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)
MARCH 31, 1997
Bear Stearns Mortgage Securities Inc. (as Depositor under a
Pooling Agreement dated as of December 1, 1996 providing
for the issuance of Mortgage Pass-Through Certificates,
Series 1996-10)
BEAR STEARNS MORTGAGE SECURITIES INC.
(Exact name of registrant as specified in charter)
DELAWARE 33-62710 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 March 26, 1997 between the
Registrant and Bear, Stearns & Co.
Inc.
4.1 Pooling Agreement dated as of March 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: April 14, 1997
By:/s/ Joseph Jurkowski
Name: Joseph Jurkowski
Title: Vice President
<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: ___________, 1997
By:_________________________
Name:
Title:
<PAGE>
EXHIBIT INDEX
EXHIBIT NUMBER DESCRIPTION
1.1 Terms Agreement dated as of
March 26, 1997 between the
Registrant and Bear, Stearns & Co.
Inc.
4.1 Pooling Agreement dated as of
March 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: March 26, 1997
To: BEAR STEARNS MORTGAGE SECURITIES INC.
Re: Underwriting Agreement dated June 25, 1996
Series Designation: Series 1997-1
Class Designation Schedule: Class A-1
TERMS OF THE CERTIFICATES:
Original Principal Pass-Through
Class Amount Interest Rate
A-1 $50,254,761 (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 received by the Trustee on
the Pooled Certificates, for the related Interest Accrual
Period (net of the related Trustee Fee) 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, 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 99.88% of the principal balance
of the Certificates plus accrued interest from March 25, 1997 to, but not
including, the Closing Date.
CLOSING DATE: March 31, 1997, 9:00 a.m., New York time
MISCELLANEOUS MATTERS: (a) The Pooling and Servicing Agreement and the Mortgage
Loan Schedule referred to in the Underwriting Agreement shall be deemed to be
references to the Pooling Agreement and the Pooled Certificates Schedule,
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/ Marshall Coburn
Name: Marshall Coburn
Title: Sr. Managing Director
Accepted:
BEAR STEARNS MORTGAGE SECURITIES INC.
By: /s/ Joseph Jurkowski
Name: Joseph Jurkowski
Title: Vice President
<PAGE>
SCHEDULE A
POOLED CERTIFICATES
CLASS %
FULL NAME OF SERIES 1 IN TRUST
- ------------------- --------
Federal National Mortgage Association Guaranteed
REMIC Pass-Through Certificates, Fannie Mae REMIC 52.73%
Trust 1993-256, Class F
Federal National Mortgage Association Guaranteed 59.70%
REMIC Pass-Through Certificates, Fannie Mae REMIC
Trust 1997-17, Class SA
Federal Home Loan Mortgage Corporation Multiclass
Mortgage Participation Certificates, Series 1846, 17.79%
Class S
Federal Home Loan Mortgage Corporation Multiclass
Mortgage Participation Certificates, Series 1933, 8.42%
Class SG
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1 Unless otherwise specified in a footnote to this Schedule A, the entire
series was issued in book entry form.
=============================================================================
BEAR STEARNS MORTGAGE SECURITIES INC.,
Depositor
and
FIRST TRUST NATIONAL ASSOCIATION,
Trustee
--------------------------------
POOLING AGREEMENT
Dated as of March 1, 1997
--------------------------------
$50,254,761
Bear Stearns Mortgage Securities Inc.
Pass-Through Certificates
Series 1997-1
=============================================================================
<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........................................................12
Section 2.04. SUBSTITUTION OF POOLED CERTIFICATES.....................17
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...............24
Section 3.09. NO EXCHANGE..............................................24
ARTICLE IV THE CERTIFICATES 24
Section 4.01. THE CERTIFICATES.........................................24
Section 4.02. REGISTRATION OF TRANSFER AND EXCHANGE OF
CERTIFICATES...........................................................26
Section 4.03. MUTILATED, DESTROYED, LOST OR STOLEN CERTIFICATES........27
Section 4.04. PERSONS DEEMED OWNERS....................................28
Section 4.05. Exchange of Certificates................................28
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...........................................................31
Section 5.04. TRUSTEE MAY OWN CERTIFICATES.............................31
Section 5.05. TRUSTEE'S FEES; INDEMNIFICATION OF THE TRUSTEE...........31
Section 5.06. ELIGIBILITY REQUIREMENTS FOR TRUSTEE.....................32
Section 5.07. RESIGNATION AND REMOVAL OF THE TRUSTEE...................33
Section 5.08. SUCCESSOR TRUSTEE........................................34
Section 5.09. MERGER OR CONSOLIDATION OF TRUSTEE.......................34
Section 5.10. APPOINTMENT OF CO-TRUSTEE OR SEPARATE TRUSTEE............35
ARTICLE VI THE DEPOSITOR 36
Section 6.01. LIABILITY OF THE DEPOSITOR...............................36
Section 6.02. MERGER, CONSOLIDATION OR CONVERSION OF THE
DEPOSITOR..............................................................36
Section 6.03. LIMITATION ON LIABILITY OF THE DEPOSITOR AND OTHERS......36
ARTICLE VII TERMINATION 37
Section 7.01. TERMINATION..............................................37
ARTICLE VIII MISCELLANEOUS PROVISIONS 39
Section 8.01. AMENDMENT................................................39
Section 8.02. COUNTERPARTS.............................................40
Section 8.03. LIMITATION ON RIGHTS OF CERTIFICATEHOLDERS...............40
Section 8.04. GOVERNING LAW............................................41
Section 8.05. NOTICES..................................................41
Section 8.06. SEVERABILITY OF PROVISIONS...............................42
Section 8.07. SUCCESSORS AND ASSIGNS...................................42
Section 8.08. ARTICLE AND SECTION HEADINGS.............................42
Section 8.09. NOTICES TO RATING AGENCIES...............................42
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 March 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 1997-1 (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 clause
(ii) 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 the aggregate of all distributions of principal
previously made on the Class A-1 Certificates pursuant to Sections 3.05 and
7.01(d).
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: March 31, 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
on the next succeeding Business Day. The first Distribution Date shall occur on
April 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 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 the Pooled
FNMA 93-256/F Certificates, the 25th day of each month, and with respect to the
Pooled FNMA 97- 17/SA 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.
INTEREST DEFICIENCY: With respect to the Pooled FNMA 93-256/F
Certificates, on each FNMA Pooled Certificate Distribution Date, the interest,
if any, accrued and unpaid on the principal balance of the Pooled FNMA 93-256/F
Certificates prior to the immediately preceding Interest Accrual Period that has
not been previously paid.
INTEREST DISTRIBUTION AMOUNT: As to any Distribution Date, the
aggregate of the interest payments received by the Trustee in respect of the
Pooled Certificates on the applicable immediately preceding FHLMC Pooled
Certificate Distribution Date and concurrent FNMA Pooled Certificate
Distribution Date.
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: $50,254,761.
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 of 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: FHLMC Multiclass Mortgage Participation
Certificates, Series 1486, Class S and Pooled FHLMC 1933/SG Certificates.
POOLED FHLMC 1933/SG CERTIFICATES: FHLMC Multiclass Mortgage
Participation and Modifiable and Combinable REMIC Certificates, Series 1933,
Class SG.
POOLED FNMA CERTIFICATES: Pooled FNMA 93-256/F Certificates and Pooled
FNMA 97-17/SA Certificates.
POOLED FNMA 93-256/F CERTIFICATES: FNMA Guaranteed REMIC Pass-Through
Certificates, FNMA REMIC Trust 1993-256, Class F.
POOLED FNMA 97-17/SA CERTIFICATES: FNMA Guaranteed REMIC Pass-Through
Certificates, FNMA REMIC Trust 97-17, Class SA.
PRINCIPAL DISTRIBUTION AMOUNT: As to any Distribution Date, an amount
equal to the aggregate of the principal payments received by the Trustee in
respect of the Pooled FHLMC Certificates on the applicable immediately preceding
FHLMC Pooled Certificate Distribution Date and the Pooled FNMC Certificates on
the applicable concurrent FNMA Pooled Certificate Distribution Date.
PURCHASE AGREEMENT: The Purchase Agreement dated as of March 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: Either of the classes of the Pooled
FHLMC Certificates, following the date on which the principal balance of the
Pooled FNMA Certificates is reduced to zero and, in the case of the Pooled FNMA
93-256/F Certificates, no further amount is payable in respect of any Interest
Deficiency and interest thereon in accordance with the terms of the Underlying
Agreement pursuant to which the Pooled FNMA 93-256/F Certificates were issued
and the notional principal balance of the other class of Pooled FHLMC
Certificates is reduced to zero, or either of the classes of the Pooled FNMA
Certificates, following the date on which the notional principal balance of both
of the Pooled FHLMC Certificates is reduced to zero and the principal balance of
the other class of the Pooled FNMA Certificates is reduced to zero and, in the
case of thePooled FNMA 93-256/F Certificates, no further amount is payable in
respect of any Interest Delinquency and interest thereon in accordance with the
terms of the Underlying Agreement pursuant to which such other class of Pooled
FNMA 93-256/F Certificates were issued.
REPURCHASE PRICE: In connection with the repurchase of (i) any of the
Pooled FNMA Certificates 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 and any Interest
Deficiency and interest thereon in accordance with the applicable Underlying
Agreements, (ii) any Pooled FHLMC Certificate pursuant to Section 2.03(c), a
price equal to the highest bid obtained by the Trustee from three dealers then
active in the market for such Pooled FHLMC Certificate (or such lesser number as
may then be active); provided, however, if the Trustee is able to obtain a bid
from only one active dealer, then the Trustee may obtain a FMV Opinion to
determine whether such bid is at least equal to the fair market value of such
Pooled FHLMC Certificate and the Repurchase Price shall be the higher of the bid
or the fair market value of such Pooled FHLMC Certificate as stated in any such
FMV Opinion; provided further, however, if the Trustee is unable to obtain a bid
from any active dealer, then the Trustee shall obtain a FMV Opinion and the
Repurchase Price shall be equal to the fair market value of such Pooled FHLMC
Certificate as stated in such FMV Opinion and (iii) any Pooled FHLMC Certificate
pursuant to Section 7.01(a)(i), a price equal to the portion of the Interest
Distribution Amount allocable to such Pooled FHLMC Certificate for such date of
repurchase.
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 Pooled FNMA 93-256F Certificates, with at least one floating rate
certificate and which is entitled to receive interest based on LIBOR and which
has a formula of LIBOR plus a minimum of 150 basis points and (b) in the case of
Pooled FNMA 97-17/SA Certificates, with one or more inverse floating rate
certificates based on LIBOR whose combined coupon will be at least equal to the
coupon of the Pooled Certificate 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 (a) ultimately are backed by mortgage
loans with a weighted average pass-through no more than 50 basis points below
and no more than 50 basis points above the weighted average pass-through 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, (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
Pooled Certificates.
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 FNMA
Certificates 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 in the name of the Trustee or its financial
intermediary on behalf of the Trustee.
(xiv) The Pooled Certificates are REMIC regular
interests or represent beneficial ownership of REMIC regular
interests (a Modifiable and Combinable REMIC class).
(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 will be held in the
Trustee's account at the Federal Reserve Bank in Minneapolis,
Minnesota; 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, (ii)
amending the definitions of "Interest Distribution Amount" and/or "Principal
Distribution Amount," as applicable and (iii) 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 FNMA 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, (ii) amend the definition of "Interest Distribution
Amount" and/or "Principal Distribution Amount" and (iii) 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 AND TRUSTEE FEE ACCOUNTS;
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 1997-1", 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 1997-1," 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 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 Account 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:
(A) from amounts with respect to interest
received on the Pooled Certificates, if any:
FIRST, 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; and
SECOND, to the Certificateholders as
distributions of interest, the Interest
Distribution Amount (less the Trustee Fee
and the Escrow Amount) for such Distribution
Date and portion, if any, of the Interest
Distribution Amount (less the Trustee Fee
and the Escrow Amount) for any prior
Distribution Date which remains unpaid;
(B) from amounts with respect to principal
received on the Pooled Certificates, if
any, to the Certificateholders as
distributions of principal, the lesser of
(i) the Principal Distribution Amount for
such Distribution Date and for any prior
Distribution Date which remains unpaid and
(ii) the Class A-1 Balance immediately prior
to such Distribution Date; and
(C) from any remaining amounts, to the extent of
the balance, if any, of such Available Funds
still remaining, to the Certificateholders
as additional distributions of 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.
(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, including, without limitation, the
determinations of the Interest Distribution Amount and the Principal
Distribution Amount. 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 described in
the definitions of such terms as set forth in Section 1.01
hereof and 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) any 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).
Section 3.09. NO EXCHANGE.
The Trustee shall not exchange all or a portion of the Pooled FHLMC
1933/SG Certificates for a related class or classes of "Multiclass Mortgage
Participation Certificates."
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 March 27, 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 trans ferred 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 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 Certifi
cateholder 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 April 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 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, 3.02, 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.
If any such loss, liability or expense is incurred in connection with
any action or proceeding threatened, pending or instituted, whether civil,
criminal, administrative, arbitrative or investigative, against an indemnified
person, the amount shall be paid by the Depositor unless the Depositor (i)
assumes the defense of the indemnified person with counsel reasonably
satisfactory to the Trustee and pays any such loss, liability or expense in
connection therewith, or (ii) makes other arrangements satisfactory to the
Trustee. Upon notice of such action or proceeding, the Trustee promptly shall
notify the Depositor of the action or proceeding and the Depositor promptly
shall notify the Trustee whether or not it elects the alternative in clause (i)
or (ii) of the preceding sentence. If any such loss, liability or expense is not
incurred in connection with any such action or proceeding, the amount shall be
paid by the Depositor.
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 corpora tion 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 either (A) the principal
balance of each of the Pooled FNMA Certificates has been reduced to zero and, in
the case of the Pooled FNMA 93- 256/F Certificates, no further amount is payable
in respect of any Interest Deficiency and interest thereon in accordance with
the terms of the Underlying Agreement pursuant to which the Pooled FNMA 93-256/F
Certificates were issued and the notional principal balance of one of the
classes of the Pooled FHLMC Certificates has been reduced to zero or (B) the
notional principal balance of each of the Pooled FHLMC Certificates has been
reduced to zero and the principal balance of one of the Pooled FNMA Certificates
has been reduced to zero and, in the case of the Pooled FNMA 93-256/F
Certificates, no further amount is payable in respect of any Interest Deficiency
and interest thereon in accordance with the terms of the Underlying Agreement
pursuant to which such class of Pooled FNMA 93-256/F Certificates were issued;
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).
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 representa tives 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 hereinbefore
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 Structured 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 Jurkowski
Name: Joseph Jurkowski
Title: Vice President
FIRST TRUST NATIONAL ASSOCIATION,
as Trustee
By: /s/ S. Christopherson
Name: S. Christoperson
Title: Vice President
<PAGE>
STATE OF NEW YORK )
ss:
COUNTY OF NEW YORK)
On the 31st day of March, 1997 before me, a notary public in and for
said State, personally appeared Joseph Jurkowski 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/ Maria K. Montgomery
Notary Public
[Notarial Seal] Commission Expires:
<PAGE>
STATE OF MINNESOTA)
: ss:
COUNTY OF RAMSEY )
On the 31st day of March, 1997 before me, a notary public in and for
said State, personally appeared S. Christopherson known to me to be a
Vice President 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/ S. Dignan
Notary Public
[Notarial Seal] Commission Expires:
<PAGE>
EXHIBIT A
FORM OF CLASS A-1 CERTIFICATE
<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 1997-1 CUSIP No.:
Ladies and Gentlemen:
Reference is made to the Pooling Agreement dated as of March 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
Current Principal or
Full Name of Series Class % In Trust Notional Principal
Balance
Federal National
Mortgage Association
Guaranteed REMIC
Pass-Through Certificates,
Fannie Mae REMIC Trust 52.73% $40,254,761(1)
1993- 256, Class F
Federal National
Mortgage Association
Guaranteed REMIC
Pass-Through Certificates,
Fannie Mae REMIC Trust 59.70% $10,000,000(1)
1997- 17, Class SA
Federal Home Loan
Mortgage Corporation
Multiclass Mortgage
Participation Certificates, 17.79% $17,766,251(2)
Series1486, Class S
Federal Home Loan
Mortgage Corporation
Multiclass Mortgage
Participation and
Modifiable and 8.42% $17,666,772(2)
Combinable REMIC
Certificates, Series
1993, Class SG
- --------
1) Principal balance.
2) Notional principal balance.
<PAGE>
THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF, OR AN INTEREST
IN, BEAR STEARNS MORTGAGE SECURITIES INC. OR THE TRUSTEE REFERRED TO BELOW OR
ANY OF THEIR RESPECTIVE AFFILIATES AND IS NOT GUARANTEED OR INSURED BY ANY
GOVERNMENTAL AGENCY OR INSTRUMENTALITY.
THIS CERTIFICATE WAS ISSUED ON MARCH 31, 1997.
THE CURRENT PRINCIPAL BALANCE OF THIS CERTIFICATE WILL BE DECREASED BY
THE PRINCIPAL PAYMENTS HEREON. ACCORDINGLY, FOLLOWING THE INITIAL ISSUANCE OF
THE CERTIFICATES, THE CURRENT PRINCIPAL AMOUNT OF THIS CERTIFICATE WILL BE
DIFFERENT FROM THE DENOMINATION SHOWN BELOW. ANYONE ACQUIRING THIS CERTIFICATE
MAY ASCERTAIN ITS CURRENT PRINCIPAL BALANCE BY INQUIRY OF THE TRUSTEE NAMED
HEREIN.
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE
OF THE DEPOSITORY TRUST COMPANY TO THE ISSUER OR ITS AGENT FOR REGISTRATION OF
TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE
NAME OF CEDE & CO. OR SUCH OTHER NAME AS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY AND ANY PAYMENT IS MADE TO CEDE &
CO., ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO
ANY PERSON IS WRONGFUL SINCE THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN
INTEREST HEREIN.
PASS-THROUGH CERTIFICATES,
NO. A-1-1 SERIES 1997-1
EVIDENCING A BENEFICIAL INTEREST IN A TRUST
CONSISTING PRIMARILY OF THE POOLED CERTIFICATES (AS DEFINED IN THE AGREEMENT)
BEAR STEARNS MORTGAGE SECURITIES INC.
CUSIP NO. 073914 UY 7
CLASS : A-1
FIRST DISTRIBUTION DATE : APRIL 25, 1997 INITIAL PRINCIPAL AMOUNT
ASSUMED FINAL DISTRIBUTION DATE : MAY 25, 2027 OF THIS CERTIFICATE
("DENOMINATION") :$ 50,254,761
APPROXIMATE ORIGINAL CLASS
PRINCIPAL AMOUNT : $50,254,761
PASS-THROUGH RATE : 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 RECEIVED BY THE TRUSTEE ON THE
POOLED CERTIFICATES FOR THE RELATED
INTEREST ACCRUAL PERIOD (NET OF THE RELATED
TRUSTEE FEE) MULTIPLIED BY 12, AND THE
DENOMINATOR OF WHICH IS THE PRINCIPAL AMOUNT
OF THE CERTIFICATES IMMEDIATELY PRIOR
TO SUCH DISTRIBUTION DATE.
THIS CERTIFIES THAT CEDE & CO.
IS THE REGISTERED OWNER OF THE PERCENTAGE INTEREST EVIDENCED HEREBY IN
THE BENEFICIAL OWNERSHIP INTEREST OF CERTIFICATES OF THE SAME CLASS AS THIS
CERTIFICATE IN A TRUST (THE "TRUST") CONSISTING PRIMARILY OF A PORTION OF OR ALL
OF CERTAIN CLASSES OF SECURITIES DESCRIBED IN THE AGREEMENT (THE "POOLED
CERTIFICATES") SOLD BY BEAR STEARNS MORTGAGE SECURITIES INC. ("BSMSI"). THE
TRUST WAS CREATED PURSUANT TO THE POOLING AGREEMENT DATED AS OF MARCH 1, 1997
(THE "AGREEMENT"), BETWEEN BSMSI, AS DEPOSITOR, AND FIRST TRUST NATIONAL
ASSOCIATION, AS TRUSTEE (THE "TRUSTEE"), A SUMMARY OF CERTAIN OF THE PERTINENT
PROVISIONS OF WHICH IS SET FORTH HEREAFTER. TO THE EXTENT NOT DEFINED HEREIN,
CAPITALIZED TERMS USED HEREIN SHALL HAVE THE MEANING ASCRIBED TO THEM IN THE
AGREEMENT. THIS CERTIFICATE IS ISSUED UNDER AND IS SUBJECT TO THE TERMS,
PROVISIONS AND CONDITIONS OF THE AGREEMENT, TO WHICH AGREEMENT THE HOLDER OF
THIS CERTIFICATE BY VIRTUE OF ITS ACCEPTANCE HEREOF ASSENTS AND BY WHICH SUCH
HOLDER IS BOUND.
INTEREST ON THIS CERTIFICATE WILL ACCRUE DURING THE ONE MONTH PERIOD
BEGINNING ON THE 25TH OF THE MONTH PRECEDING THE MONTH OF THE DISTRIBUTION DATE
AND ENDING ON THE 24TH DAY OF THE MONTH OF THE DISTRIBUTION DATE (AS HEREINAFTER
DEFINED) AT A PER ANNUM RATE EQUAL TO THE PASS THROUGH RATE AS SET FORTH ABOVE.
DISTRIBUTIONS OF PRINCIPAL AND INTEREST ON THE CERTIFICATES WITH RESPECT TO A
MONTH WILL BE MADE ON THE 25TH DAY OF SUCH MONTH (EACH, A "DISTRIBUTION DATE")
OR, IF SUCH DAY IS NOT A BUSINESS DAY (AS DEFINED HEREIN), THEN ON THE NEXT
SUCCEEDING 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. IN ADDITION, IF THE TRUSTEE
HAS NOT RECEIVED A DISTRIBUTION ON, OR THE DISTRIBUTION INFORMATION WITH RESPECT
TO, EITHER OF THE POOLED CERTIFICATES BY NOON, EASTERN STANDARD TIME, ON THE
DISTRIBUTION DATE (THE "DETERMINATION TIME"), THE DISTRIBUTION ALLOCABLE TO SUCH
POOLED CERTIFICATES WILL NOT BE MADE ON THE DISTRIBUTION DATE, BUT (I) IF SUCH
DISTRIBUTION AND SUCH DISTRIBUTION INFORMATION ARE RECEIVED BY NOON, EASTERN
STANDARD TIME, ON THE THIRD BUSINESS DAY AFTER THE DETERMINATION TIME, IT WILL
BE MADE ON THE THIRD BUSINESS DAY AFTER THE DETERMINATION TIME, 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. DISTRIBUTIONS WILL
BE MADE ON EACH DISTRIBUTION DATE TO HOLDERS OF RECORD AS OF THE CLOSE OF
BUSINESS ON THE LAST BUSINESS DAY OF THE CALENDAR MONTH PRECEDING THE MONTH IN
WHICH SUCH DISTRIBUTION DATE OCCURS; PROVIDED 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. THE ASSUMED FINAL DISTRIBUTION DATE IS
THE DISTRIBUTION DATE IN MAY 2027.
DISTRIBUTIONS ON THIS CERTIFICATE WILL BE MADE BY THE TRUSTEE BY CHECK
MAILED TO THE ADDRESS OF THE PERSON ENTITLED THERETO AS SUCH NAME AND ADDRESS
SHALL APPEAR ON THE CERTIFICATE REGISTER OR, IF SUCH PERSON SO REQUESTS BY
NOTIFYING THE TRUSTEE IN WRITING AS SPECIFIED IN THE AGREEMENT AND IF SUCH
PERSON HOLDS CERTIFICATES WITH AN INITIAL AGGREGATE INITIAL CERTIFICATE BALANCE
OF NOT LESS THAN $1,000,000, BY WIRE TRANSFER IN IMMEDIATELY AVAILABLE FUNDS TO
THE ACCOUNT SPECIFIED IN WRITING BY SUCH PERSON TO THE TRUSTEE. NOTWITHSTANDING
THE ABOVE, THE FINAL DISTRIBUTION ON THIS CERTIFICATE WILL BE MADE AFTER DUE
NOTICE BY THE TRUSTEE OF THE PENDENCY OF SUCH DISTRIBUTION AND ONLY UPON
PRESENTATION AND SURRENDER OF THIS CERTIFICATE AT THE OFFICE OR AGENCY APPOINTED
BY THE TRUSTEE FOR THAT PURPOSE AND DESIGNATED IN SUCH NOTICE.
IN WITNESS WHEREOF, THE TRUSTEE HAS CAUSED THIS CERTIFICATE TO BE DULY
EXECUTED.
DATED: MARCH 31, 1997
FIRST TRUST NATIONAL ASSOCIATION,
Not in its individual capacity but
solely as Trustee
By:____________________________
Name: S. Christopherson
Title: Vice President
THIS IS ONE OF THE CLASS A-1 CERTIFICATES REFERRED TO IN THE WITHIN-MENTIONED
AGREEMENT.
FIRST TRUST NATIONAL ASSOCIATION, AS CERTIFICATE REGISTRAR
By:--------------------------
Name: Tamara Schultz-Fugh
Title: Trust Officer
<PAGE>
BEAR STEARNS MORTGAGE SECURITIES INC.
MORTGAGE PASS-THROUGH CERTIFICATES, SERIES 1997-1
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 SHALL BE CONCLUSIVE AND BINDING ON SUCH HOLDER AND UPON ALL FUTURE
HOLDERS OF THIS CERTIFICATE AND OF ANY CERTIFICATE ISSUED UPON THE TRANSFER
HEREOF OR IN LIEU HEREOF WHETHER OR NOT NOTATION OF SUCH CONSENT IS MADE UPON
THIS CERTIFICATE. THE AGREEMENT ALSO PERMITS THE AMENDMENT THEREOF, IN CERTAIN
LIMITED CIRCUMSTANCES, WITHOUT THE CONSENT OF THE HOLDERS OF ANY OF THE
CERTIFICATES.
AS PROVIDED IN THE AGREEMENT AND SUBJECT TO CERTAIN LIMITATIONS
THEREIN SET FORTH, THE TRANSFER OF THIS CERTIFICATE IS REGISTRABLE 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 January 1998, 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) .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) 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 of registration of
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.
