EXHIBIT 99.1
EXECUTION COPY
CREDIT SUISSE FIRST BOSTON MORTGAGE SECURITIES CORP.,
Depositor
DLJ MORTGAGE CAPITAL, INC.,
Seller
OLYMPUS SERVICING, L.P.,
Servicer and Special Servicer
FAIRBANKS CAPITAL CORP.,
Servicer
and
U.S. BANK NATIONAL ASSOCIATION,
Trustee
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POOLING AND SERVICING AGREEMENT
Dated as of May 1, 2002
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CSFB ABS Trust Series 2002-HE16
CSFB MORTGAGE PASS-THROUGH CERTIFICATES, SERIES 2002-HE16
Table of Contents
ARTICLE I
DEFINITIONS
Page
SECTION 1.01 Definitions...................................................8
SECTION 1.02 Interest Calculations........................................42
ARTICLE II
CONVEYANCE OF MORTGAGE LOANS; REPRESENTATIONS AND WARRANTIES
SECTION 2.01 Conveyance of Mortgage Loans.................................43
SECTION 2.02 Acceptance by the Trustee of the Mortgage Loans..............48
SECTION 2.03 Representations and Warranties of the Seller and Servicers...50
SECTION 2.04 Representations and Warranties of the Depositor
as to the Mortgage Loans.....................................52
SECTION 2.05 Delivery of Opinion of Counsel in Connection
with Substitutions...........................................52
SECTION 2.06 Execution and Delivery of Certificates.......................53
SECTION 2.07 REMIC Matters................................................53
SECTION 2.08 Covenants of the Servicers...................................53
SECTION 2.09 Conveyance of Subsidiary REMIC Regular Interests and
Intermediate REMIC Regular Interests and
Acceptance of Master REMIC, Respectively,
by the Trustee; Issuance of Certificates.....................54
ARTICLE III
ADMINISTRATION AND SERVICING OF MORTGAGE LOANS
SECTION 3.01 Servicers to Service Mortgage Loans..........................55
SECTION 3.02 Subservicing; Enforcement of the Obligations of Subservicers.56
SECTION 3.03 Special Serviced Mortgage Loans..............................57
SECTION 3.04 Notification of Adjustments..................................58
SECTION 3.05 Trustee to Act as Servicer...................................58
SECTION 3.06 Collection of Mortgage Loans; Collection Account;
Certificate Account; Prefunding Account;
Capitalized Interest Account.................................59
SECTION 3.07 Establishment of and Deposits to Escrow Accounts;
Permitted Withdrawals from Escrow Accounts;
Payments of Taxes, Insurance and Other Charges;
Simple Interest Excess Sub-Accounts; Deposits in
Simple Interest Excess Sub-Accounts..........................62
SECTION 3.08 Access to Certain Documentation and Information
Regarding the Mortgage Loans; Inspections....................65
SECTION 3.09 Permitted Withdrawals from the Collection Accounts and
Certificate Account..........................................65
SECTION 3.10 Maintenance of Hazard Insurance; Mortgage
Impairment Insurance and Primary Insurance Policy;
Claims; Restoration of Mortgaged Property....................67
i
SECTION 3.11 Enforcement of Due-on-Sale Clauses; Assumption Agreements....71
SECTION 3.12 Realization Upon Defaulted Mortgage Loans;
Repurchase of Certain Mortgage Loans.........................72
SECTION 3.13 Trustee to Cooperate; Release of Mortgage Files..............75
SECTION 3.14 Documents, Records and Funds in Possession of a
Servicer to be Held for the Trustee..........................76
SECTION 3.15 Servicing Fee................................................77
SECTION 3.16 Access to Certain Documentation..............................77
SECTION 3.17 Annual Statement as to Compliance............................77
SECTION 3.18 Annual Independent Public Accountants' Servicing Statement;
Financial Statements.........................................78
SECTION 3.19 Maintenance of Fidelity Bond and Errors and
Omissions Insurance..........................................78
SECTION 3.20 Prepayment Premiums..........................................79
SECTION 3.21 Duties of the Credit Risk Manager............................79
SECTION 3.22 Advance Facility.............................................79
SECTION 3.23 Fairbanks Servicing Performance Evaluations..................83
ARTICLE IV
DISTRIBUTIONS AND ADVANCES BY THE SERVICERS
SECTION 4.01 Advances by the Servicers....................................84
SECTION 4.02 Priorities of Distribution...................................85
SECTION 4.03 Allocation of Losses.........................................89
SECTION 4.04 Monthly Statements to Certificateholders.....................90
SECTION 4.05 Servicers to Cooperate.......................................92
SECTION 4.06 Basis Risk Reserve Fund......................................92
SECTION 4.07 Policy Matters...............................................93
SECTION 4.08 Premium Fund.................................................89
ARTICLE V
THE CERTIFICATES
SECTION 5.01 The Certificates.............................................98
SECTION 5.02 Certificate Register; Registration of Transfer and
Exchange of Certificates.....................................98
SECTION 5.03 Mutilated, Destroyed, Lost or Stolen Certificates...........103
SECTION 5.04 Persons Deemed Owners.......................................103
SECTION 5.05 Access to List of Certificateholders' Names and Addresses...103
SECTION 5.06 Maintenance of Office or Agency.............................104
ARTICLE VI
THE DEPOSITOR, THE SELLER, THE SERVICERS AND THE SPECIAL SERVICER
ii
SECTION 6.01 Respective Liabilities of the Depositor, the Seller,
the Servicers and the Special Servicer......................105
SECTION 6.02 Merger or Consolidation of the Depositor,
the Seller or a Servicer....................................105
SECTION 6.03 Limitation on Liability of the Depositor, the Seller,
the Servicers, the Special Servicer and Others..............105
SECTION 6.04 Limitation on Resignation of a Servicer.....................106
SECTION 6.05 Limitation Upon Liability of the Credit Risk Manager........107
ARTICLE VII
DEFAULT
SECTION 7.01 Events of Default...........................................108
SECTION 7.02 Trustee to Act; Appointment of Successor....................110
SECTION 7.03 Notification to Certificateholders..........................111
ARTICLE VIII
CONCERNING THE TRUSTEE
SECTION 8.01 Duties of the Trustee. .....................................112
SECTION 8.02 Certain Matters Affecting the Trustee.......................113
SECTION 8.03 Trustee Not Liable for Certificates or Mortgage Loans.......114
SECTION 8.04 Trustee May Own Certificates................................115
SECTION 8.05 Trustee's Fees and Expenses.................................115
SECTION 8.06 Eligibility Requirements for the Trustee....................115
SECTION 8.07 Resignation and Removal of the Trustee......................116
SECTION 8.08 Successor Trustee...........................................117
SECTION 8.09 Merger or Consolidation of the Trustee......................117
SECTION 8.10 Appointment of Co-Trustee or Separate Trustee...............117
SECTION 8.11 Tax Matters.................................................119
SECTION 8.12 Periodic Filings............................................122
SECTION 8.13 Trust Obligations...........................................122
SECTION 8.14 Determination of Certificate Index..........................122
SECTION 8.15 Indemnification with Respect to Certain Taxes and
Loss of REMIC Status........................................122
ARTICLE IX
TERMINATION
SECTION 9.01 Termination upon Liquidation or Purchase
of the Mortgage Loans.......................................123
SECTION 9.02 Final Distribution on the Certificates......................123
SECTION 9.03 Additional Termination Requirements.........................124
ARTICLE X
MISCELLANEOUS PROVISIONS
SECTION 10.01 Amendment...................................................126
iii
SECTION 10.02 Recordation of Agreement; Counterparts......................127
SECTION 10.03 Governing Law...............................................128
SECTION 10.04 Intention of Parties........................................128
SECTION 10.05 Notices.....................................................128
SECTION 10.06 Severability of Provisions..................................129
SECTION 10.07 Assignment..................................................129
SECTION 10.08 Limitation on Rights of Certificateholders..................130
SECTION 10.09 Certificates Nonassessable and Fully Paid...................130
SECTION 10.10 Protection of Assets........................................131
iv
EXHIBITS
EXHIBIT A Form of Class A-[o] Certificate
EXHIBIT B Form of Class M-[o] Certificate
EXHIBIT C Form of Class B-[o] Certificate
EXHIBIT D Form of Residual Certificate
EXHIBIT E Form of Class X Certificate
EXHIBIT F Form of Interest Only Certificate
EXHIBIT G Form of Initial Certification of Custodian
EXHIBIT H Form of Final Certification of Custodian
EXHIBIT I Transfer Affidavit
EXHIBIT J Form of Transferor Certificate
EXHIBIT K Form of Investment Letter (Non-rule 144A)
EXHIBIT L Form of Rule 144A Letter
EXHIBIT M Request for Release
EXHIBIT N Officer's Certificate with Respect to Principal Prepayments
EXHIBIT O Form of Servicer Report
EXHIBIT P FSA Policy
EXHIBIT Q Form of Subsequent Transfer Agreement
EXHIBIT R Form of Special Request for Release
EXHIBIT S Performance Standards
SCHEDULE I Mortgage Loan Schedule for Mortgage Loans
SCHEDULE IIA Representations and Warranties of Seller - DLJMC
SCHEDULE IIB Representations and Warranties of Servicer and
Special Servicer - Olympus
SCHEDULE IIC Representations and Warranties of Servicer - Fairbanks
SCHEDULE III Representations and Warranties - Mortgage Loans
v
THIS POOLING AND SERVICING AGREEMENT, dated as of May 1, 2002, among
CREDIT SUISSE FIRST BOSTON MORTGAGE SECURITIES CORP., a Delaware corporation,
as the depositor (the "Depositor"), DLJ MORTGAGE CAPITAL, INC., a Delaware
corporation, as the Seller (the "Seller"), OLYMPUS SERVICING, L.P., a Delaware
limited partnership, as a servicer (in such capacity, a "Servicer") and as the
special servicer (in such capacity, the "Special Servicer"), FAIRBANKS CAPITAL
CORP., a Utah corporation, as a servicer (in such capacity, a "Servicer") and
U.S. Bank National Association, a national banking association, as the trustee
(the "Trustee").
WITNESSETH THAT
In consideration of the mutual agreements herein contained, the parties
hereto agree as follows:
PRELIMINARY STATEMENT
For federal income tax purposes, the Trust Fund (exclusive of the
Prefunding Account, the Capitalized Interest Account, and the Basis Risk
Reserve Fund) will consist of three REMICs: the Subsidiary REMIC, the
Intermediate REMIC, and the Master REMIC.
The Subsidiary REMIC
--------------------
The Subsidiary REMIC will consist of all of the assets constituting the
Mortgage Loans (exclusive of the Prefunding Account, the Capitalized Interest
Account, and the Basis Risk Reserve Fund). The Subsidiary REMIC will be
evidenced by the Subsidiary REMIC regular interests which will be
uncertificated and which will represent the "regular interests" in the
Subsidiary REMIC (the "Subsidiary REMIC Regular Interests"), and by the
Subsidiary REMIC residual interest as the single "residual interest" in the
Subsidiary REMIC (the "Subsidiary REMIC Residual Interest"). The Trustee will
hold the Subsidiary REMIC Regular Interests on behalf of the Intermediate
REMIC.
The following table irrevocably sets forth the class designation, the
Pass-Through Rate, and the original class principal balance for each of the
Subsidiary REMIC Regular Interests. None of the Subsidiary REMIC Regular
Interests will be certificated.
1
-------------------------------- ----------------------------- ------------------------- ----------------------------
Corresponding
Subsidiary REMIC Regular Principal Pass-Through Class of Intermediate
Interest Balance Rate REMIC Regular Interest
-------------------------------- ----------------------------- ------------------------- ----------------------------
S-A-1A(1) 1/2 Corresponding Class A-1 I-A-1A
Intermediate REMIC Class Net Funds Cap
balance plus 1/2 the Class R
Class balance
-------------------------------- ----------------------------- ------------------------- ----------------------------
S-A-1B(1) 1/2 Corresponding Class A-1 I-A-1B
Intermediate REMIC Class Net Funds Cap
balance
-------------------------------- ----------------------------- ------------------------- ----------------------------
S-A-2A(1) 1/2 Corresponding Class A Group 2 I-A-2A
Intermediate REMIC Class Net Funds Cap
balance
-------------------------------- ----------------------------- ------------------------- ----------------------------
S-A-2B(1) 1/2 Corresponding Class A Group 2 I-A-2B
Intermediate REMIC Class Net Funds Cap
balance
-------------------------------- ----------------------------- ------------------------- ----------------------------
S-A-3A(1) 1/2 Corresponding Class A Group 2 I-A-3A
Intermediate REMIC Class Net Funds Cap
balance
-------------------------------- ----------------------------- ------------------------- ----------------------------
S-A-3B(1) 1/2 Corresponding Class A Group 2 I-A-3B
Intermediate REMIC Class Net Funds Cap
balance
-------------------------------- ----------------------------- ------------------------- ----------------------------
S-A-4A(1) 1/2 Corresponding Class A Group 2 I-A-4A
Intermediate REMIC Class Net Funds Cap
balance
-------------------------------- ----------------------------- ------------------------- ----------------------------
S-A-4B(1) 1/2 Corresponding Class A Group 2 I-A-4B
Intermediate REMIC Class Net Funds Cap
balance
-------------------------------- ----------------------------- ------------------------- ----------------------------
S-M-1(1) 1/2 Corresponding Subordinate I-M-1
Intermediate REMIC Class Net Funds Cap
balance
-------------------------------- ----------------------------- ------------------------- ----------------------------
S-M-2(1) 1/2 Corresponding Subordinate I-M-2
Intermediate REMIC Class Net Funds Cap
balance
-------------------------------- ----------------------------- ------------------------- ----------------------------
S-B-I(1) 1/2 Corresponding Subordinate I-B-1
Intermediate REMIC Class Net Funds Cap
balance
-------------------------------- ----------------------------- ------------------------- ----------------------------
S-B-2(1) 1/2 Corresponding Subordinate I-B-2
Intermediate REMIC Class Net Funds Cap
balance
-------------------------------- ----------------------------- ------------------------- ----------------------------
Accrual (2) Net WAC Rate(3) N/A
-------------------------------- ----------------------------- ------------------------- ----------------------------
(1) Subsidiary REMIC Accretion Directed Classes.
(2) 1/2 of the Aggregate Loan Balance plus1/2of the Prefunded Amount
plus1/2of the initial Overcollateralization Amount
(3) Determined by adjusting for the actual number of days in the accrual
period.
On each Distribution Date, 50% of the increase in the
Overcollateralization Amount will be payable as a reduction of the principal
balances of Subsidiary REMIC Accretion Directed Classes (to each such class in
an amount equal to 1/2 of the interest paid in reduction of the principal
balance of the Corresponding Class of Intermediate REMIC Interest) and will be
accrued and added to the principal balance of the Accrual REMIC Interest. On
each Distribution
2
Date, the increase in the principal balance of the Accrual REMIC Interest may
not exceed interest accruals for such Distribution Date for the Accrual REMIC
Interest. In the event that: (i) 50% of the increase in the
Overcollateralization Amount exceeds (ii) interest accruals on the Accrual
REMIC Interest for such Distribution Date, the excess for such Distribution
Date (accumulated with all such excesses for all prior Distribution Dates)
will be added to any increase in the Overcollateralization Amount for purposes
of determining the amount of interest accrual on the Accrual REMIC Interest
payable as principal on the Subsidiary REMIC Accretion Directed Classes on the
next Distribution Date pursuant to the first sentence of this paragraph.
All payments of principal generated by the Mortgage Loans shall be
allocated 50% to the Accrual REMIC Interest, and 50% to the Subsidiary REMIC
Accretion Directed Classes to each such Class in an amount equal to 1/2 of the
amounts paid in reduction of the principal balance of the Corresponding Class
of Intermediate REMIC Interest, until paid in full. Notwithstanding the above,
principal payments allocated to the Class I-X that result in the reduction in
the Overcollateralization Amount shall be allocated to the Accrual Interest
(until paid in full).
All payments of interest generated by the Mortgage Loans shall be
allocated pro rata to the regular interests. Interest shortfalls on each
Distribution Date shall also be allocated pro rata to the regular interests.
Realized losses shall be applied so that after all distributions have
been made on each Distribution Date (i) the principal balances of each of the
Subsidiary REMIC Accretion Directed Classes is equal to 50% of the principal
balance of their Corresponding Classes, and (ii) the Accrual Interest is equal
to 50% of the Aggregate Loan Balance plus 50% of the Overcollateralization
Amount.
The Intermediate REMIC
----------------------
The Intermediate REMIC will consist of the Intermediate REMIC Regular
Interests (exclusive of the Prefunding Account, the Capitalized Interest
Account, and the Basis Risk Reserve Fund). The Intermediate REMIC will be
evidenced by the Intermediate REMIC regular interests which will be
uncertificated and which will represent the "regular interests" in the
Intermediate REMIC (the "Intermediate REMIC Regular Interests"), and by the
Intermediate REMIC residual interest as the single "residual interest" in the
Intermediate REMIC (the "Intermediate REMIC Residual Interest"). The Trustee
will hold the Intermediate REMIC Regular Interests on behalf of the Master
REMIC.
The following tables irrevocably set forth the class designation, the
initial principal balance and the Pass-Through Rate for each of the
Intermediate REMIC Regular Interests. None of the Intermediate REMIC Regular
Interests will be certificated.
3
-------------------------------- ----------------------------- ------------------------- ----------------------------
Corresponding
Intermediate REMIC Regular Initial Principal Pass-Through Class of Master
Interest Balance Rate REMIC Interest
-------------------------------- ----------------------------- ------------------------- ----------------------------
I-A-1A(1) (2)(3) (4) A-1
-------------------------------- ----------------------------- ------------------------- ----------------------------
I-A-1B(1) (3)(5) (4) A-1
-------------------------------- ----------------------------- ------------------------- ----------------------------
I-A-2A(1) (2)(3) (4) A-2
-------------------------------- ----------------------------- ------------------------- ----------------------------
I-A-2B(1) (3)(5) (4) A-2
-------------------------------- ----------------------------- ------------------------- ----------------------------
I-A-3A(1) (2)(3) (4) A-3
-------------------------------- ----------------------------- ------------------------- ----------------------------
I-A-3B(1) (3)(5) (4) A-3
-------------------------------- ----------------------------- ------------------------- ----------------------------
I-A-4A(1) (2)(3) (4) A-4
-------------------------------- ----------------------------- ------------------------- ----------------------------
I-A-4B(1) (3)(5) (4) A-4
-------------------------------- ----------------------------- ------------------------- ----------------------------
I-M-1(1) Corresponding Master REMIC (4) M-1
Class balance
-------------------------------- ----------------------------- ------------------------- ----------------------------
I-M-2(1) Corresponding Master REMIC (4) M-2
Class balance
-------------------------------- ----------------------------- ------------------------- ----------------------------
I-B-1(1) Corresponding Master REMIC (4) B-1
Class balance
-------------------------------- ----------------------------- ------------------------- ----------------------------
I-B-2(1) Corresponding Master REMIC (4) B-2
Class balance
-------------------------------- ----------------------------- ------------------------- ----------------------------
I-X(1) (6) (7) N/A
-------------------------------- ----------------------------- ------------------------- ----------------------------
(1) The Intermediate REMIC Regular Interests.
(2) 60.75% of Corresponding Master REMIC Class balance.
(3) The Intermediate REMIC Regular Interests will pay pro-rata according to
their percentage of the Corresponding Master REMIC Class balance with all
other interests which correspond to the same Master REMIC certificate.
(4) The Pass-Through Rate of these Classes will be equal to the Pass-Through
Rate of each such Class's Corresponding Class of Master REMIC Interest.
(5) 39.25% of Corresponding Master REMIC Class balance.
(6) The Class I-X REMIC Interest will have a notional principal balance equal
to the Aggregate Loan Balance.
(7) The Class I-X REMIC Interest will be entitled to all Prepayment Premiums
received with respect to the Group 1 Mortgage Loans and Group 2 Mortgage
Loans and will have a Pass-Through Rate equal to 2 times the weighted
average Pass-Through Rate of the Subsidiary REMIC Regular Interests,
where (i) the Subsidiary REMIC Accretion Directed Classes (other than the
Class I-A-1A regular interests, Class I-A-2A regular interests, Class
I-A-3A regular interests and Class I-A-4A regular interests) are treated
as having a rate capped at the Pass-Through Rate of their Corresponding
Classes of Intermediate REMIC Interests, (ii) for each Distribution Date
prior to the November 2004 Distribution Date, the Class I-A-1A regular
interests, Class I-A-2A regular interests, Class I-A-3A regular interests
and Class I-A-4A regular interests are treated as having a rate capped at
a Pass-Through Rate equal to 8.00% plus the related Class Certificate
Margin, and thereafter, capped at the Pass-Through Rate of the
Corresponding Class of Master REMIC Interest and (iii) the Subsidiary
Accrual Class is treated as having a rate capped at a Pass-Through Rate
of 0.00% per annum.
All payments of scheduled principal, prepayments of principal and
increases in the Overcollateralization Amount generated by the Mortgage Loans
shall be allocated to each such Intermediate REMIC Regular Interest in an
amount equal to the amounts paid in reduction of the principal balance of the
Corresponding Class of Master REMIC Interest, until paid in full.
4
All payments of interest generated by the Mortgage Loans shall be
allocated pro rata to the regular interests. Interest shortfalls on each
Distribution Date shall also be allocated pro rata to the regular interests.
Realized Losses are applied to each Class's Corresponding Class of Master
REMIC Interest.
The Master REMIC
----------------
The Master REMIC will consist of all of the assets constituting the
Intermediate REMIC Regular Interests (exclusive of the Prefunding Account, the
Capitalized Interest Account, and the Basis Risk Reserve Fund). The Master
REMIC will be evidenced by the Certificates and will represent the "regular
interests" in the Master REMIC, and the Master REMIC residual interest will
represent the single "residual interest" in the Master REMIC (the "Master
REMIC Residual Interest").
The following table sets forth (or describes) the Class designation,
Pass-Through Rate and Initial Certificate Principal Balance for each Class of
Certificates which, except for the Class R Certificates, represents one or
more of the "regular interests" in the Master REMIC created hereunder:
Integral
Initial Multiples in
Certificate Pass-Through Assumed Final Maturity Minimum Excess of
Class Designation Principal Balance Rate Date(1) Denominations Minimum
----------------- ----------------- ------------ ---------------------- ------------- -------------
Class A-1 $212,500,000 2.145% (2) November 2032 $25,000 $1
Class A-2 $150,000,000 2.170% (2) November 2032 $25,000 $1
Class A-3 $40,000,000 2.180% (2) November 2032 $25,000 $1
Class A-4 $30,000,000 2.160% (2) November 2032 $25,000 $1
Class A-IO(4) $0(3) 6.160% (3) November 2032 $25,000 $1
Class M-1 $32,250,000 2.720% (2) November 2032 $25,000 $1
Class M-2 $24,500,000 3.340% (2) November 2032 $25,000 $1
Class B-1 $20,500,000 4.140% (2) November 2032 $25,000 $1
Class B-2 $5,250,000 4.590% (2) November 2032 $25,000 $1
Class X $0(5) (5) November 2032 (6) N/A
Class R $50 2.160% (3) November 2032 (7) N/A
(1) Solely for purposes of Section 1.860G-1(a)(4)(iii) of the Treasury
regulations, the Distribution Date in the month following the month of
the maturity date for the Mortgage Loan with the latest maturity date has
been designated as the "latest possible maturity date" for each Class of
Certificates that represents one or more of the "regular interests" in
the Master REMIC.
(2) Pass-Through Rate for the June 2002 Distribution Date. The Pass-Through
Rate applicable to any other Distribution Date (as defined in the
Pass-Through Rate definition), equals the Certificate Index plus the
related Certificate Margin for such Distribution Date subject to a cap
equal to the applicable Net Funds Cap.
(3) The Class A-IO Certificates are interest only certificates, will have no
principal balance and will accrue interest at its Pass-Through Rate on
the Class A-IO Notional Amount which is initially $262,743,750. The
Pass-Through Rate listed is the Pass-Through Rate for the June 2002
Distribution Date.
(4) The Class A-IO Certificates will be treated for federal income tax
purposes as two separate REMIC Regular Interests, each a Class A-IO
Component. The Class A-IO-1 and Class A-IO-2 Components will have Class
A-IO Notional Amounts equal to the X-X-0X, X-X-0X, X-X-0X and I-A-4A
Class Principal Balances (which will be equal to 60.75% of the Class
Principal Balances of each of the Class A-1, Class A-2, Class A-3 and
Class A-4 Certificates, respectively).
5
Interest will accrue on each of the Class A-IO Components at a per annum
Pass-Through Rate equal to the excess of the Pass-Through Rates of the
Class I-A-1A, I-A-2A, I-A-3A and I-A-4A Regular Interests over the
Pass-Through Rates on the Class A-1, Class A-2, Class A-3 and Class A-4
Certificates respectively. The Class A-IO Certificateholders also will be
treated as entering into a notional principal contract with the Class X
Certificateholder described in Section 8.11 whereby the Class A-IO
Certificateholder will pay to the Class X Certificateholder the excess of
the Class A-IO Pass Through Rate computed on basis of the actual number
of days in the immediately preceding Accrual Period and a 360 day year
(the "Actual/360 Convention") over such rate computed on the basis of
twelve 30 day months (the "30/360 Convention") and will receive payments
from the Class X Certificateholder equal to the excess of such rate
computed under the 30/360 Convention over such rate computed under the
Actual/360 Convention.
(5) The Class X Certificates will have a notional balance equal to the
Aggregate Collateral Balance, and a Pass-Through Rate equal to the pass
through rate in respect of the Class I-X Interest. Interest accrued on
the Class X Certificate shall not itself accrue interest.
(6) The Class X Certificates will be issued as three certificates in minimum
Percentage Interests of 5%.
(7) The Class R Certificates are issued in minimum Percentage Interests of
20%.
For federal income tax purposes, the Trustee will treat each reference in
the preceding Preliminary Statement to the "Subordinate Net Funds Cap" as "the
lesser of the Subordinate Net Funds Cap and the Adjusted Subordinate Net Funds
Cap". The Trustee will treat any entitlement of the Class M-1 Certificates,
Class M-2 Certificates, Class B-1 or Class B-2 Certificates to interest on any
Distribution Date in excess of the Adjusted Subordinate Net Funds Cap pursuant
to Section 4.02(a)(vii), (viii), (ix) and (x) herein as amounts paid to the
Class X Certificates, deposited by the Class X Certificates to the Basis Risk
Reserve Fund and then paid to each of the Class M-1 Certificates, Class M-2
Certificates, Class B-1 or Class B-2 Certificates, as applicable, pursuant to
a limited recourse notional principal contract described in Section 8.11
herein.
6
Set forth below are designations of Classes of Certificates to the
categories used herein:
Book-Entry Certificates.............. All Classes of Certificates other than
the Physical Certificates.
Class A Certificates................. The Class A-1, Class A-2, Class A-3 and
Class A-4 Certificates.
Class B Certificates................. The Class B-1 and Class B-2 Certificates.
Class M Certificates................. The Class M-1 and Class M-2 Certificates.
Class X Certificates................. The Class X Certificates.
ERISA-Restricted Certificates........ Residual Certificates, Private
Certificates, and Certificates of any
Class that no longer satisfy the
applicable rating requirements of the
Underwriters' Exemption.
LIBOR Certificates................... Class A-1, Class X-0, Xxxxx X-0, Class
A-4, Class M-1, Class M-2, Class B-1,
Class B-2 and Class R Certificates.
Notional Amount Certificates......... Class A-IO and Class X Certificates.
Offered Certificates................. All Classes of Certificates other than
the Private Certificates.
Private Certificates................. Class X Certificates.
Physical Certificates................ Class R and Class X Certificates.
Rating Agencies...................... Xxxxx'x and S&P.
Regular Certificates................. All Classes of Certificates other than
the Class R Certificates.
Residual Certificates................ Class R Certificates.
Senior Certificates.................. Class A-1, Class A-2, Class A-3, Class
A-4, Class A-IO and Class R
Certificates.
Subordinate Certificates............. Class M-1, Class M-2, Class B-1, Class
B-2 and Class X Certificates.
7
ARTICLE
DEFINITIONS
SECTION 1.01 Definitions.
-----------
Whenever used in this Agreement, the following words and phrases, unless
the context otherwise requires, shall have the following meanings:
Accepted Servicing Practices: With respect to any Mortgage Loan, those
mortgage servicing practices of prudent mortgage lending institutions which
service mortgage loans of the same type as such Mortgage Loan in the
jurisdiction where the related Mortgaged Property is located.
Accrual Period: For any class of Offered Certificates, other than the
Class A-IO Certificates, and any Distribution Date, the period commencing on
the immediately preceding Distribution Date (or, in the case of the first
Accrual Period, the closing date) and ending on the day immediately preceding
the related Distribution Date. For the Class A-IO Certificates, the period
commencing on the 25th day of the month preceding the related Distribution
Date and ending on the 24th day of the month of such Distribution Date.
Adjusted Subordinate Group 1 Balance: For any Distribution Date will be
the aggregate of the Stated Principal Balances of the Group 1 Mortgage Loans
as of the last day of the related Collection Period less the Class Principal
Balance of the Class A-1 Certificates less the product of (I) the
Overcollateralization Amount and (II)(A) the related Aggregate Loan Group
Collateral Balance over (B) the Aggregate Collateral Balance.
Adjusted Subordinate Group 2 Balance: For any Distribution Date will be
the aggregate of the Stated Principal Balances of the Group 2 Mortgage Loans
as of the last day of the related Collection Period less the aggregate Class
Principal Balances of the Class A-2, Class A-3 and Class A-4 Certificates less
the product of (I) the Overcollateralization Amount and (II)(A) the related
Aggregate Loan Group Collateral Balance over (B) the Aggregate Collateral
Balance.
Adjusted Subordinate Net Funds Cap: For any Distribution Date and the
Class M-1, Class M-2, Class B-1 and Class B-2 Certificates, will be a per
annum rate equal to a weighted average of (i) the Class A-1 Net Funds Cap and
(ii) the Class A Group 2 Net Funds Cap for such Distribution Date, weighted on
the basis of the Adjusted Subordinate Group 1 Balance and the Adjusted
Subordinate Group 2 Balance.
Advance: The payment required to be made by a Servicer with respect to
any Distribution Date pursuant to Section 4.01.
Advance Facility: As defined in Section 3.22(a) herein.
Advance Facility Notice: As defined in Section 3.22(b) herein.
Advance Facility Trustee: As defined in Section 3.22(b) herein.
8
Advance Reimbursement Amounts: As defined in Section 3.22(a) herein.
Advancing Person: As defined in Section 3.22(a) herein.
Adjustment Date: With respect to each adjustable-rate Mortgage Loan each
adjustment date on which the Mortgage Rate thereon changes pursuant to the
related Mortgage Note. The first Adjustment Date following the Cut-off Date as
to each such adjustable-rate Mortgage Loan is set forth in the Mortgage Loan
Schedule.
Aggregate Collateral Balance: As of any date of determination will be
equal to the Aggregate Loan Balance plus the amount, if any, then on deposit
in the Prefunding Account; provided that the Aggregate Collateral Balance as
of the Initial Cut-off Date will include the Prefunded Amount.
Aggregate Loan Balance: As of any date of determination, will be equal to
the aggregate of the Stated Principal Balances of the Mortgage Loans as of the
last day of the related Collection Period.
Aggregate Loan Group Balance: As to any Loan Group and as of any date of
determination will be equal to the aggregate of the Stated Principal Balances
of the Mortgage Loans in that Loan Group, except as otherwise provided, as of
the last day of the related Collection Period.
Aggregate Loan Group Collateral Balance: As of any date of determination
and Loan Group, will be equal to applicable Aggregate Loan Group Balance plus
the amount, if any, then on deposit in the Prefunding Account, with respect to
the related Loan Group.
Aggregate Subsequent Transfer Amount: With respect to any Subsequent
Transfer Date, the aggregate Stated Principal Balances as of the applicable
Cut-off Date of the Subsequent Mortgage Loans conveyed on such Subsequent
Transfer Date, as listed on the revised Mortgage Loan Schedule delivered
pursuant to Section 2.01(e); provided, however, that such amount shall not
exceed the amount on deposit in the Prefunding Account.
Agreement: This Pooling and Servicing Agreement and all amendments or
supplements hereto.
Ancillary Income: All income derived from the Mortgage Loans, other than
Servicing Fees, including but not limited to, late charges, fees received with
respect to checks or bank drafts returned by the related bank for
non-sufficient funds, assumption fees, optional insurance administrative fees
and all other incidental fees and charges, including investment income on the
applicable Collection Account and any interest due and actually received from
the related Mortgagor that accrued during the portion of the Prepayment Period
that is in the same calendar month as the Distribution Date with respect to
such Mortgage Loan in connection with such Principal Prepayments in full.
Ancillary Income does not include any Prepayment Premiums.
Applicable Rate: With respect to any Subsequent Transfer Date in June
2002, 3.14% per annum, with respect to any Subsequent Transfer Date in July
2002, 2.89% per annum and with respect to any Subsequent Transfer Date in
August 2002, 2.64% per annum.
9
Applied Loss Amount: As to any Distribution Date, an amount equal to the
excess, if any of (i) the aggregate Class Principal Balance of the
Certificates, after giving effect to all Realized Losses incurred with respect
to Mortgage Loans during the Collection Period for such Distribution Date and
payments of principal on such Distribution Date over (ii) the Aggregate
Collateral Balance for such Distribution Date.
Appraised Value: The amount set forth in an appraisal made in connection
with the origination of the related Mortgage Loan as the value of the
Mortgaged Property.
Assignment and Assumption Agreement: That certain assignment and
assumption agreement dated as of May 1, 2002, by and between DLJMC, as
assignor and the Depositor, as assignee, relating to the Mortgage Loans.
Assignment of Mortgage: An assignment of the Mortgage, notice of transfer
or equivalent instrument in recordable form, sufficient under the laws of the
jurisdiction wherein the related Mortgaged Property is located to reflect the
transfer of the Mortgage.
B-1 Principal Payment Amount: For any Distribution Date on or after the
Stepdown Date and as long as a Trigger Event has not occurred with respect to
such Distribution Date, will be the amount, if any, by which (x) the sum of
(i) the aggregate Class Principal Balances of the Senior Certificates and the
aggregate Class Principal Balances of the Class M-1 Certificates and Class M-2
Certificates, in each case, after giving effect to payments on such
Distribution Date and (ii) the Class Principal Balance of the Class B-1
Certificates immediately prior to such Distribution Date exceeds (y) the
lesser of (A) the product of (i) 95.00% and (ii) the Aggregate Collateral
Balance for such Distribution Date and (B) the amount, if any, by which (i)
the Aggregate Collateral Balance for such Distribution Date exceeds (ii) 0.50%
of the Aggregate Collateral Balance as of the Initial Cut-off Date (including
amounts in the Prefunding Account, as of the Closing Date).
B-2 Principal Payment Amount: For any Distribution Date on or after the
Stepdown Date and as long as a Trigger Event has not occurred with respect to
such Distribution Date, will be the amount, if any, by which (x) the sum of
(i) the aggregate Class Principal Balances of the Senior Certificates and the
aggregate Class Principal Balances of the Class M-1 Certificates, Class M-2
Certificates and Class B-1 Certificates, in each case, after giving effect to
payments on such Distribution Date and (ii) the Class Principal Balance of the
Class B-2 Certificates immediately prior to such Distribution Date exceeds (y)
the lesser of (A) the product of (i) 97.04% and (ii) the Aggregate Collateral
Balance for such Distribution Date and (B) the amount, if any, by which (i)
the Aggregate Collateral Balance for such Distribution Date exceeds (ii) 0.50%
of the Aggregate Collateral Balance as of the Initial Cut-off Date (including
amounts in the Prefunding Account, as of the Closing Date).
Balloon Loan: Any Mortgage Loan which, by its terms, does not fully
amortize the principal balance thereof by its stated maturity and thus
requires a payment at the stated maturity larger than the monthly payments due
thereunder.
Bankruptcy Code: The United States Bankruptcy Reform Act of 1978, as
amended.
10
Basis Risk Reserve Fund: The separate Eligible Account created and
initially maintained by the Trustee pursuant to Section 4.06 in the name of
the Trustee for the benefit of the Certificateholders and designated "U.S.
Bank National Association in trust for registered holders of Credit Suisse
First Boston Mortgage Securities Corp., Mortgage Pass-Through Certificates,
Series 2002-HE16." The Basis Risk Reserve Fund shall not be part of any REMIC.
Funds in the Basis Risk Reserve Fund shall be held in trust for the
Certificateholders for the uses and purposes set forth in this Agreement.
Basis Risk Shortfall: For any Class of LIBOR Certificates and any
Distribution Date, the sum of (i) the excess, if any, of the related Current
Interest calculated on the basis of the lesser of (x) the Certificate Index
plus the applicable Certificate Margin and (y) the Maximum Interest Rate over
the related Current Interest for the applicable Distribution Date; (ii) any
Basis Risk Shortfall remaining unpaid from prior Distribution Dates; and (iii)
30 days interest on the amount in clause (ii) calculated at a per annum rate
equal to the lesser of (x) the Certificate Index plus the applicable
Certificate Margin and (y) the Maximum Interest Rate.
Book-Entry Certificates: As specified in the Preliminary Statement.
Business Day: Any day other than (i) a Saturday or a Sunday, or (ii) a
day on which banking institutions in the City of New York, New York, or the
city in which the Corporate Trust Office of the Trustee is located, or savings
and loan institutions in the States of Colorado, Illinois, Utah or Texas are
authorized or obligated by law or executive order to be closed.
Capitalized Interest Account: The separate Eligible Account designated as
such and created and maintained by the Trustee pursuant to Section 3.06(h)
hereof. The Capitalized Interest Account shall be treated as an "outside
reserve fund" under applicable Treasury regulations and shall not be part of
any REMIC. Except as provided in Section 3.06(h) hereof, any investment
earnings on the Capitalized Interest Account shall be treated as owned by the
Depositor and will be taxable to the Depositor.
Capitalized Interest Deposit: $1,290,000.
Capitalized Interest Requirement: With respect to the June 2002
Distribution Date, an amount equal to 27 days of interest accruing at a per
annum rate equal to the sum of (a) the weighted average Pass-Through Rate of
the Offered Certificates (other than the Class A-IO Certificates) and (b)
3.14% on the Prefunded Amount outstanding at the end of the related Collection
Period. With respect to the July 2002 Distribution Date, an amount equal to
interest accruing during the related Accrual Period at a per annum rate equal
to the sum of (a) the weighted average Pass-Through Rate of the Offered
Certificates (other than the Class A-IO Certificates) for such Distribution
Date and (b) 2.89% on the sum of the Prefunded Amount at the end of the
related Collection Period and the aggregate Stated Principal Balance of the
Subsequent Mortgage Loans that do not have a first Due Date prior to July 1,
2002 transferred to the Trust during the related Collection Period. With
respect to the August 2002 Distribution Date, an amount equal to interest
accruing during the related Accrual Period at a per annum rate equal to the
sum of (a) the weighted average Pass-Through Rate of the Offered Certificates
(other than the Class A-IO Certificates) for such Distribution Date and (b)
2.64% on the sum of the Prefunded Amount at the end of the related Collection
Period and the aggregate Stated
11
Principal Balance of the Subsequent Mortgage Loans that do not have a first
Due Date prior to August 1, 2002 transferred to the Trust during the related
Collection Period. If the Capitalized Interest Requirement is insufficient to
enable the Subsidiary REMIC to pay the Subsidiary REMIC Regular Interests
their stated pass-through rates, the Class X Certificates will contribute any
amounts necessary to pay the Subsidiary REMIC Regular Interests their stated
pass-through rates. Any amounts contributed to the Subsidiary REMIC by the
Class X Certificates will not be eligible to fund overcollateralization.
Carryforward Interest: For any Class of Offered Certificates and
Distribution Date, the sum of (1) the amount, if any, by which (x) the sum of
(A) Current Interest for such Class for the immediately preceding Distribution
Date and (B) any unpaid Carryforward Interest from the immediately preceding
Distribution Date exceeds (y) the amount paid in respect of interest on such
Class on such immediately preceding Distribution Date, and (2) with respect to
the Offered Certificates (other than the Class A-IO Certificates), interest on
such amount for the related Accrual Period at the applicable Pass-Through Rate
for such Distribution Date.
Certificate: Any one of the Certificates executed by the Trustee in
substantially the forms attached hereto as exhibits.
Certificate Account: The separate Eligible Account created and maintained
with the Trustee, or any other bank or trust company acceptable to the Rating
Agencies which is incorporated under the laws of the United States or any
state thereof pursuant to Section 3.05, which account shall bear a designation
clearly indicating that the funds deposited therein are held in trust for the
benefit of the Trustee on behalf of the Certificateholders or any other
account serving a similar function acceptable to the Rating Agencies.
Certificate Balance: With respect to any Certificate at any date, the
maximum dollar amount of principal to which the Holder thereof is then
entitled hereunder, such amount being equal to the Denomination thereof minus
all distributions of principal previously made with respect thereto and, in
the case of any Subordinate Certificates, reduced by any Applied Loss Amounts
allocated to such Class on prior Distribution Dates pursuant to Section 4.03.
Exclusively for the purpose of determining any subrogation rights of FSA
arising under Section 4.07 hereof, "Certificate Balance" of the Class A-1,
Class A-2, Class A-3 and Class A-4 Certificates shall not be reduced by the
amount of any payments made by FSA in respect of principal on such
Certificates under the FSA Policy, except to the extent such payment shall
have been reimbursed to FSA pursuant to the provisions of this Agreement.
Certificate Index: With respect to each Distribution Date, the rate for
one month United States dollar deposits quoted on Telerate Page 3750 as of
11:00 a.m., London time, on the related Interest Determination Date relating
to each Class of LIBOR Certificates. If such rate does not appear on such page
(or such other page as may replace that page on that service, or if such
service is no longer offered, such other service for displaying LIBOR or
comparable rates as may be reasonably selected by Olympus ), the rate will be
the Reference Bank Rate. If no such quotations can be obtained and no
Reference Bank Rate is available, the Certificate Index will be the
Certificate Index applicable to the preceding Distribution Date. On the
Interest Determination Date immediately preceding each Distribution Date, the
Trustee shall determine the Certificate
12
Index for the Accrual Period commencing on such Distribution Date and inform
the Servicers of such rate.
Certificate Insurer: FSA, as issuer of the FSA Policy.
Certificate Margin: As to each Class of LIBOR Certificates, the
applicable amount set forth below:
Certificate
Class of LIBOR Certificates Margin
--------------------------- ------------------
(1) (2)
A-1................................................. 0.305% 0.610%
A-2................................................. 0.330% 0.660%
A-3................................................. 0.340% 0.680%
A-4................................................. 0.320% 0.640%
M-1................................................. 0.880% 1.320%
M-2................................................. 1.500% 2.000%
B-1................................................. 2.300% 2.800%
B-2................................................. 2.750% 3.250%
R................................................... 0.320% (3)
______________
(1) Prior to and on the Optional Termination Date.
(2) After the Optional Termination Date.
(3) It is expected that the Class Principal Balance of the Class R
Certificate will be reduced to zero prior to the Optional Termination
Date.
Certificate Owner: With respect to a Book-Entry Certificate, the Person
who is the beneficial owner of such Book-Entry Certificate.
Certificate Register: The register maintained pursuant to Section 5.02.
Certificateholder or Holder: The person in whose name a Certificate is
registered in the Certificate Register, and, with respect to the Class A-1,
Class A-2, Class A-3 and Class A-4 Certificates, FSA to the extent of any
amount paid under the FSA Policy in respect of principal, except that, solely
for the purpose of giving any consent pursuant to this Agreement, any
Certificate registered in the name of the Depositor or any affiliate of the
Depositor shall be deemed not to be Outstanding and the Percentage Interest
evidenced thereby shall not be taken into account in determining whether the
requisite amount of Percentage Interests necessary to effect such consent has
been obtained; provided, however, that if any such Person (including the
Depositor) owns 100% of the Percentage Interests evidenced by a Class of
Certificates, such Certificates shall be deemed to be Outstanding for purposes
of any provision hereof that requires the consent of the Holders of
Certificates of a particular Class as a condition to the taking of any action
hereunder. The Trustee is entitled to rely conclusively on a certification of
the Depositor or any affiliate of the Depositor in determining which
Certificates are registered in the name of an affiliate of the Depositor.
13
Class: All Certificates bearing the same class designation as set forth
in the Preliminary Statement.
Class A-IO Net Funds Cap: For any Distribution Date and the Class A-IO
Certificates, will be a per annum rate equal to the weighted average of (1)(A)
the Class A-1 Net Funds Cap (without adjustment for the actual number of days
in the Accrual Period) less (B) the rate obtained by multiplying (i) 12 and
(ii) the percentage obtained by dividing the Current Interest due the Class
A-1 Certificates on that Distribution Date by the Class Principal Balance of
the Class A-1 Certificates immediately prior to that Distribution Date; and
(2)(X) the Class A Group 2 Net Funds Cap (without adjustment for the actual
number of days in the Accrual Period) less (Y) the rate obtained by
multiplying (i) 12 and (ii) the percentage obtained by dividing the Current
Interest due the Class A-2, Class A-3 and Class A-4 Certificates on that
Distribution Date by the Class Principal Balance of the Class A-2, Class A-3
and Class A-4 Certificates immediately prior to that Distribution Date;
weighted according to the respective Class Principal Balances of (I) the Class
A-1 Certificates and (II) the Class A-2, Class A-3 and Class A-4 Certificates,
respectively.
Class A-1 Net Funds Cap: For any Distribution Date and the Class A-1
Certificates, will be a per annum rate equal to (a) a fraction, expressed as a
percentage, the numerator of which is the product of (1) the Optimal Interest
Remittance Amount for Loan Group 1 and such date and (2) 12, and the
denominator of which is the Aggregate Loan Group Collateral Balance of Loan
Group 1 for the immediately preceding Distribution Date, multiplied by (b) a
fraction, the numerator of which is 30 and the denominator of which is the
actual number of days in the immediately preceding Accrual Period.
Class A-IO Notional Amount: For any Distribution Date on or prior to the
November 2004 Distribution Date, will equal 60.75% of the aggregate of the
Class Principal Balances of the Class A-1, Class A-2, Class A-3 and Class A-4
Certificates immediately prior to that Distribution Date. After the
Distribution Date in November 2004, the Class A-IO Notional Amount will equal
zero.
Class A Group 2 Net Funds Cap: For any Distribution Date and the Class
A-2, Class A-3, Class A-4 and Class R Certificates will be a per annum rate
equal to (a) a fraction, expressed as a percentage, the numerator of which is
the product of (1) the Optimal Interest Remittance Amount for Loan Group 2 and
such date and (2) 12, and the denominator of which is the Aggregate Loan Group
Collateral Balance of Loan Group 2 for the immediately preceding Distribution
Date, multiplied by (b) a fraction, the numerator of which is 30 and the
denominator of which is the actual number of days in the immediately preceding
Accrual Period.
Class Principal Balance: With respect to any Class and as to any date of
determination, the aggregate of the Certificate Balances of all Certificates
of such Class as of such date.
Class R Certificate: A Certificate representing the Subsidiary REMIC
Residual Interest, the Intermediate REMIC Residual Interest and the Master
REMIC Residual Interest.
Class X Distributable Amount: With respect to any Distribution Date, the
excess of (i) the sum of (a) the interest accrued during the related Accrual
Period on the Class X notional
14
balance at the Pass-Through Rate for the Class X Certificates, as described in
the Preliminary Statement, (b) the amounts so accrued in all prior Accrual
Periods, and (c) any Overcollateralization Release Amounts for such
Distribution Dates over (ii) all amounts distributed pursuant to Section
4.02(e)(i) through 4.02(e)(xiv) on such Distribution Date.
Closing Date: May 29, 2002.
Code: The Internal Revenue Code of 1986, as the same may be amended from
time to time (or any successor statute thereto).
Collection Account: The accounts established and maintained by a Servicer
in accordance with Section 3.06.
Collection Period: With respect to any Distribution Date, the period
commencing on the second day of the month preceding the month in which such
Distribution Date occurs and ending on the first day of the month in which
such Distribution Date occurs.
Compensating Interest Payment: For any Distribution Date and the Mortgage
Loans serviced by a Servicer, the lesser of (i) the aggregate Servicing Fee
payable to that Servicer on such Distribution Date and (ii) the aggregate
Prepayment Interest Shortfall allocable to Payoffs for the Mortgage Loans for
that Distribution Date.
Corporate Trust Office: The designated office of the Trustee in the State
of Minnesota 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 000 Xxxx Xxxxx Xxxxxx, Xx. Xxxx,
XX 00000, Attn: Corporate Trust Structured Finance, Ref: CSFB 2002-HE16.
Credit Risk Manager: The Murrayhill Company, a Colorado corporation, and
any successor.
Credit Risk Management Agreements: The respective agreements between each
Servicer and the Credit Risk Manager dated as of May 29, 2002.
Credit Risk Manager Fee: The fee payable to the Credit Risk Manager on
each Distribution Date for its services as Credit Risk Manager, in an amount
equal to one-twelfth of the Credit Risk Manager Fee Rate multiplied by the
Stated Principal Balance of the Mortgage Loans immediately prior to such
Distribution Date.
Credit Risk Manager Fee Rate: 0.0175% per annum.
Current Interest: For any interest bearing Class of Offered Certificates
and Distribution Date, the amount of interest accruing at the applicable
Pass-Through Rate on the related Class Principal Balance or Class A-IO
Notional Amount, as applicable, of such Class during the related Accrual
Period; provided, that if and to the extent that on any Distribution Date the
Interest Remittance Amount is less than the aggregate distributions required
pursuant to Section 4.02(a) without regard to this proviso as a result of
Interest Shortfalls, then the Current Interest on each Class will be reduced,
on a pro rata basis in proportion to the amount of Current Interest
15
for each Class without regard to this proviso, by such Interest Shortfalls for
such Distribution Date.
Curtailment: Any payment of principal on a Mortgage Loan, made by or on
behalf of the related Mortgagor, other than a Scheduled Payment, a prepaid
Scheduled Payment or a Payoff, which is applied to reduce the outstanding
Stated Principal Balance of the Mortgage Loan.
Custodians: Bank One Trust Company, N.A., a national banking association,
or its successor in interest and LaSalle Bank National Association, or its
successor in interest.
Custodial Agreements: The Custodial Agreement dated as of the date hereof
between Bank One Trust Company, N.A., as custodian and the Trustee and the
Custodial Agreement dated as of the date hereof between LaSalle Bank National
Association, as custodian and the Trustee.
Cut-off Date: For any Initial Mortgage Loan, the Initial Cut-off Date.
For any Subsequent Mortgage Loan, the applicable Subsequent Cut-off Date.
Cut-off Date Principal Balance: As to any Mortgage Loan, the Stated
Principal Balance thereof as of the close of business on the Cut-off Date.
Defective Mortgage Loan: Any Mortgage Loan which is required to be
repurchased pursuant to Section 2.02 or 2.03.
Deferred Amount: For any Class of Subordinate Certificates (other than
the Class X Certificates) and Distribution Date, will equal the amount by
which (x) the aggregate of the Applied Loss Amounts previously applied in
reduction of the Class Principal Balance thereof exceeds (y) the aggregate of
amounts previously paid in reimbursement thereof. Any payment of Deferred
Amount pursuant to Section 4.02(e) shall not result in a reduction to the
Class Principal Balance of the Class of Certificate to which it is
distributed.
Definitive Certificates: Any Certificate evidenced by a Physical
Certificate and any Certificate issued in lieu of a Book-Entry Certificate
pursuant to Section 5.02(e).
Deleted Mortgage Loan: As defined in Section 2.03(d) herein.
Delinquency Rate: For any month will be, generally, the fraction,
expressed as a percentage, the numerator of which is the aggregate outstanding
principal balance of all Mortgage Loans 60 or more days delinquent (including
all foreclosures, bankruptcies and REO Properties) as of the close of business
on the last day of such month, and the denominator of which is the Aggregate
Collateral Balance as of the close of business on the last day of such month.
Denomination: With respect to each Certificate, the amount set forth on
the face thereof as the "Initial Certificate Balance of this Certificate" or
the "Initial Notional Amount of this Certificate" or, if neither of the
foregoing, the Percentage Interest appearing on the face thereof.
16
Depositor: Credit Suisse First Boston Mortgage Securities Corp., a
Delaware corporation, or its successor in interest.
Depository: The initial Depository shall be The Depository Trust Company,
the nominee of which is CEDE & Co., as the registered Holder of the Book-Entry
Certificates. The Depository shall at all times be a "clearing corporation" as
defined in Section 8-102(a)(5) of the Uniform Commercial Code of the State of
New York.
Depository Participant: A broker, dealer, bank or other financial
institution or other Person for whom from time to time a Depository effects
book-entry transfers and pledges of securities deposited with the Depository.
Determination Date: As to any Distribution Date and any Mortgage Loan,
the Business Day immediately preceding the 18th day of each month.
Distribution Date: The 25th day of each month or if such day is not a
Business Day, the first Business Day thereafter, in each case commencing in
June 2002.
Disqualified Organization: A "disqualified organization" under Section
860E of the Code, which as of the Closing Date is any of: (i) the United
States, any State or political subdivision thereof, any foreign government,
any international organization, or any agency or instrumentality of any of the
foregoing, (ii) any organization (other than a cooperative described in
Section 521 of the Code) which is exempt from the tax imposed by Chapter 1 of
the Code unless such organization is subject to the tax imposed by Section 511
of the Code, (iii) any organization described in Section 1381(a)(2)(C) of the
Code, (iv) an "electing large partnership" within the meaning of Section 775
of the Code or (v) any other Person so designated by the Trustee based upon an
Opinion of Counsel provided by nationally recognized counsel to the Trustee
that the holding of an ownership interest in a Class R Certificate by such
Person may cause the Trust Fund or any Person having an ownership interest in
any Class of Certificates (other than such Person) to incur liability for any
federal tax imposed under the Code that would not otherwise be imposed but for
the transfer of an ownership interest in the Class R Certificate to such
Person. A corporation will not be treated as an instrumentality of the United
States or of any state or political subdivision thereof, if all of its
activities are subject to tax and, a majority of its board of directors is not
selected by a governmental unit. The term "United States", "State" and
"international organizations" shall have the meanings set forth in Section
7701 of the Code.
DLJMC: DLJ Mortgage Capital, Inc., a Delaware corporation, and its
successors and assigns.
Due Date: With respect to each Mortgage Loan and any Distribution Date,
the date on which Scheduled Payments on such Mortgage Loan are due, which is
either the first day of the month of such Distribution Date, or if Scheduled
Payments on such Mortgage Loan are due on a day other than the first day of
the month, the day in such calendar month on which such Scheduled Payments are
due, exclusive of any days of grace.
Eligible Account: Either (i) an account or accounts maintained with a
federal or state chartered depository institution or trust company acceptable
to the Rating Agencies or (ii) an account or accounts the deposits in which
are insured by the FDIC to the limits established by
17
such corporation, provided that any such deposits not so insured shall be
maintained in an account at a depository institution or trust company whose
commercial paper or other short term debt obligations (or, in the case of a
depository institution or trust company which is the principal subsidiary of a
holding company, the commercial paper or other short term debt obligations of
such holding company) have been rated by each Rating Agency in its highest
short-term rating category, or (iii) a segregated trust account or accounts
(which shall be a "special deposit account") maintained with the Trustee or
any other federal or state chartered depository institution or trust company,
acting in its fiduciary capacity. Eligible Accounts may bear interest.
Eligible Investments: Any one or more of the obligations and securities
listed below:
(i) direct obligations of, and obligations fully guaranteed by, the
United States of America, or any agency or instrumentality of the United
States of America the obligations of which are backed by the full faith
and credit of the United States of America; or obligations fully
guaranteed by, the United States of America; the FHLMC, FNMA, the Federal
Home Loan Banks or any agency or instrumentality of the United States of
America rated Aa3 or higher by Xxxxx'x;
(ii) federal funds, demand and time deposits in, certificates of
deposits of, or bankers' acceptances issued by, any depository
institution or trust company incorporated or organized 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 or trust company which is the
principal subsidiary of a holding company, the commercial paper or other
short-term debt obligations of such holding company) are rated in the
highest ratings by each Rating Agency, and the long-term debt obligations
of such depository institution or trust company (or, in the case of a
depository institution or trust company which is the principal subsidiary
of a holding company, the long-term debt obligations of such holding
company) are rated in one of two of the highest ratings, by each Rating
Agency;
(iii) repurchase obligations with a term not to exceed 30 days
with respect to any security described in clause (i) above and entered
into with a depository institution or trust company (acting as a
principal) the short-term debt obligations of which are rated A-1 or
higher by S&P rated A-2 or higher by Xxxxx'x; provided, however, that
collateral transferred pursuant to such repurchase obligation must be of
the type described in clause (i) above and must (A) be valued daily at
current market price plus accrued interest, (B) pursuant to such
valuation, be equal, at all times, to 105% of the cash transferred by the
Trustee in exchange for such collateral, and (C) be delivered to the
Trustee or, if the Trustee is supplying the collateral, an agent for the
Trustee, in such a manner as to accomplish perfection of a security
interest in the collateral by possession of certificated securities;
(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
18
has a long-term unsecured debt rating in the highest available rating
category of Xxxxx'x, and a short-term unsecured debt rating of A-1 or
higher by S&P, at the time of such investment;
(v) commercial paper having an original maturity of less than 365
days and issued by an institution having a short-term unsecured debt
rating in the highest available rating category by each Rating Agency, at
the time of such investment;
(vi) a guaranteed investment contract approved by each of the Rating
Agencies and issued by an insurance company or other corporation having a
long-term unsecured debt rating in the highest available rating category
of Xxxxx'x, and a short-term unsecured debt rating of A-1 or higher by
S&P, at the time of such investment; and
(vii) money market funds having ratings in the highest available
rating category of Xxxxx'x and either "AAAm" or "AAAm-G" of S&P at the
time of such investment (any such money market funds which provide for
demand withdrawals being conclusively deemed to satisfy any maturity
requirements for Eligible Investments set forth herein) including money
market funds of the applicable Servicer or the Trustee and any such funds
that are managed by the applicable Servicer or the Trustee or their
respective Affiliates or for the applicable Servicer or the Trustee or
any Affiliate of either acts as advisor, as long as such money market
funds satisfy the criteria of this subparagraph (vii);
provided, however, that no such instrument shall be an Eligible Investment if
such instrument evidences either (i) a right to receive only interest payments
with respect to the obligations underlying such instrument, or (ii) both
principal and interest payments derived from obligations underlying such
instrument and the principal and interest payments with respect to such
instrument provide a yield to maturity of greater than 120% of the yield to
maturity at par of such underlying obligations.
ERISA: The Employee Retirement Income Security Act of 1974, as amended.
ERISA-Qualifying Underwriting: With respect to any ERISA-Restricted
Certificate, a best efforts or firm commitment underwriting or private
placement that meets the requirements of the Underwriters' Exemption.
ERISA-Restricted Certificate: As specified in the Preliminary Statement.
Errors and Omissions Insurance Policy: An errors and omissions insurance
policy to be maintained by each Servicer pursuant to Section 3.19.
Escrow Account: The separate account or accounts created and maintained
by the applicable Servicer pursuant to Section 3.07.
Escrow Payments: With respect to any Mortgage Loan, the amounts
constituting ground rents, taxes, mortgage insurance premiums, fire and hazard
insurance premiums, and any other payments required to be escrowed by the
Mortgagor with the mortgagee pursuant to the Mortgage, applicable law or any
other related document.
19
Event of Default: As defined in Section 7.01 herein.
Expense Fee: As to each Mortgage Loan, the sum of the related Servicing
Fee, the Trustee Fee, the Credit Risk Manager Fee and any lender paid Primary
Insurance Policy premium, if applicable.
Expense Fee Rate: As to each Mortgage Loan, the sum of the related
Servicing Fee Rate, the Trustee Fee Rate, the Credit Risk Manager Fee Rate and
the rate at which any lender paid Primary Insurance Policy premium is
calculated, if applicable.
Fairbanks: Fairbanks Capital Corp, a Utah corporation, and its successors
and assigns.
Fairbanks Performance Evaluation: As described in Section 3.23 herein.
Fairbanks Serviced Loans: The Mortgage Loans identified as such on the
Mortgage Loan Schedule.
Fairbanks Termination Test: With respect to the Fairbanks Serviced Loans
and any Distribution Date, Fairbanks will fail the Fairbanks Termination Test
if (a) Fairbanks fails the Fairbanks Performance Evaluation as set forth in
Section 3.23 herein and (b) the Realized Loss Percentage for the Fairbanks
Serviced Loans exceeds the applicable percentages set forth below with respect
to such Distribution Date:
Distribution Date Occurring In Percentage
------------------------------ ----------
June 2002 - May 2004 1.75%
June 2004 - May 2005 3.50%
June 2005 - May 2006 5.25%
June 2006 and thereafter 7.25%
FDIC: The Federal Deposit Insurance Corporation, or any successor
thereto.
FHLMC: The Federal Home Loan Mortgage Corporation, a corporate
instrumentality of the United States created and existing under Title III of
the Emergency Home Finance Act of 1970, as amended, or any successor thereto.
Fidelity Bond: A fidelity bond to be maintained by each Servicer pursuant
to Section 3.19.
Final Recovery Determination: With respect to any defaulted Mortgage Loan
or any REO Property (other than a Mortgage Loan or REO Property purchased by
the Seller, the Depositor or any Servicer pursuant to or as contemplated by
Section 3.12(f) or Section 9.01), a determination made by the related Servicer
that all Insurance Proceeds, Liquidation Proceeds and
20
other payments or recoveries which such Servicer, in its reasonable good faith
judgment, expects to be finally recoverable in respect thereof have been so
recovered. Each Servicer shall maintain records, prepared by a Servicing
Officer, of each Final Recovery Determination made thereby.
Final Scheduled Distribution Date: The Distribution Date in October 2032.
FIRREA: The Financial Institutions Reform, Recovery and Enforcement Act
of 1989.
FNMA: The Federal National Mortgage Association, a federally chartered
and privately owned corporation organized and existing under the Federal
National Mortgage Association Charter Act, or any successor thereto.
FNMA Guides: The FNMA Sellers' Guide and the FNMA Servicers' Guide and
all amendments or additions thereto.
FSA: Financial Security Assurance Inc., a New York stock insurance
company, or any successor thereto.
FSA Account: The account established pursuant to Section 4.07(c) hereof.
FSA Contact Persons: Collectively, the officers designated by each
Servicer to provide information to FSA pursuant to Section 4.07(l).
FSA Default: As defined in Section 4.07(o) herein.
FSA Policy: The irrevocable Certificate Guaranty Insurance Policy, No.
51278 including any endorsements thereto, issued by FSA with respect to the
Class A-1, Class A-2, Class A-3 and Class A-4 Certificates, in the form
attached hereto as Exhibit P.
FSA Premium: With respect to any Distribution Date, an amount equal to
1/12th of the product of (a) the aggregate Class Principal Balance of the
Class A Certificates as of such Distribution Date (prior to giving effect to
any distributions thereon on such Distribution Date) and (b) the FSA Premium
Rate.
FSA Premium Rate: 0.06% per annum.
FSA Reimbursement Amount: The sum of (i) all amounts paid by FSA under
the FSA Policy which have not been previously reimbursed, (ii) all unpaid FSA
Premiums, (iii) all amounts due to FSA under this Agreement and (iv) interest
on the foregoing at the Late Payment Rate.
Gross Margin: With respect to each adjustable-rate Mortgage Loan, the
fixed percentage set forth in the related Mortgage Note that is added to the
Index on each Adjustment Date in accordance with the terms of the Mortgage
Note used to determine the Mortgage Rate for such Mortgage Loan.
Group 1 Allocation Amount: For any Distribution Date, the product of the
Senior Principal Payment Amount for that Distribution Date and a fraction the
numerator of which is
21
the Principal Remittance Amount derived for Loan Group 1 and the denominator
of which is the Principal Remittance Amount, in each case for that
Distribution Date.
Group 2 Allocation Amount: For any Distribution Date, the product of the
Senior Principal Payment Amount for that Distribution Date and a fraction the
numerator of which is the Principal Remittance Amount derived from Loan Group
2 and the denominator of which is the Principal Remittance Amount, in each
case for that Distribution Date.
Group 1 Excess Interest Amount: For any Distribution Date, the product of
the amount of Monthly Excess Interest required to be distributed on that
Distribution Date pursuant to Section 4.02(e)(i)(A) and a fraction the
numerator of which is the Principal Remittance Amount derived from Loan Group
1 and the denominator of which is the Principal Remittance Amount, in each
case for that Distribution Date.
Guaranteed Distributions: As defined in the FSA Policy.
Index: With respect to each adjustable-rate Mortgage Loan and with
respect to each related Adjustment Date, the index as specified in the related
Mortgage Note.
Indirect Participant: A broker, dealer, bank or other financial
institution or other Person that clears through or maintains a custodial
relationship with a Depository Participant.
Initial Cut-off Date: May 1, 2002.
Initial Mortgage Loan: A Mortgage Loan conveyed to the Trust Fund on the
Closing Date pursuant to this Agreement as identified on the Mortgage Loan
Schedule delivered to the Trustee on the Closing Date.
Insolvency Proceeding: As defined in Section 4.07(k) herein.
Insurance Policy: With respect to any Mortgage Loan included in the Trust
Fund, any Primary Insurance Policy, any standard hazard insurance policy,
flood insurance policy or title insurance policy, including all riders and
endorsements thereto in effect, including any replacement policy or policies
for any Insurance Policies.
Insurance Proceeds: Proceeds of any Primary Insurance Policies and any
other Insurance Policies with respect to the Mortgage Loans, to the extent
such proceeds are not applied to the restoration of the related Mortgaged
Property or released to the Mortgagor in accordance with the Servicer's normal
servicing procedures.
Insured Payments: As to any Distribution Date, amounts actually paid
under the FSA Policy.
Interest Determination Date: With respect to the LIBOR Certificates and
for each Accrual Period, the second LIBOR Business Day preceding the
commencement of such Accrual Period.
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Interest Remittance Amount: For any Distribution Date and Loan Group, an
amount equal to the sum of (1) all interest collected (other than related
Payaheads and Simple Interest Excess, if applicable) or advanced in respect of
Scheduled Payments on the Mortgage Loans in such Loan Group during the related
Collection Period, the interest portion of Payaheads previously received and
intended for application in the related Collection Period and the interest
portion of all Payoffs and Curtailments received on the Mortgage Loans in such
Loan Group during the related Prepayment Period (other than interest on
Principal Prepayments that occur during the portion of the Prepayment Period
that is in the same calendar month as the related Distribution Date), less (x)
the Servicing Fees and any lender paid Primary Insurance Policy premiums with
respect to such Mortgage Loans and (y) unreimbursed Advances and other amounts
due to a Servicer or Trustee with respect to such Mortgage Loans, to the
extent allocable to interest, (2) all Compensating Interest Payments paid by a
Servicer with respect to the related Mortgage Loans with respect to such
Distribution Date, (3) the portion of any Substitution Adjustment Amount or
Repurchase Price paid with respect to such Mortgage Loans during the calendar
month immediately preceding the Distribution Date allocable to interest, (4)
all Net Liquidation Proceeds, and any Insurance Proceeds and other recoveries
(net of unreimbursed Advances, Servicing Advances and expenses, to the extent
allocable to interest, and unpaid Servicing Fees) collected with respect to
such Mortgage Loans during the prior calendar month, to the extent allocable
to interest, and (5) any amounts withdrawn from the Simple Interest Excess
Sub-Account and the Capitalized Interest Account, in either case to pay
interest on the related Certificates with respect to such Distribution Date.
If on any Determination Date the amount deposited into the Collection Account
with respect to Compensating Interest paid by a Servicer of a Simple Interest
Mortgage Loan is the amount calculated in clause (ii) of the definition of
Compensating Interest Payment for such Distribution Date, any remaining
Servicing Fee of the Servicer of such Simple Interest Mortgage Loan shall be
available to cover any Net Simple Interest Shortfalls remaining on such
Distribution Date, after giving effect to the withdrawal from the Simple
Interest Excess Sub-Account pursuant to Section 3.07(g) on such Determination
Date.
Interest Shortfall: For any Distribution Date, an amount equal to the
aggregate shortfall, if any, in collections of interest (adjusted to the
related Net Mortgage Rate) on Mortgage Loans resulting from (a) Prepayment
Interest Shortfalls to the extent not covered by a Compensating Interest
Payment and (b) interest payments on certain of the Mortgage Loans being
limited pursuant to the provisions of the Soldiers' and Sailors' Civil Relief
Act of 1940.
Intermediate REMIC: As specified in the Preliminary Statement.
Late Payment Rate: means the lesser of (a) the greater of (i) the per
annum rate of interest, publicly announced from time to time by JPMorgan Chase
Bank at its principal office in New York, New York, as its prime or base
lending rate (any change in such rate of interest to be effective on the date
such change is announced by JPMorgan Chase Bank) plus 3%, and (ii) the then
applicable highest rate of interest on the Class A Certificates and (b) the
maximum rate permissible under applicable usury or similar laws limiting
interest rates. The Late Payment Rate shall be computed on the basis of the
actual number of days elapsed over a year of 360 days.
23
LIBOR Business Day: Any day other than (i) a Saturday or a Sunday or (ii)
a day on which banking institutions in the States of New York or Minnesota or
in the city of London, England are required or authorized by law to be closed.
LIBOR Certificates: As defined in the Preliminary Statement.
Liquidation Mortgage Loan: With respect to any Distribution Date, a
defaulted Mortgage Loan (including any REO Property) which was liquidated in
the calendar month preceding the month of such Distribution Date and as to
which the Servicer has determined (in accordance with this Agreement) that it
has received all amounts it expects to receive in connection with the
liquidation of such Mortgage Loan, including the final disposition of the
related REO Property (exclusive of any possibility of a deficiency judgment).
Liquidation Proceeds: Amounts, including Insurance Proceeds, received in
connection with the partial or complete liquidation of defaulted Mortgage
Loans, whether through trustee's sale, foreclosure sale or otherwise or
amounts received in connection with any condemnation or partial release of a
Mortgaged Property and any other proceeds received in connection with an REO
Property.
Loan Group: Any of Loan Group 1 or Loan Group 2, as applicable.
Loan Group 1: All Mortgage Loans identified as Loan Group 1 Mortgage
Loans on the Mortgage Loan Schedule.
Loan Group 2: All Mortgage Loans identified as Loan Group 2 Mortgage
Loans on the Mortgage Loan Schedule.
Loan-to-Value Ratio: With respect to any Mortgage Loan and as to any date
of determination, the fraction (expressed as a percentage) the numerator of
which is the sum of the principal balance of the related Mortgage Loan at such
date of determination, and the denominator of which is (a) in the case of a
purchase, the lesser of the selling price of the related Mortgaged Property
and the Appraised Value of the related Mortgaged Property, or (b) in the case
of a refinance, the amount set forth in an appraisal made in connection with
the refinancing of the related Mortgaged Loan as the value of the related
Mortgaged Property.
Lost Mortgage Note: Any Mortgage Note the original of which was
permanently lost or destroyed and has not been replaced.
M-1 Principal Payment Amount: For any Distribution Date on or after the
Stepdown Date and as long as a Trigger Event has not occurred with respect to
such Distribution Date, will be the amount, if any, by which (x) the sum of
(i) the aggregate Class Principal Balance of the Senior Certificates after
giving effect to payments on such Distribution Date and (ii) the Class
Principal Balance of the Class M-1 Certificates immediately prior to such
Distribution Date exceeds (y) the lesser of (A) the product of (i) 77.52% and
(ii) the Aggregate Collateral Balance for such Distribution Date and (B) the
amount, if any, by which (i) the Aggregate Collateral Balance for such
Distribution Date exceeds (ii) 0.50% of the Aggregate Collateral Balance as of
the Initial Cut-off Date (including amounts in the Prefunding Account as of
the Closing Date).
00
X-0 Xxxxxxxxx Xxxxxxx Xxxxxx: For any Distribution Date on or after the
Stepdown Date and as long as a Trigger Event has not occurred with respect to
such Distribution Date, will be the amount, if any, by which (x) the sum of
(i) the aggregate Class Principal Balances of the Senior Certificates and the
Class Principal Balance of the Class M-1 Certificates, in each case, after
giving effect to payments on such Distribution Date and (ii) the Class
Principal Balance of the Class M-2 Certificates immediately prior to such
Distribution Date exceeds (y) the lesser of (A) the product of (i) 87.04% and
(ii) the Aggregate Collateral Balance for such Distribution Date and (B) the
amount, if any, by which (i) the Aggregate Collateral Balance for such
Distribution Date exceeds (ii) 0.50% of the Aggregate Collateral Balance as of
the Initial Cut-off Date (including amounts in the Prefunding Account as of
the Closing Date).
Majority in Interest: As to any Class of Regular Certificates, the
Holders of Certificates of such Class evidencing, in the aggregate, at least
51% of the Percentage Interests evidenced by all Certificates of such Class.
Master REMIC: As specified in the Preliminary Statement.
Maximum Interest Rate: For the Class X-0, Xxxxx X-0, Class A-3, Class A-4
and Class R Certificates and any Distribution Date, an annual rate equal to
the weighted average of (i) the weighted average Maximum Mortgage Rates minus
the weighted average Expense Fee Rate of the adjustable-rate mortgage loans in
the related Loan Group and (ii) the weighted average Net Mortgage Rates of the
fixed-rate mortgage loans in the related Loan Group. For the Class M-1, Class
M-2, Class B-1 and Class B-2 Certificates and any Distribution Date, an annual
rate equal to the weighted average of (x) the weighted average Maximum
Mortgage Rates minus the weighted average Expense Fee Rate of the
adjustable-rate Mortgage Loans in both Loan Groups and the (y) Net Mortgage
Rates of the fixed-rate Mortgage Loans in both Loan Groups. All weighted
averages calculated hereunder shall be based on Stated Principal Balance of
the applicable Mortgage Loans as of the first day of the related Collection
Period.
Maximum Mortgage Rate: With respect to each Mortgage Loan having an
adjustable-rate Mortgage Rate, the percentage set forth in the related
Mortgage Note as the maximum Mortgage Rate thereunder.
Minimum Mortgage Rate: With respect to each Mortgage Loan having an
adjustable-rate Mortgage Rate, the percentage set forth in the related
Mortgage Note as the minimum Mortgage Rate thereunder.
Monthly Excess Cashflow: For any Distribution Date, an amount equal to
the sum of the Monthly Excess Interest and Overcollateralization Release
Amount, if any, for such date.
Monthly Excess Interest: As to any Distribution Date, the Interest
Remittance Amount remaining after the application of payments pursuant to
clauses (i) through (x) of Section 4.02(a) and the Principal Payment Amount
remaining after the application of payments pursuant to clauses (i) through
(vi). of Section 4.02(c) or 4.02(d), as applicable.
Monthly Statement: The statement delivered to the Certificateholders
pursuant to Section 4.04.
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Moody's: Xxxxx'x Investors Service, Inc., or any successor thereto. For
purposes of Section 10.05(b) the address for notices to Moody's shall be
Xxxxx'x Investors Service, Inc., 00 Xxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000,
Attention: Residential Pass-Through Monitoring, or such other address as
Moody's may hereafter furnish to the Depositor, the Servicer and the Trustee.
Mortgage: The mortgage, deed of trust or other instrument creating a
first lien on an estate in fee simple or leasehold interest in real property
securing a Mortgage Note.
Mortgage File: The Mortgage documents listed in Section 2.01(b) hereof
pertaining to a particular Mortgage Loan and any additional documents
delivered to the Trustee or the applicable Custodian to be added to the
Mortgage File pursuant to this Agreement.
Mortgage Loans: Such of the mortgage loans transferred and assigned to
the Trustee pursuant to the provisions hereof as from time to time are held as
a part of the Trust Fund (including any REO Property), the mortgage loans so
held being identified in the Mortgage Loan Schedule, notwithstanding
foreclosure or other acquisition of title of the related Mortgaged Property.
Such mortgage loans include conventional, adjustable-rate and fixed-rate,
fully amortizing and balloon, first lien residential mortgage loans, all of
which have original terms to stated maturity of up to 30 years.
Mortgage Loan Schedule: The list of Mortgage Loans (as from time to time
amended by the Seller to reflect the addition of Qualified Substitute Mortgage
Loans and the purchase of Mortgage Loans pursuant to Section 2.02 or 2.03)
transferred to the Trustee as part of the Trust Fund and from time to time
subject to this Agreement, attached hereto as Schedule I, setting forth the
following information with respect to each Mortgage Loan by Loan Group:
(i) the Mortgage Loan identifying number;
(ii) the Mortgagor's name;
(iii) the street address of the Mortgaged Property including the
state and zip code;
(iv) a code indicating the type of Mortgaged Property and the
occupancy status;
(v) a code indicating the servicer;
(vi) the original months to maturity;
(vii) a code indicating the Loan-to-Value Ratio at origination;
(viii) the Mortgage Rate as of the Cut-off Date;
(ix) the stated maturity date;
(x) the amount of the Scheduled Payment as of the Cut-off Date;
26
(xi) the original principal amount of the Mortgage Loan;
(xii) the principal balance of the Mortgage Loan as of the close of
business on the Cut-off Date, after deduction of payments of principal
due on or before the Cut-off Date whether or not collected;
(xiii) the purpose of the Mortgage Loan (i.e., purchase, rate and
term refinance, equity take-out refinance);
(xiv) a code indicating whether a Prepayment Premium is required to
be paid in connection with a prepayment of the Mortgage Loan and the
amount of the Prepayment Premium;
(xv) an indication whether the Mortgage Loan accrues interest at an
adjustable Mortgage Rate or a fixed Mortgage Rate and whether such
Mortgage Loan is a Simple Interest Mortgage Loan;
(xvi) the Index that is associated with such Mortgage Loan, if
applicable;
(xvii) the Gross Margin, if applicable;
(xviii) the Periodic Rate Cap, if applicable;
(xix) the Minimum Mortgage Rate, if applicable;
(xx) the Maximum Mortgage Rate, if applicable;
(xxi) the first Adjustment Date after the Cut-off Date, if
applicable; and
(xxii) the rate at which any lender paid Primary Insurance Policy
premium is calculated, if applicable.
With respect to the Mortgage Loans in the aggregate, each Mortgage
Loan Schedule shall set forth the following information, as of the
Cut-off Date:
(xxiii) the number of Mortgage Loans;
(xxiv) the current aggregate principal balance of the Mortgage Loans
as of the close of business on the Cut-off Date, after deduction of
payments of principal due on or before the Cut-off Date whether or not
collected;
(xxv) the weighted average Mortgage Rate of the Mortgage Loans; and
(xxvi) a field indicating the applicable Custodian as of the Closing
Date.
Mortgage Note: The original executed note or other evidence of
indebtedness evidencing the indebtedness of a Mortgagor under a Mortgage Loan.
Mortgage Pool: All of the Mortgage Loans.
27
Mortgage Rate: The annual rate of interest borne by a Mortgage Note.
Mortgaged Property: The underlying real property securing a Mortgage
Loan.
Mortgagor: The obligor(s) on a Mortgage Note.
Net Excess Spread: With respect to any Distribution Date, a fraction,
expressed as a percentage, the numerator of which is equal to the excess of
(i) the aggregate Stated Principal Balance for such Distribution Date of the
Mortgage Loans, multiplied by the product of (a) the Net WAC Rate and (b) the
actual number of days elapsed in the related Accrual Period divided by 360,
over (ii) the aggregate Current Interest for such Distribution Date, and the
denominator of which is an amount equal to the Aggregate Collateral Balance
for such Distribution Date of the Mortgage Loans, multiplied by the actual
number of days elapsed in the related Accrual Period divided by 360.
Net Funds Cap: Any of the Class A-1 Net Funds Cap, the Class A Group 2
Net Funds Cap, the Class A-IO Net Funds Cap, or the Subordinate Net Funds Cap,
as applicable.
Net Liquidation Proceeds: Liquidation Proceeds, net of (1) unreimbursed,
reasonable out-of-pocket expenses and (2) unreimbursed Servicing Fees,
Servicing Advances and Advances.
Net Mortgage Rate: As to each Mortgage Loan, and at any time, the per
annum rate equal to the Mortgage Rate less the related Expense Fee Rate.
Net Simple Interest Excess: As of any Distribution Date, the excess, if
any, of the aggregate amount of Simple Interest Excess over the amount of
Simple Interest Shortfall for the related Collection Period.
Net Simple Interest Shortfall: As of any Distribution Date, the excess,
if any, of the aggregate amount of Simple Interest Shortfall over the amount
of Simple Interest Excess for the related Collection Period.
Net WAC Rate: As to any Distribution Date, a rate equal to the weighted
average of the Net Mortgage Rates on the Mortgage Loans for the related
Collection Period, weighted on the basis of the Stated Principal Balances as
of the first day of the related Collection Period.
Nonrecoverable Advance: With respect to any Mortgage Loan, any portion of
an Advance or a Servicing Advance previously made or proposed to be made by
the Servicers that, in the good faith judgment of the Servicers, will not be
ultimately recoverable by the Servicers from the related Mortgagor, related
Liquidation Proceeds or otherwise.
Notional Amount Certificates: As specified in the Preliminary Statement.
Offered Certificates: As specified in the Preliminary Statement.
Officer's Certificate: A certificate signed by the Chairman of the Board
or the Vice Chairman of the Board or the President or a Vice President or an
Assistant Vice President or the Treasurer or the Secretary or one of the
Assistant Treasurers or Assistant Secretaries of a
28
Servicer or any certificate of any Servicing Officer, and delivered to the
Depositor or the Trustee, as the case may be, as required by this Agreement.
Olympus: Olympus Servicing, L.P., a Delaware limited partnership, and its
successors and assigns.
Olympus Serviced Loans: The Mortgage Loans identified as such on the
Mortgage Loan Schedule.
Opinion of Counsel: A written opinion of counsel, who may be counsel for
the Depositor or a Servicer, including in-house counsel, reasonably acceptable
to the Trustee; provided, however, that with respect to the interpretation or
application of the REMIC Provisions, such counsel must (i) in fact be
independent of the Depositor and the Servicers, (ii) not have any material
direct financial interest in the Depositor or the Servicers or in any
affiliate of either, and (iii) not be connected with the Depositor or the
Servicers as an officer, employee, promoter, underwriter, trustee, partner,
director or person performing similar functions. The cost of any Opinion of
Counsel, except as otherwise specifically provided herein, shall not be at the
expense of the Trustee.
Optimal Interest Remittance Amount: For any Distribution Date and Loan
Group, will be equal to the excess of (i) the product of (1) (x) the weighted
average Net Mortgage Rate of the Mortgage Loans in such Loan Group as of the
first day of the related Collection Period less the product of (a) the FSA
Premium Rate multiplied by (b) the aggregate Class Principal Balance of either
the Class A-1 Certificates or the Class A-2, Class A-3 and Class A-4
Certificates, as applicable for such Loan Group, divided by the applicable
Aggregate Loan Group Collateral Balance as of the first day of the related
Collection Period, divided by (y) 12 and (2) the applicable Aggregate Loan
Group Collateral Balance for the immediately preceding Distribution Date, over
(ii) any expenses that reduce the Interest Remittance Amount for that Loan
Group which did not arise as a result of a default or delinquency of the
related Mortgage Loans.
Optional Termination Date: The first Distribution Date on which Olympus
may exercise its right to terminate the Trust Fund pursuant to Section 9.01.
OTS: The Office of Thrift Supervision.
Outsourcer: As defined in Section 3.02 herein.
Outstanding: With respect to the Certificates as of any date of
determination, all Certificates theretofore executed and authenticated under
this Agreement except:
(i) Certificates theretofore canceled by the Trustee or delivered to
the Trustee for cancellation; and
(ii) Certificates in exchange for which or in lieu of which other
Certificates have been executed and delivered by the Trustee pursuant to
this Agreement.
29
Outstanding Mortgage Loan: As of any Due Date, a Mortgage Loan with a
Stated Principal Balance greater than zero which was not the subject of a
Payoff prior to such Due Date and which did not become a Liquidation Mortgage
Loan prior to such Due Date.
Overcollateralization Amount: For any Distribution Date, an amount equal
to the amount, if any, by which (x) the applicable Aggregate Collateral
Balance for such Distribution Date exceeds (y) the aggregate Class Principal
Balance of the Offered Certificates after giving effect to payments on such
Distribution Date.
Overcollateralization Deficiency: For any Distribution Date will be equal
to the amount, if any, by which (x) the Targeted Overcollateralization Amount
for such Distribution Date exceeds (y) the Overcollateralization Amount for
such Distribution Date, calculated for this purpose after giving effect to the
reduction on such Distribution Date of the aggregate Class Principal Balance
of the Certificates resulting from the payment of the Principal Payment Amount
on such Distribution Date, but prior to allocation of any Applied Loss Amount
on such Distribution Date.
Overcollateralization Release Amount: For any Distribution Date, an
amount equal to the lesser of (x) the related Principal Remittance Amount for
such Distribution Date and (y) the amount, if any, by which (1) the
Overcollateralization Amount for such date, calculated for this purpose on the
basis of the assumption that 100% of the aggregate Principal Remittance Amount
for such date is applied on such date in reduction of the aggregate of the
Class Principal Balances of the Certificates, exceeds (2) the Targeted
Overcollateralization Amount for such date.
Overfunded Interest Amount: With respect to any Subsequent Transfer Date,
the excess of (A) the amount on deposit in the Capitalized Interest Account on
such date over (B) the excess of (i) the amount of interest accruing at the
sum of the (a) assumed weighted average Pass-Through Rate of the Offered
Certificates and (b) the Applicable Rate on the Prefunded Amount outstanding
at the end of the related Collection Period for the total number of days
remaining through the end of the Accrual Periods ending June 24, 2002, July
24, 2002 and August 24, 2002 over (ii) one month of investment earnings on the
amount on deposit in the Capitalized Interest Account on such date at an
annual rate of 1.25%. The assumed weighted average Pass-Through Rate will be
calculated assuming the Certificate Index is 1.84% for any Subsequent Transfer
Date prior to the June 2002 Distribution Date, 2.09% for any Subsequent
Transfer Date prior to the July 2002 Distribution Date and 2.34% for any
Subsequent Transfer Date prior to the August 2002 Distribution Date.
Ownership Interest: As to any Residual Certificate, any ownership or
security interest in such Certificate including any interest in such
Certificate as the Holder thereof and any other interest therein, whether
direct or indirect, legal or beneficial.
Pass-Through Rate: With respect to the any Class of LIBOR Certificates
and any Distribution Date, a per annum rate equal to the lesser of (x) the
related Certificate Index for such Distribution Date, plus the related
Certificate Margin and (y) the applicable Net Funds Cap for such Distribution
Date. With respect to the Class A-IO Certificates and any Distribution Date on
or prior to November 2004, a per annum rate equal to the lesser of (a) the
excess, if any,
30
of 8.00% over the Certificate Index for such Distribution Date and (b) the
Class A-IO Net Funds Cap. With respect to the Class X Certificates, the rate
set forth in the Preliminary Statement.
Payahead: Any Scheduled Payment intended by the related Mortgagor to be
applied in a Collection Period subsequent to the Collection Period in which
such payment was received.
Payoff: Any payment of principal on a Mortgage Loan equal to the entire
outstanding principal balance of such Mortgage Loan, if received in advance of
the last scheduled Due Date for such Mortgage Loan and accompanied by an
amount of interest equal to accrued unpaid interest on the Mortgage Loan to
the date of such payment-in-full.
Percentage Interest: As to any Certificate, either the percentage set
forth on the face thereof or equal to the percentage obtained by dividing the
Denomination of such Certificate by the aggregate of the Denominations of all
Certificates of the same Class.
Performance Standards: The standards set forth in Exhibit S herein.
Permitted Transferee: Any person other than a Disqualified Organization
or a Person that is not a citizen or resident of the United States, a
corporation, partnership, or other entity (treated as a corporation or
partnership for federal income tax purposes) created or organized in or under
the laws of the United States, any State thereof or the District of Columbia,
or an estate whose income from sources without the United States is includible
in gross income for federal income tax purposes regardless of its connection
with the conduct of a trade or business within the United States or a trust if
a court within the United States is able to exercise primary supervision over
the administration of the trust and one or more United States persons have the
authority to control all substantial decisions of the trust unless such Person
has furnished the transferor and the Trustee with a duly completed Internal
Revenue Service Form W-8ECI. The terms "United States" and "State" shall have
the meanings set forth in section 7701 of the Code or successor provisions.
Person: Any individual, corporation, partnership, joint venture,
association, limited liability company, joint-stock company, trust,
unincorporated organization or government, or any agency or political
subdivision thereof.
Physical Certificates: As specified in the Preliminary Statement.
Preference Claim: As defined in Section 4.07(k) herein.
Prefunded Amount: The amount deposited in the Prefunding Account on the
Closing Date, which shall equal $91,805,430.
Prefunding Account: The separate Eligible Account created and maintained
by the Trustee pursuant to Section 3.06 in the name of the Trustee for the
benefit of the Certificateholders and designated "U.S. Bank National
Association, in trust for registered holders of CSFB Mortgage Pass-Through
Certificates, CSFB ABS Trust Series 2002-HE16" Funds in the Prefunding Account
shall be held in trust for the Certificateholders for the uses and purposes
set forth in this Agreement and shall not be a part of any REMIC created
hereunder; provided,
31
however, that any investment income earned from Permitted Investments made
with funds in the Prefunding Account shall be for the account of the
Depositor.
Prefunding Period: The period from the Closing Date until the earlier of
(i) the date on which the amount on deposit in the Prefunding Account is
reduced to zero, or (ii) an Event of Default occurs or (iii) August 24, 2002.
Prepayment Interest Shortfall: As to any Distribution Date, Mortgage Loan
and Principal Prepayment, other than Principal Prepayments in full that occur
during the portion of the Prepayment Period that is in the same calendar month
as the Distribution Date, the difference between (i) one full month's interest
at the applicable Mortgage Rate, as reduced by the Servicing Fee Rate on the
outstanding principal balance of such Mortgage Loan immediately prior to such
prepayment and (ii) the amount of interest due and actually received from the
related Mortgagor that accrued during the month immediately preceding such
Distribution Date with respect to such Mortgage Loan in connection with such
Principal Prepayment, as reduced by the Servicing Fee.
Prepayment Premium: With respect to each Mortgage Loan, the prepayment
charge or penalty interest required to be paid by the Mortgagor in connection
with a prepayment of the related Mortgage Loan, as provided in the related
Mortgage Note or Mortgage, and as specified on the Mortgage Loan Schedule.
Prepayment Period: With respect to any Distribution Date and any Payoff,
the period from the fifteenth day of the calendar month preceding the month in
which such Distribution Date occurs (or in the case of the first Distribution
Date, from the Initial Cut-off Date) through the fourteenth day of the month
in which such Distribution Date occurs. With respect to any Distribution Date
and any Curtailment, the calendar month preceding such Distribution Date.
Primary Insurance Policy: Each policy of primary mortgage guaranty
insurance or any replacement policy therefor with respect to any Mortgage
Loan.
Principal Payment Amount: For any Distribution Date, an amount equal to
the related Principal Remittance Amount for such date minus the related
Overcollateralization Release Amount, if any, for such date.
Principal Prepayment: Any payment of principal on a Mortgage Loan which
constitutes a Payoff or Curtailment.
Principal Remittance Amount: For any Distribution Date, an amount equal
to the sum of (1) all principal collected (other than Payaheads) or advanced
in respect of Scheduled Payments on the Mortgage Loans during the related
Collection Period (less unreimbursed Advances, Servicing Advances and other
amounts due to a Servicer and the Trustee with respect to such Mortgage Loans,
to the extent allocable to principal) and the principal portion of Payaheads
previously received and intended for application in the related Collection
Period, (2) all Principal Prepayments on the Mortgage Loans received during
the related Prepayment Period, (3) the outstanding principal balance of each
Mortgage Loan that was repurchased by the Seller or a Servicer during the
calendar month immediately preceding such Distribution Date, (4) the portion
of any Substitution Adjustment Amount paid with respect to any Deleted
Mortgage
32
Loans during the calendar month immediately preceding such Distribution Date
allocable to principal, (5) all Net Liquidation Proceeds and other recoveries
(net of unreimbursed Advances, Servicing Advances and other expenses, to the
extent allocable to principal) collected with respect to the Mortgage Loans
during the prior calendar month, to the extent allocable to principal, and (6)
with respect to the August 2002 Distribution Date, any amounts remaining in
the Prefunding Account (other than investment earnings thereon).
Private Certificates: As specified in the Preliminary Statement.
Prospectus Supplement: The Prospectus Supplement dated May 23, 2002
relating to the Offered Certificates.
PUD: Planned Unit Development.
Qualified Insurer: A mortgage guaranty insurance company duly qualified
as such under the laws of the state of its principal place of business and
each state having jurisdiction over such insurer in connection with the
insurance policy issued by such insurer, duly authorized and licensed in such
states to transact a mortgage guaranty insurance business in such states and
to write the insurance provided by the insurance policy issued by it, approved
as a FNMA- or FHLMC-approved mortgage insurer or having a claims paying
ability rating of at least "AA" or equivalent rating by a nationally
recognized statistical rating organization. Any replacement insurer with
respect to a Mortgage Loan must have at least as high a claims paying ability
rating as the insurer it replaces had on the Closing Date.
Qualified Substitute Mortgage Loan: A Mortgage Loan substituted by the
Seller for a Deleted Mortgage Loan which must, on the date of such
substitution, as confirmed in a Request for Release, substantially in the form
of Exhibit M (i) have a Stated Principal Balance, after deduction of the
principal portion of the Scheduled Payment due in the month of substitution
(or, in the case of a substitution of more than one mortgage loan for a
Deleted Mortgage Loan, an aggregate Stated Principal Balance), not in excess
of, and not more than 10% less than the Stated Principal Balance of the
Deleted Mortgage Loan; (ii) be accruing interest at a rate no lower than and
not more than 1% per annum higher than, that of the Deleted Mortgage Loan;
(iii) have a Loan-to-Value Ratio no higher than that of the Deleted Mortgage
Loan; (iv) have a remaining term to maturity no greater than (and not more
than one year less than that of) the Deleted Mortgage Loan; (v) if the Deleted
Mortgage Loan is an adjustable-rate Mortgage Loan have a Maximum Mortgage Rate
and Minimum Mortgage Rate not less than the respective rates for the Deleted
Mortgage Loan, have a Gross Margin equal to or greater than the Deleted
Mortgage Loan and have the same Index as the Deleted Mortgage Loan and (vi)
comply with each representation and warranty set forth in Section 2.03(b).
Rating Agency: Each of the Rating Agencies specified in the Preliminary
Statement. If any such organization or a successor is no longer in existence,
"Rating Agency" shall be such nationally recognized statistical rating
organization, or other comparable Person, as is designated by the Depositor,
notice of which designation shall be given to the Trustee and the Servicer.
References herein to a given rating or rating category of a Rating Agency
shall mean such rating category without giving effect to any modifiers.
33
Ratings: As of any date of determination, the ratings, if any, of the
Certificates as assigned by the Rating Agencies.
Realized Loss: With respect to each Liquidation Mortgage Loan, an amount
(not less than zero or more than the Stated Principal Balance of the Mortgage
Loan) as of the date of such liquidation, equal to (i) the Stated Principal
Balance of the Liquidation Mortgage Loan as of the date of such liquidation,
plus (ii) interest at the Net Mortgage Rate from the related Due Date as to
which interest was last paid or advanced (and not reimbursed) to
Certificateholders up to the related Due Date in the month in which
Liquidation Proceeds are required to be distributed on the Stated Principal
Balance of such Liquidation Mortgage Loan from time to time, minus (iii) the
Net Liquidation Proceeds, if any, received during the month in which such
liquidation occurred, to the extent applied as recoveries of interest at the
Net Mortgage Rate and to principal of the Liquidation Mortgage Loan.
Realized Loss Percentage: For the purposes of the Fairbanks Termination
Test and with respect to the Fairbanks Serviced Loans and any Distribution
Date, the percentage produced by the following calculation: (i) the aggregate
amount of cumulative Realized Losses incurred on the related Mortgage Loans
from the Initial Cut-off Date through the last day of the related Due Date,
minus (ii) any amount received with respect to Realized Losses on the related
Mortgage Loans subsequent to a Final Recovery Determination being made with
respect to such Mortgage Loans, divided by (iii) the aggregate Cut-off Date
Principal Balance of the related Mortgage Loans.
Record Date: With respect to any Class of Physical Certificates and any
Distribution Date, the last day of the calendar month preceding the month in
which such Distribution Date occurs. With respect to any Class of Certificates
that is not a Physical Certificate and any Distribution Date, the Business Day
immediately preceding such Distribution Date; provided, however, that
following the date on which Definitive Certificates for such Certificates are
available pursuant to Section 5.02, the Record Date shall be the last day of
the calendar month preceding the month in which such Distribution Date occurs.
Reference Bank Rate: As to any Accrual Period relating to the LIBOR
Certificates as follows: the arithmetic mean (rounded upwards, if necessary,
to the nearest one sixteenth of a percent) of the offered rates for United
States dollar deposits for one month which are offered by the Reference Banks
as of 11:00 a.m., London time, on the Interest Determination Date prior to the
first day of such Accrual Period to prime banks in the London interbank market
for a period of one month in amounts approximately equal to the aggregate
Class Principal Balance of the LIBOR Certificates; provided that at least two
such Reference Banks provide such rate. If fewer than two offered rates
appear, the Reference Bank Rate will be the arithmetic mean of the rates
quoted by one or more major banks in New York City, selected by Olympus , as
of 11:00 a.m., New York City time, on such date for loans in U.S. Dollars to
leading European banks for a period of one month in amounts approximately
equal to the aggregate Class Principal Balance of the LIBOR Certificates. If
no such quotations can be obtained, the Reference Bank Rate shall be the
Reference Bank Rate applicable to the preceding Accrual Period.
Reference Banks: Three major banks that are engaged in the London
interbank market, selected by Olympus , as identified in writing to the
Trustee.
34
Regular Certificates: As specified in the Preliminary Statement.
Reimbursement Amounts: As defined in Section 3.22(a) herein.
Relief Act: The Soldiers' and Sailors' Civil Relief Act of 1940, as
amended.
REMIC: A "real estate mortgage investment conduit" within the meaning of
Section 860D of the Code.
REMIC Provisions: Provisions of the federal income tax law relating to
real estate mortgage investment conduits, which appear at sections 860A
through 860G of Subchapter M of Chapter 1 of the Code, and related provisions,
and regulations promulgated thereunder, as the foregoing may be in effect from
time to time.
REO Property: A Mortgaged Property acquired by the Trust Fund through
foreclosure or deed-in-lieu of foreclosure in connection with a defaulted
Mortgage Loan.
Repurchase Price: With respect to any Mortgage Loan required to be
purchased by the Seller pursuant to this Agreement or purchased at the option
of the Special Servicer pursuant to Section 3.12(g) of this Agreement, an
amount equal to the sum of (i) 100% of the unpaid principal balance of the
Mortgage Loan on the date of such purchase, (ii) accrued and unpaid interest
thereon at the applicable Mortgage Rate (reduced by the Servicing Fee Rate if
the purchaser of the Mortgage Loan is also the Servicer thereof) from the date
through which interest was last paid by the Mortgagor to the Due Date in the
month in which the Repurchase Price is to be distributed to Certificateholders
and (iii) in the case of a Mortgage Loan purchased by the Seller, any
unreimbursed Servicing Advances.
Request for Release: The Request for Release submitted by a Servicer to
the applicable Custodian substantially in the form of Exhibit M.
Required Basis Risk Reserve Fund Amount: With respect to any Distribution
Date on which the Net Excess Spread is less than 0.25%, the lesser of (a)
$15,000 and (b) the product of 0.50% and the Aggregate Collateral Balance.
With respect to any Distribution Date on which the Net Excess Spread is equal
to or greater than 0.25%, $5,000.
Required Basis Risk Reserve Fund Deposit: With respect to any
Distribution Date, the excess, if any, of the Required Basis Risk Reserve Fund
Amount for such Distribution Date over the amount on deposit in the Basis Risk
Reserve Fund at the close of business on the Business Day immediately
preceding such Distribution Date.
Required Insurance Policy: With respect to any Mortgage Loan, any
insurance policy that is required to be maintained from time to time under
this Agreement.
Residual Certificates: As specified in the Preliminary Statement.
Responsible Officer: When used with respect to the Trustee, any Vice
President, any Assistant Vice President, any Assistant Secretary, any Trust
Officer or any other officer or employee of the Trustee customarily performing
functions similar to those performed by any of
35
the above designated officers and also to whom, with respect to a particular
matter, such matter is referred because of such officer's or employee's
knowledge of and familiarity with the particular subject and in each case who
shall have direct responsibility for the administration of this Agreement.
Rolling Three Month Delinquency Rate: For any Distribution Date will be the
fraction, expressed as a percentage, equal to the average of the related
Delinquency Rates for each of the three (or one and two, in the case of the
first and second Distribution Dates) immediately preceding months.
S&P: Standard & Poor's Ratings Services, a division of The XxXxxx-Xxxx
Companies, Inc. For purposes of Section 10.05(c) the address for notices to S&P
shall be Standard & Poor's, 00 Xxxxx Xxxxxx, 00xx Xxxxx, Xxx Xxxx, Xxx Xxxx
00000, Attention: Mortgage Surveillance Monitoring, or such other address as S&P
may hereafter furnish to the Depositor, the Servicer and the Trustee.
SAIF: The Savings Association Insurance Fund, or any successor thereto.
Scheduled Payment: The scheduled monthly payment on a Mortgage Loan due on any
Due Date allocable to principal and/or interest on such Mortgage Loan pursuant
to the terms of the related Mortgage Note.
Securities Act: The Securities Act of 1933, as amended.
Seller: DLJMC.
Senior Certificates: As specified in the Preliminary Statement.
Senior Enhancement Percentage: For any Distribution Date, the fraction,
expressed as a percentage, the numerator of which is the sum of the aggregate
Class Principal Balance of the Subordinate Certificates and the
Overcollateralization Amount (which, for purposes of this definition only,
shall not be less than zero), in each case prior to giving effect to payments
on such Distribution Date (assuming no Trigger Event has occurred), and the
denominator of which is the Aggregate Collateral Balance as of the first day
of the related Collection Period.
Senior Principal Payment Amount: For any Distribution Date on or after
the Stepdown Date and as long as a Trigger Event has not occurred with respect
to such Distribution Date, will be the amount, if any, by which (x) the Class
Principal Balance of the Senior Certificates immediately prior to such
Distribution Date exceeds (y) the lesser of (A) the product of (i) 65.00% and
(ii) the Aggregate Collateral Balance for such Distribution Date and (B) the
amount, if any, by which (i) the Aggregate Collateral Balance for such
Distribution Date exceeds (ii) 0.50% of the Aggregate Collateral Balance as of
the Initial Cut-off Date (including amounts in the Prefunding Account as of
the Closing Date).
Servicer: Olympus or Fairbanks, or its successors in interest, as
applicable.
Servicer Employee: As defined in Section 3.19 herein.
36
Servicer Evaluation Trigger Date: With respect to Fairbanks and the
Fairbanks Serviced Loans, any date on which subsection (b) of the related
Fairbanks Termination Test occurs.
Servicer Remittance Date: With respect to any Mortgage Loan and
Distribution Date, the second Business Day prior to that Distribution Date.
Servicer Termination Test: With respect to the Mortgage Loans serviced by
Olympus, and each Determination Date, the Servicer Termination Test will be
failed if the Total Expected Losses for such Olympus Serviced Loans exceeds
the applicable percentages set forth below with respect to such Determination
Date:
Determination Date Occurring In Total Expected Losses
------------------------------- ---------------------
June 2002 - May 2007 10.75%
June 2007 and thereafter 16.25%
Servicing Advance: All reasonable and customary "out of pocket" costs and
expenses incurred in the performance by a Servicer of its servicing
obligations, including, but not limited to, the cost (including reasonable
attorneys' fees and disbursements) of (i) the preservation, restoration and
protection of a Mortgaged Property, (ii) any enforcement or judicial
proceedings, including foreclosures and any litigation related to a Mortgage
Loan, (iii) the management and liquidation of any REO Property including
reasonable fees paid to any independent contractor in connection therewith,
(iv) compliance with the obligations under Section 3.10 or 3.12 and (v) in
connection with the liquidation of a Mortgage Loan, expenditures relating to
the purchase or maintenance of a first lien Mortgage Loan, all of which
reasonable and customary out-of-pocket costs and expenses are reimbursable to
a Servicer to the extent provided in Sections 3.07(d)(ii) and 3.09(a)(ii),
(iii), (iv) and (vi).
Servicing Advance Reimbursement Amounts: As defined in Section 3.22(a)
herein.
Servicing Fee: As to each Mortgage Loan and any Distribution Date, an
amount equal to one month's interest at the Servicing Fee Rate on the Stated
Principal Balance of such Mortgage Loan as of the Due Date in the month of
such Distribution Date (prior to giving effect to any Scheduled Payments due
on such Mortgage Loan on such Due Date), subject to reduction as provided in
Section 3.15.
Servicing Fee Rate: With respect to any Mortgage Loan, 0.50% per annum.
Servicing File: With respect to each Fairbanks Serviced Loan, the
Servicing File for such Mortgage Loan consisting of the following documents to
the extent available:
(i) Copy of the Mortgage File.
(ii) Residential loan application.
37
(iii) Mortgage Loan closing statement.
(iv) Verification of employment and income, if applicable.
(v) Verification of acceptable evidence of source and amount of
downpayment.
(vi) Credit report on Mortgagor.
(vii) Residential appraisal report.
(viii) Photograph of the Mortgaged Property.
(ix) Survey of the Mortgaged Property.
(x) Copy of each instrument necessary to complete identification of
any exception set forth in the exception schedule in the title policy,
i.e., map or plat, restrictions, easements, sewer agreements, home
association declarations, etc.
(xi) All required disclosure statements.
(xii) If required in an appraisal, termite report, structural
engineer's report, water potability and septic certification.
(xiii) Sales Contract, if applicable.
Servicing Officer: With respect to a Servicer, any officer of that
Servicer involved in, or responsible for, the administration and servicing of
the related Mortgage Loans whose name and specimen signature appear on a list
of servicing officers furnished to the Trustee by such Servicer on the Closing
Date pursuant to this Agreement, as such list may from time to time be amended
and delivered to the Trustee.
Simple Interest Excess: As of any Distribution Date for each Simple
Interest Qualifying Loan, the excess, if any, of (i) the portion of the
monthly payment received from the Mortgagor for such Mortgage Loan allocable
to interest with respect to the related Collection Period, over (ii) 30 days'
interest on the Stated Principal Balance of such Mortgage Loan at the Mortgage
Rate.
Simple Interest Excess Sub-Account: The sub-account of the Collection
Account established by Olympus, as Servicer, pursuant to Section 3.07(f). The
Simple Interest Excess Sub-Account shall be an Eligible Account.
Simple Interest Mortgage Loan: Any Mortgage Loan for which the interest
due thereon is calculated based on the actual number of days elapsed between
the date on which interest was last paid through the date on which the most
current payment is received.
Simple Interest Qualifying Loan: As of any Determination Date, any Simple
Interest Mortgage Loan that was neither prepaid in full during the related
Collection Period, nor
38
delinquent with respect to a payment that became due during the related
Collection Period as of the close of business on the Determination Date
following such Collection Period.
Simple Interest Shortfall: As of any Distribution Date for each Simple
Interest Qualifying Loan, the excess, if any, of (i) 30 days' interest on the
Stated Principal Balance of all such Mortgage Loans at the Mortgage Rate, over
(ii) the portion of the monthly payment received from the Mortgagor for such
Mortgage Loan allocable to interest with respect to the related Collection
Period.
Special Servicer: Olympus Servicing, L.P. or any successor in interest.
Special Serviced Mortgage Loans: Mortgage Loans for which the Special
Servicer acts as Servicer pursuant to Section 3.03.
Startup Day: The Closing Date.
Stated Principal Balance: As to any Mortgage Loan and Due Date, the
unpaid principal balance of such Mortgage Loan as of such Due Date as
specified in the amortization schedule at the time relating thereto (before
any adjustment to such amortization schedule by reason of any moratorium or
similar waiver or grace period) after giving effect to any previous
Curtailments and Liquidation Proceeds allocable to principal (other than with
respect to any Liquidation Mortgage Loan) and to the payment of principal due
on such Due Date and irrespective of any delinquency in payment by the related
Mortgagor.
Stepdown Date: The date occurring on the later of (x) the Distribution
Date in June 2005 and (y) the first Distribution Date on which the Senior
Enhancement Percentage (calculated for this purpose after giving effect to
payments or other recoveries in respect of the Mortgage Loans during the
related Collection Period but before giving effect to payments on the
Certificates on such Distribution Date) is greater than or equal to 35.00%.
Subordinate Certificates: As specified in the Preliminary Statement.
Subordinate Group 1 Balance: For any Distribution Date will be the
aggregate of the Stated Principal Balances of the Group 1 Mortgage Loans as of
the last day of the related Collection Period less the Class Principal Balance
of the Class A-1 Certificates.
Subordinate Group 2 Balance: For any Distribution Date will be the
aggregate of the Stated Principal Balances of the Group 2 Mortgage Loans as of
the last day of the related Collection Period less the aggregate Class
Principal Balances of the Class A-2, Class A-3, Class A-4 and Class R
Certificates.
Subordinate Net Funds Cap: For any Distribution Date and the Class M-1,
Class M-2, Class B-1 and Class B-2 Certificates, will be a per annum rate
equal to a weighted average of (i) the Class A-1 Net Funds Cap and (ii) the
Class A Group 2 Net Funds Cap for such Distribution Date, weighted on the
basis of the Subordinate Group 1 Balance and Subordinate Group 2 Balance.
39
Subsequent Cut-off Date: With respect to any Subsequent Mortgage Loan,
the date on which such Mortgage Loan is transferred to the Trust.
Subsequent Mortgage Loan: Any Mortgage Loan other than an Initial
Mortgage Loan conveyed to the Trust Fund pursuant to Section 2.01 hereof and
to a Subsequent Transfer Agreement, which Mortgage Loan shall be listed on the
revised Mortgage Loan Schedule delivered pursuant to this Agreement and on
Schedule A to such Subsequent Transfer Agreement. When used with respect to a
single Subsequent Transfer Date, Subsequent Mortgage Loan shall mean a
Subsequent Mortgage Loan conveyed to the Trust on that Subsequent Transfer
Date.
Subsequent Transfer Agreement: A Subsequent Transfer Agreement
substantially in the form of Exhibit Q hereto, executed and delivered by the
Depositor, DLJMC, the Servicers and the Trustee as provided in Section 2.01
hereof.
Subsequent Transfer Date: For any Subsequent Transfer Agreement, the date
the related Subsequent Mortgage Loans are transferred to the Trust pursuant to
the related Subsequent Transfer Agreement.
Subservicer: Any Subservicer which is subservicing any of the Mortgage
Loans pursuant to a Subservicing Agreement. Any subservicer shall meet the
qualifications set forth in Section 3.02.
Subservicing Agreement: An agreement between a Servicer and a Subservicer
for the servicing of the related Mortgage Loans.
Subsidiary REMIC: As specified in the Preliminary Statement.
Substitution Adjustment Amount: As defined in Section 2.03 herein.
Targeted Overcollateralization Amount: For any Distribution Date prior to
the Stepdown Date, 2.50% of the Aggregate Collateral Balance as of the Initial
Cut-off Date, less the Class Principal Balance of the Class B-2 Certificates
(before giving effect to principal distributions on that Distribution Date);
with respect to any Distribution Date on or after the Stepdown Date and with
respect to which a Trigger Event has not occurred, the greater of (a) 5.00% of
the Aggregate Collateral Balance for such Distribution Date, less the Class
Principal Balance of the Class B-2 Certificates (before giving effect to
principal distributions on that Distribution Date), or (b) 0.50% of the
Aggregate Collateral Balance as of the Initial Cut-off Date; with respect to
any Distribution Date on or after the Stepdown Date with respect to which a
Trigger Event has occurred and is continuing, the Targeted
Overcollateralization Amount for the Distribution Date immediately preceding
such Distribution Date.
Telerate Page 3750: The display designated as page 3750 on Bridge
Telerate Service (or such other page as may replace page 3750 on that service
for the purpose of displaying London interbank offered rates of major banks).
Total Expected Losses: With respect to the Olympus Serviced Loans and any
Determination Date, the fraction, the numerator of which is the sum of (i) the
Stated Principal
40
Balance of such Mortgage Loans 30-59 days Delinquent multiplied by 0.1075,
(ii) the Stated Principal Balance of Mortgage Loans 60-89 days Delinquent
multiplied by 0.2150, (iii) the Stated Principal Balance of Mortgage Loans 90
or more days Delinquent multiplied by 0.4300 and (iv) the Stated Principal
Balance of Mortgage Loans in foreclosure and REO property multiplied by
0.4300, and the denominator of which is the aggregate Cut-off Date Principal
Balance of such Olympus Serviced Loans (including any Subsequent Mortgage
Loans).
Transfer: Any direct or indirect transfer or sale of any Ownership
Interest in a Residual Certificate.
Transferee: Any Person who is acquiring by Transfer any Ownership
Interest in a Residual Certificate.
Trigger Event: A Trigger Event will occur for any Distribution Date if
the Rolling Three Month Delinquency Rate as of the last day of the related
Collection Period equals or exceeds 43.00% of the Senior Enhancement
Percentage for such Distribution Date.
Trust: CSFB ABS Trust Series 2002-HE16 established pursuant to this
Agreement.
Trust Fund: The corpus of the trust created hereunder consisting of (i)
the Mortgage Loans and all interest and principal received on or with respect
thereto after their Cut-off Dates, other than such amounts which were due on
the Mortgage Loans on or before their Cut-off Dates; (ii) the Collection
Accounts (including any Simple-Interest Excess Sub-Account), the Certificate
Account, the Prefunding Account, Capitalized Interest Account and the Basis
Risk Reserve Fund and all amounts deposited therein pursuant to the applicable
provisions of this Agreement; (iii) property which secured a Mortgage Loan and
which has been acquired by foreclosure or deed in lieu of foreclosure after
the applicable Cut-off Date; (iv) the Depositor's rights under the Assignment
and Assumption Agreement; (v) the FSA Policy, and (vi) all proceeds of the
conversion, voluntary or involuntary, of any of the foregoing.
Trustee: U.S. Bank National Association, in its capacity as trustee under
this agreement and assigns in such capacity.
Trustee Fee: The fee payable to the Trustee on each Distribution Date for
its services as Trustee hereunder, in an amount equal to one-twelfth of the
Trustee Fee Rate multiplied by the Stated Principal Balance of the Mortgage
Loans immediately prior to such Distribution Date.
Trustee Fee Rate: 0.003% per annum.
Underwriters' Exemption: Prohibited Transaction Exemption 2000-58, 65
Fed. Reg. 67765 (2000), as amended (or any successor thereto), or any
substantially similar administrative exemption granted by the U.S. Department
of Labor.
Voting Rights: The portion of the voting rights of all the Certificates
that is allocated to any Certificate for purposes of the voting provisions of
this Agreement. At all times during the term of this Agreement, 98% of all
Voting Rights shall be allocated among the Class X-0, Xxxxx X-0, Class X-0,
Xxxxx X-0, Class M-1, Class M-2, Class B-1 and Class B-2 Certificates. The
portion of such 98% Voting Interests allocated to the Class A-1, Class A-2,
Class A-3, Class X-
00
0, Class M-1, Class M-2, Class B-1 and Class B-2 Certificates shall be based
on the fraction, expressed as a percentage, the numerator of which is the
aggregate Class Principal Balance then outstanding and the denominator of
which is the Class Principal Balance of all such Classes then outstanding. The
Class A-IO and the Class X Certificates shall each be allocated 1% of the
Voting Rights. Voting Rights shall be allocated among the Certificates within
each such Class in accordance with their respective Percentage Interests. The
Class R shall have no voting rights.
SECTION 1.02 Interest Calculations.
---------------------
Interest on the LIBOR Certificates shall be calculated on the basis of a
360-day year and the actual number of days elapsed. The calculation of all
fees and interest on the Class A-IO Certificates and the Class X Certificate
shall be made on the basis of a 360-day year consisting of twelve 30-day
months. All dollar amounts calculated hereunder shall be rounded to the
nearest xxxxx with one-half of one xxxxx being rounded down.
42
ARTICLE II
CONVEYANCE OF MORTGAGE LOANS;
REPRESENTATIONS AND WARRANTIES
SECTION 2.01 Conveyance of Mortgage Loans.
----------------------------
(a) The Depositor, concurrently with the execution and delivery hereof,
hereby sells, transfers, assigns, sets over and otherwise conveys to the
Trustee in trust for the benefit of the Certificateholders, without recourse,
all the right, title and interest of the Depositor in and to (i) subject to
Section 6.04(b), each Initial Mortgage Loan, including all interest and
principal received or receivable on or with respect to such Initial Mortgage
Loans after the Initial Cut-off Date and all interest and principal payments
on the Initial Mortgage Loans received prior to the Initial Cut-off Date in
respect of installments of interest and principal due thereafter, but not
including payments of principal and interest due and payable on the Initial
Mortgage Loans on or before the Initial Cut-off Date; (ii) any insurance
policies in respect of the Initial Mortgage Loans; (iii) the Depositor's
rights under the Assignment and Assumption Agreement, (iv) any such amounts as
may be deposited into and held by the Trustee in the Prefunding Account and
Capitalized Interest Account and (v) all proceeds of any of the foregoing. In
addition, on or prior to the Closing Date, the Depositor shall cause FSA to
deliver the FSA Policy to the Trustee.
(b) In connection with the transfer and assignment set forth in clause
(a) above, the Depositor has delivered or caused to be delivered to the
applicable Custodian for the benefit of the Certificateholders, the documents
and instruments with respect to each Mortgage Loan as assigned:
(i) the electronic Mortgage Loan Schedule;
(ii) (A) the original Mortgage Note bearing all intervening
endorsements and including any riders to the Mortgage Note, endorsed "Pay
to the order of __________, without recourse" and signed in the name of
the last named endorsee by an authorized officer, or
(B) with respect to any Lost Mortgage Note, a lost note
affidavit stating that the original Mortgage Note was lost or
destroyed, together with a copy of such Mortgage Note;
(iii) the original of any guarantee executed in connection with the
Mortgage Note (if any);
(iv) the original Mortgage, with evidence of recording thereon, or
copies certified by the related recording office or if the original
Mortgage has not yet been returned from the recording office, a copy
certified by or on behalf of the Seller indicating that such Mortgage has
been delivered for recording. The return directions for the original
Mortgage should indicate, when recorded, mail to the Seller;
(v) the originals of all assumption, modification, consolidation or
extension agreements (or, if an original of any of these documents has
not been returned from the
43
recording office, a copy thereof certified by or on behalf of the Seller,
the original to be delivered to the Seller forthwith after return from
such recording office) with evidence of recording thereon, if any;
(vi) the original Assignment of Mortgage as appropriate, in
recordable form, for the Mortgage Loan assigned in blank;
(vii) the originals of all intervening Assignments of Mortgage,
showing a complete chain of assignment from the originator of such
Mortgage Loan to the Person assigning the Mortgage to the Trustee,
including warehousing assignments, with evidence of recording on each
such Assignment of Mortgage (or, if an original intervening Assignment of
Mortgage has not been returned from the recording office, a copy thereof
certified by or on behalf of the Seller, the original to be delivered to
the Trustee forthwith after return from such recording office); and
(viii) the original mortgage title insurance policy, or if the
policy has not yet been issued, an original or copy of a marked-up
written commitment or a pro forma title insurance policy marked as
binding and countersigned by the title insurance company or its
authorized agent either on its face or by an acknowledged closing
instruction or escrow letter.
If the Seller delivers certified copies of any document or instrument set
forth in Section 2.01(b) to the applicable Custodian because of a delay caused
by the public recording office in returning any recorded document, the Seller
shall deliver to the applicable Custodian, within 60 days of the Closing Date,
an Officer's Certificate which shall (i) identify the recorded document, (ii)
state that the recorded document has not been delivered to the applicable
Custodian due solely to a delay caused by the public recording office, and
(iii) state the amount of time generally required by the applicable recording
office to record and return a document submitted for recordation.
In the event that in connection with any Mortgage Loan the Depositor
cannot deliver (a) the original recorded Mortgage, (b) all interim recorded
assignments or (c) the lender's title policy (together with all riders
thereto) satisfying the requirements set forth above, concurrently with the
execution and delivery hereof because such document or documents have not been
returned from the applicable public recording office in the case of clause (a)
or (b) above, or because the title policy has not been delivered to the Seller
or the Depositor by the applicable title insurer in the case of clause (c)
above, the Depositor shall promptly deliver to the applicable Custodian, in
the case of clause (a) or (b) above, such original Mortgage or such interim
assignment, as the case may be, with evidence of recording indicated thereon
upon receipt thereof from the public recording office, or a copy thereof,
certified, if appropriate, by the relevant recording office and in the case of
(c) above, such original title policy (together with all riders thereto), upon
receipt from the applicable title insurer.
As promptly as practicable subsequent to such transfer and assignment and
delivery to it of each Assignment of Mortgage pursuant to clause (vi) above,
and in any event, within thirty (30) days thereafter, the Trustee shall (at
the Seller's expense) (i) affix the Trustee's name to each Assignment of
Mortgage, as the assignee thereof, (ii) cause such Assignment of Mortgage
44
to be completed in proper form for recording in the appropriate public office
for real property records within thirty (30) days after receipt thereof and
(iii) cause to be delivered for recording in the appropriate public office for
real property records the Assignments of Mortgages to the Trustee, except
that, with respect to any Assignment of Mortgage as to which the Trustee has
not received the information required to prepare such Assignment of Mortgage
in recordable form, the Trustee's obligation to do so and to deliver the same
for such recording shall be as soon as practicable after receipt of such
information and in any event within thirty (30) days after the receipt
thereof, and the Trustee need not cause to be recorded any Assignment of
Mortgage referred to in clause (vi) above which relates to a Mortgage Loan in
any jurisdiction under the laws of which, as evidenced by an Opinion of
Counsel delivered by the Seller (at the Seller's expense) to the Trustee
within twenty (20) days of the Closing Date, acceptable to the Rating
Agencies, the recordation of such Assignment of Mortgage is not necessary to
protect the Trustee's and the Certificateholders' interest in the related
Mortgage Loan.
(c) The Depositor hereby sells, transfers, assigns, sets over and
otherwise conveys to the Trustee in trust for the benefit of the
Certificateholders, without recourse, all right, title and interest in such
Subsequent Mortgage Loans, including all interest and principal due on or with
respect to such Subsequent Mortgage Loans on or after the related Subsequent
Cut-off Date and all interest and principal payments on such Subsequent
Mortgage Loans received prior to the Subsequent Cut-off Date in respect of
installments of interest and principal due thereafter, but not including
principal and interest due on such Subsequent Mortgage Loans prior to the
related Subsequent Cut-off Date, any insurance policies in respect of such
Subsequent Mortgage Loans and all proceeds of any of the foregoing.
(d) Upon one Business Day's prior written notice to the Trustee, the
Servicers and the Rating Agencies, on any Business Day during the Prefunding
Period designated by the Depositor, the Depositor, the applicable Servicers
and the Trustee shall complete, execute and deliver a Subsequent Transfer
Agreement so long as no Rating Agency has provided notice that the execution
and delivery of such Subsequent Transfer Agreement will result in a reduction
or withdrawal of the ratings assigned to the Certificates (without regard to
the FSA Policy).
The transfer of Subsequent Mortgage Loans and the other property and
rights relating to them on a Subsequent Transfer Date is subject to the
satisfaction of each of the following conditions:
(i) each Subsequent Mortgage Loan conveyed on such Subsequent
Transfer Date satisfies the representations and warranties applicable to
it under this Agreement as of the applicable Subsequent Transfer Date;
provided, however, that with respect to a breach of a representation and
warranty with respect to a Subsequent Mortgage Loan, the obligation under
Section 2.03(d) of this Agreement of the Seller to cure, repurchase or
replace such Subsequent Mortgage Loan shall constitute the sole remedy
against the Seller respecting such breach available to
Certificateholders, the Depositor or the Trustee;
(ii) the Trustee and the Rating Agencies are provided with an
Opinion of Counsel or Opinions of Counsel, at the expense of the
Depositor, with respect to the qualification of the Trust Fund as a
REMIC, to be delivered as provided pursuant to Section 2.01(e);
45
(iii) the Rating Agencies and the Trustee are provided with an
Opinion of Counsel or Opinions of Counsel, at the expense of the
Depositor, with respect to the characterization of the transfer of the
Subsequent Mortgage Loans conveyed on such Subsequent Transfer Date as a
sale, to be delivered as provided pursuant to Section 2.01(e); and
(iv) the execution and delivery of such Subsequent Transfer
Agreement or conveyance of the related Subsequent Mortgage Loans does not
result in a reduction or withdrawal of any ratings assigned to the
Certificates by the Rating Agencies (without regard to the FSA Policy);
(v) no Subsequent Mortgage Loan conveyed on such Subsequent Transfer
Date was 30 or more days contractually delinquent as of such date;
(vi) the remaining term to stated maturity of such Subsequent
Mortgage Loan will not exceed 30 years for fully amortizing loans or 15
years for balloon loans;
(vii) the Depositor shall have deposited in the Collection Account
all principal and interest collected with respect to the related
Subsequent Mortgage Loans on or after the related Subsequent Cut-off
Date;
(viii) such Subsequent Mortgage Loan will not have a Loan-to-Value
Ratio greater than 100.0%;
(ix) such Subsequent Mortgage Loan will have a principal balance not
greater than $750,000;
(x) no Subsequent Mortgage Loan shall have a maturity date after
August 2032;
(xi) such Subsequent Mortgage Loan will be secured by a first lien
on the related Mortgaged Property;
(xii) such Subsequent Mortgage Loan will be otherwise acceptable to
the Rating Agencies;
(xiii) following the conveyance of the Subsequent Mortgage Loans on
such Subsequent Transfer Date the characteristics of the Mortgage Loans
in Loan Group 1 will be as follows:
(A) weighted average Mortgage Rate of at least 8.60% per annum;
(B) a weighted average remaining term to stated maturity of
less than 357 months;
(C) a weighted average Loan-to-Value Ratio of not more than
80.5%;
(D) a weighted average credit score of not less than 600;
46
(E) no more than 7.5% of such Mortgage Loans by aggregate
Cut-off Date Principal Balance of Loan Group 1 will be balloon
loans;
(F) no more than 45.0% of such Mortgage Loans by aggregate
Cut-off Date Principal Balance of Loan Group 1 will be concentrated
in one state; and
(G) no more than 10.5% of such Mortgage Loans by aggregate
Cut-off Date Principal Balance of Loan Group 1 will relate to
non-owner occupied properties;
(xiv) following the conveyance of the Subsequent Mortgage Loans on
such Subsequent Transfer Date the characteristics of the Mortgage Loans
in Loan Group 2 will be as follows:
(A) weighted average Mortgage Rate of at least 8.60% per annum;
(B) a weighted average remaining term to stated maturity of
less than 357 months;
(C) a weighted average Loan-to-Value Ratio of not more than
81.5%;
(D) a weighted average credit score of not less than 600;
(E) no more than 7.5% of such Mortgage Loans by aggregate
Cut-off Date Principal Balance of Loan Group 2 will be balloon
loans;
(F) no more than 52.0% of such Mortgage Loans by aggregate
Cut-off Date Principal Balance of Loan Group 2 will be concentrated
in one state; and
(G) no more than 8.0% of such Mortgage Loans by aggregate
Cut-off Date Principal Balance of Loan Group 2 will relate to
non-owner occupied properties;
(xv) neither the applicable Seller nor the Depositor shall be
insolvent or shall be rendered insolvent as a result of such transfer;
(xvi) no Event of Default has occurred hereunder;
(xvii) the Depositor shall have delivered to the Trustee an
Officer's Certificate confirming the satisfaction of each of these
conditions precedent; and
(xviii) each Mortgage Loan constitutes a "qualified mortgage" within
the meaning of Section 860G(a)(3) of the Code.
(e) Upon (1) delivery to the Trustee by the Depositor of the Opinions of
Counsel referred to in Sections 2.01(d)(ii) and (iii), (2) delivery to the
Trustee by the Depositor of a revised Mortgage Loan Schedule reflecting the
Subsequent Mortgage Loans conveyed on such Subsequent Transfer Date and the
related Subsequent Mortgage Loans and (3) delivery to the Trustee by the
Depositor of an Officer's Certificate confirming the satisfaction of each of
the
47
conditions precedent set forth in Section 2.01(d), the Trustee shall remit to
the Depositor the Aggregate Subsequent Transfer Amount related to the
Subsequent Mortgage Loans transferred by the Depositor on such Subsequent
Transfer Date from funds in the Prefunding Account.
The Trustee shall not be required to investigate or otherwise verify
compliance with the conditions set forth in the preceding paragraph, except
for its own receipt of documents specified above, and shall be entitled to
rely on the required Officer's Certificate.
SECTION 2.02 Acceptance by the Trustee of the Mortgage Loans.
-----------------------------------------------
(a) The Trustee acknowledges receipt of the documents identified in the
Initial Certification in the form annexed hereto as Exhibit G and declares
that it holds and will hold or will cause its agent to hold such documents and
the other documents delivered to it constituting the Mortgage Files, and that
it holds or will hold or will cause its agent to hold such other assets as are
included in the Trust Fund, in trust for the exclusive use and benefit of all
present and future Certificateholders. The Trustee acknowledges that it or the
applicable Custodian will maintain possession of the Mortgage Notes in the
State of Texas, State of California, State of Illinois or State of Minnesota,
as directed by the Seller, unless otherwise permitted by the Rating Agencies.
The Trustee agrees to deliver as of 10:00 a.m. (New York time) on the
Closing Date to the Depositor, FSA and the Servicers an Initial Certification
from each Custodian in the form annexed hereto as Exhibit G. Based on its
review and examination, and only as to the documents identified in each such
Initial Certification, each Custodian acknowledges that such documents appear
regular on their face and relate to such Mortgage Loan. The Trustee shall be
under no duty or obligation to inspect, review or examine said documents,
instruments, certificates or other papers to determine that the same are
genuine, enforceable or appropriate for the represented purpose or that they
have actually been recorded in the real estate records or that they are other
than what they purport to be on their face.
Not later than 90 days after the Closing Date, the Trustee shall deliver
to the Depositor, the Seller, FSA and the Servicers a Final Certification in
the form annexed hereto as Exhibit H, with any applicable exceptions noted
thereon.
If, in the course of such review, the Trustee is notified by a Custodian
that any document constituting a part of a Mortgage File does not meet the
requirements of Section 2.01, the Trustee shall cause the applicable Custodian
to list such as an exception in the Final Certification; provided, however,
that the Trustee shall not make any determination as to whether (i) any
endorsement is sufficient to transfer all right, title and interest of the
party so endorsing, as noteholder or assignee thereof, in and to that Mortgage
Note or (ii) any assignment is in recordable form or is sufficient to effect
the assignment of and transfer to the assignee thereof under the mortgage to
which the assignment relates.
The Seller shall promptly correct or cure such defect within 90 days from
the date it is so notified of such defect and, if the Seller does not correct
or cure such defect within such period, the Seller shall either (i) substitute
for the related Mortgage Loan a Qualified Substitute Mortgage Loan, which
substitution shall be accomplished in the manner and subject to the
48
conditions set forth in Section 2.03, or (ii) purchase such Mortgage Loan from
the Trustee within 90 days from the date the Seller was notified of such
defect in writing at the Repurchase Price of such Mortgage Loan; provided,
however, that if the cure, substitution or repurchase of a Mortgage Loan
pursuant to this provision is required by reason of a delay in delivery of any
documents by the appropriate recording office, then the Seller shall be given
720 days from the Closing Date to cure such defect or substitute for, or
repurchase such Mortgage Loan; and further provided, that the Seller shall
have no liability for recording any Assignment of Mortgage in favor of the
Trustee or for the Trustee's failure to record such Assignment of Mortgage,
and the Seller shall not be obligated to repurchase or cure any Mortgage Loan
as to which such Assignment of Mortgage is not recorded. The Trustee shall
deliver written notice to each Rating Agency within 270 days from the Closing
Date indicating each Mortgage (a) which has not been returned by the
appropriate recording office or (b) as to which there is a dispute as to
location or status of such Mortgage. Such notice shall be delivered every 90
days thereafter until the related Mortgage is returned to the Trustee or
applicable Custodian. Any such substitution effected more than 90 days after
the Closing Date shall not be effected prior to the delivery to the Trustee of
the Opinion of Counsel required by Section 2.05 hereof and any substitution
shall not be effected prior to the additional delivery to the Trustee, or the
applicable Custodian on its behalf, of a Request for Release substantially in
the form of Exhibit M and the Mortgage File for any such Qualified Substitute
Mortgage Loan. The Repurchase Price for any such Mortgage Loan shall be
deposited by the Seller in the applicable Collection Account on or prior to
the Business Day immediately preceding the Distribution Date in the month
following the month of repurchase and, upon receipt of such deposit and
certification with respect thereto in the form of Exhibit M hereto, the
Trustee, or the applicable Custodian on its behalf, shall release the related
Mortgage File to the Seller and shall execute and deliver at such entity's
request such instruments of transfer or assignment prepared by such entity, in
each case without recourse, as shall be necessary to vest in such entity, or a
designee, the Trustee's interest in any Mortgage Loan released pursuant
hereto.
The Trustee agrees to cause each Custodian to execute and deliver prior
to 10:00 a.m. (New York time) on each Subsequent Transfer Date to the
Depositor, FSA and the Servicers a Subsequent Certification in the form
annexed hereto as Exhibit G. Based on its review and examination, and only as
to the documents identified in such Subsequent Certification, each Custodian
shall acknowledge that such documents appear regular on their face and relate
to such Subsequent Mortgage Loan. The Trustee shall be under no duty or
obligation to inspect, review or examine said documents, instruments,
certificates or other papers to determine that the same are genuine,
enforceable or appropriate for the represented purpose or that they have
actually been recorded in the real estate records or that they are other than
what they purport to be on their face.
Not later than 90 days after the end of the Prefunding Period, the
Trustee shall cause each Custodian to deliver to the Depositor, the Seller,
FSA and the Servicers a Final Certification with respect to the Subsequent
Mortgage Loans in the form annexed hereto as Exhibit H with any applicable
exceptions noted thereon.
If, in the course of such review of the Mortgage Files relating to the
Subsequent Mortgage Loans, a Custodian finds any document constituting a part
of a Mortgage File which does not meet the requirements of Section 2.01, the
Trustee shall cause such Custodian to list
49
such as an exception in the Final Certification; provided, however that the
Trustee shall not make any determination as to whether (i) any endorsement is
sufficient to transfer all right, title and interest of the party so
endorsing, as noteholder or assignee thereof, in and to that Mortgage Note or
(ii) any assignment is in recordable form or is sufficient to effect the
assignment of and transfer to the assignee thereof under the mortgage to which
the assignment relates. The Seller shall cure any such defect or repurchase or
substitute for any such Mortgage Loan in accordance with this Section 2.02(a).
(b) It is understood and agreed that the obligation of the Seller to
cure, substitute for or to repurchase any Mortgage Loan which does not meet
the requirements of Section 2.01 shall constitute the sole remedy respecting
such defect available to the Trustee, the Depositor and any Certificateholder
against the Seller.
(c) All of the Mortgage Files are being held pursuant to the Custodial
Agreements. Notwithstanding anything to the contrary contained herein, the
parties hereto acknowledge that the functions of the Trustee with respect to
the custody, acceptance, inspection and release of the Mortgage Files pursuant
to Sections 2.01, 2.02, 2.05, 3.12 shall be performed by the applicable
Custodian. At the expense of DLJMC, the Trustee, from time to time, shall
instruct or cause the instruction of each Custodian to deliver the Mortgage
Files to the Trustee for completion and recordation of the Assignments of
Mortgage.
SECTION 2.03 Representations and Warranties of the Seller and
------------------------------------------------------
Servicers.
---------
(a) Each of DLJMC, Olympus and Fairbanks in its capacity as Seller or
Servicer, as applicable, hereby makes on behalf of themselves the
representations and warranties set forth in Schedule IIA, Schedule IIB and
Schedule IIC hereto, respectively, and by this reference incorporated herein,
to the Depositor and the Trustee, as of the Closing Date, or if so specified
therein, as of the applicable Cut-off Date.
(b) DLJMC, in its capacity as Seller, hereby makes the representations
and warranties set forth in Schedule III to the Depositor and the Trustee, as
of the Closing Date, or the date specified therein, with respect to the
Initial Mortgage Loans identified on Schedule I hereto and as of the
Subsequent Transfer Date with respect to any Subsequent Mortgage Loan
identified on Schedule I hereto.
(c) [Reserved.]
(d) Upon discovery by any of the parties hereto of a breach of a
representation or warranty made pursuant to Section 2.03(b) that materially
and adversely affects the interests of the Certificateholders in any Mortgage
Loan, the party discovering such breach shall give prompt notice thereof to
the other parties. The Seller hereby covenants that within 90 days of the
earlier of its discovery or its receipt of written notice from any party of a
breach of any representation or warranty made by it pursuant to Section
2.03(b) which materially and adversely affects the value of the related
Mortgage Loan or the interests of the Certificateholders, it shall cure such
breach in all material respects, and if such breach is not so cured, shall,
(i) if such 90-day period expires prior to the second anniversary of the
Closing Date, remove such Mortgage Loan (a "Deleted Mortgage Loan") from the
Trust Fund and substitute in its place a Qualified Substitute Mortgage
50
Loan, in the manner and subject to the conditions set forth in this Section;
or (ii) repurchase the affected Mortgage Loan or Mortgage Loans from the
Trustee at the Repurchase Price in the manner set forth below; provided,
however, that any such substitution pursuant to (i) above shall not be
effected prior to the delivery to the Trustee of the Opinion of Counsel
required by Section 2.05 hereof, if any, and any such substitution pursuant to
(i) above shall not be effected prior to the additional delivery to the
Trustee of a Request for Release substantially in the form of Exhibit M and
the Mortgage File for any such Qualified Substitute Mortgage Loan. The Seller
shall promptly reimburse the related Servicer and the Trustee for any actual
out-of-pocket expenses reasonably incurred by the related Servicer or the
Trustee in respect of enforcing the remedies for such breach. With respect to
any representation and warranty described in this Section which are made to
the best of the Seller's knowledge, if it is discovered by either the
Depositor, the Seller or the Trustee that the substance of such representation
and warranty is inaccurate and such inaccuracy materially and adversely
affects the value of the related Mortgage Loan or the interests of the
Certificateholders therein, notwithstanding the Seller's lack of knowledge
with respect to the substance of such representation or warranty, such
inaccuracy shall be deemed a breach of the applicable representation or
warranty.
With respect to any Qualified Substitute Mortgage Loan or Loans, the
Seller shall deliver to the Trustee for the benefit of the Certificateholders
the Mortgage Note, the Mortgage, the related assignment of the Mortgage, and
such other documents and agreements as are required by Section 2.01(b), with
the Mortgage Note endorsed and the Mortgage assigned as required by Section
2.01. Scheduled Payments due with respect to Qualified Substitute Mortgage
Loans in the Collection Period related to the Distribution Date in the month
of substitution shall not be part of the Trust Fund and will be retained by
the Seller. For the month of substitution, distributions to Certificateholders
will include the Scheduled Payment due on any Deleted Mortgage Loan for the
related Collection Period and thereafter the Seller shall be entitled to
retain all amounts received in respect of such Deleted Mortgage Loan. The
Seller shall amend the related Mortgage Loan Schedule for the benefit of the
Certificateholders to reflect the removal of such Deleted Mortgage Loan and
the substitution of the Qualified Substitute Mortgage Loan or Loans and the
Seller shall deliver the amended Mortgage Loan Schedule to the Trustee, the
related Servicer and the Depositor. Upon such substitution, the Qualified
Substitute Mortgage Loan or Loans shall be subject to the terms of this
Agreement in all respects, and the Seller shall be deemed to have made with
respect to such Qualified Substitute Mortgage Loan or Loans, as of the date of
substitution, the representations and warranties made pursuant to Section
2.03(b) with respect to such Mortgage Loan. Upon any such substitution and the
deposit to the applicable Collection Account of the amount required to be
deposited therein in connection with such substitution as described in the
following paragraph, the Trustee shall or shall cause the applicable Custodian
to release the Mortgage File held for the benefit of the Certificateholders
relating to such Deleted Mortgage Loan to the Seller and shall execute and
deliver at the Seller's direction such instruments of transfer or assignment
prepared by the Seller, in each case without recourse, as shall be necessary
to vest title in the Seller, or its designee, the Trustee's interest in any
Deleted Mortgage Loan substituted for pursuant to this Section 2.03.
For any month in which the Seller substitutes one or more Qualified
Substitute Mortgage Loans for one or more Deleted Mortgage Loans, the related
Servicer will determine the amount (if any) by which the aggregate principal
balance of all such Qualified Substitute Mortgage Loans as of the date of
substitution is less than the aggregate Stated Principal Balance of all such
51
Deleted Mortgage Loans (after application of the scheduled principal portion
of the monthly payments due in the month of substitution). The amount of such
shortage (the "Substitution Adjustment Amount") plus an amount equal to the
aggregate of any unreimbursed Advances with respect to such Deleted Mortgage
Loans shall be deposited in the applicable Collection Account by the Seller on
or before the Business Day immediately preceding the related Servicer
Remittance Date in the month succeeding the calendar month during which the
related Mortgage Loan became required to be purchased or replaced hereunder.
In the event that the Seller shall have repurchased a Mortgage Loan, the
Repurchase Price therefor shall be deposited in the related Collection Account
pursuant to Section 3.06 on or before the Business Day immediately preceding
the related Servicer Remittance Date in the month following the month during
which the Seller became obligated hereunder to repurchase or replace such
Mortgage Loan and upon such deposit of the Repurchase Price and receipt of a
Request for Release in the form of Exhibit M hereto, the Trustee shall release
or cause the applicable Custodian to release the related Mortgage File held
for the benefit of the Certificateholders to such Person, and the Trustee
shall execute and deliver at such Person's direction such instruments of
transfer or assignment prepared by such Person, in each case without recourse,
as shall be necessary to transfer title from the Trustee. It is understood and
agreed that the obligation under this Agreement of any Person to cure,
repurchase or substitute any Mortgage Loan as to which a breach has occurred
and is continuing shall constitute the sole remedy against such Persons
respecting such breach available to Certificateholders, the Depositor or the
Trustee on their behalf.
The representations and warranties made pursuant to this Section 2.03
shall survive delivery of the respective Mortgage Files to the Trustee, or to
the applicable Custodian on the Trustee's behalf, for the benefit of the
Certificateholders.
SECTION 2.04 Representations and Warranties of the Depositor as to
------------------------------------------------------
the Mortgage Loans.
------------------
The Depositor hereby represents and warrants to the Trustee with respect
to each Mortgage Loan that, as of the Closing Date, assuming good title has
been conveyed to the Depositor, the Depositor had good title to the Mortgage
Loans and Mortgage Notes, and did not encumber the Mortgage Loans during its
period of ownership thereof, other than as contemplated by the Agreement.
It is understood and agreed that the representations and warranties set
forth in this Section 2.04 shall survive delivery of the Mortgage Files to the
Trustee, or to the applicable Custodian on the Trustee's behalf.
SECTION 2.05 Delivery of Opinion of Counsel in Connection with
------------------------------------------------------
Substitutions.
-------------
(a) Notwithstanding any contrary provision of this Agreement, no
substitution pursuant to Section 2.02 shall be made more than 90 days after
the Closing Date unless the Seller delivers to the Trustee an Opinion of
Counsel, which Opinion of Counsel shall not be at the expense of either the
Trustee or the Trust Fund, addressed to the Trustee, to the effect that such
substitution will not (i) result in the imposition of the tax on "prohibited
transactions" on the Trust Fund or
52
contributions after the Startup Date, as defined in Sections 860F(a)(2) and
860G(d) of the Code, respectively, or (ii) cause any REMIC hereunder to fail
to qualify as a REMIC at any time that any Certificates are outstanding.
(b) Upon discovery by the Depositor, the Seller, a Servicer, or the
Trustee that any Mortgage Loan does not constitute a "qualified mortgage"
within the meaning of Section 860G(a)(3) of the Code, the party discovering
such fact shall promptly (and in any event within five (5) Business Days of
discovery) give written notice thereof to the other parties. In connection
therewith, the Trustee shall require the Seller, at the Seller's option, to
either (i) substitute, if the conditions in Section 2.03(d) with respect to
substitutions are satisfied, a Qualified Substitute Mortgage Loan for the
affected Mortgage Loan, or (ii) repurchase the affected Mortgage Loan within
90 days of such discovery in the same manner as it would a Mortgage Loan for a
breach of representation or warranty made pursuant to Section 2.03. The
Trustee shall reconvey to the Seller the Mortgage Loan to be released pursuant
hereto in the same manner, and on the same terms and conditions, as it would a
Mortgage Loan repurchased for breach of a representation or warranty contained
in Section 2.03.
SECTION 2.06 Execution and Delivery of Certificates.
--------------------------------------
The Trustee acknowledges receipt by each Custodian on its behalf of the
documents identified in the Initial Certification in the form annexed hereto
as Exhibit G and the amounts required to be deposited into the Prefunding
Account, the Capitalized Interest Account and the Basis Risk Reserve Fund and,
concurrently with such receipt, has executed and delivered to or upon the
order of the Depositor, the Certificates in authorized denominations
evidencing directly or indirectly the entire ownership of the Trust Fund. The
Trustee agrees to hold the Trust Fund and exercise the rights referred to
above for the benefit of all present and future Holders of the Certificates
and to perform the duties set forth in this Agreement according to its terms.
SECTION 2.07 REMIC Matters.
-------------
The Preliminary Statement sets forth the designations and "latest
possible maturity date" for federal income tax purposes of all interests
created hereby. The "Startup Day" for purposes of the REMIC Provisions shall
be the Closing Date. The "tax matters person" with respect to each REMIC
hereunder shall be the holder of the Class R Certificate. The Trustee on
behalf of the holders of the Class R Certificates shall act as agent for the
"tax matters person". By its acceptance of a Class R Certificate, each holder
thereof shall have agreed to such appointment and shall have consented to the
appointment of the Trustee as its agent to act on behalf of each REMIC
pursuant to the specific duties outlined herein. Each REMIC's fiscal year
shall be the calendar year.
SECTION 2.08 Covenants of the Servicers.
--------------------------
Each Servicer hereby covenants to the Depositor and the Trustee for
itself only as follows:
(a) such Servicer shall comply in the performance of its obligations
under this Agreement in all material respects with all reasonable rules and
requirements of the insurer under each Primary Insurance Policy; and
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(b) no written information, certificate of an officer, statement
furnished in writing or written report delivered to the Depositor, any
affiliate of the Depositor or the Trustee and prepared by such Servicer
pursuant to this Agreement will contain any untrue statement of a material
fact.
SECTION 2.09 Conveyance of Subsidiary REMIC Regular Interests and
------------------------------------------------------
Intermediate REMIC Regular Interests and Acceptance of
------------------------------------------------------
Master REMIC, Respectively, by the Trustee; Issuance
------------------------------------------------------
of Certificates.
---------------
(a) The Depositor, concurrently with the execution and delivery hereof,
does hereby transfer, assign, set over and otherwise convey in trust to the
Trustee without recourse all the right, title and interest of the Depositor in
and to the Subsidiary REMIC Regular Interests and Intermediate REMIC Regular
Interests for the benefit of the holders of the Certificates. The Trustee
acknowledges receipt of the Subsidiary REMIC Regular Interests and
Intermediate REMIC Regular Interests (both of which are uncertificated) and
declares that it holds and will hold the same in trust for the exclusive use
and ultimate benefit of the holders of the Certificates. The interests
evidenced by the Master REMIC Residual Interest, together with the Regular
Certificates, constitute the entire beneficial ownership interest in the
Master REMIC.
(b) Concurrently with (i) the assignment and delivery to the Trustee of
the Subsidiary REMIC and the Intermediate REMIC (including the Residual
Interests therein represented by the Subsidiary REMIC Residual Interest and
Intermediate REMIC Residual Interest, respectively) and the acceptance by the
Trustee thereof, pursuant to Section 2.01, Section 2.02 and Section 2.09(a)
and (ii) the assignment and delivery to the Trustee of the Master REMIC
(including the Residual Interest therein represented by the Master REMIC
Residual Interest) and the acceptance by the Trustee thereof, pursuant to
Section 2.09(b), the Trustee, pursuant to the written request of the Depositor
executed by an officer of the Depositor, has executed, authenticated and
delivered to or upon the order of the Depositor, the Class R Certificates in
authorized denominations evidencing the Subsidiary REMIC Residual Interest and
Intermediate REMIC Residual Interest and the Master REMIC Residual Interest.
54
ARTICLE III
ADMINISTRATION AND SERVICING
OF MORTGAGE LOANS
SECTION 3.01 Servicers to Service Mortgage Loans.
-----------------------------------
For and on behalf of the Certificateholders, each Servicer shall service
and administer the related Mortgage Loans in accordance with the terms of this
Agreement and with Accepted Servicing Practices. The obligations of each of
Olympus and Fairbanks hereunder to service and administer the Mortgage Loans
shall be limited to the Olympus Serviced Loans and the Fairbanks Serviced
Loans respectively; and with respect to the duties and obligations of each
Servicer, references herein to "Mortgage Loans" or related "Mortgage Loans"
shall be limited to the Olympus Serviced Loans, including the Special Serviced
Mortgage Loans at any time Olympus is the Special Servicer (and the related
proceeds thereof and related REO Properties), in the case of Olympus and the
Fairbanks Serviced Loans (and the related proceeds thereof and related REO
Properties), in the case of Fairbanks, and in no event shall any Servicer have
any responsibility or liability with respect to any of the other Mortgage
Loans. In connection with such servicing and administration, each Servicer
shall have full power and authority, acting alone and/or through Subservicers
as provided in Section 3.02 hereof, to do or cause to be done any and all
things that it may deem necessary or desirable in connection with such
servicing and administration, including but not limited to, the power and
authority, subject to the terms hereof (i) to execute and deliver, on behalf
of the Certificateholders and the Trustee, customary consents or waivers and
other instruments and documents, (ii) to consent to transfers of any Mortgaged
Property and assumptions of the Mortgage Notes and related Mortgages (but only
in the manner provided in this Agreement), (iii) to collect any Insurance
Proceeds and other Liquidation Proceeds and (iv) to effectuate foreclosure or
other conversion of the ownership of the Mortgaged Property securing any
Mortgage Loan, provided that a Servicer shall not take any action that is
inconsistent with or prejudices the interests of the Trust Fund or the
Certificateholders in any Mortgage Loan or the rights and interests of the
Depositor, the Trustee or the Certificateholders under this Agreement. Each
Servicer shall represent and protect the interests of the Trust Fund in the
same manner as it protects its own interests in mortgage loans in its own
portfolio in any claim, proceeding or litigation regarding a Mortgage Loan,
and shall not make or permit any modification, waiver or amendment of any
Mortgage Loan which would cause any REMIC hereunder to fail to qualify as a
REMIC or result in the imposition of any tax under Section 860F(a) or Section
860G(d) of the Code. Without limiting the generality of the foregoing, each
Servicer, in its own name or in the name of the Depositor and the Trustee, is
hereby authorized and empowered by the Depositor and the Trustee, when such
Servicer believes it appropriate in its reasonable judgment, to execute and
deliver, on behalf of the Trustee, the Depositor, the Certificateholders or
any of them, any and all instruments of satisfaction or cancellation, or of
partial or full release or discharge and all other comparable instruments,
with respect to the Mortgage Loans, and with respect to the Mortgaged
Properties held for the benefit of the Certificateholders. Each Servicer shall
prepare and deliver to the Depositor and/or the Trustee such documents
requiring execution and delivery by either or both of them as are necessary or
appropriate to enable such Servicer to service and administer the Mortgage
Loans to the extent that such Servicer is not permitted to execute and deliver
such documents pursuant to
55
the preceding sentence. Upon receipt of such documents, the Depositor and/or
the Trustee shall execute such documents and deliver them to such Servicer.
In accordance with the standards of the preceding paragraph, the
Servicers shall advance or cause to be advanced funds as necessary for the
purpose of effecting the payment of taxes and assessments on the Mortgaged
Properties, which advances shall constitute Servicing Advances and shall be
reimbursable in the first instance from related collections from the
Mortgagors pursuant to Section 3.06, and further as provided in Section 3.09.
The costs incurred by a Servicer, if any, in effecting the timely payments of
taxes and assessments on the Mortgaged Properties and related insurance
premiums shall not, for the purpose of calculating monthly distributions to
the Certificateholders, be added to the Stated Principal Balances of the
related Mortgage Loans, notwithstanding that the terms of such Mortgage Loans
so permit.
With respect to the Mortgage Loans, the Servicer of such Mortgage Loans
agrees that, with respect to the Mortgagors of such Mortgage Loans, such
Servicer shall accurately and fully report its borrower credit files to
Equifax, Transunion & Experian in a timely manner.
Each Servicer hereby acknowledges that, to the extent such Servicer has
previously serviced some or all of the Mortgage Loans pursuant to another
servicing agreement, the provisions contained in this Agreement shall
supersede the provisions contained in such other servicing agreement.
SECTION 3.02 Subservicing; Enforcement of the Obligations of
------------------------------------------------------
Subservicers.
------------
(a) The Mortgage Loans may be subserviced by a Subservicer on behalf of
the related Servicer in accordance with the servicing provisions of this
Agreement, provided that the Subservicer is a FNMA-approved lender or a FHLMC
seller/servicer in good standing, and no event has occurred, including but not
limited to a change in insurance coverage, which would make it unable to
comply with the eligibility requirements for lenders imposed by FNMA or for
seller/servicer imposed by FHLMC, or which would require notification to FNMA
or FHLMC. A Servicer may perform any of its servicing responsibilities
hereunder or may cause the Subservicer to perform any such servicing
responsibilities on its behalf, but the use by a Servicer of a Subservicer
shall not release such Servicer from any of its obligations hereunder and such
Servicer shall remain responsible hereunder for all acts and omissions of a
Subservicer as fully as if such acts and omissions were those of a Servicer.
The related Servicer shall pay all fees and expenses of any Subservicer
engaged by such Servicer from its own funds.
Notwithstanding the foregoing, each Servicer shall be entitled to
outsource one or more separate servicing functions to a Person (each, an
"Outsourcer") that does not meet the eligibility requirements for a
Subservicer, so long as such outsourcing does not constitute the delegation of
such Servicer's obligation to perform all or substantially all of the
servicing of the related Mortgage Loans to such Outsourcer. In such event, the
use by a Servicer of any such Outsourcer shall not release the related
Servicer from any of its obligations hereunder and such Servicer shall remain
responsible hereunder for all acts and omissions of such Outsourcer as fully
as if such acts and omissions were those of the related Servicer, and the
related Servicer shall pay all fees and expenses of the Outsourcer from such
Servicer's own funds.
56
(b) At the cost and expense of the related Servicer, without any right of
reimbursement from the Depositor, Trustee, or the applicable Collection
Account, the related Servicer shall be entitled to terminate the rights and
responsibilities of its Subservicer and arrange for any servicing
responsibilities to be performed by a successor Subservicer meeting the
requirements set forth in Section 3.02(a); provided, however, that nothing
contained herein shall be deemed to prevent or prohibit a Servicer, at the
related Servicer's option, from electing to service the related Mortgage Loans
itself. In the event that a Servicer's responsibilities and duties under this
Agreement are terminated pursuant to Section 7.01, and if requested to do so
by the Trustee, the related Servicer shall at its own cost and expense
terminate the rights and responsibilities of its Subservicer as soon as is
reasonably possible. The related Servicer shall pay all fees, expenses or
penalties necessary in order to terminate the rights and responsibilities of
its Subservicer from such Servicer's own funds without any right of
reimbursement from the Depositor, Trustee, or the applicable Collection
Account.
(c) Notwithstanding any of the provisions of this Agreement relating to
agreements or arrangements between a Servicer and its Subservicer, a Servicer
and its Outsourcer, or any reference herein to actions taken through the
Subservicer, the Outsourcer, or otherwise, no Servicer shall be relieved of
its obligations to the Depositor, Trustee or Certificateholders and shall be
obligated to the same extent and under the same terms and conditions as if it
alone were servicing and administering the related Mortgage Loans. A Servicer
shall be entitled to enter into an agreement with its Subservicer and
Outsourcer for indemnification of such Servicer by such Subservicer or
Outsourcer, as applicable, and nothing contained in this Agreement shall be
deemed to limit or modify such indemnification.
For purposes of this Agreement, a Servicer shall be deemed to have
received any collections, recoveries or payments with respect to the related
Mortgage Loans that are received by a related Subservicer or Outsourcer
regardless of whether such payments are remitted by the Subservicer or
Outsourcer to the related Servicer.
Any Subservicing Agreement and any other transactions or services
relating to the Mortgage Loans involving a Subservicer shall be deemed to be
between the Subservicer, and the related Servicer alone, and the Depositor,
the Trustee, the Special Servicer and the other Servicer shall have no
obligations, duties or liabilities with respect to a Subservicer including no
obligation, duty or liability to pay a Subservicer's fees and expenses.
SECTION 3.03 Special Serviced Mortgage Loans.
-------------------------------
If directed by the Special Servicer and solely at the Special Servicer's
option, a Servicer shall transfer the servicing of any Mortgage Loan 91 days
or more delinquent to the Special Servicer. The Special Servicer shall
thereupon assume all of the rights and obligations of such Servicer hereunder
arising thereafter and the related predecessor Servicer shall have no further
responsibility with respect to such Mortgage Loan (except that the Special
Servicer shall not be (i) liable for losses of such Servicer pursuant to
Section 3.10 hereof or for any acts or omissions of the related predecessor
Servicer hereunder prior to the servicing transfer date, (ii) obligated to
effectuate repurchases or substitutions of Mortgage Loans hereunder including,
but not limited to, repurchases or substitutions of Mortgage Loans pursuant to
Section 2.02 or 2.03 hereof or (iii) deemed to have made any representations
and warranties of such predecessor Servicer
57
hereunder). Upon the transfer of the servicing of any such Mortgage Loan to
the Special Servicer, the Special Servicer shall be entitled to the Servicing
Fee and other compensation accruing after the servicing transfer date with
respect to such Mortgage Loans pursuant to Section 3.15.
In connection with the transfer of the servicing of any Mortgage Loan to
the Special Servicer, each Servicer shall, at the Special Servicer's expense,
deliver to the Special Servicer all documents and records relating to such
Mortgage Loans and an accounting of amounts collected or held by it and
otherwise use its best efforts to effect the orderly and efficient transfer of
the servicing to the Special Servicer. On the servicing transfer date, the
Special Servicer shall reimburse the related predecessor Servicer for all
unreimbursed Advances, Servicing Advances and Servicing Fees relating to the
Mortgage Loans for which the servicing is being transferred. The Special
Servicer shall be entitled to be reimbursed pursuant to Section 3.09(a) or
otherwise pursuant to this Agreement for all such Advances, Servicing Advances
and Servicing Fees paid by the Special Servicer to the predecessor servicer
pursuant to this Section 3.03. In addition, the Special Servicer shall amend
the Mortgage Loan Schedule to reflect that such Mortgage Loans are Special
Serviced Mortgage Loans.
With respect to any Special Serviced Mortgage Loan, all references herein
to Servicer shall be deemed to include the Special Servicer, as servicer, of
such Special Serviced Mortgage Loan.
The Special Servicer may be replaced as special servicer by holders of
the Class X Certificates representing a majority of the Percentage Interests
of such Class.
SECTION 3.04 Notification of Adjustments.
---------------------------
With respect to each Mortgage Loan with an adjustable Mortgage Rate, the
related Servicer shall adjust the Mortgage Rate on the related Adjustment Date
in compliance with the requirements of applicable law and the related Mortgage
and Mortgage Note. The related Servicer shall execute and deliver any and all
necessary notices required under applicable law and the terms of the related
Mortgage Note and Mortgage regarding the Mortgage Rate adjustments. Upon the
discovery by the related Servicer or the receipt of notice from the Trustee
that such Servicer has failed to adjust a Mortgage Rate in accordance with the
terms of the related Mortgage Note, that Servicer shall immediately deposit in
the Certificate Account from its own funds the amount of any interest loss or
deferral caused the Trustee thereby.
SECTION 3.05 Trustee to Act as Servicer.
--------------------------
In the event that a Servicer shall for any reason no longer be a Servicer
hereunder (including by reason of an Event of Default, as defined in Section
7.01 herein), the Trustee or its successor shall thereupon assume all of the
rights and obligations of such Servicer hereunder arising thereafter (except
that the Trustee shall not be (i) liable for losses of such Servicer pursuant
to Section 3.10 hereof or any acts or omissions of the related predecessor
Servicer hereunder, (ii) obligated to make Advances if it is prohibited from
doing so by applicable law, (iii) obligated to effectuate repurchases or
substitutions of Mortgage Loans hereunder including, but not limited to,
repurchases or substitutions of Mortgage Loans pursuant to Section 2.02 or
58
2.03 hereof or (iv) deemed to have made any representations and warranties of
such Servicer hereunder). Any such assumption shall be subject to Section 7.02
hereof.
A Servicer shall, upon request of the Trustee, but at the expense of such
Servicer, deliver to the assuming party all documents and records relating to
each Subservicing Agreement or substitute Subservicing Agreement and the
Mortgage Loans then being serviced thereunder and hereunder by such Servicer
and an accounting of amounts collected or held by it and otherwise use its
best efforts to effect the orderly and efficient transfer of the substitute
Subservicing Agreement to the assuming party at the expense of such outgoing
Servicer.
SECTION 3.06 Collection of Mortgage Loans; Collection Account;
------------------------------------------------------
Certificate Account; Prefunding Account; Capitalized
------------------------------------------------------
Interest Account.
----------------
(a) Continuously from the date hereof until the principal and interest on
all Mortgage Loans have been paid in full or such Mortgage Loans have become
Liquidation Mortgage Loans, a Servicer shall proceed in accordance with the
customary and usual standards of practice of prudent mortgage loan servicers
to collect all payments due under each of the related Mortgage Loans when the
same shall become due and payable to the extent consistent with this Agreement
and any related Primary Insurance Policy and shall take special care with
respect to Mortgage Loans for which a Servicer collects escrow payments in
ascertaining and estimating Escrow Payments and all other charges that will
become due and payable with respect to the Mortgage Loans and the Mortgaged
Properties, to the end that the installments payable by the Mortgagors will be
sufficient to pay such charges as and when they become due and payable.
Consistent with the foregoing, the related Servicer may in its discretion (i)
waive any late payment charge and (ii) extend the due dates for payments due
on a Mortgage Note for a period not greater than 180 days; provided, however,
that the related Servicer cannot extend the maturity of any such Mortgage Loan
past the date on which the final payment is due on the latest maturing
Mortgage Loan as of the Initial Cut-off Date. In the event of any such
arrangement, the related Servicer shall make Advances on the related Mortgage
Loan in accordance with the provisions of Section 4.01 during the scheduled
period in accordance with the amortization schedule of such Mortgage Loan
without modification thereof by reason of such arrangements. The related
Servicer shall not be required to institute or join in litigation with respect
to collection of any payment (whether under a Mortgage, Mortgage Note or
otherwise or against any public or governmental authority with respect to a
taking or condemnation) if it reasonably believes that enforcing the provision
of the Mortgage or other instrument pursuant to which such payment is required
is prohibited by applicable law.
(b) Each Servicer shall segregate and hold all funds collected and
received pursuant to a Mortgage Loan separate and apart from any of its own
funds and general assets and shall establish and maintain one or more
Collection Accounts, in the form of time deposit or demand accounts, titled
(depending upon the related Servicer) "Olympus Servicing, L.P., as servicer
for U.S. Bank National Association, as trustee, in trust for the Holders of
Credit Suisse First Boston Mortgage Securities Corp., CSFB ABS Trust Series
2002-HE16, CSFB Mortgage Pass-Through Certificates, Series 2002-HE16" or
"Fairbanks Capital Corp., as servicer for U.S. Bank National Association, as
trustee, in trust for the Holders of Credit Suisse First Boston Mortgage
Securities Corp., CSFB ABS Trust Series 2002-HE16, CSFB Mortgage Pass-Through
Certificates, Series 2002-HE16", wherein the related Servicer will have access
to such Collection Accounts. Each
59
Collection Account shall be an Eligible Account. Any funds deposited in a
Collection Account shall at all times be either invested in Eligible
Investments or shall be fully insured to the full extent permitted under
applicable law. Funds deposited in a Collection Account may be drawn on by the
related Servicer in accordance with Section 3.09.
(c) Each Servicer shall deposit in the applicable Collection Account on a
daily basis within two (2) Business Days following receipt, and, in each case,
retain therein, the following collections remitted by Subservicers or payments
received by such Servicer and payments made by such Servicer subsequent to the
Initial Cut-off Date (or, with respect to Subsequent Mortgage Loans, the
applicable Subsequent Cut-off Dates), other than payments of principal and
interest due on or before the applicable Cut-off Date:
(i) all payments on account of principal on the related Mortgage
Loans, including all Principal Prepayments;
(ii) all payments on account of interest on the related Mortgage
Loans adjusted to the per annum rate equal to the Mortgage Rate reduced
by the Servicing Fee Rate;
(iii) all Liquidation Proceeds on the related Mortgage Loans;
(iv) all Insurance Proceeds on the related Mortgage Loans including
amounts required to be deposited pursuant to Section 3.10 (other than
proceeds to be held in the Escrow Account and applied to the restoration
or repair of the Mortgaged Property or released to the Mortgagor in
accordance with Section 3.10);
(v) all Advances made by such Servicer pursuant to Section 4.01;
(vi) all Substitution Adjustment Amounts and Repurchase Prices on
the related Mortgage Loans;
(vii) with respect to each Principal Prepayment on the related
Mortgage Loans, the Prepayment Interest Shortfall, if any, for the
Prepayment Period. The aggregate of such deposits shall be made from the
applicable Servicer's own funds, without reimbursement therefor, up to a
maximum amount per month equal to the Compensating Interest Payment, if
any, for the Mortgage Loans serviced by that Servicer and Distribution
Date;
(viii) any amounts required to be deposited by such Servicer in
respect of net monthly income from REO Property pursuant to Section 3.12;
and
(ix) any other amounts required to be deposited hereunder.
The foregoing requirements for deposit into each Collection Account shall
be exclusive, it being understood and agreed that, without limiting the
generality of the foregoing, Ancillary Income need not be deposited by a
Servicer into such Collection Account. In addition, notwithstanding the
provisions of this Section 3.06, a Servicer may deduct from amounts received
by it, prior to deposit to the applicable Collection Account, any portion of
any
60
Scheduled Payment representing the Servicing Fee. In the event that a Servicer
shall remit any amount not required to be remitted, it may at any time
withdraw or direct the institution maintaining the related Collection Account
to withdraw such amount from such Collection Account, any provision herein to
the contrary notwithstanding. Such withdrawal or direction may be accomplished
by delivering written notice thereof to the Trustee or such other institution
maintaining such Collection Account which describes the amounts deposited in
error in such Collection Account. The Trustee may conclusively rely on such
notice and shall have no liability in connection with the withdrawal of such
funds at the direction of a Servicer. Each Servicer shall maintain adequate
records with respect to all withdrawals made by it pursuant to this Section.
All funds deposited in a Collection Account shall be held in trust for the
Certificateholders until withdrawn in accordance with Section 3.09(a).
(d) On or prior to the Closing Date, the Trustee shall establish and
maintain, on behalf of the Certificateholders, the Certificate Account. The
Trustee shall, promptly upon receipt, deposit in the Certificate Account and
retain therein the following:
(i) the aggregate amount remitted by the Servicers to the Trustee
pursuant to Section 3.09(a)(viii); and
(ii) any other amounts deposited hereunder which are required to be
deposited in the Certificate Account.
In the event that a Servicer shall remit to the Trustee any amount not
required to be remitted, it may at any time in writing direct the Trustee to
withdraw such amount from the Certificate Account, any provision herein to the
contrary notwithstanding. Such direction may be accomplished by delivering
written notice to the Trustee (upon which the Trustee may conclusively rely)
which describes the amounts deposited in error in the Certificate Account. All
funds deposited in the Certificate Account shall be held by the Trustee in
trust for the Certificateholders until disbursed in accordance with this
Agreement or withdrawn in accordance with Section 3.09(b). In no event shall
the Trustee incur liability for withdrawals from the Certificate Account at
the direction of a Servicer.
(e) Each institution at which a Collection Account or the Prefunding
Account is maintained shall either hold such funds on deposit uninvested or
shall invest the funds therein in Eligible Investments as directed in writing
by the related Servicer (in the case of a Collection Account) and the
Depositor (in the case of the Prefunding Account) which shall mature not later
than (i) in the case of a Collection Account, the Servicer Remittance Date and
(ii) in the case of the Prefunding Account, the Business Day immediately
preceding a Subsequent Transfer Date and, in each case, shall not be sold or
disposed of prior to its maturity. All such Eligible Investments shall be made
in the name of the Trustee, for the benefit of the Certificateholders. All
income and gain net of any losses realized from any such balances or
investment of funds on deposit in a Collection Account shall be for the
benefit of the related Servicer as servicing compensation and shall be
remitted to it monthly. The amount of any net investment losses in a
Collection Account shall promptly be deposited by the related Servicer in such
Collection Account. The Trustee in its fiduciary capacity shall not be liable
for the amount of any loss incurred in respect of any investment or lack of
investment of funds held in a Collection Account made in accordance with this
Section 3.06. All funds on deposit in the Certificate Account shall
61
remain uninvested or may be invested by the Trustee, in its sole discretion in
Eligible Investments selected by the Trustee. All net income and gain realized
from the investment of, and all earnings on, funds deposited in the
Certificate Account shall be for the benefit of the Trustee and shall be
available to be withdrawn pursuant to Section 3.09(b)(i). All net income and
gain realized from the investment of, and all earnings on, funds deposited in
the Simple Interest Excess Sub-Accounts shall be paid in accordance with
Section 3.07. All income and gain net of any losses realized from any such
balances or investment of funds on deposit in the Prefunding Account shall be
for the benefit of the Depositor and shall be remitted to it monthly. The
amount of any net investment losses in the Prefunding Account shall promptly
be deposited by the Depositor in the Prefunding Account. The Trustee in its
fiduciary capacity shall not be liable for the amount of any loss incurred in
respect of any investment or lack of investment of funds held in a Collection
Account or the Prefunding Account (other than as provided in this Section
3.06(e)) and made in accordance with this Section 3.06.
(f) A Servicer shall give notice to the Trustee, each Rating Agency and
the Depositor of any proposed change of the location of the related Collection
Account prior to any change thereof. The Trustee shall give notice to each
Servicer, each Rating Agency and the Depositor of any proposed change of the
location of the Certificate Account or the Prefunding Account prior to any
change thereof.
(g) The Trustee shall establish and maintain, on behalf of the
Certificateholders, the Prefunding Account. On the Closing Date the Depositor
shall remit the Prefunded Amount to the Trustee for deposit in the Prefunding
Account. On each Subsequent Transfer Date, upon satisfaction of the conditions
for such Subsequent Transfer Date set forth in Sections 2.01(d) and (e), with
respect to the related Subsequent Transfer Agreement, the Trustee shall remit
to the Depositor the applicable Aggregate Subsequent Transfer Amount as
payment of the purchase price for the related Subsequent Mortgage Loans.
If any funds remain in the Prefunding Account on August 24, 2002, to the
extent that they represent earnings on the amounts originally deposited into
the Prefunding Account, the Trustee shall distribute them to the order of the
Depositor. The remaining funds shall be transferred to the Certificate Account
to be included as part of principal distributions to the Certificates on the
August 2002 Distribution Date.
(h) The Trustee shall establish and maintain, on behalf of the
Certificateholders, the Capitalized Interest Account. On the Closing Date the
Depositor shall remit the Capitalized Interest Deposit to the Trustee for
deposit in the Capitalized Interest Account. On the Business Day prior to each
of the June 2002, July 2002 and August 2002 Distribution Dates, the Trustee
shall transfer from the Capitalized Interest Account to the Certificate
Account an amount equal to the Capitalized Interest Requirement for such
Distribution Date. On any Subsequent Transfer Date, any Overfunded Interest
Amount shall be withdrawn from the Capitalized Interest Account and paid to
the Depositor. Any funds remaining in the Capitalized Interest Account
immediately after the termination of the Prefunding Period shall be paid to
the Depositor.
SECTION 3.07 Establishment of and Deposits to Escrow Accounts;
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Permitted Withdrawals from Escrow Accounts; Payments
------------------------------------------------------
of Taxes,
---------
62
Insurance and Other Charges; Simple Interest Excess
------------------------------------------------------
Sub-Accounts; Deposits in Simple Interest Excess
------------------------------------------------------
Sub-Accounts.
------------
(a) To the extent required by the related Mortgage Note and not violative
of current law, each Servicer shall segregate and hold all funds collected and
received pursuant to a Mortgage Loan constituting Escrow Payments separate and
apart from any of its own funds and general assets and shall establish and
maintain one or more Escrow Accounts, in the form of time deposit or demand
accounts, titled, "[Servicer's name], in trust for various mortgagors related
to Credit Suisse First Boston Mortgage Securities Corp., Mortgage Pass-Through
Certificates, Series 2002-HE16". The Escrow Accounts shall be Eligible
Accounts. Funds deposited in the Escrow Account may be drawn on by the related
Servicer in accordance with Section 3.07(d).
(b) Each Servicer shall deposit in its Escrow Account or Accounts on a
daily basis within two Business Days of receipt and retain therein:
(i) all Escrow Payments collected on account of the related Mortgage
Loans, for the purpose of effecting timely payment of any such items as
required under the terms of this Agreement; and
(ii) all amounts representing Insurance Proceeds which are to be
applied to the restoration or repair of any related Mortgaged Property.
(c) Each Servicer shall make withdrawals from the related Escrow Account
only to effect such payments as are required under this Agreement, as set
forth in Section 3.07(d). Each Servicer shall be entitled to retain any
interest paid on funds deposited in the related Escrow Account by the
depository institution, other than interest on escrowed funds required by law
to be paid to the applicable Mortgagors. To the extent required by law, each
Servicer shall pay interest on escrowed funds to the applicable Mortgagor
notwithstanding that the related Escrow Account may be non-interest bearing or
that interest paid thereon is insufficient for such purposes.
(d) Withdrawals from the Escrow Account or Accounts may be made by the
related Servicer only:
(i) to effect timely payments of ground rents, taxes, assessments,
water rates, mortgage insurance premiums, condominium charges, fire,
hazard and flood insurance premiums or other items constituting Escrow
Payments for the related Mortgage;
(ii) to reimburse such Servicer for any Servicing Advances made by
such Servicer pursuant to Section 3.07(e) with respect to a related
Mortgage Loan, but only from amounts received on the related Mortgage
Loan which represent late collections of Escrow Payments thereunder;
(iii) to refund to any Mortgagor any funds found to be in excess of
the amounts required under the terms of the related Mortgage Loan;
63
(iv) for transfer to the related Collection Account to reduce the
principal balance of the related Mortgage Loan in accordance with the
terms of the related Mortgage and Mortgage Note;
(v) for application to restore or repair of the related Mortgaged
Property in accordance with the procedures outlined in Section 3.10(e);
(vi) to pay to such Servicer, or any Mortgagor to the extent
required by law, any interest paid on the funds deposited in such Escrow
Account;
(vii) to remove funds inadvertently placed in the related Escrow
Account by such Servicer; and
(viii) to clear and terminate such Escrow Account on the termination
of this Agreement.
(e) With respect to each Mortgage Loan, the Servicer shall maintain
accurate records reflecting the status of ground rents and taxes and any other
item or charge (including, without limitation, assessments, water rates or
sewer rents) which may become a lien senior to the lien of the related
Mortgage and the status of Primary Insurance Policy premiums and fire and
hazard insurance coverage and shall obtain, from time to time, all bills for
the payment of such charges (including renewal premiums) and shall effect or
cause to be effected payment thereof prior to the applicable penalty or
termination date. To the extent that a Mortgage does not provide for Escrow
Payments, the related Servicer shall determine that any such payments are made
by the Mortgagor prior to the applicable penalty or termination date. Each
Servicer assumes full responsibility for, with respect to the Mortgage Loans
it services, (i) the timely payment of all such bills and shall effect timely
payment of all such charges irrespective of each Mortgagor's faithful
performance in the payment of same or the making of the Escrow Payments, and
each such Servicer shall make Servicing Advances from its own funds to effect
such payments to the extent that such Servicer, in accordance with Accepted
Servicing Practices, deems such Servicing Advance recoverable, and (ii) any
penalties or late charges incurred in connection with such bills; provided,
however, such Servicer shall not be so obligated with respect to any Mortgage
which does not provide for Escrow Payments; provided, further, the Special
Servicer shall be entitled to reimbursement as a Servicing Advance for any
such penalties or late charges related to a Special Serviced Mortgage Loan and
such bills and charges due prior to the transfer of the servicing of such
Mortgage Loan to the Special Servicer pursuant to Section 3.03.
(f) No later than the Closing Date, Olympus shall establish and maintain
a sub-account of the Collection Account titled "Olympus, Simple Interest
Excess Sub-Account in trust for the Holders of Credit Suisse First Boston
Mortgage Securities Corp., CSFB ABS Trust Series 2002-HE16, CSFB Mortgage
Pass-Through Certificates, Series 2002-HE16". Olympus shall, on each
Determination Date transfer from the Collection Account to the Simple Interest
Excess Sub-Account all Net Simple Interest Excess, if any, pursuant to Section
3.09(a)(x), and shall maintain a record of all such deposits.
(g) Olympus shall withdraw amounts on deposit in the applicable Simple
Interest Excess Sub-Account on each Determination Date for deposit to the
Certificate Account in an amount
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equal to the lesser of (i) the amount on deposit therein, and (ii) the Net
Simple Interest Shortfall for such Distribution Date.
(h) Olympus shall distribute to the Class X Certificateholder 90% of the
balance in the applicable Simple Interest Excess Sub-Account on the
Distribution Date each year occurring in June, commencing in June 2002. Such
distributions shall be deemed to be made on a first-in, first-out basis. In
addition, the Servicer shall clear and terminate the Simple Interest Excess
Sub-Account upon the termination of this Agreement and retain any funds
remaining therein.
(i) Amounts on deposit in the Simple Interest Excess Sub-Accounts may be
invested in Eligible Investments. All income and gain net of any losses
realized from any such balances or investment of funds on deposit in a Simple
Interest Excess Sub-Account shall be for the benefit of Olympus as servicing
compensation and shall be remitted to it monthly. The amount of any net
investment losses in a Simple Interest Excess Sub-Account shall promptly be
deposited by Olympus in such Simple Interest Excess Sub-Account.
SECTION 3.08 Access to Certain Documentation and Information
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Regarding the Mortgage Loans; Inspections.
-----------------------------------------
(a) Each Servicer shall afford the Depositor and the Trustee reasonable
access to all records and documentation regarding the Mortgage Loans and all
accounts, insurance information and other matters relating to this Agreement,
such access being afforded without charge, but only upon reasonable request
and during normal business hours at the office designated by the related
Servicer. In addition, each Servicer shall provide to the Special Servicer
reasonable access to all records and documentation regarding the Mortgage
Loans serviced by it that become Special Serviced Mortgage Loans.
(b) Upon reasonable advance notice in writing, each Servicer will provide
to each Certificateholder which is a savings and loan association, bank or
insurance company certain reports and reasonable access to information and
documentation regarding the Mortgage Loans sufficient to permit such
Certificateholder to comply with applicable regulations of the OTS or other
regulatory authorities with respect to investment in the Certificates;
provided that each Servicer shall be entitled to be reimbursed by each such
Certificateholder for actual expenses incurred by each Servicer in providing
such reports and access.
(c) Each Servicer shall inspect the related Mortgaged Properties as often
as deemed necessary by the related Servicer in such Servicer's sole
discretion, to assure itself that the value of such Mortgaged Property is
being preserved and shall conduct subsequent inspections in accordance with
Accepted Servicing Practices or as may be required by the primary mortgage
guaranty insurer. The related Servicer shall keep a written or electronic
report of each such inspection.
SECTION 3.09 Permitted Withdrawals from the Collection Accounts and
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Certificate Account.
-------------------
(a) Each Servicer may from time to time make withdrawals from a related
Collection Account for the following purposes:
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(i) to pay to such Servicer (to the extent not previously retained
by such Servicer) the servicing compensation to which it is entitled
pursuant to Section 3.15, and to pay to such Servicer, as additional
servicing compensation, earnings on or investment income with respect to
funds in or credited to such Collection Account and any sub-account
thereof;
(ii) to reimburse such Servicer for unreimbursed Advances made by
it, such right of reimbursement pursuant to this subclause (ii) being
limited to amounts received on the Mortgage Loan(s) in respect of which
any such Advance was made (including without limitation, late recoveries
of payments, Liquidation Proceeds and Insurance Proceeds to the extent
received by such Servicer);
(iii) to reimburse such Servicer for any Nonrecoverable Advance
previously made;
(iv) to reimburse such Servicer for (A) unreimbursed Servicing
Advances, such Servicer's right to reimbursement pursuant to this clause
(iv) with respect to any Mortgage Loan being limited to amounts received
on such Mortgage Loan which represent late payments of principal and/or
interest (including, without limitation, Liquidation Proceeds and
Insurance Proceeds with respect to such Mortgage Loan) respecting which
any such advance was made and (B) for unpaid Servicing Fees as provided
in Section 3.12 hereof;
(v) to pay to the purchaser, with respect to each Mortgage Loan or
property acquired in respect thereof that has been purchased pursuant to
Section 2.02, 2.03 or 3.11, all amounts received thereon after the date
of such purchase;
(vi) to reimburse the Seller, such Servicer or the Depositor for
expenses incurred by any of them and reimbursable pursuant to Section
3.10 or 6.03 hereof;
(vii) to withdraw any amount deposited in such Collection Account
and not required to be deposited therein;
(viii) on or prior to 4:00 p.m. New York time on the Servicer
Remittance Date preceding each Distribution Date, to withdraw an amount
equal to the sum of the portion of the Interest Remittance Amount, the
Principal Remittance Amount and the Credit Risk Manager Fee in such
Collection Account applicable to the Mortgage Loans serviced by such
Servicer for such Distribution Date and remit such amount to the Trustee
for deposit in the Certificate Account;
(ix) on or prior to 4:00 p.m. New York time on the Servicer
Remittance Date preceding each Distribution Date, each Servicer may
withdraw an amount equal to the sum of all Prepayment Premiums received
during the related Prepayment Period applicable to the Mortgage Loans
serviced by such Servicer, and remit such amount to the Trustee for
deposit in the Certificate Account;
(x) to deposit to the Simple Interest Excess Sub-Account any amount
required to be deposited therein pursuant to Section 3.07(f);
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(xi) with respect to each Mortgage Loan covered by a lender paid
Primary Insurance Policy, to effect timely payment of the premiums on
such Primary Insurance Policy pursuant to Section 3.10(c); and
(xii) to clear and terminate such Collection Account upon
termination of this Agreement pursuant to Section 9.01 hereof.
Each Servicer shall keep and maintain separate accounting, on a Mortgage
Loan by Mortgage Loan basis, for the purpose of justifying any withdrawal from
the related Collection Account pursuant to such subclauses (i), (ii), (iv),
(v) and (xi). Prior to making any withdrawal from a Collection Account
pursuant to subclause (iii), the related Servicer shall deliver to the Trustee
a certificate of a Servicing Officer indicating the amount of any previous
Advance or Servicing Advance determined by such Servicer to be a
Nonrecoverable Advance and identifying the related Mortgage Loans(s), and
their respective portions of such Nonrecoverable Advance.
(b) The Trustee shall withdraw funds from the Certificate Account for
distributions to Certificateholders in the manner specified in this Agreement
(and to withhold from the amounts so withdrawn, the amount of any taxes that
it is authorized to withhold pursuant to the sixth paragraph of Section 8.11).
In addition, the Trustee may from time to time make withdrawals from the
Certificate Account for the following proposes:
(i) to pay to itself any investment income from balances in the
Certificate Account prior to distributions to Certificateholders;
(ii) to withdraw and return to a Servicer for deposit to the
applicable Collection Account any amount deposited in the Certificate
Account and not required to be deposited therein; and
(iii) to clear and terminate the Certificate Account upon
termination of the Agreement pursuant to Section 9.01 hereof.
SECTION 3.10 Maintenance of Hazard Insurance; Mortgage Impairment
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Insurance and Primary Insurance Policy; Claims;
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Restoration of Mortgaged Property.
---------------------------------
(a) Each Servicer shall cause to be maintained for each Mortgage Loan
hazard insurance such that all buildings upon the Mortgaged Property are
insured by a generally acceptable insurer rated either: "V" or better in the
current Best's Key Rating Guide ("Best's") or acceptable to FNMA and/or FHLMC
against loss by fire, hazards of extended coverage and such other hazards as
are customary in the area where the Mortgaged Property is located, in an
amount which is at least equal to the lesser of (i) the maximum insurable
value of the improvements securing such Mortgage Loan and (ii) the greater of
(A) the outstanding principal balance of the Mortgage Loan and (B) an amount
such that the proceeds of such policy shall be sufficient to prevent the
Mortgagor and/or the mortgagee from becoming a co-insurer.
If upon origination of the Mortgage Loan, the related Mortgaged Property
was located in an area identified in the Federal Register by the Flood
Emergency Management Agency as having special flood hazards (and such flood
insurance has been made available), the related
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Servicer shall cause a flood insurance policy to be maintained with respect to
such Mortgage Loan. Such policy shall meet the requirements of the current
guidelines of the Federal Insurance Administration and be in an amount
representing coverage equal to the lesser of (i) the minimum amount required,
under the terms of coverage, to compensate for any damage or loss on a
replacement cost basis (or the unpaid principal balance of the mortgage if
replacement cost coverage is not available for the type of building insured)
and (ii) the maximum amount of insurance which is available under the Flood
Disaster Protection Act of 1973, as amended. If at any time during the term of
the Mortgage Loan, the related Servicer determines in accordance with
applicable law and pursuant to the FNMA Guides that a Mortgaged Property is
located in a special flood hazard area and is not covered by flood insurance
or is covered in an amount less than the amount required by the Flood Disaster
Protection Act of 1973, as amended, such Servicer shall notify the related
Mortgagor that the Mortgagor must obtain such flood insurance coverage, and if
said Mortgagor fails to obtain the required flood insurance coverage within 45
days after such notification, such Servicer shall immediately force place the
required flood insurance on the Mortgagor's behalf.
If a Mortgage is secured by a unit in a condominium project, the related
Servicer shall verify that the coverage required of the owner's association,
including hazard, flood, liability, and fidelity coverage, is being maintained
in accordance with the then current FNMA or FHLMC requirements, and secure
from the owner's association its agreement to notify such Servicer promptly of
any change in the insurance coverage or of any condemnation or casualty loss
that may have a material effect on the value of the Mortgaged Property as
security.
Each Servicer shall cause to be maintained on each Mortgaged Property
such other additional special hazard insurance as may be required pursuant to
such applicable laws and regulations as shall at any time be in force and as
shall require such additional insurance, or pursuant to the requirements of
any Primary Insurance Policy insurer, or as may be required to conform with
Accepted Servicing Practices.
All policies required hereunder shall name the related Servicer as loss
payee and shall be endorsed with standard or union mortgagee clauses, without
contribution, which shall provide for prior written notice of any
cancellation, reduction in amount or material change in coverage.
A Servicer shall not interfere with the Mortgagor's freedom of choice at
the origination of such Mortgage Loan in selecting either his insurance
carrier or agent, provided, however, that a Servicer shall not accept any such
insurance policies from insurance companies unless such companies are rated V
in Best's or are acceptable to FNMA and/or FHLMC and are licensed to do
business in the jurisdiction in which the Mortgaged Property is located. A
Servicer shall determine that such policies provide sufficient risk coverage
and amounts, that they insure the property owner, and that they properly
describe the property address.
Pursuant to Section 3.06, any amounts collected by a Servicer under any
such policies (other than amounts to be deposited in the related Escrow
Account and applied to the restoration or repair of the related Mortgaged
Property, or property acquired in liquidation of the Mortgage Loan, or to be
released to the Mortgagor, in accordance with a Servicer's normal servicing
procedures) shall be deposited in the related Collection Account (subject to
withdrawal pursuant to Section 3.09(a)).
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Any cost incurred by a Servicer in maintaining any such insurance shall
not, for the purpose of calculating monthly distributions to the
Certificateholders or remittances to the Trustee for their benefit, be added
to the principal balance of the Mortgage Loan, notwithstanding that the terms
of the Mortgage Loan so permit. Such costs shall be recoverable by the
Servicer out of late payments by the related Mortgagor or out of Liquidation
Proceeds or otherwise pursuant to Section 3.09(a) hereof. It is understood and
agreed that no earthquake or other additional insurance is to be required of
any Mortgagor or maintained on property acquired in respect of a Mortgage
other than pursuant to such applicable laws and regulations as shall at any
time be in force and as shall require such additional insurance.
(b) In the event that the Servicer shall obtain and maintain a blanket
policy insuring against losses arising from fire and hazards covered under
extended coverage on all of the related Mortgage Loans, then, to the extent
such policy provides coverage in an amount equal to the amount required
pursuant to Section 3.10(a) and otherwise complies with all other requirements
of Section 3.10(a), it shall conclusively be deemed to have satisfied its
obligations as set forth in Section 3.10(a). Any amounts collected by a
Servicer under any such policy relating to a Mortgage Loan shall be deposited
in the related Collection Account subject to withdrawal pursuant to Section
3.09(a). Such policy may contain a deductible clause, in which case, in the
event that there shall not have been maintained on the related Mortgaged
Property a policy complying with Section 3.10(a), and there shall have been a
loss which would have been covered by such policy, a Servicer shall deposit in
the related Collection Account at the time of such loss the amount not
otherwise payable under the blanket policy because of such deductible clause,
such amount to be deposited from such Servicer's funds, without reimbursement
therefor. In connection with its activities as Servicer of the related
Mortgage Loans, each Servicer agrees to present, on behalf of itself, the
Depositor, and the Trustee for the benefit of the Certificateholders, claims
under any such blanket policy.
(c) With respect to each Mortgage Loan with a Loan-to-Value Ratio in
excess of 80% which the Seller represented to be covered by a Primary
Insurance Policy as of the Cut-off Date, a Servicer shall, without any cost to
the Depositor or Trustee, maintain or cause the Mortgagor to maintain in full
force and effect a Mortgage Guaranty Insurance Policy insuring that portion of
the Mortgage Loan in excess of 75% of value, and shall pay or shall cause the
related Mortgagor to pay, the premium thereon on a timely basis, until the
loan-to-value ratio of such Mortgage Loan is reduced to 80%, based on either
(i) a current appraisal of the Mortgaged Property or (ii) the appraisal of the
Mortgaged Property obtained at the time the Mortgage Loan was originated. In
the event that such Primary Insurance Policy shall be terminated, a Servicer
shall obtain from another Qualified Insurer a comparable replacement policy,
with a total coverage equal to the remaining coverage of such terminated
Primary Insurance Policy. If the insurer shall cease to be a Qualified
Insurer, a Servicer shall determine whether recoveries under the Primary
Insurance Policy are jeopardized for reasons related to the financial
condition of such insurer, it being understood that a Servicer shall in no
event have any responsibility or liability for any failure to recover under
the Primary Insurance Policy for such reason. If a Servicer determines that
recoveries are so jeopardized, it shall notify the related Mortgagor, if
required, and obtain from another Qualified Insurer a replacement insurance
policy. A Servicer shall not take any action which would result in noncoverage
under any applicable Primary Insurance Policy of any loss which, but for the
actions of such Servicer would have been covered thereunder. In connection
with any assumption or substitution agreement entered into or to be entered
into pursuant to
69
Section 3.11, a Servicer shall promptly notify the insurer under the related
Primary Insurance Policy, if any, of such assumption or substitution of
liability in accordance with the terms of such Primary Insurance Policy and
shall take all actions which may be required by such insurer as a condition to
the continuation of coverage under such Primary Insurance Policy provided that
such required actions are in compliance with all applicable law. If such
Primary Insurance Policy is terminated as a result of such assumption or
substitution of liability, such Servicer shall obtain a replacement Primary
Insurance Policy as provided above; provided that under applicable law and the
terms of the related Mortgage Note and Mortgage the cost of such policy may be
charged to the successor Mortgagor.
With respect to each Mortgage Loan covered by a lender paid Primary
Insurance Policy, the related Servicer agrees to effect timely payment of the
premiums on such Primary Insurance Policy from amounts on deposit in the
Collection Account with respect to such Mortgage Loan. If amounts on deposit
in the Collection Account with respect to such Mortgage Loan are not
sufficient to pay the premiums on such Primary Insurance Policy, the related
Servicer agrees to effect timely payment of such premiums, and such costs
shall be recoverable by such Servicer from the related Liquidation Proceeds or
otherwise as a Servicing Advance pursuant to Section 3.09(a). With respect to
each Mortgage Loan covered by a Primary Insurance Policy that is not lender
paid, the related Servicer agrees to effect timely payment of the premiums on
such Primary Insurance Policy, and such costs not otherwise recoverable from
the Mortgagor shall be recoverable by such Servicer from the related
Liquidation Proceeds or otherwise as a Servicing Advance pursuant to Section
3.09(a).
In connection with its activities as servicer, each Servicer agrees to
prepare and present, on behalf of itself, the Depositor, the Trustee and the
Certificateholders, claims to the insurer under any Primary Insurance Policy
in a timely fashion in accordance with the terms of such Primary Insurance
Policy and, in this regard, to take such reasonable action as shall be
necessary to permit recovery under any Primary Insurance Policy respecting
defaulted Mortgage Loans. Pursuant to Section 3.06, any amounts collected by a
Servicer under any Primary Insurance Policy shall be deposited in the related
Collection Account, subject to withdrawal pursuant to Section 3.09.
(d) [reserved]
(e) A Servicer need not obtain the approval of the Trustee prior to
releasing any Insurance Proceeds to the related Mortgagor to be applied to the
restoration or repair of the related Mortgaged Property if such release is in
accordance with Accepted Servicing Practices. At a minimum, a Servicer shall
comply with the following conditions in connection with any such release of
Insurance Proceeds:
(i) such Servicer shall receive satisfactory independent
verification of completion of repairs and issuance of any required
approvals with respect thereto;
(ii) such Servicer shall take all steps necessary to preserve the
priority of the lien of the Mortgage, including, but not limited to
requiring waivers with respect to mechanics' and materialmen's liens; and
70
(iii) pending repairs or restoration, such Servicer shall place the
Insurance Proceeds in the related Escrow Account.
If the Trustee is named as an additional loss payee, the related Servicer
is hereby empowered to endorse any loss draft issued in respect of such a
claim in the name of the Trustee.
SECTION 3.11 Enforcement of Due-on-Sale Clauses; Assumption
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Agreements.
-----------
(a) Each Servicer shall use its best efforts to enforce any "due-on-sale"
provision contained in any related Mortgage or Mortgage Note and to deny
assumption by the person to whom the Mortgaged Property has been or is about
to be sold whether by absolute conveyance or by contract of sale, and whether
or not the Mortgagor remains liable on the Mortgage and the Mortgage Note.
When the Mortgaged Property has been conveyed by the Mortgagor, the related
Servicer shall, to the extent it has knowledge of such conveyance, exercise
its rights to accelerate the maturity of such Mortgage Loan under the
"due-on-sale" clause applicable thereto, provided, however, that such Servicer
shall not exercise such rights if prohibited by law from doing so or if the
exercise of such rights would impair or threaten to impair any recovery under
the related Primary Insurance Policy, if any.
(b) If a Servicer reasonably believes it is unable under applicable law
to enforce such "due-on-sale" clause, such Servicer shall enter into (i) an
assumption and modification agreement with the person to whom such property
has been conveyed, pursuant to which such person becomes liable under the
Mortgage Note and the original Mortgagor remains liable thereon or (ii) in the
event a Servicer is unable under applicable law to require that the original
Mortgagor remain liable under the Mortgage Note, a substitution of liability
agreement with the purchaser of the Mortgaged Property pursuant to which the
original Mortgagor is released from liability and the purchaser of the
Mortgaged Property is substituted as Mortgagor and becomes liable under the
Mortgage Note. Notwithstanding the foregoing, a Servicer shall not be deemed
to be in default under this Section by reason of any transfer or assumption
which such Servicer reasonably believes it is restricted by law from
preventing, for any reason whatsoever. In connection with any such assumption,
no material term of the Mortgage Note, including without limitation, the
Mortgage Rate borne by the related Mortgage Note, the term of the Mortgage
Loan or the outstanding principal amount of the Mortgage Loan shall be
changed.
(c) To the extent that any Mortgage Loan is assumable, the related
Servicer shall inquire diligently into the creditworthiness of the proposed
transferee, and shall use the underwriting criteria for approving the credit
of the proposed transferee which are used by FNMA with respect to underwriting
mortgage loans of the same type as the Mortgage Loans. If the credit of the
proposed transferee does not meet such underwriting criteria, the related
Servicer diligently shall, to the extent permitted by the Mortgage or the
Mortgage Note and by applicable law, accelerate the maturity of the Mortgage
Loan.
(d) Subject to a Servicer's duty to enforce any due-on-sale clause to the
extent set forth in this Section 3.11, in any case in which a Mortgaged
Property has been conveyed to a Person by a Mortgagor, and such Person is to
enter into an assumption agreement or modification agreement or supplement to
the Mortgage Note or Mortgage that requires the signature of the Trustee, or
if an instrument of release signed by the Trustee is required releasing the
Mortgagor from liability
71
on the Mortgage Loan, the related Servicer shall prepare and deliver or cause
to be prepared and delivered to the Trustee for signature and shall direct, in
writing, the Trustee to execute the assumption agreement with the Person to
whom the Mortgaged Property is to be conveyed and such modification agreement
or supplement to the Mortgage Note or Mortgage or other instruments as are
reasonable or necessary to carry out the terms of the Mortgage Note or
Mortgage or otherwise to comply with any applicable laws regarding assumptions
or the transfer of the Mortgaged Property to such Person. In connection with
any such assumption, no material term of the Mortgage Note may be changed.
Together with each such substitution, assumption or other agreement or
instrument delivered to the Trustee for execution by it, the related Servicer
shall deliver an Officer's Certificate signed by a Servicing Officer stating
that the requirements of this subsection have been met in connection
therewith. The related Servicer shall notify the Trustee that any such
substitution or assumption agreement has been completed by forwarding to the
Trustee the original of such substitution or assumption agreement, which in
the case of the original shall be added to the related Mortgage File and
shall, for all purposes, be considered a part of such Mortgage File to the
same extent as all other documents and instruments constituting a part
thereof. Any fee collected by a Servicer for entering into an assumption or
substitution of liability agreement will be retained by such Servicer as
additional servicing compensation.
SECTION 3.12 Realization Upon Defaulted Mortgage Loans; Repurchase
------------------------------------------------------
of Certain Mortgage Loans.
-------------------------
(a) A Servicer shall use reasonable efforts to foreclose upon or
otherwise comparably convert the ownership of properties securing such of the
related Mortgage Loans as come into and continue in default and as to which no
satisfactory arrangements can be made for collection of delinquent payments.
In connection with such foreclosure or other conversion, a Servicer shall take
such action as (i) such Servicer would take under similar circumstances with
respect to a similar mortgage loan held for its own account for investment,
(ii) shall be consistent with Accepted Servicing Practices, (iii) such
Servicer shall determine consistently with Accepted Servicing Practices to be
in the best interest of the Depositor, Trustee and Certificateholders, and
(iv) is consistent with the requirements of the insurer under any Required
Insurance Policy; provided, however, that such Servicer shall not be required
to expend its own funds in connection with any foreclosure or towards the
restoration of any property unless it shall determine (i) that such
restoration and/or foreclosure will increase the proceeds of liquidation of
the related Mortgage Loan after reimbursement to itself of such expenses and
(ii) that such expenses will be recoverable to it through Liquidation Proceeds
(respecting which it shall have priority for purposes of withdrawals from the
related Collection Account). Such Servicer shall be responsible for all other
costs and expenses incurred by it in any such proceedings; provided, however,
that it shall be entitled to reimbursement thereof from the Liquidation
Proceeds with respect to the related Mortgaged Property or otherwise pursuant
to Section 3.09(a).
Notwithstanding anything to the contrary contained in this Agreement, in
connection with a foreclosure or acceptance of a deed in lieu of foreclosure,
in the event a Servicer has reasonable cause to believe that a Mortgaged
Property is contaminated by hazardous or toxic substances or wastes, or if the
Trustee otherwise requests, an environmental inspection or review of such
Mortgaged Property conducted by a qualified inspector shall be arranged for by
such Servicer. Upon completion of the inspection, such Servicer shall promptly
provide the Trustee with a written report of environmental inspection.
72
In the event the environmental inspection report indicates that the
Mortgaged Property is contaminated by hazardous or toxic substances or wastes,
such Servicer shall not proceed with foreclosure or acceptance of a deed in
lieu of foreclosure if the estimated costs of the environmental clean up, as
estimated in the environmental inspection report, together with the Servicing
Advances made by such Servicer and the estimated costs of foreclosure or
acceptance of a deed in lieu of foreclosure exceeds the estimated value of the
Mortgaged Property. If however, the aggregate of such clean up and foreclosure
costs and Servicing Advances as estimated in the environmental inspection
report are less than or equal to the estimated value of the Mortgaged
Property, then such Servicer may, in its reasonable judgment and in accordance
with Accepted Servicing Practices, choose to proceed with foreclosure or
acceptance of a deed in lieu of foreclosure and such Servicer shall be
reimbursed for all reasonable costs associated with such foreclosure or
acceptance of a deed in lieu of foreclosure and any related environmental
clean up costs, as applicable, from the related Liquidation Proceeds, or if
the Liquidation Proceeds are insufficient to fully reimburse such Servicer,
such Servicer shall be entitled to be reimbursed from amounts in the related
Collection Account pursuant to Section 3.09(a) hereof. In the event the
Servicer does not proceed with foreclosure or acceptance of a deed in lieu of
foreclosure pursuant to the first sentence of this paragraph, such Servicer
shall be reimbursed for all Servicing Advances made with respect to the
related Mortgaged Property from the related Collection Account pursuant to
Section 3.09(a) hereof, and such Servicer shall have no further obligation to
service such Mortgage Loan under the provisions of this Agreement.
(b) With respect to any REO Property, the deed or certificate of sale
shall be taken in the name of the Trustee for the benefit of the
Certificateholders, or its nominee, on behalf of the Certificateholders. The
Trustee's name shall be placed on the title to such REO Property solely as the
Trustee hereunder and not in its individual capacity. The related Servicer
shall ensure that the title to such REO Property references this Agreement and
the Trustee's capacity hereunder. Pursuant to its efforts to sell such REO
Property, the related Servicer shall, in accordance with Accepted Servicing
Practices, manage, conserve, protect and operate each REO Property for the
purpose of its prompt disposition and sale. Such Servicer, either itself or
through an agent selected by such Servicer, shall manage, conserve, protect
and operate the REO Property in the same manner that it manages, conserves,
protects and operates other foreclosed property for its own account, and in
the same manner that similar property in the same locality as the REO Property
is managed. Such Servicer shall furnish to the Trustee on or before each
Distribution Date a statement with respect to any REO Property covering the
operation of such REO Property for the previous calendar month and such other
information as the Trustee shall reasonably request and which is necessary to
enable the Trustee to comply with the reporting requirements of the REMIC
Provisions. The net monthly rental income, if any, from such REO Property
shall be deposited in the related Collection Account no later than the close
of business on each Determination Date. Such Servicer shall perform the tax
reporting and withholding required by Sections 1445 and 6050J of the Code with
respect to foreclosures and abandonments, the tax reporting required by
Section 6050H of the Code with respect to the receipt of mortgage interest
from individuals and any tax reporting required by Section 6050P of the Code
with respect to the cancellation of indebtedness by certain financial
entities, by preparing such tax and information returns as may be required for
filing.
To the extent consistent with Accepted Servicing Practices, the related
Servicer shall also maintain on each REO Property fire and hazard insurance
with extended coverage in amount
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which is equal to the outstanding principal balance of the related Mortgage
Loan (as reduced by any amount applied as a reduction of principal at the time
of acquisition of the REO Property), liability insurance and, to the extent
required and available under the Flood Disaster Protection Act of 1973, as
amended, flood insurance in the amount required above.
(c) In the event that the Trust Fund acquires any Mortgaged Property as
aforesaid or otherwise in connection with a default or imminent default on a
Mortgage Loan, the related Servicer shall dispose of such Mortgaged Property
prior to three years after the end of the calendar year of its acquisition by
the Trust Fund unless (i) the Trustee shall have been supplied with an Opinion
of Counsel to the effect that the holding by the Trust Fund of such Mortgaged
Property subsequent to such three-year period will not result in the
imposition of taxes on "prohibited transactions" of any REMIC hereunder as
defined in Section 860F of the Code or cause any REMIC hereunder to fail to
qualify as a REMIC at any time that any Certificates are outstanding, in which
case the Trust Fund may continue to hold such Mortgaged Property (subject to
any conditions contained in such Opinion of Counsel) or (ii) the related
Servicer shall have applied for, prior to the expiration of such three-year
period, an extension of such three-year period in the manner contemplated by
Section 856(e)(3) of the Code, in which case the three-year period shall be
extended by the applicable extension period. Notwithstanding any other
provision of this Agreement, no Mortgaged Property acquired by the Trust Fund
shall be rented (or allowed to continue to be rented) or otherwise used for
the production of income by or on behalf of the Trust Fund in such a manner or
pursuant to any terms that would (i) cause such Mortgaged Property to fail to
qualify as "foreclosure property" within the meaning of Section 860G(a)(8) of
the Code or (ii) subject any REMIC hereunder to the imposition of any federal,
state or local income taxes on the income earned from such Mortgaged Property
under Section 860G(c) of the Code or otherwise, unless the related Servicer
has agreed to indemnify and hold harmless the Trust Fund with respect to the
imposition of any such taxes.
In the event of a default on a Mortgage Loan one or more of whose obligor
is not a United States Person, as that term is defined in Section 7701(a)(30)
of the Code, in connection with any foreclosure or acquisition of a deed in
lieu of foreclosure (together, "foreclosure") in respect of such Mortgage
Loan, the related Servicer will cause compliance with the provisions of
Treasury Regulation Section 1.1445-2(d)(3) (or any successor thereto)
necessary to assure that no withholding tax obligation arises with respect to
the proceeds of such foreclosure except to the extent, if any, that proceeds
of such foreclosure are required to be remitted to the obligors on such
Mortgage Loan.
(d) The decision of a Servicer to foreclose on a defaulted Mortgage Loan
shall be subject to a determination by such Servicer that the proceeds of such
foreclosure would exceed the costs and expenses of bringing such a proceeding.
The income earned from the management of any REO Properties, net of
reimbursement to such Servicer for expenses incurred (including any property
or other taxes) in connection with such management and net of applicable
accrued and unpaid Servicing Fees, and unreimbursed Advances and Servicing
Advances, shall be applied to the payment of principal of and interest on the
related defaulted Mortgage Loans (with interest accruing as though such
Mortgage Loans were still current) and all such income shall be deemed, for
all purposes in this Agreement, to be payments on account of principal and
interest on the related Mortgage Notes and shall be deposited into the related
Collection Account. To the extent the net income received during any calendar
month is in excess of the amount attributable to
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amortizing principal and accrued interest at the related Mortgage Rate on the
related Mortgage Loan for such calendar month, such excess shall be considered
to be a partial prepayment of principal of the related Mortgage Loan.
(e) The proceeds from any liquidation of a Mortgage Loan, as well as any
income from an REO Property, will be applied in the following order of
priority: first, to reimburse the related Servicer for any related
unreimbursed Servicing Advances and Servicing Fees; second, to reimburse the
related Servicer for any unreimbursed Advances; third, to reimburse the
related Collection Account for any Nonrecoverable Advances (or portions
thereof) that were previously withdrawn by the related Servicer pursuant to
Section 3.09(a)(iii) that related to such Mortgage Loan; fourth, to accrued
and unpaid interest (to the extent no Advance has been made for such amount or
any such Advance has been reimbursed) on the Mortgage Loan or related REO
Property, at the per annum rate equal to the related Mortgage Rate reduced by
the Servicing Fee Rate to the Due Date occurring in the month in which such
amounts are required to be distributed; and fifth, as a recovery of principal
of the Mortgage Loan. Excess Proceeds, if any, from the liquidation of a
Liquidation Mortgage Loan will be retained by the related Servicer as
additional servicing compensation pursuant to Section 3.15.
(f) The Special Servicer may, at its option, enter into a special
servicing agreement with an unaffiliated Holder of the Class X Certificate,
subject to each Rating Agency's acknowledgment that the Ratings of the
Certificates in effect immediately prior to the entering into of such
agreement would not be qualified, downgraded or withdrawn and the Certificates
would not be placed on credit review status (except for possible upgrading) as
a result of such agreement. Any such agreement may contain provisions whereby
such Holder may (i) instruct the Special Servicer to commence or delay
foreclosure proceedings with respect to delinquent Special Serviced Mortgage
Loans serviced by it and will contain provisions for the deposit of cash with
the Special Servicer by the Holder that would be available for distribution to
Certificateholders if Liquidation Proceeds are less than they otherwise may
have been had the Special Servicer acted in accordance with its normal
procedures, (ii) purchase delinquent Special Serviced Mortgage Loans serviced
by the Special Servicer from the Trust Fund immediately prior to the
commencement of foreclosure proceedings at a price equal to the Repurchase
Price, and/or (iii) assume all of the servicing rights and obligations with
respect to delinquent Special Serviced Mortgage Loans serviced by the Special
Servicer so long as such Holder (A) meets the requirements for a Subservicer
set forth in Section 3.02(a), and (B) will service such Special Serviced
Mortgage Loans in accordance with this Agreement.
(g) The Special Servicer, at its option, may (but is not obligated to)
purchase from the Trust Fund any Mortgage Loan which is 90 or more days
delinquent or which is in foreclosure. If it elects to make any such purchase,
the Special Servicer shall purchase such Mortgage Loan with its own funds at a
price equal to the Repurchase Price.
SECTION 3.13 Trustee to Cooperate; Release of Mortgage Files.
-----------------------------------------------
Upon the payment in full of any Mortgage Loan, or the receipt by the
related Servicer of a notification that payment in full will be escrowed in a
manner customary for such purposes, such Servicer will immediately notify the
applicable Custodian by delivering, or causing to be delivered a "Request for
Release" substantially in the form of Exhibit M. Upon receipt of such
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request, the applicable Custodian shall within four Business Days release the
related Mortgage File to such Servicer, and the Trustee shall within four
Business Days of the Servicer's direction execute and deliver to such Servicer
the request for reconveyance, deed of reconveyance or release or satisfaction
of mortgage or such instrument releasing the lien of the Mortgage in each case
provided by such Servicer, together with the Mortgage Note with written
evidence of cancellation thereon. Such Servicer shall execute lien releases
under Power of Attorney from the Trustee. Expenses incurred in connection with
any instrument of satisfaction or deed of reconveyance shall be chargeable to
the related Mortgagor. From time to time and as shall be appropriate for the
servicing or foreclosure of any Mortgage Loan, including for such purpose,
collection under any policy of flood insurance, any fidelity bond or errors or
omissions policy, or for the purposes of effecting a partial release of any
Mortgaged Property from the lien of the Mortgage or the making of any
corrections to the Mortgage Note or the Mortgage or any of the other documents
included in the Mortgage File, the Trustee shall, within three Business Days
of delivery to the Trustee of a Request for Release in the form of Exhibit M
signed by a Servicing Officer, release or cause the applicable Custodian to
release the Mortgage File to the related Servicer. Subject to the further
limitations set forth below, such Servicer shall cause the Mortgage File or
documents so released to be returned to the Trustee or such Custodian, as
applicable, when the need therefor by such Servicer no longer exists, unless
the Mortgage Loan is liquidated and the proceeds thereof are deposited in the
related Collection Account, in which case such Servicer shall deliver to the
Trustee a Request for Release in the form of Exhibit M, signed by a Servicing
Officer.
If a Servicer at any time seeks to initiate a foreclosure proceeding in
respect of any Mortgaged Property as authorized by this Agreement, such
Servicer shall deliver or cause to be delivered to the Trustee, for signature,
as appropriate, any court pleadings, requests for trustee's sale or other
documents necessary to effectuate such foreclosure or any legal action brought
to obtain judgment against the Mortgagor on the Mortgage Note or the Mortgage
or to obtain a deficiency judgment or to enforce any other remedies or rights
provided by the Mortgage Note or the Mortgage or otherwise available at law or
in equity.
SECTION 3.14 Documents, Records and Funds in Possession of a
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Servicer to be Held for the Trustee.
-----------------------------------
Notwithstanding any other provisions of this Agreement, each Servicer
shall transmit to the applicable Custodian on behalf of the Trustee as
required by this Agreement all documents and instruments in respect of a
Mortgage Loan coming into the possession of such Servicer from time to time
required to be delivered to the Trustee pursuant to the terms hereof and shall
account fully to the Trustee for any funds received by such Servicer or which
otherwise are collected by such Servicer as Liquidation Proceeds or Insurance
Proceeds in respect of any Mortgage Loan. All Mortgage Files and funds
collected or held by, or under the control of, such Servicer in respect of any
Mortgage Loans, whether from the collection of principal and interest payments
or from Liquidation Proceeds, including but not limited to, any funds on
deposit in a related Collection Account, shall be held by such Servicer for
and on behalf of the Trustee and shall be and remain the sole and exclusive
property of the Trustee, subject to the applicable provisions of this
Agreement. Each Servicer also agrees that it shall not create, incur or
subject any Mortgage File or any funds that are deposited in the related
Collection Account, Certificate Account or any related Escrow Account, or any
funds that otherwise are or may become due or
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payable to the Trustee for the benefit of the Certificateholders, to any
claim, lien, security interest, judgment, levy, writ of attachment or other
encumbrance, or assert by legal action or otherwise any claim or right of
setoff against any Mortgage File or any funds collected on, or in connection
with, a Mortgage Loan, except, however, that each Servicer shall be entitled
to set off against and deduct from any such funds any amounts that are
properly due and payable to each Servicer under this Agreement.
SECTION 3.15 Servicing Fee.
-------------
As compensation for its services hereunder, each Servicer shall be
entitled to withdraw from the applicable Collection Account in accordance with
Section 3.09(a) or to retain from interest payments on the related Mortgage
Loans the amount of the Servicing Fee for each Mortgage Loan, less any amounts
in respect of its Servicing Fee payable by such Servicer pursuant to Section
3.06(c)(vii). In connection with the servicing of any Special Serviced
Mortgage Loan, the Special Servicer shall receive the Servicing Fee for each
such Special Serviced Mortgage Loan as its compensation and Ancillary Income
with respect to Special Serviced Mortgage Loans.
Additional servicing compensation in the form of Ancillary Income shall
be retained by the related Servicer. Each Servicer shall be required to pay
all expenses incurred by it in connection with its servicing activities
hereunder (including the payment of any expenses incurred in connection with
any Subservicing Agreement entered into pursuant to Section 3.02 and the
payment of any premiums for hazard insurance and any Primary Insurance Policy,
and maintenance of the other forms of insurance coverage required by this
Agreement) and shall not be entitled to reimbursement thereof except as
specifically provided for in this Agreement.
SECTION 3.16 Access to Certain Documentation.
-------------------------------
Each Servicer shall provide to the OTS and the FDIC and to comparable
regulatory authorities supervising Holders of Subordinate Certificates and the
examiners and supervisory agents of the OTS, the FDIC and such other
authorities, access to the documentation regarding the related Mortgage Loans
required by applicable regulations of the OTS and the FDIC. Such access shall
be afforded without charge, but only upon reasonable and prior written request
and during normal business hours at the offices designated by the applicable
Servicer. Nothing in this Section shall limit the obligation of each Servicer
to observe any applicable law prohibiting disclosure of information regarding
the Mortgagors and the failure of each Servicer to provide access as provided
in this Section as a result of such obligation shall not constitute a breach
of this Section.
SECTION 3.17 Annual Statement as to Compliance.
---------------------------------
Each Servicer shall deliver to the Depositor, the Rating Agencies and the
Trustee on or before 120 days after the end of the related Servicer's fiscal
year, commencing in its 2003 fiscal year, an Officer's Certificate stating, as
to the signer thereof, that (i) a review of the activities of such Servicer
during the preceding calendar year and of the performance of the Servicer
under this Agreement has been made under such officer's supervision, and (ii)
to the best of such officer's knowledge, based on such review, such Servicer
has fulfilled all its obligations under
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this Agreement throughout such year, or, if there has been a material default
in the fulfillment of any such obligation, specifying each such material
default known to such officer and the nature and status thereof and the action
being taken by such Servicer to cure such material default.
SECTION 3.18 Annual Independent Public Accountants' Servicing
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Statement; Financial Statements.
-------------------------------
On or before 120 days after the end of each Servicer's fiscal year,
commencing in its 2003 fiscal year, the related Servicer, at its expense,
shall cause a nationally or regionally recognized firm of independent public
accountants (who may also render other services to such Servicer, the Seller
or any affiliate thereof) which is a member of the American Institute of
Certified Public Accountants to furnish a statement to the Trustee and the
Depositor to the effect that with respect to such Servicer, such firm has
examined certain documents and records relating to the servicing of mortgage
loans which such Servicer is servicing, including the related Mortgage Loans,
and that, on the basis of such examination, conducted substantially in
compliance with the Uniform Single Attestation Program for Mortgage Bankers or
the Audit Guide for HUD Approved Title II Approved Mortgagees and Loan
Correspondent Programs, nothing has come to their attention which would
indicate that such servicing has not been conducted in compliance with
Accepted Servicing Practices, except for (a) such exceptions as such firm
shall believe to be immaterial, and (b) such other exceptions as shall be set
forth in such statement. In rendering such statement, such firm may rely, as
to matters relating to direct servicing of mortgage loans by Subservicers,
upon comparable statements for examinations conducted substantially in
compliance with the Uniform Single Attestation Program for Mortgage Bankers or
the Audit Guide for HUD Approved Title II Approved Mortgagees and Loan
Correspondent Programs (rendered within one year of such statement) of
independent public accountants with respect to the related Subservicer. Copies
of such statement shall be provided by the Trustee to any Certificateholder
upon request at the related Servicer's expense, provided such statement is
delivered by the Servicer to the Trustee.
SECTION 3.19 Maintenance of Fidelity Bond and Errors and Omissions
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Insurance.
---------
Each Servicer shall maintain with responsible companies, at its own
expense, a blanket Fidelity Bond and an Errors and Omissions Insurance Policy,
with broad coverage on all officers, employees or other persons acting in any
capacity requiring such persons to handle funds, money, documents or papers
relating to the related Mortgage Loans ("Servicer Employees"). Any such
Fidelity Bond and Errors and Omissions Insurance Policy shall be in the form
of the Financial Institution Bond Form 22 - Fidelity Bond American
International Specialty Lines Insurance Policy Form ("5713 5/93") Mortgage
Banker Broker E&O and shall protect and insure the Servicer against losses,
including forgery, theft, embezzlement, fraud, errors and omissions and
negligent acts of the Servicer Employees. Each Fidelity Bond and Errors and
Omissions Insurance Policy also shall protect and insure the related Servicer
against losses in connection with the release or satisfaction of a related
Mortgage Loan without having obtained payment in full of the indebtedness
secured thereby. No provision of this Section 3.19 requiring such Fidelity
Bond and Errors and Omissions Insurance Policy shall diminish or relieve a
Servicer from its duties and obligations as set forth in this Agreement. The
minimum coverage under any
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such bond and insurance policy shall be at least equal to the corresponding
amounts required by FNMA.
SECTION 3.20 Prepayment Premiums.
-------------------
Notwithstanding anything in this Agreement to the contrary, in the event
of a Principal Prepayment, a Servicer may not waive any Prepayment Premium or
portion thereof required by the terms of the related Mortgage Note unless
(i)(A) with regard to Olympus Serviced Loans, Olympus determines that such
waiver would maximize recovery of Liquidation Proceeds for such Mortgage Loan,
taking into account the value of such Prepayment Premium, or (B) with regard
to Fairbanks Serviced Loans, the related Mortgage Loan is in default or
foreseeable default and such waiver (a) is standard and customary in servicing
mortgage loans similar to the Mortgage Loans and (b) would, in the reasonable
judgment of the related Servicer, maximize recovery of total proceeds taking
into account the value of such Prepayment Premium and the related Mortgage
Loan, or (ii) (A) the enforceability thereof is limited (1) by bankruptcy,
insolvency, moratorium, receivership, or other similar law relating to
creditors' rights generally or (2) due to acceleration in connection with a
foreclosure or other involuntary payment, or (B) the enforceability is
otherwise limited or prohibited by applicable law. For the avoidance of doubt,
a Servicer may waive a Prepayment Premium in connection with a short sale or
short payoff on a defaulted Mortgage Loan. If a Servicer has waived all or a
portion of a Prepayment Premium relating to a Principal Prepayment, other than
as provided above, such Servicer shall deliver to the Trustee no later than
the next succeeding Servicer Remittance Date, for deposit into the Certificate
Account the amount of such Prepayment Premium (or such portion thereof as had
been waived) for distribution in accordance with the terms of this Agreement.
If a Servicer has waived all or a portion of a Prepayment Premium for any
reason, it shall promptly notify the Trustee thereof and shall include such
information in any monthly reports it provides the Trustee.
SECTION 3.21 Duties of the Credit Risk Manager.
---------------------------------
For and on behalf of the Depositor, the Credit Risk Manager shall provide
reports and recommendations as to loss mitigation activities concerning
Mortgage Loans that are past due, as to which there has been commencement of
foreclosure, as to which there has been forbearance in exercise of remedies
which are in default, as to which any obligor is the subject of bankruptcy,
receivership, or an arrangement of creditors, or which have become REO
Properties. Such reports and recommendations will be based upon information
provided pursuant to the Credit Risk Management Agreements. The Credit Risk
Manager shall look solely to the Servicers for all information and data
(including loss and delinquency information and data) and loan level
information and data relating to the servicing of the Mortgage Loans.
SECTION 3.22 Advance Facility.
----------------
(a) With the prior written consent of FSA, each Servicer is hereby
authorized to enter into a financing or other facility (any such arrangement,
an "Advance Facility") under which (1) each such Servicer assigns or pledges
to another Person (an "Advancing Person") such Servicer's rights under this
Agreement to be reimbursed for any Advances or Servicing Advances and/or (2)
an Advancing Person agrees to fund some or all Advances and/or Servicing
Advances required to be made by such Servicer pursuant to this Agreement. No
consent of the
79
Trustee, Certificateholders or any other party (other than FSA) is required
before such Servicer may enter into an Advance Facility; provided, however,
that the consent of the Trustee shall be required before such Servicer may
cause to be outstanding at one time more than one Advance Facility with
respect to Advances or more than one Advance Facility with respect to
Servicing Advances. Notwithstanding the existence of any Advance Facility
under which an Advancing Person agrees to fund Advances and/or Servicing
Advances on a Servicer's behalf, each such Servicer shall remain obligated
pursuant to this Agreement to make Advances and Servicing Advances pursuant to
and as required by this Agreement, and shall not be relieved of such
obligations by virtue of such Advance Facility. If each such Servicer enters
into an Advance Facility, and for so long as an Advancing Person remains
entitled to receive reimbursement for any Advances or Servicing Advances
outstanding and previously unreimbursed pursuant to this Agreement, then such
Servicer may elect by providing written notice to the Trustee not to be
permitted to reimburse itself for Advances and/or Servicing Advances, as
applicable, pursuant to Section 3.09(a) of this Agreement, but following any
such election Servicer shall be required to include amounts collected that
would otherwise be retained by such Servicer to reimburse it for previously
unreimbursed Advances ("Advance Reimbursement Amounts") and/or previously
unreimbursed Servicing Advances ("Servicing Advance Reimbursement Amounts" and
together with Advance Reimbursement Amounts, "Reimbursement Amounts") (in each
case to the extent such type of Reimbursement Amount is included in the
Advance Facility) in the remittance to the Trustee made pursuant to this
Agreement to the extent of amounts on deposit in the Collection Account on the
related Servicer Remittance Date. Notwithstanding anything to the contrary
herein, in no event shall Advance Reimbursement Amounts or Servicing Advance
Reimbursement Amounts be included in Interest Remittance Amounts or Principal
Remittance Amounts or distributed to Certificateholders. Each Servicer making
the election set for herein shall report to the Trustee the portions of the
Reimbursement Amounts that consist of Advance Reimbursement Amounts and
Servicing Advance Reimbursement Amounts, respectively.
(b) If a Servicer enters into an Advance Facility and makes the election
set forth in Section 3.22(a), such Servicer and the related Advancing Person
shall deliver to the Trustee a written notice and payment instruction (an
"Advance Facility Notice"), providing the Trustee with written payment
instructions as to where to remit Advance Reimbursement Amounts and/or
Servicing Advance Reimbursement Amounts (each to the extent such type of
Reimbursement Amount is included within the Advance Facility) on subsequent
Distribution Dates. The payment instruction shall require the applicable
Reimbursement Amounts to be distributed to the Advancing Person or to a
trustee or custodian (an "Advance Facility Trustee") designated in the Advance
Facility Notice. An Advance Facility Notice may only be terminated by the
joint written direction of the related Servicer and the related Advancing
Person (and any related Advance Facility Trustee); provided, however, that the
provisions of this Section 3.22 shall cease to be applicable when all Advances
and Servicing Advances funded by an Advancing Person, and when all Advances
and Servicing Advances (the rights to be reimbursed for which have been
assigned or pledged to an Advancing Person), have been repaid to the related
Advancing Person in full.
(c) Reimbursement Amounts shall consist solely of amounts in respect of
Advances and/or Servicing Advances made with respect to the Mortgage Loans for
which the related Servicer would be permitted to reimburse itself in
accordance with Section 3.09(ii), (iii) and (iv) hereof, assuming such
Servicer had made the related Advance(s) and/or Servicing Advance(s).
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Notwithstanding the foregoing, no Person shall be entitled to reimbursement
from funds held in the Collection Account for future distribution to
Certificateholders pursuant to the provisions of Section 4.01. Neither the
Trustee nor FSA shall have any duty or liability with respect to the
calculation of any Reimbursement Amount and shall be entitled to rely without
independent investigation on the Advance Facility Notice and on such
Servicer's report of the amount of Advance Reimbursement Amounts and Servicing
Advance Reimbursement Amounts that were included in the remittance from such
Servicer to the Trustee pursuant to Section 3.09(a)(viii) or (ix). Such
Servicer shall maintain and provide to any successor Servicer and (upon
request) to FSA a detailed accounting on a loan-by-loan basis as to amounts
advanced by, pledged or assigned to, and reimbursed to any Advancing Person.
The successor Servicer shall be entitled to rely on any such information
provided by the predecessor Servicer, and the successor Servicer shall not be
liable for any errors in such information.
(d) An Advancing Person who receives an assignment or pledge of the
rights to be reimbursed for Advances and/or Servicing Advances, and/or whose
obligations hereunder are limited to the funding of Advances and/or Servicing
Advances shall not be required to meet the criteria for qualification of a
Sub-Servicer set forth in Section 3.02 hereof.
(e) With respect to any Advance Facility pursuant to which the Servicer
has made the election set forth in Section 3.22(a), the documentation
establishing any Advance Facility shall require that Reimbursement Amounts
distributed with respect to each Mortgage Loan be allocated to outstanding
unreimbursed Advances or Servicing Advances (as the case may be) made with
respect to that Mortgage Loan on a "first-in, first-out" (FIFO) basis. Such
documentation shall also require each electing Servicer to provide to the
related Advancing Person or Advance Facility Trustee loan-by-loan information
with respect to each Reimbursement Amount distributed by the Trustee to such
Advancing Person or Advance Facility Trustee on each Distribution Date, to
enable the Advancing Person or Advance Facility Trustee to make the FIFO
allocation of each Reimbursement Amount with respect to each Mortgage Loan.
Each Servicer shall remain entitled to be reimbursed by the Advancing Person
or Advance Facility Trustee for all Advances and Servicing Advances funded by
such Servicer to the extent the related rights to be reimbursed therefor have
not been assigned or pledged to an Advancing Person.
(f) Notwithstanding anything to the contrary in this Agreement, FSA is
not and shall not be responsible to track or monitor Reimbursement Amounts or
any Advance Facility, and is not and shall not be obligated to make any
payment with respect to any Reimbursement Amount. Each Servicer who enters
into an Advance Facility shall indemnify FSA, the Trustee, the Trust and any
successor Servicer, as applicable, from and against any claims, losses,
liabilities or damages resulting from any claim by the related Advancing
Person, except to the extent that such claim, loss, liability or damage
resulted from or arose out of negligence, recklessness or willful misconduct
on the part of the FSA, the Trustee or the successor Servicer, or failure by
the successor Servicer or the Trustee to remit funds as required by this
Agreement or the commission of an act or omission to act by the successor
Servicer or the Trustee, and the passage of any applicable cure or grace
period, such that an Event of Default under this Agreement occurs or such
entity is subject to termination for cause under this Agreement.
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(g) Notwithstanding anything to the contrary in this Section 3.22, a
Servicer shall consult with FSA in determining the manner in which any Advance
Facility shall affect a successor Servicer before such Servicer shall enter
into an Advance Facility. Any amendment to this Section 3.22 or to any other
provision of this Agreement that may be necessary or appropriate to effect the
terms of an Advance Facility as described generally in this Section 3.22,
including amendments to add provisions relating to a successor Servicer, may
be entered into by the Trustee, the Seller and such Servicer without the
consent of any Certificateholder, but only with the consent of FSA,
notwithstanding anything to the contrary in Section 11.01 of or elsewhere in
this Agreement.
SECTION 3.23 Fairbanks Servicing Performance Evaluations.
-------------------------------------------
Within 60 days after a Servicer Evaluation Trigger Date, the Trustee
shall select and engage a nationally recognized independent auditor, approved
in writing by the Rating Agencies, unless such Rating Agencies specifically
waive such approval right (provided, however, that if the Trustee does not
receive the written approval of any Rating Agency within 20 days of selecting
an independent auditor, such Rating Agency will be deemed to have approved of
such auditor), to evaluate the performance of Fairbanks. Such engagement by
the Trustee shall require the auditor to select a statistical sample of
Delinquent Fairbanks Serviced Loans (comprising a percentage (determined by
the independent auditor in its sole discretion, which percentage shall not
exceed 50%) of all Delinquent Fairbanks Serviced Loans by unpaid principal
balance as of the Servicer Evaluation Trigger Date) and to examine the
Fairbanks' servicing practices with respect to such Mortgage Loans (including,
without limitation, examining payment histories, documentation relating to
Fairbanks' contacts with the related Mortgagors and documents contained in the
related Servicing File) for the period of 24 months prior to such examination
or, with respect to an examination taking place within 24 months of the
Closing Date, the period beginning on the Closing Date and ending on the date
of such examination. Such engagement by the Trustee shall also require the
auditor to compare such servicing practices of Fairbanks with respect to the
selected Fairbanks Serviced Loans to the Performance Standards set forth on
Exhibit S hereto and to evaluate Fairbanks' compliance with the Performance
Standards. The evaluation process described above in this Section 3.23 is
referred to herein as a "Fairbanks Performance Evaluation" and is subject in
all respects to the approval of the Rating Agencies with such approval right
the option of each Rating Agency. In the engagement, the Trustee shall require
the auditor to deliver the results of its Fairbanks Performance Evaluation to
the Trustee and the Rating Agencies and the Trustee shall report such
Fairbanks Performance Evaluation results to Certificateholders in its monthly
statement, made pursuant to Section 4.04.
After receipt by the Certificateholders of the results of the Fairbanks
Performance Evaluation, if Holders of the Certificates entitled to 51% or more
of the Voting Rights request in writing to the Trustee to terminate Fairbanks
as Servicer under this Agreement, Fairbanks shall be removed as Servicer
pursuant to Section 7.01. If such a written request is made to the Trustee,
Fairbanks will be deemed to have "failed" the Fairbanks Performance Evaluation
and such failure will be deemed to be a failure of the Fairbanks Termination
Test.
At their option, each Rating Agency shall have the right to review all of
the information provided to the independent auditor in connection with a
Fairbanks Performance Evaluation so
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as to allow such Rating Agency to evaluate Fairbanks' compliance with the
Performance Standards.
Fairbanks shall cooperate with all reasonable requests of the Trustee,
the independent auditor and the Rating Agencies in connection with a Fairbanks
Performance Evaluation, including, without limitation, making available to the
auditor payment histories, documentation relating to the Fairbanks' contacts
with the related Mortgagors and documents contained in the related Mortgage
Loan Schedule. Fairbanks shall pay all costs and expenses of the independent
auditor or any Rating Agency (including the costs of any Rating Agency review
pursuant to the foregoing paragraph) associated with a Fairbanks Servicer
Performance Evaluation.
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ARTICLE IV
DISTRIBUTIONS AND
ADVANCES BY THE SERVICERS
SECTION 4.01 Advances by the Servicers.
-------------------------
Each Servicer shall deposit in the related Collection Account at the time
described below an amount equal to (i) with respect to the Mortgage Loans
other than the Simple Interest Mortgage Loans, all Scheduled Payments (with
interest at the Mortgage Rate less the Servicing Fee Rate and Credit Risk
Manager Fee Rate) which were due on the related Mortgage Loans during the
applicable Collection Period and (ii) with respect to the Simple Interest
Mortgage Loans, 30 days' interest on each such Mortgage Loan, less the
Servicing Fee, which were delinquent at the close of business on the
immediately preceding Determination Date; provided however, that with respect
to any Balloon Loan that is delinquent on its maturity date, a Servicer will
not be required to advance the related balloon payment but will be required to
continue to make advances in accordance with this Section 4.01 with respect to
such Balloon Loan in an amount equal to an assumed scheduled payment that
would otherwise be due based on the original amortization schedule for that
Mortgage Loan (with interest at the Mortgage Rate less the Servicing Fee
Rate). Each Servicer's obligation to make such Advances as to any related
Mortgage Loan will continue through the last Scheduled Payment due prior to
the payment in full of such Mortgage Loan, or the related Mortgaged Property
or related REO Property has been liquidated or until the purchase or
repurchase thereof (or substitution therefor) from the Trust Fund pursuant to
the terms of this Agreement. The Servicers shall not be required to advance
shortfalls of principal or interest resulting from the application of the
Relief Act.
Each Servicer shall be obligated to make Advances with respect to those
Mortgage Loans serviced by it in accordance with the provisions of this
Agreement; provided however, that such obligation with respect to any related
Mortgage Loan shall cease if the related Servicer determines, in its sole
discretion, that Advances with respect to such Mortgage Loan are
Nonrecoverable Advances. In the event that the related Servicer determines
that any such Advances are Nonrecoverable Advances, such Servicer shall
provide the Trustee with a certificate signed by a Servicing Officer
evidencing such determination.
If an Advance is required to be made hereunder, the related Servicer
shall on the applicable Servicer Remittance Date immediately following the
Determination Date either (i) deposit in the related Collection Account from
its own funds an amount equal to such Advance, (ii) cause to be made an
appropriate entry in the records of such Collection Account that funds in such
account being held for future distribution or withdrawal have been, as
permitted by this Section 4.01, used by such Servicer to make such Advance or
(iii) make Advances in the form of any combination of clauses (i) and (ii)
aggregating the amount of such Advance. Any such funds being held in a
Collection Account for future distribution and so used shall be replaced by
the related Servicer from its own funds by deposit in such Collection Account
on or before the next Distribution Date in which such funds would be due.
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SECTION 4.02 Priorities of Distribution.
--------------------------
(a) On each Distribution Date, the Trustee shall distribute the Interest
Remittance Amount for both Loan Groups for such date in the following order of
priority:
(i) from the Interest Remittance Amount for Loan Group 2 to the
Trustee, the Trustee Fee for such Distribution Date;
(ii) from the Interest Remittance Amount for Loan Group 2, to FSA,
the FSA Premium for such Distribution Date;
(iii) from the Interest Remittance Amount for Loan Group 2, to the
Credit Risk Manager, the Credit Risk Manager Fee for such Distribution
Date;
(iv) from the Interest Remittance Amount for Loan Group 1, first to
the Trustee, then to FSA and then to the Credit Risk Manager, any Trustee
Fee, FSA Premium and Credit Risk Manager Fee respectively, remaining
unpaid after giving effect to clauses (i), (ii) and (iii);
(v) from the Interest Remittance Amount for Loan Group 1 and Loan
Group 2, to the Senior Certificates, pro rata based on amounts due,
Current Interest and any Carryforward Interest for such Class and such
Distribution Date, applied in accordance with the allocation rules set
forth below;/1/
(vi) first, from the Interest Remittance Amount for Loan Group 2 and
then from the Interest Remittance Amount for Loan Group 1, to FSA, any
FSA Reimbursement Amount;
(vii) first, from the Interest Remittance Amount for Loan Group 2
and then from the from the Interest Remittance Amount for Loan Group 1,
to the Class M-1 Certificates, Current Interest and any Carryforward
Interest for such Class and such Distribution Date;
(viii) first, from the Interest Remittance Amount for Loan Group 2
and then from the Interest Remittance Amount for Loan Group 1, to the
Class M-2 Certificates, Current Interest and any Carryforward Interest
for such Class and such Distribution Date;
(ix) first, from the Interest Remittance Amount for Loan Group 2 and
then from the Interest Remittance Amount for Loan Group 1, to the Class
B-1 Certificates, Current Interest and any Carryforward Interest for such
Class and such Distribution Date;
(x) first, from the Interest Remittance Amount for Loan Group 2 and
then from the Interest Remittance Amount for Loan Group 1, to the Class
B-2 Certificates,
______________
/1/ Includes any amounts distributable to the Class X Certificates and
payable to the Class A-IO Certificates equal to the excess, if any, of
the Class A-IO Pass-Through Rate on its Notional Amount calculated under
the 30/360 Convention over such amounts calculated under the Actual/360
Convention (as such terms are defined in the Preliminary Statement).
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Current Interest and any Carryforward Interest for such Class and such
Distribution Date; and
(xi) for application as part of Monthly Excess Cashflow for such
Distribution Date, as provided in Section 4.02(e), any such Interest
Remittance Amount remaining after application pursuant to clauses (i)
through (x) above for such Distribution Date.
(b) The Interest Remittance Amount for Loan Group 1 and Loan Group 2
distributed pursuant to clause (v) above will be applied to the Senior
Certificates as follows:
(i) amounts distributed to the Class A-1 Certificates will reduce
the Interest Remittance Amount for Loan Group 1 before any reduction to
the Interest Remittance Amount for Loan Group 2 in respect of such
distribution; and
(ii) amounts distributed to the Class R, Class A-2, Class A-3, Class
A-4 and Class A-IO Certificates shall reduce the Interest Remittance
Amount for Loan Group 2 before any reduction to the Interest Remittance
Amount for Loan Group 1 in respect of such distributions.
(c) On each Distribution Date (1) prior to the Stepdown Date or (2) with
respect to which a Trigger Event has occurred, the Trustee shall distribute
the Principal Payment Amount for such date in the following order of priority:
(i)
(A) from the Principal Remittance Amount derived from Loan
Group 1, sequentially, first to (x) the Class A-1 Certificates and
then to (y) the Class A-2, Class A-3 and Class A-4 Certificates, pro
rata, until the respective Class Principal Balances thereof are
reduced to zero;
(B) from the Principal Remittance Amount derived from Loan
Group 2, sequentially, first to (x) the Class R Certificates, then
to (y) the Class A-2, Class A-3 and Class A-4 Certificates, pro
rata, and then to (z) the Class A-1 Certificates, until the
respective Class Principal Balance of such classes has been reduced
to zero;
(ii) to FSA, any FSA Reimbursement Amounts, to the extent not
otherwise paid pursuant to Section 4.02(a);
(iii) to the Class M-1 Certificates, until the Class Principal
Balance of such Class has been reduced to zero;
(iv) to the Class M-2 Certificates, until the Class Principal
Balance of such Class has been reduced to zero;
(v) to the Class B-1 Certificates, until the Class Principal Balance
of such Class has been reduced to zero;
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(vi) to the Class B-2 Certificates, until the Class Principal
Balance of such Class has been reduced to zero; and
(vii) for application as part of Monthly Excess Cashflow for such
Distribution Date, as provided in Section 4.02(e), any such Principal
Payment Amount remaining after application pursuant to clauses (i)
through (vi) above, for such Distribution Date.
(d) On each Distribution Date (1) on or after the Stepdown Date and (2)
with respect to which a Trigger Event has not occurred, the Principal Payment
Amount for such date will be paid in the following order of priority:
(i)
(A) from the Principal Remittance Amount derived from Loan
Group 1, first to (x) the Class A-1 Certificates and then to (y) the
Class A-2, Class A-3 and Class A-4 Certificates, pro rata, the Group
1 Allocation Amount, until the respective Class Principal Balances
thereof have been reduced to zero; and
(B) from the Principal Remittance Amount derived from Loan
Group 2, first to (x) the Class A-2, Class A-3 and Class A-4
Certificates, pro rata, and then to (y) the Class A-1 Certificates,
the Group 2 Allocation Amount, until the respective Class Principal
Balances thereof have been reduced to zero.
(ii) to FSA, any FSA Reimbursement Amounts, to the extent not
otherwise paid pursuant to Section 4.02(a) and Section 4.02(c);
(iii) to the Class M-1 Certificates, the M-1 Principal Payment
Amount for such Distribution Date, until the Class Principal Balance of
such Class has been reduced to zero;
(iv) to the Class M-2 Certificates, the M-2 Principal Payment Amount
for such Distribution Date, until the Class Principal Balance of such
Class has been reduced to zero;
(v) to the Class B-1 Certificates, the B-1 Principal Payment Amount
for such Distribution Date, until the Class Principal Balance of such
Class has been reduced to zero;
(vi) to the Class B-2 Certificates, the B-2 Principal Payment Amount
for such Distribution Date, until the Class Principal Balance of such
Class has been reduced to zero; and
(vii) for application as part of Monthly Excess Cashflow for such
Distribution Date, as provided in Section 4.02(e), any such Principal
Payment Amount remaining after application pursuant to clauses (i)
through (vi) above, for such Distribution Date.
(e) On each Distribution Date, the Trustee shall distribute the Monthly
Excess Cashflow for such date in the following order of priority:
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(i)
(A) except for the first Distribution Date, until the aggregate
Class Principal Balance of the Offered Certificates equals the
Aggregate Collateral Balance for such Distribution Date minus the
Targeted Overcollateralization Amount for such date, on each
Distribution Date (a) prior to the Stepdown Date or (b) with respect
to which a Trigger Event has occurred, to the extent of Monthly
Excess Interest for such Distribution Date, to the Offered
Certificates, in the following order of priority:
(aa) to the extent of the Monthly Excess Interest derived
from Loan Group 1, sequentially, first to (x) the Class
A-1 Certificates and then to (y) the Class A-2, Class A-3
and Class A-4 Certificates, pro rata, the Group 1 Excess
Interest Amount, until the respective Class Principal
Balances thereof have been reduced to zero;
(bb) sequentially, first to (x) the Class A-2, Class A-3
and Class A-4 Certificates, pro rata, and then to (y) the
Class A-1 Certificates, until the respective Class
Principal Balance has been reduced to zero;
(cc) to the Class M-1 Certificates, until the Class
Principal Balance of such Class has been reduced to zero;
(dd) to the Class M-2 Certificates, until the Class
Principal Balance of such Class has been reduced to zero;
and
(ee) to the Class B-1 Certificates, until the Class
Principal Balance of such Class has been reduced to zero;
(ff) to the Class B-2 Certificates, until the Class
Principal Balance of such Class has been reduced to zero;
and
(B) on each Distribution Date on or after the Stepdown Date and
with respect to which a Trigger Event has not occurred, to fund any
principal distributions required to be made on such Distribution
Date pursuant to Section 4.02(d), after giving effect to the
distribution of the Principal Payment Amount for such Distribution
Date, in accordance with the priorities set forth therein;
(ii) to FSA, any FSA Reimbursement Amounts, to the extent not
otherwise paid pursuant to Sections 4.02(a), 4.02(c) or 4.02(d);
(iii) to the Class M-1 Certificates, any Deferred Amount for such
Class, with interest thereon at the Pass-Through Rate;
(iv) to the Class M-2 Certificates, any Deferred Amount for such
Class, with interest thereon at the Pass-Through Rate;
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(v) to the Class B-1 Certificates, any Deferred Amount for such
Class, with interest thereon at the Pass-Through Rate;
(vi) to the Class B-2 Certificates, any Deferred Amount for such
Class, with interest thereon at the Pass-Through Rate;
(vii) except for the first Distribution Date, to the Class B-2
Certificates, until the Class Principal Balance of such class has been
reduced to zero;
(viii) to the Class A-1, Class A-2, Class A-3 and Class A-4
Certificates, pro rata, any applicable Basis Risk Shortfall for each such
Class;
(ix) to the Class M-1 Certificates, any applicable Basis Risk
Shortfall for such Class;
(x) to the Class M-2 Certificates, any applicable Basis Risk
Shortfall for such Class;
(xi) to the Class B-1 Certificates, any applicable Basis Risk
Shortfall for such Class;
(xii) to the Class B-2 Certificates, any applicable Basis Risk
Shortfall for such Class;
(xiii) to the Basis Risk Reserve Fund, the Required Basis Risk
Reserve Fund Deposit;
(xiv) to the Class X Certificates, the Class X Distributable Amount
for such Distribution Date together with amounts withdrawn from the Basis
Risk Reserve Fund for distribution to the Class X Certificates pursuant
to Section 4.06(b), (c) and (d); and
(xv) to the Class R Certificate, any remaining amount, provided,
however, that any amount that would be distributable pursuant to this
priority (xv) shall not be distributed to the Class R Certificate but
shall be distributed instead to the Class X Certificates pursuant to a
contract that exists under this Agreement between the Class R
Certificateholders and the Class X Certificateholders.
(f) On each Distribution Date, the Trustee shall distribute to the Holder
of the Class A-IO Certificates, the aggregate of all Prepayment Premiums for
Mortgage Loans collected or paid by each Servicer with respect to the
preceding Prepayment Period.
SECTION 4.03 Allocation of Losses.
--------------------
(a) On each Distribution Date, the Trustee shall determine the total of
the Applied Loss Amount, if any, for such Distribution Date. The Applied Loss
Amount for any Distribution Date shall be applied by reducing the Class
Principal Balance of each Class of Subordinate Certificates beginning with the
Class of Subordinate Certificates then outstanding with the lowest relative
payment priority, in each case until the respective Class Principal Balance
thereof is reduced to zero. Any Applied Loss Amount allocated to a Class of
Subordinate Certificates shall be allocated among the Subordinate Certificates
of such Class in proportion to their respective Percentage Interests.
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SECTION 4.04 Monthly Statements to Certificateholders.
----------------------------------------
(a) Not later than each Distribution Date, the Trustee shall prepare and
cause to be forwarded by first class mail to each Certificateholder, each
Servicer, the Depositor and each Rating Agency, a statement based on the
information provided by each Servicer setting forth with respect to the
related distribution:
(i) the amount thereof allocable to principal, indicating the
portion thereof attributable to Scheduled Payments and Principal
Prepayments;
(ii) the amount thereof allocable to interest or any Carryforward
Interest included in such distribution;
(iii) if the distribution to the Holders of such Class of
Certificates is less than the full amount that would be distributable to
such Holders if there were sufficient funds available therefor, the
amount of the shortfall and the allocation thereof as between principal
and interest;
(iv) the Class Principal Balance of each Class of Certificates after
giving effect to the distribution of principal on such Distribution Date;
(v) the Aggregate Collateral Balance and the Aggregate Loan Group
Collateral Balance for such Distribution Date;
(vi) the Overcollateralization Amount for such Distribution Date;
(vii) the amount of the Servicing Fees, the Trustee Fee, the Credit
Risk Manager Fee and the FSA Premium and any other mortgage insurance
fees, if applicable, with respect to such Distribution Date;
(viii) the Pass-Through Rate for each Class of LIBOR Certificates
with respect to such Distribution Date and the Pass-Through Rate for the
Class A-IO Certificates;
(ix) the amount of Advances included in the distribution on such
Distribution Date and the aggregate amount of Advances outstanding as of
the last day of the calendar month preceding such Distribution Date;
(x) the number and aggregate principal amounts of Mortgage Loans
which are delinquent (1) 30 to 59 days, (2) 60 to 89 days and (3) 90 or
more days (to include such delinquent loans which are also in bankruptcy
or foreclosure), for each Loan Group and for the Mortgage Loans in the
aggregate, as of the close of business on the last day of the calendar
month preceding such Distribution Date;
(xi) the number and aggregate principal amounts of Mortgage Loans
that were in foreclosure, for each Loan Group and for the Mortgage Loans
in the aggregate, as of the close of business on the last day of the
calendar month preceding such Distribution Date;
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(xii) the number and aggregate principal amounts of Mortgage Loans
that were in bankruptcy, for each Loan Group and for the Mortgage Loans
in the aggregate, as of the close of business on the last day of the
calendar month preceding such Distribution Date;
(xiii) the number and aggregate principal amounts of Mortgage Loans
with respect to which Prepayment Premiums were collected and the
aggregate amount of such Prepayment Premiums;
(xiv) the Rolling Three Month Delinquency Rate for such Distribution
Date;
(xv) the total number and principal balance of any REO Properties
(and market value, if available), for each Loan Group and for the
Mortgage Loans in the aggregate, as of the last day of the calendar month
preceding such Distribution Date;
(xvi) the total number and principal balance of any Mortgage Loans
that were repurchased during the calendar month preceding such
Distribution Date;
(xvii) the aggregate amount of Realized Losses incurred during the
preceding calendar month and aggregate Realized Losses included in such
distribution;
(xviii) the amount on deposit in the Prefunding Account (including a
breakdown of amounts released during the prior calendar month in respect
of Aggregate Subsequent Transfer Amounts or amounts included in the
Principal Remittance Amount on the August 2002 Distribution Date);
(xix) the weighted average term to maturity of the Mortgage Loans as
of the close of business on the last day of the calendar month preceding
such Distribution Date;
(xx) the portion of any distribution to the Class A
Certificateholders constituting an Insured Payment for such Distribution
Date;
(xxi) the amount on deposit in the Capitalized Interest Account
(including a breakdown of amounts released for the calendar month
preceding such Distribution Date);
(xxii) the gross weighted average coupon of the Mortgage Loans as of
the first date of the applicable period for such Distribution Date;
(xxiii) the aggregate number of Mortgage Loans in the pool;
(xxiv) the Net WAC Rate;
(xxv) the Senior Enhancement Percentage;
(xxvi) the Net Excess Spread; and
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(xxvii) any amounts deposited in the Basis Risk Reserve Fund on such
Distribution Date pursuant to Section 4.02(e)(xiii), and the balance of
the Basis Risk Reserve Fund after all distributions have been made on
such Distribution Date.
The Trustee's responsibility for disbursing the above information to the
Certificateholders is limited to the availability, timeliness and accuracy of
the information derived from each Servicer.
On each Distribution Date, the Trustee shall provide Bloomberg Financial
Markets, L.P. ("Bloomberg") CUSIP Level Factors for each Class of Offered
Certificates as of such Distribution Date, using a format and media mutually
acceptable to the Trustee and Bloomberg. In connection with providing the
information specified in this Section 4.04 to Bloomberg, the Trustee and any
director, officer, employee or agent of the Trustee shall be indemnified and
held harmless by DLJMC, to the extent, in the manner and subject to the
limitations provided in Section 8.05. The Trustee will also make the monthly
statements to Certificateholders available each month to each party referred
to in this Section 4.04(a) via the Trustee's website. The Trustee's website
can be accessed at xxxx://xxx.xxxxxx.xxx/xxx or at such other site as the
Trustee may designate from time to time. The Trustee may fully rely upon and
shall have no liability with respect to information provided by each Servicer.
(b) Upon request, within a reasonable period of time after the end of
each calendar year, the Trustee shall cause to be furnished to each Person who
at any time during the calendar year was a Certificateholder, a statement
containing the information set forth in clauses (a)(i), (a)(ii) and (a)(vii)
of this Section 4.04 aggregated for such calendar year or applicable portion
thereof during which such Person was a Certificateholder. Such obligation of
the Trustee shall be deemed to have been satisfied to the extent that
substantially comparable information shall be provided by the Trustee pursuant
to any requirements of the Code as from time to time in effect.
SECTION 4.05 Servicers to Cooperate.
----------------------
Each Servicer shall provide to the Trustee information which is mutually
agreeable to the Trustee and the related Servicer with respect to each
Mortgage Loan serviced by a Servicer no later than the second Business Day
following the Determination Date necessary to enable the Trustee to perform
its distribution, accounting and reporting requirements hereunder.
SECTION 4.06 Basis Risk Reserve Fund.
-----------------------
(a) On the Closing Date, the Trustee shall establish and maintain in its
name, in trust for the benefit of the Holders of the Certificates, the Basis
Risk Reserve Fund. The Basis Risk Reserve Fund shall be an Eligible Account,
and funds on deposit therein shall be held separate and apart from, and shall
not be commingled with, any other moneys, including without limitation, other
moneys held by the Trustee pursuant to this Agreement.
(b) On the Closing Date, $5,000.00 will be deposited by the Depositor
into the Basis Risk Reserve Fund. On each Distribution Date, the Trustee shall
transfer from the Certificate Account to the Basis Risk Reserve Fund pursuant
to Section 4.02(e)(xiii) the Required Basis Risk Reserve Fund Deposit. Amounts
on deposit in the Basis Risk Reserve Fund can be withdrawn by the Trustee in
connection with any Distribution Date to fund the amounts required to be
distributed
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to holders of the Offered Certificates pursuant to Sections 4.02(e)(viii).
through (xii) to the extent Monthly Excess Cashflow on such date is
insufficient to make such payments. In addition, any distributions of Monthly
Excess Cashflow to the holders of the Offered Certificates pursuant to
Sections 4.02(e)(viii) through (xii) shall be deemed to have been deposited in
the Basis Risk Reserve Fund and paid to such holders. On any Distribution
Date, any amounts on deposit in the Basis Risk Reserve Fund in excess of the
Required Basis Risk Reserve Fund Amount shall be distributed to the Class X
Certificateholder pursuant to Section 4.02(e)(xiv).
(c) Funds in the Basis Risk Reserve Fund may be invested in Eligible
Investments by the Trustee at the direction of the holders of the Class X
Certificates maturing on or prior to the next succeeding Distribution Date.
Any net investment earnings on such amounts shall be payable to the holders of
the Class X Certificates. The Trustee shall account for the Basis Risk Reserve
Fund as an outside reserve fund within the meaning of Treasury regulation
1.860G-2(h) and not an asset of any REMIC created pursuant to this Agreement.
The Class X Certificates shall evidence ownership of the Basis Risk Reserve
Fund for federal tax purposes and the Holders thereof shall direct the Trustee
in writing as to the investment of amounts therein. The Trustee shall treat
amounts transferred by the Master REMIC to the Basis Risk Reserve Fund as
distributions to the Class X Certificateholder for all Federal tax purposes.
In the absence of such written direction, all funds in the Basis Risk Reserve
Fund shall remain uninvested. The Trustee shall have no liability for losses
on investments in Eligible Investments made pursuant to this Section 4.06(c)
(other than as obligor on any such investments). Upon termination of the Trust
Fund, any amounts remaining in the Basis Risk Reserve Fund shall be
distributed to the Holders of the Class X Certificates in the same manner as
if distributed pursuant to Section 4.02(e)(xiv). hereof.
(d) On the Distribution Date immediately after the Distribution Date on
which the aggregate Class Principal Balance of the LIBOR Certificates equals
zero, any amounts on deposit in the Basis Risk Reserve Fund not payable on the
LIBOR Certificates shall be deposited into the Certificate Account and
distributed to the Holders of the Class X Certificates in the same manner as
if distributed pursuant to Section 4.02(e)(xiv). hereof.
SECTION 4.07 Policy Matters.
--------------
(a) As soon as possible, and in no event later than 11:00 a.m., New York
time, on the second Business Day immediately preceding each Distribution Date,
the Trustee shall determine the amount of funds available for such
Distribution Date minus the amount of any FSA Premium and any fee to paid to
the Trustee on such Distribution Date.
(b) If for any Distribution Date, the Trustee determines that the funds
that will be available for such Distribution Date distributable to the Holders
of the Class A-1, Class A-2, Class A-3 or Class A-4 Certificates pursuant to
Section 4.01 will be insufficient to pay the related Guaranteed Distributions
on such Distribution Date, the Trustee shall determine the amount of any such
deficiency and shall give notice to FSA and the Fiscal Agent (as defined in
the FSA Policy), if any, by telephone or telecopy of the amount of such
deficiency, confirmed in writing by notice substantially in the form of
Exhibit A to the FSA Policy by 12:00 noon, New York City time, on such second
Business Day. The Trustee's responsibility for delivering the notice to FSA,
as provided in the preceding sentence is limited to the availability,
timeliness and
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accuracy of the information provided by each Servicer. The Notice shall
constitute a claim for payment pursuant to the FSA Policy.
(c) The Trustee shall receive as attorney-in-fact of each Holder of a
Class A-1, Class A-2, Class A-3 or Class A-4 Certificate, any Guaranteed
Distributions from FSA and disburse the same to each Holder of a Class A-1,
Class A-2, Class A-3 or Class A-4 Certificate in accordance with the
provisions of this Article IV. Guaranteed Distributions disbursed by the
Trustee from proceeds of the FSA Policy shall not be considered payment by the
Trust nor shall such payments discharge the obligation of the Trust with
respect to such Class A-1, Class A-2, Class A-3 or Class A-4 Certificate, and
FSA shall become the owner of such unpaid amounts due from the Trust in
respect of such Guaranteed Distributions as the deemed assignee of such Holder
and shall be entitled to receive the FSA Reimbursement Amount pursuant to
Section 4.01. The Trustee hereby agrees on behalf of each Holder of a Class
A-1, Class A-2, Class A-3 or Class A-4 Certificate for the benefit of FSA that
it and they recognize that to the extent that FSA makes Guaranteed
Distributions, either directly or indirectly (as by paying through the
Trustee), to the Class A-1, Class A-2, Class A-3 or Class A-4
Certificateholders, FSA will be entitled to receive the FSA Reimbursement
Amount pursuant to Section 4.01.
(d) It is understood and agreed that the intention of the parties is that
FSA shall not be entitled to reimbursement on any Distribution Date for
amounts previously paid by it unless on such Distribution Date the Holders of
the Class A-1, Class A-2, Class A-3 and Class A-4 Certificates shall also have
received the full amount of the Guaranteed Distributions for such Distribution
Date.
(e) In the event the Trustee receives a certified copy of an order of the
appropriate court that any payment of principal or interest on a Class X-0,
Xxxxx X-0, Class A-3 or Class A-4 Certificate has been voided in whole or in
part as a preference payment under applicable bankruptcy law, the Trustee
shall (i) promptly notify FSA and the Fiscal Agent, if any, and (ii) comply
with the provisions of the FSA Policy to obtain payment by FSA of such voided
payment. In addition, the Trustee shall mail notice to all Holders of the
Class A-1, Class A-2, Class A-3 and Class A-4 Certificates so affected that,
in the event that any such Holder's scheduled payment is so recovered, such
Holder will be entitled to payment pursuant to the terms of the FSA Policy a
copy of which shall be made available to such Holders by the Trustee. The
Trustee shall furnish to FSA and the Fiscal Agent, if any, its records listing
the payments on the affected Class X-0, Xxxxx X-0, Class A-3 and Class A-4
Certificates, if any, that have been made by the Trustee and subsequently
recovered from the affected Holders, and the dates on which such payments were
made by the Trustee.
(f) At the time of the execution hereof, and for the purposes hereof, the
Trustee shall establish a separate special purpose trust account in the name
of the Trustee for the benefit of Holders of the Class A-1, Class A-2, Class
A-3 and Class A-4 Certificates (the "FSA Account") over which the Trustee
shall have exclusive control and sole right of withdrawal. The FSA Account
shall be an Eligible Account. The Trustee shall deposit any amount paid under
the FSA Policy into the FSA Account and distribute such amount only for the
purposes of making the payments to Holders of the Class A-1, Class A-2, Class
A-3 and Class A-4 Certificates in respect of the Guaranteed Distributions for
which the related claim was made under the FSA Policy. Such amounts shall be
allocated by the Trustee to Holders of Class A-1, Class A-2, Class A-3
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and Class A-4 Certificates affected by such shortfalls in the same manner as
principal and interest payments are to be allocated with respect to such
Certificates pursuant to Section 4.01. It shall not be necessary for such
payments to be made by checks or wire transfers separated from the checks or
wire transfers used to make regular payments hereunder with funds withdrawn
from the Certificate Account. However, any payments made on the Class A-1,
Class A-2, Class A-3 and Class A-4 Certificates from funds in the FSA Account
shall be noted as provided in subsection (h) below. Funds held in the FSA
Account shall not be invested by the Trustee.
(g) Any funds received from FSA for deposit into the FSA Account pursuant
to the FSA Policy in respect of a Distribution Date or otherwise as a result
of any claim under the FSA Policy shall be applied by the Trustee directly to
the payment in full (i) of the Guaranteed Distributions due on such
Distribution Date on the Class A-1, Class A-2, Class A-3 and Class A-4
Certificates, or (ii) of other amounts payable under the FSA Policy. Funds
received by the Trustee as a result of any claim under the FSA Policy shall be
used solely for payment to the Holders of the Class A-1, Class A-2, Class A-3
and Class A-4 Certificates and may not be applied for any other purpose,
including, without limitation, satisfaction of any costs, expenses or
liabilities of the Trustee, any Servicer or the Trust Fund. Any funds (other
than funds deposited therein in respect of a Preference Amount payable under
the FSA Policy) remaining in the FSA Account on the first Business Day after
each Distribution Date shall be remitted promptly to FSA pursuant to the
written instruction of FSA.
(h) The Trustee shall keep complete and accurate records in respect of
(i) all funds remitted to it by FSA and deposited into the FSA Account and
(ii) the allocation of such funds to payments of interest on and principal in
respect of any Class A-1, Class A-2, Class A-3 or Class A-4 Certificates. FSA
shall have the right to inspect such records at reasonable times during normal
business hours upon three Business Days' prior notice to the Trustee.
(i) The Trustee acknowledges, and each Holder of a Class A-1, Class A-2,
Class A-3 or Class A-4 Certificate by its acceptance of the Class A-1, Class
A-2, Class A-3 or Class A-4 Certificate agrees, that, without the need for any
further action on the part of FSA or the Trustee, to the extent FSA makes
payments, directly or indirectly, on account of principal of or interest on
any Class X-0, Xxxxx X-0, Class A-3 or Class A-4 Certificates, FSA will be
fully subrogated to the rights of the Holders of such Class A-1, Class A-2,
Class A-3 or Class A-4 Certificates to receive such principal and interest
from the Trust Fund. The Holders of the Class A-1, Class A-2, Class A-3 or
Class A-4 Certificates, by acceptance of the Class A-1, Class A-2, Class A-3
or Class A-4 Certificates, assign their rights as Holders of the Class A-1,
Class A-2, Class A-3 or Class A-4 Certificates to the extent of FSA's interest
with respect to amounts paid under the Certificate Insurance Policy. Anything
herein to the contrary notwithstanding, solely for purposes of determining
FSA's rights, as applicable, as subrogee for payments distributable pursuant
to Section 4.01, any payment with respect to distributions to the Class A-1,
Class A-2, Class A-3 or Class A-4 Certificates which is made with funds
received pursuant to the terms of the FSA Policy, shall not be considered
payment of the Class A-1, Class A-2, Class A-3 or Class A-4 Certificates from
the Trust Fund and shall not result in the distribution or the provision for
the distribution in reduction of the Class Principal Balance of the Class A-1,
Class A-2, Class A-3 or Class A-4 Certificates except to the extent such
payment has been reimbursed to FSA pursuant to the terms hereof.
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(j) Upon a Responsible Officer of the Trustee becoming aware of the
occurrence of an Event of Default, the Trustee shall promptly notify FSA of
such Event of Default.
(k) The Trustee shall promptly notify FSA of either of the following as
to which a Responsible Officer of the Trustee has actual knowledge: (A) the
commencement of any proceeding by or against the Depositor commenced under the
United States bankruptcy code or any other applicable bankruptcy, insolvency,
receivership, rehabilitation or similar law (an "Insolvency Proceeding") and
(B) the making of any claim in connection with any Insolvency Proceeding
seeking the avoidance as a preferential transfer (a "Preference Claim") of any
distribution made with respect to the Class A-1, Class A-2, Class A-3 or Class
A-4 Certificates as to which it has actual knowledge. Each Holder of a Class
A-1, Class A-2, Class A-3 or Class A-4 Certificate, by its purchase of Class
A-1, Class A-2, Class A-3 or Class A-4 Certificates, and the Trustee hereby
agrees that FSA (so long as no FSA Default exists) may at any time during the
continuation of any proceeding relating to a Preference Claim direct all
matters relating to such Preference Claim, including, without limitation, (i)
the direction of any appeal of any order relating to any Preference Claim and
(ii) the posting of any surety, supersedeas or performance bond pending any
such appeal. In addition and without limitation of the foregoing, FSA shall be
subrogated to the rights of the Trustee and each Holder of a Class A-1, Class
A-2, Class A-3 or Class A-4 Certificate in the conduct of any Preference
Claim, including, without limitation, all rights of any party to an adversary
proceeding action with respect to any court order issued in connection with
any such Preference Claim.
(l) Each Servicer shall designate at least one FSA Contact Person who
shall be available to FSA to provide reasonable access to information
regarding the Mortgage Loans. The initial FSA Contact Persons are the
Servicing Officers.
(m) The Trustee shall surrender the FSA Policy to FSA for cancellation
upon the reduction of the Class Principal Balance of the Class A-1, Class A-2,
Class A-3 and Class A-4 Certificates to zero.
(n) All notices, statements, reports, certificates or opinions required
by this Agreement to be sent to the Trustee, the Rating Agencies or the
Holders of the Class A-1, Class A-2, Class A-3 and Class A-4 Certificates
(including without limitation the reports prepared pursuant to Sections 3.17
and 3.18 and the statements prepared pursuant to Section 4.04) shall also be
sent, at the same time such reports are otherwise sent, to FSA at FSA Security
Assurance Inc., 000 Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000.
(o) For so long as there is no continuing default by FSA under its
obligations under the FSA Policy (an "FSA Default"), each Holder of a Class
A-1, Class A-2, Class A-3 or Class A-4 Certificate agrees that FSA shall be
treated by the Depositor, each Seller, each Servicer and the Trustee as if FSA
were the Holder of all of the Class A-1, Class A-2, Class A-3 and Class A-4
Certificates for the purpose (and solely for the purpose) of the giving of any
consent, the making of any direction or the exercise of any voting or other
control rights otherwise given to the Holders of the Class A-1, Class A-2,
Class A-3 and Class A-4 Certificates hereunder and the holders of the Class
A-1, Class A-2, Class A-3 and Class A-4 Certificates shall only exercise such
rights with the prior written consent of FSA.
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(p) With respect to this Section 4.07, (i) the terms "Receipt" and
"Received" shall mean actual delivery to FSA and its Fiscal Agent, if any,
prior to 12:00 noon, New York City time, on a Business Day; delivery either on
a day that is not a Business Day or after 12:00 noon, New York City time,
shall be deemed to be Receipt on the next succeeding Business Day and (ii)
"Business Day" means any day other than (A) a Saturday or Sunday or (B) a day
on which FSA or banking institutions in the City of New York, New York, or the
city in which the Corporate Trust Office of the Trustee is located, are
authorized or obligated by law or executive order to be closed. If any notice
or certificate given under the FSA Policy by the Trustee is not in proper form
or is not properly completed, executed or delivered, it shall be deemed not to
have been Received. FSA or its Fiscal Agent, if any, shall promptly so advise
the Trustee and the Trustee may submit an amended notice.
(q) FSA shall be an express third party beneficiary of this Agreement for
the purpose of enforcing the provisions hereof to the extent of FSA's rights
explicitly specified herein as if a party hereto.
(r) All references herein to the ratings assigned to the Certificates and
to the interests of any Certificateholders shall be without regard to the FSA
Policy.
(s) The Trustee and each Servicer shall cooperate with any reasonable
request by FSA to preserve or enforce the rights granted to FSA hereunder.
(t) Any amendment to this Agreement shall require the prior written
consent of FSA if such amendment adversely affects in any respect the rights
or interests of FSA or of the Class A-1, Class A-2, Class A-3 and Class A-4
Certificateholders (without regard to the FSA Policy).
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ARTICLE V
THE CERTIFICATES
SECTION 5.01 The Certificates.
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The Certificates shall be substantially in the forms attached hereto as
exhibits. The Certificates shall be issuable in registered form, in the
minimum denominations, integral multiples in excess thereof (except that one
Certificate in each Class may be issued in a different amount which must be in
excess of the applicable minimum denomination) and aggregate denominations per
Class set forth in the Preliminary Statement.
Subject to Section 9.02 respecting the final distribution on the
Certificates, on each Distribution Date the Trustee shall make distributions
to each Certificateholder of record on the preceding Record Date either (x) by
wire transfer in immediately available funds to the account of such holder at
a bank or other entity having appropriate facilities therefor, if (i) such
Holder has so notified the Trustee at least five Business Days prior to the
related Record Date and (ii) such Holder shall hold (A) a Notional Amount
Certificate, (B) 100% of the Class Principal Balance of any Class of
Certificates or (C) Certificates of any Class with aggregate principal
Denominations of not less than $1,000,000 or (y) by check mailed by first
class mail to such Certificateholder at the address of such holder appearing
in the Certificate Register.
The Certificates shall be executed by manual or facsimile signature on
behalf of the Trustee by a Responsible Officer upon the written order of the
Depositor. Certificates bearing the manual or facsimile signatures of
individuals who were, at the time such signatures were affixed, authorized to
sign on behalf of the Trustee shall bind the Trustee, notwithstanding that
such individuals or any of them have ceased to be so authorized prior to the
authentication and delivery of any such Certificates or did not hold such
offices at the date of such Certificate. No Certificate shall be entitled to
any benefit under this Agreement, or be valid for any purpose, unless there
appears on such certificate a Certificate of Authentication in the form
provided herein, executed by the Trustee by manual signature, and such
authentication upon any Certificate shall be conclusive evidence, and the only
evidence, that such Certificate has been duly executed and delivered
hereunder. All Certificates shall be dated the date of their countersignature.
On the Closing Date, the Trustee shall authenticate the Certificates to be
issued at the written direction of the Depositor, or any affiliate thereof.
The Depositor shall provide, or cause to be provided, to the Trustee on a
continuous basis, an adequate inventory of Certificates to facilitate
transfers.
SECTION 5.02 Certificate Register; Registration of Transfer and
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Exchange of Certificates.
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(a) The Trustee shall maintain, or cause to be maintained in accordance
with the provisions of Section 5.06, a Certificate Register for the Trust Fund
in which, subject to the provisions of subsections (b) and (c) below and to
such reasonable regulations as it may prescribe, the Trustee shall provide for
the registration of Certificates and of transfers and exchanges of
Certificates as herein provided. Upon surrender for registration of transfer
of any
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Certificate, the Trustee shall execute and deliver, in the name of the
designated transferee or transferees, one or more new Certificates of the same
Class and aggregate Percentage Interest.
At the option of a Certificateholder, Certificates may be exchanged for
other Certificates of the same Class in authorized denominations and
evidencing the same aggregate Percentage Interest upon surrender of the
Certificates to be exchanged at the office or agency of the Trustee. Whenever
any Certificates are so surrendered for exchange, the Trustee shall execute,
authenticate, and deliver the Certificates which the Certificateholder making
the exchange is entitled to receive. Every Certificate presented or
surrendered for registration of transfer or exchange shall be accompanied by a
written instrument of transfer in form satisfactory to the Trustee duly
executed by the holder thereof or his attorney duly authorized in writing.
No service charge to the Certificateholders shall be made for any
registration of transfer or exchange of Certificates, but payment of a sum
sufficient to cover any tax or governmental charge that may be imposed in
connection with any transfer or exchange of Certificates may be required.
All Certificates surrendered for registration of transfer or exchange
shall be cancelled and subsequently disposed of by the Trustee in accordance
with the Trustee's customary procedures.
(b) No transfer of a Private Certificate shall be made unless such
transfer is made pursuant to an effective registration statement under the
Securities Act and any applicable state securities laws or is exempt from the
registration requirements under said Act and such state securities laws.
Except in connection with any transfer of a Private Certificate by the
Depositor to any affiliate, in the event that a transfer is to be made in
reliance upon an exemption from the Securities Act and such laws, in order to
assure compliance with the Securities Act and such laws, the Certificateholder
desiring to effect such transfer and such Certificateholder's prospective
transferee shall each certify to the Trustee in writing the facts surrounding
the transfer in substantially the form set forth in Exhibit J (the "Transferor
Certificate") and (i) deliver a letter in substantially the form of either
Exhibit K (the "Investment Letter") or Exhibit L (the "Rule 144A Letter") or
(ii) there shall be delivered to the Trustee at the expense of the transferor
an Opinion of Counsel that such transfer may be made pursuant to an exemption
from the Securities Act. The Depositor shall provide to any Holder of a
Private Certificate and any prospective transferee designated by any such
Holder, information regarding the related Certificates and the Mortgage Loans
and such other information as shall be necessary to satisfy the condition to
eligibility set forth in Rule 144A(d)(4) for transfer of any such Certificate
without registration thereof under the Securities Act pursuant to the
registration exemption provided by Rule 144A. The Trustee shall cooperate with
the Depositor in providing the Rule 144A information referenced in the
preceding sentence, including providing to the Depositor such information
regarding the Certificates, the Mortgage Loans and other matters regarding the
Trust Fund as the Depositor shall reasonably request to meet its obligation
under the preceding sentence. Each Holder of a Private Certificate desiring to
effect such transfer shall, and does hereby agree to, indemnify the Trustee,
the Depositor, the Seller, each Servicer and the Special Servicer against any
liability that may result if the transfer is not so exempt or is not made in
accordance with such federal and state laws.
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No transfer of an ERISA-Restricted Certificate shall be made unless the
Trustee shall have received either (i) a representation letter from the
transferee substantially in the form of Exhibit K or L, in the case of a
Private Certificate, or Exhibit I, in the case of a Residual Certificate, to
the effect that (a) such transferee is not an employee benefit plan or
arrangement subject to Section 406 of ERISA or a plan subject to Section 4975
of the Code, nor a person acting on behalf of any such plan or arrangement or
using the assets of any such plan or arrangement to effect such transfer or
(b) if the ERISA-Restricted Certificate has been the subject of an
ERISA-Qualifying Underwriting, it is being purchased by an "insurance company
general account" (as defined in Section V(e) of Prohibited Transaction Class
Exemption ("PTCE") 95-60), and the acquisition and holding of the
ERISA-Restricted Certificate satisfy the requirements for exemptive relief
under Sections I and III of PTCE 95-60; or (ii) in the case of any such
ERISA-Restricted Certificate presented for registration in the name of an
employee benefit plan subject to ERISA, or a plan or arrangement subject to
Section 4975 of the Code (or comparable provisions of any subsequent
enactments), or a trustee of any such plan or any other person acting on
behalf of any such plan or arrangement or using such plan's or arrangement's
assets, an Opinion of Counsel satisfactory to the Trustee, which Opinion of
Counsel shall not be an expense of either the Trustee or the Trust Fund,
addressed to the Trustee, to the effect that the purchase or holding of such
ERISA-Restricted Certificate will not result in a prohibited transaction under
Section 406 of ERISA or Section 4975 of the Code, will not result in the
assets of the Trust Fund being deemed to be "plan assets" and subject to the
prohibited transaction provisions of ERISA and the Code and will not subject
the Trustee, the Servicers or the Special Servicer to any obligation in
addition to those expressly undertaken in this Agreement or to any liability.
The transferee of an ERISA-Restricted Certificate that is a Book-Entry
Certificate, by its acceptance of the Book-Entry Certificate, will be deemed
to make the representation in clauses (a) or (b) above. In the event that a
representation is violated, or any transfer to a plan or person acting on
behalf of a plan or using a plan's assets is attempted without the delivery to
the Trustee of the Opinion of Counsel described above, the attempted transfer
or acquisition shall be void and of no effect.
To the extent permitted under applicable law (including, but not limited
to, ERISA), the Trustee shall be under no liability to any Person for any
registration of transfer of any ERISA-Restricted Certificate that is in fact
not permitted by this Section 5.02(b) or for making any payments due on such
Certificate to the Holder thereof or taking any other action with respect to
such Holder under the provisions of this Agreement so long as the transfer was
registered by the Trustee in accordance with the foregoing requirements.
(c) Each Person who has or who acquires any Ownership Interest in a
Residual Certificate shall be deemed by the acceptance or acquisition of such
Ownership Interest to have agreed to be bound by the following provisions, and
the rights of each Person acquiring any Ownership Interest in a Residual
Certificate are expressly subject to the following provisions:
(i) Each Person holding or acquiring any Ownership Interest in a
Residual Certificate shall be a Permitted Transferee and shall promptly
notify the Trustee of any change or impending change in its status as a
Permitted Transferee.
(ii) No Ownership Interest in a Residual Certificate may be
registered on the Closing Date or thereafter transferred, and the Trustee
shall not register the Transfer of
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any Residual Certificate unless, in addition to the certificates required
to be delivered to the Trustee under subparagraph (b) above, the Trustee
shall have been furnished with an affidavit (a "Transfer Affidavit") of
the initial owner or the proposed transferee in the form attached hereto
as Exhibit I.
(iii) Each Person holding or acquiring any Ownership Interest in a
Residual Certificate shall agree (A) to obtain a Transfer Affidavit from
any other Person to whom such Person attempts to Transfer its Ownership
Interest in a Residual Certificate, (B) to obtain a Transfer Affidavit
from any Person for whom such Person is acting as nominee, trustee or
agent in connection with any Transfer of a Residual Certificate and (C)
not to Transfer its Ownership Interest in a Residual Certificate or to
cause the Transfer of an Ownership Interest in a Residual Certificate to
any other Person if it has actual knowledge that such Person is not a
Permitted Transferee.
(iv) Any attempted or purported Transfer of any Ownership Interest
in a Residual Certificate in violation of the provisions of this Section
5.02(c) shall be absolutely null and void and shall vest no rights in the
purported Transferee. If any purported transferee shall become a Holder
of a Residual Certificate in violation of the provisions of this Section
5.02(c), then the last preceding Permitted Transferee shall be restored
to all rights as Holder thereof retroactive to the date of registration
of Transfer of such Residual Certificate. The Trustee shall be under no
liability to any Person for any registration of a Transfer of a Residual
Certificate that is in fact not permitted by Section 5.02(b) and this
Section 5.02(c) or for making any payments due on such Certificate to the
Holder thereof or taking any other action with respect to such Holder
under the provisions of this Agreement so long as the Transfer was
registered after receipt of the related Transfer Affidavit, Transferor
Certificate and either the Rule 144A Letter or the Investment Letter. The
Trustee shall be entitled but not obligated to recover from any Holder of
a Residual Certificate that was in fact not a Permitted Transferee at the
time it became a Holder or, at such subsequent time as it became other
than a Permitted Transferee, all payments made on such Residual
Certificate at and after either such time. Any such payments so recovered
by the Trustee shall be paid and delivered by the Trustee to the last
preceding Permitted Transferee of such Certificate.
(v) The Depositor shall use its best efforts to make available, upon
receipt of written request from the Trustee, all information necessary to
compute any tax imposed under Section 860E(e) of the Code as a result of
a Transfer of an Ownership Interest in a Residual Certificate to any
Holder who is not a Permitted Transferee.
The restrictions on Transfers of a Residual Certificate set forth in this
Section 5.02(c) shall cease to apply (and the applicable portions of the
legend on a Residual Certificate may be deleted) with respect to Transfers
occurring after delivery to the Trustee of an Opinion of Counsel, which
Opinion of Counsel shall not be an expense of the Trust Fund, the Trustee, the
Seller, the Servicers or the Special Servicer to the effect that the
elimination of such restrictions will not cause the REMIC hereunder to fail to
qualify as a REMIC at any time that the Certificates are outstanding or result
in the imposition of any tax on the Trust Fund, a Certificateholder or another
Person. Each Person holding or acquiring any Ownership Interest in a Residual
Certificate hereby consents to any amendment of this Agreement which, based on
an
101
Opinion of Counsel furnished to the Trustee, is reasonably necessary (a) to
ensure that the record ownership of, or any beneficial interest in, a Residual
Certificate is not transferred, directly or indirectly, to a Person that is
not a Permitted Transferee and (b) to provide for a means to compel the
Transfer of a Residual Certificate which is held by a Person that is not a
Permitted Transferee to a Holder that is a Permitted Transferee.
(d) The preparation and delivery of all certificates and opinions
referred to above in this Section 5.02 in connection with transfer shall be at
the expense of the parties to such transfers.
(e) Except as provided below, the Book-Entry Certificates shall at all
times remain registered in the name of the Depository or its nominee and at
all times: (i) registration of the Certificates may not be transferred by the
Trustee except to another Depository; (ii) the Depository shall maintain
book-entry records with respect to the Certificate Owners and with respect to
ownership and transfers of such Book-Entry Certificates; (iii) ownership and
transfers of registration of the Book-Entry Certificates on the books of the
Depository shall be governed by applicable rules established by the
Depository; (iv) the Depository may collect its usual and customary fees,
charges and expenses from its Depository Participants; (v) the Trustee shall
deal with the Depository, Depository Participants and indirect participating
firms as representatives of the Certificate Owners of the Book-Entry
Certificates for purposes of exercising the rights of holders under this
Agreement, and requests and directions for and votes of such representatives
shall not be deemed to be inconsistent if they are made with respect to
different Certificate Owners; and (vi) the Trustee may rely and shall be fully
protected in relying upon information furnished by the Depository with respect
to its Depository Participants and furnished by the Depository Participants
with respect to indirect participating firms and persons shown on the books of
such indirect participating firms as direct or indirect Certificate Owners.
All transfers by Certificate Owners of Book-Entry Certificates shall be
made in accordance with the procedures established by the Depository
Participant or brokerage firm representing such Certificate Owner. Each
Depository Participant shall only transfer Book-Entry Certificates of
Certificate Owners it represents or of brokerage firms for which it acts as
agent in accordance with the Depository's normal procedures.
If (x) (i) the Depository or the Depositor advises the Trustee in writing
that the Depository is no longer willing or able to properly discharge its
responsibilities as Depository, and (ii) the Trustee or the Depositor is
unable to locate a qualified successor, (y) the Depositor at its option
advises the Trustee in writing that it elects to terminate the book-entry
system through the Depository or (z) after the occurrence of an Event of
Default, Certificate Owners representing at least 51% of the Certificate
Balance of the Book-Entry Certificates together advise the Trustee and the
Depository through the Depository Participants in writing that the
continuation of a book-entry system through the Depository is no longer in the
best interests of the Certificate Owners, the Trustee shall notify all
Certificate Owners, through the Depository, of the occurrence of any such
event and of the availability of definitive, fully-registered Certificates
(the "Definitive Certificates") to Certificate Owners requesting the same.
Upon surrender to the Trustee of the related Class of Certificates by the
Depository, accompanied by the instructions from the Depository for
registration, the Trustee shall issue the Definitive Certificates. None of the
Seller, the Servicers, the Special Servicer, the Depositor or the Trustee
shall be liable for any delay in delivery of such instruction and each may
conclusively rely on, and shall be protected in
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relying on, such instructions. The Depositor shall provide the Trustee with an
adequate inventory of certificates to facilitate the issuance and transfer of
Definitive Certificates. Upon the issuance of Definitive Certificates all
references herein to obligations imposed upon or to be performed by the
Depository shall be deemed to be imposed upon and performed by the Trustee, to
the extent applicable with respect to such Definitive Certificates and the
Trustee shall recognize the Holders of the Definitive Certificates as
Certificateholders hereunder; provided that the Trustee shall not by virtue of
its assumption of such obligations become liable to any party for any act or
failure to act of the Depository.
SECTION 5.03 Mutilated, Destroyed, Lost or Stolen Certificates.
-------------------------------------------------
If (a) any mutilated Certificate is surrendered to the Trustee, or the
Trustee receives evidence to its satisfaction of the destruction, loss or
theft of any Certificate and (b) there is delivered to the Trustee such
security or indemnity as may be required by it to hold it harmless, then, in
the absence of notice to the Trustee that such Certificate has been acquired
by a bona fide purchaser, the Trustee shall execute, authenticate and deliver,
in exchange for or in lieu of any such mutilated, destroyed, lost or stolen
Certificate, a new Certificate of like Class, tenor and Percentage Interest.
In connection with the issuance of any new Certificate under this Section
5.03, the Trustee may require the payment of a sum sufficient to cover any tax
or other governmental charge that may be imposed in relation thereto and any
other expenses (including the fees and expenses of the Trustee) connected
therewith. Any replacement Certificate issued pursuant to this Section 5.03
shall constitute complete and indefeasible evidence of ownership, as if
originally issued, whether or not the lost, stolen or destroyed Certificate
shall be found at any time.
SECTION 5.04 Persons Deemed Owners.
---------------------
The Servicers and the Trustee and any agent of the Servicers or the
Trustee may treat the Person in whose name any Certificate is registered as
the owner of such Certificate for the purpose of receiving distributions as
provided in this Agreement and for all other purposes whatsoever, and none of
the Servicers or the Trustee or any agent of the Servicers or the Trustee
shall be affected by any notice to the contrary.
SECTION 5.05 Access to List of Certificateholders' Names and
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Addresses.
---------
If three or more Certificateholders (a) request such information in
writing from the Trustee, (b) state that such Certificateholders desire to
communicate with other Certificateholders with respect to their rights under
this Agreement or under the Certificates, and (c) provide a copy of the
communication which such Certificateholders propose to transmit, or if the
Depositor or a Servicer shall request such information in writing from the
Trustee, then the Trustee shall, within ten Business Days after the receipt of
such request, provide the Depositor, such Servicer or such Certificateholders
at such recipients' expense the most recent list of the Certificateholders of
such Trust Fund held by the Trustee, if any. The Depositor and every
Certificateholder, by receiving and holding a Certificate, agree that the
Trustee shall not be held accountable by reason of the disclosure of any such
information as to the list of the Certificateholders hereunder, regardless of
the source from which such information was derived.
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SECTION 5.06 Maintenance of Office or Agency.
-------------------------------
The Trustee will maintain or cause to be maintained at its expense an
office or offices or agency or agencies in St. Xxxx, Minnesota where
Certificates may be surrendered for registration of transfer or exchange. The
Trustee initially designates its Corporate Trust Office for such purposes. The
Trustee will give prompt written notice to the Certificateholders of any
change in such location of any such office or agency.
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ARTICLE VI
THE DEPOSITOR, THE SELLER, THE SERVICERS AND THE SPECIAL SERVICER
SECTION 6.01 Respective Liabilities of the Depositor, the Seller,
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the Servicers and the Special Servicer.
--------------------------------------
The Depositor, the Seller, each Servicer and the Special Servicer shall
each be liable in accordance herewith only to the extent of the obligations
specifically and respectively imposed upon and undertaken by them herein.
SECTION 6.02 Merger or Consolidation of the Depositor, the Seller
------------------------------------------------------
or a Servicer.
-------------
The Depositor, the Seller and each Servicer will each keep in full effect
its existence, rights and franchises as a corporation under the laws of the
United States or under the laws of one of the states thereof and will each
obtain and preserve its qualification to do business as a foreign corporation
in each jurisdiction in which such qualification is or shall be necessary to
protect the validity and enforceability of this Agreement, or any of the
Mortgage Loans and to perform its respective duties under this Agreement.
Any Person into which the Depositor, the Seller or a Servicer may be
merged or consolidated, or any Person resulting from any merger or
consolidation to which the Depositor, the Seller or a Servicer shall be a
party, or any person succeeding to the business of the Depositor, the Seller
or a Servicer, shall be the successor of the Depositor, the Seller or the
related Servicer, as the case may be, hereunder, without the execution or
filing of any paper or any further act on the part of any of the parties
hereto, anything herein to the contrary notwithstanding, provided, however,
that the successor or surviving Person with respect to a merger or
consolidation of a Servicer shall be an institution either (i) having a net
worth of not less than $10,000,000 or whose deposits are insured by the FDIC
through the BIF or the SAIF, and (ii) which is a FNMA or FHLMC approved
servicer in good standing.
SECTION 6.03 Limitation on Liability of the Depositor, the Seller,
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the Servicers, the Special Servicer and Others.
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(a) None of the Depositor, the Seller, a Servicer or the Special Servicer
nor any of the directors, officers, employees or agents of the Depositor, the
Seller, a Servicer or the Special Servicer shall be under any liability to the
Certificateholders for any action taken or for refraining from the taking of
any action in good faith pursuant to this Agreement, or for errors in
judgment; provided, however, that this provision shall not protect the
Depositor, the Seller, a Servicer, the Special Servicer or any such Person
against any breach of representations or warranties made by it herein or
protect the Depositor, the Seller, the Servicer, the Special Servicer or any
such Person from any liability which would otherwise be imposed by reasons of
willful misfeasance, bad faith or gross negligence in the performance of
duties or by reason of reckless disregard of obligations and duties hereunder.
The Depositor, the Seller, a Servicer, the Special Servicer and any director,
officer, employee or agent of the Depositor, the Seller, a Servicer or the
Special Servicer may rely in good faith on any document of any kind prima
facie
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properly executed and submitted by any Person respecting any matters arising
hereunder. None of the Depositor, the Seller, a Servicer or the Special
Servicer shall be under any obligation to appear in, prosecute or defend any
legal action that is not incidental to its respective duties hereunder and
which in its opinion may involve it in any expense or liability; provided,
however, that any of the Depositor, the Seller, a Servicer or the Special
Servicer may in its discretion undertake any such action that it may deem
necessary or desirable in respect of this Agreement and the rights and duties
of the parties hereto and interests of the Trustee and the Certificateholders
hereunder. In such event, the legal expenses and costs of such action and any
liability resulting therefrom shall be expenses, costs and liabilities of the
Trust Fund, and the Depositor, the Seller, the Servicers and the Special
Servicers shall be entitled to be reimbursed therefor from the Trust Fund.
(b) Each Servicer shall indemnify the Trustee and hold it harmless
against any and all claims, losses, damages, penalties, fines, forfeitures,
reasonable and necessary legal fees and related costs, judgments, and any
other costs, fees and expenses that the Trustee may sustain in any way related
to the failure of such Servicer to perform its duties and service the Mortgage
Loans in strict compliance with the terms of this Agreement. The related
Servicer immediately shall notify the Trustee if a claim is made by a third
party with respect to this Agreement or the Mortgage Loans, assume (with the
prior written consent of the Trustee) the defense of any such claim and pay
all expenses in connection therewith, including counsel fees, and promptly
pay, discharge and satisfy any judgment or decree which may be entered against
it or the Trustee in respect of such claim. The related Servicer shall follow
any written instructions received from the Trustee in connection with such
claim. Except as otherwise provided herein, the Trustee promptly shall
reimburse the Servicer for all amounts advanced by it pursuant to the
preceding sentence except when the claim is in any way related to the failure
of such Servicer to service and administer the Mortgage Loans in strict
compliance with the terms of this Agreement.
SECTION 6.04 Limitation on Resignation of a Servicer.
---------------------------------------
(a) Subject to Section 6.04(b) below, a Servicer shall not resign from
the obligations and duties hereby imposed on it except (i)(a) upon appointment
of a successor servicer (which may be with respect to all or a portion of the
Mortgage Loans), (b) receipt by the Trustee of a letter from each Rating
Agency that such a resignation and appointment will not result in a
downgrading of the rating of any of the Certificates related to the applicable
Mortgage Loans and (c) receipt by FSA of oral confirmation from each Rating
Agency that the rating assigned to any of the Certificates related to the
applicable Mortgage Loans is given without regard to the FSA Policy, or (ii)
upon determination that its duties hereunder are no longer permissible under
applicable law. Any such determination under clause (ii) permitting the
resignation of a Servicer shall be evidenced by an Opinion of Counsel to such
effect delivered to the Trustee. No such resignation shall become effective
until the Trustee or a successor servicer shall have assumed such Servicer's
responsibilities, duties, liabilities and obligations hereunder.
(b) Notwithstanding the foregoing, DLJ Mortgage Capital, Inc. shall be
entitled to request that Olympus resign as Servicer and appoint a successor
servicer; provided that such entity delivers to the Trustee the letter
required by 6.04(a)(i) above.
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SECTION 6.05 Limitation Upon Liability of the Credit Risk Manager.
-----------------------------------------------------
Neither the Credit Risk Manager, nor any of the directors, officers,
employees or agents of the Credit Risk Manager, shall be under any liability
to the Trustee, the Certificateholders or the Depositor for any action taken
or for refraining from the taking of any action in good faith pursuant to this
Agreement, in reliance upon information provided by the applicable Servicer
under the applicable Credit Risk Management Agreement or for errors in
judgment; provided, however, that this provision shall not protect the Credit
Risk Manager or any such person against liability that would otherwise be
imposed by reason of willful malfeasance, bad faith or gross negligence in its
performance of its duties or by reason of reckless disregard for its
obligations and duties under this Agreement or the applicable Credit Risk
Management Agreement. The Credit Risk Manager and any director, officer,
employee or agent of the Credit Risk Manager may rely in good faith on any
document of any kind prima facie properly executed and submitted by any Person
respecting any matters arising hereunder, and may rely in good faith upon the
accuracy of information furnished by the applicable Servicer pursuant to the
applicable Credit Risk Management Agreement in the performance of its duties
thereunder and hereunder.
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ARTICLE VII
DEFAULT
SECTION 7.01 Events of Default.
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"Event of Default", wherever used herein, means any one of the following
events:
(i) any failure by a Servicer to make any deposit or payment
required pursuant to this Agreement (including but not limited to
Advances to the extent required under Section 4.01) which continues
unremedied for a period of one Business Day after the date upon which
written notice of such failure, requiring the same to be remedied, shall
have been given to such Servicer by the Trustee or the Depositor, or to
such Servicer and the Trustee by the Holders of Certificates having not
less than 25% of the Voting Rights evidenced by the Certificates; or
(ii) any failure by a Servicer duly to observe or perform in any
material respect any other of the covenants or agreements on the part of
such Servicer set forth in this Agreement, or if any of the
representations and warranties of such Servicer in Section 2.03(a) proves
to be untrue in any material respect, which failure or breach continues
unremedied for a period of 60 days after the date on which written notice
of such failure or breach, requiring the same to be remedied, shall have
been given to such Servicer by the Trustee or the Depositor, or to such
Servicer and the Trustee by the Holders of Certificates having not less
than 25% of the Voting Rights evidenced by the Certificates, provided,
however, that in the case of a failure that cannot be cured within 60
days, the cure period may be extended if such Servicer can demonstrate to
the reasonable satisfaction of the Trustee and FSA that such Servicer is
diligently pursuing remedial action; or
(iii) failure by a Servicer to maintain, if required, its license to
do business in any jurisdiction where the related Mortgaged Property is
located; or
(iv) failure by Olympus of the Servicer Termination Test; or
(v) failure by Fairbanks of the Fairbanks Termination Test; or
(vi) a decree or order of a court or agency or supervisory authority
having jurisdiction for the appointment of a conservator or receiver or
liquidator in any insolvency, readjustment of debt, including bankruptcy,
marshaling of assets and liabilities or similar proceedings, or for the
winding-up or liquidation of its affairs, shall have been entered against
a Servicer and such decree or order shall have remained in force
undischarged or unstayed for a period of 60 consecutive days; or
(vii) a Servicer shall consent to the appointment of a conservator
or receiver or liquidator in any insolvency, readjustment of debt,
marshaling of assets and liabilities or
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similar proceedings of or relating to such Servicer or of or relating
to all or substantially all of its property; or
(viii) a Servicer shall admit in writing its inability to pay its
debts generally as they become due, file a petition to take advantage of
or commence a voluntary case under, any applicable insolvency, bankruptcy
or reorganization statute, make an assignment for the benefit of its
creditors, voluntarily suspend payment of its obligations; or
(ix) a Servicer ceases to meet the qualifications of a FNMA or FHLMC
approved servicer.
Other than an Event of Default resulting from a failure of a Servicer to
make any required Advance, or set forth in clause (iv) or (v) above, if an
Event of Default shall occur and a Responsible Officer of the Trustee has
knowledge thereof, then, and in each and every such case, so long as such
Event of Default shall not have been remedied, the Trustee may, or at the
direction of the Holders of Certificates evidencing not less than 51% of the
Voting Rights evidenced by the Certificates, the Trustee shall by notice in
writing to such Servicer (with a copy to each Rating Agency), terminate all of
the rights and obligations of such Servicer under this Agreement and in and to
the related Mortgage Loans and the proceeds thereof, other than its rights as
a Certificateholder hereunder. If an Event of Default results from the failure
of a Servicer to make a required Advance or an Event of Default set forth in
clause (v) occurs, the Trustee shall, by notice in writing to such Servicer
and the Depositor (with a copy to each Rating Agency), terminate all of the
rights and obligations of such Servicer under this Agreement and in and to the
related Mortgage Loans and the proceeds thereof, other than its rights as a
Certificateholder hereunder.
If an Event of Default set forth in clause (iv) shall occur and a
Responsible Officer of the Trustee has knowledge thereof, the Trustee shall
notify the Certificateholders of such event and shall request that
Certificateholders inform the Trustee as to whether they desire to terminate
all rights and obligations of Olympus under the Agreement. If within 30 days
of making such request, Holders of Certificates entitled to 51% of the Voting
Rights or more instruct the Trustee to terminate such Servicer, the Trustee
shall by notice in writing to such Servicer (with a copy to each Rating
Agency), terminate all of the rights and obligations of Olympus under this
Agreement and in and to the related Mortgage Loans and the proceeds thereof,
other than its rights as a Certificateholder hereunder.
Upon receipt by a Servicer of such written notice of termination, all
authority and power of such Servicer under this Agreement, whether with
respect to the related Mortgage Loans or otherwise, shall pass to and be
vested in the Trustee or its nominee, subject to Section 7.02. Upon written
request from the Trustee, such Servicer shall prepare, execute and deliver to
the successor entity designated by the Trustee any and all documents and other
instruments, place in such successor's possession all related Mortgage Files,
and do or cause to be done all other acts or things necessary or appropriate
to effect the purposes of such notice of termination, including but not
limited to the transfer and endorsement or assignment of the related Mortgage
Loans and related documents, at the Servicer's sole expense. Such Servicer
shall cooperate with the Trustee and such successor in effecting the
termination of such Servicer's responsibilities and rights
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hereunder, including without limitation, the transfer to such successor for
administration by it of all cash amounts which shall at the time be credited
by such Servicer to a related Collection Account or Escrow Account or
thereafter received with respect to the related Mortgage Loans. The Trustee
shall thereupon make any Advance unless prohibited by applicable law. The
Trustee is hereby authorized and empowered to execute and deliver, on behalf
of such Servicer, as attorney-in-fact or otherwise, any and all documents and
other instruments, and to do or accomplish all other acts or things necessary
or appropriate to effect the purposes of such notice of termination, whether
to complete the transfer and endorsement or assignment of the related Mortgage
Loans and related documents, or otherwise.
All reasonable out of pocket costs and expenses (including attorney's
fees) incurred in connection with transferring servicing to a successor
Servicer shall be paid by the predecessor Servicer (or if the predecessor
Servicer is the Trustee, the initial Servicer) upon presentation of reasonable
documentation of such costs and expenses.
SECTION 7.02 Trustee to Act; Appointment of Successor.
----------------------------------------
On and after the time a Servicer receives a notice of termination
pursuant to Section 7.01 of this Agreement, the Trustee shall, subject to and
to the extent provided herein, be the successor to a Servicer, but only in its
capacity as servicer under this Agreement, and not in any other, and the
transactions set forth herein and shall be subject to all the
responsibilities, duties and liabilities relating thereto placed on a Servicer
by the terms and provisions hereof and applicable law including the obligation
to make Advances pursuant to Section 4.01. As compensation therefor, the
Trustee shall be entitled to all funds relating to the related Mortgage Loans
that the Servicer would have been entitled to charge to a Collection Account,
provided that the terminated Servicer shall nonetheless be entitled to payment
or reimbursement as provided in Section 3.09(a) to the extent that such
payment or reimbursement relates to the period prior to termination of the
Servicer. Notwithstanding the foregoing, if the Trustee has become the
successor to a Servicer in accordance with Section 7.01, the Trustee may, if
it shall be unwilling to so act, or shall, if it is prohibited by applicable
law from making Advances pursuant to 4.01 hereof, or if it is otherwise unable
to so act, appoint, or petition a court of competent jurisdiction to appoint,
any established mortgage loan servicing institution the appointment of which
does not adversely affect the then current rating of the Certificates by each
Rating Agency, as the successor to such Servicer hereunder in the assumption
of all or any part of the responsibilities, duties or liabilities of the
Servicer hereunder. Any successor to a Servicer shall be an institution which
is a FNMA or FHLMC approved seller/servicer in good standing, which has a net
worth of at least $10,000,000, which is willing to service the related
Mortgage Loans and which executes and delivers to the Depositor and the
Trustee an agreement accepting such delegation and assignment, containing an
assumption by such Person of the rights, powers, duties, responsibilities,
obligations and liabilities of such Servicer (other than liabilities of the
Servicer under Section 6.03 hereof incurred prior to termination of the
Servicer under Section 7.01 hereunder), with like effect as if originally
named as a party to this Agreement; provided that each Rating Agency
acknowledges that its rating of the Certificates in effect immediately prior
to such assignment and delegation will not be qualified or reduced as a result
of such assignment and delegation. Pending appointment of a successor to a
Servicer hereunder, the Trustee, unless the Trustee is prohibited by law from
so acting, shall, subject to the limitations described herein, act in such
capacity as hereinabove provided. In connection with such
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appointment and assumption, the Trustee may make such arrangements for the
compensation of such successor out of payments on the related Mortgage Loans
as it and such successor shall agree; provided, however, that no such
compensation shall be in excess of the Servicing Fee. The Trustee and such
successor shall take such action, consistent with this Agreement, as shall be
necessary to effectuate any such succession. Neither the Trustee nor any other
successor servicer shall be deemed to be in default by reason of any failure
to make, or any delay in making, any distribution hereunder or any portion
thereof or any failure to perform, or any delay in performing, any duties or
responsibilities hereunder, in either case caused by the failure of the
Servicer to deliver or provide, or any delay in delivering or providing, any
cash, information, documents or records to it.
Any successor to a Servicer shall give notice to the Mortgagors of such
change of servicer and shall, during the term of its service as servicer,
maintain in force the policy or policies that the Servicer is required to
maintain pursuant to this Agreement.
SECTION 7.03 Notification to Certificateholders.
----------------------------------
(a) Upon any termination of or appointment of a successor to a Servicer,
the Trustee shall give prompt written notice thereof to Certificateholders and
to each Rating Agency.
(b) Within 60 days after the occurrence of any Event of Default, the
Trustee shall transmit by mail to all Certificateholders notice of each such
Event of Default hereunder actually known to a Responsible Officer the
Trustee, unless such Event of Default shall have been cured or waived.
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ARTICLE VIII
CONCERNING THE TRUSTEE
SECTION 8.01 Duties of the Trustee.
---------------------
The Trustee, prior to the occurrence of an Event of Default and after the
curing or waiver of all Events of Default that may have occurred, shall
undertake to perform such duties and only such duties as are specifically set
forth in this Agreement. In case an Event of Default has occurred and remains
uncured and not waived, the Trustee shall exercise such of the rights and
powers vested in it by this Agreement, and use the same degree of care and
skill in their exercise as a prudent person would exercise or use under the
circumstances in the conduct of such person's own affairs.
The Trustee, upon receipt of all resolutions, certificates, statements,
opinions, reports, documents, orders or other instruments furnished to the
Trustee that are specifically required to be furnished pursuant to any
provision of this Agreement shall examine them to determine whether they are
in the form required by this Agreement; provided, however, that the Trustee
shall not be responsible for the accuracy or content of any such resolution,
certificate, statement, opinion, report, document, order or other instrument.
No provision of this Agreement shall be construed to relieve the Trustee
from liability for its own negligent action, its own negligent failure to act
or its own willful misconduct; provided, however, that:
(i) unless an Event of Default actually known to the Trustee shall
have occurred and be continuing, the duties and obligations of the
Trustee shall be determined solely by the express provisions of this
Agreement, the Trustee shall not be liable except for the performance of
such duties and obligations as are specifically set forth in this
Agreement, no implied covenants or obligations shall be read into this
Agreement against the Trustee and the Trustee may conclusively rely, as
to the truth of the statements and the correctness of the opinions
expressed therein, upon any certificates or opinions furnished to the
Trustee and conforming to the requirements of this Agreement which it
believed in good faith to be genuine and to have been duly executed by
the proper authorities respecting any matters arising hereunder;
(ii) the Trustee shall not be liable for an error of judgment made
in good faith by a Responsible Officer or Responsible Officers of the
Trustee, unless it shall be finally proven that the Trustee was negligent
in ascertaining the pertinent facts;
(iii) the Trustee shall not be liable with respect to any action
taken, suffered or omitted to be taken by it in good faith in accordance
with the direction of the Holders of Certificates evidencing not less
than 25% of the Voting Rights of Certificates relating to the time,
method and place of conducting any proceeding for any remedy available to
the Trustee, or exercising any trust or power conferred upon the Trustee
under this Agreement;
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(iv) no provision of this Agreement shall require the Trustee to act
as Servicer or be responsible in any way for the acts or omissions of the
Servicer until such time as it acts as successor servicer pursuant to the
terms of this Agreement; and
(v) the Trustee shall have no duty (A) (other than in its capacity
as successor servicer) to see to any recording, filing or depositing of
this Agreement or any agreement referred to herein or any financing
statement or continuation statement evidencing a security interest, or to
see to the maintenance of any such recording or filing or depositing of
any thereof, (B) (other than in its capacity as successor servicer) to
see to any insurance, (C) (other than with respect to Section 8.11
hereof) to see to the payment or discharge of any tax, assessment, or
other governmental charge or any lien or encumbrance of any kind owing
with respect to , assessed or levied against, any part of the Trust Fund,
(D) to confirm or verify the contents of any certificates of the Servicer
delivered to the Trustee pursuant to this Agreement believed by the
Trustee to be genuine and to have been signed or presented by the
appropriate party.
SECTION 8.02 Certain Matters Affecting the Trustee.
-------------------------------------
Except as otherwise provided in Section 8.01:
(i) the Trustee may request and conclusively rely upon and shall be
protected in acting or refraining from acting upon any resolution,
Officer's Certificate, certificate of auditors or any other certificate,
statement, instrument, opinion, report, notice, request, consent, order,
appraisal, bond or other paper or document believed by it to be genuine
and to have been signed or presented by the proper party or parties and
the Trustee shall have no responsibility to ascertain or confirm the
genuineness of any signature of any such party or parties;
(ii) the Trustee may consult with counsel, financial advisers or
accountants and the advice of any such counsel, financial advisers or
accountants and any Opinion of Counsel shall be full and complete
authorization and protection in respect of any action taken or suffered
or omitted by it hereunder in good faith and in accordance with such
advice or Opinion of Counsel;
(iii) the Trustee shall not be liable for any action taken, suffered
or omitted by it in good faith and believed by it to be authorized or
within the discretion or rights or powers conferred upon it by this
Agreement;
(iv) the Trustee shall not be bound to make any investigation into
the facts or matters stated in any resolution, certificate, statement,
instrument, opinion, report, notice, request, consent, order, approval,
bond or other paper or document, unless requested in writing so to do by
Holders of Certificates evidencing not less than 25% of the Voting Rights
allocated to each Class of Certificates;
(v) the Trustee may execute any of the trusts or powers hereunder or
perform any duties hereunder either directly or by or through agents,
affiliates, accountants or attorneys and the Trustee shall not be
responsible for any negligence or willful
113
misconduct on the part of such agents, affiliates, accountants or
attorneys appointed by it with due care;
(vi) the Trustee shall not be required to risk or expend its own
funds or otherwise incur any financial liability in the performance of
any of its duties or in the exercise of any of its rights or powers
hereunder if it shall have reasonable grounds for believing that
repayment of such funds or adequate indemnity against such risk or
liability is not assured to it;
(vii) the Trustee shall not be liable for any loss on any investment
of funds pursuant to this Agreement (other than as issuer of the
investment security);
(viii) the Trustee shall not be deemed to have actual knowledge of
an Event of Default until a Responsible Officer of the Trustee shall have
received written notice thereof;
(ix) the Trustee shall be under no obligation to exercise any of the
trusts, rights or powers vested in it by this Agreement or to institute,
conduct or defend any litigation hereunder or in relation hereto at the
request, order or direction of any of the Certificateholders, pursuant to
the provisions of this Agreement, unless such Certificateholders shall
have offered to the Trustee reasonable security or indemnity satisfactory
to the Trustee against the costs, expenses and liabilities which may be
incurred therein or thereby;
(x) the rights of the Trustee to perform any discretionary act
enumerated in this Agreement shall not be construed as a duty, and the
Trustee shall not be answerable for other than its negligence or willful
misconduct in the performance of such act;
(xi) anything to the contrary in this Agreement notwithstanding, in
no event shall the Trustee be liable for special, indirect or
consequential loss or damage of any kind whatsoever (including, but not
limited to, lost profits) even if the Trustee has been advised of the
likelihood of such loss or damage and regardless of the form of action;
and
(xii) the Trustee shall not be required to give any bond or surety
in respect of the execution of the Trust Fund created hereby or the
powers granted hereunder.
SECTION 8.03 Trustee Not Liable for Certificates or Mortgage Loans.
-----------------------------------------------------
The recitals contained herein and in the Certificates shall be taken as
the statements of the Depositor, a Servicer or the Seller, as the case may be,
and the Trustee assumes no responsibility for their correctness. The Trustee
makes no representations as to the validity or sufficiency of this Agreement
or of the Certificates or of any Mortgage Loan or related document other than
with respect to the Trustee's execution and authentication of the
Certificates. The Trustee shall not be accountable for the use or application
by the Depositor or the Servicer of any funds paid to the Depositor or a
Servicer in respect of the Mortgage Loans or deposited in or withdrawn from
the Collection Account by the Depositor or a Servicer.
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SECTION 8.04 Trustee May Own Certificates.
----------------------------
The Trustee in its individual or any other capacity may become the owner
or pledgee of Certificates and may transact business with the Depositor, the
Seller, the Servicers and their affiliates, with the same rights as it would
have if it were not the Trustee.
SECTION 8.05 Trustee's Fees and Expenses.
---------------------------
(a) In addition to the Trustee Fee, the Trustee, as compensation for its
activities hereunder, shall be entitled to withdraw from the Certificate
Account on each Distribution Date prior to making distributions pursuant to
Section 4.02 any investment income or other benefit derived from balances in
the Certificate Account for such Distribution Date pursuant to Section
3.09(b). Subject to the limitations set forth in Section 8.05(b), the Trustee
and any director, officer, employee or agent of the Trustee shall be
indemnified by the Depositor and held harmless against any loss, liability or
expense (including reasonable attorney's fees and expenses) incurred in
connection with any claim or legal action relating to (a) this Agreement or
the Custodial Agreements, (b) the Certificates, or (c) the performance of any
of the Trustee's duties hereunder or under the Custodial Agreements, other
than any loss, liability or expense incurred by reason of willful misfeasance,
bad faith or negligence in the performance of any of the Trustee's duties
hereunder or incurred by reason of any action of the Trustee taken at the
direction of the Certificateholders. Such indemnity shall survive the
termination of this Agreement or the resignation or removal of the Trustee
hereunder. Without limiting the foregoing, the Depositor covenants and agrees,
subject to the limitation set forth in Section 8.05(b), and except for any
such expense, disbursement or advance as may arise from the Trustee's
negligence, bad faith or willful misconduct, to pay or reimburse the Trustee,
for all reasonable expenses, disbursements and advances incurred or made by
the Trustee in accordance with any of the provisions of this Agreement with
respect to: (A) the reasonable compensation and the expenses and disbursements
of its counsel not associated with the closing of the issuance of the
Certificates, (B) the reasonable compensation, expenses and disbursements of
any accountant, engineer or appraiser that is not regularly employed by the
Trustee, to the extent that the Trustee must engage such persons to perform
acts or services hereunder, (C) printing and engraving expenses in connection
with preparing any Definitive Certificates and (D) any other reasonable
expenses incurred other than in the ordinary course of its business by the
Trustee in connection with its duties hereunder. Except as otherwise provided
herein, the Trustee shall not be entitled to payment or reimbursement for any
routine ongoing expenses incurred by the Trustee in the ordinary course of its
duties as Trustee or Paying Agent hereunder or for any other expenses.
(b) Notwithstanding anything to the contrary in this Agreement, the
Depositor shall not be obligated to pay to the Trustee more than, in the
aggregate, $150,000 pursuant to Section 8.05(a) hereof. Other than as set
forth in this Section 8.05, the Trustee shall not be entitled to any other
compensation or reimbursement for loss or expenses.
SECTION 8.06 Eligibility Requirements for the Trustee.
----------------------------------------
The Trustee hereunder shall at all times be a corporation or association
organized and doing business under the laws of a state or the United States of
America, authorized under such
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laws to exercise corporate trust powers, having a combined capital and surplus
of at least $50,000,000, subject to supervision or examination by federal or
state authority and with a credit rating which would not cause either of the
Rating Agencies to reduce their respective then current Ratings of the
Certificates (or having provided such security from time to time as is
sufficient to avoid such reduction), as evidenced in writing by each Rating
Agency. If such corporation or association publishes reports of condition at
least annually, pursuant to law or to the requirements of the aforesaid
supervising or examining authority, then for the proposes of this Section 8.06
the combined capital and surplus of such corporation or association shall be
deemed to be its combined capital and surplus as set forth in its most recent
report of condition so published. In case at any time the Trustee shall cease
to be eligible in accordance with the provisions of this Section 8.06, the
Trustee shall resign immediately in the manner and with the effect specified
in Section 8.07. The entity serving as Trustee may have normal banking and
trust relationships with the Depositor, the Seller or the Servicers and their
affiliates; provided, however, that such entity cannot be an affiliate of the
Seller, the Depositor or the Servicers other than the Trustee in its role as
successor to the related Servicer.
SECTION 8.07 Resignation and Removal of the Trustee.
--------------------------------------
The Trustee may at any time resign and be discharged from the trusts
hereby created by giving written notice of resignation to the Depositor, the
Seller, the Servicers, the Special Servicer and each Rating Agency not less
than 60 days before the date specified in such notice, when, subject to
Section 8.08, such resignation is to take effect, and acceptance by a
successor trustee in accordance with Section 8.08 meeting the qualifications
set forth in Section 8.06. If the Trustee gives notice of such resignation,
the Depositor shall promptly appoint a successor trustee. If no successor
trustee meeting such qualifications shall have been so appointed and have
accepted appointment within 30 days after the giving of such notice of
resignation or removal (as provided below), the resigning or removed Trustee
may petition any court of competent jurisdiction for the appointment of a
successor trustee.
If at any time the Trustee shall cease to be eligible in accordance with
the provisions of Section 8.06 and shall fail to resign after written request
thereto by the Depositor, or if at any time the Trustee shall become incapable
of acting, or shall be adjudged as bankrupt or insolvent, or a receiver of the
Trustee or of its property shall be appointed, or any public officer shall
take charge or control of the Trustee or of its property or affairs for the
purpose of rehabilitation, conservation or liquidation, or a tax is imposed
with respect to the Trust Fund by any state in which the Trustee or the Trust
Fund is located and the imposition of such tax would be avoided by the
appointment of a different trustee, then the Depositor may remove the Trustee
and appoint a successor trustee by written instrument, in triplicate, one copy
of which shall be delivered to the Trustee, one copy to the Servicer and the
Seller and one copy to the successor trustee.
The Holders of Certificates entitled to at least 51% of the Voting Rights
may at any time remove the Trustee and appoint a successor trustee by written
instrument or instruments, in triplicate, signed by such Holders or their
attorneys-in-fact duly authorized, one complete set of which shall be
delivered by the successor Trustee to the Depositor, the Servicers and the
Seller, one complete set to the Trustee so removed and one complete set to the
successor so appointed. Notice of any removal of the Trustee shall be given to
each Rating Agency by the successor trustee.
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Any resignation or removal of the Trustee and appointment of a successor
trustee pursuant to any of the provisions of this Section 8.07 shall become
effective upon acceptance of appointment by the successor trustee as provided
in Section 8.08.
SECTION 8.08 Successor Trustee.
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Any successor trustee appointed as provided in Section 8.07 shall
execute, acknowledge and deliver to the Depositor and to its predecessor
trustee, the Servicers and the Seller an instrument accepting such appointment
hereunder and thereupon the resignation or removal of the predecessor trustee
shall become effective and such successor trustee, without any further act,
deed or conveyance, shall become fully vested with all the rights, powers,
duties and obligations of its predecessor hereunder, with the like effect as
if originally named as trustee herein. The Depositor, the Servicers, the
Seller and the predecessor trustee shall execute and deliver such instruments
and do such other things as may reasonably be required for more fully and
certainly vesting and confirming in the successor trustee all such rights,
powers, duties, and obligations.
No successor trustee shall accept appointment as provided in this Section
8.08 unless at the time of such acceptance such successor trustee shall be
eligible under the provisions of Section 8.06 and its appointment shall not
adversely affect the then current rating of the Certificates.
Upon acceptance of appointment by a successor trustee as provided in this
Section 8.08, the Depositor shall mail notice of the succession of such
trustee hereunder to all Holders of Certificates. If the Depositor fails to
mail such notice within 10 days after acceptance of appointment by the
successor trustee, the successor trustee shall cause such notice to be mailed
at the expense of the Depositor.
SECTION 8.09 Merger or Consolidation of the Trustee.
--------------------------------------
Any corporation into which the Trustee may be merged or converted or with
which it may be consolidated or any corporation resulting from any merger,
conversion or consolidation to which the Trustee shall be a party, or any
corporation succeeding to the business of the Trustee, shall be the successor
of the Trustee hereunder, provided that such corporation shall be eligible
under the provisions of Section 8.06 without the execution or filing of any
paper or further act on the part of any of the parties hereto, anything herein
to the contrary notwithstanding.
SECTION 8.10 Appointment of Co-Trustee or Separate Trustee.
---------------------------------------------
Notwithstanding any other provisions of this Agreement, at any time, for
the purpose of meeting any legal requirements of any jurisdiction in which any
part of the Trust Fund or property securing any Mortgage Note may at the time
be located, the Depositor and the Trustee acting jointly shall have the power
and shall execute and deliver all instruments to appoint one or more Persons
approved by the Trustee to act as co-trustee or co-trustees jointly with the
Trustee, or separate trustee or separate trustees, of all or any part of the
Trust Fund, and to vest in such Person or Persons, in such capacity and for
the benefit of the Certificateholders, such title to the Trust Fund or any
part thereof, whichever is applicable, and, subject to the other provisions of
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this Section 8.10, such powers, duties, obligations, rights and trusts as the
Depositor and the Trustee may consider necessary or desirable. If the
Depositor shall not have joined in such appointment within 15 days after the
receipt by it of a request to do so, or in the case an Event of Default shall
have occurred and be continuing, the Trustee alone shall have the power to
make such appointment. No co-trustee or separate trustee hereunder shall be
required to meet the terms of eligibility as a successor trustee under Section
8.06 and no notice to Certificateholders of the appointment of any co-trustee
or separate trustee shall be required under Section 8.08.
Every separate trustee and co-trustee shall, to the extent permitted by
law, be appointed and act subject to the following provisions and conditions:
(i) To the extent necessary to effectuate the purposes of this
Section 8.10, all rights, powers, duties and obligations conferred or
imposed upon the Trustee, except for the obligation of the Trustee in its
capacity as successor servicer under this Agreement to advance funds on
behalf of a Servicer, shall be conferred or imposed upon and exercised or
performed by the Trustee and such separate trustee or co-trustee jointly
(it being understood that such separate trustee or co-trustee is not
authorized to act separately without the Trustee joining in such act),
except to the extent that under any law of any jurisdiction in which any
particular set or acts are to be performed (whether as Trustee hereunder
or as successor to a Servicer hereunder), the Trustee shall be
incompetent or unqualified to perform such act or acts, in which event
such rights, powers, duties and obligations (including the holding of
title to the applicable Trust Fund or any portion thereof in any such
jurisdiction) shall be exercised and performed singly by such separate
trustee or co-trustee, but solely at the direction of the Trustee;
(ii) No trustee hereunder shall be held personally liable by reason
of any act or omission of any other trustee hereunder and such
appointment shall not, and shall not be deemed to, constitute any such
separate trustee or co-trustee as agent of the Trustee;
(iii) The Trustee may at any time accept the resignation of or
remove any separate trustee or co-trustee; and
(iv) The Depositor, and not the Trustee, shall be liable for the
payment of reasonable compensation, reimbursement and indemnification to
any such separate trustee or co-trustee.
Any notice, request or other writing given to the Trustee shall be deemed
to have been given to each of the separate trustees and co-trustees, when and
as effectively as if given to each of them. Every instrument appointing any
separate trustee or co-trustee shall refer to this Agreement and the
conditions of this Article VIII. Each separate trustee and co-trustee, upon
its acceptance of the trusts conferred, shall be vested with the estates or
property specified in its instrument of appointment, either jointly with the
Trustee or separately, as may be provided therein, subject to all the
provisions of this Agreement, specifically including every provision of this
Agreement relating to the conduct of, affecting the liability of, or affording
protection to, the Trustee. Every such instrument shall be filed with the
Trustee and a copy thereof given to the Servicers and the Depositor.
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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.
SECTION 8.11 Tax Matters.
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It is intended that the assets with respect to which any REMIC election
is to be made, as set forth in the Preliminary Statement, shall constitute,
and that the conduct of matters relating to such assets shall be such as to
qualify such assets as, multiple "real estate mortgage investment conduits" as
defined in and in accordance with the REMIC Provisions. In furtherance of such
intention, the Trustee covenants and agrees that it shall act as agent (and
the Trustee is hereby appointed to act as agent) on behalf of the REMICs and
that in such capacity it shall: (a) prepare, sign and file, or cause to be
prepared and filed, in a timely manner, a U.S. Real Estate Mortgage Investment
Conduit Income Tax Return (Form 1066 or any successor form adopted by the
Internal Revenue Service) and prepare and file or cause to be prepared and
filed with the Internal Revenue Service and applicable state or local tax
authorities income tax or information returns for each taxable year with
respect to each REMIC, containing such information and at the times and in the
manner as may be required by the Code or state or local tax laws, regulations,
or rules, and furnish or cause to be furnished to Certificateholders the
schedules, statements or information at such times and in such manner as may
be required thereby; (b) within thirty days of the Closing Date, furnish or
cause to be furnished to the Internal Revenue Service, on Forms 8811 or as
otherwise may be required by the Code, the name, title, address, and telephone
number of the person that the holders of the Certificates may contact for tax
information relating thereto, together with such additional information as may
be required by such form, and update such information at the time or times in
the manner required by the Code; (c) make or cause to be made elections that
each group of segregated assets be treated as a REMIC on the federal tax
return for its first taxable year (and, if necessary, under applicable state
law) and apply for an employee identification number from the IRS via a Form
SS-4 or any other acceptable method for all tax entities; (d) prepare and
forward, or cause to be prepared and forwarded, to the Certificateholders and
to the Internal Revenue Service and, if necessary, state tax authorities, all
information returns and reports as and when required to be provided to them in
accordance with the REMIC Provisions, including without limitation, the
calculation of any original issue discount using the Prepayment Assumption;
(e) provide information necessary for the computation of tax imposed on the
transfer of a Residual Certificate to a Person that is not a Permitted
Transferee, or an agent (including a broker, nominee or other middleman) of a
Non-Permitted Transferee, or a pass-through entity in which a Non-Permitted
Transferee is the record holder of an interest (the reasonable cost of
computing and furnishing such information may be charged to the Person liable
for such tax); (f) to the extent that they are under its control, conduct
matters relating to such assets at all times that any Certificates are
outstanding so as to maintain the status of any REMIC as a REMIC under the
REMIC Provisions; (g) not knowingly or intentionally take any action or omit
to take any action that would cause the termination of the REMIC status of any
REMIC hereunder; (h) pay, from the sources specified in the sixth paragraph of
this Section 8.11, the amount of any federal or state tax, including
prohibited transaction taxes as described below, imposed on any REMIC
hereunder prior to its termination
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when and as the same shall be due and payable (but such obligation shall not
prevent the Trustee or any other appropriate Person from contesting any such
tax in appropriate proceedings and shall not prevent the Trustee from
withholding payment of such tax, if permitted by law, pending the outcome of
such proceedings); (i) ensure that federal, state or local income tax or
information returns shall be signed by the Trustee or such other person as may
be required to sign such returns by the Code or state or local laws,
regulations or rules; (j) maintain records relating to the REMICs, including
but not limited to the income, expenses, assets and liabilities thereof and
the fair market value and adjusted basis of the assets determined on the
accrual method or at such internals as may be required by the Code, as may be
necessary to prepare the foregoing returns, schedules, statements or
information; and (k) as and when necessary and appropriate, represent any such
REMIC in any administrative or judicial proceedings relating to an examination
or audit by any governmental taxing authority, request an administrative
adjustment as to any taxable year of any REMIC, enter into settlement
agreements with any governmental taxing agency, extend any statute of
limitations relating to any tax item of any such REMIC, and otherwise act on
behalf of the REMICs in relation to any tax matter or controversy involving
it.
In order to enable the Trustee to perform its duties as set forth herein,
the Depositor shall provide, or cause to be provided, to the Trustee within
ten (10) days after the Closing Date all information or data that the Trustee
requests in writing and determines to be relevant for tax purposes to the
valuations and offering prices of the Certificates, including, without
limitation, the price, yield, prepayment assumption and projected cash flows
of the Certificates and the Mortgage Loans. Thereafter, the Depositor shall
provide to the Trustee promptly upon written request therefor any such
additional information or data that the Trustee may, from time to time,
reasonably request in order to enable the Trustee to perform its duties as set
forth herein. DLJMC hereby indemnifies the Trustee for any losses,
liabilities, damages, claims or expenses of the Trustee arising from any
errors or miscalculations of the Trustee that result from any failure of the
Depositor to provide, or to cause to be provided, accurate information or data
to the Trustee on a timely basis.
In the event that any tax is imposed on "prohibited transactions" of any
REMIC as defined in Section 860F(a)(2) of the Code, on the "net income from
foreclosure property" of any REMIC as defined in Section 860G(c) of the Code,
on any contribution to the REMICs after the Startup Day pursuant to Section
860G(d) of the Code, or any other tax is imposed, including, without
limitation, any minimum tax imposed upon any REMICs pursuant to Sections 23153
and 24874 of the California Revenue and Taxation Code, if not paid as
otherwise provided for herein, such tax shall be paid by (i) the Trustee, if
any such other tax arises out of or results from a breach by the Trustee of
any of its obligations under this Agreement, (ii) the Seller, in the case of
any such minimum tax, if such tax arises out of or results from a breach by
the Seller of any of its obligations under this Agreement or (iii) the Seller,
if any such tax arises out of or results from the Seller's obligation to
repurchase a related Mortgage Loan pursuant to Section 2.02 or 2.03 or (iv) in
all other cases, or in the event that the Trustee or the Seller fails to honor
its obligations under the preceding clauses (i), (ii) or (iii) or the Servicer
fails to honor its obligations pursuant to Section 8.15, any such tax will be
paid with amounts otherwise to be distributed to the Certificateholders, as
provided in Section 3.09(b).
The Trustee shall treat the Basis Risk Reserve Fund as outside reserve
funds within the meaning of Treasury Regulation 1.860G-2(h) that are owned by
the Class X Certificateholder
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and the Class R Certificateholder, respectively, and that are not assets of
any REMIC. The Trustee shall treat the rights of the Class A-1, Class A-2,
Class A-3, Class A-4, Class A-IO, Class M-1, Class M-2, Class B-1 and Class
B-2 Certificateholders to receive payments from the Basis Risk Reserve Fund as
rights in an interest rate cap contract written by the Class X
Certificateholder in favor of the Class A-1, Class A-2, Class X-0, Xxxxx X-0,
Class M-1, Class M-2, Class B-1, and Class B-2 Certificateholders. The Class
A-IO Certificateholders will also be treated as holders of rights in an
interest rate cap contract written by the Class X Certificateholder whereby
the Class A-IO Certificateholder will pay to the Class X Certificateholder the
excess of the Class A-IO Pass-Through Rate computed under the actual/360
Convention and such Pass-Through Rate computed under the 30/360 Convention and
will receive payments from the Class X Certificateholder equal to the excess
of such Pass-Through Rate computed under the 30/360 Convention over such
Pass-Through Rate computed under the actual/360 Convention, in each case
multiplied by the notional balance of the Class A-IO Certificates. The Class
M-1, Class M-2, Class B-1 and Class B-2 Certificateholders will also be
treated as holders of rights in an limited recourse interest rate cap contract
written by the Class X Certificateholder whereby the Class M-1, Class M-2,
Class B-1 and Class B-2 Certificateholders will receive any excess of the
Subordinate Net Funds Cap over the Adjusted Subordinate Net Funds Cap on their
respective principal balances for such Distribution Date. In addition, the
Class X Certificateholders shall be deemed to have entered into a contractual
arrangement with the Class R Certificateholders whereby the Class R
Certificateholders agree to pay to the Class X Certificateholders on each
Distribution Date amounts that would, in the absence of such contractual
agreement , be distributable with respect to the residual interest in the
Master REMIC pursuant to Section 4.02(e)(xv). Thus, each REMIC Regular
Interest shall be treated as representing ownership of not only REMIC
Regular Interests, but also ownership of an interest in interest rate cap
contracts or a separate contractual right. For purposes of determining the
issue price of the REMIC Regular interests, the Trustee shall assume that the
Basis Risk Reserve Fund has a de minimis value.
The Trustee, the Servicer and the Holders of Certificates shall take any
action or cause any REMIC to take any action necessary to create or maintain
the status of each REMIC as a REMIC under the REMIC Provisions and shall
assist each other as necessary to create or maintain such status. Neither the
Trustee, the Servicers nor the Holder of any Residual Certificate shall take
any action, cause any REMIC created hereunder to take any action or fail to
take (or fail to cause to be taken) any action that, under the REMIC
Provisions, if taken or not taken, as the case may be, could (i) endanger the
status of any REMIC as a REMIC or (ii) result in the imposition of a tax upon
any REMIC (including but not limited to the tax on prohibited transactions as
defined in Code Section 860F(a)(2) and the tax on prohibited contributions set
forth on Section 860G(d) of the Code) (either such event, an "Adverse REMIC
Event") unless the Trustee and the Servicers have received an Opinion of
Counsel (at the expense of the party seeking to take such action) to the
effect that the contemplated action will not endanger such status or result in
the imposition of such a tax.
Each Holder of a Residual Certificate shall pay when due any and all
taxes imposed on each REMIC created hereunder by federal or state governmental
authorities. To the extent that such Trust taxes are not paid by a Residual
Certificateholder, the Trustee shall pay any remaining REMIC taxes out of
current or future amounts otherwise distributable to the Holder of the
Residual Certificate in the REMICs or, if no such amounts are available, out
of other amounts held in the Distribution Account, and shall reduce amounts
otherwise payable to Holders of regular interests in the related REMIC.
The Trustee shall, for federal income tax purposes, maintain books and
records with respect to each REMIC created hereunder on a calendar year and on
an accrual basis.
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The Trustee will apply for an Employee Identification Number from the
Internal Revenue Service via a Form SS-4 or other acceptable method for all
tax entities.
SECTION 8.12 Periodic Filings.
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The Trustee shall, on behalf of the Trust, cause to be filed with the
Securities and Exchange Commission any periodic reports required to be filed
under the provisions of the Securities Exchange Act of 1934, as amended, and
the rules and regulations of the Securities and Exchange Commission
thereunder. In connection with the preparation and filing of such periodic
reports, the Depositor and the Servicers shall, upon the written request of
the Trustee, timely provide to the Trustee all material information reasonably
available to them which is requested by the Trustee for the purpose of being
included in such reports. The Trustee shall have no liability with respect to
any failure to properly prepare or file such periodic reports resulting from
or relating to the Trustee's inability or failure to obtain any information
not resulting from its own negligence or willful misconduct.
SECTION 8.13 Trust Obligations.
-----------------
For all purposes herein, any and all rights, duties and obligations of
the Trustee on behalf of the Trust shall be the rights, duties and obligations
of the Trust itself.
SECTION 8.14 Determination of Certificate Index.
----------------------------------
On each Interest Determination Date, the Trustee shall determine the
Certificate Index for the Accrual Period and inform the Servicers of such
rate.
SECTION 8.15 Indemnification with Respect to Certain Taxes and Loss
------------------------------------------------------
of REMIC Status.
---------------
In the event that any REMIC fails to qualify as a REMIC, loses its status
as a REMIC, or incurs federal, state or local taxes as a result of a
prohibited transaction or prohibited contribution under the REMIC Provisions
due to the negligent performance by a Servicer of its duties and obligations
set forth herein, that Servicer shall indemnify the Trustee and the Trust Fund
against any and all losses, claims, damages, liabilities or expenses
("Losses") resulting from such negligence; provided, however, that neither
Servicers shall be liable for any such Losses attributable to the negligence
of the Trustee, the Depositor or the Holder of such Class R Certificate, as
applicable, nor for any such Losses resulting from misinformation provided by
the Holder of such Class R Certificate on which such Servicer has relied. The
foregoing shall not be deemed to limit or restrict the rights and remedies of
the Holder of such Class R Certificate now or hereafter existing at law or in
equity. Notwithstanding the foregoing, however, in no event shall either
Servicer have any liability (1) for any action or omission that is taken in
accordance with and in compliance with the express terms of, or which is
expressly permitted by the terms of, this Agreement, (2) for any Losses other
than arising out of a negligent performance by such Servicer of its duties and
obligations set forth herein, and (3) for any special or consequential damages
to Certificateholders (in addition to payment of principal and interest on the
Certificates).
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ARTICLE IX
TERMINATION
SECTION 9.01 Termination upon Liquidation or Purchase of the
-----------------------------------------------------
Mortgage Loans.
--------------
(a) Subject to Section 9.03, the obligations and responsibilities of the
Depositor, the Seller, the Servicers, the Special Servicer and the Trustee
created hereunder with respect to the Trust Fund shall terminate upon the
earlier of (a) the purchase by Olympus of all Mortgage Loans (and REO
Properties) remaining at the price equal to the sum of (i) 100% of the Stated
Principal Balance of each Mortgage Loan (other than in respect of REO
Property) plus one month's accrued interest thereon at the applicable Mortgage
Rate and (ii) with respect to any REO Property, the lesser of (x) the
appraised value of any REO Property as determined by the higher of two
appraisals completed by two independent appraisers selected by the Depositor
at the expense of the Depositor and (y) the Stated Principal Balance of each
Mortgage Loan related to any REO Property, in each case and related to any REO
Property, in each case plus accrued and unpaid interest thereon at the
applicable Mortgage Rate and (iii) any unreimbursed Advances, Servicing
Advances and Servicing Fees payable to any Servicer other than Olympus which
shall be entitled to withdraw such amounts from the applicable Collection
Account pursuant to Section 3.09(a) and (b) the later of (i) the maturity or
other liquidation (or any Advance with respect thereto) of the last Mortgage
Loan remaining in the Trust Fund and the disposition of all REO Property and
(ii) the distribution to Certificateholders of all amounts required to be
distributed to them pursuant to this Agreement. In no event shall the trusts
created hereby continue beyond the expiration of 21 years from the death of
the survivor of the descendants of Xxxxxx X. Xxxxxxx, the late Ambassador of
the United States to the Court of St. James's, living on the date hereof. The
right to repurchase all Mortgage Loans and REO Properties pursuant to clause
(a) above shall be conditioned upon the aggregate Stated Principal Balance of
the Mortgage Loans, at the time of any such repurchase, aggregating less than
ten percent of the Aggregate Collateral Balance as of the Initial Cut-off
Date.
SECTION 9.02 Final Distribution on the Certificates.
--------------------------------------
If on any Determination Date, the Trustee determines that there are no
Outstanding Mortgage Loans and no other funds or assets in the Trust Fund
other than the funds in the Collection Accounts and Certificate Account, the
Trustee shall promptly send a final distribution notice to each
Certificateholder. If Olympus elects to terminate the Trust Fund pursuant to
Section 9.01, at least 20 days prior to the date notice is to be mailed to the
affected Certificateholders, Olympus shall notify any other Servicer and the
Trustee of the date it intends to terminate the Trust Fund and of the
applicable repurchase price of the Mortgage Loans and REO Properties.
Notice of any termination of the Trust Fund, specifying the Distribution
Date on which Certificateholders may surrender their Certificates for payment
of the final distribution and cancellation, shall be given promptly by the
Trustee by letter to Certificateholders mailed not earlier than the 15th day
and not later than the 25th day of the month next preceding the month of such
final distribution. Any such notice shall specify (a) the Distribution Date
upon which final distribution on the Certificates will be made upon
presentation and surrender of Certificates
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at the office therein designated, (b) the amount of such final distribution,
(c) the location of the office or agency at which such presentation and
surrender must be made, and (d) that the Record Date otherwise applicable to
such Distribution Date is not applicable, distributions being made only upon
presentation and surrender of the Certificates at the office therein
specified. The Trustee shall give such notice to each Rating Agency at the
time such notice is given to Certificateholders.
Upon presentation and surrender of the Certificates, the Trustee shall
cause to be distributed to the Certificateholders of each Class, in each case
on the final Distribution Date in proportion to their respective Percentage
Interests, with respect to Certificateholders of the same Class, an amount
equal to (i) as to each Class of Offered Certificates, (A) an amount equal to
the Class Principal Balance thereof plus Current Interest and any Carryforward
Interest in accordance with the priority of distributions set forth in Section
4.02 and (B) to the extent of available funds (other than funds described in
clause (ii) below) after the distributions in clause (i)(A) above, the amounts
referred to and in the order described in Section 4.02(e)(ii). through (xiii)
and (ii) as to the Class X Certificates, the amount due to the Class X
Certificate under this Agreement, not paid (but in no way exceeding the amount
in the Collection Account).
In the event that any affected Certificateholders shall not surrender
Certificates for cancellation within six months after the date specified in
the above mentioned written notice, the Trustee shall give a second written
notice to the remaining Certificateholders to surrender their Certificates for
cancellation and receive the final distribution with respect thereto. If
within six months after the second notice all the applicable Certificates
shall not have been surrendered for cancellation, the Trustee may take
reasonable and appropriate steps, or may appoint an agent to take reasonable
and appropriate steps, to contact the remaining Certificateholders concerning
surrender of their Certificates, and the cost thereof shall be paid out of the
funds and other assets which remain a part of the Trust Fund. If within one
year after the second notice all Certificates shall not have been surrendered
for cancellation, the Class R Certificateholders shall be entitled to all
unclaimed funds and other assets of the Trust Fund which remain subject hereto
and the Trustee shall be discharged from all further liability with respect to
the Certificates and this Agreement.
SECTION 9.03 Additional Termination Requirements.
-----------------------------------
(a) In the event Olympus exercises its purchase option with respect to
the Mortgage Loans as provided in Section 9.01, at such time as the Mortgage
Loans are so purchased, the Trust Fund shall be terminated in accordance with
the following additional requirements, unless the Trustee has been provided
with an Opinion of Counsel, at the expense of Olympus, to the effect that the
failure to comply with the requirements of this Section 9.03 will not (i)
result in the imposition of taxes on "prohibited transactions" on any REMIC as
defined in Section 860E of the Code, or (ii) cause any REMIC to fail to
qualify as a REMIC at any time that any Certificates are outstanding:
(1) Within 90 days prior to the final Distribution Date set
forth in the notice given by the Trustee under Section 9.02, the
Depositor shall prepare and the Trustee shall adopt a plan of
complete liquidation within the meaning of Section 860F(a)(4) of the
Code which, as evidenced by an Opinion of Counsel
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(which opinion shall not be an expense of the Trustee or the Trust
Fund), meets the requirements of a qualified liquidation;
(2) Within 90 days after the time of adoption of such a plan of
complete liquidation, the Trustee shall sell all of the assets of
the Trust Fund to the Depositor for cash in accordance with Section
9.01; and
(3) On the date specified for final payment of the
Certificates, the Trustee shall, after payment of any unreimbursed
Advances, Servicing Advances, Servicing Fees or other fee
compensation payable to the Servicer pursuant to this Agreement,
make final distributions of principal and interest on the
Certificates in accordance with Section 4.02 and distribute or
credit, or cause to be distributed or credited, to the Holders of
the Residual Certificates all cash on hand after such final payment
(other than the cash retained to meet claims), and the Trust Fund
(and each REMIC) shall terminate at that time.
(b) The Trustee as agent for each REMIC hereby agrees to adopt and sign
such a plan of complete liquidation upon the written request of the Depositor,
and the receipt of the Opinion of Counsel referred to in Section 9.03(a)(1)
and to take such other action in connection therewith as may be reasonably
requested by the Depositor.
(c) By their acceptance of the Certificates, the Holders thereof hereby
authorize the Depositor to prepare and the Trustee to adopt and sign a plan of
complete liquidation.
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ARTICLE X
MISCELLANEOUS PROVISIONS
SECTION 10.01 Amendment.
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This Agreement may be amended from time to time by the Depositor, the
Servicers, the Seller and the Trustee without the consent of any of the
Certificateholders (i) to cure any ambiguity or mistake, (ii) to correct any
defective provision herein or to supplement any provision herein which may be
inconsistent with any other provision herein, (iii) to add to the duties of
the Depositor, the Seller or the Servicers, (iv) in connection with the
appointment of a successor Servicer, to modify, eliminate or add to any of the
servicing provisions contained in this Agreement, providing the Rating
Agencies confirm the then current rating of the Certificates giving effect to
such amendment, (v) to add any other provisions with respect to matters or
questions arising hereunder or (vi) to modify, alter, amend, add to or rescind
any of the terms or provisions contained in this Agreement; and, provided,
further, that any action pursuant to clauses (v) or (vi) above shall not, as
evidenced by an Opinion of Counsel (which Opinion of Counsel shall not be an
expense of the Trustee or the Trust Fund, but shall be at the expense of the
party proposing such amendment), adversely affect in any material respect the
interests of any Certificateholder; provided, however, that no such Opinion of
Counsel shall be required if the Person requesting the amendment obtains a
letter from each Rating Agency stating that the amendment would not result in
the downgrading or withdrawal of the respective ratings then assigned to the
Certificates (without regard to the FSA Policy). The Trustee, the Depositor,
the Seller and the Servicers also may at any time and from time to time amend
this Agreement without the consent of the Certificateholders to modify,
eliminate or add to any of its provisions to such extent as shall be necessary
or helpful to (i) maintain the qualification of any REMIC as a REMIC under the
Code, (ii) avoid or minimize the risk of the imposition of any tax on any
REMIC pursuant to the Code that would be a claim at any time prior to the
final redemption of the Certificates or (iii) comply with any other
requirements of the Code; provided, that the Trustee has been provided an
Opinion of Counsel, which opinion shall be an expense of the party requesting
such opinion but in any case shall not be an expense of the Trustee or the
Trust Fund, to the effect that such action is necessary or helpful to, as
applicable, (i) maintain such qualification, (ii) avoid or minimize the risk
of the imposition of such a tax or (iii) comply with any such requirements of
the Code.
Notwithstanding the foregoing, FSA's written consent shall be required
for any amendment that adversely affects in any respect the rights and
interest hereunder of FSA or of the Class A-1, Class A-2, Class A-3 and Class
A-4 Certificateholders (without regard to the FSA Policy).
This Agreement may also be amended from time to time by the Depositor,
the Servicers, the Seller and the Trustee with the consent of the Holders of
each Class of Certificates affected thereby evidencing 66% of the aggregate
Class Principal Balance of such Class for the purpose of adding any provisions
to or changing in any manner or eliminating any of the provisions of this
Agreement or of modifying in any manner the rights of the Holders of
Certificates; provided, however, that no such amendment shall (i) reduce in
any manner the amount of, or delay the timing of, payments required to be
distributed on any Certificate without the consent of the
126
Holder of such Certificate, or (ii) reduce the aforesaid percentages of
Certificates the Holders of which are required to consent to any such
amendment, without the consent of the Holders of all such Certificates then
outstanding.
Notwithstanding any contrary provision of this Agreement, the Trustee
shall not consent to any amendment to this Agreement unless it shall have
first received an Opinion of Counsel, which opinion shall not be an expense of
the Trustee or the Trust Fund, but shall be at the expense of the party
requesting such amendment, to the effect that such amendment will not cause
the imposition of any tax on any REMIC or the Certificateholders or cause any
REMIC to fail to qualify as a REMIC at any time that any Certificates are
outstanding.
Promptly after the execution of any amendment to this Agreement requiring
the consent of Certificateholders, the Trustee shall furnish written
notification of the substance or a copy of such amendment to each
Certificateholder and each Rating Agency.
It shall not be necessary for the consent of Certificateholders under
this Section 10.01 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.
Nothing in this Agreement shall require the Trustee to enter into an
amendment without receiving an Opinion of Counsel (which Opinion shall not be
an expense of the Trustee or the Trust Fund), satisfactory to the Trustee that
(i) such amendment is permitted and is not prohibited by this Agreement and
that all requirements for amending this Agreement have been complied with; and
(ii) either (A) the amendment does not adversely affect in any material
respect the interests of any Certificateholder or (B) the conclusion set forth
in the immediately preceding clause (A) is not required to be reached pursuant
to this Section 10.01. The Trustee shall have no obligation to consent to any
amendment that it reasonably believes will materially and adversely affect its
rights or immunities under this Agreement.
Notwithstanding anything in this Section 10.01 to the contrary, the
rights and obligations of the Special Servicer contained in this Agreement
(including, without limitation, as set forth in Section 3.03 hereof) may not
be amended, modified or supplemented in any manner without the prior written
consent of the Special Servicer.
SECTION 10.02 Recordation of Agreement; Counterparts.
--------------------------------------
This Agreement is subject to recordation in all appropriate public
offices for real property records in all the counties or other comparable
jurisdictions in which any or all of the properties subject to the Mortgages
are situated, and in any other appropriate public recording office or
elsewhere, such recordation to be effected by the Depositor at its expense,
but only upon direction by the Trustee (acting at the direction of holders of
Certificates evidencing a majority of the aggregate Class Principal Balance)
accompanied by an Opinion of Counsel (at the Depositor's expense) to the
effect that such recordation materially and beneficially affects the interests
of the Certificateholders.
127
For the purpose of facilitating the recordation of this Agreement as
herein provided and for other purposes, this Agreement may be executed
simultaneously in any number of counterparts, each of which counterparts shall
be deemed to be an original, and such counterparts shall constitute but one
and the same instrument.
SECTION 10.03 Governing Law.
-------------
THIS AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE
SUBSTANTIVE LAWS OF THE STATE OF NEW YORK APPLICABLE TO AGREEMENTS MADE AND TO
BE PERFORMED IN THE STATE OF NEW YORK AND THE OBLIGATIONS, RIGHTS AND REMEDIES
OF THE PARTIES HERETO AND THE CERTIFICATEHOLDERS SHALL BE DETERMINED IN
ACCORDANCE WITH SUCH LAWS.
SECTION 10.04 Intention of Parties.
--------------------
It is the express intent of the parties hereto that the conveyance of the
Trust Fund, including the Mortgage Loans, by the Depositor to the Trustee be,
and be construed as, an absolute sale thereof. It is, further, not the
intention of the parties that such conveyance be deemed a pledge thereof.
However, in the event that, notwithstanding the intent of the parties, such
assets are held to be the property of the Depositor, or if for any other
reason this Agreement is held or deemed to create a security interest in
either such assets, then (i) this Agreement shall be deemed to be a security
agreement within the meaning of the Uniform Commercial Code of the State of
New York and (ii) the conveyance provided for in this Agreement shall be
deemed to be an assignment and a grant by the Depositor to the Trustee, for
the benefit of the Certificateholders, of a security interest in all of the
assets transferred, whether now owned or hereafter acquired.
The Depositor for the benefit of the Certificateholders shall, to the
extent consistent with this Agreement, take such actions as may be necessary
to ensure that, if this Agreement were deemed to create a security interest in
the Trust Fund, such security interest would be deemed to be a perfected
security interest of first priority under applicable law and will be
maintained as such throughout the term of the Agreement. The Depositor shall
arrange for filing any Uniform Commercial Code continuation statements in
connection with any security interest granted or assigned to the Trustee for
the benefit of the Certificateholders.
SECTION 10.05 Notices.
-------
The Trustee shall use its best efforts to promptly provide notice to each
Rating Agency with respect to each of the following of which it has actual
knowledge:
1. Any material change or amendment to this Agreement;
2. The occurrence of any Event of Default that has not been cured;
3. The resignation or termination of the Servicer or the Trustee and the
appointment of any successor;
128
4. The repurchase or substitution of Mortgage Loans pursuant to Sections
2.02 and 2.03; and
5. The final payment to Certificateholders.
In addition, the Trustee shall promptly furnish to each Rating Agency
copies of the following:
1. Each report to Certificateholders described in Section 4.05 and 3.21;
2. Each annual statement as to compliance described in Section 3.17;
3. Each annual independent public accountants' servicing report described
in Section 3.18; and
4. Any notice of a purchase of a Mortgage Loan pursuant to Section 2.02,
2.03 or 3.11.
All directions, demands and notices hereunder shall be in writing and
shall be deemed to have been duly given when delivered to (a) in the case of
the Depositor, 1l Madison Avenue, 4th Floor, New York, New York 10010,
Attention: Xxxxxxx X. Xxxxxx (with a copy to Credit Suisse First Boston
Mortgage Securities Corp., 00 Xxxxxxx Xxxxxx, 0xx Xxxxx, Xxx Xxxx, Xxx Xxxx
00000, Attention: Office of the General Counsel), (b) in the case of the
Trustee, at the Corporate Trust Office or such other address as the Trustee
may hereafter furnish to the Depositor and the Servicer, (c) in the case of
each of the Rating Agencies, the address specified therefor in the definition
corresponding to the name of such Rating Agency, (d) in the case of Fairbanks,
if by regular mail: Fairbanks Capital Corp., X.X. Xxx 00000, Xxxx Xxxx Xxxx,
Xxxx 00000-0000, and if by courier: Fairbanks Capital Corp., 0000 Xxxxx Xxxx
Xxxxxx, Xxxx Xxxx Xxxx, Xxxx 00000-0000, Attention: Xxxx Xxxxxx, (e) in the
case of Olympus, Olympus Servicing, L.P., 0000 Xxxxx Xxxxx Xxxxx, Xxxxx 000-X
Xxxxxx, Xxxxx 00000, Attention: Xxxx Xxxx. Notices to Certificateholders shall
be deemed given when mailed, first class postage prepaid, to their respective
addresses appearing in the Certificate Register.
SECTION 10.06 Severability of Provisions.
--------------------------
If any one or more of the covenants, agreements, provisions or terms of
this Agreement shall be for any reason whatsoever held invalid, then such
covenants, agreements, provisions or terms shall be deemed severable from the
remaining covenants, agreements, provisions or terms of this Agreement and
shall in no way affect the validity or enforceability of the other provisions
of this Agreement or of the Certificates or the rights of the Holders thereof.
SECTION 10.07 Assignment.
----------
Notwithstanding anything to the contrary contained herein, except as
provided in Sections 3.22, 6.02 and 6.04, this Agreement may not be assigned
by a Servicer without the prior written consent of the Trustee and Depositor.
129
SECTION 10.08 Limitation on Rights of Certificateholders.
------------------------------------------
The death or incapacity of any Certificateholder shall not operate to
terminate this Agreement or the trust created hereby, nor entitle such
Certificateholder's legal representative or heirs to claim an accounting or to
take any action or commence any proceeding in any court for a petition or
winding up of the trust created hereby, or otherwise affect the rights,
obligations and liabilities of the parties hereto or any of them.
No Certificateholder shall have any right to vote (except as provided
herein) or in any manner otherwise control the operation and management of the
Trust Fund, or the obligations of the parties hereto, nor shall anything
herein set forth or contained in the terms of the Certificates be construed so
as to constitute the Certificateholders from time to time as partners or
members of an association; nor shall any Certificateholder be under any
liability to any third party by reason of any action taken by the parties to
this Agreement pursuant to any provision hereof.
No Certificateholder shall have any right by virtue or by availing itself
of any provisions of this Agreement to institute any suit, action or
proceeding in equity or at law upon or under or with respect to this
Agreement, unless such Holder previously shall have given to the Trustee a
written notice of an Event of Default and of the continuance thereof, as
herein provided, and unless the Holders of Certificates evidencing not less
than 25% of the Voting Rights evidenced by the Certificates shall also have
made written request to the Trustee to institute such action, suit or
proceeding in its own name as Trustee hereunder and shall have offered to the
Trustee such reasonable indemnity as it may require against the costs,
expenses, and liabilities to be incurred therein or thereby, and the Trustee,
for 60 days after its receipt of such notice, request and offer of indemnity
shall have neglected or refused to institute any such action, suit or
proceeding; it being understood and intended, and being expressly covenanted
by each Certificateholder with every other Certificateholder and the Trustee,
that no one or more Holders of Certificates shall have any right in any manner
whatever by virtue or by availing itself or themselves of any provisions of
this Agreement to affect, disturb or prejudice the rights of the Holders of
any other of the Certificates, or to obtain or seek to obtain priority over or
preference to any other such Holder or to enforce any right under this
Agreement, except in the manner herein provided and for the common benefit of
all Certificateholders. For the protection and enforcement of the provisions
of this Section 10.08, each and every Certificateholder and the Trustee shall
be entitled to such relief as can be given either at law or in equity.
SECTION 10.09 Certificates Nonassessable and Fully Paid.
-----------------------------------------
It is the intention of the Depositor that Certificateholders shall not be
personally liable for obligations of the Trust Fund, that the interests in the
Trust Fund represented by the Certificates shall be nonassessable for any
reason whatsoever, and that the Certificates, upon due authentication thereof
by the Trustee pursuant to this Agreement, are and shall be deemed fully paid.
130
SECTION 10.10 Protection of Assets.
--------------------
(a) Except for transactions and activities entered into in connection
with the securitization that is the subject of this agreement, the trust
created by this agreement is not authorized and has no power to:
(i) borrow money or issue debt;
(ii) merge with another entity, reorganize, liquidate or sell
assets; or
(iii) engage in any business or activities.
(b) Each party to this agreement agrees that it will not file an
involuntary bankruptcy petition against the Trust Fund or initiate any other
form of insolvency proceeding until after the Certificates have been paid.
131
IN WITNESS WHEREOF, the Depositor, the Trustee, the Seller, the Servicers
and the Special Servicer have caused their names to be signed hereto by their
respective officers thereunto duly authorized as of the day and year first
above written.
CREDIT SUISSE FIRST BOSTON MORTGAGE
SECURITIES CORP.,
as Depositor
By: ____________________________________
Name:
Title:
U.S. BANK NATIONAL ASSOCIATION,
not in its individual capacity but
solely as Trustee
By: ____________________________________
Name:
Title:
DLJ MORTGAGE CAPITAL, INC.,
as Seller
By: ____________________________________
Name:
Title:
OLYMPUS SERVICING, L.P.,
as a Servicer and as the Special
Servicer
By: ____________________________________
Name:
Title:
FAIRBANKS CAPITAL CORP.,
as a Servicer
By: ____________________________________
Name:
Title:
000
XXXXX XX XXX XXXX )
: ss.:
COUNTY OF NEW YORK)
On this ___ day of May, 2002, before me, personally appeared
____________, known to me to be a ______________ of Credit Suisse First Boston
Mortgage Securities Corp., one of the corporations 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.
______________________________________
Notary Public
[NOTARIAL SEAL]
STATE OF NEW YORK )
: ss.:
COUNTY OF NEW YORK)
On the ___ day of May, 2002, before me, personally appeared __________,
known to me to be a ______________________ of DLJ Mortgage Capital, Inc., one
of the corporations 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.
______________________________________
Notary Public
[NOTARIAL SEAL]
STATE OF MINNESOTA )
: ss.:
COUNTY OF XXXXXX )
On the ____ of May, 2002 before me, a Notary Public in and for said
State, personally appeared ______________ known to me to be a _____________ of
U.S. Bank 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.
______________________________________
Notary Public
[NOTARIAL SEAL]
STATE OF TEXAS )
: ss.:
COUNTY OF XXXXXX )
On the ____ of May, 2002 before me, a Notary Public in and for said
State, personally appeared ______________ known to me to be a _____________ of
Olympus Servicing, L.P., the Delaware limited partnership that executed the
within instrument and also known to me to be the person who executed it on
behalf of said Delaware limited partnership, and acknowledged to me that such
Delaware limited partnership executed the within instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official
seal the day and year in this certificate first above written.
______________________________________
Notary Public
[NOTARIAL SEAL]
STATE OF FLORIDA )
: ss.:
COUNTY OF PALM BEACH )
On the ____ of May, 2002 before me, a Notary Public in and for said
State, personally appeared ______________ known to me to be a _____________ of
Fairbanks Capital Corp., one of the parties that executed the within
instrument and also known to me to be the person who executed it on behalf of
said federally chartered savings bank, and acknowledged to me that such
federally chartered savings bank executed the within instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official
seal the day and year in this certificate first above written.
______________________________________
Notary Public
[NOTARIAL SEAL]
EXHIBIT A
[FORM OF CLASS A-[o] CERTIFICATE]
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO ISSUER OR ITS
AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT, AND ANY CERTIFICATE
ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO
CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A "REGULAR
INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT," AS THOSE TERMS ARE
DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL REVENUE CODE
OF 1986, AS AMENDED (THE "CODE").
A-1
Certificate No. :
Cut-off Date : May 1, 2002
First Distribution Date : June 25, 2002
Initial Certificate Principal Balance
of this Certificate
("Denomination") :
Initial Certificate Principal Balances
of all Certificates
of this Class :
CUSIP :
Pass-Through Rate :
Maturity Date : October 2032
A-2
CREDIT SUISSE FIRST BOSTON MORTGAGE SECURITIES CORP.
CSFB ABS Trust Series 2002-HE16
CSFB Mortgage Pass-Through Certificates, Series 2002-HE16
Class A-[o]
evidencing a percentage interest in the distributions allocable to
the Certificates of the above-referenced Class with respect to a
Trust Fund consisting primarily of a pool of fixed rate and
adjustable rate conventional mortgage loans (the "Mortgage Loans")
secured by first liens on one- to four-family residential properties.
Credit Suisse First Boston Mortgage Securities Corp., as Depositor
Principal in respect of this Certificate is distributable
monthly as set forth herein. Accordingly, the Certificate Principal Balance at
any time may be less than the Certificate Principal Balance as set forth
herein. This Certificate does not evidence an obligation of, or an interest
in, and is not guaranteed by the Depositor, the Seller, the Servicers, the
Trustee or the Special Servicer referred to below or any of their respective
affiliates. Neither this Certificate nor the Mortgage Loans are guaranteed or
insured by any governmental agency or instrumentality.
This certifies that CEDE & CO. is the registered owner of
the Percentage Interest evidenced by this Certificate (obtained by dividing
the denomination of this Certificate by the aggregate of the denominations of
all Certificates of the Class to which this Certificate belongs) in certain
monthly distributions with respect to a Trust Fund consisting primarily of the
Mortgage Loans deposited by Credit Suisse First Boston Mortgage Securities
Corp. (the "Depositor"). The Trust Fund was created pursuant to a Pooling and
Servicing Agreement dated as of the Cut-off Date specified above (the
"Agreement") among the Depositor, DLJ Mortgage Capital, Inc., as seller (in
such capacity, "Seller"), Olympus Servicing, L.P., as a servicer (in such
capacity, a "Servicer") and as the special servicer (in such capacity, the
"Special Servicer"), Fairbanks Capital Corp., as a servicer (in such capacity,
a "Servicer") and U.S. Bank National Association as trustee (the "Trustee").
To the extent not defined herein, the capitalized terms used herein have the
meanings assigned in the Agreement. This Certificate is issued under and is
subject to the terms, provisions and conditions of the Agreement, to which
Agreement the Holder of this Certificate by virtue of the acceptance hereof
assents and by which such Holder is bound.
Reference is hereby made to the further provisions of this
Certificate set forth on the reverse hereof, which further provisions shall
for all purposes have the same effect as if set forth at this place.
This Certificate shall not be entitled to any benefit under
the Agreement or be valid for any purpose unless manually countersigned by an
authorized signatory of the Trustee.
A-3
IN WITNESS WHEREOF, the Trustee has caused this Certificate
to be duly executed.
Dated: May __, 2002.
U.S. BANK NATIONAL ASSOCIATION,
as Trustee
By: ______________________________________
CERTIFICATE OF AUTHENTICATION
This is one of the Certificates referred to in the within-mentioned
Agreement.
Date: May __, 2002
U.S. BANK NATIONAL ASSOCIATION,
as Trustee
By: ___________________________
Authorized Signatory
A-4
CREDIT SUISSE FIRST BOSTON MORTGAGE SECURITIES CORP.
CSFB ABS Trust Series 2002-HE16
CSFB Mortgage Pass-Through Certificates, Series 2002-HE16
Class A-[o]
This Certificate is one of a duly authorized issue of
Certificates designated as CSFB ABS Trust Series 2002-HE16, CSFB Mortgage
Pass-Through Certificates, Series 2002-HE16, of the Series specified on the
face hereof (herein collectively called the "Certificates"), and representing
a beneficial ownership interest in the Trust Fund created by the Agreement.
The Certificateholder, by its acceptance of this
Certificate, agrees that it will look solely to the funds on deposit in the
Certificate Account for payment hereunder and that the Trustee is not liable
to the Certificateholders for any amount payable under this Certificate or the
Agreement or, except as expressly provided in the Agreement, subject to any
liability under the Agreement.
This Certificate does not purport to summarize the Agreement
and reference is made to the Agreement for the interests, rights and
limitations of rights, benefits, obligations and duties evidenced thereby, and
the rights, duties and immunities of the Trustee.
Pursuant to the terms of the Agreement, a distribution will
be made on the 25th day of each month, or, if such 25th day is not a Business
Day, the Business Day immediately following (the "Distribution Date"),
commencing on the first Distribution Date specified on the face hereof, to the
Person in whose name this Certificate is registered at the close of business
on the applicable Record Date in an amount equal to the product of the
Percentage Interest evidenced by this Certificate and the amount required to
be distributed to Holders of Certificates of the Class to which this
Certificate belongs on such Distribution Date pursuant to the Agreement. The
Record Date applicable to each Distribution Date is (1) with respect to all
Definitive Certificates, the last business day of the month preceding the
Distribution Date and (2) with respect to all Certificates held in Book-Entry
Form only, the Business Day immediately preceding the Distribution Date.
Distributions on this Certificate shall be made by wire
transfer of immediately available funds to the account of the Holder hereof at
a bank or other entity having appropriate facilities therefor, if such
Certificateholder shall have so notified the Trustee in writing at least five
Business Days prior to the related Record Date and such Certificateholder
shall satisfy the conditions to receive such form of payment set forth in the
Agreement, or, if not, by check mailed by first class mail to the address of
such Certificateholder appearing in the Certificate Register. The final
distribution on each Certificate will be made in like manner, but only upon
presentment and surrender of such Certificate at the Corporate Trust Office or
such other location specified in the notice to Certificateholders of such
final distribution.
The Agreement permits, with certain exceptions therein
provided, the amendment thereof and the modification of the rights and
obligations of the Trustee and the rights of the Certificateholders under the
Agreement at any time by the Depositor, the Servicers, the Seller and the
Trustee with the consent of the Holders of Certificates affected by such
amendment evidencing the requisite Percentage Interest, as provided in the
Agreement. Any such consent by
A-5
the Holder of this Certificate shall be conclusive and binding on such Holder
and upon all future Holders of this Certificate and of any Certificate issued
upon the transfer hereof or in exchange therefor or in lieu hereof whether or
not notation of such consent is made upon this Certificate. The Agreement also
permits the amendment thereof, in certain limited circumstances, without the
consent of the Holders of any of the Certificates.
As provided in the Agreement and subject to certain
limitations therein set forth, the transfer of this Certificate is registrable
in the Certificate Register of the Trustee upon surrender of this Certificate
for registration of transfer at the Corporate Trust Office or the office or
agency maintained by the Trustee in St. Xxxx, Minnesota, accompanied by a
written instrument of transfer in form satisfactory to the Trustee and the
Certificate Registrar duly executed by the holder hereof or such holder's
attorney duly authorized in writing, and thereupon one or more new
Certificates of the same Class in authorized denominations and evidencing the
same aggregate Percentage Interest in the Trust Fund will be issued to the
designated transferee or transferees.
The Certificates are issuable only as registered
Certificates without coupons in denominations specified in the Agreement. As
provided in the Agreement and subject to certain limitations therein set
forth, Certificates are exchangeable for new Certificates of the same Class in
authorized denominations and evidencing the same aggregate Percentage
Interest, as requested by the Holder surrendering the same.
No service charge will be made for any such registration of
transfer or exchange, but the Trustee may require payment of a sum sufficient
to cover any tax or other governmental charge payable in connection therewith.
The Depositor, the Servicers, the Special Servicer, FSA, the
Seller, the Trustee, and any agent of the Depositor or the Trustee may treat
the Person in whose name this Certificate is registered as the owner hereof
for all purposes, and none of the Servicers, the Special Servicer, FSA, the
Seller, the Depositor, the Trustee or any such agent shall be affected by any
notice to the contrary.
On any Distribution Date on which the aggregate Stated
Principal Balance of the Mortgage Loans is less than 10% of the Aggregate Loan
Balance as of the Cut-off Date and the amount on deposit in the Prefunding
Account on the Closing Date, Olympus will have the option to repurchase, in
whole, from the Trust Fund all remaining Mortgage Loans and all property
acquired in respect of the Mortgage Loans at a purchase price determined as
provided in the Agreement. In the event that no such optional termination
occurs, the obligations and responsibilities created by the Agreement will
terminate upon the later of the maturity or other liquidation (or any advance
with respect thereto) of the last Mortgage Loan remaining in the Trust Fund or
the disposition of all property in respect thereof and the distribution to
Certificateholders of all amounts required to be distributed pursuant to the
Agreement. In no event, however, will the trust created by the Agreement
continue beyond the expiration of 21 years from the death of the last survivor
of the descendants living at the date of the Agreement of a certain person
named in the Agreement.
A-6
Any term used herein that is defined in the Agreement shall
have the meaning assigned in the Agreement, and nothing herein shall be deemed
inconsistent with that meaning.
A-7
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto ______________________________________________________________
_______________________________________________________________________________
_______________________________________________________________________________
_______________________________________________________________________________
_______________________________________________________________________________
(Please print or typewrite name and address including postal zip code of
assignee)
the Percentage Interest evidenced by the within Certificate and hereby
authorizes the transfer of registration of such Percentage Interest to
assignee on the Certificate Register of the Trust Fund.
I (We) further direct the Trustee to issue a new Certificate of a like
denomination and Class, to the above named assignee and deliver such
Certificate to the following address:
______________________________________________________________________________
Dated:
-------------------------------------
Signature by or on behalf of assignor
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of
distribution:
Distributions shall be made, by wire transfer or otherwise, in immediately
available funds to ___________________________________________________________
_____________________________________________________________________________,
for the account of __________________________________________________________,
account number ______________, or, if mailed by check, to ____________________
______________________________________________________________________________
______________________________________________________________________________.
Applicable statements should be mailed to______________________________________
______________________________________________________________________________
______________________________________________________________________________.
This information is provided by, the assignee named above, or, as its agent.
A-8
EXHIBIT B
[FORM OF CLASS M-[o] CERTIFICATE]
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO ISSUER OR ITS
AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT, AND ANY CERTIFICATE
ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO
CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A "REGULAR
INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT," AS THOSE TERMS ARE
DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL REVENUE CODE
OF 1986, AS AMENDED (THE "CODE").
THIS CERTIFICATE IS SUBORDINATED IN RIGHT OF PAYMENT TO CERTAIN CERTIFICATES
AS DESCRIBED IN THE AGREEMENT REFERRED TO HEREIN.
B-1
Certificate No. :
Cut-off Date : May 1, 2002
First Distribution Date : June 25, 2002
Initial Certificate Principal Balance
of this Certificate
("Denomination") :
Initial Certificate Principal Balances
of all Certificates
of this Class :
CUSIP :
Interest Rate :
Maturity Date : October 2032
B-2
CREDIT SUISSE FIRST BOSTON MORTGAGE SECURITIES CORP.
CSFB ABS Trust Series 2002-HE16
CSFB Mortgage Pass-Through Certificates, Series 2002-HE16
Class M-[o]
evidencing a percentage interest in the distributions allocable to the
Certificates of the above-referenced Class with respect to a Trust Fund
consisting primarily of a pool of fixed rate and adjustable rate
conventional mortgage loans (the "Mortgage Loans") secured by first
liens on one- to four-family residential properties.
Credit Suisse First Boston Mortgage Securities Corp., as Depositor
Principal in respect of this Certificate is distributable monthly as
set forth herein. Accordingly, the Certificate Principal Balance at any time
may be less than the Certificate Principal Balance as set forth herein. This
Certificate does not evidence an obligation of, or an interest in, and is not
guaranteed by the Depositor, the Seller, the Servicers, the Trustee or the
Special Servicer referred to below or any of their respective affiliates.
Neither this Certificate nor the Mortgage Loans are guaranteed or insured by
any governmental agency or instrumentality.
This certifies that CEDE & CO. is the registered owner of
the Percentage Interest evidenced by this Certificate (obtained by dividing
the denomination of this Certificate by the aggregate of the denominations of
all Certificates of the Class to which this Certificate belongs) in certain
monthly distributions with respect to a Trust Fund consisting primarily of the
Mortgage Loans deposited by Credit Suisse First Boston Mortgage Securities
Corp. (the "Depositor"). The Trust Fund was created pursuant to a Pooling and
Servicing Agreement dated as of the Cut-off Date specified above (the
"Agreement") among the Depositor, DLJ Mortgage Capital, Inc., as seller (in
such capacity, "Seller"), Olympus Servicing, L.P., as a servicer (in such
capacity, a "Servicer") and as the special servicer (in such capacity, the
"Special Servicer"), Fairbanks Capital Corp., as a servicer (in such capacity,
a "Servicer") and U.S. Bank National Association as trustee (the "Trustee").
To the extent not defined herein, the capitalized terms used herein have the
meanings assigned in the Agreement. This Certificate is issued under and is
subject to the terms, provisions and conditions of the Agreement, to which
Agreement the Holder of this Certificate by virtue of the acceptance hereof
assents and by which such Holder is bound.
Reference is hereby made to the further provisions of this
Certificate set forth on the reverse hereof, which further provisions shall
for all purposes have the same effect as if set forth at this place.
This Certificate shall not be entitled to any benefit under
the Agreement or be valid for any purpose unless manually countersigned by an
authorized signatory of the Trustee.
B-3
IN WITNESS WHEREOF, the Trustee has caused this Certificate
to be duly executed.
Dated: May __, 2002.
U.S. BANK NATIONAL ASSOCIATION,
as Trustee
By:______________________________________
Name:
Title:
CERTIFICATE OF AUTHENTICATION
This is one of the Certificates referred to in the within-mentioned
Agreement.
Date: May __, 2002
U.S. BANK NATIONAL ASSOCIATION,
as Trustee
By: ___________________________
Authorized Signatory
B-4
CREDIT SUISSE FIRST BOSTON MORTGAGE SECURITIES CORP.
CSFB ABS Trust Series 2002-HE16
CSFB Mortgage Pass-Through Certificates, Series 2002-HE16
Class M-[o]
This Certificate is one of a duly authorized issue of
Certificates designated as CSFB ABS Trust Series 2002-HE16, CSFB Mortgage
Pass-Through Certificates, Series 2002-HE16, of the Series specified on the
face hereof (herein collectively called the "Certificates"), and representing
a beneficial ownership interest in the Trust Fund created by the Agreement.
The Certificateholder, by its acceptance of this
Certificate, agrees that it will look solely to the funds on deposit in the
Certificate Account for payment hereunder and that the Trustee is not liable
to the Certificateholders for any amount payable under this Certificate or the
Agreement or, except as expressly provided in the Agreement, subject to any
liability under the Agreement.
This Certificate does not purport to summarize the Agreement
and reference is made to the Agreement for the interests, rights and
limitations of rights, benefits, obligations and duties evidenced thereby, and
the rights, duties and immunities of the Trustee.
Pursuant to the terms of the Agreement, a distribution will
be made on the 25th day of each month, or, if such 25th day is not a Business
Day, the Business Day immediately following (the "Distribution Date"),
commencing on the first Distribution Date specified on the face hereof, to the
Person in whose name this Certificate is registered at the close of business
on the applicable Record Date in an amount equal to the product of the
Percentage Interest evidenced by this Certificate and the amount required to
be distributed to Holders of Certificates of the Class to which this
Certificate belongs on such Distribution Date pursuant to the Agreement. The
Record Date applicable to each Distribution Date is (1) with respect to all
Definitive Certificates, the last business day of the month preceding the
Distribution Date and (2) with respect to all Certificates held in Book-Entry
Form only, the Business Day immediately preceding the Distribution Date.
Distributions on this Certificate shall be made by wire
transfer of immediately available funds to the account of the Holder hereof at
a bank or other entity having appropriate facilities therefor, if such
Certificateholder shall have so notified the Trustee in writing at least five
Business Days prior to the related Record Date and such Certificateholder
shall satisfy the conditions to receive such form of payment set forth in the
Agreement, or, if not, by check mailed by first class mail to the address of
such Certificateholder appearing in the Certificate Register. The final
distribution on each Certificate will be made in like manner, but only upon
presentment and surrender of such Certificate at the Corporate Trust Office or
such other location specified in the notice to Certificateholders of such
final distribution.
The Agreement permits, with certain exceptions therein
provided, the amendment thereof and the modification of the rights and
obligations of the Trustee and the rights of the Certificateholders under the
Agreement at any time by the Depositor, the Servicers, the Seller and the
Trustee with the consent of the Holders of Certificates affected by such
amendment evidencing the requisite Percentage Interest, as provided in the
Agreement. Any such consent by
B-5
the Holder of this Certificate shall be conclusive and binding on such Holder
and upon all future Holders of this Certificate and of any Certificate issued
upon the transfer hereof or in exchange therefor or in lieu hereof whether or
not notation of such consent is made upon this Certificate. The Agreement also
permits the amendment thereof, in certain limited circumstances, without the
consent of the Holders of any of the Certificates.
As provided in the Agreement and subject to certain
limitations therein set forth, the transfer of this Certificate is registrable
in the Certificate Register of the Trustee upon surrender of this Certificate
for registration of transfer at the Corporate Trust Office or the office or
agency maintained by the Trustee in St. Xxxx, Minnesota, accompanied by a
written instrument of transfer in form satisfactory to the Trustee and the
Certificate Registrar duly executed by the holder hereof or such holder's
attorney duly authorized in writing, and thereupon one or more new
Certificates of the same Class in authorized denominations and evidencing the
same aggregate Percentage Interest in the Trust Fund will be issued to the
designated transferee or transferees.
The Certificates are issuable only as registered
Certificates without coupons in denominations specified in the Agreement. As
provided in the Agreement and subject to certain limitations therein set
forth, Certificates are exchangeable for new Certificates of the same Class in
authorized denominations and evidencing the same aggregate Percentage
Interest, as requested by the Holder surrendering the same.
No service charge will be made for any such registration of
transfer or exchange, but the Trustee may require payment of a sum sufficient
to cover any tax or other governmental charge payable in connection therewith.
The Depositor, the Servicers, the Special Servicer, the
Seller, the Trustee and any agent of the Depositor or the Trustee may treat
the Person in whose name this Certificate is registered as the owner hereof
for all purposes, and none of the Servicers, the Special Servicer, the Seller,
the Depositor, the Trustee or any such agent shall be affected by any notice
to the contrary.
On any Distribution Date on which the aggregate Stated
Principal Balance of the Mortgage Loans is less than 10% of the Aggregate Loan
Balance as of the Cut-off Date, and the amount on deposit in the Prefunding
Account on the Closing Date, Olympus will have the option to repurchase, in
whole, from the Trust Fund all remaining Mortgage Loans and all property
acquired in respect of the Mortgage Loans at a purchase price determined as
provided in the Agreement. In the event that no such optional termination
occurs, the obligations and responsibilities created by the Agreement will
terminate upon the later of the maturity or other liquidation (or any advance
with respect thereto) of the last Mortgage Loan remaining in the Trust Fund or
the disposition of all property in respect thereof and the distribution to
Certificateholders of all amounts required to be distributed pursuant to the
Agreement. In no event, however, will the trust created by the Agreement
continue beyond the expiration of 21 years from the death of the last survivor
of the descendants living at the date of the Agreement of a certain person
named in the Agreement.
B-6
Any term used herein that is defined in the Agreement shall
have the meaning assigned in the Agreement, and nothing herein shall be deemed
inconsistent with that meaning.
B-7
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto
____________________________________________________________________________
____________________________________________________________________________
____________________________________________________________________________
____________________________________________________________________________
(Please print or typewrite name and address including postal zip code of
assignee)
the Percentage Interest evidenced by the within Certificate and hereby
authorizes the transfer of registration of such Percentage Interest to
assignee on the Certificate Register of the Trust Fund.
I (We) further direct the Trustee to issue a new Certificate of a like
denomination and Class, to the above named assignee and deliver such
Certificate to the following address:
______________________________________________________________________________
Dated:
-------------------------------------
Signature by or on behalf of assignor
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of
distribution:
Distributions shall be made, by wire transfer or otherwise, in immediately
available funds to ___________________________________________________________
______________________________________________________________________________,
for the account of ___________________________________________________________,
account number ________, or, if mailed by check, to __________________________
______________________________________________________________________________
_____________________________________________________________________________.
Applicable statements should be mailed to ____________________________________
______________________________________________________________________________
_____________________________________________________________________________.
This information is provided by, the assignee named above, or, as its agent.
B-8
EXHIBIT C
[FORM OF CLASS B-[o] CERTIFICATE]
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO ISSUER OR ITS
AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT, AND ANY CERTIFICATE
ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO
CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A "REGULAR
INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT," AS THOSE TERMS ARE
DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL REVENUE CODE
OF 1986, AS AMENDED (THE "CODE").
THIS CERTIFICATE IS SUBORDINATED IN RIGHT OF PAYMENT TO CERTAIN CERTIFICATES
AS DESCRIBED IN THE AGREEMENT REFERRED TO HEREIN.
C-1
Certificate No. :
Cut-off Date : May 1, 2002
First Distribution Date : June 25, 2002
Initial Certificate Principal Balance
of this Certificate
("Denomination") :
Initial Certificate Principal Balances
of all Certificates
of this Class :
CUSIP :
Interest Rate :
Maturity Date : October 2032
C-2
CREDIT SUISSE FIRST BOSTON MORTGAGE SECURITIES CORP.
CSFB ABS Trust Series 2002-HE16
CSFB Mortgage Pass-Through Certificates, Series 2002-HE16
Class B-[o]
evidencing a percentage interest in the distributions allocable to the
Certificates of the above-referenced Class with respect to a Trust Fund
consisting primarily of a pool of fixed rate and adjustable rate
conventional mortgage loans (the "Mortgage Loans") secured by first
liens on one- to four-family residential properties.
Credit Suisse First Boston Mortgage Securities Corp., as Depositor
Principal in respect of this Certificate is distributable monthly as
set forth herein. Accordingly, the Certificate Principal Balance at any time
may be less than the Certificate Principal Balance as set forth herein. This
Certificate does not evidence an obligation of, or an interest in, and is not
guaranteed by the Depositor, the Seller, the Servicers, the Trustee or the
Special Servicer referred to below or any of their respective affiliates.
Neither this Certificate nor the Mortgage Loans are guaranteed or insured by
any governmental agency or instrumentality.
This certifies that CEDE & CO. is the registered owner of
the Percentage Interest evidenced by this Certificate (obtained by dividing
the denomination of this Certificate by the aggregate of the denominations of
all Certificates of the Class to which this Certificate belongs) in certain
monthly distributions with respect to a Trust Fund consisting primarily of the
Mortgage Loans deposited by Credit Suisse First Boston Mortgage Securities
Corp. (the "Depositor"). The Trust Fund was created pursuant to a Pooling and
Servicing Agreement dated as of the Cut-off Date specified above (the
"Agreement") among the Depositor, DLJ Mortgage Capital, Inc., as seller (in
such capacity, "Seller"), Olympus Servicing, L.P., as a servicer (in such
capacity, a "Servicer") and as the special servicer (in such capacity, the
"Special Servicer"), Fairbanks Capital Corp., as a servicer (in such capacity,
a "Servicer") and U.S. Bank National Association as trustee (the "Trustee").
To the extent not defined herein, the capitalized terms used herein have the
meanings assigned in the Agreement. This Certificate is issued under and is
subject to the terms, provisions and conditions of the Agreement, to which
Agreement the Holder of this Certificate by virtue of the acceptance hereof
assents and by which such Holder is bound.
No transfer of a Certificate of this Class shall be made
unless the Trustee shall have received either (i) a representation letter from
the transferee of such Certificate, acceptable to and in form and substance
satisfactory to the Trustee, to the effect that such transferee is not an
employee benefit plan subject to Section 406 of ERISA or Section 4975 of the
Code, or a person acting on behalf of any such plan or arrangement or using
the assets of any such plan or arrangement to effect such transfer, which
representation letter shall not be an expense of the Trustee or the Trust
Fund, (ii) if the purchaser is an insurance company, a representation that the
purchaser is an insurance company which is purchasing such Certificates with
funds contained in an "insurance company general account" (as such term is
defined in Section V(e) of Prohibited Transaction Class Exemption 95-60 ("PTCE
95-60")) and that the purchase and holding of such Certificates satisfy the
requirements for exemptive relief under Sections I and III of PTCE 95-60
C-3
or (iii) in the case of any such Certificate presented for registration in the
name of an employee benefit plan subject to ERISA, or Section 4975 of the Code
(or comparable provisions of any subsequent enactments), or a trustee of any
such plan or any other person acting on behalf of any such plan or
arrangement, or using such plan's or arrangement's assets, an Opinion of
Counsel satisfactory to the Trustee to the effect that the purchase or holding
of such Certificate will not result in the assets of the Trust Fund being
deemed to be "plan assets" and subject to the prohibited transaction
provisions of ERISA and the Code and will not subject the Trustee or the
Servicer to any obligation in addition to those undertaken in this Agreement,
which Opinion of Counsel shall not be an expense of the Trustee or the Trust
Fund. Notwithstanding anything else to the contrary herein, any purported
transfer of a Certificate to or on behalf of an employee benefit plan subject
to ERISA or to the Code without the Opinion of Counsel satisfactory to the
Trustee as described above shall be void and of no effect.
Reference is hereby made to the further provisions of this
Certificate set forth on the reverse hereof, which further provisions shall
for all purposes have the same effect as if set forth at this place.
This Certificate shall not be entitled to any benefit under
the Agreement or be valid for any purpose unless manually countersigned by an
authorized signatory of the Trustee.
C-4
IN WITNESS WHEREOF, the Trustee has caused this Certificate
to be duly executed.
Dated: May __, 2002.
U.S. BANK NATIONAL ASSOCIATION,
as Trustee
By:_________________________________
Name:
Title:
CERTIFICATE OF AUTHENTICATION
This is one of the Certificates referred to in the within-mentioned
Agreement.
Date: May __, 2002
U.S. BANK NATIONAL ASSOCIATION,
as Trustee
By: ___________________________
Authorized Signatory
C-5
CREDIT SUISSE FIRST BOSTON MORTGAGE SECURITIES CORP.
CSFB ABS Trust Series 2002-HE16
CSFB Mortgage Pass-Through Certificates, Series 2002-HE16
Class B-[o]
This Certificate is one of a duly authorized issue of
Certificates designated as CSFB ABS Trust Series 2002-HE16, CSFB Mortgage
Pass-Through Certificates, Series 2002-HE16, of the Series specified on the
face hereof (herein collectively called the "Certificates"), and representing
a beneficial ownership interest in the Trust Fund created by the Agreement.
The Certificateholder, by its acceptance of this
Certificate, agrees that it will look solely to the funds on deposit in the
Certificate Account for payment hereunder and that the Trustee is not liable
to the Certificateholders for any amount payable under this Certificate or the
Agreement or, except as expressly provided in the Agreement, subject to any
liability under the Agreement.
This Certificate does not purport to summarize the Agreement
and reference is made to the Agreement for the interests, rights and
limitations of rights, benefits, obligations and duties evidenced thereby, and
the rights, duties and immunities of the Trustee.
Pursuant to the terms of the Agreement, a distribution will
be made on the 25th day of each month, or, if such 25th day is not a Business
Day, the Business Day immediately following (the "Distribution Date"),
commencing on the first Distribution Date specified on the face hereof, to the
Person in whose name this Certificate is registered at the close of business
on the applicable Record Date in an amount equal to the product of the
Percentage Interest evidenced by this Certificate and the amount required to
be distributed to Holders of Certificates of the Class to which this
Certificate belongs on such Distribution Date pursuant to the Agreement. The
Record Date applicable to each Distribution Date is (1) with respect to all
Definitive Certificates, the last business day of the month preceding the
Distribution Date and (2) with respect to all Certificates held in Book-Entry
Form only, the Business Day immediately preceding the Distribution Date.
Distributions on this Certificate shall be made by wire
transfer of immediately available funds to the account of the Holder hereof at
a bank or other entity having appropriate facilities therefor, if such
Certificateholder shall have so notified the Trustee in writing at least five
Business Days prior to the related Record Date and such Certificateholder
shall satisfy the conditions to receive such form of payment set forth in the
Agreement, or, if not, by check mailed by first class mail to the address of
such Certificateholder appearing in the Certificate Register. The final
distribution on each Certificate will be made in like manner, but only upon
presentment and surrender of such Certificate at the Corporate Trust Office or
such other location specified in the notice to Certificateholders of such
final distribution.
The Agreement permits, with certain exceptions therein
provided, the amendment thereof and the modification of the rights and
obligations of the Trustee and the rights of the Certificateholders under the
Agreement at any time by the Depositor, the Servicers, the Seller and the
Trustee with the consent of the Holders of Certificates affected by such
amendment evidencing the requisite Percentage Interest, as provided in the
Agreement. Any such consent by
C-6
the Holder of this Certificate shall be conclusive and binding on such Holder
and upon all future Holders of this Certificate and of any Certificate issued
upon the transfer hereof or in exchange therefor or in lieu hereof whether or
not notation of such consent is made upon this Certificate. The Agreement also
permits the amendment thereof, in certain limited circumstances, without the
consent of the Holders of any of the Certificates.
As provided in the Agreement and subject to certain
limitations therein set forth, the transfer of this Certificate is registrable
in the Certificate Register of the Trustee upon surrender of this Certificate
for registration of transfer at the Corporate Trust Office or the office or
agency maintained by the Trustee in St. Xxxx, Minnesota, accompanied by a
written instrument of transfer in form satisfactory to the Trustee and the
Certificate Registrar duly executed by the holder hereof or such holder's
attorney duly authorized in writing, and thereupon one or more new
Certificates of the same Class in authorized denominations and evidencing the
same aggregate Percentage Interest in the Trust Fund will be issued to the
designated transferee or transferees.
The Certificates are issuable only as registered
Certificates without coupons in denominations specified in the Agreement. As
provided in the Agreement and subject to certain limitations therein set
forth, Certificates are exchangeable for new Certificates of the same Class in
authorized denominations and evidencing the same aggregate Percentage
Interest, as requested by the Holder surrendering the same.
No service charge will be made for any such registration of
transfer or exchange, but the Trustee may require payment of a sum sufficient
to cover any tax or other governmental charge payable in connection therewith.
The Depositor, the Servicers, the Special Servicer, the
Seller, the Trustee and any agent of the Depositor or the Trustee may treat
the Person in whose name this Certificate is registered as the owner hereof
for all purposes, and none of the Servicers, the Special Servicer, the Seller,
the Depositor, the Trustee or any such agent shall be affected by any notice
to the contrary.
On any Distribution Date on which the aggregate Stated
Principal Balance of the Mortgage Loans is less than 10% of the Aggregate Loan
Balance as of the Cut-off Date, and the amount on deposit in the Prefunding
Account on the Closing Date, Olympus will have the option to repurchase, in
whole, from the Trust Fund all remaining Mortgage Loans and all property
acquired in respect of the Mortgage Loans at a purchase price determined as
provided in the Agreement. In the event that no such optional termination
occurs, the obligations and responsibilities created by the Agreement will
terminate upon the later of the maturity or other liquidation (or any advance
with respect thereto) of the last Mortgage Loan remaining in the Trust Fund or
the disposition of all property in respect thereof and the distribution to
Certificateholders of all amounts required to be distributed pursuant to the
Agreement. In no event, however, will the trust created by the Agreement
continue beyond the expiration of 21 years from the death of the last survivor
of the descendants living at the date of the Agreement of a certain person
named in the Agreement.
C-7
Any term used herein that is defined in the Agreement shall
have the meaning assigned in the Agreement, and nothing herein shall be deemed
inconsistent with that meaning.
C-8
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto
______________________________________________________________________________
______________________________________________________________________________
______________________________________________________________________________
______________________________________________________________________________
(Please print or typewrite name and address including postal zip code of
assignee)
the Percentage Interest evidenced by the within Certificate and hereby
authorizes the transfer of registration of such Percentage Interest to
assignee on the Certificate Register of the Trust Fund.
I (We) further direct the Trustee to issue a new Certificate of a like
denomination and Class, to the above named assignee and deliver such
Certificate to the following address:
_____________________________________________________________________________
Dated:
______________________________________
Signature by or on behalf of assignor
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of
distribution:
Distributions shall be made, by wire transfer or otherwise, in immediately
available funds to ___________________________________________________________
_____________________________________________________________________________,
for the account of __________________________________________________________,
account number ______________, or, if mailed by check, to ____________________
______________________________________________________________________________
_____________________________________________________________________________.
Applicable statements should be mailed to ___________________________________
_____________________________________________________________________________
_____________________________________________________________________________.
This information is provided by, the assignee named above, or, as its agent
C-9
EXHIBIT D
[FORM OF RESIDUAL CERTIFICATE]
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A
"RESIDUAL INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT," AS THOSE
TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL
REVENUE CODE OF 1986, AS AMENDED (THE "CODE").
NEITHER THIS CERTIFICATE NOR ANY INTEREST HEREIN MAY BE TRANSFERRED UNLESS THE
PROPOSED TRANSFEREE DELIVERS TO THE TRUSTEE A TRANSFER AFFIDAVIT IN ACCORDANCE
WITH THE PROVISIONS OF THE AGREEMENT REFERRED TO HEREIN.
NEITHER THIS CERTIFICATE NOR ANY INTEREST HEREIN MAY BE TRANSFERRED UNLESS THE
TRANSFEREE DELIVERS TO THE TRUSTEE EITHER A REPRESENTATION LETTER TO THE
EFFECT THAT SUCH TRANSFEREE IS NOT AND IS NOT INVESTING ON BEHALF OF OR WITH
PLAN ASSETS OF AN EMPLOYEE BENEFIT PLAN SUBJECT TO THE EMPLOYEE RETIREMENT
INCOME SECURITY ACT OF 1974, AS AMENDED ("ERISA"), OR A PLAN SUBJECT TO
SECTION 4975 OF THE CODE, OR, IF THE PURCHASER IS AN INSURANCE COMPANY, A
REPRESENTATION IN ACCORDANCE WITH THE PROVISIONS OF THE AGREEMENT REFERRED TO
HEREIN, OR AN OPINION OF COUNSEL IN ACCORDANCE WITH THE PROVISIONS OF THE
AGREEMENT REFERRED TO HEREIN. NOTWITHSTANDING ANYTHING ELSE TO THE CONTRARY
HEREIN, ANY PURPORTED TRANSFER OF THIS CERTIFICATE TO OR ON BEHALF OF AN
EMPLOYEE BENEFIT PLAN SUBJECT TO ERISA OR TO THE CODE WITHOUT THE OPINION OF
COUNSEL SATISFACTORY TO THE TRUSTEE AS DESCRIBED ABOVE SHALL BE VOID AND OF NO
EFFECT.
D-1
Certificate No. :
Cut-off Date : May 1, 2002
First Distribution Date : June 25, 2002
Initial Certificate Principal Balance
of this Certificate
("Denomination") : $
Initial Certificate Principal Balances
of all Certificates
of this Class : $
CUSIP :
Pass-Through Rate :
Maturity Date : October 2032
D-2
CREDIT SUISSE FIRST BOSTON MORTGAGE SECURITIES CORP.
CSFB ABS Trust Series 2002-HE16
CSFB Mortgage Pass-Through Certificates, Series 2002-HE16
Class R
evidencing a percentage interest in the distributions allocable to the
Class R Certificates with respect to a Trust Fund consisting primarily
of a pool of fixed rate and adjustable rate conventional mortgage loans
(the "Mortgage Loans") secured by first liens on one- to four-family
residential properties.
Credit Suisse First Boston Mortgage Securities Corp., as Depositor
Principal in respect of this Certificate is distributable monthly as
set forth herein. Accordingly, the Certificate Principal Balance at any time
may be less than the Certificate Principal Balance as set forth herein. This
Certificate does not evidence an obligation of, or an interest in, and is not
guaranteed by the Depositor, the Seller, the Servicers the Trustee or the
Special Servicer referred to below or any of their respective affiliates.
Neither this Certificate nor the Mortgage Loans are guaranteed or insured by
any governmental agency or instrumentality.
This certifies that CREDIT SUISSE FIRST BOSTON CORPORATION
is the registered owner of the Percentage Interest evidenced by this
Certificate (obtained by dividing the denomination of this Certificate by the
aggregate of the denominations of all Certificates of the Class to which this
Certificate belongs) in certain monthly distributions with respect to a Trust
Fund consisting primarily of the Mortgage Loans deposited by Credit Suisse
First Boston Mortgage Securities Corp. (the "Depositor"). The Trust Fund was
created pursuant to a Pooling and Servicing Agreement dated as of the Cut-off
Date specified above (the "Agreement") among the Depositor, DLJ Mortgage
Capital, Inc., as seller (in such capacity, "Seller"), Olympus Servicing,
L.P., as a servicer (in such capacity, a "Servicer") and as the special
servicer (in such capacity, the "Special Servicer"), Fairbanks Capital Corp.,
as a servicer (in such capacity, a "Servicer") and U.S. Bank National
Association as trustee (the "Trustee"). To the extent not defined herein, the
capitalized terms used herein have the meanings assigned in the Agreement.
This Certificate is issued under and is subject to the terms, provisions and
conditions of the Agreement, to which Agreement the Holder of this Certificate
by virtue of the acceptance hereof assents and by which such Holder is bound.
Any distribution of the proceeds of any remaining assets of
the Trust Fund will be made only upon presentment and surrender of this Class
R Certificate at the Corporate Trust Office or the office or agency maintained
by the Trustee in New York, New York.
No transfer of a Class R Certificate shall be made unless
the Trustee shall have received either (i) a representation letter from the
transferee of such Certificate, acceptable to and in form and substance
satisfactory to the Trustee, to the effect that such transferee is not an
employee benefit plan subject to Section 406 of ERISA or Section 4975 of the
Code, or a person acting on behalf of any such plan or arrangement or using
the assets of any such plan or arrangement to effect such transfer, which
representation letter shall not be an expense of the
D-3
Trustee or the Trust Fund, (ii) if the purchaser is an insurance company, a
representation that the purchaser is an insurance company which is purchasing
such Certificates with funds contained in an "insurance company general
account" (as such term is defined in Section V(e) of Prohibited Transaction
Class Exemption 95-60 ("PTCE 95-60")) and that the purchase and holding of
such Certificates satisfy the requirements for exemptive relief under Sections
I and III of PTCE 95-60, or (iii) in the case of any such Class R Certificate
presented for registration in the name of an employee benefit plan subject to
ERISA, or Section 4975 of the Code (or comparable provisions of any subsequent
enactments), or a trustee of any such plan or any other person acting on
behalf of any such plan or arrangement, or using such plan's or arrangement's
assets, an Opinion of Counsel satisfactory to the Trustee to the effect that
the purchase or holding of such Class R Certificate will not result in the
assets of the Trust Fund being deemed to be "plan assets" and subject to the
prohibited transaction provisions of ERISA and the Code and will not subject
the Trustee or the Servicers to any obligation in addition to those undertaken
in this Agreement, which Opinion of Counsel shall not be an expense of the
Trustee or the Trust Fund. Notwithstanding anything else to the contrary
herein, any purported transfer of a Class R Certificate to or on behalf of an
employee benefit plan subject to ERISA or to the Code without the Opinion of
Counsel satisfactory to the Trustee as described above shall be void and of no
effect.
Each Holder of this Class R Certificate will be deemed to
have agreed to be bound by the restrictions of the Agreement, including but
not limited to the restrictions that (i) each person holding or acquiring any
Ownership Interest in this Class R Certificate must be a Permitted Transferee,
(ii) no Ownership Interest in this Class R Certificate may be transferred
without delivery to the Trustee of a transfer affidavit of the initial owner
or the proposed transferee in the form described in the Agreement, (iii) each
person holding or acquiring any Ownership Interest in this Class R Certificate
must agree to require a transfer affidavit from any other person to whom such
person attempts to Transfer its Ownership Interest in this Class R Certificate
as required pursuant to the Agreement, (iv) each person holding or acquiring
an Ownership Interest in this Class R Certificate must agree not to transfer
an Ownership Interest in this Class R Certificate if it has actual knowledge
that the proposed transferee is not a Permitted Transferee and (v) any
attempted or purported transfer of any Ownership Interest in this Class R
Certificate in violation of such restrictions will be absolutely null and void
and will vest no rights in the purported transferee.
Reference is hereby made to the further provisions of this
Certificate set forth on the reverse hereof, which further provisions shall
for all purposes have the same effect as if set forth at this place.
This Certificate shall not be entitled to any benefit under
the Agreement or be valid for any purpose unless manually countersigned by an
authorized signatory of the Trustee.
D-4
IN WITNESS WHEREOF, the Trustee has caused this Certificate
to be duly executed.
Dated: May __, 2002.
U.S. BANK NATIONAL ASSOCIATION
as Trustee
By: _____________________________________
Name:
Title:
CERTIFICATE OF AUTHENTICATION
This is one of the Certificates referred to in the within-mentioned
Agreement.
Date: May __, 2002
U.S. BANK NATIONAL ASSOCIATION,
as Trustee
By:__________________________________
Authorized Signatory
D-5
CREDIT SUISSE FIRST BOSTON MORTGAGE SECURITIES CORP.
CSFB ABS Trust Series 2002-HE16
CSFB Mortgage Pass-Through Certificates, Series 2002-HE16
Class R
This Certificate is one of a duly authorized issue of
Certificates designated as CSFB ABS Trust Series 2002-HE16, CSFB Mortgage
Pass-Through Certificates, Series 2002-HE16, of the Series specified on the
face hereof (herein collectively called the "Certificates"), and representing
a beneficial ownership interest in the Trust Fund created by the Agreement.
The Certificateholder, by its acceptance of this
Certificate, agrees that it will look solely to the funds on deposit in the
Certificate Account for payment hereunder and that the Trustee is not liable
to the Certificateholders for any amount payable under this Certificate or the
Agreement or, except as expressly provided in the Agreement, subject to any
liability under the Agreement.
This Certificate does not purport to summarize the Agreement
and reference is made to the Agreement for the interests, rights and
limitations of rights, benefits, obligations and duties evidenced thereby, and
the rights, duties and immunities of the Trustee.
Pursuant to the terms of the Agreement, a distribution will
be made on the 25th day of each month, or, if such 25th day is not a Business
Day, the Business Day immediately following (the "Distribution Date"),
commencing on the first Distribution Date specified on the face hereof, to the
Person in whose name this Certificate is registered at the close of business
on the applicable Record Date in an amount equal to the product of the
Percentage Interest evidenced by this Certificate and the amount required to
be distributed to Holders of Certificates of the Class to which this
Certificate belongs on such Distribution Date pursuant to the Agreement. The
Record Date applicable to each Distribution Date is (1) with respect to all
Definitive Certificates, the last business day of the month preceding the
Distribution Date and (2) with respect to all Certificates held in Book-Entry
Form only, the Business Day immediately preceding the Distribution Date.
Distributions on this Certificate shall be made by wire
transfer of immediately available funds to the account of the Holder hereof at
a bank or other entity having appropriate facilities therefor, if such
Certificateholder shall have so notified the Trustee in writing at least five
Business Days prior to the related Record Date and such Certificateholder
shall satisfy the conditions to receive such form of payment set forth in the
Agreement, or, if not, by check mailed by first class mail to the address of
such Certificateholder appearing in the Certificate Register. The final
distribution on each Certificate will be made in like manner, but only upon
presentment and surrender of such Certificate at the Corporate Trust Office or
such other location specified in the notice to Certificateholders of such
final distribution.
The Agreement permits, with certain exceptions therein
provided, the amendment thereof and the modification of the rights and
obligations of the Trustee and the rights of the Certificateholders under the
Agreement at any time by the Depositor, the Servicers, the Seller and the
Trustee with the consent of the Holders of Certificates affected by such
amendment evidencing the requisite Percentage Interest, as provided in the
Agreement. Any such consent by
D-6
the Holder of this Certificate shall be conclusive and binding on such Holder
and upon all future Holders of this Certificate and of any Certificate issued
upon the transfer hereof or in exchange therefor or in lieu hereof whether or
not notation of such consent is made upon this Certificate. The Agreement also
permits the amendment thereof, in certain limited circumstances, without the
consent of the Holders of any of the Certificates.
As provided in the Agreement and subject to certain
limitations therein set forth, the transfer of this Certificate is registrable
in the Certificate Register of the Trustee upon surrender of this Certificate
for registration of transfer at the Corporate Trust Office or the office or
agency maintained by the Trustee in St. Xxxx, Minnesota, accompanied by a
written instrument of transfer in form satisfactory to the Trustee and the
Certificate Registrar duly executed by the holder hereof or such holder's
attorney duly authorized in writing, and thereupon one or more new
Certificates of the same Class in authorized denominations and evidencing the
same aggregate Percentage Interest in the Trust Fund will be issued to the
designated transferee or transferees.
The Certificates are issuable only as registered
Certificates without coupons in denominations specified in the Agreement. As
provided in the Agreement and subject to certain limitations therein set
forth, Certificates are exchangeable for new Certificates of the same Class in
authorized denominations and evidencing the same aggregate Percentage
Interest, as requested by the Holder surrendering the same.
No service charge will be made for any such registration of
transfer or exchange, but the Trustee may require payment of a sum sufficient
to cover any tax or other governmental charge payable in connection therewith.
The Depositor, the Servicers, the Special Servicer, the
Seller, the Trustee and any agent of the Depositor or the Trustee may treat
the Person in whose name this Certificate is registered as the owner hereof
for all purposes, and none of the Servicers, the Special Servicer, the Seller,
the Depositor, the Trustee or any such agent shall be affected by any notice
to the contrary.
On any Distribution Date on which the aggregate Stated
Principal Balance of the Mortgage Loans is less than 10% of the Aggregate Loan
Balance as of the Cut-off Date, and the amount on deposit in the Prefunding
Account on the Closing Date, Olympus will have the option to repurchase, in
whole, from the Trust Fund all remaining Mortgage Loans and all property
acquired in respect of the Mortgage Loans at a purchase price determined as
provided in the Agreement. In the event that no such optional termination
occurs, the obligations and responsibilities created by the Agreement will
terminate upon the later of the maturity or other liquidation (or any advance
with respect thereto) of the last Mortgage Loan remaining in the Trust Fund or
the disposition of all property in respect thereof and the distribution to
Certificateholders of all amounts required to be distributed pursuant to the
Agreement. In no event, however, will the trust created by the Agreement
continue beyond the expiration of 21 years from the death of the last survivor
of the descendants living at the date of the Agreement of a certain person
named in the Agreement.
D-7
Any term used herein that is defined in the Agreement shall
have the meaning assigned in the Agreement, and nothing herein shall be deemed
inconsistent with that meaning.
D-8
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto
______________________________________________________________________________
______________________________________________________________________________
______________________________________________________________________________
______________________________________________________________________________
(Please print or typewrite name and address including postal zip code of
assignee)
the Percentage Interest evidenced by the within Certificate and hereby
authorizes the transfer of registration of such Percentage Interest to
assignee on the Certificate Register of the Trust Fund.
I (We) further direct the Trustee to issue a new Certificate of a like
denomination and Class, to the above named assignee and deliver such
Certificate to the following address:
______________________________________________________________________________
Dated:
_______________________________________
Signature by or on behalf of assignor
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of
distribution:
Distributions shall be made, by wire transfer or otherwise, in immediately
available funds to ___________________________________________________________
_____________________________________________________________________________,
for the account of __________________________________________________________,
account number _____________, or, if mailed by check, to _____________________
______________________________________________________________________________
_____________________________________________________________________________.
Applicable statements should be mailed to ____________________________________
______________________________________________________________________________
_____________________________________________________________________________.
This information is provided by, the assignee named above, or, as its agent.
D-9
EXHIBIT E
[FORM OF CLASS X CERTIFICATE]
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A "REGULAR
INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT," AS THOSE TERMS ARE
DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL REVENUE CODE
OF 1986, AS AMENDED (THE "CODE").
THIS CERTIFICATE HAS NO PRINCIPAL BALANCE AND IS NOT ENTITLED TO ANY
DISTRIBUTIONS IN RESPECT OF PRINCIPAL.
NEITHER THIS CERTIFICATE NOR ANY INTEREST HEREIN MAY BE TRANSFERRED UNLESS THE
TRANSFEREE DELIVERS TO THE TRUSTEE EITHER A REPRESENTATION LETTER TO THE
EFFECT THAT SUCH TRANSFEREE IS NOT AND IS NOT INVESTING ON BEHALF OF OR WITH
PLAN ASSETS OF AN EMPLOYEE BENEFIT PLAN SUBJECT TO THE EMPLOYEE RETIREMENT
INCOME SECURITY ACT OF 1974, AS AMENDED ("ERISA"), OR A PLAN SUBJECT TO
SECTION 4975 OF THE CODE, OR, IF THIS CERTIFICATE HAS BEEN THE SUBJECT OF AN
ERISA-QUALIFYING UNDERWRITING AND THE PURCHASER IS AN INSURANCE COMPANY, A
REPRESENTATION IN ACCORDANCE WITH THE PROVISIONS OF THE AGREEMENT REFERRED TO
HEREIN, OR AN OPINION OF COUNSEL IN ACCORDANCE WITH THE PROVISIONS OF THE
AGREEMENT REFERRED TO HEREIN. NOTWITHSTANDING ANYTHING ELSE TO THE CONTRARY
HEREIN, ANY PURPORTED TRANSFER OF THIS CERTIFICATE TO OR ON BEHALF OF AN
EMPLOYEE BENEFIT PLAN SUBJECT TO ERISA OR TO THE CODE WITHOUT THE OPINION OF
COUNSEL SATISFACTORY TO THE TRUSTEE AS DESCRIBED ABOVE SHALL BE VOID AND OF NO
EFFECT.
THIS CERTIFICATE HAS NOT BEEN REGISTERED UNDER THE SECURITIES XXX 0000, AS
AMENDED (THE "ACT"). ANY RESALE OR TRANSFER OF THIS CERTIFICATE WITHOUT
REGISTRATION THEREOF UNDER THE ACT MAY ONLY BE MADE IN A TRANSACTION EXEMPTED
FROM THE REGISTRATION REQUIREMENTS OF THE ACT AND IN ACCORDANCE WITH THE
PROVISIONS OF THE AGREEMENT REFERRED TO HEREIN.
E-1
Certificate No. :
Cut-off Date : May 1, 2002
First Distribution Date : June 25, 2002
Percentage Interest :
CUSIP :
Maturity Date : October 2032
E-2
CREDIT SUISSE FIRST BOSTON MORTGAGE SECURITIES CORP.
CSFB ABS Trust Series 2002-HE16
CSFB Mortgage Pass-Through Certificates, Series 2002-HE16
Class X
evidencing a percentage interest in the distributions allocable to
the Certificates of the above-referenced Class with respect to a
Trust Fund consisting primarily of a pool of fixed rate and
adjustable rate conventional mortgage loans (the "Mortgage Loans")
secured by first liens on one- to four-family residential properties.
Credit Suisse First Boston Mortgage Securities Corp., as Depositor
This Certificate does not evidence an obligation of, or an
interest in, and is not guaranteed by the Depositor, the Seller, the Servicers
or the Trustee referred to below or any of their respective affiliates.
Neither this Certificate nor the Mortgage Loans are guaranteed or insured by
any governmental agency or instrumentality.
This certifies that CREDIT SUISSE FIRST BOSTON CORPORATION is the
registered owner of the Percentage Interest evidenced by this Certificate
(obtained by dividing the denomination of this Certificate by the aggregate of
the denominations of all Certificates of the Class to which this Certificate
belongs) in certain monthly distributions with respect to a Trust Fund
consisting primarily of the Mortgage Loans deposited by Credit Suisse First
Boston Mortgage Securities Corp. (the "Depositor"). The Trust Fund was created
pursuant to a Pooling and Servicing Agreement dated as of the Cut-off Date
specified above (the "Agreement") among the Depositor, DLJ Mortgage Capital,
Inc., as seller (in such capacity, "Seller"), Olympus Servicing, L.P., as a
servicer (in such capacity, a "Servicer") and as the special servicer (in such
capacity, the "Special Servicer"), Fairbanks Capital Corp., as a servicer (in
such capacity, a "Servicer") and U.S. Bank National Association as trustee
(the "Trustee"). To the extent not defined herein, the capitalized terms used
herein have the meanings assigned in the Agreement. This Certificate is issued
under and is subject to the terms, provisions and conditions of the Agreement,
to which Agreement the Holder of this Certificate by virtue of the acceptance
hereof assents and by which such Holder is bound.
No transfer of a Certificate of this Class shall be made
unless the Trustee shall have received either (i) a representation letter from
the transferee of such Certificate, acceptable to and in form and substance
satisfactory to the Trustee, to the effect that such transferee is not an
employee benefit plan subject to Section 406 of ERISA or Section 4975 of the
Code, or a person acting on behalf of any such plan or arrangement or using
the assets of any such plan or arrangement to effect such transfer, which
representation letter shall not be an expense of the Trustee or the Trust
Fund, (ii) if the Certificate has been the subject of an ERISA-Qualifying
Underwriting and the purchaser is an insurance company, a representation that
the purchaser is an insurance company which is purchasing such Certificates
with funds contained in an "insurance company general account" (as such term
is defined in Section V(e) of Prohibited Transaction Class Exemption 95-60
("PTCE 95-60")) and that the purchase and holding of such Certificates satisfy
the requirements for exemptive relief under Sections I and III of PTCE 95-60
or (iii) in the case of any such Certificate presented for registration in the
name of an employee benefit plan subject to ERISA, or Section 4975 of the Code
(or comparable provisions of any
E-3
subsequent enactments), or a trustee of any such plan or any other person
acting on behalf of any such plan or arrangement, or using such plan's or
arrangement's assets, an Opinion of Counsel satisfactory to the Trustee to the
effect that the purchase or holding of such Certificate will not result in the
assets of the Trust Fund being deemed to be "plan assets" and subject to the
prohibited transaction provisions of ERISA and the Code and will not subject
the Trustee or the Servicers to any obligation in addition to those undertaken
in this Agreement, which Opinion of Counsel shall not be an expense of the
Trustee or the Trust Fund. Notwithstanding anything else to the contrary
herein, any purported transfer of a Certificate to or on behalf of an employee
benefit plan subject to ERISA or to the Code without the Opinion of Counsel
satisfactory to the Trustee as described above shall be void and of no effect.
No transfer of a Certificate of this Class shall be made
unless such transfer is made pursuant to an effective registration statement
under the Securities Act and any applicable state securities laws or is exempt
from the registration requirements under said Act and such laws. In the event
that a transfer is to be made in reliance upon an exemption from the
Securities Act and such laws, in order to assure compliance with the
Securities Act and such laws, the Certificateholder desiring to effect such
transfer and such Certificateholder's prospective transferee shall each
certify to the Trustee in writing the facts surrounding the transfer. In the
even that such a transfer is to be made within three years from the date of
the initial issuance of Certificate pursuant hereto, there shall also be
delivered (except in the case of a transfer pursuant to Rule 144A of the
Securities Act) to the Trustee an Opinion of Counsel that such transfer may be
made pursuant to an exemption from the Securities Act and such state
securities laws, which Opinion of Counsel shall not be obtained at the expense
of the Trustee, the Seller, the Servicers, the Special Servicer or the
Depositor. The Holder hereof desiring to effect such transfer shall, and does
hereby agree to, indemnify the Trustee and the Depositor against any liability
that may result if the transfer is not so exempt or is not made in accordance
with such federal and state laws.
Reference is hereby made to the further provisions of this
Certificate set forth on the reverse hereof, which further provisions shall
for all purposes have the same effect as if set forth at this place.
This Certificate shall not be entitled to any benefit under
the Agreement or be valid for any purpose unless manually countersigned by an
authorized signatory of the Trustee.
E-4
IN WITNESS WHEREOF, the Trustee has caused this Certificate
to be duly executed.
Dated: May __, 2002.
U.S. BANK NATIONAL ASSOCIATION,
as Trustee
By: ____________________________________
Name:
Title:
CERTIFICATE OF AUTHENTICATION
This is one of the Certificates referred to in the within-mentioned
Agreement.
Date: May __, 2002
U.S. BANK NATIONAL ASSOCIATION,
as Trustee
By: _________________________________
Authorized Signatory
E-5
CREDIT SUISSE FIRST BOSTON MORTGAGE SECURITIES CORP.
CSFB ABS Trust Series 2002-HE16
CSFB Mortgage Pass-Through Certificates, Series 2002-HE16
Class X
This Certificate is one of a duly authorized issue of
Certificates designated as CSFB ABS Trust Series 2002-HE16, CSFB Mortgage
Pass-Through Certificates, Series 2002-HE16, of the Series specified on the
face hereof (herein collectively called the "Certificates"), and representing
a beneficial ownership interest in the Trust Fund created by the Agreement.
The Certificateholder, by its acceptance of this
Certificate, agrees that it will look solely to the funds on deposit in the
Certificate Account for payment hereunder and that the Trustee is not liable
to the Certificateholders for any amount payable under this Certificate or the
Agreement or, except as expressly provided in the Agreement, subject to any
liability under the Agreement.
This Certificate does not purport to summarize the Agreement
and reference is made to the Agreement for the interests, rights and
limitations of rights, benefits, obligations and duties evidenced thereby, and
the rights, duties and immunities of the Trustee.
Pursuant to the terms of the Agreement, a distribution will
be made on the 25th day of each month, or, if such 25th day is not a Business
Day, the Business Day immediately following (the "Distribution Date"),
commencing on the first Distribution Date specified on the face hereof, to the
Person in whose name this Certificate is registered at the close of business
on the applicable Record Date in an amount equal to the product of the
Percentage Interest evidenced by this Certificate and the amount required to
be distributed to Holders of Certificates of the Class to which this
Certificate belongs on such Distribution Date pursuant to the Agreement. The
Record Date applicable to each Distribution Date is (1) with respect to all
Definitive Certificates, the last business day of the month preceding the
Distribution Date and (2) with respect to all Certificates held in Book-Entry
Form only, the Business Day immediately preceding the Distribution Date.
Distributions on this Certificate shall be made by wire
transfer of immediately available funds to the account of the Holder hereof at
a bank or other entity having appropriate facilities therefor, if such
Certificateholder shall have so notified the Trustee in writing at least five
Business Days prior to the related Record Date and such Certificateholder
shall satisfy the conditions to receive such form of payment set forth in the
Agreement, or, if not, by check mailed by first class mail to the address of
such Certificateholder appearing in the Certificate Register. The final
distribution on each Certificate will be made in like manner, but only upon
presentment and surrender of such Certificate at the Corporate Trust Office or
such other location specified in the notice to Certificateholders of such
final distribution.
The Agreement permits, with certain exceptions therein
provided, the amendment thereof and the modification of the rights and
obligations of the Trustee and the rights of the Certificateholders under the
Agreement at any time by the Depositor, the Servicers, the Seller and the
Trustee with the consent of the Holders of Certificates affected by such
amendment evidencing the requisite Percentage Interest, as provided in the
Agreement. Any such consent by
E-6
the Holder of this Certificate shall be conclusive and binding on such Holder
and upon all future Holders of this Certificate and of any Certificate issued
upon the transfer hereof or in exchange therefor or in lieu hereof whether or
not notation of such consent is made upon this Certificate. The Agreement also
permits the amendment thereof, in certain limited circumstances, without the
consent of the Holders of any of the Certificates.
As provided in the Agreement and subject to certain
limitations therein set forth, the transfer of this Certificate is registrable
in the Certificate Register of the Trustee upon surrender of this Certificate
for registration of transfer at the Corporate Trust Office or the office or
agency maintained by the Trustee in St. Xxxx, Minnesota, accompanied by a
written instrument of transfer in form satisfactory to the Trustee and the
Certificate Registrar duly executed by the holder hereof or such holder's
attorney duly authorized in writing, and thereupon one or more new
Certificates of the same Class in authorized denominations and evidencing the
same aggregate Percentage Interest in the Trust Fund will be issued to the
designated transferee or transferees.
The Certificates are issuable only as registered
Certificates without coupons in denominations specified in the Agreement. As
provided in the Agreement and subject to certain limitations therein set
forth, Certificates are exchangeable for new Certificates of the same Class in
authorized denominations and evidencing the same aggregate Percentage
Interest, as requested by the Holder surrendering the same.
No service charge will be made for any such registration of
transfer or exchange, but the Trustee may require payment of a sum sufficient
to cover any tax or other governmental charge payable in connection therewith.
The Depositor, the Servicers, the Special Servicer, the
Seller, the Trustee and any agent of the Depositor or the Trustee may treat
the Person in whose name this Certificate is registered as the owner hereof
for all purposes, and none of the Servicers, the Special Servicer, the Seller,
the Depositor, the Trustee or any such agent shall be affected by any notice
to the contrary.
On any Distribution Date on which the aggregate Stated
Principal Balance of the Mortgage Loans is less than 10% of the Aggregate Loan
Balance as of the Cut-off Date, and the amount on deposit in the Prefunding
Account on the Closing Date, Olympus will have the option to repurchase, in
whole, from the Trust Fund all remaining Mortgage Loans and all property
acquired in respect of the Mortgage Loans at a purchase price determined as
provided in the Agreement. In the event that no such optional termination
occurs, the obligations and responsibilities created by the Agreement will
terminate upon the later of the maturity or other liquidation (or any advance
with respect thereto) of the last Mortgage Loan remaining in the Trust Fund or
the disposition of all property in respect thereof and the distribution to
Certificateholders of all amounts required to be distributed pursuant to the
Agreement. In no event, however, will the trust created by the Agreement
continue beyond the expiration of 21 years from the death of the last survivor
of the descendants living at the date of the Agreement of a certain person
named in the Agreement.
E-7
Any term used herein that is defined in the Agreement shall
have the meaning assigned in the Agreement, and nothing herein shall be deemed
inconsistent with that meaning.
E-8
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto
_____________________________________________________________________________
_____________________________________________________________________________
_____________________________________________________________________________
_____________________________________________________________________________
(Please print or typewrite name and address including postal zip code of
assignee)
the Percentage Interest evidenced by the within Certificate and hereby
authorizes the transfer of registration of such Percentage Interest to
assignee on the Certificate Register of the Trust Fund.
I (We) further direct the Trustee to issue a new Certificate of a like
denomination and Class, to the above named assignee and deliver such
Certificate to the following address:
______________________________________________________________________________
Dated:
______________________________________
Signature by or on behalf of assignor
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of
distribution:
Distributions shall be made, by wire transfer or otherwise, in immediately
available funds to ___________________________________________________________
_____________________________________________________________________________,
for the account of __________________________________________________________,
account number _______________, or, if mailed by check, to ___________________
______________________________________________________________________________
_____________________________________________________________________________.
Applicable statements should be mailed to ____________________________________
______________________________________________________________________________
_____________________________________________________________________________.
This information is provided by, the assignee named above, or, as its agent.
E-9
EXHIBIT F
[FORM OF INTEREST-ONLY CERTIFICATE]
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE
OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO ISSUER OR
ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT, AND ANY
CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER
NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT
IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A "REGULAR
INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT," AS THOSE TERMS ARE
DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL REVENUE CODE
OF 1986, AS AMENDED (THE "CODE").
THIS CERTIFICATE HAS NO PRINCIPAL BALANCE AND IS NOT ENTITLED TO ANY
DISTRIBUTIONS IN RESPECT OF PRINCIPAL.
F-1
Certificate No. :
Cut-off Date : May 1, 2002
First Distribution Date : June 25, 2002
Initial Notional Amount of this
Certificate ("Denomination") :
Initial Class Notional Amount of
all Certificates of this Class :
Percentage Interest :
CUSIP :
Pass-Through Rate :
Maturity Date : October 2032
F-2
CREDIT SUISSE FIRST BOSTON MORTGAGE SECURITIES CORP.
CSFB ABS Trust Series 2002-HE16
CSFB Mortgage Pass-Through Certificates, Series 2002-HE16
Class A-IO
evidencing a percentage interest in the distributions allocable to
the Certificates of the above-referenced Class with respect to a
Trust Fund consisting primarily of a pool of fixed rate and
adjustable rate conventional mortgage loans (the "Mortgage Loans")
secured by first liens on one- to four-family residential properties.
Credit Suisse First Boston Mortgage Securities Corp., as Depositor
This Certificate does not evidence an obligation of, or an interest
in, and is not guaranteed by the Depositor, the Seller, the Servicers, the
Trustee or the Special Servicer referred to below or any of their respective
affiliates. Neither this Certificate nor the Mortgage Loans are guaranteed or
insured by any governmental agency or instrumentality.
This certifies that CEDE & CO. is the registered owner of
the Percentage Interest evidenced by this Certificate (obtained by dividing
the denomination of this Certificate by the aggregate of the denominations of
all Certificates of the Class to which this Certificate belongs) in certain
monthly distributions with respect to a Trust Fund consisting primarily of the
Mortgage Loans deposited by Credit Suisse First Boston Mortgage Securities
Corp. (the "Depositor"). The Trust Fund was created pursuant to a Pooling and
Servicing Agreement dated as of the Cut-off Date specified above (the
"Agreement") among the Depositor, DLJ Mortgage Capital, Inc., as seller (in
such capacity, "Seller"), Olympus Servicing, L.P., as a servicer (in such
capacity, a "Servicer") and as the special servicer (in such capacity, the
"Special Servicer"), Fairbanks Capital Corp., as a servicer (in such capacity,
a "Servicer") and U.S. Bank National Association as trustee (the "Trustee").
To the extent not defined herein, the capitalized terms used herein have the
meanings assigned in the Agreement. This Certificate is issued under and is
subject to the terms, provisions and conditions of the Agreement, to which
Agreement the Holder of this Certificate by virtue of the acceptance hereof
assents and by which such Holder is bound.
Reference is hereby made to the further provisions of this
Certificate set forth on the reverse hereof, which further provisions shall
for all purposes have the same effect as if set forth at this place.
This Certificate shall not be entitled to any benefit under
the Agreement or be valid for any purpose unless manually countersigned by an
authorized signatory of the Trustee.
F-3
IN WITNESS WHEREOF, the Trustee has caused this Certificate
to be duly executed.
Dated: May __, 2002.
U.S. BANK NATIONAL ASSOCIATION,
as Trustee
By:_________________________________________
Name:
Title:
CERTIFICATE OF AUTHENTICATION
This is one of the Certificates referred to in the within-mentioned
Agreement.
Date: May __, 2002
U.S. BANK NATIONAL ASSOCIATION,
as Trustee
By: _____________________________
Authorized Signatory
F-4
CREDIT SUISSE FIRST BOSTON MORTGAGE SECURITIES CORP.
CSFB ABS Trust Series 2002-HE16
CSFB Mortgage Pass-Through Certificates, Series 2002-HE16
Class A-IO
This Certificate is one of a duly authorized issue of
Certificates designated as CSFB ABS Trust Series 2002-HE16, CSFB Mortgage
Pass-Through Certificates, Series 2002-HE16, of the Series specified on the
face hereof (herein collectively called the "Certificates"), and representing
a beneficial ownership interest in the Trust Fund created by the Agreement.
The Certificateholder, by its acceptance of this
Certificate, agrees that it will look solely to the funds on deposit in the
Certificate Account for payment hereunder and that the Trustee is not liable
to the Certificateholders for any amount payable under this Certificate or the
Agreement or, except as expressly provided in the Agreement, subject to any
liability under the Agreement.
This Certificate does not purport to summarize the Agreement
and reference is made to the Agreement for the interests, rights and
limitations of rights, benefits, obligations and duties evidenced thereby, and
the rights, duties and immunities of the Trustee.
Pursuant to the terms of the Agreement, a distribution will
be made on the 25th day of each month, or, if such 25th day is not a Business
Day, the Business Day immediately following (the "Distribution Date"),
commencing on the first Distribution Date specified on the face hereof, to the
Person in whose name this Certificate is registered at the close of business
on the applicable Record Date in an amount equal to the product of the
Percentage Interest evidenced by this Certificate and the amount required to
be distributed to Holders of Certificates of the Class to which this
Certificate belongs on such Distribution Date pursuant to the Agreement. The
Record Date applicable to each Distribution Date is (1) with respect to all
Definitive Certificates, the last business day of the month preceding the
Distribution Date and (2) with respect to all Certificates held in Book-Entry
Form only, the Business Day immediately preceding the Distribution Date.
Distributions on this Certificate shall be made by wire
transfer of immediately available funds to the account of the Holder hereof at
a bank or other entity having appropriate facilities therefor, if such
Certificateholder shall have so notified the Trustee in writing at least five
Business Days prior to the related Record Date and such Certificateholder
shall satisfy the conditions to receive such form of payment set forth in the
Agreement, or, if not, by check mailed by first class mail to the address of
such Certificateholder appearing in the Certificate Register. The final
distribution on each Certificate will be made in like manner, but only upon
presentment and surrender of such Certificate at the Corporate Trust Office or
such other location specified in the notice to Certificateholders of such
final distribution.
The Agreement permits, with certain exceptions therein
provided, the amendment thereof and the modification of the rights and
obligations of the Trustee and the rights of the Certificateholders under the
Agreement at any time by the Depositor, the Servicers, the Seller and the
Trustee with the consent of the Holders of Certificates affected by such
amendment evidencing the requisite Percentage Interest, as provided in the
Agreement. Any such consent by
F-5
the Holder of this Certificate shall be conclusive and binding on such Holder
and upon all future Holders of this Certificate and of any Certificate issued
upon the transfer hereof or in exchange therefor or in lieu hereof whether or
not notation of such consent is made upon this Certificate. The Agreement also
permits the amendment thereof, in certain limited circumstances, without the
consent of the Holders of any of the Certificates.
As provided in the Agreement and subject to certain
limitations therein set forth, the transfer of this Certificate is registrable
in the Certificate Register of the Trustee upon surrender of this Certificate
for registration of transfer at the Corporate Trust Office or the office or
agency maintained by the Trustee in St. Xxxx, Minnesota, accompanied by a
written instrument of transfer in form satisfactory to the Trustee and the
Certificate Registrar duly executed by the holder hereof or such holder's
attorney duly authorized in writing, and thereupon one or more new
Certificates of the same Class in authorized denominations and evidencing the
same aggregate Percentage Interest in the Trust Fund will be issued to the
designated transferee or transferees.
The Certificates are issuable only as registered
Certificates without coupons in denominations specified in the Agreement. As
provided in the Agreement and subject to certain limitations therein set
forth, Certificates are exchangeable for new Certificates of the same Class in
authorized denominations and evidencing the same aggregate Percentage
Interest, as requested by the Holder surrendering the same.
No service charge will be made for any such registration of
transfer or exchange, but the Trustee may require payment of a sum sufficient
to cover any tax or other governmental charge payable in connection therewith.
The Depositor, the Servicers, the Special Servicer, the
Seller, the Trustee and any agent of the Depositor or the Trustee may treat
the Person in whose name this Certificate is registered as the owner hereof
for all purposes, and none of the Servicers, the Special Servicer, the Seller,
the Depositor, the Trustee, or any such agent shall be affected by any notice
to the contrary.
On any Distribution Date on which the aggregate Stated
Principal Balance of the Mortgage Loans is less than 10% of the Aggregate Loan
Balance as of the Cut-off Date, and the amount on deposit in the Prefunding
Account on the Closing Date, Olympus will have the option to repurchase, in
whole, from the Trust Fund all remaining Mortgage Loans and all property
acquired in respect of the Mortgage Loans at a purchase price determined as
provided in the Agreement. In the event that no such optional termination
occurs, the obligations and responsibilities created by the Agreement will
terminate upon the later of the maturity or other liquidation (or any advance
with respect thereto) of the last Mortgage Loan remaining in the Trust Fund or
the disposition of all property in respect thereof and the distribution to
Certificateholders of all amounts required to be distributed pursuant to the
Agreement. In no event, however, will the trust created by the Agreement
continue beyond the expiration of 21 years from the death of the last survivor
of the descendants living at the date of the Agreement of a certain person
named in the Agreement.
F-6
Any term used herein that is defined in the Agreement shall
have the meaning assigned in the Agreement, and nothing herein shall be deemed
inconsistent with that meaning.
F-7
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto
_______________________________________________________________________________
_______________________________________________________________________________
_______________________________________________________________________________
_______________________________________________________________________________
(Please print or typewrite name and address including postal zip code of
assignee)
the Percentage Interest evidenced by the within Certificate and hereby
authorizes the transfer of registration of such Percentage Interest to
assignee on the Certificate Register of the Trust Fund.
I (We) further direct the Trustee to issue a new Certificate of a like
denomination and Class, to the above named assignee and deliver such
Certificate to the following address:
______________________________________________________________________________
Dated:
_______________________________________
Signature by or on behalf of assignor
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of
distribution:
Distributions shall be made, by wire transfer or otherwise, in immediately
available funds to ___________________________________________________________
_____________________________________________________________________________,
for the account of __________________________________________________________,
account number _____________, or, if mailed by check, to _____________________
______________________________________________________________________________
_____________________________________________________________________________.
Applicable statements should be mailed to ____________________________________
_____________________________________________________________________________
_____________________________________________________________________________.
This information is provided by, the assignee named above, or, as its agent.
F-8
EXHIBIT G
FORM OF INITIAL CERTIFICATION OF CUSTODIAN
[date]
[Depositor]
[Servicers]
[Seller]
[Class A Certificate Insurer]
Re: Pooling and Servicing Agreement among the Depositor, DLJ Mortgage
Capital, Inc., as seller (in such capacity, "Seller"), Olympus
Servicing, L.P., as a servicer (in such capacity, a "Servicer") and
as the special servicer (in such capacity, the "Special Servicer"),
Fairbanks Capital Corp., as a servicer (in such capacity, a
"Servicer") and U.S. Bank National Association as trustee (the
"Trustee") CSFB Mortgage Pass-Through Certificates, Series
2002- HE16
-------------------------------------------------------------------
Gentlemen:
In accordance with Section 2.02 of the above-captioned
Pooling and Servicing Agreement (the "Pooling and Servicing Agreement"), the
undersigned, as a Custodian, hereby certifies that, as to each Mortgage Loan
listed in each Mortgage Loan Schedule (other than any Mortgage Loan listed in
the attached schedule), it has received:
(i) the original Mortgage Note, endorsed as provided in the
following form: "Pay to the order of ________, without recourse"; and
(ii) a duly executed Assignment of the Mortgage (which
may be included in a blanket assignment or assignments).
Based on its review and examination and only as to the
foregoing documents, such documents appear regular on their face and relate to
such Mortgage Loan.
The undersigned Custodian has made no independent
examination of any documents contained in each Mortgage File beyond the review
specifically required in the Pooling and Servicing Agreement. The undersigned
Custodian makes no representations as to: (i) the validity, legality,
sufficiency, enforceability or genuineness of any of the documents contained
in each Mortgage File of any of the Mortgage Loans identified on either
Mortgage Loan Schedule, or (ii) the collectability, insurability,
effectiveness or suitability of any such Mortgage Loan.
G-1
Capitalized words and phrases used herein shall have the
respective meanings assigned to them in the Pooling and Servicing Agreement.
[ ],
as a Custodian
By: _______________________________________
Name: _____________________________________
Title: _____________________________________
G-2
EXHIBIT H
FORM OF FINAL CERTIFICATION OF CUSTODIAN
[date]
[Depositor]
[Servicers]
[Seller]
[Class A Certificate Insurer]
Re: Pooling and Servicing Agreement among the Depositor, DLJ Mortgage
Capital, Inc., as seller (in such capacity, "Seller"), Olympus
Servicing, L.P., as a servicer (in such capacity, a "Servicer")
and as the special servicer (in such capacity, the "Special
Servicer"), Fairbanks Capital Corp., as a servicer (in such
capacity, a "Servicer") and U.S. Bank National Association as
trustee (the "Trustee") CSFB Mortgage Pass-Through Certificates,
Series 2002- HE16
------------------------------------------------------------------
Gentlemen:
In accordance with Section 2.02 of the above-captioned
Pooling and Servicing Agreement (the "Pooling and Servicing Agreement"), the
undersigned, as a Custodian, hereby certifies that as to each Mortgage Loan
listed in each Mortgage Loan Schedule (other than any Mortgage Loan paid in
full or listed on the attached Document Exception Report) it has received:
(i) the original Mortgage Note, endorsed in the form
provided in Section 2.01(b) of the Pooling and Servicing Agreement, with all
intervening endorsements, and including any riders to the Mortgage Note,
showing a complete chain of endorsement from the originator to the last named
endorsee;
(ii) with respect to any Lost Mortgage Note, a lost note
affidavit stating that the original Mortgage Note was lost or destroyed,
together with a copy of such Mortgage Note;
(iii) the original of any guarantee executed in connection
with the Mortgage Note (if any);
(iv) the original Mortgage with evidence of recording
thereon, or copies certified by the related recording office or if the
original Mortgage has not yet been returned from the recording office, a copy
certified by or on behalf of the Seller indicating that such Mortgage has been
delivered for recording;
(v) the originals of all assumption, modification,
consolidation or extension agreements (or, if an original of any of these
documents has not been returned from the recording office, a copy thereof
certified by or on behalf of the Seller, the original to be delivered to the
Seller forthwith after return from such recording office), with evidence of
recording thereon, if any;
H-1
(vi) a duly executed assignment of the Mortgage in the
form provided in Section 2.01(b) of the Pooling and Servicing Agreement;
provided, however, that if the Depositor has certified or the Trustee
otherwise knows that the related Mortgage has not been returned from the
applicable recording office, a copy of the Assignment of the Mortgage
(excluding information to be provided by the recording office);
(vii) the original of any intervening recorded
Assignments of Mortgage, showing a complete chain of assignment from
origination to the related Seller, including warehousing assignments, with
evidence of recording thereon (or, if an original intervening Assignment of
Mortgage has not been returned from the recording office, a copy thereof
certified by or on behalf of the Seller);
(viii) the original or duplicate original lender's title
insurance policy and all riders thereto or, any one of an original title
binder, an original preliminary title report or an original title commitment,
or a copy thereof certified by the title company (or, in appropriate
jurisdictions, attorney's opinion of title and abstract of title); and
(ix) the original primary mortgage insurance
certificate, if any or copy of mortgage insurance certificate.
Based on its review and examination and only as to the
foregoing documents, (a) such documents appear regular on their face and
related to such Mortgage Loan, and (b) the information set forth in items (i),
(ii), (iii), (iv), (vi), (ix) and (x) of the definition of the "Mortgage Loan
Schedule" in Article I of the Pooling and Servicing Agreement accurately
reflects information set forth in the Mortgage File.
The undersigned Custodian has made no independent
examination of any documents contained in each Mortgage File beyond the review
specifically required in the Pooling and Servicing Agreement. The undersigned
Custodian makes no representations as to: (i) the validity, legality,
sufficiency, enforceability or genuineness of any of the documents contained
in each Mortgage File of any of the Mortgage Loans identified on either
Mortgage Loan Schedule, or (ii) the collectability, insurability,
effectiveness or suitability of any such Mortgage Loan. Notwithstanding
anything herein to the contrary, the undersigned Custodian has made no
determination and makes no representations as to whether (i) any endorsement
is sufficient to transfer all right, title and interest of the party so
endorsing, as noteholder or assignee thereof, in and to that Mortgage Note or
(ii) any assignment is in recordable form or sufficient to effect the
assignment of and transfer to the assignee thereof, under the Mortgage to
which the assignment relates.
H-2
Capitalized words and phrases used herein shall have the
respective meanings assigned to them in the Pooling and Servicing Agreement.
[ ],
as a Custodian
By: ____________________________________
Name: __________________________________
Title: __________________________________
H-3
EXHIBIT I
TRANSFER AFFIDAVIT
CREDIT SUISSE FIRST BOSTON MORTGAGE SECURITIES CORP.
CSFB Mortgage Pass-Through Certificates, Series 2002-HE16
Class [_______]
STATE OF )
) ss.:
COUNTY OF )
The undersigned, being first duly sworn, deposes and says as
follows:
1. The undersigned is an officer of ______________, the
proposed Transferee of an Ownership Interest in a Class R Certificate (the
"Certificate") issued pursuant to Pooling and Servicing Agreement dated as of
the Cut-off Date specified above (the "Agreement") among the Depositor, DLJ
Mortgage Capital, Inc., as seller (in such capacity, "Seller"), Olympus
Servicing, L.P., as a servicer (in such capacity, a "Servicer") and as the
special servicer (in such capacity, the "Special Servicer"), Fairbanks Capital
Corp., as a servicer (in such capacity, a "Servicer") and U.S. Bank National
Association as trustee (the "Trustee") . Capitalized terms used, but not
defined herein or in Exhibit 1 hereto, shall have the meanings ascribed to
such terms in the Agreement. The Transferee has authorized the undersigned to
make this affidavit on behalf of the Transferee.
2. The Transferee is, as of the date hereof, and will be, as
of the date of the Transfer, a Permitted Transferee. The Transferee is
acquiring its Ownership Interest in the Certificate for its own account. The
Transferee has no knowledge that any such affidavit is false.
3. The Transferee has been advised of, and understands that
(i) a tax will be imposed on Transfers of the Certificate to Persons that are
not Permitted Transferees; (ii) such tax will be imposed on the transferor,
or, if such Transfer is through an agent (which includes a broker, nominee or
middleman) for a Person that is not a Permitted Transferee, on the agent; and
(iii) the Person otherwise liable for the tax shall be relieved of liability
for the tax if the subsequent Transferee furnished to such Person an affidavit
that such subsequent Transferee is a Permitted Transferee and, at the time of
Transfer, such Person does not have actual knowledge that the affidavit is
false.
4. The Transferee has been advised of, and understands that
a tax will be imposed on a "pass-through entity" holding the Certificate if at
any time during the taxable year of the pass-through entity a Person that is
not a Permitted Transferee is the record holder of an interest in such entity.
The Transferee understands that such tax will not be imposed for any period
with respect to which the record holder furnishes to the pass-through entity
an affidavit that such record holder is a Permitted Transferee and the
pass-through entity does not have actual knowledge that such affidavit is
false. (For this purpose, a "pass-through entity" includes a regulated
investment company, a real estate investment trust or common trust fund, a
partnership, trust or estate, and certain cooperatives and, except as may be
provided in Treasury Regulations, persons holding interests in pass-through
entities as a nominee for another Person.)
I-1
5. The Transferee has reviewed the provisions of Section
5.02(c) of the Agreement (attached hereto as Exhibit 2 and incorporated herein
by reference) and understands the legal consequences of the acquisition of an
Ownership Interest in the Certificate including, without limitation, the
restrictions on subsequent Transfers and the provisions regarding voiding the
Transfer and mandatory sales. The Transferee expressly agrees to be bound by
and to abide by the provisions of Section 5.02(c) of the Agreement and the
restrictions noted on the face of the Certificate. The Transferee understands
and agrees that any breach of any of the representations included herein shall
render the Transfer to the Transferee contemplated hereby null and void.
6. The Transferee agrees to require a Transfer Affidavit from
any Person to whom the Transferee attempts to Transfer its Ownership Interest
in the Certificate, and in connection with any Transfer by a Person for whom
the Transferee is acting as nominee, trustee or agent, and the Transferee will
not Transfer its Ownership Interest or cause any Ownership Interest to be
Transferred to any Person that the Transferee knows is not a Permitted
Transferee. In connection with any such Transfer by the Transferee, the
Transferee agrees to deliver to the Trustee a certificate substantially in the
form set forth as EXHIBIT J to the Agreement (a "Transferor Certificate") to
the effect that such Transferee has no actual knowledge that the Person to
which the Transfer is to be made is not a Permitted Transferee.
7. The Transferee does not have the intention to impede the
assessment or collection of any tax legally required to be paid with respect
to the Certificate.
8. The Transferee's taxpayer identification number is
[_____________].
9. The Transferee is a United States Person.
10. The Transferee is aware that the Certificate may be a
"noneconomic residual interest" within the meaning of proposed Treasury
regulations promulgated pursuant to the Code and that the transferor of a
noneconomic residual interest will remain liable for any taxes due with
respect to the income on such residual interest, unless no significant purpose
of the transfer was to impede the assessment or collection of tax.
11. In accordance with Revenue Procedure 2001-12, I.R.B.
2001-2,
(a) the consideration paid to the Transferee for accepting
the Class R Certificates is greater than the present value of the anticipated
net federal income taxes and tax benefits ("Tax Liability Present Value")
associated with owning such Certificates, with such present value computed
suing a discount rate equal to the "applicable federal rate" prescribed by
Section 1274 of the Internal Revenue Code as of the date hereof (with all
applicable computations done in accordance with Rev. Proc. 2001-12) or, to the
extent it is not, if the Transferee has asserted that it regularly borrows, in
the ordinary course of its trade or business, substantial funds from unrelated
third parties at a lower interest rate than such applicable federal rate and
the consideration paid to the Transferee is greater than the Tax Liability
Present Value using such lower interest rate as the discount rate, the
transactions with the unrelated third party lenders, the interest rate or
rates, the date or dates of such transactions, and the maturity dates or, in
the case of adjustable rate debt instruments, the relevant adjustment dates or
periods, with respect to such borrowings, are accurately stated in Exhibit A
to this letter; or
I-2
(b) the Transferee (i) is an "eligible corporation" as
defined in Section 860L(a)(2) of the Internal Revenue Code, as to which the
income of Class R Certificates will only be subject to taxation in the United
States, (ii) has, and has had in each of its two preceding fiscal years, gross
assets for financial reporting purposes (excluding any obligation of a person
related to the transferee within the meaning of Section 860L of the Internal
Revenue Code) in excess of $100 million and net assets of $10 million, and
(iii) hereby agrees only to transfer the Certificate to another corporation
meeting the criteria set forth in this letter.
12. (a) The Transferee is not an employee benefit plan that
is subject to ERISA or a plan that is subject to Section 4975 of the Code, and
the Transferee is not acting on behalf of or investing plan assets of such a
plan; or
(b) The transferee is an insurance company that is acquiring
the Certificate with assets in an "insurance company general account" (as
defined in Section V(e) of Prohibited Transaction Class Exemption ("PTCE")
95-60), and the acquisition and holding of the ERISA-Restricted Certificate
satisfy the requirements for exemptive relief under Sections I and III of PTCE
95-60.
I-3
IN WITNESS WHEREOF, the Transferee has caused this
instrument to be executed on its behalf, pursuant to authority of its Board of
Directors, by its duly authorized officer and its corporate seal to be
hereunto affixed, duly attested, this __ day of _______, 20__ .
_____________________________
Print Name of Transferee
By: _______________________________
Name:
Title:
[Corporate Seal]
ATTEST:
____________________________________________
[Assistant] Secretary
Personally appeared before me the above-named , known or
proved to me to be the same person who executed the foregoing instrument and
to be the of the Transferee, and acknowledged that he executed the same as his
free act and deed and the free act and deed of the Transferee.
Subscribed and sworn before me this day __of _________,
20__.
___________________________________
NOTARY PUBLIC
My Commission expires the __day of
_________, 20__.
I-4
EXHIBIT 1
to
EXHIBIT I
Certain Definitions
"Ownership Interest": As to any Residual Certificate, any ownership
interest in such Certificate, including any interest in such Certificate as
the Holder thereof and any other interest therein, whether direct or indirect,
legal or beneficial.
"Permitted Transferee": Any person other than (i) the United States,
any State or political subdivision thereof, or any agency or instrumentality
of any of the foregoing, (ii) a foreign government, International Organization
or any agency or instrumentality of either of the foregoing, (iii) an
organization (except certain farmers' cooperatives described in section 521 of
the Code) which is exempt from tax imposed by Chapter 1 of the Code (including
the tax imposed by section 511 of the Code on unrelated business taxable
income) on any excess inclusions (as defined in section 860E(c)(1) of the
Code) with respect to any Residual Certificate, (iv) rural electric and
telephone cooperatives described in section 1381(a)(2)(C) of the Code, (v) a
Person that is not a citizen or resident of the United States, a corporation,
partnership, or other entity created or organized in or under the laws of the
United States, any State thereof or the District of Columbia, or an estate
whose income from sources without the United States is includible in gross
income for federal income tax purposes regardless of its connection with the
conduct of a trade or business within the United States or a trust if a court
within the United States is able to exercise primary supervision over the
administration of the trust and one or more United States persons have the
authority to control all substantial decisions of the trust unless such Person
has furnished the transferor and the Trustee with a duly completed Internal
Revenue Service Form 4224, and (vi) any other Person so designated by the
Depositor based upon an Opinion of Counsel that the Transfer of an Ownership
Interest in a Residual Certificate to such Person may cause the Trust Fund
hereunder to fail to qualify as a REMIC at any time that the Certificates are
outstanding. The terms "United States," "State" and "International
Organization" shall have the meanings set forth in section 7701 of the Code or
successor provisions. A corporation will not be treated as an instrumentality
of the United States or of any State or political subdivision thereof for
these purposes if all of its activities are subject to tax and, with the
exception of the Federal Home Loan Mortgage Corporation, a majority of its
board of directors is not selected by such government unit.
"Person": Any individual, corporation, partnership, joint venture,
association, limited liability company, joint-stock company, trust,
unincorporated organization or government, or any agency or political
subdivision thereof.
"Transfer": Any direct or indirect transfer or sale of any
Ownership Interest in a Residual Certificate.
"Transferee": Any Person who is acquiring by Transfer any Ownership
Interest in a Residual Certificate.
I-2-1
EXHIBIT 2
to
EXHIBIT I
Section 5.02(c) of the Agreement
(c) No transfer of a Private Certificate shall be made unless such
transfer is made pursuant to an effective registration statement under the
Securities Act and any applicable state securities laws or is exempt from the
registration requirements under said Act and such state securities laws.
Except in connection with any transfer of a Private Certificate by the
Depositor to any affiliate, in the event that a transfer is to be made in
reliance upon an exemption from the Securities Act and such laws, in order to
assure compliance with the Securities Act and such laws, the Certificateholder
desiring to effect such transfer and such Certificateholder's prospective
transferee shall each certify to the Trustee in writing the facts surrounding
the transfer in substantially the form set forth in Exhibit J (the "Transferor
Certificate") and (i) deliver a letter in substantially the form of either
Exhibit K (the "Investment Letter") or Exhibit L (the "Rule 144A Letter") or
(ii) there shall be delivered to the Trustee at the expense of the transferor
an Opinion of Counsel that such transfer may be made pursuant to an exemption
from the Securities Act. The Depositor shall provide to any Holder of a
Private Certificate and any prospective transferee designated by any such
Holder, information regarding the related Certificates and the Mortgage Loans
and such other information as shall be necessary to satisfy the condition to
eligibility set forth in Rule 144A(d)(4) for transfer of any such Certificate
without registration thereof under the Securities Act pursuant to the
registration exemption provided by Rule 144A. The Trustee shall cooperate with
the Depositor in providing the Rule 144A information referenced in the
preceding sentence, including providing to the Depositor such information
regarding the Certificates, the Mortgage Loans and other matters regarding the
Trust Fund as the Depositor shall reasonably request to meet its obligation
under the preceding sentence. Each Holder of a Private Certificate desiring to
effect such transfer shall, and does hereby agree to, indemnify the Trustee,
the Depositor, the Seller, each Servicer and the Special Servicer against any
liability that may result if the transfer is not so exempt or is not made in
accordance with such federal and state laws.
No transfer of an ERISA-Restricted Certificate shall be made unless
the Trustee shall have received either (i) a representation letter from the
transferee substantially in the form of Exhibit K or L, in the case of a
Private Certificate, or Exhibit I, in the case of a Residual Certificate, to
the effect that (a) such transferee is not an employee benefit plan or
arrangement subject to Section 406 of ERISA or a plan subject to Section 4975
of the Code, nor a person acting on behalf of any such plan or arrangement
using the assets of any such plan or arrangement to effect such transfer or
(b) if the ERISA-Restricted Certificate has been the subject of an
ERISA-Qualifying Underwriting, it is being purchased by an "insurance company
general account" (as defined in Section V(e) of Prohibited Transaction Class
Exemption ("PTCE") 95-60), and the acquisition and holding of the
ERISA-Restricted Certificate satisfy the requirements for exemptive relief
under Sections I and III of PTCE 95-60; or (ii) in the case of any such
ERISA-Restricted Certificate presented for registration in the name of an
employee benefit plan subject to ERISA, or a plan or arrangement subject to
Section 4975 of the Code (or comparable provisions of any subsequent
enactments), or a trustee of any such plan or any other person acting on
behalf of any such plan or arrangement or using such plan's or arrangement's
I-2-1
assets, an Opinion of Counsel satisfactory to the Trustee, which Opinion of
Counsel shall not be an expense of either the Trustee or the Trust Fund,
addressed to the Trustee, to the effect that the purchase or holding of such
ERISA-Restricted Certificate will not result in a prohibited transaction under
Section 406 of ERISA or Section 4975 of the Code, will not result in the
assets of the Trust Fund being deemed to be "plan assets" and subject to the
prohibited transaction provisions of ERISA and the Code and will not subject
the Trustee, the Servicers or the Special Servicer to any obligation in
addition to those expressly undertaken in this Agreement or to any liability.
The transferee of an ERISA-Restricted Certificate that is a Book-Entry
Certificate, by its acceptance of the Book-Entry Certificate, will be deemed
to make the representation in clauses (a) or (b) above. In the event that a
representation is violated, or any transfer to a plan or person acting on
behalf of a plan or using a plan's assets is attempted without the delivery to
the Trustee of the Opinion of Counsel described above, the attempted transfer
or acquisition shall be void and of no effect.
To the extent permitted under applicable law (including, but not
limited to, ERISA), the Trustee shall be under no liability to any Person for
any registration of transfer of any ERISA-Restricted Certificate that is in
fact not permitted by this Section 5.02(b) or for making any payments due on
such Certificate to the Holder thereof or taking any other action with respect
to such Holder under the provisions of this Agreement so long as the transfer
was registered by the Trustee in accordance with the foregoing requirements.
I-2-2
EXHIBIT J
FORM OF TRANSFEROR CERTIFICATE
__________, 200__
Credit Suisse First Boston Mortgage Securities Corp.
00 Xxxxxxx Xxxxxx, 0xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxxx Xxxxxx
U.S. Bank National Association
000 Xxxx Xxxxx Xxxxxx
Xx. Xxxx, Xxxxxxxxx 00000
Re: Credit Suisse First Boston Mortgage Securities Corp.,
CSFB Mortgage Pass-Through Certificates, Series
2002-HE16, Class [___]
-------------------------------------------------------
Ladies and Gentlemen:
In connection with our disposition of the above Certificates
we certify that (a) we understand that the Certificates have not been
registered under the Securities Act of 1933, as amended (the "Act"), and are
being disposed by us in a transaction that is exempt from the registration
requirements of the Act, (b) we have not offered or sold any Certificates to,
or solicited offers to buy any Certificates from, any person, or otherwise
approached or negotiated with any person with respect thereto, in a manner
that would be deemed, or taken any other action which would result in, a
violation of Section 5 of the Act and (c) to the extent we are disposing of a
Class R Certificate, we have no knowledge the Transferee is not a Permitted
Transferee.
Very truly yours,
___________________________
Print Name of Transferor
By: ___________________________
Authorized Officer
J-1
EXHIBIT K
FORM OF INVESTMENT LETTER (NON-RULE 144A)
__________, 200__
Credit Suisse First Boston Mortgage Securities Corp.
00 Xxxxxxx Xxxxxx, 0xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxxx Xxxxxx
U.S. Bank National Association
000 Xxxx Xxxxx Xxxxxx
Xx. Xxxx, Xxxxxxxxx 00000
Re: Credit Suisse First Boston Mortgage Securities Corp.,
CSFB Mortgage Pass-Through Certificates,
Series 2002-HE16, Class [___]
------------------------------------------------------
Ladies and Gentlemen:
In connection with our acquisition of the above Certificates
we certify that (a) we understand that the Certificates are not being
registered under the Securities Act of 1933, as amended (the "Act"), or any
state securities laws and are being transferred to us in a transaction that is
exempt from the registration requirements of the Act and any such laws, (b) we
are an "accredited investor," as defined in Regulation D under the Act, and
have such knowledge and experience in financial and business matters that we
are capable of evaluating the merits and risks of investments in the
Certificates, (c) we have had the opportunity to ask questions of and receive
answers from the Depositor concerning the purchase of the Certificates and all
matters relating thereto or any additional information deemed necessary to our
decision to purchase the Certificates, (d) either (i) we are not an employee
benefit plan that is subject to the Employee Retirement Income Security Act of
1974, as amended, or a plan or arrangement that is subject to Section 4975 of
the Internal Revenue Code of 1986, as amended, nor are we acting on behalf of
any such plan or arrangement nor are we using the assets of any such plan or
arrangement to effect such acquisition or (ii) provided the Certificate has
been the subject of an ERISA Qualifying Underwriting, we are an insurance
company which is purchasing such Certificates with funds contained in an
"insurance company general account" (as such term is defined in Section V(e)
of Prohibited Transaction Class Exemption 95-60 ("PTCE 95-60")) and the
purchase and holding of such Certificates are covered under Sections I and III
of PTCE 95-60, (e) we are acquiring the Certificates for investment for our
own account and not with a view to any distribution of such Certificates (but
without prejudice to our right at all times to sell or otherwise dispose of
the Certificates in accordance with clause (g) below), (f) we have not offered
or sold any Certificates to, or solicited offers to buy any Certificates from,
any person, or otherwise approached or negotiated with any person with respect
thereto, or taken any other action which would result in a violation of
Section 5 of the Act, and (g) we will not sell, transfer or otherwise dispose
of any Certificates unless (1) such sale, transfer or other disposition is
made pursuant to an effective registration statement under the Act or is
exempt from such registration requirements, and if requested, we will at our
expense provide an opinion of counsel satisfactory to the addressees of this
Certificate that such sale, transfer or other disposition may be made
K-1
pursuant to an exemption from the Act, (2) the purchaser or transferee of such
Certificate has executed and delivered to you a certificate to substantially
the same effect as this certificate, and (3) the purchaser or transferee has
otherwise complied with any conditions for transfer set forth in the Pooling
and Servicing Agreement.
Very truly yours,
___________________________
Print Name of Transferee
By: ___________________________
Authorized Officer
K-2
EXHIBIT L
FORM OF RULE 144A LETTER
____________, 200__
Credit Suisse First Boston Mortgage Securities Corp.
00 Xxxxxxx Xxxxxx, 0xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxxx Xxxxxx
U.S. Bank National Association
000 Xxxx Xxxxx Xxxxxx
Xx. Xxxx, Xxxxxxxxx 00000
Re: Credit Suisse First Boston Mortgage Securities Corp.,
CSFB Mortgage Pass-Through Certificates,
Series 2002-HE16, Class [___]
-----------------------------------------------------
Ladies and Gentlemen:
In connection with our acquisition of the above Certificates
we certify that (a) we understand that the Certificates are not being
registered under the Securities Act of 1933, as amended (the "Act"), or any
state securities laws and are being transferred to us in a transaction that is
exempt from the registration requirements of the Act and any such laws, (b) we
have such knowledge and experience in financial and business matters that we
are capable of evaluating the merits and risks of investments in the
Certificates, (c) we have had the opportunity to ask questions of and receive
answers from the Depositor concerning the purchase of the Certificates and all
matters relating thereto or any additional information deemed necessary to our
decision to purchase the Certificates, (d) either (i) we are not an employee
benefit plan that is subject to the Employee Retirement Income Security Act of
1974, as amended, or a plan or arrangement that is subject to Section 4975 of
the Internal Revenue Code of 1986, as amended, nor are we acting on behalf of
any such plan or arrangement or using the assets of any such plan or
arrangement to effect such acquisition, or (ii) provided the Certificate has
been the subject of an ERISA-Qualifying Underwriting, we are an insurance
company which is purchasing the Certificates with funds contained in an
"insurance company general account" (as defined in Section V(e) of Prohibited
Transaction Class Exemption 95-60 ("PTCE 95-60")) and our purchase and holding
of the Certificates are covered under Sections I and III of PTCE 95-60, (e) we
have not, nor has anyone acting on our behalf offered, transferred, pledged,
sold or otherwise disposed of the Certificates, any interest in the
Certificates or any other similar security to, or solicited any offer to buy
or accept a transfer, pledge or other disposition of the Certificates, any
interest in the Certificates or any other similar security from, or otherwise
approached or negotiated with respect to the Certificates, any interest in the
Certificates or any other similar security with, any person in any manner, or
made any general solicitation by means of general advertising or in any other
manner, or taken any other action, that would constitute a distribution of the
Certificates under the Act or that would render the disposition of the
Certificates a violation of Section 5 of the Act or require registration
pursuant thereto, nor will act, nor has authorized or will authorize any
person to act, in such manner with respect to the Certificates, (f) we are a
"qualified institutional buyer" as that term is defined in Rule 144A under the
Act ("Rule 144A") and have
L-1
completed either of the forms of certification to that effect attached hereto
as Annex 1 or Annex 2, (g) we are aware that the sale to us is being made in
reliance on Rule 144A, and (i) we are acquiring the Certificates for our own
account or for resale pursuant to Rule 144A and further, understand that such
Certificates may be resold, pledged or transferred only (A) to a person
reasonably believed to be a qualified institutional buyer that purchases for
its own account or for the account of a qualified institutional buyer to whom
notice is given that the resale, pledge or transfer is being made in reliance
on Rule 144A, or (B) pursuant to another exemption from registration under the
Act.
Very truly yours,
___________________________
Print Name of Transferee
By: ___________________________
Authorized Officer
L-2
ANNEX 1 TO EXHIBIT L
QUALIFIED INSTITUTIONAL BUYER STATUS UNDER SEC RULE 144A
[For Transferees Other Than Registered Investment Companies]
The undersigned (the "Buyer") hereby certifies as follows to
the parties listed in the Rule 144A Transferee Certificate to which this
certification relates with respect to the Certificates described therein:
1. As indicated below, the undersigned is the President,
Chief Financial Officer, Senior Vice President or other executive officer of
the Buyer.
2. In connection with purchases by the Buyer, the Buyer is a
"qualified institutional buyer" as that term is defined in Rule 144A under the
Securities Act of 1933, as amended ("Rule 144A") because (i) the Buyer owned
and/or invested on a discretionary basis $__________1 in securities (except
for the excluded securities referred to below) as of the end of the Buyer's
most recent fiscal year (such amount being calculated in accordance with Rule
144A and (ii) the Buyer satisfies the criteria in the category marked below.
___ Corporation, etc. The Buyer is a corporation (other than a bank,
savings and loan association or similar institution), Massachusetts
or similar business trust, partnership, or charitable organization
described in Section 501(c)(3) of the Internal Revenue Code of 1986,
as amended.
___ Bank. The Buyer (a) is a national bank or banking institution
organized under the laws of any State, territory or the District of
Columbia, the business of which is substantially confined to banking
and is supervised by the State or territorial banking commission or
similar official or is a foreign bank or equivalent institution, and
(b) has an audited net worth of at least $[o] as demonstrated in its
latest annual financial statements, a copy of which is attached
hereto.
___ Savings and Loan. The Buyer (a) is a savings and loan
association, building and loan association, cooperative bank,
homestead association or similar institution, which is supervised and
examined by a State or Federal authority having supervision over any
such institutions or is a foreign savings and loan association or
equivalent institution and (b) has an audited net worth of at least
$[o] as demonstrated in its latest annual financial statements, a
copy of which is attached hereto.
___ Broker-dealer. The Buyer is a dealer registered pursuant to
Section 15 of the Securities Exchange Act of 1934.
___ Insurance Company. The Buyer is an insurance company whose
primary and predominant business activity is the writing of insurance
or the reinsuring of risks underwritten by insurance companies and
which is subject to supervision by the
_____________________
1 Buyer must own and/or invest on a discretionary basis at lease
$100,000,000 in securities unless Buyer is a dealer, and, in that
case, Buyer must own and/or invest on a discretionary basis at least
$10,000,000 in securities.
L-1-1
insurance commissioner or a similar official or agency of a State,
territory or the District of Columbia.
___ State or Local Plan. The Buyer is a plan established and
maintained by a State, its political subdivisions, or any agency or
instrumentality of the State or its political subdivisions, for the
benefit of its employees.
___ ERISA Plan. The Buyer is an employee benefit plan within the
meaning of Title I of the Employee Retirement Income Security Act of
1974.
___ Investment Advisor. The Buyer is an investment advisor registered
under the Investment Advisors Act of 1940.
___ Small Business Investment Company. Buyer is a small business
investment company licensed by the U.S. Small Business Administration
under Section 301(c) or (d) of the Small Business Investment Act of
1958.
___ Business Development Company. Buyer is a business development
company as defined in Section 202(a)(22) of the Investment Advisors
Act of 1940.
3. The term "securities" as used herein does not include (i)
securities of issuers that are affiliated with the Buyer, (ii) securities that
are part of an unsold allotment to or subscription by the Buyer, if the Buyer
is a dealer, (iii) securities issued or guaranteed by the U.S. or any
instrumentality thereof, (iv) bank deposit notes and certificates of deposit,
(v) loan participations, (vi) repurchase agreements, (vii) securities owned
but subject to a repurchase agreement and (viii) currency, interest rate and
commodity swaps.
4. For purposes of determining the aggregate amount of
securities owned and/or invested on a discretionary basis by the Buyer, the
Buyer used the cost of such securities to the Buyer and did not include any of
the securities referred to in the preceding paragraph, except (i) where the
Buyer reports its securities holdings in its financial statements on the basis
of their market value, and (ii) no current information with respect to the
cost of those securities has been published. If clause (ii) in the preceding
sentence applies, the securities may be valued at market. Further, in
determining such aggregate amount, the Buyer may have included securities
owned by subsidiaries of the Buyer, but only if such subsidiaries are
consolidated with the Buyer in its financial statements prepared in accordance
with generally accepted accounting principles and if the investments of such
subsidiaries are managed under the Buyer's direction. However, such securities
were not included if the Buyer is a majority-owned, consolidated subsidiary of
another enterprise and the Buyer is not itself a reporting company under the
Securities Exchange Act of 1934, as amended.
5. The Buyer acknowledges that it is familiar with Rule 144A
and understands that the seller to it and other parties related to the
Certificates are relying and will continue to rely on the statements made
herein because one or more sales to the Buyer may be in reliance on Rule 144A.
6. Until the date of purchase of the Rule 144A Securities,
the Buyer will notify each of the parties to which this certification is made
of any changes in the information and conclusions herein. Until such notice is
given, the Buyer's purchase of the Certificates will constitute a
reaffirmation of this certification as of the date of such purchase. In
addition, if the
L-1-2
Buyer is a bank or savings and loan is provided above, the Buyer agrees that
it will furnish to such parties updated annual financial statements promptly
after they become available.
_____________________
Print Name of Buyer
By: _____________________
Name:
Title:
Date: ___________________
X-0-0
XXXXX 0 XX XXXXXXX L
QUALIFIED INSTITUTIONAL BUYER STATUS UNDER SEC RULE 144A
[For Transferees That are Registered Investment Companies]
The undersigned (the "Buyer") hereby certifies as follows to
the parties listed in the Rule 144A Transferee Certificate to which this
certification relates with respect to the Certificates described therein:
1. As indicated below, the undersigned is the President,
Chief Financial Officer or Senior Vice President of the Buyer or, if the Buyer
is a "qualified institutional buyer" as that term is defined in Rule 144A
under the Securities Act of 1933, as amended ("Rule 144A") because Buyer is
part of a Family of Investment Companies (as defined below), is such an
officer of the Adviser.
2. In connection with purchases by Buyer, the Buyer is a
"qualified institutional buyer" as defined in SEC Rule 144A because (i) the
Buyer is an investment company registered under the Investment Company Act of
1940, as amended and (ii) as marked below, the Buyer alone, or the Buyer's
Family of Investment Companies, owned at least $[o] in securities (other than
the excluded securities referred to below) as of the end of the Buyer's most
recent fiscal year. For purposes of determining the amount of securities owned
by the Buyer or the Buyer's Family of Investment Companies, the cost of such
securities was used, except (i) where the Buyer or the Buyer's Family of
Investment Companies reports its securities holdings in its financial
statements on the basis of their market value, and (ii) no current information
with respect to the cost of those securities has been published. If clause
(ii) in the preceding sentence applies, the securities may be valued at
market.
___ The Buyer owned $_______ in securities (other than the excluded
securities referred to below) as of the end of the Buyer's most
recent fiscal year (such amount being calculated in accordance with
Rule 144A).
___ The Buyer is part of a Family of Investment Companies which owned
in the aggregate $_______ in securities (other than the excluded
securities referred to below) as of the end of the Buyer's most
recent fiscal year (such amount being calculated in accordance with
Rule 144A).
3. The term "Family of Investment Companies" as used herein
means two or more registered investment companies (or series thereof) that
have the same investment adviser or investment advisers that are affiliated
(by virtue of being majority owned subsidiaries of the same parent or because
one investment adviser is a majority owned subsidiary of the other).
4. The term "securities" as used herein does not include (i)
securities of issuers that are affiliated with the Buyer or are part of the
Buyer's Family of Investment Companies, (ii) securities issued or guaranteed
by the U.S. or any instrumentality thereof, (iii) bank deposit notes and
certificates of deposit, (iv) loan participations, (v) repurchase agreements,
(vi) securities owned but subject to a repurchase agreement and (vii)
currency, interest rate and commodity swaps.
L-2-1
5. The Buyer is familiar with Rule 144A and understands that
the parties listed in the Rule 144A Transferee Certificate to which this
certification relates are relying and will continue to rely on the statements
made herein because one or more sales to the Buyer will be in reliance on Rule
144A. In addition, the Buyer will only purchase for the Buyer's own account.
6. Until the date of purchase of the Certificates, the
undersigned will notify the parties listed in the Rule 144A Transferee
Certificate to which this certification relates of any changes in the
information and conclusions herein. Until such notice is given, the Buyer's
purchase of the Certificates will constitute a reaffirmation of this
certification by the undersigned as of the date of such purchase.
___________________________
Print Name of Buyer or Adviser
By: _____________________
Name:
Title:
IF AN ADVISER:
___________________________
Print Name of Buyer
Date: ___________________
L-2-2
EXHIBIT M
REQUEST FOR RELEASE
(for Trustee)
CREDIT SUISSE FIRST BOSTON MORTGAGE SECURITIES CORP.
CSFB Mortgage Pass-Through Certificates, Series 2002-HE16
Class [_______]
Loan Information
----------------
Name of Mortgagor: __________________________
Servicer Loan No.: ___________________________
Trustee
-------
Name:
Address: ___________________________
___________________________
___________________________
Trustee Mortgage File No.:
The undersigned Servicers hereby acknowledge that they have
received from [Bank One, National Association] [LaSalle Bank National
Association] as a Custodian for the Holders of CSFB Mortgage Pass-Through
Certificates, of the above-referenced Series, the documents referred to below
(the "Documents"). All capitalized terms not otherwise defined in this Request
for Release shall have the meanings given them in the Pooling and Servicing
Agreement dated as of the Cut-off Date specified above (the "Agreement") among
the Depositor, DLJ Mortgage Capital, Inc., as seller (in such capacity,
"Seller"), Olympus Servicing, L.P., as a servicer (in such capacity, a
"Servicer") and as the special servicer (in such capacity, the "Special
Servicer"), Fairbanks Capital Corp., as a servicer (in such capacity, a
"Servicer") and U.S. Bank National Association as trustee (the "Trustee").
( ) Mortgage Note dated ________, ____, in the original principal sum of
$_______, made by _________, payable to, or endorsed to the order of,
the Trustee.
( ) Mortgage recorded on __________ as instrument no. _________ in the
County Recorder's Office of the County of _________, State of ________
in book/reel/docket of official records at page/image ___________.
( ) Deed of Trust recorded on __________ as instrument no. __________ in
the County Recorder's Office of the County of __________, State
of _________ in book/reel/docket ______ of official records at
page/image ______.
M-1
( ) Assignment of Mortgage or Deed of Trust to the Trustee, recorded
on ______as instrument no. ______ in the County Recorder's
Office of the County of ______, State of ________ in book/reel/
docket ____ of official records at page/image ____.
( ) Other documents, including any amendments, assignments or other
assumptions of the Mortgage Note or Mortgage.
( )
( )
( )
( )
The undersigned Servicers hereby acknowledge and agree as follows:
(1) Each Servicer shall hold and retain possession of the
Documents in trust for the benefit of the Trustee, solely
for the purposes provided in the Agreement.
(2) Each Servicer shall not cause or knowingly permit the
Documents to become subject to, or encumbered by, any claim,
liens, security interest, charges, writs of attachment or
other impositions nor shall the Servicers, if applicable,
assert or seek to assert any claims or rights of setoff to
or against the Documents or any proceeds thereof.
(3) Each Servicer shall return each and every Document
previously requested from the Mortgage File to the Custodian
when the need therefor no longer exists, unless the Mortgage
Loan relating to the Documents has been liquidated and the
proceeds thereof have been remitted to the Certificate
Account and except as expressly provided in the Agreement.
(4) The Documents and any proceeds thereof, including any
proceeds of proceeds, coming into the possession or control
of each Servicer shall at all times be earmarked for the
account of the Custodian, and each Servicer shall keep the
Documents and any proceeds separate and distinct from all
other property in each Servicer's possession, custody or
control.
[Servicers]
By: _________________
Its _________________
By: _________________
Its _________________
Date: ___________, 2001
M-2
EXHIBIT N
OFFICER'S CERTIFICATE WITH RESPECT TO PREPAYMENTS
[Date]
Via Facsimile
U.S. Bank National Association
000 Xxxx Xxxxx Xxxxxx
Xx. Xxxx, Xxxxxxxxx 00000
Attention: [__________________]
Re: Pre-Payments
Dear Sir or Madam:
_________________ hereby certifies that he/she is an officer of the Servicer,
holding the office set forth beneath his/her name and hereby further certifies
as follows:
With respect to the Mortgage Loans, as the term is defined in the Pooling and
Servicing Agreement, set forth in the attached schedule:
1. A Principal Prepayment in full was received during the related Due Period;
2. Any Prepayment Premium due under the terms of the Mortgage Note with
respect to such Principal Prepayment in full was received from the
mortgagor and deposited in the Collection Account; ____ Yes ____ No
3. As to each Mortgage Loan so noted on the attached schedule, all or part
of the Prepayment Premium required in connection with the Principal
Prepayment in full was waived based upon (Circle one): (i) the Servicer's
determination that such waiver would maximize recovery of Liquidation
Proceeds for such Mortgage Loan, taking into account the value of such
Prepayment Premium, or (ii)(A) the enforceability thereof be limited (1)
by bankruptcy insolvency, moratorium, receivership, or other similar law
relating to creditors' rights generally or (2) due to acceleration in
connection with a foreclosure or other involuntary payment, or (B) the
enforceability is otherwise limited or prohibited by applicable law;
4. We certify that all amounts due in connection with the waiver of a
Prepayment Premium inconsistent with number 3 above which are required to
be deposited by the Servicer pursuant to Section [3.19] of the Pooling
and Servicing Agreement, have been or will be so deposited.
By: [Servicer]
________________________________________
(Name) ______________________________________
Its: (Title)_________________________________
N-1
EXHIBIT O
FORM OF SERVICER REPORT
The following information will be e-mailed to Trustee in accordance with
Section 4.04:
Servicer Loan Number
Trust Loan Number (if applicable)
Scheduled Net Interest
Scheduled Principal
Curtailment Applied
Curtailment Adjustment
Mortgage Rate
Servicing Fee
P&I Payment
Beginning Scheduled Balance
Ending Scheduled Balance
Ending Actual Principal Balance
Due Date
Prepayment in full Principal
Prepayment in full Net Interest
Prepayment in full Penalty
Delinquencies:
1-29
30-59
60-89
90 +
Foreclosures
Bankruptcies
REO Properties
Loss Amounts
O-1
EXHIBIT P
Financial Security Assurance, Inc. Policy
(Available Upon Request)
P-1
EXHIBIT Q
FORM OF SUBSEQUENT TRANSFER AGREEMENT
THIS SUBSEQUENT TRANSFER AGREEMENT, dated as of [_____],
2002 (this "Subsequent Transfer Agreement"), among CREDIT SUISSE FIRST BOSTON
MORTGAGE SECURITIES CORP., a Delaware corporation, as depositor (the
"Depositor"), DLJ MORTGAGE CAPITAL, INC., a Delaware corporation, in its
capacity as seller under the Pooling and Servicing Agreement referred to below
(the "Seller"), and U.S. BANK NATIONAL ASSOCIATION, a national banking
association, as trustee (the "Trustee");
WHEREAS, the parties hereto are also among the parties to
the Pooling and Servicing Agreement, dated as of May 1, 2002, among the
Depositor, DLJ Mortgage Capital, Inc., as seller, U.S. Bank National
Association, as trustee, Olympus Servicing, L.P., as a servicer and special
servicer, Fairbanks Capital Corp. ("Fairbanks"), as a servicer, (the "Pooling
and Servicing Agreement"), in relation to the CSFB ABS Trust Series 2002-HE16,
CSFB Mortgage Pass-Through Certificates, Series 2002-HE16;
WHEREAS, Sections 2.01(d) of the Pooling and Servicing
Agreement provides for the parties hereto to enter into this Subsequent
Transfer Agreement in accordance with the terms and conditions of the Pooling
and Servicing Agreement;
NOW, THEREFORE, in consideration of the premises and for
other good and valuable consideration the receipt and adequacy of which are
hereby acknowledged the parties hereto agree as follows:
(i) The "Subsequent Transfer Date" and "Subsequent Cut-off
Date" with respect to this Subsequent Transfer
Agreement shall be [_______________], 2002.
(ii) The "Aggregate Subsequent Purchase Amount" with
respect to this Subsequent Transfer Agreement shall
be $[_____________], provided, however, that such
amount shall not exceed the amount on deposit in
the Prefunding Account.
(iii) The Subsequent Mortgage Loans conveyed on the
Subsequent Transfer Date shall satisfy the pool
characteristics for the Trust Fund identified in
Section 2.01(d) of the Pooling and Servicing
Agreement.
(iv) In case any provision of this Subsequent Transfer
Agreement shall be invalid, illegal or
unenforceable, the validity, legality and
enforceability of the remaining provisions or
obligations shall not in any way be affected or
impaired thereby.
Q-1
(v) In the event of any conflict between the provisions
of this Subsequent Transfer Agreement and the
Pooling and Servicing Agreement, the provisions of
the Pooling and Servicing Agreement shall prevail.
Capitalized terms used herein and not otherwise
defined have the meanings in the Pooling and
Servicing Agreement.
(vi) The Seller hereby sells, transfers, assigns, sets
over and otherwise conveys to the Depositor, without
recourse, all right title and interest in the
Subsequent Mortgage Loans identified in Schedule A,
including all interest and principal due on or with
respect to such Subsequent Mortgage Loans on or after
the Subsequent Cut-off Date and all interest and
principal payments on such Subsequent Mortgage Loans
received prior to the Subsequent Cut-off Date in
respect of installments of interest and principal due
thereafter, but not including principal and interest
due on such Subsequent Mortgage Loans prior to the
Subsequent Cut-off Date, any insurance policies in
respect of such Subsequent Mortgage Loans and all
proceeds of any of the foregoing.
(vii) This Subsequent Transfer Agreement shall be governed
by, and shall be construed and enforced in accordance
with the laws of the State of New York.
(viii) The Subsequent Transfer Agreement may be executed in
one or more counterparts, each of which so executed
and delivered shall be deemed an original, but all
such counterparts together shall constitute but one
and the same instrument.
Q-2
IN WITNESS WHEREOF, the parties to this Subsequent Transfer
Agreement have caused their names to be signed hereto by their respective
officers thereunto duly authorized as of the day and year first above written.
CREDIT SUISSE FIRST BOSTON MORTGAGE
SECURITIES CORP.,
as Depositor
By:_____________________________________
Name:
Title:
DLJ Mortgage Capital, Inc.,
as Seller
By:______________________________________
Name:
Title:
U.S. BANK NATIONAL ASSOCIATION,
not in its individual capacity, but solely as
Trustee
By:______________________________________
Name:
Title:
Q-3
Acknowledged and Agreed:
OLYMPUS SERVICING, L.P.,
as a Servicer and Special Servicer
By:_____________________________
Name:
Title:
FAIRBANKS CAPITAL CORP.,
as a Servicer
By:_____________________________
Name:
Title:
Q-4
EXHIBIT R
FORM OF SPECIAL REQUEST FOR RELEASE
R-1
EXHIBIT S
PERFORMANCE STANDARDS
Subject to the ramp-up time set forth in paragraph F below,
the following servicing performance standards (the "Performance Standards")
shall be applicable to the Servicer:
a. Outbound Calling and Collection Calls. As further
described below, in respect of Mortgage Loans for
which foreclosure actions have not been commenced,
and for which Servicer has no notice of litigation
or pre-litigation claims, Servicer shall make
telephone calls to Mortgagors according to the
following schedule:
1. Welcome Calls. At least three attempts during
the first thirty (30) days following the Cut-Off
Date.
2. Collection Calls, first 18 days of month. At
least one attempt every other Business Day at
a 25% Right Party Contact Rate.
3. Collection Calls, after the 18th day of the
month. At least two attempts every other
Business Day at 25% Right Party Contact Rate.
A further explanation of the Servicer's Calling Program is
as follows:
Welcome Calls. Welcome calls will be made regardless of the
Mortgagor's Delinquency status. If a borrower is Delinquent
in the first month following the Cut-Off Date, the calling
programs described below for collection calls will also be
followed.
Collection Calls -- First 18 Days of the Month. These calls
are made for all Mortgage Loans that are past due between
the first and 18th day of the month, except for loans that
are screened out from such calls for reasons including, but
not limited to: loans in bankruptcies, loans where the early
indicator scoring model indicates the historical payment
date is prior to the 18th of the month and loans for which
borrowers have requested in writing that the Servicer not
contact them.
Collection Calls -- after the 18th Day of the Month but Not
Yet in Foreclosure. These calls are made for all Mortgage
Loans that are Delinquent after the 18th day of the month,
except for loans that are screened out from such calls for
reasons including, but not limited to: bankruptcies, loans
in foreclosure loans for which Mortgagors have requested in
writing that the Servicer not contact them; and loans where
the early indicator scoring model indicates the historical
payment date is the 18th of the month.
b. Written Correspondence. The Service will prepare
and deliver the following written correspondence.
R-2
1. Early Late Notices. The Servicer will mail
a late notice to all Mortgagors once they
are 5 days past their due date, except for
the following loans that are screened out
for such written correspondence for
reasons including, but not limited to,
bankruptcies, interim payments in the
first 30 days after transfer and loans for
which the historical average payment date
is before the 15th day of delinquency; and
loans which have been analyzed by EI
scoring.
2. Twenty Day Collection Letter. The Servicer
will mail a 20-day delinquency letter on
the 20th day of delinquency.
3. Demands. When applicable, Servicer will
send a demand letter and intent to
foreclose via certified mail on the 33rd
day of delinquency.
c. Foreclosure Time Lines.
1. For Mortgage Loans in foreclosure, the
Servicer will meet or improve upon the
foreclosure timeline measured in the
aggregate on a rolling three month
weighted average basis, by loan count
across all states. The Servicer will use
the more stringent of the Xxxxxx Xxx or
Xxxxxxx Mac foreclosure time lines as may
be amended from time to time, in each
state, based on the standard with the
shortest time lines. Servicer will not be
penalized with a reduction in fees for
unavoidable delays including bankruptcy
filing, missing assignments and necessary
collateral documents, contested actions,
service of process delays, sheriff sale
scheduling delays, court delays in
entering judgment or scheduling hearing,
and other circumstances agreed to by
Owner, provided that Servicer has
documented its system accordingly.
d. Pre-foreclosure Resolution Rate
1. A "Pre-foreclosure Resolution" will be
obtained for at least 55% of the Mortgage
Loans (by number of Mortgage Loans) for
which Foreclosure actions have commenced
(a "Defaulted Mortgage Loan"), measured on
a rolling three-month average basis. The
Pre-foreclosure Resolution percentage
described in the preceding sentence shall
be calculated as of the number of
Pre-foreclosure Resolutions divided by the
sum of the number of Pre-foreclosure
Resolutions plus the number of Mortgage
Loans converting to REO Property during
the previous three months. REO Property
shall not include Mortgage Property taken
back by the Servicer pursuant to a
deed-in-lieu of foreclosure.
2. A "Pre-foreclosure Resolution" shall mean
any of the following:
Full reinstatement means any Defaulted
Mortgage Loan for which the Mortgagor
brings the Mortgage Loan back to a
contractually
R-3
current status either through a lump sum
payment or otherwise consistent with the
terms of the related Servicing Agreement.
Full payoff means any Defaulted Mortgage
Loan which is paid in full and such
payment in full is received by the
Servicer in full satisfaction of the
indebtedness owed under the applicable
Mortgage Note.
Short Liquidation means a Defaulted
Mortgage Loan for which a final payment in
an amount less than the indebtedness owed
under the applicable Mortgage Note is made
consistent with the terms of the related
Servicing Agreement and such payment is
received by the Servicer in full
satisfaction of such indebtedness,
including as the result of any short sale,
short refinance, or Mortgage Note sale.
Deed-in-Lieu of Foreclosure means a
Defaulted Mortgage Loan for which title to
the Mortgaged Property is taken back by
the Servicer through deed-in-lieu of
foreclosure and the resulting REO Property
is liquidated consistent with the terms of
the related Servicing Agreement.
Modification (subject to REMIC
restrictions) means a Defaulted Mortgage
Loan which is modified in a manner
consistent with the related Servicing
Agreement.
Performing Forbearance Plan means a
Defaulted Mortgage Loan for which a
Mortgagor has entered into a forbearance
plan for the repayment of the indebtedness
owed under the applicable Mortgage Note.
Take-out at Foreclosure Sale means the
Mortgaged Property related to a Defaulted
Mortgage Loan that is purchased at a
foreclosure sale by a party other than the
Servicer (or by Servicer on behalf of the
owner of the loan) in a manner consistent
with the related Servicing Agreement.
e. REO Sales
1. With respect to those REO Properties being
managed by the Servicer, the Servicer will
sell at least 15% of the sellable REO
Properties (by number of Mortgage Loans)
on a monthly basis and obtain "average net
proceeds" of at least 88% of the low
market value reflected in the indication
of value, in each case measured on a
rolling 3 month average basis.
2. "Average net proceeds" means proceeds from
sale after brokerage costs and closing
costs.
R-4
3. The Servicer will not be subject to a
performance standard with respect to REO
Sales for REO Properties managed by an REO
Manager (other than the Servicer) selected
by the Owner.
f Ramp-up Time
The Servicer shall endeavor to meet the Performance
Standards contained herein as soon as possible after the Cut-Off Date, but
shall not be considered to be in default under the Servicing Agreement unless
it fails a performance standard starting during the applicable period
reflected in the table below. For those performance standards measured on an
average or weighted average three-month rolling basis, the Servicer shall not
be considered in default under the Servicing Agreement unless it fails such
performance standard after completion of the applicable three-month period.
R-5
RAMP-UP PERIODS
-------------------------------- ---------------------- ----------------------
Performance Standard Applies First 90 Days Applies After 90 Days
-------------------------------- ---------------------- ----------------------
Welcome Call Attempts Yes N/A
-------------------------------- ---------------------- ----------------------
1 - 18 Day Call Attempts Yes Yes
-------------------------------- ---------------------- ----------------------
1 - 18 Day Right Party Hits No Yes
-------------------------------- ---------------------- ----------------------
18+ Day Call Attempts Yes Yes
-------------------------------- ---------------------- ----------------------
18+ Day Right Party Hits No Yes
-------------------------------- ---------------------- ----------------------
Written Correspondence (All) Yes Yes
-------------------------------- ---------------------- ----------------------
Pre-foreclosure Resolution Yes Yes
-------------------------------- ---------------------- ----------------------
Foreclosure Timeline Yes Yes
-------------------------------- ---------------------- ----------------------
REO Liquidation Rate Yes Yes
-------------------------------- ---------------------- ----------------------
REO Proceeds Yes Yes
-------------------------------- ---------------------- ----------------------
R-6
SCHEDULE I
Mortgage Loan Schedule
(Provided Upon Request)
I-1
SCHEDULE IIA
Representations and Warranties of Seller - DLJ Mortgage Capital, Inc.
(i) the Seller is a corporation duly organized, validly
existing and in good standing under the laws of the state of its
incorporation;
(ii) the Seller has full corporate power to own its property,
to carry on its business as presently conducted and to enter into and perform
its obligations under this Agreement;
(iii) the execution and delivery by the Seller of this
Agreement have been duly authorized by all necessary corporate action on the
part of the Seller; and neither the execution and delivery of this Agreement,
nor the consummation of the transactions herein contemplated hereby, nor
compliance with the provisions hereof, will conflict with or result in a
breach of, or constitute a default under, any of the provisions of any law,
governmental rule, regulation, judgment, decree or order binding on the Seller
or its properties or the certificate of incorporation or by-laws of the
Seller, except those conflicts, breaches or defaults which would not
reasonably be expected to have a material adverse effect on the Seller's
ability to enter into this Agreement and to consummate the transactions
contemplated hereby;
(iv) the execution, delivery and performance by the Seller
of this Agreement and the consummation of the transactions contemplated hereby
do not require the consent or approval of, the giving of notice to, the
registration with, or the taking of any other action in respect of, any state,
federal or other governmental authority or agency, except those consents,
approvals, notices, registrations or other actions as have already been
obtained, given or made and, in connection with the recordation of the
Mortgages, powers of attorney or assignments of Mortgages not yet completed;
(v) this Agreement has been duly executed and delivered by
the Seller and, assuming due authorization, execution and delivery by the
Trustee, the Servicers and the Depositor, constitutes a valid and binding
obligation of the Seller enforceable against it in accordance with its terms
(subject to applicable bankruptcy and insolvency laws and other similar laws
affecting the enforcement of the rights of creditors generally); and
(vi) to the knowledge of the Seller, there are no actions,
litigation, suits or proceedings pending or threatened against the Seller
before or by any court, administrative agency, arbitrator or governmental body
(i) with respect to any of the transactions contemplated by this Agreement or
(ii) with respect to any other matter which in the judgment of the Seller if
determined adversely to the Seller would reasonably be expected to materially
and adversely affect the Seller's ability to perform its obligations under
this Agreement; and the Seller is not in default with respect to any order of
any court, administrative agency, arbitrator or governmental body so as to
materially and adversely affect the transactions contemplated by this
Agreement.
II-1
SCHEDULE IIB
Representations and Warranties of Servicer and Special Servicer- Olympus
Servicing, L.P.
(i) Olympus Servicing, L.P. ("Olympus") is a limited
partnership duly organized, validly existing and in good standing under the
laws of the state of its formation;
(ii) Olympus has full limited partnership power to own
its property, to carry on its business as presently conducted and to enter
into and perform its obligations under this Agreement;
(iii) the execution and delivery by Olympus of this
Agreement have been duly authorized by all necessary corporate action on the
part of Olympus; and neither the execution and delivery of this Agreement, nor
the consummation of the transactions herein contemplated hereby, nor
compliance with the provisions hereof, will conflict with or result in a
breach of, or constitute a default under, any of the provisions of any law,
governmental rule, regulation, judgment, decree or order binding on Olympus or
its properties or the certificate of limited partnership or partnership
agreement of Olympus, except those conflicts, breaches or defaults which would
not reasonably be expected to have a material adverse effect on Olympus's
ability to enter into this Agreement and to consummate the transactions
contemplated hereby;
(iv) this Agreement has been duly executed and delivered
by Olympus and, assuming due authorization, execution and delivery by the
Trustee, the Seller and the Depositor, constitutes a valid and binding
obligation of Olympus enforceable against it in accordance with its terms
(subject to applicable bankruptcy and insolvency laws and other similar laws
affecting the enforcement of the rights of creditors generally); and
(v) to the knowledge of Olympus, there are no actions,
litigation, suits or proceedings pending or threatened against Olympus before
or by any court, administrative agency, arbitrator or governmental body (a)
with respect to any of the transactions contemplated by this Agreement or (b)
with respect to any other matter which in the judgment of Olympus if
determined adversely to Olympus would reasonably be expected to materially and
adversely affect Olympus's ability to perform its obligations under this
Agreement, other than as Olympus has previously advised Seller; and Olympus is
not in default with respect to any order of any court, administrative agency,
arbitrator or governmental body so as to materially and adversely affect the
transactions contemplated by this Agreement.
II-2
SCHEDULE IIC
Representations and Warranties of Servicer - Fairbanks Capital Corp.
(i) Fairbanks Capital Corp. ("Fairbanks") is a Utah corporation duly
organized, validly existing and in good standing under the laws of the state
of Utah;
(ii) Fairbanks has full power to own its properties, to carry on its
business as presently conducted and to enter into and perform its obligations
under this Agreement;
(iii) the execution and delivery by Fairbanks of this Agreement have
been duly authorized by all necessary action on the part of Fairbanks; and
neither the execution and delivery of this Agreement, nor the consummation of
the transactions herein contemplated hereby, nor compliance with the
provisions hereof, will conflict with or result in a breach of, or constitute
a default under, any of the provisions of any law, governmental rule,
regulation, judgment, decree or order binding on Fairbanks or its properties
or the charter or bylaws of Fairbanks, except those conflicts, breaches or
defaults which would not reasonably be expected to have a material adverse
effect on Fairbanks' ability to enter into this Agreement and to consummate
the transactions contemplated hereby;
(iv) this Agreement has been duly executed and delivered by Fairbanks
and, assuming due authorization, execution and delivery by the Trustee, the
Seller and the Depositor, constitutes a valid and binding obligation of
Fairbanks enforceable against it in accordance with its terms (subject to
applicable bankruptcy and insolvency laws and other similar laws affecting the
enforcement of the rights of creditors generally); and
(v) to the knowledge of Fairbanks, there are no actions, litigation,
suits or proceedings pending or threatened against Fairbanks before or by any
court, administrative agency, arbitrator or governmental body (a) with respect
to any of the transactions contemplated by this Agreement or (b) with respect
to any other matter which in the judgment of Fairbanks if determined adversely
to Fairbanks would reasonably be expected to materially and adversely affect
Fairbanks' ability to perform its obligations under this Agreement, other than
as Fairbanks has previously advised Seller; and Fairbanks is not in default
with respect to any order of any court, administrative agency, arbitrator or
governmental body so as to materially and adversely affect the transactions
contemplated by this Agreement.
II-3
SCHEDULE III
Representations and Warranties - Mortgage Loans
DLJMC, in its capacity as Seller, hereby makes the
representations and warranties set forth in this Schedule III to the Depositor
and the Trustee, as of the Closing Date, or the date specified herein, with
respect to the Mortgage Loans identified on Schedule I hereto.
(i) The Seller or its affiliate is the sole owner of
record and holder of the Mortgage Loan and the indebtedness evidenced by the
Mortgage Note. Immediately prior to the transfer and assignment to the
Depositor on the Closing Date or the Subsequent Transfer Date, as applicable,
the Mortgage Loan, including the Mortgage Note and the Mortgage, were not
subject to an assignment or pledge, and the Seller had good and marketable
title to and was the sole owner thereof and had full right to transfer and
sell the Mortgage Loan to the Depositor free and clear of any encumbrance,
equity, lien, pledge, charge, claim or security interest and has the full
right and authority subject to no interest or participation of, or agreement
with, any other party, to sell and assign the Mortgage Loan and following the
sale of the Mortgage Loan, the Depositor will own such Mortgage Loan free and
clear of any encumbrance, equity, participation interest, lien, pledge,
charge, claim or security interest.
(ii) Any and all requirements of any federal, state or
local law including, without limitation, usury, truth-in-lending, real estate
settlement procedures, consumer credit protection, equal credit opportunity or
disclosure laws applicable to the Mortgage Loan have been complied with in all
material respects.
(iii) The terms of the Mortgage Note and the Mortgage
have not been impaired, waived, altered or modified in any respect, except by
written instruments which have been recorded to the extent any such
recordation is required by law, or, necessary to protect the interest of the
Depositor. No instrument of waiver, alteration or modification has been
executed, and no Mortgagor has been released, in whole or in part, from the
terms thereof except in connection with an assumption agreement and which
assumption agreement is part of the Mortgage File and the terms of which are
reflected in the Mortgage Loan Schedule; the substance of any such waiver,
alteration or modification has been approved by the issuer of any related
Primary Insurance Policy and title insurance policy, to the extent required by
the related policies.
(iv) The Mortgage Loan complies with all the terms,
conditions and requirements of the originator's underwriting standards in
effect at the time of origination of such Mortgage Loan.
(v) The information set forth in the Mortgage Loan
Schedule, attached to the Agreement as Schedule I, is complete, true and
correct in all material respects as of the Cut-off Date.
III-1
(vi) The related Mortgage is a valid, subsisting,
enforceable and perfected first lien on the Mortgaged Property and, all
buildings on the Mortgaged Property and all installations and mechanical,
electrical, plumbing, heating and air conditioning systems affixed to such
buildings, and all additions, alterations and replacements made at anytime
with respect to the foregoing securing the Mortgage Note's original principal
balance. The Mortgage and the Mortgage Note do not contain any evidence of any
security interest or other interest or right thereto. Such lien is free and
clear of all adverse claims, liens and encumbrances having priority over the
first lien, as applicable, of the Mortgage subject only to (1) the lien of
non-delinquent current real property taxes and assessments not yet due and
payable, (2) covenants, conditions and restrictions, rights of way, easements
and other matters of the public record as of the date of recording which are
acceptable to mortgage lending institutions generally and either (A) which are
referred to or otherwise considered in the appraisal made for the originator
of the Mortgage Loan, or (B) which do not adversely affect the appraised value
of the Mortgaged Property as set forth in such appraisal, and (3) other
matters to which like properties are commonly subject which do not materially
interfere with the benefits of the security intended to be provided by the
Mortgage or the use, enjoyment, value or marketability of the related
Mortgaged Property. Any security agreement, chattel mortgage or equivalent
document related to and delivered in connection with the Mortgage Loan
establishes and creates a valid, subsisting, enforceable and perfected first
lien and first priority security interest on the property described therein,
and the Seller has the full right to sell and assign the same to the
Depositor.
(vii) There are no mechanics' or similar liens or claims
which have been filed for work, labor or material (and no rights are
outstanding that under law could give rise to such liens) affecting the
related Mortgaged Property which are or may be liens prior to or equal to the
lien of the related Mortgage.
(viii) All taxes, governmental assessments, insurance
premiums, water, sewer and municipal charges, leasehold payments or ground
rents which previously became due and owing have been paid, or escrow funds
have been established in an amount sufficient to pay for every such escrowed
item which remains unpaid and which has been assessed but is not yet due and
payable.
(ix) The Mortgage Note and the Mortgage are not subject
to any right of rescission, set-off, counterclaim or defense, including,
without limitation, the defense of usury, nor will the operation of any of the
terms of the Mortgage Note or the Mortgage, or the exercise of any right
thereunder, render the Mortgage Note or Mortgage unenforceable, in whole or in
part, or subject to any right of rescission, set-off, counterclaim or defense,
including the defense of usury, and no such right of rescission, set-off,
counterclaim or defense has been asserted with respect thereto.
(x) The Mortgaged Property is not subject to any
material damage by waste, fire, earthquake, windstorm, flood or other
casualty. At origination of the Mortgage Loan there was, and there currently
is, no proceeding pending for the total or partial condemnation of the
Mortgaged Property.
III-2
(xi) All improvements subject to the Mortgage which were
considered in determining the appraised value of the Mortgaged Property lie
wholly within the boundaries and building restriction lines of the Mortgaged
Property (and wholly within the project with respect to a condominium unit)
and no improvements on adjoining properties encroach upon the Mortgaged
Property except those which are insured against by a title insurance policy
and all improvements on the property comply with all applicable zoning and
subdivision laws and ordinances.
(xii) Seller has delivered or caused to be delivered to
the Trustee or the Custodian on behalf of the Trustee the original Mortgage
bearing evidence that such instruments have been recorded in the appropriate
jurisdiction where the Mortgaged Property is located as determined by the
Seller (or, in lieu of the original of the Mortgage or the assignment thereof,
a duplicate or conformed copy of the Mortgage or the instrument of assignment,
if any, together with a certificate of receipt from the Seller or the
settlement agent who handled the closing of the Mortgage Loan, certifying that
such copy or copies represent true and correct copy(ies) of the originals) and
that such original(s) have been or are currently submitted to be recorded in
the appropriate governmental recording office of the jurisdiction where the
Mortgaged Property is located) or a certification or receipt of the recording
authority evidencing the same.
(xiii) The Mortgage File contains each of the documents
specified in Section 2.01(b) of the Agreement.
(xiv) As of the Closing Date, each Mortgage Loan shall be
serviced in all material respects in accordance with the terms of the
Agreement.
(xv) All buildings or other customarily insured
improvements upon the Mortgaged Property are insured by an insurer acceptable
under the FNMA Guides, against loss by fire, hazards of extended coverage and
such other hazards as are provided for in the FNMA Guides or by FHLMC, as well
as all additional requirements set forth in this Agreement. All such standard
hazard policies are in full force and effect and on the date of origination
contained a standard mortgagee clause naming the Seller and its successors in
interest and assigns as loss payee and such clause is still in effect and all
premiums due thereon have been paid. If at the time of origination, the
Mortgage Loan was required to have flood insurance coverage in accordance with
the Flood Disaster Protection Act of 1973, as amended, such Mortgage Loan is
covered by a flood insurance policy meeting the requirements of the current
guidelines of the Federal Insurance Administration which policy conforms to
FNMA and FHLMC requirements, as well as all additional requirements set forth
in this Agreement. Such policy was issued by an insurer acceptable under FNMA
or FHLMC guidelines. The Mortgage obligates the Mortgagor thereunder to
maintain all such insurance at the Mortgagor's cost and expense, and upon the
Mortgagor's failure to do so, authorizes the holder of the Mortgage to
maintain such insurance at the Mortgagor's cost and expense and to seek
reimbursement therefor from the Mortgagor.
(xvi) With respect to a Mortgage Loan, the Mortgage
creates a first lien or a first priority ownership interest in an estate in
fee simple in real property securing the related Mortgage Note.
III-3
(xvii) As of the Cut-off Date, no Mortgage Loan is (a) a
non-performing loan (i.e., a mortgage loan that is more than 90 days
delinquent); (b) a re-performing loan (i.e. a mortgage loan that was more than
90 days delinquent within the twelve-month period preceding the Cut-off Date
but is contractually current); or (c) a sub-performing loan (i.e. a mortgage
loan that is at least 30 days delinquent but subject to a payment plan or
agreement pursuant to which the Mortgagor is contractually current).
(xix) The Mortgage Note and the related Mortgage are
original and genuine and each is the legal, valid and binding obligation of
the maker thereof, enforceable in all respects in accordance with its terms
subject to bankruptcy, insolvency, moratorium, reorganization and other laws
of general application affecting the rights of creditors and by general
equitable principles.
(xx) To the knowledge of the Seller, (i) no mortgage
loan in the mortgage pool or in either of the loan groups contemplated under
the terms of this Agreement was subject to the Home Ownership and Equity
Protection Act of 1994 or any comparable state law, (ii) no proceeds from any
mortgage loan in the mortgage pool or in either of the loan groups
contemplated under the terms of this Agreement were used to finance
single-premium credit insurance policies, and (iii) no mortgage loan in the
mortgage pool or in either of the loan groups contemplated under the terms of
this Agreement will impose a prepayment premium for a term in excess of five
years.
III-4
