SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
------------------
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (date of earliest event reported)
August 29, 1997
Bear Stearns Mortgage Securities Inc. (as Depositor under a Pooling Agreement
dated as of August 1, 1997 providing for the issuance of Mortgage Pass-Through
Certificates, Series 1997-5)
BEAR STEARNS MORTGAGE SECURITIES INC.
(Exact name of registrant as specified in charter)
Delaware 333-13617 13-3633241
(State or other (Commission File (IRS Employer
jurisdiction of Number) Identification
incorporation) No.)
245 Park Avenue, New York, New York 10167
(Address of principal executive offices) (Zip Code)
(212) 272-2000
Registrant's telephone number, including area code
Not Applicable
(Former name or former address, if changed since
last report.)
<PAGE>
Item 7. Financial Statements, Pro Forma Financial Information and Exhibits.
(c) Exhibits
Exhibit No.
1.1 Terms Agreement dated as of August 26, 1997 between
the Registrant and Bear, Stearns & Co. Inc.
4.1 Pooling Agreement dated as of August 1, 1997 between
the Registrant and First Trust National Association, as
Trustee.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of
1934, the registrant has duly caused this report to be signed on its behalf by
the undersigned thereunto duly authorized.
BEAR STEARNS MORTGAGE SECURITIES INC.
(Registrant)
Date: August 28, 1997
By: /s/ Joseph T. Jurkowski
Name: Joseph T. Jurkowski
Title: Vice President
<PAGE>
EXHIBIT INDEX
Sequentially
Exhibit Number Description Numbered Page
1.1 Terms Agreement dated as of
August 26, 1997 between the
Registrant and Bear, Stearns & Co.
Inc.
4.1 Pooling Agreement dated as of
August 1, 1997 between the Registrant
and First Trust National Association,
as Trustee.
Exhibit 1.1
BEAR STEARNS MORTGAGE SECURITIES INC.
Pass-Through Certificates
TERMS AGREEMENT
Dated: August 26, 1997
To: BEAR STEARNS MORTGAGE SECURITIES INC.
Re: Underwriting Agreement dated June 25, 1996
Series Designation: Series 1997-5
Class Designation Schedule: Class A-1
TERMS OF THE CERTIFICATES:
Original Principal Pass-Through
CLASS AMOUNT INTEREST RATE
A-1 $30,018,528.00 (1)
- ---------------------
(1) The effective per annum interest rate borne by the Certificates during
each Interest Accrual Period with respect to a Distribution Date will
equal a fraction, expressed as a percentage truncated at the fourth
decimal place, the numerator of which is equal to the aggregate amount
in respect of interest paid to the certificateholders for the related
Interest Accrual Period multiplied by 12, and the denominator of which
is the principal amount of the Certificates immediately prior to such
Distribution Date.
DISTRIBUTION DATES: With respect to each month, beginning in September 1997, the
25th day of such month, or, if such is not a Business Day (as defined herein),
then on the next successive Business Day. A "Business Day" means a day other
than a Saturday, a Sunday or a day on which banking institutions in New York,
New York or the city in which the corporate trust office of the Trustee is
located are authorized or obligated by law or executive order to be closed.
CERTIFICATE RATING: "Aaa" by Moody's Investors Service, Inc. and "AAA" by Fitch
Investors Service, L.P.
FORM OF CERTIFICATES: Book-entry (Depository Trust Company).
TRUST FUND ASSETS: The Pooled Certificates to be included in the Trust Fund are
as described in Schedule A hereto.
PURCHASE PRICE: The aggregate purchase price payable by the Underwriter for the
Certificates covered by this Agreement will be 98.7% of the principal balance of
the Certificates plus accrued interest from August 1,1997 to, but not including,
the Closing Date.
CLOSING DATE: August 29, 1997, 9:00 a.m., New York time
MISCELLANEOUS MATTERS: (a) The Pooling Agreement and the Mortgage Loan Schedule
referred to in the Underwriting Agreement shall be deemed to be references to
the Pooling Agreement dated as of August 1, 1997 between Bear Stearns Mortgage
Securities Inc., as depositor, and First Trust National Association, as trustee,
and the Pooled Certificates Schedule (attached thereto), respectively;
(b) notices to the Underwriter shall be to the attention of Jeffrey Mayer and
notices to the Company shall be to the attention of Joseph T. Jurkowski, Jr.
<PAGE>
The undersigned, as sole Underwriter, agrees, subject to the terms and
provisions of the above-referenced Underwriting Agreement, which is incorporated
herein in its entirety and made a part hereof, to purchase the principal amount
of the Class of the above-referenced Series of Certificates set forth herein.
BEAR, STEARNS & CO. INC.
By: /s/ Paul Friedman
------------------------------
Name: Paul Friedman
Title: Senior Managing Director
Accepted:
BEAR STEARNS MORTGAGE SECURITIES INC.
By: /s/ Joseph T. Jurkowski
-------------------------------
Name: Joseph T. Jurkowski
Title: Vice President
<PAGE>
SCHEDULE A
POOLED CERTIFICATES
CLASS %
FULL NAME OF SERIES IN TRUST
POOLED FNMA CERTIFICATES
Guaranteed REMIC Pass-Through Certificates, 12.02%
Fannie Mae REMIC Trust 1993-142, Class A
Guaranteed REMIC Pass-Through Certificates, 6.83%
Fannie Mae REMIC Trust 1993-164, Class F
Guaranteed REMIC Pass-Through Certificates 52.57%
Fannie Mae REMIC Trust 1993-168, Class SD
Guaranteed REMIC Pass-Through Certificates, 26.88%
Fannie Mae REMIC Trust 1996-39, Class G
Guaranteed REMIC Pass-Through Certificates, 72.22%
Fannie Mae REMIC Trust 1996-63, Class Z
POOLED FHLMC CERTIFICATES
Multiclass Mortgage Participation Certificates,
Series 1435, Class SB 28.78%
Multiclass Mortgage Participation Certificates
and Modifiable and 12.46%
Combinable REMIC Certificates, Series 1948,
Class SB
Multiclass Mortgage Participation Certificates,
Multiclass Mortgage Securities and Modifiable 74.28%
and Combinable REMIC Certificates, Series 1983,
Class ZC
Exhibit 4.1
==============================================================================
BEAR STEARNS MORTGAGE SECURITIES INC.,
Depositor
and
FIRST TRUST NATIONAL ASSOCIATION,
Trustee
--------------------------------
POOLING AGREEMENT
Dated as of August 1, 1997
--------------------------------
$30,018,528
Bear Stearns Mortgage Securities Inc.
Pass-Through Certificates
Series 1997-5
==============================================================================
<PAGE>
TABLE OF CONTENTS
ARTICLE I DEFINITIONS 1
Section 1.01. DEFINED TERMS..................................................1
ARTICLE II CONVEYANCE OF THE POOLED CERTIFICATES; ORIGINAL ISSUANCE OF
CERTIFICATES 11
Section 2.01. CONVEYANCE OF THE POOLED CERTIFICATES.........................11
Section 2.02. ACCEPTANCE OF TRUST FUND BY TRUSTEE;
INITIAL ISSUANCE OF CERTIFICATES..............................12
Section 2.03. REPRESENTATIONS AND WARRANTIES OF THE
DEPOSITOR AND THE TRUSTEE.....................................13
Section 2.04. SUBSTITUTION OF POOLED CERTIFICATES...........................16
ARTICLE III ADMINISTRATION OF THE POOLED CERTIFICATES PAYMENTS AND REPORTS TO
CERTIFICATEHOLDERS 17
Section 3.01. ADMINISTRATION OF THE TRUST FUND AND THE
POOLED CERTIFICATES...........................................17
Section 3.02. COLLECTION OF MONIES..........................................18
Section 3.03. ESTABLISHMENT OF CERTIFICATE AND TRUSTEE
FEE ACCOUNTS; DEPOSITS THEREIN................................18
Section 3.04. PERMITTED WITHDRAWALS FROM THE CERTIFICATE ACCOUNT............19
Section 3.05. DISTRIBUTIONS.................................................20
Section 3.06. STATEMENTS TO CERTIFICATEHOLDERS..............................22
Section 3.07. ACCESS TO CERTAIN DOCUMENTATION AND INFORMATION...............23
Section 3.08. CALCULATION OF MONTHLY DISTRIBUTION AMOUNT....................23
ARTICLE IV THE CERTIFICATES 23
Section 4.01. THE CERTIFICATES..............................................24
Section 4.02. REGISTRATION OF TRANSFER AND EXCHANGE OF CERTIFICATES.........25
Section 4.03. MUTILATED, DESTROYED, LOST OR STOLEN CERTIFICATES.............27
Section 4.04. PERSONS DEEMED OWNERS.........................................27
Section 4.05. Exchange of Certificates.....................................27
ARTICLE V THE TRUSTEE 28
Section 5.01. DUTIES OF TRUSTEE.............................................28
Section 5.02. CERTAIN MATTERS AFFECTING THE TRUSTEE.........................30
Section 5.03. TRUSTEE NOT LIABLE FOR CERTIFICATES OR POOLED CERTIFICATES....30
Section 5.04. TRUSTEE MAY OWN CERTIFICATES..................................30
Section 5.05. TRUSTEE'S FEES; INDEMNIFICATION OF THE TRUSTEE................31
Section 5.06. ELIGIBILITY REQUIREMENTS FOR TRUSTEE..........................31
Section 5.07. RESIGNATION AND REMOVAL OF THE TRUSTEE........................32
Section 5.08. SUCCESSOR TRUSTEE.............................................32
Section 5.09. MERGER OR CONSOLIDATION OF TRUSTEE............................33
Section 5.10. APPOINTMENT OF CO-TRUSTEE OR SEPARATE TRUSTEE.................33
ARTICLE VI THE DEPOSITOR 34
Section 6.01. LIABILITY OF THE DEPOSITOR....................................34
Section 6.02. MERGER, CONSOLIDATION OR CONVERSION OF THE DEPOSITOR..........35
Section 6.03. LIMITATION ON LIABILITY OF THE DEPOSITOR AND OTHERS...........35
ARTICLE VII TERMINATION 35
Section 7.01. TERMINATION...................................................35
ARTICLE VIII MISCELLANEOUS PROVISIONS 38
Section 8.01. AMENDMENT.....................................................38
Section 8.02. COUNTERPARTS..................................................39
Section 8.03. LIMITATION ON RIGHTS OF CERTIFICATEHOLDERS....................39
Section 8.04. GOVERNING LAW.................................................40
Section 8.05. NOTICES.......................................................40
Section 8.06. SEVERABILITY OF PROVISIONS....................................40
Section 8.07. SUCCESSORS AND ASSIGNS........................................40
Section 8.08. ARTICLE AND SECTION HEADINGS..................................41
Section 8.09. NOTICES TO RATING AGENCIES....................................41
Exhibit A - Form of Class A-1 Certificate
Exhibit B - Form of Option Exercise Notice
Schedule A - Pooled Certificates
<PAGE>
POOLING AGREEMENT, dated as of August 1, 1997, by and between
Bear Stearns Mortgage Securities Inc., as depositor (the "Depositor"), and First
Trust National Association, as trustee (the "Trustee").
PRELIMINARY STATEMENT
The Depositor intends to cause the issuance of and to sell its
Pass-Through Certificates, Series 1997-5 (the "Certificates") representing in
the aggregate the entire beneficial ownership of a trust fund (the "Trust
Fund"), the primary assets of which are the Pooled Certificates (defined
herein).
All things necessary to make this Agreement a valid
declaration of trust by the Depositor in accordance with its terms have been
done.
In consideration of the premises and the mutual agreements
herein contained, the Depositor and the Trustee agree as follows:
ARTICLE I
DEFINITIONS
Section 1.01. DEFINED TERMS
Whenever used in this Agreement, including the Preliminary
Statement, the following words and phrases, unless the context otherwise
requires, shall have the following meanings:
AFFILIATE: With respect to any specified Person, any other
Person that directly, or indirectly through one or more intermediaries, controls
or is controlled by, or is under common control with, such specified Person. For
the purposes of this definition, "control" when used with respect to any
specified Person means possession, direct or indirect, of the power to direct or
cause the direction of the management and policies of such Person, whether
through the ownership of voting securities, by contract or otherwise, and the
terms "controlling," "controlled by" and "under common control with" have
meanings correlative to the foregoing.
AGREEMENT: This Pooling Agreement and all amendments hereof
and supplements hereto.
AVAILABLE FUNDS: As of any date of determination, the
aggregate amount on deposit in the Certificate Account as of such date, net of
any portion thereof which represents amounts to be paid to any Person pursuant
to clauses (ii) and (iv) of Section 3.04.
BUSINESS DAY: Any day other than a Saturday, a Sunday or a day
on which banking institutions in New York or in the city in which the Corporate
Trust Office of the Trustee is located are authorized or obligated by law or
executive order to close.
CERTIFICATE: Any Class A-1 Certificate as executed hereunder
by the Trustee and authenticated and delivered hereunder by the Certificate
Registrar, substantially in the form of Exhibit A hereto.
CERTIFICATE ACCOUNT: The trust account or accounts, which
shall at all times be Eligible Accounts, created and maintained by the Trustee
for the benefit of the Certificateholders pursuant to Section 3.03. Funds
deposited in the Certificate Account shall be held in trust for the
Certificateholders for the uses and purposes set forth in Article III hereof.
CERTIFICATE OWNER: Any Person who is the beneficial owner of
a Certificate registered in the name of the Depository or its nominee.
CERTIFICATE PRINCIPAL BALANCE: With respect to any
Certificate, as of any date of determination, the then outstanding principal
amount of such Certificate, which is equal to the product of (a) the Percentage
Interest evidenced by such Certificate and (b) the then Class A-1 Balance of the
Certificates.
CERTIFICATE REGISTRAR AND CERTIFICATE REGISTER: Shall each
have the meanings provided in Section 4.02.
CERTIFICATEHOLDER OR HOLDER: As to the Certificates, the
person in whose name a Certificate is registered in the Certificate Register,
except that, solely for the purpose of giving any consent, approval or waiver
pursuant to this Agreement, any Certificate registered in the name of the
Depositor or any Affiliate thereof shall be deemed not to be outstanding and
shall not be taken into account for purposes of determining whether the Holders
of Certificates evidencing the requisite aggregate Percentage Interest necessary
to effect any such consent, approval or waiver has been obtained, unless such
Persons collectively own all the Certificates.
CLASS: Collectively, all of the Certificates bearing the
same designation.
CLASS A-1 BALANCE: The aggregate principal amount of Class A-1
Certificates outstanding as of any date of determination, which is equal to the
Original Class A-1 Balance minus all amounts received as principal on the Pooled
Certificates plus all amounts of accreted interest added to the outstanding
principal balance of the Z Certificates. If, on any Distribution Date, the
amount by which the Z Certificates have accreted exceeds the aggregate
distributions of principal on the other Pooled Certificates, the Class A-1
Balance will be increased by the amount of such excess.
CLASS A-1 CERTIFICATE: Any one of the Class A-1 Certificates,
as executed hereunder by the Trustee and authenticated and delivered hereunder
by the Certificate Registrar, substantially in the form of Exhibit A hereto.
CLASS A-1 PERCENTAGE: The Original Class A-1 Balance divided
by the Original Principal Balance, or 100.00%.
CLASS BALANCE: The Class A-1 Balance.
CLOSING DATE: August 29, 1997.
CODE: The Internal Revenue Code of 1986, as amended.
CORPORATE TRUST OFFICE: The corporate trust office of the
Trustee at which at any particular time its corporate trust business with
respect to this Agreement shall be administered, which office at the date of the
execution of this Agreement is located at 180 East Fifth Street, St. Paul,
Minnesota 55101, Attention: Structured Finance Department, telephone no. (612)
244-0011, facsimile no. (617) 244-0089.
DEFINITIVE CERTIFICATES: The meaning specified in Section
4.01(b) hereof.
DELETED POOLED CERTIFICATE: A Pooled Certificate replaced by
a Substitute Pooled Certificate.
DEPOSITOR: Bear Stearns Mortgage Securities Inc., a Delaware
corporation, or its successor in interest.
DEPOSITORY: DTC, the nominee of which is Cede & Co., or any
successor thereto.
DEPOSITORY AGREEMENT: The meaning specified in Subsection
4.01(a) hereof.
DEPOSITORY PARTICIPANT: A broker, dealer, bank or other
financial institution or other Person for whom from time to time the Depository
effects book-entry transfers and pledges of securities deposited with the
Depository.
DETERMINATION TIME: Noon, Eastern Standard Time, on a
Distribution Date.
DISTRIBUTION DATE: With respect to any month, the Distribution
Date shall be the 25th day of such month or, if such day is not a Business Day,
then the next succeeding Business Day. The first Distribution Date shall occur
on September 25, 1997.
DTC: The Depository Trust Company.
ELIGIBLE ACCOUNT: Any of (i) an account maintained with a
federal or state chartered depository institution or trust company, the
short-term unsecured debt obligations of which are rated at least P-1 by Moody's
and A-1+ by S&P (or comparable ratings if Moody's and S&P are not the Rating
Agencies) at any time funds are on deposit therein, (ii) a trust account or
accounts maintained with the trust department of a federally chartered
depository institution or trust company acting in its fiduciary capacity, or
(iii) a trust account or accounts maintained with the trust department of a
state chartered depository institution or trust company acting in its fiduciary
capacity and subject to regulations regarding fiduciary funds on deposit therein
substantially similar to 12 CFR ss. 9.10(b).
ERISA: The Employee Retirement Income Security Act of 1974,
as amended, and the rules and regulations promulgated thereunder.
ESCROW AMOUNT: With respect to any Distribution Date,
one-twelfth of the product of 0.0025% and the Class Balance immediately prior
to such Distribution Date.
EXCHANGE DATE: A date on which Certificates are exchanged
for a pro rata portion of the Pooled Certificates pursuant to Section 4.05.
FHLMC: The Federal Home Loan Mortgage Corporation.
FHLMC POOLED CERTIFICATE DISTRIBUTION DATE: With respect to
each of the Pooled FHLMC Certificates, the 15th day of each month or, if any
such day is not a business day as defined in the applicable Underlying
Agreement, the next succeeding business day as so defined.
FINAL DISTRIBUTION DATE: With respect to the Pooled
Certificates or the Certificates, as applicable, the Pooled Certificate
Distribution Date or the Distribution Date, as applicable, on which the final
distribution thereon is to be made in accordance with the related Underlying
Agreement or this Agreement, as the case may be.
FITCH: Fitch Investors Service, L.P., or its successor in
interest.
FMV OPINION: An opinion of an investment banking firm of
national reputation (other than an affiliate of the Depositor) which may be
obtained in connection with the determination of the Repurchase Price for a
repurchase pursuant to Section 2.03(c).
FNMA: The Federal National Mortgage Association.
FNMA POOLED CERTIFICATE DISTRIBUTION DATE: With respect to
each of the Pooled FNMA Certificates (other than the Pooled FNMA 96-63/Z
Certificates), the 25th day of each month, and in the case of the Pooled FNMA
96-63/Z Certificates, the 18th day of each month, or, if any such day is not a
business day as defined in the applicable Underlying Agreement, the next
succeeding business day as so defined.
INDEPENDENT: When used with respect to any specified Person,
such a Person who (i) is in fact independent of the Depositor and any Affiliate
of the Depositor, (ii) does not have any direct financial interest in the
Depositor or in any Affiliate of the Depositor, and (iii) is not connected with
the Depositor or any Affiliate of the Depositor as an officer, employee,
promoter, underwriter, trustee, partner, director or person performing similar
functions.
INVESTMENT COMPANY ACT: The Investment Company Act of 1940,
as amended from time to time, and the rules and regulations promulgated
thereunder.
LIBOR: London interbank offered quotations for one month
Eurodollar deposits.
MAJORITY CERTIFICATEHOLDERS: The Holders of Certificates
evidencing in the aggregate greater than 50% of the aggregate Class Balance of
all the Certificates.
MONTHLY DISTRIBUTION AMOUNT: With respect to any Distribution
Date, the aggregate of (i) the interest distribution amount for such
Distribution Date, and (ii) the principal distribution amount for such
Distribution Date.
MOODY'S: Moody's Investors Service, Inc. or its successor
in interest.
NOTICE OF FINAL DISTRIBUTION: With respect to the Pooled
Certificates, any notice provided pursuant to the related Underlying Agreement
to the effect that final distribution on a Pooled Certificate shall be made only
upon presentment and surrender thereof. With respect to the Certificates, the
notice to be provided pursuant to Section 7.01(b) to the effect that final
distribution on the Certificates shall be made only upon presentment and
surrender thereof.
OFFICERS' CERTIFICATE: A certificate signed by the Chairman of
the Board, the President, a Senior Vice President, a Vice President or an
Assistant Vice President and by the Treasurer, the Secretary, an Assistant
Treasurer or an Assistant Secretary of the Depositor or the Trustee, as required
by this Agreement.
OPINION OF COUNSEL: A written opinion of counsel, who may be
counsel for the Depositor, which opinion is addressed to the Trustee and is
reasonably acceptable to the Trustee.
ORIGINAL CLASS A-1 BALANCE: $30,018,528.
OPTION EXERCISE FEE: The fee set forth in Section 4.05(c).
OPTION EXERCISE NOTICE: A notice, substantially in the form of
Exhibit B, delivered by a Holder or Certificate Owner holding not less than 10%
of the outstanding principal amount of the Certificates.
PERCENTAGE INTEREST: With respect to any Certificate, the
portion of the Class represented by such Certificate, expressed as a
percentage, the numerator of which is the initial outstanding principal
amount of such Certificate as of the Closing Date, as specified on the face
thereof, and the denominator of which is the Original Class A-1 Balance.
PERMITTED INVESTMENTS: Any one or more of the following
obligations or securities:
(i) direct obligations of, or obligations fully
guaranteed as to timely payment of principal and interest by,
the United States or any agency or instrumentality thereof,
provided such obligations are backed by the full faith and
credit of the United States;
(ii) demand and time deposits in, certificates of
deposit of, or bankers' acceptances (which shall each have an
original maturity of not more than 90 days and, in the case of
bankers' acceptances, shall in no event have an original
maturity of more than 365 days or a remaining maturity of more
than 30 days) denominated in United States dollars issued by,
any depository institution or trust company (including the
Trustee or any agent of the Trustee, acting in its respective
commercial capacities) incorporated under the laws of the
United States of America or any state thereof and subject to
supervision and examination by federal and/or state banking
authorities, so long as at the time of such investment or
contractual commitment providing for such investment the
commercial paper or other short-term debt obligations of such
depository institution or trust company (or, in the case of a
depository institution which is the principal subsidiary of a
holding company, the commercial paper or other short-term debt
obligations of such holding company) have a credit rating of
"A-1+" and P-1 from S&P and Moody's, respectively;
(iii) repurchase obligations with respect to any
security described in clause (i) above where such security has
a remaining maturity of one year or less and where such
repurchase obligation has been entered into with a depository
institution or trust company (acting as principal) described
in clause (ii) above;
(iv) securities bearing interest or sold at a
discount issued by any corporation incorporated under the laws
of the United States of America or any state thereof which
securities are rated "AAA" and "Aaa" by S&P and Moody's,
respectively, at the time of such investment or contractual
commitment providing for such investment; provided, however,
that securities issued by any particular corporation will not
be Permitted Investments to the extent that investment therein
will cause the then outstanding principal amount of securities
issued by such corporation and held as part of the Trust Fund
to exceed 10% of the sum of the aggregate outstanding
principal balance of all Pooled Certificates and the aggregate
principal amount of all Permitted Investments in the
Certificate Account;
(v) commercial paper (having original maturities of
not more than 365 days) of any corporation incorporated under
the laws of the United States or any state thereof which on
the date of acquisition has been rated by each Rating Agency
in its highest short-term rating available, provided that such
commercial paper shall have a remaining maturity of not more
than 30 days;
(vi) certificates or receipts representing ownership
interests in future principal payments on obligations of the
United States of America or its agencies or instrumentalities
(which obligations are backed by the full faith and credit of
the United States of America) held by a custodian on behalf of
the holders of such receipts; and
(vii) money market funds which are rated by Moody's
at the time at which the investment is made in its highest
long-term rating category, any such money market funds which
provide for demand withdrawals being conclusively deemed to
satisfy any maturity requirements for Permitted Investments
set forth in the Certificates or this Agreement;
provided, however, that no instrument shall be a Permitted Investment if it
represents, either (1) the right to receive only interest payments with respect
to the underlying debt instrument or (2) the right to receive both principal and
interest payments derived from obligations underlying such instrument and the
principal payments with respect to such instrument provide a yield to maturity
greater than 120% of the yield to maturity at par of such underlying
obligations.
PERSON: Any individual, corporation, partnership, limited
liability company, joint venture, association, joint-stock company, trust,
unincorporated organization or government or any agency or political subdivision
thereof.
POOLED CERTIFICATEHOLDER: The Trustee or its Depository
Participant for the benefit of the Certificateholders.
POOLED CERTIFICATE CLASS PERCENTAGE: Means, for each class of
Pooled Certificates, the percentage which the Pooled Certificate constitutes of
its entire class as set forth in Schedule A attached hereto under the caption
"Class % in Trust."
POOLED CERTIFICATE DISTRIBUTION DATE: Each of the FHLMC
Pooled Certificate Distribution Date and the FNMA Pooled Certificate
Distribution Date.
POOLED CERTIFICATE DISTRIBUTION DATE STATEMENT: The
information provided or updated monthly by FNMA and FHLMC in respect of Pooled
Certificates in connection with each Pooled Certificate Distribution Date.
POOLED CERTIFICATES: The Pooled FHLMC Certificates and the
Pooled FNMA Certificates sold by the Depositor to, and registered in the name
of, or held for the benefit of, the Trustee pursuant to Section 2.01 or 2.04 and
as more particularly described in Schedule A hereto.
POOLED FHLMC CERTIFICATES: Multiclass Mortgage Participation
Certificates, issued by FHLMC and identified as the Pooled FHLMC Certificates in
Schedule A hereto.
POOLED FHLMC 1435/SB CERTIFICATES: FHLMC Multiclass Mortgage
Participation Certificates, Series 1435, Class SB.
POOLED FHLMC 1948/SB CERTIFICATES: FHLMC Multiclass Mortgage
Participation Certificates and Modifiable and Combinable REMIC Certificates,
Series 1948, Class SB.
POOLED FHLMC 1983/ZC CERTIFICATES: FHLMC Multiclass Mortgage
Participation Certificates, Multiclass Mortgage Securities and Modifiable and
Combinable REMIC Certificates, Series 1983, Class ZC.
POOLED FNMA CERTIFICATES: Guaranteed REMIC Pass-Through
Certificates issued by FNMA and identified as the Pooled FNMA Certificates in
Schedule A hereto.
POOLED FNMA 93-142/A CERTIFICATES: FNMA Guaranteed REMIC
Pass-Through Certificates, FNMA REMIC Trust 1993-142, Class A.
POOLED FNMA 93-164/F CERTIFICATES: FNMA Guaranteed REMIC
Pass-Through Certificates, FNMA REMIC Trust 1993-164, Class F.
POOLED FNMA 93-168/SD CERTIFICATES: FNMA Guaranteed REMIC
Pass- Through Certificates, FNMA REMIC Trust 1993-168, Class SD.
POOLED FNMA 96-39/G CERTIFICATES: FNMA Guaranteed REMIC
Pass-Through Certificates, FNMA REMIC Trust 1996-39, Class G.
POOLED FNMA 96-63/Z CERTIFICATES: FNMA Guaranteed REMIC
Pass-Through Certificates, FNMA REMIC Trust 1996-63, Class Z.
POOLED INVERSE FLOATING RATE CERTIFICATES: Pooled FHLMC
1435/SB Certificates, Pooled FHLMC 1948/SB Certificates and Pooled FNMA
1993-168/SD Certificates.
PURCHASE AGREEMENT: The Purchase Agreement dated as of
August 26, 1997 between Bear, Stearns & Co., Inc. and the Depositor relating
to the Pooled Certificates.
RATING AGENCY OR RATING AGENCIES: Moody's and Fitch or their
successors. If such agencies or their successors are no longer in existence,
"Rating Agencies" shall be deemed to refer to such nationally recognized
statistical rating agencies, or other comparable Persons, designated by the
Depositor, notice of which designation shall be given to the Trustee, and
specific ratings of Moody's and Fitch shall be deemed to refer to the equivalent
ratings of the parties so designated.
RECORD DATE: With respect to any Distribution Date, the last
Business Day of the month preceding the month in which such Distribution Date
occurs; provided, however, that for this purpose the Distribution Date is deemed
to occur on the 25th of each month, without regard to whether such day is a
Business Day.
REMAINING POOLED CERTIFICATE: Any class of the Pooled
Certificates, following the date on which the principal balance or notional
principal balance of all other classes of the Pooled Certificates is reduced to
zero.
REPURCHASE PRICE: In connection with the repurchase of any
Pooled Certificate pursuant to Section 2.03(c) or Section 7.01(a)(i), a price
equal to the outstanding Pooled Certificate principal balance thereof as of the
date of repurchase plus accrued interest thereon in accordance with the
applicable Underlying Agreements.
RESPONSIBLE OFFICER: When used with respect to the Trustee,
any officer of the Trustee assigned to and working in its Corporate Trust Office
or similar group administering the Trusts hereunder and also, with respect to a
particular matter, any other officer of the Trustee to whom a particular matter
is referred by the Trustee because of such officer's knowledge of and
familiarity with the particular subject.
SECURITIES ACT: The Securities Act of 1933, as amended.
SINGLE CERTIFICATE: A Certificate with an original
Certificate Balance of $1,000.
SUBSTITUTE POOLED CERTIFICATE: One or more mortgage related
securities tendered to the Trustee pursuant to Section 2.04, issued by GNMA,
FNMA or FHLMC, which meet the following criteria, (i) such substitution shall be
(a) in the case of the Pooled FNMA 93-164/F Certificates, with at least one
floating rate certificate which is entitled to receive interest based on LIBOR
and which has a formula of LIBOR plus a minimum of 40 basis points, (b) in the
case of the Pooled FHLMC 1983/ZC Certificates and the Pooled FNMA 96-63/Z
Certificates, with one or more fixed rate or accrual certificates bearing a
coupon no less than the coupon of the Pooled Certificate being substituted for
(c) in the case of Pooled Fixed Rate Certificates (other than the Pooled
Certificates referred to in clause (b)), with one or more fixed rate
certificates bearing a coupon no less than the coupon of the Pooled Certificates
being substituted for, or (d) in the case of the Pooled Inverse Floating Rate
Certificates, one or more inverse floating rate certificates based on LIBOR
whose combined coupon will be at least equal to the coupon of the Pooled
Certificates being substituted for at all levels of LIBOR, (ii) the sum of the
outstanding principal amounts of the Substitute Pooled Certificates equals the
sum of the outstanding principal amounts of the Deleted Pooled Certificates
being substituted for, (iii) the Substitute Pooled Certificates as the date of
substitution ultimately are backed by mortgage loans (a) with a weighted average
pass-through rate no more than 50 basis points below and no more than 50 basis
points above the weighted average pass-through rate of the mortgage loans
ultimately backing the Deleted Pooled Certificate and (b) which are
conventional, fixed rate, one- to four-family, fully amortizing, level payment,
first mortgage loans with original maturities of up to 30 years (or if the
substitution is for Pooled FNMA 93-164/F Certificates, up to 15 years), (iv) the
inclusion of which in the Trust Fund will not result in a withdrawal or
downgrading in the rating assigned to the Certificates by the Rating Agencies,
written confirmation of which shall be provided by the Rating Agencies to the
Trustee and (v) will not cause the Trust to lose its status as a grantor trust
for federal income tax purposes as indicated in an Opinion of Counsel to be
provided to the Trustee.
TRUSTEE: First Trust National Association, in its capacity
as trustee, or its successor in interest.
TRUSTEE FEE: With respect to any Distribution Date, the
monthly fee equal to one-twelfth of the product of 0.0175% and the Class Balance
immediately prior to such Distribution Date, but not less than $210.00 with
respect to any Distribution Date.
TRUSTEE FEE ESCROW ACCOUNT: The trust account or accounts,
which shall at all times be Eligible Accounts, created and maintained by the
Trustee pursuant to Section 3.03.
TRUST FUND: The segregated pool of assets subject hereto,
constituting the corpus of the trust created hereby and to be administered
hereunder, consisting of:
(i) the Pooled Certificates;
(ii) all amounts payable on the Pooled Certificates following
the Closing Date pursuant to the Underlying Agreements;
(iii) the Certificate Account and such funds or assets as are
from time to time deposited in the Certificate Account;
(iv) the Depositor's rights under the Purchase Agreement;
and
(v) the income, payments and proceeds of each of the
foregoing.
UNDERLYING AGREEMENTS: The agreements pursuant to which the
related Pooled Certificates were issued, as in effect on the Closing Date.
UNDERLYING SERIES: Each series of securities which includes
one of the Pooled Certificates.
Z CERTIFICATES: Pooled FHLMC 1983/ZC Certificates and Pooled
FNMA 96-63/Z Certificates.
<PAGE>
ARTICLE II
CONVEYANCE OF THE POOLED CERTIFICATES;
ORIGINAL ISSUANCE OF CERTIFICATES
Section 2.01. CONVEYANCE OF THE POOLED CERTIFICATES
(a) The Depositor, concurrently with the execution and
delivery hereof, does hereby sell, transfer, assign, set-over and otherwise
convey to the Trustee, in trust, for the use and benefit of the
Certificateholders, without recourse, all the right, title and interest of the
Depositor (i) in and to the Pooled Certificates, (ii) in and to the Purchase
Agreement and (iii) in and to all other assets constituting the Trust Fund. Such
assignment includes, without limitation, all amounts payable on the Pooled
Certificates pursuant to the Underlying Agreements following the Closing Date.
(b) In connection with such transfer and assignment, and
concurrently with its execution and delivery of this Agreement, the Depositor
shall have caused the Pooled Certificates to be registered in the book-entry
records of the Federal Reserve Banks in the name of the Trustee.
(c) The transfer of the Pooled Certificates and all other
assets constituting the Trust Fund is absolute and is intended by the parties
hereto as a sale.
(d) It is intended that the conveyances by the Depositor to
the Trustee of the Pooled Certificates as provided for in this Section 2.01
be construed as a sale by the Depositor to the Trustee of the Pooled
Certificates for the benefit of the Certificateholders. Further, it is not
intended that any such conveyance be deemed to be a pledge of the Pooled
Certificates by the Depositor to the Trustee to secure a debt or other
obligation of the Depositor. However, in the event that the Pooled Certificates
are held to be property of the Depositor, or if for any reason this Agreement is
held or deemed to create a security interest in the Pooled Certificates, then it
is intended that (a) this Agreement shall also be deemed to be a security
agreement within the meaning of Articles 8 and 9 of the New York Uniform
Commercial Code and the Uniform Commercial Code of any other applicable
jurisdiction; (b) the conveyance provided for in Section 2.01 shall be deemed to
be a grant by the Depositor to the Trustee of a security interest in all of the
Depositor's right (including the power to convey title thereto), title and
interest, whether now owned or hereafter acquired, in and to (1) the Pooled
Certificates, (2) all amounts payable pursuant to the Pooled Certificates in
accordance with the terms thereof and (3) any and all general intangibles
consisting of, arising from or relating to any of the foregoing, and all
proceeds of the conversion, voluntary or involuntary, of the foregoing into
cash, instruments, securities or other property, including without limitation
all amounts from time to time held in the Certificate Account, whether in the
form of cash, instruments, securities or other property; (c) the possession by
the Trustee or any agent of the Trustee of such items of property as constitute
instruments, money, negotiable documents or chattel paper shall be deemed to be
"possession by the secured party," or possession by a purchaser or a person
designated by such secured party, for purposes of perfecting the security
interest pursuant to the New York Uniform Commercial Code and the Uniform
Commercial Code of any other applicable jurisdiction (including, without
limitation, Section 9-305, 8-313 or 8-321 thereof); and (d) notifications to
persons holding such property, and acknowledgments, receipts or confirmations
from persons holding such property, shall be deemed notifications to, or
acknowledgments, receipts or confirmations from, financial intermediaries,
bailees or agents (as applicable) of the Trustee for the purpose of perfecting
such security interest under applicable law.
The Depositor and the Trustee, at the Depositor's or the
Majority Certificateholders' direction, shall, to the extent consistent with
this Agreement, take such reasonable actions as may be determined to be
necessary to ensure that, if this Agreement were deemed to create a security
interest in the Pooled Certificates, and the other property described above,
such security interest would be deemed to be a perfected security interest of
first priority under applicable law and will be maintained as such throughout
the term of this Agreement.
Section 2.02. ACCEPTANCE OF TRUST FUND BY TRUSTEE; INITIAL
ISSUANCE OF CERTIFICATES.
The Trustee acknowledges receipt of the Underlying Agreements,
the most recent Pooled Certificate Distribution Date Statements and the receipt
by it and the transfer, delivery and assignment to it of the Pooled
Certificates, in good faith and without notice of any adverse claim, and the
assignment to it of all other assets included in the Trust Fund and declares
that it holds and will hold the Pooled Certificates and all other assets
included in the Trust Fund in trust for the exclusive use and benefit of all
present and future Certificateholders in accordance with the terms of this
Agreement. Concurrently with such transfer, delivery and assignment and in
exchange therefor, pursuant to the written request of the Depositor executed by
an officer of the Depositor, the Trustee has executed and caused to be
authenticated and delivered to or upon the order of the Depositor, the
Certificates in authorized denominations evidencing the entire beneficial
ownership of the Trust Fund.
Until the Trust Fund is terminated in accordance with Section
7.01, except as provided herein, the Trustee shall not assign, sell, dispose of
or transfer any interest in the Pooled Certificates or any other asset
constituting the Trust Fund or permit the Pooled Certificates or any other asset
constituting the Trust Fund to be subjected to any lien, claim or encumbrance
arising by, through or under the Trustee or any person claiming by, through or
under the Trustee.
Section 2.03. REPRESENTATIONS AND WARRANTIES OF THE
DEPOSITOR AND THE TRUSTEE.
(a) The Depositor hereby represents and warrants to the
Trustee and for the benefit of the Certificateholders, as of the Closing Date,
that:
(i) The Depositor is a corporation duly organized,
validly existing and in good standing under the laws of the
State of Delaware, and the Depositor is possessed of all
licenses necessary to carry on its business.
(ii) The execution and delivery of this Agreement by
the Depositor, and the performance and compliance with the
terms of this Agreement by the Depositor, will not violate the
Depositor's certificate of incorporation or bylaws or
constitute a default (or an event which, with notice or lapse
of time, or both, would constitute a default) under, or result
in the breach of, any material agreement or other instrument
to which it is a party or which is applicable to it or any of
its assets.
(iii) The Depositor has the full right, power and
authority to enter into and consummate all transactions
contemplated by this Agreement, including but not limited to
selling the Pooled Certificates to the Trustee, has duly
authorized the execution, delivery and performance of this
Agreement, and has duly executed and delivered this Agreement.
(iv) This Agreement, assuming due authorization,
execution and delivery by the Trustee, constitutes a valid,
legal and binding obligation of the Depositor, enforceable
against the Depositor in accordance with the terms hereof,
subject to (A) applicable bankruptcy, insolvency,
reorganization, moratorium and other laws affecting the
enforcement of creditors' rights generally, and (B) general
principles of equity, regardless of whether such enforcement
is considered in a proceeding in equity or at law.
(v) The Depositor is not in violation of, and its
execution and delivery of this Agreement and its performance
and compliance with the terms of this Agreement will not
constitute a violation of, any law, any order or decree of any
court or arbiter, or any order, regulation or demand of any
federal, state or local governmental or regulatory authority,
which violation is likely to affect materially and adversely
either the ability of the Depositor to perform its obligations
under this Agreement or the financial condition of the
Depositor.
(vi) No litigation is pending or, to the best of the
Depositor's knowledge, threatened against the Depositor which,
if determined adversely to the Depositor, would prohibit the
Depositor from entering into this Agreement or is likely to
materially and adversely affect either the ability of the
Depositor to perform its obligations under this Agreement or
the financial condition of the Depositor.
(vii) The Depositor was, immediately prior to the
transfer of the Pooled Certificates to the Trustee, the sole
owner thereof free and clear of any lien, pledge, charge or
encumbrance of any kind (except any lien created by this
Agreement).
(viii) The Depositor acquired the Pooled Certificates
in good faith without notice of any adverse claim, lien,
charge, encumbrance or security interest (including without
limitation, federal tax liens or liens arising under ERISA).
(ix) The Depositor has not assigned any interest in
the Pooled Certificates or any distributions thereon, except
as contemplated herein.
(x) The Trustee, in its capacity as a Pooled
Certificateholder, will be entitled to distributions under the
Underlying Agreements equal to all distributions of interest
and principal made on the Pooled Certificates.
(xi) As of the Closing Date, the Pooled Certificates
having principal balances have an aggregate principal balance
greater than or equal to the Original Principal Balance.
(xii) The information relating to the Pooled
Certificates set forth in Schedule A is true and correct in
all material respects.
(xiii) Each Pooled Certificate is an Uncertificated
Security (as such term is defined in Article 8 of the Uniform
Commercial Code) registered on the books of the Federal
Reserve Banks or the Depository in the name of the Trustee or
its financial intermediary on behalf of the Trustee.
(xiv) The Pooled Certificates are REMIC regular
interests.
(xv) The Depositor has no actual knowledge after
reasonable inquiry that (a) each trust issuing each Pooled
Certificate was not duly created and is not validly existing
and (b) each Pooled Certificate (1) was not validly issued by
such trust and (2) is not outstanding, (3) is not the legal,
valid, binding and enforceable obligation of such trust and
(4) is not entitled to the benefits of the pooling and
servicing agreement, indenture, trust agreement or other
document pursuant to which such Pooled Certificate was issued
(except as limited by bankruptcy, insolvency or other similar
laws affecting the enforcement of creditors' rights generally
or to the extent that such enforceability may be subject to
the exercise of judicial discretion in accordance with general
equitable principles).
(b) The Trustee hereby represents and warrants to the
Depositor and for the benefit of the Certificateholders, as of the Closing Date,
that:
(i) The Trustee is a national banking association,
duly organized and validly existing under the laws of the
United States of America.
(ii) The execution and delivery of this Agreement by
the Trustee, and the performance and compliance with the terms
of this Agreement by the Trustee, will not violate the
Trustee's charter or bylaws or constitute a default (or an
event which, with notice or lapse of time, or both, would
constitute a default) under, or result in the breach of, any
material agreement or other instrument to which it is a party
or which is applicable to it or any of its assets.
(iii) The Trustee has the full power and authority to
enter into and consummate all transactions contemplated by
this Agreement, has duly authorized the execution, delivery
and performance of this Agreement, and has duly executed and
delivered this Agreement.
(iv) This Agreement, assuming due authorization,
execution and delivery by the Depositor, constitutes a valid,
legal and binding obligation of the Trustee, enforceable
against the Trustee in accordance with the terms hereof,
subject to (A) applicable bankruptcy, insolvency,
reorganization, moratorium and other laws affecting the
enforcement of creditors' rights generally, and (B) general
principles of equity, regardless of whether such enforcement
is considered in a proceeding in equity or at law.
(v) The Trustee is not in violation of, and its
execution and delivery of this Agreement and its performance
and compliance with the terms of this Agreement will not
constitute a violation of, any law, any order or decree of any
court or arbiter, or any order, regulation or demand of any
federal, state or local governmental or regulatory authority,
which violation is likely to affect materially and adversely
either the ability of the Trustee to perform its obligations
under this Agreement or the financial condition of the
Trustee.
(vi) No litigation is pending or, to the best of the
Trustee's knowledge, threatened against the Trustee which
would prohibit the Trustee from entering into this Agreement
or is likely to materially and adversely affect either the
ability of the Trustee to perform its obligations under this
Agreement or the financial condition of the Trustee.
(vii) The Pooled Certificates, with the exception of
Pooled FNMA 96-63/Z Certificates, will be held in the
Trustee's account at the Federal Reserve Bank in Minneapolis,
Minnesota and Pooled FNMA 96-63/Z Certificates will be held in
the Trustee's account at the Depository; the information
relating to the Pooled Certificates set forth on Schedule A
hereto conforms to information set forth on the face of the
Pooled Certificates and the most recent Pooled Certificate
Distribution Date Statements, as applicable; it has acquired
the Pooled Certificates on behalf of the Certificateholders
from the Depositor in good faith, for value, and,
to the best of the Trustee's knowledge, without notice or
actual knowledge of any adverse claim, lien, charge,
encumbrance or security interest (including, without
limitation, federal tax liens or liens arising under ERISA);
it has not and will not, in any capacity, assert any claim or
interest in the Pooled Certificates and will hold such Pooled
Certificates and the proceeds thereof in trust pursuant to the
terms of this Agreement; and it has not encumbered or
transferred its right, title or interest in the Pooled
Certificates.
(c) It is understood and agreed that the foregoing
representations and warranties shall survive the execution and delivery of this
Agreement. Upon discovery by either party hereto of a breach of any of the
foregoing representations and warranties which materially and adversely affects
the interests of the Certificateholders or either party hereto, the party
discovering such breach will give prompt written notice thereof to the other
party hereto and to the Certificateholders. Within thirty (30) days of the
earlier of either discovery by or notice to the Depositor of any breach of a
representation or warranty of the Depositor that materially and adversely
affects the interests of the Certificateholders, the Depositor shall use its
best efforts promptly to cure such breach in all material respects and, if such
breach cannot be cured, the Depositor shall, at the election of the Majority
Certificateholders, repurchase each Pooled Certificate affected by the breach at
the Repurchase Price. If the Depositor is to repurchase Pooled Certificates, the
Trustee shall promptly determine the Repurchase Price in accordance with the
definition thereof. Repurchase of any of the Pooled Certificates pursuant to the
foregoing provisions of this Section 2.03(c) shall be accomplished by (i)
deposit in the Certificate Account on the Business Day prior to the next
succeeding Distribution Date of the amount of the Repurchase Price and (ii)
amending Schedule A hereto to remove the related Deleted Pooled Certificates.
Section 2.04. SUBSTITUTION OF POOLED FNMA CERTIFICATES.
Notwithstanding anything to the contrary in this Agreement, in lieu of
repurchasing a Pooled Certificate pursuant to Section 2.03(c), the Depositor
may, no later than the date by which such repurchase by the Depositor would
otherwise be required, tender to the Trustee a Substitute Pooled Certificate
accompanied by an Officer's Certificate of the Depositor that such Substitute
Pooled Certificate conforms to the requirements set forth in the definition of
"Substitute Pooled Certificate"; PROVIDED, HOWEVER, that substitution pursuant
to this Section 2.04 in lieu of repurchase shall not be permitted after the
termination of the two-year period beginning on the Closing Date. The Trustee
shall accept any such Substitute Pooled Certificate, which shall thereafter be
deemed to be a Pooled Certificate hereunder. In the event of such a
substitution, payments received on the Substitute Pooled Certificate for the
month in which the substitution occurs shall be the property of the Depositor
and payments received on the Deleted Pooled Certificate during such month
shall be the property of the Trust Fund. Upon acceptance of the Substitute
Pooled Certificate, the Trustee shall release to the Depositor and shall execute
and deliver all instruments of transfer or assignment, without recourse, in form
as provided to it as are necessary to vest in the Depositor title to and rights
under the related Deleted Pooled Certificate released pursuant to this Section
2.04. The Depositor shall deliver the documents related to the Substitute Pooled
Certificate in accordance with the provisions of Section 2.01. The
representations and warranties set forth in 2.03(a) concerning the Pooled
Certificates shall be deemed to have been made by the Depositor with respect to
each Substitute Pooled Certificate as of the date of acceptance of such
Substitute Pooled Certificate by the Trustee. On or prior to the date of
substitution, the Trustee shall (i) amend Schedule A hereto, to reflect such
substitution and shall provide a copy of such amended Schedule to the Depositor
and the Rating Agencies and (ii) provide written acknowledgment to the Depositor
of the receipt by it and the transfer, delivery and assignment to it of the
related Substitute Pooled Certificate, in good faith and without notice of any
adverse claim, and the assignment to it of all other related assets to be
included in the Trust Fund.
ARTICLE III
ADMINISTRATION OF THE POOLED CERTIFICATES;
PAYMENTS AND REPORTS TO CERTIFICATEHOLDERS
Section 3.01. ADMINISTRATION OF THE TRUST FUND AND THE
POOLED CERTIFICATES.
If at any time the Trustee, as a holder of a Pooled
Certificate, is requested in such capacity, whether by a Certificateholder, a
holder of a certificate of an 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
an amendment of any Underlying Agreement, the Trustee shall promptly notify all
of the Certificateholders and the Depositor of such request and of its planned
course of action with respect thereto and shall, in its capacity as a holder of
Pooled Certificates, 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 request, as the Majority Certificateholders shall direct in
writing. The Trustee shall promptly furnish to the Depositor and, upon the
written request of a Certificateholder, such Certificateholder, all notices,
statements, reports or other information that it receives as holder of the
Pooled Certificates.
Section 3.02. COLLECTION OF MONIES.
(a) In connection with its receipt of any distribution on the
Pooled Certificates on any Pooled Certificate Distribution Date (or such later
date on which the Trustee shall receive the related Pooled Certificate
Distribution Date Statement), the Trustee shall review each related Pooled
Certificate Distribution Date Statement and shall confirm that the aggregate
amount of such distribution received is consistent with the information
contained therein (it being understood that the Trustee shall be entitled to
rely on the accuracy and correctness of the information set forth on such
statements).
(b) If the Trustee receives a Notice of Final Distribution in
respect of any of the Pooled Certificates, the Trustee shall present and
surrender any related Pooled Certificates which are 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 Certificates for distribution in accordance with
Section 3.05 hereof on the next succeeding Distribution Date.
Section 3.03. ESTABLISHMENT OF CERTIFICATE ACCOUNT AND
TRUSTEE FEE ESCROW ACCOUNT; DEPOSITS THEREIN.
(a) The Trustee, for the benefit of the Certificateholders,
shall establish and maintain one or more interest bearing trust accounts
(collectively, the "Certificate Account"), each of which shall be an Eligible
Account, entitled "First Trust National Association, as trustee for the
registered holders of Bear Stearns Mortgage Securities Inc. Trust Certificates,
Series 1997-5", held in trust by the Trustee for the benefit of the
Certificateholders. The Trustee shall cause all distributions received on the
Pooled Certificates by the Trustee in its capacity as holder of the Pooled
Certificates, from whatever source, and all amounts received by it representing
payment of a Repurchase Price pursuant to Section 2.03(c) and 7.01(a)(i),
subsequent to the Closing Date to be deposited directly into the Certificate
Account. The Certificate Account is initially located at the Trustee. 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
Certificates are received by the Trustee prior to the related Distribution
Date, the Trustee may invest such funds deposited in the Certificate Account in
one or more Permitted Investments held in the name of the Trustee and shall
receive as compensation, in addition to the Trustee Fee, any interest or
investment income earned on such Permitted Investments, which may be withdrawn
by the Trustee on each Distribution Date and shall not constitute Available
Funds. Notwithstanding the foregoing, no such Permitted Investment may mature
later than the day before such related Distribution Date and no such investment
shall be sold prior to its maturity date. The amount of any losses incurred in
respect of any such investments shall be deposited in the Certificate Account by
the Trustee out of its own funds immediately as realized.
(c) The Trustee shall establish and maintain one or more
interest bearing trust accounts (collectively, the "Trustee Fee Escrow
Account"), each of which shall be an Eligible Account, entitled "First Trust
National Association, as trustee for the registered holders of Bear Stearns
Mortgage Securities Inc. Pass-Through Certificates, Series 1997-5," held in
trust (but outside of the Trust Fund established hereby) by the Trustee. The
Trustee Fee Escrow Account is initially located at the Trustee. The Trustee
shall give notice to the Depositor and the Certificateholders of any new
location of the Trustee Fee Escrow Account prior to any change thereof. On each
Distribution Date the Trustee shall transfer from the Certificate Account to the
Trustee Fee Escrow Account the Escrow Amount for such Distribution Date. The
Trustee shall invest any amounts deposited in the Trustee Fee Escrow Account in
one or more Permitted Investments held in the name of the Trustee in trust. No
such Permitted Investment may mature later than the day before any Distribution
Date which in the Depositor's sole discretion is believed to be a Distribution
Date upon which the Trustee Fee may exceed interest received on the Pooled
Certificates. No investment shall be sold prior to its maturity date unless the
investment must be sold to pay the Trustee Fee. The amount of any losses
incurred in respect of any investment shall be deposited in the Trustee Fee
Escrow Account by the Depositor out of its own funds immediately as realized.
All interest and investment income on amounts in Trustee Fee Escrow Account
shall be retained in the Trustee Fee Escrow Account. On any Distribution Date on
which the Trustee Fee exceeds the interest received from the Pooled
Certificates, the Trustee may withdraw the amount of the excess from the Trustee
Fee Escrow Account, and pay such excess to the Trustee in its individual
capacity. If the Trustee resigns or is removed and a successor trustee is
appointed, any amounts on deposit in the Trustee Fee Escrow Account shall
thereafter be held in the same manner by and for the benefit of the successor
trustee. Upon the termination of the Trust Fund, any amount (including earnings)
remaining in the Trustee Fee Escrow Account shall be paid to the Depositor.
(d) The Depositor shall cause all distributions received on
the Pooled Certificates by the Depositor or any of its Affiliates after the
Closing Date to be deposited directly into the Certificate Account.
Section 3.04. PERMITTED WITHDRAWALS FROM THE CERTIFICATE
ACCOUNT.
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 3.05;
(ii) to pay to the Person entitled thereto any amount
deposited in the Certificate Account in error;
(iii) to clear and terminate the Certificate Account
upon the termination of this Agreement; and
(iv) to pay itself, as additional compensation, the
net reinvestment income permitted to be paid to it as provided
in Section 3.03(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 3.04 and in
Section 3.05.
Section 3.05. DISTRIBUTIONS.
(a) On each Distribution Date, the Trustee shall apply amounts
in the Certificate Account representing Available Funds in the following manner
and order of priority, in each case to the extent of the remaining Available
Funds:
FIRST, from amounts with respect to interest
received on the Pooled Certificates, to the
Trustee, to pay the portion of the Trustee
Fee not being covered by a withdrawal from
the Trustee Fee Escrow Account and, after
payment of the Trustee Fee, to deposit the
Escrow Amount in the Trustee Fee Escrow
Account;
SECOND, from amounts with respect to
principal received on the Pooled
Certificates, to the Certificateholders an
amount with respect to principal, if any,
such that the principal balance of the
Certificates after such distribution is
equal to the aggregate balance of the Pooled
Certificates; and
THIRD, from the remaining Available Funds,
to the Certificateholders as interest.
If the Trustee has not received a distribution on, or the
Pooled Certificate Distribution Date Statement with respect to, any of the
Pooled Certificates by the Determination Time, the distribution allocable to
such Pooled Certificates will not be made on the applicable Distribution Date,
but, (i) if such distribution and such Pooled Certificate Distribution Date
Statement are received by noon, Eastern Standard Time, on the third Business Day
after the Determination Time, the Trustee will make the distribution on the
third Business Day after the Determination Time (a "Supplemental Distribution
Date") or (ii) if received after noon, Eastern Standard Time, on the third
Business Day after the Determination Time, it will be made on the next
succeeding Distribution Date, and in neither case will additional interest be
paid thereon. For accounting purposes, each Distribution Date and, if
applicable, the related Supplemental Distribution Date is deemed to occur in the
same month as the concurrent or immediately preceding Pooled Certificate
Distribution Date.
(b) All distributions made to Certificateholders pursuant to
Section 3.05(a) on each Distribution Date shall be allocated PRO RATA among the
outstanding Certificates based upon their respective Percentage Interests and,
except in the case of the final distribution to the Certificateholders, shall be
made to the Holders of record on the related Record Date. Distributions to any
Certificateholder on any Distribution Date shall be made by wire transfer of
immediately available funds to the account of such Certificateholder at a bank
or other entity having appropriate facilities therefor, if such
Certificateholder shall have so notified the Trustee in writing (which wiring
instructions may be in the form of a standing order applicable to all future
Distribution Dates) no less than five Business Days prior to the related Record
Date (or, in the case of the initial Distribution Date, no later than the
related Record Date) and is the registered owner of Certificates with an
aggregate initial Certificate Balance of not less than $1,000,000, or otherwise
by check mailed by first class mail to the address of such Certificateholder
appearing in the Certificate Register. Final distribution to each
Certificateholder will be made in like manner, but only upon presentment and
surrender of such Certificate at the Corporate Trust Office or such other
location specified in the notice to Certificateholders of such final
distribution.
(c) Notwithstanding any other provision of this Agreement, the
Trustee shall comply with all federal withholding requirements respecting
payments to Certificateholders of 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.
(d) The Trustee may conclusively rely on the information set
forth in the Pooled Certificate Distribution Date Statements in making the
calculations called for in this Section 3.05. If the information available to
the Trustee in any Pooled Certificate Distribution Date Statement is
insufficient to make the calculations provided for in this Section 3.05, the
Trustee shall promptly request FHLMC, with respect to the Pooled FHLMC
Certificates, and FNMA, with respect to the Pooled FNMA Certificates, 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 FHLMC or FNMA, the Trustee shall not be responsible for making
any such adjustment.
Section 3.06. STATEMENTS TO CERTIFICATEHOLDERS.
On each Distribution Date, the Trustee shall prepare, and
shall forward by mail, a statement to each Certificateholder, the Depositor and
the Rating Agencies stating:
(i) the Available Funds for such Distribution Date;
(ii) the interest distribution amount and the
principal distribution amount for such Distribution Date and,
with respect to each, the components thereof as reported in
the related Pooled Certificate Distribution Date Statements or
other information received by the Trustee from FHLMC or FNMA
with respect to the Pooled Certificates;
(iii) the Class Balance before and after applying
payments on such Distribution Date;
(iv) the effective interest rate on the
Certificates for such Distribution Date;
(v) the outstanding principal and/or notional amount,
as the case may be, immediately prior to and after taking into
account distributions made on such Distribution Date, and the
current interest rate on each of the Pooled Certificates for
such Distribution Date; and
(vi) the amount of the Trustee Fee for such
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
$1000 of principal face amount. The Trustee's responsibility for reporting the
above information is limited to the availability, timeliness, and accuracy of
the information set forth in the Pooled Certificate Distribution Date Statements
and any additional written information requested by the Trustee with respect to
the Pooled Certificates. 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.
In addition, the Trustee promptly will furnish to the
Depositor, and upon the written request of a Certificateholder, to such
Certificateholder, copies of any notices, statements, reports or other
communications, received by the Trustee in its capacity as a holder of Pooled
Certificates.
On or before March 31st of each calendar year, commencing in
1998, the Trustee shall prepare and deliver by first class mail 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 regular monthly report to Certificateholders, as set forth
in clauses (ii) and (iv) above aggregated for such prior calendar year or in the
case of a Certificateholder, the applicable portion thereof during which such
Person was a Certificateholder. Such obligation of the Trustee shall be deemed
to have been satisfied to the extent that substantially comparable information
shall be provided by the Trustee pursuant to any requirements of the Code and
regulations thereunder as from time to time are in force.
The Trustee shall be responsible for preparing, at its own
expense, signing and filing, on behalf of the Trust Fund, federal income tax and
information returns with the Internal Revenue Service ("IRS") and Minnesota
income tax returns and the returns of any other state taxing authority the
necessity of filing of which shall have been confirmed to the Trustee in writing
either by the delivery of an Opinion of Counsel to such effect or by the
delivery to the Trustee of a written notification to such effect by the taxing
authority of any such state. The Depositor shall provide the Trustee within 10
days of the Closing Date all information deemed necessary by the Trustee to
fulfill its obligations under this paragraph. The Trustee shall furnish to each
Certificateholder at the time required by law such information reports or
returns as are required by applicable federal, state or local law with respect
to the Trust Fund to enable Certificateholders to prepare their tax returns and
will furnish comparable information to the IRS and other taxing authorities as
and when required by law to do so.
Section 3.07. ACCESS TO CERTAIN DOCUMENTATION AND INFORMATION.
The Trustee shall provide to the Depositor access to all
reports, documents and records maintained by the Trustee in respect of its
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 Trustee.
Section 3.08. CALCULATION OF MONTHLY DISTRIBUTION AMOUNT.
All calculations of the Monthly Distribution Amount for any
Distribution Date shall be performed by the Trustee in reliance on the
information provided to it in the applicable Pooled Certificate Distribution
Date Statements and any additional written information requested by the Trustee
with respect to the Pooled Certificates. The Trustee 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 3.06).
ARTICLE IV
THE CERTIFICATES
Section 4.01. THE CERTIFICATES.
(a) The Depository, the Depositor and the Trustee have entered
into a letter agreement dated as of August 29, 1997 (the "Depository
Agreement"). Except as provided in Subsection 4.01(b), the Certificates shall at
all times remain registered in the name of the Depository or its nominee and at
all times: (i) registration of such Certificates may not be transferred by the
Trustee except to a successor to the Depository; (ii) ownership and transfers of
registration of such Certificates on the books of the Depository shall be
governed by applicable rules established by the Depository; (iii) the Depository
may collect its usual and customary fees, charges and expenses from its
Depository Participants; (iv) the Trustee shall deal with the Depository as
representative of the Certificate Owners for purposes of exercising the rights
of Certificateholders under this Agreement, and requests and directions for and
votes of such representative shall not be deemed to be inconsistent if they are
made with respect to different Certificate Owners; and (v) the Trustee may rely
and shall be fully protected in relying upon information furnished by the
Depository with respect to its Depository Participants.
All transfers by Certificate Owners of Certificates
shall be made in accordance with the procedures established by the
Depository Participant or brokerage firm representing such Certificate Owners.
Each Depository Participant shall only transfer Certificates of Certificate
Owners it represents or of brokerage firms for which it acts as agent in
accordance with the Depository's normal procedures.
(b) If (i)(A) the Depositor advises the Trustee in writing
that the Depository is no longer willing or able to properly discharge its
responsibilities as Depository and (B) the Trustee or the Depositor is unable to
locate a qualified successor within 30 days or (ii) the Depositor at its option
advises the Trustee in writing that it elects to terminate the book-entry system
through the Depository, the Trustee shall request that the Depository notify all
Certificate Owners of the occurrence of any such event and of the availability
of definitive, fully registered Certificates (the "Definitive Certificates") to
Certificate Owners requesting the same. Upon surrender to the Trustee of the
Certificates by the Depository, accompanied by registration instructions from
the Depository for registration, the Trustee shall issue the Definitive
Certificates. Neither the Depositor 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.
(c) The Certificates shall be substantially in the form set
forth in Exhibit A hereto. The Certificates shall be executed by manual or
facsimile signature on behalf of the Trustee in its capacity as trustee
hereunder by an authorized officer. Certificates bearing the manual or facsimile
signatures of individuals who were at any time the proper officers of the
Trustee shall be entitled to all benefits under this Agreement, subject to the
following sentence, 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
Certificate Registrar 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.
Pending the preparation of Definitive Certificates,
the Trustee may sign and the Certificate Registrar may authenticate
temporary Certificates that are printed, lithographed or typewritten, in
authorized denominations for Certificates, substantially of the tenor of the
Definitive Certificates in lieu of which they are issued and with such
appropriate insertions, omissions, substitutions and other variations as the
officers or authorized signatories executing such Certificates may determine, as
evidenced by their execution of such Certificates. If temporary Certificates are
issued, the Depositor will cause Definitive Certificates to be prepared without
unreasonable delay. After the preparation of Definitive Certificates, the
temporary Certificates shall be exchangeable for Definitive Certificates upon
surrender of the temporary Certificates at the office of the Trustee, without
charge to the Holder. Upon surrender for cancellation of any one or more
temporary Certificates, the Trustee shall sign and the Certificate Registrar
shall authenticate and deliver in exchange therefor a like aggregate principal
amount, in authorized denominations, of Definitive Certificates. Until so
exchanged, such temporary Certificates shall in all respects be entitled to the
same benefits as Definitive Certificates.
(d) The Certificates will be registered as a single
Certificate held by a nominee of the Depository, and beneficial interests will
be held by investors through the book-entry facilities of the Depository in
minimum denominations of $25,000 and increments of $1 in excess thereof, except
that one Certificate may be issued in a different amount so that the sum of the
denominations of all outstanding Certificates shall equal the Original Class A-1
Balance.
(e) If the Trust is terminated pursuant to Section
7.01(a)(iii), the book-entry system through the Depository shall be terminated
by the Depositor and the Trustee and the Trustee shall request that the
Depository notify all Certificate Owners of the occurrence of such event and
that, following the Final Distribution Date, the Certificate Owners as of the
Record Date for the Final Distribution Date will be required to hold their pro
rata portion of the Remaining Pooled Certificates in the book-entry records of
the Federal Reserve Banks and that the Trustee will not release any further
distributions in respect of the Remaining Pooled Certificates to a Certificate
Owner until such Certificate Owner or the Depository has provided the Trustee
with sufficient information to transfer such Certificate Owner's pro rata
portion of the Remaining Pooled Certificates in the book-entry records of the
Federal Reserve Banks from the Trustee to such Certificate Owner.
Section 4.02. REGISTRATION OF TRANSFER AND EXCHANGE OF
CERTIFICATES.
(a) At all times during the term of this Agreement, there
shall be maintained at the office of a registrar (the "Certificate Registrar") a
register (the "Certificate Register") in which, subject to such reasonable
regulations as the Certificate Registrar may prescribe, the Certificate
Registrar shall provide for the registration of Certificates and of transfers
and exchanges of Certificates as herein provided. The Trustee is initially
appointed (and hereby agrees to act in accordance with the terms hereof) as
Certificate Registrar for the purpose of registering Certificates and transfers
and exchanges of Certificates as herein provided. For so long as the Trustee
acts as Certificate Registrar, its Corporate Trust Office shall constitute the
offices of the Certificate Registrar maintained for such purposes. The
Certificate Registrar may appoint, by a written instrument delivered to the
Depositor, any other bank or trust company in New York to act as Certificate
Registrar under such conditions as the predecessor Certificate Registrar may
prescribe, provided that the predecessor Certificate Registrar shall not be
relieved of any of its duties or responsibilities hereunder by reason of such
appointment. If the Trustee resigns or is removed in accordance with the terms
hereof, the successor trustee shall immediately succeed to its predecessor's
duties as Certificate Registrar. The Depositor and the Trustee shall have the
right to inspect the Certificate Register or to obtain a copy thereof at all
reasonable times, and to rely conclusively upon a certificate of the Certificate
Registrar as to the information set forth in the Certificate Register.
Every Certificateholder agrees with the Certificate Registrar
and the Trustee that neither the Certificate Registrar, nor the Trustee shall be
held accountable by reason of the disclosure of any such information as to the
names and addresses of the Certificateholders hereunder, regardless of the
source from which such information was derived.
(b) Subject to the preceding subsections, upon surrender for
registration of transfer of any Certificate at the offices of the Certificate
Registrar maintained for such purpose, the Trustee shall execute and the
Certificate Registrar shall authenticate and deliver, in the name of the
designated transferee or transferees, one or more new Certificates of a like
aggregate Percentage Interest.
(c) At the option of any Holder, its Certificates may be
exchanged for other Certificates of authorized denominations of a like aggregate
Percentage Interest, upon surrender of the Certificates to be exchanged at the
offices of the Certificate Registrar maintained for such purpose. Whenever any
Certificates are so surrendered for exchange, the Trustee shall execute and the
Certificate Registrar shall authenticate and deliver the Certificates which the
Certificateholder making the exchange is entitled to receive.
(d) Every Certificate presented or surrendered for transfer or
exchange shall (if so required by the Trustee) be duly endorsed by, or be
accompanied by a written instrument of transfer in the form satisfactory to the
Trustee duly executed by, the Holder thereof or his attorney duly authorized in
writing.
(e) No service charge shall be made for any transfer or
exchange of Certificates, but the Trustee may require payment of a sum
sufficient to cover any tax or governmental charge that may be imposed in
connection with any transfer or exchange of Certificates.
(f) All Certificates surrendered for transfer and exchange
shall be destroyed by the Certificate Registrar without liability on its part.
Section 4.03. MUTILATED, DESTROYED, LOST OR STOLEN
CERTIFICATES.
If (i) any mutilated Certificate is surrendered to the
Certificate Registrar, or the Trustee and the Certificate Registrar receive
evidence to their satisfaction of the destruction, loss or theft of any
Certificate, and (ii) (except in the case of a mutilated Certificate) there is
delivered to the Trustee and the Certificate Registrar such agreement, 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 the Certificate Registrar that such
Certificate has been acquired by a bona fide purchaser, the Trustee shall
execute and the Certificate Registrar shall authenticate and deliver, in
exchange for or in lieu of any such mutilated, destroyed, lost or stolen
Certificate, a new Certificate of like tenor and Percentage Interest but bearing
a number not contemporaneously outstanding. Upon the issuance of any new
Certificate under this Section, the Trustee may require the payment by the
Certificateholder of a sum sufficient to cover any tax or other governmental
charge that may be imposed in relation thereto. Any duplicate Certificate issued
pursuant to this Section shall constitute complete and indefeasible evidence of
ownership in the Trust Fund, as if originally issued, whether or not the lost,
stolen or destroyed Certificate shall be found at any time.
Section 4.04. PERSONS DEEMED OWNERS.
Prior to due presentment of a Certificate for registration of
transfer, the Depositor, the Trustee, the Certificate Registrar and any agent of
the Depositor, the Trustee or the Certificate Registrar 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 3.05 and for all
other purposes whatsoever, and neither the Depositor, the Trustee, the
Certificate Registrar nor any agent of the Depositor, the Trustee or the
Certificate Registrar shall be affected by notice to the contrary.
Section 4.05. EXCHANGE OF CERTIFICATES.
(a) Beginning on the Distribution Date in September 1998, any
Holder or Certificate Owner holding not less than 10% of the outstanding
principal amount of the Certificates shall have the option to exchange not less
than 10% of the outstanding principal amount of the Certificates for a pro rata
portion of each of the Pooled Certificates.
(b) Holders or Certificate Owners may exercise the option set
forth in Section 4.05(a) by delivering an Option Exercise Notice to the Trustee,
accompanied by the Option Exercise Fee, at least five Business Days prior to the
proposed Exchange Date, which must be a Business Day. An Option Exercise Notice
may not be revoked after delivery to the Trustee. The Trustee may refuse to
accept, or give effect to, any Option Exercise Notice that is incomplete or
defective, in its sole judgment, or not accompanied by the Option Exercise Fee.
(c) The Trustee shall be entitled to charge a fee, as
compensation, equal to the greater of (i) $500 and (ii) 0.02% of the outstanding
principal amount of the Certificates to be exchanged for Pooled Certificates.
(d) On the Exchange Date, the Trustee shall cause the transfer
of such Holder's or Certificate Owner's pro rata portion of the Remaining Pooled
Certificates in the book-entry records of the Federal Reserve Banks and the
Depository, as applicable, from the Trustee to such Holder or Certificate Owner.
ARTICLE V
THE TRUSTEE
Section 5.01. DUTIES OF TRUSTEE.
(a) 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 and the
Underlying Agreements; PROVIDED, HOWEVER, that the Trustee shall not be
responsible to determine, confirm or recalculate the accuracy or content of any
such resolution, certificate or other instrument furnished to it pursuant to
this Agreement. The Trustee shall notify the Certificateholders, and the Rating
Agencies of any such documents which do not materially conform to the
requirements of this Agreement in the event that the Trustee, after so
requesting of the party required to deliver the same, does not receive
satisfactorily corrected documents or a satisfactory explanation regarding any
such nonconformities.
The Trustee shall forward or cause to be forwarded
in a timely fashion the notices, reports and statements required to be
forwarded by the Trustee pursuant to Sections 3.01, 3.03, 3.06 and 7.01.
(b) No provision of this Agreement shall be construed to
relieve the Trustee from liability for its own negligent action, its own
negligent failure to act or its own willful misconduct; PROVIDED, HOWEVER, that:
(i) 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 by the
Depositor to the Trustee and which on their face, do not
contradict the requirements of this Agreement;
(ii) The Trustee shall not be personally liable for
an error of judgment made in good faith by a Responsible
Officer or Responsible Officers of the Trustee, unless it
shall be proved that the Trustee was negligent in ascertaining
the pertinent facts;
(iii) The Trustee shall not be personally liable with
respect to any action taken, suffered or omitted to be taken
by it in good faith in accordance with the direction of the
Certificate Insurer or the Majority Certificateholders in
accordance with the terms of this Agreement, as to the time,
method and place of conducting any proceeding for any remedy
available to the Trustee, or exercising any trust or power
conferred upon the Trustee, under this Agreement;
(iv) No provision in this Agreement shall require the
Trustee to expend or risk its own funds or otherwise incur any
personal 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 the Trustee shall have reasonable grounds
for believing that repayment of funds or adequate indemnity
against such risk or liability is not reasonably assured to
it; provided that this provision shall not be deemed to
abrogate the responsibilities undertaken by the Trustee
hereunder to perform routine administrative duties in
accordance with the terms hereof; and
(v) The Trustee shall not be deemed to have notice of
any fact or circumstance upon the occurrence of which it may
be required to take action hereunder unless a Responsible
Officer of the Trustee has actual knowledge of such event,
fact or circumstance or unless written notice of any such
event is received by the Trustee at its Corporate Trust
Office.
Section 5.02. CERTAIN MATTERS AFFECTING THE TRUSTEE
Except as otherwise provided in Section 5.01:
(i) The Trustee may rely and shall be protected in
acting or refraining from acting upon any resolution, Officers'
Certificate, certificate of auditors or any other certificate,
statement, instrument, opinion, report, notice, request, consent,
order, appraisal, bond or other paper or document reasonably 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
Opinion of Counsel shall be full and complete authorization and
protection in respect of any action taken or suffered or omitted by it
hereunder in good faith and in accordance with such Opinion of Counsel;
(iii) The Trustee shall be under no obligation to
exercise any of the trusts or powers vested in it by this Agreement or
to institute, conduct or defend any litigation hereunder or in relation
hereto at the request, order or direction of any of the
Certificateholders, pursuant to the provisions of this Agreement,
unless such Certificate holders shall have offered to the Trustee
reasonable security or indemnity against the costs, expenses and
liabilities which may be incurred therein or thereby;
(iv) The Trustee shall not be bound to make any
investigation into the facts or matters stated in any resolution,
certificate, statement, instrument, opinion, report, notice, request,
direction, consent, order or other paper or document, but the Trustee,
in its discretion, may make such further inquiry or investigation into
such facts or matters as it may see fit, and, if the Trustee shall
determine to make such further inquiry or investigation, it shall be
entitled to the extent reasonable under the circumstances to examine
the books, records and premises of such Person, personally or by agent
or attorney;
(v) 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; 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 or attorneys and shall not be liable for the default
or misconduct of any such agents or attorneys if selected with
reasonable care.
Section 5.03. TRUSTEE NOT LIABLE FOR CERTIFICATES OR POOLED
CERTIFICATES.
The recitals contained herein and in the Certificates (other than the
statements attributed to, and the representations and warranties of, the Trustee
in Article II and the signature of the Trustee on each Certificate) shall be
taken as the statements of the Depositor, and the Trustee assumes no
responsibility for their correctness. The Trustee makes no representations as to
the validity or sufficiency of this Agreement (other than as specifically set
forth in Section 2.03(b)) or of the Certificates (other than that the
Certificates shall be duly and validly executed by it as Trustee and
authenticated by it as Certificate Registrar) or of the Pooled Certificates or
any related document. Except as otherwise provided herein, 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, or for the use or
application of any funds paid to the Depositor in respect of the assignment and
delivery of the Pooled Certificates.
Section 5.04. TRUSTEE MAY OWN CERTIFICATES.
The Trustee in its individual or any other capacity may become
the owner or pledgee of Certificates with the same rights it would have if it
were not Trustee.
Section 5.05. TRUSTEE'S FEES; INDEMNIFICATION OF THE TRUSTEE.
(a) The Trustee shall withdraw the Trustee Fee, as
compensation, from the Certificate Account, and to the extent necessary, the
Trustee Fee Escrow Account, as provided in Sections 3.03(c) and 3.05 hereof.
(b) 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 5.05(b) 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 5.05(b) shall survive
any resignation or removal of the Trustee and appointment of a successor
trustee.
Section 5.06. ELIGIBILITY REQUIREMENTS FOR TRUSTEE.
The Trustee hereunder shall at all times be a trust company or
banking institution organized and doing business under the laws of the United
States of America or any State thereof, authorized under such laws to exercise
corporate trust powers, having a combined capital, surplus and undivided profits
of at least $50,000,000 (or shall be a member of a bank holding system, the
combined capital and surplus of which is at least $50,000,000) and subject to
supervision or examination by federal or state authority. If such trust company
or banking institution 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 the combined capital, surplus
and undivided profits of such trust company or banking institution shall be
deemed to be its combined capital and surplus as set forth in its most recent
report of condition so published. The Trustee shall at all times meet the
requirements of Section 26(a)(1) of the Investment Company Act and shall in no
event be an Affiliate of the Depositor or of any Person involved in the
organization or operation of the Depositor. In case at any time the Trustee
shall cease to be eligible in accordance with the provisions of this Section,
the Trustee shall resign immediately in the manner and with the effect specified
in Section 5.07.
Section 5.07. RESIGNATION AND REMOVAL OF THE TRUSTEE.
(a) The Trustee may upon 30 days' notice resign and be
discharged from the trusts hereby created by giving written notice thereof to
the Depositor and the Certificateholders. 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. If no successor trustee
shall have been so appointed and have accepted appointment within 30 days after
the giving of such notice of resignation, the resigning Trustee may petition any
court of competent jurisdiction for the appointment of a successor trustee.
(b) If at any time the Trustee shall cease to be eligible in
accordance with the provisions of Section 5.06 and shall fail to resign
after written request therefor by the Depositor or the Majority
Certificateholders, 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 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.
(c) Majority Certificateholders may at any time remove the
Trustee and appoint a successor trustee by written instrument or instruments, in
triplicate, signed by such Holders or their attorneys-in-fact duly authorized,
one complete set of which instruments shall be delivered to the Depositor, one
complete set to the Trustee so removed and one complete set to the successor so
appointed. A copy of such instrument shall be delivered to the
Certificateholders by the Depositor. All reasonable out-of-pocket costs and
expenses incurred in connection with such removal and replacement of the
Trustee, including without limitation, reasonable attorneys fees and expenses,
shall be borne by the party requesting such action.
(d) Notwithstanding anything to the contrary contained herein,
(i) any resignation or removal of the Trustee and appointment of a successor
trustee pursuant to any of the provisions of this Section shall become effective
only upon acceptance of appointment by the successor trustee as provided in
Section 5.08 and (ii) no entity may be appointed as a successor trustee if such
appointment would result in a withdrawal or downgrading of any then current
rating assigned to the Certificates by a Rating Agency.
Section 5.08. SUCCESSOR TRUSTEE.
(a) Any successor trustee appointed as provided in Section
5.07 shall execute, acknowledge and deliver to the Depositor, the
Certificateholders and to its predecessor trustee an instrument accepting such
appointment hereunder, and thereupon the resignation or removal of the
predecessor trustee shall become effective and the appointment of such successor
trustee shall become effective and such successor trustee, without any further
act, deed or conveyance, shall become fully vested with all the rights, powers,
duties and obligations of its predecessor hereunder, with the like effect as if
originally named as trustee herein. The predecessor trustee shall deliver to the
successor trustee the Pooled Certificates and related documents and statements
held by it hereunder, and the Depositor, the Trustee and the predecessor trustee
shall execute and deliver such instruments and do such other things as may be
required for more fully and certainly vesting and confirming in the successor
trustee all such rights, powers, duties and obligations.
(b) No successor trustee shall accept appointment as provided
in this Section unless at the time of such acceptance such successor trustee
shall be eligible under the provisions of Section 5.06.
(c) Upon acceptance of appointment by a successor trustee as
provided in this Section, the Depositor shall mail notice of the succession
of such trustee hereunder to all Certificateholders at their addresses as shown
in the Certificate Register. If the Depositor fails to mail such notice within
10 days after acceptance of appointment by the successor trustee, the successor
trustee shall cause such notice to be mailed at the expense of the Depositor.
Section 5.09. MERGER OR CONSOLIDATION OF TRUSTEE.
Any trust company or banking institution into which the
Trustee may be merged or converted or with which it may be consolidated or any
trust company or banking institution resulting from any merger, conversion or
consolidation to which the Trustee shall be a party, or any trust company or
banking institution succeeding to all or substantially all of the corporate
trust business of the Trustee, shall be the successor of the Trustee hereunder,
provided such trust company or banking institution shall be eligible under the
provisions of Section 5.06, 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. The Trustee shall mail notice of any such merger or
consolidation to the Depositor and to the Certificateholders at their address as
shown in the Certificate Register.
Section 5.10. APPOINTMENT OF CO-TRUSTEE OR SEPARATE TRUSTEE.
(a) Notwithstanding any other provisions hereof, at any time,
for the purpose of meeting any legal requirements of any jurisdiction in which
any part of the Trust 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 5.10, such powers,
duties, obligations, rights and trusts as the Trustee may consider necessary or
desirable. No co-trustee or separate trustee hereunder shall be required to meet
the terms of eligibility as a successor trustee under Section 5.06 hereunder;
provided, that if the co-trustee or separate trustee does not meet such
eligibility standards, the Trustee shall remain liable for its actions
hereunder, and no notice to Certificateholders of the appointment of
co-trustee(s) or separate trustee(s) shall be required under Section 5.08
hereof.
(b) In the case of any appointment of a co-trustee or separate
trustee pursuant to this Section 5.10 all rights, powers, duties and obligations
conferred or imposed upon the Trustee shall be conferred or imposed upon and
exercised or performed jointly by the Trustee and such separate trustee or
co-trustee, except to the extent that under any law of any jurisdiction in which
any particular act or acts are to be performed, the Trustee shall be incompetent
or unqualified to perform such act or acts, in which event such rights, powers,
duties and obligations (including the holding of title to the Trust Fund or any
portion thereof in any such jurisdiction) shall be exercised and performed by
such separate trustee or co-trustee at the direction of the Trustee.
(c) 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 V. 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.
(d) Any separate trustee or co-trustee may, at any time,
constitute the Trustee its agent or attorney-in-fact, with full power and
authority, to the extent not prohibited by law, to do any lawful act under or in
respect of this Agreement on its behalf and in its name. If any separate trustee
or co-trustee shall die, become incapable of acting, resign or be removed, all
of its estates, properties, rights, remedies 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.
ARTICLE VI
THE DEPOSITOR
Section 6.01. LIABILITY OF THE DEPOSITOR.
The Depositor shall be liable in accordance herewith only to
the extent of the respective obligations specifically imposed upon and
undertaken by the Depositor herein.
Section 6.02. MERGER, CONSOLIDATION OR CONVERSION 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 and the Certificates and to perform its 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, any thing herein to the contrary notwithstanding.
Section 6.03. 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 the Depositor
or any such other Person against any breach of a representation or warranty made
herein, or against any expense or liability specifically required to be borne
thereby pursuant to the terms hereof, or against any liability which would
otherwise be imposed by reason of willful misfeasance, bad faith or negligence
in the performance of obligations or duties hereunder, or by reason of reckless
disregard of such obligations and duties. The Depositor and any director,
officer, employee or agent of the Depositor may rely in good faith on any
document of any kind which, PRIMA FACIE, is properly executed and submitted by
any Person respecting any matters arising hereunder. Provided that such action
is not related to its representations made in or its duties under this
Agreement, the Depositor shall not be under any obligation to appear in,
prosecute or defend any action or proceeding unless such action in its opinion
does not involve it in any expense or liability.
ARTICLE VII
TERMINATION
Section 7.01. TERMINATION.
(a) The respective obligations and responsibilities of the
Depositor and the Trustee created hereby with respect to the Certificates (other
than the obligation to make certain payments and to send certain notices to
Certificateholders as hereinafter set forth) shall terminate upon the earlier of
(i) the repurchase by or at the direction of the Depositor of all Pooled
Certificates at the Repurchase Price therefor as of the date of such repurchase;
or (ii) the payment (or provision for payment) to the Certificateholders of all
amounts held by or on behalf of the Trustee and required to be paid to them
hereunder on the Final Distribution Date following receipt of the final
distribution to be made on the Pooled Certificates; or (iii) the Distribution
Date following the first Distribution Date on which the principal balance of all
but one of the Pooled Certificates has been reduced to zero; PROVIDED, HOWEVER,
that in no event shall the trust created hereby continue beyond the expiration
of twenty-one 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. The right of the Depositor or its designee
to repurchase all Pooled Certificates pursuant to Section 7.01(a)(i) shall be
exercisable only if the aggregate outstanding principal balance of such Pooled
Certificates of the time of any such repurchase is 10% or less than their
outstanding principal balance on the Closing Date.
(b) The Trustee shall, in accordance with Section 8.05, give a
Notice of Final Distribution to the Certificateholders, the Depositor and the
Rating Agencies as soon as practicable of the Distribution Date on which the
Trustee anticipates that the final distribution will be made on the
Certificates, which notice shall:
(i) specify the Distribution Date on which the
final distribution is anticipated to be
made to Certificateholders;
(ii) specify the amount of any such final
distribution, if known; and
(iii) state that the final distribution to
Certificateholders will be made only upon
presentment and surrender of Certificates at
the office of the Trustee therein specified.
If the Trust Fund is not terminated on the anticipated Distribution Date for any
reason, the Trustee shall promptly mail notice thereof to each
Certificateholder, the Depositor and to the Rating Agencies.
(c) Upon presentment and surrender of the Certificates by the
Certificateholders on the Final Distribution Date, the Trustee shall distribute
to the Certificateholders the amounts otherwise distributable on such
Distribution Date pursuant to Section 3.05(a). Any funds not distributed on the
Final Distribution Date because of the failure of any Certificateholders to
tender their Certificates shall be set aside and held in trust for the account
of the appropriate non-tendering Certificateholders, whereupon the Trust Fund
shall terminate. If any Certificates as to which Notice of Final Distribution
has been given pursuant to this Section 7.01 shall not have been surrendered for
cancellation within six months after the time specified in such notice, the
Trustee shall mail a second notice to the remaining Certificateholders, at their
last addresses shown in the Certificate Register, to surrender their
Certificates for cancellation in order to receive, from such funds held, the
final distribution with respect thereto. If within one year after the second
notice any Certificate shall not have been surrendered for cancellation, the
Trustee shall directly or through an agent, take reasonable steps to contact the
remaining Certificateholders concerning surrender of their Certificates. The
costs and expenses of maintaining such funds and of contacting
Certificateholders shall be paid out of the assets which remain held. If within
two years after the second notice any Certificates shall not have been
surrendered for cancellation, the Trustee shall segregate all amounts
distributable to the Holders thereof and shall thereafter hold such amounts for
the benefit of such Holders. No interest shall accrue or be payable to any
Certificateholder on any amount held as a result of such Certificateholder's
failure to surrender its Certificate(s) for final payment thereof in accordance
with this Section 7.01.
(d) If the option by the Depositor to repurchase or cause the
repurchase of all Pooled Certificates under Section 7.01(a)(i) above is
exercised, the Depositor and/or its designee shall deposit in the Certificate
Account, by 10:00 a.m., New York City time, on the applicable Distribution Date,
an amount equal to the Repurchase Price for the Pooled Certificates being
purchased by the Depositor. Upon the presentation and surrender of the
Certificates, the Trustee, as paying agent, shall distribute the Repurchase
Price as follows to the extent of such amount:
FIRST, to pay the Trustee Fee to the
Trustee;
SECOND, the amount otherwise distributable
to the Certificateholders on such Distribution Date but for such repurchase;
THIRD, to the Certificateholders as
distributions of interest, the interest portion included in the Repurchase
Price;
FOURTH, to the Certificateholders as
distributions of principal, the principal portion included in the Repurchase
Price, up to the outstanding Class A-1 Balance; and
FIFTH, to the extent of the balance, if
any, of such Repurchase Price still remaining, to the Certificateholders as
additional distributions of interest.
Upon deposit of the required Repurchase Price and delivery to the Trustee of an
Officer's Certificate from the Depositor certifying that such deposit of the
Repurchase Price in the Certificate Account has been made, following such final
Distribution Date, the Trustee shall promptly release to the Depositor and/or
its designee, the Pooled Certificates, subject to the Trustee's obligation to
hold any amounts payable to Certificateholders in trust without interest pending
final distributions pursuant to Section 7.01(c).
(e) If the principal balance of all but one of the Pooled
Certificates has been reduced to zero and the obligations of the Depositor and
the Trustee are to terminate as provided in Section 7.01(a)(iii), the Trustee
shall arrange for the distribution in kind (pro rata based on Certificate
Principal Balances) to the Certificateholders of the remaining Pooled
Certificate on the Distribution Date following the first Distribution Date on
which the principal balance of all but such remaining Pooled Certificates has
been reduced to zero.
ARTICLE VIII
MISCELLANEOUS PROVISIONS
Section 8.01. AMENDMENT.
(a) This Agreement may be amended from time to time by the
Depositor and the Trustee, without the prior consent of any Certificateholder:
(i) to cure any ambiguity;
(ii) to correct or supplement any provisions herein,
which may be inconsistent with any other provisions herein;
(iii) to make any other provisions with respect to
matters or questions arising under this Agreement which
shall not be materially inconsistent with the existing
provisions of this Agreement; and
(iv) to make such modifications as may be permitted
or required hereunder in connection with a repurchase or
substitution of a Pooled Certificate pursuant to Section
2.03(c) or 2.04 hereof.
provided that such amendment shall not, as evidenced by an Opinion of Counsel
delivered to the Trustee (the expense of which shall be paid for by the
Depositor), adversely affect in any material respect the interests of any
Certificateholder.
(b) This Agreement may also be amended from time to time by
the Depositor and the Trustee with the prior written consent of the Majority
Certificateholders for the purpose of adding any provisions to or changing in
any manner or eliminating any of the provisions of this Agreement or of
modifying in any manner the rights of the Certificateholders; PROVIDED, HOWEVER,
that no such amendment shall:
(i) reduce in any manner the amount of, or delay the
timing of, payments which are required to be distributed on
any Certificate without the consent of the Holder of such
Certificate;
(ii) modify the provisions of this Section 8.01
without the consent of the Holders of all Certificates; or
(iii) be made unless and until the Trustee shall have
received an Opinion of Counsel (at the expense of the party
seeking such amendment but in no event at the expense of the
Trust Fund) to the effect that such amendment shall not
adversely affect the status of the Trust as a grantor trust
for federal income tax purposes.
(c) Promptly after the execution of any such amendment the
Trustee shall furnish written notification of the substance of such amendment to
each Certificateholder. It shall not be necessary for the consent of
Certificateholders under this Section 8.01 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.
Section 8.02. COUNTERPARTS.
This Agreement may be executed simultaneously in any number of
counterparts, each of which counterparts shall be deemed to be an original, and
such counterparts shall constitute but one and the same instrument.
Section 8.03. LIMITATION ON RIGHTS OF CERTIFICATEHOLDERS.
(a) 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 to
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.
(b) No Certificateholder shall have any right to vote (except
as expressly provided for herein) or in any manner otherwise control the
operation and management of the Trust Fund, or the obligations of the parties
hereto, nor shall anything herein set forth, or contained in the terms of the
Certificates, be construed so as to constitute the Certificateholders from time
to time as partners or members of an association; nor shall any
Certificateholder be under any liability to any third party by reason of any
action taken by the parties to this Agreement pursuant to any provision hereof.
(c) No Certificateholder shall have any right by virtue of any
provision of this Agreement to institute any suit, action or proceeding in
equity or at law upon or under or with respect to this Agreement, unless such
Holder previously shall have given to the Trustee and the Depositor a written
notice of default hereunder, and of the continuance thereof, as herein-before
provided, and unless also the Majority Certificateholders 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 30 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. For the
prosecution and enforcement of the rights granted under this Section, each and
every Certificateholder and the Trustee shall be entitled to such relief as can
be given either at law or in equity.
Section 8.04. GOVERNING LAW.
This Agreement and the Certificates shall be construed in
accordance with the laws of the State of New York applicable to agreements made
and to be performed in said state (without reference to the conflicts of law
provisions of such state), and the obligations, rights and remedies of the
parties hereunder and the Certificateholders shall be determined in accordance
with such laws.
Section 8.05. NOTICES.
All communications provided for or permitted hereunder shall
be in writing and shall be deemed to have been duly given when delivered
to: (a) in the case of the Depositor, Bear Stearns Mortgage Securities Inc., 245
Park Avenue, New York, New York 10167, or such other address as may hereafter be
furnished to the Trustee in writing by the Depositor; (b) in the case of the
Trustee, First Trust National Association 180 East Fifth Street, St. Paul,
Minnesota 55101, Attention: Structured Finance, or such other address as may
hereafter be furnished to the Depositor in writing by the Trustee; (c) in the
case of Moody's, Moody's Investors Service, Inc., 99 Church Street, New York,
New York 10007, Attention: Mortgage Pass-Through Monitoring Group; and (d) in
the case of Fitch Investors Service, L.P., One State Street Plaza, 34th Floor,
New York, New York 10004.
Section 8.06. SEVERABILITY OF PROVISIONS.
If any one or more of the covenants, agreements, provisions or
terms of this Agreement shall be for any reason whatsoever held invalid, then
such covenants, agreements, provisions or terms shall be deemed severable from
the remaining covenants, agreements, provisions or terms of this Agreement and
shall in no way affect the validity or enforceability of the other provisions of
this Agreement or of the Certificates or the rights of the Holders thereof.
Section 8.07. SUCCESSORS AND ASSIGNS.
The provisions of this Agreement shall be binding upon and
inure to the benefit of the respective successors and assigns of the parties
hereto, and all such provisions shall inure to the benefit of the
Certificateholders.
Section 8.08. ARTICLE AND SECTION HEADINGS.
The article and section headings herein are for convenience of
reference only, and shall not limit or otherwise affect the meaning hereof.
Section 8.09. NOTICES TO RATING AGENCIES.
The Trustee shall notify each Rating Agency at such time as it
is otherwise required pursuant to this Agreement to give notice of the
occurrence of any of the events described in clauses (a), (b), (d), or (f) below
or provide a copy to each Rating Agency at such time as otherwise required to be
delivered pursuant to this Agreement of each of the statements described in
clauses (c) and (e) below:
(a) a material change or amendment to this Agreement,
(b) the termination or appointment of a successor
Trustee or a change in the majority ownership of
the Trustee,
(c) the monthly distribution statement required to be
delivered to the Certificateholders pursuant to
Section 3.06,
(d) the non-conformance of any documents pursuant to
Section 5.01(a),
(e) the Notice of Final Distribution required to be
delivered pursuant to Section 7.01(b), and
(f) a change in the location of the Certificate Account
or the Trustee Fee Escrow Account.
The Depositor shall notify each Rating Agency of any change in
its identity.
<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.
BEAR STEARNS MORTGAGE SECURITIES
INC., as Depositor
By: /s/ Joseph T. Jurkowski
---------------------------
Name: Joseph T. Jurkowski
Title: Vice President
FIRST TRUST NATIONAL ASSOCIATION, as
Trustee
By: /s/ Tamara Schultz-Fugh
---------------------------
Name: Tamara Schultz-Fugh
Title: Trust Officer
<PAGE>
STATE OF NEW YORK )
ss:
COUNTY OF NEW YORK)
On the 29th day of August, 1997 before me, a notary public in
and for said State, personally appeared Joseph T. Jurkowski, Jr., known to me to
be the Vice President of Bear Stearns Mortgage Securities Inc., the corporation
that executed the within instrument, and also known to me to be the person who
executed it on behalf of said corporation, and acknowledged to me that such
corporation executed the within instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my
official seal the day and year in this certificate first above written.
/s/ Steve Levitan
---------------------------------
Notary Public
[Notarial Seal] Commission Expires:
<PAGE>
STATE OF MINNESOTA)
: ss:
COUNTY OF RAMSEY )
On the 29th day of August, 1997 before me, a notary public in
and for said State, personally appeared Tamara Schultz-Fugh known to me to be a
Trust Officer of First Trust 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 national banking association, and
acknowledged to me that such national banking association 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.
/s/ Deborah Franco
----------------------------------
Notary Public
[Notarial Seal] Commission Expires:
<PAGE>
BEAR STEARNS MORTGAGE SECURITIES INC.
MORTGAGE PASS-THROUGH CERTIFICATES, SERIES 1997-5
This Certificate is one of a duly authorized issue of Certificates
designated as set forth on the face hereof (the "Certificates"). The
Certificates, in the aggregate, evidence the entire beneficial ownership
interest in the Trust formed pursuant to the Agreement.
The Certificateholder, by its acceptance of this Certificate, agrees
that it will look solely to the Trust for payment hereunder and that the Trustee
is not liable to the Certificateholders for any amount payable under this
Certificate or the Agreement or, except as expressly provided in the Agreement,
subject to any liability under the Agreement.
This Certificate does not purport to summarize the Agreement and
reference is made to the Agreement for the interests, rights and limitations of
rights, benefits, obligations and duties evidenced hereby, and the rights,
duties and immunities of the Trustee.
The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights of the Certificateholders
under the Agreement from time to time by the Depositor and the Trustee with the
consent of the Holders of Certificates evidencing more than 50% of the aggregate
Class Balance of the Certificates. Any such consent by the Holder of this
Certificate and of any Certificate issued upon the transfer hereof or in lieu
hereof whether or not notion of such consent is made upon this Certificate. The
Agreement also permits the amendment thereof, in certain limited circumstances,
without the consent of the Holders of any of the Certificates.
As provided in the Agreement and subject to certain limitations therein
set forth, the transfer of this Certificate is registrable with the Trustee upon
surrender of this Certificate for registration of transfer at the offices or
agencies maintained by the Trustee in the City of St. Paul, State of Minnesota,
duly endorsed by, or accompanied by a written instrument of transfer in form
satisfactory to the Trustee duly executed by the Holder hereof or such Holder's
attorney duly authorized in writing, and thereupon one or more new Certificates
in authorized denominations representing a like aggregate principal amount will
be issued to the designated transferee.
The Certificates are issuable only as registered Certificates
without coupons in Classes and denominations specified in the Agreement. As
provided in the Agreement and subject to certain limitations therein set forth,
this Certificate is exchangeable for one or more new Certificates of the same
Class and evidencing the same aggregate Percentage Interest, as requested by the
Holder surrendering the same.
No service charge will be made to the Certificateholders for
any such registration of transfer, but the Trustee may require payment of a sum
sufficient to cover any tax or other governmental charge payable in connection
therewith. The Certificate Registrar and the Trustee and any agent of any of
them may treat the Person in whose name this Certificate is registered as the
owner hereof for all purposes, and neither the Certificate Registrar, the
Trustee nor any such agent shall be affected by notice to the contrary.
Beginning on the Distribution Date in September 1988, holders
of a minimum of 10% of the outstanding principal amount of the Certificates will
be entitled to exchange such Certificates for a pro rata portion of each of the
Pooled Certificates. Holders of Certificates to be exchanged will be charged an
exchange fee by the Trustee equal to the greater of (i) $500 and (ii) 0.02% of
the outstanding principal amount of such Certificates. Holders will be required
to provide the Trustee with irrevocable written notice as provided in the
Agreement, accompanied by the exchange fee, of any proposed exchange of
Certificates at least five Business Days prior to the proposed date of such
exchange, which must be a Business Day.
The obligations created by the Agreement and the Trust created
thereby (other than the obligations to make certain payments and send certain
notices to Certificateholders with respect to the termination of the Agreement)
shall terminate upon the earlier of (i) the repurchase by or at the direction of
the Depositor of all Pooled Certificates; if any, (ii) the payment (or provision
for payment) to the Certificateholders of all amounts held by or on behalf of
the Trustee and required to be paid to them under the Agreement on the Final
Distribution Date following receipt of the final distribution to be made on the
Pooled Certificates; or (iii) the Distribution Date following the first
Distribution Date on which only one of the Pooled Certificates remains entitled
to payments of principal and/or interest. In no event, however, will the Trust
created by the Agreement continue beyond the expiration of 21 years after the
death of certain persons identified in the Agreement.
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and transfer(s)
unto
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
(Please print or typewriter name and address including postal zip code assignee)
the within Certificate and hereby authorizes the transfer or such interest to
the assignee on the Certificate Register of the Trust Fund.
I (We) further direct the Certificate Registrar to issue a new Certificate
of a like denomination and Class, to the above named assignee and deliver
such Certificate to the following address:
Dated:
--------------------------------
Signature by or on behalf of
assignor
--------------------------------
- -------------------------------------------------------------------------------
Signature Guaranteed
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of distribution:
Distributions shall be made, by wire transfer or otherwise, in immediately
available funds to
- --------------------------------------------
account number or, if mailed by check to
------------
- -------------------------------------------------------------------------------
Applicable statements should be mailed to
- -------------------------------------------------------------------------------
This information is provided by
- -------------------------------------------------------------------------------
the assignee named above, or as its agent.
------------------
<PAGE>
EXHIBIT B
FORM OF OPTION EXERCISE NOTICE
Date:
First Trust National Association
First Trust Center
180 East Fifth Street
Saint Paul, MN 55101
Re: Bear Stearns Mortgage Securities Inc.
Pass-Through Certificates
Series 1997-5 CUSIP No.:
Ladies and Gentlemen:
Reference is made to the Pooling Agreement dated as of August 1, 1997
between Bear Stearns Mortgage Securities Inc., Depositor, and First Trust
National Association, Trustee, (the "Agreement"). Terms defined in the Agreement
shall have the same meaning when used herein, except as otherwise provided.
The undersigned desires to exchange Certificates for Pooled
Certificates as provided in Section 4.05 of the Agreement. Set forth below is
information pertinent to the exchange:
Original Principal Amount of Certificates: $
Principal Amount of Certificates Exchanged: $
Participant Number in The Depository Trust
Company:
Federal Reserve Bank Delivery Instructions:
Proposed Exchange Date:
[Accompanying this letter is a certified check in the amount of the
Option Exercise Fee.]
[The Option Exercise Fee will be paid by wire transfer of immediately
available funds to the amount of the Trustee at not later than the close of
business on the date hereof.]
A copy of this letter will be delivered to The Depository Trust Company
not later than the close of business on the date hereof.
The undersigned understands that this Option Exercise Notice is
irrevocable.
Very truly yours,
[Name]
By:
Title:
Signature Guaranteed:
<PAGE>
SCHEDULE A
POOLED CERTIFICATES
<TABLE>
<CAPTION>
Current Principal
Full Name of Series Class % In Trust Balance
<S> <C> <C>
POOLED FNMA CERTIFICATES
Guaranteed REMIC Pass-Through Certificates, 12.02% $5,260,914.23
Fannie Mae REMIC Trust 1993-142, Class A
Guaranteed REMIC Pass-Through Certificates, 6.83% $3,206,625.76
Fannie Mae REMIC Trust, 1993-164, Class F
Guaranteed REMIC Pass-Through Certificates, 52.57% $3,156,099.59
Fannie Mae REMIC Trust, 1993-168, Class SD
Guaranteed REMIC Pass-Through Certificates, 26.88% $2,500,000.00
Fannie Mae REMIC Trust, 1996-39, Class G
Guaranteed REMIC Pass-Through Certificates, 72.22% $4,832,191.13
Fannie Mae REMIC Trust, 1996-63, Class Z
POOLED FHLMC CERTIFICATES
Multiclass Mortgage Participation Certificates, 28.78% $1,286,947.95
Series 1435, Class SB
Multiclass Mortgage Participation Certificates and 12.46% $2,000,000.00
Modifiable and Combinable REMIC Certificates,
Series 1948, Class SB
Multiclass Mortgage Participation Certificates, 74.28% $7,775,750.00
Multiclass Mortgage Securities and Modifiable
and Combinable REMIC Certificates,
Series 1983, Class ZC
</TABLE>
