<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
-----
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15 (d)
OF THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (date of earliest event reported) December 24, 1998
MELLON RESIDENTIAL FUNDING
--------------------------
(Exact name of registrant as specified in its charter)
Delaware 333-24453 23-2889067
-------- --------- ----------
(State or other (Commission (IRS Employer
jurisdiction of incorporation) File Number) ID Number)
One Mellon Center, Room 410, Pittsburgh, Pennsylvania 15258
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(Address of principal executive offices) (Zip Code)
Registrant's Telephone Number, including area code: (412) 236-6559
--------------
N/A
---
(Former name or former address, if changed since last report)
<PAGE> 2
Item 5. Other Events.
-------------
Filing of Pooling and Servicing Agreement.
- ------------------------------------------
Mellon Residential Funding Corporation (the "Depositor") registered
issuances of up to $2,000,000,000 principal amount of Mortgage Pass-Through
Certificates on a delayed or continuous basis pursuant to Rule 415 of the
Securities Act of 1933, as amended (the "Act"), by a Registration Statement on
Form S-3 (Registration File No. 333-24453) (as amended, the "Registration
Statement"). Pursuant to the Registration Statement, approximately $306,925,523
principal amount of Mortgage Pass-Through Certificates, Series 1998-TBC1 (the
"Certificates") were issued on December 17, 1998.
The Certificates were issued pursuant to a Pooling and Servicing
Agreement, dated as of December 1, 1998 (the "Pooling and Servicing Agreement"),
among the Depositor, Boston Safe Deposit and Trust Company, as seller (in such
capacity, the "Seller") and master servicer (in such capacity, the "Master
Servicer"), Mellon Bank, N.A., as standby purchaser (the "Standby
Purchaser"),and Bankers Trust Company of California, N.A., as trustee (the
"Trustee").
This Current Report on Form 8-K is being filed to file a copy of the
Pooling and Servicing Agreement.
-2-
<PAGE> 3
Item 7. Financial Statements, Pro Forma Financial Information and Exhibits.
-------------------------------------------------------------------
(a) Not applicable.
(b) Not applicable.
(c) Exhibits:
4.1 Pooling and Servicing Agreement, dated as of December 1, 1998,
among Mellon Residential Funding Corporation, as Depositor,
Boston Safe Deposit and Trust Company, as Seller and Master
Servicer, Mellon Bank, N.A., as Standby Purchaser, and Bankers
Trust Company, N.A., as Trustee.
-3-
<PAGE> 4
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
MELLON RESIDENTIAL FUNDING
By: /s/ Stephen Cobain
-----------------------
Name: Stephen Cobain
Title: President
Dated: December 24, 1998
<PAGE> 5
EXHIBIT INDEX
Exhibit Page
- ------- ----
4.1 Pooling and Servicing Agreement, dated as of December 1, 1998,
among Mellon Residential Funding Corporation, as Depositor,
Boston Safe Deposit and Trust Company, as Seller and Master
Servicer, Mellon Bank, N.A., as Standby Purchaser, and Bankers
Trust Company of California, N.A., as Trustee.
<PAGE> 1
Exhibit 4.1
MELLON RESIDENTIAL FUNDING CORPORATION,
Depositor
BOSTON SAFE DEPOSIT AND TRUST COMPANY,
Seller and Master Servicer
MELLON BANK, N.A.,
Standby Purchaser
and
BANKERS TRUST COMPANY OF CALIFORNIA, N.A.,
Trustee
-----------------------------------
POOLING AND SERVICING AGREEMENT
Dated as of December 1, 1998
----------------------------------
MORTGAGE PASS-THROUGH CERTIFICATES, Series 1998-TBC1
<PAGE> 2
TABLE OF CONTENTS
Page
ARTICLE I
DEFINITIONS
ARTICLE II
CONVEYANCE OF MORTGAGE LOANS
SECTION 2.01. Conveyance of Mortgage Loans...................................32
SECTION 2.02. Acceptance by Trustee of the Mortgage Loans....................34
SECTION 2.03. Representations, Warranties and Covenants of the
Seller and Master Servicer.....................................36
SECTION 2.04. Representations and Warranties of the Depositor as to
the Mortgage Loans.............................................38
SECTION 2.05. Delivery of Opinion of Counsel in Connection with
Substitutions..................................................38
SECTION 2.06. Execution and Delivery of Certificates.........................39
SECTION 2.07. REMIC Matters..................................................39
ARTICLE III
ADMINISTRATION AND SERVICING
SECTION 3.01. Master Servicer to Service Mortgage Loans......................39
SECTION 3.02. Subservicing; Enforcement of the Obligations of
Servicers......................................................40
SECTION 3.03. Rights of the Depositor and the Trustee in Respect of
the Master Servicer............................................41
SECTION 3.04. Trustee to Act as Master Servicer..............................41
SECTION 3.05. Collection of Mortgage Loan Payments; Certificate
Account; Distribution Account..................................42
SECTION 3.06. Collection of Taxes, Assessments and Similar Items;
Escrow Accounts; Maintenance of Records........................44
SECTION 3.07. Access to Certain Documentation and Information
Regarding the Mortgage Loans...................................45
SECTION 3.08. Permitted Withdrawals from the Certificate Account and
Distribution Account...........................................45
SECTION 3.09. Maintenance of Hazard Insurance................................47
SECTION 3.10. Enforcement of Due-on-Sale Clauses; Assumption
Agreements.....................................................48
SECTION 3.11. Realization Upon Defaulted Mortgage Loans; Repurchase
of Certain Mortgage Loans......................................49
SECTION 3.12. Trustee to Cooperate; Release of Mortgage Files................52
SECTION 3.13. Documents, Records and Funds in Possession of Master
Servicer to be Held for the Trustee............................53
SECTION 3.14. Servicing Compensation.........................................53
SECTION 3.15. Access to Certain Documentation................................54
SECTION 3.16. Annual Statement as to Compliance..............................54
SECTION 3.17. Annual Independent Public Accountants' Servicing
Statement; Financial Statements................................54
i
<PAGE> 3
SECTION 3.18. Errors and Omissions Insurance; Fidelity Bonds.................55
SECTION 3.19. Inspections....................................................55
SECTION 3.20. Restoration of Mortgaged Property..............................55
SECTION 3.21. Put Option and Mandatory Call..................................55
ARTICLE IV
DISTRIBUTIONS AND ADVANCES BY THE MASTER SERVICER
SECTION 4.01. Advances.......................................................57
SECTION 4.02. Priorities of Distribution.....................................57
SECTION 4.03. Allocation of Realized Losses..................................60
SECTION 4.04. Monthly Statements to Certificateholders.......................61
SECTION 4.05. Determination of Pass-Through Rates for COFI
Certificates...................................................63
SECTION 4.06. Determination of Pass-Through Rates for LIBOR
Certificates...................................................65
SECTION 4.07. Determination of Pass-Through Rates for Variable Rate
Certificates...................................................66
ARTICLE V
THE CERTIFICATES
SECTION 5.01. The Certificates...............................................67
SECTION 5.02. Certificate Register; Registration of Transfer and
Exchange of Certificates.......................................67
SECTION 5.03. Mutilated, Destroyed, Lost or Stolen Certificates..............71
SECTION 5.04. Persons Deemed Owners..........................................72
SECTION 5.05. Access to List of Certificateholders' Names and
Addresses......................................................72
SECTION 5.06. Maintenance of Office or Agency................................72
ARTICLE VI
THE DEPOSITOR AND THE MASTER SERVICER
SECTION 6.01. Respective Liabilities of the Depositor and the
Master Servicer................................................72
SECTION 6.02. Merger or Consolidation of the Depositor or the
Master Servicer................................................73
SECTION 6.03. Limitation on Liability of the Depositor, the Seller,
the Master Servicer and Others.................................73
SECTION 6.04. Limitation on Resignation of Master Servicer...................74
ARTICLE VII
DEFAULT
SECTION 7.01. Events of Default..............................................74
SECTION 7.02. Trustee to Act; Appointment of Successor.......................76
SECTION 7.03. Notification to Certificateholders.............................77
ii
<PAGE> 4
ARTICLE VIII
CONCERNING THE TRUSTEE
SECTION 8.01. Duties of Trustee..............................................77
SECTION 8.02. Certain Matters Affecting the Trustee..........................78
SECTION 8.03. Trustee Not Liable for Certificates, Mortgage Loans
or Additional Collateral.......................................79
SECTION 8.04. Trustee May Own Certificates...................................79
SECTION 8.05. Trustee's Fees and Expenses....................................79
SECTION 8.06. Eligibility Requirements for Trustee...........................80
SECTION 8.07. Resignation and Removal of Trustee.............................80
SECTION 8.08. Successor Trustee..............................................81
SECTION 8.09. Merger or Consolidation of Trustee.............................81
SECTION 8.10. Appointment of Co-Trustee or Separate Trustee..................82
SECTION 8.11. Tax Matters....................................................83
SECTION 8.12. Periodic Filings...............................................85
ARTICLE IX
TERMINATION
SECTION 9.01. Termination upon Liquidation or Purchase of all
Mortgage Loans.................................................85
SECTION 9.02. Final Distribution on the Certificates.........................85
SECTION 9.03. Additional Termination Requirements............................86
ARTICLE X
MISCELLANEOUS PROVISIONS
SECTION 10.01. Amendment......................................................87
SECTION 10.02. Recordation of Agreement; Counterparts.........................88
SECTION 10.03. Governing Law..................................................89
SECTION 10.04. Intention of Parties...........................................89
SECTION 10.05. Notices........................................................89
SECTION 10.06. Severability of Provisions.....................................90
SECTION 10.07. Assignment.....................................................90
SECTION 10.08. Limitation on Rights of Certificateholders.....................91
SECTION 10.09. Inspection and Audit...........................................91
SECTION 10.10. Certificates Nonassessable and Fully Paid......................92
Exhibit A: Form of Senior Certificate
(excluding Notional Amount Certificates).......................A-1
Exhibit B: Form of Subordinated Certificate...............................B-1
Exhibit C: Form of Class A-R Certificate..................................C-1
Exhibit D: Form of Notional Amount Certificate............................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
iii
<PAGE> 5
Exhibit I: Transfer Affidavit.............................................I-1
Exhibit J-1: Form of Transferor Certificate (Private Certificates)..........J-1
Exhibit J-2: Form of Transferor Certificate (Class A-R).....................J-2
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: Form of Additional Pledged Collateral Custodial
Agreement......................................................O-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
Schedule IV: [Reserved]................................................. S-IV-1
Schedule V: Form of Monthly Master Servicer Report...................... S-V-1
iv
<PAGE> 6
THIS POOLING AND SERVICING AGREEMENT, dated as of December 1,
1998, among MELLON RESIDENTIAL FUNDING CORPORATION, a Delaware corporation, as
depositor (the "Depositor"), BOSTON SAFE DEPOSIT AND TRUST COMPANY, a
Massachusetts trust company, 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 two REMICs. The Subsidiary REMIC
will consist of all of the assets constituting the Trust Fund and will be
evidenced by the Subsidiary REMIC Regular Interests (which will be
uncertificated and will represent the "regular interests" in the Subsidiary
REMIC) and the SR Interest as the single "residual interest" in the Subsidiary
REMIC. The Trustee will hold the Subsidiary REMIC Regular Interests. The Master
REMIC will consist of the Subsidiary REMIC Regular Interests and will be
evidenced by the Regular Certificates (which will represent the "regular
interests" in the Master REMIC) and the MR Interest as the single "residual
interest" in the Master REMIC. The Class A-R Certificates will represent
beneficial ownership of the SR Interest and the MR Interest. 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):
<PAGE> 7
<TABLE>
<CAPTION>
====================================================================================================================
Integral
Initial Class Multiples
Certificate Pass-Through Minimum in Excess of
Balance Rate Denomination Minimum
- --------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Class A-1 $ 97,450,000.00 6.03000%(5) $ 25,000 $1,000
- --------------------------------------------------------------------------------------------------------------------
Class A-2 $ 77,500,000.00 5.76000%(5) $ 25,000 $1,000
- --------------------------------------------------------------------------------------------------------------------
Class A-3 $122,770,000.00 5.61000%(5) $ 25,000 $1,000
- --------------------------------------------------------------------------------------------------------------------
Class X (1) (2) $ 25,000(3) $1,000(3)
- --------------------------------------------------------------------------------------------------------------------
Class A-R $100.00 6.59258 $ 100 N/A
- --------------------------------------------------------------------------------------------------------------------
Class B-1 $ 3,070,000.00 $ 25,000 $1,000
(4)(5)
- --------------------------------------------------------------------------------------------------------------------
Class B-2 $ 1,535,000.00 $ 25,000 $1,000
(4)(5)
- --------------------------------------------------------------------------------------------------------------------
Class B-3 $ 1,535,000.00 $ 25,000 $1,000
(4)(5)
- --------------------------------------------------------------------------------------------------------------------
Class B-4 $ 1,535,000.00 $100,000 $1,000
(4)(5)
- --------------------------------------------------------------------------------------------------------------------
Class B-5 $ 767,000.00 $100,000 $1,000
(4)(5)
- --------------------------------------------------------------------------------------------------------------------
Class B-6 $ 763,422.67 $100,000 $1,000
(4)(5)
====================================================================================================================
</TABLE>
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(1) The Class X Certificates will be Notional Amount Certificates, will have
no principal balance and will bear interest on its Notional Amount,
initially $306,925,523.00.
(2) The Pass-Through Rate for the Class X Certificates for any Distribution
Date will be equal to the excess of (a) the weighted average Adjusted Net
Mortgage Rate of the Mortgage Loans (based on the Stated Principal
Balances of the Mortgage Loans as of the close of business on the second
preceding Due Date) over (b) the weighted average of the Pass-Through
Rates on the Certificates (other than the Class X Certificates) for such
Distribution Date (based on the Class Certificate Balance prior to
distributions of principal on such Distribution Date). The Pass-Through
Rate of the Class X Certificates for the first Distribution Date is
0.78188% per annum.
(3) Minimum Denomination is based on the Notional Amount of such Class.
(4) Up to and including the Initial Roll Date, the Pass-Through Rate will be
equal to the weighted average Adjusted Net Mortgage Rate of the Mortgage
Loans (based on the Stated Principal Balances of the Mortgage Loans as of
the close of business on the second preceding Due Date). The Pass-Through
Rate for the first Distribution Date is 6.59258% per annum.
2
<PAGE> 8
(5) On each Distribution Date after the Initial Roll Date, the Pass-Through
Rate will be equal to the lesser of (a) the weighted average of the Loan
Indices on the Mortgage Loans (based on the Stated Principal Balances of
the Mortgage Loans as of the close of business on the second preceding
Due Date) plus 1.50% and (b) the weighted average Adjusted Net Mortgage
Rate of the Mortgage Loans (based on the Stated Principal Balances of the
Mortgage Loans as of the close of business on the second preceding Due
Date).
3
<PAGE> 9
Principal of and interest on the Subsidiary REMIC Regular
Interests and the SR Interest shall be allocated to the Corresponding Classes of
Certificates in the manner set forth in the following table:
Corresponding Class of Certificates(1)
--------------------------------------
<TABLE>
<CAPTION>
Subsidiary
REMIC Initial Principal Allocation Allocation
Interest Balance Interest Rate of Principal of Interest(4)
-------- ------- ------------- ------------ --------------
<S> <C> <C> <C> <C>
1 $ 97,450,000.00 (2) A-1 A-1, X
2 $ 77,500,000.00 (2) A-2 A-2, X
3 $122,770,000.00 (2) A-3 A-3, X
5 100.00 6.59258% A-R(6) A-R(6), X
6 $ 3,070,000.00 (2) B-1 B-1, X
7 $ 1,535,000.00 (2) B-2 B-2, X
8 $ 1,535,000.00 (2) B-3 B-3, X
9 $ 1,535,000.00 (2) B-4 B-4, X
10 $ 767,000.00 (2) B-5 B-5, X
11 $ 763,422.67 (2) B-6 B-6, X
SR (5) (5) A-R(6) A-R(6)
</TABLE>
- ---------------------
(1) The amount of principal and interest allocable from a Subsidiary REMIC
Regular Interest to its Corresponding Class of Certificates on any
Distribution Date shall be 100%.
(2) The Interest Rate for this Subsidiary REMIC Interest for any Distribution
Date will be equal to the weighted average net mortgage rate.
(3) Intentionally deleted.
(4) The interest on each Class or REMIC Regular Interests equal to the
Pass-Through Rate applicable to its Corresponding Class (for receipt of
principal) will be allocated to such Corresponding Class; the excess of
the interest on such REMIC Regular Interest will be allocated to the
Class X Certificates.
(5) The SR Interest will have no principal balance and will not bear
interest.
(6) The beneficial ownership of the MR Interest and the SR Interest is
represented by the Class A-R Certificates. The owner of a Class A-R
Certificate may separate the MR Interest and the SR Interest.
4
<PAGE> 10
Set forth below are designations of Classes of Certificates to the categories
used herein:
Accretion Directed
Certificates........................... None.
Accrual Certificates................... None.
Book-Entry Certificates................ All Classes of Certificates other
than the Physical Certificates.
Component Certificates................. None.
Components............................. For purposes of calculating
distributions, the Component
Certificates will be comprised of
multiple payment components having
the designations, Initial Component
Notional Balances and Pass-Through
Rates set forth below:
Initial
Component
Notional
Designation Balance Pass-Through Rate
----------- ------- -----------------
N/A N/A N/A
Delay Certificates..................... All interest-bearing Classes of
Certificates other than the
Non-Delay Certificates, if any.
ERISA-Restricted
Certificates........................... Residual Certificates and
Subordinated Certificates.
Fixed Rate Certificates................ Class A-R Certificates and on or
prior to the Initial Roll Date, the
Class A-1, Class A-2 and Class A-3
Certificates.
Floating Rate Certificates............. None.
Inverse Floating Rate
Certificates........................... None.
COFI Certificates...................... None.
LIBOR Certificates..................... None.
Non-Delay Certificates................. None.
Notional Amount
Certificates........................... Class X Certificates.
Offered Certificates................... All Classes of Certificates other
than the Private Certificates.
5
<PAGE> 11
Physical Certificates.................. Private Certificates and Residual
Certificates.
Planned Principal Classes.............. None.
Primary Planned Principal
Classes................................ None.
Principal Only
Certificates........................... None.
Private Certificates................... Class B-4, Class B-5 and Class B-6
Certificates.
Rating Agencies........................ S&P and Fitch.
Regular Certificates................... All Classes of Certificates other
than the Residual Certificates.
Residual Certificates.................. Class A-R Certificates.
Scheduled Principal
Classes................................ None.
Secondary Planned Principal
Class.................................. None.
Senior Certificates. .................. Class A-1, Class A-2, Class A-3,
Class A-R and Class X Certificates.
Subordinated Certificates.............. Class B-1, Class B-2, Class B-3,
Class B-4, Class B-5 and Class B-6
Certificates.
Support Classes........................ None.
Targeted Principal
Classes................................ None.
Variable Rate Certificates............. On or prior to the Initial Roll
Date, the Class X Certificates and
the Subordinated Certificates and
after the Initial Roll Date, all
Classes of Certificates other than
the Class A-R Certificates.
With respect to any of the foregoing designations as to which
the corresponding reference is "None," all defined terms and provisions herein
relating solely to such designations shall be of no force or effect, and any
calculations herein incorporating references to such designations shall be
interpreted without reference to such designations and amounts. Defined terms
and provisions herein relating to statistical rating agencies not designated
above as Rating Agencies shall be of no force or effect.
6
<PAGE> 12
ARTICLE I
DEFINITIONS
Whenever used in this Agreement, the following words and
phrases, unless the context otherwise requires, shall have the following
meanings:
Accepted Servicing Practices: With respect to any Mortgage
Loan, those mortgage servicing practices of prudent mortgage lending
institutions which service mortgage loans of the same type as such Mortgage Loan
in the jurisdiction where the related Mortgaged Property is located.
Accretion Directed Certificates: As specified in the
Preliminary Statement.
Accrual Amount: With respect to any Class of Accrual
Certificates and any Distribution Date prior to the Accrual Termination Date,
the amount allocable to interest on each such Class of Accrual Certificates with
respect to such Distribution Date pursuant to Section 4.02(a)(1)(ii).
Accrual Certificates: As specified in the Preliminary
Statement.
Accrual Termination Date: Not applicable.
Additional Collateral: Any real or personal property,
securities, cash, instruments, contracts or other documents constituting or
evidencing collateral pledged as additional security for a Mortgage Loan (other
than the Mortgaged Property).
Additional Pledged Collateral Custodial Agreement: The
agreement governing the retention of Additional Collateral, a form of which is
annexed hereto as Exhibit O.
Adjusted Mortgage Rate: As to each Mortgage Loan, and at any
time, the per annum rate equal to the Mortgage Rate less the Master Servicing
Fee Rate.
Adjusted Net Mortgage Rate: As to each Mortgage Loan, and at
any time, the per annum rate equal to the Mortgage Rate less the related Expense
Rate.
Adjustment Date: The annual date on which the Mortgage Rate on
each Mortgage Loan is subject to adjustment.
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 principal
and 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 on the related Due
Date and not received as of the close of business on the related Determination
Date, less the aggregate amount of any such delinquent payments that the Master
Servicer has determined would constitute a Nonrecoverable Advance if advanced.
Agreement: This Pooling and Servicing Agreement and all
amendments or supplements hereto.
ALTA: The American Land Title Association or any successor
thereto.
7
<PAGE> 13
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 Date.
Applicable Credit Support Percentage: As defined in Section
4.02(e).
Applicable Purchase Price Percentage: With respect to any
Class of Certificates, (i) 100% in the case of the Offered Certificates, (ii)
80% in the case of the Class B-4 and Class B-5 Certificates and (iii) 20% in the
case of the Class B-6 Certificates.
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 related 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 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.
Bankruptcy Code: The United States Bankruptcy Reform Act of
1978, as amended.
Bankruptcy Coverage Termination Date: The point in time at
which the Bankruptcy Loss Coverage Amount is reduced to zero.
Bankruptcy Loss: With respect to any Mortgage Loan, a
Deficient Valuation or Debt Service Reduction; provided, however, that a
Bankruptcy Loss shall not be deemed a Bankruptcy Loss hereunder so long as the
Master Servicer has notified the Trustee in writing that the Master Servicer is
diligently pursuing any remedies that may exist in connection with the related
Mortgage Loan and either (A) the related Mortgage Loan is not in default with
regard to payments due thereunder or (B) delinquent payments of principal and
interest under the related Mortgage Loan and any related escrow payments in
respect of such Mortgage Loan are being advanced on a current basis by the
Master Servicer, in either case without giving effect to any Debt Service
Reduction or Deficient Valuation.
Bankruptcy Loss Coverage Amount: As of any Determination Date,
the Bankruptcy Loss Coverage Amount shall equal the Initial Bankruptcy Coverage
Amount as reduced by (i) the aggregate amount of Bankruptcy Losses allocated to
the Certificates since the Cut-off Date and (ii) any permissible reductions in
the Bankruptcy Loss Coverage Amount as evidenced by a letter from each Rating
Agency to the Trustee to the effect that any such reduction will not result in a
downgrading of the then current ratings assigned to the Classes of Certificates
rated by it.
Base Value: With respect to any Mortgage Loan for which
Additional Collateral has been pledged, the original principal balance of the
Mortgage Loan less the maximum principal balance permitted with respect to such
Mortgage Loan in accordance with the Seller's underwriting guidelines.
Blanket Mortgage: The mortgage or mortgages encumbering the
Cooperative Property.
Book-Entry Certificates: As specified in the Preliminary
Statement.
8
<PAGE> 14
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 Commonwealth of Massachusetts, 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 "Boston Safe Deposit and
Trust Company" in trust for the registered holders of Mellon Residential Funding
Corporation, Mortgage Pass-Through Certificates Series 1998-TBC1."
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) all Realized Losses allocated thereto and, in the case of any
Subordinated Certificates, all other reductions in Certificate Balance
previously allocated thereto pursuant to Section 4.03 and (B) in the case of any
Class of Accrual Certificates, increased by the Accrual Amount added to the
Class Certificate Balance of such Class prior to such date.
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 class designation as
set forth in the Preliminary Statement.
Class Certificate Balance: With respect to any Class and as to
any date of determination, the aggregate of the Certificate Balances of all
Certificates of such Class as of such date.
Class Interest Shortfall: As to any Distribution Date and
Class or interest bearing Component, the amount by which the amount described in
clause (i) of the definition of Class Optimal Interest Distribution Amount for
such Class exceeds the amount of interest actually distributed on such Class on
such Distribution Date pursuant to such clause (i).
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Class Optimal Interest Distribution Amount: With respect to
any Distribution Date and interest bearing Class, the sum of (i) one month's
interest accrued during the related Interest Accrual Period at the Pass-Through
Rate for such Class on the related Class Certificate Balance or Notional Amount,
as applicable, subject to reduction as provided in Section 4.02(d) and (ii) any
Class Unpaid Interest Amounts for such Class.
Class PO Deferred Amount: Not applicable.
Class Subordination Percentage: With respect to any
Distribution Date and each Class of Subordinated Certificates, the quotient
(expressed as a percentage) of (a) the Class Certificate Balance of such Class
of Certificates immediately prior to such Distribution Date divided by (b) the
aggregate of the Class Certificate Balances immediately prior to such
Distribution Date of all Classes of Certificates.
Class Unpaid Interest Amounts: As to any Distribution Date and
Class of interest bearing Certificates, the amount by which the aggregate Class
Interest Shortfalls for such Class on prior Distribution Dates exceeds the
amount distributed on such Class on prior Distribution Dates pursuant to clause
(ii) of the definition of Class Optimal Interest Distribution Amount.
Closing Date: December 17, 1998.
CMT: The weekly average of yields on United States treasury
securities as adjusted to a constant maturity of one year.
CMT Loan: A Mortgage Loan for which: the Loan Index is CMT;
the Adjustment Date occurs on the date set forth in the related Mortgage Note
and every twelfth month thereafter; the Periodic Rate Cap is 200 basis points;
the Maximum Mortgage Rate is 500 basis points higher than the initial Mortgage
Rate; and the Minimum Mortgage Rate is the Gross Margin.
Code: The Internal Revenue Code of 1986, including any
successor or amendatory provisions.
COFI: The Monthly Weighted Average Cost of Funds Index for the
Eleventh District Savings Institutions published by the Federal Home Loan Bank
of San Francisco.
COFI Certificates: As specified in the Preliminary Statement.
Component: As specified in the Preliminary Statement.
Component Notional Balance: With respect to any Component and
any Distribution Date, as specified in the Preliminary Statement.
Component Certificates: As specified in the Preliminary
Statement.
Coop Shares: Shares issued by a Cooperative Corporation.
Cooperative Corporation: The entity that holds title to the
real property and improvements constituting the Cooperative Property and which
governs the Cooperative Property, which Cooperative Corporation must qualify as
a Cooperative Housing Corporation under Section 216 of the Code.
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Cooperative Loan: Any Mortgage Loan secured by Coop Shares and
a Proprietary Lease.
Cooperative Property: The real property and improvements owned
by the Cooperative Corporation, including the allocation of individual dwelling
units to the holders of the Coop Shares of the Cooperative Corporation.
Cooperative Unit: A single family dwelling located in a
Cooperative Property.
Corporate Trust Office: The designated office of the Trustee
in the State of California 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 3 Park Plaza, 16th
Floor, Irvine, California 92614, Attn: Mellon Residential Funding Corporation
Series 1998-TBC1, facsimile no. (949) 253-7577, and which is the address to
which notices to and correspondence with the Trustee should be directed.
Corresponding Classes of Certificates: With respect to each
Subsidiary REMIC Regular Interest, any Class of Certificates appearing opposite
such Subsidiary REMIC Regular Interest in the Preliminary Statement.
Cut-off Date: December 1, 1998.
Cut-off Date Pool Principal Balance: $306,925,522.67.
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.
Debt Service Reduction: With respect to any Mortgage Loan, a
reduction by a court of competent jurisdiction in a proceeding under the
Bankruptcy Code in the Scheduled Payment for such Mortgage Loan which became
final and non-appealable, except such a reduction resulting from a Deficient
Valuation or any reduction that results in a permanent forgiveness of principal.
Defective Mortgage Loan: Any Mortgage Loan which is required
to be repurchased pursuant to Section 2.02 or 2.03.
Deficient Valuation: With respect to any Mortgage Loan, a
valuation by a court of competent jurisdiction of the Mortgaged Property in an
amount less than the then-outstanding indebtedness under the Mortgage Loan, or
any reduction in the amount of principal to be paid in connection with any
Scheduled Payment that results in a permanent forgiveness of principal, which
valuation or reduction results from an order of such court which is final and
non-appealable in a proceeding under the Bankruptcy Code.
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).
Delay Certificates: As specified in the Preliminary Statement.
Deleted Mortgage Loan: As defined in Section 2.03(c) hereof.
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Denomination: With respect to each Certificate, the amount set
forth on the face thereof as the "Initial Certificate Balance of this
Certificate" or the "Initial Notional Amount of this Certificate" or, if neither
of the foregoing, 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(3) 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 18th day
of each month or if such 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 "Bankers Trust
Company of California, N.A. in trust for registered holders of Mellon
Residential Funding Corporation, Mortgage Pass-Through Certificates, Series
1998-TBC1." 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 January 1999.
DTC: The Depository Trust Company, or any successor thereto.
Due Date: With respect to any Distribution Date, the first day
of the month in which the related Distribution Date occurs.
Duff & Phelps: Duff & Phelps Credit Rating Company, or any
successor thereto. If Duff & Phelps is designated as a Rating Agency in the
Preliminary Statement, for purposes of Section 10.05(b) the address for notices
to Duff & Phelps shall be Duff & Phelps Credit Rating Company, 17 State Street,
12th Floor, New York, New York 10004, Attention: MBS Monitoring, or such other
address as Duff & Phelps may hereafter furnish to the Depositor, the Master
Servicer and the Trustee.
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
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<PAGE> 18
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.
Escrow Payments: With respect to any Mortgage Loan, the
amounts constituting ground rents, taxes, assessments, water rates, sewer rents,
municipal charges, mortgage insurance premiums, fire and hazard insurance
premiums, condominium charges, and any other payments required to be escrowed by
the Mortgagor with the mortgagee pursuant to the Mortgage or any other related
document.
Event of Default: As defined in Section 7.01 hereof.
Excess Loss: The amount of any (i) Fraud Loss realized after
the Fraud Loss Coverage Termination Date, (ii) Special Hazard Loss realized
after the Special Hazard Coverage Termination Date or (iii) Bankruptcy Loss
realized after the Bankruptcy Coverage Termination Date.
Excess Proceeds: With respect to any Liquidated Mortgage Loan,
the amount, if any, by which 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 Stated Principal Balance of such
Liquidated Mortgage Loan as of the Due Date in the month in which such Mortgage
Loan became a Liquidated Mortgage Loan plus (ii) accrued interest at the
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 applicable to the
Distribution Date immediately following the calendar month during which such
liquidation occurred.
Expense Rate: As to each Mortgage Loan, the sum of the related
Master Servicing Fee Rate and Trustee Fee Rate.
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.
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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.
Fitch: Fitch IBCA, Inc., or any successor thereto. If Fitch is
designated as a Rating Agency in the Preliminary Statement, for purposes of
Section 10.05(b) the address for notices to Fitch shall be Fitch IBCA, Inc., One
State Street Plaza, New York, New York 10004, Attention: Residential Mortgage
Surveillance Group, or such other address as Fitch may hereafter furnish to the
Depositor, the Master Servicer and the Trustee.
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.
Formula Principal Amount: As to any Distribution Date, the sum
of (a) the principal portion of each Scheduled Payment (without giving effect,
prior to the Bankruptcy Coverage Termination Date, to any reductions thereof
caused by any Debt Service Reductions or Deficient Valuations) due on each
Mortgage Loan on the related Due Date, (b) the Stated Principal Balance of each
Mortgage Loan that was repurchased by the Seller or the Master Servicer pursuant
to this Agreement as of such Distribution Date, (c) the Substitution Adjustment
Amount in connection with any Deleted Mortgage Loan received with respect to
such Distribution Date, and (d) any Insurance Proceeds or Liquidation Proceeds
allocable to recoveries of principal of Mortgage Loans that are not yet
Liquidated Mortgage Loans received during the calendar month preceding the month
of such Distribution Date, (e) with respect to each Mortgage Loan that became a
Liquidated Mortgage Loan during the calendar month preceding the month of such
Distribution Date, the amount of Liquidation Proceeds allocable to principal
received with respect to such Mortgage Loan in such preceding month, and (f) all
partial and full Principal Prepayments received during the related Prepayment
Period.
Fraud Loan: A Liquidated Mortgage Loan as to which a Fraud
Loss has occurred.
Fraud Loss Coverage Amount: As of the Closing Date,
$6,138,510.46 subject to reduction from time to time, by the amount of Fraud
Losses allocated to the Certificates. In addition, on each anniversary of the
Cut-off Date, the Fraud Loss Coverage Amount will be reduced as follows: (a) on
the first, second, third and fourth anniversaries of the Cut-off Date, to an
amount equal to the lesser of (i) 2% of the then current Pool Stated Principal
Balance in the case of the first and second anniversaries and 1% of the then
current Pool Stated Principal Balance in the case of the third and fourth
anniversaries and (ii) the excess of the Fraud Loss Coverage Amount as of the
preceding anniversary of the Cut-off Date over the cumulative amount of Fraud
Losses allocated to the Certificates since such preceding anniversary; and (b)
on the fifth anniversary of the Cut-off Date, to zero.
Fraud Loss Coverage Termination Date: The point in time at
which the Fraud Loss Coverage Amount is reduced to zero.
Fraud Losses: Realized Losses on Mortgage Loans as to which a
loss is sustained by reason of a default arising from fraud, dishonesty or
misrepresentation in connection with the related Mortgage Loan.
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Gross Margin: With respect to each Mortgage Loan, the number
of basis points set forth in the related Mortgage Note which is added to the
Loan Index to determine the Mortgage Rate on the related Adjustment Date,
subject to the applicable Periodic Rate Cap, Maximum Mortgage Rate and Minimum
Mortgage Rate.
Index: With respect to any Interest Accrual Period for the
COFI Certificates, the then-applicable index used by the Trustee pursuant to
Section 4.05 to determine the applicable Pass-Through Rate for such Interest
Accrual Period for the COFI Certificates.
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 Bankruptcy Coverage Amount: $100,000.
Initial Component Balance: As specified in the Preliminary
Statement.
Initial LIBOR Rate: None.
Initial Roll Date: The Distribution Date in December 2002.
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.
Interest Accrual Period: With respect to each Class of Delay
Certificates, corresponding Subsidiary REMIC Regular Interest and any
Distribution Date, the calendar month prior to the month of such Distribution
Date. With respect to any Non-Delay Certificates, corresponding Subsidiary REMIC
Regular Interest and any Distribution Date, the one month period commencing on
the 25th day of the month preceding the month in which such Distribution Date
occurs and ending on the 24th day of the month in which such Distribution Date
occurs.
Interest Determination Date: With respect to any Interest
Accrual Period for any Floating Rate Certificates, the second Business Day prior
to the first day of such Interest Accrual Period.
Interest Rate: With respect to each Subsidiary REMIC Interest,
the applicable rate set forth or calculated in the manner described in the
Preliminary Statement.
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 4.06.
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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.
Loan Index: CMT or One-Year LIBOR.
Loan-to-Collateral Value Ratio: With respect to any Mortgage
Loan and as to any date of determination, the fraction (expressed as a
percentage) the numerator of which is the principal balance of the related
Mortgage Loan at such date of determination less the Base Value of any
Additional Collateral and the denominator of which is the Property Value.
Loan-to-Value Ratio: With respect to any Mortgage Loan and as
to any date of determination, the fraction (expressed as a percentage) the
numerator of which is the principal balance of the related Mortgage Loan at such
date of determination and the denominator of which is the Property Value of the
related Mortgaged Property.
Maintenance: With respect to any Cooperative Unit, the rent or
fee paid by the Mortgagor to the Cooperative Corporation pursuant to the
Proprietary Lease.
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.
Mandatory Call: If the Put Option is exercised with respect to
more than 90% of the outstanding aggregate Class Certificate Balance of the
Certificates, the Standby Purchaser's option to purchase on the same terms as
the Put Option all of the outstanding Certificates at the Mandatory Call
Purchase Price, including Certificates with respect to which the applicable
Holder has not exercised the Put Option.
Mandatory Call Purchase Price: The aggregate of the Put
Purchase Prices for all the Certificates.
Master REMIC: As described in the Preliminary Statement.
Master Servicer: Boston Safe Deposit and Trust Company, a
Massachusetts trust company, and its successors and assigns, in its capacity as
master servicer hereunder. For purposes of representations and warranties and
other provisions relating to servicing, FNMA or FHLMC qualifications, "Master
Servicer" is deemed to include the Subservicer.
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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 month of 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,
0.25% per annum.
Maximum Mortgage Rate: With respect to each Mortgage Loan, the
highest Mortgage Rate that may be borne by the related Mortgage Note over the
life of such Mortgage Loan.
Minimum Mortgage Rate: With respect to each Mortgage Loan, the
lowest Mortgage Rate that may be borne by the related Mortgage Note over the
life of such Mortgage Loan.
Monthly Statement: The statement delivered to the
Certificateholders pursuant to Section 4.04.
Moody's: Moody's Investors Service, Inc., or any successor
thereto. If Moody's 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 Moody's Investors Service, Inc., 99 Church Street, New York, New York
10007, Attention: Residential Pass-Through Monitoring, or such other address as
Moody's may hereafter furnish to the Depositor, the Master Servicer and the
Trustee.
Mortgage: The mortgage, deed of trust or other instrument
creating a first 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 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;
(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;
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(vi) the first payment date of the Mortgage Loan;
(vii) the Scheduled Payment in effect as of the
Cut-off Date;
(viii) the 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
dwelling in a PUD, (c) a condominium unit, (d) a two- to
four-unit residential property or (e) a Cooperative Unit (and
a code indicating whether the related Cooperative Loan is an
Unrecognized Cooperative Loan);
(xi) the Mortgage Rate at origination and at the
Cut-off Date;
(xii) the purpose for the Mortgage Loan;
(xiii) the Loan-to-Collateral Value Ratio at
origination;
(xiv) a description of the Additional Collateral,
if any, and the value thereof at the close of business on the
Cut-off Date;
(xv) the original months to maturity or the
remaining months to maturity from the Cut-off Date, in any
case based on the original amortization schedule, and if
different, the maturity expressed in the same manner but based
on the actual amortization schedule;
(xvi) the date on which the Mortgage Loan was
originated;
(xvii) the Loan Index;
(xviiii) the next Adjustment Date;
(xix) the Gross Margin;
(xx) the Maximum Mortgage Rate; and
(xxi) the minimum value of any Additional
Collateral required under the terms of the Mortgage Loan.
With respect to the Mortgage Loans in the aggregate, such
schedule shall also set forth the following information, as of the Cut-off Date:
(1) the number of Mortgage Loans; (2) the Cut-off Date Principal Balance; and
(3) the weighted average Mortgage Rate of the Mortgage Loans.
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.
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<PAGE> 24
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, which, with respect to a Cooperative Loan, is the related Coop
Shares and Proprietary Lease.
Mortgagor: The obligor(s) on a Mortgage Note.
MR Interest: The sole class of "residual interest" in the
Master REMIC.
National Cost of Funds Index: The National Monthly Median Cost
of Funds Ratio to SAIF-Insured Institutions published by the Office of Thrift
Supervision.
Net Prepayment Interest Shortfalls: As to any Distribution
Date, the amount by which the aggregate of Prepayment Interest Shortfalls during
the related Prepayment Period exceeds an amount equal to the aggregate Master
Servicing Fee for such Distribution Date before reduction of the Master
Servicing Fee in respect of such Prepayment Interest Shortfalls.
Non-Delay Certificates: As specified in the Preliminary
Statement.
Non-Discount Mortgage Loan: Not applicable.
Non-PO Formula Principal Amount: Not applicable.
Non-PO Percentage: Not applicable.
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.
Notional Amount: With respect to any Distribution Date and the
Class X Certificates, the aggregate of the Class Certificate Balance of the
Certificates immediately prior to such Distribution Date.
Notional Amount Certificates: As specified in the Preliminary
Statement.
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
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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.
One-Year LIBOR: The London interbank offered rate for one-year
U.S. dollar deposits.
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 Applicable Credit Support Percentage: With respect to
each of the following Classes of Subordinated Certificates, the corresponding
percentage described below, as of the Closing Date:
Class B-1 3.00%
Class B-2 2.00%
Class B-3 1.50%
Class B-4 1.00%
Class B-5 0.50%
Class B-6 0.25%
Original Mortgage Loan: The mortgage loan refinanced in
connection with the origination of a Refinancing Mortgage Loan.
Original Subordinated Principal Balance: The aggregate of the
Class Certificate Balances of the Subordinated Certificates as of the Closing
Date.
OTS: The Office of Thrift Supervision.
Outside Reference Date: As to any Interest Accrual Period for
the COFI Certificates, the close of business on the tenth Business Day thereof.
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.
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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.
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.
Periodic Rate Cap: The provision in the Mortgage Note for each
Mortgage Loan which limits increases or decreases in the Mortgage Rate on each
Adjustment Date.
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;
(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 Moody's 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;
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(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 Fitch or Duff & Phelps is a Rating Agency and has
not rated the portfolio, 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;
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) an
"electing partnership" as defined in Code Section 775, (vi) 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
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United States federal income tax purposes regardless of its connection with the
conduct of a trade or business within the United States or a trust if a court
within the United States is able to exercise primary supervision over the
administration of the trust and one or more United States fiduciaries have the
authority to control all substantial decisions of the trust unless such Person
has furnished the transferor and the Trustee with a duly completed Internal
Revenue Service Form 4224, and (vii) 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 either 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.
Planned Balance: Not applicable.
Planned Principal Classes: As specified in the Preliminary
Statement.
PO Formula Principal Amount: Not applicable.
PO Percentage: Not applicable.
Pool Stated Principal Balance: As to any Distribution Date,
the aggregate of the Stated Principal Balances as of the Due Date in the month
preceding the month of such Distribution Date of the Mortgage Loans which were
Outstanding Mortgage Loans on such Due Date.
Prepayment Interest Shortfall: As to any Distribution Date,
Mortgage Loan and Principal Prepayment received during the related Prepayment
Period, 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.
Prepayment Period: As to any Distribution Date, the calendar
month preceding the month of such Distribution Date.
Primary Insurance Policy: Each policy of primary mortgage
guaranty insurance or any replacement policy therefor with respect to any
Mortgage Loan.
Primary Planned Principal Classes: As specified in the
Preliminary Statement.
Principal Only Certificates: As specified in the Preliminary
Statement.
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.
Private Certificate: As specified in the Preliminary
Statement.
Property Value: With respect to any Mortgage Loan, the
Property Value of the related Mortgaged Property shall be: (i) with respect to a
Mortgage Loan other than a Refinancing Mortgage Loan, the least of (a) the value
of the Mortgaged Property based upon the appraisal made at the time of the
origination of such Mortgage Loan, (b) the sales price of the Mortgaged Property
at the time of the origination of such Mortgage Loan and (c) the value of the
Mortgaged Property determined by the Seller based upon a review of the appraisal
made in accordance with clause (a); and (ii) with respect to 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 Refinancing Mortgage
Loan and (b) the value of the Mortgaged Property determined by the Seller based
upon a review of the appraisal made in accordance with clause (a).
Pro Rata Share: As to any Distribution Date, the Subordinated
Principal Distribution Amount and any Class of Subordinated Certificates, the
portion of the Subordinated Principal Distribution Amount allocable to such
Class, equal to the product of the Subordinated Principal Distribution Amount on
such Distribution Date and a fraction, the numerator of which is the related
Class Certificate Balance thereof and the denominator of which is the aggregate
of the Class Certificate Balances of the Subordinated Certificates.
Proprietary Lease: With respect to any Cooperative Unit, a
lease or occupancy agreement between a Cooperative Corporation and a holder of
related Coop Shares.
Prospectus Supplement: The Prospectus Supplement dated
December 2, 1998 relating to the Offered Certificates.
PUD: Planned Unit Development.
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 Adjusted 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 month in which the Purchase Price is to be
distributed to Certificateholders.
Put Date: The Distribution Date in December 2002.
Put Option: The option of each Certificateholder to require
the Standby Purchaser to purchase such Certificateholder's Certificates on the
Put Date, exercisable during the Put Period.
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Put Period: The period from the Distribution Date in September
2002 and ending on the Distribution Date in October 2002.
Put Purchase Price: With respect to any Certificate for which
the related Certificateholder has exercised the Put Option or, the Standby
Purchaser has exercised the Mandatory Call, the sum of (A) the outstanding
Certificate Principal Balance of such Certificate on the Put Date (after giving
effect to distributions otherwise made on such date) multiplied by the
Applicable Purchase Price Percentage plus (B) accrued and unpaid interest on the
outstanding Certificate Principal Balance of such Certificate immediately prior
to the Put Date at the applicable Pass-Through Rate.
Qualified Insurer: A mortgage guaranty insurance company duly
qualified as such under the laws of the state of its principal place of business
and each state having jurisdiction over such insurer in connection with the
insurance policy issued by such insurer, duly authorized and licensed in such
states to transact a mortgage guaranty insurance business in such states and to
write the insurance provided by the insurance policy issued by it, approved as a
FNMA-approved mortgage insurer and having a claims paying ability rating of at
least "AA" or equivalent rating by a nationally recognized statistical rating
organization. Any replacement insurer with respect to a Mortgage Loan must have
at least as high a claims paying ability rating as the insurer it replaces had
on the Closing Date.
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, a division of The McGraw-Hill Companies, Inc., 26 Broadway, 15th
Floor, New York, New York 10004, Attention: Mortgage Surveillance Monitoring,
and (ii) Fitch IBCA, Inc., One State Street Plaza, New York, New York 10004,
Attention: Residential Mortgage Surveillance Group, 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 Stated Principal Balance of the
Mortgage Loan) as of the date of such liquidation, equal to (i) the Stated
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 month in which Liquidation Proceeds
are required to be distributed on the Stated 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. With respect to each
Mortgage Loan which has become the subject of a Deficient Valuation, if the
principal amount due under the related Mortgage Note has been reduced, the
difference between the principal balance of the Mortgage Loan outstanding
immediately prior to such Deficient Valuation and the principal balance of the
Mortgage Loan as reduced by the Deficient Valuation. With respect to each
Mortgage Loan which has become the subject of a Debt Service Reduction and any
Distribution Date, the amount, if any, by which the principal portion of the
related Scheduled Payment has been reduced.
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Recognition Agreement: With respect to any Cooperative Loan,
an agreement between the Cooperative Corporation and the originator of such
Mortgage Loan which establishes the rights of such originator in the Cooperative
Property.
Record Date: With respect to any Distribution Date, the close
of business on the last Business Day of the month preceding the month in which
such Distribution Date occurs.
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.
Relief Act: The Soldiers' and Sailors' Civil Relief Act of
1940, as amended.
Relief Act Reductions: With respect to any Distribution Date
and any Mortgage Loan as to which there has been a reduction in the amount of
interest collectible thereon for the most recently ended calendar month as a
result of the application of the Relief Act, the amount, if any, by which (i)
interest collectible on such Mortgage Loan for the most recently ended calendar
month is less than (ii) interest accrued thereon for such month pursuant to the
Mortgage Note.
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 Coupon: Not applicable.
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.
Residual Certificates: As specified in the Preliminary
Statement.
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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
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.
Restricted Classes: As defined in Section 4.02(e).
Scheduled Balances: Not applicable.
Scheduled Classes: As specified in the Preliminary Statement.
Scheduled Payment: The scheduled monthly payment on a Mortgage
Loan due on any Due Date allocable to principal and/or interest on such Mortgage
Loan which, unless otherwise specified herein, shall give effect to any related
Debt Service Reduction and any Deficient Valuation that affects the amount of
the monthly payment due on such Mortgage Loan.
Secondary Planned Principal Clauses: As specified in the
Preliminary Statement.
Securities Act: The Securities Act of 1933, as amended.
Seller: Boston Safe Deposit and Trust Company, a Massachusetts
trust company, 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 Credit Support Depletion Date: The date on which the
Class Certificate Balance of each Class of Subordinated Certificates has been
reduced to zero.
Senior Percentage: As to any Distribution Date occurring prior
to the Distribution Date in January 2009, 100%. As to any Distribution Date on
or after the Distribution Date in January 2009, the percentage equivalent of a
fraction the numerator of which is the aggregate of the Class Certificate
Balances of each Class of Senior Certificates immediately prior to such
Distribution Date and the denominator of which is the aggregate of the Class
Certificate Balances of all Classes of Certificates immediately prior to such
date.
Senior Prepayment Percentage: For any Distribution Date during
the ten years beginning on the first Distribution Date, 100%. The Senior
Prepayment Percentage for any Distribution Date occurring on or after the tenth
anniversary of the first Distribution Date will, except as provided herein, be
as follows: for any Distribution Date in the first year thereafter, the Senior
Percentage plus 70% of the Subordinated Percentage for such Distribution Date;
for any Distribution Date in the second year thereafter, the Senior Percentage
plus 60% of the Subordinated Percentage for such Distribution Date; for any
Distribution Date in the third year thereafter, the Senior Percentage plus 40%
of the Subordinated Percentage for such Distribution Date; for any Distribution
Date in the fourth year thereafter, the Senior Percentage plus 20% of the
Subordinated Percentage for such Distribution Date; and for any Distribution
Date thereafter, the Senior Percentage for such Distribution Date (unless on any
Distribution Date the Senior Percentage exceeds the initial Senior Percentage,
in which case such Senior Prepayment Percentage for such Distribution Date will
once again equal 100%). Notwithstanding the
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foregoing, no decrease in the Senior Prepayment Percentage will occur unless one
of the Senior Step Down Conditions is satisfied.
Senior Principal Distribution Amount: As to any Distribution
Date, the sum of (i) the Senior Percentage of all amounts described in clauses
(a) through (d) of the definition of "Formula Principal Amount" for such
Distribution Date, (ii) with respect to each Mortgage Loan that became a
Liquidated Mortgage Loan during the calendar month preceding the month of such
Distribution Date, the lesser of (x) the Senior Percentage of the Stated
Principal Balance of such Mortgage Loan and (y) either (A) the Senior Prepayment
Percentage, or (B) if an Excess Loss was sustained with respect to such
Liquidated Mortgage Loan during such prior calendar month, the Senior Pro Rata
Percentage, of the amount of the Liquidation Proceeds allocable to principal
received with respect to such Mortgage Loan, and (iii) the Senior Prepayment
Percentage of the amounts described in clause (f) of the definition of "Formula
Principal Amount" for such Distribution Date; provided, however that if a
Bankruptcy Loss that is an Excess Loss is sustained with respect to a Mortgage
Loan that is not a Liquidated Mortgage Loan, the Senior Principal Distribution
Amount will be reduced on the related Distribution Date by the Senior Pro Rata
Percentage of the principal portion of such Bankruptcy Loss.
Senior Pro Rata Percentage: As to any Distribution Date, the
percentage equivalent of a fraction the numerator of which is the aggregate of
the Class Certificate Balances of each Class of Senior Certificates immediately
prior to such Distribution Date and the denominator of which is the aggregate of
the Class Certificate Balances of all Classes of Certificates immediately prior
to such date.
Senior Step Down Conditions: As of the first Distribution Date
as to which any decrease in the Senior Prepayment Percentage applies, (i) the
outstanding principal balance of all Mortgage Loans delinquent 60 days or more
(averaged over the preceding six month period), as a percentage of the aggregate
Class Certificate Balance of the Subordinated Certificates on such Distribution
Date, does not equal or exceed 50% or (ii) cumulative Realized Losses with
respect to the Mortgage Loans do not exceed (a) with respect to the Distribution
Date on the tenth anniversary of the first Distribution Date, 30% of the
Original Subordinated Principal Balance, (b) with respect to the Distribution
Date on the eleventh anniversary of the first Distribution Date, 35% of the
Original Subordinated Principal Balance, (c) with respect to the Distribution
Date on the twelfth anniversary of the first Distribution Date, 40% of the
Original Subordinated Principal Balance, (d) with respect to the Distribution
Date on the thirteenth anniversary of the first Distribution Date, 45% of the
Original Subordinated Principal Balance and (e) with respect to the Distribution
Date on the fourteenth anniversary of the first Distribution Date, 50% of the
Original Subordinated Principal Balance.
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 and (iv) compliance with the
obligations under Section 3.09.
Servicing Officer: Any officer of the Master Servicer, or
officer of the Subservicer designated by 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.
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Special Hazard Coverage Termination Date: The point in time at
which the Special Hazard Loss Coverage Amount is reduced to zero.
Special Hazard Loss: Any Realized Loss suffered by a Mortgaged
Property on account of direct physical loss but not including (i) any loss of a
type covered by a hazard insurance policy or a flood insurance policy required
to be maintained with respect to such Mortgaged Property pursuant to Section
3.09 to the extent of the amount of such loss covered thereby, or (ii) any loss
caused by or resulting from:
(a) normal wear and tear;
(b) fraud, conversion or other dishonest act on the part of
the Trustee, the Master Servicer or any of their agents or employees
(without regard to any portion of the loss not covered by any errors
and omissions policy);
(c) errors in design, faulty workmanship or faulty materials,
unless the collapse of the property or a part thereof ensues and then
only for the ensuing loss;
(d) nuclear or chemical reaction or nuclear radiation or
radioactive or chemical contamination, all whether controlled or
uncontrolled, and whether such loss be direct or indirect, proximate or
remote or be in whole or in part caused by, contributed to or
aggravated by a peril covered by the definition of the term "Special
Hazard Loss";
(e) hostile or warlike action in time of peace and war,
including action in hindering, combating or defending against an
actual, impending or expected attack:
1. by any government or sovereign power, de jure or
de facto, or by any authority maintaining or using military,
naval or air forces; or
2. by military, naval or air forces; or
3. by an agent of any such government, power,
authority or forces;
(f) any weapon of war employing nuclear fission, fusion or
other radioactive force, whether in time of peace or war; or
(g) insurrection, rebellion, revolution, civil war, usurped
power or action taken by governmental authority in hindering, combating
or defending against such an occurrence, seizure or destruction under
quarantine or customs regulations, confiscation by order of any
government or public authority or risks of contraband or illegal
transportation or trade.
Special Hazard Loss Coverage Amount: With respect to the first
Distribution Date, $9,195,577. With respect to any Distribution Date after the
first Distribution Date, the lesser of (a) the greatest of (i) 1% of the
aggregate of the principal balances of the Mortgage Loans, (ii) twice the
principal balance of the largest Mortgage Loan and (iii) the aggregate of the
principal balances of all Mortgage Loans secured by Mortgaged Properties located
in the single California postal zip code area having the highest aggregate
principal balance of any such zip code area and (b) the Special Hazard Loss
Coverage Amount as of the Closing Date less the amount, if any, of Special
Hazard Losses allocated to the Certificates since the Closing Date. All
principal balances for the purpose of this definition will be
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calculated as of the first day of the calendar month preceding the month of such
Distribution Date after giving effect to Scheduled Payments on the Mortgage
Loans then due, whether or not paid.
Special Hazard Mortgage Loan: A Liquidated Mortgage Loan as to
which a Special Hazard Loss has occurred.
SR Interest: The sole class of "residual interest" in the
Subsidiary REMIC.
S&P: Standard & Poor's, a division of The McGraw-Hill
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, a division of The McGraw-Hill Companies, Inc., 26
Broadway, 15th Floor, New York, New York 10004, Attention: Mortgage Surveillance
Monitoring, or such other address as S&P may hereafter furnish to the Depositor,
the Master Servicer and the Trustee.
Standby Purchaser: Mellon Bank, N.A., a national banking
association, or its successor in interest.
Startup Day: The Closing Date.
Stated Principal Balance: As to any Mortgage Loan and Due
Date, the unpaid principal balance of such Mortgage Loan as of such 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) and to the payment of principal due on
such Due Date and irrespective of any delinquency in payment by the related
Mortgagor.
Subordinated Certificates: As specified in the Preliminary
Statement.
Subordinated Percentage: As to any Distribution Date, 100%
minus the Senior Percentage for such Distribution Date.
Subordinated Prepayment Percentage: As to any Distribution
Date, 100% minus the Senior Prepayment Percentage for such Distribution Date.
Subordinated Principal Distribution Amount: With respect to
any Distribution Date: the sum of (i) the Subordinated Percentage of all amounts
described in clauses (a) through (d) of the definition of "Formula Principal
Amount" with respect to such Mortgage Loans for such Distribution Date, (ii)
with respect to each such Mortgage Loan that became a Liquidated Mortgage Loan
during the calendar month preceding the month of such Distribution Date, the
Liquidation Proceeds allocable to principal received with respect to such
Mortgage Loan, after application of such amounts pursuant to clause (ii) of the
definition of Senior Principal Distribution Amount and (iii) the Subordinated
Prepayment Percentage of the amounts described in clause (f) of the definition
of "Formula Principal Amount" for such Distribution Date.
Subservicer: Mellon Mortgage Company, or any other 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.
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Subsidiary REMIC: With respect to each Subsidiary REMIC
Interest, the applicable rate set forth or calculated in the manner described in
the Preliminary Statement.
Subsidiary REMIC Interest: Any one of the Subsidiary REMIC
Regular Interest or the SR Interest.
Subsidiary REMIC Regular Interest: Any one of the "regular
interests" in the Subsidiary REMIC described in the Preliminary Statement.
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 N,
(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 Loan-to-Value
Ratio and a Loan-to-Collateral 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; (v) have the
same Loan Index as the Deleted Mortgage Loan, (vi) have a Gross Margin and
Maximum Mortgage Rate no lower than, and not more than 1% per annum higher than
those of the Deleted Mortgage Loan and (vii) 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.
Support Classes: As specified in the Preliminary Statement.
Targeted Balance: Not applicable.
Targeted Principal Classes: As specified in the Preliminary
Statement.
Tax Matters Person: The person designated as "tax matters
person" in the manner provided under Treasury regulation 1.860F-4(d) and
temporary Treasury regulation 301.6231(a)(7)1T. Initially, the Tax Matters
Person shall be the Trustee.
Tax Matters Person Certificate: The Class A-R Certificate with
a Denomination of $1.00.
Transfer: Any direct or indirect transfer or sale of any
Ownership Interest in a Residual Certificate.
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 equal to
one-twelfth of the Trustee Fee Rate multiplied by the Pool Stated Principal
Balance with respect to such Distribution Date.
Trustee Fee Rate: With respect to each Mortgage Loan, the per
annum rate agreed upon in writing on or prior to the Closing Date by the Trustee
and the Depositor.
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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.
Unrecognized Cooperative Loan: A Cooperative Loan which is not
recognized by the related Cooperative Corporation.
Voting Rights: The portion of the voting rights of all of the
Certificates which is allocated to any Certificate. As of any date of
determination, (a) 1% of all Voting Rights shall be allocated to each Class of
Notional Amount Certificates, if any (such Voting Rights to be allocated among
the holders of Certificates of each such Class in accordance with their
respective Percentage Interests), and (b) the remaining Voting Rights (or 100%
of the Voting Rights if there is no Class of Notional Amount Certificates) shall
be allocated among Holders of the remaining Classes of Certificates in
proportion to the Certificate Balances of their respective Certificates on such
date.
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 and all interest and principal payments on the Mortgage Loans
received prior to the Cut-off Date in respect of installments of interest and
principal due thereafter, but not including payments of principal and interest
due and payable on the Mortgage Loans on or before the Cut-off Date and the
Seller's security interest in any Additional Collateral. Except as provided by
the Additional Pledged Collateral Custodial Agreement delivered herewith, 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 Due Date in the month of 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 Adjusted 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 and the security interest in the Additional Collateral, together with the
Depositor's right to require the Seller to cure any
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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 (or with respect to
one Mortgage Loan, a lost note affidavit) 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 Seller (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 with respect to a Cooperative Loan and
except as provided below, within 45 days after the Closing
Date the original recorded Mortgage and any amendment thereto
or a copy of such Mortgage or amendment certified by the
Seller as being a true and complete copy of the Mortgage;
(iii) except with respect to a Cooperative Loan, a
duly executed assignment of the Mortgage (which may be
included in a blanket assignment or assignments), together
with, except as provided below, within 45 days after the
Closing Date 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 Mortgage to
which the assignment relates) sufficient to show a complete
chain of assignment from the originator to the Seller;
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;
(iv) the original or copies of each assumption,
modification, written assurance or substitution agreement, if
any;
(v) except with respect to a Cooperative Loan and
except as provided below, within 45 days after the Closing
Date the original or duplicate original lender's title policy
and all riders thereto; and
(vi) in the case of a Cooperative Loan, the
originals of the following documents or instruments:
(a) The Coop Shares, together with a stock
power in blank;
(b) The executed Security Agreement;
(c) The executed Proprietary Lease;
(d) Except for Unrecognized Cooperative
Loans, the executed Recognition Agreement;
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(e) [Reserved];
(f) The executed UCC-1 financing statement
with evidence of recording thereon which have been
filed in all places required to perfect the Seller's
interest in the Coop Shares and the Proprietary
Lease; and
(g) Executed UCC-3 financing statements or
other appropriate UCC financing statements required
by state law, evidencing a complete and unbroken line
from the mortgagee to the Trustee with evidence of
recording thereon (or in a form suitable for
recordation).
In the event that in connection with the documents and
instruments specified above with respect to any Mortgage Loan the Depositor
cannot deliver (a) the original recorded Mortgage or any amendment thereto, (b)
all interim recorded assignments or (c) the lender's title policy (together with
all riders thereto) satisfying the requirements of clause (ii), (iii) or (v)
above, respectively, because such document or documents have not been returned
from the applicable public recording office in the case of clause (ii) or (iii)
above, or because the title policy has not been delivered to either the Master
Servicer or the Depositor by the applicable title insurer in the case of clause
(v) above, the Depositor shall promptly deliver to the Trustee, in the case of
clause (ii) or (iii) above, such original Mortgage, such amendment thereto 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, any amendment
thereto, 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, or, in the case of clause (v) above, no later than
120 days following the Closing Date; provided, however, in the event the
Depositor is unable to deliver by such date each Mortgage, any amendment
thereto, 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 or amendment
thereto 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.
As promptly as practicable subsequent to such transfer and
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
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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 and that the Master Servicer need not cause to be recorded any
assignment which relates to a Mortgage Loan (a) the Mortgaged Property and
Mortgage File relating to which are located in California or (b) in any other
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.
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 or the State of New York, 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. 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,
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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 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.
The Master Servicer, as custodian under the Additional Pledged
Collateral Custodial Agreement, acknowledges the deemed transfer to it as
custodian of the Additional Collateral and agrees that it shall hold the same on
behalf of the Trustee pursuant to the Additional Pledged Collateral Custodial
Agreement.
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) Boston Safe Deposit and Trust Company, 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.
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(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 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.
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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 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 in connection with a substitution 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.
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 either REMIC hereunder 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 each REMIC designated
hereunder shall be the Trustee and the Trustee shall hold the Tax Matters Person
Certificate. The fiscal year of each REMIC designated hereunder shall be the
calendar year.
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 Accepted Servicing Practices. 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
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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 or 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 either REMIC 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 and
record (if appropriate), 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 terms of this Agreement and Accepted
Servicing Practices, 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 payments of taxes and assessments on
the Mortgaged Properties and related insurance premiums shall not, for the
purpose of calculating monthly distributions to the Certificateholders, be added
to the Stated Principal Balances of the related Mortgage Loans, notwithstanding
that the terms of such Mortgage Loans so permit.
SECTION 3.02. Subservicing; Enforcement of the Obligations of
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
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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. The Master
Servicer shall be entitled to enter into an agreement with the Subservicer for
indemnification of the Master Servicer by the Subservicer and nothing contained
in this Agreement shall be deemed to limit or modify such indemnification. 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.
(c) The Master Servicer shall pay all fees and expenses of the
Subservicer from its own funds, and the Subservicer's fee shall not exceed the
Master Servicing Fee.
(d) At the cost and expense of the Master Servicer, without
any right of reimbursement from the Certificate Account, the Master Servicer
shall be entitled to terminate the rights and responsibilities of the
Subservicer and arrange for any servicing responsibilities to be performed by a
successor subservicer; provided, however, that nothing contained herein shall be
deemed to prevent or prohibit the Master Servicer, at the Master Servicer's
option, from electing to service the Mortgage Loans itself. In the event that
the Master Servicer's responsibilities and duties under this Agreement are
terminated pursuant to Section 6.04, 7.01 or 9.01, the Master Servicer shall at
its own cost and expense terminate the rights and responsibilities of the
Subservicer as soon as is reasonably possible. The Master Servicer shall pay all
fees, expenses or penalties necessary in order to terminate the rights and
responsibilities of the Subservicer from the Master Servicer's own funds without
reimbursement from the Depositor or the Trust Fund.
(e) Any subservicing Agreement and any other transactions or
services relating to the Mortgage Loans involving the Subservicer shall be
deemed to be between the Subservicer and Master Servicer alone, and the
Depositor and the Trustee shall have no obligations, duties or liabilities with
respect to the Subservicer including no obligation, duty or liability to pay the
Subservicer's fees and expenses.
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
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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 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 Accepted Servicing Practices 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, assumption fee or penalty interest in connection with the
prepayment of a Mortgage Loan or any other fee that may be collected in the
ordinary course of servicing the Mortgage Loans and (ii) extend the due dates
for payments due on a Mortgage Note for a period not greater than 180 days or
such longer period as may be consistent with a loan modification program
previously approved by the Depositor; 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 permit any modification of any
material term of any Mortgage Loan, including any modification that would change
the Mortgage Rate, defer or forgive the payment of principal or interest, reduce
or increase the outstanding principal balance (except for actual payments of
principal) on such Mortgage Loan. 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
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enforcing the provision of the Mortgage or other instrument pursuant to which
such payment is required is prohibited by applicable law.
(b) 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;
(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, it being understood and agreed that, without
limiting the generality of the foregoing, payments in the nature of prepayment
penalties, late payment charges or assumption fees, if collected, need not be
remitted by the Master Servicer. 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:
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(ix) the aggregate amount remitted by the Master Servicer to
the Trustee pursuant to Section 3.08(a)(ix);
(x) any amount deposited by the Master Servicer pursuant to
Section 3.05(d) in connection with any losses on Permitted Investments;
and
(xi) 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.
(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.
SECTION 3.06. Collection of Taxes, Assessments and Similar
Items; Escrow Accounts; Maintenance of Records.
(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, on a daily basis,
and retain therein all collections from the Mortgagors (or advances by the
Master Servicer) constituting Escrow Payments separate and apart from any of its
own funds and general
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assets 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 unless required by the applicable Mortgage Loan.
(b) Withdrawals of amounts so collected from the Escrow
Accounts may be made only to effect timely payment of ground rents, taxes,
assessments, water rates, mortgage insurance premiums, fire, flood and hazard
insurance premiums, condominium or PUD association dues, or comparable items
constituting Escrow Payments for the related Mortgage, 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 and insurance premiums) and
3.09 hereof (with respect to hazard insurance), to refund to any Mortgagors any
sums determined to be in excess of the amounts required under the terms of the
related Mortgage Note, 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 hereof. The Escrow Accounts shall not
be a part of the Trust Fund.
(c) With respect to each Mortgage Loan, the Master Servicer
shall maintain accurate records reflecting the status of ground rents, taxes,
assessments, water rates, sewer rents, and the charges which are or may become a
lien upon the Mortgaged Property and the status of fire, flood and hazard
insurance coverage and with respect to each Mortgage Loan which provides for
Escrow Payments, the Master Servicer shall obtain, from time to time, all bills
for the payment of such charges (including renewal premiums) and shall effect
payment thereof prior to the applicable penalty or termination date, employing
for such purpose deposits of the Mortgagor in the Escrow Account which shall
have been estimated and accumulated by the Master Servicer in amounts sufficient
for such purposes, as allowed under the terms of the Mortgage. The Master
Servicer shall advance any payments referred to in Section 3.06(a) that are not
timely paid by the Mortgagors in accordance with Accepted Servicing Practices,
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.
(d) The Master Servicer shall be entitled to retain any
interest on funds deposited in the Escrow Account by the depository institution,
other than interest on escrowed funds required by law to be paid to the
Mortgagor. To the extent required by law, the Master Servicer shall pay interest
on escrowed funds to the Mortgagor notwithstanding that the Escrow Account may
be non-interest bearing or that interest paid thereon is insufficient for such
purposes.
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
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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:
(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 3.14, 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 and (b) 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 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 hereof.
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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 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 and pay 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 hereof.
SECTION 3.09. Maintenance of Hazard Insurance.
(a) Except in the case of Cooperative Loans, the Master
Servicer shall cause to be maintained, for each Mortgage Loan, hazard insurance
such that all buildings upon the Mortgaged Property are insured by a FNMA or
FHLMC acceptable insurer against loss by fire, hazards of extended coverage and
such other hazards as are customary in the area where the Mortgaged Property is
located, in an amount that is at least equal to the lesser of (i) the
replacement value of the improvements securing such Mortgage Loan or (ii) the
greater of (y) the outstanding principal balance of the Mortgage Loan and (z) an
amount such that the proceeds of such policy shall be sufficient to prevent the
Mortgagor or the loss payee from becoming a co-insurer. If upon origination of
the Mortgage Loan, the related Mortgaged Property was located in an area
identified in the Federal Register by the Flood Emergency Management Agency as
having special flood hazards (and such flood insurance has been made available),
a flood insurance policy meeting the requirements of the current guidelines of
the Federal Flood Insurance Administration is in effect with a generally
acceptable insurance carrier in an amount representing coverage equal to the
lesser of (i) the minimum amount required, under the terms of coverage, to
compensate for any damage or loss on a replacement-cost basis or the unpaid
balance of the Mortgage Loan (if replacement coverage is not available for the
type of building insured) and (ii) the maximum amount of insurance which is
available under the Flood Disaster Protection Act of 1973, as amended. If a
Mortgage is secured by a unit in a condominium, the Master Servicer shall have
received a certificate of insurance evidencing a master policy held by the
owner's association and naming the Master Servicer as loss payee. All policies
required hereunder shall name the Master Servicer as loss payee and shall be
endorsed with standard mortgage clauses, which shall provide for at least 30
days' prior written notice of any cancellation, reduction in amount or material
change in coverage. The Master Servicer shall not interfere with the Mortgagor's
freedom of choice in selecting either his insurance carrier or agent;
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provided, however, that the Master Servicer shall not accept any such insurance
policies from insurance companies unless such companies satisfy the requirements
of FNMA or FHLMC and are licensed to do business in the jurisdiction in which
the Mortgaged Property is located. Any amounts collected by the Master Servicer
under any such policies (other than the amounts to be deposited in the Escrow
Account and to be applied to the restoration or repair of the related Mortgaged
Property) (or, in the case of a Cooperative Loan, the related Cooperative Unit)
or property acquired in liquidation of the Mortgage Loan, or amounts released to
the Mortgagor in accordance with the Master Servicer's normal servicing
procedures shall be deposited in the Certificate Account. Any cost incurred by
the Master Servicer in maintaining any such insurance shall not, for the purpose
of calculating monthly distributions to the Certificateholders or remittances to
the Trustee for their benefit, be added to the principal balance of the Mortgage
Loan, notwithstanding that the terms of the Mortgage Loan so permit. Such costs
shall be recoverable by the Master Servicer out of late payments by the related
Mortgagor or out of Liquidation Proceeds to the extent permitted by Section 3.08
hereof. It is understood and agreed that no earthquake or other additional
insurance is to be required of any Mortgagor or maintained on property acquired
in respect of a Mortgage other than pursuant to such applicable laws and
regulations as shall at any time be in force and as shall require such
additional insurance.
(b) In the event that the Master Servicer shall maintain a
blanket policy insuring against losses arising from fire and hazards covered
under extended coverage on any or all of the Mortgage Loans and, to the extent
such policy provides coverage in an amount equal to the amount required pursuant
to Section 3.09(a) and otherwise complies with all other requirements of Section
3.09(a), it shall conclusively be deemed to have satisfied its obligations as
set forth in Section 3.09(a). Any amounts collected by the Master Servicer under
any such policy relating to a Mortgage Loan shall be deposited in the
Certificate Account. Such policy may contain a deductible clause, in which case,
in the event that there shall not have been maintained on the related Mortgaged
Property a policy complying with Section 3.09(a), and there shall have been a
loss which would have been covered by such policy, the Master Servicer shall
deposit in the Certificate Account at the time of such loss the amount not
otherwise deposited from the Master Servicer's funds, without reimbursement
therefor. Upon request of the Depositor or the Trustee, the Master Servicer
shall cause to be delivered to the Depositor or the Trustee, as applicable, a
certified true copy of such policy and a statement from the insurer thereunder
that such policy shall in no event be terminated or materially modified without
thirty (30) days' prior written notice to the Depositor and the Trustee. In
connection with its activities as Master Servicer of the Mortgage Loans, the
Master Servicer agrees to present, on behalf of itself, the Depositor, and the
Trustee for the benefit of the Certificateholders, claims under any such blanket
policy.
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
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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 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 and if the credit of the proposed
transferee does not meet such underwriting criteria, the Master Servicer
diligently shall, to the extent permitted by the Mortgage or the Mortgage Note
and by applicable law, accelerate the maturity of the Mortgage Loan. 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.
In the event that any payment due under any Mortgage Loan and
not postponed pursuant to Section 3.01 is not paid when the same becomes due and
payable, or in the event the Mortgagor fails to perform any other covenant or
obligation under the Mortgage Loan and such failure continues beyond any
applicable grace period, the Master Servicer shall take such actions, including
foreclosure or other conversion, as (1) the Master Servicer would take under
similar circumstances with respect to a similar
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mortgage loan held for its own account for investment, (2) shall be consistent
with Accepted Servicing Practices, and (3) and shall meet the requirements of
the insurer under any Required Insurance Policy. In accordance with the
preceding sentence in the event that any payment due under any Mortgage Loan is
not postponed and remains delinquent for a period of ninety (90) days or any
other default continues for a period of ninety (90) days beyond the expiration
of any grace or cure period, the Master Servicer shall commence foreclosure
proceedings, provided, however, that the Master Servicer may enter into, and
shall give the Rating Agencies notice of, a special servicing agreement with an
unaffiliated holder of 100% Percentage Interest of one or more Classes of
Subordinated Certificates or a holder of a class of securities representing
interests in one or more Classes of Subordinated Certificates and provided,
further, that entering into such special servicing agreement shall not result in
the downgrading or withdrawal of the respective ratings when assigned to the
Certificates. Any such agreement may contain provisions whereby such holder may
instruct the Master Servicer to commence or delay foreclosure proceedings with
respect to delinquent Mortgage Loans and will contain provisions for the deposit
of cash by the holder that would be available for distribution to
Certificateholders if Liquidation Proceeds are less than they otherwise may have
been had the Master Servicer acted in accordance with its normal procedures.
Notwithstanding the foregoing, 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 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 the Pooling and Servicing
Agreement and the Trustee's capacity thereunder. Pursuant to its efforts to sell
such REO Property, the Master Servicer shall either itself or through an agent
selected by the Master Servicer manage, operate, protect and conserve such REO
Property in the same manner and to such extent as it manages, operates, protects
and conserves other foreclosed property for its own account, 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
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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,
by preparing such tax and information returns as may be required, in the form
required, and delivering the same to the Trustee for execution, if required, and
by filing the same.
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 three years after its acquisition by the Trust Fund unless the
Trustee shall have been supplied with an Opinion of Counsel to the effect that
the holding by the Trust Fund of such Mortgaged Property subsequent to such
three-year period will not result in the imposition of taxes on "prohibited
transactions" of 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 either 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 Master Servicer shall also maintain on each REO Property
fire and hazard insurance with extended coverage in an amount which is at least
equal to the lesser of the replacement value or the maximum insurable value of
the improvements which are part of such property, liability insurance and, to
the extend required and available under the Flood Disaster Protection Act of
1973, as amended, flood insurance in the amount required above. The Master
Servicer shall withdraw from the Certificate Account funds necessary for the
proper operation, management and maintenance of each REO Property, including the
cost of maintaining any hazard insurance pursuant to Section 3.09 and the fees
of any managing agent of the Master Servicer, a Subservicer, or the Master
Servicer itself.
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 costs and
expenses of bringing such a proceeding and if such determination cannot be made,
the Master Servicer shall deal with such Mortgage Loan in a manner consistent
with the servicing standard in Section 3.01 hereof. 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
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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 Adjusted Net
Mortgage Rate to the Due Date occurring in the month in which such amounts are
required to be distributed; and fifth, as a recovery of principal of the
Mortgage Loan. 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 3.14.
In the event that foreclosure proceedings are commenced in
respect of any Mortgage Loan as to which Additional Collateral has been pledged
as security, the Master Servicer shall, if such Additional Collateral is readily
marketable, immediately commence the liquidation of such collateral. The
proceeds of such sale shall be promptly deposited in the Certificate Account. If
such Additional Collateral is not readily marketable, the Master Servicer shall
not exercise any right it may have to seize, convert or otherwise assume
ownership of such Additional Collateral.
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. 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 deliver the related Mortgage File to the Master Servicer
within five (5) Business Days after the receipt of the request, 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
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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.
SECTION 3.13. 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 3.14. 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,
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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 Excess
Proceeds, prepayment penalties, assumption fees, late payment charges and 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
hazard insurance and maintenance of the other forms of insurance coverage
required by this Agreement) and shall not be entitled to reimbursement therefor
except as specifically provided in this Agreement.
SECTION 3.15. 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 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 3.16. Annual Statement as to Compliance.
The Master Servicer shall deliver to the Depositor and the
Trustee on or before March 31st each year beginning March 31, 2000, 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 and the action being taken by the
Master Servicer to cure such default. The Trustee shall forward a copy of each
such statement to each Rating Agency.
SECTION 3.17. Annual Independent Public Accountants' Servicing
Statement; Financial Statements.
On or before March 31st of each year beginning March 31, 2000,
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 Program 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
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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 3.18. 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, 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.
SECTION 3.19. Inspections.
The Master Servicer shall inspect the Mortgaged Property as
often as deemed necessary by the Master Servicer to assure itself that the value
of the Mortgaged Property is being preserved. In addition, if any Mortgage Loan
is more than ninety (90) days delinquent, the Master Servicer immediately shall
inspect the Mortgaged Property and shall conduct subsequent inspections in
accordance with Accepted Servicing Practices. The Master Servicer shall keep a
written report of each such inspection.
SECTION 3.20. Restoration of Mortgaged Property.
The Master Servicer need not obtain the approval of the
Depositor or the Trustee prior to releasing any Insurance Proceeds to the
Mortgagor to be applied to the restoration or repair of the Mortgaged Property
if such release is in accordance with Accepted Servicing Practices.
If the Depositor or the Trustee is named as an additional loss
payee, the Master Servicer is hereby empowered to endorse any loss draft issued
in respect of such a claim in the name of the Depositor or the Trustee.
SECTION 3.21. Put Option and Mandatory Call.
During the Put Period, each Certificateholder, or in the event
that such Certificates are still held in book-entry form, each Certificate
Owner, of the Certificates may exercise the Put Option by written notice to the
Master Servicer or, to the extent that the Certificates are still held in
book-entry form, DTC. Notice by a Certificateholder or Certificate Owner, as
applicable, of the exercise of a Put Option will be irrevocable. At the end of
the Put Period, based on information obtained by the Master Servicer from DTC
with respect to Book-Entry Certificates, if applicable, the Master Servicer
shall notify the Standby Purchaser, and the Trustee in writing of the number of
Certificateholders, or
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Certificate Owners, as applicable, who have exercised the Put Option and the
percentage of the Class Certificate Balance of Certificates held by such
Certificateholders or Certificate Owners, as applicable. In the event that the
Put Option has been exercised with respect to more than 90% of the aggregate
outstanding Class Certificate Balance of the Certificates, the Master Servicer
shall so notify the Standby Purchaser in writing, and the Standby Purchaser will
be entitled to exercise the Mandatory Call. Not later than the fourth Business
Day prior to the Put Date, the Standby Purchaser shall pay to the Trustee, and
the Trustee shall deposit, into the Distribution Account, (i) if the Standby
Purchaser has exercised the Mandatory Call, the Mandatory Call, the Mandatory
Call Purchase Price, or (ii) otherwise, the Put Purchase Price for each
Certificate for which the Certificateholder has exercised the Put Option.
On the Put Date, with respect to each Certificate for which
the Put Option was exercised, or as to all Certificates if the Standby Purchaser
has exercised the Mandatory Call, the Trustee shall withdraw from the
Distribution Account the applicable Put Purchase Price and distribute it to the
related Certificateholder by wire transfer in immediately available funds for
the account of such Certificateholder, or by any other means of payment as
specified by such Certificateholder and at the address of such Holder appearing
in the Certificate Register, provided that such payment shall only be made after
presentation and surrender of the Certificate if the Certificates are no longer
held in book-entry form.
In the event that the Certificates are no longer held in
book-entry form, and any Certificateholders of the Certificates, in the case of
the exercise of the Mandatory Call or all Certificateholders who exercised the
Put Option, in the case of the Put Option, shall not surrender their
Certificates for cancellation within six months after the applicable Put Date,
the Master Servicer shall give or cause the Trustee to give second written
notice to the remaining Certificateholders to surrender their Certificates for
cancellation and receive the Put Purchase Price with respect thereto. If within
one year after the second notice all the related Certificates shall not have
been surrendered for cancellation, the Master Servicer may take appropriate
steps to contact the remaining Certificateholders concerning surrender of their
Certificates, and the cost thereof shall be paid out of the applicable Put
Purchase Price, in the case of the Put Option or out of funds and other assets
which remain in the Trust Fund in the case of the Mandatory Call.
The Standby Purchaser's obligation to make payments hereunder
is irrevocable, unconditional, and not subject to any defense, rights of setoff,
counterclaim or rescission.
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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.
(a) On each Distribution Date, the Trustee shall, to
the extent on deposit therein, withdraw the Available Funds
from the Distribution Account and apply such funds to
distributions on the specified Classes of Certificates, in the
following order and priority and, in each case, to the extent
of such funds remaining:
(i) concurrently, to each interest-
bearing Class of Senior Certificates, an amount
allocable to interest equal to the related Class
Optimal Interest Distribution Amount, any shortfall
being allocated among such Classes in proportion to
the amount of the Class Optimal Interest Distribution
Amount that would have been distributed in the
absence of such shortfall;
(ii) [Reserved for distribution of Accrual
Amount, if any.]
(iii) to each Class of Senior Certificates
as follows:
(x) [reserved];
(y) on each Distribution Date prior
to the Senior Credit Support Depletion Date,
the Formula Principal Amount, up to the
amount of the Senior Principal Distribution
Amount for such Distribution Date will be
distributed as principal to the following
Classes of Senior Certificates, in the
following order of priority:
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(A) to the Class A-R
Certificates, until the
Class Certificate Balance
thereof is reduced to zero;
and
(B) sequentially, to the Class
A-1, Class A-2 and Class
A-3 Certificates, in that
order, until the respective
Class Certificate Balances
thereof are reduced to
zero.
(iv) On each Distribution Date, Available
Funds remaining after making the distributions
described in 4.02 (a) (i) through (iii) above, will
be distributed to the Subordinated Certificates in
the following order and priority and, in each case,
to the extent of such funds remaining:
(A) to the Class B-1
Certificates, an amount
allocable to interest equal
to the Class Optimal
Interest Distribution
Amount for such
Distribution Date;
(B) to the Class B-1
Certificates, an amount
allocable to principal
equal to its Pro Rata Share
for such Distribution Date
until the Class Certificate
Balance thereof is reduced
to zero;
(C) to the Class B-2
Certificates, an amount
allocable to interest equal
to the Class Optimal
Interest Distribution
Amount for such Class for
such Distribution Date;
(D) to the Class B-2
Certificates, an amount
allocable to principal
equal to its Pro Rata Share
for such Distribution Date
until the Class Certificate
Balance thereof is reduced
to zero;
(E) to the Class B-3
Certificates, an amount
allocable to interest equal
to the Class Optimal
Interest Distribution
Amount for such Class for
such Distribution Date;
(F) to the Class B-3
Certificates, an amount
allocable to principal
equal to its Pro Rata Share
for such Distribution Date
until the Class Certificate
Balance thereof is reduced
to zero;
(G) to the Class B-4
Certificates, an amount
allocable to interest equal
to the amount of the Class
Optimal Interest
Distribution Amount for
such Class for such
Distribution Date;
(H) to the Class B-4
Certificates, an amount
allocable to principal
equal to its Pro Rata Share
for such Distribution Date
until the Class Certificate
Balance thereof has been
reduced to zero;
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(I) to the Class B-5
Certificates, an amount
allocable to interest equal
to the amount of the Class
Optimal Interest
Distribution Amount for
such Class for such
Distribution Date;
(J) to the Class B-5
Certificates, an amount
allocable to principal
equal to its Pro Rata Share
for such Distribution Date
until the Class Certificate
Balance thereof has been
reduced to zero;
(K) to the Class B-6
Certificates, an amount
allocable to interest equal
to the Class Optimal
Interest Distribution
Amount for such Class for
such Distribution Date; and
(L) to the Class B-6
Certificates, an amount
allocable to principal
equal to its Pro Rata Share
for such Distribution Date
until the Class Certificate
Balance thereof is reduced
to zero.
(v) to the Class A-R Certificates, in
respect of the MR Interest, any remaining funds in
the Master REMIC and in respect of the SR Interest,
any remaining funds in the Subsidiary REMIC.
(b) [Reserved for allocation of Accrual Amount, if any.]
(c) On each Distribution Date on or after the Senior Credit
Support Depletion Date, notwithstanding the allocation and priority set forth in
Section 4.02(a)(iii)(y), the portion of Available Funds available to be
distributed as principal of the Senior Certificates shall be distributed
concurrently, as principal, on such Classes, pro rata, on the basis of their
respective Class Certificate Balances, until the Class Certificate Balances
thereof are reduced to zero.
(d) On each Distribution Date, the amount referred to in
clause (i) of the definition of Class Optimal Interest Distribution Amount for
each Class of Certificates for such Distribution Date shall be reduced by the
related Class' pro rata share of (i) Net Prepayment Interest Shortfalls based on
such Class' Optimal Interest Distribution Amount without taking into account
such Net Prepayment Interest Shortfalls, (ii) after the Special Hazard Coverage
Termination Date, with respect to each Mortgage Loan that became a Special
Hazard Mortgage Loan during the calendar month preceding the month of such
Distribution Date, the excess of one month's interest at the related Adjusted
Net Mortgage Rate on the Stated Principal Balance of such Mortgage Loan as of
the Due Date in such month over the amount of Liquidation Proceeds applied as
interest on such Mortgage Loan with respect to such month, (iii) after the
Bankruptcy Coverage Termination Date, with respect to each Mortgage Loan that
became subject to a Bankruptcy Loss during the calendar month preceding the
month of such Distribution Date, the interest portion of the related Debt
Service Reduction or Deficient Valuation, (iv) each Relief Act Reduction
incurred during the calendar month preceding the month of such Distribution Date
and (v) after the Fraud Coverage Termination Date, with respect to each Mortgage
Loan that became a Fraud Loan during the calendar month preceding the month of
such Distribution Date, the excess of one month's interest at the related
Adjusted Net Mortgage Rate on the Stated Principal Balance of such
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Mortgage Loan as of the Due Date in such month over the amount of Liquidation
Proceeds applied as interest on such Mortgage Loan with respect to such month.
(e) Notwithstanding the priority and allocation contained in
Section 4.02(a)(iv), if with respect to any Class of Subordinated Certificates
on any Distribution Date the sum of the related Class Subordination Percentages
of such Class and of all Classes of Subordinated Certificates which have a
higher numerical Class designation than such Class (the "Applicable Credit
Support Percentage") is less than the Original Applicable Credit Support
Percentage for such Class, no distribution of Principal Prepayments will be made
to any such Classes (the "Restricted Classes") and the amount of such Principal
Prepayments otherwise distributable to the Restricted Classes shall be
distributed to any Classes of Subordinated Certificates having lower numerical
Class designations than such Class, pro rata, based on their respective Class
Certificate Balances immediately prior to such Distribution Date and shall be
distributed in the sequential order provided in Section 4.02(a)(iv).
(f) On each Distribution Date, Available Funds shall be
distributed on the Subsidiary REMIC Regular Interests, in each case in an amount
sufficient to make the distributions to the Corresponding Classes of
Certificates on such Distribution Date in accordance with the provisions of
Section 4.02(a).
SECTION 4.03. Allocation of Realized Losses.
(a) On or prior to each Determination Date, the Master
Servicer shall determine the total amount of Realized Losses, including Excess
Losses, with respect to the related Distribution Date.
Realized Losses with respect to any Distribution Date shall be
allocated as follows:
(i) any Realized Loss (other than an Excess Loss) shall be
allocated first to the Subordinated Certificates in reverse order of
their respective numerical Class designations (beginning with the Class
of Subordinated Certificates then outstanding with the highest
numerical Class designation) until the respective Class Certificate
Balance of each such Class is reduced to zero, and second to the Senior
Certificates (other than the Notional Amount Certificates), pro rata on
the basis of their respective Class Certificate Balances immediately
prior to the related Distribution Date until the Class Certificate
Balances thereof have been reduced to zero;
(ii) any Excess Losses on the Mortgage Loans shall be
allocated to the Senior Certificates (other than the Notional Amount
Certificates) and the Subordinated Certificates then outstanding, pro
rata, on the basis of, their respective Class Certificate Balances.
(b) The Class Certificate Balance of the Class of Subordinated
Certificates then outstanding with the highest numerical Class
designation shall be reduced on each Distribution Date by the amount,
if any, by which the aggregate of the Class Certificate Balances of all
outstanding Classes of Certificates (after giving effect to the
distribution of principal and the allocation of Realized Losses on such
Distribution Date) exceeds the Pool Stated Principal Balance for the
following Distribution Date.
(c) Any Realized Loss allocated to a Class of Certificates or
any reduction in the Class Certificate Balance of a Class of Certificates
pursuant to Section 4.03(a) above shall be allocated among the Certificates of
such Class in proportion to their respective Certificate Balances.
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(d) Any allocation of Realized Losses to a Certificate or any
reduction in the Certificate Balance of a Certificate, pursuant to Section
4.03(a) above shall be accomplished by reducing the Certificate Balance thereof
immediately following the distributions made on the related Distribution Date in
accordance with the definition of "Certificate Balance."
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
Class Unpaid Interest Shortfall included in such distribution
and any remaining Class Unpaid Interest Shortfall 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 or Notional
Amount of each Class of Certificates after giving effect to
the distribution of principal on such Distribution Date;
(v) the Pool Stated Principal Balance for the
following Distribution Date;
(vi) the Senior Percentage and Subordinated
Percentage for the following Distribution Date;
(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;
(x) the number and aggregate principal amounts of
Mortgage Loans (A) delinquent (exclusive of Mortgage Loans in
foreclosure) (1) 1 to 30 days (2) 31 to 60 days (3) 61 to 90
days and (4) 91 or more days and (B) in foreclosure and
delinquent (1) 1 to 30 days (2) 31 to 60 days (3) 61 to 90
days and (4) 91 or more days, as of the close of business on
the last day of the calendar month preceding such Distribution
Date;
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(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 last day of the calendar month
preceding such Distribution Date;
(xii) the total number and principal balance of any
REO Properties (and market value, if available) as of the
close of business on the last day of the calendar month
preceding such Distribution Date;
(xiii) the Senior Prepayment Percentage for the
following Distribution Date;
(xiv) the aggregate amount of Realized Losses
incurred during the preceding calendar month; and
(xv) the Special Hazard Loss Coverage Amount, the
Fraud Loss Coverage Amount and the Bankruptcy Loss Coverage
Amount, in each case as of the related Determination Date.
(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) Within one Business Day of 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, including, without limitation, commencing with the
Determination Date preceding the Initial Roll Date and each Determination Date
thereafter, the Master Servicer's determination of the weighted average of the
Loan Indices on the Mortgage Loans.
(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) On or before the Distribution Date preceding the
commencement of the Put Period, the Master Servicer shall prepare and forward to
the Trustee and the Depositor, and the Trustee shall forward to each
Certificateholder, notice to the effect that:
(i) (A) such Certificateholder, or Certificate
Owner in the event that the Certificates are still held in
book-entry form, has the right to exercise the Put Option
during the Put Period, (B) if the Certificateholder or
Certificate Owner, as the case may, choose to exercise the Put
Option, no interest shall accrue on such Certificate after the
Put Date;
(ii) such Put Option may be exercised by (a) in the
event that the Certificates are no longer held in book-entry
form, providing irrevocable, written notice
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of such Certificateholder's exercise of the Put Option to the
Master Servicer and presenting and surrendering such
Certificate at the office or agency of the Certificate
Registrar maintained for such purpose (the address of which
shall be set forth in such notice) or (b) in the event that
the Certificates are still held in book-entry form, providing
irrevocable, written notice of such Certificate Owner's
exercise of the Put Option to DTC;
(iii) if the Certificateholder, or the Certificate
Owner, as the case may be, complies with the preceding clause,
the Put Purchase Price shall be payable on the Put Date; and
(iv) if Certificateholders, or if the Certificates
are still held in book-entry form, Certificate Owners, holding
more than 90% of the Class Certificate Balance of the
Certificates notify the Master Servicer of their intent to
exercise the Put Option, the Standby Purchaser will be
entitled to exercise the Mandatory Call.
At least ten (10) days preceding the Put Date, if the Standby
Purchaser intends to exercise the Mandatory Call, the Standby Purchaser will
cause the Master Servicer to prepare and forward to the Trustee and the
Depositor, and the Trustee shall forward to each Certificateholder notice to the
effect that:
(i) the Standby Purchaser has exercised the
Mandatory Call; and
(ii) if the Holder did not exercise the Put Option,
(A) in the event that the Certificates are no longer held in
book-entry form, the Put Purchase Price will be payable upon
presentation and surrender of such Certificate at the office
or agency of the Certificate Registrar maintained for such
purpose (the address of which shall be set forth in such
notice), and (B) no interest shall accrue on such Certificate
after the Put Date.
The Standby Purchaser shall give the Trustee written notice
not less than 30 days prior to the Put Date stating its intention, or lack of
intention, to repurchase the Certificates upon exercise of the Put Option or to
pay the Mandatory Call Purchase Price upon exercise of the Mandatory Call
Option.
SECTION 4.05. Determination of Pass-Through Rates for COFI
Certificates.
The Pass-Through Rate for each Class of COFI Certificates for
each Interest Accrual Period after the initial Interest Accrual Period shall be
determined by the Trustee as provided below on the basis of the Index and the
applicable formulae appearing in footnotes corresponding to the COFI
Certificates in the table relating to the Certificates in the Preliminary
Statement.
Except as provided below, with respect to each Interest
Accrual Period following the initial Interest Accrual Period, the Trustee shall
not later than two Business Days following the publication of the applicable
Index determine the Pass-Through Rate at which interest shall accrue in respect
of the COFI Certificates during the related Interest Accrual Period.
Except as provided below, the Index to be used in determining
the respective Pass-Through Rates for the COFI Certificates for a particular
Interest Accrual Period shall be COFI for the second calendar month preceding
such Interest Accrual Period. If at the Outside Reference Date for any Interest
Accrual Period, COFI for the second calendar month preceding such Interest
Accrual Period has not been published, the Trustee shall use COFI for the third
calendar month preceding such Interest
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Accrual Period. If COFI for neither the second nor third calendar months
preceding any Interest Accrual Period has been published on or before the
related Outside Reference Date, the Index for such Interest Accrual Period and
for all subsequent Interest Accrual Periods shall be the National Cost of Funds
Index for the third calendar month preceding such Interest Accrual Period (or
the fourth preceding calendar month if such National Cost of Funds Index for the
third preceding calendar month has not been published by such Outside Reference
Date). In the event that the National Cost of Funds Index for neither the third
nor fourth calendar months preceding an Interest Accrual Period has been
published on or before the related Outside Reference Date, then for such
Interest Accrual Period and for each succeeding Interest Accrual Period, the
Index shall be LIBOR, determined in the manner set forth below.
On each Interest Determination Date so long as the COFI
Certificates are outstanding and the applicable Index therefor is LIBOR, 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 the Reuters Screen LIBO Page (as defined in the International Swap
Dealers Association Inc. Code of Standard Wording, Assumptions and Provisions
for Swaps, 1986 Edition), to the extent available.
With respect to any Interest Accrual Period for which the
applicable Index is LIBOR, LIBOR for such Interest Accrual Period will be
established by the Trustee on the related 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.
From such time as the applicable Index becomes LIBOR until all
of the COFI Certificates are paid in full, the Trustee will at all times retain
at least four Reference Banks for the purposes of determining LIBOR with respect
to each interest Determination Date. The Master Servicer initially shall
designate the Reference Banks. 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
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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
four Reference Banks which is caused by circumstances beyond its reasonable
control.
In determining LIBOR and any Pass-Through Rate for the COFI
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 the Reuters Screen) 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.
SECTION 4.06. 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 the Reuters Screen
LIBO Page (as defined in the International Swap Dealers Association Inc. Code of
Standard Wording, Assumptions and provisions for Swaps, 1986 Edition), 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.
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(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 four Reference Banks for the purpose
of determining LIBOR with respect to each Interest Determination Date. The
Master Servicer initially shall designate the Reference Banks. 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 four Reference Banks
which is caused by circumstances beyond its reasonable control.
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 the Reuters Screen) 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 4.06.
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.
SECTION 4.07. Determination of Pass-Through Rates for Variable
Rate Certificates.
On each Determination Date, commencing with the Determination
Date preceding the Initial Roll Date, and so long as any Class of Variable Rate
Certificates is outstanding, the Trustee will ascertain the Pass-Through Rate
for the Variable Rate Certificates based on information provided to the Trustee
by the Master Servicer.
The Trustee's determination of each Pass-Through Rate for the
Variable Rate Certificates for the related Interest Accrual Period will (in the
absence of manifest error) be final 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 9.02 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) a Notional Amount
Certificate, (B) 100% of the Class Certificate Balance of any Class of
Certificates or (C) 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.
(b) No transfer of a Private 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-1 or J-2 as applicable (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 Private
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 Private 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 Private
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 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
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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") (in the event such
Residual Certificate is a Private Certificate) 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 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
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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) (in the event such Residual
Certificate is a Private Certificate) 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 (in the event
such Residual Certificate is a Private Certificate). 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.
(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
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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, 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.
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
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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 of such Trust Fund 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 Albany
Street, New York, New York 10006 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.
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
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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, or affiliated with an entity 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 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.
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SECTION 6.04. Limitation on Resignation of Master Servicer.
Except as provided in Section 6.02, 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.
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 or liquidator in any insolvency,
readjustment of debt, marshaling of assets and liabilities or
similar proceedings, or for the winding-up or liquidation of
its affairs, 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 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
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(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 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 25% 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
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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 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.
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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.
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
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(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.
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);
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(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
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, Mortgage
Loans or Additional Collateral.
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 of any Additional Collateral which may
be held by a custodian on behalf of the Trustee or of any 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
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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 or
for any other expenses.
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
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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.
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
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request to do so, or in the case an Event of Default shall have occurred and be
continuing, the Trustee 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 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
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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
REMICs' 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 either 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 either REMIC, including but not
limited to the income, expenses, assets and liabilities thereof and the fair
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
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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 the
REMICs, and otherwise act on behalf of REMICs 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 either 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 either 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 either 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 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 Adjusted 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, (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 and (c) the exchange of all
Outstanding Regular Certificates by a single Holder for the Mortgage Loans and
REO Properties remaining in the Trust Fund. 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 Joseph P. Kennedy, 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 Stated Principal Balance, at the time of any such
repurchase, aggregating five percent or less of the aggregate Cut-off Date
Principal Balance of the Mortgage Loans.
SECTION 9.02. 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.
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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. 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.
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 accrued interest
thereon (or on their Notional Amount, if applicable) in the case of an interest
bearing Certificate, 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 A-R Certificateholders shall be entitled to all unclaimed funds and
other assets of the Trust Fund which remain subject hereto.
SECTION 9.03. 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
9.03 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
hereunder 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 9.02,
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
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Counsel referred to in Section 9.03(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.
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 hereunder as a REMIC under the Code or to avoid or
minimize the risk of the imposition of any tax on any REMIC hereunder 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
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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
hereunder or the Certificateholders or cause any REMIC hereunder to fail to
qualify as a REMIC at any time that any Certificates are outstanding.
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
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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 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;
5. The final payment to Certificateholders; and
6. The exercise of the Mandatory Call.
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
3.16;
3. Each annual independent public accountants' servicing
report described in Section 3.17; 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, 500 Grant Street, Pittsburgh, Pennsylvania 15258,
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Attention: Stephen Cobain , (b) in the case of the Master Servicer, Boston Safe
Deposit and Trust Company, One Boston Place, Boston, Massachusetts 02108,
Attention: Kelly A. Gately or such other address as may be hereafter furnished
to the Depositor and the Trustee by the Master Servicer in writing, (c) in 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
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Certificates shall have any right in any manner whatever by virtue or by
availing itself or themselves of 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 Certificateholders
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 Standby
Purchaser, 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
By: Steve Cobain
---------------------------------------
Name: Steve Cobain
Title: First Vice President
BANKERS TRUST COMPANY OF CALIFORNIA, N.A.,
as Trustee
By: Mary Boyle
---------------------------------------
Name: Mary Boyle
Title: Assistant Vice President
MELLON BANK, N.A.,
as Standby Purchaser
By: Paul H. Dimmick
---------------------------------------
Name: Paul H. Dimmick
Title: Executive Vice President
BOSTON SAFE DEPOSIT AND TRUST COMPANY,
as Seller and Master Servicer
By: Kelly A. Gately
---------------------------------------
Name: Kelly A. Gately
Title: Vice President
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SCHEDULE I
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<PAGE> 99
SCHEDULE II
Mellon Residential Funding Corporation
Mortgage Pass-Through Certificates
Series 1998-TBC1
Representations and Warranties of the Seller/Master Servicer
Boston Safe Deposit and Trust Company ("Boston Safe") 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 Boston Safe, as seller and master servicer,
Mellon Residential Funding Corporation, as depositor, Bankers Trust Company of
California, N.A., as trustee and Mellon Bank, N.A., as standby purchaser.
(1) Boston Safe is a trust company duly organized, validly
existing and in good standing under the laws of the Commonwealth of
Massachusetts and is duly authorized and qualified to transact any and
all business contemplated by the Pooling and Servicing Agreement to be
conducted by Boston Safe 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) Boston Safe 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 Boston Safe 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 Boston Safe,
enforceable against Boston Safe 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 (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 Boston Safe, the sale and servicing of the Mortgage Loans
by Boston Safe 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 Boston
Safe and will not (A) result in a material breach of any term or
provision of the charter or by-laws of Boston Safe 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 Boston Safe is a party or by
which it may be bound, or (C) constitute a material violation of any
statute, order or regulation
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applicable to Boston Safe of any court, regulatory body, administrative
agency or governmental body having jurisdiction over Boston Safe; and
Boston Safe 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 Boston Safe's ability to perform or
meet any of its obligations under the Pooling and Servicing Agreement.
(4) Boston Safe is an approved seller/servicer of conventional
residential mortgage loans for FNMA or FHLMC, with the facilities,
procedures, and experienced personnel necessary for the servicing, in
accordance with Accepted Servicing Practices, of mortgage loans of the
same type as the Mortgage Loans, and is in good standing, to sell
mortgage loans to and service mortgage loans for FNMA or FHLMC, and no
event has occurred, including but not limited to a change in insurance
coverage, which would make Boston Safe unable to comply with FNMA or
FHLMC eligibility requirements or which would require notification to
either FNMA or FHLMC.
(5) No litigation is pending or, to the best of Boston Safe's
knowledge, threatened, against Boston Safe that would materially and
adversely affect the execution, delivery or enforceability of the
Pooling and Servicing Agreement or the ability of Boston Safe 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 Boston Safe of, or compliance by Boston Safe 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, Boston Safe has obtained the same.
(7) Boston Safe 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.
(8) The Mortgage Loans were selected from the outstanding
adjustable rate one- to four- family mortgage loans in the Boston
Safe's portfolio at the Closing Date as to which the representations
and warranties set forth in Schedule III attached hereto could be made
and such selection was not made in a manner so as to affect adversely
the interests of the Depositor, the Trustee or the Certificateholders.
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SCHEDULE III
Mellon Residential Funding Corporation
Mortgage Pass-Through Certificates
Series 1998-TBC1
Representations and Warranties as to the Mortgage Loans
Boston Safe Deposit and Trust Company ("Boston Safe") 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 Boston Safe, 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; and as of
the Cut-off Date, no Mortgage Loan has been contractually delinquent
for 30 or more days during the twelve months prior to the Cut-off Date.
(3) No Mortgage Loan has a Loan-to-Value Ratio at origination
(or, if any Mortgage Loan has been the subject of a significant
modification since origination, other than as a result of a default or
imminent default, as of the date of such modification) equal to or
greater than 100%.
(4) Each Mortgage is a valid, subsisting, enforceable and
perfected first 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 or which do not adversely affect the Property Value, and
(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. Any security agreement, chattel
mortgage or equivalent document related to and delivered in connection
with the Mortgage Loan establishes and creates a valid, subsisting and
enforceable first lien and first priority security interest on the
Mortgaged Property and any Additional Collateral for the Mortgage Loan
and the Seller has full right to sell and assign the same to the
Depositor.
(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.
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(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.
(8) There are no mechanics' or similar 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,
except those which are insured against by the title insurance policy
referred to in item (12) below.
(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, local 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, except in the circumstances contemplated in item (50)
below. The Seller has not waived the performance by the Mortgagor of
any action, if the Mortgagor's failure to perform such action would
cause the Mortgage Loan to be in default, nor has the Seller waived any
default resulting from any action or inaction by the Mortgagor.
(12) Except in the case of Cooperative Loans, the Mortgage
Loan is covered by either (i) an attorney's opinion of title and
abstract of title the form and substance of which is acceptable to
mortgage lending institutions making mortgage loans in the area where
the Mortgaged Property is located or (ii) an ALTA lender's title
insurance policy or other generally acceptable form of policy of
insurance acceptable to FNMA or FHLMC, issued by a title insurer
acceptable to FNMA or FHLMC and qualified to do business in the
jurisdiction where the Mortgaged Property is located, insuring the
Seller, it successors and assigns, as to the first priority lien of the
Mortgage, subject to the exceptions set forth in paragraph (4) above,
at an amount at least equal to the Cut-off Date Stated Principal
Balance of each such Mortgage Loan. If the Mortgaged Property is a
condominium unit located in a state in which a title insurer will
generally issue an endorsement, then the related title insurance policy
contains an endorsement insuring the validity of the creation of the
condominium form of ownership with respect to the project in which such
unit is located. Each such title insurance policy is valid and remains
in full force and effect. To the best of the Seller's knowledge, no
claims have been made under such mortgage title insurance policy and no
prior holder of the related Mortgage, including the Seller,
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<PAGE> 103
has done, by act or omission, anything which would impair the coverage
of such mortgage title insurance policy.
(13) Each Mortgage Loan was originated by an entity that
satisfied at the time of origination the requirements of Section
3(a)(41)(A)(ii) of the Securities Exchange Act of 1934, as amended.
(14) To the best of the Seller's knowledge, all improvements
which were considered in determining the Property Value of the
Mortgaged Property lay wholly within the boundaries and building
restriction lines of the Mortgaged Property (and, if the property is a
condominium unit, such improvements lie wholly within the project) and
no improvements on adjoining properties encroach upon the Mortgaged
Property.
(15) 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 (or, in the case of a Cooperative Loan, the related
Cooperative Unit) 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 (or, in the case of a Cooperative Loan, the
related Cooperative Unit) is lawfully occupied under applicable law.
(16) 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.
(17) 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.
(18) 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.
(19) 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.
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(20) 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.
(21) 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.
(22) The origination and collection practices used by the
Seller with respect to each Mortgage Loan have been in accordance with
Accepted Servicing Practices, and have been in all respects in
compliance with all applicable laws and regulations. All Mortgage Rate
adjustments have been made in compliance with state and federal law and
the terms of the related Mortgage Note. Any interest required to be
paid pursuant to state and local law has been properly paid and
credited.
(23) With the exception of Mortgage Loans identified on the
Mortgage Loan Schedule as having Additional Collateral, the Mortgage
Note is not secured by any collateral except the lien on Mortgaged
Property created by the corresponding Mortgage and the security
interest or any applicable security agreement or chattel mortgage
referred to in paragraph (4) above.
(24) No Mortgage Loan has a shared appreciation feature, or
other contingent interest feature.
(25) Each Mortgage Loan contains a customary "due on sale"
clause.
(26) Approximately 95% of the Mortgage Loans provide for a
prepayment penalty if the Mortgagor prepays the related Mortgage Loan
within the first year of origination.
(27) No Mortgage Loan has a Loan-to-Collateral Value Ratio at
origination equal to or greater than 90%.
(28) Except in the case of Cooperative Loans at the Cut-off
Date, 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 hazards of 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 replacement value of the improvements securing
such Mortgage Loan or (ii) the greater of (a) the outstanding principal
balance of the Mortgage Loan 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. If the Mortgaged Property is a
condominium unit, it is included under the coverage afforded by a
blanket policy for the condominium unit. All such individual insurance
policies and all flood policies referred to in item (29) 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 Mortgagor's failure to do
so, authorizes the holder of
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the Mortgage to obtain and maintain such insurance at the Mortgagor's
cost and expense and to seek reimbursement therefor from the Mortgagor.
(29) If the Mortgaged Property is in an area identified in the
Federal Register by the Federal Emergency Management Agency as having
special flood hazards and such flood insurance has been made available,
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 lesser of
(A) the minimum amount required, under the terms of coverage, to
compensate for any damage or loss on a replacement-cost basis or the
unpaid balance of the Mortgage Loan (if replacement coverage is not
available for the type of building insured), and (B) the maximum amount
of insurance that is available under the Flood Disaster Protection Act
of 1973, as amended.
(30) 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.
(31) 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.
(32) Except for Cooperative Loans, the Mortgaged Property is
located in the state identified in the Mortgage Loan Schedule and
consists of a parcel of real property with a detached single family
residence will be erected, or a two- to four- family dwelling, or an
individual condominium unit in a condominium project, or an individual
unit in a PUD which, to the best of Seller's knowledge, does not
include mobile homes and does not constitute other than real property
under state law. For Cooperative Loans, the Mortgaged Property consists
of shares of stock in a cooperative housing corporation and a leasehold
interest in a cooperative apartment owned by such corporation located
in the state identified in the Mortgaged Loan Schedule.
(33) Each Mortgage Loan is being serviced by the Master
Servicer.
(34) 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.
(35) 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,
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whichever is later, to the day which precedes by one month the 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.
(36) Each Mortgage Loan was underwritten in all material
respects in accordance with the Seller's underwriting guidelines as set
forth in the Prospectus Supplement.
(37) Prior to the closing of the Mortgage Loan, 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 in compliance with applicable federal law governing appraisals
generally acceptable to FNMA and FHLMC.
(38) 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.
(39) Any leasehold estate securing a Mortgage Loan has a term
of not less than five years in excess of the term of the related
Mortgage Loan.
(40) The Mortgage Loans were selected from among the
outstanding adjustable-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.
(41) Each Mortgage Loan has a payment date on or before the
Due Date in the month of the first Distribution Date.
(42) With respect to any Mortgage Loan as to which an
affidavit has been delivered to the Trustee certifying that the
original Mortgage Note is a Lost Mortgage Note, if such Mortgage Loan
is subsequently in default, the enforcement of such Mortgage Loan or of
the related Mortgage by or on behalf of the Trustee will not be
materially adversely affected by the absence of the original Mortgage
Note. A "Lost Mortgage Note" is a Mortgage Note the original of which
was permanently lost or destroyed and has not been replaced.
(43) The Mortgage Loans, individually and in the aggregate,
conform in all material respects to the descriptions thereof in the
Prospectus Supplement.
(44) The Mortgage Rate is adjusted on each Adjustment Date to
equal the Index plus the Gross Margin, which amount is added in
accordance with the terms of the Mortgage Note, subject to the Periodic
Rate Cap and Maximum Mortgage Rate. The Mortgage Note is payable each
month in installments of principal and/or interest, which installments
of interest are subject to change due to the adjustments to the
Mortgage Rate on each Adjustment Date, with interest calculated and
payable in arrears, sufficient to amortize the Mortgage Loan fully by
the stated
III-6
<PAGE> 107
maturity date, over an original term of not more than thirty (30)
years. The Mortgage Note provides for accrual of interest on the basis
of a 360 day year consisting of twelve 30-day months. There is no
negative amortization. At no time has the Mortgage Rate exceeded the
Maximum Mortgage Rate as set forth in the related Note.
(45) No Mortgage Loan contains a provision permitting or
requiring conversion to a fixed interest rate Mortgage Loan.
(46) All parties which have had any interest in the Mortgage
Loan, whether as mortgagee, assignee, pledgee or otherwise, are (or,
during the period in which they held and disposed of such interest,
were) (1) in compliance with any and all applicable licensing
requirements of the laws of the state wherein the real Mortgaged
Property is located, and (2) organized under the laws of such state, or
(3) qualified to do business in such state, or (4) federal savings and
loan associations or national banks having principal offices in such
state, or (5) not doing business in such state.
(47) To the best of Seller's knowledge, the Mortgaged Property
is free from any and all toxic or hazardous substances and there exists
no violation of any local, state or federal environmental law, rule or
regulation.
(48) The Mortgagor has not notified the Seller, and the Seller
has no knowledge, of any relief requested or allowed to the Mortgagor
under the Soldiers' and Sailors' Civil Relief Act of 1940.
(49) Each Mortgage Loan is a "qualified mortgage" within the
meaning of Section 860G of the Code and Treas. Reg. 1.860G-2.
(50) No Mortgage Loan requires the Mortgagee to release any
portion of the Mortgaged Property from the lien of the Mortgage other
than (i) upon payment in full of the Mortgage Loan or (ii) with respect
to Mortgaged Property consisting of more than one piece of real
property or shares of a cooperative corporation, a release of a portion
of the Mortgaged Property upon a partial repayment of the Mortgage
Loan, provided the Loan-to-Collateral Value Ratio of the remaining
Mortgaged Property after the release does not exceed 90%.
(51) No Mortgage Loan is covered by a Primary Insurance
Policy.
III-7
<PAGE> 108
SCHEDULE IV
[RESERVED]
IV-1
<PAGE> 109
SCHEDULE V
Form of Monthly Master Servicer Report
[TO BE AGREED UPON BY THE TRUSTEE AND THE MASTER SERVICER]
V-1
<PAGE> 110
EXHIBIT A
[FORM OF SENIOR CERTIFICATE]
[UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO ISSUER 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. :
Cut-off Date :
First Distribution Date :
Initial Certificate Balance
of this Certificate
("Denomination") : $
Initial Certificate Balances
of all Certificates of
this Class : $
Pass-Through Rate :
CUSIP :
MELLON RESIDENTIAL FUNDING CORPORATION.
Mortgage Pass-Through Certificates, Series 199 -
Class [ ]
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 conventional mortgage loans (the
"Mortgage Loans") secured by first liens on one- to four-family
residential properties
MELLON RESIDENTIAL FUNDING CORPORATION, as Depositor
A-1
<PAGE> 111
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 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 _________________ 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, _________________, 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.
* * *
A-2
<PAGE> 112
IN WITNESS WHEREOF, the Trustee has caused this Certificate to
be duly executed.
Dated: ____________, 19__
BANKERS TRUST COMPANY OF CALIFORNIA,
N.A., as Trustee
By _________________________________
Countersigned:
By _______________________________
Authorized Signatory of
BANKERS TRUST COMPANY OF
CALIFORNIA N.A., as Trustee
A-3
<PAGE> 113
EXHIBIT B
[FORM OF SUBORDINATED CERTIFICATE]
[UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO ISSUER 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.
[THE FOLLOWING INFORMATION IS PROVIDED SOLELY FOR THE PURPOSE OF APPLYING THE
U.S. FEDERAL INCOME TAX ORIGINAL ISSUE DISCOUNT ("OID") RULES UNDER THE CODE TO
THIS CERTIFICATE. THE ISSUE DATE OF THIS CERTIFICATE IS ________, 199_. THE
INITIAL PER ANNUM RATE OF INTEREST ON THIS CERTIFICATE IS ___%. ASSUMING THAT
THE MORTGAGE LOANS PREPAY AT AN ASSUMED RATE OF PREPAYMENT OF ___% PER ANNUM
(THE "PREPAYMENT ASSUMPTION"), THIS CERTIFICATE HAS BEEN ISSUED WITH $_________
OF OID PER $1,000 OF THE ORIGINAL PRINCIPAL AMOUNT OF THIS CERTIFICATE; THE
ANNUAL YIELD TO MATURITY OF THIS CERTIFICATE FOR PURPOSES OF COMPUTING THE
ACCRUAL OF OID IS APPROXIMATELY % (COMPOUNDED MONTHLY); THE AMOUNT OF OID
ALLOCABLE TO THE SHORT FIRST ACCRUAL PERIOD IS $_____________ PER $1,000 OF THE
ORIGINAL PRINCIPAL AMOUNT OF THIS CERTIFICATE COMPUTED USING THE MONTHLY YIELD
AND DAILY COMPOUNDING DURING THE SHORT ACCRUAL PERIOD. NO REPRESENTATION IS MADE
THAT THE MORTGAGE LOANS WILL PREPAY AT A RATE BASED ON THE PREPAYMENT ASSUMPTION
OR AT ANY OTHER RATE. THE ACTUAL YIELD TO MATURITY MAY DIFFER FROM THAT SET
FORTH ABOVE, AND THE ACCRUAL OF OID WILL BE ADJUSTED, IN ACCORDANCE WITH SECTION
1272(a)(6) OF THE CODE, TO TAKE INTO ACCOUNT EVENTS WHICH HAVE OCCURRED DURING
ANY ACCRUAL PERIOD. THE PREPAYMENT ASSUMPTION IS INTENDED TO BE THE PREPAYMENT
ASSUMPTION REFERRED TO IN SECTION 1272(a)(6)(B)(iii) OF THE CODE.]
[THIS CERTIFICATE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE "ACT"). ANY RESALE OR TRANSFER OF THIS CERTIFICATE WITHOUT
REGISTRATION THEREOF UNDER THE ACT MAY ONLY BE MADE IN A TRANSACTION EXEMPTED
FROM THE REGISTRATION REQUIREMENTS OF THE ACT AND IN ACCORDANCE WITH THE
PROVISIONS OF THE AGREEMENT REFERRED TO HEREIN.]
B-1
<PAGE> 114
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 OR ARRANGEMENT SUBJECT TO THE EMPLOYEE RETIREMENT INCOME SECURITY
ACT OF 1974, AS AMENDED, OR A PLAN OR ARRANGEMENT 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.
B-2
<PAGE> 115
Certificate No. :
Cut-off Date :
First Distribution Date :
Initial Certificate Balance
of this Certificate
("Denomination") : $
Initial Certificate Balances
of all Certificates of
this Class : $
Pass-Through Rate :
[CUSIP :]
MELLON RESIDENTIAL FUNDING CORPORATION.
Mortgage Pass-Through Certificates, Series 199 -
Class [ ]
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 conventional loans (the "Mortgage
Loans") secured by first 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 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 ________________ 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, ____________________, 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.
B-3
<PAGE> 116
[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 and any applicable state securities laws or is exempt
from the registration requirements under said 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 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 the event that such a transfer is
to be made within three years from the date of the initial issuance of
Certificates pursuant hereto, there shall also be delivered (except in the case
of a transfer pursuant to Rule 144A of the Securities Act) to the Trustee an
Opinion of Counsel that such transfer may be made pursuant to an exemption from
the Securities Act and such state securities laws, which Opinion of Counsel
shall not be obtained at the expense of the Trustee, the Seller, the Master
Servicer 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 or arrangement subject to Section 406 of ERISA or Section
4975 of the Code, nor a person acting on behalf of any such plan or arrangement,
which representation letter shall not be an expense of the Trustee or the Master
Servicer, (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 and the Master Servicer 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 or the Master
Servicer. [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.
* * *
B-4
<PAGE> 117
IN WITNESS WHEREOF, the Trustee has caused this Certificate
to be duly executed.
Dated: ____________, 19__
BANKERS TRUST COMPANY OF CALIFORNIA,
N.A.
as Trustee
By _________________________________
Countersigned:
By _______________________________
Authorized Signatory of
BANKERS TRUST COMPANY OF
CALIFORNIA, N.A.,
as Trustee
B-5
<PAGE> 118
EXHIBIT C
[FORM OF RESIDUAL CERTIFICATE]
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" 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.]
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 OR ARRANGEMENT SUBJECT TO
THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED, OR A PLAN OR
ARRANGEMENT 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.
Certificate No. :
Cut-off Date :
Initial Certificate Balance
of this Certificate
("Denomination") : $
Initial Certificate Balances
of all Certificates of
this Class : $
Pass-Through Rate :
CUSIP :
C-1
<PAGE> 119
MELLON RESIDENTIAL FUNDING CORPORATION.
Mortgage Pass-Through Certificates, Series 199 -
evidencing the distributions allocable to the Class A-R Certificates
with respect to a Trust Fund consisting primarily of a pool of
conventional loans (the "Mortgage Loans") secured by first 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 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 __________________ is the registered owner
of the Percentage Interest (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 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, _________________ 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.
Any distribution of the proceeds of any remaining assets of
the Trust Fund will be made only upon presentment and surrender of this Class
A-R Certificate at the Corporate Trust Office or the office or agency maintained
by the Trustee in New York, New York.
No transfer of a Class A-R Certificate 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 the Master Servicer, or (ii) in
the case of any such Class A-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 and the Master Servicer to the effect that
the purchase or holding of such Class A-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 or the Master Servicer to any obligation in addition to those undertaken
in this Agreement, which Opinion of Counsel shall not be an expense of the
Trustee or the Master Servicer. Notwithstanding anything else to the contrary
herein, any purported transfer of a Class A-R
C-2
<PAGE> 120
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 A-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 A-R Certificate must be a Permitted Transferee,
(ii) no Ownership Interest in this Class A-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 A-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 A-R Certificate must agree not to
transfer an Ownership Interest in this Class A-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 A-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.
* * *
C-3
<PAGE> 121
IN WITNESS WHEREOF, the Trustee has caused this Certificate to
be duly executed.
Dated: ____________, 19__
BANKERS TRUST COMPANY OF CALIFORNIA,
N.A.,
By _________________________________
Countersigned:
By _______________________________
Authorized Signatory of
BANKERS TRUST COMPANY OF
CALIFORNIA, N.A.,
as Trustee
C-4
<PAGE> 122
EXHIBIT D
[FORM OF NOTIONAL AMOUNT CERTIFICATE]
[SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A "REGULAR
INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT," AS THOSE TERMS ARE
DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL REVENUE CODE OF
1986, AS AMENDED (THE "CODE").]
THIS CERTIFICATE HAS NO PRINCIPAL BALANCE AND IS NOT ENTITLED TO ANY
DISTRIBUTIONS IN RESPECT OF PRINCIPAL.
[THE FOLLOWING INFORMATION IS PROVIDED SOLELY FOR THE PURPOSE OF APPLYING THE
U.S. FEDERAL INCOME TAX ORIGINAL ISSUE DISCOUNT ("OID") RULES UNDER THE CODE TO
THIS CERTIFICATE. THE ISSUE DATE OF THIS CERTIFICATE IS , 199 . THE
INITIAL PER ANNUM RATE OF INTEREST ON THIS CERTIFICATE IS %. ASSUMING THAT
THE MORTGAGE LOANS PREPAY AT AN ASSUMED RATE OF PREPAYMENT OF % PER ANNUM
(THE "PREPAYMENT ASSUMPTION"), THIS CERTIFICATE HAS BEEN ISSUED WITH $ OF
OID ON THE INITIAL POOL STATED PRINCIPAL BALANCE; THE ANNUAL YIELD TO MATURITY
OF THIS CERTIFICATE FOR PURPOSES OF COMPUTING THE ACCRUAL OF OID IS
APPROXIMATELY % (COMPOUNDED MONTHLY); THE AMOUNT OF OID ALLOCABLE TO THE
SHORT FIRST ACCRUAL PERIOD IS $ ON THE INITIAL POOL STATED PRINCIPAL
BALANCE; AND THE METHOD USED TO CALCULATE THE ANNUAL YIELD TO MATURITY AND THE
AMOUNT OF OID ALLOCABLE TO THE SHORT FIRST ACCRUAL PERIOD IS THE EXACT METHOD AS
DEFINED IN PROPOSED TREASURY REGULATIONS. NO REPRESENTATION IS MADE THAT THE
MORTGAGE LOANS WILL PREPAY AT A RATE BASED ON THE PREPAYMENT ASSUMPTION OR AT
ANY OTHER RATE. THE ACTUAL YIELD TO MATURITY MAY DIFFER FROM THAT SET FORTH
ABOVE, AND THE ACCRUAL OF OID WILL BE ADJUSTED, IN ACCORDANCE WITH SECTION
1272(a)(6) OF THE CODE, TO TAKE INTO ACCOUNT EVENTS WHICH HAVE OCCURRED DURING
ANY ACCRUAL PERIOD. THE PREPAYMENT ASSUMPTION IS INTENDED TO BE THE PREPAYMENT
ASSUMPTION REFERRED TO IN SECTION 1272(a)(6)(B)(iii) OF THE CODE.]
Certificate No. :
Cut-off Date :
First Distribution Date :
Initial Notional Amount
of this Certificate
("Denomination") :
Initial Notional Amount
of all Certificates
of this Class :
D-1
<PAGE> 123
Pass-Through Rate :
CUSIP :
MELLON RESIDENTIAL FUNDING CORPORATION
Mortgage Pass-Through Certificates, Series 199 -
Class [ ]
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 conventional loans (the "Mortgage
Loans") secured by first 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 ____________________ is the registered
owner of the Percentage Interest evidenced by this Certificate specified above
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 Cut-off Date specified above (the
"Agreement") among the Depositor, _______________ 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.
* * *
D-2
<PAGE> 124
IN WITNESS WHEREOF, the Trustee has caused this Certificate to
be duly executed.
Dated: ____________, 19__
BANKERS TRUST COMPANY OF CALIFORNIA,
N.A.
as Trustee
By _________________________________
Countersigned:
By ______________________________
Authorized Signatory of
BANKERS TRUST COMPANY OF
CALIFORNIA, N.A.
as Trustee
D-3
<PAGE> 125
EXHIBIT E
[Form of Reverse of Certificates]
MELLON RESIDENTIAL FUNDING CORPORATION.
Mortgage Pass-Through Certificates
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 25th day of each month or, if such 25th 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. The Record Date applicable to each
Distribution Date is the last Business Day of the month next preceding the month
of such Distribution Date.
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.
E-1
<PAGE> 126
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
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 Stated Principal
Balance is less than or equal to [5%] 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, 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.
As described in the Agreement, from the Distribution Date in
September 2002 to the Distribution Date in October 2002, Certificateholders will
have an option to sell their Certificates to Mellon Bank, N.A. and if
Certificateholders holding more than 90% of the outstanding aggregate Class
Certificate Balance of the Certificates exercise this option, Mellon Bank, N.A.
will have the right to purchase all of the remaining Certificates.
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.
E-2
<PAGE> 127
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.
E-3
<PAGE> 128
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]
E-4
<PAGE> 129
EXHIBIT F
[RESERVED]
F-1
<PAGE> 130
EXHIBIT G
FORM OF INITIAL CERTIFICATION OF TRUSTEE
[date]
[Depositor]
[Master Servicer]
[Seller]
_________________________
_________________________
Re: Pooling and Servicing Agreement among
Mellon Residential Funding Corporation,
as Depositor, ________________________,
as Seller and Master Servicer, and
Bankers Trust Company of California, N.A., as Trustee
Mortgage Pass-Through Certificates, Series 199 -_______
-------------------------------------------------------
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:
(i) the original Mortgage Note endorsed in the following form: "Pay to
the order of __________, without recourse"; and
(ii) except with respect to a Cooperative Loan, a duly executed
assignment of the Mortgage (which may be included in a blanket assignment or
assignments).
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.
G-1
<PAGE> 131
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: ___________________________________
<PAGE> 132
EXHIBIT H
FORM OF FINAL CERTIFICATION OF TRUSTEE
[date]
[Depositor]
[Master Servicer]
[Seller]
_________________________
_________________________
Re: Pooling and Servicing Agreement among
Mellon Residential Funding Corporation,
as Depositor , _______________., as Seller and
Master Servicer and Bankers Trust Company of
California, N.A., as Trustee, Mortgage Pass-Through
Certificates, Series 199_-________________________
--------------------------------------------------
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)(i) of the Pooling and Servicing Agreement, with all
intervening endorsements showing a complete chain of endorsement from the
originator to the Seller.
(ii) Except with respect to a Cooperative Loan, the original
recorded Mortgage.
(iii) Except with respect to a Cooperative Loan, a duly
executed assignment of the Mortgage in the form provided in Section 2.01(c)(iii)
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) Except with respect to a Cooperative Loan, the original
or duplicate original recorded assignment or assignments of the Mortgage showing
a complete chain of assignment from the originator to the Seller.
(v) The original or copies of each assumption, modification,
written assurance or substitution agreement, if applicable.
H-1
<PAGE> 133
(vi) Except with respect to a Cooperative Loan, the original
or duplicate original lender's title policy and all riders thereto or, any one
of an original title binder, an original preliminary title report or an original
title commitment, or a copy thereof certified by the title company.
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
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: ______________________________
H-2
<PAGE> 134
EXHIBIT I
TRANSFER AFFIDAVIT
Mellon Residential Funding Corporation
Mortgage Pass-Through Certificates
Series 199 -_
STATE OF )
) ss.:
COUNTY OF )
The undersigned, being first duly sworn, deposes and says as
follows:
a. The undersigned is an officer of _________, the proposed
Transferee of an Ownership Interest in a Class A-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"),
________________, 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.
b. 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.
c. 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.
d. 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.)
I-1
<PAGE> 135
e. 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, 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.
f. 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.
g. 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.
h. The Transferee's taxpayer identification number is _______.
i. The Transferee is a U.S. Person as defined in Code Section
7701(a)(30).
j. 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.
k. 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
<PAGE> 136
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
<PAGE> 137
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 A-R Certificate, (iv) rural electric and telephone
cooperatives described in Code Section 1381(a)(2)(c), (v) an "electing
partnership as defined in Code Section 775, (vi) 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, or a trust if a court within the United States is able
to exercise primary supervision over the administration of the trust and one or
more United States fiduciaries have the authority to control all substantial
decisions of the trust unless such Person has furnished the transferor and the
Trustee with a duly completed Internal Revenue Service Form 4224 or any
applicable successor form, and (vii) any other Person so designated by the
Trustee based upon an Opinion of Counsel that the Transfer of an Ownership
Interest in a Class A-R Certificate to such Person may cause either REMIC
hereunder 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.
1-I-1
<PAGE> 138
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 A-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 A-R
Certificate are expressly subject to the following provisions:
(i) Each Person holding or acquiring any Ownership Interest in
a Class A-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 A-R Certificate may be
registered on the Closing Date or thereafter transferred, and the
Trustee shall not register the Transfer of any Class A-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 A-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 A-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 A-R Certificate and (C) not to Transfer its Ownership Interest
in a Class A-R Certificate or to cause the Transfer of an Ownership
Interest in a Class A-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 A-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 A-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 A-R
Certificate. The Trustee shall be under no liability to any Person for
any registration of Transfer of a Class A-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 A-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 A-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.
2-I-1
<PAGE> 139
(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 A-R Certificate to any Holder who is not a Permitted Transferee.
2-I-2
<PAGE> 140
EXHIBIT J-1
FORM OF TRANSFEROR CERTIFICATE
(Private Certificate)
__________________
Date
Mellon Residential Funding Corporation
One Mellon Bank Center
500 Grant Street, Room 410
Pittsburgh, PA 15258
Attention:
Bankers Trust Company of California, N.A.
3 Park Plaza, 16th Floor
Irvine, CA 92614 Attention:
Re: Mellon Residential Funding Corporation
Mortgage Pass-Through Certificates,
Series 199 -_, 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 and (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.
Very truly yours,
__________________________
Print Name of Transferor
By:_______________________
Authorized Officer
J-1-1
<PAGE> 141
EXHIBIT J-2
FORM OF TRANSFEROR CERTIFICATE
(Class A-R)
__________________
Date
Mellon Residential Funding Corporation
One Mellon Bank Center
500 Grant Street, Room 410
Pittsburgh, PA 15258
Attention:
Bankers Trust Company of California, N.A.
3 Park Plaza, 16th Floor
Irvine, CA 92614
Attention:
Re: Mellon Residential Funding Corporation
Mortgage Pass-Through Certificates,
Series 199_, Class A-R Certificates
-----------------------------------
Ladies and Gentlemen:
In connection with our disposition of the above Certificates
we certify that we have no knowledge the Transferee is not a Permitted
Transferee.
Very truly yours,
__________________________
Print Name of Transferor
By:_______________________
Authorized Officer
J-2-1
<PAGE> 142
EXHIBIT K
FORM OF INVESTMENT LETTER (NON-RULE 144A)
___________________
Date
Mellon Residential Funding Corporation
One Mellon Bank Center
500 Grant Street, Room 410
Pittsburgh, PA 15258
Attention:
Bankers Trust Company of California, N.A.
3 Park Plaza, 16th Floor
Irvine, CA 92614
Attention:
Re: Mellon Residential Funding Corporation
Mortgage Pass-Through Certificates,
Series 199 -_, 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,
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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 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
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<PAGE> 144
EXHIBIT L
FORM OF RULE 144A LETTER
__________________
Date
Mellon Residential Funding Corporation
One Mellon Bank Center
500 Grant Street, Room 410
Pittsburgh, PA 15258
Attention:
Bankers Trust Company of California, N.A.
3 Park Plaza, 16th Floor
Irvine, CA 92614
Attention:
Re: Mellon Residential Funding Corporation
Mortgage Pass-Through Certificates,
Series 199 -_, 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
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<PAGE> 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
<PAGE> 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
1-L-1
<PAGE> 147
by the insurance commissioner or a similar official
or agency of a State, territory or the District of
Columbia.
___ State or Local Plan. The Buyer is a plan established
and maintained by a State, its political
subdivisions, or any agency or instrumentality of the
State or its political subdivisions, for the benefit
of its employees.
___ ERISA Plan. The Buyer is an employee benefit plan
within the meaning of Title I of the Employee
Retirement Income Security Act of 1974.
___ Investment 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
1-L-2
<PAGE> 148
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
By:________________________
Name:
Title:
Date: _____________________
1-L-3
<PAGE> 149
ANNEX 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.
2-L-1
<PAGE> 150
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 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:_________________________
2-L-2
<PAGE> 151
EXHIBIT M
REQUEST FOR RELEASE
(for Trustee)
MELLON RESIDENTIAL FUNDING CORPORATION.
Mortgage Pass-Through Certificates
Series 199 -_
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, ________________., 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 ____________.
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<PAGE> 152
( ) Mortgage Loan File with respect to Mortgage Note dated _______
in the original principal sum of $_____ made by__________.
( ) Other documents, including any amendments, assignments or
other assumptions of the Mortgage Note or Mortgage.
( ) _____________________________________________________
( ) _____________________________________________________
( ) _____________________________________________________
( ) _____________________________________________________
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__
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<PAGE> 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 ________ among
_____________, 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. Repurchased Mortgage Loan (Seller hereby certifies that the
Purchase Price has been deposited in the Certificate Account.)
5. Deleted Mortgage Loan (the Seller hereby certifies that the
related Substitute Mortgage Loan meets the criteria of a
Substitute Mortgage Loan and any Substitution Adjustment
Amount has been deposited in the Certificate Account.)
6. Other (explain):
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<PAGE> 154
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: _________________________________
