EXECUTION COPY
CREDIT SUISSE FIRST BOSTON MORTGAGE SECURITIES CORP.,
Depositor
THE CIT GROUP/SALES FINANCING, INC.,
Servicer
DLJ MORTGAGE CAPITAL, INC.
Seller
OLYMPUS SERVICING, L.P.,
Special Servicer
and
JPMORGAN CHASE BANK,
Trustee
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POOLING AND SERVICING AGREEMENT
Dated as of March 24, 2002
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CSFB ABS Trust Series 2002-MH3
CSFB MANUFACTURED HOUSING PASS-THROUGH CERTIFICATES,
SERIES 2002-MH3
TABLE OF CONTENTS
PAGE
PRELIMINARY STATEMENT.............................................1
ARTICLE I DEFINITIONS..........................................4
SECTION 1.01 Definitions..................................4
SECTION 1.02 Interest Calculations.......................42
ARTICLE II CONVEYANCE OF CONTRACTS; REPRESENTATIONS AND
WARRANTIES 43
SECTION 2.01 Conveyance of Contracts.....................43
SECTION 2.02 Acceptance by the Trustee of the Contracts..45
SECTION 2.03 Representations and Warranties of the
Seller, the Depositor, the Servicer and
the Special Servicer........................47
SECTION 2.04 Representations and Warranties of the
Depositor as to the Contracts...............55
SECTION 2.05 Delivery of Opinion of Counsel in
Connection with Substitutions...............56
SECTION 2.06 Execution and Delivery of Certificates......56
SECTION 2.07 Covenants of the Servicer and
Special Servicer............................56
ARTICLE III ADMINISTRATION AND SERVICING OF MORTGAGE LOANS......57
SECTION 3.01 Servicer to Service Contracts...............57
SECTION 3.02 Subservicing; Enforcement of the
Obligations of Subservicers.................58
SECTION 3.03 Records; Inspection.........................58
SECTION 3.04 Enforcement.................................58
SECTION 3.05 Trustee to Act as Servicer..................59
SECTION 3.06 Collection of Contracts; Collection
Account; Certificate Account................60
SECTION 3.07 Permitted Withdrawals from the Collection
Accounts and Certificate Account............62
SECTION 3.08 Maintenance of Hazard Insurance,
Collections under Hazard Insurance Policies
Consent to Transfers of Manufactured Homes,
Assumption Agreements Fidelity
Bond and Errors and Omissions Insurance.....64
SECTION 3.09 Realization Upon Defaulted Contracts........66
SECTION 3.10 Trustee to Cooperate; Release of Contract
Documents...................................67
SECTION 3.11 Documents, Records and Funds in Possession
of a Servicer to be Held for the Trustee....68
SECTION 3.12 Servicing Fee...............................68
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SECTION 3.13 Access to Certain Documentation.............68
SECTION 3.14 Annual Statement as to Compliance...........69
SECTION 3.15 Annual Independent Public Accountants'
Servicing Statement; Financial Statements...69
SECTION 3.16 REMIC Compliance............................69
SECTION 3.17 Duties of the Credit Risk Manager...........73
SECTION 3.18 Special Serviced Contracts..................73
SECTION 3.19 Simple Interest Deficiencies................74
ARTICLE IV DISTRIBUTIONS AND ADVANCES BY THE SERVICER..........76
SECTION 4.01 Advances by the Servicer....................76
SECTION 4.02 Priority of Distributions...................77
SECTION 4.03 REMIC I Realized Losses.....................81
SECTION 4.04 Monthly Statements to Certificateholders....81
SECTION 4.05 Servicer to Cooperate.......................84
SECTION 4.06 Guarantee Agreement.........................84
ARTICLE V THE CERTIFICATES....................................86
SECTION 5.01 The Certificates............................86
SECTION 5.02 Certificate Register; Registration
of Transfer and Exchange of Certificates....86
SECTION 5.03 Mutilated, Destroyed, Lost or Stolen
Certificates................................92
SECTION 5.04 Persons Deemed Owners.......................93
SECTION 5.05 Access to List of Certificateholders'
Names and Addresses.........................93
SECTION 5.06 Maintenance of Office or Agency.............93
ARTICLE VI THE DEPOSITOR, THE SELLER, THE SERVICER AND THE
SPECIAL SERVICER....................................94
SECTION 6.01 Respective Liabilities of the Depositor,
the Seller, the Servicer and the Special
Servicer....................................94
SECTION 6.02 Merger or Consolidation of the Depositor,
the Seller or the Servicer..................94
SECTION 6.03 Limitation on Liability of the Depositor,
the Seller, the Servicer and Others.........94
SECTION 6.04 Limitation on Resignation of the Servicer...95
SECTION 6.05 Limitation Upon Liability of the Credit
Risk Manager................................95
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ARTICLE VII DEFAULT.............................................96
SECTION 7.01 Events of Default...........................96
SECTION 7.02 Trustee to Act; Appointment of Successor....97
SECTION 7.03 Notification to Certificateholders..........98
ARTICLE VIII CONCERNING THE TRUSTEE..............................99
SECTION 8.01 Duties of the Trustee.......................99
SECTION 8.02 Certain Matters Affecting the Trustee......100
SECTION 8.03 Trustee Not Liable for Certificates or
Contracts..................................101
SECTION 8.04 Trustee May Own Certificates...............101
SECTION 8.05 Trustee's Fees and Expenses................101
SECTION 8.06 Eligibility Requirements for the Trustee...102
SECTION 8.07 Resignation and Removal of the Trustee.....103
SECTION 8.08 Successor Trustee..........................103
SECTION 8.09 Merger or Consolidation of the Trustee.....104
SECTION 8.10 Appointment of Co-Trustee or Separate
Trustee....................................104
SECTION 8.11 Periodic Filings...........................105
SECTION 8.12 Trust Obligations..........................106
SECTION 8.13 Indemnification with Respect to Certain
Taxes and Loss of REMIC Status.............106
ARTICLE IX TERMINATION........................................107
SECTION 9.01 Termination upon Liquidation or Purchase
of the Contracts...........................107
SECTION 9.02 Final Distribution on the Certificates.....107
SECTION 9.03 Additional Termination Requirements........108
ARTICLE X MISCELLANEOUS PROVISIONS...........................110
SECTION 10.01 Amendment..................................110
SECTION 10.02 Recordation of Agreement; Counterparts.....111
SECTION 10.03 Governing Law..............................112
SECTION 10.04 Intention of Parties.......................112
SECTION 10.05 Notices....................................112
SECTION 10.06 Severability of Provisions.................113
SECTION 10.07 Assignment.................................113
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SECTION 10.08 Limitation on Rights of Certificateholders.113
SECTION 10.09 Certificates Nonassessable and Fully Paid..114
SECTION 10.10 Purposes and Powers of the Trust Fund......114
EXHIBITS
EXHIBIT A Form of Class A Certificates
EXHIBIT B Form of Class M and Class B-1 Certificates
EXHIBIT C Form of Class B-2 Certificate
EXHIBIT D Form of Residual Certificate
EXHIBIT E Form of Class SB Certificate
EXHIBIT F Form of Initial Certification of Trustee
EXHIBIT G Form of Final Certification of Trustee
EXHIBIT H-1 Transfer of Affidavit
EXHIBIT H-2 Form of Transferor Certificate
EXHIBIT I Form of Investor Representation Letter
EXHIBIT J Form of Investment Letter (Non-rule 144A)
EXHIBIT K Form of Rule 144A Letter
EXHIBIT L Request for Release
SCHEDULE I Contract Schedule
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THIS POOLING AND SERVICING AGREEMENT, dated as of March 24, 2002, among
CREDIT SUISSE FIRST BOSTON MORTGAGE SECURITIES CORP., a Delaware corporation,
as the depositor (the "Depositor"), DLJ MORTGAGE CAPITAL, INC., as seller
(the "Seller"), THE CIT GROUP/SALES FINANCING, INC., a Delaware corporation
(the "Servicer"), OLYMPUS SERVICING, L.P., a Delaware limited partnership, as
the special servicer (the "Special Servicer") and JPMorgan Chase Bank, a New
York corporation, as the trustee (the "Trustee").
WITNESSETH THAT
In consideration of the mutual agreements herein contained, the parties
hereto agree as follows:
PRELIMINARY STATEMENT
The Depositor intends to sell manufactured housing pass-through
certificates (collectively, the "Certificates"), to be issued hereunder in
eight classes, which in the aggregate will evidence the entire beneficial
ownership interest in the Contracts (as defined herein). As provided herein,
the REMIC Administrator will make an election to treat the entire segregated
pool of assets relating to the Contracts, as described in the definition of
REMIC I below, as a real estate mortgage investment conduit (a "REMIC") for
federal income tax purposes, and such segregated 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
REMITTANCE UNCERTIFICATED POSSIBLE
DESIGNATION RATE BALANCE MATURITY(1)
I-LT1 Variable(2) $106,447,914.31 December 2031
I-LT2 Variable(2) $4,036.49 December 2031
I-LT3 0% $6,610.02 December 2031
I-LT4 Variable(2) $6,610.02 December 2031
__________________
(1) Solely for purposes of Section 1.860G-1(a)(4)(iii) of the
Treasury regulations, the Distribution Date occurring in the
third month following the maturity date for the Contract 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 REMIC Administrator 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
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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, remittance rate (the "REMIC II Remittance Rate")
and the initial Certificate Balance for each of the "regular interests" in
REMIC II (the "REMIC II Regular Interests"). The "latest possible maturity
date" (determined solely for purposes of satisfying Treasury regulation
Section 1.860G-1(a)(4)(iii)) for each REMIC II Regular Interest shall be the
first Distribution Date that follows the stated maturity date for the
Contract included in the Trust Fund as of the Closing Date with the longest
remaining term to stated maturity.
Initial
Pass-Through Certificate Minimum
Designation Rate Balance Denomination(1) Maturity Date
A 6.700%(2) $79,320,000 $25,000 December 25, 2031
M-1 7.617%(2) $6,920,000 $25,000 December 25, 2031
M-2 8.156%(2) $5,850,000 $25,000 December 25, 2031
B-1 (3) $5,060,000 $25,000 December 25, 2031
B-2 (4) $5,060,000 $250,000 December 25, 2031
SB (5) $4,255, 121 (6) December 25, 2031
(1) The Certificates, other than the Class SB Certificates and Class R
Certificates, shall be issuable in minimum dollar denominations as indicated
above (by Certificate) and integral multiples of $1 in excess thereof.
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(2) To the extent that the stated fixed rate exceeds the Net Funds Cap,
its payment will depend on the availability of sufficient related Excess
Optimal Interest in the current or future periods to pay such excess.
(3) The Pass-Through Rate for the REMIC II Regular Interest B-1 shall be
the lesser of 9.135% and the Net Funds Cap.
(4) The Pass-Through Rate for REMIC II Regular Interest B-2 shall be the
lesser of 9.350% per annum and the Net Funds Cap.
(5) For purposes of the REMIC Provisions, the Class SB Certificates
shall be comprised of two regular interests: The REMIC I Regular Interest
SB-PO with a principal balance of $4,255,121 and bearing no interest; and the
REMIC I Regular Interest SB-IO which has no initial principal balance and
bears interest as described in the definition of "Pass-Through Rate." To the
extent that interest accrued on the REMIC I Regular Interest SB-IO is not
paid currently, the REMIC I Regular Interest SB-IO in a later period may have
a principal balance equal to the excess, if any, of the Pool Scheduled
Principal Balance over the sum of (a) the aggregate Certificate Balances of
the Certificates (other than the Class SB Certificates) and (b) the then
current principal balance of the REMIC I Regular Interest SB-PO. Amounts
applied as payments of principal in respect of the Class SB Certificates
shall be deemed to first reduce the principal balance ascribed to the REMIC I
Regular Interest SB-IO until such principal balance shall have been reduced
to zero and then to reduce the principal balance of the REMIC I Regular
Interest SB-PO.
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(6) The Class SB Certificates will be issued as a single certificate.
The Contracts have an aggregate Cut-off Date Principal Balance equal to
$106,465,220.85. The Contracts are fixed-rate and have terms to maturity at
origination or modification of not more than 30 years.
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ARTICLE I..
DEFINITIONS
SECTION 1.01 DEFINITIONS.
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Whenever used in this Agreement, the following words and phrases, unless
the context otherwise requires, shall have the following meanings:
ACCEPTED SERVICING PRACTICES: With respect to any Contract, those
servicing practices (including collection procedures) of prudent mortgage
banking institutions which service manufactured housing installment sales
contracts or mortgage loans, as applicable, of the same type as such
Contract in the jurisdiction where the related Collateral is located.
ACCRUAL PERIOD: With respect to any Certificates and any Distribution
Date, the calendar month preceding the month in which such Distribution Date
occurs (except that with respect to interest distributions made on the first
Distribution Date, the Accrual Period will be from and including the Cut-off
Date to and including April 30, 2002).
ACCRUED CERTIFICATE INTEREST: With respect to each Distribution Date
and the REMIC I or REMIC II Regular Interests, the Uncertificated Accrued
Interest for such Regular Interest. With respect to the Class SB
Certificates, interest accrued during the related Accrual Period at the
Pass-Through Rate for such Certificate on the related Notional Amount for such
Distribution Date.
ADVANCE: As defined in Section 4.01(a) hereof.
ADVERSE REMIC EVENT: As defined in Section 3.16(f) hereof.
AGREEMENT: This Pooling and Servicing Agreement and all amendments or
supplements hereto.
ANCILLARY INCOME: All income derived from the Contracts, other than
Servicing Fees, including but not limited to, late charges, fees received with
respect to checks or bank drafts returned by the related bank for non-sufficient
funds, assumption fees, optional insurance administrative fees and all other
incidental fees and charges, including investment income on the applicable
Collection Account.
APPRAISED VALUE: The market value of any Collateral as set forth in the
appraisal made for the Originator at the time of origination in conjunction with
the origination of the Contract.
ASSIGNMENT OF CONTRACT: A master assignment of the Contracts, notice of
transfer or equivalent instrument sufficient to transfer title of the Contract
to the Trustee.
ASSIGNMENT OF MORTGAGE: An assignment of the Mortgage, notice of transfer
or equivalent instrument in recordable form, prepared in blank, sufficient under
the laws of the jurisdiction wherein the related Mortgaged Property is located
to give record notice of the sale of the Mortgage to the Depositor, if recorded.
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AVERAGE SIXTY-DAY DELINQUENCY RATIO: With respect to the first Distribution
Date, the Delinquency Rate for the related Due Period; with respect to the
second Distribution Date, the arithmetic average of the Delinquency Rates for
the related Due Period and the preceding Due Period; and with respect to any
Distribution Date thereafter, the arithmetic average of the Delinquency Rates
for the related Due Period and the two preceding Due Periods.
BANKRUPTCY CODE: The United States Bankruptcy Reform Act of 1978, as
amended.
BOOK-ENTRY CERTIFICATES: All Classes of Certificates other than the
Physical Certificates.
BUSINESS DAY: Any day other than (i) a Saturday or a Sunday, or (ii) a day
on which banking institutions in the City of New York, New York, or the city in
which the Corporate Trust Office of the Trustee is located, or savings and loan
institutions in the States of California, Florida, Illinois, Minnesota or Texas
are authorized or obligated by law or executive order to be closed.
CERTIFICATE: Any one of the Certificates executed by the Trustee in
substantially the forms attached hereto as exhibits.
CERTIFICATE ACCOUNT: The separate Eligible Account created and maintained
with the Trustee, or any other bank or trust company acceptable to the Rating
Agencies which is incorporated under the laws of the United States or any state
thereof pursuant to Section 3.06(d), which account shall bear a designation
clearly indicating that the funds deposited therein are held in trust for the
benefit of the Trustee on behalf of the Certificateholders or any other account
serving a similar function acceptable to the Rating Agencies.
CERTIFICATE BALANCE: Each of the Class A Certificate Balance, the Class R-I
Certificate Balance, the Class R-II Certificate Balance, the Class M-1
Certificate Balance, the Class M-2 Certificate Balance, the Class B-1
Certificate Balance, or the Class B-2 Certificate Balance, as applicable.
CERTIFICATE OWNER: With respect to a Book-Entry Certificate, the Person who
is the beneficial owner of such Book-Entry Certificate.
CERTIFICATE REGISTER: The register maintained pursuant to Section 5.02.
CERTIFICATEHOLDER OR HOLDER: The person in whose name a Certificate is
registered in the Certificate Register, except that, solely for the purpose of
giving any consent pursuant to this Agreement, any Certificate registered in the
name of the Depositor or any affiliate of the Depositor shall be deemed not to
be Outstanding and the Percentage Interest evidenced thereby shall not be taken
into account in determining whether the requisite amount of Percentage Interests
necessary to effect such consent has been obtained; provided, however, that if
any such Person (including the Depositor) owns 100% of the Percentage Interests
evidenced by a Class of Certificates, such Certificates shall be deemed to be
Outstanding for purposes of any provision hereof that requires the consent of
the Holders of Certificates of a particular Class as a condition to the taking
of any action hereunder. The Trustee is entitled to rely conclusively on a
certification of the Depositor or any affiliate of the Depositor in determining
which Certificates are registered in the name of an affiliate of the Depositor.
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CLASS: All Certificates bearing the same class designation as set forth in
the Preliminary Statement.
CLASS A CERTIFICATE: Any one of the Class A Certificates, executed and
authenticated as provided herein, substantially in the form set forth in EXHIBIT
A hereto.
CLASS A CERTIFICATE BALANCE: At any time, the Initial Class A Certificate
Balance minus the sum of all principal distributions previously made to the
Class A Certificateholders.
CLASS A DISTRIBUTION AMOUNT: With respect to any Distribution Date, the
total amount distributed to the Class A Certificateholders pursuant to Section
4.02.
CLASS A EXCESS OPTIMAL INTEREST: With respect to the Class A Certificates
and a Distribution Date, an amount, if any, equal to the lesser of (a) the
product of (i) a per annum rate equal to the excess of (A) 6.70% per annum,
plus, if the Contracts are not purchased pursuant to Section 9.01(a) on the
Distribution Date succeeding the Optional Termination Date, 0.50% over (B) the
Net Funds Cap for such Distribution Date and (ii) the Class A Certificate
Balance and (b) an amount equal to the excess of (i) the total amount of
interest on the Contracts due during the related Due Period, whether or not
paid, over (ii) interest on all Classes of the Certificates at their related
Pass-Through Rates.
CLASS A FORMULA PRINCIPAL DISTRIBUTION AMOUNT: With respect to any
Distribution Date, the Class A Percentage multiplied by the Formula Principal
Distribution Amount. For any Distribution Date, if the Class A Formula Principal
Distribution Amount exceeds the Class A Certificate Balance less the Unpaid
Class A Principal Shortfall with respect to such Class and Distribution Date,
then such amounts shall be added to the Class M-1 Formula Principal Distribution
Amount.
CLASS A INTEREST DISTRIBUTION AMOUNT: With respect to any Distribution
Date, an amount equal to the sum of (a) (i) accrued interest during the related
Accrual Period at the Class A Pass-Through Rate on the Class A Certificate
Balance as of such Distribution Date (after giving effect to the principal
distributions on the previous Distribution Date) less (ii) the Class A
Certificates pro rata share of any Interest Shortfalls occurring during the
immediately preceding Due Period, (b) any Class A Excess Optimal Interest for
such Distribution Date and (c) any Class A Unpaid Interest Shortfall.
CLASS A INTEREST SHORTFALL: With respect to any Distribution Date, any
amount by which the amount distributed to Holders of Class A Certificates on
such Distribution Date is less than the amount computed pursuant to clauses (a)
and (b) of the definition of "Class A Interest Distribution Amount."
CLASS A PASS-THROUGH RATE: With respect to any Distribution Date, a rate
equal to the lesser of (i) 6.70% per annum, plus, if the Contracts are not
purchased pursuant to Section 9.01(a) on the Distribution Date succeeding the
Optional Termination Date, 0.50% and (ii) the Net Funds Cap.
CLASS A PERCENTAGE: With respect to any Distribution Date, on which the
Principal Distribution Tests have not been satisfied, 100%. With respect to any
Distribution Date on which the Principal Distribution Tests have been satisfied:
the percentage equivalent of a fraction (not to exceed one), the numerator of
which is the Class A Certificate Balance and the denominator of which is the sum
of (i) the Class A Certificate Balance; (ii) if the Class M-1 Principal
6
Distribution Test is satisfied on such Distribution Date, the Class M-1 Adjusted
Certificate Balance, otherwise, zero; (iii) if the Class M-2 Principal
Distribution Test is satisfied on such Distribution Date, the Class M-2 Adjusted
Certificate Balance, otherwise, zero; (iv) if the Class B-1 Principal
Distribution Test is satisfied on such Distribution Date, the Class B-1 Adjusted
Certificate Balance, otherwise, zero; and (v) if the Class B-2 Principal
Distribution Test is satisfied on such Distribution Date, the sum of the Class
B-2 Adjusted Certificate Balance and the Overcollateralization Amount,
otherwise, zero in each case determined as of the immediately preceding
Distribution Date (or as of the Closing Date in the case of the first
Distribution Date).
CLASS A PRINCIPAL SHORTFALL: With respect to any Distribution Date, the
excess of the Class A Formula Principal Distribution Amount over the amount
in respect of principal actually distributed to the Class A
Certificateholders on such Distribution Date.
CLASS A UNPAID INTEREST SHORTFALL: With respect to any Distribution
Date, the amount, if any, by which the aggregate of the Class A Interest
Shortfalls for prior Distribution Dates exceeds all prior distributions made
pursuant to Section 4.02(a) in respect of prior Class A Interest Shortfalls,
plus accrued interest thereon (to the extent payment thereof is legally
permissible) during the related Accrual Period at the Class A Pass-Through
Rate on such amount with respect to such prior Distribution Dates.
CLASS B ADJUSTED CERTIFICATE BALANCE: At any time, the sum of the Class B-1
Adjusted Certificate Balance and the Class B-2 Adjusted Certificate Balance.
CLASS B CERTIFICATE BALANCE: As of any Distribution Date, the sum of the
Class B-1 Certificate Balance and the Class B-2 Certificate Balance (before
giving effect to the principal distributions on such Distribution Date).
CLASS B CERTIFICATES: Any of the Class B-1 and Class B-2 Certificates.
CLASS B-1 ADJUSTED CERTIFICATE BALANCE: With respect to any Distribution
Date, the Class B-1 Certificate Balance as of such Distribution Date minus the
Class B-1 Liquidation Loss Amount as of such Distribution Date, if any.
CLASS B-1 CERTIFICATE: Any one of the Class B-1 Certificates, executed and
authenticated as provided herein, substantially in the form set forth in EXHIBIT
B hereto.
CLASS B-1 CERTIFICATE BALANCE: At any time, the Initial Class B-1
Certificate Balance minus the sum of all principal distributions previously made
to the Class B-1 Certificateholders (including distributions in respect of Class
B-1 Liquidation Loss Amounts pursuant to Section 4.02(c)).
CLASS B-1 DISTRIBUTION AMOUNT: With respect to any Distribution Date, the
total amount distributed to the Class B-2 Certificateholders pursuant to Section
4.02.
CLASS B-1 EXCESS OPTIMAL INTEREST: With respect to the Class B-1
Certificates and a Distribution Date, an amount, if any, equal to the lesser of
(a) the product of (i) a per annum rate equal to the excess of (A) 9.135% per
annum over (B) the Net Funds Cap for such Distribution Date and (ii) the Class
B-1 Adjusted Certificate Balance and (b) an amount equal to the excess of (i)
the total amount of interest on the Contracts due during the related Due Period,
whether or not paid, over (ii) interest on all Classes of the Certificates at
their related Pass-Through Rates plus the Class A Excess Optimal Interest, Class
7
M-1 Excess Optimal Interest and Class M-2 Excess Optimal Interest for such
Distribution Date.
CLASS B-1 EXCESS OPTIMAL INTEREST CARRYFORWARD AMOUNT: For any Distribution
Date, that portion of the class B-1 Unpaid Interest Shortfall that does not
exceed the sum of (a) the portion, if any, of the Class B-1 Excess Optimal
Interest for the prior Distribution Date that remains unpaid and (b) the
portion, if any, of the Class B-1 Excess Optimal Interest Carryforward Amount
for the prior Distribution Date that remains unpaid, together with interest on
such sum at the Pass-Through Rate.
CLASS B-1 FORMULA PRINCIPAL DISTRIBUTION AMOUNT: With respect to any
Distribution Date, the Class B-1 Percentage multiplied by the Formula Principal
Distribution Amount. For any Distribution Date, if the Class B-1 Formula
Principal Distribution Amount exceeds the Class B-1 Certificate Balance less the
Unpaid Class B-1 Principal Shortfall with respect to such Class and Distribution
Date, then such amounts shall be added to the Class B-2 Formula Principal
Distribution Amount.
CLASS B-1 INTEREST DISTRIBUTION AMOUNT: With respect to any Distribution
Date, an amount equal to sum of (a) (i) accrued interest during the related
Accrual Period at the Class B-1 Pass-Through Rate on the Class B-1 Adjusted
Certificate Balance as of such Distribution Date (before giving effect to the
principal distributions on such Distribution Date) less (ii) the Class B-1
Certificates pro rata share of any Interest Shortfalls occurring during the
immediately preceding Due Period, (b) any Class B-1 Excess Optimal Interest for
such Distribution Date and (c) any Class B-1 Unpaid Interest Shortfall. Amounts
paid in respect of the Class B-1 Interest Distribution Amount shall be deemed to
have been applied first to pay the amount described in clause (a), second to pay
the amount in clause (b) and third to pay the amount described in clause (c).
CLASS B-1 INTEREST SHORTFALL: With respect to any Distribution Date, any
amount by which the amount distributed to Holders of Class B-1 Certificates on
such Distribution Date is less than the amount computed pursuant to clauses (a)
and (b) of the definition of "Class B-1 Interest Distribution Amount."
CLASS B-1 LIQUIDATION LOSS AMOUNT: On or after the Distribution Date on
which the Class B-2 Adjusted Certificate Balance has been reduced to zero and on
or before the Distribution Date on which the Class B-1 Adjusted Certificate
Balance has been reduced to zero, the lesser of (i) the amount, if any, by which
the sum of the Class A, Class M and Class B-1 Certificate Balances exceeds the
Pool Scheduled Principal Balance and (ii) the Class B-1 Certificate Balance, in
each case after giving effect to all distributions of principal made on such
Distribution Date.
CLASS B-1 LIQUIDATION LOSS INTEREST AMOUNT: With respect to any
Distribution Date, an amount equal to interest at the Class B-1 Pass-Through
Rate during the related Accrual Period on the Class B-1 Liquidation Loss Amount,
if any, remaining unpaid after the immediately preceding Distribution Date.
CLASS B-1 PASS-THROUGH RATE: The lesser of (a) 9.135% per annum and (b) the
Net Funds Cap.
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CLASS B-1 PERCENTAGE: With respect to any Distribution Date, (i) if the
Class A Certificate Balance and the Class M Certificate Balance have not been
reduced to zero and each of the Principal Distribution Tests and the Class B-1
Principal Distribution Test have not been satisfied on such Distribution Date,
zero and (ii) (a) if the Class A Certificate Balance and the Class M Certificate
Balance has been reduced to zero or (b) if the Principal Distribution Tests and
the Class B-1 Principal Distribution Test have been satisfied on such
Distribution Date: the percentage equivalent of a fraction (not to exceed one),
the numerator of which is the Class B-1 Adjusted Certificate Balance and the
denominator of which is the sum of (i) the Class A Certificate Balance; (ii) if
the Class M-1 Principal Distribution Test has been satisfied on such
Distribution Date, the Class M-1 Adjusted Certificate Balance, otherwise zero;
(iii) if the Class M-2 Principal Distribution Test has been satisfied on such
Distribution Date, the Class M-2 Adjusted Certificate Balance, otherwise zero;
(iv) the Class B-1 Adjusted Certificate Balance; and (v) if the Class B-2
Principal Distribution Test is satisfied on such Distribution Date, the sum of
the Class B-2 Adjusted Certificate Balance and the Overcollateralization Amount,
otherwise, zero; in each case determined as of the immediately preceding
Distribution Date (or as of the Closing Date in the case of the first
Distribution Date).
CLASS B-1 PRINCIPAL DISTRIBUTION TEST: A test that will be satisfied on any
Distribution Date if the sum of the Class B-1 Adjusted Certificate Balance,
Class B-2 Adjusted Certificate Balance and the Overcollateralization Amount
divided by the Pool Scheduled Principal Balance as of the immediately preceding
Distribution Date equals or exceeds 33%.
CLASS B-1 PRINCIPAL SHORTFALL: With respect to any Distribution Date, the
excess, if any, of the Class B-1 Formula Principal Distribution Amount for such
Distribution Date over the amount in respect of principal actually distributed
to the Class B-1 Certificateholders on such Distribution Date.
CLASS B-1 SIMPLE INTEREST DEFICIENCY: With respect to any Distribution
Date, any deficiency in the Class B-1 Interest Distribution Amount resulting
from Net Simple Interest Shortfall.
CLASS B-1 SIMPLE INTEREST DEFICIENCY AMOUNT: With respect to any
Distribution Date, the aggregate of all amounts distributed to the Class B-1
Certificates in respect of Section 3.19 hereof in respect of Class B-1 Simple
Interest Deficiency.
CLASS B-1 UNPAID INTEREST SHORTFALL: With respect to any Distribution Date,
the amount, if any, by which the aggregate of the Class B-1 Interest Shortfalls
for prior Distribution Dates exceeds all prior distributions made pursuant to
Section 4.02(a) in respect of prior Class B-1 Interest Shortfalls, plus accrued
interest thereon (to the extent payment thereof is legally permissible) during
the related Accrual Period at the Class B-1 Pass-Through Rate on such amount
with respect to such prior Distribution Dates. Amounts paid in respect of the
Class B-1 Unpaid Interest Shortfall shall be deemed to have been applied, first,
to pay the portion, if any, thereof other than the Class B-1 Excess Optimal
Interest Carryforward Amount and, second, to pay the Class B-1 Excess Optimal
Interest Carryforward Amount.
CLASS B-1 UNPAID LIQUIDATION LOSS INTEREST SHORTFALL: With respect to any
Distribution Date on or after the Distribution Date on which the Class B-2
Adjusted Certificate Balance has been reduced to zero, the amount, if any, by
which the aggregate unreimbursed Class B-1 Liquidation Loss Interest Amounts for
one or more prior Distributions Dates exceeds the amount previously distributed
9
to the Class B-1 Certificateholders in respect of Liquidation Loss Interest
Amounts on one or more prior Distribution Dates.
CLASS B-2 ADJUSTED CERTIFICATE BALANCE: With respect to any Distribution
Date, the Class B-2 Certificate Balance as of such Distribution Date minus the
Class B-2 Liquidation Loss Amount as of such Distribution Date, if any.
CLASS B-2 CERTIFICATE: Any one of the Class B-2 Certificates, executed and
authenticated as provided herein, substantially in the form set forth in EXHIBIT
C hereto.
CLASS B-2 CERTIFICATE BALANCE: At any time, the Initial Class B-2
Certificate Balance minus the sum of all principal distributions previously made
to the Class B-2 Certificateholders (including distributions in respect of Class
B-2 Liquidation Loss Amounts pursuant to Section 4.02(c) and all amounts paid
under the Guarantee Agreement).
CLASS B-2 DISTRIBUTION AMOUNT: With respect to any Distribution Date, the
total amount distributed to the Class B-2 Certificateholders pursuant to Section
4.02.
CLASS B-2 EXCESS OPTIMAL INTEREST: With respect to the Class B-2
Certificates and a Distribution Date, an amount, if any, equal to the lesser of
(a) the product of (i) a per annum rate equal to the excess of (A) 9.35% per
annum over (B) the Net Funds Cap for such Distribution Date and (ii) the Class
B-2 Adjusted Certificate Balance and (b) an amount equal to the excess of (i)
the total amount of interest on the Contracts due during the related Due Period,
whether or not paid, over (ii) interest on all Classes of the Certificates at
their related Pass-Through Rates plus the Class A Excess Optimal Interest, Class
M-1 Excess Optimal Interest, Class M-2 Excess Optimal Interest and Class B-1
Excess Optimal Interest for such Distribution Date.
CLASS B-2 EXCESS OPTIMAL INTEREST CARRYFORWARD AMOUNT: For any Distribution
Date, that portion of the class B-2 Unpaid Interest Shortfall that does not
exceed the sum of (a) the portion, if any, of the Class B-2 Excess Optimal
Interest for the prior Distribution Date that remains unpaid and (b) the
portion, if any, of the Class B-2 Excess Optimal Interest Carryforward Amount
for the prior Distribution Date that remains unpaid, together with interest on
such sum at the Pass-Through Rate.
CLASS B-2 FORMULA PRINCIPAL DISTRIBUTION AMOUNT: With respect to any
Distribution Date, the Class B-2 Percentage multiplied by the Formula Principal
Distribution Amount. For any Distribution Date, if the Class B-2 Formula
Principal Distribution Amount exceeds the Class B-2 Certificate Balance less the
Unpaid Class B-2 Principal Shortfall with respect to such Class and Distribution
Date, then such amounts shall be added to the Class SB Certificates pursuant to
Section 4.02(c)(xv) or (xvi) hereof, as applicable.
CLASS B-2 INTEREST DISTRIBUTION AMOUNT: With respect to any Distribution
Date, an amount equal to the sum of (a) (i) accrued interest during the related
Accrual Period at the Class B-2 Pass-Through Rate on the Class B-2 Adjusted
Certificate Balance as of such Distribution Date (before giving effect to the
principal distributions on such Distribution Date) less (ii) the Class B-2
Certificates pro rata share of any Interest Shortfalls occurring during the
immediately preceding Due Period, (b) any Class B-2 Excess Optimal Interest for
such Distribution Date and (c) any Class B-2 Unpaid Interest Shortfall. Amounts
10
paid in respect of the Class B-2 Interest Distribution Amount shall be deemed to
have been applied first to pay the amount described in clause (a), second to pay
the amount in clause (b) and third to pay the amount described in clause (c).
CLASS B-2 INTEREST SHORTFALL: With respect to any Distribution Date, any
amount by which the amount distributed to Holders of Class B-2 Certificates on
such Distribution Date is less than the amount computed pursuant to clauses (a)
and (b) of the definition of "Class B-2 Interest Distribution Amount."
CLASS B-2 LIQUIDATION LOSS AMOUNT: On or before the Distribution Date prior
to which the Class B-2 Adjusted Certificate Balance has been reduced to zero,
the lesser of (i) the amount, if any, by which the sum of the Class A, Class M
and Class B Certificate Balances exceeds the Pool Scheduled Principal Balance
and (ii) the Class B-2 Certificate Balance, in each case after giving effect to
all distributions of principal made on such Distribution Date.
CLASS B-2 LIQUIDATION LOSS INTEREST AMOUNT: With respect to any
Distribution Date, an amount equal to interest at the Class B-2 Pass-Through
Rate during the related Accrual Period on the Class B-2 Liquidation Loss
Amount, if any, remaining unpaid after the immediately preceding Distribution
Date.
CLASS B-2 PASS-THROUGH RATE: The lesser of (a) 9.35% per annum and (b)
the Net Funds Cap.
CLASS B-2 PERCENTAGE: With respect to any Distribution Date, (i) if the
Class A Certificate Balance, the Class M Certificate Balance and the
Class B-1 Certificate Balance have not been reduced to zero and all of the
Principal Distribution Tests and the Class B-2 Principal Distribution Test
have not been satisfied on such Distribution Date, zero and (ii)(a) if the
Class A Certificate Balance, Class M Certificate Balance and the Class B-1
Certificate Balance have been reduced to zero or (b) if the Principal
Distribution Tests and the Class B-2 Principal Distribution Test have been
satisfied on such Distribution Date: the percentage equivalent of a fraction
(not to exceed one), the numerator of which is the Class B-2 Adjusted
Certificate Balance plus the Overcollateralization Amount and the denominator
of which is the sum of (i) the Class A Certificate Balance; (ii) if the
Class M-1 Principal Distribution Test has been satisfied on such Distribution
Date, the Class M-1 Adjusted Certificate Balance, otherwise zero; (iii) if
the Class M-2 Principal Distribution Test has been satisfied on such
Distribution Date, the Class M-2 Adjusted Certificate Balance, otherwise
zero; (iv) if the Class B-1 Principal Distribution Test has been satisfied on
such Distribution Date, the Class B-1 Adjusted Certificate Balance, otherwise
zero; and (v) the sum of the Class B-2 Adjusted Certificate Balance and the
Overcollateralization Amount; in each case determined as of the immediately
preceding Distribution Date (or as of the Closing Date in the case of the
first Distribution Date).
CLASS B-2 PRINCIPAL DISTRIBUTION TEST: A test that will be satisfied on any
Distribution Date if the sum of the Class B-2 Adjusted Certificate Balance and
the Overcollateralization Amount divided by the Pool Scheduled Principal Balance
as of the immediately preceding Distribution Date equals or exceeds 23.5%.
CLASS B-2 PRINCIPAL SHORTFALL: With respect to any Distribution Date, the
excess, if any, of the Class B-2 Formula Principal Distribution Amount for such
Distribution Date over the amount in respect of principal actually distributed
to the Class B-2 Certificateholders on such Distribution Date.
11
CLASS B-2 SIMPLE INTEREST DEFICIENCY: With respect to any Distribution
Date, any deficiency in the Class B-2 Interest Distribution Amount resulting
from Net Simple Interest Shortfall.
CLASS B-2 SIMPLE INTEREST DEFICIENCY AMOUNT: With respect to any
Distribution Date, the aggregate of all amounts distributed to the Class B-2
Certificates in respect of Section 3.19 hereof in respect of Class B-2 Simple
Interest Deficiency.
CLASS B-2 UNPAID INTEREST SHORTFALL: With respect to any Distribution Date,
the amount, if any, by which the aggregate of the Class B-2 Interest Shortfalls
for prior Distribution Dates exceeds all prior distributions made pursuant to
Section 4.02(a) in respect of prior Class B-2 Interest Shortfalls, plus accrued
interest thereon (to the extent payment thereof is legally permissible) during
the related Accrual Period at the Class B-2 Pass-Through Rate on such amount
with respect to such prior Distribution Dates. Amounts paid in respect of the
Class B-2 Unpaid Interest Shortfall shall be deemed to have been applied, first,
to pay the portion, if any, thereof other than the Class B-1 Excess Optimal
Interest Carryforward Amount and, second, to pay the Class B-2 Excess Optimal
Interest Carryforward Amount.
CLASS B-2 UNPAID LIQUIDATION LOSS INTEREST SHORTFALL: With respect to any
Distribution Date, the amount, if any, by which the aggregate unreimbursed Class
B-2 Liquidation Loss Interest Amounts for one or more prior Distributions Dates
exceeds the amount previously distributed to the Class B-2 Certificateholders in
respect of Liquidation Loss Interest Amounts on one or more prior Distribution
Dates.
CLASS I-LT PRINCIPAL REDUCTION AMOUNTS: For any Distribution Date, the
amounts by which the principal balances of the Class I-LT1, Class I-LT2, Class
I-LT3 and Class I-LT4 REMIC I Regular Interest respectively will be reduced on
such Distribution Date by the allocation of Realized Losses and the distribution
of principal, determined as follows:
For purposes of the succeeding formulas the following symbols shall have
the meanings set forth below:
Y1 = the principal balance of the Class I-LT1 REMIC I Regular Interest
after the allocation of REMIC I Realized Losses and making of
distributions on the prior Distribution Date.
Y2 = the principal balance of the Class I-LT2 REMIC I Regular Interest
after the allocation of REMIC I Realized Losses and making of
distributions on the prior Distribution Date.
Y3 = the principal balance of the Class I-LT3 REMIC I Regular Interest
after the allocation of REMIC I Realized Losses and making of
distributions on the prior Distribution Date.
Y4 = the principal balance of the Class I-LT4 REMIC I Regular Interest
after the allocation of REMIC I Realized Losses and making of
distributions on the prior Distribution Date (note: Y3 = Y4).
12
DELTA Y1 =the Class ▇-▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇.
▇▇▇▇▇ ▇▇ ▇▇▇▇ Class ▇-▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇.
▇▇▇▇▇ ▇▇ ▇▇▇▇ Class ▇-▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇.
▇▇▇▇▇ ▇▇ ▇▇▇▇ Class I-LT4 Principal Reduction Amount.
P0 = the aggregate principal balance of the Class I-LT1, Class I-LT2,
Class I-LT3, and Class I-LT4 REMIC I Regular Interest after
distributions and the allocation of Realized Losses on the prior
Distribution Date.
= the aggregate principal balance of the Contracts minus the
Class R-I Certificate Balance after giving effect to principal
payments distributed and Realized Losses allocated on the prior
Distribution Date.
P1 = the aggregate principal balance of the Class I-LT1, Class I-LT2,
Class I-LT3 and Class I-LT4 REMIC I Regular Interest after
distributions and the allocation of Realized Losses to be made on
such Distribution Date.
=the aggregate principal balance of the Contracts minus the
Class R-I Certificate Balance after giving effect to principal
payments distributed and Realized Losses allocated on such
Distribution Date.
DELTA P = P0 - P1 = the aggregate of the Class I-LT1, Class I-LT2, Class
I-LT3 and Class I-LT4 Principal Reduction Amounts.
= (A) the sum of (I) the aggregate of the Realized Losses
attributable to the Contracts for such Distribution Date and
allocated to principal by the definition of REMIC I Realized
Losses, (II) the portion of Principal Collections for such
Distribution Date attributable to the Contracts and (III) the
principal portion of amounts advanced for such Distribution Date in
respect of the Contracts minus (B) the portion of such amounts
allocable to the payment of principal on the Class R-I Certificates.
R0 = the weighted average of the Net Contract Rates (stated as a monthly
rate) after giving effect to amounts distributed and Realized
Losses allocated on the prior Distribution Date.
R1 = the weighted average of the Net Contract Rates (stated as a monthly
rate) after giving effect to amounts to be distributed and Realized
Losses to be allocated on such Distribution Date.
(alpha)= (Y2 + Y3)/P0. The initial value of (alpha) on the Closing
Date for use on the first Distribution Date shall be 0.0001.
(gamma)0 =the lesser of (A) the sum of (i)the sum for all Classes of
Class A, Class M and Class R Certificates of their respective
Interest Distribution Amounts and (ii) the sum for the REMIC II
Regular Interests B-1 and B-2 of the product of (a) the monthly
interest rate for such Interest and (b) the Certificate Balance for
such Interest after distributions and the allocation of Realized
Losses to be made on the prior Distribution Date and (B) Ro*Po.
(gamma)1 =the lesser of (A) the sum of (i) the sum for all Classes of
Class A, Class M and Class R Certificates of their respective
Interest Distribution Amounts and (ii) the sum for the REMIC II
Regular Interests B-1 and B-2 of the product of (a) the monthly
interest rate for such Interest and (b) the Certificate Balance for
13
such Interest after distributions and the allocation of Realized
Losses to be made on such Distribution Date and (B) R1*P1.
Then, based on the foregoing definitions:
(DELTA)Y1 =(DELTA)P - (DELTA)Y2 - (DELTA)Y3 - (DELTA)Y4;
(DELTA)Y2 =((alpha)/2){((gamma) 0R1 - (gamma)1R0)/R0R1};
(DELTA)Y3 =(alpha)(DELTA)P - (DELTA)Y2; and
(DELTA)Y4 =(DELTA)Y3. if both (DELTA)Y2 and (DELTA)Y3, as so determined,
are non-negative numbers. Otherwise:
(1)..If (DELTA)Y2, as so determined, is negative, then
(DELTA)Y2 = 0;
(DELTA)Y3 = {2(alpha)?PY2R1R0 - (▇▇▇▇▇)▇▇▇((▇▇▇▇▇)▇▇▇-
(▇▇▇▇▇)▇▇▇)}/{▇(▇▇▇▇▇)▇▇▇▇▇▇ - (▇▇▇▇▇)((▇▇▇▇▇)▇▇▇ - (▇▇▇▇▇)▇▇▇)};
(DELTA)Y4 = ?Y3; and
(DELTA)Y1 = (DELTA)P - (DELTA)Y2 - (DELTA)Y3 -(DELTA)Y4.
(2)..If (DELTA)Y3, as so determined, is negative, then
(DELTA)Y3 = 0;
(DELTA)Y2 = {(alpha)2P0((gamma)0R1 - (gamma)1R0)} -
2(alpha)(DELTA)PY2R1R0}/(2(alpha)Y2R1R0-2(alpha)(DELTA)PR1R0 +
(alpha)((gamma)0R1 - (gamma)1R0)};
(DELTA)Y4 = (DELTA)Y3; and
(DELTA)Y1 = (DELTA)P - (DELTA)Y2 - (DELTA)Y3 - (DELTA)Y4.
CLASS I-LT1 PRINCIPAL DISTRIBUTION AMOUNT: For any Distribution Date,
the excess, if any, of the Class I-LT1 Principal Reduction Amount for such
Distribution Date over the principal Realized Losses allocated to the Class
I-LT1 Certificates on such Distribution Date.
CLASS I-LT2 PRINCIPAL DISTRIBUTION AMOUNT: For any Distribution Date,
the excess, if any, of the Class I-LT2 Principal Reduction Amount for such
Distribution Date over the principal Realized Losses allocated to the Class
I-LT2 Certificates on such Distribution Date.
14
CLASS I-LT3 PRINCIPAL DISTRIBUTION AMOUNT: For any Distribution Date, the
excess, if any, of the Class I-LT3 Principal Reduction Amount for such
Distribution Date over the principal Realized Losses allocated to the Class
I-LT3 Certificates on such Distribution Date.
CLASS I-LT4 PRINCIPAL DISTRIBUTION AMOUNT: For any Distribution Date, the
excess, if any, of the Class I-LT4 Principal Reduction Amount for such
Distribution Date over the principal Realized Losses allocated to the Class
I-LT4 Certificates on such Distribution Date.
CLASS M CERTIFICATES: Any of the Class M-1 and Class M-2 Certificates.
CLASS M CERTIFICATE BALANCE: With respect to any Distribution Date, the sum
of the Class M-1 and Class M-2 Certificate Balance (before giving effect to the
principal distributions on such Distribution Date).
CLASS M CERTIFICATES: The Class M-1 Certificates and the Class M-2
Certificates.
CLASS M-1 ADJUSTED CERTIFICATE BALANCE: With respect to any Distribution
Date, the Class M-1 Certificate Balance as of such Distribution Date minus the
Class M-1 Liquidation Loss Amount as of such Distribution Date, if any.
CLASS M-1 CERTIFICATE: Any one of the Class M-1 Certificates, executed and
authenticated as provided herein, substantially in the form set forth in EXHIBIT
B hereto.
CLASSM-1 CERTIFICATE BALANCE: At any time, the Initial Class M-1
Certificate Balance minus the sum of all principal distributions previously made
to the Class M-1 Certificateholders (including distributions in respect of Class
M-1 Liquidation Loss Amounts pursuant to Section 4.02(c)).
CLASS M-1 DISTRIBUTION AMOUNT: With respect to any Distribution Date,
he total amount distributed to the Class M-1 Certificateholders pursuant to
Section 4.02.
CLASS M-1 EXCESS OPTIMAL INTEREST: With respect to the Class M-1
Certificates and a Distribution Date, an amount, if any, equal to the lesser of
(a) the product of (i) a per annum rate equal to the excess of (A) 7.617% per
annum over (B) the Net Funds Cap for such Distribution Date and (ii) the Class
M-1 Adjusted Certificate Balance and (b) an amount equal to the excess of (i)
the total amount of interest on the Contracts due during the related Due Period,
whether or not paid, over (ii) interest on all Classes of the Certificates at
their related Pass-Through Rates plus the Class A Excess Optimal Interest for
such Distribution Date.
CLASS M-1 FORMULA PRINCIPAL DISTRIBUTION AMOUNT: With respect to any
Distribution Date, the Class M-1 Percentage multiplied by the Formula Principal
Distribution Amount. For any Distribution Date, if the Class M-1 Formula
Principal Distribution Amount exceeds the Class M-1 Certificate Balance less the
Unpaid Class M-1 Principal Shortfall with respect to such Class and Distribution
Date, then such amounts shall be added to the Class M-2 Formula Principal
Distribution Amount.
CLASS M-1 INTEREST DISTRIBUTION AMOUNT: With respect to any Distribution
Date, an amount equal to the sum of (a) (i) accrued interest during the related
Accrual Period at the Class M-1 Pass-Through Rate on the Class M-1 Adjusted
Certificate Balance as of such Distribution Date (before giving effect to the
principal distributions on such Distribution Date) less (ii) the Class M-1
15
Certificates pro rata share of any Interest Shortfalls occurring during the
immediately preceding Due Period, (b) any Class M-1 Excess Optimal Interest for
such Distribution Date and (c) any Class M-1 Unpaid Interest Shortfall.
CLASS M-1 INTEREST SHORTFALL: With respect to any Distribution Date, any
amount by which the amount distributed to Holders of Class M-1 Certificates on
such Distribution Date is less than the amount computed pursuant to clauses (a)
and (b) of the definition of "Class M-1 Interest Distribution Amount."
CLASS M-1 LIQUIDATION LOSS AMOUNT: On or after the Distribution Date on
which the Class M-2 Adjusted Certificate Balance has been reduced to zero and on
or before the Distribution Date on which the Class M-1 Adjusted Certificate
Balance has been reduced to zero, the lesser of (i) the amount, if any, by which
the sum of the Class A and Class M-1 Certificate Balances exceeds the Pool
Scheduled Principal Balance and (ii) the Class M-1 Certificate Balance, in each
case after giving effect to all distributions of principal made on such
Distribution Date.
CLASS M-1 LIQUIDATION LOSS INTEREST AMOUNT: With respect to any
Distribution Date, an amount equal to interest at the Class M-1 Pass-Through
Rate during the related Accrual Period on the Class M-1 Liquidation Loss Amount
allocable to the Class M-1 Certificates, if any, remaining unpaid after the
immediately preceding Distribution Date.
CLASS M-1 PASS-THROUGH RATE: The lesser of (a) 7.617% per annum and (b) the
Net Funds Cap.
CLASS M-1 PERCENTAGE: With respect to any Distribution Date, (i) if the
Class A Certificate Balance has not been reduced to zero and each of the
Principal Distribution Tests and the Class M-1 Principal Distribution Test have
not been satisfied on such Distribution Date, zero, and (ii) (a) if the Class A
Certificate Balance has been reduced to zero or (b) if the Principal
Distribution Tests and the Class M-1 Principal Distribution Test have been
satisfied on such Distribution Date: the percentage equivalent of a fraction
(not to exceed one), the numerator of which is the Class M-1 Adjusted
Certificate Balance and the denominator of which is the sum of (i) the Class A
Certificate Balance; (ii) the Class M-1 Adjusted Certificate Balance; (iii) if
the Class M-2 Principal Distribution Test is satisfied on such Distribution
Date, the Class M-2 Adjusted Certificate Balance, otherwise zero; (iv) if the
Class B-1 Principal Distribution Test is satisfied on such Distribution Date,
the Class B-1 Adjusted Certificate Balance, otherwise zero; and (v) if the Class
B-2 Principal Distribution Test is satisfied on such Distribution Date, the sum
of the Class B-2 Adjusted Certificate Balance and the Overcollateralization
Amount, otherwise, zero; in each case determined as of the immediately preceding
Distribution Date (or as of the Closing Date in the case of the first
Distribution Date).
CLASS M-1 PRINCIPAL DISTRIBUTION TEST: A test that will be satisfied on any
Distribution Date if the sum of the Class M-1 Adjusted Certificate Balance,
Class M-2 Adjusted Certificate Balance, Class B-1 Adjusted Certificate Balance,
Class B-2 Adjusted Certificate Balance and the Overcollateralization Amount
divided by the Pool Scheduled Principal Balance as of the immediately preceding
Distribution Date equals or exceeds 57%.
16
CLASS M-1 PRINCIPAL SHORTFALL: With respect to any Distribution Date, the
excess, if any, of the Class M-1 Formula Principal Distribution Amount over the
amount in respect of principal actually distributed to the Class M-1
Certificateholders on such Distribution Date.
CLASS M-1 SIMPLE INTEREST DEFICIENCY: With respect to any Distribution
Date, any deficiency in the Class M-1 Interest Distribution Amount resulting
from a Net Simple Interest Shortfall.
CLASS M-1 SIMPLE INTEREST DEFICIENCY AMOUNT: With respect to any
Distribution Date, the aggregate of all amounts distributed to the Class M-1
Certificates in respect of Section 3.19 hereof in respect of Class M-1 Simple
Interest Deficiency.
CLASS M-1 UNPAID INTEREST SHORTFALL: With respect to any Distribution Date,
the amount, if any, by which the aggregate of the Class M-1 Interest Shortfalls
for prior Distribution Dates exceeds all prior distributions made pursuant to
Section 4.02(a) in respect of prior Class M-1 Interest Shortfalls, plus accrued
interest thereon (to the extent payment thereof is legally permissible) during
the related Accrual Period at the Class M-1 Pass-Through Rate on such amount
with respect to such prior Distribution Dates.
CLASS M-1 UNPAID LIQUIDATION LOSS INTEREST SHORTFALL: With respect to any
Distribution Date, the amount, if any, by which the aggregate unreimbursed Class
M-1 Liquidation Loss Interest Amounts for one or more prior Distributions Dates
exceeds the amount previously distributed to the Class M-1 Certificateholders in
respect of Liquidation Loss Interest Amounts on one or more prior Distribution
Dates.
CLASS M-2 ADJUSTED CERTIFICATE BALANCE: With respect to any Distribution
Date, the Class M-2 Certificate Balance as of such Distribution Date minus the
Class M-2 Liquidation Loss Amount as of such Distribution Date, if any.
CLASS M-2 CERTIFICATES: Any one of the Class M-2 Certificates, executed and
authenticated as provided herein, substantially in the form set forth in EXHIBIT
B hereto.
CLASS M-2 CERTIFICATE BALANCE: At any time, the Initial Class M-2
Certificate Balance minus the sum of all principal distributions previously made
to the Class M-2 Certificateholders (including distributions in respect of Class
M-2 Liquidation Loss Amounts pursuant to Section 4.02(c)).
CLASS M-2 DISTRIBUTION AMOUNT: With respect to any Distribution Date, the
total amount distributed to the Class M-2 Certificateholders pursuant to Section
4.02.
CLASS M-2 EXCESS OPTIMAL INTEREST: With respect to the Class M-2
Certificates and a Distribution Date, an amount, if any, equal to the lesser of
(a) the product of (i) a per annum rate equal to the excess of (A) 8.156% per
annum over (B) the Net Funds Cap for such Distribution Date and (ii) the Class
M-2 Adjusted Certificate Balance and (b) an amount equal to the excess of (i)
the total amount of interest on the Contracts due during the related Due Period,
whether or not paid, over (ii) interest on all Classes of the Certificates at
their related Pass-Through Rates plus the Class A Excess Optimal Interest and
Class M-1 Excess Optimal Interest for such Distribution Date.
CLASS M-2 FORMULA PRINCIPAL DISTRIBUTION AMOUNT: With respect to any
Distribution Date, the Class M-2 Percentage multiplied by the Formula Principal
Distribution Amount. For any Distribution Date, if the Class M-2 Formula
Principal Distribution Amount exceeds the Class M-2 Certificate Balance less the
Unpaid Class M-2 Principal Shortfall with respect to such Class and Distribution
Date, then such amounts shall be added to the Class B-1 Formula Principal
Distribution.
17
CLASS M-2 INTEREST DISTRIBUTION AMOUNT: With respect to any Distribution
Date, an amount equal to the sum of (a) (i) accrued interest during the related
Accrual Period at the Class M-2 Pass-Through Rate on the Class M-2 Adjusted
Certificate Balance as of such Distribution Date (before giving effect to the
principal distributions on such Distribution Date) less (ii) the Class M-2
Certificates pro rata share of any Interest Shortfalls occurring during the
immediately preceding Due Period, (b) any Class M-2 Excess Optimal Interest for
such Distribution Date and (c) any Class M-2 Unpaid Interest Shortfall.
CLASS M-2 INTEREST SHORTFALL: With respect to any Distribution Date, any
amount by which the amount distributed to Holders of Class M-2 Certificates on
such Distribution Date is less than the amount computed pursuant to clauses (a)
and (b) of the definition of "Class M-2 Interest Distribution Amount."
CLASS M-2 LIQUIDATION LOSS AMOUNT: On or after the Distribution Date on
which the Class B-1 Adjusted Certificate Balance has been reduced to zero and on
or before the Distribution Date on which the Class M-2 Adjusted Certificate
Balance has been reduced to zero, the lesser of (i) the amount, if any, by which
the sum of the Class A, Class M-1 and Class M-2 Certificate Balances exceeds the
Pool Scheduled Principal Balance and (ii) the Class M-2 Certificate Balance, in
each case after giving effect to all distributions of principal made on such
Distribution Date.
CLASS M-2 LIQUIDATION LOSS INTEREST AMOUNT: With respect to any
Distribution Date, an amount equal to interest at the Class M-2 Pass-Through
Rate during the related Accrual Period on the Class M-2 Liquidation Loss Amount,
if any, remaining unpaid after the immediately preceding Distribution Date.
CLASS M-2 PASS-THROUGH RATE: The lesser of (a) 8.156% per annum and (b) the
Net Funds Cap.
CLASS M-2 PERCENTAGE: With respect to any Distribution Date, (i) if the
Class A Certificate Balance has not been reduced to zero and each of the
Principal Distribution Tests and the Class M-2 Principal Distribution Test have
not been satisfied, zero, and (ii)(a) if the Class A Certificate Balance and the
Class M-1 Certificate Balance have been reduced to zero or (b) if the Principal
Distribution Tests and the Class M-2 Principal Distribution Test have been
satisfied on such Distribution Date: the percentage equivalent of a fraction
(not to exceed one), the numerator of which is the Class M-2 Adjusted
Certificate Balance and the denominator of which is the sum of (i) the Class A
Certificate Balance; (ii) if the Class M-1 Principal Distribution Test is
satisfied on such Distribution Date, the Class M-1 Adjusted Certificate Balance,
otherwise zero; (iii) the Class M-2 Adjusted Certificate Balance; (iv) if the
Class B-1 Principal Distribution Test is satisfied on such Distribution Date,
the Class B-1 Adjusted Certificate Balance, otherwise zero; and (v) if the Class
B-2 Principal Distribution Test is satisfied on such Distribution Date, the sum
of the Class B-2 Adjusted Certificate Balance and the Overcollateralization
Amount, otherwise, zero; in each case determined as of the immediately preceding
Distribution Date (or as of the Closing Date in the case of the first
Distribution Date).
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CLASS M-2 PRINCIPAL DISTRIBUTION TEST: A test that will be satisfied on any
Distribution Date if the sum of the Class M-2 Adjusted Certificate Balance,
Class B-1 Adjusted Certificate Balance, Class B-2 Adjusted Certificate Balance
and the Overcollateralization Amount divided by the Pool Scheduled Principal
Balance as of the immediately preceding Distribution Date equals or exceeds 44%.
CLASS M-2 PRINCIPAL SHORTFALL: With respect to any Distribution Date,
the excess, if any, of the Class M-2 Formula Principal Distribution Amount
over the amount in respect of principal actually distributed to the Class M-2
Certificateholders on such Distribution Date.
CLASS M-2 SIMPLE INTEREST DEFICIENCY: With respect to any Distribution
Date, any deficiency in the Class M-2 Interest Distribution Amount resulting
from Net Simple Interest Shortfall.
CLASS M-2 SIMPLE INTEREST DEFICIENCY AMOUNT: With respect to any
Distribution Date, the aggregate of all amounts distributed to the Class M-2
Certificates in respect of Section 3.19 hereof in respect of Class M-2 Simple
Interest Deficiency.
CLASS M-2 UNPAID INTEREST SHORTFALL: With respect to any Distribution Date,
the amount, if any, by which the aggregate of the Class M-2 Interest Shortfalls
for prior Distribution Dates exceeds all prior distributions made pursuant to
Section 4.02(a) in respect of prior Class M-2 Interest Shortfalls, plus accrued
interest thereon (to the extent payment thereof is legally permissible) during
the related Accrual Period at the Class M-2 Pass-Through Rate on such amount
with respect to such prior Distribution Dates.
CLASS M-2 UNPAID LIQUIDATION LOSS INTEREST SHORTFALL: With respect to any
Distribution Date, the amount, if any, by which the aggregate unreimbursed Class
M-2 Liquidation Loss Interest Amounts for one or more prior Distributions Dates
exceeds the amount previously distributed to the Class M-2 Certificateholders in
respect of Liquidation Loss Interest Amounts on one or more prior Distribution
Dates.
CLASS R CERTIFICATE: Any one of the Class R-I Certificates or
Class R-II Certificates.
CLASS R INTEREST DISTRIBUTION AMOUNT: With respect to any Distribution
Date, an amount equal to the difference between (i) the sum of (a) interest at
the Class R Pass-Through Rate during the related Accrual Period on the sum of
the Class R-I Certificate Balance and the Class R-II Certificate Balance as of
such Distribution Date (before giving effect to the principal distributions on
such Distribution Date) and (b) any unpaid interest shortfall not paid to the
holders of the Class R Certificates on any previous Distribution Date and (ii)
the Class R Certificates' pro rata share of any Interest Shortfalls occurring
during the immediately preceding Due Period.
CLASS R PASS-THROUGH RATE: With respect to the Class R-I Certificates and
the Class R-II Certificates, a per annum rate equal to the lesser of (i) lesser
of 6.70% and (ii) the Net Funds Cap.
CLASS R-I CERTIFICATE: Any one of the Class R-I Certificates executed by
the Trustee and authenticated by the Certificate Registrar substantially in the
form annexed hereto as EXHIBIT D and evidencing an interest designated as a
"residual interest" in REMIC I for purposes of the REMIC Provisions.
19
CLASS R-I CERTIFICATE BALANCE: At any time, $50 minus the sum of all
principal distributions previously made to the Class R-I Certificateholders.
CLASS R-II CERTIFICATE: Any one of the Class R-II Certificates executed by
the Trustee and authenticated by the Certificate Registrar substantially in the
form annexed hereto as EXHIBIT D and evidencing an interest designated as a
"residual interest" in REMIC II for purposes of the REMIC Provisions.
CLASS R-II CERTIFICATE BALANCE: At any time, $50 minus the sum of all
principal distributions previously made to the Class R-II Certificateholders.
CLASS SB CERTIFICATE BALANCE: With respect to any date of determination:
(a) $4,255,120.85 plus (b) the principal balance of the REMIC I Regular Interest
SB-IO, as described in the Preliminary Statement hereto, as of such date of
determination, minus (c) all amounts distributed to the Class SB Certificates
pursuant to Section 4.02(c)(xv) hereof on or prior to such date of
determination, minus (d) any Realized Losses that have been applied to reduce
the Overcollateralization Amount on or prior to such date of determination.
CLASS SB CERTIFICATES: Any one of the Class SB Certificates, executed and
authenticated as provided herein, substantially in the form set forth in EXHIBIT
E hereto.
CLOSING DATE: April 11, 2002.
CODE: The Internal Revenue Code of 1986, as the same may be amended
from time to time (or any successor statute thereto).
COLLATERAL: Mortgaged Property and/or Secured Property.
COLLECTION ACCOUNT: The accounts established and maintained by the Servicer
in accordance with Section 3.06.
COMPENSATING INTEREST PAYMENT: For any Distribution Date and the Contracts,
the lesser of (a) 0.75% per annum of the aggregate Stated Principal Balance of
the Contracts as of the Due Date in the Due Period for such Distribution Date
(or with respect to the first Due Period and Contracts having two scheduled Due
Dates during such period, the Stated Principal Balance of such Contract as of
the second Due Date occurring during such period) and (b) the aggregate
Prepayment Interest Shortfall allocable to Payoffs for the Contracts for the
related Due Period.
CONDEMNATION PROCEEDS: All awards, compensation and settlements in respect
of a taking of all or part of any Collateral by exercise of the power of
condemnation or the right of eminent domain.
CONTRACT: (A) Each Manufactured Home retail installment contract (other
than a Land Home Contract) evidencing (i) the Obligor's obligation to pay the
indebtedness evidenced by such Contract and (ii) the security interest in the
related Secured Property or (B) a Land Home Contract.
CONTRACT DOCUMENTS: As defined in section 2.01(b).
CONTRACT POOL: All of the Contracts listed on the Contract Schedule.
20
CONTRACT RATE: The annual rate, as stated in the Contract or Mortgage Note,
as applicable, at which interest accrues on the unpaid principal balance of the
Contract or Mortgage Note, as applicable.
CONTRACT SCHEDULE: The schedule of Contracts and/or Mortgage Loans annexed
as SCHEDULE I hereto, such schedule setting forth the following information with
respect to each Contract,: (1) the Originator's Contract/Mortgage Loan
identifying number and the applicable Originator; (2) the street address of the
Collateral, as applicable, including the state and zip code; (3) a code
indicating whether the Collateral, as applicable, is owner-occupied; (4) the
original months to maturity; (5) the origination date of the Contract or
Mortgage Loan and the remaining months to maturity from the related Cut-off
Date, based on the original amortization schedule; (6) on a best efforts basis,
the Appraised Value and purchase price of the Collateral, as applicable and the
Loan-to-Value Ratio at origination; (7) the Contract Rate; (8) the date on which
the first Scheduled Payment was due on the Contract; (9) the stated maturity
date; (10) the amount of the Monthly Payment; (11) the last Due Date on which a
Monthly Payment was actually applied to the Stated Principal Balance of the
Contract; (12) the original principal amount of the Contract; (13) the Stated
Principal Balance of the Contract or Mortgage Loan, as applicable, as of the
related Cut-off Date; (14) a code indicating the purpose of the loan (i.e.,
purchase financing, rate/term refinancing); (15) a code indicating the
documentation style; (16) credit grade; (17) on a best efforts basis, the
Obligor's FICO Score; (18) the Due Date of each Contract; (19) whether the
Contract is classified as a high cost loan under Section 32 of the Home
Ownership and Equity Protection Act of 1994 or a high cost loan under North
Carolina Law; (20) a code indicating whether the Contract is a simple interest
Contract; and (21) the number of times during the twelve month period preceding
the related Closing Date that any Monthly Payment has been received thirty or
more days after its Due Date. With respect to the Contracts or the Mortgage
Loans, as applicable, in the aggregate, the Contract Schedule shall set forth
the following information, as of the related Cut-off Date: (1) the number of
Contracts; (2) the current outstanding principal balance of the Contracts; (3)
the weighted average Contract Rate of the Contracts; (4) the weighted average
maturity of the Contracts; and (5) the weighted average FICO Score of the
Contracts.
CORPORATE TRUST OFFICE: The designated office of the Trustee in the State
of New York at which at any particular time its corporate trust business with
respect to this Agreement shall be administered, which office at the date of the
execution of this Agreement is located at ▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇
▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attn: Institutional Trust Services/Structured Finance
Services - CSFB 2002 MH3.
CREDIT RISK MANAGEMENT AGREEMENT: The agreement between the Servicer and
the Credit Risk Manager dated as of the Closing Date.
CREDIT RISK MANAGER: The Murrayhill Company, a Colorado corporation, and
any successor.
CREDIT RISK MANAGER FEE: The fee payable to the Credit Risk Manager on each
Distribution Date for its services as Credit Risk Manager, in an amount equal to
one-twelfth of the Credit Risk Manager Fee Rate multiplied by the Stated
Principal Balance of the Contracts on the day immediately prior to such
Distribution Date.
CREDIT RISK MANAGER FEE RATE: 0.020% per annum.
21
CUMULATIVE REALIZED LOSSES: With respect to any date of determination, the
cumulative amount of Realized Losses since the Cut-off Date.
CUMULATIVE REALIZED LOSS TEST: With respect to any Distribution Date, the
following:
(i) if such Distribution Date occurs from October 1, 2006 through
October 31, 2007, the Cumulative Realized Loss Test will be satisfied if
Cumulative Realized Losses as of such Distribution Date are less than or
equal to 6.0% of the Cut-Off Date Pool Principal Balance;
(ii) if such Distribution Date occurs from November 1, 2007 through
October 31, 2008, the Cumulative Realized Loss Test will be satisfied if
Cumulative Realized Losses as of such Distribution Date are less than or
equal to 7.0% of the Cut-Off Date Pool Principal Balance;
(iii)if such Distribution Date occurs from November 1, 2008 through
October 31, 2009, the Cumulative Realized Loss Test will be satisfied if
Cumulative Realized Losses as of such Distribution Date are less than or
equal to 9.0% of the Cut-off Date Pool Principal Balance; and
(iv) if such Distribution Date occurs on or after November 1, 2009, the
Cumulative Realized Loss Test will be satisfied if Cumulative Realized
Losses as of such Distribution Date are less than or equal to 11.0% of the
Cut-off Date Pool Principal Balance.
CURRENT REALIZED LOSSES: With respect to any Distribution Date, the
aggregate of the Realized Losses incurred with respect to Contracts during the
Due Period immediately preceding such Distribution Date.
CURRENT REALIZED LOSS RATIO: With respect to the first Distribution Date,
the annualized percentage equivalent of the fraction, the numerator of which is
the Current Realized Losses for the preceding Due Period and the denominator of
which is the Aggregate Contract Balance for such Distribution Date. With respect
to the second Distribution Date, the annualized percentage equivalent of the
fraction, the numerator of which is the Current Realized Losses for the two
preceding Due Periods and the denominator of which is the arithmetic average of
the Aggregate Contract Balances for such Distribution Date and the immediately
preceding Distribution Date. With respect to any Distribution Date thereafter,
the annualized percentage equivalent of the fraction, the numerator of which is
the sum of the Current Realized Losses for the three preceding Due Periods and
the denominator of which is the arithmetic average of the Pool Scheduled
Principal Balances for such Distribution Date and the preceding two Distribution
Dates.
CURTAILMENT: Any payment of principal on a Contract, made by or on behalf
of the related Obligor, other than a Scheduled Payment, a prepaid Scheduled
Payment or a Payoff, which is applied to reduce the outstanding Stated Principal
Balance of the Contract.
CUSTODIAN: Bank One Trust Company, N.A., a national banking association, or
its successor in interest.
CUSTODIAL AGREEMENT: The Custodial Agreement dated as of the date hereof,
among the Custodian and the Trustee.
CUT-OFF DATE: The opening of business on March 24, 2002.
22
CUT-OFF DATE POOL PRINCIPAL BALANCE: $106,465,220.85.
CUT-OFF DATE PRINCIPAL BALANCE: With respect to any Contract, the
outstanding principal balance thereof as of the close of business on the Cut-off
Date.
DEFECTIVE CONTRACT: Any Contract which is required to be repurchased
pursuant to Section 2.02 or 2.03.
DEFICIENCY: With respect to any Contract that is a Liquidation Contract,
the amount by which (i) the outstanding principal balance of such Contract, plus
accrued and unpaid interest thereon at the related Contract Rate to the Due Date
for such Contract in the Due Period in which such Contract became a Liquidation
Contract exceeds (ii) the Net Liquidation Proceeds for such Contract.
DEFINITIVE CERTIFICATES: Any Certificate evidenced by a Physical
Certificate and any Certificate issued in lieu of a Book-Entry Certificate
pursuant to Section 5.02(f).
DELETED CONTRACT: As defined in Section 2.03(c).
DELINQUENCY RATE: With respect to any Due Period, generally, the fraction,
expressed as a percentage, the numerator of which is the aggregate outstanding
principal balance of all Contracts sixty (60) or more days delinquent (including
all foreclosures, bankruptcies and repossessions) as of the close of business on
the last day of such Due Period, and the denominator of which is the Pool
Scheduled Principal Balance as of the close of business on the last day of such
Due Period; provided that a Contract will not be considered delinquent if a
payment within $65.00 of a Scheduled Payment is received.
DENOMINATION: With respect to each Certificate, the amount set forth on the
face thereof as the "Initial Certificate Balance of this Certificate" or the
"Initial Notional Amount of this Certificate" or, if neither of the foregoing,
the Percentage Interest appearing on the face thereof.
DEPOSITOR: Credit Suisse First Boston Mortgage Securities Corp., a Delaware
corporation, or its successor in interest.
DEPOSITORY: The initial Depository shall be The Depository Trust Company,
the nominee of which is CEDE & Co., as the registered Holder of the Book-Entry
Certificates. The Depository shall at all times be a "clearing corporation" as
defined in Section 8-102(a)(5) of the Uniform Commercial Code of the State of
New York.
DEPOSITORY PARTICIPANT: A broker, dealer, bank or other financial
institution or other Person for whom from time to time a Depository effects
book-entry transfers and pledges of securities deposited with the Depository.
DETERMINATION DATE: With respect to any Distribution Date and any Contract,
the Business Day immediately preceding the related Servicer Remittance Date.
DISTRIBUTION DATE: The 25th day of each month or if such day is not a
Business Day, the first Business Day thereafter, in each case commencing in May
2002.
23
DISQUALIFIED ORGANIZATION: Any organization defined as a "disqualified
organization" under Section 860E(e)(5) of the Code, and if not otherwise
included, 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
▇▇▇▇▇▇▇ Mac, 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, (v) any "electing large partnership," as defined in Section 775(a) of
the Code and (vi) 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
Certificate by such Person may cause the Trust Fund or any Person having an
Ownership Interest in any Class of Certificates (other than such Person) to
incur 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
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.
DUE DATE: With respect to each Contract and any Distribution Date, the date
on which Scheduled Payments on such Contract are due, exclusive of any days of
grace.
DUE PERIOD: With respect to any Distribution Date (other than the first
Distribution Date), the calendar month immediately preceding such Distribution
Date. With respect to the first Distribution Date, the period from and including
the Cut-off Date to and including April 30, 2002.
ELIGIBLE ACCOUNT: Either (i) an account or accounts maintained with a
federal or state chartered depository institution or trust company acceptable to
the Rating Agencies or (ii) an account or accounts the deposits in which are
insured by the FDIC to the limits established by such corporation, provided that
any such deposits not so insured shall be maintained in an account at a
depository institution or trust company whose commercial paper or other short
term debt obligations (or, in the case of a depository institution or trust
company which is the principal subsidiary of a holding company, the commercial
paper or other short term debt obligations of such holding company) have been
rated by each Rating Agency in its highest short-term rating category, or (iii)
a segregated trust account or accounts (which shall be a "special deposit
account") maintained with the Trustee or any other federal or state chartered
depository institution or trust company, acting in its fiduciary capacity.
Eligible Accounts may bear interest.
ELIGIBLE INVESTMENTS: Any one or more of the obligations and securities
listed below:
(i) direct obligations of, and obligations fully guaranteed by, the United
States of America, or any agency or instrumentality of the United States
of America the obligations of which are backed by the full faith and
credit of the United States of America; or obligations fully guaranteed
by, the United States of America; the FHLMC, FNMA, the Federal Home Loan
Banks or any agency or instrumentality of the United States of America
rated Aa3 or higher by ▇▇▇▇▇'▇;
24
(ii) federal funds, demand and time deposits in, certificates of deposits of,
or bankers' acceptances issued by, any depository institution or trust
company incorporated or organized under the laws of the United States of
America or any state thereof and subject to supervision and examination
by federal and/or state banking authorities, so long as at the time of
such investment or contractual commitment providing for such investment
the commercial paper or other short-term debt obligations of such
depository institution or trust company (or, in the case of a depository
institution or trust company which is the principal subsidiary of a
holding company, the commercial paper or other short-term debt
obligations of such holding company) are rated in the highest ratings by
each Rating Agency, and the long-term debt obligations of such
depository institution or trust company (or, in the case of a depository
institution or trust company which is the principal subsidiary of a
holding company, the long-term debt obligations of such holding company)
are rated in one of two of the highest ratings, by each Rating Agency;
(iii) repurchase obligations with a term not to exceed 30 days with respect to
any security described in clause (i) above and entered into with a
depository institution or trust company (acting as a principal) the
short-term debt obligations of which are rated A-1 or higher by S&P,
rated A-1 or higher by Fitch, and rated A-2 or higher by ▇▇▇▇▇'▇;
provided, however, that collateral transferred pursuant to such
repurchase obligation must be of the type described in clause (i) above
and must (A) be valued daily at current market price plus accrued
interest, (B) pursuant to such valuation, be equal, at all times, to
105% of the cash transferred by the Trustee in exchange for such
collateral, and (C) be delivered to the Trustee or, if the Trustee is
supplying the collateral, an agent for the Trustee, in such a manner as
to accomplish perfection of a security interest in the collateral by
possession of certificated securities;
(iv) securities bearing interest or sold at a discount issued by any
corporation incorporated under the laws of the United States of America
or any state thereof which has a long-term unsecured debt rating in the
highest available rating category of ▇▇▇▇▇'▇, short-term unsecured debt
rating of A-1 or higher by Fitch and a short-term unsecured debt rating
of A-1 or higher by S&P, at the time of such investment;
(v) commercial paper having an original maturity of less than 365 days and
issued by an institution having a short-term unsecured debt rating in
the highest available rating category by each Rating Agency, at the time
of such investment;
(vi) a guaranteed investment contract approved by each of the Rating Agencies
and issued by an insurance company or other corporation having a
long-term unsecured debt rating in the highest available rating category
of ▇▇▇▇▇'▇, short-term unsecured debt rating of A-1 or higher by Fitch
and a short-term unsecured debt rating of A-1 or higher by S&P, at the
time of such investment; and
(vii) money market funds having ratings in the highest available rating
category of ▇▇▇▇▇'▇ and Fitch and either "AAAm" or "AAAm-G" of S&P at
the time of such investment (any such money market funds which provide
for demand withdrawals being conclusively deemed to satisfy any maturity
requirements for Eligible Investments set forth herein) including money
market funds of the Servicer or the Trustee and any such funds that are
managed by the Servicer or the Trustee or their respective Affiliates or
25
for the Servicer or the Trustee or any Affiliate of either acts as
advisor, as long as such money market funds satisfy the criteria of this
subparagraph (vii);
provided, however, that no such instrument shall be an Eligible Investment if
such instrument evidences either (i) a right to receive only interest
payments with respect to the obligations underlying such instrument, or (ii)
both principal and interest payments derived from obligations underlying such
instrument and the principal and interest payments with respect to such
instrument provide a yield to maturity of greater than 120% of the yield to
maturity at par of such underlying obligations.
ERISA: The Employee Retirement Income Security Act of 1974, as amended.
ERISA-RESTRICTED CERTIFICATE: The Class R Certificates and the Private
Certificates.
ERRORS AND OMISSIONS INSURANCE POLICY: An errors and omissions insurance
policy to be maintained by the Servicer pursuant to Section 3.08.
EVENT OF DEFAULT: As defined in Section 7.01.
EXPENSE FEE: As to each Contract, the sum of the related Servicing Fee,
Trustee Fee and Credit Risk Manager Fee.
EXPENSE FEE RATE: As to each Contract, the sum of the related Servicing Fee
Rate, the Trustee Fee Rate, and the Credit Risk Manager Fee Rate.
FDIC: The Federal Deposit Insurance Corporation, or any successor thereto.
FHLMC: ▇▇▇▇▇▇▇ Mac, 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.
FICO SCORE: With respect to each Contract and Mortgage Loan, the
statistical credit score obtained by the related lender in connection with the
loan application to help assess the related Obligor's creditworthiness.
FINAL RECOVERY DETERMINATION: With respect to any defaulted Contract, a
determination made by the Servicer that all Insurance Proceeds, Liquidation
Proceeds and other payments or recoveries which the Servicer, in its reasonable
good faith, judgment, expects to be finally recoverable in respect thereof have
been so recovered. The Servicer shall maintain records prepared by a servicing
officer of each Final Recovery Determination.
FIDELITY BOND: A fidelity bond to be maintained by the Servicer pursuant to
Section 3.08.
FINAL CERTIFICATION: A certification in the form of EXHIBIT G hereto.
FINAL SCHEDULED DISTRIBUTION DATE: The Distribution Date in November
2031.
FITCH: Fitch, Inc., or any successor thereto. For purposes of Section 10.05
the address for notices to Fitch shall be Fitch, Inc., ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇,
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, or such other address as ▇▇▇▇▇'▇ may hereafter furnish
to the Depositor, the Servicer and the Trustee.
26
FNMA: ▇▇▇▇▇▇ Mae, a federally chartered and privately owned corporation
organized and existing under the Federal National Mortgage Association Charter
Act, or any successor thereto.
FORMULA PRINCIPAL DISTRIBUTION AMOUNT: With respect to any Distribution
Date, an amount equal to the difference between (a) the sum of (i) the amounts
set forth under clauses (1), (2), (3) and (4) of Principal Remittance Amount for
such Distribution Date and (ii) the Stated Principal Balance of each Contract
that became a Liquidated Contract during the related Due Period, plus the amount
of any reduction in the outstanding principal balance of a Contract during the
related Due Period ordered as the result of a bankruptcy or similar proceeding
involving the related obligor and (b) the Overcollateralization Release Amount
for such Distribution Date.
GUARANTEE AGREEMENT: That certain September Contract Credit Support
Agreement, dated as of November 21, 2001, that has been delivered to the Trustee
and the holders of the Class B-2 and Class SB Certificates.
GUARANTEE OUTSTANDING AMOUNT: With respect to any Distribution Date,
$10,945,807.35 less the aggregate Guarantee Payment Amounts from all preceding
Distribution Dates.
GUARANTEE PAYMENT AMOUNT: On any Distribution Date prior to the Guarantee
Trigger Date, $0.00. On the Guarantee Trigger Date, the lesser of (i) the
Guarantee Outstanding Amount and (ii) the excess of (A) Cumulative Realized
Losses as of such Distribution Date over (B) $7,662,065.14. On any Distribution
Date after the Guarantee Trigger Date, the lesser of (i) the Guarantee
Outstanding Amount and (ii) Current Realized Losses.
GUARANTEE TRIGGER DATE: The first Distribution Date on which Cumulative
Realized Losses exceed $7,587,689.81.
GUARANTOR: The entity named in the Guarantee Agreement as "Support
Provider" and its successors in interest.
HAZARD INSURANCE POLICY: With respect to each Contract, the policy of fire
and extended coverage insurance (and federal flood insurance, if applicable)
required to be maintained for the related Manufactured Home, as provided in
Section 3.07 (which may be a blanket insurance policy maintained by the Servicer
in accordance with the terms and conditions of Section 3.07).
INDIRECT PARTICIPANT: A broker, dealer, bank or other financial institution
or other Person that clears through or maintains a custodial relationship with a
Depository Participant.
INITIAL CERTIFICATION: A certification in the form of EXHIBIT F hereto.
INITIAL CLASS A CERTIFICATE BALANCE: $79,320.000.
INITIAL CLASS B-1 CERTIFICATE BALANCE: $5,060,000.
INITIAL CLASS B-2 CERTIFICATE BALANCE: $5,060,000.
INITIAL CLASS M-1 CERTIFICATE BALANCE: $6,920,000.
INITIAL CLASS M-2 CERTIFICATE BALANCE: $5,850,000.
27
INSURANCE POLICY: With respect to any Contract included in the Trust Fund,
any standard hazard insurance policy, flood insurance policy or title insurance
policy, including all riders and endorsements thereto in effect, including any
replacement policy or policies for any Insurance Policies. INSURANCE PROCEEDS
With respect to each Contract, proceeds of any insurance policy insuring the
related Secured Property.
INTEREST DISTRIBUTION AMOUNT: The Class A Distribution Amount, the Class
B-1 Interest Distribution Amount, the Class B-2 Interest Distribution Amount,
the Class M-1 Interest Distribution Amount and/or the Class M-2 Interest
Distribution Amount, as applicable.
INTEREST REMITTANCE AMOUNT: For any Distribution Date, an amount equal to
the sum of (1) all interest collected (other than related Payaheads and Net
Simple Interest Excess, if applicable) or advanced in respect of Scheduled
Payments on the Contracts during the related Due Period, the interest portion of
Payaheads previously received and intended for application in the related Due
Period and the interest portion of all Payoffs and Curtailments received on the
Contracts during the related Due Period, less (x) the Servicing Fee and any
insurance premiums not paid by the related Obligor with respect to such
Contracts and (y) unreimbursed Advances and other amounts due to the Servicer or
Trustee with respect to such Contracts, to the extent allocable to interest, (2)
all Compensating Interest Payments paid by the Servicer with respect to the
Contracts with respect to such Distribution Date, (3) the portion of any
Substitution Adjustment Amount or Repurchase Price paid with respect to such
Contracts during the related Due Period, to the extent allocable to interest,
and (4) all Net Liquidation Proceeds, and any Insurance Proceeds and other
recoveries (net of unreimbursed Advances, Servicing Advances and expenses, to
the extent allocable to interest, and unpaid Servicing Fees) collected with
respect to the Contracts during the related Due Period, to the extent allocable
to interest.
INTEREST SHORTFALL: For any Distribution Date, an amount equal to the
aggregate shortfall, if any, in collections of interest (adjusted to the related
Net Contract Rate) on Contracts resulting from (a) Prepayment Interest
Shortfalls to the extent not covered by a Compensating Interest Payment and (b)
interest payments on certain of the Contracts being limited pursuant to the
provisions of the Soldiers' and Sailors' Civil Relief Act of 1940. Interest
Shortfalls will be allocated among all of the Certificates in proportion to
their respective amounts of Interest Distribution Amount payable on such
Distribution Date absent such reductions.
LAND HOME CONTRACT: Each Manufactured Home retail installment contract
evidencing (i) the Obligor's obligation to pay the indebtedness evidenced by
such Contract and (ii) the security interest in the related Collateral; and that
is coupled with a Mortgage Loan.
LIQUIDATION CONTRACT: With respect to any Distribution Date, a defaulted
Contract (including any Repossessed Collateral) which was liquidated during the
related Due Period and as to which the Servicer has determined (in accordance
with this Agreement) that it has received all amounts it expects to receive in
connection with the liquidation of such Contract, including the final
disposition of the related Repossessed Collateral (exclusive of any possibility
of a deficiency judgment).
LIQUIDATION PROCEEDS: Cash (including Insurance Proceeds, other than those
applied to the restoration of the related Collateral or released to the related
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Obligor in accordance with the normal servicing procedures of the Servicer, and
Condemnation Proceeds) received in connection with the liquidation of defaulted
Contracts, whether through foreclosure, repossession or otherwise.
LOAN-TO-VALUE RATIO OR LTV: With respect to any Contract, the ratio of the
original outstanding principal amount of the Contract, including prepaid finance
charges to (i) with respect to any Contract that is not located in California
and that is not Land Home Contract, the cash selling price of the Collateral
plus the sum of (a) sales tax, (b) freight, (c) prepaid finance charges, (d)
closing fees to third parties and (e) insurance or (ii) with respect to any
Contract located in California or that is Land Home Contract, the sum of the
Appraised Value of the Collateral plus the sum of (a) sales tax, (b) freight,
(c) prepaid finance charges, (d) closing fees to third parties and (e)
insurance.
LOST MORTGAGE NOTE: Any Mortgage Note the original of which was permanently
lost or destroyed and has not been replaced.
MAJORITY IN INTEREST: With respect to any Class of Regular Certificates,
the Holders of Certificates of such Class evidencing, in the aggregate, at least
51 % of the Percentage Interests evidenced by all Certificates of such Class.
MANUFACTURED HOME: (i) A structure, transportable in one or more sections,
built to National Manufactured Home Construction and Safety Standards, on a
permanent chassis and designed to be used as a single family dwelling with or
without a permanent foundation when connected to the required utilities
including any plumbing, heating, air conditioning and electrical systems present
and installed in the Manufactured Home or (ii) a manufactured home, including
all accessions thereto, that is legally classified as real property under
applicable state law and as set forth on the Contract Schedule.
MONTHLY ADVANCE REIMBURSEMENT AMOUNT: Any amount received or deemed to be
received by the Servicer pursuant to Section 4.01(b) or (c) in reimbursement of
an Advance made out of its own funds.
MONTHLY EXCESS CASHFLOW: For any Distribution Date, an amount equal to the
sum of the Monthly Excess Interest and Overcollateralization Release Amount, if
any, for such date.
MONTHLY EXCESS INTEREST: With respect to any Distribution Date, the
Interest Remittance Amount remaining after the application of payments
pursuant to clauses (i) through (xiii) of Section 4.02(a) and the Formula
Principal Distribution Amount remaining after the application of payments
pursuant to clauses (i) through (v) of Section 4.02(b).
MONTHLY STATEMENT: The statement delivered to the Certificateholders
pursuant to Section 4.04.
MOODY'S: ▇▇▇▇▇'▇ Investors Service, Inc., or any successor thereto. For
purposes of Section 10.05 the address for notices to Moody's shall be ▇▇▇▇▇'▇
Investors Service, Inc., ▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention:
Manufactured Housing Monitoring Department, or such other address as Moody's may
hereafter furnish to the Depositor, the Servicer and the Trustee.
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MORTGAGE: The mortgage, deed of trust, security deed, deed to secure debt,
extension agreement, assumption of indebtedness or other instrument(s) creating
a first lien on or first priority security title ownership interest in real
property securing a Mortgage Note.
MORTGAGE LOAN: A loan made by the Originator as lender, or its assignor as
lender, evidenced by a Mortgage Note and secured by a Mortgage.
MORTGAGE NOTE: The original executed note or other evidence of indebtedness
evidencing the indebtedness of a Obligor under a Contract.
MORTGAGED PROPERTY: The real property, including improvements and related
interests, securing a Mortgage.
NET CONTRACT RATE: As to each Contract, and at any time, the per annum
rate equal to the Contract Rate less the related Expense Fee
Rate.
NET FUNDS CAP: With respect to any Distribution Date, a per annum rate
equal to the weighted average of the Net Contract Rates of the Contracts as of
the first day of the related Due Period.
NET LIQUIDATION PROCEEDS: Liquidation Proceeds, net of (1) unreimbursed,
reasonable out-of-pocket expenses, including fees and expenses of legal counsel,
and (2) unreimbursed Servicing Fees, Servicing Advances and Advances.
NET SIMPLE INTEREST EXCESS: As of any Distribution Date, the excess, if
any, of the aggregate amount of Simple Interest Excess over the amount of Simple
Interest Shortfall.
NET SIMPLE INTEREST SHORTFALL: As of any Distribution Date, the excess, if
any, of the aggregate amount of Simple Interest Shortfall over the amount of
Simple Interest Excess.
NON-UNITED STATES PERSON: Any Person other than a United States Person.
NONRECOVERABLE ADVANCE: With respect to any Contract, any portion of an
Advance or Servicing Advance previously made or proposed to be made by the
Servicer that, in the good faith judgment of the Servicer, will not be
ultimately recoverable by the Servicer from the related Obligor, related
Liquidation Proceeds or otherwise.
NOTIONAL AMOUNT:. With respect to the Class SB Certificates and any Payment
Date, the aggregate of the principal balances for all Classes of REMIC I Regular
Interests before giving effect to payments to be made and the allocation of
Realized Losses to occur on such Payment Date.
NOTIONAL AMOUNT CERTIFICATES: The Class SB Certificates.
OBLIGOR: The individual buyer or buyers of the Manufactured Home identified
in the Contract or Mortgage, as applicable, and their successors and assigns who
agree to pay the indebtedness identified therein and who granted a security
interest in the Collateral to the Originator and its assignees.
OFFERED CERTIFICATES: All Classes of Certificates other than the Private
Certificates.
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OFFICER'S CERTIFICATE: A certificate signed by the Chairman of the Board or
the Vice Chairman of the Board or the President or a Vice President or an
Assistant Vice President or the Treasurer or the Secretary or one of the
Assistant Treasurers or Assistant Secretaries of a Servicer or any certificate
of any Servicing Officer, and delivered to the Depositor or the Trustee, as the
case may be, as required by this Agreement.
OPINION OF COUNSEL: A written opinion of counsel, who may be counsel for
the Depositor or the Servicer, including in-house counsel, reasonably acceptable
to the Trustee; provided, however, that with respect to the interpretation or
application of the REMIC Provisions, such counsel must (i) in fact be
independent of the Depositor and the Servicer, (ii) not have any material direct
financial interest in the Depositor or the Servicer or in any affiliate of
either, 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. The cost of any Opinion of Counsel, except as
otherwise specifically provided herein, shall not be at the expense of the
Trustee.
OPTIONAL TERMINATION DATE: The first Distribution Date on which the Pool
Scheduled Principal Balance is less than or equal to ten percent of the Cut-off
Date Pool Principal Balance.
ORIGINATOR: The CIT Group/Sales Financing, Inc., a Delaware corporation, or
The CIT Group/Consumer Finance, Inc. (NY), a New York corporation, as
applicable.
OTS: The Office of Thrift Supervision.
OUTSTANDING: With respect to the Certificates as of any date of
determination, all Certificates theretofore executed and authenticated under
this Agreement except:
(i) Certificates theretofore canceled by the Trustee or delivered to the
Trustee for cancellation; and
(ii) Certificates in exchange for which or in lieu of which other
Certificates have been executed and delivered by the Trustee pursuant to
this Agreement.
OUTSTANDING AMOUNT ADVANCED: With respect to any Distribution Date, the
aggregate of all Advances made by the Servicer out of its own funds pursuant to
Section 4.01 less the aggregate of all Monthly Advance Reimbursement Amounts
actually received by the Servicer prior to such Distribution Date.
OUTSTANDING CONTRACT: As of any Due Date, a Contract with a Stated
Principal Balance greater than zero which was not the subject of a Payoff prior
to such Due Date and which did not become a Liquidation Contract prior to such
Due Date.
OVERCOLLATERALIZATION AMOUNT: For any Distribution Date, an amount equal to
the amount, if any, by which (x) the Pool Scheduled Principal Balance for such
Distribution Date exceeds (y) the aggregate Certificate Balances of the
Certificates (other than the Class SB Certificates) after giving effect to
payments on such Distribution Date.
OVERCOLLATERALIZATION RELEASE AMOUNT: For any Distribution Date, an amount
equal to the lesser of (x) the related Principal Remittance Amount for such
Distribution Date and (y) the amount, if any, by which (1) the
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Overcollateralization Amount for such date, calculated for this purpose on the
basis of the assumption that 100% of the aggregate of the related Principal
Remittance Amount for such date is applied on such date in reduction of the
aggregate Certificate Balances of the Certificates (other than the Class SB
Certificates), exceeds (2) the Targeted Overcollateralization Amount for such
date.
OWNERSHIP INTEREST: As to any Residual Certificate, any ownership or
security interest in such Certificate including any interest in such Certificate
as the Holder thereof and any other interest therein, whether direct or
indirect, legal or beneficial.
PASS-THROUGH RATE: With respect to each Class of Certificates, other than
the Class SB Certificates, the Class A Pass-Through Rate, the Class M-1
Pass-Through Rate, the Class M-2 Pass-Through Rate, the Class B-1 Pass-Though
Rate and the Class B-2 Pass-Through Rate, as applicable. With respect to the
Class SB Certificates or the Class SB-IO Interest and any Distribution Date, a
rate per annum equal to the percentage equivalent of a fraction, the numerator
of which is the sum of the amounts calculated pursuant to clauses (A) through
(C) below, and the denominator of which is the aggregate principal balance of
the REMIC I Regular Interests and the Class R-I Certificate. For purposes of
calculating the Pass-Through Rate for the Class SB Certificates, the numerator
is equal to the sum of the following components:
(A) the REMIC I Remittance Rate for REMIC I Regular Interest I-LT1 minus
two (2) times the weighted average of the REMIC I Remittance Rates for REMIC I
Regular Interest I-LT2 and I-LT3 applied to a notional amount equal to the
Uncertificated Balance of I-LT1.
(B) the REMIC I Remittance Rate for REMIC I Regular Interest I-LT2 minus
two (2) times the weighted average of the REMIC I Remittance Rates for REMIC I
Regular Interests I-LT2 and I-LT3 applied to a notional amount equal to the
Uncertificated Balance of I-LT2.
(C) the REMIC I Remittance Rate for REMIC I Regular Interest I-LT4 minus
four (4) times the weighted average of the REMIC I Remittance Rates for REMIC I
Regular Interests I-LT2 and I-LT3 applied to a notional amount equal to the
Uncertificated Balance of I-LT4.
(D) the excess of the Net Funds Cap over 6.70% applied to a notional amount
equal to the Class R-I Certificate Balance.
PAYAHEAD: Any Scheduled Payment intended by the related Obligor to be
applied in a Due Period subsequent to the Due Period in which such
payment was received.
PAYOFF: Any payment of principal on a Contract equal to the entire
outstanding principal balance of such Contract, if received in advance of the
last scheduled Due Date for such Contract and accompanied by an amount of
interest equal to accrued unpaid interest on the Contract to the date of such
payment-in-full.
PERCENTAGE INTEREST: As to any Certificate, either the percentage set forth
on the face thereof or equal to the percentage obtained by dividing the
Denomination of such Certificate by the aggregate of the Denominations of all
Certificates of the same Class.
PERMITTED TRANSFEREE: Any Transferee of a Class R Certificate, other than a
Disqualified Organization or Non-United States Person.
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PERSON: Any individual, corporation, partnership, joint venture,
association, limited liability company, joint-stock company, trust,
unincorporated organization or government, or any agency or political
subdivision thereof.
PHYSICAL CERTIFICATES: The Class B-2, Class R and Class SB Certificates.
POOL SCHEDULED PRINCIPAL BALANCE: With respect to any Distribution Date,
the sum of the Stated Principal Balances of all Contracts at the end of the
related Due Period.
PREPAYMENT INTEREST SHORTFALL: With respect to any Distribution Date, any
Contract and any Principal Prepayments in Full that occurs during the related
Due Period, the difference between (i) accrued interest during the related Due
Period at the applicable Contract Rate, as reduced by the Servicing Fee Rate, on
the outstanding principal balance of such Contract immediately prior to such
prepayment and (ii) the amount of interest due and actually received from the
related Obligor that accrued during the related Due Period with respect to such
Contract in connection with such Principal Prepayment in Full, as reduced by the
Servicing Fee with respect to such Contract.
PRINCIPAL DISTRIBUTION TESTS: A test that will be satisfied with respect to
any Distribution Date, if (i) the Distribution Date occurs in or after November
2006, (ii) the Average Sixty-Day Delinquency Ratio is less than or equal to
7.0%, (iii) the Current Realized Loss Ratio is less than or equal to 2.5%, and
(iv) the Cumulative Realized Loss Test is satisfied.
PRINCIPAL PREPAYMENT: Any payment of principal on a Contract which
constitutes a Payoff or Curtailment.
PRINCIPAL PREPAYMENT IN FULL: Any Principal Prepayment of the entire
principal balance of a Contract.
PRINCIPAL REMITTANCE AMOUNT: For any Distribution Date, an amount equal to
the sum of (1) all principal collected (other than Payaheads) or advanced in
respect of Scheduled Payments on the Contracts during the related Due Period
(less unreimbursed Advances, Servicing Advances and other amounts due to the
Servicer and the Trustee with respect to such Contracts, to the extent allocable
to principal) and the principal portion of Payaheads previously received and
intended for application in the related Due Period, (2) all Principal
Prepayments on the Contracts received during the related Due Period, (3) the
outstanding principal balance of each Contract that was repurchased by the
Seller during the related Due Period, (4) the portion of any Substitution
Adjustment Amount paid with respect to any Deleted Contracts during the related
Due Period, to the extent allocable to principal, and (5) all Liquidation
Proceeds and other recoveries (net of unreimbursed Advances, Servicing Advances
and other expenses, to the extent allocable to principal) collected with respect
to the Contracts during the related Due Period, to the extent allocable to
principal.
PRIVATE CERTIFICATES: The Class B-2 Certificates and the Class SB
Certificates.
PURCHASE AND SALE AGREEMENT: That certain purchase and sale agreement dated
as of March 24, 2002, by and between the Seller and the Depositor, relating to
the Contracts and the Guarantee Agreement.
QUALIFIED SUBSTITUTE CONTRACT: A Contract substituted by the Seller for a
Deleted Contract which must, on the date of such substitution, as confirmed in a
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Request for Release, substantially in the form as set forth in the Custodial
Agreement have a Stated Principal Balance, after deduction of the principal
portion of the Scheduled Payment due in the month of substitution (or, in the
case of a substitution of more than one contract for a Deleted Contract, an
aggregate Stated Principal Balance), not in excess of, and not more than 10%
less than the Stated Principal Balance of the Deleted Contract; (ii) be accruing
interest at a rate no lower than and not more than 1% per annum higher than,
that of the Deleted Contract; (iii) have a Loan-to-Value Ratio no higher than
that of the Deleted Contract; (iv) have a remaining term to maturity no greater
than (and not more than one year less than that of) the Deleted Contract; (v)
and (v) comply with each representation and warranty set forth in Section
2.03(b).
RATING AGENCY: Fitch, Moody's, and S&P. If any such organization or a
successor is no longer in existence, "Rating Agency" shall be such nationally
recognized statistical rating organization, or other comparable Person, as is
designated by the Depositor, notice of which designation shall be given to the
Trustee and the Servicer. References herein to a given rating or rating category
of a Rating Agency shall mean such rating category without giving effect to any
modifiers.
RATINGS: As of any date of determination, the ratings, if any, of the
Certificates as assigned by the Rating Agencies.
REALIZED LOSS: With respect to each Liquidation Contract, an amount (not
less than zero or more than the Stated Principal Balance of the Contract) as of
the date of such liquidation, equal to (i) the Stated Principal Balance of the
Liquidation Contract as of the date of such liquidation, plus (ii) interest at
the Net Contract Rate from the related Due Date as to which interest was last
paid or advanced (and not reimbursed) to Certificateholders up to the related
Due Date in the month in which Liquidation Proceeds are required to be
distributed on the Stated Principal Balance of such Liquidation Contract from
time to time, minus (iii) the Net Liquidation Proceeds, if any, received during
the month in which such liquidation occurred, to the extent applied as
recoveries of interest at the Net Contract Rate and to principal of the
Liquidation Contract.
RECORD DATE: With respect to each Distribution Date, the last Business Day
of the calendar month preceding such Distribution Date.
REGULAR CERTIFICATES: All Classes of Certificates other than the Class R
Certificates.
RELIEF ACT: The Soldiers' and Sailors' Civil Relief Act of 1940, as
amended.
REMIC: A "real estate mortgage investment conduit" within the meaning of
Section 860D of the Code.
REMIC ADMINISTRATOR: The Trustee.
REMIC I: The segregated pool of assets subject hereto, constituting the
primary trust created hereby and to be administered hereunder, with respect to
which a REMIC election is to be made consisting of (i) such Contracts as from
time to time are subject to this Agreement, together with the Contract Documents
relating thereto, and together with all collections thereon and proceeds
thereof, (ii) any Repossessed Collateral, together with all collections thereon
and proceeds thereof, (iii) the Trustee's rights with respect to the Contracts
under all insurance policies required to be maintained pursuant to this
Agreement and any proceeds thereof and, (iv) the Collection Account (other than
34
amounts due to the Servicer) and the Certificate Account and such assets that
are deposited therein from time to time and any investments thereof.
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 REALIZED LOSSES: For any Distribution Date, Realized Losses for the
related Due Period shall be allocated as follows: The interest Realized Losses,
if any, shall be allocated among the classes of REMIC I Regular Interests
pro-rata according to the accrued certificate interest thereon to the extent of
such accrued certificate interest 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 and allocated pursuant to the
succeeding sentences. The principal Realized Losses shall be allocated (i)
first, to the Class I-LT2, Class I-LT3 and Class I-LT4 REMIC I Regular Interests
pro-rata according to their respective Principal Reduction Amounts for such
Distribution Date up to the amount thereof, (ii) second, any principal Realized
Losses not allocated to either the Class I-LT2, Class I-LT3 and Class I-LT4
REMIC I Regular Interests pursuant to the proviso of clause (i) shall be
allocated to the Class I-LT1 REMIC I Regular Interest until the principal
balance thereof is reduced to zero, and (iii) third, any remaining principal
Realized Losses shall be allocated among the Class I-LT2, Class I-LT3 and Class
I-LT4 REMIC I Regular Interests pro-rata according to their respective remaining
principal balances.
REMIC I REGULAR INTEREST I-LT1: One of the separate non-certificated
beneficial ownership interests in REMIC I issued hereunder and designated as
a Regular Interest in REMIC I. REMIC I Regular Interest I-LT1 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.
REMIC I REGULAR INTEREST I-LT2: One of the separate non-certificated
beneficial ownership interests in REMIC I issued hereunder and designated as a
Regular Interest in REMIC I. REMIC I Regular Interest I-LT2 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.
REMIC I REGULAR INTEREST I-LT3: One of the separate non-certificated
beneficial ownership interests in REMIC I issued hereunder and designated as a
Regular Interest in REMIC I. REMIC I Regular Interest I-LT3 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.
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REMIC I REGULAR INTEREST I-LT4: One of the separate non-certificated
beneficial ownership interests in REMIC I issued hereunder and designated as a
Regular Interest in REMIC I. REMIC I Regular Interest I-LT4 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.
REMIC I REMITTANCE RATE: For REMIC I Regular Interests LT-1 and LT-2, the
Net Funds Cap; for REMIC I Regular Interest LT-3, zero (0.00% per annum); for
REMIC I Regular Interest LT-4, twice the Net Funds Cap; and for the Class R-1
Certificate, the Net Funds Cap.
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 following three certificated
beneficial ownership interests in REMIC II issued hereunder and four
uncertificated REMIC II Regular Interests defined herein, and, hereby,
designated as a "regular interest" in REMIC II: Class A Certificates, Class M-1
Certificates, Class M-2 Certificates, REMIC II Regular Interest B-1 and REMIC II
Regular Interest B-2, REMIC II Regular Interest SB-PO and REMIC II Regular
Interest SB-IO.
REMIC II REGULAR INTEREST B-1: A separate non-certificated beneficial
ownership interests in REMIC II issued hereunder and designated as a Regular
Interest in REMIC II. REMIC II Regular Interest B-1 shall be entitled to
interest at the Remittance Rate set forth in the Preliminary Statement, and
shall be entitled to distributions of principal subject to the terms and
conditions hereof, in aggregate amount equal to the initial Certificate Balance
of the Class B-1 Certificates as set forth in the Preliminary Statement hereto.
REMIC II REGULAR INTEREST B-2: A separate non-certificated beneficial
ownership interests in REMIC II issued hereunder and designated as a Regular
Interest in REMIC II. REMIC II Regular Interest B-2 shall be entitled to
interest at the Remittance Rate set forth in the Preliminary Statement, and
shall be entitled to distributions of principal subject to the terms and
conditions hereof, in aggregate amount equal to the initial Certificate Balance
of the Class B-2 Certificates as set forth in the Preliminary Statement hereto.
REMIC II REGULAR INTEREST SB-IO: A separate non-certificated beneficial
ownership interests in REMIC II issued hereunder and designated as a Regular
Interest in REMIC II. REMIC II Regular Interest SB-IO shall have no entitlement
to principal, and shall be entitled to distributions of interest subject to the
terms and conditions hereof, in aggregate amount equal to the interest
distributable with respect to the Class SB Certificates pursuant to the terms
and conditions hereof.
REMIC II REGULAR INTEREST SB-PO: A separate non-certificated beneficial
ownership interests in REMIC II issued hereunder and designated as a Regular
Interest in REMIC II. REMIC II Regular Interest SB-PO shall have no entitlement
to interest, and shall be entitled to distributions of principal subject to the
terms and conditions hereof, in aggregate amount equal to the initial
Certificate Balance of the Class SB Certificates as set forth in the Preliminary
Statement hereto.
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REMIC PROVISIONS: Provisions of the federal income tax law relating to real
estate mortgage investment conduits, which appear at sections 860A through 860G
of Subchapter M of Chapter 1 of the Code, and related provisions, and
regulations promulgated thereunder, as the foregoing may be in effect from time
to time.
REPOSSESSED COLLATERAL: Collateral acquired by the Trust Fund through
repossession or foreclosure in connection with a defaulted Contract.
REPURCHASE PRICE: With respect to any Contract required to be purchased by
the Seller pursuant to this Agreement or purchased at the option of the Servicer
pursuant to this Agreement, an amount equal to the sum of (i) 100% of the unpaid
principal balance of the Contract on the date of such purchase, and (ii) accrued
and unpaid interest thereon at the applicable Contract Rate (reduced by the
Servicing Fee Rate if the purchaser of the Contract is also the Servicer
thereof) from the date through which interest was last paid by the Obligor to
the Due Date in the month in which the Repurchase Price is to be distributed to
Certificateholders.
REQUEST FOR RELEASE: The Request for Release submitted by the Servicer to
the Custodian substantially in the form of EXHIBIT L. ---------
REQUIRED INSURANCE POLICY: With respect to any Contract, any insurance
policy that is required to be maintained from time to time under this Agreement.
RESIDUAL CERTIFICATES: The Class R Certificates.
RESPONSIBLE OFFICER: When used with respect to the Trustee, any Vice
President, any Assistant Vice President, any Assistant Secretary, any Trust
Officer or any other officer or employee of the Trustee customarily performing
functions similar to those performed by any of the above designated officers and
also to whom, with respect to a particular matter, such matter is referred
because of such officer's or employee's knowledge of and familiarity with the
particular subject and in each case who shall have direct responsibility for the
administration of this Agreement.
S&P: Standard & Poor's Ratings Agency, a division of The ▇▇▇▇▇▇-▇▇▇▇
Companies, Inc. For purposes of Section 10.05 the address for notices to S&P
shall be Standard & Poor's, ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇
▇▇▇▇▇, or such other address as S&P may hereafter furnish to the Depositor, the
Servicer and the Trustee.
SAIF: The Savings Association Insurance Fund, or any successor thereto.
SCHEDULED PAYMENT: The scheduled monthly payment on a Contract due on any
Due Date allocable to principal and/or interest on such Contract pursuant to the
terms of the related Mortgage Note.
SECURED PROPERTY: The property securing a Contract, which consists of a
Manufactured Home, not considered real property under applicable state law and
any additional personal property identified in the Contract as collateral
securing payment of the Contract.
SECURITIES ACT: The Securities Act of 1933, as amended.
SELLER: DLJ Mortgage Capital, Inc., a Delaware corporation, and its
successors and assigns.
37
SERVICER: The CIT Group/Sales Financing, Inc., a Delaware corporation and
any successors in interest, as applicable.
SERVICER REMITTANCE DATE: With respect to any Contract and Distribution
Date, the 18th calendar day of the month in which such Distribution Date occurs
or the preceding Business Day if such calendar day is not a Business Day.
SERVICER REMITTANCE REPORT: With respect to each Distribution Date, the
servicing information delivered to the Trustee pursuant to Section 4.04(a) which
contains the information required to prepare the Monthly Statement.
SERVICING ADVANCE: All reasonable and customary "out of pocket" costs and
expenses incurred in the performance by the Servicer of its servicing
obligations, including, but not limited to, the cost (including reasonable
attorneys' fees and disbursements) of (i) the preservation, restoration and
protection of Collateral, (ii) any enforcement or judicial proceedings,
including foreclosures and any litigation related to a Contract, (iii) the
management and liquidation of any Repossessed Collateral including reasonable
fees paid to any independent contractor in connection therewith, (iv) compliance
with the obligations under Section 3.08 or 3.09 and (v) in connection with the
liquidation of a Contract, expenditures relating to the purchase or maintenance
of a first lien Contract, all of which reasonable and customary out-of-pocket
costs and expenses are reimbursable to the Servicer to the extent provided in
Sections 3.07(a)(ii), (iii), (iv) and (vi).
SERVICING FEE: With respect to each Contract and any Distribution Date, the
fee payable to the Servicer on such Distribution Date for its services as
Servicer hereunder, in an amount equal to one-twelfth of the Servicer Fee Rate
multiplied by the Stated Principal Balance of such Contract as of the first day
of the related Due Period.
SERVICING FEE RATE: With respect to any Contract, 0.75% per annum;
provided, however, that with respect to any successor servicer appointed
pursuant to Section 7.02, the Servicing Fee Rate with respect to any Contract
will be 1.00% or such other rate as agreed to by the parties to this Agreement;
provided that if the Servicing Fee Rate is greater than 1.00%, the Depositor has
received written confirmation from each of the Rating Agencies that such higher
fee will not cause a downgrade or withdrawal of the then current rating on any
Class of Certificates.
SERVICING OFFICER: Any officer of the servicer involved in, or responsible
for, the administration and servicing of the Contracts whose name appears in a
list of servicing officers furnished to the Trustee by the Servicer, as such
list may from time to time be amended.
SIMPLE INTEREST CONTRACT: Any Contract for which the interest due thereon
is calculated based on the actual number of days elapsed between the date on
which interest was last paid through the date on which the most current payment
is received.
SIMPLE INTEREST EXCESS: With respect to the first Distribution Date and for
each Simple Interest Qualifying Loan, the excess, if any, of (i) the portion of
the monthly payments received from the Obligor for such Contract allocable to
interest with respect to the related Due Period, over (ii) 37 days' interest on
the Stated Principal Balance of such Contract at the Contract Rate. With respect
to any Distribution Date after the first Distribution Date and for each Simple
Interest Qualifying Loan, the excess, if any, of (i) the portion of the monthly
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payment received from the Obligor for such Contract allocable to interest with
respect to the related Due Period, over (ii) 30 days' interest on the Stated
Principal Balance of such Contract at the Contract Rate.
SIMPLE INTEREST QUALIFYING LOAN: As of any Determination Date, any Simple
Interest Contract that was neither prepaid in full during the related Due
Period, nor delinquent with respect to a payment that became due during the
related Due Period as of the close of business on the Determination Date
following such Due Period.
SIMPLE INTEREST SHORTFALL: With respect to the first Distribution Date and
for each Simple Interest Qualifying Loan, the excess, if any, of (i) 37 days'
interest on the Stated Principal Balance of such Contract at the Contract Rate,
over (ii) the portion of the monthly payments received from the Obligor for such
Contract allocable to interest with respect to the related Due Period. With
respect to any Distribution Date after the first Distribution Date and for each
Simple Interest Qualifying Loan, the excess, if any, of (i) 30 days' interest on
the Stated Principal Balance of such Contract at the Contract Rate, over (ii)
the portion of the monthly payment received from the Obligor for such Contract
allocable to interest with respect to the related Due Period.
SPECIAL SERVICER: Olympus Servicing, L.P., a Delaware limited partnership,
and its successors and assigns.
SPECIAL SERVICED CONTRACTS: Contracts for which the Special Servicer acts
as Servicer pursuant to Section 3.18.
STARTUP DAY: The Closing Date.
STATED PRINCIPAL BALANCE: With respect to any Contract or related
Repossessed Collateral as of any date of determination, (i) the Cut-off Date
Principal Balance of such Contract, minus (ii) the sum of (a) the principal
portion of the Scheduled Payments due with respect to such Contract or
Repossessed Collateral during each Due Period ending prior to the most recent
Distribution Date which were received or with respect to which an Advance was
made, and (b) all Principal Prepayments with respect to such Contract, and all
Insurance Proceeds, Condemnation Proceeds, Liquidation Proceeds and proceeds
received in respect of Repossessed Collateral, to the extent applied by the
Servicer as recoveries of principal with respect to such Contract or Repossessed
Collateral, in each case which were distributed pursuant to Section 4.02 on any
previous Distribution Date, and (c) any Realized Loss allocated to
Certificateholders with respect thereto for any previous Distribution Date.
SUBORDINATE CERTIFICATES: The Class M-1, Class M-2, Class B-1, Class B-2
Certificates and Class SB Certificates.
SUBSERVICER: Any Subservicer which is subservicing any of the Contracts
pursuant to a Subservicing Agreement. Any subservicer shall meet the
qualifications set forth in Section 3.02.
SUBSERVICING AGREEMENT: An agreement between the Servicer and a Subservicer
for the servicing of the related Contracts.
SUBSTITUTION ADJUSTMENT AMOUNT: As defined in Section 2.03.
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TARGETED OVERCOLLATERALIZATION AMOUNT: For any Distribution Date, the
lesser (i) 7.00% of the Cut-off Date Pool Principal Balance plus all amounts
paid in respect of principal to the Class B-2 Certificates under the Guarantee
Agreement and (ii) the aggregate of the Certificate Balances as of such
Distribution Date.
TRANSFER AFFIDAVIT AND AGREEMENT: As defined in Section 5.02(d)(i)(B)
TRANSFEREE: Any Person who is acquiring by transfer any Ownership Interest
in a Certificate.
TRANSFEROR: Any Person who is disposing by transfer of any Ownership
Interest in a Certificate.
TRUST: CSFB ABS Trust Series 2002-MH3 established pursuant to this
Agreement.
TRUSTEE: JPMorgan Chase Bank, in its capacity as trustee under this
agreement and assigns in such capacity.
TRUSTEE FEE: With respect to each Contract and any Distribution Date, the
fee payable to the Trustee on such Distribution Date for its services as Trustee
hereunder, in an amount equal to one-twelfth of the Trustee Fee Rate multiplied
by the Stated Principal Balance of such Contract as of the first day of the
related Due Period.
TRUSTEE FEE RATE: 0.004% per annum.
TRUST FUND: The corpus of the trust created hereunder consisting of (i) the
Contracts and all interest and principal received on or with respect thereto
after the Cut-off Date, other than such amounts which were due on the Contracts
on or before the Cut-off Date; (ii) the Collection Account, the Certificate
Account and all amounts deposited therein pursuant to the applicable provisions
of this Agreement; (iii) property which secured a Contract and which has been
acquired by foreclosure or deed in lieu of foreclosure after the applicable
Cut-off Date; (iv) the Depositor's rights under the Purchase and Sale Agreement;
(v) the Guarantee Agreement and (vi) all proceeds of the conversion, voluntary
or involuntary, of any of the foregoing.
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, as applicable, on such Distribution Date pursuant to
Section 4.02 and, to the extent necessary and appropriate, shall be further
reduced on such Distribution Date by Realized Losses as provided in Section
4.03. The Uncertificated Balance of each REMIC I Regular Interest shall never be
less than zero. With respect to REMIC II Regular Interest SB-PO the initial
amount set forth with respect thereto in the Preliminary Statement as reduced by
distributions deemed made in respect thereof pursuant to Section 4.03. With
respect to REMIC II Regular Interests B-1 and B-2, the Class B-1 Certificate
Balance and the Class B-2 Certificate Balance, respectively.
UNCERTIFICATED INTEREST: With respect to any REMIC I Regular Interest for
any Distribution Date, accrued interest during the related Accrual Period at the
REMIC I Remittance Rate applicable to such REMIC I Regular Interest for such
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Distribution Date, accrued on the Uncertificated Balance thereof immediately
prior to such Distribution Date. Uncertificated Interest in respect of any REMIC
I Regular ▇▇▇▇▇▇▇▇ ▇-▇▇▇, ▇-▇▇▇, ▇-▇▇▇ and I-LT4 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. Uncertificated Interest on the REMIC II
Regular Interest SB-IO for each Distribution Date shall equal Accrued
Certificate Interest for the Class SB Certificates. With respect to REMIC II
Regular Interests B-1 and B-2, for any Distribution Date, interest accrued
during the related Accrual Period at the applicable REMIC II Remittance Rate on
the Uncertificated Balance thereof. In addition, Uncertificated Interest with
respect to each Distribution Date, as to any REMIC I Regular Interest shall be
reduced by interest portion of Realized Losses allocable to such REMIC I Regular
Interest, if any, pursuant to Section 4.03 hereof.
UNITED STATES PERSON: (i) A citizen or resident of the United States, (ii)
a corporation, partnership or other entity treated as a corporation or
partnership for United States federal income tax purposes organized in or under
the laws of the United States or any state thereof or the District of Columbia
(unless, in the case of a partnership, Treasury regulations provide otherwise),
provided that, for purposes solely of the restrictions on the transfer of
residual interests, no partnership or other entity treated as a partnership for
United States federal income tax purposes shall be treated as a United States
Person unless all persons that own an interest in such partnership either
directly or indirectly through any chain of entities no one of which is a
corporation for United States federal income tax purposes are required by the
applicable operating agreement to be United States Persons, (iii) an estate the
income of which is includible in gross income for United States tax purposes,
regardless of its source, or (iv) a trust if a court within the United States is
able to exercise primary supervision over the administration of the trust and
one or more United States persons have authority to control all substantial
decisions of the trust. Notwithstanding the preceding sentence, to the extent
provided in Treasury regulations, certain trusts in existence on August 20,
1996, and treated as United States persons prior to such date, that elect to
continue to be treated as United States persons will also be a United States
Person.
UNPAID CLASS A PRINCIPAL SHORTFALL: With respect to any Distribution Date,
the amount, if any, by which the aggregate unreimbursed Class A Principal
Shortfalls for one or more prior Distribution Dates exceeds the amount
previously distributed to the Class A Certificateholders in respect of Class A
Principal Shortfalls on one or more prior Distribution Dates.
UNPAID CLASS B-1 PRINCIPAL SHORTFALL: With respect to any Distribution
Date, the amount, if any, by which the aggregate Class B-1 Principal Shortfalls
for one or more prior Distribution Dates exceeds the amount previously
distributed to the Class B-1 Certificateholders in respect of Class B-1
Principal Shortfalls on one or more prior Distribution Dates.
UNPAID CLASS B-2 PRINCIPAL SHORTFALL: With respect to any Distribution
Date, the amount, if any, by which the aggregate Class B-2 Principal Shortfalls
for one or more prior Distribution Dates exceeds the amount previously
distributed to the Class B-2 Certificateholders in respect of Class B-2
Principal Shortfalls on one or more prior Distribution Dates.
UNPAID CLASS M-1 PRINCIPAL SHORTFALL: With respect to any Distribution
Date, the amount, if any, by which the aggregate Class M-1 Principal Shortfalls
for one or more prior Distribution Dates exceeds the amount previously
distributed to the Class M-1 Certificateholders in respect of Class M-1
Principal Shortfalls on one or more prior Distribution Dates.
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UNPAID CLASS M-2 PRINCIPAL SHORTFALL: With respect to any Distribution
Date, the amount, if any, by which the aggregate Class M-2 Principal Shortfalls
for one or more prior Distribution Dates exceeds the amount previously
distributed to the Class M-2 Certificateholders in respect of Class M-2
Principal Shortfalls on one or more prior Distribution Dates.
VOTING RIGHTS: The portion of the voting rights of all the Certificates
that is allocated to any Certificate for purposes of the voting provisions of
this Agreement. At all times during the term of this Agreement, 99% of all
Voting Rights shall be allocated among the Class A, Class M-1, Class M-2 and
Class B Certificates. The portion of such 99% Voting Interests shall be
allocated to each of the Class A, Class M-1, Class M-2 and Class B Certificates
based on the fraction, expressed as a percentage, the numerator of which is the
Certificate Balance of such Class then outstanding and the denominator of which
is the aggregate Certificate Balances of the Class A, Class M-1, Class M-2 and
Class B Certificates then outstanding. The Class SB Certificates shall be
allocated 1% of the Voting Rights. Voting Rights shall be allocated among the
Certificates within each such Class (other than the Class SB Certificates, which
has only one certificate) in accordance with their respective Percentage
Interests. The Class R Certificates shall have no voting rights.
SECTION 1.02 INTEREST CALCULATIONS.
Interest on the Certificates shall be calculated during the related Accrual
Period on the basis of a 360-day year consisting of twelve 30-day months. All
dollar amounts calculated hereunder shall be rounded to the nearest ▇▇▇▇▇ with
one-half of one ▇▇▇▇▇ being rounded down.
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ARTICLE II
CONVEYANCE OF CONTRACTS;
REPRESENTATIONS AND WARRANTIES
SECTION 2.01 CONVEYANCE OF CONTRACTS.
(a) The Depositor, concurrently with the execution and delivery hereof,
hereby sells, transfers, assigns, sets over and otherwise conveys to the
Trustee in trust for the benefit of the Certificateholders, without recourse,
all the right, title and interest of the Depositor in and to (i) each
Contract, including all principal received or receivable on or with respect
to such Contracts on or after the Cut-off Date; (ii) all interest received or
receivable on or with respect to such Contracts on or after April 1, 2002;
(iii) seven days' interest on the aggregate Cut-off Date Principal Balance of
such Contracts at a per annum rate equal to the weighted average of the Net
Contract Rates of the Contracts as of the Cut-off Date (calculated on the
basis of twelve 30-day months); (iv) any insurance policies in respect of the
Contracts; (v) the Depositor's rights under the Purchase and Sale Agreement,
(vi) the Guarantee Agreement; and (vii) all proceeds of any of the foregoing.
(b) In connection with the transfer and assignment set forth in clause (a)
above, the Depositor has delivered or caused to be delivered to the Custodian
for the benefit of the Certificateholders, the documents and instruments with
respect to each Contract as assigned (collectively, the "Contract
Documents"), with respect to each Contract:
(i) the fully executed original Contract and all modifications thereto,
executed by the Obligor evidencing indebtedness in connection with the
purchase of a Manufactured Home;
(ii) the original Assignment of Contract, in blank. In the event that the
Contract was acquired by the Originator in a merger, the assignment must be
by "[Originator], successor by merger to [name of predecessor]"; and in the
event that the Contract was acquired or originated by the Originator while
doing business under another name, the assignment must be by "[Originator],
formerly known as [previous name]";
(iii) the original of all assumption, extensions and modification agreements;
(iv) the originals of all intervening assignments of contract; and
(v) either (A) the original title document for the related Manufactured Home
or a duplicate certified by the appropriate governmental authority which
issued the original thereof or the application for such title document or
if the laws of the jurisdiction in which the related Manufactured Home is
located do not provide for the issuance of title documents for manufactured
housing, other evidence of ownership of the related Manufactured Home which
is customarily relied upon in such jurisdiction as evidence of title to a
manufactured housing unit or (B) an original or copy of the UCC-1 Financing
Statements, certified as true and correct by the Originator and all
necessary UCC-3 Continuation Statements with evidence of filing thereon or
copies thereof certified by the Originator to have been sent for filing,
and UCC-3 Assignments executed by the Originator in blank, which UCC-3
Assignments shall be in form and substance acceptable for filing or
notation of the security interest on the title document.
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In addition, with respect to each Land Home Contract, the Contract
Documents shall include the following:
(i) the original Mortgage Note endorsed, "Pay to the order of
________________, without recourse" and signed in the name of the
Originator by an authorized officer. evidencing a complete chain of title
from the originator to the Originator. In the event that the Mortgage Loan
was acquired by the Originator in a merger, the endorsement must be by
"[Originator], successor by merger to [name of predecessor]"; and in the
event that the Mortgage Loan was acquired or originated by the Originator
while doing business under another name, the endorsement must be by
"[Originator], formerly known as [previous name]";
(ii) except as provided below, the original Mortgage with evidence of
recording thereon (which such evidence can also be satisfied by Schedule A
to the related title policy). If the Seller cannot deliver or cause to be
delivered the original Mortgage with evidence of recording thereon on or
prior to the related Closing Date because of a delay caused by the public
recording office where such Mortgage has been delivered for recordation or
because such Mortgage has been lost or because such public recording office
retains the original recorded Mortgage, the Seller shall deliver or cause
to be delivered to the Custodian a photocopy of such Mortgage together with
(A) in the case of a delay caused by the public recording office, an
Officer's Certificate of the title insurer insuring the Mortgage stating
that such Mortgage has been delivered to the appropriate public recording
office for recordation and that the original recorded Mortgage or a copy of
such Mortgage certified by such public recording office to be a true and
complete copy of the original recorded Mortgage will be promptly delivered
to the Custodian upon receipt thereof by the Seller; or (B) in the case of
a Mortgage where a public recording office retains the original recorded
Mortgage or in the case where a Mortgage is lost after recordation in a
public recording office, a copy of such Mortgage with the recording
information thereon certified by such public recording office to be a true
and complete copy of the original recorded Mortgage. In either case, a
copy of the recorded Mortgage with recording information thereon shall be
delivered within 180 days following the applicable Closing Date;
(iii) the original Assignment of Mortgage, in blank, which assignment shall be
in form and substance acceptable for recording but not recorded. In the
event that the Mortgage Loan was acquired by the Originator in a merger,
the assignment must be by "[Originator], successor by merger to [name of
predecessor]"; and in the event that the Mortgage Loan was acquired or
originated by the Originator while doing business under another name, the
assignment must be by "[Originator], formerly known as [previous name]";
(iv) the original policy of title insurance, except for those Mortgage Loans
originated within 60 days before the related Closing Date, for which
Mortgage Loans the Seller shall have delivered and released to the
Custodian the related binders. In addition, the Seller shall deliver to
the Custodian the original policy of title insurance within 180 days after
the related Closing Date. The policy must be properly endorsed, any
necessary notices of transfer must be forwarded and any other action
required to be taken must be taken in order to fully protect, under the
terms of the policy and applicable law, the Trustee's interest as first
mortgagee;
(v) the original of all assumption, extensions and modification agreements;
and
44
(vi) the originals of all intervening assignments of mortgage with evidence
of recording thereon, or if any such intervening assignment of mortgage has
not been returned from the applicable recording office or has been lost or
if such public recording office retains the original recorded assignment of
mortgage, the Seller shall deliver or cause to be delivered to the
Custodian, a photocopy of such intervening assignment of mortgage together
with (A) in the case of a delay caused by the public recording office, an
Officer's Certificate of the title insurer insuring the Mortgage stating
that such intervening assignment of mortgage has been delivered to the
appropriate public recording office for recordation and that such original
recorded intervening assignment of mortgage or a copy of such intervening
assignment of mortgage certified by the appropriate public recording office
to be a true and complete copy of the original recorded intervening
assignment of mortgage will be promptly delivered to the Custodian upon
receipt thereof by the Seller; or (B) in the case of an intervening
assignment of mortgage where a public recording office retains the original
recorded intervening assignment of mortgage or in the case where an
intervening assignment of mortgage is lost after recordation in a public
recording office, a copy of such intervening assignment of mortgage with
recording information thereon certified by such public recording office to
be a true and complete copy of the original recorded intervening assignment
of mortgage. In either case, a copy of the recorded intervening
Assignment of Mortgage with recording information thereon shall be
delivered within 180 days following the related Closing Date.
(c) At least 24 hours prior to delivery of the Contracts, the Depositor will
provide or cause to be provided to the Custodian, via electronic
transmission, a list of all the Contracts and their related data fields
including loan ID, Obligor name, property address, interest rate, maturity
date, and original principal balance of each such Contract. This data shall
be delivered to the Custodian in an acceptable format that can be easily
uploaded to the Custodian's system. A hard copy of the Contract Schedule
will be delivered to the Custodian at the time of delivery to the Custodian
of such documents related to the Contracts identified in such Contract
Schedule.
SECTION 2.02 ACCEPTANCE BY THE TRUSTEE OF THE CONTRACTS.
(a) Based on the Initial Certification of the Custodian, the Trustee
acknowledges receipt by the Custodian documents identified in the Initial
Certification and declares that the Custodian holds and will cause its agent
to hold such documents and the other documents delivered to the Custodian's
constituting the Contract Documents, and that it holds or will hold or will
cause its agent to hold such other assets as are included in the Trust Fund,
in trust for the exclusive use and benefit of all present and future
Certificateholders. The Trustee acknowledges that it or the Custodian will
maintain possession of the Contracts in the State of Texas, State of
California or State of Illinois, as directed by the Depositor, unless
otherwise permitted by the Rating Agencies.
The Trustee agrees to deliver on the Closing Date to the Depositor and
the Servicer an Initial Certification from the Custodian. Based on its review
and examination, and only as to the documents identified in such Initial
Certification, the Custodian acknowledges that such documents appear regular
on their face and relate to such Contract. Neither the Trustee not the
Custodian shall be under any duty or obligation to inspect, review or examine
said documents, instruments, certificates or other papers to determine that
the same are genuine, enforceable, recordable or appropriate for the
represented purpose or that they have actually been recorded in the real
estate records or that they are other than what they purport to be on their
face.
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Not later than 90 days after the Closing Date, upon receipt of a Final
Certification from the Custodian provided in the Custodial Agreement, the
Trustee shall deliver to the Depositor, the Seller and the Servicer such Final
Certification, with any applicable exceptions noted thereon.
If, in the course of such review, the Trustee is notified by the Custodian
that any document constituting a part of a Contract Document which does not meet
the requirements of Section 2.01, the Trustee shall cause the Custodian to list
such as an exception in the Final Certification; provided, however, that neither
the Trustee nor the Custodian shall make any determination as to whether (i) any
endorsement is sufficient to transfer all right, title and interest of the party
so endorsing, as noteholder or assignee thereof, in and to that Mortgage Note or
(ii) any assignment is in recordable form or is sufficient to effect the
assignment of and transfer to the assignee thereof under the mortgage to which
the assignment relates.
The Seller shall promptly correct or cure such defect within 90 days from
the date it is so notified of such defect and, if the Seller does not correct or
cure such defect within such period, the Seller shall either (i) substitute for
the related Contract a Qualified Substitute Contract, which substitution shall
be accomplished in the manner and subject to the conditions set forth in Section
2.03, or (ii) purchase such Contract from the Trustee within 90 days from the
date the Seller was notified of such defect in writing at the Repurchase Price
of such Contract if such defect materially and adversely affects the value of
the related Contract or interests of the Certificateholders; provided, however,
that if the cure, substitution or repurchase of a Contract pursuant to this
provision is required by reason of a delay in delivery of any documents by the
appropriate recording office, then the Seller shall be given 720 days from the
Closing Date to cure such defect or substitute for, or repurchase such Contract;
and further provided, that the Seller shall have no liability for recording any
Assignment of Mortgage in favor of the Trustee or for the Servicer's failure to
record such Assignment of Mortgage, and the Seller shall not be obligated to
repurchase or cure any Contract as to which such Assignment of Mortgage is not
recorded. The Trustee shall deliver written notice to each Rating Agency within
270 days from the Closing Date indicating each Mortgage (a) which has not been
returned by the appropriate recording office or (b) as to which there is a
dispute as to location or status of such Mortgage. Such notice shall be
delivered every 90 days thereafter until the related Mortgage is returned to the
Custodian. Any such substitution effected more than 90 days after the Closing
Date shall not be effected prior to the delivery to the Trustee of the Opinion
of Counsel required by Section 2.05 hereof and any substitution shall not be
effected prior to the additional delivery to the or the Custodian, of a Request
for Release and the Contract Document for any such Qualified Substitute
Contract. The Repurchase Price for any such Contract shall be deposited by the
Seller in the applicable Collection Account on or prior to the Business Day
immediately preceding such Distribution Date in the month following the month of
repurchase and, upon receipt of such deposit and certification with respect
thereto in the form of EXHIBIT L hereto, the Custodian, shall release the
related Contract Document to the Seller and shall execute and deliver at such
entity's request such instruments of transfer or assignment prepared by such
entity, in each case without recourse, representation and warranty or as shall
be necessary to vest in such entity, or a designee, the Trustee's interest in
any Contract released pursuant hereto.
(b) It is understood and agreed that the obligation of the Seller to cure,
substitute for or to repurchase any Contract which does not meet the
requirements of Section 2.01 shall constitute the sole remedy respecting such
defect available to the Trustee, the Depositor and any Certificateholder against
the Seller.
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(c) All of the Contract Documents are being held pursuant to the Custodial
Agreement. Notwithstanding anything to the contrary contained herein, the
parties hereto acknowledge that the functions of the Trustee with respect to the
custody, acceptance, inspection and release of the Contract Documents pursuant
to Sections 2.01, 2.02, 2.05, 3.09 and 3.10 shall be performed by the Custodian.
At the expense of the Servicer, the Trustee, from time to time, shall instruct
or cause the instruction of the Custodian to deliver the Contract Documents to
the Servicer for completion and recordation of the Assignments of Mortgage.
SECTION 2.03 REPRESENTATIONS AND WARRANTIES OF THE SELLER, THE DEPOSITOR,
THE SERVICER AND THE SPECIAL SERVICER.
(a) The Seller represents and warrants to the Depositor, the Servicer, the
Special Servicer and the Trustee that as of the Closing Date:
(i) ORGANIZATION AND GOOD STANDING; LICENSING. The Seller is a company duly
organized, validly existing and in good standing under the laws of the
jurisdiction of its formation and has all licenses necessary to carry out its
business as now being conducted, and is licensed and qualified to transact
business in and is in good standing under the laws of its state of jurisdiction;
(ii) POWER, AUTHORITY AND BINDING OBLIGATIONS. The Seller has the power and
authority to make, execute, deliver and perform this Agreement and all of the
transactions contemplated under the Agreement, and has taken all necessary
action to authorize the execution, delivery and performance of this Agreement.
When executed and delivered, this Agreement will constitute the legal, valid and
binding obligation of the Seller enforceable in accordance with its terms,
except as enforcement of such terms may be limited by bankruptcy, insolvency or
similar laws affecting the enforcement of creditors' rights generally and by the
availability of equitable remedies;
(iii) NO CONFLICTS. Neither the execution and delivery of this Agreement,
nor the consummation OF the transactions herein contemplated hereby, nor
compliance with the provisions hereof, will conflict with or result in a breach
of, or constitute a default under, any of the provisions of any law,
governmental rule, regulation, judgment, decree or order binding on the Servicer
or its properties or the certificate of incorporation or by-laws of the Seller,
except those conflicts, breaches or defaults which would not reasonably be
expected to have a material adverse effect on the Seller's ability to enter into
this Agreement and to consummate the transactions contemplated hereby;
(iv) NO CONSENT. The execution, delivery and performance by the Seller of
this Agreement and the consummation of the transactions contemplated hereby do
not require the consent or approval of, the giving of notice to, the
registration with, or the taking of any other action in respect of, any state,
federal or other governmental authority or agency, except those consents,
approvals, notices, registrations or other actions as have already been
obtained, given or made and conveyance of the related Contracts by the Seller
are not subject to bulk transfer or any similar statutory provisions in effect
in any applicable jurisdiction;
(v) ENFORCEABILITY. This Agreement has been duly executed and delivered by
the Seller and, assuming due authorization, execution and delivery by the
47
Trustee, the Servicer, the Special Servicer and the Depositor, constitutes a
valid and binding obligation of the Seller enforceable against it in accordance
with its terms (subject to applicable bankruptcy and insolvency laws and other
similar laws affecting the enforcement of the rights of creditors generally);
(vi) NO LITIGATION. There are no actions, litigation, suits or proceedings
pending or threatened against the Seller before or by any court, administrative
agency, arbitrator or governmental body (i) with respect to any of the
transactions contemplated by this Agreement, (ii) on the sale of the Contracts,
or (iii) with respect to any other matter which in the judgment of the Seller if
determined adversely to the Seller would reasonably be expected to materially
and adversely affect such Seller's ability to perform its obligations under this
Agreement; and the Seller is not in default with respect to any order of any
court, administrative agency, arbitrator or governmental body so as to
materially and adversely affect the transactions contemplated by this Agreement;
(vii) DELIVERY OF CONTRACTS. Each Contract, each Assignment of Contract or
Assignment of Mortgage, as applicable, and any other documents required pursuant
to this Agreement to be delivered to the Depositor or its designee, or its
assignee for each Contract will be, on or before the Closing Date, delivered by
the Seller to the Depositor or its designee, or its assignee, except as
permitted by Section 2.01;
(viii) SOLVENT. The Seller does not believe, nor does it have any cause or
reason to believe, that it cannot perform each and every covenant contained in
this Agreement. The Seller is solvent and the sale of the Contracts by it will
not cause the Seller to become insolvent. The sale of the Contracts by the
Seller is not undertaken with the intent to hinder, delay or defraud any of the
Seller's creditors; and
(b) The Servicer represents and warrants to the Depositor, the Seller, the
Special Servicer and the Trustee that as of the Closing Date:
(i) ORGANIZATION AND GOOD STANDING; LICENSING: The Servicer is a company
duly organized, validly existing and in good standing under the laws of the
jurisdiction of its formation and has all licenses necessary to carry out its
business as now being conducted, and is licensed and qualified to transact
business in and is in good standing under the laws of each state in which any
Contract or Collateral serviced by it is located or is otherwise exempt under
applicable law from such licensing or qualification or is otherwise not required
under applicable law to effect such licensing or qualification and no demand for
such licensing or qualification has been made upon the Servicer by any such
state, and in any event the Servicer is in compliance with the laws of any such
state to the extent necessary to ensure the enforceability of the servicing of
the Contracts in accordance with the terms of this Agreement;
(ii) POWER AND AUTHORITY: The Servicer has the power and authority to make,
execute, deliver and perform this Agreement and all of the transactions
contemplated under the Agreement, and has taken all necessary action to
authorize the execution, delivery and performance of this Agreement. When
executed and delivered, this Agreement will constitute the legal, valid and
binding obligation of the Servicer enforceable in accordance with its
terms, except as enforcement of such terms may be limited by bankruptcy,
48
insolvency or similar laws affecting the enforcement of creditors' rights
generally and by the availability of equitable remedies;
(iii) NO CONFLICTS. Neither the execution and delivery of this Agreement,
nor the consummation of the transactions herein contemplated hereby, nor
compliance with the provisions hereof, will conflict with or result in a breach
of, or constitute a default under, any of the provisions of any law,
governmental rule, regulation, judgment, decree or order binding on the Servicer
or its properties or the certificate of incorporation or by-laws of the
Servicer, except those conflicts, breaches or defaults which would not
reasonably be expected to have a material adverse effect on the Servicer's
ability to enter into this Agreement and to consummate the transactions
contemplated hereby;
(iv) NO CONSENTS. The execution, delivery and performance by the Servicer
of this Agreement and the consummation of the transactions contemplated hereby
do not require the consent or approval of, the giving of notice to, the
registration with, or the taking of any other action in respect of, any state,
federal or other governmental authority or agency, except those consents,
approvals, notices, registrations or other actions as have already been
obtained, given or made or those consents, approvals, notices, registrations or
other actions which would not reasonably be expected to have a material adverse
effect on the Servicer's ability to enter into this Agreement and to consummate
the transactions contemplated hereby;
(v) NO LITIGATION. There are no actions, litigation, suits or proceedings
pending or threatened against the Servicer before or by any court,
administrative agency, arbitrator or governmental body (i) with respect to any
of the transactions contemplated by this Agreement, (ii) on the sale of the
Contracts, or (iii) with respect to any other matter which in the judgment of
the Servicer if determined adversely to the Servicer would reasonably be
expected to materially and adversely affect the Servicer's ability to perform
its obligations under this Agreement; and the Servicer is not in default with
respect to any order of any court, administrative agency, arbitrator or
governmental body so as to materially and adversely affect the transactions
contemplated by this Agreement;
(vi) COLLECTION AND SERVICING Practices. The collection and servicing
practices used by the Servicer with respect to each Contract have been legal and
in accordance with applicable laws and regulations and the terms of the
Contracts, and in all material respects proper and prudent in the manufactured
housing origination and servicing business;
(vii) ABILITY TO PERFORM. The Servicer does not believe, nor does it have
any cause or reason to believe, that it cannot perform each and every covenant
contained in this Agreement;
(viii) NO MISSTATEMENTS. No statement, tape, diskette, form, report or
other document prepared by, or on behalf of, the Servicer pursuant to this
Agreement or in connection with the transactions contemplated hereby, contains
or will contain any statement that is or will be inaccurate or misleading in any
material respect; and
49
(ix) REASONABLE COMPENSATION. The Servicer acknowledges and agrees that the
Servicing Fee represents reasonable compensation for performing such services
and that the entire Servicing Fee shall be treated by the Servicer, for
accounting and tax purposes, as compensation for the servicing and
administration of the Contracts pursuant to this Agreement.
(c) The Special Servicer represents and warrants to the Depositor, the
Servicer, the Seller and the Trustee that as of the Closing Date:
(i) ORGANIZATION AND GOOD STANDING; LICENSING. The Special Servicer is a
limited partnership, duly organized, validly existing and in good
standing under the laws of the jurisdiction of its formation and has all
licenses necessary to carry out its business as now being conducted, and
is licensed and qualified to transact business in and is in good
standing under the laws of each state in which any Contract serviced by
it is located or is otherwise exempt under applicable law from such
licensing or qualification or is otherwise not required under applicable
law to effect such licensing or qualification and no demand for such
licensing or qualification has been made upon the Special Servicer by
any such state, and in any event the Special Servicer is in compliance
with the laws of any such state to the extent necessary to ensure the
enforceability of the servicing of the Contracts in accordance with the
terms of this Agreement;
(ii) POWER, AUTHORITY AND BINDING OBLIGATIONS. The Special Servicer has the
power and authority to make, execute, deliver and perform this Agreement
and all of the transactions contemplated under the Agreement, and has taken
all necessary action to authorize the execution, delivery and performance
of this Agreement. When executed and delivered, this Agreement will
constitute the legal, valid and binding obligation of the Special Servicer
enforceable in accordance with its terms, except as enforcement of such
terms may be limited by bankruptcy, insolvency or similar laws affecting
the enforcement of creditors' rights generally and by the availability of
equitable remedies;
(iii) NO CONFLICTS. Neither the execution and delivery of this Agreement,
nor the consummation of the transactions herein contemplated hereby, nor
compliance with the provisions hereof, will conflict with or result in a
breach of, or constitute a default under, any of the provisions of any law,
governmental rule, regulation, judgment, decree or order binding on the
Special Servicer or its properties or the certificate of limited
partnership or agreement of limited partnership of the Special Servicer,
except those conflicts, breaches or defaults which would not reasonably be
expected to have a material adverse effect on the Special Servicer's
ability to enter into this Agreement and to consummate the transactions
contemplated hereby
(iv) NO CONSENTS. The execution, delivery and performance by the Special
Servicer of this Agreement and the consummation of the transactions
contemplated hereby do not require the consent or approval of, the giving
of notice to, the registration with, or the taking of any other action in
respect of, any state, federal or other governmental authority or agency,
except those consents, approvals, notices, registrations or other actions
as have already been obtained, given or made;
(v) NO LITIGATION. There are no actions, litigation, suits or proceedings
pending or threatened against the Special Servicer before or by any court,
administrative agency, arbitrator or governmental body (i) with respect to
any of the transactions contemplated by this Agreement or (ii) or (ii) with
respect to any other matter which in the judgment of the Special Servicer
if determined adversely to the Seller would reasonably be expected to
50
materially and adversely affect the Special Servicer's ability to perform
its obligations under this Agreement; and the Special Servicer is not in
default with respect to any order of any court, administrative agency,
arbitrator or governmental body so as to materially and adversely affect
the transactions contemplated by this Agreement; and
(vi) ABILITY TO PERFORM. The Special Servicer does not believe, nor does it
have any cause or reason to believe, that it cannot perform each and every
covenant contained in this Agreement.
(d) The Seller represents and warrants to the Depositor, the Servicer, the
Special Servicer and the Trustee that as of the Closing Date (or such other
date as specified herein):
(i) SOLE OWNER. The Seller or its affiliate is the sole owner of record and
holder of the Contract and the indebtedness evidenced by the Contract.
Immediately prior to the transfer and assignment to the Depositor on the
Closing Date, the Contract was not subject to an assignment or pledge, and
the Seller had good and marketable title to and was the sole owner thereof
and had full right to transfer and sell the Contract to the Depositor free
and clear of any encumbrance, equity, lien, pledge, charge, claim or
security interest and has the full right and authority subject to no
interest or participation of, or agreement with, any other party, to sell
and assign the Contract and following the sale of the Contract, the
Depositor will own such Contract free and clear of any encumbrance, equity,
participation interest, lien, pledge, charge, claim or security interest;
(ii) COMPLIANCE WITH LAWS. Any and all requirements of any federal, state or
local law including, without limitation, usury, truth-in-lending, real
estate settlement procedures, consumer credit protection, equal credit
opportunity or disclosure laws applicable to the Contract have been
complied with in all material respects;
(iii) NO WAIVERS. The terms of the Contract have not been impaired, waived,
altered or modified in any respect, except by written instruments which
have been recorded to the extent any such recordation is required by law,
or, necessary to protect the interest of the Depositor. No instrument of
waiver, alteration or modification has been executed, and no Obligor has
been released, in whole or in part, from the terms thereof except in
connection with an assumption agreement and which assumption agreement is
part of the Contract Documents and the terms of which are reflected in the
Contract Schedule; the substance of any such waiver, alteration or
modification has been approved by the issuer of any related Primary
Insurance Policy and title insurance policy, to the extent required by the
related policies;
(iv) UNDERWRITING STANDARDS. The Contract complies with all the terms,
conditions and requirements of the related Originator's underwriting standards
in effect at the time of origination of such Contract;
(v) CONTRACT SCHEDULE. The information set forth in the Contract Schedule
is complete, true and correct in all material respects as of the Cut-off
Date;
(vi) VALID SECURITY INTEREST. Each Contract, other than any Land Home
Contract, creates a valid, subsisting and enforceable (except as may be
limited by laws affecting creditors' rights generally) first-priority
51
security interest in favor of the Seller as secured lender, or agent
thereof, in the Manufactured Home covered thereby; such security interest
has been assigned by the Seller to the Depositor in accordance with the
terms of the Purchase and Sale Agreement. Each Mortgage is a valid first
lien in favor of the Originator on the real property securing the amount
owed by the Obligor under the related Land Home Contract subject only to
(a) the lien of current real property taxes and assessments, (b) covenants,
conditions and restrictions, rights of way, easements and other matters of
public record as of the date of recording of such Mortgage, such exceptions
appearing of record being acceptable to mortgage lending institutions
generally in the area wherein the property subject to the Mortgage is
located or specifically reflected in the appraisal obtained in connection
with the origination of the related Land Home Contract 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 such Mortgage. The Seller has assigned all of its right, title
and interest in such Land Home Contract and related Mortgage, including the
security interest in the Manufactured Home covered thereby, to the
Depositor. The Depositor has a valid and perfected and enforceable (except
as may be limited by laws affecting creditors' rights generally and by
general principles of equity) first priority security interest in such Land
Home Contract;
(vii) MECHANICS' LIENS. There are no mechanics' or similar liens or claims
which have been filed for work, labor or material (and no rights are
outstanding that under law could give rise to such liens) affecting the
related Collateral which are or may be liens prior to or equal to the lien
of the related Contract;
(viii) UNPAID TAXES. All taxes, governmental assessments, insurance
premiums, water, sewer and municipal charges, leasehold payments or ground
rents which previously became due and owing have been paid, or escrow funds
have been established in an amount sufficient to pay for every such
escrowed item which remains unpaid and which has been assessed but is not
yet due and payable;
(ix) NO DEFENSES. The Contract is not subject to any right of rescission,
set-off, counterclaim or defense, including, without limitation, the
defense of usury, nor will the operation of any of the terms of the
Contract, or the exercise of any right thereunder, render the Contract
unenforceable, in whole or in part, or subject to any right of rescission,
set-off, counterclaim or defense, including the defense of usury, and no
such right of rescission, set-off, counterclaim or defense has been
asserted with respect thereto;
(x) NO DAMAGE. The Mortgaged Property is not subject to any material damage
by waste, fire, earthquake, windstorm, flood or other casualty. At
origination of the Mortgage Loan there was, and there currently is, no
proceeding pending for the total or partial condemnation of the Mortgaged
Property;
(xi) IMPROVEMENTS. All improvements subject to any Mortgage which were
considered in determining the appraised value of the Mortgaged Property lie
wholly within the boundaries and building restriction lines of the
Mortgaged Property (and wholly within the project with respect to a
condominium unit) and no improvements on adjoining properties encroach upon
the related Mortgaged Property except those which are insured against by a
title insurance policy and all improvements on the property comply with all
applicable zoning and subdivision laws and ordinances;
52
(xii) RECORDATION. With respect to each Land Home Contract, the Seller has
delivered or caused to be delivered to the Trustee or the Custodian on
behalf of the Trustee the original Mortgage bearing evidence that such
instruments have been recorded in the appropriate jurisdiction where the
Mortgaged Property is located as determined by the Seller (or, in lieu of
the original of the Mortgage or the assignment thereof, a duplicate or
conformed copy of the Mortgage or the instrument of assignment, if any,
together with a certificate of receipt from the Seller or the settlement
agent who handled the closing of the Mortgage Loan, certifying that such
copy or copies represent true and correct copy(ies) of the originals) and
that such original(s) have been or are currently submitted to be recorded
in the appropriate governmental recording office of the jurisdiction where
the Mortgaged Property is located) or a certification or receipt of the
recording authority evidencing the same;
(xiii) INSURANCE. All buildings or other customarily insured improvements
upon the Contract are insured by company authorized to do business where
the Manufactured Home is located. All such standard hazard policies are in
full force and effect and on the date of origination contained a standard
mortgagee clause naming the Seller and its successors in interest and
assigns as loss payee and such clause is still in effect and all premiums
due thereon have been paid. The Contract obligates the Obligor thereunder
to maintain all such insurance at the Obligor's cost and expense;
(xiv) FEE SIMPLE. With respect to a Land Home Contract, the Mortgage creates
a first lien or a first priority ownership interest in an estate in fee
simple in real property securing the related Mortgage Note;
(xv) DELINQUENCIES. As of the Cut-off Date, (a) no more than 0.18% of the
Contracts are more than 30 days delinquent; (b) no more than 0.16% of the
Contracts are more than 60 days delinquent; and (c) none of the Contracts
are 90 days or more delinquent;
(xvi) ORIGINAL. The Contract is original and genuine and is the legal, valid
and binding obligation of the maker thereof, enforceable in all respects in
accordance with its terms subject to bankruptcy, insolvency, moratorium,
reorganization and other laws of general application affecting the rights
of creditors and by general equitable principles;
(xvii) LOAN TO VALUE RATIO. At origination, each Contract had an LTV
equal to or less than 100%. The Contracts are not insured by a primary
mortgage insurance policy;
(xviii) QUALIFIED MORTGAGE FOR REMIC. Each Contract constitutes a
"qualified mortgage" under Section 860G(a)(3)(A) of the Code and Treasury
Regulations Section 1.860G-2(a)(1). The fair market value of the
Manufactured Home securing each Contract was at least 80% of the adjusted
issue price of the Contract at (i) the time the Contract was originated
(determined pursuant to the REMIC Provisions) or (ii) the time the
Contracts is transferred to the Depositor. Each Contract is secured by a
"single family residence" within the meaning of Section 25(e)(10) of the
Code; and
(xix) SECONDARY MORTGAGE MARKET ENHANCEMENT ACT. Each Contract was originated
by a mortgagee approved by the Secretary of Housing and Urban Development
pursuant to sections 203 and 211 of the National Housing Act, a savings and
loan association, a savings bank, a commercial bank, credit union,
53
insurance company or similar institution which is supervised and examined
by a federal or state authority. The related Manufactured Home is a
"manufactured home" within the meaning of ▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ Code,
Section 5402(6), and at the origination of each Contract, the Originator
was approved for insurance by the Secretary of Housing and Urban
Development pursuant to Section 2 of the National Housing Act.
(e) Upon discovery by any of the parties hereto of a breach of a
representation or warranty made pursuant to Section 2.03(b) that materially
and adversely affects the interests of the Certificateholders in any
Contract, the party discovering such breach shall give prompt notice thereof
to the other parties. The Seller hereby covenants that within 90 days of the
earlier of its discovery or its receipt of written notice from any party of a
breach of any representation or warranty made by it pursuant to
Section 2.03(b) which materially and adversely affects the value of the
related Contract or the interests of the Certificateholders, they shall cure
such breach in all material respects, and if such breach is not so cured,
shall, (i) if such 90-day period expires prior to the second anniversary of
the Closing Date, remove such Contract (a "Deleted Contract") from the Trust
Fund and substitute in its place a Qualified Substitute Contract, in the
manner and subject to the conditions set forth in this Section; or (ii)
repurchase the affected Contract or Contracts from the Trustee at the
Repurchase Price in the manner set forth below; provided, however, that any
such substitution pursuant to (i) above shall not be effected prior to the
delivery to the Trustee of the Opinion of Counsel required by Section 2.05
hereof, if any, and any such substitution pursuant to (i) above shall not be
effected prior to the additional delivery to the Custodian (with a copy to
the Trustee) of a Request for Release and the Contract Document for any such
Qualified Substitute Contract. The Seller shall promptly reimburse the
Trustee for any actual out-of-pocket expenses reasonably incurred by the
Trustee in respect of enforcing the remedies for such breach. With respect to
any representation and warranty described in this Section which are made to
the best of the Seller's knowledge, if it is discovered by either the
Depositor, the Seller or the Trustee that the substance of such
representation and warranty is inaccurate and such inaccuracy materially and
adversely affects the value of the related Contract or the interests of the
Certificateholders therein, notwithstanding the Seller's lack of knowledge
with respect to the substance of such representation or warranty, such
inaccuracy shall be deemed a breach of the applicable representation or
warranty.
With respect to any Qualified Substitute Contract, the Seller shall
deliver to the Custodian for the benefit of the Certificateholders the
documents and agreements as are required by Section 2.01(b), with the
Mortgage Note endorsed and the Mortgage assigned as required by Section 2.01.
Scheduled Payments due with respect to Qualified Substitute Contracts in the
month of substitution shall not be part of the Trust Fund and will be
retained by the Seller. For the month of substitution, distributions to
Certificateholders will include the monthly payment due on any Deleted
Contract for such month and thereafter the Seller shall be entitled to retain
all amounts received in respect of such Deleted Contract. The Seller shall
amend the related Contract Schedule for the benefit of the Certificateholders
to reflect the removal of such Deleted Contract and the substitution of the
Qualified Substitute Contract or Loans and the Seller shall deliver the
amended Contract Schedule to the Trustee, Custodian and the Depositor. Upon
such substitution, the Qualified Substitute Contract or Loans shall be
subject to the terms of this Agreement in all respects, and the Seller shall
be deemed to have made with respect to such Qualified Substitute Contract or
Loans, as of the date of substitution, the representations and warranties
made pursuant to Section 2.03(b) with respect to such Contract. Upon any such
substitution and the deposit to the applicable Collection Account of the
amount required to be deposited therein in connection with such substitution
as described in the following paragraph, the Trustee shall or shall cause the
Custodian to release the Contract Document held for the benefit of the
54
Certificateholders relating to such Deleted Contract to the Seller and shall
execute and deliver at the Seller's direction such instruments of transfer or
assignment prepared by the Seller, in each case without recourse,
representation or warranty as shall be necessary to vest title in the Seller,
or its designee, the Trustee's interest in any Deleted Contract substituted
for pursuant to this Section 2.03.
For any month in which the Seller substitutes one or more Qualified
Substitute Contracts for one or more Deleted Contracts, the Servicer will
determine the amount (if any) by which the aggregate principal balance of all
such Qualified Substitute Contracts as of the date of substitution is less
than the aggregate Stated Principal Balance of all such Deleted Contracts
(after application of the scheduled principal portion of the monthly payments
due in the month of substitution). The amount of such shortage (the
"Substitution Adjustment Amount") plus an amount equal to the aggregate of any
unreimbursed Advances with respect to such Deleted Contracts shall be
deposited in the applicable Collection Account by the Seller on or before the
Business Day immediately preceding the related Servicer Remittance Date in
the month succeeding the calendar month during which the related Contract
became required to be purchased or replaced hereunder.
In the event that the Seller shall have repurchased a Contract, the
Repurchase Price therefor shall be deposited in the related Collection
Account pursuant to Section 3.06 on or before the Business Day immediately
preceding the related Servicer Remittance Date in the month following the
month during which the Seller became obligated hereunder to repurchase or
replace such Contract and upon such deposit of the Repurchase Price and
receipt of a Request for Release, the Trustee shall release or cause the
Custodian to release the related Contract Document held for the benefit of
the Certificateholders to such Person, and the Trustee shall execute and
deliver at such Person's direction such instruments of transfer or assignment
prepared by such Person, in each case without recourse, representation or
warranty as shall be necessary to transfer title from the Trustee. It is
understood and agreed that the obligation under this Agreement of any Person
to cure, repurchase or substitute any Contract as to which a breach has
occurred and is continuing shall constitute the sole remedy against such
Persons respecting such breach available to Certificateholders, the Depositor
or the Trustee on their behalf.
The representations and warranties made pursuant to this Section 2.03
shall survive delivery of the respective Contract Documents to the Trustee,
or to the Custodian on the Trustee's behalf, for the benefit of the
Certificateholders.
SECTION 2.04 REPRESENTATIONS AND WARRANTIES OF THE DEPOSITOR AS TO THE
CONTRACTS.
The Depositor hereby represents and warrants to the Trustee with respect
to each Contract that, as of the Closing Date, assuming good title has been
conveyed to the Depositor, the Depositor had good title to the Contracts and
Mortgage Notes, and did not encumber the Contracts during its period of
ownership thereof, other than as contemplated by the Agreement.
It is understood and agreed that the representations and warranties set
forth in this Section 2.04 shall survive delivery of the Contract Documents
to the Trustee, or to the Custodian on the Trustee's behalf.
55
SECTION 2.05 DELIVERY OF OPINION OF COUNSEL IN CONNECTION WITH
SUBSTITUTIONS.
(a) Notwithstanding any contrary provision of this Agreement, no
substitution pursuant to Section 2.02 shall be made more than 90 days after
the Closing Date unless the Seller delivers to the Trustee an Opinion of
Counsel, which Opinion of Counsel shall not be at the expense of either the
Trustee or the Trust Fund, addressed to the Trustee, to the effect that such
substitution will not (i) result in the imposition of the tax on "prohibited
transactions" on the Trust Fund or contributions after the Startup Date, as
defined in Sections 860F(a)(2) and 860G(d) of the Code, respectively, or (ii)
cause any REMIC hereunder to fail to qualify as a REMIC at any time that any
Certificates are outstanding.
(b) Upon discovery by the Depositor, the Seller, the Servicer, or the
Trustee that any Contract does not constitute a "qualified mortgage" within
the meaning of Section 860G(a)(3) of the Code, the party discovering such
fact shall promptly (and in any event within five (5) Business Days of
discovery) give written notice thereof to the other parties. In connection
therewith, the Trustee shall require the Seller, at the Seller's option, to
either (i) substitute, if the conditions in Section 2.03(c) with respect to
substitutions are satisfied, a Qualified Substitute Contract for the affected
Contract, or (ii) repurchase the affected Contract within 90 days of such
discovery in the same manner as it would a Contract for a breach of
representation or warranty made pursuant to Section 2.03. The Trustee shall
reconvey to the Seller the Contract to be released pursuant hereto in the
same manner, and on the same terms and conditions, as it would a Contract
repurchased for breach of a representation or warranty contained in
Section 2.03.
SECTION 2.06 EXECUTION AND DELIVERY OF CERTIFICATES.
The Trustee acknowledges receipt by the Custodian on its behalf of the
documents identified in the Initial Certification and, concurrently with such
receipt, has executed and delivered to or upon the order of the Depositor,
the Certificates in authorized denominations evidencing directly or
indirectly the entire ownership of the Trust Fund. The Trustee agrees to hold
the Trust Fund and exercise the rights referred to above for the benefit of
all present and future Holders of the Certificates and to perform the duties
set forth in this Agreement according to its terms.
SECTION 2.07 COVENANTS OF THE SERVICER AND SPECIAL SERVICER.
The Servicer and Special Servicer each hereby covenants to the Depositor
and the Trustee for itself only as follows:
(a) It shall comply in the performance of its obligations under this
Agreement in all material respects; and
(b) no written information, certificate of an officer, statement furnished
in writing or written report delivered to the Depositor, any affiliate of the
Depositor or the Trustee and prepared by it pursuant to this Agreement will
contain any untrue statement of a material fact.
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ARTICLE III
ADMINISTRATION AND SERVICING
OF MORTGAGE LOANS
SECTION 3.01 SERVICER TO SERVICE CONTRACTS.
For and on behalf of the Certificateholders, the Servicer shall service
and administer the related Contracts in accordance with the terms of this
Agreement and with Accepted Servicing Practices. Subject to Section 3.02,
without limiting the generality of the foregoing, the Servicer hereby is
authorized and empowered, when the Servicer believes it appropriate in its
best judgment, to execute and deliver, on behalf of the Certificateholders
and the Trust Fund or any of them, any and all instruments of satisfaction or
cancellation, or of partial or full release or discharge and all other
comparable instruments, with respect to the Contracts. The Trustee shall
furnish the Servicer with any powers of attorney and other documents
necessary or appropriate to enable the Servicer to service and administer the
Contracts and shall be indemnified by the Servicer for any and all liability,
cost and expense incurred by the Trustee in connection with the Servicer's
use or misuse of any power of attorney. The relationship of the Servicer
(and of any successor to the Servicer as Servicer under this Agreement) to
the Trustee under this Agreement is intended by the parties to be that of an
independent contractor and not that of a joint venturer, partner or agent of
the Trustee.
In servicing and administering the Contracts and Mortgage Loans, the
Servicer shall employ procedures including collection procedures and exercise
the same care that it customarily employs and exercises in servicing and
administering similar contracts for its other accounts giving due
consideration to Accepted Servicing Practices of prudent lending
institutions.
The Servicer shall forward to the Custodian original documents
evidencing an assumption, modification, consolidation or extension of any
Contract entered into in accordance with the terms of this Agreement within
two weeks of their execution, provided, however, that the Servicer shall
provide the Custodian with a certified true copy of any such document
submitted for recordation within two weeks of its execution, and shall
provide the original of any document certified by the appropriate public
recording office to be a true and complete copy of the original within ninety
(90) days of its submission for recordation.
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 payment of taxes and assessments on the Mortgaged
Properties, which advances shall be reimbursable in the first instance from
related collections from the Obligors pursuant to Section 3.06, and further
as provided in Section 3.07. The costs incurred by a Servicer, if any, in
effecting the timely payments of taxes and assessments on the Mortgaged
Properties and related insurance premiums shall not, for the purpose of
calculating monthly distributions to the Certificateholders, be added to the
Stated Principal Balances of the related Contracts, notwithstanding that the
terms of such Contracts so permit.
With respect to the Contracts, the Servicer of such Contracts agrees
that, with respect to the Obligors of such Contracts, the Servicer shall
accurately and fully report its borrower credit files to credit repositories
in a timely manner.
57
The Servicer hereby acknowledges that, to the extent the Servicer has
previously serviced some or all of the Contracts pursuant to another
servicing agreement, the provisions contained in this Agreement shall
supersede the provisions contained in such other servicing agreement.
SECTION 3.02 SUBSERVICING; ENFORCEMENT OF THE OBLIGATIONS OF SUBSERVICERS.
The Servicer shall be entitled to outsource one or more separate
servicing functions to a Person, so long as such outsourcing does not
constitute the delegation of the Servicer's obligation to perform all or
substantially all of the servicing of the related Contracts to such
outsourcer. In such event, the use by the Servicer of any such outsourcer
shall not release the Servicer from any of its obligations hereunder and the
Servicer shall remain responsible hereunder for all acts and omissions of
such outsourcer as fully as if such acts and omissions were those of the
Servicer, and the Servicer shall pay all fees and expenses of the outsourcer
from the Servicer's own funds.
SECTION 3.03 RECORDS; INSPECTION.
(a) The Servicer, during the period it is Servicer hereunder, shall maintain
such books of account and other records as will enable the Trustee (if the
Trustee so elects in its discretion) to determine the status of each
Contract. Without limiting the generality of the preceding sentence, the
Servicer shall keep such records in respect of Liquidation Expenses as will
enable the Trustee (if the Trustee so elects in its discretion) to determine
that the correct amount of Net Liquidation Proceeds in respect of a
Liquidation Contract has been deposited in the applicable Certificate Account.
(b) At all times during the term hereof, the Servicer shall afford the
Trustee and its authorized agents reasonable access during normal business
hours to the Servicer's records relating to the Contracts and will cause its
personnel to assist in any examination of such records by the Trustee or any
of its authorized agents. The examination referred to in this Section 3.03
will be conducted in a manner which does not interfere unreasonably with the
Servicer's normal operations or customer or employee relations. Without
otherwise limiting the scope of the examination which the Trustee may make,
the Trustee or its authorized agents, using generally accepted audit
procedures, may in their discretion verify the status of each Contract and
review the records relating thereto for conformity to Monthly Reports
prepared pursuant hereto and compliance with the standards represented to
exist as to each Contract in this Agreement.
(c) At all times during the term hereof, the Servicer shall keep available a
copy of the Contract Schedule for inspection by Certificateholders.
SECTION 3.04 ENFORCEMENT.
(a) The Servicer, consistent with Section 3.01, shall act with respect to
the Contracts in such manner as will maximize the receipt of principal and
interest on such Contracts.
(b) The Servicer shall ▇▇▇ to enforce, initiate a replevin action or
collect upon Contracts and, where permitted by applicable law, may, in its
sole judgment, ▇▇▇ to collect any Deficiency at its own expense, in its own
name, if possible, or as agent for the Trustee in its own name, if possible,
or as agent for the Trust Fund. If the Servicer elects to commence a legal
proceeding to enforce a Contract, the act of commencement shall be deemed to
be an automatic assignment of the Contract to the Servicer for purposes of
collection only. If, however, in any enforcement suit or legal proceeding it
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is held that the Servicer may not enforce a Contract on the ground that it is
not a real party in interest or a holder entitled to enforce the Contract,
the Trustee shall, at the Servicer's expense, take such steps as the Servicer
deems necessary to enforce the Contract, including bringing suit in its name
or the names of the Certificateholders. If there has been a recovery of
attorneys' fees in favor of the Servicer or the Trust Fund in an action
involving the enforcement of a Contract, the Servicer shall be reimbursed out
of such recovery for its out-of-pocket attorney's fees and expenses incurred
in such enforcement action.
(c) The Servicer shall exercise any rights of recourse against third persons
that exist with respect to any Contract in accordance with the Servicer's
usual practice. In exercising recourse rights, the Servicer is authorized on
the Trustee's behalf to reassign the Contract or to resell the related
Manufactured Home and, if applicable, the Mortgaged Property, to the Person
against whom recourse exists at the price set forth in the document creating
the recourse.
(d) The Servicer may, consistent with its customary servicing procedures and
consistent with Section 3.01, grant to the Obligor on any Contract an
extension of payments due under such Contract, provided that Obligors may not
be solicited for extensions, no such extension may extend beyond the final
scheduled payment date of the Contract with the latest maturity, no more than
one extension of payments under a Contract may be granted in any twelve-month
period and no extension shall be longer than three (3) months; provided,
however, that the Servicer may grant an extension of up to twelve months if
either (A) the Contract is in imminent default or (B) the Servicer delivers
an Opinion of Counsel to the effect that such extension will not affect the
status of any REMIC created hereunder as a REMIC, and in the case of (A) and
(B) above, such extension is reasonably likely to produce a greater recovery
with respect to such Contract than would liquidation. For these purposes, a
Contract is in imminent default if: (A) the Contract is 90 days or more past
due; (B) the Obligor has indicated in writing to the Servicer that such
Obligor is unable or will not continue to make Scheduled Payments pursuant to
the terms of the Contract (except in the case of bankruptcy where contact
with the Obligor is not permitted); and (C) the Servicer has attempted to
cure the delinquency without success.
SECTION 3.05 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, as defined in
Section 7.01), the Trustee or its successor shall thereupon assume all of the
rights and obligations of the Servicer hereunder arising thereafter (except
that the Trustee shall not be (i) liable for losses of the Servicer pursuant
to Section 3.08 hereof or any acts or omissions of the related predecessor
Servicer hereunder, (ii) obligated to make Advances if it is prohibited from
doing so by applicable law, (iii) obligated to effectuate repurchases or
substitutions of Contracts hereunder including, but not limited to,
repurchases or substitutions of Contracts pursuant to Section 2.02 or 2.03
hereof or (iv) deemed to have made any representations and warranties of the
Servicer hereunder). Any such assumption shall be subject to Section 7.02
hereof.
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 each Subservicing Agreement or substitute Subservicing Agreement
and the Contracts then being serviced thereunder and hereunder by the
Servicer and an accounting of amounts collected or held by it and otherwise
use its best efforts to effect the orderly and efficient transfer of the
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substitute Subservicing Agreement to the assuming party at the expense of the
outgoing Servicer.
SECTION 3.06 COLLECTION OF CONTRACTS; COLLECTION ACCOUNT; CERTIFICATE
ACCOUNT.
(a) Continuously from the date hereof until the principal and interest on
all Contracts have been paid in full or such Contracts have become
Liquidation Contracts, the Servicer shall proceed in accordance with the
customary and usual standards of practice of prudent mortgage loan servicers
to collect all payments due under each of the related Contracts when the same
shall become due and payable to the end that the installments payable by the
Obligors will be sufficient to pay charges related to the Contracts as and
when they become due and payable. Consistent with the foregoing, the Servicer
may in its discretion (i) waive any late payment charge and (ii) extend the
due dates for payments due on a Contract for a period not greater than that
permitted by Section 3.01(d); provided, however, that the Servicer cannot
extend the maturity of any such Contract past the date on which the final
payment is due on the latest maturing Contract as of the Cut-off Date. In the
event of any such arrangement, the Servicer shall make Advances on the
related Contract in accordance with the provisions of Section 4.01 during the
scheduled period in accordance with the amortization schedule of such
Contract without modification thereof by reason of such arrangements. The
Servicer shall not be required to institute or join in litigation with
respect to collection of any payment (whether under a Contract, Mortgage,
Mortgage Note or otherwise or against any public or governmental authority
with respect to a taking or condemnation) if it reasonably believes that
enforcing the provision of the Contract, Mortgage or other instrument
pursuant to which such payment is required is prohibited by applicable law.
(b) The Servicer shall segregate and hold all funds collected and received
pursuant to a Contract separate and apart from any of its own funds and
general assets and shall establish and maintain a Collection Accounts, titled
"Collection Account--JPMorgan Chase Bank, in trust for the Holders of CSFB
Manufactured Housing Pass-Through Certificates, Series 2002-MH3." The
Collection Account shall be an Eligible Account. Any funds deposited in a
Collection Account shall at all times be either invested in Eligible
Investments or shall be fully insured to the full extent permitted under
applicable law. Funds deposited in a Collection Account may be drawn on by
the Servicer in accordance with Section 3.07.
(c) The Servicer shall deposit in the Collection Account promptly as
practicable (not later than the second Business Day) after receipt of:
(i) all payments on account of principal on the related Contracts, including
all Principal Prepayments;
(ii) all payments on account of interest on the related Contracts (including the
seven days' interest conveyed to the Trustee by the Depositor pursuant to
Section 2.01(a)(iii)) adjusted to the per annum rate equal to the Contract
Rate reduced by the Servicing Fee Rate;
(iii) all Net Liquidation Proceeds on the related Contracts;
(iv) all Insurance Proceeds on the related Contracts including amounts required
to be deposited pursuant to Section 3.08 and all Condemnation Proceeds
unless used to directly offset the cost of repairing the related property;
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(v) all Advances made by the Servicer pursuant to Section 4.01;
(vi) all Repurchase Prices on the related Contracts;
(vii)with respect to each Principal Prepayment on the related Contracts, the
Prepayment Interest Shortfall, if any, for the related Due Period. The
aggregate of such deposits shall be made from the Servicer's own funds,
without reimbursement therefor, up to a maximum amount per month equal to
the Compensating Interest Payment, if any, for the Contracts serviced by
that the Servicer and Distribution Date, which amount shall not exceed the
Servicing Fee payable in respect of the related Due Period;
(viii) any amounts received in connection with the purchase of any Contract
pursuant to Section 2.02(b) and 2.02(c); and
(ix) any other amounts required to be deposited in the Collection Account
pursuant to this Agreement.
Subject to Section 3.07 hereof, the foregoing requirements respecting
deposits into the Collection Account are exclusive. Ancillary Income need
not be deposited by the Servicer into such Collection Account. In addition,
notwithstanding the provisions of this Section 3.06, the Servicer may deduct
from amounts received by it, prior to deposit to the applicable Collection
Account, any portion of any Scheduled Payment representing the Servicing Fee.
In the event that the Servicer shall remit any amount not required to be
remitted, it may at any time withdraw or direct the institution maintaining
the related Collection Account to withdraw such amount from such Collection
Account, any provision herein to the contrary notwithstanding. Such
withdrawal or direction may be accomplished by delivering written notice
thereof to the Trustee or such other institution maintaining such Collection
Account which describes the amounts deposited in error in such Collection
Account. The Trustee may conclusively rely on such notice and shall have no
liability in connection with the withdrawal of such funds at the direction of
a Servicer. The Servicer shall maintain adequate records with respect to all
withdrawals made by it pursuant to this Section. All funds deposited in a
Collection Account shall be held in trust for the Certificateholders until
withdrawn in accordance with Section 3.07(a).
(d) On or prior to the Closing Date, the Trustee shall establish and
maintain, on behalf of the Certificateholders, the Certificate Account. The
Trustee shall, promptly upon receipt, deposit in the Certificate Account and
retain therein the following:
(i) the aggregate amount remitted by the Servicer to the Trustee pursuant to
Section 3.07(a)(viii); and
(ii) any other amounts deposited hereunder which are required to be deposited
in the Certificate Account.
In the event that the Servicer shall remit to the Trustee any amount not
required to be remitted, it may at any time in writing direct the Trustee to
withdraw such amount from the Certificate Account, any provision herein to
the contrary notwithstanding. Such direction may be accomplished by
delivering written notice to the Trustee (upon which the Trustee may
conclusively rely) which describes the amounts deposited in error in the
Certificate Account. All funds deposited in the Certificate Account shall be
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held by the Trustee in trust for the Certificateholders until disbursed in
accordance with this Agreement or withdrawn in accordance with
Section 3.07(b). In no event shall the Trustee incur liability for withdrawals
from the Certificate Account at the direction of the Servicer.
(e) Each institution at which the Collection Account is maintained shall
either hold such funds on deposit uninvested or shall invest the funds
therein in Eligible Investments as directed in writing by the Servicer which
shall mature not later than the Servicer Remittance Date. All such Eligible
Investments shall be made in the name of the Trustee, for the benefit of the
Certificateholders. All income and gain net of any losses realized from any
such balances or investment of funds on deposit in the Collection Account
shall be for the benefit of the Servicer as servicing compensation and shall
be remitted to it monthly. The amount of any net investment losses in the
Collection Account shall promptly be deposited by the Servicer in such
Collection Account. The Trustee in its fiduciary capacity shall not be liable
for the amount of any loss incurred in respect of any investment or lack of
investment of funds held in the Collection Account made in accordance with
this Section 3.06. All funds on deposit in the Certificate Account shall
remain uninvested or may be invested in by the Trustee, in its sole
discretion in Eligible Investments selected by the Trustee and shall mature
not later than the next Distribution Date. All net income and gain realized
from the investment of, and all earnings on, funds deposited in the
Certificate Account shall be for the benefit of the Trustee and shall be
available to be withdrawn pursuant to Section 3.07(b)(i).
(f) The Servicer shall give notice to the Trustee, each Rating Agency and
the Depositor of any proposed change of the location of the related
Collection Account prior to any change thereof. The Trustee shall give notice
to the Servicer, each Rating Agency and the Depositor of any proposed change
of the location of the Certificate Account prior to any change thereof.
SECTION 3.07 PERMITTED WITHDRAWALS FROM THE COLLECTION ACCOUNTS AND
CERTIFICATE ACCOUNT.
(a) The Servicer may from time to time make withdrawals from the related
Collection Account for the following purposes:
(i) to pay to the Servicer (to the extent not previously retained by the
Servicer) the Servicing Fee and other servicing compensation to which it is
entitled pursuant to Section 3.15, and to pay to the Servicer, as
additional servicing compensation, earnings on or investment income with
respect to funds in or credited to such Collection Account;
(ii) to reimburse the Servicer for unreimbursed Advances made by it, such
right of reimbursement pursuant to this subclause (ii) being limited to
amounts received on the Contract(s) in respect of which any such Advance
was made (including without limitation, late recoveries of payments,
Liquidation Proceeds and Insurance Proceeds to the extent received by the
Servicer);
(iii) to reimburse the Servicer for any Nonrecoverable Advance previously made;
(iv) to reimburse the Servicer for (A) unreimbursed Servicing Advances, the
Servicer's right to reimbursement pursuant to this clause (iv) with respect
to any Contract being limited to amounts received on such Contract which
represent late payments of principal and/or interest (including, without
limitation, Liquidation Proceeds and Insurance Proceeds with respect to
such Contract) respecting which any such advance was made and (B) for
unpaid Servicing Fees as provided in Section 3.09 hereof;
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(v) to pay to the purchaser, with respect to each Contract or property
acquired in respect thereof that has been purchased pursuant to
Section 2.02 or 2.03, all amounts received thereon after the date of such
purchase;
(vi) to reimburse the Servicer or the Depositor for expenses incurred by any
of them and reimbursable pursuant to Section 3.08 or 6.03 hereof;
(vii) to withdraw any amount deposited in such Collection Account and not
required to be deposited therein;
(viii) on or prior to 4:00 p.m. New York time on the Servicer Remittance
Date preceding each Distribution Date, to withdraw an amount equal to the
sum of the portion of the Interest Remittance Amount and the Principal
Remittance Amount in such Collection Account applicable to the Contracts
serviced by the Servicer for such Distribution Date and remit such amount
to the Trustee for deposit in the Certificate Account; and
(ix) to clear and terminate such Collection Account upon termination of this
Agreement pursuant to Section 9.01 hereof.
The Servicer shall keep and maintain separate accounting, on a Contract
by Contract basis, for the purpose of justifying any withdrawal from the
Collection Account pursuant to such subclauses (i), (ii), (iv) and (v). Prior
to making any withdrawal from the Collection Account pursuant to subclause
(iii), the Servicer shall deliver to the Trustee a certificate of a Servicing
Officer indicating the amount of any previous Advance determined by the
Servicer to be a Nonrecoverable Advance and identifying the related
Contracts(s), and their respective portions of such Nonrecoverable Advance.
(b) The Trustee shall withdraw funds from the Certificate Account for
distributions to Certificateholders in the manner specified in this
Agreement. In addition, the Trustee may from time to time make withdrawals
from the Certificate Account for the following proposes:
(i) to pay to itself any investment income from balances in the Certificate
Account prior to distributions to Certificateholders and to pay itself
for any expenses for which the trustee is entitled to be reimbursed or
indemnified for;
(ii) to withdraw and return to the Servicer for deposit to the applicable
Collection Account or withdraw and return to the Depositor any amount
deposited in the Certificate Account and not required to be deposited
therein; and
(iii) to clear and terminate the Certificate Account upon termination of the
Agreement pursuant to Section 9.01 hereof.
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SECTION 3.08 MAINTENANCE OF HAZARD INSURANCE, COLLECTIONS UNDER HAZARD
INSURANCE POLICIES CONSENT TO TRANSFERS OF MANUFACTURED
HOMES, ASSUMPTION AGREEMENTS FIDELITY BOND AND ERRORS AND
OMISSIONS INSURANCE.
(a) Except as otherwise provided in subsection (b) of this Section 3.08, the
Servicer shall cause to be maintained with respect to each Contract having a
Stated Principal Balance equal to $2500 or greater one or more Hazard
Insurance Policies which provide, at a minimum, the same coverage as a
standard form fire and extended coverage insurance policy that is customary
for manufactured housing, issued by a company authorized to issue such
policies in the state in which the Manufactured Home is located, and in an
amount which is not less than the maximum insurable value of such
Manufactured Home or the principal balance of the related Contract, whichever
is less; PROVIDED that such Hazard Insurance Policies may provide for
customary deductible amounts, and FURTHER PROVIDED that the amount of
coverage provided by each Hazard Insurance Policy shall be sufficient to
avoid the application of any co-insurance clause contained therein. Each
Hazard Insurance Policy caused to be maintained by the Servicer shall contain
a standard loss payee clause in favor of the Servicer and its successors and
assigns. If any Obligor is in default in the payment of premiums on its
Hazard Insurance Policy or Policies, the Servicer shall advance such premiums
out of its own funds (but only to the extent that it deems, in its sole
judgment, that such advances are recoverable), and may add separately such
premium to the Obligor's obligation as provided by the Contract, but may not
add such premium to the remaining principal balance of the Contract for
purposes of this Agreement. If the Obligor does not reimburse the Servicer
for payment of such premiums and the related Contract is liquidated after a
default, the Servicer shall be reimbursed for its payment of such premiums
out of the related Liquidation Proceeds and, if such Liquidation Proceeds
original certificates are insufficient therefor, as a Nonrecoverable
Advance.
(b) The Servicer may, in lieu of causing individual Hazard Insurance
Policies to be maintained with respect to each Manufactured Home pursuant to
subsection (a) of this Section 3.08, and shall, to the extent that the
related Contract does not require the Obligor to maintain a Hazard Insurance
Policy with respect to the related Manufactured Home, maintain one or more
blanket insurance policies covering losses as provided in subsection (a) of
this Section 3.08 resulting from the absence or insufficiency of individual
Hazard Insurance Policies. Any such blanket policy shall be substantially in
the form that is the industry standard for blanket insurance policies issued
to cover Manufactured Homes and in the amount sufficient to cover all losses
on the Contracts. The Servicer shall pay, out of its own funds, the premium
for such policy on the basis described therein and shall deposit in the
applicable Certificate Account, on the Business Day next preceding the
Determination Date following the Due Period in which the insurance proceeds
from claims in respect of any Contracts under such blanket policy are or
should have been received, the deductible amount with respect to such
claims. The Servicer shall not, however, be required to deposit any
deductible amount with respect to claims under individual Hazard Insurance
Policies maintained pursuant to subsection (a) of this Section 3.08.
(c) If the Servicer shall have repossessed a Manufactured Home on behalf of
the Trustee, the Servicer shall not be required to maintain a Hazard
Insurance Policy with respect to such Manufactured Home.
(d) Any cost incurred by the Servicer in maintaining any of the foregoing
insurance, for the purpose of calculating monthly distributions to
Certificateholders, shall not be added to the amount owing under the
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Contract, notwithstanding that the terms of the Contract so permit. Except
as provided in the final sentence of this paragraph, the Servicer shall not
be entitled to reimbursement from the Seller, the Trustee or the
Certificateholders for such costs. Such costs (other than the cost of the
blanket policy) shall only be recovered out of later payments by the Obligor
for such premiums or, if the related Contract is liquidated after a default,
out of the related Liquidation Proceeds. If Liquidation Proceeds are
insufficient to reimburse the Servicer for any such premiums, the amount of
such insufficiency shall constitute, and be reimbursable to the Servicer as,
a Nonrecoverable Advance.
(e) In connection with its activities as Servicer of the Contracts, the
Servicer agrees to present, on behalf of itself, the Trustee and the
Certificateholders, claims to the insurer under any Hazard Insurance Policies
and, in this regard, to take such reasonable action as shall be necessary to
permit recovery under any Hazard Insurance Policies or any blanket policies
obtained pursuant to Section 3.08(b) (except that the Servicer shall not be
required to make any advances that the Servicer believes, in its sole
judgment, would become a nonrecoverable advance). Any amounts collected by
the Servicer under any such Hazard Insurance Policies shall be deposited in
the Collection Account pursuant to Section 3.07, except to the extent they
are applied to the restoration of the related Manufactured Home or released
to the related Obligor in accordance with the normal servicing procedures of
the Servicer.
(f) In connection with any transfer of ownership of a Manufactured Home and,
if applicable, the related Mortgaged Property, by an Obligor to a Person, the
Servicer shall consent to any such transfer and permit the assumption by such
Person of the Contract related to such Manufactured Home, provided that (i)
such Person, in the judgment of the Servicer, meets the Servicer's
underwriting standards then in effect, (ii) such Person enters into an
assumption agreement, (iii) the Servicer determines that permitting such
assumption by such Person will not materially increase the risk of nonpayment
of such Contract and (iv) such action will not adversely affect or jeopardize
any coverage under any insurance policy required by this Agreement. In the
event the Servicer determines that the conditions of the proviso of the
preceding sentence have not been fulfilled, then the Servicer shall withhold
its consent to any such transfer, but only to the extent permitted under the
Contract and applicable law and governmental regulations and only to the
extent that such action will not adversely affect or jeopardize any coverage
under any insurance policy required by this Agreement. In connection with
any such assumption, the rate of interest borne by, and all other material
terms of, the related Contract shall not be changed.
(g) In any case in which Collateral is to be conveyed to a Person by an
Obligor, and such Person is to enter into an assumption agreement or
modification agreement or supplement to the Contract in accordance with
Section 3.08(f) or Section 3.08(d), upon the closing of such conveyance, the
Servicer shall cause the originals of the assumption agreement, the release
(if any), or the modification or supplement to the Contract to be deposited
with the Contract Document or the Land Home Contract Document, as applicable,
for such Contract. Any fee collected by the Servicer for entering into an
assumption or substitution of liability agreement with respect to such
Contract will be retained by the Servicer as additional servicing
compensation.
(h) The Servicer shall maintain, at its own expense, a blanket fidelity bond
and an errors and omissions insurance policy, with broad coverage with
responsible companies, on all officers, employees or other persons acting in
any capacity with regard to the Contracts to handle funds, money, documents
and papers relating to the Contracts. Any such fidelity bond and errors and
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omissions insurance shall protect and insure the Servicer against losses,
including forgery, theft, embezzlement, fraud, errors and omissions and
negligent acts of such persons. No provision of this Section 3.08 requiring
such fidelity bond and errors and omissions insurance shall diminish or
relieve the Servicer from its duties and obligations as set forth in this
Agreement. The minimum coverage under any such bond and insurance policy
shall be in an amount as is customary for servicers that service a portfolio
of manufactured housing installment sales contracts of $100 million or more
and that are generally acceptable as servicers to institutional investors.
On or before April 1 of every year, the Servicer shall cause to be delivered
to the Trustee a certified true copy of such fidelity bond and insurance
coverage required hereby which fidelity bond or insurance shall in no event
be terminated or materially modified without 30 days' prior written notice to
the Trustee.
SECTION 3.09 REALIZATION UPON DEFAULTED CONTRACTS.
(a) Subject to applicable law, the Servicer shall repossess, foreclose upon
or otherwise comparably convert the ownership of Collateral securing all
Contracts that come into default and which the Servicer believes in its good
faith business judgment will not be brought current. Subject to Section 4.17,
the Servicer shall manage, conserve and protect such Collateral for the
purposes of their prompt disposition and sale, and shall dispose of such
Collateral on such terms and conditions as it deems in the best interests of
the Certificateholders. If the Servicer has actual knowledge that a
Mortgaged Property is affected by hazardous waste, then the Servicer shall
not cause the Trust Fund or the Trustee to acquire title to such Mortgaged
Property in a foreclosure or similar proceeding. For purposes of the
preceding sentence, the Servicer shall not be deemed to have actual knowledge
that Collateral is affected by hazardous waste unless it shall have received
written notice that hazardous waste is present on such property. In
connection with such repossession, foreclosure or other conversion, the
Servicer shall take such action as (i) shall be consistent with Section 3.01,
(ii) the Servicer shall determine consistently with Accepted Servicing
Practices to be in the best interest of the Trustee and Certificateholders,
and (iii) is consistent with the requirements of the insurer under any
Required Insurance Policy; provided, however, that the Servicer shall not be
required to expend its own funds in connection with any foreclosure or
towards the restoration of any property unless it shall determine (i) that
such restoration and/or foreclosure will increase the proceeds of liquidation
of the related Contract after reimbursement to itself of such expenses and
(ii) that such expenses will be recoverable to it through Liquidation
Proceeds (respecting which it shall have priority for purposes of withdrawals
from the related Collection Account). 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 Liquidation Proceeds with respect to the related Mortgaged Property or
otherwise pursuant to Section 3.07(a).
(b) The decision of a Servicer to foreclose on a defaulted Contract 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 Repossessed
Collateral, net of reimbursement to the Servicer for expenses incurred
(including any property or other taxes) in connection with such management
and net of applicable accrued and unpaid Servicing Fees, and unreimbursed
Advances and Servicing Advances, shall be applied to the payment of principal
of and interest on the related defaulted Contracts (with interest accruing as
though such Contracts were still current) and all such income shall be
deemed, for all purposes in this Agreement, to be payments on account of
principal and interest on the related Mortgage Notes and shall be deposited
into the related Collection Account. To the extent the net income received
during any Due Period is in excess of the amount attributable to amortizing
principal and accrued interest at the related Contract Rate on the related
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Contract for such Due Period, such excess shall be considered to be a partial
prepayment of principal of the related Contract.
(c) The proceeds from any liquidation of a Contract, as well as any income
from an Repossessed Collateral, will be applied in the following order of
priority: first, to reimburse the Servicer for any related unreimbursed
Servicing Advances, including insurance premiums; second, to reimburse the
Servicer for any unreimbursed Advances; third, to reimburse the related
Collection Account for any Nonrecoverable Advances (or portions thereof) that
were previously withdrawn by the Servicer pursuant to Section 3.07 that
related to such Contract; fourth, to accrued and unpaid interest (to the
extent no Advance has been made for such amount or any such Advance has been
reimbursed) on the Contract or related Repossessed Collateral, at the per
annum rate equal to the related Contract Rate reduced by the Servicing Fee
Rate to the Due Date occurring in the month in which such amounts are
required to be distributed; and fifth, as a recovery of principal of the
Contract.
SECTION 3.10 TRUSTEE TO COOPERATE; RELEASE OF CONTRACT DOCUMENTS.
(a) Upon payment in full of any Contract, the Servicer will notify the
Trustee on the next Distribution Date by a certificate of a Servicing Officer
(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 Certificate Account pursuant to Section 3.06 have been
deposited). The Servicer is authorized to execute an instrument in
satisfaction of such Contract and to do such other acts and execute such
other documents as the Servicer deems necessary to discharge the Obligor
thereunder and eliminate the security interest in the Manufactured Home. The
Servicer shall determine when a Contract has been paid in full. To the
extent insufficient payments are received on a Contract mistakenly determined
by the Servicer to be prepaid or paid in full and satisfied, the shortfall
shall be paid by the Servicer out of its own funds by deposit into the
Certificate Account.
(b) From time to time as appropriate for servicing and foreclosure in
connection with any Land Home Contract, the Trustee shall, upon written
request of a Servicing Officer and delivery to the Trustee of a receipt
signed by such Servicing Officer, cause the original Land Home Contract and
the related Land Home Contract Document to be released to the Servicer and
shall execute such documents as the Servicer shall deem necessary to the
prosecution of any such proceedings. The Trustee shall stamp the face of
each such Land Home Contract to be released to the Servicer with a notation
that the Land Home Contract has been assigned to the Trustee.
(c) The Servicer's receipt of a Land Home Contract and/or Land Home Contract
Document shall obligate the Servicer to return the original Land Home
Contract and the related Land Home Contract Document to the Trustee, or any
person acting on behalf of the Trustee, when its need by the Servicer has
ceased unless the Contract shall be paid in full, liquidated, repurchased or
replaced as described in Section 3.05.
(d) Upon request of a Servicing Officer, the Trustee shall, at the expense
of the Servicer, perform such acts as are reasonably requested by the
Servicer (including the execution of documents) and otherwise cooperate with
the Servicer in the enforcement of rights and remedies with respect to
Contracts.
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SECTION 3.11 DOCUMENTS, RECORDS AND FUNDS IN POSSESSION OF A SERVICER TO BE
HELD FOR THE TRUSTEE.
Notwithstanding any other provisions of this Agreement, the Servicer
shall transmit to the Custodian on behalf of the Trustee as required by this
Agreement all documents and instruments in respect of a Contract coming into
the possession of the Servicer from time to time required to be delivered to
the Trustee pursuant to the terms hereof and shall account fully to the
Trustee for any funds received by the Servicer or which otherwise are
collected by the Servicer as Liquidation Proceeds or Insurance Proceeds in
respect of any Contract. All Contract Documents and funds collected or held
by, or under the control of, the Servicer in respect of any Contracts,
whether from the collection of principal and interest payments or from
Liquidation Proceeds, including but not limited to, any funds on deposit in a
Collection Account, shall be held by the Servicer for and on behalf of the
Trustee and shall be and remain the sole and exclusive property of the
Trustee, subject to the applicable provisions of this Agreement. The Servicer
also agrees that it shall not create, incur or subject any Contract Document
or any funds that are deposited in the Collection Account or Certificate, 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 Contract
Document or any funds collected on, or in connection with, a Contract,
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.
SECTION 3.12 SERVICING FEE.
As compensation for its services hereunder, the Servicer shall be
entitled to withdraw from the applicable Collection Account in accordance
with Section 3.07(a) or to retain from interest payments on the related
Contracts the amount of the Servicing Fee for each Contract.
Additional servicing compensation in the form of Ancillary Income shall
be retained by the Servicer. The Servicer shall be required to pay all
expenses incurred by it in connection with its servicing activities hereunder
(including the payment of any expenses incurred in connection with any
Subservicing Agreement entered into pursuant to Section 3.02 and the payment
of any premiums for hazard insurance and maintenance of the other forms of
insurance coverage required by this Agreement) and shall not be entitled to
reimbursement thereof except as specifically provided for in this Agreement.
SECTION 3.13 ACCESS TO CERTAIN DOCUMENTATION.
The Servicer shall provide to the OTS and the FDIC and to comparable
regulatory authorities supervising Holders of Subordinate Certificates and
the examiners and supervisory agents of the OTS, the FDIC and such other
authorities, access to the documentation regarding the related Contracts
required by applicable regulations of the OTS and the FDIC. Such access shall
be afforded without charge, but only upon reasonable and prior written
request and during normal business hours at the offices designated by the
Servicer. Nothing in this Section shall limit the obligation of the Servicer
to observe any applicable law prohibiting disclosure of information regarding
the Obligors and the failure of the Servicer to provide access as provided in
this Section as a result of such obligation shall not constitute a breach of
this Section.
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SECTION 3.14 ANNUAL STATEMENT AS TO COMPLIANCE.
On or before April 1 of each calendar year, the Servicer shall deliver
to the Depositor, the Rating Agencies and the Trustee, commencing in 2003, an
Officer's Certificate stating, as to the signer thereof, that (i) a review of
the activities of the Servicer during the preceding calendar year and of the
performance of the Servicer under this Agreement has been made under such
officer's supervision, and (ii) to the best of such officer's knowledge,
based on such review, the Servicer has fulfilled all its obligations under
this Agreement 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 and the action being taken by
the Servicer to cure such default.
SECTION 3.15 ANNUAL INDEPENDENT PUBLIC ACCOUNTANTS' SERVICING STATEMENT;
FINANCIAL STATEMENTS.
On or before April 1 of each calendar year, commencing in 2003 year, the
Servicer, at its expense, shall cause a nationally or regionally recognized
firm of independent public accountants (who may also render other services to
the Servicer, the Seller or any affiliate thereof) which is a member of the
American Institute of Certified Public Accountants to furnish a statement to
the Trustee and the Depositor to the effect that with respect to the
Servicer, such firm has examined certain documents and records relating to
the servicing of mortgage loans which the Servicer is servicing, including
the related Contracts, and that, on the basis of such examination, conducted
substantially in compliance with the Uniform Single Attestation Program for
Mortgage Bankers or the Audit Guide for HUD Approved Title II Approved
Mortgagees and Loan Correspondent Programs, nothing has come to their
attention which would indicate that such servicing has not been conducted in
compliance with Accepted Servicing Practices, except for (a) such exceptions
as such firm shall believe to be immaterial, and (b) such other exceptions as
shall be set forth in such statement. In rendering such statement, such firm
may rely, as to matters relating to direct servicing of mortgage loans by
Subservicers, upon comparable statements for examinations conducted
substantially in compliance with the Uniform Single Attestation Program for
Mortgage Bankers or the Audit Guide for HUD Approved Title II Approved
Mortgagees and Loan Correspondent Programs (rendered within one year of such
statement) of independent public accountants with respect to the related
Subservicer. Copies of such statement shall be provided by the Trustee to any
Certificateholder upon request at the related Servicer's expense, provided
such statement is delivered by the Servicer to the Trustee.
SECTION 3.16 REMIC COMPLIANCE.
(a) The REMIC Administrator shall make an election to treat the Trust Fund
(other than the Guarantee Agreement and any Guarantee Payment Amounts) as two
REMICs under the Code and, if necessary, under applicable state law. The
Guarantee Agreement and any Guaranty Payment Amounts shall not be considered
a part of either REMIC. The assets of each REMIC are set forth in this
Agreement. Such election shall be made on Form 1066 or other appropriate
federal tax or information return (including Form 8811) or any appropriate
state return for the taxable year ending on the last day of the calendar year
in which the Certificates are issued. For the purposes of the REMIC
elections in respect of the Trust Fund, Certificates and interests to be
designated as the "regular interests" and the sole class of "residual
interests" in each REMIC shall be set forth in Section 10.03. The REMIC
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Administrator and the Trustee shall not permit the creation of any
"interests" (within the meaning of Section 860G of the Code) in each REMIC
elected in respect of the Trust Fund other than the "regular interests" and
"residual interests" so designated.
(b) The Closing Date is hereby designated as the "startup day" (the "Startup
Date") of the Trust Fund within the meaning of Section 860G(a)(9) of the Code.
(c) The REMIC Administrator shall at all times hold a Class R Certificate
representing a 0.01% Percentage Interest of all Class R Certificates and
shall be designated as "the tax matters person" with respect to each REMIC in
the manner provided under Treasury Regulations section 1.860F-4(d) and
temporary Treasury Regulations section 301.6231(a)(7)-1T. The REMIC
Administrator, as tax matters person, shall (i) act on behalf of each REMIC
in relation to any tax matter or controversy involving the Trust Fund and
(ii) represent the Trust Fund in any administrative or judicial proceeding
relating to an examination or audit by any governmental taxing authority with
respect thereto. The legal expenses, including without limitation attorneys'
or accountants' fees, and costs of any such proceeding and any liability
resulting therefrom shall be expenses of the Trust Fund and the REMIC
Administrator shall be entitled to reimbursement therefor out of amounts
attributable to the Contracts on deposit in the Certificate Account provided
by Section 3.06 unless such legal expenses and costs are incurred by reason
of the REMIC Administrator's willful misfeasance, bad faith or gross
negligence.
(d) The REMIC Administrator shall prepare or cause to be prepared all of the
tax returns that it determines are required with respect to each REMIC
created hereunder and deliver such tax returns in a timely manner to the
Trustee and the Trustee shall sign and file such tax returns in a timely
manner. The expenses of preparing such returns shall be borne by each REMIC
Administrator without any right of reimbursement therefor. Each REMIC
Administrator agrees to indemnify and hold harmless the Trustee with respect
to any tax liability arising from the Trustee's signing of tax returns that
contain errors or omissions. The Trustee and Servicer shall promptly provide
the REMIC Administrator with such information as the REMIC Administrator may
from time to time reasonably request for the purpose of enabling the REMIC
Administrator to prepare tax returns.
(e) The REMIC Administrator 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 REMIC.
(f) The REMIC Administrator shall take such actions and shall cause each
REMIC created hereunder to take such actions as are reasonably within the
REMIC Administrator's or the Servicer's control and the scope of its duties
more specifically set forth herein as shall be necessary or desirable to
maintain the status thereof as a REMIC under the REMIC Provisions (and the
Trustee shall assist the Servicer and the REMIC Administrator, to the extent
reasonably requested by the Servicer and the REMIC Administrator to do so).
The REMIC Administrator and the Servicer shall not knowingly or intentionally
take any action, cause the Trust Fund to take any action or fail to take (or
fail to cause to be taken) any action reasonably within their respective
control that, under the REMIC Provisions, if taken or not taken, as the case
may be, could (i) endanger the status of each REMIC as a REMIC or (ii) result
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in the imposition of a tax upon either REMIC (including but not limited to
the tax on prohibited transactions as defined in Section 860F(a)(2) of the
Code and the tax on contributions to a REMIC set forth in Section 860(G)(d)
of the Code) (either such event, in the absence of an Opinion of Counsel or
the indemnification referred to in this sentence, an "Adverse REMIC Event")
unless the REMIC Administrator has received an Opinion of Counsel (at the
expense of the party seeking to take such action or, if such party fails to
pay such expense, and the REMIC Administrator determines that taking such
action is in the best interest of the Trust Fund and the Certificateholders,
at the expense of the Trust Fund, but in no event at the expense of the REMIC
Administrator, the Seller, the Servicer or the Trustee) to the effect that
the contemplated action will not, with respect to the REMIC created
hereunder, endanger such status or, unless the REMIC Administrator determines
in its sole discretion to indemnify the Trust Fund against the imposition of
such a tax, result in the imposition of such a tax. Wherever in this
Agreement a contemplated action may not be taken because the timing of such
action might result in the imposition of a tax on the Trust Fund, or may only
be taken pursuant to an Opinion of Counsel that such action would not impose
a tax on the Trust Fund, such action may nonetheless be taken provided that
the indemnity given in the preceding sentence with respect to any taxes that
might be imposed on the Trust Fund has been given and that all other
preconditions to the taking of such action have been satisfied. The Trustee
shall not take or fail to take any action (whether or not authorized
hereunder) as to which the REMIC Administrator 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 or inaction. In addition,
prior to taking any action with respect to the REMIC or its assets, or
causing the REMIC to take any action, which is not expressly permitted under
the terms of this Agreement, the Trustee will consult with the REMIC
Administrator or its designee, in writing, with respect to whether such
action could cause an Adverse REMIC Event to occur with respect to each
REMIC, and the Trustee shall not take any such action or cause each REMIC to
take any such action as to which the REMIC Administrator has advised it in
writing that an Adverse REMIC Event could occur. The REMIC Administrator may
consult with counsel to make such written advice, and the cost of same shall
be borne by the party seeking to take the action not expressly permitted by
this Agreement, but in no event at the expense of the REMIC Administrator or
the Servicer. 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
each REMIC 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, including interest, penalties, additional
amounts or additions to tax (a "Tax"), is imposed on the Trust Fund, such Tax
shall be charged against amounts otherwise required to be distributed to the
Holders of the Class R Certificates. The Trustee is hereby authorized to
retain from amounts otherwise required to be distributed to the Holders of
the Class R Certificates sufficient funds to pay or provide for the payment
of, and to actually pay such Tax as is legally owed by the Trust Fund (but
such authorization shall not prevent the Servicer or the REMIC Administrator
from contesting any such Tax in appropriate proceedings, and withholding
payment of such Tax, if permitted by law, pending the outcome of such
proceedings). To the extent that sufficient amounts cannot be so retained to
pay or provide for the payment of any tax imposed on gain realized from any
prohibited transaction (as defined in the REMIC Provisions), the Trustee is
hereby authorized to and shall segregate, into a separate
non-interest-bearing account, the net income from such prohibited
transactions and pay such Tax. In the event any (i) amounts initially
retained from amounts required to be distributed to the Holders of the
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Class R Certificates and (ii) income so segregated and applied towards the
payment of such Tax shall not be sufficient to pay such Tax in its entirety,
the amount of the shortfall shall be paid from funds in the Certificate
Account notwithstanding anything to the contrary contained herein. To the
extent any such segregated income or funds from the Certificate Account are
paid to the Internal Revenue Service, the Trustee shall retain, or cause to
be retained, an amount equal to the amount of such income or funds so paid
from future amounts otherwise required to be distributed to the Holders of
the Class R Certificates and shall deposit such retained amounts in the
Certificate Account for distribution to the Holders of the Regular
Certificates.
(h) The REMIC Administrator shall, for federal income tax purposes, maintain
books and records with respect to each REMIC on a calendar year and on an
accrual basis or as otherwise may be required by the REMIC Provisions.
(i) Following the Startup Day, the Trustee shall not accept any
contributions of assets to either REMIC unless (subject to Section 3.16(f))
the Trustee shall have received an Opinion of Counsel (at the expense of the
party seeking to make such contributions) to the effect that the inclusion of
such assets in such REMIC will not cause the REMIC to fail to qualify as a
REMIC at any time that any Certificates are outstanding or subject the REMIC
to any tax under the REMIC Provisions or other applicable provisions of
federal, state and local law or ordinances.
(j) The Trustee shall not (subject to Section 3.16(f)) enter into any
arrangement by which either REMIC will receive a fee or other compensation
for services nor permit 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) Solely for the purposes of Section 1.860G-1(a)(4)(iii) of the Treasury
Regulations, the "latest possible maturity date" by which the Certificate
Balance of each Class of Certificates representing a regular interest in each
REMIC would be reduced to zero is the sixth Distribution Date following the
latest scheduled maturity of any Contract.
(l) Within 30 days after the Closing Date, the REMIC Administrator 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 the REMIC.
(m) Neither the Trustee nor the Servicer shall sell, dispose of or
substitute for any of the Contracts (except in connection with (i) the
default, imminent default or foreclosure of a Contract, including but not
limited to, the acquisition or sale of Collateral acquired by deed in lieu of
foreclosure, (ii) the bankruptcy of the applicable REMIC, (iii) the
termination of the REMIC pursuant to Article IX of this Agreement or (iv) a
purchase of Contracts pursuant to Article II of this Agreement) nor acquire
any assets for either REMIC, nor sell or dispose of any investments in the
Certificate Accounts for gain nor accept any contributions to either REMIC
after the Closing Date unless it has received an Opinion of Counsel that such
sale, disposition, substitution or acquisition will not (a) affect adversely
the status of either REMIC as a REMIC or (b) unless the REMIC Administrator
has determined in its sole discretion to indemnify the Trust Fund against
such tax, cause either REMIC to be subject to a tax on "prohibited
transactions" or "contributions" pursuant to the REMIC Provisions.
(n) Each Holder of a Class R Certificate, by purchasing such Class R
Certificate, agrees to give the REMIC Administrator written notice that it is
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a "pass-through interest holder" within the meaning of Temporary Treasury
Regulations Section 1.67-3T(a)(2)(i)(A) immediately upon becoming the Holder
of such Class R Certificate, if it is, or is holding such Class R Certificate
on behalf of, a "pass-through interest holder."
(o) The Servicer shall sell any Repossessed Collateral within three years of
its acquisition by the Trust Fund, unless (i) at least 60 days before such
three-year period would otherwise expire, the Servicer applies for an
extension of such three-year period pursuant to Sections 856(e)(3) and
860G(a)(8)(A) of the Code, in which case the Servicer shall sell such
Repossessed Collateral within the applicable extension period or (ii) at the
request of the Servicer, the Trustee seeks, and subsequently receives, an
Opinion of Counsel, addressed to the Trustee and the Servicer, to the effect
that the holding by the Trust Fund of such Repossessed Collateral subsequent
to three years after its acquisition will not result in the imposition of
taxes on "prohibited transactions" of the Trust Fund as defined in
Section 860F of the Code or cause the Trust Fund to fail to qualify as a REMIC
at any time that any Certificates are outstanding. The Servicer shall
manage, conserve, protect and operate each Repossessed Collateral solely for
the purpose of its prompt disposition and sale in a manner that does not
cause any such Repossessed Collateral to fail to qualify as "foreclosure
property" within the meaning of Section 860G(a)(8) of the Code or result in
the receipt by the REMIC of any "income from non-permitted assets" within the
meaning of Section 860F(a)(2)(B) of the Code or any "net income from
foreclosure property" which is subject to taxation under the REMIC
Provisions. In connection with its efforts to sell such Repossessed
Collateral, the Servicer shall either itself or through an agent selected by
the Servicer protect and conserve such Repossessed Collateral in the same
manner and to such extent as is customary in the locality where such
Repossessed Collateral is located and may, incident to its conservation and
protection of the interests of the Certificateholders, rent the same, or any
part thereof, as the Servicer deems to be in the best interest of the
Servicer and the Certificateholders for the period prior to the sale of such
Repossessed Collateral.
SECTION 3.17 DUTIES OF THE CREDIT RISK MANAGER.
The Credit Risk Manager will monitor the performance of and make
recommendations to the applicable servicer regarding certain delinquent and
defaulted Contracts and will report to the Depositor on the performance of
such Contracts. Such reports and recommendations will be based upon
information provided pursuant to the Credit Risk Management Agreement. The
Credit Risk Manager shall look solely to the Servicer for all information and
data (including loss and delinquency information and data) and loan level
information and data relating to the servicing of the Contracts.
SECTION 3.18 SPECIAL SERVICED CONTRACTS.
If directed by the Special Servicer and solely at the Special Servicer's
option, the Servicer shall transfer the servicing of any Contracts 91 days or
more delinquent to the Special Servicer. The Special Servicer shall
thereupon assume all of the rights and obligations of the Servicer hereunder
with respect to any such Contracts arising thereafter and the Servicer shall
have no further responsibility with respect to such Contract (except that the
Special Servicer shall not be (i) liable for losses of the Servicer pursuant
to Section 3.08 hereof or for any acts or omissions of the Servicer hereunder
prior to the servicing transfer date, (ii) obligated to effectuate
repurchases or substitutions of Contract hereunder including, but not limited
to, repurchases or substitutions of Contracts pursuant to Section 2.02
hereof, (iii) obligated to make any Advance pursuant to Section 4.01(a) with
respect to any Contract or make any Compensating Interest Payment, or
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(iv) deemed to have made any representations and warranties of such
predecessor Servicer hereunder). Upon the transfer of the servicing of any
such Contract to the Special Servicer, the Special Servicer shall be entitled
to the Servicing Fee and other compensation accruing after the servicing
transfer date with respect to such Contracts pursuant to Section 3.12. In
the event that the Special Servicer shall make any advances with respect to
any such Contract, it shall only do so to the extent that it deems such
advance to be recoverable from the related Contract. Such advance shall be
made in the same manner as an Advance by the Servicer as set forth in
Section 4.01 hereof. The Special Servicer shall be entitled to reimbursement
for any such advances in the same manner as the Servicer is entitled to
reimbursement for Advances but the Special Servicer's right to recovery shall
be limited to the Contracts that it services.
In connection with the transfer of the servicing of any Contract to the
Special Servicer, the Servicer shall, at the Special Servicer's expense,
deliver to the Special Servicer all documents and records relating to such
Contracts and an accounting of amounts collected or held by it and otherwise
use its best efforts to effect the orderly and efficient transfer of the
servicing to the Special Servicer. On the servicing transfer date, the
Special Servicer shall reimburse the predecessor servicer for all
unreimbursed Advances, Servicing Advances and Servicing Fees relating to the
Contracts for which the servicing is being transferred. In addition, the
Special Servicer shall amend the Contract Schedule to reflect that such
Contracts are Special Serviced Contracts. The Special Servicer shall be
entitled to be reimbursed in accordance with Section 3.07 hereof for all such
Advances, Servicing Advances and Servicing Fees paid by the Special Servicer
to the predecessor servicer pursuant to this Section 3.18.
The Special Servicer may be replaced as special servicer by holders of
the Class SB Certificates representing a majority of the Percentage Interests.
SECTION 3.19 SIMPLE INTEREST DEFICIENCIES.
(a) On each Determination Date, based on the information provided in the
Servicer Remittance Report the Trustee shall determine if there is a
Class M-1 Simple Interest Deficiency, a Class M-2 Simple Interest Deficiency,
a Class B-1 Simple Interest Deficiency and/or a Class B-2 Simple Interest
Deficiency. On the Business Day prior to the related Distribution Date, the
Trustee shall determine the total amount of funds in the Certificate Account
available to pay such deficiency on the related Distribution Date. If the
total amount of funds in the Certificate Account is not sufficient to pay the
deficiency, the Trustee shall reflect such deficiency in the reports
delivered to Certificateholders pursuant to Section 4.04.
(b) If the Trustee determines that there is a Class M-1 Simple Interest
Deficiency, a Class M-2 Simple Interest Deficiency, a Class B-1 Simple
Interest Deficiency and/or a Class B-2 Simple Interest Deficiency for the
related Distribution Date, the Trustee shall withdraw from the Certificate
Account (to the extent of funds on deposit therein one Business Day prior to
such Distribution Date, after all required distributions on such Distribution
Date) an amount equal to the Class M-1 Simple Interest Deficiency, the
Class M-2 Simple Interest Deficiency, the Class B-1 Simple Interest Deficiency
and the Class B-2 Simple Interest Deficiency (or the amount of such funds in
the Certificate Account, if less) and distribute such amount, first to the
Class M-1 Certificateholders, as part of the Class M-1 Interest Distribution
Amount, up to the amount of the Class M-1 Simple Interest Deficiency (or pro
rata, if such funds are less than the Class M-1 Simple Interest Deficiency),
if any, then to the Class M-2 Certificateholders, as part of the Class M-2
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Interest Distribution Amount, up to the amount of the Class M-2 Simple
Interest Deficiency (or pro rata, if such funds are less than the Class M-2
Simple Interest Deficiency), if any, then to the Class B-1
Certificateholders, as part of the Class B-1 Interest Distribution Amount, up
to the amount of the Class B-1 Simple Interest Deficiency (or pro rata, if
such remaining funds are less than the Class B-1 Simple Interest Deficiency)
and then to the Class B-2 Certificateholders, as part of the Class B-2
Interest Distribution Amount, up to the amount of the Class B-2 Simple
Interest Deficiency (or pro rata, if such remaining funds are less than the
Class B-2 Simple Interest Deficiency); provided, however, that (i) no such
withdrawal shall be made with respect to the Class M-1 Simple Interest
Deficiency if the Cumulative Realized Losses as of such Distribution Date are
greater than $395,322; (ii) no such withdrawal shall be made with respect to
the Class M-2 Simple Interest Deficiency if the Cumulative Realized Losses as
of such Distribution Date are greater than $357,845; (iii) no withdrawal with
respect to Class B-1 Simple Interest Deficiency shall be made if the
Cumulative Realized Losses as of such Distribution Date are greater than
$346,673; (iv) no such withdrawal with respect to the Class B-2 Interest
Deficiency Amount shall be made if the Cumulative Realized Losses as of such
Distribution Date are greater than $354,833; (v) no withdrawal with respect
to a Class M-1 Simple Interest Deficiency shall be made if the aggregate
withdrawals with respect to all prior Class M-1 Interest Deficiency Amounts
equal $23,124,700; (vi) no withdrawal with respect to a Class M-2 Simple
Interest Deficiency shall be made if the aggregate withdrawals with respect
to all prior Class M-2 Interest Deficiency Amounts equal $17,274,700; (vii)
no withdrawal with respect to a Class B-1 Simple Interest Deficiency shall be
made if the aggregate withdrawals with respect to all prior Class B-1 Simple
Interest Deficiency Amounts equal $12,214,700 and (viii) no withdrawal with
respect to a Class B-2 Simple Interest Deficiency shall be made if the
aggregate withdrawals with respect to all prior Class B-2 Simple Interest
Deficiency Amounts equal $7,154,700.
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ARTICLE IV
DISTRIBUTIONS AND
ADVANCES BY THE SERVICER
SECTION 4.01 ADVANCES BY THE SERVICER.
(a) By the close of business on the day prior to each Distribution Date, the
Servicer shall (i) cause to be deposited, out of its own funds, in the
Collection Account an amount equal to the excess of (A) 30 day's interest on
each Contract for each Due Date occurring during the related Due Period
(which, for the first Due Period may include two Due Dates for a Contract, if
applicable) over (B) the sum of (1) the amount of interest actually received
with respect to such Contract on all Due Dates during the related Due Period
(which, for the first Due Period may include two Due Dates for a Contract, if
applicable) and (2) the Compensating Interest Payment paid by the Servicer
with respect to such Contract and such Due Period (an "Advance"), (ii) apply
all or a portion of the funds held in the Collection Account for future
distribution to make such Advance, or (iii) do any combination of clauses (i)
and (ii) to make such Advance. To the extent that the funds held in the
Collection Account for future distribution (or any portion thereof) that has
been applied pursuant to clause (ii) or (iii) is required for application as
to all or a portion of a scheduled payment due on the related Contract, the
Servicer shall deposit, out of its own funds, the amount of such funds (or
the portion thereof required for such scheduled payment) into the Collection
Account on the immediately succeeding Due Date, and the amount so deposited
will become part of the Outstanding Amount Advanced.
(b) The Servicer shall reimburse itself for the Outstanding Amount Advanced
out of (i) collections of delinquent payments of principal and interest on
Contracts as to which the Servicer previously made an Advance, (ii) available
funds in the Collection Account attributable to funds held for future
distribution or (iii) any combination of clauses (i) and (ii) above.
(c) If the Servicer determines that any advance made pursuant to
Section 4.01(a) has become a Nonrecoverable Advance and at the time of such
determination there exists an Outstanding Amount Advanced, then the Servicer
shall reimburse itself out of funds in the Collection Account for the amount
of such Nonrecoverable Advance for the next succeeding Distribution Date) by
withdrawing such amount pursuant to Section 3.07(a)(iii), but not in excess
of such Outstanding Amount Advanced. If a Contract becomes a Liquidation
Contract and at such time there exists an Outstanding Amount Advanced, then
the Servicer shall reimburse itself out of funds in the Collection Account
for the portion of Advances equal to the aggregate of delinquent scheduled
payments on such Contract to the Due Date in the Due Period in which such
Contract became a Liquidation Contract, but not in excess of such Outstanding
Amount Advanced. Notwithstanding any other provision of this Agreement,
under no circumstances shall the Servicer be required to make an Advance that
the Servicer determines if made would be a Nonrecoverable Advance.
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SECTION 4.02 PRIORITY OF DISTRIBUTIONS.
(a) On each Distribution Date, the Trustee shall distribute the Interest
Remittance Amount for such date in the following order of priority:
(i) to the Trustee, the Trustee Fee for such Distribution Date;
(ii) to the Credit Risk Manager, the Credit Risk Manager Fee;
(iii) to each Class of Class R Certificates, the Class R Interest Distribution
Amount allocable thereto;
(iv) to the Class A Certificates, the Class A Interest Distribution Amount;
(v) to the Class M-1 Certificates, the Class M-1 Interest Distribution
Amount, the Class M-1 Liquidation Loss Interest Amount and the Class M-1
Unpaid Liquidation Loss Interest Shortfall for such Distribution Date;
(vi) to the Class M-2 Certificates, the Class M-2 Interest Distribution
Amount, the Class M-2 Liquidation Loss Interest Amount and the Class M-2
Unpaid Liquidation Loss Interest Shortfall for such Distribution Date;
(vii) to the Class B-1 Certificates, the Class B-1 Interest Distribution
Amount, the Class B-1 Liquidation Loss Interest Amount and the Class B-1
Unpaid Liquidation Loss Interest Shortfall for such Distribution Date; to
the extent that amounts paid pursuant to this clause represent payments in
respect of Class B-1 Excess Optimal Interest or the Class B-1 Excess
Optimal Interest Carryforward Amount, such amounts shall be treated for tax
purposes as having been distributed from REMIC II to the holder of REMIC II
Regular Interest SB-IO (who will include such amounts in their gross
income) and then paid pursuant to contract from such holder to the holder
of the Class B-1 Certificates;
(viii) to the Class B-2 Certificates, the Class B-2 Interest Distribution
Amount, the Class B-2 Liquidation Loss Interest Amount and the Class B-2
Unpaid Liquidation Loss Interest Shortfall for such Distribution Date; to
the extent that amounts paid pursuant to this clause represent payments in
respect of Class B-2 Excess Optimal Interest or the Class B-2 Excess
Optimal Interest Carryforward Amount, such amounts shall be treated for tax
purposes as having been distributed from REMIC II to the holder of REMIC II
Regular Interest SB-IO (who will include such amounts in their gross
income) and then paid pursuant to contract from such holder to the holder
of the Class B-2 Certificates;
(ix) to the Class A Certificates, any Interest Shortfalls for such
Distribution Date and any unpaid Interest Shortfall for previous
Distribution Dates, in each case, relating to the Class A Certificates;
(x) to the Class M-1 Certificates, any Interest Shortfalls for such
Distribution Date and any unpaid Interest Shortfall for previous
Distribution Dates, in each case, relating to the Class M-1 Certificates;
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(xi) to the Class M-2 Certificates, any Interest Shortfalls for such
Distribution Date and any unpaid Interest Shortfall for previous
Distribution Dates, in each case, relating to the Class M-2 Certificates;
(xii) to the Class B-1 Certificates, any Interest Shortfalls for such
Distribution Date and any unpaid Interest Shortfall for previous
Distribution Dates, in each case, relating to the Class B-1 Certificates;
(xiii) to the Class B-2 Certificates, any Interest Shortfalls for such
Distribution Date and any unpaid Interest Shortfall for previous
Distribution Dates, in each case, relating to the Class B-2 Certificates;
(xiv) for application as part of Monthly Excess Cashflow for such Distribution
Date, as provided in Section 4.02(c), any such Interest Remittance Amount
remaining for such Distribution Date.
(b) On each Distribution Date the Trustee shall distribute the Formula
Principal Distribution Amount for such date in the following order of
priority:
(i) the sum of the Class A Formula Principal Distribution Amount plus any
Unpaid Class A Principal Shortfall, sequentially to (A) the Class R-I
Certificates until the Class R-I Certificate Balance has been reduced to
zero, (B) the Class R-II Certificates until the Class R-II Certificate
Balance has been reduced to zero, and (C) the Class A Certificates until
the Class A Certificate Balance has been reduced to zero;
(ii) the sum of the Class M-1 Formula Principal Distribution Amount plus any
Unpaid Class M-1 Principal Shortfall, to the Class M-1 Certificates until
the Class M-1 Certificate Balance has been reduced to zero;
(iii) the sum of the Class M-2 Formula Principal Distribution Amount plus any
Unpaid Class M-2 Principal Shortfall, to the Class M-2 Certificates until
the Class M-2 Certificate Balance has been reduced to zero;
(iv) the sum of the Class B-1 Formula Principal Distribution Amount plus any
Unpaid Class B-1 Principal Shortfall, to the Class B-1 Certificates until
the Class B-1 Certificate Balance has been reduced to zero;
(v) the sum of the Class B-2 Formula Principal Distribution Amount plus any
Unpaid Class B-2 Principal Shortfall, to the Class B-2 Certificates until
the Class B-2 Certificate Balance has been reduced to zero; and
(vi) for application as part of Monthly Excess Cashflow for such Distribution
Date, as provided in Section 4.02(c), any such Formula Principal
Distribution Amount remaining for such Distribution Date.
(c) On each Distribution Date, the Trustee shall distribute the Monthly
Excess Cashflow for such date in the following order of priority (to the
extent such amounts have not been paid pursuant to Section 4.02(a) or (b)):
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(i) to the Class A Certificates as a payment of principal, the Unpaid
Class A Principal Shortfall, until the Class A Certificate Balance has been
reduced to zero;
(ii) to the Class A Certificates as a payment of principal, until the earlier
of the time when the Overcollateralization Amount equals the Target
Overcollateralization Amount or the Class A Certificate Balance has been
reduced to zero;
(iii) to the Class M-1 Certificates as a payment of principal, the Unpaid
Class M-1 Principal Shortfall, until the Class M-1 Certificate Balance has
been reduced to zero,
(iv) to the Class M-1 Certificates, an amount equal to the sum of (i) the
Class M-1 Liquidation Loss Interest Amount, (ii) the Class M-1 Unpaid
Liquidation Loss Interest Shortfall and (iii) as a payment of principal,
any Class M-1 Liquidation Loss Amount;
(v) to the Class M-1 Certificates as a payment of principal, until the
earlier of the time when the Overcollateralization Amount equals the Target
Overcollateralization Amount or the Class M-1 Certificate Balance has been
reduced to zero;
(vi) to the Class M-2 Certificates as a payment of principal, the Unpaid
Class M-2 Principal Shortfall, until the Class M-2 Certificate Balance has
been reduced to zero;
(vii) to the Class M-2 Certificates, an amount equal to the sum of (i) any
Class M-2 Liquidation Loss Interest Amount, (ii) any Class M-2 Unpaid
Liquidation Loss Interest Shortfall and (iii) as a payment of principal,
any Class M-2 Liquidation Loss Amount;
(viii) to the Class M-2 Certificates as a payment of principal, until the
earlier of the time when the Overcollateralization Amount equals the Target
Overcollateralization Amount or the Class M-2 Certificate Balance has been
reduced to zero;
(ix) to the Class B-1 Certificates as a payment of principal, the Unpaid
Class B-1 Principal Shortfall, until the Class B-1 Certificate Balance has
been reduced to zero,
(x) to the Class B-1 Certificates, an amount equal to the sum of (i) any
Class B-1 Liquidation Loss Interest Amount, (ii) any Class B-1 Unpaid
Liquidation Loss Interest Shortfall and (iii) as a payment of principal,
any Class B-1 Liquidation Loss Amount;
(xi) the Class B-1 Certificates as a payment of principal, until the earlier
of the time when the Overcollateralization Amount equals the Target
Overcollateralization Amount or the Class B-1 Certificate Balance has been
reduced to zero;
(xii) to the Class B-2 Certificates as a payment of principal, the Unpaid
Class B-2 Principal Shortfall, until the Class B-2 Certificate Balance has
been reduced to zero,
(xiii) to the Class B-2 Certificates, an amount equal to the sum of (i)
any Class B-2 Liquidation Loss Interest Amount, (ii) any Class B-2 Unpaid
Liquidation Loss Interest Shortfall and (iii) as a payment of principal,
any Class B-2 Liquidation Loss Amount;
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(xiv)to the Class B-2 Certificates as a payment of principal, until the
earlier of the time when the Overcollateralization Amount equals the Target
Overcollateralization Amount or the Class B-2 Certificate Balance has been
reduced to zero; and
(xv) to the Class SB Certificates, any Overcollateralization Release
Amounts, in reduction of the Certificate Balance of the Class SB Certificate
applied as set forth in the Preliminary Statement;
(xvi) to the Class SB Certificates, interest thereon at the Pass-Through
Rate applied as set forth in the Preliminary Statement; and
(xvii) to the Class R-I Certificate, any remaining amount.
(d) On each Distribution Date, the following amounts from the Interest
Remittance Amount and Principal Remittance Amount, in the following order of
priority, shall be deemed to have been distributed by REMIC I to REMIC II on
account of the REMIC I Regular Interests or shall be withdrawn from the
Custodial Account and distributed to the holders of the Class R-I
Certificates, as the case may be:
(i) to the Holders of REMIC I Regular ▇▇▇▇▇▇▇▇▇ ▇-▇▇▇, ▇-▇▇▇, ▇-▇▇▇ and
I-LT4, in an amount equal to (A) the Uncertificated Interest on such
REMIC I Regular Interests 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
▇▇▇▇▇▇▇▇▇ ▇-▇▇▇, ▇-▇▇▇, ▇-▇▇▇ and I-LT4, in an amount equal to the
remainder of the Interest Remittance Amount and Principal Remittance Amount
for such Distribution Date after the distributions made pursuant to clause
(i) above, allocated as follows (except as provided below):
(iii) (A) first, to the Holders of the REMIC I Regular Interests I-LT2,
REMIC I Regular Interests I-LT3 and REMIC I Regular Interests I-LT4, the
Class I-LT2 Principal Distribution Amount, the Class I-LT3 Principal
Distribution Amount and the Class I-LT4 Principal Distribution Amount;
(B) second, to the Holders of the REMIC I Regular ▇▇▇▇▇▇▇▇▇
▇-▇▇▇, any remaining portion of such remainder, until the principal
balance of such REMIC I Regular Interest I-LT-1 shall have been reduced
to zero;
(C) third, any remaining portion of such remainder, pro-rata,
according to their respective principal balances remaining after the
distributions made pursuant to clause (A) above, to the Holders of the
REMIC I Regular ▇▇▇▇▇▇▇▇▇ ▇-▇▇▇, ▇-▇▇▇ and I-LT4, until the principal
balances of such REMIC I Regular Interests shall have been reduced to
zero; and
(D) fourth, any remaining portion of such remainder, to the
Holders of the Class R-I Certificates.
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SECTION 4.03 REMIC I REALIZED LOSSES.
All Realized Losses on the Contracts 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 Trustee shall prepare and
make available to each Certificateholder, the Servicer, the Depositor and
each Rating Agency, a statement based on the information provided by the
Servicer as agreed upon between the Servicer and the Trustee from time to
time (the "Servicer Remittance Report") setting forth with respect to the
related distribution (the "Monthly Statement"):
(i) the Class A Distribution Amount for such Distribution Date;
(ii) the amount of principal to be distributed to the Class A
Certificateholders, separately stating the contribution thereto from each of the
amounts specified in clauses (1) through (5), inclusive, of the definition of
Principal Remittance Amount and the amount of Unpaid Class A Principal Shortfall
distributed to such Class;
(iii) the amount of interest to be distributed to Class A
Certificateholders on such Distribution Date (separately identifying any Class A
Unpaid Interest Shortfall included in such distribution);
(iv) the remaining Class A Certificate Balance after giving effect to the
payment of principal to be made on such Distribution Date (on which interest
will be calculated on the next succeeding Distribution Date);
(v) the Class M-1 Distribution Amount for such Distribution Date;
(vi) the amount of principal to be distributed to each Class of Class M-1
Certificateholders, separately stating the contribution thereto from each of the
amounts specified in clauses (1) through (5), inclusive, of the definition of
Principal Remittance Amount;
(vii) the amount of interest to be distributed to Class M-1
Certificateholders on such Distribution Date (separately identifying any Class
M-1 Unpaid Interest Shortfall included in such distribution);
(viii) the amount of Unpaid Class M-1 Principal Shortfall distributed to
such Class, the aggregate amount of any Class M-1 Liquidation Loss Amount, the
Class M-1 Liquidation Loss Interest Amount, the Class M-1 Unpaid Liquidation
Loss Interest Shortfall Amount, and the Class M-1 Principal Shortfall;
(ix) the remaining Class M-1 Certificate Balance and the Class M-1 Adjusted
Certificate Balance after giving effect to the payment of principal to be made
on such Distribution Date (on which interest will be calculated on the next
succeeding Distribution Date);
(x) the Class M-2 Distribution Amount for such Distribution Date;
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(xi) the amount of principal to be distributed to the Class M-2
Certificateholders, separately stating the contribution thereto from each of the
amounts specified in clauses (1) through (5), inclusive, of the definition of
Formula Principal Distribution Amount and the amount of Unpaid Class M-2
Principal Shortfall distributed to such Class, the aggregate amount of any Class
M-2 Liquidation Loss Amount, the Class M-2 Liquidation Loss Interest Amount, the
Class M-2 Unpaid Liquidation Loss Interest Shortfall Amount, and the Class M-2
Principal Shortfall;
(xii) the amount of interest to be distributed to Class M-2
Certificateholders on such Distribution Date (separately identifying any Class
M-2 Unpaid Interest Shortfall included in such distribution);
(xiii) the remaining Class M-2 Certificate Balance and the Class M-2
Adjusted Certificate Balance after giving effect to the payment of principal to
be made on such Distribution Date (on which interest will be calculated on the
next succeeding Distribution Date);
(xiv) the Class B-1 Distribution Amount for such Distribution Date;
(xv) the amount of principal to be distributed to the Class B-1
Certificateholders, separately stating the contribution thereto from each of the
amounts specified in clauses (1) through (5), inclusive, of the definition of
Principal Remittance Amount and the amount of Unpaid Class B-1 Principal
Shortfall distributed to such Class, the aggregate amount of any Class B-1
Liquidation Loss Amount, the Class B-1 Unpaid Liquidation Loss Interest
Shortfall Amount, and the Class B-1 Principal Shortfall;
(xvi) the amount of interest to be distributed to Class B-1
Certificateholders on such Distribution Date (separately identifying any Class
B-1 Unpaid Interest Shortfall included in such distribution);
(xvii) the remaining Class B-1 Certificate Balance and the Class B-1
Adjusted Certificate Balance after giving effect to the payment of principal to
be made on such Distribution Date (on which interest will be calculated on the
next succeeding Distribution Date;
(xviii) the Class B-2 Distribution Amount for such Distribution Date;
(xix) the amount of principal to be distributed to the Class B-2
Certificateholders, separately stating the contribution thereto from each of the
amounts specified in clauses (1) through (5), inclusive, of the definition of
Principal Remittance Amount and the amount of Unpaid Class B-2 Principal
Shortfall distributed to such Class, the aggregate amount of any Class B-2
Liquidation Loss Amount, the Class B-2 Unpaid Liquidation Loss Interest
Shortfall, and the Class B-2 Principal Shortfall Amount;
(xx) the amount of interest to be distributed to Class B-2
Certificateholders on such Distribution Date (separately identifying any Class
B-2 Unpaid Interest Shortfall included in such distribution);
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(xxi) the remaining Class B-2 Certificate Balance and the Class B-2
Adjusted Certificate Balance after giving effect to the payment of principal to
be made on such Distribution Date (on which interest will be calculated on the
next succeeding Distribution Date;
(xxii) the Pool Scheduled Principal Balance for such Distribution Date;
(xxiii) the Overcollateralization Amount for such Distribution Date;
(xxiv) the amount of the Servicing Fees Fee, the Trustee Fee and the Credit
Risk Manager Fee and any other insurance fees, if applicable, with respect to
such Distribution Date;
(xxv) the Pass-Through Rate for each Class of Certificates with respect to
such Distribution Date;
(xxvi) the amount of Advances included in the distribution on such
Distribution Date and the aggregate amount of Outstanding Amount Advanced as of
the last day of the calendar month preceding such Distribution Date;
(xxvii) the number and aggregate principal amounts of Contracts in
foreclosure, in bankruptcy or which are delinquent (with a notation indicating
which Contracts, if any, are in foreclosure or bankruptcy) (1) 30 to 59 days,
(2) 60 to 89 days and (3) 90 or more days, as of the close of business on the
last day of the calendar month preceding such Distribution Date, assuming
twelve, thirty day months;
(xxviii) the Average Sixty Day Delinquency Ratio for such Distribution
Date;
(xxix) the total number and principal balance of any repossessed Collateral
(and market value, if available) as of the last day of the calendar month
preceding such Distribution Date;
(xxx) the Current Realized Losses incurred during the preceding calendar
month and Cumulative Realized Losses as of such Distribution Date;
(xxxi) the weighted average term to maturity of the Contracts as of the
close of business on the last day of the calendar month preceding such
Distribution Date;
(xxxii) the Net Funds Cap for the Due Period immediately preceding the
month of such Distribution Date;
(xxxiii) the Guarantee Payment Amount, if any for such Distribution Date;
(xxxiv) the Guarantee Outstanding Amount remaining on such Distribution
Date after any Guarantee Payment Amounts for such Distribution Date;
(xxxv) the Class B-1 Simple Interest Deficiency Amount, the Class B-2
Simple Interest Deficiency Amount, the Class M-1 Simple Interest Deficiency
Amount and the Class M-2 Simple Interest Deficiency Amount, as of such
Distribution Date; and
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(xxxvi) the gross weighted average coupon of the Contracts as of the first
date of the applicable period for such Distribution Date.
The Trustee's responsibility for disbursing the above information to the
Certificateholders is limited to the availability, timeliness and accuracy of
the information derived from the Servicer.
The Trustee will also make the monthly statements to Certificateholders
available each month to each party referred to in this Section 4.04(a) via
the Trustee's website. The Trustee's website can be accessed at
▇▇▇▇://▇▇▇.▇▇▇▇▇▇▇▇.▇▇▇/▇▇▇▇▇▇ or at such other site as the Trustee may
designate from time to time. The Trustee may fully rely upon and shall have
no liability with respect to information provided by the Servicer.
(b) Upon request, within a reasonable period of time after the end of each
calendar year, the Trustee shall cause to be furnished to each Person who at
any time during the calendar year was a Certificateholder, a statement
setting forth the payments of principal and interest on such Person's Class
of Certificates aggregated for such calendar year or applicable portion
thereof during which such Person was a Certificateholder. Such obligation of
the Trustee shall be deemed to have been satisfied to the extent that
substantially comparable information shall be provided by the Trustee
pursuant to any requirements of the Code as from time to time in effect.
SECTION 4.05 SERVICER TO COOPERATE.
The Servicer shall provide to the Trustee information which is mutually
agreeable to the Trustee and the Servicer with respect to each Contract
serviced by the Servicer no later than the second business day following the
Servicer Remittance Date necessary to enable the Trustee to perform its
distribution, accounting and reporting requirements hereunder.
SECTION 4.06 GUARANTEE AGREEMENT.
(a) As soon as possible, and in no event later than 11:00 a.m., New York
time, on the third Business Day immediately preceding each Distribution Date,
the Trustee shall determine if there is to be a Guarantee Payment Amount on
such Distribution Date.
If there is to be a Guarantee Payment Amount due on such Distribution
Date, the Trustee shall request that the Guarantor make the Guarantee Payment
Amount to the Certificate Account not later than the Business Day preceding
the related Distribution Date. The Trustee shall apply any Guarantee Payment
Amounts in accordance with clause (b) below (after giving effect to all
distributions to be made pursuant to section 4.02(a), 4.02(b) and 4.02(c) on
such Distribution Date).
(b) All amounts received on the Guarantee Agreement shall be paid to the
Class B-2 Certificates as a payment of principal and shall be applied to
reduce the Class B-2 Certificate Balance. In the event that the Class B-2
Certificate Balance has been reduced to zero, all Guarantee Payments
thereafter shall be paid to the Class SB Certificates.
(c) No Certificate hereunder, other than the Class B-2 Certificates or
Class SB Certificates, shall be entitled to any Guarantee Payment.
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(d) In the event that the Guarantor fails to make a payment under the
Guarantee Agreement, the Trustee shall enforce the obligation of the
Guarantor in accordance with the terms of the Guarantee Agreement.
(e) Notwithstanding any other provision to the contrary in this Agreement,
the Guarantor and the Depositor by mutual consent may, with the consent of
100% of the holders of the Class B-2 Certificates and the Class SB
Certificates, but without the consent of the Trustee, the Seller, the
Servicer or the Special Servicer, reduce the Guarantee Payment Amount or
Guarantee Outstanding Amount, substitute or replace all or a portion of the
Guarantee Agreement with another guarantee or any other form of credit
enhancement, change the terms of the Guarantee Agreement or cancel the
Guarantee Agreement upon written notice to the Trustee. Upon such written
notice, the Trustee will cooperate with the Guarantor and the Depositor in
accordance with the written instructions of the Guarantor and the Depositor,
on which it may conclusively rely and the Trustee will give notice thereof to
the Rating Agencies. If any such reduction, substitution, replacement,
change or cancellation requires an amendment to this Agreement, by executing
this Agreement, the parties hereto are hereby deemed to have consented to
such amendment and shall promptly execute such amendment upon the request of
the Depositor and the Trustee shall have no liability whatsoever in
connection with its execution of such amendment pursuant to the provisions of
this Section 4.06(e).
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ARTICLE V
THE CERTIFICATES
SECTION 5.01 THE CERTIFICATES.
The Certificates shall be substantially in the forms attached hereto as
exhibits. The Certificates shall be issuable in registered form, in the
minimum denominations, integral multiples in excess thereof (except that one
Certificate in each Class may be issued in a different amount which must be
in excess of the applicable minimum denomination) and aggregate denominations
per Class set forth in the Preliminary Statement.
Subject to Section 9.02 respecting the final distribution on the
Certificates, on each Distribution Date the Trustee shall make distributions
to each Certificateholder of record on the preceding Record Date by wire
transfer in immediately available funds to the account of such holder at a
bank or other entity having appropriate facilities therefor.
The Certificates shall be executed by manual or facsimile signature on
behalf of the Trustee by a Responsible Officer upon the written order of the
Depositor. Certificates bearing the manual or facsimile signatures of
individuals who were, at the time such signatures were affixed, authorized to
sign on behalf of the Trustee shall bind the Trustee, notwithstanding that
such individuals or any of them have ceased to be so authorized prior to the
authentication and delivery of any such Certificates or did not hold such
offices at the date of such Certificate. No Certificate shall be entitled to
any benefit under this Agreement, or be valid for any purpose, unless there
appears on such certificate a Certificate of Authentication in the form
provided herein, executed by the Trustee by manual signature, and such
authentication upon any Certificate shall be conclusive evidence, and the
only evidence, that such Certificate has been duly executed and delivered
hereunder. All Certificates shall be dated the date of their
countersignature. On the Closing Date, the Trustee shall authenticate the
Certificates to be issued at the written direction of the Depositor, or any
affiliate thereof.
The Depositor shall provide, or cause to be provided, to the Trustee on
a continuous basis, an adequate inventory of Certificates to facilitate
transfers.
SECTION 5.02 CERTIFICATE REGISTER; REGISTRATION OF TRANSFER AND EXCHANGE OF
CERTIFICATES.
(a) The Trustee shall maintain, or cause to be maintained in accordance with
the provisions of Section 5.06, a Certificate Register for the Trust Fund in
which, subject to the provisions of subsections (b) and (c) below and to such
reasonable regulations as it may prescribe, the Trustee shall provide for the
registration of Certificates and of transfers and exchanges of Certificates
as herein provided. Upon surrender for registration of transfer of any
Certificate, the Trustee shall execute and deliver, in the name of the
designated transferee or transferees, one or more new Certificates of the
same Class and aggregate Percentage Interest.
At the option of a Certificateholder, Certificates may be exchanged for
other Certificates of the same Class in authorized denominations and
evidencing the same aggregate Percentage Interest upon surrender of the
Certificates to be exchanged at the office or agency of the Trustee. Whenever
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any Certificates are so surrendered for exchange, the Trustee shall execute,
authenticate, and deliver the Certificates which the Certificateholder making
the exchange is entitled to receive. Every Certificate presented or
surrendered for registration of transfer or exchange shall be accompanied by
a written instrument of transfer in form satisfactory to the Trustee duly
executed by the holder thereof or his attorney duly authorized in writing.
No service charge to the Certificateholders shall be made for any
registration of transfer or exchange of Certificates, but payment of a sum
sufficient to cover any tax or governmental charge that may be imposed in
connection with any transfer or exchange of Certificates may be required.
All Certificates surrendered for registration of transfer or exchange
shall be cancelled and subsequently disposed of by the Trustee in accordance
with the Trustee's customary procedures.
(b) No transfer, sale, pledge or other disposition of a Private Certificate
shall be made unless such transfer, sale, pledge or other disposition is
exempt from the registration requirements of the Securities Act of 1933, as
amended, and any applicable state securities laws or is made in accordance
with said Act and laws. In the event that a transfer of a Class SB
Certificate is to be made (i)(A) if the transfer is not being made pursuant
to clause (ii) below, such transfer shall represent the entire Class of
Class SB Certificates, unless the Depositor consents to a transfer of less
than the entire Class of Class SB Certificates pursuant to this clause (i),
(B) the Trustee shall require a written Opinion of Counsel acceptable to and
in form and substance satisfactory to the Trustee and the Depositor that such
transfer may be made pursuant to an exemption, describing the applicable
exemption and the basis therefor, from said Act and laws or is being made
pursuant to said Act and laws, which Opinion of Counsel shall not be an
expense of the Trustee, the Depositor or the Servicer (except that, if such
transfer is made by the Depositor or the Servicer or any Affiliate thereof,
the Depositor or the Servicer shall provide such Opinion of Counsel at their
own expense); provided that such Opinion of Counsel shall not be required in
connection with the initial transfer of any such Certificate by the Depositor
to any Affiliate thereof and (C) the Trustee shall require the transferee to
execute a representation letter, substantially in the form of EXHIBIT I
hereto, and the Trustee shall require the transferor to execute a
representation letter, substantially in the form of EXHIBIT J hereto, each
acceptable to and in form and substance satisfactory to the Depositor and the
Trustee certifying to the Depositor and the Trustee the facts surrounding
such transfer, which representation letters shall not be an expense of the
Trustee, the Depositor or the Servicer; provided, however, that such
representation letters shall not be required in connection with any transfer
of any such Certificate by the Depositor to any Affiliate thereof and the
Trustee shall be entitled to conclusively rely upon a representation (which,
upon the request of the Trustee, shall be a written representation) from the
Depositor, of the status of such transferee as an Affiliate of the Depositor
or (ii) the prospective transferee of such a Certificate shall be required to
provide the Trustee, the Depositor and the Servicer with an investment letter
substantially in the form of EXHIBIT K attached hereto (or such other form as
the Depositor in its sole discretion deems acceptable), which investment
letter shall not be an expense of the Trustee, the Depositor or the Servicer,
and which investment letter states that, among other things, such transferee
(A) is a "qualified institutional buyer" as defined under Rule 144A, acting
for its own account or the accounts of other "qualified institutional buyers"
as defined under Rule 144A of the Securities Act of 1933, as amended, and (B)
is aware that the proposed transferor intends to rely on the exemption from
registration requirements under the Securities Act of 1933, as amended,
provided by Rule 144A. In the event that a transfer of a Class B-2
Certificate is to be made, clause (ii) of the preceding sentence must be
complied with in connection with such transfer. The Holder of any such
87
Certificate desiring to effect any such transfer, sale, pledge or other
disposition shall, and does hereby agree to, indemnify the Trustee, the
Depositor and the Servicer against any liability that may result if the
transfer, sale, pledge or other disposition is not so exempt or is not made
in accordance with such federal and state laws.
(c) The Trustee shall cooperate with the Depositor in providing the Rule
144A information referenced in the preceding sentence, including providing to
the Depositor such information regarding the Certificates, the Contracts and
other matters regarding the Trust Fund as the Depositor shall reasonably
request and which is then in the Trustee's possession to meet its obligation
under the preceding sentence. Each Holder of a Private Certificate desiring
to effect such transfer shall, and does hereby agree to, indemnify the
Trustee, the Depositor, the Seller and the Servicer against any liability
that may result if the transfer is not so exempt or is not made in accordance
with such federal and state laws.
In the case of any Physical Certificate presented for registration in
the name of any Person, either (A) the Trustee shall require an Opinion of
Counsel acceptable to and in form and substance satisfactory to the Trustee
and the Servicer to the effect that the purchase or holding of such Physical
Certificate is permissible under applicable law, will not constitute or
result in any non-exempt prohibited transaction under Section 406 of the
Employee Retirement Income Security Act of 1974, as amended ("ERISA"), or
Section 4975 of the Code (or comparable provisions of any subsequent
enactments), and will not subject the Trustee or the Servicer to any
obligation or liability (including obligations or liabilities under ERISA or
Section 4975 of the Code) in addition to those undertaken in this Agreement,
which Opinion of Counsel shall not be an expense of the Trustee, the Seller
or the Servicer or (B) the prospective transferee shall be required to
provide the Trustee, the Depositor and the Servicer with a certification to
the effect set forth in paragraph five of EXHIBIT I (with respect to any
Class B-2 or Class SB Certificate) or paragraph fourteen of EXHIBIT H-1 (with
respect to any Class R Certificate), which the Trustee may rely upon without
further inquiry or investigation, or such other certifications as the Trustee
may deem desirable or necessary in order to establish that such transferee or
the Person in whose name such registration is requested either (a) is not an
employee benefit plan or other plan subject to the prohibited transaction
provisions of ERISA or Section 4975 of the Code, or any Person (including an
investment manager, a named fiduciary or a trustee of any such plan) who is
using "plan assets" of any such plan to effect such acquisition (each, a
"Plan Investor") or (b) in the case of any Private Certificate, the following
conditions are satisfied: (i) such transferee is an insurance company,
(ii) the source of funds used to purchase or hold such Certificate (or
interest therein) is an "insurance company general account" (as defined in
U.S. Department of Labor Prohibited Transaction Class Exemption ("PTCE")
95-60, and (iii) the conditions set forth in Sections I and III of PTCE 95-60
have been satisfied (each entity that satisfies this clause (b), a "Complying
Insurance Company"). Any transferee of a Class M or Class B-1 Certificate
shall be deemed to have represented by virtue of its purchase or holding of
such Certificate (or interest therein) that either (a) such transferee is not
a Plan Investor, (b) it has acquired and is holding such Certificate in
reliance on Prohibited Transaction Exemption ("PTE") 89-90, 54 Fed. Reg.
42597 (October 17, 1989), as amended by PTE 97-34, 62 Fed. Reg. 39021 (July
21, 1997), and PTE 2000-58, 65 Fed. Reg. 67765 (November 13, 2000) (the
"Exemption"), and that it understands that there are certain conditions to
the availability of the Exemption including that such Certificate must be
rated, at the time of purchase, not lower that "BBB-" (or its equivalent) by
Standard & Poor's, "BBB-" (or its equivalent) by Fitch or "Baa3" (or its
equivalent) by ▇▇▇▇▇'▇ or (c) such transferee is a Complying Insurance
Company.
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To the extent permitted under applicable law (including, but not limited
to, ERISA), the Trustee shall be under no liability to any Person for any
registration of transfer of any Physical Certificate that is in fact not
permitted by this Section 5.02(b) or for making any payments due on such
Certificate to the Holder thereof or taking any other action with respect to
such Holder under the provisions of this Agreement so long as the transfer
was registered by the Trustee in accordance with the foregoing requirements.
(d) (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
(d)(iii)(A) below to deliver payments to a Person other than such Person and
to negotiate the terms of any mandatory sale under clause (d)(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
Residual Certificate shall be a Permitted Transferee and shall promptly
notify the Trustee of any change or impending change in its status as a
Permitted Transferee.
(B) In connection with any proposed Transfer of any Ownership
Interest in a Class R Certificate, the Trustee shall require delivery to
it, and shall not register the Transfer of any Class R Certificate until
its receipt of, (I) an affidavit and agreement (a "Transfer Affidavit
and Agreement," in the form attached hereto as EXHIBIT H-1) from the
proposed Transferee, in form and substance satisfactory to the Servicer,
representing and warranting, among other things, that it is a Permitted
Transferee, that it is not acquiring its Ownership Interest in the
Class R Certificate that is the subject of the proposed Transfer as a
nominee, trustee or agent for any Person who is not a Permitted
Transferee, that for so long as it retains its Ownership Interest in a
Class R Certificate, it shall endeavor to remain a Permitted Transferee,
and that it has reviewed the provisions of this Section 5.02(d) and
agrees to be bound by them, and (II) a certificate, in the form attached
hereto as EXHIBIT H-2, from the Holder wishing to transfer the 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 impede the assessment or collection of tax.
(C) Notwithstanding the delivery of a Transfer Affidavit and
Agreement by a proposed Transferee under clause (B) above, if a
Responsible Officer of the Trustee who is assigned to this Agreement has
actual knowledge that the proposed Transferee is not a Permitted
Transferee, 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 shall agree (x) to require a Transfer Affidavit and
Agreement from any other Person to whom such Person attempts to transfer
its Ownership Interest in a Class R Certificate and (y) not to transfer
its Ownership Interest unless it provides a certificate to the Trustee
in the form attached hereto as EXHIBIT H-2.
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(E) Each Person holding or acquiring an Ownership Interest in a
Class R Certificate, by purchasing an Ownership Interest in such
Certificate, agrees to give the Trustee written notice that it is a
"pass-through interest holder" within the meaning of Temporary Treasury
Regulations Section 1.67-3T(a)(2)(i)(A) immediately upon acquiring an
Ownership Interest in a Class R Certificate, if it is, or is holding an
Ownership Interest in a Class R Certificate on behalf of, a
"pass-through interest holder."
(ii) The Trustee shall register the Transfer of any Class R
Certificate only if it shall have received the Transfer Affidavit and
Agreement, a certificate of the Holder requesting such transfer in the form
attached hereto as EXHIBIT H-2 and all of such other documents as shall
have been reasonably required by the Trustee as a condition to such
registration. Transfers of the Class R Certificates to Non-United States
Persons and Disqualified Organizations (as defined in Section 860E(e)(5) of
the Code) are prohibited.
(iii) (A) If any Disqualified Organization shall become a holder of
a Class R Certificate, then the last preceding Permitted Transferee
shall be restored, to the extent permitted by law, to all rights and
obligations as Holder thereof retroactive to the date of registration of
such Transfer of such Class R Certificate. If a Non-United States
Person shall become a holder of a Class R Certificate, then the last
preceding United States 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 such Transfer 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 Permitted Transferee shall be
restored, to the extent permitted by law, to all rights and obligations
as Holder thereof retroactive to the date of registration of such
Transfer of such 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 5.02(d) or for
making any payments due on such Certificate to the holder thereof or for
taking any other action with respect to such holder under the provisions
of this Agreement.
(B) If any purported Transferee shall become a Holder of a Class R
Certificate in violation of the restrictions in this Section 5.02(f) and
to the extent that the retroactive restoration of the rights of the
Holder of such Class R Certificate as described in clause (d)(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 deliver
the Class R Certificates 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 (d)(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 in a Class R Certificate as a result of its
exercise of such discretion.
(iv) The Trustee shall make available, upon written request from
the Internal Revenue Service and any potentially affected Person, all
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information 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 a Disqualified Organization, including the information regarding
"excess inclusions" of such Class R Certificates required to be provided to
the Internal Revenue Service and certain Persons as described in Treasury
Regulations Sections 1.860D-1(b)(5) and 1.860E-2(a)(5), and (B) as a result
of any regulated investment company, real estate investment trust, common
trust fund, partnership, trust, estate or organization described in
Section 1381 of the Code that holds an Ownership Interest in a Class R
Certificate having as among its record holders at any time any Person who
is a Disqualified Organization. Reasonable compensation for providing such
information may be required by the Trustee before it will provide such
information to any such potentially affected Person.
(v) The provisions of this Section 5.02(d) set forth prior to this
clause (v) may be modified, added to or eliminated, 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 ratings,
if any, of any Class of the Class A Certificates, Class M or Class B
Certificates below the lower of the then-current rating or the rating
assigned to such Certificates as of the Closing Date by such Rating
Agency; and
(B) subject to Section 3.16(f), an Officer's 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 absence of such provisions will not
cause any portion of the applicable REMIC to cease to qualify as a REMIC
and will not cause (x) any portion of the applicable REMIC to be subject
to an entity-level tax caused by the Transfer of any Class R Certificate
to a Person that is a Disqualified Organization or (y) a
Certificateholder or another Person to be subject to a REMIC-related tax
caused by the Transfer of a Class R Certificate to a Person that is not
a Permitted Transferee.
(e) The preparation and delivery of all certificates and opinions referred
to above in this Section 5.02 in connection with transfer shall be at the
expense of the parties to such transfers.
(f) Except as provided below, the Book-Entry Certificates shall at all times
remain registered in the name of the Depository or its nominee and at all
times: (i) registration of the Certificates may not be transferred by the
Trustee except to another Depository; (ii) the Depository shall maintain
book-entry records with respect to the Certificate Owners and with respect to
ownership and transfers of such Book-Entry Certificates; (iii) ownership and
transfers of registration of the Book-Entry Certificates on the books of the
Depository shall be governed by applicable rules established by the
Depository; (iv) the Depository may collect its usual and customary fees,
charges and expenses from its Depository Participants; (v) the Trustee shall
deal with the Depository, Depository Participants and indirect participating
firms as representatives of the Certificate Owners of the Book-Entry
Certificates for purposes of exercising the rights of holders under this
Agreement, and requests and directions for and votes of such representatives
shall not be deemed to be inconsistent if they are made with respect to
different Certificate Owners; and (vi) the Trustee may rely and shall be
fully protected in relying upon information furnished by the Depository with
respect to its Depository Participants and furnished by the Depository
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Participants with respect to indirect participating firms and persons shown
on the books of such indirect participating firms as direct or indirect
Certificate Owners.
All transfers by Certificate Owners of Book-Entry Certificates shall be
made in accordance with the procedures established by the Depository
Participant or brokerage firm representing such Certificate Owner. Each
Depository Participant shall only transfer Book-Entry Certificates of
Certificate Owners it represents or of brokerage firms for which it acts as
agent in accordance with the Depository's normal procedures.
If (x) (i) the Depository or the Depositor advises the Trustee in
writing that the Depository is no longer willing or able to properly
discharge its responsibilities as Depository, and (ii) the Trustee or the
Depositor is unable to locate a qualified successor, (y) the Depositor at its
option advises the Trustee in writing that it elects to terminate the
book-entry system through the Depository or (z) after the occurrence of an
Event of Default, Certificate Owners representing at least 51% of the
Certificate Balance of the Book-Entry Certificates together advise the
Trustee and the Depository through the Depository Participants in writing
that the continuation of a book-entry system through the Depository is no
longer in the best interests of the Certificate Owners, the Trustee shall
notify all Certificate Owners, through the Depository, of the occurrence of
any such event and of the availability of definitive, fully-registered
Certificates (the "Definitive Certificates") to Certificate Owners requesting
the same. Upon surrender to the Trustee of the related Class of Certificates
by the Depository, accompanied by the instructions from the Depository for
registration, the Trustee shall issue the Definitive Certificates. None of
the Seller, the Servicer, the Depositor or the Trustee shall be liable for
any delay in delivery of such instruction and each may conclusively rely on,
and shall be protected in relying on, such instructions. The Depositor shall
provide the Trustee with an adequate inventory of certificates to facilitate
the issuance and transfer of Definitive Certificates. Upon the issuance of
Definitive Certificates all references herein to obligations imposed upon or
to be performed by the Depository shall be deemed to be imposed upon and
performed by the Trustee, to the extent applicable with respect to such
Definitive Certificates and the Trustee shall recognize the Holders of the
Definitive Certificates as Certificateholders hereunder; provided that the
Trustee shall not by virtue of its assumption of such obligations become
liable to any party for any act or failure to act of the Depository.
SECTION 5.03 MUTILATED, DESTROYED, LOST OR STOLEN CERTIFICATES.
If (a) any mutilated Certificate is surrendered to the Trustee, or the
Trustee receives evidence to its satisfaction of the destruction, loss or
theft of any Certificate and (b) there is delivered to the Trustee such
security or indemnity as may be required by it to hold it harmless, then, in
the absence of notice to the Trustee that such Certificate has been acquired
by a bona fide purchaser, the Trustee shall execute, authenticate and
deliver, in exchange for or in lieu of any such mutilated, destroyed, lost or
stolen Certificate, a new Certificate of like Class, tenor and Percentage
Interest. In connection with the issuance of any new Certificate under this
Section 5.03, the Trustee may require the payment of a sum sufficient to
cover any tax or other governmental charge that may be imposed in relation
thereto and any other expenses (including the fees and expenses of the
Trustee) connected therewith. Any replacement Certificate issued pursuant to
this Section 5.03 shall constitute complete and indefeasible evidence of
ownership, as if originally issued, whether or not the lost, stolen or
destroyed Certificate shall be found at any time.
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SECTION 5.04 PERSONS DEEMED OWNERS.
---------------------
The Servicer and the Trustee and any agent of the Servicer or the
Trustee may treat the Person in whose name any Certificate is registered as
the owner of such Certificate for the purpose of receiving distributions as
provided in this Agreement and for all other purposes whatsoever, and none of
the Servicer or the Trustee or any agent of the Servicer or the Trustee shall
be affected by any notice to the contrary.
SECTION 5.05 ACCESS TO LIST OF CERTIFICATEHOLDERS' NAMES AND ADDRESSES.
If three or more Certificateholders (a) request such information in
writing from the Trustee, (b) state that such Certificateholders desire to
communicate with other Certificateholders with respect to their rights under
this Agreement or under the Certificates, and (c) provide a copy of the
communication which such Certificateholders propose to transmit, or if the
Depositor or the Servicer shall request such information in writing from the
Trustee, then the Trustee shall, within ten Business Days after the receipt
of such request, provide the Depositor, the Servicer or such
Certificateholders at such recipients' expense the most recent list of the
Certificateholders of such Trust Fund held by the Trustee, if any. The
Depositor and every Certificateholder, by receiving and holding a
Certificate, agree that the Trustee shall not be held accountable by reason
of the disclosure of any such information as to the list of the
Certificateholders hereunder, regardless of the source from which such
information was derived.
SECTION 5.06 MAINTENANCE OF OFFICE OR AGENCY.
The Trustee will maintain or cause to be maintained at its expense an
office or offices or agency or agencies New York, New York where Certificates
may be surrendered for registration of transfer or exchange. The Trustee
initially designates its Corporate Trust Office for such purposes. The
Trustee will give prompt written notice to the Certificateholders of any
change in such location of any such office or agency.
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ARTICLE VI
THE DEPOSITOR, THE SELLER, THE SERVICER AND THE SPECIAL SERVICER
SECTION 6.01 RESPECTIVE LIABILITIES OF THE DEPOSITOR, THE SELLER, THE
SERVICER AND THE SPECIAL SERVICER.
The Depositor, the Seller, each Servicer and the Special Servicer shall
each be liable in accordance herewith only to the extent of the obligations
specifically and respectively imposed upon and undertaken by them herein.
SECTION 6.02 MERGER OR CONSOLIDATION OF THE DEPOSITOR, THE SELLER OR THE
SERVICER.
The Depositor, the Seller and the Servicer will each keep in full effect
its existence, rights and franchises as a corporation under the laws of the
United States or under the laws of one of the states thereof and will each
obtain and preserve its qualification to do business as a foreign corporation
in each jurisdiction in which such qualification is or shall be necessary to
protect the validity and enforceability of this Agreement, or any of the
Contracts and to perform its respective duties under this Agreement.
Any Person into which the Depositor, the Seller or the Servicer may be
merged or consolidated, or any Person resulting from any merger or
consolidation to which the Depositor, the Seller or the Servicer shall be a
party, or any person succeeding to the business of the Depositor, the Seller
or the Servicer, shall be the successor of the Depositor, the Seller 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 with respect to a merger or consolidation of
the Servicer shall be an institution having a net worth of not less than
$10,000,000 or whose deposits are insured by the FDIC through the BIF or the
SAIF.
SECTION 6.03 LIMITATION ON LIABILITY OF THE DEPOSITOR, THE SELLER, THE
SERVICER AND OTHERS.
(a) None of the Depositor, the Seller, the Servicer, the Special Servicer
nor any of the directors, officers, employees or agents of the Depositor, the
Seller, the Servicer or the Special Servicer shall be under any liability to
the Certificateholders for any action taken or for refraining from the taking
of any action in good faith pursuant to this Agreement, or for errors in
judgment; provided, however, that this provision shall not protect the
Depositor, the Seller, the Servicer, the Special Servicer or any such Person
against any breach of representations or warranties made by it herein or
protect the Depositor, the Seller, the Servicer, the Special Servicer or any
such Person from any liability which would otherwise be imposed by reasons of
willful misfeasance, bad faith or gross negligence in the performance of
duties or by reason of reckless disregard of obligations and duties
hereunder. The Depositor, the Seller, the Servicer, the Special Servicer and
any director, officer, employee or agent of the Depositor, the Seller, the
Servicer or the Special 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. None of the Depositor, the Seller, the
Servicer or Special Servicer shall be under any obligation to appear in,
prosecute or defend any legal action that is not incidental to its respective
94
duties hereunder and which in its opinion may involve it in any expense or
liability; provided, however, that any of the Depositor, the Seller, the
Servicer or the Special Servicer may in its discretion undertake any such
action that it may deem necessary or desirable in respect of this Agreement
and the rights and duties of the parties hereto and interests of the Trustee
and the Certificateholders hereunder. In such event, the legal expenses and
costs of such action and any liability resulting therefrom shall be expenses,
costs and liabilities of the Trust Fund, and the Depositor, the Seller, the
Servicer and the Special Servicer shall be entitled to be reimbursed therefor
from the Trust Fund.
(b) The Servicer shall indemnify the Trustee and hold it harmless against
any and all claims, losses, damages, penalties, fines, forfeitures,
reasonable and necessary legal fees and related costs, judgments, and any
other costs, fees and expenses that the Trustee may sustain in any way
related to the failure of the Servicer's willful misfeasance, bad faith or
negligence in the performance of its duties under this Agreement; provided
that such failure is not related to (i) the failure of any other party to
this Agreement to perform its obligations hereunder or (ii) the failure of
the Custodian to timely perform its obligations under the Custodial
Agreement. The Servicer immediately shall notify the Trustee if a claim is
made by a third party with respect to this Agreement or the Contracts.
SECTION 6.04 LIMITATION ON RESIGNATION OF THE SERVICER.
The Servicer shall not resign from the obligations and duties hereby
imposed on it except (i) (a) upon appointment of a successor servicer (which
may be with respect to all or a portion of the Contracts) and (b) receipt by
the Trustee of a letter from each Rating Agency that such a resignation and
appointment will not result in a downgrading of the rating of any of the
Certificates related to the applicable Contracts, or (ii) upon determination
that its duties hereunder are no longer permissible under applicable law. Any
such determination under clause (ii) permitting the resignation of the
Servicer shall be evidenced by an Opinion of Counsel to such effect delivered
to the Trustee. No such resignation shall become effective until the Trustee
or a successor servicer shall have assumed the Servicer's responsibilities,
duties, liabilities and obligations hereunder.
SECTION 6.05 LIMITATION UPON LIABILITY OF THE CREDIT RISK MANAGER.
Neither the Credit Risk Manager, nor any of the directors, officers,
employees or agents of the Credit Risk Manager, shall be under any liability
to the Trustee, the Certificateholders or the Depositor for any action taken
or for refraining from the taking of any action in good faith pursuant to
this Agreement, in reliance upon information provided by the Servicer under
the Credit Risk Management Agreement or for errors in judgment; PROVIDED,
HOWEVER, that this provision shall not protect the Credit Risk Manager or any
such person against liability that would otherwise be imposed by reason of
willful malfeasance, bad faith or gross negligence in its performance of its
duties or by reason of reckless disregard for its obligations and duties
under this Agreement or the Credit Risk Management Agreement. The Credit
Risk Manager and any director, officer, employee or agent of the Credit Risk
Manager may rely in good faith on any document of any kind prima facie
properly executed and submitted by any Person respecting any matters arising
hereunder, and may rely in good faith upon the accuracy of information
furnished by the Servicer pursuant to the Credit Risk Management Agreement in
the performance of its duties thereunder and hereunder.
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ARTICLE VII
DEFAULT
SECTION 7.01 EVENTS OF DEFAULT.
(a) "Event of Default," wherever used herein, means any one of the following
events:
(i) any failure by the Servicer to make any deposit or payment required
pursuant to this Agreement (including but not limited to Advances to the
extent required under Section 4.01) which continues unremedied for a period
of one day after the date upon which written notice of such failure,
requiring the same to be remedied, 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 having not less than 25% of the Voting Rights
evidenced by the Certificates; or
(ii) any failure by the Servicer duly to observe or perform in any material
respect any other of the covenants or agreements on the part of the
Servicer set forth in this Agreement, or if any of the representations and
warranties of the Servicer in Section 2.03(a) proves to be untrue in any
material respect, which failure or breach continues unremedied for a period
of 60 days after the date on which written notice of such failure or
breach, requiring the same to be remedied, shall have been given to the
Servicer by the Trustee or the Depositor, or to the Servicer and the
Trustee by the Holders of Certificates having not less than 25% of the
Voting Rights evidenced by the Certificates, provided, however, that in the
case of a failure that cannot be cured within 60 days, the cure period may
be extended if the Servicer can demonstrate to the reasonable satisfaction
of the Trustee that the Servicer is diligently pursuing remedial action; or;
(iii) failure by the Servicer to maintain, if required, its license to do
business in any jurisdiction where the related Collateral is located; or
(iv) a decree or order of a court or agency or supervisory authority having
jurisdiction for the appointment of a conservator or receiver or liquidator
in any insolvency, readjustment of debt, including bankruptcy, marshaling
of assets and liabilities or similar proceedings, or for the winding-up or
liquidation of its affairs, shall have been entered against the Servicer
and such decree or order shall have remained in force undischarged or
unstayed for a period of 60 consecutive days; or
(v) the Servicer shall consent to the appointment of a conservator or
receiver or liquidator in any insolvency, readjustment of debt, marshaling
of assets and liabilities or similar proceedings of or relating to the
Servicer or of or relating to all or substantially all of its property; or
(vi) 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, bankruptcy or
reorganization statute, make an assignment for the benefit of its
creditors, voluntarily suspend payment of its obligations.
(b) Other than an Event of Default resulting from a failure of the Servicer
to make any required Advance, if an Event of Default shall occur and a
Responsible Officer of the Trustee has knowledge thereof, then, and in each
and every such case, so long as such Event of Default shall not have been
96
remedied, the Trustee may, or at the direction of the Holders of Certificates
evidencing not less than 51% of the Voting Rights evidenced by the
Certificates, the Trustee shall by notice in writing to the Servicer (with a
copy to each Rating Agency), terminate all of the rights and obligations of
the Servicer under this Agreement and in and to the related Contracts and the
proceeds thereof, other than its rights as a Certificateholder hereunder. If
an Event of Default results from the failure of the Servicer to make a
required Advance, the Trustee shall, by notice in writing to the Servicer and
the Depositor (with a copy to each Rating Agency), terminate all of the
rights and obligations of the Servicer under this Agreement and in and to the
related Contracts and the proceeds thereof, other than its rights as a
Certificateholder hereunder.
(c) Upon receipt by the Servicer of such written notice of termination, all
authority and power of the Servicer under this Agreement, whether with
respect to the related Contracts or otherwise, shall pass to and be vested in
the Trustee or its nominee, subject to Section 7.02. Upon written request
from the Trustee, the Servicer shall prepare, execute and deliver to the
successor entity designated by the Trustee any and all documents and other
instruments, place in such successor's possession all related Contract
Documents, and do or cause to be done all other acts or things necessary or
appropriate to effect the purposes of such notice of termination, including
but not limited to the transfer and endorsement or assignment of the related
Contracts and related documents, at the Servicer's sole expense. The Servicer
shall cooperate with the Trustee and such successor 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 a Collection Account or Escrow Account or thereafter
received with respect to the related Contracts. The Trustee or such other
successor servicer shall thereupon make any Advance required hereunder unless
prohibited by applicable law. The Trustee is hereby authorized and empowered
to execute and deliver, on behalf of the Servicer, as attorney-in-fact or
otherwise, any and all documents and other instruments, and to do or
accomplish all other acts or things necessary or appropriate to effect the
purposes of such notice of termination, whether to complete the transfer and
endorsement or assignment of the related Contracts and related documents, or
otherwise.
SECTION 7.02 TRUSTEE TO ACT; APPOINTMENT OF SUCCESSOR.
On and after the time the Servicer receives a notice of termination
pursuant to Section 7.01 of this Agreement, the Trustee shall, subject to and
to the extent provided herein, be the successor to the Servicer, but only in
its capacity as servicer under this Agreement, and not in any other and shall
be subject to all the responsibilities, duties and liabilities relating
thereto placed on the Servicer by the terms and provisions hereof and
applicable law including the obligation to make Advances pursuant to
Section 4.01. As compensation therefor, the Trustee shall be entitled to all
funds relating to the related Contracts that the Servicer would have been
entitled to charge to a Collection Account, provided that the terminated
Servicer shall nonetheless be entitled to payment or reimbursement as
provided in Section 3.07(a) to the extent that such payment or reimbursement
relates to the period prior to termination of the Servicer. Notwithstanding
the foregoing, if the Trustee has become the successor to the Servicer in
accordance with Section 7.01, the Trustee may, if it shall be unwilling to so
act, or shall, if it is prohibited by applicable law from making Advances
pursuant to 4.01 hereof, or if it is otherwise unable to so act, appoint, or
petition a court of competent jurisdiction to appoint, any established
mortgage loan servicing institution the appointment of which does not
adversely affect the then current rating of the Certificates by each Rating
Agency, as the successor to the Servicer hereunder in the assumption of all
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or any part of the responsibilities, duties or liabilities of the Servicer
hereunder. Any successor to the Servicer shall be an institution which has a
net worth of at least $10,000,000, which is willing to service the related
Contracts and which executes and delivers to the Depositor and the Trustee an
agreement accepting such delegation and assignment, containing an assumption
by such Person of the rights, powers, duties, responsibilities, obligations
and liabilities of the Servicer (other than liabilities of the Servicer under
Section 6.03 hereof incurred prior to termination of the Servicer under
Section 7.01 hereunder), with like effect as if originally named as a party
to this Agreement; provided that each Rating Agency acknowledges that its
rating of the Certificates in effect immediately prior to such assignment and
delegation will not be qualified or reduced as a result of such assignment
and delegation. Pending appointment of a successor to the Servicer hereunder,
the Trustee, unless the Trustee is prohibited by law from so acting, shall,
subject to the limitations described herein, act in such capacity as
hereinabove provided. In connection with such appointment and assumption, the
Trustee may make such arrangements for the compensation of such successor out
of payments on the related Contracts as it and such successor shall agree;
provided, however, that no such compensation shall be in excess of the
Servicing Fee. The Trustee and such successor shall take such action,
consistent with this Agreement, as shall be necessary to effectuate any such
succession. Neither the Trustee nor any other successor servicer shall be
deemed to be in default by reason of any failure to make, or any delay in
making, any distribution hereunder or any portion thereof or any failure to
perform, or any delay in performing, any duties or responsibilities
hereunder, in either case caused by the failure of the Servicer to deliver or
provide, or any delay in delivering or providing, any cash, information,
documents or records to it.
Any successor to the Servicer shall give notice to the Obligors of such
change of servicer and shall, during the term of its service as servicer,
maintain in force the policy or policies that the Servicer is required to
maintain pursuant to this Agreement.
SECTION 7.03 NOTIFICATION TO CERTIFICATEHOLDERS.
(a) Upon any termination of or appointment of a successor to the Servicer,
the Trustee shall give prompt written notice thereof to Certificateholders
and to each Rating Agency.
(b) Within 60 days after the occurrence of any Event of Default, the Trustee
shall transmit by mail to all Certificateholders notice of each such Event of
Default hereunder actually known to a Responsible Officer the Trustee, unless
such Event of Default shall have been cured or waived.
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ARTICLE VIII
CONCERNING THE TRUSTEE
SECTION 8.01 DUTIES OF THE TRUSTEE.
The Trustee, prior to the occurrence of an Event of Default and after
the curing or waiver of all Events of Default that may have occurred, shall
undertake to perform such duties and only such duties as are specifically set
forth in this Agreement. In case an Event of Default has occurred and remains
uncured and not waived, the Trustee shall exercise such of the rights and
powers vested in it by this Agreement, and use the same degree of care and
skill in their exercise as a prudent person would exercise or use under the
circumstances in the conduct of such person's own affairs.
The Trustee, upon receipt of all resolutions, certificates, statements,
opinions, reports, documents. orders or other instruments furnished to the
Trustee that are specifically required to be furnished pursuant to any
provision of this Agreement shall examine them to determine whether they are
in the form required by this Agreement; provided, however, that the Trustee
shall not be responsible for the accuracy or content of any such resolution,
certificate, statement, opinion, report, document, order or other instrument.
No provision of this Agreement shall be construed to relieve the Trustee
from liability for its own negligent action, its own grossly negligent
failure to act or its own willful misconduct; provided, however, that:
(i) unless an Event of Default actually known to the Trustee shall have
occurred and be continuing, the duties and obligations of the Trustee shall
be determined solely by the express provisions of this Agreement, the
Trustee shall not be liable except for the performance of such duties and
obligations as are specifically set forth in this Agreement, no implied
covenants or obligations shall be read into this Agreement against the
Trustee and the Trustee may conclusively rely, as to the truth of the
statements and the correctness of the opinions expressed therein, upon any
certificates or opinions furnished to the Trustee and conforming to the
requirements of this Agreement which it believed in good faith to be
genuine and to have been duly executed by the proper authorities respecting
any matters arising hereunder;
(ii) the Trustee shall not be liable for an error of judgment made in good
faith by a Responsible Officer or Responsible Officers of the Trustee,
unless it shall be finally proven that the Trustee was grossly negligent in
ascertaining the pertinent facts;
(iii) the Trustee shall not be liable with respect to any action taken,
suffered or omitted to be taken by it in good faith in accordance with the
direction of the Holders of Certificates evidencing not less than 25% of
the Voting Rights of Certificates relating to the time, method and place of
conducting any proceeding for any remedy available to the Trustee, or
exercising any trust or power conferred upon the Trustee under this
Agreement;
(iv) no provision of this Agreement shall require the Trustee to act as
Servicer or be responsible in any way for the acts or omissions of the
Servicer until such time as it acts as successor servicer pursuant to the
terms of this Agreement; and
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(v) the Trustee shall have no duty (A) (other than in its capacity as
successor servicer) to see to any recording, filing or depositing of this
Agreement or any agreement referred to herein or any financing statement or
continuation statement evidencing a security interest, or to see to the
maintenance of any such recording or filing or depositing of any thereof,
(B) (other than in its capacity as successor servicer)to see to any
insurance, (C) (other than with respect to Section 3.16 hereof) to see to
the payment or discharge of any tax, assessment, or other governmental
charge or any lien or encumbrance of any kind owing with respect to,
assessed or levied against, any part of the Trust Fund, (D) to confirm or
verify the contents of any certificates of the Servicer delivered to the
Trustee pursuant to this Agreement believed by the Trustee to be genuine
and to have been signed or presented by the appropriate party.
SECTION 8.02 CERTAIN MATTERS AFFECTING THE TRUSTEE.
Except as otherwise provided in Section 8.01:
(i) the Trustee may request and conclusively rely upon and shall be
protected in acting or refraining from acting upon any resolution,
Officer's Certificate, certificate of auditors or any other certificate,
statement, instrument, opinion, report, notice, request, consent, order,
appraisal, bond or other paper or document believed by it to be genuine and
to have been signed or presented by the proper party or parties and the
Trustee shall have no responsibility to ascertain or confirm the
genuineness of any signature of any such party or parties;
(ii) the Trustee may consult with counsel, financial advisers or accountants
and the advice of any such counsel, financial advisers or accountants and
any Opinion of Counsel shall be full and complete authorization and
protection in respect of any action taken or suffered or omitted by it
hereunder in good faith and in accordance with such advice or Opinion of
Counsel;
(iii) the Trustee shall not be liable for any action taken, suffered or
omitted by it in good faith and believed by it to be authorized or within
the discretion or rights or powers conferred upon it by this Agreement;
(iv) the Trustee shall not be bound to make any investigation into the facts
or matters stated in any resolution, certificate, statement, instrument,
opinion, report, notice, request, consent, order, approval, bond or other
paper or document, unless requested in writing so to do by Holders of
Certificates evidencing not less than 25% of the Voting Rights allocated to
each Class of Certificates;
(v) the Trustee may execute any of the trusts or powers hereunder or perform
any duties hereunder either directly or by or through agents, affiliates,
accountants or attorneys and the Trustee shall not be responsible for any
negligence or willful misconduct on the part of such agents, affiliates,
accountants or attorneys appointed by it with due care;
(vi) the Trustee shall not be required to risk or expend its own funds or
otherwise incur any financial liability in the performance of any of its
duties or in the exercise of any of its rights or powers hereunder if it
shall have reasonable grounds for believing that repayment of such funds or
adequate indemnity against such risk or liability is not assured to it;
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(vii) the Trustee shall not be liable for any loss on any investment of funds
pursuant to this Agreement (other than as issuer of the investment
security);
(viii) the Trustee shall not be deemed to have actual knowledge of an
Event of Default until a Responsible Officer of the Trustee shall have
received written notice thereof;
(ix) the Trustee shall be under no obligation to exercise any of the trusts,
rights or powers vested in it by this Agreement or to institute, conduct or
defend any litigation hereunder or in relation hereto at the request, order
or direction of any of the Certificateholders, pursuant to the provisions
of this Agreement, unless such Certificateholders shall have offered to the
Trustee reasonable security or indemnity satisfactory to the Trustee
against the costs, expenses and liabilities which may be incurred therein
or thereby;
(x) the rights of the Trustee to perform any discretionary act enumerated in
this Agreement shall not be construed as a duty, and the Trustee shall not
be answerable for other than its negligence or willful misconduct in the
performance of such act;
(xi) anything to the contrary in this Agreement notwithstanding, in no event
shall the Trustee be liable for special, indirect or consequential loss or
damage of any kind whatsoever (including, but not limited to, lost profits)
even if the Trustee has been advised of the likelihood of such loss or
damage and regardless of the form of action; and
(xii) the Trustee shall not be required to give any bond or surety in respect
of the execution of the Trust Fund created hereby or the powers granted
hereunder.
SECTION 8.03 TRUSTEE NOT LIABLE FOR CERTIFICATES OR CONTRACTS.
The recitals contained herein and in the Certificates shall not be taken
as the statements of the Trustee, and the Trustee assumes no responsibility
for their correctness. The Trustee makes no representations as to the
validity or sufficiency of this Agreement or of the Certificates or of any
Contract or related document other than with respect to the Trustee's
execution and authentication of the Certificates. The Trustee shall not be
accountable for the use or application by the Depositor or the Servicer of
any funds paid to the Depositor or the Servicer in respect of the Contracts
or deposited in or withdrawn from the Collection Account by the Depositor or
the Servicer.
SECTION 8.04 TRUSTEE MAY OWN CERTIFICATES.
The Trustee in its individual or any other capacity may become the owner
or pledgee of Certificates and may transact business with the Depositor, the
Seller, the Servicer and their affiliates, with the same rights as it would
have if it were not the Trustee.
SECTION 8.05 TRUSTEE'S FEES AND EXPENSES.
(a) The Trustee, as compensation for its activities hereunder, shall be
entitled to withdraw from the Certificate Account on each Distribution Date
prior to making distributions pursuant to Section 4.02 any investment income
or other benefit derived from balances in the Certificate Account for such
Distribution. Subject to the limitations set forth in Section 8.05(b), the
Trustee and any director, officer, employee or agent of the Trustee shall be
indemnified by the Seller and held harmless against any loss, liability or
expense (including reasonable attorney's fees and expenses) incurred in
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connection with any claim or legal action relating to (a) this Agreement or
the Custodial Agreement, (b) the Certificates, or (c) the performance of any
of the Trustee's duties hereunder or under the Custodial Agreement, other
than any loss, liability or expense incurred by reason of willful
misfeasance, bad faith or gross negligence in the performance of any of the
Trustee's duties hereunder or incurred by reason of any action of the Trustee
taken at the direction of the Certificateholders. Such indemnity shall
survive the termination of this Agreement or the resignation or removal of
the Trustee hereunder. Without limiting the foregoing, the Seller covenants
and agrees, subject to the limitation set forth in Section 8.05(b), and
except for any such expense, disbursement or advance as may arise from the
Trustee's gross negligence, bad faith or willful misconduct, to pay or
reimburse the Trustee, for all reasonable expenses, disbursements and
advances incurred or made by the Trustee in accordance with any of the
provisions of this Agreement with respect to: (A) the reasonable
compensation and the expenses and disbursements of its counsel not associated
with the closing of the issuance of the Certificates, (B) the reasonable
compensation, expenses and disbursements of any accountant, engineer or
appraiser that is not regularly employed by the Trustee, to the extent that
the Trustee must engage such persons to perform acts or services hereunder,
(C) printing and engraving expenses in connection with preparing any
Definitive Certificates and (D) any other reasonable expenses incurred other
than in the ordinary course of its business by the Trustee in connection with
its duties hereunder. Except as otherwise provided herein, the Trustee shall
not be entitled to payment or reimbursement for any routine ongoing expenses
incurred by the Trustee in the ordinary course of its duties as Trustee
hereunder or for any other expenses.
(b) Notwithstanding anything to the contrary in this Agreement, the Seller
shall not be obligated to pay to the Trustee more than, in the aggregate,
$150,000 pursuant to the second and third sentence of Section 8.05(a)
hereof. Other than as set forth in this Section 8.05, the Trustee shall not
be entitled to any other compensation or reimbursement for loss or expenses.
SECTION 8.06 ELIGIBILITY REQUIREMENTS FOR THE TRUSTEE.
The Trustee hereunder shall at all times be a corporation or association
organized and doing business under the laws of a state or the United States
of America, authorized under such laws to exercise corporate trust powers,
having a combined capital and surplus of at least $50,000,000, subject to
supervision or examination by federal or state authority and with a credit
rating which would not cause either of the Rating Agencies to reduce their
respective then current Ratings of the Certificates (or having provided such
security from time to time as is sufficient to avoid such reduction), as
evidenced in writing by each Rating Agency. If such corporation or
association publishes reports of condition at least annually, pursuant to law
or to the requirements of the aforesaid supervising or examining authority,
then for the proposes of this Section 8.06 the combined capital and surplus
of such corporation or association shall be deemed to be its combined capital
and surplus as set forth in its most recent report of condition so published.
1n case at any time the Trustee shall cease to be eligible in accordance with
the provisions of this Section 8.06, the Trustee shall resign immediately in
the manner and with the effect specified in Section 8.07. The entity serving
as Trustee may have normal banking and trust relationships with the
Depositor, the Seller or the Servicer and their affiliates; provided,
however, that such entity cannot be an affiliate of the Seller, the Depositor
or the Servicer other than the Trustee in its role as successor to the
Servicer.
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SECTION 8.07 RESIGNATION AND REMOVAL OF THE TRUSTEE.
The Trustee may at any time resign and be discharged from the trusts
hereby created by giving written notice of resignation to the Depositor, the
Seller, the Servicer, the Special Servicer and each Rating Agency not less
than 60 days before the date specified in such notice, when, subject to
Section 8.08, such resignation is to take effect, and acceptance by a
successor trustee in accordance with Section 8.08 meeting the qualifications
set forth in Section 8.06. If the Trustee gives notice of such resignation,
the Depositor shall promptly appoint a successor trustee. If no successor
trustee meeting such qualifications shall have been so appointed and have
accepted appointment within 30 days after the giving of such notice of
resignation or removal (as provided below), the resigning or removed Trustee
may petition any court of competent jurisdiction for the appointment of a
successor trustee.
If at any time the Trustee shall cease to be eligible in accordance with
the provisions of Section 8.06 and shall fail to resign after written request
thereto by the Depositor, or if at any time the Trustee shall become
incapable of acting, or shall be adjudged as bankrupt or insolvent, or a
receiver of the Trustee or of its property shall be appointed, or any public
officer shall take charge or control of the Trustee or of its property or
affairs for the purpose of rehabilitation, conservation or liquidation, or a
tax is imposed with respect to the Trust Fund by any state in which the
Trustee or the Trust Fund is located and the imposition of such tax would be
avoided by the appointment of a different trustee, then the Depositor may
remove the Trustee and appoint a successor trustee by written instrument, in
triplicate, one copy of which shall be delivered to the Trustee, one copy to
the Servicer and the Seller and one copy to the successor trustee.
The Holders of Certificates entitled to at least 51% of the Voting
Rights may at any time remove the Trustee and appoint a successor trustee by
written instrument or instruments, in triplicate, signed by such Holders or
their attorneys-in-fact duly authorized, one complete set of which shall be
delivered by the successor Trustee to the Depositor, the Servicer and the
Seller, one complete set to the Trustee so removed and one complete set to
the successor so appointed. Notice of any removal of the Trustee shall be
given to each Rating Agency by the successor trustee. All of the costs
incurred by the Trustee in connection with its removal without cause shall be
promptly reimbursed to it from the Trust Fund.
Any resignation or removal of the Trustee and appointment of a successor
trustee pursuant to any of the provisions of this Section 8.07 shall become
effective upon acceptance of appointment by the successor trustee as provided
in Section 8.08.
SECTION 8.08 SUCCESSOR TRUSTEE.
Any successor trustee appointed as provided in Section 8.07 shall
execute, acknowledge and deliver to the Depositor and to its predecessor
trustee, the Servicer and the Seller an instrument accepting such appointment
hereunder and thereupon the resignation or removal of the predecessor trustee
shall become effective and such successor trustee, without any further act,
deed or conveyance, shall become fully vested with all the rights, powers,
duties and obligations of its predecessor hereunder, with the like effect as
if originally named as trustee herein. The Depositor, the Servicer, the
Seller and the predecessor trustee shall execute and deliver such instruments
and do such other things as may reasonably be required for more fully and
certainly vesting and confirming in the successor trustee all such rights,
powers, duties, and obligations.
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No successor trustee shall accept appointment as provided in this
Section 8.08 unless at the time of such acceptance such successor trustee
shall be eligible under the provisions of Section 8.06 and its appointment
shall not adversely affect the then current rating of the Certificates.
Upon acceptance of appointment by a successor trustee as provided in
this Section 8.08, the Depositor shall mail notice of the succession of such
trustee hereunder to all Holders of Certificates. If the Depositor fails to
mail such notice within 10 days after acceptance of appointment by the
successor trustee, the successor trustee shall cause such notice to be mailed
at the expense of the Depositor.
SECTION 8.09 MERGER OR CONSOLIDATION OF THE TRUSTEE.
Any corporation into which the Trustee may be merged or converted or
with which it may be consolidated or any corporation resulting from any
merger, conversion or consolidation to which the Trustee shall be a party, or
any corporation succeeding to the business of the Trustee, shall be the
successor of the Trustee hereunder, provided that such corporation shall be
eligible under the provisions of Section 8.06 without the execution or filing
of any paper or further act on the part of any of the parties hereto,
anything herein to the contrary notwithstanding.
SECTION 8.10 APPOINTMENT OF CO-TRUSTEE OR SEPARATE TRUSTEE.
Notwithstanding any other provisions of this Agreement, at any time, for
the purpose of meeting any legal requirements of any jurisdiction in which
any part of the Trust Fund or property securing any Mortgage Note may at the
time be located, the Depositor and the Trustee acting jointly shall have the
power and shall execute and deliver all instruments to appoint one or more
Persons approved by the Trustee to act as co-trustee or co-trustees jointly
with the Trustee, or separate trustee or separate trustees, of all or any
part of the Trust Fund, and to vest in such Person or Persons, in such
capacity and for the benefit of the Certificateholders, such title to the
Trust Fund or any part thereof, whichever is applicable, and, subject to the
other provisions of this Section 8.10, such powers, duties, obligations,
rights and trusts as the Depositor and the Trustee may consider necessary or
desirable. If the Depositor shall not have joined in such appointment within
15 days after the receipt by it of a request to do so, or in the case an
Event of Default shall have occurred and be continuing, the Trustee alone
shall have the power to make such appointment. No co-trustee or separate
trustee hereunder shall be required to meet the terms of eligibility as a
successor trustee under Section 8.06 and no notice to Certificateholders of
the appointment of any co-trustee or separate trustee shall be required under
Section 8.08.
Every separate trustee and co-trustee shall, to the extent permitted by
law, be appointed and act subject to the following provisions and conditions:
(i) To the extent necessary to effectuate the purposes of this Section 8.10,
all rights, powers, duties and obligations conferred or imposed upon the
Trustee, except for the obligation of the Trustee in its capacity as
successor servicer under this Agreement to advance funds on behalf of 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), except to the
extent that under any law of any jurisdiction in which any particular set
or acts are to be performed (whether as Trustee hereunder or as successor
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to the Servicer hereunder), the Trustee shall be incompetent or unqualified
to perform such act or acts, in which event such rights, powers, duties and
obligations (including the holding of title to the applicable Trust Fund or
any portion thereof in any such jurisdiction) shall be exercised and
performed singly by such separate trustee or co-trustee, but solely at the
direction of the Trustee;
(ii) No trustee hereunder shall be held personally liable by reason of any
act or omission of any other trustee hereunder and such appointment shall
not, and shall not be deemed to, constitute any such separate trustee or
co-trustee as agent of the Trustee;
(iii) The Trustee may at any time accept the resignation of or remove any
separate trustee or co-trustee; and
(iv) The Depositor, and not the Trustee, shall be liable for the payment of
reasonable compensation, reimbursement and indemnification to any such
separate trustee or co-trustee.
Any notice, request or other writing given to the Trustee shall be
deemed to have been given to each of the separate trustees and co-trustees,
when and as effectively as if given to each of them. Every instrument
appointing any separate trustee or co-trustee shall refer to this Agreement
and the conditions of this Article VIII. Each separate trustee and
co-trustee, upon its acceptance of the trusts conferred, shall be vested with
the estates or property specified in its instrument of appointment, either
jointly with the Trustee or separately, as may be provided therein, subject
to all the provisions of this Agreement, specifically including every
provision of this Agreement relating to the conduct of, affecting the
liability of, or affording protection to, the Trustee. Every such instrument
shall be filed with the Trustee and a copy thereof given to the 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 8.11 PERIODIC FILINGS.
The Trustee shall, on behalf of the Trust, cause to be filed with the
Securities and Exchange Commission any periodic reports required to be filed
under the provisions of the Securities Exchange Act of 1934, as amended, and
the rules and regulations of the Securities and Exchange Commission
thereunder. In connection with the preparation and filing of such periodic
reports, the Depositor and the Servicer shall, upon the written request of
the Trustee, timely provide to the Trustee all material information
reasonably available to them which is requested by the Trustee for the
purpose of being included in such reports. The Trustee shall have no
liability with respect to any failure to properly prepare or file such
periodic reports resulting from or relating to the Trustee's inability or
failure to obtain any information not resulting from its own gross negligence
or willful misconduct.
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SECTION 8.12 TRUST OBLIGATIONS.
For all purposes herein, any and all rights, duties and obligations of
the Trustee on behalf of the Trust shall be the rights, duties and
obligations of the Trust itself, to be exercised or performed by the Trustee.
SECTION 8.13 INDEMNIFICATION WITH RESPECT TO CERTAIN TAXES AND LOSS OF
REMIC STATUS.
In the event that any REMIC fails to qualify as a REMIC, loses its
status as a REMIC, or incurs federal, state or local taxes as a result of a
prohibited transaction or prohibited contribution under the REMIC Provisions
due to the negligent performance by the Servicer of its duties and
obligations set forth herein, that Servicer shall indemnify the Trustee and
the Trust Fund against any and all losses, claims, damages, liabilities or
expenses ("Losses") resulting from such negligence; PROVIDED, HOWEVER, that
the Servicer shall not be liable for any such Losses attributable to the
negligence of the Trustee, the Depositor or the Holder of such Class R
Certificate, as applicable, nor for any such Losses resulting from
misinformation provided by the Holder of such Class R Certificate on which
the Servicer has relied. The foregoing shall not be deemed to limit or
restrict the rights and remedies of the Holder of such Class R Certificate
now or hereafter existing at law or in equity. Notwithstanding the foregoing,
however, in no event shall the Servicer have any liability (1) for any action
or omission that is taken in accordance with and in compliance with the
express terms of, or which is expressly permitted by the terms of, this
Agreement, (2) for any Losses other than arising out of a negligent
performance by the Servicer of its duties and obligations set forth herein,
and (3) for any special or consequential damages to Certificateholders (in
addition to payment of principal and interest on the Certificates).
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ARTICLE IX
TERMINATION
SECTION 9.01 TERMINATION UPON LIQUIDATION OR PURCHASE OF THE CONTRACTS.
(a) Subject to Section 9.03, the obligations and responsibilities of the
Depositor, the Seller, the Servicer, the Special Servicer and the Trustee
created hereunder with respect to the Trust Fund shall terminate upon the
earlier of (A) the purchase by the Special Servicer, in its sole option, of
all Contracts (Repossessed Collateral) remaining on any Distribution Date
after the Optional Termination Date at the price equal to the sum of (i) 100%
of the Stated Principal Balance of each Contract (other than in respect of
Repossessed Collateral) plus one month's accrued interest thereon at the
applicable Contract Rate and (ii) with respect to any Repossessed Collateral,
the lesser of (x) the appraised value of any Repossessed Collateral as
determined by the higher of two appraisals completed by two independent
appraisers selected by the Depositor at the expense of the Special Servicer
and (y) the Stated Principal Balance of each Contract related to any
Repossessed Collateral, plus accrued and unpaid interest thereon at the
applicable Contract Rate and (iii) any unreimbursed Advances, Servicing
Advances and Servicing Fees payable to the other Servicer which shall be
entitled to withdraw such amounts from the applicable Collection Account
pursuant to Section 3.07(a) and (B) the later of (i) the maturity or other
liquidation (or any Advance with respect thereto) of the last Contract
remaining in the Trust Fund and the disposition of all Repossessed Collateral
and (ii) the distribution to Certificateholders of all amounts required to be
distributed to them pursuant to this Agreement. In no event shall the trusts
created hereby continue beyond the expiration of 21 years from the death of
the survivor of the descendants of ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, the late Ambassador of
the United States to the Court of St. James's, living on the date hereof.
(b) If the Special Servicer elects to terminate the Trust Fund pursuant to
Section 9.01(a) above, the Special Servicer shall retain all servicing rights
with respect to the Contracts serviced by it. The Servicer or any successor
servicer and the Special Servicer shall enter into a servicing agreement
mutually acceptable to such parties, pursuant to which the Servicer or
successor servicer shall continue to service and administer Contracts
serviced by it in accordance with the customary and usual standards of
practice of prudent manufactured housing contract servicers which service
such manufactured housing contracts.
SECTION 9.02 FINAL DISTRIBUTION ON THE CERTIFICATES.
If on any Determination Date, the Trustee determines that there are no
outstanding Contracts and no other funds or asset in the Trust Fund other
than the funds in the Collection Accounts and Certificate Account, the
Trustee shall promptly send a final distribution notice to each
Certificateholder. If the Special Servicer elects to terminate the Trust Fund
pursuant to Section 9.01, at least 20 days prior to the date notice is to be
mailed to the affected Certificateholders, the Special Servicer shall notify
the Servicer and the Trustee of the date it intends to terminate the Trust
Fund and of the applicable repurchase price of the Contracts and REO
Properties.
Notice of any termination of the Trust Fund, specifying the Distribution
Date on which Certificateholders may surrender their Certificates for payment
of the final distribution and cancellation, shall be given promptly by the
Trustee by letter to Certificateholders mailed not earlier than the 15th day
and not later than the 25th day of the month next preceding the month of such
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final distribution. Any such notice shall specify (a) the Distribution Date
upon which final distribution on the Certificates will be made upon
presentation and surrender of Certificates at the office therein designated,
(b) the amount of such final distribution, (c) the location of the office or
agency at which such presentation and surrender must be made, and (d) that
the Record Date otherwise applicable to such Distribution Date is not
applicable, distributions being made only upon presentation and surrender of
the Certificates at the office therein specified. The Trustee shall give such
notice to each Rating Agency at the time such notice is given to
Certificateholders.
Upon presentation and surrender of the Certificates, the Trustee shall
cause to be distributed to the Certificateholders of each Class, in each case
on the final Distribution Date in proportion to their respective Percentage
Interests, with respect to Certificateholders of the same Class, an amount
equal to (i) as to each Class of Offered Certificates, (A) first to the
Class A Certificates, and then to the Class M-1, Class M-2, Class B-1 and
Class B-2 Certificates sequentially, in that order, an amount equal to the
Certificate Balance thereof plus the related Interest Distribution Amount and
(B) to the extent of available funds (other than funds described in clause
(ii) below) after the distributions in clause (i)(A) above, the amounts
referred to and in the order described in Section 4.02(c) and (ii) as to the
Class SB Certificates, the amount due to the Class SB Certificate under this
agreement, not paid (but in no way exceeding the amount in the Collection
Account).
In the event that any affected Certificateholders shall not surrender
Certificates for cancellation within six months after the date specified in
the above mentioned written notice, the Trustee shall give a second written
notice to the remaining Certificateholders to surrender their Certificates
for cancellation and receive the final distribution with respect thereto. If
within six months after the second notice all the applicable Certificates
shall not have been surrendered for cancellation, the Trustee may take
reasonable and appropriate steps, or may appoint an agent to take reasonable
and appropriate steps, to contact the remaining Certificateholders concerning
surrender of their Certificates, and the cost thereof shall be paid out of
the funds and other assets which remain a part of the Trust Fund. If within
one year after the second notice all Certificates shall not have been
surrendered for cancellation, the Class R Certificateholders shall be
entitled to all unclaimed funds and other assets of the Trust Fund which
remain subject hereto and the Trustee shall be discharged from all further
liability with respect to the Certificates and this Agreement.
SECTION 9.03 ADDITIONAL TERMINATION REQUIREMENTS.
(a) In the event the Special Servicer exercises its purchase option with
respect to the Contracts as provided in Section 9.01, at such time as the
Contracts are so purchased, the Trust Fund shall be terminated in accordance
with the following additional requirements, unless the Trustee has been
provided with an Opinion of Counsel, at the expense of the Special Servicer,
to the effect that the failure to comply with the requirements of this
Section 9.03 will not (i) result in the imposition of taxes on "prohibited
transactions" on any REMIC as defined in Section 860E of the Code, or (ii)
cause any REMIC to fail to qualify as a REMIC at any time that any
Certificates are outstanding:
(A) Within 90 days prior to the final Distribution Date set forth in the
notice given by the Trustee under Section 9.02, the Depositor shall
prepare and the Trustee shall adopt a plan of complete liquidation
within the meaning of Section 860F(a)(4) of the Code which, as evidenced
by an Opinion of Counsel (which opinion shall not be an expense of the
Trustee or the Trust Fund), meets the requirements of a qualified
liquidation;
108
(B) Within 90 days after the time of adoption of such a plan of complete
liquidation, the Trustee shall sell all of the Contracts to the Special
Servicer for cash in accordance with Section 9.01; and
(C) On the date specified for final payment of the Certificates, the Trustee
shall, after payment of any unreimbursed Advances, Servicing Advances,
Servicing Fees or other fee compensation payable to the Servicer
pursuant to this Agreement, make final distributions of principal and
interest on the Certificates in accordance with Section 4.02 and
distribute or credit, or cause to be distributed or credited, to the
Holders of the Residual Certificates all cash on hand after such final
payment (other than the cash retained to meet claims), and the Trust
Fund (and each REMIC) shall terminate at that time.
(b) The Trustee as agent for each REMIC hereby agrees to adopt and sign such
a plan of complete liquidation upon the written request of the Depositor, and
the receipt of the Opinion of Counsel referred to in Section 9.03(a)(1) and
to take such other action in connection therewith as may be reasonably
requested by the Depositor.
(c) By their acceptance of the Certificates, the Holders thereof hereby
authorize the Depositor to prepare and the Trustee to adopt and sign a plan
of complete liquidation.
109
ARTICLE X
MISCELLANEOUS PROVISIONS
SECTION 10.01 AMENDMENT.
This Agreement may be amended from time to time by the Depositor, the
Servicer, the Seller, the Special Servicer and the Trustee without the
consent of any of the Certificateholders (i) to cure any ambiguity or
mistake, (ii) to correct any defective provision herein or to supplement any
provision herein which may be inconsistent with any other provision herein,
(iii) provided that the affected party has agree in writing to such
amendment, to add to the duties or reduce the rights of the Depositor, the
Seller or the Servicer, (iv) in connection with the appointment of a
successor Servicer, to modify, eliminate or add to any of the servicing
provisions contained in this Agreement, providing the Rating Agencies confirm
the then current rating of the Certificates giving effect to such amendment,
(v) to add any other provisions with respect to matters or questions arising
hereunder or (vi) to modify, alter, amend, add to or rescind any of the terms
or provisions contained in this Agreement; and, provided, further, that any
action pursuant to clauses (v) or (vi) above shall not, as evidenced by an
Opinion of Counsel (which Opinion of Counsel shall not be an expense of the
Trustee or the Trust Fund, but shall be at the expense of the party proposing
such amendment), adversely affect in any material respect the interests of
any Certificateholder; provided, however, that no such Opinion of Counsel
shall be required if the Person requesting the amendment obtains a letter
from each Rating Agency stating that the amendment would not result in the
downgrading or withdrawal of the respective ratings then assigned to the
Certificates (without regard to the Guarantee Agreement). The Trustee, the
Depositor, the Seller and the Servicer also may at any time and from time to
time amend this Agreement without the consent of the Certificateholders to
modify, eliminate or add to any of its provisions to such extent as shall be
necessary or helpful to (i) maintain the qualification of any REMIC as a
REMIC under the Code, (ii) avoid or minimize the risk of the imposition of
any tax on any REMIC pursuant to the Code that would be a claim at any time
prior to the final redemption of the Certificates or (iii) comply with any
other requirements of the Code; provided, that the Trustee has been provided
an Opinion of Counsel, which opinion shall be an expense of the party
requesting such opinion but in any case shall not be an expense of the
Trustee or the Trust Fund, to the effect that such action is necessary or
helpful to, as applicable, (i) maintain such qualification, (ii) avoid or
minimize the risk of the imposition of such a tax or (iii) comply with any
such requirements of the Code.
This Agreement may also be amended from time to time by the Depositor,
the Servicer, the Special Servicer, the Seller and the Trustee with the
consent of the Holders of each Class of Certificates affected thereby
evidencing 66% of the Certificate Balance of such Class for the purpose of
adding any provisions to or changing in any manner or eliminating any of the
provisions of this Agreement or of modifying in any manner the rights of the
Holders of Certificates; provided, however, that no such amendment shall (i)
reduce in any manner the amount of, or delay the timing of, payments required
to be distributed on any Certificate without the consent of the Holder of
such Certificate, or (ii) reduce the aforesaid percentages of Certificates
the Holders of which are required to consent to any such amendment, without
the consent of the Holders of all such Certificates then outstanding.
Notwithstanding any contrary provision of this Agreement, the Trustee
shall not consent to any amendment to this Agreement unless it shall have
first received an Opinion of Counsel, which opinion shall not be an expense
110
of the Trustee or the Trust Fund, but shall be at the expense of the party
requesting such amendment, to the effect that such amendment will not cause
the imposition of any tax on any REMIC or the Certificateholders or cause any
REMIC to fail to qualify as a REMIC at any time that any Certificates are
outstanding.
Promptly after the execution of any amendment to this Agreement
requiring the consent of Certificateholders, the Trustee shall furnish
written notification of the substance or a copy of such amendment to each
Certificateholder and each Rating Agency.
It shall not be necessary for the consent of Certificateholders under
this Section 10.01 to approve the particular form of any proposed amendment,
but it shall be sufficient if such consent shall approve the substance
thereof. The manner of obtaining such consents and of evidencing the
authorization of the execution thereof by Certificateholders shall be subject
to such reasonable regulations as the Trustee may prescribe.
Nothing in this Agreement shall require the Trustee to enter into an
amendment without receiving an Opinion of Counsel (which Opinion shall not be
an expense of the Trustee or the Trust Fund), satisfactory to the Trustee
that (i) such amendment is permitted and is not prohibited by this Agreement
and that all requirements for amending this Agreement have been complied
with; and (ii) either (A) the amendment does not adversely affect in any
material respect the interests of any Certificateholder or (B) the conclusion
set forth in the immediately preceding clause (A) is not required to be
reached pursuant to this Section 10.01. The Trustee shall have no obligation
to consent to any amendment that it reasonably believes will materially and
adversely affect its rights or immunities under this Agreement.
Notwithstanding anything in this Section 10.01 to the contrary, this
Agreement (including Section 3.18 hereof) may not be amended, supplemented or
modified in any manner which may affect the rights, duties and obligations of
the Special Servicer hereunder without the consent of the Special Servicer.
SECTION 10.02 RECORDATION OF AGREEMENT; COUNTERPARTS.
This Agreement is subject to recordation in all appropriate public
offices for real property records in all the counties or other comparable
jurisdictions in which any or all of the properties subject to the Mortgages
are situated, and in any other appropriate public recording office or
elsewhere, such recordation to be effected by the Depositor at its expense,
but only upon direction by the Trustee (acting at the direction of holders of
Certificates evidencing a majority of the aggregate Certificate Balances of
the Certificates) accompanied by an Opinion of Counsel (at the Depositor's
expense) to the effect that such recordation materially and beneficially
affects the interests of the Certificateholders.
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.
111
SECTION 10.03 GOVERNING LAW.
THIS AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE
SUBSTANTIVE LAWS OF THE STATE OF NEW YORK APPLICABLE TO AGREEMENTS MADE AND
TO BE PERFORMED IN THE STATE OF NEW YORK AND THE OBLIGATIONS, RIGHTS AND
REMEDIES OF THE PARTIES HERETO AND THE CERTIFICATEHOLDERS SHALL BE DETERMINED
IN ACCORDANCE WITH SUCH LAWS.
SECTION 10.04 INTENTION OF PARTIES.
It is the express intent of the parties hereto that the conveyance of
the Trust Fund, including the Contracts, by the Depositor to the Trustee be,
and be construed as, an absolute sale thereof. It is, further, not the
intention of the parties that such conveyance be deemed a pledge thereof.
However, in the event that, notwithstanding the intent of the parties, such
assets are held to be the property of the Depositor, or if for any other
reason this Agreement is held or deemed to create a security interest in
either such assets, then (i) this Agreement shall be deemed to be a security
agreement within the meaning of the Uniform Commercial Code of the State of
New York and (ii) the conveyance provided for in this Agreement shall be
deemed to be an assignment and a grant by the Depositor to the Trustee, for
the benefit of the Certificateholders, of a security interest in all of the
assets transferred, whether now owned or hereafter acquired.
The Depositor for the benefit of the Certificateholders shall, to the
extent consistent with this Agreement, take such actions as may be necessary
to ensure that, if this Agreement were deemed to create a security interest
in the Trust Fund, such security interest would be deemed to be a perfected
security interest of first priority under applicable law and will be
maintained as such throughout the term of the Agreement. The Depositor shall
arrange for filing any Uniform Commercial Code continuation statements in
connection with any security interest granted by the Depositor to the Trustee
for the benefit of the Certificateholders.
SECTION 10.05 NOTICES.
The Trustee shall use its best efforts to promptly provide notice to
each Rating Agency with respect to each of the following of which it has
actual knowledge:
(a) Any material change or amendment to this Agreement;
(b) The occurrence of any Event of Default that has not been cured;
(c) The resignation or termination of the Servicer or the Trustee and
the appointment of any successor;
(d) The repurchase or substitution of Contracts pursuant to Sections
2.02 and 2.03; and
(e) The final payment to Certificateholders.
112
In addition, the Trustee shall promptly furnish to each Rating Agency
copies of the following:
(a) Each report to Certificateholders described in Section 4.04;
(b) Each annual independent public accountants' servicing report described
in Section 3.15; and
(c) Any notice of a purchase of a Contract pursuant to Section 2.02, 2.03
or 3.09.
All directions, demands and notices hereunder shall be in writing and
shall be deemed to have been duly given when delivered to (i) in the case of
the Depositor, ▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇,
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ (with a copy to Credit Suisse First Boston
Mortgage Securities Corp., ▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇
▇▇▇▇▇, Attention: Office of the General Counsel), (ii) in the case of the
Trustee, at the Corporate Trust Office or such other address as the Trustee
may hereafter furnish to the Depositor and the Servicer, (iii) in the case of
each of the Rating Agencies, the address specified therefor in the definition
corresponding to the name of such Rating Agency, (iv) in the case of the
Seller, ▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention:
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, (v) in the case of the Servicer, ▇ ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇,
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ Attention; Chief Financial Officer (with a copy to Tyco
Capital Corporation, ▇ ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ Attention:
General Counsel) and (vi) in the case of the Special Servicer, Olympus
Servicing, L.P. ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇-▇, ▇▇▇▇▇▇, ▇▇▇▇▇, ▇▇▇▇▇,
Attention: ▇▇▇▇ ▇▇▇▇. Notices to Certificateholders shall be deemed given
when mailed, first class postage prepaid, to their respective addresses
appearing in the Certificate Register.
SECTION 10.06 SEVERABILITY OF PROVISIONS.
If any one or more of the covenants, agreements, provisions or terms of
this Agreement shall be for any reason whatsoever held invalid, then such
covenants, agreements, provisions or terms shall be deemed severable from the
remaining covenants, agreements, provisions or terms of this Agreement and
shall in no way affect the validity or enforceability of the other provisions
of this Agreement or of the Certificates or the rights of the Holders thereof.
SECTION 10.07 ASSIGNMENT.
Notwithstanding anything to the contrary contained herein, except as
provided in Sections 6.02 and 6.04, this Agreement may not be assigned by the
Servicer without the prior written consent of the Trustee and Depositor.
SECTION 10.08 LIMITATION ON RIGHTS OF CERTIFICATEHOLDERS.
The death or incapacity of any Certificateholder shall not operate to
terminate this Agreement or the trust created hereby, nor entitle such
Certificateholder's legal representative or heirs to claim an accounting or
to take any action or commence any proceeding in any court for a petition or
winding up of the trust created hereby, or otherwise affect the rights,
obligations and liabilities of the parties hereto or any of them.
113
No Certificateholder shall have any right to vote (except as provided
herein) or in any manner otherwise control the operation and management of
the Trust Fund, or the obligations of the parties hereto, nor shall anything
herein set forth or contained in the terms of the Certificates be construed
so as to constitute the Certificateholders from time to time as partners or
members of an association; nor shall any Certificateholder be under any
liability to any third party by reason of any action taken by the parties to
this Agreement pursuant to any provision hereof.
No Certificateholder shall have any right by virtue or by availing
itself of any provisions of this Agreement to institute any suit, action or
proceeding in equity or at law upon or under or with respect to this
Agreement, unless such Holder previously shall have given to the Trustee a
written notice of an Event of Default and of the continuance thereof, as
herein provided, and unless the Holders of Certificates evidencing not less
than 25% of the Voting Rights evidenced by the Certificates shall also have
made written request to the Trustee to institute such action, suit or
proceeding in its own name as Trustee hereunder and shall have offered to the
Trustee such reasonable indemnity as it may require against the costs,
expenses, and liabilities to be incurred therein or thereby, and the Trustee,
for 60 days after its receipt of such notice, request and offer of indemnity
shall have neglected or refused to institute any such action, suit or
proceeding; it being understood and intended, and being expressly covenanted
by each Certificateholder with every other Certificateholder and the Trustee,
that no one or more Holders of Certificates shall have any right in any
manner whatever by virtue or by availing itself or themselves of any
provisions of this Agreement to affect, disturb or prejudice the rights of
the Holders of any other of the Certificates, or to obtain or seek to obtain
priority over or preference to any other such Holder or to enforce any right
under this Agreement, except in the manner herein provided and for the common
benefit of all Certificateholders. For the protection and enforcement of the
provisions of this Section 10.08, each and every Certificateholder and the
Trustee shall be entitled to such relief as can be given either at law or in
equity.
SECTION 10.09 CERTIFICATES NONASSESSABLE AND FULLY PAID.
It is the intention of the Depositor that Certificateholders shall not
be personally liable for obligations of the Trust Fund, that the interests in
the Trust Fund represented by the Certificates shall be nonassessable for any
reason whatsoever, and that the Certificates, upon due authentication thereof
by the Trustee pursuant to this Agreement, are and shall be deemed fully paid.
SECTION 10.10 PURPOSES AND POWERS OF THE TRUST FUND.
The purpose of the trust, as created hereunder, is to engage in the
following activities:
(a) to sell the Certificates to the Depositor in exchange for the
Contracts;
(b) to enter into and perform its obligations under this Agreement;
(c) to engage in those activities that are necessary, suitable or
convenient to accomplish the foregoing or are incidental thereto or connected
therewith; and
(d) subject to compliance with this Agreement, to engage in such other
activities as may be required in connection with conservation of the Trust
Fund and the making of distributions to the Certificateholders.
114
The trust is hereby authorized to engage in the foregoing activities.
The trust shall not engage in any activity other than in connection with the
foregoing or other than as required or authorized by the terms of this
Agreement while any Certificate is outstanding without the consent of the
Certificateholders evidencing a majority of the aggregate Voting Rights of
the Certificates.
115
IN WITNESS WHEREOF, the Depositor, the Trustee, the Servicer, the Seller
and the Special Servicer have caused their names to be signed hereto by their
respective officers thereunto duly authorized as of the day and year first
above written.
CREDIT SUISSE FIRST BOSTON MORTGAGE SECURITIES
CORP.,
as Depositor
By:
-------------------------------
Name:
Title:
JPMORGAN CHASE BANK,
not in its individual capacity but
solely as
Trustee
By:
-------------------------------
Name:
Title:
THE CIT GROUP/SALES FINANCING, INC.,
as the Servicer
By:
-------------------------------
Name:
Title:
DLJ MORTGAGE CAPITAL, INC.,
as the Seller
By:
-------------------------------
Name:
Title:
OLYMPUS SERVICING, L.P.,
as the Special Servicer
By:
-------------------------------
Name:
Title:
STATE OF NEW YORK )
: ss.:
COUNTY OF NEW YORK )
On this ___ day of April, 2002, before me, personally appeared ▇▇▇▇
▇▇▇▇▇▇▇, known to me to be a Vice President of Credit Suisse First Boston
Mortgage Securities Corp., a Delaware corporation, 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 this ___ day of April, 2002, before me, personally appeared
____________, known to me to be a _______ of Olympus Servicing, L.P.., a
Delaware limited partnership, one of the limited partnerships that executed
the within instrument, and also known to me to be the person who executed it
on behalf of said limited partnership, 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 [ ])
: ss.:
COUNTY OF [ ])
On the ___ day of April, 2002, before me, personally appeared
__________, known to me to be a _________________ of The CIT Group/Sales
Financing, Inc. a Delaware corporation, 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 )
: ss.:
STATE OF NEW YORK )
: ss.:
COUNTY OF NEW YORK )
On the ____ of April, 2002 before me, a Notary Public in and for said
State, personally appeared ______________ known to me to be a _____________
of JPMorgan Chase Bank, a New York corporation that executed the within
instrument and also known to me to be the person who executed it on behalf of
said corporation, and acknowledged to me that such corporation executed the
within instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official
seal the day and year in this certificate first above written.
-------------------------------
Notary Public
[NOTARIAL SEAL]
STATE OF DELAWARE )
: ss.:
COUNTY OF [ ] )
On the ____ of April, 2002 before me, a Notary Public in and for said
State, personally appeared ▇▇▇▇▇ ▇▇▇▇, known to me to be a Vice President of
DLJ Mortgage Corporation, a Delaware corporation that executed the within
instrument and also known to me to be the person who executed it on behalf of
said corporation, and acknowledged to me that such corporation executed the
within instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official
seal the day and year in this certificate first above written.
-------------------------------
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 INTERNAL REVENUE CODE OF
1986.
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO ISSUER OR ITS AGENT
FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT, AND ANY CERTIFICATE ISSUED
IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY
AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO
SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY
TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON
IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST
HEREIN.
Certificate No. : [___]
Cut-off Date : March 24, 2002
First Distribution Date : May 28, 2002
Initial Certificate Principal Balance
of this Certificate ("Denomination") : $[_______________]
Initial Certificate Principal Balances of
all Certificates of this Class : $79,320,000
CUSIP : 22540V VB 5
Pass-Through Rate The lesser of (i) 6.70%
plus, if the Contracts are
not purchased on the
Distribution Date
succeeding the Option
Termination Date, 0.50% and
(ii) the Net Funds Cap.
Maturity Date : December : 25, 2031
CREDIT SUISSE FIRST BOSTON MORTGAGE SECURITIES CORP.
CSFB ABS Trust Series 2002-MH3
CSFB Manufactured Housing Contract Pass-Through Certificates, Series 2002-MH3,
Class A
evidencing a percentage interest in the distributions allocable to the
Class A Certificates with respect to a Trust Fund consisting primarily of a
pool of fixed rate manufactured home loans and installment sales contracts
(the "Contracts") formed and sold by Credit Suisse First Boston Mortgage
Securities Corp.
Principal in respect of this Certificate is distributable monthly as set
forth herein. Accordingly, the Certificate Principal Balance at any time may be
less than the Certificate Principal Balance as set forth herein. This
Certificate does not evidence an obligation of, or an interest in, and is not
guaranteed by the Depositor, the Seller, the Servicer, the Special Servicer or
the Trustee referred to below or any of their respective affiliates. Neither
this Certificate nor the Contracts are guaranteed or insured by any governmental
agency or instrumentality.
This certifies that CEDE & CO. is the registered owner of the Percentage
Interest evidenced by this Certificate (obtained by dividing the denomination of
this Certificate by the aggregate of the denominations of all Certificates of
the Class to which this Certificate belongs) in certain monthly distributions
with respect to a Trust Fund consisting primarily of the Contracts deposited by
Credit Suisse First Boston Mortgage Securities Corp. (the "Depositor"). The
Trust Fund was created pursuant to a Pooling and Servicing Agreement dated as of
March 24, 2002 specified above (the "Agreement") among the Depositor, The CIT
Group/Sales Financing, Inc., as servicer (the "Servicer"), DLJ Mortgage Capital,
Inc., as seller (the "Seller"), Olympus Servicing, L.P., as special servicer
(the "Special Servicer") and JPMorgan Chase Bank, as trustee (the "Trustee"). To
the extent not defined herein, the capitalized terms used herein have the
meanings assigned in the Agreement. This Certificate is issued under and is
subject to the terms, provisions and conditions of the Agreement, to which
Agreement the Holder of this Certificate by virtue of the acceptance hereof
assents and by which such Holder is bound.
This Certificate shall not be entitled to any benefit under the Agreement
or be valid for any purpose unless manually countersigned by an authorized
signatory of the Trustee.
This Certificate does not purport to summarize the Agreement and reference
is made to the Agreement for the interests, rights and limitations of rights,
benefits, obligations and duties evidenced thereby, and the rights, duties and
immunities of the Trustee.
Pursuant to the terms of the Agreement, a distribution will be made on the
25th day of each month, or, if such 25th day is not a Business Day, the Business
Day immediately following (the "Distribution Date"), commencing on the first
Distribution Date specified on the face hereof, to the Person in whose name this
Certificate is registered at the close of business on the last Business Day of
the calendar month immediately preceding the Distribution Date (the "Record
Date") in an amount equal to the product of the Percentage Interest evidenced by
this Certificate and the amount required to be distributed to Holders of
Certificates of the Class to which this Certificate belongs on such Distribution
Date pursuant to the Agreement.
Distributions on this Certificate shall be made by wire transfer of
immediately available funds to the account of the Holder hereof at a bank or
other entity having appropriate facilities therefor. The final distribution on
each Certificate will be made in like manner, but only upon presentment and
surrender of such Certificate at the Corporate Trust Office or such other
location specified in the notice to Certificateholders of such final
distribution.
This Certificate is one of a duly authorized issue of Certificates issued
in several Classes designated as CSFB Manufactured Housing Contract Pass-Through
Certificates of the Series specified hereon (herein collectively called the
"Certificates").
The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Trustee and the rights of the Certificateholders under the Agreement at any time
by the Depositor, the Servicer, the Special Servicer, the Seller and the Trustee
with the consent of the Holders of Certificates affected by such amendment
evidencing the requisite Percentage Interest, as provided in the Agreement. Any
such consent by the Holder of this Certificate shall be conclusive and binding
on such Holder and upon all future Holders of this Certificate and of any
Certificate issued upon the transfer hereof or in exchange therefor or in lieu
hereof whether or not notation of such consent is made upon this Certificate.
The Agreement also permits the amendment thereof, in certain limited
circumstances, without the consent of the Holders of any of the Certificates.
As provided in the Agreement and subject to certain limitations therein set
forth, the transfer of this Certificate is registrable in the Certificate
Register of the Trustee upon surrender of this Certificate for registration of
transfer at the Corporate Trust Office or the office or agency maintained by the
Trustee in New York, New York, accompanied by a written instrument of transfer
in form satisfactory to the Trustee and the Certificate Registrar duly executed
by the holder hereof or such holder's attorney duly authorized in writing, and
thereupon one or more new Certificates of the same Class in authorized
denominations and evidencing the same aggregate Percentage Interest in the Trust
Fund will be issued to the designated transferee or transferees.
The Certificates are issuable only as registered Certificates without
coupons in denominations specified in the Agreement. As provided in the
Agreement and subject to certain limitations therein set forth, Certificates are
exchangeable for new Certificates of the same Class in authorized denominations
and evidencing the same aggregate Percentage Interest, as requested by the
Holder surrendering the same.
No service charge will be made for any such registration of transfer or
exchange, but the Trustee may require payment of a sum sufficient to cover any
tax or other governmental charge payable in connection therewith.
The Servicer, the Depositor, the Special Servicer and the Trustee and any
agent of the Servicer, the Depositor, the Special Servicer or the Trustee may
treat the Person in whose name this Certificate is registered as the owner
hereof for all purposes, and none of the Servicer, the Depositor, the Trustee,
or any such agent shall be affected by any notice to the contrary.
On any Distribution Date on which the aggregate Stated Principal Balance of
the Contracts is less than 10% of the Aggregate Contract Balance as of the
Cut-off Date, the Special Servicer will have the option to repurchase, in whole,
from the Trust Fund all remaining Contracts and all property acquired in respect
of the Contracts at a purchase price determined as provided in the Agreement. In
the event that no such optional termination occurs, the obligations and
responsibilities created by the Agreement will terminate upon the later of the
maturity or other liquidation (or any advance with respect thereto) of the last
Contract remaining in the Trust Fund or the disposition of all property in
respect thereof and the distribution to Certificateholders of all amounts
required to be distributed pursuant to the Agreement. In no event, however, will
the trust created by the Agreement continue beyond the expiration of 21 years
from the death of the last survivor of the descendants living at the date of the
Agreement of a certain person named in the Agreement.
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.
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly
executed.
Dated: April 11, 2002.
JPMORGAN CHASE BANK,
as Trustee
By:_________________________________________
Name:
Title:
CERTIFICATE OF AUTHENTICATION
This is one of the Certificates referred to in the within-mentioned
Agreement.
Date: April 11, 2002
JPMORGAN CHASE BANK,
as Trustee
By: _______________________________
Authorized Signatory
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(Please print or typewrite name and address including postal zip code of
assignee)
the Percentage Interest evidenced by the within Certificate and hereby
authorizes the transfer of registration of such Percentage Interest to assignee
on the Certificate Register of the Trust Fund.
I (We) further direct the Trustee to issue a new Certificate of a like
denomination and Class, to the above named assignee and deliver such Certificate
to the following address:
--------------------------------------------------------------------------------
Dated:
________________________________________
Signature by or on behalf of assignor
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of distribution:
Distributions shall be made, by wire transfer or otherwise, in immediately
available funds to ____________________________________________________________,
for the account of ____________________________________________________________,
account number ___________, or, if mailed by check, to _________________________
________________________________________________________________________________
________________________________________________________________________________
_______________________________________________________________________________.
Applicable statements should be mailed to ______________________________________
________________________________________________________________________________
_______________________________________________________________________________.
This information is provided by, the assignee named above, or, as its agent.
EXHIBIT B
FORM OF CLASS [M-1][M-2][B-1] CERTIFICATE
THIS CERTIFICATE IS SUBORDINATED IN RIGHT OF PAYMENT TO THE SENIOR CERTIFICATES
[CLASS M-1 CERTIFICATES] [AND CLASS M-2 CERTIFICATES] AS DESCRIBED IN THE
AGREEMENT (AS DEFINED BELOW).
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A "REGULAR
INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT," AS THOSE TERMS ARE
DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL REVENUE CODE OF
1986 (THE "CODE").
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO ISSUER OR ITS AGENT
FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT, AND ANY CERTIFICATE ISSUED
IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY
AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO
SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY
TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON
IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST
HEREIN.
Any Transferee of this Certificate will be deemed to have represented by virtue
of its purchase or holding of this Certificate (or interest herein) that EITHER
(a) such Transferee is not A PLAN AND IS NOT 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 (a "plan
investor"), (B) it has acquired and is holding such Certificate in reliance on
Prohibited Transaction Exemption ("PTE") 89-90, 59 Fed. Reg. 42597 (October 17,
1989), as amended by PTE 97-34, 62 Fed. Reg. 39021 (July 21, 1997), and PTE
2000-58, 65 Fed. Reg. 67765 (November 13, 2000) (the "Exemption"), and that
understands that there are certain conditions to the availability of the
Exemption including that such Certificate must be rated, at the time of
purchase, not lower than "BBB-" (or its equivalent) by Standard & Poor's, Fitch
or Moody's or (C) (I) the transferee is an insurance company, (II) the source of
funds to be used by it to purchase the Certificate is an "insurance company
general account" (within the meaning of Department of Labor Prohibited
Transaction Class Exemption ("PTCE") 95-60), and (iii) the CONDITIONS SET FORTH
IN SECTIONS I AND III OF PTCE 95-60 HAVE BEEN SATISFIED.
If this Certificate (OR ANY INTEREST HEREIN) IS ACQUIRED OR HELD BY ANY PERSON
THAT DOES NOT SATISFY THE CONDITIONS DESCRIBED IN THE PRECEDING PARAGRAPH, THEN
THE LAST preceding Transferee that either (i) is not a Plan Investor, (II)
ACQUIRED SUCH CERTIFICATE IN COMPLIANCE WITH THE EXEMPTION, or (iiI) is a
Complying Insurance Company shall be restored, to the extent permitted by law,
to all rights and obligations as Certificate Owner thereof retroactive to the
date of such Transfer of this Certificate. The Trustee shall be under no
liability to any Person for making any payments due on this Certificate to such
preceding Transferee.
Any purported Certificate Owner whose acquisition or holding of this Certificate
(or interest herein) was effected in violation of the restrictions in Section
5.02(c) of the Pooling and Servicing Agreement shall indemnify and hold harmless
the Depositor, the Trustee, the Servicer, any Subservicer, and the Trust Fund
from and against any and all liabilities, claims, costs or expenses incurred by
such parties as a result of such acquisition or holding.
Certificate No. : [___]
Cut-off Date : March 24, 2002
First Distribution Date : May 28, 2002
Initial Certificate Principal Balance of [____________]
this Certificate ("Denomination") :
Initial Certificate Principal Balances of [____________]
all Certificates of this Class :
CUSIP : [22540V VE 9]
[22540V VF 6]
[22540V VG 4]
Interest Rate : The lesser of (i)
[_____]% and (ii) the
Net Funds Cap.
Maturity Date : December 25, 2031
CREDIT SUISSE FIRST BOSTON MORTGAGE SECURITIES CORP.
CSFB ABS Trust Series 2002-MH3
CSFB Manufactured Housing Contract Pass-Through Certificates, Series 2002-MH3,
Class [M[-1][-2]][B-1]
evidencing a percentage interest in the distributions allocable to the
Class M[-1][-2] [B-1]Certificates with respect to a Trust Fund consisting
primarily of a pool of fixed rate manufactured home loans and installment
sales contracts (the "Contracts") formed and sold by Credit Suisse First
Boston Mortgage Securities Corp.
Principal in respect of this Certificate is distributable monthly as set
forth herein. Accordingly, the Certificate Principal Balance at any time may be
less than the Certificate Principal Balance as set forth herein. This
Certificate does not evidence an obligation of, or an interest in, and is not
guaranteed by the Depositor, the Seller, the Servicer, the Special Servicer or
the Trustee referred to below or any of their respective affiliates. Neither
this Certificate nor the Contracts are guaranteed or insured by any governmental
agency or instrumentality.
This certifies that CEDE & CO. is the registered owner of the Percentage
Interest evidenced by this Certificate (obtained by dividing the denomination of
this Certificate by the aggregate of the denominations of all Certificates of
the Class to which this Certificate belongs) in certain monthly distributions
with respect to a Trust Fund consisting primarily of the Contracts deposited by
Credit Suisse First Boston Mortgage Securities Corp. (the "Depositor"). The
Trust Fund was created pursuant to a Pooling and Servicing Agreement dated as of
March 24, 2002 specified above (the "Agreement") among the Depositor, The CIT
Group/Sales Financing, Inc., as servicer (the "Servicer"), DLJ Mortgage Capital,
Inc., as seller (the "Seller"), Olympus Servicing, L.P. as special servicer (the
"Special Servicer") and JPMorgan Chase Bank, as trustee (the "Trustee"). To the
extent not defined herein, the capitalized terms used herein have the meanings
assigned in the Agreement. This Certificate is issued under and is subject to
the terms, provisions and conditions of the Agreement, to which Agreement the
Holder of this Certificate by virtue of the acceptance hereof assents and by
which such Holder is bound.
Pursuant to the terms of the Agreement, a distribution will be made on the
25th day of each month, or, if such 25th day is not a Business Day, the Business
Day immediately following (the "Distribution Date"), commencing on the first
Distribution Date specified on the face hereof, to the Person in whose name this
Certificate is registered at the close of business on the last Business Day of
the calendar month immediately preceding the Distribution Date (the "Record
Date") in an amount equal to the product of the Percentage Interest evidenced by
this Certificate and the amount required to be distributed to Holders of
Certificates of the Class to which this Certificate belongs on such Distribution
Date pursuant to the Agreement.
Distributions on this Certificate shall be made by wire transfer of
immediately available funds to the account of the Holder hereof at a bank or
other entity having appropriate facilities therefor. The final distribution on
each Certificate will be made in like manner, but only upon presentment and
surrender of such Certificate at the Corporate Trust Office or such other
location specified in the notice to Certificateholders of such final
distribution.
This Certificate is one of a duly authorized issue of Certificates issued
in several Classes designated as CSFB Manufactured Housing Contract Pass-Through
Certificates of the Series specified hereon (herein collectively called the
"Certificates").
The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Trustee and the rights of the Certificateholders under the Agreement at any time
by the Depositor, the Servicer, the Special Servicer, the Seller and the Trustee
with the consent of the Holders of Certificates affected by such amendment
evidencing the requisite Percentage Interest, as provided in the Agreement. Any
such consent by the Holder of this Certificate shall be conclusive and binding
on such Holder and upon all future Holders of this Certificate and of any
Certificate issued upon the transfer hereof or in exchange therefor or in lieu
hereof whether or not notation of such consent is made upon this Certificate.
The Agreement also permits the amendment thereof, in certain limited
circumstances, without the consent of the Holders of any of the Certificates.
As provided in the Agreement and subject to certain limitations therein set
forth, the transfer of this Certificate is registrable in the Certificate
Register of the Trustee upon surrender of this Certificate for registration of
transfer at the Corporate Trust Office or the office or agency maintained by the
Trustee in New York, New York, accompanied by a written instrument of transfer
in form satisfactory to the Trustee and the Certificate Registrar duly executed
by the holder hereof or such holder's attorney duly authorized in writing, and
thereupon one or more new Certificates of the same Class in authorized
denominations and evidencing the same aggregate Percentage Interest in the Trust
Fund will be issued to the designated transferee or transferees.
The Certificates are issuable only as registered Certificates without
coupons in denominations specified in the Agreement. As provided in the
Agreement and subject to certain limitations therein set forth, Certificates are
exchangeable for new Certificates of the same Class in authorized denominations
and evidencing the same aggregate Percentage Interest, as requested by the
Holder surrendering the same.
No service charge will be made for any such registration of transfer or
exchange, but the Trustee may require payment of a sum sufficient to cover any
tax or other governmental charge payable in connection therewith.
The Servicer, the Depositor, the Special Servicer and the Trustee and any
agent of the Servicer, the Depositor, the Special Servicer or the Trustee may
treat the Person in whose name this Certificate is registered as the owner
hereof for all purposes, and none of the Servicer, the Depositor, the Trustee,
or any such agent shall be affected by any notice to the contrary.
On any Distribution Date on which the aggregate Stated Principal Balance of
the Contracts is less than 10% of the Aggregate Contract Balance as of the
Cut-off Date, the Special Servicer will have the option to repurchase, in whole,
from the Trust Fund all remaining Contracts and all property acquired in respect
of the Contracts at a purchase price determined as provided in the Agreement. In
the event that no such optional termination occurs, the obligations and
responsibilities created by the Agreement will terminate upon the later of the
maturity or other liquidation (or any advance with respect thereto) of the last
Contract remaining in the Trust Fund or the disposition of all property in
respect thereof and the distribution to Certificateholders of all amounts
required to be distributed pursuant to the Agreement. In no event, however, will
the trust created by the Agreement continue beyond the expiration of 21 years
from the death of the last survivor of the descendants living at the date of the
Agreement of a certain person named in the Agreement.
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.
[Remainder of page intentionally left blank]
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly
executed.
Dated: April 11, 2002.
JPMORGAN CHASE BANK,
as Trustee
By:________________________________________
Name:
Title:
CERTIFICATE OF AUTHENTICATION
This is one of the Certificates referred to in the within-mentioned
Agreement.
Date: April 11, 2002
JPMORGAN CHASE BANK,
as Trustee
By: _______________________________
Authorized Signatory
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto _______________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(Please print or typewrite name and address including postal zip code of
assignee)
the Percentage Interest evidenced by the within Certificate and hereby
authorizes the transfer of registration of such Percentage Interest to assignee
on the Certificate Register of the Trust Fund.
I (We) further direct the Trustee to issue a new Certificate of a like
denomination and Class, to the above named assignee and deliver such Certificate
to the following address:
________________________________________________________________________________
Dated:
________________________________________
Signature by or on behalf of assignor
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of distribution:
Distributions shall be made, by wire transfer or otherwise, in immediately
available funds to , for the account of
________________________________________________________________________________
account number ___________, or, if mailed by check, to
________________________________________________________________________________
________________________________________________________________________________
_______________________________________________________________________________.
Applicable statements should be mailed to
________________________________________________________________________________
________________________________________________________________________________
_______________________________________________________________________________.
This information is provided by, the assignee named above, or, as its agent.
EXHIBIT C
FORM OF CLASS B-2 CERTIFICATE
THIS CERTIFICATE IS SUBORDINATED IN RIGHT OF PAYMENT TO THE SENIOR CERTIFICATES
AND CLASS M CERTIFICATES AND CLASS B-1 CERTIFICATES] DESCRIBED IN THE AGREEMENT
(AS DEFINED HEREIN).
THIS CERTIFICATE HAS NOT BEEN AND WILL NOT BE REGISTERED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED, 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 WHICH ARE EXEMPT FROM REGISTRATION UNDER
SUCH ACT AND UNDER APPLICABLE STATE LAW AND IS TRANSFERRED IN ACCORDANCE WITH
THE PROVISIONS OF SECTION 5.02 OF THE AGREEMENT.
NO TRANSFER OF THIS CERTIFICATE MAY BE MADE TO ANY PERSON, UNLESS THE TRANSFEREE
PROVIDES EITHER A CERTIFICATION REQUIRED PURSUANT TO SECTION 5.02(b) OF THE
AGREEMENT OR AN OPINION OF COUNSEL SATISFACTORY TO THE SERVICER, THE DEPOSITOR
AND THE TRUSTEE THAT THE PURCHASE OF THIS CERTIFICATE WILL NOT CONSTITUTE OR
RESULT IN A NON-EXEMPT PROHIBITED TRANSACTION UNDER SECTION 406 OF THE EMPLOYEE
RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED ("ERISA"), OR SECTION 4975 OF
THE CODE AND WILL NOT SUBJECT THE SERVICER, THE DEPOSITOR OR THE TRUSTEE TO ANY
OBLIGATION OR LIABILITY IN ADDITION TO THOSE UNDERTAKEN IN THE AGREEMENT.
THIS CERTIFICATE HAS NO PRINCIPAL BALANCE AND IS NOT ENTITLED TO ANY
DISTRIBUTIONS IN RESPECT OF PRINCIPAL.
Certificate No. : [___]
Cut-off Date : March 24, 2002
First Distribution Date : May 28, 2002
Initial Certificate Principal Balance $[___________]
of this Certificate ("Denomination") :
Initial Certificate Principal Balances $5,060,000
of all Certificates of this Class :
Pass-Through Rate : The lesser of (i) 9.35%
and (ii) the Net Funds
Cap.
CUSIP : 22540V VA 7
Maturity Date : December 25, 2031
CREDIT SUISSE FIRST BOSTON MORTGAGE SECURITIES CORP.
CSFB ABS Trust Series 2002-MH3
CSFB Manufactured Housing Contract Pass-Through Certificates, Series 2002-MH3,
Class B-2
evidencing a percentage interest in the distributions allocable to the
Class B-2 Certificates with respect to a Trust Fund consisting primarily of
a pool of fixed rate manufactured home loans and installment sales
contracts (the "Contracts") formed and sold by Credit Suisse First Boston
Mortgage Securities Corp.
Principal in respect of this Certificate is distributable monthly as set
forth herein. Accordingly, the Certificate Principal Balance at any time may be
less than the Certificate Principal Balance as set forth herein. This
Certificate does not evidence an obligation of, or an interest in, and is not
guaranteed by the Depositor, the Seller, the Servicer, the Special Servicer or
the Trustee referred to below or any of their respective affiliates. Neither
this Certificate nor the Contracts are guaranteed or insured by any governmental
agency or instrumentality.
This certifies that CREDIT SUISSE FIRST BOSTON CORPORATION is the
registered owner of the Percentage Interest evidenced by this Certificate
(obtained by dividing the denomination of this Certificate by the aggregate of
the denominations of all Certificates of the Class to which this Certificate
belongs) in certain monthly distributions with respect to a Trust Fund
consisting primarily of the Contracts deposited by Credit Suisse First Boston
Mortgage Securities Corp. (the "Depositor"). The Trust Fund was created pursuant
to a Pooling and Servicing Agreement dated as of March 24, 2002 specified above
(the "Agreement") among the Depositor, The CIT Group/Sales Financing, Inc., as
servicer (the "Servicer"), DLJ Mortgage Capital, Inc., as seller (the "Seller"),
Olympus Servicing, L.P., as special servicer (the "Special Servicer") and
JPMorgan Chase Bank, as trustee (the "Trustee"). To the extent not defined
herein, the capitalized terms used herein have the meanings assigned in the
Agreement. This Certificate is issued under and is subject to the terms,
provisions and conditions of the Agreement, to which Agreement the Holder of
this Certificate by virtue of the acceptance hereof assents and by which such
Holder is bound.
Pursuant to the terms of the Agreement, a distribution will be made on the
25th day of each month, or, if such 25th day is not a Business Day, the Business
Day immediately following (the "Distribution Date"), commencing on the first
Distribution Date specified on the face hereof, to the Person in whose name this
Certificate is registered at the close of business on the last Business Day of
the calendar month immediately preceding the Distribution Date (the "Record
Date") in an amount equal to the product of the Percentage Interest evidenced by
this Certificate and the amount required to be distributed to Holders of
Certificates of the Class to which this Certificate belongs on such Distribution
Date pursuant to the Agreement.
Distributions on this Certificate shall be made by wire transfer of
immediately available funds to the account of the Holder hereof at a bank or
other entity having appropriate facilities therefor. The final distribution on
each Certificate will be made in like manner, but only upon presentment and
surrender of such Certificate at the Corporate Trust Office or such other
location specified in the notice to Certificateholders of such final
distribution.
This Certificate is one of a duly authorized issue of Certificates issued
in several Classes designated as CSFB Manufactured Housing Contract Pass-Through
Certificates of the Series specified hereon (herein collectively called the
"Certificates").
The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Trustee and the rights of the Certificateholders under the Agreement at any time
by the Depositor, the Servicer, the Special Servicer, the Seller and the Trustee
with the consent of the Holders of Certificates affected by such amendment
evidencing the requisite Percentage Interest, as provided in the Agreement. Any
such consent by the Holder of this Certificate shall be conclusive and binding
on such Holder and upon all future Holders of this Certificate and of any
Certificate issued upon the transfer hereof or in exchange therefor or in lieu
hereof whether or not notation of such consent is made upon this Certificate.
The Agreement also permits the amendment thereof, in certain limited
circumstances, without the consent of the Holders of any of the Certificates.
No transfer of this Class B-2 Certificate will be made unless such transfer
is exempt from the registration requirements of the Securities Act of 1933, as
amended, and any applicable state securities laws or is made in accordance with
said Act and laws. In the event that such a transfer is to be made, (i) the
Trustee or the Depositor may require an opinion of counsel acceptable to and in
form and substance satisfactory to the Trustee and the Depositor that such
transfer is exempt (describing the applicable exemption and the basis therefor)
from or is being made pursuant to the registration requirements of the
Securities Act of 1933, as amended, and of any applicable statute of any state
and (ii) the transferee shall execute an investment letter in the form described
by the Agreement. The Holder hereof desiring to effect such transfer shall, and
does hereby agree to, indemnify the Trustee, the Depositor and the Servicer and
any agent acting on behalf of the Trustee against any liability that may result
if the transfer is not so exempt or is not made in accordance with such Federal
and state laws. In connection with any such transfer, the Trustee will also
require either (i) an opinion of counsel acceptable to and in form and substance
satisfactory to the Trustee, the Depositor and the Servicer with respect to the
permissibility of such transfer under the Employee Retirement Income Security
Act of 1974, as amended ("ERISA"), and Section 4975 of the Internal Revenue Code
(the "Code") and stating, among other things, that the transferee's acquisition
of a Class B-2 Certificate will not constitute or result in a non-exempt
prohibited transaction under Section 406 of ERISA or Section 4975 of the Code or
(ii) a representation letter, in the form as described by the Agreement, either
stating that the transferee is not an employee benefit or other plan subject to
the prohibited transaction provisions of ERISA or Section 4975 of 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 stating that the
transferee is an insurance company, the source of funds to be used by it to
purchase the Certificate is an "insurance company general account" (within the
meaning of Department of Labor Prohibited Transaction Class Exemption ("PTCE")
95-60), and conditions set forth in Sections I and III of PTCE 95-60 have been
satisfied.
As provided in the Agreement and subject to certain limitations therein set
forth, the transfer of this Certificate is registrable in the Certificate
Register of the Trustee upon surrender of this Certificate for registration of
transfer at the Corporate Trust Office or the office or agency maintained by the
Trustee in New York, New York, accompanied by a written instrument of transfer
in form satisfactory to the Trustee and the Certificate Registrar duly executed
by the holder hereof or such holder's attorney duly authorized in writing, and
thereupon one or more new Certificates of the same Class in authorized
denominations and evidencing the same aggregate Percentage Interest in the Trust
Fund will be issued to the designated transferee or transferees.
The Certificates are issuable only as registered Certificates without
coupons in denominations specified in the Agreement. As provided in the
Agreement and subject to certain limitations therein set forth, Certificates are
exchangeable for new Certificates of the same Class in authorized denominations
and evidencing the same aggregate Percentage Interest, as requested by the
Holder surrendering the same.
No service charge will be made for any such registration of transfer or
exchange, but the Trustee may require payment of a sum sufficient to cover any
tax or other governmental charge payable in connection therewith.
The Servicer, the Depositor, the Special Servicer and the Trustee and any
agent of the Servicer, the Depositor, the Special Servicer or the Trustee may
treat the Person in whose name this Certificate is registered as the owner
hereof for all purposes, and none of the Servicer, the Depositor, the Trustee,
or any such agent shall be affected by any notice to the contrary.
On any Distribution Date on which the aggregate Stated Principal Balance of
the Contracts is less than 10% of the Aggregate Contract Balance as of the
Cut-off Date, the Special Servicer will have the option to repurchase, in whole,
from the Trust Fund all remaining Contracts and all property acquired in respect
of the Contracts at a purchase price determined as provided in the Agreement. In
the event that no such optional termination occurs, the obligations and
responsibilities created by the Agreement will terminate upon the later of the
maturity or other liquidation (or any advance with respect thereto) of the last
Contract remaining in the Trust Fund or the disposition of all property in
respect thereof and the distribution to Certificateholders of all amounts
required to be distributed pursuant to the Agreement. In no event, however, will
the trust created by the Agreement continue beyond the expiration of 21 years
from the death of the last survivor of the descendants living at the date of the
Agreement of a certain person named in the Agreement.
This Certificate shall not be entitled to any benefit under the Agreement
or be valid for any purpose unless manually countersigned by an authorized
signatory of the Trustee.
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly
executed.
Dated: April 11, 2002.
JPMORGAN CHASE BANK,
as Trustee
By:_________________________________________
Name:
Title:
CERTIFICATE OF AUTHENTICATION
This is one of the Certificates referred to in the within-mentioned
Agreement.
Date: April 11, 2002
JPMORGAN CHASE BANK,
as Trustee
By: _______________________________
Authorized Signatory
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(Please print or typewrite name and address including postal zip code of
assignee)
the Percentage Interest evidenced by the within Certificate and hereby
authorizes the transfer of registration of such Percentage Interest to assignee
on the Certificate Register of the Trust Fund.
I (We) further direct the Trustee to issue a new Certificate of a like
denomination and Class, to the above named assignee and deliver such Certificate
to the following address:
--------------------------------------------------------------------------------
Dated:
________________________________________
Signature by or on behalf of assignor
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of distribution:
Distributions shall be made, by wire transfer or otherwise, in immediately
available funds to , for the account of
________________________________________________________________________________
account number ___________, or, if mailed by check, to
________________________________________________________________________________
________________________________________________________________________________
_______________________________________________________________________________.
Applicable statements should be mailed to
________________________________________________________________________________
________________________________________________________________________________
_______________________________________________________________________________.
This information is provided by, the assignee named above, or, as its agent.
EXHIBIT D
FORM OF CLASS R[-I][-II] CERTIFICATE
THIS CERTIFICATE MAY NOT BE HELD BY OR TRANSFERRED TO A NON-UNITED STATES PERSON
OR A DISQUALIFIED ORGANIZATION (AS DEFINED BELOW).
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").
NO TRANSFER OF THIS CERTIFICATE MAY BE MADE TO ANY PERSON, UNLESS THE TRANSFEREE
PROVIDES EITHER A CERTIFICATION PURSUANT TO SECTION 5.02(c ) OF THE AGREEMENT OR
AN OPINION OF COUNSEL SATISFACTORY TO THE SERVICER, THE DEPOSITOR AND THE
TRUSTEE THAT THE PURCHASE OF THIS CERTIFICATE WILL NOT CONSTITUTE OR RESULT IN A
NON-EXEMPT PROHIBITED TRANSACTION UNDER SECTION 406 OF THE EMPLOYEE RETIREMENT
INCOME SECURITY ACT OF 1974, AS AMENDED ("ERISA"), OR SECTION 4975 OF THE CODE
AND WILL NOT SUBJECT THE SERVICER, THE DEPOSITOR OR THE TRUSTEE TO ANY
OBLIGATION OR LIABILITY IN ADDITION TO THOSE UNDERTAKEN IN THE AGREEMENT.
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 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), (B) A FOREIGN GOVERNMENT, ANY INTERNATIONAL ORGANIZATION, OR
ANY AGENCY OR INSTRUMENTALITY OF EITHER OF THE FOREGOING, (C) 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 UNLESS SUCH
ORGANIZATION IS SUBJECT TO THE TAX IMPOSED BY SECTION 511 OF THE CODE (INCLUDING
THE TAX IMPOSED BY SECTION 511 OF THE CODE ON UNRELATED BUSINESS TAXABLE
INCOME), (D) RURAL ELECTRIC AND TELEPHONE COOPERATIVES DESCRIBED IN SECTION
1381(a)(2)(C) OF THE CODE, (E) AN ELECTING LARGE PARTNERSHIP UNDER SECTION
775(a) OF THE CODE (ANY SUCH PERSON DESCRIBED IN THE FOREGOING CLAUSES (A), (B),
(C), (D) OR (E) BEING HEREIN REFERRED TO AS A "DISQUALIFIED ORGANIZATION"), OR
(F) AN AGENT OF A DISQUALIFIED ORGANIZATION, (2) NO PURPOSE OF SUCH TRANSFER IS
TO IMPEDE THE ASSESSMENT OR COLLECTION OF TAX AND (3) SUCH TRANSFEREE SATISFIES
CERTAIN ADDITIONAL CONDITIONS RELATING TO THE FINANCIAL CONDITION OF THE
REGISTER OR ANY TRANSFER, SALE OR OTHER DISPOSITION OF THIS 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 THIS CERTIFICATE BY ACCEPTANCE OF THIS CERTIFICATE
SHALL BE DEEMED TO HAVE CONSENTED TO THE PROVISIONS OF THIS PARAGRAPH.
Certificate No. : [___]
Cut-off Date : March 24, 2001
First Distribution Date : May 28, 2002
Initial Certificate Principal Balance $[___]
of this Certificate ("Denomination") :
Initial Certificate Principal Balances $50
of all Certificates of this Class :
CUSIP : [22540V VC 3]
[2540V VD 1]
Pass-Through Rate : The lesser of (i) 6.70%
and (ii) the Net Funds
Cap.
Maturity Date : December 25, 2031
CREDIT SUISSE FIRST BOSTON MORTGAGE SECURITIES CORP.
CSFB ABS Trust Series 2002-MH3
CSFB Manufactured Housing Contract Pass-Through Certificates, Series 2002-MH3,
Class R[-I][-II]
evidencing a percentage interest in the distributions allocable to the
Class R[-I][-II] Certificates with respect to a Trust Fund consisting
primarily of a pool of fixed rate manufactured home loans and installment
sales contracts (the "Contracts") formed and sold by Credit Suisse First
Boston Mortgage Securities Corp.
Principal in respect of this Certificate is distributable monthly as set
forth herein. Accordingly, the Certificate Principal Balance at any time may be
less than the Certificate Principal Balance as set forth herein. This
Certificate does not evidence an obligation of, or an interest in, and is not
guaranteed by the Depositor, the Seller, the Servicer, the Special Servicer or
the Trustee referred to below or any of their respective affiliates. Neither
this Certificate nor the Contracts are guaranteed or insured by any governmental
agency or instrumentality.
This certifies that [CREDIT SUISSE FIRST BOSTON CORPORATION]/[JPMORGAN
CHASE BANK] is the registered owner of the Percentage Interest evidenced by this
Certificate (obtained by dividing the denomination of this Certificate by the
aggregate of the denominations of all Certificates of the Class to which this
Certificate belongs) in certain monthly distributions with respect to a Trust
Fund consisting primarily of the Contracts deposited by Credit Suisse First
Boston Mortgage Securities Corp. (the "Depositor"). The Trust Fund was created
pursuant to a Pooling and Servicing Agreement dated as of March 24, 2002
specified above (the "Agreement") among the Depositor, The CIT Group/Sales
Financing, Inc., as servicer (the "Servicer"), DLJ Mortgage Capital, Inc. (the
"Seller"), Olympus Servicing, L.P., as special servicer (the "Special Servicer")
and JPMorgan Chase Bank, as trustee (the "Trustee"). To the extent not defined
herein, the capitalized terms used herein have the meanings assigned in the
Agreement. This Certificate is issued under and is subject to the terms,
provisions and conditions of the Agreement, to which Agreement the Holder of
this Certificate by virtue of the acceptance hereof assents and by which such
Holder is bound.
Pursuant to the terms of the Agreement, a distribution will be made on the
25th day of each month, or, if such 25th day is not a Business Day, the Business
Day immediately following (the "Distribution Date"), commencing on the first
Distribution Date specified on the face hereof, to the Person in whose name this
Certificate is registered at the close of business on the last Business Day of
the calendar month immediately preceding the Distribution Date (the "Record
Date") in an amount equal to the product of the Percentage Interest evidenced by
this Certificate and the amount required to be distributed to Holders of
Certificates of the Class to which this Certificate belongs on such Distribution
Date pursuant to the Agreement.
Distributions on this Certificate shall be made by wire transfer of
immediately available funds to the account of the Holder hereof at a bank or
other entity having appropriate facilities therefor. The final distribution on
each Certificate will be made in like manner, but only upon presentment and
surrender of such Certificate at the Corporate Trust Office or such other
location specified in the notice to Certificateholders of such final
distribution.
This Certificate is one of a duly authorized issue of Certificates issued
in several Classes designated as CSFB Manufactured Housing Contract Pass-Through
Certificates of the Series specified hereon (herein collectively called the
"Certificates").
The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Trustee and the rights of the Certificateholders under the Agreement at any time
by the Depositor, the Servicer, the Special Servicer, the Seller and the Trustee
with the consent of the Holders of Certificates affected by such amendment
evidencing the requisite Percentage Interest, as provided in the Agreement. Any
such consent by the Holder of this Certificate shall be conclusive and binding
on such Holder and upon all future Holders of this Certificate and of any
Certificate issued upon the transfer hereof or in exchange therefor or in lieu
hereof whether or not notation of such consent is made upon this Certificate.
The Agreement also permits the amendment thereof, in certain limited
circumstances, without the consent of the Holders of any of the Certificates.
No transfer of this Class R[-I][-II] Certificate will be made unless the
Trustee has received either (i) an opinion of counsel acceptable to and in form
and substance satisfactory to the Trustee, the Depositor and the Servicer with
respect to the permissibility of such transfer under the Employee Retirement
Income Security Act of 1974, as amended ("ERISA"), and Section 4975 of the
Internal Revenue Code (the "Code") and stating, among other things, that the
transferee's acquisition of a Class R Certificate will not constitute or result
in a non-exempt prohibited transaction under Section 406 of ERISA or Section
4975 of the Code or (ii) a representation letter, in the form as described by
the Agreement, stating that the transferee is not an employee benefit or other
plan subject to the prohibited transaction provisions of ERISA or Section 4975
of 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.
As provided in the Agreement and subject to certain limitations therein set
forth, the transfer of this Certificate is registrable in the Certificate
Register of the Trustee upon surrender of this Certificate for registration of
transfer at the Corporate Trust Office or the office or agency maintained by the
Trustee in New York, New York, accompanied by a written instrument of transfer
in form satisfactory to the Trustee and the Certificate Registrar duly executed
by the holder hereof or such holder's attorney duly authorized in writing, and
thereupon one or more new Certificates of the same Class in authorized
denominations and evidencing the same aggregate Percentage Interest in the Trust
Fund will be issued to the designated transferee or transferees.
The Certificates are issuable only as registered Certificates without
coupons in denominations specified in the Agreement. As provided in the
Agreement and subject to certain limitations therein set forth, Certificates are
exchangeable for new Certificates of the same Class in authorized denominations
and evidencing the same aggregate Percentage Interest, as requested by the
Holder surrendering the same.
No service charge will be made for any such registration of transfer or
exchange, but the Trustee may require payment of a sum sufficient to cover any
tax or other governmental charge payable in connection therewith.
The Servicer, the Depositor, the Special Servicer and the Trustee and any
agent of the Servicer, the Depositor, the Special Servicer or the Trustee may
treat the Person in whose name this Certificate is registered as the owner
hereof for all purposes, and none of the Servicer, the Depositor, the Trustee,
or any such agent shall be affected by any notice to the contrary.
On any Distribution Date on which the aggregate Stated Principal Balance of
the Contracts is less than 10% of the Aggregate Contract Balance as of the
Cut-off Date, the Special Servicer will have the option to repurchase, in whole,
from the Trust Fund all remaining Contracts and all property acquired in respect
of the Contracts at a purchase price determined as provided in the Agreement. In
the event that no such optional termination occurs, the obligations and
responsibilities created by the Agreement will terminate upon the later of the
maturity or other liquidation (or any advance with respect thereto) of the last
Contract remaining in the Trust Fund or the disposition of all property in
respect thereof and the distribution to Certificateholders of all amounts
required to be distributed pursuant to the Agreement. In no event, however, will
the trust created by the Agreement continue beyond the expiration of 21 years
from the death of the last survivor of the descendants living at the date of the
Agreement of a certain person named in the Agreement.
This Certificate shall not be entitled to any benefit under the Agreement
or be valid for any purpose unless manually countersigned by an authorized
signatory of the Trustee.
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly
executed.
Dated: April 11, 2002.
JPMORGAN CHASE BANK,
as Trustee
By:_________________________________________
Name:
Title:
CERTIFICATE OF AUTHENTICATION
This is one of the Certificates referred to in the within-mentioned
Agreement.
Date: April 11, 2002
JPMORGAN CHASE BANK,
as Trustee
By: _______________________________
Authorized Signatory
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto _______________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(Please print or typewrite name and address including postal zip code of
assignee)
the Percentage Interest evidenced by the within Certificate and hereby
authorizes the transfer of registration of such Percentage Interest to assignee
on the Certificate Register of the Trust Fund.
I (We) further direct the Trustee to issue a new Certificate of a like
denomination and Class, to the above named assignee and deliver such Certificate
to the following address:
--------------------------------------------------------------------------------
Dated:
________________________________________
Signature by or on behalf of assignor
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of distribution:
Distributions shall be made, by wire transfer or otherwise, in immediately
available funds to , for the account of
________________________________________________________________________________
account number ___________, or, if mailed by check, to
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
Applicable statements should be mailed to
________________________________________________________________________________
________________________________________________________________________________
_______________________________________________________________________________.
This information is provided by, the assignee named above, or, as its agent.
EXHIBIT E
FORM OF CLASS SB CERTIFICATE
THIS CERTIFICATE IS SUBORDINATED IN RIGHT OF PAYMENT TO THE SENIOR CERTIFICATES,
CLASS M CERTIFICATES AND CLASS B CERTIFICATES DESCRIBED IN THE AGREEMENT (AS
DEFINED HEREIN).
THIS CERTIFICATE HAS NOT BEEN AND WILL NOT BE REGISTERED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED, 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 WHICH ARE EXEMPT FROM REGISTRATION UNDER
SUCH ACT AND UNDER APPLICABLE STATE LAW AND IS TRANSFERRED IN ACCORDANCE WITH
THE PROVISIONS OF SECTION 5.02 OF THE AGREEMENT.
NO TRANSFER OF THIS CERTIFICATE MAY BE MADE TO ANY PERSON, UNLESS THE TRANSFEREE
PROVIDES EITHER A CERTIFICATION PURSUANT TO SECTION 5.02(c ) OF THE AGREEMENT OR
AN OPINION OF COUNSEL SATISFACTORY TO THE SERVICER, THE DEPOSITOR AND THE
TRUSTEE THAT THE PURCHASE OF THIS CERTIFICATE WILL NOT CONSTITUTE OR RESULT IN A
NON-EXEMPT PROHIBITED TRANSACTION UNDER SECTION 406 OF THE EMPLOYEE RETIREMENT
INCOME SECURITY ACT OF 1974, AS AMENDED ("ERISA"), OR SECTION 4975 OF THE CODE
AND WILL NOT SUBJECT THE SERVICER, THE DEPOSITOR OR THE TRUSTEE TO ANY
OBLIGATION OR LIABILITY IN ADDITION TO THOSE UNDERTAKEN IN THE AGREEMENT.
Certificate No. : [___]
Cut-off Date : March 24, 2002
First Distribution Date : May 28, 2002
Initial Certificate Principal Balance $[____________]
of this Certificate ("Denomination") :
Initial Certificate Principal Balances $4,255,121.00
of all Certificates ofthis Class :
Percentage Interest : [______]%
CUSIP : N/A
Maturity Date : December 25, 2031
CREDIT SUISSE FIRST BOSTON MORTGAGE SECURITIES CORP.
CSFB ABS Trust Series 2002-MH3
CSFB Manufactured Housing Contract Pass-Through Certificates, Series 2002-MH3,
Class SB
evidencing a percentage interest in the distributions allocable to the
Class SB Certificates with respect to a Trust Fund consisting primarily of
a pool of fixed rate manufactured home loans and installment sales
contracts (the "Contracts") formed and sold by Credit Suisse First Boston
Mortgage Securities Corp.
Principal in respect of this Certificate is distributable monthly as set
forth herein. Accordingly, the Certificate Principal Balance at any time may be
less than the Certificate Principal Balance as set forth herein. This
Certificate does not evidence an obligation of, or an interest in, and is not
guaranteed by the Depositor, the Seller, the Servicer, the Special Servicer or
the Trustee referred to below or any of their respective affiliates. Neither
this Certificate nor the Contracts are guaranteed or insured by any governmental
agency or instrumentality.
This certifies that CREDIT SUISSE FIRST BOSTON CORPORATION is the
registered owner of the Percentage Interest evidenced by this Certificate
(obtained by dividing the denomination of this Certificate by the aggregate of
the denominations of all Certificates of the Class to which this Certificate
belongs) in certain monthly distributions with respect to a Trust Fund
consisting primarily of the Contracts deposited by Credit Suisse First Boston
Mortgage Securities Corp. (the "Depositor"). The Trust Fund was created pursuant
to a Pooling and Servicing Agreement dated as of March 24, 2002 specified above
(the "Agreement") among the Depositor, The CIT Group/Sales Financing, Inc., as
servicer (the "Servicer"), DLJ Mortgage Capital, Inc., as seller (the "Seller"),
Olympus Servicing, L.P., as special servicer (the "Special Servicer") and
JPMorgan Chase Bank, as trustee (the "Trustee"). To the extent not defined
herein, the capitalized terms used herein have the meanings assigned in the
Agreement. This Certificate is issued under and is subject to the terms,
provisions and conditions of the Agreement, to which Agreement the Holder of
this Certificate by virtue of the acceptance hereof assents and by which such
Holder is bound.
Pursuant to the terms of the Agreement, a distribution will be made on the
25th day of each month, or, if such 25th day is not a Business Day, the Business
Day immediately following (the "Distribution Date"), commencing on the first
Distribution Date specified on the face hereof, to the Person in whose name this
Certificate is registered at the close of business on the last Business Day of
the calendar month immediately preceding the Distribution Date (the "Record
Date") in an amount equal to the product of the Percentage Interest evidenced by
this Certificate and the amount required to be distributed to Holders of
Certificates of the Class to which this Certificate belongs on such Distribution
Date pursuant to the Agreement.
Distributions on this Certificate shall be made by wire transfer of
immediately available funds to the account of the Holder hereof at a bank or
other entity having appropriate facilities therefor. The final distribution on
each Certificate will be made in like manner, but only upon presentment and
surrender of such Certificate at the Corporate Trust Office or such other
location specified in the notice to Certificateholders of such final
distribution.
This Certificate is one of a duly authorized issue of Certificates issued
in several Classes designated as CSFB Manufactured Housing Contract Pass-Through
Certificates of the Series specified hereon (herein collectively called the
"Certificates").
The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Trustee and the rights of the Certificateholders under the Agreement at any time
by the Depositor, the Servicer, the Special Servicer, the Seller and the Trustee
with the consent of the Holders of Certificates affected by such amendment
evidencing the requisite Percentage Interest, as provided in the Agreement. Any
such consent by the Holder of this Certificate shall be conclusive and binding
on such Holder and upon all future Holders of this Certificate and of any
Certificate issued upon the transfer hereof or in exchange therefor or in lieu
hereof whether or not notation of such consent is made upon this Certificate.
The Agreement also permits the amendment thereof, in certain limited
circumstances, without the consent of the Holders of any of the Certificates.
No transfer of this Class SB Certificate will be made unless such transfer
is exempt from the registration requirements of the Securities Act of 1933, as
amended, and any applicable state securities laws or is made in accordance with
said Act and laws. In the event that such a transfer is to be made, (i) the
Trustee or the Depositor may require an opinion of counsel acceptable to and in
form and substance satisfactory to the Trustee and the Depositor that such
transfer is exempt (describing the applicable exemption and the basis therefor)
from or is being made pursuant to the registration requirements of the
Securities Act of 1933, as amended, and of any applicable statute of any state
and (ii) the transferee shall execute an investment letter in the form described
by the Agreement. The Holder hereof desiring to effect such transfer shall, and
does hereby agree to, indemnify the Trustee, the Depositor and the Servicer and
any agent acting on behalf of the Trustee against any liability that may result
if the transfer is not so exempt or is not made in accordance with such Federal
and state laws. In connection with any such transfer, the Trustee will also
require either (i) an opinion of counsel acceptable to and in form and substance
satisfactory to the Trustee, the Depositor and the Servicer with respect to the
permissibility of such transfer under the Employee Retirement Income Security
Act of 1974, as amended ("ERISA"), and Section 4975 of the Internal Revenue Code
(the "Code") and stating, among other things, that the transferee's acquisition
of a Class SB Certificate will not constitute or result in a non-exempt
prohibited transaction under Section 406 of ERISA or Section 4975 of the Code or
(ii) a representation letter, in the form as described by the Agreement, either
stating that the transferee is not an employee benefit or other plan subject to
the prohibited transaction provisions of ERISA or Section 4975 of 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 stating that the
transferee is an insurance company, the source of funds to be used by it to
purchase the Certificate is an "insurance company general account" (within the
meaning of Department of Labor Prohibited Transaction Class Exemption ("PTCE")
95-60), and conditions set forth in Sections I and III of PTCE 95-60 have been
satisfied.
As provided in the Agreement and subject to certain limitations therein set
forth, the transfer of this Certificate is registrable in the Certificate
Register of the Trustee upon surrender of this Certificate for registration of
transfer at the Corporate Trust Office or the office or agency maintained by the
Trustee in New York, New York, accompanied by a written instrument of transfer
in form satisfactory to the Trustee and the Certificate Registrar duly executed
by the holder hereof or such holder's attorney duly authorized in writing, and
thereupon one or more new Certificates of the same Class in authorized
denominations and evidencing the same aggregate Percentage Interest in the Trust
Fund will be issued to the designated transferee or transferees.
The Certificates are issuable only as registered Certificates without
coupons in denominations specified in the Agreement. As provided in the
Agreement and subject to certain limitations therein set forth, Certificates are
exchangeable for new Certificates of the same Class in authorized denominations
and evidencing the same aggregate Percentage Interest, as requested by the
Holder surrendering the same.
No service charge will be made for any such registration of transfer or
exchange, but the Trustee may require payment of a sum sufficient to cover any
tax or other governmental charge payable in connection therewith.
The Servicer, the Depositor, the Special Servicer and the Trustee and any
agent of the Servicer, the Depositor, the Special Servicer or the Trustee may
treat the Person in whose name this Certificate is registered as the owner
hereof for all purposes, and none of the Servicer, the Depositor, the Trustee,
or any such agent shall be affected by any notice to the contrary.
On any Distribution Date on which the aggregate Stated Principal Balance of
the Contracts is less than 10% of the Aggregate Contract Balance as of the
Cut-off Date, the Special Servicer will have the option to repurchase, in whole,
from the Trust Fund all remaining Contracts and all property acquired in respect
of the Contracts at a purchase price determined as provided in the Agreement. In
the event that no such optional termination occurs, the obligations and
responsibilities created by the Agreement will terminate upon the later of the
maturity or other liquidation (or any advance with respect thereto) of the last
Contract remaining in the Trust Fund or the disposition of all property in
respect thereof and the distribution to Certificateholders of all amounts
required to be distributed pursuant to the Agreement. In no event, however, will
the trust created by the Agreement continue beyond the expiration of 21 years
from the death of the last survivor of the descendants living at the date of the
Agreement of a certain person named in the Agreement.
This Certificate shall not be entitled to any benefit under the Agreement
or be valid for any purpose unless manually countersigned by an authorized
signatory of the Trustee.
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly
executed.
Dated: April 11, 2002.
JPMORGAN CHASE BANK,
as Trustee
By:_________________________________________
Name:
Title:
CERTIFICATE OF AUTHENTICATION
This is one of the Certificates referred to in the within-mentioned
Agreement.
Date: April 11, 2002
JPMORGAN CHASE BANK,
as Trustee
By: _______________________________
Authorized Signatory
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto _______________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(Please print or typewrite name and address including postal zip code of
assignee)
the Percentage Interest evidenced by the within Certificate and hereby
authorizes the transfer of registration of such Percentage Interest to assignee
on the Certificate Register of the Trust Fund.
I (We) further direct the Trustee to issue a new Certificate of a like
denomination and Class, to the above named assignee and deliver such Certificate
to the following address:
--------------------------------------------------------------------------------
Dated:
________________________________________
Signature by or on behalf of assignor
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of distribution:
Distributions shall be made, by wire transfer or otherwise, in immediately
available funds to , for the account of
_______________________________________________________________________________,
account number ___________, or, if mailed by check, to
________________________________________________________________________________
________________________________________________________________________________
_______________________________________________________________________________.
Applicable statements should be mailed to
________________________________________________________________________________
________________________________________________________________________________
_______________________________________________________________________________.
This information is provided by, the assignee named above, or, as its agent.
EXHIBIT F
TRUST RECEIPT AND INITIAL CERTIFICATION
April 11, 2002
JPMorgan Chase Bank
as Trustee under the Pooling and Servicing Agreement
Credit Suisse First Boston Mortgage Securities Corp.,
CSFB ABS Trust Series 2002-MH3,
CSFB Manufactured Housing Pass-Through
Certificates, Series 2002-MH3
Institutional Trust Services/Structured Finance Services
▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Re: Custodial Agreement, dated as of March 24, 2002, between JPMorgan
Chase Bank, as Trustee, and Bank One Trust Company, N.A., as Custodian
----------------------------------------------------------------------
Ladies and Gentlemen:
In accordance with the provisions of Section 4 of the above-referenced
Custodial Agreement, the undersigned, as the Custodian, hereby certifies as to
each Contract in the Contract Schedule that (i) it has received the original
Contract and Assignment of Contract with respect to each Contract (or Mortgage
Note and Assignment of Mortgage with respect to each Land Home Contract)
identified on the Contract Schedule attached hereto as Exhibit A and (ii) such
Contract or Mortgage Note (as applicable) has been reviewed by it (and with
regards to any Land Home Contracts, such Mortgage Note appears regular on its
face and relates to such Land Home Contract). The Custodian makes no
representations as to (i) the validity, legality, enforceability, sufficiency,
due authorization or genuineness of any of the documents contained in each
Custodial File or of any of the Contracts or (ii) the collectability,
insurability, effectiveness or suitability of any Contract.
The Custodian hereby confirms that it is holding each such Contract,
Assignment of Contract, Mortgage Note and Assignment of Mortgage as agent and
bailee of, and custodian for the exclusive use and benefit, and subject to the
sole direction, of the Trustee pursuant to the terms and conditions of the
Custodial Agreement.
This Trust Receipt and Initial Certification is not divisible or
negotiable.
The Custodian will accept and act on instructions with respect to the
Contract subject hereto upon surrender of this Trust Receipt and Initial
Certification at its office at ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇-▇, ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇.
Attention: Document Custodian.
Capitalized terms used herein shall have the meaning ascribed to them
in the Custodial Agreement.
BANK ONE TRUST COMPANY, N.A.,
as Custodian
By:_______________________________________
Name:_____________________________________
Title:____________________________________
EXHIBIT G
TRUST RECEIPT AND FINAL CERTIFICATION
Trust Receipt #__________
Cut-off Date Principal Balance $__________
JPMorgan Chase Bank
as Trustee under the Pooling and Servicing Agreement
Credit Suisse First Boston Mortgage Securities Corp.,
CSFB ABS Trust Series 2002-MH3,
CSFB Manufactured Housing Pass-Through
Certificates, Series 2002-MH3
Institutional Trust Services/Structured Finance Services
▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Re: Custodial Agreement, dated as of March 24, 2002, between JPMorgan
Chase Bank, as Trustee, and Bank One Trust Company, N.A., as Custodian
----------------------------------------------------------------------
Ladies and Gentlemen:
In accordance with the provisions of Section 6 of the above-referenced
Custodial Agreement, the undersigned, as the Custodian, hereby certifies that as
to each Contract listed on the Contract Schedule (other than any Contract paid
in full or any Contract listed on the attachment hereto) it has reviewed the
Custodial Files and has determined that (i) all documents required to be
delivered to it pursuant to Sections 2(a) and (b) of the Custodial Agreement are
in its possession; (ii) such documents have been reviewed by it and appear
regular on their face and related to such Contract; (iii) all Assignments of
Contract or intervening assignments, as applicable, have been submitted for
recording in the jurisdictions in which recording is necessary; and (iv) each
Contract has been endorsed as provided in Section 2(a)(i) or 2(b)(i) (as
applicable) of the Custodial Agreement and each Contract has been assigned in
accordance with Section 2(e) of the Custodial Agreement. The Custodian makes no
representations as to (i) the validity, legality, enforceability, sufficiency,
due authorization or genuineness of any of the documents contained in each
Custodial File or of any of the Contracts or (ii) the collectability,
insurability, effectiveness or suitability of any such Contract.
The Custodian hereby confirms that it is holding each such Custodial
File as agent and bailee of, and custodian for the exclusive use and benefit,
and subject to the sole direction, of Trustee pursuant to the terms and
conditions of the Custodial Agreement.
This Trust Receipt and Final Certification is not divisible or
negotiable.
The Custodian will accept and act on instructions with respect to the
Contracts subject hereto upon surrender of this Trust Receipt and Final
Certification at its office at ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇-▇, ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇.
Attention: Document Custodian.
Capitalized terms used herein shall have the meaning ascribed to them
in the Custodial Agreement.
BANK ONE TRUST COMPANY, N.A.,
as Custodian
By:_______________________________________
Name:_____________________________________
Title:____________________________________
EXHIBIT H-1
TRANSFER AFFIDAVIT
CREDIT SUISSE FIRST BOSTON MORTGAGE SECURITIES CORP.
CSFB Mortgage Pass-Through Certificates, Series 2002-MH3
Class R-I and Class R-II
STATE OF )
) ss.:
COUNTY OF )
[NAME OF OFFICER], being first duly sworn, deposes and says:
1. That he is [Title of Officer] of [Name of Owner] (record or
beneficial owner of the CSFB Manufactured Housing Contract Pass-Through
Certificates, Series 2002-MH3, Class R-[ ] (the "Owner")), 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" or an electing large partnership as of [date of transfer] within
the meaning of Sections 860E(e)(5) and 775, respectively, of the Internal
Revenue Code of 1986, as amended (the "Code") or an electing large partnership
under Section 775(a) of 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. (For this purpose, a "disqualified organization"
means an electing large partnership under Section 775 of the Code, 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 or electing
large partnerships, under the Code, that applies to all transfers of Class R-[ ]
Certificates after March 31, 1988; (ii) that such tax would be on the transferor
(or, with respect to transfers to electing large partnerships, on each such
partnership), or, if such transfer is through an agent (which person includes a
broker, nominee or middleman) for a disqualified organization, on the agent;
(iii) that the person (other than with respect to transfers to electing large
partnerships) 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 not a disqualified organization 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, unless no significant
purpose of the transfer was to impede the assessment or collection of tax.
4. That the Owner is aware of the tax imposed on a "pass-through
entity" holding Class R-[ ] Certificates if either the pass-through entity is an
electing large partnership under Section 775 of the Code if at any time during
the taxable year of the pass-through entity a disqualified organization 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. 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 (except in the
case of a partnership, to the extent provided in Treasury regulations), or an
estate that is described in Section 7701(a)(30)(D) of the Code, or a trust that
is described in Section 7701(a)(30)(E) of the Code.
6. 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.
7. That the Owner has reviewed the restrictions set forth on the face
of the Class R-[ ] Certificates and the provisions of Section 5.02(d) of the
Pooling and Servicing Agreement under which the Class R-[ ] Certificates were
issued (in particular, clause (iii)(A) and (iii)(B) of Section 5.02(d) which
authorize the Trustee to deliver payments to a person other than the Owner and
negotiate a mandatory sale by the Trustee in the event the Owner holds such
Certificates in violation of Section 5.02(d)). The Owner expressly agrees to be
bound by and to comply with such restrictions and provisions.
8. 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 not a disqualified
organization.
9. The Owner's Taxpayer Identification Number is .
10. This affidavit and agreement relates only to the Class R-[ ]
Certificates held by the Owner and not to any other holder of the Class R-[ ]
Certificates. The Owner understands that the liabilities described herein relate
only to the Class R-[ ] Certificates.
11. That no purpose of the Owner relating to the transfer of any of
the Class R-[ ] Certificates by the Owner is or will be to impede the assessment
or collection of any tax.
12. 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. In this regard, the Owner hereby represents to
and for the benefit of the person from whom it acquired the Class R-[ ]
Certificate that the Owner intends to pay taxes associated with holding such
Class R-[ ] Certificate as they become due, fully understanding that it may
incur tax liabilities in excess of any cash flows generated by the Class R-[ ]
Certificate.
13. 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 Class R-[ ] Certificates remain outstanding.
14. The Purchaser is not an employee benefit plan 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"), or an investment
manager, named fiduciary or a trustee of any such plan, or any other Person
acting, directly or indirectly, on behalf of or purchasing any Certificate with
"plan assets" of any such plan.
[Remainder of page intentionally left blank]
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 [ ]th day of [ ], 2[ ].
[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.
Subscribed and sworn before me this [ ]th day of [___________], 2001.
______________________________________
NOTARY PUBLIC
COUNTY OF ____________________________
STATE OF _____________________________
My Commission expires the _______ day
of ___________, 20___.
EXHIBIT H-2
FORM OF TRANSFEROR CERTIFICATE
__________, 200__
Credit Suisse First Boston Mortgage Securities Corp.
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Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
JPMorgan Chase Bank
Institutional Trust Services/Structured
Finance Services
▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Re: Credit Suisse First Boston Mortgage Securities Corp., CSFB Manufactured
Housing Contract Pass-Through Certificates, Series 2002-MH3, Class R-I
and Class R-II
-----------------------------------------------------------------------
Ladies and Gentlemen:
This letter is delivered to you in connection with the transfer by
(the "Seller") to (the "Purchaser") of $ Initial Certificate Principal Balance
of the Credit Suisse First Boston Mortgage Securities Corp., CSFB ABS Trust
Series 2002-MH3, CSFB Manufactured Housing Contract Pass-Through Certificates,
Series 2002-MH3, Class R-[ ] (the "Certificates"), pursuant to Section 5.02 of
the Pooling and Servicing Agreement dated as of March 24, 2002 (the "Pooling and
Servicing Agreement") among the Credit Suisse First Boston Mortgage Securities,
Corp. (the "Depositor"), The CIT Group/Sales Financing, Inc., as servicer (the
"Servicer"), DLJ Mortgage Capital, Inc., as seller (the "Seller"), Olympus
Servicing, L.P., as special servicer (the "Special Servicer") and JPMorgan Chase
Bank, 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 Seller hereby certifies, represents and warrants to, and
covenants with, the Depositor and the Trustee that:
1. No purpose of the Seller relating to the transfer of the
Certificate by the Seller to the Purchaser is or will be to impede the
assessment or collection of any tax.
2. The Seller understands that the Purchaser has delivered to the
Trustee and the Servicer a transfer affidavit and agreement in the form attached
to the Pooling and Servicing Agreement as Exhibit H-1. The Seller does not know
or believe that any representation contained therein is false.
3. The Seller has at the time of the transfer conducted a reasonable
investigation of the financial condition of the Purchaser as contemplated by
Treasury Regulations Section 1.860E-1(c)(4)(i) and, as a result of that
investigation, the Seller has determined that the Purchaser has historically
paid its debts as they become due and has found no significant evidence to
indicate that the Purchaser will not continue to pay its debts as they become
due in the future. The Seller understands that the transfer of a Class R-[ ]
Certificate may not be respected for United States income tax purposes (and the
Seller may continue to be liable for United States income taxes associated
therewith) unless the Seller has conducted such an investigation.
4. The Seller has no actual knowledge that the proposed Transferee is
not both a United States Person and a Permitted Transferee.
Very truly yours,
_________________________________________
(Seller)
By: _____________________________________
Name: __________________________________
Title: _________________________________
EXHIBIT I
FORM OF INVESTOR REPRESENTATION LETTER
__________, 2____
Credit Suisse First Boston Mortgage Securities Corp.
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▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
JPMorgan Chase Bank
Institutional Trust Services/Structured
Finance Services
▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Re: Credit Suisse First Boston Mortgage Securities Corp., CSFB Manufactured
Housing Contract Pass-Through Certificates, Series 2002-MH3, Class SB
-----------------------------------------------------------------------
Ladies and Gentlemen:
______________________ (the "Purchaser") intends to purchase from (the
"Seller") $ Initial Certificate Principal Balance of the Credit Suisse First
Boston Mortgage Securities Corp., CSFB ABS Trust Series 2002-MH3 CSFB
Manufactured Housing Contract Pass-Through Certificates, Series 2002-MH3, Class
SB (the "Certificates"), issued pursuant to the Pooling and Servicing Agreement
(the "Pooling and Servicing Agreement") dated as of March 24, 2002 among the
Credit Suisse First Boston Mortgage Securities, Corp., as depositor (the
"Depositor"), The CIT Group/Sales Financing, Inc., as servicer (the "Servicer"),
DLJ Mortgage Capital, Inc., as seller (the "Seller"), Olympus Servicing, L.P.,
as special servicer (the "Special Servicer") and JPMorgan Chase Bank, 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 Depositor, the
Trustee and the Servicer 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 Depositor 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.
4. 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.
5. 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 (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 within the
meaning of the Department of Labor ("DOL") regulation at 29 C.F.R.
Section 2510.3-101; 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 DOL Prohibited Transaction Class
Exemption ("PTCE") 95-60), and conditions set forth in Sections I and
III of PTCE 95-60 have been satisfied.
In addition, the Purchaser hereby certifies, represents and warrants
to, and covenants with, the Depositor, the Trustee and the Servicer that the
Purchaser will not transfer such Certificates to any Plan or person unless such
Plan or person meets the requirements set forth in either 5(a) or (b) above.
Very truly yours,
______________________________________________
By: _________________________________________
Name: _______________________________________
Title: ______________________________________
EXHIBIT J
FORM OF TRANSFEROR REPRESENTATION LETTER
___________ , 20__
____________, 200__
Credit Suisse First Boston Mortgage Securities Corp.
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▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
JPMorgan Chase Bank
Institutional Trust Services/Structured
Finance Services
▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Re: Credit Suisse First Boston Mortgage Securities Corp., CSFB Manufactured
Housing Contract Pass-Through Certificates, Series 2002-MH3, Class SB
-----------------------------------------------------------------------
Ladies and Gentlemen:
In connection with the sale by (the "Seller") to (the "Purchaser") of
$ Initial Certificate Principal Balance of the Credit Suisse First Boston
Mortgage Securities Corp., CSFB ABS Trust Series 2002-MH3, CSFB Manufactured
Housing Contract Pass-Through Certificates, Series 2002-MH3, Class SB (the
"Certificates"), issued pursuant to the Pooling and Servicing Agreement (the
"Pooling and Servicing Agreement") dated as of March 24, 2002 among the Credit
Suisse First Boston Mortgage Securities, Corp. (the "Depositor"), The CIT
Group/Sales Financing, Inc., as servicer (the "Servicer"), DLJ Mortgage Capital,
Inc., as seller (the "Seller"), Olympus Servicing, L.P., as special servicer
(the "Special Servicer") and JPMorgan Chase Bank, as trustee (the "Trustee").
The Seller hereby certifies, represents and warrants to, and covenants with, the
Depositor 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.
Very truly yours,
_______________________________________
(Seller)
By: __________________________________
Name: ________________________________
Title: _______________________________
EXHIBIT K
[FORM OF RULE 144A INVESTMENT REPRESENTATION]
Description of Rule 144A Securities, including numbers:
_______________________________________________________
_______________________________________________________
_______________________________________________________
The undersigned seller, as registered holder (the "Seller"), intends
to transfer the Rule 144A Securities described above to the undersigned buyer
(the "Buyer"). Reference is made to a Pooling and Servicing Agreement (the
"Pooling and Servicing Agreement") dated as of March 24, 2002 among the Credit
Suisse First Boston Mortgage Securities, Corp. (the "Depositor"), The CIT
Group/Sales Financing, Inc., as servicer (the "Servicer"), DLJ Mortgage Capital,
Inc., as seller ("DLJMC"), Olympus Servicing, L.P., as special servicer (the
"Special Servicer") and JPMorgan Chase Bank, as trustee (the "Trustee")
1. In connection with such transfer and in accordance with the
agreements pursuant to which the Rule 144A Securities were issued, the Seller
hereby certifies the following facts: Neither the Seller nor anyone acting on
its behalf has offered, transferred, pledged, sold or otherwise disposed of the
Rule 144A Securities, any interest in the Rule 144A Securities or any other
similar security to, or solicited any offer to buy or accept a transfer, pledge
or other disposition of the Rule 144A Securities, any interest in the Rule 144A
Securities or any other similar security from, or otherwise approached or
negotiated with respect to the Rule 144A Securities, any interest in the Rule
144A Securities or any other similar security with, any person in any manner, or
made any general solicitation by means of general advertising or in any other
manner, or taken any other action, that would constitute a distribution of the
Rule 144A Securities under the Securities Act of 1933, as amended (the "1933
Act"), or that would render the disposition of the Rule 144A Securities a
violation of Section 5 of the 1933 Act or require registration pursuant thereto,
and that the Seller has not offered the Rule 144A Securities to any person other
than the Buyer or another "qualified institutional buyer" as defined in Rule
144A under the ▇▇▇▇ ▇▇▇.
2. The Buyer warrants and represents to, and covenants with, the
Seller, the Trustee, the Servicer, the Seller and the Special Servicer as
follows:
(a) The Buyer understands that the Rule 144A Securities have not
been registered under the 1933 Act or the securities laws of any state.
(b) The Buyer considers itself a substantial, sophisticated
institutional investor having such knowledge and experience in financial
and business matters that it is capable of evaluating the merits and risks
of investment in the Rule 144A Securities.
(c) The Buyer has been furnished with all information regarding
the Rule 144A Securities that it has requested from the Seller, the Trustee
or the Servicer.
(d) Neither the Buyer nor anyone acting on its behalf has
offered, transferred, pledged, sold or otherwise disposed of the Rule 144A
Securities, any interest in the Rule 144A Securities or any other similar
security to, or solicited any offer to buy or accept a transfer, pledge or
other disposition of the Rule 144A Securities, any interest in the Rule
144A Securities or any other similar security from, or otherwise approached
or negotiated with respect to the Rule 144A Securities, any interest in the
Rule 144A Securities or any other similar security with, any person in any
manner, or made any general solicitation by means of general advertising or
in any other manner, or taken any other action, that would constitute a
distribution of the Rule 144A Securities under the 1933 Act or that would
render the disposition of the Rule 144A Securities a violation of Section 5
of the 1933 Act or require registration pursuant thereto, nor will it act,
nor has it authorized or will it authorize any person to act, in such
manner with respect to the Rule 144A Securities.
(e) The Buyer is a "qualified institutional buyer" as that term
is defined in Rule 144A under the 1933 Act and has completed either of the
forms of certification to that effect attached hereto as Annex 1 or Annex
2. The Buyer is aware that the sale to it is being made in reliance on Rule
144A. The Buyer is acquiring the Rule 144A Securities for its own account
or the accounts of other qualified institutional buyers, understands that
such Rule 144A Securities may be resold, pledged or transferred only (i) to
a person reasonably believed to be a qualified institutional buyer that
purchases for its own account or for the account of a qualified
institutional buyer to whom notice is given that the resale, pledge or
transfer is being made in reliance on Rule 144A, or (ii) pursuant to
another exemption from registration under the 1933 Act.
[3. The Buyer
(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 within the meaning of the
Department of Labor ("DOL") regulation at 29 C.F.R. Section 2510.3-101; 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 DOL Prohibited Transaction Class Exemption ("PTCE")
95-60), and the conditions set forth in Sections I and III of PTCE 95-60
have been satisfied.]
4. This document may be executed in one or more counterparts and by
the different parties hereto on separate counterparts, each of which, when so
executed, shall be deemed to be an original; such counterparts, together, shall
constitute one and the same document.
IN WITNESS WHEREOF, each of the parties has executed this document as
of the date set forth below.
__________________________________ ______________________________________
Print Name of Seller Print Name of Buyer
By: _____________________________ By: _________________________________
Name: Name:
Title: Title:
Taxpayer Identification Taxpayer Identification:
No: ____________________________ No: _________________________________
Date: ___________________________ Date: ________________________________
EXHIBIT L
REQUEST FOR RELEASE OF DOCUMENTS AND RECEIPT
To: [Address]
Re: Custodial Agreement, dated as of March 24, 2002, between JPMorgan
Chase Bank, as Trustee, and Bank One Trust Company, N.A., as Custodian
----------------------------------------------------------------------
In connection with the administration of the Contracts held by you as
the Custodian on behalf of the Trustee, we request the release, and acknowledge
receipt, of the (Custodial File/[specify documents]) for the Contract described
below, for the reason indicated.
Obligor's Name Address & Zip Code:
----------------------------------
Contract Number:
----------------
Reason for Requesting Documents (check one)
-------------------------------
____ 1. Contract Paid in Full. (The Trustee or the Servicer of such Contract
hereby certifies that all amounts received in connection therewith have been
credited to the account of the Trustee or the Servicer.)
____ 2. Contract Liquidated By ____________________________ (The Trustee or the
Servicer of such Contract hereby certifies that all proceeds of foreclosure,
insurance, condemnation or other liquidation have been finally received and
credited to the account of the Trustee or the Servicer.)
____ 3. Contract in Foreclosure
____ 4. Other (explain) _____________________________________
If box 1 or 2 above is checked, and if all or part of the Custodial
File was previously released to us, please release to us our previous request
and receipt on file with you, as well as any additional documents in your
possession relating to the specified Contract.
If box 3 or 4 above is checked, upon our return of all of the above
documents to you as the Custodian, please acknowledge your receipt by signing in
the space indicated below, and returning this form.
THE CIT GROUP/SALES FINANCING, INC.,
as Servicer
By:__________________________________
_____________________________Name:
____________________________Title:
Date:________________________________
Acknowledgment of Documents returned to the Custodian:
BANK ONE TRUST COMPANY, N.A.,
as Custodian
By:__________________________________
Name:________________________________
Title:_______________________________
Date:________________________________
SCHEDULE I
CONTRACT SCHEDULE
(Provided Upon Request)