EXECUTION COPY
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MERRILL LYNCH MORTGAGE INVESTORS, INC.
Depositor
and
WELLS FARGO BANK MINNESOTA, NATIONAL ASSOCIATION
Trustee
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POOLING AGREEMENT
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Dated as of November 2, 2000
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$3,446,674,000
MLMI Resecuritization Pass-Through Certificates
Series 2000-WM2
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TABLE OF CONTENTS
Article I DEFINITIONS
Article II
CONVEYANCE OF TRUST FUND; ORIGINAL ISSUANCE OF CERTIFICATES
Section 2.1 Conveyance of Trust Fund.........................................17
Section 2.2 Acceptance by Trustee............................................18
Section 2.3 Representations and Warranties of the Depositor..................18
Section 2.4 Actions in the Event of Breaches of Representations
and Warranties under the Purchase and Sale Agreement...........19
Section 2.5 Authentication and Delivery of Certificates; Designation
of Certificates as REMIC Regular and Residual Interests........20
Section 2.6 Designation of Startup Day.......................................20
Section 2.7 No Contributions.................................................20
Article III
ADMINISTRATION OF THE POOLED SECURITIES
Section 3.1 Administration of the Trust and the Pooled Securities............20
Section 3.2 Collection of Monies.............................................21
Section 3.3 Establishment of the Certificate Account; Deposits Therein.......21
Section 3.4 Permitted Withdrawals from the Certificate Account...............22
Section 3.5 Distributions....................................................22
Section 3.6 Trustee Compensation.............................................24
Section 3.7 Distribution Reports to the Trustee..............................24
Section 3.8 Statements to Certificateholders and Rating Agencies.............24
Section 3.9 Access to Certain Documentation and Information..................28
Section 3.10 Calculation of Amount to be Distributed.........................28
Section 3.11 REMIC-Related Covenants.........................................28
Section 3.12 [Reserved]......................................................28
Section 3.13 Prohibited Transactions Taxes and Other Taxes...................28
Section 3.14 Tax Administration..............................................29
Section 3.15 Appointment of Paying Agent and Certificate
Administrator..................................................30
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Article IV
THE CERTIFICATES
Section 4.1 The Certificates.................................................30
Section 4.2 Certificates Issuable in Classes, Distributions of
Principal and Interest, Authorized Denominations...............35
Section 4.3 Registration of Transfer and Exchange of Certificates............35
Section 4.4 Mutilated, Destroyed, Lost or Stolen Certificates................36
Section 4.5 Persons Deemed Owners............................................36
Section 4.6 Temporary Certificates...........................................37
Section 4.7 Book-Entry for Book-Entry Certificates...........................37
Section 4.8 Notices to Clearing Agency.......................................38
Section 4.9 Definitive Certificates..........................................38
Section 4.10 Office for Transfer of Certificates.............................39
Article V
THE DEPOSITOR
Section 5.1 Liability of the Depositor.......................................39
Section 5.2 Merger or Consolidation of the Depositor.........................39
Section 5.3 Limitation on Liability of the Depositor and Others..............39
Article VI
CONCERNING THE TRUSTEE
Section 6.1 Duties of Trustee................................................40
Section 6.2 Certain Matters Affecting Trustee................................42
Section 6.3 Trustee Not Required to Make Investigation.......................42
Section 6.4 Trustee Not Liable for Certificates or Pooled Securities.........43
Section 6.5 Trustee May Own Certificates.....................................43
Section 6.6 Indemnification of Trustee.......................................43
Section 6.7 Eligibility Requirements for Trustee.............................44
Section 6.8 Resignation and Removal of Trustee...............................44
Section 6.9 Successor Trustee................................................44
Section 6.10 Merger or Consolidation of Trustee..............................45
Section 6.11 Appointment of Co-Trustee or Separate Trustee...................45
Section 6.12 Appointment of Custodians.......................................46
Section 6.13 Authenticating Agent............................................46
Section 6.14 Third Party Data Providers......................................47
Section 6.15 Reports to Securities and Exchange Commission...................47
Article VII
TERMINATION
Section 7.1 Termination upon Liquidation of All Pooled Securities............48
Section 7.2 Trusts Irrevocable...............................................49
Section 7.3 Additional Termination Requirements..............................49
Section 7.4 Mandatory Liquidation Event......................................49
Section 7.5 Early Liquidation Event..........................................50
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Article VIII
MISCELLANEOUS PROVISIONS
Section 8.1 Amendment.........................................................51
Section 8.2 Limitation on Rights of Certificateholders........................52
Section 8.3 Governing Law; Jurisdiction.......................................53
Section 8.4 Notices...........................................................53
Section 8.5 Severability of Provisions........................................53
EXHIBITS
Exhibit A - Form of Regular Interest Certificates
Exhibit B - Form of Residual Certificate
Exhibit C - Schedule of Planned Balances of the Class A-2 Certificates
Exhibit D - Schedule of Pooled Securities
Exhibit E - Form of Transferor Certificate
Exhibit F - Form of Transferee Affidavit and Agreement
Exhibit G - Form of Class B Transferee Certificate
Exhibit H - Form of Purchase and Sale Agreement
Exhibit I - Form of Elective Purchase Agreement
Exhibit J - Form of Conditional Asset Purchase Agreement
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This Pooling Agreement, dated and effective as of November 2, 2000
(this "Agreement"), is executed by and between Merrill Lynch Mortgage Investors,
Inc., as depositor (the "Depositor"), and Wells Fargo Bank Minnesota, National
Association ("Wells Fargo"), as trustee (the "Trustee"). Capitalized terms used
in this Agreement and not otherwise defined have the meanings ascribed to such
terms in Article I hereof.
PRELIMINARY STATEMENT
The Depositor at the Closing Date is a party to the Purchase and
Sale Agreement, the Elective Purchase Agreement and the Conditional Asset
Purchase Agreement (collectively, the "Assigned Agreements") and the other
property being conveyed by it to the Trustee for inclusion in the Trust Fund. On
the Closing Date, (A) the Depositor will assign the Assigned Agreements to the
Trustee in trust for the benefit of Certificateholders; (B) the Trustee will
execute and authenticate the Certificates; (C) the Trustee will, at the
direction of the Depositor, deliver the Class A-1 and Class A-2 Certificates to
the Underwriter in exchange for a cash purchase price therefor; (D) the Trustee
will deliver such proceeds and the Class B and Class R Certificates to the
Seller pursuant to the Purchase and Sale Agreement in exchange for the Pooled
Securities; and (E) the Trustee will hold such Pooled Securities in trust for
the benefit of Certificateholders and apply payments received thereon and the
proceeds of disposition thereof in accordance with the terms of this Agreement.
The Depositor has duly authorized the execution and delivery of this Agreement
to provide for the conveyance to the Trustee of the Pooled Securities and the
issuance of the Certificates representing in the aggregate the entire beneficial
ownership of the Trust Fund. All covenants and agreements made by the Depositor
and the Trustee herein with respect to the Pooled Securities are for the benefit
of the Holders from time to time of the Certificates. The Depositor is entering
into this Agreement, and the Trustee is accepting the trust created hereby, for
good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged.
The Certificates (other than the Class B and Class R Certificates)
issued hereunder have been offered for sale pursuant to a Prospectus Supplement,
dated October 31, 2000 (the "Prospectus Supplement"), to a Prospectus, dated
January 27, 2000 (together with the Prospectus Supplement, the "Prospectus") of
the Depositor. The Trust Fund created hereunder is intended to be the "Trust" as
described in the Prospectus and the Certificates are intended to be the
"Certificates" described therein.
As provided herein, the Trustee will elect to treat the Trust Fund
consisting of the Pooled Securities and other related assets subject to this
Agreement as a REMIC for federal income tax purposes. The Class A-1, Class A-2
and Class B Certificates will represent the "regular interests" and the Class R
Certificate will represent the sole class of "residual interests" in the REMIC
for purposes of the REMIC Provisions under federal income tax law.
The following table irrevocably sets forth the designations, the
Remittance Rate, initial Class Principal Balance and Final Scheduled
Distribution Date for each Class of Certificates which together constitute the
entire beneficial ownership interest in the REMIC. Determined solely for
purposes of satisfying Treasury regulation section 1.860G-1(a)(4)(iii).
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<TABLE>
<CAPTION>
Initial Class Principal Final Scheduled
Designation Balance Remittance Rate Distribution Date
----------- ----------------------- --------------- -----------------
<S> <C> <C> <C>
Class A-1 $2,271,534,000 (1) November 27, 2001
Class A-2 $757,178,000 6.68% November 27, 2001
Class B $417,962,000 6.5%(2) November 27, 2001
Class R N/A N/A November 27, 2001
</TABLE>
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1 The Remittance Rate for the Class A-1 Certificates is equal to LIBOR
plus 0.03%.
2 Interest on the Class B Certificates will accrue at the Remittance Rate
therefor and will be added, on each Distribution Date, to the Class Principal
Balance thereof.
W I T N E S S E T H
In consideration of the mutual agreements herein contained, the
Depositor and the Trustee agree as follows:
ARTICLE I
DEFINITIONS
Whenever used herein, the following words and phrases, unless the
context otherwise requires, shall have the meanings specified in this Article:
Acquired Mortgage Asset: Any Underlying Mortgage Loan or related
Mortgaged Property acquired and to be serviced and administered on behalf and
for the benefit of the Trustee, as Pooled Securityholder, and the other holders
of the related Underlying Series, all in accordance with the related Underlying
Agreements.
Affiliate: With respect to any specified Person, any other Person
controlling or controlled or under common control with such specified Person.
For the purposes of this definition, when used with respect to any specified
Person means the power to direct the management and policies of such Person,
directly or indirectly, whether through the ownership of voting securities, by
contract or otherwise, and the terms "controlling" and "controlled" have
meanings correlative to the foregoing. The Trustee may obtain and rely on an
Officer's Certificate of the Depositor to determine whether any Person is an
Affiliate of such party.
Aggregate Certificate Principal Balance: At any given time, the
sum of the then current Class Principal Balances of all Classes of the
Certificates.
Agreement: This Pooling Agreement and all amendments and
supplements hereto.
Assigned Agreements: The Purchase and Sale Agreement, the Elective
Purchase Agreement and the Conditional Asset Purchase Agreement, collectively.
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Authenticating Agent: Any authenticating agent appointed by the
Trustee pursuant to Section 6.13.
Authorized Denomination: With respect to the Certificates (other
than the Class R Certificate), an initial Certificate Principal Balance equal to
$25,000 each and integral multiples of $1,000 in excess thereof (except that one
Certificate of each Class may be issued in a denomination that is not an
integral multiple thereof). With respect to the Class R Certificate, one
Certificate with a Percentage Interest equal to 100%.
Available Funds: With respect to any Distribution Date, the
aggregate amount on deposit in the Certificate Account (after permitted
withdrawals therefrom pursuant to Section 3.4 hereof, which permitted
withdrawals include withdrawals in respect of any investment income earned on
amounts on deposit in such account, Trustee Fees, and any expense reimbursements
and indemnity payments payable from the Trust Fund in accordance with the terms
of this Agreement) for which both the Pooled Security distribution and the
related Pooled Security Distribution Date Information have been received by the
Trustee as of the immediately preceding Pooled Security Distribution Date.
Beneficial Holder: A Person holding a beneficial interest in any
Book-Entry Certificate as or through a DTC Participant or an Indirect DTC
Participant or a Person holding a beneficial interest in any Definitive
Certificate.
Book-Entry Certificates: The Certificates (other than the Class B
Certificates and the Class R Certificate) beneficial ownership and transfers of
which shall be made through book entries as described in Section 4.7.
Business Day: Any day other than a Saturday, a Sunday, or a day on
which banking institutions are authorized or obligated by law or execution order
to be closed in Minneapolis, Minnesota, Columbia, Maryland and, if the
applicable Business Day relates to the determination of LIBOR, on which dealings
are carried on in the London interbank market.
Certificate: Any one of the Certificates issued pursuant to this
Agreement, executed by the Trustee and authenticated by or on behalf of the
Trustee hereunder in substantially one of the forms set forth in Exhibits A and
B hereto.
Certificate Account: As defined in Section 3.3(a).
Certificate Administrator: As defined in Section 3.15.
Certificate Distribution Amount: For any Distribution Date,
provided that no Mandatory Liquidation Event or Early Liquidation Event has
occurred, the Available Funds shall be distributed to the related Certificates
(other than the Class R Certificate) in the following order of priority:
first, the Interest Accrual Amount on the Class A-1 and Class A-2
Certificates, pro rata, on such Distribution Date, plus any unpaid
Interest Accrual Amount on the Class A-1 and Class A-2
Certificates for any prior Distribution Date, without any
additional interest on such unpaid amounts;
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second, principal of the Class A-2 Certificates until the
principal of the Class A-2 Certificates has been reduced to the
Class A-2 Planned Balance for such Distribution Date, as set forth
on Exhibit C hereto but, in any event, not in excess of the
Principal Distribution Amount for such Distribution Date;
third, principal of the Class A-1 Certificates, up to the
Principal Distribution Amount remaining after the distribution
made in the preceding clause "second", until the Class Principal
Balance of such Class has been reduced to zero;
fourth, principal of the Class A-2 Certificates, up to the
Principal Distribution Amount remaining after the distributions
made in the preceding clauses "second" and "third", until the
Class Principal Balance of such Class A-2 Certificates has been
reduced to zero; and
fifth, principal of the Class B Certificates, up to the Principal
Distribution Amount remaining after the distributions made in the
preceding clauses "second", "third" and "fourth" until the Class
Principal Balance of such Class has been reduced to zero.
Certificate Principal Balance: For each Certificate of any Class,
the portion of the related Class Principal Balance, if any, represented by such
Certificate.
Certificate Register and Certificate Registrar: The register
maintained and the registrar appointed, respectively, pursuant to Section 4.3.
Initially, the Certificate Registrar shall be Wells Fargo.
Certficateholder or Holder: The person in whose name a Certificate
is registered in the Certificate Register, except that, solely for the purposes
of giving any consent pursuant to this Agreement at any time that any Class A-1
Certificate or Class A-2 Certificate remains outstanding, any Certificate
registered in the name of the Depositor, the Seller, the Certificate
Administrator or any Affiliate thereof shall be deemed not to be outstanding and
the Percentage Interest evidenced thereby shall not be taken into account in
determining whether the requisite percent Percentage Interests necessary to
effect any such consent has been obtained; provided, however, that the Trustee,
the Certificate Registrar and the Paying Agent may conclusively rely upon an
Officer's Certificate to determine whether any Person is an Affiliate of the
Depositor, the Seller or the Certificate Administrator.
Certificateholders' Report: As defined in Section 3.8(a).
Class: All Certificates having the same priority and rights to
payment, designated as a separate Class, as set forth in the forms of
Certificates attached hereto as Exhibits A and B.
Class A-1 Certificates: The Certificate designated as "Class A-1"
on the face thereof in substantially the form attached hereto as Exhibit A-1.
Class A-2 Certificates: The Certificate designated as "Class A-2"
on the face thereof in substantially the form attached hereto as Exhibit A-2.
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Class A-2 Planned Balance: With respect to any Distribution Date,
the amount set forth opposite such date in Exhibit C attached hereto.
Class B Certificates: The Certificate designated as "Class B" on
the face thereof in substantially the form attached hereto as Exhibit A-3.
Class Principal Balance: For any Class of Certificates (other than
the Class R Certificate) the applicable initial Class Principal Balance set
forth in the Preliminary Statement hereto, corresponding to the rights of such
Class in payments of principal due to be passed through to Certificateholders
from principal payments on the Pooled Securities, as reduced from time to time
by distributions of principal to Certificateholders of such Class, and as
increased on each Distribution Date (in the case of the Class B Certificates) by
interest accruing thereon at the Class B Remittance Rate. The Class Principal
Balance for the Class A-1 Certificates shall be referred to as the "Class A-1
Principal Balance", the Class Principal Balance for the Class A-2 Certificates
shall be referred to as the "Class A-2 Principal Balance" and so on.
Class R Certificate: The Certificate designated as "Class R" on
the face thereof in substantially the form attached hereto as Exhibit D, which
has been designated as the sole class of "residual interests" in the REMIC
pursuant to Section 2.1.
Class R Certificateholder: The registered Holder of the Class R
Certificate.
Clearing Agency: An organization registered as a "clearing agency"
pursuant to Section 17A of the Securities and Exchange Act of 1934, as amended,
which initially shall be DTC.
Closing Date: November 2, 2000, which is the date of settlement of
the sale of the Certificates to the initial purchasers thereof.
Code: The Internal Revenue Code of 1986, as amended.
Conditional Asset Purchase Agreement: The conditional asset
purchase agreement dated as of November 2, 2000 between the Seller and the
Depositor, relating to the agreement of the Seller to purchase, and the
agreement of the Depositor (or the Trustee as assignee thereunder) to sell the
Pooled Securities on November 20, 2001 if the Pooled Securities are not
otherwise sold by the Depositor (or the Trustee as assignee thereunder),
substantially in the form of Exhibit J hereto.
Corporate Trust Office: The corporate trust office of the Trustee
is located for the purpose relating to the transfer of Certificates at Wells
Fargo Center, Sixth and Margurette, Minneapolis, Minnesota 55479-0113, Attn:
Corporate Trust Services - Merrill Lynch 2000 - WM2 and for all other purposes
at 11000 Broker Land Parkway, Columbia, Maryland 21044-3562, Attn: Corporate
Trust Services - Merrill Lynch 2000-WM2.
Custodial Agreement: The agreement, if any, among the Trustee and
a Custodian providing for the safekeeping of the Pooled Securities on behalf of
the Certificateholders.
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Custodian: A custodian which is appointed pursuant to a Custodial
Agreement. Any Custodian so appointed shall act as agent on behalf of the
Trustee, and shall be compensated by the Trustee. The Trustee shall remain at
all times responsible under the terms of this Agreement, notwithstanding the
fact that certain duties have been assigned to a Custodian.
Cut-Off Date: October 25, 2000.
Data: As defined in Section 6.14.
Defective Pooled Security: Any Pooled Security subject to
repurchase by the Seller pursuant to Section 4(b) of the Purchase and Sale
Agreement.
Definitive Certificates: As defined in Section 4.7.
Denomination: The amount specified on a Certificate as
representing the aggregate Class Principal Balance evidenced by such
Certificate.
Depository Agreement: The Letter of Representations, dated October
31, 2000 by and among DTC, the Depositor and the Trustee.
Depositor: Merrill Lynch Mortgage Investors, Inc., a Delaware
corporation, or its successor in interest.
Depository: DTC or any successor thereto.
Disqualified Organization: As defined in Section 4.1(b).
Distribution Date: With respect to distributions on the
Certificates, the second Business Day after the Major Underlying Distribution
Date in each month, with the first such date being November 29, 2000.
DTC: The Depository Trust Company.
DTC Participant: A broker, dealer, bank, other financial
institution or other Person for which DTC effects book-entry transfers and
pledges of securities deposited with DTC.
Early Liquidation Event: The occurrence of any one of the
following events:
(a) the Market Value of the Pooled Securities shall at any time be
less than the greater of (i) 116% of the sum of the Class A-1 Class Principal
Balance and the Class A-2 Class Principal Balance and (ii) the sum of the Class
A-1 Class Principal Balance, Class A-2 Class Principal Balance and 108.7% of the
Class B Class Principal Balance;
(b) LIBOR (as determined as provided herein) for any Interest
Accrual Period shall exceed 8.91% per annum; or
(c) the Trust Fund or the trust created under this Agreement shall
be required to register under the Investment Company Act of 1940, as amended.
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Elective Purchase Agreement: The elective purchase agreement dated
as of November 2, 2000 between Seller and the Depositor, relating to the right
of Seller to purchase the Pooled Securities on November 20, 2001, substantially
in the form of Exhibit I hereto.
Eligible Account: Any account or accounts held and established by
the Trustee in trust for the Certificateholders at any Eligible Institution.
Eligible Institution: An institution having (i) the highest
short-term debt rating, and one of the two highest long-term debt ratings of
each Rating Agency, or (ii) the approval of each Rating Agency.
Eligible Investments: Any one or more of the following obligations
or securities payable on demand or having a scheduled maturity on or before the
Business Day preceding the following Distribution Date, except with respect to
Eligible Investments made pursuant to paragraph (i) below which shall mature on
the Distribution Date regardless of whether issued by the Depositor, the Trustee
or any of their respective Affiliates and having at the time of purchase, or at
such other time as may be specified, the required ratings, if any, provided for
in this definition:
(a) direct obligations of, or guaranteed as to full and timely
payment of principal and interest by, the United States or any agency or
instrumentality thereof; provided, however, that such obligations are backed by
the full faith and credit of the United States of America;
(b) direct obligations of, or guaranteed as to timely payment of
principal and interest by, FHLMC, FNMA or the Federal Farm Credit System;
provided, however, that any such obligation, at the time of purchase or
contractual commitment providing for the purchase thereof, is qualified by each
Rating Agency as an investment of funds backing securities rated "AAA";
(c) demand and time deposits in or certificates of deposit of, or
bankers' acceptances issued by, any bank or trust company, savings and loan
association or savings bank; provided, however, that the short-term deposit
ratings and/or long-term unsecured debt obligations of such depository
institution or trust company (or in the case of the principal depository
institutions in a holding company system, the commercial paper or long-term
unsecured debt obligations of such holding company) have, in the case of
commercial paper, the highest rating available for such securities by each
Rating Agency and, in the case of long-term unsecured debt obligations, one of
the two highest ratings available for such securities by each Rating Agency;
(d) general obligations of or obligations guaranteed by any state
of the United States or the District of Columbia receiving one of the two
highest long-term debt ratings available for such securities by each Rating
Agency;
(e) commercial or finance company paper (including both
non-interest-bearing discount obligations and interest-bearing obligations
payable on demand or on a specified date not more than one year after the date
of issuance thereof) that is rated by each Rating Agency in its highest
short-term unsecured rating category at the time of such investment
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or contractual commitment providing for such investment, and is issued by a
corporation the outstanding senior long-term debt obligations of which are then
rated by each Rating Agency in one of its two highest long-term unsecured rating
categories;
(f) guaranteed reinvestment agreements issued by any bank,
insurance company or other corporation rated in one of the two highest rating
levels available to such issuers by each Rating Agency at the time of such
investment; provided, however, that any such agreement must by its term provide
that it is terminable by the purchaser without penalty in the event any such
rating is at any time lower than such level;
(g) repurchase obligations with respect to any security described
in clause (a) or (b) above entered into with a depository institution or trust
company (acting as principal) meeting the rating standards described in (c)
above;
(h) securities bearing interest or sold at a discount that are
issued by any corporation incorporated under the laws of the United States of
America or any state thereof and rated by each Rating Agency in one of its two
highest long-term unsecured rating categories at the time of such investment or
contractual commitment providing for such investment; provided, however, that
securities issued by any such corporation will not be Eligible Investments to
the extent that investment therein would cause the outstanding principal amount
of securities issued by such corporation that are then held as part of the
Certificate Account to exceed 20% of the aggregate principal amount of all
Eligible Investments then held in the Certificate Account;
(i) units of taxable money market funds (including those for which
the Trustee or any Affiliate thereof receives compensation with respect to such
investment) which funds have been rated by each Rating Agency in its highest
rating category or which have been designated in writing by each Rating Agency
as Eligible Investments with respect to this definition;
(j) if previously confirmed in writing to the Trustee, any other
demand, money market or time deposit, or any other obligation, security or
investment, as may be acceptable to each Rating Agency as a permitted investment
of funds backing securities rated "AAA"; and
(k) such other obligations as are acceptable as Eligible
Investments to each Rating Agency;
provided, however, that such instrument continues to qualify as a "cash flow
investment" pursuant to Code Section 860G(a)(6) and that no instrument or
security shall be an Eligible Investment if (i) such instrument or security
evidences a right to receive only interest payments or (ii) the right to receive
principal and interest payments derived from the underlying investment provides
a yield to maturity in excess of 120% of the yield to maturity at par of such
underlying investment.
ERISA: The Employee Retirement Income Security Act of 1974, as
amended.
Exchange Act: The Securities Exchange Act of 1934, as amended.
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FHLMC: Federal Home Loan Mortgage Corporation, or any successor
thereto.
Final Scheduled Distribution Date: November 27, 2001.
FNMA: Federal National Mortgage Association, or any successor
thereto.
Independent: When used with respect to any specified Person, any
such Person who (i) is in fact independent of the Depositor, (ii) does not have
any direct financial interest or any material indirect financial interest in the
Depositor or any Affiliate thereof and (iii) is not connected with the Depositor
as an officer, employee, promoter, underwriter, trustee, partner, director or
person performing similar functions.
Indirect DTC Participants: Entities such as banks, brokers,
dealers or trust companies that clear through or maintain a custodial
relationship with a DTC Participant, either directly or indirectly.
Interest Accrual Amount: For each Distribution Date and Class of
Certificates (other than the Class R Certificate), the amount of interest
accrued on the Class Principal Balance of such Class of Certificates at the
Remittance Rate thereof during the Interest Accrual Period immediately prior to
such Distribution Date. Interest on the Class A-1 Certificates will be
calculated on the basis of the number of actual days elapsed during such
Interest Accrual Period over a 360-day year. Interest on the Class A-2
Certificates and the Class B Certificates will be calculated on the basis of a
360-day year consisting of twelve 30-day months (except that with respect to any
partial Interest Accrual Period, interest shall be calculated on the basis of
the number of days elapsed in such partial period).
Interest Accrual Period: For the Class A-1 Certificates, with
respect to each Distribution Date, the period beginning on and including the
immediately preceding Distribution Date and ending on and including the calendar
day immediately preceding such Distribution Date; provided that the initial
Interest Accrual Period will be the period from the date of initial issuance of
the Class A-1 Certificates to but excluding November 29, 2000. For the Class A-2
and Class B Certificates, with respect to each Distribution Date, the period
beginning on the 27th day of the month preceding the Distribution Date and
ending on and including the 26th day of the month in which such Distribution
Date occurs.
Interested Person: The Depositor, any Holder of a Certificate or
any Affiliate of any such Person.
LIBOR: For each Interest Accrual Period, the rate for deposits in
United States dollars for a one-month period which appears in the Telerate Page
3750 as of 11:00 a.m., London time, on the second Business Day prior to the
commencement of such Interest Accrual Period, and if such rate does not appear
on Telerate Page 3750, the rate for that day will be determined on the basis of
the rates at which deposits in United States dollars are offered by certain
reference banks selected by the Trustee at approximately 11:00 a.m., London
time, on that day to banks in the London interbank market for a one-month
period. If fewer than two quotations are provided as requested, the rate for
that day will be the arithmetic mean of the rates quoted by major banks in New
York City, selected by the Trustee, at approximately 11:00 a.m., New York City
time, on that day for loans in United States dollars to leading European banks
for a one-
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month period. If on any LIBOR determination date, the Trustee is unable to
determine one-month LIBOR, LIBOR for such Interest Accrual Period shall be LIBOR
as determined on the previous LIBOR determination date; provided, however, that
LIBOR for an Interest Accrual Period shall not be based on LIBOR for the
previous Interest Accrual Period for three consecutive Interest Accrual Periods.
If LIBOR for an Interest Accrual Period would be based on LIBOR for the previous
Interest Accrual Period for the second consecutive Interest Accrual Period, the
Trustee will select a comparable alternative index (over which the Trustee has
no control) used for determining LIBOR that is calculated and published (or
otherwise made available) by an independent third party.
Loans: One- to four-family, conventional, fixed-rate, first lien
mortgage loans or cooperative loans secured by shares in cooperative
corporations, each of which loans back a Pooled Security.
Majority Class Certificateholders: For any Class, the Holders of
Certificates evidencing in the aggregate greater than 50% of the aggregate
Percentage Interests of all the Certificates of such Class.
Major Underlying Distribution Date: With respect to each month,
the 25th day of the month or, if any such day is not a Business Day, the
Business Day immediately succeeding such day.
Mandatory Liquidation Event: As defined in Section 7.4.
Market Value: As defined in Section 3.8(c)(ii).
Moody's: Moody's Investors Service, Inc., or any successor
thereto.
Mortgage: The mortgage, deed of trust or other instrument securing
a Mortgage Note.
Mortgage Note: The note or other evidence of indebtedness
evidencing the indebtedness of a Mortgagor under a Loan.
Mortgaged Property: The real property, together with improvements
thereto, or the shares of cooperative corporations securing the indebtedness of
the Mortgagor under a Mortgage.
Mortgagor: The obligor on a Mortgage Note.
Non-U.S. Person: A Person that is not a U.S. Person.
Notice of Final Distribution: With respect to the Pooled
Securities, any notice provided pursuant to the related Underlying Agreement to
the effect that final distribution on a Pooled Security shall be made only upon
presentment and surrender thereof. With respect to a Class of Certificates, the
notice to be provided pursuant to Section 7.1 to the effect that final
distribution on such Class of Certificates shall be made only upon presentment
and surrender thereof.
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Officer's Certificate: With respect to any Person, a certificate
signed by the Chairman of the Board, the President or a Vice President of such
Person (or, in the case of a Person which is not a corporation, signed by the
person or persons having like responsibilities), and delivered to the Trustee.
Opinion of Counsel: A written opinion of counsel, who may be
outside or salaried counsel for the Depositor, or any Affiliate of the
Depositor, acceptable to the Trustee; provided, however, that with respect to
REMIC matters, matters relating to the determination of Eligible Accounts or
matters relating to transfers of Certificates, such counsel shall be
Independent.
Other Pooled Security Distribution Date Information: With respect
to any Pooled Security Distribution Date and the related Pooled Security for
which a Pooled Security Distribution Date Statement has not been received by the
Trustee as of the close of business on such Pooled Security Distribution Date,
information obtained by the Trustee by such means as the Trustee deems reliable,
including by telephone, fax or other electronic means, constituting all
information with respect to such Pooled Security necessary to calculate the
distribution to be made on the Certificates with respect to such Pooled
Security.
Ownership Interest: As defined in Section 4.1(b).
Pass-Through Entity: As defined in Section 4.1(b).
Paying Agent: As defined in Section 3.15.
Percentage Interest: (a) With respect to the right of each
Certificate of a particular Class in the distributions allocated to such Class,
"Percentage Interest" shall mean the percentage undivided beneficial ownership
interest evidenced by such Certificate of such Class, which percentage shall
equal:
(i) with respect to any Regular Interest Certificate, its
Certificate Principal Balance divided by the applicable Class Principal
Balance; and
(ii) with respect to the Class R Certificate, the percentage set
forth on the face of such Certificate.
(b) With respect to the rights of each Certificate in connection
with Sections 3.1, 4.9, 6.3, 6.8 and 8.1, "Percentage Interest" shall mean the
percentage undivided beneficial interest evidenced by such Certificate in the
Trust Fund, which for purposes of such rights only shall equal:
(i) with respect to any Certificate the percentage calculated by
dividing its Certificate Principal Balance by the Aggregate Certificate
Principal Balance; and
(ii) with respect to the Class R Certificate, zero.
Permitted Transferee: With respect to the holding or ownership of
any Residual Certificate, any Person other than (i) the United States, a State
or any political subdivision
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thereof, or any agency or instrumentality of any of the foregoing, (ii) a
foreign government or 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 the taxes imposed by chapter 1 of the Code (unless such organization is
subject to the tax imposed by Section 511 of the Code on unrelated business
taxable income), (iv) rural electric and telephone cooperatives described in
Code Section 1381(a)(2)(C), (v) any electing large partnership under Section 775
of the Code, (vi) any Person from which the Trustee or the Certificate Registrar
has not received an affidavit to the effect that it is not a "disqualified
organization" within the meaning of Section 860E(e)(5) of the Code, 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 the Trust Fund 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 Code Section
7701 or successor provisions. A corporation shall 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, limited liability company,
partnership, joint venture, association, joint-stock company, trust,
unincorporated organization or government or any agency or political subdivision
thereof.
Plan: As defined in Section 4.1(d)(i).
Pooled Security: The residential mortgage-backed securities sold
by the Seller to, and registered in the name of or held for the benefit of, the
Trustee pursuant to the Purchase and Sale Agreement and as more particularly set
forth on Exhibit D attached hereto (excluding therefrom, from and after the date
of repurchase, any Defective Pooled Securities).
Pooled Security Cut-Off Date Principal Balance: With respect to
any Pooled Security, the principal balance of such Pooled Security remaining to
be paid as of the close of business on the Cut-Off Date after deduction of all
principal payments paid in respect of such Pooled Security (without duplication)
on or before such date.
Pooled Security Distribution Date: With respect to each Pooled
Security, the day of the month on which distributions are made thereon.
Pooled Security Distribution Date Information: With respect to any
Pooled Security for which the related Pooled Security Distribution Date
Statement is available on any Pooled Security Distribution Date, such Pooled
Security Distribution Date Statement, and with respect to any Pooled Security
for which the related Pooled Security Distribution Date Statement is not
available on any Pooled Security Distribution Date, the related Other Pooled
Security Distribution Date Information.
Pooled Security Distribution Date Principal Balance: As of any
Pooled Security Distribution Date with respect to any Pooled Security, the
Pooled Security Cut-Off Date Principal Balance of such Pooled Security reduced
by all principal payments received by the
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Trustee in respect of such Pooled Security since the Pooled Security
Distribution Date for which both the Pooled Security distribution and the
related Pooled Security Date Information have been received by the Trustee as of
such Pooled Security Distribution Date.
Pooled Security Distribution Date Statement: Each report provided
monthly to holders of Pooled Securities in connection with each Pooled Security
Distribution Date pursuant to the related Underlying Agreement.
Pooled Security Interest Rate: For any Pooled Security, the stated
interest rate payable on such Pooled Security, as indicated in the related
Pooled Security Distribution Date Information.
Pooled Security Schedule: The schedule of Pooled Securities
attached hereto as Exhibit D which shall set forth as to each Pooled Security
the following, among other things:
(i) the issuer name;
(ii) the series;
(iii) the class;
(iv) the current trustee;
(v) the original principal balance;
(vi) the Pooled Security Cut-Off Date Principal Balance;
(vii) the Pooled Security Interest Rate; and
(viii) the CUSIP number of such Pooled Security.
Pooled Securityholder: With respect to Pooled Securities in
physical form, the registered holder of the Pooled Securities which, following
the execution and delivery of this Agreement by the parties hereto and
registration on the books of the applicable trustee with respect to the
Underlying Series, shall be the Trustee for the benefit of the
Certificateholders and with respect to Pooled Securities in book-entry form, the
Trustee or its DTC Participant for the benefit of the Certificateholders.
Pricing Service: As defined in Section 3.8(c)(ii).
Principal Balance: At the time of any determination, the Pooled
Security Cut-Off Date Principal Balance of a Pooled Security reduced by all
principal payments received by the Trustee in respect of such Pooled Security
since the Cut-Off Date.
Principal Distribution Amount: With respect to any Distribution
Date, the amount of principal paid on the Pooled Securities in the month in
which such Distribution Date occurs.
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Purchase and Sale Agreement: The purchase and sale agreement dated
as of November 2, 2000 between the Seller and the Depositor relating to purchase
of the Pooled Securities by Depositor or the Trustee, as the Depositor's
assignee pursuant to this Agreement, substantially in the form of Exhibit H
hereto.
Purchase Obligation: An obligation of the Seller to repurchase
Pooled Securities under the circumstances and in the manner provided in Section
4(b) of the Purchase and Sale Agreement.
Purchase Price: With respect to any Pooled Security to be
purchased pursuant to a Purchase Obligation, an amount equal to the sum of the
Principal Balance thereof, plus accrued and unpaid interest thereon, if any, to
the last day of the calendar month in which the date of repurchase occurs at a
rate equal to the applicable Pooled Security Interest Rate.
Rating Agency: Moody's and S&P or their respective successors in
interest.
Ratings: As of any date of determination, the ratings, if any, of
the Certificates as assigned by each Rating Agency.
Realized Loss: A loss incurred on a defaulted Underlying Mortgage
Loan, as reported on the related Pooled Security Distribution Date Statement.
Record Date: For the Class A-1, Class A-2 and Class B
Certificates, the close of business on the day immediately preceding the related
Distribution Date.
Regular Interest Certificates: The Certificates other than the
Class R Certificate.
REMIC: A real estate mortgage investment conduit, as such term is
defined in the Code.
REMIC Regular Interests: The regular interests in the REMIC
constituting of the Trust Fund.
REMIC Provisions: Sections 860A through 860G of the Code, related
Code provisions and regulations promulgated thereunder, as the foregoing may be
in effect from time to time.
Remittance Rate: For each Class of Certificates, the per annum
rate set forth as the Remittance Rate for such Class in the Preliminary
Statement hereto.
Residual Certificate: The Class R Certificate hereby designated as
the sole Class of "residual interests" in the REMIC for purposes of Section
860G(a)(2) of the Code.
Residual Distribution Amount: With respect to each Distribution
Date, the sum of the amount of interest income earned on any Eligible
Investments in the Certificate Account, in excess of the Trustee Fee for that
date, since the immediately preceding Distribution Date, plus any remaining
Available Funds on deposit in the Certificate Account after making those
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distributions described in "Certificate Distribution Amount", and with respect
to each Distribution Date after the date on which the Class Principal Balances
of each Class of Certificates have been reduced to zero, any amounts remaining
in the Certificate Account after all permitted withdrawals have been made
therefrom.
Responsible Officer: When used with respect to the Trustee, the
Chairman or Vice-Chairman of the Board of Directors or Trustees, the Chairman or
Vice-Chairman of the Executive or Standing Committee of the Board of Directors
or Trustees, the President, the Chairman of the Committee on Trust Matters, any
Vice-President, any Assistant Vice President, the Secretary, any Assistant
Secretary, the Treasurer, any Assistant Treasurer, the Cashier, any Assistant
Cashier, any Trust Officer or Assistant Trust Officer, the Controller, any
Assistant Controller or any other officer of the Trustee customarily performing
functions similar to those performed by any of the above-designated officers and
in each case having direct responsibility for the administration of this
Agreement, and also, with respect to a particular matter, any other officer to
whom such matter is referred because of such officer's knowledge of and
familiarity with the particular subject. When used with respect to the Depositor
or any other Person, the Chairman or Vice-Chairman of the Board of Directors,
the Chairman or Vice-Chairman of any executive committee of the Board of
Directors, the President, any Vice President, the Secretary, any Assistant
Secretary, the Treasurer, any Assistant Treasurer, or any other officer of the
Depositor customarily performing functions similar to those performed by any of
the above-designated officers and also, with respect to a particular matter, any
other officer to whom such matter is referred because of such officer's
knowledge of and familiarity with the particular subject.
S&P: Standard & Poor's Ratings Service, a division of The
McGraw-Hill Companies, Inc., or any successor thereto.
Securities Act: The Securities Act of 1933, as amended.
Seller: Washington Mutual Bank, FA or its permitted successors and
assigns under the Purchase and Sale Agreement.
Single Certificate: A Certificate with an original Certificate
Principal Balance of $1,000.
Tax Matters Person: The Holder of the Class R Certificate issued
hereunder or any Permitted Transferee of such Class R Certificateholder shall be
the initial "tax matters person" for the REMIC constituted by the Trust Fund
within the meaning of Section 6231(a)(7) of the Code. For tax years commencing
after any transfer of the Class R Certificate, the holder of the greatest
Percentage Interest in the Class R Certificate at year end shall be designated
as the Tax Matters Person with respect to that year. If the Tax Matters Person
becomes a Disqualified Organization, the last preceding Holder of such
Authorized Denomination of the Class R Certificate that is not a Disqualified
Organization shall be Tax Matters Person pursuant to Section 5.1(c). If any
Person is appointed as tax matters person by the Internal Revenue Service
pursuant to the Code, such Person shall be Tax Matters Person.
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Telerate Page 3750: means the display page currently so designated
on the Dow Jones Telerate Service (or such other page as may replace the page on
that service for the purpose of displaying comparable rates or prices) and
"Reference Banks" means leading banks selected by the trustee and engaged in
transactions in Eurodollar deposits in the international Eurocurrency market.
Transfer: As defined in Section 4.1(b).
Transferee: As defined in Section 4.1(b).
Transferee Affidavit and Agreement: As defined in Section
4.1(c)(i)(B).
Trust Fund: The corpus of the trust created pursuant to Section
2.1 of this Agreement. The Trust Fund consists of (i) the Assigned Agreements,
(ii) the Pooled Securities and all rights pertaining thereto and (iii) such
assets as from time to time may be held by the Trustee, in trust for
Certificateholders, including the Certificate Account.
Trustee: Wells Fargo Bank Minnesota, National Association, or its
successor in interest as provided in Section 6.9, or any successor trustee
appointed as herein provided.
Trustee Fee: An amount for each Interest Accrual Period and each
related Distribution Date equal to one twelfth of the product of (a) the Trustee
Fee Rate and (b) the sum of the Pooled Security Distribution Date Principal
Balances for each of the Pooled Securities owned by the Trust Fund on such
Distribution Date, which fee shall be payable on such Distribution Date.
Trustee Fee Rate: The percentage equal to 0.00625%.
Underlying Agreements: The agreements pursuant to which the
related Pooled Securities were issued, as in effect on the Closing Date.
Underlying Event of Default: An event of default under an
Underlying Agreement.
Underlying Mortgage Loans: The Loans included in an underlying
trust in which a Pooled Security evidences a beneficial ownership interest.
Underlying Series: Each series of securities which includes one or
more classes of Pooled Securities, as set forth on Exhibit D hereto.
Underwriter: Merrill Lynch, Pierce, Fenner & Smith Incorporated.
U.S. Person: A citizen or resident of the United States, a
corporation or partnership (including an entity treated as a corporation or
partnership for federal income tax purposes) created or organized in, or under
the laws of, the United States or any state thereof or the District of Columbia
(except, in the case of a partnership, to the extent provided in regulations) or
an estate whose income is subject to United States federal income tax regardless
of its source, or a trust if a court within the United States is able to
exercise primary supervision
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over the administration of the trust and one or more such U.S. Persons have the
authority to control all substantial decisions of the trust. To the extent
prescribed in regulations by the Secretary of the Treasury, which have not yet
been issued, a trust which was in existence on August 20, 1996 (other than a
trust treated as owned by the grantor under subpart E of part 1 of subchapter J
of chapter 1 of the Code), and which was treated as a U.S. Person on August 20,
1996 may elect to continue to be treated as a U.S. Person notwithstanding the
previous sentence.
Withdrawal Date: The Business Day immediately preceding the
related Distribution Date.
All references to the origination date or original date in the
Pooled Securities Schedule with respect to a Pooled Security shall refer to the
date upon which the related Pooled Security was initially purchased by the
Depositor.
ARTICLE II
CONVEYANCE OF TRUST FUND;
ORIGINAL ISSUANCE OF CERTIFICATES
Section 2.1 Conveyance of Trust Fund. The Depositor, concurrently
with the execution and delivery hereof, does hereby irrevocably sell, convey and
assign to the Trustee and the REMIC constituted by the Trust Fund, without
recourse all the right, title and interest of the Depositor in and to the Trust
Fund, for the benefit of the Certificateholders, including the Assigned
Agreements. The Depositor does hereby authorize and direct the Trustee, as
trustee for the benefit of Certificateholders and not individually, to assume
the duties of the Depositor under the Assigned Agreements. The Trustee, as
trustee and in accordance with such directions, does hereby assume the duties of
the Depositor under the Assigned Agreements. In connection with the foregoing,
the Trustee is hereby authorized and directed to deliver the Class A-1 and Class
A-2 Certificates to the Underwriter, and to apply the purchase price paid by the
Underwriter for such Certificates, together with the Class B Certificates and
the Class R Certificate, to the purchase price for the Pooled Securities payable
pursuant to the Purchase and Sale Agreement. Any remaining portion of the
purchase price received from the sale of the Class A-1 and Class A-2
Certificates shall be remitted to the Depositor.
The Depositor, at its own expense, shall file or cause to be filed
protective Form UCC-1 financing statements with respect to the Pooled Securities
in the State of Minnesota or other applicable jurisdiction listing itself as
"Debtor" under such financing statement and listing the Trustee, for the benefit
of the Certificateholders, as "Secured Party", under such financing statement.
To the extent available, the Depositor shall provide the Trustee
no later than the Closing Date the offering documents and the Underlying
Agreements with respect to each Pooled Security and the most recent Pooled
Security Distribution Date Statement received by the Depositor to the extent
that such items are not provided by the Seller pursuant to the Purchase and Sale
Agreement.
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All rights arising out of the Pooled Securities including, without
limitation, all funds received on or in connection with a Pooled Security shall
be held by the Trustee in trust for the benefit of the Certificateholders,
including all interest and principal received with respect to the Pooled
Securities after the Cut-Off Date, but not including payments of principal and
interest paid on the Pooled Securities on or before the Cut-Off Date. The
Trustee shall maintain a complete set of books and records for each Pooled
Security which shall be clearly marked to reflect the ownership of each Pooled
Security by the Trustee for the benefit of the Certificateholders.
The Trustee is authorized to appoint any bank or trust company
approved by the Depositor as Custodian of the documents or instruments referred
to in this Section 2.1, and to enter into a Custodial Agreement for such purpose
and any documents delivered thereunder shall be delivered to the Custodian and
any Officer's Certificates delivered with respect thereto shall be delivered to
the Trustee and the Custodian.
Section 2.2 Acceptance by Trustee. The Trustee (a) acknowledges
the assignment of the Assigned Agreements to it in trust and (b) assumes the
duties of the Depositor under the Assigned Agreement. In addition, upon such
transfer and assumption and the concurrent assignment of the Pooled Securities
to it pursuant to the Purchase and Sale Agreement, the Trustee hereby
acknowledges the receipt of the Pooled Securities referred to in Section 2.1
above, and declares that it holds and will hold such documents and the other
documents constituting a part of the items of property included in the Trust
Fund delivered to it as Trustee in trust, upon the trusts herein set forth, for
the use and benefit of all present and future Certificateholders.
Section 2.3 Representations and Warranties of the Depositor. The
Depositor hereby represents and warrants to the Trustee as of the Closing Date
that:
(i) The Depositor is duly organized as a Delaware corporation and
is validly existing and in good standing under the laws of the State of
Delaware and is qualified under the laws of each state where required
by applicable law or is otherwise exempt under applicable law from such
qualification. The Depositor has all requisite power and authority to
enter into this Agreement and to carry out the transactions
contemplated hereby;
(ii) The execution and delivery by the Depositor of this Agreement
and the consummation of the transactions contemplated hereby have each
been duly and validly authorized by all necessary action, and this
Agreement constitutes a valid and legally binding agreement of the
Depositor, enforceable against the Depositor in accordance with its
terms, except that (i) the enforceability hereof may be limited by
bankruptcy, insolvency, moratorium, receivership and other similar laws
relating to creditors' rights generally and (ii) 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;
(iii) The execution and delivery of this Agreement and the
consummation of the transactions contemplated hereby will not violate,
conflict with, result in a breach of,
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constitute a default under or be prohibited by, or require any
additional approval, waiver or consent under the Depositor's
certificate of incorporation or by-laws or any instrument or agreement
to which it is a party or by which it is bound or any federal or state
law, rule or regulation or any judicial or administrative decree,
order, ruling or regulation applicable to it; and
(iv) There is no litigation or action at law or in equity pending,
or, to the Depositor's knowledge, threatened against the Depositor and
no proceeding or investigation of any kind is pending or, to the
Depositor's knowledge, threatened, by any federal, state or local
government or administrative body, which could reasonably be expected
to materially and adversely affect the Depositor's ability to
consummate the transactions contemplated hereby; and
(v) the Depositor has the requisite power and authority to assign
the Assigned Agreements to the Trustee and all corporate and other
action required to be taken for the assignment of such agreements
hereunder has been taken.
It is understood and agreed that the representations and
warranties set forth in this Section 2.3 shall survive the assignment of the
Assigned Agreements to the Trustee and the delivery of the Pooled Securities to
the Trustee by the Seller.
Section 2.4 Actions in the Event of Breaches of Representations
and Warranties under the Purchase and Sale Agreement. Upon discovery by the
Trustee of a breach of any of the representations and warranties set forth in
Section 4(a) of the Purchase and Sale Agreement that materially and adversely
affects the value of the Pooled Securities or the interests of the Trustee in
the related Pooled Security, the Trustee shall give prompt written notice of
such breach to the Seller. In the event that the Seller shall not have cured
such breach in all material respects within 60 days of its discovery or receipt
of notice of breach in accordance with the terms of the Purchase and Sale
Agreement, the Trustee shall enforce its rights under to Purchase and Sale
Agreement to require the Seller to purchase the Defective Pooled Security from
the Trustee on the first day of the month in the month following the month in
which such 60-day period expired for the Purchase Price of such Pooled Security.
Upon receipt of the Purchase Price by the Trustee, the Trustee
shall release the Defective Pooled Security to the Seller, and the Trustee shall
execute and deliver such instruments of transfer or assignment, in each case
without recourse, as shall be necessary to vest in the Seller or its designee
any Pooled Security released pursuant hereto. It is understood and agreed that
the obligation of the Seller to cure or repurchase any Pooled Security as to
which a breach has occurred and is continuing is the sole remedy respecting such
breach available to Certificateholders or the Trustee on behalf of
Certificateholders, and such obligation shall survive as the obligation of the
Seller or its successors.
Upon discovery by the Trustee of a breach of any of the
representations and warranties set forth in Section 4(a) of the Purchase and
Sale Agreement, which breach materially and adversely affects the interests of
the Certificateholders in the related Pooled Security, the Trustee shall also
give prompt written notice to each Rating Agency.
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Section 2.5 Authentication and Delivery of Certificates;
Designation of Certificates as REMIC Regular and Residual Interests. (a) The
Trustee acknowledges the transfer to the extent provided herein and assignment
to it of the Trust Fund and, concurrently with such transfer and assignment, has
caused to be authenticated and delivered to or upon the order of the Depositor,
in exchange for the Trust Fund, Certificates evidencing the entire ownership of
the Trust Fund. The Depositor expressly directs the Trustee to deliver the Class
A-1 and Class A-2 Certificates to the Underwriter in exchange for the purchase
price payable with respect thereto, and to deliver the Class B Certificates and
the Class R Certificate, together with cash received from the Underwriter in an
amount equal to the cash portion of the purchase price payable under the
Purchase and Sale Agreement, to the Seller as payment of the purchase price for
the Pooled Securities.
(b) This Agreement shall be construed so as to carry out the
intention of the parties that the REMIC constituted by the Trust Fund be treated
as a REMIC at all times prior to the date on which the Trust Fund is terminated.
The "regular interests" (within the meaning of Section 860G(a)(1) of the Code)
in the REMIC constituted by the Trust Fund shall consist of the Class A-1, Class
A-2 and Class B Certificates. The "residual interest" (within the meaning of
Section 860(G)(a)(2) of the Code) in the REMIC constituted by the Trust Fund
shall consist of the Class R Certificate.
Section 2.6 Designation of Startup Day. The Closing Date is hereby
designated as the "startup day" of the REMIC constituted by the Trust Fund
within the meaning of Section 860G(a)(9) of the Code.
Section 2.7 No Contributions. The Trustee shall not accept or make
any contribution of cash to the Trust Fund after 90 days of the Closing Date,
and shall not accept or make any contribution of other assets to the Trust Fund
unless, in either case, it shall have received an Opinion of Counsel to the
effect that the inclusion of such assets in the Trust Fund will not cause the
REMIC constituted by the Trust Fund to fail to qualify as a REMIC at any time
that any Certificates are outstanding or subject the Trust Fund to any tax on
contributions to the REMIC under Section 860G(d) of the Code.
ARTICLE III
ADMINISTRATION OF THE POOLED SECURITIES
Section 3.1 Administration of the Trust and the Pooled Securities.
If at any time the Trustee, as a holder of a Pooled Security, is requested in
such capacity, whether by a Certificateholder, a holder of a certificate of the
related Underlying Series or a party to the related Underlying Agreement or any
other Person, to take any action or to give any consent, approval or waiver,
including without limitation in connection with the servicing and administration
of Acquired Mortgage Assets, an amendment of any related Underlying Agreement or
the occurrence of an Underlying Event of Default, the Trustee shall promptly
notify the Depositor and all Certificateholders of such request and shall, in
its capacity as a holder of the Pooled Securities, take such action in
connection with the exercise and/or enforcement of any rights and/or remedies
available to it in such capacity with respect to such
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request as shall be directed in writing by the Holders of Certificates having a
Percentage Interest aggregating not less than 51% of the Trust Fund. The Trustee
shall promptly furnish to the Depositor and, upon the written request and at the
expense of a Certificateholder, will make available to each Certificateholder,
all notices, statements, reports or other information that it receives as holder
of the Pooled Securities, including without limitation information regarding the
Underlying Mortgage Loans and any Acquired Mortgage Assets.
Section 3.2 Collection of Monies. (a) In connection with its
receipt of any distribution on the Pooled Securities on any Pooled Security
Distribution Date (or such later date on which the Trustee shall receive the
related Pooled Security Distribution Date Information), the Trustee shall review
the related Pooled Security Distribution Date Information delivered to it and
shall confirm that the aggregate amount of such distribution received is
consistent with such information (it being understood that the Trustee shall be
entitled to rely on the accuracy and correctness of such information). In the
event of any discrepancy between any distribution on a Pooled Security and the
related Pooled Security Distribution Date Information, the Trustee shall
communicate with the underlying trustee of the related Underlying Series to
resolve such discrepancy, and if such discrepancy is not resolved prior to the
next succeeding Pooled Security Distribution Date (for any Pooled Security so
affected by such a discrepancy), the Trustee shall notify each Rating Agency and
the Pricing Service.
If the Trustee shall gain actual knowledge of any Underlying Event
of Default, the Trustee shall promptly notify the Certificateholders and the
Depositor of such occurrence and such parties shall proceed in accordance with
the terms and conditions of Section 3.1.
(b) If a Responsible Officer of the Trustee receives a Notice of
Final Distribution in respect of any Pooled Security, the Trustee shall present
and surrender the related Pooled Security which is in certificated form for
final payment thereon in accordance with the terms and conditions of the related
Underlying Agreement and such notice. The Trustee shall promptly deposit in the
Certificate Account the final distribution received upon presentation and
surrender of such Pooled Security for distribution in accordance with Section
3.5 hereof on the next succeeding Distribution Date.
Section 3.3 Establishment of the Certificate Account; Deposits
Therein. (a) The Trustee, for the benefit of the Certificateholders, shall
establish and maintain one or more trust accounts (collectively, the
"Certificate Account"), each of which shall be an Eligible Account, entitled
"Wells Fargo Bank Minnesota, National Association, as Trustee for the registered
holders of MLMI Resecuritization Pass-Through Certificates, Series 2000-WM2,"
held in trust by the Trustee for the benefit of the Certificateholders. The
Trustee shall cause all distributions received on the Pooled Securities by the
Trustee in its capacity as holder of the Pooled Securities, from whatever
source, all amounts received by it representing the proceeds of a sale of the
Pooled Securities upon the occurrence of an Early Liquidation Event or a
Mandatory Liquidation Event, and all amounts received by it representing payment
of a Purchase Price pursuant to Section 7.1 or Section 4(b) of the Purchase and
Sale Agreement subsequent to the Closing Date to be deposited directly into the
Certificate Account. The Certificate Account is initially located at the
Trustee.
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The Trustee shall give notice to the Depositor and to
Certificateholders of any new location of the Certificate Account prior to any
change thereof.
(b) In the event that payments in respect of the Pooled Securities
are received by the Trustee prior to the related Distribution Date, the Trustee
shall invest such funds in Eligible Investments.
(c) With respect to the Certificate Account and the funds
deposited therein, the Trustee shall take such action as may be necessary to
ensure that the Certificateholders shall be entitled to the priorities afforded
to such a trust account (in addition to a claim against the estate of the
Trustee) as provided by 12 U.S.C. ss. 92a(e), if applicable.
Section 3.4 Permitted Withdrawals from the Certificate Account.
(a) The Trustee may from time to time withdraw funds from the Certificate
Account for the following purposes:
(i) to make distributions in the amounts and in the manner
provided for in Section 3.5;
(ii) to pay to itself, prior to making any distributions under
Section 3.5, from any deposit in the Certificate Account (A) to the
extent permitted by this Agreement, the Trustee Fee pursuant to Section
3.6 and (B) indemnity payments to the extent permitted pursuant to
Section 3.13 and 6.6;
(iii) to remit to the holder of the Residual Certificate the
amount of interest income earned on any Eligible Investments in the
Certificate Account, in excess of the Trustee Fee for that date, since
the immediately preceding Distribution Date;
(iv) to make payments pursuant to Section 5.3 or any other
provision of this Agreement authorizing payments from the Certificate
Account;
(v) to pay to the Person entitled thereto any amount deposited in
the Certificate Account in error; and
(vi) to clear and terminate the Certificate Account upon the
termination of this Agreement.
(b) On each Distribution Date, the Trustee shall withdraw all
funds from the Certificate Account and shall use such funds withdrawn from the
Certificate Account only for the purposes described in this Section 3.4 and in
Section 3.5.
Section 3.5 Distributions. (a) (i) On each Distribution Date, the
Trustee or the Paying Agent, if any, shall withdraw from the Certificate Account
the Available Funds on deposit in the Certificate Account as of such
Distribution Date and shall distribute to each Certificateholder, from the
amount so withdrawn and to the extent of the Available Funds, such
Certificateholder's share (based on the aggregate Percentage Interests
represented by the Certificates of the applicable Class held by such
Certificateholder) of the amounts and in the order of priority as set forth in
the definition of "Certificate Distribution Amount", by wire
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transfer in immediately available funds for the account of the
Certificateholder, if such Certificateholder shall have notified the Trustee in
writing at least five Business Days prior to the related Record Date, or by any
other means of payment acceptable to each Certificateholder of record on the
immediately preceding Record Date (other than as provided in Section 7.1
respecting the final distribution), as specified by each such Certificateholder
and at the address of such Holder appearing in the Certificate Register;
provided that, if the Trustee has appointed a Certificate Administrator, such
distributions above shall be made in accordance with written statements received
from the Certificate Administrator pursuant to Section 3.7.
(ii) On each Distribution Date, the Trustee or the Paying Agent,
if any, shall withdraw the Residual Distribution Amount from amounts on deposit
in the Certificate Account on each such Distribution Date and shall distribute
to the Class R Certificateholder such amount by wire transfer in immediately
available funds for the account of the Class R Certificateholder, or, if the
Class R Certificateholder shall have notified the Trustee in writing at least
five Business Days prior to the related Record Date, by the means of payment so
notified to the Trustee.
(iii) If the Trustee has not received a distribution on, or the
Pooled Security Distribution Date Information with respect to, the Pooled
Securities by the Pooled Security Distribution Date, such distribution will not
be made on the related Distribution Date and instead will be made on the next
succeeding Distribution Date, and no additional interest will be paid thereon.
(b) All reductions in the Certificate Principal Balance of a
Certificate effected by distributions of principal made on any Distribution Date
shall be binding upon all Holders of such Certificate and of any Certificate
issued upon the registration of transfer or exchange therefor or in lieu
thereof, whether or not such distribution or allocation is noted on such
Certificate.
(c) Whenever the Trustee believes, or the Certificate
Administrator, if any, has notified the Trustee that it believes, that the
entire remaining unpaid Class Principal Balance of any Class of Certificates
will become distributable on the next Distribution Date, the Trustee or the
Certificate Administrator, if any, shall, no later than five days before the
Distribution Date of the month of such Distribution Date, mail or cause to be
mailed to each Person in whose name a Certificate to be so retired is registered
at the close of business on the Record Date, to the Underwriter and to the
Rating Agencies a notice to the effect that:
(i) it is expected that funds sufficient to make such final
distribution will be available in the Certificate Account on such
Distribution Date, and
(ii) if such funds are available, (A) such final distribution will
be payable on such Distribution Date, but only 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 such Distribution Date.
(d) Notwithstanding any other provision of this Agreement, the
Trustee shall comply with all federal withholding requirements respecting
payments to Certificateholders of
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interest or the accrual of original issue discount that the Trustee reasonably
believes are applicable under the Code. The consent of Certificateholders shall
not be required for such withholding. In the event the Trustee does withhold any
amount from payments to any Certificateholder pursuant to federal withholding
requirements, the Trustee shall indicate the amount withheld to such
Certificateholders.
(e) The Trustee may conclusively rely on the information set forth
in the Pooled Security Distribution Date Information in making the calculations
called for in this Section 3.5, including, without limitation, the
determinations of the interest and principal to be paid on each Class of
Certificates. If the information available to the Trustee in any Pooled Security
Distribution Date Information is insufficient to make the calculations provided
for in this Section 3.5, the Trustee shall promptly request the underlying
trustee with respect to the Pooled Securities to provide sufficient information
in writing, and after receipt of such information the Trustee shall make on the
following Distribution Date any necessary adjustments in the application of
amounts in the Certificate Account. If such information is not received from
such underlying trustee, the Trustee shall not be responsible for making any
such adjustment.
Section 3.6 Trustee Compensation. The Trustee shall be entitled to
retain or, if not retained, to withdraw from the Certificate Account, as its
monthly trustee compensation, the Trustee Fee. The Trustee shall be required to
pay all expenses incurred by it in connection with its trustee activities
hereunder and shall not be entitled to reimbursement therefor except as
specifically provided herein.
The Trustee shall be responsible for paying all compensation and
expenses of the Certificate Administrator out of its Trustee Fee. The
Certificate Administrator shall not be entitled to reimbursement of expenses
incurred by it in connection with its certificate administrator activities
hereunder and shall not be entitled to reimbursement therefor except as
specifically provided herein.
Section 3.7 Distribution Reports to the Trustee. In the event that
the Trustee has appointed a Certificate Administrator, prior to 5:00 p.m. New
York City time on the Withdrawal Date, the Certificate Administrator shall
provide the Trustee with a statement regarding the amount of principal and
interest (if any) to be distributed to each Class of Certificates on such
Distribution Date (such amounts to be determined in accordance with the
definition of "Certificate Distribution Amount", Section 3.5 hereof and other
related definitions set forth in Article I hereof).
Section 3.8 Statements to Certificateholders and Rating Agencies.
(a) On each Distribution Date, to the extent that the Trustee receives the
Pooled Security Distribution Date Information by 12:00 p.m. (New York time) on
the Withdrawal Date, the Certificate Administrator or Trustee, as applicable,
shall prepare, and make available, a statement (each, a "Certificateholders'
Report") to the Trustee (if the Trustee has appointed a Certificate
Administrator), each Certificateholder, the Depositor and each Rating Agency
stating:
(i) the Available Funds for such Distribution Date;
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(ii) the amount of interest being distributed on each Class of
Certificates for such Distribution Date and, in the case of the Class
A-1 Certificates, the applicable Remittance Rate for the Interest
Accrual Period ending on the day before such Distribution Date and the
applicable Remittance Rate for the Interest Accrual Period beginning on
such date;
(iii) the amount of principal being distributed on each Class of
Certificates for such Distribution Date;
(iv) the Class Principal Balances for each Class of Certificates
before and after applying payments on such Distribution Date; and
(v) the aggregate Principal Balance of the Pooled Securities
immediately following the second preceding Pooled Security Distribution
Date.
In the case of the information furnished pursuant to clauses (ii)
and (iii) above, the amounts shall also be expressed as a dollar amount per
Single Certificate. The Trustee's responsibility for reporting the above
information is limited to the availability, timeliness, and accuracy of the
information so furnished to it in the related Pooled Security Distribution Date
Information and any additional written information requested by the Trustee with
respect to the Pooled Securities. The Trustee shall not be liable and shall have
no duty to verify the accuracy of the Pooled Security Distribution Date
Information or any information on the Certificateholder Report generated from
such information. If the Trustee receives any such additional information after
preparing a statement required by this Section, the Trustee shall report the
related adjustments in the statement prepared after receipt of such information.
The Trustee will make available each month, to any interested
party, the Certificateholders' Report (and any additional files containing the
same information in alternative format) via the Trustee's Website and its
fax-on-demand service. The Trustee's Website will initially be located at
www.ctslink.com. The Trustee's fax-on-demand service may be accessed by calling
(301) 815-6610. In addition, the Trustee will make available, as a convenience
for interested parties (and not in furtherance of the distribution of the
accompanying prospectus or the prospectus supplement under the securities laws),
this Agreement, the prospectus or the prospectus supplement via the Trustee's
Website. For assistance with the above-referenced services, interested parties
may call (301) 815-6600. The Trustee will make no representations or warranties
as to the accuracy or completeness of such documents and will assume no
responsibility therefor.
In connection with providing access to the Trustee's Website, the
Trustee may require registration and the acceptance of a disclaimer. The Trustee
shall not be liable for the dissemination of information in accordance with the
Pooling Agreement.
(b) The Certificate Administrator or the Trustee, as applicable,
shall prepare and deliver to the Trustee (if the Trustee has appointed a
Certificate Administrator), each Certificateholder, the Depositor and each
Rating Agency, based on and to the extent of the information so furnished to it
in the Pooled Security Distribution Date Information, no later than five
Business Days following each Distribution Date, the following information:
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(i) For each Pooled Security which received a monthly distribution
to be included in the payment on the Certificates on the related
Distribution Date, and to the extent reported in the related Pooled
Security Distribution Date Information:
(A) the Pooled Security Distribution Date Principal Balance
of such Pooled Security as of the second immediately preceding
Pooled Security Distribution Date and the immediately preceding
Pooled Security Distribution Date, which date shall be specified;
(B) the Pooled Security Interest Rate expressed as a per
annum rate borne by such Pooled Security with respect to the
related Pooled Security Distribution Date;
(C) the amount of interest distributed on such Pooled
Security on the related Pooled Security Distribution Date, as well
as any amount by which the amount of interest scheduled to be
distributed on such Pooled Security on such Pooled Security
Distribution Date exceeded the amount of interest actually
distributed thereon;
(D) all Realized Losses incurred on the Underlying Mortgage
Loans on the related Pooled Security Distribution Date, since the
date of issuance of such Pooled Security and since the Cut-Off
Date;
(E) all Realized Losses allocated to the Pooled Security on
the related Pooled Security Distribution Date since the Cut-Off
Date;
(F) the amount, aggregate principal balance and percentage of
the Underlying Mortgage Loans that were (i) more than 30 but fewer
than 60 days delinquent, (ii) more than 60 but fewer than 90 days
delinquent, (iii) 90 days or more delinquent, (iv) in foreclosure,
and (v) "REO" property, each as of the end of the reporting period
covered by the Pooled Security Distribution Date Statement
delivered with respect to such Pooled Security as of the related
Pooled Security Distribution Date;
(G) the amount of principal distributed on such Pooled
Security on the related Pooled Security Distribution Date; and
(H) the total amount distributed on such Pooled Security on
the related Pooled Security Distribution Date.
[(ii) For all Underlying Mortgage Loans, an aggregate statement of
delinquency statistics reporting all of the information specified in
clause (i)(F) above in the aggregate for the related Pooled Security
Distribution Date and each of the eleven prior reporting periods;
(iii) The number and aggregate Pooled Security Distribution Date
Principal Balance of all of the Pooled Securities and the amount of
principal and interest
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distributed on such securities, as of the respective related
Pooled Security Distribution Date; and
(iv) The aggregate outstanding principal balance of the Underlying
Mortgage Loans as reported on the related Pooled Security Distribution
Date Statements.
(c) The Certificate Administrator or the Trustee, as applicable,
shall, on the first Business Day of each week, beginning with the first full
week after the Closing Date, prepare and forward to each Rating Agency, and make
available to each Certificateholder who so requests, a report stating, for the
preceding week:
(i) the name and amount of the securities included in the Pooled
Securities at the close of business on the last Business Day of such
preceding week;
(ii) the market value (the "Market Value") of the Pooled
Securities at the close of business on each Business Day (as determined
by Merrill Lynch Pricing Service or such other pricing service (such
service being, the "Pricing Service") that has been approved by the
Rating Agencies);
(iii) the ratio of the Market Value of the Pooled Securities to
the sum of the Class A-1 Principal Balance and the Class A-2 Principal
Balance; and
(iv) the ratio of the Market Value of the Pooled Securities to the
sum of the Class Principal Balances of the Class A-1 and Class A-2
Certificates and 108.7% of the Class B Principal Balance.
(d) The Certificate Administrator or the Trustee, as applicable,
shall promptly notify the Depositor of the receipt following a Distribution Date
of any corrected Pooled Security Distribution Date Information with respect to a
Pooled Security which results in a change in excess of $5,000. The Certificate
Administrator or the Trustee, as applicable, shall consult with the Depositor
concerning such change and the Depositor and the Certificate Administrator or
the Trustee, as applicable, shall mutually agree on a course of action with
respect thereto.
(e) The Certificate Administrator or the Trustee, as applicable,
shall promptly furnish to the Depositor and, upon the written request and at the
expense of a Certificateholder, will make available to each Certificateholder,
copies of any notices, statements, reports or other communications including,
without limitation, the Pooled Security Distribution Date Statement, received by
the Trustee in its capacity as a holder of Pooled Securities, with respect to
the Pooled Securities. The Certificate Administrator or the Trustee, as
applicable, shall furnish upon request copies of all Pooled Security
Distribution Date Statements to each Rating Agency promptly after its receipt of
the same.
(f) On or before March 31, of each calendar year, commencing in
2001, the Trustee shall prepare and make available to the Depositor and to each
Person who at any time during the prior calendar year was a Certificateholder of
record a statement containing the information required to be contained in the
Certificateholders' Report, as set forth in clause (a)(ii) and (a)(iii) above
aggregated for the calendar year or the applicable portion thereof during which
such Person was a Certificateholder. Such obligation of the Trustee shall be
deemed to
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have been satisfied to the extent that substantially comparable information
shall be provided by the Trustee pursuant to any requirements of the Code, and
regulations thereunder as from time to time are in force.
Section 3.9 Access to Certain Documentation and Information. The
Certificate Administrator and/or the Trustee, as applicable, shall provide to
the Depositor access to all reports, documents and records maintained by the
Certificate Administrator or the Trustee, as applicable, in respect of their
duties hereunder, such access being afforded without charge but only upon three
Business Days' written request and during normal business hours at offices
designated by the Certificate Administrator or the Trustee, as applicable.
Section 3.10 Calculation of Amount to be Distributed. All
calculations of the amounts to be distributed on any Distribution Date will be
made by the Paying Agent and/or the Certificate Administrator and/or the
Trustee, as applicable, in reliance on the information provided to the
applicable party in the applicable Pooled Security Distribution Date Information
and any additional written information requested by the Paying Agent and/or the
Certificate Administrator and/or the Trustee, as applicable, with respect to the
Pooled Securities. The Paying Agent and/or the Certificate Administrator and/or
the Trustee, as applicable, shall promptly communicate the results of its
calculations to the Depositor and the Certificateholders (which obligation may
be satisfied through the distribution of the statements required under Section
3.8).
Section 3.11 REMIC-Related Covenants. For as long as the REMIC
constituted by the Trust Fund shall exist, the Paying Agent and/or the
Certificate Administrator and/or the Trustee, as applicable, shall act in
accordance herewith to assure continuing treatment of each such REMIC as a
REMIC. In particular, the Trustee shall not accept any contribution to the REMIC
after the Startup Day without receipt of an Opinion of Counsel.
Section 3.12 [Reserved]
Section 3.13 Prohibited Transactions Taxes and Other Taxes. (a) In
the event that any tax (including a tax on "prohibited transactions" as defined
in Section 860F(a)(2) of the Code and including any and all interest, penalties,
fines and additions to tax, as well as any and all reasonable counsel fees and
out-of-pocket expenses incurred in contesting the imposition of such tax) is
imposed on the Trust Fund and is not otherwise paid pursuant to Section 3.13(b)
hereof, the Trustee shall pay such taxes when and as the same shall be due and
payable (but such obligation shall not prevent the Trustee, the Certificate
Administrator, if any, 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); provided that the Trustee shall be entitled to be indemnified
for any such taxes and any related fees and expenses (excluding taxes referred
to in Section 3.13(b)) to the extent set forth in Section 6.6 hereof so long as
the Trustee's failure to exercise reasonable care with respect to the
performance of its duties hereunder or its negligence or willful misconduct was
not the primary cause of the imposition of such taxes. If the Trustee is
indemnified for such taxes pursuant to this Section 3.13(a), such amount shall
be first charged against amounts otherwise distributable to the Holder of the
Class R Certificate, then against amounts otherwise distributable to the Holders
of the Certificates on a pro rata basis. The Trustee is hereby authorized to
retain from amounts otherwise distributable to the Certificateholders sufficient
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funds to reimburse itself for the payment of such tax for which the Trustee is
entitled to indemnification.
(b) The Trustee shall pay on written demand, and shall indemnify
and hold harmless the Trust Fund from and against, any and all taxes imposed on
the Trust Fund (including, for this purpose, any and all interest, penalties,
fines and additions to tax, as well as any and all reasonable counsel fees and
out-of-pocket expenses incurred in contesting the imposition of such tax) to the
extent that any such tax is due to its negligence or willful misconduct.
Section 3.14 Tax Administration. (a) The Trustee is hereby
appointed as attorney-in-fact and agent for the initial Tax Matters Person;
provided, however, that the Trustee may appoint a Certificate Administrator as
attorney-in-fact and agent for the Tax Matters Person. The Trustee may, by
written notice delivered to the Certificate Administrator, revoke the
appointment of the Certificate Administrator as attorney-in-fact and agent for
the Tax Matters Person, in which case the Trustee shall act in such capacity.
(b) The Tax Matters Person, or the Person acting as attorney-
in-fact and agent therefor, shall: (i) prepare and file, or cause to be prepared
and filed, federal tax returns (as well as any other federal and state
information and other returns) using a calendar year as the taxable year when
and as required by the REMIC Provisions; (ii) make (or cause to be made) an
election, on behalf of the REMIC constituted by the Trust Fund to be treated as
a REMIC on the Federal tax return and any applicable state or local returns for
the first taxable year, in accordance with the REMIC Provisions; (iii) prepare
and forward, or cause to be prepared and forwarded, to the Certificateholders
all information reports (including, without limitation, the information required
in connection with the computation of the present value of anticipated excess
inclusions as required by ss. 1.860E-2(a)(5) of the REMIC Provisions) as and
when required to be provided to them in accordance with the REMIC Provisions;
(iv) conduct the affairs of the Trust Fund at all times that the Certificates
are outstanding so as to maintain the status of the REMIC constituted by the
Trust Fund under the REMIC Provisions; and (v) not knowingly or intentionally
take any action or omit to take any action that would cause the termination of
the REMIC status of the REMIC constituted by the Trust Fund. Notwithstanding
anything in this Agreement to the contrary, none of the Depositor, Trustee or
any other Person shall (i) engage in any amendment, waiver, forbearance or other
similar action with respect to any Pooled Security that could cause a
"significant modification" of such Pooled Security within the meaning of the
REMIC Provisions, or (ii) acquire any property other than cash in any sale,
disposition, settlement, or termination of any interest in a Pooled Security,
unless the Depositor and the Trustee shall have received an Opinion of Counsel
with respect to such action or acquisition.
(c) In order to enable the Trustee or the Certificate
Administrator, as applicable, to perform its duties as set forth in this Section
3.14, the Depositor agrees to provide any tax forms, instruments or other
documents related thereto, as the Trustee or the Certificate Administrator, as
applicable, may reasonably request, including, without limitation, any tax
forms, instruments or other documents prepared by the Depositor. In order to
enable the Trustee or the Certificate Administrator, as applicable, to perform
its duties as set forth in this Section 3.14, the Depositor shall use its best
efforts to cause to be delivered to the Trustee or the Certificate
Administrator, as applicable, within ten (10) days after the Closing Date all
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information or data that the Trustee or the Certificate Administrator, as
applicable, 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. Thereafter, the Depositor
shall use its best efforts to provide to the Trustee or the Certificate
Administrator, as applicable, promptly upon request therefor, any such
additional information or data that the Trustee or the Certificate
Administrator, as applicable, may, from time to time, request in order to enable
the Trustee or the Certificate Administrator, as applicable, to perform its
duties as set forth in this Section 3.14.
Section 3.15 Appointment of Paying Agent and Certificate
Administrator. The Trustee may appoint an Eligible Institution to act as a
paying agent (the "Paying Agent") or a certificate administrator (the
"Certificate Administrator"), as the case may be, in order to delegate to such
Eligible Institution any of its duties under this Agreement to administer the
issuance, transfer and exchange of the Certificates, administer payments to
Certificateholders or prepare information related to the Certificates; provided
that the Trustee shall remain primarily responsible for any duties so delegated;
and, provided further that the Trustee shall receive no additional compensation
in connection with such appointment and delegation.
Initially, the Trustee will be the Certificate Administrator and
Paying Agent. If the Trustee ceases to serve as Certificate Administrator or
Paying Agent, the Trustee shall send written notice to all Certificateholders
(i) indicating that it is no longer in such capacity and (ii) setting forth its
replacement, if any, appointed pursuant to this Section 3.15.
ARTICLE IV
THE CERTIFICATES
Section 4.1 The Certificates. (a) The Certificates shall be
substantially in the forms set forth in Exhibits A and B attached hereto, and
shall be executed by the Trustee, authenticated by the Trustee (or any duly
appointed Authenticating Agent) and delivered to or upon the order of the
Depositor upon receipt by the Trustee of the documents specified in Section 2.1.
The Certificates shall be issuable in Authorized Denominations evidencing
Percentage Interests. Certificates shall be executed by manual or facsimile
signature on behalf of the Trust Fund by the Trustee by authorized officers of
the Trustee. Certificates bearing the manual or facsimile signatures of
individuals who were at the time of execution the proper officers of the Trustee
shall bind the Trust Fund, notwithstanding that such individuals or any of them
have ceased to hold such offices prior to the authentication and delivery of
such Certificates or did not hold such offices at the date of such Certificates.
No Certificate shall be entitled to any benefit under this Agreement, or be
valid for any purpose, unless there appears on such Certificate a certificate of
authentication substantially in the form provided for herein executed by the
Trustee or any Authenticating Agent by manual signature, and such certificate
upon any Certificate shall be conclusive evidence, and the only evidence, that
such Certificate has been duly authenticated and delivered hereunder. All
Certificates, shall be dated the date of their authentication.
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(b) The following definitions apply for purposes of this Section
4.1: "Disqualified Organization" means any Person which is not a Permitted
Transferee, but does not include any "Pass-Through Entity" which owns or holds a
Residual Certificate and of which a Disqualified Organization, directly or
indirectly, may be a stockholder, partner or beneficiary; "Pass-Through Entity"
means any regulated investment company, real estate investment trust, common
trust fund, partnership, trust or estate, and any organization to which Section
1381 of the Code applies; "Ownership Interest" means, with respect to any
Residual Certificate, any ownership or security interest in such Residual
Certificate, including any interest in a Residual Certificate as the Holder
thereof and any other interest therein whether direct or indirect, legal or
beneficial, as owner or as pledgee; "Transfer" means any direct or indirect
transfer or sale of, or directly or indirectly transferring or selling any
Ownership Interest in a Residual Certificate; and "Transferee" means any Person
who is acquiring by Transfer any Ownership Interest in a Residual Certificate.
(c) Restrictions on transfers of the Residual Certificates to
Disqualified Organizations are set forth in this Section 4.1(c).
(i) Each Person who has or who acquires any Ownership Interest in
a Residual Certificate shall be deemed by the acceptance or acquisition
of such Ownership Interest to have agreed to be bound by the following
provisions and to have irrevocably authorized the Trustee, the
Certificate Administrator or the Paying Agent under clause (iii)(A)
below to deliver payments to a Person other than such Person and to
negotiate the terms of any mandatory sale under clause (iii)(B) below
and to execute all instruments of transfer and to do all other things
necessary in connection with any such sale. The rights of each Person
acquiring any Ownership Interest in a Residual Certificate are
expressly subject to the following provisions:
(A) Each Person holding or acquiring any Ownership Interest
in a Residual Certificate shall be a Permitted Transferee and
shall promptly notify the Trustee or the Certificate Registrar if
not the same Person as the Trustee of any change or impending
change in its status as a Permitted Transferee.
(B) In connection with any proposed Transfer of any Ownership
Interest in a Residual Certificate to a U.S. Person, the Trustee
or the Certificate Registrar if not the same Person as the Trustee
shall require delivery to it, and shall not register the Transfer
of any Residual Certificate until its receipt of (1) an affidavit
and agreement (a "Transferee Affidavit and Agreement") attached
hereto as Exhibit F from the proposed Transferee, in form and
substance satisfactory to the Depositor, representing and
warranting, among other things, that it is not a Non-U.S. Person,
that such transferee is a Permitted Transferee, that it is not
acquiring its Ownership Interest in the Residual Certificate that
is the subject of the proposed Transfer as a nominee, trustee or
agent for any Person who is not a Permitted Transferee, that for
so long as it retains its Ownership Interest in a Residual
Certificate, it will endeavor to remain a Permitted Transferee,
and that it has reviewed the provisions of this Section 4.1(c) and
agrees to be bound by them, and (2) a certificate, attached hereto
as Exhibit E, from the Holder wishing to transfer a Residual
Certificate, in form and substance satisfactory to the
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Depositor, representing and warranting, among other things, that
no purpose of the proposed Transfer is to allow such Holder to
impede the assessment or collection of tax.
(C) Notwithstanding the delivery of a Transferee Affidavit
and Agreement by a proposed Transferee under clause (B) above, if
the Trustee or the Certificate Registrar if not the same Person as
the Trustee has actual knowledge that the proposed Transferee is
not a Permitted Transferee, no Transfer of an Ownership Interest
in a Residual Certificate to such proposed Transferee shall be
effected.
(D) Each Person holding or acquiring any Ownership Interest
in a Residual Certificate agrees by holding or acquiring such
Ownership Interest (i) to require a Transferee Affidavit and
Agreement from any other Person to whom such Person attempts to
transfer its Ownership Interest and to provide a certificate to
the Trustee (or the Certificate Registrar if not the same Person
as the Trustee) in the form attached hereto as Exhibit F; and (ii)
to provide a certificate to the Trustee (or the Certificate
Registrar if not the same Person as the Trustee) in the form
attached hereto as Exhibit E.
(ii) The Trustee or the Certificate Registrar if not the same
Person as the Trustee shall register the Transfer of any Residual
Certificate only if it shall have received the Transferee Affidavit and
Agreement, a certificate of the Holder requesting such transfer in the
form attached hereto as Exhibit E and all of such other documents as
shall have been reasonably required by the Trustee or the Certificate
Registrar if not the same Person as the Trustee as a condition to such
registration.
(iii) (A) If any Disqualified Organization shall become a Holder
of a Residual Certificate, then the last preceding Permitted Transferee
shall be restored, to the extent permitted by law, to all rights and
obligations as Holder thereof retroactive to the date of registration
of such Transfer of such Residual Certificate. If any Non-U.S. Person
shall become a Holder of a Residual Certificate, then the last
preceding Holder which is a U.S. Person shall be restored, to the
extent permitted by law, to all rights and obligations as Holder
thereof retroactive to the date of registration of the Transfer to such
Non-U.S. Person of such Residual Certificate. If a transfer of a
Residual Certificate is disregarded pursuant to the provisions of
Treasury Regulations Section 1.860E-1 or Section 1.860G-3, then the
last preceding Permitted Transferee shall be restored, to the extent
permitted by law, to all rights and obligations as Holder thereof
retroactive to the date of registration of such Transfer of such
Residual Certificate. The Trustee, the Certificate Administrator, the
Certificate Registrar and the Paying Agent shall be under no liability
to any Person for any registration of Transfer of a Residual
Certificate that is in fact not permitted by this Section 4.1(c) or for
making any payments due on such Certificate to the Holder thereof or
for taking any other action with respect to such Holder under the
provisions of this Agreement.
(B) If any purported Transferee shall become a Holder of a
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Residual Certificate in violation of the restrictions in this
Section 4.1(c) and to the extent that the retroactive restoration
of the rights of the Holder of such Residual Certificate as
described in clause (iii)(A) above shall be invalid, illegal or
unenforceable, then the Depositor shall have the right, without
notice to the Holder or any prior Holder of such Residual
Certificate, to sell such Residual Certificate to a purchaser
selected by the Depositor on such terms as the Depositor may
choose. Such purported Transferee shall promptly endorse and
deliver the Residual Certificate in accordance with the
instructions of the Depositor. Such purchaser may be the Depositor
itself or any affiliate of the Depositor. The proceeds of such
sale, net of the commissions (which may include commissions
payable to the Depositor or its affiliates), expenses and taxes
due, if any, shall be remitted by the Depositor to such purported
Transferee. The terms and conditions of any sale under this clause
(iii)(B) shall be determined in the sole discretion of the
Depositor, and the Depositor shall not be liable to any Person
having an Ownership Interest in a Residual Certificate as a result
of its exercise of such discretion.
(iv) The Depositor, on behalf of the Trustee, shall make
available, upon written request from the Trustee or the Certificate
Administrator, all information necessary to compute any tax imposed (A)
as a result of the Transfer of an Ownership Interest in a Residual
Certificate to any Person who is not a Permitted Transferee, including
the information regarding "excess inclusions" of such Residual
Certificate required to be provided to the Internal Revenue Service and
certain Persons as described in Treasury Regulation Section 1.860D-l
(b)(5), and (B) as a result of any regulated investment company, real
estate investment trust, common trust fund, partnership, trust, estate
or organizations described in Section 1381 of the Code having as among
its record holders at any time any Person who is not a Permitted
Transferee. Reasonable compensation for providing such information may
be required by the Depositor from such Person.
(v) The provisions of this Section 4.1 set forth prior to this
Section 4.1(c)(v) may be modified, added to or eliminated, provided
that there shall have been delivered to the Trustee and the Certificate
Administrator the following:
(A) written notification from each Rating Agency to the
effect that the modification, addition to or elimination of such
provisions will not cause such Rating Agency to downgrade its
then-current Ratings of the Certificates; and
(B) an Opinion of Counsel, in form and substance satisfactory
to the Depositor (as evidenced by a certificate of the Depositor),
to the effect that such modification, addition to or absence of
such provisions will not cause the Trust Fund to cease to qualify
as a REMIC and will not create a risk that (1) the Trust Fund may
be subject to an entity-level tax caused by the Transfer of any
Residual Certificate to a Person which is not a Permitted
Transferee or (2) a Certificateholder or another Person will be
subject to a REMIC-related tax caused by the Transfer of a
Residual Certificate to a Person which is not a Permitted
Transferee.
(vi) The following legend shall appear on all Residual
Certificates:
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ANY RESALE, TRANSFER OR OTHER DISPOSITION OF THIS CERTIFICATE MAY
BE MADE ONLY IF THE PROPOSED TRANSFEREE PROVIDES A TRANSFEREE
AFFIDAVIT AND AGREEMENT TO THE DEPOSITOR, THE TRUSTEE AND THE
CERTIFICATE REGISTRAR THAT (1) SUCH TRANSFEREE IS NOT EITHER (A)
THE UNITED STATES, ANY STATE OR POLITICAL SUBDIVISION THEREOF, ANY
FOREIGN GOVERNMENT, ANY INTERNATIONAL ORGANIZATION, OR ANY AGENCY
OR INSTRUMENTALITY OF ANY OF THE FOREGOING, (B) ANY ORGANIZATION
(OTHER THAN A COOPERATIVE DESCRIBED IN SECTION 521 OF THE CODE)
WHICH IS EXEMPT FROM THE TAX IMPOSED BY CHAPTER I OF THE CODE
UNLESS SUCH ORGANIZATION IS SUBJECT TO THE TAX IMPOSED BY SECTION
511 OF THE CODE, (C) ANY ORGANIZATION DESCRIBED IN SECTION
1381(a)(2)(C) OF THE CODE (ANY SUCH PERSON DESCRIBED IN THE
FOREGOING CLAUSES (A), (B), OR (C) BEING HEREINAFTER REFERRED TO
AS A "DISQUALIFIED ORGANIZATION"), OR (D) AN AGENT OF A
DISQUALIFIED ORGANIZATION AND (2) NO PURPOSE OF SUCH TRANSFER IS
TO ENABLE THE TRANSFEROR TO IMPEDE THE ASSESSMENT OR COLLECTION OF
TAX. SUCH AFFIDAVIT SHALL INCLUDE CERTAIN REPRESENTATIONS AS TO
THE FINANCIAL CONDITION OF THE PROPOSED TRANSFEREE.
NOTWITHSTANDING THE REGISTRATION IN THE CERTIFICATE REGISTER OF
ANY TRANSFER, SALE OR OTHER DISPOSITION OF THIS CLASS R
CERTIFICATE TO A DISQUALIFIED ORGANIZATION OR AN AGENT OF A
DISQUALIFIED ORGANIZATION, SUCH REGISTRATION SHALL BE DEEMED TO BE
OF NO LEGAL FORCE OR EFFECT WHATSOEVER AND SUCH PERSON SHALL NOT
BE DEEMED TO BE A CERTIFICATEHOLDER FOR ANY PURPOSE HEREUNDER,
INCLUDING, BUT NOT LIMITED TO, THE RECEIPT OF DISTRIBUTIONS ON
THIS CERTIFICATE. EACH HOLDER OF THE CLASS R CERTIFICATE BY
ACCEPTANCE OF THIS CERTIFICATE SHALL BE DEEMED TO HAVE CONSENTED
TO THE PROVISIONS OF THIS PARAGRAPH.
(vii) The Holder of the Class R Certificate issued hereunder,
while not a Disqualified Organization, is the Tax Matters Person.
(d) (i) No Class B or Class R Certificate may be acquired directly
or indirectly by an employee benefit plan (within the meaning of Section 3 (3)
of ERISA) subject to the prohibited transaction provisions of ERISA ("Plan"), or
a plan (within the meaning of Section 4975(e)(1) of the Code subject to Section
4975 of the Code (also a "Plan"). By acquiring a Certificate, the holder will be
required to represent that it is not a Plan and is not using the assets of a
Plan to effect such purchase.
(ii) If any proposed Transferee shall become a Holder of a Class B
of Class R Certificate in violation of these provisions, then the last
preceding permitted transferee shall be restored, to the extent
permitted by law, to all rights as holder thereof retroactive to the
date of registration of such transfer of such Certificate. The Trustee
shall be under
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no liability to any person for any registration or transfer of any such
Class B or Class R Certificate that is not permitted or for making any
payments due on such Certificate to the Holder or taking any other
action with respect to such Holder under this Agreement. Any proposed
Transferee who becomes a Holder of any such Class B or Class R
Certificate shall agree to indemnify the Trustee, the servicers and the
trustees with respect to the Pooled Securities against any loss, damage
or penalty incurred as a result of the transfer of any such Class B or
Class R Certificate to such purposed transferee in violation of such
restrictions.
(iii) No Class B or Class R Certificate may be acquired directly
or indirectly by any Person who is not a "qualified institutional
buyer" within the meaning of Rule 144A under the Securities Act.
(iv) The Trustee or the Certificate Registrar if not the same
Person as the Trustee shall register the Transfer of the Class B
Certificate only if it shall have received a Class B Transferee
Certificate and all of such other documents as shall have been
reasonably required by the Trustee or the Certificate Registrar if not
the same Person as the Trustee as a condition to such registration.
(e) None of the Trustee, the Certificate Administrator, the
Certificate Registrar or the Paying Agent shall have any liability to the Trust
Fund arising from a registration or transfer of a Certificate in reliance upon a
certification, Officer's Certificate, affidavit, ruling or Opinion of Counsel
described in this Section 4.1.
Section 4.2 Certificates Issuable in Classes, Distributions of
Principal and Interest, Authorized Denominations. The aggregate principal amount
of Certificates that may be authenticated and delivered under this Agreement is
limited to the aggregate Pooled Security Cut-Off Date Principal Balance, as
specified in the Preliminary Statement to this Agreement, except for
Certificates authenticated and delivered upon registration of transfer of, or in
exchange for, or in lieu of, other Certificates pursuant to Section 4.3. Such
aggregate principal amount shall be allocated among one or more Classes having
designations, types of interests, per annum Remittance Rates, initial Class
Principal Balances and Final Scheduled Distribution Dates as specified in the
Preliminary Statement to this Agreement. Certificates shall be issued in
Authorized Denominations.
Section 4.3 Registration of Transfer and Exchange of Certificates.
The Trustee shall cause to be maintained at one of its offices or at its
designated Certificate Registrar, a Certificate Register in which there shall be
recorded the name and address of each Certificateholder. Subject to such
reasonable rules and regulations as the Trustee may prescribe, the Certificate
Register shall be amended from time to time by the Trustee or its agent to
reflect notice of any changes received by the Trustee or its agent pursuant to
Section 8.4. The Trustee hereby appoints itself as the initial Certificate
Registrar. The Trustee may appoint an Eligible Institution to act as its agent
in order to delegate to such Eligible Institution its duties as Certificate
Registrar under this Agreement.
Upon surrender for registration of transfer of any Certificate to
the Trustee at its Corporate Trust Office, or such other address or agency as
may hereafter be provided to the
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Certificate Administrator, if any, in writing by the Trustee, the Trustee shall
execute, and the Trustee or any Authenticating Agent shall authenticate and
deliver, in the name of the designated transferee or transferees, one or more
new Certificates of Authorized Denominations of like Percentage Interest. At the
option of the Certificateholders, Certificates may be exchanged for other
Certificates in Authorized Denominations of like Percentage Interest, upon
surrender of the Certificates to be exchanged at any such office or agency.
Whenever any Certificates are so surrendered for exchange, the Trustee shall
execute, and the Trustee, or any Authenticating Agent, shall authenticate and
deliver, the Certificates which the Certificateholder making the exchange is
entitled to receive. Every Certificate presented or surrendered for transfer
shall (if so required by the Trustee or any Authenticating Agent) be duly
endorsed by or be accompanied by a written instrument of transfer in form
satisfactory to the Trustee or any Authenticating Agent and duly executed by,
the Holder thereof or such Holder's attorney duly authorized in writing, and, in
addition, in the case of any Class B Certificate, be accompanied by a
certificate in the form set forth in Exhibit A hereto duly completed by the
transferor thereof.
A reasonable service charge may be made for any such exchange or
transfer of Certificates, and the Trustee or an Authenticating Agent may require
payment of a sum sufficient to cover any tax or governmental charge that may be
imposed in connection with any exchange or transfer of Certificates.
All Certificates surrendered for exchange or transfer shall be
cancelled by the Trustee or any Authenticating Agent.
Section 4.4 Mutilated, Destroyed, Lost or Stolen Certificates. If
(i) any mutilated Certificate is surrendered to the Trustee or any
Authenticating Agent, or (ii) the Trustee or any Authenticating Agent receives
evidence to their satisfaction of the destruction, loss or theft of any
Certificate, and there is delivered to the Trustee or any Authenticating Agent
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 or any Authenticating
Agent that such Certificate has been acquired by a bona fide purchaser, the
Trustee shall execute and the Trustee or any Authenticating Agent shall
authenticate and deliver, in exchange for or in lieu of any such mutilated,
destroyed, lost or stolen Certificate, a new Certificate of like Percentage
Interest. Upon the issuance of any new Certificate under this Section 4.4, the
Trustee or any Authenticating Agent 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
or any Authenticating Agent) connected therewith. Any replacement Certificate
issued pursuant to this Section 4.4 shall constitute complete and indefeasible
evidence of ownership in the Trust Fund, as if originally issued, whether or not
the lost or stolen Certificate shall be found at any time.
Section 4.5 Persons Deemed Owners. The Depositor, the Certificate
Administrator, the Trustee and any agent of any of them may treat the Person in
whose name any Certificate is registered as the owner of such Certificate for
the purpose of receiving distributions pursuant to Section 3.5 and for all other
purposes whatsoever, and neither the Depositor, the Certificate Administrator,
if any, the Trustee, the Certificate Registrar nor any agent of the Depositor,
the Certificate Administrator, if any, or the Trustee shall be affected by
notice to the contrary.
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Section 4.6 Temporary Certificates. Upon the initial issuance of
the Certificates, the Trustee may execute, and the Trustee or any Authenticating
Agent shall authenticate and deliver, temporary Certificates which are printed,
lithographed, typewritten or otherwise produced, in any Authorized Denomination,
of the tenor of the definitive Certificates in lieu of which they are issued and
with such variations in form from the forms of the Certificates set forth as
Exhibits A and B hereto as the Trustee's officers executing such Certificates
may determine, as evidenced by their execution of the Certificates.
Notwithstanding the foregoing, the Certificates may remain in the form set forth
in this Section.
If temporary Certificates are issued, the Trustee shall cause
definitive Certificates to be prepared within ten Business Days of the Closing
Date or as soon as practicable thereafter. After preparation of definitive
Certificates, the temporary Certificates shall be exchangeable for definitive
Certificates upon surrender of the temporary Certificates at the office or
agency of the Trustee to be maintained as provided in Section 4.10 hereof,
without charge to the Holder. Any tax or governmental charge that may be imposed
in connection with any such exchange shall be borne by the Depositor. Upon
surrender for cancellation of any one or more temporary Certificates, the
Trustee shall execute and the Trustee or any Authenticating Agent shall
authenticate and deliver in exchange therefor a like principal amount of
definitive Certificates of Authorized Denominations. Until so exchanged, the
temporary Certificates shall in all respects be entitled to the same benefits
under this Agreement as definitive Certificates.
Section 4.7 Book-Entry for Book-Entry Certificates.
Notwithstanding the foregoing, the Book-Entry Certificates, upon original
issuance, shall be issued in the form of one or more typewritten Certificates of
Authorized Denomination representing the Book-Entry Certificates, to be
delivered to DTC, the initial Clearing Agency, by, or on behalf of, the
Depositor. The Book-Entry Certificates shall initially be registered on the
Certificate Register in the name of Cede & Co., the nominee of DTC, as the
initial Clearing Agency, and no Beneficial Holder shall receive a definitive
certificate representing such Beneficial Holder's interest in any Class of
Book-Entry Certificate, except as provided above and in Section 4.9. Each
Book-Entry Certificate shall bear the following legend:
Unless this Certificate is presented by an authorized
representative of The Depository Trust Company, a New York corporation ("DTC"),
to the Trustee or its agent for registration of transfer, exchange, or payment,
and any Certificate issued is registered in the name of Cede & Co. or 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.
Unless and until definitive, fully registered Book-Entry
Certificates (the "Definitive Certificates") have been issued to the Beneficial
Holders pursuant to Section 4.9:
(a) the provisions of this Section 4.7 shall be in full force and
effect with respect to the Book-Entry Certificates;
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(b) the Certificate Administrator, if any, and the Trustee may
deal with the Clearing Agency for all purposes with respect to the Book-Entry
Certificates (including the making of distributions on the Book-Entry
Certificates) as the sole Certificateholder;
(c) to the extent that the provisions of this Section 4.7 conflict
with any other provisions of this Agreement, the provisions of this Section 4.7
shall control; and
(d) the rights of the Beneficial Holders shall be exercised only
through the Clearing Agency and the DTC Participants and shall be limited to
those established by law and agreements between such Beneficial Holders and the
Clearing Agency and/or the DTC Participants. Pursuant to the Depository
Agreement, unless and until Definitive Certificates are issued pursuant to
Section 4.9, the initial Clearing Agency will make book-entry transfers among
the DTC Participants and receive and transmit distributions of principal and
interest on the related Class of Book-Entry Certificates to such DTC
Participants.
For purposes of any provision of this Agreement requiring or
permitting actions with the consent of, or at the direction of, Holders of
Book-Entry Certificates evidencing a specified Percentage Interest, such
direction or consent may be given by the Clearing Agency at the direction of
Beneficial Holders owning Book-Entry Certificates evidencing the requisite
Percentage Interest represented by the Book-Entry Certificates. The Clearing
Agency may take conflicting actions with respect to the Book-Entry Certificates
to the extent that such actions are taken on behalf of the Beneficial Holders.
Section 4.8 Notices to Clearing Agency. Whenever notice or other
communication to the Certificateholders is required under this Agreement, unless
and until Definitive Certificates shall have been issued to the related
Certificateholders pursuant to Section 4.9, the Trustee shall give all such
notices and communications specified herein to be given to Holders of the
Book-Entry Certificates to the Clearing Agency which shall give such notices and
communications to the related DTC Participants in accordance with its applicable
rules, regulations and procedures.
Section 4.9 Definitive Certificates. If (a) the Clearing Agency
notifies the Depositor and the Certificate Administrator, if any, or the Trustee
that it is no longer willing or able to discharge properly its responsibilities
under the Depository Agreement with respect to the Book-Entry Certificates and
the Trustee or the Certificate Administrator is unable to locate a qualified
successor, (b) the Depositor, at its option, advises the Certificate
Administrator, if any, or the Trustee in writing that it elects to terminate the
book-entry system with respect to the Book-Entry Certificates through the
Clearing Agency or (c) Certificateholders holding Book-Entry Certificates
evidencing Percentage Interests aggregating not less than 51% of the aggregate
Class Principal Balance of such Certificates advise the Certificate
Administrator, if any, or the Trustee and the Clearing Agency through DTC
Participants in writing that the continuation of a book-entry system with
respect to the Book-Entry Certificates through the Clearing Agency is no longer
in the best interests of the Certificateholders with respect to such
Certificates, the Trustee shall notify or cause to be notified all
Certificateholders of Book-Entry Certificates of the occurrence of any such
event and of the availability of Definitive Certificates. Upon surrender to the
Trustee of the Book-Entry Certificates by the Clearing Agency, accompanied by
registration instructions from the Clearing Agency for registration, the Trustee
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shall execute and the Trustee or any Authenticating Agent shall authenticate and
deliver the Definitive Certificates. Neither the Depositor, the Certificate
Administrator, if any, the Authenticating Agent nor the Trustee shall be liable
for any delay in delivery of such instructions and may conclusively rely on, and
shall be protected in relying on, such instructions. Upon the issuance of
Definitive Certificates for all of the Certificates all references herein to
obligations imposed upon or to be performed by the Clearing Agency shall be
deemed to be imposed upon and performed by the Trustee, the Certificate
Administrator, if any, and the Trustee, the Certificate Administrator, the
Certificate Registrar and the Paying Agent shall recognize the Holders of
Definitive Certificates as Certificateholders hereunder.
Section 4.10 Office for Transfer of Certificates. The Trustee
shall maintain, an office or agency where Certificates may be surrendered for
registration of transfer or exchange. The Trustee's Corporate Trust Office is
initially designated for said purposes.
ARTICLE V
THE DEPOSITOR
Section 5.1 Liability of the Depositor. The Depositor shall be
liable in accordance herewith only to the extent of the obligations specifically
imposed by this Agreement and undertaken hereunder by the Depositor herein.
Section 5.2 Merger or Consolidation of the Depositor. Subject to
the following paragraph, the Depositor will keep in full effect its existence,
rights and franchises as a corporation, under the laws of the jurisdiction of
its incorporation, and will obtain and preserve its qualification to do business
as a foreign corporation in each jurisdiction in which such qualification is or
shall be necessary to protect the validity and enforceability of this Agreement,
the Certificates or any of the Pooled Securities and to perform its respective
duties under this Agreement.
The Depositor may be merged or consolidated with or into any
Person, or transfer all or substantially all of its assets to any Person, in
which case any Person resulting from any merger or consolidation to which the
Depositor shall be a party, or any Person succeeding to the business of the
Depositor, shall be the successor of the Depositor 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.
Section 5.3 Limitation on Liability of the Depositor and Others.
Neither the Depositor nor any of the directors, officers, employees or agents of
the Depositor shall be under any liability to the Trust Fund or the
Certificateholders for any action taken or for refraining from the taking of any
action in good faith pursuant to this Agreement, or for errors in judgment;
provided, however, that this provision shall not protect any director, officer,
employee or agent of the Depositor against any liability which would otherwise
be imposed by reason of willful misfeasance, bad faith or gross negligence in
the performance of duties or by reason of reckless disregard of obligations and
duties hereunder, nor shall this provision protect the Depositor against any
liability that would otherwise be imposed by reason of negligence in the
performance
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of duties hereunder. The Depositor and any director, officer, employee or agent
of the Depositor 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 and any director, officer, employee or agent of the
Depositor shall be indemnified by the Trust Fund and held harmless against any
loss, liability or expense incurred in connection with any legal action relating
to this Agreement or the Certificates, other than any loss, liability or
expense, in the case of the Depositor and any director, officer, employee or
agent of the Depositor, 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 or, in the case of the Depositor,
as Depositor, incurred by reason of negligence in the performance of any duties
hereunder. The Depositor shall not be under any obligation to appear in,
prosecute or defend any legal action which is not incidental to its duties under
this Agreement and which in its opinion may involve it in any expense or
liability; provided, however, that the Depositor may in its discretion undertake
any such action which it may deem necessary or desirable in respect of this
Agreement and the rights and duties of the parties hereto and the interests of
the Certificateholders hereunder. In such event, the legal expenses and costs of
such action and any liability resulting therefrom shall be expenses, costs and
liabilities of the Trust Fund, and the Depositor shall be entitled to be
reimbursed therefor out of the Certificate Account.
ARTICLE VI
CONCERNING THE TRUSTEE
Section 6.1 Duties of Trustee. (a) The Trustee undertakes to
perform such duties and only such duties as are specifically set forth in this
Agreement. Any permissive right of the Trustee enumerated in this Agreement
shall not be construed as a duty. The Trustee shall, in the performance of its
duties hereunder and in the exercise of the rights and powers vested in it by
this Agreement, use the same degree of skill and care as a prudent person would
use under the circumstances in the conduct of his own affairs.
(b) Subject to Sections 6.2(i), 6.3 and 6.4, the Trustee, upon
receipt of all resolutions, certificates, statements, opinions, reports,
documents, orders or other instruments furnished to the Trustee which 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 resolution, certificate, statement, opinion,
report, document, order, Pooled Security Distribution Date Statement or other
instrument furnished by any party hereunder. If any such instrument is found not
to conform to the requirements of this Agreement in a material manner, the
Trustee shall take action as it deems appropriate to have the instrument
corrected, and if the instrument is not corrected to the Trustee's reasonable
satisfaction, the Trustee will provide notice thereof to the Certificateholders
and each Rating Agency.
(c) 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:
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(i) The duties and obligations of the Trustee shall be determined
solely by the express provisions of this Agreement, the Trustee shall
not be liable except for the performance of such duties and obligations
as are specifically set forth in this Agreement, no implied covenants
or obligations shall be read into this Agreement against the Trustee
and, in the absence of bad faith on the part of the Trustee, the
Trustee may conclusively rely, as to the truth of the statements and
the correctness of the opinions expressed therein, upon any
certificates or opinions furnished to the Trustee and conforming to the
requirements of this Agreement;
(ii) The Trustee shall not be personally liable with respect to
any action taken, suffered or omitted to be taken by it in good faith
in accordance with this Agreement or at the direction of
Certificateholders holding Certificates which have an aggregate
Certificate Principal Balance aggregating not less than 25% of the
aggregate Certificate Principal Balance of all Certificates relating to
the time, method and place of conducting any proceeding for any remedy
available to the Trustee, or exercising or omitting to exercise any
trust or power conferred upon the Trustee, under this Agreement;
(iii) The Trustee shall not be liable in its individual capacity
for any error of judgment made in good faith by any Responsible
Officer, unless it shall be proved that the Trustee or such Responsible
Officer was negligent in ascertaining the pertinent facts;
(iv) The Trustee shall not be liable for any act or omission of
the Depositor or for any but its own negligent or misfeasant acts or
omissions in accordance with the provisions of this Agreement;
(v) The Trustee shall not be deemed to take notice or be deemed to
have knowledge of any matter unless written notice thereof, referring
to the Certificates, the Depositor, the Trust Fund or this Agreement is
received by a Responsible Officer of the Trustee at its Corporate Trust
Office; and
(vi) Subject to the other provisions of this Agreement and without
limiting the generality of this Section 6.1, the Trustee shall have no
duty (A) to see to any recording, filing, or depositing of this
Agreement or any agreement referred to herein or any financing
statement or continuation statement evidencing a security interest, or
to see to the maintenance of any such recording or filing or depositing
or to any rerecording, refiling or redepositing of any thereof, (B) to
see to any insurance, and (C) to see to the payment or discharge of any
tax, assessment, or other governmental charge or any lien or
encumbrance of any kind owing with respect to, assessed or levied
against, any part of the Trust Fund other than from funds available in
the Certificate Account.
(d) None of the provisions contained in this Agreement shall
require the Trustee to expend or risk its own funds or otherwise incur financial
liability in the performance of any of its duties as Trustee hereunder or in the
exercise of any of its rights or powers if there is reasonable ground for
believing that repayment of such funds or adequate indemnity against such risk
or liability is not reasonably assured to it; provided, however, that in any
case where the Trustee believes that has a duty to act but for this Section
6.1(d), the Trustee shall give prompt written notice to each Certificateholder.
Each such notice shall specifically describe the facts
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giving rise to such duty to act and shall specify the Trustee's reliance on this
Section 6.1(d) in failing to act hereunder.
Section 6.2 Certain Matters Affecting Trustee. Except as otherwise
provided in Section 6.1:
(i) Before acting or refraining from acting the Trustee may
request or require an Officer's Certificate; the Trustee may rely and
shall be protected in acting or refraining from acting upon any
resolution, Officer's Certificate, opinion of counsel, certificate of
auditors or any other certificate, statement, instrument, opinion,
report, notice, request, consent, order, appraisal, bond or other paper
or document believed by it to be genuine and to have been signed or
presented by the proper party or parties;
(ii) The Trustee may consult with counsel, and any advice or
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 advice or Opinion
of Counsel;
(iii) The Trustee shall not be personally 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 right of the Trustee to perform any discretionary act
enumerated in this Agreement shall not be construed as a duty, and the
Trustee shall not be answerable for other than its negligence or
willful misconduct in the performance of such act;
(v) Trustee shall not be required to give any bond or surety in
respect of the execution of the Trust Fund created hereby or the powers
granted hereunder; and
(vi) The Trustee may execute any of the trusts or powers hereunder
or perform any duties hereunder either directly or by or through
agents, attorneys or custodians, and the Trustee shall not be
responsible for any misconduct or negligence on the part of any such
agent, attorney or custodian appointed by the Trustee with care. Any
such agents, attorneys or custodians shall be entitled to all
indemnities and protection afforded to the Trustee. Any designee of the
Trustee shall be considered its "agent" hereunder whether performing it
as an independent contractor or otherwise.
Section 6.3 Trustee Not Required to Make Investigation. The
Trustee shall not be bound to ascertain or inquire as to the performance or
observance of any of the terms, conditions, covenants or agreements herein or to
make any investigation into the facts or matters stated in any resolution,
certificate, statement, instrument, opinion, report, notice, request, consent,
order, approval, bond, Pooled Security Distribution Date Statement or other
paper or document, unless requested in writing so to do by Holders of
Certificates having a Percentage Interest not less than 51% of the Trust Fund;
provided, however, that if the payment within a reasonable time to the Trustee
of the costs, expenses or liabilities likely to be incurred by it in the making
of such investigation is, in the opinion of the Trustee, not reasonably assured
to the Trustee by the security afforded to it by the terms of this Agreement,
the Trustee may require reasonable indemnity against such expense or liability
as a condition to such proceeding. The
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reasonable expense of every such examination shall be paid by the Depositor or,
if paid by the Trustee, shall be repaid by the Depositor upon demand.
Section 6.4 Trustee Not Liable for Certificates or Pooled
Securities. The recitals contained herein and in the Certificates (other than
the certificate of authentication on the Certificates) shall be taken as the
statements of the Depositor, and the Trustee assumes no responsibility for the
correctness of the same. The Trustee makes no representations or warranties as
to the validity or sufficiency of this Agreement or of the Certificates or of
any Pooled Security, Pooled Security Distribution Date Statement or related
document. The Trustee shall not be accountable for the use or application by the
Depositor of any of the Certificates or of the proceeds of such Certificates.
The Trustee shall not be responsible for the legality or validity of this
Agreement or the validity, priority, perfection or sufficiency of the security
for the Certificates issued or intended to be issued hereunder. The Trustee
shall have no responsibility for filing any financing or continuation statement
in any public office at any time or to otherwise perfect or maintain the
perfection of any security interest or lien granted to it hereunder or to record
this Agreement.
Neither the Trustee nor any of the directors, officers, employees
or agents of the Trustee shall be under any liability to the Trust Fund or the
Certificateholders for any action taken or for refraining from the taking of any
action in good faith pursuant to this Agreement; provided, however, that this
provision shall not protect the Trustee or any such person against any liability
which would otherwise be imposed by reason of willful misfeasance, bad faith or
negligence in the performance of duties.
Section 6.5 Trustee May Own Certificates. The Trustee and any
agent of the Trustee in its individual or any other capacity may become the
owner of or a pledgee of the Certificates with the same rights it would have if
it were not Trustee or such agent, and may otherwise deal with the parties
hereto.
Section 6.6 Indemnification of Trustee. Subject to the provisions
of this paragraph, the Trustee and any director, officer, employee or agent of
the Trustee shall be entitled to be indemnified and held harmless by the Trust
against any loss, liability or expense (including, without limitation, costs and
expenses of litigation, and of investigation, counsel fees and expenses,
damages, judgments, amounts paid in settlement and out-of-pocket expenses)
arising out of, or incurred in connection with, the exercise and performance of
any of the powers and duties of the Trustee hereunder; provided that neither the
Trustee nor any of the other above specified Persons shall be entitled to
indemnification pursuant to this Section 6.6 for (i) allocable overhead, (ii)
expenses or disbursements incurred or made by or on behalf of the Trustee in the
normal course of the Trustee's performing routine administrative duties in
accordance with any of the provisions hereof, (iii) any expense or liability
specifically required to be borne thereby pursuant to the terms hereof, or (iv)
any loss, liability or expense incurred by reason of willful misfeasance, bad
faith or negligence in the performance of the Trustee's obligations and duties
hereunder, or by reason of reckless disregard of such obligations or duties, or
as may arise from a breach of any representation, warranty or covenant of the
Trustee made herein.
The provisions of this Section 6.6 shall survive any resignation
or removal of the Trustee and appointment of a successor trustee and the
termination of this Agreement.
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Section 6.7 Eligibility Requirements for Trustee. The Trustee
hereunder shall at all times be a corporation or association organized and doing
business under the laws of any state of 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 and subject to supervision or examination by
federal or state authority. 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 6.7 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 6.7, the
Trustee shall resign immediately in the manner and with the effect specified in
Section 6.8.
Section 6.8 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. Such notice shall also be
furnished to each Rating Agency. Upon receiving such notice of resignation, the
Depositor shall promptly appoint a successor trustee by written instrument, in
duplicate, one copy of which instrument shall be delivered to the resigning
Trustee and one copy to the successor trustee. The successor trustee shall be
acceptable to the Class R Certificateholder and shall be rated at least A3 by
Moodys. If no successor trustee shall have been so appointed and have accepted
appointment within 30 days after the giving of such notice of resignation, the
resigning Trustee may petition any court of competent jurisdiction for the
appointment of a successor trustee at the expense of the Depositor.
If at any time the Trustee shall cease to be eligible in
accordance with the provisions of Section 6.7 and shall fail to resign after
written request for the Trustee's resignation by the Depositor, or if at any
time the Trustee shall become incapable of acting, or shall be adjudged bankrupt
or insolvent, or a receiver of the Trustee or of its property shall be
appointed, or any public officer shall take charge or control of the Trustee or
of its property or affairs for the purpose of rehabilitation, conservation or
liquidation, then, with or without cause, the Depositor may remove the Trustee
and appoint a successor trustee by written instrument, in duplicate, one copy of
which instrument shall be delivered to the Trustee so removed and one copy to
the successor trustee.
The Holders of Certificates having a Percentage Interest
aggregating not less than 51% of the Trust Fund may at any time remove the
Trustee and appoint a successor trustee by written instrument or instruments, in
triplicate, signed by such holders or their attorneys-in-fact duly authorized,
one complete set of which instrument or instruments shall be delivered to the
Depositor, one complete set to the Trustee so removed and one complete set to
the successor trustee so appointed.
Any resignation or removal of the Trustee and appointment of a
successor trustee pursuant to any of the provisions of this Section 6.8 shall
become effective only upon acceptance of appointment by the successor trustee as
provided in Section 6.9.
Section 6.9 Successor Trustee. Any successor trustee appointed as
provided in Section 6.8 shall execute, acknowledge and deliver to the Depositor
and to its predecessor trustee an instrument accepting such appointment
hereunder, and thereupon the resignation or removal
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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
like effect as if originally named as trustee herein. The predecessor trustee
shall deliver or cause to be delivered to the successor trustee all Pooled
Securities and related documents and statements held by it hereunder (other than
any Pooled Securities at the time held by the Custodian, if it shall agree to
become the agent of any successor trustee hereunder), and the Depositor 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 6.9 unless at the time of such acceptance such successor trustee shall
be eligible under the provisions of Section 6.7.
Upon acceptance of appointment by a successor trustee as provided
in this Section 6.9, the successor trustee shall mail notice of the succession
of such trustee hereunder to all holders of Certificates at their addresses as
shown in the Certificate Register and to the Rating Agency.
Section 6.10 Merger or Consolidation of Trustee. Any Person into
which the Trustee may be merged or converted or with which it may be
consolidated, or any Person resulting from any merger, conversion or
consolidation to which the Trustee shall be a party, or any Person succeeding to
all or substantially all of the corporate trust business of the Trustee, shall
be the successor of the Trustee hereunder, provided, that such Person shall be
eligible under the provisions of Section 6.7, without the execution or filing of
any paper or any further act on the part of any of the parties hereto, anything
herein to the contrary notwithstanding.
Section 6.11 Appointment of Co-Trustee or Separate Trustee.
Notwithstanding any other provisions hereof, at any time, for the purpose of
meeting any legal requirements of any jurisdiction in which any part of the
Trust Fund or property securing the same may at the time be located, the Trustee
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, such title to the Trust Fund, or any part thereof, and, subject to the
other provisions of this Section 6.11, such powers, duties, obligations, rights
and trusts as the Trustee may consider necessary or desirable. Each co-trustee
or separate trustee hereunder shall not be required to meet the terms of
eligibility as a successor trustee under Section 6.7 hereunder and no notice to
holders of Certificates of the appointment of co-trustee(s) or separate
trustee(s) shall be required under Section 6.9 hereof.
In the case of any appointment of a co-trustee or separate trustee
pursuant to this Section 6.11, all rights, powers, duties and obligations
conferred or imposed upon the Trustee shall be conferred or imposed upon and
exercised or performed by the Trustee and such separate trustee or co-trustee
jointly, except to the extent that under any law of any jurisdiction in which
any particular act or acts are to be performed (whether as Trustee hereunder),
the Trustee shall be incompetent or unqualified to perform such act or acts, in
which event such rights, powers, duties
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and obligations (including the holding of title to the Trust Fund or a portion
thereof in any such jurisdiction) shall be exercised and performed by such
separate trustee or co-trustee at the direction of the Trustee.
Any notice, request or other writing given to the Trustee shall be
deemed to have been given to each of the then separate trustees and co-trustees,
as effectively as if given to each of them. Every instrument appointing any
separate trustee or co-trustee shall refer to this Agreement and the conditions
of this Article VI. 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.
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. The Trustee shall not be
responsible for any action or inaction of any such separate trustee or
co-trustee. If any separate trustee or co-trustee shall die, become incapable of
acting, resign or be removed, all of its estates, properties, rights, remedies
and trusts shall vest in and be exercised by the Trustee, to the extent
permitted by law, without the appointment of a new or successor trustee.
The Trustee may appoint one or more Eligible Institutions to act
as its agent or agents to perform any or all of its duties and obligations under
this Agreement. Each such agent shall be subject to all of 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.
Section 6.12 Appointment of Custodians. The Trustee may appoint
one or more Custodians, not affiliated with the Depositor, to hold all or a
portion of the Pooled Securities as agent for the Trustee. Any Custodian
appointed shall be an institution subject to supervision by federal or state
authority, shall have combined capital and surplus of at least $50,000,000 and
shall be qualified to do business in the jurisdiction in which it holds any
Pooled Securities.
Section 6.13 Authenticating Agent. (a) The Trustee may appoint
from time to time an authenticating agent (the "Authenticating Agent") which
shall be authorized to act on behalf of the Trustee in authenticating
Certificates. Wherever reference is made in this Agreement to the authentication
of Certificates by the Trustee or the Trustee's certificate of authentication,
such reference shall be deemed to include authentication on behalf of the
Trustee by the Authenticating Agent and a certificate of authentication executed
on behalf of the Trustee by the Authenticating Agent. Any successor
Authenticating Agent must have a principal office and place of business in New
York, New York, have a combined capital and surplus of at least $50,000,000, and
be authorized to do a trust business and subject to supervision or examination
by federal or state authorities.
(b) Any corporation into which the Authenticating Agent may be
merged or converted or with which it may be consolidated, or any corporation
resulting from any merger,
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conversion or consolidation to which the Authenticating Agent shall be a party,
or any corporation succeeding to all or substantially all of the corporate
agency business of the Authenticating Agent, shall continue to be the
Authenticating Agent without the execution or filing of any paper or any further
act on the part of the Trustee or the Authenticating Agent.
(c) The Authenticating Agent may at any time resign by giving at
least 30 days' advance written notice of resignation to the Trustee. The Trustee
may at any time terminate the agency of the Authenticating Agent by giving
written notice of termination to the Authenticating Agent. Upon receiving a
notice of resignation or upon such a termination, or in case at any time the
Authenticating Agent shall cease to be eligible in accordance with the
provisions of this Section 6.13, the Trustee promptly shall appoint a successor
Authenticating Agent and shall mail notice of such appointment to all
Certificateholders. Any successor Authenticating Agent upon acceptance of its
appointment hereunder shall become vested with all the rights, powers, duties
and responsibilities of its predecessor hereunder, with like effect as if
originally named as Authenticating Agent herein. No successor Authenticating
Agent shall be appointed unless eligible under the provisions of this Section
6.13.
(d) The Authenticating Agent shall have no responsibility or
liability for any action taken by it as such at the direction of the Trustee.
Any reasonable compensation paid to the Authenticating Agent shall be a
reimbursable expense under Section 6.6.
Section 6.14 Third Party Data Providers. Upon request, after the
Closing Date, the Trustee or the Certificate Administrator, if any, will provide
any requested information to the extent in its possession, to Bloomberg, Intex
and Yield Book (collectively, the "Data Providers") needed to have the Depositor
set up on these Data Providers to provide any information with respect to the
Pooled Securities (the "Data") delivered to the Certificateholders pursuant to
Section 3.8 hereof on a monthly basis in a format acceptable to such Data
Providers and acceptable to the Underwriter. During the term of this Agreement,
the Trustee will provide updated Data to the Data Providers on or before each
Distribution Date.
Section 6.15 Reports to Securities and Exchange Commission. Within
15 days after each Distribution Date, the Trustee shall, in accordance with
industry standards, file with the Securities and Exchange Commission via the
Electronic Data Gathering and Retrieval System (EDGAR), a Form 8-K with a copy
of the Certificateholders' Report for such Distribution Date as an exhibit
thereto. Prior to January 30, 2001, the Trustee shall, in accordance with
industry standards, file a Form 15 Suspension Notification with respect to the
Trust Fund, if applicable. Prior to March 30, 2001, the Trustee shall file a
Form 10-K, in substance conforming to industry standards, with respect to the
Trust Fund. The Depositor hereby grants to the Trustee a limited power of
attorney to execute and file each such document on behalf of the Depositor. Such
power of attorney shall continue until either the earlier of (i) receipt by the
Trustee from the Depositor of written termination of such power of attorney and
(ii) the termination of the Trust Fund. The Depositor agrees to promptly furnish
to the Trustee, from time to time upon request, such further information,
reports, and financial statements within its control related to this Agreement
and the Pooled Securities as the Trustee reasonably deems appropriate to prepare
and file all necessary reports with the Commission. The Trustee shall have no
responsibility to file any items other than those specified in this Section.
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ARTICLE VII
TERMINATION
Section 7.1 Termination upon Liquidation of All Pooled Securities.
The obligations and responsibilities of the Trustee created hereby (other than
the obligation to make payments to Certificateholders as hereafter set forth in
this Section 7.1) shall terminate upon the earlier of (i) the later of the final
payment or other liquidation of the last Pooled Security remaining in the Trust
Fund or (ii) the sale of the Pooled Securities pursuant to the Elective Purchase
Agreement, pursuant to Section 7.4 or 7.5, or the sale of the Pooled Securities
pursuant to the Conditional Asset Purchase Agreement; provided, however, that in
no event shall the trust created hereby continue beyond the earlier of (a) the
expiration of 21 years from the death of the last survivor of the descendants of
Joseph P. Kennedy, the late ambassador of the United States to the Court of St.
James's, living on the date hereof and (b) the Distribution Date in November
2001, and provided further that a "plan of liquidation" of the REMIC constituted
by the Trust Fund in accordance with Section 860F of the Code must be adopted in
conjunction with any termination effected pursuant to this Section 7.1.
Notice of any termination pursuant to this Section 7.1, specifying
the Distribution Date upon which all Certificateholders may surrender their
Certificates to the Trustee or its agent for payment and cancellation, shall be
given promptly by the Trustee or its agent by letter to Certificateholders and
the Rating Agency mailed by first class mail no later than the 25th day of the
month preceding the month of such final distribution specifying (i) the
Distribution Date upon which final payment on the Certificates will be made upon
presentation and surrender of Certificates at the office or agency of the
Trustee or the Certificate Registrar therein designated, (ii) the amount of any
such final payment and (iii) that the Record Date otherwise applicable to such
Distribution Date is not applicable, payments being made only upon presentation
and surrender of the Certificates at the office or agency of the Trustee or the
Certificate Registrar therein specified. The Trustee or its agent shall give
such notice to the Certificate Registrar and the Rating Agency at the time such
notice is given to the Certificateholders. Upon any such termination, the duties
of the Certificate Registrar shall also terminate. In the event such notice is
given in connection with the election of the Option Holder or the Holder of the
Class R Certificate to purchase, such purchasing party shall deposit in the
Certificate Account on the related Withdrawal Date an amount equal to the
purchase price for the Pooled Securities. Upon presentation and surrender of the
Certificates pursuant to any termination under this Section 7.1, the Trustee or
Paying Agent shall cause to be distributed to Certificateholders an amount equal
to the amount otherwise distributable on such Distribution Date.
In the event that all of the Certificateholders shall not
surrender their Certificates for cancellation within three months after the time
specified in the above-mentioned written notice, the Trustee or its agent 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 three months after the second notice all the
Certificates shall not have been surrendered for cancellation, the Trustee or
its agent shall take appropriate and reasonable steps to contact the remaining
Certificateholders concerning surrender of their
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Certificates, and the cost thereof shall be paid out of the funds and other
assets which remain in trust hereunder.
Section 7.2 Trusts Irrevocable. Except as expressly provided
herein, all trusts created hereby are irrevocable.
Section 7.3 Additional Termination Requirements. (a) In the event
the Trust Fund is to be terminated in connection with the sale of the Pooled
Securities pursuant to the Elective Purchase Agreement, a Mandatory Liquidation
Event in accordance with Section 7.4, an Early Liquidation Event in accordance
with Section 7.5 or the sale of the Pooled Securities pursuant to the
Conditional Asset Purchase Agreement, the Trust Fund shall be terminated in
accordance with the following additional requirements, unless the Trustee and
the Certificate Administrator have received an Opinion of Counsel to the effect
that the failure of the Trust Fund to comply with the requirements of this
Section 7.3 will not (x) result in the imposition of taxes on "prohibited
transactions" of the REMIC constituted by the Trust Fund as described in Section
860F(a)(2) of the Code, or (y) cause the REMIC constituted by the Trust Fund to
fail to qualify as a REMIC at any time that any Certificates are outstanding:
(i) Within 90 days prior to the Final Scheduled Distribution Date,
the Tax Matters Person shall prepare the documents associated with and
shall adopt a plan of complete liquidation of the REMIC constituted by
the Trust Fund; provided that the Trustee as agent for the Tax Matters
Person shall not prepare such plan; and
(ii) At or after the time of adoption of such a plan of complete
liquidation and at or prior to the Final Scheduled Distribution Date,
the Trustee shall sell all of the assets of the Trust Fund to the
"Purchaser" under the Elective Purchase Agreement, the Holder of the
Class R Certificate or other purchaser determined by the Trustee in
accordance with the procedures set forth in Sections 7.4 or 7.5 for
cash in accordance with such plan of liquidation; provided, however,
that in the event that a calendar quarter ends after the time of
adoption of such a plan of complete liquidation but prior to the Final
Scheduled Distribution Date, the Trustee shall not sell any of the
assets of the Trust Fund prior to the close of that calendar quarter.
(iii) On or before the Final Scheduled Distribution Date, the
Trustee shall credit, or distribute, to the Certificateholders and the
Holder of the Class R Certificate, all of the proceeds of the
liquidation of the Pooled Securities, plus any cash assets of the Trust
Fund, less any assets retained to meet claims against the Trust Fund,
in accordance with the allocations set forth in Sections 7.4 and 7.5.
(b) The Tax Matters Person hereby agrees to adopt such a plan of
complete liquidation and to take such other action in connection therewith as
may be reasonably requested by the Trustee, including any action set forth in
Section 860F(c)(4) of the Code and in Section 1.860F-1 of the Treasury
Regulations thereunder.
Section 7.4 Mandatory Liquidation Event. On November 20, 2001, if
the Pooled Securities are not sold pursuant to the Elective Purchase Agreement,
then the Trustee will sell or cause to be sold, through an auction advisor, by
the end of the third Business Day after such Date
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(provided that the settlement of any such sale may occur after the end of such
three Business Day period), all of the Pooled Securities (a "Mandatory
Liquidation Event") by utilizing the following procedures:
(i) the Trustee in a market auction or through an auction advisor
will solicit bids from no fewer than three competitive bidders (one of
which may be the Depositor) who are dealers in such type of Pooled
Securities;
(ii) the Trustee will have the right, but not the obligation, to
accept the highest bid; and
(iii) notwithstanding the foregoing, the Holder of the Class R
Certificate will have the right, but not the obligation, to purchase
the Pooled Securities at a price equal to 1/32 of 1% above the highest
bid received by the Trustee.
In addition, in the event that the Pooled Securities are not sold
pursuant to the Elective Purchase Agreement or the foregoing procedures, then
the Trustee shall sell the Pooled Assets pursuant to the Conditional Asset
Purchase Agreement.
The proceeds of the sale will be applied to the payment, pro rata,
of interest accrued on the Class A-1 and Class A-2 Certificates and to the
reduction, first of the Class A-1 Principal Balance and the Class A-2 Principal
Balance, pro rata, and second, of the Class B Principal Balance, in each case,
until reduced to zero. Any amounts remaining after reduction of the Class A-1
Principal Balance, Class A-2 Principal Balance and Class B Principal Balance to
zero will be paid to the Holder of the Class R Certificate.
Section 7.5 Early Liquidation Event. Upon the occurrence of an
Early Liquidation Event, the Trustee will sell or cause to be sold, through an
auction advisor, by the end of the third Business Day after the occurrence of an
Early Liquidation Event (provided that the settlement of any such sale may occur
after the end of such three Business Day period), all of the Pooled Securities
by utilizing the following procedures:
(i) the Trustee, in a market auction or through an auction
advisor, will solicit bids from no fewer than three competitive bidders
(one of which may be the Depositor) who are dealers in such type of
Pooled Securities;
(ii) the Trustee will have the right, but not the obligation to
accept the highest bid; and
(iii) notwithstanding the foregoing, the Holder of the Class R
Certificate will have the right but not the obligation, to purchase the
Pooled Securities at a price equal to 1/32 of 1% above the highest bid
received by the Trustee.
The proceeds from the sale will be applied to the payment, pro
rata, of interest accrued on the Class A-1 and Class A-2 Certificates and to the
reduction, first, of the Class A-1 Principal Balance and the Class A-2 Principal
Balance, pro rata, and second, of the Class B Principal Balance, in each case,
until reduced to zero. Any amounts remaining after reduction of
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the Class A-1 Principal Balance, Class A-2 Principal Balance and Class B
Principal Balance to zero will be paid to the Holder of the Class R Certificate.
ARTICLE VIII
MISCELLANEOUS PROVISIONS
Section 8.1 Amendment. This Agreement may be amended from time to
time by the Depositor and the Trustee, without the consent of any of the
Certificateholders, (a) to cure any ambiguity, to correct or supplement any
provision herein which may be inconsistent with any other provision herein, or
to make any other provisions with respect to matters or questions arising under
this Agreement, (b) to modify, eliminate or add to any provisions to such extent
as shall be necessary to maintain the qualification of the Trust Fund as a REMIC
at all times that any Class Certificates are outstanding, provided that the
Trustee has received an Opinion of Counsel to the effect that such action is
necessary or desirable to maintain such qualification, provided that such action
under clauses (a) and (b) above shall not, as evidenced by an Opinion of
Counsel, adversely affect in any material respect the interests of any
Certificateholder or (c) such amendment is made to conform the terms of this
Agreement to the terms described in the Prospectus dated January 27, 2000,
together with the Prospectus Supplement dated October 31, 2000.
This Agreement may also be amended from time to time by the
Depositor and the Trustee with the consent of the Holders of Certificates
evidencing Percentage Interests aggregating not less than 50% of the Trust Fund
for the purpose of adding any provisions 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 (a) reduce in any manner the amount of, or delay the timing
of, payments received on Pooled Securities which are required to be distributed
in respect of any Certificate without the consent of the Holder of such
Certificate; (b) adversely affect in any material respect the interest of the
Holders of the Certificates (other than the Class B and Class R Certificates) in
a manner other than as described in (a) above without the consent of the Holders
of Certificates evidencing Percentage Interests aggregating not less than
66-2/3% of the Trust Fund; (c) adversely affect in any material respect the
interest of the Class B or Class R Certificateholders without the consent,
respectively, of the Class B Certificateholders or Class R Certificateholders;
(d) change in any material respect the rights and obligations of the Trustee
under this Agreement without the prior written consent of such party; or (e)
reduce the aforesaid Percentage Interest of the Holders of Certificates required
to consent to any such amendments without the consent of the Holders of
Certificates evidencing Percentage Interests aggregating 100% of the Trust Fund;
provided that for the purposes of this Agreement, the Holder of the Class R
Certificate shall have no right to vote at all times that any Certificates
(other than the Class R Certificate) are outstanding if such amendment relates
to the modification, elimination or addition of any provision necessary to
maintain the qualification of the Trust Fund as a REMIC.
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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 to the effect that such amendment will
not cause the Trust Fund to fail to qualify as a REMIC at any time that any
Certificates are outstanding.
As soon as practicable after both (i) the proposal of any
amendment and (ii) the execution of any such amendment, the Trustee shall
furnish written notification of the substance of such amendment to each
Certificateholder and each Rating Agency.
It shall not be necessary for the consent of the
Certificateholders under this Section 8.1 to approve the particular form of any
proposed amendment, but it shall be sufficient if such consent shall approve the
substance thereof. The manner of obtaining such consents and of evidencing the
authorization of the execution thereof by Certificateholders shall be subject to
such reasonable regulations as the Trustee may prescribe.
Prior to the execution of any amendment to this Agreement, the
Trustee shall receive and is entitled to rely upon an Opinion of Counsel stating
that the execution of such amendment is authorized or permitted by this
Agreement. The Trustee may, but shall not be obligated to, enter into any such
amendment which affects the Trustee's own rights, duties or immunities under
this Agreement.
Section 8.2 Limitation on Rights of Certificateholders. The death
or incapacity of any Certificateholder shall not operate to terminate this
Agreement or the Trust Fund, nor entitle such Certificateholder's legal
representatives or heirs to claim an accounting or take any action or proceeding
in any court for a partition or winding up of the Trust Fund, nor otherwise
affect the rights, obligations and liabilities of the parties hereto or any of
them.
Except as otherwise expressly provided herein no
Certificateholder, solely by virtue of its status as a Certificateholder, shall
have any right to vote 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 person by reason of any action taken by the parties
to this Agreement pursuant to any provision hereof.
No Certificateholder, solely by virtue of its status as
Certificateholder, shall have any right by virtue or by availing of any
provision of this Agreement to institute any suit, action or proceeding in
equity or at law upon or under or with respect to this Agreement, unless such
holder previously shall have given to the Trustee a written notice of default
and of the continuance thereof, as hereinbefore provided, and unless Holders of
Certificates evidencing Percentage Interests aggregating not less than 25% of
the Trust Fund shall have made written request upon the Trustee to institute
such action, suit or proceeding in its own name as Trustee hereunder and shall
have offered to the Trustee such reasonable indemnity as it may require against
the costs, 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
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Trustee, that no one or more holders of Certificates shall have any right in any
manner whatever by virtue or by availing of any provision of this Agreement to
affect, disturb or prejudice the rights of the Holders of any other of such
Certificates, or to obtain or seek to obtain priority over or preference to any
other such Holder, or to enforce any right under this Agreement, except in the
manner herein provided and for the benefit of all Certificateholders. For the
protection and enforcement of the provisions of this Section 8.2, each and every
Certificateholder and the Trustee shall be entitled to such relief as can be
given either at law or in equity.
Section 8.3 Governing Law; Jurisdiction. THIS AGREEMENT SHALL BE
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK AND THE
OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER SHALL BE DETERMINED IN
ACCORDANCE WITH SUCH LAWS.
Section 8.4 Notices. All demands, notices and communications to a
party hereunder shall be in writing and shall be deemed to have been duly given
when delivered to such party at the relevant address, facsimile number or
electronic mail address set forth below (or at such other address, facsimile
number or electronic mail address as such party may designate from time to time
by written notice in accordance with this Section 8.4) in the case of: (a) the
Depositor, to Merrill Lynch Mortgage Investors, Inc., 250 Vesey Street, World
Financial Center - North Tower, 10th Floor, New York, New York 10281-1310,
Attention: John Winchester, or such other address as may hereafter be furnished
to the Trustee in writing by the Depositor; (b) in the case of the Trustee, to
the Corporate Trust Office, or such other address as may hereafter be furnished
to the Depositor in writing by the Trustee; (c) in the case of Moody's to
___________, Attention: ___________, or such other address as may hereinafter be
furnished to the Depositor in writing by Moody's; and (d) in the case of S&P, to
Standard & Poor's, 55 Water Street, New York, New York 10004, Attention: Terry
Osterweil, or such other address as hereinafter be furnished to the Depositor in
writing by S&P. Any notice required or permitted to be mailed to a
Certificateholder shall be given by first class mail, postage prepaid, at the
address of such Holder as shown in the Certificate Register. Any notice mailed
or transmitted within the time prescribed in this Agreement shall be
conclusively presumed to have been duly given, whether or not the addressee
receives such notice; provided that any demand, notice or communication to or
upon the Depositor or the Trustee shall not be effective until received.
Section 8.5 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.
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<PAGE>
IN WITNESS WHEREOF, the Depositor and the Trustee have caused
their names to be signed hereto by their respective duly authorized officers,
all as of the day and year first above written.
MERRILL LYNCH MORTGAGE
INVESTORS, INC., as Depositor
By:______________________
Name: ___________________
Title: ____________________
WELLS FARGO BANK MINNESOTA,
NATIONAL ASSOCIATION,
as Trustee
By:______________________
Name: ___________________
Title: ____________________
54
<PAGE>
STATE OF )
) ss:
COUNTY OF )
On the 2nd day of November, 2000, before me, a notary public in
and for said State, personally appeared before me _________________, known to me
to be a _______________ of Merrill Lynch Mortgage Investors, Inc., the
corporation that executed the within instrument, and also known to me to be the
person who executed it on behalf of said corporation, and acknowledged to me
that such corporation executed the within instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my
official day and year in this certificate first above written.
-----------------------
Notary Public
[Notarial Seal] Commission Expires:
55
<PAGE>
STATE OF )
)ss:
COUNTY OF )
On the 2nd day of November, 2000, before me, a notary public in
and for said State, personally appeared _____________ known to me to be an
______________________ of Wells Fargo Bank Minnesota, National Association, the
national banking association that executed the within instrument, and also known
to me to be the person who executed it on behalf of said __________________, and
acknowledged to me that such ______________________ executed the within
instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my
official seal the day and year in this certificate first above written.
--------------------------
Notary Public
[Notarial Seal] Commission Expires:
56
