Exhibit 4.1
CREDIT SUISSE FIRST BOSTON MORTGAGE SECURITIES CORP.,
Depositor,
[----------------------------],
Seller and Servicer,
and
[----------------------------],
Trustee
FORM OF
POOLING AND SERVICING AGREEMENT
Dated as of [_________], 200_
relating to
[----------------------------]
MORTGAGE-BACKED PASS-THROUGH CERTIFICATES, SERIES 200_-___
TABLE OF CONTENTS
Page
ARTICLE I DEFINITIONS...................................................3
ARTICLE II CONVEYANCE OF TRUST FUND; REPRESENTATIONS AND WARRANTIES.....27
SECTION 2.01 Conveyance of Trust Fund..............................27
SECTION 2.02 Acceptance by Trustee.................................29
SECTION 2.03 Representations, Warranties and Covenants of
the Servicer and Seller..............................30
SECTION 2.04 Representations, Warranties and Covenants of the
Servicer and the Seller with respect to the
Mortgage Loans........................................31
SECTION 2.05 Issuance of Certificates..............................39
SECTION 2.06 REMIC Provisions......................................39
ARTICLE III ADMINISTRATION AND SERVICING OF MORTGAGE LOANS...............44
SECTION 3.01 Servicing Standard....................................44
SECTION 3.02 Enforcement of the Obligations of Sub-Servicers.......45
SECTION 3.03 Termination of the Rights of Sub-Servicers............46
SECTION 3.04 Liability of the Servicer.............................46
SECTION 3.05 Rights of the Depositor and the Trustee in Respect
of the Servicer.......................................47
SECTION 3.06 Trustee to Act as Servicer...........................47
SECTION 3.07 Collection of Mortgage Loan Payments.................47
SECTION 3.08 Collection of Taxes, Assessments and Similar Items;
Escrow Accounts......................................49
SECTION 3.09 Permitted Withdrawals from the Custodial Account.....50
SECTION 3.10 Maintenance of Primary Mortgage Insurance Policies;
Collections Thereunder...............................51
SECTION 3.11 Maintenance of Hazard Insurance and Other Insurance. 52
SECTION 3.12 Enforcement of Due-On-Sale Clauses; Assumption
Agreements...........................................53
SECTION 3.13 Realization Upon Defaulted Mortgage Loans............55
SECTION 3.14 Trustee to Cooperate; Release of Trustee Mortgage
Files................................................56
SECTION 3.15 Documents, Records and Funds in Possession of Servicer
to be Held for the Depositor and the Trustee for the
Benefit of the Certificateholders....................57
SECTION 3.16 Servicing Compensation...............................57
SECTION 3.17 Reports to the Depositor; Account Statements.........58
SECTION 3.18 Annual Statement as to Compliance....................58
SECTION 3.19 Annual Independent Public Accountants' Servicing
Report...............................................58
SECTION 3.20 Reports to Trustee...................................59
SECTION 3.21 Converted Mortgage Loans; Certain Procedures and
Purchases............................................59
ARTICLE IV PAYMENTS AND STATEMENTS TO CERTIFICATEHOLDERS..............61
SECTION 4.01 Certificate Account..................................61
SECTION 4.02 Distributions........................................61
SECTION 4.03 Allocation of Realized Losses........................63
SECTION 4.04 Monthly Statements to Certificateholders.............64
SECTION 4.05 Prepayment Interest Shortfalls and Relief Act
Shortfalls...........................................65
SECTION 4.06 The Policy...........................................65
ARTICLE V ADVANCES...................................................67
SECTION 5.01 Monthly Advances by the Servicer.....................67
SECTION 5.02 Advances for Attorneys' Fees.........................67
SECTION 5.03 Nonrecoverable Advances..............................68
SECTION 5.04 Advance Procedures...................................68
ARTICLE VI THE CERTIFICATES...........................................69
SECTION 6.01 The Certificates.....................................69
SECTION 6.02 Registration of Transfer and Exchange of
Certificates.........................................69
SECTION 6.03 Mutilated, Destroyed, Lost or Stolen Certificates....74
SECTION 6.04 Persons Deemed Owners................................75
SECTION 6.05 Access to List of Certificateholders' Names
and Addresses........................................75
SECTION 6.06 Maintenance of Office or Agency......................75
SECTION 6.07 Book-Entry Certificates..............................75
SECTION 6.08 Notices to Clearing Agency...........................76
SECTION 6.09 Definitive Certificates..............................76
ARTICLE VII THE DEPOSITOR AND THE SERVICER.............................78
SECTION 7.01 Liabilities of the Depositor and the Servicer........78
SECTION 7.02 Merger or Consolidation of the Depositor or the
Servicer.............................................78
SECTION 7.03 Limitation on Liability of the Depositor,
the Servicer and Others..............................79
SECTION 7.04 Servicer Not to Resign...............................79
SECTION 7.05 Errors and Omissions Insurance; Fidelity Bonds.......80
SECTION 7.06 Servicer May Own Certificates........................80
ARTICLE VIII DEFAULT....................................................81
SECTION 8.01 Events of Default....................................81
SECTION 8.02 Trustee to Act; Appointment of Successor.............82
.
SECTION 8.03 Notification to Certificateholders...................84
SECTION 8.04 Waiver of Events of Default..........................84
ARTICLE IX CONCERNING THE TRUSTEE.....................................85
SECTION 9.01 Duties of Trustee....................................85
SECTION 9.02 Certain Matters Affecting the Trustee................86
SECTION 9.03 Trustee Not Liable for Certificates or Mortgage
Loans................................................88
SECTION 9.04 Trustee May Own Certificates.........................88
SECTION 9.05 Trustee's Fees and Expenses..........................88
SECTION 9.06 Eligibility Requirements for Trustee.................88
SECTION 9.07 Resignation and Removal of Trustee...................89
SECTION 9.08 Successor Trustee....................................89
SECTION 9.09 Merger or Consolidation of Trustee...................90
SECTION 9.10 Appointment of Co-Trustee or Separate Trustee........90
SECTION 9.11 Office of the Trustee................................91
SECTION 9.12 Tax Returns..........................................91
ARTICLE X TERMINATION................................................92
SECTION 10.01 Termination upon Liquidation or Repurchase
of all Mortgage Loans...............................92
SECTION 10.02 Procedure Upon Optional Termination.................92
SECTION 10.03 Additional Termination Requirements.................93
ARTICLE XI MISCELLANEOUS PROVISIONS...................................95
SECTION 11.01 Amendment...........................................95
SECTION 11.02 Recordation of Agreement; Counterparts..............96
SECTION 11.03 Governing Law.......................................96
SECTION 11.04 Intention of Parties................................96
SECTION 11.05 Notices.............................................98
SECTION 11.06 Severability of Provisions..........................98
SECTION 11.07 Limitation on Rights of Certificateholders..........98
SECTION 11.08 Certificates Nonassessable and Fully Paid...........99
SECTION 11.09 Rights of the Insurer...............................99
EXHIBITS
Exhibit A: Form of Class A Certificate A-1
Exhibit B: Form of Class S Certificate B-1
Exhibit C: Form of Class R Certificate C-1
Exhibit D: Schedule of Mortgage Loans D-1
Exhibit E: Form of Initial Certification of Trustee E-1
Exhibit F: Form of Final Certification of Trustee F-1
Exhibit G: Form of Request for Release G-1
Exhibit H: Form of Investor Representation Letter H-1
Exhibit I: Form of Transferor Representation Letter I-1
Exhibit J: Form of Investor Transfer Affidavit and Agreement J-1
Exhibit K: Form of Transfer Certificate K-1
Exhibit L: Certificate Guaranty Insurance Policy L-1
THIS POOLING AND SERVICING AGREEMENT, dated as of [___________],
200_, is hereby executed by and between CREDIT SUISSE FIRST BOSTON MORTGAGE
SECURITIES CORP., depositor (the "Depositor"), [____________________________]
("[_______]"), in its capacity as seller (the "Seller") and in its capacity as
servicer (the "Servicer") and [____________________________], a national banking
association, as trustee (the "Trustee"). Capitalized terms used in this
Agreement and not otherwise defined will have the meanings assigned to them in
Article I below.
PRELIMINARY STATEMENT
The Depositor is the owner of the Mortgage Loans and the other
property being conveyed by it to the Trustee in its capacity as trustee of the
Trust Fund, in accordance with this Agreement, and the Depositor has duly
authorized the execution and delivery of this Agreement to provide for the
conveyance to the Trustee of the Trust Fund. As provided herein, the Depositor
will make an election to treat the assets consisting of Mortgage Loans and
certain other assets as described herein as a real estate mortgage investment
conduit (a "REMIC") for federal income tax purposes and such pool of assets will
be designated as "REMIC I". The Class R-I Certificates will represent the sole
class of "residual interests" in REMIC I for purposes of the REMIC Provisions
(as defined herein) under federal income tax law. The following table
irrevocably sets forth the designation, the REMIC I Remittance Rate, the initial
Uncertificated Balance, and solely for purposes of satisfying Treasury
regulation Section 1.860G-1(a)(4)(iii), the "latest possible maturity date" for
each of the REMIC I Regular Interests. None of the REMIC I Regular Interests
will be certificated.
REMIC I INITIAL LATEST
DESIGNATION REMITTANCE UNCERTIFICATED POSSIBLE
DATE RATE BALANCE MATURITY(1)
-------------------------------------------------------------------------------
(1) Solely for purposes of Section 1.860G-1(a)(4)(iii) of the Treasury
regulations, the Distribution Date immediately following the maturity date
for the Mortgage Loan with the latest maturity date has been designated as
the "latest possible maturity date" for each REMIC I Regular Interest.
(2) Calculated in accordance with the definition of "REMIC I Remittance Rate"
herein.
As provided herein, the Depositor will elect to treat the segregated
pool of assets consisting of the REMIC I Regular Interests as a REMIC for
federal income tax purposes, and such segregated pool of assets will be
designated as REMIC II. The Class R-II Certificates will represent the sole
class of "residual interests" in REMIC II for purposes of the REMIC Provisions
under federal income tax law. The following table irrevocably sets forth the
designation, Certificate Rate, aggregate Initial Certificate Principal Balance
and Maturity Date
1
for each Class of Certificates comprising the interests representing "regular
interests" in REMIC II (the "REMIC II Regular Certificates"). The "latest
possible maturity date" (determined solely for purposes of satisfying Treasury
Regulation Section 1.860G-1(a)(4)(iii)) for each Class of REMIC II Regular
Certificates shall be the first Distribution Date that follows the stated
maturity date for the Mortgage Loan included in the Trust Fund as of the Closing
Date with the longest remaining term to stated maturity.
AGGREGATE
INITIAL
CERTIFICATE
CERTIFICATE PRINCIPAL MATURITY
DESIGNATION TYPE RATE BALANCES DATE
-------------------------------------------------------------------------------
Class A Senior
Class S Subordinate
---------------
* As set forth in the definition of "Certificate Rate" herein.
All covenants and agreements made by the Depositor herein are for the
benefit and security of the Certificateholders [and the Insurer]. The Depositor
is entering into this Agreement, and the Trustee is accepting the trusts created
hereby and thereby, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged. The principal balance of the
Mortgage Loans as of the Cut-off Date is $[__________].
The parties hereto intend to effect an absolute sale and assignment
of the Mortgage Loans to the Trustee for the benefit of Certificateholders [and
the Insurer] under the Mortgage Loan Purchase Agreement and this Agreement.
However, the Seller will hereunder absolutely assign and, as a precautionary
matter grant a security interest, in and to its rights, if any, in the Mortgage
Loans to the Trustee on behalf of Certificateholders [and the Insurer] to ensure
that the interest of the Insurer hereunder in the Mortgage Loans is fully
protected.
W I T N E S S E T H T H A T:
In consideration of the mutual agreements herein contained, the
Depositor, the Servicer, the Seller and the Trustee agree as follows:
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ARTICLE I
DEFINITIONS
Whenever used in this Agreement, the following words and phrases, unless
the context otherwise requires, shall have the following meanings:
ADJUSTMENT DATE: As to each Mortgage Loan, each date set forth in the
related Mortgage Note on which an adjustment to the interest rate on such
Mortgage Loan becomes effective.
ADVERSE REMIC EVENT: As defined in Section 2.06(f).
AGREEMENT: This Pooling and Servicing Agreement and any and all amendments
or supplements hereto.
APPRAISED VALUE: The appraised value of the Mortgaged Property based upon
the appraisal made for the originator at the time of the origination of the
related Mortgage Loan or the sales price of the Mortgaged Property at the time
of such origination, whichever is less, or with respect to any Mortgage Loan
that represents a refinancing, the lower of the appraised value at origination
or the appraised value of the Mortgaged Property based upon the appraisal made
at the time of such refinancing.
AVAILABLE DISTRIBUTION AMOUNT: With respect to any Distribution Date, the
excess of (a) the sum of (i) the aggregate amount of payments and collections
received by the Servicer in respect of each Mortgage Loan on or prior to the
related Determination Date and not previously remitted, from any source,
including amounts received from the related Mortgagor, Insurance Proceeds,
Liquidation Proceeds (net of related Liquidation Expenses) and condemnation
awards, and amounts received in connection with the purchase of any Mortgage
Loans by the Seller or Servicer and the substitution of Replacement Mortgage
Loans, and excluding interest and other earnings on amounts on deposit in the
Custodial Account and the Certificate Account, (ii) the aggregate amount of
Monthly Advances required to be remitted by the Servicer relating to such
Distribution Date and (iii) Insured Payments payable pursuant to the Policy;
over (b) the sum of (i) the aggregate amount of the servicing compensation to be
paid to the Servicer pursuant to the terms hereof (including, without
limitation, Servicing Fees, prepayment penalties, fees or premiums, late payment
charges and assumption fees and any excess interest charges payable by the
Mortgagor by virtue of any default or other non-compliance by the Mortgagor with
the terms of the Mortgage Loan or any other instrument or document executed in
connection therewith or otherwise), (ii) any amount included therein
representing late payments or other recoveries of principal or interest
(including Liquidation Proceeds (net of Liquidation Expenses), Insurance
Proceeds and condemnation awards) with respect to any Mortgage Loans in respect
of which the Servicer has made a previously unreimbursed Monthly Advance to the
extent of such Monthly Advance, (iii) amounts included therein representing
reimbursement of Nonrecoverable Advances and other amounts permitted to be
withdrawn from the Custodial Account or the Certificate Account, (iv) all
Monthly Payments or portions thereof (other than Principal Prepayments and other
unscheduled collections of principal) received in respect of scheduled principal
and interest on any Mortgage Loan due after
3
the related Due Period and included therein, (v) all payments due on any
Mortgage Loan on or prior to the Cut-off Date and included therein, (vi) an
amount equal to the Principal Balance of each Mortgage Loan immediately prior to
such Distribution Date multiplied by one-twelfth of the Trustee Fee Rate, (vii)
Principal Prepayments and other unscheduled collections of principal received
after the related Prepayment Period and included therein and (viii) the
Certificate Insurer Premium payable as of such Distribution Date.
BANKRUPTCY CODE: The United States Bankruptcy Code, as amended from time to
time (11 U.S.C.).
BENEFICIAL HOLDER: A Person holding a beneficial interest in any
Certificate through a Participant or an Indirect Participant or a Person holding
a beneficial interest in any Definitive Certificate, as defined in Section 6.07.
BOOK-ENTRY CERTIFICATES: Certificates evidencing a beneficial interest in
the Trust Fund, ownership and transfers of which shall be made through book
entries, as described in Section 6.07.
BUSINESS DAY: Any day other than (i) a Saturday or a Sunday, or (ii) a day
on which the Insurer or banking institutions in New York or the state in which
the Servicer or the Corporate Trust Office are located are authorized or
obligated by law or executive order to be closed.
CERTIFICATE: Any Class A, [Class S] or Class R Certificate executed and
authenticated by the Trustee for the benefit of the Certificateholders in
substantially the form or forms attached as Exhibits hereto.
CERTIFICATE ACCOUNT: The separate account or accounts created and
maintained by the Trustee pursuant to Section 4.01, in the name of the Trustee
for the benefit of the Certificateholders [and the Insurer] for deposit of
payments and collections in respect of the Mortgage Loans pursuant to Section
4.01 hereof, which account or accounts must be an Eligible Account or Accounts.
CERTIFICATE PRINCIPAL BALANCE: On any date and with respect to the Class A
Certificates, the Initial Certificate Principal Balance of such Class less the
sum of (i) all amounts previously distributed to Holders of such Class with
respect to principal pursuant to Section 4.02 and (ii) all amounts of Realized
Losses previously allocated to such Class pursuant to Section 4.03, unless an
Insured Payment in respect of such amount has been paid by the Insurer and is
included in clause (i) above.
CERTIFICATE RATE: In the case of the Class A Certificates a per annum rate
equal to the weighted average, expressed as a percentage, of the Net Mortgage
Rates of the Mortgage Loans, weighted on the basis of the respective Principal
Balances of such Mortgage Loans at the close of business on the Due Date
immediately preceding the related Due Period after giving effect to
distributions on such date allocable to principal. [With respect to the Class S
Certificates and any Distribution Date, a rate per annum equal to the sum of the
following components:
4
(A) the REMIC I Remittance Rate for REMIC I Regular Interest [____]
minus two (2) times the weighted average of the REMIC I Remittance Rates
for REMIC I Regular Interest [____] and [____] applied to a notional
amount equal to the Uncertificated Balance of [____].
(B) the REMIC I Remittance Rate for REMIC I Regular Interest [____]
minus two (2) times the weighted average of the REMIC I Remittance Rates
for REMIC I Regular Interests [____] and [____] applied to a notional
amount equal to the Uncertificated Balance of [____].
(C) the REMIC I Remittance Rate for REMIC I Regular Interest [____]
minus four (4) times the weighted average of the REMIC I Remittance Rates
for REMIC I Regular Interests [____] and [____] applied to a notional
amount equal to the Uncertificated Balance of [____].]
Interest on the Certificates will be computed on the basis of a 360-day year
comprised of twelve 30-day months.
CERTIFICATE REGISTER: The register maintained pursuant to Section 6.02(a)
hereof.
CERTIFICATEHOLDER or HOLDER: The Person in whose name a Certificate is
registered in the Certificate Register.
CLASS: Each of the Class A, [Class S] or Class R Certificates, as
appropriate.
CLASS A CERTIFICATE: A Certificate executed and authenticated by the
Trustee in substantially the form set forth in EXHIBIT A hereto and designated
as a Class A Certificate and evidencing ownership of interests designated as
"regular interests" in REMIC II for purposes of the REMIC Provisions.
CLASS A CUMULATIVE INTEREST SHORTFALL AMOUNT: On any Distribution Date, an
amount equal to (i) any portion of a Class A Interest Distribution Amount that
was not distributed to the Holders of the Class A Certificates on any preceding
Distribution Date less (ii) any amount described in clause (i) hereof that is
included in a Realized Loss that has been allocated to the Class A Certificates
on or prior to such Distribution Date.
CLASS A INTEREST DISTRIBUTION AMOUNT: On any Distribution Date, (a)
one-twelfth of the product of (i) the Certificate Principal Balance of the Class
A Certificates immediately prior to such Distribution Date and (ii) the
applicable Certificate Rate, minus (b) the Insurer Premium and the aggregate
amount of Prepayment Interest Shortfalls and Relief Act Shortfalls allocated to
such Certificates pursuant to Section 4.05 on such Distribution Date.
CLASS A PRINCIPAL DISTRIBUTION AMOUNT: (a) On any Distribution Date, the
sum of (i) the principal due on the related Due Date for each Mortgage Loan and
received during the related Due Period or with respect to which a Monthly
Advance was made with respect to the related Due Period, (ii) for each Mortgage
Loan that was prepaid during the related Prepayment Period, the amount of the
Principal Prepayment including, with respect to any Mortgage Loan that was the
subject of a Debt Service Reduction in any prior Prepayment Period, the amount
of
5
any such Principal Prepayment that exceeds the Principal Balance of such
Mortgage Loan as of the date of the prepayment, (iii) for each Mortgage/ Loan
that was purchased by the Seller or Servicer during the related Prepayment
Period pursuant to Section 2.01, 2.02, 2.04, 3.12, 3.21 or 10.01 hereof, the
principal amount of the Purchase Price (net of any amounts with respect to which
a distribution of principal has already been made) and the amount of any
shortfall deposited in the Custodial Account in connection with the substitution
of a Deleted Mortgage Loan pursuant to Section 2.01, 2.02 or 2.04 hereof during
the related Prepayment Period, (iv) the aggregate amount of the principal
portion of Liquidation Proceeds and the principal portion of Insurance Proceeds
received with respect to such Mortgage Loan net of any withdrawals permitted
hereunder to be made by the Servicer from the Custodial Account with respect to
such Mortgage Loan, (v) for each Mortgage Loan with respect to which any other
unscheduled recovery of principal has been received during the related
Prepayment Period, the amount of such unscheduled recovery, (vi) the amount of
any related Overcollateralization Increase Amount for such Distribution Date,
and (vii) the payment of any Overcollateralization Deficit pursuant to the
Policy; MINUS (viii) the amount of any related Overcollateralization Reduction
Amount for such Distribution Date and (b) on the Scheduled Final Distribution
Date, the outstanding Certificate Principal Balance of the Class A Certificates.
CLASS R CERTIFICATE: Any one of the Class R-I or Class R-II Certificates.
CLASS R-I CERTIFICATE: A Certificate executed and authenticated by the
Trustee in substantially the form set forth in Exhibit C and designated as a
Class R-I Certificate and evidencing an interest designated as a "residual
interest" in REMIC I for purposes of the REMIC Provisions.
CLASS R-II CERTIFICATE: A Certificate executed and authenticated by the
Trustee in substantially the form set forth in Exhibit C and designated as a
Class R-II Certificate and evidencing an interest designated as a "residual
interest" in REMIC II for purposes of the REMIC Provisions.
CLASS S CERTIFICATE: A Certificate executed and authenticated by the
Trustee in substantially the form set forth in Exhibit C hereto and designated
as a Class S Certificate and evidencing ownership of interests designated as
"regular interests" in REMIC II for purposes of the REMIC Provisions.
CLASS S CUMULATIVE INTEREST SHORTFALL AMOUNT: On any Distribution Date, an
amount equal to (i) any portion of a Class S Interest Distribution Amount that
was not distributed to the Holders of the Class S Certificates on any preceding
Distribution Date less (ii) any amount described in clause (i) hereof that is
included in a Realized Loss that has been allocated to the Class S Certificates
on or prior to such Distribution Date.
CLASS S INTEREST DISTRIBUTION AMOUNT: On any Distribution Date, (a) the
aggregate of the product of (i) the Principal Balance of each Mortgage Loan
immediately after the Distribution Date preceding such Distribution Date (or,
with respect to the first Distribution Date, immediately prior to the Closing
Date) and (ii) one-twelfth of 0.70%, plus (b) the product of (i) the Class S
Cumulative Interest Shortfall Amount and (ii) the Certificate Rate for the Class
A Certificates (the sum of (a) and (b) being equal to the sum, for each of the
components of the
6
Certificate Rate with respect to the Class S Certificates of the product of such
Certificate Rate and the applicable notional amount as specified in the
definition of Certificate Rate), minus (c) the aggregate amount of Prepayment
Interest Shortfalls and Relief Act Shortfalls allocated to the Class S
Certificates pursuant to Section 4.05 on such Distribution Date.
CLEARING AGENCY: An organization registered as a "clearing agency" pursuant
to Section 17A of the Securities Exchange Act of 1934, as amended, which
initially shall be DTC.
CODE: The Internal Revenue Code of 1986, as amended.
CONVERTIBLE MORTGAGE LOAN: Any Mortgage Loan which by its terms grants to
the related Mortgagor the option to convert the interest rate borne by such
Mortgage Loan from an adjustable interest rate to a fixed interest rate.
CONVERTING MORTGAGE LOAN: Any Convertible Mortgage Loan with respect to
which the related Mortgagor has given notice of its intent to convert from an
adjustable interest rate to a fixed interest rate and prior to the conversion of
such Convertible Mortgage Loan.
CORPORATE TRUST OFFICE: The designated office of the Trustee in the State
of ------------- Minnesota at which at any particular time its corporate trust
business shall be administered, which office at the date of the execution of
this Agreement is located at [-------------------------].
CUMULATIVE INSURANCE PAYMENTS: As of any time of determination, the
aggregate amount of all Insured Payments previously made by the Insurer under
the Policy plus any unpaid Insurer Premium, plus interest thereon from the date
such amounts became due until paid in full, at a rate of interest equal to the
Late Payment Rate and in accordance with Section 3.03(a) of the Insurance
Agreement, minus the sum of the aggregate of all payments previously made to the
Insurer pursuant to Section 4.02 hereof as reimbursement for such amounts.
CUSTODIAL ACCOUNT: The deposit account or accounts created and maintained
by the Servicer pursuant to Section 3.07 hereof in the name of a depository
institution which may be the Servicer for the benefit of the Certificateholders
[and the Insurer], which account or accounts must be Eligible Accounts.
CUT-OFF DATE: [_________ 1, 200_].
DEBT SERVICE REDUCTION: With respect to any Mortgage Loan, a reduction in
the scheduled Monthly Payment for such Mortgage Loan by a court of competent
jurisdiction in a proceeding under the Bankruptcy Code, except such a reduction
constituting a Deficient Valuation or any reduction that results in a permanent
forgiveness of principal.
DEFICIENCY AMOUNT: With respect to the Class A Certificates as of any
Distribution Date, the sum of (i) any shortfall in the Available Distribution
Amount to pay the interest portion of a Realized Loss, net of any interest
shortfalls relating to any Prepayment Interest Shortfalls and Relief Act
Shortfalls allocated to the Class A Certificates and (ii) the
Overcollateralization Deficit.
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DEFICIENT VALUATION: With respect to any Mortgage Loan, a valuation by a
court of competent jurisdiction of the Mortgaged Property in an amount less than
the then outstanding indebtedness under the Mortgage Loan, or that results in a
permanent forgiveness of principal, which valuation in either case results from
a proceeding under the Bankruptcy Code.
DELETED MORTGAGE LOAN: A Mortgage Loan replaced or to be replaced by a
Replacement Mortgage Loan.
DELINQUENCY AMOUNT: As of any Distribution Date, the product of the Rolling
Three Month Delinquency Percentage and the aggregate Principal Balances of the
Mortgage Loans as of the close of business on the last day of the related Due
Period immediately preceding such Distribution Date.
DELINQUENCY PERCENTAGE: With respect to any Distribution Date, the
percentage equivalent of a fraction (a) the numerator of which equals the
aggregate Principal Balances of all Mortgage Loans that are 90 or more days
delinquent, in foreclosure or converted to REO Properties as of the close of
business on the last day of the related Due Period and (b) the denominator of
which is the aggregate Principal Balance of the Mortgage Loans as of the close
of business on the last day of such Due Period.
DELIVERY DATE: [_________ 1, 200_].
DEPOSITOR: Credit Suisse First Boston Mortgage Securities Corp., a Delaware
corporation, or its successor in interest.
DEPOSITORY AGREEMENT: The Letter of Representation dated as of [_________
1, 200_] by and among DTC, the Depositor and the Trustee.
DETERMINATION DATE: The [___] day (or if such 15th day is not a Business
Day, the Business Day immediately preceding such [___] day) of the month of the
related Distribution Date.
DISQUALIFIED ORGANIZATION: Any organization defined as a "disqualified
organization" under Section 860E(e)(5) of the Code, which includes any of the
following: (i) the United States, any State or political subdivision thereof,
any possession of the United States, or any agency or instrumentality of any of
the foregoing (other than an instrumentality which is a corporation if all of
its activities are subject to tax and, except for the FHLMC, a majority of its
board of directors is not selected by such governmental unit), (ii) a foreign
government, any international organization, or any agency or instrumentality of
any of the foregoing, (iii) any organization (other than certain farmers'
cooperatives described in Section 521 of the Code) which is exempt from the tax
imposed by Chapter 1 of the Code (including the tax imposed by Section 511 of
the Code on unrelated business taxable income), (iv) rural electric and
telephone cooperatives described in Section 1381(a)(2)(C) of the Code and (v)
any other Person so designated by the Trustee based upon an Opinion of Counsel
that the holding of an Ownership Interest in a Class R-I Certificate or Class
R-II Certificate by such Person may cause the related REMIC or any Person having
an Ownership Interest in any Class of Certificates (other than such Person) to
incur a liability for any federal tax imposed under the Code that would not
otherwise be imposed but for the Transfer of an Ownership Interest in a Class
R-I Certificate or Class R-II
8
Certificate to such Person. The terms "United States", "State" and
"international organization" shall have the meanings set forth in Section 7701
of the Code or successor provisions.
DISTRIBUTION DATE: The [___] day of each calendar month, or if such [___]
day is not a Business Day, the next succeeding Business Day, commencing
[_________, 200_].
DTC: The Depository Trust Company.
DUE DATE: The first day of the calendar month in which the related
Distribution Date occurs.
DUE PERIOD: The period from and including the second day of the calendar
month preceding the calendar month in which any Distribution Date occurs to and
including the first day of the calendar month in which such Distribution Date
occurs.
ELIGIBLE ACCOUNT: Either (i) an account or accounts maintained with a
federal or state-chartered depository institution or trust company (which may be
the Servicer or an affiliate of the Servicer or which may be the Trustee or an
affiliate of the Trustee) the short-term unsecured debt obligations of which
(or, in the case of a depository institution or trust company that is the
principal subsidiary of a holding company, the short-term unsecured debt
obligations of such holding company) are rated by each Rating Agency not lower
than P-1 in the case of Moody's and A-1+ in the case of Standard & Poor's, (ii)
an account or accounts the deposits in which are fully insured by the FDIC,
provided that any such deposits not so insured shall be otherwise maintained
such that (as evidenced by an Opinion of Counsel delivered to the Trustee and
the Rating Agencies) the applicable Certificateholders have a claim with respect
to the funds in such account or a perfected first priority security interest
against any collateral (which shall be limited to Eligible Investments) securing
such funds that is superior to claims of any other depositors or creditors of
the depository institution or trust company with which such account is
maintained, (iii) a trust account or accounts maintained with the trust
department of a federal or state chartered depository institution or trust
company acting in its fiduciary capacity, provided that any such state chartered
depository institution is subject to regulation regarding funds on deposit
substantially similar to the regulations set forth in 12 C.F.R. ` 9.10(b), or
(iv) any account maintained at any Federal Home Loan Bank.
ELIGIBLE INVESTMENTS: At any time, any one or more of the following
obligations, instruments and securities:
(i) obligations of the United States or any agency thereof, provided
such obligations are backed by the full faith and credit of the United
States;
(ii) general obligations of or obligations guaranteed by any state of
the United States or the District of Columbia receiving the highest
long-term rating of Moody's and Standard & Poor's, or such lower ratings
as are acceptable to the Insurer and will not result in the downgrading or
withdrawal of the rating, if any, then assigned to the Class A
Certificates by each applicable Rating Agency;
(iii)commercial paper (having original maturities of not more than
270 days) which is then rated in the highest commercial paper rating
category of Moody's and
9
Standard & Poor's, or such lower category as is acceptable to the Insurer and
will not result in the downgrading or withdrawal of the rating then assigned to
the Class A Certificates by each applicable Rating Agency;
(iv) certificates of deposit, demand or time deposits, federal funds or
bankers' acceptances (in each case having maturities of not more than 365 days)
issued by any depository institution or trust company incorporated under the
laws of the United States or of any state thereof and subject to supervision and
examination by federal and/or state banking authorities, provided that the
commercial paper and/or long-term debt obligations of such depository
institution or trust company (or in the case of a depository institution or
trust company that is the principal subsidiary of a holding company, the
commercial paper or long-term debt obligations of such holding company) are then
rated in the highest rating category of Moody's and Standard & Poor's, in the
case of commercial paper, and in the highest category in the case of long-term
debt obligations, or such lower categories as is acceptable to the Insurer and
will not result in the downgrading or withdrawal of the rating then assigned to
the Class A Certificates by each applicable Rating Agency, and, in the case of
short-term debt obligations which have maturities of 30 days or less, a rating
of P-1 by Moody's, and a rating of A-1+ by Standard & Poor's;
(v) demand or time deposits or certificates of deposit issued by (a) any
Federal Home Loan Bank or (b) any bank or trust company or savings association
which is rated at least "A" by Standard & Poor's which has combined capital,
surplus and undistributed profits of not less than $50 million and fully insured
by the FDIC;
(vi) repurchase obligations with respect to any security described in (i)
and (ii) above or any other security issued or guaranteed by an agency or
instrumentality of the United States, in either case entered into with a
depository institution or trust company (acting as principal) described in (iv)
above;
(vii)securities bearing interest or sold at a discount issued by any
corporation incorporated under the laws of the United States or any state
thereof which, at the time of such investment or contractual commitment
providing for such investments are then rated in the highest rating category of
Moody's and Standard & Poor's or in such lower rating category as will not
result in the downgrading or withdrawal of the rating, if any, then assigned to
the Class A Certificates by each applicable Rating Agency;
(viii) such other investments which are acceptable to the Insurer and do
not adversely affect the rating, if any, on the Class A Certificates by each
applicable Rating Agency; and
(ix) units of taxable money-market portfolios rated in the highest rating
category by Moody's and Standard & Poor's and not restricted to obligations
issued or guaranteed by any agency or instrumentality of the United States or
entities whose obligations are backed by the full faith and credit of the United
States and repurchase agreements collateralized by such obligations.
10
PROVIDED that (A) such obligation or security is held for a temporary period
pursuant to Treasury Regulations Section 1.860G-2(g)(1), and (B) Eligible
Investments shall include only such obligations or securities that mature on or
before the (i) Business Day immediately preceding the next Distribution Date
with respect to amounts on deposit in the Certificate Account and (ii) the
second Business Day immediately preceding the next Distribution Date with
respect to amounts on deposit in the Custodial Account. In addition, no Eligible
Investment which incorporates a penalty for early withdrawal will be used unless
the maturity of such Eligible Investment is on or before the Business Day
immediately preceding the next Distribution Date.
ESCROW ACCOUNT: As defined in Section 3.08.
EVENT OF DEFAULT: As defined in Section 8.01 hereof.
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.
FINAL DISTRIBUTION DATE: The Distribution Date on which the final
distribution in respect of the Certificates will be made pursuant to Section
10.01, which Final Distribution Date shall in no event be later than the end of
the 90-day liquidation period described in Section 10.03.
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.
[INDEX: With respect to any Mortgage Loan and as to any Adjustment Date
therefor, a per annum rate equal to the weekly average yield on U.S. Treasury
securities adjusted to a constant maturity of one year as reported by the
Federal Reserve Board in statistical Release No. H.15(519) as of the date
specified in the related Mortgage Note, or, in the event that such index is no
longer available, an index selected by the Servicer and reasonably acceptable to
the Trustee that is based on comparable information.]
INDIRECT PARTICIPANTS: Entities, such as banks, brokers, dealers and trust
companies, that clear through or maintain a custodial relationship with a
Participant, either directly or indirectly.
INITIAL CERTIFICATE PRINCIPAL BALANCE: With respect to the Class A
Certificates, $[_______________].
[INSURANCE ACCOUNT: The account or accounts created and maintained pursuant
to Section 4.06, which shall be entitled "[________________________], as
trustee, in trust for the registered holders of [______________],
Mortgage-Backed Pass-Through Certificates, Series 200_-___, Class A," and which
must be an Eligible Account.
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[INSURANCE AGREEMENT: The Insurance Agreement dated as of [__________,
200_] among the Insurer, the Trustee, the Servicer, the Seller and the
Depositor.]
INSURANCE PROCEEDS: Amounts paid pursuant to any insurance policy
with respect to a Mortgage Loan that have not been used to restore the related
property.
INSURED PAYMENT: With respect to the Class A Certificates, as of any
Distribution Date, the Deficiency Amount, if any, for such Distribution Date.
[INSURER: [___________________] or its successors in interest.]
INSURER DEFAULT: The existence and continuance of any of the following: (a)
a failure by the Insurer to make a payment required under the Policy in
accordance with its terms; or (b)(i) the Insurer (A) files any petition or
commences any case or proceeding under any provision or chapter of the
Bankruptcy Code or any other similar federal or state law relating to
insolvency, bankruptcy, rehabilitation, liquidation or reorganization, (B) makes
a general assignment for the benefit of its creditors, or (C) has an order for
relief entered against it under the Bankruptcy Code or any other similar federal
or state law relating to insolvency, bankruptcy, rehabilitation, liquidation or
reorganization which is final and nonappealable; or (ii) a court of competent
jurisdiction, the New York Department of Insurance or other competent regulatory
authority enters a final and nonappealable order, judgment or decree (A)
appointing a custodian, trustee, agent or receiver for the Insurer or for all or
any material portion of its property or (B) authorizing the taking of possession
by a custodian, trustee, agent or receiver of the Insurer (or the taking of
possession of all or any material portion of the property of the Insurer).
INSURER PREMIUM: With respect to any Distribution Date, an amount equal to
one-twelfth of the product of the Insurer Premium Rate and the aggregate
Certificate Principal Balance of the Class A Certificates immediately prior to
such Distribution Date.
INSURER PREMIUM RATE: The rate set forth in the Insurance Agreement.
LATE PAYMENT RATE: As defined in the Insurance Agreement.
LIQUIDATED LOAN: With respect to any Distribution Date, a Mortgage
Loan which, as of the close of business on the Business Day next preceding the
related Determination Date, (a) has been liquidated through deed in lieu of
foreclosure, sale in foreclosure, trustee's sale or other realization as
provided by applicable law of real property subject to the related Mortgage and
any security agreements or (b) with respect to which payment under related
private mortgage insurance or hazard insurance and/or from any public or
governmental authority on account of a taking or condemnation of any such
property has been received; PROVIDED, HOWEVER, that any REO Property shall not
be treated as a Liquidated Loan until such property has been finally liquidated.
LIQUIDATION EXPENSES: Customary and reasonable "out of pocket" expenses
incurred by the Servicer (or the related Sub-Servicer) in connection with the
liquidation of any defaulted Mortgage Loan and not recovered by the Servicer (or
the related Sub-Servicer) under a Primary Mortgage Insurance Policy for reasons
other than the Servicer's failure to comply with Section 3.10 hereof, such
expenses including, without limitation, legal fees and expenses, any
12
unreimbursed amount expended by the Servicer pursuant to Section 3.11 hereof
respecting the related Mortgage and any related and unreimbursed expenditures
for real estate property taxes or for property restoration or preservation to
the extent not previously reimbursed under any hazard insurance policy for
reasons other than the Servicer's failure to comply with Section 3.11 hereof.
LIQUIDATION PROCEEDS: Amounts other than Insurance Proceeds received in
connection with the liquidation of a defaulted Mortgage Loan, whether through
trustee's sale, foreclosure sale or otherwise or amounts received in connection
with any condemnation or partial release of a Mortgaged Property.
LOAN-TO-VALUE RATIO: As of any date, the fraction, expressed as a
percentage, the numerator of which is the Principal Balance of the related
Mortgage Loan at the date of determination and the denominator of which is the
Appraised Value of the Mortgaged Property or, in the case of a Replacement
Mortgage Loan, is the appraised value of the Mortgaged Property based upon an
appraisal made within 180 days prior to the date of substitution of such
Replacement Mortgage Loan for a Deleted Mortgage Loan.
MARGIN: As to each Mortgage Loan, the fixed percentage set forth in the
related Mortgage Note, which percentage is added to the Index on each Adjustment
Date to determine (subject to rounding in accordance with the related Mortgage
Note, the applicable Periodic Cap, Maximum Interest Rate and Minimum Interest
Rate) the interest rate to be borne by such Mortgage Loan until the next
Adjustment Date thereof.
MATURITY DATE: The latest possible maturity date, solely for purposes of
Section 1.860G-1(a)(4)(iii) of the Treasury regulations, by which the
Certificate Principal Balance, if any, of each Class of Regular Certificates
would be reduced to zero as determined under a hypothetical scenario which
assumes that such date is the Distribution Date in the month of the maturity
date of the Mortgage Loan with the latest scheduled maturity date. The Maturity
Date for each Class of Regular Certificates is [___________, 20__].
MAXIMUM INTEREST RATE: As to any Mortgage Loan, the maximum interest rate
that may be borne by such Mortgage Loan as set forth in the related Mortgage
Note, which rate may be applicable to such Mortgage Loan at any time during the
life of such Mortgage Loan.
MINIMUM INTEREST RATE: As to any Mortgage Loan, the minimum interest rate
that may be borne by such Mortgage Loan as set forth in the related Mortgage
Note, which rate may be applicable to such Mortgage Loan at any time during the
life of such Mortgage Loan.
MONTHLY ADVANCE: The aggregate of the advances made by or on behalf of the
Servicer with respect to any Distribution Date pursuant to Section 5.01 hereof,
the amount of any such advances being equal to the regular monthly installments
of principal and interest on the Mortgage Loans that were due on the related Due
Date and delinquent as of the close of business on the related Determination
Date, after adjustment of any delinquent interest payment to be equal to
interest at a rate equal to the Mortgage Rate less the Servicing Fee Rate on the
Principal Balance of the Mortgage Loans, less the aggregate amount of any such
delinquent payments that the Servicer has determined would constitute a
Nonrecoverable Advance if made.
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MONTHLY PAYMENT: The scheduled monthly payment of principal and interest on
a Mortgage Loan.
MOODY'S: ▇▇▇▇▇'▇ Investors Service or any successor thereto.
MORTGAGE: The mortgage, deed of trust or other instrument creating a
first lien on a fee simple or leasehold estate in real property securing a
Mortgage Note.
MORTGAGE FILE: For each Mortgage Loan, the Trustee Mortgage File and the
Servicer Mortgage File.
MORTGAGE LOAN: Each 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, evidenced by a Mortgage Note and secured by a Mortgage,
the mortgage loans so held being identified in the Mortgage Loan Schedule, as
amended from time to time.
MORTGAGE LOAN PURCHASE AGREEMENT: The Mortgage Loan Purchase Agreement
dated as of [____________, 200_] between the Depositor, Credit Suisse First
Boston Corporation and the Seller, pursuant to which the Depositor purchased the
Mortgage Loans from the Seller.
MORTGAGE LOAN REPURCHASE PRICE: The price, calculated as set forth in
Section 10.01, to be paid in connection with the repurchase of the Mortgage
Loans pursuant to an Optional Termination of the Trust Fund.
MORTGAGE LOAN SCHEDULE: The list of Mortgage Loans transferred to the
Trustee as part of the Trust Fund for the Certificates and from time to time
subject to this Agreement (as from time to time amended by the Servicer to
reflect the addition of Replacement Mortgage Loans and the deletion of Deleted
Mortgage Loans pursuant to the provisions of this Agreement), attached hereto as
EXHIBIT D, setting forth the following information with respect to each Mortgage
Loan:
(i) the loan number;
(ii) the city, state and zip code for each Mortgaged Property;
(iii) the Index or the Mortgage Rate;
[(iv) the Margin;
(v) the Maximum Interest Rate;
(vi) the Minimum Interest Rate;
(vii) the original term to maturity;
(viii) the remaining term to maturity;]
(ix) the original principal balance;
14
(x) the Principal Balance as of the Cut-off Date;
(xi) the first Due Date;
(xii) the Monthly Payment in effect as of the Cut-off Date;
(xiii) the Loan-to-Value Ratio at origination;
(xiv) the Appraised Value of the Mortgaged Property;
[(xv) the Net Mortgage Rate;]
(xvi) a code indicating whether the Mortgaged Property is either (a) a
detached single-family dwelling or a de minimis planned unit development, (b) a
condominium unit or a dwelling in a planned unit development, or (c) a two- to
four-family residential property;
(xvii) a code indicating whether the Mortgaged Property at the time of
origination was represented to be owner-occupied; and
(xviii) the purpose for which the financing was made.
Such schedule shall also set forth the total of the amounts described under (ix)
above for all of the Mortgage Loans. Such schedule may be in the form of more
than one list collectively setting forth all of the information required and
shall also be in a computer-readable format acceptable to the Trustee [and the
Insurer].
MORTGAGE NOTE: The original executed note or other evidence of the
indebtedness of a Mortgagor under a Mortgage Loan.
MORTGAGE RATE: The annual rate of interest borne by a Mortgage Note, which
is set forth in the related Mortgage Note. [The Mortgage Rate for each Mortgage
Loan as of the Cut-off Date will be adjusted on each Adjustment Date to a rate
equal to the sum of the Index applicable to such Adjustment Date and the Margin,
rounded to or up to the nearest multiple of [____]%, as specified in the related
Mortgage Note, subject to the application of the applicable Periodic Cap,
Maximum Interest Rate and Minimum Interest Rate.]
MORTGAGED PROPERTY: The underlying property securing a Mortgage Loan.
MORTGAGOR: The obligor on a Mortgage Note.
NET MORTGAGE RATE: As to each Mortgage Loan, with respect to any
Distribution Date, a rate per annum equal to (a) the Mortgage Rate in effect as
of the Due Date in the preceding calendar month minus (b) the Servicing Fee Rate
minus (c) the Trustee Fee Rate minus (d) [___]% per annum.
1933 ACT: The Securities Act of 1933, as amended.
NONRECOVERABLE ADVANCE: The portion of any Monthly Advance previously made
or proposed to be made by the Servicer or other advance previously made by the
Servicer that,
15
in the good faith judgment of the Servicer, will not or, in the case of a
current delinquency, would not be, ultimately recoverable by the Servicer from
Insurance Proceeds or Liquidation Proceeds (net of Liquidation Expenses) with
respect to the related Mortgage Loan.
OFFICERS' CERTIFICATE: A certificate signed by the Chairman of the Board,
any Vice Chairman of the Board, the President, an Executive Vice President,
Senior Vice President, a Vice President, or other authorized officer, and by the
Treasurer, the Secretary, or one of the Assistant Treasurers or Assistant
Secretaries of the Depositor, the Seller, the Servicer, a Sub-Servicer or the
Trustee, as the case may be, and delivered to the Insurer, the Depositor, the
Servicer or the Trustee, as required by this Agreement.
OPINION OF COUNSEL: A written opinion of counsel, who may be counsel for
the Depositor or the Servicer, reasonably acceptable to the Trustee [and the
Insurer]. With respect to the definition of Eligible Account in this Article I
and Sections 2.04 and 7.04 hereof and any opinion dealing with the qualification
of a REMIC or compliance with the REMIC Provisions, such counsel must (i) in
fact be independent of the Depositor and the Servicer, (ii) not have any direct
financial interest in the Depositor or the Servicer or in any affiliate of
either of them and (iii) not be connected with the Depositor or the Servicer as
an officer, employee, promoter, underwriter, trustee, partner, director or
Person performing similar functions.
OPTIONAL TERMINATION: The purchase of the Mortgage Loans pursuant to
Section 10.01.
OPTIONAL TERMINATION DATE: The date fixed by the Servicer for the purchase
of the Mortgage Loans pursuant to Section 10.01.
ORIGINAL OVERCOLLATERALIZATION AMOUNT: $[__________].
OVERCOLLATERALIZATION AMOUNT: As of any Distribution Date, the excess, if
any, of (a) the aggregate Principal Balances of the Mortgage Loans immediately
following such Distribution Date over (b) the Certificate Principal Balance of
the Class A Certificates as of such Distribution Date (after taking into account
the payment of the amounts described in clauses (i) through (v) of the
definition of Class A Principal Distribution Amount on such Distribution Date).
OVERCOLLATERALIZATION DEFICIENCY AMOUNT: With respect to any Distribution
Date, the excess, if any, of (a) the Specified Overcollateralization Amount
applicable to such Distribution Date over (b) the related Overcollateralization
Amount applicable to such Distribution Date prior to taking into account the
payment of any related Overcollateralization Increase Amounts on such
Distribution Date.
OVERCOLLATERALIZATION DEFICIT: With respect to any Distribution Date, the
excess of (x) the aggregate outstanding Class A Certificate Principal Balance
(after giving effect to all distributions to be made on such Distribution Date)
as of such Distribution Date over (y) the aggregate outstanding Principal
Balance of the Mortgage Loans as of the close of business on the last day of the
related Due Period (after giving effect to all distributions during such
period).
16
OVERCOLLATERALIZATION INCREASE AMOUNT: With respect to any Distribution
Date, the lesser of (a) the Overcollateralization Deficiency Amount as of such
Distribution Date (after taking into account the payment of the related Class A
Principal Distribution Amount on such Distribution Date (exclusive of the
payment of any related Overcollateralization Increase Amount)) and (b) the Class
S Interest Distribution Amount with respect to such Distribution Date as reduced
by (i) the interest portion of any Realized Losses and (ii) Cumulative Insurance
Payments for such Distribution Date.
OVERCOLLATERALIZATION REDUCTION AMOUNT: With respect to any Distribution
Date, an amount equal to the lesser of (a) the excess, if any, of (x) the
related Overcollateralization Amount that would exist following such
Distribution Date following payment of the related Class A Principal
Distribution Amount (exclusive of any reductions thereto attributable to the
related Overcollateralization Reduction Amount) over (y) the related Specified
Overcollateralization Amount for such Distribution Date and (b) the sum of the
amounts for such Distribution Date specified in clauses (i)-(v) of the
definition of Class A Principal Distribution Amount.
PARTICIPANT: A broker, dealer, bank, other financial institution or other
Person for whom DTC effects book-entry transfers and pledges of securities
deposited with DTC.
PASS-THROUGH ENTITY: (a) a regulated investment company described in
Section 851 of the Code, a real estate investment trust described in Section 856
of the Code, a common trust fund or an organization described in Section 1381(a)
of the Code, (b) any partnership, trust or estate or (c) any person holding a
Class A Certificate as nominee for another person.
PERCENTAGE INTEREST: The percentage interest (which may be expressed as a
fraction) evidenced by any Certificate, which (a) in the case of the Class A
Certificates, is equal to a fraction, the numerator of which is the Initial
Certificate Principal Balance of such Certificate, and the denominator of which
is equal to the aggregate Initial Certificate Principal Balances of all
Certificates of the same Class and (b) in the case of the Class S or Class R
Certificates, is set forth on the face thereof.
[PERIODIC CAP: With respect to each Mortgage Loan, the maximum increase or
decrease in the Mortgage Rate on any Adjustment Date (other than with respect to
certain of the Mortgage Loans, the first Adjustment Date for such Mortgage
Loan), as specified in the related Mortgage Note.]
PERSON: Any individual, corporation, partnership, joint venture,
association, joint-stock company, trust, unincorporated organization or
government, or any agency or political subdivision thereof.
[POLICY: The Certificate Guaranty Insurance Policy No. [______] issued by
the Insurer in respect of the Class A Certificates, a copy of which is attached
hereto as Exhibit L.]
PREPAYMENT INTEREST SHORTFALL: As to any Distribution Date and any Mortgage
Loan (other than a Mortgage Loan secured by an REO Property) that was the
subject of a Principal Prepayment during the related Prepayment Period, an
amount equal to the excess of one month's interest at the Mortgage Rate on the
Principal Balance of such Mortgage Loan over
17
the amount of interest paid by the Mortgagor for such Prepayment Period to the
date of such Principal Prepayment.
PREPAYMENT PERIOD: With respect to any Distribution Date, the calendar
month prior to the month in which such Distribution Date occurs.
PRIMARY MORTGAGE INSURANCE POLICY: Each primary policy of mortgage guaranty
insurance with respect to the Mortgage Loans or any replacement policy therefor.
PRINCIPAL BALANCE: With respect to any Mortgage Loan, as of the date of any
determination, the principal balance of such Mortgage Loan remaining to be paid
by the Mortgagor as of the Cut-off Date after deduction of all payments due on
or before the Cut-off Date, reduced (but not below zero) by the sum of (i) all
amounts previously received or collected by the Servicer in respect of principal
of such Mortgage Loan subsequent to the Cut-off Date, other than amounts
representing payments due on such Mortgage Loan on or prior to the Cut-off Date;
(ii) all Liquidation Proceeds (net of Liquidation Expenses) and Insurance
Proceeds allocated to principal; (iii) all amounts allocable to the principal of
such Mortgage Loan previously paid by the Servicer as part of a Monthly Advance,
in each case which were distributed to Certificateholders pursuant to Section
4.02; and (iv) all Realized Losses allocated to Certificateholders with respect
thereto on any previous Distribution Date. In the case of a Replacement Mortgage
Loan, "Principal Balance" shall mean, at the time of any determination, the
principal balance of such Replacement Mortgage Loan on the date of substitution
after deduction of all payments due on or before the Due Date in the month of
substitution, reduced by the sums described in (i) through (iv), above, after
such Due Date.
PRINCIPAL PREPAYMENT: Any Mortgagor payment or other recovery of principal
on a Mortgage Loan that is received in advance of its scheduled Due Date and is
not accompanied by an amount as to interest representing scheduled interest due
on any date or dates in any month or months subsequent to the month of
prepayment.
PURCHASE PRICE: With respect to any Mortgage Loan required to be purchased
by the Seller or Servicer pursuant to Section 2.01, 2.02, 2.04 or 3.12 or which
the Servicer purchases pursuant to Section 3.21 the sum of (i) 100% of the
Principal Balance of the Mortgage Loan on the date of such purchase, (ii)
accrued and unpaid interest on the Mortgage Loan at a rate equal to the sum of
the Net Mortgage Rate, the Trustee Fee Rate and 0.70% per annum to the next Due
Date and (iii) the amount of any unreimbursed Monthly Advances and other
advances made by the Servicer with respect to such Mortgage Loan and
reimbursable to the Servicer hereunder. With respect to any Mortgage Loan
required or allowed to be purchased, the Servicer or Seller, as applicable,
shall deliver to the Trustee an Officers' Certificate as to the calculation of
the Purchase Price.
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 other state having jurisdiction over such insurer in connection with
the insurance policy issued by such insurer, duly authorized and licensed by the
insurance regulatory authority of the state of its principal place of business
and, to the extent required by applicable law, each such other state, to
transact a mortgage guaranty insurance business in such state and each such
other state and to write the
18
insurance provided by the insurance policy issued by it and approved as an
insurer by FHLMC or FNMA and whose claims-paying ability will not adversely
affect the rating on the Certificates.
RATING AGENCY: ▇▇▇▇▇'▇ and Standard & Poor's or any successor thereto.
REALIZED LOSS: An amount determined by the Servicer and evidenced by an
Officers' Certificate delivered to the Trustee, in connection with any Mortgage
Loan equal to (a) with respect to any Liquidated Loan, the excess of the
Principal Balance of such Liquidated Loan plus interest thereon at a rate equal
to the sum of the applicable Net Mortgage Rate and the Trustee Fee Rate from the
Due Date as to which interest was last paid up to the Due Date next succeeding
such liquidation over proceeds, if any, received in connection with such
liquidation, after application of all withdrawals permitted to be made by the
Servicer from the related Custodial Account with respect to such Mortgage Loan,
(b) with respect to any Mortgage Loan which has become the subject of a
Deficient Valuation, the excess of the Principal Balance of the Mortgage Loan
over the principal amount as reduced in connection with the proceedings
resulting in the Deficient Valuation or (c) with respect to any Mortgage Loan
which has become the subject of a Debt Service Reduction, the present value of
all monthly Debt Service Reductions on such Mortgage Loan, assuming that the
Mortgagor pays each Monthly Payment on the applicable Due Date and that no
Principal Prepayments are received with respect to such Mortgage Loan,
discounted monthly at the applicable Mortgage Rate.
RECORD DATE: With respect to any Distribution Date, the close of business
on the last Business Day of the month preceding the month in which the
applicable Distribution Date occurs.
REGULAR CERTIFICATES: All of the Certificates other than the Class R
Certificates.
RELIEF ACT: The Soldiers' and Sailors' Civil Relief Act of 1940, as
amended.
RELIEF ACT SHORTFALLS: With respect to any Distribution Date and any
Mortgage Loan, the amount of any interest that is not collectible from the
Mortgagor during the related Due Period pursuant to the Relief Act or similar
legislation or regulations as in effect from time to time.
REMIC: A "real estate mortgage investment conduit", within the meaning of
Section 860D of the Code.
REMIC ELECTION: An election, for federal income tax purposes, to treat
certain assets as a REMIC.
REMIC I: The corpus of the trust created by this Agreement consisting of
(a) the Mortgage Loans listed in the Mortgage Loan Schedule, including all
interest and principal received or receivable by the Depositor on or with
respect to the Mortgage Loans after the Cut-off Date, but not including payments
of principal and interest due and payable on the Mortgage Loans on or before the
Cut-off Date, together with the Mortgage Files relating to the Mortgage Loans,
(b) REO Property, (c) the Custodial Account and the Certificate Account and all
amounts deposited therein pursuant to the applicable provisions of this
19
Agreement, (d) any insurance policies with respect to the Mortgage Loans and (e)
all proceeds of the conversion, voluntary or involuntary, of any of the
foregoing into cash or other liquid property.
REMIC I REALIZED LOSSES: For any Distribution Date, Realized Losses on the
Mortgage Loans for the prior calendar month shall be allocated as follows: The
interest portion of Realized Losses, if any, shall be allocated among the
classes of REMIC I Certificates pro-rata according to the interest accruing
thereon at the REMIC I Remittance Rate thereon to the extent of such interest
accruing thereon at the REMIC I Remittance Rate in reduction thereof. Any
interest Realized Losses in excess of the amount allocated pursuant to the
preceding sentence shall be treated as principal Realized Losses not
attributable to any specific Mortgage Loan and allocated pursuant to the
succeeding sentences. The principal Realized Losses shall be allocated (i) to
the Class [____], Class [____], Class [____] and Class [____] Certificates
pro-rata according to their respective principal balances, provided that such
allocation to each of the Class [____], Class [____] and Class [____]
Certificates shall not exceed their respective Class [____] Principal Reduction
Amounts for such Distribution Date, and (ii) any principal Realized Losses not
allocated to either the Class [____], Class [____], or Class [____] Certificates
pursuant to the proviso of clause (i) shall be allocated to the Class [____]
Certificates.
REMIC I REGULAR INTEREST: Any of the four separate non-certificated
beneficial ownership interests in REMIC I issued hereunder and designated as a
"regular interest" in REMIC I. Each REMIC I Regular Interest shall accrue
interest at the related REMIC I Remittance Rate in effect from time to time, and
shall be entitled to distributions of principal, subject to the terms and
conditions hereof, in an aggregate amount equal to its initial Uncertificated
Balance as set forth in the preliminary statement hereto. The designations for
the respective REMIC I Regular Interests are set forth in the Preliminary
Statement hereto.
REMIC I REMITTANCE RATE: With respect to REMIC I Regular Interests [____]
and [____], the weighted average of Net Mortgage Rates on the then outstanding
Mortgage Loans and REO Properties, plus 0.70% per annum. With respect to REMIC I
Regular Interest [____], zero. With respect to REMIC I Regular Interest [____],
twice the weighted average of Net Mortgage Rates on the then outstanding
Mortgage Loans and REO Properties, plus 1.40% per annum.
REMIC II: The segregated pool of assets consisting of all of the REMIC I
Regular Interests, with respect to which a separate REMIC election is to be
made.
REMIC II REGULAR INTEREST: Any of the Class A Certificates and Class S
Certificates. The Class A Certificates shall accrue interest at the related
Certificate Rate in effect from time to time, minus the Insurer Premium Rate,
and shall be entitled to distributions of principal, subject to the terms and
conditions hereof, in an aggregate amount equal to their initial Certificate
Principal Balance as set forth in the preliminary statement hereto. The Class S
Certificates shall accrue interest at the related Certificate Rate, and shall
not be entitled to any distributions of principal.
REMIC PROVISIONS: Provisions of the federal income tax law relating to
REMICs, which appear at Section 860A through 860G of the Subchapter M of
20
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: Any Mortgaged Property acquired by or in the name of the
Trustee for the benefit of the Certificateholders [and the Insurer] in
foreclosure or by deed-in-lieu of foreclosure.
REPLACEMENT MORTGAGE LOAN: A Mortgage Loan substituted by the Servicer or
Seller for a Deleted Mortgage Loan which must, on the date of such substitution,
as confirmed in an Officers' Certificate delivered to the Trustee, (i) have an
outstanding Principal Balance, after deduction of the principal portion of the
Monthly 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 Principal Balance, after such deduction), not in excess of the
Principal Balance of the Deleted Mortgage Loan (the amount of any shortage to be
deposited by the Servicer or Seller, as the case may be, in the Certificate
Account in the month of substitution as set forth in Section 2.03 of this
Agreement); (ii) at the time of substitution have a Net Mortgage Rate equal to
or exceeding the Net Mortgage Rate of the Deleted Mortgage Loan; (iii) have a
Loan-to-Value Ratio no higher than the Loan-to-Value Ratio of the Deleted
Mortgage Loan; (iv) have a remaining term to maturity no greater than (and not
more than one year less than) the Deleted Mortgage Loan; (v) be of the same or
better credit quality classification as that of the Deleted Mortgage Loan; and
(vi) comply with each representation and warranty relating to the Mortgage Loans
set forth in Section 2.04 hereof.
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
in respect of such Mortgage Loan, including each standard hazard and, if
applicable, flood insurance policy.
RESPONSIBLE OFFICER: When used with respect to the Trustee, the Chairman or
Vice Chairman of the Board of Directors or Trustees, the Chairman or Vice
Chairman of the Executive or Standing Committee of the Board of Directors or
Trustees, the President, the Chairman of the Committee on Trust Matters, any
Vice President, any Assistant Vice President, the Secretary, any Assistant
Secretary, the Treasurer, any Assistant Treasurer, the Cashier, any Assistant
Cashier, any Trust Officer or Assistant Trust Officer, the Controller and any
Assistant Controller or any other officer of the Trustee customarily performing
functions similar to those performed by any of the above designated officers and
also, with respect to a particular matter, any other officer to whom such matter
is referred because of such officer's knowledge of and familiarity with the
particular subject.
ROLLING THREE-MONTH DELINQUENCY PERCENTAGE: As of any Distribution Date,
the fraction, expressed as a percentage, equal to the average of the Delinquency
Percentage for each of the three (or one and two in the case of the first and
second Distribution Dates) immediately preceding Due Periods.
RULE 144A: Rule 144A under the 1933 Act, as in effect from time to time.
SCHEDULED FINAL DISTRIBUTION DATE: [__________, 20__].
SELLER: [_______________________] or its successor in interest.
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SERVICER: [_______________________] or any successor under the terms of
this Agreement.
SERVICER ADVANCE DATE: The date on which the Servicer is required to make a
Monthly Advance pursuant to Section 5.04 hereof.
SERVICER MORTGAGE FILE: All documents pertaining to a Mortgage Loan not
required to be included in the Trustee Mortgage File and held by the Servicer or
any Sub-Servicer.
SERVICING FEE: For each calendar month, as to each Mortgage Loan, (i) an
amount equal to one month's interest (or in the event of any payment of interest
which accompanies a Principal Prepayment in full made by the Mortgagor, interest
for the number of days covered by such payment of interest) at the applicable
Servicing Fee Rate on the Principal Balance of such Mortgage Loan immediately
preceding the Distribution Date occurring in such month and (ii) increased by
any late payment charges, assumption fees and other usual and customary fees
collected from the Mortgagor and by any net income on Eligible Investments held
in the Custodial Account.
SERVICING FEE RATE: [____]% per annum.
SERVICING OFFICER: Any officer of the Servicer involved in, or responsible
for, the administration and servicing of the Mortgage Loans whose name appears
on a list of servicing officers furnished to the Trustee [and the Insurer] on
the Delivery Date by the Servicer pursuant to this Agreement, as such list may
from time to time be amended.
STANDARD & POOR'S: Standard & Poor's Ratings Services, a division of the
▇▇▇▇▇▇-▇▇▇▇ Companies, or its successor in interest.
SUB-SERVICER: Any other entity with respect to any Mortgage Loan under any
Sub-Servicing Agreement applicable to such Mortgage Loan and any successors and
assigns under such Sub-Servicing Agreement.
SUB-SERVICING AGREEMENT: Any servicing agreement between the Servicer and a
Sub-Servicer pursuant to which the Servicer delegates any of its servicing
responsibilities with respect to any of the Mortgage Loans.
TRANSFEREE AFFIDAVIT AND AGREEMENT: As defined in Section 6.02(g)(i)(B).
TRUST FUND: Collectively, the assets of REMIC I and REMIC II.
TRUSTEE: U.S. Bank National Association, a national banking association,
not in its individual capacity, but solely in its capacity as trustee for the
benefit of the Certificateholders [and the Insurer] under this Agreement, and
any successor thereto, as provided herein.
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
22
multiplied by the Principal Balance of the Mortgage Loans immediately prior to
such Distribution Date.
TRUSTEE FEE RATE: [____]% per annum.
TRUSTEE MORTGAGE FILE: The mortgage documents listed in Section 2.01 hereof
pertaining to a particular Mortgage Loan and any additional documents required
to be added to the Trustee Mortgage File pursuant to this Agreement.
UNCERTIFICATED BALANCE: The amount of any REMIC I Regular Interest
outstanding as of any date of determination. As of the Closing Date, the
Uncertificated Balance of each REMIC I Regular Interest shall equal the amount
set forth in the Preliminary Statement hereto as its initial Uncertificated
Balance. On each Distribution Date, the Uncertificated Balance of each REMIC I
Regular Interest shall be reduced by all distributions of principal made on such
REMIC I Regular Interest on such Distribution Date pursuant to Section 4.02 and,
if, and to the extent, necessary and appropriate, shall be further reduced on
such Distribution Date by Realized Losses as provided in Section 4.05. The
Uncertificated Balance of each REMIC I Regular Interest shall never be less than
zero.
UNCERTIFICATED INTEREST: With respect to any REMIC I Regular Interest for
any Distribution Date, one month's interest at the REMIC I Remittance Rate
applicable to such REMIC I Regular Interest for such Distribution Date, accrued
on the Uncertificated Balance thereof immediately prior to such Distribution
Date. Uncertificated Interest in respect of any REMIC I Regular Interest [____],
[____], [____] or [____] shall accrue on the basis of a 360-day year consisting
of twelve 30-day months. Uncertificated Interest with respect to each
Distribution Date, as to any REMIC I Regular Interest, shall be reduced by any
interest shortfalls with respect to the Mortgage Loans to time. In addition,
Uncertificated Interest with respect to each Distribution Date, as to any REMIC
I Regular Interest shall be reduced by the interest portion of Realized Losses
allocable to such REMIC I Regular Interest, if any, pursuant to Section 4.05(b)
hereof.
U.S. PERSON: A citizen or resident of the United States, a corporation,
partnership or other entity created or organized in, or under the laws of, the
United States or any political subdivision thereof, or an estate or trust whose
income from sources without the United States is includable in gross income for
United States federal income tax purposes regardless of its connection with the
conduct of a trade or business within the United States.
VOTING RIGHTS: The portion of the aggregate voting rights of all the
Certificates evidenced by a Certificate. [___]% of all Voting Rights will be
allocated to the Class A Certificates in proportion to their Certificate
Principal Balances, [__]% of all Voting Rights will be allocated among the Class
S Certificates in proportion to their Percentage Interests and [__]% and [__]%
of all Voting Rights will be allocated to the Class R-I and Class R-II
Certificates, respectively.
23
ARTICLE II
CONVEYANCE OF TRUST FUND;
REPRESENTATIONS AND WARRANTIES
SECTION 2.01 CONVEYANCE OF TRUST FUND.
The Depositor hereby sells, transfers, assigns, delivers, sets over
and otherwise conveys to the Trustee for the benefit of the Certificateholders
[[and the Insurer]], without recourse, the Depositor's right, title and interest
in and to (a) the Mortgage Loans listed in the Mortgage Loan Schedule, including
all interest and principal received or receivable by the Depositor on or with
respect to the Mortgage Loans after the Cut-off Date, but not including payments
of principal and interest due and payable on the Mortgage Loans on or before the
Cut-off Date, which Mortgage Loans the Depositor shall cause to be delivered to
the Trustee on or prior to the Delivery Date, together with the Trustee Mortgage
Files relating to the Mortgage Loans, (b) REO Property, (c) the Custodial
Account, the Certificate Account and all amounts deposited therein pursuant to
the applicable provisions of this Agreement, (d) any insurance policy with
respect to the Mortgage Loans and (e) all proceeds of the conversion, voluntary
or involuntary, of any of the foregoing into cash or other liquid property.
The Seller hereby sells, transfers, assigns, delivers, sets over and
otherwise conveys to the Trustee for the benefit of the Insurer and
Certificateholders, without recourse, any and all right, title and interest of
the Seller, if any, in and to (a) the Mortgage Loans listed in the Mortgage Loan
Schedule, including all interest and principal received or receivable by the
Seller on or with respect to the Mortgage Loans after the Cut-off Date, but not
including payments of principal and interest due and payable on the Mortgage
Loans on or before the Cut-off Date, (b) REO Property, (c) the Custodial
Account, the Certificate Account and all amounts deposited therein pursuant to
the applicable provisions of this Agreement, (d) any insurance policy with
respect to the Mortgage Loans and (e) all proceeds of the conversion, voluntary
or involuntary, of any of the foregoing into cash or other liquid property.
In connection with any such transfer and assignment, the Depositor
shall deliver to, and deposit with, the Trustee the following documents or
instruments with respect to each Mortgage Loan so assigned:
(i) the Mortgage Note, endorsed without recourse to the order of the Trustee,
with all intervening endorsements showing a complete chain of endorsement
from the originator to the last endorser, and if the Mortgage Note or
Mortgage or any other material document or instrument relating to the
Mortgage Loan has been signed on behalf of the Mortgagor by another person,
the original power of attorney or other instrument that authorized and
empowered such person to sign, or a copy of the original power of attorney
or other instrument certified by the relevant public recording office in
those instances in which the public recording office retains the original;
(ii) the original Mortgage, and any intervening assignment thereof, in each case
as recorded, with evidence of recording indicated thereon;
24
(iii) an original assignment or assignments of Mortgage showing an unbroken
chain of title from the originator to the preceding assignee to the
Trustee with evidence of recording indicated thereon; and
(iv) the original copy of each assumption, modification, written assurance or
substitution agreement, if any, with respect to such Mortgage Loan, as
identified on the Mortgage Loan Schedule.
Notwithstanding the foregoing, in the event that in connection with
any Mortgage Loan the Depositor cannot deliver an original recorded counterpart
of any of the documents required to be delivered pursuant to clauses (ii) or
(iii) above with evidence of recording thereon concurrently with the execution
and delivery hereof, the Depositor shall deliver, or cause the Servicer to
deliver, to the Trustee a duplicate original or true copy of such document
certified by the Depositor or the Servicer or the applicable public recording
office to be a true and complete duplicate original or copy of the original
thereof submitted for recording, or a copy of the Mortgage certified by a title
insurance or escrow company or companies reasonably acceptable to the Insurer,
evidencing that such Mortgage or assignment of Mortgage has been delivered to
the appropriate public recording office for recordation. In the event that the
Depositor cannot deliver a duplicate original or true copy certified as stated
above of such document required to be delivered pursuant to clauses (ii) or
(iii) above, within 45 days of the Delivery Date, the Servicer shall purchase
the related Mortgage Loan at the Purchase Price therefor. The Depositor shall
promptly deliver, or cause the Servicer to deliver, to the Trustee (A) such
original document with evidence of recording indicated thereon or a photocopy of
such document certified by the appropriate county recorder's office to be a true
and complete copy of the original thereof, upon receipt thereof from the public
recording official or from the Servicer, and (B) upon discovery of any defect or
omission in the deliveries of any of items (ii) through (iv) above with respect
to any Mortgage Loan, a correct and complete document or instrument meeting the
requirements of such item or a certified copy thereof, certified by the relevant
recording office, but in no event shall any such delivery be made later than 90
days following the Delivery Date (unless such document has not been returned
from the relevant recording office at such time, in which case the Servicer
shall make such delivery within 270 days of the Delivery Date). From time to
time the Servicer may forward or cause to be forwarded to the Trustee for the
benefit of the Certificateholders [[and the Insurer]] additional original
documents evidencing an assumption or modification of a Mortgage Loan.
The Trustee shall promptly complete the endorsement of the Mortgage
Note referred to in (i) above and the assignment of Mortgage referred to in
(iii) above to the Trustee for the benefit of the Holders of the
[________________] Mortgage-Backed Pass-Through Certificates, Series 200_-____
and [________________________]. The Trustee on behalf of the Servicer shall
promptly record in the appropriate public office for real property records each
original assignment referred to in (iii) above with respect to each Mortgaged
Property, and the Trustee shall release any such assignment to the Depositor or
the Servicer, as applicable, for such purpose. The Depositor or the Servicer
shall promptly deliver to the Trustee each original assignment with evidence of
recording indicated thereon or a photocopy thereof certified by the appropriate
county recorder's office to be a true and complete copy of the original thereof,
upon receipt thereof from the public recording official. If any assignment is
returned unrecorded to the Depositor or the Servicer because of any defect
therein, the Depositor or the Servicer shall
25
cure or correct such defect and cause such assignment to be recorded in
accordance with this paragraph and if such defect is not cured the Servicer
shall purchase the Mortgage Loan at the Purchase Price therefor.
SECTION 2.02 ACCEPTANCE BY TRUSTEE.
The Trustee will hold the documents referred to in Section 2.01 above
and the other documents constituting a part of the Trustee Mortgage Files
delivered to it in trust for the use and benefit of all present and future
Certificateholders [[and the Insurer]]. Upon execution and delivery of this
Agreement and within 45 days after the execution and delivery of this Agreement,
the Trustee shall ascertain whether all documents required to be delivered to it
pursuant to Section 2.01 hereof are in its possession, and shall deliver to the
Depositor, the Insurer and the Servicer a certification (upon execution and
delivery of this Agreement, the "Initial Certification" and within 45 days
thereof, the "Final Certification", respectively) in the forms set forth as
EXHIBITS E and F hereto to the effect that, as to each Mortgage Loan listed in
the Mortgage Loan Schedule: (a) all documents required to be delivered to the
Trustee pursuant to this Agreement are in its possession, (b) such documents
have been reviewed by it and have not been mutilated, damaged, defaced, torn or
otherwise physically altered, and such documents relate to such Mortgage Loan,
(c) based on its examination and only as to the foregoing documents, the
information set forth in items (i) through (vi) of the definition of Mortgage
Loan Schedule respecting such Mortgage Loan accurately reflects the information
contained in the documents in the Trustee Mortgage File and (d) each Mortgage
Note has been endorsed and each assignment of Mortgage has been delivered as
provided in Section 2.01 hereof. The Trustee shall deliver to the Depositor, the
Insurer and the Servicer a copy of such Final Certification. If, in the course
of such review, the Trustee finds any document or documents constituting a part
of a Mortgage File which do not meet the requirements of (a)-(d) above, the
Trustee shall promptly notify the Servicer, the Insurer and the Depositor in
writing, and request that the Servicer correct or cure such defect. The Trustee
shall promptly notify the Depositor in writing if any original assignment
referred to in clause (iii) above has not been received by it prior to
[__________, 200_]. In the event the Servicer or Depositor shall fail to cure
any document deficiency or defect reflected in the Final Certification or as
otherwise required under Section 2.01, it shall not be the obligation of the
Trustee hereunder to cure the same, and the Servicer shall purchase the Mortgage
Loan at the Purchase Price therefor.
The Depositor agrees that at any time and from time to time upon
written request of the Trustee or the Insurer, the Depositor shall promptly and
duly execute and deliver any and all such further documents and assurances, and
take such further actions as the Trustee reasonably may request in order to
obtain or more fully vest the benefits of the assignment intended hereunder (as
set forth hereinabove in Section 2.01 and hereinbelow in Section 2.03) and of
the rights and powers herein granted.
The Trustee shall retain possession and custody of each Trustee
Mortgage File in accordance with and subject to the terms and conditions set
forth herein.
26
SECTION 2.03 REPRESENTATIONS, WARRANTIES AND
COVENANTS OF THE SERVICER AND SELLER.
[_______________], as Seller and Servicer, hereby represents and
warrants to, and covenants with, the Depositor, the Insurer and the Trustee
that, as of the date hereof:
(i) [___________] is a [____________], validly existing and in good standing
under the laws of [the United States of America] [__________] and is duly
authorized and qualified to transact any and all business contemplated by
this Agreement in any state in which a Mortgaged Property is located or is
otherwise not required under applicable law to effect such qualification
and, in any event, is in compliance with the doing business laws of any
such State, to the extent necessary to ensure the enforceability of each
Mortgage Loan and the servicing of the Mortgage Loans in accordance with
the terms of this Agreement;
(ii) [___________] has the full corporate power and authority to service each
Mortgage Loan, and to execute, deliver and perform, and to enter into and
consummate the transactions contemplated by this Agreement and has duly
authorized by all necessary corporate action on the part of [___________]
the execution, delivery and performance of this Agreement; and this
Agreement, assuming the due authorization, execution and delivery thereof
by the Depositor and the Trustee, constitutes a legal, valid and binding
obligation of [___________], enforceable against [___________] in
accordance with its terms, except that (A) the enforceability thereof may
be limited to bankruptcy, insolvency, moratorium, receivership and other
similar laws relating to creditors' rights generally and (B) the remedy of
specific performance and injunctive and other forms of equitable relief
may be subject to the equitable defenses and to the discretion of the
court before which any proceeding therefor may be brought;
(iii) the execution and delivery of this Agreement by [___________], the
servicing of the Mortgage Loans by [___________] hereunder, the
consummation of any other of the transactions herein contemplated, and the
fulfillment of or compliance with the terms hereof are in the ordinary
course of business of [___________] and will not (A) result in a material
breach of any term or provision of the charter or by-laws of [__________]
or (B) materially conflict with, result in a material breach, violation or
acceleration of, or result in a material default under, the terms of any
other material agreement or instrument to which [__________] is a party or
by which it may be bound, or any statute, order or regulation applicable
to [__________] of any court, regulatory body, administrative agency or
governmental body having jurisdiction over [__________]; and [__________]
is not a party to, bound by, or in breach or violation of any material
indenture or other material agreement or instrument, or subject to or in
violation of any statute, order or regulation of any court, regulatory
body, administrative agency or governmental body having jurisdiction over
it, which materially and adversely affects, or, to [__________]'s
knowledge would in the future materially and adversely affect, (1) the
ability of [__________] to perform its obligations under this Agreement or
(2) the business, operations, financial condition, properties or assets of
the Servicer taken as a whole;
27
(iv) [__________] is, and will remain, subject to supervision and examination
by any state or federal authority as may be applicable and will remain in
good standing and qualified to do business where so required by applicable
law and is, and will remain an approved servicer of conventional mortgage
loans for FNMA or FHLMC;
(v) no litigation is pending or, to the best of [__________]'s knowledge,
threatened, against [__________] that would materially and adversely
affect the execution, delivery or enforceability of this Agreement or the
ability of [__________] to service the Mortgage Loans or to perform any of
its other obligations hereunder in accordance with the terms hereof;
(vi) [__________] will at all times comply in the performance of its
obligations under this Agreement with all reasonable rules and
requirements of the insurer under each Required Insurance Policy;
(vii) no written information, certificate of an officer, statement furnished in
writing or written report delivered to the Insurer, the Depositor, any
affiliate of the Depositor or the Trustee and prepared by [__________]
pursuant to this Agreement will contain any untrue statement of a material
fact or omit to state a material fact necessary to make the information,
certificate, statement or report not misleading;
(viii)except for permits and similar authorizations required under the
securities or "blue sky" laws no consent, approval, authorization or order
of any court or governmental agency or body is required for the execution,
delivery and performance by [__________] of, or compliance by [__________]
with, this Agreement or the consummation of the transactions contemplated
hereby, or if any such consent, approval, authorization or order is
required, [__________] has obtained the same; and
(ix) [__________] will service the Mortgage Loans in accordance with the
standards set forth in this Agreement.
SECTION 2.04 REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE SERVICER AND THE
SELLER WITH RESPECT TO THE MORTGAGE LOANS.
The Seller and the Servicer hereby represents and warrants to, and
covenants with, the Depositor, the Insurer and the Trustee for the benefit of
the Certificateholders that, as to each Mortgage Loan, as of the Cut-off Date or
such other date specifically set forth herein, and with respect to
representation (i) listed below, as of the Delivery Date:
(i) The information set forth in the Mortgage Loan Schedule is complete, true
and correct.
(ii) All payments required to be made up to, but excluding, the Cut-off Date
for such Mortgage Loan under the terms of the Mortgage Note have been
made, except with respect to [___]% of the Mortgage Loans which are more
than 30 days but 60 days or less delinquent; [__________] has not advanced
funds, or induced, solicited or knowingly received any advance of funds
from a party other than the owner of the
28
Mortgaged Property subject to the Mortgage, directly or indirectly, for the
payment of any amount required by the Mortgage Loan.
(iii) To the best of the Servicer's knowledge, there are no delinquent taxes,
ground rents, water charges, sewer rents, assessments, insurance premiums,
leasehold payments, including assessments payable in future installments
or other outstanding charges affecting the related Mortgaged Property.
(iv) 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, if necessary to protect the interests of the
Trustee, and which have been delivered to the Trustee or the Trustee's
designee, the substance of which waiver, alteration or modification has
been approved by the primary mortgage guaranty insurer, if any, and by the
title insurer, to the extent required by the related policy and is
reflected on the Mortgage Loan Schedule. No instrument of waiver,
alteration or modification has been executed, and no Mortgagor has been
released, in whole or in part, except in connection with an assumption
agreement approved by the primary mortgage insurer, if any, and title
insurer, to the extent required by the policy, and which assumption
agreement is part of the Mortgage File and the terms of which are
reflected in the Mortgage Loan Schedule.
(v) The Mortgage Note and the Mortgage are not subject to any right of
rescission, set-off, counterclaim or defense, including the defense of
usury, nor will the operation of any of the terms of the Mortgage Note and
Mortgage, or the exercise of any right thereunder, render the 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.
(vi) All buildings upon the Mortgaged Property are insured by a generally
acceptable insurer against loss by fire, hazards of extended coverage and
such other hazards as are customary in the area where the Mortgaged
Property is located. All such insurance policies contain a standard
mortgagee clause naming the Servicer, its successors and assigns as
mortgagee and all premiums thereon have been paid. If upon origination of
the Mortgage Loan, the Mortgaged Property was in an area identified in the
Federal Register by the Federal Emergency Management Agency as having
special flood hazards (and such flood insurance has been made available) a
flood insurance policy meeting the requirements of the current guidelines
of the Federal Insurance Administration is in effect which policy conforms
to the requirements of FNMA and FHLMC. The Mortgage obligates the
Mortgagor thereunder to maintain all such insurance at Mortgagor's cost
and expense, and on the Mortgagor's failure to do so, authorizes the
holder of the Mortgage to maintain such insurance at Mortgagor's cost and
expense and to seek reimbursement therefor from the Mortgagor.
(vii) Any and all requirements of any federal, state or local law including,
without limitation, environmental, usury, truth in lending, real estate
settlement procedures, consumer credit protection, equal credit
opportunity or disclosure laws
29
applicable to the Mortgage Loan and the related Mortgaged Property have
been complied with.
(viii)The Mortgage has not been satisfied, canceled or subordinated, or
rescinded, in whole or in part, and the Mortgaged Property has not been
released from the lien of the Mortgage, in whole or in part, nor has any
instrument been executed that would effect any such release, cancellation,
subordination or rescission.
(ix) The Mortgage is a valid, existing and enforceable first lien on the
Mortgaged Property, including all improvements on the Mortgaged Property
subject only to (A) the lien of current real property taxes and
assessments not yet due and payable, (B) covenants, conditions and
restrictions, rights of way, easements and other matters of the public
record as of the date of recording being acceptable to mortgage lending
institutions generally and specifically referred to in lender's title
insurance policy delivered to the originator of the Mortgage Loan and
which do not adversely affect the Appraised Value of the Mortgaged
Property, and (C) other matters to which like properties are commonly
subject which do not materially interfere with the benefits of the
security intended to be provided by 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, existing and enforceable first lien and first priority security
interest on the property described therein and the Seller has full right
to sell and assign the same to the Depositor. The Mortgaged Property was
not, as of the date of origination of the Mortgaged Loan, subject to a
mortgage, deed of trust, deed to secure debt or other security instrument
creating a lien subordinate to the lien of the Mortgage.
(x) The Mortgage Note and the related Mortgage are genuine and each is the
legal, valid and binding obligation of the maker thereof, enforceable in
accordance with its terms, except as the enforceability thereof may be
limited by bankruptcy, insolvency, or reorganization.
(xi) All parties to the Mortgage Note and the Mortgage had legal capacity to
enter into the Mortgage Loan and to execute and deliver the Mortgage Note
and the Mortgage, and the Mortgage Note and the Mortgage have been duly
and properly executed by such parties.
(xii) The proceeds of the Mortgage Loan have been fully disbursed and there is
no requirement for future advances thereunder and any and all requirements
as to completion of any on-site or off-site improvement and as to
disbursements of any escrow funds therefor have been complied with. All
costs, fees and expenses incurred in making or closing the Mortgage Loan
and the recording of the Mortgage were paid, and the Mortgagor is not
entitled to any refund of any amounts paid or due under the Mortgage Note
or Mortgage.
(xiii)The Mortgage Note and the Mortgage are not assigned or pledged, and
immediately prior to the sale of the Mortgage Loan to the Depositor the
Seller was the sole owner of record and holder thereof and with full right
to transfer and sell the
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Mortgage Loan to the Depositor free and clear of any encumbrance, equity,
lien, pledge, charge, claim or security interest and with full right and
authority subject to no interest or participation of, or agreement with,
any other party, to sell and assign each Mortgage Loan pursuant to the
Mortgage Loan Purchase Agreement.
(xiv) All parties which have had any interest in the Mortgage, whether as
mortgagee, assignee, pledgee or otherwise, are (or, during the period in
which they held and disposed of such interest, were) (A) in compliance
with any and all applicable licensing requirements of the laws of the
state wherein the Mortgaged Property is located, and (B) organized under
the laws of such state, or (C) qualified to do business in such state, or
(D) federal savings and loan associations or national banks having
principal offices in such state, or (E) not doing business in such state.
(xv) The Mortgage Loan is covered by an ALTA lender's title insurance policy
acceptable to FNMA or FHLMC, issued by a title insurer acceptable to FNMA
and FHLMC and qualified to do business in the jurisdiction where the
Mortgaged Property is located, insuring (subject to the exceptions
contained in (ix)(A) and (B) above) the Seller, its successors and assigns
as to the first priority lien of the Mortgage in the original principal
amount of the Mortgage Loan. The original title policy and all riders
thereto are in the possession of the Servicer. Additionally, such lender's
title insurance policy affirmatively insures ingress and egress, and
against encroachments by or upon the Mortgaged Property or any interest
therein. The Seller is the sole insured of such lender's title insurance
policy, and such lender's title insurance policy is in full force and
effect and will be in full force and effect upon the consummation of the
transactions contemplated by this Agreement. No claims have been made
under such lender's title insurance policy, and no prior holder of the
related Mortgage, including the Seller, has done, by act or omission,
anything which would impair the coverage of such lender's title insurance
policy.
(xvi) There is no default, breach, violation or event of acceleration existing
under the Mortgage or the Mortgage Note and no event which, with the
passage of time or with notice and the expiration of any grace or cure
period, would constitute a default, breach, violation or event of
acceleration, and the Seller has not waived any default, breach, violation
or event of acceleration.
(xvii)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 lien) affecting the related Mortgaged Property
which are or may be liens prior to, or equal or coordinate with, the lien
of the related Mortgage.
(xviii) All improvements which were considered in determining the Appraised
Value of the related Mortgaged Property lay wholly within the boundaries
and building restriction lines of the Mortgaged Property, and no
improvements on adjoining properties encroach upon the Mortgaged Property.
(xix) The Mortgage Loan was originated by the Seller or a subsidiary of the
Seller which is a FNMA-approved, FHLMC-approved or HUD-approved mortgage
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banker, or savings and loan association, a savings bank, a commercial bank
or similar banking institution which is supervised and examined by a
federal or state authority. Principal payments on the Mortgage Loan
commenced no more than sixty days after funds were disbursed in connection
with the Mortgage Loan. The Mortgage Note is payable on the [first] day of
each month in monthly installments of principal and interest, with interest
in arrears[, and requires Monthly Payments sufficient to amortize the
original principal balance of the Mortgage Loan over a term of 30 years,
except for fifteen Mortgage Loans with an amortization term and maturity of
40 years. No Mortgage Loans have provisions which will require negative
amortization. No Mortgage Loan requires a balloon payment at the end of its
term].
(xx) The origination practices used by the Seller and the collection practices
used by the Servicer with respect to each Mortgage Note and Mortgage have
been in all respects legal, proper, prudent and customary in the mortgage
origination and servicing business. With respect to escrow deposits and
escrow payments, if any, all such payments are in the possession of, or
under the control of, the Servicer and there exist no deficiencies in
connection therewith for which customary arrangements for repayment
thereof have not been made. No escrow deposits or escrow payments or other
charges or payments due the Seller have been capitalized under any
Mortgage or the related Mortgage Note.
(xxi) The Mortgaged Property is free of damage and waste and there is no
proceeding pending for the total or partial condemnation thereof.
(xxii)The Mortgage contains customary and enforceable provisions such as to
render the rights and remedies of the holder thereof adequate for the
realization against the Mortgaged Property of the benefits of the security
provided thereby, including, (A) in the case of a Mortgage designated as a
deed of trust, by trustee's sale, and (B) otherwise by judicial
foreclosure. There is no other exemption available to the Mortgagor which
would interfere with the right to sell the Mortgaged Property at a
trustee's sale or the right to foreclose the Mortgage. The Mortgagor has
not notified the Servicer and the Servicer has no knowledge of any relief
requested or allowed to the Mortgagor under the Relief Act.
(xxiii) The Mortgage Loan was underwritten generally in accordance with the
Seller's underwriting standards in effect at the time the Mortgage Loan
was originated.
(xxiv)The Mortgage Note is not and has not been secured by any collateral
except the lien of the corresponding Mortgage and the security interest of
any applicable security agreement or chattel mortgage referred to in (ix)
above.
(xxv) The Mortgage File contains an appraisal of the related Mortgaged Property
signed prior to the approval of the Mortgage Loan application by a
qualified appraiser, duly appointed by the originator of the Mortgage
Loan, who had no interest, direct or indirect in the Mortgaged Property or
in any loan made on the security thereof, and whose compensation is not
affected by the approval or disapproval of the Mortgage Loan.
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(xxvi)In the event the Mortgage constitutes a deed of trust, a trustee, duly
qualified under applicable law to serve as such, has been properly
designated and currently so serves and is named in the Mortgage, and no
fees or expenses are or will become payable by the Depositor to the
trustee under the deed of trust, except, in connection with a trustee's
sale after default by the Mortgagor.
(xxvii) No Mortgage Loan contains provisions pursuant to which Monthly Payments
are (A) paid or partially paid with funds deposited in any separate account
established by the Seller, the Mortgagor, or anyone on behalf of the
Mortgagor, (B) paid by any source other than the Mortgagor or (C) contains
any other similar provisions which may constitute a "buydown" provision.
The Mortgage Loan is not a graduated payment mortgage loan and the Mortgage
Loan does not have a shared appreciation or other contingent interest
feature.
(xxviii) The Seller does not expect, as to any particular Mortgage Loan included
in the Trust Fund, that such Mortgage Loan will become a defaulted
Mortgage Loan and that the related Mortgaged Property will be foreclosed
upon (or acquired by deed-in-lieu of foreclosure).
(xxix)No Mortgage Loan was made in connection with (A) the construction or
rehabilitation of a Mortgaged Property or (B) facilitating the trade-in or
exchange of a Mortgaged Property.
(xxx) The Seller has no knowledge of any circumstances or condition with respect
to the Mortgage, the Mortgaged Property, the Mortgagor or the Mortgagor's
credit standing that can reasonably be expected to cause the Mortgage Loan
to be an unacceptable investment, cause the Mortgage Loan to become
delinquent, or adversely affect the value of the Mortgage Loan.
(xxxi)Each such Mortgage Loan with a Loan-to-Value Ratio at origination in
excess of 80% is and will be subject to a Primary Mortgage Insurance
Policy, issued by a FNMA or FHLMC approved insurer, which insures that
portion of the Mortgage Loan over 75% of the Loan-to-Value Ratio. All
provisions of such Primary Mortgage Insurance Policy have been and are
being complied with, such policy is in full force and effect, and all
premiums due thereunder have been paid. Any Mortgage subject to any such
Primary Mortgage Insurance Policy obligates the Mortgagor thereunder to
maintain such insurance and to pay all premiums and charges in connection
therewith. The Mortgage Interest Rate for the Mortgage Loan is net of any
such insurance premium.
(xxxii) To the best of the Servicer's knowledge, the Mortgaged Property is
lawfully occupied under applicable law. All inspections, licenses and
certificates required to be made or issued with respect to all occupied
portions of the Mortgaged Property and, with respect to the use and
occupancy of the same, including but not limited to certificates of
occupancy, have been made or obtained from the appropriate authorities.
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(xxxiii) No action has been taken or failed to be taken, no event has occurred
and no state of facts exists or has existed on or prior to the Cut-off
Date (whether or not known to the Seller on or prior to such date) which
has resulted or will result in an exclusion from, denial of, or defense
coverage under any private mortgage insurance (including, without
limitation, any exclusions, denials or defenses which would limit or
reduce the availability of the timely payment of the full amount of the
loss otherwise due thereunder to the insured) whether arising out of
actions, representations, errors, omissions, negligence, or fraud of the
Seller, the related Mortgagor or any party involved in the application for
such coverage, including the appraisal, plans and specifications and other
exhibits or documents submitted therewith to the insurer under such
insurance policy, or for any other reason under such coverage, but not
including the failure of such insurer to pay by reason of such insurer's
breach of such insurance policy or such insurer's financial inability to
pay.
(xxxiv) The Assignment of Mortgage, is in recordable form and is acceptable for
recording under the laws of the jurisdiction in which the Mortgaged
Property is located.
(xxxv)Any future advances made to the Mortgagor prior to the Cut-off Date have
been consolidated with the outstanding principal amount secured by the
Mortgage, and the secured principal amount, as consolidated, bears a
single interest rate and single repayment term. The lien of the Mortgage
securing the consolidated principal amount is expressly insured as having
consolidated principal amount is expressly insured as having first lien
priority by a title insurance policy, an endorsement to the policy
insuring the mortgagee's consolidated interest or by other title evidence
acceptable to FNMA and FHLMC. The consolidated principal amount does not
exceed the original principal amount of the Mortgage Loan.
(xxxvi) If the Mortgaged Property is a condominium unit or a planned unit
development (other than a de minimis planned unit development) such
condominium or planned unit development project meets FNMA or FHLMC
eligibility requirements.
(xxxvii) With respect to each Convertible Mortgage Loan, (x) the related
Mortgagor has the option to convert the interest rate borne by such
Mortgage Loan from an adjustable interest rate to a fixed interest rate
determined pursuant to the terms of the related Mortgage Note and (y) the
fixed interest rate to be borne by each such Convertible Mortgage Loan
upon the conversion of the interest rate on such Mortgage Loan is intended
to approximate a market rate of interest for newly originated mortgages at
the time of the conversion.
(xxxviii) Each Mortgage is a "qualified mortgage" for purposes of the REMIC
Provisions.
Upon the discovery by the Depositor, the Servicer, the Insurer or the
Trustee (or upon notice thereof in writing from a Certificateholder) of a breach
or breaches of any of the representations and warranties made in Section 2.04 in
respect of any Mortgage Loan, or any breach of a representation or warranty of
the Servicer set forth in Section 2.03, which breach or breaches, individually
or in the aggregate, materially and adversely affect the interests of the
34
Certificateholders or the Insurer, the party discovering such breach shall give
prompt written notice to the other parties. The Trustee shall promptly notify
the Seller and Servicer of such breach and request that the Seller or Servicer,
as the case may be, cure such breach within 60 days from the date of such
notice, and if the Seller or Servicer does not cure such breach in all material
respects, the Seller or Servicer, as the case may be, shall either (i)
substitute a Replacement Mortgage Loan or Loans for the related Mortgage Loan,
which substitution must be made as specified in this Section or (ii) purchase
such Mortgage Loan held for the benefit of the Certificateholders [[and the
Insurer]] from the Trustee at the Purchase Price therefor.
The Seller or Servicer shall not have any right to substitute a
Replacement Mortgage Loan or Loans for the affected Mortgage Loan more than
three months after the Delivery Date (or more than two years after the Delivery
Date if the related Mortgage Loan is a "defective obligation" within the meaning
of Section 860G(a)(4)(B)(ii) of the Code), and any substitution must be
accompanied by an Officers' Certificate delivered to the Trustee [[and the
Insurer]], certifying that such Replacement Mortgage Loan conforms to the
requirements of this Agreement, and by an Opinion of Counsel to the effect that
such substitution will not cause either REMIC I or REMIC II to fail to qualify
as a REMIC and will not result in a prohibited transaction tax, which Opinion of
Counsel shall be paid for by the Seller or Servicer, as the case may be.
Notwithstanding the foregoing, if any such breach would cause a Mortgage Loan to
be other than a "qualified mortgage loan" as described in Section 860G(a)(3) of
the Code, any substitution shall occur within 90 days of the discovery of the
breach.
As to any Replacement Mortgage Loan or Loans, the Seller or Servicer
shall deliver to the Trustee for such Replacement Mortgage Loan or Loans, the
Mortgage Note, the Mortgage, the related assignment of the Mortgage, and such
other documents and agreements as are required by Section 2.01, with the
Mortgage Note endorsed to the Trustee for the benefit of the Insurer and the
Holders of the [__________] Mortgage-Backed Pass-Through Certificates, Series
200_-____. No substitution will be made in any calendar month after the
Determination Date for such month. Monthly payments due with respect to
Replacement Mortgage Loans in the month of substitution shall not be part of the
Trust Fund and will be remitted by the Servicer or Seller to the Depositor on
the next succeeding Distribution Date. For the month of substitution,
distributions to Certificateholders will include the Monthly Payment due on such
Deleted Mortgage Loan for such month and thereafter the Seller or Servicer, as
the case may be, shall be entitled to retain all amounts received in respect of
such Deleted Mortgage Loan.
Upon such substitution, the Servicer shall amend or cause to be
amended the Mortgage Loan Schedule to reflect the removal of such Deleted
Mortgage Loan and the substitution of the Replacement Mortgage Loan or Loans.
Upon such substitution, the Replacement 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, as of the date of substitution, with respect to the Replacement
Mortgage Loan or Loans, the representations and warranties pertaining to the
Mortgage Loans contained in Section 2.04 hereof. Upon receipt of the Trustee
Mortgage File pertaining to any Replacement Mortgage Loans, the Trustee shall
release the Trustee Mortgage File held for the benefit of the Certificateholders
[[and the Insurer]] relating to such Deleted Mortgage Loan to the Seller or
Servicer as applicable and shall execute and deliver such instruments of
transfer or assignment, in each case without recourse, as shall be necessary to
vest title (to the extent that such title was transferred to the Trustee) in the
Seller or Servicer as
35
applicable, or its designee to any Deleted Mortgage Loan substituted for
pursuant to this Section 2.04.
In any month in which the Seller or Servicer substitutes one or more
Replacement Mortgage Loans for one or more Deleted Mortgage Loans, the Servicer
will determine the amount (if any) by which the aggregate Principal Balance of
all such Replacement Mortgage Loans as of the date of substitution is less than
the aggregate Principal Balance of all such Deleted Mortgage Loans (in each case
after application of scheduled principal portion of the monthly payments
received in the month of substitution). The amount of such shortage shall be
deposited into the Custodial Account by the Seller or Servicer in the month of
substitution pursuant to Section 3.07, without any reimbursement thereof. The
Servicer shall give notice in writing to the Trustee of such event, which notice
shall be accompanied by an Officers' Certificate as to the calculation of such
shortage.
In the event that the Seller or Servicer shall have repurchased a
Mortgage Loan, upon receipt by the Trustee of written notification of the
deposit of the Purchase Price, the Trustee shall release the related Trustee
Mortgage File held for the benefit of the Certificateholders [[and the Insurer]]
to the Seller or Servicer as applicable and the Trustee shall execute and
deliver the related instruments of transfer or assignment, in each case without
recourse, as shall be necessary to transfer title (to the extent that such title
was transferred to the Trustee) from the Trustee for the benefit of the
Certificateholders [[and the Insurer]] and vest title in the Seller or Servicer,
or the designee thereof, as the case may be, to any Mortgage Loan purchased
pursuant to this Section 2.04. It is understood and agreed that the obligation
under this Agreement of any Person to repurchase or substitute any Mortgage Loan
as to which such breach has occurred and is continuing shall constitute the sole
and exclusive remedy respecting such breach available to Certificateholders or
the Trustee on their behalf (except for the Insurer's rights under the Insurance
Agreement).
SECTION 2.05 ISSUANCE OF CERTIFICATES.
The Trustee acknowledges the assignment to it of the Mortgage Loans
together with the assignment to it of all other assets included in the Trust
Fund, receipt of which is hereby acknowledged. Concurrently with such assignment
and delivery and in exchange therefor, the Trustee, pursuant to the written
request of the Depositor executed by an officer of the Depositor, has executed
the Class A, Class S and Class R Certificates and caused them to be
authenticated and delivered to or upon the order of the Depositor in authorized
denominations which evidence ownership of the Trust Fund. The rights of the
Holders of such Certificates to receive distributions from the Trust Fund and
all ownership interests of the Holders of the Class A, Class S and Class R
Certificates in such distributions shall be as set forth in this Agreement.
SECTION 2.06 REMIC PROVISIONS.
(a) [The Depositor hereby elects and authorizes the Trustee to treat each of
REMIC I and REMIC II as a REMIC under the Code and, if necessary, under
applicable state law. Each such election will be made on Form 1066 or other
appropriate federal tax or information return (including Form 8811) or any
appropriate state return (x) for the taxable year ending on the last day of the
calendar year in which the Certificates are issued and (y) for the
36
taxable year ending on the last day of the calendar year in which Certificates
are first sold by [__________] to a third party. The Delivery Date is hereby
designated as the "startup day" of each of REMIC I and REMIC II within the
meaning of Section 860G(a)(9) of the Code. The "regular interests" (within the
meaning of Section 860G of the Code) in REMIC I shall consist of the REMIC I
Regular Interests and the "residual interest" in REMIC I shall consist of the
Class R-I Certificates. The "regular interests" (within the meaning of Section
860G of the Code) in REMIC II shall consist of the Class A and Class S
Certificates and the "residual interest" in REMIC II shall consist of the Class
R-II Certificates. The Depositor and the Trustee shall not permit the creation
of any "interests" (within the meaning of Section 860G of the Code) in REMIC I
or REMIC II other than the REMIC I Regular Interests and Class R-I Certificates
and the Class A Certificates, Class S Certificates and Class R-II Certificates,
respectively.
(b) [__________] on behalf of the Holders of the Class R-I Certificates and
Class R-II Certificates, shall act as agent for the Class R-I Certificateholder
and Class R-II Certificateholder as the "tax matters person" (within the meaning
of the REMIC Provisions) for REMIC I and REMIC II, respectively, in the manner
provided under Treasury regulations section 1.860F-4(d) and temporary Treasury
regulations section 301.6231(a)(7)-1T. 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 REMIC I and REMIC II pursuant to the specific duties outlined herein.
(c) A Holder of the Class R-I or Class R-II Certificates, by the purchase
of such Certificates, shall be deemed to have agreed to timely pay, upon demand
by the Trustee, the amount of any minimum California state franchise taxes due
with respect to REMIC I or REMIC II, respectively, under Sections 23151(a) and
23153(a) of the California Revenue and Taxation Code. Notwithstanding the
foregoing, the Trustee shall be authorized to retain the amount of such tax from
amounts otherwise distributable to such Holder in the event such Holder does not
promptly pay such amount upon demand by the Trustee. In the event that any other
federal, state or local tax is imposed, including without limitation taxes
imposed on a "prohibited transaction" of a REMIC as defined in Section 860F of
the Code, such tax shall be charged against amounts otherwise available for
distribution to the applicable Holder of a Class R Certificate and then against
amounts otherwise available for distribution to the Holders of Regular
Certificates in accordance with the provisions set forth in Sections 4.02 and
4.03, respectively. The Trustee shall promptly deposit in the Certificate
Account any amount of "prohibited transaction" tax that results from a breach of
the Trustee's duties under this Agreement. The Servicer shall promptly deposit
in the Certificate Account any amount of "prohibited transaction" tax that
results from a breach of the Servicer's duties under this Agreement.
(d) The Trustee shall act as attorney-in-fact and as agent on behalf of the
tax matters person of REMIC I and REMIC II and in such capacity the Trustee
shall: (i) prepare, sign and file, or cause to be prepared, signed and filed,
federal and state tax returns using a calendar year as the taxable year for
REMIC I and REMIC II when and as required by the REMIC Provisions and other
applicable federal income tax laws as the direct representative of REMIC I and
REMIC II in compliance with the Code and shall provide copies of such returns as
required by the Code; (ii) make an election, on behalf of REMIC I and REMIC II,
to be treated as a REMIC on the federal tax return of such REMIC for its first
taxable year, in accordance with the REMIC Provisions; and (iii) prepare and
forward, or cause to be prepared and
37
forwarded, to the Certificateholders and to any governmental taxing authority
all information reports as and when required to be provided to them in
accordance with the REMIC Provisions. The expenses of preparing and filing such
returns shall be borne by the Trustee. The Depositor and Servicer shall provide
on a prompt and timely basis to the Trustee or its designee such information
with respect to REMIC I and REMIC II as is in their possession and reasonably
required or requested by the Trustee to enable it to perform its obligations
under this subsection.
In its capacity as attorney-in-fact and as agent on behalf of the tax
matters person, [__________] shall also: (A) act on behalf of REMIC I and REMIC
II in relation to any tax matter or controversy involving the Trust Fund, (B)
represent the Trust Fund in any administrative or judicial proceeding relating
to an examination or audit by any governmental taxing authority with respect
thereto and (C) cause to be paid solely from the sources provided herein the
amount of any taxes imposed on REMIC I or REMIC II 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).
(e) The Trustee shall provide (i) to any transferor of a Class R
Certificate such information as is necessary for the application of any tax
relating to the transfer of a Class R Certificate to any Person who is not a
permitted transferee, (ii) to the Trustee and the Trustee shall forward to the
Certificateholders such information or reports as are required by the Code or
the REMIC Provisions including reports relating to interest, original issue
discount and market discount or premium and (iii) to the Internal Revenue
Service the name, title, address and telephone number of the person who will
serve as the representative of each of REMIC I and REMIC II.
(f) The Trustee, the Depositor and the Holder of the Class R Certificates
shall take any action or cause the Trust Fund to take any action necessary to
create or maintain the status of each of REMIC I and REMIC II as a REMIC under
the REMIC Provisions and shall assist each other as necessary to create or
maintain such status. Neither the Trustee nor the Holder of the Class R
Certificates shall take any action, cause the Trust Fund to take any action or
fail to take (or fail to cause the Trust Fund to take) any action that, under
the REMIC Provisions, if taken or not taken, as the case may be, could (i)
endanger the status of either REMIC I or REMIC II as a REMIC or (ii) result in
the imposition of a tax upon either REMIC I or REMIC II (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 in Section 860G(d)
of the Code) (either such event, an "Adverse REMIC Event") unless the Trustee
has 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.
The Trustee shall not take or fail to take any action (whether or not
authorized hereunder) as to which the Servicer or Depositor has advised it in
writing that it has received an Opinion of Counsel to the effect that an Adverse
REMIC Event could occur with respect to such action. In addition, prior to
taking any action with respect to REMIC I or REMIC II or their assets, or
causing REMIC I and REMIC II to take any action, which is not expressly
permitted under the terms of this Agreement, the Trustee will consult with the
Servicer and Depositor or
38
their designees, in writing, with respect to whether such action could cause an
Adverse REMIC Event to occur with respect to REMIC I or REMIC II, and the
Trustee shall not take any such action or cause REMIC I or REMIC II to take any
such action as to which the Servicer or Depositor has advised it in writing that
an Adverse REMIC Event could occur.
In addition, prior to taking any action with respect to either REMIC
I or REMIC II or the assets therein, or causing either REMIC I or REMIC II to
take any action, which is not expressly permitted under the terms of this
Agreement, the Holder of the Class R Certificates will consult with the Trustee
or its designee, in writing, with respect to whether such action could cause an
Adverse REMIC Event to occur with respect to either REMIC I or REMIC II, and no
such Person shall take any action or cause the Trust Fund to take any such
action as to which the Trustee has advised it in writing that an Adverse REMIC
Event could occur. The Trustee may consult with counsel to make such written
advice, and the cost of same shall be borne by the party seeking to take action
not permitted by this Agreement.
At all times as may be required by the Code, the Servicer will to the
extent within its control and the scope of its duties more specifically set
forth herein, maintain substantially all of the assets of REMIC I and REMIC II
as "qualified mortgages" as defined in Section 860G(a)(3) of the Code and
"permitted investments" as defined in Section 860G(a)(5) of the Code.
(g) In the event that any tax is imposed on "prohibited transactions" of
REMIC I or REMIC II, as defined in Section 860F(a)(2) of the Code, on "net
income from foreclosure property" of REMIC I or REMIC II, as defined in Section
860G(c) of the Code, on any contributions to REMIC I or REMIC II after the
Startup Day therefor pursuant to Section 860G(d) of the Code, or any other tax
is imposed by the Code or any applicable provisions of state or local tax laws,
such tax shall be charged (i) to the Servicer, if such tax arises out of or
results from a breach by the Servicer of any of its obligations under this
Agreement or if the Servicer has in its sole discretion determined to indemnify
the Trust Fund against such tax, (ii) to the Trustee, if such tax arises out of
or results from a breach by the Trustee of any of its obligations under this
Article II, or (iii) otherwise against amounts on deposit in the Custodial
Account as provided by Section 3.09 and on the Distribution Date(s) following
such reimbursement the aggregate of such taxes shall be allocated in reduction
of the Interest Distribution Amount on each Class entitled thereto in the same
manner as if such taxes constituted a Prepayment Interest Shortfall.
(h) The Trustee and the Servicer shall, for federal income tax purposes,
maintain books and records with respect to REMIC I and REMIC II on a calendar
year and on an accrual basis or as otherwise may be required by the REMIC
Provisions.
(i) Following the Startup Day, neither the Servicer nor the Trustee shall
accept any contributions of assets to REMIC I or REMIC II unless (subject to
2.06(f)) the Servicer and the Trustee shall have received an Opinion of Counsel
(at the expense of the party seeking to make such contribution) to the effect
that the inclusion of such assets in REMIC I or REMIC II will not cause either
REMIC I or REMIC II to fail to qualify as a REMIC at any time that any
Certificates are outstanding, or subject REMIC I or REMIC II to any tax under
the REMIC Provisions or other applicable provisions of federal, state and local
law or ordinances.
39
(j) Neither the Servicer nor the Trustee shall (subject to Section 2.06(f))
enter into any arrangement by which REMIC I or REMIC II will receive a fee or
other compensation for services nor permit either such REMIC to receive any
income from assets other than "qualified mortgages" as defined in Section
860G(a)(3) of the Code or "permitted investments" as defined in Section
860G(a)(5) of the Code.
(k) Within 30 days after the Closing Date, the Trustee shall prepare and
file with the Internal Revenue Service Form 8811, "Information Return for Real
Estate Mortgage Investment Conduits (REMIC) and Issuers of Collateralized Debt
Obligations" for REMIC I and REMIC II.
(l) Neither the Trustee nor the Servicer shall sell, dispose of or
substitute for any of the Mortgage Loans (except in connection with (i) the
default, imminent default or foreclosure of a Mortgage Loan, including but not
limited to, the acquisition or sale of a Mortgaged Property acquired by deed in
lieu of foreclosure, (ii) the bankruptcy of REMIC I or REMIC II, (iii) the
termination of REMIC I or REMIC II pursuant to Article X of this Agreement or
(iv) a purchase of Mortgage Loans pursuant to Article II or III of this
Agreement) nor acquire any assets for REMIC I or REMIC II, nor sell or dispose
of any investments in the Custodial Account or the Certificate Account for gain
nor accept any contributions to REMIC I or REMIC II after the Closing Date (a)
unless it has received an Opinion of Counsel that such sale, disposition,
substitution or acquisition will not affect adversely the status of REMIC I and
REMIC II as REMICs or (b) unless the Servicer has determined in its sole
discretion to indemnify the Trust Fund against such tax.
(m) 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 days after the Delivery Date, all information or data that the
Trustee 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 and the Trustee shall be entitled to rely upon any and all
such information and data in the performance of its duties set forth herein.
Thereafter, the Servicer shall provide, promptly upon 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
and the Trustee shall be entitled to rely upon any and all such information and
data in the performance of its duties set forth herein. The Depositor shall
indemnify the Trustee and hold its harmless for any loss, liability, damage,
claim or expense of the Trustee arising 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. The Servicer shall indemnify the Trustee and hold it harmless
for any loss, liability, damage, claim or expense of the Trustee arising from
any failure of the Servicer to provide, or to cause to be provided, accurate
information or data to the Trustee on a timely basis. The indemnification
provisions hereunder shall survive the termination of this Agreement and shall
extend to any co-trustee appointed pursuant to this Agreement.]
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ARTICLE III
ADMINISTRATION AND SERVICING
OF MORTGAGE LOANS
SECTION 3.01 SERVICING STANDARD.
For and on behalf of the Trustee, the Insurer and the
Certificateholders, the Servicer shall service and administer the Mortgage Loans
in accordance with prudent mortgage loan servicing standards and procedures
generally accepted in the mortgage banking industry and generally in a manner
consistent with FNMA guidelines except as otherwise expressly provided in this
Agreement. In connection with such servicing and administration, the Servicer
shall have full power and authority, acting alone and/or through any
Sub-Servicer 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 (a) to execute and deliver, on behalf of
the Certificateholders and the Trustee, customary consents or waivers and other
instruments and documents (including, without limitation, estoppel
certificates), (b) 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), (c) to collect any Insurance Proceeds and
Liquidation Proceeds, (d) to consent to any subordinate financings to be secured
by any Mortgaged Property to the extent that such consent is required pursuant
to the terms of the related Mortgage, (e) to consent to the application of any
proceeds of insurance policies or condemnation awards to the restoration of the
applicable Mortgaged Property or otherwise, and (f) subject to the provisions of
Section 3.07 and 3.13, to effectuate foreclosure or other conversion of the
ownership of the Mortgage Property securing any Mortgage Loan; PROVIDED,
HOWEVER, that the Servicer shall take no action that is materially inconsistent
with or materially prejudices the interest of the Trustee, the Insurer or the
Certificateholders in any Mortgage Loan or the rights and interest of the
Depositor, the Insurer, the Trustee and the Certificateholders under the terms
of this Agreement unless such action is specifically called for by the terms
hereof.
Without limiting the generality of the foregoing, but subject to the
terms hereof, the Servicer, in its own name or in the name of the Depositor and
the Trustee, is hereby authorized and empowered by the Depositor and the
Trustee, when the Servicer believes it appropriate in its best judgment, to
execute and deliver, on behalf of the Trustee, the Depositor, the
Certificateholders or any of them, any and all instruments of modification,
satisfaction, cancellation or assignment, or of partial or full release or
discharge and all other comparable instruments, with respect to the Mortgage
Loans, and with respect to the Mortgaged Properties held for the benefit of the
Certificateholders. The Servicer shall promptly notify the Trustee of any such
execution and delivery. The Depositor and the Trustee for the benefit of the
Certificateholders shall furnish the Servicer with any powers of attorney and
other documents necessary or appropriate to enable the Servicer to service and
administer the Mortgage Loans.
In accordance with the standards of the preceding paragraph, the
Servicer shall advance or cause to be advanced funds as necessary for the
purpose of effecting the timely payment of taxes and assessments on each
Mortgaged Property or any related unpaid insurance premiums that are not timely
paid by the Mortgagors prior to any such time as a Mortgage Loan
41
is in foreclosure; PROVIDED, HOWEVER, that the Servicer shall be required to
advance only to the extent that such advances, in the good faith judgment of the
Servicer, will be recoverable by the Servicer out of Insurance Proceeds,
Liquidation Proceeds (net of Liquidation Expenses) or otherwise; and PROVIDED
FURTHER, that such payments shall be advanced when the tax, premium or other
cost for which such payment is intended is due. Any such advances shall be
reimbursable in the first instance from related collections from the related
Mortgagors pursuant to Section 3.07 hereof, and further as Liquidation Expenses
as provided in Section 3.13 hereof and may be withdrawn from the Custodial
Account pursuant to Section 3.09 hereof. All costs incurred by the Servicer or
by the related Sub-Servicer 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 Principal Balance under the related Mortgage
Loans, notwithstanding that the terms of such Mortgage Loans so permit.
Notwithstanding anything in this Agreement to the contrary, the
Servicer shall not (unless the Mortgagor is in default with respect to the
Mortgage Loan or such default is, in the judgment of the Servicer, imminent)
permit any modification with respect to any Mortgage Loan that would change the
Net Mortgage Rate or, reduce or increase the principal balance (except for
reductions resulting from actual payments of principal), except for conversions
to a fixed rate in accordance with the terms of the Mortgage Loan.
SECTION 3.02 ENFORCEMENT OF THE OBLIGATIONS OF SUB-SERVICERS.
(a) For purposes of this Agreement, the Servicer shall be deemed to have
received the payments on the Mortgage Loans referred to in Sections 3.07 and
3.08 hereof when the related Sub-Servicer has received such payments and shall
remain obligated to deposit such payments in accordance with Sections 3.07 and
3.08 hereof, regardless of whether such payments are remitted by the
Sub-Servicer to the Servicer. The Servicer and the related Sub-Servicer may
enter into amendments to any applicable Sub-Servicing Agreement; PROVIDED,
HOWEVER, that any such amendments shall be consistent with and shall not violate
the provisions of this Agreement; and PROVIDED FURTHER, that the substance of
any such material amendment or material change shall be transmitted promptly to
the Depositor, the Trustee, the Insurer and the Rating Agencies.
(b) As part of its servicing activities hereunder, the Servicer, for the
benefit of the Depositor, the Trustee, the Insurer and the Certificateholders,
shall supervise, administer, monitor and oversee the servicing of the Mortgage
Loans that are not serviced by it directly, and shall enforce the obligations of
each Sub-Servicer under the related Sub-Servicing Agreement. Such enforcement
shall include, without limitation, the legal prosecution of claims, termination
of Sub-Servicing Agreements, as appropriate, and the pursuit of other
appropriate remedies, and shall be in such form and carried out to such an
extent and at such time as the Servicer, in its good faith business judgment,
would require were it the owner of the related Mortgage Loans. The Servicer
shall pay the costs of such enforcement at its own expense, but shall be
reimbursed therefor only (i) from a general recovery resulting from such
enforcement only to the extent, if any, that such recovery exceeds all amounts
due in respect of the related Mortgage Loans or (ii) from a specific recovery of
costs, expenses or attorneys fees against the party against whom such
enforcement is directed. The Servicer shall not waive any event of default by a
Sub-Servicer
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under a Sub-Servicing Agreement which is a failure to remit any payment required
to be made by such Sub-Servicer that would result in an Event of Default under
this Agreement.
(c) During the term of this Agreement, the Servicer shall consult fully
with each of the Sub-Servicers as may be necessary from time to time to perform
and carry out the Servicer's obligations hereunder and receive, review and
evaluate all reports, information and other data that are provided to the
Servicer by each Sub-Servicer and otherwise exercise reasonable efforts to cause
each Sub-Servicer to perform and observe the covenants, obligations and
conditions to be performed or observed by it under its Sub-Servicing Agreement.
If any Sub-Servicer materially breaches or fails to perform or observe any
material obligations or conditions of its Sub-Servicing Agreement, the Servicer
shall promptly deliver to the Depositor, the Insurer and to the Trustee an
Officers' Certificate certifying that such Sub-Servicer is in default and
describing the events and circumstances giving rise to the default and what
action (if any) has been, or is to be, taken by the Sub-Servicer to cure the
default and setting forth the action to be taken by the Servicer.
SECTION 3.03 TERMINATION OF THE RIGHTS OF SUB-SERVICERS.
If the Servicer terminates the rights of a Sub-Servicer under any
Sub-Servicing Agreement, the Servicer shall service the Mortgage Loans directly
pursuant to and in accordance with the terms of this Agreement, or at the
Servicer's election, enter into a substitute servicing agreement with another
mortgage loan servicing company reasonably acceptable to the Trustee and the
Servicer under which such mortgage loan servicing company shall assume, satisfy,
perform and carry out all liabilities, duties, responsibilities and obligations
that are to be, or otherwise were to have been, satisfied, performed and carried
out by the terminated Sub-Servicer, regardless of whether such liabilities,
duties, responsibilities or obligations shall have accrued before or after the
termination of the rights of such Sub-Servicer; PROVIDED, HOWEVER, that any such
substitute servicer and any such substitute servicing shall satisfy the
requirements of Sections 3.01 and 3.02. If the Servicer does not elect to enter
into a substitute servicing agreement with a successor servicer, the Servicer
shall nevertheless service the Mortgage Loans directly pursuant to and in
accordance with the terms of this Agreement, until a substitute Sub-Servicer has
been appointed and designated and a substitute servicing agreement has been
entered into by the Servicer and such substitute Sub-Servicer. The Servicer
shall give notice to the Trustee, the Insurer and the Rating Agencies of any
termination of a Sub-Servicer and any appointment or designation of a substitute
Sub-Servicer.
SECTION 3.04 LIABILITY OF THE SERVICER.
Notwithstanding the provisions of any Sub-Servicing Agreement, any of
the provisions of this Agreement relating to agreements or arrangements between
the Servicer or a Sub-Servicer or reference to actions taken through a
Sub-Servicer or otherwise, the Servicer shall remain obligated and liable to the
Depositor, the Trustee, the Insurer and the Certificateholders for the servicing
and administering of the Mortgage Loans included in the Trust Fund in accordance
with (and subject to the limitations contained within) the provisions of this
Agreement without diminution of such obligation or liability by virtue of such
Sub-Servicing Agreements or agreements or arrangements or by virtue of
indemnification from the Sub-Servicer and to the same extent and under the same
terms and conditions as if the Servicer alone
43
were servicing and administering the Mortgage Loans. The Servicer shall be
entitled to enter into any agreement with the Depositor or a Sub-Servicer for
indemnification of the Servicer and nothing contained in this Agreement shall be
deemed to limit or modify such indemnification.
SECTION 3.05 RIGHTS OF THE DEPOSITOR AND THE TRUSTEE IN RESPECT OF THE SERVICER.
The Servicer shall afford the Depositor, the Insurer and the Trustee,
without charge but only upon reasonable notice and during normal business hours,
access to all records and documentation in the Servicer's possession regarding
the Mortgage Loans and to all accounts, insurance policies and other matters in
the Servicer's possession relating to this Agreement and access to officers of
the Servicer responsible for its obligations hereunder. The Depositor may, but
is not obligated to, enforce the obligations of the Servicer hereunder. The
Depositor shall not have any responsibility or liability for any action or
failure to act by the Servicer and is not obligated to supervise the performance
of the Servicer hereunder or otherwise.
SECTION 3.06 TRUSTEE TO ACT AS SERVICER.
In the event that the Servicer shall for any reason no longer be the
Servicer hereunder (including by reason of an Event of Default), the Trustee
shall thereupon assume all of the rights and obligations of the Servicer
hereunder arising thereafter (except that the Trustee shall not be liable for
losses of the Servicer pursuant to Section 3.07 hereof, obligated to make
Monthly Advances if prohibited by applicable law, nor to effectuate repurchases
or substitutions of Mortgage Loans hereunder as substitute Servicer, including
pursuant to Section 2.04 hereof and except that the Trustee makes no
representations and warranties hereunder, including pursuant to Section 2.04
hereof). If the Servicer shall for any reason no longer be the Servicer
(including by reason of any Event of Default), the Trustee (or any other
successor servicer) shall succeed to any rights and obligations of the Servicer
under any Sub-Servicing Agreement and shall be deemed to have assumed the
Servicer's interest therein; PROVIDED, HOWEVER, that the Servicer shall not
thereby be relieved of any liability or obligations under this Agreement, any
Sub-Servicing or substitute servicing agreement arising prior to the date of
such succession.
The Servicer shall, upon request of the Trustee, but at the expense
of the Servicer, deliver to the assuming party all documents and records
relating to the Mortgage Loans then being serviced thereunder and an accounting
of amounts collected held by it and otherwise use its best efforts to effect the
orderly and efficient transfer of servicing to the assuming party.
SECTION 3.07 COLLECTION OF MORTGAGE LOAN PAYMENTS.
The Servicer shall make reasonable efforts to collect all payments
called for under the terms and provisions of the Mortgage Loans and shall, to
the extent such procedures shall be consistent with this Agreement, follow such
collection procedures as it follows with respect to mortgage loans comparable to
the Mortgage Loans held in its own portfolio and serviced by the Servicer.
Consistent with the foregoing, the Servicer may in its discretion (a) waive any
late payment charge or any prepayment charge or penalty interest in connection
with the prepayment of a Mortgage Loan and (b) only upon determining that the
coverage of such Mortgage Loan by
44
any related Primary Mortgage Insurance Policy will not be affected, extend the
due dates for payments due on a Mortgage Note for a period not greater than 270
days, but in no event beyond the maturity date of any Mortgage Loan. In the
event of any such arrangement described in clause (b) of the preceding sentence,
the Servicer shall continue to make timely Monthly Advances on the related
Mortgage Loan, pursuant to and in accordance with Section 5.01 of this Agreement
(but subject to any limitations contained therein), during the scheduled period
in accordance with the amortization schedule of such Mortgage Loan without
modification thereof by reason of such arrangements.
The Servicer shall establish and maintain, in its name on behalf of
the Certificateholders [and the Insurer], the Custodial Account. The Servicer
shall deposit into the Custodial Account within two Business Days of receipt by
the Servicer, or receipt from the Sub-Servicers except as otherwise specifically
provided herein, the following payments and collections received or made by it
subsequent to the Cut-off Date (other than in respect of principal of and
interest and any other payments on the Mortgage Loans due on or before the
Cut-off Date):
(i) all payments on account of principal, including Principal Prepayments, on
the Mortgage Loans;
(ii) all payments on account of interest on the Mortgage Loans;
(iii) all Insurance Proceeds and Liquidation Proceeds, other than proceeds to be
applied to the restoration or repair of the Mortgaged Property or released
to the Mortgagor in accordance with the Servicer's normal servicing
procedures, net of Liquidation Expenses, unpaid servicing compensation and
unreimbursed Monthly Advances;
(iv) all Monthly Advances made by the Servicer pursuant to Section 5.01 hereof;
(v) any amount of any losses required to be deposited by the Servicer pursuant
to the second succeeding paragraph of this Section 3.07 in connection with
any losses on Eligible Investments;
(vi) any amounts required to be deposited by the Servicer pursuant to Section
3.11 hereof;
(vii) all proceeds of any purchase by the Seller or the Servicer, as the case
may be, of any Mortgage Loans or property acquired in respect of the
Mortgage Loans pursuant to Sections 2.01, 2.02, 2.04, 3.12, 3.21 or 10.01
hereof and all amounts required to be deposited in connection with the
substitution of Replacement Mortgage Loans pursuant to Sections 2.01, 2.02
or 2.04 hereof; and
(viii)any other amounts required to be deposited in the Custodial Account
pursuant to this Agreement including, without limitation, the amounts
required to be deposited therein pursuant to Section 3.13 hereof.
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The foregoing requirements for remittance by the Servicer shall be
exclusive, it being understood and agreed that, without limiting the generality
of the foregoing, payments in the nature of prepayment penalties, fees or
premiums, late payment charges, assumption fees and any excess interest charges
payable by the Mortgagor by virtue of any default or other non-compliance by the
Mortgagor with the terms of the Mortgage or any other instrument or document
executed in connection therewith or otherwise, if collected, need not be
remitted or deposited into the Custodial Account by the Servicer. In the event
that the Servicer shall remit or deposit any amount not required to be remitted
or deposited and not otherwise subject to withdrawal pursuant to Section 3.09
hereof, it may at any time withdraw such amount from the Custodial Account on
the following Distribution Date, any provision herein to the contrary
notwithstanding. Such direction may be accomplished by delivering an Officers'
Certificate to the Trustee which describes the amounts deposited in error in the
Custodial Account. All funds deposited in the Custodial Account shall be held by
the Servicer in trust for the Certificateholders [and the Insurer] until
disbursed in accordance with this Agreement or withdrawn in accordance with
Section 3.09. In no event shall the Trustee incur liability for withdrawals from
the Custodial Account at the direction of the Servicer.
The Servicer shall invest the funds in the Custodial Account in
Eligible Investments, which shall mature not later than the second Business Day
preceding the Distribution Date following the date of such investment (except
that if such Eligible Investment is an obligation of the institution that
maintains the Custodial Account, then such Eligible Investment shall mature not
later than such Distribution Date). All such Eligible Investments shall be made
in the name of the Trustee for the benefit of the Certificateholders [[and the
Insurer]] (in its capacity as such) or its nominee. All income and gain net of
any losses realized from any such investment shall be for the benefit of the
Servicer and shall be subject to withdrawal at its direction from time to time.
The amount of any losses net of any gains not paid to the Servicer incurred in
respect of any such investments shall be remitted to the Trustee or deposited in
the Custodial Account out of the Servicer's own funds promptly following the
date that same are realized.
The Servicer shall promptly give notice to the Trustee, the Rating
Agencies, the Insurer and the Depositor of the location of the Custodial Account
and of any change thereof.
SECTION 3.08 COLLECTION OF TAXES, ASSESSMENTS AND
SIMILAR ITEMS; ESCROW ACCOUNTS.
In addition to the Custodial Account, the Servicer shall establish
and maintain one or more custodial accounts (each, an "Escrow Account") and
deposit and retain therein all collections from the Mortgagors (or advances by
the Servicer) for the payment of taxes, assessments and hazard insurance
premiums or comparable items for the account of the Mortgagors. Escrow Accounts
shall be Eligible Accounts.
Withdrawals of amounts so collected from the Escrow Accounts may be
made only to effect timely payment of taxes, assessments, hazard insurance
premiums or Primary Mortgage Insurance Policy premiums, condominium or PUD
association dues, or comparable items, to reimburse the Servicer pursuant to
Sections 3.10 hereof (with respect to the Primary Mortgage Insurance Policy) and
3.08 hereof (with respect to taxes and assessments) and 3.11
46
hereof (with respect to hazard insurance), to refund to any Mortgagors any sums
as may be determined to be overages, to pay interest, if required, to Mortgagors
on balances in the Escrow Account or to clear and terminate the Escrow Account
at the termination of this Agreement in accordance with Section 10.01 hereof. As
part of its servicing duties, the Servicer shall, and the Sub-Servicers shall,
pursuant to any Sub-Servicing Agreement, be required to, pay to the Mortgagors
interest on funds in the Escrow Account, to the extent required by law.
The Servicer shall, with respect to each Mortgage Loan, to the extent
any related Sub-Servicer does not do so, advance the payments referred to in the
preceding paragraph that are not timely paid by the Mortgagors; PROVIDED,
HOWEVER, that the Servicer shall be required to so advance only to the extent
that such advances, in the good faith judgment of the Servicer, will be
recoverable by the Servicer out of Insurance Proceeds, Liquidation Proceeds or
otherwise of the related Mortgage Loan; and PROVIDED FURTHER, that such payments
shall be advanced when the tax, premium or other cost for which such payment is
intended is due.
SECTION 3.09 PERMITTED WITHDRAWALS FROM THE CUSTODIAL ACCOUNT.
The Servicer may (and, with respect to clauses (e) and (g) below,
shall), from time to time, direct the Trustee to make, and the Trustee shall
make, to the extent required or authorized hereunder, withdrawals from the
Custodial Account for the following purposes:
(a) to pay to the Servicer as additional servicing compensation,
earnings on or investment income with respect to funds in the Custodial
Account credited to the Custodial Account;
(b) to reimburse the Servicer for advances made pursuant to
Sections 3.01, 3.10, 3.13, 5.01 and 5.02 hereof, such right of
reimbursement pursuant to this subclause (b) being limited to amounts
received in respect of the particular Mortgage Loan (including, for this
purpose, Insurance Proceeds, Liquidation Proceeds, amounts representing
proceeds of other insurance policies, if any, covering the related
Mortgaged Property, rental and other income from REO Property and proceeds
of any purchase or repurchase of the related Mortgage Loan);
(c) to reimburse the Servicer for any Nonrecoverable Advances;
(d) to reimburse the Servicer from Liquidation Proceeds for
Liquidation Expenses and, to the extent that Liquidation Proceeds after
such reimbursement are in excess of the Principal Balance of the related
Mortgage Loan together with accrued and unpaid interest thereon at a rate
equal to the sum of the Net Mortgage Rate and the Trustee Fee Rate, to pay
out of such excess the amount of any unpaid servicing compensation with
respect to the related Mortgage Loan to the Servicer, which may include
any unpaid servicing compensation to the Sub-Servicer (for disbursement in
accordance with Section 3.16 hereof);
(e) to pay to the Seller or the Servicer, as the case may be,
with respect to each Mortgage Loan or property acquired in respect thereof
that has been purchased pursuant to Sections 2.01, 2.02, 2.04 or 3.12
hereof all amounts received thereon and not
47
taken into account in determining the Purchase Price of such repurchased
Mortgage Loan;
(f) to reimburse the Servicer or the Depositor for expenses
incurred by and reimbursable to the Servicer or the Depositor pursuant
to Section 7.03 hereof;
(g) to withdraw any amount deposited in the Custodial Account
pursuant to Section 3.07 and not required to be deposited therein; and
(h) to clear and terminate the Custodial Account upon termination
of this Agreement pursuant to Section 10.01 hereof.
The Servicer shall keep and maintain separate accounting, on a
Mortgage Loan by Mortgage Loan basis, for the purpose of justifying any
withdrawal from the Custodial Account pursuant to such subclauses (a), (b), (c),
(d), (e) and (f). The Servicer may apply Liquidation Proceeds and Insurance
Proceeds received with respect to a particular Mortgage Loan to reimbursements
permitted by clauses (b), (c) and (d) above in any order as the Servicer deems
appropriate.
On or prior to the second Business Day preceding each Distribution
Date after payment of items (a) through (h) above, the Servicer shall withdraw
from the Custodial Account and remit to the Trustee, in immediately available
funds, and the Trustee, upon receipt thereof, shall deposit in the Certificate
Account, an amount equal to the sum of the Available Distribution Amount, the
Trustee Fee, the Servicing Fee [and the Insurer] Premium for such Distribution
Date.
SECTION 3.10 MAINTENANCE OF PRIMARY MORTGAGE INSURANCE POLICIES; COLLECTIONS
THEREUNDER.
The Servicer shall not take, or permit any Sub-Servicer to take, any action
that would result in loss of coverage under any applicable Primary Mortgage
Insurance Policy for any loss which, but for the actions of the Servicer or
Sub-Servicer, would have been covered thereunder. The Servicer shall use its
best reasonable efforts to cause such Sub-Servicer to keep in full force and
effect each Primary Mortgage Insurance Policy applicable to a Mortgage Loan
being serviced by it, until the principal balance of the related Mortgage Loan,
in the case of a Mortgage Loan having a Loan-to-Value Ratio at origination in
excess of 80%, is reduced to (a) 80% or less of the Appraised Value or (b) 80%
or less of its current value based on a new appraisal. The Servicer agrees to
pay to the extent the related Sub-Servicer does not do so, the premiums for each
Primary Mortgage Insurance Policy on a timely basis and shall use its best
reasonable efforts to cause itself or the Sub-Servicer to be named as loss
payee. In the event that the insurer under any Primary Mortgage Insurance Policy
shall cease to be qualified to transact a mortgage guaranty insurance business
under the laws of the state of its organization or any other state that has
jurisdiction over such insurer (or if such insurer's claims-paying ability shall
adversely affect the rating on the Class A Certificates) or such Primary
Mortgage Insurance Policy is cancelled or terminated for any reason, the
Servicer shall exercise its best reasonable efforts to obtain, or to cause the
related Sub-Servicer to obtain, from another Qualified Insurer, a replacement
policy comparable to such Primary Mortgage Insurance Policy at the expense of
the
48
Mortgagor. The Servicer shall not consent to the cancellation or refusal to
renew any such Primary Mortgage Insurance Policy applicable to any Mortgage
Loan, which is in effect at the date of the initial issuance of the Certificates
and is required to be kept in force hereunder unless the replacement Primary
Mortgage Insurance Policy for such cancelled or non-renewed policy is maintained
with an insurer with a rating not lower than the insurer issuing the Primary
Mortgage Insurance Policy in effect at the date of the initial issuance of the
Certificates or whose claims-paying will not adversely affect the rating on the
Class A Certificates or unless any such cancellation or refusal, or consent
thereto, will not adversely affect the rating on the Class A Certificates. In
connection with any assumption and modification agreement entered into by the
Servicer or a Sub-Servicer pursuant to Section 3.12, the Servicer shall obtain a
replacement Primary Mortgage Insurance Policy, as provided above.
In connection with its activities as administrator and servicer of
the Mortgage Loans, the Servicer agrees to present, on behalf of itself, the
Depositor, the Trustee for the benefit of the Certificateholders [and the
Insurer], claims to the insurer under any Primary Mortgage Insurance Policies
and, in this regard, to take such reasonable action as shall be necessary to
permit recovery under any Primary Mortgage Insurance Policies respecting
defaulted Mortgage Loans. Pursuant to Section 3.07 hereof, any amounts collected
by the Servicer under any Primary Mortgage Insurance Policy shall be deposited
in the Custodial Account, subject to withdrawal pursuant to Section 3.09 hereof.
SECTION 3.11 MAINTENANCE OF HAZARD INSURANCE AND OTHER INSURANCE.
The Servicer shall cause to be maintained for each Mortgage Loan,
hazard insurance with extended coverage in an amount that is at least equal to
the maximum insurable value of improvements securing such Mortgage Loan or its
Principal Balance, whichever is less.
Each policy of standard hazard insurance shall contain, or have an
accompanying endorsement that contains, a standard mortgagee clause complying in
all material respects in form and substance to applicable FNMA guidelines. The
Servicer shall cause to be maintained on property acquired upon foreclosure or
deed in lieu of foreclosure of any Mortgage Loan, liability insurance and, to
the extent described below, flood insurance. Pursuant to Section 3.07 hereof,
any amounts collected by the Servicer under any such policies (other than
amounts to be applied to the restoration or repair of the related Mortgaged
Property or property thus acquired or amounts released to the Mortgagor in
accordance with the terms of the applicable Mortgage or the Servicer's normal
servicing procedures) shall be deposited in the Custodial Account, subject to
withdrawal pursuant to Section 3.09 hereof.
Any cost incurred by the Servicer or the related Sub-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 payments by the related Mortgagor or out of Insurance
Proceeds or Liquidation Proceeds to the extent permitted by Section 3.09 hereof.
If the Mortgaged Property is located at the time of origination of the Mortgage
Loan in a federally designated special flood hazard area, the Servicer shall
cause flood insurance to be maintained. Such flood insurance shall be in an
amount equal to the lesser of (i) the unpaid Principal Balance
49
of the related Mortgage Loan or (ii) the maximum amount of such insurance
available for the related Mortgaged Property under the national flood insurance
program, if the area in which such Mortgaged Property is located is
participating in such program.
In the event that the Servicer shall obtain and maintain a blanket
policy insuring against hazard losses on all of the Mortgage Loans, it shall
conclusively be deemed to have satisfied its obligations as set forth in the
first sentence of this Section 3.11, it being understood and agreed that such
policy may contain a deductible clause on terms substantially equivalent to
those commercially available and maintained by comparable servicers, and
provided that the provider of such blanket policy is rated by A.M. Best Company
A:V or higher and the claims-paying ability of such provider is rated in one of
the three highest rating categories by at least one nationally recognized
statistical rating organization. If such policy contains a deductible clause,
the Servicer shall, to the extent that there shall not have been maintained on
the related Mortgaged Property a policy complying with the first sentence of
this Section 3.11 and there shall have been a loss that would have been covered
by such policy, remit to the Trustee for deposit in the Custodial Account the
amount not otherwise payable under the blanket policy because of such deductible
clause, accompanied by an Officers' Certificate describing the calculation of
such amount. In connection with its activities as administrator and servicer of
the Mortgage Loans, the Servicer agrees to present, on behalf of itself, the
Depositor, the Trustee for the benefit of the Certificateholders, claims under
any such blanket policy.
SECTION 3.12 ENFORCEMENT OF DUE-ON-SALE CLAUSES; ASSUMPTION AGREEMENTS.
(a) Except as otherwise provided in this Section 3.12(a), when any property
subject to a Mortgage has been conveyed by the Mortgagor, the Servicer shall, to
the extent that it has knowledge of such conveyance, enforce any due-on-sale
clause contained in any Mortgage Note or Mortgage, to the extent permitted under
applicable law and governmental regulations, but only to the extent that such
enforcement will not adversely affect or jeopardize coverage under any Required
Insurance Policy. In the event that the Servicer or the related Sub-Servicer is
prohibited by law from enforcing any such due-on-sale clause, or if coverage
under any Required Insurance Policy would be adversely affected, the Servicer is
authorized, subject to Section 3.12(b), to take or enter into an assumption and
modification agreement from or with the person to whom such property has been or
is about to be conveyed, pursuant to which such person becomes liable under the
Mortgage Note and, unless prohibited by applicable state law, the Mortgagor
remains liable thereon, provided that the Mortgage Loan shall continue to be
covered (if so covered before the Servicer enters such agreement) by the
applicable Required Insurance Policies. The Servicer, subject to Section
3.12(b), is also authorized with the prior approval of the insurers under any
Required Insurance Policies to enter into a substitution of liability agreement
with such person, pursuant to which the original Mortgagor is released from
liability and such person is substituted as Mortgagor and becomes liable under
the Mortgage Note. Notwithstanding the foregoing, the Servicer shall not be
deemed to be in default under this Section 3.12(a) by reason of any transfer or
assumption which the Servicer is restricted by law from preventing, for any
reason whatsoever.
(b) Subject to the Servicer's duty to enforce any due-on-sale clause to the
extent set forth in Section 3.12(a) hereof, in any case in which a Mortgaged
Property has been
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conveyed to a Person by a Mortgagor, if an assumption is permitted under Section
3.12(a) and such Person is to enter into an assumption agreement or modification
agreement or supplement to the Mortgage Note or Mortgage held for the benefit of
the Certificateholders [and the Insurer] that requires the signature of the
Trustee, or if an instrument of release signed by the Trustee is required
releasing the Mortgagor from liability on the Mortgage Loan, the Servicer shall
deliver or cause to be delivered to the Trustee for signature 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.
The Servicer shall also deliver or cause to be delivered to the Trustee with the
foregoing documents a letter explaining the nature of such documents and the
reason or reasons why the Trustee's signature is required.
With such letter, the Servicer shall deliver to the Trustee a
certificate of a Servicing Officer certifying that: (i) a Servicing Officer has
examined and approved such documents as to form and substance, (ii) the
Trustee's execution and delivery thereof will not conflict with or violate any
terms of this Agreement or cause the unpaid balance and interest on the Mortgage
Loan to be uncollectible in whole or in part, (iii) any required consents of
insurers under any Required Insurance Policies have been obtained and (iv)
subsequent to the closing of the transaction involving the assumption or
transfer (A) the Mortgage Loan will continue to be secured by a first mortgage
lien pursuant to the terms of the Mortgage, (B) such transaction will not
adversely affect the coverage under any Required Insurance Policies, (C) the
Mortgage Loan will fully amortize over the remaining term thereof or, if the
Mortgage Loan provided that the amortization period on which the Monthly
Payments were based was a longer period, such period has not been extended, (D)
the interest rate on the Mortgage Loan will not be altered nor will the term of
the Mortgage Loan be increased as a result of such assumption or transfer and
(E) if the seller/transferor of the Mortgaged Property is to be released from
liability on the Mortgage Loan, the Servicer used the same underwriting
standards in evaluating the creditworthiness of the purchaser/transferee as were
used in making the original Mortgage Loan, and such release will not (based on
the Servicer's good faith determination) adversely affect the collectibility of
the Mortgage Loan. Upon receipt of such certificate, the Trustee for the benefit
of the Certificateholders [and the Insurer] shall execute any necessary
instruments for such assumption or substitution of liability. Upon the closing
of the transactions contemplated by such documents, the Servicer shall cause the
originals of the assumption agreement, the release (if any), or the modification
or supplement to the Mortgage Note or Mortgage to be delivered to the Trustee
for the benefit of the Certificateholders [and the Insurer] and deposited with
the Trustee Mortgage File for such Mortgage Loan. Any fee collected by the
Servicer for entering into an assumption or substitution of liability agreement
will be retained by the Servicer as additional servicing compensation.
In the event that the Servicer, in connection with any such
assumption or modification agreement or supplement to the Mortgage Note, is
unable to deliver the certificate of the Servicing Officer set forth above, the
Servicer shall purchase, or cause the related Sub-Servicer to purchase the
related Mortgage Loan in the manner, and at the Purchase Price, set forth in
Section 2.04 hereof.
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SECTION 3.13 REALIZATION UPON DEFAULTED MORTGAGE LOANS.
The Servicer shall foreclose upon or otherwise comparably convert the
ownership of properties securing such of the Mortgage Loans as come into and
continue in default and as to which, in the reasonable judgment of the Servicer,
no satisfactory arrangements can, in accordance with prudent lending practices,
be made for collection of delinquent payments pursuant to Section 3.01 hereof.
In connection with such foreclosure or other conversion, the Servicer shall
follow such practices and procedures as it shall deem necessary or advisable, as
shall be normal and usual in its general mortgage servicing activities and for
its own portfolio and as are in accordance with the requirements of the insurer
under any Required Insurance Policy and shall deliver to the Insurer a
liquidation report with respect to the related Mortgage Loan on the form of
report customarily prepared by the Servicer. The Servicer shall not be required
to expend its own funds in connection with any foreclosure or towards the
restoration, repair, protection or maintenance of any property unless it shall
determine in its sole discretion that such expenses will be recoverable to it as
Liquidation Expenses either through Liquidation Proceeds (respecting which it
shall have priority for purposes of withdrawals from the Custodial Account
pursuant to Section 3.09 hereof) or through Insurance Proceeds (respecting which
it shall have similar priority). The 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 proceeds of
liquidation of the related Mortgaged Property, as contemplated in Section 3.09
hereof.
In the event that any Mortgaged Property becomes an REO Property, the
deed or certificate of sale shall be taken in the name of the Trustee for the
benefit of the Certificateholders [and the Insurer], or its nominee, on behalf
of the Certificateholders [and the Insurer]. Pursuant to its efforts to sell
such REO Property, the Servicer shall either itself or through an agent selected
by the Servicer protect and conserve such REO Property in the same manner and to
such extent as is customary in the locality where such REO Property is located
and may, incident to its conservation and protection of the interests of the
Certificateholders [and the Insurer], rent the same, or any part thereof, as the
Servicer deems to be in the best interest of the Servicer, the Insurer and the
Certificateholders for the period prior to the sale of such REO Property on such
terms and conditions and for such periods as the Servicer deems to be in the
best interest of the Servicer, the Insurer and the Certificateholders.
The decision of the Servicer to foreclose on a defaulted Mortgage
Loan shall be subject to a determination by the 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 Mortgaged Properties
acquired through foreclosure or other judicial proceeding on behalf of the
Certificateholders [and the Insurer], net of reimbursement to the Servicer for
expenses incurred (including any taxes) in connection with such management,
advances made by the Servicer pursuant to Sections 3.01, 3.11, 3.13 or 5.01 in
connection with the related Mortgage Loan or REO Property and Liquidation
Expenses incurred by the Servicer in connection with the related Mortgage Loan,
shall be applied to the payment of principal of and interest on the related
defaulted Mortgage Loans (with interest accruing and principal amortizing 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 of and interest on the related Mortgage Notes and shall be deposited
into the Custodial Account.
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Prior to obtaining or causing the Trustee to obtain a deed as a
result of or in lieu of foreclosure, or otherwise acquiring (or causing the
Trustee to acquire) possession of or title to any Mortgaged Property, if the
Servicer determines that obtaining a deed or otherwise acquiring title or
possession of such Mortgaged Property would likely subject the Servicer, the
Trustee or the Trust Fund to substantial liability in respect of environmental
conditions concerning the Mortgaged Property, (a) the Servicer shall (i) notify
the Trustee and the Depositor of such determination and (ii) refrain from
obtaining or directing the Trustee to obtain a deed as a result of or in lieu of
foreclosure or otherwise acquiring title or possession to such Mortgaged
Property and (b) the obligations of the Servicer to make advances, including,
without limitation, Monthly Advances, in connection with the Mortgage Loan in
question shall cease as of the date that the Servicer makes such determination.
SECTION 3.14 TRUSTEE TO COOPERATE; RELEASE OF TRUSTEE MORTGAGE FILES.
Upon the payment in full of any Mortgage Loan, or the receipt by the
Servicer of a notification that payment in full will be escrowed in a manner
customary for such purposes, and upon notification by the Servicer in the form
of a certification (which certification shall include a statement to the effect
that all amounts received or to be received in connection with such payment
which are required to be deposited in the Custodial Account have been or will be
so deposited) of a Servicing Officer and a Request for Release of the Trustee
Mortgage File in the form of Exhibit G hereto the Trustee shall promptly release
the related Trustee Mortgage File to the Servicer, and the Trustee shall execute
and deliver to the Servicer the request for reconveyance, deed of reconveyance
or release, satisfaction or assignment of mortgage or such instrument releasing
the lien of the Mortgage, and, in each case, such other documents or instruments
as may be reasonably required in connection therewith, as directed by the
Servicer, together with the Mortgage Note with written evidence of cancellation
thereon. The provisions of the immediately preceding sentence shall not, in any
manner, limit or impair the right of the Servicer to execute and deliver, on
behalf of the Trustee, the Depositor, the Certificateholders or any of them, any
and all instruments of satisfaction, cancellation or assignment, 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. No expenses incurred in connection with any
instrument of satisfaction or deed of reconveyance shall be chargeable to the
Certificate Account but shall be paid by the Servicer. From time to time and as
shall be appropriate for the servicing or foreclosure of any Mortgage Loan,
including, without limitation, 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 or total 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 Trustee Mortgage
File, the Trustee shall, upon request of the Servicer and the delivery to the
Trustee of a Request for Release signed by a Servicing Officer, in the form of
Exhibit G hereto, release the Trustee Mortgage File to the Servicer. If the
Servicer at any time seeks to initiate a foreclosure proceeding in respect of
any Mortgaged Property, the Servicer shall deliver to the Depositor or 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, together with a certificate of a
Servicing
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Officer requesting that such pleadings or documents be executed by the Trustee.
A Servicing Officer shall certify as to the reason such documents or pleadings
are required and that the execution and delivery thereof by the Trustee will not
invalidate the insurance coverage under any Required Insurance Policy or
invalidate or otherwise affect the lien of the Mortgage except for the
termination of such lien upon completion of the foreclosure.
SECTION 3.15 DOCUMENTS, RECORDS AND FUNDS IN POSSESSION OF SERVICER TO BE HELD
FOR THE DEPOSITOR AND THE TRUSTEE FOR THE BENEFIT OF THE CERTIFICATEHOLDERS.
Notwithstanding any other provisions of this Agreement, the Servicer
shall transmit to the Trustee to the extent required by this Agreement all
documents and instruments coming into the possession of the Servicer from time
to time and shall account fully to the Trustee for the benefit of the
Certificateholders [and the Insurer] for any funds received by the Servicer or
which otherwise are collected by the Servicer as Liquidation Proceeds or
Insurance Proceeds in respect of any Mortgage Loan. All Servicer Mortgage Files
or Trustee Mortgage Files and funds collected or held by, or under the control
of, the Servicer in respect of any Mortgage Loans, whether from the collection
of principal and interest payments or from Liquidation Proceeds or Insurance
Proceeds, including but not limited to, any funds on deposit in the Custodial
Account, shall be held by the Servicer for and on behalf of the Depositor, the
Trustee for the benefit of the Certificateholders [and the Insurer] and shall be
and remain the sole and exclusive property of the Trustee, subject to the
applicable provisions of this Agreement. The Servicer also agrees that it shall
not create, incur or subject any Servicer Mortgage File or Trustee Mortgage File
or any funds that are deposited in the Custodial Account or any Servicing or
Escrow Account, or any funds that otherwise are or may become due or payable to
the Trustee for the benefit of the Certificateholders, to any claim, lien,
security interest, judgment, levy, writ of attachment or other encumbrance, or
assert by legal action or otherwise any claim or right of setoff against any
Servicer Mortgage File or Trustee Mortgage File or any funds collected on, or in
connection with, a Mortgage Loan, except, however, that the Servicer shall be
entitled to set off against and deduct from any such funds any amounts that are
properly due and payable to the Servicer under this Agreement subject to the
terms of this Agreement.
SECTION 3.16 SERVICING COMPENSATION.
As compensation for its activities hereunder, the Servicer shall be
entitled to retain from the Custodial Account or withdraw from the Custodial
Account the amounts specified in subclause (a) of Section 3.09 hereof as payable
to it.
Additional servicing compensation in the form of prepayment
penalties, fees or premiums, assumption fees, modification fees, late payment
charges or otherwise or any excess interest charges payable by the Mortgagor by
virtue of any default or other non-compliance by the Mortgagor with the terms of
the Mortgage or any other instrument or document executed in connection
therewith or otherwise shall be retained by the Servicer to the extent not
required to be deposited in the Custodial Account pursuant to Section 3.07
hereof. The Servicer shall be required to pay all expenses incurred by it in
connection with its servicing activities hereunder (including payment of
premiums for Primary Mortgage Insurance Policies, to the extent such premiums
are not required to be paid or have not been paid by the related Mortgagor or
the
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related Sub-Servicer, payment of any premiums for hazard insurance, as required
by Section 3.11 hereof and maintenance of the other forms of insurance coverage
required by Section 3.11 hereof) the payment of servicing compensation to any
Sub-Servicers pursuant to any Sub-Servicing Agreement and the payment of the
expenses of the Trustee to the extent provided in Section 9.05, and shall not be
entitled to reimbursement therefor except as specifically provided in Sections
3.09, 3.13 and 5.03 hereof.
SECTION 3.17 REPORTS TO THE DEPOSITOR; ACCOUNT STATEMENTS.
Within five Business Days following each Distribution Date, the
Servicer shall deliver to the Trustee, the Insurer and the Depositor a statement
setting forth the status of the Custodial Account, if any, as of the close of
business on such Distribution Date showing, for the period covered by such
statement, the aggregate of deposits in or withdrawals from the Custodial
Account, if any, for each category of deposit specified in Section 3.07 hereof
and each category of withdrawal specified in Section 3.09 hereof. The Servicer
shall forward a copy of such statement to the Rating Agencies. Within ten
Business Days following each Distribution Date, the Trustee shall deliver to the
Depositor [and the Insurer] a statement setting forth the status of the
Certificate Account as of the close of business on such Distribution Date
showing, for the period covered by such statement, the aggregate of deposits in
or withdrawals from the Certificate Account. The Trustee shall forward a copy of
such statement to the Rating Agencies.
SECTION 3.18 ANNUAL STATEMENT AS TO COMPLIANCE.
The Servicer shall deliver to the Depositor, the Insurer and the
Trustee on or before January 31 of each year, commencing January 31, [200_] an
Officers' Certificate stating, as to each signer thereof, that (a) a review of
the activities of the Servicer during the year ended on the preceding September
30 and of the performance of the Servicer under this Agreement has been made
under such officer's supervision, (b) to the best of such officer's knowledge,
based on such review, the Servicer has fulfilled all its obligations under this
Agreement in all material respects throughout such year, or, if there has been a
default in the fulfillment of any such obligation, specifying each such default
known to such officer and the nature and status thereof, (c) a Servicing Officer
has conducted an examination of the activities of each Sub-Servicer during the
immediately preceding year and its performance under any Sub-Servicing
Agreement, and (d) to the best of such Servicing Officer's knowledge, based on
such examination, each Sub-Servicer has performed and fulfilled its duties,
responsibilities and obligations under such Sub-Servicing Agreement in all
material respects throughout such year, or if there has been a default in the
performance or fulfillment of any such duties, responsibilities or obligations,
specifying each such default known to such Servicing Officer and the nature and
status thereof. The Servicer shall forward a copy of each such statement to the
Rating Agencies.
SECTION 3.19 ANNUAL INDEPENDENT PUBLIC ACCOUNTANTS' SERVICING REPORT.
On or before January 31 of each year, beginning with the first
January 31 that occurs at least six months after the Cut-off Date, the Servicer,
at its expense, shall cause a firm of independent public accounts that is a
member of the American Institute of Certified Public Accountants to furnish a
statement to the Depositor, the Insurer and the Trustee for the benefit of the
Certificateholders to the effect that such firm has examined certain documents
substantially
55
similar to this Agreement and records relating to the servicing of mortgage
loans serviced by the Servicer or any successor servicer that are substantially
similar to the Mortgage Loans and that, on the basis of an examination conducted
substantially in compliance with the Uniform Single Audit Program for Mortgage
Bankers or the Audit Program for Mortgages serviced for FHLMC, such servicing
has been conducted in compliance with such agreements except for such
significant exceptions or errors in records that, in the opinion of such firm,
the Uniform Single Audit Program for Mortgage Bankers or the Audit Program for
Mortgages serviced for FHLMC requires it to report. In rendering such statement
such firm may rely, as to matters relating to direct servicing of Mortgage Loans
by Sub-Servicers, if any, upon comparable statements for examinations conducted
substantially in compliance with the Uniform Single Audit Program for Mortgage
Bankers or the Audit Program for Mortgages serviced for FHLMC (rendered within
one year of such statement) of independent public accounts with respect to the
related Sub-Servicer. The Servicer shall forward a copy of each such report to
the Rating Agencies.
SECTION 3.20 REPORTS TO TRUSTEE.
On or before the third Business Day prior to each Distribution Date,
the Servicer shall deliver to the Trustee [and the Insurer] a monthly Servicing
Report containing the information set forth in Section 4.04(a) and the Servicer
shall notify the Trustee of the Deficiency Amount, if any, with respect to such
Distribution Date. The Trustee may conclusively rely on information provided by
the Servicer and shall have no obligation to recompute, recalculate, or verify
the accuracy of such information.
SECTION 3.21 CONVERTED MORTGAGE LOANS; CERTAIN PROCEDURES AND PURCHASES.
(a) The Trustee, as Note Holder (as defined in the Mortgage Notes for the
Mortgage Loans) on behalf of the Certificateholders [and the Insurer] is hereby
authorized and hereby authorizes and directs the Servicer, on behalf of the Note
Holder, to determine fixed interest rates into which Mortgagors under
Convertible Mortgage Loans may convert the adjustable interest rates on their
Mortgage Notes in accordance with the terms set forth in such Mortgage Notes.
The Servicer agrees to make such determinations and otherwise administer the
program contemplated in the Mortgage Notes for the Convertible Mortgage Loans
until the later to occur of (i) the date on which all the Convertible Mortgage
Loans have become Converted Mortgage Loans, and (ii) the last date on which
Mortgagors have the option to convert the adjustable interest rates on their
Mortgage Notes to fixed interest rates.
(b) The Servicer may, but is not obligated to, purchase such Converting
Mortgage Loan. All amounts paid by the Servicer in connection with the purchase
of a Converting Mortgage Loan or Converted Mortgage Loan, as the case may be,
will be deposited in the Custodial Account. No party to this Agreement or any
successor to any party shall be required to purchase any Converted or Converting
Mortgage Loan.
(c) Notwithstanding that a Mortgage Loan becomes a Converting Mortgage Loan
or Converted Mortgage Loan in any month, such Converting Mortgage Loan or
Converted Mortgage Loan shall remain in the Trust Fund and all payments in
respect thereof shall remain in
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the Trust Fund unless and until such Converting Mortgage Loan or Converted
Mortgage Loan, as the case may be, is purchased by the Servicer, pursuant to
Section 3.21(b).
(d) Upon any purchase of a Converting Mortgage Loan or Converted Mortgage
Loan, as the case may be, by the Servicer pursuant to Section 3.21(b) and the
deposit in the Custodial Account of the Purchase Price, the Servicer shall give
the Trustee written notice thereof and, based thereon, the Trustee shall
release, or cause any Custodian to release, the related Mortgage File and convey
such Mortgage Loan to the purchaser whereupon such purchased Converted Mortgage
Loan shall cease to be part of the Trust Fund.
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ARTICLE IV
PAYMENTS AND STATEMENTS TO CERTIFICATEHOLDERS
SECTION 4.01 CERTIFICATE ACCOUNT.
The Trustee shall establish, prior to the Delivery Date, and shall
maintain, in the name of the Trustee on behalf of the Holders of interests in
the Trust Fund, the Certificate Account, which shall be an Eligible Account,
into which the Trustee upon receipt from the Servicer shall deposit all payments
remitted by the Servicer and any amounts required to be remitted by the
Depositor pursuant to the terms hereof. All distributions to be made from time
to time to Holders of interests in the Trust Fund out of funds in the
Certificate Account shall be made by or on behalf of the Trustee. The Trustee
will give notice to the Servicer, the Rating Agencies, the Insurer and the
Depositor of the location of the Certificate Account and of any change thereof,
prior to the use thereof. Funds held in the Certificate Account and delivered to
the Trustee earlier than one Business Day prior to the next Distribution Date
shall be invested by the Trustee in Eligible Investments as directed by the
Servicer or shall remain uninvested. All income and gain net of any losses
realized from any such investment shall be for the benefit of the Servicer and
shall be subject to withdrawal at the Servicer's direction from time to time.
The amount of any losses net of any gains not paid to the Servicer incurred in
respect of any such investments shall be deposited in the Certificate Account
out of the Servicer's own funds immediately as realized.
In addition, the Trustee shall withdraw from the Insurance Account
and deposit into the Certificate Account the amount necessary to make the
Insured Payment on each Distribution Date to the extent received from the
Insurer.
The Trustee shall make, to the extent required or authorized
hereunder, withdrawals from the Certificate Account for the following purposes:
(i) to withdraw any amount deposited in the Certificate Account and
not required to be deposited therein;
(ii) to reimburse the Servicer for any unreimbursed Nonrecoverable
Advance;
(iii) to make required distributions pursuant to Section 4.02; and
(iv) to pay to the Depositor any amount to which it is entitled
pursuant to Section 7.03.
SECTION 4.02 DISTRIBUTIONS.
(a) On each Distribution Date, the following amounts, in the following
order of priority, shall be distributed by REMIC I to REMIC II on account of the
REMIC I Regular Interests or withdrawn from the Certificate Account and
distributed to the holders of the Class R-I Certificates, as the case may be:
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(i) to the Holders of REMIC Regular Interests, in an amount equal to
(A) the Uncertificated Interest for such Distribution Date, plus (B)
any amounts in respect thereof remaining unpaid from previous
Distribution Dates; and
(ii) on each Distribution Date, to the Holders of REMIC I Regular
Interests, in an amount equal to the remainder of the Available
Distribution Amount for such Distribution Date after the
distributions made pursuant to clause (i) above, allocated as follows
(except as provided below):
(x) first, to the Holders of the REMIC I Regular Interests
[____], REMIC I Regular Interests [____] and REMIC I Regular
Interests [____], respectively, the Class [____] Principal
Distribution Amount, the Class [____] Principal Distribution
Amount, and the Class [____] Principal Distribution Amount from
such remainder;
(y) second, to the Holders of the REMIC I Regular Interests
[____], any remaining portion of such remainder.
(b) On each Distribution Date the Trustee shall apply amounts in the
Certificate Account plus the Insured Payment, if any, transferred from the
Insurance Account and payable to the Class A Certificateholders in accordance
with Section 4.06, to pay the following amounts in the following order of
priority:
(i) [to pay to the Insurer, the Insurer Premium];
(ii) to pay to itself on each Distribution Date an amount equal to the
Principal Balance of each Mortgage Loan immediately prior such
Distribution Date multiplied by one-twelfth of the Trustee Fee
Rate;
(iii)to pay to the Servicer, on any Distribution Date, the Servicing
Fee due on such Distribution Date, if the Servicer has remitted
prior to the related Distribution Date funds directly to the
Trustee for deposit in the Certificate Account;
(iv) [to pay to the Insurer the amount of Cumulative Insurance
Payments as of such Distribution Date];
(v) to the holders of the Class A Certificates, the Class A Interest
Distribution Amount and the Class A Cumulative Interest Shortfall
Amount for which no Insured Payment has been previously paid to
the Class A Certificateholders;
(vi) to the holders of the Class A Certificates, to the extent of the
Available Distribution Amount remaining, the Class A Principal
Distribution Amount; and
(vii)to the holders of the Class S Certificates, to the extent of the
Available Distribution Amount remaining, the Class S Interest
Distribution Amount and the Class S Cumulative Interest Shortfall
Amount; and
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(viii) to the holders of the Class R-II Certificates, the balance, if
any, of the Available Distribution Amount.
(c) Within five Business Days before the related Distribution Date, the
Servicer shall notify the Trustee of the amounts, if any, payable to the Insurer
pursuant to Sections 4.02(b)(iv).
(d) The Servicer shall be responsible for the calculations with respect to
distributions from the Certificate Account so long as the Trust Fund has not
been terminated in accordance with this Agreement. All distributions made to
Certificateholders of any Class on such Distribution Date will be made to the
Certificateholders of the respective Class of record on the immediately
preceding Record Date, except for the final distribution, which shall be made as
provided in the form of Certificate. All distributions made to the
Certificateholders shall be based upon the Percentage Interest represented by
their respective Certificates. If on any Determination Date, the Trustee
determines that there are no Mortgage Loans outstanding and no other funds or
assets in the Trust Fund other than the funds in the Certificate Account, the
Trustee shall promptly send the final distribution notice to each
Certificateholder specifying the manner in which the final distribution will be
made.
(e) Any Certificateholder shall be entitled to receive distributions
hereunder on a Distribution Date (other than as provided in Section 10.02
respecting the final distribution) by wire transfer to the account specified in
writing by the Certificateholder to the Trustee if the Initial Certificate
Principal Balance evidenced by such Holder's Certificate is at least equal to
$2,500,000 or the Percentage Interest thereof is 100%. In each case, the account
must be specified in writing at least five Business Days prior to the Record
Date for the Distribution Date on which wire transfers will commence. All other
distributions shall be made by check payable to the Certificateholder mailed by
first class mail to the address of such Certificateholder reflected in the
Certificate Register.
SECTION 4.03 ALLOCATION OF REALIZED LOSSES.
Prior to each Distribution Date, the Servicer shall determine the
total of Realized Losses, if any, incurred with respect to the Mortgage Loans
during the previous Prepayment Period. On each Distribution Date, Realized
Losses will be allocated after the distribution of principal and interest on
such Distribution Date; PROVIDED, HOWEVER, that if the Certificate Principal
Balance of any Class of Certificates would be reduced to zero as a result of
Realized Losses to be allocated on such Distribution Date if no funds were
available for distributions on the Certificates, then Realized Losses will be
allocated to such Class prior to the distribution of principal and interest. In
every case, such Realized Losses shall be allocated as follows:
(a) first, by application of clause (vi) of the definition of Class A
Principal Distribution Amount, to the Class S Interest Distribution Amount for
the related Distribution Date; second, to any Class S Cumulative Interest
Shortfall Amount; and third, to the Class A Certificates. All such allocations
to a Class of Certificates shall be on a pro rata basis in accordance with the
shortfall amount or distribution amount, as applicable, for each Certificate of
such Class.
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(b) All Realized Losses on the Mortgage Loans shall be allocated to the
REMIC I Regular Interests in accordance with the definition of REMIC I Realized
Losses.
SECTION 4.04 MONTHLY STATEMENTS TO CERTIFICATEHOLDERS.
(a) Not later than each Distribution Date, the Servicer shall prepare and
the Trustee shall cause to be forwarded by mail to each Certificateholder, the
Servicer, the Insurer, the Depositor and the Rating Agencies a statement setting
forth:
(i) the amount of such distribution representing principal of the
Mortgage Loans, separately identifying the aggregate amount of
any Principal Prepayments included therein, and the portion of
such distribution, if any, representing a Monthly Advance of
principal and the Certificate Principal Balance of the Class A
Certificates after giving effect to such distributions;
(ii) the amount of such distribution representing interest on the
Mortgage Loans and the portion of such distribution, if any,
representing a Monthly Advance of interest;
(iii)the aggregate Principal Balances of the Mortgage Loans as of the
close of business on such Distribution Date and the amount of
Principal Prepayments received during the immediately preceding
Prepayment Period;
(iv) the related amount of the Servicing Fees retained or withdrawn
from the Custodial Account or the Certificate Account;
(v) the amount of Monthly Advances paid by the Servicer;
(vi) the number and aggregate principal amounts of Mortgage Loans (A)
delinquent (1) one month, (2) two months, (3) three months or
more and (B) in foreclosure and (C) in bankruptcy;
(vii)the book value (within the meaning of 12 C.F.R. 571.13 or
comparable provision) of any REO Property;
(viii) the respective amounts, if any, of Realized Losses allocated to
the respective Classes of Certificates with respect to such
Distribution Date;
(ix) all Monthly Advances recovered during the related Due Period;
(x) the amount of any tax imposed on a "prohibited transaction" of
the Trust Fund as defined in Section 860F of the Code during the
related Due Period;
(xi) the amount of any reduction in Certificate Principal Balance,
cumulative interest shortfall amount or interest distribution
amount for any Class attributable to the application of Realized
Losses thereto on such Distribution Date;
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(xii)the amount of any Insured Payment made on such Distribution
Date, the amount of any reimbursement payment made to the Insurer
on such Distribution Date pursuant to Section 4.02(c) and the
amount of Cumulative Insurance Payments after giving effect to
any such Insured Payment or any such reimbursement payment to the
Insurer;
(xiii) the Certificate Rate on the Class A Certificates for such
Distribution Date;
(xiv)the aggregate principal balance of all Converting Mortgage Loans
and Converted Mortgage Loans, as the case may be, purchased by
the Servicer pursuant to Section 3.21, the proceeds of which are
being distributed on such Distribution Date and the aggregate
principal balance of all Converted Mortgage Loans which have not
been so purchased pursuant to Section 3.21;
(xv) the Rolling Three Month Delinquency Percentage; and
(xvi)cumulative Realized Losses since the Delivery Date and for the
three year period commencing on the Delivery Date.
(b) Upon reasonable advance notice in writing, if required by federal
regulation, the Trustee will provide to each Certificateholder that is a savings
association, bank or insurance company certain reports and access to information
and documentation regarding the Mortgage Loans sufficient to permit such
Certificateholder to comply with applicable regulations of the Office of Thrift
Supervision or other regulatory authorities with respect to investment in the
Certificates and the Servicer shall cooperate with the Trustee in providing such
information; PROVIDED, HOWEVER, that the Trustee shall be entitled to be
reimbursed by each such Certificateholder for the Trustee's actual expenses
incurred in providing such reports and access. The Trustee will provide to any
Certificateholder upon request the outstanding Certificate Principal Balance as
of such dates and, if then known by the Trustee, the outstanding Certificate
Principal Balances after giving effect to any distribution to be made on the
next following Distribution Date.
SECTION 4.05 PREPAYMENT INTEREST SHORTFALLS AND RELIEF ACT SHORTFALLS.
Prepayment Interest Shortfalls resulting from a Principal Prepayment
of a Mortgage Loan during any Prepayment Period and Relief Act Shortfalls will
be applied first, to reduce the Class A Interest Distribution Amount payable on
the related Distribution Date as set forth in the definition of the Class A
Interest Distribution Amount and second, to reduce the Class S Interest
Distribution Amount payable on the related Distribution Date, in respect of such
Mortgage Loan.
SECTION 4.06 [THE POLICY.
(a) If the Servicer determines that the Deficiency Amount is greater than
zero with respect to any Distribution Date, the Trustee shall complete the
notice in the Form of Exhibit A to the Policy (the "Notice") and submit such
Notice in accordance with the Policy to the Insurer no later than 12:00 P.M.,
New York City time, on the third Business Day
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immediately preceding each Distribution Date, as a claim for an Insured Payment
in an amount equal to such Deficiency Amount.
(b) The Trustee shall establish and maintain the Insurance Account on
behalf of the Holders of the Class A Certificates. Upon receipt of an Insured
Payment from the Insurer on behalf of the Class A Certificateholders, the
Trustee shall deposit such Insured Payment in the Insurance Account. All amounts
on deposit in the Insurance Account shall remain uninvested. On each
Distribution Date, the Trustee shall transfer any Insured Payment then on
deposit in the Insurance Account to the Certificate Account. The Trustee shall
distribute on each Distribution Date the Deficiency Amount for such Distribution
Date from the Certificate Account, together with the distributions to be made to
the Class A Certificateholders on such Distribution Date, as distributions of
interest and principal, respectively.
(c) The Trustee shall (i) receive as attorney-in-fact of each Class A
Certificateholder any Insured Payment from the Insurer and (ii) distribute such
Insured Payment to such Class A Certificateholders as set forth in subsection
(b) above. Insured Payments disbursed by the Trustee from proceeds of the Policy
shall not be considered payment by the Trust Fund with respect to the Class A
Certificates, nor shall such disbursement of such Insured Payments discharge the
obligations of the Trust Fund with respect to the amounts thereof, [and the
Insurer] shall become owner of such amounts to the extent covered by such
Insured Payments as the deemed assignee of such Class A Certificateholders. The
Trustee hereby agrees on behalf of each Class A Certificateholder (and each
Class A Certificateholder, by its acceptance of its Class A Certificates, hereby
agrees) for the benefit of the Insurer that the Trustee shall recognize that to
the extent the Insurer pays Insured Payments, either directly or indirectly (as
by paying through the Trustee), to the Class A Certificateholders, the Insurer
will be entitled to be subrogated to the rights of the Class A
Certificateholders to the extent of such payments.]
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ARTICLE V
ADVANCES
SECTION 5.01 MONTHLY ADVANCES BY THE SERVICER.
Subject to the conditions of this Article V, the Servicer, as
required below, shall make a Monthly Advance to the Certificate Account
maintained by the Trustee, in the amount, if any, of the aggregate Monthly
Payments less Prepayment Interest Shortfalls and Relief Act Shortfalls, after
adjustment of the interest portion of each such Monthly Payment to the Mortgage
Rate less the applicable Servicing Fee Rate, on the Mortgage Loans that were due
on the Due Date but that were not received and remitted to the Certificate
Account on or prior to the Servicer Advance Date. The Servicer shall be
obligated to make any such Monthly Advance only to the extent that such advance,
in the good faith judgment of the Servicer, will be recoverable by the Servicer
from Insurance Proceeds, Liquidation Proceeds (less Liquidation Expenses), or
otherwise on the related Mortgage Loan.
On the Determination Date immediately preceding the related
Distribution Date, the Servicer shall determine whether and to what extent any
Mortgagor has failed to make any Monthly Payment due on the Due Date and whether
such deficiencies, if advanced by the Servicer, would be recoverable by the
Servicer from related Insurance Proceeds or Liquidation Proceeds (net of
Liquidation Expenses). If the Servicer shall have determined that it is not
obligated to make the entire Monthly Advance because all or a lesser portion of
such Monthly Advance would not be recoverable by the Servicer from related
Insurance Proceeds or Liquidation Proceeds (net of Liquidation Expenses), the
Servicer shall deliver to the Trustee, not less than two Business Days prior to
the related Distribution Date, for the benefit of the Certificateholders [and
the Insurer], an Officers' Certificate setting forth the reasons for such
determination.
In lieu of making all or a portion of any Monthly Advance, the
Servicer may cause to be made an appropriate entry in its records relating to
the Custodial Account that funds in such account, including but not limited to
any amounts received in respect of scheduled principal and interest on any
Mortgage due after the related Due Period, in excess of the Available
Distribution Amount (less the amount of such Monthly Advance) for the related
Distribution Date have been used by the Servicer in discharge of its obligation
to make any such Monthly Advance. Any funds so applied shall be replaced by the
Servicer by deposit, in the manner set forth above, in the Custodial Account no
later than the Servicer Advance Date to the extent that funds in the Custodial
Account on such date are less than the amounts required to be distributed on the
related Distribution Date. The Servicer shall be entitled to be reimbursed from
the Custodial Account for all Monthly Advances of its own funds made pursuant to
this Section as provided in Section 3.09.
SECTION 5.02 ADVANCES FOR ATTORNEYS' FEES.
The Servicer shall make advances from time to time for attorneys'
fees and court costs incurred, or which reasonably can be expected to be
incurred, for the foreclosure of any Mortgage Loan or for any transaction in
which the Trustee for the benefit of the
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Certificateholders [and the Insurer] is expected to receive a deed-in-lieu of
foreclosure, unless the Servicer has made a good faith determination that such
advances would not be recoverable from Insurance Proceeds or Liquidation
Proceeds relating to the Mortgage Loan. If the Servicer shall make a good faith
determination that such advances would not be so recoverable, the Servicer shall
promptly deliver to the Trustee an Officers' Certificate setting forth the
reasons for such determination. The Servicer shall be entitled to reimbursement
for any such advance as provided in Section 3.09 hereof.
SECTION 5.03 NONRECOVERABLE ADVANCES.
The determination by the Servicer that it has made a Nonrecoverable
Advance shall be evidenced by an Officers' Certificate of the Servicer promptly
delivered to the Trustee setting forth the reasons for such determination.
Following the Trustee's receipt of the Officers' Certificate, the Servicer shall
be entitled to reimbursement for such Nonrecoverable Advance as provided in
Section 3.09 hereof.
SECTION 5.04 ADVANCE PROCEDURES.
(a) If, on any Determination Date, the Servicer determines to make a
Monthly Advance in accordance with Section 5.01, it shall make such Monthly
Advance on or before noon, St. ▇▇▇▇ time, on the second Business Day prior to
the related Distribution Date (the "Servicer Advance Date"). The Servicer shall
notify the Trustee of the aggregate amount of Monthly Advances for a
Distribution Date on or before three Business Days prior to such Distribution
Date. Any such Monthly Advance shall be included with the distribution on the
related Distribution Date pursuant to Section 4.02.
(b) In the event that the Servicer fails to make a Monthly Advance required
to be made pursuant to Section 5.01 on or before 3 p.m., [________] time, on the
Servicer Advance Date, the Trustee shall on or before 12 noon, New York time on
the next Business Day provide to the Servicer, by telecopy, written notice of
such failure and the amount of such failure and that continuance of such failure
for a period of one Business Day will be an Event of Default.
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ARTICLE VI
THE CERTIFICATES
SECTION 6.01 THE CERTIFICATES.
The Certificates shall be in substantially the forms set forth in
Exhibits A, B and C hereto, with such appropriate insertions, omissions,
substitutions and other variations as are required or permitted by this
Agreement or as may in the reasonable judgment of the Trustee or the Depositor
be necessary, appropriate or convenient to comply, or facilitate compliance,
with applicable laws, and may have such letters, numbers or other marks of
identification and such legends or endorsements placed thereon as may be
required to comply with the rules of any securities exchange on which any of the
Certificates may be listed, or as may, consistently herewith, be determined by
the officers executing such Certificates, as evidenced by their execution
thereof.
The definitive Certificates shall be printed, typewritten,
lithographed or engraved or produced by any combination of these methods or may
be produced in any other manner permitted by the rules of any securities
exchange on which any of the Certificates may be listed, all as determined by
the officers executing such Certificates, as evidenced by their execution
thereof.
The Class A Certificates will be in fully-registered form only in
minimum denominations of $100,000 Certificate Principal Balance and integral
multiples of $1,000 in excess thereof, provided that one Class A Certificate may
be issued in such other amount as is required so that the aggregate of the Class
A Certificate equals its aggregate Certificate Principal Balance. The Class S
Certificates will be issued in fully-registered form only in minimum Percentage
Interests of 20% and integral multiples thereof. The Class R-I and Class R-II
Certificates will each be issuable only as a single Certificate.
The Certificates shall be executed by manual or facsimile signature
on behalf of the Trustee by a Responsible Officer. Certificates bearing the
manual or facsimile signatures of individuals who were, at the time when such
signatures were affixed, authorized to sign on behalf of the Trustee shall bind
the Trustee, notwithstanding that such individuals or any of them have ceased to
be so authorized prior to the authentication and delivery of such Certificates
or did not hold such offices at the date of such Certificate. No Certificate
shall be entitled to any benefit under this Agreement, or be valid for any
purpose, unless there appears on such Certificate a certificate of
authentication executed by the Trustee by manual signature, and such certificate
of authentication upon any Certificate shall be conclusive evidence, and the
only evidence, that such Certificate has been duly authenticated and delivered
hereunder. All Certificates shall be dated the date of their authentication.
SECTION 6.02 REGISTRATION OF TRANSFER AND EXCHANGE OF CERTIFICATES.
(a) The Trustee shall maintain, or cause to be maintained, a Certificate
Register in which, subject 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
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herein provided. Upon surrender for registration of transfer of any Certificate,
the Trustee shall execute, authenticate and deliver, in the name of the
designated transferee or transferees, one or more new Certificates in like
aggregate interest and of the same Class.
(b) At the option of a Certificateholder, Certificates may be exchanged for
other Certificates of authorized denominations and the same aggregate interest
in the Trust Fund and of the same Class, upon surrender of the Certificates to
be exchanged at the office or agency of the Trustee set forth in Section 9.11.
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.
(c) 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.
(d) All Certificates surrendered for registration of transfer and exchange
shall be canceled and subsequently destroyed by the Trustee in accordance with
the Trustee's customary procedures.
(e) No transfer of any Class S or Class R Certificate shall be made unless
that transfer is made pursuant to an effective registration statement under the
1933 Act and effective registration or qualification under applicable state
securities laws, or is made in a transaction which does not require such
registration or qualification. In the event that a transfer is to be made
without registration or qualification, (i) the Trustee shall require, in order
to assure compliance with such laws, that the Certificateholder desiring to
effect the transfer and such Certificateholder's prospective transferee each
certify to the Trustee in writing in the forms set forth in Exhibit H and
Exhibit I, respectively, the facts surrounding the transfer and (ii) the
Depositor or the Trustee shall require an opinion of counsel reasonably
satisfactory to the requesting party that such transfer may be made without such
registration or qualification, which Opinion of Counsel shall not be required to
be an expense of the Depositor or the Trustee. Neither the Depositor nor the
Trustee is obligated to register or qualify any Class S or Class R Certificate
under the 1933 Act or any other securities law or to take any action not
otherwise required under this Agreement to permit the transfer of such
Certificate or interest without registration or qualification. Any such Holder
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 federal and state laws.
(f) No transfer of a Class S or Class R Certificate shall be made to any
employee benefit or other plan that is subject to the Employee Retirement Income
Security Act of 1974, as amended ("ERISA"), or Section 4975 of the Code, to a
trustee or other person acting on behalf of any such plan, or to any other
person using "plan assets" to effect such acquisition, unless the prospective
transferee of a Certificateholder desiring to transfer its Certificate provides
the Trustee with a certification as set forth in paragraph 6 of Exhibit I or an
Opinion of Counsel
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which establishes to the reasonable satisfaction of the Depositor and the
Trustee that the purchase and holding of a Class S or Class R Certificate by, on
behalf of or with "plan assets" of such plan is permissible under applicable
local law, would not constitute or result in a prohibited transaction under
Section 406 of ERISA or Section 4975 of the Code, and would not subject the
Depositor or the Trustee to any obligation or liability (including liabilities
under ERISA or Section 4975 of the Code) in addition to those undertaken in this
Agreement or any other liability. The Trustee shall require that such
prospective transferee certify to the Trustee in writing the facts establishing
that such transferee is not such a plan and is not acting on behalf of or using
"plan assets" of any such plan to effect such acquisition.
(g) Additional restrictions on transfers of the Class R Certificates to
Disqualified Organizations are set forth below:
(i) Each Person who has or who acquires any ownership interest
in a Class R Certificate shall be deemed by the acceptance or acquisition
of such ownership interest to have agreed to be bound by the following
provisions and to have irrevocably authorized the Trustee or its designee
under clause (iii)(A) below to deliver payments to a Person other than
such Person and to negotiate the terms of any mandatory sale under clause
(iii)(B) below and to execute all instruments of transfer and to do all
other things necessary in connection with any such sale. The rights of
each Person acquiring any ownership interest in a Class R Certificate are
expressly subject to the following provisions:
(A) Each Person holding or acquiring any ownership interest
in a Class R Certificate shall be other than a Disqualified
Organization and shall promptly notify the Trustee of any change or
impending change in its status as other than a Disqualified
Organization.
(B) In connection with any proposed transfer of any
ownership interest in a Class R Certificate to a U.S. Person, the
Trustee shall require delivery to it, and shall not register the
transfer of a Class R Certificate until its receipt of (1) an
affidavit and agreement (a "Transferee Affidavit and Agreement"
attached hereto as Exhibit J) from the proposed transferee, in form
and substance satisfactory to the Servicer, representing and
warranting, among other things, that it is not a non-U.S. Person,
that such transferee is other than a Disqualified Organization, that
it is not acquiring its ownership interest in a Class R Certificate
that is the subject of the proposed Transfer as a nominee, trustee or
agent for any Person who is not other than a Disqualified
Organization, that for so long as it retains its ownership interest
in a Class R Certificate, it will endeavor to remain other than a
Disqualified Organization, and that it has reviewed the provisions of
this Section 6.02(g) and agrees to be bound by them, and (2) a
certificate, attached hereto as Exhibit K, from the Holder wishing to
transfer a Class R Certificate, in form and substance satisfactory to
the Servicer, representing and warranting, among other things, that
no purpose of the proposed transfer is to allow such Holder to impede
the assessment or collection of tax.
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(C) Notwithstanding the delivery of a Transferee Affidavit
and Agreement by a proposed transferee under clause (B) above, if the
Trustee has actual knowledge that the proposed transferee is not
other than a Disqualified Organization, no transfer of an ownership
interest in a Class R Certificate to such proposed transferee shall
be effected.
(D) Each Person holding or acquiring any ownership interest
in a Class R Certificate agrees, by holding or acquiring such
ownership interest, (1) to require a Transferee Affidavit and
Agreement from the other Person to whom such Person attempts to
transfer its ownership interest and to provide a certificate to the
Trustee in the form attached hereto as Exhibit K, and (2) to obtain
the express written consent of the Servicer prior to any transfer of
such ownership interest, which consent may be withheld in the
Servicer's sole discretion.
(ii) The Trustee shall register the transfer of any Class R
Certificate only if it shall have received the Transferee Affidavit and
Agreement, a certificate of the Holder requesting such transfer in the
form attached hereto as Exhibit J and all of such other documents as shall
have been reasonably required by the Trustee as a condition to such
registration.
(iii)(A) If any Disqualified Organization shall become a Holder of a
Class R Certificate, then the last preceding Holder that was other than a
Disqualified Organization shall be restored, to the extent permitted by
law, to all rights and obligations as Holder thereof retroactive to the
date of registration of such transfer of such Class R Certificate. If any
non-U.S. Person shall become a Holder of a Class R Certificate, then the
last preceding Holder that is a U.S. Person shall be restored, to the
extent permitted by law, to all rights and obligations as Holder thereof
retroactive to the date of registration of the transfer to such non-U.S.
Person of such Class R Certificate. If a transfer of a Class R Certificate
is disregarded pursuant to the provisions of Treasury Regulations Section
1.860E-1 or Section 1.860G-3, then the last preceding Holder that was other
than a Disqualified Organization shall be restored, to the extent permitted
by law, to all rights and obligations as Holder thereof retroactive to the
date of registration of such transfer of such Class R Certificate. The
Trustee shall be under no liability to any Person for any registration of
transfer of a Class R Certificate that is in fact not permitted by this
Section 6.02(g) or for making any payments due on such Certificate to the
Holder thereof or for taking any other action with respect to such Holder
under the provisions of this Agreement.
(B) If any purported transferee of a Class R Certificate shall become
a Holder of a Class R Certificate in violation of the restrictions in this
Section 6.02(g) and to the extent that the retroactive restoration of the
rights of the Holder of such Class R Certificate as described in clause
(iii)(A) above shall be invalid, illegal or unenforceable, then the
Servicer shall have the right, without notice to the Holder or any prior
Holder of such Class R Certificate, to sell such Class R Certificate to a
purchaser selected by the Servicer on such terms as the Servicer may
choose. Such purported transferee shall promptly endorse and
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deliver a Class R Certificate in accordance with the instructions of the
Servicer. Such purchaser may be the Servicer itself or any affiliate of the
Servicer. The proceeds of such sale, net of the commissions (which may
include commissions payable to the Servicer or its affiliates), expenses
and taxes due, if any, shall be remitted by the Servicer to such purported
transferee. The terms and conditions of any sale under this clause (iii)(B)
shall be determined in the sole discretion of the Servicer, and the
Servicer shall not be liable to any Person having an ownership interest or
a purported ownership interest in a Class R Certificate as a result of its
exercise of such discretion.
(iv) The Servicer, on behalf of the Trustee, shall make
available, upon written request from the Trustee, all information
reasonably available to it that is necessary to compute any tax imposed
(A) as a result of the transfer of an ownership interest in a Class R
Certificate to any Person who is not other than a Disqualified
Organization, including the information regarding "excess inclusions" of
such Residual Certificate required to be provided to the Internal Revenue
Service and certain Persons as described in Treasury Regulation Section
1.860D-1(b)(5), and (B) as a result of any regulated investment company,
real estate investment trust, common trust fund, partnership, trust,
estate or organizations described in Section 1381 of the Code having as
among its record holders at any time any Person who is not other than a
Disqualified Organization. Reasonable compensation for providing such
information may be required by the Servicer from such Person.
(v) The provisions of this Section 6.02(g) set forth prior to
this Section (v) may be modified, added to or eliminated by the Servicer,
provided that there shall have been delivered to the Trustee the
following:
(A) written notification from each Rating Agency to the
effect that the modification, addition to or elimination of such
provisions will not cause such Rating Agency to downgrade its
then-current rating of the Certificates; and
(B) a certificate of the Servicer stating that the Servicer
has received an Opinion of Counsel, in form and substance
satisfactory to the Servicer, to the effect that such modification,
addition to or elimination of such provisions will not cause either
REMIC to cease to qualify as a REMIC and will not create a risk that
(i) the REMIC may be subject to an entity-level tax caused by the
transfer of a Class R Certificate to a Person which is not other than
a Disqualified Organization or (2) a Certificateholder or another
Person will be subject to a REMIC-related tax caused by the transfer
of applicable Class R Certificate to a Person which is not other than
a Disqualified Organization.
(vi) The following legend shall appear on each Class R
Certificate:
ANY RESALE, TRANSFER OR OTHER DISPOSITION OF THIS CERTIFICATE MAY BE
MADE ONLY IF THE PROPOSED TRANSFEREE PROVIDES A TRANSFER AFFIDAVIT TO
THE Servicer AND THE TRUSTEE THAT (1) SUCH TRANSFEREE IS NOT (A) THE
UNITED
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STATES, ANY STATE OR POLITICAL SUBDIVISION THEREOF, ANY FOREIGN
GOVERNMENT, ANY INTERNATIONAL ORGANIZATION, OR ANY AGENCY OR
INSTRUMENTALITY OF ANY OF THE FOREGOING, (B) ANY ORGANIZATION (OTHER
THAN A COOPERATIVE DESCRIBED IN SECTION 521 OF THE CODE) WHICH IS
EXEMPT FROM THE TAX IMPOSED BY CHAPTER 1 OF THE CODE UNLESS SUCH
ORGANIZATION IS SUBJECT TO THE TAX IMPOSED BY SECTION 511 OF THE CODE,
(C) ANY ORGANIZATION DESCRIBED IN SECTION 1381(a)(2)(C) OF THE CODE
(ANY SUCH PERSON DESCRIBED IN THE FOREGOING CLAUSES (A), (B), OR (C)
BEING HEREINAFTER REFERRED TO AS A "DISQUALIFIED ORGANIZATION"), OR
(D) AN AGENT OF A DISQUALIFIED ORGANIZATION AND (2) NO PURPOSE OF SUCH
TRANSFER IS TO ENABLE THE TRANSFEROR TO IMPEDE THE ASSESSMENT OR
COLLECTION OF TAX. SUCH AFFIDAVIT SHALL INCLUDE CERTAIN
REPRESENTATIONS AS TO THE FINANCIAL CONDITION OF THE PROPOSED
TRANSFEREE. NOTWITHSTANDING THE REGISTRATION IN THE CERTIFICATE
REGISTER OF ANY TRANSFER, SALE OR OTHER DISPOSITION OF THIS CLASS R
CERTIFICATE TO A DISQUALIFIED ORGANIZATION OR AN AGENT OF A
DISQUALIFIED ORGANIZATION, SUCH REGISTRATION SHALL BE DEEMED TO BE OF
NO LEGAL FORCE OR EFFECT WHATSOEVER AND SUCH PERSON SHALL NOT BE
DEEMED TO BE A CERTIFICATEHOLDER FOR ANY PURPOSE HEREUNDER, INCLUDING,
BUT NOT LIMITED TO, THE RECEIPT OF DISTRIBUTIONS ON THIS CERTIFICATE.
EACH HOLDER OF THE CLASS R CERTIFICATE BY ACCEPTANCE OF THIS
CERTIFICATE SHALL BE DEEMED TO HAVE CONSENTED TO THE PROVISIONS OF
THIS PARAGRAPH.
(h) The Trustee shall have no liability to the Trust Fund arising from a
transfer of any such Certificate in reliance upon a certification, ruling or
Opinion of Counsel described in this Section 6.02; PROVIDED, HOWEVER, that the
Trustee shall not register the transfer of any Class R Certificate if it has
actual knowledge that the proposed transferee does not meet the qualifications
of a permitted Holder of a Class R Certificate as set forth in this Section
6.02.
SECTION 6.03 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 Servicer, the Insurer
and the Trustee such security or indemnity as may be required by them to save
each of them harmless, then, in the absence of notice to the Trustee that such
Certificate has been acquired by a bona fide purchaser, the Trustee shall
execute, authenticate and deliver, in exchange for or in lieu of any such
mutilated, destroyed, lost or stolen Certificate, a new Certificate of like
tenor and interest in the Trust Fund. In connection with the issuance of any new
Certificate under this Section 6.03, 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 6.03 shall
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constitute complete and indefeasible evidence of ownership in the Trust Fund, as
if originally issued, whether or not the lost, stolen or destroyed Certificate
shall be found at any time.
SECTION 6.04 PERSONS DEEMED OWNERS.
Prior to due presentation of a Certificate for registration of
transfer, the Servicer, the Trustee, and any agent of the Servicer, the Insurer
or the Trustee may treat the person in whose name any Certificate is registered
as the owner of such Certificate for the purpose of receiving distributions as
provided in this Agreement and for all other purposes whatsoever, and neither
the Servicer, the Trustee, the Insurer nor any agent of the Servicer, the
Insurer or the Trustee shall be affected by any notice to the contrary.
SECTION 6.05 ACCESS TO LIST OF CERTIFICATEHOLDERS' NAMES AND ADDRESSES.
(a) If three or more Certificateholders (i) request in writing from the
Trustee a list of the names and addresses of Certificateholders, (ii) state that
such Certificateholders desire to communicate with other Certificateholders with
respect to their rights under this Agreement or under the Certificates and (iii)
provide a copy of the communication which such Certificateholders propose to
transmit, then the Trustee shall, within ten Business Days after the receipt of
such request, afford such Certificateholders access during normal business hours
to a current list of the Certificateholders. The expense of providing any such
information requested by a Certificateholder shall be borne by the
Certificateholders requesting such information and shall not be borne by the
Trustee. Every Certificateholder, by receiving and holding a Certificate, agrees
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.
(b) The Servicer, so long as it is the master servicer hereunder, shall
have unlimited access to a list of the names and addresses of the
Certificateholders which list shall be provided by the Trustee promptly upon the
request of the Servicer.
SECTION 6.06 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. ▇▇▇▇, Minnesota] where
Certificates may be surrendered for registration of transfer or exchange and
where notices and demands to or upon the Trustee in respect of the Certificates
and this Agreement may be served. The Trustee initially designates the office
described in Section 9.11 as its office for such purpose. The Trustee will give
prompt written notice to the Certificateholders of any change in the location of
any such office or agency.
SECTION 6.07 BOOK-ENTRY CERTIFICATES.
Notwithstanding the foregoing, the Class A Certificates, upon
original issuance, shall be issued in the form of one or more typewritten
Certificates representing the Book-Entry Certificates, to be delivered to DTC,
the initial Clearing Agency, by, or on behalf of, the Depositor. The Class A
Certificates shall initially be registered on the Certificate Register in the
name of [Cede & Co.], the nominee of DTC, as the initial Clearing Agency, and no
Beneficial
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Holder will receive a definitive certificate representing such Beneficial
Holder's interest in the Certificates, except as provided in Section 6.09.
Unless and until definitive, fully registered Certificates ("Definitive
Certificates") have been issued to the Beneficial Holders pursuant to Section
6.09:
(a) the provisions of this Section 6.07 shall be in full force and effect
with respect to the Class A Certificates;
(b) the Depositor and the Trustee may deal with the Clearing Agency for all
purposes with respect to the Class A Certificates (including the making of
distributions on such Certificates) as the sole Holder of such Certificates;
(c) to the extent that the provisions of this Section 6.07 conflict with
any other provisions of this Agreement, the provisions of this Section 6.07
shall control; and
(d) the rights of the Beneficial Holders of the Class A Certificates shall
be exercised only through the Clearing Agency and the Participants and shall be
limited to those established by law and agreements between such Beneficial
Holders and the Clearing Agency and/or the Participants. Pursuant to the
Depository Agreement, unless and until Definitive Certificates are issued
pursuant to Section 6.09, the initial Clearing Agency will make book-entry
transfers among the Participants and receive and transmit distributions of
principal and interest on the related Certificates to such Participants.
For purposes of any provision of this Agreement requiring or
permitting actions with the consent of, or at the direction of, Holders of the
Class A Certificates evidencing a specified percentage of the aggregate unpaid
principal amount of such Certificates, such direction or consent may be given by
the Clearing Agency at the direction of Beneficial Holders owning such
Certificates evidencing the requisite percentage of principal amount of such
Certificates. The Clearing Agency may take conflicting actions with respect to
the Class A Certificates to the extent that such actions are taken on behalf of
the Beneficial Holders.
SECTION 6.08 NOTICES TO CLEARING AGENCY.
Whenever notice or other communication to the Holders of Class A
Certificates is required under this Agreement, unless and until Definitive
Certificates shall have been issued to the related Certificateholders pursuant
to Section 6.09, the Trustee shall give all such notices and communications
specified herein to be given to Holders of the Class A Certificates to the
Clearing Agency which shall give such notices and communications to the related
Participants in accordance with its applicable rules, regulations and
procedures.
SECTION 6.09 DEFINITIVE CERTIFICATES.
If (a) the Depositor advises the Trustee in writing that the Clearing
Agency is no longer willing or able to properly discharge its responsibilities
under the Depository Agreement with respect to the Certificates and the Trustee
or the Depositor is unable to locate a qualified successor, (b) the Depositor,
at its option, advises the Trustee in writing that it elects to terminate the
book-entry system with respect to the Class A Certificates through the Clearing
Agency or (c) after the occurrence of an Event of Default, Holders of Class A
Certificates evidencing not
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less than 66% of the aggregate Certificate Principal Balance of the Class A
Certificates advise the Trustee in writing that the continuation of a book-entry
system with respect to the such Certificates through the Clearing Agency is no
longer in the best interests of the Holders of such Certificates with respect to
the Class A Certificates, the Trustee shall notify all Holders of such
Certificates of the occurrence of any such event and the availability of
Definitive Certificates. Upon surrender to the Trustee of the such Certificates
by the Clearing Agency, accompanied by registration instructions from the
Clearing Agency for registration, the Trustee shall authenticate and deliver the
Definitive Certificates. Neither the Depositor nor the Trustee shall be liable
for any delay in delivery of such instructions and may conclusively rely on, and
shall be protected in relying on, such instructions. Upon the issuance of
Definitive Certificates all references herein to obligations imposed upon or to
be performed by the Clearing Agency shall be deemed to be imposed upon and
performed by the Trustee, to the extent applicable with respect to such
Definitive Certificates, and the Trustee shall recognize the Holders of
Definitive Certificates as Certificateholders hereunder.
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ARTICLE VII
THE DEPOSITOR AND THE SERVICER
SECTION 7.01 LIABILITIES OF THE DEPOSITOR AND THE SERVICER.
The Depositor and the 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 7.02 MERGER OR CONSOLIDATION OF THE DEPOSITOR OR THE SERVICER.
The Depositor and the Servicer will each do or cause to be done all
things necessary to preserve and keep in full force and effect its existence,
rights and franchises (charter and statutory) and will each obtain and preserve
its qualification to do business as a foreign corporation in each jurisdiction
in which such qualification is or shall be necessary to protect the validity and
enforceability of this Agreement, or any of the Mortgage Loans and to perform
its respective duties under this Agreement.
Any Person into which the Depositor or the Servicer may be merged or
consolidated, or any Person resulting from any merger or consolidation to which
the Depositor or the Servicer shall be a party, or any Person succeeding to the
business of the Depositor or the Servicer, shall be the successor of the
Depositor or the Servicer, as the case may be, hereunder, without the execution
or filing of any paper or any further act on the part of any of the parties
hereto, anything herein to the contrary notwithstanding; PROVIDED, HOWEVER, that
the successor or surviving Person to the Servicer shall be qualified to sell
mortgage loans to, and to service mortgage loans on behalf of, FNMA or FHLMC.
Notwithstanding anything else in this Section 7.02 or in Section 7.04
hereof to the contrary, the Servicer may assign its rights and delegate its
duties and obligations under this Agreement (except for the obligation of the
Servicer or Seller to effectuate repurchases or substitutions of Mortgage Loans
hereunder, including pursuant to Section 2.01, 2.02 or 2.04 hereof, which shall
remain with [__________] hereunder); PROVIDED, HOWEVER, that the Servicer gives
the Depositor, the Insurer and the Trustee notice of such assignment; and
PROVIDED FURTHER, that such purchaser or transferee accepting such assignment
and delegation shall be an institution that is a FNMA and FHLMC approved
seller/servicer in good standing, which has a net worth of at least
$[15,000,000], and which is willing to service the Mortgage Loans and executes
and delivers to the Depositor and the Trustee an agreement accepting such
delegation and assignment, which contains an assumption by such Person of the
rights, powers, duties, responsibilities, obligations and liabilities of the
Servicer, with like effect as if originally named as a party to this Agreement;
and PROVIDED FURTHER, that each of the Rating Agencies acknowledge that its
rating of the Certificates in effect immediately prior to such assignment and
delegation or its rating of the risk undertaken by the Insurer with respect to
the Policy will not be qualified or reduced as a result of such assignment and
delegation. In the case of any such assignment and delegation, the Servicer
shall be released from its obligations under this Agreement (except as provided
above), except that the Servicer shall remain liable for all
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liabilities and obligations incurred by it as Servicer hereunder prior to the
satisfaction of the conditions to such assignment and delegation set forth in
the preceding sentence.
SECTION 7.03 LIMITATION ON LIABILITY OF THE DEPOSITOR, THE SERVICER AND OTHERS.
Neither the Depositor, the Servicer, any Sub-Servicer nor any of the
directors, officers, employees or agents of the Depositor, the Servicer or any
Sub-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 or the Servicer against any
breach of representations or warranties made by it herein or protect the
Depositor or the Servicer or any such person from any liability which would
otherwise be imposed by reasons of willful misfeasance, bad faith or negligence
in the performance of duties or by reason of reckless disregard of obligations
and duties hereunder. The Depositor, the Servicer, any Sub-Servicer and any
director, officer, employee or agent of the Depositor, the Servicer or any
Sub-Servicer may rely in good faith on any document of any kind prima facie
properly executed and submitted by any Person respecting any matters arising
hereunder. The Depositor, the Servicer, any Sub-Servicer and any director,
officer, employee or agent of the Depositor, the Servicer or any Sub-Servicer
shall be indemnified by the Trust Fund and held harmless against any loss,
liability or expense incurred in connection with any legal action relating to
this Agreement or the Certificates, other than any loss, liability or expense
incurred by reason of willful misfeasance, bad faith or negligence in the
performance of duties hereunder or by reason of reckless disregard of
obligations and duties hereunder, provided that the foregoing indemnification by
the Trust Fund shall be limited to amounts that would otherwise be distributable
with respect to the Class S Certificates. Neither the Depositor, the Servicer
nor any Sub-Servicer shall be under any obligation to appear in, prosecute or
defend any legal action that is not incidental to their respective duties
hereunder and which in its opinion may involve it in any expense or liability;
PROVIDED, HOWEVER, that either the Depositor, the Servicer or any Sub-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.
SECTION 7.04 SERVICER NOT TO RESIGN.
The Servicer shall not resign from the obligations and duties imposed
upon it hereunder except upon determination that such obligations and duties
hereunder are no longer permissible under applicable law. Any such determination
permitting the resignation of the Servicer under this Section 7.04 shall be
evidenced by an Opinion of Counsel to such effect delivered to the Trustee [and
the Insurer]. The Servicer shall give notice of any proposed resignation to the
Trustee, the Certificateholders, the Insurer and the Rating Agencies. No such
resignation by the Servicer shall become effective until the Trustee or a
successor servicer acceptable to the Insurer shall have assumed the Servicer's
responsibilities and obligations in accordance with Section 8.02 hereof.
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SECTION 7.05 ERRORS AND OMISSIONS INSURANCE; FIDELITY BONDS.
The Servicer shall, for so long as it acts as servicer under this
Agreement, obtain and maintain in force (a) a policy or policies of insurance
covering errors and omissions in the performance of its obligations as servicer
hereunder, and (b) a fidelity bond in respect of its officers, employees and
agents. Each such policy or policies and bond shall, together, comply with the
requirements from time to time of FNMA or FHLMC for persons performing servicing
for mortgage loans purchased by FNMA or FHLMC. In the event that any such policy
or bond ceases to be in effect, the Servicer shall obtain a comparable
replacement policy or bond from an insurer or issuer, meeting the requirements
set forth above as of the date of such replacement.
SECTION 7.06 SERVICER MAY OWN CERTIFICATES.
The Servicer in its individual or any other capacity may become the
owner or pledgee of Certificates with the same rights as it would have if it
were not the Servicer.
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ARTICLE VIII
DEFAULT
SECTION 8.01 EVENTS OF DEFAULT.
"Event of Default", wherever used herein, means any one of the
following events (whatever reason for such Event of Default and whether it shall
be voluntary or involuntary or be effected by operation of law or pursuant to
any judgment, decree or order of any court or any order, rule or regulation of
any administrative or governmental body):
(a) any failure by the Servicer to remit to the
Certificateholders, the Insurer or to the Trustee any payment other than a
Monthly Advance required to be made by the Servicer under the terms of
this Agreement, which failure shall continue unremedied for a period of
one Business Day after the date upon which written notice of such failure
shall have been given to the Servicer by the Trustee, the Insurer or the
Depositor or to the Servicer, the Insurer and the Trustee by the Holders
of Certificates having not less than 25% of the Voting Rights evidenced by
the Certificates; or
(b) any failure by the Servicer to observe or perform in any
material respect any other of the covenants or agreements on the part of
the Servicer contained in this Agreement (except as set forth in (c)
below) which failure (i) materially affects the rights of the
Certificateholders or the Insurer and (ii) shall continue unremedied for a
period of 60 days (except that such number of days shall be 15 in the case
of a failure to pay the premium for any Required Insurance Policy) after
the date on which written notice of such failure shall have been given to
the Servicer by the Trustee or the Depositor, or to the Servicer and the
Trustee by the Holders of Certificates evidencing not less than 25% of the
Voting Rights evidenced by the Certificates; or
(c) if a representation or warranty set forth in Section 2.03 or
2.04 hereof shall prove to be materially incorrect as of the time made in
any respect that materially and adversely affects interests of the
Certificateholders or the Insurer, and the circumstances or condition in
respect of which such representation or warranty was incorrect shall not
have been eliminated or cured, or the affected Mortgage Loan shall not
have been substituted for or repurchased, within 60 days after the date on
which written notice thereof shall have been given to the Servicer and
Seller by the Trustee for the benefit of the Certificateholders [and the
Insurer] or by the Depositor; or
(d) a decree or order of a court or agency or supervisory
authority having jurisdiction in the premises for the appointment of a
conservator or receiver or liquidator in any insolvency, readjustment of
debt, marshalling of assets and liabilities or similar proceedings, or for
the winding-up or liquidation of its affairs, shall have been entered
against the Servicer and such decree or order shall have remained in force
undischarged or unstayed for a period of 60 days; or
(e) the Servicer shall consent to the appointment of a
conservator or receiver or liquidator in any insolvency, readjustment of
debt, marshalling of assets and
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liabilities or similar proceedings of or relating to the Servicer or all or
substantially all of the property of the Servicer; or
(f) the Servicer shall admit in writing its inability to pay its
debts generally as they become due, file a petition to take advantage of,
or commence a voluntary case under, any applicable insolvency or
reorganization statute, make an assignment for the benefit of its
creditors, or voluntarily suspend payment of its obligations; or
(g) either Rating Agency shall lower or withdraw the outstanding
rating of the Certificates because the existing or prospective financial
condition or mortgage loan servicing capability of the Servicer is
insufficient to maintain such outstanding rating; or
(h) any failure of the Servicer to make any Monthly Advance in
the manner and at the time required to be made from its own funds pursuant
to this Agreement and after receipt of notice from the Trustee pursuant to
Section 5.04, which failure continues unremedied after 5 p.m., [St. ▇▇▇▇,
Minnesota] time, on the Business Day immediately preceding the
Distribution Date; or
(i) a Servicer Trigger Event occurs.
If an Event of Default due to the actions or inaction of the Servicer
described in clauses (a) through (g) or (i) of this Section shall occur, then,
and in each and every such case, so long as such Event of Default shall not have
been remedied, the Trustee shall at the direction of the Insurer (unless an
Insurer Default is continuing) or, if so directed by the Holders of Certificates
evidencing not less than 25% of the Voting Rights evidenced by the Certificates,
by notice in writing to the Servicer (with the prior written consent of the
Insurer and with a copy to the Rating Agencies), terminate all of the rights and
obligations of the Servicer under this Agreement (other than rights to
reimbursement for Monthly Advances or other advances previously made, as
provided in Section 3.09) PROVIDED, HOWEVER, that unless an Insurer Default is
continuing the successor to the Servicer appointed pursuant to Section 7.02
shall be acceptable to the Insurer and shall have accepted the duties of
Servicer effective upon the resignation of the Servicer.
If an Event of Default described in clause (h) shall occur, the
Trustee with the consent of the Insurer (which shall not be unreasonably
withheld) shall, prior to the next Distribution Date, terminate the rights and
obligations of the Servicer hereunder and succeed to the rights and obligations
of the Servicer hereunder pursuant to Section 8.02, including the obligation to
make Monthly Advances on such Distribution Date pursuant to the terms hereof.
SECTION 8.02 TRUSTEE TO ACT; APPOINTMENT OF SUCCESSOR.
On and after the time the Servicer receives a notice of termination
pursuant to Section 8.01 hereof or resigns pursuant to Section 7.04 hereof,
subject to the provisions of Section 3.06 hereof, the Trustee shall be the
successor in all respects to the Servicer in its capacity as servicer under this
Agreement and with respect to the transactions set forth or provided for herein
and shall be subject to all the responsibilities, duties and liabilities
relating
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thereto placed on the Servicer by the terms and provisions hereof, provided that
the Trustee shall not be deemed to have made any representation or warranty as
to any Mortgage Loan made by the Servicer and shall not effect any repurchases
or substitutions of any Mortgage Loan. As compensation therefor, the Trustee
shall be entitled to all funds relating to the Mortgage Loans that the Servicer
would have been entitled to charge to the related Custodial Account if the
Servicer had continued to act hereunder (except that the terminated Servicer
shall retain the right to be reimbursed for advances (including, without
limitation, Monthly Advances) theretofore made by the Servicer with respect to
which it would be entitled to be reimbursed if it had not been so terminated as
Servicer). Notwithstanding the foregoing, if the Trustee has become the
successor to the Servicer in accordance with this Section 8.02, the Insurer may,
and if the Insurer fails to the Trustee may, if it shall be unwilling to so act,
or shall, if it is unable to so act (exclusive of the obligations with respect
to Monthly Advances), appoint, or petition a court of competent jurisdiction to
appoint, any established mortgage loan servicing institution acceptable to the
Insurer, the appointment of which does not adversely affect the then current
rating of the Certificates, as the successor to the Servicer hereunder in the
assumption of all or any part of the responsibilities, duties or liabilities of
the Servicer, provided that such successor to the Servicer shall not be deemed
to have made any representation or warranty as to any Mortgage Loan made by the
Servicer. Pending appointment of a successor to the Servicer hereunder, the
Trustee, unless the Trustee is prohibited by law from so acting, shall act in
such capacity as provided herein. In connection with such appointment and
assumption, the Trustee may make such arrangements for the compensation of such
successor out of payments on Mortgage Loans as it and such successor shall
agree; PROVIDED, HOWEVER, that no such compensation shall be in excess of that
permitted the Servicer hereunder. The Trustee and such successor shall take such
action, consistent with this Agreement, as shall be necessary to effectuate any
such succession. Neither the Trustee nor any other successor servicer shall be
deemed to be in default hereunder by reason of any failure to make, or any delay
in making, any distribution hereunder or any portion thereof caused by the
failure of the Servicer to deliver, or any delay in delivering, cash, documents
or records to it.
The Servicer that has been terminated shall, at the request of the
Trustee but at the expense of such Servicer, deliver to the assuming party all
documents and records relating to each Sub-Servicing Agreement and the related
Mortgage Loans and an accounting of amounts collected and held by it and
otherwise use its best efforts to effect the orderly and efficient transfer of
each Sub-Servicing Agreement to the assuming party.
The Servicer shall cooperate with the Trustee and any successor
servicer in effecting the termination of the Servicer's responsibilities and
rights 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 the Servicer to the Custodial Account or thereafter received with respect to
the Mortgage Loans.
Neither the Trustee nor any other successor servicer shall be deemed
to be in default hereunder by reason of any failure to make, or any delay in
making, any distribution hereunder or any portion thereof caused by (a) the
failure of the Servicer to (i) deliver, or any delay in delivering, cash,
documents or records to it, (ii) cooperate as required by this Agreement, or
(iii) deliver the Mortgage Loan to the Trustee as required by this Agreement, or
(b) restrictions imposed by any regulatory authority having jurisdiction over
the Servicer.
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Any successor to the Servicer as servicer 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 Section 7.05 hereof.
SECTION 8.03 NOTIFICATION TO CERTIFICATEHOLDERS.
(a) Upon any termination or appointment of a successor to the Servicer, the
Trustee shall give prompt written notice thereof to the Insurer, the
Certificateholders at their respective addresses appearing in the Certificate
Register and to the Rating Agencies.
(b) Within 2 Business Days after the occurrence of any Event of Default, the
Trustee shall transmit by mail to the Insurer and all Certificateholders and the
Rating Agencies notice of each such Event of Default hereunder known to the
Trustee, unless such Event of Default shall have been cured or waived.
SECTION 8.04 WAIVER OF EVENTS OF DEFAULT.
The Insurer or the Holders representing at least 66% of the Voting
Rights of Certificates affected by a default or Event of Default hereunder may
waive any default or Event of Default, with the written consent of the Insurer,
which consent shall not be unreasonably withheld; PROVIDED, HOWEVER, that (a) a
default or Event of Default under clause (i) of Section 8.01 may be waived, with
the written consent of the Insurer, only by all of the Holders of Certificates
affected by such default or Event of Default (which Voting Rights of the Class A
Certificateholders may be exercised by the Insurer without the consent of such
Holders and may only be exercised by such Holders with the prior written consent
of the Insurer so long as there does not exist a failure by the Insurer to make
a required payment under the Policy) and (b) no waiver pursuant to this Section
8.04 shall affect the Holders of Certificates in the manner set forth in Section
11.01(b)(i), (ii) or (iii). Upon any such waiver of a default or Event of
Default by the Insurer or the Holders representing the requisite percentage of
Voting Rights of Certificates affected by such default or Event of Default with
the consent of the Insurer, which consent shall not be unreasonably withheld,
such default or Event of Default shall cease to exist and shall be deemed to
have been remedied for every purpose hereunder. No such waiver shall extend to
any subsequent or other default or Event of Default or impair any right
consequent thereon except to the extent expressly so waived.
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ARTICLE IX
CONCERNING THE TRUSTEE
SECTION 9.01 DUTIES OF TRUSTEE.
The Trustee, prior to the occurrence of an Event of Default and after
the curing of all Events of Default that may have occurred, undertakes with
respect to the Trust Fund to perform such duties and only such duties as are
specifically set forth in this Agreement. In case an Event of Default has
occurred and remains uncured, the Trustee shall exercise such of the rights and
powers vested in it by this Agreement, and use the same degree of care and skill
in their exercise, as a prudent person would exercise or use under the
circumstances in the conduct of such person's own affairs. Any permissive right
of the Trustee set forth in this Agreement shall not be construed as a duty.
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 conform
to the requirements of this Agreement. The Trustee shall have no duty to
recompute, recalculate or verify the accuracy of any resolution, certificate,
statement, opinion, report, document, order or other instrument so furnished to
the Trustee.
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 misconduct, its negligent failure to perform its obligations
in compliance with this Agreement, or any liability which would be imposed by
reason of its willful misfeasance or bad faith; PROVIDED, HOWEVER, that:
(a) prior to the occurrence of an Event of Default, and after
the curing of all such Events of Default that may have occurred, the
duties and obligations of the Trustee shall be determined solely by the
express provisions of this Agreement, the Trustee shall not be personally
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 reasonably believed in good faith to be genuine
and to have been duly executed by the proper authorities respecting any
matters arising hereunder;
(b) the Trustee shall not be personally liable for an error of
judgment made in good faith by a Responsible Officer or Responsible
Officers of the Trustee, unless the Trustee was negligent or acted in bad
faith or with willful misfeasance;
(c) the Trustee shall not be personally liable with respect to
any action taken, suffered or omitted to be taken by it in good faith in
accordance with the direction of Holders of Certificates evidencing not
less than 25% of the Voting Rights allocated to
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each Class 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; and
(d) no provision of this Agreement shall require the Trustee to
expend or risk its own funds or otherwise incur any financial liability in
the performance of any of its duties hereunder or in the exercise of any
of its rights or powers if it shall have reasonable grounds for believing
that repayment of such funds or adequate indemnity against such risk or
liability is not reasonably assured to it.
Except with respect to an Event of Default described in clause (a) of
Section 8.01, the Trustee shall not be deemed to have knowledge of any Event of
Default or event which, with notice or lapse of time, or both, would become an
Event of Default, unless a Responsible Officer of the Trustee shall have
received written notice thereof from the Servicer, the Depositor or a
Certificateholder, or a Responsible Officer of the Trustee has actual notice
thereof, and in the absence of such notice no provision hereof requiring the
taking of any action or the assumption of any duties or responsibility by the
Trustee following the occurrence of any Event of Default or event which, with
notice or lapse of time or both, would become an Event of Default, shall be
effective as to the Trustee.
The Trustee shall have no duty hereunder with respect to any
complaint, claim, demand, notice or other document it may receive or which may
be alleged to have been delivered to or served upon it by the parties as a
consequence of the assignment of any Mortgage Loan hereunder; provided, however,
that the Trustee shall use its best efforts to remit to the Servicer upon
receipt of any such complaint, claim, demand, notice or other document (i) which
is delivered to the Corporate Trust Office of the Trustee, (ii) of which a
Responsible Officer has actual knowledge, and (iii) which contains information
sufficient to permit the Trustee to make a determination that the real property
to which such document relates is a Mortgaged Property.
SECTION 9.02 CERTAIN MATTERS AFFECTING THE TRUSTEE.
(a) Except as otherwise provided in Section 9.01:
(i) the Trustee may request and rely upon and shall be protected
in acting or refraining from acting upon any resolution, Officers'
Certificate, certificate of auditors or any other certificate, statement,
instrument, opinion, report, notice, request, consent, order, appraisal,
bond or other paper or document believed by it to be genuine and to have
been signed or presented by the proper party or parties;
(ii) the Trustee may consult with counsel and any Opinion of
Counsel shall be full and complete authorization and protection in respect
of any action taken or suffered or omitted by it hereunder in good faith
and in accordance with such Opinion of Counsel;
(iii)the Trustee shall be under no obligation to exercise any of
the trusts or powers vested in it by this Agreement or to institute,
conduct or defend any litigation hereunder or in relation hereto at the
request, order or direction of any of the Certificateholders, pursuant to
the provisions of this Agreement, unless such
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Certificateholders shall have offered to the Trustee reasonable security or
indemnity against the costs, expenses and liabilities which may be incurred
therein or thereby; nothing contained herein shall, however, relieve the
Trustee of the obligation, upon the occurrence of an Event of Default
(which has not been cured or waived), to exercise such of the rights and
powers vested in it by this Agreement, and to 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;
(iv) the Trustee shall not be personally liable for any action
taken, suffered or omitted by it in good faith and believed by it to be
authorized or within the discretion or rights or powers conferred upon it
by this Agreement;
(v) prior to the occurrence of an Event of Default hereunder and
after the curing of all Events of Default that may have occurred, 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; PROVIDED, HOWEVER, that if the payment
within a reasonable time to the Trustee of the costs, expenses or
liabilities likely to be incurred by it in the making of such
investigation is, in the opinion of the Trustee, not reasonably assured to
the Trustee by the security afforded to it by the terms of this Agreement,
the Trustee may require reasonable indemnity against such expense or
liability as a condition to taking any such action; the reasonable expense
of every such investigation shall be paid by the Servicer in the event
that such investigation relates to an Event of Default by the Servicer, if
an Event of Default by the Servicer shall have occurred and is continuing,
and otherwise by the Certificateholders requesting the investigation;
(vi) the Trustee may execute any of the trusts or powers
hereunder or perform any duties hereunder either directly or by or through
agents or attorneys;
(vii)the Trustee shall not be required to expend its own funds
or otherwise incur any financial liability in the performance of any of
its duties hereunder if it shall have reasonable grounds for believing
that repayment of such funds or adequate indemnity against such liability
is not assured to it; and
(viii) the Trustee shall not be liable for any loss on any
investment of funds pursuant to this Agreement.
(b) All rights of action under this Agreement or under any of the Certificates,
enforceable by the Trustee, may be enforced by it without the possession of any
of the Certificates, or the production thereof at the trial or other proceeding
relating thereto, and any such suit, action or proceeding instituted by the
Trustee shall be brought in its name for the benefit of all the Holders of such
Certificates, subject to the provisions of this Agreement.
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SECTION 9.03 TRUSTEE NOT LIABLE FOR CERTIFICATES OR MORTGAGE LOANS.
The recitals contained herein shall be taken as the statements of the
Depositor or the Servicer, 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, the Certificates or of any
Mortgage Loan or related document. 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 the Servicer in respect of the Mortgage Loans or deposited in or
withdrawn from the Certificate Account by the Depositor or the Servicer.
SECTION 9.04 TRUSTEE MAY OWN CERTIFICATES.
The Trustee in its individual or any other capacity may become the
owner or pledgee of Certificates with the same rights as it would have if it
were not the Trustee.
SECTION 9.05 TRUSTEE'S FEES AND EXPENSES.
The Trustee shall pay to itself on each Distribution Date from
amounts on deposit in the Certificate Account, an amount equal to the Trustee
Fee in accordance with Section 4.02(b). Any amount payable to the Trustee on
such Distribution Date in excess of such amount on deposit will be paid by the
Servicer from its own funds. Any payment hereunder made by the Servicer to the
Trustee, other than any amount to be paid from the Certificate Account pursuant
to this Section 9.05, shall be paid from the Servicer's own funds, without
reimbursement from the Trust Fund therefor.
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 (a) incurred in connection with any legal action
relating to this Agreement or the Certificates, or the performance of any of the
Trustee's duties hereunder, other than any loss, liability or expense incurred
by reason of willful misfeasance, bad faith or negligence in the performance of
any of the Trustee's duties hereunder or by reason of reckless disregard of the
Trustee's obligations and duties hereunder and (b) resulting from the exercise
of any power of attorney granted by the Trustee in accordance with this
Agreement. Such indemnity shall survive the termination of this Agreement or the
resignation or removal of the Trustee hereunder.
SECTION 9.06 ELIGIBILITY REQUIREMENTS FOR TRUSTEE.
The Trustee hereunder shall at all times be a corporation or
association having its principal office in a state and city acceptable to the
Depositor [and the Insurer] and organized and doing business under the laws of
such state or the United States of America, authorized under such laws to
exercise corporate trust powers, having ratings on its long-term debt
obligations at the time of such appointment in at least the third highest rating
category by both Moody's and Standard & Poor's or such lower ratings as will not
cause Moody's or Standard & Poor's to lower their then-current ratings of the
Class A Certificates, acceptable to the Insurer, having a combined capital and
surplus of at least $[50,000,000] and subject to supervision or examination by
federal or state authority. If such corporation or association publishes reports
of condition at least annually, pursuant to law or to the requirements of the
aforesaid supervising or examining authority, then for the purposes of this
Section 9.06 the combined capital and surplus
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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 9.06, the Trustee shall resign immediately in the
manner and with the effect specified in Section 9.07 hereof.
SECTION 9.07 RESIGNATION AND REMOVAL OF TRUSTEE.
The Trustee may at any time resign and be discharged from the trusts
hereby created by (a) giving written notice of resignation to the Depositor [and
the Insurer] and by mailing notice of resignation by first class mail, postage
prepaid, to the Certificateholders at their addresses appearing on the
Certificate Register, and to the Rating Agencies, not less than 60 days before
the date specified in such notice when, subject to Section 9.08, such
resignation is to take effect, and (b) acceptance by a successor trustee
acceptable to the Insurer in accordance with Section 9.08 meeting the
qualifications set forth in Section 9.06. If no successor trustee shall have
been so appointed and have accepted appointment within 30 days after the giving
of such notice of resignation, the resigning Trustee may petition any court of
competent jurisdiction for the appointment of a successor trustee.
If at any time the Trustee shall cease to be eligible in accordance
with the provisions of Section 9.06 hereof and shall fail to resign after
written request thereto by the Depositor, or if at any time the Trustee shall
become incapable of acting, or shall be adjudged a 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 if the
Trustee breaches any of its obligations or representations hereunder, then the
Insurer or, with the prior written consent of the Insurer, the Depositor may
remove the Trustee and appoint a successor trustee by written instrument, in
duplicate, one copy of which instrument shall be delivered to the Trustee and
one copy to the successor trustee. The Trustee may also be removed at any time
by the Holders of Certificates evidencing not less than 50% of the Voting Rights
evidenced by the Certificates with the prior written consent of the Insurer.
Notice of any removal of the Trustee and acceptance of appointment by the
successor trustee shall be given to the Rating Agencies by the Servicer.
Any resignation or removal of the Trustee and appointment of a
successor trustee pursuant to any of the provisions of this Section 9.07 shall
become effective upon acceptance of appointment by the successor trustee as
provided in Section 9.08 hereof.
SECTION 9.08 SUCCESSOR TRUSTEE.
Any successor trustee appointed as provided in Section 9.07 hereof
shall execute, acknowledge and deliver to the Depositor and to its predecessor
trustee an instrument accepting such appointment hereunder and thereupon the
resignation or removal 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 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.
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No successor trustee shall accept appointment as provided in this
Section 9.08 unless at the time of such acceptance such successor trustee shall
be eligible under the provisions of Section 9.06 hereof and its appointment is
acceptable to the Insurer and shall not adversely affect the then current rating
of the Certificates.
Upon acceptance of appointment by a successor trustee as provided in
this Section 9.08, the Servicer shall mail notice of the succession of such
trustee hereunder to all Holders of Certificates at their addresses as shown in
the Certificate Register. If the Servicer fails to mail such notice within ten
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 9.09 MERGER OR CONSOLIDATION OF TRUSTEE.
Any Person into which the Trustee may be merged or converted or with
which it may be consolidated or any Person resulting from any merger, conversion
or consolidation to which the Trustee shall be a party, or any Person succeeding
to the business of the Trustee, shall be the successor of the Trustee hereunder,
provided that such Person shall be eligible under the provisions of Section 9.06
hereof without the execution or filing of any paper or further act on the part
of any of the parties hereto, anything herein to the contrary notwithstanding.
SECTION 9.10 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 Servicer and the Trustee acting jointly shall have the
power and shall execute and deliver all instruments to appoint one or more
Persons approved by the Trustee to act as co-trustee or co-trustees jointly with
the Trustee, or separate trustee or separate trustees, of all or any part of the
Trust Fund, and to vest in such Person or Persons, in such capacity and for the
benefit of the applicable Certificateholders, such title to the Trust Fund, or
any part thereof, and, subject to the other provisions of this Section 9.10,
such powers, duties, obligations, rights and trusts as the Servicer and the
Trustee may consider necessary or desirable. If the Servicer shall not have
joined in such appointment within fifteen 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 9.06 and no notice to
Certificateholders of the appointment of any co-trustee or separate trustee
shall be required under Section 9.08.
Every separate trustee and co-trustee shall, to the extent permitted
by law, be appointed and act subject to the following provisions and conditions:
(a) all rights, powers, duties and obligations conferred or imposed upon
the Trustee, except for any obligation of the Trustee under this Agreement to
advance funds on behalf of the 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),
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except to the extent that under any law of any jurisdiction in which any
particular act or acts are to be performed by the Trustee (whether as Trustee
hereunder or as successor to the Servicer), the Trustee shall be incompetent or
unqualified to perform such act or acts, in which event such rights, powers,
duties and obligations (including the holding of title to the Trust Fund or any
portion thereof in any such jurisdiction) shall be exercised and performed
singly by such separate trustee or co-trustee, but solely at the direction of
the Trustee;
(b) no trustee hereunder shall be held personally liable by reason of any
act or omission of any other trustee hereunder; and
(c) the Servicer and the Trustee acting jointly may at any time accept the
resignation of or remove any 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 then separate trustees and co-trustees,
as effectively as if given to each of them. Every instrument appointing any
separate trustee or co-trustee shall refer to this Agreement and the conditions
of this Article IX. 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
Servicer and the Depositor.
Any separate trustee or co-trustee may, at any time, constitute the
Trustee its agent or attorney-in-fact, with full power and authority, to the
extent not prohibited by law, to do any lawful act under or in respect of this
Agreement on its behalf and in its name. If any separate trustee or co-trustee
shall die, become incapable of acting, resign or be removed, all of its estates,
properties, rights, remedies 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 9.11 OFFICE OF THE TRUSTEE.
The office of the Trustee for purposes of receipt of notices and demands is
[_____________________________________], Attn: Structured Finance/[__________]
200_-____.
SECTION 9.12 TAX RETURNS.
The Servicer, upon request, will furnish the Trustee with all such
information in the possession of the Servicer as may be reasonably required in
connection with the preparation by the Trustee of all tax and information
returns of the Trust Fund, and the Trustee shall sign such returns. The Servicer
shall indemnify the Trustee for all reasonable costs, including legal fees,
related to errors in such tax returns due to errors in information provided by
the Servicer.
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ARTICLE X
TERMINATION
SECTION 10.01 TERMINATION UPON LIQUIDATION OR REPURCHASE OF ALL MORTGAGE LOANS.
The obligations and responsibilities of the Servicer, the Depositor
and the Trustee created hereby with respect to the Trust Fund created hereby
shall terminate upon the earlier of:
(a) the repurchase by the Servicer, at its election, of all
Mortgage Loans and all property acquired in respect of any Mortgage Loan
remaining in the Trust Fund, which repurchase right the Servicer may
exercise at its sole and exclusive election as of any Distribution Date
(such applicable Distribution Date being herein referred to as the
"Optional Termination Date") on or after the date on which the aggregate
Principal Balance of the Mortgage Loans at the time of the repurchase is
less than 5% of the aggregate Principal Balance of the Mortgage Loans as
of the Cut-off Date; and
(b) the later of (i) twelve months after the maturity of the
last Mortgage Loan remaining in the Trust Fund, (ii) the 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 (iii) the
distribution to Certificateholders of all amounts required to be
distributed to them pursuant to this Agreement.
In no event shall the trust created hereby continue beyond the expiration of 21
years from the death of the last survivor of the descendants of ▇▇. ▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇▇, former Ambassador of the United States to Great Britain, living on the
date of execution of this Agreement.
The Mortgage Loan Repurchase Price for any such Optional Termination
of the Trust Fund shall be equal to the aggregate Principal Balance of the
Mortgage Loans as of the date of repurchase, together with accrued and unpaid
interest thereon from the date to which such interest was paid or advanced at
the sum of the applicable Net Mortgage Rate and the Trustee Fee Rate with
respect to each Mortgage Loan through the last day of the month of such
repurchase, plus any sums on account of such Mortgage Loan that have been
advanced by the Servicer and are reimbursable to the Servicer hereunder
(including the Principal Balance of each Mortgage Loan that was secured by any
REO Property) plus any amounts due the Insurer and the Insurance Agreement;
PROVIDED, HOWEVER, that if the Servicer shall so choose, the Servicer may remit
the Mortgage Loan Repurchase Price net of advances that would otherwise be
reimbursable to the Servicer and the Servicer would have no further entitlement
to reimbursement for such advances. The Trustee shall give notice to the Insurer
and the Rating Agencies of the Servicer's election to purchase the Mortgage
Loans pursuant to this Section 10.01 and of the Optional Termination Date. No
purchase pursuant to clause (a) is permitted if it would result in a draw on the
Policy unless the Insurer consents.
SECTION 10.02 PROCEDURE UPON OPTIONAL TERMINATION.
(a) In case of any Optional Termination pursuant to Section 10.01, the
Servicer shall, at least twenty days prior to the date notice is to be mailed to
the affected
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Certificateholders notify the Trustee [and the Insurer] of such Optional
Termination Date and of the applicable repurchase price of the Mortgage Loans to
be repurchased.
(b) Any repurchase of the Mortgage Loans by the Servicer shall be made on
an Optional Termination Date by deposit of the applicable repurchase price into
the Certificate Account, as applicable, before the Distribution Date on which
such repurchase is effected. Upon receipt by the Trustee of an Officers'
Certificate of the Servicer certifying as to the deposit of such repurchase
price into the Certificate Account, the Trustee and each co-trustee and separate
trustee, if any, then acting as such under this Agreement, shall, upon request
and at the expense of the Servicer, execute and deliver all such instruments of
transfer or assignment, in each case without recourse, as shall be reasonably
requested by the Servicer, to vest title in the Servicer in the Mortgage Loans
so repurchased and shall transfer or deliver to the Servicer the repurchased
Mortgage Loans. Any distributions on the Mortgage Loans received by the Trustee
subsequent to (or with respect to any period subsequent to) the Optional
Termination Date shall be promptly remitted by it to the Servicer.
(c) Notice of the Distribution Date on which the Servicer anticipates that
the final distribution shall be made (whether upon Optional Termination or
otherwise), shall be given promptly by the Servicer to the Trustee [and the
Insurer] and by the Trustee by first class mail to Holders of the affected
Certificates. Such notice shall be mailed no earlier than the 15th day and not
later than the 10th day preceding the Optional Termination Date or date of final
distribution, as the case may be. Such notice shall specify (i) the Distribution
Date upon which final distribution on the affected Certificates will be made
upon presentation and surrender of such Certificates at the office or agency
therein designated, (ii) the amount of such final distribution and (iii) that
the Record Date otherwise applicable to such Distribution Date is not
applicable, such distribution being made only upon presentation and surrender of
such Certificates at the office or agency maintained for such purposes (the
address of which shall be set forth in such notice).
(d) In the event that any 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 such 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 Certificates shall not have been
surrendered for cancellation, the Trustee may take appropriate steps, or may
appoint an agent to take appropriate steps, to contact the remaining
Certificateholders concerning surrender of their Certificates, and the cost
thereof shall be paid out of the funds and other assets which remain subject to
the Trust Fund.
SECTION 10.03 ADDITIONAL TERMINATION REQUIREMENTS.
(a) In the event the Servicer exercises its purchase option pursuant to
Section 10.01, REMIC I or REMIC II, as the case may be, shall be terminated in
accordance with the following additional requirements, unless the Trustee has
received an Opinion of Counsel to the effect that the failure of REMIC I or
REMIC II, as the case may be, to comply with the requirements of this Section
will not (i) result in the imposition of taxes on a "prohibited transaction" of
the REMIC, as described in Section 860F of the Code, or (ii) cause REMIC I or
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REMIC II, as the case may be, to fail to qualify as a REMIC at any time that any
Certificates are outstanding:
(A) within 90 days prior to the final Distribution Date set
forth in the notice given by the Servicer under Section 10.02, the Holder
of the Class R Certificates shall adopt a plan of complete liquidation of
the REMIC; and
(B) at or after the time of adoption of any such plan of
complete liquidation for the REMIC at or prior to the final Distribution
Date, the Trustee shall sell all of the assets of the Trust Fund to the
Depositor for cash; PROVIDED, HOWEVER, that in the event that a calendar
quarter ends after the time of adoption of such a plan of complete
liquidation but prior to the final Distribution Date, the Trustee shall
not sell any of the assets of the Trust Fund prior to the close of that
calendar quarter.
(b) By its acceptance of a Class R Certificate, the Holder thereof hereby
agrees to adopt such a plan of complete liquidation and to take such other
action in connection therewith as may be reasonably required to liquidate and
otherwise terminate REMIC I or REMIC II.
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ARTICLE XI
MISCELLANEOUS PROVISIONS
SECTION 11.01 AMENDMENT.
(a) This Agreement may be amended from time to time by the Depositor and
the Trustee, with the consent of the Insurer but without the consent of any of
the Certificateholders,
(i) to cure any ambiguity,
(ii) to correct or supplement any provisions herein that may be
inconsistent with any other provisions herein,
(iii)to modify, eliminate or add to any of its provisions to such extent
as shall be necessary or desirable to maintain the qualification of
the Trust Fund as two separate REMICs at all times that any
Certificate is outstanding or to avoid or minimize the risk of the
imposition of any tax on the Trust Fund pursuant to the Code that
would be a claim against the Trust Fund, provided that the Trustee has
received an Opinion of Counsel to the effect that (A) such action is
necessary or desirable to maintain such qualification or to avoid or
minimize the risk of the imposition of any such tax and (B) such
action will not adversely affect the status of the Trust Fund as two
separate REMICs or adversely affect in any material respect the
interests of any Certificateholder, or
(iv) to make any other provisions with respect to matters or questions
arising under this Agreement that are not materially inconsistent with
the provisions of this Agreement, provided that such action shall not
adversely affect in any material respect the interests of any
Certificateholder or cause an Adverse REMIC Event.
(b) This Agreement may be amended from time to time by the Depositor, the
Servicer and the Trustee with the consent of the Insurer and the Holders of
Certificates evidencing, in the aggregate, not less than 66-2/3% of the Voting
Rights of all the Certificates 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 the Certificates;
PROVIDED, HOWEVER, that no such amendment may (i) reduce in any manner the
amount of, delay the timing of or change the manner in which payments received
on or with respect to Mortgage Loans are required to be distributed with respect
to any Certificate without the consent of the Holder of such Certificate, (ii)
adversely affect in any material respect the interests of the Holders of a Class
of Certificates in a manner other than as set forth in (i) above without the
consent of the Holders of Certificates evidencing not less than 66-2/3% of the
Voting Rights of such Class, (iii) reduce the aforesaid percentages of Voting
Rights, the holders of which are required to consent to any such amendment
without the consent of 100% of the Holders of Certificates of the Class affected
thereby, (iv) change the percentage of the Principal Balance of the Mortgage
Loans specified in Section 10.01(a) relating to optional termination of the
Trust Fund or (v) modify the provisions of this Section 11.01.
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It shall not be necessary for the consent of Certificateholders under
this Section to approve the particular form of any proposed amendment, but it
shall be sufficient if such consent shall approve the substance thereof. The
manner of obtaining such consents and of evidencing the authorization of the
execution thereof by Certificateholders shall be subject to such reasonable
regulations as the Trustee may prescribe.
(c) Promptly after the execution of any amendment to this Agreement, the
Trustee shall furnish written notification of the substance of such amendment to
each Certificateholder and the Rating Agencies.
SECTION 11.02 RECORDATION OF AGREEMENT; COUNTERPARTS.
(a) 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 Mortgaged Properties are situated, and
in any other appropriate public recording office or elsewhere. Such recordation,
if any, shall be effected by the Servicer at its expense on direction of the
Insurer or the Trustee, but only upon direction of the Insurer or the Trustee
accompanied by an Opinion of Counsel to the effect that such recordation
materially and beneficially affects the interests of the Certificateholders of
the Trust Fund.
(b) 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 11.03 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 11.04 INTENTION OF PARTIES.
(a) It is the express intent of the Depositor, the Seller and the Trustee
that the conveyance by the Seller to the Depositor pursuant to the Mortgage Loan
Purchase Agreement and the conveyance by the Depositor to the Trustee as
provided for in Section 2.01 of each of the Seller's and Depositor's right,
title and interest in and to the Mortgage Loans be, and be construed as, an
absolute sale and assignment by the Seller to the Depositor and by the Depositor
to the Trustee of the Mortgage Loans for the benefit of the Certificateholders
[and the Insurer]. Further, it is not intended that either conveyance be deemed
to be a pledge of the Mortgage Loans by the Seller to the Depositor or by the
Depositor to the Trustee to secure a debt or other obligation. However, in the
event that the Mortgage Loans are held to be property of the Seller or the
Depositor, or if for any reason the Mortgage Loan Purchase Agreement or this
Agreement is held or deemed to create a security interest in the Mortgage Loans,
then it is intended that (i) this Agreement shall also be deemed to be a
security agreement within the meaning of Articles 8
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and 9 of the New York Uniform Commercial Code and the Uniform Commercial Code of
any other applicable jurisdiction; (ii) the conveyances provided for in Section
2.01 shall be deemed to be a grant by the Seller and the Depositor to the
Trustee on behalf of the Certificateholders [and the Insurer] ([and the Insurer]
directly), to secure payment in full of the Secured Obligations (as defined
below), of a security interest in all of the Seller's and the Depositor's right
(including the power to convey title thereto), title and interest, whether now
owned or hereafter acquired, in and to the Mortgage Loans, including the
Mortgage Notes, the Mortgages, any related insurance policies and all other
documents in the related Mortgage Files, and all accounts, contract rights,
general intangibles, chattel paper, instruments, documents, money, deposit
accounts, certificates of deposit, goods, letters of credit, advices of credit
and uncertificated securities consisting of, arising from or relating to (A) the
Mortgage Loans, including with respect to each Mortgage Loan, the Mortgage Note
and related Mortgage, and all other documents in the related Trustee Mortgage
Files, and including any Replacement Mortgage Loans; (B) pool insurance
policies, hazard insurance policies and any bankruptcy bond relating to the
foregoing, if applicable; (C) the Certificate Account; (D) the Custodial
Account; (E) all amounts payable after the Cut-off Date to the holders of the
Mortgage Loans in accordance with the terms thereof; (F) all income, payments,
proceeds and products of the conversion, voluntary or involuntary, of the
foregoing into cash, instruments, securities or other property, including
without limitation all amounts from time to time held or invested in the
Certificate Account, whether in the form of cash, instruments, securities or
other property; and (G) all cash and non-cash proceeds of any of the foregoing;
(iii) the possession by the Trustee or any other agent of the Trustee of
Mortgage Notes or such other items of property as constitute instruments, money,
documents, advices of credit, letters of credit, goods, certificated securities
or chattel paper shall be deemed to be a "possession by the secured party", or
possession by a purchaser or a person designated by him or her, for purposes of
perfecting the security interest pursuant to the Uniform Commercial Code
(including, without limitation, Sections 9-305, 8-313 or 8-321 thereof); and
(iv) notifications to persons holding such property, and acknowledgments,
receipts or confirmations from persons holding such property, shall be deemed
notifications to, or acknowledgments, receipts or confirmations from, financial
intermediaries, securities intermediaries, bailees or agents (as applicable) of
the Trustee for the purpose of perfecting such security interest under
applicable law. "Secured Obligations" means (i) the rights of each
Certificateholder to be paid any amount owed to it under this Agreement, (ii)
the rights of the Insurer to be paid any amount owed to it under this Agreement
and (iii) all other obligations of the Seller and the Depositor under this
Agreement and the Mortgage Loan Purchase Agreement.
(b) The Seller and the Depositor, and, at the Depositor's direction, the
Servicer and the Trustee, shall, to the extent consistent with this Agreement,
take such reasonable actions as may be necessary to ensure that, if this
Agreement were deemed to create a security interest in the Mortgage Loans and
the other property described above, such security interest would be deemed to be
a perfected security interest of first priority as applicable. The Trustee shall
file, at its expense, all filings necessary to maintain the effectiveness of any
original filings necessary under the Uniform Commercial Code as in effect in any
jurisdiction to perfect the Trustee's security interest (and the security
interest granted to the Insurer directly) in or lien on the Mortgage Loans,
including without limitation (i) continuation statements, and (ii) such other
statements as may be occasioned by any transfer of any interest of the Servicer
or the Depositor in any Mortgage Loan.
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SECTION 11.05 NOTICES.
In addition to other notices provided under this Agreement, the
Trustee shall notify the Rating Agencies in writing: (a) of any substitution of
any Mortgage Loan; (b) of any payment or draw on any insurance policy applicable
to the Mortgage Loans; (c) of the final payment of any amounts owing to a Class
of Certificates; (d) any Event of Default under this Agreement; and (e) in the
event any Mortgage Loan is repurchased in accordance with this Agreement.
All directions, demands and notices hereunder shall be in writing and
shall be deemed to have been duly given when received (i) in the case of the
Depositor, Credit Suisse First Boston Mortgage Securities Corp., ▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention: President; (ii) in the case of the
Trustee, [___________________], [_____________________], Attn: Structured
Finance or such other address as may hereafter be furnished to the Depositor in
writing by the Trustee; (iii) in the case of the Seller or Servicer,
[___________________],[___________________], Attention: General Counsel; (iv) in
the case of the Insurer, [___________________],[___________________], Attn:
Insured Portfolio Management Structured Finance; and (v) in the case of the
Rating Agencies, [▇▇▇▇▇'▇ Investors Service, Inc. ▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇,
▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention: Mortgage-Backed Securities Rating Group] and
[Standard & Poor's Rating Services, ▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇,
Attention: Structured Finance]. Notices to Certificateholders shall be deemed
given when mailed, first class postage prepaid.
SECTION 11.06 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 or the
Insurer.
SECTION 11.07 LIMITATION ON RIGHTS OF CERTIFICATEHOLDERS.
The death or incapacity of any Certificateholder shall not operate to
terminate this Agreement or the Trust Fund, nor entitle such Certificateholder's
legal 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
Fund, 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.
95
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 and Insurer a
written notice of an Event of Default and of the continuance thereof, as
provided herein, and such default would not result in a claim under the Policy,
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
upon the Trustee to institute such action, suit or proceeding in its own name as
Trustee hereunder and shall have offered to the Trustee such reasonable
indemnity as it may require against the costs, expenses, and liabilities to be
incurred therein or thereby [and the Insurer] shall have given its written
consent, 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 11.07, each and every Certificateholder and the
Trustee shall be entitled to such relief as can be given either at law or in
equity.
SECTION 11.08 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.
SECTION 11.09 [RIGHTS OF THE INSURER.
(a) The Insurer is an express third-party beneficiary of this Agreement
unless an Insurer Default exists.
(b) On each Distribution Date the Trustee shall forward to the Insurer a
copy of the reports furnished to the Class A Certificateholders and the
Depositor on such Distribution Date.
(c) The Trustee shall provide to the Insurer copies of any report, notice,
Opinion of Counsel, Officer's Certificate, request for consent or request for
amendment to any document related hereto promptly upon the Trustee's production
or receipt thereof.
(d) Unless an Insurer Default exists, the Trustee and the Depositor shall
not agree to any amendment to this Agreement without first having obtained the
prior written consent of the Insurer, if such consent is not unreasonably
withheld.
96
(e) So long as there does not exist a failure by the Insurer to make a
required payment under the Policy, the Insurer shall have the right to exercise
all rights of the Holders of the Class A Certificates under this Agreement
without any consent of such Holders, and such Holders may exercise such rights
only with the prior written consent of the Insurer, except as provided herein.]
97
IN WITNESS WHEREOF, the Depositor, the Servicer and the Trustee have
caused their names to be signed hereto by their respective officers thereunto
duly authorized all as of the first day of [____________, 200_].
CREDIT SUISSE FIRST BOSTON MORTGAGE
SECURITIES CORP., as Depositor
By:
------------------------------------
Name:
Title:
[----------------------------],
as Seller and Servicer
By:
------------------------------------
Name:
Title:
[----------------------------],
as Trustee
By:
------------------------------------
Name:
Title:
STATE OF NEW YORK )
: ss.:
COUNTY OF NEW YORK )
On this [___] day of [__________,200_], before me, personally
appeared [____________], known to me to be an officer of
[____________________________], the [national association] that executed the
within instrument, and also known to me to be the person who executed it on
behalf of said national association, and acknowledged to me that such national
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 NEW YORK )
: ss.:
COUNTY OF NEW YORK )
On the [___] day of [__________,200_], 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 [____] of [__________, 200_] before me, a Notary Public in and
for said State, personally appeared [______________] known to me to be a
[_____________] of [________________], the [________________________] that
executed the within instrument and also known to me to be the person who
executed it on behalf of said bank, and acknowledged to me that such 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 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 CODE.
THIS CERTIFICATE DOES NOT REPRESENT AN INTEREST IN OR OBLIGATION OF CREDIT
SUISSE FIRST BOSTON MORTGAGE SECURITIES CORP. OR THE TRUSTEE REFERRED TO BELOW,
OR OF ANY OF THEIR AFFILIATES. THIS CERTIFICATE IS NOT GUARANTEED OR INSURED BY
ANY GOVERNMENT AGENCY OR INSTRUMENTALITY.
A-1
[--------------------]
MORTGAGE-BACKED PASS-THROUGH CERTIFICATE
SERIES 200_-____, CLASS A
Evidencing an undivided interest in a Trust Fund whose assets consist of a pool
of adjustable-rate, conventional mortgage loans secured by first liens on one-
to four-family, residential real properties and certain other property held in
trust transferred by
CREDIT SUISSE FIRST BOSTON MORTGAGE SECURITIES CORP.
CUSIP $ INITIAL AGGREGATE
CLASS A CERTIFICATE
-------------------- PRINCIPAL BALANCE
Certificate No. A- $____________ INITIAL CERTIFICATE
---- PRINCIPAL BALANCE OF
THIS CERTIFICATE
First Distribution Final Scheduled
Date: Distribution Date:
[_________, 200_]
THIS CERTIFIES THAT CEDE & CO. is the registered owner of a
beneficial interest in the Trust Fund referred to below consisting of a pool of
adjustable-rate conventional mortgage loans secured by first liens on one- to
four-family residential real properties (the "Mortgage Loans") and certain other
property held in trust transferred to the Trust Fund by Credit Suisse First
Boston Mortgage Securities Corp. (the "Depositor"), and certain related
property. The Trust Fund was created pursuant to the Pooling and Servicing
Agreement, dated as of [_________, 200_] (the "Agreement"), among the Depositor,
[________________], as trustee (the "Trustee", which term includes any successor
entity under the Agreement) and [___________________], as seller and servicer, a
summary of certain of the pertinent provisions of which is set forth herein.
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.
This Certificate is one of a duly authorized issue of certificates by
Credit Suisse First Boston Mortgage Securities Corp. designated as the
[_______________] Mortgage-Backed Pass-Through Certificates, Series 200_-____
(the "Certificates"), which is comprised of the following [four] Classes: Class
A, Class S, Class R-I and Class R-II. Reference is hereby made to the Agreement
for a statement of the respective rights thereunder of the Depositor and the
Trustee and the Holders of the Certificates and the terms upon which the
Certificates are authenticated and delivered. This Certificate represents an
interest in the Trust Fund, which Trust Fund consists of, among other things,
(i) the Mortgage Loans and all distributions thereon payable after the Cut-off
Date, net of certain amounts in accordance with the provisions of the Agreement,
(ii) the Certificate Account and the Custodial Account and all amounts deposited
therein pursuant to the applicable provisions of the Agreement, net of any
investment earnings thereon, (iii) the interest of the Trust Fund in any
insurance policies with respect to the Mortgage
A-2
Loans, (iv) the interest of the Trust Fund in the Policy issued for the benefit
of the Holders of the Class A Certificates, (v) the rights of the Depositor
assigned to the Trustee pursuant to Sections 2.01 and 3.01 of the Agreement and
(vi) all proceeds of the conversion, voluntary or involuntary, of any of the
foregoing into cash or other liquid property.
This Class A Certificate represents a Percentage Interest equal to
the Initial Certificate Principal Balance of this Certificate divided by the
Initial Certificate Principal Balance of the Class A Certificates, both as set
forth above.
The Trustee shall distribute from the Certificate Account, to the
extent of available funds, on the 25th day of each calendar month, or, if such
25th day is not a Business Day, the Business Day immediately following such 25th
day (each, a "Distribution Date"), commencing [_________, 200_], to the Person
in whose name this Certificate is registered at the close of business on the
last Business Day of the month immediately preceding the month of such
distribution (each, a "Record Date"), a principal amount equal to the product of
the Percentage Interest evidenced by this Certificate and that portion of the
Available Distribution Amount that is allocated to principal on such Class of
Certificates on such Distribution Date.
Distributions of interest will be made on each Distribution Date, to
the extent of available funds, in an amount equal to the sum of (a) one month's
interest accrued at the per annum Certificate Rate on the outstanding
Certificate Principal Balance of this Certificate as of the day immediately
prior to the related Distribution Date reduced by its pro rata portion of the
aggregate shortfalls of interest allocated to such Class of Certificates and (b)
the amount of any Class A Cumulative Interest Shortfall Amount payable on such
Distribution Date.
Not later than each Distribution Date, the Trustee will send to each
Certificateholder a statement containing information relating to the Mortgage
Loans and payments made to Certificateholders.
Distributions on this Certificate will be made by the Trustee by
check mailed to the address of the Holder hereof entitled thereto at the address
appearing in the Certificate Register or, if such Holder holds one or more of
this Class of Certificates with an aggregate initial Certificate Principal
Balance of at least $[2,500,000] or all of the Certificates of this Class, by
wire transfer in immediately available funds to the account of such
Certificateholder designated in writing to the Trustee at least five Business
Days prior to the applicable Record Date. Notwithstanding the above, the final
distribution on this Certificate will be made after due notice of the pendency
of such final distribution and only upon presentation and surrender of this
Certificate at the office or agency designated in such notice.
The Agreement permits, with certain exceptions as therein provided,
the amendment thereof and the modification of the rights and obligations of the
Depositor and the Trustee and the rights of the Certificateholders under the
Agreement at any time by the Depositor and the Trustee with the consent of the
Holders of Certificates evidencing Voting Rights aggregating not less than
66-2/3% of the Voting Rights of all the Certificates; PROVIDED, HOWEVER, that no
such amendment may (i) reduce in any manner the amount of, delay the timing of
or change the manner in which payments received on Mortgage Loans are required
to be distributed in respect of any Certificate without the consent of the
Holder of such Certificate, (ii) adversely
A-3
affect in any material respect the interests of the Holders of a Class of
Certificates in a manner other than in (i) above without the consent of the
Holders of Certificates evidencing not less than 66-2/3% of the Voting Rights of
such Class and (iii) reduce the aforesaid percentages of Voting Rights, the
holders of which are required to consent to any such amendment, without the
consent of 100% of the Holders of Certificates of the Class affected thereby.
Any such consent by the Holder of this Certificate shall be conclusive and
binding on such Holder and upon all future Holders of this Certificate and of
any Certificate issued upon the transfer hereof or in exchange herefor or in
lieu hereof whether or not notation of such consent is made upon this
Certificate. The Agreement also permits the Depositor and the Trustee to amend
certain terms and conditions set forth in the Agreement without the consent of
Holders of the Certificates. At any time that any of the Class A Certificates
are outstanding, [___]% of all Voting Rights will be allocated to the Holders of
the Class A Certificates, in proportion to their then outstanding Certificate
Principal Balances, [___]% of all Voting Rights will be allocated to the Holders
of the Class S Certificates, [___]% of all Voting Rights will be allocated to
the Holders of the Class R-I Certificates and [___]% of all Voting Rights will
be allocated to the Holders of the Class R-II Certificates.
As provided in the Agreement and subject to certain limitations
therein set forth, the transfer of this Certificate is registrable on the
Certificate Register upon surrender of this Certificate for registration of
transfer at the office or agency of the Trustee designated therefor, duly
endorsed by, or accompanied by a written instrument of transfer in a form
satisfactory to the Trustee duly executed by the Holder hereof or such Holder's
attorney duly authorized in writing, and thereupon one or more new Certificates
of the same Class and of authorized denominations, and for the same aggregate
interest in the Trust Fund will be issued to the designated transferee or
transferees.
The Class A Certificates will be issued in fully registered form in
minimum denominations of $100,000 Certificate Principal Balance and in integral
multiples of $1,000 in excess of such amount; PROVIDED, HOWEVER, that one
Certificate of each Class may be issued in such other amount as is required so
that the aggregate of each Class of Certificates equals its respective aggregate
Certificate Principal Balance. As provided in the Agreement and subject to
certain limitations therein set forth, this Certificate is exchangeable for one
or more new Certificates of the same Class and of authorized denominations
evidencing a like aggregate Certificate Principal Balance, as requested by the
Holder surrendering the same.
No service charge will be made for such registrations of transfers or
exchanges, but the Trustee may require payment of a sum sufficient to cover any
tax or other governmental charge payable in connection therewith. The Trustee
and any agent of the Trustee may treat the person in whose name this Certificate
is registered as the owner hereof for all purposes, and neither the Trustee nor
any such agent thereof shall be affected by notice to the contrary.
The obligations and responsibilities of the Depositor and the Trustee
created by the Agreement will terminate upon the earlier of (a) the purchase by
the Servicer from the Trust Fund of all remaining Mortgage Loans and all
property acquired in respect of such Mortgage Loans, thereby effecting early
retirement of the Certificates, or (b) 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 property acquired upon foreclosure or deed in
lieu of
A-4
foreclosure of any Mortgage Loan. As provided in the Agreement, the right to
purchase all Mortgage Loans pursuant to clause (a) above shall be conditioned
upon the unpaid Principal Balances of such Mortgage Loans, at the time of any
such repurchase, aggregating less than 5% of the aggregate Principal Balances
thereof as of the Cut-off Date.
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. If the terms hereof are inconsistent with the
Agreement, the Agreement shall control.
Unless the certificate of authentication hereon has been executed by
or on behalf of the Trustee by manual signature, this Certificate shall not be
entitled to any benefit under the Agreement or be valid or obligatory for any
purpose.
The recitals contained herein shall be taken as statements of the
Depositor and not of the Trustee. The Trustee assumes no responsibility for the
correctness of the statements contained in this Certificate and makes no
representation as to the validity or sufficiency of the Agreement, this
Certificate, any Mortgage Loan or any related document.
A-5
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be
duly executed under its corporate seal.
[_______________________],
solely as Trustee
and not individually
By:_______________________
Authorized Officer
CERTIFICATE OF AUTHENTICATION
This is one of the Certificates referred to in the within-mentioned Agreement.
Date:
----------------------
[-----------------------],
as Trustee
By:-----------------------
Authorized Officer
A-6
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, or
assignee) the undivided interest in the Trust Fund evidenced by the within
Certificate and hereby authorize(s) the transfer of registration of such
interest to the assignee on the Certificate Register.
I (we) further direct the Trustee to issue a new Certificate of the same
Class and of a like Initial Certificate Principal Balance and undivided interest
in the Trust Fund to the above-named assignee and to deliver such Certificate to
the following address:
________________________________________________________________________________
________________________________________________________________________________
Dated:____________________________________
_________________________ _______________________________________
Social Security or Signature by or on behalf of assignor
other Tax Identification (signature must be signed as registered)
No. of Assignee
____________________________
Signature Guaranteed
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for the information of the
Master Servicer:
Distribution shall be made by check mailed to__________________________,
_____________________________________ or if the aggregate initial Certificate
Principal Balance of Certificates of this Class held by the Holder is at least
$[2,500,000] or the Percentage Interest within such Class is 100%, and the
Trustee shall have received appropriate wiring instructions in accordance with
the Agreement, by wire transfer in immediately available funds to
________________________________the account of , __________________________
account number _________________. This information is provided by the assignee
named above, or its agent.
A-7
EXHIBIT B
FORM OF CLASS S CERTIFICATE
THIS CERTIFICATE HAS NOT BEEN AND WILL NOT BE REGISTERED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED (THE "ACT"), OR THE SECURITIES LAWS OF ANY STATE AND MAY
NOT BE RESOLD OR TRANSFERRED UNLESS IT IS REGISTERED PURSUANT TO SUCH ACT AND
LAWS OR IS SOLD OR TRANSFERRED IN TRANSACTIONS THAT ARE EXEMPT FROM REGISTRATION
UNDER SUCH ACT AND UNDER APPLICABLE STATE LAW AND IS TRANSFERRED IN ACCORDANCE
WITH THE PROVISIONS OF SECTION 6.02 OF THE AGREEMENT REFERRED TO HEREIN.
THE YIELD TO MATURITY ON THIS CERTIFICATE WILL BE EXTREMELY SENSITIVE TO THE
RATE AND TIMING OF PAYMENTS (INCLUDING PREPAYMENTS) ON THE MORTGAGE LOANS.
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 CODE.
THE FOLLOWING INFORMATION IS PROVIDED SOLELY FOR THE PURPOSES OF APPLYING THE
U.S. FEDERAL INCOME TAX ORIGINAL ISSUE DISCOUNT ("OID") RULES TO THIS
CERTIFICATE. THE ISSUE DATE OF THIS CERTIFICATE IS [_______________, 200_].
ASSUMING THAT THE MORTGAGE LOANS PREPAY AT 100% SPA (AS DESCRIBED IN THE
PROSPECTUS SUPPLEMENT), AND ASSUMING A CONSTANT PASS-THROUGH RATE EQUAL TO THE
INITIAL CERTIFICATE RATE, THIS CERTIFICATE HAS BEEN ISSUED WITH NO MORE THAN
$____ OF OID PER [$1,000] [$100,000] OF [INITIAL NOTIONAL AMOUNT], THE PRE-TAX
YIELD TO MATURITY IS ____% AND THE AMOUNT OF OID ATTRIBUTABLE TO THE INITIAL
ACCRUAL PERIOD IS NO MORE THAN $____ PER [$1,000] [$100,000] OF [INITIAL
NOTIONAL AMOUNT], COMPUTED USING THE APPROXIMATE METHOD. NO REPRESENTATION IS
MADE THAT THE MORTGAGE LOANS WILL PREPAY AT A RATE BASED ON THE STANDARD
PREPAYMENT ASSUMPTION OR AT ANY OTHER RATE OR AS TO THE CONSTANCY OF THE
CERTIFICATE RATE.
THIS CERTIFICATE DOES NOT REPRESENT AN INTEREST IN OR OBLIGATION OF CREDIT
SUISSE FIRST BOSTON MORTGAGE SECURITIES CORP. OR THE TRUSTEE REFERRED TO BELOW,
OR OF ANY OF THEIR AFFILIATES. THIS CERTIFICATE IS NOT GUARANTEED OR INSURED BY
ANY GOVERNMENT AGENCY OR INSTRUMENTALITY.
B-1
[________________________]
MORTGAGE-BACKED PASS-THROUGH CERTIFICATE
SERIES 200_-____, CLASS S
Evidencing an undivided interest in the interest portion of a Trust Fund whose
assets consist of a pool of adjustable-rate, conventional mortgage loans secured
by first liens on one- to four-family, residential real properties and certain
other property held in trust transferred by
CREDIT SUISSE FIRST BOSTON MORTGAGE SECURITIES CORP.
$ INITIAL AGGREGATE
NOTIONAL AMOUNT OF
CLASS S CERTIFICATES
Certificate No. S- 100% PERCENTAGE INTEREST
---- REPRESENTED BY THIS
CERTIFICATE
First Distribution Final Scheduled
Date: Distribution Date:
[__________, 200_]
THIS CERTIFIES THAT ____________________ is the registered owner of a
beneficial interest in the Trust Fund referred to below consisting of a pool of
adjustable-rate, conventional mortgage loans secured by first liens on one- to
four-family residential real properties (the "Mortgage Loans") and certain other
property held in trust transferred to the Trust Fund by Credit Suisse First
Boston Mortgage Securities Corp. (the "Depositor"), and certain related
property. The Trust Fund was created pursuant to the Pooling and Servicing
Agreement, dated as of [__________, 200_] (the "Agreement"), among the
Depositor, [___________________], as trustee (the "Trustee", which term includes
any successor entity under the Agreement) and [_________________], as seller and
servicer, a summary of certain of the pertinent provisions of which is set forth
herein. 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.
This Certificate is one of a duly authorized issue of certificates by
Credit Suisse First Boston Mortgage Securities Corp. designated as the
[_______________] Mortgage-Backed Pass-Through Certificates, Series 200_-____
(the "Certificates"), which is comprised of the following [four] Classes: Class
A, Class S, Class R-I and Class R-II. Reference is hereby made to the Agreement
for a statement of the respective rights thereunder of the Depositor and the
Trustee and the Holders of the Certificates and the terms upon which the
Certificates are authenticated and delivered. This Certificate represents an
interest in the Trust Fund, which Trust Fund consists of, among other things,
(i) the Mortgage Loans and all distributions thereon payable after the Cut-off
Date, net of certain amounts in accordance with the provisions of the Agreement,
(ii) the Certificate Account and the Custodial Account and all amounts deposited
therein pursuant to the applicable provisions of the Agreement, net of any
investment earnings
B-2
thereon, (iii) the interest of the Trust Fund in any insurance policies with
respect to the Mortgage Loans, (iv) the interest of the Trust Fund in the Policy
issued for the benefit of the Holders of the Class A Certificates, (v) the
rights of the Depositor assigned to the Trustee pursuant to Sections 2.01 and
3.01 of the Agreement and (vi) all proceeds of the conversion, voluntary or
involuntary, of any of the foregoing into cash or other liquid property.
This Class S Certificate represents the right to receive a portion of
interest with respect to the Mortgage Loans on a Distribution Date. This Class S
Certificate is not entitled to any distributions with respect to principal on
the Mortgage Loans in the Trust Fund.
The Trustee shall distribute from the Certificate Account, to the
extent of available funds, on the 25th day of each calendar month, or, if such
25th day is not a Business Day, the Business Day immediately following such 25th
day (the "Distribution Date"), commencing [_____________, 200_], to the Person
in whose name this Certificate is registered at the close of business on the
last Business Day of the month immediately preceding the month of such
distribution (each a "Record Date"), distributions of interest in an amount
equal to the Class S Interest Distribution Amount for such Distribution Date.
Not later than each Distribution Date, the Trustee will send to each
Certificateholder a statement containing information relating to the Mortgage
Loans and payments made to Certificateholders.
Distributions on this Certificate will be made by the Trustee by
check mailed to the address of the Holder hereof entitled thereto at the address
appearing in the Certificate Register or, if such Holder holds all of the
Certificates of this Class, by wire transfer in immediately available funds to
the account of such Certificateholder designated in writing to the Trustee at
least five Business Days prior to the applicable Record Date. Notwithstanding
the above, the final distribution on this Certificate will be made after due
notice of the pendency of such final distribution and only upon presentation and
surrender of this Certificate at the office or agency designated in such notice.
The Agreement permits, with certain exceptions as therein provided,
the amendment thereof and the modification of the rights and obligations of the
Depositor and the Trustee and the rights of the Certificateholders under the
Agreement at any time by the Depositor and the Trustee with the consent of the
Holders of Certificates evidencing Voting Rights aggregating not less than
66-2/3% of the Voting Rights of all the Certificates; PROVIDED, HOWEVER, that no
such amendment may (i) reduce in any manner the amount of, delay the timing of
or change the manner in which payments received on Mortgage Loans are required
to be distributed in respect of any Certificate without the consent of the
Holder of such Certificate, (ii) adversely affect in any material respect the
interests of the Holders of a Class of Certificates in a manner other than in
(i) above without the consent of the Holders of Certificates evidencing not less
than 66-2/3% of the Voting Rights of such Class and (iii) reduce the aforesaid
percentages of Voting Rights, the holders of which are required to consent to
any such amendment, without the consent of 100% of the Holders of Certificates
of the Class affected thereby. Any such consent by the Holder of this
Certificate shall be conclusive and binding on such Holder and upon all future
Holders of this Certificate and of any Certificate issued upon the transfer
hereof or in exchange herefor or in lieu hereof whether or not notation of such
consent is made upon this Certificate.
B-3
The Agreement also permits the Depositor and the Trustee to amend certain terms
and conditions set forth in the Agreement without the consent of Holders of the
Certificates. At any time that any of the Class A Certificates are outstanding,
[___]% of all Voting Rights will be allocated to the Holders of the Class A
certificates, in proportion to their then outstanding Certificate Principal
Balances, [__]% of all Voting Rights will be allocated to the Holders of the
Class S Certificates, [__]% of all Voting Rights will be allocated to the
Holders of the Class R-I Certificates and [__]% of all Voting Rights will be
allocated to the Holders of the Class R-II Certificates.
As provided in the Agreement and subject to certain limitations
therein set forth, the transfer of this Certificate is registrable on the
Certificate Register upon surrender of this Certificate for registration of
transfer at the office or agency of the Trustee designated therefor, duly
endorsed by, or accompanied by a written instrument of transfer in a form
satisfactory to the Trustee duly executed by the Holder hereof or such Holder's
attorney duly authorized in writing, and thereupon one or more new Certificates
of the same Class and of authorized denominations, and for the same aggregate
interest in the Trust Fund will be issued to the designated transferee or
transferees.
The Class S Certificates will be issued in fully registered form in
minimum Percentage Interests of 20% and integral multiples thereof. As provided
in the Agreement and subject to certain limitations therein set forth, this
Certificate is exchangeable for one or more new Certificates of the same Class
and of authorized Percentage Interests evidencing a like aggregate Percentage
Interest, as requested by the Holder surrendering the same.
No service charge will be made for such registrations of transfers or
exchanges, but the Trustee may require payment of a sum sufficient to cover any
tax or other governmental charge payable in connection therewith. The Trustee
and any agent of the Trustee may treat the person in whose name this Certificate
is registered as the owner hereof for all purposes, and neither the Trustee nor
any such agent thereof shall be affected by notice to the contrary.
The obligations and responsibilities of the Depositor and the Trustee
created by the Agreement will terminate upon the earlier of (a) the purchase by
the Servicer from the Trust Fund of all remaining Mortgage Loans and all
property acquired in respect of such Mortgage Loans, thereby effecting early
retirement of the Certificates, or (b) 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 property acquired upon foreclosure or deed in
lieu of foreclosure of any Mortgage Loan. As provided in the Agreement, the
right to purchase all Mortgage Loans pursuant to clause (a) above shall be
conditioned upon the unpaid Principal Balances of such Mortgage Loans, at the
time of any such repurchase, aggregating less than 5% of the aggregate Principal
Balances thereof as of the Cut-off Date.
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. If the terms hereof are inconsistent with the
Agreement, the Agreement shall control.
B-4
Unless the certificate of authentication hereon has been executed by
or on behalf of the Trustee by manual signature, this Certificate shall not be
entitled to any benefit under the Agreement or be valid or obligatory for any
purpose.
The recitals contained herein shall be taken as statements of the
Depositor and not of the Trustee. The Trustee assumes no responsibility for the
correctness of the statements contained in this Certificate and makes no
representation as to the validity or sufficiency of the Agreement, this
Certificate, any Mortgage Loan or any related document.
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be
duly executed under its corporate seal.
[__________________________], solely as Trustee
and not individually
By: ______________________
Authorized Officer
CERTIFICATE OF AUTHENTICATION
This is one of the Certificates referred to in the within-mentioned Agreement.
Date:
----------------------
[--------------------------],
as Trustee
By:------------------------
Authorized Officer
B-5
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, or
assignee) the undivided interest in the Trust Fund evidenced by the within
Certificate and hereby authorize(s) the transfer of registration of such
interest to the assignee on the Certificate Register.
I (we) further direct the Trustee to issue a new Certificate of the same
Class and of a like Percentage Interest and undivided interest in the Trust Fund
to the above-named assignee and to deliver such Certificate to the following
address:
Dated:______________
________________________ ________________________________
Social Security or Signature by or on behalf of
other Tax Identification assignor (signature must be
signed as registered)
No. of Assignee
_____________________________
Signature Guaranteed
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for the information of the
Master Servicer:
Distribution shall be made by check mailed to _________________________
______________________________________________________________________________,
or if the Percentage Interest within such Class is 100%, and the Trustee shall
have received appropriate wiring instructions in accordance with the Agreement,
by wire transfer in immediately available funds to _______________________the
account of , account number _________________. This information is provided by
the assignee named above, or its agent.
B-6
EXHIBIT C
FORM OF CLASS R CERTIFICATE
THIS CERTIFICATE HAS NOT BEEN AND WILL NOT BE REGISTERED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED (THE "ACT"), OR THE SECURITIES LAWS OF ANY STATE AND MAY
NOT BE RESOLD OR TRANSFERRED UNLESS IT IS REGISTERED PURSUANT TO SUCH ACT AND
LAWS OR IS SOLD OR TRANSFERRED IN TRANSACTIONS THAT ARE EXEMPT FROM REGISTRATION
UNDER SUCH ACT AND UNDER APPLICABLE STATE LAW AND IS TRANSFERRED IN ACCORDANCE
WITH THE PROVISIONS OF SECTION 6.02 OF THE AGREEMENT REFERRED TO HEREIN.
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 (THE "CODE"). THIS CERTIFICATE MAY NOT BE TRANSFERRED TO A NON-UNITED
STATES PERSON.
THIS CERTIFICATE DOES NOT REPRESENT AN INTEREST IN OR OBLIGATION OF CREDIT
SUISSE FIRST BOSTON MORTGAGE SECURITIES CORP. OR THE TRUSTEE REFERRED TO BELOW,
OR OF ANY OF THEIR AFFILIATES. THIS CERTIFICATE IS NOT GUARANTEED OR INSURED BY
ANY GOVERNMENT AGENCY OR INSTRUMENTALITY.
ANY SALE, TRANSFER OR OTHER DISPOSITION OF THIS CLASS [R-I] [R-II] CERTIFICATE
MAY BE MADE ONLY IF THE PROPOSED TRANSFEREE PROVIDES A TRANSFER AFFIDAVIT TO THE
TRUSTEE TO THE EFFECT THAT (1) SUCH TRANSFEREE AGREES TO BE BOUND BY THE TERMS
OF THE AGREEMENT AND ALL RESTRICTIONS SET FORTH ON THE FACE HEREOF, (2) SUCH
TRANSFEREE IS NOT EITHER (A) THE UNITED STATES, ANY STATE OR POLITICAL
SUBDIVISION THEREOF, ANY FOREIGN GOVERNMENT, ANY INTERNATIONAL ORGANIZATION, OR
ANY AGENCY OR INSTRUMENTALITY OF ANY OF THE FOREGOING, (B) ANY ORGANIZATION
(OTHER THAN A COOPERATIVE DESCRIBED IN SECTION 521 OF THE CODE) WHICH IS EXEMPT
FROM THE TAX IMPOSED BY CHAPTER 1 OF THE CODE UNLESS SUCH ORGANIZATION IS
SUBJECT TO THE TAX IMPOSED BY SECTION 511 OF THE CODE, (C) ANY ORGANIZATION
DESCRIBED IN SECTION 1381(a)(2)(C) OF THE CODE, (ANY SUCH PERSON DESCRIBED IN
THE FOREGOING CLAUSES (A), (B) OR (C) BEING HEREINAFTER REFERRED TO AS A
"DISQUALIFIED ORGANIZATION") OR (D) AN AGENT OF A DISQUALIFIED ORGANIZATION, AND
(3) NO PURPOSE OF SUCH TRANSFER IS TO ENABLE THE TRANSFEROR TO IMPEDE THE
ASSESSMENT OR COLLECTION OF TAX. SUCH AFFIDAVIT SHALL INCLUDE CERTAIN
REPRESENTATIONS AS TO THE FINANCIAL CONDITION OF THE PROPOSED TRANSFEREE.
NO TRANSFER OF THIS CERTIFICATE MAY BE MADE TO AN EMPLOYEE BENEFIT OR OTHER PLAN
SUBJECT TO THE EMPLOYEE RETIREMENT INCOME SECURITY
C-1
ACT OF 1974, AS AMENDED ("ERISA"), OR SECTION 4975 OF THE CODE UNLESS THE
TRANSFEREE PROVIDES AN OPINION OF COUNSEL SATISFACTORY TO THE DEPOSITOR AND THE
TRUSTEE THAT THE PURCHASE OF THIS CERTIFICATE BY OR ON BEHALF OF SUCH PLAN IS
PERMISSIBLE UNDER APPLICABLE LAW AND WILL NOT CONSTITUTE OR RESULT IN A
NON-EXEMPT PROHIBITED TRANSACTION UNDER SECTION 406 OF ERISA AND SECTION 4975 OF
THE CODE.
C-2
[--------------------]
MORTGAGE-BACKED PASS-THROUGH CERTIFICATE
SERIES 200_-____, CLASS [R-I] [R-II]
Evidencing an undivided interest in a Trust Fund whose assets consist of a pool
of adjustable-rate, conventional mortgage loans secured by first liens on one-
to four-family, residential real properties and certain other property held in
trust transferred by
CREDIT SUISSE FIRST BOSTON MORTGAGE SECURITIES CORP.
Certificate No.[R-I- ] [R-II-__] 100% PERCENTAGE INTEREST
REPRESENTED BY THIS
CERTIFICATE
First Distribution Date: Final Scheduled
[_________, 200_] Distribution Date:
THIS CERTIFIES THAT ____________________________ is the registered owner of
a beneficial interest in the Trust Fund referred to below consisting of a pool
of adjustable-rate conventional mortgage loans secured by first liens on one- to
four-family residential real properties (the "Mortgage Loans") and certain other
property held in trust transferred to the Trust Fund by Credit Suisse First
Boston Mortgage Securities Corp. (the "Depositor"), and certain related
property. The Trust Fund was created pursuant to the Pooling and Servicing
Agreement, dated as of [_________, 200_] (the "Agreement"), among the Depositor,
[________________________], as trustee (the "Trustee", which term includes any
successor entity under the Agreement) and [_________________], as seller and
servicer, a summary of certain of the pertinent provisions of which is set forth
herein. 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.
This Certificate is one of a duly authorized issue of certificates by
Credit Suisse First Boston Mortgage Securities Corp. designated as the
[_______________] Mortgage-Backed Pass-Through Certificates, Series 200_-____
(the "Certificates"), which is comprised of the following four Classes: Class A,
Class S, Class R-I and Class R-II. Reference is hereby made to the Agreement for
a statement of the respective rights thereunder of the Depositor and the Trustee
and the Holders of the Certificates and the terms upon which the Certificates
are authenticated and delivered. This Certificate represents an interest in the
Trust Fund, which Trust Fund consists of, among other things, (i) the Mortgage
Loans and all distributions thereon payable after the Cut-off Date, net of
certain amounts in accordance with the provisions of the Agreement, (ii) the
Certificate Account and the Custodial Account and all amounts deposited therein
pursuant to the applicable provisions of the Agreement, net of any investment
earnings thereon, (iii) the interest of the Trust Fund in any insurance policies
with respect to the Mortgage Loans, (iv) the interest of the Trust Fund in the
Policy issued for the benefit of the Holders of the
C-3
Class A Certificates, (v) the rights of the Depositor assigned to the Trustee
pursuant to Sections 2.01 and 3.01 of the Agreement and (vi) all proceeds of the
conversion, voluntary or involuntary, of any of the foregoing into cash or other
liquid property.
This Class [R-I] [R-II] Certificate is not entitled to any
distributions with respect to principal or interest on the Mortgage Loans in the
Trust Fund.
Not later than each Distribution Date, the Trustee will send to each
Certificateholder a statement containing information relating to the Mortgage
Loans and payments made to Certificateholders.
The Agreement permits, with certain exceptions as therein provided,
the amendment thereof and the modification of the rights and obligations of the
Depositor and the Trustee and the rights of the Certificateholders under the
Agreement at any time by the Depositor and the Trustee with the consent of the
Holders of Certificates evidencing Voting Rights aggregating not less than
66-2/3% of the Voting Rights of all the Certificates; PROVIDED, HOWEVER, that no
such amendment may (i) reduce in any manner the amount of, delay the timing of
or change the manner in which payments received on Mortgage Loans are required
to be distributed in respect of any Certificate without the consent of the
Holder of such Certificate, (ii) adversely affect in any material respect the
interests of the Holders of a Class of Certificates in a manner other than in
(i) above without the consent of the Holders of Certificates evidencing not less
than 66-2/3% of the Voting Rights of such Class or (iii) reduce the aforesaid
percentages of Voting Rights, the holders of which are required to consent to
any such amendment, without the consent of 100% of the Holders of Certificates
of the Class affected thereby. Any such consent by the Holder of this
Certificate shall be conclusive and binding on such Holder and upon all future
Holders of this Certificate and of any Certificate issued upon the transfer
hereof or in exchange herefor or in lieu hereof whether or not notation of such
consent is made upon this Certificate. The Agreement also permits the Depositor
and the Trustee to amend certain terms and conditions set forth in the Agreement
without the consent of Holders of the Certificates. At any time that any of the
Class A Certificates are outstanding, [___]% of all Voting Rights will be
allocated among the Holders of the Class A, in proportion to their then
outstanding Certificate Principal Balances, [__]% of all Voting Rights will be
allocated to the Holders of the Class S Certificates, [___]% of all Voting
Rights will be allocated to the Holders of the Class R-I Certificates and [___]%
of all Voting Rights will be allocated to the Holders of the Class R-II
Certificates.
As provided in the Agreement and subject to certain limitations
therein set forth, the transfer of this Certificate is registrable on the
Certificate Register upon surrender of this Certificate for registration of
transfer at the office or agency of the Trustee designated therefor, duly
endorsed by, or accompanied by a written instrument of transfer in a form
satisfactory to the Trustee duly executed by the Holder hereof or such Holder's
attorney duly authorized in writing, and thereupon one or more new Certificates
of the same Class and of authorized denominations, and for the same aggregate
interest in the Trust Fund will be issued to the designated transferee or
transferees.
The Class [R-I] [R-II] Certificates will be issued in fully
registered form in minimum Percentage Interests of 20% and integral multiples
thereof. As provided in the Agreement and subject to certain limitations therein
set forth, this Certificate is exchangeable for
C-4
one or more new Certificates of the same Class and of authorized Percentage
Interests evidencing a like aggregate Percentage Interest, as requested by the
Holder surrendering the same.
No service charge will be made for such registrations of transfers or
exchanges, but the Trustee may require payment of a sum sufficient to cover any
tax or other governmental charge payable in connection therewith. The Trustee
and any agent of the Trustee may treat the person in whose name this Certificate
is registered as the owner hereof for all purposes, and neither the Trustee nor
any such agent thereof shall be affected by notice to the contrary.
Pursuant to the Agreement, the Depositor will make two separate
elections to treat each of REMIC I and REMIC II as a real estate mortgage
investment conduit (a "REMIC") for federal income tax purposes. The Class R-I
Certificates will be the "residual interest" in REMIC I, the Class R-II
Certificates will be the "residual interest" in REMIC II, and all other Classes
of Certificates will constitute the "regular interests" in REMIC II.
The obligations and responsibilities of the Depositor and the Trustee
created by the Agreement will terminate upon the earlier of (a) the purchase by
the Servicer from the Trust Fund of all remaining Mortgage Loans and all
property acquired in respect of such Mortgage Loans, thereby effecting early
retirement of the Certificates, or (b) 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 property acquired upon foreclosure or deed in
lieu of foreclosure of any Mortgage Loan. As provided in the Agreement, the
right to purchase all Mortgage Loans pursuant to clause (a) above shall be
conditioned upon the unpaid Principal Balances of such Mortgage Loans, at the
time of any such repurchase, aggregating less than 5% of the aggregate Principal
Balances thereof as of the Cut-off Date.
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. If the terms hereof are inconsistent with the
Agreement, the Agreement shall control.
Unless the certificate of authentication hereon has been executed by
or on behalf of the Trustee by manual signature, this Certificate shall not be
entitled to any benefit under the Agreement or be valid or obligatory for any
purpose.
The recitals contained herein shall be taken as statements of the
Depositor and not of the Trustee. The Trustee assumes no responsibility for the
correctness of the statements contained in this Certificate and makes no
representation as to the validity or sufficiency of the Agreement, this
Certificate, any Mortgage Loan or any related document.
C-5
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be
duly executed under its corporate seal.
[____________________________], solely as
Trustee and not individually
By:___________________________
Authorized Officer
CERTIFICATE OF AUTHENTICATION
This is one of the Certificates referred to in the within-mentioned Agreement.
Date:
----------------------
[--------------------------],
as Trustee
By:------------------------
Authorized Officer
C-6
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, or
assignee) the undivided interest in the Trust Fund evidenced by the within
Certificate and hereby authorize(s) the transfer of registration of such
interest to the assignee on the Certificate Register.
I (we) further direct the Trustee to issue a new Certificate of the same
Class and of a like Percentage Interest and undivided interest in the Trust Fund
to the above-named assignee and to deliver such Certificate to the following
address: _______________________________________________________________________
________________________________________________________________________________
Dated:
------------------------
------------------------------- ----------------------------
Social Security or Signature by or on behalf of
other Tax Identification assignor
(signature must be signed as
registered)
No. of Assignee ____________________________
Signature Guaranteed
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for the information of the Master
Servicer:
Distribution shall be made by check mailed to __________________________,
or if the Percentage Interest within such Class is 100%, and the Trustee shall
have received appropriate wiring instructions in accordance with the Agreement,
by wire transfer in immediately available funds to___________________________
the account of , account number ____________________. This information is
provided by the assignee named above, or its agent.
C-7
EXHIBIT D
SCHEDULE OF MORTGAGE LOANS
D-1
EXHIBIT E
FORM OF INITIAL CERTIFICATION OF TRUSTEE
[_________________, 200_]
Credit Suisse First Boston Mortgage Securities Corp.
▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Re: Pooling and Servicing Agreement ("Pooling and Servicing
Agreement") relating to [__________________] Mortgage-Backed Pass-Through
Certificates, Series 200_-___
Ladies and Gentlemen:
In accordance with and subject to the provisions of Section 2.02 of
the Pooling and Servicing Agreement, the undersigned, as Trustee, hereby
certifies that, except for the exceptions noted on the schedule attached hereto,
it has (a) received an original Mortgage Note with respect to each Mortgage Loan
listed on the Mortgage Loan Schedule and (b) received an original Mortgage (or a
certified copy thereof) with respect to each Mortgage Loan listed on the
Mortgage Loan Schedule in accordance with Section 2.01 of the Pooling and
Servicing Agreement. The Trustee has made no independent examination of any
documents contained in each Mortgage File beyond the review specifically
mentioned above. The Trustee makes no representations as to: (i) the validity,
legality, sufficiency, enforceability or genuineness of any of the documents
delivered in accordance with Section 2.01 of the Pooling and Servicing Agreement
or any of the Mortgage Loans identified in the Mortgage Loan Schedule, or (ii)
the collectibility, insurability, effectiveness or suitability of any such
Mortgage Loan.
The Trustee acknowledges receipt of notice that the Depositor has
granted to the Trustee for the benefit of the Certificateholders a security
interest in all of the Depositor's right, title and interest in and to the
Mortgage Loans.
Capitalized terms used herein without definition shall have the
meaning assigned to them in the Pooling and Servicing Agreement.
[___________________________],
as Trustee
By:___________________________
Authorized Representative
E-1
EXHIBIT F
FORM OF FINAL CERTIFICATION OF TRUSTEE
[date]
Credit Suisse First Boston Mortgage Securities Corp.
▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Re: Pooling and Servicing Agreement ("Pooling and Servicing
Agreement") relating to [___________________] Mortgage-Backed Pass-Through
Certificates, Series 200_-___
Ladies and Gentlemen:
In accordance with and subject to the provisions of Section 2.02 of the
above-referenced Pooling and Servicing Agreement the undersigned, as Trustee,
hereby certifies that, except for the exceptions noted on the schedule attached
hereto, as to each Mortgage Loan listed in the Mortgage Loan Schedule it has
reviewed the Mortgage File and has determined that (based solely on its review
of each such documents on its face) (i) all documents described in clauses
(i)-(v) of Section 2.01 of the Pooling and Servicing Agreement are in its
possession, (ii) such documents have been reviewed by it and have not been
mutilated, damaged, defaced, torn or otherwise physically altered and such
documents relate to such Mortgage Loan and (iii) each Mortgage Note has been
endorsed and each assignment of Mortgage has been delivered as provided in
Section 2.01 of the Pooling and Servicing Agreement. The Trustee has made no
independent examination of any documents required to be delivered in accordance
with Section 2.01 of the Pooling and Servicing Agreement beyond the review
specifically required therein. The Trustee makes no representations as to: (i)
the validity, legality, sufficiency, enforceability or genuineness of any of the
documents required to be delivered in accordance with Section 2.01 of the
Pooling and Servicing Agreement or any of the Mortgage Loans identified on the
Mortgage Loan Schedule, or (ii) the collectibility, insurability, effectiveness
or suitability of any such Mortgage Loan.
F-1
Capitalized terms used herein without definition have the meanings
ascribed to them in the Pooling and Servicing Agreement.
[____________________________],
as Trustee
By:____________________________
Authorized Representative
F-2
EXHIBIT G
FORM OF REQUEST FOR RELEASE
[date]
To:
In connection with the administration of the Mortgage Loans held by
you as Trustee under the Pooling and Servicing Agreement dated as of
[__________, 200_], between Credit Suisse First Boston Mortgage Securities
Corp., as Depositor, and you, as Trustee (the "Pooling and Servicing
Agreement"), the undersigned hereby requests a release of the Mortgage File held
by you as Trustee with respect to the following described Mortgage Loan for the
reason indicated below.
Mortgagor's Name:
Address:
Loan No.:
Reason for requesting file:
____ 1. Mortgage Loan paid in full.
(The Servicer hereby certifies that all amounts received in
connection with the Mortgage Loan have been or will be credited
to the Certificate Account pursuant to the Pooling and Servicing
Agreement.)
____ 2. Mortgage Loan repurchased.
(The Servicer hereby certifies that the Purchase Price has been
credited to the Certificate Account pursuant to the Pooling and
Servicing Agreement.)
____ 3. The Mortgage Loan is being foreclosed.
____ 4. Other. (Describe)
The undersigned acknowledges that the above Mortgage File will be held by
the undersigned in accordance with the provisions of the Pooling and Servicing
Agreement and will be returned, except if the Mortgage Loan has been paid in
full or repurchased (in which case the Mortgage File will be retained by us
permanently) when no longer required by us for such purpose.
Capitalized terms used herein shall have the meanings ascribed to them in
the Pooling and Servicing Agreement.
G-1
[SERVICER]
By:_______________________________
Name:
Title:
G-2
EXHIBIT H
FORM OF INVESTOR REPRESENTATION LETTER
[date]
Credit Suisse First Boston Mortgage Securities Corp.
▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
[---------------------]
[---------------------]
[---------------------]
Re: [__________________] Mortgage-Backed Pass-Through
Certificates, Series 200_-___
Ladies and Gentlemen:
[_] (the "Purchaser") intends to purchase from [_] (the "Seller") the
[_________________] Mortgage-Backed Pass-Through Certificates, Series 200_-____
[Class S] [Class R-I] [Class R-II] (together, the "Certificates"), issued
pursuant to the Pooling and Servicing Agreement (the "Pooling and Servicing
Agreement"), dated as of [__________, 200_] among Credit Suisse First Boston
Mortgage Securities Corp., as Depositor (the "Company"), [__________________],
as seller and servicer, and [____________________], as trustee (the "Trustee").
All terms used herein and not otherwise defined shall have the meanings set
forth in the Pooling and Servicing Agreement. The Purchaser hereby certifies,
represents and warrants to, and covenants with, the Company and the Trustee
that:
1. The Purchaser understands that (a) the Certificates have not been
and will not be registered or qualified under the Securities Act of 1933, as
amended (the "Act") or any state securities law, (b) the Company is not required
to so register or qualify the Certificates, (c) the Certificates may be resold
only if registered and qualified pursuant to the provisions of the Act or any
state securities law, or if an exemption from such registration and
qualification is available, (d) the Pooling and Servicing Agreement contains
restrictions regarding the transfer of the Certificates and (e) the Certificates
will bear a legend to the foregoing effect.
2. The Purchaser is acquiring the Certificates for its own account
for investment only and not with a view to or for sale in connection with any
distribution thereof in any manner that would violate the Act or any applicable
state securities laws.
3. The Purchaser is (a) a substantial, sophisticated institutional
investor having such knowledge and experience in financial and business matters,
and, in particular, in such matters related to securities similar to the
Certificates, such that it is capable of evaluating the merits and risks of
investment in the Certificates, (b) able to bear the economic risks of such an
investment and (c) an "accredited investor" within the meaning of Rule 501(a)
promulgated pursuant to the Act.
H-1
4. The Purchaser has been furnished with, and has had an opportunity
to review (a) a copy of the Pooling and Servicing Agreement and (b) such other
information concerning the Certificates, the Mortgage Loans and the Company as
has been requested by the Purchaser from the Company or the Seller and is
relevant to the Purchaser's decision to purchase the Certificates. The Purchaser
has had any questions arising from such review answered by the Company or the
Seller to the satisfaction of the Purchaser.
5. The Purchaser has not and will not nor has it authorized or will
it authorize any person to (a) offer, pledge, sell, dispose of or otherwise
transfer any Certificate, any interest in any Certificate or any other similar
security to any person in any manner, (b) solicit any offer to buy or to accept
a pledge, disposition of other transfer of any Certificate, any interest in any
Certificate or any other similar security from any person in any manner, (c)
otherwise approach or negotiate with respect to any Certificate, any interest in
any Certificate or any other similar security with any person in any manner, (d)
make any general solicitation by means of general advertising or in any other
manner or (e) take any other action, that (as to any of (a) through (e) above)
would constitute a distribution of any Certificate under the Act, that would
render the disposition of any Certificate a violation of Section 5 of the Act or
any state securities law, or that would require registration or qualification
pursuant thereto. The Purchaser will not sell or otherwise transfer any of the
Certificates, except in compliance with the provisions of the Pooling and
Servicing Agreement.
6. The Purchaser
(a) is not an employee benefit or other plan subject to the
prohibited transaction provisions of the Employee Retirement Income Security Act
of 1974, as amended ("ERISA"), or Section 4975 of the Internal Revenue Code of
1986, as amended (the "Code") (a "Plan"), or any other person (including an
investment manager, a named fiduciary or a trustee of any Plan) acting, directly
or indirectly, on behalf of or purchasing any Certificate with "plan assets" of
any Plan; or
(b) is an insurance company, the source of funds to be used by it to
purchase the Certificates is an "insurance company general account" (within the
meaning of Department of Labor Prohibited Transaction Class Exemption ("PTCE")
95-60), and the purchase is being made in reliance upon the availability of the
exemptive relief afforded under Section III of PTCE 95-60.
Very truly yours,
[Purchaser]
By:
Name:__________________
Title:
H-2
EXHIBIT I
FORM OF TRANSFEROR REPRESENTATION LETTER
[date]
Credit Suisse First Boston Mortgage Securities Corp.
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Re: [_________________________] Mortgage-Backed Pass-Through
Certificates, Series 200_-___
Ladies and Gentlemen:
In connection with the sale by [_] (the "Seller") to [_] (the "Purchaser")
the [__________________] Mortgage-Backed Pass-Through Certificates, Series
200_-____ [Class S] [Class R-I] [Class R-II] (together, the "Certificates"),
issued pursuant to the Pooling and Servicing Agreement (the "Pooling and
Servicing Agreement"), dated as of [__________, 200_] among Credit Suisse First
Boston Mortgage Securities Corp., as Depositor (the "Company"),
[___________________], as seller and servicer, and [__________________], as
trustee (the "Trustee"), the Seller hereby certifies, represents and warrants
to, and covenants with, the Company and the Trustee that:
Neither the Seller nor anyone acting on its behalf has (a) offered,
pledged, sold, disposed of or otherwise transferred any Certificate, any
interest in any Certificate or any other similar security to any person in any
manner, (b) has solicited any offer to buy or to accept a pledge, disposition or
other transfer of any Certificate, any interest in any Certificate or any other
similar security from any person in any manner, (c) has otherwise approached or
negotiated with respect to any Certificate, any interest in any Certificate or
any other similar security with any person in any manner, (d) has made any
general solicitation by means of general advertising or in any other manner, or
(e) has taken any other action, that (as to any of (a) through (e) above) would
constitute a distribution of the Certificates under the Securities Act of 1933
(the "Act"), that would render the disposition of any Certificate a violation of
Section 5 of the Act or any state securities law, or that would require
registration or qualification pursuant thereto. The Seller will not act, in any
manner set forth in the foregoing sentence with respect to any Certificate. The
Seller has not and will not sell or otherwise transfer any of the Certificates,
except in compliance with the provisions of the Pooling and Servicing Agreement.
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Very truly yours,
[Seller]
By:______________________
Name:
Title:
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EXHIBIT J
FORM OF INVESTOR TRANSFER AFFIDAVIT AND AGREEMENT
STATE OF )
: ss.:
COUNTY OF )
[NAME OF OFFICER], being first duly sworn, deposes and says:
1. That he is [Title of Officer] or [Name of Owner] (record or beneficial
owner (the "Owner") of the Class [R-I] [R-II] Certificates (the "Class R
Certificates")), a [savings institution] [corporation] duly organized and
existing under the laws of [the State of ] [the United States], on behalf of
which he makes this affidavit and agreement.
2. That the Owner (i) is not and will not be a "disqualified organization"
as of [date of transfer] within the meaning of Section 860E(e)(5) of the
Internal Revenue Code of 1986, as amended (the "Code"), (ii) will endeavor to
remain other than a disqualified organization for so long as it retains its
ownership interest in the Class R Certificates, and (iii) is acquiring the Class
R Certificates for its own account or for the account of another Owner from
which it has received an affidavit and agreement in substantially the same form
as this affidavit and agreement. A "Permitted Transferee" is any person other
than a "disqualified organization". (For this purpose, a "disqualified
organization" means the United States, any state or political subdivision
thereof, any agency or instrumentality of any of the foregoing (other than an
instrumentality all of the activities of which are subject to tax and, except
for the Federal Home Loan Mortgage Corporation, a majority of whose board of
directors is not selected by any such governmental entity) or any foreign
government, international organization or any agency or instrumentality of such
foreign government or organization, any rural electric or telephone cooperative,
or any organization (other than certain farmers' cooperatives) that is generally
exempt from federal income tax unless such organization is subject to the tax on
unrelated business taxable income).
3. That the Owner is aware (i) of the tax that would be imposed on
transfers of Class R Certificates to disqualified organizations under the Code;
(ii) that such tax would be on the transferor, or, if such transfer is through
an agent (which person includes a broker, nominee or middleman) for a
non-Permitted Transferee, on the agent; (iii) that the person otherwise liable
for the tax shall be relieved of liability for the tax if the transferee
furnishes to such person an affidavit that the transferee is a Permitted
Transferee and, at the time of transfer, such person does not have actual
knowledge that the affidavit is false; and (iv) that the Class R Certificates
may be "noneconomic residual interests" within the meaning of 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, if a significant purpose of the
transfer was to enable the transferor to impede the assessment or collection of
tax.
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4. That the Owner is aware of the tax imposed on a "pass-through entity"
holding Class R Certificates if at any time during the taxable year of the
pass-through entity a non-Permitted Transferee is the record holder of an
interest in such entity. (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.)
5. That the Owner is aware that the Trustee will not register the Transfer
of any Class R Certificates unless the transferee, or the transferee's agent,
delivers to it an affidavit and agreement, among other things, in substantially
the same form as this affidavit and agreement. The Owner expressly agrees that
it will not consummate any such transfer if it knows or believes that any of the
representations contained in such affidavit and agreement are false.
6. That the Owner has reviewed the restrictions set forth on the face of
the Class R Certificates and the provisions of Section 6.02 of the Pooling and
Servicing Agreement under which the Class R Certificates were issued. The Owner
expressly agrees to be bound by and to comply with such restrictions and
provisions.
7. That the Owner consents to any additional restrictions or arrangements
that shall be deemed necessary upon advice of counsel to constitute a reasonable
arrangement to ensure that the Class R Certificates will only be owned, directly
or indirectly, by an Owner that is a Permitted Transferee.
8. That the Owner's Taxpayer Identification Number is ______________ .
9. That the Owner is a citizen or resident of the United States, a
corporation, partnership or other entity created or organized in, or under the
laws of, the United States or any political subdivision thereof, or an estate or
trust whose income from sources without the United States is includable in gross
income for United States federal income tax purposes regardless of its
connection with the conduct of a trade or business within the United States.
10. That no purpose of the Owner relating to the purchase of the Class R
Certificate by the Owner is or will be to impede the assessment or collection of
tax.
11. That the Owner has no present knowledge or expectation that it will be
unable to pay any United States taxes owed by it so long as any of the
Certificates remain outstanding.
12. That the Owner has no present knowledge or expectation that it will
become insolvent or subject to a bankruptcy proceeding for so long as any of the
Certificates remain outstanding.
13. That no purpose of the Owner relating to any sale of the Class R
Certificate by the Owner will be to impede the assessment or collection of tax.
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14. The Owner hereby agrees to cooperate with the Trustee and to take any
action required of it by the Code or Treasury regulations thereunder (whether
now or hereafter promulgated) in order to create or maintain the REMIC status of
the Trust Fund.
15. The Owner hereby agrees that it will not take any action that could
endanger the REMIC status of the Trust Fund or result in the imposition of tax
on the Trust Fund unless counsel for, or acceptable to, the Trustee has provided
an opinion that such action will not result in the loss of such REMIC status or
the imposition of such tax, as applicable.
IN WITNESS WHEREOF, the Owner has caused this instrument to be executed on
its behalf, pursuant to the authority of its Board of Directors, by its [Title
of Officer] and its corporate seal to be hereunto attached, attested by its
[Assistant] Secretary, this ____ day of.
[NAME OF OWNER]
By:_______________________
[Name of Officer]
[Title of Officer]
[Corporate Seal]
ATTEST:
____________________________
[Assistant] Secretary
Personally appeared before me the above-named [Name of Officer],
known or proved to me to be the same person who executed the foregoing
instrument and to be the [Title of Officer] of the Owner, and acknowledged to me
that he executed the same as his free act and deed and the free act and deed of
the Owner.
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Subscribed and sworn before me this ____ day of _________________.
______________________________
NOTARY PUBLIC
COUNTY OF______________________
STATE OF ______________________
My Commission expires the ____ day of _________ , 20__.
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EXHIBIT K
FORM OF TRANSFER CERTIFICATE
[date]
Credit Suisse First Boston Mortgage Securities Corp.
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Re: [_________________________] Mortgage-Backed Pass-Through
Certificates, Series 200_-___, Class [R-I]
[R-II] (the "CERTIFICATES")
Ladies and Gentlemen:
This letter is delivered to you in connection with the sale by
_____________________ (the "Seller") to _________________ (the "Purchaser") of a
____% Percentage Interest in the above referenced Certificates, pursuant to
Section 6.02 of the Pooling and Servicing Agreement (the "Pooling and Servicing
Agreement"), dated as of [___________, 200_] among Credit Suisse First Boston
Mortgage Securities Corp. as depositor (the "Depositor"),
[_______________________], as trustee (the "Trustee") and [________________], as
seller and servicer. All terms used herein and not otherwise defined shall have
the meanings set forth in the Pooling and Servicing Agreement. The Seller hereby
certifies, represents and warrants to, and covenants with, the Depositor and the
Trustee that:
1. No purpose of the Seller relating to sale of the Certificate by
the Seller to the Purchaser is or will be to enable the Seller to impede the
assessment or collection of any tax.
2. The Seller understands that the Purchaser has delivered to the
Trustee a transfer affidavit and agreement in the form attached to the Pooling
and Servicing Agreement as Exhibit J. The Seller does not know or believe that
any representation contained therein is false.
3. The Seller has no actual knowledge that the proposed Transferee is
not a Permitted Transferee.
4. The Seller has no actual knowledge that the Purchaser would be
unwilling or unable to pay taxes due on its share of the taxable income
attributable to the Certificate.
5. The Seller has conducted a reasonable investigation of the
financial condition of the Purchaser and, as a result of the investigation,
found that the Purchaser has
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historically paid its debts as they came due, and found no significant evidence
to indicate that the Purchaser will not continue to pay its debts as they come
due in the future.
6. The Purchaser has represented to the Seller that, if the
Certificate constitutes a noneconomic residual interest, it (i) understands that
as holder of a noneconomic residual interest it may incur tax liabilities in
excess of any cash flows generated by the interest, and (ii) intends to pay
taxes associated with its holding of the Certificate as they become due.
Very truly yours,
[SELLER]
By:________________________________
Name:
Title:
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EXHIBIT L
CERTIFICATE GUARANTY INSURANCE POLICY