payment of interest received on such
Mortgage Loan and equal to one-twelfth of the Master Servicing Fee Rate
multiplied by the Stated Principal Balance of such Mortgage Loan as of the Due
Date in the Due Period related to such Distribution Date (prior to giving effect
to any Scheduled Payments due on such Mortgage Loan on such Due Date), subject
to reduction as provided in Section 3.14.
Master Servicing Fee Rate: With respect to each Mortgage Loan, 0.50%
per annum.
Monthly Excess Interest Amount: As to any Distribution Date, Available
Funds remaining after distributions pursuant to Section 4.02(i) and (ii) (other
than the Extra Principal Distribution Amount).
Monthly Statement: The statement delivered to the Certificateholders
pursuant to Section 4.04.
Moody's: Xxxxx'x Investors Service, Inc., or any successor thereto. If
Xxxxx'x is designated as a Rating Agency in the Preliminary Statement, for
purposes of Section 10.05(b) the address for notices to Moody's shall be Xxxxx'x
Investors Service, Inc., 00 Xxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention:
Residential Pass-Through Monitoring, or such other address as Moody's may
hereafter furnish to the Depositor or the Master Servicer.
Mortgage: The mortgage, deed of trust or other instrument creating a
first or second lien on an estate in fee simple or leasehold interest in real
property securing a Mortgage Note.
Mortgage File: The mortgage documents listed in Section 2.01 hereof
pertaining to a particular Mortgage Loan and any additional documents delivered
to the Trustee to be added to the Mortgage File pursuant to this Agreement.
Mortgage Loans: Such of the mortgage loans transferred and assigned to
the Trustee pursuant to the provisions hereof as from time to time are held as a
part of the Trust Fund (including any REO Property), the mortgage loans so held
being identified in the Mortgage Loan Schedule, notwithstanding foreclosure or
other acquisition of title of the related Mortgaged Property.
Mortgage Loan Schedule: The list of Mortgage Loans (as from time to
time amended by the Master Servicer to reflect the addition of Substitute
Mortgage Loans and the deletion of Deleted Mortgage Loans pursuant to the
provisions of this Agreement) transferred to the Trustee as part of the Trust
Fund and from time to time subject to this Agreement, attached hereto as
Schedule I, setting forth the following information with respect to each
Mortgage Loan:
(i) the loan number;
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(ii) the Mortgagor's name and the street address of the
Mortgaged Property, including the zip code;
(iii) the maturity date;
(iv) the original principal balance;
(v) the Cut-off Date Principal Balance;
(vi) the first payment date of the Mortgage Loan;
(vii) the Scheduled Payment in effect as of the Cut-off Date;
(viii) the Combined Loan-to-Value Ratio at origination;
(ix) a code indicating whether the residential dwelling at the
time of origination was represented to be owner-occupied;
(x) a code indicating whether the residential dwelling is
either (a) a detached single family dwelling (b) a townhouse, (c) a
condominium unit, (d) a duplex, (e) a multifamily property or (f)
other;
(xi) the Mortgage Rate;
(xii) a code indicating the lien status; and
(xiii) the type of documentation program pursuant to which the
Mortgage Loan was originated.
Such schedule shall also set forth the total of the amounts described
under (iv) and (v) above for all of the Mortgage Loans.
Mortgage Note: The original executed note or other evidence of
indebtedness of a Mortgagor under a Mortgage Loan.
Mortgage Rate: The annual rate of interest borne by a Mortgage Note
from time to time.
Mortgaged Property: The underlying property securing a Mortgage Loan.
Mortgagor: The obligor(s) on a Mortgage Note.
Net Mortgage Rate: As to each Mortgage Loan, and at any time, the per
annum rate equal to the Mortgage Rate less the Expense Rate .
Net WAC Cap: As to any Distribution Date, the weighted average of the
Net Mortgage Rates of the Mortgage Loans as of the first day of the related Due
Period.
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Nonrecoverable Advance: Any portion of an Advance previously made or
proposed to be made by the Master Servicer that, in the good faith judgment of
the Master Servicer, will not be ultimately recoverable by the Master Servicer
from the related Mortgagor, related Liquidation Proceeds or otherwise.
Notice of Final Distribution: The notice to be provided pursuant to
Section 9.02 to the effect that final distribution on any of the Certificates
shall be made only upon presentation and surrender thereof.
Offered Certificates: As specified in the Preliminary Statement.
Officer's Certificate: A certificate (i) signed by the Chairman of the
Board, the Vice Chairman of the Board, the President, a Managing Director, a
Vice President (however denominated), an Assistant Vice President, the
Treasurer, the Secretary, or one of the Assistant Treasurers or Assistant
Secretaries of the Depositor or the Master Servicer, or (ii), if provided for in
this Agreement, signed by a Servicing Officer, as the case may be, and delivered
to the Depositor and the Trustee, as the case may be, as required by this
Agreement.
Opinion of Counsel: A written opinion of counsel, who may be counsel
for the Depositor or the Master Servicer, including, in-house counsel,
reasonably acceptable to the Trustee; provided, however, that with respect to
the interpretation or application of the REMIC Provisions, such counsel must (i)
in fact be independent of the Depositor and the Master Servicer, (ii) not have
any direct financial interest in the Depositor or the Master Servicer or in any
affiliate of either, and (iii) not be connected with the Depositor or the Master
Servicer as an officer, employee, promoter, underwriter, trustee, partner,
director or person performing similar functions.
Optional Termination: The termination of the trust created hereunder in
connection with the purchase of the Mortgage Loans pursuant to Section 9.01(a)
hereof.
Original Mortgage Loan: The mortgage loan refinanced in connection with
the origination of a Refinancing Mortgage Loan.
OTS: The Office of Thrift Supervision.
Outstanding: With respect to the Certificates as of any date of
determination, all Certificates theretofore executed and authenticated under
this Agreement except:
(i) Certificates theretofore canceled by the Trustee or
delivered to the Trustee for cancellation; and
(ii) Certificates in exchange for which or in lieu of which
other Certificates have been executed and delivered by the Trustee
pursuant to this Agreement.
Outstanding Mortgage Loan: As of any Due Date, a Mortgage Loan with a
Stated Principal Balance greater than zero-which was not the subject of a
Principal Prepayment in Full prior to such Due Date and which did not become a
Liquidated Mortgage Loan prior to such Due Date.
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Overcollateralization Amount: As to any Distribution Date, the excess,
if any, of (x) the Pool Principal Balance as of the last day of the immediately
preceding Due Period over (y) the aggregate Class Certificate Balance of all
Classes of Offered Certificates (after taking into account all distributions of
principal on such Distribution Date).
Overcollateralization Deficiency: As to any Distribution Date, the
excess, if any, of (x) the Targeted Overcollateralization Amount for such
Distribution Date over (y) the Overcollateralizaton Amount for such Distribution
Date, calculated for this purpose after taking into account the reduction on
such Distribution Date of the Class Certificate Balances of all Classes of the
Offered Certificates resulting from the distribution of the Basic Principal
Distribution Amount on such Distribution Date, but prior to taking into account
any Applied Realized Loss Amounts on such Distribution Date.
Overcollateralization Release Amount: With respect to any Distribution
Date after the Stepdown Date on which a Trigger Event is not in effect, the
lesser of (x) the Principal Remittance Amount for such Distribution Date and (y)
the excess, if any, of (i) the Overcollateralization Amount for such
Distribution Date, assuming that 100% of the Principal Remittance Amount is
applied as a principal payment on the Offered Certificates on such Distribution
Date over (ii) the Targeted Overcollateralization Amount for such Distribution
Date.
Ownership Interest: As to any Residual Certificate, any ownership
interest in such Certificate including any interest in such Certificate as the
Holder thereof and any other interest therein, whether direct or indirect, legal
or beneficial.
Pass-Through Rate: For any interest bearing Class of Certificates the
per annum rate set forth or calculated in the manner described in the
Preliminary Statement.
Percentage Interest: As to any Certificate, the percentage interest
evidenced thereby in distributions required to be made on the related Class,
such percentage interest being set forth on the face thereof or equal to the
percentage obtained by dividing the Denomination of such Certificate by the
aggregate of the Denominations of all Certificates of the same Class.
Permitted Investments: At any time, any one or more of the following
obligations and securities:
(i) obligations of the United States or any agency thereof,
provided such obligations are backed by the full faith and credit of
the United States;
(ii) general obligations of or obligations guaranteed by any
state of the United States or the District of Columbia receiving the
highest long-term debt rating of each Rating Agency, or such lower
rating as will not result in the downgrading or withdrawal of the
ratings then assigned to the Certificates by each Rating Agency;
(iii) commercial or finance company paper which is then
receiving the highest commercial or finance company paper rating of
each Rating Agency, or such lower rating as will not result in the
downgrading or withdrawal of the ratings then assigned to the
Certificates by each Rating Agency;
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(iv) certificates of deposit, demand or time deposits, or
bankers' acceptances issued by any depository institution or trust
company incorporated under the laws of the United States or of any
state thereof and subject to supervision and examination by federal
and/or state banking authorities, provided that the commercial paper
and/or long term unsecured debt obligations of such depository
institution or trust company (or in the case of the principal
depository institution in a holding company system, the commercial
paper or long-term unsecured debt obligations of such holding company,
but only if Xxxxx'x is not a Rating Agency) are then rated one of the
two highest long-term and the highest short-term ratings of each Rating
Agency for such securities, or such lower ratings as will not result in
the downgrading or withdrawal of the rating then assigned to the
Certificates by either Rating Agency;
(v) demand or time deposits or certificates of deposit issued
by any bank or trust company or savings institution to the extent that
such deposits are fully insured by the FDIC;
(vi) guaranteed reinvestment agreements issued by any bank,
insurance company or other corporation containing, at the time of the
issuance of such agreements, such terms and conditions as will not
result in the downgrading or withdrawal of the rating then assigned to
the Certificates by either Rating Agency;
(vii) repurchase obligations with respect to any security
described in clauses (i) and (ii) above, in either case entered into
with a depository institution or trust company (acting as principal)
described in clause (iv) above;
(viii) securities (other than stripped bonds, stripped coupons
or instruments sold at a purchase price in excess of 115% of the face
amount thereof) bearing interest or sold at a discount issued by any
corporation incorporated under the laws of the United States or any
state thereof which, at the time of such investment, have one of the
two highest ratings of each Rating Agency (except if the Rating Agency
is Moody's, such rating shall be the highest commercial paper rating of
Moody's for any such securities), or such lower rating as will not
result in the downgrading or withdrawal of the rating then assigned to
the Certificates by either Rating Agency, as evidenced by a signed
writing delivered by each Rating Agency;
(ix) units of a taxable money-market portfolio having the
highest rating assigned by each Rating Agency (except if the Rating
Agency is Moody's, the highest rating assigned by Moody's) and
restricted to obligations issued or guaranteed by the United States of
America or entities whose obligations are backed by the full faith and
credit of the United States of America and repurchase agreements
collateralized by such obligations; and
(x) such other investments bearing interest or sold at a
discount acceptable to each Rating Agency as will not result in the
downgrading or withdrawal of the rating then assigned to the
Certificates by either Rating Agency, as evidenced by a signed writing
delivered by each Rating Agency;
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provided that no such instrument shall be a Permitted Investment if such
instrument evidences the right to receive interest only payments with respect to
the obligations underlying such instrument.
Permitted Transferee: Any person other than (i) the United States, any
State or political subdivision thereof, or any agency or instrumentality of any
of the foregoing, (ii) a foreign government, International Organization or any
agency or instrumentality of either of the foregoing, (iii) an organization
(except certain farmers' cooperatives described in section 521 of the Code)
which is exempt from tax imposed by Chapter 1 of the Code (including the tax
imposed by section 511 of the Code on unrelated business taxable income) on any
excess inclusions (as defined in section 860E(c)(l) of the Code) with respect to
any Residual Certificate, (iv) rural electric and telephone cooperatives
described in section 1381(a)(2)(C) of the Code, (v) a Person that is not a
citizen or resident of the United States, a corporation, partnership, or other
entity created or organized in or under the laws of the United States or any
political subdivision thereof, or an estate or trust whose income from sources
without the United States is includible in gross income for United States
federal income tax purposes regardless of its connection with the conduct of a
trade or business within the United States unless such Person has furnished the
transferor and the Trustee with a duly completed Internal Revenue Service Form
4224, and (vi) any other Person so designated by the Depositor based upon an
Opinion of Counsel that the Transfer of an Ownership Interest in a Residual
Certificate to such Person may cause the REMIC hereunder to fail to qualify as a
REMIC at any time that the Certificates are outstanding. The terms "United
States," "State" and "International Organization" shall have the meanings set
forth in section 7701 of the Code or successor provisions. A corporation will
not be treated as an instrumentality of the United States or of any State or
political subdivision thereof for these purposes if all of its activities are
subject to tax and, with the exception of the Federal Home Loan Mortgage
Corporation, a majority of its board of directors is not selected by such
government unit.
Person: Any individual, corporation, partnership, joint venture,
association, joint-stock company, trust, unincorporated organization or
government, or any agency or political subdivision thereof.
Physical Certificate: As specified in the Preliminary Statement.
Pool Principal Balance: As to any Distribution Date, the aggregate of
the Stated Principal Balances of the Mortgage Loans which were Outstanding
Mortgage Loans on the last day of the related Due Period.
Prepayment Interest Shortfall: As to any Distribution Date, Mortgage
Loan and Principal Prepayment received during the related Due Period but prior
to the applicable Due Date, the amount, if any, by which one month's interest at
the related Mortgage Rate, net of the Master Servicing Fee Rate, on such
Principal Prepayment exceeds the amount of interest paid in connection with such
Principal Prepayment.
Principal Distribution Amount: With respect to any Distribution Date,
the sum of (i) the Basic Principal Distribution Amount for such Distribution
Date and (ii) the Extra Principal Distribution Amount for such Distribution
Date.
Principal Prepayment: Any payment of principal by a Mortgagor on a
Mortgage Loan that is received in advance of its scheduled Due Date and is not
accompanied by an amount representing
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scheduled interest due on any date or dates in any month or months subsequent to
the month of prepayment. Partial Principal Prepayments shall be applied by the
Master Servicer in accordance with the terms of the related Mortgage Note.
Principal Prepayment in Full: Any Principal Prepayment made by a
Mortgagor of the entire principal balance of a Mortgage Loan.
Principal Remittance Amount: With respect to any Distribution Date, the
sum of the following amounts (without duplication) with respect to the
immediately preceding Due Period: (i) each payment of principal on a Mortgage
Loan received by the Master Servicer during such Due Period, including all full
and partial Principal Prepayments, (ii) the Net Liquidation Proceeds allocable
to principal actually collected by the Master Servicer during the related Due
Period, (iii) the portion of the Purchase Price allocable to principal of all
repurchased Defective Mortgage Loans with respect to such Due Period and (iv)
any Substitution Adjustment Amounts received on or prior to the previous
Determination Date and not yet distributed.
Private Certificate: As specified in the Preliminary Statement.
Prospectus: The Prospectus Supplement dated October 16, 1997, together
with the Prospectus dated October 16, 1997 relating to the Offered Certificates.
Purchase Price: With respect to any Mortgage Loan required to be
purchased by the Seller pursuant to Section 2.02 or 2.03 hereof or purchased at
the option of the Master Servicer pursuant to Section 3.11, an amount equal to
the sum of (i) 100% of the unpaid principal balance of the Mortgage Loan on the
date of such purchase, and (ii) accrued interest thereon at the applicable
Mortgage Rate (or at the applicable Net Mortgage Rate if (x) the purchaser is
the Master Servicer or (y) if the purchaser is the Seller and the Seller is the
Master Servicer) from the date through which interest was last paid by the
Mortgagor to the Due Date in the Due Period related to the Distribution Date on
which the Purchase Price is to be distributed to Certificateholders.
Rating Agency: Each of the Rating Agencies specified in the Preliminary
Statement. If any such organization or a successor is no longer in existence,
"Rating Agency" shall be such nationally recognized statistical rating
organization, or other comparable Person, as is designated by the Depositor,
notice of which designation shall be given to the Trustee. References herein to
a given rating category of a Rating Agency shall mean such rating category
without giving effect to any modifiers. For purposes of Section 10.05(b), the
addresses for notices to each Rating Agency shall be (i) Standard & Poor's
Ratings Group, 00 Xxxxxxxx, 00xx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention:
Mortgage Surveillance Monitoring, and (ii) Xxxxx'x Investors Service, Inc., 00
Xxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: Residential Pass-Through
Monitoring, or such other address as either such Rating Agency may hereafter
furnish to the Depositor and the Master Servicer.
Realized Loss: With respect to each Liquidated Mortgage Loan, an amount
(not less than zero or more than the unpaid principal balance of the Mortgage
Loan) as of the date of such liquidation, equal to (i) the unpaid principal
balance of the Liquidated Mortgage Loan as of the date of such liquidation, plus
(ii) interest at the Adjusted Net Mortgage Rate from the Due Date as to which
interest was last paid or advanced (and not reimbursed) to Certificateholders up
to the Due Date in the Due Period related to the Distribution Date on which the
Liquidation Proceeds are required to be
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distributed on the unpaid principal balance of such Liquidated Mortgage Loan
from time to time, minus (iii) the Liquidation Proceeds, if any, received during
the month in which such liquidation occurred, to the extent applied as
recoveries of interest at the Adjusted Net Mortgage Rate and to principal of the
Liquidated Mortgage Loan.
Record Date: With respect to any Distribution Date and the Fixed Rate
Certificates (and the Floating Rate Certificates if issued as Definitive
Certificates), the close of business on the last Business Day of the month
preceding the month in which such Distribution Date occurs. With respect to any
Distribution Date and the Floating Rate Certificates which are Book-Entry
Certificates, the close of business on the Business Day preceding such
Distribution Date.
Reference Bank: As defined in Section 4.05.
Refinancing Mortgage Loan: Any Mortgage Loan originated in connection
with the refinancing of an existing mortgage loan.
Regular Certificates: As specified in the Preliminary Statement.
REMIC: A "real estate mortgage investment conduit" within the meaning
of section 860D of the Code.
REMIC Change of Law: Any proposed, temporary or final regulation,
revenue ruling, revenue procedure or other official announcement or
interpretation relating to REMICs and the REMIC Provisions issued after the
Closing Date.
REMIC Provisions: Provisions of the federal income tax law relating to
real estate mortgage investment conduits, which appear at sections 860A through
860G of Subchapter M of Chapter 1 of the Code, and related provisions, and
regulations promulgated thereunder, as the foregoing may be in effect from time
to time as well as provisions of applicable state laws.
REO Property: A Mortgaged Property acquired by the Trust Fund through
foreclosure or deed-in-lieu of foreclosure in connection with a defaulted
Mortgage Loan.
Request for Release: The Request for Release signed by a Servicing
Officer and submitted by the Master Servicer to the Trustee, substantially in
the form of Exhibits M and N, as appropriate.
Required Insurance Policy: With respect to any Mortgage Loan, any
insurance policy that is required to be maintained from time to time under this
Agreement.
Reserve Interest Rate: As defined in Section 4.05.
Residual Certificates: As specified in the Preliminary Statement.
Responsible Officer: When used with respect to the Trustee, any Vice
President, any Assistant Vice President, the Secretary, any Assistant Secretary,
any Trust Officer or any other officer of the Trustee customarily performing
functions similar to those performed by any of the above designated
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officers and also to whom, with respect to a particular matter, such matter is
referred because of such officer's knowledge of and familiarity with the
particular subject.
Scheduled Payment: The scheduled monthly payment on a Mortgage Loan due
on any Due Date for such Mortgage Loan allocable to principal and/or interest on
such Mortgage Loan.
Securities Act: The Securities Act of 1933, as amended.
Seller: Mellon Bank, N.A., a national banking association, and its
successors and assigns, in its capacity as seller of the Mortgage Loans to the
Depositor.
Senior Certificates: As specified in the Preliminary Statement.
Senior Enhancement Percentage: As to any Distribution Date, the
percentage obtained by dividing (x) the sum of (i) the Class Certificate Balance
of the Subordinated Certificates and (ii) the Overcollateralization Amount, in
each case after taking into account the distribution of the Principal
Distribution Amount on such Distribution Date by (y) the Pool Principal Balance
as of the last day of the related Due Period.
Senior Principal Distribution Amount: As to any Distribution Date, (a)
prior to the Stepdown Date or with respect to which a Trigger Event is in
effect, the lesser of (i) 100% of the Principal Distribution Amount and (ii) the
aggregate Class Certificate Balance of the Senior Certificates and (b) on or
after the Stepdown Date and as long as a Trigger Event is not in effect, the
positive difference, if any, of the excess of (x) the aggregate Class
Certificate Balance of the Senior Certificates immediately prior to such
Distribution Date over (y) the lesser of (A) the product of (i) 87.40% and (ii)
the Pool Principal Balance as of the last day of the related Due Period and (B)
the Pool Principal Balance as of the last day of the related Due Period minus
$625,940.
Senior Specified Enhancement Percentage: As to any date of
determination thereof, 12.6%.
Servicing Advances: All customary, reasonable and necessary "out of
pocket" costs and expenses incurred in the performance by the Master Servicer of
its servicing obligations, including, but not limited to, the cost of (i) the
preservation, restoration and protection of a Mortgaged Property, (ii) any
expenses reimbursable to the Master Servicer pursuant to Section 3.11 and any
enforcement or judicial proceedings, including foreclosures, (iii) the
management and liquidation of any REO Property, (iv) compliance with the
obligations under Section 3.09 and (v) in connection with the liquidation of a
Mortgage Loan, expenditures relating to the purchase or maintenance of the First
Lien pursuant to Section 3.12.
Servicing Officer: Any officer of the Master Servicer involved in, or
responsible for, the administration and servicing of the Mortgage Loans whose
name and facsimile signature appear on a list of servicing officers furnished to
the Trustee by the Master Servicer on the Closing Date pursuant to this
Agreement, as such list may from time to time be amended.
SMMEA: The Secondary Mortgage Market Enhancement Act of 1984, as
amended.
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S&P: Standard & Poor's Ratings Group, a division of XxXxxx-Xxxx
Companies, Inc. If S&P is designated as a Rating Agency in the Preliminary
Statement, for purposes of Section 10.05(b) the address for notices to S&P shall
be Standard & Poor's Ratings Group, 00 Xxxxxxxx, 00xx Xxxxx, Xxx Xxxx, Xxx Xxxx
00000, Attention: Mortgage Surveillance Monitoring, or such other address as S&P
may hereafter furnish to the Depositor and the Master Servicer.
Startup Day: The Closing Date.
Stated Principal Balance: As to any Mortgage Loan, the unpaid principal
balance of such Mortgage Loan as of its respective Due Date as specified in the
amortization schedule at the time relating thereto (before any adjustment to
such amortization schedule by reason of any moratorium or similar waiver or
grace period) after giving effect to any previous partial Principal Prepayments
and Liquidation Proceeds allocable to principal (other than with respect to any
Liquidated Mortgage Loan).
Stepdown Date: The earlier to occur of (i) the later to occur of (x)
the Distribution Date in November 2000 and (y) the first Distribution Date on
which the Senior Enhancement Percentage (after taking into account distributions
of principal on such Distribution Date) is greater than or equal to the Senior
Specified Enhancement Percentage and (ii) the Distribution Date on which the
aggregate Class Certificate Balance of the Senior Certificates has been reduced
to zero.
Subordinated Certificates: As specified in the Preliminary Statement.
Subservicer: Any person to whom the Master Servicer has contracted for
the servicing of all or a portion of the Mortgage Loans pursuant to Section 3.02
hereof.
Substitute Mortgage Loan: A Mortgage Loan substituted by the Seller for
a Deleted Mortgage Loan which must, on the date of such substitution, as
confirmed in a Request for Release, substantially in the form of Exhibit M, (i)
have a Stated Principal Balance, after deduction of the principal portion of the
Scheduled Payment due in the month of substitution, not in excess of, and not
more than 10% less than the Stated Principal Balance of the Deleted Mortgage
Loan; (ii) be accruing interest at a rate no lower than and not more than 1% per
annum higher than, that of the Deleted Mortgage Loan; (iii) have a Combined
Loan-to-Value Ratio no higher than that of the Deleted Mortgage Loan; (iv) have
a remaining term to maturity no greater than (and not more than one year less
than that of) the Deleted Mortgage Loan and (v) comply with each representation
and warranty set forth in Section 2.03 hereof.
Substitution Adjustment Amount: The meaning ascribed to such term
pursuant to Section 2.03.
Targeted Overcollateralization Amount: As to any Distribution Date, (x)
prior to the Stepdown Date, 1% of the original aggregate Class Certificate
Balance of the Offered Certificates and (y) on and after the Stepdown Date and
assuming a Trigger Event is not in effect, the greater of (i) 2% of the Pool
Principal Balance, as of the last day of the related Due Period and (ii)
$625,940. If a Trigger Event is in effect on and after the Stepdown Date, the
Targeted Overcollateralization Amount shall be equal to the Targeted
Overcollateralization Amount for the immediately preceding Distribution Date.
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Tax Matters Person: The person designated as "tax matters person" in
the manner provided under Treasury regulation Section 1.860F-4(d) and temporary
Treasury regulation Section 301.6231(a)(7)1T. Initially, the Tax Matters Person
shall be the Trustee.
Tax Matters Person Certificate: The Class R Certificate with a
Denomination of 0.01%.
Telerate Page 3750: The display designated as page 3750 on the Telerate
Service (or such other page as may replace page 3750 on that service for the
purpose of displaying London interbank offered rate rates of major banks).
Transfer: Any direct or indirect transfer or sale of any Ownership
Interest in a Residual Certificate.
Trigger Event: A Trigger Event shall have occurred and be continuing if
on any Distribution Date the three-month rolling average of Mortgage Loans which
are 60 or more days delinquent equals or exceeds one-half of the Senior
Enhancement Percentage.
Trustee: Bankers Trust Company of California, N.A. and its successors
and, if a successor trustee is appointed hereunder, such successor.
Trustee Fee: As to any Distribution Date, an amount agreed upon in
writing on or prior to the Closing Date by the Trustee and the Depositor.
Trust Fund: The corpus of the trust created hereunder consisting of (i)
the Mortgage Loans and all interest and principal received on or with respect
thereto after the Cut-off Date to the extent not applied in computing the
Cut-off Date Principal Balance thereof; (ii) the Certificate Account and the
Distribution Account and all amounts deposited therein pursuant to the
applicable provisions of this Agreement; (iii) property that secured a Mortgage
Loan and has been acquired by foreclosure, deed-in-lieu of foreclosure or
otherwise; and (iv) all proceeds of the conversion, voluntary or involuntary, of
any of the foregoing.
Voting Rights: The right to vote evidenced by a Certificate as follows:
the Residual Certificates, in the aggregate, shall evidence Voting Rights equal
to the percentage equivalent of a fraction, the numerator of which is the
Targeted Overcollateralization Amount and the denominator of which is the Pool
Principal Balance; the Offered Certificates, in the aggregate, shall evidence
Voting Rights equal to 100% minus the Voting Rights evidenced by the Residual
Certificates. The Voting Rights allocated to the Offered Certificates shall be
allocated among the Classes thereof in proportion to their respective Class
Certificate Balances. Voting Rights allocated to a Class of Certificates shall
be allocated among the Certificates of such Class in proportion to their
respective Percentage Interests.
SECTION 1.02. Calculations
All calculations of interest made pursuant to this Agreement shall be
made assuming a 360-day year consisting of twelve 30-day months; provided,
however, that calculations of the Current Interest for the Floating Rate
Certificates shall be made on the basis of a 360-day year for the actual number
of days elapsed in the applicable Interest Accrual Period.
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ARTICLE II
CONVEYANCE OF MORTGAGE LOANS;
REPRESENTATIONS AND WARRANTIES
SECTION 2.01. Conveyance of Mortgage Loans
(a) The Seller, concurrently with the execution and delivery hereof,
hereby sells, transfers, assigns, sets over and otherwise conveys to the
Depositor, without recourse, all the right, title and interest of the Seller in
and to the Mortgage Loans, including all interest and principal received or
receivable by the Seller on or with respect to the Mortgage Loans after the
Cut-off Date. On or prior to the Closing Date, the Seller shall deliver to the
Depositor or, at the Depositor's direction, to the Trustee or other designee of
the Depositor, the Mortgage File for each Mortgage Loan listed in the Mortgage
Loan Schedule. Such delivery of the Mortgage Files shall be made against payment
by the Depositor of the purchase price, previously agreed to by the Seller and
Depositor, for the Mortgage Loans. With respect to any Mortgage Loan that does
not have a first payment date on or before the last day of the Due Period
relating to the first Distribution Date, the Seller shall deposit into the
Distribution Account on or before the Distribution Account Deposit Date relating
to the first Distribution Date, an amount equal to one month's interest at the
related Net Mortgage Rate on the Cut-off Date Principal Balance of such Mortgage
Loan.
(b) The Depositor, concurrently with the execution and delivery hereof,
hereby sells, transfers, assigns, sets over and otherwise conveys to the Trustee
for the benefit of the Certificateholders, without recourse, all the right,
title and interest of the Depositor in and to the Trust Fund together with the
Depositor's right to require the Seller to cure any breach of a representation
or warranty made herein by the Seller or to repurchase or substitute for any
affected Mortgage Loan in accordance herewith.
(c) In connection with the transfer and assignment set forth in clause
(b) above, the Depositor has delivered or caused to be delivered to the Trustee
for the benefit of the Certificateholders the following documents or instruments
with respect to each Mortgage Loan so assigned:
(i) the original Mortgage Note endorsed by manual or facsimile
signature in blank in the following form: "Pay to the order of
____________ without recourse," with all intervening endorsements
showing a complete chain of endorsement from the originator to the
Person endorsing it to the Trustee (each such endorsement being
sufficient to transfer all right, title and interest of the party so
endorsing, as noteholder or assignee thereof, in and to that Mortgage
Note).
(ii) except as provided below, within 45 days after the
Closing Date, the original recorded Mortgage or a copy of such Mortgage
certified by the Seller as being a true and complete copy of the
Mortgage;
(iii) within 45 days after the Closing Date, a duly executed
assignment of the Mortgage (which may be included in a blanket
assignment or assignments), together with, except as provided below,
all interim recorded assignments of such mortgage (each such
assignment, when duly and validly completed, to be in recordable form
and sufficient to effect the assignment of and transfer to the assignee
thereof, under the
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Mortgage to which the assignment relates); provided that, if the
related Mortgage has not been returned from the applicable public
recording office, such assignment of the Mortgage may exclude the
information to be provided by the recording office; and
(iv) the original or copies of each assumption, modification,
written assurance or substitution agreement, if any;
In the event that in connection with any Mortgage Loan the Depositor
cannot deliver (a) the original recorded Mortgage or (b) all interim recorded
assignments satisfying the requirements of clause (ii) or (iii) above,
respectively, because such document or documents have not been returned from the
applicable public recording office, the Depositor shall promptly deliver to the
Trustee such original Mortgage or such interim assignment, as the case may be,
with evidence of recording indicated thereon upon receipt thereof from the
public recording office, or a copy thereof, certified, if appropriate, by the
relevant recording office, but in no event shall any such delivery of the
original Mortgage and each such interim assignment or a copy thereof, certified,
if appropriate, by the relevant recording office, be made later than one year
following the Closing Date; provided, however, in the event the Depositor is
unable to deliver by such date each Mortgage and each such interim assignment by
reason of the fact that any such documents have not been returned by the
appropriate recording office, or, in the case of each such interim assignment,
because the related Mortgage has not been returned by the appropriate recording
office, the Depositor shall deliver such documents to the Trustee as promptly as
possible upon receipt thereof and, in any event, within 720 days following the
Closing Date. The Depositor shall forward or cause to be forwarded to the
Trustee (a) from time to time additional original documents evidencing an
assumption or modification of a Mortgage Loan and (b) any other documents
required to be delivered by the Depositor or the Master Servicer to the Trustee.
In the event that the original Mortgage is not delivered and in connection with
the payment in full of the related Mortgage Loan and the public recording office
requires the presentation of a "lost instruments affidavit and indemnity" or any
equivalent document, because only a copy of the Mortgage can be delivered with
the instrument of satisfaction or reconveyance, the Master Servicer shall
execute and deliver or cause to be executed and delivered such a document to the
public recording office. In the case where a public recording office retains the
original recorded Mortgage or in the case where a Mortgage is lost after
recordation in a public recording office, the Seller shall deliver to the
Trustee a copy of such Mortgage certified by such public recording office to be
a true and complete copy of the original recorded Mortgage.
Except as provided below, as promptly as practicable subsequent to
delivery of each assignment, and in any event, within thirty (30) days
thereafter, the Master Servicer shall (i) affix the Trustee's name to each
assignment of Mortgage, as the assignee thereof, (ii) cause such assignment to
be in proper form for recording in the appropriate public office for real
property records and (iii) cause to be delivered for recording in the
appropriate public office for real property records the assignments of the
Mortgages to the Trustee, except that, with respect to any assignments of
Mortgage as to which the Master Servicer has not received the information
required to prepare such assignment in recordable form, the Master Servicer's
obligation to do so and to deliver the same for such recording shall be as soon
as practicable after receipt of such information and in any event within thirty
(30) days after receipt thereof. Notwithstanding the foregoing, the Master
Servicer need not cause to be recorded any assignment which relates to a
Mortgage Loan and the Mortgaged Property relating to which are located in any
jurisdiction under the laws of which, as evidenced by an Opinion of Counsel
delivered by the Seller (at the Seller's expense) to the Trustee, the
recordation of such assignment is not necessary to protect the Trustee's and the
Certificateholders' interest in the related Mortgage Loan.
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In the case of Mortgage Loans that have been prepaid in full as of the
Closing Date, the Depositor, in lieu of delivering the above documents to the
Trustee, will deposit in the Certificate Account the portion of such payment
that is required to be deposited in the Certificate Account pursuant to Section
3.05 hereof.
SECTION 2.02. Acceptance by Trustee of the Mortgage Loans
The Trustee acknowledges receipt of the documents identified in the
Initial Certification in the form annexed hereto as Exhibit G and declares that
it holds and will hold such documents and the other documents delivered to it
constituting the Mortgage Files, and that it holds or will hold such other
assets as are included in the Trust Fund, in trust for the exclusive use and
benefit of all present and future Certificateholders. The Trustee acknowledges
that it will maintain possession of the Mortgage Notes in the State of
California, unless otherwise permitted by the Rating Agencies.
The Trustee agrees to execute and deliver on the Closing Date to the
Depositor, the Master Servicer and the Seller an Initial Certification in the
form annexed hereto as Exhibit G. As to each Mortgage Loan based on its review
and examination, and only as to the documents identified in such Initial
Certification, the Trustee acknowledges that such documents appear regular on
their face and relate to such Mortgage Loan. The Trustee shall be under no duty
or obligation to inspect, review or examine said documents, instruments,
certificates or other papers to determine that the same are genuine, enforceable
or appropriate for the represented purpose or that they have actually been
recorded in the real estate records or that they are other than what they
purport to be on their face.
Not later than 90 days after the Closing Date, the Trustee shall
deliver to the Depositor, the Master Servicer and the Seller a Final
Certification in the form annexed hereto as Exhibit H, with any applicable
exceptions noted thereon.
If, in the course of such review, the Trustee finds any document
constituting a part of a Mortgage File which does not meet the requirements of
Section 2.01, the Trustee shall list such as an exception in the Final
Certification; provided, however that the Trustee shall not make any
determination as to whether (i) any endorsement is sufficient to transfer all
right, title and interest of the party so endorsing, as noteholder or assignee
thereof, in and to that Mortgage Note or (ii) any assignment is in recordable
form or is sufficient to effect the assignment of and transfer to the assignee
thereof under the mortgage to which the assignment relates. The Seller shall
promptly correct or cure such defect within 90 days from the date it was so
notified of such defect and, if the Seller does not correct or cure such defect
within such period, the Seller shall either (a) substitute for the related
Mortgage Loan a Substitute Mortgage Loan, which substitution shall be
accomplished in the manner and subject to the conditions set forth in Section
2.03, or (b) purchase such Mortgage Loan from the Trustee within 90 days from
the date the Seller was notified of such defect in writing at the Purchase Price
of such Mortgage Loan; provided, however, that in no event shall such
substitution or purchase occur more than 540 days from the Closing Date, except
that if the substitution or purchase of a Mortgage Loan pursuant to this
provision is required by reason of a delay in delivery of any documents by the
appropriate recording office, and there is a dispute between either the Master
Servicer or the Seller and the Trustee over the location or status of the
recorded document, then such substitution or purchase shall occur within 720
days from the Closing Date. The Trustee shall deliver written notice to each
Rating Agency within 270 days from the Closing Date indicating each Mortgage
Loan (a) which has not been returned by the appropriate recording office or (b)
as to which there is a dispute as to location or status of such Mortgage Loan.
Such notice shall be
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delivered every 90 days thereafter until the related Mortgage Loan is returned
to the Trustee. Any such substitution pursuant to (a) above or purchase pursuant
to (b) above shall not be effected prior to the delivery to the Trustee of the
Opinion of Counsel required by Section 2.05 hereof, if any, and any substitution
pursuant to (a) above shall not be effected prior to the additional delivery to
the Trustee of a Request for Release substantially in the form of Exhibit N. No
substitution is permitted to be made in any calendar month after the
Determination Date for such month. The Purchase Price for any such Mortgage Loan
shall be deposited by the Seller in the Certificate Account on or prior to the
Distribution Account Deposit Date for the Distribution Date in the month
following the month of repurchase and, upon receipt of such deposit and
certification with respect thereto in the form of Exhibit N hereto, the Trustee
shall release the related Mortgage File to the Seller and shall execute and
deliver at the Seller's request such instruments of transfer or assignment
prepared by the Seller, in each case without recourse, as shall be necessary to
vest in the Seller, or a designee, the Trustee's interest in any Mortgage Loan
released pursuant hereto.
The Trustee shall retain possession and custody of each Mortgage File
in accordance with and subject to the terms and conditions set forth herein. The
Master Servicer shall promptly deliver to the Trustee, upon the execution or
receipt thereof, the originals of such other documents or instruments
constituting the Mortgage File as come into the possession of the Master
Servicer from time to time.
It is understood and agreed that the obligation of the Seller to
substitute for or to purchase any Mortgage Loan which does not meet the
requirements of Section 2.01 above shall constitute the sole remedy respecting
such defect available to the Trustee, the Depositor and any Certificateholder
against the Seller.
SECTION 2.03. Representations, Warranties and Covenants of the Seller
and Master Servicer
(a) Mellon Bank, N.A., in its capacities as Seller and Master Servicer,
hereby makes the representations and warranties set forth in Schedule II hereto,
and by this reference incorporated herein, to the Depositor and the Trustee, as
of the Closing Date, or if so specified therein, as of the Cut-off Date.
(b) The Seller, in its capacity as Seller, hereby makes the
representations and warranties set forth in Schedule III hereto, and by this
reference incorporated herein, to the Depositor and the Trustee, as of the
Closing Date, or if so specified therein, as of the Cut-off Date.
(c) Upon discovery by any of the parties hereto of a breach of a
representation or warranty made pursuant to Section 2.03(b) that materially and
adversely affects the interests of the Certificateholders in any Mortgage Loan,
the party discovering such breach shall give prompt notice thereof to the other
parties. The Seller hereby covenants that within 90 days of the earlier of its
discovery or its receipt of written notice from any party of a breach of any
representation or warranty made pursuant to Section 2.03(b) which materially and
adversely affects the interests of the Certificateholders in any Mortgage Loan,
it shall cure such breach in all material respects, and if such breach is not so
cured, shall, (i) if such 90-day period expires prior to the second anniversary
of the Closing Date, remove such Mortgage Loan (a "Deleted Mortgage Loan") from
the Trust Fund and substitute in its place a Substitute Mortgage Loan, in the
manner and subject to the conditions set forth in
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this Section; or (ii) repurchase the affected Mortgage Loan or Mortgage Loans
from the Trustee at the Purchase Price in the manner set forth below; provided,
however, that any such substitution pursuant to (i) above shall not be effected
prior to the delivery to the Trustee of the Opinion of Counsel required by
Section 2.05 hereof, if any, and any such substitution pursuant to (i) above
shall not be effected prior to the additional delivery to the Trustee of a
Request for Release substantially in the form of Exhibit N and the Mortgage File
for any such Substitute Mortgage Loan. The Seller shall promptly reimburse the
Master Servicer and the Trustee for any expenses reasonably incurred by the
Master Servicer or the Trustee in respect of enforcing the remedies for such
breach. With respect to the representations and warranties described in this
Section which are made to the best of the Seller's knowledge, if it is
discovered by either the Depositor, the Seller or the Trustee that the substance
of such representation and warranty is inaccurate and such inaccuracy materially
and adversely affects the value of the related Mortgage Loan or the interests of
the Certificateholders therein, notwithstanding the Seller's lack of knowledge
with respect to the substance of such representation or warranty, such
inaccuracy shall be deemed a breach of the applicable representation or
warranty.
With respect to any Substitute Mortgage Loan or Loans, the Seller shall
deliver to the Trustee for the benefit of the Certificateholders the Mortgage
Note, the Mortgage, the related assignment of the Mortgage, and such other
documents and agreements as are required by Section 2.01, with the Mortgage Note
endorsed and the Mortgage assigned as required by Section 2.01. No substitution
is permitted to be made in any calendar month after the Determination Date for
such month. Scheduled Payments due with respect to Substitute Mortgage Loans in
the month of substitution shall not be part of the Trust Fund and will be
retained by the Seller on the next succeeding Distribution Date. For the month
of substitution, distributions to Certificateholders will include the monthly
payment due on any Deleted Mortgage Loan for such month and thereafter the
Seller shall be entitled to retain all amounts received in respect of such
Deleted Mortgage Loan. The Master Servicer shall amend the Mortgage Loan
Schedule for the benefit of the Certificateholders to reflect the removal of
such Deleted Mortgage Loan and the substitution of the Substitute Mortgage Loan
or Loans and the Master Servicer shall deliver the amended Mortgage Loan
Schedule to the Trustee. Upon such substitution, the Substitute Mortgage Loan or
Loans shall be subject to the terms of this Agreement in all respects, and the
Seller shall be deemed to have made with respect to such Substitute Mortgage
Loan or Loans, as of the date of substitution, the representations and
warranties made pursuant to Section 2.03(b) with respect to such Mortgage Loan.
Upon any such substitution and the deposit to the Certificate Account of the
amount required to be deposited therein in connection with such substitution as
described in the following paragraph, the Trustee shall release the Mortgage
File held for the benefit of the Certificateholders relating to such Deleted
Mortgage Loan to the Seller and shall execute and deliver at the Seller's
direction such instruments of transfer or assignment prepared by the Seller, in
each case without recourse, as shall be necessary to vest title in the Seller,
or its designee, the Trustee's interest in any Deleted Mortgage Loan substituted
for pursuant to this Section 2.03.
For any month in which the Seller substitutes one or more Substitute
Mortgage Loans for one or more Deleted Mortgage Loans, the Master Servicer will
determine the amount (if any) by which the aggregate principal balance of all
such Substitute Mortgage Loans as of the date of substitution is less than the
aggregate Stated Principal Balance of all such Deleted Mortgage Loans (after
application of the scheduled principal portion of the monthly payments due in
the month of substitution). The amount of such shortage (the "Substitution
Adjustment Amount") plus an amount equal to the aggregate of any unreimbursed
Advances with respect to such Deleted Mortgage Loans shall be deposited in the
Certificate Account by the Seller on or before the Distribution Account Deposit
Date for the Distribution
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Date in the month succeeding the calendar month during which the related
Mortgage Loan became required to be purchased or replaced hereunder.
In the event that the Seller shall have repurchased a Mortgage Loan,
the Purchase Price therefor shall be deposited in the Certificate Account
pursuant to Section 3.05 on or before the Distribution Account Deposit Date for
the Distribution Date in the month following the month during which the Seller
became obligated hereunder to repurchase or replace such Mortgage Loan and upon
such deposit of the Purchase Price, the delivery of the Opinion of Counsel
required by Section 2.05 and receipt of a Request for Release in the form of
Exhibit N hereto, the Trustee shall release the related Mortgage File held for
the benefit of the Certificateholders to such Person, and the Trustee shall
execute and deliver at such Person's direction such instruments of transfer or
assignment prepared by such Person, in each case without recourse, as shall be
necessary to transfer title from the Trustee. It is understood and agreed that
the obligation under this Agreement of any Person to cure, repurchase or replace
any Mortgage Loan as to which a breach has occurred and is continuing shall
constitute the sole remedy against such Persons respecting such breach available
to Certificateholders, the Depositor or the Trustee on their behalf.
The representations and warranties made pursuant to this Section 2.03
shall survive delivery of the respective Mortgage Files to the Trustee for the
benefit of the Certificateholders.
SECTION 2.04. Representations and Warranties of the Depositor as to the
Mortgage Loans
The Depositor hereby represents and warrants to the Trustee with
respect to each Mortgage Loan as of the date hereof or such other date set forth
herein that as of the Closing Date, and following the transfer of the Mortgage
Loans to it by the Seller, the Depositor had good title to the Mortgage Loans
and the Mortgage Notes were subject to no offsets, defenses or counterclaims
arising from the action or inaction of the Depositor.
The Depositor hereby assigns, transfers and conveys to the Trustee all
of its rights with respect to the Mortgage Loans including, without limitation,
the representations and warranties of the Seller made pursuant to Section
2.03(b) hereof, together with all rights of the Depositor to require the Seller
to cure any breach thereof or to repurchase or substitute for any affected
Mortgage Loan in accordance with this Agreement.
It is understood and agreed that the representations and warranties set
forth in this Section 2.04 shall survive delivery of the Mortgage Files to the
Trustee. Upon discovery by the Depositor or the Trustee of a breach of any of
the foregoing representations and warranties set forth in this Section 2.04
(referred to herein as a "breach"), which breach materially and adversely
affects the interest of the Certificateholders, the party discovering such
breach shall give prompt written notice to the others and to each Rating Agency.
SECTION 2.05. Delivery of Opinion of Counsel in Connection with
Substitutions
(a) Notwithstanding any contrary provision of this Agreement, no
substitution pursuant to Section 2.02 or Section 2.03 shall be made more than 90
days after the Closing Date unless the Seller delivers to the Trustee an Opinion
of Counsel, which Opinion of Counsel shall not be at the
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expense of either the Trustee or the Trust Fund, addressed to the Trustee, to
the effect that such substitution will not (i) result in the imposition of the
tax on "prohibited transactions" on the Trust Fund or contributions after the
Startup Date, as defined in Sections 860F(a)(2) and 860G(d) of the Code,
respectively, or (ii) cause the Trust Fund to fail to qualify as a REMIC at any
time that any Certificates are outstanding.
(b) Upon discovery by the Depositor, the Seller, the Master Servicer,
or the Trustee that any Mortgage Loan does not constitute a "qualified mortgage"
within the meaning of Section 860G(a)(3) of the Code, the party discovering such
fact shall promptly (and in any event within five (5) Business Days of
discovery) give written notice thereof to the other parties. In connection
therewith, the Trustee shall require the Seller, at the Seller's option, to
either (i) substitute, if the conditions in Section 2.03(c) with respect to
substitutions are satisfied, a Substitute Mortgage Loan for the affected
Mortgage Loan, or (ii) repurchase the affected Mortgage Loan within 90 days of
such discovery in the same manner as it would a Mortgage Loan for a breach of
representation or warranty made pursuant to Section 2.03. The Trustee shall
reconvey to the Seller the Mortgage Loan to be released pursuant hereto in the
same manner, and on the same terms and conditions, as it would a Mortgage Loan
repurchased for breach of a representation or warranty contained in Section
2.03.
SECTION 2.06. Execution and Delivery of Certificates
The Trustee acknowledges the transfer and assignment to it of the Trust
Fund and, concurrently with such transfer and assignment, has executed and
delivered to or upon the order of the Depositor, the Certificates in authorized
denominations evidencing directly or indirectly the entire ownership of the
Trust Fund. The Trustee agrees to hold the Trust Fund and exercise the rights
referred to above for the benefit of all present and future Holders of the
Certificates and to perform the duties set forth in this Agreement to the best
of its ability, to the end that the interests of the Holders of the Certificates
may be adequately and effectively protected.
SECTION 2.07. REMIC Matters
The Preliminary Statement sets forth the designations and "latest
possible maturity date" for federal income tax purposes of all interests created
hereby. The "Startup Day" for purposes of the REMIC Provisions shall be the
Closing Date. The "tax matters person" with respect to the Trust Fund hereunder
shall be the Trustee and the Trustee shall hold the Tax Matters Person
Certificate. The Trust Fund's fiscal year shall be the calendar year.
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ARTICLE III
ADMINISTRATION AND SERVICING
OF MORTGAGE LOANS
SECTION 3.01. Master Servicer to Service Mortgage Loans.
For and on behalf of the Certificateholders, the Master Servicer shall
service and administer the Mortgage Loans in accordance with the terms of this
Agreement and customary and usual standards of practice of prudent mortgage loan
servicers. In connection with such servicing and administration, the Master
Servicer shall have full power and authority, acting alone and/or through
Subservicers as provided in Section 3.02 hereof, to do or cause to be done any
and all things that it may deem necessary or desirable in connection with such
servicing and administration, including but not limited to, the power and
authority, subject to the terms hereof (i) to execute and deliver, on behalf of
the Certificateholders and the Trustee, customary consents or waivers and other
instruments and documents, (ii) to consent to transfers of any Mortgaged
Property and assumptions of the Mortgage Notes and related Mortgages (but only
in the manner provided in this Agreement), (iii) to collect any Insurance
Proceeds and other Liquidation Proceeds, and (iv) to effectuate foreclosure or
other conversion of the ownership of the Mortgaged Property securing any
Mortgage Loan; provided that the Master Servicer shall not take any action that
is inconsistent with or prejudices the interests of the Trust Fund or the
Certificateholders in any Mortgage Loan or the rights and interests of the
Depositor, the Trustee and the Certificateholders under this Agreement. The
Master Servicer shall represent and protect the interests of the Trust Fund in
the same manner as it protects its own interests in mortgage loans in its own
portfolio in any claim, proceeding or litigation regarding a Mortgage Loan, and
shall not make or permit any modification, waiver or amendment of any Mortgage
Loan which would cause the Trust Fund to fail to qualify as a REMIC or result in
the imposition of any tax under Section 860F(a) or Section 860G(d) of the Code.
Without limiting the generality of the foregoing, the Master Servicer, in its
own name or in the name of the Depositor and the Trustee, is hereby authorized
and empowered by the Depositor and the Trustee, when the Master Servicer
believes it appropriate in its reasonable judgment, to execute and deliver, on
behalf of the Trustee, the Depositor, the Certificateholders or any of them, any
and all instruments of satisfaction or cancellation, or of partial or full
release or discharge and all other comparable instruments, with respect to the
Mortgage Loans, and with respect to the Mortgaged Properties held for the
benefit of the Certificateholders. The Master Servicer shall prepare and deliver
to the Depositor and/or the Trustee such documents requiring execution and
delivery by either or both of them as are necessary or appropriate to enable the
Master Servicer to service and administer the Mortgage Loans to the extent that
the Master Servicer is not permitted to execute and deliver such documents
pursuant to the preceding sentence. Upon receipt of such documents, the
Depositor and/or the Trustee shall execute such documents and deliver them to
the Master Servicer.
In accordance with the standards of the preceding paragraph, the Master
Servicer shall advance or cause to be advanced funds as necessary for the
purpose of effecting the payment of taxes and assessments on the Mortgaged
Properties, which advances shall be reimbursable in the first instance from
related collections from the Mortgagors pursuant to Section 3.06, and further as
provided in Section 3.08. The costs incurred by the Master Servicer, if any, in
effecting the timely payments of taxes and assessments on the Mortgaged
Properties shall not, for the purpose of calculating monthly distributions to
the Certificateholders, be added to the Stated Principal Balances of the related
Mortgage Loans, notwithstanding that the terms of such Mortgage Loans so permit.
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SECTION 3.02. Subservicing; Enforcement of the Obligations of Servicers
(a) The Master Servicer may arrange for the subservicing of any
Mortgage Loan by a Subservicer pursuant to a subservicing agreement; provided,
however, that such subservicing arrangement and the terms of the related
subservicing agreement must provide for the servicing of such Mortgage Loans in
a manner consistent with the servicing arrangements contemplated hereunder.
Unless the context otherwise requires, references in this Agreement to actions
taken or to be taken by the Master Servicer in servicing the Mortgage Loans
include actions taken or to be taken by a Subservicer on behalf of the Master
Servicer. Notwithstanding the provisions of any subservicing agreement, any of
the provisions of this Agreement relating to agreements or arrangements between
the Master Servicer and a Subservicer or reference to actions taken through a
Subservicer or otherwise, the Master Servicer shall remain obligated and liable
to the Depositor, the Trustee and the Certificateholders for the servicing and
administration of the Mortgage Loans in accordance with the provisions of this
Agreement without diminution of such obligation or liability by virtue of such
subservicing agreements or arrangements or by virtue of indemnification from the
Subservicer and to the same extent and under the same terms and conditions as if
the Master Servicer alone were servicing and administering the Mortgage Loans.
All actions of each Subservicer performed pursuant to the related subservicing
agreement shall be performed as an agent of the Master Servicer with the same
force and effect as if performed directly by the Master Servicer.
(b) For purposes of this Agreement, the Master Servicer shall be deemed
to have received any collections, recoveries or payments with respect to the
Mortgage Loans that are received by a Subservicer regardless of whether such
payments are remitted by the Subservicer to the Master Servicer.
SECTION 3.03. Rights of the Depositor and the Trustee in Respect of the
Master Servicer
The Depositor may, but is not obligated to, enforce the obligations of
the Master Servicer hereunder and may, but is not obligated to, perform, or
cause a designee to perform, any defaulted obligation of the Master Servicer
hereunder and in connection with any such defaulted obligation to exercise the
related rights of the Master Servicer hereunder; provided that the Master
Servicer shall not be relieved of any of its obligations hereunder by virtue of
such performance by the Depositor or its designee. Neither the Trustee nor the
Depositor shall have any responsibility or liability for any action or failure
to act by the Master Servicer nor shall the Trustee or the Depositor be
obligated to supervise the performance of the Master Servicer hereunder or
otherwise.
SECTION 3.04. Trustee to Act as Master Servicer
In the event that the Master Servicer shall for any reason no longer be
the Master Servicer hereunder (including by reason of an Event of Default), the
Trustee or its successor shall thereupon assume all of the rights and
obligations of the Master Servicer hereunder arising thereafter (except that the
Trustee shall not be (i) liable for losses of the Master Servicer pursuant to
Section 3.09 hereof or any acts or omissions of the predecessor Master Servicer
hereunder, (ii) obligated to make Advances if it is prohibited from doing so by
applicable law, (iii) obligated to effectuate repurchases or substitutions of
Mortgage Loans hereunder including, but not limited to, repurchases or
substitutions of Mortgage Loans pursuant to Section 2.02 or 2.03 hereof, (iv)
responsible for expenses of the Master
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Servicer pursuant to Section 2.03 or (v) deemed to have made any representations
and warranties of the Master Servicer hereunder). Any such assumption shall be
subject to Section 7.02 hereof. Each subservicing agreement shall provide that
if the Master Servicer shall for any reason no longer be the Master Servicer
(including by reason of any Event of Default), the Trustee or its successor may,
at its option, succeed to any rights and obligations of the Master Servicer
under each subservicing agreement.
The Master Servicer shall, upon request of the Trustee, but at the
expense of the Master Servicer, deliver to the assuming party all documents and
records relating to each subservicing agreement or substitute subservicing
agreement and the Mortgage Loans then being serviced thereunder and an
accounting of amounts collected or held by it and otherwise use its best efforts
to effect the orderly and efficient transfer of the substitute subservicing
agreement to the assuming party.
SECTION 3.05. Collection of Mortgage Loan Payments; Certificate
Account; Distribution Account
(a) The Master Servicer shall make reasonable efforts in accordance
with the customary and usual standards of practice of prudent mortgage servicers
to collect all payments called for under the terms and provisions of the
Mortgage Loans to the extent such procedures shall be consistent with this
Agreement and the terms and provisions of any related Required Insurance Policy.
Consistent with the foregoing, the Master Servicer may in its discretion (i)
waive any late payment charge or any prepayment charge or penalty interest in
connection with the prepayment of a Mortgage Loan and (ii) extend the due dates
for payments due on a Mortgage Note for a period not greater than 180 days;
provided, however, that the Master Servicer cannot extend the maturity of any
such Mortgage Loan past the date on which the final payment is due on the latest
maturing Mortgage Loan as of the Cut-off Date. In the event of any such
arrangement, the Master Servicer shall make Advances on the related Mortgage
Loan in accordance with the provisions of Section 4.01 during the scheduled
period in accordance with the amortization schedule of such Mortgage Loan
without modification thereof by reason of such arrangements. The Master Servicer
shall not be required to institute or join in litigation with respect to
collection of any payment (whether under a Mortgage, Mortgage Note or otherwise
or against any public or governmental authority with respect to a taking or
condemnation) if it reasonably believes that enforcing the provision of the
Mortgage or other instrument pursuant to which such payment is required is
prohibited by applicable law.
(b) Except as otherwise provided in Section 3.05(f), the Master
Servicer shall establish and maintain a Certificate Account into which the
Master Servicer shall deposit or cause to be deposited on a daily basis within
two Business Days of receipt, except as otherwise specifically provided herein,
the following payments and collections remitted by Subservicers or received by
it in respect of Mortgage Loans subsequent to the Cut-off Date (other than in
respect of principal and interest due on the Mortgage Loans on or before the
Cut-off Date) and the following amounts required to be deposited hereunder:
(i) all payments on account of principal on the Mortgage Loans,
including Principal Prepayments;
(ii) all payments on account of interest on the Mortgage Loans, net
of the related Master Servicing Fee;
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(iii) all Insurance Proceeds and Liquidation Proceeds, other than
proceeds to be applied to the restoration or repair of the
Mortgaged Property or released to the Mortgagor in accordance
with the Master Servicer's normal servicing procedures;
(iv) any amount required to be deposited by the Master Servicer
pursuant to Section 3.05(d) in connection with any losses on
Permitted Investments;
(v) any amounts required to be deposited by the Master Servicer
pursuant to Section 3.09(a), 3.09(b), and in respect of net
monthly rental income from REO Property pursuant to Section
3.11 hereof;
(vi) all Substitution Adjustment Amounts;
(vii) all Advances made by the Master Servicer pursuant to Section
4.01; and
(viii) any other amounts required to be deposited hereunder.
The foregoing requirements for remittance by the Master Servicer shall
be exclusive. In the event that the Master Servicer shall remit any amount not
required to be remitted, it may at any time withdraw or direct the institution
maintaining the Certificate Account to withdraw such amount from the Certificate
Account, any provision herein to the contrary notwithstanding. Such withdrawal
or direction may be accomplished by delivering written notice thereof to the
Trustee or such other institution maintaining the Certificate Account which
describes the amounts deposited in error in the Certificate Account. The Master
Servicer shall maintain adequate records with respect to all withdrawals made
pursuant to this Section. All funds deposited in the Certificate Account shall
be held in trust for the Certificateholders until withdrawn in accordance with
Section 3.08.
(c) The Trustee shall establish and maintain, on behalf of the
Certificateholders, the Distribution Account. The Trustee shall, promptly upon
receipt, deposit in the Distribution Account and retain therein the following:
(i) the aggregate amount remitted by the Master Servicer to the
Trustee pursuant to Section 3.08(a)(ix);
(ii) any amount deposited by the Master Servicer pursuant to
Section 3.05(d) in connection with any losses on Permitted
Investments; and
(iii) any other amounts deposited hereunder which are required to be
deposited in the Distribution Account.
In the event that the Master Servicer shall remit any amount not
required to be remitted, it may at any time direct the Trustee to withdraw such
amount from the Distribution Account, any provision herein to the contrary
notwithstanding. Such direction may be accomplished by delivering an Officer's
Certificate to the Trustee which describes the amounts deposited in error in the
Distribution Account. All funds deposited in the Distribution Account shall be
held by the Trustee in trust for the Certificateholders until disbursed in
accordance with this Agreement or withdrawn in accordance with Section 3.08. In
no event shall the Trustee incur liability for withdrawals from the Distribution
Account at the direction of the Master Servicer.
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(d) Each institution at which the Certificate Account or the
Distribution Account is maintained shall invest the funds therein as directed in
writing by the Master Servicer in Permitted Investments, which shall mature not
later than (i) in the case of the Certificate Account, the second Business Day
next preceding the related Distribution Account Deposit Date (except that if
such Permitted Investment is an obligation of the institution that maintains
such account, then such Permitted Investment shall mature not later than the
Business Day next preceding such Distribution Account Deposit Date) and (ii) in
the case of the Distribution Account, the Business Day next preceding the
Distribution Date (except that if such Permitted Investment is an obligation of
the institution that maintains such fund or account, then such Permitted
Investment shall mature not later than such Distribution Date) and, in each
case, shall not be sold or disposed of prior to its maturity. All such Permitted
Investments shall be made in the name of the Trustee, for the benefit of the
Certificateholders. All income and gain net of any losses realized from any such
investment of funds on deposit in the Certificate Account or the Distribution
Account shall be for the benefit of the Master Servicer as servicing
compensation and shall be remitted to it monthly as provided herein. The amount
of any realized losses in the Certificate Account or the Distribution Account
incurred in any such account in respect of any such investments shall promptly
be deposited by the Master Servicer in the Certificate Account or paid to the
Trustee for deposit into the Distribution Account, as applicable.
(e) The Master Servicer shall give notice to the Trustee, the Seller,
each Rating Agency and the Depositor of any proposed change of the location of
the Certificate Account prior to any change thereof. The Trustee shall give
notice to the Master Servicer, the Seller, each Rating Agency and the Depositor
of any proposed change of the location of the Distribution Account prior to any
change thereof.
(f) Notwithstanding subsection (b) above and any other provision herein
relating to deposits to or withdrawals from the Certificate Account, so long as
(i) Mellon Bank, N.A. is the Master Servicer, (ii) the long-term unsecured debt
obligations of Mellon Bank, N.A. are rated at least A3 by Xxxxx'x and A by S&P
and (iii) the short-term unsecured debt obligations of Mellon Bank, N.A. are
rated at least A1 by S&P, the Master Servicer shall not be required to maintain
a Certificate Account or make deposits to the Certificate Account but instead
may, at its option, retain possession of all amounts received in respect of the
Mortgage Loans and commingle such amounts with its own funds until the next
Distribution Account Deposit Date. On each Distribution Account Deposit Date,
the Master Servicer shall transfer to the Trustee for deposit in the
Distribution Account an amount equal to the Available Funds for the related
Distribution Date, such transfer being net of amounts which the Master Servicer
is entitled to retain or withdraw from the Certificate Account. Notwithstanding
such commingling, the Master Servicer shall maintain records of, and account
for, all amounts received in respect of the Mortgage Loans to the same extent as
though deposits and withdrawals were being made to and from the Certificate
Account as provided herein. Upon obtaining knowledge of the failure to satisfy
any of the conditions specified in clauses (i) to (iii) of this subsection, the
party obtaining such knowledge shall promptly give written notice thereof to the
other parties hereto, and the Master Servicer shall give such notice to the
Rating Agencies. As of the first day of the first Due Period that begins at
least 30 days after the receipt or giving of such notice by the Master Servicer,
the Master Servicer shall have established the Certificate Account and
thereafter shall make deposits to and withdrawals from the Certificate Account
as herein provided.
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SECTION 3.06. Collection of Taxes, Assessments and Similar Items;
Escrow Accounts
(a) To the extent required by the related Mortgage Note and not
violative of current law, the Master Servicer shall establish and maintain one
or more accounts (each, an "Escrow Account") and deposit and retain therein all
collections from the Mortgagors (or advances by the Master Servicer) for the
payment of taxes, assessments or comparable items for the account of the
Mortgagors. Nothing herein shall require the Master Servicer to compel a
Mortgagor to establish an Escrow Account in violation of applicable law or if
such Escrow Account is not required by the related Mortgage Note.
(b) Withdrawals of amounts so collected from the Escrow Accounts may be
made only to effect timely payment of taxes, assessments, condominium or PUD
association dues, or comparable items, to reimburse the Master Servicer out of
related collections for any payments made pursuant to Sections 3.01 hereof (with
respect to taxes and assessments), to refund to any Mortgagors any sums
determined to be overages, to pay interest, if required by law or the terms of
the related Mortgage or Mortgage Note, to Mortgagors on balances in the Escrow
Account or to clear and terminate the Escrow Account at the termination of this
Agreement in accordance with Section 9.01 or Section 9.02 hereof. The Escrow
Accounts shall not be a part of the Trust Fund.
(c) The Master Servicer shall advance any payments referred to in
Section 3.06(a) that are not timely paid by the Mortgagors on the date when the
tax, premium or other cost for which such payment is intended is due, but the
Master Servicer shall be required so to advance only to the extent that such
advances, in the good faith judgment of the Master Servicer, will be recoverable
by the Master Servicer out of Insurance Proceeds, Liquidation Proceeds or
otherwise.
SECTION 3.07. Access to Certain Documentation and Information Regarding
the Mortgage Loans
The Master Servicer shall afford the Depositor and the Trustee
reasonable access to all records and documentation regarding the Mortgage Loans
and all accounts, insurance information and other matters relating to this
Agreement, such access being afforded without charge, but only upon reasonable
request and during normal business hours at the office designated by the Master
Servicer.
Upon reasonable advance notice in writing, the Master Servicer will
provide to each Certificateholder which is a savings and loan association, bank
or insurance company certain reports and reasonable access to information and
documentation regarding the Mortgage Loans sufficient to permit such
Certificateholder to comply with applicable regulations of the OTS or other
regulatory authorities with respect to investment in the Certificates; provided
that the Master Servicer shall be entitled to be reimbursed by each such
Certificateholder for actual expenses incurred by the Master Servicer in
providing such reports and access.
SECTION 3.08. Permitted Withdrawals from the Certificate Account and
Distribution Account
(a) The Master Servicer may from time to time make withdrawals from the
Certificate Account for the following purposes:
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(i) to pay to the Master Servicer (to the extent not previously
retained by the Master Servicer) the servicing compensation to
which it is entitled pursuant to Section 3.15, and to pay to
the Master Servicer, as additional servicing compensation,
earnings on or investment income with respect to funds in or
credited to the Certificate Account;
(ii) to reimburse the Master Servicer for unreimbursed Advances
made by it, such right of reimbursement pursuant to this
subclause (ii) being limited to amounts received on the
Mortgage Loan(s) in respect of which any such Advance was
made;
(iii) to reimburse the Master Servicer for any Nonrecoverable
Advance previously made;
(iv) to reimburse the Master Servicer for Insured Expenses from the
related Insurance Proceeds;
(v) to reimburse the Master Servicer for (a) unreimbursed
Servicing Advances, the Master Servicer's right to
reimbursement pursuant to this clause (a) with respect to any
Mortgage Loan being limited to amounts received on such
Mortgage Loan(s) which represent late recoveries of the
payments for which such advances were made pursuant to Section
3.01 or Section 3.06, (b) unreimbursed Servicing Advances made
pursuant to Section 3.12 and (c) for unpaid Master Servicing
Fees as provided in Section 3.11 hereof;
(vi) to pay to the purchaser, with respect to each Mortgage Loan or
property acquired in respect thereof that has been purchased
pursuant to Section 2.02, 2.03 or 3.11, all amounts received
thereon after the date of such purchase;
(vii) to reimburse the Seller, the Master Servicer or the Depositor
for expenses incurred by any of them and reimbursable pursuant
to Section 6.03 hereof;
(viii) to withdraw any amount deposited in the Certificate Account
and not required to be deposited therein;
(ix) on or prior to the Distribution Account Deposit Date, to
withdraw an amount equal to the related Available Funds for
such Distribution Date and remit such amount to the Trustee
for deposit in the Distribution Account; and
(x) to clear and terminate the Certificate Account upon
termination of this Agreement pursuant to Section 9.01 or
Section 9.02 hereof.
The Master Servicer shall keep and maintain separate accounting, on a
Mortgage Loan by Mortgage Loan basis, for the purpose of justifying any
withdrawal from the Certificate Account pursuant to such subclauses (i), (ii),
(iv), (v) and (vi). Prior to making any withdrawal from the Certificate Account
pursuant to subclause (iii), the Master Servicer shall deliver to the Trustee an
Officer's Certificate of a Servicing Officer indicating the amount of any
previous Advance determined by
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the Master Servicer to be a Nonrecoverable Advance and identifying the related
Mortgage Loans(s), and their respective portions of such Nonrecoverable Advance.
(b) The Trustee shall withdraw funds from the Distribution Account for
distributions to Certificateholders in the manner specified in this Agreement
(and to withhold from the amounts so withdrawn, the amount of any taxes that it
is authorized to withhold pursuant to the last paragraph of Section 8.11). In
addition, the Trustee may from time to time make withdrawals from the
Distribution Account for the following purposes:
(i) [reserved];
(ii) to pay to the Master Servicer as additional servicing
compensation earnings on or investment income with respect to
funds in the Distribution Account;
(iii) to withdraw and return to the Master Servicer any amount
deposited in the Distribution Account and not required to be
deposited therein; and
(iv) to clear and terminate the Distribution Account upon
termination of the Agreement pursuant to Section 9.01 or
Section 9.02 hereof.
SECTION 3.09. [RESERVED]
SECTION 3.10. Enforcement of Due-on-Sale Clauses; Assumption Agreements
(a) Except as otherwise provided in this Section, when any property
subject to a Mortgage has been conveyed by the Mortgagor, the Master Servicer
shall to the extent that it has knowledge of such conveyance, enforce any
due-on-sale clause contained in any Mortgage Note or Mortgage, to the extent
permitted under applicable law and governmental regulations, but only to the
extent that such enforcement will not adversely affect or jeopardize coverage
under any Required Insurance Policy. Notwithstanding the foregoing, the Master
Servicer is not required to exercise such rights with respect to a Mortgage Loan
if the Person to whom the related Mortgaged Property has been conveyed or is
proposed to be conveyed satisfies the terms and conditions contained in the
Mortgage Note and Mortgage related thereto and the consent of the mortgagee
under such Mortgage Note or Mortgage is not otherwise so required under such
Mortgage Note or Mortgage as a condition to such transfer. In the event that the
Master Servicer is prohibited by law from enforcing any such due-on-sale clause,
or if coverage under any Required Insurance Policy would be adversely affected,
or if nonenforcement is otherwise permitted hereunder, the Master Servicer is
authorized, subject to Section 3.10(b), to take or enter into an assumption and
modification agreement from or with the person to whom such property has been or
is about to be conveyed, pursuant to which such person becomes liable under the
Mortgage Note and, unless prohibited by applicable state law, the Mortgagor
remains liable thereon, provided that the Mortgage Loan shall continue to be
covered (if so covered before the Master Servicer enters into such agreement) by
the applicable Required Insurance Policies. The Master Servicer, subject to
Section 3.10(b), is also authorized with the prior approval of the insurers
under any Required Insurance Policies to enter into a substitution of liability
agreement with such Person, pursuant to which the original Mortgagor is released
from liability and such Person is substituted as Mortgagor and becomes liable
under the Mortgage Note. Notwithstanding the foregoing, the Master Servicer
shall not
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be deemed to be in default under this Section by reason of any transfer or
assumption which the Master Servicer reasonably believes it is restricted by law
from preventing, for any reason whatsoever.
(b) Subject to the Master Servicer's duty to enforce any due-on-sale
clause to the extent set forth in Section 3.10(a) hereof, in any case in which a
Mortgaged Property has been conveyed to a Person by a Mortgagor, and such Person
is to enter into an assumption agreement or modification agreement or supplement
to the Mortgage Note or Mortgage that requires the signature of the Trustee, or
if an instrument of release signed by the Trustee is required releasing the
Mortgagor from liability on the Mortgage Loan, the Master Servicer shall prepare
and deliver or cause to be prepared and delivered to the Trustee for signature
and shall direct, in writing, the Trustee to execute the assumption agreement
with the Person to whom the Mortgaged Property is to be conveyed and such
modification agreement or supplement to the Mortgage Note or Mortgage or other
instruments as are reasonable or necessary to carry out the terms of the
Mortgage Note or Mortgage or otherwise to comply with any applicable laws
regarding assumptions or the transfer of the Mortgaged Property to such Person.
In connection with any such assumption, no material term of the Mortgage Note
may be changed. In addition, the substitute Mortgagor and the Mortgaged Property
must be acceptable to the Master Servicer in accordance with its underwriting
standards as then in effect. Together with each such substitution, assumption or
other agreement or instrument delivered to the Trustee for execution by it, the
Master Servicer shall deliver an Officer's Certificate signed by a Servicing
Officer stating that the requirements of this subsection have been met in
connection therewith. The Master Servicer shall notify the Trustee that any such
substitution or assumption agreement has been completed by forwarding to the
Trustee the original of such substitution or assumption agreement, which in the
case of the original shall be added to the related Mortgage File and shall, for
all purposes, be considered a part of such Mortgage File to the same extent as
all other documents and instruments constituting a part thereof. Any fee
collected by the Master Servicer for entering into an assumption or substitution
of liability agreement will be retained by the Master Servicer as additional
servicing compensation.
SECTION 3.11. Realization Upon Defaulted Mortgage Loans; Repurchase of
Certain Mortgage Loans
The Master Servicer shall use reasonable efforts to foreclose upon or
otherwise comparably convert the ownership of properties securing such of the
Mortgage Loans as come into and continue in default and as to which no
satisfactory arrangements can be made for collection of delinquent payments. In
connection with such foreclosure or other conversion, the Master Servicer shall
follow such practices and procedures as it shall deem necessary or advisable and
as shall be normal and usual in its general mortgage servicing activities and
meet the requirements of the insurer under any Required Insurance Policy;
provided, however, that the Master Servicer shall not be required to expend its
own funds in connection with any foreclosure or towards the restoration of any
property unless it shall determine (i) that such restoration and/or foreclosure
will increase the proceeds of liquidation of the Mortgage Loan after
reimbursement to itself of such expenses and (ii) that such expenses will be
recoverable to it through Liquidation Proceeds (respecting which it shall have
priority for purposes of withdrawals from the Certificate Account). The Master
Servicer shall be responsible for all other costs and expenses incurred by it in
any such proceedings; provided, however, that it shall be entitled to
reimbursement thereof from the liquidation proceeds with respect to the related
Mortgaged Property, as provided in the definition of Liquidation Proceeds. If
the Master Servicer has knowledge that a Mortgaged Property which the Master
Servicer is contemplating acquiring in foreclosure or by deed in lieu of
foreclosure is located within a 1 mile radius of any site listed in the
Expenditure Plan for the
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Hazardous Substance Clean Up Bond Act of 1984 or other site with environmental
or hazardous waste risks known to the Master Servicer, the Master Servicer will,
prior to acquiring the Mortgaged Property, consider such risks and only take
action in accordance with its established environmental review procedures.
With respect to any REO Property, the deed or certificate of sale shall
be taken in the name of the Trustee for the benefit of the Certificateholders,
or its nominee, on behalf of the Certificateholders. The Trustee's name shall be
placed on the title to such REO Property solely as the Trustee hereunder and not
in its individual capacity. The Master Servicer shall ensure that the title to
such REO Property references this Agreement and the Trustee's capacity
hereunder. As contemplated by Section 3.01 hereof, the Trustee and the Depositor
agree to execute and return to the Master Servicer any powers of attorney or
other instruments necessary to accomplish the foregoing. Pursuant to its efforts
to sell such REO Property, the Master Servicer shall either itself or through an
agent selected by the Master Servicer protect and conserve such REO Property in
the same manner and to such extent as is customary in the locality where such
REO Property is located and may, incident to its conservation and protection of
the interests of the Certificateholders, rent the same, or any part thereof, as
the Master Servicer deems to be in the best interest of the Certificateholders
for the period prior to the sale of such REO Property. The Master Servicer shall
prepare for and deliver to the Trustee a statement with respect to each REO
Property that has been rented showing the aggregate rental income received and
all expenses incurred in connection with the management and maintenance of such
REO Property at such times as is necessary to enable the Trustee to comply with
the reporting requirements of the REMIC Provisions. The net monthly rental
income, if any, from such REO Property shall be deposited in the Certificate
Account no later than the close of business on each Determination Date. The
Master Servicer shall perform the tax reporting and withholding required by
Sections 1445 and 6050J of the Code with respect to foreclosures and
abandonments, the tax reporting required by Section 6050H of the Code with
respect to the receipt of mortgage interest from individuals and any tax
reporting required by Section 6050P of the Code with respect to the cancellation
of indebtedness by certain financial entities.
In the event that the Trust Fund acquires any Mortgaged Property as
aforesaid or otherwise in connection with a default or imminent default on a
Mortgage Loan, the Master Servicer shall dispose of such Mortgaged Property
prior to two years after its acquisition by the Trust Fund unless the Trustee
shall have been supplied with an Opinion of Counsel to the effect that the
holding by the Trust Fund of such Mortgaged Property subsequent to such two-year
period will not result in the imposition of taxes on "prohibited transactions"
of any REMIC hereunder as defined in section 860F of the Code or cause any REMIC
hereunder to fail to qualify as a REMIC at any time that any Certificates are
outstanding, in which case the Trust Fund may continue to hold such Mortgaged
Property (subject to any conditions contained in such Opinion of Counsel).
Notwithstanding any other provision of this Agreement, no Mortgaged Property
acquired by the Trust Fund shall be rented (or allowed to continue to be rented)
or otherwise used for the production of income by or on behalf of the Trust Fund
in such a manner or pursuant to any terms that would (i) cause such Mortgaged
Property to fail to qualify as "foreclosure property" within the meaning of
section 860G(a)(8) of the Code or (ii) subject any REMIC hereunder to the
imposition of any federal, state or local income taxes on the income earned from
such Mortgaged Property under Section 860G(c) of the Code or otherwise, unless
the Master Servicer has agreed to indemnify and hold harmless the Trust Fund
with respect to the imposition of any such taxes.
The decision of the Master Servicer to foreclose on a defaulted
Mortgage Loan shall be subject to a determination by the Master Servicer that
the proceeds of such foreclosure would exceed the
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costs and expenses of bringing such a proceeding. The income earned from the
management of any REO Properties, net of reimbursement to the Master Servicer
for expenses incurred (including any property or other taxes) in connection with
such management and net of unreimbursed Master Servicing Fees, Advances and
Servicing Advances, shall be applied to the payment of principal of and interest
on the related defaulted Mortgage Loans (with interest accruing as though such
Mortgage Loans were still current) and all such income shall be deemed, for all
purposes in this Agreement, to be payments on account of principal and interest
on the related Mortgage Notes and shall be deposited into the Certificate
Account. To the extent the net income received during any calendar month is in
excess of the amount attributable to amortizing principal and accrued interest
at the related Mortgage Rate on the related Mortgage Loan for such calendar
month, such excess shall be considered to be a partial prepayment of principal
of the related Mortgage Loan.
The proceeds from any liquidation of a Mortgage Loan, as well as any
income from an REO Property, will be applied in the following order of priority:
first, to reimburse the Master Servicer for any related unreimbursed Servicing
Advances and Master Servicing Fees; second, to reimburse the Master Servicer for
any unreimbursed Advances; third, to reimburse the Certificate Account for any
Nonrecoverable Advances (or portions thereof) that were previously withdrawn by
the Master Servicer pursuant to Section 3.08(a)(iii) that related to such
Mortgage Loan; fourth, to accrued and unpaid interest (to the extent no Advance
has been made for such amount or any such Advance has been reimbursed) on the
Mortgage Loan or related REO Property, at the Net Mortgage Rate through the Due
Date occurring in the related Due Period; and fifth, as a recovery of principal
of the Mortgage Loan. Excess Proceeds, if any, from the liquidation of a
Liquidated Mortgage Loan will be retained by the Master Servicer as additional
servicing compensation pursuant to Section 3.15.
The Master Servicer, in its sole discretion, shall have the right to
purchase for its own account from the Trust Fund any Mortgage Loan which is 91
days or more delinquent at a price equal to the Purchase Price. The Purchase
Price for any Mortgage Loan purchased hereunder shall be deposited in the
Certificate Account and the Trustee, upon receipt of a certificate from the
Master Servicer in the form of Exhibit N hereto, shall release or cause to be
released to the purchaser of such Mortgage Loan the related Mortgage File and
shall execute and deliver such instruments of transfer or assignment prepared by
the purchaser of such Mortgage Loan, in each case without recourse, as shall be
necessary to vest in the purchaser of such Mortgage Loan any Mortgage Loan
released pursuant hereto and the purchaser of such Mortgage Loan shall succeed
to all the Trustee's right, title and interest in and to such Mortgage Loan and
all security and documents related thereto. Such assignment shall be an
assignment outright and not for security. The purchaser of such Mortgage Loan
shall thereupon own such Mortgage Loan, and all security and documents, free of
any further obligation to the Trustee or the Certificateholders with respect
thereto.
SECTION 3.12. Superior Liens
The Master Servicer shall file (or cause to be filed) a request for
notice of any action by a superior lienholder under a First Lien for the
protection of the Trustee's interest, where permitted by local law and whenever
applicable state law does not require that a junior lienholder be named as a
party defendant in foreclosure proceedings in order to foreclose such junior
lienholder's equity of redemption.
If the Master Servicer is notified that any superior lienholder has
accelerated or intends to accelerate the obligations secured by the First Lien,
or has declared or intends to declare a default
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under the mortgage or the promissory note secured thereby, or has filed or
intends to file an election to have the Mortgaged Property sold or foreclosed,
the Master Servicer shall take, on behalf of the Trust, whatever actions are
necessary to protect the interests of the Certificateholders and/or to preserve
the security of the related Mortgage Loan, subject to the application of the
REMIC Provisions in accordance with the terms of this Agreement. The Master
Servicer shall immediately notify the Trustee of any such action or
circumstances. The Master Servicer shall advance the necessary funds to cure the
default or reinstate the superior lien, if such advance is in the best interests
of the Certificateholders in accordance with the servicing standards in Section
3.01. The Master Servicer shall not make such an advance except to the extent
that it determines in its reasonable good faith judgment that the advance would
be recoverable from Liquidation Proceeds on the related Mortgage Loan and in no
event in an amount that is greater than the Stated Principal Balance of the
related Mortgage Loan. The Master Servicer shall thereafter take such action as
is necessary to recover the amount so advanced.
SECTION 3.13. Trustee to Cooperate; Release of Mortgage Files
Upon the payment in full of any Mortgage Loan, or the receipt by the
Master Servicer of a notification that payment in full will be escrowed in a
manner customary for such purposes, the Master Servicer will immediately notify
the Trustee by delivering, or causing to be delivered a "Request for Release"
substantially in the form of Exhibit N. Upon receipt of such request, the
Trustee shall promptly release the related Mortgage File to the Master Servicer,
and the Trustee shall at the Master Servicer's direction execute and deliver to
the Master Servicer the request for reconveyance, deed of reconveyance or
release or satisfaction of mortgage or such instrument releasing the lien of the
Mortgage in each case provided by the Master Servicer, together with the
Mortgage Note with written evidence of cancellation thereon. Expenses incurred
in connection with any instrument of satisfaction or deed of reconveyance shall
be chargeable to the related Mortgagor. From time to time and as shall be
appropriate for the servicing or foreclosure of any Mortgage Loan, including for
such purpose, collection under any policy of flood insurance, any fidelity bond
or errors or omissions policy, or for the purposes of effecting a partial
release of any Mortgaged Property from the lien of the Mortgage or the making of
any corrections to the Mortgage Note or the Mortgage or any of the other
documents included in the Mortgage File, the Trustee shall, upon delivery to the
Trustee of a Request for Release in the form of Exhibit M signed by a Servicing
Officer, release the Mortgage File to the Master Servicer. Subject to the
further limitations set forth below, the Master Servicer shall cause the
Mortgage File or documents so released to be returned to the Trustee when the
need therefor by the Master Servicer no longer exists, unless the Mortgage Loan
is liquidated and the proceeds thereof are deposited in the Certificate Account,
in which case the Master Servicer shall deliver to the Trustee a Request for
Release in the form of Exhibit N, signed by a Servicing Officer.
If the Master Servicer at any time seeks to initiate a foreclosure
proceeding in respect of any Mortgaged Property as authorized by this Agreement,
the Master Servicer shall deliver or cause to be delivered to the Trustee, for
signature, as appropriate, any court pleadings, requests for trustee's sale or
other documents necessary to effectuate such foreclosure or any legal action
brought to obtain judgment against the Mortgagor on the Mortgage Note or the
Mortgage or to obtain a deficiency judgment or to enforce any other remedies or
rights provided by the Mortgage Note or the Mortgage or otherwise available at
law or in equity.
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SECTION 3.14. Documents Records and Funds in Possession of Master
Servicer to be Held for the Trustee
Notwithstanding any other provisions of this Agreement, the Master
Servicer shall transmit to the Trustee as required by this Agreement all
documents and instruments in respect of a Mortgage Loan coming into the
possession of the Master Servicer from time to time and shall account fully to
the Trustee for any funds received by the Master Servicer or which otherwise are
collected by the Master Servicer as Liquidation Proceeds or Insurance Proceeds
in respect of any Mortgage Loan. All Mortgage Files and funds collected or held
by, or under the control of, the Master Servicer in respect of any Mortgage
Loans, whether from the collection of principal and interest payments or from
Liquidation Proceeds, including but not limited to, any funds on deposit in the
Certificate Account, shall be held by the Master Servicer for and on behalf of
the Trustee and shall be and remain the sole and exclusive property of the
Trustee, subject to the applicable provisions of this Agreement. The Master
Servicer also agrees that it shall not create, incur or subject any Mortgage
File or any funds that are deposited in the Certificate Account, Distribution
Account or any Escrow Account, or any funds that otherwise are or may become due
or payable to the Trustee for the benefit of the Certificateholders, to any
claim, lien, security interest, judgment, levy, writ of attachment or other
encumbrance, or assert by legal action or otherwise any claim or right of setoff
against any Mortgage File or any funds collected on, or in connection with, a
Mortgage Loan, except, however, that the Master Servicer shall be entitled to
set off against and deduct from any such funds any amounts that are properly due
and payable to the Master Servicer under this Agreement.
SECTION 3.15. Servicing Compensation
As compensation for its activities hereunder, the Master Servicer shall
be entitled to retain or withdraw from the Certificate Account an amount equal
to the Master Servicing Fee for each Mortgage Loan, provided that the aggregate
Master Servicing Fee with respect to any Distribution Date shall be reduced (i)
by an amount equal to the aggregate of the Prepayment Interest Shortfalls, if
any, with respect to such Distribution Date, but not below an amount equal to
the aggregate Master Servicing Fee for such Distribution Date before reduction
thereof in respect of such Prepayment Interest Shortfalls, and (ii) with respect
to the first Distribution Date, an amount equal to any amount to be deposited
into the Distribution Account by the Depositor pursuant to Section 2.01(a) and
not so deposited.
Additional servicing compensation in the form of all income and gain
net of any losses realized from Permitted Investments shall be retained by the
Master Servicer to the extent not required to be deposited in the Certificate
Account pursuant to Section 3.05 hereof. The Master Servicer shall be required
to pay all expenses incurred by it in connection with its master servicing
activities hereunder (including payment of any premiums for maintenance of the
forms of insurance coverage required by this Agreement) and shall not be
entitled to reimbursement therefor except as specifically provided in this
Agreement.
SECTION 3.16. Access to Certain Documentation
The Master Servicer shall provide to the OTS and the FDIC and to
comparable regulatory authorities supervising Holders of Subordinated
Certificates and the examiners and supervisory agents of the OTS, the FDIC and
such other authorities, access to the documentation regarding the Mortgage Loans
required by applicable regulations of the OTS and the FDIC. Such access
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shall be afforded without charge, but only upon reasonable and prior written
request and during normal business hours at the offices designated by the Master
Servicer. Nothing in this Section shall limit the obligation of the Master
Servicer to observe any applicable law prohibiting disclosure of information
regarding the Mortgagors and the failure of the Master Servicer to provide
access as provided in this Section as a result of such obligation shall not
constitute a breach of this Section.
SECTION 3.17. Annual Statement as to Compliance
The Master Servicer shall deliver to the Depositor and the Trustee on
or before 120 days after the end of the Master Servicer's Fiscal Year,
commencing with its 1998 Fiscal Year, an Officer's Certificate stating, as to
the signer thereof, that (i) a review of the activities of the Master Servicer
during the preceding Fiscal Year and of the performance of the Master Servicer
under this Agreement has been made under such officer's supervision and (ii) to
the best of such officer's knowledge, based on such review, the Master Servicer
has fulfilled all its obligations under this Agreement throughout such year, or,
if there has been a default in the fulfillment of any such obligation,
specifying each such default known to such officer and the nature and status
thereof. The Trustee shall forward a copy of each such statement to each Rating
Agency.
SECTION 3.18. Annual Independent Public Accountants' Servicing
Statement; Financial Statements
On or before 120 days after the end of the Master Servicer's fiscal
year, commencing with its 1998 Fiscal Year, the Master Servicer at its expense
shall cause a nationally or regionally recognized firm of independent public
accountants (who may also render other services to the Master Servicer, the
Seller or any affiliate thereof) which is a member of the American Institute of
Certified Public Accountants to furnish a statement to the Trustee and the
Depositor to the effect that such firm has examined the Master Servicer's
assertion of its compliance with the minimum standards of the Uniform Single
Attestation Programs for Mortgage Bankers ("USAP"), to the extent applicable and
that, on the basis of such examination, conducted substantially in compliance
with USAP, to the extent applicable, such assertion is fairly stated in all
material respects except for such significant exceptions or errors in records
that, in the opinion of such firm, USAP requires it to report. In rendering such
statement, such firm may rely, as to matters relating to direct servicing of
mortgage loans by Subservicers, upon comparable statements for examinations
conducted substantially in compliance with the Uniform Single Attestation
Program for Mortgage Bankers or the Audit Program for Mortgages serviced for
FNMA and FHLMC (rendered within one year of such statement) of independent
public accountants with respect to the related Subservicer. Copies of such
statement shall be provided by the Trustee to any Certificateholder upon request
at the Master Servicer's expense, provided such statement is delivered by the
Master Servicer to the Trustee.
SECTION 3.19. Errors and Omissions Insurance; Fidelity Bonds
The Master Servicer shall for so long as it acts as master servicer
under this Agreement, obtain and maintain in force (a) a policy or policies of
insurance covering errors and omissions in the performance of its obligations as
Master Servicer hereunder and (b) a fidelity bond in respect of its officers,
employees and agents. Each such policy or policies and bond shall, together,
comply with the requirements from time to time of FNMA or FHLMC for persons
performing servicing for mortgage loans purchased by FNMA or FHLMC. In the event
that any such policy or bond ceases to be in effect,
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the Master Servicer shall obtain a comparable replacement policy or bond from an
insurer or issuer, meeting the requirements set forth above as of the date of
such replacement.
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ARTICLE IV
DISTRIBUTIONS AND
ADVANCES BY THE MASTER SERVICER
SECTION 4.01. Advances
The Master Servicer shall determine on or before each Master Servicer
Advance Date whether it is required to make an Advance pursuant to the
definition thereof. If the Master Servicer determines it is required to make an
Advance, it shall, on or before the Master Servicer Advance Date, either (i)
deposit into the Certificate Account an amount equal to the Advance or (ii) make
an appropriate entry in its records relating to the Certificate Account that any
Amount Held for Future Distribution has been used by the Master Servicer in
discharge of its obligation to make any such Advance. Any funds so applied shall
be replaced by the Master Servicer by deposit in the Certificate Account no
later than the close of business on the next Master Servicer Advance Date. The
Master Servicer shall be entitled to be reimbursed from the Certificate Account
for all Advances of its own funds made pursuant to this Section as provided in
Section 3.08. The obligation to make Advances with respect to any Mortgage Loan
shall continue if such Mortgage Loan has been foreclosed or otherwise terminated
and the related Mortgaged Property has not been liquidated.
The Master Servicer shall deliver to the Trustee on the related Master
Servicer Advance Date an Officer's Certificate of a Servicing Officer indicating
the amount of any proposed Advance determined by the Master Servicer to be a
Nonrecoverable Advance.
SECTION 4.02. Priorities of Distribution
On each Distribution Date, the Trustee will withdraw from the
Distribution Account the Available Funds, and make the following disbursements
and transfers as described below and to the extent of Available Funds:
(i) to the Holders of each Class of Offered Certificates in the
following order of priority:
(a) concurrently, to each Class of Senior Certificates,
the aggregate of the related Interest Distribution
Amounts, pro rata, based on the amount of interest to
which each such Class is entitled on such
Distribution Date; and
(b) to the Class B Certificates, the related Current
Interest for such Distribution Date;
(ii) A. on each Distribution Date (a) before the Stepdown Date or
(b) after the Stepdown Date and with respect to which a
Trigger Event is in effect, to the Holders of the Class or
Classes of Senior Certificates then entitled to distributions
of principal as set forth below, an amount equal to the
Principal Distribution Amount in the following order of
priority:
(x) to the Class A-5 Certificates, the Class A-5
Principal Distribution Amount; and
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(y) the balance of the Principal Distribution
Amount for such Distribution Date
sequentially, to the Class A-1, Class A-2,
Class A-3, Class A-4 and Class A-5
Certificates, in that order, until the Class
Certificate Balance of each such Class of
Senior Certificates has been reduced to
zero;
B. on each Distribution Date on or after the Stepdown Date and as
long as a Trigger Event is not in effect, to the Holders of
the Class or Classes of Offered Certificates then entitled to
distributions of principal, an amount equal to the Principal
Distribution Amount in the following amounts and order of
priority:
(a) the lesser of (x) the Principal Distribution Amount
and (y) the Senior Principal Distribution Amount in
the following order of priority:
(1) to the Class A-5 Certificates, the Class A-5
Principal Distribution Amount; and
(2) the balance of the amount specified in (a)
for such Distribution Date sequentially, to
the Class A-1, Class A-2, Class A-3, Class
A-4 and Class A-5 Certificates, in that
order, until the Class Certificate Balance
of each Class of Senior Certificates has
been reduced to zero;
(b) the lesser of (x) the excess of (i) the Principal
Distribution Amount over (ii) the amount distributed
to the Senior Certificates in clause (ii)(B)(a) above
and (y) the Class B Principal Distribution Amount, to
the Class B Certificates, until the Class Certificate
Balance thereof has been reduced to zero;
(iii) any amounts remaining after the distributions in clauses (i)
and (ii) above shall be distributed in the following order of
priority:
(a) to fund the Extra Principal Distribution Amount for
such Distribution Date to be paid as a component of
the Principal Distribution Amount in the same order
of priority described in clause (ii) above; and
(b) to the Class B Certificates, (i) the related Interest
Carryover Amount, if any, and (ii) the related
Applied Realized Loss Amount, if any, in that order;
and
(iv) to the Class R Certificates, the balance.
Notwithstanding the foregoing, on any Distribution Date (i) on or after
the date on which the Class Certificate Balance of the Subordinated Certificates
has been reduced to zero, distributions in respect of the Principal Distribution
Amount will be made to all Classes of Senior Certificates pro rata based on
their respective Class Certificate Balances and (ii) on or after which the
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date on which the aggregate Class Certificate Balance of the Senior Certificates
has been reduced to zero, the excess of the Principal Distribution Amount over
the portion thereof, if any, distributed on the Senior Certificates shall be
distributed on the Subordinated Certificates.
SECTION 4.03. Allocation of Losses
On or prior to each Determination Date, the Master Servicer shall
determine the total Applied Realized Loss Amounts with respect to the related
Distribution Date. The Applied Realized Loss Amount for any Distribution Date
shall be applied after all distributions on such Distribution Date by reducing
the Class Certificate Balance of the Subordinate Certificates until the Class
Certificate Balance thereof is reduced to zero.
SECTION 4.04. Monthly Statements to Certificateholders
(a) Not later than each Distribution Date, the Trustee shall prepare
and cause to be forwarded by first class mail to each Certificateholder, the
Master Servicer and the Depositor a statement setting forth with respect to the
related distribution:
(i) the amount thereof allocable to principal, separately
identifying the aggregate amount of any Principal Prepayments
and Liquidation Proceeds included therein;
(ii) the amount thereof allocable to interest, any Interest
Carryover Amount for any Class included in such distribution
and any remaining Interest Carryover Amount for any Class
after giving effect to such distribution;
(iii) if the distribution to the Holders of such Class of
Certificates is less than the full amount that would be
distributable to such Holders if there were sufficient funds
available therefor, the amount of the shortfall and the
allocation thereof as between principal and interest;
(iv) the Class Certificate Balance of each Class of Certificates
after giving effect to the distribution of principal on such
Distribution Date;
(v) the Pool Principal Balance as of the last day of the related
Due Period;
(vi) the Extra Principal Distribution Amount, the
Overcollateralization Amount and any Overcollateralization
Deficiency;
(vii) the amount of the Master Servicing Fees paid to or retained by
the Master Servicer with respect to such Distribution Date;
(viii) the Pass-Through Rate for each such Class of Certificates with
respect to such Distribution Date;
(ix) the amount of Advances included in the distribution on such
Distribution Date and the aggregate amount of Advances
outstanding as of the close of business on such Distribution
Date;
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(x) the number and aggregate principal amounts of Mortgage Loans
(A) delinquent (exclusive of Mortgage Loans in foreclosure)
(1) 30 to 59 days (2) 60 to 89 days (3) 90 or more days and
(B) in foreclosure as of the close of business on the last day
of the calendar month preceding such Distribution Date;
(xi) with respect to any Mortgage Loan that became an REO Property
during the preceding calendar month, the loan number and
Stated Principal Balance of such Mortgage Loan as of the close
of business on the Determination Date preceding such
Distribution Date and the date of acquisition thereof;
(xii) the total number and principal balance of any REO Properties
(and market value, if available) as of the close of business
on the Determination Date preceding such Distribution Date;
(xiii) the aggregate amount of Applied Realized Loss Amounts for such
Distribution Date; and
(xiv) the existence of any Trigger Event.
(b) The Trustee's responsibility for disbursing the above information
to the Certificateholders is limited to the availability, timeliness and
accuracy of the information provided by the Master Servicer. The Trustee will
send a copy of each statement provided pursuant to this Section 4.04 to each
Rating Agency.
(c) On or before each Determination Date, the Master Servicer shall
deliver to the Trustee (which delivery may be by electronic data transmission) a
report in substantially the form set forth as Schedule V hereto.
(d) Within a reasonable period of time after the end of each calendar
year, the Trustee shall cause to be furnished to each Person who at any time
during the calendar year was a Certificateholder, a statement containing the
information set forth in clauses (a)(i), (a)(ii) and (a)(vii) of this Section
4.04 aggregated for such calendar year or applicable portion thereof during
which such Person was a Certificateholder. Such obligation of the Trustee shall
be deemed to have been satisfied to the extent that substantially comparable
information shall be provided by the Trustee pursuant to any requirements of the
Code as from time to time in effect.
(e) In addition, the Trustee shall forward a copy of the statement
required by this Section 4.04 by overnight courier or facsimile transmission (as
instructed by the Depositor) on each Distribution Date to certain secondary
market agents designated from time to time by the Depositor. The initial
secondary market agents designated by the Depositor are TREPP, 000 Xxxxxxx
Xxxxxx, 00xx Xxxxx, Xxx Xxxx, XX 00000, facsimile number (000) 000-0000, The
Bloomberg Financial Markets, 000 Xxxxxxxx Xxxx Xxxxx, X.X. Xxx 000, Xxxxxxxxx,
XX 00000-0000, facsimile number (000) 000-0000, and CMO Passport. The Trustee
shall deliver to Bloomberg Financial Markets, 000 Xxxxxxxx Xxxx Xxxxx, X.X. Xxx
000, Xxxxxxxxx, Xxx Xxxxxx 00000-0000, and such other secondary market
facilitators designated by the Depositor on each Distribution Date a
computer-readable Magnetic Tape, or other mutually agreed upon electronic media,
containing the information also set forth in Schedule V hereto as provided by
the Master Servicer to the Trustee.
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SECTION 4.05. Determination of Pass-Through Rates for LIBOR
Certificates
On each Interest Determination Date so long as the LIBOR Certificates
are outstanding, the Trustee shall either (i) request each Reference Bank to
inform the Trustee of the quotation offered by its principal London office for
making one-month United States dollar deposits in leading banks in the London
interbank market, as of 11:00 a.m. (London time) on such Interest Determination
Date or (ii) in lieu of making any such request, rely on such Reference Bank
quotations that appear at such time on Telerate Page 3750 to the extent
available.
LIBOR for the next Interest Accrual Period will be established by the
Trustee on each Interest Determination Date as follows:
(a) If on any Interest Determination Date two or more Reference Banks
provide such offered quotations, LIBOR for the next Interest Accrual Period
shall be the arithmetic mean of such offered quotations (rounding such
arithmetic mean upwards if necessary to the nearest whole multiple of
1/32%). (b) If on any Interest Determination Date only one or none of the
Reference Banks provides such offered quotations, LIBOR for the next
Interest Accrual Period shall be whichever is the higher of (i) LIBOR as
determined on the previous Interest Determination Date or (ii) the Reserve
Interest Rate. The "Reserve Interest Rate" shall be the rate per annum which
the Trustee determines to be either (i) the arithmetic mean (rounded upwards
if necessary to the nearest whole multiple of 1/32%) of the one-month United
States dollar lending rates that New York City banks selected by the Trustee
are quoting, on the relevant Interest Determination Date, to the principal
London offices of at least two of the Reference Banks to which such
quotations are, in the opinion of the Trustee, being so made, or (ii) in the
event that the Trustee can determine no such arithmetic mean, the lowest
one-month United States dollar lending rate which New York City banks
selected by the Trustee are quoting on such Interest Determination Date to
leading European banks.
(c) If on any Interest Determination Date the trustee is required but
is unable to determine the Reserve Interest Rate in the manner provided in
paragraph (b) above, LIBOR shall be LIBOR as determined on the preceding
Interest Determination Date, or, in the case of the first Interest
Determination Date, the Initial LIBOR Rate.
Until all of the LIBOR Certificates are paid in full, the Trustee will
at all times retain at least three Reference Banks for the purpose of
determining LIBOR with respect to each Interest Determination Date. The Trustee
initially shall designate the Reference Banks after consultation with the Master
Servicer. Each "Reference Bank" shall be a leading bank engaged in transactions
in Eurodollar deposits in the international Eurocurrency market, shall not
control, be controlled by, or be under common control with, the Trustee and
shall have an established place of business in London. If any such Reference
Bank should be unwilling or unable to act as such or if the Master Servicer
should terminate its appointment as Reference Bank, the Trustee shall promptly
appoint or cause to be appointed another Reference Bank. The Trustee shall have
no liability or responsibility to any Person for (i) the selection of any
Reference Bank for purposes of determining LIBOR or (ii) any inability to retain
at least three Reference Banks which is caused by circumstances beyond its
reasonable control.
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The Pass-Through Rate for each Class of LIBOR Certificates for each
Interest Accrual Period shall be determined by the Trustee on each Interest
Determination Date so long as the LIBOR Certificates are outstanding on the
basis of LIBOR and the respective formulae appearing in footnotes corresponding
to the LIBOR Certificates in the table relating to the Certificates in the
Preliminary Statement.
In determining LIBOR, any Pass-Through Rate for the LIBOR Certificates
or any Reserve Interest Rate, the Trustee may conclusively rely and shall be
protected in relying upon the offered quotations (whether written, oral or on
Telerate Page 3750) from the Reference Banks or the New York City banks as to
LIBOR or the Reserve Interest Rate, as appropriate, in effect from time to time.
The Trustee shall not have any liability or responsibility to any Person for (i)
the Trustee's selection of New York City banks for purposes of determining any
Reserve Interest Rate or (ii) its inability, following a good-faith reasonable
effort, to obtain such quotations from the Reference Banks or the New York City
banks or to determine such arithmetic mean, all as provided for in this Section
4.05.
The establishment of LIBOR and each Pass-Through Rate for the LIBOR
Certificates by the Trustee shall (in the absence of manifest error) be final,
conclusive and binding upon each Holder of a Certificate and the Trustee.
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ARTICLE V
THE CERTIFICATES
SECTION 5.01. The Certificates
The Certificates shall be substantially in the forms attached hereto as
exhibits. The Certificates shall be issuable in registered form, in the minimum
denominations, integral multiples in excess thereof (except that one Certificate
in each Class may be issued in a different amount which must be in excess of the
applicable minimum denomination) and aggregate denominations per Class set forth
in the Preliminary Statement.
Subject to Section 9.03 hereof respecting the final distribution on the
Certificates, on each Distribution Date the Trustee shall make distributions to
each Certificateholder of record on the preceding Record Date either (x) by wire
transfer in immediately available funds to the account of such holder at a bank
or other entity having appropriate facilities therefor, if (i) such Holder has
so notified the Trustee at least five Business Days prior to the related Record
Date and (ii) such Holder shall hold (A) 100% of the Class Certificate Balance
of any Class of Certificates or (B) Certificates of any Class with aggregate
principal Denominations of not less than $1,000,000 or (y) by check mailed by
first class mail to such Certificateholder at the address of such holder
appearing in the Certificate Register.
The Certificates shall be executed by manual or facsimile signature on
behalf of the Trustee by an authorized officer. Certificates bearing the manual
or facsimile signatures of individuals who were, at the time when such
signatures were affixed, authorized to sign on behalf of the Trustee shall bind
the Trustee, notwithstanding that such individuals or any of them have ceased to
be so authorized prior to the execution and delivery of such Certificates or did
not hold such offices at the date of such Certificate. No Certificate shall be
entitled to any benefit under this Agreement, or be valid for any purpose,
unless countersigned by the Trustee by manual signature, and such
countersignature upon any Certificate shall be conclusive evidence, and the only
evidence, that such Certificate has been duly executed and delivered hereunder.
All Certificates shall be dated the date of their countersignature. On the
Closing Date, the Trustee shall countersign the Certificates to be issued at the
direction of the Depositor, or any affiliate thereof.
The Depositor shall provide, or cause to be provided, to the Trustee on
a continuous basis, an adequate inventory of Certificates to facilitate
transfers.
SECTION 5.02. Certificate Register; Registration of Transfer and
Exchange of Certificates.
(a) The Trustee shall maintain, or cause to be maintained in accordance
with the provisions of Section 5.06 hereof, a Certificate Register for the Trust
Fund in which, subject to the provisions of subsections (b) and (c) below and to
such reasonable regulations as it may prescribe, the Trustee shall provide for
the registration of Certificates and of transfers and exchanges of Certificates
as herein provided. Upon surrender for registration of transfer of any
Certificate, the Trustee shall execute and deliver, in the name of the
designated transferee or transferees, one or more new Certificates of the same
Class and aggregate Percentage Interest.
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At the option of a Certificateholder, Certificates may be exchanged for
other Certificates of the same Class in authorized denominations and evidencing
the same aggregate Percentage Interest upon surrender of the Certificates to be
exchanged at the office or agency of the Trustee. Whenever any Certificates are
so surrendered for exchange, the Trustee shall execute, countersign, and deliver
the Certificates which the Certificateholder making the exchange is entitled to
receive. Every Certificate presented or surrendered for registration of transfer
or exchange shall be accompanied by a written instrument of transfer in form
satisfactory to the Trustee duly executed by the holder thereof or his attorney
duly authorized in writing.
No service charge to the Certificateholders shall be made for any
registration of transfer or exchange of Certificates, but payment of a sum
sufficient to cover any tax or governmental charge that may be imposed in
connection with any transfer or exchange of Certificates may be required.
All Certificates surrendered for registration of transfer or exchange
shall be cancelled and subsequently destroyed by the Trustee in accordance with
the Trustee's customary procedures.
The Depositor initially appoints the Trustee as custodian of the
Book-Entry Certificates.
(b) No transfer of a Residual Certificate shall be made unless such
transfer is made pursuant to an effective registration statement under the
Securities Act and any applicable state securities laws or is exempt from the
registration requirements under said Act and such state securities laws. In the
event that a transfer is to be made in reliance upon an exemption from the
Securities Act and such laws, in order to assure compliance with the Securities
Act and such laws, the Certificateholder desiring to effect such transfer and
such Certificateholder's prospective transferee shall each certify to the
Trustee in writing the facts surrounding the transfer in substantially the forms
set forth in Exhibit J (the "Transferor Certificate") and (i) deliver a letter
in substantially the form of either Exhibit K (the "Investment Letter") or
Exhibit L (the "Rule 144A Letter") or (ii) there shall be delivered to the
Trustee at the expense of the transferor an Opinion of Counsel that such
transfer may be made pursuant to an exemption from the Securities Act. The
Depositor shall provide to any Holder of a Residual Certificate and any
prospective transferee designated by any such Holder, information regarding the
related Certificates and the Mortgage Loans and such other information as shall
be necessary to satisfy the condition to eligibility set forth in Rule
144A(d)(4) for transfer of any such Certificate without registration thereof
under the Securities Act pursuant to the registration exemption provided by Rule
144A. The Trustee and the Master Servicer shall cooperate with the Depositor in
providing the Rule 144A information referenced in the preceding sentence,
including providing to the Depositor such information regarding the
Certificates, the Mortgage Loans and other matters regarding the Trust Fund as
the Depositor shall reasonably request to meet its obligation under the
preceding sentence. Each Holder of a Residual Certificate desiring to effect
such transfer shall, and does hereby agree to, indemnify the Trustee and the
Depositor, the Seller and the Master Servicer against any liability that may
result if the transfer is not so exempt or is not made in accordance with such
federal and state laws.
No transfer of an ERISA-Restricted Certificate shall be made unless the
Trustee shall have received either (i) a representation from the transferee of
such Certificate acceptable to and in form and substance satisfactory to the
Trustee (in the event such Certificate is a Residual Certificate, such
requirement is satisfied only by the Trustee's receipt of a representation
letter from the transferee substantially in the form of Exhibit K or Exhibit L),
to the effect that such transferee is not an employee benefit plan or
arrangement subject to Section
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406 of ERISA or a plan or arrangement subject to Section 4975 of the Code, nor a
person acting on behalf of any such plan or arrangement, nor using the assets of
any such plan or arrangement to effect such transfer, (ii) if the purchaser is
an insurance company, a representation that the purchaser is an insurance
company which is purchasing such Certificates with funds contained in an
"insurance company general account" (as such term is defined in Section V(e) of
Prohibited Transaction Class Exemption 95-60 ("PTCE 95-60")) and that the
purchase and holding of such Certificates are covered under PTCE 95-60 or (iii)
in the case of any such ERISA-Restricted Certificate presented for registration
in the name of an employee benefit plan subject to ERISA, or a plan or
arrangement subject to Section 4975 of the Code (or comparable provisions of any
subsequent enactments), or a trustee of any such plan or any other person acting
on behalf of any such plan or arrangement, or using such plan's or arrangement's
assets, an Opinion of Counsel satisfactory to the Trustee, which Opinion of
Counsel shall not be an expense of either the Trustee or the Trust Fund,
addressed to the Trustee to the effect that the purchase or holding of such
ERISA-Restricted Certificate will not result in the assets of the Trust Fund
being deemed to be "plan assets" and subject to the prohibited transaction
provisions of ERISA and the Code and will not subject the Trustee to any
obligation in addition to those expressly undertaken in this Agreement or to any
liability. For purposes of the preceding sentence, with respect to an
ERISA-Restricted Certificate that is a Book Entry Certificate, in the event the
representation letter referred to in the preceding sentence is not so furnished,
such representation shall be deemed to have been made to the Trustee by the
transferee's (including an initial acquiror's) acceptance of the
ERISA-Restricted Certificates. Notwithstanding anything else to the contrary
herein, any purported transfer of an ERISA-Restricted Certificate to or on
behalf of an employee benefit plan subject to ERISA or to the Code without the
delivery to the Trustee of an Opinion of Counsel satisfactory to the Trustee as
described above shall be void and of no effect.
To the extent permitted under applicable law (including, but not
limited to, ERISA), the Trustee shall be under no liability to any Person for
any registration of transfer of any ERISA-Restricted Certificate that is in fact
not permitted by this Section 5.02(b) or for making any payments due on such
Certificate to the Holder thereof or taking any other action with respect to
such Holder under the provisions of this Agreement so long as the transfer was
registered by the Trustee in accordance with the foregoing requirements.
(c) Each Person who has or who acquires any Ownership Interest in a
Residual Certificate shall be deemed by the acceptance or acquisition of such
Ownership Interest to have agreed to be bound by the following provisions, and
the rights of each Person acquiring any Ownership Interest in a Residual
Certificate are expressly subject to the following provisions:
(i) Each Person holding or acquiring any Ownership Interest in a
Residual Certificate shall be a Permitted Transferee and shall
promptly notify the Trustee of any change or impending change
in its status as a Permitted Transferee.
(ii) No Ownership Interest in a Residual Certificate may be
registered on the Closing Date or thereafter transferred, and
the Trustee shall not register the Transfer of any Residual
Certificate unless, in addition to the certificates required
to be delivered to the Trustee under subparagraph (b) above,
the Trustee shall have been furnished with an affidavit (a
"Transfer Affidavit") of the initial owner or the proposed
transferee in the form attached hereto as Exhibit I.
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(iii) Each Person holding or acquiring any Ownership Interest in a
Residual Certificate shall agree (A) to obtain a Transfer
Affidavit from any other Person to whom such Person attempts
to Transfer its Ownership Interest in a Residual Certificate,
(B) to obtain a Transfer Affidavit from any Person for whom
such Person is acting as nominee, trustee or agent in
connection with any Transfer of a Residual Certificate and (C)
not to Transfer its Ownership Interest in a Residual
Certificate or to cause the Transfer of an Ownership Interest
in a Residual Certificate to any other Person if it has actual
knowledge that such Person is not a Permitted Transferee.
(iv) Any attempted or purported Transfer of any Ownership Interest
in a Residual Certificate in violation of the provisions of
this Section 5.02(c) shall be absolutely null and void and
shall vest no rights in the purported Transferee. If any
purported transferee shall become a Holder of a Residual
Certificate in violation of the provisions of this Section
5.02(c), then the last preceding Permitted Transferee shall be
restored to all rights as Holder thereof retroactive to the
date of registration of Transfer of such Residual Certificate.
The Trustee shall be under no liability to any Person for any
registration of Transfer of a Residual Certificate that is in
fact not permitted by Section 5.02(b) and this Section 5.02(c)
or for making any payments due on such Certificate to the
Holder thereof or taking any other action with respect to such
Holder under the provisions of this Agreement so long as the
Transfer was registered after receipt of the related Transfer
Affidavit, Transferor Certificate and either the Rule 144A
Letter or the Investment Letter. The Trustee shall be entitled
but not obligated to recover from any Holder of a Residual
Certificate that was in fact not a Permitted Transferee at the
time it became a Holder or, at such subsequent time as it
became other than a Permitted Transferee, all payments made on
such Residual Certificate at and after either such time. Any
such payments so recovered by the Trustee shall be paid and
delivered by the Trustee to the last preceding Permitted
Transferee of such Certificate.
(v) The Depositor shall use its best efforts to make available,
upon receipt of written request from the Trustee, all
information necessary to compute any tax imposed under Section
860E(e) of the Code as a result of a Transfer of an Ownership
Interest in a Residual Certificate to any Holder who is not a
Permitted Transferee.
The restrictions on Transfers of a Residual Certificate set forth in
this Section 5.02(c) shall cease to apply (and the applicable portions of the
legend on a Residual Certificate may be deleted) with respect to Transfers
occurring after delivery to the Trustee of an Opinion of Counsel, which Opinion
of Counsel shall not be an expense of the Trust Fund, the Trustee, the Seller or
the Master Servicer, to the effect that the elimination of such restrictions
will not cause any REMIC hereunder to fail to qualify as a REMIC at any time
that the Certificates are outstanding or result in the imposition of any tax on
the Trust Fund, a Certificateholder or another Person. Each Person holding or
acquiring any Ownership Interest in a Residual Certificate hereby consents to
any amendment of this Agreement which, based on an Opinion of Counsel furnished
to the Trustee, is reasonably necessary (a) to ensure that the record ownership
of, or any beneficial interest in, a Residual Certificate is not transferred,
directly or indirectly, to a Person that is not a Permitted Transferee and (b)
to provide for a means to compel the Transfer of a Residual Certificate which is
held by a Person that is not a Permitted Transferee to a Holder that is a
Permitted Transferee.
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(d) The preparation and delivery of all certificates and opinions
referred to above in this Section 5.02 in connection with transfer shall be at
the expense of the parties to such transfers.
(e) Except as provided below, the Book-Entry Certificates shall at all
times remain registered in the name of the Depository or its nominee and at all
times: (i) registration of the Certificates may not be transferred by the
Trustee except to another Depository; (ii) the Depository shall maintain
book-entry records with respect to the Certificate Owners and with respect to
ownership and transfers of such Book-Entry Certificates; (iii) ownership and
transfers of registration of the Book-Entry Certificates on the books of the
Depository shall be governed by applicable rules established by the Depository;
(iv) the Depository may collect its usual and customary fees, charges and
expenses from its Depository Participants; (v) the Trustee shall deal with the
Depository, Depository Participants and indirect participating firms as
representatives of the Certificate Owners of the Book-Entry Certificates for
purposes of exercising the rights of holders under this Agreement, and requests
and directions for and votes of such representatives shall not be deemed to be
inconsistent if they are made with respect to different Certificate Owners; and
(vi) the Trustee may rely and shall be fully protected in relying upon
information furnished by the Depository with respect to its Depository
Participants and furnished by the Depository Participants with respect to
indirect participating firms and persons shown on the books of such indirect
participating firms as direct or indirect Certificate Owners.
All transfers by Certificate Owners of Book-Entry Certificates shall be
made in accordance with the procedures established by the Depository Participant
or brokerage firm representing such Certificate Owner. Each Depository
Participant shall only transfer Book-Entry Certificates of Certificate Owners it
represents or of brokerage firms for which it acts as agent in accordance with
the Depository's normal procedures.
If (x) (i) the Depository or the Depositor advises the Trustee in
writing that the Depository is no longer willing or able to properly discharge
its responsibilities as Depository, and (ii) the Depositor is unable to locate a
qualified successor, (y) the Depositor at its option advises the Trustee in
writing that it elects to terminate the book-entry system through the Depository
or (z) after the occurrence of an Event of Default, Certificate Owners
representing at least 51% of the Certificate Balance of the Book-Entry
Certificates together advise the Trustee and the Depository through the
Depository Participants in writing that the continuation of a book-entry system
through the Depository is no longer in the best interests of the Certificate
Owners, the Trustee shall notify all Certificate Owners, through the Depository,
of the occurrence of any such event and of the availability of definitive,
fully-registered Certificates (the "Definitive Certificates") to Certificate
Owners requesting the same. Upon surrender to the Trustee of the related Class
of Certificates by the Depository or its agent, accompanied by the instructions
from the Depository for registration, the Trustee shall issue the Definitive
Certificates. Neither the Master Servicer, the Depositor nor the Trustee shall
be liable for any delay in delivery of such instruction and each may
conclusively rely on, and shall be protected in relying on, such instructions.
The Master Servicer shall provide the Trustee with an adequate inventory of
certificates to facilitate the issuance and transfer of Definitive Certificates.
Upon the issuance of Definitive Certificates, the Trustee shall recognize the
Holders of the Definitive Certificates as Certificateholders hereunder.
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SECTION 5.03. Mutilated, Destroyed, Lost or Stolen Certificates.
If (a) any mutilated Certificate is surrendered to the Trustee, or the
Trustee receives evidence to its satisfaction of the destruction, loss or theft
of any Certificate and (b) there is delivered to the Master Servicer and the
Trustee such security or indemnity as may be required by them to save each of
them harmless, then, in the absence of notice to the Trustee that such
Certificate has been acquired by a bona fide purchaser, the Trustee shall
execute, countersign and deliver, in exchange for or in lieu of any such
mutilated, destroyed, lost or stolen Certificate, a new Certificate of like
Class, tenor and Percentage Interest. In connection with the issuance of any new
Certificate under this Section 5.03, the Trustee may require the payment of a
sum sufficient to cover any tax or other governmental charge that may be imposed
in relation thereto and any other expenses (including the fees and expenses of
the Trustee) connected therewith. Any replacement Certificate issued pursuant to
this Section 5.03 shall constitute complete and indefeasible evidence of
ownership, as if originally issued, whether or not the lost, stolen or destroyed
Certificate shall be found at any time.
SECTION 5.04. Persons Deemed Owners.
The Master Servicer, the Trustee and any agent of the Master Servicer
or the Trustee may treat the Person in whose name any Certificate is registered
as the owner of such Certificate for the purpose of receiving distributions as
provided in this Agreement and for all other purposes whatsoever, and neither
the Master Servicer, the Trustee nor any agent of the Master Servicer or the
Trustee shall be affected by any notice to the contrary.
SECTION 5.05. Access to List of Certificateholders' Names and
Addresses.
If three or more Certificateholders (a) request such information in
writing from the Trustee, (b) state that such Certificateholders desire to
communicate with other Certificateholders with respect to their rights under
this Agreement or under the Certificates, and (c) provide a copy of the
communication which such Certificateholders propose to transmit, or if the
Depositor or Master Servicer shall request such information in writing from the
Trustee, then the Trustee shall, within ten Business Days after the receipt of
such request, provide the Depositor, the Master Servicer or such
Certificateholders at such recipients' expense the most recent list of the
Certificateholders held by the Trustee, if any. The Depositor and every
Certificateholder, by receiving and holding a Certificate, agree that the
Trustee shall not be held accountable by reason of the disclosure of any such
information as to the list of the Certificateholders hereunder, regardless of
the source from which such information was derived.
SECTION 5.06. Maintenance of Office or Agency.
The Trustee will maintain or cause to be maintained at its expense an
office or offices or agency or agencies in New York City where Certificates may
be surrendered for registration of transfer or exchange. The Trustee initially
designates its affiliate, Bankers Trust Company, Four Xxxxxx Xxxxxx, Xxx Xxxx,
Xxx Xxxx 00000 for such purposes. The Trustee will give prompt written notice to
the Certificateholders of any change in such location of any such office or
agency.
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ARTICLE VI
THE DEPOSITOR AND THE MASTER SERVICER
SECTION 6.01. Respective Liabilities of the Depositor and the Master
Servicer.
The Depositor and the Master Servicer shall each be liable in
accordance herewith only to the extent of the obligations specifically and
respectively imposed upon and undertaken by them herein.
SECTION 6.02. Merger or Consolidation of the Depositor or the Master
Servicer.
The Depositor and the Master Servicer will each keep in full effect its
existence, rights and franchises as a corporation or association under the laws
of the United States or under the laws of one of the states thereof and will
each obtain and preserve its qualification to do business as a foreign
corporation in each jurisdiction in which such qualification is or shall be
necessary to protect the validity and enforceability of this Agreement, or any
of the Mortgage Loans and to perform its respective duties under this Agreement.
Any Person into which the Depositor or the Master Servicer may be
merged or consolidated, or any Person resulting from any merger or consolidation
to which the Depositor or the Master Servicer shall be a party, or any Person
succeeding to the business of the Depositor or the Master Servicer, shall be the
successor of the Depositor or the Master Servicer, as the case may be,
hereunder, without the execution or filing of any paper or any further act on
the part of any of the parties hereto, anything herein to the contrary
notwithstanding; provided, however, that the successor or surviving Person to
the Master Servicer shall be qualified to sell mortgage loans to, and to service
mortgage loans on behalf of, FNMA or FHLMC.
SECTION 6.03. Limitation on Liability of the Depositor, the Seller, the
Master Servicer and Others.
None of the Depositor, the Seller, the Master Servicer or any of the
directors, officers, employees or agents of the Depositor, the Seller or the
Master Servicer shall be under any liability to the Certificateholders for any
action taken or for refraining from the taking of any action in good faith
pursuant to this Agreement, or for errors in judgment; provided, however, that
this provision shall not protect the Depositor, the Seller, the Master Servicer
or any such Person against any breach of representations or warranties made by
it herein or protect the Depositor, the Seller, the Master Servicer or any such
Person from any liability which would otherwise be imposed by reasons of willful
misfeasance, bad faith or gross negligence in the performance of duties or by
reason of reckless disregard of obligations and duties hereunder. The Depositor,
the Seller, the Master Servicer and any director, officer, employee or agent of
the Depositor, the Seller or the Master Servicer may rely in good faith on any
document of any kind prima facie properly executed and submitted by any Person
respecting any matters arising hereunder. The Depositor, the Seller, the Master
Servicer and any director, officer, employee or agent of the Depositor, the
Seller or the Master Servicer shall be indemnified by the Trust Fund and held
harmless against any loss, liability or expense incurred in connection with any
audit, controversy or judicial proceeding relating to a governmental taxing
authority or any legal action relating to this Agreement or the Certificates,
other than any loss, liability or expense related to any specific
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Mortgage Loan or Mortgage Loans (except as any such loss, liability or expense
shall be otherwise reimbursable pursuant to this Agreement) and any loss,
liability or expense incurred by reason of willful misfeasance, bad faith or
gross negligence in the performance of duties hereunder or by reason of reckless
disregard of obligations and duties hereunder. None of the Depositor, the Seller
or the Master Servicer shall be under any obligation to appear in, prosecute or
defend any legal action that is not incidental to its respective duties
hereunder and which in its opinion may involve it in any expense or liability;
provided, however, that any of the Depositor, the Seller or the Master Servicer
may in its discretion undertake any such action that it may deem necessary or
desirable in respect of this Agreement and the rights and duties of the parties
hereto and interests of the Trustee and the Certificateholders hereunder. In
such event, the legal expenses and costs of such action and any liability
resulting therefrom shall be expenses, costs and liabilities of the Trust Fund,
and the Depositor, the Seller and the Master Servicer shall be entitled to be
reimbursed therefor out of the Certificate Account.
SECTION 6.04. Limitation on Resignation of Master Servicer.
The Master Servicer shall not resign from the obligations and duties
hereby imposed on it except (a) upon appointment by the Depositor of a successor
servicer reasonably satisfactory to the Trustee and receipt by the Trustee of a
letter from each Rating Agency that such a resignation and appointment will not
result in a downgrading of the rating of any of the Certificates or (b) upon
determination that its duties hereunder are no longer permissible under
applicable law. Any such determination under clause (b) permitting the
resignation of the Master Servicer shall be evidenced by an Opinion of Counsel
to such effect delivered to the Trustee. No such resignation shall become
effective until the Trustee or a successor master servicer shall have assumed
the Master Servicer's responsibilities, duties, liabilities and obligations
hereunder.
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ARTICLE VII
DEFAULT
SECTION 7.01. Events of Default.
"Event of Default," wherever used herein, means any one of the
following events:
(i) any failure by the Master Servicer to deposit in the
Certificate Account or remit to the Trustee any payment (other
than a payment required to be made under Section 4.01 hereof)
required to be made under the terms of this Agreement, which
failure shall continue unremedied for five days after the date
upon which written notice of such failure shall have been
given to the Master Servicer by the Trustee or the Depositor
or to the Master Servicer and the Trustee by the Holders of
Certificates having not less than 25% of the Voting Rights
evidenced by the Certificates; or
(ii) any failure by the Master Servicer to observe or perform in
any material respect any other of the covenants or agreements
on the part of the Master Servicer contained in this
Agreement, which failure shall continue unremedied for a
period of 60 days after the date on which written notice of
such failure shall have been given to the Master Servicer by
the Trustee or the Depositor, or to the Master Servicer and
the Trustee by the Holders of Certificates evidencing not less
than 25% of the Voting Rights evidenced by the Certificates;
or
(iii) a decree or order of a court or agency or supervisory
authority having jurisdiction in the premises for the
appointment of a receiver, conservator or liquidator in any
insolvency, readjustment of debt, marshalling of assets and
liabilities or similar proceedings, or for the winding-up or
liquidation of its affairs, shall have been entered against
the Master Servicer and such decree or order shall have
remained in force undischarged or unstayed for a period of 60
consecutive days; or
(iv) the Master Servicer shall consent to the appointment of a
receiver, conservator or liquidator in any insolvency,
readjustment of debt, marshalling of assets and liabilities or
similar proceedings of or relating to the Master Servicer or
all or substantially all of the property of the Master
Servicer; or
(v) the Master Servicer shall admit in writing its inability to
pay its debts generally as they become due, file a petition to
take advantage of, or commence a voluntary case under, any
applicable insolvency or reorganization statute, make an
assignment for the benefit of its creditors, or voluntarily
suspend payment of its obligations; or
(vi) so long as the Master Servicer is the Seller, any failure by
the Seller to observe or perform in any material respect any
other of the covenants or agreements on the part of the Seller
contained in this Agreement, which failure shall continue
unremedied for a period of 60 days after the date on which
written notice of such failure shall have been given to the
Seller by the Trustee or the Depositor, or to the
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Seller and the Trustee by the Holders of Certificates
evidencing not less than 25% of the Voting Rights evidenced by
the Certificates; or
(vii) any failure of the Master Servicer to make any Advance in the
manner and at the time required to be made pursuant to Section
4.01 which continues unremedied for a period of one Business
Day after the date of such failure.
If an Event of Default described in clauses (i) to (vi) of this Section
shall occur, then, and in each and every such case, so long as such Event of
Default shall not have been remedied, the Trustee may, or at the direction of
the Holders of Certificates evidencing not less than 51% of the Voting Rights
evidenced by the Certificates, the Trustee shall by notice in writing to the
Master Servicer (with a copy to each Rating Agency), terminate all of the rights
and obligations of the Master Servicer under this Agreement and in and to the
Mortgage Loans and the proceeds thereof, other than its rights as a
Certificateholder hereunder. If an Event of Default described in clause (vii)
hereof shall occur, the Trustee shall, by notice in writing to the Master
Servicer and the Depositor, terminate all of the rights and obligations of the
Master Servicer under this Agreement and in and to the Mortgage Loans and the
proceeds thereof, other than its rights as a Certificateholder hereunder. On and
after the receipt by the Master Servicer of such written notice, all authority
and power of the Master Servicer hereunder, whether with respect to the Mortgage
Loans or otherwise, shall pass to and be vested in the Trustee. The Trustee
shall thereupon make any Advance described in clause (vii) hereof subject to
Section 3.04 hereof. The Trustee is hereby authorized and empowered to execute
and deliver, on behalf of the Master Servicer, as attorney-in-fact or otherwise,
any and all documents and other instruments, and to do or accomplish all other
acts or things necessary or appropriate to effect the purposes of such notice of
termination, whether to complete the transfer and endorsement or assignment of
the Mortgage Loans and related documents, or otherwise. Unless expressly
provided in such written notice, no such termination shall affect any obligation
of the Master Servicer to pay amounts owed pursuant to Article VIII. The Master
Servicer agrees to cooperate with the Trustee in effecting the termination of
the Master Servicer's responsibilities and rights hereunder, including, without
limitation, the transfer to the Trustee of all cash amounts which shall at the
time be credited to the Certificate Account, or thereafter be received with
respect to the Mortgage Loans.
Notwithstanding any termination of the activities of the Master
Servicer hereunder, the Master Servicer shall be entitled to receive, out of any
late collection of a Scheduled Payment on a Mortgage Loan which was due prior to
the notice terminating such Master Servicer's rights and obligations as Master
Servicer hereunder and received after such notice, that portion thereof to which
such Master Servicer would have been entitled pursuant to Sections 3.08(a)(i)
through (viii), and any other amounts payable to such Master Servicer hereunder
the entitlement to which arose prior to the termination of its activities
hereunder.
SECTION 7.02. Trustee to Act; Appointment of Successor.
On and after the time the Master Servicer receives a notice of
termination pursuant to Section 7.01 hereof, the Trustee shall, subject to and
to the extent provided in Section 3.04, be the successor to the Master Servicer
in its capacity as master servicer under this Agreement and the transactions set
forth or provided for herein and shall be subject to all the responsibilities,
duties and liabilities relating thereto placed on the Master Servicer by the
terms and provisions hereof and applicable law including the obligation to make
Advances pursuant to Section 4.01. As compensation
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therefor, the Trustee shall be entitled to all funds relating to the Mortgage
Loans that the Master Servicer would have been entitled to charge to the
Certificate Account or Distribution Account if the Master Servicer had continued
to act hereunder. Notwithstanding the foregoing, if the Trustee has become the
successor to the Master Servicer in accordance with Section 7.01 hereof, the
Trustee may, if it shall be unwilling to so act, or shall, if it is prohibited
by applicable law from making Advances pursuant to Section 4.01 hereof or if it
is otherwise unable to so act, appoint, or petition a court of competent
jurisdiction to appoint, any established mortgage loan servicing institution the
appointment of which does not adversely affect the then current rating of the
Certificates by each Rating Agency as the successor to the Master Servicer
hereunder in the assumption of all or any part of the responsibilities, duties
or liabilities of the Master Servicer hereunder. Any successor to the Master
Servicer shall be an institution which is a FNMA and FHLMC approved
seller/servicer in good standing, which has a net worth of at least $15,000,000,
and which is willing to service the Mortgage Loans and executes and delivers to
the Depositor and the Trustee an agreement accepting such delegation and
assignment, which contains an assumption by such Person of the rights, powers,
duties, responsibilities, obligations and liabilities of the Master Servicer
(other than liabilities of the Master Servicer under Section 6.03 hereof
incurred prior to termination of the Master Servicer under Section 7.01), with
like effect as if originally named as a party to this Agreement; and provided
further that each Rating Agency acknowledges that its rating of the Certificates
in effect immediately prior to such assignment and delegation will not be
qualified or reduced as a result of such assignment and delegation. Pending
appointment of a successor to the Master Servicer hereunder, the Trustee, unless
the Trustee is prohibited by law from so acting, shall, subject to Section 3.04
hereof, act in such capacity as hereinabove provided. In connection with such
appointment and assumption, the Trustee may make such arrangements for the
compensation of such successor out of payments on Mortgage Loans as it and such
successor shall agree; provided, however, that no such compensation shall be in
excess of the servicing compensation permitted the Master Servicer hereunder.
The Trustee and such successor shall take such action, consistent with this
Agreement, as shall be necessary to effectuate any such succession. Neither the
Trustee nor any other successor master servicer shall be deemed to be in default
hereunder by reason of any failure to make, or any delay in making, any
distribution hereunder or any portion thereof or any failure to perform, or any
delay in performing, any duties or responsibilities hereunder, in either case
caused by the failure of the Master Servicer to deliver or provide, or any delay
in delivering or providing, any cash, information, documents or records to it.
Any successor to the Master Servicer as master servicer shall give
notice to the Mortgagors of such change of servicer and shall, during the term
of its service as master servicer maintain in force the policy or policies that
the Master Servicer is required to maintain pursuant to Section 6.05.
SECTION 7.03. Notification to Certificateholders.
(a) Upon any termination of or appointment of a successor to the Master
Servicer, the Trustee shall give prompt written notice thereof to
Certificateholders and to each Rating Agency.
(b) Within 60 days after the occurrence of any Event of Default, the
Trustee shall transmit by mail to all Certificateholders notice of each such
Event of Default hereunder known to the Trustee, unless such Event of Default
shall have been cured or waived.
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ARTICLE VIII
CONCERNING THE TRUSTEE
SECTION 8.01. Duties of Trustee.
The Trustee, prior to the occurrence of an Event of Default and after
the curing of all Events of Default that may have occurred, shall undertake to
perform such duties and only such duties as are specifically set forth in this
Agreement. In case an Event of Default has occurred and remains uncured, the
Trustee shall exercise such of the rights and powers vested in it by this
Agreement, and use the same degree of care and skill in their exercise as a
prudent person would exercise or use under the circumstances in the conduct of
such person's own affairs.
The Trustee, upon receipt of 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 this Agreement shall examine them to determine whether they are in the form
required by this Agreement; provided, however, that the Trustee shall not be
responsible for the accuracy or content of any such resolution, certificate,
statement, opinion, report, document, order or other instrument.
No provision of this Agreement shall be construed to relieve the
Trustee from liability for its own negligent action, its own negligent failure
to act or its own willful misconduct; provided, however, that:
(i) unless an Event of Default known to the Trustee shall have
occurred and be continuing, the duties and obligations of the
Trustee shall be determined solely by the express provisions
of this Agreement, the Trustee shall not be liable except for
the performance of such duties and obligations as are
specifically set forth in this Agreement, no implied covenants
or obligations shall be read into this Agreement against the
Trustee and the Trustee may conclusively rely, as to the truth
of the statements and the correctness of the opinions
expressed therein, upon any certificates or opinions furnished
to the Trustee and conforming to the requirements of this
Agreement which it believed in good faith to be genuine and to
have been duly executed by the proper authorities respecting
any matters arising hereunder;
(ii) the Trustee shall not be liable for an error of judgment made
in good faith by a Responsible Officer or Responsible Officers
of the Trustee, unless it shall be finally proven that the
Trustee was negligent in ascertaining the pertinent facts; and
(iii) the Trustee shall not be liable with respect to any action
taken, suffered or omitted to be taken by it in good faith in
accordance with the direction of Holders of Certificates
evidencing not less than 25% of the Voting Rights of
Certificates relating 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 this Agreement.
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SECTION 8.02. Certain Matters Affecting the Trustee.
Except as otherwise provided in Section 8.01:
(i) the Trustee may request and rely upon and shall be protected
in acting or refraining from acting upon any resolution,
Officers' Certificate, certificate of auditors or any other
certificate, statement, instrument, opinion, report, notice,
request, consent, order, appraisal, bond or other paper or
document believed by it to be genuine and to have been signed
or presented by the proper party or parties and the Trustee
shall have no responsibility to ascertain or confirm the
genuineness of any signature of any such party or parties;
(ii) the Trustee may consult with counsel, financial advisers or
accountants and the advice of any such counsel, financial
advisers or accountants and any Opinion of Counsel shall be
full and complete authorization and protection in respect of
any action taken or suffered or omitted by it hereunder in
good faith and in accordance with such Opinion of Counsel;
(iii) the Trustee shall not be liable for any action taken, suffered
or omitted by it in good faith and believed by it to be
authorized or within the discretion or rights or powers
conferred upon it by this Agreement;
(iv) the Trustee shall not be bound to make any investigation into
the facts or matters stated in any resolution, certificate,
statement, instrument, opinion, report, notice, request,
consent, order, approval, bond or other paper or document,
unless requested in writing so to do by Holders of
Certificates evidencing not less than 25% of the Voting Rights
allocated to each Class of Certificates;
(v) the Trustee may execute any of the trusts or powers hereunder
or perform any duties hereunder either directly or by or
through agents, accountants or attorneys;
(vi) the Trustee shall not be required to risk or expend its own
funds or otherwise incur any financial liability in the
performance of any of its duties or in the exercise of any of
its rights or powers hereunder if it shall have reasonable
grounds for believing that repayment of such funds or adequate
indemnity against such risk or liability is not assured to it;
(vii) the Trustee shall not be liable for any loss on any investment
of funds pursuant to this Agreement (other than as issuer of
the investment security);
(viii) the Trustee shall not be deemed to have knowledge of an Event
of Default until a Responsible Officer of the Trustee shall
have received written notice thereof; and
(ix) the Trustee shall be under no obligation to exercise any of
the trusts, rights or powers vested in it by this Agreement or
to institute, conduct or defend any litigation hereunder or in
relation hereto at the request, order or direction of any of
the Certificateholders, pursuant to the provisions of this
Agreement, unless such
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Certificateholders shall have offered to the Trustee
reasonable security or indemnity satisfactory to the Trustee
against the costs, expenses and liabilities which may be
incurred therein or thereby.
SECTION 8.03. Trustee Not Liable for Certificates or Mortgage Loans.
The recitals contained herein and in the Certificates shall be taken as
the statements of the Depositor or the Seller, as the case may be, and the
Trustee assumes no responsibility for their correctness. The Trustee makes no
representations as to the validity or sufficiency of this Agreement or of the
Certificates or of any Mortgage Loan or related document other than with respect
to the Trustee's execution and counter-signature of the Certificates. The
Trustee shall not be accountable for the use or application by the Depositor or
the Master Servicer of any funds paid to the Depositor or the Master Servicer in
respect of the Mortgage Loans or deposited in or withdrawn from the Certificate
Account by the Depositor or the Master Servicer.
SECTION 8.04. Trustee May Own Certificates.
The Trustee in its individual or any other capacity may become the
owner or pledgee of Certificates with the same rights as it would have if it
were not the Trustee.
SECTION 8.05. Trustee's Fees and Expenses.
The Master Servicer agrees to pay the Trustee Fee to the Trustee as
compensation for its activities hereunder. The Trustee and any director,
officer, employee or agent of the Trustee shall be indemnified by the Master
Servicer and held harmless against any loss, liability or expense (including
reasonable attorney's fees) (i) incurred in connection with any claim or legal
action relating to (a) this Agreement, (b) the Certificates or (c) in connection
with the performance of any of the Trustee's duties hereunder, other than any
loss, liability or expense incurred by reason of willful misfeasance, bad faith
or negligence in the performance of any of the Trustee's duties hereunder and
(ii) resulting from any error in any tax or information return prepared by the
Master Servicer. Such indemnity shall survive the termination of this Agreement
or the resignation or removal of the Trustee hereunder. Without limiting the
foregoing, the Master Servicer covenants and agrees, except as otherwise agreed
upon in writing by the Depositor and the Trustee, and except for any such
expense, disbursement or advance as may arise from the Trustee's negligence, bad
faith or willful misconduct, to pay or reimburse the Trustee, for all reasonable
expenses, disbursements and advances incurred or made by the Trustee in
accordance with any of the provisions of this Agreement with respect to: (A) the
reasonable compensation and the expenses and disbursements of its counsel not
associated with the closing of the issuance of the Certificates, (B) the
reasonable compensation, expenses and disbursements of any accountant, engineer
or appraiser that is not regularly employed by the Trustee, to the extent that
the Trustee must engage such persons to perform acts or services hereunder and
(C) printing and engraving expenses in connection with preparing any Definitive
Certificates. Except as otherwise provided herein, the Trustee shall not be
entitled to payment or reimbursement for any routine ongoing expenses incurred
by the Trustee in the ordinary course of its duties as Trustee or Tax Matters
Person hereunder or for any other expenses.
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SECTION 8.06. Eligibility Requirements for Trustee.
The Trustee hereunder shall at all times be a corporation or
association organized and doing business under the laws of a state or the United
States of America, authorized under such laws to exercise corporate trust
powers, having a combined capital and surplus of at least $50,000,000, subject
to supervision or examination by federal or state authority and with a credit
rating which would not cause either of the Rating Agencies to reduce their
respective then current ratings of the Certificates (or having provided such
security from time to time as is sufficient to avoid such reduction). If such
corporation or association publishes reports of condition at least annually,
pursuant to law or to the requirements of the aforesaid supervising or examining
authority, then for the purposes of this Section 8.06 the combined capital and
surplus of such corporation or association shall be deemed to be its combined
capital and surplus as set forth in its most recent report of condition so
published. In case at any time the Trustee shall cease to be eligible in
accordance with the provisions of this Section 8.06, the Trustee shall resign
immediately in the manner and with the effect specified in Section 8.07 hereof.
The entity serving as Trustee may have normal banking and trust relationships
with the Depositor and its affiliates or the Master Servicer and its affiliates;
provided, however, that such entity cannot be an affiliate of the Master
Servicer other than the Trustee in its role as successor to the Master Servicer.
SECTION 8.07. Resignation and Removal of Trustee.
The Trustee may at any time resign and be discharged from the trusts
hereby created by giving written notice of resignation to the Depositor and the
Master Servicer and each Rating Agency not less than 60 days before the date
specified in such notice when, subject to Section 8.08, such resignation is to
take effect, and acceptance by a successor trustee in accordance with Section
8.08 meeting the qualifications set forth in Section 8.06. If no successor
trustee meeting such qualifications shall have been so appointed and have
accepted appointment within 30 days after the giving of such notice or
resignation, the resigning Trustee may petition any court of competent
jurisdiction for the appointment of a successor trustee.
If at any time the Trustee shall cease to be eligible in accordance
with the provisions of Section 8.06 hereof and shall fail to resign after
written request thereto by the Depositor, or if at any time the Trustee shall
become incapable of acting, or shall be adjudged as bankrupt or insolvent, or a
receiver of the Trustee or of its property shall be appointed, or any public
officer shall take charge or control of the Trustee or of its property or
affairs for the purpose of rehabilitation, conservation or liquidation, or a tax
is imposed with respect to the Trust Fund by any state in which the Trustee or
the Trust Fund is located and the imposition of such tax would be avoided by the
appointment of a different trustee, then the Depositor or the Master Servicer
may remove the Trustee and appoint a successor trustee by written instrument, in
triplicate, one copy of which instrument shall be delivered to the Trustee, one
copy of which shall be delivered to the Master Servicer and one copy to the
successor trustee.
The Holders of Certificates entitled to at least 51% of the Voting
Rights may at any time remove the Trustee and appoint a successor trustee by
written instrument or instruments, in triplicate, signed by such Holders or
their attorneys-in-fact duly authorized, one complete set of which instruments
shall be delivered by the successor Trustee to the Master Servicer, one complete
set to the Trustee so removed and one complete set to the successor so
appointed. Notice of any removal of the Trustee shall be given to each Rating
Agency by the Successor Trustee.
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Any resignation or removal of the Trustee and appointment of a
successor trustee pursuant to any of the provisions of this Section 8.07 shall
become effective upon acceptance of appointment by the successor trustee as
provided in Section 8.08 hereof.
SECTION 8.08. Successor Trustee.
Any successor trustee appointed as provided in Section 8.07 hereof
shall execute, acknowledge and deliver to the Depositor and to its predecessor
trustee and the Master Servicer an instrument accepting such appointment
hereunder 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 hereunder, with the like effect as if originally
named as trustee herein. The Depositor, the Master Servicer and the predecessor
trustee shall execute and deliver such instruments and do such other things as
may reasonably be required for more fully and certainly vesting and confirming
in the successor trustee all such rights, powers, duties, and obligations.
No successor trustee shall accept appointment as provided in this
Section 8.08 unless at the time of such acceptance such successor trustee shall
be eligible under the provisions of Section 8.06 hereof and its appointment
shall not adversely affect the then current rating of the Certificates.
Upon acceptance of appointment by a successor trustee as provided in
this Section 8.08, the Depositor shall mail notice of the succession of such
trustee hereunder to all Holders of Certificates. If the Depositor fails to mail
such notice within 10 days after acceptance of appointment by the successor
trustee, the successor trustee shall cause such notice to be mailed at the
expense of the Depositor.
SECTION 8.09. Merger or Consolidation of Trustee.
Any corporation into which the 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 the Trustee shall be a party, or any
corporation succeeding to the business of the Trustee, shall be the successor of
the Trustee hereunder, provided that such corporation shall be eligible under
the provisions of Section 8.06 hereof without the execution or filing of any
paper or further act on the part of any of the parties hereto, anything herein
to the contrary notwithstanding.
SECTION 8.10. Appointment of Co-Trustee or Separate Trustee.
Notwithstanding any other provisions of this Agreement, at any time,
for the purpose of meeting any legal requirements of any jurisdiction in which
any part of the Trust Fund or property securing any Mortgage Note may at the
time be located, the Master Servicer and the Trustee acting jointly shall have
the power and shall execute and deliver all instruments to appoint one or more
Persons approved by the Trustee to act as co-trustee or co-trustees jointly with
the Trustee, or separate trustee or separate trustees, of all or any part of the
Trust Fund, and to vest in such Person or Persons, in such capacity and for the
benefit of the Certificateholders, such title to the Trust Fund or any part
thereof, whichever is applicable, and, subject to the other provisions of this
Section 8.10, such powers, duties, obligations, rights and trusts as the Master
Servicer and the Trustee may consider necessary or desirable. If the Master
Servicer shall not have joined in such appointment within 15 days after the
receipt by it of a request to do so, or in the case an Event of Default shall
have occurred and be continuing, the Trustee
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alone shall have the power to make such appointment. No co-trustee or separate
trustee hereunder shall be required to meet the terms of eligibility as a
successor trustee under Section 8.06 and no notice to Certificateholders of the
appointment of any co-trustee or separate trustee shall be required under
Section 8.08.
Every separate trustee and co-trustee shall, to the extent permitted by
law, be appointed and act subject to the following provisions and conditions:
(i) To the extent necessary to effectuate the purposes of this
Section 8.10, all rights, powers, duties and obligations
conferred or imposed upon the Trustee, except for the
obligation of the Trustee under this Agreement to advance
funds on behalf of the Master Servicer, shall be conferred or
imposed upon and exercised or performed by the Trustee and
such separate trustee or co-trustee jointly (it being
understood that such separate trustee or co-trustee is not
authorized to act separately without the Trustee joining in
such act), except to the extent that under any law of any
jurisdiction in which any particular act or acts are to be
performed (whether as Trustee hereunder or as successor to the
Master Servicer hereunder), the Trustee shall be incompetent
or unqualified to perform such act or acts, in which event
such rights, powers, duties and obligations (including the
holding of title to the applicable Trust Fund or any portion
thereof in any such jurisdiction) shall be exercised and
performed singly by such separate trustee or co-trustee, but
solely at the direction of the Trustee;
(ii) No trustee hereunder shall be held personally liable by reason
of any act or omission of any other trustee hereunder and such
appointment shall not, and shall not be deemed to, constitute
any such separate trustee or co-trustee as agent of the
Trustee;
(iii) The Trustee may at any time accept the resignation of or
remove any separate trustee or co-trustee; and
(iv) The Master Servicer, and not the Trustee, shall be liable for
the payment of reasonable compensation, reimbursement and
indemnification to any such separate trustee or co-trustee.
Any notice, request or other writing given to the Trustee shall be
deemed to have been given to each of the separate trustees and co-trustees, when
and as effectively as if given to each of them. Every instrument appointing any
separate trustee or co-trustee shall refer to this Agreement and the conditions
of this Article VIII. Each separate trustee and co-trustee, upon its acceptance
of the trusts conferred, shall be vested with the estates or property specified
in its instrument of appointment, either jointly with the Trustee or separately,
as may be provided therein, subject to all the provisions of this Agreement,
specifically including every provision of this Agreement relating to the conduct
of, affecting the liability of, or affording protection to, the Trustee. Every
such instrument shall be filed with the Trustee and a copy thereof given to the
Master Servicer and the Depositor.
Any separate trustee or co-trustee may, at any time, constitute the
Trustee its agent or attorney-in-fact, with full power and authority, to the
extent not prohibited by law, to do any lawful act
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under or in respect of this Agreement on its behalf and in its name. If any
separate trustee or co-trustee shall die, become incapable of acting, resign or
be removed, all of its estates, properties, rights, remedies and trusts shall
vest in and be exercised by the Trustee, to the extent permitted by law, without
the appointment of a new or successor trustee.
SECTION 8.11. Tax Matters.
It is intended that the assets with respect to which any REMIC election
is to be made, as set forth in the Preliminary Statement, shall constitute, and
that the conduct of matters relating to such assets shall be such as to qualify
such assets as, a "real estate mortgage investment conduit" as defined in and in
accordance with the REMIC Provisions. In furtherance of such intention, the
Trustee covenants and agrees that it shall act as agent (and the Trustee is
hereby appointed to act as agent) on behalf of any such REMIC and that in such
capacity it shall: (a) prepare and file, or cause to be prepared and filed, in a
timely manner, a U.S. Real Estate Mortgage Investment Conduit Income Tax Return
(Form 1066 or any successor form adopted by the Internal Revenue Service) and
prepare and file or cause to be prepared and filed with the Internal Revenue
Service and applicable state or local tax authorities income tax or information
returns for each taxable year with respect to any such REMIC, containing such
information and at the times and in the manner as may be required by the Code or
state or local tax laws, regulations, or rules, and furnish or cause to be
furnished to Certificateholders the schedules, statements or information at such
times and in such manner as may be required thereby; (b) within thirty days of
the Closing Date, furnish or cause to be furnished to the Internal Revenue
Service, on Forms 8811 or as otherwise may be required by the Code, the name,
title, address, and telephone number of the person that the holders of the
Certificates may contact for tax information relating thereto, together with
such additional information as may be required by such Form, and update such
information at the time or times in the manner required by the Code; (c) make or
cause to be made elections that such assets be treated as a REMIC on the federal
tax return for its first taxable year (and, if necessary, under applicable state
law); (d) prepare and forward, or cause to be prepared and forwarded, to the
Certificateholders and to the Internal Revenue Service and, if necessary, state
tax authorities, all information returns and reports as and when required to be
provided to them in accordance with the REMIC Provisions, including without
limitation, the calculation of any original issue discount using the Prepayment
Assumption (as defined in the Prospectus Supplement); (e) provide information
necessary for the computation of tax imposed on the transfer of a Residual
Certificate to a Person that is not a Permitted Transferee, or an agent
(including a broker, nominee or other middleman) of a Non-Permitted Transferee,
or a pass-through entity in which a Non-Permitted Transferee is the record
holder of an interest (the reasonable cost of computing and furnishing such
information may be charged to the Person liable for such tax); (f) to the extent
that they are under its control conduct matters relating to such assets at all
times that any Certificates are outstanding so as to maintain the status as a
REMIC under the REMIC Provisions; (g) not knowingly or intentionally take any
action or omit to take any action that would cause the termination of the REMIC
status; (h) pay, from the sources specified in the last paragraph of this
Section 8.11, the amount of any federal or state tax, including prohibited
transaction taxes as described below, imposed on any such REMIC prior to its
termination when and as the same shall be due and payable (but such obligation
shall not prevent the Trustee or any other appropriate Person from contesting
any such tax in appropriate proceedings and shall not prevent the Trustee from
withholding payment of such tax, if permitted by law, pending the outcome of
such proceedings); (i) ensure that federal, state or local income tax or
information returns shall be signed by the Trustee or such other person as may
be required to sign such returns by the Code or state or local laws, regulations
or rules; (j) maintain records relating to any such REMIC, including but not
limited to the income, expenses, assets and liabilities thereof and the fair
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market value and adjusted basis of the assets determined at such intervals as
may be required by the Code, as may be necessary to prepare the foregoing
returns, schedules, statements or information; and (k) as and when necessary and
appropriate, represent any such REMIC in any administrative or judicial
proceedings relating to an examination or audit by any governmental taxing
authority, request an administrative adjustment as to any taxable year of any
such REMIC, enter into settlement agreements with any governmental taxing
agency, extend any statute of limitations relating to any tax item of any such
REMIC, and otherwise act on behalf of any such REMIC in relation to any tax
matter or controversy involving it.
In order to enable the Trustee to perform its duties as set forth
herein, the Depositor shall provide, or cause to be provided, to the Trustee
within ten (10) days after the Closing Date all information or data that the
Trustee requests in writing and determines to be relevant for tax purposes to
the valuations and offering prices of the Certificates, including, without
limitation, the price, yield, prepayment assumption and projected cash flows of
the Certificates and the Mortgage Loans. Thereafter, the Depositor shall provide
to the Trustee promptly upon written request therefor, any such additional
information or data that the Trustee may, from time to time, reasonably request
in order to enable the Trustee to perform its duties as set forth herein. The
Depositor hereby indemnifies the Trustee for any losses, liabilities, damages,
claims or expenses of the Trustee arising from any errors or miscalculations of
the Trustee that result from any failure of the Depositor to provide, or to
cause to be provided, accurate information or data to the Trustee on a timely
basis.
In the event that any tax is imposed on "prohibited transactions" of
the REMIC as defined in Section 860F(a)(2) of the Code, on the "net income from
foreclosure property" of the REMIC as defined in Section 860G(c) of the Code, on
any contribution to the REMIC after the Startup Day pursuant to Section 860G(d)
of the Code, or any other tax is imposed, including, without limitation, any
minimum tax imposed upon the REMIC pursuant to Sections 23153 and 24874 of the
California Revenue and Taxation Code, if not paid as otherwise provided for
herein, such tax shall be paid by (i) the Trustee, if any such other tax arises
out of or results from a breach by the Trustee of any of its obligations under
this Agreement, (ii) the Master Servicer, in the case of any such minimum tax,
or if such tax arises out of or results from a breach by the Master Servicer or
Seller of any of their obligations under this Agreement, (iii) the Seller, if
any such tax arises out of or results from the Seller's obligation to repurchase
a Mortgage Loan pursuant to Section 2.02 or 2.03 or (iv) in all other cases, or
in the event that the Trustee, the Master Servicer or the Seller fails to honor
its obligations under the preceding clauses (i),(ii) or (iii), any such tax will
be paid with amounts otherwise to be distributed to the Certificateholders, as
provided in Section 3.08(b).
SECTION 8.12. Periodic Filings.
Pursuant to written instructions from the Depositor, the Trustee shall
prepare, execute and file all periodic reports required under the Securities
Exchange Act of 1934 in connection with this Agreement (other than any such
reports due as a result of the original issuance of the Certificates). In
connection with the preparation and filing of such periodic reports, the
Depositor and the Master Servicer shall timely provide to the Trustee all
material information available to them which is required to be included in such
reports and not known to them to be in the possession of the Trustee and such
other information as the Trustee reasonably may request from either of them and
otherwise reasonably shall cooperate with the Trustee. The Trustee shall have no
liability with respect to any failure to properly
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prepare or file such periodic reports resulting from or relating to the
Trustee's inability or failure to obtain any information not resulting from its
own negligence or willful misconduct.
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ARTICLE IX
TERMINATION
SECTION 9.01. Termination upon Liquidation or Purchase of all Mortgage
Loans.
Subject to Section 9.03, the obligations and responsibilities of the
Depositor, the Master Servicer and the Trustee created hereby with respect to
the Trust Fund shall terminate upon the earlier of (a) the purchase by the
Master Servicer of all Mortgage Loans (and REO Properties) remaining in the
Trust Fund at the price equal to the sum of (i) 100% of the Stated Principal
Balance of each Mortgage Loan plus one month's accrued interest thereon at the
applicable Net Mortgage Rate and (ii) the lesser of (x) the appraised value of
any REO Property as determined by the higher of two appraisals completed by two
independent appraisers selected by the Master Servicer at the expense of the
Master Servicer and (y) the Stated Principal Balance of each Mortgage Loan
related to any REO Property, in each case plus accrued and unpaid interest
thereon at the applicable Adjusted Mortgage Rate and (b) the later of (i) the
maturity or other liquidation (or any Advance with respect thereto) of the last
Mortgage Loan remaining in the Trust Fund and the disposition of all REO
Property and (ii) the distribution to Certificateholders of all amounts required
to be distributed to them pursuant to this Agreement. In no event shall the
trusts created hereby continue beyond the earlier of (i) the expiration of 21
years from the death of the survivor of the descendants of Xxxxxx X. Xxxxxxx,
the late Ambassador of the United States to the Court of St. James's, living on
the date hereof and (ii) the Latest Possible Maturity Date. The right to
purchase all Mortgage Loans and REO Properties pursuant to clause (a) above
shall be conditioned upon the Pool Principal Balance, at the time of any such
repurchase, aggregating less than ten percent of the aggregate Cut-off Date
Principal Balance of the Mortgage Loans.
SECTION 9.02. Special Termination.
If the Master Servicer does not exercise its option to purchase the
Mortgage Loans (and REO Properties) within ninety days after such option may be
exercised (the "Auction Commencement Date"), during the two Due Periods
beginning with the Due Period during which the Auction Commencement Date occurs
(the "Solicitation Period"), the Trustee shall solicit competitive bids for the
purchase of the Mortgage Loans (and REO Properties). Such solicitation shall be
conducted substantially in the manner described in Exhibit P hereto. In the
event that satisfactory bids are received as described below and in Exhibit P,
the proceeds of the sale of such assets shall be distributed to the
Certificateholders on the first Distribution Date after the Solicitation Period
(the "Auction Payment Date"). The Trustee shall solicit bids from no fewer than
two prospective purchasers that are considered at the time to be competitive
participants in the mortgage loan market ("Qualified Bidders").
If the Trustee receives bids from no fewer than two Qualified Bidders
and the highest bid is received from a Qualified Bidder and is at least equal to
the greater of (i) the Pool Principal Balance at the end of the Due Period
relating to the Auction Payment Date together with interest at the related
weighted average Net Mortgage Rate through the end of such Due Period or (ii) an
amount that, together with amounts on deposit in the Certificate Account that
would constitute Available Funds for the Auction Payment Date, would result in
proceeds sufficient to distribute the sum of the aggregate Class Certificate
Balances of the Offered Certificates, together with one month's interest thereon
at the applicable Pass-Through Rates plus the amount of any related Interest
Carryover Amounts, the Trustee shall sell and assign such assets either (i) at
the Master Servicer's option, to the Master Servicer at the price bid by the
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highest bidder, or (ii) if the Master Servicer declines to exercise such option
to the highest Qualified Bidder and the Trustee shall redeem the Certificates
from the proceeds of such sale.
If the conditions described above and in Exhibit P are not met, the
Trustee shall decline to consummate such sale. In addition, the Trustee shall
decline to consummate such sale unless it receives an Opinion of Counsel from
the Master Servicer to the effect that such sale will give rise neither to any
prohibited transactions tax under Section 860F(a)(1) of the Code, nor to any tax
on contributions to any REMIC hereunder after the Startup date under Section
860c(d)(1) of the Code. Such opinion will be delivered at the expense of the
Master Servicer as described in Section 9.04(a)(1) below. In the event such sale
is not consummated in accordance with the foregoing, the Trustee shall not
solicit any further bids or otherwise negotiate any further sale of such assets.
The Trustee will be reimbursed by the highest Qualified Bidder for any
fees and expenses (other than fees for the issuance of the Opinion of Counsel
which shall be borne by the Master Servicer) it incurs in connection with this
Section. In the event the Trustee is not so reimbursed by the highest Qualified
Bidder or the Auction Termination does not take place, the Depositor will
reimburse the Trustee for such fees and expenses.
SECTION 9.03. Final Distribution on the Certificates.
If on any Determination Date, the Master Servicer determines that there
are no Outstanding Mortgage Loans and no other funds or assets in the Trust Fund
other than the funds in the Certificate Account, the Master Servicer shall
direct the Trustee promptly to send a final distribution notice to each
Certificateholder. If the Master Servicer elects to terminate the Trust Fund
pursuant to clause (a) of Section 9.01, at least 20 days prior to the date
notice is to be mailed to the affected Certificateholders, the Master Servicer
shall notify the Depositor and the Trustee of the date the Master Servicer
intends to terminate the Trust Fund and of the applicable repurchase price of
the Mortgage Loans and REO Properties.
Notice of any termination of the Trust Fund, specifying the
Distribution Date on which Certificateholders may surrender their Certificates
for payment of the final distribution and cancellation, shall be given to the
extent reasonably practicable by the Trustee by letter to Certificateholders
mailed not earlier than the 15th day and no later than the 10th day of the month
next preceding the month of such final distribution. Any such notice shall
specify (a) the Distribution Date upon which final distribution on the
Certificates will be made upon presentation and surrender of Certificates at the
office therein designated, (b) the amount of such final distribution, (c) the
location of the office or agency at which such presentation and surrender must
be made, and (d) that the Record Date otherwise applicable to such Distribution
Date is not applicable, distributions being made only upon presentation and
surrender of the Certificates at the office therein specified. The Master
Servicer will give such notice to each Rating Agency at the time such notice is
given to Certificateholders.
In the event such notice is given, the Master Servicer shall cause all
funds in the Certificate Account to be remitted to the Trustee for deposit in
the Distribution Account on the Business Day prior to the applicable
Distribution Date in an amount equal to the final distribution in respect of the
Certificates. Upon such final deposit with respect to the Trust Fund and the
receipt by the Trustee of a Request for Release therefor, the Trustee shall
promptly release to the Master Servicer the Mortgage Files for the Mortgage
Loans.
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Upon presentation and surrender of the Certificates, the Trustee shall
cause to be distributed to the Certificateholders of each Class, in the order
set forth in Section 4.02 hereof, on the final Distribution Date, in proportion
to their respective Percentage Interests, with respect to Certificateholders of
the same Class, an amount equal to (i) as to each Class of Regular Certificates,
the Certificate Balance thereof plus the Interest Distribution Amount and (ii)
as to the Residual Certificates, the amount, if any, which remains on deposit in
the Distribution Account (other than the amounts retained to meet claims) after
application pursuant to clause (i) above.
In the event that any affected Certificateholders shall not surrender
Certificates for cancellation within six months after the date specified in the
above mentioned written notice, the Trustee shall give a second written notice
to the remaining Certificateholders to surrender their Certificates for
cancellation and receive the final distribution with respect thereto. If within
six months after the second notice all the applicable Certificates shall not
have been surrendered for cancellation, the Trustee may take appropriate steps,
or may appoint an agent to take appropriate steps, to contact the remaining
Certificateholders concerning surrender of their Certificates, and the cost
thereof shall be paid out of the funds and other assets which remain a part of
the Trust Fund. If within one year after the second notice all Certificates
shall not have been surrendered for cancellation, the Class R Certificateholders
shall be entitled to all unclaimed funds and other assets of the Trust Fund
which remain subject hereto.
SECTION 9.04. Additional Termination Requirements.
(a) In the event the Master Servicer exercises its purchase option as
provided in Section 9.01, the Trust Fund shall be terminated in accordance with
the following additional requirements, unless the Trustee has been supplied with
an Opinion of Counsel, at the expense of the Master Servicer, to the effect that
the failure to comply with the requirements of this Section 9.04 will not (i)
result in the imposition of taxes on "prohibited transactions" on any REMIC as
defined in section 860F of the Code, or (ii) cause any REMIC to fail to qualify
as a REMIC at any time that any Certificates are outstanding:
(1) Within 90 days prior to the final Distribution Date set forth in
the notice given by the Master Servicer under Section 9.03, the Master
Servicer shall prepare and the Trustee, at the expense of the "tax matters
person," shall adopt a plan of complete liquidation within the meaning of
section 860F(a)(4) of the Code which, as evidenced by an Opinion of Counsel
(which opinion shall not be an expense of the Trustee or the Tax Matters
Person), meets the requirements of a qualified liquidation; and
(2) Within 90 days after the time of adoption of such a plan of
complete liquidation, the Trustee shall sell all of the assets of the Trust
Fund to the Master Servicer for cash in accordance with Section 9.01.
(b) The Trustee as agent for any REMIC hereby agrees to adopt and sign
such a plan of complete liquidation upon the written request of the Master
Servicer, and the receipt of the Opinion of Counsel referred to in Section
9.04(a)(1) and to take such other action in connection therewith as may be
reasonably requested by the Master Servicer.
(c) By their acceptance of the Certificates, the Holders thereof hereby
authorize the Master Servicer to prepare and the Trustee to adopt and sign a
plan of complete liquidation.
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ARTICLE X
MISCELLANEOUS PROVISIONS
SECTION 10.01. Amendment.
This Agreement may be amended from time to time by the Depositor, the
Master Servicer and the Trustee without the consent of any of the
Certificateholders to cure any ambiguity or defect, or to correct or supplement
any provisions herein, (including to give effect to the expectations of
investors), or to make such other provisions with respect to matters or
questions arising under this Agreement as shall not be inconsistent with any
other provisions herein; provided that such action shall not, as evidenced by an
Opinion of Counsel (which Opinion of Counsel shall not be an expense of the
Trustee or the Trust Fund), adversely affect in any material respect the
interests of any Certificateholder; provided, however, that the amendment shall
not be deemed to adversely affect in any material respect the interests of the
Certificateholders if the Person requesting the amendment obtains a letter from
each Rating Agency stating that the amendment would not result in the
downgrading or withdrawal of the respective ratings then assigned to the
Certificates; it being understood and agreed that any such letter in and of
itself will not represent a determination as to the materiality of any such
amendment and will represent a determination only as to the credit issues
affecting any such rating. The Trustee, the Depositor and the Master Servicer
also may at any time and from time to time amend this Agreement without the
consent of the Certificateholders to modify, eliminate or add to any of its
provisions to such extent as shall be necessary or helpful to maintain the
qualification of any REMIC as a REMIC under the Code or to avoid or minimize the
risk of the imposition of any tax on any REMIC pursuant to the Code that would
be a claim at any time prior to the final redemption of the Certificates,
provided that the Trustee has been provided an Opinion of Counsel, which opinion
shall be an expense of the party requesting such opinion but in any case shall
not be an expense of the Trustee or the Trust Fund, to the effect that such
action is necessary or helpful to maintain such qualification or to avoid or
minimize the risk of the imposition of such a tax.
This Agreement may also be amended from time to time by the Depositor,
the Master Servicer and the Trustee with the consent of the Holders of a
Majority in Interest of each Class of Certificates affected thereby for the
purpose of adding any provisions to or changing in any manner or eliminating any
of the provisions of this Agreement or of modifying in any manner the rights of
the Holders of Certificates; provided, however, that no such amendment shall (i)
reduce in any manner the amount of, or delay the timing of, payments required to
be distributed on any Certificate without the consent of the Holder of such
Certificate, (ii) adversely affect in any material respect the interests of the
Holders of any Class of Certificates in a manner other than as described in (i),
without the consent of the Holders of Certificates of such Class evidencing, as
to such Class, Percentage Interests aggregating 66% or (iii) reduce the
aforesaid percentages of Certificates the Holders of which are required to
consent to any such amendment, without the consent of the Holders of all such
Certificates then outstanding.
Notwithstanding any contrary provision of this Agreement, the Trustee
shall not consent to any amendment to this Agreement unless it shall have first
received an Opinion of Counsel, which opinion shall not be an expense of the
Trustee or the Trust Fund, to the effect that such amendment will not cause the
imposition of any tax on any REMIC or the Certificateholders or cause any REMIC
to fail to qualify as a REMIC at any time that any Certificates are outstanding.
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Promptly after the execution of any amendment to this Agreement
requiring the consent of Certificateholders, the Trustee shall furnish written
notification of the substance or a copy of such amendment to each
Certificateholder and each Rating Agency.
It shall not be necessary for the consent of Certificateholders under
this Section to approve the particular form of any proposed amendment, but it
shall be sufficient if such consent shall approve the substance thereof. The
manner of obtaining such consents and of evidencing the authorization of the
execution thereof by Certificateholders shall be subject to such reasonable
regulations as the Trustee may prescribe.
Nothing in this Agreement shall require the Trustee to enter into an
amendment without receiving an Opinion of Counsel (which Opinion shall not be an
expense of the Trustee or the Trust Fund) satisfactory to the Trustee that (i)
such amendment is permitted and is not prohibited by this Agreement and that all
requirements for amending this Agreement have been complied with; and (ii)
either (A) the amendment does not adversely affect in any material respect the
interests of any Certificateholder or (B) the conclusion set forth in the
immediately preceding clause (A) is not required to be reached pursuant to this
Section 10.01.
SECTION 10.02. Recordation of Agreement; Counterparts
This Agreement is subject to recordation in all appropriate public
offices for real property records in all the counties or other comparable
jurisdictions in which any or all of the properties subject to the Mortgages are
situated, and in any other appropriate public recording office or elsewhere,
such recordation to be effected by the Master Servicer at its expense, but only
upon direction by the Trustee accompanied by an Opinion of Counsel to the effect
that such recordation materially and beneficially affects the interests of the
Certificateholders.
For the purpose of facilitating the recordation of this Agreement as
herein provided and for other purposes, this Agreement may be executed
simultaneously in any number of counterparts, each of which counterparts shall
be deemed to be an original, and such counterparts shall constitute but one and
the same instrument.
SECTION 10.03. Governing Law.
THIS AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY
THE SUBSTANTIVE LAWS OF THE STATE OF NEW YORK APPLICABLE TO AGREEMENTS MADE AND
TO BE PERFORMED IN THE STATE OF NEW YORK AND THE OBLIGATIONS, RIGHTS AND
REMEDIES OF THE PARTIES HERETO AND THE CERTIFICATEHOLDERS SHALL BE DETERMINED IN
ACCORDANCE WITH SUCH LAWS.
SECTION 10.04. Intention of Parties.
It is the express intent of the parties hereto that the conveyance of
the Trust Fund by the Depositor to the Trustee be, and be construed as, an
absolute sale thereof to the Trustee. It is, further, not the intention of the
parties that such conveyance be deemed a pledge thereof by the Depositor to the
Trustee. However, in the event that, notwithstanding the intent of the parties,
such assets are held to be
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the property of the Depositor, or if for any other reason this Agreement is held
or deemed to create a security interest in such assets, then (i) this Agreement
shall be deemed to be a security agreement within the meaning of the Uniform
Commercial Code of the State of New York and (ii) the conveyance provided for in
this Agreement shall be deemed to be an assignment and a grant by the Depositor
to the Trustee, for the benefit of the Certificateholders, of a security
interest in all of the assets that constitute the Trust Fund, whether now owned
or hereafter acquired.
The Depositor for the benefit of the Certificateholders shall, to the
extent consistent with this Agreement, take such actions as may be necessary to
ensure that, if this Agreement were deemed to create a security interest in the
Trust Fund, such security interest would be deemed to be a perfected security
interest of first priority under applicable law and will be maintained as such
throughout the term of the Agreement.
SECTION 10.05. Notices.
(a) The Trustee shall use its best efforts to promptly provide notice
to each Rating Agency with respect to each of the following of which it has
actual knowledge:
(1) Any material change or amendment to this Agreement;
(2) The occurrence of any Event of Default that has not been cured;
(3) The resignation or termination of the Master Servicer or the
Trustee and the appointment of any successor;
(4) The repurchase or substitution of Mortgage Loans pursuant to
Section 2.03; and
(5) The final payment to Certificateholders.
In addition, the Trustee shall promptly furnish to each Rating Agency
copies of the following:
(1) Each report to Certificateholders described in Section 4.04;
(2) Each annual statement as to compliance described in Section 3.17;
(3) Each annual independent public accountants' servicing report
described in Section 3.18; and
(4) Any notice of a purchase of a Mortgage Loan pursuant to Section
2.02, 2.03 or 3.11.
(b) All directions, demands and notices hereunder shall be in writing
and shall be deemed to have been duly given when delivered to (a) in the case of
the Depositor, Mellon Residential Funding Corporation, One Mellon Bank Center,
000 Xxxxx Xxxxxx, Xxxxxxxxxx, Xxxxxxxxxxxx 00000, Attention: Xxxxxxx Xxxxxx, (b)
in the case of the Master Servicer, Mellon Bank, N.A., One Mellon Bank Center,
000 Xxxxx Xxxxxx, Xxxxxxxxxx Xxxxxxxxxxxx 00000, Attention: Xxxxxxx Xxxx or such
other address as may be hereafter furnished to the Depositor and the Trustee by
the Master Servicer in writing, (c) in
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the case of the Trustee, at the Corporate Trust Office, or such other address as
the Trustee may hereafter furnish to the Depositor or Master Servicer, and (d)
in the case of the Rating Agencies, the address specified therefor in the
definition corresponding to the name of such Rating Agency. Notices to
Certificateholders shall be deemed given when mailed, first class postage
prepaid, to their respective addresses appearing in the Certificate Register.
SECTION 10.06. Severability of Provisions.
If any one or more of the covenants, agreements, provisions or terms of
this Agreement shall be for any reason whatsoever held invalid, then such
covenants, agreements, provisions or terms shall be deemed severable from the
remaining covenants, agreements, provisions or terms of this Agreement and shall
in no way affect the validity or enforceability of the other provisions of this
Agreement or of the Certificates or the rights of the Holders thereof.
SECTION 10.07. Assignment.
Notwithstanding anything to the contrary contained herein, except as
provided in Section 6.02, this Agreement may not be assigned by the Master
Servicer without the prior written consent of the Trustee and Depositor.
SECTION 10.08. Limitation on Rights of Certificateholders.
The death or incapacity of any Certificateholder shall not operate to
terminate this Agreement or the trust created hereby, nor entitle such
Certificateholder's legal representative or heirs to claim an accounting or to
take any action or commence any proceeding in any court for a petition or
winding up of the trust created hereby, or otherwise affect the rights,
obligations and liabilities of the parties hereto or any of them.
No Certificateholder shall have any right to vote (except as provided
herein) or in any manner otherwise control the operation and management of the
Trust Fund, or the obligations of the parties hereto, nor shall anything herein
set forth or contained in the terms of the Certificates be construed so as to
constitute the Certificateholders from time to time as partners or members of an
association; nor shall any Certificateholder be under any liability to any third
party by reason of any action taken by the parties to this Agreement pursuant to
any provision hereof.
No Certificateholder shall have any right by virtue or by availing
itself of any provisions of this Agreement to institute any suit, action or
proceeding in equity or at law upon or under or with respect to this Agreement,
unless such Holder previously shall have given to the Trustee a written notice
of an Event of Default and of the continuance thereof, as herein provided, and
unless the Holders of Certificates evidencing not less than 25% of the Voting
Rights evidenced by the Certificates shall also have made written request to the
Trustee to institute such action, suit or proceeding in its own name as Trustee
hereunder and shall have offered to the Trustee such reasonable indemnity as it
may require against the costs, expenses, and liabilities to be incurred therein
or thereby, and the Trustee, for 60 days after its receipt of such notice,
request and offer of indemnity shall have neglected or refused to institute any
such action, suit or proceeding; it being understood and intended, and being
expressly covenanted by each Certificateholder with every other
Certificateholder and the Trustee, that no one or more Holders of Certificates
shall have any right in any manner whatever by virtue or by availing itself or
themselves of
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any provisions of this Agreement to affect, disturb or prejudice the rights of
the Holders of any other of the Certificates, or to obtain or seek to obtain
priority over or preference to any other such Holder or to enforce any right
under this Agreement, except in the manner herein provided and for the common
benefit of all Certificateholders. For the protection and enforcement of the
provisions of this Section 10.08, each and every Certificateholder and the
Trustee shall be entitled to such relief as can be given either at law or in
equity.
SECTION 10.09. Inspection and Audit.
The Master Servicer agrees that, on reasonable prior notice, it will
permit and will cause each Subservicer to permit any representative of the
Depositor or the Trustee during the Master Servicer's normal business hours, to
examine all the books of account, records, reports and other papers of the
Master Servicer relating to the Mortgage Loans, to make copies and extracts
therefrom, to cause such books to be audited by independent certified public
accountants selected by the Depositor or the Trustee and to discuss its affairs,
finances and accounts relating to the Mortgage Loans with its officers,
employees and independent public accountants (and by this provision the Master
Servicer hereby authorizes said accountants to discuss with such representative
such affairs, finances and accounts), all at such reasonable times and as often
as may be reasonably requested. Any out-of-pocket expense incident to the
exercise by the Depositor or the Trustee of any right under this Section 10.09
shall be borne by the party requesting such inspection; all other such expenses
shall be borne by the Master Servicer or the related Subservicer.
SECTION 10.10. Certificates Nonassessable and Fully Paid.
It is the intention of the Depositor that Certificate holders shall not
be personally liable for obligations of the Trust Fund, that the interests in
the Trust Fund represented by the Certificates shall be nonassessable for any
reason whatsoever, and that the Certificates, upon due authentication thereof by
the Trustee pursuant to this Agreement, are and shall be deemed fully paid.
* * * * * *
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IN WITNESS WHEREOF, the Depositor, the Trustee, the Seller and
the Master Servicer have caused their names to be signed hereto by their
respective officers thereunto duly authorized as of the day and year first above
written.
MELLON RESIDENTIAL FUNDING
CORPORATION,
as Depositor
/s/ Xxxxxxx Xxxxxx
By:_______________________________________
Name: Xxxxxxx Xxxxxx
Title: President
BANKERS TRUST COMPANY OF CALIFORNIA,
N.A.,
as Trustee
/s/ Xxxxxxx Xxxxxxx
By:_______________________________________
Name: Xxxxxxx Xxxxxxx
Title: Assistant Secretary
MELLON BANK, N.A.
as Seller and Master Servicer
/s/ Xxxxxxx X. Xxxxxxxxxxx
By:_______________________________________
Name: Xxxxxxx X. Xxxxxxxxxxx
Title: Vice President
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SCHEDULE I
Mortgage Loan Schedule
[Delivered at Closing to Trustee]
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SCHEDULE II
Mellon Bank Home Equity Installment Loan Trust 1997-1
Mortgage Pass-Through Certificates
Series 1997-1
Representations and Warranties of the Seller/Master Servicer
Mellon Bank, N.A. ("Mellon") hereby makes the representations and
warranties set forth in this Schedule II to the Depositor and the Trustee, as of
the Closing Date, or if so specified herein, as of the Cut-off Date. Capitalized
terms used but not otherwise defined in this Schedule II shall have the meanings
ascribed thereto in the Pooling and Servicing Agreement (the "Pooling and
Servicing Agreement") relating to the above-referenced Series, among Mellon, as
seller and master servicer, Mellon Residential Funding Corporation, as
depositor, and Bankers Trust Company of California, N.A., as trustee.
(1) Mellon is duly organized as a national banking association and is
validly existing and in good standing under the laws of the United States of
America and is duly authorized and qualified to transact any and all
business contemplated by the Pooling and Servicing Agreement to be conducted
by Mellon in any state in which a Mortgaged Property is located or is
otherwise not required under applicable law to effect such qualification
and, in any event, is in compliance with the doing business laws of any such
state, to the extent necessary to ensure its ability to enforce each
Mortgage Loan, to service the Mortgage Loans in accordance with the terms of
the Pooling and Servicing Agreement and to perform any of its other
obligations under the Pooling and Servicing Agreement in accordance with the
terms thereof.
(2) Mellon has the full corporate power and authority to sell and
service each Mortgage Loan, and to execute, deliver and perform, and to
enter into and consummate the transactions contemplated by the Pooling and
Servicing Agreement and has duly authorized by all necessary corporate
action on the part of Mellon the execution, delivery and performance of the
Pooling and Servicing Agreement; and the Pooling and Servicing Agreement,
assuming the due authorization, execution and delivery thereof by the other
parties thereto, constitutes a legal, valid and binding obligation of
Mellon, enforceable against Mellon in accordance with its terms, except that
(a) the enforceability thereof may be limited by bankruptcy, insolvency,
moratorium, receivership and other similar laws relating to creditors'
rights generally, and the rights of creditors of national banking
associations and depository institutions the accounts of which are insured
by the FDIC and (b) the remedy of specific performance and injunctive and
other forms of equitable relief may be subject to equitable defenses and to
the discretion of the court before which any proceeding therefor may be
brought.
(3) The execution and delivery of the Pooling and Servicing Agreement
by Mellon, the sale and servicing of the Mortgage Loans by Mellon under the
Pooling and Servicing Agreement, the consummation of any other of the
transactions contemplated by the Pooling and Servicing Agreement, and the
fulfillment of or compliance with the terms thereof are in the ordinary
course of business of Mellon and will not (A) result in a material breach of
any term or provision of the articles of association or by-laws of Mellon or
(B) materially conflict with, result in a material breach, violation or
acceleration of, or result in a material default under, the terms of any
other material agreement or instrument to which Mellon is a party or by
which it may be bound, or (C) constitute a material violation of any
statute, order or regulation applicable to Mellon of any court, regulatory
body, administrative agency or governmental body having
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jurisdiction over Mellon; and Mellon is not in breach or violation of
any material indenture or other material agreement or instrument, or in
violation of any statute, order or regulation of any court, regulatory body,
administrative agency or governmental body having jurisdiction over it which
breach or violation may materially impair Mellon's ability to perform or
meet any of its obligations under the Pooling and Servicing Agreement.
(4) Mellon is an approved servicer of conventional mortgage loans for
FNMA or FHLMC and is a mortgagee approved by the Secretary of Housing and
Urban Development pursuant to sections 203 and 211 of the National Housing
Act.
(5) No litigation is pending or, to the best of Mellon's knowledge,
threatened, against Mellon that would materially and adversely affect the
execution, delivery or enforceability of the Pooling and Servicing Agreement
or the ability of Mellon to sell or service the Mortgage Loans or to perform
any of its other obligations under the Pooling and Servicing Agreement in
accordance with the terms thereof.
(6) No consent, approval, authorization or order of any court or
governmental agency or body is required for the execution, delivery and
performance by Mellon of, or compliance by Mellon with, the Pooling and
Servicing Agreement or the consummation of the transactions contemplated
thereby, or if any such consent, approval, authorization or order is
required, Mellon has obtained the same.
(7) Mellon intends to treat the transfer of the Mortgage Loans to the
Depositor as a sale of the Mortgage Loans for all tax, accounting and
regulatory purposes.
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SCHEDULE III
Mellon Bank Home Equity Installment Loan Trust 1997-1
Mortgage Pass-Through Certificates
Series 1997-1
Representations and Warranties as to the Mortgage Loans
Mellon Bank, N.A. ("Mellon") hereby makes the representations and
warranties set forth in this Schedule III to the Depositor and the Trustee, as
of the Closing Date, or if so specified herein, as of the Cut-off Date.
Capitalized terms used but not otherwise defined in this Schedule III shall have
the meanings ascribed thereto in the Pooling and Servicing Agreement (the
"Pooling and Servicing Agreement") relating to the above-referenced Series,
among Mellon, as seller and master servicer, Mellon Residential Funding
Corporation, as depositor, and Bankers Trust Company of California, N.A., as
trustee.
(1) The information set forth on Schedule I to the Pooling and
Servicing Agreement with respect to each Mortgage Loan is true and correct
in all material respects as of the Closing Date
(2) As of the Closing Date, all payments due with respect to each
Mortgage Loan prior to the Cut-off Date have been made; provided, however,
that as of the Cut-off Date, no more than nine Mortgage Loans were
contractually delinquent for more than 30 days (but less than 59 days).
(3) No Mortgage Loan had a Combined Loan-to-Value Ratio at origination
in excess of 97.89%.
(4) Each Mortgage is a valid and enforceable first or second lien on
the Mortgaged Property subject only to (a) the lien of non delinquent
current real property taxes and assessments, (b) covenants, conditions and
restrictions, rights of way, easements and other matters of public record as
of the date of recording of such Mortgage, such exceptions appearing of
record being acceptable to mortgage lending institutions generally or
specifically reflected in the appraisal made in connection with the
origination of the related Mortgage Loan, (c) other matters to which like
properties are commonly subject which do not materially interfere with the
benefits of the security intended to be provided by such Mortgage and (d) in
the case of a Mortgage Loan secured by second lien, a valid and enforceable
First Lien.
(5) Immediately prior to the assignment of the Mortgage Loans to the
Depositor, the Seller had good title to, and was the sole owner of, each
Mortgage Loan free and clear of any pledge, lien, encumbrance or security
interest and had full right and authority, subject to no interest or
participation of, or agreement with, any other party, to sell and assign the
same pursuant to the Pooling and Servicing Agreement.
(6) There is no delinquent tax or assessment lien against any Mortgaged
Property.
(7) There is no valid offset, defense or counterclaim to any Mortgage
Note or Mortgage, including the obligation of the Mortgagor to pay the
unpaid principal of or interest on such Mortgage Note.
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(8) There are no mechanics' liens or claims for work, labor or material
affecting any Mortgaged Property which are or may be a lien prior to, or
equal with, the lien of such Mortgage.
(9) To the best of the Seller's knowledge, each Mortgaged Property is
free of material damage and in good repair.
(10) Each Mortgage Loan at origination complied in all material
respects with applicable state and federal laws, including, without
limitation, usury, equal credit opportunity, real estate settlement
procedures, truth-in-lending and disclosure laws, and consummation of the
transactions contemplated hereby will not involve the violation of any such
laws.
(11) As of the Closing Date, neither the Seller nor any prior holder of
any Mortgage has modified the Mortgage in any material respect (except that
a Mortgage Loan may have been modified by a written instrument which has
been recorded or submitted for recordation, if necessary, to protect the
interests of the Certificateholders and the original or a copy of which has
been delivered to the Trustee); satisfied, cancelled or subordinated such
Mortgage in whole or in part; released the related Mortgaged Property in
whole or in part from the lien of such Mortgage; or executed any instrument
of release, cancellation, modification or satisfaction with respect thereto.
(12) [Reserved].
(13) To the best of the Seller's knowledge, all of the improvements
which were included for the purpose of determining the Appraised Value of
the Mortgaged Property lie wholly within the boundaries and building
restriction lines of such property, and no improvements on adjoining
properties encroach upon the Mortgaged Property.
(14) To the best of the Seller's knowledge, no improvement located on
or being part of the Mortgaged Property is in violation of any applicable
zoning law or regulation. To the best of the Seller's knowledge, all
inspections, licenses and certificates required to be made or issued with
respect to all occupied portions of the Mortgaged Property and, with respect
to the use and occupancy of the same, including but not limited to
certificates of occupancy and fire underwriting certificates, have been made
or obtained from the appropriate authorities, unless the lack thereof would
not have a material adverse effect on the value of such Mortgaged Property,
and the Mortgaged Property is lawfully occupied under applicable law.
(15) The Mortgage Note and the related Mortgage are genuine, and each
is the legal, valid and binding obligation of the maker thereof, enforceable
in accordance with its terms and under applicable law. To the best of the
Seller's knowledge, all parties to the Mortgage Note and the Mortgage had
legal capacity to execute the Mortgage Note and the Mortgage and each
Mortgage Note and Mortgage have been duly and properly executed by such
parties.
(16) The proceeds of the Mortgage Loan have been fully disbursed, there
is no requirement for future advances thereunder and any and all
requirements as to completion of any on-site or off-site improvements and as
to disbursements of any escrow funds therefor have been complied with. All
costs, fees and expenses incurred in making, or closing or recording the
Mortgage Loans were paid.
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(17) The related Mortgage contains customary and enforceable provisions
which render the rights and remedies of the holder thereof adequate for the
realization against the Mortgaged Property of the benefits of the security,
including, (i) in the case of a Mortgage designated as a deed of trust, by
trustee's sale, and (ii) otherwise by judicial foreclosure.
(18) With respect to each Mortgage constituting a deed of trust, a
trustee, duly qualified under applicable law to serve as such, has been
properly designated and currently so serves and is named in such Mortgage,
and no fees or expenses are or will become payable by the Certificateholders
to the trustee under the deed of trust, except in connection with a
trustee's sale after default by the Mortgagor.
(19) Each Mortgage Note and each Mortgage is in substantially one of
the forms acceptable to FNMA or FHLMC, with such riders as have been
acceptable to FNMA or FHLMC, as the case may be.
(20) There exist no deficiencies with respect to escrow deposits and
payments, if such are required, for which customary arrangements for
repayment thereof have not been made, and no escrow deposits or payments of
other charges or payments due the Seller have been capitalized under the
Mortgage or the related Mortgage Note [forced place flood insurance].
(21) The origination, underwriting and collection practices used by the
Seller with respect to each Mortgage Loan have been in all respects legal,
prudent and customary in the mortgage lending and servicing business.
(22) There is no pledged account or other security other than real
estate securing the Mortgagor's obligations.
(23) No Mortgage Loan has a shared appreciation feature, or other
contingent interest feature.
(24) Each Mortgage Loan contains a customary "due on sale" clause.
(25) None of the Mortgage Loans provides for a prepayment penalty.
(26) None of the Mortgage Loans are covered by primary mortgage
insurance.
(27) At the date of origination of each Mortgage Loan, the improvements
upon each Mortgaged Property are covered by a valid and existing hazard
insurance policy with a generally acceptable carrier that provides for fire
and extended coverage and coverage for such other hazards as are customary
in the area where the Mortgaged Property is located in an amount which is at
least equal to the lesser of (i) the maximum insurable value of the
improvements securing such Mortgage Loan or (ii) the greater of (a) the
outstanding principal balance of the Mortgage Loan and any First Lien and
(b) an amount such that the proceeds of such policy shall be sufficient to
prevent the Mortgagor and/or the mortgagee from becoming a co-insurer. All
such individual insurance policies and all flood policies referred to in
item (28) below contain a standard mortgagee clause naming the Seller or the
original mortgagee, and its successors in interest, as mortgagee, and the
Seller has received no notice that any premiums due and payable thereon have
not been paid; the Mortgage obligates the Mortgagor thereunder to maintain
all such insurance including flood insurance at the Mortgagor's cost and
expense, and upon the
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Mortgagor's failure to do so, authorizes the holder of the Mortgage to
obtain and maintain such insurance at the Mortgagor's cost and expense and
to seek reimbursement therefor from the Mortgagor.
(28) If the Mortgaged Property is in an area identified in the Federal
Register by the Federal Emergency Management Agency as having special flood
hazards, a flood insurance policy in a form meeting the requirements of the
current guidelines of the Flood Insurance Administration is in effect with
respect to such Mortgaged Property with a generally acceptable carrier in an
amount representing coverage not less than the least of (A) the original
outstanding principal balance of the Mortgage Loan, (B) the minimum amount
required to compensate for damage or loss on a replacement cost basis, or
(C) the maximum amount of insurance that is available under the Flood
Disaster Protection Act of 1973, as amended.
(29) To the best of the Seller's knowledge, there is no proceeding
occurring, pending or threatened for the total or partial condemnation of
the Mortgaged Property.
(30) There is no material monetary default existing under any Mortgage
or the related Mortgage Note and, to the best of the Seller's knowledge,
there is no material event which, with the passage of time or with notice
and the expiration of any grace or cure period, would constitute a default,
breach, violation or event of acceleration under the Mortgage or the related
Mortgage Note; and the Seller has not waived any default, breach, violation
or event of acceleration.
(31) Each Mortgaged Property is improved by a one- to four-family
residential dwelling, including condominium units, which, to the best of
Seller's knowledge, does not include cooperatives or mobile homes and does
not constitute other than real property under state law.
(32) Each Mortgage Loan is being serviced by the Master Servicer.
(33) Any future advances made prior to the Cut-off Date have been
consolidated with the outstanding principal amount secured by the Mortgage,
and the secured principal amount, as consolidated, bears a single interest
rate and single repayment term reflected on the Mortgage Loan Schedule. The
consolidated principal amount does not exceed the original principal amount
of the Mortgage Loan. The Mortgage Note does not permit or obligate the
Master Servicer to make future advances to the Mortgagor at the option of
the Mortgagor.
(34) All taxes, governmental assessments, insurance premiums, water,
sewer and municipal charges, leasehold payments or ground rents which
previously became due and owing have been paid, or an escrow of funds has
been established in an amount sufficient to pay for every such item which
remains unpaid and which has been assessed, but is not yet due and payable.
Except for (A) payments in the nature of escrow payments, and (B) interest
accruing from the date of the Mortgage Note or date of disbursement of the
Mortgage proceeds, whichever is later, to the day which precedes by one
month the respective Due Date of the first installment of principal and
interest, including without limitation, taxes and insurance payments, the
Master Servicer has not advanced funds, or induced, solicited or knowingly
received any advance of funds by a party other than the Mortgagor, directly
or indirectly, for the payment of any amount required by the Mortgage.
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(35) Each Mortgage Loan was underwritten in all material respects in
accordance with the Seller's underwriting guidelines as set forth in the
Prospectus Supplement.
(36) Prior to the approval of the Mortgage Loan application, an
appraisal of the related Mortgaged Property was obtained from a qualified
appraiser, duly appointed by the originator, who had no interest, direct or
indirect, in the Mortgaged Property or in any loan made on the security
thereof, and whose compensation is not affected by the approval or
disapproval of the Mortgage Loan; such appraisal is in a form acceptable to
FNMA and FHLMC.
(37) None of the Mortgage Loans is a graduated payment mortgage loan or
a growing equity mortgage loan, and none of the Mortgage Loans are subject
to a buydown or similar arrangement.
(38) None of the Mortgage Loans are secured by a leasehold estate.
(39) The Mortgage Loans were selected from among the outstanding
fixed-rate one- to four-family mortgage loans in the Seller's portfolio at
the Closing Date as to which the representations and warranties made as to
the Mortgage Loans set forth in this Schedule III can be made. Such
selection was not made in a manner that would adversely affect the interests
of Certificateholders.
(40) Except for 0 Mortgage Loans, each Mortgage Loan has a payment
date on or before the last day of the Due Period relating to the first
Distribution Date.
(41) The Mortgage Loans, individually and in the aggregate, conform in
all material respects to the descriptions thereof in the Prospectus
Supplement.
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SCHEDULE IV
[RESERVED]
93
SCHEDULE V
Form of Monthly Master Servicer Report
[TO BE AGREED UPON BY THE TRUSTEE AND THE MASTER SERVICER]
94
EXHIBIT A
FORM OF SENIOR CERTIFICATE
95
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE TRUSTEE OR ITS
AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT, AND ANY CERTIFICATE
ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO
CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A "REGULAR
INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT," AS THOSE TERMS ARE
DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL REVENUE CODE OF
1986, AS AMENDED (THE "CODE").
Certificate No. : A-1-1
Cut-off Date : September 30, 1997
First Distribution Date : November 25, 1997
Initial Certificate Balance
of this Certificate
("Denomination") : $49,865,000
Initial Certificate Balances
of all Certificates of
this Class : $49,865,000
Certificate Rate : Variable
CUSIP : 58550S AA 8
96
MELLON RESIDENTIAL FUNDING CORPORATION
Mortgage Pass-Through Certificates, Series 1997-1
Class A-1
evidencing a percentage interest in the distributions allocable to the
Certificates of the above-referenced Class with respect to a Trust Fund
consisting primarily of a pool of fixed-rate mortgage loans (the "Mortgage
Loans") secured by first or second liens on one- to four-family residential
properties.
MELLON RESIDENTIAL FUNDING CORPORATION, as Depositor
Principal in respect of this Certificate is distributable monthly as
set forth herein. Accordingly, the Certificate Balance at any time may be less
than the Initial Certificate Balance set forth on the face hereof, as described
herein. This Certificate does not evidence an obligation of, or an interest in,
and is not guaranteed by the Depositor, the Seller, the Master Servicer or the
Trustee referred to below or any of their respective affiliates. Neither this
Certificate nor the Mortgage Loans are guaranteed or insured by any governmental
agency or instrumentality.
This certifies that Cede & Co. is the registered owner of the
Percentage Interest evidenced by this Certificate (obtained by dividing the
denomination of this Certificate by the aggregate Initial Certificate Balances
of all Certificates of the Class to which this Certificate belongs) in certain
monthly distributions with respect to a Trust Fund consisting primarily of the
Mortgage Loans deposited by Mellon Residential Funding Corporation (the
"Depositor"). The Trust Fund was created pursuant to a Pooling and Servicing
Agreement dated as of the Cut-off Date specified above (the "Agreement") among
the Depositor, Mellon Bank, N.A., as seller (in such capacity, the "Seller") and
as master servicer (in such capacity, the "Master Servicer"), and Bankers Trust
Company of California, N.A., as trustee (the "Trustee"). To the extent not
defined herein, the capitalized terms used herein have the meanings assigned in
the Agreement. This Certificate is issued under and is subject to the terms,
provisions and conditions of the Agreement, to which Agreement the Holder of
this Certificate by virtue of the acceptance hereof assents and by which such
Holder is bound.
Reference is hereby made to the further provisions of this Certificate
set forth on the reverse hereof, which further provisions shall for all purposes
have the same effect as if set forth at this place.
This Certificate shall not be entitled to any benefit under the
Agreement or be valid for any purpose unless manually countersigned by an
authorized signatory of the Trustee.
* * *
-2-
97
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly
executed.
Dated: October 28, 1997
BANKERS TRUST COMPANY OF CALIFORNIA,
N.A., as Trustee
By ______________________
This is one of the Certificates referenced in the within-mentioned Agreement.
Countersigned:
By ___________________________
Authorized Signatory of
BANKERS TRUST COMPANY OF
CALIFORNIA, N.A., as Trustee
-3-
98
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE TRUSTEE OR ITS
AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT, AND ANY CERTIFICATE
ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO
CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A "REGULAR
INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT," AS THOSE TERMS ARE
DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL REVENUE CODE OF
1986, AS AMENDED (THE "CODE").
Certificate No. : A-2-1
Cut-off Date : September 30, 1997
First Distribution Date : November 25, 1997
Initial Certificate Balance
of this Certificate
("Denomination") : $9,196,000
Initial Certificate Balances
of all Certificates of
this Class : $9,196,000
Certificate Rate : 6.48%
CUSIP : 58550S AB 6
99
MELLON RESIDENTIAL FUNDING CORPORATION
Mortgage Pass-Through Certificates, Series 1997-1
Class A-2
evidencing a percentage interest in the distributions allocable to the
Certificates of the above-referenced Class with respect to a Trust Fund
consisting primarily of a pool of fixed-rate mortgage loans (the "Mortgage
Loans") secured by first or second liens on one- to four-family residential
properties.
MELLON RESIDENTIAL FUNDING CORPORATION, as Depositor
Principal in respect of this Certificate is distributable monthly as
set forth herein. Accordingly, the Certificate Balance at any time may be less
than the Initial Certificate Balance set forth on the face hereof, as described
herein. This Certificate does not evidence an obligation of, or an interest in,
and is not guaranteed by the Depositor, the Seller, the Master Servicer or the
Trustee referred to below or any of their respective affiliates. Neither this
Certificate nor the Mortgage Loans are guaranteed or insured by any governmental
agency or instrumentality.
This certifies that Cede & Co. is the registered owner of the
Percentage Interest evidenced by this Certificate (obtained by dividing the
denomination of this Certificate by the aggregate Initial Certificate Balances
of all Certificates of the Class to which this Certificate belongs) in certain
monthly distributions with respect to a Trust Fund consisting primarily of the
Mortgage Loans deposited by Mellon Residential Funding Corporation (the
"Depositor"). The Trust Fund was created pursuant to a Pooling and Servicing
Agreement dated as of the Cut-off Date specified above (the "Agreement") among
the Depositor, Mellon Bank, N.A., as seller (in such capacity, the "Seller") and
as master servicer (in such capacity, the "Master Servicer"), and Bankers Trust
Company of California, N.A., as trustee (the "Trustee"). To the extent not
defined herein, the capitalized terms used herein have the meanings assigned in
the Agreement. This Certificate is issued under and is subject to the terms,
provisions and conditions of the Agreement, to which Agreement the Holder of
this Certificate by virtue of the acceptance hereof assents and by which such
Holder is bound.
Reference is hereby made to the further provisions of this Certificate
set forth on the reverse hereof, which further provisions shall for all purposes
have the same effect as if set forth at this place.
This Certificate shall not be entitled to any benefit under the
Agreement or be valid for any purpose unless manually countersigned by an
authorized signatory of the Trustee.
* * *
-2-
100
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly
executed.
Dated: October 28, 1997
BANKERS TRUST COMPANY OF CALIFORNIA,
N.A., as Trustee
By ______________________
This is one of the Certificates referenced in the within-mentioned Agreement.
Countersigned:
By ___________________________
Authorized Signatory of
BANKERS TRUST COMPANY OF
CALIFORNIA, N.A., as Trustee
-3-
101
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE TRUSTEE OR ITS
AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT, AND ANY CERTIFICATE
ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO
CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A "REGULAR
INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT," AS THOSE TERMS ARE
DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL REVENUE CODE OF
1986, AS AMENDED (THE "CODE").
Certificate No. : A-3-1
Cut-off Date : September 30, 1997
First Distribution Date : November 25, 1997
Initial Certificate Balance
of this Certificate
("Denomination") : $24,270,000
Initial Certificate Balances
of all Certificates of
this Class : $24,270,000
Certificate Rate : 6.52%
CUSIP : 58550S AC 4
102
MELLON RESIDENTIAL FUNDING CORPORATION
Mortgage Pass-Through Certificates, Series 1997-1
Class A-3
evidencing a percentage interest in the distributions allocable to the
Certificates of the above-referenced Class with respect to a Trust Fund
consisting primarily of a pool of fixed-rate mortgage loans (the "Mortgage
Loans") secured by first or second liens on one- to four-family residential
properties.
MELLON RESIDENTIAL FUNDING CORPORATION, as Depositor
Principal in respect of this Certificate is distributable monthly as
set forth herein. Accordingly, the Certificate Balance at any time may be less
than the Initial Certificate Balance set forth on the face hereof, as described
herein. This Certificate does not evidence an obligation of, or an interest in,
and is not guaranteed by the Depositor, the Seller, the Master Servicer or the
Trustee referred to below or any of their respective affiliates. Neither this
Certificate nor the Mortgage Loans are guaranteed or insured by any governmental
agency or instrumentality.
This certifies that Cede & Co. is the registered owner of the
Percentage Interest evidenced by this Certificate (obtained by dividing the
denomination of this Certificate by the aggregate Initial Certificate Balances
of all Certificates of the Class to which this Certificate belongs) in certain
monthly distributions with respect to a Trust Fund consisting primarily of the
Mortgage Loans deposited by Mellon Residential Funding Corporation (the
"Depositor"). The Trust Fund was created pursuant to a Pooling and Servicing
Agreement dated as of the Cut-off Date specified above (the "Agreement") among
the Depositor, Mellon Bank, N.A., as seller (in such capacity, the "Seller") and
as master servicer (in such capacity, the "Master Servicer"), and Bankers Trust
Company of California, N.A., as trustee (the "Trustee"). To the extent not
defined herein, the capitalized terms used herein have the meanings assigned in
the Agreement. This Certificate is issued under and is subject to the terms,
provisions and conditions of the Agreement, to which Agreement the Holder of
this Certificate by virtue of the acceptance hereof assents and by which such
Holder is bound.
Reference is hereby made to the further provisions of this Certificate
set forth on the reverse hereof, which further provisions shall for all purposes
have the same effect as if set forth at this place.
This Certificate shall not be entitled to any benefit under the
Agreement or be valid for any purpose unless manually countersigned by an
authorized signatory of the Trustee.
* * *
-2-
103
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly
executed.
Dated: October 28, 1997
BANKERS TRUST COMPANY OF CALIFORNIA,
N.A., as Trustee
By ______________________
This is one of the Certificates referenced in the within-mentioned Agreement.
Countersigned:
By ___________________________
Authorized Signatory of
BANKERS TRUST COMPANY OF
CALIFORNIA, N.A., as Trustee
-3-
104
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE TRUSTEE OR ITS
AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT, AND ANY CERTIFICATE
ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO
CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A "REGULAR
INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT," AS THOSE TERMS ARE
DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL REVENUE CODE OF
1986, AS AMENDED (THE "CODE").
Certificate No. : A-4-1
Cut-off Date : September 30, 1997
First Distribution Date : November 25, 1997
Initial Certificate Balance
of this Certificate
("Denomination") : $22,689,000
Initial Certificate Balances
of all Certificates of
this Class : $22,689,000
Certificate Rate : 6.84%
CUSIP : 58550S AD 2
105
MELLON RESIDENTIAL FUNDING CORPORATION
Mortgage Pass-Through Certificates, Series 1997-1
Class A-4
evidencing a percentage interest in the distributions allocable to the
Certificates of the above-referenced Class with respect to a Trust Fund
consisting primarily of a pool of fixed-rate mortgage loans (the "Mortgage
Loans") secured by first or second liens on one- to four-family residential
properties.
MELLON RESIDENTIAL FUNDING CORPORATION, as Depositor
Principal in respect of this Certificate is distributable monthly as
set forth herein. Accordingly, the Certificate Balance at any time may be less
than the Certificate Balance set forth on the face hereof, as described herein.
This Certificate does not evidence an obligation of, or an interest in, and is
not guaranteed by the Depositor, the Seller, the Master Servicer or the Trustee
referred to below or any of their respective affiliates. Neither this
Certificate nor the Mortgage Loans are guaranteed or insured by any governmental
agency or instrumentality.
This certifies that Cede & Co. is the registered owner of the
Percentage Interest evidenced by this Certificate (obtained by dividing the
denomination of this Certificate by the aggregate Initial Certificate Balances
of all Certificates of the Class to which this Certificate belongs) in certain
monthly distributions with respect to a Trust Fund consisting primarily of the
Mortgage Loans deposited by Mellon Residential Funding Corporation (the
"Depositor"). The Trust Fund was created pursuant to a Pooling and Servicing
Agreement dated as of the Cut-off Date specified above (the "Agreement") among
the Depositor, Mellon Bank, N.A., as seller (in such capacity, the "Seller") and
as master servicer (in such capacity, the "Master Servicer"), and Bankers Trust
Company of California, N.A., as trustee (the "Trustee"). To the extent not
defined herein, the capitalized terms used herein have the meanings assigned in
the Agreement. This Certificate is issued under and is subject to the terms,
provisions and conditions of the Agreement, to which Agreement the Holder of
this Certificate by virtue of the acceptance hereof assents and by which such
Holder is bound.
Reference is hereby made to the further provisions of this Certificate
set forth on the reverse hereof, which further provisions shall for all purposes
have the same effect as if set forth at this place.
This Certificate shall not be entitled to any benefit under the
Agreement or be valid for any purpose unless manually countersigned by an
authorized signatory of the Trustee.
* * *
-2-
106
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly
executed.
Dated: October 28, 1997
BANKERS TRUST COMPANY OF CALIFORNIA,
N.A., as Trustee
By ______________________
This is one of the Certificates referenced in the within-mentioned Agreement.
Countersigned:
By ___________________________
Authorized Signatory of
BANKERS TRUST COMPANY OF
CALIFORNIA, N.A., as Trustee
-3-
107
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE TRUSTEE OR ITS
AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT, AND ANY CERTIFICATE
ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO
CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A "REGULAR
INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT," AS THOSE TERMS ARE
DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL REVENUE CODE OF
1986, AS AMENDED (THE "CODE").
Certificate No. : A-5-1
Cut-off Date : September 30, 1997
First Distribution Date : November 25, 1997
Initial Certificate Balance
of this Certificate
("Denomination") : $12,518,000
Initial Certificate Balances
of all Certificates of
this Class : $12,518,000
Certificate Rate : 6.69%
CUSIP : 58550S AE 0
108
MELLON RESIDENTIAL FUNDING CORPORATION
Mortgage Pass-Through Certificates, Series 1997-1
Class A-5
evidencing a percentage interest in the distributions allocable to the
Certificates of the above-referenced Class with respect to a Trust Fund
consisting primarily of a pool of fixed-rate mortgage loans (the "Mortgage
Loans") secured by first or second liens on one- to four-family residential
properties.
MELLON RESIDENTIAL FUNDING CORPORATION, as Depositor
Principal in respect of this Certificate is distributable monthly as
set forth herein. Accordingly, the Certificate Balance at any time may be less
than the Certificate Balance set forth on the face hereof, as described herein.
This Certificate does not evidence an obligation of, or an interest in, and is
not guaranteed by the Depositor, the Seller, the Master Servicer or the Trustee
referred to below or any of their respective affiliates. Neither this
Certificate nor the Mortgage Loans are guaranteed or insured by any governmental
agency or instrumentality.
This certifies that Cede & Co. is the registered owner of the
Percentage Interest evidenced by this Certificate (obtained by dividing the
denomination of this Certificate by the aggregate Initial Certificate Balances
of all Certificates of the Class to which this Certificate belongs) in certain
monthly distributions with respect to a Trust Fund consisting primarily of the
Mortgage Loans deposited by Mellon Residential Funding Corporation (the
"Depositor"). The Trust Fund was created pursuant to a Pooling and Servicing
Agreement dated as of the Cut-off Date specified above (the "Agreement") among
the Depositor, Mellon Bank, N.A., as seller (in such capacity, the "Seller") and
as master servicer (in such capacity, the "Master Servicer"), and Bankers Trust
Company of California, N.A., as trustee (the "Trustee"). To the extent not
defined herein, the capitalized terms used herein have the meanings assigned in
the Agreement. This Certificate is issued under and is subject to the terms,
provisions and conditions of the Agreement, to which Agreement the Holder of
this Certificate by virtue of the acceptance hereof assents and by which such
Holder is bound.
Reference is hereby made to the further provisions of this Certificate
set forth on the reverse hereof, which further provisions shall for all purposes
have the same effect as if set forth at this place.
This Certificate shall not be entitled to any benefit under the
Agreement or be valid for any purpose unless manually countersigned by an
authorized signatory of the Trustee.
* * *
-2-
109
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly
executed.
Dated: October 28, 1997
BANKERS TRUST COMPANY OF CALIFORNIA,
N.A., as Trustee
By ______________________
This is one of the Certificates referenced in the within-mentioned Agreement.
Countersigned:
By ___________________________
Authorized Signatory of
BANKERS TRUST COMPANY OF
CALIFORNIA, N.A., as Trustee
-3-
110
EXHIBIT B
FORM OF SUBORDINATED CERTIFICATE
111
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE TRUSTEE OR ITS
AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT, AND ANY CERTIFICATE
ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO
CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A "REGULAR
INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT," AS THOSE TERMS ARE
DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL REVENUE CODE OF
1986, AS AMENDED (THE "CODE").
THIS CERTIFICATE IS SUBORDINATED IN RIGHT OF PAYMENT TO CERTAIN CERTIFICATES AS
DESCRIBED IN THE AGREEMENT REFERRED TO HEREIN.
NEITHER THIS CERTIFICATE NOR ANY INTEREST HEREIN MAY BE TRANSFERRED UNLESS THE
TRANSFEREE REPRESENTS TO THE TRUSTEE THAT SUCH TRANSFEREE IS NOT AN EMPLOYEE
BENEFIT PLAN SUBJECT TO THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS
AMENDED, OR A PLAN SUBJECT TO SECTION 4975 OF THE CODE, OR DELIVERS TO THE
TRUSTEE AN OPINION OF COUNSEL IN ACCORDANCE WITH THE PROVISIONS OF THE AGREEMENT
REFERRED TO HEREIN. SUCH REPRESENTATION SHALL BE DEEMED TO HAVE BEEN MADE TO THE
TRUSTEE BY THE TRANSFEREE'S ACCEPTANCE OF A CERTIFICATE OF THIS CLASS AND BY A
BENEFICIAL OWNER'S ACCEPTANCE OF ITS INTEREST IN A CERTIFICATE OF THIS CLASS.
NOTWITHSTANDING ANYTHING ELSE TO THE CONTRARY HEREIN, ANY PURPORTED TRANSFER OF
THIS CERTIFICATE TO OR ON BEHALF OF AN EMPLOYEE BENEFIT PLAN SUBJECT TO ERISA OR
TO THE CODE WITHOUT THE OPINION OF COUNSEL SATISFACTORY TO THE TRUSTEE AS
DESCRIBED ABOVE SHALL BE VOID AND OF NO EFFECT.
112
Certificate No. : B-1
Cut-off Date : September 30, 1997
First Distribution Date : November 25, 1997
Initial Certificate Balance
of this Certificate
("Denomination") : $6,635,000
Initial Certificate Balances
of all Certificates of
this Class : $6,635,000
Certificate Rate : 6.98%
CUSIP : 58550S AF 7
MELLON RESIDENTIAL FUNDING CORPORATION.
Mortgage Pass-Through Certificates, Series 1997-1
Class B
evidencing a percentage interest in the distributions allocable to the
Certificates of the above-referenced Class with respect to a Trust Fund
consisting primarily of a pool of fixed-rate mortgage loans (the "Mortgage
Loans") secured by first or second liens on one- to four-family residential
properties.
MELLON RESIDENTIAL FUNDING CORPORATION, as Depositor
Principal in respect of this Certificate is distributable monthly as
set forth herein. Accordingly, the Certificate Balance at any time may be less
than the Initial Certificate Balance as set forth herein. This Certificate does
not evidence an obligation of, or an interest in, and is not guaranteed by the
Depositor, the Seller, the Master Servicer or the Trustee referred to below or
any of their respective affiliates. Neither this Certificate nor the Mortgage
Loans are guaranteed or insured by any governmental agency or instrumentality.
This certifies that Cede & Co. is the registered owner of the
Percentage Interest evidenced by this Certificate (obtained by dividing the
denomination of this Certificate by the aggregate Initial Certificate Balances
of all Certificates of the Class to which this Certificate belongs) in certain
monthly distributions with respect to a Trust Fund consisting primarily of the
Mortgage Loans deposited by Mellon Residential Funding Corporation (the
"Depositor"). The Trust Fund was created pursuant to a Pooling and Servicing
Agreement dated as of the Cut-off Date specified above (the "Agreement") among
the Depositor, Mellon Bank, N.A., as seller (in such capacity, the "Seller") and
as master servicer (in such capacity, the "Master Servicer"), and Bankers Trust
Company of California, N.A., as trustee (the "Trustee"). To the extent not
defined herein, the capitalized terms used herein have the meanings assigned in
the Agreement. This Certificate is issued under and is subject to the terms,
provisions and conditions of the Agreement, to which Agreement the Holder of
this Certificate by virtue of the acceptance hereof assents and by which such
Holder is bound.
-2-
113
No transfer of a Certificate of this Class shall be made unless the
Trustee shall have received either (i) a representation letter from the
transferee of such Certificate, acceptable to and in form and substance
satisfactory to the Trustee, to the effect that such transferee is not an
employee benefit plan subject to Section 406 of ERISA or Section 4975 of the
Code, nor a person acting on behalf of any such plan, which representation
letter shall not be an expense of the Trustee, (ii) if the purchaser is an
insurance company, a representation that the purchaser is an insurance company
which is purchasing such Certificates with funds contained in an "insurance
company general account" (as such term is defined in Section V(e) of Prohibited
Transaction Class Exemption 95-60 ("PTCE 95-60")) and that the purchase and
holding of such Certificates are covered under PTCE 95-60, or (iii) in the case
of any such Certificate presented for registration in the name of an employee
benefit plan subject to ERISA or Section 4975 of the Code (or comparable
provisions of any subsequent enactments), or a trustee of any such plan or any
other person acting on behalf of any such plan, an Opinion of Counsel
satisfactory to the Trustee to the effect that the purchase or holding of such
Certificate will not result in the assets of the Trust Fund being deemed to be
"plan assets" and subject to the prohibited transaction provisions of ERISA and
the Code and will not subject the Trustee to any obligation in addition to those
undertaken in the Agreement, which Opinion of Counsel shall not be an expense of
the Trustee. Such representation shall be deemed to have been made to the
Trustee by the Transferee's acceptance of a Certificate of this Class and by a
beneficial owner's acceptance of its interest in a Certificate of this Class.
Notwithstanding anything else to the contrary herein, any purported transfer of
a Certificate of this Class to or on behalf of an employee benefit plan subject
to ERISA or to the Code without the opinion of counsel satisfactory to the
Trustee as described above shall be void and of no effect.
Reference is hereby made to the further provisions of this Certificate
set forth on the reverse hereof, which further provisions shall for all purposes
have the same effect as if set forth at this place.
This Certificate shall not be entitled to any benefit under the
Agreement or be valid for any purpose unless manually countersigned by an
authorized signatory of the Trustee.
* * *
-3-
114
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly executed.
Dated: October 28, 1997
BANKERS TRUST COMPANY OF CALIFORNIA,
N.A.
as Trustee
By ______________________
This is one of the Certificates referenced in the within-mentioned Agreement.
Countersigned:
By ___________________________
Authorized Signatory of
BANKERS TRUST COMPANY OF
CALIFORNIA, N.A.,
as Trustee
-4-
115
EXHIBIT C
[FORM OF RESIDUAL CERTIFICATE]
116
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A "RESIDUAL
INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT," AS THOSE TERMS ARE
DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL REVENUE CODE OF
1986, AS AMENDED (THE "CODE").
NEITHER THIS CERTIFICATE NOR ANY INTEREST HEREIN MAY BE TRANSFERRED UNLESS THE
PROPOSED TRANSFEREE DELIVERS TO THE TRUSTEE A TRANSFER AFFIDAVIT IN ACCORDANCE
WITH THE PROVISIONS OF THE AGREEMENT REFERRED TO HEREIN.
THIS CLASS R-1 CERTIFICATE HAS NO PRINCIPAL BALANCE, DOES NOT BEAR INTEREST AND
WILL NOT RECEIVE ANY DISTRIBUTIONS EXCEPT AS PROVIDED IN THE AGREEMENT REFERRED
TO HEREIN.
NEITHER THIS CERTIFICATE NOR ANY INTEREST HEREIN MAY BE TRANSFERRED UNLESS THE
TRANSFEREE DELIVERS TO THE TRUSTEE EITHER A REPRESENTATION LETTER TO THE EFFECT
THAT SUCH TRANSFEREE IS NOT AN EMPLOYEE BENEFIT PLAN SUBJECT TO THE EMPLOYEE
RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED, OR A PLAN SUBJECT TO SECTION
4975 OF THE CODE, OR AN OPINION OF COUNSEL IN ACCORDANCE WITH THE PROVISIONS OF
THE AGREEMENT REFERRED TO HEREIN. NOTWITHSTANDING ANYTHING ELSE TO THE CONTRARY
HEREIN, ANY PURPORTED TRANSFER OF THIS CERTIFICATE TO OR ON BEHALF OF AN
EMPLOYEE BENEFIT PLAN SUBJECT TO ERISA OR TO THE CODE WITHOUT THE OPINION OF
COUNSEL SATISFACTORY TO THE TRUSTEE AS DESCRIBED ABOVE SHALL BE VOID AND OF NO
EFFECT.
117
Certificate No. : R-1
Percentage Interest
evidenced by this
Certificate : 99.99%
MELLON RESIDENTIAL FUNDING CORPORATION.
Mortgage Pass-Through Certificates, Series 1997-1
Class R
evidencing the distributions allocable to the Class R Certificates with
respect to a Trust Fund consisting primarily of a pool of fixed-rate
mortgage loans (the "Mortgage Loans") secured by first or second liens on
one- to four-family residential properties
MELLON RESIDENTIAL FUNDING CORPORATION, as Depositor
This Certificate does not evidence an obligation of, or an interest in,
and is not guaranteed by the Depositor, the Seller, the Master Servicer or the
Trustee referred to below or any of their respective affiliates. Neither this
Certificate nor the Mortgage Loans are guaranteed or insured by any governmental
agency or instrumentality.
This certifies that Mellon Residential Funding Corporation is the
registered owner of the Percentage Interest evidenced by this Certificate
specified above in the interest represented by all Certificates of the Class to
which this Certificate belongs to a Trust Fund consisting of the Mortgage Loans
deposited by Mellon Residential Funding Corporation (the "Depositor"). The Trust
Fund was created pursuant to a Pooling and Servicing Agreement dated as of the
Cut-off Date specified above (the "Agreement") among the Depositor, Mellon Bank,
N.A., as seller (in such capacity, the "Seller") and as master servicer (in such
capacity, the "Master Servicer"), and Bankers Trust Company of California, N.A.,
as trustee (the "Trustee"). To the extent not defined herein, the capitalized
terms used herein have the meanings assigned in the Agreement. This Certificate
is issued under and is subject to the terms, provisions and conditions of the
Agreement, to which Agreement the Holder of this Certificate by virtue of the
acceptance hereof assents and by which such Holder is bound.
This Certificate does not have a principal balance or pass-through rate
and will be entitled to distributions only to the extent set forth in the
Agreement. Any distribution of the proceeds of any remaining assets of the Trust
Fund will be made only upon presentment and surrender of this Certificate at the
Corporate Trust Office or the office or agency maintained by the Trustee in New
York, New York.
No transfer of a Certificate of this Class shall be made unless such
transfer is made pursuant to an effective registration statement under the
Securities Act of 1933, as amended (the "Securities Act") and any applicable
state securities laws or is exempt from the registration requirements under the
Securities Act and such laws. In the event that a transfer is to be made in
reliance upon an exemption from the Securities Act and such laws, in order to
assure compliance with the Securities Act and such laws, the Holder desiring to
effect such transfer and such Holder's prospective transferee shall each certify
to the Trustee in writing the facts surrounding the transfer. In the event that
such a transfer is to be made within three years from the date of the initial
issuance of Certificates pursuant to the Agreement, there shall also be
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118
delivered (except in the case of a transfer pursuant to Rule 144A of the
Securities Act) to the Trustee of an Opinion of Counsel that such transfer may
be made pursuant to an exemption from the Securities Act, which Opinion of
Counsel shall not be obtained at the expense of the Trustee, the Seller or the
Depositor. The Holder hereof desiring to effect such transfer shall, and does
hereby agree to, indemnify the Trustee and the Depositor against any liability
that may result if the transfer is not so exempt or is not made in accordance
with such federal and state laws.
No transfer of a Certificate of this Class shall be made unless the
Trustee shall have received either (i) a representation letter from the
transferee of such Certificate, acceptable to and in form and substance
satisfactory to the Trustee, to the effect that such transferee is not an
employee benefit plan subject to Section 406 of ERISA or Section 4975 of the
Code, nor a person acting on behalf of any such plan, which representation
letter shall not be an expense of the Trustee, or (ii) in the case of any such
Class R Certificate presented for registration in the name of an employee
benefit plan subject to ERISA, or Section 4975 of the Code (or comparable
provisions of any subsequent enactments), or a trustee of any such plan or any
other person acting on behalf of any such plan, an Opinion of Counsel
satisfactory to the Trustee to the effect that the purchase or holding of such
Class R Certificate will not result in the assets of the Trust Fund being deemed
to be "plan assets" and subject to the prohibited transaction provisions of
ERISA and the Code and will not subject the Trustee to any obligation in
addition to those undertaken in this Agreement, which Opinion of Counsel shall
not be an expense of the Trustee. Notwithstanding anything else to the contrary
herein, any purported transfer of a Class R Certificate to or on behalf of an
employee benefit plan subject to ERISA or to the Code without the opinion of
counsel satisfactory to the Trustee as described above shall be void and of no
effect.
Each Holder of this Class R Certificate will be deemed to have agreed
to be bound by the restrictions of the Agreement, including but not limited to
the restrictions that (i) each person holding or acquiring any Ownership
Interest in this Class R Certificate must be a Permitted Transferee, (ii) no
Ownership Interest in this Class R Certificate may be transferred without
delivery to the Trustee of (a) a transfer affidavit of the proposed transferee
and (b) a transfer certificate of the transferor, each of such documents to be
in the form described in the Agreement, (iii) each person holding or acquiring
any Ownership Interest in this Class R Certificate must agree to require a
transfer affidavit and to deliver a transfer certificate to the Trustee as
required pursuant to the Agreement, (iv) each person holding or acquiring an
Ownership Interest in this Class R Certificate must agree not to transfer an
Ownership Interest in this Class R Certificate if it has actual knowledge that
the proposed transferee is not a Permitted Transferee and (v) any attempted or
purported transfer of any Ownership Interest in this Class R Certificate in
violation of such restrictions will be absolutely null and void and will vest no
rights in the purported transferee.
Reference is hereby made to the further provisions of this Certificate
set forth on the reverse hereof, which further provisions shall for all purposes
have the same effect as if set forth at this place.
This Certificate shall not be entitled to any benefit under the
Agreement or be valid for any purpose unless manually countersigned by an
authorized signatory of the Trustee.
* * *
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119
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly
executed.
Dated: October 28, 1997
BANKERS TRUST COMPANY OF CALIFORNIA,
N.A.,
By ______________________
This is one of the Certificates referenced in the within-mentioned Agreement.
Countersigned:
By ___________________________
Authorized Signatory of
BANKERS TRUST COMPANY OF
CALIFORNIA, N.A.,
as Trustee
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120
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A "RESIDUAL
INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT," AS THOSE TERMS ARE
DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL REVENUE CODE OF
1986, AS AMENDED (THE "CODE").
NEITHER THIS CERTIFICATE NOR ANY INTEREST HEREIN MAY BE TRANSFERRED UNLESS THE
PROPOSED TRANSFEREE DELIVERS TO THE TRUSTEE A TRANSFER AFFIDAVIT IN ACCORDANCE
WITH THE PROVISIONS OF THE AGREEMENT REFERRED TO HEREIN.
THIS CERTIFICATE REPRESENTS THE "TAX MATTERS PERSON RESIDUAL INTEREST
CERTIFICATE" ISSUED UNDER THE POOLING AND SERVICING AGREEMENT REFERRED TO BELOW
AND MAY NOT BE TRANSFERRED TO ANY PERSON EXCEPT IN CONNECTION WITH THE
ASSUMPTION BY THE TRANSFEREE OF THE DUTIES OF THE SERVICER UNDER SUCH AGREEMENT.
THIS CLASS R-2 CERTIFICATE HAS NO PRINCIPAL BALANCE, DOES NOT BEAR INTEREST AND
WILL NOT RECEIVE ANY DISTRIBUTIONS EXCEPT AS PROVIDED IN THE AGREEMENT REFERRED
TO HEREIN.
NEITHER THIS CERTIFICATE NOR ANY INTEREST HEREIN MAY BE TRANSFERRED UNLESS THE
TRANSFEREE DELIVERS TO THE TRUSTEE EITHER A REPRESENTATION LETTER TO THE EFFECT
THAT SUCH TRANSFEREE IS NOT AN EMPLOYEE BENEFIT PLAN SUBJECT TO THE EMPLOYEE
RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED, OR A PLAN SUBJECT TO SECTION
4975 OF THE CODE, OR AN OPINION OF COUNSEL IN ACCORDANCE WITH THE PROVISIONS OF
THE AGREEMENT REFERRED TO HEREIN. NOTWITHSTANDING ANYTHING ELSE TO THE CONTRARY
HEREIN, ANY PURPORTED TRANSFER OF THIS CERTIFICATE TO OR ON BEHALF OF AN
EMPLOYEE BENEFIT PLAN SUBJECT TO ERISA OR TO THE CODE WITHOUT THE OPINION OF
COUNSEL SATISFACTORY TO THE TRUSTEE AS DESCRIBED ABOVE SHALL BE VOID AND OF NO
EFFECT.
121
Certificate No. : R-2
Percentage Interest
evidenced by this
Certificate : .01%
MELLON RESIDENTIAL FUNDING CORPORATION.
Mortgage Pass-Through Certificates, Series 1997-1
Class R
evidencing the distributions allocable to the Class R Certificates with
respect to a Trust Fund consisting primarily of a pool of fixed-rate
mortgage loans (the "Mortgage Loans") secured by first or second liens on
one- to four-family residential properties
MELLON RESIDENTIAL FUNDING CORPORATION, as Depositor
This Certificate does not evidence an obligation of, or an interest in,
and is not guaranteed by the Depositor, the Seller, the Master Servicer or the
Trustee referred to below or any of their respective affiliates. Neither this
Certificate nor the Mortgage Loans are guaranteed or insured by any governmental
agency or instrumentality.
This certifies that Bankers Trust Company of California, N.A., as
Trustee is the registered owner of the Percentage Interest evidenced by this
Certificate specified above in the interest represented by all Certificates of
the Class to which this Certificate belongs) to a Trust Fund consisting of the
Mortgage Loans deposited by Mellon Residential Funding Corporation (the
"Depositor"). The Trust Fund was created pursuant to a Pooling and Servicing
Agreement dated as of the Cut-off Date specified above (the "Agreement") among
the Depositor, Mellon Bank, N.A., as seller (in such capacity, the "Seller") and
as master servicer (in such capacity, the "Master Servicer"), and Bankers Trust
Company of California, N.A., as trustee (the "Trustee"). To the extent not
defined herein, the capitalized terms used herein have the meanings assigned in
the Agreement. This Certificate is issued under and is subject to the terms,
provisions and conditions of the Agreement, to which Agreement the Holder of
this Certificate by virtue of the acceptance hereof assents and by which such
Holder is bound.
This Certificate does not have principal balance or pass-through rate
and will be entitled to distributions only to the extent set forth in the
Agreement. Any distribution of the proceeds of any remaining assets of the Trust
Fund will be made only upon presentment and surrender of this Certificate at the
Corporate Trust Office or the office or agency maintained by the Trustee in New
York, New York.
No transfer of a Certificate of this Class shall be made unless such
transfer is made pursuant to an effective registration statement under the
Securities Act of 1933, as amended (the "Securities Act") and any applicable
state securities laws or is exempt from the registration requirements under the
Securities Act and such laws. In the event that a transfer is to be made in
reliance upon an exemption from the Securities Act and such laws, in order to
assure compliance with the Securities Act and such laws, the Holder desiring to
effect such transfer and such Holder's prospective transferee shall each certify
to the Trustee in writing the facts surrounding the transfer. In the event that
such a transfer is to be made within three years from the date of the initial
issuance of Certificates pursuant to the Agreement, there shall also be
delivered (except in
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122
the case of a transfer pursuant to Rule 144A of the Securities Act) to the
Trustee of an Opinion of Counsel that such transfer may be made pursuant to an
exemption from the Securities Act, which Opinion of Counsel shall not be
obtained at the expense of the Trustee, the Seller or the Depositor. The Holder
hereof desiring to effect such transfer shall, and does hereby agree to,
indemnify the Trustee and the Depositor against any liability that may result if
the transfer is not so exempt or is not made in accordance with such federal and
state laws.
No transfer of a Certificate of this Class shall be made unless the
Trustee shall have received either (i) a representation letter from the
transferee of such Certificate, acceptable to and in form and substance
satisfactory to the Trustee, to the effect that such transferee is not an
employee benefit plan subject to Section 406 of ERISA or Section 4975 of the
Code, nor a person acting on behalf of any such plan, which representation
letter shall not be an expense of the Trustee, or (ii) in the case of any such
Class R Certificate presented for registration in the name of an employee
benefit plan subject to ERISA, or Section 4975 of the Code (or comparable
provisions of any subsequent enactments), or a trustee of any such plan or any
other person acting on behalf of any such plan, an Opinion of Counsel
satisfactory to the Trustee to the effect that the purchase or holding of such
Class R Certificate will not result in the assets of the Trust Fund being deemed
to be "plan assets" and subject to the prohibited transaction provisions of
ERISA and the Code and will not subject the Trustee to any obligation in
addition to those undertaken in this Agreement, which Opinion of Counsel shall
not be an expense of the Trustee. Notwithstanding anything else to the contrary
herein, any purported transfer of a Class R Certificate to or on behalf of an
employee benefit plan subject to ERISA or to the Code without the opinion of
counsel satisfactory to the Trustee as described above shall be void and of no
effect.
Each Holder of this Class R Certificate will be deemed to have agreed
to be bound by the restrictions of the Agreement, including but not limited to
the restrictions that (i) each person holding or acquiring any Ownership
Interest in this Class R Certificate must be a Permitted Transferee, (ii) no
Ownership Interest in this Class R Certificate may be transferred without
delivery to the Trustee of (a) a transfer affidavit of the proposed transferee
and (b) a transfer certificate of the transferor, each of such documents to be
in the form described in the Agreement, (iii) each person holding or acquiring
any Ownership Interest in this Class R Certificate must agree to require a
transfer affidavit and to deliver a transfer certificate to the Trustee as
required pursuant to the Agreement, (iv) each person holding or acquiring an
Ownership Interest in this Class R Certificate must agree not to transfer an
Ownership Interest in this Class R Certificate if it has actual knowledge that
the proposed transferee is not a Permitted Transferee and (v) any attempted or
purported transfer of any Ownership Interest in this Class R Certificate in
violation of such restrictions will be absolutely null and void and will vest no
rights in the purported transferee.
Reference is hereby made to the further provisions of this Certificate
set forth on the reverse hereof, which further provisions shall for all purposes
have the same effect as if set forth at this place.
This Certificate shall not be entitled to any benefit under the
Agreement or be valid for any purpose unless manually countersigned by an
authorized signatory of the Trustee.
* * *
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123
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly
executed.
Dated: October 28, 1997
BANKERS TRUST COMPANY OF CALIFORNIA,
N.A.,
By ______________________
This is one of the Certificates referenced in the within-mentioned Agreement.
Countersigned:
By ___________________________
Authorized Signatory of
BANKERS TRUST COMPANY OF
CALIFORNIA, N.A.,
as Trustee
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124
EXHIBIT D
[Reserved]
125
EXHIBIT E
[FORM OF REVERSE OF CERTIFICATES]
126
MELLON RESIDENTIAL FUNDING CORPORATION
Mortgage Pass-Through Certificates, Series 1997-1
This Certificate is one of a duly authorized issue of Certificates
designated as Mellon Residential Funding Corporation Mortgage Pass-Through
Certificates, of the Series specified on the face hereof (herein collectively
called the "Certificates"), and representing a beneficial ownership interest in
the Trust Fund created by the Agreement.
The Certificateholder, by its acceptance of this Certificate, agrees
that it will look solely to the funds on deposit in the Distribution Account for
payment hereunder and that the Trustee is not liable to the Certificateholders
for any amount payable under this Certificate or the Agreement or, except as
expressly provided in the Agreement, subject to any liability under the
Agreement.
This Certificate does not purport to summarize the Agreement and
reference is made to the Agreement for the interests, rights and limitations of
rights, benefits, obligations and duties evidenced thereby, and the rights,
duties and immunities of the Trustee.
Pursuant to the terms of the Agreement, a distribution will be made on
the 20th day of each month or, if such 20th day is not a Business Day, the
Business Day immediately following (the "Distribution Date"), commencing on the
first Distribution Date specified on the face hereof, to the Person in whose
name this Certificate is registered at the close of business on the applicable
Record Date in an amount equal to the product of the Percentage Interest
evidenced by this Certificate and the amount required to be distributed to
Holders of Certificates of the Class to which this Certificate belongs on such
Distribution Date pursuant to the Agreement.
Distributions on this Certificate shall be made by wire transfer of
immediately available funds to the account of the Holder hereof at a bank or
other entity having appropriate facilities therefor, if such Certificateholder
shall have so notified the Trustee in writing at least five Business Days prior
to the related Record Date and such Certificateholder shall satisfy the
conditions to receive such form of payment set forth in the Agreement, or, if
not, by check mailed by first class mail to the address of such
Certificateholder appearing in the Certificate Register. The final distribution
on each Certificate will be made in like manner, but only upon presentment and
surrender of such Certificate at the Corporate Trust Office or such other
location specified in the notice to Certificateholders of such final
distribution.
The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Trustee and the rights of the Certificateholders under the Agreement at any time
by the Depositor, the Master Servicer and the Trustee with the consent of the
Holders of Certificates affected by such amendment evidencing the requisite
Percentage Interest, as provided in the Agreement. Any such consent by the
Holder of this Certificate shall be conclusive and binding on such Holder and
upon all future Holders of this Certificate and of any Certificate issued upon
the transfer hereof or in exchange therefor or in lieu hereof whether or not
notation of such consent is made upon this Certificate. The Agreement also
permits the amendment thereof, in certain limited circumstances, without the
consent of the Holders of any of the Certificates.
As provided in the Agreement and subject to certain limitations therein
set forth, the transfer of this Certificate is registrable in the Certificate
Register of the Trustee upon surrender of this Certificate for registration of
transfer at the Corporate Trust Office or the office or agency maintained by the
Trustee in New York, New York, accompanied by a written instrument of transfer
in form satisfactory to the Trustee and the Certificate Registrar duly executed
by the holder hereof or such holder's attorney duly authorized in writing, and
thereupon one or more new Certificates of the same
127
Class in authorized denominations and evidencing the same aggregate Percentage
Interest in the Trust Fund will be issued to the designated transferee or
transferees.
The Certificates are issuable only as registered Certificates without
coupons in denominations specified in the Agreement. As provided in the
Agreement and subject to certain limitations therein set forth, Certificates are
exchangeable for new Certificates of the same Class in authorized denominations
and evidencing the same aggregate Percentage Interest, as requested by the
Holder surrendering the same.
No service charge will be made for any such registration of transfer or
exchange, but the Trustee may require payment of a sum sufficient to cover any
tax or other governmental charge payable in connection therewith.
The Depositor, the Master Servicer, the Seller and the Trustee and any
agent of the Depositor or the Trustee may treat the Person in whose name this
Certificate is registered as the owner hereof for all purposes, and neither the
Depositor, the Trustee, nor any such agent shall be affected by any notice to
the contrary.
On any Distribution Date on which the Pool Principal Balance is less
than 10% of the aggregate Cut-off Date Principal Balances of the Mortgage Loans,
the Master Servicer will have the option to repurchase, in whole, from the Trust
Fund all remaining Mortgage Loans and all property acquired in respect of the
Mortgage Loans at a purchase price determined as provided in the Agreement. In
the event that no such optional termination occurs and the Mortgage Loans are
not sold in an Auction Sale for which the Trustee is required to solicit bids in
the event the Master Servicer does not exercise its optional termination right
as more fully described in the Agreement, the obligations and responsibilities
created by the Agreement will terminate upon the later of the maturity or other
liquidation (or any advance with respect thereto) of the last Mortgage Loan
remaining in the Trust Fund or the disposition of all property in respect
thereof and the distribution to Certificateholders of all amounts required to be
distributed pursuant to the Agreement. In no event, however, will the trust
created by the Agreement continue beyond the expiration of 21 years from the
death of the last survivor of the descendants living at the date of the
Agreement of a certain person named in the Agreement.
Any term used herein that is defined in the Agreement shall have the
meaning assigned in the Agreement, and nothing herein shall be deemed
inconsistent with that meaning.
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128
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto ___________________________________________________Please print
or typewrite name and address including postal zip code of assignee)
the Percentage Interest evidenced by the within Certificate and hereby
authorizes the transfer of registration of such Percentage Interest to assignee
on the Certificate Register of the Trust Fund.
I (We) further direct the Trustee to issue a new Certificate of a like
denomination and Class, to the above named assignee and deliver such Certificate
to the following address:
_________________________________________.
Dated:
______________________________________
Signature by or on behalf of assignor
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of distribution:
Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to , , for the account of , account number , or, if
mailed by check, to _______________________________________. Applicable
statements should be mailed to _________________________________________,
________________________________________.
This information is provided by , the assignee named above, or
___________________, as its agent.
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129
STATE OF )
) ss.:
COUNTY OF )
On the day of , 19 before me, a notary public in and for said State,
personally appeared , known to me who, being by me duly sworn, did depose and
say that he executed the foregoing instrument.
-----------------------------
Notary Public
[Notarial Seal]
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130
EXHIBIT F
[RESERVED]
131
EXHIBIT G
FORM OF INITIAL CERTIFICATION OF TRUSTEE
Mellon Residential Funding Corporation, as Depositor
One Mellon Bank Center
000 Xxxxx Xxxxxx
Xxxx 000
Xxxxxxxxxx, XX 00000
Attention: _________________
Mellon Bank, N.A., as Seller and Master Servicer
One Mellon Bank Center
000 Xxxxx Xxxxxx
Xxxx 000
Xxxxxxxxxx, XX 00000
Attention: _________________
Re: Pooling and Servicing Agreement among
Mellon Residential Funding Corporation,
as Depositor, Mellon Bank, N.A. as Seller
and Master Servicer, and Bankers Trust
Company of California, N.A., as Trustee,
Mortgage Pass-Through Certificates, Series 1997-1
Ladies and Gentlemen:
In accordance with Section 2.02 of the above-captioned Pooling and
Servicing Agreement (the "Pooling and Servicing Agreement"), the undersigned, as
Trustee, hereby certifies that, as to each Mortgage Loan listed in the Mortgage
Loan Schedule (other than any Mortgage Loan paid in full or listed on the
attached schedule) it has received:
the original Mortgage Note endorsed in the following form: "Pay to the
order of ______________ without recourse".
Based on its review and examination and only as to the foregoing
documents, such documents appear regular on their face and related to such
Mortgage Loan.
The Trustee has made no independent examination of any documents
contained in each Mortgage File beyond the review specifically required in the
Pooling and Servicing Agreement. The Trustee makes no representations as to: (i)
the validity, legality, sufficiency, enforceability or genuineness of any of the
documents contained in each Mortgage File of any of the Mortgage Loans
identified on the Mortgage Loan Schedule, or (ii) the collectability,
insurability, effectiveness or suitability of any such Mortgage Loan.
132
Capitalized words and phrases used herein shall have the respective
meanings assigned to them in the Pooling and Servicing Agreement.
BANKERS TRUST COMPANY OF CALIFORNIA,
N.A.
as Trustee
By: _________________________________
Name: _______________________________
Title: ________________________________
G-2
133
EXHIBIT H
FORM OF FINAL CERTIFICATION OF TRUSTEE
Mellon Residential Funding Corporation, as Depositor
One Mellon Bank Center
000 Xxxxx Xxxxxx
Xxxx 000
Xxxxxxxxxx, XX 00000
Attention: _________________
Mellon Bank, N.A., as Seller and Master Servicer
One Mellon Bank Center
000 Xxxxx Xxxxxx
Xxxx 000
Xxxxxxxxxx, XX 00000
Attention: _________________
Re: Pooling and Servicing Agreement among
Mellon Residential Funding Corporation,
as Depositor, Mellon Bank, N.A. as Seller
and Master Servicer, and Bankers Trust
Company of California, N.A., as Trustee,
Mortgage Pass-Through Certificates, Series 1997-1
Ladies and Gentlemen:
In accordance with Section 2.02 of the above-captioned Pooling and
Servicing Agreement (the "Pooling and Servicing Agreement"), the undersigned, as
Trustee, hereby certifies that as to each Mortgage Loan listed in the Mortgage
Loan Schedule (other than any Mortgage Loan paid in full or listed on the
attached Document Exception Report) it has received:
(i) the original Mortgage Note endorsed in the form provided in Section
2.01(c) of the Pooling and Servicing Agreement, with all intervening
endorsements showing a complete chain of endorsement from the originator to the
Seller.
(ii) The original recorded Mortgage.
(iii) A duly executed assignment of the Mortgage in the form provided
in Section 2.01(c) of the Pooling and Servicing Agreement, or, if the Depositor
has certified or the Trustee otherwise knows that the related Mortgage has not
been returned from the applicable recording office, a copy of the assignment of
the Mortgage (excluding information to be provided by the recording office).
(iv) The original or duplicate original recorded assignment or
assignments of the Mortgage showing a complete chain of assignment from the
originator to the Seller.
Based on its review and examination and only as to the foregoing
documents, (a) such documents appear regular on their face and related to such
Mortgage Loan, and (b) the information set forth in items (i), (ii), (iii),
(iv), (vi), and (xi) of the definition of the "Mortgage Loan Schedule" in
134
Section 1.01 of the Pooling and Servicing Agreement accurately reflects
information set forth in the Mortgage File.
The Trustee has made no independent examination of any documents
contained in each Mortgage File beyond the review specifically required in the
Pooling and Servicing Agreement. The Trustee makes no representations as to: (i)
the validity, legality, sufficiency, enforceability or genuineness of any of the
documents contained in each Mortgage File of any of the Mortgage Loans
identified on the Mortgage Loan Schedule, or (ii) the collectability,
insurability, effectiveness or suitability of any such Mortgage Loan.
Capitalized words and phrases used herein shall have the respective
meanings assigned to them in the Pooling and Servicing Agreement.
BANKERS TRUST COMPANY OF CALIFORNIA,
N.A.,
as Trustee
By : _________________________________
Name: _______________________________
Title: ________________________________
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135
EXHIBIT I
TRANSFER AFFIDAVIT
Mellon Residential Funding Corporation
Mortgage Pass-Through Certificates
Series 1997-1
STATE OF )
) ss.:
COUNTY OF )
The undersigned, being first duly sworn, deposes and says as follows:
1. The undersigned is an officer of , the proposed Transferee of an
Ownership Interest in a Class R Certificate (the "Certificate") issued pursuant
to the Pooling and Servicing Agreement, (the "Agreement"), relating to the
above-referenced Series, by and among Mellon Residential Funding Corporation, as
depositor (the "Depositor"), Mellon Bank, N.A. as seller and master servicer and
Bankers Trust Company of California, N.A.,, as Trustee. Capitalized terms used,
but not defined herein or in Exhibit 1 hereto, shall have the meanings ascribed
to such terms in the Agreement. The Transferee has authorized the undersigned to
make this affidavit on behalf of the Transferee.
2. The Transferee is, as of the date hereof, and will be, as of the
date of the Transfer, a Permitted Transferee. The Transferee is acquiring its
Ownership Interest in the Certificate either (i) for its own account or (ii) as
nominee, trustee or agent for another Person and has attached hereto an
affidavit from such Person in substantially the same form as this affidavit. The
Transferee has no knowledge that any such affidavit is false.
3. The Transferee has been advised of, and understands that (i) a tax
will be imposed on Transfers of the Certificate to Persons that are not
Permitted Transferees; (ii) such tax will be imposed on the transferor, or, if
such Transfer is through an agent (which includes a broker, nominee or
middleman) for a Person that is not a Permitted Transferee, on the agent; and
(iii) the Person otherwise liable for the tax shall be relieved of liability for
the tax if the subsequent Transferee furnished to such Person an affidavit that
such subsequent Transferee is a Permitted Transferee and, at the time of
Transfer, such Person does not have actual knowledge that the affidavit is
false.
4. The Transferee has been advised of, and understands that a tax will
be imposed on a "pass-through entity" holding the Certificate if at any time
during the taxable year of the pass-through entity a Person that is not a
Permitted Transferee is the record holder of an interest in such entity. The
Transferee understands that such tax will not be imposed for any period with
respect to which the record holder furnishes to the pass-through entity an
affidavit that such record holder is a Permitted Transferee and the pass-through
entity does not have actual knowledge that such affidavit is false. (For this
purpose, a "pass-through entity" includes a regulated investment company, a real
estate investment trust or common trust fund, a partnership, trust or estate,
and certain cooperatives and, except as may be provided in Treasury Regulations,
persons holding interests in pass-through entities as a nominee for another
Person.)
5. The Transferee has reviewed the provisions of Section 5.02(c) of the
Agreement (attached hereto as Exhibit 2 and incorporated herein by reference)
and understands the legal consequences of the acquisition of an Ownership
Interest in the Certificate including, without limitation,
136
the restrictions on subsequent Transfers and the provisions regarding voiding
the Transfer and mandatory sales. The Transferee expressly agrees to be bound by
and to abide by the provisions of Section 5.02(c) of the Agreement and the
restrictions noted on the face of the Certificate. The Transferee understands
and agrees that any breach of any of the representations included herein shall
render the Transfer to the Transferee contemplated hereby null and void.
6. The Transferee agrees to require a Transfer Affidavit from any
Person to whom the Transferee attempts to Transfer its Ownership Interest in the
Certificate, and in connection with any Transfer by a Person for whom the
Transferee is acting as nominee, trustee or agent, and the Transferee will not
Transfer its Ownership Interest or cause any Ownership Interest to be
Transferred to any Person that the Transferee knows is not a Permitted
Transferee. In connection with any such Transfer by the Transferee, the
Transferee agrees to deliver to the Trustee a certificate substantially in the
form set forth as Exhibit J to the Agreement (a "Transferor Certificate") to the
effect that such Transferee has no actual knowledge that the Person to which the
Transfer is to be made is not a Permitted Transferee.
7. The Transferee does not have the intention to impede the assessment
or collection of any tax legally required to be paid with respect to the
Certificate.
8. The Transferee's taxpayer identification number is .
9. The Transferee is a U.S. Person as defined in Code Section
7701(a)(30).
10. The Transferee is aware that the Certificate may be a "noneconomic
residual interest" within the meaning of proposed Treasury regulations
promulgated pursuant to the Code and that the transferor of a noneconomic
residual interest will remain liable for any taxes due with respect to the
income on such residual interest, unless no significant purpose of the transfer
was to impede the assessment or collection of tax.
11. The Transferee is not an employee benefit plan that is subject to
ERISA or a plan that is subject to Section 4975 of the Code, and the Transferee
is not acting on behalf of such a plan.
* * *
I-2
137
IN WITNESS WHEREOF, the Transferee has caused this instrument to be
executed on its behalf, pursuant to authority of its Board of Directors, by its
duly authorized officer and its corporate seal to be hereunto affixed, duly
attested, this day of , 19 .
_________________________________
PRINT NAME OF TRANSFEREE
By: _____________________________
Name:
Title:
[Corporate Seal]
ATTEST:
[Assistant] Secretary
Personally appeared before me the above-named , known or proved to me
to be the same person who executed the foregoing instrument and to be the of the
Transferee, and acknowledged that he executed the same as his free act and deed
and the free act and deed of the Transferee.
Subscribed and sworn before me this _____ day of _________, 19 .
NOTARY PUBLIC
My Commission expires the ____ day of ________________, 19__.
I-3
138
EXHIBIT 1
to EXHIBIT I
Certain Definitions
"Ownership Interest": As to any Certificate, any ownership interest in
such Certificate, including any interest in such Certificate as the Holder
thereof and any other interest therein, whether direct or indirect, legal or
beneficial.
"Permitted Transferee": Any Person other than (i) the United States,
any State or political subdivision thereof, or any agency or instrumentality of
any of the foregoing, (ii) a foreign government, International Organization or
any agency or instrumentality of either of the foregoing, (iii) an organization
(except certain farmers' cooperatives described in Code Section 521) which is
exempt from tax imposed by Chapter 1 of the Code (including the tax imposed by
Code Section 511 on unrelated business taxable income) on any excess inclusions
(as defined in Code Section 860E(c)(1)) with respect to any Class R Certificate,
(iv) rural electric and telephone cooperatives described in Code Section
1381(a)(2)(c), (v) a Person that is not a citizen or resident of the United
States, a corporation, partnership, or other entity created or organized in or
under the laws of the United States or any political subdivision thereof, or an
estate or trust whose income from sources without the United States is
includible in gross income for United States federal income tax purposes
regardless of its connection with the conduct of a trade or business within the
United States, and (vi) any other Person so designated by the Trustee based upon
an Opinion of Counsel that the Transfer of an Ownership Interest in a Class R
Certificate to such Person may cause the Trust Fund to fail to qualify as a
REMIC at any time that certain Certificates are Outstanding. The terms "United
States," "State" and "International Organization" shall have the meanings set
forth in Code Section 7701 or successor provisions. A corporation will not be
treated as an instrumentality of the United States or of any State or political
subdivision thereof if all of its activities are subject to tax, and, with the
exception of the FHLMC, a majority of its board of directors is not selected by
such governmental unit.
"Person": Any individual, corporation, partnership, joint venture,
bank, joint stock company, trust (including any beneficiary thereof),
unincorporated organization or government or any agency or political subdivision
thereof.
"Transfer": Any direct or indirect transfer or sale of any Ownership
Interest in a Certificate, including the acquisition of a Certificate by the
Depositor.
"Transferee": Any Person who is acquiring by Transfer any Ownership
Interest in a Certificate.
139
EXHIBIT 2
to EXHIBIT I
Section 5.02(c) of the Agreement
(a) Each Person who has or who acquires any Ownership Interest in a
Class R Certificate shall be deemed by the acceptance or acquisition of such
Ownership Interest to have agreed to be bound by the following provisions, and
the rights of each Person acquiring any Ownership Interest in a Class R
Certificate are expressly subject to the following provisions:
(i) Each Person holding or acquiring any Ownership Interest in a Class
R Certificate shall be a Permitted Transferee and shall promptly notify the
Trustee of any change or impending change in its status as a Permitted
Transferee.
(ii) No Ownership Interest in a Class R Certificate may be registered
on the Closing Date or thereafter transferred, and the Trustee shall not
register the Transfer of any Class R Certificate unless, in addition to the
certificates required to be delivered to the Trustee under subparagraph (b)
above, the Trustee shall have been furnished with an affidavit (a "Transfer
Affidavit") of the initial owner or the proposed transferee in the form
attached hereto as Exhibit I.
(iii) Each Person holding or acquiring any Ownership Interest in a
Class R Certificate shall agree (A) to obtain a Transfer Affidavit from any
other Person to whom such Person attempts to Transfer its Ownership Interest
in a Class R Certificate, (B) to obtain a Transfer Affidavit from any Person
for whom such Person is acting as nominee, trustee or agent in connection
with any Transfer of a Class R Certificate and (C) not to Transfer its
Ownership Interest in a Class R Certificate or to cause the Transfer of an
Ownership Interest in a Class R Certificate to any other Person if it has
actual knowledge that such Person is not a Permitted Transferee.
(iv) Any attempted or purported Transfer of any Ownership Interest in a
Class R Certificate in violation of the provisions of this Section 5.02(c)
shall be absolutely null and void and shall vest no rights in the purported
Transferee. If any purported transferee shall become a Holder of a Class R
Certificate in violation of the provisions of this Section 5.02(c), then the
last preceding Permitted Transferee shall be restored to all rights as
Holder thereof retroactive to the date of registration of Transfer of such
Class R Certificate. The Trustee shall be under no liability to any Person
for any registration of Transfer of a Class R Certificate that is in fact
not permitted by Section 5.02(b) and this Section 5.02(c) or for making any
payments due on such Certificate to the Holder thereof or taking any other
action with respect to such Holder under the provisions of this Agreement so
long as the Transfer was registered after receipt of the related Transfer
Affidavit, Transferor Certificate and either the Rule 144A Letter or the
Investment Letter. The Trustee shall be entitled but not obligated to
recover from any Holder of a Class R Certificate that was in fact not a
Permitted Transferee at the time it became a Holder or, at such subsequent
time as it became other than a Permitted Transferee, all payments made on
such Class R Certificate at and after either such time. Any such payments so
recovered by the Trustee shall be paid and delivered by the Trustee to the
last preceding Permitted Transferee of such Certificate.
140
(v) The Depositor shall use its best efforts to make available, upon
receipt of written request from the Trustee, all information necessary to
compute any tax imposed under Section 860E(e) of the Code as a result of a
Transfer of an Ownership Interest in a Class R Certificate to any Holder who
is not a Permitted Transferee.
141
EXHIBIT J
FORM OF TRANSFEROR CERTIFICATE
---------------------
Date
Mellon Residential Funding Corporation
One Mellon Bank Center
000 Xxxxx Xxxxxx, Xxxx 000
Xxxxxxxxxx, XX 00000
Attention:
Bankers Trust Company of California, N.A.
0 Xxxx Xxxxx, 00xx Xxxxx
Xxxxxx, XX 00000
Attention: Mellon HEL Trust 1997-1
Re: Mellon Residential Funding Corporation
Mortgage Pass-Through Certificates,
Series 1997-1, Class
Ladies and Gentlemen:
In connection with our disposition of the above Certificates we certify
that (a) we understand that the Certificates have not been registered under the
Securities Act of 1933, as amended (the "Act"), and are being disposed by us in
a transaction that is exempt from the registration requirements of the Act, (b)
we have not offered or sold any Certificates to, or solicited offers to buy any
Certificates from, any person, or otherwise approached or negotiated with any
person with respect thereto, in a manner that would be deemed, or taken any
other action which would result in, a violation of Section 5 of the Act and (c)
to the extent we are disposing of a Class R Certificate, we have no knowledge
the Transferee is not a Permitted Transferee.
Very truly yours,
___________________________
Print Name of Transferor
By: ______________________
Authorized Officer
142
EXHIBIT K
FORM OF INVESTMENT LETTER (NON-RULE 144A)
---------------------------
Date
Mellon Residential Funding Corporation
One Mellon Bank Center
000 Xxxxx Xxxxxx, Xxxx 000
Xxxxxxxxxx, XX 00000
Attention:
Bankers Trust Company of California, N.A.
0 Xxxx Xxxxx, 00xx Xxxxx
Xxxxxx, XX 00000
Attention: Mellon HEL Trust 1997-1
Re: Mellon Residential Funding Corporation
Mortgage Pass-Through Certificates,
Series 1997-1, Class
Ladies and Gentlemen:
In connection with our acquisition of the above Certificates we certify
that (a) we understand that the Certificates are not being registered under the
Securities Act of 1933, as amended (the "Act"), or any state securities laws and
are being transferred to us in a transaction that is exempt from the
registration requirements of the Act and any such laws, (b) we are an
"accredited investor," as defined in Regulation D under the Act, and have such
knowledge and experience in financial and business matters that we are capable
of evaluating the merits and risks of investments in the Certificates, (c) we
have had the opportunity to ask questions of and receive answers from the
Depositor concerning the purchase of the Certificates and all matters relating
thereto or any additional information deemed necessary to our decision to
purchase the Certificates, (d) we are not an employee benefit plan that is
subject to the Employee Retirement Income Security Act of 1974, as amended, or a
plan or arrangement that is subject to Section 4975 of the Internal Revenue Code
of 1986, as amended, nor are we acting on behalf of any such plan or
arrangement, nor are we using the assets of any such plan or arrangement to
effect such acquisition, (e) we are acquiring the Certificates for investment
for our own account and not with a view to any distribution of such Certificates
(but without prejudice to our right at all times to sell or otherwise dispose of
the Certificates in accordance with clause (g) below), (f) we have not offered
or sold any Certificates to, or solicited offers to buy any Certificates from,
any person, or otherwise approached or negotiated with any person with respect
thereto, or taken any other action which would result in a violation of Section
5 of the Act, and (g) we will not sell, transfer or otherwise dispose of any
Certificates unless (1) such sale, transfer or other disposition is made
pursuant to an effective registration statement under the Act or is exempt from
such registration requirements, and if requested, we will at our expense provide
an opinion of counsel satisfactory to the addressees of this Certificate that
such sale, transfer or other disposition may be made pursuant to an exemption
from the Act, (2) the purchaser or transferee of such Certificate has executed
and delivered to you a certificate to substantially the same
143
effect as this certificate, and (3) the purchaser or transferee has otherwise
complied with any conditions for transfer set forth in the Pooling and Servicing
Agreement.
Very truly yours,
______________________________
Print Name of Transferee
By: ____________________________
Authorized Officer
K-2
144
EXHIBIT L
FORM OF RULE 144A LETTER
------------------------
Date
Mellon Residential Funding Corporation
One Mellon Bank Center
000 Xxxxx Xxxxxx, Xxxx 000
Xxxxxxxxxx, XX 00000
Attention:
Bankers Trust Company of California, N.A.
0 Xxxx Xxxxx, 00xx Xxxxx
Xxxxxx, XX 00000
Attention: Mellon HEL Trust 1997-1
Re: Mellon Residential Funding Corporation
Mortgage Pass-Through Certificates,
Series 1997-1, Class
Ladies and Gentlemen:
In connection with our acquisition of the above Certificates we certify
that (a) we understand that the Certificates are not being registered under the
Securities Act of 1933, as amended (the "Act"), or any state securities laws and
are being transferred to us in a transaction that is exempt from the
registration requirements of the Act and any such laws, (b) we have such
knowledge and experience in financial and business matters that we are capable
of evaluating the merits and risks of investments in the Certificates, (c) we
have had the opportunity to ask questions of and receive answers from the
Depositor concerning the purchase of the Certificates and all matters relating
thereto or any additional information deemed necessary to our decision to
purchase the Certificates, (d) we are not an employee benefit plan that is
subject to the Employee Retirement Income Security Act of 1974, as amended, or a
plan or arrangement that is subject to Section 4975 of the Internal Revenue Code
of 1986, as amended, nor are we acting on behalf of any such plan or
arrangement, nor are we using the assets of any such plan or arrangement to
effect such acquisition, (e) we have not, nor has anyone acting on our behalf
offered, transferred, pledged, sold or otherwise disposed of the Certificates,
any interest in the Certificates or any other similar security to, or solicited
any offer to buy or accept a transfer, pledge or other disposition of the
Certificates, any interest in the Certificates or any other similar security
from, or otherwise approached or negotiated with respect to the Certificates,
any interest in the Certificates or any other similar security with, any person
in any manner, or made any general solicitation by means of general advertising
or in any other manner, or taken any other action, that would constitute a
distribution of the Certificates under the Securities Act or that would render
the disposition of the Certificates a violation of Section 5 of the Securities
Act or require registration pursuant thereto, nor will act, nor has authorized
or will authorize any person to act, in such manner with respect to the
Certificates, (f) we are a "qualified institutional buyer" as that term is
defined in Rule 144A under the Securities Act and have completed either of the
forms of certification to that effect attached hereto as Annex 1 or Annex 2. We
are aware that the sale to us is being made in reliance on Rule 144A. We are
acquiring the Certificates
145
for our own account or for resale pursuant to Rule 144A and further, understand
that such Certificates may be resold, pledged or transferred only (i) to a
person reasonably believed to be a qualified institutional buyer that purchases
for its own account or for the account of a qualified institutional buyer to
whom notice is given that the resale, pledge or transfer is being made in
reliance on Rule 144A, or (ii) pursuant to another exemption from registration
under the Securities Act.
L-2
146
ANNEX 1 TO EXHIBIT L
QUALIFIED INSTITUTIONAL BUYER STATUS UNDER SEC RULE 144A
[For Transferees Other Than Registered Investment Companies]
The undersigned (the "Buyer") hereby certifies as follows to the
parties listed in the Rule 144A Transferee Certificate to which this
certification relates with respect to the Certificates described therein:
1. As indicated below, the undersigned is the President, Chief
Financial Officer, Senior Vice President or other executive officer of the
Buyer.
2. In connection with purchases by the Buyer, the Buyer is a "qualified
institutional buyer" as that term is defined in Rule 144A under the Securities
Act of 1933, as amended ("Rule 144A") because (i) the Buyer owned and/or
invested on a discretionary basis either at least $100,000 in securities or, if
Buyer is a dealer, Buyer must own and/or invest on a discretionary basis at
least $10,000,000 in securities (except for the excluded securities referred to
below) as of the end of the Buyer's most recent fiscal year (such amount being
calculated in accordance with Rule 144A and (ii) the Buyer satisfies the
criteria in the category marked below.
___ Corporation, etc. The Buyer is a corporation (other than a
bank, savings and loan association or similar institution),
Massachusetts or similar business trust, partnership, or
charitable organization described in Section 501(c)(3) of the
Internal Revenue Code of 1986, as amended.
___ Bank. The Buyer (a) is a national bank or banking institution
organized under the laws of any State, territory or the
District of Columbia, the business of which is substantially
confined to banking and is supervised by the State or
territorial banking commission or similar official or is a
foreign bank or equivalent institution, and (b) has an audited
net worth of at least $25,000,000 as demonstrated in its
latest annual financial statements, a copy of which is
attached hereto.
___ Savings and Loan. The Buyer (a) is a savings and loan
association, building and loan association, cooperative bank,
homestead association or similar institution, which is
supervised and examined by a State or Federal authority having
supervision over any such institutions or is a foreign savings
and loan association or equivalent institution and (b) has an
audited net worth of at least $25,000,000 as demonstrated in
its latest annual financial statements, a copy of which is
attached hereto.
___ Broker-dealer. The Buyer is a dealer registered pursuant to
Section 15 of the Securities Exchange Act of 1934.
___ Insurance Company. The Buyer is an insurance company whose
primary and predominant business activity is the writing of
insurance or the reinsuring of risks underwritten by insurance
companies and which is subject to supervision by the insurance
commissioner or a similar official or agency of a State,
territory or the District of Columbia.
L-3
147
___ State or Local Plan. The Buyer is a plan established and
maintained by a State, its political subdivisions, or any
agency or instrumentality of the State or its political
subdivisions, for the benefit of its employees.
___ ERISA Plan. The Buyer is an employee benefit plan within the
meaning of Title I of the Employee Retirement Income Security
Act of 1974.
___ Investment Advisor. The Buyer is an investment advisor
registered under the Investment Advisors Act of 1940.
___ Small Business Investment Company. Buyer is a small business
investment company licensed by the U.S. Small Business
Administration under Section 301(c) or (d) of the Small
Business Investment Act of 1958.
___ Business Development Company. Buyer is a business development
company as defined in Section 202(a)(22) of the Investment
Advisors Act of 1940.
3. The term "securities" as used herein does not include (i) securities
of issuers that are affiliated with the Buyer, (ii) securities that are part of
an unsold allotment to or subscription by the Buyer, if the Buyer is a dealer,
(iii) securities issued or guaranteed by the U.S. or any instrumentality
thereof, (iv) bank deposit notes and certificates of deposit, (v) loan
participations, (vi) repurchase agreements, (vii) securities owned but subject
to a repurchase agreement and (viii) currency, interest rate and commodity
swaps.
4. For purposes of determining the aggregate amount of securities owned
and/or invested on a discretionary basis by the Buyer, the Buyer used the cost
of such securities to the Buyer and did not include any of the securities
referred to in the preceding paragraph, except (i) where the Buyer reports its
securities holdings in its financial statements on the basis of their market
value, and (ii) no current information with respect to the cost of those
securities has been published. If clause (ii) in the preceding sentence applies,
the securities may be valued at market. Further, in determining such aggregate
amount, the Buyer may have included securities owned by subsidiaries of the
Buyer, but only if such subsidiaries are consolidated with the Buyer in its
financial statements prepared in accordance with generally accepted accounting
principles and if the investments of such subsidiaries are managed under the
Buyer's direction. However, such securities were not included if the Buyer is a
majority-owned, consolidated subsidiary of another enterprise and the Buyer is
not itself a reporting company under the Securities Exchange Act of 1934, as
amended.
5. The Buyer acknowledges that it is familiar with Rule 144A and
understands that the seller to it and other parties related to the Certificates
are relying and will continue to rely on the statements made herein because one
or more sales to the Buyer may be in reliance on Rule 144A.
6. Until the date of purchase of the Rule 144A Securities, the Buyer
will notify each of the parties to which this certification is made of any
changes in the information and conclusions herein. Until such notice is given,
the Buyer's purchase of the Certificates will constitute a reaffirmation of this
certification as of the date of such purchase. In addition, if the Buyer is a
bank or savings and loan is provided above, the Buyer agrees that it will
furnish to such parties updated annual financial statements promptly after they
become available.
---------------------------------------
Print Name of Buyer
L-4
148
By: ___________________________________
Name:
Title:
Date: ______________________
X-0
000
XXXXX 2 TO EXHIBIT L
QUALIFIED INSTITUTIONAL BUYER STATUS UNDER SEC RULE 144A
[For Transferees That are Registered Investment Companies]
The undersigned (the "Buyer") hereby certifies as follows to the
parties listed in the Rule 144A Transferee Certificate to which this
certification relates with respect to the Certificates described therein:
1. As indicated below, the undersigned is the President, Chief
Financial Officer or Senior Vice President of the Buyer or, if the Buyer is a
"qualified institutional buyer" as that term is defined in Rule 144A under the
Securities Act of 1933, as amended ("Rule 144A") because Buyer is part of a
Family of Investment Companies (as defined below), is such an officer of the
Adviser.
2. In connection with purchases by Buyer, the Buyer is a "qualified
institutional buyer" as defined in SEC Rule 144A because (i) the Buyer is an
investment company registered under the Investment Company Act of 1940, as
amended and (ii) as marked below, the Buyer alone, or the Buyer's Family of
Investment Companies, owned at least $100,000,000 in securities (other than the
excluded securities referred to below) as of the end of the Buyer's most recent
fiscal year. For purposes of determining the amount of securities owned by the
Buyer or the Buyer's Family of Investment Companies, the cost of such securities
was used, except (i) where the Buyer or the Buyer's Family of Investment
Companies reports its securities holdings in its financial statements on the
basis of their market value, and (ii) no current information with respect to the
cost of those securities has been published. If clause (ii) in the preceding
sentence applies, the securities may be valued at market.
___ The Buyer owned $ in securities (other than the excluded
securities referred to below) as of the end of the Buyer's
most recent fiscal year (such amount being calculated in
accordance with Rule 144A).
___ The Buyer is part of a Family of Investment Companies which
owned in the aggregate $ in securities (other than the
excluded securities referred to below) as of the end of the
Buyer's most recent fiscal year (such amount being calculated
in accordance with Rule 144A).
3. The term "Family of Investment Companies" as used herein means two
or more registered investment companies (or series thereof) that have the same
investment adviser or investment advisers that are affiliated (by virtue of
being majority owned subsidiaries of the same parent or because one investment
adviser is a majority owned subsidiary of the other).
4. The term "securities" as used herein does not include (i) securities
of issuers that are affiliated with the Buyer or are part of the Buyer's Family
of Investment Companies, (ii) securities issued or guaranteed by the U.S. or any
instrumentality thereof, (iii) bank deposit notes and certificates of deposit,
(iv) loan participations, (v) repurchase agreements, (vi) securities owned but
subject to a repurchase agreement and (vii) currency, interest rate and
commodity swaps.
5. The Buyer is familiar with Rule 144A and under-stands that the
parties listed in the Rule 144A Transferee Certificate to which this
certification relates are relying and will continue to
L-6
150
rely on the statements made herein because one or more sales to the Buyer will
be in reliance on Rule 144A. In addition, the Buyer will only purchase for the
Buyer's own account.
6. Until the date of purchase of the Certificates, the undersigned will
notify the parties listed in the Rule 144A Transferee Certificate to which this
certification relates of any changes in the information and conclusions herein.
Until such notice is given, the Buyer's purchase of the Certificates will
constitute a reaffirmation of this certification by the undersigned as of the
date of such purchase.
___________________________________
Print Name of Buyer or Adviser
By: ____________________________
Name:
Title:
IF AN ADVISER:
_____________________________________
Print Name of Buyer
Date: _________________
L-7
151
EXHIBIT M
REQUEST FOR RELEASE
(for Trustee)
MELLON RESIDENTIAL FUNDING CORPORATION
Mortgage Pass-Through Certificates
Series 1997-1
Loan Information
Name of Mortgagor: ___________________________________
Servicer
Loan No.: ___________________________________
Trustee
Name: ___________________________________
Address: ___________________________________
___________________________________
Trustee
Mortgage File No.: ___________________________________
The undersigned Master Servicer hereby acknowledges that it has
received from Bankers Trust Company of California, N.A., as Trustee for the
Holders of Mortgage Pass-Through Certificates, of the above-referenced Series,
the documents referred to below (the "Documents"). All capitalized terms not
otherwise defined in this Request for Release shall have the meanings given them
in the Pooling and Servicing Agreement (the "Pooling and Servicing Agreement")
relating to the above-referenced Series among the Trustee, Mellon Bank, N.A., as
Seller and Master Servicer and Mellon Residential Funding Corporation., as
Depositor.
( ) Mortgage Note dated ____________, 19 , in the original
principal sum of $__________, made by
__________________payable to, or endorsed to the order of, the
Trustee.
( ) Mortgage recorded on _________________ as instrument no.
_____________________ in the County Recorder's Office of the
County of ___________________, State of _______________ in
book/reel/docket ________________ of official records at
page/image ________________.
( ) Deed of Trust recorded on __________________ as instrument no.
_________________ in the County Recorder's Office of the
County of _______________ , State of _______________ in
book/reel/docket _______________ of official records at
page/image ________________.
( ) Assignment of Mortgage or Deed of Trust to the Trustee,
recorded on _________________ as instrument no. ____________
in the County Recorder's Office of the County of __________,
State of ________________ in book/reel/docket _______________
of official records at page/image _______________.
( ) Other documents, including any amendments, assignments or
other assumptions of the Mortgage Note or Mortgage.
152
( ) ______________________________________________________________
( ) ______________________________________________________________
( ) ______________________________________________________________
( ) ______________________________________________________________
The undersigned Master Servicer hereby acknowledges and agrees as
follows:
(1) The Master Servicer shall hold and retain possession of the
Documents in trust for the benefit of the Trustee, solely for the purposes
provided in the Agreement.
(2) The Master Servicer shall not cause or knowingly permit the
Documents to become subject to, or encumbered by, any claim, liens, security
interest, charges, writs of attachment or other impositions nor shall the Master
Servicer assert or seek to assert any claims or rights of setoff to or against
the Documents or any proceeds thereof.
(3) The Master Servicer shall return each and every Document previously
requested from the Mortgage File to the Trustee when the need therefor no longer
exists, unless the Mortgage Loan relating to the Documents has been liquidated
and the proceeds thereof have been remitted to the Certificate Account and
except as expressly provided in the Agreement.
(4) The Documents and any proceeds thereof, including any proceeds of
proceeds, coming into the possession or control of the Master Servicer shall at
all times be earmarked for the account of the Trustee, and the Master Servicer
shall keep the Documents and any proceeds separate and distinct from all other
property in the Master Servicer's possession, custody or control.
_________________________________
By ______________________________
Its _____________________________
Date: ______________, 19__
M-2
153
EXHIBIT N
REQUEST FOR RELEASE OF DOCUMENTS
To: Bankers Trust Company of California, N.A. Attn: Mortgage Custody Services
Re: The Pooling & Servicing Agreement dated as of September 30,
1997 among Mellon Bank, N.A., as Seller and as Master
Servicer, Mellon Residential Funding Corporation, as
Depositor, and Bankers Trust Company of California, N.A., as
Trustee
Ladies and Gentlemen:
In connection with the administration of the Mortgage Loans held by you
as Trustee for Mellon Residential Funding Corporation, we request the release of
the Mortgage Loan File for the Mortgage Loan(s) described below, for the reason
indicated.
FT Account #: Pool #:
Mortgagor's Name, Address and Zip Code:
Mortgage Loan Number:
Reason for Requesting Documents (check one)
1. Mortgage Loan paid in full (__________________ hereby
certifies that all amounts have been received.)
2. Mortgage Loan Liquidated (__________________ hereby certifies
that all proceeds of foreclosure, insurance, or other
liquidation have been finally received.)
3. Mortgage Loan in Foreclosure.
4. Mortgage Loan repurchased (Master Servicer hereby certifies
that the Purchase Price has been deposited in the Certificate
Account).
5. Other (explain):
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If item 1 or 2 above is checked, and if all or part of the Mortgage
File was previously released to us, please release to us our previous receipt on
file with you, as well as any additional documents in your possession relating
to the above-specified Mortgage Loan. If item 3 or 4 is checked, upon return of
all of the above documents to you as Trustee, please acknowledge your receipt by
signing in the space indicated below, and returning this form.
__________________________________.
__________________________________.
___________________________________
By: __________________________________
Name: ________________________________
Title: _________________________________
Date: _________________________________
TRUSTEE CONSENT TO RELEASE AND
ACKNOWLEDGMENT OF RECEIPT
By: __________________________________
Name: ________________________________
Title: _________________________________
Date: _________________________________
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EXHIBIT P
AUCTION PROCEDURES
Pre-Auction Process
a. On or about the Auction Commencement Date, a plan of complete
liquidation with respect to the REMIC will be adopted by the
Trustee at the direction of the Master Servicer in order to
satisfy the REMIC Provisions, and the Trustee will notify X.X.
Xxxxxx Securities Inc. as the advisor to the Trustee with
respect to the assets of the proposed auction.
b. Upon receiving notice of the proposed auction, X.X. Xxxxxx
Securities Inc. will initiate its general auction procedures
consisting of the following: (i) with the assistance of the
Master Servicer, prepare a general solicitation package along
with a confidentiality agreement; (ii) prepare a list of
Qualified Bidders in a commercially reasonable manner; (iii)
initiate contact with all Qualified Bidders; (iv) send a
confidentiality agreement to all Qualified Bidders; (v) upon
receipt of a signed confidentiality agreement, send
solicitation packages to all interested Qualified Bidders on
behalf of the Trustee; and (vi) notify the Master Servicer of
all potential Qualified Bidders and anticipated timetable.
c. The general solicitation package will include: (i) the
Prospectus; (ii) a copy of all monthly servicing reports or a
copy of all annual servicing reports and the prior years'
monthly servicing reports; (iii) a form of a Purchase and Sale
Agreement and Servicing Agreement; (iv) a description of the
minimum purchase price required to cause the Trustee to sell
the assets of the REMIC as set forth in Section 9.02 of the
Pooling and Servicing Agreement; (v) a formal bidsheet; (vi) a
detailed timetable; and (vii) a preliminary data tape of the
Mortgage Pool as of the succeeding Distribution Date
reflecting the same data attributes used to create the
original Cut-off Date tables for the Prospectus.
d. The Trustee, with the assistance of the Master Servicer and
X.X. Xxxxxx Securities Inc. will maintain an auction package,
which will contain items (i)-(iii) listed in the preceding
paragraph. If X.X. Xxxxxx Securities Inc. is unable or
unwilling to perform its role as advisor to the Trustee, the
Master Servicer, acting in its capacity as Master Servicer
under the Pooling and Servicing Agreement, will select a
successor advisor and inform the Trustee of the successor
advisor.
e. X.X. Xxxxxx Securities Inc. will send solicitation packages to
all Qualified Bidders no later than the Distribution Date
succeeding the Auction Commencement Date. Qualified Bidders
will be required to submit any due diligence questions in
writing to X.X. Xxxxxx Securities Inc., for determination of
their relevancy, no later than fifteen (15) Business Days
before the second succeeding Distribution Date (such date, the
"Auction Date"). The Master Servicer and X.X. Xxxxxx
Securities Inc. will be required
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to satisfy all relevant questions at least five (5) Business
Days prior to the Auction Date and distribute the questions
and answers to all Qualified Bidders.
I. Auction Process
a. X.X. Xxxxxx Securities Inc., in its role as advisor to the
Trustee, will be allowed to bid in the auction, but will not
be required to do so.
b. On the Auction Date, all bids will be due by facsimile to such
office as shall be designated by the Trustee by 1:00 p.m. EST;
with the winning Qualified Bidders to be notified by 3:00 p.m.
EST. All acceptable bids (as described in Section 9.02 of the
Pooling and Servicing Agreement) will be due on a conforming
basis on the bid sheet contained in the solicitation package.
c. If the Trustee receives fewer than two fair market value bids
from Qualified Bidders in the manufactured housing market, the
Trustee shall decline to consummate the sale.
d. X.X. Xxxxxx Securities Inc., in its capacity as advisor to the
Trustee, will provide to the Trustee and the Master Servicer a
letter concluding whether or not the winning bid is a fair
market value bid. X.X. Xxxxxx Securities Inc. will also
provide this letter if it is the winning Qualified Bidder. In
the case where X.X. Xxxxxx Securities Inc. is the winning
Qualified Bidder, it will provide in its letter for market
comparables and valuations.
e. As provided in Section 9.02 of the Pooling and Servicing
Agreement, the Master Servicer may exercise its option to
purchase the assets of the Trust Fund at a price equal to the
winning bid.
f. If the Master Servicer declines to exercise such option, upon
notification to the winning Qualified Bidder, a one percent
(1%) good faith deposit of the aggregate Stated Principal
Balances of the Mortgage Loans as of the last day of the
preceding Due Period will be required to be wired to the
Trustee upon acceptance of the bid, such acceptance to be
received by 5:00 p.m. EST on the Auction Date. This deposit,
along with any interest income attributable to it, will be
credited to the purchase price, but will not be refundable. In
the event the Auction Termination does not occur, such
deposit, together with interest income accrued on it, will be
applied toward the reimbursement of fees and expenses incurred
by the Trustee in connection with the Auction Termination. The
Trustee will establish a separate account for the acceptance
of the good faith deposit, until such time as the account is
fully funded and all monies are transferred into the
Certificate Account, such time not to exceed one (1) Business
Day before the second succeeding Distribution Date.
g. The winning Qualified Bidder will receive on the Auction Date
a copy of the draft Purchase and Sale Agreement, Servicing
Agreement and Master Servicer's representations and warranties
(which shall be substantially similar to the representations
and warranties set forth in Section 2.03 of the Pooling and
Servicing Agreement).
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h. The auction will stipulate that the Master Servicer or a
successor master servicer be retained to service the Mortgage
Loans sold pursuant to the terms of the Purchase and Sale
Agreement and Servicing Agreement.
II. Modification of Auction Procedures
The Trustee, the Master Servicer and X.X. Xxxxxx Securities Inc.,
without the giving of notice to or the receipt of the consent of
Holders of the Certificates, may, at any time, modify the Auction
Procedures described in clauses (I) and (II) above.
III. Fees of X.X. Xxxxxx Securities Inc. or successor advisor
The Trustee will pay X.X. Xxxxxx Securities Inc. or a successor advisor
a fee based upon X.X. Xxxxxx Securities Inc.'s or the successor
advisor's hourly consulting rates at the time of the Auction
Termination as compensation for X.X. Xxxxxx Securities Inc.'s or the
successor advisor's services in connection with the Auction
Termination. Such fee shall be reimbursed to the Trustee in accordance
with Section 9.02 of the Pooling and Servicing Agreement.
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